0001058867-18-000085.txt : 20181109 0001058867-18-000085.hdr.sgml : 20181109 20181109091108 ACCESSION NUMBER: 0001058867-18-000085 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 89 CONFORMED PERIOD OF REPORT: 20180930 FILED AS OF DATE: 20181109 DATE AS OF CHANGE: 20181109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GUARANTY BANCSHARES INC /TX/ CENTRAL INDEX KEY: 0001058867 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 751656431 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-38087 FILM NUMBER: 181171559 BUSINESS ADDRESS: STREET 1: 201 SOUTH JEFFERSON AVENUE CITY: MOUNT PLEASANT STATE: TX ZIP: 75455 BUSINESS PHONE: 9035729881 MAIL ADDRESS: STREET 1: 201 SOUTH JEFFERSON AVENUE CITY: MOUNT PLEASANT STATE: TX ZIP: 75455 10-Q 1 gnty-10qx093018.htm 10-Q - 09.30.18 Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2018
OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             .
Commission File Number: 001-38087
 
GUARANTY BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
 
Texas
 
75-1656431
(State or other jurisdiction of
 
(I.R.S. employer
incorporation or organization)
 
identification no.)
 
 
 
201 South Jefferson Avenue
 
 
Mount Pleasant, Texas
 
75455
(Address of principal executive offices)
 
(Zip code)
 
(888) 572 - 9881
(Registrant’s telephone number, including area code)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer ☐
 
Accelerated filer ☐
 
 
 
 
 
 
 
Non-accelerated filer ☒
 
Smaller reporting company ☐
 
 
(Do not check if a smaller reporting company)
 
 
 
 
 
 
 
 
 
 
 
Emerging growth company ☒
 
 
 
 
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
 





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 9, 2018, there were 11,889,009 outstanding shares of the registrant’s common stock, par value $1.00 per share.




GUARANTY BANCSHARES, INC.
 
 
 
 
 
Page
 
 
 
 
 
 
 
 
 





PART I. FINANCIAL INFORMATION 
Item 1. Financial Statements
GUARANTY BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
 
 
(Unaudited)
 
(Audited)
 
 
September 30,
2018
 
December 31,
2017
ASSETS
 
 
 
 
Cash and due from banks
 
$
38,483

 
$
40,482

Federal funds sold
 
10,700

 
26,175

Interest-bearing deposits
 
4,868

 
24,771

Total cash and cash equivalents
 
54,051

 
91,428

Securities available for sale
 
232,378

 
232,372

Securities held to maturity
 
164,839

 
174,684

Loans held for sale
 
826

 
1,896

Loans, net
 
1,638,149

 
1,347,779

Accrued interest receivable
 
7,760

 
8,174

Premises and equipment, net
 
52,660

 
43,818

Other real estate owned
 
1,783

 
2,244

Cash surrender value of life insurance
 
25,747

 
19,117

Deferred tax asset
 
3,237

 
2,543

Core deposit intangible, net
 
4,919

 
2,724

Goodwill
 
32,160

 
18,742

Other assets
 
24,071

 
17,103

Total assets
 
$
2,242,580

 
$
1,962,624

LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
Liabilities
 
 
 
 
  Deposits
 
 
 
 
    Noninterest-bearing
 
$
479,405

 
$
410,009

    Interest-bearing
 
1,357,934

 
1,266,311

          Total deposits
 
1,837,339

 
1,676,320

   Securities sold under agreements to repurchase
 
11,107

 
12,879

   Accrued interest and other liabilities
 
10,187

 
7,117

   Federal Home Loan Bank advances
 
129,140

 
45,153

   Subordinated debentures
 
12,810

 
13,810

      Total liabilities
 
2,000,583

 
1,755,279


 
 
 
See accompanying notes to consolidated financial statements.
4.



GUARANTY BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
 
 
(Unaudited)
 
(Audited)
 
 
September 30,
2018
 
December 31,
2017
Shareholders' equity
 
 
 
 
Preferred stock, $5.00 par value, 15,000,000 shares authorized, no shares issued
 

 

Common stock, $1.00 par value, 50,000,000 shares authorized, 12,827,114 and 11,921,298 shares issued, and 11,964,472 and 11,058,956 shares outstanding, respectively
 
12,827

 
11,921

Additional paid-in capital
 
184,781

 
155,601

Retained earnings
 
75,590

 
66,037

Treasury stock, 862,642 and 862,342 shares at cost
 
(20,096
)
 
(20,087
)
Accumulated other comprehensive loss
 
(11,105
)
 
(6,127
)
Total shareholders' equity
 
241,997

 
207,345

Total liabilities and shareholders' equity
 
$
2,242,580

 
$
1,962,624



 
 
 
See accompanying notes to consolidated financial statements.
5.



GUARANTY BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
(Dollars in thousands, except per share data) 
 

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Interest income
 
 
 
 
 
 
 
Loans, including fees
$
20,879

 
$
15,486

 
$
55,377

 
$
45,115

Securities
 
 
 
 
 
 
 
Taxable
1,526

 
1,545

 
4,713

 
4,257

Nontaxable
966

 
919

 
2,812

 
2,761

Federal funds sold and interest-bearing deposits
304

 
215

 
837

 
960

Total interest income
23,675

 
18,165

 
63,739

 
53,093

 
 
 
 
 
 
 
 
Interest expense
 
 
 
 
 
 
 
Deposits
4,670

 
2,730

 
11,948

 
7,761

FHLB advances and federal funds purchased
593

 
157

 
1,181

 
294

Subordinated debentures
173

 
164

 
516

 
559

Other borrowed money
10

 
12

 
34

 
337

Total interest expense
5,446

 
3,063

 
13,679

 
8,951

 
 
 
 
 
 
 
 
Net interest income
18,229

 
15,102

 
50,060

 
44,142

Provision for loan losses
500

 
800

 
1,750

 
2,250

Net interest income after provision for loan losses
17,729

 
14,302

 
48,310

 
41,892

 
 
 
 
 
 
 
 
Noninterest income
 
 
 
 
 
 
 
Service charges
921

 
986

 
2,661

 
2,801

Net realized gain (loss) on securities transactions
1

 

 
(50
)
 
25

Net realized gain on sale of loans
637

 
589

 
1,871

 
1,490

Other income
1,990

 
2,127

 
6,648

 
6,184

Total noninterest income
3,549

 
3,702

 
11,130

 
10,500

 
 
 
 
 
 
 
 
Noninterest expense
 
 
 
 
 
 
 
Employee compensation and benefits
8,156

 
6,729

 
23,723

 
20,156

Occupancy expenses
2,217

 
1,938

 
6,076

 
5,552

Other expenses
4,654

 
3,499

 
12,431

 
10,409

Total noninterest expense
15,027

 
12,166

 
42,230

 
36,117

 
 
 
 
 
 
 
 
Income before income taxes
6,251

 
5,838

 
17,210

 
16,275

Income tax provision
1,160

 
1,699

 
3,126

 
4,644

Net earnings
$
5,091

 
$
4,139

 
$
14,084

 
$
11,631

Basic earnings per share
$
0.43

 
$
0.37

 
$
1.23

 
$
1.17

Diluted earnings per share
$
0.42

 
$
0.37

 
$
1.22

 
$
1.16



 
 
 
See accompanying notes to consolidated financial statements.
6.



GUARANTY BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(Dollars in thousands) 
 

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Net earnings
$
5,091

 
$
4,139

 
$
14,084

 
$
11,631

Other comprehensive income:
 
 
 
 
 
 
 
Unrealized (losses) gains on securities
 
 
 
 
 
 
 
Unrealized holding (losses) gains arising during the period
(1,592
)
 
(264
)
 
(6,104
)
 
2,422

Amortization of net unrealized gains on held to maturity securities
6

 
23

 
28

 
58

Reclassification adjustment for net (gains) losses included in net earnings
(1
)
 

 
50

 
(25
)
Tax effect
334

 
92

 
1,271

 
(839
)
Unrealized (losses) gains on securities, net of tax
(1,253
)
 
(149
)
 
(4,755
)
 
1,616

Unrealized holding gains arising during the period on interest rate swaps
67

 
35

 
263

 
29

Total other comprehensive (loss) income
(1,186
)
 
(114
)
 
(4,492
)
 
1,645

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

 

 
(486
)
 

Comprehensive income
$
3,905

 
$
4,025

 
$
9,106

 
$
13,276





 
 
 
See accompanying notes to consolidated financial statements.
7.



GUARANTY BANCSHARES, INC.
CONSOLIDATED STATMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)
(Dollars in thousands, except per share amounts) 
 

 
 
Preferred Stock
 
Common Stock
 
Additional Paid-in Capital
 
Retained Earnings
 
Treasury Stock
 
Accumulated Other Comprehensive Loss
 
Less: KSOP-Owned Shares
 
Total Shareholders’ Equity
For the Nine Months Ended September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2016
 
$

 
$
9,616

 
$
101,736

 
$
57,160

 
$
(20,111
)
 
$
(6,487
)
 
$
(31,661
)
 
$
110,253

Net earnings
 

 

 

 
11,631

 

 

 

 
11,631

Other comprehensive income
 

 

 

 

 

 
1,645

 

 
1,645

Terminated KSOP put option
 

 

 

 

 

 

 
34,300

 
34,300

Exercise of stock options
 

 
5

 
55

 

 
24

 

 

 
84

Sale of common stock
 

 
2,300

 
53,455

 

 

 

 

 
55,755

Stock based compensation
 

 

 
247

 

 

 

 

 
247

Net change in fair value of KSOP shares
 

 

 

 

 

 

 
(2,639
)
 
(2,639
)
Dividends:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common - $0.39 per share
 

 

 

 
(4,013
)
 

 

 

 
(4,013
)
Balance at September 30, 2017
 
$

 
$
11,921

 
$
155,493

 
$
64,778

 
$
(20,087
)
 
$
(4,842
)
 
$

 
$
207,263

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Nine Months Ended September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2017
 
$

 
$
11,921

 
$
155,601

 
$
66,037

 
$
(20,087
)
 
$
(6,127
)
 
$

 
$
207,345

Net earnings
 

 

 

 
14,084

 

 

 

 
14,084

Other comprehensive loss
 

 

 

 

 

 
(4,492
)
 

 
(4,492
)
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
 

 

 

 
486

 

 
(486
)
 

 

Exercise of stock options
 

 
6

 
134

 

 

 

 

 
140

Purchase of treasury stock
 

 

 

 

 
(9
)
 

 

 
(9
)
Issuance of common stock
 

 
900

 
28,668

 

 

 

 

 
29,568

Stock based compensation
 

 

 
378

 

 

 

 

 
378

Dividends:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common - $0.43 per share
 

 

 

 
(5,017
)
 

 

 

 
(5,017
)
Balance at September 30, 2018
 
$

 
$
12,827

 
$
184,781

 
$
75,590

 
$
(20,096
)
 
$
(11,105
)
 
$

 
$
241,997



 
 
 
See accompanying notes to consolidated financial statements.
8.



GUARANTY BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands) 
 
 
For the Nine Months Ended September 30,
 
 
2018
 
2017
Cash flows from operating activities
 
 
 
 
Net earnings
 
$
14,084

 
$
11,631

Adjustments to reconcile net earnings to net cash provided from operating activities:
 
 
 
 
Depreciation
 
2,457

 
2,385

Amortization
 
881

 
782

Deferred taxes
 
577

 
(214
)
Premium amortization, net of discount accretion
 
3,247

 
3,581

Net realized gain on securities transactions
 
50

 
(25
)
Gain on sale of loans
 
(1,871
)
 
(1,490
)
Provision for loan losses
 
1,750

 
2,250

Origination of loans held for sale
 
(56,276
)
 
(50,230
)
Proceeds from loans held for sale
 
59,217

 
50,883

Write-down of other real estate and repossessed assets
 
392

 
9

Net loss on sale of premises, equipment, other real estate owned and other assets
 
478

 
111

Stock based compensation
 
378

 
247

Net change in accrued interest receivable and other assets
 
(5,170
)
 
1,680

Net change in accrued interest payable and other liabilities
 
1,768

 
1,624

Net cash provided by operating activities
 
21,962

 
23,224

 
 
 
 
 
Cash flows from investing activities
 
 
 
 
Securities available for sale:
 
 
 
 
Purchases
 
(124,914
)
 
(313,177
)
Proceeds from sales
 
111,813

 
213,813

Proceeds from maturities and principal repayments
 
20,697

 
18,925

Securities held to maturity:
 
 
 
 
Proceeds from sales
 

 
923

Proceeds from maturities and principal repayments
 
8,184

 
7,497

Cash paid in connection with acquisitions
 
(6,423
)
 

Cash received from acquired banks
 
24,927

 

Net purchases of premises and equipment
 
(2,924
)
 
(1,678
)
Net proceeds from sale of premises, equipment, other real estate owned and other assets
 
1,898

 
1,830

Net increase in loans
 
(138,024
)
 
(64,438
)
Net cash used in investing activities
 
(104,766
)
 
(136,305
)
 
 
 
 
 
Cash flows from financing activities
 
 
 
 
Net change in deposits
 
(20,402
)
 
40,511

Net change in securities sold under agreements to repurchase
 
(1,772
)
 
2,061

Proceeds from FHLB advances
 
325,000

 
60,000

Repayment of FHLB advances
 
(251,513
)
 
(50,013
)
Proceeds from other debt
 

 
2,000

Repayment of other debt
 

 
(20,286
)
Repayments of debentures
 
(1,000
)
 
(5,500
)
Purchase of treasury stock
 
(9
)
 


 
 
 
See accompanying notes to consolidated financial statements.
9.



GUARANTY BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands) 
 
 
For the Nine Months Ended September 30,
 
 
2018
 
2017
Exercise of stock options
 
140

 
84

Sale of common stock
 

 
55,755

Cash dividends
 
(5,017
)
 
(4,013
)
Net cash provided by financing activities
 
45,427

 
80,599

Net change in cash and cash equivalents
 
(37,377
)
 
(32,482
)
Cash and cash equivalents at beginning of period
 
91,428

 
127,543

Cash and cash equivalents at end of period
 
$
54,051

 
$
95,061

 
 
 
 
 
Supplemental disclosures of cash flow information
 
 
 
 
Interest paid
 
$
13,137

 
$
8,958

Income taxes paid
 
4,008

 
4,910

 
 
 
 
 
Supplemental schedule of noncash investing and financing activities
 
 
 
 
Transfer loans to other real estate owned and repossessed assets
 
591

 
992

Common stock issued in acquisitions
 
29,568

 

Transfer of KSOP shares
 

 
34,300

Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
 
486

 

Net change in fair value of KSOP shares
 

 
2,639


 
 
 
See accompanying notes to consolidated financial statements.
10.

GUARANTY BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 
 
 


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations: Guaranty Bancshares, Inc. (“Guaranty”) is a bank holding company headquartered in Mount Pleasant, Texas that provides, through its wholly-owned subsidiary, Guaranty Bank & Trust, N.A. (the “Bank”), a broad array of financial products and services to individuals and corporate customers, primarily in its markets of East Texas, Dallas/Fort Worth, Greater Houston and Central Texas. The terms “the Company,” “we,” “us” and “our” mean Guaranty and its subsidiaries, when appropriate. The Company’s main sources of income are derived from granting loans throughout its markets and investing in securities issued by the U.S. Treasury, U.S. government agencies and state and political subdivisions. The Company’s primary lending products are real estate, commercial and consumer loans. Although the Company has a diversified loan portfolio, a substantial portion of its debtors’ abilities to honor contracts is dependent on the economy of the State of Texas and primarily the economies of East Texas, Dallas/Fort Worth, Greater Houston and Central Texas. The Company primarily funds its lending activities with deposit operations. The Company’s primary deposit products are checking accounts, money market accounts and certificates of deposit.

Basis of Presentation: The consolidated financial statements in this Quarterly Report on Form 10-Q (this “Report”) include the accounts of Guaranty, the Bank, and their respective other direct and indirect subsidiaries and any other entities in which Guaranty has a controlling interest. The Bank has six wholly-owned non-bank subsidiaries, Guaranty Company, Inc., G B COM, INC., 2800 South Texas Avenue LLC, Pin Oak Realty Holdings, Inc., Pin Oak Energy Holdings, LLC and White Oak Aviation, LLC. All significant intercompany balances and transactions have been eliminated in consolidation.  The accounting and financial reporting policies followed by the Company conform, in all material respects, to accounting principles generally accepted in the United States of America (“GAAP”) and to general practices within the financial services industry.
The consolidated financial statements in this Report have not been audited by an independent registered public accounting firm, but in the opinion of management, reflect all adjustments necessary for a fair presentation of the Company’s financial position and results of operations. All such adjustments were of a normal and recurring nature. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission (“SEC”). Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s consolidated financial statements, and notes thereto, for the year ended December 31, 2017, included in Guaranty’s Annual Report on Form 10-K for the year ended December 31, 2017. Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year or any future period.
All dollar amounts referenced and discussed in the notes to the consolidated financial statements in this Report are presented in thousands, unless noted otherwise.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions may also affect disclosure 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 these estimates.

KSOP Repurchase Right: In accordance with applicable provisions of the Internal Revenue Code, the terms of Guaranty’s employee stock ownership plan with 401(k) provisions (“KSOP”), provided that, for so long as Guaranty was a privately-held company without a public market for its common stock, KSOP participants would have the right, for a specified period of time, to require Guaranty to repurchase shares of its common stock that are distributed to them by the KSOP. This repurchase obligation terminated upon the consummation of Guaranty’s initial public offering and listing of its common stock on the NASDAQ Global Select Market in May 2017. However, because Guaranty was privately-held without a public market for its common stock as of and for the quarter ended March 31, 2017, the shares of common stock held by the KSOP are reflected in the Company’s consolidated statement of changes in shareholders' equity for the nine months ended September 30, 2017 in a column called “KSOP-owned shares”. As a result of the initial public offering, the consolidated statement of changes in shareholders' equity for the nine months ended September 30, 2017 includes an adjustment for the inclusion of such KSOP-owned shares in total shareholders' equity

 
 
 
(Continued)
11.

GUARANTY BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 
 
 

as "terminated KSOP put option." For all periods following Guaranty’s initial public offering and continued listing of the Company’s common stock on the NASDAQ Global Select Market, the KSOP-owned shares are included in, and not deducted from, shareholders’ equity.
Recent Accounting Pronouncements:
In February 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2018-02, Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. ASU 2018-02 was issued to address the income tax accounting treatment of the stranded 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 35% 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 effect of $486 within accumulated other comprehensive income to retained earnings at March 31, 2018.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU simplifies the accounting for goodwill impairment for all entities by requiring impairment changes to be based on the first step in today’s two-step impairment test, thus eliminating step two from the goodwill impairment test. In addition, the amendment eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform step two of the goodwill impairment test. For pubic companies, ASU 2017-04 is effective for fiscal years beginning after December 15, 2019 with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is in the process of evaluating the impact of this pronouncement, which is not expected to have a significant impact on its consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which sets forth a "current expected credit loss" ("CECL") model requiring the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. For public companies, the amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company has assembled a transition team to assess the adoption of this ASU, and has developed a project plan regarding implementation.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The FASB issued this ASU to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet by lessees for those leases classified as operating leases under current U.S. GAAP and disclosing key information about leasing arrangements. The amendments in this ASU are effective for public companies for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. Early adoption of this ASU is permitted for all entities. We expect recorded assets and liabilities to increase upon adoption of the standard as it relates to operating leases in which we are the lessee.
In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Liabilities, which is intended to improve the recognition and measurement of financial instruments by requiring: equity investments (other than equity method or consolidation) to be measured at fair value with changes in fair value recognized in net income; public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; eliminating the requirement to disclose the fair value of financial instruments measured at amortized cost for organizations that are not public business entities;

 
 
 
(Continued)
12.

GUARANTY BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 
 
 

eliminating the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; and requiring a reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The adoption of ASU 2016-01 on January 1, 2018 did not have a material impact on the Company’s condensed consolidated financial statements. In accordance with (iv) above, the Company measured the fair value of its loan portfolio prospectively as of June 30, 2018 using an exit price notion. See Note 13 – Fair Value for further information regarding the valuation of these loans.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASU 606), followed by various amendments to the standard, including clarification of principal versus agent considerations, narrow scope improvements and other technical corrections, all of which are codified in ASU 606. The amendments in these updates amend existing guidance related to revenue from contracts with customers. The amendments supersede and replace nearly all existing revenue recognition guidance, including industry-specific guidance, establish a new control-based revenue recognition model, change the basis for deciding when revenue is recognized over a time or point in time, provide new and more detailed guidance on specific topics and expand and improve disclosures about revenue. In addition, these amendments specify the accounting for some costs to obtain or fulfill a contract with a customer. The Company has applied ASU 2014-09, which was effective on January 1, 2018, using the modified retrospective approach to all existing contracts with customers covered under the scope of the standard. The adoption of this ASU was not significant to the Company and had no material effect on how the Company recognizes revenue nor did it result in a cumulative effect adjustment or any presentation changes to the consolidated financial statements.
The majority of the Company's revenue-generating transactions are not subject to ASC 606, including revenue generated from financial instruments, such as loans, letters of credit, loan processing fees and investment securities, as well as revenue related to mortgage banking activities, and BOLI, as these activities are subject to other accounting guidance. Descriptions of revenue-generating activities that are within the scope of ASC 606, and are presented in the accompanying Consolidated Statements of Income as components of noninterest income, are as follows:
Deposit services. Service charges on deposit accounts include fees for banking services provided, overdrafts and non-sufficient funds. Revenue is generally recognized in accordance with published deposit account agreements for retail accounts or contractual agreements for commercial accounts.
Merchant and debit card fees. Merchant and debit card fees includes interchange income that is generated by our customers’ usage and volume of activity. Interchange rates are not controlled by the Company, which effectively acts as processor that collects and remits payments associated with customer debit card transactions. Merchant service revenue is derived from third party vendors that process credit card transactions on behalf of our merchant customers. Merchant services revenue is primarily comprised of residual fee income based on the referred merchant’s processing volumes and/or margin.
Fiduciary income. Trust income includes fees and commissions from investment management, administrative and advisory services primarily for individuals, and to a lesser extent, partnerships and corporations. Revenue is recognized on an accrual basis at the time the services are performed and when we have a right to invoice and are based on either the market value of the assets managed or the services provided.
Other noninterest income. Other noninterest income includes among other things, mortgage loan origination fees, wire transfer fees, stop payment fees, loan administration fees and mortgage warehouse lending fees. The majority of these fees in other noninterest income are not subject to the requirements of ASC 606. Fees that are within the scope of ASC 606 are generally received at the time the performance obligations are met.

 
 
 
(Continued)
13.

GUARANTY BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 
 
 

NOTE 2 - ACQUISITIONS

On close of business June 1, 2018, the Company acquired 100% of the outstanding shares of capital stock of Westbound Bank, a Texas banking association (“Westbound”), in exchange for a combination of cash and shares of the Company’s common stock amounting to total consideration of $35,991. Under the terms of the acquisition, the Company issued 899,816 shares of the Company’s common stock in exchange for 2,311,952 shares of Westbound, representing 100% of the outstanding shares of common and preferred stock of Westbound. With the acquisition, the Company has expanded its market into the Houston metropolitan region. Results of operations of the acquired company were included in the Company’s results beginning June 2, 2018. Acquisition-related costs of $1,101 and $365 are included in other operating expenses in the Company’s consolidated statement of earnings for the nine and three months ended September 30, 2018, respectively. The fair value of the common shares issued as part of the consideration paid for Westbound was determined based upon the closing price of the Company’s common shares on the acquisition date.

Goodwill of $13,418 arising from the acquisition of Westbound consisted largely of synergies and the cost savings resulting from the combining of the operations of the companies. None of the goodwill is expected to be deductible for income tax purposes. The following table summarizes the consideration paid for Westbound and the fair value of the assets acquired and liabilities assumed recognized at the acquisition date:

Consideration:
 
Westbound
Cash
$
6,423

Equity instruments
29,568

Fair Value of total consideration transferred
$
35,991


Cash consideration includes contingent consideration related to an escrow agreement in which $1,750 was retained from amounts paid to Westbound shareholders for payment to Guaranty in the event that certain defined loan relationships experienced actual losses during the three year period following the close of the transaction on June 1, 2018. If the loans defined in the escrow agreement do experience losses, funds from the escrow account will be remitted to Guaranty. If the loans payoff or do not experience losses, funds from the escrow account will be remitted to Westbound shareholders according to terms set forth in the escrow agreement.


 
 
 
(Continued)
14.

GUARANTY BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 
 
 

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition, June 1, 2018.
 
Westbound
Cash and due from banks
$
24,927

Investment securities available for sale
15,264

Loans, net of discount
154,687

Accrued interest receivable
651

Premises and equipment
8,625

Nonmarketable equity securities

Core deposit intangible
2,700

Other assets
9,205

Total assets acquired
216,059

 
 
Non-interest bearing deposits
40,595

Interest bearing deposits
140,826

Federal Home Loan Bank advances
10,500

Accrued interest and other liabilities
1,565

Total liabilities assumed
193,486

 
 
Net assets acquired
22,573

 
 
Total consideration paid
35,991

 
 
Goodwill
$
13,418


The fair value of net assets acquired includes fair value adjustments to certain receivables that were not considered impaired as of the acquisition date (“acquired performing loans”). The fair value adjustments were determined using discounted contractual cash flows. However, the Company believes that all contractual cash flows related to these financial instruments will be collected. As such, these receivables were not considered impaired at the acquisition date and were not subject to the guidance relating to purchased credit impaired loans, which have shown evidence of credit deterioration since origination. Acquired performing loans had fair value and gross contractual amounts receivable of $154,687.

NOTE 3 - MARKETABLE SECURITIES

The following tables summarize the amortized cost and fair value of securities available for sale and securities held to maturity as of September 30, 2018 and December 31, 2017 and the corresponding amounts of gross unrealized gains and losses:

 
 
 
(Continued)
15.

GUARANTY BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 
 
 

September 30, 2018
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
Available for sale:
 
 
 
 
 
 
 
Corporate bonds
$
19,762

 
$

 
$
648

 
$
19,114

Municipal securities
15,814

 

 
451

 
15,363

Mortgage-backed securities
91,208

 

 
4,447

 
86,761

Collateralized mortgage obligations
115,125

 

 
3,985

 
111,140

Total available for sale
$
241,909

 
$

 
$
9,531

 
$
232,378

 
 
 
 
 
 
 
 
Held to maturity:
 
 
 
 
 
 
 
Municipal securities
$
142,419

 
$
710

 
$
2,420

 
$
140,709

Mortgage-backed securities
17,871

 
77

 
611

 
17,337

Collateralized mortgage obligations
4,549

 
46

 
45

 
4,550

Total held to maturity
$
164,839

 
$
833

 
$
3,076

 
$
162,596


December 31, 2017
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
Available for sale:
 
 
 
 
 
 
 
Corporate bonds
$
18,823

 
$
64

 
$
50

 
$
18,837

Municipal securities
7,746

 

 
200

 
7,546

Mortgage-backed securities
92,471

 

 
1,793

 
90,678

Collateralized mortgage obligations
116,809

 
5

 
1,503

 
115,311

Total available for sale
$
235,849

 
$
69

 
$
3,546

 
$
232,372

 
 
 
 
 
 
 
 
Held to maturity:
 
 
 
 
 
 
 
Municipal securities
$
146,496

 
$
2,244

 
$
218

 
$
148,522

Mortgage-backed securities
22,026

 
199

 
230

 
21,995

Collateralized mortgage obligations
6,162

 
111

 

 
6,273

Total held to maturity
$
174,684

 
$
2,554

 
$
448

 
$
176,790

Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. The Company did not record any OTTI losses on any of its securities during the nine months ended September 30, 2018 or for the year ended December 31, 2017.


 
 
 
(Continued)
16.

GUARANTY BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 
 
 

Information pertaining to securities with gross unrealized losses as of September 30, 2018 and December 31, 2017 aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position is detailed in the following tables:
 
Less Than 12 Months
 
12 Months or Longer
 
Total
September 30, 2018
Gross
Unrealized
Losses
 
Estimated
Fair
Value
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
Available for sale:
 
 
 
 
 
 
 
 
 
 
 
Corporate bonds
$
(648
)
 
$
19,114

 
$

 
$

 
$
(648
)
 
$
19,114

Municipal securities
(65
)
 
7,557

 
(386
)
 
7,289

 
(451
)
 
14,846

Mortgage-backed securities
(469
)
 
15,439

 
(3,978
)
 
71,322

 
(4,447
)
 
86,761

Collateralized mortgage obligations
(2,126
)
 
68,879

 
(1,859
)
 
42,261

 
(3,985
)
 
111,140

Total available for sale
$
(3,308
)
 
$
110,989

 
$
(6,223
)
 
$
120,872

 
$
(9,531
)
 
$
231,861

 
 
 
 
 
 
 
 
 
 
 
 
Held to maturity:
 
 
 
 
 
 
 
 
 
 
 
Municipal securities
$
(1,633
)
 
$
75,935

 
$
(787
)
 
$
20,088

 
$
(2,420
)
 
$
96,023

Mortgage-backed securities
(232
)
 
6,236

 
(379
)
 
8,004

 
(611
)
 
14,240

Collateralized mortgage obligations
(45
)
 
2,363

 

 

 
(45
)
 
2,363

Total held to maturity
$
(1,910
)
 
$
84,534

 
$
(1,166
)
 
$
28,092

 
$
(3,076
)
 
$
112,626

 
Less Than 12 Months
 
12 Months or Longer
 
Total
December 31, 2017
Gross
Unrealized
Losses
 
Estimated
Fair
Value
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
Available for sale:
 
 
 
 
 
 
 
 
 
 
 
Corporate bonds
$
(50
)
 
$
8,019

 
$

 
$

 
$
(50
)
 
$
8,019

Municipal securities

 

 
(200
)
 
7,546

 
(200
)
 
7,546

Mortgage-backed securities
(658
)
 
42,881

 
(1,135
)
 
47,797

 
(1,793
)
 
90,678

Collateralized mortgage obligations
(1,091
)
 
93,584

 
(412
)
 
21,258

 
(1,503
)
 
114,842

Total available for sale
$
(1,799
)
 
$
144,484

 
$
(1,747
)
 
$
76,601

 
$
(3,546
)
 
$
221,085

 
 
 
 
 
 
 
 
 
 
 
 
Held to maturity:
 
 
 
 
 
 
 
 
 
 
 
Municipal securities
$
(37
)
 
$
9,230

 
$
(181
)
 
$
19,961

 
$
(218
)
 
$
29,191

Mortgage-backed securities
(57
)
 
6,499

 
(173
)
 
9,747

 
(230
)
 
16,246

Collateralized mortgage obligations

 

 

 

 

 

Total held to maturity
$
(94
)
 
$
15,729

 
$
(354
)
 
$
29,708

 
$
(448
)
 
$
45,437


The number of investment positions in an unrealized loss position totaled 203 at September 30, 2018. The securities in a loss position were composed of tax-exempt municipal bonds, corporate bonds, collateralized mortgage obligations and mortgage backed securities. Management believes the unrealized loss on the remaining securities is a function of the movement of interest rates since the time of purchase. Based on evaluation of available evidence, including recent changes in interest rates, credit rating information and information obtained from regulatory filings, management

 
 
 
(Continued)
17.

GUARANTY BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 
 
 

believes the declines in fair value for these securities are temporary. Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment would be reduced and the resulting loss recognized in net income in the period the OTTI is identified. The Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery. The Company does not consider these securities to be OTTI at September 30, 2018.
Mortgage-backed securities and collateralized mortgage obligations are backed by pools of mortgages that are insured or guaranteed by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association or the Government National Mortgage Association.

As of September 30, 2018, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of shareholders’ equity.

Securities with fair values of approximately $233,559 and $245,600 at September 30, 2018 and December 31, 2017, respectively, were pledged to secure public fund deposits and for other purposes as required or permitted by law.

The proceeds from sales of available for sale securities and the associated gains and losses are listed below for:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Proceeds from sales
$
102,356

 
$
199,974

 
$
111,813

 
$
214,736

Gross gains
4

 

 
4

 
38

Gross losses
(3
)
 

 
(54
)
 
(13
)

During the nine months ended September 30, 2017, the Company sold three held-to-maturity municipal securities. The Company sold these municipal securities based upon internal credit analysis, under the belief that they had experienced significant deterioration in creditworthiness. The risk exposure presented by these municipalities had increased beyond acceptable levels, and the Company determined that it was reasonably possible that all amounts due would not be collected. The credit analysis determined that the municipalities had been significantly impacted because their tax bases are heavily reliant on the energy industry relative to other sectors of the economy. Specifically, the revenues of these municipalities have been adversely impacted by the significant decline in energy prices since 2014. The Company believes the sale of these securities were merited and permissible under the applicable accounting guidelines because of the significant deterioration in the creditworthiness of the issuers.

There were no held to maturity securities sold during the three or nine months ended September 30, 2018. Sale of securities held to maturity were as follows for:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2017
Proceeds from sales
$

 
$
923

Amortized cost

 
907

Gross realized gains

 
16

Tax expense related to securities gains/losses

 
(4
)

The contractual maturities at September 30, 2018 of available for sale and held to maturity securities at carrying value and estimated fair value are shown below. The Company invests in mortgage-backed securities and collateralized mortgage obligations that have expected maturities that differ from their contractual maturities. These differences arise because borrowers and/or issuers may have the right to call or prepay their obligation with or without call or prepayment penalties.

 
 
 
(Continued)
18.

GUARANTY BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 
 
 

 
Available for Sale
 
Held to Maturity
September 30, 2018
Amortized
Cost
 
Estimated
Fair
Value
 
Amortized
Cost
 
Estimated
Fair
Value
Due within one year
$

 
$

 
$
769

 
$
768

Due after one year through five years
11,234

 
10,926

 
19,153

 
19,244

Due after five years through ten years
16,668

 
16,262

 
42,448

 
42,774

Due after ten years
7,674

 
7,289

 
80,049

 
77,923

Mortgage-backed securities
91,208

 
86,761

 
17,871

 
17,337

Collateralized mortgage obligations
115,125

 
111,140

 
4,549

 
4,550

Total Securities
$
241,909

 
$
232,378

 
$
164,839

 
$
162,596


 
 
 
(Continued)
19.

GUARANTY BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 
 
 

NOTE 4 - LOANS AND ALLOWANCE FOR LOAN LOSSES

The following table summarizes the Company’s loan portfolio by type of loan as of:
 
September 30, 2018
 
December 31, 2017
Commercial and industrial
$
248,758

 
$
197,508

Real estate:
 
 
 
Construction and development
229,307

 
196,774

Commercial real estate
599,153

 
418,137

Farmland
65,209

 
59,023

1-4 family residential
392,456

 
374,371

Multi-family residential
38,523

 
36,574

Consumer
53,947

 
51,267

Agricultural
24,184

 
25,596

Overdrafts
326

 
294

Total loans
1,651,863

 
1,359,544

Net of:
 
 
 
Deferred loan fees
727

 
1,094

Allowance for loan losses
(14,441
)
 
(12,859
)
Total net loans
$
1,638,149

 
$
1,347,779

The following tables present the activity in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method for the nine months ended September 30, 2018, for the year ended December 31, 2017 and for the nine months ended September 30, 2017:
For the Nine Months Ended September 30, 2018
Commercial
and
industrial
 
Construction
and
development
 
Commercial
real
estate
 
Farmland
 
1-4 family
residential
 
Multi-family
residential
 
Consumer
 
Agricultural
 
Overdrafts
 
Total
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
1,581

 
$
1,724

 
$
4,585

 
$
523

 
$
3,022

 
$
629

 
$
602

 
$
187

 
$
6

 
$
12,859

Provision for loan losses
138

 
119

 
1,329

 
100

 
(161
)
 
41

 
101

 
(3
)
 
86

 
1,750

Loans charged-off
(66
)
 

 
(32
)
 

 
(19
)
 

 
(175
)
 
(2
)
 
(117
)
 
(411
)
Recoveries
54

 

 

 

 
49

 

 
41

 
65

 
34

 
243

Ending balance
$
1,707

 
$
1,843

 
$
5,882

 
$
623

 
$
2,891

 
$
670

 
$
569

 
$
247

 
$
9

 
$
14,441

Allowance ending balance:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
315

 
$

 
$
61

 
$
74

 
$
4

 
$

 
$

 
$

 
$

 
$
454

Collectively evaluated for impairment
1,392

 
1,843

 
5,821

 
549

 
2,887

 
670

 
569

 
247

 
9

 
13,987

Ending balance
$
1,707

 
$
1,843

 
$
5,882

 
$
623

 
$
2,891

 
$
670

 
$
569

 
$
247

 
$
9

 
$
14,441

Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
1,584

 
$
1,684

 
$
6,360

 
$
218

 
$
1,571

 
$

 
$

 
$
409

 
$

 
$
11,826

Collectively evaluated for impairment
247,174

 
227,623

 
592,793

 
64,991

 
390,885

 
38,523

 
53,947

 
23,775

 
326

 
1,640,037

Ending balance
$
248,758

 
$
229,307

 
$
599,153

 
$
65,209

 
$
392,456

 
$
38,523

 
$
53,947

 
$
24,184

 
$
326

 
$
1,651,863


 
 
 
(Continued)
20.

GUARANTY BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
 
 
 

For the year ended December 31, 2017
Commercial
and
industrial
 
Construction
and
development
 
Commercial
real
estate
 
Farmland
 
1-4 family
residential
 
Multi-family
residential
 
Consumer
 
Agricultural
 
Overdrafts
 
Total
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
1,592

 
$
1,161

 
$
3,264

 
$
482

 
$
3,960

 
$
281

 
$
585

 
$
153

 
$
6

 
$
11,484

Provision for loan losses
272

 
563

 
1,405

 
41

 
(418
)
 
348

 
253

 
276

 
110

 
2,850

Loans charged-off
(1,080
)
 

 
(84
)
 

 
(543
)
 

 
(344
)
 
(242
)
 
(165
)
 
(2,458
)
Recoveries
797

 

 

 

 
23

 

 
108

 

 
55

 
983

Ending balance
$
1,581

 
$
1,724

 
$
4,585

 
$
523

 
$
3,022

 
$
629

 
$
602

 
$
187

 
$
6

 
$
12,859

Allowance ending balance:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
17

 
$

 
$
27

 
$
85

 
$
5

 
$

 
$

 
$

 
$

 
$
134

Collectively evaluated for impairment
1,564

 
1,724

 
4,558

 
438

 
3,017

 
629

 
602

 
187

 
6

 
12,725

Ending balance
$
1,581

 
$
1,724

 
$
4,585

 
$
523

 
$
3,022

 
$
629

 
$
602

 
$
187