Commitments, Contingencies and Concentrations of Risk

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments, Contingencies and Concentrations of Risk

Commitments, Contingencies and Concentrations of Risk

Legal Proceedings. The Company is not involved in any material pending legal proceedings other than legal proceedings occurring in the ordinary course of business. Management believes that none of these legal proceedings, individually or in the aggregate, will have a material adverse impact on the results of operations or financial condition of the Company.

Employment Agreements. The Company has entered into a three-year employment agreement with its Chief Executive Officer (“CEO”). This agreement provides for the payment of a base salary, a bonus based upon the CEO’s individual performance and the Company’s overall performance, provides a vehicle for the CEO’s use, and provides for the payment of severance benefits upon termination under specified circumstances.  

Additionally, the Bank has entered into one-year employment agreements with each of the following executive officers: the Bank’s President and Chief Operating Officer, the Chief Financial Officer, the Chief Risk Officer and Chief Innovation Officer. The agreements provide for the payment of a base salary, a bonus based upon the individual’s performance and the overall performance of the Bank, and the payment of severance benefits upon termination under specified circumstances.

The term of each of their employment agreements automatically extends for an additional one year unless either the relevant executive on the one hand, or the Company on the other hand, gives written notice to the other party or parties hereto of such party’s or parties’ election not to extend the term, with such notice to be given not less than ninety (90) days prior to any such anniversary date, in which case the relevant employment agreement shall terminate at the conclusion of its remaining term.

Availability of Funding Sources. The Company funds substantially all of the loans that it originates or purchases through deposits, internally generated funds and/or borrowings. The Company competes for deposits primarily on the basis of rates, and, as a consequence, the Company could experience difficulties in attracting deposits to fund its operations if the Company does not continue to offer deposit rates at levels that are competitive with other financial institutions. To the extent that the Company is not able to maintain its currently available funding sources or to access new funding sources, it would have to curtail its loan production activities or sell loans and investment securities earlier than is optimal. Any such event could have a material adverse effect on the Company’s results of operations, financial condition and cash flows.