ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended March 31, 2019 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from _____ to _____ |
Washington | 46-1259100 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer I.D. Number) |
105 West 8th Street, Port Angeles, Washington | 98362 |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: | (360) 457-0461 |
Large accelerated filer | ¨ | Accelerated filer | x |
Non-accelerated filer | ¨ | Smaller reporting company | x |
Emerging growth company | x |
Common Stock, par value $0.01 per share | FNWB | The Nasdaq Stock Market LLC | ||
(Title of Class) | (Trading Symbol(s) | (Name of each exchange on which registered) |
PART 1 - FINANCIAL INFORMATION | |
Page | |
Item 1 - Financial Statements (Unaudited) | |
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations | |
Item 3 - Quantitative and Qualitative Disclosures About Market Risk | |
Item 4 - Controls and Procedures | |
PART II - OTHER INFORMATION | |
Item 1 - Legal Proceedings | |
Item 1A - Risk Factors | |
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds | |
Item 3 - Defaults Upon Senior Securities | |
Item 4 - Mine Safety Disclosures | |
Item 5 - Other Information | |
Item 6 - Exhibits | |
SIGNATURES |
ASSETS | March 31, 2019 | December 31, 2018 | |||||
Cash and due from banks | $ | 14,738 | $ | 15,430 | |||
Interest-bearing deposits in banks | 12,919 | 10,893 | |||||
Investment securities available for sale, at fair value | 258,476 | 262,967 | |||||
Investment securities held to maturity, at amortized cost | 43,024 | 43,503 | |||||
Loans held for sale | 969 | — | |||||
Loans receivable (net of allowance for loan losses of $9,759 and $9,533) | 883,195 | 863,852 | |||||
Federal Home Loan Bank (FHLB) stock, at cost | 6,927 | 6,927 | |||||
Accrued interest receivable | 4,114 | 4,048 | |||||
Premises and equipment, net | 14,955 | 15,255 | |||||
Mortgage servicing rights, net | 1,001 | 1,044 | |||||
Bank-owned life insurance, net | 29,462 | 29,319 | |||||
Prepaid expenses and other assets | 9,009 | 5,520 | |||||
Total assets | $ | 1,278,789 | $ | 1,258,758 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Deposits | $ | 952,755 | $ | 940,260 | |||
Borrowings | 135,174 | 136,552 | |||||
Accrued interest payable | 279 | 521 | |||||
Accrued expenses and other liabilities | 15,020 | 8,071 | |||||
Advances from borrowers for taxes and insurance | 2,154 | 1,090 | |||||
Total liabilities | 1,105,382 | 1,086,494 | |||||
Shareholders' Equity | |||||||
Preferred stock, $0.01 par value, authorized 5,000,000 shares, no shares issued or outstanding | — | — | |||||
Common stock, $0.01 par value, authorized 75,000,000 shares; issued and outstanding 10,992,181 shares at March 31, 2019, and 11,170,018 shares at December 31, 2018 | 110 | 112 | |||||
Additional paid-in capital | 104,374 | 105,825 | |||||
Retained earnings | 82,436 | 81,607 | |||||
Accumulated other comprehensive loss, net of tax | (3,128 | ) | (4,731 | ) | |||
Unearned employee stock ownership plan (ESOP) shares | (10,385 | ) | (10,549 | ) | |||
Total shareholders' equity | 173,407 | 172,264 | |||||
Total liabilities and shareholders' equity | $ | 1,278,789 | $ | 1,258,758 |
Three Months Ended | |||||||
March 31, | |||||||
2019 | 2018 | ||||||
INTEREST INCOME | |||||||
Interest and fees on loans receivable | $ | 9,932 | $ | 8,583 | |||
Interest on mortgage-backed securities | 1,257 | 1,297 | |||||
Interest on investment securities | 1,010 | 862 | |||||
Interest on deposits and other | 67 | 45 | |||||
FHLB dividends | 88 | 59 | |||||
Total interest income | 12,354 | 10,846 | |||||
INTEREST EXPENSE | |||||||
Deposits | 1,924 | 985 | |||||
Borrowings | 990 | 889 | |||||
Total interest expense | 2,914 | 1,874 | |||||
Net interest income | 9,440 | 8,972 | |||||
PROVISION FOR LOAN LOSSES | 335 | 310 | |||||
Net interest income after provision for loan losses | 9,105 | 8,662 | |||||
NONINTEREST INCOME | |||||||
Loan and deposit service fees | 1,065 | 893 | |||||
Mortgage servicing fees, net of amortization | 45 | 62 | |||||
Net gain on sale of loans | 87 | 167 | |||||
Net gain on sale of investment securities | — | 122 | |||||
Increase in cash surrender value of bank-owned life insurance | 143 | 149 | |||||
Other income | 71 | 89 | |||||
Total noninterest income | 1,411 | 1,482 | |||||
NONINTEREST EXPENSE | |||||||
Compensation and benefits | 4,573 | 4,811 | |||||
Data processing | 631 | 628 | |||||
Occupancy and equipment | 1,108 | 1,102 | |||||
Supplies, postage, and telephone | 228 | 231 | |||||
Regulatory assessments and state taxes | 169 | 126 | |||||
Advertising | 143 | 324 | |||||
Professional fees | 298 | 322 | |||||
FDIC insurance premium | 77 | 76 | |||||
Other | 573 | 655 | |||||
Total noninterest expense | 7,800 | 8,275 | |||||
INCOME BEFORE PROVISION FOR INCOME TAXES | 2,716 | 1,869 | |||||
PROVISION FOR INCOME TAXES | 509 | 346 | |||||
NET INCOME | $ | 2,207 | $ | 1,523 | |||
Basic earnings per share | $ | 0.22 | $ | 0.15 | |||
Diluted earnings per share | $ | 0.22 | $ | 0.14 | |||
Three Months Ended | |||||||
March 31, | |||||||
2019 | 2018 | ||||||
NET INCOME | $ | 2,207 | $ | 1,523 | |||
Other comprehensive income (loss), net of tax | |||||||
Unrealized gain on securities: | |||||||
Unrealized holding gain (loss), net of tax provision (benefit) of $427 and $(551), respectively | 1,603 | (2,078 | ) | ||||
Reclassification adjustment for net loss (gain) on sales of securities realized in income, net of taxes of $0 and $(26), respectively | — | (96 | ) | ||||
Other comprehensive income (loss), net of tax | 1,603 | (2,174 | ) | ||||
COMPREHENSIVE INCOME (LOSS) | $ | 3,810 | $ | (651 | ) |
Common Stock | Additional Paid-in Capital | Retained Earnings | Unearned ESOP Shares | Accumulated Other Comprehensive (Loss) Income, Net of Tax | Total Shareholders' Equity | |||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||
BALANCE, December 31, 2017 | 11,785,507 | $ | 118 | $ | 111,106 | $ | 78,602 | $ | (11,208 | ) | $ | (1,573 | ) | $ | 177,045 | |||||||||||
Net income | 1,523 | 1,523 | ||||||||||||||||||||||||
Common stock repurchased | (208,113 | ) | (2 | ) | (2,080 | ) | (1,303 | ) | (3,385 | ) | ||||||||||||||||
Other comprehensive loss, net of tax | (2,174 | ) | (2,174 | ) | ||||||||||||||||||||||
Share-based compensation | 273 | 273 | ||||||||||||||||||||||||
ESOP shares committed to be released | 55 | 165 | 220 | |||||||||||||||||||||||
BALANCE, March 31, 2018 | 11,577,394 | $ | 116 | $ | 109,354 | $ | 78,822 | $ | (11,043 | ) | $ | (3,747 | ) | $ | 173,502 | |||||||||||
BALANCE, December 31, 2018 | 11,170,018 | $ | 112 | $ | 105,825 | $ | 81,607 | $ | (10,549 | ) | $ | (4,731 | ) | $ | 172,264 | |||||||||||
Net income | 2,207 | 2,207 | ||||||||||||||||||||||||
Common stock repurchased | (177,837 | ) | (2 | ) | (1,777 | ) | (1,047 | ) | (2,826 | ) | ||||||||||||||||
Other comprehensive income, net of tax | 1,603 | 1,603 | ||||||||||||||||||||||||
Share-based compensation | 283 | 283 | ||||||||||||||||||||||||
ESOP shares committed to be released | 43 | 164 | 207 | |||||||||||||||||||||||
Cash dividends declared and paid ($0.03 per share) | (331 | ) | (331 | ) | ||||||||||||||||||||||
BALANCE, March 31, 2019 | 10,992,181 | $ | 110 | $ | 104,374 | $ | 82,436 | $ | (10,385 | ) | $ | (3,128 | ) | $ | 173,407 |
FIRST NORTHWEST BANCORP AND SUBSIDIARY | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(In thousands) (Unaudited) | |||||||
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income | $ | 2,207 | $ | 1,523 | |||
Adjustments to reconcile net income to net cash from operating activities: | |||||||
Depreciation and amortization | 333 | 332 | |||||
Amortization and accretion of premiums and discounts on investments, net | 458 | 496 | |||||
Amortization (accretion) of deferred loan fees, net | 167 | (49 | ) | ||||
Amortization of mortgage servicing rights, net | 66 | 47 | |||||
Additions to mortgage servicing rights, net | (20 | ) | (56 | ) | |||
Net (decrease) increase on the valuation allowance on mortgage servicing rights | (3 | ) | — | ||||
Provision for loan losses | 335 | 310 | |||||
Allocation of ESOP shares | 207 | 220 | |||||
Share-based compensation | 283 | 273 | |||||
Gain on sale of loans, net | (87 | ) | (167 | ) | |||
Gain on sale of securities available for sale, net | — | (122 | ) | ||||
Increase in cash surrender value of life insurance, net | (143 | ) | (149 | ) | |||
Origination of loans held for sale | (4,420 | ) | (5,640 | ) | |||
Proceeds from loans held for sale | 3,538 | 6,595 | |||||
Change in assets and liabilities: | |||||||
(Increase) decrease in accrued interest receivable | (66 | ) | 104 | ||||
Increase in prepaid expenses and other assets | (3,916 | ) | (467 | ) | |||
Decrease in accrued interest payable | (242 | ) | (115 | ) | |||
Increase in accrued expenses and other liabilities | 6,949 | 2,243 | |||||
Net cash from operating activities | 5,646 | 5,378 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Purchase of securities available for sale | — | (12,935 | ) | ||||
Proceeds from maturities, calls, and principal repayments of securities available for sale | 6,108 | 9,077 | |||||
Proceeds from sales of securities available for sale | — | 32,859 | |||||
Proceeds from maturities, calls, and principal repayments of securities held to maturity | 434 | 2,315 | |||||
Redemption of FHLB stock | — | 634 | |||||
Proceeds from sale of real estate owned and repossessed assets | — | 31 | |||||
Net increase in loans receivable | (19,845 | ) | (20,012 | ) | |||
Purchase of premises and equipment, net | (33 | ) | (954 | ) | |||
Net cash from investing activities | (13,336 | ) | 11,015 | ||||
FIRST NORTHWEST BANCORP AND SUBSIDIARY | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(In thousands) (Unaudited) | |||||||
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Net increase (decrease) in deposits | $ | 12,495 | $ | (4,410 | ) | ||
Net decrease in FHLB short-term advances | (1,378 | ) | (21,151 | ) | |||
Net increase in advances from borrowers for taxes and insurance | 1,064 | 902 | |||||
Dividends paid | (331 | ) | — | ||||
Repurchase of common stock | (2,826 | ) | (3,385 | ) | |||
Net cash from financing activities | 9,024 | (28,044 | ) | ||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1,334 | (11,651 | ) | ||||
CASH AND CASH EQUIVALENTS, beginning of period | 26,323 | 36,801 | |||||
CASH AND CASH EQUIVALENTS, end of period | $ | 27,657 | $ | 25,150 | |||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |||||||
Cash paid during the year for: | |||||||
Interest on deposits and borrowings | $ | 3,156 | $ | 1,989 | |||
NONCASH INVESTING ACTIVITIES | |||||||
Unrealized gain (loss) on securities available for sale | $ | 2,030 | $ | (2,751 | ) | ||
Loans transferred to real estate owned and repossessed assets, net of deferred loan fees and allowance for loan losses | $ | 74 | $ | 34 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Available for Sale | |||||||||||||||
Municipal bonds | $ | 882 | $ | 31 | $ | (1 | ) | $ | 912 | ||||||
U.S. government agency issued asset-backed securities (ABS agency) | 26,066 | — | (347 | ) | 25,719 | ||||||||||
Corporate issued asset-backed securities (ABS corporate) | 37,888 | — | (814 | ) | 37,074 | ||||||||||
Corporate issued debt securities (Corporate debt) | 9,986 | — | (492 | ) | 9,494 | ||||||||||
U.S. Small Business Administration securities (SBA) | 33,553 | 60 | (217 | ) | 33,396 | ||||||||||
Mortgage-backed securities: | |||||||||||||||
U.S. government agency issued mortgage-backed securities (MBS agency) | 143,520 | 140 | (2,133 | ) | 141,527 | ||||||||||
Corporate issued mortgage-backed securities (MBS corporate) | 10,568 | — | (214 | ) | 10,354 | ||||||||||
Total securities available for sale | $ | 262,463 | $ | 231 | $ | (4,218 | ) | $ | 258,476 | ||||||
Held to Maturity | |||||||||||||||
Municipal bonds | $ | 11,850 | $ | 70 | $ | — | $ | 11,920 | |||||||
SBA | 149 | — | (1 | ) | 148 | ||||||||||
Mortgage-backed securities: | |||||||||||||||
MBS agency | 31,025 | 43 | (586 | ) | 30,482 | ||||||||||
Total securities held to maturity | $ | 43,024 | $ | 113 | $ | (587 | ) | $ | 42,550 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Available for Sale | |||||||||||||||
Municipal bonds | $ | 882 | $ | — | $ | (13 | ) | $ | 869 | ||||||
ABS agency | 26,125 | — | (373 | ) | 25,752 | ||||||||||
ABS corporate | 37,897 | — | (1,174 | ) | 36,723 | ||||||||||
Corporate debt | 9,986 | 98 | (196 | ) | 9,888 | ||||||||||
SBA | 35,936 | 23 | (289 | ) | 35,670 | ||||||||||
Mortgage-backed securities: | |||||||||||||||
MBS agency | 147,205 | 12 | (3,762 | ) | 143,455 | ||||||||||
MBS corporate | 10,953 | — | (343 | ) | 10,610 | ||||||||||
Total securities available for sale | $ | 268,984 | $ | 133 | $ | (6,150 | ) | $ | 262,967 | ||||||
Held to Maturity | |||||||||||||||
Municipal bonds | $ | 11,919 | $ | 43 | $ | — | $ | 11,962 | |||||||
SBA | 302 | — | (1 | ) | 301 | ||||||||||
Mortgage-backed securities: | |||||||||||||||
MBS agency | 31,282 | 40 | (595 | ) | 30,727 | ||||||||||
Total securities held to maturity | $ | 43,503 | $ | 83 | $ | (596 | ) | $ | 42,990 |
Less Than Twelve Months | Twelve Months or Longer | Total | |||||||||||||||||||||
Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Available for Sale | |||||||||||||||||||||||
Municipal bonds | $ | — | $ | — | $ | (1 | ) | $ | 114 | $ | (1 | ) | $ | 114 | |||||||||
ABS agency | (56 | ) | 14,643 | (291 | ) | 11,076 | (347 | ) | 25,719 | ||||||||||||||
ABS corporate | (365 | ) | 14,731 | (449 | ) | 22,343 | (814 | ) | 37,074 | ||||||||||||||
Corporate debt | (161 | ) | 4,839 | (331 | ) | 4,655 | (492 | ) | 9,494 | ||||||||||||||
SBA | (20 | ) | 4,855 | (197 | ) | 12,242 | (217 | ) | 17,097 | ||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||
MBS agency | — | — | (2,133 | ) | 112,999 | (2,133 | ) | 112,999 | |||||||||||||||
MBS corporate | — | — | (214 | ) | 10,354 | (214 | ) | 10,354 | |||||||||||||||
Total available for sale | $ | (602 | ) | $ | 39,068 | $ | (3,616 | ) | $ | 173,783 | $ | (4,218 | ) | $ | 212,851 | ||||||||
Held to Maturity | |||||||||||||||||||||||
Municipal bonds | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
SBA | — | — | (1 | ) | 148 | (1 | ) | 148 | |||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||
MBS agency | — | — | (586 | ) | 23,671 | (586 | ) | 23,671 | |||||||||||||||
Total held to maturity | $ | — | $ | — | $ | (587 | ) | $ | 23,819 | $ | (587 | ) | $ | 23,819 |
Less Than Twelve Months | Twelve Months or Longer | Total | |||||||||||||||||||||
Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Available for Sale | |||||||||||||||||||||||
Municipal bonds | $ | (8 | ) | $ | 757 | $ | (5 | ) | $ | 110 | $ | (13 | ) | $ | 867 | ||||||||
ABS agency | (302 | ) | 23,286 | (71 | ) | 2,466 | (373 | ) | 25,752 | ||||||||||||||
ABS corporate | (571 | ) | 14,527 | (603 | ) | 22,196 | (1,174 | ) | 36,723 | ||||||||||||||
Corporate debt | — | — | (196 | ) | 4,791 | (196 | ) | 4,791 | |||||||||||||||
SBA | (44 | ) | 13,400 | (245 | ) | 13,089 | (289 | ) | 26,489 | ||||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||||
MBS agency | (28 | ) | 17,996 | (3,734 | ) | 120,617 | (3,762 | ) | 138,613 | ||||||||||||||
MBS corporate | — | — | (343 | ) | 10,610 | (343 | ) | 10,610 | |||||||||||||||
Total available for sale | $ | (953 | ) | $ | 69,966 | $ | (5,197 | ) | $ | 173,879 | $ | (6,150 | ) | $ | 243,845 | ||||||||
Held to Maturity | |||||||||||||||||||||||
SBA | $ | (1 | ) | $ | — | $ | — | $ | 301 | $ | (1 | ) | $ | 301 | |||||||||
Mortgage-backed securities: | |||||||||||||||||||||||
MBS agency | (70 | ) | 6,241 | (525 | ) | 18,073 | (595 | ) | 24,314 | ||||||||||||||
Total held to maturity | $ | (71 | ) | $ | 6,241 | $ | (525 | ) | $ | 18,374 | $ | (596 | ) | $ | 24,615 |
March 31, 2019 | |||||||||||||||
Available-for-Sale | Held-to-Maturity | ||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Mortgage-backed securities: | |||||||||||||||
Due within one year | $ | — | $ | — | $ | — | $ | — | |||||||
Due after one through five years | 7,163 | 7,121 | 499 | 498 | |||||||||||
Due after five through ten years | 11,611 | 11,526 | 1,898 | 1,861 | |||||||||||
Due after ten years | 135,314 | 133,234 | 28,628 | 28,123 | |||||||||||
Total mortgage-backed securities | 154,088 | 151,881 | 31,025 | 30,482 | |||||||||||
All other investment securities: | |||||||||||||||
Due within one year | — | — | — | — | |||||||||||
Due after one through five years | — | — | 731 | 745 | |||||||||||
Due after five through ten years | 18,463 | 17,906 | 6,538 | 6,583 | |||||||||||
Due after ten years | 89,912 | 88,689 | 4,730 | 4,740 | |||||||||||
Total all other investment securities | 108,375 | 106,595 | 11,999 | 12,068 | |||||||||||
Total investment securities | $ | 262,463 | $ | 258,476 | $ | 43,024 | $ | 42,550 | |||||||
December 31, 2018 | |||||||||||||||
Available-for-Sale | Held-to-Maturity | ||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Mortgage-backed securities: | |||||||||||||||
Due within one year | $ | — | $ | — | $ | — | $ | — | |||||||
Due after one through five years | 7,204 | 7,089 | 578 | 569 | |||||||||||
Due after five through ten years | 11,862 | 11,637 | 2,035 | 1,978 | |||||||||||
Due after ten years | 139,092 | 135,339 | 28,669 | 28,180 | |||||||||||
Total mortgage-backed securities | 158,158 | 154,065 | 31,282 | 30,727 | |||||||||||
All other investment securities: | |||||||||||||||
Due within one year | — | — | — | — | |||||||||||
Due after one through five years | — | — | 734 | 741 | |||||||||||
Due after five through ten years | 19,564 | 19,362 | 6,728 | 6,743 | |||||||||||
Due after ten years | 91,262 | 89,540 | 4,759 | 4,779 | |||||||||||
Total all other investment securities | 110,826 | 108,902 | 12,221 | 12,263 | |||||||||||
Total investment securities | $ | 268,984 | $ | 262,967 | $ | 43,503 | $ | 42,990 | |||||||
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
(In thousands) | |||||||
Proceeds from sales | $ | — | $ | 32,859 | |||
Gross realized gains | — | 164 | |||||
Gross realized losses | — | (42 | ) |
March 31, 2019 | December 31, 2018 | ||||||
(In thousands) | |||||||
Real Estate: | |||||||
One-to-four family | $ | 338,669 | $ | 336,178 | |||
Multi-family | 81,576 | 82,331 | |||||
Commercial real estate | 250,521 | 253,235 | |||||
Construction and land | 63,536 | 54,102 | |||||
Total real estate loans | 734,302 | 725,846 | |||||
Consumer: | |||||||
Home equity | 37,058 | 37,629 | |||||
Auto and other consumer | 99,070 | 87,357 | |||||
Total consumer loans | 136,128 | 124,986 | |||||
Commercial business loans | 18,496 | 18,898 | |||||
Total loans | 888,926 | 869,730 | |||||
Less: | |||||||
Net deferred loan fees | 285 | 299 | |||||
Premium on purchased loans, net | (4,313 | ) | (3,954 | ) | |||
Allowance for loan losses | 9,759 | 9,533 | |||||
Total loans receivable, net | $ | 883,195 | $ | 863,852 |
At or For the Three Months Ended March 31, 2019 | |||||||||||||||||||||||||||||||||||
One-to- four family | Multi-family | Commercial real estate | Construction and land | Home equity | Auto and other consumer | Commercial business | Unallocated | Total | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
ALLL: | |||||||||||||||||||||||||||||||||||
Beginning balance | $ | 3,297 | $ | 762 | $ | 2,289 | $ | 585 | $ | 480 | $ | 1,611 | $ | 334 | $ | 175 | $ | 9,533 | |||||||||||||||||
Provision for loan losses | 142 | 7 | 48 | 115 | (14 | ) | 177 | (141 | ) | 1 | 335 | ||||||||||||||||||||||||
Charge-offs | — | — | — | — | — | (186 | ) | (4 | ) | — | (190 | ) | |||||||||||||||||||||||
Recoveries | 2 | — | — | — | 1 | 76 | 2 | — | 81 | ||||||||||||||||||||||||||
Ending balance | $ | 3,441 | $ | 769 | $ | 2,337 | $ | 700 | $ | 467 | $ | 1,678 | $ | 191 | $ | 176 | $ | 9,759 | |||||||||||||||||
At March 31, 2019 | |||||||||||||||||||||||||||||||||||
One-to- four family | Multi-family | Commercial real estate | Construction and land | Home equity | Auto and other consumer | Commercial business | Unallocated | Total | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Total ALLL | $ | 3,441 | $ | 769 | $ | 2,337 | $ | 700 | $ | 467 | $ | 1,678 | $ | 191 | $ | 176 | $ | 9,759 | |||||||||||||||||
General reserve | 3,403 | 768 | 2,328 | 699 | 463 | 1,624 | 184 | 176 | 9,645 | ||||||||||||||||||||||||||
Specific reserve | 38 | 1 | 9 | 1 | 4 | 54 | 7 | — | 114 | ||||||||||||||||||||||||||
Total loans | $ | 338,669 | $ | 81,576 | $ | 250,521 | $ | 63,536 | $ | 37,058 | $ | 99,070 | $ | 18,496 | $ | — | $ | 888,926 | |||||||||||||||||
Loans collectively evaluated (1) | 335,525 | 81,466 | 248,568 | 63,467 | 36,450 | 98,852 | 18,191 | — | 882,519 | ||||||||||||||||||||||||||
Loans individually evaluated (2) | 3,144 | 110 | 1,953 | 69 | 608 | 218 | 305 | — | 6,407 | ||||||||||||||||||||||||||
(1) Loans collectively evaluated for general reserves. | |||||||||||||||||||||||||||||||||||
(2) Loans individually evaluated for specific reserves. |
At or For the Three Months Ended March 31, 2018 | |||||||||||||||||||||||||||||||||||
One-to- four family | Multi-family | Commercial real estate | Construction and land | Home equity | Auto and other consumer | Commercial business | Unallocated | Total | |||||||||||||||||||||||||||
ALLL: | (In thousands) | ||||||||||||||||||||||||||||||||||
Beginning balance | $ | 3,061 | $ | 648 | $ | 1,847 | $ | 648 | $ | 787 | $ | 712 | $ | 265 | $ | 792 | $ | 8,760 | |||||||||||||||||
Provision for loan losses | 105 | (1 | ) | 206 | 31 | (51 | ) | 331 | 444 | (755 | ) | 310 | |||||||||||||||||||||||
Charge-offs | — | — | — | — | — | (123 | ) | — | — | (123 | ) | ||||||||||||||||||||||||
Recoveries | 1 | — | — | — | 8 | 28 | — | — | 37 | ||||||||||||||||||||||||||
Ending balance | $ | 3,167 | $ | 647 | $ | 2,053 | $ | 679 | $ | 744 | $ | 948 | $ | 709 | $ | 37 | $ | 8,984 | |||||||||||||||||
At December 31, 2018 | |||||||||||||||||||||||||||||||||||
One-to- four family | Multi-family | Commercial real estate | Construction and land | Home equity | Auto and other consumer | Commercial business | Unallocated | Total | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Total ALLL | $ | 3,297 | $ | 762 | $ | 2,289 | $ | 585 | $ | 480 | $ | 1,611 | $ | 334 | $ | 175 | $ | 9,533 | |||||||||||||||||
General reserve | 3,262 | 761 | 2,281 | 584 | 474 | 1,552 | 168 | 175 | 9,257 | ||||||||||||||||||||||||||
Specific reserve | 35 | 1 | 8 | 1 | 6 | 59 | 166 | — | 276 | ||||||||||||||||||||||||||
Total loans | $ | 336,178 | $ | 82,331 | $ | 253,235 | $ | 54,102 | $ | 37,629 | $ | 87,357 | $ | 18,898 | $ | — | $ | 869,730 | |||||||||||||||||
Loans collectively evaluated (1) | 333,062 | 82,221 | 251,263 | 54,058 | 37,002 | 87,113 | 18,453 | — | 863,172 | ||||||||||||||||||||||||||
Loans individually evaluated (2) | 3,116 | 110 | 1,972 | 44 | 627 | 244 | 445 | — | 6,558 | ||||||||||||||||||||||||||
(1) Loans collectively evaluated for general reserves. | |||||||||||||||||||||||||||||||||||
(2) Loans individually evaluated for specific reserves. |
March 31, 2019 | December 31, 2018 | ||||||||||||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | Recorded Investment | Unpaid Principal Balance | Related Allowance | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
With no allowance recorded: | |||||||||||||||||||||||
One-to-four family | $ | 303 | $ | 336 | $ | — | $ | 306 | $ | 339 | $ | — | |||||||||||
Commercial real estate | 1,292 | 1,360 | — | 1,308 | 1,374 | — | |||||||||||||||||
Construction and land | — | 1 | — | — | 1 | — | |||||||||||||||||
Home equity | 323 | 469 | — | 330 | 478 | — | |||||||||||||||||
Auto and other consumer | — | 306 | — | — | 276 | — | |||||||||||||||||
Commercial business | — | — | — | — | 3 | — | |||||||||||||||||
Total | 1,918 | 2,472 | — | 1,944 | 2,471 | — | |||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||
One-to-four family | 2,841 | 3,112 | 38 | 2,810 | 3,085 | 35 | |||||||||||||||||
Multi-family | 110 | 110 | 1 | 110 | 110 | 1 | |||||||||||||||||
Commercial real estate | 661 | 661 | 9 | 664 | 663 | 8 | |||||||||||||||||
Construction and land | 69 | 101 | 1 | 44 | 71 | 1 | |||||||||||||||||
Home equity | 285 | 353 | 4 | 297 | 364 | 6 | |||||||||||||||||
Auto and other consumer | 218 | 218 | 54 | 244 | 244 | 59 | |||||||||||||||||
Commercial business | 305 | 305 | 7 | 445 | 445 | 166 | |||||||||||||||||
Total | 4,489 | 4,860 | 114 | 4,614 | 4,982 | 276 | |||||||||||||||||
Total impaired loans: | |||||||||||||||||||||||
One-to-four family | 3,144 | 3,448 | 38 | 3,116 | 3,424 | 35 | |||||||||||||||||
Multi-family | 110 | 110 | 1 | 110 | 110 | 1 | |||||||||||||||||
Commercial real estate | 1,953 | 2,021 | 9 | 1,972 | 2,037 | 8 | |||||||||||||||||
Construction and land | 69 | 102 | 1 | 44 | 72 | 1 | |||||||||||||||||
Home equity | 608 | 822 | 4 | 627 | 842 | 6 | |||||||||||||||||
Auto and other consumer | 218 | 524 | 54 | 244 | 520 | 59 | |||||||||||||||||
Commercial business | 305 | 305 | 7 | 445 | 448 | 166 | |||||||||||||||||
Total | $ | 6,407 | $ | 7,332 | $ | 114 | $ | 6,558 | $ | 7,453 | $ | 276 |
Three Months Ended | Three Months Ended | ||||||||||||||
March 31, 2019 | March 31, 2018 | ||||||||||||||
Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | ||||||||||||
(In thousands) | |||||||||||||||
With no allowance recorded: | |||||||||||||||
One-to-four family | $ | 304 | $ | 5 | $ | 408 | $ | 8 | |||||||
Commercial real estate | 1,296 | 12 | 2,389 | 27 | |||||||||||
Construction and land | — | — | 2,487 | 68 | |||||||||||
Home equity | 324 | 10 | 361 | 4 | |||||||||||
Auto and other consumer | — | 7 | — | 5 | |||||||||||
Total | 1,924 | 34 | 5,645 | 112 | |||||||||||
With an allowance recorded: | |||||||||||||||
One-to-four family | 2,831 | 68 | 3,381 | 66 | |||||||||||
Multi-family | 110 | 1 | 114 | 1 | |||||||||||
Commercial real estate | 663 | 7 | 795 | 10 | |||||||||||
Construction and land | 53 | 2 | 51 | 3 | |||||||||||
Home equity | 300 | 7 | 286 | 6 | |||||||||||
Auto and other consumer | 263 | 7 | 101 | 2 | |||||||||||
Commercial business | 328 | 5 | 675 | 3 | |||||||||||
Total | 4,548 | 97 | 5,403 | 91 | |||||||||||
Total impaired loans: | |||||||||||||||
One-to-four family | 3,135 | 73 | 3,789 | 74 | |||||||||||
Multi-family | 110 | 1 | 114 | 1 | |||||||||||
Commercial real estate | 1,959 | 19 | 3,184 | 37 | |||||||||||
Construction and land | 53 | 2 | 2,538 | 71 | |||||||||||
Home equity | 624 | 17 | 647 | 10 | |||||||||||
Auto and other consumer | 263 | 14 | 101 | 7 | |||||||||||
Commercial business | 328 | 5 | 675 | 3 | |||||||||||
Total | $ | 6,472 | $ | 131 | $ | 11,048 | $ | 203 |
March 31, 2019 | December 31, 2018 | ||||||
(In thousands) | |||||||
One-to-four family | $ | 803 | $ | 759 | |||
Commercial real estate | 129 | 133 | |||||
Construction and land | 69 | 44 | |||||
Home equity | 352 | 369 | |||||
Auto and other consumer | 218 | 245 | |||||
Commercial business | 35 | 173 | |||||
Total nonaccrual loans | $ | 1,606 | $ | 1,723 | |||
30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due | Total Past Due | Current | Total Loans | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||
One-to-four family | $ | 625 | $ | 50 | $ | 100 | $ | 775 | $ | 337,894 | $ | 338,669 | |||||||||||
Multi-family | — | — | — | — | 81,576 | 81,576 | |||||||||||||||||
Commercial real estate | — | — | — | — | 250,521 | 250,521 | |||||||||||||||||
Construction and land | 48 | — | 66 | 114 | 63,422 | 63,536 | |||||||||||||||||
Total real estate loans | 673 | 50 | 166 | 889 | 733,413 | 734,302 | |||||||||||||||||
Consumer: | |||||||||||||||||||||||
Home equity | 149 | — | — | 149 | 36,909 | 37,058 | |||||||||||||||||
Auto and other consumer | 578 | 230 | 11 | 819 | 98,251 | 99,070 | |||||||||||||||||
Total consumer loans | 727 | 230 | 11 | 968 | 135,160 | 136,128 | |||||||||||||||||
Commercial business loans | — | — | 35 | 35 | 18,461 | 18,496 | |||||||||||||||||
Total loans | $ | 1,400 | $ | 280 | $ | 212 | $ | 1,892 | $ | 887,034 | $ | 888,926 |
30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due | Total Past Due | Current | Total Loans | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||
One-to-four family | $ | 289 | $ | 176 | $ | 164 | $ | 629 | $ | 335,549 | $ | 336,178 | |||||||||||
Multi-family | — | — | — | — | 82,331 | 82,331 | |||||||||||||||||
Commercial real estate | — | — | — | — | 253,235 | 253,235 | |||||||||||||||||
Construction and land | 35 | 14 | 31 | 80 | 54,022 | 54,102 | |||||||||||||||||
Total real estate loans | 324 | 190 | 195 | 709 | 725,137 | 725,846 | |||||||||||||||||
Consumer: | |||||||||||||||||||||||
Home equity | 97 | 30 | 9 | 136 | 37,493 | 37,629 | |||||||||||||||||
Auto and other consumer | 471 | 92 | — | 563 | 86,794 | 87,357 | |||||||||||||||||
Total consumer loans | 568 | 122 | 9 | 699 | 124,287 | 124,986 | |||||||||||||||||
Commercial business loans | 923 | — | — | 923 | 17,975 | 18,898 | |||||||||||||||||
Total loans | $ | 1,815 | $ | 312 | $ | 204 | $ | 2,331 | $ | 867,399 | $ | 869,730 |
Pass | Watch | Special Mention | Substandard | Total | |||||||||||||||
(In thousands) | |||||||||||||||||||
Real Estate: | |||||||||||||||||||
One-to-four family | $ | 332,957 | $ | 3,779 | $ | 666 | $ | 1,267 | $ | 338,669 | |||||||||
Multi-family | 77,470 | 3,996 | 110 | — | 81,576 | ||||||||||||||
Commercial real estate | 236,666 | 9,630 | 2,872 | 1,353 | 250,521 | ||||||||||||||
Construction and land | 63,116 | 351 | — | 69 | 63,536 | ||||||||||||||
Total real estate loans | 710,209 | 17,756 | 3,648 | 2,689 | 734,302 | ||||||||||||||
Consumer: | |||||||||||||||||||
Home equity | 35,955 | 540 | 82 | 481 | 37,058 | ||||||||||||||
Auto and other consumer | 96,928 | 1,571 | 319 | 252 | 99,070 | ||||||||||||||
Total consumer loans | 132,883 | 2,111 | 401 | 733 | 136,128 | ||||||||||||||
Commercial business loans | 15,669 | 1,096 | 1,696 | 35 | 18,496 | ||||||||||||||
Total loans | $ | 858,761 | $ | 20,963 | $ | 5,745 | $ | 3,457 | $ | 888,926 |
Pass | Watch | Special Mention | Substandard | Total | |||||||||||||||
(In thousands) | |||||||||||||||||||
Real Estate: | |||||||||||||||||||
One-to-four family | $ | 330,476 | $ | 3,767 | $ | 957 | $ | 978 | $ | 336,178 | |||||||||
Multi-family | 82,221 | — | 110 | — | 82,331 | ||||||||||||||
Commercial real estate | 244,919 | 6,281 | 663 | 1,372 | 253,235 | ||||||||||||||
Construction and land | 51,480 | 2,578 | — | 44 | 54,102 | ||||||||||||||
Total real estate loans | 709,096 | 12,626 | 1,730 | 2,394 | 725,846 | ||||||||||||||
Consumer: | |||||||||||||||||||
Home equity | 36,559 | 465 | 123 | 482 | 37,629 | ||||||||||||||
Auto and other consumer | 85,579 | 1,310 | 151 | 317 | 87,357 | ||||||||||||||
Total consumer loans | 122,138 | 1,775 | 274 | 799 | 124,986 | ||||||||||||||
Commercial business loans | 16,520 | 1,733 | 472 | 173 | 18,898 | ||||||||||||||
Total loans | $ | 847,754 | $ | 16,134 | $ | 2,476 | $ | 3,366 | $ | 869,730 |
Nonperforming | Performing | Total | |||||||||
(In thousands) | |||||||||||
Real Estate: | |||||||||||
One-to-four family | $ | 803 | $ | 337,866 | $ | 338,669 | |||||
Multi-family | — | 81,576 | 81,576 | ||||||||
Commercial real estate | 129 | 250,392 | 250,521 | ||||||||
Construction and land | 69 | 63,467 | 63,536 | ||||||||
Consumer: | |||||||||||
Home equity | 352 | 36,706 | 37,058 | ||||||||
Auto and other consumer | 218 | 98,852 | 99,070 | ||||||||
Commercial business | 35 | 18,461 | 18,496 | ||||||||
Total loans | $ | 1,606 | $ | 887,320 | $ | 888,926 |
Nonperforming | Performing | Total | |||||||||
(In thousands) | |||||||||||
Real Estate: | |||||||||||
One-to-four family | $ | 759 | $ | 335,419 | $ | 336,178 | |||||
Multi-family | — | 82,331 | 82,331 | ||||||||
Commercial real estate | 133 | 253,102 | 253,235 | ||||||||
Construction and land | 44 | 54,058 | 54,102 | ||||||||
Consumer: | |||||||||||
Home equity | 369 | 37,260 | 37,629 | ||||||||
Auto and other consumer | 245 | 87,112 | 87,357 | ||||||||
Commercial business | 173 | 18,725 | 18,898 | ||||||||
Total loans | $ | 1,723 | $ | 868,007 | $ | 869,730 |
March 31, 2019 | December 31, 2018 | ||||||
(In thousands) | |||||||
Total TDR loans | $ | 3,722 | $ | 3,745 | |||
Allowance for loan losses related to TDR loans | 46 | 43 | |||||
Total nonaccrual TDR loans | 83 | 84 |
Number of Contracts | Rate Modification | Term Modification | Combination Modification | Total Modifications | ||||||||||||||
(Dollars in thousands) | ||||||||||||||||||
TDR loans that subsequently defaulted | ||||||||||||||||||
One- to four-family | 1 | $ | — | $ | — | $ | 48 | $ | 48 |
Number of Contracts | Rate Modification | Term Modification | Combination Modification | Total Modifications | ||||||||||||||
(Dollars in thousands) | ||||||||||||||||||
Pre-modification outstanding recorded investment | ||||||||||||||||||
One- to four-family | 2 | $ | — | $ | — | $ | 180 | $ | 180 | |||||||||
2 | — | — | 180 | 180 | ||||||||||||||
Post-modification outstanding recorded investment | ||||||||||||||||||
One- to four-family | 2 | $ | — | $ | — | $ | 179 | $ | 179 | |||||||||
2 | $ | — | $ | — | $ | 179 | $ | 179 |
March 31, 2019 | December 31, 2018 | ||||||||||||||||||||||
Accrual | Nonaccrual | Total | Accrual | Nonaccrual | Total | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
One-to-four family | $ | 2,342 | $ | 83 | $ | 2,425 | $ | 2,358 | $ | 84 | $ | 2,442 | |||||||||||
Multi-family | 110 | — | 110 | 110 | — | 110 | |||||||||||||||||
Commercial real estate | 661 | — | 661 | 663 | — | 663 | |||||||||||||||||
Home equity | 256 | — | 256 | 258 | — | 258 | |||||||||||||||||
Commercial business | 270 | — | 270 | 272 | — | 272 | |||||||||||||||||
Total TDR loans | $ | 3,639 | $ | 83 | $ | 3,722 | $ | 3,661 | $ | 84 | $ | 3,745 |
March 31, 2019 | December 31, 2018 | ||||||||||
Amount | Weighted-Average Interest Rate | Amount | Weighted-Average Interest Rate | ||||||||
(Dollars in thousands) | |||||||||||
Savings | $ | 163,292 | 0.89% | $ | 143,412 | 0.74% | |||||
Transaction accounts | 268,718 | 0.05% | 262,152 | 0.05% | |||||||
Money market accounts | 265,713 | 0.42% | 273,344 | 0.43% | |||||||
Certificates of deposit | 255,032 | 2.05% | 261,352 | 1.86% | |||||||
$ | 952,755 | 0.83% | $ | 940,260 | 0.77% | ||||||
March 31, 2019 | December 31, 2018 | ||||||
(In thousands) | |||||||
Within one year or less | $ | 149,202 | $ | 148,119 | |||
After one year through two years | 76,209 | 78,966 | |||||
After two years through three years | 16,595 | 20,934 | |||||
After three years through four years | 5,132 | 6,759 | |||||
After four years through five years | 7,894 | 6,574 | |||||
After five years | — | — | |||||
$ | 255,032 | $ | 261,352 |
Three Months Ended | |||||||
March 31, | |||||||
2019 | 2018 | ||||||
(In thousands) | |||||||
Savings | $ | 316 | $ | 16 | |||
Transaction accounts | 36 | 4 | |||||
Insured money market accounts | 320 | 215 | |||||
Certificates of deposit | 1,252 | 750 | |||||
$ | 1,924 | $ | 985 |
Three Months Ended | |||||||
March 31, | |||||||
2019 | 2018 | ||||||
(In thousands, except share data) | |||||||
Numerator: | |||||||
Net income | $ | 2,207 | $ | 1,523 | |||
Denominator: | |||||||
Basic weighted average common shares outstanding | 9,973,125 | 10,491,647 | |||||
Dilutive restricted stock grants | 77,143 | 113,009 | |||||
Diluted weighted average common shares outstanding | 10,050,268 | 10,604,656 | |||||
Basic earnings per share | $ | 0.22 | $ | 0.15 | |||
Diluted earnings per share | $ | 0.22 | $ | 0.14 | |||
March 31, 2019 | December 31, 2018 | ||||||
(Dollars in thousands) | |||||||
Allocated shares | 174,584 | 174,584 | |||||
Committed to be released shares | 39,663 | 26,442 | |||||
Unallocated shares | 833,782 | 847,003 | |||||
Total ESOP shares issued | 1,048,029 | 1,048,029 | |||||
Fair value of unallocated shares | $ | 12,982 | $ | 12,561 | |||
For the Three Months Ended | ||||||
March 31, 2019 | ||||||
Shares | Weighted-Average Grant Date Fair Value | |||||
Non-vested at January 1, 2019 | 290,600 | $ | 13.72 | |||
Granted | — | — | ||||
Vested | — | — | ||||
Non-vested at March 31, 2019 | 290,600 | 13.72 | ||||
March 31, 2019 | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets or Liabilities | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
(In thousands) | |||||||||||||||
Securities available-for-sale | |||||||||||||||
Municipal bonds | $ | — | $ | 912 | $ | — | $ | 912 | |||||||
ABS agency | — | 25,719 | — | 25,719 | |||||||||||
ABS corporate | — | 37,074 | — | 37,074 | |||||||||||
Corporate debt | — | 9,494 | — | 9,494 | |||||||||||
SBA | — | 33,396 | — | 33,396 | |||||||||||
MBS agency | — | 141,527 | — | 141,527 | |||||||||||
MBS corporate | — | 10,354 | — | 10,354 | |||||||||||
$ | — | $ | 258,476 | $ | — | $ | 258,476 | ||||||||
December 31, 2018 | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets or Liabilities | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
(In thousands) | |||||||||||||||
Securities available-for-sale | |||||||||||||||
Municipal bonds | $ | — | $ | 869 | $ | — | $ | 869 | |||||||
ABS agency | — | 25,752 | — | 25,752 | |||||||||||
ABS corporate | — | 36,723 | — | 36,723 | |||||||||||
Corporate debt | — | 9,888 | — | 9,888 | |||||||||||
SBA | — | 35,670 | — | 35,670 | |||||||||||
MBS agency | — | 143,455 | — | 143,455 | |||||||||||
MBS corporate | — | 10,610 | — | 10,610 | |||||||||||
$ | — | $ | 262,967 | $ | — | $ | 262,967 |
March 31, 2019 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(In thousands) | |||||||||||||||
Impaired loans | $ | — | $ | — | $ | 6,407 | $ | 6,407 | |||||||
December 31, 2018 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(In thousands) | |||||||||||||||
Impaired loans | $ | — | $ | — | $ | 6,558 | $ | 6,558 |
March 31, 2019 | |||||||||||||||||||
Carrying Amount | Estimated Fair Value | Fair Value Measurements Using: | |||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||||
(In thousands) | |||||||||||||||||||
Financial assets | |||||||||||||||||||
Cash and cash equivalents | $ | 27,657 | $ | 27,657 | $ | 27,657 | $ | — | $ | — | |||||||||
Investment securities available for sale | 258,476 | 258,476 | — | 258,476 | — | ||||||||||||||
Investment securities held to maturity | 43,024 | 42,550 | — | 42,550 | — | ||||||||||||||
Loans held for sale | 969 | 940 | — | 940 | — | ||||||||||||||
Loans receivable, net | 883,195 | 861,865 | — | — | 861,865 | ||||||||||||||
FHLB stock | 6,927 | 6,927 | — | 6,927 | — | ||||||||||||||
Accrued interest receivable | 4,114 | 4,114 | — | 4,114 | — | ||||||||||||||
Mortgage servicing rights, net | 1,001 | 1,748 | — | — | 1,748 | ||||||||||||||
Financial liabilities | |||||||||||||||||||
Demand deposits | $ | 697,723 | $ | 697,723 | $ | 697,723 | $ | — | $ | — | |||||||||
Time deposits | 255,032 | 254,190 | — | 254,190 | — | ||||||||||||||
Borrowings | 135,174 | 135,849 | — | 135,849 | — | ||||||||||||||
Accrued interest payable | 279 | 279 | — | 279 | — |
December 31, 2018 | |||||||||||||||||||
Carrying Amount | Estimated Fair Value | Fair Value Measurements Using: | |||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||||
(In thousands) | |||||||||||||||||||
Financial assets | |||||||||||||||||||
Cash and cash equivalents | $ | 26,323 | $ | 26,323 | $ | 26,323 | $ | — | $ | — | |||||||||
Investment securities available for sale | 262,967 | 262,967 | — | 262,967 | — | ||||||||||||||
Investment securities held to maturity | 43,503 | 42,990 | — | 42,990 | — | ||||||||||||||
Loans receivable, net | 863,852 | 840,861 | — | — | 840,861 | ||||||||||||||
FHLB stock | 6,927 | 6,927 | — | 6,927 | — | ||||||||||||||
Accrued interest receivable | 4,048 | 4,048 | — | 4,048 | — | ||||||||||||||
Mortgage servicing rights, net | 1,044 | 1,479 | — | — | 1,479 | ||||||||||||||
Financial liabilities | |||||||||||||||||||
Demand deposits | $ | 678,908 | $ | 678,908 | $ | 678,908 | $ | — | $ | — | |||||||||
Time deposits | 261,352 | 259,549 | — | 259,549 | — | ||||||||||||||
Borrowings | 136,552 | 137,153 | — | 137,153 | — | ||||||||||||||
Accrued interest payable | 521 | 521 | — | 521 | — |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
(In thousands) | |||||||
Noninterest income: | |||||||
Loan fees (1) | $ | 239 | $ | 125 | |||
Deposit fees | 447 | 392 | |||||
Debit interchange income | 22 | 32 | |||||
Credit card interchange income | 402 | 406 | |||||
Investment securities gain (loss), net (1) | — | 122 | |||||
Gain on loan sales, net (1) | 87 | 167 | |||||
Increase in cash surrender value of BOLI (1) | 143 | 149 | |||||
Other income: | |||||||
Investment services revenue | 48 | 74 | |||||
Gain or loss on subsidiary (1) | 14 | 14 | |||||
Remaining other income | 9 | 1 | |||||
Total other income | 71 | 89 | |||||
Total noninterest income | $ | 1,411 | $ | 1,482 | |||
(1) Not within scope of Topic 606 |
• | statements of our goals, intentions and expectations; |
• | statements regarding our business plans, prospects, growth and operating strategies; |
• | statements regarding the quality of our loan and investment portfolios; and |
• | estimates of our risks and future costs and benefits. |
• | changes in general economic conditions, either nationally or in our market area, that are worse than expected; |
• | the credit risks of our lending activities, including changes in the level and trend of loan delinquencies and write-offs and changes in our allowance for loan losses and provision for loan losses that may be impacted by deterioration in the housing and commercial real estate markets; |
• | fluctuations in the demand for loans, the number of unsold homes, land and other properties and fluctuations in real estate values in our market area; |
• | a decrease in the secondary market demand for loans that we originate for sale; |
• | management’s assumptions in determining the adequacy of the allowance for loan losses; |
• | our ability to control operating costs and expenses; |
• | whether our management team can implement our operational strategy, including but not limited to our loan growth; |
• | our ability to successfully execute on merger and/or acquisition strategies and integrate any newly acquired assets, liabilities, customers, systems, and management personnel into our operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; |
• | staffing needs and associated expenses in response to product demand or the implementation of corporate strategies, including our growth strategies related to the home lending center and new branches; |
• | the use of estimates in determining fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; |
• | changes in the levels of general interest rates, and the relative differences between short and long-term interest rates, deposit interest rates, our net interest margin and funding sources; |
• | increased competitive pressures among financial services companies; |
• | our ability to attract and retain deposits; |
• | our ability to retain key members of our senior management team; |
• | changes in consumer spending, borrowing and savings habits; |
• | our ability to successfully manage our growth in compliance with regulatory requirements; |
• | results of examinations of us by the Washington State Department of Financial Institutions, Department of Banks, the Federal Deposit Insurance Corporation, the Federal Reserve Bank of San Francisco, or other regulatory authorities, which could result in restrictions that may adversely affect our liquidity and earnings; |
• | changes in accounting policies and practices, as may be adopted by the financial institutions regulatory agencies, the Public Company Accounting Oversight Board or the Financial Accounting Standards Board; |
• | disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform several of our critical processing functions; |
• | inability of key third-party vendors to perform their obligations to us; and |
• | other economic, competitive, governmental, regulatory and technical factors affecting our operations, pricing, products and services and other risks described elsewhere in our filings with the Securities and Exchange Commission, including this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2018. |
March 31, 2019 | North Olympic Peninsula (1) | Puget Sound Region (2) | Other Washington | Total | ||||||||||||
(In thousands) | ||||||||||||||||
Construction Commitment | ||||||||||||||||
One- to four-family residential | $ | 14,530 | $ | 15,383 | $ | 406 | $ | 30,319 | ||||||||
Multi-family residential | — | 44,852 | — | 44,852 | ||||||||||||
Commercial real estate | 2,296 | 20,518 | — | 22,814 | ||||||||||||
Total commitment | $ | 16,826 | $ | 80,753 | $ | 406 | $ | 97,985 | ||||||||
Construction Funds Disbursed | ||||||||||||||||
One- to four-family residential | $ | 6,853 | $ | 6,853 | $ | — | $ | 13,706 | ||||||||
Multi-family residential | — | 26,540 | — | 26,540 | ||||||||||||
Commercial real estate | 2,025 | 13,387 | — | 15,412 | ||||||||||||
Total disbursed | $ | 8,878 | $ | 46,780 | $ | — | $ | 55,658 | ||||||||
Undisbursed Commitment | ||||||||||||||||
One- to four-family residential | $ | 7,677 | $ | 8,530 | $ | 406 | $ | 16,613 | ||||||||
Multi-family residential | — | 18,312 | — | 18,312 | ||||||||||||
Commercial real estate | 271 | 7,131 | — | 7,402 | ||||||||||||
Total undisbursed | $ | 7,948 | $ | 33,973 | $ | 406 | $ | 42,327 | ||||||||
Land Funds Disbursed | ||||||||||||||||
One- to four-family residential | $ | 5,446 | $ | 2,152 | $ | — | $ | 7,598 | ||||||||
Commercial real estate | — | 280 | — | 280 | ||||||||||||
Total disbursed for land | $ | 5,446 | $ | 2,432 | $ | — | $ | 7,878 | ||||||||
(1) Includes Clallam and Jefferson counties. | ||||||||||||||||
(2) Includes Kitsap, Mason, Thurston, Pierce, King, Snohomish, Skagit, Whatcom, and Island counties. |
December 31, 2018 | North Olympic Peninsula | Puget Sound Region | Other Washington | Total | ||||||||||||
(In thousands) | ||||||||||||||||
Construction Commitment | ||||||||||||||||
One- to four-family residential | $ | 16,814 | $ | 18,550 | $ | — | $ | 35,364 | ||||||||
Multi-family residential | — | 45,313 | — | 45,313 | ||||||||||||
Commercial real estate | 1,868 | 20,147 | — | 22,015 | ||||||||||||
Total Commitment | $ | 18,682 | $ | 84,010 | $ | — | $ | 102,692 | ||||||||
Construction Funds Disbursed | ||||||||||||||||
One- to four-family residential | $ | 8,321 | $ | 8,998 | $ | — | $ | 17,319 | ||||||||
Multi-family residential | — | 17,348 | — | 17,348 | ||||||||||||
Commercial real estate | 1,584 | 9,424 | — | 11,008 | ||||||||||||
Total disbursed | $ | 9,905 | $ | 35,770 | $ | — | $ | 45,675 | ||||||||
Undisbursed Commitment | ||||||||||||||||
One- to four-family residential | $ | 8,493 | $ | 9,552 | $ | — | $ | 18,045 | ||||||||
Multi-family residential | — | 27,965 | — | 27,965 | ||||||||||||
Commercial real estate | 284 | 10,723 | — | 11,007 | ||||||||||||
Total undisbursed | $ | 8,777 | $ | 48,240 | $ | — | $ | 57,017 | ||||||||
Land Funds Disbursed | ||||||||||||||||
One- to four-family residential | $ | 6,124 | $ | 2,023 | $ | — | $ | 8,147 | ||||||||
Commercial real estate | — | 280 | — | 280 | ||||||||||||
Total disbursed for land | $ | 6,124 | $ | 2,303 | $ | — | $ | 8,427 |
March 31, 2019 | December 31, 2018 | ||||||
(In thousands) | |||||||
Real Estate: | |||||||
One-to-four family | $ | 338,669 | $ | 336,178 | |||
Multi-family | 81,576 | 82,331 | |||||
Commercial real estate | 250,521 | 253,235 | |||||
Construction and land | 63,536 | 54,102 | |||||
Total real estate loans | 734,302 | 725,846 | |||||
Consumer: | |||||||
Home equity | 37,058 | 37,629 | |||||
Auto and other consumer | 99,070 | 87,357 | |||||
Total consumer loans | 136,128 | 124,986 | |||||
Commercial business loans | 18,496 | 18,898 | |||||
Total loans | 888,926 | 869,730 | |||||
Less: | |||||||
Net deferred loan fees | 285 | 299 | |||||
Premium on purchased loans, net | (4,313 | ) | (3,954 | ) | |||
Allowance for loan losses | 9,759 | 9,533 | |||||
Loans receivable, net | $ | 883,195 | $ | 863,852 |
March 31, 2019 | December 31, 2018 | ||||||
(In thousands) | |||||||
Nonperforming loans: | |||||||
Real estate loans: | |||||||
One- to four-family | $ | 803 | $ | 759 | |||
Commercial real estate | 129 | 133 | |||||
Construction and land | 69 | 44 | |||||
Total real estate loans | 1,001 | 936 | |||||
Consumer loans: | |||||||
Home equity | 352 | 369 | |||||
Other | 218 | 245 | |||||
Total consumer loans | 570 | 614 | |||||
Commercial business | 35 | 173 | |||||
Total nonperforming loans | 1,606 | 1,723 | |||||
Real estate owned: | |||||||
Land | 72 | 72 | |||||
Total real estate owned | 72 | 72 | |||||
Repossessed assets | 51 | 52 | |||||
Total nonperforming assets | $ | 1,729 | $ | 1,847 | |||
Nonaccrual and 90 days or more past due loans as a percentage of total loans | 0.2 | % | 0.2 | % |
Three Months Ended March 31, | |||||||||||||||
2019 | 2018 | Increase (Decrease) in Interest Income | |||||||||||||
Average Balance Outstanding | Yield | Average Balance Outstanding | Yield | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Loans receivable, net | $ | 870,901 | 4.56% | $ | 788,736 | 4.35% | $ | 1,349 | |||||||
Investment securities | 120,350 | 3.36 | 132,484 | 2.60 | 148 | ||||||||||
Mortgage-backed securities | 183,716 | 2.74 | 198,904 | 2.61 | (40 | ) | |||||||||
FHLB stock | 6,844 | 5.14 | 7,232 | 3.26 | 29 | ||||||||||
Interest-bearing deposits in banks | 11,873 | 2.26 | 11,136 | 1.62 | 22 | ||||||||||
Total interest-earning assets | $ | 1,193,684 | 4.14 | $ | 1,138,492 | 3.81 | $ | 1,508 |
Three Months Ended March 31, | |||||||||||||||
2019 | 2018 | Increase (Decrease) in Interest Expense | |||||||||||||
Average Balance Outstanding | Rate | Average Balance Outstanding | Rate | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Savings accounts | $ | 153,689 | 0.82% | $ | 108,153 | 0.06% | $ | 300 | |||||||
Transaction accounts | 114,801 | 0.13 | 114,984 | 0.01 | 32 | ||||||||||
Money market accounts | 267,947 | 0.48 | 268,792 | 0.32 | 105 | ||||||||||
Certificates of deposit | 258,272 | 1.94 | 240,159 | 1.25 | 502 | ||||||||||
Borrowings | 134,447 | 2.95 | 149,125 | 2.38 | 101 | ||||||||||
Total interest-bearing liabilities | $ | 929,156 | 1.25 | $ | 881,213 | 0.85 | $ | 1,040 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
(Dollars in thousands) | |||||||
Provision for loan losses | $ | 335 | $ | 310 | |||
Net recoveries | (109 | ) | (86 | ) | |||
Allowance for loan losses | 9,759 | 8,984 | |||||
Allowance for losses as a percentage of total gross loans receivable at the end of this period | 1.1 | % | 1.1 | % | |||
Total nonaccruing loans | 1,606 | 2,173 | |||||
Allowance for loan losses as a percentage of nonaccrual loans at end of period | 607.7 | % | 413.4 | % | |||
Nonaccrual and 90 days or more past due loans as a percentage of total loans | 0.2 | % | 0.3 | % | |||
Total loans | $ | 888,926 | $ | 805,953 |
Three Months Ended March 31, | Increase (Decrease) | |||||||||||||
2019 | 2018 | Amount | Percent | |||||||||||
(Dollars in thousands) | ||||||||||||||
Loan and deposit service fees | $ | 1,065 | $ | 893 | $ | 172 | 19.3 | % | ||||||
Mortgage servicing fees, net of amortization | 45 | 62 | (17 | ) | (27.4 | ) | ||||||||
Net gain on sale of loans | 87 | 167 | (80 | ) | (47.9 | ) | ||||||||
Net gain on sale of investment securities | — | 122 | (122 | ) | (100.0 | ) | ||||||||
Increase in cash surrender value of bank-owned life insurance | 143 | 149 | (6 | ) | (4.0 | ) | ||||||||
Other income | 71 | 89 | (18 | ) | (20.2 | ) | ||||||||
Total noninterest income | $ | 1,411 | $ | 1,482 | $ | (71 | ) | (4.8 | )% |
Three Months Ended March 31, | Increase (Decrease) | |||||||||||||
2019 | 2018 | Amount | Percent | |||||||||||
(Dollars in thousands) | ||||||||||||||
Compensation and benefits | $ | 4,573 | $ | 4,811 | $ | (238 | ) | (4.9 | )% | |||||
Data processing | 631 | 628 | 3 | 0.5 | ||||||||||
Occupancy and equipment | 1,108 | 1,102 | 6 | 0.5 | ||||||||||
Supplies, postage, and telephone | 228 | 231 | (3 | ) | (1.3 | ) | ||||||||
Regulatory assessments and state taxes | 169 | 126 | 43 | 34.1 | ||||||||||
Advertising | 143 | 324 | (181 | ) | (55.9 | ) | ||||||||
Professional fees | 298 | 322 | (24 | ) | (7.5 | ) | ||||||||
FDIC insurance premium | 77 | 76 | 1 | 1.3 | ||||||||||
Other | 573 | 655 | (82 | ) | (12.5 | ) | ||||||||
Total | $ | 7,800 | $ | 8,275 | $ | (475 | ) | (5.7 | )% |
At March 31, 2019 | Three Months Ended March 31, | |||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||||
Yield/ Rate | Average Balance Outstanding | Interest Earned/ Paid | Yield/ Rate | Average Balance Outstanding | Interest Earned/ Paid | Yield/ Rate | ||||||||||||||||||
Interest-earning assets: | (Dollars in thousands) | |||||||||||||||||||||||
Loans receivable, net (1) | 4.60 | % | $ | 870,901 | $ | 9,932 | 4.56 | % | $ | 788,736 | $ | 8,583 | 4.35 | % | ||||||||||
Investment securities | 4.40 | 120,350 | 1,010 | 3.36 | 132,484 | 862 | 2.60 | |||||||||||||||||
Mortgage-backed securities | 2.7 | 183,716 | 1,257 | 2.74 | 198,904 | 1,297 | 2.61 | |||||||||||||||||
FHLB dividends | 5.21 | 6,844 | 88 | 5.14 | 7,232 | 59 | 3.26 | |||||||||||||||||
Interest-bearing deposits in banks | 1.82 | 11,873 | 67 | 2.26 | 11,136 | 45 | 1.62 | |||||||||||||||||
Total interest-earning assets (2) | 4.24 | 1,193,684 | 12,354 | 4.14 | 1,138,492 | 10,846 | 3.81 | |||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Savings accounts | 0.89 | $ | 153,689 | $ | 316 | 0.82 | $ | 108,153 | 16 | 0.06 | ||||||||||||||
Transaction accounts | 0.05 | 114,801 | 36 | 0.13 | 114,984 | 4 | 0.01 | |||||||||||||||||
Money market accounts | 0.42 | 267,947 | 320 | 0.48 | 268,792 | 215 | 0.32 | |||||||||||||||||
Certificates of deposit | 2.05 | 258,272 | 1,252 | 1.94 | 240,159 | 750 | 1.25 | |||||||||||||||||
Total deposits | 0.83 | 794,709 | 1,924 | 0.97 | 732,088 | 985 | 0.54 | |||||||||||||||||
Borrowings | 2.88 | 134,447 | 990 | 2.95 | 149,125 | 889 | 2.38 | |||||||||||||||||
Total interest-bearing liabilities | 1.08 | 929,156 | 2,914 | 1.25 | 881,213 | 1,874 | 0.85 | |||||||||||||||||
Net interest income | $ | 9,440 | $ | 8,972 | ||||||||||||||||||||
Net interest rate spread | 3.16 | 2.89 | 2.96 | |||||||||||||||||||||
Net earning assets | $ | 264,528 | $ | 257,279 | ||||||||||||||||||||
Net interest margin (3) | 3.16 | 3.15 | ||||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 128.5 | % | 129.2 | % | ||||||||||||||||||||
(1) The average loans receivable, net balances include nonaccruing loans. (2) Includes interest-bearing deposits (cash) at other financial institutions. (3) Net interest income divided by average interest-earning assets. |
Three Months Ended | |||||||||||
March 31, 2019 vs. 2018 | |||||||||||
Increase (Decrease) Due to | Total Increase (Decrease) | ||||||||||
Volume | Rate | ||||||||||
(In thousands) | |||||||||||
Interest earning assets: | |||||||||||
Loans receivable, net | $ | 893 | $ | 456 | $ | 1,349 | |||||
Investments | (180 | ) | 288 | 108 | |||||||
FHLB stock | (3 | ) | 32 | 29 | |||||||
Other(1) | 3 | 19 | 22 | ||||||||
Total interest-earning assets | $ | 713 | $ | 795 | $ | 1,508 | |||||
Interest-bearing liabilities: | |||||||||||
Savings accounts | $ | 7 | $ | 293 | $ | 300 | |||||
Interest-bearing transaction accounts | — | 32 | 32 | ||||||||
Money market accounts | (1 | ) | 106 | 105 | |||||||
Certificates of deposit | 57 | 445 | 502 | ||||||||
Borrowings | (89 | ) | 190 | 101 | |||||||
Total interest-bearing liabilities | $ | (26 | ) | $ | 1,066 | $ | 1,040 | ||||
Net change in interest income | $ | 739 | $ | (271 | ) | $ | 468 | ||||
(1) Includes interest-bearing deposits (cash) at other financial institutions. |
Within 1 Year | After 1 Year Through 3 Years | After 3 Years Through 5 Years | Beyond 5 Years | Total Balance | |||||||||||||||
(In thousands) | |||||||||||||||||||
Certificates of deposit | $ | 149,202 | $ | 92,804 | $ | 13,026 | $ | — | $ | 255,032 | |||||||||
FHLB advances | 95,174 | 40,000 | — | — | 135,174 | ||||||||||||||
Operating leases | 318 | 569 | 435 | 1,870 | 3,192 | ||||||||||||||
Borrower taxes and insurance | 2,154 | — | — | — | 2,154 | ||||||||||||||
Deferred compensation | 25 | 22 | 59 | 791 | 897 | ||||||||||||||
Total contractual obligations | $ | 246,873 | $ | 133,395 | $ | 13,520 | $ | 2,661 | $ | 396,449 |
Amount of Commitment Expiration | |||||||||||||||||||
Within 1 Year | After 1 Year Through 3 Years | After 3 Years Through 5 Years | Beyond 5 Years | Total Amounts Committed | |||||||||||||||
(In thousands) | |||||||||||||||||||
Commitments to originate loans: | |||||||||||||||||||
Fixed-rate | $ | 365 | $ | — | $ | — | $ | — | $ | 365 | |||||||||
Adjustable-rate | 200 | — | — | — | 200 | ||||||||||||||
Unfunded commitments under lines of credit or existing loans | 728 | 29,218 | 4,009 | 49,999 | 83,954 | ||||||||||||||
Standby letters of credit | — | 199 | — | — | 199 | ||||||||||||||
Total commitments | $ | 1,293 | $ | 29,417 | $ | 4,009 | $ | 49,999 | $ | 84,718 |
Actual | Minimum Capital Requirements | Minimum Required to be Well-Capitalized | ||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Tier I leverage capital (to average assets) | $ | 143,736 | 11.4 | % | $ | 50,247 | 4.0 | % | $ | 62,809 | 5.0 | % | ||||||||
Common equity tier I (to risk-weighted assets) | 143,736 | 16.9 | 38,332 | 4.5 | 55,368 | 6.5 | ||||||||||||||
Tier I risk-based capital (to risk-weighted assets) | 143,736 | 16.9 | 51,109 | 6.0 | 68,145 | 8.0 | ||||||||||||||
Total risk-based capital (to risk-weighted assets) | 153,693 | 18.0 | 68,145 | 8.0 | 85,181 | 10.0 |
(a) | Not applicable. |
(b) | Not applicable. |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Repurchased as Part of Publicly Announced Plans | Maximum Number of Shares that May Yet Be Repurchased Under the Plans | |||||||||
January 1, 2019 - January 31, 2019 | (663,613 | ) | $ | — | (663,613 | ) | 1,166,659 | ||||||
February 1, 2019 - February 28, 2019 | 796,950 | 16.06 | 796,950 | 369,709 | |||||||||
March 1, 2019 - March 31, 2019 | 44,500 | 16.00 | 44,500 | 325,209 | |||||||||
Total | 177,837 | $ | 15.89 | 177,837 |
Exhibit No. | Exhibit Description | Filed Herewith |
31.1 | X | |
31.2 | X | |
32 | X | |
10.1* | X | |
10.2* | X | |
101 | The following materials from the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, formatted in Extensible Business Reporting Language (XBRL): (1) Consolidated Balance Sheets; (2) Consolidated Statements of Income; (3) Consolidated Statements of Comprehensive Income ; (4) Consolidated Statements of Cash Flows; and (5) Selected Notes to Consolidated Financial Statements |
FIRST NORTHWEST BANCORP | |
Date: May 7, 2019 | /s/ Laurence J. Hueth |
Laurence J. Hueth | |
President, Chief Executive Officer and Director | |
(Principal Executive Officer) | |
Date: May 7, 2019 | /s/ Regina M. Wood |
Regina M. Wood | |
Executive Vice President and Chief Financial Officer | |
(Principal Financial and Accounting Officer) |
• | Communicate expectations in terms of the Bank’s business goals and results; |
• | Recognize and reward achievement of the Bank’s short-term performance objectives; |
• | Motivate and reward high performance; |
• | Attract and retain talent needed for the Bank’s success; |
• | Encourage teamwork and collaboration; and |
• | Ensure incentives are appropriately risk-balanced (i.e., do not unintentionally motivate inappropriate risk taking). |
• | Employees hired before October 1st will receive a pro-rata award based on the number of full months employed during the Plan Year. |
• | Employees hired after September 30th must wait until the following Plan Year to participate. |
• | Any designated employee must enter into a Plan participation agreement that specifies, with respect to the employee, and for the Plan Year, the annual incentive targets, applicable weightings between corporate and team performance, the performance goals, the corporate performance weightings, the applicable team performance weightings, and such other provisions that the Committee determines to be necessary or appropriate. |
• | Return on Average Assets (“ROAA”), which is defined as Plan Year net income divided by annual average total assets. |
• | Growth in Total Loans, which is defined as net loans at 12/31/2019 less net loans at 12/31/2018, divided by net loans at 12/31/2018. |
• | Growth in Total Deposits, which is defined as total deposits at 12/31/2019 less total deposits at 12/31/2018, divided by total deposits at 12/31/2018 |
• | Non-Performing Assets (“NPAs”) / Assets, which is defined as nonperforming assets (excluding restructured loans and impaired securities) as of 12/31/2019, divided by total assets at 12/31/2019. |
• | Operating Expenses / Average Assets, which is defined as Plan Year total noninterest expense divided by annual average total assets. |
1. | 2019 Plan Year Annual Incentive Targets. For the 2019 Plan Year, the Annual Incentive Target applicable to the Participant are as follows: |
2019 Annual Incentive Target | ||||
Position | Below Threshold | Threshold (50%) | Target (100%) | Stretch (150%) |
% | % | % | % |
2. | 2019 Plan Year Weighting of Corporate and Team Performance. For the 2019 Plan Year, the weighting of corporate and team performance measures applicable to the Participant are as follows: |
Position | Corporate | Team |
% | % |
3. | Corporate Performance Goals: For the 2019 Plan Year, the corporate performance goals are as follows: |
2019 Performance Goals | |||
Threshold | Target | Stretch | |
ROAA (%) | % | % | % |
Growth in Net Loans (%) | % | % | % |
Growth in Total Deposits | % | % | % |
NPAs/Assets (%) | % | % | % |
Operating Expenses/Avg. Assets (%) | % | % | % |
4. | Corporate Performance Weightings: For the 2019 Plan Year, the corporate performance weightings applicable to the Participant are as follows: |
2019 Corporate Performance Weightings | |||||
Position | ROAA | Loan Growth | Deposit Growth | NPAs / Assets | Op. Exp. / Assets |
% | % | % | % | % |
5. | Team Performance Measures: For the 2019 Plan Year, the following team performance measures are applicable to the Participant, based on the balance sheet categories produced in accordance with generally accepted accounting principles (with loans net of deferred fees and costs and purchased loan premiums and discounts): |
6. | Team Performance Goals: For the 2019 Plan Year, the team performance goals applicable to the Participant are as follows: |
2019 Team Performance Goals | Performance Weighting | |||
Threshold | Target | Stretch | ||
Position | ||||
7. | Plan and Committee Decisions are Controlling. This Agreement and the cash awards that may be payable hereunder are subject in all respects to the provisions of the Plan, which are controlling. Capitalized terms herein not defined in this Agreement shall have the meaning ascribed to them in the Plan. All decisions, determinations and interpretations by the Committee respecting the Plan and this Agreement shall be binding and conclusive upon the Participant, any beneficiary or the legal representative thereof. |
8. | Participant’s Employment. Nothing in this Agreement shall limit the right of First Federal or any of its affiliates to terminate the Participant’s service or employment as a director, officer or employee, or otherwise impose upon First Federal or any of its affiliates any obligation to employ or accept the services or employment of the Participant. |
9. | Participant Acceptance. The Participant shall signify acceptance of the terms and conditions of this Agreement and acknowledge receipt of a copy of the Plan by signing in the space provided below and returning the signed copy to First Federal. |
10. | Recoupment. Any and all payments issued and/or made hereunder shall be subject to the “clawback” and recoupment provisions set forth in the Plan or required by law. |
1. | I have reviewed this Quarterly Report on Form 10-Q of First Northwest Bancorp; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fiscal fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions); |
a. | All significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial data information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: May 7, 2019 | /s/Laurence J. Hueth | |
Laurence J. Hueth President, Chief Executive Officer and Director (Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of First Northwest Bancorp; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fiscal fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions); |
a. | All significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial data information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: May 7, 2019 | /s/Regina M. Wood | |
Regina M. Wood Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
1. | the report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the financial statements included in the report. |
/s/Laurence J. Hueth | /s/Regina M. Wood | |
Laurence J. Hueth President, Chief Executive Officer and Director (Principal Executive Officer) | Regina M. Wood Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Apr. 30, 2019 |
|
Document Information [Abstract] | ||
Entity Registrant Name | First Northwest Bancorp | |
Entity Central Index Key | 0001556727 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 | |
Common Stock, Shares Outstanding | 10,988,181 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for loan losses | $ 9,759 | $ 9,533 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 10,992,181 | 11,170,018 |
Common stock, shares outstanding (in shares) | 10,992,181 | 11,170,018 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||
NET INCOME | $ 2,207 | $ 1,523 |
Unrealized gain on securities: | ||
Unrealized holding gain (loss), net of tax provision (benefit) of $427 and $(551), respectively | 1,603 | (2,078) |
Reclassification adjustment for net loss (gain) on sales of securities realized in income, net of taxes of $0 and $(26), respectively | 0 | (96) |
Other comprehensive income (loss), net of tax | 1,603 | (2,174) |
COMPREHENSIVE INCOME (LOSS) | $ 3,810 | $ (651) |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||
Tax provision (benefit) | $ 427 | $ (551) |
Reclassification adjustments, Tax | $ 0 | $ (26) |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) |
3 Months Ended |
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Mar. 31, 2019
$ / shares
| |
Statement of Stockholders' Equity [Abstract] | |
Cash dividend declared, price per share (in dollars per share) | $ 0.03 |
Cash dividend paid, price per share (in dollars per share) | $ 0.03 |
Basis of Presentation and Critical Accounting Policies |
3 Months Ended |
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Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Critical Accounting Policies | Basis of Presentation and Critical Accounting Policies Organization and Nature of business - First Northwest Bancorp, a Washington corporation, became the holding company of First Federal Savings and Loan Association of Port Angeles on January 29, 2015, upon completion of the Bank's conversion from a mutual to stock form of organization (the "Conversion"). In connection with the Conversion, the Company issued an aggregate of 12,167,000 shares of common stock at an offering price of $10.00 per share for gross proceeds of $121.7 million. An additional 933,360 shares of Company common stock and $400,000 in cash were contributed to the First Federal Community Foundation ("Foundation"), a charitable foundation that was established in connection with the Conversion, resulting in the issuance of a total of 13,100,360 shares. The Company received $117.6 million in net proceeds from the stock offering of which $58.4 million were contributed to the Bank upon Conversion. Pursuant to the Bank's Plan of Conversion (the "Plan") adopted by its Board of Directors, and as approved by its members, the Company established an employee stock ownership plan ("ESOP"). On December 18, 2015, the ESOP completed its open market purchases, with funds borrowed from the Company, of 8% of the common stock issued in the Conversion for a total of 1,048,029 shares. First Northwest's business activities generally are limited to passive investment activities and oversight of its investment in First Federal. Accordingly, the information set forth in this report, including the consolidated unaudited financial statements and related data, relates primarily to the Bank. The Bank is a community-oriented financial institution providing commercial and consumer banking services to individuals and businesses in Western Washington State with offices in Clallam, Jefferson, Kitsap, and Whatcom counties. These services include deposit and lending transactions that are supplemented with borrowing and investing activities. Basis of presentation - The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and footnotes required by U.S. Generally Accepted Accounting Principles ("GAAP") for complete financial statements. These unaudited interim consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018. In our opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the consolidated financial statements in accordance with GAAP have been included. The Company changed its fiscal year from June 30 to December 31 effective December 31, 2017. Operating results for the three months ended March 31, 2019, are not necessarily indicative of the results that may be expected for future periods. In preparing the unaudited interim consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to a determination of the allowance for loan losses ("ALLL"), fair value of financial instruments, and deferred tax assets and liabilities. Principles of consolidation - The accompanying consolidated financial statements include the accounts of First Northwest Bancorp and its wholly owned subsidiary, First Federal. All material intercompany accounts and transactions have been eliminated in consolidation. Subsequent Events - The Company has evaluated subsequent events for potential recognition and disclosure and determined there are no such events or transactions requiring recognition or disclosure. Recently adopted accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases. ASU 2016-02 is intended to increase transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements. The ASU requires a lessee to recognize on the balance sheet assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. Unlike current GAAP, which requires that only capital leases be recognized on the balance sheet, the ASC requires that both types of leases by recognized on the balance sheet. For public companies, this update is effective for interim and annual periods beginning after December 15, 2018. The adoption of ASU No. 2016-02 effective January 1, 2019 resulted in a right-of-use asset and corresponding lease obligation liability of $3,919,000. The Corporation chose the effective date as the date of initial application. Consequently, prior period financial information has not been updated or restated. The right-of-use asset is included in other assets and the lease obligation liability is included in other liabilities on the March 31, 2019, consolidated balance sheet. In August 2017, FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815). This ASU was issued to provide investors better insight to an entity’s risk management hedging strategies by permitting companies to recognize the economic results of its hedging strategies in its financial statements. The amendments in this ASU permit hedge accounting for hedging relationships involving non-financial risk and interest rate risk by removing certain limitations in cash flow and fair value hedging relationships. In addition, the ASU requires an entity to present the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is reported. This ASU is effective for fiscal years beginning after December 15, 2018, and early adoption is permitted. Adoption of ASU 2017-12 did not have a material impact on the Company’s consolidated financial statements. In June 2018, FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. These amendments provide specific guidance for transactions for acquiring goods and services from nonemployees and specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (i) financing to the issuer or (ii) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers. This guidance is effective for fiscal years beginning after December 15, 2018, and interim periods beginning after December 15, 2020. Early adoption is permitted but not earlier than the adoption of Topic 606. Adoption of this ASU did not have a material effect on the Company's consolidated financial statements as it has not historically issued share-based payments in exchange for goods or services to be consumed within its operations. In July 2018, FASB issued ASU No. 2018-09, Codification Improvements. These amendments provide clarifications and corrections to certain ASC subtopics including the following: 220-10 (Income Statement - Reporting Comprehensive Income - Overall), 470-50 (Debt - Modifications and Extinguishments), 480-10 (Distinguishing Liabilities from Equity - Overall), 718-740 (Compensation - Stock Compensation - Income Taxes), 805-740 (Business Combinations - Income Taxes), 815-10 (Derivatives and Hedging - Overall), and 820-10 (Fair Value Measurement - Overall). Some of the amendments in ASU 2018-09 do not require transition guidance and will be effective upon issuance; however, many of the amendments do have transition guidance with effective dates for annual periods beginning after December 15, 2018. Adoption of ASU 2018-09 did not have a material impact on the Company's consolidated financial statements. In October 2018, the FASB issued ASU No. 2018-16 Derivatives and Hedging (Topic 815), Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. The amendments in this ASU permit use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the interest rates on direct Treasury obligations of the U.S. government, the London Interbank Offered Rate (LIBOR) swap rate, the Overnight Index Swap (OIS) Rate based on the Fed Funds Effective Rate and the Securities Industry and Financial Markets Association (SIFMA) Municipal Swap Rate. The amendments in this ASU are required to be adopted concurrently with the amendments in ASU 2017-12. For public companies, this would be for fiscal years, and interim periods within those fiscal years beginning after December 15, 2018. Adoption of ASU 2018-16 did not have a material impact on the Company's consolidated financial statements. Recently adopted regulatory rule In August 2018, the Securities and Exchange Commission issued a final rule that amends certain of its disclosure requirements. The rule simplifies various disclosure requirements for public companies including primarily that it (i) eliminates the requirement for public companies to disclose in their filings a schedule of earnings to fixed charges, (ii) requires an analysis of changes in stockholders’ equity for the current and comparative year-to-date interim periods in interim reports, and (iii) reduces the requirements for market price information disclosures in annual reports. These changes are effective for public companies beginning on November 5, 2018. The Company will be complying with these new requirements beginning with the Quarterly Report for the period ended March 31, 2019, on Form 10-Q. Recently issued accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Loss, which updates the guidance on recognition and measurement of credit losses for financial assets. The new requirements, known as the current expected credit loss model (CECL) will require entities to adopt an impairment model based on expected losses rather than incurred losses. ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Upon adoption, the Company will change processes and procedures to calculate the allowance for loan losses, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. In addition, the current accounting policy and procedures for other-than-temporary impairment on investment securities available for sale will be replaced with an allowance approach. At this time, we cannot reasonably estimate the impact the implementation of this ASU will have on the Company's consolidated financial statements. The Company's internal project management team continues to review models, work with our third-party vendor, and discuss changes to processes and procedures to ensure the Company is fully compliant with the amendments at the adoption date. In August 2018, FASB issued ASU No. 2018-13, Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement which removes, modifies, and adds certain disclosure requirements related to fair value measurements in ASC 820. This guidance eliminates certain disclosure requirements for fair value measurements: the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, an entity’s policy for the timing of transfers between levels of the fair value hierarchy and an entity’s valuation processes for Level 3 fair value measurements. This guidance also adds new disclosure requirements for public entities: changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements of instruments held at the end of the reporting period, and the range and weighted average of significant unobservable inputs used to develop recurring and nonrecurring Level 3 fair value measurements, including how the weighted average is calculated. Furthermore, this guidance modifies certain requirements which will involve disclosing: transfers into and out of Level 3 of the fair value hierarchy, purchases and issuances of Level 3 assets and liabilities, and information about the measurement uncertainty of Level 3 fair value measurements as of the reporting date. This guidance is effective for public companies in fiscal years beginning after December 15, 2019, with early adoption permitted. This ASU is not expected to have a material impact on the Company's consolidated financial statements. In August 2018, FASB issued ASU No. 2018-15 Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract to provide guidance on implementation costs incurred in a cloud computing arrangement that is a service contract. The ASU aligns the accounting for such costs with the guidance on capitalizing costs associated with developing or obtaining internal-use software. Specifically, the ASU amends ASC 350 to include in its scope implementation costs of such arrangements that are service contracts and clarifies that a customer should apply ASC 350-40 to determine which implementation costs should be capitalized. This ASU, which is effective for fiscal years beginning after December 15, 2019, is not expected to have a material impact on the Company’s financial statements. Reclassifications - Certain amounts in the unaudited interim consolidated financial statements for prior periods have been reclassified to conform to the current unaudited financial statement presentation with no effect on net income or shareholders' equity. |
Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | Securities The amortized cost, gross unrealized gains and losses, and estimated fair value of securities classified as available-for-sale and held-to-maturity at March 31, 2019, are summarized as follows:
The amortized cost, gross unrealized gains and losses, and estimated fair value of securities classified as available-for-sale and held-to-maturity at December 31, 2018, are summarized as follows:
The following shows the unrealized gross losses and fair value of the investment portfolio by length of time that individual securities in each category have been in a continuous loss position as of March 31, 2019:
The following shows the unrealized gross losses and fair value of the investment portfolio by length of time that individual securities in each category have been in a continuous loss position as of December 31, 2018:
The Company may hold certain investment securities in an unrealized loss position that are not considered other than temporarily impaired ("OTTI"). At March 31, 2019 and December 31, 2018, there were 59 and 69 investment securities in an unrealized loss position, respectively. We believe that the unrealized losses on our investment securities relate principally to the general change in interest rates and market demand, and not credit quality, that has occurred since the initial purchase, and such unrecognized losses or gains will continue to vary with general interest rate level fluctuations in the future. Certain investments in a loss position are guaranteed by government entities or government sponsored entities. The Company does not intend to sell the securities in an unrealized loss position and believes it is not likely it will be required to sell these investments prior to a market price recovery or maturity. There were no OTTI losses during the three months ended March 31, 2019 and 2018. The amortized cost and estimated fair value of investment securities by contractual maturity are shown in the following tables at the dates indicated. Expected maturities of mortgage-backed securities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties; therefore, these securities are shown separately.
Sales of securities available-for-sale for the periods shown are summarized as follows:
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Loans Receivable |
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Loans and Leases Receivable Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Receivable | Loans Receivable Loans receivable consisted of the following at the dates indicated:
Allowance for Loan Losses. The Company maintains a general allowance for loan losses based on evaluating known and inherent risks in the loan portfolio, including management’s continuing analysis of the factors underlying the quality of the loan portfolio. These factors include changes in the size and composition of the loan portfolio, actual loan loss experience, and current and anticipated economic conditions. The reserve is an estimate based upon factors and trends identified by management at the time the financial statements are prepared. The following tables summarize changes in the ALLL and loan portfolio by segment and impairment method for the periods shown:
Impaired loans. A loan is considered impaired when First Federal has determined that it may be unable to collect payments of principal or interest when due under the contractual terms of the loan. In the process of identifying loans as impaired, management takes into consideration factors that include payment history and status, collateral value, financial condition of the borrower, and the probability of collecting scheduled payments in the future. Minor payment delays and insignificant payment shortfalls typically do not result in a loan being classified as impaired. The significance of payment delays and shortfalls is considered by management on a case-by-case basis after taking into consideration the totality of circumstances surrounding the loans and the borrowers, including payment history and amounts of any payment shortfall, length and reason for delay, and likelihood of return to stable performance. Impairment is measured on a loan-by-loan basis for all loans in the portfolio except smaller balance homogeneous loans and certain qualifying troubled debt restructuring ("TDR") loans. The following table presents a summary of loans individually evaluated for impairment by portfolio segment at the dates indicated:
The following table presents the average recorded investment in loans individually evaluated for impairment and the related interest income recognized for the periods shown:
Interest income recognized on a cash basis on impaired loans for the three months ended March 31, 2019 and 2018, was $92,000 and $166,000, respectively. The following table presents the recorded investment in nonaccrual loans by class of loan at the dates indicated:
Past due loans. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. There were no loans past due 90 days or more and still accruing interest at March 31, 2019 and December 31, 2018. The following table presents past due loans, net of partial loan charge-offs, by class, as of March 31, 2019:
The following table presents past due loans, net of partial loan charge-offs, by class, as of December 31, 2018:
Credit quality indicator. Federal regulations provide for the classification of lower quality loans and other assets, such as debt and equity securities, as substandard, doubtful, or loss; risk ratings 6, 7, and 8 in our 8-point risk rating system, respectively. An asset is considered substandard if it is inadequately protected by the current net worth and pay capacity of the borrower or of any collateral pledged. Substandard assets include those characterized by the distinct possibility that First Federal will sustain some loss if the deficiencies are not corrected. Assets classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses present make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions, and values. Assets classified as loss are those considered uncollectible and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted. When First Federal classifies problem assets as either substandard or doubtful, it may establish a specific allowance to address the risk specifically or allow the loss to be addressed in the general allowance. General allowances represent loss allowances that have been established to recognize the inherent risk associated with lending activities but that, unlike specific allowances, have not been specifically allocated to particular problem assets. When an insured institution classifies problem assets as a loss, it is required to charge off such assets in the period in which they are deemed uncollectible. Assets that do not currently expose First Federal to sufficient risk to warrant classification as substandard or doubtful but do possess identified weaknesses are designated as either watch or special mention assets; risk ratings 4 and 5 in our risk rating system, respectively. Loans not otherwise classified are considered pass graded loans and are rated 1-3 in our risk rating system. Additionally, First Federal categorizes loans as performing or nonperforming based on payment activity. Loans that are more than 90 days past due and nonaccrual loans are considered nonperforming. The following table represents the internally assigned grade as of March 31, 2019, by class of loans:
The following table represents the internally assigned grade as of December 31, 2018, by class of loans:
The following table represents the credit risk profile based on payment activity as of March 31, 2019, by class of loans:
The following table represents the credit risk profile based on payment activity as of December 31, 2018, by class of loans:
Troubled debt restructuring. A TDR is a loan to a borrower who is experiencing financial difficulty that has been modified from its original terms and conditions in such a way that First Federal is granting the borrower a concession of some kind. First Federal has granted a variety of concessions to borrowers in the form of loan modifications. The modifications are generally related to the loan's interest rate, term and payment amount or a combination thereof. Upon identifying a receivable as a TDR loan, First Federal classifies the loan as impaired for purposes of determining the allowance for loan losses. This requires the loan to initially be evaluated individually for impairment, generally based on the expected cash flows under the new terms discounted at the loan’s original effective interest rates. For TDR loans that subsequently default, the method of determining impairment is generally the fair value of the collateral less estimated selling costs. TDR loans may be upgraded in their classification and placed on accrual status once there is a sustained period of repayment performance, usually six months or longer, and there is a reasonable assurance that repayment will continue. First Federal allows reclassification of a troubled debt restructuring back into the general loan pool (as a non-troubled debt restructuring) if the borrower is able to refinance the loan at then-current market rates and meet all of the underwriting criteria of First Federal required of other borrowers. The refinance must be based on the borrower’s ability to repay the debt and no special concessions of rate and/or term are granted to the borrower. The following table is a summary of information pertaining to TDR loans included in impaired loans at the dates indicated:
There were no newly restructured and renewals or modifications of existing TDR loans that occurred during the three months ended March 31, 2019. The following is a summary of TDR loans which incurred a payment default within 12 months of the restructure date during the three months ended March 31, 2019.
The following table presents newly restructured and renewals or modifications of existing TDR loans by class that occurred during the three months ended March 31, 2018, by type of concession granted.
There were no TDR loans which incurred a payment default within 12 months of the restructure date during the three months ended March 31, 2018. No additional funds were committed to be advanced in connection with impaired loans at March 31, 2019. The following table presents TDR loans by class at the dates indicated by accrual and nonaccrual status.
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Deposits |
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Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits | Deposits The aggregate amount of time deposits in excess of the Federal Deposit Insurance Corporation ("FDIC") insured limit, currently $250,000, at March 31, 2019 and December 31, 2018, was $101.8 million and $107.0 million, respectively. Deposits and weighted-average interest rates at the dates indicated are as follows:
Maturities of certificates at the dates indicated are as follows:
Brokered certificates of deposits of $10,000 are included in the March 31, 2019, certificate of deposits total. As needed, we will increase our portfolio of these brokered deposits as a source of additional funding in future periods. Deposits at March 31, 2019 and December 31, 2018, included $81.6 million and $80.0 million, respectively, in public fund deposits. Investment securities with a carrying value of $47.4 million and $47.6 million were pledged as collateral for these deposits at March 31, 2019 and December 31, 2018, respectively. This exceeds the minimum collateral requirements established by the Washington Public Deposit Protection Commission. Interest on deposits by type for the periods shown was as follows:
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Federal Taxes on Income |
3 Months Ended |
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Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Federal Taxes on Income | Federal Taxes on Income Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. 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. These calculations are based on many complex factors including estimates of the timing of reversals of temporary differences, the interpretation of federal income tax laws, and a determination of the differences between the tax and the financial reporting basis of assets and liabilities. Actual results could differ significantly from the estimates and interpretations used in determining the current and deferred income tax assets and liabilities. Under current Federal income tax regulations, charitable contribution deductions are limited to 10% of taxable income. Due to this limitation, the Company currently has a valuation allowance of $1.2 million for financial statement reporting purposes related to its contribution to the Foundation. The contribution carryforward and related valuation allowance will expire in 2020. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company evaluates whether its deferred tax assets will be realized and adjusts the amount of its valuation allowance, if necessary. Effective January 1, 2018, the corporate U.S. statutory federal income tax rate was reduced from 35% to 21% under the Tax Cuts and Jobs Act. The Company completed its accounting under ASC 740 in December 2017 for all material deferred tax assets and liabilities with provisional amounts recorded for immaterial items. The effective tax rates were 18.7% and 18.5% for the three months ended March 31, 2019 and 2018, respectively. The effective tax rates differ from the statutory maximum federal tax rate for 2018 and 2017 of 21% and 35%, respectively, largely due to the nontaxable earnings on bank owned life insurance and tax-exempt interest income earned on certain investment securities and loans. |
Earnings per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share | Earnings per Share Basic earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. In addition, nonvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are considered participating securities and are included in the computation of earnings per share. The following table presents a reconciliation of the components used to compute basic and diluted earnings per share for the three months ended March 31, 2019 and 2018.
Unallocated ESOP shares are not included as outstanding for either basic or diluted earnings per share calculations. As of March 31, 2019 and 2018, there were 833,782 and 886,671 shares in the ESOP that remain unallocated, respectively. Potential dilutive shares are excluded from the computation of EPS if their effect is anti-dilutive. There were no restricted stock award anti-dilutive shares at March 31, 2019 and 2018, respectively. |
Employee Benefits |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefits | Employee Benefits Employee Stock Ownership Plan In connection with the Conversion, the Company established an ESOP for eligible employees of the Company and the Bank. Employees of the Company and the Bank who have been credited with at least 1,000 hours of service during a 12-month period are eligible to participate in the ESOP. Pursuant to the Plan, the ESOP purchased shares in the open market with funds borrowed from First Northwest. The Bank will make contributions to the ESOP in amounts necessary to amortize the ESOP loan payable to First Northwest over a period of 20 years, bearing estimated interest at 2.46%. The loan is secured by shares purchased with the loan proceeds and will be repaid by the ESOP with funds from the Bank's discretionary contributions to the ESOP and earnings on the ESOP assets. As shares are committed to be released from collateral, the Company reports compensation expense equal to the average daily market prices of the shares and the shares become outstanding for EPS computations. The compensation expense is accrued monthly throughout the year. Dividends on allocated ESOP shares are recorded as a reduction of retained earnings; dividends on unallocated ESOP shares are recorded as a reduction of debt and accrued interest. Compensation expense related to the ESOP for the three months ended March 31, 2019 and 2018, was $207,000 and $220,000, respectively. Shares issued to the ESOP as of the dates indicated are as follows:
Stock-based Compensation On November 16, 2015, the Company's shareholders approved the First Northwest Bancorp 2015 Equity Incentive Plan (the "2015 EIP"), which provides for the grant of incentive stock options, non-qualified stock options, restricted stock and restricted stock units to eligible participants. The cost of awards under the 2015 EIP generally is based on the fair value of the awards on their grant date. The maximum number of shares that may be utilized for awards under the 2015 EIP is 1,834,050. The 2015 EIP provides for the use of authorized but unissued shares or shares that have been reacquired by First Northwest to fund share-based awards. At March 31, 2019, there were 1,316,550 total shares available for grant under the 2015 EIP, including 72,014 shares available to be granted as restricted stock. During the three months ended March 31, 2019 and 2018, no shares of restricted stock were awarded and no stock options were granted. Awarded shares of restricted stock vest ratably over five years from the date of grant as long as the eligible participant remains in service to the Company. The Company recognizes compensation expense for the restricted stock awards based on the fair value of the shares at the grant date amortized over five years. For the three months ended March 31, 2019 and 2018, total compensation expense for the 2015 EIP was $283,000 and $273,000, respectively. Included in the above compensation expense for the three months ended March 31, 2019 and 2018, was directors' compensation of $85,000 and $85,000, respectively. The following tables provide a summary of changes in non-vested restricted stock awards for the period shown:
As of March 31, 2019, there was $3.2 million of total unrecognized compensation cost related to non-vested shares granted as restricted stock awards. The cost is expected to be recognized over the remaining weighted-average vesting period of approximately 3.06 years. |
Stock-based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation | Employee Benefits Employee Stock Ownership Plan In connection with the Conversion, the Company established an ESOP for eligible employees of the Company and the Bank. Employees of the Company and the Bank who have been credited with at least 1,000 hours of service during a 12-month period are eligible to participate in the ESOP. Pursuant to the Plan, the ESOP purchased shares in the open market with funds borrowed from First Northwest. The Bank will make contributions to the ESOP in amounts necessary to amortize the ESOP loan payable to First Northwest over a period of 20 years, bearing estimated interest at 2.46%. The loan is secured by shares purchased with the loan proceeds and will be repaid by the ESOP with funds from the Bank's discretionary contributions to the ESOP and earnings on the ESOP assets. As shares are committed to be released from collateral, the Company reports compensation expense equal to the average daily market prices of the shares and the shares become outstanding for EPS computations. The compensation expense is accrued monthly throughout the year. Dividends on allocated ESOP shares are recorded as a reduction of retained earnings; dividends on unallocated ESOP shares are recorded as a reduction of debt and accrued interest. Compensation expense related to the ESOP for the three months ended March 31, 2019 and 2018, was $207,000 and $220,000, respectively. Shares issued to the ESOP as of the dates indicated are as follows:
Stock-based Compensation On November 16, 2015, the Company's shareholders approved the First Northwest Bancorp 2015 Equity Incentive Plan (the "2015 EIP"), which provides for the grant of incentive stock options, non-qualified stock options, restricted stock and restricted stock units to eligible participants. The cost of awards under the 2015 EIP generally is based on the fair value of the awards on their grant date. The maximum number of shares that may be utilized for awards under the 2015 EIP is 1,834,050. The 2015 EIP provides for the use of authorized but unissued shares or shares that have been reacquired by First Northwest to fund share-based awards. At March 31, 2019, there were 1,316,550 total shares available for grant under the 2015 EIP, including 72,014 shares available to be granted as restricted stock. During the three months ended March 31, 2019 and 2018, no shares of restricted stock were awarded and no stock options were granted. Awarded shares of restricted stock vest ratably over five years from the date of grant as long as the eligible participant remains in service to the Company. The Company recognizes compensation expense for the restricted stock awards based on the fair value of the shares at the grant date amortized over five years. For the three months ended March 31, 2019 and 2018, total compensation expense for the 2015 EIP was $283,000 and $273,000, respectively. Included in the above compensation expense for the three months ended March 31, 2019 and 2018, was directors' compensation of $85,000 and $85,000, respectively. The following tables provide a summary of changes in non-vested restricted stock awards for the period shown:
As of March 31, 2019, there was $3.2 million of total unrecognized compensation cost related to non-vested shares granted as restricted stock awards. The cost is expected to be recognized over the remaining weighted-average vesting period of approximately 3.06 years. |
Fair Value Accounting and Measurement |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Accounting and Measurement | Fair Value Accounting and Measurement Fair value is the price to sell an asset or transfer a liability in an orderly transaction between market participants in the Company’s principal market. The Company has established and documented its process for determining the fair values of its assets and liabilities, where applicable. Fair value is based on quoted market prices, when available, for identical or similar assets or liabilities. In the absence of quoted market prices, management determines the fair value of the Company’s assets and liabilities using valuation models or third-party pricing services, both of which rely on market-based parameters when available, such as interest rate yield curves, option volatilities and credit spreads, or unobservable inputs. Unobservable inputs may be based on management’s judgment, assumptions, and estimates related to credit quality, liquidity, interest rates, and other relevant inputs. Any changes to valuation methodologies are reviewed by management to ensure they are relevant and justified. Valuation methodologies are refined as more market-based data becomes available. A three-level valuation hierarchy is used in determining fair value that is based on the transparency of the inputs used in the valuation process. The inputs used in determining fair value in each of the three levels of the hierarchy are as follows: Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 - Either: (i) quoted prices for similar assets or liabilities; (ii) observable inputs, such as interest rates or yield curves; or (iii) inputs derived principally from or corroborated by observable market data. Level 3 - Unobservable inputs. The hierarchy gives the highest ranking to Level 1 inputs and the lowest ranking to Level 3 inputs. The level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the overall fair value measurement. Qualitative disclosures of valuation techniques - Securities available for sale: where quoted prices are available in an active market, securities are classified as Level 1. Level 1 instruments include highly liquid government bonds, securities issued by the U.S. Treasury, and exchange-traded equity securities. If quoted prices are not available, management determines fair value using pricing models, quoted prices of similar securities, which are considered Level 2, or discounted cash flows. In certain cases, where there is limited activity in the market for a particular instrument, assumptions must be made to determine their fair value. Such instruments are classified as Level 3. Assets and liabilities measured at fair value on a recurring basis - Assets and liabilities are considered to be fair valued on a recurring basis if fair value is measured regularly (i.e., daily, weekly, monthly, or quarterly). The following tables show the Company’s assets measured at fair value on a recurring basis at the dates indicated:
Assets and liabilities measured at fair value on a nonrecurring basis - Assets are considered to be fair valued on a nonrecurring basis if the fair value measurement of the instrument does not necessarily result in a change in the amount recorded on the consolidated balance sheets. Generally, nonrecurring valuation is the result of the application of other accounting pronouncements that require assets or liabilities to be assessed for impairment or recorded at the lower of cost or fair value. The following tables present the Company’s assets measured at fair value on a nonrecurring basis at the dates indicated:
At March 31, 2019 and December 31, 2018, there were no impaired loans with discounts to appraisal disposition value or other unobservable inputs. The following tables present the carrying value and estimated fair value of financial instruments at the dates indicated:
Financial assets and liabilities other than investment securities are not traded in active markets. Estimated fair values require subjective judgments and are approximate. The estimates of fair value in the previous table are not necessarily representative of amounts that could be realized in actual market transactions, or of the underlying value of the Company. The methods and assumptions used by the Company in estimating fair values of financial instruments as set forth below in accordance with ASC Topic 825, Financial Instruments, as amended by ASU 2016-01 requiring public entities to use the exit price notion effective January 1, 2018, are as follows: Securities - Fair values for investment securities are primarily measured using information from a third-party pricing service. The pricing service uses pricing models based on market data. In the event that limited or less transparent information is provided by the third-party pricing service, fair value is estimated using secondary pricing services or non-binding third-party broker quotes. Loans receivable, net - At March 31, 2019, the fair value of loans is estimated by discounting the future cash flows using the current rate at which similar loans and leases would be made to borrowers with similar credit and for the same remaining maturities. Additionally, to be consistent with the requirements under FASB ASC Topic 820 for Fair Value Measurements and Disclosures, the loans were valued at a price that represents the Company’s exit price or the price at which these instruments would be sold or transferred. Mortgage servicing rights, net - The estimated fair value of mortgage servicing rights is based on market prices for comparable mortgage servicing contracts when available. If no comparable contract is available, the estimated fair value is based on a valuation model that calculates the present value of estimated future net servicing income. |
Noninterest Income |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noninterest Income | Noninterest Income On January 1, 2018, the Company adopted the amendments of ASU 2014-09 Revenue from Contracts with Customers (Topic 606) and all subsequent ASUs that modified Topic 606. The Company has included the following table regarding the Company’s noninterest income for the periods presented.
The Company recognizes revenue as it is earned and noted no impact to its revenue recognition policies as a result of the adoption of ASU 2014-09. The following is a discussion of key revenues within the scope of the new revenue guidance. Deposit fees - The Company earns fees from its deposit customers for account maintenance, transaction-based activity and overdraft services. Account maintenance fees consist primarily of account fees and analyzed account fees charged on deposit accounts on a monthly basis. The performance obligation is satisfied and the fees are recognized on a monthly basis as the service period is completed. Transaction-based fees on deposit accounts are charged to deposit customers for specific services provided to the customer, such as non-sufficient funds fees, overdraft fees, and wire fees. The performance obligation is completed as the transaction occurs and the fees are recognized at the time each specific service is provided to the customer. Debit interchange income - Debit and Automated Teller Machine ("ATM") interchange income represent fees earned when a debit card issued by the Company is used. The Company earns interchange fees from debit cardholder transactions through card networks. In addition, the Company earns interchange fees for use of its ATM by customers of other banking institutions. Interchange fees are based on purchase volumes and other factors and are recognized as transactions occur. The performance obligation is satisfied and the fees are earned when the cost of the transaction is charged to the cardholder's debit card. Certain expenses directly associated with the credit and debit card are netted against interchange income. Credit card interchange income- Credit card interchange income represents fees earned when a credit card issued by the Bank through a third-party vendor is used. Similar to the debit card interchange, the Bank earns an interchange fee for each transaction made with a Bank-branded credit card. The performance obligation is satisfied and the fees are earned when the cost of the transaction is charged to the cardholder's credit card. Certain expenses directly related to the credit card interchange contract are netted against interchange income. Investment services revenue - Commissions received on the sale of investment related products is determined by a percentage of underlying instruments sold and is recognized when the sale is finalized. Sale of other real estate owned (OREO) - Gains/losses on the sale of OREO are included in non-interest expense and are generally recognized when the performance obligation is complete. This is typically at delivery of control over the property to the buyer at time of each real estate closing. |
Basis of Presentation and Critical Accounting Policies (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of presentation - The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and footnotes required by U.S. Generally Accepted Accounting Principles ("GAAP") for complete financial statements. These unaudited interim consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018. In our opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the consolidated financial statements in accordance with GAAP have been included. The Company changed its fiscal year from June 30 to December 31 effective December 31, 2017. Operating results for the three months ended March 31, 2019, are not necessarily indicative of the results that may be expected for future periods. In preparing the unaudited interim consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to a determination of the allowance for loan losses ("ALLL"), fair value of financial instruments, and deferred tax assets and liabilities. |
Principles of Consolidation | Principles of consolidation - The accompanying consolidated financial statements include the accounts of First Northwest Bancorp and its wholly owned subsidiary, First Federal. All material intercompany accounts and transactions have been eliminated in consolidation. |
Subsequent Events | Subsequent Events - The Company has evaluated subsequent events for potential recognition and disclosure and determined there are no such events or transactions requiring recognition or disclosure. |
Recently Adopted Accounting Policies, Regulatory Rule and Issued Accounting Pronouncements | Recently adopted accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases. ASU 2016-02 is intended to increase transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements. The ASU requires a lessee to recognize on the balance sheet assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. Unlike current GAAP, which requires that only capital leases be recognized on the balance sheet, the ASC requires that both types of leases by recognized on the balance sheet. For public companies, this update is effective for interim and annual periods beginning after December 15, 2018. The adoption of ASU No. 2016-02 effective January 1, 2019 resulted in a right-of-use asset and corresponding lease obligation liability of $3,919,000. The Corporation chose the effective date as the date of initial application. Consequently, prior period financial information has not been updated or restated. The right-of-use asset is included in other assets and the lease obligation liability is included in other liabilities on the March 31, 2019, consolidated balance sheet. In August 2017, FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815). This ASU was issued to provide investors better insight to an entity’s risk management hedging strategies by permitting companies to recognize the economic results of its hedging strategies in its financial statements. The amendments in this ASU permit hedge accounting for hedging relationships involving non-financial risk and interest rate risk by removing certain limitations in cash flow and fair value hedging relationships. In addition, the ASU requires an entity to present the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is reported. This ASU is effective for fiscal years beginning after December 15, 2018, and early adoption is permitted. Adoption of ASU 2017-12 did not have a material impact on the Company’s consolidated financial statements. In June 2018, FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. These amendments provide specific guidance for transactions for acquiring goods and services from nonemployees and specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (i) financing to the issuer or (ii) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers. This guidance is effective for fiscal years beginning after December 15, 2018, and interim periods beginning after December 15, 2020. Early adoption is permitted but not earlier than the adoption of Topic 606. Adoption of this ASU did not have a material effect on the Company's consolidated financial statements as it has not historically issued share-based payments in exchange for goods or services to be consumed within its operations. In July 2018, FASB issued ASU No. 2018-09, Codification Improvements. These amendments provide clarifications and corrections to certain ASC subtopics including the following: 220-10 (Income Statement - Reporting Comprehensive Income - Overall), 470-50 (Debt - Modifications and Extinguishments), 480-10 (Distinguishing Liabilities from Equity - Overall), 718-740 (Compensation - Stock Compensation - Income Taxes), 805-740 (Business Combinations - Income Taxes), 815-10 (Derivatives and Hedging - Overall), and 820-10 (Fair Value Measurement - Overall). Some of the amendments in ASU 2018-09 do not require transition guidance and will be effective upon issuance; however, many of the amendments do have transition guidance with effective dates for annual periods beginning after December 15, 2018. Adoption of ASU 2018-09 did not have a material impact on the Company's consolidated financial statements. In October 2018, the FASB issued ASU No. 2018-16 Derivatives and Hedging (Topic 815), Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. The amendments in this ASU permit use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the interest rates on direct Treasury obligations of the U.S. government, the London Interbank Offered Rate (LIBOR) swap rate, the Overnight Index Swap (OIS) Rate based on the Fed Funds Effective Rate and the Securities Industry and Financial Markets Association (SIFMA) Municipal Swap Rate. The amendments in this ASU are required to be adopted concurrently with the amendments in ASU 2017-12. For public companies, this would be for fiscal years, and interim periods within those fiscal years beginning after December 15, 2018. Adoption of ASU 2018-16 did not have a material impact on the Company's consolidated financial statements. Recently adopted regulatory rule In August 2018, the Securities and Exchange Commission issued a final rule that amends certain of its disclosure requirements. The rule simplifies various disclosure requirements for public companies including primarily that it (i) eliminates the requirement for public companies to disclose in their filings a schedule of earnings to fixed charges, (ii) requires an analysis of changes in stockholders’ equity for the current and comparative year-to-date interim periods in interim reports, and (iii) reduces the requirements for market price information disclosures in annual reports. These changes are effective for public companies beginning on November 5, 2018. The Company will be complying with these new requirements beginning with the Quarterly Report for the period ended March 31, 2019, on Form 10-Q. Recently issued accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Loss, which updates the guidance on recognition and measurement of credit losses for financial assets. The new requirements, known as the current expected credit loss model (CECL) will require entities to adopt an impairment model based on expected losses rather than incurred losses. ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Upon adoption, the Company will change processes and procedures to calculate the allowance for loan losses, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. In addition, the current accounting policy and procedures for other-than-temporary impairment on investment securities available for sale will be replaced with an allowance approach. At this time, we cannot reasonably estimate the impact the implementation of this ASU will have on the Company's consolidated financial statements. The Company's internal project management team continues to review models, work with our third-party vendor, and discuss changes to processes and procedures to ensure the Company is fully compliant with the amendments at the adoption date. In August 2018, FASB issued ASU No. 2018-13, Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement which removes, modifies, and adds certain disclosure requirements related to fair value measurements in ASC 820. This guidance eliminates certain disclosure requirements for fair value measurements: the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, an entity’s policy for the timing of transfers between levels of the fair value hierarchy and an entity’s valuation processes for Level 3 fair value measurements. This guidance also adds new disclosure requirements for public entities: changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements of instruments held at the end of the reporting period, and the range and weighted average of significant unobservable inputs used to develop recurring and nonrecurring Level 3 fair value measurements, including how the weighted average is calculated. Furthermore, this guidance modifies certain requirements which will involve disclosing: transfers into and out of Level 3 of the fair value hierarchy, purchases and issuances of Level 3 assets and liabilities, and information about the measurement uncertainty of Level 3 fair value measurements as of the reporting date. This guidance is effective for public companies in fiscal years beginning after December 15, 2019, with early adoption permitted. This ASU is not expected to have a material impact on the Company's consolidated financial statements. In August 2018, FASB issued ASU No. 2018-15 Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract to provide guidance on implementation costs incurred in a cloud computing arrangement that is a service contract. The ASU aligns the accounting for such costs with the guidance on capitalizing costs associated with developing or obtaining internal-use software. Specifically, the ASU amends ASC 350 to include in its scope implementation costs of such arrangements that are service contracts and clarifies that a customer should apply ASC 350-40 to determine which implementation costs should be capitalized. This ASU, which is effective for fiscal years beginning after December 15, 2019, is not expected to have a material impact on the Company’s financial statements. |
Reclassifications | Reclassifications - Certain amounts in the unaudited interim consolidated financial statements for prior periods have been reclassified to conform to the current unaudited financial statement presentation with no effect on net income or shareholders' equity. |
Earnings per Share | Basic earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. In addition, nonvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents are considered participating securities and are included in the computation of earnings per share. |
Fair Value Accounting and Measurement | Fair value is the price to sell an asset or transfer a liability in an orderly transaction between market participants in the Company’s principal market. The Company has established and documented its process for determining the fair values of its assets and liabilities, where applicable. Fair value is based on quoted market prices, when available, for identical or similar assets or liabilities. In the absence of quoted market prices, management determines the fair value of the Company’s assets and liabilities using valuation models or third-party pricing services, both of which rely on market-based parameters when available, such as interest rate yield curves, option volatilities and credit spreads, or unobservable inputs. Unobservable inputs may be based on management’s judgment, assumptions, and estimates related to credit quality, liquidity, interest rates, and other relevant inputs. Any changes to valuation methodologies are reviewed by management to ensure they are relevant and justified. Valuation methodologies are refined as more market-based data becomes available. A three-level valuation hierarchy is used in determining fair value that is based on the transparency of the inputs used in the valuation process. The inputs used in determining fair value in each of the three levels of the hierarchy are as follows: Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 - Either: (i) quoted prices for similar assets or liabilities; (ii) observable inputs, such as interest rates or yield curves; or (iii) inputs derived principally from or corroborated by observable market data. Level 3 - Unobservable inputs. The hierarchy gives the highest ranking to Level 1 inputs and the lowest ranking to Level 3 inputs. The level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the overall fair value measurement. Qualitative disclosures of valuation techniques - Securities available for sale: where quoted prices are available in an active market, securities are classified as Level 1. Level 1 instruments include highly liquid government bonds, securities issued by the U.S. Treasury, and exchange-traded equity securities. If quoted prices are not available, management determines fair value using pricing models, quoted prices of similar securities, which are considered Level 2, or discounted cash flows. In certain cases, where there is limited activity in the market for a particular instrument, assumptions must be made to determine their fair value. Such instruments are classified as Level 3. Assets and liabilities measured at fair value on a recurring basis - Assets and liabilities are considered to be fair valued on a recurring basis if fair value is measured regularly (i.e., daily, weekly, monthly, or quarterly). |
Fair Value of Financial Instruments | Financial assets and liabilities other than investment securities are not traded in active markets. Estimated fair values require subjective judgments and are approximate. The estimates of fair value in the previous table are not necessarily representative of amounts that could be realized in actual market transactions, or of the underlying value of the Company. The methods and assumptions used by the Company in estimating fair values of financial instruments as set forth below in accordance with ASC Topic 825, Financial Instruments, as amended by ASU 2016-01 requiring public entities to use the exit price notion effective January 1, 2018, are as follows: Securities - Fair values for investment securities are primarily measured using information from a third-party pricing service. The pricing service uses pricing models based on market data. In the event that limited or less transparent information is provided by the third-party pricing service, fair value is estimated using secondary pricing services or non-binding third-party broker quotes. Loans receivable, net - At March 31, 2019, the fair value of loans is estimated by discounting the future cash flows using the current rate at which similar loans and leases would be made to borrowers with similar credit and for the same remaining maturities. Additionally, to be consistent with the requirements under FASB ASC Topic 820 for Fair Value Measurements and Disclosures, the loans were valued at a price that represents the Company’s exit price or the price at which these instruments would be sold or transferred. Mortgage servicing rights, net - The estimated fair value of mortgage servicing rights is based on market prices for comparable mortgage servicing contracts when available. If no comparable contract is available, the estimated fair value is based on a valuation model that calculates the present value of estimated future net servicing income. |
Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amortized Cost, Gross Unrealized Gains and Losses, and Estimated Fair Value of Securities | The amortized cost, gross unrealized gains and losses, and estimated fair value of securities classified as available-for-sale and held-to-maturity at March 31, 2019, are summarized as follows:
The amortized cost, gross unrealized gains and losses, and estimated fair value of securities classified as available-for-sale and held-to-maturity at December 31, 2018, are summarized as follows:
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Schedule of Available-For-Sale Securities in a Continuous Unrealized Loss Position | The following shows the unrealized gross losses and fair value of the investment portfolio by length of time that individual securities in each category have been in a continuous loss position as of March 31, 2019:
The following shows the unrealized gross losses and fair value of the investment portfolio by length of time that individual securities in each category have been in a continuous loss position as of December 31, 2018:
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Schedule of Held-To-Maturity Securities in a Continuous Unrealized Loss Position | The following shows the unrealized gross losses and fair value of the investment portfolio by length of time that individual securities in each category have been in a continuous loss position as of March 31, 2019:
The following shows the unrealized gross losses and fair value of the investment portfolio by length of time that individual securities in each category have been in a continuous loss position as of December 31, 2018:
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Schedule of Amortized Cost and Estimated Fair Value of Investment Securities by Contractual Maturity | Expected maturities of mortgage-backed securities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties; therefore, these securities are shown separately.
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Summary of Sales of Available-For-Sale and Held-To-Maturity Securities | Sales of securities available-for-sale for the periods shown are summarized as follows:
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Loans Receivable - (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Leases Receivable Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loans Receivable Balances | Loans receivable consisted of the following at the dates indicated:
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Schedule of Activity in Allowance for Loan Losses | The following tables summarize changes in the ALLL and loan portfolio by segment and impairment method for the periods shown:
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Schedules of Impaired Loans | The following table presents a summary of loans individually evaluated for impairment by portfolio segment at the dates indicated:
The following table presents the average recorded investment in loans individually evaluated for impairment and the related interest income recognized for the periods shown:
Interest income recognized on a cash basis on impaired loans for the three months ended March 31, 2019 and 2018, was $92,000 and $166,000, respectively. |
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Schedule of Recorded Investments in Nonaccrual Loans | The following table presents the recorded investment in nonaccrual loans by class of loan at the dates indicated:
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Schedule of Past Due Loans by Class | The following table presents past due loans, net of partial loan charge-offs, by class, as of March 31, 2019:
The following table presents past due loans, net of partial loan charge-offs, by class, as of December 31, 2018:
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Schedule of Loans by Risk Category | The following table represents the internally assigned grade as of March 31, 2019, by class of loans:
The following table represents the internally assigned grade as of December 31, 2018, by class of loans:
The following table represents the credit risk profile based on payment activity as of March 31, 2019, by class of loans:
The following table represents the credit risk profile based on payment activity as of December 31, 2018, by class of loans:
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Schedule of Troubled Debt Restructured Loans | The following is a summary of TDR loans which incurred a payment default within 12 months of the restructure date during the three months ended March 31, 2019.
The following table presents newly restructured and renewals or modifications of existing TDR loans by class that occurred during the three months ended March 31, 2018, by type of concession granted.
The following table is a summary of information pertaining to TDR loans included in impaired loans at the dates indicated:
The following table presents TDR loans by class at the dates indicated by accrual and nonaccrual status.
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Deposits (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deposits and Weighted Average Interest Rates | Deposits and weighted-average interest rates at the dates indicated are as follows:
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Schedule of Maturities of Time Deposits | Maturities of certificates at the dates indicated are as follows:
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Schedule of Interest on Deposits | Interest on deposits by type for the periods shown was as follows:
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Earnings per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Basic and Diluted Earnings Per Share | The following table presents a reconciliation of the components used to compute basic and diluted earnings per share for the three months ended March 31, 2019 and 2018.
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Employee Benefits (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Employee Stock Ownership Plan (ESOP) | Shares issued to the ESOP as of the dates indicated are as follows:
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Stock-based Compensation (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Changes in Non-Vested Restricted Stock Awards | The following tables provide a summary of changes in non-vested restricted stock awards for the period shown:
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Fair Value Accounting and Measurement (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables show the Company’s assets measured at fair value on a recurring basis at the dates indicated:
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Schedule of Assets Measured at Fair Value on a Nonrecurring Basis | The following tables present the Company’s assets measured at fair value on a nonrecurring basis at the dates indicated:
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Schedule of the Carrying Value and Estimated Fair Value of Financial Instruments | The following tables present the carrying value and estimated fair value of financial instruments at the dates indicated:
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Noninterest Income (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Noninterest Income | The Company has included the following table regarding the Company’s noninterest income for the periods presented.
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Securities - Narrative (Details) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2019
USD ($)
security
|
Mar. 31, 2018
USD ($)
|
Dec. 31, 2018
security
|
|
Investments, Debt and Equity Securities [Abstract] | |||
Number of securities in an unrealized loss position | security | 59 | 69 | |
OTTI losses | $ | $ 0 | $ 0 |
Securities - Sale of Available-for-sale Securities (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Investments, Debt and Equity Securities [Abstract] | ||
Proceeds from sales | $ 0 | $ 32,859 |
Gross realized gains | 0 | 164 |
Gross realized losses | $ 0 | $ (42) |
Loans Receivable - Narrative (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest income recognized on a cash basis for impaired loans | $ 92,000 | $ 166,000 | |
Loans | 888,926,000 | $ 869,730,000 | |
Troubled debt restructuring, debtor, subsequent periods, contingent payments, amount | 0 | ||
90 Days or More Past Due | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans | $ 0 | $ 0 |
Deposits - Narrative (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Banking and Thrift [Abstract] | ||
Time deposits in excess of FDIC limit of $250,000 | $ 101,800 | $ 107,000 |
Brokered certificates of deposit | 10 | |
Public fund deposits | 81,600 | 80,000 |
Investment securities pledged as collateral, carrying value | $ 47,400 | $ 47,600 |
Federal Taxes on Income (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Income Tax Disclosure [Abstract] | ||
Valuation allowance | $ 1.2 | |
Effective income tax rate | 18.70% | 18.50% |
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
Numerator: | |||
Net income | $ 2,207 | $ 1,523 | |
Denominator: | |||
Basic weighted average common shares outstanding (in shares) | 9,973,125 | 10,491,647 | |
Dilutive restricted stock grants (in shares) | 77,143 | 113,009 | |
Diluted weighted average common shares outstanding (in shares) | 10,050,268 | 10,604,656 | |
Basic earnings per share (in dollars per share) | $ 0.22 | $ 0.15 | |
Diluted earnings per share (in dollars per share) | $ 0.22 | $ 0.14 | |
Unallocated shares (in shares) | 833,782 | 886,671 | 847,003 |
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 0 |
Employee Benefits (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Minimum service period (over 12 month period) | 1000 hours | ||
Requisite service period | 12 months | ||
Debt structure, amortization period | 20 years | ||
Debt structure, estimated interest rate | 2.46% | ||
Allocation of ESOP shares | $ 207 | $ 220 | |
Employee Stock Ownership Plan (ESOP), Shares in ESOP [Abstract] | |||
Allocated shares (in shares) | 174,584 | 174,584 | |
Committed to be released shares (in shares) | 39,663 | 26,442 | |
Unallocated shares (in shares) | 833,782 | 886,671 | 847,003 |
Total ESOP shares (in shares) | 1,048,029 | 1,048,029 | |
Fair value of unallocated shares | $ 12,982 | $ 12,561 |
Stock-based Compensation - Summary of Non-Vested Restricted Stock Awards (Details) - Restricted Stock Award - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Shares | ||
Non-vested, beginning of period (in shares) | 290,600 | |
Granted (in shares) | 0 | 0 |
Vested (in shares) | 0 | |
Non-vested at end of period (in shares) | 290,600.0 | |
Weighted-Average Grant Date Fair Value | ||
Non-vested at beginning of period (in dollars per share) | $ 13.72 | |
Granted (in dollars per share) | 0.00 | |
Vested (in dollars per share) | 0.00 | |
Non-vested at end of period (in dollars per share) | $ 13.72 |
Fair Value Accounting and Measurement - Schedule of Assets on a Nonrecurring Basis (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | $ 6,407 | $ 6,558 |
Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 6,407 | 6,558 |
Nonrecurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 0 | 0 |
Nonrecurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 0 | 0 |
Nonrecurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | $ 6,407 | $ 6,558 |
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