California
|
77-0446957
|
|
(State or other jurisdiction of incorporation or organization)
|
(I. R. S. Employer Identification No.)
|
445 Pine Avenue, Goleta, California
|
93117
|
|
(Address of principal executive offices)
|
(Zip code)
|
Title of each class
|
Name of each exchange on which registered
|
|
Common Stock, No Par Value
|
Nasdaq Global Market
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Smaller reporting company ☑
|
Emerging growth company ☐
|
PART I
|
Page
|
||
3 | |||
Item 1.
|
3 | ||
Item 1A.
|
5
|
||
Item 1B.
|
11
|
||
Item 2.
|
11
|
||
Item 3.
|
11 | ||
Item 4.
|
11 | ||
PART II
|
|||
Item 5.
|
11 | ||
Item 6.
|
13 | ||
Item 7.
|
13 | ||
Item 7A.
|
42 | ||
Item 8.
|
44 | ||
Item 9.
|
84 | ||
Item 9A.
|
84
|
||
Item 9B.
|
84 | ||
PART III
|
|||
Item 10.
|
84 | ||
Item 11.
|
85
|
||
Item 12.
|
85 | ||
Item 13.
|
85 | ||
Item 14.
|
85 | ||
PART IV
|
|||
Item 15.
|
85 | ||
87 | |||
CERTIFICATIONS
|
· |
loan delinquencies, problem assets and foreclosures may increase;
|
· |
the sale of foreclosed assets may slow;
|
· |
demand for our products and services may decline possibly resulting in a decrease in our total loans or assets;
|
· |
collateral for loans made may decline further in value, exposing us to increased risk loans, reducing customers' borrowing power, and reducing the value of assets and
collateral associated with existing loans;
|
· |
the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; and
|
· |
the amount of our low-cost or non-interest bearing deposits may decrease and the composition of our deposits may be adversely affected.
|
2018 Quarters
|
2017 Quarters
|
|||||||||||||||||||||||||||||||
Fourth
|
Third
|
Second
|
First
|
Fourth
|
Third
|
Second
|
First
|
|||||||||||||||||||||||||
Range of stock prices:
|
||||||||||||||||||||||||||||||||
High
|
$
|
12.20
|
$
|
12.95
|
$
|
11.95
|
$
|
12.97
|
$
|
11.00
|
$
|
10.45
|
$
|
10.40
|
$
|
10.65
|
||||||||||||||||
Low
|
9.44
|
11.75
|
11.05
|
10.45
|
10.25
|
10.05
|
9.95
|
9.12
|
||||||||||||||||||||||||
Cash Dividends Declared:
|
$
|
0.05
|
$
|
0.05
|
$
|
0.05
|
$
|
0.04
|
$
|
0.04
|
$
|
0.04
|
$
|
0.04
|
$
|
0.04
|
Period
|
Total Number of
Shares Purchased (a)
|
Average Price Paid per
Share
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs (b)
|
Maximum Number (or
Approximate Dollar
Value) of Shares that
May Yet be Purchased
Under the Plans or
Programs (b)
|
|||||||||||||
October 1 – 31
|
-
|
-
|
-
|
-
|
|||||||||||||
November 1 – 30
|
28,733
|
$
|
10.57
|
28,733
|
$
|
1,331,154
|
|||||||||||
December 1 – 31
|
33,904
|
$
|
10.78
|
33,904
|
$
|
965,664
|
|||||||||||
Total
|
62,637
|
$
|
10.68
|
62,637
|
$
|
965,664
|
Plan Category
|
Number of securities to be
issued
upon exercise of outstanding
options, warrants and rights
|
Weighted-average exercise
price
of outstanding options,
warrants and rights
|
Number of securities
remaining available
for future issuance under
equity
compensation plans
(excluding securities
reflected in column (a))
|
|||||||||
(a)
|
(b)
|
(c)
|
||||||||||
Plans approved by shareholders
|
678,600
|
$
|
8.32
|
339,100
|
||||||||
Plans not approved by shareholders
|
—
|
—
|
—
|
|||||||||
Total
|
678,600
|
$
|
8.32
|
339,100
|
Year Ended December 31,
|
||||||||||||||||||||
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||||||||
(in thousands, except per share amounts)
|
||||||||||||||||||||
Results of Operations:
|
||||||||||||||||||||
Interest income
|
$
|
42,631
|
$
|
37,391
|
$
|
32,216
|
$
|
30,222
|
$
|
28,004
|
||||||||||
Interest expense
|
8,988
|
4,729
|
3,127
|
2,516
|
3,275
|
|||||||||||||||
Net interest income
|
33,643
|
32,662
|
29,089
|
27,706
|
24,729
|
|||||||||||||||
Provision (credit) for loan losses
|
14
|
411
|
(48
|
)
|
(2,274
|
)
|
(5,135
|
)
|
||||||||||||
Net interest income after provision for loan losses
|
33,629
|
32,251
|
29,137
|
29,980
|
29,864
|
|||||||||||||||
Non-interest income
|
2,628
|
2,757
|
2,253
|
2,309
|
2,197
|
|||||||||||||||
Non-interest expenses
|
26,039
|
24,545
|
22,548
|
27,281
|
20,081
|
|||||||||||||||
Income before income taxes
|
10,218
|
10,463
|
8,842
|
5,008
|
11,980
|
|||||||||||||||
Provision for income taxes
|
2,809
|
5,548
|
3,613
|
2,138
|
4,934
|
|||||||||||||||
Net income
|
7,409
|
4,915
|
5,229
|
2,870
|
7,046
|
|||||||||||||||
Dividends and accretion on preferred stock
|
—
|
—
|
—
|
445
|
937
|
|||||||||||||||
Discount on partial redemption of preferred stock
|
—
|
—
|
—
|
(129
|
)
|
(159
|
)
|
|||||||||||||
Net income available to common stockholders
|
$
|
7,409
|
$
|
4,915
|
$
|
5,229
|
$
|
2,554
|
$
|
6,268
|
||||||||||
Per Share Data:
|
||||||||||||||||||||
Income per common share - basic
|
$
|
0.89
|
$
|
0.60
|
$
|
0.64
|
$
|
0.31
|
$
|
0.77
|
||||||||||
Income per common share - diluted
|
$
|
0.88
|
$
|
0.57
|
$
|
0.62
|
$
|
0.30
|
$
|
0.75
|
||||||||||
Weighted average shares outstanding - basic
|
8,288
|
8,146
|
8,114
|
8,203
|
8,141
|
|||||||||||||||
Weighted average shares outstanding - diluted
|
8,451
|
8,589
|
8,444
|
8,491
|
8,505
|
|||||||||||||||
Shares outstanding at period end
|
8,533
|
8,193
|
8,096
|
8,206
|
8,203
|
|||||||||||||||
Dividends declared per common share
|
$
|
0.19
|
$
|
0.16
|
$
|
0.14
|
$
|
0.11
|
$
|
0.04
|
||||||||||
Book value per common share
|
$
|
8.92
|
$
|
8.55
|
$
|
8.07
|
$
|
7.55
|
$
|
7.31
|
||||||||||
Selected Balance Sheet Data:
|
||||||||||||||||||||
Net loans
|
759,552
|
726,189
|
623,355
|
536,546
|
487,256
|
|||||||||||||||
Allowance for loan losses
|
8,691
|
8,420
|
7,464
|
6,916
|
7,887
|
|||||||||||||||
Total assets
|
877,291
|
833,315
|
710,572
|
621,213
|
557,318
|
|||||||||||||||
Total deposits
|
716,006
|
699,684
|
612,236
|
544,338
|
477,084
|
|||||||||||||||
Total liabilities
|
801,140
|
763,245
|
645,236
|
559,269
|
490,311
|
|||||||||||||||
Total stockholders' equity
|
76,151
|
70,070
|
65,336
|
61,944
|
67,007
|
|||||||||||||||
Selected Financial and Liquidity Ratios:
|
||||||||||||||||||||
Net interest margin
|
4.07
|
%
|
4.34
|
%
|
4.60
|
%
|
4.80
|
%
|
4.50
|
%
|
||||||||||
Return on average assets
|
0.88
|
%
|
0.64
|
%
|
0.81
|
%
|
0.49
|
%
|
1.25
|
%
|
||||||||||
Return on average stockholders' equity
|
10.02
|
%
|
7.16
|
%
|
8.19
|
%
|
4.34
|
%
|
10.42
|
%
|
||||||||||
Equity to assets ratio
|
8.77
|
%
|
8.96
|
%
|
9.91
|
%
|
11.23
|
%
|
12.02
|
%
|
||||||||||
Loan to deposit ratio
|
106.08
|
%
|
104.99
|
%
|
103.04
|
%
|
99.84
|
%
|
103.79
|
%
|
||||||||||
Capital Ratios:
|
||||||||||||||||||||
Tier 1 leverage ratio (1)
|
8.96
|
%
|
8.72
|
%
|
9.64
|
%
|
10.11
|
%
|
11.86
|
%
|
||||||||||
Common Equity Tier 1 ratio (1)
|
10.10
|
%
|
9.96
|
%
|
10.57
|
%
|
0.00
|
%
|
0.00
|
%
|
||||||||||
Tier 1 risk-based capital ratio (1)
|
10.10
|
%
|
9.96
|
%
|
10.57
|
%
|
12.12
|
%
|
14.94
|
%
|
||||||||||
Total risk-based capital ratio (1)
|
11.26
|
%
|
11.17
|
%
|
11.80
|
%
|
13.37
|
%
|
16.19
|
%
|
||||||||||
Selected Asset Quality Ratios:
|
||||||||||||||||||||
Net charge-offs (recoveries) to average loans
|
(0.03
|
)%
|
(0.08
|
)%
|
(0.10
|
)%
|
(0.26
|
)%
|
(0.16
|
)%
|
||||||||||
Allowance for loan losses to total loans
|
1.13
|
%
|
1.15
|
%
|
1.18
|
%
|
1.27
|
%
|
1.59
|
%
|
||||||||||
Allowance for loan losses to nonaccrual loans
|
139.59
|
%
|
123.03
|
%
|
239.46
|
%
|
99.42
|
%
|
71.52
|
%
|
||||||||||
Nonaccrual loans to gross loans
|
0.81
|
%
|
0.93
|
%
|
0.49
|
%
|
1.28
|
%
|
2.23
|
%
|
||||||||||
Nonaccrual loans and repossessed assets to total loans
|
0.81
|
%
|
0.98
|
%
|
0.52
|
%
|
1.32
|
%
|
2.25
|
%
|
||||||||||
Loans past due 90 days or more and still accruing interest to total loans
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
(1) |
Effective 2015, CWB was subject to Basel III regulatory capital guidelines. CWBC as a small bank holding company is not subject to the Basel III capital reporting
requirements. The 2018, 2017, 2016 and 2015 ratios were the estimated consolidated capital ratios under Basel III.
|
· |
Net income of $7.4 million for 2018 compared to a net income of $4.9 million for 2017.
|
· |
Total loans net of allowance decreased 4.6% to $759.6 million at December 31, 2018 compared to $726.2 million at December 31, 2017.
|
· |
Total deposits increased 2.3% to $716.0 million at December 31, 2018, compared to $699.7 million a year ago.
|
· |
Non-interest-bearing deposits decreased slightly to $108.2 million at December 31, 2018, compared to $108.5 million a year ago.
|
· |
The provision (credit) for loan losses was $14,000 for 2018 compared to $411,000 in 2017. Net loan loss recoveries were ($0.3 million) for 2018 compared to ($0.5 million)
in 2017.
|
· |
Net nonaccrual loans decreased to $3.4 million at December 31, 2018, compared to $4.5 million at December 31, 2017.
|
· |
Allowance for loan losses was $8.7 million at December 31, 2018, or 1.21% of total loans held for investment compared to $8.4 million, or 1.24% at December 31, 2017.
|
· |
Net interest margin for the year ended December 31, 2018 decreased to 4.07% compared to 4.34% for the year ended 2017.
|
· |
Full service branch office location opened in Paso Robles, California.
|
· |
The Company had no foreclosed assets at December 31, 2018 compared to $0.4 million at December 31, 2017.
|
Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
(in thousands, except per share amounts)
|
||||||||||||
Net income available to common stockholders
|
$
|
7,409
|
$
|
4,915
|
$
|
5,229
|
||||||
Basic earnings per share
|
0.89
|
0.60
|
0.64
|
|||||||||
Diluted earnings per share
|
0.88
|
0.57
|
0.62
|
|||||||||
Total assets
|
877,291
|
833,315
|
710,572
|
|||||||||
Gross loans
|
768,243
|
734,609
|
630,819
|
|||||||||
Total deposits
|
716,006
|
699,684
|
612,236
|
|||||||||
Net interest margin
|
4.07
|
%
|
4.34
|
%
|
4.60
|
%
|
||||||
Return on average assets
|
0.88
|
%
|
0.64
|
%
|
0.81
|
%
|
||||||
Return on average stockholders' equity
|
10.02
|
%
|
7.16
|
%
|
8.19
|
%
|
Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
(in thousands)
|
||||||||||||
Non-accrual loans (net of guaranteed portion)
|
$
|
3,378
|
$
|
4,472
|
$
|
2,375
|
||||||
Non-accrual loans to gross loans
|
0.44
|
%
|
0.61
|
%
|
0.38
|
%
|
||||||
Net charge-offs (recoveries) to average loans
|
(0.03
|
)%
|
(0.08
|
)%
|
(0.10
|
)%
|
Year Ended
December 31,
|
Increase
|
Year Ended
December 31,
|
Increase
|
|||||||||||||||||||||
2018
|
2017
|
(Decrease)
|
2017
|
2016
|
(Decrease)
|
|||||||||||||||||||
(in thousands, except per share amounts)
|
||||||||||||||||||||||||
Consolidated Income Statement Data:
|
||||||||||||||||||||||||
Interest income
|
$
|
42,631
|
$
|
37,391
|
$
|
5,240
|
$
|
37,391
|
$
|
32,216
|
$
|
5,175
|
||||||||||||
Interest expense
|
8,988
|
4,729
|
4,259
|
4,729
|
3,127
|
1,602
|
||||||||||||||||||
Net interest income
|
33,643
|
32,662
|
981
|
32,662
|
29,089
|
3,573
|
||||||||||||||||||
Provision (credit) for loan losses
|
14
|
411
|
(397
|
)
|
411
|
(48
|
)
|
459
|
||||||||||||||||
Net interest income after provision for loan losses
|
33,629
|
32,251
|
1,378
|
32,251
|
29,137
|
3,114
|
||||||||||||||||||
Non-interest income
|
2,628
|
2,757
|
(129
|
)
|
2,757
|
2,253
|
504
|
|||||||||||||||||
Non-interest expenses
|
26,039
|
24,545
|
1,494
|
24,545
|
22,548
|
1,997
|
||||||||||||||||||
Income before provision for income taxes
|
10,218
|
10,463
|
(245
|
)
|
10,463
|
8,842
|
1,621
|
|||||||||||||||||
Provision for income taxes
|
2,809
|
5,548
|
(2,739
|
)
|
5,548
|
3,613
|
1,935
|
|||||||||||||||||
Net income
|
$
|
7,409
|
$
|
4,915
|
$
|
2,494
|
$
|
4,915
|
$
|
5,229
|
$
|
(314
|
)
|
|||||||||||
Earnings per share - basic
|
$
|
0.89
|
$
|
0.60
|
$
|
0.29
|
$
|
0.60
|
$
|
0.64
|
$
|
(0.04
|
)
|
|||||||||||
Earnings per share - diluted
|
$
|
0.88
|
$
|
0.57
|
$
|
0.30
|
$
|
0.57
|
$
|
0.62
|
$
|
(0.05
|
)
|
Year Ended December 31,
|
||||||||||||||||||||||||
2018
|
2017
|
|||||||||||||||||||||||
Average
Balance
|
Interest
|
Average
Yield/Cost
|
Average
Balance
|
Interest
|
Average
Yield/Cost
|
|||||||||||||||||||
Interest-Earning Assets
|
(in thousands)
|
|||||||||||||||||||||||
Federal funds sold and interest-earning deposits
|
$
|
36,275
|
$
|
641
|
1.77
|
%
|
$
|
22,378
|
$
|
204
|
0.91
|
%
|
||||||||||||
Investment securities
|
38,242
|
1,125
|
2.94
|
%
|
40,084
|
995
|
2.48
|
%
|
||||||||||||||||
Loans (1)
|
751,775
|
40,865
|
5.44
|
%
|
690,658
|
36,192
|
5.24
|
%
|
||||||||||||||||
Total earnings assets
|
826,292
|
42,631
|
5.16
|
%
|
753,120
|
37,391
|
4.96
|
%
|
||||||||||||||||
Nonearning Assets
|
||||||||||||||||||||||||
Cash and due from banks
|
3,201
|
2,550
|
||||||||||||||||||||||
Allowance for loan losses
|
(8,535
|
)
|
(7,997
|
)
|
||||||||||||||||||||
Other assets
|
21,510
|
19,161
|
||||||||||||||||||||||
Total assets
|
$
|
842,468
|
$
|
766,834
|
||||||||||||||||||||
Interest-Bearing Liabilities
|
||||||||||||||||||||||||
Interest-bearing demand deposits
|
265,974
|
2,100
|
0.79
|
%
|
260,868
|
1,105
|
0.42
|
%
|
||||||||||||||||
Savings deposits
|
14,458
|
124
|
0.86
|
%
|
14,197
|
113
|
0.80
|
%
|
||||||||||||||||
Time deposits
|
322,972
|
5,478
|
1.70
|
%
|
282,224
|
3,065
|
1.09
|
%
|
||||||||||||||||
Total interest-bearing deposits
|
603,404
|
7,702
|
1.28
|
%
|
557,289
|
4,283
|
0.77
|
%
|
||||||||||||||||
Other borrowings
|
46,014
|
1,286
|
2.79
|
%
|
28,114
|
446
|
1.59
|
%
|
||||||||||||||||
Total interest-bearing liabilities
|
649,418
|
8,988
|
1.38
|
%
|
585,403
|
4,729
|
0.81
|
%
|
||||||||||||||||
Noninterest-Bearing Liabilities
|
||||||||||||||||||||||||
Noninterest-bearing demand deposits
|
111,246
|
107,589
|
||||||||||||||||||||||
Other liabilities
|
7,898
|
5,158
|
||||||||||||||||||||||
Stockholders' equity
|
73,906
|
68,684
|
||||||||||||||||||||||
Total Liabilities and Stockholders' Equity
|
$
|
842,468
|
$
|
766,834
|
||||||||||||||||||||
Net interest income and margin (2)
|
$
|
33,643
|
4.07
|
%
|
$
|
32,662
|
4.34
|
%
|
||||||||||||||||
Net interest spread (3)
|
3.78
|
%
|
4.15
|
%
|
(1) |
Includes nonaccrual loans.
|
(2) |
Net interest margin is computed by dividing net interest income by total average earning assets.
|
(3) |
Net interest spread represents average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities.
|
Year Ended December 31,
|
||||||||||||||||||||||||
2017
|
2016
|
|||||||||||||||||||||||
Average
Balance
|
Interest
|
Average
Yield/Cost
|
Average
Balance
|
Interest
|
Average
Yield/Cost
|
|||||||||||||||||||
Interest-Earning Assets
|
(in thousands)
|
|||||||||||||||||||||||
Federal funds sold and interest-earning deposits
|
$
|
22,378
|
$
|
204
|
0.91
|
%
|
$
|
25,103
|
$
|
121
|
0.48
|
%
|
||||||||||||
Investment securities
|
40,084
|
995
|
2.48
|
%
|
34,867
|
998
|
2.86
|
%
|
||||||||||||||||
Loans (1)
|
690,658
|
36,192
|
5.24
|
%
|
573,084
|
31,097
|
5.43
|
%
|
||||||||||||||||
Total earnings assets
|
753,120
|
37,391
|
4.96
|
%
|
633,054
|
32,216
|
5.09
|
%
|
||||||||||||||||
Nonearning Assets
|
||||||||||||||||||||||||
Cash and due from banks
|
2,550
|
2,660
|
||||||||||||||||||||||
Allowance for loan losses
|
(7,997
|
)
|
(7,095
|
)
|
||||||||||||||||||||
Other assets
|
19,161
|
15,930
|
||||||||||||||||||||||
Total assets
|
$
|
766,834
|
$
|
644,549
|
||||||||||||||||||||
Interest-Bearing Liabilities
|
||||||||||||||||||||||||
Interest-bearing demand deposits
|
260,868
|
1,105
|
0.42
|
%
|
251,644
|
934
|
0.37
|
%
|
||||||||||||||||
Savings deposits
|
14,197
|
113
|
0.80
|
%
|
14,138
|
109
|
0.77
|
%
|
||||||||||||||||
Time deposits
|
282,224
|
3,065
|
1.09
|
%
|
219,653
|
1,808
|
0.82
|
%
|
||||||||||||||||
Total interest-bearing deposits
|
557,289
|
4,283
|
0.77
|
%
|
485,435
|
2,851
|
0.59
|
%
|
||||||||||||||||
Other borrowings
|
28,114
|
446
|
1.59
|
%
|
10,699
|
276
|
2.58
|
%
|
||||||||||||||||
Total interest-bearing liabilities
|
585,403
|
4,729
|
0.81
|
%
|
496,134
|
3,127
|
0.63
|
%
|
||||||||||||||||
Noninterest-Bearing Liabilities
|
||||||||||||||||||||||||
Noninterest-bearing demand deposits
|
107,589
|
80,611
|
||||||||||||||||||||||
Other liabilities
|
5,158
|
3,947
|
||||||||||||||||||||||
Stockholders' equity
|
68,684
|
63,857
|
||||||||||||||||||||||
Total Liabilities and Stockholders' Equity
|
$
|
766,834
|
$
|
644,549
|
||||||||||||||||||||
Net interest income and margin (2)
|
$
|
32,662
|
4.34
|
%
|
$
|
29,089
|
4.60
|
%
|
||||||||||||||||
Net interest spread (3)
|
4.15
|
%
|
4.46
|
%
|
(1) |
Includes nonaccrual loans.
|
(2) |
Net interest margin is computed by dividing net interest income by total average earning assets.
|
(3) |
Net interest spread represents average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities.
|
Year Ended December 31, 2018 versus
2017
|
Year Ended December 31, 2017 versus
2016
|
|||||||||||||||||||||||
Increase (Decrease)
Due to Changes in (1)
|
Increase (Decrease)
Due to Changes in (1)
|
|||||||||||||||||||||||
Volume
|
Rate
|
Total
|
Volume
|
Rate
|
Total
|
|||||||||||||||||||
(in thousands)
|
(in thousands)
|
|||||||||||||||||||||||
Interest income:
|
||||||||||||||||||||||||
Investment securities
|
$
|
(54
|
)
|
$
|
184
|
$
|
130
|
$
|
129
|
$
|
(132
|
)
|
$
|
(3
|
)
|
|||||||||
Federal funds sold and other
|
245
|
192
|
437
|
(25
|
)
|
108
|
83
|
|||||||||||||||||
Loans, net
|
3,292
|
1,381
|
4,673
|
6,184
|
(1,089
|
)
|
5,095
|
|||||||||||||||||
Total interest income
|
3,483
|
1,757
|
5,240
|
6,288
|
(1,113
|
)
|
5,175
|
|||||||||||||||||
Interest expense:
|
||||||||||||||||||||||||
Interest checking
|
40
|
955
|
995
|
39
|
132
|
171
|
||||||||||||||||||
Savings
|
2
|
9
|
11
|
-
|
4
|
4
|
||||||||||||||||||
Time deposits
|
693
|
1,720
|
2,413
|
682
|
575
|
1,257
|
||||||||||||||||||
Other borrowings
|
499
|
341
|
840
|
277
|
(107
|
)
|
170
|
|||||||||||||||||
Total interest expense
|
1,234
|
3,025
|
4,259
|
998
|
604
|
1,602
|
||||||||||||||||||
Net increase
|
$
|
2,249
|
$
|
(1,268
|
)
|
$
|
981
|
$
|
5,290
|
$
|
(1,717
|
)
|
$
|
3,573
|
(1) |
Changes due to both volume and rate have been allocated to volume changes.
|
For the Year Ended December 31,
|
||||||||||||||||||||||||||||||||
Manufactured
Housing
|
Commercial
Real Estate
|
Commercial
|
SBA
|
HELOC
|
Single
Family
Real
Estate
|
Consumer
|
Total
|
|||||||||||||||||||||||||
2018
|
(in thousands)
|
|||||||||||||||||||||||||||||||
Beginning balance
|
$
|
2,180
|
$
|
4,844
|
$
|
1,133
|
$
|
73
|
$
|
92
|
$
|
98
|
$
|
—
|
$
|
8,420
|
||||||||||||||||
Charge-offs
|
(6
|
)
|
—
|
(127
|
)
|
—
|
—
|
—
|
—
|
(133
|
)
|
|||||||||||||||||||||
Recoveries
|
120
|
15
|
66
|
133
|
55
|
1
|
—
|
390
|
||||||||||||||||||||||||
Net (charge-offs) recoveries
|
114
|
15
|
(61
|
)
|
133
|
55
|
1
|
—
|
257
|
|||||||||||||||||||||||
Provision (credit)
|
(98
|
)
|
169
|
138
|
(127
|
)
|
(57
|
)
|
(11
|
)
|
—
|
14
|
||||||||||||||||||||
Ending balance
|
$
|
2,196
|
$
|
5,028
|
$
|
1,210
|
$
|
79
|
$
|
90
|
$
|
88
|
$
|
—
|
$
|
8,691
|
||||||||||||||||
2017
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$
|
2,201
|
$
|
3,707
|
$
|
1,241
|
$
|
106
|
$
|
100
|
$
|
109
|
$
|
—
|
$
|
7,464
|
||||||||||||||||
Charge-offs
|
(119
|
)
|
—
|
—
|
(30
|
)
|
—
|
(54
|
)
|
—
|
(203
|
)
|
||||||||||||||||||||
Recoveries
|
142
|
249
|
161
|
177
|
18
|
1
|
—
|
748
|
||||||||||||||||||||||||
Net (charge-offs) recoveries
|
23
|
249
|
161
|
147
|
18
|
(53
|
)
|
—
|
545
|
|||||||||||||||||||||||
Provision (credit)
|
(44
|
)
|
888
|
(269
|
)
|
(180
|
)
|
(26
|
)
|
42
|
—
|
411
|
||||||||||||||||||||
Ending balance
|
$
|
2,180
|
$
|
4,844
|
$
|
1,133
|
$
|
73
|
$
|
92
|
$
|
98
|
$
|
—
|
$
|
8,420
|
||||||||||||||||
2016
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$
|
3,525
|
$
|
1,853
|
$
|
939
|
$
|
451
|
$
|
43
|
$
|
103
|
$
|
2
|
$
|
6,916
|
||||||||||||||||
Charge-offs
|
(123
|
)
|
—
|
—
|
(121
|
)
|
—
|
—
|
(1
|
)
|
(245
|
)
|
||||||||||||||||||||
Recoveries
|
128
|
132
|
136
|
266
|
86
|
93
|
—
|
841
|
||||||||||||||||||||||||
Net (charge-offs) recoveries
|
5
|
132
|
136
|
145
|
86
|
93
|
(1
|
)
|
596
|
|||||||||||||||||||||||
Provision (credit)
|
(1,329
|
)
|
1,722
|
166
|
(490
|
)
|
(29
|
)
|
(87
|
)
|
(1
|
)
|
(48
|
)
|
||||||||||||||||||
Ending balance
|
$
|
2,201
|
$
|
3,707
|
$
|
1,241
|
$
|
106
|
$
|
100
|
$
|
109
|
$
|
—
|
$
|
7,464
|
Year Ended December 31,
|
Increase
|
Year Ended December 31,
|
Increase
|
|||||||||||||||||||||
2018
|
2017
|
(Decrease)
|
2017
|
2016
|
(Decrease)
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Other loan fees
|
$
|
1,348
|
$
|
1,300
|
$
|
48
|
$
|
1,300
|
$
|
1,042
|
$
|
258
|
||||||||||||
Document processing fees
|
489
|
558
|
(69
|
)
|
558
|
496
|
62
|
|||||||||||||||||
Service charges
|
459
|
458
|
1
|
458
|
403
|
55
|
||||||||||||||||||
Gains from loan sales, net
|
—
|
53
|
(53
|
)
|
53
|
—
|
53
|
|||||||||||||||||
Other
|
332
|
388
|
(56
|
)
|
388
|
312
|
76
|
|||||||||||||||||
Total non-interest income
|
$
|
2,628
|
$
|
2,757
|
$
|
(129
|
)
|
$
|
2,757
|
$
|
2,253
|
$
|
504
|
Year Ended December 31,
|
Increase
|
Year Ended December 31,
|
Increase
|
|||||||||||||||||||||
2018
|
2017
|
(Decrease)
|
2017
|
2016
|
(Decrease)
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Salaries and employee benefits
|
$
|
16,329
|
$
|
15,339
|
$
|
990
|
$
|
15,339
|
$
|
14,383
|
$
|
956
|
||||||||||||
Occupancy expense, net
|
3,132
|
2,862
|
270
|
2,862
|
2,264
|
598
|
||||||||||||||||||
Professional services
|
1,356
|
1,069
|
287
|
1,069
|
873
|
196
|
||||||||||||||||||
Data processing
|
685
|
750
|
(65
|
)
|
750
|
616
|
134
|
|||||||||||||||||
Depreciation
|
852
|
725
|
127
|
725
|
793
|
(68
|
)
|
|||||||||||||||||
Advertising and marketing
|
764
|
685
|
79
|
685
|
678
|
7
|
||||||||||||||||||
FDIC assessment
|
770
|
664
|
106
|
664
|
376
|
288
|
||||||||||||||||||
Stock based compensation expense
|
478
|
537
|
(59
|
)
|
537
|
338
|
199
|
|||||||||||||||||
Loan servicing and collection
|
182
|
253
|
(71
|
)
|
253
|
209
|
44
|
|||||||||||||||||
Other
|
1,491
|
1,661
|
(170
|
)
|
1,661
|
2,018
|
(357
|
)
|
||||||||||||||||
Total non-interest expenses
|
$
|
26,039
|
$
|
24,545
|
$
|
1,494
|
$
|
24,545
|
$
|
22,548
|
$
|
1,997
|
December 31,
|
||||||||||||||||||||||||
2018
|
2017
|
2016
|
||||||||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||||||||
ASSETS:
|
(dollars in thousands)
|
|||||||||||||||||||||||
Cash and due from banks
|
$
|
3,201
|
0.4
|
%
|
$
|
2,550
|
0.3
|
%
|
$
|
2,660
|
0.4
|
%
|
||||||||||||
Interest-earning deposits in other institutions
|
36,265
|
4.3
|
%
|
22,364
|
2.9
|
%
|
25,087
|
3.9
|
%
|
|||||||||||||||
Federal funds sold
|
10
|
0.0
|
%
|
14
|
0.0
|
%
|
16
|
0.0
|
%
|
|||||||||||||||
Investment securities available-for-sale
|
26,961
|
3.2
|
%
|
28,082
|
3.7
|
%
|
23,809
|
3.7
|
%
|
|||||||||||||||
Investment securities held-to-maturity
|
7,304
|
0.9
|
%
|
8,365
|
1.1
|
%
|
7,672
|
1.2
|
%
|
|||||||||||||||
FRB and FHLB stock
|
3,637
|
0.4
|
%
|
3,637
|
0.5
|
%
|
3,387
|
0.5
|
%
|
|||||||||||||||
Loans - held for sale, net
|
59,199
|
7.0
|
%
|
59,199
|
7.7
|
%
|
61,792
|
9.6
|
%
|
|||||||||||||||
Loans - held for investment, net
|
692,576
|
82.3
|
%
|
631,459
|
82.4
|
%
|
504,197
|
78.2
|
%
|
|||||||||||||||
Servicing assets
|
136
|
0.0
|
%
|
228
|
0.0
|
%
|
289
|
0.1
|
%
|
|||||||||||||||
Other assets acquired through foreclosure, net
|
170
|
0.0
|
%
|
289
|
0.0
|
%
|
123
|
0.0
|
%
|
|||||||||||||||
Premises and equipment, net
|
6,006
|
0.7
|
%
|
4,889
|
0.6
|
%
|
3,122
|
0.5
|
%
|
|||||||||||||||
Other assets
|
7,003
|
0.8
|
%
|
5,758
|
0.8
|
%
|
12,395
|
1.9
|
%
|
|||||||||||||||
TOTAL ASSETS
|
$
|
842,468
|
100.0
|
%
|
$
|
766,834
|
100.0
|
%
|
$
|
644,549
|
100.0
|
%
|
||||||||||||
LIABILITIES:
|
||||||||||||||||||||||||
Deposits:
|
||||||||||||||||||||||||
Non-interest bearing demand
|
$
|
111,246
|
13.2
|
%
|
$
|
107,589
|
14.0
|
%
|
$
|
80,611
|
12.5
|
%
|
||||||||||||
Interest-bearing demand
|
265,974
|
31.6
|
%
|
260,868
|
34.0
|
%
|
251,644
|
39.0
|
%
|
|||||||||||||||
Savings
|
14,458
|
1.7
|
%
|
14,197
|
1.9
|
%
|
14,138
|
2.2
|
%
|
|||||||||||||||
Time certificates of $100,000 or more
|
181,472
|
21.5
|
%
|
200,729
|
26.2
|
%
|
177,122
|
27.5
|
%
|
|||||||||||||||
Other time certificates
|
141,501
|
16.8
|
%
|
81,495
|
10.6
|
%
|
42,531
|
6.6
|
%
|
|||||||||||||||
Total deposits
|
714,651
|
84.8
|
%
|
664,878
|
86.7
|
%
|
566,046
|
87.8
|
%
|
|||||||||||||||
Other borrowings
|
46,014
|
5.5
|
%
|
28,114
|
3.7
|
%
|
10,699
|
1.7
|
%
|
|||||||||||||||
Other liabilities
|
7,898
|
0.9
|
%
|
5,158
|
0.7
|
%
|
3,947
|
0.6
|
%
|
|||||||||||||||
Total liabilities
|
768,563
|
91.2
|
%
|
698,150
|
91.1
|
%
|
580,692
|
90.1
|
%
|
|||||||||||||||
STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||||
Preferred stock
|
—
|
0.0
|
%
|
—
|
0.0
|
%
|
-
|
0.0
|
%
|
|||||||||||||||
Common stock
|
42,996
|
5.1
|
%
|
42,023
|
5.5
|
%
|
41,716
|
6.5
|
%
|
|||||||||||||||
Retained earnings
|
31,013
|
3.7
|
%
|
26,637
|
3.4
|
%
|
22,131
|
3.4
|
%
|
|||||||||||||||
Accumulated other comprehensive income (loss)
|
(104
|
)
|
0.0
|
%
|
24
|
0.0
|
%
|
10
|
0.0
|
%
|
||||||||||||||
Total stockholders' equity
|
73,905
|
8.8
|
%
|
68,684
|
8.9
|
%
|
63,857
|
9.9
|
%
|
|||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
842,468
|
100.0
|
%
|
$
|
766,834
|
100.0
|
%
|
$
|
644,549
|
100.0
|
%
|
December 31,
|
||||||||||||||||||||
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Manufactured housing
|
$
|
247,114
|
$
|
223,115
|
$
|
194,222
|
$
|
177,891
|
$
|
169,662
|
||||||||||
Commercial real estate
|
365,809
|
354,617
|
272,142
|
179,491
|
159,432
|
|||||||||||||||
Commercial
|
118,517
|
111,458
|
105,290
|
107,510
|
74,792
|
|||||||||||||||
SBA
|
19,148
|
26,341
|
36,659
|
48,071
|
62,201
|
|||||||||||||||
HELOC
|
6,756
|
9,422
|
10,292
|
10,934
|
13,481
|
|||||||||||||||
Single family real estate
|
11,261
|
10,346
|
12,750
|
19,073
|
14,957
|
|||||||||||||||
Consumer
|
46
|
83
|
87
|
123
|
178
|
|||||||||||||||
Mortgage loans held for sale
|
—
|
—
|
—
|
—
|
785
|
|||||||||||||||
Total loans
|
768,651
|
735,383
|
631,442
|
543,093
|
495,488
|
|||||||||||||||
Less:
|
||||||||||||||||||||
Allowance for loan losses
|
8,691
|
8,420
|
7,464
|
6,916
|
7,877
|
|||||||||||||||
Deferred fees (costs), net
|
337
|
652
|
453
|
(560
|
)
|
118
|
||||||||||||||
Discount on SBA loans
|
71
|
122
|
170
|
191
|
237
|
|||||||||||||||
Total loans, net
|
$
|
759,552
|
$
|
726,189
|
$
|
623,355
|
$
|
536,546
|
$
|
487,256
|
||||||||||
Percentage to Total Loans:
|
||||||||||||||||||||
Manufactured housing
|
32.1
|
%
|
30.3
|
%
|
30.8
|
%
|
32.8
|
%
|
34.2
|
%
|
||||||||||
Commercial real estate
|
47.6
|
%
|
48.2
|
%
|
43.1
|
%
|
33.0
|
%
|
32.2
|
%
|
||||||||||
Commercial
|
15.4
|
%
|
15.2
|
%
|
16.7
|
%
|
19.8
|
%
|
15.1
|
%
|
||||||||||
SBA
|
2.5
|
%
|
3.6
|
%
|
5.8
|
%
|
8.9
|
%
|
12.6
|
%
|
||||||||||
HELOC
|
0.9
|
%
|
1.3
|
%
|
1.6
|
%
|
2.0
|
%
|
2.7
|
%
|
||||||||||
Single family real estate
|
1.5
|
%
|
1.4
|
%
|
2.0
|
%
|
3.5
|
%
|
3.0
|
%
|
||||||||||
Consumer
|
0.0
|
%
|
0.0
|
%
|
0.0
|
%
|
0.0
|
%
|
0.0
|
%
|
||||||||||
Mortgage loans held for sale
|
0.0
|
%
|
0.0
|
%
|
0.0
|
%
|
0.0
|
%
|
0.2
|
%
|
||||||||||
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
Due in One
Year or Less
|
Due After One
Year to Five Years
|
Due After
Five Years
|
Total
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Manufactured housing
|
||||||||||||||||
Floating rate
|
$
|
5,456
|
$
|
25,897
|
$
|
153,347
|
$
|
184,700
|
||||||||
Fixed rate
|
4,788
|
19,810
|
37,816
|
62,414
|
||||||||||||
Commercial real estate
|
||||||||||||||||
Floating rate
|
57,465
|
48,818
|
175,796
|
282,079
|
||||||||||||
Fixed rate
|
36,883
|
32,796
|
14,050
|
83,729
|
||||||||||||
Commercial
|
||||||||||||||||
Floating rate
|
17,234
|
25,677
|
55,802
|
98,713
|
||||||||||||
Fixed rate
|
6,841
|
9,551
|
3,412
|
19,804
|
||||||||||||
SBA
|
||||||||||||||||
Floating rate
|
1,447
|
6,079
|
11,622
|
19,148
|
||||||||||||
Fixed rate
|
—
|
—
|
—
|
—
|
||||||||||||
HELOC
|
||||||||||||||||
Floating rate
|
1,516
|
1,445
|
3,796
|
6,757
|
||||||||||||
Fixed rate
|
—
|
—
|
—
|
—
|
||||||||||||
Single family real estate
|
||||||||||||||||
Floating rate
|
320
|
1,604
|
7,454
|
9,378
|
||||||||||||
Fixed rate
|
112
|
463
|
1,308
|
1,883
|
||||||||||||
Consumer
|
||||||||||||||||
Floating rate
|
—
|
—
|
—
|
—
|
||||||||||||
Fixed rate
|
26
|
8
|
12
|
46
|
||||||||||||
Total
|
$
|
132,088
|
$
|
172,148
|
$
|
464,415
|
$
|
768,651
|
December 31,
|
||||||||||||||||||||||||||||||||||||||||
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||||||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Fixed
Rate
|
Variable
Rate
|
Fixed
Rate
|
Variable
Rate
|
Fixed
Rate
|
Variable
Rate
|
Fixed
Rate
|
Variable
Rate
|
Fixed
Rate
|
Variable
Rate
|
|||||||||||||||||||||||||||||||
Less than one year
|
$
|
48,650
|
$
|
83,438
|
$
|
33,708
|
$
|
72,764
|
$
|
15,861
|
$
|
58,441
|
$
|
15,564
|
$
|
42,274
|
$
|
14,791
|
$
|
36,900
|
||||||||||||||||||||
One to five years
|
62,628
|
109,520
|
81,758
|
102,945
|
48,029
|
95,187
|
36,106
|
95,485
|
46,432
|
92,232
|
||||||||||||||||||||||||||||||
Over five years
|
56,598
|
407,817
|
54,233
|
389,975
|
44,041
|
369,883
|
28,047
|
325,617
|
33,525
|
271,608
|
||||||||||||||||||||||||||||||
Total
|
$
|
167,876
|
$
|
600,775
|
$
|
169,699
|
$
|
565,684
|
$
|
107,931
|
$
|
523,511
|
$
|
79,717
|
$
|
463,376
|
$
|
94,748
|
$
|
400,740
|
||||||||||||||||||||
Percentage of total
|
21.8
|
%
|
78.2
|
%
|
23.1
|
%
|
76.9
|
%
|
17.1
|
%
|
82.9
|
%
|
14.7
|
%
|
85.3
|
%
|
19.1
|
%
|
80.9
|
%
|
Year Ended December 31,
|
||||||||||||||||||||
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Impaired loans without specific valuation allowances
|
$
|
9,744
|
$
|
12,352
|
$
|
4,463
|
$
|
7,591
|
$
|
3,821
|
||||||||||
Impaired loans with specific valuation allowances
|
14,159
|
8,275
|
13,080
|
11,940
|
20,108
|
|||||||||||||||
Specific valuation allowance related to impaired loans
|
(465
|
)
|
(524
|
)
|
(759
|
)
|
(573
|
)
|
(854
|
)
|
||||||||||
Impaired loans, net
|
$
|
23,438
|
$
|
20,103
|
$
|
16,784
|
$
|
18,958
|
$
|
23,075
|
||||||||||
Average investment in impaired loans
|
$
|
20,731
|
$
|
16,484
|
$
|
17,285
|
$
|
16,302
|
$
|
17,741
|
Manufactured
Housing
|
Commercial
Real Estate
|
Commercial
|
SBA
|
HELOC
|
Single
Family
Real
Estate
|
Consumer
|
Total
Loans
|
|||||||||||||||||||||||||
Impaired Loans as of December 31, 2018:
|
(in thousands)
|
|||||||||||||||||||||||||||||||
Recorded Investment:
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
$
|
8,726
|
$
|
243
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
775
|
$
|
—
|
$
|
9,744
|
||||||||||||||||
Impaired loans with no allowance recorded
|
3,269
|
102
|
7,811
|
815
|
198
|
1,964
|
—
|
14,159
|
||||||||||||||||||||||||
Total loans individually evaluated for impairment
|
11,995
|
345
|
7,811
|
815
|
198
|
2,739
|
—
|
23,903
|
||||||||||||||||||||||||
Related Allowance for Credit Losses
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
432
|
9
|
—
|
—
|
—
|
24
|
—
|
465
|
||||||||||||||||||||||||
Impaired loans with no allowance recorded
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Total loans individually evaluated for impairment
|
432
|
9
|
—
|
—
|
—
|
24
|
—
|
465
|
||||||||||||||||||||||||
Total impaired loans, net
|
$
|
11,563
|
$
|
336
|
$
|
7,811
|
$
|
815
|
$
|
198
|
$
|
2,715
|
$
|
—
|
$
|
23,438
|
Manufactured
Housing
|
Commercial
Real Estate
|
Commercial
|
SBA
|
HELOC
|
Single
Family
Real
Estate
|
Consumer
|
Total
Loans
|
|||||||||||||||||||||||||
Impaired Loans as of December 31, 2017:
|
(in thousands)
|
|||||||||||||||||||||||||||||||
Recorded Investment:
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
$
|
5,830
|
$
|
557
|
$
|
3,551
|
$
|
281
|
$
|
—
|
$
|
2,133
|
$
|
—
|
$
|
12,352
|
||||||||||||||||
Impaired loans with no allowance recorded
|
2,163
|
—
|
5,023
|
699
|
214
|
176
|
—
|
8,275
|
||||||||||||||||||||||||
Total loans individually evaluated for impairment
|
7,993
|
557
|
8,574
|
980
|
214
|
2,309
|
—
|
20,627
|
||||||||||||||||||||||||
Related Allowance for Credit Losses
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
427
|
11
|
50
|
1
|
—
|
35
|
—
|
524
|
||||||||||||||||||||||||
Impaired loans with no allowance recorded
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Total loans individually evaluated for impairment
|
427
|
11
|
50
|
1
|
—
|
35
|
—
|
524
|
||||||||||||||||||||||||
Total impaired loans, net
|
$
|
7,566
|
$
|
546
|
$
|
8,524
|
$
|
979
|
$
|
214
|
$
|
2,274
|
$
|
—
|
$
|
20,103
|
Year Ended December 31,
|
||||||||||||||||||||
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Total nonaccrual loans
|
$
|
6,226
|
$
|
6,844
|
$
|
3,117
|
$
|
6,956
|
$
|
17,883
|
||||||||||
Government guaranteed portion of loans included above
|
(2,848
|
)
|
(2,372
|
)
|
(742
|
)
|
(1,943
|
)
|
(6,856
|
)
|
||||||||||
Total nonaccrual loans without government guarantees
|
$
|
3,378
|
$
|
4,472
|
$
|
2,375
|
$
|
5,013
|
$
|
11,027
|
||||||||||
TDR loans, gross
|
$
|
16,749
|
$
|
16,603
|
$
|
14,437
|
$
|
13,741
|
$
|
9,685
|
||||||||||
Loans 30 through 89 days past due with interest accruing
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||
Allowance for loan losses to gross loans held for investment
|
1.21
|
%
|
1.24
|
%
|
1.31
|
%
|
1.44
|
%
|
1.84
|
%
|
||||||||||
Interest income recognized on impaired loans
|
$
|
1,324
|
$
|
1,142
|
$
|
1,148
|
$
|
933
|
$
|
825
|
||||||||||
Interest income that would have been recorded under the original terms of nonaccrual loans
|
$
|
454
|
$
|
379
|
$
|
412
|
$
|
761
|
$
|
1,276
|
At December 31, 2018
|
At December 31, 2017
|
|||||||||||||||||||||||
Nonaccrual
Balance
|
%
|
Percent of
Total Loans
|
Nonaccrual
Balance
|
%
|
Percent of
Total Loans
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
Manufactured housing
|
$
|
229
|
3.68
|
%
|
0.03
|
%
|
$
|
418
|
6.11
|
%
|
0.06
|
%
|
||||||||||||
Commercial real estate
|
102
|
1.64
|
%
|
0.01
|
%
|
306
|
4.47
|
%
|
0.04
|
%
|
||||||||||||||
Commercial
|
4,881
|
78.40
|
%
|
0.64
|
%
|
4,786
|
69.93
|
%
|
0.65
|
%
|
||||||||||||||
SBA
|
816
|
13.11
|
%
|
0.11
|
%
|
944
|
13.79
|
%
|
0.13
|
%
|
||||||||||||||
HELOC
|
198
|
3.18
|
%
|
0.03
|
%
|
214
|
3.13
|
%
|
0.03
|
%
|
||||||||||||||
Single family real estate
|
—
|
0.00
|
%
|
0.00
|
%
|
176
|
2.57
|
%
|
0.02
|
%
|
||||||||||||||
Consumer
|
—
|
0.00
|
%
|
0.00
|
%
|
—
|
0.00
|
%
|
0.00
|
%
|
||||||||||||||
Total nonaccrual loans
|
$
|
6,226
|
100.01
|
%
|
0.81
|
%
|
$
|
6,844
|
100.00
|
%
|
0.93
|
%
|
Year Ended December 31,
|
||||||||||||||||||||
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||||||||
Allowance for loan losses:
|
(dollars in thousands)
|
|||||||||||||||||||
Balance at beginning of period
|
$
|
8,420
|
$
|
7,464
|
$
|
6,916
|
$
|
7,877
|
$
|
12,208
|
||||||||||
Provision (credit) charged to operating expenses:
|
||||||||||||||||||||
Manufactured housing
|
(98
|
)
|
(44
|
)
|
(1,329
|
)
|
(415
|
)
|
(682
|
)
|
||||||||||
Commercial real estate
|
169
|
888
|
1,722
|
(151
|
)
|
(1,934
|
)
|
|||||||||||||
Commercial
|
138
|
(269
|
)
|
166
|
(469
|
)
|
(1,227
|
)
|
||||||||||||
SBA
|
(127
|
)
|
(180
|
)
|
(490
|
)
|
(1,069
|
)
|
(1,107
|
)
|
||||||||||
HELOC
|
(57
|
)
|
(26
|
)
|
(29
|
)
|
(107
|
)
|
(164
|
)
|
||||||||||
Single family real estate
|
(11
|
)
|
42
|
(87
|
)
|
(63
|
)
|
(21
|
)
|
|||||||||||
Consumer
|
—
|
—
|
(1
|
)
|
—
|
—
|
||||||||||||||
Total provision (credit)
|
14
|
411
|
(48
|
)
|
(2,274
|
)
|
(5,135
|
)
|
||||||||||||
Recoveries of loans previously charged-off:
|
||||||||||||||||||||
Manufactured housing
|
120
|
142
|
128
|
205
|
143
|
|||||||||||||||
Commercial real estate
|
15
|
249
|
132
|
545
|
857
|
|||||||||||||||
Commercial
|
66
|
161
|
136
|
422
|
149
|
|||||||||||||||
SBA
|
133
|
177
|
266
|
454
|
393
|
|||||||||||||||
HELOC
|
55
|
18
|
86
|
10
|
24
|
|||||||||||||||
Single family real estate
|
1
|
1
|
93
|
3
|
4
|
|||||||||||||||
Consumer
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Total recoveries
|
390
|
748
|
841
|
1,639
|
1,570
|
|||||||||||||||
Loans charged-off:
|
||||||||||||||||||||
Manufactured housing
|
6
|
119
|
123
|
297
|
543
|
|||||||||||||||
Commercial real estate
|
—
|
—
|
—
|
—
|
16
|
|||||||||||||||
Commercial
|
127
|
—
|
—
|
—
|
—
|
|||||||||||||||
SBA
|
—
|
30
|
121
|
—
|
171
|
|||||||||||||||
HELOC
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Single family real estate
|
—
|
54
|
—
|
29
|
36
|
|||||||||||||||
Consumer
|
—
|
—
|
1
|
—
|
—
|
|||||||||||||||
Total charged-off
|
133
|
203
|
245
|
326
|
766
|
|||||||||||||||
Net charge-offs (recoveries)
|
(257
|
)
|
(545
|
)
|
(596
|
)
|
(1,313
|
)
|
(804
|
)
|
||||||||||
Balance at end of period
|
$
|
8,691
|
$
|
8,420
|
$
|
7,464
|
$
|
6,916
|
$
|
7,877
|
||||||||||
Net charge-offs (recoveries) to average loans outstanding
|
(0.03
|
)%
|
(0.08
|
)%
|
(0.10
|
)%
|
(0.26
|
)%
|
(0.16
|
)%
|
||||||||||
Allowance for loan losses to gross loans including held for sale loans
|
1.13
|
%
|
1.15
|
%
|
1.18
|
%
|
1.18
|
%
|
1.27
|
%
|
December 31,
|
||||||||||||||||||||||||||||||||||||||||
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||||||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Amount
|
% of
Loans in
Each
Category
to Gross
Loans
|
Amount
|
% of
Loans in
Each
Category
to Gross
Loans
|
Amount
|
% of
Loans in
Each
Category
to Gross
Loans
|
Amount
|
% of
Loans in
Each
Category
to Gross
Loans
|
Amount
|
% of
Loans in
Each
Category
to Gross
Loans
|
|||||||||||||||||||||||||||||||
Manufactured housing
|
$
|
2,196
|
25.3
|
%
|
$
|
2,180
|
25.8
|
%
|
$
|
2,201
|
29.5
|
%
|
$
|
3,525
|
51.0
|
%
|
$
|
4,032
|
51.2
|
%
|
||||||||||||||||||||
Commercial real estate
|
5,028
|
57.9
|
%
|
4,844
|
57.5
|
%
|
3,707
|
49.7
|
%
|
1,853
|
26.8
|
%
|
1,459
|
18.5
|
%
|
|||||||||||||||||||||||||
Commercial
|
1,210
|
13.9
|
%
|
1,133
|
13.5
|
%
|
1,241
|
16.6
|
%
|
939
|
13.6
|
%
|
986
|
12.5
|
%
|
|||||||||||||||||||||||||
SBA
|
79
|
0.9
|
%
|
73
|
0.9
|
%
|
106
|
1.4
|
%
|
451
|
6.5
|
%
|
1,066
|
13.6
|
%
|
|||||||||||||||||||||||||
HELOC
|
90
|
1.0
|
%
|
92
|
1.1
|
%
|
100
|
1.3
|
%
|
43
|
0.6
|
%
|
140
|
1.8
|
%
|
|||||||||||||||||||||||||
Single family real estate
|
88
|
1.0
|
%
|
98
|
1.2
|
%
|
109
|
1.5
|
%
|
103
|
1.5
|
%
|
192
|
2.4
|
%
|
|||||||||||||||||||||||||
Consumer
|
-
|
0.0
|
%
|
-
|
0.0
|
%
|
-
|
0.0
|
%
|
2
|
0.0
|
%
|
2
|
0.0
|
%
|
|||||||||||||||||||||||||
Total
|
$
|
8,691
|
100.0
|
%
|
$
|
8,420
|
100.0
|
%
|
$
|
7,464
|
100.0
|
%
|
$
|
6,916
|
100.0
|
%
|
$
|
7,877
|
100.0
|
%
|
December 31, 2018
|
||||||||||||||||
Number
of Loans
|
Loan
Balance (1)
|
Percent
|
Percent of
Total Loans
|
|||||||||||||
(dollars in thousands)
|
||||||||||||||||
Manufactured housing
|
—
|
$
|
—
|
0.00
|
%
|
0.00
|
%
|
|||||||||
Commercial real estate
|
4
|
2,435
|
67.88
|
%
|
0.32
|
%
|
||||||||||
Commercial
|
1
|
278
|
7.75
|
%
|
0.04
|
%
|
||||||||||
SBA
|
5
|
869
|
24.23
|
%
|
0.11
|
%
|
||||||||||
HELOC
|
—
|
—
|
0.00
|
%
|
0.00
|
%
|
||||||||||
Single family real estate
|
1
|
5
|
0.14
|
%
|
0.00
|
%
|
||||||||||
Consumer
|
—
|
—
|
0.00
|
%
|
0.00
|
%
|
||||||||||
Total
|
11
|
$
|
3,587
|
100.00
|
%
|
0.47
|
%
|
(1) |
Loan balance includes $1.5 million guaranteed by government agencies.
|
December 31, 2017
|
||||||||||||||||
Number
of Loans
|
Loan
Balance (1)
|
Percent
|
Percent of
Total Loans
|
|||||||||||||
(dollars in thousands)
|
||||||||||||||||
Manufactured housing
|
—
|
$
|
—
|
0.00
|
%
|
0.00
|
%
|
|||||||||
Commercial real estate
|
6
|
8,118
|
79.40
|
%
|
1.11
|
%
|
||||||||||
Commercial
|
3
|
374
|
3.66
|
%
|
0.05
|
%
|
||||||||||
SBA
|
8
|
1,727
|
16.89
|
%
|
0.24
|
%
|
||||||||||
HELOC
|
—
|
—
|
0.00
|
%
|
0.00
|
%
|
||||||||||
Single family real estate
|
1
|
5
|
0.05
|
%
|
0.00
|
%
|
||||||||||
Consumer
|
—
|
—
|
0.00
|
%
|
0.00
|
%
|
||||||||||
Total
|
18
|
$
|
10,224
|
100.00
|
%
|
1.40
|
%
|
(1) |
Loan balance includes $2.9 million guaranteed by government agencies.
|
December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
(in thousands)
|
||||||||||||
U.S. government agency notes
|
$
|
12,070
|
$
|
13,978
|
$
|
5,572
|
||||||
U.S. government agency mortgage backed securities ("MBS")
|
7,301
|
7,565
|
9,002
|
|||||||||
U.S. government agency collateralized mortgage obligations ("CMO")
|
12,861
|
14,649
|
16,994
|
|||||||||
Equity securities: Farmer Mac class A stock
|
121
|
156
|
115
|
|||||||||
$
|
32,353
|
$
|
36,348
|
$
|
31,683
|
December 31, 2018
|
||||||||||||||||||||||||||||||||||||||||
Less than One
Year
|
One to Five
Years
|
Five to Ten
Years
|
Over Ten Years
|
Total
|
||||||||||||||||||||||||||||||||||||
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
|||||||||||||||||||||||||||||||
Securities available-for-sale
|
(dollars in thousands)
|
|||||||||||||||||||||||||||||||||||||||
U.S. government agency notes
|
$
|
1,946
|
2.6
|
%
|
$
|
1,388
|
2.6
|
%
|
$
|
8,736
|
3.1
|
%
|
$
|
—
|
—
|
$
|
12,070
|
2.0
|
%
|
|||||||||||||||||||||
U.S. government agency CMO
|
—
|
—
|
2,717
|
2.5
|
%
|
7,284
|
2.8
|
%
|
2,860
|
3.2
|
%
|
12,861
|
1.9
|
%
|
||||||||||||||||||||||||||
Total
|
$
|
1,946
|
2.6
|
%
|
$
|
4,105
|
2.5
|
%
|
$
|
16,020
|
3.0
|
%
|
$
|
2,860
|
3.2
|
%
|
$
|
24,931
|
2.0
|
%
|
||||||||||||||||||||
Securities held-to-maturity
|
||||||||||||||||||||||||||||||||||||||||
U.S. government agency MBS
|
$
|
—
|
—
|
$
|
2,058
|
4.7
|
%
|
$
|
4,449
|
3.2
|
%
|
$
|
794
|
3.6
|
%
|
$
|
7,301
|
3.3
|
%
|
|||||||||||||||||||||
Total
|
$
|
—
|
—
|
$
|
2,058
|
4.7
|
%
|
$
|
4,449
|
3.2
|
%
|
$
|
794
|
3.6
|
%
|
$
|
7,301
|
3.3
|
%
|
|||||||||||||||||||||
Securities measured at fair value
|
||||||||||||||||||||||||||||||||||||||||
Farmer Mac class A stock
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
121
|
—
|
|||||||||||||||||||||||||
Total
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
121
|
—
|
December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
(in thousands)
|
||||||||||||
Balance, beginning of period
|
$
|
372
|
$
|
137
|
$
|
198
|
||||||
Additions
|
174
|
501
|
350
|
|||||||||
Proceeds from dispositions
|
(484
|
)
|
(416
|
)
|
(395
|
)
|
||||||
Gains (losses) on sales, net
|
(62
|
)
|
150
|
(16
|
)
|
|||||||
Balance, end of period
|
$
|
—
|
$
|
372
|
$
|
137
|
Year Ended December 31,
|
||||||||||||||||||||||||
2018
|
2017
|
2016
|
||||||||||||||||||||||
Average
Balance
|
Percent of
Total
|
Average
Balance
|
Percent of
Total
|
Average
Balance
|
Percent of
Total
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
Non-interest bearing demand deposits
|
$
|
111,246
|
15.6
|
%
|
$
|
107,589
|
16.2
|
%
|
$
|
80,611
|
14.2
|
%
|
||||||||||||
Interest-bearing demand deposits
|
265,974
|
37.2
|
%
|
260,868
|
39.2
|
%
|
251,644
|
44.6
|
%
|
|||||||||||||||
Savings
|
14,458
|
2.0
|
%
|
14,197
|
2.1
|
%
|
14,138
|
2.5
|
%
|
|||||||||||||||
Time deposits of $100,000 or more
|
181,472
|
25.4
|
%
|
200,729
|
30.2
|
%
|
177,122
|
31.3
|
%
|
|||||||||||||||
Other time deposits
|
141,501
|
19.8
|
%
|
81,495
|
12.3
|
%
|
42,531
|
7.5
|
%
|
|||||||||||||||
Total deposits
|
$
|
714,651
|
100.0
|
%
|
$
|
664,878
|
100.0
|
%
|
$
|
566,046
|
100.0
|
%
|
December 31,
|
||||||||||||||||
2018
|
2017
|
|||||||||||||||
TCDs Over
$ 100,000
|
Other
TCDs
|
TCDs Over
$ 100,000
|
Other
TCDs
|
|||||||||||||
Less than three months
|
$
|
78,935
|
$
|
42,976
|
$
|
90,799
|
$
|
33,048
|
||||||||
Three to six months
|
50,964
|
50,478
|
24,876
|
40,293
|
||||||||||||
Six to twelve months
|
39,892
|
14,141
|
32,340
|
30,578
|
||||||||||||
Over twelve months
|
39,143
|
6,244
|
63,591
|
4,857
|
||||||||||||
Total deposits
|
$
|
208,934
|
$
|
113,839
|
$
|
211,606
|
$
|
108,776
|
December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
FHLB Advances
|
(in thousands)
|
|||||||||||
Maximum month-end balance
|
$
|
75,000
|
$
|
50,000
|
$
|
25,000
|
||||||
Balance at year end
|
70,000
|
50,000
|
25,000
|
|||||||||
Average balance
|
40,551
|
24,704
|
5,453
|
|||||||||
Other Borrowings
|
||||||||||||
Maximum month-end balance
|
6,843
|
6,843
|
5,500
|
|||||||||
Balance at year end
|
5,000
|
6,843
|
4,000
|
|||||||||
Average balance
|
5,463
|
3,410
|
5,246
|
|||||||||
Total borrowed funds
|
$
|
75,000
|
$
|
56,843
|
$
|
29,000
|
||||||
Weighted average interest rate at end of year
|
2.77
|
%
|
1.87
|
%
|
1.13
|
%
|
||||||
Weighted average interest rate during the year
|
2.41
|
%
|
1.56
|
%
|
2.35
|
%
|
Total Capital
(To Risk-
Weighted
Assets)
|
Tier 1 Capital
(To Risk-
Weighted
Assets)
|
Common
Equity Tier 1
(To Risk-
Weighted
Assets)
|
Leverage
Ratio/Tier 1
Capital
(To Average
Assets)
|
|||||||||||||
December 31, 2018
|
||||||||||||||||
CWB's actual regulatory ratios
|
10.83
|
%
|
9.68
|
%
|
9.68
|
%
|
8.57
|
%
|
||||||||
Minimum capital requirements
|
8.00
|
%
|
6.00
|
%
|
4.50
|
%
|
4.00
|
%
|
||||||||
Well-capitalized requirements
|
10.00
|
%
|
8.00
|
%
|
6.50
|
%
|
5.00
|
%
|
||||||||
Minimum capital requirements including fully-phased in capital conservation buffer (2019)
|
10.50
|
%
|
8.50
|
%
|
7.00
|
%
|
N/A
|
|||||||||
December 31, 2017
|
||||||||||||||||
CWB's actual regulatory ratios
|
11.31
|
%
|
10.10
|
%
|
10.10
|
%
|
8.83
|
%
|
||||||||
Minimum capital requirements
|
8.00
|
%
|
6.00
|
%
|
4.50
|
%
|
4.00
|
%
|
||||||||
Well-capitalized requirements
|
10.00
|
%
|
8.00
|
%
|
6.50
|
%
|
5.00
|
%
|
||||||||
Minimum capital requirements including fully-phased in capital conservation buffer (2019)
|
10.50
|
%
|
8.50
|
%
|
7.00
|
%
|
N/A
|
Payments Due by Period
|
||||||||||||||||||||
Total
|
Less
Than 1
Year
|
1 to 3
Years
|
3 to 5
Years
|
After 5
Years
|
||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||
Time deposit maturities
|
$
|
322,773
|
$
|
280,651
|
$
|
38,706
|
$
|
3,416
|
$
|
—
|
||||||||||
FHLB advances
|
70,000
|
40,000
|
30,000
|
—
|
—
|
|||||||||||||||
Other borrowings
|
5,000
|
500
|
2,000
|
2,000
|
500
|
|||||||||||||||
Purchase obligations
|
8,021
|
5,135
|
1,697
|
1,189
|
—
|
|||||||||||||||
Operating lease obligations
|
9,245
|
1,300
|
2,469
|
2,145
|
3,331
|
|||||||||||||||
Total
|
$
|
415,039
|
$
|
327,586
|
$
|
74,872
|
$
|
8,750
|
$
|
3,831
|
Amount of Commitment By Period of Expiration
|
||||||||||||||||||||
Total
Commitments
|
Less Than
1 Year
|
1 to 3
Years
|
3 to 5
Years
|
After 5
Years
|
||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||
Commitments to extend credit
|
$
|
57,450
|
$
|
28,639
|
$
|
24,903
|
$
|
1,835
|
$
|
2,073
|
||||||||||
Standby letters of credit
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Total
|
$
|
57,450
|
$
|
28,639
|
$
|
24,903
|
$
|
1,835
|
$
|
2,073
|
· |
the customer must obtain or provide some additional credit, property or services from or to CWB other than a loan, discount, deposit or trust services;
|
· |
the customer must obtain or provide some additional credit, property or service from or to CWBC or any subsidiaries; or
|
· |
the customer must not obtain some other credit, property or services from competitors, except reasonable requirements to assure soundness of credit extended.
|
· |
assets (exclusive of goodwill and other intangible assets) would be 1.25 times its liabilities (exclusive of deferred taxes, deferred income and other deferred credits);
and
|
· |
current assets would be at least equal to current liabilities.
|
Adequately
Capitalized
|
Well
Capitalized
|
Capital
Conservation
Buffer Fully
Phased-In
|
CWB
|
CWBC
(consolidated)
|
||||||||||||||||
Total risk-based capital
|
8.00
|
%
|
10.00
|
%
|
10.50
|
%
|
10.83
|
%
|
11.26
|
%
|
||||||||||
Tier 1 risk-based capital ratio
|
6.00
|
%
|
8.00
|
%
|
8.50
|
%
|
9.68
|
%
|
10.10
|
%
|
||||||||||
Common Equity Tier 1
|
4.50
|
%
|
6.50
|
%
|
7.00
|
%
|
9.68
|
%
|
10.10
|
%
|
||||||||||
Tier 1 leverage capital ratio
|
4.00
|
%
|
5.00
|
%
|
N/A
|
8.57
|
%
|
8.96
|
%
|
· |
“well capitalized” if it has a total risk-based capital ratio of 10% or more, has a Tier 1 risk-based capital ratio of 6% or more, has a leverage capital ratio of 5% or
more and is not subject to specified requirements to meet and maintain a specific capital level for any capital measure;
|
· |
“adequately capitalized” if it has a total risk-based capital ratio of 8% or more, a Tier 1 risk-based capital ratio of 4% or more and a leverage capital ratio of 4% or
more (3% under certain circumstances) and does not meet the definition of “well capitalized”;
|
· |
“undercapitalized” if it has a total risk-based capital ratio that is less than 8%, a Tier 1 risk-based capital ratio that is less than 4%, or a leverage capital ratio that
is less than 4% (3% under certain circumstances)
|
· |
“significantly undercapitalized” if it has a total risk-based capital ratio that is less than 6%, a Tier 1 risk-based capital ratio that is less than 3% or a leverage
capital ratio that is less than 3%; and
|
· |
“critically undercapitalized” if it has a ratio of tangible equity to total assets that is equal to or less than 2%
|
Sensitivity of Net Interest Income
|
||||||||||||||||||||||||||||
Interest Rate Scenario (change in basis point from Base)
|
||||||||||||||||||||||||||||
Down 100
|
Base
|
Up 100
|
Up 200
|
Up 300
|
Up 400
|
Up 500
|
||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||
Interest income
|
$
|
42,761
|
$
|
45,290
|
$
|
48,039
|
$
|
50,797
|
$
|
53,571
|
$
|
56,210
|
$
|
58,826
|
||||||||||||||
Interest expense
|
9,280
|
12,258
|
16,154
|
19,981
|
23,808
|
27,636
|
31,463
|
|||||||||||||||||||||
Net interest income
|
$
|
33,481
|
$
|
33,032
|
$
|
31,885
|
$
|
30,816
|
$
|
29,762
|
$
|
28,575
|
$
|
27,363
|
||||||||||||||
% change
|
1.4
|
%
|
(3.5
|
)%
|
(6.7
|
)%
|
(9.9
|
)%
|
(13.5
|
)%
|
(17.2
|
)%
|
Sensitivity of Net Interest Income
|
||||||||||||||||||||||||||||
Interest Rate Scenario (change in basis point from Base)
|
||||||||||||||||||||||||||||
Down 100
|
Base
|
Up 100
|
Up 200
|
Up 300
|
Up 400
|
Up 500
|
||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||
Interest income
|
$
|
37,719
|
$
|
40,270
|
$
|
42,869
|
$
|
45,465
|
$
|
48,096
|
$
|
50,721
|
$
|
53,243
|
||||||||||||||
Interest expense
|
4,089
|
6,910
|
10,681
|
14,452
|
18,223
|
21,994
|
25,766
|
|||||||||||||||||||||
Net interest income
|
$
|
33,630
|
$
|
33,360
|
$
|
32,188
|
$
|
31,013
|
$
|
29,873
|
$
|
28,727
|
$
|
27,477
|
||||||||||||||
% change
|
0.8
|
%
|
(3.5
|
)%
|
(7.0
|
)%
|
(10.5
|
)%
|
(13.9
|
)%
|
(17.6
|
)%
|
Economic Value of Equity
|
||||||||||||||||||||||||||||
As of December 31, 2018
|
||||||||||||||||||||||||||||
Interest Rate Scenario (change in basis point from Base)
|
||||||||||||||||||||||||||||
Down 100
|
Base
|
Up 100
|
Up 200
|
Up 300
|
Up 400
|
Up 500
|
||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||
Assets
|
$
|
878,269
|
$
|
858,280
|
$
|
841,547
|
$
|
824,377
|
$
|
808,434
|
$
|
792,496
|
$
|
774,020
|
||||||||||||||
Liabilities
|
790,702
|
776,998
|
768,730
|
760,927
|
753,552
|
746,571
|
739,954
|
|||||||||||||||||||||
Net present value
|
$
|
87,567
|
$
|
81,282
|
$
|
72,817
|
$
|
63,450
|
$
|
54,882
|
$
|
45,925
|
$
|
34,067
|
||||||||||||||
% change
|
7.7
|
%
|
(10.4
|
)%
|
(21.9
|
)%
|
(32.5
|
)%
|
(43.5
|
)%
|
(58.1
|
)%
|
Economic Value of Equity
|
||||||||||||||||||||||||||||
As of December 31, 2017
|
||||||||||||||||||||||||||||
Interest Rate Scenario (change in basis point from Base)
|
||||||||||||||||||||||||||||
Down 100
|
Base
|
Up 100
|
Up 200
|
Up 300
|
Up 400
|
Up 500
|
||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||
Assets
|
$
|
847,537
|
$
|
824,808
|
$
|
807,810
|
$
|
790,955
|
$
|
775,754
|
$
|
760,912
|
$
|
744,936
|
||||||||||||||
Liabilities
|
754,397
|
740,293
|
731,860
|
723,909
|
716,402
|
709,304
|
702,584
|
|||||||||||||||||||||
Net present value
|
$
|
93,140
|
$
|
84,515
|
$
|
75,950
|
$
|
67,046
|
$
|
59,352
|
$
|
51,608
|
$
|
42,352
|
||||||||||||||
% change
|
10.2
|
%
|
(10.1
|
)%
|
(20.7
|
)%
|
(29.8
|
)%
|
(38.9
|
)%
|
(49.9
|
)%
|
PAGE
|
|
Report of Independent Registered Public Accounting Firm
|
44 |
Consolidated Financial Statements
|
45 |
Consolidated Balance Sheets
|
46 |
Consolidated Income Statements
|
47 |
Consolidated Statements of Comprehensive Income
|
48 |
Consolidated Statements of Stockholders’ Equity
|
49 |
Consolidated Statements of Cash Flows
|
50 |
Notes to Consolidated Financial Statements
|
51 |
December 31,
|
||||||||
2018
|
2017
|
|||||||
(in thousands, except share amounts)
|
||||||||
Assets:
|
||||||||
Cash and due from banks
|
$
|
2,975
|
$
|
3,639
|
||||
Federal funds sold
|
8
|
12
|
||||||
Interest-earning demand in other financial institutions
|
53,932
|
42,218
|
||||||
Cash and cash equivalents
|
56,915
|
45,869
|
||||||
Investment securities - available-for-sale, at fair value; amortized cost of $25,222 at December 31, 2018
and $28,742 at December 31, 2017
|
24,931
|
28,783
|
||||||
Investment securities - held-to-maturity, at amortized cost; fair value of $7,269 at December 31, 2018 and
$7,671 at December 31, 2017
|
7,301
|
7,565
|
||||||
Investment securities - measured at fair value
|
121
|
—
|
||||||
Federal Home Loan Bank stock, at cost
|
2,714
|
2,347
|
||||||
Federal Reserve Bank stock, at cost
|
1,373
|
1,373
|
||||||
Loans:
|
||||||||
Held for sale, at lower of cost or fair value
|
48,355
|
55,094
|
||||||
Held for investment, net of allowance for loan losses of $8,691 at December 31, 2018 and $8,420 at December
31, 2017
|
711,197
|
671,095
|
||||||
Total loans
|
759,552
|
726,189
|
||||||
Other assets acquired through foreclosure, net
|
-
|
372
|
||||||
Premises and equipment, net
|
6,381
|
5,581
|
||||||
Other assets
|
18,003
|
15,236
|
||||||
Total assets
|
$
|
877,291
|
$
|
833,315
|
||||
Liabilities:
|
||||||||
Deposits:
|
||||||||
Non-interest-bearing demand
|
$
|
108,161
|
$
|
108,500
|
||||
Interest-bearing demand
|
270,431
|
256,717
|
||||||
Savings
|
14,641
|
14,085
|
||||||
Certificates of deposit ($250,000 or more)
|
93,439
|
81,985
|
||||||
Other certificates of deposit
|
229,334
|
238,397
|
||||||
Total deposits
|
716,006
|
699,684
|
||||||
Other borrowings
|
75,000
|
56,843
|
||||||
Other liabilities
|
10,134
|
6,718 | ||||||
Total liabilities
|
801,140
|
763,245
|
||||||
Stockholders’ equity:
|
||||||||
Common stock — no par value, 60,000,000 shares authorized; 8,533,346 shares issued and outstanding at
December 31, 2018 and 8,193,339 at December 31, 2017
|
42,964
|
42,604
|
||||||
Retained earnings
|
33,328
|
27,441
|
||||||
Accumulated other comprehensive income (loss)
|
(141
|
)
|
25
|
|||||
Total stockholders’ equity
|
76,151
|
70,070
|
||||||
Total liabilities and stockholders’ equity
|
$
|
877,291
|
$
|
833,315
|
Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Interest income:
|
(in thousands, except per share amounts)
|
|||||||||||
Loans, including fees
|
$
|
40,865
|
$
|
36,192
|
$
|
31,097
|
||||||
Investment securities and other
|
1,766
|
1,199
|
1,119
|
|||||||||
Total interest income
|
42,631
|
37,391
|
32,216
|
|||||||||
Interest expense:
|
||||||||||||
Deposits
|
7,702
|
4,283
|
2,851
|
|||||||||
Other borrowings
|
1,286
|
446
|
276
|
|||||||||
Total interest expense
|
8,988
|
4,729
|
3,127
|
|||||||||
Net interest income
|
33,643
|
32,662
|
29,089
|
|||||||||
Provision (credit) for loan losses
|
14
|
411
|
(48
|
)
|
||||||||
Net interest income after provision for loan losses
|
33,629
|
32,251
|
29,137
|
|||||||||
Non-interest income:
|
||||||||||||
Other loan fees
|
1,348
|
1,300
|
1,042
|
|||||||||
Document processing fees
|
489
|
558
|
496
|
|||||||||
Service charges
|
459
|
458
|
403
|
|||||||||
Gains from loan sales, net
|
—
|
53
|
—
|
|||||||||
Other
|
332
|
388
|
312
|
|||||||||
Total non-interest income
|
2,628
|
2,757
|
2,253
|
|||||||||
Non-interest expenses:
|
||||||||||||
Salaries and employee benefits
|
16,329
|
15,339
|
14,383
|
|||||||||
Occupancy, net
|
3,132
|
2,862
|
2,264
|
|||||||||
Professional services
|
1,356
|
1,069
|
873
|
|||||||||
Advertising and marketing
|
685
|
750
|
616
|
|||||||||
Data processing
|
852
|
725
|
793
|
|||||||||
Depreciation
|
764
|
685
|
678
|
|||||||||
FDIC assessment
|
770
|
664
|
376
|
|||||||||
Stock based compensation
|
478
|
537
|
338
|
|||||||||
Loan servicing and collection
|
182
|
253
|
209
|
|||||||||
Other
|
1,491
|
1,661
|
2,018
|
|||||||||
Total non-interest expenses
|
26,039
|
24,545
|
22,548
|
|||||||||
Income before provision for income taxes
|
10,218
|
10,463
|
8,842
|
|||||||||
Provision for income taxes
|
2,809
|
5,548
|
3,613
|
|||||||||
Net income
|
$
|
7,409
|
$
|
4,915
|
$
|
5,229
|
||||||
Earnings per share:
|
||||||||||||
Basic
|
$
|
0.89
|
$
|
0.60
|
$
|
0.64
|
||||||
Diluted
|
$
|
0.88
|
$
|
0.57
|
$
|
0.62
|
||||||
Weighted average number of common shares outstanding:
|
||||||||||||
Basic
|
8,288
|
8,146
|
8,114
|
|||||||||
Diluted
|
8,451
|
8,589
|
8,444
|
|||||||||
Dividends declared per common share
|
$
|
0.190
|
$
|
0.155
|
$
|
0.135
|
Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
(in thousands)
|
||||||||||||
Net income
|
$
|
7,409
|
$
|
4,915
|
$
|
5,229
|
||||||
Other comprehensive income (loss), net:
|
||||||||||||
Unrealized income (loss) on securities available-for-sale (AFS), net (tax effect of $70, ($32),
($28) for each respective period presented)
|
(107
|
)
|
54
|
39
|
||||||||
Net other comprehensive income (loss)
|
(107
|
)
|
54
|
39
|
||||||||
Comprehensive income
|
$
|
7,302
|
$
|
4,969
|
$
|
5,268
|
Preferred Stock
|
Common Stock
|
Accumulated
Other
Comprehensive
|
Retained
|
Total
Stockholders'
|
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Income (Loss)
|
Earnings
|
Equity
|
||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||
Balance, December 31, 2015:
|
—
|
$
|
—
|
8,206
|
$
|
42,355
|
$
|
(68
|
)
|
$
|
19,657
|
$
|
61,944
|
|||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
—
|
5,229
|
5,229
|
|||||||||||||||||||||
Exercise of stock options
|
—
|
—
|
74
|
220
|
—
|
—
|
220
|
|||||||||||||||||||||
Stock based compensation
|
—
|
—
|
—
|
338
|
—
|
—
|
338
|
|||||||||||||||||||||
Common stock repurchase
|
—
|
—
|
(184
|
)
|
(1,338
|
)
|
—
|
—
|
(1,338
|
)
|
||||||||||||||||||
Dividends on common stock
|
—
|
—
|
—
|
—
|
—
|
(1,096
|
)
|
(1,096
|
)
|
|||||||||||||||||||
Other comprehensive loss, net
|
—
|
—
|
—
|
—
|
39
|
—
|
39
|
|||||||||||||||||||||
Balance, December 31, 2016:
|
—
|
—
|
8,096
|
41,575
|
(29
|
)
|
23,790
|
65,336
|
||||||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
—
|
4,915
|
4,915
|
|||||||||||||||||||||
Exercise of stock options
|
—
|
—
|
97
|
492
|
—
|
—
|
492
|
|||||||||||||||||||||
Stock based compensation
|
—
|
—
|
—
|
537
|
—
|
—
|
537
|
|||||||||||||||||||||
Dividends on common stock
|
—
|
—
|
—
|
—
|
—
|
(1,264
|
)
|
(1,264
|
)
|
|||||||||||||||||||
Other comprehensive income, net
|
—
|
—
|
—
|
—
|
54
|
—
|
54
|
|||||||||||||||||||||
Balance, December 31, 2017:
|
—
|
—
|
8,193
|
42,604
|
25
|
27,441
|
70,070
|
|||||||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
—
|
7,409
|
7,409
|
|||||||||||||||||||||
Exercise of stock options
|
—
|
—
|
102
|
551
|
—
|
—
|
551
|
|||||||||||||||||||||
Stock based compensation
|
—
|
—
|
—
|
478
|
—
|
—
|
478
|
|||||||||||||||||||||
Common stock repurchase
|
—
|
—
|
(63
|
)
|
(669
|
)
|
—
|
—
|
(669
|
)
|
||||||||||||||||||
Dividends on common stock
|
—
|
—
|
—
|
—
|
—
|
(1,581
|
)
|
(1,581
|
)
|
|||||||||||||||||||
Other comprehensive loss, net
|
—
|
—
|
—
|
—
|
(107
|
)
|
—
|
(107
|
)
|
|||||||||||||||||||
Impact of ASU 2016-01 and 2018-02 as of January 1, 2018
|
—
|
—
|
—
|
—
|
(59
|
)
|
59
|
—
|
||||||||||||||||||||
Conversion of common stock warrants
|
—
|
—
|
301
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||
Balance, December 31, 2018
|
—
|
$
|
—
|
8,533
|
$
|
42,964
|
$
|
(141
|
)
|
$
|
33,328
|
$
|
76,151
|
Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
(in thousands)
|
||||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$
|
7,409
|
$
|
4,915
|
$
|
5,229
|
||||||
Adjustments to reconcile net income to cash provided by operating activities:
|
||||||||||||
Provision (credit) for loan losses
|
14
|
411
|
(48
|
)
|
||||||||
Depreciation
|
764
|
685
|
678
|
|||||||||
Stock-based compensation
|
478
|
537
|
338
|
|||||||||
Deferred income taxes
|
(529
|
)
|
528
|
(409
|
)
|
|||||||
Net (accretion) amortization of discounts and premiums for investment securities
|
100
|
80
|
(82
|
)
|
||||||||
(Gains) losses on:
|
||||||||||||
Sale of repossessed assets, net
|
62
|
(150
|
)
|
16
|
||||||||
Sale of loans, net
|
—
|
(53
|
)
|
—
|
||||||||
Sale of assets, net
|
—
|
—
|
—
|
|||||||||
Loans originated for sale and principal collections, net
|
6,739
|
6,375
|
3,072
|
|||||||||
Changes in:
|
||||||||||||
Other assets
|
(2,210
|
)
|
(1,882
|
)
|
(551
|
)
|
||||||
Other liabilities
|
3,416
|
2,719
|
(431
|
)
|
||||||||
Servicing assets, net
|
78
|
78
|
58
|
|||||||||
Net cash provided by operating activities
|
16,321
|
14,243
|
7,870
|
|||||||||
Cash flows from investing activities:
|
||||||||||||
Principal pay downs and maturities of available-for-sale securities
|
3,436
|
3,256
|
10,730
|
|||||||||
Purchase of available-for-sale securities
|
—
|
(9,413
|
)
|
(9,810
|
)
|
|||||||
Principal pay downs and maturities of held-to-maturity securities
|
1,040
|
1,413
|
709
|
|||||||||
Purchases of held-to-maturity securities
|
(794
|
)
|
-
|
(2,697
|
)
|
|||||||
Loan originations and principal collections, net
|
(40,290
|
)
|
(110,069
|
)
|
(90,183
|
)
|
||||||
Purchase of bank owned life insurance
|
—
|
—
|
(900
|
)
|
||||||||
Purchase of restricted stock, net
|
(367
|
)
|
(277
|
)
|
(184
|
)
|
||||||
Net increase in interest-bearing deposits in other financial institutions
|
—
|
—
|
99
|
|||||||||
Purchase of premises and equipment, net
|
(1,564
|
)
|
(2,335
|
)
|
(1,616
|
)
|
||||||
Proceeds from sale of other real estate owned and repossessed assets, net
|
484
|
416
|
395
|
|||||||||
Net cash used in investing activities
|
(38,055
|
)
|
(117,009
|
)
|
(93,457
|
)
|
||||||
Cash flows from financing activities:
|
||||||||||||
Net increase in deposits
|
16,322
|
87,448
|
67,898
|
|||||||||
Net increase in borrowings
|
18,157
|
27,843
|
18,500
|
|||||||||
Exercise of stock options
|
551
|
492
|
220
|
|||||||||
Cash dividends paid on common stock
|
(1,581
|
)
|
(1,264
|
)
|
(1,096
|
)
|
||||||
Common stock repurchase
|
(669
|
)
|
—
|
(1,338
|
)
|
|||||||
Net cash provided by financing activities
|
32,780
|
114,519
|
84,184
|
|||||||||
Net increase (decrease) in cash and cash equivalents
|
11,046
|
11,753
|
(1,403
|
)
|
||||||||
Cash and cash equivalents at beginning of year
|
45,869
|
34,116
|
35,519
|
|||||||||
Cash and cash equivalents at end of year
|
$
|
56,915
|
$
|
45,869
|
$
|
34,116
|
||||||
Supplemental disclosure:
|
||||||||||||
Cash paid during the period for:
|
||||||||||||
Interest
|
$
|
8,321
|
$
|
4,357
|
$
|
3,072
|
||||||
Income taxes
|
3,360
|
4,830
|
5,250
|
|||||||||
Non-cash investing and financing activity:
|
||||||||||||
Transfers to other assets acquired through foreclosure, net
|
174
|
501
|
350
|
1. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
· |
Commercial Real Estate, Commercial, Commercial Agriculture, SBA, HELOC, Single Family Residential, and Consumer – Migration analysis combined with risk rating is used to
determine the required ALL for all non-impaired loans. In addition, the migration results are adjusted based upon qualitative factors that affect the specific portfolio category. Reserves on impaired loans are determined based upon
the individual characteristics of the loan.
|
· |
Manufactured Housing – The ALL is calculated on the basis of loss history and risk rating, which is primarily a function of delinquency. In addition, the loss results are
adjusted based upon qualitative factors that affect this specific portfolio.
|
· |
The expected future cash flows are estimated and then discounted at the effective interest rate.
|
· |
The value of the underlying collateral net of selling costs. Selling costs are estimated based on industry standards, the Company’s actual experience or actual costs
incurred as appropriate. When evaluating real estate collateral, the Company typically uses appraisals or valuations, no more than twelve months old at time of evaluation. When evaluating non-real estate collateral securing the loan,
the Company will use audited financial statements or appraisals no more than twelve months old at time of evaluation. Additionally, for both real estate and non-real estate collateral, the Company may use other sources to determine
value as deemed appropriate.
|
· |
The loan’s observable market price.
|
· |
Concentrations of credit
|
· |
International risk
|
· |
Trends in volume, maturity, and composition of loans
|
· |
Volume and trend in delinquency, nonaccrual, and classified assets
|
· |
Economic conditions
|
· |
Geographic distance
|
· |
Policy and procedures or underwriting standards
|
· |
Staff experience and ability
|
· |
Value of underlying collateral
|
· |
Competition, legal, or regulatory environment
|
· |
Quality of loan review and Board oversight
|
Years
|
||||
Building and improvements
|
31.5
|
|||
Furniture and equipment
|
5 – 10
|
|||
Electronic equipment and software
|
3 – 5
|
· |
Level 1— Observable quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
|
· |
Level 2— Observable quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, matrix
pricing or model-based valuation techniques where all significant assumptions are observable, either directly or indirectly in the market.
|
· |
Level 3— Model-based techniques where all significant assumptions are not observable, either directly or indirectly, in the market. These unobservable assumptions reflect
management’s estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques may include use of discounted cash flow models and similar techniques.
|
2. |
INVESTMENT SECURITIES
|
December 31, 2018
|
||||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
(Losses)
|
Fair
Value
|
|||||||||||||
Securities available-for-sale
|
(in thousands)
|
|||||||||||||||
U.S. government agency notes
|
$
|
12,225
|
$
|
—
|
$
|
(155
|
)
|
$
|
12,070
|
|||||||
U.S. government agency collateralized mortgage obligations ("CMO")
|
12,931
|
9
|
(79
|
)
|
12,861
|
|||||||||||
Total
|
$
|
25,156
|
$
|
9
|
$
|
(234
|
)
|
$
|
24,931
|
|||||||
Securities held-to-maturity
|
||||||||||||||||
U.S. government agency mortgage backed securities ("MBS")
|
$
|
7,301
|
$
|
118
|
$
|
(150
|
)
|
$
|
7,269
|
|||||||
Total
|
$
|
7,301
|
$
|
118
|
$
|
(150
|
)
|
$
|
7,269
|
|||||||
Securities measured at fair value
|
||||||||||||||||
Equity securities: Farmer Mac class A stock
|
$
|
66
|
$
|
55
|
$
|
—
|
$
|
121
|
||||||||
Total
|
$
|
66
|
$
|
55
|
$
|
—
|
$
|
121
|
December 31, 2017
|
||||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
(Losses)
|
Fair
Value
|
|||||||||||||
Securities available-for-sale
|
(in thousands)
|
|||||||||||||||
U.S. government agency notes
|
$
|
14,035
|
$
|
35
|
$
|
(92
|
)
|
$
|
13,978
|
|||||||
U.S. government agency collateralized mortgage obligations ("CMO")
|
14,641
|
66
|
(58
|
)
|
14,649
|
|||||||||||
Equity securities: Farmer Mac class A stock
|
66
|
90
|
—
|
156
|
||||||||||||
Total
|
$
|
28,742
|
$
|
191
|
$
|
(150
|
)
|
$
|
28,783
|
|||||||
Securities held-to-maturity
|
||||||||||||||||
U.S. government agency mortgage backed securities ("MBS")
|
$
|
7,565
|
$
|
216
|
$
|
(110
|
)
|
$
|
7,671
|
|||||||
Total
|
$
|
7,565
|
$
|
216
|
$
|
(110
|
)
|
$
|
7,671
|
December 31, 2018
|
||||||||||||||||||||||||||||||||||||||||
Less than One
Year
|
One to Five
Years
|
Five to Ten
Years
|
Over Ten Years
|
Total
|
||||||||||||||||||||||||||||||||||||
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
|||||||||||||||||||||||||||||||
Securities available-for-sale
|
(dollars in thousands)
|
|||||||||||||||||||||||||||||||||||||||
U.S. government agency notes
|
$
|
1,946
|
2.6
|
%
|
$
|
1,388
|
2.6
|
%
|
$
|
8,736
|
3.1
|
%
|
$
|
—
|
—
|
$
|
12,070
|
2.0
|
%
|
|||||||||||||||||||||
U.S. government agency CMO
|
—
|
—
|
2,717
|
2.5
|
%
|
7,284
|
2.8
|
%
|
2,860
|
3.2
|
%
|
12,861
|
1.9
|
%
|
||||||||||||||||||||||||||
Total
|
$
|
1,946
|
2.6
|
%
|
$
|
4,105
|
2.5
|
%
|
$
|
16,020
|
3.0
|
%
|
$
|
2,860
|
3.2
|
%
|
$
|
24,931
|
2.0
|
%
|
||||||||||||||||||||
Securities held-to-maturity
|
||||||||||||||||||||||||||||||||||||||||
U.S. government agency MBS
|
$
|
—
|
—
|
$
|
2,058
|
4.7
|
%
|
$
|
4,449
|
3.2
|
%
|
$
|
794
|
3.6
|
%
|
$
|
7,301
|
3.3
|
%
|
|||||||||||||||||||||
Total
|
$
|
—
|
—
|
$
|
2,058
|
4.7
|
%
|
$
|
4,449
|
3.2
|
%
|
$
|
794
|
3.6
|
%
|
$
|
7,301
|
3.3
|
%
|
|||||||||||||||||||||
Securities measured at fair value
|
||||||||||||||||||||||||||||||||||||||||
Farmer Mac class A stock
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
121
|
—
|
||||||||||||||||||||||||||||||
Total
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
121
|
—
|
December 31, 2017
|
||||||||||||||||||||||||||||||||||||||||
Less than One
Year
|
One to Five
Years
|
Five to Ten
Years
|
Over Ten Years
|
Total
|
||||||||||||||||||||||||||||||||||||
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
|||||||||||||||||||||||||||||||
Securities available-for-sale
|
(dollars in thousands)
|
|||||||||||||||||||||||||||||||||||||||
U.S. government agency notes
|
$
|
1,967
|
2.6
|
%
|
$
|
1,833
|
1.6
|
%
|
$
|
10,178
|
2.0
|
%
|
$
|
—
|
—
|
$
|
13,978
|
2.0
|
%
|
|||||||||||||||||||||
U.S. government agency CMO
|
—
|
—
|
3,362
|
1.9
|
%
|
8,361
|
1.9
|
%
|
2,926
|
2.3
|
%
|
14,649
|
1.9
|
%
|
||||||||||||||||||||||||||
Farmer Mac class A stock
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
156
|
—
|
||||||||||||||||||||||||||||||
Total
|
$
|
1,967
|
2.6
|
%
|
$
|
5,195
|
1.8
|
%
|
$
|
18,539
|
1.9
|
%
|
$
|
2,926
|
2.3
|
%
|
$
|
28,783
|
2.0
|
%
|
||||||||||||||||||||
Securities held-to-maturity
|
||||||||||||||||||||||||||||||||||||||||
U.S. government agency MBS
|
$
|
—
|
—
|
$
|
2,802
|
3.6
|
%
|
$
|
4,763
|
3.1
|
%
|
$
|
—
|
0.0
|
%
|
$
|
7,565
|
3.3
|
%
|
|||||||||||||||||||||
Total
|
$
|
—
|
—
|
$
|
2,802
|
3.6
|
%
|
$
|
4,763
|
3.1
|
%
|
$
|
—
|
0.0
|
%
|
$
|
7,565
|
3.3
|
%
|
December 31,
|
||||||||||||||||
2018
|
2017
|
|||||||||||||||
Amortized
Cost
|
Estimated
Fair Value
|
Amortized
Cost
|
Estimated
Fair Value
|
|||||||||||||
Securities available for sale
|
(in thousands)
|
|||||||||||||||
Due in one year or less
|
$
|
1,998
|
$
|
1,946
|
$
|
1,997
|
$
|
1,967
|
||||||||
After one year through five years
|
4,138
|
4,105
|
5,220
|
5,195
|
||||||||||||
After five years through ten years
|
16,107
|
16,020
|
18,506
|
18,539
|
||||||||||||
After ten years
|
2,913
|
2,860
|
2,953
|
2,926
|
||||||||||||
Farmer Mac class A stock
|
—
|
—
|
66
|
156
|
||||||||||||
Total
|
$
|
25,156
|
$
|
24,931
|
$
|
28,742
|
$
|
28,783
|
||||||||
Securities held to maturity
|
||||||||||||||||
Due in one year or less
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||
After one year through five years
|
2,058
|
2,153
|
2,802
|
2,938
|
||||||||||||
After five years through ten years
|
4,449
|
4,323
|
4,763
|
4,733
|
||||||||||||
After ten years
|
794
|
793
|
—
|
—
|
||||||||||||
Total
|
$
|
7,301
|
$
|
7,269
|
$
|
7,565
|
$
|
7,671
|
||||||||
Securities measured at fair value
|
||||||||||||||||
Farmer Mac class A stock
|
$
|
66
|
$
|
121
|
$
|
—
|
$
|
—
|
||||||||
Total
|
$
|
66
|
$
|
121
|
$
|
—
|
$
|
—
|
December 31, 2018
|
||||||||||||||||||||||||
Less Than Twelve
Months
|
More Than Twelve
Months
|
Total
|
||||||||||||||||||||||
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||||||||
Securities available-for-sale
|
(in thousands)
|
|||||||||||||||||||||||
U.S. government agency notes
|
$
|
21
|
$
|
4,001
|
$
|
134
|
$
|
8,070
|
$
|
155
|
$
|
12,071
|
||||||||||||
U.S. government agency CMO
|
2
|
4,749
|
77
|
3,289
|
79
|
8,038
|
||||||||||||||||||
Total
|
$
|
23
|
$
|
8,750
|
$
|
211
|
$
|
11,359
|
$
|
234
|
$
|
20,109
|
||||||||||||
Securities held-to-maturity
|
||||||||||||||||||||||||
U.S. Government-agency MBS
|
$
|
10
|
$
|
1,706
|
$
|
140
|
$
|
2,094
|
$
|
150
|
$
|
3,800
|
||||||||||||
Total
|
$
|
10
|
$
|
1,706
|
$
|
140
|
$
|
2,094
|
$
|
150
|
$
|
3,800
|
||||||||||||
Securities measured at fair value
|
||||||||||||||||||||||||
Equity securities: Farmer Mac class A stock
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||||
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
December 31, 2017
|
||||||||||||||||||||||||
Less Than Twelve
Months
|
More Than Twelve
Months
|
Total
|
||||||||||||||||||||||
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||||||||
Securities available-for-sale
|
(in thousands)
|
|||||||||||||||||||||||
U.S. government agency notes
|
$
|
70
|
$
|
6,324
|
$
|
22
|
$
|
3,106
|
$
|
92
|
$
|
9,430
|
||||||||||||
U.S. government agency CMO
|
8
|
985
|
50
|
3,430
|
58
|
4,415
|
||||||||||||||||||
Equity securities: Farmer Mac class A stock
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
$
|
78
|
$
|
7,309
|
$
|
72
|
$
|
6,536
|
$
|
150
|
$
|
13,845
|
|||||||||||||
Securities held-to-maturity
|
||||||||||||||||||||||||
U.S. Government-agency MBS
|
$
|
—
|
$
|
—
|
$
|
110
|
$
|
2,496
|
$
|
110
|
$
|
2,496
|
||||||||||||
Total
|
$
|
—
|
$
|
—
|
$
|
110
|
$
|
2,496
|
$
|
110
|
$
|
2,496
|
3. |
LOAN HELD FOR SALE
|
4. |
LOANS HELD FOR INVESTMENT
|
December 31,
|
||||||||
2018
|
2017
|
|||||||
(in thousands)
|
||||||||
Manufactured housing
|
$
|
247,114
|
$
|
223,115
|
||||
Commercial real estate
|
365,809
|
354,617
|
||||||
Commercial
|
83,753
|
75,282
|
||||||
SBA
|
5,557
|
7,424
|
||||||
HELOC
|
6,756
|
9,422
|
||||||
Single family real estate
|
11,261
|
10,346
|
||||||
Consumer
|
46
|
83
|
||||||
720,296
|
680,289
|
|||||||
Allowance for loan losses
|
(8,691
|
)
|
(8,420
|
)
|
||||
Deferred fees, net
|
(337
|
)
|
(652
|
)
|
||||
Discount on SBA loans
|
(71
|
)
|
(122
|
)
|
||||
Total loans held for investment, net
|
$
|
711,197
|
$
|
671,095
|
December 31, 2018
|
||||||||||||||||||||||||||||||||
Current
|
30-59
Days
Past Due
|
60-89
Days
Past Due
|
Over 90
Days
Past Due
|
Total
Past Due
|
Nonaccrual
|
Total
|
Recorded
Investment
Over 90
Days
and
Accruing
|
|||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||
Manufactured housing
|
$
|
246,456
|
$
|
285
|
$
|
144
|
$
|
—
|
$
|
429
|
$
|
229
|
$
|
247,114
|
$
|
—
|
||||||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||||||||||
Commercial real estate
|
267,377
|
2,478
|
—
|
—
|
2,478
|
102
|
269,957
|
—
|
||||||||||||||||||||||||
SBA 504 1st trust deed
|
20,835
|
—
|
322
|
—
|
322
|
—
|
21,157
|
—
|
||||||||||||||||||||||||
Land
|
6,381
|
—
|
—
|
—
|
—
|
—
|
6,381
|
—
|
||||||||||||||||||||||||
Construction
|
67,835
|
479
|
—
|
—
|
479
|
—
|
68,314
|
—
|
||||||||||||||||||||||||
Commercial
|
78,857
|
15
|
—
|
—
|
15
|
4,881
|
83,753
|
—
|
||||||||||||||||||||||||
SBA
|
4,741
|
—
|
—
|
—
|
—
|
816
|
5,557
|
—
|
||||||||||||||||||||||||
HELOC
|
6,558
|
—
|
—
|
—
|
—
|
198
|
6,756
|
—
|
||||||||||||||||||||||||
Single family real estate
|
11,221
|
16
|
—
|
24
|
40
|
—
|
11,261
|
—
|
||||||||||||||||||||||||
Consumer
|
46
|
—
|
—
|
—
|
—
|
—
|
46
|
—
|
||||||||||||||||||||||||
Total
|
$
|
710,307
|
$
|
3,273
|
$
|
466
|
$
|
24
|
$
|
3,763
|
$
|
6,226
|
$
|
720,296
|
$
|
—
|
December 31, 2017
|
||||||||||||||||||||||||||||||||
Current
|
30-59
Days
Past Due
|
60-89
Days
Past Due |
Over 90
Days
Past Due
|
Total
Past Due
|
Nonaccrual
|
Total
|
Recorded
Investment
Over 90
Days
and
Accruing
|
|||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||
Manufactured housing
|
$
|
222,342
|
$
|
355
|
$
|
—
|
$
|
—
|
$
|
355
|
$
|
418
|
$
|
223,115
|
$
|
—
|
||||||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||||||||||
Commercial real estate
|
271,134
|
—
|
—
|
—
|
—
|
122
|
271,256
|
—
|
||||||||||||||||||||||||
SBA 504 1st trust deed
|
26,463
|
—
|
—
|
—
|
—
|
184
|
26,647
|
—
|
||||||||||||||||||||||||
Land
|
5,092
|
—
|
—
|
—
|
—
|
—
|
5,092
|
—
|
||||||||||||||||||||||||
Construction
|
51,622
|
—
|
—
|
—
|
—
|
—
|
51,622
|
—
|
||||||||||||||||||||||||
Commercial
|
70,481
|
15
|
—
|
—
|
15
|
4,786
|
75,282
|
—
|
||||||||||||||||||||||||
SBA
|
6,461
|
19
|
—
|
—
|
19
|
944
|
7,424
|
—
|
||||||||||||||||||||||||
HELOC
|
9,208
|
—
|
—
|
—
|
—
|
214
|
9,422
|
—
|
||||||||||||||||||||||||
Single family real estate
|
10,170
|
—
|
—
|
—
|
—
|
176
|
10,346
|
—
|
||||||||||||||||||||||||
Consumer
|
83
|
—
|
—
|
—
|
—
|
—
|
83
|
—
|
||||||||||||||||||||||||
Total
|
$
|
673,056
|
$
|
389
|
$
|
—
|
$
|
—
|
$
|
389
|
$
|
6,844
|
$
|
680,289
|
$
|
—
|
December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
(in thousands)
|
||||||||||||
Beginning balance
|
$
|
8,420
|
$
|
7,464
|
$
|
6,916
|
||||||
Charge-offs
|
(133
|
)
|
(203
|
)
|
(245
|
)
|
||||||
Recoveries
|
390
|
748
|
841
|
|||||||||
Net recoveries
|
257
|
545
|
596
|
|||||||||
Provision (credit)
|
14
|
411
|
(48
|
)
|
||||||||
Ending balance
|
$
|
8,691
|
$
|
8,420
|
$
|
7,464
|
For the Year Ended December 31,
|
||||||||||||||||||||||||||||||||
Manufactured
Housing
|
Commercial
Real
Estate
|
Commercial
|
SBA
|
HELOC
|
Single
Family
Real
Estate
|
Consumer
|
Total
|
|||||||||||||||||||||||||
2018
|
(in thousands)
|
|||||||||||||||||||||||||||||||
Beginning balance
|
$
|
2,180
|
$
|
4,844
|
$
|
1,133
|
$
|
73
|
$
|
92
|
$
|
98
|
$
|
—
|
$
|
8,420
|
||||||||||||||||
Charge-offs
|
(6
|
)
|
—
|
(127
|
)
|
—
|
—
|
—
|
—
|
(133
|
)
|
|||||||||||||||||||||
Recoveries
|
120
|
15
|
66
|
133
|
55
|
1
|
—
|
390
|
||||||||||||||||||||||||
Net (charge-offs) recoveries
|
114
|
15
|
(61
|
)
|
133
|
55
|
1
|
—
|
257
|
|||||||||||||||||||||||
Provision (credit)
|
(98
|
)
|
169
|
138
|
(127
|
)
|
(57
|
)
|
(11
|
)
|
—
|
14
|
||||||||||||||||||||
Ending balance
|
$
|
2,196
|
$
|
5,028
|
$
|
1,210
|
$
|
79
|
$
|
90
|
$
|
88
|
$
|
—
|
$
|
8,691
|
||||||||||||||||
2017
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$
|
2,201
|
$
|
3,707
|
$
|
1,241
|
$
|
106
|
$
|
100
|
$
|
109
|
$
|
—
|
$
|
7,464
|
||||||||||||||||
Charge-offs
|
(119
|
)
|
—
|
—
|
(30
|
)
|
—
|
(54
|
)
|
—
|
(203
|
)
|
||||||||||||||||||||
Recoveries
|
142
|
249
|
161
|
177
|
18
|
1
|
—
|
748
|
||||||||||||||||||||||||
Net (charge-offs) recoveries
|
23
|
249
|
161
|
147
|
18
|
(53
|
)
|
—
|
545
|
|||||||||||||||||||||||
Provision (credit)
|
(44
|
)
|
888
|
(269
|
)
|
(180
|
)
|
(26
|
)
|
42
|
—
|
411
|
||||||||||||||||||||
Ending balance
|
$
|
2,180
|
$
|
4,844
|
$
|
1,133
|
$
|
73
|
$
|
92
|
$
|
98
|
$
|
—
|
$
|
8,420
|
||||||||||||||||
2016
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$
|
3,525
|
$
|
1,853
|
$
|
939
|
$
|
451
|
$
|
43
|
$
|
103
|
$
|
2
|
$
|
6,916
|
||||||||||||||||
Charge-offs
|
(123
|
)
|
—
|
—
|
(121
|
)
|
—
|
—
|
(1
|
)
|
(245
|
)
|
||||||||||||||||||||
Recoveries
|
128
|
132
|
136
|
266
|
86
|
93
|
—
|
841
|
||||||||||||||||||||||||
Net (charge-offs) recoveries
|
5
|
132
|
136
|
145
|
86
|
93
|
(1
|
)
|
596
|
|||||||||||||||||||||||
Provision (credit)
|
(1,329
|
)
|
1,722
|
166
|
(490
|
)
|
(29
|
)
|
(87
|
)
|
(1
|
)
|
(48
|
)
|
||||||||||||||||||
Ending balance
|
$
|
2,201
|
$
|
3,707
|
$
|
1,241
|
$
|
106
|
$
|
100
|
$
|
109
|
$
|
—
|
$
|
7,464
|
Manufactured
Housing
|
Commercial
Real
Estate
|
Commercial
|
SBA
|
HELOC
|
Single
Family
Real
Estate
|
Consumer
|
Total
Loans
|
|||||||||||||||||||||||||
Loans Held for Investment as of December 31, 2018:
|
(in thousands)
|
|||||||||||||||||||||||||||||||
Recorded Investment:
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
$
|
8,726
|
$
|
243
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
775
|
$
|
—
|
$
|
9,744
|
||||||||||||||||
Impaired loans with no allowance recorded
|
3,269
|
102
|
7,811
|
815
|
198
|
1,964
|
—
|
14,159
|
||||||||||||||||||||||||
Total loans individually evaluated for impairment
|
11,995
|
345
|
7,811
|
815
|
198
|
2,739
|
—
|
23,903
|
||||||||||||||||||||||||
Loans collectively evaluated for impairment
|
235,119
|
365,464
|
75,942
|
4,742
|
6,558
|
8,522
|
46
|
696,393
|
||||||||||||||||||||||||
Total loans held for investment
|
$
|
247,114
|
$
|
365,809
|
$
|
83,753
|
$
|
5,557
|
$
|
6,756
|
$
|
11,261
|
$
|
46
|
$
|
720,296
|
||||||||||||||||
Unpaid Principal Balance
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
$
|
8,726
|
$
|
243
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
775
|
$
|
—
|
$
|
9,744
|
||||||||||||||||
Impaired loans with no allowance recorded
|
4,321
|
160
|
8,078
|
1,211
|
249
|
1,963
|
—
|
15,982
|
||||||||||||||||||||||||
Total loans individually evaluated for impairment
|
13,047
|
403
|
8,078
|
1,211
|
249
|
2,738
|
—
|
25,726
|
||||||||||||||||||||||||
Loans collectively evaluated for impairment
|
235,119
|
365,464
|
75,942
|
4,742
|
6,558
|
8,522
|
46
|
696,393
|
||||||||||||||||||||||||
Total loans held for investment
|
$
|
248,166
|
$
|
365,867
|
$
|
84,020
|
$
|
5,953
|
$
|
6,807
|
$
|
11,260
|
$
|
46
|
$
|
722,119
|
||||||||||||||||
Related Allowance for Credit Losses
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
$
|
432
|
$
|
9
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
24
|
$
|
—
|
$
|
465
|
||||||||||||||||
Impaired loans with no allowance recorded
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Total loans individually evaluated for impairment
|
432
|
9
|
—
|
—
|
—
|
24
|
—
|
465
|
||||||||||||||||||||||||
Loans collectively evaluated for impairment
|
1,764
|
5,019
|
1,210
|
79
|
90
|
64
|
—
|
8,226
|
||||||||||||||||||||||||
Total loans held for investment
|
$
|
2,196
|
$
|
5,028
|
$
|
1,210
|
$
|
79
|
$
|
90
|
$
|
88
|
$
|
—
|
$
|
8,691
|
Manufactured
Housing
|
Commercial
Real
Estate
|
Commercial
|
SBA
|
HELOC
|
Single
Family
Real
Estate
|
Consumer
|
Total
Loans
|
|||||||||||||||||||||||||
Loans Held for Investment as of December 31, 2017:
|
(in thousands)
|
|||||||||||||||||||||||||||||||
Recorded Investment:
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
$
|
5,830
|
$
|
557
|
$
|
3,551
|
$
|
281
|
$
|
—
|
$
|
2,133
|
$
|
—
|
$
|
12,352
|
||||||||||||||||
Impaired loans with no allowance recorded
|
2,163
|
—
|
5,023
|
699
|
214
|
176
|
—
|
8,275
|
||||||||||||||||||||||||
Total loans individually evaluated for impairment
|
7,993
|
557
|
8,574
|
980
|
214
|
2,309
|
—
|
20,627
|
||||||||||||||||||||||||
Loans collectively evaluated for impairment
|
215,122
|
354,060
|
66,708
|
6,444
|
9,208
|
8,037
|
83
|
659,662
|
||||||||||||||||||||||||
Total loans held for investment
|
$
|
223,115
|
$
|
354,617
|
$
|
75,282
|
$
|
7,424
|
$
|
9,422
|
$
|
10,346
|
$
|
83
|
$
|
680,289
|
||||||||||||||||
Unpaid Principal Balance
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
$
|
5,836
|
$
|
661
|
$
|
3,551
|
$
|
281
|
$
|
—
|
$
|
2,133
|
$
|
—
|
$
|
12,462
|
||||||||||||||||
Impaired loans with no allowance recorded
|
3,328
|
—
|
5,042
|
1,026
|
249
|
220
|
—
|
9,865
|
||||||||||||||||||||||||
Total loans individually evaluated for impairment
|
9,164
|
661
|
8,593
|
1,307
|
249
|
2,353
|
—
|
22,327
|
||||||||||||||||||||||||
Loans collectively evaluated for impairment
|
215,122
|
354,060
|
66,708
|
6,444
|
9,208
|
8,037
|
83
|
659,662
|
||||||||||||||||||||||||
Total loans held for investment
|
$
|
224,286
|
$
|
354,721
|
$
|
75,301
|
$
|
7,751
|
$
|
9,457
|
$
|
10,390
|
$
|
83
|
$
|
681,989
|
||||||||||||||||
Related Allowance for Credit Losses
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
$
|
427
|
$
|
11
|
$
|
50
|
$
|
1
|
$
|
—
|
$
|
35
|
$
|
—
|
$
|
524
|
||||||||||||||||
Impaired loans with no allowance recorded
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Total loans individually evaluated for impairment
|
427
|
11
|
50
|
1
|
—
|
35
|
—
|
524
|
||||||||||||||||||||||||
Loans collectively evaluated for impairment
|
1,753
|
4,833
|
1,083
|
72
|
92
|
63
|
—
|
7,896
|
||||||||||||||||||||||||
Total loans held for investment
|
$
|
2,180
|
$
|
4,844
|
$
|
1,133
|
$
|
73
|
$
|
92
|
$
|
98
|
$
|
—
|
$
|
8,420
|
December 31,
|
||||||||
2018
|
2017
|
|||||||
(in thousands)
|
||||||||
Impaired loans with a specific valuation allowance under ASC 310
|
$
|
9,744
|
$
|
12,352
|
||||
Impaired loans without a specific valuation allowance under ASC 310
|
14,159
|
8,275
|
||||||
Total impaired loans
|
$
|
23,903
|
$
|
20,627
|
||||
Valuation allowance related to impaired loans
|
$
|
465
|
$
|
524
|
December 31,
|
||||||||
2018
|
2017
|
|||||||
(in thousands)
|
||||||||
Manufactured housing
|
$
|
11,995
|
$
|
7,993
|
||||
Commercial real estate :
|
||||||||
Commercial real estate
|
102
|
122
|
||||||
SBA 504 1st trust deed
|
243
|
435
|
||||||
Land
|
—
|
—
|
||||||
Construction
|
—
|
—
|
||||||
Commercial
|
7,811
|
8,574
|
||||||
SBA
|
815
|
980
|
||||||
HELOC
|
198
|
214
|
||||||
Single family real estate
|
2,739
|
2,309
|
||||||
Consumer
|
—
|
—
|
||||||
Total
|
$
|
23,903
|
$
|
20,627
|
2018
|
2017
|
2016
|
||||||||||||||||||||||
Average
Investment
in Impaired
Loans
|
Interest
Income
|
Average
Investment
in Impaired
Loans
|
Interest
Income
|
Average
Investment
in Impaired
Loans
|
Interest
Income
|
|||||||||||||||||||
Manufactured housing
|
$
|
8,709
|
$
|
887
|
$
|
7,616
|
$
|
659
|
$
|
8,495
|
$
|
678
|
||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||
Commercial real estate
|
108
|
—
|
121
|
1
|
572
|
3
|
||||||||||||||||||
SBA 504 1st
|
341
|
19
|
502
|
19
|
1,445
|
38
|
||||||||||||||||||
Land
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Construction
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Commercial
|
7,520
|
245
|
5,176
|
339
|
3,276
|
215
|
||||||||||||||||||
SBA
|
874
|
18
|
797
|
21
|
931
|
98
|
||||||||||||||||||
HELOC
|
199
|
11
|
259
|
—
|
400
|
8
|
||||||||||||||||||
Single family real estate
|
2,298
|
144
|
2,013
|
103
|
2,166
|
108
|
||||||||||||||||||
Consumer
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Total
|
$
|
20,049
|
$
|
1,324
|
$
|
16,484
|
$
|
1,142
|
$
|
17,285
|
$
|
1,148
|
December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
(in thousands)
|
||||||||||||
Nonaccrual loans
|
$
|
6,226
|
$
|
6,844
|
$
|
3,117
|
||||||
SBA guaranteed portion of loans included above
|
$
|
2,848
|
$
|
2,372
|
$
|
742
|
||||||
Troubled debt restructured loans, gross
|
$
|
16,749
|
$
|
16,603
|
$
|
14,437
|
||||||
Loans 30 through 89 days past due with interest accruing
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Interest income recognized on impaired loans
|
$
|
1,324
|
$
|
1,142
|
$
|
1,148
|
||||||
Foregone interest on nonaccrual and troubled debt restructured loans
|
$
|
454
|
$
|
379
|
$
|
412
|
||||||
Allowance for loan losses to gross loans held for investment
|
1.21
|
%
|
1.24
|
%
|
1.24
|
%
|
December 31,
|
||||||||
2018
|
2017
|
|||||||
(in thousands)
|
||||||||
Manufactured housing
|
$
|
229
|
$
|
418
|
||||
Commercial real estate:
|
||||||||
Commercial real estate
|
102
|
122
|
||||||
SBA 504 1st trust deed
|
—
|
184
|
||||||
Land
|
—
|
—
|
||||||
Construction
|
—
|
—
|
||||||
Commercial
|
4,881
|
4,786
|
||||||
SBA
|
816
|
944
|
||||||
HELOC
|
198
|
214
|
||||||
Single family real estate
|
—
|
176
|
||||||
Consumer
|
—
|
—
|
||||||
Total
|
$
|
6,226
|
$
|
6,844
|
December 31, 2018
|
||||||||||||||||||||
Pass
|
Special
Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Manufactured housing
|
$
|
246,884
|
$
|
—
|
$
|
230
|
$
|
—
|
$
|
247,114
|
||||||||||
Commercial real estate:
|
||||||||||||||||||||
Commercial real estate
|
269,855
|
—
|
102
|
—
|
269,957
|
|||||||||||||||
SBA 504 1st trust deed
|
20,109
|
—
|
1,048
|
—
|
21,157
|
|||||||||||||||
Land
|
6,381
|
—
|
—
|
—
|
6,381
|
|||||||||||||||
Construction
|
66,683
|
1,631
|
—
|
—
|
68,314
|
|||||||||||||||
Commercial
|
73,580
|
—
|
7,771
|
—
|
81,351
|
|||||||||||||||
SBA
|
2,770
|
34
|
1,557
|
4,361
|
||||||||||||||||
HELOC
|
6,558
|
—
|
198
|
—
|
6,756
|
|||||||||||||||
Single family real estate
|
11,256
|
—
|
5
|
—
|
11,261
|
|||||||||||||||
Consumer
|
46
|
—
|
—
|
—
|
46
|
|||||||||||||||
Total, net
|
$
|
704,122
|
$
|
1,665
|
$
|
10,911
|
$
|
—
|
$
|
716,698
|
||||||||||
Government guarantee
|
—
|
—
|
3,598
|
—
|
3,598
|
|||||||||||||||
Total
|
$
|
704,122
|
$
|
1,665
|
$
|
14,509
|
$
|
—
|
$
|
720,296
|
December 31, 2017
|
||||||||||||||||||||
Pass
|
Special
Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Manufactured housing
|
$
|
222,429
|
$
|
—
|
$
|
686
|
$
|
—
|
$
|
223,115
|
||||||||||
Commercial real estate:
|
||||||||||||||||||||
Commercial real estate
|
271,134
|
—
|
122
|
—
|
271,256
|
|||||||||||||||
SBA 504 1st trust deed
|
25,973
|
—
|
674
|
—
|
26,647
|
|||||||||||||||
Land
|
5,092
|
—
|
—
|
—
|
5,092
|
|||||||||||||||
Construction
|
49,832
|
1,790
|
—
|
—
|
51,622
|
|||||||||||||||
Commercial
|
64,543
|
817
|
8,083
|
—
|
73,443
|
|||||||||||||||
SBA
|
4,221
|
102
|
1,752
|
—
|
6,075
|
|||||||||||||||
HELOC
|
9,208
|
—
|
214
|
—
|
9,422
|
|||||||||||||||
Single family real estate
|
10,165
|
—
|
181
|
—
|
10,346
|
|||||||||||||||
Consumer
|
83
|
—
|
—
|
—
|
83
|
|||||||||||||||
Total, net
|
$
|
662,680
|
$
|
2,709
|
$
|
11,712
|
$
|
—
|
$
|
677,101
|
||||||||||
Government guarantee
|
—
|
—
|
3,188
|
—
|
3,188
|
|||||||||||||||
Total
|
$
|
662,680
|
$
|
2,709
|
$
|
14,900
|
$
|
—
|
$
|
680,289
|
For the Year Ended December 31, 2018
|
||||||||||||||||||||||||
Number
of Loans
|
Pre-
Modification
Recorded
Investment |
Post
Modification
Recorded
Investment
|
Balance of
Loans with
Rate
Reduction |
Balance of
Loans with
Term
Extension
|
Effect on
Allowance
for
Loan
Losses
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
Manufactured housing
|
12
|
$
|
1,047
|
$
|
1,213
|
$
|
1,100
|
$
|
1,213
|
$
|
66
|
|||||||||||||
Commercial
|
3
|
1,780
|
1,780
|
—
|
1,780
|
—
|
||||||||||||||||||
SBA
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Total
|
15
|
$
|
2,827
|
$
|
2,993
|
$
|
1,100
|
$
|
2,993
|
$
|
66
|
For the Year Ended December 31, 2017
|
||||||||||||||||||||||||
Number
of Loans
|
Pre-
Modification
Recorded
Investment
|
Post
Modification
Recorded
Investment
|
Balance of
Loans with
Rate
Reduction
|
Balance of
Loans with
Term
Extension
|
Effect on
Allowance
for
Loan
Losses
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
Manufactured housing
|
11
|
$
|
894
|
$
|
894
|
$
|
894
|
$
|
894
|
$
|
48
|
|||||||||||||
Commercial
|
3
|
3,052
|
3,052
|
—
|
3,052
|
41
|
||||||||||||||||||
SBA
|
2
|
298
|
298
|
—
|
298
|
1
|
||||||||||||||||||
HELOC
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Single family real estate
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Total
|
16
|
$
|
4,244
|
$
|
4,244
|
$
|
894
|
$
|
4,244
|
$
|
90
|
For the Year Ended December 31, 2016
|
||||||||||||||||||||||||
Number
of Loans
|
Pre-
Modification
Recorded
Investment
|
Post
Modification
Recorded
Investment
|
Balance of
Loans with
Rate
Reduction
|
Balance of
Loans with
Term
Extension
|
Effect on
Allowance
for
Loan
Losses
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
Manufactured housing
|
25
|
$
|
1,903
|
$
|
1,903
|
$
|
1,903
|
$
|
1,903
|
$
|
112
|
|||||||||||||
Commercial real estate
|
5
|
1,075
|
1,075
|
-
|
1,075
|
13
|
||||||||||||||||||
SBA
|
1
|
92
|
92
|
—
|
92
|
-
|
||||||||||||||||||
HELOC
|
1
|
257
|
257
|
-
|
257
|
—
|
||||||||||||||||||
Single family real estate
|
1
|
105
|
105
|
105
|
105
|
7
|
||||||||||||||||||
Total
|
33
|
$
|
3,432
|
$
|
3,432
|
$
|
2,008
|
$
|
3,432
|
$
|
132
|
Year Ended December 31,
|
||||||||
2018
|
2017
|
|||||||
(in thousands)
|
||||||||
Balance, beginning
|
$
|
3,505
|
$
|
943
|
||||
New loans
|
160
|
2,741
|
||||||
Repayments and other
|
(160
|
)
|
(179
|
)
|
||||
Balance, ending
|
$
|
3,505
|
$
|
3,505
|
5. |
PREMISES AND EQUIPMENT
|
Year Ended December 31,
|
||||||||
2018
|
2017
|
|||||||
(in thousands)
|
||||||||
Bank premises and land
|
$
|
1,355
|
$
|
1,355
|
||||
Furniture, fixtures and equipment
|
10,956
|
10,241
|
||||||
Leasehold improvements
|
5,747
|
4,025
|
||||||
Construction in progress
|
5
|
944
|
||||||
18,063
|
16,565
|
|||||||
Accumulated depreciation
|
(11,682
|
)
|
(10,984
|
)
|
||||
Premises and equipment, net
|
$
|
6,381
|
$
|
5,581
|
(in thousands)
|
||||
2019
|
$
|
1,300
|
||
2020
|
1,261
|
|||
2021
|
1,208
|
|||
2022
|
1,135
|
|||
2023
|
1,010
|
|||
Thereafter
|
3,331
|
|||
$
|
9,245
|
6. |
OTHER ASSETS ACQUIRED THROUGH FORECLOSURE
|
December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
(in thousands)
|
||||||||||||
Balance, beginning of period
|
$
|
372
|
$
|
137
|
$
|
198
|
||||||
Additions
|
174
|
501
|
350
|
|||||||||
Proceeds from dispositions
|
(484
|
)
|
(416
|
)
|
(395
|
)
|
||||||
Gains (losses) on sales, net
|
(62
|
)
|
150
|
(16
|
)
|
|||||||
Balance, end of period
|
$
|
—
|
$
|
372
|
$
|
137
|
7. |
INCOME TAXES
|
December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Current:
|
(in thousands)
|
|||||||||||
Federal
|
$
|
2,130
|
$
|
3,722
|
$
|
3,000
|
||||||
State
|
1,208
|
1,298
|
1,022
|
|||||||||
3,338
|
5,020
|
4,022
|
||||||||||
Deferred:
|
||||||||||||
Federal
|
(421
|
)
|
701
|
(338
|
)
|
|||||||
State
|
(108
|
)
|
(173
|
)
|
(71
|
)
|
||||||
(529
|
)
|
528
|
(409
|
)
|
||||||||
Total provision for income taxes
|
$
|
2,809
|
$
|
5,548
|
$
|
3,613
|
December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Federal income tax at statutory rate
|
21.0
|
%
|
34.0
|
%
|
34.0
|
%
|
||||||
State franchise tax, net of federal benefit
|
8.6
|
%
|
7.2
|
%
|
7.2
|
%
|
||||||
Other
|
(2.1
|
)%
|
(0.4
|
)%
|
(0.3
|
)%
|
||||||
Tax law change
|
0.0
|
%
|
12.2
|
%
|
0.0
|
%
|
||||||
Total provision for income taxes
|
27.5
|
%
|
53.0
|
%
|
40.9
|
%
|
December 31,
|
||||||||
2018
|
2017
|
|||||||
Deferred Tax Assets:
|
(in thousands)
|
|||||||
Allowance for loan losses
|
$
|
2,619
|
$
|
2,514
|
||||
Unrealized loss on AFS securities
|
58
|
—
|
||||||
Other
|
2,028
|
1,562
|
||||||
Total gross deferred tax assets
|
4,705
|
4,076
|
||||||
Deferred tax asset valuation allowance
|
—
|
—
|
||||||
Total deferred tax assets
|
4,705
|
4,076
|
||||||
Deferred Tax Liabilities:
|
||||||||
Deferred state taxes
|
(248
|
)
|
(233
|
)
|
||||
Depreciation
|
(446
|
)
|
(142
|
)
|
||||
Unrealized gain on AFS securities
|
-
|
(11
|
)
|
|||||
Other
|
(786
|
)
|
(521
|
)
|
||||
Total deferred tax liabilities
|
(1,480
|
)
|
(907
|
)
|
||||
Net deferred tax asset
|
$
|
3,225
|
$
|
3,169
|
8. |
DEPOSITS
|
December 31,
|
||||||||
2018
|
2017
|
|||||||
(in thousands)
|
||||||||
Non-interest bearing demand deposits
|
$
|
108,161
|
$
|
108,500
|
||||
Interest-bearing deposits:
|
||||||||
NOW accounts
|
23,085
|
24,863
|
||||||
Money market deposit account
|
247,346
|
231,854
|
||||||
Savings accounts
|
14,641
|
14,085
|
||||||
Time deposits of $250,000 or more
|
93,439
|
81,985
|
||||||
Other time deposits
|
229,334
|
238,397
|
||||||
Total deposits
|
$
|
716,006
|
$
|
699,684
|
(in thousands)
|
||||
2019
|
$
|
280,651
|
||
2020
|
34,641
|
|||
2021
|
4,065
|
|||
2022
|
405
|
|||
2023
|
3,011
|
|||
Thereafter
|
—
|
|||
$
|
322,773
|
9. |
OTHER BORROWINGS
|
December 31,
|
||||||||||||||||
2018
|
2017
|
|||||||||||||||
Contractual Maturity Date
|
Amount
|
Rate
|
Amount
|
Rate
|
||||||||||||
(dollars in thousands)
|
||||||||||||||||
January 2, 2018
|
$
|
—
|
—
|
$
|
25,000
|
1.40
|
%
|
|||||||||
January 16, 2018
|
—
|
—
|
10,000
|
1.42
|
%
|
|||||||||||
January 29, 2018
|
—
|
—
|
5,000
|
1.45
|
%
|
|||||||||||
February 20, 2018
|
—
|
—
|
5,000
|
1.49
|
%
|
|||||||||||
March 1, 2018
|
—
|
—
|
5,000
|
1.47
|
%
|
|||||||||||
January 2, 2019
|
25,000
|
2.56
|
%
|
—
|
—
|
|||||||||||
March 21, 2019
|
5,000
|
2.34
|
%
|
—
|
—
|
|||||||||||
April 3, 2019
|
5,000
|
2.29
|
%
|
—
|
—
|
|||||||||||
May 31, 2019
|
5,000
|
2.41
|
%
|
—
|
—
|
|||||||||||
March 29, 2020
|
5,000
|
2.56
|
%
|
—
|
—
|
|||||||||||
April 3, 2020
|
15,000
|
2.54
|
%
|
—
|
—
|
|||||||||||
April 5, 2021
|
10,000
|
2.65
|
%
|
—
|
—
|
|||||||||||
Total FHLB advances
|
$
|
70,000
|
$
|
50,000
|
||||||||||||
Weighted average rate
|
2.52
|
%
|
1.43
|
%
|
10. |
COMMITMENTS AND CONTINGENCIES
|
Year Ended December 31,
|
||||||||
2018
|
2017
|
|||||||
(in thousands)
|
||||||||
Commitments to extend credit
|
$
|
57,450
|
$
|
68,812
|
||||
Standby letters of credit
|
—
|
—
|
||||||
Total
|
$
|
57,450
|
$
|
68,812
|
11. |
STOCKHOLDERS’ EQUITY
|
December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Expected life in years
|
6.3
|
6.4
|
6.5
|
|||||||||
Risk-free interest rate
|
2.85
|
%
|
2.04
|
%
|
1.62
|
%
|
||||||
Expected volatility
|
34.7
|
%
|
44.1
|
%
|
49.5
|
%
|
||||||
Annual dividend rate
|
1.64
|
%
|
1.49
|
%
|
1.73
|
%
|
Year Ended December 31, 2018
|
||||||||||||||||
Option
Shares
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Term
|
Aggregate
Intrinsic
Value
|
|||||||||||||
(in thousands, except exercise price and contractual terms)
|
||||||||||||||||
Outstanding options, beginning of period
|
680
|
$
|
7.21
|
|||||||||||||
Granted
|
136
|
11.61
|
||||||||||||||
Exercised
|
(102
|
)
|
5.39
|
|||||||||||||
Forfeited or expired
|
(35
|
)
|
8.16
|
|||||||||||||
Outstanding options, end of period
|
679
|
$
|
8.32
|
7.4
|
$
|
1,400
|
||||||||||
Options exercisable, end of period
|
340
|
$
|
7.39
|
6.6
|
$
|
945
|
||||||||||
Options expected to vest, end of period
|
588
|
$
|
8.08
|
7.2
|
$
|
1,318
|
Year Ended December 31, 2017
|
||||||||||||||||
Option
Shares
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Term
|
Aggregate
Intrinsic
Value
|
|||||||||||||
(in thousands, except exercise price and contractual terms)
|
||||||||||||||||
Outstanding options, beginning of period
|
705
|
$
|
6.41
|
|||||||||||||
Granted
|
159
|
10.15
|
||||||||||||||
Exercised
|
(97
|
)
|
5.05
|
|||||||||||||
Forfeited or expired
|
(87
|
)
|
8.57
|
|||||||||||||
Outstanding options, end of period
|
680
|
$
|
7.21
|
7.5
|
$
|
2,342
|
||||||||||
Options exercisable, end of period
|
319
|
$
|
6.35
|
6.6
|
$
|
1,371
|
||||||||||
Options expected to vest, end of period
|
576
|
$
|
7.03
|
7.3
|
$
|
719
|
Year Ended December 31, 2016
|
||||||||||||||||
Option
Shares
|
Weighted
Average
Exercise
Price |
Weighted
Average
Remaining
Term
|
Aggregate
Intrinsic
Value
|
|||||||||||||
(in thousands, except exercise price and contractual terms)
|
||||||||||||||||
Outstanding options, beginning of period
|
665
|
$
|
6.03
|
|||||||||||||
Granted
|
192
|
7.12
|
||||||||||||||
Exercised
|
(74
|
)
|
2.99
|
|||||||||||||
Forfeited or expired
|
(78
|
)
|
8.12
|
|||||||||||||
Outstanding options, end of period
|
705
|
$
|
6.41
|
7.3
|
$
|
2,057
|
||||||||||
Options exercisable, end of period
|
301
|
$
|
5.86
|
5.7
|
$
|
1,082
|
||||||||||
Options expected to vest, end of period
|
282
|
$
|
6.83
|
7.1
|
$
|
696
|
Number of
Option Shares
|
Weighted
Average
Grant-Date Fair
Value
|
|||||||
(in thousands, except per share data)
|
||||||||
Unvested options, beginning of period
|
361
|
$
|
3.61
|
|||||
Granted
|
136
|
3.79
|
||||||
Vested
|
(127
|
)
|
3.61
|
|||||
Forfeited
|
(31
|
)
|
3.36
|
|||||
Unvested options, end of period
|
339
|
$
|
3.70
|
12. |
CAPITAL REQUIREMENTS
|
Total Capital
(To Risk-
Weighted
Assets)
|
Tier 1 Capital
(To Risk-
Weighted
Assets)
|
Common
Equity Tier 1
(To Risk-
Weighted
Assets)
|
Leverage
Ratio/Tier1
Capital
(To Average
Assets)
|
|||||||||||||
December 31, 2018
|
||||||||||||||||
CWB's actual regulatory ratios
|
10.83
|
%
|
9.68
|
%
|
9.68
|
%
|
8.57
|
%
|
||||||||
Minimum capital requirements
|
8.00
|
%
|
6.00
|
%
|
4.50
|
%
|
4.00
|
%
|
||||||||
Well-capitalized requirements
|
10.00
|
%
|
8.00
|
%
|
6.50
|
%
|
5.00
|
%
|
||||||||
Minimum capital requirements including fully-phased in capital conservation buffer (2019)
|
10.50
|
%
|
8.50
|
%
|
7.00
|
%
|
N/A
|
Total Capital
(To Risk-
Weighted
Assets)
|
Tier 1 Capital
(To Risk-
Weighted
Assets)
|
Common
Equity Tier 1
(To Risk-
Weighted
Assets)
|
Leverage
Ratio/Tier1
Capital
(To Average
Assets)
|
|||||||||||||
December 31, 2017
|
||||||||||||||||
CWB's actual regulatory ratios
|
11.31
|
%
|
10.10
|
%
|
10.10
|
%
|
8.83
|
%
|
||||||||
Minimum capital requirements
|
8.00
|
%
|
6.00
|
%
|
4.50
|
%
|
4.00
|
%
|
||||||||
Well-capitalized requirements
|
10.00
|
%
|
8.00
|
%
|
6.50
|
%
|
5.00
|
%
|
||||||||
Minimum capital requirements including fully-phased in capital conservation buffer (2019)
|
10.50
|
%
|
8.50
|
%
|
7.00
|
%
|
N/A
|
13. |
EMPLOYEE BENEFIT PLANS
|
14. |
FAIR VALUE MEASUREMENT
|
Fair Value Measurements at the End of the Reporting
Period Using:
|
||||||||||||||||
December 31, 2018
|
Quoted
Prices
in Active
Markets
for Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Fair Value
|
||||||||||||
Assets:
|
(in thousands)
|
|||||||||||||||
Investment securities measured at fair value
|
$
|
121
|
$
|
-
|
$
|
-
|
$
|
121
|
||||||||
Investment securities available-for-sale
|
-
|
24,931
|
-
|
24,931
|
||||||||||||
Interest only strips
|
-
|
-
|
63
|
63
|
||||||||||||
Servicing assets
|
-
|
-
|
49
|
49
|
||||||||||||
$
|
121
|
$
|
24,931
|
$
|
112
|
$
|
25,164
|
Fair Value Measurements at the End of the Reporting
Period Using:
|
||||||||||||||||
December 31, 2017
|
Quoted
Prices
in Active
Markets
for Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Fair Value
|
||||||||||||
Assets:
|
(in thousands)
|
|||||||||||||||
Investment securities available-for-sale
|
$
|
156
|
$
|
28,627
|
$
|
-
|
$
|
28,783
|
||||||||
Interest only strips
|
-
|
-
|
87
|
87
|
||||||||||||
Servicing assets
|
-
|
-
|
97
|
97
|
||||||||||||
$
|
156
|
$
|
28,627
|
$
|
184
|
$
|
28,967
|
Fair Value Measurements at the End of the
Reporting Period Using
|
||||||||||||||||
Total
|
Quoted
Prices
in Active
Markets
for Identical
Assets
(Level 1)
|
Active
Markets
for
Similar
Assets
(Level 2)
|
Unobservable
Inputs
(Level 3)
|
|||||||||||||
(in thousands)
|
||||||||||||||||
As of December 31, 2018:
|
||||||||||||||||
Impaired loans
|
$
|
5,592
|
$
|
—
|
$
|
5,592
|
$
|
—
|
||||||||
Loans held for sale
|
49,050
|
—
|
49,050
|
—
|
||||||||||||
Foreclosed real estate and repossessed assets
|
—
|
—
|
—
|
—
|
||||||||||||
$
|
54,642
|
$
|
—
|
$
|
54,642
|
$
|
—
|
|||||||||
As of December 31, 2017:
|
||||||||||||||||
Impaired loans
|
$
|
6,323
|
$
|
—
|
$
|
6,323
|
$
|
—
|
||||||||
Loans held for sale
|
56,222
|
—
|
56,222
|
—
|
||||||||||||
Foreclosed real estate and repossessed assets
|
372
|
—
|
372
|
—
|
||||||||||||
$
|
62,917
|
$
|
—
|
$
|
62,917
|
$
|
—
|
December 31, 2018
|
||||||||||||||||||||
Carrying
|
Fair Value
|
|||||||||||||||||||
Amount
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
Financial assets:
|
(in thousands)
|
|||||||||||||||||||
Cash and cash equivalents
|
$
|
56,915
|
$
|
56,915
|
$
|
—
|
$
|
—
|
$
|
56,915
|
||||||||||
FRB and FHLB stock
|
4,087
|
—
|
4,087
|
—
|
4,087
|
|||||||||||||||
Investment securities
|
32,353
|
121
|
32,079
|
—
|
32,200
|
|||||||||||||||
Loans, net
|
759,552
|
—
|
735,377
|
17,846
|
753,223
|
|||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
716,006
|
—
|
712,900
|
—
|
712,900
|
|||||||||||||||
Other borrowings
|
75,000
|
—
|
74,930
|
—
|
74,930
|
December 31, 2017
|
||||||||||||||||||||
Carrying
|
Fair Value
|
|||||||||||||||||||
Amount
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
Financial assets:
|
(in thousands)
|
|||||||||||||||||||
Cash and cash equivalents
|
$
|
45,869
|
$
|
45,869
|
$
|
—
|
$
|
—
|
$
|
45,869
|
||||||||||
FRB and FHLB stock
|
3,720
|
—
|
3,720
|
—
|
3,720
|
|||||||||||||||
Investment securities
|
36,348
|
156
|
36,298
|
—
|
36,454
|
|||||||||||||||
Loans, net
|
726,189
|
—
|
705,723
|
13,779
|
719,502
|
|||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
699,684
|
—
|
699,211
|
—
|
699,211
|
|||||||||||||||
Other borrowings
|
56,843
|
—
|
56,842
|
—
|
56,842
|
15. |
ACCUMULATED OTHER COMPREHENSIVE INCOME
|
Year Ended December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
Unrealized holding gains (losses ) on AFS
|
(in thousands)
|
|||||||||||
Beginning balance
|
$
|
25
|
$
|
(29
|
)
|
$
|
(68
|
)
|
||||
Other comprehensive income (loss) before reclassifications
|
(107
|
)
|
54
|
39
|
||||||||
Amounts reclassified from accumulated other comprehensive income
|
(59
|
)
|
—
|
—
|
||||||||
Net current-period other comprehensive income
|
(166
|
)
|
54
|
39
|
||||||||
Ending Balance
|
$
|
(141
|
)
|
$
|
25
|
$
|
(29
|
)
|
16. |
PARENT COMPANY FINANCIAL INFORMATION
|
December 31,
|
||||||||
2018
|
2017
|
|||||||
(in thousands)
|
||||||||
Assets:
|
||||||||
Cash and cash equivalents (including interest-bearing deposits in other financial institutions)
|
$
|
299
|
$
|
973
|
||||
Investment in subsidiary
|
72,570
|
70,825
|
||||||
Total loans
|
8,355
|
4,915
|
||||||
Other assets
|
240
|
190
|
||||||
Total assets
|
$
|
81,464
|
$
|
76,903
|
||||
Liabilities and Stockholders' Equity:
|
||||||||
Other borrowings
|
$
|
5,000
|
$
|
6,843
|
||||
Other liabilities
|
172
|
15
|
||||||
Total liabilities
|
5,172
|
6,858
|
||||||
Common stock
|
42,964
|
42,604
|
||||||
Retained earnings
|
33,328
|
27,441
|
||||||
Total stockholders' equity
|
76,292
|
70,045
|
||||||
Total liabilities and stockholders' equity
|
$
|
81,464
|
$
|
76,903
|
December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
(in thousands)
|
||||||||||||
Interest income
|
$
|
264
|
$
|
60
|
$
|
5
|
||||||
Interest expense
|
329
|
196
|
247
|
|||||||||
Net interest expense
|
(65
|
)
|
(136
|
)
|
(242
|
)
|
||||||
Provision for loan losses
|
60
|
—
|
—
|
|||||||||
Net interest income after provision for loan losses
|
(125
|
)
|
(136
|
)
|
(242
|
)
|
||||||
Income from consolidated subsidiary
|
7,844
|
5,441
|
5,671
|
|||||||||
Total income
|
7,719
|
5,305
|
5,429
|
|||||||||
Total non-interest expenses
|
516
|
669
|
495
|
|||||||||
Income before income tax benefit
|
7,203
|
4,636
|
4,934
|
|||||||||
Income tax benefit
|
(206
|
)
|
(279
|
)
|
(295
|
)
|
||||||
Net income
|
$
|
7,409
|
$
|
4,915
|
$
|
5,229
|
December 31,
|
||||||||||||
2018
|
2017
|
2016
|
||||||||||
(in thousands)
|
||||||||||||
Cash Flows from Operating Activities:
|
||||||||||||
Net income
|
$
|
7,409
|
$
|
4,915
|
$
|
5,229
|
||||||
Adjustments to reconcile net income to cash provided by operating activities:
|
—
|
—
|
—
|
|||||||||
Equity in undistributed income from subsidiary
|
(7,844
|
)
|
(5,441
|
)
|
(5,671
|
)
|
||||||
Stock-based compensation
|
478
|
537
|
338
|
|||||||||
Changes in:
|
—
|
—
|
—
|
|||||||||
Other assets
|
(50
|
)
|
129
|
(138
|
)
|
|||||||
Other liabilities
|
157
|
(99
|
)
|
70
|
||||||||
Net cash provided by (used in) operating activities
|
150
|
41
|
(172
|
)
|
||||||||
Cash Flows from Investing Activities:
|
—
|
—
|
—
|
|||||||||
Loan originations and principal collections, net
|
(3,440
|
)
|
(4,915
|
)
|
—
|
|||||||
Net dividends from and investment in subsidiary
|
6,158
|
3,201
|
1,000
|
|||||||||
Net cash provided by (used in) investing activities
|
2,718
|
(1,714
|
)
|
1,000
|
||||||||
Cash Flows from Financing Activities:
|
||||||||||||
Net increase (decrease) from other borrowings
|
(1,843
|
)
|
2,843
|
(1,500
|
)
|
|||||||
Common stock dividends paid
|
(1,581
|
)
|
(1,264
|
)
|
(1,096
|
)
|
||||||
Common stock repurchase
|
(669
|
)
|
—
|
(1,338
|
)
|
|||||||
Proceeds from issuance of common stock
|
551
|
492
|
220
|
|||||||||
Net cash used in financing activities
|
(3,542
|
)
|
2,071
|
(3,714
|
)
|
|||||||
Net (decrease) increase in cash and cash equivalents
|
(674
|
)
|
398
|
(2,886
|
)
|
|||||||
Cash and cash equivalents at beginning of year
|
973
|
575
|
3,461
|
|||||||||
Cash and cash equivalents at end of year
|
$
|
299
|
$
|
973
|
$
|
575
|
17. |
QUARTERLY FINANCIAL DATA (UNAUDITED)
|
December 31, 2018
|
||||||||||||||||||||
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
Total
|
||||||||||||||||
(in thousands, except per share amounts)
|
||||||||||||||||||||
Interest income
|
$
|
9,988
|
$
|
10,401
|
$
|
11,201
|
$
|
11,041
|
$
|
42,631
|
||||||||||
Interest expense
|
1,638
|
2,090
|
2,573
|
2,687
|
8,988
|
|||||||||||||||
Net interest income
|
8,350
|
8,311
|
8,628
|
8,354
|
33,643
|
|||||||||||||||
Provision (credit) for loan losses
|
(144
|
)
|
117
|
(197
|
)
|
238
|
14
|
|||||||||||||
Net interest income after provision for loan losses
|
8,494
|
8,194
|
8,825
|
8,116
|
33,629
|
|||||||||||||||
Non-interest income
|
639
|
688
|
641
|
660
|
2,628
|
|||||||||||||||
Non-interest expenses
|
6,533
|
6,257
|
6,402
|
6,847
|
26,039
|
|||||||||||||||
Income before income taxes
|
2,600
|
2,625
|
3,064
|
1,929
|
10,218
|
|||||||||||||||
Provision for income taxes
|
786
|
758
|
695
|
570
|
2,809
|
|||||||||||||||
Net income
|
$
|
1,814
|
$
|
1,867
|
$
|
2,369
|
$
|
1,359
|
$
|
7,409
|
||||||||||
Earnings per share:
|
||||||||||||||||||||
Income per common share - basic
|
$
|
0.22
|
$
|
0.23
|
$
|
0.29
|
$
|
0.16
|
$
|
0.89
|
||||||||||
Income per common share - diluted
|
$
|
0.21
|
$
|
0.21
|
$
|
0.27
|
$
|
0.16
|
$
|
0.88
|
December 31, 2017
|
||||||||||||||||||||
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
Total
|
||||||||||||||||
(in thousands, except per share amounts)
|
||||||||||||||||||||
Interest income
|
$
|
8,703
|
$
|
9,066
|
$
|
9,695
|
$
|
9,927
|
$
|
37,391
|
||||||||||
Interest expense
|
929
|
1,030
|
1,319
|
1,451
|
4,729
|
|||||||||||||||
Net interest income
|
7,774
|
8,036
|
8,376
|
8,476
|
32,662
|
|||||||||||||||
(Credit) provision for loan losses
|
144
|
120
|
159
|
(12
|
)
|
411
|
||||||||||||||
Net interest income after provision for loan losses
|
7,630
|
7,916
|
8,217
|
8,488
|
32,251
|
|||||||||||||||
Non-interest income
|
641
|
697
|
716
|
703
|
2,757
|
|||||||||||||||
Non-interest expenses
|
5,923
|
6,007
|
6,387
|
6,228
|
24,545
|
|||||||||||||||
Income before income taxes
|
2,348
|
2,606
|
2,546
|
2,963
|
10,463
|
|||||||||||||||
Provision for income taxes
|
992
|
1,050
|
992
|
2,514
|
5,548
|
|||||||||||||||
Net income
|
$
|
1,356
|
$
|
1,556
|
$
|
1,554
|
$
|
449
|
$
|
4,915
|
||||||||||
Earnings per share:
|
||||||||||||||||||||
Income per common share - basic
|
$
|
0.17
|
$
|
0.19
|
$
|
0.19
|
$
|
0.05
|
$
|
0.60
|
||||||||||
Income per common share - diluted
|
$
|
0.16
|
$
|
0.18
|
$
|
0.18
|
$
|
0.05
|
$
|
0.57
|
Report of Independent Registered Public Accounting Firm
|
Page 44
|
|
Consolidated Balance Sheets as of December 31, 2018 and 2017
|
Page 46
|
|
Consolidated Income Statements for the three years ended December 31, 2018, 2017 and 2016
|
Page 47
|
|
Consolidated Statements of Comprehensive Income for the three years ended December 31, 2018, 2017 and 2016
|
Page 48
|
|
Consolidated Statements of Stockholders’ Equity for the three years ended December 31, 2018, 2017 and 2016
|
Page 49
|
|
Consolidated Statements of Cash Flows for the three years ended December 31, 2018, 2017 and 2016
|
Page 50
|
|
Notes to Consolidated Financial Statements
|
Page 51
|
Second Amended and Restated Articles of Incorporation (8)
|
|
Bylaws (3)
|
|
Certificate of Amendment of Bylaws (8)
|
|
Common Stock Certificate (2)
|
|
Warrant to Purchase 521,158 shares of Common Stock, dated December 19, 2008,
issued to the United States Department of the Treasury (9)
|
|
Salary Continuation Agreement between Goleta National Bank and Llewellyn Stone,
President and CEO (3)
|
|
Indemnification Agreement between the Company and Charles G. Baltuskonis, dated
March 18, 2003 (4)
|
|
Community West Bancshares 2006 Stock Option Plan (6)
|
|
Community West Bancshares 2006 Stock Option Plan form of Stock Option Agreement (6)
|
|
Employment and Confidentiality Agreement date July 1, 2007 among Community West
Bank, Community West Bancshares and Charles G. Baltuskonis (7)
|
|
Employment and Confidentiality Agreement, dated November 2, 2011, by and among
Community West Bank, Community West Bancshares and Martin E. Plourd (9)
|
|
Employment and Confidentiality Agreement, dated July 31, 2014, among Community
West Bank, Community West Bancshares and Kristine Price. (10)
|
|
Salary Continuation Agreement, dated January 28, 2014, between Community West Bank
and Martin E. Plourd. (11)
|
|
Community West Bancshares 2014 Stock Option Plan and Form of Stock Option
Agreement (12)
|
|
Employment and Confidentiality Agreement, dated June 1, 2015, among Community West
Bank, Community West Bancshares and William F. Filippin. (13)
|
|
Promissory Note, dated October 29, 2015, between Community West Bancshares and
Grandpoint Bank. (13)
|
|
Employment and Confidentiality Agreement, dated September 26, 2016, among
Community West Bank, Community West Bancshares and Maureen C. Clark. (14)
|
|
Employment and Confidentiality Agreement, dated April 1, 2017, among Community
West Bank, Community West Bancshares and Susan C. Thompson. (14)
|
|
Promissory Note, dated July 24, 2017, between Community West Bancshares and
Grandpoint Bank. (14)
|
|
Amendment to the Community West Bancshares 2014 Stock Option Plan (15)
|
|
Employment and Confidentiality Agreement, dated July 23, 2018 among Community West Bank and T. Joseph Stronks, (16)
|
|
Employment and Confidentiality Agreement, dated July 23, 2018 among Community West Bank and Paul S. Ulrich, (16)
|
|
Salary Continuation Agreement, dated September 28, 2018, between Community West Bank and William Filippin (16)
|
|
Subsidiaries of the Registrant (7)
|
|
Consent of RSM US LLP**
|
|
Certification of the Chief Executive Officer **
|
|
Certification of the Chief Financial Officer **
|
|
Certification pursuant to 18 U.S. C. Section 1350 **
|
101.INS
|
XBRL Taxonomy Instance Document***
|
101.SCH
|
XBRL Taxonomy Schema Document***
|
101.CAL
|
XBRL Taxonomy Calculation Linkbase Document***
|
101.DEF
|
XBRL Taxonomy Definition Linkbase Document***
|
101.LAB
|
XBRL Taxonomy Label Linkbase Document***
|
101.PRE
|
XBRL Taxonomy Presentation Linkbase Document***
|
(1)
|
Incorporated by reference from the Registrant's Form 8-K filed with the Commission on June 6, 2011.
|
(2)
|
Incorporated by reference from the Registrant's Annual Report on Form 10-K filed with the Commission on March 26, 1998.
|
(3)
|
Incorporated by reference from the Registrant’s Form 8-K filed with the Commission on December 18, 2008.
|
(4)
|
Incorporated by reference from the Registrant’s Amendment to Registration Statement on Form 8-A filed with the Commission on March 12, 1998.
|
(5)
|
Incorporated by reference from the Registrant’s Form 8-K filed with the Commission on December 24, 2008.
|
(6)
|
Incorporated by reference from the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2002 filed with the Commission on
March 31, 2003.
|
(7)
|
Incorporated by reference from Registrant’s Annual Report on Form 10-K for the year ended December 31, 2006 filed with the Commission on March
26, 2007.
|
(8)
|
Incorporated by reference from the Registrant’s Form 8-K filed with the Commission on July 2, 2007.
|
(9)
|
Incorporated by reference from the Registrant's Form 8-K filed with the Commission on November 3, 2011.
|
(10)
|
Incorporated by reference from Registrant’s Form 10-Q for the quarter and nine months ended September 30, 2014 filed with the Commission on
November 7, 2014.
|
(11)
|
Incorporated by reference from the Registrant’s Form 8-K filed with the Commission on January 29, 2014.
|
(12)
|
Incorporated by reference from Registrant’s Statement on Form S-8 (File No 333-201281) filed with the Commission on December 29, 2014.
|
(13)
|
Incorporated by reference from the Registrant’s Form 10-Q for the quarter and nine months ended September 30, 2015 filed with the Commission on
November 6, 2015.
|
(14)
|
Incorporated by reference from the Registrant’s Form 10-Q for the quarter and six months ended June 30, 2017 filed with the Commission on August 4,
2017.
|
(15)
|
Incorporated by reference from the Registrant’s Statement on Form S-8 (File No 323-218994) filed with the Commission on June 27, 2017.
|
(16)
|
Incorporated by reference from the Registrant's Form 10-Q for the quarter and nine months ended September 30, 2018 filed with the Commission on
November 2, 2018.
|
*
|
Indicates a management contract or compensatory plan or arrangement.
|
**
|
Filed herewith.
|
***
|
Furnished herewith.
|
COMMUNITY WEST BANCSHARES
|
||
(Registrant)
|
||
Date: March 8, 2019
|
By:
|
/s/ William R. Peeples
|
William R. Peeples
|
||
Chairman of the Board
|
Signature
|
Title
|
Date
|
|||
/s/ William R. Peeples
|
Director and Chairman of the Board
|
March 8, 2019
|
|||
William R. Peeples
|
|||||
/s/ Martin E. Plourd
|
President and Chief Executive Officer and Director
|
March 8, 2019
|
|||
Martin E. Plourd
|
(Principal Executive Officer)
|
||||
/s/ Susan C. Thompson
|
Executive Vice President and Chief Financial Officer
|
March 8, 2019
|
|||
Susan C. Thompson
|
(Principal Financial and Accounting Officer)
|
||||
/s/ Robert H. Bartlein
|
Director
|
March 8, 2019
|
|||
Robert H. Bartlein
|
|||||
/s/ Jean W. Blois
|
Director
|
March 8, 2019
|
|||
Jean W. Blois
|
|||||
/s/ Dana L. Boutain
|
Director
|
March 8, 2019
|
|||
Dana L. Boutain
|
|||||
/s/ Tom L. Dobyns
|
Director
|
March 8, 2019
|
|||
Tom L. Dobyns
|
|||||
/s/ John D. Illgen
|
Director and Secretary of the Board
|
March 8, 2019
|
|||
John D. Illgen
|
|||||
/s/ James W. Lokey
|
Director
|
March 8, 2019
|
|||
James W. Lokey
|
|||||
/s/ Shereef Moharram
|
Director
|
March 8, 2019
|
|||
Shereef Moharram
|
|||||
/s/ Kirk B. Stovesand
|
Director
|
March 8, 2019
|
|||
Kirk B. Stovesand
|
1. |
I have reviewed this annual report on Form 10-K of Community West Bancshares;
|
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 and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule
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 annual 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; and
|
5. |
The registrant's other certifying officer 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 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.
|
/s/ Martin E. Plourd
|
|
Martin E. Plourd
|
|
President and Chief Executive Officer
|
|
Community West Bancshares
|
|
March 8, 2019
|
1. |
I have reviewed this annual report on Form 10-K of Community West Bancshares;
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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;
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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;
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4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule
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. |
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 annual report is being prepared;
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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;
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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
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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; and
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5. |
The registrant's other certifying officer 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 registrant's board of directors (or persons performing the equivalent functions):
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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
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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.
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/s/ Susan C. Thompson
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Susan C. Thompson
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Executive Vice President and Chief Financial Officer
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Community West Bancshares
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March 8, 2019
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1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant as of and for the periods presented in the Report.
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/s/Martin E. Plourd
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Martin E. Plourd
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President and Chief Executive Officer
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/s/Susan C. Thompson
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Susan C. Thompson
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Executive Vice President and Chief Financial Officer
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March 8, 2019
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Feb. 22, 2019 |
Jun. 29, 2018 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | COMMUNITY WEST BANCSHARES / | ||
Entity Central Index Key | 0001051343 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Entity Public Float | $ 59,279,861 | ||
Entity Common Stock, Shares Outstanding | 8,477,290 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Assets: | ||
Investment securities available-for-sale, amortized cost | $ 25,222 | $ 28,742 |
Investment securities held-to-maturity, fair value | 7,269 | 7,671 |
Loans: | ||
Held for investment, allowance for loan losses | $ 8,691 | $ 8,420 |
Stockholders equity: | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 60,000,000 | 60,000,000 |
Common stock, shares issued (in shares) | 8,533,346 | 8,193,339 |
Common stock, shares outstanding (in shares) | 8,533,346 | 8,193,339 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | |||
Net income | $ 7,409 | $ 4,915 | $ 5,229 |
Other comprehensive income (loss), net: | |||
Unrealized income (loss) on securities available-for-sale (AFS), net (tax effect of $70, ($32), ($28) for each respective period presented) | (107) | 54 | 39 |
Net other comprehensive income (loss) | (107) | 54 | 39 |
Comprehensive income | $ 7,302 | $ 4,969 | $ 5,268 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Other comprehensive income (loss), net: | |||
Unrealized income (loss) on securities-available-for-sale (AFS), net, tax effect | $ 70 | $ (32) | $ (28) |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Nature of Operations Community West Bancshares (“CWBC”), incorporated under the laws of the state of California, is a bank holding company providing full service banking through its wholly-owned subsidiary Community West Bank, N.A. (“CWB” or the “Bank”). These entities are collectively referred to herein as the “Company”. Basis of Presentation The accounting and reporting policies of the Company are in accordance with accounting principles generally accepted in the United States (“GAAP”) and conform to practices within the financial services industry. The accounts of the Company and its consolidated subsidiary are included in these Consolidated Financial Statements. All significant intercompany balances and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant changes in the near term relate to the determination of the allowance for loan losses and fair value of investment securities available for sale. Although Management believes these estimates to be reasonably accurate, actual amounts may differ. In the opinion of Management, all adjustments considered necessary have been reflected in the financial statements during their preparation. Reclassifications Certain amounts in the consolidated financial statements as of and for the years ended December 31, 2017 and 2016 have been reclassified to conform to the current presentation. The reclassifications have no effect on net income or stockholders’ equity as previously reported. Business Segments Reportable business segments are determined using the “management approach” and are intended to present reportable segments consistent with how the chief operating decision maker organizes segments within the company for making operating decisions and assessing performance. As of December 31, 2018, 2017 and 2016, the Company had only one reportable business segment. Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks (including cash items in process of clearing), and federal funds sold. Cash flows from loans originated by the Company and deposits are reported net. The Company maintains amounts due from banks, which at times may exceed federally insured limits. The Company has not experienced any losses in such accounts. Cash Reserve Requirement Depository institutions are required by law to maintain reserves against their transaction deposits. The reserves must be held in cash or with the Federal Reserve Bank (“FRB”). The amount of the reserve varies by bank as the bank is permitted to meet this requirement by maintaining the specified amount as an average balance over a two-week period. The total reserve balance requirement was approximately $2.9 million and $3.6 million as of December 31, 2018 and 2017. Investment Securities Investment securities may be classified as held-to-maturity (“HTM”), available-for-sale (“AFS”) or trading. The appropriate classification is initially decided at the time of purchase. Securities classified as held-to-maturity are those debt securities the Company has both the intent and ability to hold to maturity regardless of changes in market conditions, liquidity needs or general economic conditions. These securities are carried at amortized cost. The sale of a security within three months of its maturity date or after the majority of the principal outstanding has been collected is considered a maturity for purposes of classification and disclosure. Securities classified as AFS or trading are reported as an asset on the Consolidated Balance Sheets at their estimated fair value. As the fair value of AFS securities changes, the changes are reported net of income tax as an element of other comprehensive income (“OCI”), except for impaired securities. When AFS securities are sold, the unrealized gain or loss is reclassified from OCI to non-interest income. The changes in the fair values of trading securities are reported in non-interest income. Securities classified as AFS are debt securities the Company intends to hold for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as AFS would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, decline in credit quality, and regulatory capital considerations. The Company has its AGM Stock securities classified as measured at fair value. The fair value changes are adjusted through non-interest income monthly. Interest income is recognized based on the coupon rate and increased by accretion of discounts earned or decreased by the amortization of premiums paid over the contractual life of the security using the interest method. For mortgage-backed securities, estimates of prepayments are considered in the constant yield calculations. In estimating whether there are any other than temporary impairment losses, management considers 1) the length of time and the extent to which the fair value has been less than amortized cost, 2) the financial condition and near term prospects of the issuer, 3) the impact of changes in market interest rates, and 4) the intent and ability of the Company to retain its investment for a period of time sufficient to allow for any anticipated recovery in fair value and it is not more likely than not the Company would be required to sell the security. Declines in the fair value of individual debt securities available for sale that are deemed to be other than temporary are reflected in earnings when identified. The fair value of the debt security then becomes the new cost basis. For individual debt securities where the Company does not intend to sell the security and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, the other than temporary decline in fair value of the debt security related to 1) credit loss is recognized in earnings, and 2) market or other factors is recognized in other comprehensive income or loss. Credit loss is recorded if the present value of cash flows is less than amortized cost. For individual debt securities where the Company intends to sell the security or more likely than not will not recover all of its amortized cost, the other than temporary impairment is recognized in earnings equal to the entire difference between the securities cost basis and its fair value at the balance sheet date. For individual debt securities for which a credit loss has been recognized in earnings, interest accruals and amortization and accretion of premiums and discounts are suspended when the credit loss is recognized. Interest received after accruals have been suspended is recognized on a cash basis. Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) Stock The Company’s subsidiary bank is a member of the Federal Home Loan Bank (“FHLB”) system and maintains an investment in capital stock of the FHLB. The bank also maintains an investment in FRB stock. These investments are considered equity securities with no actively traded market. These investments are carried at cost, which is equal to the value at which they may be redeemed. The dividend income received from the stock is reported in interest income. We conduct a periodic review and evaluation of our FHLB stock to determine if any impairment exists. No impairment existed in the years ended December 31, 2018 or 2017. Servicing Assets The guaranteed portion of certain Small Business Administration (“SBA”) loans can be sold into the secondary market. Servicing assets are recognized as separate assets when loans are sold with servicing retained. Servicing assets are amortized in proportion to, and over the period of, estimated future net servicing income. The Company uses industry prepayment statistics and its own prepayment experience in estimating the expected life of the loans. Management evaluates its servicing assets for impairment quarterly. Servicing assets are evaluated for impairment based upon the fair value of the rights as compared to amortized cost. Fair value is determined using discounted future cash flows calculated on a loan-by-loan basis and aggregated by predominate risk characteristics. The initial servicing asset and resulting gain on sale are calculated based on the difference between the best actual par and premium bids on an individual loan basis. Loans Held For Sale Loans which are originated and intended for sale in the secondary market are carried at the lower of cost or estimated fair value determined on an aggregate basis. Valuation adjustments, if any are recognized through a valuation allowance by charges to lower of cost or fair value provision. Loans held for sale are mostly comprised of SBA and commercial agriculture. In 2015, the Company exited from originating single family residential loans for sale. The Company did not incur any lower of cost or fair value provision in the years ended December 31, 2018, 2017 and 2016. Loans Held for Investment and Interest and Fees from Loans Loans are recognized at the principal amount outstanding, net of unearned income, loan participations and amounts charged off. Unearned income includes deferred loan origination fees reduced by loan origination costs. Unearned income on loans is amortized to interest income over the life of the related loan using the level yield method. Interest income on loans is accrued daily using the effective interest method and recognized over the terms of the loans. Loan fees collected for the origination of loans less direct loan origination costs (net deferred loan fees) are amortized over the contractual life of the loan through interest income. If the loan has scheduled payments, the amortization of the net deferred loan fee is calculated using the interest method over the contractual life of the loan. If the loan does not have scheduled payments, such as a line of credit, the net deferred loan fee is recognized as interest income on a straight-line basis over the contractual life of the loan commitment. Commitment fees based on a percentage of a customer’s unused line of credit and fees related to standby letters of credit are recognized over the commitment period. When loans are repaid, any remaining unamortized balances of unearned fees, deferred fees and costs and premiums and discounts paid on purchased loans are accounted for though interest income. Nonaccrual loans: For all loan types, when a borrower discontinues making payments as contractually required by the note, the Company must determine whether it is appropriate to continue to accrue interest. Generally, the Company places loans in a nonaccrual status and ceases recognizing interest income when the loan has become delinquent by more than 90 days or when Management determines that the full repayment of principal and collection of interest is unlikely. The Company may decide to continue to accrue interest on certain loans more than 90 days delinquent if they are well secured by collateral and in the process of collection. Other personal loans are typically charged off no later than 120 days delinquent. For all loan types, when a loan is placed on nonaccrual status, all interest accrued but uncollected is reversed against interest income in the period in which the status is changed. Subsequent payments received from the customer are applied to principal and no further interest income is recognized until the principal has been paid in full or until circumstances have changed such that payments are again consistently received as contractually required. The Company occasionally recognizes income on a cash basis for non-accrual loans in which the collection of the remaining principal balance is not in doubt. Impaired loans: A loan is considered impaired when, based on current information; it is probable that the Company will be unable to collect the scheduled payments of principal and/or interest under the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and/or interest payments. Loans that experience insignificant payment delays or payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays or payment shortfalls on a case-by-case basis. When determining the possibility of impairment, management considers the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record and the amount of the shortfall in relation to the principal and interest owed. For collateral-dependent loans, the Company uses the fair value of collateral method to measure impairment. The collateral-dependent loans that recognize impairment are charged down to the fair value less costs to sell. All other loans are measured for impairment either based on the present value of future cash flows or the loan’s observable market price. Troubled debt restructured loan (“TDR”): A TDR is a loan on which the Company, for reasons related to the borrower’s financial difficulties, grants a concession to the borrower that the Company would not otherwise consider. These concessions included but are not limited to term extensions, rate reductions and principal reductions. Forgiveness of principal is rarely granted and modifications for all classes of loans are predominately term extensions. A TDR loan is also considered impaired. Generally, a loan that is modified at an effective market rate of interest may no longer be disclosed as a troubled debt restructuring in years subsequent to the restructuring if it is not impaired based on the terms specified by the restructuring agreement. Allowance for Loan Losses and Provision for Loan Losses The Company maintains a detailed, systematic analysis and procedural discipline to determine the amount of the allowance for loan losses (“ALL”). The ALL is based on estimates and is intended to be appropriate to provide for probable losses inherent in the loan portfolio. This process involves deriving probable loss estimates that are based on migration analysis and historical loss rates, in addition to qualitative factors that are based on management’s judgment. The migration analysis and historical loss rate calculations are based on the annualized loss rates utilizing a twelve-quarter loss history. Migration analysis is utilized for the Commercial Real Estate (“CRE”), Commercial, Commercial Agriculture, Small Business Administration (“SBA”), Home Equity Line of Credit (“HELOC”), Single Family Residential, and Consumer portfolios. The historical loss rate method is utilized primarily for the Manufactured Housing portfolio. The migration analysis takes into account the risk rating of loans that are charged off in each loan category. Loans that are considered Doubtful are typically charged off. The following is a description of the characteristics of loan ratings. Loan ratings are reviewed as part of our normal loan monitoring process, but, at a minimum, updated on an annual basis. Substantially Risk Free – These borrowers have virtually no probability of default or loss given default and present no identifiable or potential adverse risk to the Company. Documented repayment is either backed by the full faith and credit of the United States Government, or secured by cash collateral at a ratio of 115% of the principal borrowed. The collateral must be in the possession of the Company and free from potential claim. In addition, these credits will conform in all aspects to established loan policies and procedures, laws, rules, and regulations. Nominal Risk – This rating is for the highest quality borrowers with nominal probability of default or loss given default from the transaction. Typically this is a borrower with a well-established record of financial performance, a strong equity position, abundant liquidity and excellent debt service ability. The Borrower’s financial outlook is stable due to a broad range of operations or products and is able to weather an economic downturn without significant impact to liquidity or net worth. Typically, this borrower will be publicly owned or have access to public debt or equity, all investment grade. In addition, these credits will conform in all aspects to established loan policies and procedures, laws, rules, and regulations. Transaction can include marketable securities as collateral, properly margined. Pass/Management Attention Risk – The loans is the three remaining pass categories range from minimal risk to moderate risk to management attention risk. Loans rated in the first two categories are acceptable loans, appropriately underwritten, bearing an ordinary risk of loss to the Company. Loans in the minimal and moderate risk categories are loans to quality borrowers with financial statements presenting a good primary source as well as an adequate secondary source of repayment. In the case of individuals, borrowers with this rating are quality borrowers demonstrating a reasonable level of secure income, a net worth adequate to support the loan and presenting a good primary source as well as an adequate secondary source of repayment. An asset in the management attention risk category indicates that although the borrower meets the criteria for a rating of acceptable risk or better, the credit possesses an identified and elevated risk level that should be resolved in a short period of time. Technical risks include, but are not limited to, inadequate or improperly executed documentation, which may be material, serious delays in the submission of financial reporting or covenant violations that are not indicative of a protracted trend. Special Mention - A Special Mention loan has potential weaknesses that require management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution's credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. Substandard - A Substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. These loans have a well-defined weakness or weaknesses that jeopardize full collection of amounts due. They are characterized by the distinct possibility that the Company will sustain some loss if the borrower’s deficiencies are not corrected. Doubtful - A loan classified Doubtful has all the weaknesses inherent in one classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors, which may work to the advantage and strengthening of the loan, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition or liquidation procedures, capital injection, perfecting liens on additional collateral and refinancing plans. Loss - Loans classified Loss are considered uncollectible and of such little value that their continuance as bankable loans is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this loan even though partial recovery may be realized in the future. Losses are taken in the period in which they are considered uncollectible. The Company’s ALL is maintained at a level believed appropriate by management to absorb known and inherent probable losses on existing loans. The allowance is charged for losses when management believes that full recovery on the loan is unlikely. The following is the Company’s policy regarding charging off loans. Commercial, CRE and SBA Loans Charge-offs on these loan categories are taken as soon as all or a portion of any loan balance is deemed to be uncollectible. A loan is considered impaired when, based on current information, it is probable that the Company will be unable to collect the scheduled payments of principal and/or interest under the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and/or interest payments. Loans that experience insignificant payment delays or payment shortfalls generally are not classified as impaired. Generally, loan balances are charged-down to the fair value of the collateral, if, based on a current assessment of the value, an apparent deficiency exists. In the event there is no perceived equity, the loan is charged-off in full. Unsecured loans which are delinquent over 90 days are also charged-off in full. Single Family Real Estate, HELOC’s and Manufactured Housing Loans Consumer loans and residential mortgages secured by one-to-four family residential properties, HELOC and manufactured housing loans in which principal or interest is due and unpaid for 90 days, are evaluated for impairment. Loan balances are charged-off to the fair value of the property, less estimated selling costs, if, based on a current appraisal, an apparent deficiency exists. In the event there is no perceived equity, the loan is generally fully charged-off. Consumer Loans All consumer loans (excluding real estate mortgages, HELOCs and savings secured loans) are charged-off or charged-down to net recoverable value before becoming 120 days or five payments delinquent. The ALL calculation for the different loan portfolios is as follows:
The Company evaluates and individually assesses for impairment loans classified as substandard or doubtful in addition to loans either on nonaccrual, considered a TDR or when other conditions exist which lead management to review for possible impairment. Measurement of impairment on impaired loans is determined on a loan-by-loan basis and in total establishes a specific reserve for impaired loans. The amount of impairment is determined by comparing the recorded investment in each loan with its value measured by one of three methods:
Interest income is not recognized on impaired loans except for limited circumstances in which a loan, although impaired, continues to perform in accordance with the loan contract and the borrower provides financial information to support maintaining the loan on accrual. The Company determines the appropriate ALL on a monthly basis. Any differences between estimated and actual observed losses from the prior month are reflected in the current period in determining the appropriate ALL and adjusted as deemed necessary. The review of the appropriateness of the allowance takes into consideration such factors as concentrations of credit, changes in the growth, size and composition of the loan portfolio, overall and individual portfolio quality, review of specific problem loans, collateral, guarantees and economic and environmental conditions that may affect the borrowers' ability to pay and/or the value of the underlying collateral. Additional factors considered include: geographic location of borrowers, changes in the Company’s product-specific credit policy and lending staff experience. These estimates depend on the outcome of future events and, therefore, contain inherent uncertainties. Another component of the ALL considers qualitative factors related to non-impaired loans. The qualitative portion of the allowance on each of the loan pools is based on changes in any of the following factors:
Off Balance Sheet and Credit Exposure In the ordinary course of business, the Company has entered into off-balance sheet financial instruments consisting of commitments to extend credit and standby letters of credit. Such financial instruments are recorded in the consolidated financial statements when they are funded. They involve, to varying degrees, elements of credit risk in excess of amounts recognized in the consolidated balance sheets. Losses would be experienced when the Company is contractually obligated to make a payment under these instruments and must seek repayment from the borrower, which may not be as financially sound in the current period as they were when the commitment was originally made. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Company enters into credit arrangements that generally provide for the termination of advances in the event of a covenant violation or other event of default. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the party. The commitments are collateralized by the same types of assets used as loan collateral. As with outstanding loans, the Company applies qualitative factors and utilization rates to its off-balance sheet obligations in determining an estimate of losses inherent in these contractual obligations. The estimate for loan losses on off-balance sheet instruments is included within other liabilities and the charge to income that establishes this liability is included in non-interest expense. Premises and Equipment Premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the terms of the leases or the estimated useful lives of the improvements, whichever is shorter. Generally, the estimated useful lives of other items of premises and equipment are as follows:
Foreclosed Real Estate and Repossessed Assets Foreclosed real estate and other repossessed assets are recorded at fair value at the time of foreclosure less estimated costs to sell. Any excess of loan balance over the fair value less estimated costs to sell of the other assets is charged-off against the allowance for loan losses. Any excess of the fair value less estimated costs to sell over the loan balance is recorded as a loan loss recovery to the extent of the loan loss previously charged-off against the allowance for loan losses; and, if greater, recorded as a gain on foreclosed assets. Subsequent to the legal ownership date, the Company periodically performs a new valuation and the asset is carried at the lower of carrying amount or fair value less estimated costs to sell. Operating expenses or income, and gains or losses on disposition of such properties, are recorded in current operations. Income Taxes The Company uses the asset and liability method, which recognizes an asset or liability representing the tax effects of future deductible or taxable amounts that have been recognized in the consolidated financial statements. Due to tax regulations, certain items of income and expense are recognized in different periods for tax return purposes than for financial statement reporting. These items represent “temporary differences.” Deferred income taxes are recognized for the tax effect of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is established for deferred tax assets if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets may not be realized. Any interest or penalties assessed by the taxing authorities is classified in the financial statements as income tax expense. Deferred tax assets are included in other assets on the consolidated balance sheets. Management evaluates the Company’s deferred tax asset for recoverability using a consistent approach which considers the relative impact of negative and positive evidence, including the Company’s historical profitability and projections of future taxable income. The Company is required to establish a valuation allowance for deferred tax assets and record a charge to income if management determines, based on available evidence at the time the determination is made, that it is more likely than not that some portion or all of the deferred tax assets may not be realized. The Company is subject to the provisions of ASC 740, Income Taxes (“ASC 740”). ASC 740 prescribes a more likely than not threshold for the financial statement recognition of uncertain tax positions. ASC 740 clarifies the accounting for income taxes by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. On a quarterly basis, the Company evaluates income tax accruals in accordance with ASC 740 guidance on uncertain tax positions. Bank Owned Life Insurance Bank owned life insurance is stated at its cash surrender value with changes recorded in other non-interest income in the consolidated income statements. The cash surrender value of the underlying policies was $6.7 million and $4.5 million as of December 31, 2018 and 2017, respectively. There are no loans offset against cash surrender values, and there are no restrictions as to the use of proceeds. Fair Value of Financial Instruments The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities. FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) established a framework for measuring fair value using a three-level valuation hierarchy for disclosure of fair value measurement. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset as of the measurement date. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would consider in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs, as follows:
The availability of observable inputs varies based on the nature of the specific financial instrument. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure. When market assumptions are available, ASC 820 requires the Company to make assumptions regarding the assumptions that market participants would use to estimate the fair value of the financial instrument at the measurement date. FASB ASC 825, Financial Instruments (“ASC 825”) requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value. Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction at December 31, 2018 or 2017. The estimated fair value amounts for December 31, 2018 and 2017 have been measured as of period-end, and have not been reevaluated or updated for purposes of these consolidated financial statements subsequent to those dates. As such, the estimated fair values of these financial instruments subsequent to the reporting date may be different than the amounts reported at the period-end. The information presented in Note 15, “Fair Value Measurement,” should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only required for a limited portion of the Company’s assets and liabilities. Due to the wide range of valuation techniques and the degree of subjectivity used in making the estimate, comparisons between the Company’s disclosures and those of other companies or banks may not be meaningful. The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments: Cash and cash equivalents The carrying amounts reported in the consolidated balance sheets for cash and due from banks approximate their fair value. Money market investments The carrying amounts reported in the consolidated balance sheets for money market investments approximate their fair value. Investment securities The fair value of Farmer Mac class A stock is based on quoted market prices and are categorized as Level 1 of the fair value hierarchy. The fair value of other investment securities were determined based on matrix pricing. Matrix pricing is a mathematical technique that utilizes observable market inputs including, for example, yield curves, credit ratings and prepayment speeds. Fair values determined using matrix pricing are generally categorized as Level 2 in the fair value hierarchy. FRB and FHLB stock CWB is a member of the FHLB system and maintains an investment in capital stock of the FHLB. CWB also maintain an investment in FRB stock. These investments are carried at cost since no ready market exists for them, and they have no quoted market value. The Company conducts a periodic review and evaluation of our FHLB stock to determine if any impairment exists. The fair values have been categorized as Level 2 in the fair value hierarchy. Loans Fair value for loans is estimated based on discounted cash flows using interest rates currently being offered for loans with similar terms to borrowers with similar credit quality with adjustments that the Company believes a market participant would consider in determining fair value based on a third party independent valuation. As a result, the fair value for loans is categorized as Level 2 in the fair value hierarchy. Fair values of impaired loans using a discounted cash flow method to measure impairment have been categorized as Level 3. Deposit liabilities The amount payable at demand at report date is used to estimate the fair value of demand and savings deposits. The estimated fair values of fixed-rate time deposits are determined by discounting the cash flows of segments of deposits that have similar maturities and rates, utilizing a discount rate that approximates the prevailing rates offered to depositors as of the measurement date. The fair value measurement of deposit liabilities is categorized as Level 2 in the fair value hierarchy. Federal Home Loan Bank advances and other borrowings The fair values of the Company’s borrowings are estimated using discounted cash flow analyses, based on the market rates for similar types of borrowing arrangements. The other borrowings have been categorized as Level 3 in the fair value hierarchy. The FHLB advances have been categorized as Level 2 in the fair value hierarchy. Off-balance sheet instruments Fair values for the Company’s off-balance sheet instruments (lending commitments and standby letters of credit) are based on quoted fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. Earnings Per Share Basic earnings per common share is computed using the weighted average number of common shares outstanding for the period divided into the net income (loss) available to common shareholders. Diluted earnings per share include the effect of all dilutive potential common shares for the period. Potentially dilutive common shares include stock options and warrants. Recent Accounting Pronouncements In May 2014, the FASB issued guidance codified within ASU 2014-09, “Revenue Recognition - Revenue from Contracts with Customers,” which amends the guidance in former Topic 605, Revenue Recognition. The new revenue recognition standard will supersede virtually all revenue guidance in U.S. GAAP, including industry specific guidance. The guidance in this Update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards. ASU 2014-09 is effective for the Company for annual reporting periods beginning after December 15, 2016. In August 2015, this effective date was extended for the Company to December 15, 2017. The Company may elect to apply the amendments of this Update using one of the following two methods: 1) retrospectively to each prior reporting period presented or 2) retrospectively with the cumulative effect of initially applying this Update recognized at the date of initial application. Our revenue is comprised of net interest income on financial assets and liabilities, which is explicitly excluded from the scope of the new guidance, and noninterest income. The contracts that are in scope of the guidance are primarily related to service charges on deposit accounts, cardholder income, and other service charge fees. The Company adopted this guidance as of January 1, 2018 which did not have a material impact on the Company's Consolidated Financial Statements. In January 2016, the FASB issued guidance codified within ASU 2016-01, “Financial Instruments – Overall, Subtopic 825-10: Recognition and Measurement of Financial Assets and Financial Liabilities,” which amends certain guidance on classification and measurement of financial instruments. The update is intended to enhance the reporting model for financial instruments to provide users of financial instruments with more decision-useful information and addresses certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 is effective for the Company for annual reporting periods beginning after December 15, 2017. The Company has evaluated the impact of the provisions in this standard on the Company's Consolidated Financial Statements. The Company's adoption of this guidance did not have a material impact on the Company's Consolidated Financial Statements. In February 2016, the FASB amended its standards with respect to the accounting for leases. The amended guidance serves to replace all current U.S. GAAP guidance on this topic and requires that an operating lease be recognized on the statement of financial condition as a “right-to-use” asset along with a corresponding liability representing the rent obligation. Key aspects of current lessor accounting remain unchanged from existing guidance. This standard is expected to result in an increase to assets and liabilities recognized and, therefore, increase risk-weighted assets for regulatory capital purposes. The guidance requires the use of the modified retrospective transition approach for existing leases that have not expired before the date of initial application and will become effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The standard is effective for the Company as of January 1, 2019. The Company has evaluated the impact of the amended guidance on the Company’s Consolidated Financial Statements and determined the impact to Assets and Liabilities and amount is not significant to the consolidated financial statements. In March 2016, the FASB issued update guidance codified within ASU-2016-09, “Compensation – Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting,” which amends the guidance on certain aspects of share-based payments to employees. The new guidance will require entities to recognize all income tax effects of awards in the income statement when the awards vest or are settled. The guidance requires the use of the modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. The standard was effective for the Company as of January 1, 2017. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements. In June of 2016, the FASB issued update guidance codified within ASU-2016-13, “Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments,” which amends the guidance for recognizing credit losses from an “incurred loss” methodology that delays recognition of credit losses until it is probable a loss has been incurred to an expected credit loss methodology. The guidance requires the use of the modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. The standard is effective for the Company as of January 1, 2020. The Company is currently evaluating the impact of the amended guidance and has not yet determined the effect of the standard on its ongoing financial reporting. In March 2017, the FASB issued updated guidance codified within ASU-2017-08, “Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20),” which is intended to enhance the accounting for the amortization of premiums for purchased callable debt securities. The standard is effective for the Company as of January 1, 2019. The Company does not believe the standard will have a material impact on the Company’s financials. In February 2018, the FASB issued guidance codified within ASU-2018-02, "Income Statement – Reporting Comprehensive Income (Topic 220), Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," to address the income tax accounting treatment of the standard tax effects within other comprehensive income due to the prohibition of backward tracing due to an income tax rate change that was initially recorded in other comprehensive income. This issue came about from the enactment of the Tax Cuts and Jobs Act on December 22, 2017 that changed the Company's income tax rate from 34% to 21%. The ASU changed current accounting whereby an entity may elect to reclassify the stranded tax effect from accumulated other comprehensive income to retained earnings. The ASU is effective for periods beginning after December 15, 2018 although early adoption is permitted. The Company adopted ASU-2018-02 in the first quarter of 2018 and reclassified its stranded tax credit of $53,000 within accumulated other comprehensive income to retained earnings at January 1, 2018. |
INVESTMENT SECURITIES |
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INVESTMENT SECURITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENT SECURITIES |
The amortized cost and estimated fair value of investment securities are as follows:
At December 31, 2018 and 2017, $32.2 million and $36.2 million of securities at carrying value, respectively, were pledged to the Federal Home Loan Bank (“FHLB”), as collateral for current and future advances. The Company had no investment security sales in 2018 or 2017. The maturity periods and weighted average yields of investment securities at December 31, 2018 and 2017 were as follows:
The amortized cost and fair value of investment securities by contractual maturities as of the periods presented were as shown below:
Actual maturities may differ from contractual maturities as borrowers or issuers have the right to prepay or call the investment securities. Changes in interest rates may also impact prepayments. The following tables show all securities that are in an unrealized loss position:
As of December 31, 2018 and 2017, there were 21 and 14 securities, respectively, in an unrealized loss position. Declines in the fair value of held-to-maturity and available-for-sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses. In estimating other than temporary impairment losses, management considers, among other things (i) the length of time and the extent to which the fair value has been less than cost (ii) the financial condition and near-term prospects of the issuer and (iii) the Company’s intent to sell an impaired security and if it is not more likely than not it will be required to sell the security before the recovery of its amortized basis. The unrealized losses are primarily due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the bonds approach their maturity date, repricing date or if market yields for such investments decline. Management does not believe any of the securities are impaired due to reasons of credit quality. Accordingly, as of December 31, 2018 and 2017, management believes the impairments detailed in the table above are temporary and no other than temporary impairment loss has been realized in the Company’s consolidated income statements. |
LOAN HELD FOR SALE |
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Dec. 31, 2018 | |||
LOAN HELD FOR SALE [Abstract] | |||
LOAN HELD FOR SALE |
SBA and Agriculture Loans As of December 31, 2018 and 2017, the Company had approximately $13.6 million and $18.9 million, respectively, of SBA loans included in loans held for sale. As of December 31, 2018 and 2017, the principal balance of SBA loans serviced for others was $7.2 million and $10.8 million, respectively. The Company’s agricultural lending program includes loans for agricultural land, agricultural operational lines, and agricultural term loans for crops, equipment and livestock. The primary products are supported by guarantees issued from the USDA, FSA, and the USDA Business and Industry loan program. As of December 31, 2018 and 2017, the Company had $34.8 million and $36.2 million of USDA loans included in loans held for sale, respectively. As of December 31, 2018 and 2017, the principal balance of USDA loans serviced for others was $2.0 million and $2.0 million, respectively. |
LOANS HELD FOR INVESTMENT |
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LOANS HELD FOR INVESTMENT [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOANS HELD FOR INVESTMENT |
The composition of the Company’s loans held for investment loan portfolio follows:
The following tables present the contractual aging of the recorded investment in past due held for investment loans by class of loans:
Allowance for Loan Losses The following table summarizes the changes in the allowance for loan losses:
As of December 31, 2018 and 2017, the Company had reserves for credit losses on undisbursed loans of $73,000 and $95,000 which were included in Other liabilities. The following tables summarize the changes in the allowance for loan losses by portfolio type:
The following tables present impairment method information related to loans and allowance for loan losses by loan portfolio segment:
Included in impaired loans are $3.1 million and $2.6 million of loans guaranteed by government agencies at December 31, 2018 and 2017, respectively. A valuation allowance is established for an impaired loan when the fair value of the loan is less than the recorded investment. In certain cases, portions of impaired loans are charged-off to realizable value instead of establishing a valuation allowance and are included, when applicable in the table above as “Impaired loans without specific valuation allowance under ASC 310.” The valuation allowance disclosed above is included in the allowance for loan losses reported in the consolidated balance sheets as of December 31, 2018 and 2017. The table below reflects recorded investment in loans classified as impaired:
The following table presents impaired loans by class:
The following table summarizes the average investment in impaired loans by class and the related interest income recognized:
The Company is not committed to lend significant additional funds on these impaired loans. The following table reflects the recorded investment in certain types of loans at the periods indicated:
The accrual of interest is discontinued when substantial doubt exists as to collectability of the loan; generally at the time the loan is 90 days delinquent. Any unpaid but accrued interest is reversed at that time. Thereafter, interest income is no longer recognized on the loan. Interest income may be recognized on impaired loans to the extent they are not past due by 90 days. Interest on nonaccrual loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all of the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The following table presents the composition of nonaccrual loans by class of loans:
Included in nonaccrual loans are $2.8 million and $2.4 million of loans guaranteed by government agencies at December 31, 2018 and 2017, respectively. The guaranteed portion of each SBA loan is repurchased from investors when those loans become past due 120 days by either CWB or the SBA directly. After the foreclosure and collection process is complete, the principal balance of loans repurchased by CWB are reimbursed by the SBA. Although these balances do not earn interest during this period, they generally do not result in a loss of principal to CWB; therefore a repurchase reserve has not been established related to these loans. The Company utilizes an internal asset classification system as a means of reporting problem and potential problem loans. Under the Company’s risk rating system, the Company classifies problem and potential problem loans as “Special Mention,” “Substandard,” “Doubtful” and “Loss”. For a detailed discussion on these risk classifications see “Note 1 Summary of Significant Accounting Policies – Allowance for Loan Losses and Provision for Loan Losses” of this Form 10-K. Loans that do not currently expose the Company to sufficient risk to warrant classification in one of the aforementioned categories but possess weaknesses that deserve management’s close attention are deemed to be Special Mention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position at some future date. Special Mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. Risk rates are updated as part of the normal loan monitoring process, at a minimum, annually. The following tables present gross loans by risk rating:
Troubled Debt Restructured Loan (TDR) A TDR is a loan on which the bank, for reasons related to a borrower’s financial difficulties, grants a concession to the borrower that the bank would not otherwise consider. The loan terms that have been modified or restructured due to a borrower’s financial situation include, but are not limited to, a reduction in the stated interest rate, an extension of the maturity or renewal of the loan at an interest rate below current market, a reduction in the face amount of the debt, a reduction in the accrued interest, extensions, deferrals, renewals and rewrites. The majority of the bank’s modifications are extensions in terms or deferral of payments which result in no lost principal or interest followed by reductions in interest rates or accrued interest. A TDR is also considered impaired. Generally, a loan that is modified at an effective market rate of interest may no longer be disclosed as a troubled debt restructuring in years subsequent to the restructuring if it is not impaired based on the terms specified by the restructuring agreement. The following tables summarize the financial effects of TDR loans by class for the periods presented:
The average rate concession was 73 basis points and 83 basis points for the twelve months ended December 31, 2018 and 2017, respectively. The average term extension in months was 151 and 127 for the twelve months ended December 31, 2018 and 2017, respectively. A TDR loan is deemed to have a payment default when the borrower fails to make two consecutive payments or the collateral is transferred to repossessed assets. The Company had no TDR’s with payment defaults for the twelve months ended December 31, 2018 or 2017. At December 31, 2018, there were no material loan commitments outstanding on TDR loans. Related Parties Principal stockholders, directors, and executive officers of the Company, together with companies they control and family members, are considered to be related parties. In the ordinary course of business, the Company has extended credit to these related parties. Federal banking regulations require that any such extensions of credit not be offered on terms more favorable than would be offered to non-related party borrowers of similar creditworthiness. The following table summarizes the aggregate activity in such loans:
None of these loans are past due, on nonaccrual status or have been restructured to provide a reduction or deferral of interest or principal because of deterioration in the financial position of the borrower. There were no loans to a related party that were considered classified loans at December 31, 2018 or 2017. Unfunded loan commitments outstanding with related parties total approximately $1.0 million at December 31, 2018 and $0.3 million at December 31 2017. |
PREMISES AND EQUIPMENT |
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PREMISES AND EQUIPMENT [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PREMISES AND EQUIPMENT |
Lease Obligations The Company leases certain premises under non-cancelable operating leases expiring through 2028. The following is a schedule of future minimum rental payments under these leases at December 31, 2018:
The Company leases the majority of its office locations and many of these leases contain multiple renewal options and provisions for increased rents. Total rent expense of $1.2 million, $1.2 million and $1.0 million is included in occupancy expenses for the years ended December 31, 2018, 2017 and 2016, respectively. Total depreciation expense of $0.8 million, $0.7 million, and $0.7 million is included in occupancy expenses for the each of the years ended December 31, 2018, 2017 and 2016, respectively. |
OTHER ASSETS ACQUIRED THROUGH FORECLOSURE |
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OTHER ASSETS ACQUIRED THROUGH FORECLOSURE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER ASSETS ACQUIRED THROUGH FORECLOSURE |
The following table summarizes the changes in other assets acquired through foreclosure:
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INCOME TAXES |
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INCOME TAXES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES |
The provision for income taxes consisted of the following:
The reconciliation between the statutory income tax rate and the Company’s effective tax rate follows:
The cumulative tax effects of the primary temporary differences are as shown in the following table:
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts and their respective tax basis including operating losses and tax credit carryforwards. Net deferred tax assets of $3.2 million at December 31, 2018 are reported in the consolidated balance sheet as a component of total assets. On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act tax reform legislation. This legislation makes significant change in U.S. tax law including a reduction in the corporate tax rates, changes to net operating loss carryforwards and carrybacks, and a repeal of the corporate alternative minimum tax. The legislation reduced the U.S. corporate tax rate from the current rate of 34% to 21%. As a result of the enacted law, the Company was required to revalue deferred tax assets and liabilities at the 21% rate. The revaluation resulted in $1.3 million income tax expense and a corresponding reduction in the net deferred tax asset. The other provisions of the Tax Cuts and Jobs Act did not have a material impact on the fiscal 2017 consolidated financial statements. Accounting standards Codification Topic 740, Income Taxes, requires that companies assess whether a valuation allowance should be established against their deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard. A valuation allowance is established for deferred tax assets if, based on weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets may not be realized. Management evaluates the Company’s deferred tax assets for recoverability using a consistent approach which considers the relative impact of negative and positive evidence, including the Company’s historical profitability and projections of future taxable income. The Company is required to establish a valuation allowance for deferred tax assets and record a charge to income if management determines, based on available evidence at the time the determination is made, that it is more likely than not that some portion or all of the deferred tax assets may not be realized. There was no valuation allowance on deferred tax assets at December 31, 2018 or December 31, 2017. The Company is subject to the provisions of ASC 740, Income Taxes (ASC 740). ASC 740 prescribes a more likely than not threshold for the financial statement recognition of uncertain tax positions. ASC 740 clarifies the accounting for income taxes by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. On a quarterly basis, the Company undergoes a process to evaluate whether income tax accruals are in accordance with ASC 740 guidance on uncertain tax positions. There were no uncertain tax positions at December 31, 2018. The Company is subject to income taxation in the United States and certain state jurisdictions. The Company’s federal and state income tax returns are filed on a consolidated basis. The Company is generally open to examination by tax authorities for the years 2014 and later. Although the Company is unable to determine the outcome under examination, it has evaluated whether there are any uncertain tax positions in accordance with ASC 740-10 and concluded that there are no significant uncertain tax positions requiring recognition in the financial statements. |
DEPOSITS |
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DEPOSITS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEPOSITS |
The table below summarizes deposits by type:
Of the total deposits at December 31, 2018 $393.2 million may be immediately withdrawn. Time certificates of deposit are the only deposits which have a specified maturity. The summary of the contractual maturities for all time deposits is as follows:
The Company through the bank is a member of the Certificate of Deposit Account Registry Service (“CDARS”), which provides Federal Deposit Insurance Corporation (“FDIC”) insurance for large deposits. Federal banking law and regulation place restrictions on depository institutions regarding brokered deposits as they pose increased liquidity risk for institutions that gather significant amounts of brokered deposits. At December 31, 2018 and 2017, the Company had $35.2 million and $32.1 million, respectively, of reciprocal CDARS deposits. The Company also accepts deposits from related parties which totaled $25.8 million at December 31, 2018 and $23.6 million at December 31, 2017. |
OTHER BORROWINGS |
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OTHER BORROWINGS |
The following table summarizes the Company’s FHLB advances by maturity date:
The Company through the bank has a blanket lien credit line with the FHLB. FHLB advances are collateralized in the aggregate by the Company’s eligible loans and securities. Total FHLB advances were $70.0 million and $50.0 million at December 31, 2018 and 2017, respectively, borrowed at fixed rates. The Company also had $125.0 million of letters of credit with FHLB at December 31, 2018 to secure public funds. At December 31, 2018, the Company had pledged to the FHLB, $32.2 million of securities and $269.4 million of loans. At December 31, 2018, the Company had $35.9 million available for additional borrowing. At December 31, 2017, the Company had pledged to the FHLB, $36.2 million of securities and $235.4 million of loans. At December 31, 2017, CWB had $63.9 million available for additional borrowing. Total FHLB interest expense for the years ended December 31, 2018, 2017 and 2016 was $1.0 million, $0.3 million and $30,000, respectively. Other Borrowing – In July of 2017, the Company entered into a one-year revolving line of credit agreement for up to $15.0 million. The Company must maintain a compensating deposit with the lender of 25% of the outstanding principal balance in a non-interest bearing deposit account which was $1.2 million and $1.7 million at December 31, 2018 and 2017, respectively. In addition, the Company must maintain a minimum debt service coverage ratio of 1.65, a minimum Tier 1 leverage ratio of 7.0% and a minimum total risked based capital ratio of 10.0%. At December 31, 2018, the line of credit balance was $5.0 million at a rate of 6.270%. Federal Reserve Bank –The Company has established a credit line with the FRB. Advances are collateralized in the aggregate by eligible loans for up to 28 days. There were no outstanding FRB advances as of December 31, 2018 and 2017. Available borrowing capacity was $103.8 million and $104.3 million as of December 31, 2018 and 2017, respectively. Federal Funds Purchased Lines– The Company has federal funds borrowing lines at correspondent banks totaling $20.0 million. There was no amount outstanding as of December 31, 2018 and 2017. |
COMMITMENTS AND CONTINGENCIES |
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COMMITMENTS AND CONTINGENCIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES |
Unfunded Commitments and Letters of Credit The Company is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. They involve, to varying degrees, elements of credit risk in excess of amounts recognized in the consolidated balance sheets. Lines of credit are obligations to lend money to a borrower. Credit risk arises when the borrowers’ current financial condition may indicate less ability to pay than when the commitment was originally made. In the case of standby letters of credit, the risk arises from the possibility of the failure of the customer to perform according to the terms of a contract. In such a situation, the third party might draw on the standby letter of credit to pay for completion of the contract and the Company would look to its customer to repay these funds with interest. To minimize the risk, the Company uses the same credit policies in making commitments and conditional obligations as it would for a loan to that customer. Standby letters of credit are commitments issued by the Company to guarantee the performance of a customer to a third party in borrowing arrangements. Typically, letters of credit issued have expiration dates within one year. A summary of the contractual amounts for unfunded commitments and letters of credit are as follows:
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Company enters into credit arrangements that generally provide for the termination of advances in the event of a covenant violation or other event of default. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the party. The commitments are collateralized by the same types of assets used as loan collateral. The Company has exposure to credit losses from unfunded commitments and letters of credit. As funds have not been disbursed on these commitments, they are not reported as loans outstanding. Credit losses related to these commitments are not included in the allowance for credit losses reported in Note 4, “Loans Held For Investment” of these Consolidated Financial Statements and are accounted for as a separate loss contingency as a liability. This loss contingency for unfunded loan commitments and letters of credit was $73,000 and $95,000 as of December 31, 2018 and 2017, respectively. Changes to this liability are adjusted through other non-interest expense. Concentrations of Lending Activities The Company’s lending activities are primarily driven by the customers served in the market areas where the Company has branch offices in the Central Coast of California. The Company monitors concentrations within selected categories such as geography and product. The Company makes manufactured housing, commercial, SBA, construction, commercial real estate and consumer loans to customers through branch offices located in the Company’s primary markets. The Company’s business is concentrated in these areas and the loan portfolio includes significant credit exposure to the manufactured housing and commercial real estate markets of these areas. As of December 31, 2018 and 2017, manufactured housing loans comprised 32.2% and 30.4%, respectively of total loans. As of December 31, 2018 and 2017, commercial real estate loans accounted for approximately 47.6% and 48.3% of total loans, respectively. Approximately 33.8% and 33.9% of these commercial real estate loans were owner occupied at December 31, 2018 and 2017, respectively. Substantially all of these loans are secured by first liens with an average loan to value ratios of 57.9% and 55.0% at December 31, 2018 and 2017, respectively. The Company was within established policy limits at December 31, 2018 and 2017. Loan Sales and Servicing The Company retains a certain level of risk relating to the servicing activities and retained interest in sold loans. In addition, during the period of time that the loans are held for sale, the Company is subject to various business risks associated with the lending business, including borrower default, foreclosure and the risk that a rapid increase in interest rates would result in a decline of the value of loans held for sale to potential purchasers. In connection with certain loan sales, the Company enters agreements which generally require the company to repurchase or substitute loans in the event of a breach of a representation or warranty made by the Company to the loan purchaser, any misrepresentation during the loan origination process or, in some cases, upon any fraud or early default on such loans. The Company has sold loans that are guaranteed or insured by government agencies for which the Company retained all servicing rights and responsibilities. The Company is required to perform certain monitoring functions in connection with these loans to preserve the guarantee by the government agency and prevent loss to the Company in the event of nonperformance by the borrower. Management believes that the Company is in compliance with these requirements. The outstanding balance of the loans serviced for others was approximately $9.2 million and $12.8 million at December 31, 2018 and 2017, respectively. Salary Continuation The Company has agreements with certain key officers, which provide for a monthly cash payment to the officers or beneficiaries in the event of death, disability or retirement, beginning in the month after the retirement date or death and extending for a period of fifteen years subject to vesting. The Company purchased life insurance policies of $5.0 million as an investment. The income from the policy investments will help fund this liability. At December 31, 2018 and 2017, the Company had accrued salary continuation liability for these agreements of $0.6 million and $0.5 million, respectively. The cash surrender value of the life insurance policies was $6.7 million at December 31, 2018, and is included in other assets. Other The Company is involved in various other litigation matters of a routine nature that are being handled and defended in the ordinary course of the Company’s business. In the opinion of Management, based in part on consultation with legal counsel, the resolution of these litigation matters will not have a material impact on the Company’s financial position or results of operations. |
STOCKHOLDERS' EQUITY |
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STOCKHOLDERS' EQUITY [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY |
Common Stock Warrant The Warrant issued as part of the TARP provided for the purchase of up to 521,158 shares of the common stock, at an exercise price of $4.49 per share (“Warrant Shares”). The Warrants were exercised for 300,401 shares of common stock prior to expiration in the fourth quarter of 2018. Common Stock During the years ended December 31, 2018 and 2017, the Company recorded $1.6 million and $1.3 million, respectively of dividends on common stock. On August 24, 2017, the Board of Directors extended the common stock repurchase program of up to $3.0 million for two additional years. Under this program the Company has repurchased 250,206 common stock shares for $2.0 million at an average price of $8.13 per share. There were no repurchases of common stock under this program during the year ended December 31, 2018. Stock Option Plans The Company has two stock option plans available for option grants. Stock options granted in 2018 generally have a vesting period of 5 years and a contractual life of 10 years. The Company recognizes compensation cost for options ratably over the requisite service period for all awards. As of December 31, 2018, 152,300 options were available for future grant. The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table. This model requires the input of highly subjective assumptions, changes to which can materially affect the fair value estimate. The expected volatility is based on the historical volatility of the stock of the Company over the expected life of the options. The risk-free rate for the periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The dividend rate assumption was the dividend yield at grant date. A summary of the assumptions used in calculating the fair value of option awards during the years ended December 31, 2018, 2017 and 2016 are as follows:
A summary of option activity under the plan is presented below:
As of December 31, 2018, 2017 and 2016, there was $0.7 million, $0.7 million and $0.7 million, respectively, of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Company’s plan. That cost is expected to be recognized over a weighted average period of 3.2 years, 3.3 years, and 3.5 years, respectively. The total intrinsic value of options exercised during the years ended December 31, 2018, 2017 and 2016, was $0.6 million, $0.5 million, and $0.3, respectively. The following table summarizes the change in unvested stock option shares during the year ended December 31, 2018:
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CAPITAL REQUIREMENTS |
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CAPITAL REQUIREMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CAPITAL REQUIREMENTS |
The Federal Reserve has adopted capital adequacy guidelines that are used to assess the adequacy of capital in supervising a bank holding company. In July 2013, the federal banking agencies approved the final rules (“Final Rules”) to establish a new comprehensive regulatory capital framework with a phase-in period beginning January 1, 2015 and ending January 1, 2019. The Final Rules implement the third installment of the Basel Accords (“Basel III”) regulatory capital reforms and changes required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) and substantially amend the regulatory risk-based capital rules applicable to the Company. Basel III redefines the regulatory capital elements and minimum capital ratios, introduces regulatory capital buffers above those minimums, revises rules for calculating risk-weighted assets and adds a new component of Tier 1 capital called Common Equity Tier 1, which includes common equity and retained earnings and excludes preferred equity. The following tables illustrates the Bank’s regulatory ratios and the Federal Reserve’s current adequacy guidelines as of December 31, 2018 and 2017. The Federal Reserve’s fully phased-in guidelines applicable in 2019 are also summarized.
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EMPLOYEE BENEFIT PLANS |
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EMPLOYEE BENEFIT PLANS [Abstract] | |||
EMPLOYEE BENEFIT PLANS |
401(k) Plan: The Company has a qualified 401(k) employee benefit plan for all eligible employees. Participants are able to defer up to a maximum of $18,500 (for those under 50 years of age in 2018) of their annual compensation. The Company may elect to match a discretionary amount each year, which was 3% of the participant’s eligible compensation. The Company’s total contribution was $0.3 million, $0.3 million, and $0.2 million for the years ended December 31, 2018, 2017 and 2016, respectively. Deferred Compensation Plans: A deferred compensation plan covers the executive officers. Under the plan, the Company pays each participant a percentage of their base salary plus interest. Vesting occurs at age 65. A liability is accrued for the obligation under these plans. The expense incurred for the deferred compensation for each of the last three years was $0.1 million resulting in a deferred compensation liability of $1.1 million and $0.9 million as of the year-end 2018 and 2017. The Company also provides an unfunded nonqualified deferred compensation arrangement to provide supplemental retirement benefits for the Participants which are a select group of management or highly compensated employees of the Company. The Participants may defer up to 30% of their base salary and bonus each plan year. The 36 month certificate of deposit rate is paid on the vested balance. |
FAIR VALUE MEASUREMENT |
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FAIR VALUE MEASUREMENT [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENT |
The fair value of an asset or liability is the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction occurring in the principal market for such asset or liability. ASC 820 establishes a fair value hierarchy that prioritizes the inputs and valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (“Level 1”) and the lowest priority to unobservable inputs (“Level 3”). The three levels of the fair value hierarchy under ASC 820 and the methods and assumptions used by the Company in estimating the fair value of its financial instruments are described in “Note 1. Summary of Significant Accounting Policies – Fair Value of Financial Instruments” of these Notes to the Consolidated Financial Statements. The following tables summarize the fair value of assets measured on a recurring basis:
Market valuations of our investment securities which are classified as level 2 are provided by an independent third party. The fair values are determined by using several sources for valuing fixed income securities. Their techniques include pricing models that vary based on the type of asset being valued and incorporate available trade, bid and other market information. In accordance with the fair value hierarchy, the market valuation sources include observable market inputs and are therefore considered Level 2 inputs for purposes of determining the fair values. On certain SBA loan sales, the Company retained interest only strips (“I/O strips”), which represent the present value of excess net cash flows generated by the difference between (a) interest at the stated rate paid by borrowers and (b) the sum of (i) pass-through interest paid to third-party investors and (ii) contractual servicing fees. I/O strips are classified as level 3 in the fair value hierarchy. The fair value is determined on a quarterly basis through a discounted cash flow analysis prepared by an independent third party using industry prepayment speeds. I/O strip valuation adjustments are recorded as additions or offsets to loan servicing income. Historically, the Company has elected to use the amortizing method for the treatment of servicing assets and has measured for impairment on a quarterly basis through a discounted cash flow analysis prepared by an independent third party using industry prepayment speeds. In connection with the sale of certain SBA and USDA loans the Company recorded servicing assets and elected to measure those assets at fair value in accordance with ASC 825-10. Significant assumptions in the valuation of servicing assets include estimated loan repayment rates, the discount rate, and servicing costs, among others. Servicing assets are classified as Level 3 measurements due to the use of significant unobservable inputs, as well as significant management judgment and estimation. The Company also has assets that under certain conditions are subject to measurement at fair value on a non-recurring basis. These assets include loans held for sale, foreclosed real estate and repossessed assets and loans that are considered impaired per generally accepted accounting principles. The following summarizes the fair value measurements of assets measured on a non-recurring basis:
The Company records certain loans at fair value on a non-recurring basis. When a loan is considered impaired an allowance for a loan loss is established. The fair value measurement and disclosure requirement applies to loans measured for impairment using the practical expedients method permitted by accounting guidance for impaired loans. Impaired loans are measured at an observable market price, if available or at the fair value of the loan’s collateral, if the loan is collateral dependent. The fair value of the loan’s collateral is determined by appraisals or independent valuation. When the fair value of the loan’s collateral is based on an observable market price or current appraised value, given the current real estate markets, the appraisals may contain a wide range of values and accordingly, the Company classifies the fair value of the impaired loans as a non-recurring valuation within Level 2 of the valuation hierarchy. For loans in which impairment is determined based on the net present value of cash flows, the Company classifies these as a non-recurring valuation within Level 3 of the valuation hierarchy. Loans held for sale are carried at the lower of cost or fair value. The fair value of loans held for sale is based on what secondary markets are currently offering for portfolios with similar characteristics or based on the agreed-upon sale price. As such, the Company classifies the fair value of loans held for sale as a non-recurring valuation within Level 2 of the fair value hierarchy. At December 31, 2018 and 2017, the Company had loans held for sale with an aggregate carrying value of $48.4 million and $55.1 million respectively. Foreclosed real estate and repossessed assets are carried at the lower of book value or fair value less estimated costs to sell. Fair value is based upon independent market prices obtained from certified appraisers or the current listing price, if lower. When the fair value of the collateral is based on a current appraised value, the Company reports the fair value of the foreclosed collateral as non-recurring Level 2. When a current appraised value is not available or if management determines the fair value of the collateral is further impaired, the Company reports the foreclosed collateral as non-recurring Level 3. FAIR VALUES OF FINANCIAL INSTRUMENTS The estimated fair values of financial instruments have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret market data to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. The estimated fair value of the Company’s financial instruments are as follows:
Interest rate risk The Company assumes interest rate risk (the risk to the Company’s earnings and capital from changes in interest rate levels) as a result of its normal operations. As a result, the fair values of the Company’s financial instruments as well as its future net interest income will change when interest rate levels change and that change may be either favorable or unfavorable to the Company. Interest rate risk exposure is measured using interest rate sensitivity analysis to determine the change in the net portfolio value and net interest income resulting from hypothetical changes in interest rates. If potential changes to net portfolio value and net interest income resulting from hypothetical interest rate changes are not within the limits established by the Board of Directors, the Board of Directors may direct management to adjust the asset and liability mix to bring interest rate risk within board-approved limits. As of December 31, 2018, the Company’s interest rate risk profile was within Board-approved limits. The Company’s subsidiary bank has an Asset and Liability Management Committee charged with managing interest rate risk within Board approved limits. Such limits are structured to prohibit an interest rate risk profile that is significantly asset or liability sensitive. Fair value of commitments Loan commitments on which the committed interest rates were less than the current market rate are insignificant at December 31, 2018 and 2017. The estimated fair value of standby letters of credit outstanding at December 31, 2018 was also insignificant. |
ACCUMULATED OTHER COMPREHENSIVE INCOME |
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ACCUMULATED OTHER COMPREHENSIVE INCOME [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME |
The following table summarizes the changes in other comprehensive income by component, net of tax for the period indicated:
There were no reclassifications out of accumulated other comprehensive income for the years ended December 31, 2018, 2017 and 2016. |
PARENT COMPANY FINANCIAL INFORMATION |
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PARENT COMPANY FINANCIAL INFORMATION [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PARENT COMPANY FINANCIAL INFORMATION |
The condensed financial statements of the holding company are presented in the following tables: COMMUNITY WEST BANCSHARES Condensed Balance Sheets
COMMUNITY WEST BANCSHARES Condensed Income Statements
COMMUNITY WEST BANCSHARES Condensed Statements of Cash Flows
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QUARTERLY FINANCIAL DATA (UNAUDITED) |
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QUARTERLY FINANCIAL DATA (UNAUDITED) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
QUARTERLY FINANCIAL DATA (UNAUDITED) |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Nature of Operations | Nature of Operations Community West Bancshares (“CWBC”), incorporated under the laws of the state of California, is a bank holding company providing full service banking through its wholly-owned subsidiary Community West Bank, N.A. (“CWB” or the “Bank”). These entities are collectively referred to herein as the “Company”. |
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Basis of Presentation | Basis of Presentation The accounting and reporting policies of the Company are in accordance with accounting principles generally accepted in the United States (“GAAP”) and conform to practices within the financial services industry. The accounts of the Company and its consolidated subsidiary are included in these Consolidated Financial Statements. All significant intercompany balances and transactions have been eliminated. |
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant changes in the near term relate to the determination of the allowance for loan losses and fair value of investment securities available for sale. Although Management believes these estimates to be reasonably accurate, actual amounts may differ. In the opinion of Management, all adjustments considered necessary have been reflected in the financial statements during their preparation. |
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Reclassifications | Reclassifications Certain amounts in the consolidated financial statements as of and for the years ended December 31, 2017 and 2016 have been reclassified to conform to the current presentation. The reclassifications have no effect on net income or stockholders’ equity as previously reported. |
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Business Segments | Business Segments Reportable business segments are determined using the “management approach” and are intended to present reportable segments consistent with how the chief operating decision maker organizes segments within the company for making operating decisions and assessing performance. As of December 31, 2018, 2017 and 2016, the Company had only one reportable business segment. |
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Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks (including cash items in process of clearing), and federal funds sold. Cash flows from loans originated by the Company and deposits are reported net. The Company maintains amounts due from banks, which at times may exceed federally insured limits. The Company has not experienced any losses in such accounts. |
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Cash Reserve Requirement | Cash Reserve Requirement Depository institutions are required by law to maintain reserves against their transaction deposits. The reserves must be held in cash or with the Federal Reserve Bank (“FRB”). The amount of the reserve varies by bank as the bank is permitted to meet this requirement by maintaining the specified amount as an average balance over a two-week period. The total reserve balance requirement was approximately $2.9 million and $3.6 million as of December 31, 2018 and 2017. |
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Investment Securities | Investment Securities Investment securities may be classified as held-to-maturity (“HTM”), available-for-sale (“AFS”) or trading. The appropriate classification is initially decided at the time of purchase. Securities classified as held-to-maturity are those debt securities the Company has both the intent and ability to hold to maturity regardless of changes in market conditions, liquidity needs or general economic conditions. These securities are carried at amortized cost. The sale of a security within three months of its maturity date or after the majority of the principal outstanding has been collected is considered a maturity for purposes of classification and disclosure. Securities classified as AFS or trading are reported as an asset on the Consolidated Balance Sheets at their estimated fair value. As the fair value of AFS securities changes, the changes are reported net of income tax as an element of other comprehensive income (“OCI”), except for impaired securities. When AFS securities are sold, the unrealized gain or loss is reclassified from OCI to non-interest income. The changes in the fair values of trading securities are reported in non-interest income. Securities classified as AFS are debt securities the Company intends to hold for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as AFS would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, decline in credit quality, and regulatory capital considerations. The Company has its AGM Stock securities classified as measured at fair value. The fair value changes are adjusted through non-interest income monthly. Interest income is recognized based on the coupon rate and increased by accretion of discounts earned or decreased by the amortization of premiums paid over the contractual life of the security using the interest method. For mortgage-backed securities, estimates of prepayments are considered in the constant yield calculations. In estimating whether there are any other than temporary impairment losses, management considers 1) the length of time and the extent to which the fair value has been less than amortized cost, 2) the financial condition and near term prospects of the issuer, 3) the impact of changes in market interest rates, and 4) the intent and ability of the Company to retain its investment for a period of time sufficient to allow for any anticipated recovery in fair value and it is not more likely than not the Company would be required to sell the security. Declines in the fair value of individual debt securities available for sale that are deemed to be other than temporary are reflected in earnings when identified. The fair value of the debt security then becomes the new cost basis. For individual debt securities where the Company does not intend to sell the security and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, the other than temporary decline in fair value of the debt security related to 1) credit loss is recognized in earnings, and 2) market or other factors is recognized in other comprehensive income or loss. Credit loss is recorded if the present value of cash flows is less than amortized cost. For individual debt securities where the Company intends to sell the security or more likely than not will not recover all of its amortized cost, the other than temporary impairment is recognized in earnings equal to the entire difference between the securities cost basis and its fair value at the balance sheet date. For individual debt securities for which a credit loss has been recognized in earnings, interest accruals and amortization and accretion of premiums and discounts are suspended when the credit loss is recognized. Interest received after accruals have been suspended is recognized on a cash basis. |
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Federal Home Loan Bank ("FHLB") and Federal Reserve Bank ("FRB") Stock | Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) Stock The Company’s subsidiary bank is a member of the Federal Home Loan Bank (“FHLB”) system and maintains an investment in capital stock of the FHLB. The bank also maintains an investment in FRB stock. These investments are considered equity securities with no actively traded market. These investments are carried at cost, which is equal to the value at which they may be redeemed. The dividend income received from the stock is reported in interest income. We conduct a periodic review and evaluation of our FHLB stock to determine if any impairment exists. No impairment existed in the years ended December 31, 2018 or 2017. |
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Servicing Assets | Servicing Assets The guaranteed portion of certain Small Business Administration (“SBA”) loans can be sold into the secondary market. Servicing assets are recognized as separate assets when loans are sold with servicing retained. Servicing assets are amortized in proportion to, and over the period of, estimated future net servicing income. The Company uses industry prepayment statistics and its own prepayment experience in estimating the expected life of the loans. Management evaluates its servicing assets for impairment quarterly. Servicing assets are evaluated for impairment based upon the fair value of the rights as compared to amortized cost. Fair value is determined using discounted future cash flows calculated on a loan-by-loan basis and aggregated by predominate risk characteristics. The initial servicing asset and resulting gain on sale are calculated based on the difference between the best actual par and premium bids on an individual loan basis. |
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Loans Held for Sale | Loans Held For Sale Loans which are originated and intended for sale in the secondary market are carried at the lower of cost or estimated fair value determined on an aggregate basis. Valuation adjustments, if any are recognized through a valuation allowance by charges to lower of cost or fair value provision. Loans held for sale are mostly comprised of SBA and commercial agriculture. In 2015, the Company exited from originating single family residential loans for sale. The Company did not incur any lower of cost or fair value provision in the years ended December 31, 2018, 2017 and 2016. |
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Loans Held for Investment and Interest and Fees From Loans | Loans Held for Investment and Interest and Fees from Loans Loans are recognized at the principal amount outstanding, net of unearned income, loan participations and amounts charged off. Unearned income includes deferred loan origination fees reduced by loan origination costs. Unearned income on loans is amortized to interest income over the life of the related loan using the level yield method. Interest income on loans is accrued daily using the effective interest method and recognized over the terms of the loans. Loan fees collected for the origination of loans less direct loan origination costs (net deferred loan fees) are amortized over the contractual life of the loan through interest income. If the loan has scheduled payments, the amortization of the net deferred loan fee is calculated using the interest method over the contractual life of the loan. If the loan does not have scheduled payments, such as a line of credit, the net deferred loan fee is recognized as interest income on a straight-line basis over the contractual life of the loan commitment. Commitment fees based on a percentage of a customer’s unused line of credit and fees related to standby letters of credit are recognized over the commitment period. When loans are repaid, any remaining unamortized balances of unearned fees, deferred fees and costs and premiums and discounts paid on purchased loans are accounted for though interest income. Nonaccrual loans: For all loan types, when a borrower discontinues making payments as contractually required by the note, the Company must determine whether it is appropriate to continue to accrue interest. Generally, the Company places loans in a nonaccrual status and ceases recognizing interest income when the loan has become delinquent by more than 90 days or when Management determines that the full repayment of principal and collection of interest is unlikely. The Company may decide to continue to accrue interest on certain loans more than 90 days delinquent if they are well secured by collateral and in the process of collection. Other personal loans are typically charged off no later than 120 days delinquent. For all loan types, when a loan is placed on nonaccrual status, all interest accrued but uncollected is reversed against interest income in the period in which the status is changed. Subsequent payments received from the customer are applied to principal and no further interest income is recognized until the principal has been paid in full or until circumstances have changed such that payments are again consistently received as contractually required. The Company occasionally recognizes income on a cash basis for non-accrual loans in which the collection of the remaining principal balance is not in doubt. Impaired loans: A loan is considered impaired when, based on current information; it is probable that the Company will be unable to collect the scheduled payments of principal and/or interest under the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and/or interest payments. Loans that experience insignificant payment delays or payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays or payment shortfalls on a case-by-case basis. When determining the possibility of impairment, management considers the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record and the amount of the shortfall in relation to the principal and interest owed. For collateral-dependent loans, the Company uses the fair value of collateral method to measure impairment. The collateral-dependent loans that recognize impairment are charged down to the fair value less costs to sell. All other loans are measured for impairment either based on the present value of future cash flows or the loan’s observable market price. Troubled debt restructured loan (“TDR”): A TDR is a loan on which the Company, for reasons related to the borrower’s financial difficulties, grants a concession to the borrower that the Company would not otherwise consider. These concessions included but are not limited to term extensions, rate reductions and principal reductions. Forgiveness of principal is rarely granted and modifications for all classes of loans are predominately term extensions. A TDR loan is also considered impaired. Generally, a loan that is modified at an effective market rate of interest may no longer be disclosed as a troubled debt restructuring in years subsequent to the restructuring if it is not impaired based on the terms specified by the restructuring agreement. |
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Allowance for Loan Losses and Provision for Loan Losses | Allowance for Loan Losses and Provision for Loan Losses The Company maintains a detailed, systematic analysis and procedural discipline to determine the amount of the allowance for loan losses (“ALL”). The ALL is based on estimates and is intended to be appropriate to provide for probable losses inherent in the loan portfolio. This process involves deriving probable loss estimates that are based on migration analysis and historical loss rates, in addition to qualitative factors that are based on management’s judgment. The migration analysis and historical loss rate calculations are based on the annualized loss rates utilizing a twelve-quarter loss history. Migration analysis is utilized for the Commercial Real Estate (“CRE”), Commercial, Commercial Agriculture, Small Business Administration (“SBA”), Home Equity Line of Credit (“HELOC”), Single Family Residential, and Consumer portfolios. The historical loss rate method is utilized primarily for the Manufactured Housing portfolio. The migration analysis takes into account the risk rating of loans that are charged off in each loan category. Loans that are considered Doubtful are typically charged off. The following is a description of the characteristics of loan ratings. Loan ratings are reviewed as part of our normal loan monitoring process, but, at a minimum, updated on an annual basis. Substantially Risk Free – These borrowers have virtually no probability of default or loss given default and present no identifiable or potential adverse risk to the Company. Documented repayment is either backed by the full faith and credit of the United States Government, or secured by cash collateral at a ratio of 115% of the principal borrowed. The collateral must be in the possession of the Company and free from potential claim. In addition, these credits will conform in all aspects to established loan policies and procedures, laws, rules, and regulations. Nominal Risk – This rating is for the highest quality borrowers with nominal probability of default or loss given default from the transaction. Typically this is a borrower with a well-established record of financial performance, a strong equity position, abundant liquidity and excellent debt service ability. The Borrower’s financial outlook is stable due to a broad range of operations or products and is able to weather an economic downturn without significant impact to liquidity or net worth. Typically, this borrower will be publicly owned or have access to public debt or equity, all investment grade. In addition, these credits will conform in all aspects to established loan policies and procedures, laws, rules, and regulations. Transaction can include marketable securities as collateral, properly margined. Pass/Management Attention Risk – The loans is the three remaining pass categories range from minimal risk to moderate risk to management attention risk. Loans rated in the first two categories are acceptable loans, appropriately underwritten, bearing an ordinary risk of loss to the Company. Loans in the minimal and moderate risk categories are loans to quality borrowers with financial statements presenting a good primary source as well as an adequate secondary source of repayment. In the case of individuals, borrowers with this rating are quality borrowers demonstrating a reasonable level of secure income, a net worth adequate to support the loan and presenting a good primary source as well as an adequate secondary source of repayment. An asset in the management attention risk category indicates that although the borrower meets the criteria for a rating of acceptable risk or better, the credit possesses an identified and elevated risk level that should be resolved in a short period of time. Technical risks include, but are not limited to, inadequate or improperly executed documentation, which may be material, serious delays in the submission of financial reporting or covenant violations that are not indicative of a protracted trend. Special Mention - A Special Mention loan has potential weaknesses that require management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution's credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. Substandard - A Substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. These loans have a well-defined weakness or weaknesses that jeopardize full collection of amounts due. They are characterized by the distinct possibility that the Company will sustain some loss if the borrower’s deficiencies are not corrected. Doubtful - A loan classified Doubtful has all the weaknesses inherent in one classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors, which may work to the advantage and strengthening of the loan, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition or liquidation procedures, capital injection, perfecting liens on additional collateral and refinancing plans. Loss - Loans classified Loss are considered uncollectible and of such little value that their continuance as bankable loans is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this loan even though partial recovery may be realized in the future. Losses are taken in the period in which they are considered uncollectible. The Company’s ALL is maintained at a level believed appropriate by management to absorb known and inherent probable losses on existing loans. The allowance is charged for losses when management believes that full recovery on the loan is unlikely. The following is the Company’s policy regarding charging off loans. Commercial, CRE and SBA Loans Charge-offs on these loan categories are taken as soon as all or a portion of any loan balance is deemed to be uncollectible. A loan is considered impaired when, based on current information, it is probable that the Company will be unable to collect the scheduled payments of principal and/or interest under the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and/or interest payments. Loans that experience insignificant payment delays or payment shortfalls generally are not classified as impaired. Generally, loan balances are charged-down to the fair value of the collateral, if, based on a current assessment of the value, an apparent deficiency exists. In the event there is no perceived equity, the loan is charged-off in full. Unsecured loans which are delinquent over 90 days are also charged-off in full. Single Family Real Estate, HELOC’s and Manufactured Housing Loans Consumer loans and residential mortgages secured by one-to-four family residential properties, HELOC and manufactured housing loans in which principal or interest is due and unpaid for 90 days, are evaluated for impairment. Loan balances are charged-off to the fair value of the property, less estimated selling costs, if, based on a current appraisal, an apparent deficiency exists. In the event there is no perceived equity, the loan is generally fully charged-off. Consumer Loans All consumer loans (excluding real estate mortgages, HELOCs and savings secured loans) are charged-off or charged-down to net recoverable value before becoming 120 days or five payments delinquent. The ALL calculation for the different loan portfolios is as follows:
The Company evaluates and individually assesses for impairment loans classified as substandard or doubtful in addition to loans either on nonaccrual, considered a TDR or when other conditions exist which lead management to review for possible impairment. Measurement of impairment on impaired loans is determined on a loan-by-loan basis and in total establishes a specific reserve for impaired loans. The amount of impairment is determined by comparing the recorded investment in each loan with its value measured by one of three methods:
Interest income is not recognized on impaired loans except for limited circumstances in which a loan, although impaired, continues to perform in accordance with the loan contract and the borrower provides financial information to support maintaining the loan on accrual. The Company determines the appropriate ALL on a monthly basis. Any differences between estimated and actual observed losses from the prior month are reflected in the current period in determining the appropriate ALL and adjusted as deemed necessary. The review of the appropriateness of the allowance takes into consideration such factors as concentrations of credit, changes in the growth, size and composition of the loan portfolio, overall and individual portfolio quality, review of specific problem loans, collateral, guarantees and economic and environmental conditions that may affect the borrowers' ability to pay and/or the value of the underlying collateral. Additional factors considered include: geographic location of borrowers, changes in the Company’s product-specific credit policy and lending staff experience. These estimates depend on the outcome of future events and, therefore, contain inherent uncertainties. Another component of the ALL considers qualitative factors related to non-impaired loans. The qualitative portion of the allowance on each of the loan pools is based on changes in any of the following factors:
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Off Balance Sheet and Credit Exposure | Off Balance Sheet and Credit Exposure In the ordinary course of business, the Company has entered into off-balance sheet financial instruments consisting of commitments to extend credit and standby letters of credit. Such financial instruments are recorded in the consolidated financial statements when they are funded. They involve, to varying degrees, elements of credit risk in excess of amounts recognized in the consolidated balance sheets. Losses would be experienced when the Company is contractually obligated to make a payment under these instruments and must seek repayment from the borrower, which may not be as financially sound in the current period as they were when the commitment was originally made. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The Company enters into credit arrangements that generally provide for the termination of advances in the event of a covenant violation or other event of default. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the party. The commitments are collateralized by the same types of assets used as loan collateral. As with outstanding loans, the Company applies qualitative factors and utilization rates to its off-balance sheet obligations in determining an estimate of losses inherent in these contractual obligations. The estimate for loan losses on off-balance sheet instruments is included within other liabilities and the charge to income that establishes this liability is included in non-interest expense. |
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Premises and Equipment | Premises and Equipment Premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the terms of the leases or the estimated useful lives of the improvements, whichever is shorter. Generally, the estimated useful lives of other items of premises and equipment are as follows:
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Foreclosed Real Estate and Repossessed Assets | Foreclosed Real Estate and Repossessed Assets Foreclosed real estate and other repossessed assets are recorded at fair value at the time of foreclosure less estimated costs to sell. Any excess of loan balance over the fair value less estimated costs to sell of the other assets is charged-off against the allowance for loan losses. Any excess of the fair value less estimated costs to sell over the loan balance is recorded as a loan loss recovery to the extent of the loan loss previously charged-off against the allowance for loan losses; and, if greater, recorded as a gain on foreclosed assets. Subsequent to the legal ownership date, the Company periodically performs a new valuation and the asset is carried at the lower of carrying amount or fair value less estimated costs to sell. Operating expenses or income, and gains or losses on disposition of such properties, are recorded in current operations. |
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Income Taxes | Income Taxes The Company uses the asset and liability method, which recognizes an asset or liability representing the tax effects of future deductible or taxable amounts that have been recognized in the consolidated financial statements. Due to tax regulations, certain items of income and expense are recognized in different periods for tax return purposes than for financial statement reporting. These items represent “temporary differences.” Deferred income taxes are recognized for the tax effect of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is established for deferred tax assets if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets may not be realized. Any interest or penalties assessed by the taxing authorities is classified in the financial statements as income tax expense. Deferred tax assets are included in other assets on the consolidated balance sheets. Management evaluates the Company’s deferred tax asset for recoverability using a consistent approach which considers the relative impact of negative and positive evidence, including the Company’s historical profitability and projections of future taxable income. The Company is required to establish a valuation allowance for deferred tax assets and record a charge to income if management determines, based on available evidence at the time the determination is made, that it is more likely than not that some portion or all of the deferred tax assets may not be realized. The Company is subject to the provisions of ASC 740, Income Taxes (“ASC 740”). ASC 740 prescribes a more likely than not threshold for the financial statement recognition of uncertain tax positions. ASC 740 clarifies the accounting for income taxes by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. On a quarterly basis, the Company evaluates income tax accruals in accordance with ASC 740 guidance on uncertain tax positions. |
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Bank Owned Life Insurance | Bank Owned Life Insurance Bank owned life insurance is stated at its cash surrender value with changes recorded in other non-interest income in the consolidated income statements. The cash surrender value of the underlying policies was $6.7 million and $4.5 million as of December 31, 2018 and 2017, respectively. There are no loans offset against cash surrender values, and there are no restrictions as to the use of proceeds. |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities. FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) established a framework for measuring fair value using a three-level valuation hierarchy for disclosure of fair value measurement. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset as of the measurement date. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would consider in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs, as follows:
The availability of observable inputs varies based on the nature of the specific financial instrument. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure. When market assumptions are available, ASC 820 requires the Company to make assumptions regarding the assumptions that market participants would use to estimate the fair value of the financial instrument at the measurement date. FASB ASC 825, Financial Instruments (“ASC 825”) requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value. Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction at December 31, 2018 or 2017. The estimated fair value amounts for December 31, 2018 and 2017 have been measured as of period-end, and have not been reevaluated or updated for purposes of these consolidated financial statements subsequent to those dates. As such, the estimated fair values of these financial instruments subsequent to the reporting date may be different than the amounts reported at the period-end. The information presented in Note 15, “Fair Value Measurement,” should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only required for a limited portion of the Company’s assets and liabilities. Due to the wide range of valuation techniques and the degree of subjectivity used in making the estimate, comparisons between the Company’s disclosures and those of other companies or banks may not be meaningful. The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments: Cash and cash equivalents The carrying amounts reported in the consolidated balance sheets for cash and due from banks approximate their fair value. Money market investments The carrying amounts reported in the consolidated balance sheets for money market investments approximate their fair value. Investment securities The fair value of Farmer Mac class A stock is based on quoted market prices and are categorized as Level 1 of the fair value hierarchy. The fair value of other investment securities were determined based on matrix pricing. Matrix pricing is a mathematical technique that utilizes observable market inputs including, for example, yield curves, credit ratings and prepayment speeds. Fair values determined using matrix pricing are generally categorized as Level 2 in the fair value hierarchy. FRB and FHLB stock CWB is a member of the FHLB system and maintains an investment in capital stock of the FHLB. CWB also maintain an investment in FRB stock. These investments are carried at cost since no ready market exists for them, and they have no quoted market value. The Company conducts a periodic review and evaluation of our FHLB stock to determine if any impairment exists. The fair values have been categorized as Level 2 in the fair value hierarchy. Loans Fair value for loans is estimated based on discounted cash flows using interest rates currently being offered for loans with similar terms to borrowers with similar credit quality with adjustments that the Company believes a market participant would consider in determining fair value based on a third party independent valuation. As a result, the fair value for loans is categorized as Level 2 in the fair value hierarchy. Fair values of impaired loans using a discounted cash flow method to measure impairment have been categorized as Level 3. Deposit liabilities The amount payable at demand at report date is used to estimate the fair value of demand and savings deposits. The estimated fair values of fixed-rate time deposits are determined by discounting the cash flows of segments of deposits that have similar maturities and rates, utilizing a discount rate that approximates the prevailing rates offered to depositors as of the measurement date. The fair value measurement of deposit liabilities is categorized as Level 2 in the fair value hierarchy. Federal Home Loan Bank advances and other borrowings The fair values of the Company’s borrowings are estimated using discounted cash flow analyses, based on the market rates for similar types of borrowing arrangements. The other borrowings have been categorized as Level 3 in the fair value hierarchy. The FHLB advances have been categorized as Level 2 in the fair value hierarchy. Off-balance sheet instruments Fair values for the Company’s off-balance sheet instruments (lending commitments and standby letters of credit) are based on quoted fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. |
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Earnings Per Share | Earnings Per Share Basic earnings per common share is computed using the weighted average number of common shares outstanding for the period divided into the net income (loss) available to common shareholders. Diluted earnings per share include the effect of all dilutive potential common shares for the period. Potentially dilutive common shares include stock options and warrants. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued guidance codified within ASU 2014-09, “Revenue Recognition - Revenue from Contracts with Customers,” which amends the guidance in former Topic 605, Revenue Recognition. The new revenue recognition standard will supersede virtually all revenue guidance in U.S. GAAP, including industry specific guidance. The guidance in this Update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards. ASU 2014-09 is effective for the Company for annual reporting periods beginning after December 15, 2016. In August 2015, this effective date was extended for the Company to December 15, 2017. The Company may elect to apply the amendments of this Update using one of the following two methods: 1) retrospectively to each prior reporting period presented or 2) retrospectively with the cumulative effect of initially applying this Update recognized at the date of initial application. Our revenue is comprised of net interest income on financial assets and liabilities, which is explicitly excluded from the scope of the new guidance, and noninterest income. The contracts that are in scope of the guidance are primarily related to service charges on deposit accounts, cardholder income, and other service charge fees. The Company adopted this guidance as of January 1, 2018 which did not have a material impact on the Company's Consolidated Financial Statements. In January 2016, the FASB issued guidance codified within ASU 2016-01, “Financial Instruments – Overall, Subtopic 825-10: Recognition and Measurement of Financial Assets and Financial Liabilities,” which amends certain guidance on classification and measurement of financial instruments. The update is intended to enhance the reporting model for financial instruments to provide users of financial instruments with more decision-useful information and addresses certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 is effective for the Company for annual reporting periods beginning after December 15, 2017. The Company has evaluated the impact of the provisions in this standard on the Company's Consolidated Financial Statements. The Company's adoption of this guidance did not have a material impact on the Company's Consolidated Financial Statements. In February 2016, the FASB amended its standards with respect to the accounting for leases. The amended guidance serves to replace all current U.S. GAAP guidance on this topic and requires that an operating lease be recognized on the statement of financial condition as a “right-to-use” asset along with a corresponding liability representing the rent obligation. Key aspects of current lessor accounting remain unchanged from existing guidance. This standard is expected to result in an increase to assets and liabilities recognized and, therefore, increase risk-weighted assets for regulatory capital purposes. The guidance requires the use of the modified retrospective transition approach for existing leases that have not expired before the date of initial application and will become effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The standard is effective for the Company as of January 1, 2019. The Company has evaluated the impact of the amended guidance on the Company’s Consolidated Financial Statements and determined the impact to Assets and Liabilities and amount is not significant to the consolidated financial statements. In March 2016, the FASB issued update guidance codified within ASU-2016-09, “Compensation – Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting,” which amends the guidance on certain aspects of share-based payments to employees. The new guidance will require entities to recognize all income tax effects of awards in the income statement when the awards vest or are settled. The guidance requires the use of the modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. The standard was effective for the Company as of January 1, 2017. The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements. In June of 2016, the FASB issued update guidance codified within ASU-2016-13, “Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments,” which amends the guidance for recognizing credit losses from an “incurred loss” methodology that delays recognition of credit losses until it is probable a loss has been incurred to an expected credit loss methodology. The guidance requires the use of the modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. The standard is effective for the Company as of January 1, 2020. The Company is currently evaluating the impact of the amended guidance and has not yet determined the effect of the standard on its ongoing financial reporting. In March 2017, the FASB issued updated guidance codified within ASU-2017-08, “Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20),” which is intended to enhance the accounting for the amortization of premiums for purchased callable debt securities. The standard is effective for the Company as of January 1, 2019. The Company does not believe the standard will have a material impact on the Company’s financials. In February 2018, the FASB issued guidance codified within ASU-2018-02, "Income Statement – Reporting Comprehensive Income (Topic 220), Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," to address the income tax accounting treatment of the standard tax effects within other comprehensive income due to the prohibition of backward tracing due to an income tax rate change that was initially recorded in other comprehensive income. This issue came about from the enactment of the Tax Cuts and Jobs Act on December 22, 2017 that changed the Company's income tax rate from 34% to 21%. The ASU changed current accounting whereby an entity may elect to reclassify the stranded tax effect from accumulated other comprehensive income to retained earnings. The ASU is effective for periods beginning after December 15, 2018 although early adoption is permitted. The Company adopted ASU-2018-02 in the first quarter of 2018 and reclassified its stranded tax credit of $53,000 within accumulated other comprehensive income to retained earnings at January 1, 2018. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||||||||||||||||||||||||||||||||||||
Estimated Useful Lives of Other Items of Premises and Equipment | Generally, the estimated useful lives of other items of premises and equipment are as follows:
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INVESTMENT SECURITIES (Tables) |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENT SECURITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost and Estimated Fair Value of Investment Securities | The amortized cost and estimated fair value of investment securities are as follows:
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Maturity Periods and Weighted Average Yields of Investment Securities | The maturity periods and weighted average yields of investment securities at December 31, 2018 and 2017 were as follows:
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Amortized Cost and Fair Value of Investment Securities by Contractual Maturities | The amortized cost and fair value of investment securities by contractual maturities as of the periods presented were as shown below:
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Fair Value and Unrealized Losses of Securities in Unrealized Loss Position | The following tables show all securities that are in an unrealized loss position:
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LOANS HELD FOR INVESTMENT (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOANS HELD FOR INVESTMENT [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Composition of Loans Held for Investment Loan Portfolio | The composition of the Company’s loans held for investment loan portfolio follows:
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Contractual Aging of Recorded Investment in Past Due Held for Investment Loans by Class of Loans | The following tables present the contractual aging of the recorded investment in past due held for investment loans by class of loans:
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Analysis of Allowance for Loan Losses for Loans Held for Investment | The following table summarizes the changes in the allowance for loan losses:
As of December 31, 2018 and 2017, the Company had reserves for credit losses on undisbursed loans of $73,000 and $95,000 which were included in Other liabilities. The following tables summarize the changes in the allowance for loan losses by portfolio type:
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Impairment Method Information Related to Loans and Allowance for Loan Losses by Loan Portfolio Segment | The following tables present impairment method information related to loans and allowance for loan losses by loan portfolio segment:
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Recorded Investment in Loans Classified as Impaired | The table below reflects recorded investment in loans classified as impaired:
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Impaired Loans by Class | The following table presents impaired loans by class:
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Average Investment in Impaired Loans by Class and Related Interest Income Recognized | The following table summarizes the average investment in impaired loans by class and the related interest income recognized:
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Recorded Investment in Certain Types of Loans | The following table reflects the recorded investment in certain types of loans at the periods indicated:
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Composition of Net Nonaccrual Loans | The following table presents the composition of nonaccrual loans by class of loans:
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Gross Loans by Risk Rating | The following tables present gross loans by risk rating:
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Troubled Debt Restructurings | The following tables summarize the financial effects of TDR loans by class for the periods presented:
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Aggregate Activity with Related Parties | The following table summarizes the aggregate activity in such loans:
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PREMISES AND EQUIPMENT (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PREMISES AND EQUIPMENT [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premises and Equipment |
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Future Minimum Rental Payments under Non-Cancelable Leases | The Company leases certain premises under non-cancelable operating leases expiring through 2028. The following is a schedule of future minimum rental payments under these leases at December 31, 2018:
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OTHER ASSETS ACQUIRED THROUGH FORECLOSURE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER ASSETS ACQUIRED THROUGH FORECLOSURE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets Acquired through Foreclosure | The following table summarizes the changes in other assets acquired through foreclosure:
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INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for Income Taxes | The provision for income taxes consisted of the following:
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Reconciliation between Statutory Income Tax Rate and Effective Tax Rate | The reconciliation between the statutory income tax rate and the Company’s effective tax rate follows:
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Cumulative Tax Effects of Primary Temporary Differences | The cumulative tax effects of the primary temporary differences are as shown in the following table:
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DEPOSITS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEPOSITS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Deposits | The table below summarizes deposits by type:
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Summary of Contractual Maturities for All Time Deposits | The summary of the contractual maturities for all time deposits is as follows:
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OTHER BORROWINGS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER BORROWINGS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of FHLB Advances by Maturity Date | The following table summarizes the Company’s FHLB advances by maturity date:
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COMMITMENTS AND CONTINGENCIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Contractual Amounts for Unfunded Commitments and Letters of Credit | A summary of the contractual amounts for unfunded commitments and letters of credit are as follows:
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STOCKHOLDERS' EQUITY (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Assumptions Used in Calculating Fair Value of Option Awards | A summary of the assumptions used in calculating the fair value of option awards during the years ended December 31, 2018, 2017 and 2016 are as follows:
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Summary of Option Activity | A summary of option activity under the plan is presented below:
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Summary of Change in Unvested Stock Option Share | The following table summarizes the change in unvested stock option shares during the year ended December 31, 2018:
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CAPITAL REQUIREMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CAPITAL REQUIREMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bank's Regulatory Ratios and Federal Reserve's Current Adequacy Guidelines | The following tables illustrates the Bank’s regulatory ratios and the Federal Reserve’s current adequacy guidelines as of December 31, 2018 and 2017. The Federal Reserve’s fully phased-in guidelines applicable in 2019 are also summarized.
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FAIR VALUE MEASUREMENT (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENT [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements of Assets Measured on a Recurring Basis | The following tables summarize the fair value of assets measured on a recurring basis:
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Fair Value Measurements of Assets Measured on a Non-recurring Basis | The following summarizes the fair value measurements of assets measured on a non-recurring basis:
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Estimated Fair Values and Carrying Values of Financial Instruments | The estimated fair value of the Company’s financial instruments are as follows:
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ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Other Comprehensive Income (Loss) by Component, Net of Tax | The following table summarizes the changes in other comprehensive income by component, net of tax for the period indicated:
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PARENT COMPANY FINANCIAL INFORMATION (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PARENT COMPANY FINANCIAL INFORMATION [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Balance Sheets | COMMUNITY WEST BANCSHARES Condensed Balance Sheets
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Condensed Income Statements | COMMUNITY WEST BANCSHARES Condensed Income Statements
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Condensed Statements of Cash Flows | COMMUNITY WEST BANCSHARES Condensed Statements of Cash Flows
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QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
QUARTERLY FINANCIAL DATA (UNAUDITED) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Statement of Operations |
|
INVESTMENT SECURITIES, Securities Held-to-Maturity (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Securities held-to-maturity [Abstract] | ||
Amortized cost | $ 7,301 | $ 7,565 |
Gross unrealized gains | 118 | 216 |
Gross unrealized (losses) | (150) | (110) |
Fair value | 7,269 | 7,671 |
U.S. Government Agency Mortgage Backed Securities ("MBS") [Member] | ||
Securities held-to-maturity [Abstract] | ||
Amortized cost | 7,301 | 7,565 |
Gross unrealized gains | 118 | 216 |
Gross unrealized (losses) | (150) | (110) |
Fair value | $ 7,269 | $ 7,671 |
INVESTMENT SECURITIES, Securities Measured at Fair Value (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Securities measured at fair value [Abstract] | ||
Amortized cost | $ 66 | |
Gross unrealized gains | 55 | |
Gross unrealized (losses) | 0 | |
Fair value | 121 | $ 0 |
Farmer Mac Class A Stock [Member] | ||
Securities measured at fair value [Abstract] | ||
Amortized cost | 66 | |
Gross unrealized gains | 55 | |
Gross unrealized losses | 0 | |
Fair value | 121 | |
Fair value | $ 121 |
INVESTMENT SECURITIES, Securities Pledged as Collateral (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
INVESTMENT SECURITIES [Abstract] | ||
Securities pledged as collateral to the Federal Home Loan Bank ("FHLB") | $ 32.2 | $ 36.2 |
LOAN HELD FOR SALE (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Loans Held for Sale [Abstract] | ||
Loans included in loans held for sale | $ 48,355 | $ 55,094 |
SBA [Member] | ||
Loans Held for Sale [Abstract] | ||
Loans included in loans held for sale | 13,600 | 18,900 |
Principal balance of loan serviced | 7,200 | 10,800 |
US Department of Agriculture [Member] | ||
Loans Held for Sale [Abstract] | ||
Loans included in loans held for sale | 34,800 | 36,200 |
Principal balance of loan serviced | $ 2,000 | $ 2,000 |
LOANS HELD FOR INVESTMENT, Recorded Investment in Certain Types of Loans (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Financing receivable recorded investment [Abstract] | |||
Nonaccrual loans | $ 6,226 | $ 6,844 | $ 3,117 |
SBA guaranteed portion of loans included above | 2,848 | 2,372 | 742 |
Troubled debt restructured loans, gross | 16,749 | 16,603 | 14,437 |
Loans 30 through 89 days past due with interest accruing | 0 | 0 | 0 |
Interest income recognized on impaired loans | 1,324 | 1,142 | 1,148 |
Foregone interest on nonaccrual and troubled debt restructured loans | $ 454 | $ 379 | $ 412 |
Allowance for loan losses to gross loans held for investment | 1.21% | 1.24% | 1.24% |
Period past due after which accrual of interest is discontinued | 90 days |
LOANS HELD FOR INVESTMENT, Troubled Debt Restructured Loans With Payment Defaults (Details) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2018
USD ($)
Nonpayment
|
Dec. 31, 2017
USD ($)
|
|
LOANS HELD FOR INVESTMENT [Abstract] | ||
Number of consecutive non-payments for a TDR loan to be deemed default | Nonpayment | 2 | |
Trouble debt restructurings with payment defaults | $ | $ 0 | $ 0 |
LOANS HELD FOR INVESTMENT, Related Parties (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Loans and Leases Receivable, Related Parties [Roll Forward] | ||
Balance, beginning | $ 3,505 | $ 943 |
New loans | 160 | 2,741 |
Repayments and other | (160) | (179) |
Balance, ending | 3,505 | 3,505 |
Loan commitments outstanding with related parties | $ 1,000 | $ 300 |
PREMISES AND EQUIPMENT (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Premises and equipment [Abstract] | |||
Premises and equipment, gross | $ 18,063 | $ 16,565 | |
Accumulated depreciation | (11,682) | (10,984) | |
Premises and equipment, net | 6,381 | 5,581 | |
Minimum lease commitments [Abstract] | |||
2019 | 1,300 | ||
2020 | 1,261 | ||
2021 | 1,208 | ||
2022 | 1,135 | ||
2023 | 1,010 | ||
Thereafter | 3,331 | ||
Total | 9,245 | ||
Rent expense included in occupancy expense | 1,200 | 1,200 | $ 1,000 |
Depreciation expense included in occupancy expense | 764 | 685 | $ 678 |
Bank Premises and Land [Member] | |||
Premises and equipment [Abstract] | |||
Premises and equipment, gross | 1,355 | 1,355 | |
Furniture, Fixtures and Equipment [Member] | |||
Premises and equipment [Abstract] | |||
Premises and equipment, gross | 10,956 | 10,241 | |
Leasehold Improvements [Member] | |||
Premises and equipment [Abstract] | |||
Premises and equipment, gross | 5,747 | 4,025 | |
Construction in Progress [Member] | |||
Premises and equipment [Abstract] | |||
Premises and equipment, gross | $ 5 | $ 944 |
OTHER ASSETS ACQUIRED THROUGH FORECLOSURE (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
OTHER ASSETS ACQUIRED THROUGH FORECLOSURE [Abstract] | |||
Balance, beginning of period | $ 372 | $ 137 | $ 198 |
Additions | 174 | 501 | 350 |
Proceeds from dispositions | (484) | (416) | (395) |
Gains (losses) on sales, net | (62) | 150 | (16) |
Balance, end of period | $ 0 | $ 372 | $ 137 |
INCOME TAXES (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Current [Abstract] | |||||||||||
Federal | $ 2,130 | $ 3,722 | $ 3,000 | ||||||||
State | 1,208 | 1,298 | 1,022 | ||||||||
Current income tax expense (benefit) | 3,338 | 5,020 | 4,022 | ||||||||
Deferred [Abstract] | |||||||||||
Federal | (421) | 701 | (338) | ||||||||
State | (108) | (173) | (71) | ||||||||
Deferred income tax expense (benefit) | (529) | 528 | (409) | ||||||||
Total provision for income taxes | $ 570 | $ 695 | $ 758 | $ 786 | $ 2,514 | $ 992 | $ 1,050 | $ 992 | $ 2,809 | $ 5,548 | $ 3,613 |
Reconciliation between statutory income tax rate and effective tax rate [Abstract] | |||||||||||
Federal income tax at statutory rate | 21.00% | 34.00% | 34.00% | ||||||||
State franchise tax, net of federal benefit | 8.60% | 7.20% | 7.20% | ||||||||
Other | (2.10%) | (0.40%) | (0.30%) | ||||||||
Tax law change | 0.00% | 12.20% | 0.00% | ||||||||
Total provision for income taxes | 27.50% | 53.00% | 40.90% | ||||||||
Deferred Tax Assets [Abstract] | |||||||||||
Allowance for loan losses | 2,619 | 2,514 | $ 2,619 | $ 2,514 | |||||||
Unrealized loss of AFS securities | 58 | 0 | 58 | 0 | |||||||
Other | 2,028 | 1,562 | 2,028 | 1,562 | |||||||
Total gross deferred tax assets | 4,705 | 4,076 | 4,705 | 4,076 | |||||||
Deferred tax asset valuation allowance | 0 | 0 | 0 | 0 | |||||||
Total deferred tax assets | 4,705 | 4,076 | 4,705 | 4,076 | |||||||
Deferred Tax Liabilities [Abstract] | |||||||||||
Deferred state taxes | (248) | (233) | (248) | (233) | |||||||
Depreciation | (446) | (142) | (446) | (142) | |||||||
Unrealized gain on AFS securities | 0 | (11) | 0 | (11) | |||||||
Other | (786) | (521) | (786) | (521) | |||||||
Total deferred tax liabilities | (1,480) | (907) | (1,480) | (907) | |||||||
Net deferred tax asset | 3,225 | $ 3,169 | 3,225 | 3,169 | |||||||
Income tax expense | $ 1,300 | ||||||||||
Uncertain tax positions | $ 0 | $ 0 |
DEPOSITS (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Summary of deposits by type [Abstract] | ||
Non-interest bearing demand deposits | $ 108,161 | $ 108,500 |
Interest-bearing deposits [Abstract] | ||
NOW accounts | 23,085 | 24,863 |
Money market deposit account | 247,346 | 231,854 |
Savings accounts | 14,641 | 14,085 |
Time deposits of $250,000 or more | 93,439 | 81,985 |
Other time deposits | 229,334 | 238,397 |
Total deposits | 716,006 | 699,684 |
Deposit liabilities that may be immediately withdrawn | 393,200 | |
Maturities of time certificates [Abstract] | ||
2019 | 280,651 | |
2020 | 34,641 | |
2021 | 4,065 | |
2022 | 405 | |
2023 | 3,011 | |
Thereafter | 0 | |
Total | 322,773 | |
Deposits with CDARS | 35,200 | 32,100 |
Deposits from related parties | $ 25,800 | $ 23,600 |
OTHER BORROWINGS, Federal Funds Purchased Lines (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Federal Funds Purchased Lines [Abstract] | ||
Federal funds borrowing lines at correspondent banks | $ 20.0 | |
Federal funds amount outstanding | $ 0.0 | $ 0.0 |
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Changes in other comprehensive income (loss) by component, net of tax [Roll Forward] | |||
Balance | $ 70,070 | $ 65,336 | $ 61,944 |
Net current-period other comprehensive income | (107) | 54 | 39 |
Balance | 76,151 | 70,070 | 65,336 |
Unrealized Holding Gains (Losses) on AFS [Member] | |||
Changes in other comprehensive income (loss) by component, net of tax [Roll Forward] | |||
Balance | 25 | (29) | (68) |
Other comprehensive income (loss) before reclassifications | (107) | 54 | 39 |
Amounts reclassified from accumulated other comprehensive income | (59) | 0 | 0 |
Net current-period other comprehensive income | (166) | 54 | 39 |
Balance | $ (141) | $ 25 | $ (29) |
PARENT COMPANY FINANCIAL INFORMATION, Condensed Income Statements (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Condensed Income Statements [Abstract] | |||||||||||
Interest income | $ 11,041 | $ 11,201 | $ 10,401 | $ 9,988 | $ 9,927 | $ 9,695 | $ 9,066 | $ 8,703 | $ 42,631 | $ 37,391 | $ 32,216 |
Interest expense | 2,687 | 2,573 | 2,090 | 1,638 | 1,451 | 1,319 | 1,030 | 929 | 8,988 | 4,729 | 3,127 |
Net interest income | 8,354 | 8,628 | 8,311 | 8,350 | 8,476 | 8,376 | 8,036 | 7,774 | 33,643 | 32,662 | 29,089 |
Provision for loan losses | 238 | (197) | 117 | (144) | (12) | 159 | 120 | 144 | 14 | 411 | (48) |
Net interest income after provision for loan losses | 8,116 | 8,825 | 8,194 | 8,494 | 8,488 | 8,217 | 7,916 | 7,630 | 33,629 | 32,251 | 29,137 |
Total non-interest expenses | 6,847 | 6,402 | 6,257 | 6,533 | 6,228 | 6,387 | 6,007 | 5,923 | 26,039 | 24,545 | 22,548 |
Income before provision for income taxes | 1,929 | 3,064 | 2,625 | 2,600 | 2,963 | 2,546 | 2,606 | 2,348 | 10,218 | 10,463 | 8,842 |
Income tax benefit | 570 | 695 | 758 | 786 | 2,514 | 992 | 1,050 | 992 | 2,809 | 5,548 | 3,613 |
Net income | $ 1,359 | $ 2,369 | $ 1,867 | $ 1,814 | $ 449 | $ 1,554 | $ 1,556 | $ 1,356 | 7,409 | 4,915 | 5,229 |
Parent Company [Member] | |||||||||||
Condensed Income Statements [Abstract] | |||||||||||
Interest income | 264 | 60 | 5 | ||||||||
Interest expense | 329 | 196 | 247 | ||||||||
Net interest income | (65) | (136) | (242) | ||||||||
Provision for loan losses | 60 | 0 | 0 | ||||||||
Net interest income after provision for loan losses | (125) | (136) | (242) | ||||||||
Income from consolidated subsidiary | 7,844 | 5,441 | 5,671 | ||||||||
Total income | 7,719 | 5,305 | 5,429 | ||||||||
Total non-interest expenses | 516 | 669 | 495 | ||||||||
Income before provision for income taxes | 7,203 | 4,636 | 4,934 | ||||||||
Income tax benefit | (206) | (279) | (295) | ||||||||
Net income | $ 7,409 | $ 4,915 | $ 5,229 |
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Results of Operations [Abstract] | |||||||||||
Interest income | $ 11,041 | $ 11,201 | $ 10,401 | $ 9,988 | $ 9,927 | $ 9,695 | $ 9,066 | $ 8,703 | $ 42,631 | $ 37,391 | $ 32,216 |
Interest expense | 2,687 | 2,573 | 2,090 | 1,638 | 1,451 | 1,319 | 1,030 | 929 | 8,988 | 4,729 | 3,127 |
Net interest income | 8,354 | 8,628 | 8,311 | 8,350 | 8,476 | 8,376 | 8,036 | 7,774 | 33,643 | 32,662 | 29,089 |
Provision (credit) for loan losses | 238 | (197) | 117 | (144) | (12) | 159 | 120 | 144 | 14 | 411 | (48) |
Net interest income after provision for loan losses | 8,116 | 8,825 | 8,194 | 8,494 | 8,488 | 8,217 | 7,916 | 7,630 | 33,629 | 32,251 | 29,137 |
Non-interest income | 660 | 641 | 688 | 639 | 703 | 716 | 697 | 641 | 2,628 | 2,757 | 2,253 |
Non-interest expenses | 6,847 | 6,402 | 6,257 | 6,533 | 6,228 | 6,387 | 6,007 | 5,923 | 26,039 | 24,545 | 22,548 |
Income before provision for income taxes | 1,929 | 3,064 | 2,625 | 2,600 | 2,963 | 2,546 | 2,606 | 2,348 | 10,218 | 10,463 | 8,842 |
Provision for income taxes | 570 | 695 | 758 | 786 | 2,514 | 992 | 1,050 | 992 | 2,809 | 5,548 | 3,613 |
Net income | $ 1,359 | $ 2,369 | $ 1,867 | $ 1,814 | $ 449 | $ 1,554 | $ 1,556 | $ 1,356 | $ 7,409 | $ 4,915 | $ 5,229 |
Earnings per share [Abstract] | |||||||||||
Income per common share - basic (in dollars per share) | $ 0.16 | $ 0.29 | $ 0.23 | $ 0.22 | $ 0.05 | $ 0.19 | $ 0.19 | $ 0.17 | $ 0.89 | $ 0.60 | $ 0.64 |
Income per common share - diluted (in dollars per share) | $ 0.16 | $ 0.27 | $ 0.21 | $ 0.21 | $ 0.05 | $ 0.18 | $ 0.18 | $ 0.16 | $ 0.88 | $ 0.57 | $ 0.62 |
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