New Jersey
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22-3282551
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(State or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification No.)
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64 Old Highway 22, Clinton, NJ
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08809
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(Address of Principal Executive Offices)
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(Zip Code)
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Common Stock, no par value
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NASDAQ
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(Title of Each Class)
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(Name of Exchange on Which Registered)
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•
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Portions of Unity Bancorp’s Proxy Statement for the Annual Meeting of Shareholders to be filed no later than 120 days from
December 31, 2018
are incorporated by reference into Part III of this Annual Report on Form 10-K.
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Description of Financial Data
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Page
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Part I
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Item 1.
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Business
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a) General
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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Item 4A.
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Executive Officers of the Registrant
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Part II
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
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Item 7.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information – None
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Part III
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Item 10.
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Directors, Executive Officers and Corporate Governance; Compliance with Section 16(a) of the Exchange Act
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions and Director Independence
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Item 14.
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Principal Accountant Fees and Services
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Part IV
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Item 15.
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Exhibits and Financial Statement Schedules
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Item 16.
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Form 10-K Summary
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Signatures
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•
|
capped debit card interchange fees for institutions with $10 billion in assets or more at $0.21 plus 5 basis points times the transaction amount, a substantially lower rate than the average rate in effect prior to adoption of the Dodd-Frank Act;
|
•
|
provided for an increase in the FDIC assessment for depository institutions with assets of $10 billion or more, increases in the minimum reserve ratio for the Deposit Insurance Fund ("DIF") from 1.15% to 1.35% and changes the basis for determining FDIC premiums from deposits to assets;
|
•
|
permanently increased the deposit insurance coverage to $250 thousand and allowed depository institutions to pay interest on checking accounts;
|
•
|
created a new Consumer Financial Protection Bureau (“CFPB”) that has rulemaking authority for a wide range of consumer financial protection laws that apply to all banks and has broad authority to enforce these laws;
|
•
|
provided for new disclosure and other requirements relating to executive compensation and corporate governance;
|
•
|
changed standards for Federal preemption of state laws related to federally-chartered institutions and their subsidiaries;
|
•
|
provided mortgage reform provisions regarding a customer’s ability to repay, restricting variable rate lending by requiring the ability to repay to be determined for variable rate loans by using the maximum rate that will apply during the first five years of a variable rate loan term, and making more loans subject to provisions for higher cost loans, new disclosures, and certain other revisions; and
|
•
|
created a financial stability oversight council that will recommend to the FRB increasingly strict rules for capital, leverage, liquidity, risk management and other requirements as companies grow in size and complexity.
|
•
|
activities that the FRB determines to be financial in nature or incidental to a financial activity or which is complementary to a financial activity and does not pose a safety and soundness risk.
|
•
|
capped debit card interchange fees for institutions with $10 billion in assets or more at $0.21 plus 5 basis points times the transaction amount, a substantially lower rate than the average rate in effect prior to adoption of the Dodd-Frank Act;
|
•
|
provided for an increase in the FDIC assessment for depository institutions with assets of $10 billion or more, increases the minimum reserve ratio for the DIF from 1.15% to 1.35% and changes the basis for determining FDIC premiums from deposits to assets;
|
•
|
permanently increased the deposit insurance coverage to $250 thousand and allowed depository institutions to pay interest on checking accounts;
|
•
|
created a new CFPB that has rule making authority for a wide range of consumer financial protection laws that apply to all banks and has broad authority to enforce these laws;
|
•
|
provided for new disclosure and other requirements relating to executive compensation and corporate governance;
|
•
|
changed standards for Federal preemption of state laws related to federally-chartered institutions and their subsidiaries;
|
•
|
provided mortgage reform provisions regarding a customer’s ability to repay, restricting variable rate lending by requiring the ability to repay to be determined for variable rate loans by using the maximum rate that will apply during the first five years of a variable rate loan term, and making more loans subject to provisions for higher cost loans, new disclosures, and certain other revisions; and
|
•
|
created a financial stability oversight council that will recommend to the FRB increasingly strict rules for capital, leverage, liquidity, risk management and other requirements as companies grow in size and complexity.
|
Location
|
|
Leased or Owned
|
|
Date Leased or Acquired
|
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Lease Expiration
|
|
2018 Annual Rental Fee
|
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North Plainfield, NJ
|
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Owned
|
|
1991
|
|
—
|
|
—
|
|
Linden, NJ
|
|
Owned
|
|
1997
|
|
—
|
|
—
|
|
Whitehouse, NJ
|
|
Owned
|
|
1998
|
|
—
|
|
—
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|
Union, NJ
|
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Owned
|
|
2002
|
|
—
|
|
—
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Scotch Plains, NJ
|
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Owned
|
|
2004
|
|
—
|
|
—
|
|
Flemington, NJ
|
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Owned
|
|
2005
|
|
—
|
|
—
|
|
Forks Township, PA
|
|
Leased
|
|
2006
|
|
2019
|
|
62,262
|
|
Middlesex, NJ
|
|
Owned
|
|
2007
|
|
—
|
|
—
|
|
Somerset, NJ
|
|
Leased
|
|
2012
|
|
2023
|
|
125,751
|
|
Washington, NJ
|
|
Owned
|
|
2012
|
|
—
|
|
—
|
|
Highland Park, NJ
|
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Owned
|
|
2013
|
|
—
|
|
—
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South Plainfield, NJ
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|
Owned
|
|
2013
|
|
—
|
|
—
|
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Edison, NJ
|
|
Owned
|
|
2013
|
|
—
|
|
—
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|
Clinton, NJ
|
|
Owned
|
|
2016
|
|
—
|
|
—
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|
Somerville, NJ
|
|
Owned
|
|
2016
|
|
—
|
|
—
|
|
Emerson, NJ
|
|
Owned
|
|
2016
|
|
—
|
|
—
|
|
Ramsey, NJ
|
|
Leased
|
|
2017
|
|
2021
|
|
59,500
|
|
Phillipsburg, NJ
|
|
Leased
|
|
2017
|
|
2022
|
|
60,000
|
|
Clinton, NJ
|
|
Leased
|
|
2018
|
|
2019
|
|
27,600
|
|
Bethlehem, PA
|
|
Leased
|
|
2018
|
|
2028
|
|
75,000
|
|
Name, Age and Position
|
|
Officer Since
|
|
Principal Occupation During Past Five Years
|
John Kauchak, 65, Chief Operating Officer and Executive Vice President of the Company and Bank
|
|
2002
|
|
Previously, Mr. Kauchak was the head of Deposit Operations for Unity Bank from 1996 to 2002.
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Alan J. Bedner, 47, Chief Financial Officer and Executive Vice President of the Company and Bank
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|
2003
|
|
Previously, Mr. Bedner was Controller for Unity Bank from 2001 to 2003.
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Janice Bolomey, 50, Chief Administrative Officer and Executive Vice President of the Company and Bank
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|
2013
|
|
Previously, Ms. Bolomey was Director of Sales for Unity Bank from 2002 to 2013.
|
•
|
Net income before tax increased 21.7 percent to $27.3 million from $22.4 million in the prior year.
|
•
|
Net interest income increased $7.9 million or 17.2 percent to $53.7 million from $45.9 million in the prior year, primarily due to strong loan growth and an increased net interest margin.
|
•
|
Net interest margin expanded 14 basis points to 3.97 percent compared to 3.83 percent in the prior year due to the benefit of a rising rate environment.
|
•
|
Noninterest income was $9.0 million, a $761 thousand increase compared to $8.3 million in the prior year. This increase was primarily due to increased BOLI income and gains on sales of mortgages.
|
•
|
Noninterest expense totaled $33.4 million, an increase of $3.4 million when compared to $30.0 million in the prior year. The increase was primarily the result of expansion costs from two additional branches and increased headcount which resulted in higher compensation, benefits, occupancy and equipment expenses.
|
•
|
The effective tax rate declined to 19.7 percent compared to 42.5 percent in the prior year, as a result of the Tax Act, which was enacted December 22, 2017, and lowered the federal corporate tax rate.
|
•
|
An 11.4 percent increase in total loans driven by a 19.4 percent increase in residential mortgages loans, a 12.8 percent increase in consumer loans and a 10.4 percent increase in commercial loans.
|
•
|
A 15.8 percent increase in total deposits with a 12.6 percent increase in interest-bearing demand deposits and a 5.5 percent increase in noninterest-bearing deposits.
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net income per common share - Basic (1)
|
|
$
|
2.04
|
|
|
$
|
1.22
|
|
|
$
|
1.40
|
|
Net income per common share - Diluted (2)
|
|
$
|
2.01
|
|
|
$
|
1.20
|
|
|
$
|
1.38
|
|
Return on average assets
|
|
1.53
|
%
|
|
1.02
|
%
|
|
1.17
|
%
|
|||
Return on average equity (3)
|
|
17.10
|
%
|
|
11.47
|
%
|
|
15.37
|
%
|
|||
Efficiency ratio (4)
|
|
53.07
|
%
|
|
55.57
|
%
|
|
56.51
|
%
|
(1)
|
Defined as net income divided by weighted average shares outstanding.
|
(2)
|
Defined as net income divided by the sum of weighted average shares and the potential dilutive impact of the exercise of outstanding options.
|
(3)
|
Defined as net income divided by average shareholders' equity.
|
(4)
|
The efficiency ratio is a non-GAAP measure of operational performance. It is defined as noninterest expense divided by the sum of net interest income plus noninterest income less any gains or losses on securities.
|
•
|
Of the $11.9 million increase in interest income on a tax-equivalent basis, $8.8 million of the increase was due primarily to the increased volume of earning assets and $3.1 million of the increase was due to an increase in yields on average interest-earning assets due to the rising interest rate environment.
|
•
|
The yield on interest-earning assets increased 36 basis points to 4.97 percent in
2018
when compared to
2017
.
|
•
|
The average volume of interest-earning assets increased $153.9 million to $1.4 billion in
2018
compared to $1.2 billion in
2017
. This was due primarily to a $189.2 million increase in average loans, primarily commercial, residential mortgage and consumer loans, partially offset by a $29.4 million decrease in average federal funds, interest-bearing deposits and repos and a $6.5 million decrease in average investment securities.
|
•
|
Of the $4.1 million increase in interest expense, $2.3 million was due to increased rates on interest-bearing liabilities and $1.7 million was due to an increase in the volume of average interest-bearing liabilities.
|
•
|
The average cost of interest-bearing liabilities increased 28 basis points to 1.32 percent in
2018
when compared to
2017
. While the cost of interest-bearing deposits increased 37 basis points to 1.23 percent in 2018, the cost of borrowed funds and subordinated debentures decreased 15 basis points to 1.89 percent.
|
•
|
Interest-bearing liabilities averaged $1.0 billion in
2018
, an increase of $118.1 million or 12.9 percent, compared to
2017
. The increase in interest-bearing liabilities was primarily due to an increase in average time deposits.
|
•
|
Of the $8.2 million increase in interest income on a tax-equivalent basis, $6.3 million of the increase was due primarily to the increased volume of earning assets and $2.0 million of the increase was due to an increase in yields on average interest earning assets due to the rising interest rate environment.
|
•
|
The yield on interest-earning assets increased 21 basis points to 4.61 percent in 2017 when compared to 2016.
|
•
|
The average volume of interest-earning assets increased $130.5 million to $1.2 billion in 2017 compared to $1.1 billion in 2016. This was due primarily to a $127.0 million increase in average loans, primarily commercial, residential mortgage, consumer and SBA loans and a $3.6 million increase in average investment securities, partially offset by a $3.5 million decrease in SBA 504 loans.
|
•
|
Of the $686 thousand increase in interest expense, $366 thousand was due to an increase in the volume of average interest- bearing liabilities and $320 thousand was due to increased rates on these liabilities.
|
•
|
The average cost of interest-bearing liabilities remained flat at 1.04 percent in 2017 and 2016. While the cost of interest-bearing deposits increased 4 basis points to 0.86 percent in 2017, the cost of borrowed funds and subordinated debentures decreased 41 basis points to 2.04 percent.
|
•
|
Interest-bearing liabilities averaged $912.5 million in 2017, an increase of $74.7 million or 8.9 percent, compared to 2016. The increase in interest-bearing liabilities was primarily due to an increase in average savings deposits.
|
For the years ended December 31,
|
|
2018
|
|
2017
|
|
||||||||||||||||
|
|
Average balance
|
|
Interest
|
|
Rate/Yield
|
|
Average balance
|
|
Interest
|
|
Rate/Yield
|
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Federal funds sold, interest-bearing deposits and repos
|
|
$
|
40,700
|
|
|
$
|
773
|
|
|
1.90
|
%
|
$
|
70,139
|
|
|
$
|
851
|
|
|
1.21
|
%
|
Federal Home Loan Bank ("FHLB") stock
|
|
6,786
|
|
|
462
|
|
|
6.81
|
|
6,230
|
|
|
370
|
|
|
5.94
|
|
||||
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Taxable
|
|
60,734
|
|
|
1,907
|
|
|
3.14
|
|
66,107
|
|
|
2,029
|
|
|
3.07
|
|
||||
Tax-exempt
|
|
5,104
|
|
|
145
|
|
|
2.84
|
|
6,225
|
|
|
240
|
|
|
3.86
|
|
||||
Total securities (A)
|
|
65,838
|
|
|
2,052
|
|
|
3.12
|
|
72,332
|
|
|
2,269
|
|
|
3.14
|
|
||||
Loans, net of unearned discount:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
SBA loans
|
|
60,321
|
|
|
4,338
|
|
|
7.19
|
|
59,293
|
|
|
3,805
|
|
|
6.42
|
|
||||
Commercial loans
|
|
668,144
|
|
|
33,886
|
|
|
5.07
|
|
571,001
|
|
|
28,150
|
|
|
4.93
|
|
||||
Residential mortgage loans
|
|
396,731
|
|
|
18,837
|
|
|
4.75
|
|
319,074
|
|
|
14,650
|
|
|
4.59
|
|
||||
Consumer loans
|
|
116,311
|
|
|
6,943
|
|
|
5.97
|
|
102,898
|
|
|
5,296
|
|
|
5.15
|
|
||||
Total loans (B)
|
|
1,241,507
|
|
|
64,004
|
|
|
5.16
|
|
1,052,266
|
|
|
51,901
|
|
|
4.93
|
|
||||
Total interest-earning assets
|
|
$
|
1,354,831
|
|
|
$
|
67,291
|
|
|
4.97
|
%
|
$
|
1,200,967
|
|
|
$
|
55,391
|
|
|
4.61
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Noninterest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and due from banks
|
|
24,598
|
|
|
|
|
|
|
23,321
|
|
|
|
|
|
|
||||||
Allowance for loan losses
|
|
(14,640
|
)
|
|
|
|
|
|
(13,033
|
)
|
|
|
|
|
|
||||||
Other assets
|
|
65,770
|
|
|
|
|
|
|
58,481
|
|
|
|
|
|
|
||||||
Total noninterest-earning assets
|
|
75,728
|
|
|
|
|
|
|
68,769
|
|
|
|
|
|
|
||||||
Total assets
|
|
$
|
1,430,559
|
|
|
|
|
|
|
$
|
1,269,736
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest-bearing demand deposits
|
|
$
|
177,022
|
|
|
$
|
1,202
|
|
|
0.68
|
%
|
$
|
159,642
|
|
|
$
|
665
|
|
|
0.42
|
%
|
Savings deposits
|
|
404,613
|
|
|
3,871
|
|
|
0.96
|
|
397,250
|
|
|
2,738
|
|
|
0.69
|
|
||||
Time deposits
|
|
314,224
|
|
|
5,903
|
|
|
1.88
|
|
219,847
|
|
|
3,278
|
|
|
1.49
|
|
||||
Total interest-bearing deposits
|
|
895,859
|
|
|
10,976
|
|
|
1.23
|
|
776,739
|
|
|
6,681
|
|
|
0.86
|
|
||||
Borrowed funds and subordinated debentures
|
|
134,664
|
|
|
2,540
|
|
|
1.89
|
|
135,730
|
|
|
2,772
|
|
|
2.04
|
|
||||
Total interest-bearing liabilities
|
|
$
|
1,030,523
|
|
|
$
|
13,516
|
|
|
1.32
|
%
|
$
|
912,469
|
|
|
$
|
9,453
|
|
|
1.04
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Noninterest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Noninterest-bearing demand deposits
|
|
261,976
|
|
|
|
|
|
|
237,207
|
|
|
|
|
|
|
||||||
Other liabilities
|
|
9,903
|
|
|
|
|
|
|
7,090
|
|
|
|
|
|
|
||||||
Total noninterest-bearing liabilities
|
|
271,879
|
|
|
|
|
|
|
244,297
|
|
|
|
|
|
|
||||||
Total shareholders' equity
|
|
128,157
|
|
|
|
|
|
|
112,970
|
|
|
|
|
|
|
||||||
Total liabilities and shareholders' equity
|
|
$
|
1,430,559
|
|
|
|
|
|
|
$
|
1,269,736
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net interest spread
|
|
|
|
$
|
53,775
|
|
|
3.65
|
%
|
|
|
$
|
45,938
|
|
|
3.57
|
%
|
||||
Tax-equivalent basis adjustment
|
|
|
|
(28
|
)
|
|
|
|
|
|
(81
|
)
|
|
|
|
||||||
Net interest income
|
|
|
|
$
|
53,747
|
|
|
|
|
|
|
$
|
45,857
|
|
|
|
|
||||
Net interest margin
|
|
|
|
|
|
3.97
|
%
|
|
|
|
|
3.83
|
%
|
(A)
|
Yields related to securities exempt from federal and state income taxes are stated on a fully tax-equivalent basis. They are reduced by the nondeductible portion of interest expense, assuming a federal tax rate of 21 percent in 2018 and 35 percent in prior years and applicable state rates.
|
(B)
|
The loan averages are stated net of unearned income, and the averages include loans on which the accrual of interest has been discontinued.
|
2016
|
|
2015
|
|
2014
|
|
||||||||||||||||||||||||||
Average balance
|
|
Interest
|
|
Rate/Yield
|
|
Average balance
|
|
Interest
|
|
Rate/Yield
|
|
Average balance
|
|
Interest
|
|
Rate/Yield
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
$
|
71,265
|
|
|
$
|
214
|
|
|
0.30
|
%
|
$
|
34,883
|
|
|
$
|
39
|
|
|
0.11
|
%
|
$
|
44,900
|
|
|
$
|
44
|
|
|
0.10
|
%
|
||
5,241
|
|
|
245
|
|
|
4.67
|
|
3,695
|
|
|
155
|
|
|
4.19
|
|
3,972
|
|
|
165
|
|
|
4.15
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
61,053
|
|
|
1,698
|
|
|
2.78
|
|
62,937
|
|
|
1,459
|
|
|
2.32
|
|
81,334
|
|
|
2,183
|
|
|
2.68
|
|
||||||||
7,649
|
|
|
307
|
|
|
4.01
|
|
11,739
|
|
|
421
|
|
|
3.59
|
|
14,493
|
|
|
526
|
|
|
3.63
|
|
||||||||
68,702
|
|
|
2,005
|
|
|
2.92
|
|
74,676
|
|
|
1,880
|
|
|
2.52
|
|
95,827
|
|
|
2,709
|
|
|
2.83
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
56,834
|
|
|
3,181
|
|
|
5.60
|
|
50,997
|
|
|
2,693
|
|
|
5.28
|
|
53,232
|
|
|
2,467
|
|
|
4.63
|
|
||||||||
510,614
|
|
|
25,256
|
|
|
4.95
|
|
459,068
|
|
|
22,771
|
|
|
4.96
|
|
413,081
|
|
|
21,005
|
|
|
5.08
|
|
||||||||
273,612
|
|
|
12,205
|
|
|
4.46
|
|
246,278
|
|
|
11,048
|
|
|
4.49
|
|
196,333
|
|
|
8,898
|
|
|
4.53
|
|
||||||||
84,222
|
|
|
4,021
|
|
|
4.77
|
|
69,580
|
|
|
3,202
|
|
|
4.60
|
|
51,188
|
|
|
2,301
|
|
|
4.50
|
|
||||||||
925,282
|
|
|
44,663
|
|
|
4.83
|
|
825,923
|
|
|
39,714
|
|
|
4.81
|
|
713,834
|
|
|
34,671
|
|
|
4.86
|
|
||||||||
$
|
1,070,490
|
|
|
$
|
47,127
|
|
41,788
|
|
4.40
|
%
|
$
|
939,177
|
|
|
$
|
41,788
|
|
41,788
|
|
4.45
|
%
|
$
|
858,533
|
|
|
$
|
37,589
|
|
|
4.38
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
24,409
|
|
|
|
|
|
|
25,952
|
|
|
|
|
|
|
27,021
|
|
|
|
|
|
|
|||||||||||
(12,841
|
)
|
|
|
|
|
|
(12,638
|
)
|
|
|
|
|
|
(13,124
|
)
|
|
|
|
|
|
|||||||||||
50,103
|
|
|
|
|
|
|
43,742
|
|
|
|
|
|
|
44,312
|
|
|
|
|
|
|
|||||||||||
61,671
|
|
|
|
|
|
|
57,056
|
|
|
|
|
|
|
58,209
|
|
|
|
|
|
|
|||||||||||
$
|
1,132,161
|
|
|
|
|
|
|
$
|
996,233
|
|
|
|
|
|
|
$
|
916,742
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
$
|
133,212
|
|
|
$
|
537
|
|
|
0.40
|
%
|
$
|
126,876
|
|
|
$
|
438
|
|
|
0.35
|
%
|
$
|
125,706
|
|
|
$
|
430
|
|
|
0.34
|
%
|
||
328,486
|
|
|
1,742
|
|
|
0.53
|
|
290,848
|
|
|
1,088
|
|
|
0.37
|
|
274,395
|
|
|
856
|
|
|
0.31
|
|
||||||||
261,225
|
|
|
3,670
|
|
|
1.40
|
|
240,132
|
|
|
3,160
|
|
|
1.32
|
|
214,984
|
|
|
2,777
|
|
|
1.29
|
|
||||||||
722,923
|
|
|
5,949
|
|
|
0.82
|
|
657,856
|
|
|
4,686
|
|
|
0.71
|
|
615,085
|
|
|
4,063
|
|
|
0.66
|
|
||||||||
114,853
|
|
|
2,818
|
|
|
2.45
|
|
87,652
|
|
|
2,974
|
|
|
3.39
|
|
91,230
|
|
|
3,243
|
|
|
3.55
|
|
||||||||
$
|
837,776
|
|
|
$
|
8,767
|
|
|
1.04
|
%
|
$
|
745,508
|
|
|
$
|
7,660
|
|
|
1.03
|
%
|
$
|
706,315
|
|
|
$
|
7,306
|
|
|
1.03
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
199,554
|
|
|
|
|
|
|
172,172
|
|
|
|
|
|
|
144,310
|
|
|
|
|
|
|
|||||||||||
8,895
|
|
|
|
|
|
|
4,611
|
|
|
|
|
|
|
3,764
|
|
|
|
|
|
|
|||||||||||
208,449
|
|
|
|
|
|
|
176,783
|
|
|
|
|
|
|
148,074
|
|
|
|
|
|
|
|||||||||||
85,936
|
|
|
|
|
|
|
73,942
|
|
|
|
|
|
|
62,353
|
|
|
|
|
|
|
|||||||||||
$
|
1,132,161
|
|
|
|
|
|
|
$
|
996,233
|
|
|
|
|
|
|
$
|
916,742
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
$
|
38,360
|
|
|
3.36
|
%
|
|
|
$
|
34,128
|
|
|
3.42
|
%
|
|
|
$
|
30,283
|
|
|
3.35
|
%
|
||||||||
|
|
(103
|
)
|
|
|
|
|
|
(137
|
)
|
|
|
|
|
|
(171
|
)
|
|
|
|
|||||||||||
|
|
$
|
38,257
|
|
|
|
|
|
|
$
|
33,991
|
|
|
|
|
|
|
$
|
30,112
|
|
|
|
|
||||||||
|
|
|
|
3.58
|
%
|
|
|
|
|
3.63
|
%
|
|
|
|
|
3.53
|
%
|
|
|
For the years ended December 31,
|
||||||||||||||||||||||
|
|
2018 versus 2017
|
|
2017 versus 2016
|
||||||||||||||||||||
|
|
Increase (decrease) due to change in:
|
|
Increase (decrease) due to change in:
|
||||||||||||||||||||
(In thousands on a tax-equivalent basis)
|
|
Volume
|
|
Rate
|
|
Net
|
|
Volume
|
|
Rate
|
|
Net
|
||||||||||||
Interest income:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Federal funds sold, interest-bearing deposits and repos
|
|
$
|
(443
|
)
|
|
$
|
365
|
|
|
$
|
(78
|
)
|
|
$
|
(3
|
)
|
|
$
|
640
|
|
|
$
|
637
|
|
Federal Home Loan Bank stock
|
|
35
|
|
|
57
|
|
|
92
|
|
|
51
|
|
|
74
|
|
|
125
|
|
||||||
Securities
|
|
(206
|
)
|
|
(11
|
)
|
|
(217
|
)
|
|
91
|
|
|
173
|
|
|
264
|
|
||||||
Net loans
|
|
9,386
|
|
|
2,717
|
|
|
12,103
|
|
|
6,109
|
|
|
1,129
|
|
|
7,238
|
|
||||||
Total interest income
|
|
$
|
8,772
|
|
|
$
|
3,128
|
|
|
$
|
11,900
|
|
|
$
|
6,248
|
|
|
$
|
2,016
|
|
|
$
|
8,264
|
|
Interest expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-bearing demand deposits
|
|
$
|
80
|
|
|
$
|
457
|
|
|
$
|
537
|
|
|
$
|
102
|
|
|
$
|
26
|
|
|
$
|
128
|
|
Savings deposits
|
|
51
|
|
|
1,082
|
|
|
1,133
|
|
|
407
|
|
|
589
|
|
|
996
|
|
||||||
Time deposits
|
|
1,631
|
|
|
994
|
|
|
2,625
|
|
|
(613
|
)
|
|
221
|
|
|
(392
|
)
|
||||||
Total interest-bearing deposits
|
|
1,762
|
|
|
2,533
|
|
|
4,295
|
|
|
(104
|
)
|
|
836
|
|
|
732
|
|
||||||
Borrowed funds and subordinated debentures
|
|
(23
|
)
|
|
(209
|
)
|
|
(232
|
)
|
|
470
|
|
|
(516
|
)
|
|
(46
|
)
|
||||||
Total interest expense
|
|
1,739
|
|
|
2,324
|
|
|
4,063
|
|
|
366
|
|
|
320
|
|
|
686
|
|
||||||
Net interest income - fully tax-equivalent
|
|
$
|
7,033
|
|
|
$
|
804
|
|
|
$
|
7,837
|
|
|
$
|
5,882
|
|
|
$
|
1,696
|
|
|
$
|
7,578
|
|
Decrease in tax-equivalent adjustment
|
|
|
|
|
|
53
|
|
|
|
|
|
|
22
|
|
||||||||||
Net interest income
|
|
|
|
|
|
$
|
7,890
|
|
|
|
|
|
|
$
|
7,600
|
|
|
|
For the years ended December 31,
|
||||||||||
(In thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Branch fee income
|
|
$
|
1,519
|
|
|
$
|
1,384
|
|
|
$
|
1,269
|
|
Service and loan fee income
|
|
2,130
|
|
|
2,100
|
|
|
1,020
|
|
|||
Gain on sale of SBA loans held for sale, net
|
|
1,680
|
|
|
1,617
|
|
|
2,099
|
|
|||
Gain on sale of mortgage loans, net
|
|
1,719
|
|
|
1,530
|
|
|
2,621
|
|
|||
BOLI income
|
|
975
|
|
|
469
|
|
|
378
|
|
|||
Net security (losses) gains
|
|
(199
|
)
|
|
62
|
|
|
424
|
|
|||
Gain on repurchase of subordinated debt
|
|
—
|
|
|
—
|
|
|
2,264
|
|
|||
Other income
|
|
1,207
|
|
|
1,108
|
|
|
985
|
|
|||
Total noninterest income
|
|
$
|
9,031
|
|
|
$
|
8,270
|
|
|
$
|
11,060
|
|
•
|
Branch fee income increased $135 thousand from the prior year primarily due to increased check printing income and higher levels of service charges from commercial checking accounts.
|
•
|
Service and loan fee income, which consists of prepayment fees, application fees and servicing fees, increased $30 thousand in 2018.
|
•
|
Net gains on the sale of SBA loans increased $63 thousand to $1.7 million in
2018
due to an increase in the volume of SBA loans sales. In
2018
, $22.3 million in SBA loans were sold compared to $19.4 million in the prior year. SBA loan sales in 2018 averaged a lower bid rate compared to 2017, which resulted in lower gains per sale.
|
•
|
During the year, $80.7 million in residential mortgage loans were sold at a gain of $1.7 million compared to $82.1 million in loans sold at a gain of $1.5 million during the prior year. The increased gain was a result of portfolio sales of $13.3 million in 2018 vs $3.5 million in 2017.
|
•
|
BOLI income increased $506 thousand from prior year, primarily due to a $291 thousand death benefit in the third quarter of 2018, and the increase in income related to the purchase of a $10.0 million Separate Account BOLI policy during the third quarter of 2017.
|
•
|
There were net losses on the sales of securities totaling $4 thousand in 2018 compared to gains of $62 thousand in 2017. Due to the adoption of ASU 2016-01 in January of 2018, there was an unrealized loss of $195 thousand recognized during the year resulting from a decrease in the market value of equity securities.
|
•
|
Other income, which includes check card related income and miscellaneous service charges, totaled $1.2 million and $1.1 million in 2018 and 2017, respectively. The increase was primarily due to increases in Visa check card interchange fees and wire transfer fees.
|
•
|
Branch fee income increased $115 thousand from the prior year due to higher levels of overdraft fees and service charges from commercial checking accounts and paper statement fees.
|
•
|
Service and loan fee income increased $1.1 million in 2017 primarily due to increased loan interest rate swap program fees and loan and mortgage servicing income.
|
•
|
Net gains on the sale of SBA loans decreased $482 thousand to $1.6 million in 2017 due to a decrease in the volume of SBA loans sales. In 2017, $19.4 million in SBA loans were sold compared to $24.7 million in the prior year.
|
•
|
During the year, $82.1 million in residential mortgage loans were sold at a gain of $1.5 million compared to $108.1 million in loans sold at a gain of $2.6 million during the prior year. The decrease was by design as management elected to hold more residential mortgages in portfolio for long term investment.
|
•
|
BOLI income increased $91 thousand from prior year, primarily due to the purchase of a $10.0 million Separate Account BOLI policy.
|
•
|
Net gains on the sale of securities totaled $62 thousand and $424 thousand in 2017 and 2016, respectively.
|
•
|
Other income, which includes check card related income and miscellaneous service charges, totaled $1.1 million and $985 thousand in 2017 and 2016, respectively. The increase was primarily due to increases in Visa check card interchange fees and rental income.
|
|
|
For the years ended December 31,
|
||||||||||
(In thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Compensation and benefits
|
|
$
|
20,119
|
|
|
$
|
17,117
|
|
|
$
|
14,952
|
|
Occupancy
|
|
2,739
|
|
|
2,381
|
|
|
2,360
|
|
|||
Processing and communications
|
|
2,788
|
|
|
2,551
|
|
|
2,628
|
|
|||
Furniture and equipment
|
|
2,348
|
|
|
2,079
|
|
|
1,700
|
|
|||
Professional services
|
|
934
|
|
|
1,022
|
|
|
976
|
|
|||
Loan collection and OREO (recoveries) expenses
|
|
(288
|
)
|
|
463
|
|
|
654
|
|
|||
Other loan expenses
|
|
135
|
|
|
186
|
|
|
152
|
|
|||
Deposit insurance
|
|
782
|
|
|
546
|
|
|
713
|
|
|||
Advertising
|
|
1,411
|
|
|
1,179
|
|
|
1,095
|
|
|||
Director fees
|
|
671
|
|
|
637
|
|
|
559
|
|
|||
Other expenses
|
|
1,782
|
|
|
1,883
|
|
|
1,842
|
|
|||
Total noninterest expense
|
|
$
|
33,421
|
|
|
$
|
30,044
|
|
|
$
|
27,631
|
|
•
|
Compensation and benefits expense, the largest component of noninterest expense, increased $3.0 million for the year ended
December 31, 2018
, when compared to
2017
. Expenses have risen as we expanded our branch network, lending and support staff. This additional headcount has resulted in higher salary, commission and benefit expense. In addition, benefits expense for 2018 included a $1.1 million supplemental executive retirement plan expense.
|
•
|
Occupancy expense increased $358 thousand in 2018 primarily due to the addition of branches in Ramsey, New Jersey, and in Bethlehem, Pennsylvania.
|
•
|
Processing and communications increased $237 thousand for the year ended December 31, 2018 when compared to 2017, primarily due to increased bank services from the addition of new branches.
|
•
|
Furniture and equipment expense increased $269 thousand in
2018
, due to investment in our technology infrastructure through network and software upgrades that will improve our efficiency and help keep our data secure.
|
•
|
Professional service fees decreased $88 thousand in
2018
, primarily due to lower consulting expenses, partially offset by increased loan review, legal and external audit and tax expenses.
|
•
|
Loan collection and OREO expenses decreased $751 thousand in
2018
, primarily due to a $317 thousand recovery on an OREO property in 2018, compared to a loss of $253 thousand on a sale in 2017.
|
•
|
Other loan expenses, which consist of expenses such as appraisals, filings and credit reports, decreased $51 thousand in 2018, when compared to 2017.
|
•
|
Deposit insurance expense increased $236 thousand in
2018
when compared to
2017
due to asset growth.
|
•
|
Advertising expenses increased $232 thousand for the year ended
December 31, 2018
in support of our retail and lending sales as well as branch expansions and retail promotions.
|
•
|
Director fees increased $34 thousand in
2018
when compared to
2017
.
|
•
|
Other expenses decreased $101 thousand in
2018
, primarily due to a decreased provision for loan commitments.
|
•
|
Compensation and benefits expense, the largest component of noninterest expense, increased $2.2 million for the year ended December 31, 2017, when compared to 2016. Expenses have risen as we expanded our branch network, lending and support staff. This additional headcount has resulted in higher salary, commission and benefit expense.
|
•
|
Occupancy expense remained relatively flat with expenses of $2.4 million in 2017 and 2016.
|
•
|
Processing and communications remained relatively flat with expenses of $2.6 million in 2017 and 2016.
|
•
|
Furniture and equipment expense increased $379 thousand in 2017, due to investment in our technology infrastructure through equipment, network and software upgrades that will improve our efficiency and keep our data secure.
|
•
|
Professional service fees increased $46 thousand in 2017, primarily due to increased consulting expenses, partially offset by decreased loan review and legal expenses.
|
•
|
Loan collection and OREO expenses decreased $191 thousand in 2017, primarily due to lower legal and property tax expense.
|
•
|
Other loan expenses increased $34 thousand in 2017, when compared to 2016, primarily due to an increase in loan appraisal expenses, partially offset by decreases in site visits, inspections and tax service fees.
|
•
|
Deposit insurance expense decreased $167 thousand in 2017 when compared to 2016 as a result of a drop in our assessment rate due to the capital raise in December 2016.
|
•
|
Advertising expenses increased $84 thousand for the year ended December 31, 2017 in support of our retail and lending sales as well as the branch expansion.
|
•
|
Director fees increased $78 thousand in 2017 when compared to 2016.
|
•
|
Other expenses increased $41 thousand in 2017, primarily due to increased officer and employee training and provision for commitments.
|
•
|
$5.4 million in principal payments, maturities and called bonds,
|
•
|
$572 thousand of depreciation in the market value of the portfolio. At
December 31, 2018
, the portfolio had a net unrealized loss of $1.0 million compared to a net unrealized loss of $476 thousand at
December 31, 2017
. These net unrealized losses are reflected net of tax in shareholders’ equity as accumulated other comprehensive income, and
|
•
|
$181 thousand in net amortization of premiums, partially offset by
|
•
|
$579 thousand from the purchase of one corporate bond.
|
•
|
$1.4 million in principal payments and maturities and
|
•
|
$39 thousand in net amortization of premiums.
|
•
|
$1.1 million from the purchase of six community bank holdings, partially offset by
|
•
|
$195 thousand in market value adjustments throughout the year.
|
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||||||||||||
(In thousands, except percentages)
|
|
Amount
|
|
% of total
|
|
Amount
|
|
% of total
|
|
Amount
|
|
% of total
|
|
Amount
|
|
% of total
|
|
Amount
|
|
% of total
|
|||||||||||||||
Ending balance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
SBA loans held for investment
|
|
$
|
39,333
|
|
|
3.0
|
%
|
|
$
|
43,999
|
|
|
3.8
|
%
|
|
$
|
42,492
|
|
|
4.4
|
%
|
|
$
|
39,393
|
|
|
4.4
|
%
|
|
$
|
40,401
|
|
|
5.3
|
%
|
Commercial loans
|
|
694,102
|
|
|
53.2
|
|
|
628,865
|
|
|
53.7
|
|
|
535,515
|
|
|
55.0
|
|
|
494,871
|
|
|
55.6
|
|
|
436,271
|
|
|
57.2
|
|
|||||
Residential mortgage loans
|
|
436,056
|
|
|
33.4
|
|
|
365,145
|
|
|
31.2
|
|
|
289,093
|
|
|
29.7
|
|
|
264,523
|
|
|
29.8
|
|
|
220,878
|
|
|
29.0
|
|
|||||
Consumer loans
|
|
123,904
|
|
|
9.5
|
|
|
109,855
|
|
|
9.4
|
|
|
91,541
|
|
|
9.4
|
|
|
77,057
|
|
|
8.7
|
|
|
59,096
|
|
|
7.8
|
|
|||||
Total loans held for investment
|
|
1,293,395
|
|
|
99.1
|
|
|
1,147,864
|
|
|
98.1
|
|
|
958,641
|
|
|
98.5
|
|
|
875,844
|
|
|
98.5
|
|
|
756,646
|
|
|
99.3
|
|
|||||
SBA loans held for sale
|
|
11,171
|
|
|
0.9
|
|
|
22,810
|
|
|
1.9
|
|
|
14,773
|
|
|
1.5
|
|
|
13,114
|
|
|
1.5
|
|
|
5,179
|
|
|
0.7
|
|
|||||
Total loans
|
|
$
|
1,304,566
|
|
|
100.0
|
%
|
|
$
|
1,170,674
|
|
|
100.0
|
%
|
|
$
|
973,414
|
|
|
100.0
|
%
|
|
$
|
888,958
|
|
|
100.0
|
%
|
|
$
|
761,825
|
|
|
100.0
|
%
|
|
|
December 31, 2018
|
||||||||||||||
(In thousands)
|
|
One year or less
|
|
One to five years
|
|
Over five years
|
|
Total
|
||||||||
SBA loans
|
|
$
|
44,745
|
|
|
$
|
4,004
|
|
|
$
|
1,755
|
|
|
$
|
50,504
|
|
Commercial loans
|
|
|
|
|
|
|
|
|
||||||||
SBA 504 loans
|
|
12,363
|
|
|
13,909
|
|
|
2,883
|
|
|
29,155
|
|
||||
Commercial other
|
|
17,416
|
|
|
42,093
|
|
|
45,078
|
|
|
104,587
|
|
||||
Commercial real estate
|
|
61,624
|
|
|
362,157
|
|
|
86,589
|
|
|
510,370
|
|
||||
Commercial real estate construction
|
|
13,059
|
|
|
23,771
|
|
|
13,160
|
|
|
49,990
|
|
||||
Total
|
|
$
|
149,207
|
|
|
$
|
445,934
|
|
|
$
|
149,465
|
|
|
$
|
744,606
|
|
Amount of loans with maturities or repricing dates greater than one year:
|
|
|
|
|
||||||||||||
Fixed interest rates
|
|
|
|
|
|
|
|
$
|
179,660
|
|
||||||
Floating or adjustable interest rates
|
|
|
|
|
|
|
|
415,739
|
|
|||||||
Total
|
|
|
|
|
|
|
|
$
|
595,399
|
|
(In thousands, except percentages)
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Nonperforming by category:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
SBA loans held for investment (1)
|
|
$
|
1,560
|
|
|
$
|
632
|
|
|
$
|
1,168
|
|
|
$
|
1,764
|
|
|
$
|
3,348
|
|
Commercial loans
|
|
1,076
|
|
|
68
|
|
|
939
|
|
|
2,682
|
|
|
6,830
|
|
|||||
Residential mortgage loans
|
|
4,211
|
|
|
1,669
|
|
|
2,672
|
|
|
2,224
|
|
|
645
|
|
|||||
Consumer loans
|
|
26
|
|
|
625
|
|
|
2,458
|
|
|
590
|
|
|
545
|
|
|||||
Total nonperforming loans (2)
|
|
$
|
6,873
|
|
|
$
|
2,994
|
|
|
$
|
7,237
|
|
|
$
|
7,260
|
|
|
$
|
11,368
|
|
OREO
|
|
56
|
|
|
426
|
|
|
1,050
|
|
|
1,591
|
|
|
1,162
|
|
|||||
Total nonperforming assets
|
|
$
|
6,929
|
|
|
$
|
3,420
|
|
|
$
|
8,287
|
|
|
$
|
8,851
|
|
|
$
|
12,530
|
|
Past due 90 days or more and still accruing interest:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
SBA loans held for investment
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
161
|
|
Commercial loans
|
|
—
|
|
|
60
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Residential mortgage loans
|
|
98
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
722
|
|
|||||
Total past due 90 days or more and still accruing interest
|
|
$
|
98
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
890
|
|
Nonperforming loans to total loans
|
|
0.53
|
%
|
|
0.26
|
%
|
|
0.74
|
%
|
|
0.82
|
%
|
|
1.49
|
%
|
|||||
Nonperforming loans and TDRs to total loans (3)
|
|
0.58
|
|
|
0.32
|
|
|
0.74
|
|
|
1.16
|
|
|
1.96
|
|
|||||
Nonperforming assets to total loans and OREO
|
|
0.53
|
|
|
0.29
|
|
|
0.85
|
|
|
0.99
|
|
|
1.64
|
|
|||||
Nonperforming assets to total assets
|
|
0.44
|
|
|
0.23
|
|
|
0.70
|
|
|
0.82
|
|
|
1.24
|
|
|||||
(1) Guaranteed SBA loans included above
|
|
$
|
89
|
|
|
$
|
27
|
|
|
$
|
60
|
|
|
$
|
288
|
|
|
$
|
1,569
|
|
(2) Nonperforming TDRs included above
|
|
—
|
|
|
—
|
|
|
153
|
|
|
293
|
|
|
2,960
|
|
|||||
(3) Performing TDRs
|
|
745
|
|
|
786
|
|
|
—
|
|
|
3,015
|
|
|
3,548
|
|
|
|
For the years ended December 31,
|
||||||||||||||||||
(In thousands, except percentages)
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Balance, beginning of year
|
|
$
|
13,556
|
|
|
$
|
12,579
|
|
|
$
|
12,759
|
|
|
$
|
12,551
|
|
|
$
|
13,141
|
|
Provision charged to expense
|
|
2,050
|
|
|
1,650
|
|
|
1,220
|
|
|
500
|
|
|
2,550
|
|
|||||
Charge-offs:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
SBA loans held for investment
|
|
354
|
|
|
293
|
|
|
557
|
|
|
370
|
|
|
1,053
|
|
|||||
Commercial loans
|
|
10
|
|
|
227
|
|
|
775
|
|
|
898
|
|
|
1,129
|
|
|||||
Residential mortgage loans
|
|
—
|
|
|
55
|
|
|
101
|
|
|
50
|
|
|
740
|
|
|||||
Consumer loans
|
|
22
|
|
|
336
|
|
|
30
|
|
|
130
|
|
|
593
|
|
|||||
Total charge-offs
|
|
386
|
|
|
911
|
|
|
1,463
|
|
|
1,448
|
|
|
3,515
|
|
|||||
Recoveries:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
SBA loans held for investment
|
|
72
|
|
|
121
|
|
|
33
|
|
|
54
|
|
|
140
|
|
|||||
Commercial loans
|
|
30
|
|
|
102
|
|
|
29
|
|
|
1,052
|
|
|
166
|
|
|||||
Residential mortgage loans
|
|
13
|
|
|
12
|
|
|
—
|
|
|
49
|
|
|
60
|
|
|||||
Consumer loans
|
|
153
|
|
|
3
|
|
|
1
|
|
|
1
|
|
|
9
|
|
|||||
Total recoveries
|
|
268
|
|
|
238
|
|
|
63
|
|
|
1,156
|
|
|
375
|
|
|||||
Total net charge-offs
|
|
118
|
|
|
673
|
|
|
1,400
|
|
|
292
|
|
|
3,140
|
|
|||||
Balance, end of year
|
|
$
|
15,488
|
|
|
$
|
13,556
|
|
|
$
|
12,579
|
|
|
$
|
12,759
|
|
|
$
|
12,551
|
|
Selected loan quality ratios:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net charge-offs/recoveries to average loans:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
SBA loans held for investment
|
|
0.47
|
%
|
|
0.29
|
%
|
|
0.92
|
%
|
|
0.62
|
%
|
|
1.72
|
%
|
|||||
Commercial loans
|
|
—
|
|
|
0.02
|
|
|
0.15
|
|
|
(0.04
|
)
|
|
0.26
|
|
|||||
Residential mortgage loans
|
|
—
|
|
|
0.01
|
|
|
0.04
|
|
|
—
|
|
|
0.35
|
|
|||||
Consumer loans
|
|
(0.11
|
)
|
|
0.32
|
|
|
0.03
|
|
|
0.19
|
|
|
1.14
|
|
|||||
Total loans
|
|
0.01
|
|
|
0.06
|
|
|
0.15
|
|
|
0.04
|
|
|
0.44
|
|
|||||
Allowance to total loans
|
|
1.19
|
|
|
1.16
|
|
|
1.29
|
|
|
1.44
|
|
|
1.65
|
|
|||||
Allowance to nonperforming loans
|
|
225.35
|
|
|
452.77
|
|
|
173.82
|
|
|
175.74
|
|
|
110.41
|
|
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||||||||||||
(In thousands, except percentages)
|
|
Reserve amount
|
|
% of loans to total loans
|
|
Reserve amount
|
|
% of loans to total loans
|
|
Reserve amount
|
|
% of loans to total loans
|
|
Reserve amount
|
|
% of loans to total loans
|
|
Reserve amount
|
|
% of loans to total loans
|
|||||||||||||||
Balance applicable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
SBA loans held for investment
|
|
$
|
1,655
|
|
|
3.0
|
%
|
|
$
|
1,471
|
|
|
3.8
|
%
|
|
$
|
1,576
|
|
|
4.4
|
%
|
|
$
|
1,961
|
|
|
4.4
|
%
|
|
$
|
1,883
|
|
|
5.3
|
%
|
Commercial loans
|
|
8,705
|
|
|
53.2
|
|
|
7,825
|
|
|
53.7
|
|
|
7,302
|
|
|
55.0
|
|
|
7,050
|
|
|
55.6
|
|
|
7,607
|
|
|
57.2
|
|
|||||
Residential mortgage loans
|
|
3,900
|
|
|
33.4
|
|
|
3,130
|
|
|
31.2
|
|
|
2,593
|
|
|
29.7
|
|
|
2,769
|
|
|
29.8
|
|
|
2,289
|
|
|
29.0
|
|
|||||
Consumer loans
|
|
1,228
|
|
|
9.5
|
|
|
1,130
|
|
|
9.4
|
|
|
925
|
|
|
9.4
|
|
|
817
|
|
|
8.7
|
|
|
667
|
|
|
7.8
|
|
|||||
Unallocated
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
183
|
|
|
—
|
|
|
162
|
|
|
—
|
|
|
105
|
|
|
—
|
|
|||||
Total loans held for investment
|
|
15,488
|
|
|
99.1
|
|
|
13,556
|
|
|
98.1
|
|
|
12,579
|
|
|
98.5
|
|
|
12,759
|
|
|
98.5
|
|
|
12,551
|
|
|
99.3
|
|
|||||
SBA loans held for sale
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
0.7
|
|
|||||
Total loans
|
|
$
|
15,488
|
|
|
100.0
|
%
|
|
$
|
13,556
|
|
|
100.0
|
%
|
|
$
|
12,579
|
|
|
100.0
|
%
|
|
$
|
12,759
|
|
|
100.0
|
%
|
|
$
|
12,551
|
|
|
100.0
|
%
|
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
(In thousands, except percentages)
|
|
Amount
|
|
% of total
|
|
Amount
|
|
% of total
|
|
Amount
|
|
% of total
|
|||||||||
Ending balance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Noninterest-bearing demand deposits
|
|
$
|
270,152
|
|
|
22.4
|
%
|
|
$
|
256,119
|
|
|
24.6
|
%
|
|
$
|
215,963
|
|
|
22.8
|
%
|
Interest-bearing demand deposits
|
|
185,792
|
|
|
15.4
|
|
|
164,997
|
|
|
15.8
|
|
|
145,654
|
|
|
15.4
|
|
|||
Savings deposits
|
|
394,727
|
|
|
32.6
|
|
|
396,557
|
|
|
38.0
|
|
|
363,462
|
|
|
38.5
|
|
|||
Time deposits
|
|
357,016
|
|
|
29.6
|
|
|
225,464
|
|
|
21.6
|
|
|
220,644
|
|
|
23.3
|
|
|||
Total deposits
|
|
$
|
1,207,687
|
|
|
100.0
|
%
|
|
$
|
1,043,137
|
|
|
100.0
|
%
|
|
$
|
945,723
|
|
|
100.0
|
%
|
|
|
For the years ended December 31,
|
|||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
(In thousands, except percentages)
|
|
Amount
|
|
% of total
|
|
Amount
|
|
% of total
|
|
Amount
|
|
% of total
|
|||||||||
Average balance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Noninterest-bearing demand deposits
|
|
$
|
261,976
|
|
|
22.6
|
%
|
|
$
|
237,207
|
|
|
21.6
|
%
|
|
$
|
199,554
|
|
|
21.6
|
%
|
Interest-bearing demand deposits
|
|
177,022
|
|
|
15.3
|
|
|
159,642
|
|
|
14.4
|
|
|
133,212
|
|
|
14.4
|
|
|||
Savings deposits
|
|
404,613
|
|
|
35.0
|
|
|
397,250
|
|
|
35.7
|
|
|
328,486
|
|
|
35.7
|
|
|||
Time deposits
|
|
314,224
|
|
|
27.1
|
|
|
219,847
|
|
|
28.3
|
|
|
261,225
|
|
|
28.3
|
|
|||
Total deposits
|
|
$
|
1,157,835
|
|
|
100.0
|
%
|
|
$
|
1,013,946
|
|
|
100.0
|
%
|
|
$
|
922,477
|
|
|
100.0
|
%
|
(In thousands)
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
FHLB borrowings:
|
|
|
|
|
||||
Fixed rate advances
|
|
$
|
—
|
|
|
$
|
40,000
|
|
Adjustable rate advances
|
|
50,000
|
|
|
50,000
|
|
||
Overnight advances
|
|
160,000
|
|
|
170,000
|
|
||
Other repurchase agreements
|
|
—
|
|
|
15,000
|
|
||
Subordinated debentures
|
|
10,310
|
|
|
10,310
|
|
||
Total borrowed funds and subordinated debentures
|
|
$
|
220,310
|
|
|
$
|
285,310
|
|
•
|
The
$160.0 million
FHLB overnight line of credit advance issued on December 31, 2018 was at a rate of
2.60%
and was repaid on January 2, 2019.
|
•
|
The
$20.0 million
FHLB advance that was issued on December 7, 2018 has an adjustable interest rate equal to 3 month LIBOR plus
5.0
basis points and matures on June 7, 2019. This borrowing was swapped to a 5 year fixed rate borrowing at
1.730%
.
|
•
|
The
$10.0 million
FHLB advance that was issued on August 16, 2018 has an adjustable interest rate equal to 3 month LIBOR plus
8.5
basis points and matures on February 19, 2019. This borrowing was swapped to a 5 year fixed rate borrowing at
1.103%
.
|
•
|
The
$20.0 million
FHLB advance that was issued on July 5, 2018 has an adjustable interest rate equal to LIBOR minus
1.0
basis points and matures on January 7, 2019. This borrowing was swapped to a 5 year fixed rate borrowing at
1.048%
.
|
(In thousands, except percentages)
|
|
Under six months
|
|
Six months through one year
|
|
More than one year through three years
|
|
More than three years through five years
|
|
More than five years through ten years
|
|
More than ten years and not repricing
|
|
Total
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash and due from banks
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,028
|
|
|
$
|
20,028
|
|
Federal funds sold, interest-bearing deposits and repos
|
|
124,017
|
|
|
—
|
|
|
1,470
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125,487
|
|
|||||||
Federal Home Loan Bank stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,795
|
|
|
10,795
|
|
|||||||
Securities
|
|
6,017
|
|
|
2,776
|
|
|
18,920
|
|
|
14,532
|
|
|
12,266
|
|
|
9,221
|
|
|
63,732
|
|
|||||||
Loans
|
|
395,168
|
|
|
145,266
|
|
|
372,771
|
|
|
298,960
|
|
|
71,226
|
|
|
21,175
|
|
|
1,304,566
|
|
|||||||
Allowance for loan losses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,488
|
)
|
|
(15,488
|
)
|
|||||||
Other assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
70,037
|
|
|
70,037
|
|
|||||||
Total assets
|
|
$
|
525,202
|
|
|
$
|
148,042
|
|
|
$
|
393,161
|
|
|
$
|
313,492
|
|
|
$
|
83,492
|
|
|
$
|
115,768
|
|
|
$
|
1,579,157
|
|
Liabilities and shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Noninterest-bearing demand deposits
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
270,152
|
|
|
$
|
270,152
|
|
Savings and interest-bearing demand deposits
|
|
284,062
|
|
|
—
|
|
|
75,142
|
|
|
111,775
|
|
|
109,540
|
|
|
—
|
|
|
580,519
|
|
|||||||
Time deposits
|
|
110,368
|
|
|
71,082
|
|
|
155,355
|
|
|
19,821
|
|
|
390
|
|
|
—
|
|
|
357,016
|
|
|||||||
Borrowed funds and subordinated debentures
|
|
170,000
|
|
|
—
|
|
|
50,000
|
|
|
—
|
|
|
—
|
|
|
310
|
|
|
220,310
|
|
|||||||
Other liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,672
|
|
|
12,672
|
|
|||||||
Shareholders' equity
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
138,488
|
|
|
138,488
|
|
|||||||
Total liabilities and shareholders' equity
|
|
$
|
564,430
|
|
|
$
|
71,082
|
|
|
$
|
280,497
|
|
|
$
|
131,596
|
|
|
$
|
109,930
|
|
|
$
|
421,622
|
|
|
$
|
1,579,157
|
|
Gap
|
|
(39,228
|
)
|
|
76,960
|
|
|
112,664
|
|
|
181,896
|
|
|
(26,438
|
)
|
|
(305,854
|
)
|
|
|
||||||||
Cumulative gap
|
|
(39,228
|
)
|
|
37,732
|
|
|
150,396
|
|
|
332,292
|
|
|
305,854
|
|
|
—
|
|
|
|
||||||||
Cumulative gap to total assets
|
|
(2.5
|
)%
|
|
2.4
|
%
|
|
9.5
|
%
|
|
21.0
|
%
|
|
19.4
|
%
|
|
—
|
|
|
|
•
|
Securities
. The Consolidated Bank’s available for sale investment portfolio amounted to
$46.7 million
and $53.2 million at
December 31, 2018
and
December 31, 2017
, respectively. This excludes the Parent Company’s securities discussed under the heading “Parent Company Liquidity” below. Projected cash flows from securities over the next twelve months are $6.0 million.
|
•
|
Loans
. The SBA loans held for sale portfolio amounted to
$11.2 million
and
$22.8 million
at
December 31, 2018
and
December 31, 2017
, respectively. Sales of these loans provide an additional source of liquidity for the Company.
|
•
|
Outstanding Commitments
. The Company was committed to advance approximately $289.9 million to its borrowers as of
December 31, 2018
, compared to $291.9 million at
December 31, 2017
. At
December 31, 2018
, $161.1 million of these commitments expire within one year, compared to $209.3 million at
December 31, 2017
. The Company had $5.7 million and $5.6 million in standby letters of credit at
December 31, 2018
and
December 31, 2017
, respectively, which are included in the commitments amount noted above. The estimated fair value of these guarantees is not significant. The Company believes it has the necessary liquidity to honor all commitments. Many of these commitments will expire and never be funded.
|
•
|
Deposits
. As of
December 31, 2018
, deposits included $121.9 million of Government deposits, as compared to $99.6 million at year end
2017
. These deposits are generally short in duration and are very sensitive to price competition. The Company believes that the current level of these types of deposits is appropriate. Included in the portfolio were $116.6 million of deposits from fourteen municipalities. The withdrawal of these deposits, in whole or in part, would not create a liquidity shortfall for the Company.
|
•
|
Borrowed Funds
. Total FHLB borrowings amounted to $210.0 million and $260.0 million as of
December 31, 2018
and
2017
, respectively. There were no third party repurchase agreements as of
December 31, 2018
, compared to a total of $15.0 million as of
December 31, 2017
. As a member of the Federal Home Loan Bank of New York, the Company can borrow additional funds based on the market value of collateral pledged. At
December 31, 2018
, pledging provided an additional $221.9 million in borrowing potential from the FHLB. In addition, the Company can pledge additional collateral in the form of 1 to 4 family residential mortgages, commercial loans or investment securities to increase this line with the FHLB.
|
(In thousands)
|
|
One year or less
|
|
One to three years
|
|
Three to five years
|
|
Over five years
|
|
Total
|
||||||||||
Off-balance sheet arrangements:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Standby letters of credit
|
|
$
|
4,720
|
|
|
$
|
166
|
|
|
$
|
—
|
|
|
$
|
799
|
|
|
$
|
5,685
|
|
Contractual obligations:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Time deposits
|
|
181,450
|
|
|
155,355
|
|
|
19,821
|
|
|
390
|
|
|
357,016
|
|
|||||
Borrowed funds and subordinated debentures
|
|
210,000
|
|
|
—
|
|
|
—
|
|
|
10,310
|
|
|
220,310
|
|
|||||
Operating lease obligations
|
|
383
|
|
|
675
|
|
|
446
|
|
|
376
|
|
|
1,880
|
|
|||||
Purchase obligations
|
|
1,959
|
|
|
3,919
|
|
|
2,123
|
|
|
—
|
|
|
8,001
|
|
|||||
Total off-balance sheet arrangements and contractual obligations
|
|
$
|
398,512
|
|
|
$
|
160,115
|
|
|
$
|
22,390
|
|
|
$
|
11,875
|
|
|
$
|
592,892
|
|
(In thousands)
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
ASSETS
|
|
|
|
|
||||
Cash and due from banks
|
|
$
|
20,028
|
|
|
$
|
23,701
|
|
Federal funds sold, interest-bearing deposits and repos
|
|
125,487
|
|
|
126,553
|
|
||
Cash and cash equivalents
|
|
145,515
|
|
|
150,254
|
|
||
Securities:
|
|
|
|
|
||||
Securities available for sale (amortized cost of $47,762 and $52,763 in 2018 and 2017, respectively)
|
|
46,713
|
|
|
52,287
|
|
||
Securities held to maturity (fair value of $14,802 and $16,346 in 2018 and 2017, respectively)
|
|
14,875
|
|
|
16,307
|
|
||
Equity securities (amortized cost of $2,394 and $1,262 in 2018 and 2017, respectively)
|
|
2,144
|
|
|
1,206
|
|
||
Total securities
|
|
63,732
|
|
|
69,800
|
|
||
Loans:
|
|
|
|
|
||||
SBA loans held for sale
|
|
11,171
|
|
|
22,810
|
|
||
SBA loans held for investment
|
|
39,333
|
|
|
43,999
|
|
||
Commercial loans
|
|
694,102
|
|
|
628,865
|
|
||
Residential mortgage loans
|
|
436,056
|
|
|
365,145
|
|
||
Consumer loans
|
|
123,904
|
|
|
109,855
|
|
||
Total loans
|
|
1,304,566
|
|
|
1,170,674
|
|
||
Allowance for loan losses
|
|
(15,488
|
)
|
|
(13,556
|
)
|
||
Net loans
|
|
1,289,078
|
|
|
1,157,118
|
|
||
Premises and equipment, net
|
|
23,371
|
|
|
23,470
|
|
||
Bank owned life insurance ("BOLI")
|
|
24,710
|
|
|
24,227
|
|
||
Deferred tax assets
|
|
5,350
|
|
|
4,017
|
|
||
Federal Home Loan Bank ("FHLB") stock
|
|
10,795
|
|
|
12,863
|
|
||
Accrued interest receivable
|
|
6,399
|
|
|
5,447
|
|
||
Other real estate owned ("OREO")
|
|
56
|
|
|
426
|
|
||
Goodwill
|
|
1,516
|
|
|
1,516
|
|
||
Prepaid expenses and other assets
|
|
8,635
|
|
|
6,358
|
|
||
Total assets
|
|
$
|
1,579,157
|
|
|
$
|
1,455,496
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
||||
Deposits:
|
|
|
|
|
||||
Noninterest-bearing demand
|
|
$
|
270,152
|
|
|
$
|
256,119
|
|
Interest-bearing demand
|
|
185,792
|
|
|
164,997
|
|
||
Savings
|
|
394,727
|
|
|
396,557
|
|
||
Time, under $100,000
|
|
184,022
|
|
|
133,881
|
|
||
Time, $100,000 to $250,000
|
|
116,147
|
|
|
71,480
|
|
||
Time, $250,000 and over
|
|
56,847
|
|
|
20,103
|
|
||
Total deposits
|
|
1,207,687
|
|
|
1,043,137
|
|
||
Borrowed funds
|
|
210,000
|
|
|
275,000
|
|
||
Subordinated debentures
|
|
10,310
|
|
|
10,310
|
|
||
Accrued interest payable
|
|
406
|
|
|
436
|
|
||
Accrued expenses and other liabilities
|
|
12,266
|
|
|
8,508
|
|
||
Total liabilities
|
|
1,440,669
|
|
|
1,337,391
|
|
||
Shareholders' equity:
|
|
|
|
|
||||
Common stock, no par value, 12,500 shares authorized, 10,780 shares issued and outstanding in 2018; 10,615 shares issued and outstanding in 2017
|
|
88,484
|
|
|
86,782
|
|
||
Retained earnings
|
|
50,161
|
|
|
31,117
|
|
||
Accumulated other comprehensive (loss) income
|
|
(157
|
)
|
|
206
|
|
||
Total shareholders' equity
|
|
138,488
|
|
|
118,105
|
|
||
Total liabilities and shareholders' equity
|
|
$
|
1,579,157
|
|
|
$
|
1,455,496
|
|
|
|
For the years ended December 31,
|
||||||||||
(In thousands, except per share amounts)
|
|
2018
|
|
2017
|
|
2016
|
||||||
INTEREST INCOME
|
|
|
|
|
|
|
||||||
Federal funds sold, interest-bearing deposits and repos
|
|
$
|
773
|
|
|
$
|
851
|
|
|
$
|
214
|
|
FHLB stock
|
|
462
|
|
|
370
|
|
|
245
|
|
|||
Securities:
|
|
|
|
|
|
|
||||||
Taxable
|
|
1,907
|
|
|
2,029
|
|
|
1,698
|
|
|||
Tax-exempt
|
|
117
|
|
|
159
|
|
|
204
|
|
|||
Total securities
|
|
2,024
|
|
|
2,188
|
|
|
1,902
|
|
|||
Loans:
|
|
|
|
|
|
|
||||||
SBA loans
|
|
4,338
|
|
|
3,805
|
|
|
3,181
|
|
|||
Commercial loans
|
|
33,886
|
|
|
28,150
|
|
|
25,256
|
|
|||
Residential mortgage loans
|
|
18,837
|
|
|
14,650
|
|
|
12,205
|
|
|||
Consumer loans
|
|
6,943
|
|
|
5,296
|
|
|
4,021
|
|
|||
Total loans
|
|
64,004
|
|
|
51,901
|
|
|
44,663
|
|
|||
Total interest income
|
|
67,263
|
|
|
55,310
|
|
|
47,024
|
|
|||
INTEREST EXPENSE
|
|
|
|
|
|
|
||||||
Interest-bearing demand deposits
|
|
1,202
|
|
|
665
|
|
|
537
|
|
|||
Savings deposits
|
|
3,871
|
|
|
2,738
|
|
|
1,742
|
|
|||
Time deposits
|
|
5,903
|
|
|
3,278
|
|
|
3,670
|
|
|||
Borrowed funds and subordinated debentures
|
|
2,540
|
|
|
2,772
|
|
|
2,818
|
|
|||
Total interest expense
|
|
13,516
|
|
|
9,453
|
|
|
8,767
|
|
|||
Net interest income
|
|
53,747
|
|
|
45,857
|
|
|
38,257
|
|
|||
Provision for loan losses
|
|
2,050
|
|
|
1,650
|
|
|
1,220
|
|
|||
Net interest income after provision for loan losses
|
|
51,697
|
|
|
44,207
|
|
|
37,037
|
|
|||
NONINTEREST INCOME
|
|
|
|
|
|
|
||||||
Branch fee income
|
|
1,519
|
|
|
1,384
|
|
|
1,269
|
|
|||
Service and loan fee income
|
|
2,130
|
|
|
2,100
|
|
|
1,020
|
|
|||
Gain on sale of SBA loans held for sale, net
|
|
1,680
|
|
|
1,617
|
|
|
2,099
|
|
|||
Gain on sale of mortgage loans, net
|
|
1,719
|
|
|
1,530
|
|
|
2,621
|
|
|||
BOLI income
|
|
975
|
|
|
469
|
|
|
378
|
|
|||
Net security (losses) gains
|
|
(199
|
)
|
|
62
|
|
|
424
|
|
|||
Gain on repurchase of subordinated debt
|
|
—
|
|
|
—
|
|
|
2,264
|
|
|||
Other income
|
|
1,207
|
|
|
1,108
|
|
|
985
|
|
|||
Total noninterest income
|
|
9,031
|
|
|
8,270
|
|
|
11,060
|
|
|||
NONINTEREST EXPENSE
|
|
|
|
|
|
|
||||||
Compensation and benefits
|
|
20,119
|
|
|
17,117
|
|
|
14,952
|
|
|||
Occupancy
|
|
2,739
|
|
|
2,381
|
|
|
2,360
|
|
|||
Processing and communications
|
|
2,788
|
|
|
2,551
|
|
|
2,628
|
|
|||
Furniture and equipment
|
|
2,348
|
|
|
2,079
|
|
|
1,700
|
|
|||
Professional services
|
|
934
|
|
|
1,022
|
|
|
976
|
|
|||
Loan collection and OREO (recoveries) expenses
|
|
(288
|
)
|
|
463
|
|
|
654
|
|
|||
Other loan expenses
|
|
135
|
|
|
186
|
|
|
152
|
|
|||
Deposit insurance
|
|
782
|
|
|
546
|
|
|
713
|
|
|||
Advertising
|
|
1,411
|
|
|
1,179
|
|
|
1,095
|
|
|||
Director fees
|
|
671
|
|
|
637
|
|
|
559
|
|
|||
Other expenses
|
|
1,782
|
|
|
1,883
|
|
|
1,842
|
|
|||
Total noninterest expense
|
|
33,421
|
|
|
30,044
|
|
|
27,631
|
|
|||
Income before provision for income taxes
|
|
27,307
|
|
|
22,433
|
|
|
20,466
|
|
|||
Provision for income taxes
|
|
5,388
|
|
|
9,540
|
|
|
7,257
|
|
|||
Net income
|
|
$
|
21,919
|
|
|
$
|
12,893
|
|
|
$
|
13,209
|
|
Net income per common share - Basic
|
|
$
|
2.04
|
|
|
$
|
1.22
|
|
|
$
|
1.40
|
|
Net income per common share - Diluted
|
|
$
|
2.01
|
|
|
$
|
1.20
|
|
|
$
|
1.38
|
|
Weighted average common shares outstanding - Basic
|
|
10,726
|
|
|
10,558
|
|
|
9,416
|
|
|||
Weighted average common shares outstanding - Diluted
|
|
10,916
|
|
|
10,749
|
|
|
9,572
|
|
|
|
For the year ended December 31, 2018
|
||||||||||
(In thousands)
|
|
Before tax amount
|
|
Income tax expense (benefit)
|
|
Net of tax amount
|
||||||
Net income
|
|
$
|
27,307
|
|
|
$
|
5,388
|
|
|
$
|
21,919
|
|
Other comprehensive loss
|
|
|
|
|
|
|
||||||
Investment securities available for sale:
|
|
|
|
|
|
|
||||||
Unrealized holding losses on securities arising during the period
|
|
(756
|
)
|
|
(225
|
)
|
|
(531
|
)
|
|||
Less: reclassification adjustment for losses on securities included in net income
|
|
(183
|
)
|
|
(38
|
)
|
|
(145
|
)
|
|||
Total unrealized losses on securities available for sale
|
|
(573
|
)
|
|
(187
|
)
|
|
(386
|
)
|
|||
Adjustments related to defined benefit plan:
|
|
|
|
|
|
|
||||||
Amortization of prior service cost
|
|
83
|
|
|
173
|
|
|
(90
|
)
|
|||
Total adjustments related to defined benefit plan
|
|
83
|
|
|
173
|
|
|
(90
|
)
|
|||
Net unrealized gains from cash flow hedges:
|
|
|
|
|
|
|
||||||
Unrealized holding gains on cash flow hedges arising during the period
|
|
25
|
|
|
(123
|
)
|
|
148
|
|
|||
Total unrealized gains on cash flow hedges
|
|
25
|
|
|
(123
|
)
|
|
148
|
|
|||
Total other comprehensive loss
|
|
(465
|
)
|
|
(137
|
)
|
|
(328
|
)
|
|||
Total comprehensive income
|
|
$
|
26,842
|
|
|
$
|
5,251
|
|
|
$
|
21,591
|
|
|
|
For the year ended December 31, 2017
|
||||||||||
(In thousands)
|
|
Before tax amount
|
|
Income tax expense (benefit)
|
|
Net of tax amount
|
||||||
Net income
|
|
$
|
22,433
|
|
|
$
|
9,540
|
|
|
$
|
12,893
|
|
Other comprehensive income
|
|
|
|
|
|
|
||||||
Investment securities available for sale:
|
|
|
|
|
|
|
||||||
Unrealized holding losses on securities arising during the period
|
|
(152
|
)
|
|
(18
|
)
|
|
(134
|
)
|
|||
Less: reclassification adjustment for gains on securities included in net income
|
|
62
|
|
|
22
|
|
|
40
|
|
|||
Total unrealized losses on securities available for sale
|
|
(214
|
)
|
|
(40
|
)
|
|
(174
|
)
|
|||
Adjustments related to defined benefit plan:
|
|
|
|
|
|
|
||||||
Amortization of prior service cost
|
|
83
|
|
|
33
|
|
|
50
|
|
|||
Total adjustments related to defined benefit plan
|
|
83
|
|
|
33
|
|
|
50
|
|
|||
Net unrealized gains from cash flow hedges:
|
|
|
|
|
|
|
||||||
Unrealized holding gains on cash flow hedges arising during the period
|
|
204
|
|
|
34
|
|
|
170
|
|
|||
Total unrealized gains on cash flow hedges
|
|
204
|
|
|
34
|
|
|
170
|
|
|||
Total other comprehensive income
|
|
73
|
|
|
27
|
|
|
46
|
|
|||
Total comprehensive income
|
|
$
|
22,506
|
|
|
$
|
9,567
|
|
|
$
|
12,939
|
|
|
|
For the year ended December 31, 2016
|
||||||||||
(In thousands)
|
|
Before tax amount
|
|
Income tax expense (benefit)
|
|
Net of tax amount
|
||||||
Net income
|
|
$
|
20,466
|
|
|
$
|
7,257
|
|
|
$
|
13,209
|
|
Other comprehensive income
|
|
|
|
|
|
|
||||||
Investment securities available for sale:
|
|
|
|
|
|
|
||||||
Unrealized holding gains on securities arising during the period
|
|
157
|
|
|
41
|
|
|
116
|
|
|||
Less: reclassification adjustment for gains on securities included in net income
|
|
424
|
|
|
149
|
|
|
275
|
|
|||
Total unrealized losses on securities available for sale
|
|
(267
|
)
|
|
(108
|
)
|
|
(159
|
)
|
|||
Adjustments related to defined benefit plan:
|
|
|
|
|
|
|
||||||
Amortization of prior service cost
|
|
83
|
|
|
26
|
|
|
57
|
|
|||
Total adjustments related to defined benefit plan
|
|
83
|
|
|
26
|
|
|
57
|
|
|||
Net unrealized gains from cash flow hedges:
|
|
|
|
|
|
|
||||||
Unrealized holding gains on cash flow hedges arising during the period
|
|
1,232
|
|
|
503
|
|
|
729
|
|
|||
Total unrealized gains on cash flow hedges
|
|
1,232
|
|
|
503
|
|
|
729
|
|
|||
Total other comprehensive income
|
|
1,048
|
|
|
421
|
|
|
627
|
|
|||
Total comprehensive income
|
|
$
|
21,514
|
|
|
$
|
7,678
|
|
|
$
|
13,836
|
|
|
|
Common stock
|
|
Retained earnings (3)
|
|
Accumulated other comprehensive income (loss)
|
|
Total Shareholders' equity
|
|||||||||||
(In thousands, except per share amounts)
|
|
Shares
|
|
Amount
|
|
|
|
||||||||||||
Balance, December 31, 2015
|
|
9,279
|
|
|
$
|
59,371
|
|
|
$
|
19,566
|
|
|
$
|
(467
|
)
|
|
$
|
78,470
|
|
Net income
|
|
|
|
|
|
13,209
|
|
|
|
|
13,209
|
|
|||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
$
|
627
|
|
|
627
|
|
||||||
Dividend on common stock ($0.18 per share)
|
|
|
|
109
|
|
|
(1,633
|
)
|
|
|
|
(1,524
|
)
|
||||||
10% stock dividend payable September 30, 2016
|
|
|
|
10,394
|
|
|
(10,394
|
)
|
|
|
|
—
|
|
||||||
Common stock issued and related tax effects (1)
|
|
130
|
|
|
1,097
|
|
|
|
|
|
|
1,097
|
|
||||||
Proceeds from rights offering (2)
|
|
1,068
|
|
|
14,412
|
|
|
|
|
|
|
14,412
|
|
||||||
Balance, December 31, 2016
|
|
10,477
|
|
|
85,383
|
|
|
20,748
|
|
|
160
|
|
|
106,291
|
|
||||
Net income
|
|
|
|
|
|
12,893
|
|
|
|
|
12,893
|
|
|||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
46
|
|
|
46
|
|
|||||||
Dividends on common stock ($0.23 per share)
|
|
|
|
144
|
|
|
(2,524
|
)
|
|
|
|
(2,380
|
)
|
||||||
Common stock issued and related tax effects (1)
|
|
138
|
|
|
1,255
|
|
|
|
|
|
|
1,255
|
|
||||||
Balance, December 31, 2017
|
|
10,615
|
|
|
86,782
|
|
|
31,117
|
|
|
206
|
|
|
118,105
|
|
||||
Net income
|
|
|
|
|
|
21,919
|
|
|
|
|
21,919
|
|
|||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
(328
|
)
|
|
(328
|
)
|
|||||||
Dividends on common stock ($0.27 per share)
|
|
|
|
107
|
|
|
(2,910
|
)
|
|
|
|
(2,802
|
)
|
||||||
Common stock issued and related tax effects (1)
|
|
165
|
|
|
1,595
|
|
|
|
|
|
|
1,595
|
|
||||||
Balance, Retained earnings impact due to adoption of ASU 2016-01 (4)
|
|
|
|
|
|
(40
|
)
|
|
40
|
|
|
—
|
|
||||||
Balance, Tax Rate adjustment to AOCI (5)
|
|
|
|
|
|
75
|
|
|
(75
|
)
|
|
—
|
|
||||||
Balance, December 31, 2018
|
|
10,780
|
|
|
$
|
88,484
|
|
|
$
|
50,161
|
|
|
$
|
(157
|
)
|
|
$
|
138,488
|
|
|
|
For the twelve months ended December 31,
|
||||||||||
(In thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
21,919
|
|
|
$
|
12,893
|
|
|
$
|
13,209
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Provision for loan losses
|
|
2,050
|
|
|
1,650
|
|
|
1,220
|
|
|||
Net amortization of purchase premiums and discounts on securities
|
|
220
|
|
|
290
|
|
|
346
|
|
|||
Depreciation and amortization
|
|
1,937
|
|
|
1,238
|
|
|
734
|
|
|||
Deferred income tax expense
|
|
(1,262
|
)
|
|
1,546
|
|
|
110
|
|
|||
Net security losses (gains)
|
|
4
|
|
|
(62
|
)
|
|
(424
|
)
|
|||
Gains on repurchase of subordinated debentures
|
|
—
|
|
|
—
|
|
|
(2,264
|
)
|
|||
Stock compensation expense
|
|
1,053
|
|
|
746
|
|
|
545
|
|
|||
Loss (gain) on sale of OREO
|
|
(169
|
)
|
|
245
|
|
|
(71
|
)
|
|||
Valuation writedowns on OREO
|
|
—
|
|
|
151
|
|
|
300
|
|
|||
Gain on sale of mortgage loans held for sale, net
|
|
(1,390
|
)
|
|
(1,699
|
)
|
|
(1,610
|
)
|
|||
Gain on sale of SBA loans held for sale, net
|
|
(1,680
|
)
|
|
(1,617
|
)
|
|
(2,099
|
)
|
|||
Origination of mortgage loans held for sale
|
|
(80,729
|
)
|
|
(82,088
|
)
|
|
(108,120
|
)
|
|||
Origination of SBA loans held for sale
|
|
(9,510
|
)
|
|
(24,394
|
)
|
|
(29,916
|
)
|
|||
Proceeds from sale of mortgage loans held for sale, net
|
|
82,119
|
|
|
83,787
|
|
|
109,730
|
|
|||
Proceeds from sale of SBA loans held for sale, net
|
|
23,939
|
|
|
20,998
|
|
|
26,837
|
|
|||
BOLI income
|
|
(975
|
)
|
|
(469
|
)
|
|
(378
|
)
|
|||
Net change in other assets and liabilities
|
|
1,064
|
|
|
1,234
|
|
|
639
|
|
|||
Net cash provided by operating activities
|
|
38,590
|
|
|
14,449
|
|
|
8,788
|
|
|||
INVESTING ACTIVITIES
|
|
|
|
|
|
|
||||||
Purchases of securities held to maturity
|
|
—
|
|
|
(163
|
)
|
|
(11,322
|
)
|
|||
Purchase of equity securities
|
|
(1,133
|
)
|
|
—
|
|
|
—
|
|
|||
Purchases of securities available for sale
|
|
(579
|
)
|
|
(29,382
|
)
|
|
(9,339
|
)
|
|||
Purchases of FHLB stock, at cost
|
|
(72,115
|
)
|
|
(17,408
|
)
|
|
(4,182
|
)
|
|||
Maturities and principal payments on securities held to maturity
|
|
1,393
|
|
|
4,278
|
|
|
2,201
|
|
|||
Maturities and principal payments on securities available for sale
|
|
5,396
|
|
|
13,220
|
|
|
8,927
|
|
|||
Proceeds from sales of securities held to maturity
|
|
—
|
|
|
529
|
|
|
6,661
|
|
|||
Proceeds from sales of securities available for sale
|
|
—
|
|
|
2,777
|
|
|
12,472
|
|
|||
Proceeds from redemption of FHLB stock
|
|
74,183
|
|
|
10,583
|
|
|
2,745
|
|
|||
Proceeds from sale of OREO
|
|
440
|
|
|
1,034
|
|
|
2,302
|
|
|||
Net increase in loans
|
|
(147,223
|
)
|
|
(193,592
|
)
|
|
(82,697
|
)
|
|||
Proceeds from BOLI
|
|
492
|
|
|
—
|
|
|
—
|
|
|||
Purchase of BOLI
|
|
—
|
|
|
(10,000
|
)
|
|
—
|
|
|||
Purchases of premises and equipment
|
|
(1,507
|
)
|
|
(1,509
|
)
|
|
(9,595
|
)
|
|||
Net cash used in investing activities
|
|
(140,653
|
)
|
|
(219,633
|
)
|
|
(81,827
|
)
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
||||||
Net increase in deposits
|
|
164,550
|
|
|
97,414
|
|
|
51,230
|
|
|||
Proceeds from new borrowings
|
|
210,000
|
|
|
220,000
|
|
|
76,000
|
|
|||
Repayments of borrowings
|
|
(275,000
|
)
|
|
(66,000
|
)
|
|
(47,000
|
)
|
|||
Repurchase of subordinated debentures
|
|
—
|
|
|
—
|
|
|
(2,891
|
)
|
|||
Proceeds from exercise of stock options
|
|
576
|
|
|
509
|
|
|
550
|
|
|||
Dividends on common stock
|
|
(2,802
|
)
|
|
(2,380
|
)
|
|
(1,524
|
)
|
|||
Proceeds from capital offering
|
|
—
|
|
|
—
|
|
|
14,412
|
|
|||
Net cash provided by financing activities
|
|
97,324
|
|
|
249,543
|
|
|
90,777
|
|
(Decrease) increase in cash and cash equivalents
|
|
(4,739
|
)
|
|
44,359
|
|
|
17,738
|
|
|||
Cash and cash equivalents, beginning of year
|
|
150,254
|
|
|
105,895
|
|
|
88,157
|
|
|||
Cash and cash equivalents, end of year
|
|
$
|
145,515
|
|
|
$
|
150,254
|
|
|
$
|
105,895
|
|
SUPPLEMENTAL DISCLOSURES
|
|
|
|
|
|
|
||||||
Cash:
|
|
|
|
|
|
|
||||||
Interest paid
|
|
$
|
13,546
|
|
|
$
|
9,447
|
|
|
$
|
8,798
|
|
Income taxes paid
|
|
5,941
|
|
|
7,002
|
|
|
7,592
|
|
|||
Noncash investing activities:
|
|
|
|
|
|
|
||||||
Transfer of SBA loans held for sale to held to maturity
|
|
—
|
|
|
13
|
|
|
—
|
|
|||
Capitalization of servicing rights
|
|
938
|
|
|
172
|
|
|
1,472
|
|
|||
Transfer of loans to OREO
|
|
127
|
|
|
872
|
|
|
1,990
|
|
•
|
Debt Prepayment or Debt Extinguishment Costs
|
•
|
Settlement of Zero-Coupon Debt Instruments or Other Debt Instruments with Coupon Interest Rates That Are Insignificant in Relation to the Effective Interest Rate of the Borrowing
|
•
|
Contingent Consideration Payments Made after a Business Combination
|
•
|
Proceeds from the Settlement of Insurance Claims
|
•
|
Proceeds from the Settlement of Corporate-Owned Life Insurance Policies, include Bank-Owned Life Insurance Policies
|
•
|
Distributions Received from Equity Method Investees
|
•
|
Beneficial Interest in Securitization Transactions
|
•
|
Separately Identifiable Cash Flows and Application of the Predominance Principle
|
•
|
Service charges on deposit accounts - these represent general service fees for monthly account maintenance and activity- or transaction based fees and consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue. Revenue is recognized when our performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed (such as a wire transfer). Payment for such performance obligations are generally received at the time the performance obligations are satisfied.
|
•
|
Other non-interest income primarily includes items such as letter of credit fees, bank owned life insurance income, dividends on FHLB and FRB stock and other general operating income, none of which are subject to the requirements of ASC 606.
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||||||
(In thousands)
|
|
Amortized cost
|
|
Gross unrealized gains
|
|
Gross unrealized losses
|
|
Estimated fair value
|
|
Amortized cost
|
|
Gross unrealized gains
|
|
Gross unrealized losses
|
|
Estimated fair value
|
||||||||||||||||
Available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government sponsored entities
|
|
$
|
5,758
|
|
|
$
|
—
|
|
|
$
|
(116
|
)
|
|
$
|
5,642
|
|
|
$
|
5,765
|
|
|
$
|
—
|
|
|
$
|
(74
|
)
|
|
$
|
5,691
|
|
State and political subdivisions
|
|
4,614
|
|
|
4
|
|
|
(120
|
)
|
|
4,498
|
|
|
5,227
|
|
|
21
|
|
|
(56
|
)
|
|
5,192
|
|
||||||||
Residential mortgage-backed securities
|
|
27,159
|
|
|
74
|
|
|
(620
|
)
|
|
26,613
|
|
|
32,111
|
|
|
153
|
|
|
(386
|
)
|
|
31,878
|
|
||||||||
Corporate and other securities
|
|
10,231
|
|
|
123
|
|
|
(394
|
)
|
|
9,960
|
|
|
9,660
|
|
|
9
|
|
|
(143
|
)
|
|
9,526
|
|
||||||||
Total securities available
for sale
|
|
$
|
47,762
|
|
|
$
|
201
|
|
|
$
|
(1,250
|
)
|
|
$
|
46,713
|
|
|
$
|
52,763
|
|
|
$
|
183
|
|
|
$
|
(659
|
)
|
|
$
|
52,287
|
|
Held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Government sponsored entities
|
|
$
|
2,527
|
|
|
$
|
—
|
|
|
$
|
(94
|
)
|
|
$
|
2,433
|
|
|
$
|
3,026
|
|
|
$
|
—
|
|
|
$
|
(93
|
)
|
|
$
|
2,933
|
|
State and political subdivisions
|
|
951
|
|
|
110
|
|
|
—
|
|
|
1,061
|
|
|
1,113
|
|
|
144
|
|
|
—
|
|
|
1,257
|
|
||||||||
Residential mortgage-backed securities
|
|
3,312
|
|
|
17
|
|
|
(52
|
)
|
|
3,277
|
|
|
3,958
|
|
|
59
|
|
|
(18
|
)
|
|
3,999
|
|
||||||||
Commercial mortgage-backed securities
|
|
3,570
|
|
|
—
|
|
|
(138
|
)
|
|
3,432
|
|
|
3,685
|
|
|
—
|
|
|
(142
|
)
|
|
3,543
|
|
||||||||
Corporate and other securities
|
|
4,515
|
|
|
84
|
|
|
—
|
|
|
4,599
|
|
|
4,525
|
|
|
89
|
|
|
—
|
|
|
4,614
|
|
||||||||
Total securities held to
maturity
|
|
$
|
14,875
|
|
|
$
|
211
|
|
|
$
|
(284
|
)
|
|
$
|
14,802
|
|
|
$
|
16,307
|
|
|
$
|
292
|
|
|
$
|
(253
|
)
|
|
$
|
16,346
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total equity securities
|
|
$
|
2,394
|
|
|
$
|
—
|
|
|
$
|
(250
|
)
|
|
$
|
2,144
|
|
|
$
|
1,262
|
|
|
$
|
15
|
|
|
$
|
(71
|
)
|
|
$
|
1,206
|
|
|
|
Within one year
|
|
After one through five years
|
|
After five through ten years
|
|
After ten years
|
|
Total carrying value
|
|||||||||||||||||||||||||
(In thousands, except percentages)
|
|
Amount
|
|
Yield
|
|
Amount
|
|
Yield
|
|
Amount
|
|
Yield
|
|
Amount
|
|
Yield
|
|
Amount
|
|
Yield
|
|||||||||||||||
Available for sale at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. Government sponsored entities
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
3,678
|
|
|
1.61
|
%
|
|
$
|
1,964
|
|
|
2.17
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
5,642
|
|
|
1.80
|
%
|
State and political subdivisions
|
|
184
|
|
|
2.43
|
|
|
796
|
|
|
3.89
|
|
|
2,200
|
|
|
2.44
|
|
|
1,318
|
|
|
2.74
|
|
|
4,498
|
|
|
2.78
|
|
|||||
Residential mortgage-backed securities
|
|
—
|
|
|
—
|
|
|
572
|
|
|
2.00
|
|
|
2,742
|
|
|
2.39
|
|
|
23,299
|
|
|
2.93
|
|
|
26,613
|
|
|
2.85
|
|
|||||
Corporate and other securities
|
|
—
|
|
|
—
|
|
|
3,715
|
|
|
3.48
|
|
|
6,245
|
|
|
4.62
|
|
|
—
|
|
|
—
|
|
|
9,960
|
|
|
4.19
|
|
|||||
Total securities available
for sale
|
|
$
|
184
|
|
|
2.43
|
%
|
|
$
|
8,761
|
|
|
2.64
|
%
|
|
$
|
13,151
|
|
|
3.42
|
%
|
|
$
|
24,617
|
|
|
2.92
|
%
|
|
$
|
46,713
|
|
|
3.01
|
%
|
Held to maturity at cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. Government sponsored entities
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
2,527
|
|
|
1.98
|
%
|
|
$
|
2,527
|
|
|
1.98
|
%
|
State and political subdivisions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
494
|
|
|
5.07
|
|
|
457
|
|
|
5.84
|
|
|
951
|
|
|
5.44
|
|
|||||
Residential mortgage-backed securities
|
|
—
|
|
|
—
|
|
|
50
|
|
|
5.22
|
|
|
442
|
|
|
3.13
|
|
|
2,820
|
|
|
3.60
|
|
|
3,312
|
|
|
3.57
|
|
|||||
Commercial mortgage-backed securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,570
|
|
|
2.72
|
|
|
3,570
|
|
|
2.72
|
|
|||||
Corporate and other securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,515
|
|
|
5.73
|
|
|
—
|
|
|
—
|
|
|
4,515
|
|
|
5.73
|
|
|||||
Total securities held to
maturity
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
50
|
|
|
5.22
|
%
|
|
$
|
5,451
|
|
|
5.46
|
%
|
|
$
|
9,374
|
|
|
2.94
|
%
|
|
$
|
14,875
|
|
|
3.87
|
%
|
Equity securities at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total equity securities
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
2,144
|
|
|
1.26
|
%
|
|
$
|
2,144
|
|
|
1.26
|
%
|
|
|
December 31, 2018
|
||||||||||||||||||||||||
|
|
|
|
Less than 12 months
|
|
12 months and greater
|
|
Total
|
||||||||||||||||||
(In thousands, except number in a loss position)
|
|
Total number in a loss position
|
|
Estimated fair value
|
|
Unrealized loss
|
|
Estimated fair value
|
|
Unrealized loss
|
|
Estimated fair value
|
|
Unrealized loss
|
||||||||||||
Available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
U.S. Government sponsored entities
|
|
5
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,642
|
|
|
$
|
(116
|
)
|
|
$
|
5,642
|
|
|
$
|
(116
|
)
|
State and political subdivisions
|
|
4
|
|
—
|
|
|
—
|
|
|
3,129
|
|
|
(120
|
)
|
|
3,129
|
|
|
(120
|
)
|
||||||
Residential mortgage-backed securities
|
|
31
|
|
4,445
|
|
|
(23
|
)
|
|
20,480
|
|
|
(597
|
)
|
|
24,925
|
|
|
(620
|
)
|
||||||
Corporate and other securities
|
|
5
|
|
971
|
|
|
(30
|
)
|
|
5,787
|
|
|
(364
|
)
|
|
6,758
|
|
|
(394
|
)
|
||||||
Total temporarily impaired securities
|
|
45
|
|
$
|
5,416
|
|
|
$
|
(53
|
)
|
|
$
|
35,038
|
|
|
$
|
(1,197
|
)
|
|
$
|
40,454
|
|
|
$
|
(1,250
|
)
|
Held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government sponsored entities
|
|
2
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,434
|
|
|
$
|
(94
|
)
|
|
$
|
2,434
|
|
|
$
|
(94
|
)
|
Residential mortgage-backed securities
|
|
5
|
|
1,277
|
|
|
(15
|
)
|
|
821
|
|
|
(37
|
)
|
|
2,098
|
|
|
(52
|
)
|
||||||
Commercial mortgage-backed securities
|
|
2
|
|
—
|
|
|
—
|
|
|
3,432
|
|
|
(138
|
)
|
|
3,432
|
|
|
(138
|
)
|
||||||
Total temporarily impaired securities
|
|
9
|
|
$
|
1,277
|
|
|
$
|
(15
|
)
|
|
$
|
6,687
|
|
|
$
|
(269
|
)
|
|
$
|
7,964
|
|
|
$
|
(284
|
)
|
|
|
December 31, 2017
|
||||||||||||||||||||||||
|
|
|
|
Less than 12 months
|
|
12 months and greater
|
|
Total
|
||||||||||||||||||
(In thousands, except number in a loss position)
|
|
Total number in a loss position
|
|
Estimated fair value
|
|
Unrealized loss
|
|
Estimated fair value
|
|
Unrealized loss
|
|
Estimated fair value
|
|
Unrealized loss
|
||||||||||||
Available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. Government sponsored entities
|
|
5
|
|
$
|
3,732
|
|
|
$
|
(40
|
)
|
|
$
|
1,958
|
|
|
$
|
(34
|
)
|
|
$
|
5,690
|
|
|
$
|
(74
|
)
|
State and political subdivisions
|
|
2
|
|
476
|
|
|
(6
|
)
|
|
1,792
|
|
|
(50
|
)
|
|
2,268
|
|
|
(56
|
)
|
||||||
Residential mortgage-backed securities
|
|
22
|
|
20,646
|
|
|
(218
|
)
|
|
4,028
|
|
|
(168
|
)
|
|
24,674
|
|
|
(386
|
)
|
||||||
Corporate and other securities
|
|
7
|
|
4,563
|
|
|
(30
|
)
|
|
2,803
|
|
|
(184
|
)
|
|
7,366
|
|
|
(214
|
)
|
||||||
Total temporarily impaired securities
|
|
36
|
|
$
|
29,417
|
|
|
$
|
(294
|
)
|
|
$
|
10,581
|
|
|
$
|
(436
|
)
|
|
$
|
39,998
|
|
|
$
|
(730
|
)
|
Held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government sponsored entities
|
|
2
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,933
|
|
|
$
|
(93
|
)
|
|
$
|
2,993
|
|
|
$
|
(93
|
)
|
Residential mortgage-backed securities
|
|
2
|
|
—
|
|
|
—
|
|
|
979
|
|
|
(18
|
)
|
|
979
|
|
|
(18
|
)
|
||||||
Commercial mortgage-backed securities
|
|
2
|
|
—
|
|
|
—
|
|
|
3,543
|
|
|
(142
|
)
|
|
3,543
|
|
|
(142
|
)
|
||||||
Total temporarily impaired securities
|
|
6
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,455
|
|
|
$
|
(253
|
)
|
|
$
|
7,455
|
|
|
$
|
(253
|
)
|
|
|
For the years ended December 31,
|
||||||||||
(In thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Available for sale:
|
|
|
|
|
|
|
|
|
||||
Realized gains
|
|
$
|
—
|
|
|
$
|
89
|
|
|
$
|
302
|
|
Realized losses
|
|
(4
|
)
|
|
(61
|
)
|
|
(1
|
)
|
|||
Total securities available for sale
|
|
(4
|
)
|
|
28
|
|
|
301
|
|
|||
Held to maturity:
|
|
|
|
|
|
|
||||||
Realized gains
|
|
—
|
|
|
38
|
|
|
123
|
|
|||
Realized losses
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|||
Total securities held to maturity
|
|
—
|
|
|
34
|
|
|
123
|
|
|||
Net (losses) gains on sales of securities
|
|
$
|
(4
|
)
|
|
$
|
62
|
|
|
$
|
424
|
|
•
|
The net loss during 2018 is attributed to the partial call of
one
tax-exempt municipal security with a book value of
$174 thousand
which resulted in a loss of
$4 thousand
.
|
•
|
The net gains during 2017 are attributed to the sale of
three
mortgage-backed securities with a total book value of
$1.2 million
and resulting gains of
$71 thousand
, the sale of
one
taxable municipal security with a book value of
$529 thousand
and resulting gains of
$38 thousand
, the call of
two
asset-backed securities totaling
$3.5 million
in book value, resulting in gains of
$3 thousand
, and the call of
four
municipal tax-exempt securities with a total book value of
$500 thousand
and resulting gains of
$15 thousand
, partially offset by the sale of
two
mortgage-backed securities with a book value of
$1.6 million
which resulted in a loss of
$58 thousand
, and the call of
two
corporate bonds with a book value of
$3.0 million
and resulting losses of
$7 thousand
.
|
•
|
The net gains during 2016 are attributed to the sale of
fifteen
municipal securities with a total book value of
$6.4 million
and resulting gains of
$112 thousand
, the sale of
two
SBA securities with a book value of
$2.5 million
and resulting gains of
$12 thousand
, the sale of
thirteen
equity securities totaling
$515 thousand
in book value, resulting in pre-tax gains of approximately
$177 thousand
, and the sale of
five
corporate bonds with a total book value of
$8.5 million
and resulting gains of
$124 thousand
, partially offset by the sale of
one
SBA security with a book value of
$753 thousand
resulting in a loss of
$1 thousand
.
|
|
|
For the year ended December 31,
|
|
(In thousands)
|
|
2018
|
|
Net losses recognized during the period on equity securities
|
|
(195
|
)
|
Less: Net (losses) gains recognized during the period on equity securities sold during the period
|
|
—
|
|
Unrealized losses recognized during the reporting period on equity securities still held at the reporting date
|
|
(195
|
)
|
(In thousands)
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
SBA loans held for investment
|
|
$
|
39,333
|
|
|
$
|
43,999
|
|
Commercial loans
|
|
|
|
|
||||
SBA 504 loans
|
|
29,155
|
|
|
21,871
|
|
||
Commercial other
|
|
104,587
|
|
|
82,825
|
|
||
Commercial real estate
|
|
510,370
|
|
|
469,696
|
|
||
Commercial real estate construction
|
|
49,990
|
|
|
54,473
|
|
||
Residential mortgage loans
|
|
436,056
|
|
|
365,145
|
|
||
Consumer loans
|
|
|
|
|
||||
Home equity
|
|
59,887
|
|
|
55,817
|
|
||
Consumer other
|
|
64,017
|
|
|
54,038
|
|
||
Total loans held for investment
|
|
$
|
1,293,395
|
|
|
$
|
1,147,864
|
|
SBA loans held for sale
|
|
11,171
|
|
|
22,810
|
|
||
Total loans
|
|
$
|
1,304,566
|
|
|
$
|
1,170,674
|
|
|
|
December 31, 2018
|
||||||||||||||
|
|
SBA & Commercial loans - Internal risk ratings
|
||||||||||||||
(In thousands)
|
|
Pass
|
|
Special mention
|
|
Substandard
|
|
Total
|
||||||||
SBA loans held for investment
|
|
$
|
37,198
|
|
|
$
|
601
|
|
|
$
|
1,534
|
|
|
$
|
39,333
|
|
Commercial loans
|
|
|
|
|
|
|
|
|
||||||||
SBA 504 loans
|
|
28,105
|
|
|
—
|
|
|
1,050
|
|
|
29,155
|
|
||||
Commercial other
|
|
103,806
|
|
|
322
|
|
|
459
|
|
|
104,587
|
|
||||
Commercial real estate
|
|
504,022
|
|
|
2,879
|
|
|
3,469
|
|
|
510,370
|
|
||||
Commercial real estate construction
|
|
49,990
|
|
|
—
|
|
|
—
|
|
|
49,990
|
|
||||
Total commercial loans
|
|
685,923
|
|
|
3,201
|
|
|
4,978
|
|
|
694,102
|
|
||||
Total SBA and commercial loans
|
|
$
|
723,121
|
|
|
$
|
3,802
|
|
|
$
|
6,512
|
|
|
$
|
733,435
|
|
|
|
Residential mortgage & Consumer loans - Performing/Nonperforming
|
||||||||||||||
(In thousands)
|
|
|
|
Performing
|
|
Nonperforming
|
|
Total
|
||||||||
Residential mortgage loans
|
|
|
|
$
|
431,845
|
|
|
$
|
4,211
|
|
|
$
|
436,056
|
|
||
Consumer loans
|
|
|
|
|
|
|
|
|
||||||||
Home equity
|
|
|
|
59,861
|
|
|
26
|
|
|
59,887
|
|
|||||
Consumer other
|
|
|
|
64,017
|
|
|
—
|
|
|
64,017
|
|
|||||
Total consumer loans
|
|
|
|
123,878
|
|
|
26
|
|
|
123,904
|
|
|||||
Total residential mortgage and consumer loans
|
|
|
|
$
|
555,723
|
|
|
$
|
4,237
|
|
|
$
|
559,960
|
|
|
|
December 31, 2017
|
||||||||||||||
|
|
SBA & Commercial loans - Internal risk ratings
|
||||||||||||||
(In thousands)
|
|
Pass
|
|
Special mention
|
|
Substandard
|
|
Total
|
||||||||
SBA loans held for investment
|
|
$
|
42,415
|
|
|
$
|
373
|
|
|
$
|
1,211
|
|
|
$
|
43,999
|
|
Commercial loans
|
|
|
|
|
|
|
|
|
||||||||
SBA 504 loans
|
|
20,751
|
|
|
1,024
|
|
|
96
|
|
|
21,871
|
|
||||
Commercial other
|
|
82,201
|
|
|
599
|
|
|
25
|
|
|
82,825
|
|
||||
Commercial real estate
|
|
464,589
|
|
|
3,047
|
|
|
2,060
|
|
|
469,696
|
|
||||
Commercial real estate construction
|
|
54,473
|
|
|
—
|
|
|
—
|
|
|
54,473
|
|
||||
Total commercial loans
|
|
622,014
|
|
|
4,670
|
|
|
2,181
|
|
|
628,865
|
|
||||
Total SBA and commercial loans
|
|
$
|
664,429
|
|
|
$
|
5,043
|
|
|
$
|
3,392
|
|
|
$
|
672,864
|
|
|
|
Residential mortgage & Consumer loans - Performing/Nonperforming
|
||||||||||||||
(In thousands)
|
|
|
|
Performing
|
|
Nonperforming
|
|
Total
|
||||||||
Residential mortgage loans
|
|
|
|
$
|
363,476
|
|
|
$
|
1,669
|
|
|
$
|
365,145
|
|
||
Consumer loans
|
|
|
|
|
|
|
|
|
||||||||
Home equity
|
|
|
|
55,192
|
|
|
625
|
|
|
55,817
|
|
|||||
Consumer other
|
|
|
|
54,038
|
|
|
—
|
|
|
54,038
|
|
|||||
Total consumer loans
|
|
|
|
109,230
|
|
|
625
|
|
|
109,855
|
|
|||||
Total residential mortgage and consumer loans
|
|
|
|
$
|
472,706
|
|
|
$
|
2,294
|
|
|
$
|
475,000
|
|
|
|
December 31, 2018
|
||||||||||||||||||||||||||
(In thousands)
|
|
30-59 days past due
|
|
60-89 days past due
|
|
90+ days and still accruing
|
|
Nonaccrual (1)
|
|
Total past due
|
|
Current
|
|
Total loans
|
||||||||||||||
SBA loans held for investment
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,560
|
|
|
$
|
1,560
|
|
|
$
|
37,773
|
|
|
$
|
39,333
|
|
Commercial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
SBA 504 loans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,155
|
|
|
29,155
|
|
|||||||
Commercial other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
30
|
|
|
104,557
|
|
|
104,587
|
|
|||||||
Commercial real estate
|
|
301
|
|
|
—
|
|
|
—
|
|
|
1,046
|
|
|
1,347
|
|
|
509,023
|
|
|
510,370
|
|
|||||||
Commercial real estate construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49,990
|
|
|
49,990
|
|
|||||||
Residential mortgage loans
|
|
3,801
|
|
|
1,204
|
|
|
98
|
|
|
4,211
|
|
|
9,314
|
|
|
426,742
|
|
|
436,056
|
|
|||||||
Consumer loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity
|
|
396
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
422
|
|
|
59,465
|
|
|
59,887
|
|
|||||||
Consumer other
|
|
300
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300
|
|
|
63,717
|
|
|
64,017
|
|
|||||||
Total loans held for investment
|
|
$
|
4,798
|
|
|
$
|
1,204
|
|
|
$
|
98
|
|
|
$
|
6,873
|
|
|
$
|
12,973
|
|
|
$
|
1,280,422
|
|
|
$
|
1,293,395
|
|
SBA loans held for sale
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,171
|
|
|
11,171
|
|
|||||||
Total loans
|
|
$
|
4,798
|
|
|
$
|
1,204
|
|
|
$
|
98
|
|
|
$
|
6,873
|
|
|
$
|
12,973
|
|
|
$
|
1,291,593
|
|
|
$
|
1,304,566
|
|
(1)
|
At
December 31, 2018
, nonaccrual loans included
$89 thousand
of loans guaranteed by the SBA.
|
|
|
December 31, 2017
|
||||||||||||||||||||||||||
(In thousands)
|
|
30-59 days past due
|
|
60-89 days past due
|
|
90+ days and still accruing
|
|
Nonaccrual (1)
|
|
Total past due
|
|
Current
|
|
Total loans
|
||||||||||||||
SBA loans held for investment
|
|
$
|
240
|
|
|
$
|
313
|
|
|
$
|
—
|
|
|
$
|
632
|
|
|
$
|
1,185
|
|
|
$
|
42,814
|
|
|
$
|
43,999
|
|
Commercial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
SBA 504 loans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,871
|
|
|
21,871
|
|
|||||||
Commercial other
|
|
23
|
|
|
—
|
|
|
60
|
|
|
25
|
|
|
108
|
|
|
82,717
|
|
|
82,825
|
|
|||||||
Commercial real estate
|
|
558
|
|
|
1,073
|
|
|
—
|
|
|
43
|
|
|
1,674
|
|
|
468,022
|
|
|
469,696
|
|
|||||||
Commercial real estate construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54,473
|
|
|
54,473
|
|
|||||||
Residential mortgage loans
|
|
1,830
|
|
|
958
|
|
|
—
|
|
|
1,669
|
|
|
4,457
|
|
|
360,688
|
|
|
365,145
|
|
|||||||
Consumer loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity
|
|
51
|
|
|
205
|
|
|
—
|
|
|
625
|
|
|
881
|
|
|
54,936
|
|
|
55,817
|
|
|||||||
Consumer other
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
54,035
|
|
|
54,038
|
|
|||||||
Total loans held for investment
|
|
$
|
2,705
|
|
|
$
|
2,549
|
|
|
$
|
60
|
|
|
$
|
2,994
|
|
|
$
|
8,308
|
|
|
$
|
1,139,556
|
|
|
$
|
1,147,864
|
|
SBA loans held for sale
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,810
|
|
|
22,810
|
|
|||||||
Total loans
|
|
$
|
2,705
|
|
|
$
|
2,549
|
|
|
$
|
60
|
|
|
$
|
2,994
|
|
|
$
|
8,308
|
|
|
$
|
1,162,366
|
|
|
$
|
1,170,674
|
|
(1)
|
At
December 31, 2017
, nonaccrual loans included
$27 thousand
of loans guaranteed by the SBA.
|
|
|
December 31, 2018
|
||||||||||
(In thousands)
|
|
Unpaid principal balance
|
|
Recorded investment
|
|
Specific reserves
|
||||||
With no related allowance:
|
|
|
|
|
|
|
||||||
SBA loans held for investment (1)
|
|
$
|
359
|
|
|
$
|
353
|
|
|
$
|
—
|
|
Commercial loans
|
|
|
|
|
|
|
||||||
Commercial real estate
|
|
1,046
|
|
|
1,046
|
|
|
—
|
|
|||
Total commercial loans
|
|
1,046
|
|
|
1,046
|
|
|
—
|
|
|||
Total impaired loans with no related allowance
|
|
1,405
|
|
|
1,399
|
|
|
—
|
|
|||
With an allowance:
|
|
|
|
|
|
|
||||||
SBA loans held for investment (1)
|
|
1,257
|
|
|
1,118
|
|
|
540
|
|
|||
Commercial loans
|
|
|
|
|
|
|
||||||
Commercial other
|
|
30
|
|
|
30
|
|
|
30
|
|
|||
Commercial real estate
|
|
745
|
|
|
745
|
|
|
97
|
|
|||
Total commercial loans
|
|
775
|
|
|
775
|
|
|
127
|
|
|||
Total impaired loans with a related allowance
|
|
2,032
|
|
|
1,893
|
|
|
667
|
|
|||
Total individually evaluated impaired loans:
|
|
|
|
|
|
|
||||||
SBA loans held for investment (1)
|
|
1,616
|
|
|
1,471
|
|
|
540
|
|
|||
Commercial loans
|
|
|
|
|
|
|
||||||
Commercial other
|
|
30
|
|
|
30
|
|
|
30
|
|
|||
Commercial real estate
|
|
1,791
|
|
|
1,791
|
|
|
97
|
|
|||
Total commercial loans
|
|
1,821
|
|
|
1,821
|
|
|
127
|
|
|||
Total individually evaluated impaired loans
|
|
$
|
3,437
|
|
|
$
|
3,292
|
|
|
$
|
667
|
|
(1)
|
Balances are reduced by amount guaranteed by the SBA of
$89 thousand
at
December 31, 2018
.
|
|
|
December 31, 2017
|
||||||||||
(In thousands)
|
|
Unpaid principal balance
|
|
Recorded investment
|
|
Specific reserves
|
||||||
With no related allowance:
|
|
|
|
|
|
|
||||||
SBA loans held for investment (1)
|
|
$
|
135
|
|
|
$
|
52
|
|
|
$
|
—
|
|
Commercial loans
|
|
|
|
|
|
|
||||||
Commercial other
|
|
25
|
|
|
25
|
|
|
—
|
|
|||
Commercial real estate
|
|
43
|
|
|
43
|
|
|
—
|
|
|||
Total commercial loans
|
|
68
|
|
|
68
|
|
|
—
|
|
|||
Total impaired loans with no related allowance
|
|
203
|
|
|
120
|
|
|
—
|
|
|||
With an allowance:
|
|
|
|
|
|
|
||||||
SBA loans held for investment (1)
|
|
748
|
|
|
553
|
|
|
194
|
|
|||
Commercial loans
|
|
|
|
|
|
|
||||||
Commercial real estate
|
|
786
|
|
|
786
|
|
|
138
|
|
|||
Total commercial loans
|
|
786
|
|
|
786
|
|
|
138
|
|
|||
Total impaired loans with a related allowance
|
|
1,534
|
|
|
1,339
|
|
|
332
|
|
|||
Total individually evaluated impaired loans:
|
|
|
|
|
|
|
||||||
SBA loans held for investment (1)
|
|
883
|
|
|
605
|
|
|
194
|
|
|||
Commercial loans
|
|
|
|
|
|
|
||||||
Commercial other
|
|
25
|
|
|
25
|
|
|
—
|
|
|||
Commercial real estate
|
|
829
|
|
|
829
|
|
|
138
|
|
|||
Total commercial loans
|
|
854
|
|
|
854
|
|
|
138
|
|
|||
Total individually evaluated impaired loans
|
|
$
|
1,737
|
|
|
$
|
1,459
|
|
|
$
|
332
|
|
(1)
|
Balances are reduced by amount guaranteed by the SBA of
$27 thousand
at
December 31, 2017
.
|
|
|
For the years ended December 31,
|
||||||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
(In thousands)
|
|
Average recorded investment
|
|
Interest income recognized on impaired loans
|
|
Average recorded investment
|
|
Interest income recognized on impaired loans
|
|
Average recorded investment
|
|
Interest income recognized on impaired loans
|
||||||||||||
SBA loans held for investment (1)
|
|
$
|
1,063
|
|
|
$
|
3
|
|
|
$
|
668
|
|
|
$
|
47
|
|
|
$
|
1,535
|
|
|
$
|
14
|
|
Commercial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
SBA 504 loans
|
|
—
|
|
|
—
|
|
|
82
|
|
|
—
|
|
|
798
|
|
|
—
|
|
||||||
Commercial other
|
|
12
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
607
|
|
|
38
|
|
||||||
Commercial real estate
|
|
2,092
|
|
|
100
|
|
|
685
|
|
|
43
|
|
|
1,198
|
|
|
59
|
|
||||||
Commercial real estate construction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
272
|
|
|
—
|
|
||||||
Total
|
|
$
|
3,167
|
|
|
$
|
103
|
|
|
$
|
1,460
|
|
|
$
|
90
|
|
|
$
|
4,410
|
|
|
$
|
111
|
|
(1)
|
Balances are reduced by the average amount guaranteed by the SBA of
$85 thousand
,
$318 thousand
and
$246 thousand
for years ended
December 31, 2018
,
2017
and
2016
, respectively.
|
|
|
For the years ended December 31,
|
||||||||||
(In thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Balance, beginning of year
|
|
$
|
1,800
|
|
|
$
|
2,086
|
|
|
$
|
1,389
|
|
Servicing assets capitalized
|
|
939
|
|
|
172
|
|
|
1,472
|
|
|||
Amortization of expense
|
|
(364
|
)
|
|
(458
|
)
|
|
(775
|
)
|
|||
Balance, end of year
|
|
$
|
2,375
|
|
|
$
|
1,800
|
|
|
$
|
2,086
|
|
(In thousands)
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Balance, beginning of year
|
|
$
|
33,109
|
|
|
$
|
29,256
|
|
New loans and advances
|
|
4,083
|
|
|
6,121
|
|
||
Loan repayments
|
|
(14,763
|
)
|
|
(2,268
|
)
|
||
Balance, end of year
|
|
$
|
22,429
|
|
|
$
|
33,109
|
|
•
|
For SBA 7(a) and commercial loans, the estimate of loss based on pools of loans with similar characteristics is made through the use of a standardized loan grading system that is applied on an individual loan level and updated on a continuous basis. The loan grading system incorporates reviews of the financial performance of the borrower, including cash flow, debt-service coverage ratio, earnings power, debt level and equity position, in conjunction with an assessment of the borrower's industry and future prospects. It also incorporates analysis of the type of collateral and the relative loan to value ratio.
|
•
|
For residential mortgage and consumer loans, the estimate of loss is based on pools of loans with similar characteristics. Factors such as credit score, delinquency status and type of collateral are evaluated. Factors are updated frequently to capture the recent behavioral characteristics of the subject portfolios, as well as any changes in loss mitigation or credit origination strategies, and adjustments to the reserve factors are made as needed.
|
|
|
For the year ended December 31, 2018
|
||||||||||||||||||||||
(In thousands)
|
|
SBA held for investment
|
|
Commercial
|
|
Residential
|
|
Consumer
|
|
Unallocated
|
|
Total
|
||||||||||||
Balance, beginning of period
|
|
$
|
1,471
|
|
|
$
|
7,825
|
|
|
$
|
3,130
|
|
|
$
|
1,130
|
|
|
$
|
—
|
|
|
$
|
13,556
|
|
Charge-offs
|
|
(354
|
)
|
|
(10
|
)
|
|
—
|
|
|
(22
|
)
|
|
—
|
|
|
(386
|
)
|
||||||
Recoveries
|
|
72
|
|
|
30
|
|
|
13
|
|
|
153
|
|
|
—
|
|
|
268
|
|
||||||
Net charge-offs
|
|
(282
|
)
|
|
20
|
|
|
13
|
|
|
131
|
|
|
—
|
|
|
(118
|
)
|
||||||
Provision (credit) for loan losses charged to expense
|
|
466
|
|
|
860
|
|
|
757
|
|
|
(33
|
)
|
|
—
|
|
|
2,050
|
|
||||||
Balance, end of period
|
|
$
|
1,655
|
|
|
$
|
8,705
|
|
|
$
|
3,900
|
|
|
$
|
1,228
|
|
|
$
|
—
|
|
|
$
|
15,488
|
|
|
|
For the year ended December 31, 2017
|
||||||||||||||||||||||
(In thousands)
|
|
SBA held for investment
|
|
Commercial
|
|
Residential
|
|
Consumer
|
|
Unallocated
|
|
Total
|
||||||||||||
Balance, beginning of period
|
|
$
|
1,576
|
|
|
$
|
7,302
|
|
|
$
|
2,593
|
|
|
$
|
925
|
|
|
$
|
183
|
|
|
$
|
12,579
|
|
Charge-offs
|
|
(293
|
)
|
|
(227
|
)
|
|
(55
|
)
|
|
(336
|
)
|
|
—
|
|
|
(911
|
)
|
||||||
Recoveries
|
|
121
|
|
|
102
|
|
|
12
|
|
|
3
|
|
|
—
|
|
|
238
|
|
||||||
Net charge-offs
|
|
(172
|
)
|
|
(125
|
)
|
|
(43
|
)
|
|
(333
|
)
|
|
—
|
|
|
(673
|
)
|
||||||
Provision (credit) for loan losses charged to expense
|
|
67
|
|
|
648
|
|
|
580
|
|
|
538
|
|
|
(183
|
)
|
|
1,650
|
|
||||||
Balance, end of period
|
|
$
|
1,471
|
|
|
$
|
7,825
|
|
|
$
|
3,130
|
|
|
$
|
1,130
|
|
|
$
|
—
|
|
|
$
|
13,556
|
|
|
|
For the year ended December 31, 2016
|
||||||||||||||||||||||
(In thousands)
|
|
SBA held for investment
|
|
Commercial
|
|
Residential
|
|
Consumer
|
|
Unallocated
|
|
Total
|
||||||||||||
Balance, beginning of period
|
|
$
|
1,961
|
|
|
$
|
7,050
|
|
|
$
|
2,769
|
|
|
$
|
817
|
|
|
$
|
162
|
|
|
$
|
12,759
|
|
Charge-offs
|
|
(557
|
)
|
|
(775
|
)
|
|
(101
|
)
|
|
(30
|
)
|
|
—
|
|
|
(1,463
|
)
|
||||||
Recoveries
|
|
33
|
|
|
29
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
63
|
|
||||||
Net charge-offs
|
|
(524
|
)
|
|
(746
|
)
|
|
(101
|
)
|
|
(29
|
)
|
|
—
|
|
|
(1,400
|
)
|
||||||
Provision (credit) for loan losses charged to expense
|
|
139
|
|
|
998
|
|
|
(75
|
)
|
|
137
|
|
|
21
|
|
|
1,220
|
|
||||||
Balance, end of period
|
|
$
|
1,576
|
|
|
$
|
7,302
|
|
|
$
|
2,593
|
|
|
$
|
925
|
|
|
$
|
183
|
|
|
$
|
12,579
|
|
|
|
December 31, 2018
|
||||||||||||||||||
(In thousands)
|
|
SBA held for investment
|
|
Commercial
|
|
Residential
|
|
Consumer
|
|
Total
|
||||||||||
Allowance for loan losses ending balance:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Individually evaluated for impairment
|
|
$
|
540
|
|
|
$
|
127
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
667
|
|
Collectively evaluated for impairment
|
|
1,115
|
|
|
8,578
|
|
|
3,900
|
|
|
1,228
|
|
|
14,821
|
|
|||||
Total
|
|
$
|
1,655
|
|
|
$
|
8,705
|
|
|
$
|
3,900
|
|
|
$
|
1,228
|
|
|
$
|
15,488
|
|
Loan ending balances:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Individually evaluated for impairment
|
|
$
|
1,471
|
|
|
$
|
1,821
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,292
|
|
Collectively evaluated for impairment
|
|
37,862
|
|
|
692,281
|
|
|
436,056
|
|
|
123,904
|
|
|
1,290,103
|
|
|||||
Total
|
|
$
|
39,333
|
|
|
$
|
694,102
|
|
|
$
|
436,056
|
|
|
$
|
123,904
|
|
|
$
|
1,293,395
|
|
|
|
December 31, 2017
|
||||||||||||||||||
(In thousands)
|
|
SBA held for investment
|
|
Commercial
|
|
Residential
|
|
Consumer
|
|
Total
|
||||||||||
Allowance for loan losses ending balance:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Individually evaluated for impairment
|
|
$
|
194
|
|
|
$
|
138
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
332
|
|
Collectively evaluated for impairment
|
|
1,277
|
|
|
7,687
|
|
|
3,130
|
|
|
1,130
|
|
|
13,224
|
|
|||||
Total
|
|
$
|
1,471
|
|
|
$
|
7,825
|
|
|
$
|
3,130
|
|
|
$
|
1,130
|
|
|
$
|
13,556
|
|
Loan ending balances:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Individually evaluated for impairment
|
|
$
|
605
|
|
|
$
|
854
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,459
|
|
Collectively evaluated for impairment
|
|
43,394
|
|
|
628,011
|
|
|
365,145
|
|
|
109,855
|
|
|
1,146,405
|
|
|||||
Total
|
|
$
|
43,999
|
|
|
$
|
628,865
|
|
|
$
|
365,145
|
|
|
$
|
109,855
|
|
|
$
|
1,147,864
|
|
(In thousands)
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Land and buildings
|
|
$
|
25,214
|
|
|
$
|
25,155
|
|
Furniture, fixtures and equipment
|
|
10,778
|
|
|
10,074
|
|
||
Leasehold improvements
|
|
2,385
|
|
|
1,823
|
|
||
Gross premises and equipment
|
|
38,377
|
|
|
37,052
|
|
||
Less: Accumulated depreciation
|
|
(15,006
|
)
|
|
(13,582
|
)
|
||
Net premises and equipment
|
|
$
|
23,371
|
|
|
$
|
23,470
|
|
(In thousands)
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Prepaid expenses
|
|
$
|
1,061
|
|
|
$
|
587
|
|
Servicing assets:
|
|
|
|
|
||||
SBA servicing asset
|
|
1,024
|
|
|
893
|
|
||
Mortgage servicing asset
|
|
1,351
|
|
|
907
|
|
||
Net receivable due from SBA
|
|
151
|
|
|
45
|
|
||
Unrealized gains on interest rate swap agreements
|
|
1,432
|
|
|
1,407
|
|
||
Prepaid insurance
|
|
1,755
|
|
|
1,633
|
|
||
Other
|
|
1,861
|
|
|
886
|
|
||
Total other assets
|
|
$
|
8,635
|
|
|
$
|
6,358
|
|
(In thousands)
|
|
Three months or less
|
|
More than three months through six months
|
|
More than six months through twelve months
|
|
More than twelve months
|
|
Total
|
||||||||||
At December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Less than $100,000
|
|
$
|
16,758
|
|
|
$
|
23,851
|
|
|
$
|
42,365
|
|
|
$
|
101,048
|
|
|
$
|
184,022
|
|
$100,000 or more
|
|
35,085
|
|
|
34,674
|
|
|
28,717
|
|
|
74,518
|
|
|
172,994
|
|
|||||
At December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Less than $100,000
|
|
$
|
13,079
|
|
|
$
|
12,407
|
|
|
$
|
34,810
|
|
|
$
|
73,585
|
|
|
$
|
133,881
|
|
$100,000 or more
|
|
2,986
|
|
|
9,421
|
|
|
39,082
|
|
|
40,094
|
|
|
91,583
|
|
(In thousands)
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
||||||||||||||
Balance maturing
|
|
$
|
181,450
|
|
|
$
|
108,623
|
|
|
$
|
46,732
|
|
|
$
|
15,182
|
|
|
$
|
4,639
|
|
|
$
|
390
|
|
|
$
|
357,016
|
|
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
(In thousands)
|
|
Amount
|
|
Rate
|
|
Amount
|
|
Rate
|
|
Amount
|
|
Rate
|
|||||||||
FHLB borrowings and repurchase agreements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
At December 31,
|
|
$
|
210,000
|
|
|
2.31
|
%
|
|
$
|
260,000
|
|
|
1.59
|
%
|
|
$
|
106,000
|
|
|
1.83
|
%
|
Year-to-date average
|
|
121,970
|
|
|
1.78
|
|
|
110,420
|
|
|
1.75
|
|
|
88,754
|
|
|
2.21
|
|
|||
Maximum outstanding
|
|
238,000
|
|
|
|
|
260,000
|
|
|
|
|
106,000
|
|
|
|
||||||
Repurchase agreements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
At December 31,
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
15,000
|
|
|
3.67
|
%
|
|
$
|
15,000
|
|
|
3.67
|
%
|
Year-to-date average
|
|
2,384
|
|
|
3.67
|
|
|
15,000
|
|
|
3.67
|
|
|
15,000
|
|
|
3.67
|
|
|||
Maximum outstanding
|
|
15,000
|
|
|
|
|
15,000
|
|
|
|
|
15,000
|
|
|
|
||||||
Subordinated debentures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
At December 31,
|
|
$
|
10,310
|
|
|
2.40
|
%
|
|
$
|
10,310
|
|
|
2.40
|
%
|
|
$
|
10,310
|
|
|
2.40
|
%
|
Year-to-date average
|
|
10,310
|
|
|
2.40
|
|
|
10,310
|
|
|
2.40
|
|
|
11,099
|
|
|
2.35
|
|
|||
Maximum outstanding
|
|
10,310
|
|
|
|
|
10,310
|
|
|
|
|
15,465
|
|
|
|
(In thousands)
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
||||||||||||||
FHLB borrowings
|
|
$
|
210,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
210,000
|
|
Subordinated debentures
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,310
|
|
|
10,310
|
|
|||||||
Total borrowings
|
|
$
|
210,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,310
|
|
|
$
|
220,310
|
|
•
|
The
$160.0 million
FHLB overnight line of credit advance issued on December 31, 2018 was at a rate of
2.60%
and was repaid on January 2, 2019.
|
•
|
The
$20.0 million
FHLB advance that was issued on December 7, 2018 has an adjustable interest rate equal to 3 month LIBOR plus
5.0
basis points and matures on June 7, 2019. This borrowing was swapped to a 5 year fixed rate borrowing at
1.730%
.
|
•
|
The
$10.0 million
FHLB advance that was issued on August 16, 2018 has an adjustable interest rate equal to 3 month LIBOR plus
8.5
basis points and matures on February 19, 2019. This borrowing was swapped to a 5 year fixed rate borrowing at
1.103%
.
|
•
|
The
$20.0 million
FHLB advance that was issued on July 5, 2018 has an adjustable interest rate equal to LIBOR minus
1.0
basis points and matures on January 7, 2019. This borrowing was swapped to a 5 year fixed rate borrowing at
1.048%
.
|
•
|
On July 24, 2006, Unity (NJ) Statutory Trust II, a statutory business trust and wholly-owned subsidiary of Unity Bancorp, Inc., issued
$10.0 million
of floating rate capital trust pass through securities to investors due on
July 24, 2036
. The subordinated debentures are redeemable in whole or part, prior to maturity but after July 24, 2011. The floating interest rate on the subordinated debentures is the three-month LIBOR plus
159
basis points and reprices quarterly. The floating interest rate was
4.41%
at
December 31, 2018
and
3.26%
at
December 31, 2017
. This has been swapped to a 3 year fixed rate borrowing at
0.885%
.
|
•
|
On December 19, 2006, Unity (NJ) Statutory Trust III, a statutory business trust and wholly-owned subsidiary of Unity Bancorp, Inc., issued
$5.0 million
of floating rate capital trust pass through securities to investors due on
December 19, 2036
. On February 26, 2016, Unity (NJ) Statutory Trust III, repurchased the $
5.0 million
of floating rate securities, and redeemed
$155 thousand
of the related common equity securities described below. The subordinated debentures were repurchased at a price of
$0.5475
per dollar, which resulted in a gain of
$2.3 million
.
|
•
|
In connection with the formation of the statutory business trusts, the trusts also issued
$465 thousand
of common equity securities to the Company, which together with the proceeds stated above were used to purchase the subordinated debentures, under the same terms and conditions. At December 31,
2018
and
2017
,
$310 thousand
of the common equity securities remained.
|
(In thousands, except percentages and years)
|
|
2018
|
|
2017
|
||||
Notional amount
|
|
$
|
60,000
|
|
|
$
|
60,000
|
|
Weighted average pay rate
|
|
1.26
|
%
|
|
1.26
|
%
|
||
Weighted average receive rate
|
|
1.88
|
%
|
|
1.03
|
%
|
||
Weighted average maturity in years
|
|
2.36
|
|
|
3.36
|
|
||
Unrealized gains relating to interest rate swaps
|
|
$
|
1,433
|
|
|
$
|
1,407
|
|
(In thousands)
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
||||||||||||||
Operating lease rental payments
|
|
$
|
383
|
|
|
$
|
334
|
|
|
$
|
341
|
|
|
$
|
278
|
|
|
$
|
168
|
|
|
$
|
376
|
|
|
$
|
1,880
|
|
|
|
For the year ended December 31, 2018
|
||||||||||||||
(In thousands)
|
|
Net unrealized losses on securities
|
|
Adjustments related to defined benefit plan
|
|
Net unrealized gains from cash flow hedges
|
|
Accumulated other comprehensive income (loss)
|
||||||||
Balance, beginning of period
|
|
$
|
(335
|
)
|
|
$
|
(341
|
)
|
|
$
|
882
|
|
|
$
|
206
|
|
Other comprehensive (loss) income before reclassifications
|
|
(531
|
)
|
|
—
|
|
|
148
|
|
|
(383
|
)
|
||||
Less amounts reclassified from accumulated other comprehensive (loss) income
|
|
(145
|
)
|
|
90
|
|
|
—
|
|
|
(55
|
)
|
||||
Period change
|
|
(386
|
)
|
|
(90
|
)
|
|
148
|
|
|
(328
|
)
|
||||
Balance, end of period (1)
|
|
$
|
(721
|
)
|
|
$
|
(431
|
)
|
|
$
|
1,030
|
|
|
$
|
(122
|
)
|
|
|
For the year ended December 31, 2017
|
||||||||||||||
(In thousands)
|
|
Net unrealized (losses) gains on securities
|
|
Adjustments related to defined benefit plan
|
|
Net unrealized gains from cash flow hedges
|
|
Accumulated other comprehensive income (loss)
|
||||||||
Balance, beginning of period
|
|
$
|
(161
|
)
|
|
$
|
(391
|
)
|
|
$
|
712
|
|
|
$
|
160
|
|
Other comprehensive (loss) income before reclassifications
|
|
(134
|
)
|
|
—
|
|
|
170
|
|
|
36
|
|
||||
Less amounts reclassified from accumulated other comprehensive (loss) income
|
|
40
|
|
|
(50
|
)
|
|
—
|
|
|
(10
|
)
|
||||
Period change
|
|
(174
|
)
|
|
50
|
|
|
170
|
|
|
46
|
|
||||
Balance, end of period
|
|
$
|
(335
|
)
|
|
$
|
(341
|
)
|
|
$
|
882
|
|
|
$
|
206
|
|
|
|
For the year ended December 31, 2016
|
||||||||||||||
(In thousands)
|
|
Net unrealized (losses) gains on securities
|
|
Adjustments related to defined benefit plan
|
|
Net unrealized (losses) gains from cash flow hedges
|
|
Accumulated other comprehensive (loss) income
|
||||||||
Balance, beginning of period
|
|
$
|
(2
|
)
|
|
$
|
(448
|
)
|
|
$
|
(17
|
)
|
|
$
|
(467
|
)
|
Other comprehensive income before reclassifications
|
|
116
|
|
|
—
|
|
|
729
|
|
|
845
|
|
||||
Less amounts reclassified from accumulated other comprehensive income (loss)
|
|
275
|
|
|
(57
|
)
|
|
—
|
|
|
218
|
|
||||
Period change
|
|
(159
|
)
|
|
57
|
|
|
729
|
|
|
627
|
|
||||
Balance, end of period
|
|
$
|
(161
|
)
|
|
$
|
(391
|
)
|
|
$
|
712
|
|
|
$
|
160
|
|
|
|
For the years ended December 31,
|
||||||||||
(In thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
ATM and check card fees
|
|
$
|
760
|
|
|
$
|
721
|
|
|
$
|
614
|
|
Wire transfer fees
|
|
134
|
|
|
104
|
|
|
106
|
|
|||
Safe deposit box fees
|
|
91
|
|
|
92
|
|
|
92
|
|
|||
Other
|
|
222
|
|
|
191
|
|
|
173
|
|
|||
Total other income
|
|
$
|
1,207
|
|
|
$
|
1,108
|
|
|
$
|
985
|
|
|
|
For the years ended December 31,
|
||||||||||
(In thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Travel, entertainment, training and recruiting
|
|
$
|
806
|
|
|
$
|
761
|
|
|
$
|
825
|
|
Insurance
|
|
336
|
|
|
347
|
|
|
343
|
|
|||
Stationery and supplies
|
|
228
|
|
|
249
|
|
|
222
|
|
|||
Retail losses
|
|
60
|
|
|
37
|
|
|
79
|
|
|||
Other
|
|
352
|
|
|
489
|
|
|
373
|
|
|||
Total other expenses
|
|
$
|
1,782
|
|
|
$
|
1,883
|
|
|
$
|
1,842
|
|
|
|
For the years ended December 31,
|
||||||||||
(In thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Federal - current provision
|
|
$
|
5,507
|
|
|
$
|
7,003
|
|
|
$
|
6,352
|
|
Federal - deferred (benefit) provision
|
|
(799
|
)
|
|
1,702
|
|
|
73
|
|
|||
Total federal provision
|
|
4,708
|
|
|
8,705
|
|
|
6,425
|
|
|||
State - current provision
|
|
1,143
|
|
|
991
|
|
|
795
|
|
|||
State - deferred (benefit) provision
|
|
(463
|
)
|
|
(156
|
)
|
|
37
|
|
|||
Total state provision
|
|
680
|
|
|
835
|
|
|
832
|
|
|||
Total provision for income taxes
|
|
$
|
5,388
|
|
|
$
|
9,540
|
|
|
$
|
7,257
|
|
|
|
For the years ended December 31,
|
||||||||||
(In thousands, except percentages)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Federal income tax provision at statutory rate
|
|
$
|
5,734
|
|
|
$
|
7,852
|
|
|
$
|
7,162
|
|
Increases (Decreases) resulting from:
|
|
|
|
|
|
|
||||||
Stock option and restricted stock
|
|
(434
|
)
|
|
(428
|
)
|
|
—
|
|
|||
Bank owned life insurance
|
|
(205
|
)
|
|
(164
|
)
|
|
(132
|
)
|
|||
Tax-exempt interest
|
|
(25
|
)
|
|
(56
|
)
|
|
(71
|
)
|
|||
Meals and entertainment
|
|
19
|
|
|
22
|
|
|
21
|
|
|||
Captive insurance premium
|
|
(200
|
)
|
|
(295
|
)
|
|
—
|
|
|||
State income taxes, net of federal income tax effect
|
|
538
|
|
|
543
|
|
|
541
|
|
|||
Impact of rate change on deferred tax assets
|
|
—
|
|
|
1,733
|
|
|
—
|
|
|||
Other, net
|
|
(39
|
)
|
|
333
|
|
|
(264
|
)
|
|||
Provision for income taxes
|
|
$
|
5,388
|
|
|
$
|
9,540
|
|
|
$
|
7,257
|
|
Effective tax rate
|
|
19.7
|
%
|
|
42.5
|
%
|
|
35.5
|
%
|
(In thousands)
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Allowance for loan losses
|
|
$
|
4,476
|
|
|
$
|
3,782
|
|
SERP
|
|
790
|
|
|
334
|
|
||
Stock-based compensation
|
|
561
|
|
|
434
|
|
||
Deferred compensation
|
|
385
|
|
|
274
|
|
||
Net unrealized security losses
|
|
292
|
|
|
150
|
|
||
Depreciation
|
|
231
|
|
|
237
|
|
||
State net operating loss
|
|
214
|
|
|
296
|
|
||
EVP retirement plan
|
|
130
|
|
|
75
|
|
||
Commitment reserve
|
|
84
|
|
|
81
|
|
||
Other
|
|
238
|
|
|
300
|
|
||
Gross deferred tax assets
|
|
7,401
|
|
|
5,963
|
|
||
Valuation allowance
|
|
(214
|
)
|
|
(296
|
)
|
||
Total deferred tax assets
|
|
7,187
|
|
|
5,667
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Deferred loan costs
|
|
414
|
|
|
502
|
|
||
Interest rate swaps
|
|
402
|
|
|
396
|
|
||
Goodwill
|
|
382
|
|
|
341
|
|
||
Prepaid insurance
|
|
324
|
|
|
298
|
|
||
Deferred servicing fees
|
|
243
|
|
|
100
|
|
||
Bond accretion
|
|
72
|
|
|
13
|
|
||
Total deferred tax liabilities
|
|
1,837
|
|
|
1,650
|
|
||
Net deferred tax asset
|
|
$
|
5,350
|
|
|
$
|
4,017
|
|
|
|
For the years ended December 31,
|
||||||||||
(In thousands, except per share amounts)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
|
$
|
21,919
|
|
|
$
|
12,893
|
|
|
$
|
13,209
|
|
Weighted average common shares outstanding - Basic
|
|
10,726
|
|
|
10,558
|
|
|
9,416
|
|
|||
Plus: Potential dilutive common stock equivalents
|
|
190
|
|
|
191
|
|
|
156
|
|
|||
Weighted average common shares outstanding - Diluted
|
|
10,916
|
|
|
10,749
|
|
|
9,572
|
|
|||
Net income per common share - Basic
|
|
$
|
2.04
|
|
|
$
|
1.22
|
|
|
$
|
1.40
|
|
Net income per common share - Diluted
|
|
2.01
|
|
|
1.20
|
|
|
1.38
|
|
|||
Stock options and common stock excluded from the income per share calculation as their effect would have been anti-dilutive
|
|
$
|
109
|
|
|
$
|
71
|
|
|
$
|
73
|
|
|
|
Shares
|
|
Weighted average exercise price
|
|
Weighted average remaining contractual life in years
|
|
Aggregate intrinsic value
|
|||||
Outstanding at December 31, 2015
|
|
522,338
|
|
|
$
|
6.45
|
|
|
5.1
|
|
$
|
2,561,095
|
|
Options granted
|
|
127,400
|
|
|
11.11
|
|
|
|
|
|
|||
Options exercised
|
|
(90,871
|
)
|
|
7.97
|
|
|
|
|
|
|||
Options forfeited
|
|
(1,833
|
)
|
|
7.00
|
|
|
|
|
|
|||
Options expired
|
|
(4,275
|
)
|
|
7.64
|
|
|
|
|
|
|||
Outstanding at December 31, 2016
|
|
552,759
|
|
|
$
|
7.26
|
|
|
5.7
|
|
$
|
4,663,432
|
|
Options granted
|
|
47,100
|
|
|
16.37
|
|
|
|
|
|
|||
Options exercised
|
|
(94,679
|
)
|
|
6.19
|
|
|
|
|
|
|||
Options forfeited
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Options expired
|
|
(607
|
)
|
|
11.48
|
|
|
|
|
|
|||
Outstanding at December 31, 2017
|
|
504,573
|
|
|
$
|
8.31
|
|
|
5.7
|
|
$
|
5,772,843
|
|
Options granted
|
|
203,000
|
|
|
20.15
|
|
|
|
|
|
|||
Options exercised
|
|
(115,962
|
)
|
|
4.97
|
|
|
|
|
|
|||
Options forfeited
|
|
(7,433
|
)
|
|
15.47
|
|
|
|
|
|
|||
Options expired
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding at December 31, 2018
|
|
584,178
|
|
|
$
|
13.00
|
|
|
7.1
|
|
$
|
4,574,680
|
|
Exercisable at December 31, 2018
|
|
312,779
|
|
|
$
|
8.33
|
|
|
5.4
|
|
$
|
3,886,738
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Number of options granted
|
|
203,000
|
|
|
47,100
|
|
|
127,400
|
|
|||
Weighted average exercise price
|
|
$
|
20.15
|
|
|
$
|
16.37
|
|
|
$
|
11.11
|
|
Weighted average fair value of options
|
|
$
|
6.04
|
|
|
$
|
4.64
|
|
|
$
|
3.49
|
|
Expected life in years (1)
|
|
7.17
|
|
|
6.57
|
|
|
6.79
|
|
|||
Expected volatility (2)
|
|
26.60
|
%
|
|
28.12
|
%
|
|
31.02
|
%
|
|||
Risk-free interest rate (3)
|
|
2.61
|
%
|
|
2.18
|
%
|
|
1.94
|
%
|
|||
Dividend yield (4)
|
|
1.23
|
%
|
|
1.15
|
%
|
|
1.38
|
%
|
(1)
|
The expected life of the options was estimated based on historical employee behavior and represents the period of time that options granted are expected to be outstanding.
|
(2)
|
The expected volatility of the Company’s stock price was based on the historical volatility over the period commensurate with the expected life of the options.
|
(3)
|
The risk-free interest rate is the U.S. Treasury rate commensurate with the expected life of the options on the date of grant.
|
(4)
|
The expected dividend yield is the projected annual yield based on the grant date stock price.
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Number of options exercised
|
|
115,962
|
|
|
94,679
|
|
|
90,871
|
|
|||
Total intrinsic value of options exercised
|
|
$
|
1,949,853
|
|
|
$
|
1,073,474
|
|
|
$
|
451,288
|
|
Cash received from options exercised
|
|
576,119
|
|
|
509,047
|
|
|
549,918
|
|
|||
Tax deduction realized from options exercised
|
|
548,104
|
|
|
438,514
|
|
|
184,351
|
|
|
|
Options outstanding
|
|
Options exercisable
|
||||||||||||
Range of exercise prices
|
|
Options outstanding
|
|
Weighted average remaining contractual life (in years)
|
|
Weighted average exercise price
|
|
Options exercisable
|
|
Weighted average exercise price
|
||||||
$0.00 - $6.00
|
|
80,361
|
|
|
3.3
|
|
$
|
5.45
|
|
|
80,361
|
|
|
$
|
5.45
|
|
$6.01 - $12.00
|
|
229,751
|
|
|
5.9
|
|
8.54
|
|
|
198,580
|
|
|
8.30
|
|
||
$12.01 - $18.00
|
|
74,066
|
|
|
8.1
|
|
15.69
|
|
|
33,838
|
|
|
15.37
|
|
||
$18.01 - $24.00
|
|
200,000
|
|
|
9.5
|
|
20.16
|
|
|
—
|
|
|
—
|
|
||
Total
|
|
584,178
|
|
|
7.1
|
|
$
|
13.00
|
|
|
312,779
|
|
|
$
|
8.33
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Compensation expense
|
|
$
|
478,733
|
|
|
$
|
283,823
|
|
|
$
|
218,013
|
|
Income tax benefit
|
|
134,572
|
|
|
115,942
|
|
|
89,058
|
|
|
|
Shares
|
|
Average grant date fair value
|
|||
Nonvested restricted stock at December 31, 2017
|
|
94,003
|
|
|
$
|
12.53
|
|
Granted
|
|
47,550
|
|
|
20.77
|
|
|
Canceled
|
|
(1,624
|
)
|
|
17.00
|
|
|
Vested
|
|
(34,617
|
)
|
|
11.39
|
|
|
Nonvested restricted stock at December 31, 2018
|
|
105,312
|
|
|
$
|
16.55
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Number of shares granted
|
|
47,550
|
|
|
38,400
|
|
|
44,016
|
|
|||
Average grant date fair value
|
|
$
|
20.77
|
|
|
$
|
16.36
|
|
|
$
|
11.21
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Compensation expense
|
|
$
|
574,236
|
|
|
$
|
462,470
|
|
|
$
|
327,151
|
|
Income tax benefit
|
|
161,418
|
|
|
188,919
|
|
|
133,644
|
|
|
|
For the years ended December 31,
|
||||||||||
(In thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Service cost (1)
|
|
$
|
1,460
|
|
|
$
|
121
|
|
|
$
|
62
|
|
Interest cost
|
|
101
|
|
|
43
|
|
|
38
|
|
|||
Amortization of prior service cost
|
|
83
|
|
|
83
|
|
|
83
|
|
|||
Net periodic benefit cost
|
|
$
|
1,644
|
|
|
$
|
247
|
|
|
$
|
183
|
|
|
|
For the years ended December 31,
|
||||||||||
(In thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Benefit obligation, beginning of year
|
|
$
|
1,187
|
|
|
$
|
1,023
|
|
|
$
|
923
|
|
Service cost (1)
|
|
1,460
|
|
|
121
|
|
|
62
|
|
|||
Interest cost
|
|
101
|
|
|
43
|
|
|
38
|
|
|||
Benefit obligation, end of year
|
|
$
|
2,747
|
|
|
$
|
1,187
|
|
|
$
|
1,023
|
|
•
|
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
|
•
|
Generally, this includes debt and equity securities and derivative contracts that are traded in an active exchange market (i.e. New York Stock Exchange), as well as certain U.S. Treasury, U.S. Government and sponsored entity agency mortgage-backed securities that are highly liquid and are actively traded in over-the-counter markets.
|
•
|
Quoted prices for similar assets or liabilities in active markets.
|
•
|
Quoted prices for identical or similar assets or liabilities in inactive markets.
|
•
|
Inputs other than quoted prices that are observable, either directly or indirectly, for the term of the asset or liability (i.e., interest rates, yield curves, credit risks, prepayment speeds or volatilities) or “market corroborated inputs.”
|
•
|
Generally, this includes U.S. Government and sponsored entity mortgage-backed securities, corporate debt securities and derivative contracts.
|
•
|
Prices or valuation techniques that require inputs that are both unobservable (i.e. supported by little or no market activity) and that are significant to the fair value of the assets or liabilities.
|
•
|
These assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.
|
|
|
Fair Value Measurements at December 31, 2018 Using
|
||||||||||||||
(In thousands)
|
|
Assets/Liabilities Measured at Fair Value
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
Measured on a recurring basis:
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Securities available for sale:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government sponsored entities
|
|
$
|
5,642
|
|
|
$
|
—
|
|
|
$
|
5,642
|
|
|
$
|
—
|
|
State and political subdivisions
|
|
4,498
|
|
|
—
|
|
|
4,498
|
|
|
—
|
|
||||
Residential mortgage-backed securities
|
|
26,613
|
|
|
—
|
|
|
26,613
|
|
|
—
|
|
||||
Corporate and other securities
|
|
9,960
|
|
|
—
|
|
|
9,960
|
|
|
—
|
|
||||
Total securities available for sale
|
|
$
|
46,713
|
|
|
$
|
—
|
|
|
$
|
46,713
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
|
2,144
|
|
|
—
|
|
|
2,144
|
|
|
—
|
|
||||
Total equity securities
|
|
$
|
2,144
|
|
|
$
|
—
|
|
|
$
|
2,144
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
|
1,433
|
|
|
—
|
|
|
1,433
|
|
|
—
|
|
||||
Total swap agreements
|
|
$
|
1,433
|
|
|
$
|
—
|
|
|
$
|
1,433
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Fair Value Measurements at December 31, 2017 Using
|
||||||||||||||
(In thousands)
|
|
Assets/Liabilities Measured at Fair Value
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
Measured on a recurring basis:
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Securities available for sale:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government sponsored entities
|
|
$
|
5,691
|
|
|
$
|
—
|
|
|
$
|
5,691
|
|
|
$
|
—
|
|
State and political subdivisions
|
|
5,192
|
|
|
—
|
|
|
5,192
|
|
|
—
|
|
||||
Residential mortgage-backed securities
|
|
31,878
|
|
|
—
|
|
|
31,878
|
|
|
—
|
|
||||
Corporate and other securities
|
|
10,732
|
|
|
—
|
|
|
10,732
|
|
|
—
|
|
||||
Total securities available for sale (1)
|
|
$
|
53,493
|
|
|
$
|
—
|
|
|
$
|
53,493
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
|
1,407
|
|
|
—
|
|
|
1,407
|
|
|
—
|
|
||||
Total swap agreements
|
|
$
|
1,407
|
|
|
$
|
—
|
|
|
$
|
1,407
|
|
|
$
|
—
|
|
|
|
Fair Value Measurements at December 31, 2018 Using
|
||||||||||||||||||
(In thousands)
|
|
Assets/Liabilities Measured at Fair Value
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
|
Net (Credit) Provision During Period
|
||||||||||
Measured on a non-recurring basis:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OREO
|
|
$
|
56
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
56
|
|
|
$
|
(196
|
)
|
Impaired collateral-dependent loans
|
|
2,625
|
|
|
—
|
|
|
—
|
|
|
2,625
|
|
|
(335
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Fair Value Measurements at December 31, 2017 Using
|
||||||||||||||||||
(In thousands)
|
|
Assets/Liabilities Measured at Fair Value
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
|
Net (Credit) Provision During Period
|
||||||||||
Measured on a non-recurring basis:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OREO
|
|
$
|
426
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
426
|
|
|
$
|
(299
|
)
|
Impaired collateral-dependent loans
|
|
1,126
|
|
|
—
|
|
|
—
|
|
|
1,126
|
|
|
(86
|
)
|
|
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
(In thousands)
|
|
Fair value level
|
|
Carrying amount
|
|
Estimated fair value
|
|
Carrying amount
|
|
Estimated fair value
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
Level 1
|
|
$
|
145,515
|
|
|
$
|
145,515
|
|
|
$
|
150,254
|
|
|
$
|
150,254
|
|
Securities (1)
|
|
Level 2
|
|
63,732
|
|
|
63,600
|
|
|
69,800
|
|
|
69,839
|
|
||||
SBA loans held for sale
|
|
Level 2
|
|
11,171
|
|
|
12,177
|
|
|
22,810
|
|
|
25,568
|
|
||||
Loans, net of allowance for loan losses (2)
|
|
Level 2
|
|
1,277,907
|
|
|
1,268,909
|
|
|
1,134,308
|
|
|
1,133,739
|
|
||||
Federal Home Loan Bank stock
|
|
Level 2
|
|
10,795
|
|
|
10,795
|
|
|
12,863
|
|
|
12,863
|
|
||||
Servicing assets
|
|
Level 3
|
|
2,375
|
|
|
2,375
|
|
|
1,800
|
|
|
1,800
|
|
||||
Accrued interest receivable
|
|
Level 2
|
|
6,399
|
|
|
6,399
|
|
|
5,447
|
|
|
5,447
|
|
||||
OREO
|
|
Level 3
|
|
56
|
|
|
56
|
|
|
426
|
|
|
426
|
|
||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Deposits
|
|
Level 2
|
|
1,207,687
|
|
|
1,204,731
|
|
|
1,043,137
|
|
|
1,041,111
|
|
||||
Borrowed funds and subordinated debentures
|
|
Level 2
|
|
220,310
|
|
|
218,879
|
|
|
285,310
|
|
|
284,117
|
|
||||
Accrued interest payable
|
|
Level 2
|
|
406
|
|
|
406
|
|
|
436
|
|
|
436
|
|
(1)
|
Includes held to maturity commercial mortgage-backed securities that are considered Level 3. These securities had book values of $
3.6
million and
$3.7
million at
December 31, 2018
and
2017
, respectively, with market values of $
3.4
million and
$3.5
million. Includes one corporate bond with a book value and market value of
$1.0 million
at
December 31, 2018
and
2017
.
|
(2)
|
Includes impaired loans that are considered Level 3 and reported separately in the tables under the “Fair Value on a Nonrecurring Basis” heading. Collateral-dependent impaired loans, net of specific reserves totaled
$2.6
million and
$1.1 million
at
December 31, 2018
and
2017
.
|
Balance Sheets
|
|
|
|
|
||||
(In thousands)
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
ASSETS
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,209
|
|
|
$
|
1,632
|
|
Equity securities
|
|
1,239
|
|
|
278
|
|
||
Investment in subsidiaries
|
|
143,487
|
|
|
124,634
|
|
||
Premises and equipment, net
|
|
3,893
|
|
|
3,999
|
|
||
Other assets
|
|
1,372
|
|
|
369
|
|
||
Total assets
|
|
$
|
151,200
|
|
|
$
|
130,912
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
||||
Loan due to subsidiary bank
|
|
$
|
2,396
|
|
|
$
|
2,483
|
|
Other liabilities
|
|
6
|
|
|
14
|
|
||
Subordinated debentures
|
|
10,310
|
|
|
10,310
|
|
||
Shareholders' equity
|
|
138,488
|
|
|
118,105
|
|
||
Total liabilities and shareholders' equity
|
|
$
|
151,200
|
|
|
$
|
130,912
|
|
Statements of Income
|
|
For the year ended December 31,
|
||||||||||
(In thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Dividend from Bank
|
|
$
|
2,890
|
|
|
$
|
2,452
|
|
|
$
|
6,598
|
|
Gain on repurchase of subordinated debenture
|
|
—
|
|
|
—
|
|
|
994
|
|
|||
Gains on sales of securities
|
|
—
|
|
|
—
|
|
|
177
|
|
|||
Other income
|
|
425
|
|
|
413
|
|
|
692
|
|
|||
Total income
|
|
3,315
|
|
|
2,865
|
|
|
8,461
|
|
|||
Interest expenses
|
|
251
|
|
|
251
|
|
|
265
|
|
|||
Market value write-downs on equity securities
|
|
171
|
|
|
—
|
|
|
—
|
|
|||
Other expenses
|
|
261
|
|
|
251
|
|
|
245
|
|
|||
Total expenses
|
|
683
|
|
|
502
|
|
|
510
|
|
|||
Income before provision for income taxes and equity in undistributed net income of subsidiary
|
|
2,632
|
|
|
2,363
|
|
|
7,951
|
|
|||
Benefit (provision) for income taxes
|
|
(14
|
)
|
|
(15
|
)
|
|
550
|
|
|||
Income before equity in undistributed net income of subsidiary
|
|
2,646
|
|
|
2,378
|
|
|
7,401
|
|
|||
Equity in undistributed net income of subsidiary
|
|
19,273
|
|
|
10,515
|
|
|
5,808
|
|
|||
Net income
|
|
$
|
21,919
|
|
|
$
|
12,893
|
|
|
$
|
13,209
|
|
Statements of Cash Flows
|
|
For the year ended December 31,
|
||||||||||
(In thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
21,919
|
|
|
$
|
12,893
|
|
|
$
|
13,209
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Equity in undistributed net income of subsidiary
|
|
(19,273
|
)
|
|
(10,515
|
)
|
|
(5,808
|
)
|
|||
Gains on sales of securities
|
|
—
|
|
|
—
|
|
|
(177
|
)
|
|||
Gain on repurchase of subordinated debenture
|
|
—
|
|
|
—
|
|
|
(994
|
)
|
|||
Net change in other assets and other liabilities
|
|
377
|
|
|
(81
|
)
|
|
118
|
|
|||
Net cash provided by operating activities
|
|
3,023
|
|
|
2,297
|
|
|
6,348
|
|
|||
INVESTING ACTIVITIES
|
|
|
|
|
|
|
||||||
Purchase of land and building
|
|
—
|
|
|
(55
|
)
|
|
(4,375
|
)
|
|||
Purchases of securities
|
|
(1,133
|
)
|
|
(262
|
)
|
|
(445
|
)
|
|||
Repayment of advances to subsidiary
|
|
—
|
|
|
—
|
|
|
7,230
|
|
|||
Proceeds from sales of securities
|
|
—
|
|
|
—
|
|
|
769
|
|
|||
Net cash used in investing activities
|
|
(1,133
|
)
|
|
(317
|
)
|
|
3,179
|
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
||||||
Proceeds from exercise of stock options
|
|
576
|
|
|
509
|
|
|
550
|
|
|||
Proceeds from capital offering
|
|
—
|
|
|
—
|
|
|
14,412
|
|
|||
Proceeds from advances from subsidiaries
|
|
—
|
|
|
—
|
|
|
2,625
|
|
|||
Repayment of advances from subsidiaries
|
|
(87
|
)
|
|
(83
|
)
|
|
(59
|
)
|
|||
Repayment of long term debt
|
|
—
|
|
|
—
|
|
|
(2,891
|
)
|
|||
Investment in Bank
|
|
—
|
|
|
—
|
|
|
(21,500
|
)
|
|||
Cash dividends paid on common stock
|
|
(2,802
|
)
|
|
(2,380
|
)
|
|
(1,524
|
)
|
|||
Net cash provided used in financing activities
|
|
(2,313
|
)
|
|
(1,954
|
)
|
|
(8,387
|
)
|
|||
(Decrease) increase in cash and cash equivalents
|
|
(423
|
)
|
|
26
|
|
|
1,140
|
|
|||
Cash and cash equivalents, beginning of period
|
|
1,632
|
|
|
1,606
|
|
|
466
|
|
|||
Cash and cash equivalents, end of period
|
|
$
|
1,209
|
|
|
$
|
1,632
|
|
|
$
|
1,606
|
|
SUPPLEMENTAL DISCLOSURES
|
|
|
|
|
|
|
||||||
Interest paid
|
|
$
|
368
|
|
|
$
|
374
|
|
|
$
|
273
|
|
|
|
2018
|
||||||||||||||
(In thousands, except per share data)
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Total interest income
|
|
$
|
15,640
|
|
|
$
|
16,369
|
|
|
$
|
17,194
|
|
|
$
|
18,060
|
|
Total interest expense
|
|
2,768
|
|
|
3,225
|
|
|
3,627
|
|
|
3,896
|
|
||||
Net interest income
|
|
12,872
|
|
|
13,144
|
|
|
13,567
|
|
|
14,164
|
|
||||
Provision for loan losses
|
|
500
|
|
|
550
|
|
|
500
|
|
|
500
|
|
||||
Net interest income after provision for loan losses
|
|
12,372
|
|
|
12,594
|
|
|
13,067
|
|
|
13,664
|
|
||||
Total noninterest income
|
|
2,286
|
|
|
2,312
|
|
|
2,479
|
|
|
1,954
|
|
||||
Total noninterest expense
|
|
8,194
|
|
|
8,158
|
|
|
8,801
|
|
|
8,268
|
|
||||
Income before provision for income taxes
|
|
6,464
|
|
|
6,748
|
|
|
6,745
|
|
|
7,350
|
|
||||
Provision for income taxes
|
|
1,235
|
|
|
1,351
|
|
|
1,255
|
|
|
1,547
|
|
||||
Net income
|
|
$
|
5,229
|
|
|
$
|
5,397
|
|
|
$
|
5,490
|
|
|
$
|
5,803
|
|
Net income per common share - Basic
|
|
$
|
0.49
|
|
|
$
|
0.50
|
|
|
$
|
0.51
|
|
|
$
|
0.54
|
|
Net income per common share - Diluted
|
|
0.48
|
|
|
0.49
|
|
|
0.50
|
|
|
0.54
|
|
|
|
2017
|
||||||||||||||
(In thousands, except per share data)
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Total interest income
|
|
$
|
12,594
|
|
|
$
|
13,477
|
|
|
$
|
14,195
|
|
|
$
|
15,044
|
|
Total interest expense
|
|
2,204
|
|
|
2,327
|
|
|
2,378
|
|
|
2,544
|
|
||||
Net interest income
|
|
10,390
|
|
|
11,150
|
|
|
11,817
|
|
|
12,500
|
|
||||
Provision for loan losses
|
|
250
|
|
|
400
|
|
|
500
|
|
|
500
|
|
||||
Net interest income after provision for loan losses
|
|
10,140
|
|
|
10,750
|
|
|
11,317
|
|
|
12,000
|
|
||||
Total noninterest income
|
|
2,204
|
|
|
2,021
|
|
|
2,008
|
|
|
2,037
|
|
||||
Total noninterest expense
|
|
7,440
|
|
|
7,421
|
|
|
7,554
|
|
|
7,629
|
|
||||
Income before provision for income taxes
|
|
4,904
|
|
|
5,350
|
|
|
5,771
|
|
|
6,408
|
|
||||
Provision for income taxes
|
|
1,712
|
|
|
1,906
|
|
|
2,014
|
|
|
3,908
|
|
||||
Net income
|
|
$
|
3,192
|
|
|
$
|
3,444
|
|
|
$
|
3,757
|
|
|
$
|
2,500
|
|
Net income per common share - Basic
|
|
$
|
0.30
|
|
|
$
|
0.33
|
|
|
$
|
0.36
|
|
|
$
|
0.23
|
|
Net income per common share - Diluted
|
|
0.30
|
|
|
0.32
|
|
|
0.35
|
|
|
0.23
|
|
|
|
2016
|
||||||||||||||
(In thousands, except per share data)
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Total interest income
|
|
$
|
11,176
|
|
|
$
|
11,487
|
|
|
$
|
12,081
|
|
|
$
|
12,280
|
|
Total interest expense
|
|
2,189
|
|
|
2,145
|
|
|
2,208
|
|
|
2,225
|
|
||||
Net interest income
|
|
8,987
|
|
|
9,342
|
|
|
9,873
|
|
|
10,055
|
|
||||
Provision for loan losses
|
|
200
|
|
|
400
|
|
|
420
|
|
|
200
|
|
||||
Net interest income after provision for loan losses
|
|
8,787
|
|
|
8,942
|
|
|
9,453
|
|
|
9,855
|
|
||||
Total noninterest income
|
|
4,280
|
|
|
2,234
|
|
|
2,173
|
|
|
2,373
|
|
||||
Total noninterest expense
|
|
6,607
|
|
|
6,728
|
|
|
6,993
|
|
|
7,303
|
|
||||
Income before provision for income taxes
|
|
6,460
|
|
|
4,448
|
|
|
4,633
|
|
|
4,925
|
|
||||
Provision for income taxes
|
|
2,255
|
|
|
1,624
|
|
|
1,613
|
|
|
1,765
|
|
||||
Net income
|
|
$
|
4,205
|
|
|
$
|
2,824
|
|
|
$
|
3,020
|
|
|
$
|
3,160
|
|
Net income per common share - Basic
|
|
$
|
0.45
|
|
|
$
|
0.30
|
|
|
$
|
0.32
|
|
|
$
|
0.33
|
|
Net income per common share - Diluted
|
|
0.44
|
|
|
0.30
|
|
|
0.32
|
|
|
0.32
|
|
|
|
At or for the years ended December 31,
|
||||||||||||||||||
(In thousands, except percentages)
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Selected Results of Operations
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
|
$
|
67,263
|
|
|
$
|
55,310
|
|
|
$
|
47,024
|
|
|
$
|
41,651
|
|
|
$
|
37,418
|
|
Interest expense
|
|
13,516
|
|
|
9,453
|
|
|
8,767
|
|
|
7,660
|
|
|
7,306
|
|
|||||
Net interest income
|
|
53,747
|
|
|
45,857
|
|
|
38,257
|
|
|
33,991
|
|
|
30,112
|
|
|||||
Provision for loan losses
|
|
2,050
|
|
|
1,650
|
|
|
1,220
|
|
|
500
|
|
|
2,550
|
|
|||||
Noninterest income
|
|
9,031
|
|
|
8,270
|
|
|
11,060
|
|
|
7,729
|
|
|
6,679
|
|
|||||
Noninterest expense
|
|
33,421
|
|
|
30,044
|
|
|
27,631
|
|
|
26,852
|
|
|
24,688
|
|
|||||
Provision for income taxes
|
|
5,388
|
|
|
9,540
|
|
|
7,257
|
|
|
4,811
|
|
|
3,145
|
|
|||||
Net income
|
|
21,919
|
|
|
12,893
|
|
|
13,209
|
|
|
9,557
|
|
|
6,408
|
|
|||||
Per Share Data
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per common share - Basic
|
|
$
|
2.04
|
|
|
$
|
1.22
|
|
|
$
|
1.40
|
|
|
$
|
1.03
|
|
|
$
|
0.75
|
|
Net income per common share - Diluted
|
|
2.01
|
|
|
1.20
|
|
|
1.38
|
|
|
1.02
|
|
|
0.74
|
|
|||||
Book value per common share
|
|
12.85
|
|
|
11.13
|
|
|
10.14
|
|
|
8.45
|
|
|
7.60
|
|
|||||
Market value per common share
|
|
20.76
|
|
|
19.75
|
|
|
15.70
|
|
|
11.34
|
|
|
8.57
|
|
|||||
Cash dividends declared on common shares
|
|
0.27
|
|
|
0.23
|
|
|
0.18
|
|
|
0.13
|
|
|
0.09
|
|
|||||
Selected Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
$
|
1,579,157
|
|
|
$
|
1,455,496
|
|
|
$
|
1,189,906
|
|
|
$
|
1,084,866
|
|
|
$
|
1,008,788
|
|
Loans
|
|
1,304,566
|
|
|
1,170,674
|
|
|
973,414
|
|
|
888,958
|
|
|
761,825
|
|
|||||
Allowance for loan losses
|
|
(15,488
|
)
|
|
(13,556
|
)
|
|
(12,579
|
)
|
|
(12,759
|
)
|
|
(12,551
|
)
|
|||||
Securities
|
|
63,732
|
|
|
69,800
|
|
|
61,547
|
|
|
71,336
|
|
|
80,082
|
|
|||||
Deposits
|
|
1,207,687
|
|
|
1,043,137
|
|
|
945,723
|
|
|
894,493
|
|
|
794,341
|
|
|||||
Borrowed funds and subordinated debentures
|
|
220,310
|
|
|
285,310
|
|
|
131,310
|
|
|
107,465
|
|
|
140,465
|
|
|||||
Shareholders' equity
|
|
138,488
|
|
|
118,105
|
|
|
106,291
|
|
|
78,470
|
|
|
70,123
|
|
|||||
Common shares outstanding
|
|
10,780
|
|
|
10,615
|
|
|
10,477
|
|
|
9,279
|
|
|
9,227
|
|
|||||
Performance Ratios
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Return on average assets
|
|
1.53
|
%
|
|
1.02
|
%
|
|
1.17
|
%
|
|
0.96
|
%
|
|
0.70
|
%
|
|||||
Return on average equity
|
|
17.10
|
|
|
11.47
|
|
|
15.37
|
|
|
12.92
|
|
|
10.28
|
|
|||||
Average equity to average assets
|
|
8.96
|
|
|
8.85
|
|
|
7.59
|
|
|
7.42
|
|
|
6.80
|
|
|||||
Efficiency ratio
|
|
53.07
|
|
|
55.57
|
|
|
56.51
|
|
|
64.41
|
|
|
67.90
|
|
|||||
Dividend payout
|
|
13.43
|
|
|
18.33
|
|
|
13.04
|
|
|
12.50
|
|
|
12.35
|
|
|||||
Net interest spread
|
|
3.65
|
|
|
3.57
|
|
|
3.36
|
|
|
3.42
|
|
|
3.35
|
|
|||||
Net interest margin
|
|
3.97
|
|
|
3.83
|
|
|
3.58
|
|
|
3.63
|
|
|
3.53
|
|
|||||
Asset Quality Ratios
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for loan losses to loans
|
|
1.19
|
%
|
|
1.16
|
%
|
|
1.29
|
%
|
|
1.44
|
%
|
|
1.65
|
%
|
|||||
Allowance for loan losses to nonperforming loans
|
|
225.35
|
|
|
452.77
|
|
|
173.82
|
|
|
175.74
|
|
|
110.41
|
|
|||||
Nonperforming loans to total loans
|
|
0.53
|
|
|
0.26
|
|
|
0.74
|
|
|
0.82
|
|
|
1.49
|
|
|||||
Nonperforming assets to total loans and OREO
|
|
0.53
|
|
|
0.29
|
|
|
0.85
|
|
|
0.99
|
|
|
1.64
|
|
|||||
Nonperforming assets to total assets
|
|
0.44
|
|
|
0.23
|
|
|
0.70
|
|
|
0.82
|
|
|
1.24
|
|
|||||
Net charge-offs to average loans
|
|
0.01
|
|
|
0.06
|
|
|
0.15
|
|
|
0.04
|
|
|
0.44
|
|
|||||
Capital Ratios - Company
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Leverage Ratio
|
|
9.90
|
%
|
|
9.37
|
%
|
|
9.73
|
%
|
|
8.82
|
%
|
|
8.71
|
%
|
|||||
Common Equity Tier 1 risk-based capital ratio
|
|
11.40
|
|
|
10.81
|
|
|
11.49
|
|
|
9.37
|
|
|
n/a
|
|
|||||
Tier 1 risk-based capital ratio
|
|
12.24
|
|
|
11.75
|
|
|
12.58
|
|
|
11.18
|
|
|
11.57
|
|
|||||
Total risk-based capital ratio
|
|
13.49
|
|
|
12.87
|
|
|
13.84
|
|
|
12.43
|
|
|
12.83
|
|
|||||
Capital Ratios - Bank
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Leverage Ratio
|
|
9.52
|
%
|
|
9.03
|
%
|
|
9.50
|
%
|
|
7.95
|
%
|
|
7.80
|
%
|
|||||
Common Equity Tier 1 risk-based capital ratio
|
|
11.80
|
|
|
11.33
|
|
|
12.23
|
|
|
10.08
|
|
|
n/a
|
|
|||||
Tier 1 risk-based capital ratio
|
|
11.80
|
|
|
11.33
|
|
|
12.23
|
|
|
10.08
|
|
|
10.37
|
|
|||||
Total risk-based capital ratio
|
|
13.05
|
|
|
12.50
|
|
|
13.48
|
|
|
12.36
|
|
|
12.80
|
|
Equity Compensation Plan Information
|
||||||||||
|
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights (A)
|
|
Weighted-average exercise price of outstanding options, warrants and rights (B)
|
|
Number of securities remaining available for issuance under equity compensation plans (excluding securities reflected in column (A)) (C)
|
||||
Equity compensation stock option plans approved by security holders
|
|
584,178
|
|
|
$
|
13.00
|
|
|
186,805
|
|
Equity compensation plans approved by security holders (Restricted stock plan)
|
|
105,312
|
|
|
—
|
|
|
65,478
|
|
|
Equity compensation plans not approved by security holders
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
Total
|
|
689,490
|
|
|
$
|
11.01
|
|
|
252,283
|
|
1.
|
The following Consolidated Financial Statements and Supplementary Data of the Company and subsidiaries are filed as part of this annual report:
|
2.
|
All Financial Statement Schedules are omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes.
|
Exhibit Number
|
|
Description of Exhibits
|
3(i)
|
|
|
3(ii)
|
|
|
4(i)
|
|
|
10(i)
|
|
|
10(ii)
|
|
|
10(iii)
|
|
|
10(iv)
|
|
|
10(v)
|
|
|
10(vi)
|
|
|
10(vii)
|
|
|
10(viii)
|
|
|
10(ix)
|
|
|
10(x)
|
|
|
10(xi)
|
|
|
10(xii)
|
|
|
10(xiii)
|
|
|
21
|
|
|
23.1
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definitions Linkbase Document
|
|
|
|
(1)
|
|
Previously filed with the Securities and Exchange Commission as an Exhibit to the Current Report on Form 8-K filed on July 22, 2002 and incorporated by reference herein.
|
(2)
|
|
Previously filed with the Securities and Exchange Commission as an Exhibit to the Proxy Statement for the Annual Meeting of Shareholders filed on March 30, 1998.
|
(3)
|
|
Previously filed with the Securities and Exchange Commission as an Exhibit to the Proxy Statement for the Annual Meeting of Shareholders filed on April 10, 2002.
|
(4)
|
|
Previously filed with the Securities and Exchange Commission as an Exhibit to the Current Report on Form 8-K filed February 24, 2017.
|
(5)
|
|
Previously filed with the Securities and Exchange Commission as an Exhibit to the Proxy Statement for the Annual Meeting of Shareholders filed on May 4, 2006.
|
(6)
|
|
Previously filed with the Securities and Exchange Commission as an Exhibit to Form S-8 filed on May 26, 2011 and incorporated by reference herein.
|
(7)
|
|
Previously filed with the Securities and Exchange Commission as an Exhibit to Form S-8 filed on July 12, 2013 and incorporated by reference herein.
|
(8)
|
|
Previously filed with the Securities and Exchange Commission as an Exhibit to the Current Report on Form 8-K filed October 10, 2017.
|
(9)
|
|
Previously filed with the Securities and Exchange Commission as an Exhibit to Form S-8 filed on May 22, 2015 and incorporated by reference herein.
|
(10)
|
|
Previously filed with the Securities and Exchange Commission as an Exhibit to Form 8-K filed on June 5, 2015 and incorporated by reference herein.
|
(11)
|
|
Previously filed with the Securities and Exchange Commission as an Exhibit to Form 8-K filed on October 27, 2015 and incorporated by reference herein.
|
(12)
|
|
Previously filed with the Securities and Exchange Commission as an Exhibit to Form S-8 filed on May 22, 2017 and incorporated by reference herein.
|
(13)
|
|
Previously filed with the Securities and Exchange Commission as an Exhibit to Form 8-K filed on October 30, 2018 and incorporated by reference herein.
|
By:
|
/s/ Alan J. Bedner , Jr.
|
|
Alan J. Bedner, Jr.
|
|
Executive Vice President
|
|
Chief Financial Officer
|
|
|
Date:
|
March 5, 2019
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ David D. Dallas
|
|
Chairman of the Board and Director
|
|
March 5, 2019
|
David D. Dallas
|
|
|
|
|
|
|
|
|
|
/s/ James A. Hughes
|
|
President, Chief Executive Officer and Director
|
|
March 5, 2019
|
James A. Hughes
|
|
|
|
|
|
|
|
|
|
/s/ Alan J. Bedner, Jr.
|
|
Chief Financial Officer
|
|
March 5, 2019
|
Alan J. Bedner, Jr.
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Dr. Mark S. Brody
|
|
Director
|
|
March 5, 2019
|
Dr. Mark S. Brody
|
|
|
|
|
|
|
|
|
|
/s/ Wayne Courtright
|
|
Director
|
|
March 5, 2019
|
Wayne Courtright
|
|
|
|
|
|
|
|
|
|
/s/ Robert H. Dallas, II
|
|
Director
|
|
March 5, 2019
|
Robert H. Dallas, II
|
|
|
|
|
|
|
|
|
|
/s/ Dr. Mary E. Gross
|
|
Director
|
|
March 5, 2019
|
Dr. Mary E. Gross
|
|
|
|
|
|
|
|
|
|
/s/ Peter E. Maricondo
|
|
Director
|
|
March 5, 2019
|
Peter E. Maricondo
|
|
|
|
|
|
|
|
|
|
Signatures (continued)
|
|
|
|
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Raj Patel
|
|
Director
|
|
March 5, 2019
|
Raj Patel
|
|
|
|
|
|
|
|
|
|
/s/ Donald E. Souders, Jr.
|
|
Director
|
|
March 5, 2019
|
Donald E. Souders, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ Aaron Tucker
|
|
Director
|
|
March 5, 2019
|
Aaron Tucker
|
|
|
|
|
|
|
|
|
|
/s/ Allen Tucker
|
|
Director
|
|
March 5, 2019
|
Allen Tucker
|
|
|
|
|
|
|
|
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of Unity Bancorp, Inc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated:
|
March 5, 2019
|
|
|
/s/ James A. Hughes
|
|
|
|
|
James A. Hughes
|
|
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of Unity Bancorp, Inc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Dated:
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March 5, 2019
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/s/ Alan J. Bedner
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Alan J. Bedner
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Executive Vice President and Chief Financial Officer
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1.
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The Annual Report on Form 10-K of the Company for the annual period ended
December 31, 2018
(the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Dated:
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March 5, 2019
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/s/ James A. Hughes
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James A. Hughes
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President and Chief Executive Officer
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Dated:
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March 5, 2019
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/s/ Alan J. Bedner
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Alan J. Bedner
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Executive Vice President and Chief Financial Officer
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