þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Connecticut | 20-8251355 | |
(State or other jurisdiction of | (I.R.S. Employer | |
Incorporation or organization) | Identification No.) |
Large accelerated filer ¨ | Accelerated filer þ |
Non-accelerated filer ¨ | Smaller reporting company ¨ |
Emerging growth company þ |
Certifications |
September 30, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Cash and due from banks | $ | 84,437 | $ | 70,545 | |||
Federal funds sold | 2,664 | 186 | |||||
Cash and cash equivalents | 87,101 | 70,731 | |||||
Available for sale investment securities, at fair value | 94,438 | 92,188 | |||||
Held to maturity investment securities, at amortized cost | 21,464 | 21,579 | |||||
Loans receivable (net of allowance for loan losses of $19,311 at September 30, 2018 and $18,904 at December 31, 2017) | 1,585,465 | 1,520,879 | |||||
Accrued interest receivable | 6,055 | 5,910 | |||||
Federal Home Loan Bank stock, at cost | 9,210 | 9,183 | |||||
Premises and equipment, net | 20,245 | 18,196 | |||||
Bank-owned life insurance | 40,413 | 39,618 | |||||
Goodwill | 2,589 | 2,589 | |||||
Other intangible assets | 309 | 382 | |||||
Deferred income taxes, net | 4,583 | 4,904 | |||||
Other assets | 13,164 | 10,448 | |||||
Total assets | $ | 1,885,036 | $ | 1,796,607 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Liabilities | |||||||
Deposits | |||||||
Noninterest bearing deposits | $ | 162,473 | $ | 172,638 | |||
Interest bearing deposits | 1,330,696 | 1,225,767 | |||||
Total deposits | 1,493,169 | 1,398,405 | |||||
Advances from the Federal Home Loan Bank | 180,000 | 199,000 | |||||
Subordinated debentures | 25,142 | 25,103 | |||||
Accrued expenses and other liabilities | 11,971 | 13,072 | |||||
Total liabilities | 1,710,282 | 1,635,580 | |||||
Commitments and contingencies | |||||||
Shareholders' equity | |||||||
Common stock, no par value; 10,000,000 shares authorized, 7,842,996 and 7,751,424 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 120,188 | 118,301 | |||||
Retained earnings | 52,386 | 41,032 | |||||
Accumulated other comprehensive income | 2,180 | 1,694 | |||||
Total shareholders' equity | 174,754 | 161,027 | |||||
Total liabilities and shareholders' equity | $ | 1,885,036 | $ | 1,796,607 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Interest and dividend income | |||||||||||||||
Interest and fees on loans | $ | 19,153 | $ | 17,175 | $ | 54,685 | $ | 49,348 | |||||||
Interest and dividends on securities | 1,002 | 934 | 2,912 | 2,623 | |||||||||||
Interest on cash and cash equivalents | 345 | 239 | 924 | 501 | |||||||||||
Total interest income | 20,500 | 18,348 | 58,521 | 52,472 | |||||||||||
Interest expense | |||||||||||||||
Interest expense on deposits | 5,044 | 3,416 | 13,009 | 9,092 | |||||||||||
Interest on borrowings | 1,210 | 1,071 | 3,653 | 2,930 | |||||||||||
Total interest expense | 6,254 | 4,487 | 16,662 | 12,022 | |||||||||||
Net interest income | 14,246 | 13,861 | 41,859 | 40,450 | |||||||||||
Provision for loan losses | 322 | 398 | 645 | 1,836 | |||||||||||
Net interest income after provision for loan losses | 13,924 | 13,463 | 41,214 | 38,614 | |||||||||||
Noninterest income | |||||||||||||||
Service charges and fees | 285 | 254 | 806 | 755 | |||||||||||
Bank owned life insurance | 267 | 295 | 795 | 881 | |||||||||||
Gains and fees from sales of loans | 150 | 36 | 835 | 559 | |||||||||||
Net gain on sale of available for sale securities | — | — | 222 | 165 | |||||||||||
Other | 157 | 239 | 641 | 728 | |||||||||||
Total noninterest income | 859 | 824 | 3,299 | 3,088 | |||||||||||
Noninterest expense | |||||||||||||||
Salaries and employee benefits | 4,903 | 3,952 | 14,470 | 11,681 | |||||||||||
Occupancy and equipment | 1,771 | 1,449 | 5,119 | 4,580 | |||||||||||
Data processing | 512 | 621 | 1,546 | 1,467 | |||||||||||
Marketing | 395 | 295 | 1,171 | 872 | |||||||||||
Professional services | 321 | 680 | 1,520 | 1,615 | |||||||||||
Director fees | 260 | 207 | 749 | 683 | |||||||||||
FDIC insurance | 203 | 265 | 620 | 891 | |||||||||||
Amortization of intangibles | 24 | 31 | 72 | 93 | |||||||||||
Other | 481 | 629 | 1,570 | 2,062 | |||||||||||
Total noninterest expense | 8,870 | 8,129 | 26,837 | 23,944 | |||||||||||
Income before income tax expense | 5,913 | 6,158 | 17,676 | 17,758 | |||||||||||
Income tax expense | 1,056 | 1,895 | 3,504 | 6,024 | |||||||||||
Net income | $ | 4,857 | $ | 4,263 | $ | 14,172 | $ | 11,734 | |||||||
Earnings Per Common Share: | |||||||||||||||
Basic | $ | 0.62 | $ | 0.55 | $ | 1.81 | $ | 1.53 | |||||||
Diluted | $ | 0.62 | $ | 0.55 | $ | 1.80 | $ | 1.51 | |||||||
Weighted Average Common Shares Outstanding: | |||||||||||||||
Basic | 7,738,343 | 7,587,471 | 7,712,924 | 7,554,739 | |||||||||||
Diluted | 7,763,935 | 7,670,258 | 7,758,762 | 7,652,355 | |||||||||||
Dividends per common share | $ | 0.12 | $ | 0.07 | $ | 0.36 | $ | 0.21 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 4,857 | $ | 4,263 | $ | 14,172 | $ | 11,734 | |||||||
Other comprehensive income: | |||||||||||||||
Unrealized (losses) gains on securities: | |||||||||||||||
Unrealized holding (losses) gains on available for sale securities | (643 | ) | 25 | (2,762 | ) | 478 | |||||||||
Reclassification adjustment for gain realized in net income | — | — | (222 | ) | (165 | ) | |||||||||
Net change in unrealized (losses) gains | (643 | ) | 25 | (2,984 | ) | 313 | |||||||||
Income tax benefit (expense) | 135 | (9 | ) | 627 | (110 | ) | |||||||||
Unrealized (losses) gains on securities, net of tax | (508 | ) | 16 | (2,357 | ) | 203 | |||||||||
Unrealized gains on interest rate swaps: | |||||||||||||||
Unrealized gains on interest rate swaps | 1,784 | 327 | 3,599 | 243 | |||||||||||
Income tax expense | (375 | ) | (114 | ) | (756 | ) | (85 | ) | |||||||
Unrealized gains on interest rate swaps, net of tax | 1,409 | 213 | 2,843 | 158 | |||||||||||
Total other comprehensive income, net of tax | 901 | 229 | 486 | 361 | |||||||||||
Comprehensive income | $ | 5,758 | $ | 4,492 | $ | 14,658 | $ | 12,095 |
Number of Outstanding Shares | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income | Total | ||||||||||||||
Balance at December 31, 2017 | 7,751,424 | $ | 118,301 | $ | 41,032 | $ | 1,694 | $ | 161,027 | |||||||||
Net income | — | — | 14,172 | — | 14,172 | |||||||||||||
Other comprehensive income, net of tax | — | — | — | 486 | 486 | |||||||||||||
Cash dividends declared ($0.36 per share) | — | — | (2,818 | ) | — | (2,818 | ) | |||||||||||
Stock-based compensation expense | — | 964 | — | — | 964 | |||||||||||||
Forfeitures of restricted stock | (1,498 | ) | — | — | — | — | ||||||||||||
Warrants exercised | 22,400 | 400 | — | — | 400 | |||||||||||||
Issuance of restricted stock | 43,550 | — | — | — | — | |||||||||||||
Stock options exercised | 27,120 | 523 | — | — | 523 | |||||||||||||
Balance at September 30, 2018 | 7,842,996 | $ | 120,188 | $ | 52,386 | $ | 2,180 | $ | 174,754 |
Number of Outstanding Shares | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income | Total | ||||||||||||||
Balance at December 31, 2016 | 7,620,663 | $ | 115,353 | $ | 29,652 | $ | 890 | $ | 145,895 | |||||||||
Net income | — | — | 11,734 | — | 11,734 | |||||||||||||
Other comprehensive income, net of tax | — | — | — | 361 | 361 | |||||||||||||
Cash dividends declared ($0.21 per share) | — | — | (1,609 | ) | — | (1,609 | ) | |||||||||||
Stock-based compensation expense | — | 671 | — | — | 671 | |||||||||||||
Forfeitures of restricted stock | (15,549 | ) | — | — | — | — | ||||||||||||
Issuance of restricted stock | 30,250 | — | — | — | — | |||||||||||||
Warrants exercised | 30,800 | 550 | — | — | 550 | |||||||||||||
Stock options exercised | 39,811 | 715 | — | — | 715 | |||||||||||||
Balance at September 30, 2017 | 7,705,975 | $ | 117,289 | $ | 39,777 | $ | 1,251 | $ | 158,317 |
Nine Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities | |||||||
Net income | $ | 14,172 | $ | 11,734 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Net accretion of premiums and discounts on investment securities | (38 | ) | (22 | ) | |||
Provision for loan losses | 645 | 1,836 | |||||
Provision for deferred taxes | 192 | 56 | |||||
Net gain on sales of available for sale securities | (222 | ) | (165 | ) | |||
Depreciation and amortization | 1,259 | 1,034 | |||||
Amortization of debt issuance costs | 39 | 39 | |||||
Increase in cash surrender value of bank-owned life insurance | (795 | ) | (881 | ) | |||
Loan principal sold from loans originated for sale | — | (1,897 | ) | ||||
Proceeds from sales of loans originated for sale | — | 1,384 | |||||
Net gain on sales of loans | (835 | ) | (559 | ) | |||
Stock-based compensation | 964 | 671 | |||||
Net amortization (accretion) of purchase accounting adjustments | 259 | (67 | ) | ||||
Loss on sale of premises and equipment | 44 | — | |||||
Gain on sale and write-downs of foreclosed real estate | — | 50 | |||||
Net change in: | |||||||
Deferred loan fees | (391 | ) | (655 | ) | |||
Accrued interest receivable | (145 | ) | (386 | ) | |||
Other assets | 1,028 | (6,101 | ) | ||||
Accrued expenses and other liabilities | (1,101 | ) | 7,804 | ||||
Net cash provided by operating activities | 15,075 | 13,875 | |||||
Cash flows from investing activities | |||||||
Proceeds from principal repayments on available for sale securities | 7,015 | 3,452 | |||||
Proceeds from principal repayments on held to maturity securities | 132 | 146 | |||||
Net proceeds from sales and calls of available for sale securities | 12,377 | 52,810 | |||||
Purchases of available for sale securities | (24,382 | ) | (54,290 | ) | |||
Purchase of held to maturity securities | — | (6,852 | ) | ||||
Purchase of bank-owned life insurance | — | (5,000 | ) | ||||
Net increase in loans | (65,172 | ) | (157,901 | ) | |||
Loan principal sold from loans not originated for sale | (7,208 | ) | (14,264 | ) | |||
Proceeds from sales of loans not originated for sale | 8,043 | 14,805 | |||||
Purchases of premises and equipment | (3,353 | ) | (708 | ) | |||
Purchase of Federal Home Loan Bank stock | (27 | ) | (1,408 | ) | |||
Net cash used in investing activities | (72,575 | ) | (169,210 | ) |
Nine Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Cash flows from financing activities | |||||||
Net change in time certificates of deposit | $ | 11,176 | $ | 45,215 | |||
Net change in other deposits | 83,589 | 75,555 | |||||
Net change in FHLB advances | (19,000 | ) | 35,000 | ||||
Proceeds from exercise of warrants | 400 | 550 | |||||
Proceeds from exercise of options | 523 | 715 | |||||
Dividends paid on common stock | (2,818 | ) | (1,609 | ) | |||
Net cash provided by financing activities | 73,870 | 155,426 | |||||
Net increase in cash and cash equivalents | 16,370 | 91 | |||||
Cash and cash equivalents: | |||||||
Beginning of year | 70,731 | 96,355 | |||||
End of period | $ | 87,101 | $ | 96,446 | |||
Supplemental disclosures of cash flows information: | |||||||
Cash paid for: | |||||||
Interest | $ | 16,855 | $ | 11,798 | |||
Income taxes | 3,065 | 6,215 | |||||
Noncash investing and financing activities | |||||||
Net change in unrealized gains or losses on available-for-sale securities | (2,984 | ) | 313 |
September 30, 2018 | |||||||||||||||
Amortized Cost | Gross Unrealized | Fair Value | |||||||||||||
Gains | Losses | ||||||||||||||
(In thousands) | |||||||||||||||
Available for sale securities: | |||||||||||||||
U.S. Government and agency obligations | |||||||||||||||
Due from one through five years | $ | 13,018 | $ | — | $ | (331 | ) | $ | 12,687 | ||||||
Due from five through ten years | 100 | — | (8 | ) | 92 | ||||||||||
Due after ten years | 73,094 | — | (2,403 | ) | 70,691 | ||||||||||
86,212 | — | (2,742 | ) | 83,470 | |||||||||||
State agency and municipal obligations | |||||||||||||||
Due from one through five years | 2,221 | 4 | (5 | ) | 2,220 | ||||||||||
Due from five through ten years | 1,255 | 11 | (3 | ) | 1,263 | ||||||||||
Due after ten years | 554 | — | (67 | ) | 487 | ||||||||||
4,030 | 15 | (75 | ) | 3,970 | |||||||||||
Corporate bonds | |||||||||||||||
Due from one through five years | 7,070 | — | (72 | ) | 6,998 | ||||||||||
Total available for sale securities | $ | 97,312 | $ | 15 | $ | (2,889 | ) | $ | 94,438 | ||||||
Held to maturity securities: | |||||||||||||||
State agency and municipal obligations | |||||||||||||||
Less than one year | $ | 3,891 | $ | 9 | $ | — | $ | 3,900 | |||||||
Due after ten years | 16,476 | 509 | (377 | ) | 16,608 | ||||||||||
20,367 | 518 | (377 | ) | 20,508 | |||||||||||
Corporate bonds | |||||||||||||||
Due from one through five years | 1,000 | — | (5 | ) | 995 | ||||||||||
Government-sponsored mortgage backed securities | |||||||||||||||
No contractual maturity | 97 | 6 | — | 103 | |||||||||||
Total held to maturity securities | $ | 21,464 | $ | 524 | $ | (382 | ) | $ | 21,606 |
December 31, 2017 | |||||||||||||||
Amortized Cost | Gross Unrealized | Fair Value | |||||||||||||
Gains | Losses | ||||||||||||||
(In thousands) | |||||||||||||||
Available for sale securities: | |||||||||||||||
U.S. Government and agency obligations | |||||||||||||||
Due from one through five years | $ | 13,000 | $ | — | $ | (82 | ) | $ | 12,918 | ||||||
Due from five through ten years | 100 | — | (4 | ) | 96 | ||||||||||
Due after ten years | 59,924 | 10 | (174 | ) | 59,760 | ||||||||||
73,024 | 10 | (260 | ) | 72,774 | |||||||||||
State agency and municipal obligations | |||||||||||||||
Due from one through five years | 2,873 | 84 | — | 2,957 | |||||||||||
Due from five through ten years | 7,386 | 228 | — | 7,614 | |||||||||||
Due after ten years | 1,700 | 33 | (27 | ) | 1,706 | ||||||||||
11,959 | 345 | (27 | ) | 12,277 | |||||||||||
Corporate bonds | |||||||||||||||
Due from one through five years | 7,096 | 41 | — | 7,137 | |||||||||||
Total available for sale securities | $ | 92,079 | $ | 396 | $ | (287 | ) | $ | 92,188 | ||||||
Held to maturity securities: | |||||||||||||||
State agency and municipal obligations | |||||||||||||||
Less than one year | $ | 198 | $ | 5 | $ | — | $ | 203 | |||||||
Due from one through five years | 3,880 | 20 | — | 3,900 | |||||||||||
Due after ten years | 16,387 | 1,227 | — | 17,614 | |||||||||||
20,465 | 1,252 | — | 21,717 | ||||||||||||
Corporate bonds | |||||||||||||||
Due from one through five years | 1,000 | — | (5 | ) | 995 | ||||||||||
Government-sponsored mortgage backed securities | |||||||||||||||
No contractual maturity | 114 | 10 | — | 124 | |||||||||||
Total held to maturity securities | $ | 21,579 | $ | 1,262 | $ | (5 | ) | $ | 22,836 |
Length of Time in Continuous Unrealized Loss Position | ||||||||||||||||||||||||||||||||
Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||||||||||
Fair Value | Unrealized Loss | Percent Decline from Amortized Cost | Fair Value | Unrealized Loss | Percent Decline from Amortized Cost | Fair Value | Unrealized Loss | Percent Decline from Amortized Cost | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
September 30, 2018 | ||||||||||||||||||||||||||||||||
U.S. Government and agency obligations | $ | 68,137 | $ | (2,126 | ) | 3.03 | % | $ | 15,333 | $ | (616 | ) | 3.86 | % | $ | 83,470 | $ | (2,742 | ) | 3.18 | % | |||||||||||
State agency and municipal obligations | 12,796 | (385 | ) | 2.93 | % | 487 | (67 | ) | 12.07 | % | 13,283 | (452 | ) | 3.29 | % | |||||||||||||||||
Corporate bonds | 6,998 | (72 | ) | 1.01 | % | 995 | (5 | ) | 0.50 | % | 7,993 | (77 | ) | 0.95 | % | |||||||||||||||||
Total investment securities | $ | 87,931 | $ | (2,583 | ) | 2.85 | % | $ | 16,815 | $ | (688 | ) | 3.93 | % | $ | 104,746 | $ | (3,271 | ) | 3.03 | % | |||||||||||
December 31, 2017 | ||||||||||||||||||||||||||||||||
U.S. Government and agency obligations | $ | 70,419 | $ | (225 | ) | 0.32 | % | $ | 2,064 | $ | (35 | ) | 1.67 | % | $ | 72,483 | $ | (260 | ) | 0.36 | % | |||||||||||
State agency and municipal obligations | 92 | — | 0.16 | % | 656 | (27 | ) | 3.95 | % | 748 | (27 | ) | 3.50 | % | ||||||||||||||||||
Corporate bonds | — | — | — | % | 995 | (5 | ) | 0.50 | % | 995 | (5 | ) | 0.50 | % | ||||||||||||||||||
Total investment securities | $ | 70,511 | $ | (225 | ) | 0.32 | % | $ | 3,715 | $ | (67 | ) | 1.77 | % | $ | 74,226 | $ | (292 | ) | 0.39 | % |
(In thousands) | September 30, 2018 | December 31, 2017 | |||||
Real estate loans: | |||||||
Residential | $ | 182,740 | $ | 193,524 | |||
Commercial | 1,057,484 | 987,242 | |||||
Construction | 93,941 | 101,636 | |||||
1,334,165 | 1,282,402 | ||||||
Commercial business | 273,065 | 259,995 | |||||
Consumer | 389 | 619 | |||||
Total loans | 1,607,619 | 1,543,016 | |||||
Allowance for loan losses | (19,311 | ) | (18,904 | ) | |||
Deferred loan origination fees, net | (2,851 | ) | (3,242 | ) | |||
Unamortized loan premiums | 8 | 9 | |||||
Loans receivable, net | $ | 1,585,465 | $ | 1,520,879 |
Residential Real Estate | Commercial Real Estate | Construction | Commercial Business | Consumer | Total | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Three Months Ended September 30, 2018 | |||||||||||||||||||||||
Beginning balance | $ | 750 | $ | 14,185 | $ | 481 | $ | 3,589 | $ | 1 | $ | 19,006 | |||||||||||
Charge-offs | (16 | ) | — | — | — | (2 | ) | (18 | ) | ||||||||||||||
Recoveries | — | — | — | — | 1 | 1 | |||||||||||||||||
Provisions (Credits) | 349 | (114 | ) | (122 | ) | 208 | 1 | 322 | |||||||||||||||
Ending balance | $ | 1,083 | $ | 14,071 | $ | 359 | $ | 3,797 | $ | 1 | $ | 19,311 |
Residential Real Estate | Commercial Real Estate | Construction | Commercial Business | Consumer | Total | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Three Months Ended September 30, 2017 | |||||||||||||||||||||||
Beginning balance | $ | 1,633 | $ | 9,695 | $ | 2,268 | $ | 5,564 | $ | 376 | $ | 19,536 | |||||||||||
Charge-offs | — | — | — | (366 | ) | (10 | ) | (376 | ) | ||||||||||||||
Recoveries | — | — | — | 4 | 2 | 6 | |||||||||||||||||
(Credits) Provisions | (20 | ) | 15 | (75 | ) | 494 | (16 | ) | 398 | ||||||||||||||
Ending balance | $ | 1,613 | $ | 9,710 | $ | 2,193 | $ | 5,696 | $ | 352 | $ | 19,564 |
Residential Real Estate | Commercial Real Estate | Construction | Commercial Business | Consumer | Total | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Nine Months Ended September 30, 2018 | |||||||||||||||||||||||
Beginning balance | $ | 1,721 | $ | 12,777 | $ | 907 | $ | 3,498 | $ | 1 | $ | 18,904 | |||||||||||
Charge-offs | (72 | ) | (18 | ) | — | (96 | ) | (62 | ) | (248 | ) | ||||||||||||
Recoveries | — | — | — | 4 | 6 | 10 | |||||||||||||||||
(Credits) Provisions | (566 | ) | 1,312 | (548 | ) | 391 | 56 | 645 | |||||||||||||||
Ending balance | $ | 1,083 | $ | 14,071 | $ | 359 | $ | 3,797 | $ | 1 | $ | 19,311 |
Residential Real Estate | Commercial Real Estate | Construction | Commercial Business | Consumer | Total | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Nine Months Ended September 30, 2017 | |||||||||||||||||||||||
Beginning balance | $ | 1,654 | $ | 9,563 | $ | 2,105 | $ | 4,283 | $ | 377 | $ | 17,982 | |||||||||||
Charge-offs | — | — | — | (366 | ) | (41 | ) | (407 | ) | ||||||||||||||
Recoveries | 146 | — | — | 4 | 3 | 153 | |||||||||||||||||
(Credits) Provisions | (187 | ) | 147 | 88 | 1,775 | 13 | 1,836 | ||||||||||||||||
Ending balance | $ | 1,613 | $ | 9,710 | $ | 2,193 | $ | 5,696 | $ | 352 | $ | 19,564 |
Portfolio | Allowance | ||||||
(In thousands) | |||||||
September 30, 2018 | |||||||
Loans individually evaluated for impairment: | |||||||
Residential real estate | $ | 6,893 | $ | 354 | |||
Commercial real estate | 20,496 | 2,530 | |||||
Commercial business | 6,942 | 743 | |||||
Consumer | 4 | — | |||||
Subtotal | 34,335 | 3,627 | |||||
Loans collectively evaluated for impairment: | |||||||
Residential real estate | 175,847 | 729 | |||||
Commercial real estate | 1,036,988 | 11,541 | |||||
Construction | 93,941 | 359 | |||||
Commercial business | 266,123 | 3,054 | |||||
Consumer | 385 | 1 | |||||
Subtotal | 1,573,284 | 15,684 | |||||
Total | $ | 1,607,619 | $ | 19,311 |
Portfolio | Allowance | ||||||
(In thousands) | |||||||
December 31, 2017 | |||||||
Loans individually evaluated for impairment: | |||||||
Residential real estate | $ | 4,607 | $ | 8 | |||
Commercial real estate | 7,586 | 876 | |||||
Commercial business | 2,660 | 71 | |||||
Subtotal | 14,853 | 955 | |||||
Loans collectively evaluated for impairment: | |||||||
Residential real estate | 188,917 | 1,713 | |||||
Commercial real estate | 979,656 | 11,901 | |||||
Construction | 101,636 | 907 | |||||
Commercial business | 257,335 | 3,427 | |||||
Consumer | 619 | 1 | |||||
Subtotal | 1,528,163 | 17,949 | |||||
Total | $ | 1,543,016 | $ | 18,904 |
Commercial Credit Quality Indicators | |||||||||||||||||||||||||||||||
September 30, 2018 | December 31, 2017 | ||||||||||||||||||||||||||||||
Commercial Real Estate | Construction | Commercial Business | Total | Commercial Real Estate | Construction | Commercial Business | Total | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||
Pass | $ | 1,034,536 | $ | 83,456 | $ | 247,715 | $ | 1,365,707 | $ | 960,902 | $ | 101,636 | $ | 252,570 | $ | 1,315,108 | |||||||||||||||
Special Mention | 2,452 | 10,485 | 18,408 | 31,345 | 9,371 | — | 4,019 | 13,390 | |||||||||||||||||||||||
Substandard | 20,370 | — | 6,840 | 27,210 | 16,969 | — | 3,297 | 20,266 | |||||||||||||||||||||||
Doubtful | 126 | — | 102 | 228 | — | — | 109 | 109 | |||||||||||||||||||||||
Total loans | $ | 1,057,484 | $ | 93,941 | $ | 273,065 | $ | 1,424,490 | $ | 987,242 | $ | 101,636 | $ | 259,995 | $ | 1,348,873 |
Residential and Consumer Credit Quality Indicators | |||||||||||||||||||||||
September 30, 2018 | December 31, 2017 | ||||||||||||||||||||||
Residential Real Estate | Consumer | Total | Residential Real Estate | Consumer | Total | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Pass | $ | 175,592 | $ | 385 | $ | 175,977 | $ | 188,917 | $ | 619 | $ | 189,536 | |||||||||||
Special Mention | 255 | — | 255 | — | — | — | |||||||||||||||||
Substandard | 6,893 | 4 | 6,897 | 4,607 | — | 4,607 | |||||||||||||||||
Total loans | $ | 182,740 | $ | 389 | $ | 183,129 | $ | 193,524 | $ | 619 | $ | 194,143 |
September 30, 2018 | |||||||||||||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | 90 Days or Greater Past Due | Total Past Due | Current | Total Loans | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Real estate loans: | |||||||||||||||||||||||
Residential real estate | $ | — | $ | 1,014 | $ | 3,313 | $ | 4,327 | $ | 178,413 | $ | 182,740 | |||||||||||
Commercial real estate | 87 | 186 | 10,079 | 10,352 | 1,047,132 | 1,057,484 | |||||||||||||||||
Construction | — | — | — | — | 93,941 | 93,941 | |||||||||||||||||
Commercial business | 30 | 81 | 4,857 | 4,968 | 268,097 | 273,065 | |||||||||||||||||
Consumer | — | — | — | — | 389 | 389 | |||||||||||||||||
Total loans | $ | 117 | $ | 1,281 | $ | 18,249 | $ | 19,647 | $ | 1,587,972 | $ | 1,607,619 |
December 31, 2017 | |||||||||||||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | 90 Days or Greater Past Due | Total Past Due | Current | Total Loans | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Real estate loans: | |||||||||||||||||||||||
Residential real estate | $ | 1,248 | $ | 2,244 | $ | 1,161 | $ | 4,653 | $ | 188,871 | $ | 193,524 | |||||||||||
Commercial real estate | 10,028 | 4,116 | 2,074 | 16,218 | 971,024 | 987,242 | |||||||||||||||||
Construction | — | — | — | — | 101,636 | 101,636 | |||||||||||||||||
Commercial business | 4,318 | 162 | 481 | 4,961 | 255,034 | 259,995 | |||||||||||||||||
Consumer | 3 | — | 2 | 5 | 614 | 619 | |||||||||||||||||
Total loans | $ | 15,597 | $ | 6,522 | $ | 3,718 | $ | 25,837 | $ | 1,517,179 | $ | 1,543,016 |
September 30, 2018 | December 31, 2017 | ||||||
(In thousands) | |||||||
Residential real estate | $ | 4,725 | $ | 1,590 | |||
Commercial real estate | 12,182 | 3,371 | |||||
Commercial business | 5,057 | 520 | |||||
Total | $ | 21,964 | $ | 5,481 |
Carrying Amount | Unpaid Principal Balance | Associated Allowance | |||||||||||||||||||||
September 30, 2018 | December 31, 2017 | September 30, 2018 | December 31, 2017 | September 30, 2018 | December 31, 2017 | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Impaired loans without a valuation allowance: | |||||||||||||||||||||||
Residential real estate | $ | 4,666 | $ | 3,515 | $ | 4,724 | $ | 3,556 | $ | — | $ | — | |||||||||||
Commercial real estate | 9,467 | 1,841 | 9,651 | 1,915 | — | — | |||||||||||||||||
Commercial business | 1,928 | 1,950 | 1,988 | 2,024 | — | — | |||||||||||||||||
Consumer | 4 | — | 4 | — | — | — | |||||||||||||||||
Total impaired loans without a valuation allowance | 16,065 | 7,306 | 16,367 | 7,495 | — | — | |||||||||||||||||
Impaired loans with a valuation allowance: | |||||||||||||||||||||||
Residential real estate | $ | 2,227 | $ | 1,092 | $ | 2,266 | $ | 1,092 | $ | 354 | $ | 8 | |||||||||||
Commercial real estate | 11,029 | 5,745 | 11,049 | 5,745 | 2,530 | 876 | |||||||||||||||||
Commercial business | 5,014 | 710 | 5,061 | 712 | 743 | 71 | |||||||||||||||||
Total impaired loans with a valuation allowance | 18,270 | 7,547 | 18,376 | 7,549 | 3,627 | 955 | |||||||||||||||||
Total impaired loans | $ | 34,335 | $ | 14,853 | $ | 34,743 | $ | 15,044 | $ | 3,627 | $ | 955 |
Average Carrying Amount | Interest Income Recognized | ||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(In thousands) | |||||||||||||||
Impaired loans without a valuation allowance: | |||||||||||||||
Residential real estate | $ | 4,932 | $ | 2,701 | $ | 24 | $ | — | |||||||
Commercial real estate | 9,530 | 7,579 | 79 | 92 | |||||||||||
Commercial business | 1,961 | 3,730 | 77 | 20 | |||||||||||
Consumer | 4 | — | — | — | |||||||||||
Total impaired loans without a valuation allowance | 16,427 | 14,010 | 180 | 112 | |||||||||||
Impaired loans with a valuation allowance: | |||||||||||||||
Residential real estate | 2,237 | — | — | — | |||||||||||
Commercial real estate | 11,033 | 144 | 16 | — | |||||||||||
Commercial business | 4,536 | 823 | 3 | 11 | |||||||||||
Consumer | — | 345 | — | — | |||||||||||
Total impaired loans with a valuation allowance | 17,806 | 1,312 | 19 | 11 | |||||||||||
Total impaired loans | $ | 34,233 | $ | 15,322 | $ | 199 | $ | 123 |
Average Carrying Amount | Interest Income Recognized | ||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(In thousands) | |||||||||||||||
Impaired loans without a valuation allowance: | |||||||||||||||
Residential real estate | $ | 5,101 | $ | 2,712 | $ | 87 | $ | — | |||||||
Commercial real estate | 9,638 | 7,675 | 159 | 115 | |||||||||||
Commercial business | 2,028 | 4,112 | 231 | 33 | |||||||||||
Consumer | 4 | — | — | — | |||||||||||
Total impaired loans without a valuation allowance | 16,771 | 14,499 | 477 | 148 | |||||||||||
Impaired loans with a valuation allowance: | |||||||||||||||
Residential real estate | 2,250 | — | 14 | — | |||||||||||
Commercial real estate | 11,047 | 144 | 69 | — | |||||||||||
Commercial business | 3,283 | 1,032 | 27 | 21 | |||||||||||
Consumer | — | 345 | — | — | |||||||||||
Total impaired loans with a valuation allowance | 16,580 | 1,521 | 110 | 21 | |||||||||||
Total impaired loans | $ | 33,351 | $ | 16,020 | $ | 587 | $ | 169 |
Outstanding Recorded Investment | ||||||||||||||||||||||
Number of Loans | Pre-Modification | Post-Modification | ||||||||||||||||||||
(Dollars in thousands) | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Three Months Ended September 30, | ||||||||||||||||||||||
Residential real estate | — | 1 | $ | — | $ | 1,925 | $ | — | $ | 1,925 | ||||||||||||
Commercial business | — | 1 | — | 60 | — | 60 | ||||||||||||||||
Commercial real estate | 1 | — | 608 | — | 608 | — | — | |||||||||||||||
Total | 1 | 2 | $ | 608 | $ | 1,985 | $ | 608 | $ | 1,985 |
Outstanding Recorded Investment | |||||||||||||||||||||
Number of Loans | Pre-Modification | Post-Modification | |||||||||||||||||||
(Dollars in thousands) | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||
Residential real estate | 2 | 2 | $ | 2,826 | $ | 2,965 | $ | 2,822 | $ | 2,965 | |||||||||||
Commercial business | 1 | 3 | 37 | 405 | 29 | 405 | |||||||||||||||
Commercial real estate | 1 | — | 608 | — | 608 | — | |||||||||||||||
Total | 4 | 5 | $ | 3,471 | $ | 3,370 | $ | 3,459 | $ | 3,370 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(In thousands) | |||||||||||||||
Payment concession | $ | — | $ | 1,925 | $ | 2,101 | $ | 2,029 | |||||||
Maturity concession | — | 60 | — | 301 | |||||||||||
Maturity and payment concession | — | — | 750 | — | |||||||||||
Maturity and rate concession | 608 | — | 608 | — | |||||||||||
Rate and payment concession | — | — | — | 1,040 | |||||||||||
Total | $ | 608 | $ | 1,985 | $ | 3,459 | $ | 3,370 |
Net Unrealized Loss on Available for Sale Securities | Net Unrealized Gain on Interest Rate Swaps | Total | |||||||||
(In thousands) | |||||||||||
Balance at June 30, 2018 | $ | (1,764 | ) | $ | 3,043 | $ | 1,279 | ||||
Other comprehensive (loss) income before reclassifications, net of tax | (508 | ) | 1,409 | 901 | |||||||
Net other comprehensive (loss) income | (508 | ) | 1,409 | 901 | |||||||
Balance at September 30, 2018 | $ | (2,272 | ) | $ | 4,452 | $ | 2,180 |
Net Unrealized Gain on Available for Sale Securities | Net Unrealized Gain on Interest Rate Swaps | Total | |||||||||
(In thousands) | |||||||||||
Balance at June 30, 2017 | $ | 596 | $ | 426 | $ | 1,022 | |||||
Other comprehensive income before reclassifications, net of tax | 16 | 213 | 229 | ||||||||
Net other comprehensive income | 16 | 213 | 229 | ||||||||
Balance at September 30, 2017 | $ | 612 | $ | 639 | $ | 1,251 |
Net Unrealized Gain (Loss) on Available for Sale Securities | Net Unrealized Gain on Interest Rate Swaps | Total | |||||||||
(In thousands) | |||||||||||
Balance at December 31, 2017 | $ | 85 | $ | 1,609 | $ | 1,694 | |||||
Other comprehensive (loss) income before reclassifications, net of tax | (2,182 | ) | 2,843 | 661 | |||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | (175 | ) | — | (175 | ) | ||||||
Net other comprehensive (loss) income | (2,357 | ) | 2,843 | 486 | |||||||
Balance at September 30, 2018 | $ | (2,272 | ) | $ | 4,452 | $ | 2,180 |
Net Unrealized Gain on Available for Sale Securities | Net Unrealized Gain on Interest Rate Swaps | Total | |||||||||
(In thousands) | |||||||||||
Balance at December 31, 2016 | $ | 409 | $ | 481 | $ | 890 | |||||
Other comprehensive income before reclassifications, net of tax | 311 | 158 | 469 | ||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | (108 | ) | — | (108 | ) | ||||||
Net other comprehensive income | 203 | 158 | 361 | ||||||||
Balance at September 30, 2017 | $ | 612 | $ | 639 | $ | 1,251 |
Accumulated Other Comprehensive Income Components | Nine Months Ended September 30, | Associated Line Item in the Consolidated Statements of Income | ||||||||
2018 | 2017 | |||||||||
(In thousands) | ||||||||||
Available-for-sale securities: | ||||||||||
Unrealized gains on investments | $ | 222 | $ | 165 | Net gain on sale of available for sale securities | |||||
Tax expense | (47 | ) | (57 | ) | Income tax expense | |||||
Net of tax | $ | 175 | $ | 108 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Net income | $ | 4,857 | $ | 4,263 | $ | 14,172 | $ | 11,734 | |||||||
Dividends to participating securities(1) | (13 | ) | (7 | ) | (39 | ) | (21 | ) | |||||||
Undistributed earnings allocated to participating securities(1) | (52 | ) | (47 | ) | (153 | ) | (134 | ) | |||||||
Net income for earnings per share calculation | $ | 4,792 | $ | 4,209 | $ | 13,980 | $ | 11,579 | |||||||
Weighted average shares outstanding, basic | 7,738 | 7,587 | 7,713 | 7,555 | |||||||||||
Effect of dilutive equity-based awards(2) | 26 | 83 | 46 | 98 | |||||||||||
Weighted average shares outstanding, diluted | 7,764 | 7,670 | 7,759 | 7,653 | |||||||||||
Net earnings per common share: | |||||||||||||||
Basic earnings per common share | $ | 0.62 | $ | 0.55 | $ | 1.81 | $ | 1.53 | |||||||
Diluted earnings per common share | $ | 0.62 | $ | 0.55 | $ | 1.80 | $ | 1.51 |
(1) | Represents dividends paid and undistributed earnings allocated to unvested stock-based awards that contain non-forfeitable rights to dividends. |
(2) | Represents the effect of the assumed exercise of stock options and the vesting of restricted shares, as applicable, utilizing the treasury stock method. |
Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer | Minimum Regulatory Capital to be Well Capitalized Under Prompt Corrective Action Provisions | |||||||||||||||||||
Actual Capital | ||||||||||||||||||||
(Dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||
Bankwell Bank | ||||||||||||||||||||
September 30, 2018 | ||||||||||||||||||||
Common Equity Tier 1 Capital to Risk-Weighted Assets | $ | 188,437 | 11.43 | % | $ | 105,057 | 6.38 | % | $ | 107,117 | 6.50 | % | ||||||||
Total Capital to Risk-Weighted Assets | 207,748 | 12.61 | % | 162,735 | 9.88 | % | 164,795 | 10.00 | % | |||||||||||
Tier I Capital to Risk-Weighted Assets | 188,437 | 11.43 | % | 129,776 | 7.88 | % | 131,836 | 8.00 | % | |||||||||||
Tier I Capital to Average Assets | 188,437 | 10.14 | % | 74,316 | 4.00 | % | 92,895 | 5.00 | % | |||||||||||
Bankwell Financial Group, Inc. | ||||||||||||||||||||
September 30, 2018 | ||||||||||||||||||||
Common Equity Tier 1 Capital to Risk-Weighted Assets | $ | 169,741 | 10.27 | % | $ | 105,347 | 6.38 | % | N/A | N/A | ||||||||||
Total Capital to Risk-Weighted Assets | 214,194 | 12.96 | % | 163,184 | 9.88 | % | N/A | N/A | ||||||||||||
Tier I Capital to Risk-Weighted Assets | 169,741 | 10.27 | % | 130,134 | 7.88 | % | N/A | N/A | ||||||||||||
Tier I Capital to Average Assets | 169,741 | 9.14 | % | 74,316 | 4.00 | % | N/A | N/A |
Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer | Minimum Regulatory Capital to be Well Capitalized Under Prompt Corrective Action Provisions | |||||||||||||||||||
Actual Capital | ||||||||||||||||||||
(Dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||
Bankwell Bank | ||||||||||||||||||||
December 31, 2017 | ||||||||||||||||||||
Common Equity Tier 1 Capital to Risk-Weighted Assets | $ | 173,728 | 10.99 | % | $ | 90,858 | 5.75 | % | $ | 102,709 | 6.50 | % | ||||||||
Total Capital to Risk-Weighted Assets | 192,632 | 12.19 | % | 146,162 | 9.25 | % | 158,014 | 10.00 | % | |||||||||||
Tier I Capital to Risk-Weighted Assets | 173,728 | 10.99 | % | 114,560 | 7.25 | % | 126,411 | 8.00 | % | |||||||||||
Tier I Capital to Average Assets | 173,728 | 9.61 | % | 72,349 | 4.00 | % | 90,437 | 5.00 | % | |||||||||||
Bankwell Financial Group, Inc. | ||||||||||||||||||||
December 31, 2017 | ||||||||||||||||||||
Common Equity Tier 1 Capital to Risk-Weighted Assets | $ | 155,977 | 9.83 | % | $ | 91,194 | 5.75 | % | N/A | N/A | ||||||||||
Total Capital to Risk-Weighted Assets | 199,984 | 12.61 | % | 146,703 | 9.25 | % | N/A | N/A | ||||||||||||
Tier I Capital to Risk-Weighted Assets | 155,977 | 9.83 | % | 114,983 | 7.25 | % | N/A | N/A | ||||||||||||
Tier I Capital to Average Assets | 155,977 | 8.59 | % | 72,663 | 4.00 | % | N/A | N/A |
Nine Months Ended September 30, 2018 | ||||||
Number of Shares | Weighted Average Exercise Price | |||||
Options outstanding at beginning of period | 47,050 | $ | 17.83 | |||
Exercised | (27,120 | ) | 19.30 | |||
Options outstanding at end of period | 19,930 | 15.84 | ||||
Options exercisable at end of period | 19,930 | 15.84 |
Nine Months Ended September 30, 2018 | ||||||
Number of Shares | Weighted Average Grant Date Fair Value | |||||
Unvested at beginning of period | 75,186 | $ | 26.39 | |||
Granted | 43,550 | (1) | 32.85 | |||
Vested | (15,479 | ) | 26.54 | |||
Forfeited | (1,498 | ) | 26.79 | |||
Unvested at end of period | 101,759 | 29.13 |
(1) | Includes 11,250 shares of performance based restricted stock |
September 30, 2018: | ||||||||||||||
(Dollars in thousands) | Notional Amount | Original Maturity | Received | Paid | Fair Value Asset | |||||||||
Cash flow hedge: | ||||||||||||||
Interest rate swap on FHLB advance | $ | 25,000 | 4.7 years | 3-month LIBOR | 1.62% | $ | 50 | |||||||
Interest rate swap on FHLB advance | 25,000 | 5.0 years | 3-month LIBOR | 1.83% | 305 | |||||||||
Interest rate swap on FHLB advance | 25,000 | 5.0 years | 3-month LIBOR | 1.48% | 673 | |||||||||
Interest rate swap on FHLB advance | 25,000 | 5.0 years | 3-month LIBOR | 1.22% | 1,175 | |||||||||
Interest rate swap on FHLB advance | 25,000 | 7.0 years | 3-month LIBOR | 2.04% | 1,342 | |||||||||
Interest rate swap on FHLB advance | 25,000 | 7.0 years | 3-month LIBOR | 2.04% | 1,335 | |||||||||
Forward-starting interest rate swap(1) | 25,000 | 15.0 years | 3-month LIBOR | 3.01% | 288 | |||||||||
Forward-starting interest rate swap(1) | 25,000 | 15.0 years | 3-month LIBOR | 3.03% | 263 | |||||||||
Forward-starting interest rate swap(1) | 25,000 | 15.0 years | 3-month LIBOR | 3.05% | 202 | |||||||||
$ | 225,000 | $ | 5,633 |
December 31, 2017: | ||||||||||||||
(Dollars in thousands) | Notional Amount | Original Maturity | Received | Paid | Fair Value Asset | |||||||||
Cash flow hedge: | ||||||||||||||
Interest rate swap on FHLB advance | $ | 25,000 | 4.7 years | 3-month LIBOR | 1.62% | $ | 62 | |||||||
Interest rate swap on FHLB advance | 25,000 | 5.0 years | 3-month LIBOR | 1.83% | 105 | |||||||||
Interest rate swap on FHLB advance | 25,000 | 5.0 years | 3-month LIBOR | 1.48% | 398 | |||||||||
Interest rate swap on FHLB advance | 25,000 | 5.0 years | 3-month LIBOR | 1.22% | 793 | |||||||||
Interest rate swap on FHLB advance | 25,000 | 7.0 years | 3-month LIBOR | 2.04% | 342 | |||||||||
Interest rate swap on FHLB advance | 25,000 | 7.0 years | 3-month LIBOR | 2.04% | 334 | |||||||||
$ | 150,000 | $ | 2,034 |
(Dollars in thousands) | Notional Amount | Original Effective Date of Hedged Borrowing | Duration of Borrowing | Counterparty | ||||||
Type of borrowing: | ||||||||||
FHLB 90-day advance | $ | 25,000 | April 1, 2014 | 4.7 years | Bank of Montreal | |||||
FHLB 90-day advance | 25,000 | January 2, 2015 | 5.0 years | Bank of Montreal | ||||||
FHLB 90-day advance | 25,000 | August 26, 2015 | 5.0 years | Bank of Montreal | ||||||
FHLB 90-day advance | 25,000 | July 1, 2016 | 5.0 years | Bank of Montreal | ||||||
FHLB 90-day advance | 25,000 | August 25, 2017 | 7.0 years | Bank of Montreal | ||||||
FHLB 90-day advance | 25,000 | August 25, 2017 | 7.0 years | FTN Financial Capital Markets | ||||||
$ | 150,000 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(In thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Interest rate swap on FHLB advance: | |||||||||||||||
Unrealized gains recognized in accumulated other comprehensive income | $ | 1,784 | $ | 327 | $ | 3,599 | $ | 243 | |||||||
Income tax expense on items recognized in accumulated other comprehensive income | (375 | ) | (114 | ) | (756 | ) | (85 | ) | |||||||
Other comprehensive income | $ | 1,409 | $ | 213 | $ | 2,843 | $ | 158 | |||||||
Interest expense recognized on hedged FHLB advance | $ | 653 | $ | 489 | $ | 1,939 | $ | 1,258 |
September 30, 2018 | |||||||||||||||||||
Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||
(In thousands) | |||||||||||||||||||
Financial Assets: | |||||||||||||||||||
Cash and due from banks | $ | 84,437 | $ | 84,437 | $ | 84,437 | $ | — | $ | — | |||||||||
Federal funds sold | 2,664 | 2,664 | 2,664 | — | — | ||||||||||||||
Available for sale securities | 94,438 | 94,438 | 9,654 | 84,784 | — | ||||||||||||||
Held to maturity securities | 21,464 | 21,606 | — | 1,098 | 20,508 | ||||||||||||||
Loans receivable, net | 1,585,465 | 1,536,521 | — | — | 1,536,521 | ||||||||||||||
Accrued interest receivable | 6,055 | 6,055 | — | 6,055 | — | ||||||||||||||
FHLB stock | 9,210 | 9,210 | — | 9,210 | — | ||||||||||||||
Servicing asset | 1,163 | 1,163 | — | — | 1,163 | ||||||||||||||
Derivative asset, net | 5,633 | 5,633 | — | 5,633 | — | ||||||||||||||
Financial Liabilities: | |||||||||||||||||||
Noninterest bearing deposits | $ | 162,473 | $ | 162,473 | $ | — | $ | 162,473 | $ | — | |||||||||
NOW and money market | 540,318 | 540,318 | — | 540,318 | — | ||||||||||||||
Savings | 147,940 | 147,940 | — | 147,940 | — | ||||||||||||||
Time deposits | 642,438 | 639,483 | — | — | 639,483 | ||||||||||||||
Accrued interest payable | 899 | 899 | — | 899 | — | ||||||||||||||
Advances from the FHLB | 180,000 | 179,664 | — | — | 179,664 | ||||||||||||||
Subordinated debentures | 25,142 | 24,639 | — | — | 24,639 | ||||||||||||||
Servicing liability | 75 | 75 | — | — | 75 |
December 31, 2017 | |||||||||||||||||||
Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||
(In thousands) | |||||||||||||||||||
Financial Assets: | |||||||||||||||||||
Cash and due from banks | $ | 70,545 | $ | 70,545 | $ | 70,545 | $ | — | $ | — | |||||||||
Federal funds sold | 186 | 186 | 186 | — | — | ||||||||||||||
Available for sale securities | 92,188 | 92,188 | 9,861 | 82,327 | — | ||||||||||||||
Held to maturity securities | 21,579 | 22,836 | — | 1,119 | 21,717 | ||||||||||||||
Loans receivable, net | 1,520,879 | 1,494,599 | — | — | 1,494,599 | ||||||||||||||
Accrued interest receivable | 5,910 | 5,910 | — | 5,910 | — | ||||||||||||||
FHLB stock | 9,183 | 9,183 | — | 9,183 | — | ||||||||||||||
Servicing asset | 1,113 | 1,113 | — | — | 1,113 | ||||||||||||||
Derivative asset, net | 2,034 | 2,034 | — | 2,034 | — | ||||||||||||||
Financial Liabilities: | |||||||||||||||||||
Noninterest bearing deposits | $ | 172,638 | $ | 172,638 | $ | — | $ | 172,638 | $ | — | |||||||||
NOW and money market | 510,746 | 510,746 | — | 510,746 | — | ||||||||||||||
Savings | 83,758 | 83,758 | — | 83,758 | — | ||||||||||||||
Time deposits | 631,263 | 629,532 | — | — | 629,532 | ||||||||||||||
Accrued interest payable | 1,092 | 1,092 | — | 1,092 | — | ||||||||||||||
Advances from the FHLB | 199,000 | 198,932 | — | — | 198,932 | ||||||||||||||
Subordinated debentures | 25,103 | 25,547 | — | — | 25,547 | ||||||||||||||
Servicing Liability | 83 | 83 | — | — | 83 |
Level 1 — | Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. |
Level 2 — | Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. |
Level 3 — | Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. |
Fair Value | |||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | ||||||||
September 30, 2018: | |||||||||||
Available for sale investment securities: | |||||||||||
U.S. Government and agency obligations | $ | 9,654 | $ | 73,816 | $ | — | |||||
State agency and municipal obligations | — | 3,970 | — | ||||||||
Corporate bonds | — | 6,998 | — | ||||||||
Derivative asset, net | — | 5,633 | — | ||||||||
December 31, 2017: | |||||||||||
Available for sale investment securities: | |||||||||||
U.S. Government and agency obligations | $ | 9,861 | $ | 62,913 | $ | — | |||||
State agency and municipal obligations | — | 12,277 | — | ||||||||
Corporate bonds | — | 7,137 | — | ||||||||
Derivative asset, net | — | 2,034 | — |
Fair Value | |||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | ||||||||
September 30, 2018: | |||||||||||
Impaired loans | $ | — | $ | — | $ | 30,708 | |||||
Servicing asset, net | — | — | 1,088 | ||||||||
December 31, 2017: | |||||||||||
Impaired loans | $ | — | $ | — | $ | 13,898 | |||||
Servicing asset, net | — | — | 1,030 |
Valuation Methodology | Unobservable Input | Range | |||
September 30, 2018: | |||||
Impaired loans | Appraisals | Discount to appraised value | 5.00 - 18.00% | ||
Discounted cash flows | Discount rate | 3.25 - 7.00 % | |||
Servicing asset, net | Discounted cash flows | Discount rate | 7.00 - 12.00% | ||
Prepayment rate | 7.00 - 9.00% | ||||
December 31, 2017: | |||||
Impaired loans | Appraisals | Discount to appraised value | 8.00 - 24.00% | ||
Discounted cash flows | Discount rate | 3.25 - 6.75% | |||
Servicing asset, net | Discounted cash flows | Discount rate | 7.00 - 12.00% | ||
Prepayment rate | 7.00 - 9.00% |
• | Responsive, customer-centric products and services and a community focus; |
• | Strategic acquisitions; |
• | Utilization of efficient and scalable infrastructure and; |
• | Disciplined focus on risk management. |
Three Months Ended September 30, | |||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||
(Dollars in thousands) | Average Balance | Interest | Yield / Rate (5) | Average Balance | Interest | Yield / Rate (5) | |||||||||||||||
Assets: | |||||||||||||||||||||
Cash and Fed funds sold | $ | 70,111 | $ | 345 | 1.95 | % | $ | 83,086 | $ | 239 | 1.14 | % | |||||||||
Securities (1) | 118,311 | 937 | 3.17 | % | 112,066 | 1,014 | 3.62 | % | |||||||||||||
Loans: | |||||||||||||||||||||
Commercial real estate | 1,030,336 | 12,445 | 4.73 | % | 927,114 | 10,614 | 4.48 | % | |||||||||||||
Residential real estate | 185,625 | 1,724 | 3.71 | % | 193,578 | 1,770 | 3.66 | % | |||||||||||||
Construction (2) | 92,537 | 1,225 | 5.18 | % | 106,373 | 1,305 | 4.80 | % | |||||||||||||
Commercial business | 279,454 | 3,752 | 5.25 | % | 268,408 | 3,476 | 5.07 | % | |||||||||||||
Consumer | 393 | 7 | 6.79 | % | 1,149 | 10 | 3.53 | % | |||||||||||||
Total loans | 1,588,345 | 19,153 | 4.72 | % | 1,496,622 | 17,175 | 4.49 | % | |||||||||||||
Federal Home Loan Bank stock | 9,297 | 137 | 5.88 | % | 8,544 | 85 | 3.96 | % | |||||||||||||
Total earning assets | 1,786,064 | 20,572 | 4.51 | % | 1,700,318 | 18,513 | 4.26 | % | |||||||||||||
Other assets | 68,838 | 69,253 | |||||||||||||||||||
Total assets | $ | 1,854,902 | $ | 1,769,571 | |||||||||||||||||
Liabilities and shareholders' equity: | |||||||||||||||||||||
Interest -bearing liabilities: | |||||||||||||||||||||
NOW | $ | 59,618 | $ | 54 | 0.36 | % | $ | 58,625 | $ | 19 | 0.13 | % | |||||||||
Money market | 483,105 | 1,741 | 1.43 | % | 432,753 | 993 | 0.91 | % | |||||||||||||
Savings | 136,683 | 502 | 1.46 | % | 100,197 | 189 | 0.75 | % | |||||||||||||
Time | 607,044 | 2,747 | 1.80 | % | 645,317 | 2,215 | 1.36 | % | |||||||||||||
Total interest-bearing deposits | 1,286,450 | 5,044 | 1.56 | % | 1,236,892 | 3,416 | 1.10 | % | |||||||||||||
Borrowed money | 216,483 | 1,210 | 2.19 | % | 193,734 | 1,071 | 2.16 | % | |||||||||||||
Total interest bearing liabilities | 1,502,933 | 6,254 | 1.65 | % | 1,430,626 | 4,487 | 1.24 | % | |||||||||||||
Noninterest-bearing deposits | 167,198 | 164,565 | |||||||||||||||||||
Other liabilities | 11,572 | 17,528 | |||||||||||||||||||
Total Liabilities | 1,681,703 | 1,612,719 | |||||||||||||||||||
Shareholders' equity | 173,199 | 156,852 | |||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,854,902 | $ | 1,769,571 | |||||||||||||||||
Net interest income (3) | $ | 14,318 | $ | 14,026 | |||||||||||||||||
Interest rate spread | 2.86 | % | 3.02 | % | |||||||||||||||||
Net interest margin (4) | 3.21 | % | 3.30 | % |
(1) | Average balances and yields for securities are based on amortized cost. |
(2) | Includes commercial and residential real estate construction. |
(3) | The adjustment for securities and loans taxable equivalency amounted to $72 thousand and $165 thousand, respectively, for the three months ended September 30, 2018 and 2017. |
(4) | Annualized net interest income as a percentage of earning assets. |
(5) | Yields are calculated using the contractual day count convention for each respective product type. |
Nine Months Ended September 30, | |||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||
(Dollars in thousands) | Average Balance | Interest | Yield / Rate (5) | Average Balance | Interest | Yield / Rate (5) | |||||||||||||||
Assets: | |||||||||||||||||||||
Cash and Fed funds sold | $ | 73,823 | $ | 924 | 1.67 | % | $ | 79,333 | $ | 501 | 0.85 | % | |||||||||
Securities (1) | 118,434 | 2,746 | 3.09 | % | 106,622 | 2,822 | 3.53 | % | |||||||||||||
Loans: | |||||||||||||||||||||
Commercial real estate | 1,001,058 | 34,714 | 4.57 | % | 893,962 | 30,528 | 4.50 | % | |||||||||||||
Residential real estate | 192,254 | 5,309 | 3.68 | % | 194,503 | 5,325 | 3.65 | % | |||||||||||||
Construction (2) | 93,617 | 3,551 | 5.00 | % | 107,136 | 3,853 | 4.74 | % | |||||||||||||
Commercial business | 281,348 | 11,088 | 5.20 | % | 249,718 | 9,607 | 5.07 | % | |||||||||||||
Consumer | 521 | 23 | 5.77 | % | 1,387 | 35 | 3.40 | % | |||||||||||||
Total loans | 1,568,798 | 54,685 | 4.60 | % | 1,446,706 | 49,348 | 4.50 | % | |||||||||||||
Federal Home Loan Bank stock | 9,311 | 379 | 5.43 | % | 8,198 | 244 | 3.97 | % | |||||||||||||
Total earning assets | 1,770,366 | 58,734 | 4.38 | % | 1,640,859 | 52,915 | 4.25 | % | |||||||||||||
Other assets | 68,141 | 63,527 | |||||||||||||||||||
Total assets | $ | 1,838,507 | $ | 1,704,386 | |||||||||||||||||
Liabilities and shareholders' equity: | |||||||||||||||||||||
Interest -bearing liabilities: | |||||||||||||||||||||
NOW | $ | 60,616 | $ | 93 | 0.21 | % | $ | 58,096 | $ | 65 | 0.15 | % | |||||||||
Money market | 482,204 | 4,422 | 1.23 | % | 387,162 | 2,329 | 0.80 | % | |||||||||||||
Savings | 110,622 | 964 | 1.17 | % | 108,304 | 591 | 0.73 | % | |||||||||||||
Time | 617,269 | 7,530 | 1.63 | % | 628,521 | 6,107 | 1.30 | % | |||||||||||||
Total interest-bearing deposits | 1,270,711 | 13,009 | 1.37 | % | 1,182,083 | 9,092 | 1.03 | % | |||||||||||||
Borrowed money | 221,597 | 3,653 | 2.17 | % | 186,844 | 2,930 | 2.07 | % | |||||||||||||
Total interest bearing liabilities | 1,492,308 | 16,662 | 1.49 | % | 1,368,927 | 12,022 | 1.17 | % | |||||||||||||
Noninterest-bearing deposits | 164,604 | 168,778 | |||||||||||||||||||
Other liabilities | 12,815 | 13,960 | |||||||||||||||||||
Total Liabilities | 1,669,727 | 1,551,665 | |||||||||||||||||||
Shareholders' equity | 168,780 | 152,721 | |||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,838,507 | $ | 1,704,386 | |||||||||||||||||
Net interest income (3) | $ | 42,072 | $ | 40,893 | |||||||||||||||||
Interest rate spread | 2.89 | % | 3.08 | % | |||||||||||||||||
Net interest margin (4) | 3.17 | % | 3.32 | % |
(1) | Average balances and yields for securities are based on amortized cost. |
(2) | Includes commercial and residential real estate construction. |
(3) | The adjustment for securities and loans taxable equivalency amounted to $213 thousand and $443 thousand, respectively, for the nine months ended September 30, 2018 and 2017. |
(4) | Annualized net interest income as a percentage of earning assets. |
(5) | Yields are calculated using the contractual day count convention for each respective product type. |
Three Months Ended September 30, 2018 vs 2017 Increase (Decrease) | Nine Months Ended September 30, 2018 vs 2017 Increase (Decrease) | ||||||||||||||||||||||
(In thousands) | Volume | Rate | Total | Volume | Rate | Total | |||||||||||||||||
Interest and dividend income: | |||||||||||||||||||||||
Cash and Fed funds sold | $ | (42 | ) | $ | 148 | $ | 106 | $ | (37 | ) | $ | 460 | $ | 423 | |||||||||
Securities | 54 | (131 | ) | (77 | ) | 294 | (370 | ) | (76 | ) | |||||||||||||
Loans: | |||||||||||||||||||||||
Commercial real estate | 1,225 | 606 | 1,831 | 3,707 | 479 | 4,186 | |||||||||||||||||
Residential real estate | (74 | ) | 28 | (46 | ) | (62 | ) | 46 | (16 | ) | |||||||||||||
Construction | (178 | ) | 98 | (80 | ) | (505 | ) | 203 | (302 | ) | |||||||||||||
Commercial business | 146 | 130 | 276 | 1,241 | 240 | 1,481 | |||||||||||||||||
Consumer | (9 | ) | 6 | (3 | ) | (29 | ) | 17 | (12 | ) | |||||||||||||
Total loans | 1,110 | 868 | 1,978 | 4,352 | 985 | 5,337 | |||||||||||||||||
Federal Home Loan Bank stock | 8 | 44 | 52 | 36 | 99 | 135 | |||||||||||||||||
Total change in interest and dividend income | 1,130 | 929 | 2,059 | 4,645 | 1,174 | 5,819 | |||||||||||||||||
Interest expense: | |||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||
NOW | 1 | 34 | 35 | 3 | 25 | 28 | |||||||||||||||||
Money market | 126 | 622 | 748 | 667 | 1,426 | 2,093 | |||||||||||||||||
Savings | 87 | 226 | 313 | 13 | 360 | 373 | |||||||||||||||||
Time | (138 | ) | 670 | 532 | (111 | ) | 1,534 | 1,423 | |||||||||||||||
Total deposits | 76 | 1,552 | 1,628 | 572 | 3,345 | 3,917 | |||||||||||||||||
Borrowed money | 127 | 12 | 139 | 567 | 156 | 723 | |||||||||||||||||
Total change in interest expense | 203 | 1,564 | 1,767 | 1,139 | 3,501 | 4,640 | |||||||||||||||||
Change in net interest income | $ | 927 | $ | (635 | ) | $ | 292 | $ | 3,506 | $ | (2,327 | ) | $ | 1,179 |
Three Months Ended September 30, | Change | |||||||||||||
(Dollars in thousands) | 2018 | 2017 | $ | % | ||||||||||
Service charges and fees | $ | 285 | $ | 254 | $ | 31 | 12.2 | % | ||||||
Bank owned life insurance | 267 | 295 | (28 | ) | (9.5 | ) | ||||||||
Gains and fees from sales of loans | 150 | 36 | 114 | 316.7 | ||||||||||
Other | 157 | 239 | (82 | ) | (34.3 | ) | ||||||||
Total noninterest income | $ | 859 | $ | 824 | $ | 35 | 4.2 | % |
Nine Months Ended September 30, | Change | |||||||||||||
(Dollars in thousands) | 2018 | 2017 | $ | % | ||||||||||
Gains and fees from sales of loans | $ | 835 | $ | 559 | $ | 276 | 49.4 | % | ||||||
Service Charges and fees | 806 | 755 | 51 | 6.8 | ||||||||||
Bank owned life insurance | 795 | 881 | (86 | ) | (9.8 | ) | ||||||||
Net gain on sale of available for sale securities | 222 | 165 | 57 | 34.5 | ||||||||||
Other | 641 | 728 | (87 | ) | (12.0 | ) | ||||||||
Total noninterest income | $ | 3,299 | $ | 3,088 | $ | 211 | 6.8 | % |
Three Months Ended September 30, | Change | |||||||||||||
(Dollars in thousands) | 2018 | 2017 | $ | % | ||||||||||
Salaries and employee benefits | $ | 4,903 | $ | 3,952 | $ | 951 | 24.1 | % | ||||||
Occupancy and equipment | 1,771 | 1,449 | 322 | 22.2 | ||||||||||
Data processing | 512 | 621 | (109 | ) | (17.6 | ) | ||||||||
Marketing | 395 | 295 | 100 | 33.9 | ||||||||||
Professional services | 321 | 680 | (359 | ) | (52.8 | ) | ||||||||
Director fees | 260 | 207 | 53 | 25.6 | ||||||||||
FDIC insurance | 203 | 265 | (62 | ) | (23.4 | ) | ||||||||
Amortization of intangibles | 24 | 31 | (7 | ) | (22.6 | ) | ||||||||
Other | 481 | 629 | (148 | ) | (23.5 | ) | ||||||||
Total noninterest expense | $ | 8,870 | $ | 8,129 | $ | 741 | 9.1 | % |
Nine Months Ended September 30, | Change | |||||||||||||
(Dollars in thousands) | 2018 | 2017 | $ | % | ||||||||||
Salaries and employee benefits | $ | 14,470 | $ | 11,681 | $ | 2,789 | 23.9 | % | ||||||
Occupancy and equipment | 5,119 | 4,580 | 539 | 11.8 | ||||||||||
Data processing | 1,546 | 1,467 | 79 | 5.4 | ||||||||||
Professional services | 1,520 | 1,615 | (95 | ) | (5.9 | ) | ||||||||
Marketing | 1,171 | 872 | 299 | 34.3 | ||||||||||
Director fees | 749 | 683 | 66 | 9.7 | ||||||||||
FDIC insurance | 620 | 891 | (271 | ) | (30.4 | ) | ||||||||
Amortization of intangibles | 72 | 93 | (21 | ) | (22.6 | ) | ||||||||
Other | 1,570 | 2,062 | (492 | ) | (23.9 | ) | ||||||||
Total noninterest expense | $ | 26,837 | $ | 23,944 | $ | 2,893 | 12.1 | % |
(In thousands) | At September 30, 2018 | At December 31, 2017 | Change | ||||||||
Real estate loans: | |||||||||||
Residential | $ | 182,740 | $ | 193,524 | $ | (10,784 | ) | ||||
Commercial | 1,057,484 | 987,242 | 70,242 | ||||||||
Construction | 93,941 | 101,636 | (7,695 | ) | |||||||
1,334,165 | 1,282,402 | 51,763 | |||||||||
Commercial business | 273,065 | 259,995 | 13,070 | ||||||||
Consumer | 389 | 619 | (230 | ) | |||||||
Total loans | $ | 1,607,619 | $ | 1,543,016 | $ | 64,603 |
(In thousands) | At September 30, 2018 | At December 31, 2017 | |||||
Nonaccrual loans: | |||||||
Real estate loans: | |||||||
Residential | $ | 4,725 | $ | 1,590 | |||
Commercial | 12,182 | 3,371 | |||||
Commercial business | 5,057 | 520 | |||||
Total nonaccrual loans | 21,964 | 5,481 | |||||
Property acquired through foreclosure or repossession, net | — | — | |||||
Total nonperforming assets | $ | 21,964 | $ | 5,481 | |||
Nonperforming assets to total assets | 1.17 | % | 0.31 | % | |||
Nonaccrual loans to total loans | 1.37 | % | 0.36 | % | |||
Total past due loans to total loans | 1.22 | % | 1.67 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(Dollars in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Balance at beginning of period | $ | 19,006 | $ | 19,536 | $ | 18,904 | $ | 17,982 | |||||||
Charge-offs: | |||||||||||||||
Residential | (16 | ) | — | (72 | ) | — | |||||||||
Commercial real estate | — | — | (18 | ) | — | ||||||||||
Commercial business | — | (366 | ) | (96 | ) | (366 | ) | ||||||||
Consumer | (2 | ) | (10 | ) | (62 | ) | (41 | ) | |||||||
Total charge-offs | (18 | ) | (376 | ) | (248 | ) | (407 | ) | |||||||
Recoveries: | |||||||||||||||
Residential real estate | — | — | — | 146 | |||||||||||
Commercial Business | — | 4 | 4 | 4 | |||||||||||
Consumer | 1 | 2 | 6 | 3 | |||||||||||
Total recoveries | 1 | 6 | 10 | 153 | |||||||||||
Net charge-offs | (17 | ) | (370 | ) | (238 | ) | (254 | ) | |||||||
Provision charged to earnings | 322 | 398 | 645 | 1,836 | |||||||||||
Balance at end of period | $ | 19,311 | $ | 19,564 | $ | 19,311 | $ | 19,564 | |||||||
Net charge-offs to average loans | — | % | 0.02 | % | 0.02 | % | 0.02 | % | |||||||
Allowance for loan losses to total loans | 1.20 | % | 1.28 | % | 1.20 | % | 1.28 | % |
At September 30, 2018 | At December 31, 2017 | ||||||||||||
(Dollars in thousands) | Amount | Percent of Loan Portfolio | Amount | Percent of Loan Portfolio | |||||||||
Residential real estate | $ | 1,083 | 11.37 | % | $ | 1,721 | 12.54 | % | |||||
Commercial real estate | 14,071 | 65.78 | 12,777 | 63.98 | |||||||||
Construction | 359 | 5.84 | 907 | 6.59 | |||||||||
Commercial business | 3,797 | 16.99 | 3,498 | 16.85 | |||||||||
Consumer | 1 | 0.02 | 1 | 0.04 | |||||||||
Total allowance for loan losses | $ | 19,311 | 100.00 | % | $ | 18,904 | 100.00 | % |
At September 30, 2018 | At December 31, 2017 | ||||||||||||||||||
(Dollars in thousands) | Amount | Percent | Weighted Average Rate | Amount | Percent | Weighted Average Rate | |||||||||||||
Noninterest-bearing demand | $ | 162,473 | 10.88 | % | — | % | $ | 172,638 | 12.35 | % | — | % | |||||||
NOW | 56,270 | 3.77 | 0.21 | 58,942 | 4.21 | 0.16 | |||||||||||||
Money market | 484,048 | 32.42 | 1.23 | 451,804 | 32.31 | 0.85 | |||||||||||||
Savings | 147,940 | 9.91 | 1.17 | 83,758 | 5.99 | 0.74 | |||||||||||||
Time | 642,438 | 43.02 | 1.63 | 631,263 | 45.14 | 1.33 | |||||||||||||
Total deposits | $ | 1,493,169 | 100.00 | % | 1.37 | % | $ | 1,398,405 | 100.00 | % | 1.06 | % |
(Dollars in thousands) | September 30, 2018 | December 31, 2017 | |||||
Maturing: | |||||||
Within 3 months | $ | 141,269 | $ | 63,575 | |||
After 3 but within 6 months | 53,972 | 114,511 | |||||
After 6 months but within 1 year | 196,779 | 149,782 | |||||
After 1 year | 123,744 | 179,655 | |||||
Total | $ | 515,764 | $ | 507,523 |
Parallel Ramp | Estimated Percent Change in Net Interest Income | ||||
Rate Changes (basis points) | September 30, 2018 | December 31, 2017 | |||
-100 | 3.00 | % | (2.00 | )% | |
+200 | (7.50 | ) | (4.30 | ) |
Parallel Shock | Estimated Percent Change in Net Interest Income | ||||
Rate Changes (basis points) | September 30, 2018 | December 31, 2017 | |||
-100 | 4.70 | % | (4.70 | )% | |
+100 | (7.00 | ) | (3.40 | ) | |
+200 | (14.80 | ) | (7.30 | ) | |
+300 | (22.10 | ) | (11.50 | ) |
Estimated Percent Change in Economic Value of Equity | |||||
Rate Changes (basis points) | September 30, 2018 | December 31, 2017 | |||
-100 | 3.80 | % | (1.60 | )% | |
+100 | (8.60 | ) | (10.10 | ) | |
+200 | (20.30 | ) | (22.90 | ) | |
+300 | (29.20 | ) | (32.80 | ) |
31.1 | |
31.2 | |
32 | |
101 | The following materials from Bankwell Financial Group, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2018, formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Income; (iii) Consolidated Statements of Comprehensive Income; (iv) Consolidated Statements of Shareholders’ Equity; (v) Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial Statements. |
Bankwell Financial Group, Inc. | |
Date: November 1, 2018 | /s/ Christopher R. Gruseke |
Christopher R. Gruseke | |
President and Chief Executive Officer | |
Date: November 1, 2018 | /s/ Penko Ivanov |
Penko Ivanov | |
Executive Vice President and Chief | |
Financial Officer | |
(Principal Financial and Accounting Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Bankwell Financial Group, Inc. |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
4. | The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
5. | The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
/s/ Christopher R. Gruseke | |
Christopher R. Gruseke | |
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Bankwell Financial Group, Inc. |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
4. | The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
5. | The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
/s/ Penko Ivanov | |
Penko Ivanov | |
Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
/s/ Christopher R. Gruseke | |
Christopher R. Gruseke | |
President and Chief Executive Officer | |
Date: November 1, 2018 |
/s/ Penko Ivanov | |
Penko Ivanov | |
Executive Vice President and Chief Financial Officer | |
(Principal Financial and Accounting Officer) | |
Date: November 1, 2018 |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Oct. 31, 2018 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Bankwell Financial Group, Inc. | |
Entity Central Index Key | 0001505732 | |
Trading Symbol | bwfg | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 7,842,246 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED BALANCE SHEETS - (UNAUDITED) (Parentheticals) - USD ($) $ / shares in Thousands, $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for loan losses (in dollars) | $ 19,311 | $ 18,904 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 7,842,996 | 7,751,424 |
Common stock, shares outstanding | 7,842,996 | 7,751,424 |
CONSOLIDATED STATEMENTS OF INCOME - (UNAUDITED) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Interest and dividend income | ||||
Interest and fees on loans | $ 19,153 | $ 17,175 | $ 54,685 | $ 49,348 |
Interest and dividends on securities | 1,002 | 934 | 2,912 | 2,623 |
Interest on cash and cash equivalents | 345 | 239 | 924 | 501 |
Total interest income | 20,500 | 18,348 | 58,521 | 52,472 |
Interest expense | ||||
Interest expense on deposits | 5,044 | 3,416 | 13,009 | 9,092 |
Interest on borrowings | 1,210 | 1,071 | 3,653 | 2,930 |
Total interest expense | 6,254 | 4,487 | 16,662 | 12,022 |
Net interest income | 14,246 | 13,861 | 41,859 | 40,450 |
Provision for loan losses | 322 | 398 | 645 | 1,836 |
Net interest income after provision for loan losses | 13,924 | 13,463 | 41,214 | 38,614 |
Noninterest income | ||||
Service charges and fees | 285 | 254 | 806 | 755 |
Bank owned life insurance | 267 | 295 | 795 | 881 |
Gains and fees from sales of loans | 150 | 36 | 835 | 559 |
Net gain on sale of available for sale securities | 0 | 0 | 222 | 165 |
Other | 157 | 239 | 641 | 728 |
Total noninterest income | 859 | 824 | 3,299 | 3,088 |
Noninterest expense | ||||
Salaries and employee benefits | 4,903 | 3,952 | 14,470 | 11,681 |
Occupancy and equipment | 1,771 | 1,449 | 5,119 | 4,580 |
Data processing | 512 | 621 | 1,546 | 1,467 |
Marketing | 395 | 295 | 1,171 | 872 |
Professional services | 321 | 680 | 1,520 | 1,615 |
Director fees | 260 | 207 | 749 | 683 |
FDIC insurance | 203 | 265 | 620 | 891 |
Amortization of intangibles | 24 | 31 | 72 | 93 |
Other | 481 | 629 | 1,570 | 2,062 |
Total noninterest expense | 8,870 | 8,129 | 26,837 | 23,944 |
Income before income tax expense | 5,913 | 6,158 | 17,676 | 17,758 |
Income tax expense | 1,056 | 1,895 | 3,504 | 6,024 |
Net income | $ 4,857 | $ 4,263 | $ 14,172 | $ 11,734 |
Earnings Per Common Share: | ||||
Basic (in dollars per share) | $ 0.62 | $ 0.55 | $ 1.81 | $ 1.53 |
Diluted (in dollars per share) | $ 0.62 | $ 0.55 | $ 1.80 | $ 1.51 |
Weighted Average Common Shares Outstanding: | ||||
Basic (in shares) | 7,738,343 | 7,587,471 | 7,712,924 | 7,554,739 |
Diluted (in shares) | 7,763,935 | 7,670,258 | 7,758,762 | 7,652,355 |
Dividends per common share (in dollars per share) | $ 0.12 | $ 0.07 | $ 0.36 | $ 0.21 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - (UNAUDITED) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 4,857 | $ 4,263 | $ 14,172 | $ 11,734 |
Unrealized (losses) gains on securities: | ||||
Unrealized holding (losses) gains on available for sale securities | (643) | 25 | (2,762) | 478 |
Reclassification adjustment for gain realized in net income | 0 | 0 | (222) | (165) |
Net change in unrealized (losses) gains | (643) | 25 | (2,984) | 313 |
Income tax benefit (expense) | 135 | (9) | 627 | (110) |
Unrealized (losses) gains on securities, net of tax | (508) | 16 | (2,357) | 203 |
Unrealized gains on interest rate swaps: | ||||
Unrealized gains on interest rate swaps | 1,784 | 327 | 3,599 | 243 |
Income tax expense | (375) | (114) | (756) | (85) |
Unrealized gains on interest rate swaps, net of tax | 1,409 | 213 | 2,843 | 158 |
Total other comprehensive income, net of tax | 901 | 229 | 486 | 361 |
Comprehensive income | $ 5,758 | $ 4,492 | $ 14,658 | $ 12,095 |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - (UNAUDITED) (Parentheticals) - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends declared (in dollars per share) | $ 0.12 | $ 0.07 | $ 0.36 | $ 0.21 |
Nature of Operations and Summary of Significant Accounting Policies |
9 Months Ended |
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Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Summary of Significant Accounting Policies | Nature of Operations and Summary of Significant Accounting Policies Bankwell Financial Group, Inc. (the “Company” or “Bankwell”) is a bank holding company headquartered in New Canaan, Connecticut. The Company offers a broad range of financial services through its banking subsidiary, Bankwell Bank (the “Bank”). The Bank is a Connecticut state chartered commercial bank, founded in 2002, whose deposits are insured under the Deposit Insurance Fund administered by the Federal Deposit Insurance Corporation (“FDIC”). The Bank provides a full range of banking services to commercial and consumer customers, primarily concentrated in the New York metropolitan area and throughout Connecticut, with the majority of our loans in Fairfield and New Haven Counties, Connecticut, with branch locations in New Canaan, Stamford, Fairfield, Wilton, Westport, Darien, Norwalk, Hamden and North Haven Connecticut. Principles of consolidation The consolidated financial statements include the accounts of the Company and the Bank, including its wholly owned passive investment company subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. Use of estimates The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”) and general practices within the banking industry. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities as of the date of the consolidated balance sheet and revenue and expenses for the period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the allowance for loan losses, stock-based compensation, valuation of derivative instruments, investment securities, and deferred income taxes and the evaluation of investment securities for other than temporary impairment. Basis of consolidated financial statement presentation The unaudited consolidated financial statements presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and Rule 10-1 of Regulation S-X and do not include all of the information and note disclosures required by GAAP. In the opinion of management, all adjustments (consisting of normal recurring adjustments) and disclosures considered necessary for the fair presentation of the accompanying unaudited interim consolidated financial statements have been included. Interim results are not necessarily reflective of the results that may be expected for the year ending December 31, 2018. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included on Form 10-K for the year ended December 31, 2017. Significant concentrations of credit risk Most of the Company’s activities are with customers located in the New York metropolitan area and throughout Fairfield and New Haven Counties and the surrounding region of Connecticut, and declines in property values in these areas could significantly impact the Company. The Company has a significant concentration in commercial real estate loans. Management does not believe this presents any special risk. The Company does not have any significant concentrations in any one industry or customer. Reclassification Certain prior period amounts have been reclassified to conform to the 2018 financial statement presentation. These reclassifications only changed the reporting categories and did not affect the consolidated results of operations or consolidated financial position of the Company. Recent accounting pronouncements The following section includes changes in accounting principles and potential effects of new accounting guidance and pronouncements. ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606): This ASU clarifies the principles for recognizing revenue. The guidance notes that an entity should apply the following steps when recognizing revenue: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. In 2016, the FASB issued further implementation guidance regarding revenue recognition. This additional guidance included clarification on certain principal versus agent considerations within the implementation of the guidance as well as clarification related to identifying performance obligations and licensing. The guidance also requires new qualitative and quantitative disclosures, including disaggregation of revenues and descriptions of performance obligations. The guidance along with its updates is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company adopted the guidance on January 1, 2018 using the modified retrospective method. In evaluating this standard, management has determined that the majority of revenue earned by the Company is from revenue streams not included in the scope of this standard and for in-scope revenue streams management determined that a cumulative-effect adjustment to opening retained earnings as a result of adopting this standard is not needed. ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): “Recognition and Measurement of Financial Assets and Financial Liabilities.” The ASU has been issued to improve the recognition and measurement of financial instruments by requiring 1) equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; 2) separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements; 3) the use of the exit price notion when measuring fair value of financial instruments for disclosure purposes; and 4) separate presentation by the reporting organization in other comprehensive income for the portion of the total change in the fair value of a liability resulting from the change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The standard was effective for the Company beginning on January 1, 2018. The adoption of this ASU did not have a material impact on the Company’s financial statements. ASU No. 2016-02, Leases (Topic 842): The amendments in this ASU require lessees to recognize, on the balance sheet, assets and liabilities for the rights and obligations created by leases. Accounting by lessors will remain largely unchanged. In July 2018, the FASB issued a subsequent update which introduced a new transition method, under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The guidance will be effective for the Company on January 1, 2019, with early adoption permitted. The Company does not expect the application of this guidance to have a material impact on the Company’s financial statements. ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): “Measurement of Credit Losses on Financial Instruments.” The ASU changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that will replace today’s “incurred loss” model and can result in the earlier recognition of credit losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except that the losses will be recognized as an allowance. The amendments in this update will be effective for the Company on January 1, 2020, including interim periods within that fiscal year. Early adoption is permitted as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Management is currently evaluating the impact of its pending adoption of this guidance on the Company’s financial statements. ASU No. 2016-15, Statement of Cash Flows (Topic 230): “Classification of Certain Cash Receipts and Cash Payments.” This ASU changes how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. The amendments address the classification of the following eight items in the statement of cash flows; debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions and separately identifiable cash flows and application of the Predominance Principle. The amendments in this update were effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The adoption of this ASU did not have a material impact on the Company’s financial statements. ASU No. 2016-18, Statement of Cash Flows (Topic 230): “Restricted Cash.” This ASU provide guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flows. The amendments in this update require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this update were effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The adoption of this ASU did not have a material impact on the Company’s financial statements. ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): “Simplifying the Test for Goodwill Impairment.” This ASU simplifies the test for goodwill impairment by eliminating step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity was required to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, this ASU also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. Therefore, the same impairment assessment applies to all reporting units. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The amendments will be effective for the Company for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect the application of this guidance to have a material impact on the Company’s financial statements. ASU No. 2017-08, Receivables – Nonrefundable Fees and Other Costs (subtopic 310-20): “Premium Amortization on Purchased Callable Debt Securities.” The amendments in this update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The amendments will be effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company does not expect the application of this guidance to have a material impact on the Company’s financial statements. ASU No. 2017-09, Compensation – Stock Compensation (Topic 718): The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The amendments in this update were effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The adoption of this ASU did not have a material impact on the Company’s financial statements. ASU No. 2017-12, Derivatives and Hedging: “Targeted Improvements to Accounting for Hedging Activities” (Topic 815): The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. ASU 2017-12 is effective for public business entities for fiscal years beginning after December 15, 2018, with early adoption, including adoption in an interim period, permitted. This ASU requires a modified retrospective transition method in which the Company will recognize the cumulative effect of the change on the opening balance of each affected component of equity in the statement of financial position as of the date of adoption. The Company does not expect the application of this guidance to have a material impact on the Company’s financial statements. ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): This update requires a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the newly enacted federal corporate tax rate. The amount of the reclassification would be the difference between the historical 35% corporate income tax rate and the newly enacted 21% corporate tax rate. The amendments would be effective for all entities for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption of the amendments would be permitted including adoption in any interim period, for public business entities for reporting periods for which financial statements have not yet been issued and all other entities for reporting periods for which financial statements have not yet been made available for issuance. An entity would apply the amendments in the update retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act of 2017 is recognized. The Company elected to adopt this update and recorded a $0.3 million reduction to retained earnings and increase to accumulated other comprehensive income as of December 31, 2017. ASU No. 2018-03, Technical Corrections and Improvements to Financial Instruments – Overall (Subtopic 825-10): The purpose of this update is to clarify certain aspects of the guidance in ASU No. 2016-01 regarding equity securities without a readily determinable fair value, forward contracts and purchased options, presentation requirements for certain fair value option liabilities, fair value option liabilities denominated in a foreign currency, and transition guidance for equity securities without a readily determinable fair value. Public business entities with fiscal years beginning between December 15, 2017 and June 15, 2018, are not required to adopt these amendments until the interim period beginning after June 15, 2018 and public business entities with fiscal years beginning between June 15, 2018 and December 15, 2018 are not required to adopt these amendments before adopting the amendments in update 2016-01. The Company does not expect the application of this guidance to have a material impact on the Company’s financial statements. ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): "Improvements to Nonemployee Share-Based Payment Accounting” (ASU 2018-07). The amendments in this update expand the scope of Topic 718 to include share based payments to nonemployees. An entity is required to apply the requirements of Topic 718 to nonemployee awards except for specific guidance related to option pricing models and the attribution of cost. ASU 2018-07 will be effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods in the year of adoption. Early adoption is permitted for any interim or annual period. The Company does not expect the application of this guidance to have a material impact on the Company’s financial statements. ASU No. 2018-13, Fair Value Measurement (Topic 820): "Changes to the Disclosure Requirements for Fair Value Measurement." The amendments in this update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. The following disclosure requirements were removed from topic 820 for public entities; (1) The amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy (2) The policy for timing of transfers between levels and (3) The valuation processes for Level 3 fair value measurements. This update also modified and added disclosure requirements to Topic 820, including adding (1) The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and (2) The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. ASU 2018-13 will be effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods in the year of adoption. Early adoption is permitted for any interim or annual period. The Company does not expect the application of this guidance to have a material impact on the Company’s financial statements. |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | Investment Securities The amortized cost, gross unrealized gains and losses and fair value of available for sale and held to maturity securities at September 30, 2018 were as follows:
The amortized cost, gross unrealized gains and losses and fair value of available for sale and held to maturity securities at December 31, 2017 were as follows:
The gross realized gains on the sale of investment securities totaled $0.2 million for the nine months ended September 30, 2018. The gross realized losses on the sale of investment securities totaled $2.0 thousand for the nine months ended September 30, 2018. Sales proceeds and calls totaled $12.4 million for the nine months ended September 30, 2018. There were no sales of investment securities during the three months ended September 30, 2018. The gross realized gains on the sale of investment securities totaled $0.2 million for the nine months ended September 30, 2017. There were no gross realized losses on the sale of investment securities for the nine months ended September 30, 2017. Sales proceeds and calls totaled $52.8 million for the nine months ended September 30, 2017. There were no sales of investment securities for the three months ended September 30, 2017. At September 30, 2018 and December 31, 2017 none of the Company's securities were pledged as collateral with the Federal Home Loan Bank ("FHLB") or any other institution. The following table provides information regarding investment securities with unrealized losses, aggregated by investment category and length of time that individual securities had been in a continuous unrealized loss position at September 30, 2018 and December 31, 2017:
There were thirty-one and fifteen investment securities as of September 30, 2018 and December 31, 2017, respectively, in which the fair value of the security was less than the amortized cost of the security. The U.S. Government and agency obligations owned are either direct obligations of the U.S. Government or guaranteed by the U.S. Government, therefore the contractual cash flows are guaranteed and as a result the unrealized losses in this portfolio are not considered other than temporarily impaired. The Company continually monitors its state agency, municipal and corporate bond portfolios and at this time these portfolios have minimal default risk because state agency, municipal and corporate bonds are all rated investment grade or deemed to be of investment grade quality. The Company has the intent and ability to retain its investment securities in an unrealized loss position at September 30, 2018 until the decline in value has recovered or the security has matured. |
Loans Receivable and Allowance for Loan Losses |
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Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Receivable and Allowance for Loan Losses | Loans Receivable and Allowance for Loan Losses The following table sets forth a summary of the loan portfolio at September 30, 2018 and December 31, 2017:
Lending activities are conducted principally in the New York metropolitan area, including the Fairfield and New Haven County regions of Connecticut, and consist of commercial real estate loans, commercial business loans and a variety of consumer loans. Loans may also be granted for the construction of residential homes and commercial properties. The majority of commercial mortgage loans are collateralized by first or second mortgages on real estate. Risk management The Company has established credit policies applicable to each type of lending activity in which it engages. The Company evaluates the creditworthiness of each customer and extends credit of up to 80% of the market value of the collateral, depending on the borrower's creditworthiness and the type of collateral. The borrower’s ability to service the debt is monitored on an ongoing basis. Real estate is the primary form of collateral. Other important forms of collateral are business assets, time deposits and marketable securities. While collateral provides assurance as a secondary source of repayment, the Company ordinarily requires the primary source of repayment for commercial loans to be based on the borrower’s ability to generate continuing cash flows. In the fourth quarter of 2017, management made the strategic decision to cease the origination of residential mortgage loans. The Company’s policy for residential lending allowed that, generally, the amount of the loan may not exceed 80% of the original appraised value of the property. In certain situations, the amount may have exceeded 80% LTV either with private mortgage insurance being required for that portion of the residential loan in excess of 80% of the appraised value of the property or where secondary financing is provided by a housing authority program second mortgage, a community’s low/moderate income housing program, or a religious or civic organization. Credit quality of loans and the allowance for loan losses Management segregates the loan portfolio into defined segments, which are used to develop and document a systematic method for determining its allowance for loan losses. The portfolio segments are segregated based on loan types and the underlying risk factors present in each loan type. Such risk factors are periodically reviewed by management and revised as deemed appropriate. The Company's loan portfolio is segregated into the following portfolio segments: Commercial Real Estate: This portfolio segment includes loans secured by commercial real estate, multi-family dwellings and investor-owned one-to-four family dwellings. Loans secured by commercial real estate generally have larger loan balances and more credit risk than owner occupied one-to-four family mortgage loans. Construction: This portfolio segment includes commercial construction loans for commercial development projects, including condominiums, apartment buildings, and single family subdivisions as well as office buildings, retail and other income producing properties and land loans, which are loans made with land as collateral. In addition, this portfolio includes residential construction loans to individuals to finance the construction of residential dwellings for personal use located in our market area. Construction and land development financing generally involves greater credit risk than long-term financing on improved, owner-occupied or leased real estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the value of the property at completion of construction compared to the estimated cost (including interest) of construction and other assumptions. If the estimate of construction cost proves to be inaccurate, the Company may be required to advance additional funds beyond the amount originally committed in order to protect the value of the property. Moreover, if the estimated value of the completed project proves to be inaccurate, the borrower may hold a property with a value that is insufficient to assure full repayment through sale or refinance. Construction loans also expose the Company to the risks that improvements will not be completed on time in accordance with specifications and projected costs and that repayment will depend on the successful operation or sale of the properties, which may cause some borrowers to be unable to continue paying debt service, which exposes the Company to greater risk of non-payment and loss. Commercial Business: This portfolio segment includes commercial business loans secured by assignments of corporate assets and personal guarantees of the business owners. Commercial business loans generally have higher interest rates and shorter terms than other loans, but they also have increased difficulty of loan monitoring and a higher risk of default since their repayment generally depends on the successful operation of the borrower’s business. Consumer: This portfolio segment includes loans secured by savings or certificate accounts, or automobiles, as well as unsecured personal loans and overdraft lines of credit. This type of loan entails greater risk than residential mortgage loans, particularly in the case of loans that are unsecured or secured by assets that depreciate rapidly. Residential Real Estate: This portfolio segment consists of first mortgage loans secured by one-to-four family owner occupied residential properties for personal use located in our market area. This segment also includes home equity loans and home equity lines of credit secured by owner occupied one-to-four family residential properties. Loans of this type are written at a combined maximum of 80% of the appraised value of the property and the Company requires a first or second lien position on the property. These loans can be affected by economic conditions and the values of the underlying properties. Allowance for loan losses As of December 31, 2017 the Company changed its methodology to estimate its allowance for loan losses. The change in methodology resulted in an update to the underlying loan loss assumptions, incorporating the most recent industry, peer and product loss trends. This resulted in a non-recurring, pretax $1.3 million reduction in the reserve during the fourth quarter of 2017 and for the year ended December 31, 2017. The following tables set forth the activity in the Company’s allowance for loan losses for the three and nine months ended September 30, 2018 and 2017, by portfolio segment:
Loans evaluated for impairment and the related allowance for loan losses as of September 30, 2018 and December 31, 2017 were as follows:
Credit quality indicators To measure credit risk for the loan portfolios, the Company employs a credit risk rating system. This risk rating represents an assessed level of a loan’s risk based on the character and creditworthiness of the borrower/guarantor, the capacity of the borrower to adequately service the debt, any credit enhancements or additional sources of repayment, and the quality, value and coverage of the collateral, if any. The objectives of the Company’s risk rating system are to provide the Board of Directors and senior management with an objective assessment of the overall quality of the loan portfolio, to promptly and accurately identify loans with well-defined credit weaknesses so that timely action can be taken to minimize credit loss, to identify relevant trends affecting the collectability of the loan portfolio, to isolate potential problem areas and to provide essential information for determining the adequacy of the allowance for loan losses. The Company’s credit risk rating system has nine grades, with each grade corresponding to a progressively greater risk of default. Risk ratings of 1 through 5 are "Pass" categories and risk ratings of 6 through 9 are criticized asset categories as defined by the regulatory agencies. A “Special Mention” (6) credit has a potential weakness which, if uncorrected, may result in a deterioration of the repayment prospects or inadequately protect the Company’s credit position at some time in the future. “Substandard” (7) loans are credits that have a well-defined weakness or weaknesses that jeopardize the full repayment of the debt. An asset rated “Doubtful” (8) has all the weaknesses inherent in a substandard asset and which, in addition, make collection or liquidation in full highly questionable and improbable, when considering existing facts, conditions, and values. Loans classified as “Loss” (9) are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value; rather, it is not practical or desirable to defer writing-off this essentially worthless asset even though partial recovery may be made in the future. Risk ratings are assigned as necessary to differentiate risk within the portfolio. They are reviewed on an ongoing basis through the annual loan review process performed by Company personnel, normal renewal activity and the quarterly watchlist and watched asset report process. They are revised to reflect changes in the borrower's financial condition and outlook, debt service coverage capability, repayment performance, collateral value and coverage as well as other considerations. In addition to internal review at multiple points, outsourced loan review opines on risk ratings with regard to the sample of loans their review covers. The following tables present credit risk ratings by loan segment as of September 30, 2018 and December 31, 2017:
Loan portfolio aging analysis When a loan is 15 days past due, the Company sends the borrower a late notice. The Company also attempts to contact the borrower by phone if the delinquency is not corrected promptly after the notice has been sent. When the loan is 30 days past due, the Company mails the borrower a letter reminding the borrower of the delinquency, and attempts to contact the borrower personally to determine the reason for the delinquency and ensure the borrower understands the terms of the loan. If necessary, on the subsequent 90th day of delinquency, the Company may take other appropriate legal action. A summary report of all loans 30 days or more past due is provided to the Board of Directors of the Company periodically. Loans greater than 90 days past due are generally put on nonaccrual status. A nonaccrual loan is restored to accrual status when it is no longer delinquent and collectability of interest and principal is no longer in doubt. A loan is considered to be no longer delinquent when timely payments are made for a period of at least six months (one year for loans providing for quarterly or semi-annual payments) by the borrower in accordance with the contractual terms. The following tables set forth certain information with respect to our loan portfolio delinquencies by portfolio segment and amount as of September 30, 2018 and December 31, 2017:
There were no loans delinquent greater than 90 days and still accruing as of September 30, 2018 and December 31, 2017. Loans on nonaccrual status The following is a summary of nonaccrual loans by portfolio segment as of September 30, 2018 and December 31, 2017:
At September 30, 2018 and December 31, 2017, there were no commitments to lend additional funds to any borrower on nonaccrual status. Nonaccrual loans with no specific reserve totaled $5.4 million and $3.5 million at September 30, 2018 and December 31, 2017, respectively. Impaired loans An impaired loan generally is one for which it is probable, based on current information, the Company will not collect all the amounts due in accordance with the contractual terms of the loan. Loans are individually evaluated for impairment. When the Company classifies a problem loan as impaired, it evaluates whether a specific valuation allowance is required for that portion of the asset that is estimated to be impaired. The following table summarizes impaired loans by portfolio segment as of September 30, 2018 and December 31, 2017:
The following table summarizes the average carrying amount of impaired loans and interest income recognized on impaired loans by portfolio segment as of September 30, 2018 and September 30, 2017:
Troubled debt restructurings ("TDR"s) Modifications to a loan are considered to be a troubled debt restructuring when both of the following conditions are met: 1) the borrower is experiencing financial difficulties and 2) the modification constitutes a concession that is not in line with market rates and/or terms. Modified terms are dependent upon the financial position and needs of the individual borrower. Troubled debt restructurings are classified as impaired loans. If a performing loan is restructured into a TDR, it remains in performing status. If a nonperforming loan is restructured into a TDR, it continues to be carried in nonaccrual status. Nonaccrual classification may be removed if the borrower demonstrates compliance with the modified terms for a minimum of six months. Loans classified as TDRs totaled $7.4 million at September 30, 2018 and $4.9 million at December 31, 2017. The following tables provide information on loans that were modified as TDRs during the periods indicated.
At September 30, 2018 and December 31, 2017 there were seven nonaccrual loans identified as TDRs totaling $4.2 million and four nonaccrual loans identified as TDRs totaling $0.6 million, respectively. The following table provides information on how loans were modified as TDRs during the three and nine months ended September 30, 2018 and 2017:
One loan, in the amount of $2.0 million, re-defaulted during the three months ended September 30, 2018. There were no loans modified in a troubled debt restructuring, for which there was a payment default at September 30, 2017. |
Shareholders' Equity |
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Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders' Equity Common stock The Company has 10,000,000 shares authorized and 7,842,996 shares issued and outstanding at September 30, 2018 and 10,000,000 shares authorized and 7,751,424 shares issued and outstanding at December 31, 2017. The Company's stock is traded on the NASDAQ stock exchange under the ticker symbol BWFG. Warrants On October 1, 2014, the Company acquired Quinnipiac Bank and Trust Co. and, in connection therewith, the Company issued 68,600 warrants to former Quinnipiac warrant holders in accordance with the merger agreement. Each warrant was automatically converted into a warrant to purchase 0.56 shares of the Company’s common stock for an exercise price of $17.86. During the first quarter of 2018 all remaining warrants were exercised. The Company does not have any warrants outstanding as of September 30, 2018. Dividends The Company’s shareholders are entitled to dividends when and if declared by the Board of Directors, out of funds legally available. The ability of the Company to pay dividends depends, in part, on the ability of the Bank to pay dividends to the Company. In accordance with Connecticut statutes, regulatory approval is required to pay dividends in excess of the Bank’s profits retained in the current year plus retained profits from the previous two years. The Bank is also prohibited from paying dividends that would reduce its capital ratios below minimum regulatory requirements. The Company did not repurchase any of its common stock during the nine months ended September 30, 2018 or during the year ended December 31, 2017. |
Comprehensive Income |
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income | Comprehensive Income Comprehensive income represents the sum of net income and items of other comprehensive income or loss, including net unrealized gains or losses on securities available for sale and net unrealized gains or losses on derivatives. The Company’s total comprehensive income or loss for the three and nine months ended September 30, 2018 and 2017 is reported in the Consolidated Statements of Comprehensive Income. The following tables present the changes in accumulated other comprehensive income (loss) by component, net of tax for the three and nine months ended September 30, 2018 and 2017:
The following table provides information for the items reclassified from accumulated other comprehensive income or loss:
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Earnings per Share ("EPS") |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share (EPS) | Earnings per Share ("EPS") Unvested restricted stock awards that contain non-forfeitable rights to dividends are participating securities and are included in the computation of EPS pursuant to the two-class method. The two-class method is an earnings allocation formula that determines EPS for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. The Company’s unvested restricted stock awards qualify as participating securities. Net income is allocated between the common stock and participating securities pursuant to the two-class method. Basic EPS is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period, excluding participating unvested restricted stock awards. Diluted EPS is computed in a similar manner, except that the denominator includes the number of additional common shares that would have been outstanding if potentially dilutive common shares were issued using the treasury stock method. The following table is a reconciliation of earnings available to common shareholders and basic weighted average common shares outstanding to diluted weighted average common shares outstanding, reflecting the application of the two-class method:
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Regulatory Matters |
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Regulatory Matters | Regulatory Matters The Federal Reserve, the FDIC and the other federal and state bank regulatory agencies establish regulatory capital guidelines for U.S. banking organizations. As of January 1, 2015, the Company and the Bank became subject to new capital rules set forth by the Federal Reserve, the FDIC and the other federal and state bank regulatory agencies. The capital rules revise the banking agencies’ leverage and risk-based capital requirements and the method for calculating risk weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act (the Basel III Capital Rules). The Basel III Capital Rules establish a minimum Common Equity Tier 1 capital requirement of 4.5% of risk-weighted assets; set the minimum leverage ratio at 4.0% of total assets; increased the minimum Tier 1 capital to risk-weighted assets requirement from 4.0% to 6.0%; and retained the minimum total capital to risk weighted assets requirement at 8.0%. A “well-capitalized” institution must generally maintain capital ratios 100-200 basis points higher than the minimum guidelines. The Basel III Capital Rules also change the risk weights assigned to certain assets. The Basel III Capital Rules assigned a higher risk weight (150%) to loans that are more than 90 days past due or are on nonaccrual status and to certain commercial real estate facilities that finance the acquisition, development or construction of real property. The Basel III Capital Rules also alter the risk weighting for other assets, including marketable equity securities that are risk weighted generally at 300%. The Basel III Capital Rules require certain components of accumulated other comprehensive income (loss) to be included for purposes of calculating regulatory capital requirements unless a one-time opt-out is exercised. The Bank did exercise its opt-out option and will exclude the unrealized gain (loss) on investment securities component of accumulated other comprehensive income (loss) from regulatory capital. The Basel III Capital Rules limit a banking organization’s capital distributions and certain discretionary bonus payments to executive officers if the banking organization does not hold a “capital conservation buffer” consisting of 2.5% of regulatory risk based capital ratios in addition to the amount necessary to meet its minimum risk-based capital requirements. The required minimum conservation buffer began to be phased in incrementally, starting at 0.625% on January 1, 2016, increased to 1.25% on January 1, 2017, increased to 1.875% on January 1, 2018 and will continue to increase to 2.5% on January 1, 2019. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. As of September 30, 2018, the Bank and Company have met all capital adequacy requirements to which they are subject. There are no conditions or events since then that management believes have changed this conclusion. The capital amounts and ratios for the Bank and the Company at September 30, 2018 and December 31, 2017 were as follows:
Regulatory Restrictions on Dividends The ability of the Company to pay dividends depends, in part, on the ability of the Bank to pay dividends to the Company. In accordance with Connecticut statutes, regulatory approval is required to pay dividends in excess of the Bank’s profits retained in the current year plus retained profits from the previous two years. The Bank is also prohibited from paying dividends that would reduce its capital ratios below minimum regulatory requirements. Reserve Requirements on Cash The Bank is required to maintain a minimum reserve balance of $15.9 million and $11.1 million in the Federal Reserve Bank at September 30, 2018 and December 31, 2017, respectively. The Bank is also required to maintain a minimum reserve balance of $4.5 million and $7.5 million at Atlantic Community Bankers Bank (formerly Bankers’ Bank Northeast) at September 30, 2018 and December 31, 2017, respectively. These balances are maintained for clearing purposes in the ordinary course of business and do not represent restricted cash. |
Stock-Based Compensation |
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Stock-Based Compensation | Stock-Based Compensation Equity award plans The Company has stock options or unvested restricted stock outstanding under three equity award plans, which are collectively referred to as the “Plan”. The current plan under which any future issuances of equity awards will be made is the 2012 BNC Financial Group, Inc. Stock Plan, or the “2012 Plan,” amended on June 26, 2013. All equity awards made under the 2012 Plan are made by means of an award agreement, which contains the specific terms and conditions of the grant. To date, all equity awards have been in the form of share options or restricted stock. At September 30, 2018, there were 588,454 shares reserved for future issuance under the 2012 Plan. Stock Options: The Company accounts for stock options based on the fair value at the date of grant and records option related expense over the vesting period of such awards on a straight line basis. There were no options granted during the nine months ended September 30, 2018. A summary of the status of outstanding share options for the nine months ended September 30, 2018 is presented below:
Intrinsic value is the amount by which the fair value of the underlying stock exceeds the exercise price of an option on the exercise date. The total intrinsic value of share options exercised during the nine months ended September 30, 2018 was $0.4 million. Restricted Stock: Restricted stock provides grantees with rights to shares of common stock upon completion of a service period. Shares of unvested restricted stock are considered participating securities. Restricted stock awards generally vest over one to five years. The following table presents the activity for restricted stock for the nine months ended September 30, 2018:
The Company's restricted stock expense for the nine months ended September 30, 2018 and 2017 were $1.0 million and $0.7 million, respectively. At September 30, 2018 there was $2.2 million of unrecognized stock compensation expense for restricted stock, expected to be recognized over a weighted average period of 1.7 years. Performance Based Restricted Stock: On February 20, 2018 the Company issued 11,250 shares of restricted stock with performance and service conditions pursuant to the Company’s 2012 Stock Plan. The awards vest over a 3 year service period, provided certain performance metrics are met. The share quantity, which can range between 0% and 200%, of the grant is dependent on the degree to which the performance metrics are met. The Company records an expense over the vesting period based on (a) the probability that the performance metric will be met and (b) the fair market value of the Company’s stock at the date of the grant. |
Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Derivative Instruments The Company manages economic risks, including interest rate, liquidity, and credit risk by managing the amount, sources, and duration of its funding along with the use of interest rate derivative financial instruments, namely interest rate swaps. The Company does not use derivatives for speculative purposes. As of September 30, 2018, the Bank was a party to six interest rate swaps to add stability to interest expense and to manage its exposure to interest rate movements. The notional amount for each swap is $25 million and in each case, the Bank has entered into pay-fixed Libor interest rate swap to convert rolling 90 days Federal Home Loan Bank advances. In addition, as of September 30, 2018, the Bank has entered into three forward-starting interest rate swaps on probable future FHLB advances or brokered deposits. The Company accounts for its interest rate swaps as effective cash flow hedges. None of the interest rate swap agreements contain any credit risk related contingent features. A hedging instrument is expected at inception to be highly effective at offsetting changes in the hedged transactions attributable to the changes in the hedged risk. Interest rate swaps with a positive fair value are recorded as other assets and interest rate swaps with a negative fair value are recorded as other liabilities on the Consolidated Balance Sheets. Information about derivative instruments at September 30, 2018 and December 31, 2017 is as follows:
(1) The effective date of the forward-starting interest rate swaps listed above are January 2, 2019, January 2, 2020 and August 26, 2020, respectively.
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. The Company expects to reclassify $1.3 million as a reduction to interest expense during the next 12 months. The Company assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged item or transaction. The ineffective portion of changes in the fair value of the derivatives is recognized directly in earnings. The interest rate swap assets are presented in other assets and the interest rate swap liabilities are presented in accrued expenses and other liabilities in the Consolidated Balance Sheets. The Company's cash flow hedge positions consist of interest rate swap transactions as detailed in the table below:
This hedge strategy converts the floating rate of interest on short term FHLB advances to fixed interest rates, thereby protecting the Bank from floating interest rate variability. Changes in the consolidated statements of comprehensive income related to interest rate derivatives designated as hedges of cash flows were as follows for the three and nine months ended September 30, 2018 and 2017:
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Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments GAAP requires disclosure of fair value information about financial instruments, whether or not recognized in the Consolidated Balance Sheets, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rates and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparisons to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction. The estimated fair value amounts have been measured as of the respective period-ends, and have not been reevaluated or updated for purposes of these consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each period-end. The Company assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. As a result, the fair values of the Company’s financial instruments will change when interest rate levels change and that change may be either favorable or unfavorable to the Company. Management attempts to match maturities of assets and liabilities to the extent believed necessary to minimize interest rate risk. However, borrowers with fixed rate obligations are less likely to prepay in a rising rate environment and more likely to prepay in a falling rate environment. Conversely, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. Management monitors rates and maturities of assets and liabilities and attempts to minimize interest rate risk. The carrying values, fair values and placement in the fair value hierarchy of the Company's financial instruments at September 30, 2018 and December 31, 2017 were as follows:
The following methods and assumptions were used by management in estimating the fair value of its financial instruments: Cash and due from banks, federal funds sold, accrued interest receivable and accrued interest payable: The carrying amount is a reasonable estimate of fair value. Available for sale and held to maturity securities: Fair values are based on quoted market prices or dealer quotes, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities. Level 3 held to maturity securities represent private placement municipal housing authority bonds for which no quoted market price is available. The fair value for these securities is estimated using a discounted cash flow model, using discount rates ranging from 5.0% to 5.3% as of September 30, 2018 and 4.5% to 4.8% as of December 31, 2017. These securities are CRA eligible investments. FHLB stock: The carrying value of FHLB stock approximates fair value based on the most recent redemption provisions of the FHLB. Loans receivable: For variable rate loans which reprice frequently and have no significant change in credit risk, fair values are based on carrying values. The fair value of fixed rate loans are estimated by discounting the future cash flows using the rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. In connection with the adoption of ASU 2016-01 on January 1, 2018, we refined our methodology to estimate the fair value of our loan portfolio using an exit price notion, resulting in prior periods no longer being comparable. The exit price notion requires determination of the price at which willing market participants would transact at the measurement date under current market conditions depending on facts and circumstances, such as origination rates, credit risk, transaction costs, liquidity, national and regional market trends and other adjustments, utilizing publicly available rates and indices. The application of an exit price notion requires the use of significant judgment. Derivative asset (liability): The valuation of the Company’s interest rate swaps is obtained from a third-party pricing service and is determined using a discounted cash flow analysis on the expected cash flows of each derivative. The pricing analysis is based on observable inputs for the contractual terms of the derivatives, including the period to maturity and interest rate curves. The Bank also considers the creditworthiness of each counterparty for assets and the creditworthiness of the Bank for liabilities. Servicing asset (liability): Servicing assets and liabilities do not trade in an active, open market with readily observable prices. The Company estimates the fair value of servicing assets and liabilities using discounted cash flow models, incorporating numerous assumptions from the perspective of a market participant, including market discount rates. Deposits: The fair value of demand deposits, regular savings and certain money market deposits is the amount payable on demand at the reporting date. The fair value of certificates of deposit and other time deposits is estimated using a discounted cash flow calculation that applies interest rates currently being offered for deposits of similar remaining maturities to a schedule of aggregated expected maturities on such deposits. Borrowings and Subordinated Debentures: The fair value of the Company’s borrowings and subordinated debentures is estimated using a discounted cash flow calculation that applies discount rates currently offered based on similar maturities. The Bank also considers its own creditworthiness in determining the fair value of its borrowings and subordinated debt. Off-balance-sheet instruments: Loan commitments on which the committed interest rate is less than the current market rate are insignificant at September 30, 2018 and December 31, 2017. |
Fair Value Measurements |
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Fair Value Measurements | Fair Value Measurements The Company is required to account for certain assets at fair value on a recurring or non-recurring basis. The Company determines fair value in accordance with GAAP, which defines fair value and establishes a framework for measuring fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. GAAP establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair values:
Valuation techniques based on unobservable inputs are highly subjective and require judgments regarding significant matters such as the amount and timing of future cash flows and the selection of discount rates that may appropriately reflect market and credit risks. Changes in these judgments often have a material impact on the fair value estimates. In addition, since these estimates are as of a specific point in time they are susceptible to material near-term changes. Financial instruments measured at fair value on a recurring basis The following table details the financial instruments carried at fair value on a recurring basis at September 30, 2018 and December 31, 2017, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine the fair value. The Company had no transfers into or out of Levels 1, 2 or 3 during the nine months ended September 30, 2018 and the year ended December 31, 2017, except for the Company's investment in a U.S.Treasury note that was transfered from Level 2 to Level 1.
Available for sale investment securities: The fair value of the Company’s investment securities are estimated by using pricing models or quoted prices of securities with similar characteristics (i.e. matrix pricing) and are classified within Level 1 or Level 2 of the valuation hierarchy. The pricing is primarily sourced from third party pricing services, overseen by management. Derivative assets and liabilities: The Company’s derivative assets and liabilities consist of transactions as part of management’s strategy to manage interest rate risk. The valuation of the Company’s interest rate swaps is obtained from a third-party pricing service and is determined using a discounted cash flow analysis on the expected cash flows of each derivative. The pricing analysis is based on observable inputs for the contractual terms of the derivatives, including the period to maturity and interest rate curves. The Company has determined that the majority of the inputs used to value its interest rate derivatives fall within Level 2 of the fair value hierarchy. Financial instruments measured at fair value on a nonrecurring basis Certain assets and liabilities are measured at fair value on a non-recurring basis in accordance with GAAP. These include assets that are measured at the lower-of-cost-or-market that were recognized at fair value below cost at the end of the period as well as assets that are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. The following table details the financial instruments measured at fair value on a nonrecurring basis at September 30, 2018 and December 31, 2017, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine the fair value:
The following table presents information about quantitative inputs and assumptions for Level 3 financial instruments carried at fair value on a nonrecurring basis at September 30, 2018 and December 31, 2017:
Impaired loans: Loans are generally not recorded at fair value on a recurring basis. Periodically, the Company records nonrecurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectible portions of those loans. Nonrecurring adjustments also include certain impairment amounts for collateral-dependent loans calculated in accordance with ASC 310-10 when establishing the allowance for credit losses. Such amounts are generally based on the fair value of the underlying collateral supporting the loan. Collateral is typically valued using appraisals or other indications of value based on recent comparable sales of similar properties or other assumptions. Estimates of fair value based on collateral are generally based on assumptions not observable in the marketplace and therefore such valuations have been classified as Level 3. For those loans where the primary source of repayment is cash flow from operations, adjustments include impairment amounts calculated based on the perceived collectability of interest payments on the basis of a discounted cash flow analysis utilizing a discount rate equivalent to the original note rate. Foreclosed real estate: The Company classifies property acquired through foreclosure or acceptance of deed-in-lieu of foreclosure as foreclosed real estate and repossessed assets in its financial statements. Upon foreclosure, the property securing the loan is written down to fair value less selling costs. The write-down is based upon differences between the appraised value and the book value. Appraisals are based on observable market data such as comparable sales, however assumptions made in determining comparability are unobservable and therefore these assets are classified as Level 3 within the valuation hierarchy. Servicing assets and liabilities: When loans are sold, on a servicing retained basis, servicing rights are initially recorded at fair value. All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized. The fair value of servicing assets and liabilities are not measured on an ongoing basis but are subject to fair value adjustments when and if the assets are deemed to be impaired. |
Subordinated debentures |
9 Months Ended |
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Sep. 30, 2018 | |
Subordinated Borrowings [Abstract] | |
Subordinated debentures | Subordinated debentures On August 19, 2015, the Company completed a private placement of $25.5 million in aggregate principal amount of fixed rate subordinated notes (the “Notes”) to certain institutional investors. The Notes are non-callable for five years, have a stated maturity of August 15, 2025, and bear interest at a quarterly pay fixed rate of 5.75% per annum to the maturity date or the early redemption date. The Notes have been structured to qualify for the Company as Tier 2 capital under regulatory guidelines. We used the net proceeds for general corporate purposes, which included maintaining liquidity at the holding company, providing equity capital to the Bank to fund balance sheet growth and our working capital needs. The Notes were assigned an investment grade rating of BBB by Kroll Bond Rating Agency, which was reaffirmed in the third quarter of 2018. |
Income Taxes |
9 Months Ended |
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Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company is subject to federal and state income taxes at the statutory rates and makes several adjustments to arrive at the effective tax rate. The Company adjusts for non-deductible interest earned on municipal bonds, income earned on our investment in bank owned life insurance, windfall tax benefits resulting from restricted stock vesting and reductions in Connecticut state income tax from the operation of our passive investment company subsidiary. Income tax expense for the three months ended September 30, 2018 and 2017 totaled $1.1 million and $1.9 million, respectively. The effective tax rates for the three months ended September 30, 2018 and 2017 were 17.9%, and 30.8%, respectively. The decrease in the effective tax rate for the three months ended September 30, 2018 is driven by a reduction in the statutory corporate tax rate from 35% to 21% as a result of tax reform from the Tax Cuts and Jobs Act of 2017. Income tax expense for the nine months ended September 30, 2018 and 2017 totaled $3.5 million and $6.0 million, respectively. The effective tax rates for the nine months ended September 30, 2018 and 2017 were 19.8%, and 33.9%, respectively. The decrease in the effective tax rate for the nine months ended September 30, 2018 is driven by a reduction in the statutory corporate tax rate from 35% to 21% as a result of tax reform from the Tax Cuts and Jobs Act of 2017. |
Subsequent Events |
9 Months Ended |
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Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 30, 2018, the Company’s Board of Directors declared a $0.12 per share cash dividend, payable on November 26, 2018 to shareholders of record on November 16, 2018. |
Nature of Operations and Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of consolidation | Principles of consolidation The consolidated financial statements include the accounts of the Company and the Bank, including its wholly owned passive investment company subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use of estimates | Use of estimates The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”) and general practices within the banking industry. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities as of the date of the consolidated balance sheet and revenue and expenses for the period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the allowance for loan losses, stock-based compensation, valuation of derivative instruments, investment securities, and deferred income taxes and the evaluation of investment securities for other than temporary impairment. |
Basis of consolidated financial statement presentation | Basis of consolidated financial statement presentation The unaudited consolidated financial statements presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and Rule 10-1 of Regulation S-X and do not include all of the information and note disclosures required by GAAP. In the opinion of management, all adjustments (consisting of normal recurring adjustments) and disclosures considered necessary for the fair presentation of the accompanying unaudited interim consolidated financial statements have been included. Interim results are not necessarily reflective of the results that may be expected for the year ending December 31, 2018. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included on Form 10-K for the year ended December 31, 2017. |
Significant concentrations of credit risk | Significant concentrations of credit risk Most of the Company’s activities are with customers located in the New York metropolitan area and throughout Fairfield and New Haven Counties and the surrounding region of Connecticut, and declines in property values in these areas could significantly impact the Company. The Company has a significant concentration in commercial real estate loans. Management does not believe this presents any special risk. The Company does not have any significant concentrations in any one industry or customer. |
Reclassification | Reclassification Certain prior period amounts have been reclassified to conform to the 2018 financial statement presentation. These reclassifications only changed the reporting categories and did not affect the consolidated results of operations or consolidated financial position of the Company. |
Recent accounting pronouncements | Recent accounting pronouncements The following section includes changes in accounting principles and potential effects of new accounting guidance and pronouncements. ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606): This ASU clarifies the principles for recognizing revenue. The guidance notes that an entity should apply the following steps when recognizing revenue: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. In 2016, the FASB issued further implementation guidance regarding revenue recognition. This additional guidance included clarification on certain principal versus agent considerations within the implementation of the guidance as well as clarification related to identifying performance obligations and licensing. The guidance also requires new qualitative and quantitative disclosures, including disaggregation of revenues and descriptions of performance obligations. The guidance along with its updates is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company adopted the guidance on January 1, 2018 using the modified retrospective method. In evaluating this standard, management has determined that the majority of revenue earned by the Company is from revenue streams not included in the scope of this standard and for in-scope revenue streams management determined that a cumulative-effect adjustment to opening retained earnings as a result of adopting this standard is not needed. ASU No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): “Recognition and Measurement of Financial Assets and Financial Liabilities.” The ASU has been issued to improve the recognition and measurement of financial instruments by requiring 1) equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; 2) separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements; 3) the use of the exit price notion when measuring fair value of financial instruments for disclosure purposes; and 4) separate presentation by the reporting organization in other comprehensive income for the portion of the total change in the fair value of a liability resulting from the change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The standard was effective for the Company beginning on January 1, 2018. The adoption of this ASU did not have a material impact on the Company’s financial statements. ASU No. 2016-02, Leases (Topic 842): The amendments in this ASU require lessees to recognize, on the balance sheet, assets and liabilities for the rights and obligations created by leases. Accounting by lessors will remain largely unchanged. In July 2018, the FASB issued a subsequent update which introduced a new transition method, under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The guidance will be effective for the Company on January 1, 2019, with early adoption permitted. The Company does not expect the application of this guidance to have a material impact on the Company’s financial statements. ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): “Measurement of Credit Losses on Financial Instruments.” The ASU changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that will replace today’s “incurred loss” model and can result in the earlier recognition of credit losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except that the losses will be recognized as an allowance. The amendments in this update will be effective for the Company on January 1, 2020, including interim periods within that fiscal year. Early adoption is permitted as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Management is currently evaluating the impact of its pending adoption of this guidance on the Company’s financial statements. ASU No. 2016-15, Statement of Cash Flows (Topic 230): “Classification of Certain Cash Receipts and Cash Payments.” This ASU changes how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. The amendments address the classification of the following eight items in the statement of cash flows; debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions and separately identifiable cash flows and application of the Predominance Principle. The amendments in this update were effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The adoption of this ASU did not have a material impact on the Company’s financial statements. ASU No. 2016-18, Statement of Cash Flows (Topic 230): “Restricted Cash.” This ASU provide guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flows. The amendments in this update require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this update were effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The adoption of this ASU did not have a material impact on the Company’s financial statements. ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): “Simplifying the Test for Goodwill Impairment.” This ASU simplifies the test for goodwill impairment by eliminating step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity was required to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, this ASU also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. Therefore, the same impairment assessment applies to all reporting units. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The amendments will be effective for the Company for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect the application of this guidance to have a material impact on the Company’s financial statements. ASU No. 2017-08, Receivables – Nonrefundable Fees and Other Costs (subtopic 310-20): “Premium Amortization on Purchased Callable Debt Securities.” The amendments in this update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The amendments will be effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company does not expect the application of this guidance to have a material impact on the Company’s financial statements. ASU No. 2017-09, Compensation – Stock Compensation (Topic 718): The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The amendments in this update were effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The adoption of this ASU did not have a material impact on the Company’s financial statements. ASU No. 2017-12, Derivatives and Hedging: “Targeted Improvements to Accounting for Hedging Activities” (Topic 815): The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. ASU 2017-12 is effective for public business entities for fiscal years beginning after December 15, 2018, with early adoption, including adoption in an interim period, permitted. This ASU requires a modified retrospective transition method in which the Company will recognize the cumulative effect of the change on the opening balance of each affected component of equity in the statement of financial position as of the date of adoption. The Company does not expect the application of this guidance to have a material impact on the Company’s financial statements. ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): This update requires a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the newly enacted federal corporate tax rate. The amount of the reclassification would be the difference between the historical 35% corporate income tax rate and the newly enacted 21% corporate tax rate. The amendments would be effective for all entities for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption of the amendments would be permitted including adoption in any interim period, for public business entities for reporting periods for which financial statements have not yet been issued and all other entities for reporting periods for which financial statements have not yet been made available for issuance. An entity would apply the amendments in the update retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act of 2017 is recognized. The Company elected to adopt this update and recorded a $0.3 million reduction to retained earnings and increase to accumulated other comprehensive income as of December 31, 2017. ASU No. 2018-03, Technical Corrections and Improvements to Financial Instruments – Overall (Subtopic 825-10): The purpose of this update is to clarify certain aspects of the guidance in ASU No. 2016-01 regarding equity securities without a readily determinable fair value, forward contracts and purchased options, presentation requirements for certain fair value option liabilities, fair value option liabilities denominated in a foreign currency, and transition guidance for equity securities without a readily determinable fair value. Public business entities with fiscal years beginning between December 15, 2017 and June 15, 2018, are not required to adopt these amendments until the interim period beginning after June 15, 2018 and public business entities with fiscal years beginning between June 15, 2018 and December 15, 2018 are not required to adopt these amendments before adopting the amendments in update 2016-01. The Company does not expect the application of this guidance to have a material impact on the Company’s financial statements. ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): "Improvements to Nonemployee Share-Based Payment Accounting” (ASU 2018-07). The amendments in this update expand the scope of Topic 718 to include share based payments to nonemployees. An entity is required to apply the requirements of Topic 718 to nonemployee awards except for specific guidance related to option pricing models and the attribution of cost. ASU 2018-07 will be effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods in the year of adoption. Early adoption is permitted for any interim or annual period. The Company does not expect the application of this guidance to have a material impact on the Company’s financial statements. ASU No. 2018-13, Fair Value Measurement (Topic 820): "Changes to the Disclosure Requirements for Fair Value Measurement." The amendments in this update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. The following disclosure requirements were removed from topic 820 for public entities; (1) The amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy (2) The policy for timing of transfers between levels and (3) The valuation processes for Level 3 fair value measurements. This update also modified and added disclosure requirements to Topic 820, including adding (1) The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and (2) The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. ASU 2018-13 will be effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods in the year of adoption. Early adoption is permitted for any interim or annual period. The Company does not expect the application of this guidance to have a material impact on the Company’s financial statements. |
Investment Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of amortized cost, gross unrealized gains and losses and fair values of available for sale and held to maturity securities | The amortized cost, gross unrealized gains and losses and fair value of available for sale and held to maturity securities at September 30, 2018 were as follows:
The amortized cost, gross unrealized gains and losses and fair value of available for sale and held to maturity securities at December 31, 2017 were as follows:
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Schedule of fair value and related unrealized losses of temporarily impaired investment securities, aggregated by investment category | The following table provides information regarding investment securities with unrealized losses, aggregated by investment category and length of time that individual securities had been in a continuous unrealized loss position at September 30, 2018 and December 31, 2017:
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Loans Receivable and Allowance for Loan Losses (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of loan portfolio | The following table sets forth a summary of the loan portfolio at September 30, 2018 and December 31, 2017:
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Schedule of allowance for loan losses | The following tables set forth the activity in the Company’s allowance for loan losses for the three and nine months ended September 30, 2018 and 2017, by portfolio segment:
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Schedule of portfolio segment and impairment methodology, of the allowance for loan losses and related portfolio | Loans evaluated for impairment and the related allowance for loan losses as of September 30, 2018 and December 31, 2017 were as follows:
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Schedule of loan portfolio quality indicators by portfolio segment | The following tables present credit risk ratings by loan segment as of September 30, 2018 and December 31, 2017:
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Schedule of information with respect to our loan portfolio delinquencies by portfolio segment and amount | The following tables set forth certain information with respect to our loan portfolio delinquencies by portfolio segment and amount as of September 30, 2018 and December 31, 2017:
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Schedule of nonaccrual loans by portfolio segment | The following is a summary of nonaccrual loans by portfolio segment as of September 30, 2018 and December 31, 2017:
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Schedule of summarizes impaired loans | The following table summarizes impaired loans by portfolio segment as of September 30, 2018 and December 31, 2017:
The following table summarizes the average carrying amount of impaired loans and interest income recognized on impaired loans by portfolio segment as of September 30, 2018 and September 30, 2017:
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Schedule of loans whose terms were modified as TDRs during the periods | Loans classified as TDRs totaled $7.4 million at September 30, 2018 and $4.9 million at December 31, 2017. The following tables provide information on loans that were modified as TDRs during the periods indicated.
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Schedule of information on how loans were modified as a TDR | The following table provides information on how loans were modified as TDRs during the three and nine months ended September 30, 2018 and 2017:
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Comprehensive Income (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in accumulated other comprehensive income (loss) by component | The following tables present the changes in accumulated other comprehensive income (loss) by component, net of tax for the three and nine months ended September 30, 2018 and 2017:
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Schedule of reclassified from accumulated other comprehensive income or loss | The following table provides information for the items reclassified from accumulated other comprehensive income or loss:
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Earnings per Share ("EPS") (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reconciliation of earnings available to common stockholders and basic weighted-average common shares outstanding to diluted weighted average common shares outstanding | The following table is a reconciliation of earnings available to common shareholders and basic weighted average common shares outstanding to diluted weighted average common shares outstanding, reflecting the application of the two-class method:
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Regulatory Matters (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of capital amounts and ratios | The capital amounts and ratios for the Bank and the Company at September 30, 2018 and December 31, 2017 were as follows:
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Stock-Based Compensation (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of status of outstanding stock options | A summary of the status of outstanding share options for the nine months ended September 30, 2018 is presented below:
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Schedule of activity for restricted stock | The following table presents the activity for restricted stock for the nine months ended September 30, 2018:
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Derivative Instruments (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of derivative instruments | Information about derivative instruments at September 30, 2018 and December 31, 2017 is as follows:
(1) The effective date of the forward-starting interest rate swaps listed above are January 2, 2019, January 2, 2020 and August 26, 2020, respectively.
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Schedule of interest rate swap transactions | The Company's cash flow hedge positions consist of interest rate swap transactions as detailed in the table below:
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Schedule of changes in the consolidated statements of comprehensive income related to interest rate derivatives designated as hedges of cash flows | Changes in the consolidated statements of comprehensive income related to interest rate derivatives designated as hedges of cash flows were as follows for the three and nine months ended September 30, 2018 and 2017:
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Fair Value of Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of carrying values and fair values of the Company s financial instruments | The carrying values, fair values and placement in the fair value hierarchy of the Company's financial instruments at September 30, 2018 and December 31, 2017 were as follows:
|
Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of financial instruments carried at fair value on a recurring basis | The following table details the financial instruments carried at fair value on a recurring basis at September 30, 2018 and December 31, 2017, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine the fair value. The Company had no transfers into or out of Levels 1, 2 or 3 during the nine months ended September 30, 2018 and the year ended December 31, 2017, except for the Company's investment in a U.S.Treasury note that was transfered from Level 2 to Level 1.
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Schedule of financial instruments carried at fair value on a nonrecurring basis | The following table details the financial instruments measured at fair value on a nonrecurring basis at September 30, 2018 and December 31, 2017, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine the fair value:
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Schedule of quantitative inputs and assumptions for Level 3 financial instruments carried at fair value on a nonrecurring basis | The following table presents information about quantitative inputs and assumptions for Level 3 financial instruments carried at fair value on a nonrecurring basis at September 30, 2018 and December 31, 2017:
|
Nature of Operations and Summary of Significant Accounting Policies (Detail Textuals) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2018
USD ($)
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Amount reclassified for tax rate changes | $ 0.3 |
Investment Securities - Textuals (Details) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2018
USD ($)
Security
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2018
USD ($)
Security
|
Sep. 30, 2017
USD ($)
|
Dec. 31, 2017
Security
|
|
Investments, Debt and Equity Securities [Abstract] | |||||
Gross realized gains | $ 200,000 | $ 200,000 | |||
Gross realized loss | $ 0 | 2,000 | 0 | ||
Value of sales proceeds | $ 0 | $ 0 | $ 12,400,000 | $ 52,800,000 | |
Number of securities in loss position | Security | 31 | 31 | 15 |
Loans Receivable and Allowance for Loan Losses - Summary of allowance for loan losses by portfolio segment (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Allowance for Loan and Lease Losses | ||||
Beginning balance | $ 19,006 | $ 19,536 | $ 18,904 | $ 17,982 |
Charge-offs | (18) | (376) | (248) | (407) |
Recoveries | 1 | 6 | 10 | 153 |
Provisions (Credits) | 322 | 398 | 645 | 1,836 |
Ending balance | 19,311 | 19,564 | 19,311 | 19,564 |
Residential Real Estate | ||||
Allowance for Loan and Lease Losses | ||||
Beginning balance | 750 | 1,633 | 1,721 | 1,654 |
Charge-offs | (16) | 0 | (72) | 0 |
Recoveries | 0 | 0 | 0 | 146 |
Provisions (Credits) | 349 | (20) | (566) | (187) |
Ending balance | 1,083 | 1,613 | 1,083 | 1,613 |
Commercial Real Estate | ||||
Allowance for Loan and Lease Losses | ||||
Beginning balance | 14,185 | 9,695 | 12,777 | 9,563 |
Charge-offs | 0 | 0 | (18) | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Provisions (Credits) | (114) | 15 | 1,312 | 147 |
Ending balance | 14,071 | 9,710 | 14,071 | 9,710 |
Construction | ||||
Allowance for Loan and Lease Losses | ||||
Beginning balance | 481 | 2,268 | 907 | 2,105 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Provisions (Credits) | (122) | (75) | (548) | 88 |
Ending balance | 359 | 2,193 | 359 | 2,193 |
Commercial Business | ||||
Allowance for Loan and Lease Losses | ||||
Beginning balance | 3,589 | 5,564 | 3,498 | 4,283 |
Charge-offs | 0 | (366) | (96) | (366) |
Recoveries | 0 | 4 | 4 | 4 |
Provisions (Credits) | 208 | 494 | 391 | 1,775 |
Ending balance | 3,797 | 5,696 | 3,797 | 5,696 |
Consumer | ||||
Allowance for Loan and Lease Losses | ||||
Beginning balance | 1 | 376 | 1 | 377 |
Charge-offs | (2) | (10) | (62) | (41) |
Recoveries | 1 | 2 | 6 | 3 |
Provisions (Credits) | 1 | (16) | 56 | 13 |
Ending balance | $ 1 | $ 352 | $ 1 | $ 352 |
Loans Receivable and Allowance for Loan Losses - Summary of nonaccrual loans by portfolio segment (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Financing Receivable, Recorded Investment, Past Due | ||
Total nonaccrual loans | $ 21,964 | $ 5,481 |
Residential Real Estate | ||
Financing Receivable, Recorded Investment, Past Due | ||
Total nonaccrual loans | 4,725 | 1,590 |
Commercial Real Estate | ||
Financing Receivable, Recorded Investment, Past Due | ||
Total nonaccrual loans | 12,182 | 3,371 |
Commercial business | ||
Financing Receivable, Recorded Investment, Past Due | ||
Total nonaccrual loans | $ 5,057 | $ 520 |
Loans Receivable and Allowance for Loan Losses - Summary of loans were modified as TDR (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Financing Receivable, Modifications | ||||
Outstanding recorded investment - post-modification | $ 608 | $ 1,985 | $ 3,459 | $ 3,370 |
Payment concession | ||||
Financing Receivable, Modifications | ||||
Outstanding recorded investment - post-modification | 0 | 1,925 | 2,101 | 2,029 |
Maturity concession | ||||
Financing Receivable, Modifications | ||||
Outstanding recorded investment - post-modification | 0 | 60 | 0 | 301 |
Maturity and payment concession | ||||
Financing Receivable, Modifications | ||||
Outstanding recorded investment - post-modification | 0 | 0 | 750 | 0 |
Maturity and rate concession | ||||
Financing Receivable, Modifications | ||||
Outstanding recorded investment - post-modification | 608 | 0 | 608 | 0 |
Rate and payment concession | ||||
Financing Receivable, Modifications | ||||
Outstanding recorded investment - post-modification | $ 0 | $ 0 | $ 0 | $ 1,040 |
Shareholders' Equity - Common Stock (Details) - shares |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Stockholders' Equity Note [Abstract] | ||
Common stock, shares authorized (shares) | 10,000,000 | 10,000,000 |
Common stock, shares outstanding (shares) | 7,842,996 | 7,751,424 |
Shareholders' Equity - Warrants (Details) - Quinnipiac Bank And Trust Company |
Oct. 01, 2014
$ / shares
shares
|
---|---|
Stockholders Equity Note | |
Number of warrants issued (shares) | 68,600 |
Number of common stock shares purchased under each warrant | 0.56 |
Exercise price of warrant (usd per share) | $ / shares | $ 17.86 |
Comprehensive Income - Summary of reclassified from accumulated other comprehensive income or loss (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Available-for-sale securities: | ||||
Net gain on sale of available for sale securities | $ 0 | $ 0 | $ 222 | $ 165 |
Tax expense | 1,056 | 1,895 | 3,504 | 6,024 |
Net income | $ 4,857 | $ 4,263 | 14,172 | 11,734 |
Net Unrealized Gain (Loss) on Available for Sale Securities | ||||
Available-for-sale securities: | ||||
Net income | 175 | 108 | ||
Net Unrealized Gain (Loss) on Available for Sale Securities | Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Available-for-sale securities: | ||||
Net gain on sale of available for sale securities | 222 | 165 | ||
Tax expense | $ 47 | $ 57 |
Earnings per Share ("EPS") - Reconciliation of earnings available to common stockholders and basic weighted-average common shares outstanding to diluted weighted average common shares outstanding (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Earnings Per Share [Abstract] | ||||
Net income | $ 4,857 | $ 4,263 | $ 14,172 | $ 11,734 |
Dividends to participating securities | (13) | (7) | (39) | (21) |
Undistributed earnings allocated to participating securities | (52) | (47) | (153) | (134) |
Net income for earnings per share calculation | $ 4,792 | $ 4,209 | $ 13,980 | $ 11,579 |
Weighted average shares outstanding, basic (in shares) | 7,738,343 | 7,587,471 | 7,712,924 | 7,554,739 |
Effect of dilutive equity-based awards (in shares) | 26,000 | 83,000 | 46,000 | 98,000 |
Weighted average shares outstanding, diluted (in shares) | 7,763,935 | 7,670,258 | 7,758,762 | 7,652,355 |
Net earnings per common share: | ||||
Basic earnings per common share (in dollars per share) | $ 0.62 | $ 0.55 | $ 1.81 | $ 1.53 |
Diluted earnings per common share (in dollars per share) | $ 0.62 | $ 0.55 | $ 1.80 | $ 1.51 |
Stock-Based Compensation - Outstanding share options (Details) - Employee Stock Options |
9 Months Ended |
---|---|
Sep. 30, 2018
$ / shares
shares
| |
Number of Shares | |
Options outstanding at beginning of period (shares) | shares | 47,050 |
Exercised (shares) | shares | (27,120) |
Options outstanding at end of period (shares) | shares | 19,930 |
Options exercisable at end of period (shares) | shares | 19,930 |
Weighted Average Exercise Price | |
Options outstanding at beginning of period (usd per share) | $ / shares | $ 17.83 |
Exercised (usd per share) | $ / shares | 19.30 |
Options outstanding at end of period (usd per share) | $ / shares | 15.84 |
Options exercisable at end of period (usd per share) | $ / shares | $ 15.84 |
Stock-Based Compensation - Activity for restricted stock (Details) |
9 Months Ended |
---|---|
Sep. 30, 2018
$ / shares
shares
| |
Number of Shares | |
Unvested at beginning of period (shares) | shares | 75,186 |
Granted (shares) | shares | 43,550 |
Vested (shares) | shares | (15,479) |
Forfeited (shares) | shares | (1,498) |
Unvested at end of period (shares) | shares | 101,759 |
Weighted Average Grant Date Fair Value | |
Unvested at beginning of period (usd per share) | $ / shares | $ 26.39 |
Granted (usd per share) | $ / shares | 32.85 |
Vested (usd per share) | $ / shares | 26.54 |
Forfeited (usd per share) | $ / shares | 26.79 |
Unvested at end of period (usd per share) | $ / shares | $ 29.13 |
Derivative Instruments (Detail Textuals) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2018
USD ($)
| |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Notional amount of interest rate swap | $ 25.0 |
Rolling period of federal home loan bank advances converted to fixed rates | 90 days |
Amount of cashflow hedge gain expected to be reclassified to interest expense in the next 12 months | $ 1.3 |
Derivative Instruments - Changes in consolidated statements of comprehensive income related to interest rate derivatives (Details 2) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Interest rate swap on FHLB advance: | ||||
Unrealized gains recognized in accumulated other comprehensive income | $ 1,784 | $ 327 | $ 3,599 | $ 243 |
Income tax expense on items recognized in accumulated other comprehensive income | (375) | (114) | (756) | (85) |
Unrealized gains on interest rate swaps, net of tax | 1,409 | 213 | 2,843 | 158 |
Interest expense recognized on hedged FHLB advance | $ 653 | $ 489 | $ 1,939 | $ 1,258 |
Fair Value of Financial Instruments (Detail Textuals) - Fair Value - Level 3 |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
|
Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair value inputs, discount rate | 5.00% | 4.50% |
Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair value inputs, discount rate | 5.30% | 4.80% |
Fair Value Measurements - Financial instruments carried at fair value on nonrecurring basis (Details 1) - Fair Value Measurements Nonrecurring - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Impaired loans | $ 0 | $ 0 |
Servicing asset, net | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Impaired loans | 0 | 0 |
Servicing asset, net | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Impaired loans | 30,708 | 13,898 |
Servicing asset, net | $ 1,088 | $ 1,030 |
Subordinated debentures (Detail Textuals) - Fixed rated subordinated notes $ in Millions |
Aug. 19, 2015
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
Aggregate principal amount | $ 25.5 |
Notes non-callable term (in years) | 5 years |
Stated maturity date of notes | Aug. 15, 2025 |
Quarterly pay fixed interest rate of notes | 5.75% |
Income Taxes (Detail Textuals) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 1,056 | $ 1,895 | $ 3,504 | $ 6,024 |
Effective tax rates | 17.90% | 30.80% | 19.80% | 33.90% |
Subsequent Events (Details) - $ / shares |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Oct. 30, 2018 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Subsequent Event | |||||
Dividends per common share (in dollars per share) | $ 0.12 | $ 0.07 | $ 0.36 | $ 0.21 | |
Subsequent Event | |||||
Subsequent Event | |||||
Dividends per common share (in dollars per share) | $ 0.12 |
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