(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Large accelerated filer ☐ |
|
Non-accelerated filer ☐ |
Smaller reporting company |
Emerging growth company |
Page |
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PART I |
||
3 |
||
Item 1. |
6 |
|
Item 1A. |
22 |
|
Item 1B. |
32 |
|
Item 2. |
32 |
|
Item 3. |
32 |
|
Item 4. |
32 |
|
PART II |
||
Item 5. |
33 |
|
Item 6. |
36 |
|
Item 7. |
37 |
|
Item 7A. |
67 |
|
Item 8. |
70 |
|
Item 9. |
113 |
|
Item 9A. |
113 |
|
Item 9B. |
114 |
|
PART III |
||
Item 10. |
115 |
|
Item 11. |
116 |
|
Item 12. |
116 |
|
Item 13. |
116 |
|
Item 14. |
116 |
|
PART IV |
||
Item 15. |
117 |
|
Item 16. |
118 |
|
119 |
• | Paycheck Protection Program (“PPP”) … The Small Business Administration (“SBA”) was directed by Congress to provide loans to small businesses with less than 500 employees to assist these businesses in meeting their payroll and other financial obligations over the next several months (H.R. 133 reduced the number of employees to 300 for “second draw” PPP loans). These government guaranteed loans are made with an interest rate of 1%, a risk weight of 0% under risk-based capital rules, have a term of 2 to 5 years, and under certain conditions the SBA can forgive them after eight or twenty-four weeks. Farmers & Merchants Bank of Central California has actively participated in the PPP, and since April 2020 we have funded $347.4 million of loans for 1,540 of our small business customers. As of December 31, 2020 $224.3 million of these loans remain outstanding. Although these loans carry a nominal interest rate of 1%, the SBA will pay the banks an origination fee of 1-5% depending on the size of the loan. All fees have been capitalized and are being amortized over the life of the loans. The Company has collected $11.3 million in fees from the SBA, and as of December 31, 2020, $6.7 million of these fees have been accreted into income. Since these loans are currently in the process of being forgiven by the SBA, the income statement impact to the Company in early 2021 could be significant. The Company is currently accepting applications for the second round of the PPP, but does not currently expect anywhere near the volume levels experienced in the first round. |
• | Main Street Lending Program (“MSLP”) … The Federal Reserve Bank is administering a program to provide up to $600 billion of credit to small and medium-sized eligible businesses that were in sound financial condition before COVID-19 and that were either unable to access the PPP or that require additional financial support after receiving a PPP loan. These loans are not forgivable. The MSLP offers loans up to $300 million for businesses with up to 15,000 employees or $5 billion in annual revenues. Terms are five years, interest rate of LIBOR plus 3%, and deferral of principal for two years and interest for one year. If sold, lenders are required to retain 5% of each loan with the remaining 95% sold to the Federal Reserve Bank. The Company has registered as an eligible lender under the MSLP, but has not yet used the program. |
• | Temporary Relief from Troubled Debt Restructurings … The CARES Act and H.R. 133 provide financial institutions, under specific circumstances, the opportunity to temporarily suspend certain requirements under generally accepted accounting principles related to troubled debt restructurings (“TDR”) for a limited period of time to account for the effects of COVID-19. Farmers & Merchants Bank of Central California has, and continues to, actively work with existing borrowers to restructure loans, primarily for up to six months, moving to either interest only payments or full deferral of principal and interest payments. After the deferral period ends, any deferred amounts would then be added to the final principal balance. We believe that these actions will assist these borrowers in getting through these difficult times, but no guaranties can be made that at some time in the future these loans will not be required to be accounted for as a TDR. |
ꟷ | $7.3 million have paid-off or paid-down; |
ꟷ | $137.6 million have resumed full principal and interest payments; |
ꟷ | $129.0 million are making interest only payments; and |
ꟷ | $3.7 million remain in full payment deferral. |
• | Foreclosure Actions … The CARES Act and H.R. 133 restrict the ability of financial institutions to exercise their foreclosure rights on residential and multi-family properties backed by federally guaranteed mortgage loans. The State of California has gone further and temporarily suspended all residential and commercial foreclosures through June 30, 2021 (and it is assumed at the current time that this will be extended before it expires). The Company is working with its borrowers when they make requests to defer payments on their mortgage loans. |
• | CECL Implementation Deferral … The Company was originally scheduled to implement ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments (“CECL”) as of January 1, 2020. The CARES Act and H.R. 133 provide the election to defer CECL implementation until January 1, 2022. In addition, the national banking regulators have issued a joint statement allowing financial institutions to mitigate the effects of CECL in their regulatory capital calculations for up to two years. The Company has elected to delay CECL implementation. |
• | Paycheck Protection Program Liquidity Facility (“PPPLF”) … The Federal Reserve Bank has developed a loan program to neutralize the liquidity impact to financial institutions of funding loans made under the PPP. Banks may pledge their PPP loans on a non-recourse basis and borrow against these loans for a period of up to two years at a fixed rate of .35%. Furthermore, since these FRB borrowings are on a non-recourse basis, the loans will not be counted under the calculation of leverage capital ratios. Since Farmers & Merchants Bank of Central California has significant liquidity at the current time, no borrowings have been made under the PPPLF. The Company has until March 31, 2021 to borrow under this facility. |
• | We may not be able to maintain staff levels in order to operate key activities of our business. |
• | Our earnings may be affected by borrowers that cannot make payments on their loans. We have credit exposure to industries that have been impacted by either: (1) the public’s changing habits in response to the risks of COVID-19 (e.g., hotels, movie theaters, health clubs and restaurants); or (2) continuing levels of “shelter-in-place” orders imposed by local, state and federal officials (e.g., small businesses determined to be “non-essential”). |
• | Our liquidity position may be affected as a result of significant and unusual deposit outflows or loan drawdowns. |
• | Liquidity consisting of $318 million of Fed Funds Sold and $877 million of Investment Securities; |
• | Strong Asset Quality as reflected by only $495,000 of non-performing loans, and a negligible delinquency ratio of .016% of total loans; |
• | Risk Based Capital Ratio of 12.59%; |
• | Allowance for Credit Losses of $58.9 million or 1.89% of total loans and leases (2.04% exclusive of government fully guaranteed loans issued under the SBA’s PPP); and |
• | ROAA of 1.39% and ROAE of 14.76% in the fourth quarter of 2020. |
Item 1. | Business |
• | The Sacramento Metropolitan Statistical Area (“MSA”), with branches in Sacramento, Elk Grove, Galt and Walnut Grove. This MSA has a Population of 2.4 million and a Per Capita Income of approximately $58,843. The MSA includes significant employment in the following sectors: government, education & health trade, and transportation & utilities. Unemployment currently stands at 6.7%. |
• | The Stockton-Lodi MSA, with branches in Lodi, Linden, Stockton, Lockeford and Manteca. This MSA has a Population of 0.76 million and a Per Capita Income of approximately $47,139. The MSA includes significant employment in the following sectors: trade, transportation, and utilities, government, and education and health services. Unemployment currently stands at 9.0%. |
• | The Modesto MSA, with branches in Modesto, Riverbank and Turlock. This MSA has a Population of 0.55 million and a Per Capita Income of approximately $45,742. The MSA includes significant employment in the following sectors: trade, transportation and utilities, educational & health services, and government. Unemployment currently stands at 8.3%. |
• | The Merced MSA, with branches in Hilmar and Merced. This MSA has a Population of 0.28 million and a Per Capita Income of approximately $41,077. The MSA includes significant employment in the following sectors: government, trade, transportation and utilities and farming. Unemployment currently stands at 9.0%. |
• | creating a Financial Stability Oversight Council tasked with identifying and monitoring systemic risks in the financial system; |
• | creating the Consumer Financial Protection Bureau (“CFPB”), which is responsible for implementing, examining and enforcing compliance with federal consumer financial protection laws; |
• | requiring the FDIC to make its capital requirements for insured depository institutions countercyclical, so that capital requirements increase in times of economic expansion and decrease in times of economic contraction; |
• | imposing more stringent capital requirements on bank holding companies and subjecting certain activities, including interstate mergers and acquisitions, to heightened capital conditions; |
• | changing the assessment base for federal deposit insurance from the amount of the insured deposits held by the depository institution to the depository institution’s average total consolidated assets less tangible equity, eliminating the ceiling on the size of the FDIC’s Deposit Insurance Fund and increasing the floor of the size of the FDIC’s Deposit Insurance Fund; |
• | eliminating all remaining restrictions on interstate banking by authorizing state banks to establish de novo banking offices in any state that would permit a bank chartered in that state to open a banking office at that location; |
• | repealing the federal prohibitions on the payment of interest on demand deposits, thereby permitting depository institutions to pay interest on business transaction and other accounts; and |
• | in the so-called “Volcker Rule,” subject to numerous exceptions, prohibiting depository institutions and affiliates from certain investments in, and sponsorship of, hedge funds and private equity funds and from engaging in proprietary trading. |
• | 4.0% Tier 1 leverage ratio; |
• | 4.5% CET1 to risk-weighted assets; |
• | 6.0% Tier 1 capital (that is, CET1 plus Additional Tier 1 capital) to risk-weighted assets; and |
• | 8.0% total capital (that is, Tier 1 capital plus Tier 2 capital) to risk-weighted assets. |
• | 4.0% Tier 1 leverage ratio; |
• | 4.5% CET1 to risk-weighted assets, plus the capital conservation buffer, effectively resulting in a minimum ratio of CET1 to risk-weighted assets of at least 7%; |
• | 6.0% Tier 1 capital to risk-weighted assets, plus the capital conservation buffer, effectively resulting in a minimum Tier 1 capital ratio of at least 8.5%; and |
• | 8.0% total capital to risk-weighted assets, plus the capital conservation buffer, effectively resulting in a minimum total capital ratio of at least 10.5%. |
• | consistent with the Basel I risk-based capital rules, assigning exposures secured by single-family residential properties to either a 50% risk weight for first-lien mortgages that meet prudent underwriting standards or a 100% risk weight category for all other mortgages; |
• | providing for a 20% credit conversion factor for the unused portion of a commitment with an original maturity of one year or less that is not unconditionally cancellable (set at 0% under the Basel I risk-based capital rules); |
• | assigning a 150% risk weight to all exposures that are nonaccrual or 90 days or more past due (set at 100% under the Basel I risk-based capital rules), except for those secured by single-family residential properties, which will be assigned a 100% risk weight, consistent with the Basel I risk-based capital rules; |
• | applying a 150% risk weight instead of a 100% risk weight for certain high volatility commercial real estate acquisition, development and construction loans; and |
• | applying a 250% risk weight to the portion of mortgage servicing rights and deferred tax assets arising from temporary differences that could not be realized through net operating loss carrybacks that are not deducted from CET1 capital (set at 100% under the Basel I risk-based capital rules). |
Capital Category |
Total Risk Based Capital Ratio |
Tier 1 Risk-Based Capital Ratio |
Common Equity Tier 1 (CET1) Capital Ratio |
Leverage Ratio |
Tangible Equity to Assets |
Supplemental Leverage Ratio |
Well Capitalized |
10% or greater |
8% or greater |
6.5% or greater |
5% or greater |
n/a |
n/a |
Adequately Capitalized |
8% or greater |
6% or greater |
4.5% or greater |
4% or greater |
n/a |
3% or greater |
Undercapitalized |
Less than 8% |
Less than 6% |
Less than 4.5% |
Less than 4% |
n/a |
Less than 3% |
Significantly Undercapitalized |
Less than 6% |
Less than 4% |
Less than 3% |
Less than 3% |
n/a |
n/a |
Critically Undercapitalized |
n/a |
n/a |
n/a |
n/a |
Less than 2% |
n/a |
• | control of any other bank or bank holding company or all or substantially all the assets thereof; or |
• | more than 5% of the voting shares of a bank or bank holding company which is not already a subsidiary. |
• | inability to maintain or increase net interest margin; |
• | inability to control non-interest expense, including, but not limited to, rising employee and healthcare costs and the costs of regulatory compliance; |
• | inability to maintain or increase non-interest income; |
• | the need to raise additional capital to support growth and regulatory requirements; and |
• | continuing ability to expand through de novo branching or otherwise. |
• | unexpected problems with operations, personnel, technology or credit; |
• | loss of customers and employees of the acquiree; |
• | difficulty in working with the acquiree's employees and customers; |
• | the assimilation of the acquiree's operations, culture and personnel; |
• | instituting and maintaining uniform standards, controls, procedures and policies; and |
• | litigation risk not discovered during the due diligence period. |
• | the proliferation of new technologies, and the use of the Internet and telecommunications technologies to conduct financial transactions; |
• | these threats arise from numerous sources, not all of which are in our control, including among others human error, fraud or malice on the part of employees or third-parties, accidental technological failure, electrical or telecommunication outages, failures of computer servers or other damage to our property or assets, natural disasters or severe weather conditions, or terrorist acts; |
• | the techniques used in cyber-attacks change frequently and may not be recognized until launched or until well after the breach has occurred; |
• | the increased sophistication and activities of organized crime groups, hackers, terrorist organizations, hostile foreign governments, disgruntled employees or vendors, activists and other external parties, including those involved in corporate espionage; |
• | the vulnerability of systems to third-parties seeking to gain access to such systems either directly or using equipment or security passwords belonging to employees, customers, third-party service providers or other users of our systems; and |
• | our frequent transmission of sensitive information to, and storage of such information by, third-parties, including our vendors and regulators, and possible weaknesses that go undetected in our data systems notwithstanding the testing we conduct of those systems. |
• | actual or anticipated variations in quarterly results of operations; |
• | operating and stock price performance of other companies that investors deem comparable to our Company; |
• | news reports relating to trends, concerns and other issues in the financial services industry; |
• | available investment liquidity in our market area since our stock is not listed on any exchange; and |
• | perceptions in the marketplace regarding our Company and/or its competitors. |
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Calendar Quarter |
High |
Low |
Close |
Cash Dividends Declared (Per Share) |
|||||||||||||
2020 |
Fourth quarter |
$ |
770 |
$ |
701 |
$ |
760 |
$ |
7.50 |
||||||||
Third quarter |
770 |
695 |
725 |
- |
|||||||||||||
Second quarter |
800 |
626 |
706 |
7.25 |
|||||||||||||
First quarter |
800 |
650 |
685 |
- |
Calendar Quarter |
High |
Low |
Close |
Cash Dividends Declared (Per Share) |
|||||||||||||
2019 |
Fourth quarter |
$ |
804 |
$ |
755 |
$ |
768 |
$ |
7.15 |
||||||||
Third quarter |
850 |
757 |
780 |
- |
|||||||||||||
Second quarter |
950 |
700 |
795 |
7.05 |
|||||||||||||
First quarter |
788 |
695 |
725 |
- |
Item 6. | Selected Financial Data |
Summary of Income: |
2020 |
2019 |
2018 |
2017 |
2016 |
|||||||||||||||
Total Interest Income |
$ |
158,652 |
$ |
153,708 |
$ |
133,453 |
$ |
114,612 |
$ |
99,266 |
||||||||||
Total Interest Expense |
9,491 |
13,194 |
7,950 |
6,289 |
4,196 |
|||||||||||||||
Net Interest Income |
149,161 |
140,514 |
125,503 |
108,323 |
95,070 |
|||||||||||||||
Provision for Credit Losses |
4,500 |
200 |
5,533 |
2,850 |
6,335 |
|||||||||||||||
Net Interest Income After Provision for Credit Losses |
144,661 |
140,314 |
119,970 |
105,473 |
88,735 |
|||||||||||||||
Total Non-Interest Income |
15,696 |
17,241 |
15,219 |
16,762 |
15,257 |
|||||||||||||||
Total Non-Interest Expense |
82,406 |
82,242 |
75,459 |
67,754 |
58,172 |
|||||||||||||||
Income Before Income Taxes |
77,951 |
75,313 |
59,730 |
54,481 |
45,820 |
|||||||||||||||
Provision for Income Taxes |
19,217 |
19,277 |
14,203 |
26,111 |
16,097 |
|||||||||||||||
Net Income |
$ |
58,734 |
$ |
56,036 |
$ |
45,527 |
$ |
28,370 |
$ |
29,723 |
||||||||||
Balance Sheet Data: |
||||||||||||||||||||
Total Assets |
$ |
4,550,453 |
$ |
3,721,830 |
$ |
3,434,243 |
$ |
3,075,452 |
$ |
2,922,121 |
||||||||||
Loans & Leases |
3,099,592 |
2,673,027 |
2,571,241 |
2,215,295 |
2,177,601 |
|||||||||||||||
Allowance for Credit Losses |
58,862 |
55,012 |
55,266 |
50,342 |
47,919 |
|||||||||||||||
Investment Securities |
876,665 |
567,615 |
548,962 |
536,056 |
506,372 |
|||||||||||||||
Goodwill |
11,183 |
11,183 |
11,183 |
- |
- |
|||||||||||||||
Core Deposit Intangible |
4,013 |
4,640 |
5,278 |
836 |
946 |
|||||||||||||||
Deposits |
4,060,267 |
3,278,019 |
3,062,832 |
2,723,228 |
2,581,711 |
|||||||||||||||
Shareholders' Equity |
423,665 |
369,296 |
311,215 |
299,660 |
279,981 |
|||||||||||||||
Selected Ratios: |
||||||||||||||||||||
Return on Average Assets |
1.43 |
% |
1.61 |
% |
1.45 |
% |
0.94 |
% |
1.12 |
% |
||||||||||
Return on Average Equity |
14.60 |
% |
16.77 |
% |
14.80 |
% |
9.66 |
% |
11.17 |
% |
||||||||||
Dividend Payout Ratio |
19.92 |
% |
20.02 |
% |
24.49 |
% |
38.71 |
% |
35.25 |
% |
||||||||||
Average Loans & Leases to Average Deposits |
80.77 |
% |
84.38 |
% |
84.36 |
% |
82.18 |
% |
88.63 |
% |
||||||||||
Average Equity to Average Assets |
9.78 |
% |
9.61 |
% |
9.66 |
% |
9.77 |
% |
10.05 |
% |
||||||||||
Period-end Shareholders' Equity to Total Assets |
9.31 |
% |
9.92 |
% |
9.06 |
% |
9.74 |
% |
9.58 |
% |
||||||||||
Basic and Diluted Per Share Data: |
||||||||||||||||||||
Earnings (1) |
$ |
74.03 |
$ |
71.18 |
$ |
56.82 |
$ |
35.03 |
$ |
37.44 |
||||||||||
Cash Dividends Per Share |
$ |
14.75 |
$ |
14.20 |
$ |
13.90 |
$ |
13.55 |
$ |
13.10 |
||||||||||
Book Value Per Share at Year End (2) |
$ |
536.53 |
$ |
465.68 |
$ |
397.10 |
$ |
368.90 |
$ |
346.80 |
(1) | Based on the weighted average number of shares outstanding of 793,337, 787,227, 801,229, 809,834, and 793,970 for the years ended December 31, 2020, 2019, 2018, 2017, and 2016, respectively. |
(2) | Based on the year-end number of shares outstanding of 789,646, 793,033, 783,721, 812,304, and 807,329 for the years ended December 31, 2020, 2019, 2018, 2017, and 2016, respectively. |
Item 7. | Management's Discussion and Analysis of Financial Condition and Results of Operations |
Financial Performance Indicator |
2020 |
2019 |
2018 |
2017 |
2016 |
|||||||||||||||
Pre Tax Income |
$ |
77,951 |
$ |
75,313 |
$ |
59,730 |
$ |
54,481 |
$ |
45,820 |
||||||||||
Income Tax Expense |
19,217 |
19,277 |
14,203 |
26,111 |
16,097 |
|||||||||||||||
Effect of Income Tax Rate Change |
||||||||||||||||||||
DTA Re-measurement |
- |
- |
- |
(6,300 |
) |
- |
||||||||||||||
Adjusted Income Tax Expense |
19,217 |
19,277 |
14,203 |
19,811 |
16,097 |
|||||||||||||||
Non-GAAP Adjusted Net Income |
58,734 |
56,036 |
45,527 |
34,670 |
29,723 |
|||||||||||||||
Effect of Income Tax Rate Change |
||||||||||||||||||||
DTA Re-measurement |
- |
- |
- |
(6,300 |
) |
- |
||||||||||||||
Net Income (See Note 1) |
$ |
58,734 |
$ |
56,036 |
$ |
45,527 |
$ |
28,370 |
$ |
29,723 |
||||||||||
Total Assets |
4,550,453 |
3,721,830 |
3,434,243 |
3,075,452 |
2,922,121 |
|||||||||||||||
Total Loans & Leases |
3,099,592 |
2,673,027 |
2,571,241 |
2,215,295 |
2,177,601 |
|||||||||||||||
Total Deposits |
4,060,267 |
3,278,019 |
3,062,832 |
2,723,228 |
2,581,711 |
|||||||||||||||
Total Shareholders’ Equity |
423,665 |
369,296 |
311,215 |
299,660 |
279,981 |
|||||||||||||||
Total Risk-Based Capital Ratio |
12.60 |
% |
12.40 |
% |
11.40 |
% |
13.07 |
% |
12.80 |
% |
||||||||||
Non-Performing Loans as a % of Total Loans |
0.02 |
% |
0.00 |
% |
0.00 |
% |
0.00 |
% |
0.14 |
% |
||||||||||
Substandard Loans as a % of Total Loans |
0.60 |
% |
0.61 |
% |
0.57 |
% |
0.40 |
% |
0.29 |
% |
||||||||||
Net Charge-Offs (Recoveries) to Average Loans |
0.02 |
% |
0.02 |
% |
0.03 |
% |
0.02 |
% |
0.00 |
% |
||||||||||
Loan Loss Allowance as a % of Total Loans |
1.89 |
% |
2.05 |
% |
2.14 |
% |
2.27 |
% |
2.19 |
% |
||||||||||
Return on Average Assets |
1.43 |
% |
1.61 |
% |
1.45 |
% |
0.94 |
% |
1.12 |
% |
||||||||||
Adjusted Return on Average Assets |
1.43 |
% |
1.61 |
% |
1.45 |
% |
1.15 |
% |
1.12 |
% |
||||||||||
Return on Average Equity |
14.60 |
% |
16.77 |
% |
14.80 |
% |
9.66 |
% |
11.17 |
% |
||||||||||
Adjusted Return on Average Equity |
14.60 |
% |
16.77 |
% |
14.80 |
% |
11.79 |
% |
11.17 |
% |
||||||||||
Earnings Per Share |
74.03 |
71.18 |
56.82 |
35.03 |
37.44 |
|||||||||||||||
Adjusted Earnings Per Share |
74.03 |
71.18 |
56.82 |
42.81 |
37.44 |
|||||||||||||||
Cash Dividends Per Share |
14.75 |
14.20 |
13.90 |
13.55 |
13.10 |
|||||||||||||||
Cash Dividends Declared |
11,700 |
11,221 |
11,151 |
10,982 |
10,478 |
• | Net income over the five-year period totaled $218 million. |
• | Return on Average Assets averaged 1.31% over the five-year period. |
• | Total assets increased 74% from $2.6 billion at December 31, 2015 to $4.6 billion at December 31, 2020. |
• | Total loans & leases increased 55.3% from $2.0 billion at December 31, 2015 to $3.1 billion at December 31, 2020. |
• | Total deposits increased 78.3% from $2.3 billion at December 31, 2015 to $4.1 billion at December 31, 2020. |
• | In 2020, the Company earned $58.7 million for a return on average assets of 1.43%. |
• | In 2020, the Company increased its cash dividend per share by 3.9% over 2019 levels, and our strong financial performance has allowed us to increase dividends every year during this five-year period. |
• | The Company’s total risk based capital ratio was 12.60% at December 31, 2020, and the Bank achieved the highest regulatory classification of “well capitalized” in each of the previous five years. See “Financial Condition – Capital.” |
• | The Company’s asset quality remains very strong at the present time, when measured by: (1) net charge-offs at 0.02% of average loans & leases during 2020; (2) non-accrual loans of $495,000 at December 31, 2020; and (3) substandard loans & leases totaling 0.60% of total loans & leases at December 31, 2020. See “Results of Operations – Provision and Allowance for Credit Losses” and “Financial Condition – Classified Loans & Leases and Non-Performing Assets.” |
• | The continuing impact of COVID-19. |
• | The Company’s earnings are heavily dependent on its net interest margin, which is sensitive to such factors as: (1) market interest rates; (2) the mix of our earning assets and interest-bearing liabilities; and (3) competitor pricing strategies. Since early 2020 market interest rates have declined and remain at very low levels. This has adversely impacted the Company’s NIM, and will, in all probability, continue to place pressure on NIM in 2021. |
• | The Company’s results are impacted by changes in the credit quality of its borrowers. Substandard loans & leases totaled $18.6 million or 0.60% of total loans & leases at December 31, 2020 vs. $16.2 million or 0.61% of total loans & leases at December 31, 2019. Management believes, based on information currently available, that these levels are adequately covered by the Company’s $58.9 million allowance for credit losses as of December 31, 2020. See “Results of Operations - Provision and Allowance for Credit Losses” and “Financial Condition – Classified Loans & Leases and Non-Performing Assets.” The Company’s provision for credit losses was $4.5 million in 2020, compared to $200,000 in 2019 and $5.5 million in 2018. See “Item 1A. Risk Factors.” |
• | Since the passage of the Dodd-Frank Act in 2010, Congress has implemented broad changes to the regulation of consumer financial products and the financial services industry as a whole. These changes have, and will continue to have, a significant effect on the Company’s product offerings, pricing and profitability in areas such as debit and credit cards, home mortgages and deposit service charges. |
• | The Company has: (i) expanded its geographic footprint through de novo branch expansion in Walnut Creek, Napa, Lockeford and Concord, CA and through acquisition in Manteca, Riverbank, Rio Vista, and Walnut Grove, CA; and (ii) established equipment leasing as a new line of business. Although Management believes that these initiatives will result in increased asset growth and earnings, along with reduced concentration risks, the start-up costs related to staff and facilities are significant and will take time to recoup. |
• | The Company benefited significantly in 2018 and 2019, and should continue to benefit in future years, from the reduction of the federal corporate tax rate from 35% to 21% pursuant to the recently enacted Tax Cuts and Jobs Act. However, if the new Biden administration increases federal corporate tax rates it will negatively impact the Company’s future financial results. |
Year Ended December 31, 2020 |
||||||||||||
Assets |
Balance |
Interest |
Rate |
|||||||||
Interest Bearing Deposits with Banks |
$ |
326,247 |
$ |
1,207 |
0.37 |
% |
||||||
Investment Securities: |
||||||||||||
U.S. Treasuries |
21,249 |
356 |
1.68 |
% |
||||||||
U.S. Govt SBA |
9,450 |
116 |
1.23 |
% |
||||||||
Government Agency & Government-Sponsored Entities |
- |
- |
- |
|||||||||
Municipals - Taxable |
12,582 |
513 |
4.08 |
% |
||||||||
Obligations of States and Political Subdivisions - Non-Taxable (1) |
52,736 |
2,109 |
4.00 |
% |
||||||||
Mortgage Backed Securities |
468,306 |
11,193 |
2.39 |
% |
||||||||
Other |
19,323 |
213 |
1.10 |
% |
||||||||
Total Investment Securities |
583,646 |
14,500 |
2.48 |
% |
||||||||
Loans & Leases: (2) |
||||||||||||
Real Estate |
1,921,485 |
95,194 |
4.95 |
% |
||||||||
Home Equity Lines and Loans |
37,952 |
1,828 |
4.82 |
% |
||||||||
Agricultural |
259,132 |
13,049 |
5.04 |
% |
||||||||
Commercial |
372,344 |
17,941 |
4.82 |
% |
||||||||
Consumer (3) |
12,748 |
784 |
6.15 |
% |
||||||||
Other |
228,530 |
8,837 |
3.87 |
% |
||||||||
Leases |
106,293 |
5,750 |
5.41 |
% |
||||||||
Total Loans & Leases |
2,938,484 |
143,383 |
4.88 |
% |
||||||||
Total Earning Assets |
3,848,377 |
$ |
159,090 |
4.13 |
% |
|||||||
Unrealized Gain on Securities Available-for-Sale |
16,289 |
|||||||||||
Allowance for Credit Losses |
(55,804 |
) |
||||||||||
Cash and Due From Banks |
62,089 |
|||||||||||
All Other Assets |
241,586 |
|||||||||||
Total Assets |
$ |
4,112,537 |
||||||||||
Liabilities & Shareholders' Equity |
||||||||||||
Interest Bearing Deposits: |
||||||||||||
Interest Bearing DDA |
$ |
787,306 |
$ |
1,618 |
0.21 |
% |
||||||
Savings and Money Market |
1,128,623 |
2,724 |
0.24 |
% |
||||||||
Time Deposits |
489,246 |
4,771 |
0.98 |
% |
||||||||
Total Interest Bearing Deposits |
2,405,175 |
9,113 |
0.38 |
% |
||||||||
Federal Home Loan Bank Advances |
1 |
- |
0.00 |
% |
||||||||
Subordinated Debt |
10,310 |
378 |
3.67 |
% |
||||||||
Total Interest Bearing Liabilities |
2,415,486 |
$ |
9,491 |
0.39 |
% |
|||||||
Interest Rate Spread (4) |
3.74 |
% |
||||||||||
Demand Deposits (Non-Interest Bearing) |
1,232,874 |
|||||||||||
All Other Liabilities |
61,848 |
|||||||||||
Total Liabilities |
3,710,208 |
|||||||||||
Shareholders' Equity |
402,329 |
|||||||||||
Total Liabilities & Shareholders' Equity |
$ |
4,112,537 |
||||||||||
Impact of Non-Interest Bearing Deposits and Other Liabilities |
0.15 |
% |
||||||||||
Net Interest Income and Margin on Total Earning Assets (5) |
149,599 |
3.89 |
% |
|||||||||
Tax Equivalent Adjustment |
(438 |
) |
||||||||||
Net Interest Income |
$ |
149,161 |
3.88 |
% |
Year Ended December 31, 2019 |
||||||||||||
Assets |
Balance |
Interest |
Rate |
|||||||||
Interest Bearing Deposits with Banks |
$ |
232,623 |
$ |
4,909 |
2.11 |
% |
||||||
Investment Securities: |
||||||||||||
U.S. Treasuries |
27,096 |
537 |
1.98 |
% |
||||||||
U.S. Govt SBA |
13,372 |
329 |
2.46 |
% |
||||||||
Government Agency & Government-Sponsored Entities |
2,108 |
62 |
2.94 |
% |
||||||||
Municipals - Taxable |
6,545 |
344 |
5.26 |
% |
||||||||
Obligations of States and Political Subdivisions - Non-Taxable |
51,872 |
2,079 |
4.01 |
% |
||||||||
Mortgage Backed Securities |
321,240 |
8,466 |
2.64 |
% |
||||||||
Other |
4,850 |
173 |
3.57 |
% |
||||||||
Total Investment Securities |
427,083 |
11,990 |
2.81 |
% |
||||||||
Loans & Leases: |
||||||||||||
Real Estate |
1,736,406 |
93,227 |
5.37 |
% |
||||||||
Home Equity Lines and Loans |
90,423 |
2,316 |
2.56 |
% |
||||||||
Agricultural |
275,472 |
15,423 |
5.60 |
% |
||||||||
Commercial |
364,676 |
19,335 |
5.30 |
% |
||||||||
Consumer |
16,634 |
1,194 |
7.18 |
% |
||||||||
Other |
1,051 |
24 |
2.28 |
% |
||||||||
Leases |
104,896 |
5,718 |
5.45 |
% |
||||||||
Total Loans & Leases |
2,589,558 |
137,237 |
5.30 |
% |
||||||||
Total Earning Assets |
3,249,264 |
$ |
154,136 |
4.74 |
% |
|||||||
Unrealized Gain on Securities Available-for-Sale |
938 |
|||||||||||
Allowance for Credit Losses |
(55,165 |
) |
||||||||||
Cash and Due From Banks |
56,855 |
|||||||||||
All Other Assets |
225,565 |
|||||||||||
Total Assets |
$ |
3,477,457 |
||||||||||
Liabilities & Shareholders' Equity |
||||||||||||
Interest Bearing Deposits: |
||||||||||||
Interest Bearing DDA |
$ |
668,818 |
$ |
2,360 |
0.35 |
% |
||||||
Savings and Money Market |
930,390 |
3,340 |
0.36 |
% |
||||||||
Time Deposits |
519,848 |
6,940 |
1.34 |
% |
||||||||
Total Interest Bearing Deposits |
2,119,056 |
12,640 |
0.60 |
% |
||||||||
Federal Home Loan Bank Advances |
1 |
- |
0.00 |
% |
||||||||
Subordinated Debt |
10,310 |
554 |
5.37 |
% |
||||||||
Total Interest Bearing Liabilities |
2,129,367 |
$ |
13,194 |
0.62 |
% |
|||||||
Interest Rate Spread |
4.12 |
% |
||||||||||
Demand Deposits |
949,695 |
|||||||||||
All Other Liabilities |
64,274 |
|||||||||||
Total Liabilities |
3,143,336 |
|||||||||||
Shareholders' Equity |
334,121 |
|||||||||||
Total Liabilities & Shareholders' Equity |
$ |
3,477,457 |
||||||||||
Impact of Non-Interest Bearing Deposits and Other Liabilities |
0.21 |
% |
||||||||||
Net Interest Income and Margin on Total Earning Assets |
140,942 |
4.34 |
% |
|||||||||
Tax Equivalent Adjustment |
(428 |
) |
||||||||||
Net Interest Income |
$ |
140,514 |
4.32 |
% |
Year Ended December 31, 2018 |
||||||||||||
Assets |
Balance |
Interest |
Rate |
|||||||||
Interest Bearing Deposits with Banks |
$ |
147,700 |
$ |
2,755 |
1.87 |
% |
||||||
Investment Securities: |
||||||||||||
U.S. Treasuries |
64,630 |
939 |
1.45 |
% |
||||||||
U.S. Govt SBA |
22,537 |
445 |
1.97 |
% |
||||||||
Government Agency & Government-Sponsored Entities |
3,057 |
88 |
2.88 |
% |
||||||||
Municipals - Taxable |
665 |
5 |
0.75 |
% |
||||||||
Obligations of States and Political Subdivisions - Non-Taxable |
53,143 |
2,024 |
3.81 |
% |
||||||||
Mortgage Backed Securities |
314,937 |
7,682 |
2.44 |
% |
||||||||
Other |
3,707 |
98 |
2.64 |
% |
||||||||
Total Investment Securities |
462,676 |
11,281 |
2.44 |
% |
||||||||
Loans & Leases |
||||||||||||
Real Estate |
1,642,005 |
83,131 |
5.06 |
% |
||||||||
Home Equity Lines and Loans |
37,086 |
2,041 |
5.50 |
% |
||||||||
Agricultural |
273,178 |
14,067 |
5.15 |
% |
||||||||
Commercial |
291,209 |
15,158 |
5.21 |
% |
||||||||
Consumer |
9,014 |
503 |
5.58 |
% |
||||||||
Other |
1,356 |
31 |
2.29 |
% |
||||||||
Leases |
95,968 |
4,906 |
5.11 |
% |
||||||||
Total Loans & Leases |
2,349,816 |
119,837 |
5.10 |
% |
||||||||
Total Earning Assets |
2,960,192 |
$ |
133,873 |
4.52 |
% |
|||||||
Unrealized Loss on Securities Available-for-Sale |
(8,151 |
) |
||||||||||
Allowance for Credit Losses |
(52,012 |
) |
||||||||||
Cash and Due From Banks |
49,292 |
|||||||||||
All Other Assets |
199,526 |
|||||||||||
Total Assets |
$ |
3,148,847 |
||||||||||
Liabilities & Shareholders' Equity |
||||||||||||
Interest Bearing Deposits |
||||||||||||
Interest Bearing DDA |
$ |
618,674 |
$ |
1,683 |
0.27 |
% |
||||||
Savings and Money Market |
844,729 |
1,798 |
0.21 |
% |
||||||||
Time Deposits |
476,756 |
3,944 |
0.83 |
% |
||||||||
Total Interest Bearing Deposits |
1,940,159 |
7,425 |
0.38 |
% |
||||||||
Federal Home Loan Bank Advances |
36 |
1 |
2.78 |
% |
||||||||
Subordinated Debt |
10,310 |
524 |
5.08 |
% |
||||||||
Total Interest Bearing Liabilities |
1,950,505 |
$ |
7,950 |
0.41 |
% |
|||||||
Interest Rate Spread |
4.11 |
% |
||||||||||
Demand Deposits |
845,165 |
|||||||||||
All Other Liabilities |
45,516 |
|||||||||||
Total Liabilities |
2,841,186 |
|||||||||||
Shareholders' Equity |
307,661 |
|||||||||||
Total Liabilities & Shareholders' Equity |
$ |
3,148,847 |
||||||||||
Impact of Non-Interest Bearing Deposits and Other Liabilities |
0.14 |
% |
||||||||||
Net Interest Income and Margin on Total Earning Assets |
125,923 |
4.25 |
% |
|||||||||
Tax Equivalent Adjustment |
(420 |
) |
||||||||||
Net Interest Income |
$ |
125,503 |
4.24 |
% |
2020 versus 2019 Amount of Increase (Decrease) Due to Change in: |
||||||||||||
Interest Earning Assets |
Volume |
Rate |
Net Chg. |
|||||||||
Interest Bearing Deposits with Banks |
$ |
3,529 |
$ |
(7,230 |
) |
$ |
(3,702 |
) |
||||
Investment Securities: |
||||||||||||
U.S. Treasuries |
(105 |
) |
(76 |
) |
(181 |
) |
||||||
U.S. Govt SBA |
(78 |
) |
(135 |
) |
(213 |
) |
||||||
Government Agency & Government-Sponsored Entities |
(31 |
) |
(31 |
) |
(62 |
) |
||||||
Municipals - Taxable |
223 |
(54 |
) |
169 |
||||||||
Obligations of States and Political Subdivisions - Non-Taxable |
35 |
(5 |
) |
29 |
||||||||
Mortgage Backed Securities |
3,423 |
(696 |
) |
2,727 |
||||||||
Other |
52 |
(13 |
) |
40 |
||||||||
Total Investment Securities |
3,519 |
(1,010 |
) |
2,509 |
||||||||
Loans: |
||||||||||||
Real Estate |
7,147 |
(5,180 |
) |
1,967 |
||||||||
Home Equity |
943 |
(1,431 |
) |
(488 |
) |
|||||||
Agricultural |
(881 |
) |
(1,493 |
) |
(2,374 |
) |
||||||
Commercial |
418 |
(1,811 |
) |
(1,394 |
) |
|||||||
Consumer (1) |
(254 |
) |
(156 |
) |
(410 |
) |
||||||
Other |
8,785 |
29 |
8,813 |
|||||||||
Leases |
72 |
(41 |
) |
32 |
||||||||
Total Loans |
16,229 |
(10,083 |
) |
6,146 |
||||||||
Total Earning Assets |
23,277 |
(18,324 |
) |
4,953 |
||||||||
Interest Bearing Liabilities |
||||||||||||
Interest Bearing Deposits: |
||||||||||||
Transaction |
547 |
(1,290 |
) |
(742 |
) |
|||||||
Savings |
1,147 |
(1,762 |
) |
(616 |
) |
|||||||
Time Deposits |
(390 |
) |
(1,779 |
) |
(2,169 |
) |
||||||
Total Interest Bearing Deposits |
1,304 |
(4,831 |
) |
(3,527 |
) |
|||||||
Other Borrowed Funds |
- |
- |
- |
|||||||||
Subordinated Debt |
- |
(176 |
) |
(176 |
) |
|||||||
Total Interest Bearing Liabilities |
1,304 |
(5,007 |
) |
(3,703 |
) |
|||||||
Total Change |
$ |
21,973 |
$ |
(13,317 |
) |
$ |
8,656 |
2019 versus 2018 Amount of Increase (Decrease) Due to Change in: |
||||||||||||
Interest Earning Assets |
Volume |
Rate |
Net Chg. |
|||||||||
Interest Bearing Deposits with Banks |
$ |
1,753 |
$ |
401 |
$ |
2,154 |
||||||
Investment Securities: |
||||||||||||
U.S. Treasuries |
(1,078 |
) |
676 |
(402 |
) |
|||||||
U.S. Govt SBA |
(294 |
) |
178 |
(116 |
) |
|||||||
Government Agency & Government-Sponsored Entities |
(28 |
) |
2 |
(26 |
) |
|||||||
Municipals - Taxable |
306 |
33 |
339 |
|||||||||
Obligations of States and Political Subdivisions - Non-Taxable |
(66 |
) |
121 |
55 |
||||||||
Mortgage Backed Securities |
156 |
628 |
784 |
|||||||||
Other |
35 |
41 |
76 |
|||||||||
Total Investment Securities |
(969 |
) |
1,679 |
710 |
||||||||
Loans & Leases: |
||||||||||||
Real Estate |
4,920 |
5,176 |
10,096 |
|||||||||
Home Equity Lines and Loans |
438 |
(163 |
) |
275 |
||||||||
Agricultural |
119 |
1,237 |
1,356 |
|||||||||
Commercial |
3,890 |
287 |
4,177 |
|||||||||
Consumer |
516 |
175 |
691 |
|||||||||
Other |
(7 |
) |
- |
(7 |
) |
|||||||
Leases |
474 |
337 |
811 |
|||||||||
Total Loans & Leases |
10,350 |
7,049 |
17,399 |
|||||||||
Total Earning Assets |
11,134 |
9,129 |
20,263 |
|||||||||
Interest Bearing Liabilities |
||||||||||||
Interest Bearing Deposits: |
||||||||||||
Interest Bearing DDA |
145 |
532 |
677 |
|||||||||
Savings and Money Market |
198 |
1,344 |
1,542 |
|||||||||
Time Deposits |
384 |
2,612 |
2,996 |
|||||||||
Total Interest Bearing Deposits |
727 |
4,488 |
5,215 |
|||||||||
Other Borrowed Funds |
(1 |
) |
- |
(1 |
) |
|||||||
Subordinated Debt |
- |
30 |
30 |
|||||||||
Total Interest Bearing Liabilities |
726 |
4,518 |
5,244 |
|||||||||
Total Change |
$ |
10,408 |
$ |
4,611 |
$ |
15,019 |
2020 |
2019 |
2018 |
2017 |
2016 |
||||||||||||||||
Allowance for Credit Losses Beginning of Year |
$ |
55,012 |
$ |
55,266 |
$ |
50,342 |
$ |
47,919 |
$ |
41,523 |
||||||||||
Provision Charged to Expense |
4,500 |
200 |
5,533 |
2,850 |
6,335 |
|||||||||||||||
Charge-Offs: |
||||||||||||||||||||
Commercial Real Estate |
- |
- |
- |
109 |
- |
|||||||||||||||
Agricultural Real Estate |
- |
- |
- |
- |
- |
|||||||||||||||
Real Estate Construction |
- |
- |
- |
- |
- |
|||||||||||||||
Residential 1st Mortgages |
- |
- |
31 |
53 |
21 |
|||||||||||||||
Home Equity Lines and Loans |
7 |
- |
8 |
3 |
46 |
|||||||||||||||
Agricultural |
- |
- |
- |
374 |
- |
|||||||||||||||
Commercial |
1,101 |
592 |
613 |
- |
- |
|||||||||||||||
Consumer & Other |
66 |
83 |
115 |
146 |
105 |
|||||||||||||||
Total Charge-Offs |
1,174 |
675 |
767 |
685 |
172 |
|||||||||||||||
Recoveries: |
||||||||||||||||||||
Commercial Real Estate |
- |
- |
2 |
109 |
2 |
|||||||||||||||
Agricultural Real Estate |
81 |
38 |
- |
- |
- |
|||||||||||||||
Real Estate Construction |
- |
- |
- |
- |
- |
|||||||||||||||
Residential 1st Mortgages |
52 |
13 |
15 |
40 |
26 |
|||||||||||||||
Home Equity Lines and Loans |
78 |
28 |
6 |
8 |
103 |
|||||||||||||||
Agricultural |
- |
- |
61 |
17 |
- |
|||||||||||||||
Commercial |
280 |
90 |
20 |
8 |
47 |
|||||||||||||||
Consumer & Other |
33 |
52 |
54 |
76 |
55 |
|||||||||||||||
Total Recoveries |
524 |
221 |
158 |
258 |
233 |
|||||||||||||||
Net (Charge-Offs) Recoveries |
(650 |
) |
(454 |
) |
(609 |
) |
(427 |
) |
61 |
|||||||||||
Total Allowance for Credit Losses, End of Year |
$ |
58,862 |
$ |
55,012 |
$ |
55,266 |
$ |
50,342 |
$ |
47,919 |
||||||||||
Ratios: |
||||||||||||||||||||
Allowance for Credit Losses to: |
||||||||||||||||||||
Total Loans & Leases at Year End |
1.89 |
% |
2.05 |
% |
2.14 |
% |
2.27 |
% |
2.19 |
% |
||||||||||
Average Loans & Leases |
2.00 |
% |
2.12 |
% |
2.35 |
% |
2.31 |
% |
2.34 |
% |
||||||||||
Consolidated Net (Charge-Offs) Recoveries to: |
||||||||||||||||||||
Total Loans & Leases at Year End |
(0.02 |
%) |
(0.02 |
%) |
(0.02 |
%) |
(0.02 |
%) |
0.00 |
% |
||||||||||
Average Loans & Leases |
(0.02 |
%) |
(0.02 |
%) |
(0.03 |
%) |
(0.02 |
%) |
0.00 |
% |
December 31, 2020 |
Commercial Real Estate |
Agricultural Real Estate |
Real Estate Construction |
Residential 1st Mortgages |
Home Equity Lines & Loans |
Agricultural |
Commercial |
Consumer & Other |
Leases |
Unallocated |
Total |
|||||||||||||||||||||||||||||||||
Year-To-Date Allowance for Credit Losses: |
||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance- January 1, 2020 |
$ |
11,053 |
$ |
15,128 |
$ |
1,949 |
$ |
855 |
$ |
2,675 |
$ |
8,076 |
$ |
11,466 |
$ |
456 |
$ |
3,162 |
$ |
192 |
$ |
55,012 |
||||||||||||||||||||||
Charge-Offs |
- |
- |
- |
- |
(7 |
) |
- |
(1,101 |
) |
(66 |
) |
- |
- |
(1,174 |
) |
|||||||||||||||||||||||||||||
Recoveries |
- |
81 |
- |
52 |
78 |
- |
280 |
33 |
- |
- |
524 |
|||||||||||||||||||||||||||||||||
Provision |
16,626 |
(6,576 |
) |
(306 |
) |
53 |
(722 |
) |
(3,262 |
) |
(684 |
) |
(90 |
) |
(1,431 |
) |
892 |
4,500 |
||||||||||||||||||||||||||
Ending Balance- December 31, 2019 |
$ |
27,679 |
$ |
8,633 |
$ |
1,643 |
$ |
960 |
$ |
2,024 |
$ |
4,814 |
$ |
9,961 |
$ |
333 |
$ |
1,731 |
$ |
1,084 |
$ |
58,862 |
Allowance Allocation at December 31, |
||||||||||||||||||||||||||||||||||||||||
(in thousands) |
2020 Amount |
Percent of Loans in Each Category to Total Loans |
2019 Amount |
Percent of Loans in Each Category to Total Loans |
2018 Amount |
Percent of Loans in Each Category to Total Loans |
2017 Amount |
Percent of Loans in Each Category to Total Loans |
2016 Amount |
Percent of Loans in Each Category to Total Loans |
||||||||||||||||||||||||||||||
Commercial Real Estate |
$ |
27,679 |
31.2 |
% |
$ |
11,053 |
31.6 |
% |
$ |
11,609 |
32.4 |
% |
$ |
10,922 |
31.1 |
% |
$ |
11,110 |
30.4 |
% |
||||||||||||||||||||
Agricultural Real Estate |
8,633 |
20.7 |
% |
15,128 |
23.3 |
% |
14,092 |
22.7 |
% |
12,085 |
22.5 |
% |
9,450 |
21.2 |
% |
|||||||||||||||||||||||||
Real Estate Construction |
1,643 |
6.0 |
% |
1,949 |
4.3 |
% |
1,249 |
3.8 |
% |
1,846 |
4.5 |
% |
3,223 |
7.6 |
% |
|||||||||||||||||||||||||
Residential 1st Mortgages |
960 |
9.6 |
% |
855 |
9.5 |
% |
880 |
10.1 |
% |
815 |
11.7 |
% |
865 |
10.3 |
% |
|||||||||||||||||||||||||
Home Equity Lines and Loans |
2,024 |
1.1 |
% |
2,675 |
1.5 |
% |
2,761 |
1.6 |
% |
2,324 |
1.6 |
% |
2,140 |
1.7 |
% |
|||||||||||||||||||||||||
Agricultural |
4,814 |
8.5 |
% |
8,076 |
10.9 |
% |
8,242 |
11.3 |
% |
8,159 |
12.3 |
% |
7,381 |
14.7 |
% |
|||||||||||||||||||||||||
Commercial |
9,961 |
12.0 |
% |
11,466 |
14.4 |
% |
11,656 |
13.3 |
% |
9,197 |
12.0 |
% |
8,515 |
10.5 |
% |
|||||||||||||||||||||||||
Consumer & Other |
333 |
7.6 |
% |
456 |
0.6 |
% |
494 |
0.8 |
% |
209 |
0.3 |
% |
200 |
0.3 |
% |
|||||||||||||||||||||||||
Leases |
1,731 |
3.3 |
% |
3,162 |
3.9 |
% |
4,022 |
4.0 |
% |
3,363 |
4.0 |
% |
3,586 |
3.3 |
% |
|||||||||||||||||||||||||
Unallocated |
1,084 |
- |
192 |
- |
261 |
- |
1,422 |
- |
1,449 |
- |
||||||||||||||||||||||||||||||
Total |
$ |
58,862 |
100.0 |
% |
$ |
55,012 |
100.0 |
% |
$ |
55,266 |
100.0 |
% |
$ |
50,342 |
100.0 |
% |
$ |
47,919 |
100.0 |
% |
Available for Sale |
Held to Maturity |
Available for Sale |
Held to Maturity |
Available for Sale |
Held to Maturity |
|||||||||||||||||||
December 31: (in thousands) |
2020 |
2019 |
2018 |
|||||||||||||||||||||
U.S. Treasury Notes |
$ |
15,288 |
$ |
- |
$ |
54,995 |
$ |
- |
$ |
164,514 |
$ |
- |
||||||||||||
U.S. Government SBA |
8,160 |
- |
10,798 |
- |
15,447 |
- |
||||||||||||||||||
Government Agency & Government Sponsored Entities |
- |
- |
- |
- |
3,039 |
- |
||||||||||||||||||
Obligations of States and Political Subdivisions |
- |
68,933 |
- |
60,229 |
- |
53,566 |
||||||||||||||||||
Mortgage Backed Securities |
737,873 |
- |
441,078 |
- |
307,045 |
- |
||||||||||||||||||
Corporate Securities |
45,919 |
- |
- |
- |
- |
- |
||||||||||||||||||
Other |
492 |
- |
515 |
- |
5,351 |
- |
||||||||||||||||||
Total Book Value |
$ |
807,732 |
$ |
68,933 |
$ |
507,386 |
$ |
60,229 |
$ |
495,396 |
$ |
53,566 |
||||||||||||
Fair Value |
$ |
807,732 |
$ |
70,049 |
$ |
507,386 |
$ |
61,097 |
$ |
495,396 |
$ |
53,738 |
December 31, 2020 (in thousands) |
Fair Value |
Average Yield |
||||||
U.S. Treasury |
||||||||
One year or less |
$ |
5,020 |
2.19 |
% |
||||
After one year through five years |
10,268 |
2.36 |
% |
|||||
Total U.S. Treasury Securities |
15,288 |
2.30 |
% |
|||||
U.S. Government Agency SBA |
||||||||
After one year through five years |
333 |
2.12 |
% |
|||||
After five years through ten years |
488 |
1.34 |
% |
|||||
After ten years |
7,339 |
1.28 |
% |
|||||
Total U.S. Government Agency SBA Securities |
8,160 |
1.31 |
% |
|||||
Corporate Securities |
||||||||
After one year through five years |
15,495 |
1.51 |
% |
|||||
After five years through ten years |
30,424 |
2.12 |
% |
|||||
Total Corporate Securities |
45,919 |
1.92 |
% |
|||||
Other |
||||||||
One year or less |
492 |
2.24 |
% |
|||||
Total Other Securities |
492 |
2.24 |
% |
|||||
Mortgage Backed Securities |
737,873 |
1.91 |
% |
|||||
Total Investment Securities Available-for-Sale |
$ |
807,732 |
1.91 |
% |
December 31, 2020 (in thousands) |
Book Value |
Average Yield |
||||||
Obligations of States and Political Subdivisions |
||||||||
One year or less |
$ |
8,309 |
3.99 |
% |
||||
After one year through five years |
5,137 |
3.55 |
% |
|||||
After five years through ten years |
23,493 |
3.49 |
% |
|||||
After ten years |
31,994 |
4.74 |
% |
|||||
Total Obligations of States and Political Subdivisions |
68,933 |
4.13 |
% |
|||||
Total Investment Securities Held-to-Maturity |
$ |
68,933 |
4.13 |
% |
2020 |
2019 |
2018 |
2017 |
2016 |
||||||||||||||||||||||||||||||||||||
(in thousands) |
Amount |
Percent |
Amount |
Percent |
Amount |
Percent |
Amount |
Percent |
Amount |
Percent |
||||||||||||||||||||||||||||||
Commercial Real Estate |
$ |
971,326 |
31.2 |
% |
$ |
846,486 |
31.6 |
% |
$ |
834,476 |
32.4 |
% |
$ |
691,639 |
31.1 |
% |
$ |
674,445 |
30.9 |
% |
||||||||||||||||||||
Agricultural Real Estate |
643,014 |
20.7 |
% |
625,767 |
23.3 |
% |
584,625 |
22.7 |
% |
499,231 |
22.5 |
% |
467,685 |
21.4 |
% |
|||||||||||||||||||||||||
Real Estate Construction |
185,741 |
6.0 |
% |
115,644 |
4.3 |
% |
98,568 |
3.8 |
% |
100,206 |
4.5 |
% |
176,462 |
8.1 |
% |
|||||||||||||||||||||||||
Residential 1st Mortgages |
299,379 |
9.6 |
% |
255,253 |
9.5 |
% |
259,736 |
10.1 |
% |
260,751 |
11.7 |
% |
242,247 |
11.1 |
% |
|||||||||||||||||||||||||
Home Equity Lines and Loans |
34,239 |
1.1 |
% |
39,270 |
1.5 |
% |
40,789 |
1.6 |
% |
34,525 |
1.6 |
% |
31,625 |
1.4 |
% |
|||||||||||||||||||||||||
Agricultural |
264,372 |
8.5 |
% |
292,904 |
10.9 |
% |
290,463 |
11.3 |
% |
273,582 |
12.3 |
% |
295,325 |
13.5 |
% |
|||||||||||||||||||||||||
Commercial |
374,816 |
12.0 |
% |
384,795 |
14.4 |
% |
343,834 |
13.3 |
% |
265,703 |
12.0 |
% |
217,577 |
10.0 |
% |
|||||||||||||||||||||||||
Consumer & Other (1) |
235,529 |
7.6 |
% |
15,422 |
0.6 |
% |
19,412 |
0.8 |
% |
6,656 |
0.3 |
% |
6,913 |
0.3 |
% |
|||||||||||||||||||||||||
Leases |
103,117 |
3.3 |
% |
104,470 |
3.9 |
% |
106,217 |
4.0 |
% |
88,957 |
4.0 |
% |
70,986 |
3.3 |
% |
|||||||||||||||||||||||||
Total Gross Loans & Leases |
3,111,533 |
100.0 |
% |
2,680,011 |
100.0 |
% |
2,578,120 |
100.0 |
% |
2,221,250 |
100.0 |
% |
2,183,265 |
100.0 |
% |
|||||||||||||||||||||||||
Less: Unearned Income |
11,941 |
6,984 |
6,879 |
5,955 |
5,664 |
|||||||||||||||||||||||||||||||||||
Subtotal |
3,099,592 |
2,673,027 |
2,571,241 |
2,215,295 |
2,177,601 |
|||||||||||||||||||||||||||||||||||
Less: Allowance for Credit Losses |
58,862 |
55,012 |
55,266 |
50,342 |
47,919 |
|||||||||||||||||||||||||||||||||||
Net Loans & Leases |
$ |
3,040,730 |
$ |
2,618,015 |
$ |
2,515,975 |
$ |
2,164,953 |
$ |
2,129,682 |
(1) | Includes PPP loans. There were no concentrations of loans exceeding 10% of total loans which were not otherwise disclosed as a category of loans in the above table. |
(in thousands) |
One Year or Less |
Over One Year to Five Years |
Over Five Years |
Total |
||||||||||||
Commercial Real Estate |
$ |
42,313 |
$ |
275,256 |
$ |
641,411 |
$ |
958,980 |
||||||||
Agricultural Real Estate |
22,811 |
150,752 |
469,451 |
643,014 |
||||||||||||
Real Estate Construction |
94,364 |
87,484 |
3,893 |
185,741 |
||||||||||||
Residential 1st Mortgages |
1,180 |
4,229 |
293,970 |
299,379 |
||||||||||||
Home Equity Lines and Loans |
13 |
353 |
33,873 |
34,239 |
||||||||||||
Agricultural |
155,485 |
97,736 |
11,151 |
264,372 |
||||||||||||
Commercial |
120,994 |
199,704 |
54,118 |
374,816 |
||||||||||||
Consumer & Other |
699 |
230,443 |
4,387 |
235,529 |
||||||||||||
Leases |
8,517 |
50,720 |
44,285 |
103,522 |
||||||||||||
Total |
$ |
446,376 |
$ |
1,096,677 |
$ |
1,556,539 |
$ |
3,099,592 |
||||||||
Rate Sensitivity: |
||||||||||||||||
Fixed Rate |
$ |
66,042 |
$ |
593,253 |
$ |
1,027,705 |
$ |
1,687,000 |
||||||||
Variable Rate |
380,334 |
503,424 |
528,834 |
1,412,592 |
||||||||||||
Total |
$ |
446,376 |
$ |
1,096,677 |
$ |
1,556,539 |
$ |
3,099,592 |
||||||||
Percent |
14.40 |
% |
35.38 |
% |
50.22 |
% |
100.00 |
% |
December 31, |
||||||||||||||||||||
(in thousands) |
2020 |
2019 |
2018 |
2017 |
2016 |
|||||||||||||||
Non-Accrual Loans & Leases |
||||||||||||||||||||
Commercial Real Estate |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
||||||||||
Agricultural Real Estate |
495 |
- |
- |
- |
1,304 |
|||||||||||||||
Real Estate Construction |
- |
- |
- |
- |
- |
|||||||||||||||
Residential 1st Mortgages |
- |
- |
- |
- |
95 |
|||||||||||||||
Home Equity Lines and Loans |
- |
- |
- |
- |
- |
|||||||||||||||
Agricultural |
- |
- |
- |
- |
243 |
|||||||||||||||
Commercial |
- |
- |
- |
- |
1,426 |
|||||||||||||||
Consumer & Other |
- |
- |
- |
- |
6 |
|||||||||||||||
Total Non-Accrual Loans & Leases |
495 |
- |
- |
- |
3,074 |
|||||||||||||||
Accruing Loans & Leases Past Due 90 Days or More |
||||||||||||||||||||
Commercial Real Estate |
- |
- |
- |
- |
- |
|||||||||||||||
Agricultural Real Estate |
- |
- |
- |
- |
- |
|||||||||||||||
Real Estate Construction |
- |
- |
- |
- |
- |
|||||||||||||||
Residential 1st Mortgages |
- |
- |
- |
- |
- |
|||||||||||||||
Home Equity Lines and Loans |
- |
- |
- |
- |
- |
|||||||||||||||
Agricultural |
- |
- |
- |
- |
- |
|||||||||||||||
Commercial |
- |
- |
- |
- |
- |
|||||||||||||||
Consumer & Other |
- |
- |
- |
- |
- |
|||||||||||||||
Total Accruing Loans & Leases Past Due 90 Days or More |
- |
- |
- |
- |
- |
|||||||||||||||
Total Non-Performing Loans & Leases |
$ |
495 |
$ |
- |
$ |
- |
$ |
- |
$ |
3,074 |
||||||||||
Other Real Estate Owned |
$ |
873 |
$ |
873 |
$ |
873 |
$ |
873 |
$ |
3,745 |
||||||||||
Total Non-Performing Assets |
$ |
1,368 |
$ |
873 |
$ |
873 |
$ |
873 |
$ |
6,819 |
||||||||||
Restructured Loans & Leases (Performing) |
$ |
7,868 |
$ |
12,105 |
$ |
13,577 |
$ |
6,301 |
$ |
4,462 |
||||||||||
Non-Performing Loans & Leases as a Percent of Total Loans & Leases |
0.02 |
% |
0.00 |
% |
0.00 |
% |
0.00 |
% |
0.14 |
% |
• | The State of California experienced drought conditions from 2013 through most of 2016. Since 2016, reasonable levels of rain and snow have alleviated drought conditions in California. As a result, current reservoir levels are adequate and the availability of water in our primary service area should not be an issue. However, the weather patterns over the past 5 years further reinforce the fact that the long-term risks associated with the availability of water are significant. |
• | The agricultural industry is facing challenges associated with: (1) downward pressures on commodity prices (somewhat offset by higher yields); and (2) tight labor markets and higher wages due to legislative changes at the state and federal levels. |
• | In an attempt to slow the accelerating spread of COVID-19, on March 16, 2020 the first cities and counties in Northern California were placed under “shelter-in-place” orders. By March 19th, the Governor had placed the entire state under these orders. Since that time most California counties have been in various levels of lockdown, including those in which the Company operates. The Governor has developed guidance as to when a given county can re-open certain business and other activities, but all counties in which the Company operates remain under some level of restriction. Businesses have been designated as “essential” or “non-essential.” Non-essential businesses have either been closed or had the scope of their activities significantly reduced. Unemployment has increased. The economic impact of this situation has already been severe, and continuing restrictions will only exacerbate the situation. The duration of these restrictions is not known at this time nor is the pace of recovery once they are lifted, therefore, the Company cannot determine the ultimate impact on classified and non-performing loans and leases (see “Part I, Introduction - COVID-19 (Coronavirus) Disclosure”). |
(in thousands) |
||||
Time Deposits of $250,000 or More |
||||
Three Months or Less |
$ |
63,183 |
||
Over Three Months Through Six Months |
50,761 |
|||
Over Six Months Through Twelve Months |
51,854 |
|||
Over Twelve Months |
20,146 |
|||
Total Time Deposits of $250,000 or More |
$ |
185,944 |
• | Demand and interest-bearing transaction accounts increased $612.8 million or 34.7% since December 31, 2019. |
• | Savings and money market accounts have increased $265.5 million or 26.7% since December 31, 2019. |
• | Time deposit accounts have decreased $96.1 million or 18.6% since December 31, 2019. |
(in thousands) |
December 31, 2020 |
December 31, 2019 |
||||||
Commitments to Extend Credit |
$ |
1,040,844 |
$ |
919,982 |
||||
Letters of Credit |
18,846 |
20,346 |
||||||
Performance Guarantees Under Interest Rate Swap Contracts Entered Into Between Our Borrowing Customers and Third Parties |
2,786 |
1,513 |
(in thousands) |
Total |
1 Year or Less |
2-3 Years |
4-5 Years |
More Than 5 Years |
|||||||||||||||
Long-Term Subordinated Debentures |
10,310 |
- |
- |
- |
10,310 |
|||||||||||||||
Deferred Compensation (1) |
68,077 |
1,315 |
2,118 |
1,058 |
63,586 |
|||||||||||||||
Total |
$ |
78,387 |
$ |
1,315 |
$ |
2,118 |
$ |
1,058 |
$ |
73,896 |
• | general economic and business conditions affecting the key service areas of the Company; |
• | credit quality trends (including trends in collateral values, delinquencies and non-performing loans & leases); |
• | loan & lease volumes, growth rates and concentrations; |
• | loan & lease portfolio seasoning; |
• | specific industry and crop conditions; |
• | recent loss experience; and |
• | duration of the current business cycle. |
Item 8. | Financial Statements and Supplementary Data |
Page |
||
Report of Independent Registered Public Accounting Firm |
71 |
|
Consolidated Financial Statements |
||
Consolidated Balance Sheets – December 31, 2020, and 2019 |
73 |
|
Consolidated Statements of Income – Years ended December 31, 2020, 2019 and 2018 |
74 |
|
Consolidated Statements of Comprehensive Income – Years Ended December 31, 2020, 2019 and 2018 |
75 |
|
Consolidated Statements of Changes in Shareholders' Equity – Years ended December 31, 2020, 2019 and 2018 |
76 |
|
Consolidated Statements of Cash Flows - Years Ended December 31, 2020, 2019 and 2018 |
77 |
|
Notes to the Consolidated Financial Statements |
78 |
• | Testing the design, implementation, and operating effectiveness of controls relating to management’s calculation of the allowance for credit losses, including controls over the accuracy of risk ratings of loans and the determination of the qualitative factors used. |
• | Testing a risk-based targeted selection of loans to gain substantive evidence that the Company is appropriately rating these loans in accordance with its policies, and that the risk ratings for the loans are reasonable. |
• | Performing a loan grade analysis by loan type to determine whether any large fluctuations occurred that could not be reasonably explained. |
• | Obtaining management’s analysis and supporting documentation related to the qualitative factors, and testing whether the qualitative factors used in the calculation of the allowance for credit losses are supported by the analysis provided by management and are used in a manner consistent with management’s established policies and procedures. |
• | Performing an independent sensitivity analysis to evaluate the reasonableness of the qualitative factors used by management to account for inherent losses that are not captured in the calculation of the allowance for credit losses based on historical loss rates alone. |
Farmers & Merchants Bancorp |
Consolidated Balance Sheets |
December 31, |
||||||||
Assets |
2020 |
2019 |
||||||
Cash and Cash Equivalents: |
||||||||
Cash and Due from Banks |
$ |
$ |
||||||
Interest Bearing Deposits with Banks |
||||||||
Total Cash and Cash Equivalents |
||||||||
Investment Securities: |
||||||||
Available-for-Sale, amortized cost $ |
||||||||
Held-to-Maturity, fair value $ |
||||||||
Total Investment Securities |
||||||||
Loans & Leases: |
||||||||
Less: Allowance for Credit Losses |
||||||||
Loans& Leases, Net |
||||||||
Premises and Equipment, Net |
||||||||
Bank Owned Life Insurance, Net |
||||||||
Interest Receivable and Other Assets |
||||||||
Total Assets |
$ |
$ |
||||||
Liabilities |
||||||||
Deposits: |
||||||||
Demand |
$ |
$ |
||||||
Interest-Bearing Transaction |
||||||||
Savings and Money Market |
||||||||
Time |
||||||||
Total Deposits |
||||||||
Subordinated Debentures |
||||||||
Interest Payable and Other Liabilities |
||||||||
Total Liabilities |
||||||||
Commitments & Contingencies (See Note 19) |
||||||||
Shareholders’ Equity |
||||||||
Preferred Stock: |
||||||||
Common Stock: Par Value $ |
||||||||
Shares Issued and Outstanding at December 31, 2020 and 2019, respectively. |
||||||||
Additional Paid-In Capital |
||||||||
Retained Earnings |
||||||||
Accumulated Other Comprehensive Income, Net of Taxes |
||||||||
Total Shareholders’ Equity |
||||||||
Total Liabilities and Shareholders’ Equity |
$ |
$ |
Farmers & Merchants Bancorp |
Consolidated Statements of Income |
Year Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Interest Income |
||||||||||||
Interest and Fees on Loans & Leases |
$ |
$ |
$ |
|||||||||
Interest on Deposits with Banks |
||||||||||||
Interest on Investment Securities: |
||||||||||||
Taxable |
||||||||||||
Exempt from Federal Tax |
||||||||||||
Total Interest Income |
||||||||||||
Interest Expense |
||||||||||||
Deposits |
||||||||||||
Borrowed Funds |
||||||||||||
Subordinated Debentures |
||||||||||||
Total Interest Expense |
||||||||||||
Net Interest Income |
||||||||||||
Provision for Credit Losses |
||||||||||||
Net Interest Income After Provision for Credit Losses |
||||||||||||
Non-Interest Income |
||||||||||||
Service Charges on Deposit Accounts |
||||||||||||
Net Gain (Loss) on Sales Investment Securities |
( |
) |
||||||||||
Increase in Cash Surrender Value of Bank Owned Life Insurance |
||||||||||||
Debit Card and ATM Fees |
||||||||||||
Net Gain on Deferred Compensation Investments |
||||||||||||
Other |
||||||||||||
Total Non-Interest Income |
||||||||||||
Non-Interest Expense |
||||||||||||
Salaries and Employee Benefits |
||||||||||||
Net Gain on Deferred Compensation Plan Investments |
||||||||||||
Occupancy |
||||||||||||
Equipment |
||||||||||||
Marketing |
||||||||||||
Legal |
||||||||||||
FDIC Insurance |
||||||||||||
Acquisition Expenses |
||||||||||||
Other |
||||||||||||
Total Non-Interest Expense |
||||||||||||
Income Before Provision for Income Taxes |
||||||||||||
Provision for Income Taxes |
||||||||||||
Net Income |
$ |
$ |
$ |
|||||||||
Basic and Diluted Earnings Per Common Share |
$ |
$ |
$ |
FARMERS & MERCHANTS BANCORP |
Consolidated Statements of Comprehensive Income |
Year Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Net Income |
$ |
$ |
$ |
|||||||||
Other Comprehensive Loss |
||||||||||||
Net Unrealized Gain (Loss) on Available-for-Sale Securities |
( |
) |
||||||||||
Deferred Tax (Benefit) Expense Related to Unrealized (Gain) Losses |
( |
) |
( |
) |
||||||||
Reclassification Adjustment for Realized (Gain) Loss on Sales of Available-for-Sale Securities Included in Net Income |
( |
) |
( |
) |
||||||||
Deferred Tax Related to Reclassification Adjustment |
( |
) |
||||||||||
Total Other Comprehensive Income (Loss) |
( |
) |
||||||||||
Comprehensive Income |
$ |
$ |
$ |
Farmers & Merchants Bancorp |
Consolidated Statements of Changes in Shareholders’ Equity |
Common Shares Outstanding |
Common Stock |
Additional Paid-In Capital |
Retained Earnings |
Accumulated Other Comprehensive (Loss) Income |
Total Shareholders’ Equity |
|||||||||||||||||||
Balance, January 1, 2018 |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||||||
Net Income |
||||||||||||||||||||||||
Cash Dividends Declared on Common Stock ($ |
( |
) |
( |
) |
||||||||||||||||||||
Repurchase of Common Stock |
( |
) |
( |
) |
( |
) |
||||||||||||||||||
Issuance of Common Stock |
||||||||||||||||||||||||
Change in Net Unrealized Loss on Securities Available-for-Sale |
( |
) |
( |
) |
||||||||||||||||||||
Balance, December 31, 2018 |
$ |
$ |
$ |
$ |
( |
) |
$ |
|||||||||||||||||
Net Income |
||||||||||||||||||||||||
Cash Dividends Declared on Common Stock ($ |
( |
) |
( |
) |
||||||||||||||||||||
Issuance of Common Stock |
||||||||||||||||||||||||
Change in Net Unrealized Gain on Securities Available-for-Sale |
||||||||||||||||||||||||
Balance, December 31, 2019 |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||
Net Income |
||||||||||||||||||||||||
Cash Dividends Declared on Common Stock ($ |
( |
) |
( |
) |
||||||||||||||||||||
Repurchase of Common Stock |
( |
) |
( |
) |
( |
) |
||||||||||||||||||
Issuance of Common Stock |
||||||||||||||||||||||||
Change in Net Unrealized Gain on Securities Available-for-Sale |
||||||||||||||||||||||||
Balance, December 31, 2020 |
$ |
$ |
$ |
$ |
$ |
Farmers & Merchants Bancorp |
Consolidated Statements of Cash Flows |
Year Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Operating Activities |
||||||||||||
Net Income |
$ |
$ |
$ |
|||||||||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: |
||||||||||||
Provision for Credit Losses |
||||||||||||
Depreciation and Amortization |
||||||||||||
(Benefit) Provision for Deferred Income Taxes |
( |
) |
( |
) |
||||||||
Net Amortization of Investment Security Premiums & Discounts |
||||||||||||
Amortization of Core Deposit Intangible |
||||||||||||
Accretion of Discount on Acquired Loans |
( |
) |
( |
) |
( |
) |
||||||
Net (Gain) Loss on Sale of Investment Securities |
( |
) |
( |
) |
||||||||
Net Loss (Gain) on Sale of Property & Equipment |
( |
) |
( |
) |
||||||||
Earnings from Equity Investment |
( |
) |
||||||||||
Dividends from Equity Investment |
||||||||||||
Gain on Remeasurement of Previously Held Equity Investment |
( |
) |
||||||||||
Net Change in Operating Assets & Liabilities: |
||||||||||||
Net (Increase) Decrease in Interest Receivable and Other Assets |
( |
) |
( |
) |
||||||||
Net (Decrease) Increase in Interest Payable and Other Liabilities |
( |
) |
||||||||||
Net Cash Provided by Operating Activities |
||||||||||||
Investing Activities: |
||||||||||||
Purchase of Investment Securities Available-for-Sale |
( |
) |
( |
) |
( |
) |
||||||
Proceeds from Sold, Matured, or Called Securities Available-for-Sale |
||||||||||||
Purchase of Investment Securities Held-to-Maturity |
( |
) |
( |
) |
( |
) |
||||||
Proceeds from Matured, or Called Securities Held-to-Maturity |
||||||||||||
Net Loans & Leases Paid, Originated or Acquired |
( |
) |
( |
) |
( |
) |
||||||
Principal Collected on Loans & Leases Previously Charged Off |
||||||||||||
Cash Paid for Acquisition, Net |
( |
) |
||||||||||
Additions to Premises and Equipment, Net |
( |
) |
( |
) |
( |
) |
||||||
Purchase of Other Investments |
( |
) |
( |
) |
( |
) |
||||||
Proceeds from Sale of Property & Equipment |
||||||||||||
Net Cash Used in Investing Activities |
( |
) |
( |
) |
( |
) |
||||||
Financing Activities: |
||||||||||||
Net Increase in Deposits |
||||||||||||
Stock Repurchases |
( |
) |
( |
) |
||||||||
Cash Dividends |
( |
) |
( |
) |
( |
) |
||||||
Net Cash Provided by Financing Activities |
||||||||||||
Net Change in Cash and Cash Equivalents |
( |
) |
||||||||||
Cash and Cash Equivalents at Beginning of Year |
||||||||||||
Cash and Cash Equivalents at End of Year |
$ |
$ |
$ |
|||||||||
Supplementary Data |
||||||||||||
Cash Payments Made for Income Taxes |
$ |
$ |
$ |
|||||||||
Issuance of Common Stock to the Bank’s Non-Qualified Retirement Plans |
$ |
$ |
$ |
|||||||||
Interest Paid |
$ |
$ |
$ |
|||||||||
Supplementary Noncash Disclosure |
||||||||||||
Lease Liabilities Arising from Obtaining Right-of-Use Assets |
$ |
$ |
$ |
|||||||||
Acquisitions: |
||||||||||||
Fair Value of Assets Acquired |
$ |
$ |
$ |
|||||||||
Fair Value of Liabilities Acquired |
$ |
$ |
$ |
(in thousands) |
2021 |
2022 |
2023 |
2024 |
2025 |
Thereafter |
Total |
|||||||||||||||||||||
Core Deposit Intangible Amortization |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
Amortized |
Gross Unrealized |
Fair/Book |
||||||||||||||
December 31, 2020 |
Cost |
Gains |
Losses |
Value |
||||||||||||
US Treasury Notes |
$ |
$ |
$ |
$ |
||||||||||||
US Government Agency SBA |
||||||||||||||||
Mortgage Backed Securities (1) |
||||||||||||||||
Corporate Securities |
||||||||||||||||
Other |
||||||||||||||||
Total |
$ |
$ |
$ |
$ |
Amortized |
Gross Unrealized |
Fair/Book |
||||||||||||||
December 31, 2019 |
Cost |
Gains |
Losses |
Value |
||||||||||||
US Treasury Notes |
$ |
$ |
$ |
$ |
||||||||||||
US Government Agency SBA |
||||||||||||||||
Mortgage Backed Securities (1) |
||||||||||||||||
Other |
||||||||||||||||
Total |
$ |
$ |
$ |
$ |
Amortized |
Gross Unrealized |
Fair |
||||||||||||||
December 31, 2020 |
Cost |
Gains |
Losses |
Value |
||||||||||||
Obligations of States and Political Subdivisions |
$ |
$ |
$ |
$ |
||||||||||||
Total |
$ |
$ |
$ |
$ |
Amortized |
Gross Unrealized |
Fair |
||||||||||||||
December 31, 2019 |
Cost |
Gains |
Losses |
Value |
||||||||||||
Obligations of States and Political Subdivisions |
$ |
$ |
$ |
$ |
||||||||||||
Total |
$ |
$ |
$ |
$ |
Available-for-Sale |
Held-to-Maturity |
|||||||||||||||
December 31, 2020 |
Amortized Cost |
Fair/Book Value |
Amortized Cost |
Fair Value |
||||||||||||
Within One Year |
$ |
$ |
$ |
$ |
||||||||||||
After One Year Through Five Years |
||||||||||||||||
After Five Years Through Ten Years |
||||||||||||||||
After Ten Years |
||||||||||||||||
Investment Securities Not Due at a Single Maturity Date: |
||||||||||||||||
Mortgage Backed Securities |
||||||||||||||||
Total |
$ |
$ |
$ |
$ |
Less Than 12 Months |
12 Months or More |
Total |
||||||||||||||||||||||
December 31, 2020 |
Fair Value |
Unrealized Loss |
Fair Value |
Unrealized Loss |
Fair Value |
Unrealized Loss |
||||||||||||||||||
Securities Available-for-Sale |
||||||||||||||||||||||||
US Government Agency SBA |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
Mortgage Backed Securities |
||||||||||||||||||||||||
Corporate Securities |
||||||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
$ |
Less Than 12 Months |
12 Months or More |
Total |
||||||||||||||||||||||
December 31, 2019 |
Fair Value |
Unrealized Loss |
Fair Value |
Unrealized Loss |
Fair Value |
Unrealized Loss |
||||||||||||||||||
Securities Available-for-Sale |
||||||||||||||||||||||||
US Government Agency SBA |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
Mortgage Backed Securities |
||||||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
Securities Held-to-Maturity |
||||||||||||||||||||||||
Obligations of States and Political Subdivisions |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
$ |
(in thousands) |
Gross Proceeds |
Gross Gains |
Gross Losses |
|||||||||
2020 |
$ |
$ |
$ |
|||||||||
2019 |
$ |
$ |
$ |
|||||||||
2018 |
$ |
$ |
$ |
(in thousands) |
2020 |
2019 |
||||||
Commercial Real Estate |
$ |
$ |
||||||
Agricultural Real Estate |
||||||||
Real Estate Construction |
||||||||
Residential 1st Mortgages |
||||||||
Home Equity Lines and Loans |
||||||||
Agricultural |
||||||||
Commercial |
||||||||
Consumer & Other (1) |
||||||||
Leases |
||||||||
Total Gross Loans & Leases |
||||||||
Less: Unearned Income |
||||||||
Subtotal |
||||||||
Less: Allowance for Credit Losses |
||||||||
Loans & Leases, Net |
$ |
$ |
December 31, 2020 |
Commercial Real Estate |
Agricultural Real Estate |
Real Estate Construction |
Residential 1st Mortgages |
Home Equity Lines & Loans |
Agricultural |
Commercial |
Consumer & Other |
Leases |
Unallocated |
Total |
|||||||||||||||||||||||||||||||||
Year-To-Date Allowance for Credit Losses: |
||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance- January 1, 2020 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||||||||||||||
Charge-Offs |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||||||
Recoveries |
||||||||||||||||||||||||||||||||||||||||||||
Provision |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||||||
Ending Balance- December 31, 2020 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||||||||||||||
Ending Balance Individually Evaluated for Impairment |
||||||||||||||||||||||||||||||||||||||||||||
Ending Balance Collectively Evaluated for Impairment |
||||||||||||||||||||||||||||||||||||||||||||
Loans & Leases: |
||||||||||||||||||||||||||||||||||||||||||||
Ending Balance |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||||||||||||||
Ending Balance Individually Evaluated for Impairment |
||||||||||||||||||||||||||||||||||||||||||||
Ending Balance Collectively Evaluated for Impairment |
December 31, 2019 |
Commercial Real Estate |
Agricultural Real Estate |
Real Estate Construction |
Residential 1st Mortgages |
Home Equity Lines & Loans |
Agricultural |
Commercial |
Consumer & Other |
Leases |
Unallocated |
Total |
|||||||||||||||||||||||||||||||||
Year-To-Date Allowance for Credit Losses: |
||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance- January 1, 2019 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||||||||||||||
Charge-Offs |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||||||||
Recoveries |
||||||||||||||||||||||||||||||||||||||||||||
Provision |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||||||
Ending Balance- December 31, 2019 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||||||||||||||
Ending Balance Individually Evaluated for Impairment |
||||||||||||||||||||||||||||||||||||||||||||
Ending Balance Collectively Evaluated for Impairment |
||||||||||||||||||||||||||||||||||||||||||||
Loans & Leases: |
||||||||||||||||||||||||||||||||||||||||||||
Ending Balance |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||||||||||||||
Ending Balance Individually Evaluated for Impairment |
||||||||||||||||||||||||||||||||||||||||||||
Ending Balance Collectively Evaluated for Impairment |
December 31, 2020 |
Pass(1) |
Special Mention |
Substandard |
Total Loans |
||||||||||||
Loans & Leases: |
||||||||||||||||
Commercial Real Estate |
$ |
$ |
$ |
$ |
||||||||||||
Agricultural Real Estate |
||||||||||||||||
Real Estate Construction |
||||||||||||||||
Residential 1st Mortgages |
||||||||||||||||
Home Equity Lines and Loans |
||||||||||||||||
Agricultural |
||||||||||||||||
Commercial |
||||||||||||||||
Consumer & Other |
||||||||||||||||
Leases |
||||||||||||||||
Total |
$ |
$ |
$ |
$ |
(1) |
December 31, 2019 |
Pass(1) |
Special Mention |
Substandard |
Total Loans |
||||||||||||
Loans & Leases: |
||||||||||||||||
Commercial Real Estate |
$ |
$ |
$ |
$ |
||||||||||||
Agricultural Real Estate |
||||||||||||||||
Real Estate Construction |
||||||||||||||||
Residential 1st Mortgages |
||||||||||||||||
Home Equity Lines and Loans |
||||||||||||||||
Agricultural |
||||||||||||||||
Commercial |
||||||||||||||||
Consumer & Other |
||||||||||||||||
Leases |
||||||||||||||||
Total |
$ |
$ |
$ |
$ |
(1) |
December 31, 2020 |
30-59 Days Past Due |
60-89 Days Past Due |
90 Days and Still Accruing |
Nonaccrual |
Total Past Due |
Current |
Total Loans & Leases |
|||||||||||||||||||||
Loans & Leases: |
||||||||||||||||||||||||||||
Commercial Real Estate |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||
Agricultural Real Estate |
||||||||||||||||||||||||||||
Real Estate Construction |
||||||||||||||||||||||||||||
Residential 1st Mortgages |
||||||||||||||||||||||||||||
Home Equity Lines and Loans |
||||||||||||||||||||||||||||
Agricultural |
||||||||||||||||||||||||||||
Commercial |
||||||||||||||||||||||||||||
Consumer & Other |
||||||||||||||||||||||||||||
Leases |
||||||||||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
December 31, 2019 |
30-59 Days Past Due |
60-89 Days Past Due |
90 Days and Still Accruing |
Nonaccrual |
Total Past Due |
Current |
Total Loans & Leases |
|||||||||||||||||||||
Loans & Leases: |
||||||||||||||||||||||||||||
Commercial Real Estate |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||
Agricultural Real Estate |
||||||||||||||||||||||||||||
Real Estate Construction |
||||||||||||||||||||||||||||
Residential 1st Mortgages |
||||||||||||||||||||||||||||
Home Equity Lines and Loans |
||||||||||||||||||||||||||||
Agricultural |
||||||||||||||||||||||||||||
Commercial |
||||||||||||||||||||||||||||
Consumer & Other |
||||||||||||||||||||||||||||
Leases |
||||||||||||||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
December 31, 2020 |
Recorded Investment |
Unpaid Principal Balance |
Related Allowance |
Average Recorded Investment |
Interest Income Recognized |
|||||||||||||||
With no related allowance recorded: |
||||||||||||||||||||
Commercial Real Estate |
$ |
$ |
$ |
- |
$ |
$ |
||||||||||||||
Agricultural Real Estate |
- |
|||||||||||||||||||
Agricultural |
- |
|||||||||||||||||||
Commercial |
- |
|||||||||||||||||||
$ |
$ |
$ |
- |
$ |
$ |
|||||||||||||||
With an allowance recorded: |
||||||||||||||||||||
Commercial Real Estate |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Agricultural Real Estate |
||||||||||||||||||||
Residential 1st Mortgages |
||||||||||||||||||||
Home Equity Lines and Loans |
||||||||||||||||||||
Agricultural |
||||||||||||||||||||
Commercial |
||||||||||||||||||||
Consumer & Other |
||||||||||||||||||||
$ |
$ |
$ |
$ |
$ |
||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
December 31, 2019 |
Recorded Investment |
Unpaid Principal Balance |
Related Allowance |
Average Recorded Investment |
Interest Income Recognized |
|||||||||||||||
With no related allowance recorded: |
||||||||||||||||||||
Commercial Real Estate |
$ |
$ |
$ |
- |
$ |
$ |
||||||||||||||
Agricultural Real Estate |
- |
|||||||||||||||||||
Commercial |
- |
|||||||||||||||||||
$ |
$ |
$ |
- |
$ |
$ |
|||||||||||||||
With an allowance recorded: |
||||||||||||||||||||
Commercial Real Estate |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Residential 1st Mortgages |
||||||||||||||||||||
Home Equity Lines and Loans |
||||||||||||||||||||
Agricultural |
||||||||||||||||||||
Commercial |
||||||||||||||||||||
Consumer & Other |
||||||||||||||||||||
$ |
$ |
$ |
$ |
$ |
||||||||||||||||
Total |
$ |
$ |
$ |
$ |
$ |
December 31, 2020 |
||||||||||||
Troubled Debt Restructurings |
Number of Loans |
Pre-Modification Outstanding Recorded Investment |
Post-Modification Outstanding Recorded Investment |
|||||||||
Residential 1st Mortgages |
$ |
$ |
||||||||||
Agricultural |
||||||||||||
Commercial |
||||||||||||
Total |
$ |
$ |
December 31, 2019 |
||||||||||||
Troubled Debt Restructurings |
Number of Loans |
Pre-Modification Outstanding Recorded Investment |
Post-Modification Outstanding Recorded Investment |
|||||||||
Agricultural |
$ |
$ |
||||||||||
Consumer & Other |
||||||||||||
Total |
$ |
$ |
(in thousands) |
2020 |
2019 |
||||||
Land and Buildings |
$ |
$ |
||||||
Furniture, Fixtures and Equipment |
||||||||
Leasehold Improvement |
||||||||
Subtotal |
||||||||
Less: Accumulated Depreciation and Amortization |
||||||||
Total |
$ |
$ |
(in thousands) |
2020 |
2019 |
||||||
Balance |
$ |
$ |
(in thousands) |
Scheduled Maturities |
|||
2021 |
$ |
|||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Total |
$ |
(in thousands) |
2020 |
2019 |
2018 |
|||||||||
Current |
||||||||||||
Federal |
$ |
$ |
$ |
|||||||||
State |
||||||||||||
Total Current |
||||||||||||
Deferred |
||||||||||||
Federal |
( |
) |
( |
) |
||||||||
State |
( |
) |
( |
) |
||||||||
Total Deferred |
( |
) |
( |
) |
||||||||
Total Provision for Taxes |
$ |
$ |
$ |
2020 |
2019 |
2018 |
||||||||||||||||||||||
(in thousands) |
Amount |
Rate |
Amount |
Rate |
Amount |
Rate |
||||||||||||||||||
Tax Provision at Federal Statutory Rate |
$ |
% |
$ |
% |
$ |
% |
||||||||||||||||||
Interest on Obligations of States and Political Subdivisions exempt from Federal Taxation |
( |
) |
( |
%) |
( |
) |
( |
%) |
( |
) |
( |
%) |
||||||||||||
State and Local Income Taxes, Net of Federal Income Tax Benefit |
% |
% |
% |
|||||||||||||||||||||
Bank Owned Life Insurance |
( |
) |
( |
%) |
( |
) |
( |
%) |
( |
) |
( |
%) |
||||||||||||
Low-Income Housing Tax Credit |
( |
) |
( |
%) |
( |
) |
( |
%) |
( |
) |
( |
%) |
||||||||||||
Out of Period Adjustment |
% |
% |
( |
) |
( |
%) |
||||||||||||||||||
Other, Net |
( |
) |
( |
%) |
% |
% |
||||||||||||||||||
Total Provision for Taxes |
$ |
% |
$ |
% |
$ |
% |
(in thousands) |
2020 |
2019 |
||||||
Deferred Tax Assets |
||||||||
Allowance for Credit Losses |
$ |
$ |
||||||
Accrued Liabilities |
||||||||
Deferred Compensation |
||||||||
State Franchise Tax |
||||||||
Tax Credit Carry Forward |
||||||||
Lease Liability |
||||||||
Acquired Net Operating Loss |
||||||||
Fair Value Adjustment on Loans Acquired |
||||||||
Fair Value Adjustment on ORE Acquired |
||||||||
PPP Loan Service Fee Income |
||||||||
Low-Income Housing Investment |
||||||||
Other |
||||||||
Total Deferred Tax Assets |
$ |
$ |
||||||
Deferred Tax Liabilities |
||||||||
Premises and Equipment |
( |
) |
( |
) |
||||
Securities Accretion |
( |
) |
( |
) |
||||
Unrealized Gain on Securities Available-for-Sale |
( |
) |
( |
) |
||||
Leasing Activities |
( |
) |
( |
) |
||||
Core Deposit Intangible Asset |
( |
) |
( |
) |
||||
ROU Lease Asset |
( |
) |
( |
) |
||||
Prepaid |
( |
) |
( |
) |
||||
Other |
( |
) |
( |
) |
||||
Total Deferred Tax Liabilities |
( |
) |
( |
) |
||||
Net Deferred Tax Assets |
$ |
$ |
(in thousands) |
Actual |
Minimum Regulatory Capital Requirements |
Well Capitalized Under Prompt Corrective Action |
|||||||||||||||||||||
December 31, 2020 |
Amount |
Ratio |
Amount |
Ratio |
Amount |
Ratio |
||||||||||||||||||
Total Bank Capital to Risk Weighted Assets |
$ |
% |
$ |
% |
$ |
% |
||||||||||||||||||
Total Consolidated Capital to Risk Weighted Assets |
$ |
% |
$ |
% |
N/A |
N/A |
||||||||||||||||||
Total Bank Common Equity Tier 1 Capital Ratio |
$ |
% |
$ |
% |
$ |
% |
||||||||||||||||||
Total Consolidated Common Equity Tier 1 Capital Ratio |
$ |
% |
$ |
% |
N/A |
N/A |
||||||||||||||||||
Tier 1 Bank Capital to Risk Weighted Assets |
$ |
% |
$ |
% |
$ |
% |
||||||||||||||||||
Tier 1 Consolidated Capital to Risk Weighted Assets |
$ |
% |
$ |
% |
N/A |
N/A |
||||||||||||||||||
Tier 1 Bank Capital to Average Assets |
$ |
% |
$ |
% |
$ |
% |
||||||||||||||||||
Tier 1 Consolidated Capital to Average Assets |
$ |
% |
$ |
% |
N/A |
N/A |
(in thousands) |
Actual |
Minimum Regulatory Capital Requirements |
Well Capitalized Under Prompt Corrective Action |
|||||||||||||||||||||
December 31, 2019 |
Amount |
Ratio |
Amount |
Ratio |
Amount |
Ratio |
||||||||||||||||||
Total Bank Capital to Risk Weighted Assets |
$ |
% |
$ |
% |
$ |
% |
||||||||||||||||||
Total Consolidated Capital to Risk Weighted Assets |
$ |
% |
$ |
% |
N/A |
N/A |
||||||||||||||||||
Total Bank Common Equity Tier 1 Capital Ratio |
$ |
% |
$ |
% |
$ |
% |
||||||||||||||||||
Total Consolidated Common Equity Tier 1 Capital Ratio |
$ |
% |
$ |
% |
N/A |
N/A |
||||||||||||||||||
Tier 1 Bank Capital to Risk Weighted Assets |
$ |
% |
$ |
% |
$ |
% |
||||||||||||||||||
Tier 1 Consolidated Capital to Risk Weighted Assets |
$ |
% |
$ |
% |
N/A |
N/A |
||||||||||||||||||
Tier 1 Bank Capital to Average Assets |
$ |
% |
$ |
% |
$ |
% |
||||||||||||||||||
Tier 1 Consolidated Capital to Average Assets |
$ |
% |
$ |
% |
N/A |
N/A |
(net income in thousands) |
2020 |
2019 |
2018 |
|||||||||
Net Income |
$ |
$ |
$ |
|||||||||
Weighted Average Number of Common Shares Outstanding |
||||||||||||
Basic and Diluted Earnings Per Common Share |
$ |
$ |
$ |
Fair Value Measurements At December 31, 2020, Using |
||||||||||||||||
(in thousands) |
Fair Value Total |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
||||||||||||
Available-for-Sale Securities: |
||||||||||||||||
US Treasury Notes |
$ |
$ |
$ |
$ |
||||||||||||
US Government Agency SBA |
||||||||||||||||
Mortgage Backed Securities |
||||||||||||||||
Corporate Securities |
||||||||||||||||
Other |
||||||||||||||||
Total Assets Measured at Fair Value On a Recurring Basis |
$ |
$ |
$ |
$ |
Fair Value Measurements At December 31, 2019, Using |
||||||||||||||||
(in thousands) |
Fair Value Total |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
||||||||||||
Available-for-Sale Securities: |
||||||||||||||||
US Treasury Notes |
$ |
$ |
$ |
$ |
||||||||||||
US Government Agency SBA |
||||||||||||||||
Mortgage Backed Securities |
||||||||||||||||
Other |
||||||||||||||||
Total Assets Measured at Fair Value On a Recurring Basis |
$ |
$ |
$ |
$ |
Fair Value Measurements At December 31, 2020, Using |
||||||||||||||||
(in thousands) |
Fair Value Total |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
||||||||||||
Impaired Loans: |
||||||||||||||||
Residential 1st Mortgage |
$ |
$ |
$ |
$ |
||||||||||||
Home Equity Lines and Loans |
||||||||||||||||
Agricultural |
||||||||||||||||
Commercial |
||||||||||||||||
Consumer |
||||||||||||||||
Total Impaired Loans |
||||||||||||||||
Other Real Estate: |
||||||||||||||||
Real Estate Construction |
||||||||||||||||
Total Other Real Estate |
||||||||||||||||
Total Assets Measured at Fair Value On a Non-Recurring Basis |
$ |
$ |
$ |
$ |
Fair Value Measurements At December 31, 2019, Using |
||||||||||||||||
(in thousands) |
Fair Value Total |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
||||||||||||
Impaired Loans: |
||||||||||||||||
Commercial Real Estate |
$ |
$ |
$ |
$ |
||||||||||||
Residential 1st Mortgage |
||||||||||||||||
Home Equity Lines and Loans |
||||||||||||||||
Agricultural |
||||||||||||||||
Commercial |
||||||||||||||||
Consumer |
||||||||||||||||
Total Impaired Loans |
||||||||||||||||
Other Real Estate: |
||||||||||||||||
Real Estate Construction |
||||||||||||||||
Total Other Real Estate |
||||||||||||||||
Total Assets Measured at Fair Value On a Non-Recurring Basis |
$ |
$ |
$ |
$ |
December 31, 2020 (in thousands) |
Fair Value |
Valuation Technique |
Unobservable Inputs |
Range, Weighted Avg. |
||||||
Impaired Loans: |
||||||||||
Residential 1st Mortgage |
$ |
Sales Comparison Approach |
Adjustment for Difference Between Comparable Sales |
% |
||||||
Home Equity Lines and Loans |
$ |
Sales Comparison Approach |
Adjustment for Difference Between Comparable Sales |
% |
||||||
Agricultural |
$ |
Income Approach |
Capitalization Rate |
% |
||||||
Commercial |
$ |
Income Approach |
Capitalization Rate |
% |
||||||
Consumer |
$ |
Income Approach |
Adjustment for Difference Between Comparable Sales |
% |
||||||
Other Real Estate: |
||||||||||
Real Estate Construction |
$ |
Sales Comparison Approach |
Adjustment for Difference Between Comparable Sales |
% |
December 31, 2019 (in thousands) |
Fair Value |
Valuation Technique |
Unobservable Inputs |
Range, Weighted Avg. |
||||||
Impaired Loans: |
||||||||||
Commercial Real Estate |
$ |
Income Approach |
Capitalization Rate |
% |
||||||
Residential 1st Mortgages |
$ |
Sales Comparison Approach |
Adjustment for Difference Between Comparable Sales |
% |
||||||
Home Equity Lines and Loans |
$ |
Sales Comparison Approach |
Adjustment for Difference Between Comparable Sales |
% |
||||||
Agricultural |
$ |
Income Approach |
Capitalization Rate |
% |
||||||
Commercial |
$ |
Income Approach |
Capitalization Rate |
% |
||||||
Consumer |
$ |
Sales Comparison Approach |
Adjustment for Difference Between Comparable Sales |
% |
||||||
Other Real Estate: |
||||||||||
Real Estate Construction |
$ |
Sales Comparison Approach |
Adjustment for Difference Between Comparable Sales |
% |
Fair Value of Financial Instruments Using |
||||||||||||||||||||
December 31, 2020 (in thousands) |
Carrying Amount |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Total Estimated Fair Value |
|||||||||||||||
Assets: |
||||||||||||||||||||
Cash and Cash Equivalents |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Investment Securities Available-for-Sale |
||||||||||||||||||||
Investment Securities Held-to-Maturity |
||||||||||||||||||||
Loans & Leases, Net |
||||||||||||||||||||
Accrued Interest Receivable |
||||||||||||||||||||
Liabilities: |
||||||||||||||||||||
Deposits |
||||||||||||||||||||
Subordinated Debentures |
||||||||||||||||||||
Accrued Interest Payable |
Fair Value of Financial Instruments Using |
||||||||||||||||||||
December 31, 2019 (in thousands) |
Carrying Amount |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Total Estimated Fair Value |
|||||||||||||||
Assets: |
||||||||||||||||||||
Cash and Cash Equivalents |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Investment Securities Available-for-Sale |
||||||||||||||||||||
Investment Securities Held-to-Maturity |
||||||||||||||||||||
Loans & Leases, Net |
||||||||||||||||||||
Accrued Interest Receivable |
||||||||||||||||||||
Liabilities: |
||||||||||||||||||||
Deposits |
||||||||||||||||||||
Subordinated Debentures |
||||||||||||||||||||
Accrued Interest Payable |
(in thousands) |
December 31, 2020 |
December 31, 2019 |
||||||
Commitments to Extend Credit |
$ |
$ |
||||||
Letters of Credit |
||||||||
Performance Guarantees Under Interest Rate Swap Contracts Entered Into Between Our Borrowing Customers and Third Parties |
(in thousands except for percent and period data) |
Year Ended December 31, 2020 |
Year Ended December 31, 2019 |
||||||
Cash Paid for Amounts Included in the Measurement of Lease Liabilities Operating Cash Flow from Operating Leases |
$ |
$ |
||||||
Right-of-Use Assets Obtained in Exchange for New Operating Lease Liabilities |
$ |
$ |
||||||
Weighted-Average Remaining Lease Term - Operating Leases, in Years |
||||||||
Weighted-Average Discount Rate - Operating Leases |
% |
% |
(in thousands) |
December 31, 2020 |
|||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
2026 and thereafter |
||||
Total Lease Payments |
||||
Less: Interest |
( |
) |
||
Present Value of Lease Liabilities |
$ |
(in thousands) |
2020 |
2019 |
||||||
Cash |
$ |
$ |
||||||
Investment in Farmers & Merchants Bank of Central California |
||||||||
Investment Securities |
||||||||
Other Assets |
||||||||
Total Assets |
$ |
$ |
||||||
Subordinated Debentures |
$ |
$ |
||||||
Liabilities |
||||||||
Shareholders’ Equity |
||||||||
Total Liabilities and Shareholders’ Equity |
$ |
$ |
Year Ended December 31, |
||||||||||||
(in thousands) |
2020 |
2019 |
2018 |
|||||||||
Equity (Loss) in Undistributed Earnings in Farmers & Merchants Bank of Central California |
$ |
$ |
$ |
( |
) |
|||||||
Dividends from Subsidiary |
||||||||||||
Interest Income |
||||||||||||
Other Expenses, Net |
( |
) |
( |
) |
( |
) |
||||||
Tax Benefit |
||||||||||||
Net Income |
$ |
$ |
$ |
Year Ended December 31, |
||||||||||||
(in thousands) |
2020 |
2019 |
2018 |
|||||||||
Cash Flows from Operating Activities: |
||||||||||||
Net Income |
$ |
$ |
$ |
|||||||||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: |
||||||||||||
(Equity) Loss in Undistributed Net Earnings from Subsidiary |
( |
) |
( |
) |
||||||||
Net (Increase) in Other Assets |
( |
) |
( |
) |
( |
) |
||||||
Net Increase (Decrease) in Liabilities |
( |
) |
||||||||||
Net Cash Provided by Operating Activities |
||||||||||||
Investing Activities: |
||||||||||||
Payments for Business Acquisition |
( |
) |
||||||||||
Payments for Investments in Non-Qualified Retirement Plan |
( |
) |
( |
) |
( |
) |
||||||
Net Cash Used by Investing Activities |
( |
) |
( |
) |
( |
) |
||||||
Financing Activities: |
||||||||||||
Stock Repurchased |
( |
) |
( |
) |
||||||||
Issuance of Common Stock |
||||||||||||
Cash Dividends |
( |
) |
( |
) |
( |
) |
||||||
Net Cash Used by Financing Activities |
( |
) |
( |
) |
( |
) |
||||||
Increase in Cash and Cash Equivalents |
||||||||||||
Cash and Cash Equivalents at Beginning of Year |
||||||||||||
Cash and Cash Equivalents at End of Year |
$ |
$ |
$ |
2020 (in thousands except per share data) |
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
Total |
|||||||||||||||
Total Interest Income |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Total Interest Expense |
||||||||||||||||||||
Net Interest Income |
||||||||||||||||||||
Provision for Credit Losses |
||||||||||||||||||||
Net Interest Income After |
||||||||||||||||||||
Provision for Credit Losses |
||||||||||||||||||||
Total Non-Interest Income |
||||||||||||||||||||
Total Non-Interest Expense |
||||||||||||||||||||
Income Before Income Taxes |
||||||||||||||||||||
Provision for Income Taxes |
||||||||||||||||||||
Net Income |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Basic and Diluted Earnings Per Common Share |
$ |
$ |
$ |
$ |
$ |
2019 (in thousands except per share data) |
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
Total |
|||||||||||||||
Total Interest Income |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Total Interest Expense |
||||||||||||||||||||
Net Interest Income |
||||||||||||||||||||
Provision for Credit Losses |
||||||||||||||||||||
Net Interest Income After |
||||||||||||||||||||
Provision for Credit Losses |
||||||||||||||||||||
Total Non-Interest Income |
||||||||||||||||||||
Total Non-Interest Expense |
||||||||||||||||||||
Income Before Income Taxes |
||||||||||||||||||||
Provision for Income Taxes |
||||||||||||||||||||
Net Income |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Basic and Diluted Earnings Per Common Share |
$ |
$ |
$ |
$ |
$ |
/s/ Kent A. Steinwert |
/s/ Stephen W. Haley |
Kent A. Steinwert |
Stephen W. Haley |
Chairman, President & Chief Executive Officer |
Executive Vice President & Chief Financial Officer |
Name and Position(s) |
Age |
Principal Occupation during the Past Five Years |
Kent A. Steinwert Chairman, President & Chief Executive Officer of the Company and Bank |
68 |
Chairman, President & Chief Executive Officer of the Company and Bank. |
Deborah E. Skinner Executive Vice President & Chief Administrative Officer of the Bank |
58 |
Executive Vice President & Chief Administrative Officer of the Bank. |
Stephen W. Haley Executive Vice President & Chief Financial Officer & Secretary of the Company and Bank |
67 |
Executive Vice President & Chief Financial Officer of the Company and Bank. |
Kenneth W. Smith Executive Vice President & Senior Credit Officer of the Company and Bank |
61 |
Executive Vice President & Senior Credit Officer of the Company and Bank. |
David M. Zitterow Executive Vice President, Wholesale Banking Division of the Bank |
48 |
Executive Vice President, Wholesale Banking Division of the Bank since May 2017. Senior Vice President – Northern California Regional Executive – Umpqua Bank, April 2014 – May 2017. |
Jay J. Colombini Executive Vice President, Wholesale Banking Division of the Bank |
58 |
Executive Vice President, Wholesale Banking Division of the Bank. |
Ryan J. Misasi Executive Vice President, Retail Banking Division of the Bank |
44 |
Executive Vice President, Retail Banking Division of the Bank. |
(a) (1) | Financial Statements. Incorporated herein by reference, are listed in Item 8 hereof. |
10.11 |
Employment Agreement effective May 1, 2017, between Farmers & Merchants Bank of Central California and David M. Zitterow, filed on the Registrant’s Current Report on Form 8-K dated June 30, 2017, is incorporated herein by reference. |
10.15 |
Executive Retirement Plan – Performance Component as amended on November 5, 2010, filed on Registrant’s Form 10-Q for the period ended September 30, 2010, is incorporated herein by reference. |
10.16 |
Executive Retirement Plan – Retention Component as amended on November 5, 2010, filed on Registrant’s Form 10-Q for the period ended September 30, 2010, is incorporated herein by reference. |
10.17 |
Executive Retirement Plan – Salary Component, amended and restated on November 29, 2014, filed on Registrant’s Form 10-K for the year ended December 31, 2014, is incorporated herein by reference. |
10.19 |
Executive Retirement Plan – Equity Component, amended and restated on November 29, 2014, filed on Registrant’s Form 10-K for the year ended December 31, 2014, is incorporated herein by reference. |
10.20 |
Senior Management Retention Plan, amended and restated on November 29, 2014, filed on Registrant’s Form 10-K for the year ended December 31, 2014, is incorporated herein by reference. |
14 |
Code of Conduct of Farmers & Merchants Bancorp, filed on Registrant’s Form 10-K for the year ended December 31, 2003, is incorporated herein by reference. |
21 |
Subsidiaries of the Registrant, filed on Registrant’s Form 10-K for the year ended December 31, 2003, is incorporated herein by reference. |
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* |
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Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* |
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Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* |
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101.INS |
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). |
101.SCH |
Inline XBRL Taxonomy Extension Schema Document. |
101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
104 |
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
Farmers & Merchants Bancorp |
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(Registrant) |
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By |
/s/ Stephen W. Haley |
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Dated: March 15, 2021 |
Stephen W. Haley |
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Executive Vice President & |
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Chief Financial Officer |
/s/ Kent A. Steinwert |
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Chairman, President & Chief Executive Officer |
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Kent A. Steinwert |
(Principal Executive Officer) |
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/s/ Stephen W. Haley |
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Executive Vice President & Chief Financial Officer |
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Stephen W. Haley |
(Principal Financial and Accounting Officer) |
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/s/ Gary Long |
/s/ Calvin Suess |
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Gary Long, Director |
Calvin Suess, Director |
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/s/ Kevin Sanguinetti |
/s/ Edward Corum, Jr. |
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Kevin Sanguinetti, Director |
Edward Corum, Jr., Director |
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/s/ Stephenson K. Green |
/s/ Terrence A. Young |
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Stephenson K. Green, Director |
Terrence A. Young, Director |
1. |
I have reviewed this annual report on Form 10-K of Farmers & Merchants Bancorp;
|
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 Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
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 the registrant's board of directors (or persons performing the equivalent functions):
|
/s/ Kent A. Steinwert
|
||
Date: March 15, 2021
|
|
|
Kent A. Steinwert
|
||
Chairman, President
|
||
& Chief Executive Officer
|
1. |
I have reviewed this annual report on Form 10-K of Farmers & Merchants Bancorp;
|
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 Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
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 the registrant's board of directors (or persons performing the equivalent functions):
|
/s/ Stephen W. Haley
|
||
Date: March 15, 2021
|
|
|
Stephen W. Haley
|
||
Executive Vice President & Chief Financial Officer
|
1. |
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. $ 78m or 78o(d)); and
|
2. |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Kent A. Steinwert
|
|
Kent A. Steinwert
|
|
Chairman, President & Chief Executive Officer
|
|
/s/ Stephen W. Haley
|
|
Stephen W. Haley
|
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Executive Vice President & Chief Financial Officer
|
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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
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Investment Securities: | ||
Available-for-sale, amortized cost | $ 789,175 | $ 502,693 |
Held-to-Maturity at fair value | $ 70,049 | $ 61,097 |
Shareholders' Equity | ||
Preferred Stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred Stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred Stock, shares issued (in shares) | 0 | 0 |
Preferred Stock, shares outstanding (in shares) | 0 | 0 |
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized (in shares) | 7,500,000 | 7,500,000 |
Common Stock, shares issued (in shares) | 789,646 | 793,033 |
Common Stock, shares outstanding (in shares) | 789,646 | 793,033 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Consolidated Statements of Comprehensive Income [Abstract] | |||
Net Income | $ 58,734 | $ 56,036 | $ 45,527 |
Other Comprehensive Loss | |||
Net Unrealized Gain (Loss) on Available-for-Sale Securities | 13,905 | 8,936 | (4,343) |
Deferred Tax (Benefit) Expense Related to Unrealized (Gain) Losses | (4,099) | (2,642) | 1,284 |
Reclassification Adjustment for Realized (Gain) Loss on Sales of Available-for-Sale Securities Included in Net Income | (40) | (1) | 1,260 |
Deferred Tax Related to Reclassification Adjustment | 0 | 0 | (372) |
Total Other Comprehensive Income (Loss) | 9,766 | 6,293 | (2,171) |
Comprehensive Income | $ 68,500 | $ 62,329 | $ 43,356 |
Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Cash Dividends Declared per Share of Common Stock (in dollars per share) | $ 14.75 | $ 14.20 | $ 13.90 |
Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies |
1. Significant Accounting Policies
Farmers & Merchants Bancorp (the “Company”) was organized March 10, 1999. Primary operations are related to traditional banking activities through its subsidiary Farmers & Merchants Bank of Central California (the “Bank”) which was established in 1916. The Bank’s wholly owned subsidiaries include Farmers & Merchants Investment Corporation and Farmers/Merchants Corp. Farmers & Merchants Investment Corporation has been dormant since 1991. Farmers/Merchants Corp. acts as trustee on deeds of trust originated by the Bank.
The Company’s other wholly owned subsidiaries include F & M Bancorp, Inc. and FMCB Statutory Trust I. F & M Bancorp, Inc. was created in March 2002 to protect the name F & M Bank. During 2002, the Company completed a fictitious name filing in California to begin using the streamlined name “F & M Bank” as part of a larger effort to enhance the Company’s image and build brand name recognition. In December 2003, the Company formed a wholly owned subsidiary, FMCB Statutory Trust I, for the sole purpose of issuing Trust Preferred Securities and related subordinated debentures, in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). FMCB Statutory Trust I is a non-consolidated subsidiary.
On October 10, 2018, Farmers & Merchants Bancorp completed the acquisition of the Bank of Rio Vista, headquartered in Rio Vista, California, a locally owned and operated community bank established in 1904. As of the acquisition date, Bank of Rio Vista had approximately $217.5 million in assets and three branch locations in the communities of Rio Vista, Walnut Grove, and Lodi. Since the Company had a 39.65% interest in Bank of Rio Vista prior to the acquisition of the remaining interest, the transaction was accounted for as a business combination achieved in stages or a step acquisition. The Company, through an independent valuation, remeasured its previously held equity interest in Bank of Rio Vista at fair value, which resulted in a gain for the excess of the acquisition-date fair value over its carrying value of $997,000 which is included in other non-interest income in the consolidated statements of income. At the effective time of the acquisition, Bank of Rio Vista was merged into Farmers & Merchants Bank of Central California.
Basis of Presentation
The accounting and reporting policies of the Company conform to U.S. GAAP and prevailing practice within the banking industry.
The accompanying consolidated financial statements and notes thereto have been prepared in accordance with accounting principles generally accepted in the United States of America for financial information.
The accompanying consolidated financial statements include the accounts of the Company and the Company’s wholly owned subsidiaries, F & M Bancorp, Inc. and the Bank, along with the Bank’s wholly owned subsidiaries, Farmers & Merchants Investment Corporation and Farmers/Merchants Corp. Significant inter-company transactions have been eliminated in consolidation.
The preparation of consolidated financial statements in conformity with U.S. GAAP and under the rules and regulations of U.S. Securities and Exchange Commission, requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of 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.
Certain amounts in the prior years' financial statements and related footnote disclosures have been reclassified to conform to the current-year presentation. These reclassifications had no effect on previously reported net income or total shareholders’ equity.
Accounting Guidance Pending Adoption at December 31, 2020
The following paragraphs provide descriptions of newly issued but not yet effective accounting standards that could have a material effect on the Company’s financial position or results of operations.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU will require the earlier recognition of credit losses on loans and other financial instruments based on an expected loss model, replacing the incurred loss model that is currently in use. Under the new guidance, an entity will measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The expected loss model will apply to loans and leases, unfunded lending commitments, held-to-maturity debt securities and other debt instruments measured at amortized cost. The impairment model for available-for-sale debt securities will require the recognition of credit losses through a valuation allowance when fair value is less than amortized cost, regardless of whether the impairment is considered to be other-than-temporary. During 2019, the Company completed an assessment of its CECL data and system needs, and engaged a third-party vendor to assist in developing a CECL model. The Company, in conjunction with this vendor, researched and analyzed modeling standards, loan segmentation, as well as potential external inputs to supplement our historical loss history. Model validation began in the third quarter, enabling the Company to complete parallel runs using data beginning with the second quarter of 2019.
The new guidance had been effective on January 1, 2020. However, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) and H.R. 133, resulted in federal banking regulators issuing an interim final rule allowing banks the option of delaying the implementation of CECL until January 1, 2022. In addition, the national banking regulators have issued a joint statement allowing financial institutions to mitigate the effects of CECL in their regulatory capital calculations for up to two years. The Company has elected to delay CECL adoption, but continues to run its CECL model quarterly to accumulate data for the ultimate implementation. Management is currently evaluating the impact that the standard will have on its consolidated financial statements.
Out of Period Adjustment
During the quarter ended September 30, 2018, while preparing 2017 tax returns, the Company identified certain items related to IRS Code Section 162(m) that were not appropriately reflected in the 2014 through 2017 Provision for Income Taxes. To reflect this change, the cumulative impact of $990,000 was recognized by reducing the Company’s Provision for Income Taxes in the third quarter of 2018. After evaluating the quantitative and qualitative aspects of the adjustment, the Company concluded that its 2017 financial statements were not materially misstated and, therefore, no restatement was required.
Cash and Cash Equivalents
For purposes of the Consolidated Statements of Cash Flows, the Company has defined cash and cash equivalents as those amounts included in the balance sheet captions Cash and Due from Banks, Interest Bearing Deposits with Banks and Federal Funds Sold, which have original maturity dates of 3 months or less. For these instruments, the carrying amount is a reasonable estimate of fair value.
Investment Securities
Investment securities are classified at the time of purchase as held-to-maturity (“HTM”) if it is management’s intent and the Company has the ability to hold the securities until maturity. These securities are carried at cost, adjusted for amortization of premium over the term through the earliest call date and accretion of discount using a level yield of interest over the estimated remaining period until maturity. Losses, reflecting a decline in value judged by the Company to be other than temporary, are recognized in the period in which they occur.
Securities are classified as available-for-sale (“AFS”) if it is management’s intent, at the time of purchase, to hold the securities for an unstated period of time and may be used as part of the Company’s asset/liability management strategy. These securities are reported at fair value with aggregate unrealized gains or losses excluded from income and included as a separate component of shareholders’ equity, net of related income taxes. Fair values are based on quoted market prices or broker/dealer price quotations on a specific identification basis. Gains or losses on the sale of these securities are computed using the specific identification method.
Trading securities, if any, are acquired for short-term appreciation and are recorded in a trading portfolio and are carried at fair value, with unrealized gains and losses recorded in earnings.
Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: (1) OTTI related to credit loss, which must be recognized in the income statement; and (2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis.
Equity securities, are carried at fair value, with unrealized and realized gains recognized through earnings.
Loans & Leases
Loans & leases are reported at the principal amount outstanding net of unearned discounts and deferred loan & lease fees and costs. Interest income on loans & leases is accrued daily on the outstanding balances using the simple interest method. Loan & lease origination fees are deferred and recognized over the contractual life of the loan or lease as an adjustment to the yield. Loans & leases are placed on non-accrual status when the collection of principal or interest is in doubt or when they become past due for 90 days or more unless they are both well-secured and in the process of collection. For this purpose, a loan or lease is considered well-secured if it is collateralized by property having a net realizable value in excess of the amount of the loan or lease or is guaranteed by a financially capable party. When a loan or lease is placed on non-accrual status, the accrued and unpaid interest receivable is reversed and charged against current income; thereafter, interest income is recognized only as it is collected in cash. Additionally, cash would be applied to principal if all principal was not expected to be collected. Loans & leases placed on non-accrual status are returned to accrual status when the loans or leases are paid current as to principal and interest and future payments are expected to be made in accordance with the contractual terms of the loan or lease.
A loan or lease is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the original agreement. Impaired loans & leases are either: (1) non-accrual loans & leases; or (2) restructured loans & leases that are still accruing interest. Loans or leases determined to be impaired are individually evaluated for impairment. When a loan or lease is impaired, the Company measures impairment based on the present value of expected future cash flows discounted at the loan or lease's effective interest rate, except that as a practical expedient, it may measure impairment based on a loan or lease's observable market price, or the fair value of the collateral if the loan or lease is collateral dependent. A loan or lease is collateral dependent if the repayment of the loan or lease is expected to be provided solely by the underlying collateral.
A restructuring of a loan or lease constitutes a troubled debt restructuring (TDR) if the Company for economic or legal reasons related to the borrower’s (the term “borrower” is used herein to describe a customer who has entered into either a loan or lease transaction) financial difficulties grants a concession to the borrower that it would not otherwise consider. Restructured loans & leases typically present an elevated level of credit risk as the borrowers are not able to perform according to the original contractual terms. If the restructured loan or lease was current on all payments at the time of restructure and management reasonably expects the borrower will continue to perform after the restructure, management may keep the loan or lease on accrual. Loans & leases that are on nonaccrual status at the time they become TDR, remain on nonaccrual status until the borrower demonstrates a sustained period of performance, which the Company generally believes to be
consecutive months of payments, or equivalent. A loan or lease can be removed from TDR status if it was restructured at a market rate in a prior calendar year and is currently in compliance with its modified terms. However, these loans or leases continue to be classified as impaired and are individually evaluated for impairment as described above.Generally, the Company will not restructure loans or leases for borrowers unless: (1) the existing loan or lease is brought current as to principal and interest payments; and (2) the restructured loan or lease can be underwritten to reasonable underwriting standards. If these standards are not met other actions will be pursued (e.g., foreclosure) to collect outstanding loan or lease amounts. After restructure, a determination is made whether the loan or lease will be kept on accrual status based upon the underwriting and historical performance of the restructured credit.
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law, and was amended and extended by the Consolidated Appropriations Act of 2021 (“H.R. 133”) on December 21, 2020. The CARES Act and H.R. 133 provide financial institutions, under specific circumstances, the opportunity to temporarily suspend certain requirements under generally accepted accounting principles related to modifications for a limited period of time to account for the effects of COVID-19. In March 2020, a joint statement was issued by federal and state regulatory agencies, after consultation with the FASB, to clarify that short-term loan modifications are not TDRs if made on a good-faith basis in response to COVID-19 to borrowers who were current prior to any relief. Under this guidance, six months is provided as an example of short-term, and current is defined as less than 30 days past due at the time the modification program is implemented. The guidance also provides that these modified loans generally will not be classified as nonaccrual during the term of the modification. See “Note 2 – Risks and Uncertainties” for additional information on the CARES Act, H.R. 133 and the impact of COVID-19 on the Company.
Allowance for Credit Losses
The allowance for credit losses is an estimate of probable incurred credit losses inherent in the Company's loan & lease portfolio as of the balance sheet date. The allowance is established through a provision for credit losses, which is charged to expense. Additions to the allowance are expected to maintain the adequacy of the total allowance after credit losses and loan & lease growth. Credit exposures determined to be uncollectible are charged against the allowance. Cash received on previously charged off amounts is recorded as a recovery to the allowance. The overall allowance consists of three primary components: specific reserves related to impaired loans & leases; general reserves for inherent losses related to loans & leases that are not impaired; and an unallocated component that takes into account the imprecision in estimating and allocating allowance balances associated with macro factors.
The determination of the general reserve for loans & leases that are collectively evaluated for impairment is based on estimates made by management, to include, but not limited to, consideration of historical losses by portfolio segment, internal asset classifications, qualitative factors that include economic trends in the Company's service areas, industry experience and trends, geographic concentrations, estimated collateral values, the Company's underwriting policies, the character of the loan & lease portfolio, and probable losses inherent in the portfolio taken as a whole.
The Company maintains a separate allowance for each portfolio segment (loan & lease type). These portfolio segments include: (1) commercial real estate; (2) agricultural real estate; (3) real estate construction (including land and development loans); (4) residential 1st mortgages; (5) home equity lines and loans; (6) agricultural; (7) commercial; (8) consumer and other; and (9) equipment leases. The allowance for credit losses attributable to each portfolio segment, which includes both individually evaluated impaired loans & leases and loans & leases that are collectively evaluated for impairment, is combined to determine the Company's overall allowance, which is included on the consolidated balance sheet.
The Company assigns a risk rating to all loans & leases and periodically performs detailed reviews of all such loans & leases over a certain threshold to identify credit risks and assess overall collectability. For smaller balance loans & leases, such as consumer and residential real estate, a credit grade is established at inception, and then updated only when the loan or lease becomes contractually delinquent or when the borrower requests a modification. For larger balance loans, management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which borrowers operate and the fair values of collateral securing these loans & leases. These credit quality indicators are used to assign a risk rating to each individual loan or lease. These risk ratings are also subject to examination by independent specialists engaged by the Company. The risk ratings can be grouped into five major categories, defined as follows:
Pass and Watch – A pass loan or lease is a strong credit with no existing or known potential weaknesses deserving of management's close attention. This category also includes “Watch” loans, which is a loan with an emerging weakness in either the individual credit or industry that requires additional attention. A credit may also be classified Watch if cash flows have not yet stabilized, such as in the case of a development project. Included in this category are all loans in which the Bank entered into a CARES Act modification.
Special Mention – A special mention loan or lease has potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or lease or in the Company's credit position at some future date. Special mention loans & leases are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.
Substandard – A substandard loan or lease is not adequately protected by the current financial condition and paying capacity of the borrower or the value of the collateral pledged, if any. Loans or leases classified as substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Well-defined weaknesses include a project's lack of marketability, inadequate cash flow or collateral support, failure to complete construction on time or the project's failure to fulfill economic expectations. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.
Doubtful – Loans or leases classified doubtful have all the weaknesses inherent in those classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, based on currently known facts, conditions and values, highly questionable or improbable.
Loss – Loans or leases classified as loss are considered uncollectible. Once a loan or lease becomes delinquent and repayment becomes questionable, the Company will address collateral shortfalls with the borrower and attempt to obtain additional collateral. If this is not forthcoming and payment in full is unlikely, the Company will estimate its probable loss and immediately charge-off some or all of the balance.
The general reserve component of the allowance for credit losses also consists of reserve factors that are based on management's assessment of the following for each portfolio segment: (1) inherent credit risk; (2) historical losses; and (3) other qualitative factors. These reserve factors are inherently subjective and are driven by the repayment risk associated with each portfolio segment described below:
Commercial Real Estate – Commercial real estate mortgage loans are generally considered to possess a higher inherent risk of loss than the Company’s commercial, agricultural and consumer loan types. Adverse economic developments or an overbuilt market impact commercial real estate projects and may result in troubled loans. Trends in vacancy rates of commercial properties impact the credit quality of these loans. High vacancy rates reduce operating revenues and the ability for properties to produce sufficient cash flow to service debt obligations.
Real Estate Construction – Real estate construction loans, including land loans, are generally considered to possess a higher inherent risk of loss than the Company’s commercial, agricultural and consumer loan types. A major risk arises from the necessity to complete projects within specified cost and time lines. Trends in the construction industry significantly impact the credit quality of these loans, as demand drives construction activity. In addition, trends in real estate values significantly impact the credit quality of these loans, as property values determine the economic viability of construction projects.
Commercial – These loans are generally considered to possess a moderate inherent risk of loss because they are shorter-term; typically made to relationship customers; generally underwritten to existing cash flows of operating businesses; and may be collateralized by fixed assets, inventory and/or accounts receivable. Debt coverage is provided by business cash flows and economic trends influenced by unemployment rates and other key economic indicators are closely correlated to the credit quality of these loans.
Agricultural Real Estate and Agricultural – These loans are generally considered to possess a moderate inherent risk of loss since they are typically made to relationship customers and are secured by crop production, livestock and related real estate. These loans are vulnerable to two risk factors that are largely outside the control of Company and borrowers: commodity prices and weather conditions.
Leases – Equipment leases are generally considered to possess a moderate inherent risk of loss. As lessor, the Company is subject to both the credit risk of the borrower and the residual value risk of the equipment. Credit risks are underwritten using the same credit criteria the Company would use when making an equipment term loan. Residual value risk is managed through the use of qualified, independent appraisers that establish the residual values the Company uses in structuring a lease.
Residential 1st Mortgages and Home Equity Lines and Loans – These loans are generally considered to possess a lower inherent risk of loss. The degree of risk in residential real estate lending depends primarily on the loan amount in relation to collateral value, the interest rate and the borrower's ability to repay in an orderly fashion. Economic trends determined by unemployment rates and other key economic indicators are closely correlated to the credit quality of these loans. Weak economic trends indicate that the borrowers' capacity to repay their obligations may be deteriorating.
Consumer & Other – A consumer installment loan portfolio is usually comprised of a large number of small loans scheduled to be amortized over a specific period. Most installment loans are made for consumer purchases. Economic trends determined by unemployment rates and other key economic indicators are closely correlated to the credit quality of these loans. Weak economic trends indicate that the borrowers' capacity to repay their obligations may be deteriorating.
At least quarterly, the Board of Directors reviews the adequacy of the allowance, including consideration of the relative risks in the portfolio, current economic conditions and other factors. If the Board of Directors and management determine that changes are warranted based on those reviews, the allowance is adjusted. In addition, the Company's and Bank's regulators, including the Federal Reserve Board (“FRB”), the Department of Financial Protection and Innovation (“DFPI”) and the Federal Deposit Insurance Corporation (“FDIC”), as an integral part of their examination process, review the adequacy of the allowance. These regulatory agencies may require additions to the allowance based on their judgment about information available at the time of their examinations.
Acquired Loans
Loans acquired through purchase or through a business combination are recorded at their fair value at the acquisition date. Credit discounts, which reflect estimates of credit losses, expected to be incurred over the life of the loan, are included in the determination of fair value; therefore, an allowance for loan losses is not recorded at the acquisition date.
Allowance for Credit Losses on Off-Balance-Sheet Credit Exposures
The Company also maintains a separate allowance for off-balance-sheet commitments. Management estimates anticipated losses using historical data and utilization assumptions. The allowance for off-balance-sheet commitments is included in Interest Payable and Other Liabilities on the Company’s Consolidated Balance Sheet.
Right of Use Lease Asset & Lease Liability
The Company leases retail space and office space under operating leases. Most leases require the Company to pay real estate taxes, maintenance, insurance and other similar costs in addition to the base rent. Certain leases also contain lease incentives, such as tenant improvement allowances and rent abatement. Variable lease payments are recognized as lease expense as they are incurred. We record an operating lease right of use (ROU) asset and an operating lease liability (lease liability) for operating leases with a lease term greater than 12 months. The ROU asset and lease liability are recorded in other assets and other liabilities, respectively, in the consolidated statement of financial condition. 12 ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Accordingly, ROU assets are reduced by tenant improvement allowances from landlords plus any prepaid rent. We do not separate lease and non-lease components of contracts. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. Many of our leases contain various provisions for increases in rental rates, based either on changes in the published Consumer Price Index or a predetermined escalation schedule, which are factored into our determination of lease payments when appropriate. A majority of the leases provide the Company with the option to extend the lease term one or more times following expiration of the initial term. The ROU asset and lease liability terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Revenue from Contracts with Customers
The Company records revenue from contracts with customers in accordance with Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers” (“Topic 606”). Under Topic 606, the Company must identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the Company satisfies a performance obligation. Significant revenue has not been recognized in the current reporting period that results from performance obligations satisfied in previous periods.
The Company’s primary sources of revenue are derived from interest and dividends earned on loans, investment securities, and other financial instruments that are not within the scope of Topic 606. The Company has evaluated the nature of its contracts with customers and determined that further disaggregation of revenue from contracts with customers into more granular categories beyond what is presented in the Consolidated Statements of Income was not necessary. The Company generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices are typically fixed; charged either on a periodic basis or based on activity. Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is limited judgment involved in applying Topic 606 that significantly affects the determination of the amount and timing of revenue from contracts with customers.
Premises and Equipment
Premises, equipment, and leasehold improvements are stated at cost, less accumulated depreciation and amortization. Depreciation is computed principally by the straight-line method over the estimated useful lives of the assets. Estimated useful lives of buildings range from 30 to 40 years, and for furniture and equipment from 3 to 7 years. Leasehold improvements are amortized over the lesser of the terms of the respective leases, or their useful lives, which are generally 5 to 10 years. Remodeling and capital improvements are capitalized while maintenance and repairs are charged directly to occupancy expense.
Other Real Estate
Other real estate, which is included in other assets, is expected to be sold and is comprised of properties no longer utilized for business operations and property acquired through foreclosure in satisfaction of indebtedness. These properties are recorded at fair value less estimated selling costs upon acquisition. Revised estimates to the fair value less cost to sell are reported as adjustments to the carrying amount of the asset, provided that such adjusted value is not in excess of the carrying amount at acquisition. Initial losses on properties acquired through full or partial satisfaction of debt are treated as credit losses and charged to the allowance for credit losses at the time of acquisition. Subsequent declines in value from the recorded amounts, routine holding costs, and gains or losses upon disposition, if any, are included in non-interest expense as incurred.
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law, and was amended and extended by H.R. 133 on December 21, 2020. The CARES Act and H.R. 133 restrict the ability of financial institutions to exercise their foreclosure rights on residential and multi-family properties backed by federally guaranteed mortgage loans. The State of California has gone further and temporarily suspended all residential and commercial foreclosures through June 30, 2021. The Company is working with its borrowers when they make requests to defer payments on their mortgage loans. See “Note 2 – Risks and Uncertainties” for additional information on the CARES Act and the impact of COVID-19 on the Company.
Income Taxes
The Company uses the liability method of accounting for income taxes. This method results in the recognition of deferred tax assets and liabilities that are reflected at currently enacted income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. The deferred provision for income taxes is the result of the net change in the deferred tax asset and deferred tax liability balances during the year. This amount combined with the current taxes payable or refundable results in the income tax expense for the current year.
The Company follows the standards set forth in the “Income Taxes” topic of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”), which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. This standard prescribes a recognition threshold and measurement standard for the financial statement recognition and measurement of an income tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.
The Company accounts for leases with Investment Tax Credits (ITC) under the deferred method as established in ASC 740-10. ITC are viewed and accounted for as a reduction of the cost of the related assets and presented as deferred income on the Company’s financial statement.
The Company accounts for its interest in LIHTC using the cost method as established in ASC 323-740. As an investor, the Company obtains income tax credits and deductions from the operating losses of these tax credit entities. The income tax credits and deductions are allocated to the investors based on their ownership percentages and are recorded as a reduction of income tax expense (or an increase to income tax benefit) and a reduction of federal income taxes payable.
When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination.
At December 31, 2020 and 2019, the Company has no material uncertain tax positions and recognized no interest or penalties. The Company's policy is to recognize interest and penalties related to income taxes in the provision for income taxes in the Consolidated Statement of Income.
Basic and Diluted Earnings Per Common Share
The Company’s common stock is not traded on any exchange. However, trades are reported on the OTCQX under the symbol "FMCB". The shares are primarily held by local residents and are not actively traded. Basic earnings per common share amounts are computed by dividing net income by the weighted average number of common shares outstanding for the period. There are no common stock equivalent shares. Therefore, there is no difference between presentation of diluted and basic earnings per common share. See Note 15 – “Dividends and Basic and Diluted Earnings Per Common Share” for additional information.
Segment Reporting
The “Segment Reporting” topic of the FASB ASC requires that public companies report certain information about operating segments. It also requires that public companies report certain information about their products and services, the geographic areas in which they operate, and their major customers. The Company is a holding company for a community bank, which offers a wide array of products and services to its customers. Pursuant to its banking strategy, emphasis is placed on building relationships with its customers, as opposed to building specific lines of business. As a result, the Company is not organized around discernible lines of business and prefers to work as an integrated unit to customize solutions for its customers, with business line emphasis and product offerings changing over time as needs and demands change.
Comprehensive Income
The “Comprehensive Income” topic of the FASB ASC establishes standards for the reporting and display of comprehensive income and its components in the financial statements. Other comprehensive income refers to revenues, expenses, gains, and losses that U.S. GAAP recognize as changes in value to an enterprise but are excluded from net income. For the Company, comprehensive income includes net income and changes in fair value of its available-for-sale investment securities.
Loss Contingencies
Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the consolidated financial statements.
Business Combinations And Related Matters
Business combinations are accounted for under the acquisition method of accounting in accordance with ASC 805, Business Combinations. Under the acquisition method, the acquiring entity in a business combination recognizes 100 percent of the acquired assets and assumed liabilities, regardless of the percentage owned, at their estimated fair values as of the date of acquisition. Any excess of the fair value over the purchase price of net assets and other identifiable intangible assets acquired is recorded as bargain purchase gain. Assets acquired and liabilities assumed from contingencies must also be recognized at fair value, if the fair value can be determined during the measurement period. Results of operations of an acquired business are included in the statement of operations from the date of acquisition. Acquisition-related costs, including conversion charges, are expensed as incurred.
Goodwill and Other Intangible Assets: Goodwill is determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill that arises from a business combination is periodically evaluated for impairment at the reporting unit level, at least annually. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Core deposit intangible ("CDI") represents the estimated future benefit of deposits related to an acquisition and is booked separately from the related deposits and evaluated periodically for impairment. The CDI asset is amortized on a straight-line method over its estimated useful life of ten years. At December 31, 2020, the future estimated amortization expense for the CDI arising from our past acquisitions is as follows:
We make a qualitative assessment of whether it is more likely than not that the fair value of a reporting unit where goodwill is assigned is less than its carrying amount. If we conclude that it is more likely than not that the fair value is more than its carrying amount, no impairment is recorded. Goodwill is tested for impairment on an interim basis if circumstances change or an event occurs between annual tests that would more likely than not reduce the fair value of the reporting unit below its carrying amount. The qualitative assessment includes adverse events or circumstances identified that could negatively affect the reporting units’ fair value as well as positive and mitigating events. Such indicators may include, among others, a significant change in legal factors or in the general business climate, significant change in our stock price and market capitalization, unanticipated competition, and an action or assessment by a regulator. If the fair value of a reporting unit is less than its carrying amount, an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value is recognized. The loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.
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Risks and Uncertainties |
12 Months Ended |
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Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Risks and Uncertainties |
2. Risks and Uncertainties
The COVID-19 pandemic has affected all of us. Designated as an “essential business”, the Company’s subsidiary, Farmers & Merchants Bank of Central California, has kept all branches open and maintained regular business hours during these difficult times. Our staffing levels have remained stable during the COVID-19 crisis. We have taken what we believe are prudent measures to protect our employees and customers, while still providing core banking services.
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law, and was amended and extended by the Consolidated Appropriations Act of 2021 (“H.R. 133”) on December 21, 2020. Through this legislation, as well as related federal and state regulatory actions, the federal government has taken extraordinary efforts to provide financial assistance to individuals and companies to help them move through these difficult times. However, there are no guarantees how long the COVID-19 virus may continue to impact our economy, and therefore, the Company.
While we expect the effects of COVID-19 could have an adverse future impact on our business, financial condition and results of operations, we are unable to predict the full extent or nature of these impacts at the current time.
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Investment Securities |
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Investment Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities |
3. Investment Securities
The amortized cost, fair values, and unrealized gains and losses of the securities available-for-sale are as follows:
(in thousands)
(1) All Mortgage Backed Securities were issued by an agency or government sponsored entity of the U.S. government.
The book values, estimated fair values and unrealized gains and losses of investments classified as held-to-maturity are as follows: (in thousands)
Fair values are based on quoted market prices or dealer quotes. If a quoted market price or dealer quote is not available, fair value is estimated using quoted market prices for similar securities.
The amortized cost and estimated fair values of investment securities at December 31, 2020 by contractual maturity are shown in the following tables. (in thousands)
Expected maturities of mortgage-backed securities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
The following tables show those investments with gross unrealized losses and their market value aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at the dates indicated. (in thousands)
There were no HTM investments with gross unrealized losses at December 31, 2020.
As of December 31, 2020, the Company held 649 investment securities of which 13 were in an unrealized loss position for less than twelve months and 83 securities were in an unrealized loss position for twelve months or more. Management periodically evaluates each investment security for other-than-temporary impairment relying primarily on industry analyst reports and observations of market conditions and interest rate fluctuations. Management believes it will be able to collect all amounts due according to the contractual terms of the underlying investment securities.
Securities of Government Agency and Government Sponsored Entities – At December 31, 2020 and December 31, 2019, no securities of government agency and government sponsored entities were in a loss position.
U.S. Treasury Notes – At December 31, 2020 and December 31, 2019, no U.S. Treasury Note security investments were in a loss position.
U.S. Government SBA – At December 31, 2020, 8 U.S. Government SBA security investments were in a loss position for less than 12 months and 65 were in a loss position for 12 months or more. The unrealized losses on the Company's investment in U.S. Government SBA were $93,000 at December 31, 2020 and $113,000 at December 31, 2019. The unrealized losses were caused by interest rate fluctuations. Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the securities and it is more likely than not that the Company will not have to sell the securities before recovery of their cost basis, the Company did not consider these investments to be other-than-temporarily impaired at December 31, 2020 and December 31, 2019.
Mortgage Backed Securities - At December 31, 2020, 3 mortgage backed security investments were in a loss position for less than 12 months and 18 were in a loss position for 12 months or more. The unrealized losses on the Company's investment in mortgage-backed securities were $48,000 at December 31, 2020 and $99,000 at December 31, 2019. The unrealized losses were caused by interest rate fluctuations. The contractual cash flows of these investments are guaranteed by an agency or government sponsored entity of the U.S. government. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost of the Company's investment. Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the securities and it is more likely than not that the Company will not have to sell the securities before recovery of their cost basis, the Company did not consider these investments to be other-than-temporarily impaired at December 31, 2020 or 2019.
Corporate Securities - At December 30, 2020, 2 corporate securities were in an unrealized loss position for less than 12 months and none were in a loss position for 12 months or more. The unrealized losses on the Company’s investment in corporate securities were $18,000. Changes in the prices of corporate securities are primarily influenced by: (1) changes in market interest rates; (2) changes in perceived credit risk in the general economy or in particular industries; (3) changes in the perceived credit risk of a particular company; and (4) day to day trading supply, demand and liquidity. The Company monitors the status of each of our corporate securities and at the current time does not believe any of them to be exhibiting financial problems that could result in a loss in any individual security. Because the Company does not intend to sell the securities and it is more likely than not that the Company will not have to sell the securities before recovery of their cost basis, the Company does not consider these investments to be other-than-temporarily impaired at December 30, 2020.
Obligations of States and Political Subdivisions - At December 31, 2020, no obligations of states and political subdivisions were in a loss position for less than 12 months. None were in a loss position for 12 months or more. As of December 31, 2020, of the Company’s bank-qualified municipal bond portfolio is rated at either the issue or the issuer level, and all of these ratings are “investment grade.” The Company monitors the status of all municipal investments in the portfolio, and at the current time does not believe any of them to be exhibiting financial problems that could result in a loss in any individual security.
The unrealized losses on the Company’s investment in obligation of states and political subdivisions were $0 at December 31, 2020 and $12,000 at December 31, 2019. Management believes that any unrealized losses on the Company's investments in obligations of states and political subdivisions were caused by interest rate fluctuations. The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the amortized cost of the investment. Because the Company does not intend to sell the securities and it is more likely than not that the Company would not have to sell the securities before recovery of their cost basis, the Company did not consider these investments to be other-than-temporarily impaired at December 31, 2020 and December 31, 2019.
Proceeds from sales and calls of these securities were as follows:
Pledged Securities
As of December 31, 2020, securities carried at $439.7 million were pledged to secure public deposits, Federal Home Loan Bank (“FHLB”) borrowings, and other government agency deposits as required by law. This amount was $352.5 million at December 31, 2019.
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Federal Home Loan Bank Stock and Other Equity Securities, at Cost |
12 Months Ended |
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Dec. 31, 2020 | |
Federal Home Loan Bank Stock and Other Equity Securities, at Cost [Abstract] | |
Federal Home Loan Bank Stock and Other Equity Securities, at Cost |
4. Federal Home Loan Bank Stock and Other Equity Securities, at Cost
The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock and other equity securities are carried at cost, classified as restricted securities, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. FHLB stock and other equity securities are reported in Interest Receivable and Other Assets on the Company’s Consolidated Balance Sheets and totaled $12.7 million at December 31, 2020 and 2019.
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Loans & Leases |
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Loans & Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans & Leases |
5. Loans & Leases
Loans & leases as of December 31 consisted of the following:
(1) Includes CARES Act Small Business Administration Paycheck Protection Program loans of $224,309 as of December 31, 2020.
Paycheck Protection Program (“PPP”) … Under the CARES Act and H.R. 133 (see “Note 2 – Risks and Uncertainties”) the Small Business Administration (“SBA”) was directed by Congress to provide loans to small businesses with less than 500 employees to assist these businesses in meeting their payroll and other financial obligations during the COVID-19 pandemic. These government guaranteed loans are made with an interest rate of 1%, a risk weight of 0% under risk-based capital rules, have a term of 2 years, and under certain conditions the SBA will forgive them. The Bank actively participated in the PPP, and since April 2020, the Bank has funded $347.4 million of loans for 1,540 small business customers.
At December 31, 2020, the portion of loans that were approved for pledging as collateral on borrowing lines with the Federal Home Loan Bank (“FHLB”) and the Federal Reserve Bank (“FRB”) were $808.9 million and $706.2 million, respectively. The borrowing capacity on these loans was $630.5 million from FHLB and $438.1 million from the FRB.
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Allowance for Credit Losses |
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Allowance for Credit Losses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Credit Losses |
6. Allowance for Credit Losses
The Company was originally scheduled to implement ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments (“CECL”) as of January 1, 2020. The CARES Act and H.R. 133 provide the election to defer CECL implementation until January 1, 2022. The Company has elected to delay CECL implementation.
The following tables show the allocation of the allowance for credit losses at December 31, 2020 and December 31, 2019 by portfolio segment and by impairment methodology (in thousands):
The ending balance of loans individually evaluated for impairment includes restructured loans in the amount of $876,000 and $2.6 million at December 31, 2020 and 2019, respectively, which are no longer disclosed or classified as TDR’s, since they were restructured at market terms.
The following tables show the loan & lease portfolio, including unearned income allocated by management’s internal risk ratings at December 31, 2020 and December 31, 2019 (in thousands):
See Note 1. “Significant Accounting Policies – Allowance for Credit Losses” for a description of the internal risk ratings used by the Company. There were no loans & leases outstanding at December 31, 2020 and 2019 rated doubtful or loss.
The following tables show an aging analysis of the loan & lease portfolio, including unearned income, by the time past due at December 31, 2020 and December 31, 2019 (in thousands):
Non-accrual loans & leases at December 31, 2020 were $495,000. There were no non-accrual loans & leases at December 31, 2019. Foregone interest income on non-accrual loans & leases, which would have been recognized during the period, if all such loans & leases had been current in accordance with their original terms, totaled $22,000, $0, and $0 at December 31, 2020, 2019, and 2018 respectively.
The following tables show information related to impaired loans & leases at and for the year ended December 31, 2020 and December 31, 2019 (in thousands):
Total recorded investment shown in the prior table will not equal the total ending balance of loans & leases individually evaluated for impairment on the allocation of allowance table. This is because this table does not include impaired loans that were previously modified in a troubled debt restructuring, are currently performing and are no longer disclosed or classified as TDR’s, since they were restructured at market terms.
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law, and was amended and extended by the Consolidated Appropriations Act 2021 (“H.R. 133”) on December 21, 2020. The CARES Act and H.R. 133 provide financial institutions, under specific circumstances, the opportunity to temporarily suspend certain requirements under generally accepted accounting principles related to TDR’s for a limited period of time to account for the effects of COVID-19. In March 2020, a joint statement was issued by federal and state regulatory agencies, after consultation with the FASB, to clarify that short-term loan modifications are not TDRs if made on a good-faith basis in response to COVID-19 to borrowers who were current prior to any relief. Under this guidance, six months is provided as an example of short-term, and current is defined as less than 30 days past due at the time the modification program is implemented. The guidance also provides that these modified loans generally will not be classified as nonaccrual during the term of the modification. Since April 2020, we have restructured $277.6 million of loans under the CARES Act and H.R. 133 guidelines. As of December 31, 2020, $3.7 million of these loans remain in a deferral status, the other loans having returned to making principal and/or interest payments. We believe that these actions will assist these borrowers in getting through these difficult times, but no guaranties can be made that at some time in the future these loans will not be required to be accounted for as a TDR. For borrowers who are 30 days or more past due when enrolling in a loan modification program related to the COVID-19 pandemic, we evaluate the loan modifications under our existing TDR framework, and where such a loan modification would result in a more than insignificant concession to a borrower experiencing financial difficulty, the loan will be accounted for as a TDR and will generally not accrue interest. See “Note 2 – Risks and Uncertainties” for additional information on the CARES Act, H.R. 133 and the impact of COVID-19 on the Company.
At December 31, 2020, there were no formal foreclosure proceedings in process for consumer mortgage loans secured by residential real estate properties.
At December 31, 2020, the Company allocated $158,000 of specific reserves to $7.9 million of troubled debt restructured loans, all of which were performing. At December 31, 2019, the Company allocated $612,000 of specific reserves to $12.1 million of troubled debt restructured loans, all of which were performing. The Company had no commitments at December 31, 2020 and December 31, 2019 to lend additional amounts to customers with outstanding loans that are classified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan.
Modifications involving a reduction of the stated interest rate of the loan were for 5 years. Modifications involving an extension of the maturity date range from 3 months to 10 years.
The following table presents loans by class modified as troubled debt restructured loans for the year ended December 31, 2020 (in thousands):
The troubled debt restructurings described above increased the allowance for credit losses by $120,000. There were no charge-offs for the twelve months ended December 31, 2020.
During the year ended December 31, 2020, there were no payment defaults on loans modified as troubled debt restructurings within twelve months following the modification.
The following table presents loans by class modified as troubled debt restructured loans for the year ended December 31, 2019 (in thousands):
The troubled debt restructurings described above increased the allowance for credit losses by $101,000. There were no charge-offs for the twelve months ended December 31, 2019.
During the year ended December 31, 2019, there were no payment defaults on loans modified as troubled debt restructurings within twelve months following the modification.
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Premises and Equipment |
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Premises and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premises and Equipment |
7. Premises and Equipment
Premises and equipment as of December 31 consisted of the following:
Depreciation and amortization on premises and equipment included in occupancy and equipment expense amounted to $2,769,000, $2,756,000, and $2,421,000 for the years ended December 31, 2020, 2019 and 2018, respectively. Rental income was $434,000, $183,000, and $173,000 for the years ended December 31, 2020, 2019, and 2018, respectively.
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Other Real Estate |
12 Months Ended |
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Dec. 31, 2020 | |
Other Real Estate [Abstract] | |
Other Real Estate |
8. Other Real Estate
The Bank reported $873,000 in other real estate at December 31, 2020, and December 31, 2019. Other real estate includes property no longer utilized for business operations and property acquired through foreclosure proceedings. These properties are carried at fair value less selling costs determined at the date acquired. Losses, if any, arising from properties acquired through foreclosure are charged against the allowance for loan losses at the time of foreclosure. Subsequent declines in value, periodic holding costs, and net gains or losses on disposition are included in other operating expense as incurred. Other real estate is reported in Interest Receivable and Other Assets on the Company’s Consolidated Balance Sheets.
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Time Deposits |
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Time Deposits |
9. Time Deposits
Time Deposits of $250,000 or more as of December 31 were as follows:
At December 31, 2020, the scheduled maturities of time deposits were as follows:
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Income Taxes |
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Income Taxes [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes |
10. Income Taxes
Current and deferred income tax expense (benefit) provided for the years ended December 31 consisted of the following:
The total provision for income taxes differs from the federal statutory rate as follows:
The components of net deferred tax assets as of December 31 are as follows: The net deferred tax assets are reported in Interest Receivable and Other Assets on the Company’s Consolidated Balance Sheet.
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The CARES Act provides options for accelerating refunds associated with previously paid alternative minimum taxes. The Company benefited from the alternative minimum tax refund provisions of the CARES Act and submitted accelerated refund claims during the year ended December 31, 2020. Based upon the level of historical taxable income and projections for future taxable income over the periods during which the deferred tax assets are expected to be deductible, Management believes it is more likely than not we will realize the benefit of the remaining deferred tax assets.
The Company and its subsidiaries file income tax returns in the U.S. federal and California jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by the tax authorities for the years before 2016.
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Short Term Borrowings |
12 Months Ended |
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Dec. 31, 2020 | |
Short Term Borrowings [Abstract] | |
Short Term Borrowings |
11. Short Term Borrowings
The Company had unused lines of credit available for short-term liquidity purposes of $1.3 billion at December 31, 2020 and 2019. Federal Funds purchased and advances are generally issued on an overnight basis. There were no advances from the FHLB at December 31, 2020 or 2019. There were no Federal Funds purchased or advances from the FRB at December 31, 2020 or 2019.
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Federal Home Loan Bank Advances |
12 Months Ended |
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Dec. 31, 2020 | |
Federal Home Loan Bank Advances [Abstract] | |
Federal Home Loan Bank Advances |
12. Federal Home Loan Bank Advances
The Company had no short-term or long-term advances from the Federal Home Loan Bank of San Francisco at December 31, 2020 or 2019.
In accordance with the Collateral Pledge and Security Agreement, advances are secured by all FHLB stock held by the Company. At December 31, 2020, $808.9 million in loans were approved for pledging as collateral on borrowing lines with the FHLB. The borrowing capacity on these loans was $630.5 million.
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Long-term Subordinated Debentures |
12 Months Ended |
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Dec. 31, 2020 | |
Long-term Subordinated Debentures [Abstract] | |
Long-term Subordinated Debentures |
13. Long-term Subordinated Debentures
In December 2003, the Company formed a wholly owned Connecticut statutory business trust, FMCB Statutory Trust I (“Statutory Trust I”), which issued $10.0 million of guaranteed preferred beneficial interests in the Company’s junior subordinated deferrable interest debentures (the “Trust Preferred Securities”). The Company is not considered the primary beneficiary of the trust (variable interest entity), therefore the trust is not consolidated in the Company’s financial statements, but rather the subordinated debentures are shown as a liability. These debentures qualify as Tier 1 capital under current regulatory guidelines. All of the common securities of Statutory Trust I are owned by the Company. The proceeds from the issuance of the common securities and the Trust Preferred Securities were used by FMCB Statutory Trust to purchase $10.3 million of junior subordinated debentures of the Company, which carry a floating rate based on three-month LIBOR plus 2.85%. The debentures represent the sole asset of Statutory Trust I. The Trust Preferred Securities accrue and pay distributions at a floating rate of three-month LIBOR plus 2.85% per annum of the stated liquidation value of $1,000 per capital security. The Company has entered into contractual arrangements which, taken collectively, fully and unconditionally guarantee payment to the extent that Statutory Trust I has funds available therefore of: (i) accrued and unpaid distributions required to be paid on the Trust Preferred Securities; (ii) the redemption price with respect to any Trust Preferred Securities called for redemption by Statutory Trust I; and (iii) payments due upon a voluntary or involuntary dissolution, winding up, or liquidation of Statutory Trust I. The Trust Preferred Securities are mandatorily redeemable upon maturity of the subordinated debentures on December 17, 2033, or upon earlier redemption as provided in the indenture. The Company has the right to redeem the subordinated debentures purchased by Statutory Trust I, in whole or in part, on or after December 17, 2008. As specified in the indenture, if the subordinated debentures are redeemed prior to maturity, the redemption price will be the principal amount and any accrued but unpaid interest. Additionally, if the Company decided to defer interest on the subordinated debentures, the Company would be prohibited from paying cash dividends on the Company’s common stock.
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Shareholders' Equity |
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Shareholders' Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity |
14. Shareholders’ Equity
In 1998, the Board approved the Company’s first common stock repurchase program. This program has been extended and expanded several times since then, and most recently, on November 6, 2018, the Board of Directors approved an extension of the $20 million stock repurchase program to December 31, 2021.
Repurchases under the program may be made from time to time on the open market or through private transactions. The repurchase program also requires that no repurchases may be made if the Bank would not remain “well-capitalized” after the repurchase. There were no stock repurchases made in 2020 or 2019 under the Common Stock Repurchase Plan.
On November 23, 2020, the Board of Directors of Farmers & Merchants Bancorp approved, and all applicable regulators provided statements of non-objection regarding, the Company’s repurchase and retirement of up to $8.5 million of its outstanding common stock during the fourth quarter of 2020 and the first half of 2021. These repurchases will be done outside of the Company’s current repurchase plan. All repurchases will be made at the then prevailing market prices. In the fourth quarter of 2020 the Company repurchased $2.8 million of shares from shareholders.
On August 5, 2008, the Board of Directors approved a Share Purchase Rights Plan (the “Rights Plan”), pursuant to which the Company entered into a Rights Agreement dated August 5, 2008, with Computershare as Rights Agent, and the Company declared a dividend of a right to acquire one preferred share purchase right (a “Right”) for each outstanding share of the Company’s common stock, $0.01 par value per share, to stockholders of record at the close of business on August 15, 2008. Generally, the Rights are only triggered and become exercisable if a person or group (the “Acquiring Person”) acquires beneficial ownership of 10 percent or more of the Company’s common stock or announces a tender offer for 10 percent or more of the Company’s common stock.
The Rights Plan is similar to plans adopted by many other publicly traded companies. The effect of the Rights Plan is to discourage any potential acquirer from triggering the Rights without first convincing the Company’s Board of Directors that the proposed acquisition is fair to, and in the best interest of, all of the stockholders of the Company. The provisions of the Plan, if triggered by the Acquiring Person, will substantially dilute the equity and voting interest of any potential acquirer unless the Board of Directors approves of the proposed acquisition (under Article XV of the Company’s Certificate of Incorporation, the Board of Directors has the authority to consider any and all factors in determining whether an acquisition is in the best interests of the Company and its stockholders). Each Right, if and when exercisable, will entitle the registered holder to purchase from the Company one
of a share of Series A Junior Participating Preferred Stock, no par value, at a purchase price of $1,600 for each one one-hundredth of a share, subject to adjustment. Each holder of a Right (except for the Acquiring Person, whose Rights will be null and void upon such event) shall thereafter have the right to receive, upon exercise, that number of Common Shares of the Company having a market value of two times the exercise price of the Right. At any time before a person becomes an Acquiring Person, the Rights can be redeemed, in whole, but not in part, by Farmers and Merchants Bancorp’s Board of Directors at a price of $0.001 per Right.The Rights Plan was set to expire on August 5, 2018. On November 19, 2015, the Board of Directors approved a seven-year extension of the term of the Rights Plan. Pursuant to an Amendment to the Rights Agreement dated February 18, 2016, the term of the Rights Plan was extended from August 5, 2018 to August 5, 2025. The extension of the term of the Rights Plan was intended as a means to continue to guard against abusive takeover tactics and was not in response to any particular proposal. The Board also increased the purchase price under the Rights Plan to $1,600 per one
of a preferred share from $1,200, to reflect the increase in the market price of the Company’s common stock over the past several years.Dividends from the Bank constitute the principal source of cash to the Company. The Company is a legal entity separate and distinct from the Bank. Under regulations controlling California state chartered banks, the Bank is, to some extent, limited in the amount of dividends that can be paid to the Company without prior approval of the California DFPI. These regulations require approval if total dividends declared by a state chartered bank in any calendar year exceed the Bank’s net profits for that year combined with its retained net profits for the preceding two calendar years.
During 2020, the Company issued a combined total 523 shares of common stock to the Bank’s non-qualified deferred compensation retirement plans. All of the shares were issued at a price of $770.00 per share based upon valuations completed during the quarter of issuance by a nationally recognized bank consulting and advisory firm and in reliance upon the exemption in Section 4(a)(2) of the Securities Act of 1933, as amended, and the regulations promulgated thereunder. The proceeds were contributed to the Bank as equity capital.
During 2019, the Company issued a combined total 9,312 shares of common stock to the Bank’s non-qualified deferred compensation retirement plans. All of the shares were issued at prices ranging from $715.00 to $770.00 per share based upon valuations completed during the quarter of issuance by a nationally recognized bank consulting and advisory firm and in reliance upon the exemption in Section 4(a)(2) of the Securities Act of 1933, as amended, and the regulations promulgated thereunder. The proceeds were contributed to the Bank as equity capital.
During 2018, the Company issued a combined total 13,520 shares of common stock to the Bank’s non-qualified deferred compensation retirement plans. There were also 2,400 shares issued to individuals during 2018. All of the shares were issued at prices ranging from $635.00 to $690.00 per share based upon valuations completed during the quarter of issuance by a nationally recognized bank consulting and advisory firm and in reliance upon the exemption in Section 4(a)(2) of the Securities Act of 1933, as amended, and the regulations promulgated thereunder. The proceeds were contributed to the Bank as equity capital.
The Company and the Bank are subject to various federal regulatory capital requirements under the Basel III Capital Rules. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company and the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company and the Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.
The implementation of Basel III requirements increased the required capital levels that the Company and the Bank must maintain. The final rules included new minimum risk-based capital and leverage ratios, which have been fully phased in. The new minimum capital level requirements applicable to the Company and the Bank under the final rules are: (i) a common equity Tier 1 capital ratio of 4.5% of risk-weighted assets (“RWA”); (ii) a Tier 1 capital ratio of 6% of RWA; (iii) a total capital ratio of 8% of RWA; and (iv) a Tier 1 leverage ratio of 4% of total assets. The final rules also established a “capital conservation buffer” of 2.5% above each of the new regulatory minimum capital ratios, which resulted in the following minimum ratios: (i) a common equity Tier 1 capital ratio of 7.0% of RWA; (ii) a Tier 1 capital ratio of 8.5% of RWA; and (iii) a total capital ratio of 10.5% of RWA. An institution will be subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital level falls below the buffer amount. The final rules also permit the Company’s subordinated debentures issued in 2003 to continue to be counted as Tier 1 capital.
The Company believes that it is currently in compliance with all of these capital requirements and that they will not result in any restrictions on the Company’s business activity.
In addition, the most recent notification from the FDIC categorized the Bank as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the following tables. There are no conditions or events since that notification that management believes have changed the Bank’s category.
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Dividends and Basic and Diluted Earnings Per Common Share |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and Basic and Diluted Earnings Per Common Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and Basic and Diluted Earnings Per Common Share |
15. Dividends and Basic and Diluted Earnings Per Common Share
Total cash dividends during 2020 were $11,700,000 or $14.75 per share of common stock, an increase of 3.9% per share from $11,221,000 or $14.20 per share in 2019. In 2018, cash dividends totaled $11,151,000 or $13.90 per share.
Basic earnings per common share amounts are computed by dividing net income by the weighted average number of common shares outstanding for the period. The Company has no securities or other contracts, such as stock options, that could require the issuance of additional common stock. Accordingly, diluted earnings per share are equal to basic earnings per share. The following table calculates the basic and diluted earnings per common share for the periods indicated.
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Employee Benefit Plans |
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Dec. 31, 2020 | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans |
16. Employee Benefit Plans
Profit Sharing Plan
The Company, through the Bank, sponsors a Profit Sharing Plan for substantially all full-time employees of the Company with
or more years of service. Participants receive up to two annual employer contributions, one is discretionary and the other is mandatory. The discretionary contributions to the Profit Sharing Plan are determined annually by the Board of Directors. The discretionary contributions totaled $1.5 million, $1.4 million, and $1.2 million for the years ended December 31, 2020, 2019, and 2018, respectively. The mandatory contributions to the Profit Sharing Plan are made according to a predetermined set of criteria. Mandatory contributions totaled $1.7 million, $1.6 million, and $1.4 million for the years ended December 31, 2020, 2019, and 2018, respectively. Company employees are permitted, within limitations imposed by tax law, to make pretax contributions and after tax (Roth) contributions to the 401(k) feature of the Profit Sharing Plan. The Company does not match employee contributions within the 401(k) feature of the Profit Sharing Plan and the Company can terminate the Profit Sharing Plan at any time. Benefits pursuant to the Profit Sharing Plan vest 0% during the first year of participation, 25% per full year thereafter and after five years such benefits are fully vested.Executive Retirement Plan and Life Insurance Arrangements
The Company, through the Bank, sponsors an Executive Retirement Plan (“ERP”) for certain executive level employees. The ERP is a non-qualified deferred compensation plan and was developed to supplement the Company’s Profit Sharing Plan, which, as a qualified retirement plan, has a ceiling on benefits as set by the Internal Revenue Service. The ERP is comprised of: (1) a Performance Component which makes contributions based upon long-term cumulative profitability and increase in market value of the Company; (2) a Salary Component which makes contributions based upon participant salary levels; and (3) an Equity Component for which contributions are discretionary and subject to Board of Directors approval. The Company maintains a Rabbi Trust to fund, in part, the ERP. The Rabbi Trust is an irrevocable grantor trust to which the Company may contribute assets for the limited purpose of funding a nonqualified deferred compensation plan. The Company may not use the assets of the Rabbi Trust for any purpose other than meeting its obligations under the ERP, however, the assets of the Rabbi Trust remain subject to the claims of its creditors and are included in the consolidated financial statements. The Company contributes cash to the Rabbi Trust from time to time for the sole purpose of funding the ERP. The Rabbi Trust will use any cash the Company contributes to purchase shares of common stock of the Company, and other financial instruments, on the open market. ERP contributions are invested in a mix of financial instruments; however, the Equity Component contributions are invested primarily in common stock of the Company.
The Company expensed $6.8 million to the ERP during the year ended December 31, 2020, $6.6 million during the year ended December 31, 2019 and $6.2 million during the year ended December 31, 2018. The Company’s carrying value of the liability under the ERP was $56.7 million as of December 31, 2020 and $50.5 million as of December 31, 2019. The Company’s shares of common stock held as investments in the Rabbi Trust of the ERP as of December 31, 2020 and 2019 totaled 52,980 and 48,133 with an historical cost basis of $31.2 million and $29.1 million, respectively. All amounts have been fully funded into the Rabbi Trust as of December 31, 2020 and 2019. The consolidated investments held in the Rabbi Trust are recorded at fair value with changes in unrealized gains or losses recorded within non-interest income and the equal and offsetting charges in the related liability are recorded in non-interest expense in the consolidated statements of income.
Net gains on ERP plan investments were $1.8 million in 2020 compared to net gains of $2.6 million in 2019. Balances in non-qualified deferred compensation plans may be invested in financial instruments whose market value fluctuates based upon trends in interest rates and stock prices.
The Company has purchased single premium life insurance policies on the lives of certain key employees of the Company. These policies provide: (1) financial protection to the Company in the event of the death of a key employee; and (2) significant income to the Company to offset the expense associated with the Executive Retirement Plan and other employee benefit plans, since the interest earned on the cash surrender value of the policies is tax exempt as long as the policies are used to finance employee benefits. As compensation to each employee for agreeing to allow the Company to purchase an insurance policy on his or her life, split dollar agreements have been entered into with those employees. These agreements provide for a division of the life insurance death proceeds between the Company and each employee’s designated beneficiary or beneficiaries.
The Company earned tax-exempt interest on the life insurance policies of $2.1 million for the year ended December 31, 2020, $2.0 million for the year ended December 31, 2019, and $1.9 million for the year ended December 31, 2018. As of December 31, 2020 and 2019, the total cash surrender value of the insurance policies was $69.2 million and $67.1 million, respectively.
Senior Management Retention Plan
The Company, through the Bank, sponsors a Senior Management Retention Plan (“SMRP”) for certain senior level employees. The SMRP is a non-qualified deferred compensation plan and was developed to supplement the Company’s Profit Sharing Plan, which, as a qualified retirement plan, has a ceiling on benefits as set by the Internal Revenue Service. All contributions are discretionary and subject to the Board of Directors approval. The Company maintains a Rabbi Trust to fund, in part, the SMRP. The Rabbi Trust is an irrevocable grantor trust to which the Company may contribute assets for the limited purpose of funding a nonqualified deferred compensation plan. The Company may not use the assets of the Rabbi Trust for any purpose other than meeting its obligations under the SMRP, however, the assets of the Rabbi Trust remain subject to the claims of its creditors and are included in the consolidated financial statements. The Company contributes cash to the Rabbi Trust from time to time for the sole purpose of funding the SMRP. The Rabbi Trust will use any cash the Company contributes to purchase shares of common stock of the Company, and other financial instruments, on the open market. Contributions to the SMRP are invested primarily in common stock of the Company.
The Company expensed $2.3 million to the SMRP during the year ended December 31, 2020, $1.3 million during the year ended December 31, 2019 and $1.5 million during the year ended December 31, 2018. The Company’s carrying value of the liability under the SMRP was $8.6 million as of December 31, 2020 and $6.3 million as of December 31, 2019. The Company’s shares of stock held as investments in the Rabbi Trust of the SMRP as of December 31, 2020 and December 31, 2019 totaled 12,548 and 9,822 shares with an historical cost basis of $7.9 million and $5.8 million, respectively. All amounts have been fully funded into the Rabbi Trust as of December 31, 2020 and 2019. The consolidated investments held in the Rabbi Trust are recorded at fair value with changes in unrealized gains or losses recorded within non-interest income and the equal and offsetting charges in the related liability are recorded in non-interest expense in the consolidated statements of income.
Net gains on SMRP plan investments were $0.1 million in 2020 compared to zero in 2019. Balances in non-qualified deferred compensation plans may be invested in financial instruments whose market value fluctuates based upon trends in interest rates and stock prices.
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Fair Value Measurements |
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Fair Value Measurements |
17. Fair Value Measurements
The Company follows the “Fair Value Measurement and Disclosures” topic of the FASB ASC, which establishes a framework for measuring fair value in U.S. GAAP and expands disclosures about fair value measurements. This standard applies whenever other standards require, or permit, assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. In this standard, the FASB clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability. In support of this principle, this standard establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy is as follows:
Level 1 inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that the entity has the ability to access at the measurement date.
Level 2 inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.
Level 3 inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.
Management monitors the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period.
Management evaluates the significance of transfers between levels based upon the nature of the financial instrument and size of the transfer relative to total assets, total liabilities or total earnings.
Securities classified as available-for-sale are reported at fair value on a recurring basis utilizing Level 1, 2 and 3 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things.
The Company does not record all loans & leases at fair value on a recurring basis. However, from time to time, a loan or lease is considered impaired and an allowance for credit losses is established. Once a loan or lease is identified as individually impaired, management measures impairment in accordance with the “Receivable” topic of the FASB ASC. The fair value of impaired loans or leases is estimated using one of several methods, including collateral value when the loan is collateral dependent, market value of similar debt, enterprise value, and discounted cash flows. Impaired loans & leases not requiring an allowance represent loans & leases for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans & leases. Impaired loans & leases where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy. The fair value of collateral dependent impaired loans is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including sales comparison, cost and the income approach. Adjustments are often made in the appraisal process by the appraisers to take in to account differences between the comparable sales and income and other available data. Such adjustments can be significant and typically result in a Level 3 classification of the inputs for determining fair value. The valuation technique used for Level 3 nonrecurring impaired loans is primarily the sales comparison approach less selling costs of 10%.
Other Real Estate (“ORE”) is reported at fair value on a non-recurring basis. Fair values are based on recent real estate appraisals. These appraisals may use a single valuation approach or a combination of approaches including sales comparison, cost and the income approach. Adjustments are often made in the appraisal process by the appraisers to take in to account differences between the comparable sales and income and other available data. Such adjustments can be significant and typically result in a Level 3 classification of the inputs for determining fair value. The valuation technique used for Level 3 nonrecurring ORE is primarily the sales comparison approach less selling costs of 10%.
The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value for the periods indicated.
Fair values for Level 2 available-for-sale investment securities are based on quoted market prices for similar securities. During the year ended December 31, 2020, there were no transfers in or out of level 1, 2, or 3.
The following tables present information about the Company’s impaired loans & leases and other real estate, classes of assets or liabilities that the Company carries at fair value on a non-recurring basis, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value for the periods indicated. Not all impaired loans & leases are carried at fair value. Impaired loans & leases are only included in the following tables when their fair value is based upon an appraisal of the collateral, and if that appraisal results in a partial charge-off or the establishment of a specific reserve.
The Company’s property appraisals are primarily based on the sales comparison approach and the income approach methodologies, which consider recent sales of comparable properties, including their income generating characteristics, and then make adjustments to reflect the general assumptions that a market participant would make when analyzing the property for purchase. These adjustments may increase or decrease an appraised value and can vary significantly depending on the location, physical characteristics and income producing potential of each property. Additionally, the quality and volume of market information available at the time of the appraisal can vary from period to period and cause significant changes to the nature and magnitude of comparable sale adjustments. Given these variations, comparable sale adjustments are generally not a reliable indicator for how fair value will increase or decrease from period to period. Under certain circumstances, management discounts are applied based on specific characteristics of an individual property.
The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a nonrecurring basis at December 31, 2020 and 2019:
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Fair Value of Financial Instruments |
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Fair Value of Financial Instruments |
18. Fair Value of Financial Instruments
U.S. GAAP requires disclosure of fair value information about financial instruments, whether or not recognized on the balance sheet, for which it is practical to estimate that value. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. The use of assumptions and various valuation techniques, as well as the absence of secondary markets for certain financial instruments, will likely reduce the comparability of fair value disclosures between financial institutions. In some cases, book value is a reasonable estimate of fair value due to the relatively short period of time between origination of the instrument and its expected realization. The fair value of loans held for investment, excluding previously presented impaired loans measured at fair value on a non-recurring basis, is estimated using discounted cash flow analyses consistent with ASC 820. The discount rates used to determine fair value use interest rate spreads that reflect factors such as liquidity, risk premium, credit, and nonperformance risk of the loans. Loans are considered a Level 3 classification.
The following tables summarize the carrying value and estimated fair value of financial instruments for the periods indicated:
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Commitments and Contingencies |
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Commitments and Contingencies [Abstract] | |||||||||||||||||||||||||||||||||||||
Commitments and Contingencies |
19. Commitments and Contingencies
In the normal course of business, the Company enters into financial instruments with off balance sheet risk in order to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These instruments include commitments to extend credit, letters of credit, and other types of financial guarantees. The Company had the following off balance sheet commitments as of the dates indicated.
The Company’s exposure to credit loss in the event of nonperformance by the other party with regard to standby letters of credit, undisbursed loan commitments, and financial guarantees is represented by the contractual notional amount of those instruments. 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. The Company uses the same credit policies in making commitments and conditional obligations as it does for recorded balance sheet items. The Company may or may not require collateral or other security to support financial instruments with credit risk. Evaluations of each customer’s creditworthiness are performed on a case-by-case basis.
Standby letters of credit are conditional commitments issued by the Company to guarantee performance of or payment for a customer to a third party. Outstanding standby letters of credit have maturity dates ranging from 1 to 25 months with final expiration in January 2022. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.
In the ordinary course of business, the Company becomes involved in litigation arising out of its normal business activities. Management, after consultation with legal counsel, believes that the ultimate liability, if any, resulting from the disposition of such claims would not be material in relation to the financial position of the Company.
The Company may be required to maintain average reserves on deposit with the Federal Reserve Bank primarily based on deposits outstanding. Reserve requirements are offset by the Company’s vault cash and deposit balances maintained with the Federal Reserve Bank.
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Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases |
20. Leases
Lessee – Operating Leases
Effective January 1, 2019, the Company adopted the provisions of Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842),” for all open leases with a term greater than one year as of the adoption date, using the modified retrospective approach. Prior comparable periods are presented in accordance with previous guidance under Accounting Standards Codification ASC 840.
Operating leases in which we are the lessee are recorded as operating lease right-of-use (“ROU”) assets and operating lease liabilities, included in
and , respectively, on our consolidated balance sheets. We do not currently have any significant finance leases in which we are the lessee.Operating lease ROU assets represent our right to use an underlying asset during the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents our incremental borrowing rate at the lease commencement date. ROU assets are further adjusted for lease incentives. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded net in occupancy expense in the consolidated statements of income.
Our leases relate primarily to office space and bank branches with remaining lease terms of generally 1 to 10 years. Certain lease arrangements contain extension options which typically range from 5 to 10 years at the then fair market rental rates. ASC 842 requires lessees to evaluate whether option periods, if available, will be exercised in order to determine the full life of the lease. The Company used the first option period, unless it is a relatively new lease that has a long initial lease term or other extenuating circumstances.
As of December 31, 2020, operating lease ROU assets and liabilities were $4.80 million and $4.92 million, respectively. Operating lease expenses totaled $833,000 for the year ended December 31, 2020. As of December 31, 2019, operating lease ROU assets and liabilities were $4.98 million and $5.03 million, respectively. Operating leases totaled $836,000 for the year ended December 31, 2019. In the 4th quarter of 2020, the lease term and payment of one lease was modified resulting in additional ROU assets and liabilities of $542,000.
The table below summarizes the information related to our operating leases:
The table below summarizes the maturity of remaining lease liability:
As of December 31, 2020, we have no additional operating leases for office space that have not yet commenced or that are anticipated to commence during the first quarter of 2021.
Lessor - Direct Financing Leases
The Company is the lessor in direct finance lease arrangements. Leases are recorded at the principal balance outstanding, net of unearned income and charge-offs. Interest income is recognized using the interest method. Leases typically have a maturity of
to ten years, and fixed rates that are most often tied to treasury indices with an appropriate spread based on the amount of perceived risk. Credit risks are underwritten using the same credit criteria the Company would use when making an equipment term loan. Residual value risk is managed through the use of qualified, independent appraisers that establish the residual values the Company uses in structuring a lease. The impact of adopting Topic 842 for lessor accounting was not significant.Lease payments due to the Company are typically fixed and paid in equal installments over the lease term. Variable lease payments that do not depend on an index or a rate (e.g., property taxes) that are paid directly by the Company are minimal. The majority of property taxes are paid directly by the client to a third party and are not considered part of variable payments and therefore are not recorded by the Company.
As a lessor, the Company leases certain types of agriculture equipment, solar equipment, construction equipment and other equipment to its customers. The Company’s net investment in direct financing leases was $103.5 million at December 31, 2020 and $105.4 million at December 31, 2019.
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Recent Accounting Pronouncements |
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Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements |
21. Recent Accounting Pronouncements
Accounting Guidance Pending Adoption at December 31, 2020
The following paragraphs provide descriptions of newly issued but not yet effective accounting standards that could have a material effect on the Company’s financial position or results of operations.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740). The updated guidance simplifies the accounting for income taxes by removing certain exceptions and improves the consistent application of GAAP by clarifying and amending other existing guidance. ASU 2019-012 will be effective for us on January 1, 2021 and is not expected to have any material impact on our consolidated financial statements.
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848). The amendments in this ASU are elective and provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform. The amendments in this ASU provide optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this ASU may be elected as of March 12, 2020 through December 31, 2022. An entity may choose to elect the amendments in this update at an interim period subsequent to March 12, 2020 with adoption methods varying based on transaction type. We have not elected to apply these amendments. However, we will assess the applicability of the ASU to us and continue to monitor guidance for reference rate reform from FASB and its impact on our financial condition and results of operations.
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Parent Company Financial Information |
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Parent Company Financial Information |
22. Parent Company Financial Information
The following financial information is presented as of December 31 for the periods indicated.
Farmers & Merchants Bancorp
Condensed Balance Sheets
Farmers & Merchants Bancorp
Condensed Statements of Income
Farmers & Merchants Bancorp
Condensed Statements of Cash Flows
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Quarterly Unaudited Financial Data |
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Quarterly Unaudited Financial Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Unaudited Financial Data |
23. Quarterly Unaudited Financial Data
The following tables set forth certain unaudited historical quarterly financial data for each of the eight consecutive quarters in 2020 and 2019. This information is derived from unaudited consolidated financial statements that include, in management’s opinion, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation when read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this Form 10-K.
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Significant Accounting Policies (Policies) |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation |
Basis of Presentation
The accounting and reporting policies of the Company conform to U.S. GAAP and prevailing practice within the banking industry.
The accompanying consolidated financial statements and notes thereto have been prepared in accordance with accounting principles generally accepted in the United States of America for financial information.
The accompanying consolidated financial statements include the accounts of the Company and the Company’s wholly owned subsidiaries, F & M Bancorp, Inc. and the Bank, along with the Bank’s wholly owned subsidiaries, Farmers & Merchants Investment Corporation and Farmers/Merchants Corp. Significant inter-company transactions have been eliminated in consolidation.
The preparation of consolidated financial statements in conformity with U.S. GAAP and under the rules and regulations of U.S. Securities and Exchange Commission, requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of 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.
Certain amounts in the prior years' financial statements and related footnote disclosures have been reclassified to conform to the current-year presentation. These reclassifications had no effect on previously reported net income or total shareholders’ equity.
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Accounting Guidance Pending Adoption |
Accounting Guidance Pending Adoption at December 31, 2020
The following paragraphs provide descriptions of newly issued but not yet effective accounting standards that could have a material effect on the Company’s financial position or results of operations.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU will require the earlier recognition of credit losses on loans and other financial instruments based on an expected loss model, replacing the incurred loss model that is currently in use. Under the new guidance, an entity will measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The expected loss model will apply to loans and leases, unfunded lending commitments, held-to-maturity debt securities and other debt instruments measured at amortized cost. The impairment model for available-for-sale debt securities will require the recognition of credit losses through a valuation allowance when fair value is less than amortized cost, regardless of whether the impairment is considered to be other-than-temporary. During 2019, the Company completed an assessment of its CECL data and system needs, and engaged a third-party vendor to assist in developing a CECL model. The Company, in conjunction with this vendor, researched and analyzed modeling standards, loan segmentation, as well as potential external inputs to supplement our historical loss history. Model validation began in the third quarter, enabling the Company to complete parallel runs using data beginning with the second quarter of 2019.
The new guidance had been effective on January 1, 2020. However, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) and H.R. 133, resulted in federal banking regulators issuing an interim final rule allowing banks the option of delaying the implementation of CECL until January 1, 2022. In addition, the national banking regulators have issued a joint statement allowing financial institutions to mitigate the effects of CECL in their regulatory capital calculations for up to two years. The Company has elected to delay CECL adoption, but continues to run its CECL model quarterly to accumulate data for the ultimate implementation. Management is currently evaluating the impact that the standard will have on its consolidated financial statements.
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Out of Period Adjustment |
Out of Period Adjustment
During the quarter ended September 30, 2018, while preparing 2017 tax returns, the Company identified certain items related to IRS Code Section 162(m) that were not appropriately reflected in the 2014 through 2017 Provision for Income Taxes. To reflect this change, the cumulative impact of $990,000 was recognized by reducing the Company’s Provision for Income Taxes in the third quarter of 2018. After evaluating the quantitative and qualitative aspects of the adjustment, the Company concluded that its 2017 financial statements were not materially misstated and, therefore, no restatement was required.
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Cash and Cash Equivalents |
Cash and Cash Equivalents
For purposes of the Consolidated Statements of Cash Flows, the Company has defined cash and cash equivalents as those amounts included in the balance sheet captions Cash and Due from Banks, Interest Bearing Deposits with Banks and Federal Funds Sold, which have original maturity dates of 3 months or less. For these instruments, the carrying amount is a reasonable estimate of fair value.
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Investment Securities |
Investment Securities
Investment securities are classified at the time of purchase as held-to-maturity (“HTM”) if it is management’s intent and the Company has the ability to hold the securities until maturity. These securities are carried at cost, adjusted for amortization of premium over the term through the earliest call date and accretion of discount using a level yield of interest over the estimated remaining period until maturity. Losses, reflecting a decline in value judged by the Company to be other than temporary, are recognized in the period in which they occur.
Securities are classified as available-for-sale (“AFS”) if it is management’s intent, at the time of purchase, to hold the securities for an unstated period of time and may be used as part of the Company’s asset/liability management strategy. These securities are reported at fair value with aggregate unrealized gains or losses excluded from income and included as a separate component of shareholders’ equity, net of related income taxes. Fair values are based on quoted market prices or broker/dealer price quotations on a specific identification basis. Gains or losses on the sale of these securities are computed using the specific identification method.
Trading securities, if any, are acquired for short-term appreciation and are recorded in a trading portfolio and are carried at fair value, with unrealized gains and losses recorded in earnings.
Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: (1) OTTI related to credit loss, which must be recognized in the income statement; and (2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis.
Equity securities, are carried at fair value, with unrealized and realized gains recognized through earnings.
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Loans & Leases |
Loans & Leases
Loans & leases are reported at the principal amount outstanding net of unearned discounts and deferred loan & lease fees and costs. Interest income on loans & leases is accrued daily on the outstanding balances using the simple interest method. Loan & lease origination fees are deferred and recognized over the contractual life of the loan or lease as an adjustment to the yield. Loans & leases are placed on non-accrual status when the collection of principal or interest is in doubt or when they become past due for 90 days or more unless they are both well-secured and in the process of collection. For this purpose, a loan or lease is considered well-secured if it is collateralized by property having a net realizable value in excess of the amount of the loan or lease or is guaranteed by a financially capable party. When a loan or lease is placed on non-accrual status, the accrued and unpaid interest receivable is reversed and charged against current income; thereafter, interest income is recognized only as it is collected in cash. Additionally, cash would be applied to principal if all principal was not expected to be collected. Loans & leases placed on non-accrual status are returned to accrual status when the loans or leases are paid current as to principal and interest and future payments are expected to be made in accordance with the contractual terms of the loan or lease.
A loan or lease is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the original agreement. Impaired loans & leases are either: (1) non-accrual loans & leases; or (2) restructured loans & leases that are still accruing interest. Loans or leases determined to be impaired are individually evaluated for impairment. When a loan or lease is impaired, the Company measures impairment based on the present value of expected future cash flows discounted at the loan or lease's effective interest rate, except that as a practical expedient, it may measure impairment based on a loan or lease's observable market price, or the fair value of the collateral if the loan or lease is collateral dependent. A loan or lease is collateral dependent if the repayment of the loan or lease is expected to be provided solely by the underlying collateral.
A restructuring of a loan or lease constitutes a troubled debt restructuring (TDR) if the Company for economic or legal reasons related to the borrower’s (the term “borrower” is used herein to describe a customer who has entered into either a loan or lease transaction) financial difficulties grants a concession to the borrower that it would not otherwise consider. Restructured loans & leases typically present an elevated level of credit risk as the borrowers are not able to perform according to the original contractual terms. If the restructured loan or lease was current on all payments at the time of restructure and management reasonably expects the borrower will continue to perform after the restructure, management may keep the loan or lease on accrual. Loans & leases that are on nonaccrual status at the time they become TDR, remain on nonaccrual status until the borrower demonstrates a sustained period of performance, which the Company generally believes to be
consecutive months of payments, or equivalent. A loan or lease can be removed from TDR status if it was restructured at a market rate in a prior calendar year and is currently in compliance with its modified terms. However, these loans or leases continue to be classified as impaired and are individually evaluated for impairment as described above.Generally, the Company will not restructure loans or leases for borrowers unless: (1) the existing loan or lease is brought current as to principal and interest payments; and (2) the restructured loan or lease can be underwritten to reasonable underwriting standards. If these standards are not met other actions will be pursued (e.g., foreclosure) to collect outstanding loan or lease amounts. After restructure, a determination is made whether the loan or lease will be kept on accrual status based upon the underwriting and historical performance of the restructured credit.
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law, and was amended and extended by the Consolidated Appropriations Act of 2021 (“H.R. 133”) on December 21, 2020. The CARES Act and H.R. 133 provide financial institutions, under specific circumstances, the opportunity to temporarily suspend certain requirements under generally accepted accounting principles related to modifications for a limited period of time to account for the effects of COVID-19. In March 2020, a joint statement was issued by federal and state regulatory agencies, after consultation with the FASB, to clarify that short-term loan modifications are not TDRs if made on a good-faith basis in response to COVID-19 to borrowers who were current prior to any relief. Under this guidance, six months is provided as an example of short-term, and current is defined as less than 30 days past due at the time the modification program is implemented. The guidance also provides that these modified loans generally will not be classified as nonaccrual during the term of the modification. See “Note 2 – Risks and Uncertainties” for additional information on the CARES Act, H.R. 133 and the impact of COVID-19 on the Company.
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Allowance for Credit Losses |
Allowance for Credit Losses
The allowance for credit losses is an estimate of probable incurred credit losses inherent in the Company's loan & lease portfolio as of the balance sheet date. The allowance is established through a provision for credit losses, which is charged to expense. Additions to the allowance are expected to maintain the adequacy of the total allowance after credit losses and loan & lease growth. Credit exposures determined to be uncollectible are charged against the allowance. Cash received on previously charged off amounts is recorded as a recovery to the allowance. The overall allowance consists of three primary components: specific reserves related to impaired loans & leases; general reserves for inherent losses related to loans & leases that are not impaired; and an unallocated component that takes into account the imprecision in estimating and allocating allowance balances associated with macro factors.
The determination of the general reserve for loans & leases that are collectively evaluated for impairment is based on estimates made by management, to include, but not limited to, consideration of historical losses by portfolio segment, internal asset classifications, qualitative factors that include economic trends in the Company's service areas, industry experience and trends, geographic concentrations, estimated collateral values, the Company's underwriting policies, the character of the loan & lease portfolio, and probable losses inherent in the portfolio taken as a whole.
The Company maintains a separate allowance for each portfolio segment (loan & lease type). These portfolio segments include: (1) commercial real estate; (2) agricultural real estate; (3) real estate construction (including land and development loans); (4) residential 1st mortgages; (5) home equity lines and loans; (6) agricultural; (7) commercial; (8) consumer and other; and (9) equipment leases. The allowance for credit losses attributable to each portfolio segment, which includes both individually evaluated impaired loans & leases and loans & leases that are collectively evaluated for impairment, is combined to determine the Company's overall allowance, which is included on the consolidated balance sheet.
The Company assigns a risk rating to all loans & leases and periodically performs detailed reviews of all such loans & leases over a certain threshold to identify credit risks and assess overall collectability. For smaller balance loans & leases, such as consumer and residential real estate, a credit grade is established at inception, and then updated only when the loan or lease becomes contractually delinquent or when the borrower requests a modification. For larger balance loans, management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which borrowers operate and the fair values of collateral securing these loans & leases. These credit quality indicators are used to assign a risk rating to each individual loan or lease. These risk ratings are also subject to examination by independent specialists engaged by the Company. The risk ratings can be grouped into five major categories, defined as follows:
Pass and Watch – A pass loan or lease is a strong credit with no existing or known potential weaknesses deserving of management's close attention. This category also includes “Watch” loans, which is a loan with an emerging weakness in either the individual credit or industry that requires additional attention. A credit may also be classified Watch if cash flows have not yet stabilized, such as in the case of a development project. Included in this category are all loans in which the Bank entered into a CARES Act modification.
Special Mention – A special mention loan or lease has potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or lease or in the Company's credit position at some future date. Special mention loans & leases are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.
Substandard – A substandard loan or lease is not adequately protected by the current financial condition and paying capacity of the borrower or the value of the collateral pledged, if any. Loans or leases classified as substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Well-defined weaknesses include a project's lack of marketability, inadequate cash flow or collateral support, failure to complete construction on time or the project's failure to fulfill economic expectations. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.
Doubtful – Loans or leases classified doubtful have all the weaknesses inherent in those classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, based on currently known facts, conditions and values, highly questionable or improbable.
Loss – Loans or leases classified as loss are considered uncollectible. Once a loan or lease becomes delinquent and repayment becomes questionable, the Company will address collateral shortfalls with the borrower and attempt to obtain additional collateral. If this is not forthcoming and payment in full is unlikely, the Company will estimate its probable loss and immediately charge-off some or all of the balance.
The general reserve component of the allowance for credit losses also consists of reserve factors that are based on management's assessment of the following for each portfolio segment: (1) inherent credit risk; (2) historical losses; and (3) other qualitative factors. These reserve factors are inherently subjective and are driven by the repayment risk associated with each portfolio segment described below:
Commercial Real Estate – Commercial real estate mortgage loans are generally considered to possess a higher inherent risk of loss than the Company’s commercial, agricultural and consumer loan types. Adverse economic developments or an overbuilt market impact commercial real estate projects and may result in troubled loans. Trends in vacancy rates of commercial properties impact the credit quality of these loans. High vacancy rates reduce operating revenues and the ability for properties to produce sufficient cash flow to service debt obligations.
Real Estate Construction – Real estate construction loans, including land loans, are generally considered to possess a higher inherent risk of loss than the Company’s commercial, agricultural and consumer loan types. A major risk arises from the necessity to complete projects within specified cost and time lines. Trends in the construction industry significantly impact the credit quality of these loans, as demand drives construction activity. In addition, trends in real estate values significantly impact the credit quality of these loans, as property values determine the economic viability of construction projects.
Commercial – These loans are generally considered to possess a moderate inherent risk of loss because they are shorter-term; typically made to relationship customers; generally underwritten to existing cash flows of operating businesses; and may be collateralized by fixed assets, inventory and/or accounts receivable. Debt coverage is provided by business cash flows and economic trends influenced by unemployment rates and other key economic indicators are closely correlated to the credit quality of these loans.
Agricultural Real Estate and Agricultural – These loans are generally considered to possess a moderate inherent risk of loss since they are typically made to relationship customers and are secured by crop production, livestock and related real estate. These loans are vulnerable to two risk factors that are largely outside the control of Company and borrowers: commodity prices and weather conditions.
Leases – Equipment leases are generally considered to possess a moderate inherent risk of loss. As lessor, the Company is subject to both the credit risk of the borrower and the residual value risk of the equipment. Credit risks are underwritten using the same credit criteria the Company would use when making an equipment term loan. Residual value risk is managed through the use of qualified, independent appraisers that establish the residual values the Company uses in structuring a lease.
Residential 1st Mortgages and Home Equity Lines and Loans – These loans are generally considered to possess a lower inherent risk of loss. The degree of risk in residential real estate lending depends primarily on the loan amount in relation to collateral value, the interest rate and the borrower's ability to repay in an orderly fashion. Economic trends determined by unemployment rates and other key economic indicators are closely correlated to the credit quality of these loans. Weak economic trends indicate that the borrowers' capacity to repay their obligations may be deteriorating.
Consumer & Other – A consumer installment loan portfolio is usually comprised of a large number of small loans scheduled to be amortized over a specific period. Most installment loans are made for consumer purchases. Economic trends determined by unemployment rates and other key economic indicators are closely correlated to the credit quality of these loans. Weak economic trends indicate that the borrowers' capacity to repay their obligations may be deteriorating.
At least quarterly, the Board of Directors reviews the adequacy of the allowance, including consideration of the relative risks in the portfolio, current economic conditions and other factors. If the Board of Directors and management determine that changes are warranted based on those reviews, the allowance is adjusted. In addition, the Company's and Bank's regulators, including the Federal Reserve Board (“FRB”), the Department of Financial Protection and Innovation (“DFPI”) and the Federal Deposit Insurance Corporation (“FDIC”), as an integral part of their examination process, review the adequacy of the allowance. These regulatory agencies may require additions to the allowance based on their judgment about information available at the time of their examinations.
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Acquired Loans |
Acquired Loans
Loans acquired through purchase or through a business combination are recorded at their fair value at the acquisition date. Credit discounts, which reflect estimates of credit losses, expected to be incurred over the life of the loan, are included in the determination of fair value; therefore, an allowance for loan losses is not recorded at the acquisition date.
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Allowance for Credit Losses on Off-Balance-Sheet Credit Exposures |
Allowance for Credit Losses on Off-Balance-Sheet Credit Exposures
The Company also maintains a separate allowance for off-balance-sheet commitments. Management estimates anticipated losses using historical data and utilization assumptions. The allowance for off-balance-sheet commitments is included in Interest Payable and Other Liabilities on the Company’s Consolidated Balance Sheet.
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Right of Use Lease Asset & Lease Liability |
Right of Use Lease Asset & Lease Liability
The Company leases retail space and office space under operating leases. Most leases require the Company to pay real estate taxes, maintenance, insurance and other similar costs in addition to the base rent. Certain leases also contain lease incentives, such as tenant improvement allowances and rent abatement. Variable lease payments are recognized as lease expense as they are incurred. We record an operating lease right of use (ROU) asset and an operating lease liability (lease liability) for operating leases with a lease term greater than 12 months. The ROU asset and lease liability are recorded in other assets and other liabilities, respectively, in the consolidated statement of financial condition. 12 ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Accordingly, ROU assets are reduced by tenant improvement allowances from landlords plus any prepaid rent. We do not separate lease and non-lease components of contracts. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. Many of our leases contain various provisions for increases in rental rates, based either on changes in the published Consumer Price Index or a predetermined escalation schedule, which are factored into our determination of lease payments when appropriate. A majority of the leases provide the Company with the option to extend the lease term one or more times following expiration of the initial term. The ROU asset and lease liability terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
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Revenue from Contracts with Customers |
Revenue from Contracts with Customers
The Company records revenue from contracts with customers in accordance with Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers” (“Topic 606”). Under Topic 606, the Company must identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the Company satisfies a performance obligation. Significant revenue has not been recognized in the current reporting period that results from performance obligations satisfied in previous periods.
The Company’s primary sources of revenue are derived from interest and dividends earned on loans, investment securities, and other financial instruments that are not within the scope of Topic 606. The Company has evaluated the nature of its contracts with customers and determined that further disaggregation of revenue from contracts with customers into more granular categories beyond what is presented in the Consolidated Statements of Income was not necessary. The Company generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices are typically fixed; charged either on a periodic basis or based on activity. Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is limited judgment involved in applying Topic 606 that significantly affects the determination of the amount and timing of revenue from contracts with customers.
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Premises and Equipment |
Premises and Equipment
Premises, equipment, and leasehold improvements are stated at cost, less accumulated depreciation and amortization. Depreciation is computed principally by the straight-line method over the estimated useful lives of the assets. Estimated useful lives of buildings range from 30 to 40 years, and for furniture and equipment from 3 to 7 years. Leasehold improvements are amortized over the lesser of the terms of the respective leases, or their useful lives, which are generally 5 to 10 years. Remodeling and capital improvements are capitalized while maintenance and repairs are charged directly to occupancy expense.
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Other Real Estate |
Other Real Estate
Other real estate, which is included in other assets, is expected to be sold and is comprised of properties no longer utilized for business operations and property acquired through foreclosure in satisfaction of indebtedness. These properties are recorded at fair value less estimated selling costs upon acquisition. Revised estimates to the fair value less cost to sell are reported as adjustments to the carrying amount of the asset, provided that such adjusted value is not in excess of the carrying amount at acquisition. Initial losses on properties acquired through full or partial satisfaction of debt are treated as credit losses and charged to the allowance for credit losses at the time of acquisition. Subsequent declines in value from the recorded amounts, routine holding costs, and gains or losses upon disposition, if any, are included in non-interest expense as incurred.
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law, and was amended and extended by H.R. 133 on December 21, 2020. The CARES Act and H.R. 133 restrict the ability of financial institutions to exercise their foreclosure rights on residential and multi-family properties backed by federally guaranteed mortgage loans. The State of California has gone further and temporarily suspended all residential and commercial foreclosures through June 30, 2021. The Company is working with its borrowers when they make requests to defer payments on their mortgage loans. See “Note 2 – Risks and Uncertainties” for additional information on the CARES Act and the impact of COVID-19 on the Company.
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Income Taxes |
Income Taxes
The Company uses the liability method of accounting for income taxes. This method results in the recognition of deferred tax assets and liabilities that are reflected at currently enacted income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. The deferred provision for income taxes is the result of the net change in the deferred tax asset and deferred tax liability balances during the year. This amount combined with the current taxes payable or refundable results in the income tax expense for the current year.
The Company follows the standards set forth in the “Income Taxes” topic of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”), which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. This standard prescribes a recognition threshold and measurement standard for the financial statement recognition and measurement of an income tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.
The Company accounts for leases with Investment Tax Credits (ITC) under the deferred method as established in ASC 740-10. ITC are viewed and accounted for as a reduction of the cost of the related assets and presented as deferred income on the Company’s financial statement.
The Company accounts for its interest in LIHTC using the cost method as established in ASC 323-740. As an investor, the Company obtains income tax credits and deductions from the operating losses of these tax credit entities. The income tax credits and deductions are allocated to the investors based on their ownership percentages and are recorded as a reduction of income tax expense (or an increase to income tax benefit) and a reduction of federal income taxes payable.
When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination.
At December 31, 2020 and 2019, the Company has no material uncertain tax positions and recognized no interest or penalties. The Company's policy is to recognize interest and penalties related to income taxes in the provision for income taxes in the Consolidated Statement of Income.
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Basic and Diluted Earnings Per Common Share |
Basic and Diluted Earnings Per Common Share
The Company’s common stock is not traded on any exchange. However, trades are reported on the OTCQX under the symbol "FMCB". The shares are primarily held by local residents and are not actively traded. Basic earnings per common share amounts are computed by dividing net income by the weighted average number of common shares outstanding for the period. There are no common stock equivalent shares. Therefore, there is no difference between presentation of diluted and basic earnings per common share. See Note 15 – “Dividends and Basic and Diluted Earnings Per Common Share” for additional information.
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Segment Reporting |
Segment Reporting
The “Segment Reporting” topic of the FASB ASC requires that public companies report certain information about operating segments. It also requires that public companies report certain information about their products and services, the geographic areas in which they operate, and their major customers. The Company is a holding company for a community bank, which offers a wide array of products and services to its customers. Pursuant to its banking strategy, emphasis is placed on building relationships with its customers, as opposed to building specific lines of business. As a result, the Company is not organized around discernible lines of business and prefers to work as an integrated unit to customize solutions for its customers, with business line emphasis and product offerings changing over time as needs and demands change.
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Comprehensive Income |
Comprehensive Income
The “Comprehensive Income” topic of the FASB ASC establishes standards for the reporting and display of comprehensive income and its components in the financial statements. Other comprehensive income refers to revenues, expenses, gains, and losses that U.S. GAAP recognize as changes in value to an enterprise but are excluded from net income. For the Company, comprehensive income includes net income and changes in fair value of its available-for-sale investment securities.
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Loss Contingencies |
Loss Contingencies
Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the consolidated financial statements.
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Business Combinations and Related Matters |
Business Combinations And Related Matters
Business combinations are accounted for under the acquisition method of accounting in accordance with ASC 805, Business Combinations. Under the acquisition method, the acquiring entity in a business combination recognizes 100 percent of the acquired assets and assumed liabilities, regardless of the percentage owned, at their estimated fair values as of the date of acquisition. Any excess of the fair value over the purchase price of net assets and other identifiable intangible assets acquired is recorded as bargain purchase gain. Assets acquired and liabilities assumed from contingencies must also be recognized at fair value, if the fair value can be determined during the measurement period. Results of operations of an acquired business are included in the statement of operations from the date of acquisition. Acquisition-related costs, including conversion charges, are expensed as incurred.
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Goodwill and Other Intangible Assets |
Goodwill and Other Intangible Assets: Goodwill is determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill that arises from a business combination is periodically evaluated for impairment at the reporting unit level, at least annually. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Core deposit intangible ("CDI") represents the estimated future benefit of deposits related to an acquisition and is booked separately from the related deposits and evaluated periodically for impairment. The CDI asset is amortized on a straight-line method over its estimated useful life of ten years. At December 31, 2020, the future estimated amortization expense for the CDI arising from our past acquisitions is as follows:
We make a qualitative assessment of whether it is more likely than not that the fair value of a reporting unit where goodwill is assigned is less than its carrying amount. If we conclude that it is more likely than not that the fair value is more than its carrying amount, no impairment is recorded. Goodwill is tested for impairment on an interim basis if circumstances change or an event occurs between annual tests that would more likely than not reduce the fair value of the reporting unit below its carrying amount. The qualitative assessment includes adverse events or circumstances identified that could negatively affect the reporting units’ fair value as well as positive and mitigating events. Such indicators may include, among others, a significant change in legal factors or in the general business climate, significant change in our stock price and market capitalization, unanticipated competition, and an action or assessment by a regulator. If the fair value of a reporting unit is less than its carrying amount, an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value is recognized. The loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.
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Recent Accounting Pronouncements (Policies) |
12 Months Ended |
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Dec. 31, 2020 | |
Recent Accounting Pronouncements [Abstract] | |
Accounting Guidance Pending Adoption |
Accounting Guidance Pending Adoption at December 31, 2020
The following paragraphs provide descriptions of newly issued but not yet effective accounting standards that could have a material effect on the Company’s financial position or results of operations.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740). The updated guidance simplifies the accounting for income taxes by removing certain exceptions and improves the consistent application of GAAP by clarifying and amending other existing guidance. ASU 2019-012 will be effective for us on January 1, 2021 and is not expected to have any material impact on our consolidated financial statements.
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848). The amendments in this ASU are elective and provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform. The amendments in this ASU provide optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this ASU may be elected as of March 12, 2020 through December 31, 2022. An entity may choose to elect the amendments in this update at an interim period subsequent to March 12, 2020 with adoption methods varying based on transaction type. We have not elected to apply these amendments. However, we will assess the applicability of the ASU to us and continue to monitor guidance for reference rate reform from FASB and its impact on our financial condition and results of operations.
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Significant Accounting Policies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future Estimated Amortization Expense for CDI |
Goodwill and Other Intangible Assets: Goodwill is determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill that arises from a business combination is periodically evaluated for impairment at the reporting unit level, at least annually. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Core deposit intangible ("CDI") represents the estimated future benefit of deposits related to an acquisition and is booked separately from the related deposits and evaluated periodically for impairment. The CDI asset is amortized on a straight-line method over its estimated useful life of ten years. At December 31, 2020, the future estimated amortization expense for the CDI arising from our past acquisitions is as follows:
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Investment Securities (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Investment Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost, Fair Values, and Unrealized Gains and Losses of Securities Available-For-Sale |
The amortized cost, fair values, and unrealized gains and losses of the securities available-for-sale are as follows:
(in thousands)
(1) All Mortgage Backed Securities were issued by an agency or government sponsored entity of the U.S. government.
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Book Values, Estimated Fair Values and Unrealized Gains and Losses of Investments Classified as Held-To-Maturity |
The book values, estimated fair values and unrealized gains and losses of investments classified as held-to-maturity are as follows: (in thousands)
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Amortized Cost and Estimated Fair Values of Investment Securities by Contractual Maturity |
The amortized cost and estimated fair values of investment securities at December 31, 2020 by contractual maturity are shown in the following tables. (in thousands)
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Investments with Gross Unrealized Losses and Market Value Aggregated by Investment Category and Length of Time That Individual Securities Have Been In a Continuous Unrealized Loss Position |
The following tables show those investments with gross unrealized losses and their market value aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at the dates indicated. (in thousands)
There were no HTM investments with gross unrealized losses at December 31, 2020.
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Proceeds from Sales and Calls of Securities |
Proceeds from sales and calls of these securities were as follows:
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Loans & Leases (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Loans & Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Leases |
Loans & leases as of December 31 consisted of the following:
(1) Includes CARES Act Small Business Administration Paycheck Protection Program loans of $224,309 as of December 31, 2020.
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Allowance for Credit Losses (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Allowance for Credit Losses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allocation of Allowance for Credit Losses by Portfolio Segment and by Impairment Methodology |
The following tables show the allocation of the allowance for credit losses at December 31, 2020 and December 31, 2019 by portfolio segment and by impairment methodology (in thousands):
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Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings |
The following tables show the loan & lease portfolio, including unearned income allocated by management’s internal risk ratings at December 31, 2020 and December 31, 2019 (in thousands):
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Aging Analysis of Loan & Lease Portfolio by Time Past Due |
The following tables show an aging analysis of the loan & lease portfolio, including unearned income, by the time past due at December 31, 2020 and December 31, 2019 (in thousands):
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Impaired Loans & Leases |
The following tables show information related to impaired loans & leases at and for the year ended December 31, 2020 and December 31, 2019 (in thousands):
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Loans & Leases by Class Modified as Troubled Debt Restructured Loans |
The following table presents loans by class modified as troubled debt restructured loans for the year ended December 31, 2020 (in thousands):
The following table presents loans by class modified as troubled debt restructured loans for the year ended December 31, 2019 (in thousands):
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Premises and Equipment (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premises and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premises and Equipment |
Premises and equipment as of December 31 consisted of the following:
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Time Deposits (Tables) |
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||
Time Deposits [Abstract] | ||||||||||||||||||||||||||||||||||||
Time Deposits of $250,000 or More |
Time Deposits of $250,000 or more as of December 31 were as follows:
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Maturities of Time Deposits |
At December 31, 2020, the scheduled maturities of time deposits were as follows:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current and Deferred Income Tax Expense (Benefit) |
Current and deferred income tax expense (benefit) provided for the years ended December 31 consisted of the following:
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Total Provision for Income Taxes Reconciliation with Federal Statutory Rate |
The total provision for income taxes differs from the federal statutory rate as follows:
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Components of Net Deferred Tax Assets |
The components of net deferred tax assets as of December 31 are as follows: The net deferred tax assets are reported in Interest Receivable and Other Assets on the Company’s Consolidated Balance Sheet.
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Shareholders' Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compliance with Regulatory Capital Requirements under Banking Regulations |
In addition, the most recent notification from the FDIC categorized the Bank as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the following tables. There are no conditions or events since that notification that management believes have changed the Bank’s category.
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Dividends and Basic and Diluted Earnings Per Common Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and Basic and Diluted Earnings Per Common Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Calculation of Basic and Diluted Earnings per Common Share |
Basic earnings per common share amounts are computed by dividing net income by the weighted average number of common shares outstanding for the period. The Company has no securities or other contracts, such as stock options, that could require the issuance of additional common stock. Accordingly, diluted earnings per share are equal to basic earnings per share. The following table calculates the basic and diluted earnings per common share for the periods indicated.
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Fair Value Measurements (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis |
The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value for the periods indicated.
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Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis |
The following tables present information about the Company’s impaired loans & leases and other real estate, classes of assets or liabilities that the Company carries at fair value on a non-recurring basis, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value for the periods indicated. Not all impaired loans & leases are carried at fair value. Impaired loans & leases are only included in the following tables when their fair value is based upon an appraisal of the collateral, and if that appraisal results in a partial charge-off or the establishment of a specific reserve.
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Quantitative Information about Level 3 Fair Value Measurements for Financial Assets Measured at Fair Value on a Nonrecurring Basis |
The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a nonrecurring basis at December 31, 2020 and 2019:
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Fair Value of Financial Instruments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Book Value and Estimated Fair Value of Financial Instruments |
The following tables summarize the carrying value and estimated fair value of financial instruments for the periods indicated:
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Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||
Commitments and Contingencies [Abstract] | |||||||||||||||||||||||||||||||||||||
Off Balance Sheet Arrangements |
In the normal course of business, the Company enters into financial instruments with off balance sheet risk in order to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These instruments include commitments to extend credit, letters of credit, and other types of financial guarantees. The Company had the following off balance sheet commitments as of the dates indicated.
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Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Information Related to Operating Leases |
The table below summarizes the information related to our operating leases:
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Maturity of Remaining Lease Liability |
The table below summarizes the maturity of remaining lease liability:
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Parent Company Financial Information (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Parent Company Financial Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Balance Sheets |
The following financial information is presented as of December 31 for the periods indicated.
Farmers & Merchants Bancorp
Condensed Balance Sheets
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Condensed Statements of Income |
Farmers & Merchants Bancorp
Condensed Statements of Income
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Condensed Statements of Cash Flows |
Farmers & Merchants Bancorp
Condensed Statements of Cash Flows
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Quarterly Unaudited Financial Data (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Quarterly Unaudited Financial Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information |
The following tables set forth certain unaudited historical quarterly financial data for each of the eight consecutive quarters in 2020 and 2019. This information is derived from unaudited consolidated financial statements that include, in management’s opinion, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation when read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this Form 10-K.
|
Significant Accounting Policies (Details) |
12 Months Ended | ||||
---|---|---|---|---|---|
Oct. 10, 2018
USD ($)
Branch
|
Oct. 09, 2018
USD ($)
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Acquisitions [Abstract] | |||||
Gain on remeasurement of previously held equity investment | $ 0 | $ 0 | $ 997,000 | ||
Assets | $ 4,550,453,000 | $ 3,721,830,000 | |||
Bank of Rio Vista [Member] | |||||
Acquisitions [Abstract] | |||||
Percentage of equity interest in acquiree prior to acquisition of remaining interest | 39.65% | ||||
Gain on remeasurement of previously held equity investment | $ 997,000 | ||||
Assets | $ 217,500,000 | ||||
Number of branches | Branch | 3 |
Significant Accounting Policies, Out of Period Adjustment (Details) |
3 Months Ended |
---|---|
Sep. 30, 2018
USD ($)
| |
Out of Period Adjustment [Member] | |
Out of Period Adjustment [Abstract] | |
Cumulative impact of out of period adjustment on provision for income taxes | $ (990,000) |
Significant Accounting Policies, Investment Securities (Details) |
12 Months Ended |
---|---|
Dec. 31, 2020
Component
| |
Investment Securities [Abstract] | |
Number of components into which amount of impairment is split | 2 |
Significant Accounting Policies, Loans & Leases and Allowance for Credit Losses (Details) |
12 Months Ended |
---|---|
Dec. 31, 2020
Category
Component
Factor
| |
Loans & Leases [Abstract] | |
Consecutive months of payments to demonstrate sustained period of performance | 6 months |
Allowance for Credit Losses [Abstract] | |
Number of primary components of overall allowance for credit losses | Component | 3 |
Number of categories into which risk ratings are grouped | Category | 5 |
Minimum [Member] | |
Loans & Leases [Abstract] | |
Period after which loans are placed on non accrual status | 90 days |
Agricultural Real Estate [Member] | |
Allowance for Credit Losses [Abstract] | |
Number of risk factors on loans | 2 |
Agricultural [Member] | |
Allowance for Credit Losses [Abstract] | |
Number of risk factors on loans | 2 |
Significant Accounting Policies, Premises and Equipment (Details) |
12 Months Ended |
---|---|
Dec. 31, 2020 | |
Buildings [Member] | Minimum [Member] | |
Premises and Equipment [Abstract] | |
Estimated useful lives | 30 years |
Buildings [Member] | Maximum [Member] | |
Premises and Equipment [Abstract] | |
Estimated useful lives | 40 years |
Furniture and Equipment [Member] | Minimum [Member] | |
Premises and Equipment [Abstract] | |
Estimated useful lives | 3 years |
Furniture and Equipment [Member] | Maximum [Member] | |
Premises and Equipment [Abstract] | |
Estimated useful lives | 7 years |
Leasehold Improvements [Member] | Minimum [Member] | |
Premises and Equipment [Abstract] | |
Estimated useful lives | 5 years |
Leasehold Improvements [Member] | Maximum [Member] | |
Premises and Equipment [Abstract] | |
Estimated useful lives | 10 years |
Significant Accounting Policies, Income Taxes (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2020
USD ($)
| |
Income Tax Penalties and Interest Expense [Abstract] | |
Interest | $ 0 |
Penalties | $ 0 |
Significant Accounting Policies, Basic and Diluted Earnings Per Common Share (Details) |
12 Months Ended |
---|---|
Dec. 31, 2020
shares
| |
Basic and Diluted Earnings Per Common Share [Abstract] | |
Common stock equivalent shares (in shares) | 0 |
Significant Accounting Policies, Goodwill and Other Intangible Assets (Details) - Core Deposit Intangible [Member] $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2020
USD ($)
| |
Goodwill and Other Intangible Assets [Abstract] | |
Estimated useful life | 10 years |
Future estimated amortization expense for CDI [Abstract] | |
2021 | $ 611 |
2022 | 593 |
2023 | 573 |
2024 | 549 |
2025 | 522 |
Thereafter | 1,165 |
Total | $ 4,013 |
Investment Securities, Securities Held-to-Maturity (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Book values, estimated fair values and unrealized gains and losses of investments classified as held-to-maturity [Abstract] | ||
Amortized cost | $ 68,933 | $ 60,229 |
Gross unrealized gains | 1,116 | 880 |
Gross unrealized losses | 0 | 12 |
Fair value | 70,049 | 61,097 |
Obligations of States and Political Subdivisions [Member] | ||
Book values, estimated fair values and unrealized gains and losses of investments classified as held-to-maturity [Abstract] | ||
Amortized cost | 68,933 | 60,229 |
Gross unrealized gains | 1,116 | 880 |
Gross unrealized losses | 0 | 12 |
Fair value | $ 70,049 | $ 61,097 |
Investment Securities, Contractual Maturity (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Amortized Cost [Abstract] | ||
Within one year | $ 5,479 | |
After one year through five years | 25,427 | |
After five years through ten years | 30,281 | |
After ten years | 7,426 | |
Amortized cost, excluding securities without single maturity date | 68,613 | |
Investment securities not due at a single maturity date, mortgage-backed securities | 720,562 | |
Amortized cost | 789,175 | $ 502,693 |
Fair Value [Abstract] | ||
Within one year | 5,512 | |
After one year through five years | 26,096 | |
After five years through ten years | 30,912 | |
After ten years | 7,339 | |
Fair value, excluding investment securities not due at a single maturity date | 69,859 | |
Investment securities not due at a single maturity date, mortgage-backed securities | 737,873 | |
Fair value | 807,732 | 507,386 |
Amortized Cost [Abstract] | ||
Within one year | 8,309 | |
After one year through five years | 5,137 | |
After five years through ten years | 23,493 | |
After ten years | 31,994 | |
Book value, excluding securities without single maturity date | 68,933 | |
Investment securities not due at a single maturity date, mortgage-backed securities | 0 | |
Amortized cost | 68,933 | 60,229 |
Fair Value [Abstract] | ||
Within one year | 8,309 | |
After one year through five years | 5,179 | |
After five years through ten years | 24,451 | |
After ten years | 32,110 | |
Fair/Book value, excluding securities without single maturity date | 70,049 | |
Investment securities not due at a single maturity date, mortgage-backed securities | 0 | |
Fair value | $ 70,049 | $ 61,097 |
Investment Securities, Securities in Continuous Unrealized Loss Position (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020
USD ($)
Security
|
Dec. 31, 2019
USD ($)
|
|
Investment Securities, Qualitative Disclosure [Abstract] | ||
Number of investment securities held | Security | 649 | |
Less than 12 months, number of positions | Security | 13 | |
12 months or more, number of positions | Security | 83 | |
Available-for-sale Securities in Continuous Unrealized Loss Position [Abstract] | ||
Less than 12 months fair value | $ 25,924,000 | $ 133,698,000 |
Less than 12 months unrealized loss | 66,000 | 94,000 |
12 months or more fair value | 6,303,000 | 5,911,000 |
12 months or more unrealized loss | 93,000 | 118,000 |
Total fair value | 32,227,000 | 139,609,000 |
Total unrealized loss | $ 159,000 | 212,000 |
Held-to-maturity Securities, Continuous Unrealized Loss Position [Abstract] | ||
Less than 12 months fair value | 355,000 | |
12 months or more fair value | 0 | |
Total fair value | 355,000 | |
Less than 12 months unrealized loss | 12,000 | |
12 months or more unrealized loss | 0 | |
Total unrealized loss | 12,000 | |
Number of HTM investments with gross unrealized losses | Security | 0 | |
Obligations of States and Political Subdivisions [Member] | ||
Held-to-maturity Securities, Continuous Unrealized Loss Position [Abstract] | ||
Less than 12 months fair value | 355,000 | |
12 months or more fair value | 0 | |
Total fair value | 355,000 | |
Less than 12 months unrealized loss | 12,000 | |
12 months or more unrealized loss | 0 | |
Total unrealized loss | $ 0 | 12,000 |
Less than 12 months, number of positions | Security | 0 | |
12 months or more, number of positions | Security | 0 | |
Percentage of portfolio rated at either issue or issuer level | 100.00% | |
Government Agency & Government-Sponsored Entities [Member] | ||
Available-for-sale Securities in Continuous Unrealized Loss Position [Abstract] | ||
Less than 12 months, number of positions | Security | 0 | |
12 months or more, number of positions | Security | 0 | |
US Treasury Notes [Member] | ||
Available-for-sale Securities in Continuous Unrealized Loss Position [Abstract] | ||
Less than 12 months, number of positions | Security | 0 | |
12 months or more, number of positions | Security | 0 | |
US Government Agency SBA [Member] | ||
Available-for-sale Securities in Continuous Unrealized Loss Position [Abstract] | ||
Less than 12 months fair value | $ 1,741,000 | 2,693,000 |
Less than 12 months unrealized loss | 3,000 | 6,000 |
12 months or more fair value | 6,126,000 | 5,198,000 |
12 months or more unrealized loss | 90,000 | 107,000 |
Total fair value | 7,867,000 | 7,891,000 |
Total unrealized loss | $ 93,000 | 113,000 |
Less than 12 months, number of positions | Security | 8 | |
12 months or more, number of positions | Security | 65 | |
Mortgage Backed Securities [Member] | ||
Available-for-sale Securities in Continuous Unrealized Loss Position [Abstract] | ||
Less than 12 months fair value | $ 20,142,000 | 131,005,000 |
Less than 12 months unrealized loss | 45,000 | 88,000 |
12 months or more fair value | 177,000 | 713,000 |
12 months or more unrealized loss | 3,000 | 11,000 |
Total fair value | 20,319,000 | 131,718,000 |
Total unrealized loss | $ 48,000 | $ 99,000 |
Less than 12 months, number of positions | Security | 3 | |
12 months or more, number of positions | Security | 18 | |
Corporate Securities [Member] | ||
Available-for-sale Securities in Continuous Unrealized Loss Position [Abstract] | ||
Less than 12 months fair value | $ 4,041,000 | |
Less than 12 months unrealized loss | 18,000 | |
12 months or more fair value | 0 | |
12 months or more unrealized loss | 0 | |
Total fair value | 4,041,000 | |
Total unrealized loss | $ 18,000 | |
Less than 12 months, number of positions | Security | 2 | |
12 months or more, number of positions | Security | 0 |
Investment Securities, Proceeds From Sales (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Proceeds from sales and calls of securities [Abstract] | |||
Gross proceeds | $ 5,080 | $ 5,300 | $ 99,323 |
Gross gains | 40 | 1 | 78 |
Gross losses | $ 0 | $ 0 | $ 1,338 |
Investment Securities, Pledged Securities (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Investment Securities [Abstract] | ||
Carrying amount of pledged securities | $ 439.7 | $ 352.5 |
Federal Home Loan Bank Stock and Other Equity Securities, at Cost (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Federal Home Loan Bank Stock and Other Equity Securities, at Cost [Abstract] | ||
FHLB stock and other equity securities | $ 12.7 | $ 12.7 |
Loans & Leases (Details) $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2020
USD ($)
Loan
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|||
Loans and Leases Receivable, Net Amount [Abstract] | |||||
Total Gross Loans & Leases | $ 3,111,533 | $ 2,680,011 | |||
Less: Unearned Income | 11,941 | 6,984 | |||
Total Loans & Leases | 3,099,592 | 2,673,027 | |||
Less: Allowance for Credit Losses | 58,862 | 55,012 | $ 55,266 | ||
Loans & Leases, Net | 3,040,730 | 2,618,015 | |||
Federal Home Loan Bank [Member] | |||||
Loans and Leases Receivable, Net Amount [Abstract] | |||||
Collateral on borrowing lines | 808,900 | ||||
Maximum borrowing capacity | 630,500 | ||||
Federal Reserve Bank [Member] | |||||
Loans and Leases Receivable, Net Amount [Abstract] | |||||
Collateral on borrowing lines | 706,200 | ||||
Maximum borrowing capacity | 438,100 | ||||
Paycheck Protection Program [Member] | |||||
Loans and Leases Receivable, Net Amount [Abstract] | |||||
Total Gross Loans & Leases | 224,309 | ||||
Loans funded for the small business customers | $ 347,400 | ||||
Number of small business customers | Loan | 1,540 | ||||
Commercial Real Estate [Member] | |||||
Loans and Leases Receivable, Net Amount [Abstract] | |||||
Total Gross Loans & Leases | $ 971,326 | 846,486 | |||
Total Loans & Leases | 958,980 | 838,570 | |||
Less: Allowance for Credit Losses | 27,679 | 11,053 | 11,609 | ||
Agricultural Real Estate [Member] | |||||
Loans and Leases Receivable, Net Amount [Abstract] | |||||
Total Gross Loans & Leases | 643,014 | 625,767 | |||
Total Loans & Leases | 643,014 | 625,767 | |||
Less: Allowance for Credit Losses | 8,633 | 15,128 | 14,092 | ||
Real Estate Construction [Member] | |||||
Loans and Leases Receivable, Net Amount [Abstract] | |||||
Total Gross Loans & Leases | 185,741 | 115,644 | |||
Total Loans & Leases | 185,741 | 115,644 | |||
Less: Allowance for Credit Losses | 1,643 | 1,949 | 1,249 | ||
Residential 1st Mortgages [Member] | |||||
Loans and Leases Receivable, Net Amount [Abstract] | |||||
Total Gross Loans & Leases | 299,379 | 255,253 | |||
Total Loans & Leases | 299,379 | 255,253 | |||
Less: Allowance for Credit Losses | 960 | 855 | 880 | ||
Home Equity Lines and Loans [Member] | |||||
Loans and Leases Receivable, Net Amount [Abstract] | |||||
Total Gross Loans & Leases | 34,239 | 39,270 | |||
Total Loans & Leases | 34,239 | 39,270 | |||
Less: Allowance for Credit Losses | 2,024 | 2,675 | 2,761 | ||
Agricultural [Member] | |||||
Loans and Leases Receivable, Net Amount [Abstract] | |||||
Total Gross Loans & Leases | 264,372 | 292,904 | |||
Total Loans & Leases | 264,372 | 292,904 | |||
Less: Allowance for Credit Losses | 4,814 | 8,076 | 8,242 | ||
Commercial [Member] | |||||
Loans and Leases Receivable, Net Amount [Abstract] | |||||
Total Gross Loans & Leases | 374,816 | 384,795 | |||
Total Loans & Leases | 374,816 | 384,795 | |||
Less: Allowance for Credit Losses | 9,961 | 11,466 | 11,656 | ||
Consumer & Other [Member] | |||||
Loans and Leases Receivable, Net Amount [Abstract] | |||||
Total Gross Loans & Leases | [1] | 235,529 | 15,422 | ||
Total Loans & Leases | 235,529 | 15,422 | |||
Less: Allowance for Credit Losses | 333 | 456 | 494 | ||
Leases [Member] | |||||
Loans and Leases Receivable, Net Amount [Abstract] | |||||
Total Gross Loans & Leases | 103,117 | 104,470 | |||
Total Loans & Leases | 103,522 | 105,402 | |||
Less: Allowance for Credit Losses | $ 1,731 | $ 3,162 | $ 4,022 | ||
|
Allowance for Credit Losses, Allocation of The Allowance For Loan Losses by Portfolio Segment and By Impairment Methodology (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Allowance for Credit Losses [Roll Forward] | |||||||||||
Beginning Balance | $ 55,012,000 | $ 55,266,000 | $ 55,012,000 | $ 55,266,000 | |||||||
Charge-Offs | (1,174,000) | (675,000) | |||||||||
Recoveries | 524,000 | 221,000 | |||||||||
Provision | $ 2,500,000 | $ 1,700,000 | $ 300,000 | 0 | $ 0 | $ 0 | $ 200,000 | 0 | 4,500,000 | 200,000 | $ 5,533,000 |
Ending Balance | 58,862,000 | 55,012,000 | 58,862,000 | 55,012,000 | 55,266,000 | ||||||
Ending Balance Individually Evaluated for Impairment | 289,000 | 661,000 | 289,000 | 661,000 | |||||||
Ending Balance Collectively Evaluated for Impairment | 58,573,000 | 54,351,000 | 58,573,000 | 54,351,000 | |||||||
Loans & Leases [Abstract] | |||||||||||
Ending Balance | 3,099,592,000 | 2,673,027,000 | 3,099,592,000 | 2,673,027,000 | |||||||
Ending Balance Individually Evaluated for Impairment | 9,238,000 | 14,691,000 | 9,238,000 | 14,691,000 | |||||||
Ending Balance Collectively Evaluated for Impairment | 3,090,354,000 | 2,658,336,000 | 3,090,354,000 | 2,658,336,000 | |||||||
Commercial Real Estate [Member] | |||||||||||
Allowance for Credit Losses [Roll Forward] | |||||||||||
Beginning Balance | 11,053,000 | 11,609,000 | 11,053,000 | 11,609,000 | |||||||
Charge-Offs | 0 | 0 | |||||||||
Recoveries | 0 | 0 | |||||||||
Provision | 16,626,000 | (556,000) | |||||||||
Ending Balance | 27,679,000 | 11,053,000 | 27,679,000 | 11,053,000 | 11,609,000 | ||||||
Ending Balance Individually Evaluated for Impairment | 0 | 234,000 | 0 | 234,000 | |||||||
Ending Balance Collectively Evaluated for Impairment | 27,679,000 | 10,819,000 | 27,679,000 | 10,819,000 | |||||||
Loans & Leases [Abstract] | |||||||||||
Ending Balance | 958,980,000 | 838,570,000 | 958,980,000 | 838,570,000 | |||||||
Ending Balance Individually Evaluated for Impairment | 104,000 | 4,524,000 | 104,000 | 4,524,000 | |||||||
Ending Balance Collectively Evaluated for Impairment | 958,876,000 | 834,046,000 | 958,876,000 | 834,046,000 | |||||||
Agricultural Real Estate [Member] | |||||||||||
Allowance for Credit Losses [Roll Forward] | |||||||||||
Beginning Balance | 15,128,000 | 14,092,000 | 15,128,000 | 14,092,000 | |||||||
Charge-Offs | 0 | 0 | |||||||||
Recoveries | 81,000 | 38,000 | |||||||||
Provision | (6,576,000) | 998,000 | |||||||||
Ending Balance | 8,633,000 | 15,128,000 | 8,633,000 | 15,128,000 | 14,092,000 | ||||||
Ending Balance Individually Evaluated for Impairment | 0 | 0 | 0 | 0 | |||||||
Ending Balance Collectively Evaluated for Impairment | 8,633,000 | 15,128,000 | 8,633,000 | 15,128,000 | |||||||
Loans & Leases [Abstract] | |||||||||||
Ending Balance | 643,014,000 | 625,767,000 | 643,014,000 | 625,767,000 | |||||||
Ending Balance Individually Evaluated for Impairment | 5,629,000 | 5,654,000 | 5,629,000 | 5,654,000 | |||||||
Ending Balance Collectively Evaluated for Impairment | 637,385,000 | 620,113,000 | 637,385,000 | 620,113,000 | |||||||
Real Estate Construction [Member] | |||||||||||
Allowance for Credit Losses [Roll Forward] | |||||||||||
Beginning Balance | 1,949,000 | 1,249,000 | 1,949,000 | 1,249,000 | |||||||
Charge-Offs | 0 | 0 | |||||||||
Recoveries | 0 | 0 | |||||||||
Provision | (306,000) | 700,000 | |||||||||
Ending Balance | 1,643,000 | 1,949,000 | 1,643,000 | 1,949,000 | 1,249,000 | ||||||
Ending Balance Individually Evaluated for Impairment | 0 | 0 | 0 | 0 | |||||||
Ending Balance Collectively Evaluated for Impairment | 1,643,000 | 1,949,000 | 1,643,000 | 1,949,000 | |||||||
Loans & Leases [Abstract] | |||||||||||
Ending Balance | 185,741,000 | 115,644,000 | 185,741,000 | 115,644,000 | |||||||
Ending Balance Individually Evaluated for Impairment | 0 | 0 | 0 | 0 | |||||||
Ending Balance Collectively Evaluated for Impairment | 185,741,000 | 115,644,000 | 185,741,000 | 115,644,000 | |||||||
Residential 1st Mortgages [Member] | |||||||||||
Allowance for Credit Losses [Roll Forward] | |||||||||||
Beginning Balance | 855,000 | 880,000 | 855,000 | 880,000 | |||||||
Charge-Offs | 0 | 0 | |||||||||
Recoveries | 52,000 | 13,000 | |||||||||
Provision | 53,000 | (38,000) | |||||||||
Ending Balance | 960,000 | 855,000 | 960,000 | 855,000 | 880,000 | ||||||
Ending Balance Individually Evaluated for Impairment | 117,000 | 118,000 | 117,000 | 118,000 | |||||||
Ending Balance Collectively Evaluated for Impairment | 843,000 | 737,000 | 843,000 | 737,000 | |||||||
Loans & Leases [Abstract] | |||||||||||
Ending Balance | 299,379,000 | 255,253,000 | 299,379,000 | 255,253,000 | |||||||
Ending Balance Individually Evaluated for Impairment | 2,365,000 | 2,368,000 | 2,365,000 | 2,368,000 | |||||||
Ending Balance Collectively Evaluated for Impairment | 297,014,000 | 252,885,000 | 297,014,000 | 252,885,000 | |||||||
Home Equity Lines and Loans [Member] | |||||||||||
Allowance for Credit Losses [Roll Forward] | |||||||||||
Beginning Balance | 2,675,000 | 2,761,000 | 2,675,000 | 2,761,000 | |||||||
Charge-Offs | (7,000) | 0 | |||||||||
Recoveries | 78,000 | 28,000 | |||||||||
Provision | (722,000) | (114,000) | |||||||||
Ending Balance | 2,024,000 | 2,675,000 | 2,024,000 | 2,675,000 | 2,761,000 | ||||||
Ending Balance Individually Evaluated for Impairment | 8,000 | 12,000 | 8,000 | 12,000 | |||||||
Ending Balance Collectively Evaluated for Impairment | 2,016,000 | 2,663,000 | 2,016,000 | 2,663,000 | |||||||
Loans & Leases [Abstract] | |||||||||||
Ending Balance | 34,239,000 | 39,270,000 | 34,239,000 | 39,270,000 | |||||||
Ending Balance Individually Evaluated for Impairment | 158,000 | 229,000 | 158,000 | 229,000 | |||||||
Ending Balance Collectively Evaluated for Impairment | 34,081,000 | 39,041,000 | 34,081,000 | 39,041,000 | |||||||
Agricultural [Member] | |||||||||||
Allowance for Credit Losses [Roll Forward] | |||||||||||
Beginning Balance | 8,076,000 | 8,242,000 | 8,076,000 | 8,242,000 | |||||||
Charge-Offs | 0 | 0 | |||||||||
Recoveries | 0 | 0 | |||||||||
Provision | (3,262,000) | (166,000) | |||||||||
Ending Balance | 4,814,000 | 8,076,000 | 4,814,000 | 8,076,000 | 8,242,000 | ||||||
Ending Balance Individually Evaluated for Impairment | 92,000 | 99,000 | 92,000 | 99,000 | |||||||
Ending Balance Collectively Evaluated for Impairment | 4,722,000 | 7,977,000 | 4,722,000 | 7,977,000 | |||||||
Loans & Leases [Abstract] | |||||||||||
Ending Balance | 264,372,000 | 292,904,000 | 264,372,000 | 292,904,000 | |||||||
Ending Balance Individually Evaluated for Impairment | 495,000 | 188,000 | 495,000 | 188,000 | |||||||
Ending Balance Collectively Evaluated for Impairment | 263,877,000 | 292,716,000 | 263,877,000 | 292,716,000 | |||||||
Commercial [Member] | |||||||||||
Allowance for Credit Losses [Roll Forward] | |||||||||||
Beginning Balance | 11,466,000 | 11,656,000 | 11,466,000 | 11,656,000 | |||||||
Charge-Offs | (1,101,000) | (592,000) | |||||||||
Recoveries | 280,000 | 90,000 | |||||||||
Provision | (684,000) | 312,000 | |||||||||
Ending Balance | 9,961,000 | 11,466,000 | 9,961,000 | 11,466,000 | 11,656,000 | ||||||
Ending Balance Individually Evaluated for Impairment | 20,000 | 137,000 | 20,000 | 137,000 | |||||||
Ending Balance Collectively Evaluated for Impairment | 9,941,000 | 11,329,000 | 9,941,000 | 11,329,000 | |||||||
Loans & Leases [Abstract] | |||||||||||
Ending Balance | 374,816,000 | 384,795,000 | 374,816,000 | 384,795,000 | |||||||
Ending Balance Individually Evaluated for Impairment | 233,000 | 1,528,000 | 233,000 | 1,528,000 | |||||||
Ending Balance Collectively Evaluated for Impairment | 374,583,000 | 383,267,000 | 374,583,000 | 383,267,000 | |||||||
Consumer & Other [Member] | |||||||||||
Allowance for Credit Losses [Roll Forward] | |||||||||||
Beginning Balance | 456,000 | 494,000 | 456,000 | 494,000 | |||||||
Charge-Offs | (66,000) | (83,000) | |||||||||
Recoveries | 33,000 | 52,000 | |||||||||
Provision | (90,000) | (7,000) | |||||||||
Ending Balance | 333,000 | 456,000 | 333,000 | 456,000 | 494,000 | ||||||
Ending Balance Individually Evaluated for Impairment | 52,000 | 61,000 | 52,000 | 61,000 | |||||||
Ending Balance Collectively Evaluated for Impairment | 281,000 | 395,000 | 281,000 | 395,000 | |||||||
Loans & Leases [Abstract] | |||||||||||
Ending Balance | 235,529,000 | 15,422,000 | 235,529,000 | 15,422,000 | |||||||
Ending Balance Individually Evaluated for Impairment | 254,000 | 200,000 | 254,000 | 200,000 | |||||||
Ending Balance Collectively Evaluated for Impairment | 235,275,000 | 15,222,000 | 235,275,000 | 15,222,000 | |||||||
Leases [Member] | |||||||||||
Allowance for Credit Losses [Roll Forward] | |||||||||||
Beginning Balance | 3,162,000 | 4,022,000 | 3,162,000 | 4,022,000 | |||||||
Charge-Offs | 0 | 0 | |||||||||
Recoveries | 0 | 0 | |||||||||
Provision | (1,431,000) | (860,000) | |||||||||
Ending Balance | 1,731,000 | 3,162,000 | 1,731,000 | 3,162,000 | 4,022,000 | ||||||
Ending Balance Individually Evaluated for Impairment | 0 | 0 | 0 | 0 | |||||||
Ending Balance Collectively Evaluated for Impairment | 1,731,000 | 3,162,000 | 1,731,000 | 3,162,000 | |||||||
Loans & Leases [Abstract] | |||||||||||
Ending Balance | 103,522,000 | 105,402,000 | 103,522,000 | 105,402,000 | |||||||
Ending Balance Individually Evaluated for Impairment | 0 | 0 | 0 | 0 | |||||||
Ending Balance Collectively Evaluated for Impairment | 103,522,000 | 105,402,000 | 103,522,000 | 105,402,000 | |||||||
Unallocated [Member] | |||||||||||
Allowance for Credit Losses [Roll Forward] | |||||||||||
Beginning Balance | $ 192,000 | $ 261,000 | 192,000 | 261,000 | |||||||
Charge-Offs | 0 | 0 | |||||||||
Recoveries | 0 | 0 | |||||||||
Provision | 892,000 | (69,000) | |||||||||
Ending Balance | 1,084,000 | 192,000 | 1,084,000 | 192,000 | $ 261,000 | ||||||
Ending Balance Individually Evaluated for Impairment | 0 | 0 | 0 | 0 | |||||||
Ending Balance Collectively Evaluated for Impairment | 1,084,000 | 192,000 | 1,084,000 | 192,000 | |||||||
Loans & Leases [Abstract] | |||||||||||
Ending Balance | 0 | 0 | 0 | 0 | |||||||
Ending Balance Individually Evaluated for Impairment | 0 | 0 | 0 | 0 | |||||||
Ending Balance Collectively Evaluated for Impairment | 0 | 0 | 0 | 0 | |||||||
Restructured Loans [Member] | |||||||||||
Loans & Leases [Abstract] | |||||||||||
Ending Balance Individually Evaluated for Impairment | $ 876,000 | $ 2,600,000 | $ 876,000 | $ 2,600,000 |
Allowance for Credit Losses, Loan & Lease Portfolio Including Unearned Income Allocated by Management's Internal Credit Ratings (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
||||||
---|---|---|---|---|---|---|---|---|
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | $ 3,099,592 | $ 2,673,027 | ||||||
Pass [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 3,071,556 | [1] | 2,643,190 | [2] | ||||
Special Mention [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 9,405 | 13,621 | ||||||
Substandard [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 18,631 | 16,216 | ||||||
Doubtful [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 0 | 0 | ||||||
Loss [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 0 | 0 | ||||||
Watch [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 958,200 | 744,700 | ||||||
Commercial Real Estate [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 958,980 | 838,570 | ||||||
Commercial Real Estate [Member] | Pass [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 946,621 | [1] | 831,941 | [2] | ||||
Commercial Real Estate [Member] | Special Mention [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 7,849 | 6,629 | ||||||
Commercial Real Estate [Member] | Substandard [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 4,510 | 0 | ||||||
Agricultural Real Estate [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 643,014 | 625,767 | ||||||
Agricultural Real Estate [Member] | Pass [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 631,043 | [1] | 611,792 | [2] | ||||
Agricultural Real Estate [Member] | Special Mention [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 400 | 1,136 | ||||||
Agricultural Real Estate [Member] | Substandard [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 11,571 | 12,839 | ||||||
Real Estate Construction [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 185,741 | 115,644 | ||||||
Real Estate Construction [Member] | Pass [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 185,741 | [1] | 115,644 | [2] | ||||
Real Estate Construction [Member] | Special Mention [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 0 | 0 | ||||||
Real Estate Construction [Member] | Substandard [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 0 | 0 | ||||||
Residential 1st Mortgages [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 299,379 | 255,253 | ||||||
Residential 1st Mortgages [Member] | Pass [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 298,689 | [1] | 254,459 | [2] | ||||
Residential 1st Mortgages [Member] | Special Mention [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 0 | 0 | ||||||
Residential 1st Mortgages [Member] | Substandard [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 690 | 794 | ||||||
Home Equity Lines and Loans [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 34,239 | 39,270 | ||||||
Home Equity Lines and Loans [Member] | Pass [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 34,058 | [1] | 39,092 | [2] | ||||
Home Equity Lines and Loans [Member] | Special Mention [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 0 | 0 | ||||||
Home Equity Lines and Loans [Member] | Substandard [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 181 | 178 | ||||||
Agricultural [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 264,372 | 292,904 | ||||||
Agricultural [Member] | Pass [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 263,781 | [1] | 289,276 | [2] | ||||
Agricultural [Member] | Special Mention [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 96 | 2,617 | ||||||
Agricultural [Member] | Substandard [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 495 | 1,011 | ||||||
Commercial [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 374,816 | 384,795 | ||||||
Commercial [Member] | Pass [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 373,038 | [1] | 380,650 | [2] | ||||
Commercial [Member] | Special Mention [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 1,060 | 3,239 | ||||||
Commercial [Member] | Substandard [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 718 | 906 | ||||||
Consumer & Other [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 235,529 | 15,422 | ||||||
Consumer & Other [Member] | Pass [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 235,063 | [1] | 14,934 | [2] | ||||
Consumer & Other [Member] | Special Mention [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 0 | 0 | ||||||
Consumer & Other [Member] | Substandard [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 466 | 488 | ||||||
Leases [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 103,522 | 105,402 | ||||||
Leases [Member] | Pass [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 103,522 | [1] | 105,402 | [2] | ||||
Leases [Member] | Special Mention [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | 0 | 0 | ||||||
Leases [Member] | Substandard [Member] | ||||||||
Loan & Lease Portfolio Allocated by Management's Internal Risk Ratings [Abstract] | ||||||||
Loans & leases | $ 0 | $ 0 | ||||||
|
Allowance for Credit Losses, Aging Analysis of Loan & Lease Portfolio Including Unearned Income by the Time Past Due (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
90 Days and Still Accruing | $ 0 | $ 0 | |
Nonaccrual | 495,000 | 0 | |
Total Past Due | 506,000 | 352,000 | |
Current | 3,099,086,000 | 2,672,675,000 | |
Total Loans & Leases | 3,099,592,000 | 2,673,027,000 | |
Interest income forgone on nonaccrual loans | 22,000 | 0 | $ 0 |
30-59 Days Past Due [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
Total Past Due | 11,000 | 352,000 | |
60-89 Days Past Due [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
Total Past Due | 0 | 0 | |
Commercial Real Estate [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
90 Days and Still Accruing | 0 | 0 | |
Nonaccrual | 0 | 0 | |
Total Past Due | 0 | 0 | |
Current | 958,980,000 | 838,570,000 | |
Total Loans & Leases | 958,980,000 | 838,570,000 | |
Commercial Real Estate [Member] | 30-59 Days Past Due [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
Total Past Due | 0 | 0 | |
Commercial Real Estate [Member] | 60-89 Days Past Due [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
Total Past Due | 0 | 0 | |
Agricultural Real Estate [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
90 Days and Still Accruing | 0 | 0 | |
Nonaccrual | 495,000 | 0 | |
Total Past Due | 495,000 | 0 | |
Current | 642,519,000 | 625,767,000 | |
Total Loans & Leases | 643,014,000 | 625,767,000 | |
Agricultural Real Estate [Member] | 30-59 Days Past Due [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
Total Past Due | 0 | 0 | |
Agricultural Real Estate [Member] | 60-89 Days Past Due [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
Total Past Due | 0 | 0 | |
Real Estate Construction [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
90 Days and Still Accruing | 0 | 0 | |
Nonaccrual | 0 | 0 | |
Total Past Due | 0 | 240,000 | |
Current | 185,741,000 | 115,404,000 | |
Total Loans & Leases | 185,741,000 | 115,644,000 | |
Real Estate Construction [Member] | 30-59 Days Past Due [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
Total Past Due | 0 | 240,000 | |
Real Estate Construction [Member] | 60-89 Days Past Due [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
Total Past Due | 0 | 0 | |
Residential 1st Mortgages [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
90 Days and Still Accruing | 0 | 0 | |
Nonaccrual | 0 | 0 | |
Total Past Due | 0 | 0 | |
Current | 299,379,000 | 255,253,000 | |
Total Loans & Leases | 299,379,000 | 255,253,000 | |
Residential 1st Mortgages [Member] | 30-59 Days Past Due [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
Total Past Due | 0 | 0 | |
Residential 1st Mortgages [Member] | 60-89 Days Past Due [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
Total Past Due | 0 | 0 | |
Home Equity Lines and Loans [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
90 Days and Still Accruing | 0 | 0 | |
Nonaccrual | 0 | 0 | |
Total Past Due | 0 | 0 | |
Current | 34,239,000 | 39,270,000 | |
Total Loans & Leases | 34,239,000 | 39,270,000 | |
Home Equity Lines and Loans [Member] | 30-59 Days Past Due [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
Total Past Due | 0 | 0 | |
Home Equity Lines and Loans [Member] | 60-89 Days Past Due [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
Total Past Due | 0 | 0 | |
Agricultural [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
90 Days and Still Accruing | 0 | 0 | |
Nonaccrual | 0 | 0 | |
Total Past Due | 0 | 0 | |
Current | 264,372,000 | 292,904,000 | |
Total Loans & Leases | 264,372,000 | 292,904,000 | |
Agricultural [Member] | 30-59 Days Past Due [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
Total Past Due | 0 | 0 | |
Agricultural [Member] | 60-89 Days Past Due [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
Total Past Due | 0 | 0 | |
Commercial [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
90 Days and Still Accruing | 0 | 0 | |
Nonaccrual | 0 | 0 | |
Total Past Due | 0 | 77,000 | |
Current | 374,816,000 | 384,718,000 | |
Total Loans & Leases | 374,816,000 | 384,795,000 | |
Commercial [Member] | 30-59 Days Past Due [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
Total Past Due | 0 | 77,000 | |
Commercial [Member] | 60-89 Days Past Due [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
Total Past Due | 0 | 0 | |
Consumer & Other [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
90 Days and Still Accruing | 0 | 0 | |
Nonaccrual | 0 | 0 | |
Total Past Due | 11,000 | 35,000 | |
Current | 235,518,000 | 15,387,000 | |
Total Loans & Leases | 235,529,000 | 15,422,000 | |
Consumer & Other [Member] | 30-59 Days Past Due [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
Total Past Due | 11,000 | 35,000 | |
Consumer & Other [Member] | 60-89 Days Past Due [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
Total Past Due | 0 | 0 | |
Leases [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
90 Days and Still Accruing | 0 | 0 | |
Nonaccrual | 0 | 0 | |
Total Past Due | 0 | 0 | |
Current | 103,522,000 | 105,402,000 | |
Total Loans & Leases | 103,522,000 | 105,402,000 | |
Leases [Member] | 30-59 Days Past Due [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
Total Past Due | 0 | 0 | |
Leases [Member] | 60-89 Days Past Due [Member] | |||
Aging Analysis of Loan & Lease Portfolio by Time Past Due [Abstract] | |||
Total Past Due | $ 0 | $ 0 |
Allowance for Credit Losses, Impaired Loans & Leases (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
With no related allowance recorded [Abstract] | ||
Recorded Investment | $ 5,716 | $ 5,740 |
Unpaid Principal Balance | 5,716 | 5,740 |
Average Recorded Investment | 6,772 | 6,167 |
Interest Income Recognized | 403 | 388 |
With an allowance recorded [Abstract] | ||
Recorded Investment | 2,651 | 6,368 |
Unpaid Principal Balance | 2,929 | 6,587 |
Related Allowance | 248 | 612 |
Average Recorded Investment | 2,603 | 6,328 |
Interest Income Recognized | 171 | 230 |
Total [Abstract] | ||
Recorded Investment | 8,367 | 12,108 |
Unpaid Principal Balance | 8,645 | 12,327 |
Related Allowance | 248 | 612 |
Average Recorded Investment | 9,375 | 12,495 |
Interest Income Recognized | 574 | 618 |
Commercial Real Estate [Member] | ||
With no related allowance recorded [Abstract] | ||
Recorded Investment | 84 | 86 |
Unpaid Principal Balance | 84 | 86 |
Average Recorded Investment | 764 | 90 |
Interest Income Recognized | 35 | 8 |
With an allowance recorded [Abstract] | ||
Recorded Investment | 0 | 2,822 |
Unpaid Principal Balance | 0 | 2,822 |
Related Allowance | 0 | 234 |
Average Recorded Investment | 21 | 2,853 |
Interest Income Recognized | 1 | 94 |
Total [Abstract] | ||
Related Allowance | 0 | 234 |
Agricultural Real Estate [Member] | ||
With no related allowance recorded [Abstract] | ||
Recorded Investment | 5,629 | 5,654 |
Unpaid Principal Balance | 5,629 | 5,654 |
Average Recorded Investment | 5,629 | 6,069 |
Interest Income Recognized | 352 | 379 |
With an allowance recorded [Abstract] | ||
Recorded Investment | 0 | |
Unpaid Principal Balance | 0 | |
Related Allowance | 0 | |
Average Recorded Investment | 137 | |
Interest Income Recognized | 0 | |
Total [Abstract] | ||
Related Allowance | 0 | |
Residential 1st Mortgages [Member] | ||
With an allowance recorded [Abstract] | ||
Recorded Investment | 1,671 | 1,562 |
Unpaid Principal Balance | 1,895 | 1,770 |
Related Allowance | 84 | 74 |
Average Recorded Investment | 1,652 | 1,601 |
Interest Income Recognized | 76 | 73 |
Total [Abstract] | ||
Related Allowance | 84 | 74 |
Home Equity Lines and Loans [Member] | ||
With an allowance recorded [Abstract] | ||
Recorded Investment | 64 | 68 |
Unpaid Principal Balance | 75 | 79 |
Related Allowance | 3 | 7 |
Average Recorded Investment | 66 | 71 |
Interest Income Recognized | 4 | 4 |
Total [Abstract] | ||
Related Allowance | 3 | 7 |
Agricultural [Member] | ||
With no related allowance recorded [Abstract] | ||
Recorded Investment | 3 | |
Unpaid Principal Balance | 3 | |
Average Recorded Investment | 2 | |
Interest Income Recognized | 0 | |
With an allowance recorded [Abstract] | ||
Recorded Investment | 492 | 188 |
Unpaid Principal Balance | 534 | 188 |
Related Allowance | 92 | 99 |
Average Recorded Investment | 410 | 195 |
Interest Income Recognized | 59 | 6 |
Total [Abstract] | ||
Related Allowance | 92 | 99 |
Commercial [Member] | ||
With no related allowance recorded [Abstract] | ||
Recorded Investment | 0 | 0 |
Unpaid Principal Balance | 0 | 0 |
Average Recorded Investment | 377 | 8 |
Interest Income Recognized | 16 | 1 |
With an allowance recorded [Abstract] | ||
Recorded Investment | 234 | 1,528 |
Unpaid Principal Balance | 234 | 1,528 |
Related Allowance | 13 | 137 |
Average Recorded Investment | 123 | 1,554 |
Interest Income Recognized | 18 | 53 |
Total [Abstract] | ||
Related Allowance | 13 | 137 |
Consumer & Other [Member] | ||
With an allowance recorded [Abstract] | ||
Recorded Investment | 190 | 200 |
Unpaid Principal Balance | 191 | 200 |
Related Allowance | 56 | 61 |
Average Recorded Investment | 194 | 54 |
Interest Income Recognized | 13 | 0 |
Total [Abstract] | ||
Related Allowance | $ 56 | $ 61 |
Allowance for Credit Losses, Loans by Class Modified as Troubled Debt Restructured Loans (Details) |
9 Months Ended | 12 Months Ended | |
---|---|---|---|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2020
USD ($)
Loan
|
Dec. 31, 2019
USD ($)
Loan
|
|
CARES Act [Abstract] | |||
Loans restructured under the CARES act | $ 277,600,000 | ||
Loans remaining in deferral status | 3,700,000 | $ 3,700,000 | |
Troubled Debt Restructured Loans [Abstract] | |||
Specific reserves allocated to troubled debt restructured loans & leases | 158,000 | 158,000 | $ 612,000 |
Commitments to lend additional amounts to customers with outstanding loans that are classified as troubled debt restructurings | 0 | $ 0 | $ 0 |
Loans by class modified as troubled debt restructured loans [Abstract] | |||
Number of Loans | Loan | 6 | 2 | |
Pre-Modification Outstanding Recorded Investment | $ 875,000 | $ 396,000 | |
Post-Modification Recorded Outstanding Investment | 875,000 | 396,000 | |
Increase in allowance for loan losses due to TDR | 120,000 | 101,000 | |
TDR's charge-offs | $ 0 | $ 0 | |
Number of loans modified as troubled debt restructurings with subsequent payment defaults | Loan | 0 | 0 | |
Stated Interest Rate Reduction [Member] | |||
Troubled Debt Restructured Loans [Abstract] | |||
Period of modifications | 5 years | ||
Extended Maturity [Member] | Minimum [Member] | |||
Troubled Debt Restructured Loans [Abstract] | |||
Period of modifications | 3 months | ||
Extended Maturity [Member] | Maximum [Member] | |||
Troubled Debt Restructured Loans [Abstract] | |||
Period of modifications | 10 years | ||
Performing [Member] | |||
Troubled Debt Restructured Loans [Abstract] | |||
Troubled debt restructured loans | $ 7,900,000 | $ 7,900,000 | $ 12,100,000 |
Residential 1st Mortgages [Member] | |||
Loans by class modified as troubled debt restructured loans [Abstract] | |||
Number of Loans | Loan | 2 | ||
Pre-Modification Outstanding Recorded Investment | $ 156,000 | ||
Post-Modification Recorded Outstanding Investment | $ 156,000 | ||
Agricultural [Member] | |||
Loans by class modified as troubled debt restructured loans [Abstract] | |||
Number of Loans | Loan | 3 | 1 | |
Pre-Modification Outstanding Recorded Investment | $ 495,000 | $ 201,000 | |
Post-Modification Recorded Outstanding Investment | $ 495,000 | $ 201,000 | |
Commercial [Member] | |||
Loans by class modified as troubled debt restructured loans [Abstract] | |||
Number of Loans | Loan | 1 | ||
Pre-Modification Outstanding Recorded Investment | $ 224,000 | ||
Post-Modification Recorded Outstanding Investment | $ 224,000 | ||
Consumer & Other [Member] | |||
Loans by class modified as troubled debt restructured loans [Abstract] | |||
Number of Loans | Loan | 1 | ||
Pre-Modification Outstanding Recorded Investment | $ 195,000 | ||
Post-Modification Recorded Outstanding Investment | $ 195,000 |
Premises and Equipment (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Property, Plant and Equipment, Net [Abstract] | |||
Subtotal | $ 85,749,000 | $ 78,800,000 | |
Less: Accumulated Depreciation and Amortization | 35,602,000 | 33,529,000 | |
Total | 50,147,000 | 45,271,000 | |
Depreciation and amortization | 2,769,000 | 2,756,000 | $ 2,421,000 |
Rental income | 434,000 | 183,000 | $ 173,000 |
Land and Buildings [Member] | |||
Property, Plant and Equipment, Net [Abstract] | |||
Subtotal | 60,246,000 | 53,997,000 | |
Furniture, Fixtures and Equipment [Member] | |||
Property, Plant and Equipment, Net [Abstract] | |||
Subtotal | 21,750,000 | 21,058,000 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment, Net [Abstract] | |||
Subtotal | $ 3,753,000 | $ 3,745,000 |
Other Real Estate (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Other Real Estate [Abstract] | ||
Other real estate, net | $ 873,000 | $ 873,000 |
Time Deposits (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Time Deposits $250,000 or more [Abstract] | ||
Balance | $ 185,944 | $ 257,392 |
Maturities of Time Deposits [Abstract] | ||
2021 | 373,332 | |
2022 | 38,620 | |
2023 | 7,571 | |
2024 | 715 | |
2025 | 1,630 | |
Total | $ 421,868 | $ 517,922 |
Income Taxes, Current and Deferred Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Current [Abstract] | |||||||||||
Federal | $ 12,174 | $ 14,798 | $ 2,517 | ||||||||
State | 9,005 | 7,733 | 6,224 | ||||||||
Total Current | 21,179 | 22,531 | 8,741 | ||||||||
Deferred [Abstract] | |||||||||||
Federal | (1,115) | (3,500) | 5,622 | ||||||||
State | (847) | 246 | (160) | ||||||||
Total Deferred | (1,962) | (3,254) | 5,462 | ||||||||
Total Provision for Taxes | $ 5,298 | $ 4,945 | $ 4,533 | $ 4,441 | $ 5,037 | $ 4,660 | $ 4,903 | $ 4,677 | $ 19,217 | $ 19,277 | $ 14,203 |
Income Taxes, Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||||||||||
Tax Provision at Federal Statutory Rate | $ 16,370 | $ 15,816 | $ 12,543 | ||||||||
Interest on Obligations of States and Political Subdivisions exempt from Federal Taxation | (350) | (358) | (338) | ||||||||
State and Local Income Taxes, Net of Federal Income Tax Benefit | 6,445 | 6,304 | 4,791 | ||||||||
Bank Owned Life Insurance | (444) | (460) | (434) | ||||||||
Low-Income Housing Tax Credit | (2,655) | (2,078) | (1,624) | ||||||||
Out of Period Adjustment | 0 | 0 | (802) | ||||||||
Other, Net | (149) | 53 | 67 | ||||||||
Total Provision for Taxes | $ 5,298 | $ 4,945 | $ 4,533 | $ 4,441 | $ 5,037 | $ 4,660 | $ 4,903 | $ 4,677 | $ 19,217 | $ 19,277 | $ 14,203 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||||||||||
Tax Provision at Federal Statutory Rate | 21.00% | 21.00% | 21.00% | ||||||||
Interest on Obligations of States and Political Subdivisions exempt from Federal Taxation | (0.40%) | (0.50%) | (0.50%) | ||||||||
State and Local Income Taxes, Net of Federal Income Tax Benefit | 8.30% | 8.40% | 7.90% | ||||||||
Bank Owned Life Insurance | (0.60%) | (0.60%) | (0.70%) | ||||||||
Low-Income Housing Tax Credit | (3.40%) | (2.80%) | (2.70%) | ||||||||
Out of Period Adjustment | 0.00% | 0.00% | (1.30%) | ||||||||
Other, Net | (0.20%) | 0.10% | 0.10% | ||||||||
Total Provision for Taxes | 24.70% | 25.60% | 23.80% |
Income Taxes, Components of Net Deferred Tax Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Deferred Tax Assets [Abstract] | ||
Allowance for Credit Losses | $ 17,248 | $ 15,925 |
Accrued Liabilities | 8,526 | 8,452 |
Deferred Compensation | 13,707 | 14,200 |
State Franchise Tax | 1,891 | 1,624 |
Tax Credit Carry Forward | 0 | 1,266 |
Lease Liability | 1,454 | 1,487 |
Acquired Net Operating Loss | 643 | 673 |
Fair Value Adjustment on Loans Acquired | 237 | 286 |
Fair Value Adjustment on ORE Acquired | 108 | 108 |
PPP Loan Service Fee Income | 1,367 | 0 |
Low-Income Housing Investment | 384 | 286 |
Other | 7 | 2 |
Total Deferred Tax Assets | 45,572 | 44,309 |
Deferred Tax Liabilities [Abstract] | ||
Premises and Equipment | (1,684) | (1,974) |
Securities Accretion | (588) | (370) |
Unrealized Gain on Securities Available-for-Sale | (5,156) | (935) |
Leasing Activities | (17,183) | (19,226) |
Core Deposit Intangible Asset | (1,186) | (1,372) |
ROU Lease Asset | (1,428) | (1,471) |
Prepaid | (45) | (66) |
Other | (1,209) | (898) |
Total Deferred Tax Liabilities | (28,479) | (26,312) |
Net Deferred Tax Assets | $ 17,093 | $ 17,997 |
Short Term Borrowings (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Short Term Borrowings [Abstract] | ||
Unused lines of credit | $ 1,300 | $ 1,300 |
Advances from FHLB | 0 | 0 |
Federal Funds purchased or advances from FRB | $ 0 | $ 0 |
Federal Home Loan Bank Advances (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures [Abstract] | ||
Federal Home Loan Bank Advances, short term | $ 0.0 | $ 0.0 |
Federal Home Loan Bank [Member] | ||
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures [Abstract] | ||
Collateral on borrowing lines | 808.9 | |
Federal Home Loan Bank of San Francisco [Member] | ||
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures [Abstract] | ||
Federal Home Loan Bank Advances, short term | 0.0 | 0.0 |
Federal Home Loan Bank Advances, long term | 0.0 | $ 0.0 |
Borrowing capacity | 630.5 | |
Federal Home Loan Bank of San Francisco [Member] | Federal Home Loan Bank [Member] | ||
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures [Abstract] | ||
Collateral on borrowing lines | $ 808.9 |
Long-term Subordinated Debentures (Details) $ / shares in Units, $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2020
USD ($)
$ / shares
| |
Subordinated Debentures [Abstract] | |
Guaranteed preferred beneficial interests | $ 10.0 |
Liquidation value (per capital security) | $ / shares | $ 1,000 |
Junior Subordinated Debentures [Member] | |
Subordinated Debentures [Abstract] | |
Junior subordinated debentures | $ 10.3 |
Debt instrument, maturity date | Dec. 17, 2033 |
Junior Subordinated Debentures [Member] | LIBOR [Member] | |
Subordinated Debentures [Abstract] | |
Term of variable rate | 3 months |
Basis spread on variable rate | 2.85% |
Shareholders' Equity, Stock Repurchase Program, Dividends and Issuance of Common Stock (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Aug. 05, 2008 |
Dec. 31, 2020 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Nov. 23, 2020 |
Feb. 18, 2016 |
|
Stock Repurchased [Abstract] | |||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Stock Issued [Abstract] | |||||||
Per share price of shares issued (in dollars per share) | $ 770.00 | $ 770.00 | |||||
Minimum [Member] | |||||||
Stock Issued [Abstract] | |||||||
Per share price of shares issued (in dollars per share) | 715.00 | $ 635.00 | |||||
Maximum [Member] | |||||||
Stock Issued [Abstract] | |||||||
Per share price of shares issued (in dollars per share) | $ 770.00 | $ 690.00 | |||||
Directors and Officers [Member] | |||||||
Stock Issued [Abstract] | |||||||
Issuance of Common Stock (in shares) | 2,400 | ||||||
Non-qualified Deferred Compensation Retirement Plans [Member] | |||||||
Stock Issued [Abstract] | |||||||
Issuance of common stock (in shares) | 523 | 9,312 | 13,520 | ||||
1998 Common Stock Repurchase Plan [Member] | |||||||
Stock Repurchased [Abstract] | |||||||
Approved funds available for common stock repurchase program | $ 20.0 | $ 20.0 | |||||
Number of shares of stock purchased (in shares) | 0 | 0 | |||||
2020 Common Stock Repurchase Plan [Member] | |||||||
Stock Repurchased [Abstract] | |||||||
Shares repurchased from shareholders | $ 2.8 | ||||||
2020 Common Stock Repurchase Plan [Member] | Maximum [Member] | |||||||
Stock Repurchased [Abstract] | |||||||
Approved funds available for common stock repurchase program | $ 8.5 | ||||||
Share Purchase Rights Plan [Member] | |||||||
Stock Repurchased [Abstract] | |||||||
Number of preferred stock purchase rights declared as dividend for each share of common stock (in shares) | 1 | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | ||||||
Dividend, declared date | Aug. 05, 2008 | ||||||
Dividend, record date | Aug. 15, 2008 | ||||||
Threshold percentage of beneficial ownership or tender offer of Acquiring Person for triggering exercise of rights | 10.00% | ||||||
Number of shares of preferred stock which the registered holder of each right is entitled to purchase (in shares) | 0.01 | ||||||
Redeemable price for a right issue (in dollars per share) | $ 0.001 | $ 0.001 | |||||
Market value of common stock shares as multiple of exercise price of right | 2 | ||||||
Term of extension of expiration date | 7 years | ||||||
Stock Issued [Abstract] | |||||||
Per share price of shares issued (in dollars per share) | $ 1,600 | $ 1,600 | $ 1,200 | ||||
Share Purchase Rights Plan [Member] | Series A Junior Participating Preferred Stock [Member] | |||||||
Stock Repurchased [Abstract] | |||||||
Number of shares of preferred stock which the registered holder of each right is entitled to purchase (in shares) | 0.01 | 0.01 | |||||
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 | |||||
Stock Issued [Abstract] | |||||||
Per share price of shares issued (in dollars per share) | $ 1,600 |
Shareholders' Equity, Compliance with Regulatory Capital Requirements (Details) $ in Thousands |
Dec. 31, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
---|---|---|
Total Capital to Risk Weighted Assets [Abstract] | ||
Actual Amount | $ 450,890 | $ 400,258 |
Minimum Regulatory Capital Requirements, Amount | $ 286,539 | $ 259,028 |
Total Capital to Risk Weighted Assets, Ratio [Abstract] | ||
Actual Ratio | 0.1259 | 0.1236 |
Minimum Regulatory Capital Requirements, Ratio | 0.0800 | 0.0800 |
Total Common Equity Tier 1 Capital [Abstract] | ||
Actual Amount | $ 395,941 | $ 349,601 |
Minimum Regulatory Capital Requirements, Amount | $ 161,178 | $ 145,703 |
Total Common Equity Tier 1 Capital, Ratio [Abstract] | ||
Actual Ratio | 0.1105 | 0.1080 |
Minimum Regulatory Capital Requirements, Ratio | 0.0450 | 0.0450 |
Tier 1 Capital to Risk Weighted Assets [Abstract] | ||
Actual Amount | $ 405,941 | $ 359,601 |
Minimum Regulatory Capital Requirements, Amount | $ 214,904 | $ 194,271 |
Tier 1 Capital to Risk Weighted Assets, Ratio [Abstract] | ||
Actual Ratio | 0.1133 | 0.1111 |
Minimum Regulatory Capital Requirements, Ratio | 0.0600 | 0.0600 |
Tier 1 Capital to Average Assets [Abstract] | ||
Actual Amount | $ 405,941 | $ 359,601 |
Minimum Regulatory Capital Requirements, Amount | $ 177,820 | $ 145,255 |
Tier 1 Capital to Average Assets, Ratio [Abstract] | ||
Actual Ratio | 0.0913 | 0.0990 |
Minimum Regulatory Capital Requirements, Ratio | 0.0400 | 0.0300 |
Bank [Member] | ||
Total Capital to Risk Weighted Assets [Abstract] | ||
Actual Amount | $ 446,251 | $ 399,230 |
Minimum Regulatory Capital Requirements, Amount | 286,462 | 259,012 |
Well Capitalized Under Prompt Corrective Action, Amount | $ 358,077 | $ 323,765 |
Total Capital to Risk Weighted Assets, Ratio [Abstract] | ||
Actual Ratio | 0.1246 | 0.1233 |
Minimum Regulatory Capital Requirements, Ratio | 0.0800 | 0.0800 |
Well Capitalized Under Prompt Corrective Action, Ratio | 0.1000 | 0.1000 |
Total Common Equity Tier 1 Capital [Abstract] | ||
Actual Amount | $ 401,313 | $ 358,576 |
Minimum Regulatory Capital Requirements, Amount | 161,135 | 145,694 |
Well Capitalized Under Prompt Corrective Action, Amount | $ 232,750 | $ 210,447 |
Total Common Equity Tier 1 Capital, Ratio [Abstract] | ||
Actual Ratio | 0.1121 | 0.1108 |
Minimum Regulatory Capital Requirements, Ratio | 0.0450 | 0.0450 |
Well Capitalized Under Prompt Corrective Action, Ratio | 0.0650 | 0.0650 |
Tier 1 Capital to Risk Weighted Assets [Abstract] | ||
Actual Amount | $ 401,313 | $ 358,576 |
Minimum Regulatory Capital Requirements, Amount | 214,846 | 194,259 |
Well Capitalized Under Prompt Corrective Action, Amount | $ 286,462 | $ 259,012 |
Tier 1 Capital to Risk Weighted Assets, Ratio [Abstract] | ||
Actual Ratio | 0.1121 | 0.1108 |
Minimum Regulatory Capital Requirements, Ratio | 0.0600 | 0.0600 |
Well Capitalized Under Prompt Corrective Action, Ratio | 0.0800 | 0.0800 |
Tier 1 Capital to Average Assets [Abstract] | ||
Actual Amount | $ 401,313 | $ 358,576 |
Minimum Regulatory Capital Requirements, Amount | 177,605 | 145,079 |
Well Capitalized Under Prompt Corrective Action, Amount | $ 222,006 | $ 181,349 |
Tier 1 Capital to Average Assets, Ratio [Abstract] | ||
Actual Ratio | 0.0904 | 0.0989 |
Minimum Regulatory Capital Requirements, Ratio | 0.0400 | 0.0300 |
Well Capitalized Under Prompt Corrective Action, Ratio | 0.0500 | 0.0500 |
Dividends and Basic and Diluted Earnings Per Common Share (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Dividends and Basic and Diluted Earnings Per Common Share [Abstract] | |||||||||||
Cash dividends declared on common stock | $ 11,700,000 | $ 11,221,000 | $ 11,151,000 | ||||||||
Cash dividends paid per share of common stock (in dollars per share) | $ 14.75 | $ 14.20 | $ 13.90 | ||||||||
Percentage increase in cash dividend per share | 3.90% | ||||||||||
Basic and Diluted Earnings per Common Share [Abstract] | |||||||||||
Net Income | $ 15,493,000 | $ 14,810,000 | $ 14,309,000 | $ 14,122,000 | $ 14,644,000 | $ 13,738,000 | $ 14,105,000 | $ 13,549,000 | $ 58,734,000 | $ 56,036,000 | $ 45,527,000 |
Weighted Average Number of Common Shares Outstanding (in shares) | 793,337 | 787,227 | 801,229 | ||||||||
Basic and Diluted Earnings Per Common Share (in dollars per share) | $ 19.54 | $ 18.66 | $ 18.03 | $ 17.80 | $ 18.54 | $ 17.45 | $ 17.92 | $ 17.27 | $ 74.03 | $ 71.18 | $ 56.82 |
Employee Benefit Plans (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020
USD ($)
Contribution
shares
|
Dec. 31, 2019
USD ($)
shares
|
Dec. 31, 2018
USD ($)
|
|
Executive Retirement Plan, Life Insurance Arrangements and Senior Management Retention Plan [Abstract] | |||
Net gains on deferred compensation plan investments | $ 1,777 | $ 2,625 | $ 1,088 |
Tax-exempt interest earned on the life insurance policies | 2,088 | 2,031 | 1,900 |
Executive Officers [Member] | |||
Executive Retirement Plan, Life Insurance Arrangements and Senior Management Retention Plan [Abstract] | |||
Employer contribution | 6,800 | 6,600 | 6,200 |
Carrying value of liability | $ 56,700 | $ 50,500 | |
Common stock held as investments in Rabbi Trust of ERP (in shares) | shares | 52,980 | 48,133 | |
Common stock held as investments in Rabbi Trust of ERP, historical cost basis amount | $ 31,200 | $ 29,100 | |
Net gains on deferred compensation plan investments | 1,800 | 2,600 | |
Tax-exempt interest earned on the life insurance policies | 2,100 | 2,000 | 1,900 |
Cash surrender value of life insurance policies | 69,200 | 67,100 | |
Senior Level Employees [Member] | Senior Management Retention Plan [Member] | |||
Executive Retirement Plan, Life Insurance Arrangements and Senior Management Retention Plan [Abstract] | |||
Employer contribution | 2,300 | 1,300 | 1,500 |
Carrying value of liability | $ 8,600 | $ 6,300 | |
Common stock held as investments in Rabbi Trust of ERP (in shares) | shares | 12,548 | 9,822 | |
Common stock held as investments in Rabbi Trust of ERP, historical cost basis amount | $ 7,900 | $ 5,800 | |
Net gains on deferred compensation plan investments | $ 100 | 0 | |
Profit Sharing Plan [Member] | |||
Profit Sharing Plan [Abstract] | |||
Minimum requisite service period | 1 year | ||
Number of annual employer contribution | Contribution | 2 | ||
Employer discretionary contribution amount | $ 1,500 | 1,400 | 1,200 |
Employer mandatory contributions amount | $ 1,700 | $ 1,600 | $ 1,400 |
Annual vesting percentage, first year | 0.00% | ||
Annual vesting percentage, full year thereafter | 25.00% | ||
Benefit vesting period | 5 years |
Fair Value Measurements (Details) |
12 Months Ended |
---|---|
Dec. 31, 2020 | |
Impaired Loans [Member] | |
Fair Value Measurements [Abstract] | |
Percentage of selling costs | 10.00% |
ORE [Member] | |
Fair Value Measurements [Abstract] | |
Percentage of selling costs | 10.00% |
Fair Value Measurements, Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | $ 807,732 | $ 507,386 | ||
Transfer into Level 3 | 0 | |||
Transfer out of Level 3 | 0 | |||
US Treasury Notes [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 15,288 | 54,995 | ||
US Government Agency SBA [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 8,160 | 10,798 | ||
Mortgage Backed Securities [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | [1] | 737,873 | 441,078 | |
Corporate Securities [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 45,919 | |||
Other [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 492 | 515 | ||
Recurring [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 807,732 | 507,386 | ||
Recurring [Member] | US Treasury Notes [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 15,288 | 54,995 | ||
Recurring [Member] | US Government Agency SBA [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 8,160 | 10,798 | ||
Recurring [Member] | Mortgage Backed Securities [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 737,873 | 441,078 | ||
Recurring [Member] | Corporate Securities [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 45,919 | |||
Recurring [Member] | Other [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 492 | 515 | ||
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 15,470 | 55,200 | ||
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | US Treasury Notes [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 15,288 | 54,995 | ||
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | US Government Agency SBA [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 0 | 0 | ||
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Mortgage Backed Securities [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 0 | 0 | ||
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Corporate Securities [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 0 | |||
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Other [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 182 | 205 | ||
Recurring [Member] | Other Observable Inputs (Level 2) [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 792,262 | 452,186 | ||
Recurring [Member] | Other Observable Inputs (Level 2) [Member] | US Treasury Notes [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 0 | 0 | ||
Recurring [Member] | Other Observable Inputs (Level 2) [Member] | US Government Agency SBA [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 8,160 | 10,798 | ||
Recurring [Member] | Other Observable Inputs (Level 2) [Member] | Mortgage Backed Securities [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 737,873 | 441,078 | ||
Recurring [Member] | Other Observable Inputs (Level 2) [Member] | Corporate Securities [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 45,919 | |||
Recurring [Member] | Other Observable Inputs (Level 2) [Member] | Other [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 310 | 310 | ||
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 0 | 0 | ||
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | US Treasury Notes [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 0 | 0 | ||
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | US Government Agency SBA [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 0 | 0 | ||
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Mortgage Backed Securities [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 0 | 0 | ||
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Corporate Securities [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | 0 | |||
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Other [Member] | ||||
Assets Measured at Fair Value on Recurring Basis by Fair Value Hierarchy [Abstract] | ||||
Investment Securities Available-for-Sale | $ 0 | $ 0 | ||
|
Fair Value Measurements, Assets or Liabilities Measured at Fair Value on a Non-recurring Basis (Details) - Nonrecurring [Member] - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | $ 2,396 | $ 5,751 |
Other Real Estate | 873 | 873 |
Total Assets Measured at Fair Value On a Non-Recurring Basis | 3,269 | 6,624 |
Commercial Real Estate [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 2,588 | |
Residential 1st Mortgages [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 1,584 | 1,403 |
Home Equity Lines and Loans [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 61 | 142 |
Agricultural [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 400 | 88 |
Commercial [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 213 | 1,391 |
Consumer [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 138 | 139 |
Real Estate Construction [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Other Real Estate | 873 | 873 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 0 | 0 |
Other Real Estate | 0 | 0 |
Total Assets Measured at Fair Value On a Non-Recurring Basis | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Commercial Real Estate [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Residential 1st Mortgages [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Home Equity Lines and Loans [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Agricultural [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Commercial [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Consumer [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Real Estate Construction [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Other Real Estate | 0 | 0 |
Other Observable Inputs (Level 2) [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 0 | 0 |
Other Real Estate | 0 | 0 |
Total Assets Measured at Fair Value On a Non-Recurring Basis | 0 | 0 |
Other Observable Inputs (Level 2) [Member] | Commercial Real Estate [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 0 | |
Other Observable Inputs (Level 2) [Member] | Residential 1st Mortgages [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 0 | 0 |
Other Observable Inputs (Level 2) [Member] | Home Equity Lines and Loans [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 0 | 0 |
Other Observable Inputs (Level 2) [Member] | Agricultural [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 0 | 0 |
Other Observable Inputs (Level 2) [Member] | Commercial [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 0 | 0 |
Other Observable Inputs (Level 2) [Member] | Consumer [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 0 | 0 |
Other Observable Inputs (Level 2) [Member] | Real Estate Construction [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Other Real Estate | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 2,396 | 5,751 |
Other Real Estate | 873 | 873 |
Total Assets Measured at Fair Value On a Non-Recurring Basis | 3,269 | 6,624 |
Significant Unobservable Inputs (Level 3) [Member] | Commercial Real Estate [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 2,588 | |
Significant Unobservable Inputs (Level 3) [Member] | Residential 1st Mortgages [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 1,584 | 1,403 |
Significant Unobservable Inputs (Level 3) [Member] | Home Equity Lines and Loans [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 61 | 142 |
Significant Unobservable Inputs (Level 3) [Member] | Agricultural [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 400 | 88 |
Significant Unobservable Inputs (Level 3) [Member] | Commercial [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 213 | 1,391 |
Significant Unobservable Inputs (Level 3) [Member] | Consumer [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Impaired Loans | 138 | 139 |
Significant Unobservable Inputs (Level 3) [Member] | Real Estate Construction [Member] | ||
Fair Value on Non-recurring Basis by Fair Value Hierarchy [Abstract] | ||
Other Real Estate | $ 873 | $ 873 |
Fair Value Measurements, Quantitative Information (Details) $ in Thousands |
Dec. 31, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
---|---|---|
Level 3 [Member] | Commercial Real Estate [Member] | Income Approach [Member] | Capitalization Rate [Member] | Weighted Average [Member] | ||
Quantitative Information [Abstract] | ||
Impaired loans, measurement input | 0.033 | |
Level 3 [Member] | Residential 1st Mortgages [Member] | Sales Comparison Approach [Member] | Adjustment for Difference Between Comparable Sales [Member] | Minimum [Member] | ||
Quantitative Information [Abstract] | ||
Impaired loans, measurement input | 0.0072 | 0.008 |
Level 3 [Member] | Residential 1st Mortgages [Member] | Sales Comparison Approach [Member] | Adjustment for Difference Between Comparable Sales [Member] | Maximum [Member] | ||
Quantitative Information [Abstract] | ||
Impaired loans, measurement input | 0.0413 | 0.064 |
Level 3 [Member] | Residential 1st Mortgages [Member] | Sales Comparison Approach [Member] | Adjustment for Difference Between Comparable Sales [Member] | Weighted Average [Member] | ||
Quantitative Information [Abstract] | ||
Impaired loans, measurement input | 0.0257 | 0.03 |
Level 3 [Member] | Home Equity Lines and Loans [Member] | Sales Comparison Approach [Member] | Adjustment for Difference Between Comparable Sales [Member] | Minimum [Member] | ||
Quantitative Information [Abstract] | ||
Impaired loans, measurement input | 0.011 | 0.01 |
Level 3 [Member] | Home Equity Lines and Loans [Member] | Sales Comparison Approach [Member] | Adjustment for Difference Between Comparable Sales [Member] | Maximum [Member] | ||
Quantitative Information [Abstract] | ||
Impaired loans, measurement input | 0.014 | 0.02 |
Level 3 [Member] | Home Equity Lines and Loans [Member] | Sales Comparison Approach [Member] | Adjustment for Difference Between Comparable Sales [Member] | Weighted Average [Member] | ||
Quantitative Information [Abstract] | ||
Impaired loans, measurement input | 0.0125 | 0.013 |
Level 3 [Member] | Agricultural [Member] | Income Approach [Member] | Capitalization Rate [Member] | ||
Quantitative Information [Abstract] | ||
Impaired loans, measurement input | 0.10 | |
Level 3 [Member] | Agricultural [Member] | Income Approach [Member] | Capitalization Rate [Member] | Weighted Average [Member] | ||
Quantitative Information [Abstract] | ||
Impaired loans, measurement input | 0.10 | 0.043 |
Level 3 [Member] | Commercial [Member] | Income Approach [Member] | Capitalization Rate [Member] | ||
Quantitative Information [Abstract] | ||
Impaired loans, measurement input | 0.10 | |
Level 3 [Member] | Commercial [Member] | Income Approach [Member] | Capitalization Rate [Member] | Weighted Average [Member] | ||
Quantitative Information [Abstract] | ||
Impaired loans, measurement input | 0.10 | 0.033 |
Level 3 [Member] | Consumer [Member] | Income Approach [Member] | Adjustment for Difference Between Comparable Sales [Member] | ||
Quantitative Information [Abstract] | ||
Impaired loans, measurement input | 0.10 | |
Level 3 [Member] | Consumer [Member] | Income Approach [Member] | Adjustment for Difference Between Comparable Sales [Member] | Weighted Average [Member] | ||
Quantitative Information [Abstract] | ||
Impaired loans, measurement input | 0.10 | |
Level 3 [Member] | Consumer [Member] | Sales Comparison Approach [Member] | Weighted Average [Member] | ||
Quantitative Information [Abstract] | ||
Impaired loans, measurement input | 0.406 | |
Level 3 [Member] | Real Estate Construction [Member] | Sales Comparison Approach [Member] | Adjustment for Difference Between Comparable Sales [Member] | ||
Quantitative Information [Abstract] | ||
Impaired loans, measurement input | 0.10 | |
Level 3 [Member] | Real Estate Construction [Member] | Sales Comparison Approach [Member] | Adjustment for Difference Between Comparable Sales [Member] | Weighted Average [Member] | ||
Quantitative Information [Abstract] | ||
Other Real Estate Owned, Measurement Input | 0.10 | 0.10 |
Nonrecurring [Member] | ||
Quantitative Information [Abstract] | ||
Impaired Loans | $ 2,396 | $ 5,751 |
Other Real Estate | 873 | 873 |
Nonrecurring [Member] | Commercial Real Estate [Member] | ||
Quantitative Information [Abstract] | ||
Impaired Loans | 2,588 | |
Nonrecurring [Member] | Residential 1st Mortgages [Member] | ||
Quantitative Information [Abstract] | ||
Impaired Loans | 1,584 | 1,403 |
Nonrecurring [Member] | Home Equity Lines and Loans [Member] | ||
Quantitative Information [Abstract] | ||
Impaired Loans | 61 | 142 |
Nonrecurring [Member] | Agricultural [Member] | ||
Quantitative Information [Abstract] | ||
Impaired Loans | 400 | 88 |
Nonrecurring [Member] | Commercial [Member] | ||
Quantitative Information [Abstract] | ||
Impaired Loans | 213 | 1,391 |
Nonrecurring [Member] | Consumer [Member] | ||
Quantitative Information [Abstract] | ||
Impaired Loans | 138 | 139 |
Nonrecurring [Member] | Real Estate Construction [Member] | ||
Quantitative Information [Abstract] | ||
Other Real Estate | 873 | 873 |
Nonrecurring [Member] | Level 3 [Member] | ||
Quantitative Information [Abstract] | ||
Impaired Loans | 2,396 | 5,751 |
Other Real Estate | 873 | 873 |
Nonrecurring [Member] | Level 3 [Member] | Commercial Real Estate [Member] | ||
Quantitative Information [Abstract] | ||
Impaired Loans | 2,588 | |
Nonrecurring [Member] | Level 3 [Member] | Residential 1st Mortgages [Member] | ||
Quantitative Information [Abstract] | ||
Impaired Loans | 1,584 | 1,403 |
Nonrecurring [Member] | Level 3 [Member] | Home Equity Lines and Loans [Member] | ||
Quantitative Information [Abstract] | ||
Impaired Loans | 61 | 142 |
Nonrecurring [Member] | Level 3 [Member] | Agricultural [Member] | ||
Quantitative Information [Abstract] | ||
Impaired Loans | 400 | 88 |
Nonrecurring [Member] | Level 3 [Member] | Commercial [Member] | ||
Quantitative Information [Abstract] | ||
Impaired Loans | 213 | 1,391 |
Nonrecurring [Member] | Level 3 [Member] | Consumer [Member] | ||
Quantitative Information [Abstract] | ||
Impaired Loans | 138 | 139 |
Nonrecurring [Member] | Level 3 [Member] | Real Estate Construction [Member] | ||
Quantitative Information [Abstract] | ||
Other Real Estate | $ 873 | $ 873 |
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Assets [Abstract] | ||
Investment Securities Available-for-Sale | $ 807,732 | $ 507,386 |
Carrying Amount [Member] | ||
Assets [Abstract] | ||
Cash and Cash Equivalents | 383,837 | 294,758 |
Investment Securities Available-for-Sale | 807,732 | 507,386 |
Investment Securities Held-to-Maturity | 68,933 | 60,229 |
Loans & Leases, Net | 3,040,730 | 2,618,015 |
Accrued Interest Receivable | 20,333 | 16,733 |
Liabilities [Abstract] | ||
Deposits | 4,060,267 | 3,278,019 |
Subordinated Debentures | 10,310 | 10,310 |
Accrued Interest Payable | 1,383 | 2,795 |
Estimated Fair Value [Member] | ||
Assets [Abstract] | ||
Cash and Cash Equivalents | 383,837 | 294,758 |
Investment Securities Available-for-Sale | 807,732 | 507,386 |
Investment Securities Held-to-Maturity | 70,049 | 61,097 |
Loans & Leases, Net | 3,045,911 | 2,584,805 |
Accrued Interest Receivable | 20,333 | 16,733 |
Liabilities [Abstract] | ||
Deposits | 4,061,240 | 3,277,269 |
Subordinated Debentures | 6,888 | 7,325 |
Accrued Interest Payable | 1,383 | 2,795 |
Estimated Fair Value [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets [Abstract] | ||
Cash and Cash Equivalents | 383,837 | 294,758 |
Investment Securities Available-for-Sale | 15,470 | 55,200 |
Investment Securities Held-to-Maturity | 0 | 0 |
Loans & Leases, Net | 0 | 0 |
Accrued Interest Receivable | 0 | 0 |
Liabilities [Abstract] | ||
Deposits | 3,638,400 | 2,760,097 |
Subordinated Debentures | 0 | 0 |
Accrued Interest Payable | 0 | 0 |
Estimated Fair Value [Member] | Other Observable Inputs (Level 2) [Member] | ||
Assets [Abstract] | ||
Cash and Cash Equivalents | 0 | 0 |
Investment Securities Available-for-Sale | 792,262 | 452,186 |
Investment Securities Held-to-Maturity | 26,262 | 31,253 |
Loans & Leases, Net | 0 | 0 |
Accrued Interest Receivable | 20,333 | 16,733 |
Liabilities [Abstract] | ||
Deposits | 0 | 0 |
Subordinated Debentures | 6,888 | 7,325 |
Accrued Interest Payable | 1,383 | 2,795 |
Estimated Fair Value [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Assets [Abstract] | ||
Cash and Cash Equivalents | 0 | 0 |
Investment Securities Available-for-Sale | 0 | 0 |
Investment Securities Held-to-Maturity | 43,787 | 29,844 |
Loans & Leases, Net | 3,045,911 | 2,584,805 |
Accrued Interest Receivable | 0 | 0 |
Liabilities [Abstract] | ||
Deposits | 422,840 | 517,172 |
Subordinated Debentures | 0 | 0 |
Accrued Interest Payable | $ 0 | $ 0 |
Commitments and Contingencies (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Commitments to Extend Credit [Member] | ||
Off Balance Sheet Commitments [Abstract] | ||
Off-balance sheet risks, amount, liability | $ 1,040,844 | $ 919,982 |
Letters of Credit [Member] | ||
Off Balance Sheet Commitments [Abstract] | ||
Off-balance sheet risks, amount, liability | $ 18,846 | 20,346 |
Letters of Credit [Member] | Minimum [Member] | ||
Off Balance Sheet Commitments [Abstract] | ||
Off balance sheet risks maturity period | 1 month | |
Letters of Credit [Member] | Maximum [Member] | ||
Off Balance Sheet Commitments [Abstract] | ||
Off balance sheet risks maturity period | 25 months | |
Performance Guarantees under Interest Rate Swap Contracts Entered into between our Borrowing Customers and Third Parties [Member] | ||
Off Balance Sheet Commitments [Abstract] | ||
Off-balance sheet risks, amount, liability | $ 2,786 | $ 1,513 |
Leases (Details) |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Dec. 31, 2020
USD ($)
Lease
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
|
Operating Leases [Abstract] | |||
Operating lease ROU assets | $ 4,800,000 | $ 4,800,000 | $ 4,980,000 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:InterestReceivableAndOtherAssets | us-gaap:InterestReceivableAndOtherAssets | us-gaap:InterestReceivableAndOtherAssets |
Operating lease liability | $ 4,918,000 | $ 4,918,000 | $ 5,030,000.00 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | fmcb:InterestPayableAndOtherLiabilities | fmcb:InterestPayableAndOtherLiabilities | fmcb:InterestPayableAndOtherLiabilities |
Operating lease cost | $ 833,000 | $ 836,000 | |
Number of leases modified | Lease | 1 | ||
Additional operating lease ROU assets resulting from modification of lease term and payment | $ 542,000 | 542,000 | |
Additional operating lease liabilities resulting from modification of lease term and payment | $ 542,000 | $ 542,000 | |
Minimum [Member] | |||
Operating Leases [Abstract] | |||
Remaining lease term | 1 year | 1 year | |
Lease extension option term | 5 years | 5 years | |
Maximum [Member] | |||
Operating Leases [Abstract] | |||
Remaining lease term | 10 years | 10 years | |
Lease extension option term | 10 years | 10 years |
Leases, Information Related to Operating Leases (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Cash Paid for Amounts Included in the Measurement of Lease Liabilities [Abstract] | ||
Operating Cash Flow from Operating Leases | $ 795 | $ 783 |
Right-of-Use Assets Obtained in Exchange for New Operating Lease Liabilities | $ 0 | $ 5,645 |
Weighted-Average Remaining Lease Term - Operating Leases | 7 years 3 months 29 days | 7 years 10 months 17 days |
Weighted-Average Discount Rate - Operating Leases | 2.90% | 3.20% |
Leases, Maturity of Remaining Lease Liability (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Maturity of Remaining Lease Liability [Abstract] | ||
2021 | $ 727 | |
2022 | 695 | |
2023 | 705 | |
2024 | 721 | |
2025 | 731 | |
2026 and thereafter | 1,907 | |
Total Lease Payments | 5,486 | |
Less: Interest | (568) | |
Present Value of Lease Liabilities | $ 4,918 | $ 5,030 |
Leases, Lessor - Direct Financing Leases (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Lessor - Direct Financing Leases [Abstract] | ||
Net investment in direct financing leases | $ 103.5 | $ 105.4 |
Minimum [Member] | ||
Lessor - Direct Financing Leases [Abstract] | ||
Term of direct financing leases | 3 years | |
Maximum [Member] | ||
Lessor - Direct Financing Leases [Abstract] | ||
Term of direct financing leases | 10 years |
Parent Company Financial Information, Condensed Balance Sheets (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|---|
Condensed Balance Sheets [Abstract] | ||||
Investment Securities | $ 876,665 | $ 567,615 | ||
Total Assets | 4,550,453 | 3,721,830 | ||
Subordinated Debentures | 10,310 | 10,310 | ||
Liabilities | 4,126,788 | 3,352,534 | ||
Shareholders' Equity | 423,665 | 369,296 | $ 311,215 | $ 299,660 |
Total Liabilities and Shareholders' Equity | 4,550,453 | 3,721,830 | ||
Parent Company [Member] | ||||
Condensed Balance Sheets [Abstract] | ||||
Cash | 4,551 | 1,341 | $ 335 | $ 332 |
Investment in Farmers & Merchants Bank of Central California | 429,037 | 378,271 | ||
Investment Securities | 434 | 411 | ||
Other Assets | 832 | 102 | ||
Total Assets | 434,854 | 380,125 | ||
Subordinated Debentures | 10,310 | 10,310 | ||
Liabilities | 879 | 519 | ||
Shareholders' Equity | 423,665 | 369,296 | ||
Total Liabilities and Shareholders' Equity | $ 434,854 | $ 380,125 |
Parent Company Financial Information, Condensed Statements of Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Condensed Statements of Income [Abstract] | |||||||||||
Interest Income | $ 40,621 | $ 37,699 | $ 35,415 | $ 35,426 | $ 35,654 | $ 35,280 | $ 35,373 | $ 34,207 | $ 149,161 | $ 140,514 | $ 125,503 |
Tax Benefit | (5,298) | (4,945) | (4,533) | (4,441) | (5,037) | (4,660) | (4,903) | (4,677) | (19,217) | (19,277) | (14,203) |
Net Income | $ 15,493 | $ 14,810 | $ 14,309 | $ 14,122 | $ 14,644 | $ 13,738 | $ 14,105 | $ 13,549 | 58,734 | 56,036 | 45,527 |
Parent Company [Member] | |||||||||||
Condensed Statements of Income [Abstract] | |||||||||||
Equity (Loss) in Undistributed Earnings in Farmers & Merchants Bank of Central California | 40,597 | 44,571 | (26,488) | ||||||||
Dividends from Subsidiary | 19,874 | 13,166 | 73,010 | ||||||||
Interest Income | 11 | 17 | 16 | ||||||||
Other Expenses, Net | (2,477) | (2,416) | (1,527) | ||||||||
Tax Benefit | 729 | 698 | 516 | ||||||||
Net Income | $ 58,734 | $ 56,036 | $ 45,527 |
Parent Company Financial Information, Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Cash Flows from Operating Activities [Abstract] | |||||||||||
Net Income | $ 15,493 | $ 14,810 | $ 14,309 | $ 14,122 | $ 14,644 | $ 13,738 | $ 14,105 | $ 13,549 | $ 58,734 | $ 56,036 | $ 45,527 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities [Abstract] | |||||||||||
Net Cash Provided by Operating Activities | 58,119 | 80,858 | 57,774 | ||||||||
Investing Activities [Abstract] | |||||||||||
Net Cash Used in Investing Activities | (736,754) | (135,630) | (205,089) | ||||||||
Financing Activities [Abstract] | |||||||||||
Stock Repurchased | (2,834) | 0 | (31,152) | ||||||||
Cash Dividends | (11,700) | (11,221) | (11,151) | ||||||||
Net Cash Provided by Financing Activities | 767,714 | 203,966 | 105,730 | ||||||||
Net Change in Cash and Cash Equivalents | 89,079 | 149,194 | (41,585) | ||||||||
Parent Company [Member] | |||||||||||
Cash Flows from Operating Activities [Abstract] | |||||||||||
Net Income | 58,734 | 56,036 | 45,527 | ||||||||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities [Abstract] | |||||||||||
(Equity) Loss in Undistributed Net Earnings from Subsidiary | (40,597) | (44,571) | 26,488 | ||||||||
Net (Increase) in Other Assets | (753) | (160) | (125) | ||||||||
Net Increase (Decrease) in Liabilities | 360 | 222 | (942) | ||||||||
Net Cash Provided by Operating Activities | 17,744 | 11,527 | 70,948 | ||||||||
Investing Activities [Abstract] | |||||||||||
Payments for Business Acquisition | 0 | 0 | (28,642) | ||||||||
Payments for Investments in Non-Qualified Retirement Plan | (403) | (6,273) | (10,503) | ||||||||
Net Cash Used in Investing Activities | (403) | (6,273) | (39,145) | ||||||||
Financing Activities [Abstract] | |||||||||||
Stock Repurchased | (2,834) | 0 | (31,152) | ||||||||
Issuance of Common Stock | 403 | 6,973 | 10,503 | ||||||||
Cash Dividends | (11,700) | (11,221) | (11,151) | ||||||||
Net Cash Provided by Financing Activities | (14,131) | (4,248) | (31,800) | ||||||||
Net Change in Cash and Cash Equivalents | 3,210 | 1,006 | 3 | ||||||||
Cash and Cash Equivalents at Beginning of Year | $ 1,341 | $ 335 | 1,341 | 335 | 332 | ||||||
Cash and Cash Equivalents at End of Year | $ 4,551 | $ 1,341 | $ 4,551 | $ 1,341 | $ 335 |
Quarterly Unaudited Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Quarterly Unaudited Financial Data [Abstract] | |||||||||||
Total Interest Income | $ 42,203 | $ 39,793 | $ 37,967 | $ 38,689 | $ 39,099 | $ 38,810 | $ 38,626 | $ 37,173 | $ 158,652 | $ 153,708 | $ 133,453 |
Total Interest Expense | 1,582 | 2,094 | 2,552 | 3,263 | 3,445 | 3,530 | 3,253 | 2,966 | 9,491 | 13,194 | 7,950 |
Net Interest Income | 40,621 | 37,699 | 35,415 | 35,426 | 35,654 | 35,280 | 35,373 | 34,207 | 149,161 | 140,514 | 125,503 |
Provision for Credit Losses | 2,500 | 1,700 | 300 | 0 | 0 | 0 | 200 | 0 | 4,500 | 200 | 5,533 |
Net Interest Income After Provision for Credit Losses | 38,121 | 35,999 | 35,115 | 35,426 | 35,654 | 35,280 | 35,173 | 34,207 | 144,661 | 140,314 | 119,970 |
Total Non-Interest Income | 4,716 | 4,539 | 3,514 | 2,927 | 4,403 | 3,974 | 4,400 | 4,464 | 15,696 | 17,241 | 15,219 |
Total Non-Interest Expense | 22,046 | 20,783 | 19,787 | 19,790 | 20,376 | 20,856 | 20,565 | 20,445 | 82,406 | 82,242 | 75,459 |
Income Before Provision for Income Taxes | 20,791 | 19,755 | 18,842 | 18,563 | 19,681 | 18,398 | 19,008 | 18,226 | 77,951 | 75,313 | 59,730 |
Provision for Income Taxes | 5,298 | 4,945 | 4,533 | 4,441 | 5,037 | 4,660 | 4,903 | 4,677 | 19,217 | 19,277 | 14,203 |
Net Income | $ 15,493 | $ 14,810 | $ 14,309 | $ 14,122 | $ 14,644 | $ 13,738 | $ 14,105 | $ 13,549 | $ 58,734 | $ 56,036 | $ 45,527 |
Basic and Diluted Earnings Per Common Share (in dollars per share) | $ 19.54 | $ 18.66 | $ 18.03 | $ 17.80 | $ 18.54 | $ 17.45 | $ 17.92 | $ 17.27 | $ 74.03 | $ 71.18 | $ 56.82 |
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