New Jersey
|
22-3282551
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
|
64 Old Highway 22, Clinton, NJ
|
08809
|
(Address of principal executive offices)
|
(Zip Code)
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PART I
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CONSOLIDATED FINANCIAL INFORMATION
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Page #
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ITEM 1
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Consolidated Balance Sheets at March 31, 2019 and December 31, 2018
|
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Consolidated Statements of Income for the three months ended March 31, 2019 and 2018
|
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Consolidated Statements of Comprehensive Income for the three months ended March 31, 2019 and 2018
|
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Consolidated Statements of Changes in Shareholders' Equity for the three months ended March 31, 2019 and 2018
|
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Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018
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ITEM 2
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ITEM 3
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ITEM 4
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PART II
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ITEM 1
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ITEM 1A
|
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ITEM 2
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ITEM 3
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ITEM 4
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ITEM 5
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ITEM 6
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Exhibit 31.1
|
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Exhibit 31.2
|
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Exhibit 32.1
|
|
(In thousands)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
ASSETS
|
|
|
|
|
||||
Cash and due from banks
|
|
$
|
20,737
|
|
|
$
|
20,028
|
|
Federal funds sold and interest-bearing deposits
|
|
128,400
|
|
|
125,487
|
|
||
Cash and cash equivalents
|
|
149,137
|
|
|
145,515
|
|
||
Securities:
|
|
|
|
|
||||
Debt securities available for sale (amortized cost of $46,770 in 2019 and $47,762 in 2018)
|
|
45,934
|
|
|
46,713
|
|
||
Securities held to maturity (fair value of $14,767 in 2019 and $14,802 in 2018)
|
|
14,780
|
|
|
14,875
|
|
||
Equity securities with readily determinable fair values (amortized cost of $2,398 in 2019 and $2,394 in 2018)
|
|
2,248
|
|
|
2,144
|
|
||
Total securities
|
|
62,962
|
|
|
63,732
|
|
||
Loans:
|
|
|
|
|
||||
SBA loans held for sale
|
|
8,010
|
|
|
11,171
|
|
||
SBA loans held for investment
|
|
38,815
|
|
|
39,333
|
|
||
Commercial loans
|
|
702,235
|
|
|
694,102
|
|
||
Residential mortgage loans
|
|
438,431
|
|
|
436,056
|
|
||
Consumer loans
|
|
125,503
|
|
|
123,904
|
|
||
Total loans
|
|
1,312,994
|
|
|
1,304,566
|
|
||
Allowance for loan losses
|
|
(15,684
|
)
|
|
(15,488
|
)
|
||
Net loans
|
|
1,297,310
|
|
|
1,289,078
|
|
||
Premises and equipment, net
|
|
23,059
|
|
|
23,371
|
|
||
Bank owned life insurance ("BOLI")
|
|
24,861
|
|
|
24,710
|
|
||
Deferred tax assets
|
|
5,320
|
|
|
5,350
|
|
||
Federal Home Loan Bank ("FHLB") stock
|
|
10,120
|
|
|
10,795
|
|
||
Accrued interest receivable
|
|
6,926
|
|
|
6,399
|
|
||
Other real estate owned ("OREO")
|
|
273
|
|
|
56
|
|
||
Goodwill
|
|
1,516
|
|
|
1,516
|
|
||
Prepaid expenses and other assets
|
|
8,562
|
|
|
8,635
|
|
||
Total assets
|
|
$
|
1,590,046
|
|
|
$
|
1,579,157
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
||||
Deposits:
|
|
|
|
|
||||
Noninterest-bearing demand
|
|
$
|
259,114
|
|
|
$
|
270,152
|
|
Interest-bearing demand
|
|
166,409
|
|
|
185,792
|
|
||
Savings
|
|
399,006
|
|
|
394,727
|
|
||
Time, under $100,000
|
|
205,491
|
|
|
184,022
|
|
||
Time, $100,000 to $250,000
|
|
117,355
|
|
|
116,147
|
|
||
Time, $250,000 and over
|
|
79,211
|
|
|
56,847
|
|
||
Total deposits
|
|
1,226,586
|
|
|
1,207,687
|
|
||
Borrowed funds
|
|
195,000
|
|
|
210,000
|
|
||
Subordinated debentures
|
|
10,310
|
|
|
10,310
|
|
||
Accrued interest payable
|
|
419
|
|
|
406
|
|
||
Accrued expenses and other liabilities
|
|
14,014
|
|
|
12,266
|
|
||
Total liabilities
|
|
1,446,329
|
|
|
1,440,669
|
|
||
Commitments and contingencies
|
|
|
|
|
|
|
||
Shareholders' equity:
|
|
|
|
|
||||
Common stock
|
|
88,779
|
|
|
88,484
|
|
||
Retained earnings
|
|
55,145
|
|
|
50,161
|
|
||
Accumulated other comprehensive income
|
|
(207
|
)
|
|
(157
|
)
|
||
Total shareholders' equity
|
|
143,717
|
|
|
138,488
|
|
||
Total liabilities and shareholders' equity
|
|
$
|
1,590,046
|
|
|
$
|
1,579,157
|
|
|
|
|
|
|
||||
Issued and outstanding common shares
|
|
10,822
|
|
|
10,780
|
|
|
|
For the three months ended March 31,
|
||||||
(In thousands, except per share amounts)
|
|
2019
|
|
2018
|
||||
INTEREST INCOME
|
|
|
|
|
||||
Federal funds sold, interest-bearing deposits and repos
|
|
$
|
221
|
|
|
$
|
205
|
|
FHLB stock
|
|
116
|
|
|
134
|
|
||
Securities:
|
|
|
|
|
||||
Taxable
|
|
475
|
|
|
492
|
|
||
Tax-exempt
|
|
29
|
|
|
31
|
|
||
Total securities
|
|
504
|
|
|
523
|
|
||
Loans:
|
|
|
|
|
||||
SBA loans
|
|
995
|
|
|
1,183
|
|
||
Commercial loans
|
|
9,069
|
|
|
7,726
|
|
||
Residential mortgage loans
|
|
5,560
|
|
|
4,340
|
|
||
Consumer loans
|
|
2,035
|
|
|
1,529
|
|
||
Total loans
|
|
17,659
|
|
|
14,778
|
|
||
Total interest income
|
|
18,500
|
|
|
15,640
|
|
||
INTEREST EXPENSE
|
|
|
|
|
||||
Interest-bearing demand deposits
|
|
409
|
|
|
224
|
|
||
Savings deposits
|
|
1,119
|
|
|
776
|
|
||
Time deposits
|
|
2,008
|
|
|
1,000
|
|
||
Borrowed funds and subordinated debentures
|
|
749
|
|
|
768
|
|
||
Total interest expense
|
|
4,284
|
|
|
2,768
|
|
||
Net interest income
|
|
14,216
|
|
|
12,872
|
|
||
Provision for loan losses
|
|
500
|
|
|
500
|
|
||
Net interest income after provision for loan losses
|
|
13,716
|
|
|
12,372
|
|
||
NONINTEREST INCOME
|
|
|
|
|
||||
Branch fee income
|
|
368
|
|
|
330
|
|
||
Service and loan fee income
|
|
442
|
|
|
564
|
|
||
Gain on sale of SBA loans held for sale, net
|
|
316
|
|
|
547
|
|
||
Gain on sale of mortgage loans, net
|
|
350
|
|
|
424
|
|
||
BOLI income
|
|
151
|
|
|
171
|
|
||
Net security gains (losses)
|
|
100
|
|
|
(15
|
)
|
||
Other income
|
|
293
|
|
|
265
|
|
||
Total noninterest income
|
|
2,020
|
|
|
2,286
|
|
||
NONINTEREST EXPENSE
|
|
|
|
|
||||
Compensation and benefits
|
|
4,845
|
|
|
4,834
|
|
||
Occupancy
|
|
694
|
|
|
690
|
|
||
Processing and communications
|
|
716
|
|
|
689
|
|
||
Furniture and equipment
|
|
657
|
|
|
536
|
|
||
Professional services
|
|
288
|
|
|
251
|
|
||
Loan collection and OREO expenses
|
|
66
|
|
|
6
|
|
||
Other loan expenses
|
|
46
|
|
|
33
|
|
||
Deposit insurance
|
|
167
|
|
|
186
|
|
||
Advertising
|
|
348
|
|
|
319
|
|
||
Director fees
|
|
163
|
|
|
162
|
|
||
Other expenses
|
|
486
|
|
|
488
|
|
||
Total noninterest expense
|
|
8,476
|
|
|
8,194
|
|
||
Income before provision for income taxes
|
|
7,260
|
|
|
6,464
|
|
||
Provision for income taxes
|
|
1,520
|
|
|
1,235
|
|
||
Net income
|
|
$
|
5,740
|
|
|
$
|
5,229
|
|
|
|
|
|
|
||||
Net income per common share - Basic
|
|
$
|
0.53
|
|
|
$
|
0.49
|
|
Net income per common share - Diluted
|
|
$
|
0.52
|
|
|
$
|
0.48
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding - Basic
|
|
10,801
|
|
|
10,678
|
|
||
Weighted average common shares outstanding - Diluted
|
|
10,955
|
|
|
10,853
|
|
|
|
For the three months ended
|
||||||||||||||||||||||
|
|
March 31, 2019
|
|
March 31, 2018
|
||||||||||||||||||||
(In thousands)
|
|
Before tax amount
|
|
Income tax expense (benefit)
|
|
Net of tax amount
|
|
Before tax amount
|
|
Income tax expense (benefit)
|
|
Net of tax amount
|
||||||||||||
Net income
|
|
$
|
7,260
|
|
|
$
|
1,520
|
|
|
$
|
5,740
|
|
|
$
|
6,464
|
|
|
$
|
1,235
|
|
|
$
|
5,229
|
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Debt securities available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized holding gains (losses) on securities arising during the period
|
|
313
|
|
|
73
|
|
|
240
|
|
|
(807
|
)
|
|
(226
|
)
|
|
(581
|
)
|
||||||
Less: reclassification adjustment for gains on securities included in net income
|
|
100
|
|
|
21
|
|
|
79
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total unrealized gains (losses) on debt securities available for sale
|
|
213
|
|
|
52
|
|
|
161
|
|
|
(807
|
)
|
|
(226
|
)
|
|
(581
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjustments related to defined benefit plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Amortization of prior service cost
|
|
21
|
|
|
(70
|
)
|
|
91
|
|
|
21
|
|
|
155
|
|
|
(134
|
)
|
||||||
Total adjustments related to defined benefit plan
|
|
21
|
|
|
(70
|
)
|
|
91
|
|
|
21
|
|
|
155
|
|
|
(134
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net unrealized (losses) gains from cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized holding (losses) gains on cash flow hedges arising during the period
|
|
(408
|
)
|
|
(106
|
)
|
|
(302
|
)
|
|
583
|
|
|
34
|
|
|
549
|
|
||||||
Total unrealized (losses) gains on cash flow hedges
|
|
(408
|
)
|
|
(106
|
)
|
|
(302
|
)
|
|
583
|
|
|
34
|
|
|
549
|
|
||||||
Total other comprehensive loss
|
|
(174
|
)
|
|
(124
|
)
|
|
(50
|
)
|
|
(203
|
)
|
|
(37
|
)
|
|
(166
|
)
|
||||||
Total comprehensive income
|
|
$
|
7,086
|
|
|
$
|
1,396
|
|
|
$
|
5,690
|
|
|
$
|
6,261
|
|
|
$
|
1,198
|
|
|
$
|
5,063
|
|
|
|
Common stock
|
|
|
|
Accumulated other
|
|
Total
|
|||||||||||
(In thousands)
|
|
Shares
|
|
Amount
|
|
Retained earnings
|
|
comprehensive loss
|
|
shareholders' equity
|
|||||||||
Balance, December 31, 2018
|
|
10,780
|
|
|
$
|
88,484
|
|
|
$
|
50,161
|
|
|
$
|
(157
|
)
|
|
$
|
138,488
|
|
Net income
|
|
—
|
|
|
—
|
|
|
5,740
|
|
|
—
|
|
|
5,740
|
|
||||
Other comprehensive loss, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
(50
|
)
|
||||
Dividends on common stock ($0.07 per share)
|
|
—
|
|
|
26
|
|
|
(756
|
)
|
|
—
|
|
|
(730
|
)
|
||||
Common stock issued and related tax effects (1)
|
|
42
|
|
|
269
|
|
|
—
|
|
|
—
|
|
|
269
|
|
||||
Balance, March 31, 2019
|
|
10,822
|
|
|
$
|
88,779
|
|
|
$
|
55,145
|
|
|
$
|
(207
|
)
|
|
$
|
143,717
|
|
|
|
Common stock
|
|
|
|
Accumulated other
|
|
Total
|
|||||||||||
(In thousands)
|
|
Shares
|
|
Amount
|
|
Retained earnings
|
|
comprehensive income (loss)
|
|
shareholders' equity
|
|||||||||
Balance, December 31, 2017
|
|
10,615
|
|
|
$
|
86,782
|
|
|
$
|
31,117
|
|
|
$
|
206
|
|
|
$
|
118,105
|
|
Net income
|
|
—
|
|
|
—
|
|
|
5,229
|
|
|
—
|
|
|
5,229
|
|
||||
Other comprehensive loss, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(166
|
)
|
|
(166
|
)
|
||||
Dividends on common stock ($0.06 per share)
|
|
—
|
|
|
25
|
|
|
(643
|
)
|
|
—
|
|
|
(618
|
)
|
||||
Common stock issued and related tax effects (1)
|
|
94
|
|
|
554
|
|
|
—
|
|
|
—
|
|
|
554
|
|
||||
Retained earnings impact due to adoption of ASU 2016-01 (2)
|
|
—
|
|
|
—
|
|
|
(56
|
)
|
|
56
|
|
|
—
|
|
||||
Tax rate adjustment to AOCI (3)
|
|
—
|
|
|
—
|
|
|
66
|
|
|
(66
|
)
|
|
—
|
|
||||
Balance, March 31, 2018
|
|
10,709
|
|
|
$
|
87,361
|
|
|
$
|
35,713
|
|
|
$
|
30
|
|
|
$
|
123,104
|
|
|
|
For the three months ended March 31,
|
||||||
(In thousands)
|
|
2019
|
|
2018
|
||||
OPERATING ACTIVITIES:
|
|
|
|
|
||||
Net income
|
|
$
|
5,740
|
|
|
$
|
5,229
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Provision for loan losses
|
|
500
|
|
|
500
|
|
||
Net amortization of purchase premiums and discounts on securities
|
|
37
|
|
|
53
|
|
||
Depreciation and amortization
|
|
121
|
|
|
379
|
|
||
Deferred income tax expense
|
|
82
|
|
|
36
|
|
||
Stock compensation expense
|
|
283
|
|
|
265
|
|
||
Gain on sale of mortgage loans held for sale, net
|
|
(258
|
)
|
|
(356
|
)
|
||
Gain on sale of SBA loans held for sale, net
|
|
(316
|
)
|
|
(547
|
)
|
||
Origination of mortgage loans held for sale
|
|
(19,431
|
)
|
|
(20,132
|
)
|
||
Origination of SBA loans held for sale
|
|
(2,412
|
)
|
|
(3,507
|
)
|
||
Proceeds from sale of mortgage loans held for sale, net
|
|
19,689
|
|
|
20,488
|
|
||
Proceeds from sale of SBA loans held for sale, net
|
|
6,511
|
|
|
6,322
|
|
||
BOLI income
|
|
(151
|
)
|
|
(171
|
)
|
||
Net change in other assets and liabilities
|
|
819
|
|
|
(952
|
)
|
||
Net cash provided by operating activities
|
|
11,214
|
|
|
7,607
|
|
||
INVESTING ACTIVITIES
|
|
|
|
|
||||
Purchases of FHLB stock, at cost
|
|
(20,295
|
)
|
|
(13,838
|
)
|
||
Maturities and principal payments on securities held to maturity
|
|
89
|
|
|
132
|
|
||
Maturities and principal payments on debt securities available for sale
|
|
959
|
|
|
1,272
|
|
||
Proceeds from redemption of FHLB stock
|
|
20,970
|
|
|
17,393
|
|
||
Proceeds from sale of OREO
|
|
—
|
|
|
426
|
|
||
Net increase in loans
|
|
(12,541
|
)
|
|
(26,674
|
)
|
||
Purchases of premises and equipment
|
|
(109
|
)
|
|
(309
|
)
|
||
Net cash used in investing activities
|
|
(10,927
|
)
|
|
(21,598
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
|
||||
Net increase in deposits
|
|
18,899
|
|
|
74,377
|
|
||
Proceeds from new borrowings
|
|
175,000
|
|
|
121,000
|
|
||
Repayments of borrowings
|
|
(190,000
|
)
|
|
(215,000
|
)
|
||
Proceeds from exercise of stock options
|
|
166
|
|
|
290
|
|
||
Dividends on common stock
|
|
(730
|
)
|
|
(643
|
)
|
||
Net cash provided by (used in) financing activities
|
|
3,335
|
|
|
(19,976
|
)
|
||
Increase (Decrease) in cash and cash equivalents
|
|
3,622
|
|
|
(33,967
|
)
|
||
Cash and cash equivalents, beginning of period
|
|
145,515
|
|
|
150,254
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
149,137
|
|
|
$
|
116,287
|
|
|
|
For the three months ended March 31,
|
||||||
(In thousands)
|
|
2019
|
|
2018
|
||||
SUPPLEMENTAL DISCLOSURES
|
|
|
|
|
||||
Cash:
|
|
|
|
|
||||
Interest paid
|
|
$
|
4,271
|
|
|
$
|
2,794
|
|
Income taxes paid
|
|
$
|
52
|
|
|
$
|
1,461
|
|
Noncash investing activities:
|
|
|
|
|
||||
Establishment of lease liability and right-of-use asset
|
|
$
|
2,765
|
|
|
$
|
—
|
|
Capitalization of servicing rights
|
|
$
|
211
|
|
|
$
|
241
|
|
Transfer of loans to OREO
|
|
$
|
328
|
|
|
$
|
106
|
|
|
|
|
|
|
||||
The accompanying notes to the Consolidated Financial Statements are an integral part of these statements.
|
|
|
For the three months ended March 31,
|
||||||
(In thousands, except per share amounts)
|
|
2019
|
|
2018
|
||||
Net income
|
|
$
|
5,740
|
|
|
$
|
5,229
|
|
Weighted average common shares outstanding - Basic
|
|
10,801
|
|
|
10,678
|
|
||
Plus: Potential dilutive common stock equivalents
|
|
154
|
|
|
175
|
|
||
Weighted average common shares outstanding - Diluted
|
|
10,955
|
|
|
10,853
|
|
||
Net income per common share - Basic
|
|
$
|
0.53
|
|
|
$
|
0.49
|
|
Net income per common share - Diluted
|
|
0.52
|
|
|
0.48
|
|
||
Stock options and common stock excluded from the income per share calculation as their effect would have been anti-dilutive
|
|
209
|
|
|
84
|
|
|
|
For the three months ended March 31, 2019
|
||||||||||||||
(In thousands)
|
|
Net unrealized (losses) gains on securities
|
|
Adjustments related to defined benefit plan
|
|
Net unrealized gains (losses) from cash flow hedges
|
|
Accumulated other comprehensive loss
|
||||||||
Balance, beginning of period (1)
|
|
$
|
(721
|
)
|
|
$
|
(431
|
)
|
|
$
|
1,030
|
|
|
$
|
(122
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
240
|
|
|
—
|
|
|
(302
|
)
|
|
(62
|
)
|
||||
Less amounts reclassified from accumulated other comprehensive income (loss)
|
|
79
|
|
|
(91
|
)
|
|
—
|
|
|
(12
|
)
|
||||
Period change
|
|
161
|
|
|
91
|
|
|
(302
|
)
|
|
(50
|
)
|
||||
Balance, end of period (1)
|
|
$
|
(560
|
)
|
|
$
|
(340
|
)
|
|
$
|
728
|
|
|
$
|
(172
|
)
|
|
|
For the three months ended March 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
|
|
(581
|
)
|
|
—
|
|
|
549
|
|
|
(32
|
)
|
||||
Less amounts reclassified from accumulated other comprehensive (loss) income
|
|
—
|
|
|
134
|
|
|
—
|
|
|
134
|
|
||||
Period change
|
|
(581
|
)
|
|
(134
|
)
|
|
549
|
|
|
(166
|
)
|
||||
Balance, end of period (1)
|
|
$
|
(916
|
)
|
|
$
|
(475
|
)
|
|
$
|
1,431
|
|
|
$
|
40
|
|
•
|
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 March 31, 2019 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:
|
|
|
|
|
|
|
|
|
||||||||
Debt securities available for sale:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government sponsored entities
|
|
$
|
5,678
|
|
|
$
|
—
|
|
|
$
|
5,678
|
|
|
$
|
—
|
|
State and political subdivisions
|
|
4,502
|
|
|
—
|
|
|
4,502
|
|
|
—
|
|
||||
Residential mortgage-backed securities
|
|
25,851
|
|
|
—
|
|
|
25,851
|
|
|
—
|
|
||||
Corporate and other securities
|
|
9,903
|
|
|
—
|
|
|
9,903
|
|
|
—
|
|
||||
Total debt securities available for sale
|
|
$
|
45,934
|
|
|
$
|
—
|
|
|
$
|
45,934
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity securities with readily determinable fair values
|
|
2,248
|
|
|
—
|
|
|
2,248
|
|
|
—
|
|
||||
Total equity securities
|
|
$
|
2,248
|
|
|
$
|
—
|
|
|
$
|
2,248
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreements
|
|
1,025
|
|
|
—
|
|
|
1,025
|
|
|
—
|
|
||||
Total swap agreements
|
|
$
|
1,025
|
|
|
$
|
—
|
|
|
$
|
1,025
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
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:
|
|
|
|
|
|
|
|
|
||||||||
Debt 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 debt securities available for sale
|
|
$
|
46,713
|
|
|
$
|
—
|
|
|
$
|
46,713
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity securities with readily determinable fair values
|
|
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 March 31, 2019 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
|
|
$
|
273
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
273
|
|
|
$
|
(110
|
)
|
Impaired collateral-dependent loans
|
|
2,300
|
|
|
—
|
|
|
—
|
|
|
2,300
|
|
|
(437
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
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
|
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
OREO
|
|
$
|
56
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
56
|
|
|
$
|
(196
|
)
|
Impaired collateral-dependent loans
|
|
2,625
|
|
|
—
|
|
|
—
|
|
|
2,625
|
|
|
(335
|
)
|
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
(In thousands)
|
|
Fair value level
|
|
Carrying amount
|
|
Estimated fair value
|
|
Carrying amount
|
|
Estimated fair value
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
Level 1
|
|
$
|
149,137
|
|
|
$
|
149,137
|
|
|
$
|
145,515
|
|
|
$
|
145,515
|
|
Securities (1)
|
|
Level 2
|
|
62,962
|
|
|
62,948
|
|
|
63,732
|
|
|
63,600
|
|
||||
SBA loans held for sale
|
|
Level 2
|
|
8,010
|
|
|
8,870
|
|
|
11,171
|
|
|
12,177
|
|
||||
Loans, net of allowance for loan losses (2)
|
|
Level 2
|
|
1,289,300
|
|
|
1,285,495
|
|
|
1,277,907
|
|
|
1,268,909
|
|
||||
FHLB stock
|
|
Level 2
|
|
10,120
|
|
|
10,120
|
|
|
10,795
|
|
|
10,795
|
|
||||
Servicing assets
|
|
Level 3
|
|
2,135
|
|
|
2,135
|
|
|
2,375
|
|
|
2,375
|
|
||||
Accrued interest receivable
|
|
Level 2
|
|
6,926
|
|
|
6,926
|
|
|
6,399
|
|
|
6,399
|
|
||||
OREO
|
|
Level 3
|
|
273
|
|
|
273
|
|
|
56
|
|
|
56
|
|
||||
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Deposits
|
|
Level 2
|
|
1,226,586
|
|
|
1,225,195
|
|
|
1,207,687
|
|
|
1,204,731
|
|
||||
Borrowed funds and subordinated debentures
|
|
Level 2
|
|
205,310
|
|
|
204,284
|
|
|
220,310
|
|
|
218,879
|
|
||||
Accrued interest payable
|
|
Level 2
|
|
419
|
|
|
419
|
|
|
406
|
|
|
406
|
|
(1)
|
Includes held to maturity (“HTM”) corporate securities that are considered Level 3. These securities had book values of
$3.5 million
and
$3.6 million
at
March 31, 2019
and
December 31, 2018
, respectively, and market values of
$3.4 million
at
March 31, 2019
and
December 31, 2018
. Includes one corporate bond with a book value and market value of
$1.0 million
at March 31, 2019 and December 31, 2018.
|
(2)
|
Includes collateral-dependent 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
$2.3 million
and
$2.6 million
at
March 31, 2019
and
December 31, 2018
, respectively.
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
(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
|
|
$
|
5,756
|
|
|
$
|
—
|
|
|
$
|
(78
|
)
|
|
$
|
5,678
|
|
|
$
|
5,758
|
|
|
$
|
—
|
|
|
$
|
(116
|
)
|
|
$
|
5,642
|
|
State and political subdivisions
|
|
4,547
|
|
|
20
|
|
|
(65
|
)
|
|
4,502
|
|
|
4,614
|
|
|
4
|
|
|
(120
|
)
|
|
4,498
|
|
||||||||
Residential mortgage-backed securities
|
|
26,237
|
|
|
81
|
|
|
(467
|
)
|
|
25,851
|
|
|
27,159
|
|
|
74
|
|
|
(620
|
)
|
|
26,613
|
|
||||||||
Corporate and other securities
|
|
10,230
|
|
|
30
|
|
|
(357
|
)
|
|
9,903
|
|
|
10,231
|
|
|
123
|
|
|
(394
|
)
|
|
9,960
|
|
||||||||
Total debt securities available for sale
|
|
$
|
46,770
|
|
|
$
|
131
|
|
|
$
|
(967
|
)
|
|
$
|
45,934
|
|
|
$
|
47,762
|
|
|
$
|
201
|
|
|
$
|
(1,250
|
)
|
|
$
|
46,713
|
|
Held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Government sponsored entities
|
|
$
|
2,527
|
|
|
$
|
—
|
|
|
$
|
(82
|
)
|
|
$
|
2,445
|
|
|
$
|
2,527
|
|
|
$
|
—
|
|
|
$
|
(94
|
)
|
|
$
|
2,433
|
|
State and political subdivisions
|
|
951
|
|
|
115
|
|
|
—
|
|
|
1,066
|
|
|
951
|
|
|
110
|
|
|
—
|
|
|
1,061
|
|
||||||||
Residential mortgage-backed securities
|
|
3,249
|
|
|
21
|
|
|
(34
|
)
|
|
3,236
|
|
|
3,312
|
|
|
17
|
|
|
(52
|
)
|
|
3,277
|
|
||||||||
Commercial mortgage-backed securities
|
|
3,540
|
|
|
—
|
|
|
(107
|
)
|
|
3,433
|
|
|
3,570
|
|
|
—
|
|
|
(138
|
)
|
|
3,432
|
|
||||||||
Corporate and other securities
|
|
4,513
|
|
|
75
|
|
|
(1
|
)
|
|
4,587
|
|
|
4,515
|
|
|
84
|
|
|
—
|
|
|
4,599
|
|
||||||||
Total securities held to maturity
|
|
$
|
14,780
|
|
|
$
|
211
|
|
|
$
|
(224
|
)
|
|
$
|
14,767
|
|
|
$
|
14,875
|
|
|
$
|
211
|
|
|
$
|
(284
|
)
|
|
$
|
14,802
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total equity securities
|
|
$
|
2,398
|
|
|
$
|
35
|
|
|
$
|
(185
|
)
|
|
$
|
2,248
|
|
|
$
|
2,394
|
|
|
$
|
—
|
|
|
$
|
(250
|
)
|
|
$
|
2,144
|
|
|
|
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
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
3,693
|
|
|
1.61
|
%
|
|
$
|
1,985
|
|
|
2.17
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
5,678
|
|
|
1.81
|
%
|
State and political subdivisions
|
|
2,340
|
|
|
2.91
|
|
—
|
|
|
—
|
|
|
874
|
|
|
2.50
|
|
|
1,288
|
|
|
2.74
|
|
|
4,502
|
|
|
2.78
|
|
||||||
Residential mortgage-backed securities
|
|
68
|
|
|
2.94
|
|
8,750
|
|
|
2.69
|
|
|
14,851
|
|
|
2.95
|
|
|
2,182
|
|
|
2.79
|
|
|
25,851
|
|
|
2.85
|
|
||||||
Corporate and other securities
|
|
—
|
|
|
—
|
|
6,234
|
|
|
4.34
|
|
|
3,669
|
|
|
4.00
|
|
|
—
|
|
|
—
|
|
|
9,903
|
|
|
4.21
|
|
||||||
Total debt securities available for sale
|
|
$
|
2,408
|
|
|
2.91
|
%
|
|
$
|
18,677
|
|
|
3.03
|
%
|
|
$
|
21,379
|
|
|
3.04
|
%
|
|
$
|
3,470
|
|
|
2.77
|
%
|
|
$
|
45,934
|
|
|
3.01
|
%
|
Held to maturity at cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. Government sponsored entities
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
1,002
|
|
|
2.03
|
%
|
|
$
|
1,525
|
|
|
1.94
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
2,527
|
|
|
1.98
|
%
|
State and political subdivisions
|
|
—
|
|
|
—
|
|
|
494
|
|
|
5.06
|
|
|
—
|
|
|
—
|
|
|
457
|
|
|
5.84
|
|
|
951
|
|
|
5.43
|
|
|||||
Residential mortgage-backed securities
|
|
—
|
|
|
—
|
|
|
460
|
|
|
3.32
|
|
|
924
|
|
|
3.15
|
|
|
1,865
|
|
|
3.82
|
|
|
3,249
|
|
|
3.56
|
|
|||||
Commercial mortgage-backed securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,540
|
|
|
2.76
|
|
|
—
|
|
|
—
|
|
|
3,540
|
|
|
2.76
|
|
|||||
Corporate and other securities
|
|
—
|
|
|
—
|
|
|
4,513
|
|
|
5.73
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,513
|
|
|
5.73
|
|
|||||
Total securities held to maturity
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
6,469
|
|
|
4.93
|
%
|
|
$
|
5,989
|
|
|
2.61
|
%
|
|
$
|
2,322
|
|
|
4.22
|
%
|
|
$
|
14,780
|
|
|
3.88
|
%
|
Equity Securities at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total equity securities
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
2,248
|
|
|
2.17
|
%
|
|
$
|
2,248
|
|
|
2.17
|
%
|
|
|
March 31, 2019
|
|||||||||||||||||||||||||
|
|
|
|
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
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,678
|
|
|
$
|
(78
|
)
|
|
$
|
5,678
|
|
|
$
|
(78
|
)
|
State and political subdivisions
|
|
2
|
|
|
—
|
|
|
—
|
|
|
1,765
|
|
|
(65
|
)
|
|
1,765
|
|
|
(65
|
)
|
||||||
Residential mortgage-backed securities
|
|
28
|
|
|
1,691
|
|
|
(2
|
)
|
|
22,241
|
|
|
(465
|
)
|
|
23,932
|
|
|
(467
|
)
|
||||||
Corporate and other securities
|
|
5
|
|
|
—
|
|
|
—
|
|
|
6,792
|
|
|
(357
|
)
|
|
6,792
|
|
|
(357
|
)
|
||||||
Total temporarily impaired securities
|
|
40
|
|
|
$
|
1,691
|
|
|
$
|
(2
|
)
|
|
$
|
36,476
|
|
|
$
|
(965
|
)
|
|
$
|
38,167
|
|
|
$
|
(967
|
)
|
Held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
U.S. Government sponsored entities
|
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,445
|
|
|
$
|
(82
|
)
|
|
$
|
2,445
|
|
|
$
|
(82
|
)
|
Residential mortgage-backed securities
|
|
5
|
|
|
—
|
|
|
—
|
|
|
2,070
|
|
|
(34
|
)
|
|
2,070
|
|
|
(34
|
)
|
||||||
Commercial mortgage-backed securities
|
|
2
|
|
|
—
|
|
|
—
|
|
|
3,433
|
|
|
(107
|
)
|
|
3,433
|
|
|
(107
|
)
|
||||||
Corporate and other securities
|
|
1
|
|
|
1,512
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
1,512
|
|
|
(1
|
)
|
||||||
Total temporarily impaired securities
|
|
10
|
|
|
$
|
1,512
|
|
|
$
|
(1
|
)
|
|
$
|
7,948
|
|
|
$
|
(223
|
)
|
|
$
|
9,460
|
|
|
$
|
(224
|
)
|
|
|
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
|
)
|
|
|
For the three months ended March 31,
|
||||||
(In thousands)
|
|
2019
|
|
2018
|
||||
Net gains (losses) recognized during the period on equity securities
|
|
$
|
100
|
|
|
$
|
(15
|
)
|
Less: Net gains (losses) recognized during the period on equity securities sold during the period
|
|
—
|
|
|
—
|
|
||
Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date
|
|
$
|
100
|
|
|
$
|
(15
|
)
|
(In thousands)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
SBA loans held for investment
|
|
$
|
38,815
|
|
|
$
|
39,333
|
|
Commercial loans
|
|
|
|
|
||||
SBA 504 loans
|
|
27,129
|
|
|
29,155
|
|
||
Commercial other
|
|
98,775
|
|
|
104,587
|
|
||
Commercial real estate
|
|
522,511
|
|
|
510,370
|
|
||
Commercial real estate construction
|
|
53,820
|
|
|
49,990
|
|
||
Residential mortgage loans
|
|
438,431
|
|
|
436,056
|
|
||
Consumer loans
|
|
|
|
|
||||
Home equity
|
|
60,945
|
|
|
59,887
|
|
||
Consumer other
|
|
64,558
|
|
|
64,017
|
|
||
Total loans held for investment
|
|
$
|
1,304,984
|
|
|
$
|
1,293,395
|
|
SBA loans held for sale
|
|
8,010
|
|
|
11,171
|
|
||
Total loans
|
|
$
|
1,312,994
|
|
|
$
|
1,304,566
|
|
|
|
March 31, 2019
|
||||||||||||||
|
|
SBA, SBA 504 & Commercial loans - Internal risk ratings
|
||||||||||||||
(In thousands)
|
|
Pass
|
|
Special mention
|
|
Substandard
|
|
Total
|
||||||||
SBA loans held for investment
|
|
$
|
36,750
|
|
|
$
|
1,315
|
|
|
$
|
750
|
|
|
$
|
38,815
|
|
Commercial loans
|
|
|
|
|
|
|
|
|
||||||||
SBA 504 loans
|
|
26,093
|
|
|
—
|
|
|
1,036
|
|
|
27,129
|
|
||||
Commercial other
|
|
96,261
|
|
|
2,514
|
|
|
—
|
|
|
98,775
|
|
||||
Commercial real estate
|
|
516,220
|
|
|
4,294
|
|
|
1,997
|
|
|
522,511
|
|
||||
Commercial real estate construction
|
|
53,820
|
|
|
—
|
|
|
—
|
|
|
53,820
|
|
||||
Total commercial loans
|
|
692,394
|
|
|
6,808
|
|
|
3,033
|
|
|
702,235
|
|
||||
Total SBA, SBA 504 and commercial loans
|
|
$
|
729,144
|
|
|
$
|
8,123
|
|
|
$
|
3,783
|
|
|
$
|
741,050
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Residential mortgage & Consumer loans - Performing/Nonperforming
|
||||||||||||||
(In thousands)
|
|
|
|
Performing
|
|
Nonperforming
|
|
Total
|
||||||||
Residential mortgage loans
|
|
|
|
$
|
433,188
|
|
|
$
|
5,243
|
|
|
$
|
438,431
|
|
||
Consumer loans
|
|
|
|
|
|
|
|
|
||||||||
Home equity
|
|
|
|
60,774
|
|
|
171
|
|
|
60,945
|
|
|||||
Consumer other
|
|
|
|
64,558
|
|
|
—
|
|
|
64,558
|
|
|||||
Total consumer loans
|
|
|
|
125,332
|
|
|
171
|
|
|
125,503
|
|
|||||
Total residential mortgage and consumer loans
|
|
|
|
$
|
558,520
|
|
|
$
|
5,414
|
|
|
$
|
563,934
|
|
|
|
December 31, 2018
|
||||||||||||||
|
|
SBA, SBA 504 & 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, SBA 504 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
|
|
|
|
March 31, 2019
|
||||||||||||||||||||||||||
(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
|
|
$
|
1,649
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
814
|
|
|
$
|
2,463
|
|
|
$
|
36,352
|
|
|
$
|
38,815
|
|
Commercial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
SBA 504 loans
|
|
219
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
219
|
|
|
26,910
|
|
|
27,129
|
|
|||||||
Commercial other
|
|
222
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
222
|
|
|
98,553
|
|
|
98,775
|
|
|||||||
Commercial real estate
|
|
1,140
|
|
|
1,315
|
|
|
—
|
|
|
1,046
|
|
|
3,501
|
|
|
519,010
|
|
|
522,511
|
|
|||||||
Commercial real estate construction
|
|
—
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|
39
|
|
|
53,781
|
|
|
53,820
|
|
|||||||
Residential mortgage loans
|
|
6,474
|
|
|
1,241
|
|
|
—
|
|
|
5,243
|
|
|
12,958
|
|
|
425,473
|
|
|
438,431
|
|
|||||||
Consumer loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity
|
|
185
|
|
|
48
|
|
|
—
|
|
|
171
|
|
|
404
|
|
|
60,541
|
|
|
60,945
|
|
|||||||
Consumer other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64,558
|
|
|
64,558
|
|
|||||||
Total loans held for investment
|
|
$
|
9,889
|
|
|
$
|
2,604
|
|
|
$
|
39
|
|
|
$
|
7,274
|
|
|
$
|
19,806
|
|
|
$
|
1,285,178
|
|
|
$
|
1,304,984
|
|
SBA loans held for sale
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,010
|
|
|
8,010
|
|
|||||||
Total loans
|
|
$
|
9,889
|
|
|
$
|
2,604
|
|
|
$
|
39
|
|
|
$
|
7,274
|
|
|
$
|
19,806
|
|
|
$
|
1,293,188
|
|
|
$
|
1,312,994
|
|
(1)
|
At
March 31, 2019
, nonaccrual loans included
$68
thousand of loans guaranteed by the SBA.
|
|
|
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.
|
|
|
March 31, 2019
|
||||||||||
(In thousands)
|
|
Unpaid principal balance
|
|
Recorded investment
|
|
Specific reserves
|
||||||
With no related allowance:
|
|
|
|
|
|
|
||||||
SBA loans held for investment (1)
|
|
$
|
774
|
|
|
$
|
606
|
|
|
$
|
—
|
|
Commercial loans
|
|
|
|
|
|
|
||||||
Commercial real estate
|
|
1,046
|
|
|
1,046
|
|
|
—
|
|
|||
Total commercial loans
|
|
1,046
|
|
|
1,046
|
|
|
—
|
|
|||
Total impaired loans with no related allowance
|
|
1,820
|
|
|
1,652
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
With an allowance:
|
|
|
|
|
|
|
||||||
SBA loans held for investment (1)
|
|
204
|
|
|
140
|
|
|
140
|
|
|||
Commercial loans
|
|
|
|
|
|
|
||||||
Commercial real estate
|
|
738
|
|
|
738
|
|
|
90
|
|
|||
Total commercial loans
|
|
738
|
|
|
738
|
|
|
90
|
|
|||
Total impaired loans with a related allowance
|
|
942
|
|
|
878
|
|
|
230
|
|
|||
|
|
|
|
|
|
|
||||||
Total individually evaluated impaired loans:
|
|
|
|
|
|
|
||||||
SBA loans held for investment (1)
|
|
978
|
|
|
746
|
|
|
140
|
|
|||
Commercial loans
|
|
|
|
|
|
|
||||||
Commercial real estate
|
|
1,784
|
|
|
1,784
|
|
|
90
|
|
|||
Total commercial loans
|
|
1,784
|
|
|
1,784
|
|
|
90
|
|
|||
Total individually evaluated impaired loans
|
|
$
|
2,762
|
|
|
$
|
2,530
|
|
|
$
|
230
|
|
(1)
|
Balances are reduced by amount guaranteed by the SBA of
$68
thousand at
March 31, 2019
.
|
|
|
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
.
|
|
|
For the three months ended March 31,
|
||||||||||||||
|
|
2019
|
|
2018
|
||||||||||||
(In thousands)
|
|
Average recorded investment
|
|
Interest income recognized on impaired loans
|
|
Average recorded investment
|
|
Interest income recognized on impaired loans
|
||||||||
SBA loans held for investment (1)
|
|
$
|
1,183
|
|
|
$
|
4
|
|
|
$
|
658
|
|
|
$
|
(2
|
)
|
Commercial loans
|
|
|
|
|
|
|
|
|
||||||||
Commercial other
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commercial real estate
|
|
1,789
|
|
|
9
|
|
|
1,495
|
|
|
15
|
|
||||
Total
|
|
$
|
2,979
|
|
|
$
|
13
|
|
|
$
|
2,153
|
|
|
$
|
13
|
|
(1)
|
Balances are reduced by the average amount guaranteed by the SBA of
$100 thousand
and
$30 thousand
for the three months ended
March 31, 2019
and
2018
, respectively.
|
•
|
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 three months ended March 31, 2019
|
||||||||||||||||||
(In thousands)
|
|
SBA held for investment
|
|
Commercial
|
|
Residential
|
|
Consumer
|
|
Total
|
||||||||||
Balance, beginning of period
|
|
$
|
1,655
|
|
|
$
|
8,705
|
|
|
$
|
3,900
|
|
|
$
|
1,228
|
|
|
$
|
15,488
|
|
Charge-offs
|
|
(308
|
)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(310
|
)
|
|||||
Recoveries
|
|
1
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||
Net (charge-offs) recoveries
|
|
(307
|
)
|
|
4
|
|
|
—
|
|
|
(1
|
)
|
|
(304
|
)
|
|||||
Provision for (credit to) loan losses charged to expense
|
|
330
|
|
|
84
|
|
|
116
|
|
|
(30
|
)
|
|
500
|
|
|||||
Balance, end of period
|
|
$
|
1,678
|
|
|
$
|
8,793
|
|
|
$
|
4,016
|
|
|
$
|
1,197
|
|
|
$
|
15,684
|
|
|
|
For the three months ended March 31, 2018
|
||||||||||||||||||
(In thousands)
|
|
SBA held for investment
|
|
Commercial
|
|
Residential
|
|
Consumer
|
|
Total
|
||||||||||
Balance, beginning of period
|
|
$
|
1,471
|
|
|
$
|
7,825
|
|
|
$
|
3,130
|
|
|
$
|
1,130
|
|
|
$
|
13,556
|
|
Charge-offs
|
|
(81
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(87
|
)
|
|||||
Recoveries
|
|
64
|
|
|
16
|
|
|
13
|
|
|
134
|
|
|
227
|
|
|||||
Net (charge-offs) recoveries
|
|
(17
|
)
|
|
16
|
|
|
13
|
|
|
128
|
|
|
140
|
|
|||||
Provision for (credit to) loan losses charged to expense
|
|
50
|
|
|
298
|
|
|
287
|
|
|
(135
|
)
|
|
500
|
|
|||||
Balance, end of period
|
|
$
|
1,504
|
|
|
$
|
8,139
|
|
|
$
|
3,430
|
|
|
$
|
1,123
|
|
|
$
|
14,196
|
|
|
|
March 31, 2019
|
||||||||||||||||||
(In thousands)
|
|
SBA held for investment
|
|
Commercial
|
|
Residential
|
|
Consumer
|
|
Total
|
||||||||||
Allowance for loan losses ending balance:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Individually evaluated for impairment
|
|
$
|
140
|
|
|
$
|
90
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
230
|
|
Collectively evaluated for impairment
|
|
1,538
|
|
|
8,703
|
|
|
4,016
|
|
|
1,197
|
|
|
15,454
|
|
|||||
Total
|
|
$
|
1,678
|
|
|
$
|
8,793
|
|
|
$
|
4,016
|
|
|
$
|
1,197
|
|
|
$
|
15,684
|
|
Loan ending balances:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Individually evaluated for impairment
|
|
$
|
746
|
|
|
$
|
1,784
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,530
|
|
Collectively evaluated for impairment
|
|
38,069
|
|
|
700,451
|
|
|
438,431
|
|
|
125,503
|
|
|
1,302,454
|
|
|||||
Total
|
|
$
|
38,815
|
|
|
$
|
702,235
|
|
|
$
|
438,431
|
|
|
$
|
125,503
|
|
|
$
|
1,304,984
|
|
|
|
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
|
|
(In thousands, except percentages and years)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Notional amount
|
|
$
|
50,000
|
|
|
$
|
60,000
|
|
Fair value
|
|
$
|
1,025
|
|
|
$
|
1,406
|
|
Weighted average pay rate
|
|
1.33
|
%
|
|
1.26
|
%
|
||
Weighted average receive rate
|
|
2.60
|
%
|
|
1.88
|
%
|
||
Weighted average maturity in years
|
|
1.96
|
|
|
2.36
|
|
||
Number of contracts
|
|
3
|
|
|
4
|
|
|
|
For the three months ended March 31,
|
||||
(In thousands)
|
|
2019
|
|
2018
|
||
Unrealized (losses) gains relating to interest rate swaps
|
|
(381
|
)
|
|
583
|
|
|
|
Shares
|
|
Weighted average exercise price
|
|
Weighted average remaining contractual life in years
|
|
Aggregate intrinsic value
|
|||||
Outstanding at December 31, 2018
|
|
584,178
|
|
|
$
|
13.00
|
|
|
7.1
|
|
$
|
4,574,680
|
|
Options granted
|
|
55,000
|
|
|
20.61
|
|
|
|
|
|
|||
Options exercised
|
|
(20,434
|
)
|
|
8.12
|
|
|
|
|
|
|||
Options forfeited
|
|
(4,333
|
)
|
|
19.30
|
|
|
|
|
|
|||
Options expired
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding at March 31, 2019
|
|
614,411
|
|
|
$
|
13.80
|
|
|
7.2
|
|
$
|
3,474,075
|
|
Exercisable at March 31, 2019
|
|
375,889
|
|
|
$
|
9.99
|
|
|
5.8
|
|
$
|
3,392,883
|
|
|
|
For the three months ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Number of options granted
|
|
55,000
|
|
|
114,500
|
|
||
Weighted average exercise price
|
|
$
|
20.61
|
|
|
$
|
20.24
|
|
Weighted average fair value of options
|
|
$
|
6.21
|
|
|
$
|
5.97
|
|
Expected life in years (1)
|
|
8.23
|
|
|
6.35
|
|
||
Expected volatility (2)
|
|
27.08
|
%
|
|
26.40
|
%
|
||
Risk-free interest rate (3)
|
|
2.55
|
%
|
|
2.48
|
%
|
||
Dividend yield (4)
|
|
1.36
|
%
|
|
1.14
|
%
|
|
|
For the three months ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Number of options exercised
|
|
20,434
|
|
|
55,007
|
|
||
Total intrinsic value of options exercised
|
|
$
|
240,403
|
|
|
$
|
825,653
|
|
Cash received from options exercised
|
|
$
|
165,943
|
|
|
$
|
290,357
|
|
Tax deduction realized from options
|
|
$
|
72,325
|
|
|
$
|
232,091
|
|
|
|
|
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
|
|
74,561
|
|
|
3.3
|
|
$
|
5.59
|
|
|
74,561
|
|
|
$
|
5.59
|
|
|
$6.01 - $12.00
|
|
217,817
|
|
|
5.7
|
|
8.52
|
|
|
217,817
|
|
|
8.52
|
|
||
|
$12.01 - $18.00
|
|
70,533
|
|
|
7.8
|
|
15.73
|
|
|
46,335
|
|
|
15.73
|
|
||
|
$18.01 - $24.00
|
|
251,500
|
|
|
9.4
|
|
20.25
|
|
|
37,176
|
|
|
20.25
|
|
||
|
Total
|
|
614,411
|
|
|
7.2
|
|
$
|
13.80
|
|
|
375,889
|
|
|
$
|
9.99
|
|
|
|
For the three months ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Compensation expense
|
|
$
|
136,356
|
|
|
$
|
123,460
|
|
Income tax benefit
|
|
$
|
39,407
|
|
|
$
|
34,705
|
|
|
|
Shares
|
|
Average grant date fair value
|
|||
Nonvested restricted stock at December 31, 2018
|
|
105,312
|
|
|
$
|
16.55
|
|
Granted
|
|
30,150
|
|
|
20.65
|
|
|
Cancelled
|
|
(1,350
|
)
|
|
17.92
|
|
|
Vested
|
|
(35,438
|
)
|
|
14.11
|
|
|
Nonvested restricted stock at March 31, 2019
|
|
98,674
|
|
|
$
|
18.66
|
|
|
|
For the three months ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Number of shares granted
|
|
30,150
|
|
|
38,300
|
|
||
Average grant date fair value
|
|
$
|
20.65
|
|
|
$
|
20.64
|
|
|
|
For the three months ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Compensation expense
|
|
$
|
146,288
|
|
|
$
|
141,297
|
|
Income tax benefit
|
|
$
|
42,277
|
|
|
$
|
39,719
|
|
|
|
For the three months ended March 31,
|
||||||
(In thousands)
|
|
2019
|
|
2018
|
||||
Service cost
|
|
$
|
47
|
|
|
$
|
112
|
|
Interest cost
|
|
29
|
|
|
13
|
|
||
Amortization of prior service cost
|
|
21
|
|
|
21
|
|
||
Net periodic benefit cost
|
|
$
|
97
|
|
|
$
|
146
|
|
|
|
For the three months ended March 31,
|
||||||
(In thousands)
|
|
2019
|
|
2018
|
||||
Benefit obligation, beginning of year
|
|
$
|
2,747
|
|
|
$
|
1,187
|
|
Service cost
|
|
47
|
|
|
112
|
|
||
Interest cost
|
|
29
|
|
|
13
|
|
||
Benefit obligation, end of period
|
|
$
|
2,823
|
|
|
$
|
1,312
|
|
|
|
At March 31, 2019
|
|
Required for capital adequacy purposes effective
|
|
To be well-capitalized under prompt corrective action regulations
|
|||||||
|
|
Company
|
|
Bank
|
|
January 1, 2019
|
|
Bank
|
|||||
Leverage ratio
|
|
10.09
|
%
|
|
9.71
|
%
|
|
4.00
|
%
|
|
5.00
|
%
|
|
CET1
|
|
11.78
|
%
|
|
12.14
|
%
|
|
7.00
|
%
|
(1
|
)
|
6.50
|
%
|
Tier I risk-based capital ratio
|
|
12.62
|
%
|
|
12.14
|
%
|
|
8.50
|
%
|
(1
|
)
|
8.00
|
%
|
Total risk-based capital ratio
|
|
13.87
|
%
|
|
13.39
|
%
|
|
10.50
|
%
|
(1
|
)
|
10.00
|
%
|
|
|
At December 31, 2018
|
|
Required for capital
adequacy purposes effective |
|
To be well-capitalized under prompt corrective action regulations
|
|||||||||||
|
|
Company
|
|
Bank
|
|
January 1, 2018
|
|
January 1, 2019
|
|
Bank
|
|||||||
Leverage ratio
|
|
9.90
|
%
|
|
9.52
|
%
|
|
4.000
|
%
|
|
4.00
|
%
|
|
5.00
|
%
|
||
CET1
|
|
11.40
|
%
|
|
11.80
|
%
|
|
6.375
|
%
|
(2
|
)
|
7.00
|
%
|
(1
|
)
|
6.50
|
%
|
Tier I risk-based capital ratio
|
|
12.24
|
%
|
|
11.80
|
%
|
|
7.875
|
%
|
(2
|
)
|
8.50
|
%
|
(1
|
)
|
8.00
|
%
|
Total risk-based capital ratio
|
|
13.49
|
%
|
|
13.05
|
%
|
|
9.875
|
%
|
(2
|
)
|
10.50
|
%
|
(1
|
)
|
10.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
(1) Includes 2.5% capital conservation buffer.
|
|
|
|
|
|
|
|||||||||||
(2) Includes 1.875% capital conservation buffer.
|
|
|
|
|
|
|
(In thousands, except percentages and years)
|
|
For the three months ended March 31, 2019
|
||
Right-of-use assets recognized
|
|
$
|
2,765
|
|
Operating cash flows from operating leases
|
|
$
|
138
|
|
Weighted average remaining lease term in years
|
|
7.83
|
||
Weighted average discount rate
|
|
5.62
|
%
|
(In thousands)
|
|
March 31, 2019
|
||
2019 (excluding the three months ended March 31, 2019)
|
|
$
|
365
|
|
2020
|
|
427
|
|
|
2021
|
|
393
|
|
|
2022
|
|
349
|
|
|
2023
|
|
358
|
|
|
2024 and thereafter
|
|
1,412
|
|
|
Total lease payments
|
|
$
|
3,304
|
|
Less: Interest
|
|
(639
|
)
|
|
Present value of lease liabilities
|
|
$
|
2,665
|
|
|
|
|
||
Operating lease right-of-use assets
|
|
$
|
2,656
|
|
•
|
Net interest income increased 10.4% compared to the prior year’s quarter due to loan growth.
|
•
|
Net interest margin equaled 4.06% this quarter compared to 3.99% in the prior years' quarter. The net interest margin is expected to remain stable.
|
•
|
Noninterest income decreased 11.6% compared to the prior year's quarter due to lower loan payoff charges and reduced premiums received on SBA loan sales.
|
•
|
Noninterest expense increased 3.4% compared to the prior year's quarter due to investments in software and equipment to remain efficient, secure and competitive technologically.
|
•
|
The effective tax rate was 20.9% compared to 19.1% in the prior year's quarter.
|
|
|
For the three months ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Net income per common share - Basic (1)
|
|
$
|
0.53
|
|
|
$
|
0.49
|
|
Net income per common share - Diluted (2)
|
|
$
|
0.52
|
|
|
$
|
0.48
|
|
Return on average assets
|
|
1.55
|
%
|
|
1.53
|
%
|
||
Return on average equity (3)
|
|
16.52
|
%
|
|
17.69
|
%
|
||
Efficiency ratio (4)
|
|
52.53
|
%
|
|
54.00
|
%
|
•
|
Of the $2.9 million net increase in interest income on a tax-equivalent basis, $1.5 million of the increase was due to increased average earning assets, and $1.4 million was due to increased yields on the earning assets.
|
•
|
The average volume of interest-earning assets increased $113.8 million to $1.4 billion for the
first
quarter of
2019
compared to $1.3 billion for the same period in
2018
. This was due primarily to a $131.0 million increase in average loans, primarily residential mortgage, commercial and consumer loans, partially offset by a $10.9 million decrease in federal funds sold, interest-bearing deposits and repos and a $5.4 million decrease in investment securities.
|
•
|
The yield on total interest-earning assets increased 43 basis points to 5.28 percent for the three months ended
March 31, 2019
when compared to the same period in
2018
. The yield on the loan portfolio increased 38 basis points to 5.45 percent.
|
•
|
Of the $1.5 million increase in interest expense, $1.1 million was due to increased rates on interest-bearing liabilities and $398 thousand was due to an increase in the volume of average interest-bearing liabilities.
|
•
|
Interest-bearing liabilities averaged $1.1 billion for the
first
quarter of
2019
, an increase of $84.1 million or 8.4 percent compared to the prior year’s quarter. The increase in interest-bearing liabilities was due to an increase in interest-bearing deposits, partially offset by a decrease in borrowed funds and subordinated debentures.
|
•
|
The average cost of total interest-bearing liabilities increased 48 basis points to 1.60 percent. The cost of interest-bearing deposits increased 54 basis points to 1.51 percent for the
first
quarter of
2019
and the cost of borrowed funds and subordinated debentures increased 39 basis points to 2.25 percent.
|
|
|
For the three months ended
|
|
||||||||||||||||||||
|
|
March 31, 2019
|
|
March 31, 2018
|
|
||||||||||||||||||
|
|
Average Balance
|
|
Interest
|
|
Rate/Yield
|
|
Average Balance
|
|
Interest
|
|
Rate/Yield
|
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Federal funds sold, interest-bearing deposits and repos
|
|
$
|
38,066
|
|
|
$
|
221
|
|
|
2.35
|
|
%
|
$
|
48,936
|
|
|
$
|
205
|
|
|
1.70
|
|
%
|
FHLB stock
|
|
6,951
|
|
|
116
|
|
|
6.77
|
|
|
7,799
|
|
|
134
|
|
|
6.97
|
|
|
||||
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable
|
|
58,735
|
|
|
475
|
|
|
3.28
|
|
|
63,393
|
|
|
492
|
|
|
3.15
|
|
|
||||
Tax-exempt
|
|
4,588
|
|
|
36
|
|
|
3.18
|
|
|
5,349
|
|
|
38
|
|
|
2.88
|
|
|
||||
Total securities (A)
|
|
63,323
|
|
|
511
|
|
|
3.27
|
|
|
68,742
|
|
|
530
|
|
|
3.13
|
|
|
||||
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
SBA loans
|
|
50,015
|
|
|
995
|
|
|
8.07
|
|
|
68,376
|
|
|
1,183
|
|
|
7.02
|
|
|
||||
Commercial loans
|
|
697,856
|
|
|
9,069
|
|
|
5.27
|
|
|
632,409
|
|
|
7,726
|
|
|
4.95
|
|
|
||||
Residential mortgage loans
|
|
439,904
|
|
|
5,560
|
|
|
5.13
|
|
|
371,061
|
|
|
4,340
|
|
|
4.74
|
|
|
||||
Consumer loans
|
|
125,987
|
|
|
2,035
|
|
|
6.55
|
|
|
110,947
|
|
|
1,529
|
|
|
5.59
|
|
|
||||
Total loans (B)
|
|
1,313,762
|
|
|
17,659
|
|
|
5.45
|
|
|
1,182,793
|
|
|
14,778
|
|
|
5.07
|
|
|
||||
Total interest-earning assets
|
|
$
|
1,422,102
|
|
|
$
|
18,507
|
|
|
5.28
|
|
%
|
$
|
1,308,270
|
|
|
$
|
15,647
|
|
|
4.85
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Noninterest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and due from banks
|
|
26,105
|
|
|
|
|
|
|
23,244
|
|
|
|
|
|
|
||||||||
Allowance for loan losses
|
|
(15,753
|
)
|
|
|
|
|
|
(13,949
|
)
|
|
|
|
|
|
||||||||
Other assets
|
|
70,586
|
|
|
|
|
|
|
65,686
|
|
|
|
|
|
|
||||||||
Total noninterest-earning assets
|
|
80,938
|
|
|
|
|
|
|
74,981
|
|
|
|
|
|
|
||||||||
Total assets
|
|
$
|
1,503,040
|
|
|
|
|
|
|
$
|
1,383,251
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total interest-bearing demand deposits
|
|
$
|
182,080
|
|
|
$
|
409
|
|
|
0.91
|
|
%
|
$
|
178,385
|
|
|
$
|
224
|
|
|
0.51
|
|
%
|
Total savings deposits
|
|
397,209
|
|
|
1,119
|
|
|
1.14
|
|
|
403,222
|
|
|
776
|
|
|
0.78
|
|
|
||||
Total time deposits
|
|
370,990
|
|
|
2,007
|
|
|
2.19
|
|
|
252,000
|
|
|
1,000
|
|
|
1.61
|
|
|
||||
Total interest-bearing deposits
|
|
950,279
|
|
|
3,535
|
|
|
1.51
|
|
|
833,607
|
|
|
2,000
|
|
|
0.97
|
|
|
||||
Borrowed funds and subordinated debentures
|
|
134,877
|
|
|
749
|
|
|
2.25
|
|
|
167,458
|
|
|
768
|
|
|
1.86
|
|
|
||||
Total interest-bearing liabilities
|
|
$
|
1,085,156
|
|
|
$
|
4,284
|
|
|
1.60
|
|
%
|
$
|
1,001,065
|
|
|
$
|
2,768
|
|
|
1.12
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Noninterest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Noninterest-bearing demand deposits
|
|
262,664
|
|
|
|
|
|
|
252,128
|
|
|
|
|
|
|
||||||||
Other liabilities
|
|
14,327
|
|
|
|
|
|
|
8,910
|
|
|
|
|
|
|
||||||||
Total noninterest-bearing liabilities
|
|
276,991
|
|
|
|
|
|
|
261,038
|
|
|
|
|
|
|
||||||||
Total shareholders' equity
|
|
140,893
|
|
|
|
|
|
|
121,148
|
|
|
|
|
|
|
||||||||
Total liabilities and shareholders' equity
|
|
$
|
1,503,040
|
|
|
|
|
|
|
$
|
1,383,251
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest spread
|
|
|
|
$
|
14,223
|
|
|
3.68
|
|
%
|
|
|
$
|
12,879
|
|
|
3.73
|
|
%
|
||||
Tax-equivalent basis adjustment
|
|
|
|
(7
|
)
|
|
|
|
|
|
(7
|
)
|
|
|
|
||||||||
Net interest income
|
|
|
|
$
|
14,216
|
|
|
|
|
|
|
$
|
12,872
|
|
|
|
|
||||||
Net interest margin
|
|
|
|
|
|
4.06
|
|
%
|
|
|
|
|
3.99
|
|
%
|
(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 2019 and 2018, as well as all 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.
|
|
|
For the three months ended March 31, 2019 versus March 31, 2018
|
||||||||||
|
|
Increase (decrease) due to change in:
|
||||||||||
(In thousands on a tax-equivalent basis)
|
|
Volume
|
|
Rate
|
|
Net
|
||||||
Interest income:
|
|
|
|
|
|
|
||||||
Federal funds sold, interest-bearing deposits and repos
|
|
$
|
(52
|
)
|
|
$
|
68
|
|
|
$
|
16
|
|
FHLB stock
|
|
(14
|
)
|
|
(4
|
)
|
|
(18
|
)
|
|||
Securities
|
|
(44
|
)
|
|
25
|
|
|
(19
|
)
|
|||
Loans
|
|
1,548
|
|
|
1,333
|
|
|
2,881
|
|
|||
Total interest income
|
|
$
|
1,438
|
|
|
$
|
1,422
|
|
|
$
|
2,860
|
|
Interest expense:
|
|
|
|
|
|
|
||||||
Demand deposits
|
|
$
|
5
|
|
|
$
|
180
|
|
|
$
|
185
|
|
Savings deposits
|
|
(12
|
)
|
|
355
|
|
|
343
|
|
|||
Time deposits
|
|
571
|
|
|
436
|
|
|
1,007
|
|
|||
Total interest-bearing deposits
|
|
564
|
|
|
971
|
|
|
1,535
|
|
|||
Borrowed funds and subordinated debentures
|
|
(166
|
)
|
|
147
|
|
|
(19
|
)
|
|||
Total interest expense
|
|
398
|
|
|
1,118
|
|
|
1,516
|
|
|||
Net interest income - fully tax-equivalent
|
|
$
|
1,040
|
|
|
$
|
304
|
|
|
$
|
1,344
|
|
Decrease in tax-equivalent adjustment
|
|
|
|
|
|
—
|
|
|||||
Net interest income
|
|
|
|
|
|
$
|
1,344
|
|
|
|
For the three months ended March 31,
|
||||||
(In thousands)
|
|
2019
|
|
2018
|
||||
Branch fee income
|
|
$
|
368
|
|
|
$
|
330
|
|
Service and loan fee income
|
|
442
|
|
|
564
|
|
||
Gain on sale of SBA loans held for sale, net
|
|
316
|
|
|
547
|
|
||
Gain on sale of mortgage loans, net
|
|
350
|
|
|
424
|
|
||
BOLI income
|
|
151
|
|
|
171
|
|
||
Net security gains (losses)
|
|
100
|
|
|
(15
|
)
|
||
Other income
|
|
293
|
|
|
265
|
|
||
Total noninterest income
|
|
$
|
2,020
|
|
|
$
|
2,286
|
|
•
|
Branch fee income increased $38 thousand for the three months ended March 31, 2019 when compared to the same period in the prior year primarily due to higher service charge fees.
|
•
|
Service and loan fee income decreased $122 thousand primarily due to lower loan payoff charges.
|
•
|
SBA loan sales during the first quarter of 2019 totaled $6.2 million with a net gain of $316 thousand, compared to $5.8 million in sales with a net gain of $547 thousand in the prior year's quarter due to reduced premiums on the sales.
|
•
|
During the quarter, $19.4 million in residential mortgage loans were sold at a gain of $350 thousand, compared to $20.1 million in loans sold at a gain of $424 thousand during the prior year's quarter. Residential mortgage loans are sold as a tool to manage liquidity needs within the Bank.
|
•
|
Bank owned life insurance ("BOLI") income decreased $20 thousand for the three months ended March 31, 2019 when compared to the same period in the prior year.
|
•
|
There were no gains on the sale of securities for the three months ended March 31, 2019 or 2018. Due to the adoption of ASU 2016-01 in January of 2018, there was an unrealized gain of $100 thousand recognized during the first quarter of 2019 compared to an unrealized loss of $15 thousand in the prior year's quarter resulting from market value changes of equity securities.
|
•
|
Other income increased in the quarterly period primarily due to increased Visa check card interchange fees.
|
|
|
For the three months ended March 31,
|
||||||
(In thousands)
|
|
2019
|
|
2018
|
||||
Compensation and benefits
|
|
$
|
4,845
|
|
|
$
|
4,834
|
|
Occupancy
|
|
694
|
|
|
690
|
|
||
Processing and communications
|
|
716
|
|
|
689
|
|
||
Furniture and equipment
|
|
657
|
|
|
536
|
|
||
Professional services
|
|
288
|
|
|
251
|
|
||
Loan collection and OREO expenses
|
|
66
|
|
|
6
|
|
||
Other loan expenses
|
|
46
|
|
|
33
|
|
||
Deposit insurance
|
|
167
|
|
|
186
|
|
||
Advertising
|
|
348
|
|
|
319
|
|
||
Director fees
|
|
163
|
|
|
162
|
|
||
Other expenses
|
|
486
|
|
|
488
|
|
||
Total noninterest expense
|
|
$
|
8,476
|
|
|
$
|
8,194
|
|
•
|
Compensation and benefits expense, the largest component of noninterest expense, remained relatively flat for the three months ended March 31,
2019
, when compared to 2018 as lower benefits costs partially offset increased salary expense.
|
•
|
Occupancy expense remained relatively flat for the three months ended March 31,
2019
, compared to the same period a year ago.
|
•
|
Processing and communications expenses increased $27 thousand for the three months ended March 31,
2019
, primarily due to increased electronic banking expense.
|
•
|
Furniture and equipment expense increased $121 thousand during the first quarter of 2019, primarily due to investment in software and equipment to remain efficient, secure and competitive technologically.
|
•
|
Professional service fees increased $37 thousand for the three months ended March 30,
2019
, primarily due to higher consulting expenses and external audit and tax expenses.
|
•
|
Loan collection and OREO costs increased $60 thousand compared to the prior year's quarter primarily due to increased legal expenses.
|
•
|
Other loan expenses increased $13 thousand for the three months ended
March 31, 2019
, compared to the prior year's quarter.
|
•
|
Deposit insurance expense decreased $19 thousand for the three months ended
March 31, 2019
.
|
•
|
Advertising expense increased $29 thousand compared to the prior year's quarter primarily due to increased community relations expenses.
|
•
|
Director fees remained relatively flat for the three months ended March 31, 2019.
|
•
|
Other expenses remained relatively flat during the first quarter of 2019 when compared to the same period a year ago.
|
•
|
$959 thousand in principal payments and maturities and
|
•
|
$32 thousand in net amortization, partially offset by
|
•
|
$213 thousand of appreciation in the market value of the portfolio. At
March 31, 2019
, the portfolio had a net unrealized loss of $836 thousand compared to a net unrealized loss of $1.0 million at
December 31, 2018
. These net unrealized losses are reflected net of tax in shareholder's equity as accumulated other comprehensive income.
|
•
|
$89 thousand in principal payments and maturities and
|
•
|
$5 thousand in net amortization of premiums.
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||
(In thousands, except percentages)
|
|
Amount
|
|
% of total
|
|
Amount
|
|
% of total
|
||||||
SBA loans held for investment
|
|
$
|
38,815
|
|
|
3.0
|
%
|
|
$
|
39,333
|
|
|
3.0
|
%
|
Commercial loans
|
|
702,235
|
|
|
53.4
|
|
|
694,102
|
|
|
53.2
|
|
||
Residential mortgage loans
|
|
438,431
|
|
|
33.4
|
|
|
436,056
|
|
|
33.4
|
|
||
Consumer loans
|
|
125,503
|
|
|
9.6
|
|
|
123,904
|
|
|
9.5
|
|
||
Total loans held for investment
|
|
1,304,984
|
|
|
99.4
|
|
|
1,293,395
|
|
|
99.1
|
|
||
SBA loans held for sale
|
|
8,010
|
|
|
0.6
|
|
|
11,171
|
|
|
0.9
|
|
||
Total loans
|
|
$
|
1,312,994
|
|
|
100.0
|
%
|
|
$
|
1,304,566
|
|
|
100.0
|
%
|
(In thousands, except percentages)
|
|
March 31, 2019
|
|
December 31, 2018
|
|
March 31, 2018
|
||||||
Nonperforming by category:
|
|
|
|
|
|
|
||||||
SBA loans held for investment (1)
|
|
$
|
814
|
|
|
$
|
1,560
|
|
|
$
|
933
|
|
Commercial loans
|
|
1,046
|
|
|
1,076
|
|
|
1,069
|
|
|||
Residential mortgage loans
|
|
5,243
|
|
|
4,211
|
|
|
1,952
|
|
|||
Consumer loans
|
|
171
|
|
|
26
|
|
|
323
|
|
|||
Total nonperforming loans
|
|
$
|
7,274
|
|
|
$
|
6,873
|
|
|
$
|
4,277
|
|
OREO
|
|
273
|
|
|
56
|
|
|
56
|
|
|||
Total nonperforming assets
|
|
$
|
7,547
|
|
|
$
|
6,929
|
|
|
$
|
4,333
|
|
Past due 90 days or more and still accruing interest:
|
|
|
|
|
|
|
||||||
Commercial loans
|
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Residential mortgage loans
|
|
—
|
|
|
98
|
|
|
—
|
|
|||
Total past due 90 days or more and still accruing interest
|
|
$
|
39
|
|
|
$
|
98
|
|
|
$
|
—
|
|
Nonperforming loans to total loans
|
|
0.55
|
%
|
|
0.53
|
%
|
|
0.36
|
%
|
|||
Nonperforming loans and TDRs to total loans (2)
|
|
0.61
|
|
|
0.58
|
|
|
0.42
|
|
|||
Nonperforming assets to total loans and OREO
|
|
0.57
|
|
|
0.53
|
|
|
0.36
|
|
|||
Nonperforming assets to total assets
|
|
0.47
|
|
|
0.44
|
|
|
0.30
|
|
|||
(1) Guaranteed SBA loans included above
|
|
$
|
68,000
|
|
|
$
|
89,000
|
|
|
$
|
27
|
|
(2) Performing TDRs
|
|
738,000
|
|
|
745
|
|
|
774
|
|
|
|
For the three months ended March 31,
|
||||||
(In thousands, except percentages)
|
|
2019
|
|
2018
|
||||
Balance, beginning of period
|
|
$
|
15,488
|
|
|
$
|
13,556
|
|
Provision for loan losses charged to expense
|
|
500
|
|
|
500
|
|
||
Less: Chargeoffs
|
|
|
|
|
||||
SBA loans held for investment
|
|
308
|
|
|
81
|
|
||
Commercial loans
|
|
1
|
|
|
—
|
|
||
Consumer loans
|
|
1
|
|
|
6
|
|
||
Total chargeoffs
|
|
310
|
|
|
87
|
|
||
Add: Recoveries
|
|
|
|
|
||||
SBA loans held for investment
|
|
1
|
|
|
64
|
|
||
Commercial loans
|
|
5
|
|
|
16
|
|
||
Residential mortgage loans
|
|
—
|
|
|
13
|
|
||
Consumer loans
|
|
—
|
|
|
134
|
|
||
Total recoveries
|
|
6
|
|
|
227
|
|
||
Net charge-offs (recoveries)
|
|
304
|
|
|
(140
|
)
|
||
Balance, end of period
|
|
$
|
15,684
|
|
|
$
|
14,196
|
|
Selected loan quality ratios:
|
|
|
|
|
||||
Net chargeoffs (recoveries) to average loans:
|
|
|
|
|
||||
SBA loans held for investment
|
|
2.49
|
%
|
|
0.10
|
%
|
||
Commercial loans
|
|
—
|
|
|
(0.01
|
)
|
||
Residential mortgage loans
|
|
—
|
|
|
(0.01
|
)
|
||
Consumer loans
|
|
—
|
|
|
(0.47
|
)
|
||
Total loans
|
|
0.09
|
|
|
(0.05
|
)
|
||
Allowance to total loans
|
|
1.19
|
|
|
1.19
|
|
||
Allowance to nonperforming loans
|
|
215.62
|
%
|
|
331.91
|
%
|
(In thousands)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
FHLB borrowings:
|
|
|
|
|
||||
Adjustable rate advances
|
|
$
|
50,000
|
|
|
$
|
50,000
|
|
Overnight advances
|
|
145,000
|
|
|
160,000
|
|
||
Subordinated debentures
|
|
10,310
|
|
|
10,310
|
|
||
Total borrowed funds and subordinated debentures
|
|
$
|
205,310
|
|
|
$
|
220,310
|
|
•
|
A $20.0 million ARC FHLB borrowing with a maturity date of June 7, 2019, at a rate of LIBOR plus 0.050%. The swap instrument modifies the borrowing to a 5 year fixed rate borrowing at 1.780% that matures December 7, 2020.
|
•
|
A $20.0 million ARC FHLB borrowing with a maturity date of July 8, 2019, at a rate of LIBOR less 0.010%. The swap instrument modifies the borrowing to a 5 year fixed rate borrowing at 1.038% and matures on July 5, 2021.
|
•
|
A $10.0 million ARC FHLB borrowing with a maturity date of August 22, 2019, at a rate of LIBOR plus 0.105%. The swap instrument modifies the borrowing to a 5 year fixed rate borrowing at 1.208% that matures on February 16, 2021.
|
•
|
Securities.
The Consolidated Bank’s available for sale investment portfolio amounted to
$45.9 million
and
$46.7 million
at
March 31, 2019
and
December 31, 2018
, 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 $6.7 million.
|
•
|
Loans.
The SBA loans held for sale portfolio amounted to
$8.0 million
and
$11.2 million
at
March 31, 2019
and
December 31, 2018
, respectively. Sales of these loans provide an additional source of liquidity for the Company.
|
•
|
Outstanding Commitments.
The Company was committed to advance approximately $314.3 million to its borrowers as of
March 31, 2019
, compared to $289.9 million at
December 31, 2018
. At
March 31, 2019
, $171.0 million of these commitments expire within one year, compared to $161.1 million at
December 31, 2018
. The Company had $5.0 million and $5.7 million in standby letters of credit at
March 31, 2019
and
December 31, 2018
, 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
March 31, 2019
, deposits included $124.0 million of Government deposits, as compared to $121.9 million at year end
2018
. 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 $118.8 million of deposits from sixteen municipalities with account balances in excess of $1.5 million. 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 $195.0 million and $210.0 million as of
March 31, 2019
and
December 31, 2018
, respectively. 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
March 31, 2019
, pledging provided an additional $259.9 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.
|
|
|
At March 31, 2019
|
|
Required for capital adequacy purposes effective
|
|
To be well-capitalized under prompt corrective action regulations
|
|||||||
|
|
Company
|
|
Bank
|
|
January 1, 2019
|
|
Bank
|
|||||
Leverage ratio
|
|
10.09
|
%
|
|
9.71
|
%
|
|
4.000
|
%
|
|
5.00
|
%
|
|
CET1
|
|
11.78
|
%
|
|
12.14
|
%
|
|
7.000
|
%
|
(1
|
)
|
6.50
|
%
|
Tier I risk-based capital ratio
|
|
12.62
|
%
|
|
12.14
|
%
|
|
8.500
|
%
|
(1
|
)
|
8.00
|
%
|
Total risk-based capital ratio
|
|
13.87
|
%
|
|
13.39
|
%
|
|
10.500
|
%
|
(1
|
)
|
10.00
|
%
|
a)
|
The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures as of
March 31, 2019
. Based on this evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective for recording, processing, summarizing and reporting the information the Company is required to disclose in the reports it files under the Securities Exchange Act of 1934, within the time periods specified in the SEC's rules and forms.
|
b)
|
No significant change in the Company’s internal control over financial reporting has occurred during the quarterly period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s controls over financial reporting.
|
(a) Exhibits |
|
Description
|
|
By-laws of Unity Bancorp as amended. Incorporated by reference from Exhibit 3.1 of current report on Form 8-K filed February 24, 2017
|
|
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
UNITY BANCORP, INC.
|
|
|
|
Dated:
|
May 7, 2019
|
/s/ Alan J. Bedner, Jr.
|
|
|
Alan J. Bedner, Jr.
|
|
|
Executive Vice President and Chief Financial Officer
|
Exhibit No.
|
Description
|
Exhibit 31.1-Certification of James A. Hughes. Required by Rule 13a-14(a) or Rule 15d-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Exhibit 31.2-Certification of Alan J. Bedner, Jr. Required by Rule 13a-14(a) or Rule 15d-14(a) and Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Exhibit 32.1-Certification of James A. Hughes and Alan J. Bedner, Jr. Required by Rule 13a-14(b) or Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
|
|
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.
|
I have reviewed this Quarterly Report on Form 10-Q 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:
|
May 7, 2019
|
/s/ James A. Hughes
|
|
|
James A. Hughes
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q 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:
|
May 7, 2019
|
/s/ Alan J. Bedner
|
|
|
Alan J. Bedner
|
|
|
Executive Vice President and Chief Financial Officer
|
1.
|
The Quarterly Report on Form 10-Q of the Company for the quarterly period ended
March 31, 2019
(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
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated:
|
May 7, 2019
|
/s/ James A. Hughes
|
|
|
James A. Hughes
|
|
|
President and Chief Executive Officer
|
|
|
|
Dated:
|
May 7, 2019
|
/s/ Alan J. Bedner, Jr.
|
|
|
Alan J. Bedner, Jr.
|
|
|
Executive Vice President and Chief Financial Officer
|