(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||
Common Stock, no par value per share |
Large accelerated filer ¨ | Accelerated filer ¨ | ||||
Smaller reporting company | |||||
Emerging growth company |
At December 31, | |||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Real estate loans: | |||||||||||||||||||||||||||||
Residential | $ | 113,557 | $ | 147,109 | $ | 178,079 | $ | 193,524 | $ | 195,729 | |||||||||||||||||||
Commercial | 1,148,383 | 1,128,614 | 1,094,066 | 987,242 | 845,322 | ||||||||||||||||||||||||
Construction | 87,007 | 98,583 | 73,191 | 101,636 | 107,441 | ||||||||||||||||||||||||
1,348,947 | 1,374,306 | 1,345,336 | 1,282,402 | 1,148,492 | |||||||||||||||||||||||||
Commercial business | 276,601 | 230,028 | 258,978 | 259,995 | 215,914 | ||||||||||||||||||||||||
Consumer | 79 | 150 | 412 | 619 | 1,533 | ||||||||||||||||||||||||
Total loans | $ | 1,625,627 | $ | 1,604,484 | $ | 1,604,726 | $ | 1,543,016 | $ | 1,365,939 |
At December 31, | |||||||||||||||||||||||||||||
Percent of Loan Portfolio | |||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||
Real estate loans: | |||||||||||||||||||||||||||||
Residential | 6.99 | % | 9.17 | % | 11.10 | % | 12.54 | % | 14.33 | % | |||||||||||||||||||
Commercial | 70.64 | 70.34 | 68.18 | 63.98 | 61.89 | ||||||||||||||||||||||||
Construction | 5.35 | 6.14 | 4.56 | 6.59 | 7.86 | ||||||||||||||||||||||||
82.98 | 85.65 | 83.84 | 83.11 | 84.08 | |||||||||||||||||||||||||
Commercial business | 17.02 | 14.34 | 16.14 | 16.85 | 15.81 | ||||||||||||||||||||||||
Consumer | — | 0.01 | 0.02 | 0.04 | 0.11 | ||||||||||||||||||||||||
Total loans | 100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % |
Branch | Address | Owned or Leased | ||||||||||||
Elm Street | 208 Elm Street New Canaan, CT 06840 | Lease (expires 2021) | ||||||||||||
Cherry Street | 156 Cherry Street New Canaan, CT 06840 | Lease (expires 2021) | ||||||||||||
Bedford | 612 Bedford Street Stamford, CT 06901 | Lease (expired 2020 - currently month-to-month) | ||||||||||||
High Ridge | 1095 High Ridge Road Stamford, CT 06905 | Lease (expires 2028) | ||||||||||||
Black Rock | 2220 Black Rock Turnpike Fairfield, CT 06825 | Lease (expires 2024) | ||||||||||||
Sasco Hill | One Sasco Hill Road Fairfield, CT 06824 | Lease (expires 2024) | ||||||||||||
Wilton | 47 Old Ridgefield Road Wilton, CT 06897 | Own | ||||||||||||
Norwalk | 370 Westport Avenue Norwalk, CT 06851 | Lease (expires 2030) | ||||||||||||
Hamden | 2704 Dixwell Avenue Hamden, CT 06518 | Own | ||||||||||||
Westport | 100 Post Road East Westport, CT 06880 | Lease (expires 2028) | ||||||||||||
Darien | 1065 Post Road Darien, CT 06820 | Lease (expires 2028) |
Issuer Purchases of Equity Securities | ||||||||||||||||||||||||||
Period | Total Number of Shares (or Units) Purchased | Average Price Paid per Share (or Unit) | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs(1) | ||||||||||||||||||||||
October 1, 2020 - October 31, 2020 | — | $ | — | — | 307,333 | |||||||||||||||||||||
November 1, 2020 - November 30, 2020 | — | — | — | 307,333 | ||||||||||||||||||||||
December 1, 2020 - December 31, 2020 | — | — | — | 307,333 | ||||||||||||||||||||||
Total | — | $ | — | — | 307,333 |
At or For the Years Ended December 31, | |||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||||||||||||
Statements of Income: | |||||||||||||||||||||||||||||
Interest income | $ | 77,487 | $ | 82,948 | $ | 80,064 | $ | 71,201 | $ | 60,990 | |||||||||||||||||||
Interest expense | 22,652 | 29,187 | 23,738 | 16,837 | 11,898 | ||||||||||||||||||||||||
Net interest income | 54,835 | 53,761 | 56,326 | 54,364 | 49,092 | ||||||||||||||||||||||||
Provision for loan losses | 7,605 | 437 | 3,440 | 1,341 | 3,914 | ||||||||||||||||||||||||
Net interest income after provision for loan losses | 47,230 | 53,324 | 52,886 | 53,023 | 45,178 | ||||||||||||||||||||||||
Noninterest income | 2,884 | 5,244 | 3,900 | 4,629 | 2,676 | ||||||||||||||||||||||||
Noninterest expense | 42,813 | 35,626 | 35,633 | 32,523 | 29,544 | ||||||||||||||||||||||||
Income before income tax | 7,301 | 22,942 | 21,153 | 25,129 | 18,310 | ||||||||||||||||||||||||
Income tax expense | 1,397 | 4,726 | 3,720 | 11,299 | 5,960 | ||||||||||||||||||||||||
Net income | 5,904 | 18,216 | 17,433 | 13,830 | 12,350 | ||||||||||||||||||||||||
Per Share Data: | |||||||||||||||||||||||||||||
Basic earnings per share | $ | 0.75 | $ | 2.32 | $ | 2.23 | $ | 1.80 | $ | 1.64 | |||||||||||||||||||
Diluted earnings per share | $ | 0.75 | $ | 2.31 | $ | 2.21 | $ | 1.78 | $ | 1.62 | |||||||||||||||||||
Book value per share (end of period)(a) | 22.77 | 23.51 | 22.43 | 20.98 | 19.39 | ||||||||||||||||||||||||
Tangible book value per share (end of period)(a)(b) | 22.43 | 23.15 | 22.06 | 20.59 | 18.98 | ||||||||||||||||||||||||
Dividend payout ratio(f) | 74.67 | % | 22.51 | % | 21.72 | % | 15.73 | % | 13.58 | % | |||||||||||||||||||
Shares outstanding (end of period)(a) | 7,755,909 | 7,757,828 | 7,764,647 | 7,676,238 | 7,524,069 | ||||||||||||||||||||||||
Weighted average shares outstanding–basic | 7,728,328 | 7,757,355 | 7,722,175 | 7,572,409 | 7,396,019 | ||||||||||||||||||||||||
Weighted average shares outstanding–diluted | 7,748,453 | 7,784,631 | 7,775,480 | 7,670,413 | 7,491,052 | ||||||||||||||||||||||||
Performance Ratios: | |||||||||||||||||||||||||||||
Return on average assets(c) | 0.28 | % | 0.97 | % | 0.94 | % | 0.80 | % | 0.85 | % | |||||||||||||||||||
Return on average common shareholders’ equity | 3.35 | % | 10.20 | % | 10.19 | % | 8.93 | % | 8.94 | % | |||||||||||||||||||
Average shareholders’ equity to average assets | 8.36 | % | 9.53 | % | 9.24 | % | 8.97 | % | 9.47 | % | |||||||||||||||||||
Net interest margin | 2.77 | % | 3.03 | % | 3.18 | % | 3.30 | % | 3.54 | % | |||||||||||||||||||
Efficiency ratio(b) | 73.9 | % | 60.2 | % | 59.2 | % | 54.9 | % | 56.5 | % | |||||||||||||||||||
Asset Quality Ratios: | |||||||||||||||||||||||||||||
Total past due loans to total loans(d) | 0.93 | % | 0.77 | % | 0.78 | % | 1.67 | % | 0.47 | % | |||||||||||||||||||
Nonperforming loans to total loans(d) | 2.06 | % | 0.66 | % | 0.88 | % | 0.36 | % | 0.22 | % | |||||||||||||||||||
Nonperforming assets to total assets(e) | 1.48 | % | 0.56 | % | 0.75 | % | 0.31 | % | 0.20 | % | |||||||||||||||||||
Allowance for loan losses to nonperforming loans | 62.87 | % | 127.59 | % | 109.80 | % | 344.90 | % | 612.26 | % | |||||||||||||||||||
Allowance for loan losses to total loans(d) | 1.29 | % | 0.84 | % | 0.96 | % | 1.23 | % | 1.32 | % | |||||||||||||||||||
Net charge-offs (recoveries) to average loans(d) | 0.01 | % | 0.15 | % | 0.44 | % | 0.03 | % | 0.01 | % | |||||||||||||||||||
Statements of Financial Condition: | |||||||||||||||||||||||||||||
Total assets | $ | 2,253,747 | $ | 1,882,182 | $ | 1,873,665 | $ | 1,796,607 | $ | 1,628,919 | |||||||||||||||||||
Gross portfolio loans(d) | 1,625,627 | 1,604,484 | 1,604,726 | 1,543,016 | 1,365,939 | ||||||||||||||||||||||||
Investment securities | 106,890 | 100,865 | 116,584 | 113,767 | 104,610 | ||||||||||||||||||||||||
Deposits | 1,827,316 | 1,491,903 | 1,502,244 | 1,398,405 | 1,289,037 | ||||||||||||||||||||||||
FHLB borrowings | 175,000 | 150,000 | 160,000 | 199,000 | 160,000 | ||||||||||||||||||||||||
Subordinated debt | 25,258 | 25,207 | 25,155 | 25,103 | 25,051 | ||||||||||||||||||||||||
Total equity | 176,602 | 182,397 | 174,196 | 161,027 | 145,895 | ||||||||||||||||||||||||
Capital Ratios: | |||||||||||||||||||||||||||||
Tier 1 capital to average assets | |||||||||||||||||||||||||||||
Bankwell Bank | 8.44 | % | 10.99 | % | 10.14 | % | 9.61 | % | 10.10 | % | |||||||||||||||||||
Tier 1 capital to risk-weighted assets | |||||||||||||||||||||||||||||
Bankwell Bank | 11.06 | % | 12.53 | % | 11.56 | % | 10.99 | % | 11.59 | % | |||||||||||||||||||
Total capital to risk-weighted assets | |||||||||||||||||||||||||||||
Bankwell Bank | 12.28 | % | 13.35 | % | 12.50 | % | 12.19 | % | 12.85 | % | |||||||||||||||||||
Total shareholders’ equity to total assets | 7.84 | % | 9.69 | % | 9.30 | % | 8.96 | % | 8.96 | % | |||||||||||||||||||
Tangible common equity ratio(b) | 7.73 | % | 9.56 | % | 9.16 | % | 8.81 | % | 8.78 | % |
Years Ended December 31, | |||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||||||||||||
Efficiency Ratio | |||||||||||||||||||||||||||||
Noninterest expense | $ | 42,813 | $ | 35,626 | $ | 35,633 | $ | 32,523 | $ | 29,544 | |||||||||||||||||||
Less: other real estate owned expenses | 6 | 37 | — | 70 | 157 | ||||||||||||||||||||||||
Less: Amortization of intangibles | 138 | 75 | 92 | 118 | 151 | ||||||||||||||||||||||||
Adjusted noninterest expense (numerator) | $ | 42,669 | $ | 35,514 | $ | 35,541 | $ | 32,335 | $ | 29,236 | |||||||||||||||||||
Net interest income | $ | 54,835 | $ | 53,761 | $ | 56,326 | $ | 54,364 | $ | 49,092 | |||||||||||||||||||
Noninterest income | 2,884 | 5,244 | 3,900 | 4,629 | 2,676 | ||||||||||||||||||||||||
Adjustments for: gains/(losses) on sales of securities | — | 76 | 222 | 165 | (115) | ||||||||||||||||||||||||
Adjustments for: gains (losses) on sale of other real estate owned | 19 | (102) | — | (78) | 128 | ||||||||||||||||||||||||
Adjusted operating revenue (denominator) | $ | 57,700 | $ | 59,031 | $ | 60,004 | $ | 58,906 | $ | 51,755 | |||||||||||||||||||
Efficiency ratio | 73.9 | % | 60.2 | % | 59.2 | % | 54.9 | % | 56.5 | % | |||||||||||||||||||
Tangible Common Equity and Tangible Common Equity/Tangible Assets | |||||||||||||||||||||||||||||
Total shareholders’ equity | $ | 176,602 | $ | 182,397 | $ | 174,196 | $ | 161,027 | $ | 145,895 | |||||||||||||||||||
Less: preferred stock | — | — | — | — | — | ||||||||||||||||||||||||
Common shareholders’ equity | 176,602 | 182,397 | 174,196 | 161,027 | 145,895 | ||||||||||||||||||||||||
Less: Intangible assets | 2,665 | 2,803 | 2,879 | 2,971 | 3,090 | ||||||||||||||||||||||||
Tangible Common shareholders’ equity | $ | 173,937 | $ | 179,594 | $ | 171,317 | $ | 158,056 | $ | 142,805 | |||||||||||||||||||
Total assets | $ | 2,253,747 | $ | 1,882,182 | $ | 1,873,665 | $ | 1,796,607 | $ | 1,628,919 | |||||||||||||||||||
Less: Intangible assets | 2,665 | 2,803 | 2,879 | 2,971 | 3,090 | ||||||||||||||||||||||||
Tangible assets | $ | 2,251,082 | $ | 1,879,379 | $ | 1,870,786 | $ | 1,793,636 | $ | 1,625,829 | |||||||||||||||||||
Tangible common shareholders’ equity to tangible assets | 7.73 | % | 9.56 | % | 9.16 | % | 8.81 | % | 8.78 | % | |||||||||||||||||||
Tangible Book Value per Share | |||||||||||||||||||||||||||||
Total shareholders’ equity | $ | 176,602 | $ | 182,397 | $ | 174,196 | $ | 161,027 | $ | 145,895 | |||||||||||||||||||
Less: preferred stock | — | — | — | — | — | ||||||||||||||||||||||||
Common shareholders’ equity | 176,602 | 182,397 | 174,196 | 161,027 | 145,895 | ||||||||||||||||||||||||
Less: Intangible assets | 2,665 | 2,803 | 2,879 | 2,971 | 3,090 | ||||||||||||||||||||||||
Tangible common shareholders’ equity | $ | 173,937 | $ | 179,594 | $ | 171,317 | $ | 158,056 | $ | 142,805 | |||||||||||||||||||
Common shares issued | 7,919,278 | 7,868,803 | 7,842,271 | 7,751,424 | 7,620,663 | ||||||||||||||||||||||||
Less: shares of unvested restricted stock | 163,369 | 110,975 | 77,624 | 75,186 | 96,594 | ||||||||||||||||||||||||
Common shares outstanding | 7,755,909 | 7,757,828 | 7,764,647 | 7,676,238 | 7,524,069 | ||||||||||||||||||||||||
Book value per share | $ | 22.77 | $ | 23.51 | $ | 22.43 | $ | 20.98 | $ | 19.39 | |||||||||||||||||||
Less: effects of intangible assets | 0.34 | 0.36 | 0.37 | 0.39 | 0.41 | ||||||||||||||||||||||||
Tangible Book Value per Common Share | $ | 22.43 | $ | 23.15 | $ | 22.06 | $ | 20.59 | $ | 18.98 | |||||||||||||||||||
Total Revenue | |||||||||||||||||||||||||||||
Net interest income | $ | 54,835 | $ | 53,761 | $ | 56,326 | $ | 54,364 | $ | 49,092 | |||||||||||||||||||
Add: noninterest income | 2,884 | 5,244 | 3,900 | 4,629 | 2,676 | ||||||||||||||||||||||||
Total Revenue | $ | 57,719 | $ | 59,005 | $ | 60,226 | $ | 58,993 | $ | 51,768 | |||||||||||||||||||
Noninterest income as a percentage of total revenue | 5.00 | % | 8.89 | % | 6.48 | % | 7.85 | % | 5.17 | % | |||||||||||||||||||
Return on Average Common Shareholders’ Equity | |||||||||||||||||||||||||||||
Net Income Attributable to Common Shareholders | $ | 5,904 | $ | 18,216 | $ | 17,433 | $ | 13,830 | $ | 12,350 | |||||||||||||||||||
Total average shareholders’ equity | $ | 176,489 | $ | 178,510 | $ | 171,024 | $ | 154,929 | $ | 138,131 | |||||||||||||||||||
Less: average preferred stock | — | — | — | — | — | ||||||||||||||||||||||||
Average Common Shareholders’ Equity | 176,489 | 178,510 | 171,024 | 154,929 | 138,131 | ||||||||||||||||||||||||
Return on Average Common Shareholders’ Equity | 3.35 | % | 10.20 | % | 10.19 | % | 8.93 | % | 8.94 | % |
Key Financial Measures(a) | |||||||||||||||||
At or For the Years Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||
Selected balance sheet measures: | |||||||||||||||||
Total assets | $ | 2,253,747 | $ | 1,882,182 | $ | 1,873,665 | |||||||||||
Gross portfolio loans | 1,625,627 | 1,604,484 | 1,604,726 | ||||||||||||||
Deposits | 1,827,316 | 1,491,903 | 1,502,244 | ||||||||||||||
FHLB borrowings | 175,000 | 150,000 | 160,000 | ||||||||||||||
Subordinated debt | 25,258 | 25,207 | 25,155 | ||||||||||||||
Total equity | 176,602 | 182,397 | 174,196 | ||||||||||||||
Selected statement of income measures: | |||||||||||||||||
Total revenue(c) | 57,719 | 59,005 | 60,226 | ||||||||||||||
Net interest income before provision for loan losses | 54,835 | 53,761 | 56,326 | ||||||||||||||
Income before income tax expense | 7,301 | 22,942 | 21,153 | ||||||||||||||
Net income | 5,904 | 18,216 | 17,433 | ||||||||||||||
Basic earnings per share | $ | 0.75 | $ | 2.32 | $ | 2.23 | |||||||||||
Diluted earnings per share | $ | 0.75 | $ | 2.31 | $ | 2.21 |
Key Financial Measures(a) | |||||||||||||||||
At or For the Years Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Other financial measures and ratios: | |||||||||||||||||
Return on average assets | 0.28 | % | 0.97 | % | 0.94 | % | |||||||||||
Return on average common shareholders’ equity(c) | 3.35 | % | 10.20 | % | 10.19 | % | |||||||||||
Net interest margin | 2.77 | % | 3.03 | % | 3.18 | % | |||||||||||
Efficiency ratio(c) | 73.9 | % | 60.2 | % | 59.2 | % | |||||||||||
Tangible book value per share (end of period)(c)(d) | $ | 22.43 | $ | 23.15 | $ | 22.06 | |||||||||||
Net charge-offs to average loans(b) | 0.01 | % | 0.15 | % | 0.44 | % | |||||||||||
Nonperforming assets to total assets(e) | 1.48 | % | 0.56 | % | 0.75 | % | |||||||||||
Allowance for loan losses to nonperforming loans | 62.87 | % | 127.59 | % | 109.80 | % | |||||||||||
Allowance for loan losses to total loans(b) | 1.29 | % | 0.84 | % | 0.96 | % |
Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Average Balance | Interest | Yield/ Rate(5) | Average Balance | Interest | Yield/ Rate(5) | Average Balance | Interest | Yield/ Rate(5) | |||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and fed funds sold | $ | 261,689 | $ | 585 | 0.22 | % | $ | 85,678 | $ | 1,859 | 2.17 | % | $ | 77,923 | $ | 1,428 | 1.84 | % | |||||||||||||||||||||||||||||||||||
Securities(1) | 98,938 | 3,103 | 3.14 | 112,336 | 3,526 | 3.14 | 118,311 | 3,686 | 3.12 | ||||||||||||||||||||||||||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate | 1,095,367 | 51,218 | 4.60 | 1,067,290 | 50,818 | 4.70 | 1,014,255 | 47,967 | 4.66 | ||||||||||||||||||||||||||||||||||||||||||||
Residential real estate | 129,585 | 4,645 | 3.58 | 165,384 | 6,367 | 3.85 | 189,121 | 7,016 | 3.71 | ||||||||||||||||||||||||||||||||||||||||||||
Construction(2) | 97,230 | 4,262 | 4.31 | 85,591 | 4,538 | 5.23 | 90,773 | 4,667 | 5.07 | ||||||||||||||||||||||||||||||||||||||||||||
Commercial business | 295,662 | 13,530 | 4.50 | 255,779 | 15,599 | 6.01 | 282,425 | 15,037 | 5.25 | ||||||||||||||||||||||||||||||||||||||||||||
Consumer | 121 | 10 | 8.00 | 258 | 17 | 6.70 | 481 | 28 | 5.88 | ||||||||||||||||||||||||||||||||||||||||||||
Total loans | 1,617,965 | 73,665 | 4.48 | 1,574,302 | 77,339 | 4.85 | 1,577,055 | 74,715 | 4.67 | ||||||||||||||||||||||||||||||||||||||||||||
Federal Home Loan Bank stock | 7,625 | 346 | 4.53 | 7,502 | 473 | 6.31 | 9,177 | 517 | 5.63 | ||||||||||||||||||||||||||||||||||||||||||||
Total earning assets | 1,986,217 | $ | 77,699 | 3.85 | % | 1,779,818 | $ | 83,197 | 4.61 | % | 1,782,466 | $ | 80,346 | 4.45 | % | ||||||||||||||||||||||||||||||||||||||
Other assets | 125,261 | 92,663 | 68,002 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 2,111,478 | $ | 1,872,481 | $ | 1,850,468 | |||||||||||||||||||||||||||||||||||||||||||||||
Liabilities and shareholders’ equity: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
NOW | $ | 80,805 | $ | 141 | 0.17 | % | $ | 62,254 | $ | 128 | 0.21 | % | $ | 60,410 | $ | 157 | 0.26 | % | |||||||||||||||||||||||||||||||||||
Money market | 516,527 | 4,071 | 0.79 | 439,867 | 7,139 | 1.62 | 482,886 | 6,431 | 1.33 | ||||||||||||||||||||||||||||||||||||||||||||
Savings | 169,763 | 1,368 | 0.81 | 177,854 | 2,968 | 1.67 | 124,214 | 1,649 | 1.33 | ||||||||||||||||||||||||||||||||||||||||||||
Time | 712,461 | 12,600 | 1.77 | 637,515 | 14,463 | 2.27 | 619,448 | 10,714 | 1.73 | ||||||||||||||||||||||||||||||||||||||||||||
Total interest bearing deposits | 1,479,556 | 18,180 | 1.23 | 1,317,490 | 24,698 | 1.87 | 1,286,958 | 18,951 | 1.47 | ||||||||||||||||||||||||||||||||||||||||||||
Borrowed money | 190,463 | 4,472 | 2.31 | 175,267 | 4,489 | 2.53 | 213,546 | 4,787 | 2.21 | ||||||||||||||||||||||||||||||||||||||||||||
Total interest bearing liabilities | 1,670,019 | $ | 22,652 | 1.36 | % | 1,492,757 | $ | 29,187 | 1.96 | % | 1,500,504 | $ | 23,738 | 1.58 | % | ||||||||||||||||||||||||||||||||||||||
Noninterest bearing deposits | 215,073 | 172,192 | 166,566 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other liabilities | 49,897 | 29,022 | 12,374 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities | 1,934,989 | 1,693,971 | 1,679,444 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders’ equity | 176,489 | 178,510 | 171,024 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 2,111,478 | $ | 1,872,481 | $ | 1,850,468 | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest income(3) | $ | 55,047 | $ | 54,010 | $ | 56,608 | |||||||||||||||||||||||||||||||||||||||||||||||
Interest rate spread | 2.49 | % | 2.65 | % | 2.87 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest margin(4) | 2.77 | % | 3.03 | % | 3.18 | % |
Year Ended December 31, 2020 vs 2019 Increase (Decrease) | Year Ended December 31, 2019 vs 2018 Increase (Decrease) | ||||||||||||||||||||||||||||||||||
Volume | Rate | Total | Volume | Rate | Total | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Interest and dividend income: | |||||||||||||||||||||||||||||||||||
Cash and fed funds sold | $ | 1,435 | $ | (2,709) | $ | (1,274) | $ | 152 | $ | 279 | $ | 431 | |||||||||||||||||||||||
Securities | (420) | (3) | (423) | (187) | 27 | (160) | |||||||||||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||
Commercial real estate | 1,321 | (921) | 400 | 2,523 | 328 | 2,851 | |||||||||||||||||||||||||||||
Residential real estate | (1,306) | (416) | (1,722) | (906) | 257 | (649) | |||||||||||||||||||||||||||||
Construction | 570 | (846) | (276) | (272) | 143 | (129) | |||||||||||||||||||||||||||||
Commercial business | 2,201 | (4,270) | (2,069) | (1,498) | 2,060 | 562 | |||||||||||||||||||||||||||||
Consumer | (10) | 3 | (7) | (15) | 4 | (11) | |||||||||||||||||||||||||||||
Total loans | 2,776 | (6,450) | (3,674) | (168) | 2,792 | 2,624 | |||||||||||||||||||||||||||||
Federal Home Loan Bank stock | 8 | (135) | (127) | (101) | 57 | (44) | |||||||||||||||||||||||||||||
Total change in interest and dividend income | $ | 3,799 | $ | (9,297) | $ | (5,498) | $ | (304) | $ | 3,155 | $ | 2,851 | |||||||||||||||||||||||
Interest expense: | |||||||||||||||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||||||||||||||
NOW | $ | 34 | $ | (21) | $ | 13 | $ | 5 | $ | (34) | $ | (29) | |||||||||||||||||||||||
Money market | 1,082 | (4,150) | (3,068) | (609) | 1,317 | 708 | |||||||||||||||||||||||||||||
Savings | (130) | (1,470) | (1,600) | 827 | 492 | 1,319 | |||||||||||||||||||||||||||||
Time | 1,570 | (3,433) | (1,863) | 321 | 3,428 | 3,749 | |||||||||||||||||||||||||||||
Total deposits | 2,556 | (9,074) | (6,518) | 544 | 5,203 | 5,747 | |||||||||||||||||||||||||||||
Borrowed money | 373 | (390) | (17) | (925) | 627 | (298) | |||||||||||||||||||||||||||||
Total change in interest expense | 2,929 | (9,464) | (6,535) | (381) | 5,830 | 5,449 | |||||||||||||||||||||||||||||
Change in net interest income | $ | 870 | $ | 167 | $ | 1,037 | $ | 77 | $ | (2,675) | $ | (2,598) |
Years Ended December 31, | 2020/2019 Change | 2019/2018 Change | |||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | $ | % | $ | % | |||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
Bank owned life insurance | $ | 967 | $ | 1,008 | $ | 1,057 | $ | (41) | (4) | % | $ | (49) | (5) | % | |||||||||||||||||||||||||||
Service charges and fees | 788 | 1,023 | 1,090 | (235) | (23) | (67) | (6) | ||||||||||||||||||||||||||||||||||
Gains and fees from sales of loans | 43 | 1,791 | 984 | (1,748) | (98) | 807 | 82 | ||||||||||||||||||||||||||||||||||
Gain (loss) on sale of other real estate owned, net | 19 | (102) | — | 121 | (119) | (102) | N/A | ||||||||||||||||||||||||||||||||||
Net gain on sale of available for sale securities | — | 76 | 222 | (76) | (100) | (146) | (66) | ||||||||||||||||||||||||||||||||||
Other | 1,067 | 1,448 | 547 | (381) | (26) | 901 | 165 | ||||||||||||||||||||||||||||||||||
Total noninterest income | $ | 2,884 | $ | 5,244 | $ | 3,900 | $ | (2,360) | (45) | % | $ | 1,344 | 34 | % |
Years Ended December 31, | 2020/2019 Change | 2019/2018 Change | |||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | $ | % | $ | % | |||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
Salaries and employee benefits | $ | 21,355 | $ | 19,434 | $ | 18,973 | $ | 1,921 | 10 | % | $ | 461 | 2 | % | |||||||||||||||||||||||||||
Occupancy and equipment | 10,926 | 7,594 | 6,790 | 3,332 | 44 | 804 | 12 | ||||||||||||||||||||||||||||||||||
Data processing | 3,216 | 2,067 | 2,033 | 1,149 | 56 | 34 | 2 | ||||||||||||||||||||||||||||||||||
Professional services | 2,110 | 1,857 | 2,103 | 253 | 14 | (246) | (12) | ||||||||||||||||||||||||||||||||||
Director fees | 1,214 | 863 | 1,044 | 351 | 41 | (181) | (17) | ||||||||||||||||||||||||||||||||||
FDIC insurance | 791 | 74 | 779 | 717 | 969 | (705) | (91) | ||||||||||||||||||||||||||||||||||
Marketing | 630 | 971 | 1,587 | (341) | (35) | (616) | (39) | ||||||||||||||||||||||||||||||||||
Other | 2,571 | 2,766 | 2,324 | (195) | (7) | 442 | 19 | ||||||||||||||||||||||||||||||||||
Total noninterest expense | $ | 42,813 | $ | 35,626 | $ | 35,633 | $ | 7,187 | 20 | % | $ | (7) | — | % |
2020 | 2019 | Change | |||||||||||||||||||||||||||
Total | % | Total | % | Total | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Real estate loans: | |||||||||||||||||||||||||||||
Residential | $ | 113,557 | 6.99 | % | $ | 147,109 | 9.17 | % | $ | (33,552) | |||||||||||||||||||
Commercial | 1,148,383 | 70.64 | 1,128,614 | 70.34 | 19,769 | ||||||||||||||||||||||||
Construction | 87,007 | 5.35 | 98,583 | 6.14 | (11,576) | ||||||||||||||||||||||||
1,348,947 | 82.98 | 1,374,306 | 85.65 | (25,359) | |||||||||||||||||||||||||
Commercial business | 276,601 | 17.02 | 230,028 | 14.34 | 46,573 | ||||||||||||||||||||||||
Consumer | 79 | — | 150 | 0.01 | (71) | ||||||||||||||||||||||||
Total loans | $ | 1,625,627 | 100.00 | % | $ | 1,604,484 | 100.00 | % | $ | 21,143 |
December 31, 2020 | |||||||||||||||||||||||
Commercial Real Estate | Commercial Construction | Commercial Business | Total | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Amounts due: | |||||||||||||||||||||||
One year or less | $ | 82,657 | $ | 26,364 | $ | 16,847 | $ | 125,868 | |||||||||||||||
After one year: | |||||||||||||||||||||||
One to five years | 655,541 | 38,118 | 144,136 | 837,795 | |||||||||||||||||||
Over five years | 410,185 | 22,525 | 115,618 | 548,328 | |||||||||||||||||||
Total due after one year | 1,065,726 | 60,643 | 259,754 | 1,386,123 | |||||||||||||||||||
Total | $ | 1,148,383 | $ | 87,007 | $ | 276,601 | $ | 1,511,991 |
December 31, 2020 | |||||||||||||||||
Adjustable Interest Rate | Fixed Interest Rate | Total | |||||||||||||||
(In thousands) | |||||||||||||||||
Commercial real estate | $ | 314,197 | $ | 751,529 | $ | 1,065,726 | |||||||||||
Commercial construction | 26,371 | 34,272 | 60,643 | ||||||||||||||
Commercial business | 133,162 | 126,592 | 259,754 | ||||||||||||||
Total loans due after one year | $ | 473,730 | $ | 912,393 | $ | 1,386,123 |
At December 31, | |||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Nonaccrual loans: | |||||||||||||||||||||||||||||
Real estate loans: | |||||||||||||||||||||||||||||
Residential | $ | 1,492 | $ | 1,560 | $ | 3,812 | $ | 1,590 | $ | 1,612 | |||||||||||||||||||
Commercial | 21,093 | 5,222 | 5,950 | 3,371 | 446 | ||||||||||||||||||||||||
Commercial business | 1,834 | 3,806 | 4,320 | 520 | 538 | ||||||||||||||||||||||||
Construction | 8,997 | — | — | — | — | ||||||||||||||||||||||||
Consumer | — | — | — | — | 341 | ||||||||||||||||||||||||
Total nonaccrual loans | 33,416 | 10,588 | 14,082 | 5,481 | 2,937 | ||||||||||||||||||||||||
Property acquired through foreclosure or repossession, net | — | — | — | — | 272 | ||||||||||||||||||||||||
Total nonperforming assets | $ | 33,416 | $ | 10,588 | $ | 14,082 | $ | 5,481 | $ | 3,209 | |||||||||||||||||||
Nonperforming assets to total assets | 1.48 | % | 0.56 | % | 0.75 | % | 0.31 | % | 0.20 | % | |||||||||||||||||||
Nonperforming loans to total loans | 2.06 | % | 0.66 | % | 0.88 | % | 0.36 | % | 0.22 | % | |||||||||||||||||||
Total past due loans to total loans | 0.93 | % | 0.77 | % | 0.78 | % | 1.67 | % | 0.47 | % |
30–59 Days Past Due | 60–89 Days Past Due | 90 Days or Greater Past Due | Total Past Due | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
As of December 31, 2020 | |||||||||||||||||||||||
Residential real estate | $ | 245 | $ | — | $ | 177 | $ | 422 | |||||||||||||||
Commercial real estate | 1,305 | 193 | 2,541 | 4,039 | |||||||||||||||||||
Construction | 8,997 | — | — | 8,997 | |||||||||||||||||||
Commercial business | 45 | 55 | 1,526 | 1,626 | |||||||||||||||||||
Total loans | $ | 10,592 | $ | 248 | $ | 4,244 | $ | 15,084 | |||||||||||||||
As of December 31, 2019 | |||||||||||||||||||||||
Residential real estate | $ | — | $ | 943 | $ | 281 | $ | 1,224 | |||||||||||||||
Commercial real estate | 355 | — | 5,935 | 6,290 | |||||||||||||||||||
Construction | 1,357 | — | — | 1,357 | |||||||||||||||||||
Commercial business | — | — | 3,455 | 3,455 | |||||||||||||||||||
Total loans | $ | 1,712 | $ | 943 | $ | 9,671 | $ | 12,326 |
At December 31, | |||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Accruing troubled debt restructured loans: | |||||||||||||||||||||||||||||
Residential real estate | $ | 2,399 | $ | 2,460 | $ | 2,722 | $ | 2,957 | $ | 69 | |||||||||||||||||||
Commercial real estate | 4,929 | 4,952 | 37 | 51 | 402 | ||||||||||||||||||||||||
Commercial business | 328 | 524 | 923 | 1,346 | 893 | ||||||||||||||||||||||||
Accruing troubled debt restructured loans | 7,656 | 7,936 | 3,682 | 4,354 | 1,364 | ||||||||||||||||||||||||
Nonaccrual troubled debt restructured loans: | |||||||||||||||||||||||||||||
Residential real estate | $ | 872 | $ | 943 | $ | 3,008 | $ | — | $ | — | |||||||||||||||||||
Commercial real estate | — | — | 334 | 334 | — | ||||||||||||||||||||||||
Commercial business | 571 | 680 | 217 | 219 | 66 | ||||||||||||||||||||||||
Nonaccrual troubled debt restructured loans | 1,443 | 1,623 | 3,559 | 553 | 66 | ||||||||||||||||||||||||
Total troubled debt restructured loans | $ | 9,099 | $ | 9,559 | $ | 7,241 | $ | 4,907 | $ | 1,430 |
At December 31, | |||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||
Balance at beginning of period | $ | 13,509 | $ | 15,462 | $ | 18,904 | $ | 17,982 | $ | 14,169 | |||||||||||||||||||
Charge-offs: | |||||||||||||||||||||||||||||
Residential real estate | — | (875) | (420) | — | — | ||||||||||||||||||||||||
Commercial real estate | — | (594) | (5,614) | — | — | ||||||||||||||||||||||||
Construction | — | — | — | — | (7) | ||||||||||||||||||||||||
Commercial business | (83) | (897) | (815) | (521) | (69) | ||||||||||||||||||||||||
Consumer | (40) | (75) | (77) | (51) | (35) | ||||||||||||||||||||||||
Total charge-offs | (123) | (2,441) | (6,926) | (572) | (111) | ||||||||||||||||||||||||
Recoveries: | |||||||||||||||||||||||||||||
Residential real estate | — | — | — | 146 | — | ||||||||||||||||||||||||
Commercial real estate | 15 | — | 18 | — | — | ||||||||||||||||||||||||
Consumer | 3 | 32 | 7 | 3 | 10 | ||||||||||||||||||||||||
Commercial Business | — | 19 | 19 | 4 | — | ||||||||||||||||||||||||
Total recoveries | 18 | 51 | 44 | 153 | 10 | ||||||||||||||||||||||||
Net charge-offs | (105) | (2,390) | (6,882) | (419) | (101) | ||||||||||||||||||||||||
Provision charged to earnings | 7,605 | 437 | 3,440 | 1,341 | 3,914 | ||||||||||||||||||||||||
Balance at end of period | $ | 21,009 | $ | 13,509 | $ | 15,462 | $ | 18,904 | $ | 17,982 | |||||||||||||||||||
Net charge-offs (recoveries) to average loans | 0.01 | % | 0.15 | % | 0.44 | % | 0.03 | % | 0.01 | % | |||||||||||||||||||
Allowance for loan losses to total loans | 1.29 | % | 0.84 | % | 0.96 | % | 1.23 | % | 1.32 | % |
At December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount | Percent of Loan Portfolio | Amount | Percent of Loan Portfolio | Amount | Percent of Loan Portfolio | Amount | Percent of Loan Portfolio | Amount | Percent of Loan Portfolio | ||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential real estate | $ | 610 | 6.99 | % | $ | 730 | 9.17 | % | $ | 857 | 11.10 | % | $ | 1,721 | 12.54 | % | $ | 1,802 | 14.33 | % | |||||||||||||||||||||||||||||||||||||||
Commercial real estate | 16,425 | 70.64 | 10,551 | 70.34 | 11,562 | 68.18 | 12,777 | 63.98 | 9,415 | 61.89 | |||||||||||||||||||||||||||||||||||||||||||||||||
Construction | 221 | 5.35 | 324 | 6.14 | 140 | 4.56 | 907 | 6.59 | 2,105 | 7.86 | |||||||||||||||||||||||||||||||||||||||||||||||||
Commercial business | 3,753 | 17.02 | 1,903 | 14.34 | 2,902 | 16.14 | 3,498 | 16.85 | 4,283 | 15.81 | |||||||||||||||||||||||||||||||||||||||||||||||||
Consumer | — | — | 1 | 0.01 | 1 | 0.02 | 1 | 0.04 | 377 | 0.11 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total allowance for loan losses | $ | 21,009 | 100.00 | % | $ | 13,509 | 100.00 | % | $ | 15,462 | 100.00 | % | $ | 18,904 | 100.00 | % | $ | 17,982 | 100.00 | % |
At December 31, | |||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||||||||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Marketable equity securities | $ | 2,083 | $ | 2,207 | $ | 2,047 | $ | 2,118 | $ | 2,003 | $ | 2,009 | |||||||||||||||||||||||
Securities available for sale: | |||||||||||||||||||||||||||||||||||
U.S. Government and agency obligations | 73,574 | 76,878 | 81,263 | 82,439 | 83,815 | 82,136 | |||||||||||||||||||||||||||||
State agency and municipal obligations | — | — | — | — | 4,023 | 4,007 | |||||||||||||||||||||||||||||
Corporate bonds | 11,500 | 11,727 | — | — | 7,061 | 7,011 | |||||||||||||||||||||||||||||
Total securities available for sale | $ | 85,074 | $ | 88,605 | $ | 81,263 | $ | 82,439 | $ | 94,899 | $ | 93,154 | |||||||||||||||||||||||
Securities held to maturity: | |||||||||||||||||||||||||||||||||||
State agency and municipal obligations | $ | 16,018 | $ | 19,962 | $ | 16,231 | $ | 18,222 | $ | 20,328 | $ | 20,890 | |||||||||||||||||||||||
Corporate bonds | — | — | — | — | 1,000 | 1,000 | |||||||||||||||||||||||||||||
Government mortgage-backed securities | 60 | 70 | 77 | 85 | 93 | 98 | |||||||||||||||||||||||||||||
Total securities held to maturity | $ | 16,078 | $ | 20,032 | $ | 16,308 | $ | 18,307 | $ | 21,421 | $ | 21,988 |
Due Within 1 Year | Due 1–5 Years | Due 5–10 Years | Due After 10 Years or No Contractual Maturity | ||||||||||||||||||||||||||||||||||||||||||||
At December 31, 2020 | Amortized Cost | Yield | Amortized Cost | Yield | Amortized Cost | Yield | Amortized Cost | Yield | |||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Marketable equity securities | $ | — | — | % | $ | — | — | % | $ | — | — | % | $ | 2,083 | 2.20 | % | |||||||||||||||||||||||||||||||
Securities available for sale: | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. Government and agency obligations | 9,976 | 2.02 | — | — | 8,038 | 2.88 | 55,560 | 2.49 | |||||||||||||||||||||||||||||||||||||||
Corporate bonds | — | — | 4,000 | 4.09 | 6,000 | 4.65 | 1,500 | 4.50 | |||||||||||||||||||||||||||||||||||||||
Total securities available for sale | $ | 9,976 | 2.02 | % | $ | 4,000 | 4.09 | % | $ | 14,038 | 3.63 | % | $ | 57,060 | 2.54 | % | |||||||||||||||||||||||||||||||
Securities held to maturity: | |||||||||||||||||||||||||||||||||||||||||||||||
State agency and municipal obligations | $ | — | — | % | $ | — | — | % | $ | — | — | % | $ | 16,018 | 5.01 | % | |||||||||||||||||||||||||||||||
Government mortgage-backed securities | — | — | — | — | — | — | 60 | 5.35 | |||||||||||||||||||||||||||||||||||||||
Total securities held to maturity | $ | — | — | % | $ | — | — | % | $ | — | — | % | $ | 16,078 | 5.01 | % |
Due Within 1 Year | Due 1–5 Years | Due 5–10 Years | Due After 10 Years or No Contractual Maturity | ||||||||||||||||||||||||||||||||||||||||||||
At December 31, 2019 | Amortized Cost | Yield | Amortized Cost | Yield | Amortized Cost | Yield | Amortized Cost | Yield | |||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Marketable equity securities | $ | — | — | % | $ | — | — | % | $ | — | — | % | $ | 2,047 | 2.20 | % | |||||||||||||||||||||||||||||||
Securities available for sale: | |||||||||||||||||||||||||||||||||||||||||||||||
U.S. Government and agency obligations | 2,100 | 1.59 | 9,950 | 2.02 | 8,311 | 2.87 | 60,902 | 2.61 | |||||||||||||||||||||||||||||||||||||||
Total securities available for sale | $ | 2,100 | 1.59 | % | $ | 9,950 | 2.02 | % | $ | 8,311 | 2.87 | % | $ | 60,902 | 2.61 | % | |||||||||||||||||||||||||||||||
Securities held to maturity: | |||||||||||||||||||||||||||||||||||||||||||||||
State agency and municipal obligations | $ | — | — | % | $ | — | — | % | $ | — | — | % | $ | 16,231 | 5.05 | % | |||||||||||||||||||||||||||||||
Government mortgage-backed securities | — | — | — | — | — | — | 77 | 5.35 | |||||||||||||||||||||||||||||||||||||||
Total securities held to maturity | $ | — | — | % | $ | — | — | % | $ | — | —% | $ | 16,308 | 5.05 | % |
At December 31, | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
Amount | Percent | Weighted Average Rate | Amount | Percent | Weighted Average Rate | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Noninterest-bearing demand | $ | 270,235 | 14.79 | % | — | % | $ | 191,518 | 12.84 | % | — | % | |||||||||||||||||||||||
NOW | 101,737 | 5.57 | 0.17 | 70,020 | 4.69 | 0.21 | |||||||||||||||||||||||||||||
Money market | 669,364 | 36.63 | 0.79 | 419,495 | 28.12 | 1.62 | |||||||||||||||||||||||||||||
Savings | 158,750 | 8.69 | 0.81 | 183,729 | 12.31 | 1.67 | |||||||||||||||||||||||||||||
Time | 627,230 | 34.32 | 1.77 | 627,141 | 42.04 | 2.27 | |||||||||||||||||||||||||||||
Total deposits | $ | 1,827,316 | 100.00 | % | 1.23 | % | $ | 1,491,903 | 100.00 | % | 1.87 | % |
At December 31, | |||||||||||
2020 | 2019 | ||||||||||
(In thousands) | |||||||||||
Maturing: | |||||||||||
Within 3 months | $ | 141,784 | $ | 114,636 | |||||||
After 3 but within 6 months | 67,064 | 139,852 | |||||||||
After 6 months but within 1 year | 118,880 | 104,355 | |||||||||
After 1 year | 192,051 | 143,907 | |||||||||
Total | $ | 519,779 | $ | 502,750 |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Average amount outstanding during the period | $ | 165,232 | $ | 145,921 | $ | 163,419 | |||||||||||
Amount outstanding at end of period | 175,000 | 150,000 | 135,000 | ||||||||||||||
Highest month end balance during the period | 175,000 | 150,000 | 174,000 | ||||||||||||||
Weighted average interest rate at end of period(1) | 1.84 | % | 1.93 | % | 2.55 | % |
Original Notional Amount | Original Maturity | Maturity Date | Received | Paid | Fair Value Asset (Liability) | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||||||||||||||
Interest rate swap | $ | 25,000 | 5.0 years | July 1, 2021 | 3-month LIBOR | 1.22% | $ | (128) | |||||||||||||||||||||||||||
Interest rate swap | 25,000 | 3.0 years | December 23, 2022 | 3-month LIBOR | 1.28% | (541) | |||||||||||||||||||||||||||||
Interest rate swap | 25,000 | 7.0 years | August 25, 2024 | 3-month LIBOR | 2.04% | (1,622) | |||||||||||||||||||||||||||||
Interest rate swap | 25,000 | 7.0 years | August 25, 2024 | 3-month LIBOR | 2.04% | (1,618) | |||||||||||||||||||||||||||||
Interest rate swap | 25,000 | 5.0 years | April 9, 2025 | 3-month LIBOR | 0.55% | (224) | |||||||||||||||||||||||||||||
Interest rate swap | 25,000 | 5.0 years | April 23, 2025 | 3-month LIBOR | 0.54% | (212) | |||||||||||||||||||||||||||||
Interest rate swap | 25,000 | 15.0 years | January 1, 2034 | 3-month LIBOR | 3.01% | (6,086) | |||||||||||||||||||||||||||||
Interest rate swap | 25,000 | 15.0 years | January 1, 2035 | 3-month LIBOR | 3.03% | (6,445) | |||||||||||||||||||||||||||||
Interest rate swap | 25,000 | 15.0 years | August 26, 2035 | 3-month LIBOR | 3.05% | (6,691) | |||||||||||||||||||||||||||||
$ | 225,000 | $ | (23,567) | ||||||||||||||||||||||||||||||||
Derivatives not designated as hedging instruments:(1) | |||||||||||||||||||||||||||||||||||
Interest rate swap | $ | 18,500 | 10.0 years | March 10, 2030 | 1-month LIBOR | 3.15% | $ | (648) | |||||||||||||||||||||||||||
Interest rate swap | 18,500 | 10.0 years | March 10, 2030 | 1-month LIBOR | 3.15% | 648 | |||||||||||||||||||||||||||||
Interest rate swap | 20,000 | 20.0 years | March 10, 2039 | 1-month LIBOR | 5.00% | (3,796) | |||||||||||||||||||||||||||||
Interest rate swap | 20,000 | 20.0 years | March 10, 2039 | 1-month LIBOR | 5.00% | 3,796 | |||||||||||||||||||||||||||||
$ | 77,000 | $ | — | ||||||||||||||||||||||||||||||||
Total Derivatives | $ | 302,000 | $ | (23,567) |
Original Notional Amount | Original Maturity | Maturity Date | Received | Paid | Fair Value Asset (Liability) | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||||||||||||||
Interest rate swap | $ | 25,000 | 5.0 years | January 1, 2020 | 3-month LIBOR | 1.83% | $ | — | |||||||||||||||||||||||||||
Interest rate swap | 25,000 | 5.0 years | August 26, 2020 | 3-month LIBOR | 1.48% | 51 | |||||||||||||||||||||||||||||
Interest rate swap | 25,000 | 5.0 years | July 1, 2021 | 3-month LIBOR | 1.22% | 174 | |||||||||||||||||||||||||||||
Interest rate swap | 25,000 | 7.0 years | August 25, 2024 | 3-month LIBOR | 2.04% | (396) | |||||||||||||||||||||||||||||
Interest rate swap | 25,000 | 7.0 years | August 25, 2024 | 3-month LIBOR | 2.04% | (402) | |||||||||||||||||||||||||||||
Interest rate swap | 25,000 | 15.0 years | January 1, 2034 | 3-month LIBOR | 3.01% | (3,328) | |||||||||||||||||||||||||||||
Interest rate swap | 25,000 | 3.0 years | December 23, 2022 | 3-month LIBOR | 1.28% | 279 | |||||||||||||||||||||||||||||
Forward-starting interest rate swap(1) | 25,000 | 15.0 years | January 1, 2035 | 3-month LIBOR | 3.03% | (3,557) | |||||||||||||||||||||||||||||
Forward-starting interest rate swap(1) | 25,000 | 15.0 years | August 26, 2035 | 3-month LIBOR | 3.05% | (3,512) | |||||||||||||||||||||||||||||
$ | 225,000 | $ | (10,691) | ||||||||||||||||||||||||||||||||
Derivatives not designated as hedging instruments:(2) | |||||||||||||||||||||||||||||||||||
Interest rate swap | $ | 20,000 | 20.0 years | March 20, 2039 | 1-month USD LIBOR | 5.00% | $ | (1,762) | |||||||||||||||||||||||||||
Interest rate swap | 20,000 | 20.0 years | March 20, 2039 | 1-month USD LIBOR | 5.00% | 1,762 | |||||||||||||||||||||||||||||
$ | 40,000 | $ | — | ||||||||||||||||||||||||||||||||
Total Derivatives | $ | 265,000 | $ | (10,691) |
Payments Due by Period | |||||||||||||||||||||||||||||
Total | Less Than 1 Year | 1–3 Years | 4–5 Years | After 5 Years | |||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||
Contractual Obligations: | |||||||||||||||||||||||||||||
FHLB advances | $ | 175,000 | $ | 175,000 | $ | — | $ | — | $ | — | |||||||||||||||||||
Subordinated debt | 25,500 | — | — | 25,500 | — | ||||||||||||||||||||||||
Operating lease agreements | 22,929 | 1,826 | 2,389 | 1,488 | 17,226 | ||||||||||||||||||||||||
Time deposits with stated maturity dates | 627,230 | 418,117 | 178,920 | 30,193 | — | ||||||||||||||||||||||||
Total contractual obligations | $ | 850,659 | $ | 594,943 | $ | 181,309 | $ | 57,181 | $ | 17,226 |
Amount of Commitment Expiration per Period | |||||||||||||||||||||||||||||
Total | Less Than 1 Year | 1–3 Years | 4–5 Years | After 5 Years | |||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||
Other Commitments: | |||||||||||||||||||||||||||||
Loan commitments | $ | 114,574 | $ | 70,958 | $ | 18,447 | $ | 17,030 | $ | 8,139 | |||||||||||||||||||
Undisbursed construction loans | 117,457 | 9,862 | 40,635 | 14,599 | 52,361 | ||||||||||||||||||||||||
Unused home equity lines of credit | 5,029 | 250 | 210 | — | 4,569 | ||||||||||||||||||||||||
Total other commitments | $ | 237,060 | $ | 81,070 | $ | 59,292 | $ | 31,629 | $ | 65,069 |
Amount of Commitment Expiration per Period | |||||||||||||||||||||||||||||
Total | Less Than 1 Year | 1–3 Years | 4–5 Years | After 5 Years | |||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||
Other Commitments: | |||||||||||||||||||||||||||||
Loan commitments | $ | 102,986 | $ | 56,483 | $ | 12,628 | $ | 15,166 | $ | 18,709 | |||||||||||||||||||
Undisbursed construction loans | 80,472 | 1,715 | 26,281 | 15,340 | 37,136 | ||||||||||||||||||||||||
Unused home equity lines of credit | 6,284 | 368 | 200 | 10 | 5,706 | ||||||||||||||||||||||||
Total other commitments | $ | 189,742 | $ | 58,566 | $ | 39,109 | $ | 30,516 | $ | 61,551 |
Estimated Percent Change in Net Interest Income | ||||||||||||||
At December 31, | ||||||||||||||
Rate Changes (basis points) | 2020 | 2019 | ||||||||||||
(100) | 0.20 | % | 3.00 | % | ||||||||||
200 | (1.40) | (6.80) |
Estimated Percent Change in Net Interest Income | ||||||||||||||
At December 31, | ||||||||||||||
Rate Changes (basis points) | 2020 | 2019 | ||||||||||||
(100) | (0.30) | % | 5.00 | % | ||||||||||
100 | (1.00) | (6.20) | ||||||||||||
200 | (1.70) | (12.90) | ||||||||||||
300 | (2.00) | (19.50) |
Estimated Percent Change in Economic Value of Equity | ||||||||||||||
At December 31, | ||||||||||||||
Rate Changes (basis points) | 2020 | 2019 | ||||||||||||
(100) | (47.30) | % | (2.00) | % | ||||||||||
100 | 9.30 | (6.50) | ||||||||||||
200 | 13.80 | (17.20) | ||||||||||||
300 | 18.40 | (25.50) |
December 31, | |||||||||||
2020 | 2019 | ||||||||||
ASSETS | |||||||||||
Cash and due from banks | $ | $ | |||||||||
Federal funds sold | |||||||||||
Cash and cash equivalents | |||||||||||
Investment securities | |||||||||||
Marketable equity securities, at fair value | |||||||||||
Available for sale investment securities, at fair value | |||||||||||
Held to maturity investment securities, at amortized cost (fair values of $ | |||||||||||
Total investment securities | |||||||||||
Loans receivable (net of allowance for loan losses of $ | |||||||||||
Accrued interest receivable | |||||||||||
Federal Home Loan Bank stock, at cost | |||||||||||
Premises and equipment, net | |||||||||||
Bank-owned life insurance | |||||||||||
Goodwill | |||||||||||
Other intangible assets | |||||||||||
Deferred income taxes, net | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Liabilities | |||||||||||
Deposits | |||||||||||
Noninterest bearing deposits | $ | $ | |||||||||
Interest bearing deposits | |||||||||||
Total deposits | |||||||||||
Advances from the Federal Home Loan Bank | |||||||||||
Subordinated debentures ($ | |||||||||||
Accrued expenses and other liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 12) | |||||||||||
Shareholders’ equity | |||||||||||
Common stock, | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total shareholders’ equity | |||||||||||
Total liabilities and shareholders’ equity | $ | $ |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Interest and dividend income | |||||||||||||||||
Interest and fees on loans | $ | $ | $ | ||||||||||||||
Interest and dividends on securities | |||||||||||||||||
Interest on cash and cash equivalents | |||||||||||||||||
Total interest and dividend income | |||||||||||||||||
Interest expense | |||||||||||||||||
Interest expense on deposits | |||||||||||||||||
Interest expense on borrowings | |||||||||||||||||
Total interest expense | |||||||||||||||||
Net interest income | |||||||||||||||||
Provision for loan losses | |||||||||||||||||
Net interest income after provision for loan losses | |||||||||||||||||
Noninterest income | |||||||||||||||||
Bank owned life insurance | |||||||||||||||||
Service charges and fees | |||||||||||||||||
Gains and fees from sales of loans | |||||||||||||||||
Gain (loss) on sale of other real estate owned, net | ( | ||||||||||||||||
Net gain on sale of available for sale securities | |||||||||||||||||
Other | |||||||||||||||||
Total noninterest income | |||||||||||||||||
Noninterest expense | |||||||||||||||||
Salaries and employee benefits | |||||||||||||||||
Occupancy and equipment | |||||||||||||||||
Data processing | |||||||||||||||||
Professional services | |||||||||||||||||
Director fees | |||||||||||||||||
FDIC insurance | |||||||||||||||||
Marketing | |||||||||||||||||
Other | |||||||||||||||||
Total noninterest expense | |||||||||||||||||
Income before income tax expense | |||||||||||||||||
Income tax expense | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Earnings Per Common Share: | |||||||||||||||||
Basic | $ | $ | $ | ||||||||||||||
Diluted | $ | $ | $ | ||||||||||||||
Weighted Average Common Shares Outstanding: | |||||||||||||||||
Basic | |||||||||||||||||
Diluted | |||||||||||||||||
Dividends per common share | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Other comprehensive (loss) income: | |||||||||||||||||
Unrealized gains (losses) on securities: | |||||||||||||||||
Unrealized holding gains (losses) on available for sale securities | ( | ||||||||||||||||
Reclassification adjustment for gains realized in net income | ( | ( | |||||||||||||||
Net change in unrealized gains (losses) | ( | ||||||||||||||||
Income tax (expense) benefit | ( | ( | |||||||||||||||
Unrealized gains (losses) on securities, net of tax | ( | ||||||||||||||||
Unrealized losses on interest rate swaps: | |||||||||||||||||
Unrealized losses on interest rate swaps | ( | ( | ( | ||||||||||||||
Income tax benefit | |||||||||||||||||
Unrealized losses on interest rate swaps, net of tax | ( | ( | ( | ||||||||||||||
Total other comprehensive loss, net of tax | ( | ( | ( | ||||||||||||||
Comprehensive (loss) income | $ | ( | $ | $ |
Number of Outstanding Shares | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||||||||||||
Balance at January 1, 2018 | $ | $ | $ | $ | |||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | ( | ( | ||||||||||||||||||||||||
Cash dividends declared ($ | — | — | ( | — | ( | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Warrants exercised | — | — | |||||||||||||||||||||||||||
Issuance of restricted stock | — | — | — | — | |||||||||||||||||||||||||
Forfeitures of restricted stock | ( | — | — | — | — | ||||||||||||||||||||||||
Stock options exercised | — | — | |||||||||||||||||||||||||||
Balance at December 31, 2018 | ( | ||||||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | ( | ( | ||||||||||||||||||||||||
Cash dividends declared ($ | — | — | ( | — | ( | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Issuance of restricted stock | — | — | — | — | |||||||||||||||||||||||||
Forfeitures of restricted stock | ( | — | — | — | — | ||||||||||||||||||||||||
Stock options exercised | — | — | |||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | — | — | ( | ||||||||||||||||||||||||
transition adjustment, net of tax | — | — | — | ||||||||||||||||||||||||||
Balance at December 31, 2019 | ( | ||||||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | ( | ( | ||||||||||||||||||||||||
Cash dividends declared ($ | — | — | ( | — | ( | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Issuance of restricted stock | — | — | — | — | |||||||||||||||||||||||||
Forfeitures of restricted stock | ( | — | — | — | — | ||||||||||||||||||||||||
Stock options exercised | — | — | |||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | — | — | ( | ||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | ( | $ |
Bankwell Financial Group, Inc. Consolidated Statements of Cash Flows (In thousands) | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Cash flows from operating activities | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||||||||||||||||
Net amortization (accretion) of premiums and discounts on investment securities | ( | ( | |||||||||||||||
Provision for loan losses | |||||||||||||||||
(Credit) provision for deferred income taxes | ( | ||||||||||||||||
Net gain on sales of available for sale securities | ( | ( | |||||||||||||||
Change in fair value of marketable equity securities | ( | ( | |||||||||||||||
Depreciation and amortization | |||||||||||||||||
Impairment of right-of-use asset | |||||||||||||||||
Amortization of debt issuance costs | |||||||||||||||||
Increase in cash surrender value of bank-owned life insurance | ( | ( | ( | ||||||||||||||
Gains and fees from sales of loans | ( | ( | ( | ||||||||||||||
Stock-based compensation | |||||||||||||||||
Net amortization of purchase accounting adjustments | |||||||||||||||||
Loss on sale of premises and equipment | |||||||||||||||||
(Gain) loss on sale and write-downs of other real estate owned, net | ( | ||||||||||||||||
Write down of assets held for sale | |||||||||||||||||
Net change in: | |||||||||||||||||
Deferred loan fees | ( | ( | |||||||||||||||
Accrued interest receivable | ( | ( | |||||||||||||||
Other assets | ( | ( | ( | ||||||||||||||
Accrued expenses and other liabilities | ( | ( | |||||||||||||||
Net cash (used in) provided by operating activities | ( | ||||||||||||||||
Cash flows from investing activities | |||||||||||||||||
Proceeds from principal repayments on available for sale securities | |||||||||||||||||
Proceeds from principal repayments on held to maturity securities | |||||||||||||||||
Net proceeds from sales and calls of available for sale securities | |||||||||||||||||
Net proceeds from sales and calls of held to maturity securities | |||||||||||||||||
Purchases of available for sale securities | ( | ( | ( | ||||||||||||||
Purchases of marketable equity securities | ( | ( | ( | ||||||||||||||
Net increase in loans | ( | ( | ( | ||||||||||||||
Loan principal sold from loans not originated for sale | ( | ( | ( | ||||||||||||||
Proceeds from sales of loans not originated for sale | |||||||||||||||||
Disposals (purchases) of premises and equipment, net | ( | ( | |||||||||||||||
(Purchase) reduction of Federal Home Loan Bank stock | ( | ||||||||||||||||
Proceeds from sale of other real estate owned | |||||||||||||||||
Net cash (used in) provided by investing activities | ( | ( | |||||||||||||||
Bankwell Financial Group, Inc. Consolidated Statements of Cash Flows - Continued (In thousands) | |||||||||||||||||
Cash flows from financing activities | |||||||||||||||||
Net change in time certificates of deposit | ( | ||||||||||||||||
Net change in other deposits | ( | ||||||||||||||||
Net change in FHLB advances | ( | ( | |||||||||||||||
Proceeds from exercise of warrants | |||||||||||||||||
Proceeds from exercise of options | |||||||||||||||||
Dividends paid on common stock | ( | ( | ( | ||||||||||||||
Repurchase of common stock | ( | ( | |||||||||||||||
Net cash provided by (used in) financing activities | ( | ||||||||||||||||
Net increase (decrease) in cash and cash equivalents | ( | ||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||
Beginning of year | |||||||||||||||||
End of period | $ | $ | $ | ||||||||||||||
Supplemental disclosures of cash flows information: | |||||||||||||||||
Cash paid for: | |||||||||||||||||
Interest | $ | $ | $ | ||||||||||||||
Income taxes | |||||||||||||||||
Noncash investing and financing activities | |||||||||||||||||
Loans transferred to other real estate owned | |||||||||||||||||
Premises and equipment transferred to held for sale | |||||||||||||||||
Net change in unrealized losses or gains on available-for-sale securities | ( | ||||||||||||||||
Net change in unrealized losses or gains on interest rate swaps | ( | ( | ( | ||||||||||||||
Establishment of right-of-use-asset and lease liability | |||||||||||||||||
transition adjustment, net of tax |
Year Ended December 31, 2020 | Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||||
(In thousands) | |||||||||||||||||
Balance, beginning of the period | $ | $ | $ | ||||||||||||||
Impairment | |||||||||||||||||
Balance, end of the period | $ | $ | $ |
Gross Intangible Asset | Accumulated Amortization | Net Intangible Asset | |||||||||||||||
(In thousands) | |||||||||||||||||
December 31, 2020 | |||||||||||||||||
Core deposit intangible | $ | $ | $ | ||||||||||||||
December 31, 2019 | |||||||||||||||||
Core deposit intangible | $ | $ | $ |
December 31, 2020 | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized | Fair Value | |||||||||||||||||||||
Gains | Losses | ||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Available for sale securities: | |||||||||||||||||||||||
U.S. Government and agency obligations | |||||||||||||||||||||||
Less than one year | $ | $ | $ | $ | |||||||||||||||||||
Due from five through ten years | |||||||||||||||||||||||
Due after ten years | |||||||||||||||||||||||
Total U.S. Government and agency obligations | |||||||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||
Due from one through five years | |||||||||||||||||||||||
Due from five through ten years | |||||||||||||||||||||||
Due after ten years | |||||||||||||||||||||||
Total Corporate bonds | |||||||||||||||||||||||
Total available for sale securities | $ | $ | $ | $ | |||||||||||||||||||
Held to maturity securities: | |||||||||||||||||||||||
State agency and municipal obligations | |||||||||||||||||||||||
Due after ten years | $ | $ | $ | $ | |||||||||||||||||||
Government-sponsored mortgage backed securities | |||||||||||||||||||||||
No contractual maturity | |||||||||||||||||||||||
Total held to maturity securities | $ | $ | $ | $ |
December 31, 2019 | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized | Fair Value | |||||||||||||||||||||
Gains | Losses | ||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Available for sale securities: | |||||||||||||||||||||||
U.S. Government and agency obligations | |||||||||||||||||||||||
Less than one year | $ | $ | $ | ( | $ | ||||||||||||||||||
Due from one through five years | |||||||||||||||||||||||
Due from five through ten years | ( | ||||||||||||||||||||||
Due after ten years | |||||||||||||||||||||||
Total available for sale securities | $ | $ | $ | ( | $ | ||||||||||||||||||
Held to maturity securities: | |||||||||||||||||||||||
State agency and municipal obligations | |||||||||||||||||||||||
Due after ten years | $ | $ | $ | $ | |||||||||||||||||||
Government-sponsored mortgage backed securities | |||||||||||||||||||||||
No contractual maturity | |||||||||||||||||||||||
Total held to maturity securities | $ | $ | $ | $ |
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 | |||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Government and agency obligations | $ | $ | ( | % | $ | $ | ( | % | $ | $ | ( | % | |||||||||||||||||||||||||||||||||||||||||
Total investment securities | $ | $ | ( | % | $ | $ | ( | % | $ | $ | ( | % |
December 31, 2020 | December 31, 2019 | ||||||||||
(In thousands) | |||||||||||
Real estate loans: | |||||||||||
Residential | $ | $ | |||||||||
Commercial | |||||||||||
Construction | |||||||||||
Commercial business(1) | |||||||||||
Consumer | |||||||||||
Total loans | |||||||||||
Allowance for loan losses | ( | ( | |||||||||
Deferred loan origination fees, net | ( | ( | |||||||||
Unamortized loan premiums | |||||||||||
Loans receivable, net | $ | $ |
Residential Real Estate | Commercial Real Estate | Construction | Commercial Business | Consumer | Total | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
For the Year Ended December 31, 2020 | |||||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ||||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||
(Credits) Provisions | ( | ( | |||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ |
Residential Real Estate | Commercial Real Estate | Construction | Commercial Business | Consumer | Total | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
For the Year Ended December 31, 2019 | |||||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||
Provisions (Credits) | ( | ( | |||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ |
Residential Real Estate | Commercial Real Estate | Construction | Commercial Business | Consumer | Total | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
For the Year Ended December 31, 2018 | |||||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||
(Credits) provisions | ( | ( | |||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ |
Portfolio | Allowance | ||||||||||
(In thousands) | |||||||||||
December 31, 2020 | |||||||||||
Loans individually evaluated for impairment: | |||||||||||
Residential real estate | $ | $ | |||||||||
Commercial real estate | |||||||||||
Construction | |||||||||||
Commercial business | |||||||||||
Subtotal | |||||||||||
Loans collectively evaluated for impairment: | |||||||||||
Residential real estate | |||||||||||
Commercial real estate | |||||||||||
Construction | |||||||||||
Commercial business | |||||||||||
Consumer | |||||||||||
Subtotal | |||||||||||
Total | $ | $ |
Portfolio | Allowance | ||||||||||
(In thousands) | |||||||||||
December 31, 2019 | |||||||||||
Loans individually evaluated for impairment: | |||||||||||
Residential real estate | $ | $ | |||||||||
Commercial real estate | |||||||||||
Commercial business | |||||||||||
Subtotal | |||||||||||
Loans collectively evaluated for impairment: | |||||||||||
Residential real estate | |||||||||||
Commercial real estate | |||||||||||
Construction | |||||||||||
Commercial business | |||||||||||
Consumer | |||||||||||
Subtotal | |||||||||||
Total | $ | $ |
Commercial Credit Quality Indicators | |||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||
Commercial Real Estate | Construction | Commercial Business | Total | Commercial Real Estate | Construction | Commercial Business | Total | ||||||||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||
Loss | |||||||||||||||||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ | $ | $ |
Residential and Consumer Credit Quality Indicators | |||||||||||||||||||||||||||||||||||
December 31, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||
Residential Real Estate | Consumer | Total | Residential Real Estate | Consumer | Total | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Special mention | |||||||||||||||||||||||||||||||||||
Substandard | |||||||||||||||||||||||||||||||||||
Doubtful | |||||||||||||||||||||||||||||||||||
Loss | |||||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ |
December 31, 2020 | |||||||||||||||||||||||||||||||||||
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 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||||||||
Construction | |||||||||||||||||||||||||||||||||||
Commercial business | |||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ |
December 31, 2019 | |||||||||||||||||||||||||||||||||||
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 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||||||||
Construction | |||||||||||||||||||||||||||||||||||
Commercial business | |||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ |
December 31, | |||||||||||
2020 | 2019 | ||||||||||
(In thousands) | |||||||||||
Residential real estate | $ | $ | |||||||||
Commercial real estate | |||||||||||
Commercial business | |||||||||||
Construction | |||||||||||
Total | $ | $ |
As of and for the Year Ended December 31, 2020 | |||||||||||||||||||||||||||||
Carrying Amount | Unpaid Principal Balance | Associated Allowance | Average Carrying Amount | Interest Income Recognized | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Impaired loans without a valuation allowance: | |||||||||||||||||||||||||||||
Residential real estate | $ | $ | $ | — | $ | $ | |||||||||||||||||||||||
Commercial real estate | — | ||||||||||||||||||||||||||||
Construction | — | ||||||||||||||||||||||||||||
Commercial business | — | ||||||||||||||||||||||||||||
Total impaired loans without a valuation allowance | — | ||||||||||||||||||||||||||||
Impaired loans with a valuation allowance: | |||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||
Commercial business | |||||||||||||||||||||||||||||
Total impaired loans with a valuation allowance | |||||||||||||||||||||||||||||
Total impaired loans | $ | $ | $ | $ | $ |
As of and for the Year Ended December 31, 2019 | |||||||||||||||||||||||||||||
Carrying Amount | Unpaid Principal Balance | Associated Allowance | Average Carrying Amount | Interest Income Recognized | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Impaired loans without a valuation allowance: | |||||||||||||||||||||||||||||
Residential real estate | $ | $ | $ | — | $ | $ | |||||||||||||||||||||||
Commercial real estate | — | ||||||||||||||||||||||||||||
Commercial business | — | ||||||||||||||||||||||||||||
Total impaired loans without a valuation allowance | — | ||||||||||||||||||||||||||||
Impaired loans with a valuation allowance: | |||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||
Commercial business | |||||||||||||||||||||||||||||
Total impaired loans with a valuation allowance | |||||||||||||||||||||||||||||
Total impaired loans | $ | $ | $ | $ | $ |
As of and for the Year Ended December 31, 2018 | |||||||||||||||||||||||||||||
Carrying Amount | Unpaid Principal Balance | Associated Allowance | Average Carrying Amount | Interest Income Recognized | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Impaired loans without a valuation allowance: | |||||||||||||||||||||||||||||
Residential real estate | $ | $ | $ | — | $ | $ | |||||||||||||||||||||||
Commercial real estate | — | ||||||||||||||||||||||||||||
Commercial business | — | ||||||||||||||||||||||||||||
Consumer | — | ||||||||||||||||||||||||||||
Total impaired loans without a valuation allowance | — | ||||||||||||||||||||||||||||
Impaired loans with a valuation allowance: | |||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||
Total impaired loans with a valuation allowance | |||||||||||||||||||||||||||||
Total impaired loans | $ | $ | $ | $ | $ |
Outstanding Recorded Investment | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of Loans | Pre-Modification | Post-Modification | |||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2020 | 2019 | 2018 | 2020 | 2019 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Years ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial business | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(In thousands) | |||||||||||||||||
Maturity Concession | $ | $ | $ | ||||||||||||||
Maturity and payment concession | |||||||||||||||||
Maturity and rate concession | |||||||||||||||||
Payment concession | |||||||||||||||||
Rate and payment concession | |||||||||||||||||
Total | $ | $ | $ |
December 31, | |||||||||||
2020 | 2019 | ||||||||||
(In thousands) | |||||||||||
Land | $ | $ | |||||||||
Building | |||||||||||
Right-of-use asset | |||||||||||
Leasehold improvements | |||||||||||
Furniture and fixtures | |||||||||||
Equipment | |||||||||||
Automobiles | |||||||||||
Premises and equipment, gross | |||||||||||
Accumulated depreciation and amortization | ( | ( | |||||||||
Premises and equipment, net | $ | $ |
December 31, 2020 | |||||
(In thousands) | |||||
2021 | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
Thereafter | |||||
Total | $ |
December 31, 2020 | |||||
(In thousands) | |||||
Undiscounted cash flows | $ | ||||
Discount effect of cash flows | ( | ||||
Lease liability | $ |
December 31, 2020 | December 31, 2019 | ||||||||||
(In thousands) | |||||||||||
Deferred compensation | $ | $ | |||||||||
Servicing assets, net of valuation allowance | |||||||||||
Derivative assets | |||||||||||
Collateral posted related to interest rate swaps | |||||||||||
Assets held for sale | |||||||||||
Other | |||||||||||
Total Other Assets | $ | $ |
December 31, 2020 | December 31, 2019 | ||||||||||
(In thousands) | |||||||||||
Loan servicing rights: | |||||||||||
Balance at beginning of year | $ | $ | |||||||||
Servicing rights capitalized | |||||||||||
Servicing rights amortized | ( | ( | |||||||||
Servicing rights disposed | ( | ( | |||||||||
Change in valuation allowance | ( | ||||||||||
Balance at end of year | $ | $ |
December 31, | |||||||||||
2020 | 2019 | ||||||||||
(In thousands) | |||||||||||
Noninterest bearing demand deposit accounts | $ | $ | |||||||||
Interest bearing accounts: | |||||||||||
NOW | |||||||||||
Money market | |||||||||||
Savings | |||||||||||
Time certificates of deposit | |||||||||||
Total interest bearing accounts | |||||||||||
Total deposits | $ | $ |
December 31, | |||||||||||
2020 | 2019 | ||||||||||
(In thousands) | |||||||||||
2020 | $ | $ | |||||||||
2021 | |||||||||||
2022 | |||||||||||
2023 | |||||||||||
2024 | |||||||||||
2025 | |||||||||||
Total | $ | $ |
Years Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(In thousands) | |||||||||||||||||
NOW | $ | $ | $ | ||||||||||||||
Money market | |||||||||||||||||
Savings | |||||||||||||||||
Time certificates of deposit | |||||||||||||||||
Total interest expense on deposits | $ | $ | $ |
December 31, | |||||||||||||||||||||||
December 31, 2020 | December 31, 2019 | ||||||||||||||||||||||
Amount Due | Weighted Average Rate(1) | Amount Due | Weighted Average Rate(1) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Year of Maturity: | |||||||||||||||||||||||
2020 | $ | % | $ | % | |||||||||||||||||||
2021 | |||||||||||||||||||||||
Total advances | $ | % | $ | % |
December 31, 2020 | |||||||||||
Total Letter or Line of Credit | Total Outstanding | ||||||||||
(In thousands) | |||||||||||
FHLB | $ | $ | |||||||||
Atlantic Community Bankers Bank | |||||||||||
Zions Bank | |||||||||||
Texas Capital Bank | |||||||||||
Total | $ | $ |
December 31, | |||||||||||
2020 | 2019 | ||||||||||
(In thousands) | |||||||||||
Commitments to extend credit: | |||||||||||
Loan commitments | $ | $ | |||||||||
Undisbursed construction loans | |||||||||||
Unused home equity lines of credit | |||||||||||
$ | $ |
December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(In thousands) | |||||||||||||||||
Current provision: | |||||||||||||||||
Federal | $ | $ | $ | ||||||||||||||
State | |||||||||||||||||
Total current | |||||||||||||||||
Deferred (credit) provision: | |||||||||||||||||
Federal | ( | ||||||||||||||||
State | ( | ||||||||||||||||
Total deferred | ( | ||||||||||||||||
Total income tax expense | $ | $ | $ |
December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(In thousands) | |||||||||||||||||
Income tax expense at statutory federal rate | $ | $ | $ | ||||||||||||||
State tax expense, net of federal tax effect | |||||||||||||||||
Income exempt from tax | ( | ( | ( | ||||||||||||||
Stock compensation | ( | ( | |||||||||||||||
Deferred director fees | ( | ( | |||||||||||||||
Other items, net | ( | ( | |||||||||||||||
Income tax expense | $ | $ | $ |
December 31, | |||||||||||
2020 | 2019 | ||||||||||
(In thousands) | |||||||||||
Deferred tax assets: | |||||||||||
Allowance for loan losses | $ | $ | |||||||||
Net operating loss carryforwards | |||||||||||
Deferred fees | |||||||||||
Deferred director fees | |||||||||||
Start-up costs | |||||||||||
Unrealized loss on derivatives | |||||||||||
Lease liabilities | |||||||||||
Other | |||||||||||
Gross deferred tax assets | |||||||||||
Deferred tax liabilities: | |||||||||||
Deferred expenses | |||||||||||
Servicing rights | |||||||||||
Core deposit intangible | |||||||||||
Depreciation | |||||||||||
Unrealized gain on available for sale securities | |||||||||||
Right-of-use-assets | |||||||||||
Other | |||||||||||
Gross deferred tax liabilities | |||||||||||
Net deferred tax asset | $ | $ |
At December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(In thousands) | |||||||||||||||||
Balance, beginning of year | $ | $ | $ | ||||||||||||||
Net additions (reductions) relating to potential liability with taxing authorities | ( | ||||||||||||||||
Balance, end of year | $ | $ | $ |
For the Years Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Dividends to participating securities(1) | ( | ( | ( | ||||||||||||||
Undistributed earnings allocated to participating securities(1) | ( | ( | ( | ||||||||||||||
Net income for earnings per share calculation | $ | $ | $ | ||||||||||||||
Weighted average shares outstanding, basic | |||||||||||||||||
Effect of dilutive equity-based awards(2) | |||||||||||||||||
Weighted average shares outstanding, diluted | |||||||||||||||||
Net earnings per common share: | |||||||||||||||||
Basic earnings per common share | $ | $ | $ | ||||||||||||||
Diluted earnings per common share | $ | $ | $ |
December 31, 2020 | |||||||||||
Number of Shares | Weighted Average Exercise Price | ||||||||||
Options outstanding at beginning of period | $ | ||||||||||
Exercised | ( | ||||||||||
Options outstanding at end of period | |||||||||||
Options exercisable at end of period |
December 31, 2020 | |||||||||||
Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||
Unvested at beginning of period | (1) | $ | |||||||||
Granted | (2) | ||||||||||
Vested | ( | (3) | |||||||||
Forfeited | ( | ||||||||||
Unvested at end of period |
Net Unrealized Gain (Loss) on Available for Sale Securities | Net Unrealized Gain (Loss) on Interest Rate Swaps | Total | |||||||||||||||
(In thousands) | |||||||||||||||||
Balance at December 31, 2019 | $ | $ | ( | $ | ( | ||||||||||||
Other comprehensive income (loss) before reclassifications, net of tax | ( | ( | |||||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | |||||||||||||||||
Net other comprehensive income (loss) | ( | ( | |||||||||||||||
Balance at December 31, 2020 | $ | $ | ( | $ | ( |
Net Unrealized Gain (Loss) on Available for Sale Securities | Net Unrealized Gain (Loss) on Interest Rate Swaps | Total | |||||||||||||||
(In thousands) | |||||||||||||||||
Balance at December 31, 2018 | $ | ( | $ | $ | ( | ||||||||||||
Other comprehensive income (loss) before reclassifications, net of tax | ( | ( | |||||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | ( | ( | ( | ||||||||||||||
Net other comprehensive income ( loss) | ( | ( | |||||||||||||||
Balance at December 31, 2019 | $ | $ | ( | $ | ( |
Net Unrealized Gain (Loss) on Available for Sale Securities | Net Unrealized Gain (Loss) on Interest Rate Swaps | Total | |||||||||||||||
(In thousands) | |||||||||||||||||
Balance at December 31, 2017 | $ | $ | $ | ||||||||||||||
Other comprehensive loss before reclassifications, net of tax | ( | ( | ( | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | ( | ( | ( | ||||||||||||||
Net other comprehensive loss | ( | ( | ( | ||||||||||||||
Balance at December 31, 2018 | $ | ( | $ | $ | ( |
Accumulated Other Comprehensive Income (Loss) Components | For the Years Ended December 31, | Associated Line Item in the Consolidated Statements Of Income | ||||||||||||||||||||||||
2020 | 2019 | 2018 | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||||
Unrealized gains on investments | $ | $ | $ | Net gain on sale of available for sale securities | ||||||||||||||||||||||
Tax expense | ( | ( | Income tax expense | |||||||||||||||||||||||
Net of tax | $ | $ | $ | |||||||||||||||||||||||
Derivatives: | ||||||||||||||||||||||||||
Unrealized (losses) gains on derivatives | $ | ( | $ | $ | Interest expense on borrowings | |||||||||||||||||||||
Tax benefit (expense) | ( | ( | Income tax expense | |||||||||||||||||||||||
Net of tax | $ | ( | $ | $ |
Original Notional Amount | Original Maturity | Maturity Date | Received | Paid | Fair Value Asset (Liability) | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||||||||||||||
Interest rate swap | $ | July 1, 2021 | 3-month USD LIBOR | % | $ | ( | |||||||||||||||||||||||||||||
Interest rate swap | December 23, 2022 | 3-month USD LIBOR | % | ( | |||||||||||||||||||||||||||||||
Interest rate swap | August 25, 2024 | 3-month USD LIBOR | % | ( | |||||||||||||||||||||||||||||||
Interest rate swap | August 25, 2024 | 3-month USD LIBOR | % | ( | |||||||||||||||||||||||||||||||
Interest rate swap | April 9, 2025 | 3-month USD LIBOR | % | ( | |||||||||||||||||||||||||||||||
Interest rate swap | April 23, 2025 | 3-month USD LIBOR | % | ( | |||||||||||||||||||||||||||||||
Interest rate swap | January 1, 2034 | 3-month USD LIBOR | % | ( | |||||||||||||||||||||||||||||||
Interest rate swap | January 1, 2035 | 3-month USD LIBOR | % | ( | |||||||||||||||||||||||||||||||
Interest rate swap | August 26, 2035 | 3-month USD LIBOR | % | ( | |||||||||||||||||||||||||||||||
$ | $ | ( | |||||||||||||||||||||||||||||||||
Derivatives not designated as hedging instruments:(1) | |||||||||||||||||||||||||||||||||||
Interest rate swap | $ | March 10, 2030 | 1-month USD LIBOR | % | $ | ( | |||||||||||||||||||||||||||||
Interest rate swap | March 10, 2030 | 1-month USD LIBOR | % | ||||||||||||||||||||||||||||||||
Interest rate swap | March 10, 2039 | 1-month USD LIBOR | % | ( | |||||||||||||||||||||||||||||||
Interest rate swap | March 10, 2039 | 1-month USD LIBOR | % | ||||||||||||||||||||||||||||||||
$ | $ | ||||||||||||||||||||||||||||||||||
Total Derivatives | $ | $ | ( |
Original Notional Amount | Original Maturity | Maturity Date | Received | Paid | Fair Value Asset (Liability) | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||||||||||||||
Interest rate swap | $ | January 1, 2020 | 3-month USD LIBOR | % | $ | ||||||||||||||||||||||||||||||
Interest rate swap | August 26, 2020 | 3-month USD LIBOR | % | ||||||||||||||||||||||||||||||||
Interest rate swap | July 1, 2021 | 3-month USD LIBOR | % | ||||||||||||||||||||||||||||||||
Interest rate swap | August 25, 2024 | 3-month USD LIBOR | % | ( | |||||||||||||||||||||||||||||||
Interest rate swap | August 25, 2024 | 3-month USD LIBOR | % | ( | |||||||||||||||||||||||||||||||
Interest rate swap | January 1, 2034 | 3-month USD LIBOR | % | ( | |||||||||||||||||||||||||||||||
Interest rate swap | December 23, 2022 | 3-month USD LIBOR | % | ||||||||||||||||||||||||||||||||
Forward-starting interest rate swap(1) | January 1, 2035 | 3-month USD LIBOR | % | ( | |||||||||||||||||||||||||||||||
Forward-starting interest rate swap(1) | August 26, 2035 | 3-month USD LIBOR | % | ( | |||||||||||||||||||||||||||||||
$ | $ | ( | |||||||||||||||||||||||||||||||||
Derivatives not designated as hedging instruments:(2) | |||||||||||||||||||||||||||||||||||
Interest rate swap | $ | March 20, 2039 | 1-month USD LIBOR | $ | ( | ||||||||||||||||||||||||||||||
Interest rate swap | March 20, 2039 | 1-month USD LIBOR | |||||||||||||||||||||||||||||||||
$ | $ | ||||||||||||||||||||||||||||||||||
Total Derivatives | $ | $ | ( |
Notional Amount | Effective Date of Hedging Relationship | Duration of Interest Rate Swap | Counterparty | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
$ | July 1, 2016 | Bank of Montreal | ||||||||||||||||||
August 25, 2017 | Bank of Montreal | |||||||||||||||||||
August 25, 2017 | FHN Financial Capital Markets | |||||||||||||||||||
January 2, 2019 | Bank of Montreal | |||||||||||||||||||
December 27, 2019 | Bank of Montreal | |||||||||||||||||||
January 2, 2020 | Bank of Montreal | |||||||||||||||||||
April 15, 2020 | Goldman Sachs Bank USA | |||||||||||||||||||
April 29, 2020 | Goldman Sachs Bank USA | |||||||||||||||||||
August 26, 2020 | FHN Financial Capital Markets | |||||||||||||||||||
$ |
December 31, 2020 | December 31, 2019 | December 31, 2018 | |||||||||||||||
(In thousands) | |||||||||||||||||
Interest rate swaps designated as cash flow hedges: | |||||||||||||||||
Unrealized loss recognized in accumulated other comprehensive (loss) income before reclassifications | $ | ( | $ | ( | $ | ( | |||||||||||
Amounts reclassified from accumulated other comprehensive income | ( | ( | |||||||||||||||
Income tax benefit on items recognized in accumulated other comprehensive (loss) income | |||||||||||||||||
Other comprehensive loss | $ | ( | $ | ( | $ | ( |
December 31, 2020 | |||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||||||||||||||||||||||||||||||||||
Gross Amounts of Recognized Assets(1) | Gross Amounts Offset in the Statement of Financial Position | Net Amounts of Assets presented in the Statement of Financial Position | Financial Instruments | Cash Collateral Received | Net Amount | ||||||||||||||||||||||||||||||
Derivative Assets | $ | $ | $ | $ | $ | $ |
December 31, 2020 | |||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||||||||||||||||||||||||||||||||||
Gross Amounts of Recognized Liabilities(1) | Gross Amounts Offset in the Statement of Financial Position | Net Amounts of Liabilities presented in the Statement of Financial Position | Financial Instruments | Cash Collateral Posted(2) | Net Amount | ||||||||||||||||||||||||||||||
Derivative Liabilities | $ | $ | $ | $ | $ | $ |
December 31, 2019 | |||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||||||||||||||||||||||||||||||||||
Gross Amounts of Recognized Assets(1) | Gross Amounts Offset in the Statement of Financial Position | Net Amounts of Assets presented in the Statement of Financial Position | Financial Instruments | Cash Collateral Received | Net Amount | ||||||||||||||||||||||||||||||
Derivative Assets | $ | $ | $ | $ | $ | $ |
December 31, 2019 | |||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Gross Amounts Not Offset in the Consolidated Balance Sheets | |||||||||||||||||||||||||||||||||||
Gross Amounts of Recognized Assets | Gross Amounts Offset in the Statement of Financial Position | Net Amounts of Assets presented in the Statement of Financial Position | Financial Instruments | Cash Collateral Received | Net Amount | ||||||||||||||||||||||||||||||
Derivative Liabilities | $ | $ | $ | $ | $ | $ |
December 31, 2020 | |||||||||||||||||||||||||||||
Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||
Cash and due from banks | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Federal funds sold | |||||||||||||||||||||||||||||
Marketable equity securities | |||||||||||||||||||||||||||||
Available for sale securities | |||||||||||||||||||||||||||||
Held to maturity securities | |||||||||||||||||||||||||||||
Loans receivable, net | |||||||||||||||||||||||||||||
Accrued interest receivable | |||||||||||||||||||||||||||||
FHLB stock | |||||||||||||||||||||||||||||
Servicing asset, net of valuation allowance | |||||||||||||||||||||||||||||
Derivative asset | |||||||||||||||||||||||||||||
Assets held for sale | |||||||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||
Noninterest bearing deposits | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
NOW and money market | |||||||||||||||||||||||||||||
Savings | |||||||||||||||||||||||||||||
Time deposits | |||||||||||||||||||||||||||||
Accrued interest payable | |||||||||||||||||||||||||||||
Advances from the FHLB | |||||||||||||||||||||||||||||
Subordinated debentures | |||||||||||||||||||||||||||||
Servicing liability | |||||||||||||||||||||||||||||
Derivative liability |
December 31, 2019 | |||||||||||||||||||||||||||||
Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||
Cash and due from banks | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Marketable equity securities | |||||||||||||||||||||||||||||
Available for sale securities | |||||||||||||||||||||||||||||
Held to maturity securities | |||||||||||||||||||||||||||||
Loans receivable, net | |||||||||||||||||||||||||||||
Accrued interest receivable | |||||||||||||||||||||||||||||
FHLB stock | |||||||||||||||||||||||||||||
Servicing asset, net of valuation allowance | |||||||||||||||||||||||||||||
Derivative asset | |||||||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||
Noninterest bearing deposits | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
NOW and money market | |||||||||||||||||||||||||||||
Savings | |||||||||||||||||||||||||||||
Time deposits | |||||||||||||||||||||||||||||
Accrued interest payable | |||||||||||||||||||||||||||||
Advances from the FHLB | |||||||||||||||||||||||||||||
Subordinated debentures | |||||||||||||||||||||||||||||
Servicing liability | |||||||||||||||||||||||||||||
Derivative liability |
Fair Value | |||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
(In thousands) | |||||||||||||||||
December 31, 2020 | |||||||||||||||||
Marketable equity securities | $ | $ | $ | ||||||||||||||
Available for sale investment securities: | |||||||||||||||||
U.S. Government and agency obligations | |||||||||||||||||
Corporate bonds | |||||||||||||||||
Derivative asset | |||||||||||||||||
Derivative liability | |||||||||||||||||
December 31, 2019 | |||||||||||||||||
Marketable equity securities | $ | $ | $ | ||||||||||||||
Available for sale investment securities: | |||||||||||||||||
U.S. Government and agency obligations | |||||||||||||||||
Derivative asset | |||||||||||||||||
Derivative liability |
Fair Value | |||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
(In thousands) | |||||||||||||||||
December 31, 2020 | |||||||||||||||||
Impaired loans | $ | $ | $ | ||||||||||||||
Servicing asset, net | |||||||||||||||||
Assets held for sale | |||||||||||||||||
December 31, 2019 | |||||||||||||||||
Impaired loans | $ | $ | $ | ||||||||||||||
Servicing asset, net |
Fair Value | Valuation Methodology | Unobservable Input | Range | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||||
Impaired loans | $ | Appraisals | Discount to appraised value | |||||||||||||||||||||||
Discounted cash flows | Discount rate | |||||||||||||||||||||||||
$ | ||||||||||||||||||||||||||
Servicing asset, net | $ | Discounted cash flows | Discount rate | (1) | ||||||||||||||||||||||
Prepayment rate | ||||||||||||||||||||||||||
Assets held for sale | $ | Sale & Income Approach | Adjustment to valuation and cost to sell | N/A | ||||||||||||||||||||||
December 31, 2019 | ||||||||||||||||||||||||||
Impaired loans | $ | Appraisals | Discount to appraised value | |||||||||||||||||||||||
Discounted cash flows | Discount rate | |||||||||||||||||||||||||
$ | ||||||||||||||||||||||||||
Servicing asset, net | $ | Discounted cash flows | Discount rate | (2) | ||||||||||||||||||||||
Prepayment rate |
Actual Capital | Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer | Minimum Regulatory Capital to be Well Capitalized Under Prompt Corrective Action Provisions | |||||||||||||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Bankwell Bank | |||||||||||||||||||||||||||||||||||
December 31, 2020 | |||||||||||||||||||||||||||||||||||
Common Equity Tier 1 Capital to Risk-Weighted Assets | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
Total Capital to Risk-Weighted Assets | % | % | % | ||||||||||||||||||||||||||||||||
Tier I Capital to Risk-Weighted Assets | % | % | % | ||||||||||||||||||||||||||||||||
Tier I Capital to Average Assets | % | % | % | ||||||||||||||||||||||||||||||||
Bankwell Financial Group, Inc. | |||||||||||||||||||||||||||||||||||
December 31, 2020 | |||||||||||||||||||||||||||||||||||
Common Equity Tier 1 Capital to Risk-Weighted Assets | % | % | N/A | N/A | |||||||||||||||||||||||||||||||
Total Capital to Risk-Weighted Assets | % | % | N/A | N/A | |||||||||||||||||||||||||||||||
Tier I Capital to Risk-Weighted Assets | % | % | N/A | N/A | |||||||||||||||||||||||||||||||
Tier I Capital to Average Assets | % | % | N/A | N/A |
Actual Capital | Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer | Minimum Regulatory Capital to be Well Capitalized Under Prompt Corrective Action Provisions | |||||||||||||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Bankwell Bank | |||||||||||||||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||||||||||||||
Common Equity Tier 1 Capital to Risk-Weighted Assets | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
Total Capital to Risk-Weighted Assets | % | % | % | ||||||||||||||||||||||||||||||||
Tier I Capital to Risk-Weighted Assets | % | % | % | ||||||||||||||||||||||||||||||||
Tier I Capital to Average Assets | % | % | % | ||||||||||||||||||||||||||||||||
Bankwell Financial Group, Inc. | |||||||||||||||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||||||||||||||
Common Equity Tier 1 Capital to Risk-Weighted Assets | % | % | N/A | N/A | |||||||||||||||||||||||||||||||
Total Capital to Risk-Weighted Assets | % | % | N/A | N/A | |||||||||||||||||||||||||||||||
Tier I Capital to Risk-Weighted Assets | % | % | N/A | N/A | |||||||||||||||||||||||||||||||
Tier I Capital to Average Assets | % | % | N/A | N/A |
December 31, | |||||||||||
2020 | 2019 | ||||||||||
(In thousands) | |||||||||||
Balance, beginning of year | $ | $ | |||||||||
Additional loans | |||||||||||
Repayments | ( | ( | |||||||||
Effect of changes in related parties | ( | ||||||||||
Balance, end of year | $ | $ |
At December 31, | |||||||||||
2020 | 2019 | ||||||||||
(In Thousands) | |||||||||||
ASSETS | |||||||||||
Cash and due from banks | $ | $ | |||||||||
Investment in subsidiary | |||||||||||
Premises and equipment, net | |||||||||||
Deferred income taxes, net | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Subordinated debentures | $ | $ | |||||||||
Accrued expenses and other liabilities | |||||||||||
Shareholders’ equity | |||||||||||
Total liabilities and shareholders’ equity | $ | $ |
Year Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(In Thousands) | |||||||||||||||||
Interest income | $ | $ | $ | ||||||||||||||
Dividend income from subsidiary | |||||||||||||||||
Total income | |||||||||||||||||
Expenses | |||||||||||||||||
Income before equity in undistributed earnings of subsidiaries | |||||||||||||||||
Equity in undistributed earnings of subsidiaries | ( | ||||||||||||||||
Net Income | $ | $ | $ |
For the Years Ended December 31, | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(In Thousands) | |||||||||||||||||
Cash flows from operating activities | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Equity in undistributed earnings | ( | ( | |||||||||||||||
Decrease in other assets | |||||||||||||||||
Increase in deferred income taxes, net | ( | ( | ( | ||||||||||||||
Decrease in other liabilities | ( | ( | ( | ||||||||||||||
Stock-based compensation | |||||||||||||||||
Amortization of debt issuance costs | |||||||||||||||||
Net cash provided by operating activities | |||||||||||||||||
Cash flows from investing activities | |||||||||||||||||
Decrease in premises and equipment, net | |||||||||||||||||
Net cash provided by investing activities | |||||||||||||||||
Cash flows from financing activities | |||||||||||||||||
Proceeds from exercise of options & warrants | |||||||||||||||||
Dividends paid on common stock | ( | ( | ( | ||||||||||||||
Repurchase of common stock | ( | ( | |||||||||||||||
Net cash used in financing activities | ( | ( | ( | ||||||||||||||
Net increase in cash and cash equivalents | |||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||
Beginning of year | |||||||||||||||||
End of year | $ | $ | $ | ||||||||||||||
Supplemental disclosures of cash flows information: | |||||||||||||||||
Cash paid for: | |||||||||||||||||
Interest | |||||||||||||||||
Income taxes |
December 31, 2020 | |||||||||||||||||||||||
4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | ||||||||||||||||||||
(Dollars in thousands, except per share amounts) | |||||||||||||||||||||||
Total interest and dividend income | $ | $ | $ | $ | |||||||||||||||||||
Total interest expense | |||||||||||||||||||||||
Net interest income | |||||||||||||||||||||||
Provision for loan losses | |||||||||||||||||||||||
Total noninterest income | |||||||||||||||||||||||
Total noninterest expense | |||||||||||||||||||||||
Income before income tax expense | |||||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Earnings per common share: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ |
December 31, 2019 | |||||||||||||||||||||||
4th Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter | ||||||||||||||||||||
(Dollars in thousands, except per share amounts) | |||||||||||||||||||||||
Total interest and dividend income | $ | $ | $ | $ | |||||||||||||||||||
Total interest expense | |||||||||||||||||||||||
Net interest income | |||||||||||||||||||||||
Provision (credit) for loan losses | ( | ||||||||||||||||||||||
Total noninterest income | |||||||||||||||||||||||
Total noninterest expense | |||||||||||||||||||||||
Income before income tax expense | |||||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Earnings per common share: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ |
Number | Description | |||||||
Exhibit 3.1 | ||||||||
Exhibit 3.2 | ||||||||
Exhibit 4.1 | ||||||||
Exhibit 10.1† | ||||||||
Exhibit 10.2† | ||||||||
Exhibit 10.3† | ||||||||
Exhibit 10.4† | ||||||||
Exhibit 10.5† | ||||||||
Exhibit 10.6† | ||||||||
Exhibit 10.7† | ||||||||
Exhibit 10.8† | ||||||||
Exhibit 10.9† | ||||||||
Exhibit 10.10 | ||||||||
Exhibit 10.11 | ||||||||
Exhibit 10.12† | ||||||||
Exhibit 10.13 | ||||||||
Exhibit 10.14† | ||||||||
Exhibit 10.15† | ||||||||
Exhibit 21.1 | ||||||||
Exhibit 23.1 | ||||||||
Exhibit 31.1 | ||||||||
Exhibit 31.2 | ||||||||
Exhibit 32 | ||||||||
101 | The following materials from Bankwell Financial Group, Inc.’s Annual Report on Form 10-K for the period ended December 31, 2020, formatted in Inline 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. | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
BANKWELL FINANCIAL GROUP, INC. | ||||||||
By: | /s/ Christopher R. Gruseke | |||||||
Christopher R. Gruseke President and Chief Executive Officer |
Signature & Title | Date | |||||||
/s/ Christopher R. Gruseke | March 10, 2021 | |||||||
Christopher R. Gruseke President, Chief Executive Officer and a Director (principal executive officer) | ||||||||
/s/ Penko Ivanov | March 10, 2021 | |||||||
Penko Ivanov Executive Vice President & Chief Financial Officer (principal financial and accounting officer) | ||||||||
/s/ George P. Bauer | March 10, 2021 | |||||||
George P. Bauer Director | ||||||||
/s/ Gail Brathwaite | March 10, 2021 | |||||||
Gail Brathwaite Director | ||||||||
/s/ Richard Castiglioni | March 10, 2021 | |||||||
Richard Castiglioni Director | ||||||||
/s/ Eric J. Dale | March 10, 2021 | |||||||
Eric J. Dale Director | ||||||||
/s/ Blake S. Drexler | March 10, 2021 | |||||||
Blake S. Drexler Director | ||||||||
/s/ James M. Garnett | March 10, 2021 | |||||||
James M. Garnett Director | ||||||||
/s/ Daniel S. Jones | March 10, 2021 | |||||||
Daniel S. Jones Director | ||||||||
/s/ Todd Lampert | March 10, 2021 | |||||||
Todd Lampert Director | ||||||||
/s/ Victor S. Liss | March 10, 2021 | |||||||
Victor S. Liss Director | ||||||||
/s/ Carl M. Porto | March 10, 2021 | |||||||
Carl M. Porto Director | ||||||||
/s/ Lawrence B. Seidman | March 10, 2021 | |||||||
Lawrence B. Seidman Director |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
13 |
14 |
15 |
/s/ Christopher R. Gruseke Christopher R. Gruseke President and Chief Executive Officer |
/s/ Penko Ivanov Penko Ivanov Executive Vice President and Chief Financial Officer |
/s/ Christopher R. Gruseke | ||||||||
Christopher R. Gruseke President and Chief Executive Officer Date: March 10, 2021 | ||||||||
/s/ Penko Ivanov | ||||||||
Penko Ivanov Executive Vice President and Chief Financial Officer Date: March 10, 2021 |
Consolidated Balance Sheets (Parentheticals) - USD ($) |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Held to maturity debt securities, fair value | $ 20,032,000 | $ 18,307,000 |
Allowance for loan losses | $ 21,009,000 | $ 13,509,000 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, share authorized (shares) | 10,000,000 | 10,000,000 |
Common stock, share issued (shares) | 7,919,278 | 7,868,803 |
Common shares outstanding (shares) | 7,919,278 | 7,868,803 |
Subordinated debentures | ||
Debt instrument face amount | $ 25,500,000 | $ 25,500,000 |
Unamortized debt issuance costs | $ 242,000 | $ 293,000 |
Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 5,904 | $ 18,216 | $ 17,433 |
Unrealized gains (losses) on securities: | |||
Unrealized holding gains (losses) on available for sale securities | 2,355 | 2,997 | (1,632) |
Reclassification adjustment for gains realized in net income | 0 | (76) | (222) |
Net change in unrealized gains (losses) | 2,355 | 2,921 | (1,854) |
Income tax (expense) benefit | (539) | (614) | 390 |
Unrealized gains (losses) on securities, net of tax | 1,816 | 2,307 | (1,464) |
Unrealized losses on interest rate swaps: | |||
Unrealized losses on interest rate swaps | (12,876) | (11,121) | (1,604) |
Income tax benefit | 3,001 | 2,335 | 337 |
Unrealized losses on interest rate swaps, net of tax | (9,875) | (8,786) | (1,267) |
Net other comprehensive income (loss) | (8,059) | (6,479) | (2,731) |
Comprehensive (loss) income | $ (2,155) | $ 11,737 | $ 14,702 |
Consolidated Statements of Shareholders' Equity (Parentheticals) - $ / shares |
12 Months Ended | ||
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Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Statement of Stockholders' Equity [Abstract] | |||
Dividends per common share (in dollars per share) | $ 0.56 | $ 0.52 | $ 0.48 |
Nature of Operations and Summary of Significant Accounting Policies |
12 Months Ended |
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Dec. 31, 2020 | |
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 "Parent Corporation") is a bank holding company headquartered in New Canaan, Connecticut. The Parent Corporation offers a broad range of financial services through its banking subsidiary, Bankwell Bank (the "Bank" and, collectively with the Parent Corporation and the Parent Corporation's subsidiaries, "we", "our", "us", or the "Company"). In November 2013, the Bank acquired The Wilton Bank and in October 2014, the Bank acquired Quinnipiac Bank and Trust Company. 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 the Company's loans in Fairfield and New Haven Counties, Connecticut, with branch locations in New Canaan, Stamford, Fairfield, Wilton, Westport, Darien, Norwalk, and Hamden, Connecticut. Many 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 significant concentrations in commercial real estate loans. The Company does not have any significant concentrations in any one industry or customer. 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, derivative instrument valuation, investment securities valuation, evaluation of investment securities for other than temporary impairment and deferred income taxes valuation. Segments The Company has one reportable segment. All of the Company’s activities are interrelated, and each activity is dependent and assessed based on how each of the activities of the Company supports the others. For example, lending is dependent upon the ability of the Company to fund itself with deposits and borrowings while managing the interest rate and credit risk. Accordingly, all significant operating decisions are based upon analysis of the Company as one segment or unit. Basis of consolidated financial statement presentation The consolidated financial statements have been prepared in accordance with GAAP and general practices within the banking industry. Such policies have been followed on a consistent basis. Cash and Cash Equivalents and Statement of Cash Flows Cash and due from banks and federal funds sold are recognized as cash equivalents in the consolidated statements of cash flows. Federal funds sold generally mature in one day. For purposes of reporting cash flows, all highly liquid debt instruments purchased with an original maturity of three months or less are considered to be cash equivalents. Cash flows from loans and deposits are reported net. The balances of cash and due from banks and federal funds sold, at times, may exceed federally insured limits. The Company has not experienced any losses from such concentrations. Investment Securities Management determines the appropriate classifications of investment securities at the date individual investment securities are acquired, and the appropriateness of such classifications is reaffirmed at each balance sheet date. The Company’s investments are categorized as marketable equity, available for sale or held to maturity securities. Held to maturity investments are carried at amortized cost. Available for sale securities are carried at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss) as a separate component of capital, net of estimated income taxes. Marketable equity securities are carried at fair value, with any changes in fair value reported in earnings. Investment securities in the available for sale and held-to-maturity portfolios are reviewed quarterly for other-than-temporary impairment ("OTTI"). If the fair value of a debt security is below amortized cost, other-than-temporary impairment is deemed to exist if the present value of the expected future cash flows is less than the amortized cost basis of the security. OTTI is required to be recognized regardless of the credit loss component if the Company intends to sell the security or if it is “more-likely-than-not” that the Company will be required to sell the security before recovery of its amortized cost basis. The credit loss component of an other-than-temporary impairment write-down is recorded in earnings, while the remaining portion of the impairment loss is recognized in other comprehensive income (loss), provided the Company does not intend to sell the underlying debt security and it is more-likely-than-not that the Company will not be required to sell the debt security prior to recovery. In determining whether a credit loss exists and the period over which the fair value of the debt security is expected to recover, management considers the following factors: the length of time and extent that fair value has been less than cost, the financial condition and near term prospects of the issuer, any external credit ratings, the level of excess cash flows generated from the underlying collateral supporting the principal and interest payments of the debt securities and the level of credit enhancement provided by the structure. The sale of a held to maturity security within three months of its maturity date or after collection of at least 85% of the principal outstanding at the time the security was acquired is considered a maturity for purposes of classification and disclosure. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Gains or losses on the sales of securities are recognized at trade date utilizing the specific identification method. Transfers of debt securities into the held to maturity classification from the available for sale classification are made at fair value on the date of transfer. The unrealized holding gain or loss on the date of transfer is retained in accumulated other comprehensive income and in the carrying value of the held to maturity securities. Such amounts are amortized over the remaining contractual lives of the securities. When transfers of debt securities into the available for sale classification from the held to maturity classification occur, any unrealized holding gains or losses on the transfer date are recognized in other comprehensive income. Bank Owned Life Insurance The investment in bank owned life insurance (“BOLI”) represents the cash surrender value of life insurance policies on the lives of certain Bank employees who have provided positive consent allowing the Bank to be the beneficiary of such policies. Increases in the cash value of the policies, as well as insurance proceeds received, are recorded in noninterest income, and are not subject to income taxes. The financial strength of the insurance carrier is reviewed prior to the purchase of BOLI and annually thereafter. Federal Home Loan Bank Stock Federal Home Loan Bank of Boston (“FHLB”) stock is a non-marketable equity security that is carried at cost. There are no quoted market prices for this security and the security is not liquid. The Company can sell these securities back to the FHLB at par. Loans Held For Sale Loans held for sale are those loans which management has the intent to sell in the foreseeable future, and are carried at the lower of aggregate cost or market value. Net unrealized losses, if any, are recognized by a valuation allowance through a charge to noninterest income. Realized gains and losses on the sale of loans are recognized on the trade date and are determined by the difference between the sale proceeds and the carrying value of the loans. Loans may be sold with servicing rights released or retained. At the time of the sale, management records a servicing asset for the value of any retained servicing rights, which represents the present value of the differential between the contractual servicing fee and adequate compensation, defined as the fee a sub-servicer would require to assume the role of servicer, after considering the estimated effects of prepayments. Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, put presumptively beyond the reach of the transferor and its creditors, even in bankruptcy or other receivership, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the transferor does not maintain effective control over the transferred assets through either (a) an agreement that both entitles and obligates the transferor to repurchase or redeem the assets before maturity or (b) the ability to unilaterally cause the holder to return specific assets, other than through a cleanup call. Loans Receivable Loans receivable that management has the ability and intent to hold for the foreseeable future or until maturity or payoff are stated at their current unpaid principal balances, net of the allowance for loan losses, charge-offs, recoveries, net deferred loan origination fees and unamortized loan premiums. Past due or delinquency status for all loans is based on the number of days past due in accordance with its contractual payment terms. A loan is considered impaired when it is probable that all contractual principal or interest payments due will not be collected in accordance with the terms of the loan agreement. Impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, as a practical expedient, at the loan’s observable market price or the fair value of the collateral, if the loan is collateral dependent. The amount of impairment, if any, and any subsequent changes are recorded as adjustments to the allowance for loan losses. Impaired loans also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. Loans greater than 90 days past due are put on nonaccrual status (excluding certain acquired credit impaired loans). Loans are also placed on nonaccrual status when, in the opinion of management, full collection of principal and interest is doubtful. Interest previously accrued, but uncollected, is reversed against current period income. Subsequent payments are recognized on a cash basis or principal recapture basis depending on a number of factors including probability of collection and if impairment is identified. 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. Management reviews all nonaccrual loans, other loans past due 90 days or more, and restructured loans for impairment. In most cases, loan payments that are past due less than 90 days are considered minor collection delays and the related loans may not be impaired. Consumer installment loans are considered to be pools of small balance homogeneous loans, which are collectively evaluated for impairment. Modifications to a loan are considered to be a troubled debt restructuring (“TDR”) when two 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. Debt may be bifurcated with separate terms for each tranche of the restructured debt. The decision to restructure a loan, versus aggressively enforcing the collection of the loan, may benefit the Company by increasing the ultimate probability of collection. Section 4013 of the CARES Act permits a financial institution to elect to suspend troubled debt restructuring accounting, in certain circumstances, beginning March 1, 2020 and ending on the earlier of January 1, 2022, or sixty days after the national emergency concerning COVID-19 terminates. All short term loan modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any request for relief are not considered TDRs. 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. TDR’s are reported as such for at least one year from the date of restructuring. In years after the restructuring, troubled debt restructured loans may be removed from this classification if the restructuring agreement specifies a market rate of interest equal to that which would be provided to a borrower with similar credit at the time of restructuring and the loan is not deemed to be impaired based on the modified terms. Acquired Loans Loans that the Company acquires in acquisitions are initially recorded at fair value with no carryover of the related allowance for credit losses. Determining the fair value of acquired loans involves estimating the amount and timing of principal and interest cash flows initially expected to be collected on the loans and discounting those cash flows at an appropriate market rate of interest. For loans which meet the criteria stipulated in Accounting Standards Codification (“ASC”) 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality”, the Company recognizes an accretable yield, which is defined as the excess of all cash flows expected at acquisition over the initial fair value of the loan, as interest income on a level-yield basis over the expected remaining life of the loan. The excess of the loan’s contractually required payments over the cash flows expected to be collected is the nonaccretable difference. The nonaccretable difference is not recognized as an adjustment of yield, a loss accrual, or a valuation allowance. After the initial acquisition, the Company continues to evaluate whether the timing and the amount of cash to be collected are reasonably estimated. Subsequent significant increases in cash flows the Company expects to collect will first reduce previously recognized valuation allowance and then be reflected prospectively as an increase to the level yield. Subsequent decreases in expected cash flows may result in the loan being considered impaired. Interest income is not recognized to the extent that the net investment in the loan would increase to an amount greater than the estimated payoff amount. For ASC 310-30 loans, the expected cash flows reflect anticipated prepayments, determined on a loan by loan basis, according to the anticipated collection plan of these loans. Prepayments result in the recognition of the nonaccretable balance as current period yield. Changes in prepayment assumptions may change the amount of interest income and principal expected to be collected. The expected prepayments used to determine the accretable yield are consistent between the cash flows expected to be collected and projections of contractual cash flows so as to not affect the nonaccretable difference. For loans that do not meet the ASC 310-30 criteria, the Company records interest income on a level yield basis using the contractually required cash flows. The Company subjects loans that do not meet the ASC 310-30 criteria to ASC Topic 450, “Contingencies”, by collectively evaluating these loans for an allowance for loan loss, using the same methodology as loans originated by the Company. Acquired loans that met the criteria for nonaccrual of interest prior to the acquisition are considered performing upon acquisition, regardless of whether the customer is contractually delinquent, if the Company can reasonably estimate the timing and amount of the expected cash flows on such loans and if the Company expects to fully collect the new carrying value of the loans. As such, the Company may no longer consider the loan to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable yield. The Company has determined that it can reasonably estimate future cash flows on the Company’s current portfolio of acquired loans that are past due 90 days or more, and on which the Company is accruing interest and the Company expects to fully collect the carrying value of the loans. Allowance For Loan Losses (ALLL) The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance for loan losses when management believes the non-collectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance for loan losses. The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. The allowance for loan losses consists of specific and general components. The specific component relates to impaired loans that are classified as "doubtful", "substandard" or "special mention". For these loans, an allowance is established when the discounted cash flows, collateral value or observable market price of the impaired loan is lower than the carrying value of that loan. The general component covers non classified loans and is based on historical loss experience, including appropriate peer data, adjusted for qualitative factors. Management considers several qualitative factors, both internal and external to the Company, including valuation of underlying collateral; macro and local economic factors; nature and volume of loan portfolio; concentration of credit risk; net charge-off trends and non-accrual trends, and past due and classified loan trends when determining the general reserve. Management believes the allowance for loan losses is adequate. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the allowance for loan losses. Such agencies have the authority to require additions to the allowance or charge-offs based on the agencies’ judgments about information available to them at the time of their examination. Reserve for Unfunded Commitments The reserve for unfunded commitments provides for probable losses inherent with funding the unused portion of legal commitments to lend. The unfunded reserve calculation includes factors that are consistent with the ALLL methodology for our loan portfolio as well as a draw down factor applied to the various commitments. The reserve for unfunded commitments is included within other liabilities in the accompanying Consolidated Balance Sheets, and changes in the reserve are reported as a component of other expense in the accompanying Consolidated Statements of Income. See Note 12: Commitments and Contingencies for further information. Interest and Fees on Loans Interest on loans is accrued and included in income based on contractual rates applied to principal amounts outstanding. Accrual of interest is discontinued when loan payments are 90 days or more past due, based on contractual terms, or when, in the judgment of management, collectability of the loan or loan interest becomes uncertain. When interest accrual is discontinued, all unpaid accrued interest is reversed against interest income. Subsequent recognition of income occurs only to the extent payment is received subject to management’s assessment of the collectability of the remaining interest and principal. 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. Loan origination fees, net of direct loan origination costs, are deferred and amortized as an adjustment to the loan’s yield generally over the contractual life of the loan, utilizing the interest method. Goodwill and Intangibles Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. Intangible assets are assets acquired in a business combination that lack physical substance but can be distinguished from goodwill because the intangible asset is capable of being sold or exchanged on its own or in combination with related contracts, assets or liabilities. Intangible assets are amortized on a straight-line or accelerated basis over estimated lives. Goodwill is not amortized. Goodwill and identifiable intangible assets are evaluated for impairment annually or whenever events or changes in circumstances indicate the carrying value of these assets may not be recoverable. When these assets are evaluated for impairment, if the carrying amount exceeds fair value, an impairment charge is recorded to income. The fair value is based on observable market prices, when practicable. Other valuation techniques may be used when market prices are unavailable, including estimated discounted cash flows. This type of analysis contains uncertainties because it requires management to make assumptions and to apply judgment to estimate industry economic factors and the profitability of future business strategies. In the event of future changes in fair value, the Company may be exposed to an impairment charge that could be material. Other Real Estate Owned Assets acquired through deed in lieu or loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating costs after acquisition are expensed. Premises and Equipment Premises and equipment are stated at cost, net of accumulated depreciation and amortization. Leasehold improvements are capitalized and amortized over the shorter of the terms of the related leases or the estimated economic lives of the improvements. Depreciation and amortization is charged to operations using the straight-line method over the estimated useful lives of the related assets which range from to thirty-nine years. Gains and losses on dispositions are recognized upon realization. Maintenance and repairs are expensed as incurred and improvements are capitalized. Assets Held for Sale Assets held for sale (excluding loans) consist of real estate properties that are expected to sell within a year. The assets are reported at the lower of the carrying amount or fair value less costs to sell. Depreciation is not recognized on any assets that are classified as held for sale. Leases The Company recognizes and measures it leases in accordance with ASC 842, "Leases". The Company leases real estate for its branch offices under various operating lease agreements. In addition, the Company's headquarter building is on land leased from the local municipality. The Company determines if an arrangement is a lease, or contains a lease, at inception of a contract and when the terms of an existing contract are changed. The Company recognizes a lease liability and right-of-use-asset (ROUA) at the commencement date of the lease. The lease liability is initially and subsequently recognized based on the present value of its future lease payments. The discount rate is the implicit rate if it's readily determinable or otherwise the Company uses its incremental borrowing rate. The implicit rates of our leases are not readily determinable and accordingly, we use our incremental borrowing rate based on the information available at the commencement date for all leases. The ROUA is subsequently measured throughout the lease term at the amount of the remeasured lease liability (i.e., present value of the remaining lease payments), plus any unamortized initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of any lease incentives received, and any impairment recognized. Lease cost for lease payments is recognized on a straight-line basis over the lease term. The ROUA is included in premises and equipment, net and the lease liability is included in accrued expenses and other liabilities on the consolidated balance sheets. Impairment of Long-Lived Assets Long-lived assets, including premises and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If impairment is indicated by that review, the asset is written down to its estimated fair value through a charge to noninterest expense. Servicing Rights When loans are sold on a servicing retained basis, servicing rights are initially recorded at fair value with the income statement effect recorded in noninterest income. All classes of servicing assets are subsequently measured using the amortization method, which requires servicing rights to be amortized into noninterest income in proportion to, and over the period of, the life of the underlying loans. Servicing rights are evaluated for impairment based upon the fair value of the rights as compared to the carrying amount. Any impairment is reported as a valuation allowance, to the extent that fair value is less than the carrying amount. If the Company later determines that all or a portion of the impairment no longer exists, a reduction of the allowance may be recorded as an increase to income. Changes in the valuation allowance are reported with service charges and fees income on the consolidated statements of income. The fair values of servicing rights are subject to fluctuations as a result of changes in estimated and actual prepayment speeds and default rates and losses. Loans serviced for others are not included in the accompanying consolidated balance sheets. Servicing fee income, which is included in service charges and fees on the income statement, is recorded for fees earned for servicing loans. Fees earned for servicing loans are based on a contractual percentage of the outstanding principal amount of the loan and are recorded as income when earned. The amortization of servicing rights is recorded in noninterest income. Income Taxes The Company recognizes income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that all or some portion of the deferred tax assets will not be realized. In the ordinary course of business there is inherent uncertainty in quantifying the Company’s income tax positions. Income tax positions and recorded tax benefits assessed for all years are subject to examination based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, we have determined the amount of the tax benefit to be recognized by estimating the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company has $394 thousand and $269 thousand of liabilities for uncertain tax positions at December 31, 2020 and 2019, respectively. Where applicable, associated interest and penalties have also been recognized. We recognize accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. Advertising costs Advertising costs are expensed as incurred. Stock Compensation The Company measures and recognizes compensation cost relating to share-based payment transactions based on the grant-date fair value of the equity instruments issued. The fair value of time-based restricted stock is recorded based on the grant date fair value of the Company’s common stock. For performance based grants, 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. The fair value of stock options is determined using the Black-Scholes Option Pricing model. Stock-based compensation costs are recognized over the requisite service period for the awards. Compensation expense reflects the number of awards expected to vest and is adjusted based on awards that ultimately vest. The Company recognizes forfeitures as they occur. Earnings Per Share 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. 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 accounted for as cash flow hedges. The Company’s total comprehensive income or loss for the years ended December 31, 2020, 2019 and 2018 is reported in the Consolidated Statements of Comprehensive Income. Fair Values of Financial Instruments The Company uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in certain instances, there are no quoted market prices for certain assets or liabilities. 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 rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the asset or liability. Fair value measurements focus on exit prices in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction at either December 31, 2020 or December 31, 2019. 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. Derivative Instruments The effective portion of unrealized changes in the fair value of derivatives accounted for as cash flow hedges is reported in other comprehensive income and subsequently reclassified to earnings in the same period or periods during which the hedged forecasted transaction affects earnings. The Bank 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 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 hedge strategy converts the contractually specified interest rate on short-term rolling FHLB advances or Brokered CDs to long-term fixed interest rates, thereby protecting the Bank from interest rate variability. The Company does not offset derivative assets and derivative liabilities for financial statement presentation purposes. The Company also has derivatives not designated as hedges. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain loan customers. The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings. Related Party Transactions Directors and officers of the Company and their affiliates have been customers of and have had transactions with the Company, and it is expected that such persons will continue to have such transactions in the future. Management believes that all deposit accounts, loans, services and commitments comprising such transactions were made in the ordinary course of business, on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other customers who are not directors or officers. In the opinion of management, the transactions with related parties did not involve more than normal risks of collectability, nor favored treatment or terms, nor present other unfavorable features. Note 22 contains details regarding related party transactions. Common Share Repurchases The Company is incorporated in the state of Connecticut. Connecticut law does not provide for treasury shares, rather shares repurchased by the Company constitute authorized, but unissued shares. GAAP states that accounting for treasury stock shall conform to state law. Therefore, the cost of shares repurchased by the Company has been allocated to common stock balances. Reclassification Certain prior period amounts have been reclassified to conform to the 2020 financial statement presentation. These reclassifications only changed the reporting categories and did not affect the results of operations or consolidated financial position. Recent accounting pronouncements The following section includes changes in accounting principles and potential effects of new accounting guidance and pronouncements. Recently issued accounting pronouncements not yet adopted ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): “Measurement of Credit Losses on Financial Instruments.” This 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. On July 17, 2019, the FASB proposed deferring the effective date of ASC 326 for smaller reporting companies as defined by the SEC. The FASB proposed a three-year deferral for smaller reporting companies, with an effective date of January 1, 2023. On October 16, 2019, the FASB voted in favor of finalizing its proposal to defer the effective date of this standard. The FASB issued ASU No. 2019-10, which officially delayed the adoption of this standard for smaller reporting companies until fiscal years beginning after December 15, 2022. The Company does qualify to defer the adoption of this standard and has not yet adopted this standard. Management continues to evaluate the impact of its future adoption of this guidance 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. On October 16, 2019, the FASB voted in favor of a proposal to defer the effective date of this standard in the same manner it is deferring the effective date of ASC 326. The FASB issued ASU No. 2019-10, which officially delayed the adoption of this standard for smaller reporting companies until fiscal years beginning after December 15, 2022. The Company does qualify to defer the adoption of this standard and has not yet adopted this standard. The Company does not expect the application of this guidance to have a material impact on the Company’s financial statements. Recently adopted accounting pronouncements 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. The guidance was effective for the Company on January 1, 2020. The application of this guidance did not have a material impact on the Company's financial statements. ASU No. 2020-04, Reference Rate Reform (Topic 848): "Facilitation of the Effects of Reference Rate Reform on Financial Reporting." This ASU provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022. Optional expedients include that modifications of contracts should be accounted for by prospectively adjusting the effective interest rate and modifications of leases should be accounted for as a continuation of the existing contract with no reassessments of lease classification and discount rate or remeasurements of lease payments. This ASU also provides many practical expedients for derivative accounting. In addition, an entity may elect to sell and/or transfer held to maturity securities that reference a rate affected by the reference rate reform classified as held to maturity prior to January 1, 2020. In particular, the Company made the following elections as it relates to hedging relationships; (1) Option to not reassess a previous accounting determination (paragraph 848-20-35-2); (2) Option to not dedesignate a hedging relationship due to a change in critical term (paragraph 848-20-35-3); (3) Option to change the contractual terms of a hedging instrument, hedged item, or forecasted transaction and to not dedesignate a hedging relationship (paragraph 848-30-25-5); (4) Adopt expedient ASC 848-50-25-2 to assert probability of the hedged interest regardless of any expected modification in terms related to reference rate reform; and (5) To continue the method of assessing effectiveness as documented in the original hedge documentation and apply the expedient in ASC 848-50-35-17 so that the reference rate on the hypothetical derivative matches the reference rate on the hedging instrument. For new hedging relationships designated subsequent to December 31, 2020, the Company elects to apply the expedient in ASC 848-50-25-11 to assume that the reference rate will not be replaced for the remainder of the hedging relationship. The application of this guidance did not have a material impact on the Company's financial statements.
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Shareholders' Equity |
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Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Common Stock The Company has 10,000,000 shares authorized and 7,919,278 shares issued and outstanding at December 31, 2020 and 10,000,000 shares authorized and 7,868,803 shares issued and outstanding at December 31, 2019. The Company's stock is traded on the NASDAQ stock market under the ticker symbol BWFG. Warrants In connection with a 2014 acquisition and the associated merger agreement, the Company had issued warrants convertible to shares of common stock at a pre-determined price and exchange ratio. The Company does not have any warrants outstanding as of December 31, 2020. 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. Issuer Purchases of Equity Securities On December 19, 2018, the Company's Board of Directors authorized a share repurchase program of up to 400,000 shares of the Company's Common Stock. The Company intends to accomplish the share repurchases through open market transactions, though the Company could accomplish repurchases through other means, such as privately negotiated transactions. The timing, price and volume of repurchases will be based on market conditions, relevant securities laws and other factors. The share repurchase plan does not obligate the Company to acquire any particular amount of Common Stock, and it may be modified or suspended at any time at the Company's discretion. During the year ended December 31, 2020, the Company purchased 58,499 shares of its Common Stock at a weighted average price of $17.69 per share. During the year ended December 31, 2019, the Company purchased 34,168 shares of its Common Stock at a weighted average price of $28.87 per share.
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Goodwill and other intangible assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and other intangible assets | Goodwill and other intangible assets Information on goodwill for the years ended December 31, 2020, 2019 and 2018 is as follows:
The Company tests for goodwill impairment annually as of June 30th. No impairment was required to be recorded on goodwill in 2020, 2019 or 2018. The table below provides information regarding the carrying amounts and accumulated amortization of amortized intangible assets as of the dates set forth below. The remaining net intangible asset as of December 31, 2020 will be amortized over a period of approximately 2 years.
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Investment Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | Investment Securities The amortized cost, gross unrealized gains and losses and fair values of available for sale and held to maturity securities segregated by contractual maturity at December 31, 2020 were as follows:
The amortized cost, gross unrealized gains and losses and fair values of available for sale and held to maturity securities segregated by contractual maturity at December 31, 2019 were as follows:
There were no sales of investment securities during the year ended December 31, 2020. The gross realized gains on the sales of investment securities totaled $0.1 million for the year ended December 31, 2019. The gross realized losses on the sales of investment securities totaled $17.0 thousand for the year ended December 31, 2019. At December 31, 2020 and December 31, 2019, none of the Company's securities were pledged as collateral with the Federal Home Loan Bank ("FHLB") or any other institution. As of December 31, 2020, the actual duration of the Company's available for sale securities were significantly shorter than the notional maturities. At December 31, 2020, the Company held marketable equity securities with a fair value of $2.2 million and an amortized cost of $2.1 million. At December 31, 2019, the Company held marketable equity securities with a fair value of $2.1 million and an amortized cost of $2.0 million. These securities represent an investment in mutual funds that have a primary objective to make investments for CRA purposes. There were two investment securities as of December 31, 2019, in which the fair value of the security was less than the amortized cost of the security. There were no such investment securities as of December 31, 2020. The following table provides information regarding investment securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2019:
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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 December 31, 2020 and December 31, 2019:
(1) The December 31, 2020 balance includes $34.8 million of PPP loans made under the CARES Act. Lending activities are conducted principally in the New York metropolitan area and throughout Connecticut, with the majority in Fairfield and New Haven Counties of Connecticut, and consist of commercial real estate loans, commercial business loans and, to a lesser degree, a variety of consumer loans. Loans may also be granted for the construction of 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 no longer originate residential mortgage loans. As of the beginning of the third quarter of 2019, the Company no longer offered home equity loans or lines of credit. The Company’s policy for residential lending generally required that 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: 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 the Company's 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 were 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. 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 apartment buildings and condominiums, as well as office buildings, retail and other income producing properties and land loans, which are loans made with land as collateral. 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. This segment also includes PPP loans made under the CARES Act to small businesses impacted by COVID-19, to cover payroll and other operating expenses. Loans extended under the PPP are fully guaranteed by the U.S. Small Business Administration ("SBA"). Consumer: This portfolio segment includes loans secured by savings or certificate accounts, 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. Allowance for loan losses During the fourth quarter of 2018, the Company recognized a charge-off totaling $6.2 million attributable to one lending relationship, affecting the commercial real estate and commercial business segments. The following tables set forth the activity in the Company’s allowance for loan losses for the years ended December 31, 2020, December 31, 2019 and December 31, 2018, by portfolio segment:
Loans evaluated for impairment and the related allowance for loan losses as of December 31, 2020 and December 31, 2019 were as follows:
As of December 31, 2020, of the $57.7 million of loans individually evaluated for impairment a total of $10.0 million of these loans were determined to not be impaired.
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 the 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 a potential 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 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 Watch List 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 December 31, 2020 and December 31, 2019:
Loan portfolio aging analysis When a loan is 15 days past due, the Company sends the borrower a late notice. The Company 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, after the 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. Loans that are granted payment deferrals under the CARES Act are not required to be reported as past due or placed on non-accrual status if the criteria under section 4013 of the CARES Act are met. The following tables set forth certain information with respect to the Company's loan portfolio delinquencies by portfolio segment as of December 31, 2020 and December 31, 2019:
There were no loans delinquent greater than 90 days and still accruing interest as of December 31, 2020 or December 31, 2019. Loans on nonaccrual status The following is a summary of nonaccrual loans by portfolio segment as of December 31, 2020 and December 31, 2019:
Interest income on loans that would have been recognized if loans on nonaccrual status had been current in accordance with their original terms for the years ended December 31, 2020, 2019 and 2018 was $0.8 million, $0.7 million and $1.1 million, respectively. There was no interest income recognized on these loans for the year ended December 31, 2020. There was $44 thousand and $11 thousand of interest income recognized for these loans for the years ended December 31, 2019 and 2018, respectively. At December 31, 2020 and December 31, 2019, there were no commitments to lend additional funds to borrowers on nonaccrual status. Nonaccrual loans with no specific reserve totaled $17.5 million and $9.6 million at December 31, 2020 and December 31, 2019, respectively. Impaired loans An impaired loan is generally one for which it is probable, based on current information, that the Company will not collect all the amounts due in accordance with the contractual terms of the loan. Impaired 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 loan that is estimated to be impaired. The following tables summarize impaired loans by portfolio segment and the average carrying amount and interest income recognized on impaired loans by portfolio segment as of December 31, 2020, December 31, 2019 and December 31, 2018:
Troubled debt restructurings ("TDRs") 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 $9.1 million at December 31, 2020 and $9.6 million at December 31, 2019. The following table provides information on loans that were modified as TDRs during the periods presented:
At December 31, 2020 and December 31, 2019, there were three nonaccrual loans identified as TDRs totaling $1.4 million and three nonaccrual loans identified as TDRs totaling $1.6 million, respectively. There were no loans modified in a troubled debt restructuring that re-defaulted during the year ended December 31, 2020. Two loans previously modified as a TDR, in the amount of $1.3 million, re-defaulted during the year ended December 31, 2019. The following table provides information on how loans were modified as a TDR for the years ended December 31, 2020, December 31, 2019 and 2018.
Section 4013 of the CARES Act provides relief from certain requirements under GAAP and permits a financial institution to elect to suspend troubled debt restructuring accounting, in certain circumstances, beginning March 1, 2020 and ending on the earlier of January 1, 2022, or sixty days after the national emergency concerning COVID-19 terminates. All short term loan modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any request for relief are not considered TDRs. As of December 31, 2020, the Company had active COVID-19 related deferrals totaling $29.4 million (excluding SBA loans, which are paid for 6 months by the SBA on behalf of borrowers). The Company granted initial three month payment deferral periods and, in some instances, extended the initial payment deferral period. This excludes SBA loans, which are mandated to receive an automatic six month deferral. These deferrals are not considered troubled debt restructurings based on Section 4013 of the CARES Act and interagency guidance issued in March of 2020.
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Premises and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premises and Equipment | Premises and Equipment At December 31, 2020 and December 31, 2019, premises and equipment consisted of the following:
For the years ended December 31, 2020, December 31, 2019 and December 31, 2018, depreciation and amortization expense related to premises and equipment totaled $3.3 million, $3.4 million and $1.7 million, respectively. For the years ended December 31, 2020 and December 31, 2019, depreciation and amortization expense includes amortization of the right-of-use-asset, totaling $1.4 million for each year. For the year ended December 31, 2020, the right-of-use asset, totaling $8.6 million, includes an impairment charge of $0.3 million related to a one-time expense for office and branch consolidation recognized during the fourth quarter of 2020. The impairment charge is included in occupancy and equipment expense on the consolidated statements of income. For the year ended December 31, 2020, property totaling $4.3 million was transferred to assets held for sale. Reference Note 8 for more detail.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Effective January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842). As of December 31, 2020, the Company leases real estate for nine branch offices under various operating lease agreements. The branch leases have maturities ranging from 2021 to 2030, some of which include options to extend the lease term. The Company is not reasonably certain to exercise these renewal options, and as a result, these optional periods are not included in determining the lease term. The weighted average remaining life of the lease term for these leases was 6.2 years as of December 31, 2020. In addition, the Company’s headquarter building (included in premises and equipment) is on land that is leased from the local municipality. As of December 31, 2020, the land lease has a remaining life of 79.7 years. The Company utilized a weighted average discount rate of 6.0% in determining the lease liability for its branch locations and a discount rate of 5.5% for its land lease. The total fixed operating lease costs were $2.3 million and $2.0 million for the years ended December 31, 2020 and December 31, 2019, respectively. The total variable operating lease costs were $0.1 million for each of the years ended December 31, 2020 and December 31, 2019. The right-of-use-asset, included in premises and equipment, net was $8.6 million as of December 31, 2020 and the corresponding lease liability, included in accrued expenses and other liabilities was $9.0 million as of December 31, 2020. Future minimum lease payments as of December 31, 2020 are as follows:
A reconciliation of the undiscounted cash flows in the maturity table above and the lease liability recognized in the consolidated balance sheet as of December 31, 2020, is shown below:
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Other Assets |
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Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets | Other Assets The components of other assets as of December 31, 2020 and December 31, 2019 are summarized below:
Deferred compensation The Company has a non-qualified deferred compensation plan for the Board of Directors that allows for the deferral of fees earned related to services rendered for the Company. The deferred compensation balance decreased $0.6 million for the year ended December 31, 2020 compared to the year ended December 31, 2019. The decrease was primarily driven by contributions being more than offset by a decline in fair market value and withdrawals. Loan servicing The Bank sells loans in the secondary market and retains the right to service many of these loans. The Bank earns fees for the servicing provided. Loans serviced for others are not included in the accompanying consolidated balance sheets. The balance of loans serviced for others was $109.4 million and $128.3 million at December 31, 2020 and December 31, 2019, respectively. The risks inherent in servicing assets relate primarily to changes in the timing of prepayments that result from shifts in interest rates. The significant assumptions used in the valuation at December 31, 2020 for servicing assets included a discount rate of 10% and prepayment speed assumptions ranging from 3% to 16%. The significant assumptions used in the valuation at December 31, 2019 for servicing assets included a discount rate ranging from 10% to 11% and prepayment speed assumptions ranging from 3% to 19%. The carrying value of loan servicing rights was $0.6 million and $1.0 million as of December 31, 2020 and December 31, 2019, respectively. The following table presents the changes in carrying value for loan servicing assets:
Included in accrued expenses and other liabilities as of December 31, 2020 and December 31, 2019, respectively, are $21 thousand and $63 thousand for loan servicing liabilities related to loans serviced for others for which the Company does not receive a servicing fee. Assets held for sale For the year ended December 31, 2020, the assets held for sale balance of $2.6 million consists of a Bank owned property that is currently being marketed for sale. Upon the transfer to held for sale, the asset was written down to its fair market value, less costs to sell, and a charge of $1.7 million was recognized for the year ended December 31, 2020. The impairment charge is included in occupancy and equipment expense on the consolidated statements of income. The asset held for sale is included in other assets on the consolidated balance sheets.
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Deposits |
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Deposits | Deposits At December 31, 2020 and December 31, 2019, deposits consisted of the following:
Maturities of time certificates of deposit as of December 31, 2020 and December 31, 2019 are summarized below:
The aggregate amount of individual certificate accounts, including brokered deposits with balances of $250,000 or more, were approximately $353.7 million and $307.1 million at December 31, 2020 and December 31, 2019, respectively. Brokered certificate of deposits totaled $238.9 million and $179.8 million at December 31, 2020 and December 31, 2019, respectively. Certificates of deposits from national listing services totaled $18.4 million at December 31, 2020 and $21.3 million at December 31, 2019. Brokered money market accounts totaled $13.5 million and $39.9 million at December 31, 2020 and 2019, respectively. The following table summarizes interest expense by account type for the years ended December 31, 2020, 2019 and 2018:
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Federal Home Loan Bank Advances and Other Borrowings |
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Advances from Federal Home Loan Banks [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Federal Home Loan Bank Advances and Other Borrowings | Federal Home Loan Bank Advances and Other Borrowings The following is a summary of FHLB advances with maturity dates and weighted average rates at December 31, 2020 and December 31, 2019:
(1) The Company's FHLB borrowings are subject to longer term swap agreements and the weighted average rate reflects the all in swap rate under these long term swap agreements. $175 million of the above mentioned FHLB advances as of December 31, 2020 were subject to interest rate swap transactions and $125 million of the above mentioned FHLB advances as of December 31, 2019 were subject to interest rate swap transactions, see Note 18. Interest expense on FHLB advances, excluding related interest on swaps, totaled $1.3 million, $3.6 million and $3.9 million for the years ended December 31, 2020, December 31, 2019 and December 31, 2018, respectively. The Bank has additional borrowing capacity at the FHLB up to a certain percentage of the value of qualified collateral. In accordance with agreements with the FHLB, the qualified collateral must be free and clear of liens, pledges and encumbrances. At December 31, 2020, the Company had pledged eligible loans with a book value of $847.0 million as collateral to support borrowing capacity at the FHLB of Boston. As of December 31, 2020, the Company has immediate availability to borrow an additional $347.9 million based on qualified collateral. At December 31, 2020, the Bank had a secured letter of credit with the FHLB and unsecured lines of credit with Atlantic Community Bankers Bank, Zions Bank and Texas Capital Bank. The total letter or line of credit and the amount outstanding at December 31, 2020 is summarized below:
Federal Home Loan Bank Stock As a member of the FHLB, the Bank is required to maintain investments in their capital stock. The Bank owned 78,596 shares and 74,744 shares at December 31, 2020 and December 31, 2019, respectively. There is no ready market or quoted market values for the stock and as such is classified as restricted stock. The shares have a par value of $100 and are carried on the consolidated balance sheets at cost, and evaluated for impairment, as the stock is only redeemable at par subject to the redemption practices of the FHLB. The determination of whether the par value will ultimately be recovered is influenced by criteria such as the following: (a) the significance of the decline in net assets of the Federal Home Loan Bank as compared to the capital stock amount and the length of time this situation has persisted; (b) commitments by the Federal Home Loan Bank to make payments required by law or regulation and the level of such payments in relation to the operating performance; (c) the impact of legislative and regulatory changes on the customer base of the Federal Home Loan Bank; and (d) the liquidity position of the Federal Home Loan Bank. Management evaluated the stock and concluded that the stock was not impaired as of December 31, 2020 or December 31, 2019.
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Subordinated Debentures |
12 Months Ended |
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Dec. 31, 2020 | |
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. The Notes became callable, in part or in whole, beginning August 2020. 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 the Company's working capital needs. In the third quarter of 2020, the Notes were assigned an investment grade rating of BBB- by Kroll Bond Rating Agency. The Company recognized $1.5 million in interest expense related to its subordinated debt for each of the years ended December 31, 2020, 2019, and 2018.
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Leases Effective January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842). As of December 31, 2020, the Company leases real estate for nine branch offices under various operating lease agreements. The branch leases have maturities ranging from 2021 to 2030, some of which include options to extend the lease term. In addition, the Company’s headquarter building is on land that is leased from the local municipality. Reference Note 7 for further detail. Legal matters The Company is involved in various legal proceedings which have arisen in the normal course of business. Management believes that resolution of these matters will not have a material effect on the Company’s financial condition or results of operations. Off-balance sheet instruments In the normal course of business, the Company is a party to financial instruments with off-balance sheet risk to meet the financing needs of its customers. These financial instruments include commitments to extend credit and involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the financial statements. The contractual amounts of these instruments reflect the extent of involvement the Company has in particular classes of financial instruments. The contractual amounts of commitments to extend credit represent the amounts of potential accounting loss should the contract be fully drawn upon, the customers default, and the value of any existing collateral becomes worthless. Management uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments and evaluates each customer’s creditworthiness on a case-by-case basis. Management believes that they control the credit risk of these financial instruments through credit approvals, credit limits, monitoring procedures and the receipt of collateral as deemed necessary. Financial instruments whose contract amounts represented credit risk at December 31, 2020 and December 31, 2019 were as follows:
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract or certain milestones in the case of construction loans or otherwise required collateral under borrowing base limits are met. Commitments to extend credit generally have fixed expiration dates or other termination clauses and may require payment of a fee by the borrower. Since these commitments could expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the counter party. Collateral held varies, but may include residential and commercial property, deposits and securities. These commitments subject the Company to potential exposure in excess of amounts recorded in the financial statements, and therefore, management maintains a specific reserve for unfunded credit commitments. This reserve is reported as a component of accrued expenses and other liabilities in the accompanying Consolidated Balance Sheets. The reserve for unfunded commitments totaled $90 thousand at December 31, 2020 and $120 thousand at December 31, 2019. As of December 31, 2020, the Bank had a remaining capital commitment of $2.8 million to a Small Business Investment Company ("SBIC"). This lending fund represents a related party business entity associated with one of the Company's Directors. Contributions to this fund represent an equity investment for the Company. In addition, as of December 31, 2020, the Bank had a commitment of $0.1 million, payable evenly over three years, to a non-profit business.
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The components of income tax expense for the years ended December 31, 2020, December 31, 2019 and December 31, 2018 consisted of:
In October, 2015, the Company created Bankwell Loan Servicing Group, Inc., a Passive Investment Company (“PIC”) organized for state income tax purposes. The PIC is a wholly-owned subsidiary of the Bank operating in accordance with Connecticut statutes. The PIC’s activities are limited in scope to holding and managing loans that are collateralized by real estate. Income earned by a PIC is determined in accordance with the statutory requirements for a passive investment company and the dividends paid by the PIC to the Bank are not taxable income for Connecticut income tax purposes. As a result of the formation of the PIC, the Bank is currently not subject to Connecticut income taxes. State taxes are being recognized for income taxes on income earned in other states. A reconciliation of the anticipated income tax expense, computed by applying the statutory federal income tax rate of 21% for the years ended December 31, 2020, December 31, 2019 and December 31, 2018 to the income before income taxes, to the amount reported in the consolidated statements of income for the years ended December 31, 2020, December 31, 2019, and December 31, 2018 was as follows:
At December 31, 2020 and December 31, 2019, the components of deferred tax assets and liabilities were as follows:
A valuation allowance against deferred tax assets is required if, based on the weight of available evidence, it is more-likely-than-not that some or all of the deferred tax assets will not be realized. Management evaluated its remaining deferred tax assets and believes no valuation allowances are needed at December 31, 2020. At December 31, 2020, the Company had federal net operating loss carryovers of $2.1 million. The carryovers were transferred to the Company upon the merger with The Wilton Bank. The losses will expire after 2032 and are subject to certain annual limitations which amount to $176 thousand per annum. Management regularly analyzes their tax positions and at December 31, 2020 management has established a reserve for uncertain tax positions in conjunction with the Company's out of state lending activity. The total reserve for uncertain tax positions totaled $394 thousand as of December 31, 2020. The tax years 2017 and subsequent are subject to examination by federal and state taxing authorities. The statute of limitations has expired on the years before 2017. No examinations are currently in process. The following table reflects a reconciliation of the beginning and ending balances of the Company’s uncertain tax positions:
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401(K) Profit Sharing Plan |
12 Months Ended |
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Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
401(K) Profit Sharing Plan | 401(K) Profit Sharing PlanThe Company’s employees are eligible to participate in The Bankwell Financial Group, Inc. and its Subsidiaries and Affiliates 401(k) Plan (the “401k Plan”). The 401k Plan covers substantially all employees who are at least 21 years of age. Under the terms of the 401k Plan, participants can contribute up to a certain percentage of their compensation, subject to federal limitations. The Company matches eligible contributions and may make discretionary matching and/or profit sharing contributions. Participants are immediately vested in their contributions and become fully vested in the Company’s contributions after completing five years of service. The Company expensed $297 thousand, $252 thousand and $265 thousand related to the 401k Plan during the years ended December 31, 2020, December 31, 2019 and December 31, 2018, respectively. |
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 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:
(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 warrants and the vesting of restricted shares, as applicable, utilizing the treasury stock method.
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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,” as amended from time-to-time. 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 stock options or restricted stock. At December 31, 2020, there were 610,250 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 an expense over the vesting period of such awards on a straight line basis. There were no options granted during the years ended December 31, 2020, December 31, 2019 or December 31, 2018. A summary of the status of outstanding stock options at December 31, 2020 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 stock options exercised during the years ended December 31, 2020, December 31, 2019 and December 31, 2018 was $27.0 thousand, $40.0 thousand and $0.4 million, respectively. The range of exercise prices for the 15,180 options exercisable at December 31, 2020 was $15.00 to $17.86 per share. The weighted average remaining contractual life for these options was 1.7 years at December 31, 2020. At December 31, 2020, all awarded options have vested, all of the outstanding options are exercisable, and the aggregate intrinsic value of these options was $41 thousand. 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 to five years. The following table presents the activity for restricted stock for the year ended December 31, 2020:
(1) Includes 21,750 shares of performance based restricted stock. (2) Includes 16,000 shares of performance based restricted stock. (3) Includes 22,651 shares of performance based restricted stock. The total fair value of restricted stock awards vested during the year ended December 31, 2020 was $1.2 million. The Company’s restricted stock expense for the years ended December 31, 2020, December 31, 2019 and December 31, 2018 was $1.8 million, $1.0 million and $1.3 million, respectively. At December 31, 2020, there was $3.3 million of unrecognized stock compensation expense for restricted stock, expected to be recognized over a weighted average period of 1.9 years. Performance based restricted stock: The Company has 15,099 shares of performance based restricted stock outstanding as of December 31, 2020 pursuant to the Company’s 2012 Stock Plan. The awards vest over a three year service period, provided certain performance metrics are met. The share quantity that ultimately vests can range between 0% and 200% for the 5,499 shares of performance based restricted stock granted prior to December 31, 2019, which 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.
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Comprehensive Income |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income | Comprehensive IncomeComprehensive 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 derivative instruments are utilized to manage economic risks, including interest rate risk. Changes in fair value of the Company's derivatives are primarily driven by changes in interest rates and recognized in other comprehensive income. The Company's current derivative positions will cause a decrease to other comprehensive income in a falling interest rate environment and an increase in a rising interest rate environment. The Company’s total comprehensive income or loss for the years ended December 31, 2020, December 31, 2019 and December 31, 2018 is reported in the Consolidated Statements of Comprehensive Income. The following tables present the changes in accumulated other comprehensive (loss) income by component, net of tax for the years ended December 31, 2020, December 31, 2019 and December 31, 2018:
The following table provides information for the items reclassified from accumulated other comprehensive income or loss:
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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 December 31, 2020, the Company was a party to nine interest rate swaps, designated as hedging instruments, to add stability to interest expense and to manage its exposure to the variability of the future cash flows attributable to the contractually specified interest rates. The notional amount for each swap is $25 million and in each case, the Company has entered into pay-fixed interest rate swaps to convert rolling 90 days Federal Home Loan Bank advances or brokered deposits. As of December 31, 2020, the Company is party to four interest rate swaps not designated as hedging instruments, to minimize interest rate risk exposure with loans to customers. The Company accounts for all non-borrower related 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. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain loan customers. The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings. 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 for the years ended December 31, 2020 and December 31, 2019 were as follows: December 31, 2020:
(1) Represents interest rate swaps with commercial banking customers, which are offset by derivatives with a third party. Accrued interest payable related to interest rate swaps as of December 31, 2020 totaled $0.6 million and is excluded from the fair value presented in the table above. The fair value of interest rate swaps in a net liability position, including accrued interest, totaled $24.2 million as of December 31, 2020. December 31, 2019:
(1) The effective date of the forward-starting interest rate swaps listed above are January 2, 2020 and August 26, 2020, respectively. (2) Represents an interest rate swap with a commercial banking customer, which is offset by a derivative with a third party. Accrued interest receivable related to interest rate swaps as of December 31, 2019 totaled $21.6 thousand and is excluded from the fair value presented in the table above. The fair value of interest rate swaps including accrued interest totaled $10.7 million as of December 31, 2019. 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 recognize $3.7 million in interest expense related to interest rate swap agreements included in other comprehensive income 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 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 does not offset derivative assets and derivative liabilities for financial statement presentation purposes. The Company's cash flow hedge positions consist of interest rate swap transactions as detailed in the table below:
This hedge strategy converts the rate of interest on short-term rolling FHLB advances or brokered deposits to long-term fixed interest rates, thereby protecting the Company from interest rate variability. Changes in the consolidated statements of comprehensive income (loss) related to interest rate derivatives designated as hedges of cash flows were as follows for the years ended December 31, 2020, December 31, 2019 and 2018:
The above unrealized gains and losses are reflective of market interest rates as of the respective balance sheet dates. Generally, a lower interest rate environment will result in a negative impact to comprehensive income whereas a higher interest rate environment will result in a positive impact to comprehensive income. The following tables summarize gross and net information about derivative instruments that are offset in the Consolidated Balance Sheets at December 31, 2020 and December 31, 2019:
(1) Includes accrued interest receivable totaling $40.0 thousand.
(1) Includes accrued interest payable totaling $662.0 thousand.
(1) Includes accrued interest receivable totaling $97.1 thousand
(1) Includes accrued interest payable totaling $75.5 thousand. (2) Actual cash collateral posted totaled $13.5 million, total cash collateral posted in the above table represents the total value to net the derivative liabilities to $0.
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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 December 31, 2020 and December 31, 2019 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. Marketable equity securities, available for sale securities 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. The majority of the available for sale securities are considered to be Level 2 as other observable inputs are utilized, such as quoted prices for similar securities. Level 1 investment securities include investments in a U.S. treasury note and in marketable equity securities for which a quoted price is readily available in the market. 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 2.9% to 3.3% as of December 31, 2020 and 3.8% to 4.1% as of December 31, 2019. 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. The fair value methodology includes prepayment, default and loss severity assumptions applied by type of loan. The fair value estimate of the loans includes an expected credit loss. 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 Company also considers the creditworthiness of each counterparty for assets and the creditworthiness of the Company for liabilities. Assets held for sale: Assets held for sale (excluding loans) consist of real estate properties that are expected to sell within a year. The assets are reported at the lower of the carrying amount or fair value less costs to sell. The fair value represents the price that would be received to sell the asset (the exit price). 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 Company also considers its own creditworthiness in determining the fair value of its borrowings and subordinated debt. Contractual cash flows for the subordinated debt are reduced based on the estimated rates of default, the severity of losses to be incurred on a default, and the rates at which the subordinated debt is expected to prepay after the call date. Off-balance-sheet instruments: Loan commitments on which the committed interest rate is less than the current market rate are insignificant at December 31, 2020 and December 31, 2019.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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. As discussed in Note 1, 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: 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. 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 December 31, 2020 and December 31, 2019, 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 years ended December 31, 2020 and December 31, 2019.
Marketable equity securities and available for sale securities: The fair value of the Company’s investment securities is estimated by using pricing models or quoted prices of securities with similar characteristics (i.e. matrix pricing) and is 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 also considers the creditworthiness of each counterparty for assets and the creditworthiness of the Company for liabilities. 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 December 31, 2020 and December 31, 2019, 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 December 31, 2020 and December 31, 2019:
(1) Servicing liabilities totaling $21 thousand were valued using a discount rate of 0.2%. (2) Servicing liabilities totaling $63 thousand were valued using a discount rate of 1.6%. 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. 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 or liabilities are deemed to be impaired. Assets held for sale: Assets held for sale (excluding loans) consist of real estate properties that are expected to sell within a year. The assets are reported at the lower of the carrying amount or fair value less costs to sell. The fair value represents the price that would be received to sell the asset (the exit price).
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Regulatory Matters |
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Regulatory Matters [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 to 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 excludes 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” of 2.5% in addition to the minimum risk based capital requirement. The “capital conservation buffer” was phased in from January 1, 2016 to January 1, 2019, when the full capital conservation buffer became effective. 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 December 31, 2020, the Bank and Company 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 December 31, 2020 were as follows:
The capital amounts and ratios for the Bank and Company at December 31, 2019 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 was not required to maintain a minimum reserve balance in the Federal Reserve Bank (FRB) at December 31, 2020 as the FRB has waived this requirement due to the COVID-19 pandemic. The Bank was required to maintain a minimum reserve balance of $14.1 million in the Federal Reserve Bank at December 31, 2019. This balance is maintained for clearing purposes in the ordinary course of business and does not represent restricted cash.
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Related Party Transactions |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | Related Party Transactions In the normal course of business, the Company may grant loans to executive officers, directors and members of their immediate families, as defined, and to entities in which these individuals have more than a 10% equity ownership. Such loans are transacted at terms including interest rates, similar to those available to unrelated customers. Changes in loans outstanding to such related parties during the years ending December 31, 2020 and December 31, 2019 were as follows:
Related party deposits aggregated approximately $17.4 million and $45.9 million at December 31, 2020 and December 31, 2019, respectively. During the years ended December 31, 2020 and December 31, 2019, the Company paid approximately $16 thousand and $26 thousand, respectively, to related parties for services provided to the Company. The payments were primarily for consulting and legal services. As of December 31, 2020, the Bank had a $0.2 million investment in a SBIC. This SBIC represents a related party business entity associated with one of the Company's Directors. Contributions to this fund represent an equity investment for the Company.
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Parent Company Only Financial Statements |
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Parent Company Only Financial Statements | Parent Company Only Financial Statements Bankwell Financial Group, Inc., the Parent Company, operates its wholly-owned subsidiary, Bankwell Bank. The earnings of this subsidiary are recognized by the Parent Company using the equity method of accounting. Accordingly, earnings are recorded as increases in the Parent Company’s investment in the subsidiary and dividends paid reduce the investment in the subsidiary. Condensed financial statements of the Parent Company only are as follows: Condensed Statements of Financial Condition
Condensed Statements of Income
Condensed Statements of Cash Flows
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Quarterly Financial Information of Bankwell Financial Group, Inc. (Unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information of Bankwell Financial Group, Inc. (Unaudited) | Quarterly Financial Information of Bankwell Financial Group, Inc. (Unaudited) The following tables present selected quarterly financial information (unaudited):
In the fourth quarter of 2020, the Company recognized a $3.9 million one-time charge recorded in noninterest expense for office consolidation, vendor contract termination and employee severance costs. The office consolidation costs, which totaled $2.0 million as of December 31, 2020 primarily related to a $1.7 million write down of a Bank owned property that is currently being marketed for sale and an impairment charge of $0.3 million relating to a right of use asset on a leased property. The Company expects the office consolidation process to be substantially complete by the end of the second quarter of 2021. The vendor contract termination cost, which totaled $1.1 million as of December 31, 2020 was due to the retirement of a legacy online banking application, which will be replaced with an application to drive commercial deposit growth. The vendor contract termination cost is expected to be paid prior to the end of the second quarter of 2021. The vendor contract termination cost is included in data processing expense on the consolidated statements of income. The employee severance costs, which totaled $0.8 million related to a Voluntary Early Retirement Incentive Plan offered to eligible employees and additional severance charges recognized during the fourth quarter of 2020. A total of $24 thousand of employee severance costs has been paid as of December 31, 2020 and the remainder is expected to be paid prior to the end of the first quarter of 2021. The employee severance costs are included in salaries and employee benefits expense on the consolidated statements of income.
Note: Due to rounding, quarterly earnings per share may not sum to reported annual earnings per share.
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Subsequent Events |
12 Months Ended |
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Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company's Board of Directors declared a $0.14 per share cash dividend, payable February 25, 2021 to shareholders of record on February 15, 2021. Subsequent to the year ended December 31, 2020, as of February 28, 2021, the Company purchased 65,626 shares of its Common Stock at a weighted average price of $21.66 per share.
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Nature of Operations and Summary of Significant Accounting Policies (Policies) |
12 Months Ended |
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Dec. 31, 2020 | |
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.
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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, derivative instrument valuation, investment securities valuation, evaluation of investment securities for other than temporary impairment and deferred income taxes valuation.
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Segments | Segments The Company has one reportable segment. All of the Company’s activities are interrelated, and each activity is dependent and assessed based on how each of the activities of the Company supports the others. For example, lending is dependent upon the ability of the Company to fund itself with deposits and borrowings while managing the interest rate and credit risk. Accordingly, all significant operating decisions are based upon analysis of the Company as one segment or unit.
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Basis of consolidated financial statement presentation | Basis of consolidated financial statement presentation The consolidated financial statements have been prepared in accordance with GAAP and general practices within the banking industry. Such policies have been followed on a consistent basis.
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Cash and Cash Equivalents and Statement of Cash Flows | Cash and Cash Equivalents and Statement of Cash Flows Cash and due from banks and federal funds sold are recognized as cash equivalents in the consolidated statements of cash flows. Federal funds sold generally mature in one day. For purposes of reporting cash flows, all highly liquid debt instruments purchased with an original maturity of three months or less are considered to be cash equivalents. Cash flows from loans and deposits are reported net. The balances of cash and due from banks and federal funds sold, at times, may exceed federally insured limits. The Company has not experienced any losses from such concentrations.
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Investment Securities | Investment Securities Management determines the appropriate classifications of investment securities at the date individual investment securities are acquired, and the appropriateness of such classifications is reaffirmed at each balance sheet date. The Company’s investments are categorized as marketable equity, available for sale or held to maturity securities. Held to maturity investments are carried at amortized cost. Available for sale securities are carried at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss) as a separate component of capital, net of estimated income taxes. Marketable equity securities are carried at fair value, with any changes in fair value reported in earnings. Investment securities in the available for sale and held-to-maturity portfolios are reviewed quarterly for other-than-temporary impairment ("OTTI"). If the fair value of a debt security is below amortized cost, other-than-temporary impairment is deemed to exist if the present value of the expected future cash flows is less than the amortized cost basis of the security. OTTI is required to be recognized regardless of the credit loss component if the Company intends to sell the security or if it is “more-likely-than-not” that the Company will be required to sell the security before recovery of its amortized cost basis. The credit loss component of an other-than-temporary impairment write-down is recorded in earnings, while the remaining portion of the impairment loss is recognized in other comprehensive income (loss), provided the Company does not intend to sell the underlying debt security and it is more-likely-than-not that the Company will not be required to sell the debt security prior to recovery. In determining whether a credit loss exists and the period over which the fair value of the debt security is expected to recover, management considers the following factors: the length of time and extent that fair value has been less than cost, the financial condition and near term prospects of the issuer, any external credit ratings, the level of excess cash flows generated from the underlying collateral supporting the principal and interest payments of the debt securities and the level of credit enhancement provided by the structure. The sale of a held to maturity security within three months of its maturity date or after collection of at least 85% of the principal outstanding at the time the security was acquired is considered a maturity for purposes of classification and disclosure. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Gains or losses on the sales of securities are recognized at trade date utilizing the specific identification method. Transfers of debt securities into the held to maturity classification from the available for sale classification are made at fair value on the date of transfer. The unrealized holding gain or loss on the date of transfer is retained in accumulated other comprehensive income and in the carrying value of the held to maturity securities. Such amounts are amortized over the remaining contractual lives of the securities. When transfers of debt securities into the available for sale classification from the held to maturity classification occur, any unrealized holding gains or losses on the transfer date are recognized in other comprehensive income
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Bank Owned Life Insurance | Bank Owned Life Insurance The investment in bank owned life insurance (“BOLI”) represents the cash surrender value of life insurance policies on the lives of certain Bank employees who have provided positive consent allowing the Bank to be the beneficiary of such policies. Increases in the cash value of the policies, as well as insurance proceeds received, are recorded in noninterest income, and are not subject to income taxes. The financial strength of the insurance carrier is reviewed prior to the purchase of BOLI and annually thereafter.
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Federal Home Loan Bank Stock | Federal Home Loan Bank Stock Federal Home Loan Bank of Boston (“FHLB”) stock is a non-marketable equity security that is carried at cost. There are no quoted market prices for this security and the security is not liquid. The Company can sell these securities back to the FHLB at par.
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Loans Held For Sale | Loans Held For Sale Loans held for sale are those loans which management has the intent to sell in the foreseeable future, and are carried at the lower of aggregate cost or market value. Net unrealized losses, if any, are recognized by a valuation allowance through a charge to noninterest income. Realized gains and losses on the sale of loans are recognized on the trade date and are determined by the difference between the sale proceeds and the carrying value of the loans. Loans may be sold with servicing rights released or retained. At the time of the sale, management records a servicing asset for the value of any retained servicing rights, which represents the present value of the differential between the contractual servicing fee and adequate compensation, defined as the fee a sub-servicer would require to assume the role of servicer, after considering the estimated effects of prepayments. Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, put presumptively beyond the reach of the transferor and its creditors, even in bankruptcy or other receivership, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the transferor does not maintain effective control over the transferred assets through either (a) an agreement that both entitles and obligates the transferor to repurchase or redeem the assets before maturity or (b) the ability to unilaterally cause the holder to return specific assets, other than through a cleanup call.
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Loans Receivable | Loans Receivable Loans receivable that management has the ability and intent to hold for the foreseeable future or until maturity or payoff are stated at their current unpaid principal balances, net of the allowance for loan losses, charge-offs, recoveries, net deferred loan origination fees and unamortized loan premiums. Past due or delinquency status for all loans is based on the number of days past due in accordance with its contractual payment terms. A loan is considered impaired when it is probable that all contractual principal or interest payments due will not be collected in accordance with the terms of the loan agreement. Impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, as a practical expedient, at the loan’s observable market price or the fair value of the collateral, if the loan is collateral dependent. The amount of impairment, if any, and any subsequent changes are recorded as adjustments to the allowance for loan losses. Impaired loans also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. Loans greater than 90 days past due are put on nonaccrual status (excluding certain acquired credit impaired loans). Loans are also placed on nonaccrual status when, in the opinion of management, full collection of principal and interest is doubtful. Interest previously accrued, but uncollected, is reversed against current period income. Subsequent payments are recognized on a cash basis or principal recapture basis depending on a number of factors including probability of collection and if impairment is identified. 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. Management reviews all nonaccrual loans, other loans past due 90 days or more, and restructured loans for impairment. In most cases, loan payments that are past due less than 90 days are considered minor collection delays and the related loans may not be impaired. Consumer installment loans are considered to be pools of small balance homogeneous loans, which are collectively evaluated for impairment. Modifications to a loan are considered to be a troubled debt restructuring (“TDR”) when two 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. Debt may be bifurcated with separate terms for each tranche of the restructured debt. The decision to restructure a loan, versus aggressively enforcing the collection of the loan, may benefit the Company by increasing the ultimate probability of collection. Section 4013 of the CARES Act permits a financial institution to elect to suspend troubled debt restructuring accounting, in certain circumstances, beginning March 1, 2020 and ending on the earlier of January 1, 2022, or sixty days after the national emergency concerning COVID-19 terminates. All short term loan modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any request for relief are not considered TDRs. 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. TDR’s are reported as such for at least one year from the date of restructuring. In years after the restructuring, troubled debt restructured loans may be removed from this classification if the restructuring agreement specifies a market rate of interest equal to that which would be provided to a borrower with similar credit at the time of restructuring and the loan is not deemed to be impaired based on the modified terms.
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Acquired Loans | Acquired Loans Loans that the Company acquires in acquisitions are initially recorded at fair value with no carryover of the related allowance for credit losses. Determining the fair value of acquired loans involves estimating the amount and timing of principal and interest cash flows initially expected to be collected on the loans and discounting those cash flows at an appropriate market rate of interest. For loans which meet the criteria stipulated in Accounting Standards Codification (“ASC”) 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality”, the Company recognizes an accretable yield, which is defined as the excess of all cash flows expected at acquisition over the initial fair value of the loan, as interest income on a level-yield basis over the expected remaining life of the loan. The excess of the loan’s contractually required payments over the cash flows expected to be collected is the nonaccretable difference. The nonaccretable difference is not recognized as an adjustment of yield, a loss accrual, or a valuation allowance. After the initial acquisition, the Company continues to evaluate whether the timing and the amount of cash to be collected are reasonably estimated. Subsequent significant increases in cash flows the Company expects to collect will first reduce previously recognized valuation allowance and then be reflected prospectively as an increase to the level yield. Subsequent decreases in expected cash flows may result in the loan being considered impaired. Interest income is not recognized to the extent that the net investment in the loan would increase to an amount greater than the estimated payoff amount. For ASC 310-30 loans, the expected cash flows reflect anticipated prepayments, determined on a loan by loan basis, according to the anticipated collection plan of these loans. Prepayments result in the recognition of the nonaccretable balance as current period yield. Changes in prepayment assumptions may change the amount of interest income and principal expected to be collected. The expected prepayments used to determine the accretable yield are consistent between the cash flows expected to be collected and projections of contractual cash flows so as to not affect the nonaccretable difference. For loans that do not meet the ASC 310-30 criteria, the Company records interest income on a level yield basis using the contractually required cash flows. The Company subjects loans that do not meet the ASC 310-30 criteria to ASC Topic 450, “Contingencies”, by collectively evaluating these loans for an allowance for loan loss, using the same methodology as loans originated by the Company. Acquired loans that met the criteria for nonaccrual of interest prior to the acquisition are considered performing upon acquisition, regardless of whether the customer is contractually delinquent, if the Company can reasonably estimate the timing and amount of the expected cash flows on such loans and if the Company expects to fully collect the new carrying value of the loans. As such, the Company may no longer consider the loan to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable yield. The Company has determined that it can reasonably estimate future cash flows on the Company’s current portfolio of acquired loans that are past due 90 days or more, and on which the Company is accruing interest and the Company expects to fully collect the carrying value of the loans.
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Allowance For Loan Losses (ALLL) | Allowance For Loan Losses (ALLL) The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance for loan losses when management believes the non-collectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance for loan losses. The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. The allowance for loan losses consists of specific and general components. The specific component relates to impaired loans that are classified as "doubtful", "substandard" or "special mention". For these loans, an allowance is established when the discounted cash flows, collateral value or observable market price of the impaired loan is lower than the carrying value of that loan. The general component covers non classified loans and is based on historical loss experience, including appropriate peer data, adjusted for qualitative factors. Management considers several qualitative factors, both internal and external to the Company, including valuation of underlying collateral; macro and local economic factors; nature and volume of loan portfolio; concentration of credit risk; net charge-off trends and non-accrual trends, and past due and classified loan trends when determining the general reserve. Management believes the allowance for loan losses is adequate. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the allowance for loan losses. Such agencies have the authority to require additions to the allowance or charge-offs based on the agencies’ judgments about information available to them at the time of their examination.
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Reserve for Unfunded Commitments | Reserve for Unfunded Commitments The reserve for unfunded commitments provides for probable losses inherent with funding the unused portion of legal commitments to lend. The unfunded reserve calculation includes factors that are consistent with the ALLL methodology for our loan portfolio as well as a draw down factor applied to the various commitments. The reserve for unfunded commitments is included within other liabilities in the accompanying Consolidated Balance Sheets, and changes in the reserve are reported as a component of other expense in the accompanying Consolidated Statements of Income. See Note 12: Commitments and Contingencies for further information.
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Interest and Fees on Loans | Interest and Fees on Loans Interest on loans is accrued and included in income based on contractual rates applied to principal amounts outstanding. Accrual of interest is discontinued when loan payments are 90 days or more past due, based on contractual terms, or when, in the judgment of management, collectability of the loan or loan interest becomes uncertain. When interest accrual is discontinued, all unpaid accrued interest is reversed against interest income. Subsequent recognition of income occurs only to the extent payment is received subject to management’s assessment of the collectability of the remaining interest and principal. 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. Loan origination fees, net of direct loan origination costs, are deferred and amortized as an adjustment to the loan’s yield generally over the contractual life of the loan, utilizing the interest method.
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Goodwill and Intangibles | Goodwill and Intangibles Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. Intangible assets are assets acquired in a business combination that lack physical substance but can be distinguished from goodwill because the intangible asset is capable of being sold or exchanged on its own or in combination with related contracts, assets or liabilities. Intangible assets are amortized on a straight-line or accelerated basis over estimated lives. Goodwill is not amortized. Goodwill and identifiable intangible assets are evaluated for impairment annually or whenever events or changes in circumstances indicate the carrying value of these assets may not be recoverable. When these assets are evaluated for impairment, if the carrying amount exceeds fair value, an impairment charge is recorded to income. The fair value is based on observable market prices, when practicable. Other valuation techniques may be used when market prices are unavailable, including estimated discounted cash flows. This type of analysis contains uncertainties because it requires management to make assumptions and to apply judgment to estimate industry economic factors and the profitability of future business strategies. In the event of future changes in fair value, the Company may be exposed to an impairment charge that could be material.
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Other Real Estate | Other Real Estate Owned Assets acquired through deed in lieu or loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating costs after acquisition are expensed.
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Premises and Equipment | Premises and Equipment Premises and equipment are stated at cost, net of accumulated depreciation and amortization. Leasehold improvements are capitalized and amortized over the shorter of the terms of the related leases or the estimated economic lives of the improvements. Depreciation and amortization is charged to operations using the straight-line method over the estimated useful lives of the related assets which range from to thirty-nine years. Gains and losses on dispositions are recognized upon realization. Maintenance and repairs are expensed as incurred and improvements are capitalized.
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Asset Held for Sale | Assets Held for Sale Assets held for sale (excluding loans) consist of real estate properties that are expected to sell within a year. The assets are reported at the lower of the carrying amount or fair value less costs to sell. Depreciation is not recognized on any assets that are classified as held for sale.
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Leases | Leases The Company recognizes and measures it leases in accordance with ASC 842, "Leases". The Company leases real estate for its branch offices under various operating lease agreements. In addition, the Company's headquarter building is on land leased from the local municipality. The Company determines if an arrangement is a lease, or contains a lease, at inception of a contract and when the terms of an existing contract are changed. The Company recognizes a lease liability and right-of-use-asset (ROUA) at the commencement date of the lease. The lease liability is initially and subsequently recognized based on the present value of its future lease payments. The discount rate is the implicit rate if it's readily determinable or otherwise the Company uses its incremental borrowing rate. The implicit rates of our leases are not readily determinable and accordingly, we use our incremental borrowing rate based on the information available at the commencement date for all leases. The ROUA is subsequently measured throughout the lease term at the amount of the remeasured lease liability (i.e., present value of the remaining lease payments), plus any unamortized initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of any lease incentives received, and any impairment recognized. Lease cost for lease payments is recognized on a straight-line basis over the lease term. The ROUA is included in premises and equipment, net and the lease liability is included in accrued expenses and other liabilities on the consolidated balance sheets.
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Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, including premises and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If impairment is indicated by that review, the asset is written down to its estimated fair value through a charge to noninterest expense.
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Servicing Rights | Servicing Rights When loans are sold on a servicing retained basis, servicing rights are initially recorded at fair value with the income statement effect recorded in noninterest income. All classes of servicing assets are subsequently measured using the amortization method, which requires servicing rights to be amortized into noninterest income in proportion to, and over the period of, the life of the underlying loans. Servicing rights are evaluated for impairment based upon the fair value of the rights as compared to the carrying amount. Any impairment is reported as a valuation allowance, to the extent that fair value is less than the carrying amount. If the Company later determines that all or a portion of the impairment no longer exists, a reduction of the allowance may be recorded as an increase to income. Changes in the valuation allowance are reported with service charges and fees income on the consolidated statements of income. The fair values of servicing rights are subject to fluctuations as a result of changes in estimated and actual prepayment speeds and default rates and losses. Loans serviced for others are not included in the accompanying consolidated balance sheets. Servicing fee income, which is included in service charges and fees on the income statement, is recorded for fees earned for servicing loans. Fees earned for servicing loans are based on a contractual percentage of the outstanding principal amount of the loan and are recorded as income when earned. The amortization of servicing rights is recorded in noninterest income.
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Income Taxes | Income Taxes The Company recognizes income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that all or some portion of the deferred tax assets will not be realized. In the ordinary course of business there is inherent uncertainty in quantifying the Company’s income tax positions. Income tax positions and recorded tax benefits assessed for all years are subject to examination based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, we have determined the amount of the tax benefit to be recognized by estimating the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company has $394 thousand and $269 thousand of liabilities for uncertain tax positions at December 31, 2020 and 2019, respectively. Where applicable, associated interest and penalties have also been recognized. We recognize accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense.
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Advertising Cost | Advertising costs Advertising costs are expensed as incurred.
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Stock Compensation | Stock Compensation The Company measures and recognizes compensation cost relating to share-based payment transactions based on the grant-date fair value of the equity instruments issued. The fair value of time-based restricted stock is recorded based on the grant date fair value of the Company’s common stock. For performance based grants, 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. The fair value of stock options is determined using the Black-Scholes Option Pricing model. Stock-based compensation costs are recognized over the requisite service period for the awards. Compensation expense reflects the number of awards expected to vest and is adjusted based on awards that ultimately vest. The Company recognizes forfeitures as they occur.
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Earnings Per Share | Earnings Per Share 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.
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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 accounted for as cash flow hedges. The Company’s total comprehensive income or loss for the years ended December 31, 2020, 2019 and 2018 is reported in the Consolidated Statements of Comprehensive Income.
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Fair Values of Financial Instruments | Fair Values of Financial Instruments The Company uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in certain instances, there are no quoted market prices for certain assets or liabilities. 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 rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the asset or liability. Fair value measurements focus on exit prices in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction at either December 31, 2020 or December 31, 2019. 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.
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Derivative Instruments | Derivative Instruments The effective portion of unrealized changes in the fair value of derivatives accounted for as cash flow hedges is reported in other comprehensive income and subsequently reclassified to earnings in the same period or periods during which the hedged forecasted transaction affects earnings. The Bank 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 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 hedge strategy converts the contractually specified interest rate on short-term rolling FHLB advances or Brokered CDs to long-term fixed interest rates, thereby protecting the Bank from interest rate variability. The Company does not offset derivative assets and derivative liabilities for financial statement presentation purposes. The Company also has derivatives not designated as hedges. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain loan customers. The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings.
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Related Party Transactions | Related Party Transactions Directors and officers of the Company and their affiliates have been customers of and have had transactions with the Company, and it is expected that such persons will continue to have such transactions in the future. Management believes that all deposit accounts, loans, services and commitments comprising such transactions were made in the ordinary course of business, on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other customers who are not directors or officers. In the opinion of management, the transactions with related parties did not involve more than normal risks of collectability, nor favored treatment or terms, nor present other unfavorable features. Note 22 contains details regarding related party transactions.
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Common Share Repurchases | Common Share Repurchases The Company is incorporated in the state of Connecticut. Connecticut law does not provide for treasury shares, rather shares repurchased by the Company constitute authorized, but unissued shares. GAAP states that accounting for treasury stock shall conform to state law. Therefore, the cost of shares repurchased by the Company has been allocated to common stock balances.
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Reclassification | Reclassification Certain prior period amounts have been reclassified to conform to the 2020 financial statement presentation. These reclassifications only changed the reporting categories and did not affect the results of operations or consolidated financial position.
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Recent accounting pronouncements | Recent accounting pronouncements The following section includes changes in accounting principles and potential effects of new accounting guidance and pronouncements. Recently issued accounting pronouncements not yet adopted ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): “Measurement of Credit Losses on Financial Instruments.” This 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. On July 17, 2019, the FASB proposed deferring the effective date of ASC 326 for smaller reporting companies as defined by the SEC. The FASB proposed a three-year deferral for smaller reporting companies, with an effective date of January 1, 2023. On October 16, 2019, the FASB voted in favor of finalizing its proposal to defer the effective date of this standard. The FASB issued ASU No. 2019-10, which officially delayed the adoption of this standard for smaller reporting companies until fiscal years beginning after December 15, 2022. The Company does qualify to defer the adoption of this standard and has not yet adopted this standard. Management continues to evaluate the impact of its future adoption of this guidance 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. On October 16, 2019, the FASB voted in favor of a proposal to defer the effective date of this standard in the same manner it is deferring the effective date of ASC 326. The FASB issued ASU No. 2019-10, which officially delayed the adoption of this standard for smaller reporting companies until fiscal years beginning after December 15, 2022. The Company does qualify to defer the adoption of this standard and has not yet adopted this standard. The Company does not expect the application of this guidance to have a material impact on the Company’s financial statements. Recently adopted accounting pronouncements 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. The guidance was effective for the Company on January 1, 2020. The application of this guidance did not have a material impact on the Company's financial statements. ASU No. 2020-04, Reference Rate Reform (Topic 848): "Facilitation of the Effects of Reference Rate Reform on Financial Reporting." This ASU provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022. Optional expedients include that modifications of contracts should be accounted for by prospectively adjusting the effective interest rate and modifications of leases should be accounted for as a continuation of the existing contract with no reassessments of lease classification and discount rate or remeasurements of lease payments. This ASU also provides many practical expedients for derivative accounting. In addition, an entity may elect to sell and/or transfer held to maturity securities that reference a rate affected by the reference rate reform classified as held to maturity prior to January 1, 2020. In particular, the Company made the following elections as it relates to hedging relationships; (1) Option to not reassess a previous accounting determination (paragraph 848-20-35-2); (2) Option to not dedesignate a hedging relationship due to a change in critical term (paragraph 848-20-35-3); (3) Option to change the contractual terms of a hedging instrument, hedged item, or forecasted transaction and to not dedesignate a hedging relationship (paragraph 848-30-25-5); (4) Adopt expedient ASC 848-50-25-2 to assert probability of the hedged interest regardless of any expected modification in terms related to reference rate reform; and (5) To continue the method of assessing effectiveness as documented in the original hedge documentation and apply the expedient in ASC 848-50-35-17 so that the reference rate on the hypothetical derivative matches the reference rate on the hedging instrument. For new hedging relationships designated subsequent to December 31, 2020, the Company elects to apply the expedient in ASC 848-50-25-11 to assume that the reference rate will not be replaced for the remainder of the hedging relationship. The application of this guidance did not have a material impact on the Company's financial statements.
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Goodwill and other intangible assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of goodwill | Information on goodwill for the years ended December 31, 2020, 2019 and 2018 is as follows:
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Schedule of carrying amounts and accumulated amortization of amortized intangible assets | The table below provides information regarding the carrying amounts and accumulated amortization of amortized intangible assets as of the dates set forth below. The remaining net intangible asset as of December 31, 2020 will be amortized over a period of approximately 2 years.
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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 values of available for sale and held to maturity securities segregated by contractual maturity at December 31, 2020 were as follows:
The amortized cost, gross unrealized gains and losses and fair values of available for sale and held to maturity securities segregated by contractual maturity at December 31, 2019 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 have been in a continuous unrealized loss position at December 31, 2019:
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Loans Receivable and Allowance for Loan Losses (Tables) |
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Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of summary of the loan portfolio | The following table sets forth a summary of the loan portfolio at December 31, 2020 and December 31, 2019:
(1) The December 31, 2020 balance includes $34.8 million of PPP loans made under the CARES Act.
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Schedule of portfolio segment and impairment methodology, of the allowance for loan losses and related portfolio | The following tables set forth the activity in the Company’s allowance for loan losses for the years ended December 31, 2020, December 31, 2019 and December 31, 2018, by portfolio segment:
Loans evaluated for impairment and the related allowance for loan losses as of December 31, 2020 and December 31, 2019 were as follows:
As of December 31, 2020, of the $57.7 million of loans individually evaluated for impairment a total of $10.0 million of these loans were determined to not be impaired.
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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 December 31, 2020 and December 31, 2019:
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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 the Company's loan portfolio delinquencies by portfolio segment as of December 31, 2020 and December 31, 2019:
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Schedule of nonaccrual loans by portfolio segment | The following is a summary of nonaccrual loans by portfolio segment as of December 31, 2020 and December 31, 2019:
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Schedule of summarizes impaired loans | The following tables summarize impaired loans by portfolio segment and the average carrying amount and interest income recognized on impaired loans by portfolio segment as of December 31, 2020, December 31, 2019 and December 31, 2018:
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Schedule of loans whose terms were modified as TDRs during the periods | The following table provides information on loans that were modified as TDRs during the periods presented:
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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 a TDR for the years ended December 31, 2020, December 31, 2019 and 2018.
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Premises and Equipment (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of premises and equipment | At December 31, 2020 and December 31, 2019, premises and equipment consisted of the following:
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Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of future minimum lease payments | Future minimum lease payments as of December 31, 2020 are as follows:
A reconciliation of the undiscounted cash flows in the maturity table above and the lease liability recognized in the consolidated balance sheet as of December 31, 2020, is shown below:
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Other Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of other assets | The components of other assets as of December 31, 2020 and December 31, 2019 are summarized below:
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Rollforward of loan servicing assets | The following table presents the changes in carrying value for loan servicing assets:
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Deposits (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of deposits | At December 31, 2020 and December 31, 2019, deposits consisted of the following:
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Schedule of contractual maturities of time certificates of deposit | Maturities of time certificates of deposit as of December 31, 2020 and December 31, 2019 are summarized below:
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Schedule of interest expense by account type | The following table summarizes interest expense by account type for the years ended December 31, 2020, 2019 and 2018:
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Federal Home Loan Bank Advances and Other Borrowings (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advances from Federal Home Loan Banks [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of FHLB advances with maturity dates and weighted average rates | The following is a summary of FHLB advances with maturity dates and weighted average rates at December 31, 2020 and December 31, 2019:
(1) The Company's FHLB borrowings are subject to longer term swap agreements and the weighted average rate reflects the all in swap rate under these long term swap agreements.
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Summary of line of credit outstanding | The total letter or line of credit and the amount outstanding at December 31, 2020 is summarized below:
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Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Off-balance sheet instruments | Financial instruments whose contract amounts represented credit risk at December 31, 2020 and December 31, 2019 were as follows:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of income tax expense | The components of income tax expense for the years ended December 31, 2020, December 31, 2019 and December 31, 2018 consisted of:
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Schedule of reconciliation of the anticipated income tax expense | A reconciliation of the anticipated income tax expense, computed by applying the statutory federal income tax rate of 21% for the years ended December 31, 2020, December 31, 2019 and December 31, 2018 to the income before income taxes, to the amount reported in the consolidated statements of income for the years ended December 31, 2020, December 31, 2019, and December 31, 2018 was as follows:
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Schedule of components of deferred tax assets and liabilities | At December 31, 2020 and December 31, 2019, the components of deferred tax assets and liabilities were as follows:
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Schedule of reflects a reconciliation of the beginning and ending balances | The following table reflects a reconciliation of the beginning and ending balances of the Company’s uncertain tax positions:
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Earnings Per Share ("EPS") (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 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:
(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 warrants and the vesting of restricted shares, as applicable, utilizing the treasury stock method.
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Stock Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of status of outstanding stock options | A summary of the status of outstanding stock options at December 31, 2020 is presented below:
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Schedule of activity for restricted stock | The following table presents the activity for restricted stock for the year ended December 31, 2020:
(1) Includes 21,750 shares of performance based restricted stock. (2) Includes 16,000 shares of performance based restricted stock. (3) Includes 22,651 shares of performance based restricted stock.
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Comprehensive Income (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in accumulated other comprehensive income (loss) by component | The following tables present the changes in accumulated other comprehensive (loss) income by component, net of tax for the years ended December 31, 2020, December 31, 2019 and December 31, 2018:
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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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Derivative Instruments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of derivative instruments | Information about derivative instruments for the years ended December 31, 2020 and December 31, 2019 were as follows: December 31, 2020:
(1) Represents interest rate swaps with commercial banking customers, which are offset by derivatives with a third party. December 31, 2019:
(1) The effective date of the forward-starting interest rate swaps listed above are January 2, 2020 and August 26, 2020, respectively. (2) Represents an interest rate swap with a commercial banking customer, which is offset by a derivative with a third party.
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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 (loss) related to interest rate derivatives designated as hedges of cash flows were as follows for the years ended December 31, 2020, December 31, 2019 and 2018:
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Summarized gross and net information abut derivative instruments that are offset in the consolidated balance sheets | The following tables summarize gross and net information about derivative instruments that are offset in the Consolidated Balance Sheets at December 31, 2020 and December 31, 2019:
(1) Includes accrued interest receivable totaling $40.0 thousand.
(1) Includes accrued interest payable totaling $662.0 thousand.
(1) Includes accrued interest receivable totaling $97.1 thousand
(1) Includes accrued interest payable totaling $75.5 thousand. (2) Actual cash collateral posted totaled $13.5 million, total cash collateral posted in the above table represents the total value to net the derivative liabilities to $0.
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Fair Value of Financial Instruments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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 December 31, 2020 and December 31, 2019 were as follows:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis | The following table details the financial instruments carried at fair value on a recurring basis at December 31, 2020 and December 31, 2019, 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 years ended December 31, 2020 and December 31, 2019.
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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 December 31, 2020 and December 31, 2019, 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 December 31, 2020 and December 31, 2019:
(1) Servicing liabilities totaling $21 thousand were valued using a discount rate of 0.2%. (2) Servicing liabilities totaling $63 thousand were valued using a discount rate of 1.6%.
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Regulatory Matters (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Matters [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of capital amounts and ratios | The capital amounts and ratios for the Bank and the Company at December 31, 2020 were as follows:
The capital amounts and ratios for the Bank and Company at December 31, 2019 were as follows:
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Related Party Transactions (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in loans outstanding of related parties | Changes in loans outstanding to such related parties during the years ending December 31, 2020 and December 31, 2019 were as follows:
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Parent Company Only Financial Statements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of condensed Statements of Financial Condition | Condensed financial statements of the Parent Company only are as follows: Condensed Statements of Financial Condition
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Schedule of condensed Statements of Income | Condensed Statements of Income
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Schedule of condensed Statements of Cash Flows | Condensed Statements of Cash Flows
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Quarterly Financial Information of Bankwell Financial Group, Inc. (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of quarterly financial information | The following tables present selected quarterly financial information (unaudited):
In the fourth quarter of 2020, the Company recognized a $3.9 million one-time charge recorded in noninterest expense for office consolidation, vendor contract termination and employee severance costs. The office consolidation costs, which totaled $2.0 million as of December 31, 2020 primarily related to a $1.7 million write down of a Bank owned property that is currently being marketed for sale and an impairment charge of $0.3 million relating to a right of use asset on a leased property. The Company expects the office consolidation process to be substantially complete by the end of the second quarter of 2021. The vendor contract termination cost, which totaled $1.1 million as of December 31, 2020 was due to the retirement of a legacy online banking application, which will be replaced with an application to drive commercial deposit growth. The vendor contract termination cost is expected to be paid prior to the end of the second quarter of 2021. The vendor contract termination cost is included in data processing expense on the consolidated statements of income. The employee severance costs, which totaled $0.8 million related to a Voluntary Early Retirement Incentive Plan offered to eligible employees and additional severance charges recognized during the fourth quarter of 2020. A total of $24 thousand of employee severance costs has been paid as of December 31, 2020 and the remainder is expected to be paid prior to the end of the first quarter of 2021. The employee severance costs are included in salaries and employee benefits expense on the consolidated statements of income.
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Nature of Operations and Summary of Significant Accounting Policies (Details) $ in Thousands |
12 Months Ended | |
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Dec. 31, 2020
USD ($)
segment
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Dec. 31, 2019
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Business Acquisition | ||
Number of reportable segment | segment | 1 | |
Uncertain tax positions | $ | $ 394 | $ 269 |
Minimum | ||
Business Acquisition | ||
Fixed asset useful life (in years) | 3 years | |
Maximum | ||
Business Acquisition | ||
Fixed asset useful life (in years) | 39 years |
Shareholders' Equity - Common Stock (Details) - shares |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Stockholders' Equity Note [Abstract] | ||
Common stock, share authorized (shares) | 10,000,000 | 10,000,000 |
Common stock, share issued (shares) | 7,919,278 | 7,868,803 |
Common shares outstanding (shares) | 7,919,278 | 7,868,803 |
Shareholders' Equity - Issuer Purchases of Equity Securities (Details) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 19, 2018 |
|
Subsidiary, Sale of Stock | |||
Authorized shares for repurchase (shares) | 400,000 | ||
Shares repurchased (shares) | 58,499 | 34,168 | |
Common Stock | |||
Subsidiary, Sale of Stock | |||
Shares repurchased (shares) | 58,499 | 34,168 | |
Weighted average share repurchased (in dollars per share) | $ 17.69 | $ 28.87 |
Goodwill and other intangible assets - Summary of goodwill (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Goodwill | |||
Balance, beginning of the period | $ 2,589,000 | $ 2,589,000 | $ 2,589,000 |
Impairment | 0 | 0 | 0 |
Balance, end of the period | $ 2,589,000 | $ 2,589,000 | $ 2,589,000 |
Goodwill and other intangible assets - Narratives (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill impairment | $ 0 | $ 0 | $ 0 |
Period of remaining net intangible asset (years) | 2 years |
Goodwill and other intangible assets - Information regarding the carrying amounts and accumulated amortization of amortized intangible assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Finite-Lived Intangible Assets | ||
Net Intangible Asset | $ 76 | $ 214 |
Core deposit intangible | ||
Finite-Lived Intangible Assets | ||
Gross Intangible Asset | 1,029 | 1,029 |
Accumulated Amortization | 953 | 815 |
Net Intangible Asset | $ 76 | $ 214 |
Investment Securities - Narratives (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020
USD ($)
security
|
Dec. 31, 2019
USD ($)
security
|
Dec. 31, 2018
USD ($)
|
|
Investments, Debt and Equity Securities [Abstract] | |||
Proceeds from sales of securities | $ 0 | ||
Net gain on sale of available for sale securities | 0 | $ 76,000 | $ 222,000 |
Available for sale debt securities, realized loss | 17,000.0 | ||
Marketable equity securities, at fair value | 2,207,000 | 2,118,000 | |
Marketable equity securities, cost | $ 2,100,000 | $ 2,000,000.0 | |
Number of available for sales debt securities in continuous loss position (positions) | security | 0 | 2 |
Loans Receivable and Allowance for Loan Losses - Rollforward of allowance for loan losses by portfolio segment (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Allowance for Loan and Lease Losses | ||||||||||||
Beginning balance | $ 13,509 | $ 15,462 | $ 13,509 | $ 15,462 | $ 18,904 | |||||||
Charge-offs | (123) | (2,441) | (6,926) | |||||||||
Recoveries | 18 | 51 | 44 | |||||||||
Provision (credit) for loan losses | $ 709 | $ 712 | $ 2,999 | 3,185 | $ 310 | $ 773 | $ (841) | 195 | 7,605 | 437 | 3,440 | |
Ending balance | 21,009 | 13,509 | $ 15,462 | 21,009 | 13,509 | 15,462 | ||||||
Residential Real Estate | ||||||||||||
Allowance for Loan and Lease Losses | ||||||||||||
Beginning balance | 730 | 857 | 730 | 857 | 1,721 | |||||||
Charge-offs | 0 | (875) | (420) | |||||||||
Recoveries | 0 | 0 | 0 | |||||||||
Provision (credit) for loan losses | (120) | 748 | (444) | |||||||||
Ending balance | 610 | 730 | 857 | 610 | 730 | 857 | ||||||
Commercial Real Estate | ||||||||||||
Allowance for Loan and Lease Losses | ||||||||||||
Beginning balance | 10,551 | 11,562 | 10,551 | 11,562 | 12,777 | |||||||
Charge-offs | 0 | (594) | (5,614) | |||||||||
Recoveries | 15 | 0 | 18 | |||||||||
Provision (credit) for loan losses | 5,859 | (417) | 4,381 | |||||||||
Ending balance | 16,425 | 10,551 | 11,562 | 16,425 | 10,551 | 11,562 | ||||||
Construction | ||||||||||||
Allowance for Loan and Lease Losses | ||||||||||||
Beginning balance | 324 | 140 | 324 | 140 | 907 | |||||||
Charge-offs | 0 | 0 | 0 | |||||||||
Recoveries | 0 | 0 | 0 | |||||||||
Provision (credit) for loan losses | (103) | 184 | (767) | |||||||||
Ending balance | 221 | 324 | 140 | 221 | 324 | 140 | ||||||
Commercial business | ||||||||||||
Allowance for Loan and Lease Losses | ||||||||||||
Beginning balance | 1,903 | 2,902 | 1,903 | 2,902 | 3,498 | |||||||
Charge-offs | (6,200) | (83) | (897) | (815) | ||||||||
Recoveries | 0 | 19 | 19 | |||||||||
Provision (credit) for loan losses | 1,933 | (121) | 200 | |||||||||
Ending balance | 3,753 | 1,903 | 2,902 | 3,753 | 1,903 | 2,902 | ||||||
Consumer | ||||||||||||
Allowance for Loan and Lease Losses | ||||||||||||
Beginning balance | $ 1 | $ 1 | 1 | 1 | 1 | |||||||
Charge-offs | (40) | (75) | (77) | |||||||||
Recoveries | 3 | 32 | 7 | |||||||||
Provision (credit) for loan losses | 36 | 43 | 70 | |||||||||
Ending balance | $ 0 | $ 1 | $ 1 | $ 0 | $ 1 | $ 1 |
Loans Receivable and Allowance for Loan Losses - Summary of nonaccrual loans by portfolio segment (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Financing Receivable, Recorded Investment, Past Due | ||
Total nonaccrual loans | $ 33,416 | $ 10,588 |
Residential Real Estate | ||
Financing Receivable, Recorded Investment, Past Due | ||
Total nonaccrual loans | 1,492 | 1,560 |
Commercial Real Estate | ||
Financing Receivable, Recorded Investment, Past Due | ||
Total nonaccrual loans | 21,093 | 5,222 |
Commercial business | ||
Financing Receivable, Recorded Investment, Past Due | ||
Total nonaccrual loans | 1,834 | 3,806 |
Construction | ||
Financing Receivable, Recorded Investment, Past Due | ||
Total nonaccrual loans | $ 8,997 | $ 0 |
Loans Receivable and Allowance for Loan Losses - Summary of loans were modified as TDR (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Financing Receivable, Modifications | |||
Outstanding recorded investment post-modification | $ 0 | $ 5,175 | $ 4,027 |
Maturity Concession | |||
Financing Receivable, Modifications | |||
Outstanding recorded investment post-modification | 0 | 125 | 0 |
Maturity and payment concession | |||
Financing Receivable, Modifications | |||
Outstanding recorded investment post-modification | 0 | 0 | 750 |
Maturity and rate concession | |||
Financing Receivable, Modifications | |||
Outstanding recorded investment post-modification | 0 | 0 | 608 |
Payment concession | |||
Financing Receivable, Modifications | |||
Outstanding recorded investment post-modification | 0 | 4,676 | 2,669 |
Rate and payment concession | |||
Financing Receivable, Modifications | |||
Outstanding recorded investment post-modification | $ 0 | $ 374 | $ 0 |
Premises and Equipment (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Property, Plant and Equipment | ||
Premises and equipment, gross | $ 31,327 | $ 37,801 |
Right-of-use asset | 8,591 | 10,084 |
Accumulated depreciation and amortization | (9,565) | (9,279) |
Premises and equipment, net | 21,762 | 28,522 |
Land | ||
Property, Plant and Equipment | ||
Premises and equipment, gross | 850 | 2,300 |
Building | ||
Property, Plant and Equipment | ||
Premises and equipment, gross | 9,866 | 14,169 |
Leasehold improvements | ||
Property, Plant and Equipment | ||
Premises and equipment, gross | 5,418 | 5,339 |
Furniture and fixtures | ||
Property, Plant and Equipment | ||
Premises and equipment, gross | 2,954 | 2,505 |
Equipment | ||
Property, Plant and Equipment | ||
Premises and equipment, gross | 3,581 | 3,337 |
Automobiles | ||
Property, Plant and Equipment | ||
Premises and equipment, gross | $ 67 | $ 67 |
Premises and Equipment - Narratives (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Property, Plant and Equipment [Abstract] | ||||
Depreciation and amortization expense | $ 3,276 | $ 3,377 | $ 1,732 | |
Depreciation and amortization expense includes amortization | 1,400 | 1,400 | ||
Right-of-use asset | $ 8,591 | 8,591 | 10,084 | |
Impairment of right-of-use asset | $ 300 | $ 280 | $ 0 | $ 0 |
Leases - Narratives (Details) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020
USD ($)
branch
|
Dec. 31, 2019
USD ($)
|
|
Lessee, Lease, Description | ||
Branches under operating lease agreement (branch) | branch | 9 | |
Operating lease cost | $ 2,300 | $ 2,000 |
Variable lease, cost | 100 | $ 100 |
Right of use asset | $ 8,600 | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position | us-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization | us-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization |
Lease liability | $ 8,973 | |
Operating Lease, Liability, Current, Statement of Financial Position | us-gaap:AccruedLiabilitiesAndOtherLiabilities | us-gaap:AccruedLiabilitiesAndOtherLiabilities |
Building | ||
Lessee, Lease, Description | ||
Weighted average remaining lease term | 6 years 2 months 12 days | |
Weighted average discount rate (percent) | 6.00% | |
Land | ||
Lessee, Lease, Description | ||
Weighted average remaining lease term | 79 years 8 months 12 days | |
Weighted average discount rate (percent) | 5.50% |
Leases - Future minimum lease payments (Details) $ in Thousands |
Dec. 31, 2020
USD ($)
|
---|---|
Lessee, Operating Lease, Liability, Payment, Due | |
2021 | $ 1,826 |
2022 | 1,200 |
2023 | 1,189 |
2024 | 773 |
2025 | 715 |
Thereafter | 17,226 |
Total | 22,929 |
Discount effect of cash flows | (13,956) |
Lease liability | $ 8,973 |
Other Assets - Summary of components of other assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Other Assets [Abstract] | |||
Deferred compensation | $ 2,121 | $ 2,763 | |
Servicing assets, net of valuation allowance | 628 | 978 | $ 870 |
Derivative assets | 4,444 | 2,266 | |
Collateral posted related to interest rate swaps | 28,205 | 13,450 | |
Increase (Decrease) in Assets Held-for-sale | 2,613 | 0 | |
Other | 4,759 | 2,739 | |
Total Other Assets | $ 42,770 | $ 22,196 |
Other Assets - Narratives (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Servicing Assets at Fair Value | |||
Decrease in deferred compensation | $ 600 | ||
Loans serviced for others | 109,400 | $ 128,300 | |
Servicing asset, net of valuation allowance | 628 | 978 | $ 870 |
Servicing liability | 21 | 63 | |
Assets held-for-sale bank owned and used property | 2,613 | $ 0 | |
Held for sale the asset was written down | $ 1,700 | ||
Minimum | |||
Servicing Assets at Fair Value | |||
Pre-payment speed assumptions | 3.00% | 3.00% | |
Maximum | |||
Servicing Assets at Fair Value | |||
Pre-payment speed assumptions | 16.00% | 19.00% | |
Discount rate | Minimum | |||
Servicing Assets at Fair Value | |||
Servicing asset, measurement input (percent) | 0.10 | 0.10 | |
Discount rate | Maximum | |||
Servicing Assets at Fair Value | |||
Servicing asset, measurement input (percent) | 0.11 |
Other Assets - Servicing Assets Rollforward (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Loan servicing rights: | ||
Balance at beginning of year | $ 978 | $ 870 |
Servicing rights capitalized | 16 | 440 |
Servicing rights amortized | (128) | (141) |
Servicing rights disposed | (338) | (153) |
Change in valuation allowance | 100 | (38) |
Balance at end of year | $ 628 | $ 978 |
Deposits - Components of deposits (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Deposits [Abstract] | ||
Noninterest bearing demand deposit accounts | $ 270,235 | $ 191,518 |
Interest bearing accounts: | ||
NOW | 101,737 | 70,020 |
Money market | 669,364 | 419,495 |
Savings | 158,750 | 183,729 |
Time certificates of deposit | 627,230 | 627,141 |
Total interest bearing accounts | 1,557,081 | 1,300,385 |
Total deposits | $ 1,827,316 | $ 1,491,903 |
Deposits - Contractual maturities of time certificates of deposit (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Deposits [Abstract] | ||
2020 | $ 0 | $ 430,361 |
2021 | 418,117 | 167,933 |
2022 | 50,425 | 28,515 |
2023 | 128,495 | 239 |
2024 | 30,160 | 93 |
2025 | 33 | 0 |
Total | $ 627,230 | $ 627,141 |
Deposits- Narratives (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Deposits [Abstract] | ||
Individual certificate with balances of $250,000 or more | $ 353.7 | $ 307.1 |
Brokered deposits | 238.9 | 179.8 |
Certificates of deposit from national listing service | 18.4 | 21.3 |
Brokered money market accounts | $ 13.5 | $ 39.9 |
Deposits - Interest expense by account type (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Deposits [Abstract] | |||
NOW | $ 141 | $ 128 | $ 157 |
Money market | 4,071 | 7,139 | 6,431 |
Savings | 1,368 | 2,968 | 1,649 |
Time certificates of deposit | 12,600 | 14,463 | 10,714 |
Total interest expense on deposits | $ 18,180 | $ 24,698 | $ 18,951 |
Federal Home Loan Bank Advances and Other Borrowings - Summary of FHLB advances with maturity dates and weighted average rates (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Year of Maturity: Amount Due | ||
2020 | $ 0 | $ 150,000 |
2021 | 175,000 | 0 |
Total advances Amount Due | $ 175,000 | $ 150,000 |
Year of Maturity: Weighted Average Rate | ||
2020 | 0.00% | 1.93% |
2021 | 1.84% | 0.00% |
Total advances Weighted Average Rate | 1.84% | 1.93% |
Federal Home Loan Bank Advances and Other Borrowings - Narratives (Details) - FHLB - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Federal Home Loan Bank, Advances, Branch of FHLB Bank | |||
FHLB advances subject to interest rate swap | $ 175.0 | $ 125.0 | |
Interest expense on FHLB advances | 1.3 | $ 3.6 | $ 3.9 |
Loans pledge as collateral for borrowing at FHLB of Boston | 847.0 | ||
FHLB advances, immediate availability to borrow | $ 347.9 | ||
Number of FHLB shares owned (shares) | 78,596 | 74,744 | |
Par value of shares owned (usd per share) | $ 100 |
Subordinated Debentures (Details) - Subordinated debentures - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Aug. 19, 2015 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Debt Instrument | ||||
Aggregate principal amount | $ 25,500,000 | $ 25,500,000 | ||
Fixed rated subordinated notes | ||||
Debt Instrument | ||||
Aggregate principal amount | $ 25,500,000 | |||
Notes non-callable term (in years) | 5 years | |||
Quarterly pay fixed interest rate of notes | 5.75% | |||
Interest expense on debt | $ 1,500,000 | $ 1,500,000 | $ 1,500,000 |
Commitments and Contingencies - Narratives (Details) $ in Thousands |
Dec. 31, 2020
USD ($)
branch
|
Dec. 31, 2019
USD ($)
|
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Branches under operating lease agreement (branch) | branch | 9 | |
Reserve for unfunded commitments | $ 90 | $ 120 |
Remaining capital commitment | 2,800 | |
Commitments due over the next three years | $ 100 |
Commitments and Contingencies - Commitments to extend credit (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Fair Value, Off-balance Sheet Risks, Disclosure Information | ||
Outstanding commitments | $ 237,060 | $ 189,742 |
Loan commitments | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information | ||
Outstanding commitments | 114,574 | 102,986 |
Undisbursed construction loans | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information | ||
Outstanding commitments | 117,457 | 80,472 |
Unused home equity lines of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information | ||
Outstanding commitments | $ 5,029 | $ 6,284 |
Income Taxes - Components of income tax expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Current provision: | |||||||||||
Federal | $ 4,295 | $ 4,137 | $ 2,251 | ||||||||
State | 618 | 313 | 185 | ||||||||
Total current | 4,913 | 4,450 | 2,436 | ||||||||
Deferred (credit) provision: | |||||||||||
Federal | (3,071) | 276 | 1,284 | ||||||||
State | (445) | 0 | 0 | ||||||||
Total deferred | (3,516) | 276 | 1,284 | ||||||||
Total income tax expense | $ 177 | $ 790 | $ 279 | $ 151 | $ 924 | $ 1,030 | $ 1,441 | $ 1,331 | $ 1,397 | $ 4,726 | $ 3,720 |
Income Taxes - Narratives (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|---|
Operating Loss Carryforwards | ||||
Uncertain tax positions | $ 394 | $ 269 | $ 193 | $ 393 |
Federal | ||||
Operating Loss Carryforwards | ||||
Operating loss carryovers | 2,100 | |||
Operating loss carryforward annual limitations | $ 176 |
Income Taxes - Reconciliation of income tax expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Income Tax Disclosure [Abstract] | |||||||||||
Income tax expense at statutory federal rate | $ 1,533 | $ 4,818 | $ 4,442 | ||||||||
State tax expense, net of federal tax effect | 174 | 223 | 99 | ||||||||
Income exempt from tax | (345) | (368) | (403) | ||||||||
Stock compensation | 101 | (3) | (68) | ||||||||
Deferred director fees | 2 | (14) | (100) | ||||||||
Other items, net | (68) | 70 | (250) | ||||||||
Total income tax expense | $ 177 | $ 790 | $ 279 | $ 151 | $ 924 | $ 1,030 | $ 1,441 | $ 1,331 | $ 1,397 | $ 4,726 | $ 3,720 |
Income Taxes - Components of deferred tax assets and liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Deferred tax assets: | ||
Allowance for loan losses | $ 4,724 | $ 2,862 |
Net operating loss carryforwards | 444 | 481 |
Deferred fees | 1,433 | 1,120 |
Deferred director fees | 341 | 174 |
Start-up costs | 70 | 91 |
Unrealized loss on derivatives | 5,246 | 2,245 |
Lease liabilities | 2,009 | 2,132 |
Other | 1,311 | 302 |
Gross deferred tax assets | 15,578 | 9,407 |
Deferred tax liabilities: | ||
Deferred expenses | 774 | 671 |
Servicing rights | 136 | 192 |
Core deposit intangible | 17 | 45 |
Depreciation | 309 | 210 |
Unrealized gain on available for sale securities | 786 | 247 |
Right-of-use-assets | 1,986 | 2,117 |
Other | 270 | 137 |
Gross deferred tax liabilities | 4,278 | 3,619 |
Net deferred tax asset | $ 11,300 | $ 5,788 |
Income Taxes - Reconciliation of the beginning and ending balances of the Company's uncertain tax positions (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns | |||
Balance, beginning of year | $ 269 | $ 193 | $ 393 |
Net additions (reductions) relating to potential liability with taxing authorities | 125 | 76 | |
Net additions (reductions) relating to potential liability with taxing authorities | (200) | ||
Balance, end of year | $ 394 | $ 269 | $ 193 |
401(K) Profit Sharing Plan (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Retirement Benefits [Abstract] | |||
Profit sharing plan age of covered employee | 21 years | ||
Vesting period for employer under defined contribution plan | 5 years | ||
Profit sharing plan contribution amount | $ 297 | $ 252 | $ 265 |
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 | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 336 | $ 2,991 | $ 1,214 | $ 1,363 | $ 3,472 | $ 4,088 | $ 5,576 | $ 5,080 | $ 5,904 | $ 18,216 | $ 17,433 |
Dividends to participating securities | (70) | (46) | (51) | ||||||||
Undistributed earnings allocated to participating securities | (23) | (166) | (178) | ||||||||
Net income for earnings per share calculation | $ 5,811 | $ 18,004 | $ 17,204 | ||||||||
Weighted average shares outstanding, basic (in shares) | 7,728,328 | 7,757,355 | 7,722,175 | ||||||||
Effect of dilutive equity-based awards (in shares) | 20,000 | 28,000 | 53,000 | ||||||||
Weighted average shares outstanding, diluted (in shares) | 7,748,453 | 7,784,631 | 7,775,480 | ||||||||
Net earnings per common share: | |||||||||||
Basic earnings per common share (in dollars per share) | $ 0.04 | $ 0.38 | $ 0.16 | $ 0.17 | $ 0.44 | $ 0.52 | $ 0.71 | $ 0.65 | $ 0.75 | $ 2.32 | $ 2.23 |
Diluted earnings per common share (in dollars per share) | $ 0.04 | $ 0.38 | $ 0.16 | $ 0.17 | $ 0.44 | $ 0.52 | $ 0.71 | $ 0.65 | $ 0.75 | $ 2.31 | $ 2.21 |
Stock Based Compensation - Outstanding stock options (Details) - Employee Stock Option |
12 Months Ended |
---|---|
Dec. 31, 2020
$ / shares
shares
| |
Number of Shares | |
Options outstanding at beginning of period, shares | shares | 16,680 |
Exercised, shares | shares | (1,500) |
Options outstanding at end of period, shares | shares | 15,180 |
Options exercisable at end of period, shares | shares | 15,180 |
Weighted Average Exercise Price | |
Options outstanding at beginning of period (usd per share) | $ / shares | $ 16.30 |
Exercised (usd per share) | $ / shares | 11.00 |
Options outstanding at end of period (usd per share) | $ / shares | 16.82 |
Options exercisable at end of period (usd per share) | $ / shares | $ 16.82 |
Stock Based Compensation - Activity for restricted stock (Details) |
12 Months Ended |
---|---|
Dec. 31, 2020
$ / shares
shares
| |
Number of Shares | |
Unvested at beginning of period, shares | shares | 110,975 |
Granted, shares | shares | 109,199 |
Vested, shares | shares | (55,080) |
Forfeited, shares | shares | (1,725) |
Unvested at end of period, shares | shares | 163,369 |
Weighted Average Grant Date Fair Value | |
Unvested at beginning of period (usd per share) | $ / shares | $ 30.88 |
Granted (usd per share) | $ / shares | 23.75 |
Vested (usd per share) | $ / shares | 30.55 |
Forfeited (usd per share) | $ / shares | 31.37 |
Unvested at end of period (usd per share) | $ / shares | $ 26.22 |
Comprehensive Income - Summary of reclassified from accumulated other comprehensive income or loss (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Available-for-sale securities: | |||||||||||
Income tax expense | $ (177) | $ (790) | $ (279) | $ (151) | $ (924) | $ (1,030) | $ (1,441) | $ (1,331) | $ (1,397) | $ (4,726) | $ (3,720) |
Net income | $ 336 | $ 2,991 | $ 1,214 | $ 1,363 | $ 3,472 | $ 4,088 | $ 5,576 | $ 5,080 | 5,904 | 18,216 | 17,433 |
Derivatives: | |||||||||||
Unrealized loss recognized in accumulated other comprehensive (loss) income before reclassifications | (14,970) | (10,361) | (914) | ||||||||
Net Unrealized Gain (Loss) on Available for Sale Securities | Amount Reclassified from Accumulated Other Comprehensive Income | |||||||||||
Available-for-sale securities: | |||||||||||
Unrealized gains on investments | 0 | 76 | 222 | ||||||||
Income tax expense | 0 | (16) | (47) | ||||||||
Net income | 0 | 60 | 175 | ||||||||
Derivatives: | |||||||||||
Unrealized loss recognized in accumulated other comprehensive (loss) income before reclassifications | (2,094) | 760 | 690 | ||||||||
Tax benefit (expense) | 488 | (160) | (145) | ||||||||
Net of tax | $ (1,606) | $ 600 | $ 545 |
Derivative Instruments - Changes in consolidated statements of comprehensive income related to interest rate derivatives (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Interest rate swaps designated as cash flow hedges: | |||
Unrealized loss recognized in accumulated other comprehensive (loss) income before reclassifications | $ (14,970) | $ (10,361) | $ (914) |
Amounts reclassified from accumulated other comprehensive income | 2,094 | (760) | (690) |
Income tax benefit on items recognized in accumulated other comprehensive (loss) income | 3,001 | 2,335 | 337 |
Unrealized losses on interest rate swaps, net of tax | $ (9,875) | $ (8,786) | $ (1,267) |
Derivative Instruments - Summary of gross net information about derivatives (Details) - USD ($) |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Offsetting Derivative Assets | ||
Gross Amounts of Recognized Assets | $ 4,484,000 | $ 2,363,000 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Assets presented in the Statement of Financial Position | 4,484,000 | 2,363,000 |
Financial Instruments | 0 | 591,000 |
Cash Collateral Received | 0 | 0 |
Net Amount | 4,484,000 | 1,772,000 |
Offsetting Derivative Liabilities | ||
Gross Amounts of Recognized Liabilities | 28,673,000 | 13,032,000 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amounts of Liabilities presented in the Statement of Financial Position | 28,673,000 | 13,032,000 |
Financial Instruments | 0 | 591,000 |
Cash Collateral Posted | 28,205,000 | 12,441,000 |
Net Amount | $ 468,000 | $ 0 |
Fair Value of Financial Instruments - Narratives (Details) - Discount rate |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, measurement input | 0.029 | 0.038 |
Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Debt securities, measurement input | 0.033 | 0.041 |
Related Party Transactions - Narratives (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Related Party Transaction | ||
Related party deposits | $ 17,400 | $ 45,900 |
Payment to related parties for services | 16 | $ 26 |
Investment in small business lending fund | $ 200 | |
Affiliated Entity | Minimum | ||
Related Party Transaction | ||
Equity ownership percentage | 10.00% |
Related Party Transactions - Changes in loans outstanding (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Loans and Leases Receivable, Related Parties | ||
Balance, beginning of year | $ 66 | $ 8,673 |
Additional loans | 30,529 | 0 |
Repayments | (3) | (3,573) |
Effect of changes in related parties | 0 | (5,034) |
Balance, end of year | $ 30,592 | $ 66 |
Parent Company Only Financial Statements - Condensed Statements of Financial Condition (Details) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|---|
ASSETS | ||||
Cash and due from banks | $ 405,340 | $ 78,051 | ||
Deferred income taxes, net | 11,300 | 5,788 | ||
Other assets | 42,770 | 22,196 | ||
Total assets | 2,253,747 | 1,882,182 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||
Accrued expenses and other liabilities | 49,571 | 32,675 | ||
Shareholders’ equity | 176,602 | 182,397 | $ 174,196 | $ 161,027 |
Total liabilities and shareholders’ equity | 2,253,747 | 1,882,182 | ||
Parent Company | ||||
ASSETS | ||||
Cash and due from banks | 22,780 | 6,418 | ||
Investment in subsidiary | 178,651 | 201,097 | ||
Premises and equipment, net | 3 | 7 | ||
Deferred income taxes, net | 205 | 187 | ||
Other assets | 2,525 | 2,853 | ||
Total assets | 204,164 | 210,562 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||
Subordinated debentures | 25,258 | 25,207 | ||
Accrued expenses and other liabilities | 2,304 | 2,958 | ||
Shareholders’ equity | 176,602 | 182,397 | ||
Total liabilities and shareholders’ equity | $ 204,164 | $ 210,562 |
Parent Company Only Financial Statements - Condensed Statements of Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Condensed Financial Statements, Captions | |||||||||||
Interest income | $ 73,665 | $ 77,339 | $ 74,715 | ||||||||
Income before equity in undistributed earnings of subsidiaries | $ 513 | $ 3,781 | $ 1,493 | $ 1,514 | $ 4,396 | $ 5,118 | $ 7,017 | $ 6,411 | 7,301 | 22,942 | 21,153 |
Net income | $ 336 | $ 2,991 | $ 1,214 | $ 1,363 | $ 3,472 | $ 4,088 | $ 5,576 | $ 5,080 | 5,904 | 18,216 | 17,433 |
Parent Company | |||||||||||
Condensed Financial Statements, Captions | |||||||||||
Interest income | 16 | 17 | 15 | ||||||||
Dividend income from subsidiary | 24,600 | 7,500 | 4,000 | ||||||||
Total income | 24,616 | 7,517 | 4,015 | ||||||||
Expenses | 4,325 | 3,488 | 3,444 | ||||||||
Income before equity in undistributed earnings of subsidiaries | 20,291 | 4,029 | 571 | ||||||||
Equity in undistributed earnings of subsidiaries | (14,387) | 14,187 | 16,862 | ||||||||
Net income | $ 5,904 | $ 18,216 | $ 17,433 |
Quarterly Financial Information of Bankwell Financial Group, Inc. (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total interest and dividend income | $ 19,146 | $ 18,922 | $ 19,323 | $ 20,096 | $ 19,933 | $ 20,493 | $ 21,046 | $ 21,476 | $ 77,487 | $ 82,948 | $ 80,064 |
Total interest expense | 4,842 | 5,314 | 5,686 | 6,810 | 7,051 | 7,482 | 7,451 | 7,203 | 22,652 | 29,187 | 23,738 |
Net interest income | 14,304 | 13,608 | 13,637 | 13,286 | 12,882 | 13,011 | 13,595 | 14,273 | 54,835 | 53,761 | 56,326 |
Provision (credit) for loan losses | 709 | 712 | 2,999 | 3,185 | 310 | 773 | (841) | 195 | 7,605 | 437 | 3,440 |
Total noninterest income | 621 | 614 | 577 | 1,072 | 1,048 | 1,552 | 1,336 | 1,308 | 2,884 | 5,244 | 3,900 |
Total noninterest expense | 13,703 | 9,729 | 9,722 | 9,659 | 9,224 | 8,672 | 8,755 | 8,975 | 42,813 | 35,626 | 35,633 |
Income before equity in undistributed earnings of subsidiaries | 513 | 3,781 | 1,493 | 1,514 | 4,396 | 5,118 | 7,017 | 6,411 | 7,301 | 22,942 | 21,153 |
Income tax expense | 177 | 790 | 279 | 151 | 924 | 1,030 | 1,441 | 1,331 | 1,397 | 4,726 | 3,720 |
Net income | $ 336 | $ 2,991 | $ 1,214 | $ 1,363 | $ 3,472 | $ 4,088 | $ 5,576 | $ 5,080 | $ 5,904 | $ 18,216 | $ 17,433 |
Earnings per common share: | |||||||||||
Basic (in dollars per share) | $ 0.04 | $ 0.38 | $ 0.16 | $ 0.17 | $ 0.44 | $ 0.52 | $ 0.71 | $ 0.65 | $ 0.75 | $ 2.32 | $ 2.23 |
Diluted (in dollars per share) | $ 0.04 | $ 0.38 | $ 0.16 | $ 0.17 | $ 0.44 | $ 0.52 | $ 0.71 | $ 0.65 | $ 0.75 | $ 2.31 | $ 2.21 |
Quarterly Financial Information of Bankwell Financial Group, Inc. (Unaudited) - Narratives (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2020 |
|
Quarterly Financial Information Disclosure [Abstract] | ||
Noninterest expense | $ 3,900 | |
Consolidation cost | $ 2,000 | |
write down of assets | 1,700 | |
Impairment of right-of-use asset | 300 | |
Contract termination cost | 1,100 | |
Employee severance cost | $ 800 | $ 24 |
Subsequent Events (Details) - $ / shares |
2 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Feb. 25, 2021 |
Feb. 28, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Subsequent Events | |||||
Dividends per common share (in dollars per share) | $ 0.56 | $ 0.52 | $ 0.48 | ||
Shares repurchased (shares) | 58,499 | 34,168 | |||
Subsequent Events | |||||
Subsequent Events | |||||
Dividends per common share (in dollars per share) | $ 0.14 | ||||
Shares repurchased (shares) | 65,626 | ||||
Weighted average share repurchased (in dollars per share) | $ 21.66 |
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