☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
BayCom Corp
|
(Exact Name of Registrant as Specified in its Charter)
|
California
|
37-1849111
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
500 Ygnacio Valley Road, Walnut Creek, California
|
94596
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
|
|
Non-accelerated filer ☒
|
|
(Do not check if a smaller reporting company)
|
|
|
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
|
||
Page No
|
||
PART I. FINANCIAL INFORMATION
|
||
Item 1.
|
Financial Statements
|
|
Condensed Consolidated Balance Sheets (unaudited)
|
5
|
|
Condensed Consolidated Statements of Income (unaudited)
|
6
|
|
Condensed Consolidated Statements of Comprehensive Income (unaudited)
|
7
|
|
Condensed Consolidated Statements of Shareholders' Equity (unaudited)
|
8
|
|
Condensed Consolidated Statements of Cash Flows (unaudited)
|
9 | |
Notes to Condensed Consolidated Financial Statements (unaudited)
|
10
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition
|
|
and Results of Operations
|
35
|
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
54
|
Item 4.
|
Controls and Procedures
|
54
|
PART II. OTHER INFORMATION
|
55
|
|
Item 1.
|
Legal Proceedings
|
55
|
Item 1 A.
|
Risk Factors
|
55
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
55
|
Item 3.
|
Defaults Upon Senior Securities
|
55
|
Item 4.
|
Mine Safety Disclosures
|
55
|
Item 5.
|
Other Information
|
55
|
Item 6.
|
Exhibits
|
56
|
SIGNATURES
|
57
|
|
EXHIBITS
|
ASSETS
|
March 31,
|
December 31,
|
||||||
2018
|
2017
|
|||||||
Cash and due from banks
|
$
|
13,837
|
$
|
14,754
|
||||
Federal funds sold
|
241,714
|
235,099
|
||||||
Cash and cash equivalents
|
255,551
|
249,853
|
||||||
Interest bearing deposits in financial institutions
|
1,245
|
1,743
|
||||||
Investment securities available-for-sale
|
36,789
|
40,505
|
||||||
Federal Home Loan Bank stock, at par
|
4,772
|
4,772
|
||||||
Federal Reserve Bank stock, at par
|
3,353
|
2,987
|
||||||
Loans held for sale
|
250
|
3,245
|
||||||
Loans
|
891,011
|
891,548
|
||||||
Deferred fees, net
|
(432
|
)
|
(469
|
)
|
||||
Allowance for loan losses
|
(4,600
|
)
|
(4,215
|
)
|
||||
Loans, net
|
885,979
|
886,864
|
||||||
Premises and equipment, net
|
8,279
|
8,399
|
||||||
Core deposit intangible
|
4,483
|
4,772
|
||||||
Cash surrender value of Bank owned life insurance policies, net
|
17,211
|
17,132
|
||||||
Goodwill
|
10,365
|
10,365
|
||||||
Interest recievable and other assets
|
13,556
|
15,157
|
||||||
Total Assets
|
$
|
1,241,833
|
$
|
1,245,794
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
Deposits
|
||||||||
Non-interest bearing deposits
|
$
|
320,104
|
$
|
327,309
|
||||
Interest bearing deposits
|
778,669
|
776,996
|
||||||
Total deposits
|
1,098,773
|
1,104,305
|
||||||
Other borrowings
|
6,000
|
6,000
|
||||||
Salary continuation plan
|
4,107
|
4,046
|
||||||
Interest payable and other liabilities
|
4,983
|
7,421
|
||||||
Junior subordinated deferrable interest debentures, net
|
5,402
|
5,387
|
||||||
Total liabilities
|
1,119,265
|
1,127,159
|
||||||
Stockholders' equity
|
||||||||
Preferred stock - no par value; 10,000,000 shares authorized;
|
||||||||
no shares issued and outstamding
|
- | - | ||||||
Common stock, - no par value; authorized 100,000,000 shares authorized
|
||||||||
in 2018 and 2017; 7,512,227 and 7,496,995 shares issued and outstanding
|
||||||||
at March 31, 2018 and December 31, 2017, respectively
|
81,453
|
81,307
|
||||||
Additional paid in capital
|
287
|
287
|
||||||
Accumulated other comprehensive (loss) income, net of tax
|
(69
|
)
|
213
|
|||||
Retained earnings
|
40,897
|
36,828
|
||||||
Total shareholders' equity
|
122,568
|
118,635
|
||||||
Total Liabilities and Shareholders' Equity
|
$
|
1,241,833
|
$
|
1,245,794
|
Three months ended
|
||||||||
March 31,
|
||||||||
2018
|
2017
|
|||||||
Interest and dividend income:
|
||||||||
Loans, including fees
|
$
|
12,280
|
$
|
7,006
|
||||
Investment securities and interest-bearing deposits in banks
|
1,110
|
288
|
||||||
FHLB dividends
|
93
|
86
|
||||||
FRB dividends
|
69
|
22
|
||||||
Total interest and dividend income
|
13,552
|
7,402
|
||||||
Interest expense:
|
||||||||
Deposits
|
979
|
918
|
||||||
Other borrowings
|
159
|
-
|
||||||
Total interest expense
|
1,138
|
918
|
||||||
Net interest income
|
12,414
|
6,484
|
||||||
Provision for loan losses
|
254
|
143
|
||||||
Net interest income after provision for loan losses
|
12,160
|
6,341
|
||||||
Noninterest income:
|
||||||||
Gain on sale of loans
|
651
|
400
|
||||||
Service charges and other fees
|
446
|
143
|
||||||
Loan servicing fees and other income
|
245
|
57
|
||||||
Other income
|
384
|
136
|
||||||
Total noninterest income
|
1,726
|
736
|
||||||
Noninterest expense:
|
||||||||
Salaries and employee benefits
|
4,914
|
3,082
|
||||||
Occupancy and equipment
|
975
|
569
|
||||||
Data processing
|
708
|
360
|
||||||
Other
|
1,526
|
628
|
||||||
Total noninterest expense
|
8,123
|
4,639
|
||||||
Income before provision for income taxes
|
5,763
|
2,438
|
||||||
Provision for income taxes
|
1,694
|
1,022
|
||||||
Net income
|
$
|
4,069
|
$
|
1,416
|
||||
Earnings per common share:
|
||||||||
Basic: Earnings per common share
|
$
|
0.54
|
$
|
0.26
|
||||
Weighted average shares outstanding
|
7,512,227
|
5,397,930
|
||||||
Diluted: Earnings per common share
|
$
|
0.54
|
$
|
0.26
|
||||
Weighted average shares outstanding
|
7,512,227
|
5,411,554
|
Three months ended
|
||||||||
March 31,
|
||||||||
2018
|
2017
|
|||||||
Net income
|
$
|
4,069
|
$
|
1,416
|
||||
Other comprehensive (loss) income:
|
||||||||
Unrealized (loss) gain on available-for-sale investment securities,
|
||||||||
net of tax of $78 in 2018 and $3 in 2017
|
(282
|
)
|
9
|
|||||
Total comprehensive income
|
$
|
3,787
|
$
|
1,425
|
Accumulated
|
||||||||||||||||||||||||
Common
|
Additional
|
Other
|
Total
|
|||||||||||||||||||||
Number of
|
Stock
|
Paid in
|
Retained
|
Comprehensive
|
Shareholders'
|
|||||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Income/(loss)
|
Equity
|
|||||||||||||||||||
Balance, December 31, 2016
|
5,472,426
|
$
|
46,084
|
$
|
287
|
$
|
31,604
|
$
|
88
|
$
|
78,063
|
|||||||||||||
Net income
|
1,416
|
-
|
1,416
|
|||||||||||||||||||||
Other comprehensive loss, net
|
9
|
9
|
||||||||||||||||||||||
Restricted stock granted
|
16,865
|
|||||||||||||||||||||||
Stock based compensation
|
92
|
92
|
||||||||||||||||||||||
Balance, March 31, 2017
|
5,489,291
|
46,176
|
287
|
33,020
|
97
|
79,580
|
||||||||||||||||||
Net income
|
3,844
|
3,844
|
||||||||||||||||||||||
Other comprehensive income, net
|
80
|
80
|
||||||||||||||||||||||
Reclassification of stranded tax
|
||||||||||||||||||||||||
effects from change in tax rate
|
(36
|
)
|
36
|
-
|
||||||||||||||||||||
Restricted stock granted
|
11,635
|
-
|
||||||||||||||||||||||
Stock based compensation
|
331
|
331
|
||||||||||||||||||||||
Issuance of shares
|
1,997,960
|
34,824
|
34,824
|
|||||||||||||||||||||
Repurchase of shares
|
(1,891
|
)
|
(24
|
)
|
(24
|
)
|
||||||||||||||||||
Balance, December 31, 2017
|
7,496,995
|
81,307
|
287
|
36,828
|
213
|
118,635
|
||||||||||||||||||
Net income
|
4,069
|
4,069
|
||||||||||||||||||||||
Other comprehensive loss, net
|
(282
|
)
|
(282
|
)
|
||||||||||||||||||||
Restricted stock granted
|
15,232
|
|||||||||||||||||||||||
Stock based compensation
|
146
|
146
|
||||||||||||||||||||||
Balance, March 31, 2018
|
7,512,227
|
$
|
81,453
|
$
|
287
|
$
|
40,897
|
$
|
(69
|
)
|
$
|
122,568
|
Three months ended
|
||||||||
March 31,
|
||||||||
2018
|
2017
|
|||||||
Cash flow from operating activities:
|
||||||||
Net earnings
|
$
|
4,069
|
$
|
1,416
|
||||
Adjustments to reconcile net earnings to net cash provided (used in)
|
||||||||
by operating activities:
|
||||||||
Decrease in deferred tax asset | 772 | 1,028 | ||||||
Mark-to-market accretion on acquired loans
|
(1,041
|
)
|
(595
|
)
|
||||
Gain on sale of loans
|
(651
|
)
|
(400
|
)
|
||||
Proceeds from sale of loans
|
8,754
|
2,671
|
||||||
Loans originated for sale
|
(6,378
|
)
|
(15,558
|
)
|
||||
Mark-to-market accretion Trust Preferred
|
15
|
-
|
||||||
Change in cash surrender value of life insurance policies
|
(79
|
)
|
(50
|
)
|
||||
Provision for loan losses
|
254
|
143
|
||||||
Amortization/accretion of premium discount on investment securities
|
120
|
39
|
||||||
Depreciation and amortization
|
231
|
125
|
||||||
Core deposit intangible amortization
|
289
|
83
|
||||||
Stock-based compensation expense
|
146
|
91
|
||||||
(Decrease) increase in deferred loan origination fees, net
|
(37
|
)
|
126
|
|||||
Decrease (increase) in accrued interest receivable and other assets
|
948
|
(558
|
) | |||||
Increase in salary continuation liability
|
60
|
21
|
||||||
(Decrease) increase in accrued expenses and other liabilities
|
(2,438
|
)
|
1,093
|
|||||
Net cash provided by (used in) operating activities
|
5,034
|
(10,325
|
)
|
|||||
Cash flows from investing activities:
|
||||||||
Proceeds from interest bearing deposits in financial institutions
|
498
|
-
|
||||||
Proceeds from the maturity and repayment of securities
|
3,195
|
1,710
|
||||||
Purchase of Federal Reserve Bank Stock
|
(366
|
)
|
(14
|
)
|
||||
Net decrease (increase) in loans
|
2,980
|
(13,689
|
)
|
|||||
Purchases of bank premises, equipment, leasehold improvements
|
(111
|
)
|
(28
|
)
|
||||
Net cash provided by (used in) investing activities
|
6,196
|
(12,021
|
)
|
|||||
Cash flows from financing activities
|
||||||||
Net increase in demand, interest bearing and savings deposits
|
|
3,700
|
|
16,079
|
||||
Net (decrease) increase in time deposits
|
(9,232
|
)
|
3,115
|
|||||
Net cash (used in) provided by financing activities
|
(5,532
|
)
|
19,194
|
|||||
Increase (decrease) in cash and cash equivalents
|
5,698
|
(3,152
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
249,853
|
128,684
|
||||||
Cash and cash equivalents at end of period
|
$
|
255,551
|
$
|
125,532
|
||||
Additional cash flow information:
|
||||||||
Interest paid
|
$
|
989
|
$
|
921
|
||||
Income taxes paid
|
-
|
- | ||||||
Non-cash investing and financing activities:
|
||||||||
Change in unrealized (loss) gain in available for-sale securities, net of tax
|
$
|
(282
|
)
|
$
|
9
|
FULB
|
Plaza Bank
|
|||||||
Acquisition
|
Acquisition
|
|||||||
Date
|
Date
|
|||||||
April 28, 2017
|
November 3, 2017
|
|||||||
Fair value of Assets:
|
(Dollars in thousands) | |||||||
Cash and due from Banks
|
$
|
27,992
|
$
|
1,124
|
||||
Federal funds sold
|
75,037
|
-
|
||||||
Total cash and cash equivalents
|
103,029
|
1,124
|
||||||
Investment securities
|
30,241
|
5,772
|
||||||
FHLB stock
|
2,087
|
493
|
||||||
Loans
|
315,970
|
65,366
|
||||||
Core deposit intangible
|
4,435
|
385
|
||||||
Deferred tax asset, including refunds
|
(164
|
)
|
2,070
|
|||||
Servicing asset
|
1,282
|
-
|
||||||
BOLI
|
6,428
|
-
|
||||||
Other assets
|
9,831
|
630
|
||||||
Total assets acquired
|
473,139
|
75,840
|
||||||
Liabilities:
|
||||||||
Deposits
|
||||||||
Noninterest bearing
|
152,842
|
17,256
|
||||||
Interest bearing
|
275,175
|
36,923
|
||||||
Total deposits
|
428,017
|
54,179
|
||||||
Salary continuation plan
|
764
|
-
|
||||||
Other borrowings
|
10,775
|
10,467
|
||||||
Other liabilities
|
812
|
350
|
||||||
Total liabilities assumed
|
440,368
|
64,996
|
||||||
Stock issued
|
22,860
|
11,964
|
||||||
Cash consideration
|
19,037
|
119
|
||||||
Goodwill
|
$
|
9,126
|
$
|
1,239
|
FULB
|
Plaza Bank
|
|||||||
Acquisition
|
Acquisition
|
|||||||
Date
|
Date
|
|||||||
April 28, 2017
|
November 3, 2017
|
|||||||
(Dollars in thousands) | ||||||||
Book value of net assets acquired
|
$
|
29,321
|
$
|
8,107
|
||||
Fair value adjustments:
|
||||||||
Loans
|
636
|
386
|
||||||
Write-down on real estate investment
|
-
|
|||||||
Time-deposits
|
-
|
(74
|
)
|
|||||
Other borrowings
|
-
|
(30
|
)
|
|||||
Trust preferred securities
|
1,045
|
-
|
||||||
Core deposit intangible
|
4,435
|
385
|
||||||
Deferred tax assets
|
(2,404
|
)
|
2,070
|
|||||
Total purchase accounting adjustments | 3,450 | 2,737 | ||||||
Fair value of net assets acquired
|
32,771
|
10,844
|
||||||
Common stock issued
|
22,860
|
11,964
|
||||||
Cash paid
|
19,037
|
119
|
||||||
Total price paid
|
41,897
|
12,083
|
||||||
Goodwill
|
$
|
9,126
|
$
|
1,239
|
Credit-impaired
|
Non-credit
|
|||||||||||
loans
|
impaired loans
|
Total
|
||||||||||
(Dollars in thousands) | ||||||||||||
Contractually required payments
|
$
|
8,577
|
$
|
379,144
|
$
|
387,721
|
||||||
Less: nonaccretable difference
|
(966
|
)
|
-
|
(966
|
)
|
|||||||
Cash flows expected to be collected (undiscounted)
|
7,611 | 379,144 | 386,755 | |||||||||
Accretable yield
|
(322
|
)
|
(5,097
|
)
|
(5,419
|
)
|
||||||
Fair value of purchased loans
|
$
|
7,289
|
$
|
374,047
|
$
|
381,336
|
Proforma
|
Proforma
|
|||||||
2017
|
2016
|
|||||||
(Dollars in thousands) | ||||||||
Net interest income
|
$
|
47,656
|
$
|
44,635
|
||||
Net income
|
4,387
|
9,380
|
||||||
Basic earnings per share
|
$
|
0.59
|
$
|
1.27
|
||||
Diluted earnings per share
|
0.59
|
1.26
|
FULB
|
Plaza
|
Total
|
||||||||||
Acquisition related expenses in 2017
|
(Dollars in thousands) | |||||||||||
Professional fees
|
$
|
349
|
$
|
225
|
$
|
574
|
||||||
Data processing
|
1,586
|
855
|
2,441
|
|||||||||
Severance expense
|
212
|
75
|
287
|
|||||||||
Other
|
120
|
54
|
174
|
|||||||||
Total
|
$
|
2,267
|
$
|
1,209
|
$
|
3,476
|
Gross
|
Gross
|
|||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
cost
|
gains
|
losses
|
value
|
|||||||||||||
March 31, 2018
|
(Dollars in thousands) | |||||||||||||||
Municipal securities
|
$
|
15,859
|
$
|
74
|
$
|
(201
|
)
|
$
|
15,732
|
|||||||
Mortgage-backed securities
|
9,593
|
98
|
(101
|
)
|
9,590
|
|||||||||||
Collateralized mortgage obligations
|
1,104
|
-
|
(6
|
)
|
1,098
|
|||||||||||
U.S. Government Agencies
|
4,989
|
-
|
(21
|
)
|
4,968
|
|||||||||||
SBA securites
|
5,342
|
64
|
(5
|
)
|
5,401
|
|||||||||||
$
|
36,887
|
$
|
236
|
$
|
(334
|
)
|
$
|
36,789
|
Gross
|
Gross
|
|||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
cost
|
gains
|
losses
|
value
|
|||||||||||||
December 31, 2017
|
(Dollars in thousands) | |||||||||||||||
Municipal securities
|
$
|
15,910
|
$
|
182
|
$
|
(45
|
)
|
$
|
16,047
|
|||||||
Mortgage-backed securities
|
9,621
|
143
|
(24
|
)
|
9,740
|
|||||||||||
Collateralized mortgage obligations
|
1,758
|
1
|
(9
|
)
|
1,750
|
|||||||||||
U.S. Government Agencies
|
6,984
|
-
|
(13
|
)
|
6,971
|
|||||||||||
SBA securites
|
5,929
|
78
|
(10
|
)
|
5,997
|
|||||||||||
$
|
40,202
|
$
|
404
|
$
|
(101
|
)
|
$
|
40,505
|
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Estimated
|
Unrealized
|
Estimated
|
Unrealized
|
Estimated
|
Unrealized
|
|||||||||||||||||||
March 31, 2018
|
Fair Value
|
Loss
|
Fair Value
|
Loss
|
Fair Value
|
Loss
|
||||||||||||||||||
Municipal securities
|
$
|
11,965
|
$
|
(195
|
)
|
$
|
265
|
$
|
(6
|
)
|
$
|
12,230
|
$
|
(201
|
)
|
|||||||||
Mortgage-backed securities
|
7,116
|
(101
|
)
|
28
|
-
|
7,144
|
(101
|
)
|
||||||||||||||||
Collateralized mortgage obligations
|
1,075
|
(6
|
)
|
-
|
-
|
1,075
|
(6
|
)
|
||||||||||||||||
U.S. Government Agencies
|
4,976
|
(21
|
)
|
-
|
-
|
4,976
|
(21
|
)
|
||||||||||||||||
SBA securities
|
141
|
-
|
791
|
(5
|
)
|
932
|
(5
|
)
|
||||||||||||||||
Total
|
$
|
25,273
|
$
|
(323
|
)
|
$
|
1,084
|
$
|
(11
|
)
|
$
|
26,357
|
$
|
(334
|
)
|
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Estimated
|
Unrealized
|
Estimated
|
Unrealized
|
Estimated
|
Unrealized
|
|||||||||||||||||||
December 31, 2017
|
Fair Value
|
Loss
|
Fair Value
|
Loss
|
Fair Value
|
Loss
|
||||||||||||||||||
Municipal securities
|
$
|
4,011
|
$
|
(39
|
)
|
$
|
267
|
$
|
(6
|
)
|
$
|
4,278
|
$
|
(45
|
)
|
|||||||||
Mortgage-backed securities
|
4,075
|
(24
|
)
|
-
|
-
|
4,075
|
(24
|
)
|
||||||||||||||||
Collateralized mortgage obligations
|
1,201
|
(9
|
)
|
-
|
-
|
1,201
|
(9
|
)
|
||||||||||||||||
U.S. Government Agencies
|
6,981
|
(13
|
)
|
-
|
-
|
6,981
|
(13
|
)
|
||||||||||||||||
SBA securities
|
1,245
|
(10
|
)
|
-
|
-
|
1,245
|
(10
|
)
|
||||||||||||||||
Total
|
$
|
17,513
|
$
|
(95
|
)
|
$
|
267
|
$
|
(6
|
)
|
$
|
17,780
|
$
|
(101
|
)
|
Amortized
|
Fair
|
|||||||
Cost
|
Value
|
|||||||
Available-for-sale:
|
(Dollars in thousands) | |||||||
Due in one year or less
|
$
|
3,248
|
$
|
3,242
|
||||
Due after one through five years
|
7,425
|
7,991
|
||||||
Due after five years through ten years
|
16,089
|
14,846
|
||||||
Due after ten years
|
10,125
|
10,710
|
||||||
$
|
36,887
|
$
|
36,789
|
March 31,
|
December 31,
|
||||||||
2018
|
2017
|
||||||||
(Dollars in thousands) | |||||||||
Commercial and industrial
|
$
|
115,144
|
$
|
113,801
|
|||||
Construction and land
|
28,353
|
22,720
|
|||||||
Commercial real estate
|
662,909
|
669,150
|
|||||||
Residential real estate
|
84,508
|
84,781
|
|||||||
Consumer
|
97
|
1,096
|
|||||||
Gross loans
|
891,011
|
891,548
|
|||||||
Net deferred loan fees
|
(432
|
)
|
(469
|
)
|
|||||
Allowance for loan losses | (4,600 | ) | (4,215 | ) | |||||
Total
|
$
|
885,979
|
$
|
886,864
|
Unpaid
|
Average
|
|||||||||||||||||||
Recorded
|
Principal
|
Related
|
Recorded
|
Income
|
||||||||||||||||
Investment
|
Balance
|
Allowance
|
Investment
|
Recognized
|
||||||||||||||||
March 31, 2018
|
(Dollars in thousands) | |||||||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||
Commercial and industrial
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Construction and land
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Commercial real estate
|
866
|
866
|
-
|
890
|
10
|
|||||||||||||||
Residential
|
132
|
132
|
-
|
132
|
-
|
|||||||||||||||
Consumer
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
With an allowance recorded:
|
||||||||||||||||||||
Commercial and industrial
|
11
|
11
|
11
|
11
|
-
|
|||||||||||||||
Construction and land
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Commercial real estate
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Residential
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Consumer
|
-
|
-
|
-
|
-
|
-
|
Unpaid
|
Average
|
|||||||||||||||||||
Recorded
|
Principal
|
Related
|
Recorded
|
Income
|
||||||||||||||||
Investment
|
Balance
|
Allowance
|
Investment
|
Recognized
|
||||||||||||||||
December 31, 2017
|
(Dollars in thousands) | |||||||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||
Commercial and industrial
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Construction and land
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Commercial real estate
|
1,120
|
1,228
|
-
|
1,147
|
56
|
|||||||||||||||
Residential
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Consumer
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
With an allowance recorded:
|
||||||||||||||||||||
Commercial and industrial
|
13
|
13
|
13
|
13
|
2
|
|||||||||||||||
Construction and land
|
||||||||||||||||||||
Commercial real estate
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Residential
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Consumer
|
-
|
-
|
-
|
-
|
-
|
March 31,
|
December 31,
|
|||||||
2018
|
2017
|
|||||||
(Dollars in thousands) | ||||||||
Commercial & industrial
|
$
|
11
|
$
|
13
|
||||
Construction and land
|
-
|
-
|
||||||
Commercial real estate
|
86
|
166
|
||||||
Residential
|
132
|
-
|
||||||
Consumer
|
-
|
-
|
||||||
Total non-accrual loans
|
$
|
229
|
$
|
179
|
March 31,
|
December 31,
|
|||||||
2018
|
2017
|
|||||||
(Dollars in thousands) | ||||||||
Commercial and industrial
|
$
|
11
|
$
|
13
|
||||
Construction and land
|
-
|
-
|
||||||
Commercial real estate
|
780
|
1,032
|
||||||
Residential
|
-
|
-
|
||||||
Consumer
|
-
|
-
|
||||||
Total TDR's
|
$
|
791
|
$
|
1,045
|
March 31,2018
|
December 31,2017
|
|||||||||||||||
Unpaid
|
Unpaid
|
|||||||||||||||
Principal
|
Carrying
|
Principal
|
Carrying
|
|||||||||||||
Balance
|
Value
|
Balance
|
Value
|
|||||||||||||
(Dollars in thousands) | ||||||||||||||||
Commercial and industrial
|
$
|
139
|
$
|
3
|
$
|
149
|
$
|
2
|
||||||||
Construction and land
|
- |
-
|
-
|
- | ||||||||||||
Commercial real estate
|
16,321
|
13,765
|
17,268
|
14,313
|
||||||||||||
Residential
|
-
|
-
|
-
|
-
|
||||||||||||
Consumer
|
-
|
-
|
-
|
-
|
||||||||||||
Total purchased credit impaired loans
|
$
|
16,460
|
$
|
13,768
|
$
|
17,417
|
$
|
14,315
|
As of and For the Three Months Ended March 31, 2018
|
||||||||||||||||||||||||||||
Commercial
|
Construction
|
Commercial
|
||||||||||||||||||||||||||
and Industrial
|
and Land
|
Real Estate
|
Residential
|
Consumer
|
Unallocated
|
Total
|
||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Allowance for loan losses
|
||||||||||||||||||||||||||||
Beginning balance
|
$
|
841
|
$
|
199
|
$
|
2,620
|
$
|
150
|
$
|
3
|
$
|
402
|
$
|
4,215
|
||||||||||||||
Charge-offs
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Recoveries
|
131
|
-
|
-
|
-
|
-
|
-
|
131
|
|||||||||||||||||||||
Provision (reclassification) for
loan losses
|
33
|
52
|
162
|
10
|
(3
|
)
|
-
|
254
|
||||||||||||||||||||
Ending balance
|
$
|
1,005
|
$
|
251
|
$
|
2,782
|
$
|
160
|
$
|
-
|
$
|
402
|
$
|
4,600
|
||||||||||||||
Allowance for loan losses related to:
|
||||||||||||||||||||||||||||
Loans individually evaluated
for impairment |
$
|
11
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
11
|
||||||||||||||
Loans collectively evaluated
for impairment |
994
|
251
|
2,782
|
160
|
-
|
402
|
4,589
|
|||||||||||||||||||||
PCI loans
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Balance of loans:
|
||||||||||||||||||||||||||||
Invidually evaluated for
impairment |
11
|
-
|
866
|
132
|
-
|
-
|
1,009
|
|||||||||||||||||||||
Collectively evaluated for
impairment |
115,131
|
28,354
|
649,816
|
83,086
|
97
|
-
|
876,484
|
|||||||||||||||||||||
PCI loans
|
3
|
-
|
12,475
|
1,290
|
-
|
-
|
13,768
|
|||||||||||||||||||||
Balance of loans collectively
evaluated for impairment |
115,134
|
28,354
|
662,291
|
84,376
|
97
|
-
|
890,252
|
|||||||||||||||||||||
Total
|
$
|
115,145
|
$
|
28,354
|
$
|
663,157
|
$
|
84,508
|
$
|
97
|
$
|
-
|
$
|
891,261
|
December 31, 2017
|
||||||||||||||||||||||||||||
Commercial
|
Construction
|
Commercial
|
||||||||||||||||||||||||||
and Industrial
|
and Land
|
Real Estate
|
Residential
|
Consumer
|
Unallocated
|
Total
|
||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||
Beginning balance
|
$
|
1,011
|
$
|
287
|
$
|
2,105
|
$
|
151
|
$
|
4
|
$
|
217
|
$
|
3,775
|
||||||||||||||
Charge-offs
|
(63
|
)
|
-
|
(3
|
)
|
-
|
(1
|
)
|
-
|
(67
|
)
|
|||||||||||||||||
Recoveries
|
45
|
-
|
-
|
-
|
-
|
-
|
45
|
|||||||||||||||||||||
Provision (reclassification) for
loan losses
|
(152
|
)
|
(88
|
)
|
593
|
(1
|
)
|
-
|
110
|
462
|
||||||||||||||||||
Ending balance
|
$
|
841
|
$
|
199
|
$
|
2,695
|
$
|
150
|
$
|
3
|
$
|
327
|
$
|
4,215
|
||||||||||||||
Allowance for loan losses related to:
|
||||||||||||||||||||||||||||
Loans individually evaluated
for impairment |
$
|
13
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
13
|
||||||||||||||
Loans collectively evaluated
for impairment |
828
|
199
|
2,695
|
150
|
3
|
327
|
4,202
|
|||||||||||||||||||||
PCI loans
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Balance of loans:
|
||||||||||||||||||||||||||||
Invidually evaluated for
impairment |
13
|
-
|
1,120
|
-
|
-
|
-
|
1,133
|
|||||||||||||||||||||
Collectively evaluated for
impairment |
114,357
|
22,720
|
657,686
|
83,486
|
1,096
|
-
|
879,345
|
|||||||||||||||||||||
PCI loans
|
3
|
-
|
13,017
|
1,295
|
-
|
-
|
14,315
|
|||||||||||||||||||||
Balance of loans collectively
evaluated for impairment |
114,360
|
22,720
|
670,703
|
84,781
|
1,096
|
-
|
893,660
|
|||||||||||||||||||||
Total
|
$
|
114,373
|
$
|
22,720
|
$
|
671,823
|
$
|
84,781
|
$
|
1,096
|
$
|
-
|
$
|
894,793
|
March 31, 2017
|
||||||||||||||||||||||||||||
Commercial
|
Construction
|
Commercial
|
||||||||||||||||||||||||||
and Industrial
|
and Land
|
Real Estate
|
Residential
|
Consumer
|
Unallocated
|
Total
|
||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Allowance for loan losses
|
||||||||||||||||||||||||||||
Beginning balance
|
$
|
1,011
|
$
|
287
|
$
|
2,105
|
$
|
151
|
$
|
4
|
$
|
217
|
$
|
3,775
|
||||||||||||||
Charge-offs
|
-
|
-
|
(3
|
)
|
-
|
-
|
-
|
(3
|
)
|
|||||||||||||||||||
Recoveries
|
10
|
-
|
-
|
-
|
-
|
-
|
10
|
|||||||||||||||||||||
Provision for loan losses
|
(84
|
)
|
(8
|
)
|
245
|
(12
|
)
|
(2
|
)
|
4
|
143
|
|||||||||||||||||
Ending balance
|
$
|
937
|
$
|
279
|
$
|
2,347
|
$
|
139
|
$
|
2
|
$
|
221
|
$
|
3,925
|
||||||||||||||
Allowance for loan losses related to:
|
||||||||||||||||||||||||||||
Loans individually evaluated
for impairment |
$
|
25
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
25
|
||||||||||||||
Loans collectively evaluated
for impairment |
912
|
279
|
2,347
|
139
|
2
|
221
|
3,900
|
|||||||||||||||||||||
PCI loans
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||
Balance of loans:
|
||||||||||||||||||||||||||||
Invidually evaluated for
impairment |
268
|
-
|
724
|
-
|
-
|
-
|
992
|
|||||||||||||||||||||
Collectively evaluated for
impairment |
73,464
|
20,878
|
403,015
|
27,977
|
1,125
|
-
|
526,459
|
|||||||||||||||||||||
PCI loans
|
2
|
-
|
6,624
|
1,457
|
-
|
-
|
8,083
|
|||||||||||||||||||||
Balance of loans collectively
evaluated for impairment |
73,466
|
20,878
|
409,639
|
29,434
|
1,125
|
-
|
534,542
|
|||||||||||||||||||||
Total
|
$
|
73,734
|
$
|
20,878
|
$
|
410,363
|
$
|
29,434
|
$
|
1,125
|
$
|
-
|
$
|
535,534
|
Recorded
|
||||||||||||||||||||||||||||||||
Greater
|
Investment >
|
|||||||||||||||||||||||||||||||
30-59 Days
|
60-89 Days
|
Than
|
Total Past
|
Total Loans
|
90 Days and
|
|||||||||||||||||||||||||||
Past Due
|
Past Due
|
90 Days
|
Due
|
Current
|
PCI Loans
|
Receivable
|
Accruing
|
|||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
March 31, 2018
|
||||||||||||||||||||||||||||||||
Commercial and
industrial |
$
|
149
|
$
|
95
|
$
|
-
|
$
|
244
|
$
|
114,898
|
$
|
3
|
$
|
115,144
|
$
|
-
|
||||||||||||||||
Construction and land
|
-
|
-
|
-
|
-
|
28,354
|
-
|
28,354
|
-
|
||||||||||||||||||||||||
Commercial real estate
|
1,222
|
-
|
-
|
1,222
|
649,460
|
12,475
|
663,158
|
-
|
||||||||||||||||||||||||
Residential
|
132
|
-
|
-
|
132
|
83,086
|
1,290
|
84,508
|
-
|
||||||||||||||||||||||||
Consumer
|
3
|
-
|
-
|
3
|
94
|
-
|
97
|
-
|
||||||||||||||||||||||||
Total
|
$
|
1,506
|
$
|
95
|
$
|
-
|
$
|
1,601
|
$
|
875,892
|
$
|
13,768
|
$
|
891,261
|
$
|
-
|
||||||||||||||||
December 31, 2017
|
||||||||||||||||||||||||||||||||
Commercial and
industrial |
$
|
96
|
$
|
-
|
$
|
-
|
$
|
96
|
$
|
114,274
|
$
|
3
|
$
|
114,373
|
$
|
-
|
||||||||||||||||
Construction and land
|
-
|
-
|
-
|
-
|
22,720
|
-
|
22,720
|
-
|
||||||||||||||||||||||||
Commercial real estate
|
1,446
|
-
|
-
|
1,446
|
657,360
|
13,017
|
671,823
|
-
|
||||||||||||||||||||||||
Residential
|
349
|
-
|
-
|
349
|
83,137
|
1,295
|
84,781
|
-
|
||||||||||||||||||||||||
Consumer
|
3
|
-
|
-
|
3
|
1,093
|
-
|
1,096
|
-
|
||||||||||||||||||||||||
Total
|
$
|
1,894
|
$
|
-
|
$
|
-
|
$
|
1,894
|
$
|
878,584
|
$
|
14,315
|
$
|
894,793
|
$
|
-
|
Special
|
Total
|
|||||||||||||||||||
|
Pass
|
Mention
|
Substandard
|
Doubtful
|
loans
|
|||||||||||||||
March 31, 2018
|
(Dollars in thousands) | |||||||||||||||||||
Commercial and industrial
|
$
|
110,354
|
$
|
781
|
$
|
4,010
|
$
|
-
|
$
|
115,145
|
||||||||||
Construction and land
|
25,466
|
-
|
2,887
|
-
|
28,353
|
|||||||||||||||
Commercial real estate
|
655,931
|
3,765
|
3,462
|
-
|
663,158
|
|||||||||||||||
Residential real estate
|
84,376
|
-
|
132
|
-
|
84,508
|
|||||||||||||||
Consumer loans
|
97
|
-
|
-
|
-
|
97
|
|||||||||||||||
Totals
|
$
|
876,224
|
$
|
4,545
|
$
|
10,491
|
$
|
-
|
$
|
891,261
|
Special
|
||||||||||||||||||||
|
Pass
|
Mention
|
Substandard
|
Doubtful
|
Total
|
|||||||||||||||
December 31, 2017
|
(Dollars in thousands) | |||||||||||||||||||
Commercial and industrial
|
$
|
112,650
|
$
|
807
|
$
|
916
|
$
|
-
|
$
|
114,373
|
||||||||||
Construction and land
|
19,833
|
-
|
2,887
|
-
|
22,720
|
|||||||||||||||
Commercial real estate
|
664,551
|
4,058
|
3,214
|
-
|
671,823
|
|||||||||||||||
Residential real estate
|
84,781
|
-
|
-
|
-
|
84,781
|
|||||||||||||||
Consumer loans
|
1,096
|
-
|
-
|
-
|
1,096
|
|||||||||||||||
Total
|
$
|
882,911
|
$
|
4,865
|
$
|
7,017
|
$
|
-
|
$
|
894,793
|
For the Three Months Ended
|
||||||||
March 31, 2018
|
||||||||
Weighted-Average
|
||||||||
Grant Date
|
||||||||
Shares
|
Fair Value
|
|||||||
Non-vested at January 1, 2018
|
67,481
|
$
|
13.51
|
|||||
Granted
|
15,232
|
19.45
|
||||||
Vested
|
(8,706
|
)
|
13.40
|
|||||
Non-vested at March 31, 2018
|
74,007
|
|||||||
Expected to vest assuming no forfeiture over the vesting term
|
74,007
|
For the Three Months Ended
|
||||||||
March 31, 2017
|
||||||||
Weighted-Average
|
||||||||
Grant Date
|
||||||||
Shares
|
Fair Value
|
|||||||
Non-vested at January 1, 2017
|
68,650
|
$
|
11.51
|
|||||
Granted
|
16,865
|
14.86
|
||||||
Vested
|
(5,333
|
)
|
12.47
|
|||||
Non-vested at March 31, 2017
|
80,182
|
|||||||
Expected to vest assuming a no forfeiture over the vesting term
|
80,182
|
Three months ended
|
||||||||
March 31,
|
||||||||
2018
|
2017
|
|||||||
(Dollars in thousands) | ||||||||
Net earnings
|
$
|
4,069
|
$
|
1,416
|
||||
Weighted Average number of shares outstanding
|
7,512,227
|
5,397,930
|
||||||
Diluted effect of restrictive stock grants
|
-
|
13,624
|
||||||
Average number of shares outstanding used to calculate diluted
|
||||||||
earnings per share
|
7,512,227
|
5,411,554
|
As of March 31, 2018
|
||||||||||||||||
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Description of Financial Instruments:
|
(Dollars in thousands) | |||||||||||||||
Municipal securities
|
$
|
15,732
|
$
|
-
|
$
|
15,732
|
$
|
-
|
||||||||
Mortgage-backed securities
|
9,590
|
-
|
9,590
|
-
|
||||||||||||
Collateralized mortgage obligations
|
1,098
|
-
|
1,098
|
-
|
||||||||||||
U.S. Government Agencies
|
4,968
|
-
|
4,968
|
-
|
||||||||||||
SBA securites
|
5,401
|
-
|
5,401
|
-
|
||||||||||||
Total assets measured at fair value
|
$
|
36,789
|
$
|
-
|
$
|
36,789
|
$
|
-
|
As of December 31, 2017
|
||||||||||||||||
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Description of Financial Instruments:
|
(Dollars in thousands) | |||||||||||||||
Municipal securities
|
$
|
16,047
|
$
|
-
|
$
|
16,047
|
$
|
-
|
||||||||
Mortgage-backed securities
|
9,740
|
-
|
9,740
|
-
|
||||||||||||
Collateralized mortgage obligations
|
1,750
|
-
|
1,750
|
-
|
||||||||||||
U.S. Government Agencies
|
6,971
|
-
|
6,971
|
-
|
||||||||||||
SBA securities
|
5,997
|
-
|
5,997
|
-
|
||||||||||||
Total assets measured at fair value
|
$
|
40,505
|
$
|
-
|
$
|
40,505
|
$
|
-
|
As of March 31, 2018
|
||||||||||||||||
|
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
(Dollars in thousands) | ||||||||||||||||
Commercial and industrial loans
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Construction and land
|
-
|
-
|
-
|
-
|
||||||||||||
Commercial real estate
|
821
|
-
|
-
|
821
|
||||||||||||
Residential
|
99
|
-
|
-
|
99
|
||||||||||||
Consumer
|
-
|
-
|
-
|
-
|
||||||||||||
Total impaired assets measured at fair value
|
$
|
920
|
$
|
-
|
$
|
-
|
$
|
920
|
As of December 31, 2017
|
||||||||||||||||
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
(Dollars in thousands) | ||||||||||||||||
Commercial and industrial
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Construction and land
|
-
|
-
|
-
|
-
|
||||||||||||
Commercial real estate
|
1,120
|
-
|
-
|
1,120
|
||||||||||||
Residential
|
-
|
-
|
-
|
-
|
||||||||||||
Consumer
|
-
|
-
|
-
|
-
|
||||||||||||
Total impaired assets measured at fair value
|
$
|
1,120
|
$
|
-
|
$
|
-
|
$
|
1,120
|
Carrying
|
Fair
|
Fair value measurements
|
||||||||||||||||||
amount
|
value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||||
Financial assets:
|
(Dollars in thousands) | |||||||||||||||||||
Cash and cash equivalents
|
$
|
255,551
|
$
|
255,551
|
$
|
255,551
|
$
|
-
|
$
|
-
|
||||||||||
Interest-bearing deposits with financial institutions
|
1,245
|
1,245
|
1,245
|
-
|
-
|
|||||||||||||||
Securities available for sale
|
36,789
|
36,789
|
-
|
36,789
|
-
|
|||||||||||||||
Loans, net
|
885,979
|
889,275
|
-
|
-
|
889,275
|
|||||||||||||||
Loans held for sale
|
250
|
250
|
-
|
250
|
-
|
|||||||||||||||
Other equity securities
|
8,125
|
8,125
|
-
|
8,125
|
-
|
|||||||||||||||
Accrued interest receivable
|
4,984
|
4,984
|
-
|
4,984
|
-
|
|||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
1,098,265
|
1,099,093
|
878,753
|
220,340
|
-
|
|||||||||||||||
Subordinated Debentures
|
5,402
|
5,412
|
-
|
-
|
5,412
|
|||||||||||||||
Other borrowings
|
6,000
|
6,000
|
-
|
-
|
6,000
|
|||||||||||||||
Accrued interest payable
|
149
|
149
|
-
|
149
|
-
|
|||||||||||||||
Off-balance-sheet liabilities:
|
||||||||||||||||||||
Undisbursed loan commitments, lines of credit,
|
||||||||||||||||||||
standby letters of credit
|
310
|
310
|
-
|
-
|
310
|
Carrying
|
Fair
|
Fair value measurements
|
||||||||||||||||||
amount
|
value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||||
Financial assets:
|
(Dollars in thousands) | |||||||||||||||||||
Cash and cash equivalents
|
$
|
249,853
|
$
|
249,853
|
$
|
249,853
|
$
|
-
|
$
|
-
|
||||||||||
Interest-bearing deposits with financial institutions
|
1,743
|
1,743
|
1,743
|
-
|
-
|
|||||||||||||||
Securities available for sale
|
40,505
|
40,505
|
-
|
40,505
|
-
|
|||||||||||||||
Other equity securities
|
7,759
|
7,759
|
-
|
7,759
|
-
|
|||||||||||||||
Loans, net
|
886,864
|
883,361
|
-
|
-
|
883,361
|
|||||||||||||||
Loans held for sale
|
3,245
|
3,245
|
-
|
3,245
|
-
|
|||||||||||||||
Accrued interest receivable
|
3,002
|
3,002
|
-
|
3,002
|
-
|
|||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
1,104,305
|
1,104,665
|
875,506
|
229,159
|
-
|
|||||||||||||||
Subordinated Debentures
|
5,387
|
5,387
|
-
|
-
|
5,387
|
|||||||||||||||
Other borrowings
|
6,000
|
6,000
|
-
|
-
|
6,000
|
|||||||||||||||
Accrued interest payable
|
141
|
141
|
-
|
141
|
-
|
|||||||||||||||
Off-balance-sheet liabilities:
|
||||||||||||||||||||
Undisbursed loan commitments, lines of credit,
|
||||||||||||||||||||
standby letters of credit and Mastercard lines of credit
|
310
|
310
|
-
|
-
|
310
|
March 31,
|
December, 31
|
March 31,
|
||||||||||
2018
|
2017
|
2017
|
||||||||||
(Dollars in thousands) | ||||||||||||
Commercial and industrial
|
$
|
115,143
|
$
|
114,373
|
$
|
73,731
|
||||||
Real estate:
|
||||||||||||
Residential
|
83,218
|
83,486
|
27,976
|
|||||||||
Multifamily residential
|
112,032
|
113,759
|
37,533
|
|||||||||
Owner occupied CRE
|
241,279
|
251,712
|
166,965
|
|||||||||
Non-owner occupied CRE
|
297,372
|
293,332
|
199,238
|
|||||||||
Construction and land
|
28,353
|
22,720
|
20,877
|
|||||||||
Total real estate
|
762,254
|
765,009
|
452,589
|
|||||||||
Consumer
|
97
|
1,096
|
1,125
|
|||||||||
PCI loans
|
13,767
|
14,315
|
8,083
|
|||||||||
Total loans
|
891,261
|
894,793
|
535,528
|
|||||||||
Deferred loan fees and costs, net
|
(432
|
)
|
(469
|
)
|
(161
|
)
|
||||||
Allowance for loan losses
|
(4,600
|
)
|
(4,215
|
)
|
(3,925
|
)
|
||||||
Loans receivable, net
|
$
|
886,229
|
$
|
890,109
|
$
|
531,442
|
San Francisco Bay
|
Total in State of
|
|||||||||||||||||||||||||||||||||||||||
Region(1)
|
Other California
|
California
|
All Other States(2)
|
Total
|
||||||||||||||||||||||||||||||||||||
Amount
|
% of
|
Amount
|
% of
|
Amount
|
% of
|
Amount
|
% of
|
Amount
|
% of
|
|||||||||||||||||||||||||||||||
Total in
|
Total in
|
Total in
|
Total in
|
Total in
|
||||||||||||||||||||||||||||||||||||
Category
|
Category
|
Category
|
Category
|
Category
|
||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Commercial and industrial
|
$
|
88,704
|
15.6
|
%
|
$
|
8,177
|
4.6
|
%
|
$
|
96,881
|
13.0
|
%
|
$
|
18,263
|
12.3
|
%
|
$
|
115,144
|
12.9
|
%
|
||||||||||||||||||||
Real estate:
|
||||||||||||||||||||||||||||||||||||||||
Residential
|
$ |
62,262
|
11.0
|
%
|
$ |
8,436
|
4.8
|
%
|
$ |
70,698
|
9.5
|
%
|
$ |
13,810
|
9.3
|
%
|
$ |
84,508
|
9.5
|
%
|
||||||||||||||||||||
Multifamily residential
|
79,822
|
14.1
|
%
|
15,421
|
8.8
|
%
|
95,243
|
12.8
|
%
|
21,119
|
14.2
|
%
|
116,362
|
13.1
|
%
|
|||||||||||||||||||||||||
Owner occupied CRE
|
159,963
|
28.2
|
%
|
49,549
|
28.1
|
%
|
209,512
|
28.2
|
%
|
36,375
|
24.5
|
%
|
245,887
|
27.6
|
%
|
|||||||||||||||||||||||||
Non-owner occupied
|
160,994
|
28.4
|
%
|
85,331
|
48.4
|
%
|
246,325
|
33.2
|
%
|
54,585
|
36.8
|
%
|
300,910
|
33.8
|
%
|
|||||||||||||||||||||||||
Construction and land
|
15,033
|
2.7
|
%
|
9,282
|
5.3
|
%
|
24,315
|
3.3
|
%
|
4,039
|
2.7
|
%
|
28,353
|
3.2
|
%
|
|||||||||||||||||||||||||
Total real estate
|
$ |
478,074
|
$ |
168,019
|
$ |
646,093
|
$ |
129,928
|
$ |
776,020
|
||||||||||||||||||||||||||||||
Consumer and other
|
$ |
72
|
0.0
|
%
|
$ |
-
|
0.0
|
%
|
$ |
72
|
0.0
|
%
|
$ |
25
|
0.0
|
%
|
$ |
97
|
0.0
|
%
|
(1)
|
Includes Alameda, Contra Costa, Solano, Napa, Sonoma, Marin, San Francisco, San Joaquin, San Mateo and Santa Clara counties.
|
(2)
|
Includes loans located in the states of New Mexico, Washington and other states. At March 31, 2018, loans in New Mexico and Washington totaled $68.0 million and $38.0 million, respectively.
|
·
|
Pass rated loans (typically performing loans) are accounted for in accordance with ASC Topic 310-20 "Nonrefundable Fees and Other Costs" as these loans do not have evidence of credit deterioration since origination.
|
·
|
Non-impaired loans (typically performing substandard loans) are accounted for in accordance with ASC Topic 310-30 if they display at least some level of credit deterioration since origination.
|
·
|
Impaired loans (typically substandard loans on non-accrual status) are accounted for in accordance with ASC Topic 310-30 as they display significant credit deterioration since origination.
|
March 31,
|
Dec. 31,
|
Mar. 31,
|
||||||||||
2018
|
2017
|
2017
|
||||||||||
(Dollars in thousands)
|
||||||||||||
Loans accounted for on a non-accrual basis
|
||||||||||||
Commercial and industrial
|
$
|
11
|
$
|
13
|
$
|
268
|
||||||
Real estate:
|
||||||||||||
Residential
|
132
|
-
|
-
|
|||||||||
Multifamily residential
|
-
|
-
|
-
|
|||||||||
Owner occupied CRE
|
-
|
78
|
724
|
|||||||||
Non-owner occupied CRE
|
86
|
88
|
-
|
|||||||||
Construction and land
|
-
|
-
|
-
|
|||||||||
Total real estate
|
218
|
166
|
724
|
|||||||||
Consumer and other
|
-
|
-
|
-
|
|||||||||
Total nonaccrual loans
|
229
|
179
|
992
|
|||||||||
More than 90 days past due and still accruing
|
-
|
-
|
-
|
|||||||||
Total of nonaccrual and 90 days past due loans
|
229
|
179
|
992
|
|||||||||
Real estate owned
|
-
|
-
|
1,050
|
|||||||||
Total nonperforming assets(1)
|
$
|
229
|
$
|
179
|
$
|
2,042
|
||||||
Troubled debt restructurings – performing
|
$
|
791
|
$
|
1,045
|
$
|
774
|
||||||
PCI loans
|
$
|
13,768
|
$
|
14,315
|
$
|
8,083
|
||||||
Nonperforming assets to total assets(1)
|
0.02
|
%
|
0.01
|
%
|
0.03
|
%
|
||||||
Nonperforming loans to total loans(1)
|
0.03
|
%
|
0.02
|
%
|
0.04
|
%
|
(1)
|
Performing TDRs are not included in nonperforming loans above, nor are they included in the numerators used to calculate this ratio.
|
March 31,
2018 |
December 31,
2017 |
March 31,
2017 |
||||||||||
(Dollars in thousands)
|
||||||||||||
Allowance at beginning of period
|
$
|
4,215
|
$
|
3,775
|
$
|
3,775
|
||||||
Provisions for loan losses
|
254
|
462
|
143
|
|||||||||
Recoveries:
|
||||||||||||
Commercial and industrial
|
131
|
45
|
10
|
|||||||||
Residential
|
-
|
-
|
-
|
|||||||||
Owner occupied CRE
|
-
|
-
|
-
|
|||||||||
Consumer and other
|
131
|
45
|
10
|
|||||||||
Total recoveries
|
||||||||||||
Charge-offs:
|
||||||||||||
Commercial and industrial
|
-
|
(63
|
)
|
-
|
||||||||
Owner occupied CRE
|
-
|
-
|
(3
|
)
|
||||||||
Non-owner occupied CRE
|
-
|
(3
|
)
|
-
|
||||||||
Consumer and other
|
-
|
(1
|
)
|
-
|
||||||||
Total charge-offs
|
-
|
(67
|
)
|
(3
|
)
|
|||||||
Net charge-offs
|
131
|
(22
|
)
|
7
|
||||||||
Balance at end of period
|
$
|
4,600
|
$
|
4,215
|
$
|
3,925
|
||||||
Ratios
|
||||||||||||
Allowance for loan losses as a percentage of total
|
||||||||||||
loans
|
0.52
|
%
|
0.47
|
%
|
0.73
|
%
|
||||||
Allowance for loan losses to total loans excluding
|
||||||||||||
PCI loans
|
0.52
|
%
|
0.48
|
%
|
0.74
|
%
|
||||||
Allowance for loan losses excluding acquired
|
||||||||||||
loans (loans not covered by the allowance)
|
0.90
|
%
|
0.85
|
%
|
0.84
|
%
|
||||||
Allowance for loan losses as a percentage of total
|
||||||||||||
nonperforming loans
|
2008.73
|
%
|
2352.28
|
%
|
192.21
|
%
|
||||||
Net charge-offs as a percentage of average loans
|
||||||||||||
outstanding during the period
|
(0.01
|
)%
|
0.00
|
%
|
0.00
|
%
|
Percentage Change
|
||||||||||||||||||||
March 31,
|
December 31,
|
March 31,
|
Prior Year
|
|||||||||||||||||
2018
|
2017
|
2017
|
End
|
Prior Year
|
||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Non-interest-bearing
|
$
|
320,104
|
$
|
327,309
|
$
|
142,437
|
(2.2
|
%)
|
124.7
|
%
|
||||||||||
Interest-bearing checking
|
160,792
|
155,011
|
42,130
|
3.7
|
%
|
281.7
|
%
|
|||||||||||||
Regular savings accounts
|
36,544
|
36,539
|
14,321
|
0.0
|
%
|
155.2
|
%
|
|||||||||||||
Money Market accounts
|
361,759
|
356,640
|
246,806
|
1.4
|
%
|
46.6
|
%
|
|||||||||||||
Interest-bearing transactions and
savings accounts |
559,095
|
548,190
|
303,257
|
2.0
|
%
|
84.4
|
%
|
|||||||||||||
Interest-bearing certificates
|
219,574
|
228,806
|
164,259
|
(4.0
|
%)
|
33.7
|
%
|
|||||||||||||
Total deposits
|
$
|
1,098,773
|
$
|
1,104,305
|
$
|
609,953
|
(0.5
|
%)
|
80.1
|
%
|
As of March 31, | ||||||||||||||||||||||||
2018
|
2017
|
|||||||||||||||||||||||
Annualized
|
Annualized
|
|||||||||||||||||||||||
Average
|
Average
|
Average
|
Average
|
|||||||||||||||||||||
Balance (1)
|
Interest
|
Yield
|
Balance
|
Interest
|
Yield
|
|||||||||||||||||||
Interest-earning assets
|
(Dollars in thousands) | |||||||||||||||||||||||
Interest-bearing deposits
|
$
|
235,718
|
$
|
916
|
1.58
|
%
|
$
|
114,727
|
$
|
249
|
0.88
|
%
|
||||||||||||
Investments available-for-sale
|
39,481
|
194
|
1.99
|
%
|
13,537
|
39
|
1.17
|
%
|
||||||||||||||||
FHLB Stock
|
4,772
|
93
|
7.90
|
%
|
2,511
|
86
|
13.89
|
%
|
||||||||||||||||
FRB Stock
|
3,007
|
69
|
9.31
|
%
|
1,413
|
22
|
6.31
|
%
|
||||||||||||||||
Total loans (1)
|
894,591
|
12,280
|
5.57
|
%
|
521,026
|
7,006
|
5.45
|
%
|
||||||||||||||||
Total interest-earning assets
|
1,177,569
|
13,552
|
4.67
|
%
|
653,214
|
7,402
|
4.60
|
%
|
||||||||||||||||
Non-interest-earning assets
|
65,441
|
44,215
|
||||||||||||||||||||||
Total average assets
|
$
|
1,243,010
|
$
|
697,429
|
||||||||||||||||||||
Interest-bearing liabiliities
|
||||||||||||||||||||||||
Savings accounts
|
$
|
37,620
|
$
|
8
|
0.09
|
%
|
$
|
12,924
|
$
|
5
|
0.16
|
%
|
||||||||||||
Interest-bearing checking
|
160,572
|
33
|
0.08
|
%
|
41,293
|
21
|
0.21
|
%
|
||||||||||||||||
Money market accounts
|
353,902
|
413
|
0.47
|
%
|
244,052
|
425
|
0.71
|
%
|
||||||||||||||||
Certificates of deposit
|
223,829
|
525
|
0.95
|
%
|
161,790
|
467
|
1.17
|
%
|
||||||||||||||||
Total deposit accounts
|
775,923
|
979
|
0.51
|
%
|
460,059
|
918
|
0.81
|
%
|
||||||||||||||||
Borrowed funds
|
11,394
|
159
|
5.66
|
%
|
-
|
-
|
0.00
|
%
|
||||||||||||||||
Total interest bearing liabilities
|
787,317
|
1,138
|
0.59
|
%
|
460,059
|
918
|
0.81
|
%
|
||||||||||||||||
Noninterest bearing liabilities
|
333,051
|
140,996
|
||||||||||||||||||||||
Total average liabiliities
|
1,120,368
|
601,055
|
||||||||||||||||||||||
Average equity
|
122,642
|
96,374
|
||||||||||||||||||||||
Total average liabilities and equity
|
$
|
1,243,010
|
$
|
697,429
|
||||||||||||||||||||
Net interest income
|
$
|
12,414
|
$
|
6,484
|
||||||||||||||||||||
Interest rate spread (2)
|
4.08
|
%
|
3.79
|
%
|
||||||||||||||||||||
Net interest margin (3)
|
4.28
|
%
|
4.03
|
%
|
||||||||||||||||||||
Ratio of average interest-earning assets
|
||||||||||||||||||||||||
to average interest-bearing liabilities
|
149.57
|
%
|
141.98
|
%
|
(1)
|
Average balances are average daily balances.
|
(2)
|
Interest rate spread is calculated as the average rate earned on interest-earning assets minus the average rate paid on interest-bearing liabilities.
|
(3)
|
Net interest margin is calculated as net interest income divided by total average earning assets.
|
Three months ended March 31,
|
||||||||||||
2018 compared to 2017
|
||||||||||||
Increase/(Decrease)
|
||||||||||||
Attributable to
|
||||||||||||
Rate
|
Volume
|
Total
|
||||||||||
Interest -earning assets
|
(Dollars in thousands) | |||||||||||
Interest-bearing deposits
|
$
|
404
|
$
|
263
|
$
|
667
|
||||||
Investments available-for-sale
|
80
|
75
|
155
|
|||||||||
Other equity securities
|
(48
|
)
|
102
|
54
|
||||||||
Total loans
|
251
|
5,023
|
5,274
|
|||||||||
Total interest income
|
687
|
5,462
|
6,150
|
|||||||||
Interest-bearing liabilities
|
||||||||||||
Savings accounts
|
(7
|
)
|
10
|
3
|
||||||||
Interest-bearing checking
|
(49
|
)
|
61
|
12
|
||||||||
Money market accounts
|
(203
|
)
|
191
|
(12
|
)
|
|||||||
Certificates of deposit
|
23
|
35
|
58
|
|||||||||
Total deposits
|
(235
|
)
|
296
|
61
|
||||||||
Borrowed funds
|
-
|
159
|
159
|
|||||||||
Total interest expense
|
(235
|
)
|
455
|
220
|
||||||||
Net interest income
|
$
|
923
|
$
|
5,007
|
$
|
5,930
|
Three months
|
||||||||||||||||
ended March 31,
|
Variance
|
|||||||||||||||
2018
|
2017
|
Amount
|
Percent
|
|||||||||||||
(Dollars in thousands) | ||||||||||||||||
Gain on sale of loans
|
$
|
651
|
$
|
400
|
$
|
251
|
62.8
|
%
|
||||||||
Service charges and other fees
|
446
|
143
|
303
|
211.9
|
%
|
|||||||||||
Loan servicing and other loan fees
|
245
|
57
|
188
|
329.8
|
%
|
|||||||||||
Other income and fees
|
384
|
136
|
248
|
182.4
|
%
|
|||||||||||
Total non-interest income
|
$
|
1,726
|
$
|
736
|
$
|
990
|
134.6
|
%
|
Three months
|
||||||||||||||||
ended March 31,
|
Variance
|
|||||||||||||||
2018
|
2017
|
Amount
|
Percent
|
|||||||||||||
(Dollars in thousands) | ||||||||||||||||
Salaries and related benefits
|
$
|
4,914
|
$
|
3,082
|
$
|
1,832
|
59.4
|
%
|
||||||||
Occupancy and Equipment
|
975
|
569
|
406
|
71.4
|
%
|
|||||||||||
Data processing expense
|
708
|
360
|
348
|
96.7
|
%
|
|||||||||||
Other expense
|
1,526
|
628
|
898
|
143.0
|
%
|
|||||||||||
Total non-interest expense
|
$
|
8,123
|
$
|
4,639
|
$
|
3,484
|
75.2
|
%
|
At March 31, 2018
|
At December 31, 2017
|
|||||||||||||||
|
Dollars
|
Ratio
|
Dollars
|
Ratio
|
||||||||||||
Leverage Ratio
|
(Dollars in thousands) | |||||||||||||||
BayCom Corp
|
$
|
105,483
|
8.61
|
%
|
$
|
107,153
|
8.73
|
%
|
||||||||
Minimum requirement for "Well-Capitalized"
|
61,249
|
5.00
|
%
|
61,396
|
5.00
|
%
|
||||||||||
Minimum regulatory requirement
|
48,999
|
4.00
|
%
|
49,117
|
4.00
|
%
|
||||||||||
United Business Bank
|
$
|
115,943
|
9.49
|
%
|
$
|
111,143
|
8.92
|
%
|
||||||||
Minimum requirement for "Well-Capitalized"
|
61,107
|
5.00
|
%
|
62,279
|
5.00
|
%
|
||||||||||
Minimum regulatory requirement
|
48,886
|
4.00
|
%
|
49,823
|
4.00
|
%
|
||||||||||
Common Equity Tier 1 Ratio
|
||||||||||||||||
BayCom Corp
|
$
|
105,483
|
12.10
|
%
|
$
|
100,761
|
11.43
|
%
|
||||||||
Minimum requirement for "Well-Capitalized"
|
56,647
|
6.50
|
%
|
57,285
|
6.50
|
%
|
||||||||||
Minimum regulatory requirement
|
39,217
|
4.50
|
%
|
39,659
|
4.50
|
%
|
||||||||||
United Business Bank
|
$
|
115,943
|
13.31
|
%
|
$
|
111,143
|
12.43
|
%
|
||||||||
Minimum requirement for "Well-Capitalized"
|
56,612
|
6.50
|
%
|
58,109
|
6.50
|
%
|
||||||||||
Minimum regulatory requirement
|
39,193
|
4.50
|
%
|
40,229
|
4.50
|
%
|
||||||||||
Tier 1 Risk-Based Capital Ratio
|
||||||||||||||||
BayCom Corp
|
$
|
111,875
|
12.84
|
%
|
$
|
107,153
|
12.16
|
%
|
||||||||
Minimum requirement for "Well-Capitalized"
|
69,720
|
8.00
|
%
|
70,504
|
8.00
|
%
|
||||||||||
Minimum regulatory requirement
|
52,290
|
6.00
|
%
|
52,878
|
6.00
|
%
|
||||||||||
United Business Bank
|
$
|
115,943
|
13.31
|
%
|
$
|
111,143
|
12.43
|
%
|
||||||||
Minimum requirement for "Well-Capitalized"
|
69,676
|
8.00
|
%
|
71,519
|
8.00
|
%
|
||||||||||
Minimum regulatory requirement
|
52,257
|
6.00
|
%
|
53,639
|
6.00
|
%
|
||||||||||
Total Risk-Based Capital Ratio
|
||||||||||||||||
BayCom Corp
|
$
|
116,785
|
13.40
|
%
|
$
|
111,678
|
12.67
|
%
|
||||||||
Minimum requirement for "Well-Capitalized"
|
87,150
|
10.00
|
%
|
88,131
|
10.00
|
%
|
||||||||||
Minimum regulatory requirement
|
69,720
|
8.00
|
%
|
70,504
|
8.00
|
%
|
||||||||||
United Business Bank
|
$
|
120,853
|
13.88
|
%
|
$
|
115,668
|
12.90
|
%
|
||||||||
Minimum requirement for "Well-Capitalized"
|
88,248
|
10.00
|
%
|
89,399
|
10.00
|
%
|
||||||||||
Minimum regulatory requirement
|
70,598
|
8.00
|
%
|
71,519
|
8.00
|
%
|
(a)
|
Not applicable
|
(b)
|
Use of Proceeds
|
Agreement and Plan of Reorganization and Merger, between BayCom Corp, Bay Commercial Bank, First ULB Corp. and United Business Bank, FSB dated as of December 14, 2016.(1)
|
|
Agreement and Plan of Merger, between BayCom Corp, Bay United Business Bank, and Plaza Bank dated as of June 26, 2017.(1)
|
|
Articles of Incorporation of BayCom Corp.(1)
|
|
Amended and Restated Bylaws of BayCom Corp. (1)
|
|
Form of common stock certificate of BayCom Corp.(1)
|
|
Amended and Restated Employment Agreement, dated February 20, 2018, among BayCom Corp, United Business Bank and George Guarini.(1)
|
|
Amended and Restated Employment Agreement, dated February 20, 2018, among BayCom Corp, United Business Bank and Janet King.(1)
|
|
Amended and Restated Employment Agreement, dated February 20, 2018, among BayCom Corp, United Business Bank and Keary Colwell.(1)
|
|
Amended and Restated Executive Supplemental Compensation Agreement, dated February 20, 2018, between United Business Bank and George J. Guarini.(1)
|
|
Amended and Restated Executive Supplemental Compensation Agreement, dated February 20, 2018, between United Business Bank and Janet King.(1)
|
|
Amended and Restated Executive Supplemental Compensation Agreement, dated February 20, 2018, between United Business Bank and Keary Colwell.(1)
|
|
Amended and Restated Joint Beneficiary Agreement between United Business Bank and George Guarini.(1)
|
|
Bay Commercial Bank 2014 Equity Incentive Plan.(1)
|
|
Form of Restricted Stock Award Agreement under the Bay Commercial Bank 2014 Equity Incentive Plan.(1)
|
|
BayCom Corp Amended and Restated 2017 Omnibus Equity Incentive Plan.(1)
|
|
Form of Restricted Stock Award Agreement under the BayCom Corp Amended and Restated 2017 Omnibus Equity Incentive Plan.(1)
|
|
Form of Non-Qualified Stock Option Agreement under the BayCom Corp Amended and Restated 2017 Omnibus Equity Incentive Plan.(1)
|
|
Form of Incentive Stock Option Agreement under the BayCom Corp Amended and Restated 2017 Omnibus Equity Incentive Plan.(1)
|
|
Form of Restricted Stock Unit Agreement under the BayCom Corp Amended and Restated 2017 Omnibus Equity Incentive Plan.(1)
|
|
Joint Beneficiary Agreement between United Business Bank and Janet King.(1)
|
|
Joint Beneficiary Agreement between United Business Bank and Keary Colwell.(1)
|
|
31.1 | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2 | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32 | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
101
|
The following materials from the Company's Quarterly Report on Form 10‑Q for the quarter ended March 31, 2018 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 Changes in Stockholders' Equity; (5) Consolidated Statements of Cash Flows; and (6) Notes to Consolidated Financial Statements.
|
(1)
|
Incorporated herein by reference to the Registration Statement on Form S-1 filed with the SEC on April 11, 2018 (File No. 333-224236).
|
BAYCOM CORP
|
||
Registrant
|
||
Date: June 15, 2018
|
By:
|
/s/ George Guarini |
George Guarini
Chief Executive Officer
(Principal Executive Officer)
|
||
Date: June 15, 2018
|
By:
|
/s/ Keary Colwell |
Keary Colwell
Senior Executive Vice President
Chief Financial Officer and Chief Administrative Officer
(Principal Financial and Accounting Officer)
|
Date: June 15, 2018
|
/s/ George Guarini | |
George Guarini
Chief Executive Officer
|
Date: June 15, 2018
|
/s/ Keary Colwell | |
Keary Colwell
Senior Executive Vice President, Chief
Financial Officer and Chief Administrative Officer
|
Date: June 15, 2018
|
/s/ George Guarini | |
George Guarini
Chief Executive Officer
|
||
Date: June 15, 2018
|
/s/ Keary Colwell | |
Keary Colwell
Senior Executive Vice President
Chief Financial Officer and Chief Administrative Officer
|
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Jun. 11, 2018 |
|
Details | ||
Registrant Name | BayCom Corp | |
Registrant CIK | 0001730984 | |
SEC Form | 10-Q | |
Period End date | Mar. 31, 2018 | |
Fiscal Year End | --12-31 | |
Trading Symbol | BCML | |
Tax Identification Number (TIN) | 371849111 | |
Number of common stock shares outstanding | 10,869,275 | |
Filer Category | Non-accelerated Filer | |
Current with reporting | Yes | |
Voluntary filer | No | |
Well-known Seasoned Issuer | No | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q1 | |
Entity Incorporation, State Country Name | California | |
Entity Address, Address Line One | 500 Ygnacio Valley Road | |
Entity Address, City or Town | Walnut Creek | |
Entity Address, State or Province | California | |
Entity Address, Postal Zip Code | 94596 | |
City Area Code | 925 | |
Local Phone Number | 476-1800 |
Condensed Consolidated Balance Sheets - Parenthetical - $ / shares |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Details | ||
Preferred Stock, No Par Value | $ 0 | $ 0 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, No Par Value | $ 0 | $ 0 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 7,512,227 | 7,496,995 |
Common Stock, Shares, Outstanding | 7,512,227 | 7,496,995 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Details | ||
Net income | $ 4,069 | $ 1,416 |
Other comprehensive (loss) income: | ||
net of tax of $78 in 2018 and $3 in 2017 | (282) | 9 |
Total comprehensive income | $ 3,787 | $ 1,425 |
Condensed Consolidated Statements of Comprehensive Income - Parenthetical - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Details | ||
Other Comprehensive Income (Loss), Securities, Available-for-Sale, Unrealized Holding Gain (Loss) Arising During Period, Tax | $ 78 | $ 3 |
NOTE 1 - BASIS OF PRESENTATION |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Notes | |
NOTE 1 - BASIS OF PRESENTATION | NOTE 1 BASIS OF PRESENTATION
BayCom Corp (the Company) is a bank holding company headquartered in Walnut Creek, California. United Business Bank (the Bank), the wholly owned banking subsidiary, is a California state-chartered bank which provides a broad range of financial services primarily to local small and mid-sized businesses, service professionals and individuals. In the 14 years of operation, the Bank has grown to 17 full service banking branches. The main office is located in Walnut Creek, California and our branch offices are located in Oakland, Castro Valley, Mountain View, Napa, Stockton (2), Pleasanton, Livermore, San Jose, Long Beach, Sacramento, San Francisco and Glendale, California, and Seattle, Washington (2) and Albuquerque, New Mexico. In addition, the Bank has one loan production office in Los Angeles, California. The condensed consolidated financial statements include the accounts of the Company and the Bank.
All intercompany transactions and balances have been eliminated in consolidation. The condensed consolidated financial statements include all adjustments of a normal and recurring nature, which are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the periods presented.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and footnotes normally included in annual financial statements prepared in conformity with accounting principles generally accepted in the United States of America. Accordingly, these condensed consolidated financial statements should be read in conjunction with the condensed consolidated audited financial statements and notes thereto for the year ended December 31, 2017. Results of operations for interim periods are not necessarily indicative of results for the full year. Certain prior year information has been reclassified to conform to current year presentation. The reclassifications had no impact on consolidated net earnings or shareholders equity.
Revenue Recognition
In accordance with Topic 606, revenues are recognized when control of promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services that are promised within each contract and identifies those that contain performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
All of the Companys revenue from contracts with customers in scope of ASC 606 is recognized in noninterest income and included in our commercial and consumer banking segment. For the three months ended March 31, 2018, the Company recognized $87,000 in deposit fees, and $53,000 in debit card interchange fees considered in scope of ASC 606, and $542,000 of noninterest income considered not in scope of ASC 606.
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. As an emerging growth company we may delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. We intend to take advantage of the benefits of this extended transition period. Accordingly, our condensed consolidated financial statements may not be comparable to companies that comply with such new or revised accounting standards.
|
NOTE 2: ACCOUNTING STANDARDS RECENTLY ISSUED OR ADOPTED |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Notes | |
NOTE 2: ACCOUNTING STANDARDS RECENTLY ISSUED OR ADOPTED | NOTE 2: ACCOUNTING STANDARDS RECENTLY ISSUED OR ADOPTED
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The following steps are applied in the updated guidance: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. This ASU was effective for interim and annual periods beginning after December 15, 2017. The Company adopted ASU No. 2014-09 on January 1, 2018. The Company has analyzed its revenue sources of noninterest income to determine when the satisfaction of the performance obligation occurs and the appropriate recognition of revenue. For further information, see Note 10 Non-interest Income of this report. The adoption of these ASUs did not have a material impact on the Company's condensed consolidated financial statements.
In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10). Changes made to the current measurement model primarily affect the accounting for equity securities and readily determinable fair values, where changes in fair value will impact earnings instead of other comprehensive income. The accounting for other financial instruments, such as loans, investments in debt securities, and financial liabilities is largely unchanged. The ASU also changes the presentation and disclosure requirements for financial instruments including a requirement that public business entities use exit price when measuring the fair value of financial instruments measured at amortized cost for disclosure purposes. The amendments in this ASU were effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company has used the exit price notion in the fair value disclosure of financial instruments in Note 10 of this report. The adoption of ASU 2016-01 did not have a material impact on the Companys condensed consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The most significant change for lessees is the requirement under the new guidance to recognize right-of-use assets and lease liabilities for all leases not considered short-term leases, which is generally defined as a lease term of less than 12 months. This change will result in lessees recognizing right-of-use assets and lease liabilities for most leases currently accounted for as operating leases under current lease accounting guidance. The amendments in this ASU are effective for interim and annual periods beginning after December 15, 2018 for public business entities and one year later for all other entities. Early application of the amendments in the ASU is permitted. The Company is currently evaluating the effects of ASU 2016-02 on its financial statements and disclosures. Although an estimate of the impact of the new leasing standard has not yet been determined, upon adoption the Company expects to report increased assets and increased liabilities on its Consolidated Statements of Financial Condition as a result of recognizing right-of-use assets and lease liabilities related to certain banking offices and certain equipment under noncancelable operating lease agreements, however, based on current leases the adoption is not expected to have a material impact on the Companys consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326). This ASU significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. In issuing the standard, the FASB is responding to criticism that todays guidance delays recognition of credit losses. The standard will replace todays incurred loss approach with an expected loss model. The new model, referred to as the current expected credit loss (CECL) model, will apply to: (1) financial assets subject to credit losses and measured at amortized cost, and (2) certain off-balance sheet credit exposures. This includes, but is not limited to, loans, leases, held-to-maturity securities, loan commitments, and financial guarantees. The CECL model does not apply to available-for-sale (AFS) debt securities. For AFS debt securities with unrealized losses, entities will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than reductions in the amortized cost of the securities. As a result, entities will recognize improvements to estimated credit losses immediately in earnings rather than as interest income over time, as they do today. The ASU also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 also expands the disclosure requirements regarding an entitys assumptions, models, and methods for estimating the allowance for loan and lease losses. In addition, public business entities will need to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination. ASU No. 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019 for SEC filers, one year later for non SEC filing public business entities and annual reporting periods beginning after December 15, 2020 for nonpublic business entities and interim periods within the reporting periods beginning after December 15, 2021. Early adoption is permitted for interim and annual reporting periods beginning after December 15, 2018. Entities will apply the standards provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (i.e., modified retrospective approach). The Company is reviewing the requirements of ASU 2016-13 and expects to begin developing and implementing processes and procedures to ensure it is fully compliant with the amendments at the adoption date. Upon adoption, the Company expects changes in the processes and procedures used 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. The new guidance may result in an increase in the allowance for loan losses which will also reflect the new requirement to include the nonaccretable principal differences on purchased credit-impaired loans; however, the Company is still in the process of determining the magnitude of the change and its impact on the Company's future consolidated financial statements.
In January 2017, the FASB issued ASU No. 2017-04, Intangibles Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment. This guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation, and goodwill impairment will simply be the amount by which a reporting units carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. All other goodwill impairment guidance will remain largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The amendments in this ASU are required for public business entities and other entities that have goodwill reported in their financial statements and have not elected the private company alternative for the subsequent measurement of goodwill. ASU No. 2017-04 is effective for interim and annual reporting periods beginning after December 15, 2021 for public business entities who are not SEC filers and one year later for all other entities. The adoption of ASU 2017-04 is not expected to have a material impact on the Company's future consolidated financial statements.
In February 2018, FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220). This ASU was issued to allow a reclassification from accumulated other comprehensive income to retained earnings from stranded tax effects resulting from the revaluation of the net deferred tax asset ("DTA") to the new corporate tax rate of 21% as a result of the Tax Cuts and Jobs Act of 2017 (Tax Act). The ASU is effective for reporting periods beginning after December 15, 2018 with early adoption permitted. The Company adopted this ASU with the provisional adjustments as reported in the condensed consolidated financial statements as of December 31, 2017. As of March 31, 2018, the Company did not incur any adjustments to the provisional recognition.
In March 2018, FASB issued ASU No. 2018-05, Income Taxes (Topic 740). This ASU was issued to provide guidance on the income tax accounting implications of the Tax Act and allows for entities to report provisional amounts for specific income tax effects of the Act for which the accounting under Topic 740 was not yet complete, but a reasonable estimate could be determined. A measurement period of one-year is allowed to complete the accounting effects under Topic 740 and revise any previous estimates reported. Any provisional amounts or subsequent adjustments included in an entitys financial statements during the measurement period should be included in income from continuing operations as an adjustment to tax expense in the reporting period the amounts are determined. The Company adopted this ASU with the provisional adjustments as reported in the condensed consolidated financial statements as of December 31, 2017. As of March 31, 2018, the Company did not incur any adjustments to the provisional recognition.
|
Note 3 - ACQUISITION |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 3 - ACQUISITION | Note 3 - ACQUISITION
On April 28, 2017, to increase its market area, reduce net funding costs, and improve operating efficiency, the Company acquired all the assets and assumed all the liabilities of First ULB Corp. (FULB) and its subsidiary, United Business Bank, FSB. The Company added eight locations including seven full service branches on one loan production office. The branch offices are located in Oakland, San Jose, Sacramento, San Francisco, Glendale, California and Albuquerque, New Mexico and Tukwila, Washington. The loan production office is located in Los Angeles, California. The Company paid a total of $41.9 million comprised of cash of $19.0 million and 1,371,579 shares of its common stock at a price of $16.66 per share in exchange for all of the common shares outstanding of FULB. Each share of FULB common stock was converted into .9733 share of the Companys common stock. As of the merger date, the fair value of FULBs consolidated assets totaled approximately $473.1 million and deposits totaled approximately $428.0 million. The fair value of estimates are subject to change during the measurement period, after the acquisition date as additional information relative to the acquisition date fair values becomes available. The merger transaction is accounted for using the acquisition method of accounting for business combinations FASB ASC 805, Business Combinations. The net assets acquired and the liabilities assumed totaled approximately $32.8 million at the date of merger. The Company also assumed the Floating Rate Junior Subordinated Deferrable Interest Debentures issued by FULB (the Subordinated Debentures) which are held by the First ULB Statutory Trust 1 (the Trust) and the lease obligation related to each facility.
On November 3, 2017, to enhance its market share in the state of Washington, the Company acquired Plaza Bank (Plaza Bank) adding one branch office located in Seattle, Washington. The Company issued 626,381 shares of its common stock at a price of $19.10 per share in exchange for the all of the common shares outstanding of Plaza Bank. Each share of Plaza Banks common stock outstanding was converted into .084795 share of the Companys common stock. As of the merger date, the fair value of Plaza Banks assets totaled approximately $75.8 million and deposits totaled approximately $54.2 million. The fair value of estimates are subject to change during the measurement period, after the acquisition date as additional information relative to the acquisition date fair values becomes available. The merger transaction is accounted for using the acquisition method of accounting for business combinations FASB ASC 805, Business Combinations. The net assets acquired and the liabilities assumed totaled approximately $10.8 million at the date of merger. The Company assumed the lease obligation related to the branch facility.
The following table summarizes the fair value of the assets acquired and liabilities assumed at the acquisition date:
Goodwill represents the excess of the estimated fair value of the liabilities assets assumed over the estimated fair value of the assets acquired. The consideration paid represented a premium to the book value of pre-Merger institutions net assets at the acquisition date. Goodwill is not tax deductible.
The following table presents the net assets acquired and the estimated fair value adjustments, which resulted in Goodwill at the acquisition date:
Loans The Company engaged a third party to determine the fair value of loans. The fair values for acquired loans were calculated using a discounted cash flow analysis based on the present value of the expected cash flows utilizing market-derived discount rates and certain assumptions related to expected cash flows including prepayment estimates adjusted based on loan type and seasoning, and probability of default and loss severity. For purchased non-credit impaired (PNCI) loans, the total gross contractual amounts receivable was $379.1 million as of the acquisition date. For purchased credit impaired (PCI) loans, the total contractual amounts receivable was $8.6 million as of the date of acquisition. The fair value of the PCI loans is estimated to total $7.3 million as of the date of acquisition.
The PNCI loans with similar characteristics were grouped together and were treated in the aggregate when applying the discount rate on the expected cash flows. Aggregation factors considered include the type of loan and related collateral, risk classification, fixed or variable interest rate, term of loan and whether or not the loan was amortizing. The discount rates used for the similar groups of loans are based on current market rates for new originations of comparable loans, where available, and include adjustments for credit and liquidity factors. In addition, the guarantee of certain retained U.S. Small Business Administration (SBA) guaranteed loans is reflected in the fair value.
At the acquisition date, the contractual amount and timing of undiscounted principal and interest payments and the estimated the amount and timing of undiscounted expected principal and interest payments was used to estimate the fair value of PCI loans. The difference between these two amounts represented the nonaccretable difference. On the acquisition date, the amount by which the undiscounted expected cash flows exceed the estimated fair value of the acquired loans is the accretable yield. The accretable yield is then measured at each financial reporting date and represented the difference between the remaining undiscounted expected cash flows and the current carrying value of the loans. For PCI loans the accretable yield is accreted into interest income over the life of the estimated remaining cash flows. At each financial reporting date, the carrying value of each PCI loan is compared to an updated estimate of expected principal payment or recovery on each loan. To the extent that the loan carrying amount exceeds the updated expected principal payment or recovery, a provision of loan loss would be recorded as a charge to income and an allowance for loan loss established.
The following table reflects contractual cash flows, nonaccretable difference, accretable yield, fair value, purchase discount, and principal balance for the various loan categories as of the acquisition date. For PCI loans, the purchase discount does not necessarily represent cash flows to be collected as a portion of it is a nonaccretable difference:
Real Estate Investment The acquisition of FULB includes the acquisition of a real estate investment. The real estate was sold after the merger resulting in a fair value adjustment equal to the sale price net of closing expenses.
Servicing Assets The acquisition of FULB included the acquisition of loans serviced for others including the SBA. The fair value of the servicing assets were calculated based on the net present value of the servicing income stream using a market-derived discount rate and estimated expected cash flows based on the estimated life of the underlying loans less the estimated cost of servicing plus a normal profit.
Core Deposit Intangible
The core deposit intangible asset, with an estimated acquisition date fair value of $4.8 million, represents the value ascribed to the long-term deposit relationships acquired and is being amortized over an estimated average useful life of seven years. Retention rates used to arrive at fair values are based on historical attrition analysis of other comparable financial institutions and managements assumptions. Generally, a run-off of 5% from beginning balances is assumed for all account types in the first and second year and includes a deposit growth rate of 1%. The core deposit intangible is estimated not to have a significant residual value.
Deposits
The fair values used for the retail demand deposit accounts and negotiable order of withdrawal or NOW deposits assumed were equal to the amounts payable on demand at the acquisition date. There was no fair value adjustment for FULBs time deposits as the fair values were equal to the carrying value as of the acquisition date based on the discounted cash flow that applied interest rates offered by market participants as of the acquisition date on time deposits with similar maturity dates. The fair values for time deposits are estimated using a discounted cash flow calculation that applies interest rates offered by market participants as of the acquisition date on time deposits with similar maturity terms as the discount rates.
Subordinated Deferrable Interest Debentures
The Subordinated Debentures total of $6.4 million had a fair value of $5.4 million. The fair value adjustment of $1,045,000 for the Subordinated Debentures is equal to the discounted cash flow that applied interest rates offered by market participants as of the acquisition date.
Pro Forma Results of Operations
The operating results of the Company for the year ended December 31, 2017 and 2016 include the operating results of FULB and Plaza Bank since their respective acquisition dates. The following table represents the net interest and other income, basic earnings per share and diluted earning per share as if the acquisition with FULB and Plaza Bank were effective as of January 1, 2017 and 2016 for the respective year in which each acquisition was closed. The unaudited pro forma information in the following table is intended for informational purposes only and is not necessarily indicative of our future operating results for operating results that would have occurred had the mergers been completed at the beginning of each respective year. No assumptions have been applied to the pro forma results of operation regarding possible revenue enhancements, expense efficiencies or asset dispositions.
The contribution of the acquired operations from FULB and Plaza to our results of operations for the 2017 is as follows:
These amounts include the acquisition-related third party expenses, accretion of the discounts on acquired loans and amortization of the fair value mark adjustments on core deposit intangible. FULB and Plaza Banks results of operations prior to their respective merger dates are not included in the Companys results for 2017. The contribution shown above excludes allocated overhead and allocated cost of funds.
Acquisition-related Expenses
Acquisition-related expenses are recognized as incurred and continue until all systems are converted and operational functions become fully integrated. We incurred third-party acquisition-related expenses in the following line items in the statement of income for the year ended December 31, 2017 as follows:
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NOTE 4 - Investments Available for Sale |
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NOTE 4 - Investments Available for Sale | NOTE 4 INVESTMENTS AVAILABLE FOR SALE
The amortized cost and estimated fair values of securities available-for-sale at March 31, 2018 and December 31, 2017 are as follows:
The gross unrealized losses of the available-for-sale investment securities portfolio are summarized according to the duration of the loss period as of March 31, 2018 and December 31, 2017 are as follows:
At March 31, 2018, there were five securities in an unrealized loss position for greater than twelve consecutive months. At the same time, there were 60 securities in an unrealized loss position for twelve or less than twelve consecutive months. At December 31, 2017, there was one security in an unrealized loss position for greater than 12 consecutive months, and there were 48 securities in an unrealized loss position for less than 12 consecutive months. Management periodically evaluates each security in an unrealized loss position to determine if the impairment is temporary or other-than-temporary. The unrealized losses are due solely to interest rate changes and the Company does not intend to sell nor expects it will be required to sell investment securities identified with impairments prior to the earliest of forecasted recovery or the maturity of the underlying investment security. Management has determined that no investment security was other-than-temporarily impaired at March 31, 2018 and December 31, 2017.
The amortized cost and estimated fair value of available-for-sale debt securities as of March 31, 2018 by contractual maturity are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
For the three months ended March 31, 2018 and March 31, 2017, no gross realized gains or losses were recorded.
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NOTE 5 - LOANS |
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Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE 5 - LOANS | NOTE 5 - LOANS
Loans are summarized as follows at March 31, 2018 and December 31, 2017:
As of March 31, 2018, and December 31, 2017 the Companys impaired or non-accrual originated and PCI loans have a related allowance for loss as follows:
The amount of interest on impaired loans not collected for the quarters ended March 31, 2018 and 2017 was zero.
Nonaccrual loans totaled $229,000 and $179,000 as of March 31, 2018 and December 31, 2017, respectively. Impaired loans on accrual are loans that have been restructured and are performing under modified loan agreements, and principal and interest is determined to be collectible. Nonaccrual loans are loans where principal and interest have been determined to not be fully collectible.
The following table presents non-accrual loans for the periods ending March 31, 2018 and December 31, 2017:
The following table presents loans by class modified as troubled debt restructuring (TDR) including any subsequent defaults during the period ending March 31, 2018 and December 31, 2017:
There were no commitments for additional funding of TDR loans as of March 31, 2018. There were no payment defaults during the three months ended March 31, 2018 that were related to receivables modified as TDR in the last three months. As of March 31, 2018, there were no loans modified within the previous twelve months and for which there was a payment default during the period.
Purchase Credit Impaired Loans
As part of acquisitions, the Company has purchased loans, some of which have shown evidence of credit deterioration since origination and it is probable at the acquisition that all contractually requirement payments would not be collected. The carrying amount and unpaid balance of PCI loans are as follows:
The following tables summarize the Companys allowance for loan losses for the three months ended March 31, 2018:
The following table summarizes the Companys allowance for loan losses for the year ended December 31, 2017 and the three months ended March 31, 2017:
Risk rating system
Each loan is assigned a risk grade based on its characteristics. Loans with low to average credit risk are assigned a lower risk grade than those with higher credit risk as determined by the individual loan characteristics.
The Companys Pass loans includes loans with acceptable business or individual credit risk where the borrowers operations, cash flow or financial condition provides evidence of low to average levels of risk. A Special mention asset has potential weaknesses that deserve close attention. If left uncorrected, these potential weaknesses may result in a deterioration of the repayment prospects for the asset or in the Companys credit position at some future date. Special Mention assets are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. A Special Mention rating should be a temporary rating, pending the occurrence of an event that would cause the risk rating to either improve or to be downgraded.
A Substandard asset is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Assets are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. The potential loss does not have to be recognizable in an individual credit for that credit to be risk rated substandard.
Any asset classified Doubtful has all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and value, highly questionable and improbable. Doubtful assets have a high probability of loss, yet certain important and reasonably specific pending factors may work toward the strengthening of the asset.
Losses are recognized as charges to the allowance when the loan or portion of the loan is considered uncollectible or at the time of foreclosure. Recoveries on loans receivable previously charged off are credited to the allowance for loan losses.
The following table provides an aging of the Company's loan receivable as of March 31, 2018 and December 31, 2017:
At March 31, 2018 and December 31, 2017 there were no loans that were 90 days or more past due where interest was still accruing.
As of March 31, 2018, and December 31, 2017 nonaccrual loans totaling $229,000 and $179,000 respectively, were not past due and are reflected in the current category.
The following tables represent the internally assigned grade by class of loans as of March 31, 2018 and December 31, 2017:
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NOTE 6 - BORROWINGS |
3 Months Ended |
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Mar. 31, 2018 | |
Notes | |
NOTE 6 - BORROWINGS | NOTE 6 BORROWINGS
At March 31, 2018 the Company had a secured term borrowing totaling $6.0 million which was subsequently repaid.
The Company has an approved secured borrowing facility with the FHLB for up to 25% of total assets for a term not to exceed five years under a blanket lien of certain types of loans. There were no outstanding borrowings under this facility at March 31, 2018 and December 31, 2017.
As of March 31, 2018, the FHLB had issued a letter of credit on behalf of the Bank totaling $7.45 million as collateral for local agency deposits.
The Company has four Federal Funds lines with available commitments totaling $65.0 million with four correspondent banks. There are no amounts outstanding under these facilities at March 31, 2018 and December 31, 2017. |
Note 7 - Junior Subordinated Deferrable Interest Debentures |
3 Months Ended |
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Mar. 31, 2018 | |
Notes | |
Note 7 - Junior Subordinated Deferrable Interest Debentures | NOTE 7 JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
The Company has an investment in the First ULB Statutory Trust I (the Trust) that is accounted for under the equity method. The Company acquired the Trust in the acquisition of FULB. The Trust is a Delaware business formed with capital of $192,000 for the sole purpose of issuing trust preferred securities fully and unconditionally guaranteed by the Company. The Trust issued 6,200 Floating Rate Capital Trust Pass-Through Securities (Trust Preferred Securities), with a liquidation value of $1,000 per security, for gross proceeds of $6.2 million. The entire proceeds of the issuance were invested by the Trust in $6.4 million of Subordinated Debentures issued by FULB andf assumed by the Company in the FULB acquisition, with identical maturities, repricing and payment terms as the Trust Preferred Securities. The Subordinated Debentures mature on September 15, 2034, bear a current interest rate of 4.83% (based on 3-months Libor plus 2.5%), with quarterly repricing. The Subordinated Debentures are redeemable by the Company subject to prior approval from the Federal Reserve Board of Governors (Federal Reserve), on any March 15, June 15, September 15, or December 15. The redemption price is par plus accrued and unpaid interest, except in the case of redemption under special event which is defined in the debenture. The Trust Preferred Securities are subject to mandatory redemption to the extent of any early redemption of the Subordinated Debentures and upon maturity of the Subordinated Debentures on September 15, 2034. As of March 31, 2018 the Trust Preferred Securities had an outstanding balance, net of mark-to-market, totaling $5.4 million.
Holders of the Trust Preferred Securities are entitled to a cumulative cash distribution on the liquidation amount of $1,000 per security for each successive period beginning on March 15, June 15, September 15 and December 15 of each year. The Company also has the right to defer the payment of interest on each of the Subordinated Debentures for a period not to exceed 20 consecutive quarters, provided that the deferral period does not extend beyond the stated maturity date. During such deferral period, distributions on the corresponding Trust Preferred Securities will also be deferred and the Company may not pay cash dividends to the holders of shares of the Companys common stock. The Company has guaranteed, on a subordinated basis, distributions and other payments due on the Trust Preferred Securities. |
NOTE 8 - EQUITY INCENTIVE PLANS |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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NOTE 8 - EQUITY INCENTIVE PLANS | NOTE 8 EQUITY INCENTIVE PLANS
2017 Omnibus Equity Incentive Plan
The shareholders approved the Omnibus Equity Incentive Plan (2017 Plan) in November 2017. The 2017 Plan provides for the awarding by the Companys Board of Directors of equity incentive awards to employees and non-employee directors. An equity incentive award may be an option, stock appreciation rights, restricted stock units, stock award, other stock-based award or performance award granted under the 2017 Plan. Factors considered by the Board in awarding equity incentives to officers and employees include the performance of the Company, the employees or officers job performance, the importance of his or her position, and his or her contribution to the organizations goals for the award period. Generally, awards are restricted and have a vesting period of no longer than ten years. Subject to adjustment as provided in the 2017 Plan, the maximum number of shares of common stock that may be delivered pursuant to awards granted under the 2017 Plan is 450,000. The 2017 Plan provides for an annual restricted stock grant limits to officers, employees and directors. The annual stock grant limit per person for officers and employees is the lessor of 50,000 shares or a value of $2.0 million, and per person for directors the maximum is 25,000 shares. All unvested restricted shares outstanding vest in the event of a change in control of the Company. During the three months ended March 31, 2018, 15,232 shares of restricted stock were awarded and no stock options were granted. Awarded shares of restricted stock vest over (i) a one-year period following the date of grant, in the case of the non-employee directors, and (ii) a three-year period following the date of grant, with the initial vesting occurring on the one-year anniversary of the date of grant, in the case of the executive officers.
2014 Omnibus Equity Incentive Plan
In 2014, the shareholders approved the Omnibus Equity Incentive Plan (the 2014 Plan). A total of 148,962 equity incentive awards have been granted under the 2014 Plan. The awards are shares of restricted stock and have a vesting period of one to five years. No future equity awards will be made from the 2014 Plan.
The Company recognizes compensation expense for the restricted stock awards based on the fair value of the shares at the award date. For the three months ended March 31, 2018 and 2017, total compensation expense for these plans was $146,200 and $91,600, respectively.
As of March 31, 2018, there was $1.1 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 two years.
The following table provides a summary of changes in non-vested restricted stock awards for the three months ended March 31, 2018:
The following table provides a summary of changes in non-vested restricted stock awards for the three months ended March 31, 2017:
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NOTE 9 - EARNINGS PER SHARE CALCULATION |
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NOTE 9 - EARNINGS PER SHARE CALCULATION | NOTE 9 EARNINGS PER SHARE CALCULATION
Earnings per common share (EPS) are computed based on the weighted average number of common shares outstanding during the period. Basic EPS excludes dilution and is computed by dividing net earnings available to common stockholders by the weighted average of common shares outstanding. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The number of potential common shares included in the quarterly diluted EPS is computed using the average market price during the three months included in the reporting period under the treasury stock method. The number of potential common shares included in year-to-date diluted EPS is a year-to-date weighted average of potential shares included in each quarterly diluted EPS computation. Dilutive income per share includes the effect of stick options and other potentially dilutive securities using the treasury stock method. There two forms of outstanding common stock and unvested restricted stock rewards. Holders of unvested restricted stock awards receive non-forfeitable dividends at the same rate as common shareholders and they both share equally in undistributed earnings. Under the two-class method, the inference in EPS is not significant for these participating securities. stock awards All common stock equivalents are anti-dilutive when a net loss occurs.
Earnings per share have been computed based on the following:
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NOTE 10 - FAIR VALUE MEASUREMENT |
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NOTE 10 - FAIR VALUE MEASUREMENT | NOTE 10 FAIR VALUE MEASUREMENT
The following table presents information about the Companys assets and liabilities measured at fair value as of March 31, 2018 and December 31, 2017, and the fair value techniques used to determine such fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels (Level 1, Level 2, and Level 3).
Level 1 - Inputs are unadjusted quoted prices in active markets (as defined) for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
Level 2 - Inputs are inputs other than quoted prices include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability such as interest rates and yield curves that are observable at commonly quoted intervals.
Level 3 - Inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.
In certain cases, the inputs used to measure fair value may fall into different levels of the hierarchy. In such cases, the lowest level of inputs that is significant to the measurement is used to determine the hierarchy for the entire asset or liability. Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincides with our quarterly valuation process. There were no transfers between levels during 2018 or 2017.
The following assets are measured at fair value on a recurring basis:
Fair values for investment securities are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.
The following tables present the recorded amounts of impaired loans measured at fair value on a non-recurring basis:
The Bank does not record loans at fair value. However, from time to time, if a loan is considered impaired, a specific allocation within the allowance for loan losses may be required. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. The fair value of impaired loans is estimated using one of several methods, including collateral value, market value of similar debt, enterprise value, liquidation value and cash flows. Those impaired loans not requiring an allowance represent loans for which the value of the expected repayments or collateral equals or exceeds the recorded investments in such loans.
Impaired loans where an allowance is established based on the fair value of collateral or when the impaired loan has been written down to fair value require classification in the fair value hierarchy. If the fair value of the collateral is based on a non-observable market price or a current appraised value, the Bank records the impaired loans as nonrecurring Level 3. When an appraised value is not available, or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Bank also records the impaired loans as nonrecurring Level 3.
Fair Values of Financial Instruments.
There have been no significant changes in valuation techniques during the periods reported. The following methods and assumptions were used to estimate the fair value disclosure for financial instruments:
Cash and cash equivalents - Cash and cash equivalents include cash and due from banks, interest bearing deposits in banks, and Fed funds sold, and are valued at their carrying amounts because of the short-term nature of these instruments.
Interest bearing deposits in financial institutions - Interest bearing deposits in financial institutions are valued based on quoted interest rates for comparable instruments with similar remaining maturities.
Investment Securities - The fair value of available of sale securities are based on quoted market prices, where available. If quoted market prices are not available, fair values are estimated using quoted market prices for similar securities and indications of value provides by brokers.
Other equity securities - The carrying value of the FHLB and FRB stock approximates the fair value because the stock is redeemable at par.
Loans Loans with variable interest rates are valued at the current carrying value, because these loans are regularly adjusted to market rates. The fair value of fixed rate with remaining maturities in excess of one year is estimated by discounting the future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings for the same remaining maturities. The allowance for loan losses is considered to be a reasonable estimate of the loan discount related to credit risk.
Accrued interest receivable and payable - The accrued interest receivable and payable balance approximates its fair value.
Deposits - The fair value of non-interest bearing deposits, interest bearing transaction accounts and savings accounts is the amount payable on demand at the reporting date. The fair value of time deposits is estimated by discounting the future cash flows using current rates offered for deposits of similar remaining maturities.
Other borrowings - The fair value is estimated by discounting the future cash flows using current rates offered for similar borrowings. The discount rate is equal to the market rate of currently offered similar products. This is an adjustable rate borrowing and adjusts to market on a quarterly basis.
Junior Subordinated Deferrable Interest Debentures - The fair value of the Subordinated Debentures is determined based on rates and/or discounted cash flow analysis using interest rates offered in inactive markets for instruments of a similar maturity and structure resulting in a Level 3 classification. The Subordinated Debentures are carried at their current carrying value, because the Subordinated Debentures regularly adjust to market rates.
Undisbursed loan commitments and standby letters of credit - The fair value of the off-balance sheet items is based on discounted cash flows of expected fundings.
Loans held for sale - Loans held for sale are carried at the lower of cost or fair value. The fair value of loans held for sale is based on what the secondary markets are currently offering for loans with similar characteristics. As such, the Bank classifies those loans subjected to nonrecurring fair value adjustments as Level 2.
Non-financial assets and liabilities defined by the FASB ASC 820, Fair Value measurements, such as Bank premises and equipment, deferred taxes, and other liabilities are excluded from the table. In addition, we have not disclosed the fair value of financial instruments specifically.
The following table provides summary information on the estimated fair value of financial instruments at March 31, 2018:
The carrying amount of loans includes $229,000 of nonaccrual loans (loans that are not accruing interest) as of March 31, 2018. The fair value of nonaccrual loans is based on the collateral values that secure the loans or the cash flows expected to be received.
The following table provides summary information on the estimated fair value of financial instruments at December 31, 2017:
The carrying amounts of loans include $179,000 of nonaccrual loans (loans that are not accruing interest) as of December 31, 2017. The fair value of nonaccrual loans is based on the collateral values that secure the loans or the cash flows expected to be received.
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NOTE 11 - SUBSEQUENT EVENTS |
3 Months Ended |
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Mar. 31, 2018 | |
Notes | |
NOTE 11 - SUBSEQUENT EVENTS | NOTE 11 SUBSEQUENT EVENTS
On May 8, 2018, the Company completed an initial public offering of 3,278,900 shares of common stock at a price to the public of $22.00 per share, including 427,682 shares pursuant to the full exercise by the underwriters of their option to purchase additional shares of common stock from the Company. Net proceeds to the Company were approximately $66.8 million. All of the shares issued and sold in the initial public offering were registered under the Securities Act pursuant to a Registration Statement on Form S-1 (File No. 333-224236), which was declared effective by the SEC on May 4, 2018.
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NOTE 1 - BASIS OF PRESENTATION: Business Description and Basis of Presentation (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Policies | |
Business Description and Basis of Presentation | BayCom Corp (the Company) is a bank holding company headquartered in Walnut Creek, California. United Business Bank (the Bank), the wholly owned banking subsidiary, is a California state-chartered bank which provides a broad range of financial services primarily to local small and mid-sized businesses, service professionals and individuals. In the 14 years of operation, the Bank has grown to 17 full service banking branches. The main office is located in Walnut Creek, California and our branch offices are located in Oakland, Castro Valley, Mountain View, Napa, Stockton (2), Pleasanton, Livermore, San Jose, Long Beach, Sacramento, San Francisco and Glendale, California, and Seattle, Washington (2) and Albuquerque, New Mexico. In addition, the Bank has one loan production office in Los Angeles, California. The condensed consolidated financial statements include the accounts of the Company and the Bank.
All intercompany transactions and balances have been eliminated in consolidation. The condensed consolidated financial statements include all adjustments of a normal and recurring nature, which are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the periods presented.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and footnotes normally included in annual financial statements prepared in conformity with accounting principles generally accepted in the United States of America. Accordingly, these condensed consolidated financial statements should be read in conjunction with the condensed consolidated audited financial statements and notes thereto for the year ended December 31, 2017. Results of operations for interim periods are not necessarily indicative of results for the full year. Certain prior year information has been reclassified to conform to current year presentation. The reclassifications had no impact on consolidated net earnings or shareholders equity. |
NOTE 1 - BASIS OF PRESENTATION: Revenue Recognition, Policy (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Policies | |
Revenue Recognition, Policy | Revenue Recognition
In accordance with Topic 606, revenues are recognized when control of promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services that are promised within each contract and identifies those that contain performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
All of the Companys revenue from contracts with customers in scope of ASC 606 is recognized in noninterest income and included in our commercial and consumer banking segment. For the three months ended March 31, 2018, the Company recognized $87,000 in deposit fees, and $53,000 in debit card interchange fees considered in scope of ASC 606, and $542,000 of noninterest income considered not in scope of ASC 606.
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. As an emerging growth company we may delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. We intend to take advantage of the benefits of this extended transition period. Accordingly, our condensed consolidated financial statements may not be comparable to companies that comply with such new or revised accounting standards. |
NOTE 2: ACCOUNTING STANDARDS RECENTLY ISSUED OR ADOPTED: New Accounting Pronouncements, Policy (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Policies | |
New Accounting Pronouncements, Policy | In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The following steps are applied in the updated guidance: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. This ASU was effective for interim and annual periods beginning after December 15, 2017. The Company adopted ASU No. 2014-09 on January 1, 2018. The Company has analyzed its revenue sources of noninterest income to determine when the satisfaction of the performance obligation occurs and the appropriate recognition of revenue. For further information, see Note 10 Non-interest Income of this report. The adoption of these ASUs did not have a material impact on the Company's condensed consolidated financial statements.
In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10). Changes made to the current measurement model primarily affect the accounting for equity securities and readily determinable fair values, where changes in fair value will impact earnings instead of other comprehensive income. The accounting for other financial instruments, such as loans, investments in debt securities, and financial liabilities is largely unchanged. The ASU also changes the presentation and disclosure requirements for financial instruments including a requirement that public business entities use exit price when measuring the fair value of financial instruments measured at amortized cost for disclosure purposes. The amendments in this ASU were effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company has used the exit price notion in the fair value disclosure of financial instruments in Note 10 of this report. The adoption of ASU 2016-01 did not have a material impact on the Companys condensed consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The most significant change for lessees is the requirement under the new guidance to recognize right-of-use assets and lease liabilities for all leases not considered short-term leases, which is generally defined as a lease term of less than 12 months. This change will result in lessees recognizing right-of-use assets and lease liabilities for most leases currently accounted for as operating leases under current lease accounting guidance. The amendments in this ASU are effective for interim and annual periods beginning after December 15, 2018 for public business entities and one year later for all other entities. Early application of the amendments in the ASU is permitted. The Company is currently evaluating the effects of ASU 2016-02 on its financial statements and disclosures. Although an estimate of the impact of the new leasing standard has not yet been determined, upon adoption the Company expects to report increased assets and increased liabilities on its Consolidated Statements of Financial Condition as a result of recognizing right-of-use assets and lease liabilities related to certain banking offices and certain equipment under noncancelable operating lease agreements, however, based on current leases the adoption is not expected to have a material impact on the Companys consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326). This ASU significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. In issuing the standard, the FASB is responding to criticism that todays guidance delays recognition of credit losses. The standard will replace todays incurred loss approach with an expected loss model. The new model, referred to as the current expected credit loss (CECL) model, will apply to: (1) financial assets subject to credit losses and measured at amortized cost, and (2) certain off-balance sheet credit exposures. This includes, but is not limited to, loans, leases, held-to-maturity securities, loan commitments, and financial guarantees. The CECL model does not apply to available-for-sale (AFS) debt securities. For AFS debt securities with unrealized losses, entities will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than reductions in the amortized cost of the securities. As a result, entities will recognize improvements to estimated credit losses immediately in earnings rather than as interest income over time, as they do today. The ASU also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 also expands the disclosure requirements regarding an entitys assumptions, models, and methods for estimating the allowance for loan and lease losses. In addition, public business entities will need to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination. ASU No. 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019 for SEC filers, one year later for non SEC filing public business entities and annual reporting periods beginning after December 15, 2020 for nonpublic business entities and interim periods within the reporting periods beginning after December 15, 2021. Early adoption is permitted for interim and annual reporting periods beginning after December 15, 2018. Entities will apply the standards provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (i.e., modified retrospective approach). The Company is reviewing the requirements of ASU 2016-13 and expects to begin developing and implementing processes and procedures to ensure it is fully compliant with the amendments at the adoption date. Upon adoption, the Company expects changes in the processes and procedures used 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. The new guidance may result in an increase in the allowance for loan losses which will also reflect the new requirement to include the nonaccretable principal differences on purchased credit-impaired loans; however, the Company is still in the process of determining the magnitude of the change and its impact on the Company's future consolidated financial statements.
In January 2017, the FASB issued ASU No. 2017-04, Intangibles Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment. This guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation, and goodwill impairment will simply be the amount by which a reporting units carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. All other goodwill impairment guidance will remain largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The amendments in this ASU are required for public business entities and other entities that have goodwill reported in their financial statements and have not elected the private company alternative for the subsequent measurement of goodwill. ASU No. 2017-04 is effective for interim and annual reporting periods beginning after December 15, 2021 for public business entities who are not SEC filers and one year later for all other entities. The adoption of ASU 2017-04 is not expected to have a material impact on the Company's future consolidated financial statements.
In February 2018, FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220). This ASU was issued to allow a reclassification from accumulated other comprehensive income to retained earnings from stranded tax effects resulting from the revaluation of the net deferred tax asset ("DTA") to the new corporate tax rate of 21% as a result of the Tax Cuts and Jobs Act of 2017 (Tax Act). The ASU is effective for reporting periods beginning after December 15, 2018 with early adoption permitted. The Company adopted this ASU with the provisional adjustments as reported in the condensed consolidated financial statements as of December 31, 2017. As of March 31, 2018, the Company did not incur any adjustments to the provisional recognition.
In March 2018, FASB issued ASU No. 2018-05, Income Taxes (Topic 740). This ASU was issued to provide guidance on the income tax accounting implications of the Tax Act and allows for entities to report provisional amounts for specific income tax effects of the Act for which the accounting under Topic 740 was not yet complete, but a reasonable estimate could be determined. A measurement period of one-year is allowed to complete the accounting effects under Topic 740 and revise any previous estimates reported. Any provisional amounts or subsequent adjustments included in an entitys financial statements during the measurement period should be included in income from continuing operations as an adjustment to tax expense in the reporting period the amounts are determined. The Company adopted this ASU with the provisional adjustments as reported in the condensed consolidated financial statements as of December 31, 2017. As of March 31, 2018, the Company did not incur any adjustments to the provisional recognition. |
Note 3 - ACQUISITION: Business Combinations Policy (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
First ULB Corp | |
Business Combinations Policy | On April 28, 2017, to increase its market area, reduce net funding costs, and improve operating efficiency, the Company acquired all the assets and assumed all the liabilities of First ULB Corp. (FULB) and its subsidiary, United Business Bank, FSB. The Company added eight locations including seven full service branches on one loan production office. The branch offices are located in Oakland, San Jose, Sacramento, San Francisco, Glendale, California and Albuquerque, New Mexico and Tukwila, Washington. The loan production office is located in Los Angeles, California. The Company paid a total of $41.9 million comprised of cash of $19.0 million and 1,371,579 shares of its common stock at a price of $16.66 per share in exchange for all of the common shares outstanding of FULB. Each share of FULB common stock was converted into .9733 share of the Companys common stock. As of the merger date, the fair value of FULBs consolidated assets totaled approximately $473.1 million and deposits totaled approximately $428.0 million. The fair value of estimates are subject to change during the measurement period, after the acquisition date as additional information relative to the acquisition date fair values becomes available. The merger transaction is accounted for using the acquisition method of accounting for business combinations FASB ASC 805, Business Combinations. The net assets acquired and the liabilities assumed totaled approximately $32.8 million at the date of merger. The Company also assumed the Floating Rate Junior Subordinated Deferrable Interest Debentures issued by FULB (the Subordinated Debentures) which are held by the First ULB Statutory Trust 1 (the Trust) and the lease obligation related to each facility. |
Plaza Bank | |
Business Combinations Policy | On November 3, 2017, to enhance its market share in the state of Washington, the Company acquired Plaza Bank (Plaza Bank) adding one branch office located in Seattle, Washington. The Company issued 626,381 shares of its common stock at a price of $19.10 per share in exchange for the all of the common shares outstanding of Plaza Bank. Each share of Plaza Banks common stock outstanding was converted into .084795 share of the Companys common stock. As of the merger date, the fair value of Plaza Banks assets totaled approximately $75.8 million and deposits totaled approximately $54.2 million. The fair value of estimates are subject to change during the measurement period, after the acquisition date as additional information relative to the acquisition date fair values becomes available. The merger transaction is accounted for using the acquisition method of accounting for business combinations FASB ASC 805, Business Combinations. The net assets acquired and the liabilities assumed totaled approximately $10.8 million at the date of merger. The Company assumed the lease obligation related to the branch facility. |
Note 3 - ACQUISITION: Acquisition Loans (Policies) |
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Acquisition Loans | Loans The Company engaged a third party to determine the fair value of loans. The fair values for acquired loans were calculated using a discounted cash flow analysis based on the present value of the expected cash flows utilizing market-derived discount rates and certain assumptions related to expected cash flows including prepayment estimates adjusted based on loan type and seasoning, and probability of default and loss severity. For purchased non-credit impaired (PNCI) loans, the total gross contractual amounts receivable was $379.1 million as of the acquisition date. For purchased credit impaired (PCI) loans, the total contractual amounts receivable was $8.6 million as of the date of acquisition. The fair value of the PCI loans is estimated to total $7.3 million as of the date of acquisition.
The PNCI loans with similar characteristics were grouped together and were treated in the aggregate when applying the discount rate on the expected cash flows. Aggregation factors considered include the type of loan and related collateral, risk classification, fixed or variable interest rate, term of loan and whether or not the loan was amortizing. The discount rates used for the similar groups of loans are based on current market rates for new originations of comparable loans, where available, and include adjustments for credit and liquidity factors. In addition, the guarantee of certain retained U.S. Small Business Administration (SBA) guaranteed loans is reflected in the fair value.
At the acquisition date, the contractual amount and timing of undiscounted principal and interest payments and the estimated the amount and timing of undiscounted expected principal and interest payments was used to estimate the fair value of PCI loans. The difference between these two amounts represented the nonaccretable difference. On the acquisition date, the amount by which the undiscounted expected cash flows exceed the estimated fair value of the acquired loans is the accretable yield. The accretable yield is then measured at each financial reporting date and represented the difference between the remaining undiscounted expected cash flows and the current carrying value of the loans. For PCI loans the accretable yield is accreted into interest income over the life of the estimated remaining cash flows. At each financial reporting date, the carrying value of each PCI loan is compared to an updated estimate of expected principal payment or recovery on each loan. To the extent that the loan carrying amount exceeds the updated expected principal payment or recovery, a provision of loan loss would be recorded as a charge to income and an allowance for loan loss established.
The following table reflects contractual cash flows, nonaccretable difference, accretable yield, fair value, purchase discount, and principal balance for the various loan categories as of the acquisition date. For PCI loans, the purchase discount does not necessarily represent cash flows to be collected as a portion of it is a nonaccretable difference:
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Note 3 - ACQUISITION: Acquired Real Estate Investment (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Policies | |
Acquired Real Estate Investment | Real Estate Investment The acquisition of FULB includes the acquisition of a real estate investment. The real estate was sold after the merger resulting in a fair value adjustment equal to the sale price net of closing expenses. |
Note 3 - ACQUISITION: Acquired Servicing Assets (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Policies | |
Acquired Servicing Assets | Servicing Assets The acquisition of FULB included the acquisition of loans serviced for others including the SBA. The fair value of the servicing assets were calculated based on the net present value of the servicing income stream using a market-derived discount rate and estimated expected cash flows based on the estimated life of the underlying loans less the estimated cost of servicing plus a normal profit. |
Note 3 - ACQUISITION: Acquired Core Deposit Intangible (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Policies | |
Acquired Core Deposit Intangible | Core Deposit Intangible
The core deposit intangible asset, with an estimated acquisition date fair value of $4.8 million, represents the value ascribed to the long-term deposit relationships acquired and is being amortized over an estimated average useful life of seven years. Retention rates used to arrive at fair values are based on historical attrition analysis of other comparable financial institutions and managements assumptions. Generally, a run-off of 5% from beginning balances is assumed for all account types in the first and second year and includes a deposit growth rate of 1%. The core deposit intangible is estimated not to have a significant residual value. |
Note 3 - ACQUISITION: Acquired Deposits (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Policies | |
Acquired Deposits | Deposits |
Note 3 - ACQUISITION: Acquired Subordinated Debentures (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Policies | |
Acquired Subordinated Debentures | Subordinated Deferrable Interest Debentures
The Subordinated Debentures total of $6.4 million had a fair value of $5.4 million. The fair value adjustment of $1,045,000 for the Subordinated Debentures is equal to the discounted cash flow that applied interest rates offered by market participants as of the acquisition date. |
Note 3 - ACQUISITION: Acquired Pro Forma Results of Operations (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Policies | |
Acquired Pro Forma Results of Operations | Pro Forma Results of Operations
The operating results of the Company for the year ended December 31, 2017 and 2016 include the operating results of FULB and Plaza Bank since their respective acquisition dates. The following table represents the net interest and other income, basic earnings per share and diluted earning per share as if the acquisition with FULB and Plaza Bank were effective as of January 1, 2017 and 2016 for the respective year in which each acquisition was closed. The unaudited pro forma information in the following table is intended for informational purposes only and is not necessarily indicative of our future operating results for operating results that would have occurred had the mergers been completed at the beginning of each respective year. No assumptions have been applied to the pro forma results of operation regarding possible revenue enhancements, expense efficiencies or asset dispositions. |
NOTE 4 - Investments Available for Sale: Unrealized Loss Position Securities (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Policies | |
Unrealized Loss Position Securities | At March 31, 2018, there were five securities in an unrealized loss position for greater than twelve consecutive months. At the same time, there were 60 securities in an unrealized loss position for twelve or less than twelve consecutive months. At December 31, 2017, there was one security in an unrealized loss position for greater than 12 consecutive months, and there were 48 securities in an unrealized loss position for less than 12 consecutive months. Management periodically evaluates each security in an unrealized loss position to determine if the impairment is temporary or other-than-temporary. The unrealized losses are due solely to interest rate changes and the Company does not intend to sell nor expects it will be required to sell investment securities identified with impairments prior to the earliest of forecasted recovery or the maturity of the underlying investment security. Management has determined that no investment security was other-than-temporarily impaired at March 31, 2018 and December 31, 2017. |
NOTE 5 - LOANS: Impaired Financing Receivable, Policy (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Policies | |
Impaired Financing Receivable, Policy | The amount of interest on impaired loans not collected for the quarters ended March 31, 2018 and 2017 was zero. |
NOTE 5 - LOANS: Loans and Leases Receivable, Nonaccrual Loan and Lease Status, Policy (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Policies | |
Loans and Leases Receivable, Nonaccrual Loan and Lease Status, Policy | Nonaccrual loans totaled $229,000 and $179,000 as of March 31, 2018 and December 31, 2017, respectively. Impaired loans on accrual are loans that have been restructured and are performing under modified loan agreements, and principal and interest is determined to be collectible. Nonaccrual loans are loans where principal and interest have been determined to not be fully collectible. |
NOTE 5 - LOANS: Loans and Leases Receivable, Troubled Debt Restructuring Policy (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Policies | |
Loans and Leases Receivable, Troubled Debt Restructuring Policy | There were no commitments for additional funding of TDR loans as of March 31, 2018. There were no payment defaults during the three months ended March 31, 2018 that were related to receivables modified as TDR in the last three months. As of March 31, 2018, there were no loans modified within the previous twelve months and for which there was a payment default during the period. |
NOTE 8 - EQUITY INCENTIVE PLANS: 2017 Omnibus Equity Incentive Plan (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Policies | |
2017 Omnibus Equity Incentive Plan | 2017 Omnibus Equity Incentive Plan
The shareholders approved the Omnibus Equity Incentive Plan (2017 Plan) in November 2017. The 2017 Plan provides for the awarding by the Companys Board of Directors of equity incentive awards to employees and non-employee directors. An equity incentive award may be an option, stock appreciation rights, restricted stock units, stock award, other stock-based award or performance award granted under the 2017 Plan. Factors considered by the Board in awarding equity incentives to officers and employees include the performance of the Company, the employees or officers job performance, the importance of his or her position, and his or her contribution to the organizations goals for the award period. Generally, awards are restricted and have a vesting period of no longer than ten years. Subject to adjustment as provided in the 2017 Plan, the maximum number of shares of common stock that may be delivered pursuant to awards granted under the 2017 Plan is 450,000. The 2017 Plan provides for an annual restricted stock grant limits to officers, employees and directors. The annual stock grant limit per person for officers and employees is the lessor of 50,000 shares or a value of $2.0 million, and per person for directors the maximum is 25,000 shares. All unvested restricted shares outstanding vest in the event of a change in control of the Company. During the three months ended March 31, 2018, 15,232 shares of restricted stock were awarded and no stock options were granted. Awarded shares of restricted stock vest over (i) a one-year period following the date of grant, in the case of the non-employee directors, and (ii) a three-year period following the date of grant, with the initial vesting occurring on the one-year anniversary of the date of grant, in the case of the executive officers. |
NOTE 8 - EQUITY INCENTIVE PLANS: 2014 Omnibus Equity Incentive Plan (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Policies | |
2014 Omnibus Equity Incentive Plan | 2014 Omnibus Equity Incentive Plan
In 2014, the shareholders approved the Omnibus Equity Incentive Plan (the 2014 Plan). A total of 148,962 equity incentive awards have been granted under the 2014 Plan. The awards are shares of restricted stock and have a vesting period of one to five years. No future equity awards will be made from the 2014 Plan.
The Company recognizes compensation expense for the restricted stock awards based on the fair value of the shares at the award date. For the three months ended March 31, 2018 and 2017, total compensation expense for these plans was $146,200 and $91,600, respectively.
As of March 31, 2018, there was $1.1 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 two years. |
NOTE 9 - EARNINGS PER SHARE CALCULATION: Earnings Per Share, Policy (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Policies | |
Earnings Per Share, Policy | Earnings per common share (EPS) are computed based on the weighted average number of common shares outstanding during the period. Basic EPS excludes dilution and is computed by dividing net earnings available to common stockholders by the weighted average of common shares outstanding. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The number of potential common shares included in the quarterly diluted EPS is computed using the average market price during the three months included in the reporting period under the treasury stock method. The number of potential common shares included in year-to-date diluted EPS is a year-to-date weighted average of potential shares included in each quarterly diluted EPS computation. Dilutive income per share includes the effect of stick options and other potentially dilutive securities using the treasury stock method. There two forms of outstanding common stock and unvested restricted stock rewards. Holders of unvested restricted stock awards receive non-forfeitable dividends at the same rate as common shareholders and they both share equally in undistributed earnings. Under the two-class method, the inference in EPS is not significant for these participating securities. stock awards All common stock equivalents are anti-dilutive when a net loss occurs. |
NOTE 10 - FAIR VALUE MEASUREMENT: Fair Value Measurement, Policy (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Policies | |
Fair Value Measurement, Policy | The following table presents information about the Companys assets and liabilities measured at fair value as of March 31, 2018 and December 31, 2017, and the fair value techniques used to determine such fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels (Level 1, Level 2, and Level 3).
Level 1 - Inputs are unadjusted quoted prices in active markets (as defined) for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
Level 2 - Inputs are inputs other than quoted prices include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability such as interest rates and yield curves that are observable at commonly quoted intervals.
Level 3 - Inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.
In certain cases, the inputs used to measure fair value may fall into different levels of the hierarchy. In such cases, the lowest level of inputs that is significant to the measurement is used to determine the hierarchy for the entire asset or liability. Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincides with our quarterly valuation process. There were no transfers between levels during 2018 or 2017. |
NOTE 10 - FAIR VALUE MEASUREMENT: Fair Values of Financial Instruments (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Policies | |
Fair Values of Financial Instruments | Fair Values of Financial Instruments.
There have been no significant changes in valuation techniques during the periods reported. The following methods and assumptions were used to estimate the fair value disclosure for financial instruments:
Cash and cash equivalents - Cash and cash equivalents include cash and due from banks, interest bearing deposits in banks, and Fed funds sold, and are valued at their carrying amounts because of the short-term nature of these instruments.
Interest bearing deposits in financial institutions - Interest bearing deposits in financial institutions are valued based on quoted interest rates for comparable instruments with similar remaining maturities.
Investment Securities - The fair value of available of sale securities are based on quoted market prices, where available. If quoted market prices are not available, fair values are estimated using quoted market prices for similar securities and indications of value provides by brokers.
Other equity securities - The carrying value of the FHLB and FRB stock approximates the fair value because the stock is redeemable at par.
Loans Loans with variable interest rates are valued at the current carrying value, because these loans are regularly adjusted to market rates. The fair value of fixed rate with remaining maturities in excess of one year is estimated by discounting the future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings for the same remaining maturities. The allowance for loan losses is considered to be a reasonable estimate of the loan discount related to credit risk.
Accrued interest receivable and payable - The accrued interest receivable and payable balance approximates its fair value.
Deposits - The fair value of non-interest bearing deposits, interest bearing transaction accounts and savings accounts is the amount payable on demand at the reporting date. The fair value of time deposits is estimated by discounting the future cash flows using current rates offered for deposits of similar remaining maturities.
Other borrowings - The fair value is estimated by discounting the future cash flows using current rates offered for similar borrowings. The discount rate is equal to the market rate of currently offered similar products. This is an adjustable rate borrowing and adjusts to market on a quarterly basis.
Junior Subordinated Deferrable Interest Debentures - The fair value of the Subordinated Debentures is determined based on rates and/or discounted cash flow analysis using interest rates offered in inactive markets for instruments of a similar maturity and structure resulting in a Level 3 classification. The Subordinated Debentures are carried at their current carrying value, because the Subordinated Debentures regularly adjust to market rates.
Undisbursed loan commitments and standby letters of credit - The fair value of the off-balance sheet items is based on discounted cash flows of expected fundings.
Loans held for sale - Loans held for sale are carried at the lower of cost or fair value. The fair value of loans held for sale is based on what the secondary markets are currently offering for loans with similar characteristics. As such, the Bank classifies those loans subjected to nonrecurring fair value adjustments as Level 2.
Non-financial assets and liabilities defined by the FASB ASC 820, Fair Value measurements, such as Bank premises and equipment, deferred taxes, and other liabilities are excluded from the table. In addition, we have not disclosed the fair value of financial instruments specifically. |
NOTE 11 - SUBSEQUENT EVENTS: Subsequent Events, Policy (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Policies | |
Subsequent Events, Policy | On May 8, 2018, the Company completed an initial public offering of 3,278,900 shares of common stock at a price to the public of $22.00 per share, including 427,682 shares pursuant to the full exercise by the underwriters of their option to purchase additional shares of common stock from the Company. Net proceeds to the Company were approximately $66.8 million. All of the shares issued and sold in the initial public offering were registered under the Securities Act pursuant to a Registration Statement on Form S-1 (File No. 333-224236), which was declared effective by the SEC on May 4, 2018. |
Note 3 - ACQUISITION: Schedule of Business Acquisitions, by Acquisition (Tables) |
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Schedule of Business Acquisitions, by Acquisition | The following table summarizes the fair value of the assets acquired and liabilities assumed at the acquisition date:
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Note 3 - ACQUISITION: Business Combination, Segment Allocation (Tables) |
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Business Combination, Segment Allocation | The following table presents the net assets acquired and the estimated fair value adjustments, which resulted in Goodwill at the acquisition date:
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Note 3 - ACQUISITION: Acquisition Loans: Contractual Cash Flows, Nonaccretable Difference, Accretable Yield, Fair Value, Purchase Discount, and Principal Balance (Tables) |
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Contractual Cash Flows, Nonaccretable Difference, Accretable Yield, Fair Value, Purchase Discount, and Principal Balance | The following table reflects contractual cash flows, nonaccretable difference, accretable yield, fair value, purchase discount, and principal balance for the various loan categories as of the acquisition date. For PCI loans, the purchase discount does not necessarily represent cash flows to be collected as a portion of it is a nonaccretable difference:
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Note 3 - ACQUISITION: Business Acquisition, Pro Forma Information (Tables) |
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Business Acquisition, Pro Forma Information | The contribution of the acquired operations from FULB and Plaza to our results of operations for the 2017 is as follows:
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Note 3 - ACQUISITION: Business Acquisition, Integration, Restructuring and Other Related Costs (Tables) |
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Business Acquisition, Integration, Restructuring and Other Related Costs | Acquisition-related expenses are recognized as incurred and continue until all systems are converted and operational functions become fully integrated. We incurred third-party acquisition-related expenses in the following line items in the statement of income for the year ended December 31, 2017 as follows:
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NOTE 4 - Investments Available for Sale: Amortized cost and carrying values of securities available-for-sale (Tables) |
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Amortized cost and carrying values of securities available-for-sale | The amortized cost and estimated fair values of securities available-for-sale at March 31, 2018 and December 31, 2017 are as follows:
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NOTE 4 - Investments Available for Sale: Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value (Tables) |
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Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | The gross unrealized losses of the available-for-sale investment securities portfolio are summarized according to the duration of the loss period as of March 31, 2018 and December 31, 2017 are as follows:
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NOTE 4 - Investments Available for Sale: Investments Classified by Contractual Maturity Date (Tables) |
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Investments Classified by Contractual Maturity Date | The amortized cost and estimated fair value of available-for-sale debt securities as of March 31, 2018 by contractual maturity are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
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NOTE 5 - LOANS: Schedule of Accounts, Notes, Loans and Financing Receivable (Tables) |
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Schedule of Accounts, Notes, Loans and Financing Receivable | Loans are summarized as follows at March 31, 2018 and December 31, 2017:
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NOTE 5 - LOANS: Impaired Financing Receivables (Tables) |
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Impaired Financing Receivables | As of March 31, 2018, and December 31, 2017 the Companys impaired or non-accrual originated and PCI loans have a related allowance for loss as follows:
|
NOTE 5 - LOANS: Schedule of Financing Receivables, Non Accrual Status (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financing Receivables, Non Accrual Status | The following table presents non-accrual loans for the periods ending March 31, 2018 and December 31, 2017:
|
NOTE 5 - LOANS: Troubled Debt Restructurings on Financing Receivables (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||
Troubled Debt Restructurings on Financing Receivables | The following table presents loans by class modified as troubled debt restructuring (TDR) including any subsequent defaults during the period ending March 31, 2018 and December 31, 2017:
|
NOTE 5 - LOANS: Purchase Credit Impaired Loans ("PCI") Loans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase Credit Impaired Loans ("PCI") Loans | Purchase Credit Impaired Loans
As part of acquisitions, the Company has purchased loans, some of which have shown evidence of credit deterioration since origination and it is probable at the acquisition that all contractually requirement payments would not be collected. The carrying amount and unpaid balance of PCI loans are as follows:
|
NOTE 5 - LOANS: Allowance for Credit Losses on Financing Receivables (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Credit Losses on Financing Receivables | The following tables summarize the Companys allowance for loan losses for the three months ended March 31, 2018:
The following table summarizes the Companys allowance for loan losses for the year ended December 31, 2017 and the three months ended March 31, 2017:
|
NOTE 5 - LOANS: Past Due Financing Receivables (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Past Due Financing Receivables | The following table provides an aging of the Company's loan receivable as of March 31, 2018 and December 31, 2017:
|
NOTE 5 - LOANS: Financing Receivable Credit Quality Indicators (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financing Receivable Credit Quality Indicators | The following tables represent the internally assigned grade by class of loans as of March 31, 2018 and December 31, 2017:
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NOTE 8 - EQUITY INCENTIVE PLANS: Schedule of Nonvested Restricted Stock Units Activity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Nonvested Restricted Stock Units Activity | The following table provides a summary of changes in non-vested restricted stock awards for the three months ended March 31, 2018:
The following table provides a summary of changes in non-vested restricted stock awards for the three months ended March 31, 2017:
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NOTE 9 - EARNINGS PER SHARE CALCULATION: Schedule of Earnings Per Share, Basic and Diluted (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | Earnings per share have been computed based on the following:
|
NOTE 10 - FAIR VALUE MEASUREMENT: Fair Value, Assets Measured on Recurring Basis (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets Measured on Recurring Basis | The following assets are measured at fair value on a recurring basis:
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NOTE 10 - FAIR VALUE MEASUREMENT: Fair Value Measurements, Nonrecurring (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements, Nonrecurring | The following tables present the recorded amounts of impaired loans measured at fair value on a non-recurring basis:
|
NOTE 10 - FAIR VALUE MEASUREMENT: Schedule of Estimated Fair Value of Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Estimated Fair Value of Financial Instruments | The following table provides summary information on the estimated fair value of financial instruments at March 31, 2018:
The carrying amount of loans includes $229,000 of nonaccrual loans (loans that are not accruing interest) as of March 31, 2018. The fair value of nonaccrual loans is based on the collateral values that secure the loans or the cash flows expected to be received.
The following table provides summary information on the estimated fair value of financial instruments at December 31, 2017:
The carrying amounts of loans include $179,000 of nonaccrual loans (loans that are not accruing interest) as of December 31, 2017. The fair value of nonaccrual loans is based on the collateral values that secure the loans or the cash flows expected to be received. |
Note 3 - ACQUISITION: Acquisition Loans: Contractual Cash Flows, Nonaccretable Difference, Accretable Yield, Fair Value, Purchase Discount, and Principal Balance (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2018
USD ($)
| |
Credit Impaired Loans | |
Contractually required payments | $ 8,577 |
Less: nonaccretable difference | (966) |
Cash flows expected to be collected (undiscounted) | 7,611 |
Accretable yield | (322) |
Certain Loans Acquired Fair Value of Purchased Loans | 7,289 |
Non-Credit Impaired Loans | |
Contractually required payments | 379,144 |
Less: nonaccretable difference | 0 |
Cash flows expected to be collected (undiscounted) | 379,144 |
Accretable yield | (5,097) |
Certain Loans Acquired Fair Value of Purchased Loans | 374,047 |
Combined Loans | |
Contractually required payments | 387,721 |
Less: nonaccretable difference | (966) |
Cash flows expected to be collected (undiscounted) | 386,755 |
Accretable yield | (5,419) |
Certain Loans Acquired Fair Value of Purchased Loans | $ 381,336 |
Note 3 - ACQUISITION: Business Acquisition, Pro Forma Information (Details) - FULB - Plaza Bank - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Business Acquisition Pro Forma Interest Income | $ 47,656 | $ 44,635 |
Net income | $ 4,387 | $ 9,380 |
Business Acquisition Pro Forma Interest Income | $ 0.59 | $ 1.27 |
Business Acquisition Pro Forma Interest Income | $ 0.59 | $ 1.26 |
Note 3 - ACQUISITION: Business Acquisition, Integration, Restructuring and Other Related Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
|
Data processing | $ 708 | $ 360 | |
Plaza Bank | |||
Professional fees | $ 225 | ||
Data processing | 855 | ||
Severance expense | 75 | ||
Other | 54 | ||
Acquisition Related Expenses, Total | 1,209 | ||
Combined | |||
Professional fees | 574 | ||
Data processing | 2,441 | ||
Severance expense | 287 | ||
Other | 174 | ||
Acquisition Related Expenses, Total | 3,476 | ||
FULB | |||
Professional fees | 349 | ||
Data processing | 1,586 | ||
Severance expense | 212 | ||
Other | 120 | ||
Acquisition Related Expenses, Total | $ 2,267 |
NOTE 5 - LOANS: Schedule of Accounts, Notes, Loans and Financing Receivable (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Loans, net | $ 885,979 | $ 886,864 |
Loans Receivable | ||
Loans, net | 885,979 | 886,864 |
Consumer Loan | ||
Loans, net | 97 | 1,096 |
Loans Receivable Gross | ||
Loans, net | 891,011 | 891,548 |
Deferred Loan Fees | ||
Loans, net | (432) | (469) |
Real Estate | ||
Loans, net | 28,353 | 22,720 |
Commercial Real Estate | ||
Loans, net | 662,909 | 669,150 |
Residential Real Estate | ||
Loans, net | 84,508 | 84,781 |
Commercial and Industrial Sector | ||
Loans, net | $ 115,144 | $ 113,801 |
NOTE 5 - LOANS: Impaired Financing Receivable, Policy (Details) $ in Thousands |
Dec. 31, 2017
USD ($)
|
---|---|
Details | |
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans | $ 0 |
NOTE 5 - LOANS: Loans and Leases Receivable, Nonaccrual Loan and Lease Status, Policy (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Details | ||
Financing Receivable, Recorded Investment, Nonaccrual Status | $ 229 | $ 179 |
NOTE 5 - LOANS: Schedule of Financing Receivables, Non Accrual Status (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Consumer Loan | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | $ 0 | $ 0 |
Nonaccrual Loans | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 229 | 179 |
Commercial Real Estate | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 86 | 166 |
Residential Real Estate | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 132 | 0 |
Construction | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 0 | 0 |
Commercial and Industrial Sector | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | $ 11 | $ 13 |
NOTE 5 - LOANS: Troubled Debt Restructurings on Financing Receivables (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Consumer Loan | ||
Financing Receivable, Modifications, Recorded Investment | $ 0 | $ 0 |
Financing Receivables Troubled Debt Restructuring | ||
Financing Receivable, Modifications, Recorded Investment | 791 | 1,045 |
Commercial Real Estate | ||
Financing Receivable, Modifications, Recorded Investment | 780 | 1,032 |
Residential Real Estate | ||
Financing Receivable, Modifications, Recorded Investment | 0 | 0 |
Construction | ||
Financing Receivable, Modifications, Recorded Investment | 0 | 0 |
Commercial and Industrial Sector | ||
Financing Receivable, Modifications, Recorded Investment | $ 11 | $ 13 |
NOTE 5 - LOANS: Loans and Leases Receivable, Troubled Debt Restructuring Policy (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Details | ||
Troubled Debt Restructuring, Debtor, Subsequent Periods, Contingent Payments, Amount | $ 0 | |
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $ 0 | $ 0 |
NOTE 6 - BORROWINGS: Federal Home Loan Bank (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
|
Details | ||
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, General Description of Terms | approved secured borrowing facility with the FHLB for up to 25% of total assets for a term not to exceed five years | |
Federal Home Loan Bank, Advances, General Debt Obligations, Amount of Available, Unused Funds | $ 0 | $ 0 |
Line of Credit Facility, Current Borrowing Capacity | $ 7,450 |
NOTE 6 - BORROWINGS: Federal Funds Lines of Credit (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
|
Details | ||
Other Commitments, Description | Federal Funds lines with available commitments totaling $65.0 million with four correspondent banks | |
Line of Credit Facility, Average Outstanding Amount | $ 0 | $ 0 |
Note 7 - Junior Subordinated Deferrable Interest Debentures (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2018
USD ($)
| |
Details | |
Subordinated Borrowing Terms and Conditions | The Trust is a Delaware business formed with capital of $192,000 for the sole purpose of issuing trust preferred securities fully and unconditionally guaranteed by the Company. |
Proceeds from Subordinated Short-term Debt | $ 6,200 |
Subordinated Borrowing, Interest Rate | 4.83% |
Subordinated Debt | $ 5,400 |
NOTE 8 - EQUITY INCENTIVE PLANS: 2017 Omnibus Equity Incentive Plan (Details) |
Mar. 31, 2018
shares
|
---|---|
Details | |
Defined Benefit Plan, Plan Assets, Employer, Related Party, Number of Shares | 450,000 |
NOTE 8 - EQUITY INCENTIVE PLANS: 2014 Omnibus Equity Incentive Plan (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Details | ||
Allocated Share-based Compensation Expense | $ 146 | $ 91 |
NOTE 9 - EARNINGS PER SHARE CALCULATION: Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Details | ||
Net income | $ 4,069 | $ 1,416 |
Weighted Average number of shares outstanding | 7,512,227 | 5,397,930 |
Diluted effect of restrictive stock grants | 0 | 13,624 |
earnings per share | 7,512,227 | 5,411,554 |
NOTE 10 - FAIR VALUE MEASUREMENT: Fair Value, Assets Measured on Recurring Basis (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
US Government Corporations and Agencies Securities | ||
Assets Measured at Fair Value on a Recurring Basis | $ 5,401 | $ 5,997 |
Collateralized Mortgage Obligations | ||
Assets Measured at Fair Value on a Recurring Basis | 1,098 | 1,750 |
Assets Measured at Fair Value on Recurring Basis | ||
Assets Measured at Fair Value on a Recurring Basis | 36,789 | 40,505 |
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises | ||
Assets Measured at Fair Value on a Recurring Basis | 9,590 | 9,740 |
US Government Agencies Debt Securities | ||
Assets Measured at Fair Value on a Recurring Basis | 4,968 | 6,971 |
Municipal Notes | ||
Assets Measured at Fair Value on a Recurring Basis | $ 15,732 | $ 16,047 |
NOTE 10 - FAIR VALUE MEASUREMENT: Fair Value Measurements, Nonrecurring (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Impaired Assets Measured at Fair Value on a Non-Recurring Basis | ||
Recorded Amounts of Impaired Loans Measured at Fair Value on a Non-Recurring Basis | $ 920 | $ 1,120 |
Consumer Loan | ||
Recorded Amounts of Impaired Loans Measured at Fair Value on a Non-Recurring Basis | 0 | 0 |
Commercial Real Estate | ||
Recorded Amounts of Impaired Loans Measured at Fair Value on a Non-Recurring Basis | 821 | 1,120 |
Residential Real Estate | ||
Recorded Amounts of Impaired Loans Measured at Fair Value on a Non-Recurring Basis | 99 | 0 |
Construction | ||
Recorded Amounts of Impaired Loans Measured at Fair Value on a Non-Recurring Basis | 0 | 0 |
Commercial and Industrial Sector | ||
Recorded Amounts of Impaired Loans Measured at Fair Value on a Non-Recurring Basis | $ 0 | $ 0 |
NOTE 11 - SUBSEQUENT EVENTS: Subsequent Events, Policy (Details) $ in Thousands |
May 08, 2018
USD ($)
|
---|---|
Details | |
Proceeds from Issuance Initial Public Offering | $ 66,800 |
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