10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2018

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                                    to

Commission File Number 000-50266

TRINITY CAPITAL CORPORATION

(Exact name of registrant as specified in its charter)

New Mexico	85-0242376
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1200 Trinity Drive Los Alamos, New Mexico	87544
(Address of principal executive offices)	(Zip Code)

(505) 662-5171

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒  Yes    ☐  No

 Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  ☒ Yes  ☐  No

Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Act. (Check one):

Large accelerated filer ☐	Accelerated filer              ☐
Non-accelerated filer   ☐  (do not check if a smaller reporting company)	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐  Yes   ☒  No

As of April 30, 2018, there were 11,651,173 shares of voting common stock outstanding and 8,044,292 shares of non-voting common stock outstanding.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
Item 1. Financial Statements and Supplementary Data	1
Item 2. Management's Discussions and Analysis of Financial Condition and Results of Operations	22
Item 3. Quantitative and Qualitative Disclosures About Market Risk	32
Item 4. Controls and Procedures	32
PART II – OTHER INFORMATION
Item 1. Legal Proceedings	33
Item 1A. Risk Factors	33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3. Defaults Upon Senior Securities	33
Item 4. Mine Safety Disclosures	33
Item 5. Other Information	33
Item 6. Exhibits	34
Signatures	35

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

TRINITY CAPITAL CORPORATION & SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)
	March 31, 2018 (Unaudited)			December 31, 2017
ASSETS
Cash and due from banks	$	10,003		$	12,893
Interest-bearing deposits with banks		9,517			22,541
Cash and cash equivalents		19,520			35,434
Investment securities available for sale, at fair value		470,910			468,733
Investment securities held to maturity, at amortized cost (fair value of $7,312 and $7,369 as of March 31, 2018 and December 31, 2017, respectively)		7,824			7,854
Non-marketable equity securities		4,471			3,617
Loans (net of allowance for loan losses of $11,238 and $13,803 as of March 31, 2018 and December 31, 2017, respectively)		694,108			686,341
Mortgage servicing rights ("MSRs"), net		-			-
Bank owned life insurance ("BOLI")		25,874			25,656
Premises and equipment, net		28,336			28,542
Other real estate owned ("OREO"), net		6,449			6,432
Deferred tax assets		12,008			10,143
Other assets		13,567			14,781
Total assets	$	1,283,067		$	1,287,533
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest-bearing	$	163,134		$	161,677
Interest-bearing		980,960			965,670
Total deposits		1,144,094			1,127,347
Long-term borrowings		2,300			2,300
Junior subordinated debt		26,764			36,941
Other liabilities		8,414			15,399
Total liabilities		1,181,572			1,181,987
Stock owned by Employee Stock Ownership Plan ("ESOP") participants; 831,645 shares and 831,645 shares as of March 31, 2018 and December 31, 2017, respectively, at fair value	$	5,961		$	5,961
Commitments and contingencies (Note 13)
Shareholders' equity
Common stock, voting, no par; 20,000,000 shares authorized; 11,631,064 shares and 11,364,862 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively		11,631			11,365
Common stock, non-voting, no par; 20,000,000 shares authorized; 8,044,292 shares and 8,286,200 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively		8,044			8,286
Additional paid-in capital		35,332			35,071
Retained earnings		56,279			54,587
Accumulated other comprehensive loss		(9,791	)		(3,763	)
Common stock related to ESOP		(5,961	)		(5,961	)
Total shareholders' equity		95,534			99,585
Total liabilities and shareholders' equity	$	1,283,067		$	1,287,533

The accompanying notes are an integral part of these consolidated financial statements.

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TRINITY CAPITAL CORPORATION & SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)	Three Months Ended March 31,
	2018			2017
Interest income:
Loans, including fees	$	8,079		$	9,307
Interest and dividends on investment securities:
Taxable		1,582			1,672
Nontaxable		1,038			246
Other interest income		113			161
Total interest income		10,812			11,386
Interest expense:
Deposits		412			459
Borrowings		53			36
Junior subordinated debt		787			720
Total interest expense		1,252			1,215
Net interest income		9,560			10,171
Provision for loan losses		220			30
Net interest income after provision for loan losses		9,340			10,141
Noninterest income:
Mortgage loan servicing fees		(2	)		486
Trust and investment services fees		797			651
Service charges on deposits		254			295
Net gain on sale of OREO		41			328
BOLI income		218			91
Mortgage referral fee income		245			327
Interchange fees		496			630
Other fees		303			288
Other noninterest income		6			(21	)
Total noninterest income		2,358			3,075
Noninterest expenses:
Salaries and employee benefits		5,551			6,037
Occupancy		590			491
Data processing		1,029			1,374
Legal, professional, and accounting fees		525			2,212
Change in value of MSRs		-			238
Other noninterest expense		2,118			3,564
Total noninterest expenses		9,813			13,916
Income (loss) before provision (benefit) for income taxes		1,885			(700	)
Provision (benefit) for income taxes		193			(214	)
Net income (loss)		1,692			(486	)
Dividends and discount accretion on preferred shares		-			770
Net income (loss) available to common shareholders	$	1,692		$	(1,256	)
Basic earnings (loss) per common share	$	0.09		$	(0.10	)
Diluted earnings (loss) per common share	$	0.09		$	(0.10	)

The accompanying notes are an integral part of these consolidated financial statements.

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TRINITY CAPITAL CORPORATION & SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	Three Months Ended March 31,
	2018			2017
Net income (loss)	$	1,692		$	(486	)
Other comprehensive income (loss):
Unrealized (losses) gains on securities available for sale		(8,108	)		630
Securities losses (gains) reclassified into earnings		-			-
Related income tax benefit (expense)		2,080			(249	)
Other comprehensive (loss) income		(6,028	)		381
Total comprehensive loss	$	(4,336	)	$	(105	)

The accompanying notes are an integral part of these consolidated financial statements.

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TRINITY CAPITAL CORPORATION & SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Unaudited)

	Common stock
(In thousands, except per share data)	Issued		Held in treasury, at cost		Non-voting issued		Preferred stock			Additional paid-in capital			Retained earnings			Accumulated other comprehensive income (loss)			Common Stock Related to ESOP			Total shareholders' equity
Balance, December 31, 2016	$	9,509	$	-	$	-	$	74,007		$	(1,373	)	$	60,651		$	(5,495	)	$	(3,192	)	$	134,107
Net income														(486	)								(486	)
Other comprehensive income																	381						381
Redemption of Series A preferred shares								(35,539	)														(35,539	)
Redemption of Series B preferred shares								(1,777	)														(1,777	)
Dividends declared on preferred shares														(372	)								(372	)
Series C preferred shares converted to non-voting common stock						8,286		(37,089	)		28,803												-
Common stock issued for board compensation		34									124												158
Amortization of preferred stock issuance costs								398						(398	)								-
RSUs compensation expense											15												15
Balance, March 31, 2017	$	9,543	$	-	$	8,286	$	-		$	27,569		$	59,395		$	(5,114	)	$	(3,192	)	$	96,487

	Common stock
(In thousands, except per share data)	Voting Issued		Held in treasury, at cost		Non-voting issued			Preferred stock		Additional paid-in capital			Retained earnings		Accumulated other comprehensive income (loss)			Common Stock Related to ESOP			Total shareholders' equity
Balance, December 31, 2017	$	11,365	$	-	$	8,286		$	-	$	35,071		$	54,587	$	(3,763	)	$	(5,961	)	$	99,585
Net income														1,692								1,692
Other comprehensive loss																(6,028	)					(6,028	)
Rights offering costs											(2	)										(2	)
Common stock issued to board		10									60											70
Q1 RSU compensation expense											217											217
Common stock issued for vested RSUs		14									(14	)										-
Conversion from non-voting to voting common stock		242				(242	)															-
Balance, March 31, 2018	$	11,631	$	-	$	8,044		$	-	$	35,332		$	56,279	$	(9,791	)	$	(5,961	)	$	95,534

The accompanying notes are an integral part of these consolidated financial statements.

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TRINITY CAPITAL CORPORATION & SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

 (Unaudited)

	Three Months Ended March 31,
	2018			2017
Cash Flows From Operating Activities	(Dollars in thousands)
Net income (loss)	$	1,692			(486	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,062			1,904
Provision for loan losses		220			30
Gains and write-downs on OREO, net		(21	)		(321	)
Loss on disposal of premises and equipment		2			-
Decrease in deferred income tax assets		215			(739	)
Change in escrow liabilities		(5,209	)		2,158
Change in value of MSRs		-			238
BOLI Income		(218	)		(91	)
Compensation expense recognized for restricted stock units		217			16
Decrease in accrued interest payable on sub debt		-			(9,676	)
Changes in operating assets and liabilities:
Other Assets		1,185			482
Other Liabilities		(1,775	)		(872	)
Net cash provided by operating activities before origination and gross sales of loans held for sale		(1,630	)		(7,357	)
Net cash used in operating activities	$	(1,630	)		(7,357	)

Continued next page

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TRINITY CAPITAL CORPORATION & SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS CONTINUED

(Unaudited)

	Three Months Ended March 31,
	2018			2017
Cash Flows From Investing Activities	(Dollars in thousands)
Proceeds from maturities and paydowns of investment securities, available for sale	$	9,905		$	14,264
Purchase of investment securities, available for sale		(21,824	)		(26,823	)
Proceeds from maturities and paydowns of investment securities, held to maturity		26			822
Proceeds from sale of other real estate owned		509			1,117
Purchase of investment securities, other		(857	)		-
Loans paid down (funded), net		(8,424	)		6,615
Purchases of premises and equipment		(122	)		(390	)
Net cash provided by (used in) investing activities		(20,787	)		(4,395	)
Cash Flows From Financing Activities
Net increase in demand deposits, NOW accounts and savings accounts		26,268			9,614
Net decrease in time deposits		(9,523	)		(20,377	)
Partial repayment of subordinated debt		(10,310	)		-
Redemption of preferred stock		-			(37,316	)
Issuance of common stock for stock option plan		68			158
Decrease in dividends payable on preferred stock		-			(12,965	)
Net cash provided by (used in) financing activities		6,503			(60,886	)
Net decrease in cash and cash equivalents		(15,914	)		(72,638	)
Cash and cash equivalents:
Beginning of period		35,434			119,335
End of period	$	19,520		$	46,697
Supplemental Disclosures of Cash Flow Information
Cash payments for:
Interest	$	1,601		$	10,928
Non-cash investing and financing activities:
Transfers from loans to other real estate owned		473			433
Transfer from venture capital to loans		-			150
Conversion of Series C preferred stock to non-voting common stock		-			37,089
Dividends declared on preferred stock		-			373
Conversion of non-voting common stock to voting common stock		242			-

The accompanying notes are an integral part of these consolidated financial statements.

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Note 1. Basis of Presentation

Consolidation:  The accompanying unaudited consolidated financial statements include the consolidated balances and results of operations of Trinity Capital Corporation ("Trinity") and its wholly owned subsidiaries: Los Alamos National Bank (the "Bank") and TCC Advisors Corporation ("TCC Advisors"), collectively referred to as the "Company." Trinity Capital Trust I ("Trust I"), Trinity Capital Trust III ("Trust III"), Trinity Capital Trust IV ("Trust IV") and Trinity Capital Trust V ("Trust V"), collectively referred to as the "Trusts," are trust subsidiaries of Trinity. Trinity owns all of the outstanding common securities of the Trusts. The Trusts are considered variable interest entities ("VIEs") under Accounting Standards Codification ("ASC") Topic 810, "Consolidation."  Because Trinity is not the primary beneficiary of the Trusts, the financial statements of the Trusts are not included in the consolidated financial statements of the Company.  TCC Advisors Corporation and Trust I were dissolved in March 2018. 

Basis of presentation: The accompanying unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. Significant intercompany items and transactions have been eliminated in consolidation.  The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America ("GAAP") and general practices within the financial services industry.  In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the year then ended.  Actual results could differ from those estimates.

The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for financial information and with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the statements reflect all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows of the Company on a consolidated basis, and all such adjustments are of a normal recurring nature. These financial statements and the notes thereto should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2017 (the "2017 Form 10-K"). Operating results for the three-month period ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018 or any other period.

Reclassifications: Some items in the prior year financial statements were reclassified to conform to the current presentation.  Reclassifications had no effect on prior year net income or shareholders' equity.

Note 2. Earnings (Loss) Per Share Data

The average number of shares used in calculating basic and diluted earnings (loss) per common share were as follows for the three months ended March 31, 2018 and 2017:

	Three Months Ended March 31,
	2018		2017
	(In thousands, except share and per share data)
Net income (loss)	$	1,692	$	(486	)
Dividends and discount accretion on preferred shares		-		770
Net income (loss) available to common shareholders	$	1,692	$	(1,256	)
Weighted average common shares issued		19,665,543		13,017,045
LESS: Weighted average treasury stock shares		-		-
Weighted average common shares outstanding, net		19,665,543		13,017,045
Basic income (loss) per common share	$	0.09	$	(0.10	)
Dilutive effect of stock-based compensation		45,133		-
Weighted average common shares outstanding including dilutive shares		19,710,676		13,017,045
Diluted income (loss) per common share	$	0.09	$	(0.10	)

Certain restricted stock units were not included in the above calculation, as they would have had an anti-dilutive effect.  There were no shares excluded for the three months ended March 31, 2018.  The total number of shares excluded was approximately 33,000 shares for three months ended March 31, 2017.

Note 3. Recent Accounting Pronouncements

Newly effective standards:  In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This update 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. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606) – Deferral of the Effective Date.  This update deferred the effective date of ASU 2014-09 by one year,  making it effective for annual reporting periods beginning after December 15, 2017 including interim reporting periods within that reporting period. The Company's revenue is comprised of net interest income on financial assets and liabilities, which is explicitly excluded from the scope of this guidance, and non-interest income.  The Company has reviewed non-interest income, such as deposit fees, assets management and investment advisory fees, OREO gains and losses on sale, and credit card interchange fees.  The Company completed its overall assessment of revenue streams and related contracts affected by the guidance and adopted ASC 606 on January 1, 2018 with no impact on total shareholders' equity or net income.

Revenue Recognition

The Company recognizes revenue as it is earned and determined no change to its revenue recognition policies as a result of the adoption of ASC 606.  The following is a discussion of revenues within the scope of the new revenue guidance:

· Service charges on deposit accounts - Revenue from service charges on deposit accounts is earned through deposit-related services; as well as overdraft, non-sufficient funds, account management and other deposit related fees.  Revenue is recognized either over time, corresponding with deposit accounts' monthly cycle, or at a point in time for transactional related services and fees.

· Debit and credit card interchange fee income - Card processing fees consist of interchange fees from consumer debit and credit card networks and other card related services.  Interchange fees are based on purchase transactions and other factors and are recognized as transactions occur.

· Wealth management and investment brokerage fees - The Company earns wealth management and investment brokerage fees from its contracts with trust and brokerage customers for management of assets, and/or transactions on their accounts.  These fees are primarily earned over time as the Company provides the contracted monthly or quarterly services and are generally assessed based on a tiered scale of the market value of the assets under management.  Fees that are transactional based are recognized at the point in time that the transaction is executed.  Other related services provided and the fees the Company earns are based on a fixed schedule and are recognized when the services are rendered.

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· Gains/Losses on sales of OREO - The Company records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time the deed is executed.  When the Company finances the sale of OREO to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable.  Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer.  In determining the gain or loss on the sale, the Company may adjust the transaction price and related gain (loss) on sale if a significant financing component is present.

· Mortgage referral fees - The Company earns and records fee income from mortgage referrals to unaffiliated third parties.  This fee income is earned and recognized once the referred loan is closed.

In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825).  The amendments in this update require that public entities measure equity investments with readily determinable fair values, at fair value, with changes in their fair value recorded through net income.  This ASU clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available for sale securities in combination with the entity's other deferred tax assets. This ASU also prescribes an exit price be used to determine the fair value of financial instruments not measured at fair value for disclosure in the fair value note.  The amendments within the update are effective for fiscal years and all interim periods beginning after December 15, 2017.  The Company has determined that the evaluation of deferred tax asset ("DTA") valuation allowance and the exit price for financial instruments are within scope for the Company.  The Company adopted this standard on January 1, 2018 and used a third-party to provide the exit pricing for Note 16, Fair Value Measurements, as required under ASU 2016-01.  The adoption of ASU 2016-01 did not have an impact on the Company's financial statements.   

In May 2017, the FASB issues ASU 2017-09, Compensation - Stock Compensation (Topic 718).  ASU 2017-09 was effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  This ASU provides clarity on the guidance related to stock compensation when there have been changes to the terms or conditions of a share-based payment award to which an entity would be required to apply modification accounting under ASC 718.  The ASU provides the three following criteria must be met in order to not account for the effect of the modification of terms or conditions: the fair value, the vesting conditions and the classification as an equity or liability instrument of the modified award is the same as the original award immediately before the original award is modified. The Company adopted ASU 2017-09 on January 1, 2018.  The adoption of ASU 2017-09 did not have a material impact on the Company's Consolidated Financial Statements.

Newly Issued But Not Effective Accounting Standards: In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those periods using a modified retrospective approach and early adoption is permitted. This ASU requires a lessee to record a right-to-use asset and liability representing the obligation to make lease payments for long-term leases.  It is expected that assets and liabilities will increase based on the present value of remaining lease payments for leases in place at the adoption date; however, this is not expected to be material to the Company's results of operations or financial position.  The Company continues to evaluate the extent of potential impact the new guidance will have on the Company's consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.  This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.  The Company has created an internal committee focused on the implementation of ASU 2016-13 and is currently in the process of evaluating data needs and the effects of ASU 2016-13 on its financial statements and disclosures.  The Company is also working with a third party ALLL software provider to help with implementation.

Note 4. Restrictions on Cash and Due From Banks

The Bank is required to maintain reserve balances in cash or on deposit with the Board of Governors of the Federal Reserve System ("FRB") based on the level of certain of its deposits.  This reserve requirement may be met by funds on deposit with the FRB and cash on hand.  As of March 31, 2018 and December 31, 2017, the reserve requirement was $0.

The Company maintains some of its cash in bank deposit accounts at financial institutions other than its subsidiaries that, at times, may exceed federally insured limits.  The Company may lose all uninsured balances if one of the correspondent banks fails without warning.  The Company has not experienced any losses in such accounts.  The Company believes it is not exposed to any significant credit risk on cash and cash equivalents.

Note 5. Investment Securities

Amortized cost and fair values of investment securities are summarized as follows:

Securities Available for Sale:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)
March 31, 2018
U.S. government sponsored agencies	$	69,310	$	-	$	(1,633	)	$	67,677
State and political subdivisions		163,991		177		(3,690	)		160,478
Residential mortgage backed securities		120,195		2		(2,086	)		118,111
Residential collateralized mortgage obligations		18,294		50		(180	)		18,164
Commercial mortgage backed securities		110,244		-		(4,303	)		105,941
SBA pools		554		-		(15	)		539
Totals	$	482,588	$	229	$	(11,907	)	$	470,910
December 31, 2017
U.S. government sponsored agencies	$	69,315	$	-	$	(764	)	$	68,551
State and political subdivisions		157,652		1,306		(252	)		158,706
Residential mortgage backed securities		124,578		98		(1,593	)		123,083
Residential collateralized mortgage obligations		9,715		51		(80	)		9,686
Commercial mortgage backed securities		110,483		67		(2,388	)		108,162
SBA pools		560		-		(15	)		545
Totals	$	472,303	$	1,522	$	(5,092	)	$	468,733

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Securities Held to Maturity	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)
March 31, 2018
SBA pools	$	7,824	$	-	$	(512	)	$	7,312
Totals	$	7,824	$	-	$	(512	)	$	7,312
December 31, 2017
SBA pools	$	7,854	$	-	$	(485	)	$	7,369
Totals	$	7,854	$	-	$	(485	)	$	7,369

 As of March 31, 2018 and 2017, there were no realized net gains or losses on sale and call of securities available for sale.  There was no tax benefit or provision related to these net realized gains and losses for the three months ended March 31, 2018 and 2017. 

A summary of unrealized loss information for investment securities, categorized by security type, as of March 31, 2018 and December 31, 2017 was as follows:

	Less than 12 Months					12 Months or Longer					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Securities Available for Sale:
March 31, 2018
U.S. government sponsored agencies	$	48,412	$	(979	)	$	19,265	$	(654	)	$	67,677	$	(1,633	)
State and political subdivisions		115,741		(2,913	)		24,041		(777	)		139,782		(3,690	)
Residential mortgage backed securities		37,193		(512	)		82,865		(1,574	)		120,058		(2,086	)
Residential collateralized mortgage obligations		12,521		(156	)		4,271		(24	)		16,792		(180	)
Commercial mortgage backed securities		24,331		(536	)		79,377		(3,767	)		103,708		(4,303	)
SBA pools		-		-			539		(15	)		539		(15	)
Totals	$	238,198	$	(5,096	)	$	210,358	$	(6,811	)	$	448,556	$	(11,907	)
December 31, 2017
U.S. government sponsored agencies	$	49,070	$	(331	)	$	19,481	$	(433	)	$	68,551	$	(764	)
State and political subdivisions		23,217		(95	)		24,774		(157	)		47,991		(252	)
Residential mortgage backed securities		18,771		(199	)		88,100		(1,394	)		106,871		(1,593	)
Residential collateralized mortgage obligations		4,761		(67	)		3,502		(13	)		8,263		(80	)
Commercial mortgage backed securities		6,961		(94	)		81,042		(2,294	)		88,003		(2,388	)
SBA pools		-		-			545		(15	)		545		(15	)
Totals	$	102,780	$	(786	)	$	217,444	$	(4,306	)	$	320,224	$	(5,092	)
Securities Held to Maturity:
March 31, 2018
SBA pools	$	-	$	-		$	7,312	$	(512	)	$	7,312	$	(512	)
Totals	$	-	$	-		$	7,312	$	(512	)	$	7,312	$	(512	)
December 31, 2017
SBA pools	$	-	$	-		$	7,369	$	(485	)	$	7,369	$	(485	)
Totals	$	-	$	-		$	7,369	$	(485	)	$	7,369	$	(485	)

As of March 31, 2018, the Company's security portfolio consisted of 156 securities, 133 of which were in an unrealized loss position. As of March 31, 2018, $468.3 million in investment securities had unrealized losses with aggregate depreciation of 2.58% of the Company's amortized cost basis.  Of these securities, $225.0 million in amortized cost had a continuous unrealized loss position for twelve months or longer with an aggregate depreciation of 3.15%.  The unrealized losses relate principally to the general change in interest rates and illiquidity, and not credit quality, that has occurred since the securities' purchase dates, and such unrecognized losses or gains will continue to vary with general interest rate level fluctuations in the future.  As management does not intend to sell the securities, and it is likely that it will not be required to sell the securities before their anticipated recovery, no declines are deemed to be other than temporary.

At  March 31, 2018 and 2017, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of shareholders' equity.

The amortized cost and fair value of investment securities, as of March 31, 2018, by contractual maturity are shown below.  Maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.

	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
One year or less	$	201	$	200	$	-	$	-
One to five years		65,540		64,008		-		-
Five to ten years		6,578		6,487		-		-
Over ten years		161,536		157,999		7,824		7,312
Subtotal		233,855		228,694		7,824		7,312
Residential mortgage backed security		120,195		118,111		-		-
Residential collateralized mortgage obligation		18,294		18,164		-		-
Commercial mortgage backed security		110,244		105,941
Total	$	482,588	$	470,910	$	7,824	$	7,312

Securities with carrying amounts of $83.8 million and $87.4 million as of March 31, 2018 and December 31, 2017, respectively, were pledged as collateral on public deposits and for other purposes as required or permitted by law.

- 9 -

Note 6. Loans and Allowance for Loan Losses

As of March 31, 2018 and December 31, 2017, loans consisted of:

	March 31, 2018			December 31, 2017
	(In thousands)
Commercial	$	67,557		$	61,388
Commercial real estate		384,247			378,802
Residential real estate		169,559			178,296
Construction real estate		68,002			63,569
Installment and other		16,794			18,952
Total loans		706,159			701,007
Unearned income		(813	)		(863	)
Gross loans		705,346			700,144
Allowance for loan losses		(11,238	)		(13,803	)
Net loans	$	694,108		$	686,341

Loan Origination/Risk Management. The Company has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk.  Management and the Board of Directors review and approve these policies and procedures on an annual basis.  A reporting system supplements the review process by providing management with reports related to loan production, loan quality, concentrations of credit, loan delinquencies and non-performing and potential problem loans.  Management has identified the following categories in its loan portfolios:

Commercial loans: These loans are underwritten after evaluating and understanding the borrower's ability to operate profitably and prudently expand its business.  Underwriting standards are designed to promote relationship banking rather than transactional banking.  Management examines current and projected cash flows to determine the ability of the borrower to repay their obligations as agreed.  Commercial loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower.  The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value.  Most commercial and industrial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis.  In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

Commercial real estate loans: These loans are subject to underwriting standards and processes similar to commercial loans, in addition to those of other real estate loans.  These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate.  Commercial real estate lending typically involves higher original amounts than other types of loans and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan.  Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy.  The properties securing the Company's commercial real estate portfolio are geographically concentrated in the markets in which the Company operates.  Management monitors and evaluates commercial real estate loans based on collateral, location and risk grade criteria.  The Company also utilizes third-party sources to provide insight and guidance about economic conditions and trends affecting market areas it serves.  In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied loans.  As of March 31, 2018, 25.2% of the outstanding principal balances of the Company's commercial real estate loans were secured by owner-occupied properties.

With respect to loans to developers and builders that are secured by non-owner occupied properties that the Company may originate from time to time, the Company generally requires the borrower to have had an existing relationship with the Company and have a proven record of success.

Residential real estate loans: Underwriting standards for residential real estate and home equity loans are heavily influenced by statutory requirements, which include, but are not limited to, maximum loan-to-value levels, debt-to-income levels, collection remedies, the number of such loans a borrower can have at one time and documentation requirements.

Construction real estate loans: These loans are underwritten utilizing feasibility studies, independent appraisal reviews, sensitivity analysis of absorption and lease rates and financial analysis of the developers and property owners.  Construction real estate loans are generally based upon estimates of costs and values associated with the completed project and often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project.  Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property or an interim loan commitment from the Company until permanent financing is obtained.  These loans are monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions and the availability of long-term financing.

Installment loans: The Company originates consumer loans utilizing a credit scoring analysis to supplement the underwriting process.  To monitor and manage consumer loan risk, policies and procedures are developed and modified, as needed.  This activity, coupled with relatively small loan amounts that are spread across many individual borrowers, minimizes risk.  Additionally, trend and outlook reports are reviewed by management on a regular basis.

The loan review process complements and reinforces the risk identification and assessment decisions made by lenders and credit personnel, as well as the Company's policies and procedures, which include periodic internal reviews and reports to identify and address risk factors developing within the loan portfolio. The Company engages external independent loan reviews that assess and validate the credit risk program on a periodic basis.  Results of these reviews are presented to and reviewed by management and the Board of Directors.

- 10 -

The following table presents the contractual aging of the recorded investment in current and past due loans by class of loans as of March 31, 2018 and December 31, 2017, including nonaccrual loans:

	Current		30-59 Days Past Due		60-89 Days Past Due		Loans past due 90 days or more		Total Past Due		Total
March 31, 2018	(In thousands)
Commercial	$	67,214	$	318	$	25	$	-	$	343	$	67,557
Commercial real estate		380,993		1,292		-		1,962		3,254		384,247
Residential real estate		166,462		1,314		387		1,396		3,097		169,559
Construction real estate		64,114		338		-		3,550		3,888		68,002
Installment and other		16,673		29		-		92		121		16,794
Total loans	$	695,456	$	3,291	$	412	$	7,000	$	10,703	$	706,159
Nonaccrual loan classification, included above	$	4,729	$	484	$	412	$	7,000	$	7,896	$	12,625
December 31, 2017
Commercial	$	59,703	$	173	$	1,475	$	37	$	1,685	$	61,388
Commercial real estate		371,640		5,490		-		1,672		7,162		378,802
Residential real estate		174,388		1,899		-		2,009		3,908		178,296
Construction real estate		59,291		423		74		3,781		4,278		63,569
Installment and other		18,705		80		81		86		247		18,952
Total loans	$	683,727	$	8,065	$	1,630	$	7,585	$	17,280	$	701,007
Nonaccrual loan classification, included above	$	3,858	$	5,859	$	38	$	7,585	$	13,482	$	17,340

The following table presents the recorded investment in nonaccrual loans and loans past due 90 days or more and still accruing interest by class of loans as of March 31, 2018 and December 31, 2017:

	March 31, 2018				December 31, 2017
	Nonaccrual		Loans past due 90 days or more and still accruing interest		Nonaccrual		Loans past due 90 days or more and still accruing interest
	(In thousands)
Commercial	$	58	$	-	$	102	$	-
Commercial real estate		5,056		-		8,617		-
Residential real estate		3,774		-		4,599		-
Construction real estate		3,645		-		3,911		-
Installment and other		92		-		111		-
Total	$	12,625	$	-	$	17,340	$	-

The Company utilizes an internal asset classification system as a means of reporting problem and potential problem loans.  Under the Company's risk rating system, problem and potential problem loans are classified as "Special Mention," "Substandard," and "Doubtful."  "Substandard" loans include those characterized by the likelihood that the Company will sustain some loss if the deficiencies are not corrected.  Loans classified as "Doubtful" have all the weaknesses inherent in those classified as "Substandard" with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.  Loans that do not currently expose the Company to sufficient risk to warrant classification in one of the aforementioned categories, but possess weaknesses that deserve management's close attention are deemed to be "Special Mention."  Any time a situation warrants, the risk rating may be reviewed.

Loans not meeting the criteria above that are analyzed individually are considered to be pass-rated loans.  The following table presents the risk category by class of loans based on the most recent analysis performed as of March 31, 2018 and December 31, 2017:

	Pass		Special Mention		Substandard		Doubtful		Total
March 31, 2018	(In thousands)
Commercial	$	64,757	$	225	$	2,575	$	-	$	67,557
Commercial real estate		369,163		4,507		10,577		-		384,247
Residential real estate		164,280		-		5,279		-		169,559
Construction real estate		61,717		898		5,387		-		68,002
Installment and other		16,386		-		408		-		16,794
Total	$	676,303	$	5,630	$	24,226	$	-	$	706,159
December 31, 2017
Commercial	$	58,769	$	2	$	2,617	$	-	$	61,388
Commercial real estate		359,768		4,762		14,272		-		378,802
Residential real estate		172,101		-		6,195		-		178,296
Construction real estate		56,661		917		5,991		-		63,569
Installment and other		18,523		-		429		-		18,952
Total	$	665,822	$	5,681	$	29,504	$	-	$	701,007

- 11 -

The following table shows all loans, including nonaccrual loans, by risk category and aging as of March 31, 2018 and December 31, 2017:

	Pass			Special Mention		Substandard		Doubtful		Total
March 31, 2018	(In thousands)
Current		$	673,557	$	5,630	$	16,269	$	-	$	695,456
Past due 30-59 days			2,746		-		545		-		3,291
Past due 60-89 days			-		-		412		-		412
Past due 90 days or more			-		-		7,000		-		7,000
Total		$	676,303	$	5,630	$	24,226	$	-	$	706,159
December 31, 2017	(In thousands)
Current		$	662,445	$	5,681	$	15,601	$	-	$	683,727
Past due 30-59 days			1,785		-		6,280		-		8,065
Past due 60-89 days			1,592		-		38		-		1,630
Past due 90 days or more			-		-		7,585		-		7,585
Total		$	665,822	$	5,681	$	29,504	$	-	$	701,007

As of March 31, 2018 and December 31, 2017, nonaccrual loans totaling $12.6 million and $17.3 million were classified as "Substandard," respectively.

The following table presents loans individually evaluated for impairment by class of loans as of March 31, 2018 and December 31, 2017, showing the unpaid principal balance, the recorded investment of the loan (reflecting any loans with partial charge-offs), and the amount of allowance for loan losses specifically allocated for these impaired loans (if any):

	March 31, 2018							December 31, 2017
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated			Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
	(In thousands)
With no related allowance recorded:
Commercial	$	99	$	96				$	184	$	182
Commercial real estate		8,014		5,056					4,294		4,154
Residential real estate		5,809		5,012					6,585		5,808
Construction real estate		6,804		5,429					7,471		6,049
Installment and other		309		308					349		348
With an allowance recorded:
Commercial		13,267		13,266		$	243		13,361		13,359		$	211
Commercial real estate		6,474		6,474			1,199		10,987		10,987			3,735
Residential real estate		6,641		6,641			857		6,774		6,774			943
Construction real estate		3,206		3,206			227		3,244		3,244			231
Installment and other		243		243			37		236		236			32
Total	$	50,866	$	45,731		$	2,563	$	53,485	$	51,141		$	5,152

The table above includes $39.9 million of troubled debt restructurings, or restructured loans, at March 31, 2018 and $38.9 million of restructured loans at December 31, 2017.

The following table presents loans individually evaluated for impairment by class of loans for the three months ended March 31, 2018 and 2017, showing the average recorded investment and the interest income recognized:

	Three Months Ended
	March 31, 2018				March 31, 2017
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(In thousands)
With no related allowance recorded:
Commercial	$	139	$	1	$	1,989	$	14
Commercial real estate		4,605		-		5,035		10
Residential real estate		5,410		15		4,459		22
Construction real estate		5,739		22		6,982		88
Installment and other		328		3		308		3
With an allowance recorded:
Commercial		13,313		187		13,935		186
Commercial real estate		8,730		70		6,353		67
Residential real estate		6,708		75		8,343		81
Construction real estate		3,225		42		4,209		40
Installment and other		239		2		405		3
Total	$	48,436	$	417	$	52,018	$	514

If nonaccrual loans outstanding had been current in accordance with their original terms, approximately $188.3 thousand and $211.4 thousand would have been recorded as loan interest income during the three months ended March 31, 2018 and 2017, respectively.  Interest income recognized in the above table was primarily recognized on a cash basis.

Recorded investment balances in the above tables exclude accrued interest income and unearned income as such amounts were immaterial.

- 12 -

Allowance for Loan Losses:

For the three months ended March 31, 2018 and 2017, activity in the allowance for loan losses was as follows:

	Commercial			Commercial real estate			Residential real estate			Construction real estate			Installment and other			Unallocated			Total
	(In thousands)
Three Months Ended March 31, 2018:
Beginning balance	$	536		$	8,573		$	2,843		$	1,030		$	315		$	506		$	13,803
Provision (benefit) for loan losses		46			1,046			(323	)		(53	)		(95	)		(401	)		220
Charge-offs		(9	)		(2,736	)		(105	)		(112	)		(28	)		-			(2,990	)
Recoveries		24			22			47			49			63			-			205
Net charge-offs		15			(2,714	)		(58	)		(63	)		35			-			(2,785	)
Ending balance	$	597		$	6,905		$	2,462		$	914		$	255		$	105		$	11,238
Three Months Ended March 31, 2017:
Beginning balance	$	1,449		$	6,472		$	4,524		$	1,119		$	715		$	73		$	14,352
Provision (benefit) for loan losses		320			13			(209	)		(27	)		4			(71	)		30
Charge-offs		(186	)		-			(244	)		(16	)		(137	)		-			(583	)
Recoveries		173			88			55			10			62			-			388
Net charge-offs		(13	)		88			(189	)		(6	)		(75	)		-			(195	)
Ending balance	$	1,756		$	6,573		$	4,126		$	1,086		$	644		$	2		$	14,187

Allocation of the allowance for loan losses (as well as the total loans in each allocation method), disaggregated on the basis of the Company's impairment methodology, is as follows:

	Commercial		Commercial real estate		Residential real estate		Construction real estate		Installment and other		Unallocated		Total
March 31, 2018	(In thousands)
Allowance for loan losses allocated to:
Loans individually evaluated for impairment	$	243	$	1,199	$	857	$	227	$	37	$	-	$	2,563
Loans collectively evaluated for impairment		354		5,706		1,605		687		218		105		8,675
Ending balance	$	597	$	6,905	$	2,462	$	914	$	255	$	105	$	11,238
Loans:
Individually evaluated for impairment	$	13,362	$	11,530	$	11,653	$	8,635	$	551	$	-	$	45,731
Collectively evaluated for impairment		54,195		372,717		157,906		59,367		16,243		-		660,428
Total ending loans balance	$	67,557	$	384,247	$	169,559	$	68,002	$	16,794	$	-	$	706,159
December 31, 2017
Allowance for loan losses allocated to:
Loans individually evaluated for impairment	$	211	$	3,735	$	943	$	231	$	32	$	-	$	5,152
Loans collectively evaluated for impairment		325		4,838		1,900		799		283		506		8,651
Ending balance	$	536	$	8,573	$	2,843	$	1,030	$	315	$	506	$	13,803
Loans:
Individually evaluated for impairment	$	13,541	$	15,141	$	12,582	$	9,293	$	584	$	-	$	51,141
Collectively evaluated for impairment		47,847		363,661		165,714		54,276		18,368		-		649,866
Total ending loans balance	$	61,388	$	378,802	$	178,296	$	63,569	$	18,952	$	-	$	701,007

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification.  The evaluation is performed under the Company's internal underwriting policy.

Troubled Debt Restructurings:

TDRs are defined as those loans where: (1) the borrower is experiencing financial difficulties and (2) the restructuring includes a concession by the Bank to the borrower.

- 13 -

The following table presents loans restructured as TDRs during the three months ended March 31, 2018 and 2017, respectively.

	Three Months Ended March 31, 2018
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Specific reserves allocated
	(Dollars in thousands)
Commercial		1	$	171	$	171	$	1
Commercial real estate		2		2,356		2,356		-
Total		3	$	2,527	$	2,527	$	1

	Three Months ended March 31, 2017
	Number of Contracts		Pre-Modification Outstanding Recorded Investment			Post-Modification Outstanding Recorded Investment			Specific reserves allocated
	(Dollars in thousands)
Construction real estate		1		$	10		$	10		$	-
Total		1		$	10		$	10		$	-

The following table presents loans by class modified as TDRs for which there was a payment default within twelve months following the modification during the three months ended March 31, 2018 and 2017:

	Three Months Ended March 31, 2018
	Number of Contracts		Pre- Modification Outstanding Recorded Investment			Specific reserves allocated
	(Dollars in thousands)
Commercial		1		$	25		$	25
Total		1		$	25		$	25

	Three Months Ended March 31, 2017
	Number of Contracts		Pre- Modification Outstanding Recorded Investment			Specific reserves allocated
	(Dollars in thousands)
Construction real estate		1		$	61		$	-
Total		1		$	61		$	-

Impairment analyses are prepared on TDRs in conjunction with the normal allowance for loan loss process. TDRs restructured during the three months ended March 31, 2018 and 2017 required $1 thousand and $0 in specific reserves, respectively. TDRs resulted in charge-offs of $147 thousand and $20 thousand during the three months ended March 31, 2018 and 2017, respectively.  The TDRs that subsequently defaulted required a provision of $25 thousand and $0 to the allowance for loan losses for the three months ended March 31, 2018 and 2017, respectively.

The following table presents total TDRs, both in accrual and nonaccrual status as of the periods indicated:

	March 31, 2018					December 31, 2017
	Number of contracts			Amount		Number of contracts		Amount
	(Dollars in thousands)
Accrual		$	104	$	32,934	$	108	$	33,801
Nonaccrual			17		6,844		19		5,146
Total		$	121	$	39,778	$	127	$	38,947

              Specific reserves on TDRs at March 31, 2018 and December 31, 2017 were $2.6 million and $2.4 million, respectively.

As of March 31, 2018, the Bank had a total of $2.1 thousand in commitments to lend additional funds on one residential loan classified as a TDR.

Loans to Executive Officers and Directors:

Loan principal balances to executive officers and directors of the Company were $174.6 thousand and $198.4 thousand as of March 31, 2018 and December 31, 2017, respectively.  Total credit available, including companies in which these individuals have management control or beneficial ownership, was $300.6 thousand and $324.4 thousand as of March 31, 2018 and December 31, 2017, respectively.  An analysis of the activity related to these loans as of March 31, 2018 and December 31, 2017 is as follows:

	March 31, 2018			December 31, 2017
	(In thousands)
Balance, beginning	$	198		$	348
Additions		-			13
Changes in Board composition		-			(76	)
Principal payments and other reductions		(24	)		(87	)
Balance, ending	$	174		$	198

- 14 -

Note 7. Loan Servicing and Mortgage Servicing Rights ("MSRs")

Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets.  The Company's mortgage loans serviced for others portfolio was transferred to another Fannie Mae-approved servicer on December 31, 2017.

During the three months ended March 31, 2017, substantially all of the loans serviced for others had a contractual servicing fee of 0.25% on the unpaid principal balance.  These fees are recorded as "mortgage loan servicing fees" under "noninterest income" on the consolidated statements of operations.

Late fees on the loans serviced for others totaled $18 thousand during the three months ended March 31, 2017.  These fees are recorded included in "noninterest income" on the consolidated statements of operations.

Custodial balances on deposit at the Bank in connection with the foregoing loan servicing were approximately $0 and $4.2 million as of March 31, 2018 and December 31, 2017, respectively.  There were no custodial balances on deposit with other financial institutions as of March 31, 2018 and December 31, 2017.

Note 8. Other Real Estate Owned ("OREO")

OREO consists of property acquired due to foreclosure on real estate loans. As of March 31, 2018 and December 31, 2017, total OREO consisted of:

	March 31, 2018		December 31, 2017
	(In thousands)
Commercial real estate	$	1,649	$	1,667
Residential real estate		1,051		886
Construction real estate		3,749		3,879
Total	$	6,449	$	6,432

The following table presents a summary of OREO activity for the three months ended March 31, 2018 and 2017:

	Three Months Ended March 31,
	2018			2017
	(In thousands)
Balance at beginning of period	$	6,432		$	8,436
Transfers in at fair value		473			433
Capitalized improvements		32			-
Write-down of value		(18	)		(82	)
Gain on disposal		39			321
Cash received upon disposition		(509	)		(1,117	)
Sales financed by loans		-			-
Balance at end of period	$	6,449		$	7,991

Note 9. Deposits

As of March 31, 2018 and December 31, 2017, deposits consisted of:

	March 31, 2018		December 31, 2017
	(In thousands )
Demand deposits, noninterest bearing	$	163,134	$	161,677
NOW and money market accounts		428,436		404,225
Savings deposits		388,901		388,300
Time certificates, $250,000 or more		21,339		21,639
Other time certificates		142,284		151,506
Total	$	1,144,094	$	1,127,347

Deposits from executive officers, directors and their affiliates as of March 31, 2018 and December 31, 2017 were $1.8 million and $2.2 million, respectively.

Note 10. Borrowings

Notes payable to the Federal Home Loan Bank of Dallas ("FHLB") as of March 31, 2018 and December 31, 2017 were secured by a blanket assignment of mortgage loans or other collateral acceptable to FHLB, and generally had a fixed rate of interest, interest payable monthly and principal due at end of term, unless otherwise noted. As of March 31, 2018, there were $328.6 million in collateral value from loans pledged under the blanket assignment and $76.1 million from investment securities held in safekeeping at the FHLB. At March 31, 2018, there were $2.3 million in advances outstanding at the FHLB. An additional $402.4 million in advances is available based on the March 31, 2018 value of the remaining unpledged loans and investment securities.  In the event that short-term liquidity is needed, the Bank has established a relationship with a large regional bank to provide short-term borrowings in the form of federal funds purchased.  The Bank has the ability to borrow up to $20 million for a short period (15 to 60 days) from this bank.

The following table details borrowings as of March 31, 2018 and December 31, 2017.

Maturity Date	Rate			Type	Principal due	March 31, 2018			December 31, 2017
						(In thousands)
April 27, 2021		6.343	%	Fixed	At maturity			2,300		2,300
					Total		$	2,300	$	2,300

- 15 -

Note 11. Junior Subordinated Debt

The following table presents details on the junior subordinated debt as of March 31, 2018:

	Trust I			Trust III		Trust IV			Trust V
				(Dollars in thousands)
Date of Issue	March 23, 2000			May 11, 2004		June 29, 2005			September 21, 2006
Amount of trust preferred securities issued	$	10,000		$	6,000	$	10,000		$	10,000
Rate on trust preferred securities		10.875	%	4.70625% (variable)			6.88	%	3.7745% (variable)
Maturity	March 8, 2030			September 8, 2034		November 23, 2035			December 15, 2036
Date of first redemption	March 8, 2010			September 8, 2009		August 23, 2010			September 15, 2011
Common equity securities issued	$	310		$	186	$	310		$	310
Junior subordinated deferrable interest debentures owed	$	-		$	6,186	$	10,310		$	10,310
Rate on junior subordinated deferrable interest debentures		10.875	%	4.70625% (variable)			6.88	%	3.7745% (variable)

On the dates of issue indicated above, the Trusts, being Delaware statutory business trusts, issued trust preferred securities (the "trust preferred securities") in the amount and at the rate indicated above.  These trust preferred securities represent preferred beneficial interests in the assets of the Trusts.  The trust preferred securities will mature on the dates indicated, and are redeemable in whole or in part at the option of Trinity, with the approval of the FRB.  The Trusts also issued common equity securities to Trinity in the amounts indicated above.  The Trusts used the proceeds of the offering of the trust preferred securities to purchase junior subordinated deferrable interest debentures (the "debentures") issued by Trinity, which have terms substantially similar to the trust preferred securities.

On March 8, 2018, Trinity consummated the early redemption of all $10.3 million principal amount of those certain Junior Subordinated Deferrable Interest Debentures due 2030 (the "Debt Securities") issued by Trust I.  The Debt Securities carried an interest rate of 10.875% and were scheduled to mature on March 8, 2030.  The Debt Securities were callable at a redemption rate of 101.088%,  plus accrued and unpaid interest, for a total redemption price of $11.0 million.  Prior deferred issuance costs related to Trust I of $131 thousand were realized as other noninterest expense on the consolidated statement of operations.

Trinity has the right to defer payments of interest on the debentures at any time or from time to time for a period of up to ten consecutive semi-annual periods (or twenty consecutive quarterly periods in the case of Trusts with quarterly interest payments) with respect to each interest payment deferred.  During a period of deferral, unpaid accrued interest is compounded.

Under the terms of the debentures, under certain circumstances of default or if Trinity has elected to defer interest on the debentures, Trinity may not, with certain exceptions, declare or pay any dividends or distributions on its common stock or purchase or acquire any of its common stock.

As of March 31, 2018 and December 31, 2017, there was $110.7 thousand and $456.0 thousand, respectively, in interest accrued and unpaid to trust preferred security holders.

As of March 31, 2018 and December 31, 2017, the Company's trust preferred securities, subject to certain limitations, qualified as Tier 1 Capital for regulatory capital purposes.

Payments of distributions on the trust preferred securities and payments on redemption of the trust preferred securities are guaranteed by Trinity.  Trinity also entered into an agreement as to expenses and liabilities with the Trusts pursuant to which it agreed, on a subordinated basis, to pay any costs, expenses or liabilities of the Trusts other than those arising under the trust preferred securities.  The obligations of Trinity under the junior subordinated debentures, the related indenture, the trust agreement establishing the Trusts, the guarantee and the agreement as to expenses and liabilities, in the aggregate, constitute a full and unconditional guarantee by Trinity of the Trusts' obligations under the trust preferred securities.

Note 12. Income Taxes

For the three months ended March 31, 2018, the Company recorded a tax expense of $193 thousand compared to a tax benefit of $214 thousand for the three months ended March 31, 2017.

Items causing differences between the Federal statutory tax rate and the effective tax rate are summarized as follows:

	Three Months Ended March 31, 2018						Three Months Ended March 31, 2017
	Amount			Rate			Amount			Rate
	(Dollars in thousands)
Federal statutory tax rate	$	396			21.00	%	$	(238	)		34.00	%
State income tax, net of federal benefit		61			3.23	%		155			(22.22	)%
Net tax exempt interest income		(211	)		(11.18	)%		(91	)		13.08	%
Other, net		(53	)		(2.81	)%		(40	)		5.68	%
Tax provision (benefit) before change in valuation allowance		193			10.24	%		(214	)		30.54	%
Change in valuation allowance		-			-			-			-
Provision (benefit) for income taxes	$	193			10.24	%	$	(214	)		30.54	%

A deferred tax asset ("DTA") or liability is recognized to reflect the net tax effects of temporary differences between the carrying amounts of existing assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes.  A valuation allowance is established when it is more likely than not that all or a portion of a net deferred tax asset will not be realized.  The Company had a valuation allowance at December 31, 2017 and March 31, 2018 of $2.5 million on part of the net DTAs.  This valuation allowance was initially recorded in 2017 when it was determined that $1.7 million and $645 thousand of federal and state tax credit carryforwards are expected to expire unused as a result of loss usage limitations resulting from the Company experiencing an "ownership change" under Section 382 of the Internal Revenue Code on December 19, 2016 which limits its ability to use pre-ownership change of control net operating losses and certain other pre-ownership change tax attributes against the Company's post-ownership change income. 

Note 13. Commitments and Off-Balance-Sheet Activities

Credit-related financial instruments: The Company is a party to credit-related commitments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers.  These credit-related commitments include commitments to extend credit, standby letters of credit and commercial letters of credit.  Such credit-related commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets.

- 16 -

The Company's exposure to credit loss is represented by the contractual amount of these credit-related commitments.  The Company follows the same credit policies in making credit-related commitments as it does for on-balance-sheet instruments.

As of March 31, 2018 and December 31, 2017, the following credit-related commitments were outstanding:

	Contract Amount
	March 31, 2018			December 31, 2017
	(In thousands)
Unfunded commitments under lines of credit		$	133,162	$	122,910
Commercial and standby letters of credit			5,277		5,377
Commitments to make loans			15,444		1,909

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.  Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.  The commitments for equity lines of credit may expire without being drawn upon.  Therefore, the total commitment amounts do not necessarily represent future cash requirements.  The amount of collateral obtained, if deemed necessary by the Bank, is based on management's credit evaluation of the customer.  Unfunded commitments under commercial lines of credit, revolving credit lines and overdraft protection agreements are commitments for possible future extensions of credit to existing customers.  Overdraft protection agreements are uncollateralized, but most other unfunded commitments have collateral.  These unfunded lines of credit usually do not contain a specified maturity date and may not necessarily be drawn upon to the total extent to which the Bank is committed.

Commitments to make loans are generally made for periods of 90 days or less.  The Company had outstanding loan commitments, excluding undisbursed portions of loans in process and equity lines of credit, of approximately $138.4 million as of March 31, 2018 and $128.3 million as of December 31, 2017, respectively.  Of these commitments outstanding, the breakdown between fixed rate and adjustable rate loans is as follows:

	March 31, 2018			December 31, 2017
	(In thousands)
Fixed rate		$	16,878	$	17,933
Adjustable rate			121,561		110,354
Total		$	138,439	$	128,287

The fixed loan commitments as of March 31, 2018 have interest rates ranging from 0.0% to 6.5% and maturities ranging from on demand to 8 years.

The FHLB requires a blanket assignment of mortgage loans or other collateral acceptable to the FHLB to secure the Company's short and long-term borrowings from the FHLB.  The value of collateral with the FHLB at March 31, 2018 was $404.7 million.

Commercial and standby letters of credit are conditional credit-related commitments issued by the Bank to guarantee the performance of a customer to a third party.  Those letters of credit are primarily issued to support public and private borrowing arrangements.  Essentially all letters of credit issued have expiration dates within one year.  The credit risk involved in issuing letters of credit is the same as that involved in extending loans to customers.  The Bank generally holds collateral supporting those credit-related commitments, if deemed necessary.  In the event the customer does not perform in accordance with the terms of the agreement with the third party, the Bank would be required to fund the credit-related commitment.  The maximum potential amount of future payments the Bank could be required to make is represented by the contractual amount shown in the summary above.  If the credit-related commitment is funded, the Bank would be entitled to seek recovery from the customer.  As of both March 31, 2018 and December 31, 2017, $575 thousand had been recorded as liabilities for the Company's potential losses under these credit-related commitments.  The fair value of these credit-related commitments is approximately equal to the fees collected when granting these letters of credit.  These fees collected were $24 thousand and $23 thousand as of March 31, 2018 and December 31, 2017, respectively, and are included in "other liabilities" on the consolidated balance sheets.

Note 14. Preferred Equity Issues

The Company had no outstanding preferred shares as of March 31, 2018 or December 31, 2017.

Note 15. Stock Incentives

At the Shareholders' Meeting held on January 22, 2015, the Company's shareholders approved the Trinity Capital Corporation 2015 Long-Term Incentive Plan ("2015 Plan") for the benefit of key employees.  As of December 31, 2017, only 30,477 shares of voting common stock remained available for issuance.  In accordance with the terms for the 2015 Plan, on February 21, 2018, the Board approved an additional 500,000 shares of common stock to be reserved under the 2015 Plan. The Compensation Committee determines the terms and conditions of the awards.

There were 239,075 Restricted Stock Unit ("RSU") awards granted under the 2015 Plan during the quarter ended March 31, 2018 and forfeitures of 6,500 RSUs during the quarter ended March 31, 2018, leaving 297,902 shares of common stock available remaining to be issued under the 2015 Plan at March 31, 2018. 

Because share-based compensation awards vesting in the current periods were granted on a variety of dates, the assumptions are presented as weighted averages in those assumptions.  A summary of RSU activity under the 2015 Plan for the three months ended March 31, 2018 is presented below:  

	Shares			Weighted Average Grant Price		Weighted-Average Remaining Contractual Term, in Years		Aggregate Intrinsic Value (in thousands)
RSUs
Nonvested as of January 1, 2018		452,782		$	4.70		2.01	$	2,130
Granted		239,075			7.58		1.80		1,812
Vested		(13,925	)		4.00		-		(56	)
Forfeited or expired		(6,500	)		4.75		-		(31	)
Outstanding Nonvested as of March 31, 2018		671,432		$	5.74		1.66	$	3,855

Share-based compensation expense of $217 thousand and $16 thousand was recognized for the three months ended March 31, 2018 and 2017, respectively.  As of March 31, 2018, there was $3.4 million in unrecognized compensation costs related to unvested share-based compensation awards granted under the 2015 Plan.   The cost will be recognized over the remaining vesting periods.

- 17 -

Note 16. Fair Value Measurements

ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.  A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability.  The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability shall not be adjusted for transaction costs.  An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction.  Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact.

The Company uses valuation techniques that are consistent with the sales comparison approach, the income approach and/or the cost approach.  The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities.  The income approach uses valuation techniques to convert expected future amounts, such as cash flows or earnings, to a single present value amount on a discounted basis.  The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost).  Valuation techniques should be consistently applied. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability.  Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.  In that regard, ASC Topic 820 establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a reporting entity's own assumptions about the assumptions that market participants would use in pricing an asset or liability.

While management believes the Company's valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.  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 the Company's monthly and/or quarterly valuation process.

Financial Instruments Recorded at Fair Value on a Recurring Basis

Securities Available for Sale. The fair values of securities available for sale are determined by quoted prices in active markets, when available.  If quoted market prices are not available, the fair value is determined by a matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities' relationship to other benchmark quoted securities.

The following table summarizes the Company's financial assets and off-balance-sheet instruments measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

March 31, 2018	Total			Level 1			Level 2			Level 3
	(In thousands)
Financial Assets:
Investment securities available for sale:
U.S. government sponsored agency		$	67,677		$	-		$	67,677		$	-
States and political subdivision			160,478			-			160,478			-
Residential mortgage backed security			118,111			-			118,111			-
Residential collateralized mortgage obligation			18,164			-			18,164			-
Commercial mortgage backed security			105,941			-			105,941			-
SBA pools			539			-			539			-
Total		$	470,910		$	-		$	470,910		$	-

December 31, 2017	Total			Level 1			Level 2			Level 3
	(In thousands)
Financial Assets:
Investment securities available for sale:
U.S. government sponsored agency		$	68,551		$	-		$	68,551		$	-
States and political subdivision			158,706			-			158,706			-
Residential mortgage backed security			123,083			-			123,083			-
Residential collateralized mortgage obligation			9,686			-			9,686			-
Commercial mortgage backed security			108,162			-			108,162			-
SBA pools			545			-			545			-
Total		$	468,733		$	-		$	468,733		$	-

There were no financial assets or financial liabilities measured at fair value on a recurring basis for which the Company used significant unobservable inputs (Level 3) during the periods presented in these financial statements.  There were no transfers between the levels used on any asset classes during the three months ended March 31, 2018 or the year ended December 31, 2017.

Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis

The Company may be required, from time to time, to measure certain financial assets and financial liabilities at fair value on a nonrecurring basis in accordance with GAAP.

Impaired Loans.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.  Once a loan is identified as impaired, management measures the amount of that impairment in accordance with ASC Topic 310.  The fair value of impaired loans is estimated using one of several methods, including collateral value, liquidation value and discounted cash flows.  Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans.

In accordance with ASC Topic 820, impaired loans where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy.  Collateral values are estimated using Level 3 inputs based on customized discounting criteria.  For collateral dependent impaired loans, the Company obtains a current independent appraisal of loan collateral.  Other valuation techniques are used as well, including internal valuations, comparable property analysis and contractual sales information.

- 18 -

OREO. OREO is adjusted to fair value at the time the loans are transferred to OREO. Subsequently, OREO is carried at the lower of the carrying value or fair value. Fair value is determined based upon independent market prices, appraised values of the collateral or management's estimation of the value of the collateral. The fair value of OREO was computed based on third party appraisals, which are level 3 valuation inputs.

As of March 31, 2018, impaired loans with a carrying value of $29.8 million had a valuation allowance of $2.6 million. As of December 31, 2017, impaired loans with a carrying value of $39.8 million had a valuation allowance of $5.2 million recorded during 2017.

In the table below, OREO had write-downs during the three months ended March 31, 2018 of $19 thousand.  In the table below, OREO had writedowns during the year ended December 31, 2017 of $43 thousand.  The valuation adjustments on OREO have been recorded through earnings.

Assets measured at fair value on a nonrecurring basis as of March 31, 2018 and December 31, 2017 are included in the table below:

`	Total		Level 1		Level 2		Level 3
	(In thousands)
March 31, 2018
Financial Assets
Impaired loans	$	27,267	$	-	$	-	$	27,267
Financial Assets
OREO		93		-		-		93
December 31, 2017
Financial Assets
Impaired loans	$	34,600	$	-	$	-	$	34,600
Non-Financial Assets
OREO		405		-		-		405

Assumptions used to determine impaired loans and OREO are presented below by classification, measured at fair value and on a nonrecurring basis as of March 31, 2018 and December 31, 2017:

	Fair value		Valuation Technique(s)	Unobservable Input(s)	Adjustment Range, Weighted Average
March 31, 2018	(In thousands)
Impaired loans
Commercial	$	13,023	Sales comparison	Adjustments for differences of comparable sales	(5.70)% to (150.00)%, (6.07)%
Commercial real estate		5,275	Sales comparison	Adjustments for differences of comparable sales	(4.25) to (7.62), (6.07)
Residential real estate		5,784	Sales comparison	Adjustments for differences of comparable sales	(3.13) to (7.50), (5.76)
Construction real estate		2,979	Sales comparison	Adjustments for differences of comparable sales	(4.00) to (7.25), (6.19)
Installment and other		206	Sales comparison	Adjustments for differences of comparable sales	(4.25) to (8.00), (6.24)
Total impaired loans	$	27,267
OREO
Commercial real estate	$	93	Sales comparison	Adjustments for differences of comparable sales	(16.67)% to (16.67)%,(16.67)%
		93

December 31, 2017
Impaired loans
Commercial	$	13,359	Sales comparison	Adjustments for differences of comparable sales	(5.00)% to (100.00)%, (5.97)%
Commercial real estate		10,987	Sales comparison	Adjustments for differences of comparable sales	(4.25) to (7.62), (6.63)
Residential real estate		6,774	Sales comparison	Adjustments for differences of comparable sales	(3.13) to (7.80), (5.74)
Construction real estate		3,244	Sales comparison	Adjustments for differences of comparable sales	(4.00) to (7.25), (6.18)
Installment and other		236	Sales comparison	Adjustments for differences of comparable sales	(4.25) to (8.00), (6.27)
Total impaired loans	$	34,600
OREO
Residential real estate		315	Sales comparison	Adjustments for differences of comparable sales	(9.09) to (9.09), (9.09)
Construction real estate		90	Sales comparison	Adjustments for differences of comparable sales	(9.78) to (9.78), (9.78)
Total OREO	$	405

Fair Value Assumptions

ASC Topic 825 requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis.  The following methods and assumptions were used by the Company in estimating the fair values (representing exit price) of its other financial instruments.

- 19 -

The carrying amount and estimated fair values of other financial instruments as of March 31, 2018 and December 31, 2017 are as follows:

	Carrying amount		Level 1		Level 2		Level 3		Total
	(In thousands)
March 31, 2018
Financial assets:
Cash and due from banks	$	10,003	$	10,003	$	-	$	-	$	10,003
Interest-bearing deposits with banks		9,517		9,517		-		-		9,517
Investments:
Available for sale		470,910		-		470,910		-		470,910
Held to maturity		7,824		-		7,312		-		7,312
Non-marketable equity securities		4,471		N/A		N/A		N/A		N/A
Loans, net		694,108		-		-		683,069		683,069
Accrued interest receivable on securities		2,726		-		2,726		-		2,726
Accrued interest receivable on loans		2,053		-		-		2,053		2,053
Accrued interest receivable other		7						7		7
Off-balance-sheet instruments:
Loan commitments and standby letters of credit	$	24	$	-	$	24	$	-	$	24
Financial liabilities:
Non-interest bearing deposits	$	163,134	$	163,134	$	-	$	-	$	163,134
Interest bearing deposits		980,960		-		979,054		-		979,054
Long-term borrowings		2,300		-		2,540		-		2,540
Junior subordinated debt		26,764		-		-		17,572		17,572
Accrued interest payable		279		-		168		111		279

December 31, 2017
Financial assets:
Cash and due from banks	$	12,893	$	12,983	$	-	$	-	$	12,983
Interest-bearing deposits with banks		22,541		22,541		-		-		22,541
Securities purchased under resell agreements		-		-		-		-		-
Investments:		-		-		-		-		-
Available for sale		468,733		-		468,733		-		468,733
Held to maturity		7,854		-		7,369		-		7,369
Non-marketable equity securities		3,617		N/A		N/A		N/A		N/A
Loans, net		686,341		-		-		680,911		680,911
Accrued interest receivable on securities		2,795		-		2,795		-		2,795
Accrued interest receivable on loans		2,238		-		-		2,238		2,238
Accrued interest receivable other		21		-		-		21		21
Off-balance-sheet instruments:
Loan commitments and standby letters of credit	$	23	$	-	$	23	$	-	$	23
Financial liabilities:
Non-interest bearing deposits	$	161,677	$	161,677	$	-	$	-	$	161,677
Interest bearing deposits		965,670		-		964,717		-		964,717
Long-term borrowings		2,300		-		2,592		-		2,592
Junior subordinated debt		37,116		-		-		27,128		27,128
Accrued interest payable		628		-		172		456		628

Note 17. Regulatory Matters

The ability to pay dividends by any financial institution is affected by the requirement to maintain adequate capital pursuant to applicable capital adequacy guidelines and regulations, and a financial institution generally is prohibited from paying any dividends if, following payment thereof, the institution would be undercapitalized.

The Company is subject to statutory and regulatory restrictions on the payment of dividends and generally cannot pay dividends that exceed its net income or which may weaken its financial health.  The Company's primary source of cash is dividends from the Bank.  Generally, the Bank is subject to certain restrictions on dividends that it may declare without prior regulatory approval.  The Bank cannot pay dividends in any calendar year that, in the aggregate, exceed the Bank's year-to-date net income plus its retained income for the two preceding years.  Additionally, the Bank cannot pay dividends that are in excess of the amount that would result in the Bank falling below the minimum required for capital adequacy purposes.

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies.  Failure to meet capital requirements can initiate regulatory action.  The Basel III Rules became effective for the Company on January 1, 2015 with full compliance with all of the requirements being phased in over a multi-year schedule, and fully phased in by January 1, 2019.  See Item 1 - "Supervision & Regulation" for further discussion regarding the Basel III Rules.  The Company and the Bank met all capital adequacy requirements to which they were subject as of March 31, 2018 and December 31, 2017.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition.  If adequately capitalized, regulatory approval is required to accept brokered deposits.  If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required.

- 20 -

The statutory requirements and actual amounts and ratios for the Company and the Bank are presented below:

	Actual					For Capital Adequacy Purposes					To be well capitalized under prompt corrective action provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
March 31, 2018
Total capital (to risk-weighted assets):
Consolidated	$	144,143		16.8772	%	$	68,326		8.0000	%		N/A		N/A
Bank only		137,691		16.1420	%		68,240		8.0000	%	$	85,300		10.0000	%
Tier 1 capital (to risk weighted assets):
Consolidated		133,453		15.6256	%		51,244		6.0000	%		N/A		N/A
Bank only		127,014		14.8903	%		51,180		6.0000	%		68,240		8.0000	%
Common Equity Tier 1 Capital (to risk weighted assets):
Consolidated		107,453		12.5813	%		38,433		4.5000	%		N/A		N/A
Bank only		127,014		14.8903	%		38,385		4.5000	%		55,445		6.5000	%
Tier 1 leverage (to average assets):
Consolidated		133,453		10.4275	%		51,193		4.0000	%		N/A		N/A
Bank only		127,014		9.9331	%		51,148		4.0000	%		63,935		5.0000	%

N/A—not applicable

	Actual					For Capital Adequacy Purposes					To be well capitalized under prompt corrective action provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
December 31, 2017
Total capital (to risk-weighted assets):
Consolidated	$	152,076		18.1982	%	$	66,853		8.0000	%		N/A		N/A
Bank only		134,959		16.1823	%		66,720		8.0000	%	$	83,399		10.0000	%
Tier 1 capital (to risk weighted assets):
Consolidated		132,900		15.9035	%		50,140		6.0000	%		N/A		N/A
Bank only		124,481		14.9259	%		50,040		6.0000	%		66,720		8.0000	%
Common Equity Tier 1 Capital (to risk weighted assets):
Consolidated		106,320		12.7228	%		37,605		4.5000	%		N/A		N/A
Bank only		124,481		14.9259	%		37,530		4.5000	%		54,210		6.5000	%
Tier 1 leverage (to average assets):
Consolidated		132,900		10.1821	%		33,427		4.0000	%		N/A		N/A
Bank only		124,481		9.6006	%		33,360		4.0000	%		41,700		5.0000	%

N/A - not applicable

The Bank's capital ratios fall into the category of "well-capitalized" as of  March 31, 2018 and December 31, 2017.

Trinity and the Bank are also required to maintain a "capital conservation buffer" of 2.5% above the regulatory minimum risk-based capital requirements. The purpose of the conservation buffer is to ensure that banks maintain a buffer of capital that can be used to absorb losses during periods of financial and economic stress.  The capital conservation buffer began to be phased in beginning in January 2016 at 0.625% of risk-weighted assets and will increase by that amount each year until fully implemented in January 2019.  An institution would be subject to limitations on certain activities, including payment of dividends, share repurchases and discretionary bonuses to executive officers, if its capital level is below the buffered ratio. Factoring in the fully phased-in conservation buffer increases the minimum ratios described above to 7.0% for Common Equity Tier 1, 8.5% for Tier 1 Capital and 10.5% for Total Capital. At March 31, 2018 the Bank's capital conservation buffer was 8.1420% and the consolidated capital conservation buffer was 8.0813%.  At December 31, 2017 the Bank's capital conservation buffer was 8.1823% and the consolidated capital conservation buffer was 8.2228%.

- 21 -

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations analyzes the major elements of the Company's balance sheets and statements of income. This section should be read in conjunction with the Company's unaudited consolidated financial statements and accompanying notes included elsewhere in this Quarterly Report on Form 10-Q ("Form 10-Q") and with the consolidated financial statements and accompanying notes and other detailed information appearing elsewhere in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 ("2017 Form 10-K").

Special Note Concerning Forward-Looking Statements

This Form 10-Q contains, and future oral and written statements of the Company and its management may contain, forward-looking statements, within the meaning of such term in the Private Securities Litigation Reform Act of 1995, with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company.  Forward-looking statements, which are based upon the reasonable beliefs, expectations and assumptions of the Company's management and on information currently available to management, are generally identifiable by the use of words such as "believe," "expect," "anticipate," "plan," "intend," "estimate," "may," "will," "would," "could," "should" or other similar expressions.  Additionally, all statements in this Form 10-Q, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events, except as required by law.

The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. The factors, which could cause actual results to differ materially from those expressed in, or implied by, the forward-looking statements and could have a material adverse effect on the operations and future prospects of the Company and its subsidiaries are detailed in the "Risk Factors" section included under Item 1A of Part I of the 2017 Form 10-K.  These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

Critical Accounting Policies

Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and could potentially result in materially different results under different assumptions and conditions. We believe that the most critical accounting policies upon which our financial condition and results of operation depend, and which involve the most complex subjective decisions or assessments, are included in the discussion entitled "Critical Accounting Policies" in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," in the 2017 Form 10-K, and all amendments thereto, as filed with the Securities and Exchange Commission. There have been no material changes to the critical accounting policies disclosed in the 2017 Form 10-K.

Results of Operations

The profitability of the Company's operations depends primarily on its net interest income, which is the difference between total interest earned on interest-earning assets and total interest paid on interest-bearing liabilities.  The Company's net income is also affected by its provision for loan losses as well as noninterest income and noninterest expenses.

Net interest income is affected by changes in the volume and mix of interest-earning assets, the level of interest rates earned on those assets, the volume and mix of interest-bearing liabilities, and the level of interest rates paid on those interest-bearing liabilities.  Provision for loan losses is dependent on changes in the loan portfolio and management's assessment of the collectability of the loan portfolio, as well as economic and market conditions.  Noninterest income and noninterest expenses are impacted by growth of operations and growth in the number of accounts.  Noninterest expenses are impacted by additional employees, branch facilities and promotional marketing expenses.  A number of accounts affect noninterest income, including service fees as well as noninterest expenses such as computer services, supplies, postage, telecommunications and other miscellaneous expenses.

Net Income (Loss). Net income available to common shareholders for the three months ended March 31, 2018 was $1.7 million, or a diluted earnings per common share of $0.09, compared to net loss available to common shareholders of $1.3 million for the three months ended March 31, 2017, or diluted loss per common share of $0.10, an increase of $2.9 million in net income and an increase in diluted earnings per common share of $0.19.  This increase in net income available to common shareholders was primarily due to a decrease in legal, professional, and accounting fees of $1.7 million due to finalizing the 2016 financial statement audits in early 2017, a decrease in dividends and discount accretion on preferred shares of $770 thousand due to the redemption of shares of Series A and Series B Preferred Stock, an increase in investment interest income of $702 thousand, a decrease in salaries and employee benefits of $486 thousand, a decrease in data processing expenses of $345 thousand due to the renegotiation of the core system contract in the fourth quarter of 2017, a decrease in collection expenses of $324 thousand, a decrease in the valuation of the MSR assets of $238 thousand due to the sale of that asset, and transfer of the mortgage loan servicing portfolio, in December 2017, a decrease in regulatory assessments of $230 thousand due to the termination of the written agreement with the FRB and the Consent Order with the Office of the Comptroller of the Currency (the "OCC"), an increase in trust and investment fees of $146 thousand, an increase in BOLI income of $127 thousand due to additional BOLI investments in 2017, a decrease in directors' related expenses of $108 thousand, a decrease in recruiting expenses of $91 thousand, and a decrease in postage of $80 thousand.  These were partially offset by a decrease in loan interest income of $1.2 million, a decrease in mortgage loan servicing fees of $488 thousand due to the Bank's strategy to generate applications for non-affiliated mortgage companies on a fee basis, a decrease in gains on sale of OREO of $287 thousand, an increase of $190 thousand in provision expense, and an increase in occupancy expenses of $99 thousand.

- 22 -

Net Interest Income. The following table presents the total dollar amount of interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities, and the resultant costs, expressed both in dollars and rates, for the periods indicated:

	Three Months Ended March 31,
	2018							2017
	Average Balance		Interest		Yield /Rate			Average Balance		Interest		Yield /Rate
					(Dollars in thousands)
Interest-earning assets:
Loans(1)	$	696,922	$	8,079		4.68	%	$	779,447	$	9,307		4.84	%
Taxable investment securities		326,319		1,582		1.94	%		416,521		1,672		1.63	%
Investment securities exempt from federal income taxes		162,565		1,038		2.55	%		42,122		246		2.37	%
Other interest-bearing deposits		13,356		58		1.77	%		51,866		106		0.83	%
Non-marketable equity securities		4,212		55		5.30	%		4,004		55		5.57	%
Total interest-earning assets		1,203,374		10,812		3.62	%		1,293,960		11,386		3.57	%
Non-interest-earning assets		73,430							57,906
Total assets	$	1,276,804						$	1,351,866
Interest-bearing liabilities:
Deposits:
NOW deposits	$	388,817	$	65		0.07	%	$	392,990	$	62		0.06	%
Money market deposits		19,135		4		0.09	%		17,652		4		0.09	%
Savings deposits		387,760		76		0.08	%		409,958		82		0.08	%
Time deposits over $100,000		87,331		158		0.73	%		131,638		200		0.62	%
Time deposits under $100,000		81,803		109		0.54	%		77,591		111		0.58	%
Short-term borrowings		3,444		17		1.86	%		-		-		0.00	%
Long-term borrowings		2,300		36		6.34	%		2,300		36		6.35	%
Long-term capital lease obligation		-		-		0.00	%		2,211		-		0.00	%
Junior subordinated debt		34,228		787		9.19	%		37,116		720		7.87	%
Total interest-bearing liabilities		1,004,818		1,252		0.50	%		1,071,456		1,215		0.46	%
Demand deposits, noninterest-bearing		159,899							160,790
Other noninterest-bearing liabilities		8,218							14,163
Shareholders' equity, including stock owned by ESOP		103,869							105,457
Total liabilities and shareholders' equity	$	1,276,804						$	1,351,866
Net interest income/interest rate spread (2)			$	9,560		3.12	%			$	10,171		3.11	%
Net interest margin (3)						3.20	%						3.19	%

(1) Average loans include nonaccrual loans of $14.7 million and $16.1 million for the three months ended March 31, 2018 and 2017, respectively.  Interest income includes loan origination fees of $49 thousand and $275 thousand for the three months ended March 31, 2018 and 2017, respectively.

(2) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.

(3) Net interest margin represents net interest income as a percentage of average interest-earning assets.

Net interest income decreased $611 thousand to $9.6 million as of March 31, 2018 from $10.2 million as of March 31, 2017 due to lower interest income of $574 thousand and an increase in interest expense of $37 thousand from 2017.  Net interest income decreased primarily due to a lower average volume in taxable investment securities of $90.2 million, a lower average volume in loans of $82.5 million, and a lower average volume in other interest-bearing deposits of $38.5 million, partially offset by an increase in average tax-exempt investment securities of $120.4 million.  The change in mix from taxable investment securities and loans to tax-exempt securities resulted in the average yield on earning assets increasing five basis points to 3.62% for the three months ended March 31, 2018 from 3.57% for the three months ended March 31, 2017.  The increase in interest expense was primarily due to subordinated debt interest expense increasing by $67 thousand due to the early payoff, in March 2018, of certain Junior Subordinated Deferrable Interest Debentures due 2030 that were issued by Trinity Capital Trust I.  These securities were callable at a redemption rate of 101.088% but were carried at an interest rate of 10.875%.  Total deposits average volume decreased $65.0 million, with the largest decline in volume in total time deposits of $40.1 million.  The increase in subordinated debt expense and shift in deposit mix caused the cost of interest-bearing liabilities to increase four basis points to 0.50% for the three months ended March 31, 2018 from 0.46% for the three months ended March 31, 2017.  Net interest margin increased one basis point to 3.20% for the three months ended March 31, 2018 from 3.19% for the three months ended March 31, 2017.

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Volume, Mix and Rate Analysis of Net Interest Income. The following table presents the extent to which changes in volume and interest rates of interest-earning assets and interest-bearing liabilities have affected interest income and interest expense during the periods indicated.  Information is provided on changes in each category due to (i) changes attributable to changes in volume (change in volume times the prior period interest rate) and (ii) changes attributable to changes in interest rate (changes in rate times the prior period volume). Changes attributable to the combined impact of volume and rate have been allocated proportionally to the changes due to volume and the changes due to rate.

	Three Months Ended March 31,
	2018 Compared to 2017
	Change Due to Volume			Change Due to Rate			Total Change
	(In thousands)
Interest-earning Assets:
Loans	$	(985	)	$	(243	)	$	(1,228	)
Taxable investment securities		(362	)		272			(90	)
Investment securities exempt from federal income taxes		703			89			792
Other interest bearing deposits		(79	)		31			(48	)
Non-marketable equity securities		3			(3	)		-
Total (decrease) increase in interest income	$	(720	)	$	146		$	(574	)
Interest-bearing Liabilities:
NOW deposits	$	(1	)	$	4		$	3
Money market deposits		-			-			-
Savings deposits		(4	)		(2	)		(6	)
Time deposits over $100,000		(67	)		25			(42	)
Time deposits under $100,000		6			(8	)		(2	)
Short-term borrowings		-			16			16
Long-term borrowings		-			-			-
Junior subordinated debt		(56	)		123			67
Total increase (decrease) in interest expense	$	(122	)	$	158		$	36
Increase (decrease) in net interest income	$	(598	)	$	(12	)	$	(610	)

Provision for Loan Losses. Our allowance is established through charges to income in the form of the provision in order to bring our allowance to a level deemed appropriate by management. The allowance at March 31, 2018 and March 31, 2017 was $11.2 million and $14.2 million, respectively, representing 1.6% and 1.8% of total loans, respectively, as of such dates. We recorded a $220 thousand provision for loan losses for the three months ended March 31, 2018 compared with a provision for loan losses of $30 thousand for the three months ended March 31, 2017. The increase in the provision was primarily due to an increase in loan balances.  See the "Financial Condition" section below for further information on provision for loan losses.

Noninterest Income. Changes in noninterest income were as follows for the periods indicated:

	Three Months Ended March 31, 2018,
	2018			2017			Net difference
	(In thousands)
Noninterest income:
Mortgage loan servicing fees	$	(2	)	$	486		$	(488	)
Trust and investment services fees		797			651			146
Service charges on deposits		254			295			(41	)
Net gain (loss) on sale of OREO		41			328			(287	)
Net gain on sale of loans		-			-			-
Net gain (loss) on sale of securities		-			-			-
BOLI income		218			91			127
Mortgage referral fees		245			327			(82	)
Interchange fees		496			630			(134	)
Other fees		303			288			15
Other noninterest income		6			(21	)		27
Total noninterest income	$	2,358		$	3,075		$	(717	)

Noninterest income decreased $717 thousand to $2.4 million for the three months ended March 31, 2018 from $3.1 million for the three months ended March 31, 2017, primarily attributable to a decrease of $488 thousand in mortgage loan servicing fees due to the sale of the MSR asset and servicing portfolio at the end of 2017, a decrease of $287 thousand in gains on sale of OREO, a decrease of $82 thousand in mortgage referral fees, a decrease of $134 thousand in interchange fees primarily due to one-time true up of interchange fees in 2017, and a decrease of $41 thousand in service charges on deposits.  Those decreases were partially offset by an increase of $146 thousand in trust and investment fees, an increase of $127 thousand in BOLI income due to additional BOLI investments in 2017, and a decrease in venture capital expenses of $43 thousand.

- 24 -

Noninterest Expenses. Changes in noninterest expenses were as follows for the periods indicated:

	Three Months Ended March 31,
	2018		2017		Net difference
	(In thousands)
Noninterest expenses:
Salaries and employee benefits	$	5,551	$	6,037	$	(486	)
Occupancy		590		491		99
Data processing		1,029		1,374		(345	)
Legal, professional, and accounting fees		525		2,212		(1,687	)
Amortization and valuation of MSRs		-		238		(238	)
Other noninterest expenses:
Marketing		106		160		(54	)
Supplies		56		77		(21	)
Postage		54		134		(80	)
FDIC insurance premiums		127		311		(184	)
Collection expenses		186		510		(324	)
Other		1,589		2,372		(783	)
Total other noninterest expenses		2,118		3,564		(1,446	)
Total noninterest expenses	$	9,813	$	13,916	$	(4,103	)

Noninterest expenses decreased $4.1 million to $9.8 million for the three months ended March 31, 2018 from $13.9 million for the three months ended March 31, 2017. Noninterest expenses decreased in almost all categories due to the strategic business review initiative in 2017.  Decreases were realized in legal, professional, and accounting fees of $1.7 million due to finalizing the 2016 financial statement audit in 2017, in salaries and benefits of $486 thousand which is reflective of the reduction in force completed in 2017, in data processing of $345 thousand which reflects the cost savings from the contract renegotiation completed at the end of 2017, in collection expenses of $324 thousand, in the value of the MSR asset of $238 thousand which reflects the sale of the MSR asset and transfer of the servicing portfolio at the end of 2017, in regulatory assessments of $230 thousand which reflects decreased costs from the termination of the OCC's Consent Order and the FRB's Written Agreement, director related expenses of $108 thousand, in recruiting expenses of $91 thousand, in postage expense of $80 thousand, in customer perks and sponsorships of $78 thousand, in employee education and travel expenses of $57 thousand, and in fraud losses of $54 thousand.  These decreases were partially offset by an increase of $99 thousand in occupancy expenses.

Impact of Inflation and Changing Prices.The primary impact of inflation on our operations is increased operating costs.Unlike industrial companies, nearly all of our assets and liabilities are monetary in nature.  As a result, interest rates have a greater impact on our performance than do the effects of general levels of inflation.  Over short periods of time, interest rates do not necessarily move in the same direction or to the same extent as the price of goods and services.

Income Taxes. Provision for income taxes increased $407 thousand for the three months ended March 31, 2018 from the three months ended March 31, 2017.   There was a provision for taxes for the three months ended March 31, 2018 of $193 thousand.  There was a benefit for taxes for the three months ended March 31, 2017 of $214 thousand.

Financial Condition

Balance Sheet-General. Total assets as of March 31, 2018 were $1.28 billion, decreasing $4.5 million from $1.29 billion as of December 31, 2017.  During the first quarter of 2018, interest bearing deposits with banks decreased $13.0 million from December 31, 2017 while net loans increased $7.8 million and investment securities increased $2.1 million from December 31, 2017.  During the same period total liabilities decreased to $1.18 billion, a decrease of $415 thousand.  Shareholders' equity (excluding stock owned by the ESOP) decreased $4.1 million to $95.5 million as of March 31, 2018 compared to $99.6 million as of December 31, 2017 primarily as a result of the change in other comprehensive income due to the decrease in market value of the investment portfolio.

Investment Securities. We primarily utilize our investment portfolio to provide a source of earnings, to manage liquidity, to provide collateral to pledge against public deposits, and to manage interest rate risk. In managing the portfolio, the Company seeks to obtain the objectives of safety of principal, liquidity, diversification and maximized return on funds.  For an additional discussion with respect to these matters, see "Sources of Funds" included in Item 7 and "Asset Liability Management" included under Item 7A of the 2017 Form 10-K.

The following table sets forth the amortized cost and fair value of our securities portfolio as of the dates indicated:

	At March 31, 2018				At December 31, 2017
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Securities Available for Sale:
U.S. government sponsored agency	$	69,310	$	67,677	$	69,315	$	68,551
State and political subdivision		163,991		160,478		157,652		158,706
Residential mortgage-backed security		120,195		118,111		124,578		123,083
Residential collateralized mortgage obligation		18,294		18,164		9,715		9,686
Commercial mortgage backed security		110,244		105,941		110,483		108,162
SBA pools		554		539		560		545
Totals	$	482,588	$	470,910	$	472,303	$	468,733
Securities Held to Maturity:
SBA pools	$	7,824	$	7,312	$	7,854	$	7,369
Totals	$	7,824	$	7,312	$	7,854	$	7,369

U.S. government sponsored agency securities generally consist of fixed rate securities with maturities from two months to five years.  State and political subdivision investment securities consist of a local issue rated Aaa to Aa2 by Moody's Investment Services with maturities of four months to eighteen years.

The Company had a total of $18.2 million in residential collateralized mortgage obligations as of March 31, 2018.  The residential collateralized mortgage obligations were private label issued or issued by U.S. government sponsored agencies.  At the time of purchase, the ratings of these securities ranged from AAA to Aaa.  As of March 31, 2018, the ratings of these securities were Aaa to BBB by Standard & Poors and Aaa to Ba1 by Moody's Investor Service, which are considered Investment Grade (rating of BBB or higher).  At the time of purchase and on a monthly basis, the Company reviews these securities for impairment on an other than temporary basis.  The Company utilizes several external sources to evaluate prepayments, delinquencies, loss severity, and other factors in determining if there is impairment.  As of March 31, 2018, none of these securities were deemed to have other than temporary impairment.  The Company continues to closely monitor the performance and ratings of these securities.

- 25 -

As of March 31, 2018 and December 31, 2017, securities of no single issuer exceeded 10% of shareholders' equity, except for U.S. government sponsored agency securities.

The following table sets forth certain information regarding contractual maturities and the weighted average yields of our securities portfolio as of the date indicated:

	Due in One Year or Less					Due after One Year through Five Years					Due after Five Years through Ten Years					Due after Ten Years or no stated Maturity
	Balance		Weighted Average Yield			Balance		Weighted Average Yield			Balance		Weighted Average Yield			Balance		Weighted Average Yield
As of March 31, 2018	(Dollars in thousands)
Securities Available for Sale:
U.S. government sponsored agency	$	-		0.00	%	$	62,500		1.87	%	$	5,177		2.27	%	$	-		0.00	%
States and political subdivision (1)		200		1.20	%		1,508		1.91	%		1,310		2.54	%		157,460		2.56	%
Mortgage backed		4		1.22	%		39,118		1.88	%		65,132		2.32	%		137,962		2.40	%
SBA pools		-		0.00	%		-		0.00	%		-		0.00	%		539		2.12	%
Asset-backed security		-		0.00	%		-		0.00	%		-		0.00	%		-		0.00	%
Totals	$	204		1.20	%	$	103,126		1.87	%	$	71,619		2.32	%	$	295,961		2.49	%
Securities Held to Maturity:
SBA pools	$	-		0.00	%	$	-		0.00	%	$	-		0.00	%	$	7,824		3.89	%
Totals	$	-		0.00	%	$	-		0.00	%	$	-		0.00	%	$	7,824		3.89	%

(1) Yield is reflected adjusting for federal and state exemption of interest income and certain other permanent income tax differences.

Loan Portfolio.  As the Company addressed other pressing issues in prior years, levels of total loans decreased steadily from 2012 through 2017.  While loan demand remains weak in our markets, management is working to increase its portfolio of performing loans.  The total amounts in the residential real estate portfolio has steadily decreased primarily due to the Bank's refined lending strategy to generate applications for residential mortgage loans for non-affiliated mortgage companies on a fee basis versus underwriting to carry in the portfolio.

The following table sets forth the composition of the loan portfolio:

	March 31, 2018						December 31, 2017
	Amount			Percent			Amount			Percent
	(Dollars in thousands)
Commercial	$	67,557			9.57	%	$	61,388			8.76	%
Commercial real estate		384,247			54.41	%		378,802			54.04	%
Residential real estate		169,559			24.01	%		178,296			25.43	%
Construction real estate		68,002			9.63	%		63,569			9.07	%
Installment and other		16,794			2.38	%		18,952			2.70	%
Total loans		706,159			100.00	%		701,007			100.00	%
Unearned income		(813	)					(863	)
Gross loans		705,346						700,144
Allowance for loan losses		(11,238	)					(13,803	)
Net loans	$	694,108					$	686,341

Net loans increased $7.8 million from $686.3 million as of December 31, 2017 to $694.1 million as of March 31, 2018.  Gross loans increased $5.2 million while the allowance for loan losses decreased $2.6 million due to net charge-offs.  The largest increases were in gross commercial loans of $6.2 million, commercial real estate of $5.4 million, and construction real estate loans of $4.4 million, partially offset by decreases in gross residential real estate loans of $8.7 million and gross installment and other loans of $2.2 million.

Loan Maturities. The following table sets forth the maturity or repricing information for loans outstanding as of March 31, 2018:

	Due in One Year or Less				Due after one Year through Five Years				Due after Five Years				Total
	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate		Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
	(Dollars in thousands)
Commercial	$	1,523	$	32,978	$	22,814	$	480	$	9,762	$	-	$	34,099	$	33,458
Commercial real estate		12,477		99,492		97,768		69,884		103,372		1,254		213,617		170,630
Residential real estate		268		86,314		3,772		15,590		63,217		398		67,257		102,302
Construction real estate		10,519		31,905		5,235		5,707		14,636		-		30,390		37,612
Installment and other		760		9,131		2,792		-		4,111		-		7,663		9,131
Total loans	$	25,547	$	259,820	$	132,381	$	91,661	$	195,098	$	1,652	$	353,026	$	353,133

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Asset Quality. Over the past several years,the Bank experienced improvements in asset quality.

The following table sets forth the amounts of non-performing loans and non-performing assets as of the dates indicated:

	March 31,			December 31,
	2018			2017
	(Dollars in thousands)
Non-accruing loans	$	12,625		$	17,340
Loans 90 days or more past due, still accruing interest		-			-
Total non-performing loans		12,625			17,340
OREO		6,449			6,432
Total non-performing assets	$	19,074		$	23,772
TDRs, still accruing interest	$	32,934		$	33,801
Total non-performing loans to total loans		1.79	%		2.47	%
Allowance for loan losses to non- performing loans		89.01	%		79.60	%
Total non-performing assets to total assets		1.49	%		1.85	%

As of March 31, 2018, total non-performing assets decreased $4.7 million to $19.1 million from $23.8 million as of December 31, 2017 primarily due to a decrease in non-accruing loans of $4.7 million.  The decrease in non-accruing loans was primarily due to a decrease in commercial real estate non-accruing loans of $3.6 million, a decrease in residential real estate loans of $825 thousand, and a decrease in construction real estate loans of $266 thousand.

The following table presents data related to non-performing loans by dollar amount and category as of the dates indicated:

	Commercial					Commercial real estate					Residential real estate
Dollar Range	Number of Borrowers		Amount			Number of Borrowers		Amount			Number of Borrowers		Amount
	(Dollars in thousands)
March 31, 2018
$5.0 million or more		-	$	-			-	$	-			-	$	-
$3.0 million to $4.9 million		-		-			-		-			-		-
$1.5 million to $2.9 million		-		-			1		1,870			-		-
Under $1.5 million		2		58			9		3,186			44		3,774
Total		2	$	58			10	$	5,056			44	$	3,774
Percentage of individual loan category				0.09	%				1.32	%				2.23	%
December 31, 2017
$5.0 million or more		-	$	-			-	$	-			-	$	-
$3.0 million to $4.9 million		-		-			1		4,709			-		-
$1.5 million to $2.9 million		-		-			-		-			-		-
Under $1.5 million		3		102			10		3,908			52		4,599
Total		3	$	102			11	$	8,617			52	$	4,599
Percentage of individual loan category				0.17	%				2.27	%				2.58	%

Continued:

	Construction real estate					Installment & other loans					Total
Dollar Range	Number of Borrowers		Amount			Number of Borrowers		Amount			Number of Borrowers		Amount
March 31, 2018
$5.0 million or more		-	$	-			-	$	-			-	$	-
$3.0 million to $4.9 million		-		-			-		-			-		-
$1.5 million to $2.9 million		1		2,001			-		-			2		3,871
Under $1.5 million		8		1,644			2		92			65		8,754
Total		9	$	3,645			2	$	92			67	$	12,625
Percentage of individual loan category				5.36	%				0.55	%				1.79	%
December 31, 2017
$5.0 million or more		-	$	-			-	$	-			-	$	-
$3.0 million to $4.9 million		-		-			-		-			1		4,709
$1.5 million to $2.9 million		1		2,001			-		-			1		2,001
Under $1.5 million		11		1,910			4		111			80		10,630
Total		12	$	3,911			4	$	111			82	$	17,340
Percentage of individual loan category				6.15	%				0.59	%				2.47	%

Non-performing loans include (i) loans accounted for on a nonaccrual basis, and (ii) accruing loans contractually past due 90 days or more as to interest and principal.  Management reviews the loan portfolio for problem loans on a regular basis with additional resources dedicated to resolving the non-performing loans. Additional internal controls were implemented to ensure the timely identification of signs of weaknesses in credits, facilitating efforts to rehabilitate or exit the relationship in a timely manner. External loan reviews, which have been conducted on a regular basis, were also revised to provide a broad scope and reviewers now have access to all elements of a relationship.  In 2017, a significant portion of the loan portfolio was also examined by independent third party consultants.  

- 27 -

During the ordinary course of business, management may become aware of borrowers who may not be able to meet the contractual requirements of loan agreements.  Such loans are placed under close supervision with consideration given to placing the loan on nonaccrual status, increasing the allowance, and (if appropriate) partial or full charge-off.  After a loan is placed on nonaccrual status, any interest previously accrued, but not yet collected, is reversed against current income.  When payments are received on nonaccrual loans, such payments will be applied to principal and any interest portion included in the payments are not included in income, but rather are applied to the principal balance of the loan.  Loans will not be placed back on accrual status unless all unpaid interest and principal payments are received.  If interest on nonaccrual loans had been accrued, such income would have amounted to $188 thousand and $211 thousand for the three months ended March 31, 2018 and 2017, respectively.  Our policy is to place loans 90 days or more past due on nonaccrual status. 

Non-performing assets also consist of other repossessed assets and OREO.  OREO represents properties acquired through foreclosure or other proceedings and are initially recorded at the fair value less estimated costs of disposal.  OREO is evaluated regularly to ensure that the recorded amount is supported by its recorded value.  Valuation allowances to reduce the carrying amount to fair value less estimated costs of disposal are recorded as necessary.  Revenues and expenses from the operations of OREO and changes in the valuation are included in noninterest expenses on the consolidated statements of operations with the exception of costs expended to improve the long term value of the property.  These costs increase the recorded value of the OREO asset, not to exceed the fair value less estimated costs of disposal.

The following table presents an analysis of the allowance for loan losses for the periods indicated:

	Three Months Ended March 31,
	2018		2017
	(In thousands)
Balance at beginning of year	$	13,803		14,352
Provision for loan losses		220		30
Charge-offs:
Commercial		9		186
Commercial real estate		2,736		-
Residential real estate		105		244
Construction real estate		112		16
Installment and other		28		137
Total charge-offs		2,990		583
Recoveries :
Commercial		24		173
Commercial real estate		22		88
Residential real estate		47		55
Construction real estate		49		10
Installment and other		63		62
Total recoveries		205		388
Net charge-offs		2,785		195
Balance at end of period	$	11,238		14,187

Net charge-offs for the three months ended March 31, 2018 totaled $2.8 million, an increase of $2.6 million from the three months ended March 31, 2017 primarily due to increases in net charge-offs in commercial real estate loans of $2.8 million.  The change in net charge-offs in the commercial real estate loans was primarily due to one loan relationship.

The following table sets forth the allocation of the allowance for the periods presented and the percentage of allowance in each classification to total allowance:

	March 31, 2018					December 31, 2017
	Amount		Percent			Amount		Percent
	(Dollars in thousands)
Commercial	$	597		5.31	%	$	536		3.88	%
Commercial real estate		6,905		61.45	%		8,573		62.11	%
Residential real estate		2,462		21.91	%		2,843		20.60	%
Construction real estate		914		8.13	%		1,030		7.46	%
Installment and other		255		2.27	%		315		2.28	%
Unallocated		105		0.93	%		506		3.67	%
Total	$	11,238		100.00	%	$	13,803		100.00	%

The allowance for loan losses decreased $2.6 million from $13.8 million as of December 31, 2017 to $11.2 million as of March 31, 2018. This reduction was largely due to net charge-offs.  A $220 thousand provision for loan loss was required for the three months ended March 31, 2018.  A $1.2 million reversal provision for loan loss was required for the year ended December 31, 2017.  The decrease in allowance was primarily driven by the commercial real estate loan charge-offs.  The additional provision was primarily due to the $7.8 million dollar increase in the loan portfolio.

We consider a loan to be impaired when, based on current information and events, we determine that it is probable that we will not be able to collect all amounts due according to the original terms of the note, including interest payments.  When management identifies a loan as impaired, impairment is measured based on the present value of expected future cash flows and discounted at the loan's effective interest rates, except when the sole remaining source of repayment for the loan is the liquidation of the collateral.  In these cases management uses the current fair value of the collateral, less estimated selling costs when foreclosure is probable, rather than discounted cash flows.  If management determines that the value of the impaired loan is less than the recorded investment in the loan, an impairment is recognized through a charge-off to the allowance.

The allocation of the allowance for impaired credits is equal to the recorded investment in the loan using one of three methods to measure impairment: the fair value of the collateral less disposition costs, the present value of expected future cash flows method, or the observable market price of the loan.  An impairment reserve that exceeds collateral value is charged to the allowance for loan losses in the period it is identified.  Total loans which were deemed to have been impaired, including both performing and non-performing loans, as of March 31, 2018 and December 31, 2017 were $45.7 million and $51.1 million, respectively.  Impaired loans that are deemed collateral dependent have been charged down to the value of the collateral (based upon the most recent valuations), less estimated disposition costs.  Impaired loans with specifically identified allocations of allowance for loan losses had a total of $2.6 million and $5.2 million allocated in the allowance for loan losses as of March 31, 2018 and December 31, 2017, respectively.

TDRs are defined as those loans whose terms have been modified due to deterioration in the financial condition of the borrower in which the Company grants concessions to the borrower in the restructuring that it would not otherwise consider.  Total loans which were considered TDRs as of March 31, 2018 and December 31, 2017 were $39.8 million and $38.9 million, respectively.  Of these, $32.9 million and $33.8 million were still performing in accordance with modified terms as of March 31, 2018 and December 31, 2017, respectively.

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Although the Company believes the allowance is sufficient at March 31, 2018 to cover probable incurred losses inherent in the loan portfolio, there can be no assurance that the allowance will prove sufficient to cover actual loan losses.

Potential Problem Loans.We utilize an internal asset classification system as a means of reporting problem and potential problem assets.  At the scheduled meetings of the Board of Directors of the Bank, a watch list is presented, listing significant loan relationships as "Special Mention," "Substandard," "Doubtful" and "Loss."  "Substandard" assets include those characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.  Assets classified as "Doubtful" have all the weaknesses inherent in those classified as "Substandard" with the added characteristic that the weaknesses present make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions and values.  Assets classified as "Loss" are those considered uncollectible and viewed as valueless assets and have been charged-off.  Assets that do not currently expose us to sufficient risk to warrant classification in one of the aforementioned categories, but possess weaknesses that deserve management's close attention are deemed to be "Special Mention."

Our determination as to the classification of our assets and the amount of our valuation allowances is subject to review by the OCC, which can order the establishment of additional general or specific loss allowances.  There can be no assurance that regulators, in reviewing our loan portfolio, will not request us to materially adjust our allowance for loan losses.  The OCC, in conjunction with the other federal banking agencies, has adopted an interagency policy statement on the allowance for loan losses.  The policy statement provides guidance for financial institutions on both the responsibilities of management for the assessment and establishment of adequate allowances for loan losses and guidance for banking agency examiners to use in determining the adequacy of general valuation guidelines.  Generally, the policy statement recommends that: (i) institutions establish effective systems and controls to identify, monitor and address asset quality problems; (ii) management has analyzed all significant factors that affect the collectability of the portfolio in a reasonable manner; and (iii) management established acceptable allowance evaluation processes that meet the objectives set forth in the policy statement.  Management believes it has established an adequate allowance for probable loan losses.  We analyze our process regularly, with modifications made if needed, and report those results four times per year at meetings of our Audit Committee.

Although management believes that adequate specific and general allowance for loan losses have been established, actual losses are dependent upon future events and, as such, further additions to the level of specific and general allowance for loan losses may become necessary.

We define potential problem loans as performing loans rated Substandard that do not meet the definition of a non-performing loan.

The following table shows the amounts of performing but adversely classified assets and special mention loans as of the periods indicated:

	March 31,			December 31,
	2018			2017
	(In thousands)
Performing loans classified as:
Substandard		$	11,600		$	12,164
Total performing adversely classified loans		$	11,600		$	12,164
Special mention loans		$	5,630		$	5,681

The table above does not include nonaccrual loans that are less than 30 days past due.  Total performing adversely classified assets as of March 31, 2018 were $11.6 million, a decrease of $564 thousand from $12.2 million as of December 31, 2017.  The declines were primarily in the commercial real estate loan, residential real estate loan, and construction real estate loan categories.  In addition, special mention loans decreased $51 thousand.  For further discussion of loans, see Note 6 "Loans and Allowance for Loan Losses" in Part I, Item 1, "Financial Statements and Supplementary Data" of the 2017 Form 10-K.

Sources of Funds

General. Deposits, short-term and long-term borrowings, loan and investment security repayments and prepayments, proceeds from the sale of securities, and cash flows generated from operations are the primary sources of our funds for lending, investing and other general purposes.  Loan repayments are a relatively predictable source of funds except during periods of significant interest rate declines, while deposit flows tend to fluctuate with prevailing interests rates, money market conditions, general economic conditions and competition.

Deposits. We offer a variety of deposit accounts with a range of interest rates and terms.  Our core deposits consist of checking accounts, NOW accounts, money market deposit accounts, savings accounts and non-public certificates of deposit.  These deposits, along with public fund deposits and short-term and long-term borrowings are used to support our asset base.  Our deposits are obtained predominantly from our market areas.  We rely primarily on competitive rates along with customer service and long-standing relationships with customers to attract and retain deposits; however, market interest rates and rates offered by competing financial institutions significantly affect our ability to attract and retain deposits.

The following table sets forth the maturities of time deposits of $250 thousand or more for the period indicated:

	March 31, 2018 (In thousands)
Maturing within three months	$	4,561
After three but within six months		2,533
After six but within twelve months		5,599
After twelve but within three years		2,321
After three years		6,325
Total time deposits $250,000 and over	$	21,339

Borrowings. We have access to a variety of borrowing sources and use short-term and long-term borrowings to support our asset base.  Short-term borrowings were advances from the FHLB with remaining maturities under one year.  Long-term borrowings are advances from the FHLB with remaining maturities over one year.

The Company had $2.3 million outstanding in FHLB borrowings at March 31, 2018 and 2017.

Liquidity

Bank Liquidity. Liquidity management is monitored by the Asset/Liability Management Committee and Board of Directors of the Bank, which review historical funding requirements, current liquidity position, sources and stability of funding, marketability of assets, options for attracting additional funds, and anticipated future funding needs, including the level of unfunded commitments.

Our primary sources of funds are retail and commercial deposits, borrowings, public funds and funds generated from operations.  Funds from operations include principal and interest payments received on loans and securities.  While maturities and scheduled amortization of loans and securities provide an indication of the timing of the receipt of funds, changes in interest rates, economic conditions and competition strongly influence mortgage prepayment rates and deposit flows, reducing the predictability of the timing on sources of funds.

- 29 -

We adhere to a liquidity policy, which was updated and approved by the Board of Directors in December 2017, which requires that we maintain the following liquidity ratios: 

● The Liquidity Coverage Ratio is defined as the Anticipated Sources of Liquidity divided by the Anticipated Liquidity Needs 1.15 Times.

● Cumulative Liquidity Gap (% of cumulative net cash outflow over a six month period under a worst case scenario) of 100%.

● Fed Funds Purchased are limited to 60% of the total Available Lines, leaving 40% available for emergency needs and potential funding needs.

● FHLB Advances are limited to 75% of the Total Collateral Advance Capacity leaving 25% available for emergency liquidity needs and potential funding needs. 

● Total Borrowings are limited to no more than 25% of Total Funding (which is defined as equal to Total Assets).

● Wholesale (CDs) Funds is limited to no more than 25% of the Bank's Total Funding.

● Brokered funds are not to exceed 20% of total funding without the prior approval of the Board of Directors.

● The total aggregate balance of Wholesale Funds, Brokered Funds and Borrowings as defined above is limited to no more than 35% of Total Funding.

As of March 31, 2018 and December 31, 2017, we were in compliance with the foregoing policy.

As of March 31, 2018, we had outstanding loan origination commitments and unused commercial and retail lines of credit of $133.2 million and standby letters of credit of $5.3 million.  We anticipate we will have sufficient funds available to meet current origination and other lending commitments.  Certificates of deposit scheduled to mature within one year totaled $127.8 million as of March 31, 2018. As of March 31, 2018, total certificates of deposit declined $9.5 million or 5.50% from the prior year end.

In the event that additional short-term liquidity is needed, we have established a relationship with a large regional bank to provide short-term borrowings in the form of federal funds purchases.  We have the ability to borrow up to $20.0 million for a short period (15 to 60 days) from this bank. Management believes that we will be able to continue to borrow federal funds from our correspondent bank in the future. Additionally, we are a member of the FHLB and, as of March 31, 2018, we had the ability to borrow from the FHLB up to $402.4 million in additional funds.  As a contingency plan for significant funding needs, the Asset/Liability Management Committee may also consider the sale of investment securities, selling securities under agreement to repurchase, sale of certain loans and/or the temporary curtailment of lending activities.

Company Liquidity. Trinity's main sources of liquidity at the holding company level are dividends from the Bank.

The Bank is subject to various regulatory capital requirements administered by federal and state banking agencies,  which affect its ability to pay dividends to Trinity.  See "Business—Supervision and Regulation—Trinity—Dividends Payments" and "Business—Supervision and Regulation—The Bank—Dividend Payments" in Part I, Item 1 of the Company's 2017 Form 10-K.  Failure to meet minimum capital requirements can initiate certain mandatory and discretionary actions by regulators that, if undertaken, could have a direct material effect on our financial statements.  As of March 31, 2018, the Bank was in compliance with these requirements.

The Bank has an internal Capital Plan which identifies potential sources for additional capital should it be deemed necessary.  For more information, see "Capital Resources" included in Item 7 and Note 20 "Regulatory Matters" in Item 8, "Financial Statements and Supplementary Data" of the 2017 Form 10-K.

Contractual Obligations, Commitments, and Off-Balance-Sheet Arrangements

We have various financial obligations, including contractual obligations and commitments, which may require future cash payments

Contractual Obligations. There have been no material changes to contractual obligations as of March 31, 2018.  For information on the nature of each obligation, see Note 16 "Commitments and Off-Balance-Sheet Activities" in Item 8, "Financial Statements and Supplementary Data" of the 2017 Form 10-K.

Commitments.There have been no material changes to the commitments as of March 31, 2018.  Further discussion of these commitments is included in Note 15 "Commitments and Off-Balance-Sheet Activities" in Item 8, "Financial Statements and Supplementary Data" of the 2017 Form 10-K.

Capital Resources

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies.  Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices.  Capital amounts and classifications are also subject to qualitative judgments by regulators.  Failure to meet capital requirements can initiate regulatory action.  Under the prompt corrective action regulations, to be adequately capitalized a bank must maintain minimum ratios of total capital to risk-weighted assets of 8%, Tier 1 capital to risk-weighted assets of 6%, common equity Tier 1 capital to risk-weighted assets of 4.5%, and Tier 1 capital to total assets of 4%.  A "well–capitalized" institution must maintain minimum ratios of total capital to risk-weighted assets of at least 10%, Tier 1 capital to risk-weighted assets of at least 8%, common equity Tier 1 capital to risk-weighted assets of at least 6.5%, and Tier 1 capital to total assets of at least 5% and must not be subject to any written order, agreement or directive requiring it to meet or maintain a specific capital level.

The Basel III Rules also established a "capital conservation buffer" of 2.5% above the regulatory minimum risk-based capital requirements.  The capital conservation buffer requirement phased in beginning January 1, 2016 at 0.625% of risk-weighted assets and will increase by that amount ear year until fully implemented in January 2019.  An institution would be subject to limitations on certain activities including payment of dividends, share repurchases and discretionary bonuses to executive officers if its capital level is below the buffered ratio.

A certain amount of Trinity's Tier 1 Capital is in the form of trust preferred securities. See Note 10, "Junior Subordinated Debt" in Item 8, "Financial Statements and Supplementary Data" of the 2017 Form 10-K for details on the effect these have on risk based capital. See "Risk Factors" in Part I, Item 1A of the 2017 Form 10-K for further information regarding changes in the regulatory environment affecting capital.

- 30 -

The Bank's capital ratios as of March 31, 2018 fall into the category of "well-capitalized."  The required and actual amounts and ratios for Trinity and the Bank as of March 31, 2018 are presented below:

	Actual					For Capital Adequacy Purposes					To be well capitalized under prompt corrective action provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
March 31, 2018
Total capital (to risk-weighted assets):
Consolidated	$	144,143		16.8772	%	$	68,326		8.0000	%		N/A		N/A
Bank only		137,691		16.1420	%		68,240		8.0000	%	$	85,300		10.0000	%
Tier 1 capital (to risk weighted assets):
Consolidated		133,453		15.6256	%		51,244		6.0000	%		N/A		N/A
Bank only		127,014		14.8903	%		51,180		6.0000	%		68,240		8.0000	%
Common Equity Tier 1 Capital (to risk weighted assets):
Consolidated		107,453		12.5813	%		38,433		4.5000	%		N/A		N/A
Bank only		127,014		14.8903	%		38,385		4.5000	%		55,445		6.5000	%
Tier 1 leverage (to average assets):
Consolidated		133,453		10.4275	%		51,193		4.0000	%		N/A		N/A
Bank only		127,014		9.9331	%		51,148		4.0000	%		63,935		5.0000	%

N/A—not applicable

At March 31, 2018 the Bank's capital conservation buffer was 8.1420 % and the Company's consolidated capital conservation buffer was 8.0813 %.

- 31 -

Item 3. Quantitative and Qualitative Disclosures about Market Risk

This item has been omitted based on the Company's status as a smaller reporting company.

Item 4. Controls and Procedures

An evaluation was carried out under the supervision and with the participation of the Company's management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures, as that term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended ("Exchange Act")), as of the end of the reporting period covered by this report.

The Company maintains disclosure controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon this evaluation of those disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer of the Company concluded, as of the end of the period covered by this report, that the Company's disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports the Company files and submits under the Exchange Act is recorded, processed, summarized and reported as and when required.

In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Further, no evaluation of a cost-effective system of controls can provide absolute assurance that all control issues and instances of fraud, if any, will be detected.

There have been no changes in the Company's internal control over financial reporting as that term is defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act, during the three months ended March 31, 2018 that have materially affected or are reasonably likely to materially affect, the Company's internal control over financial reporting.

- 32 -

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

The Company and its subsidiaries are subject, to various legal actions as described in the 2017 Form 10-K.  There are no material developments in the legal actions described in the 2017 Form 10-K.

The Company may also become a party to legal proceedings in the ordinary course of business.  Except as described in the first paragraph of this Item, we are not presently involved in any litigation, nor to our knowledge is any litigation threatened against us, that in management's opinion would result in any material adverse effect on our financial position or results of operations or that is not expected to be covered by insurance.

Item 1A. Risk Factors

Not applicable.

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds

 During the first quarter of 2018, we made no repurchases or unregistered sales of any class of our equity securities.

Item 3.   Defaults Upon Senior Securities

 None

Item 4.   Mine Safety Disclosures

Not Applicable

Item 5.   Other Information

 None

- 33 -

Item 6.    Exhibits

3.1	Amended and Restated Articles of Incorporation of Trinity Capital Corporation (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed July 7, 2017 (File No. 000-50266))
3.2	Second Amended and Restated Bylaws of Trinity Capital Corporation (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed January 30, 2018 (File No. 000-50266))
10.1	Change in Control Agreement, dated April 20, 2018, by and between Trinity Capital Corporation and Los Alamos National Bank and Yin Y. Ho (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed April 26, 2018 (File No. 000-50266))
10.2	Change in Control Agreement, dated April 20, 2018, by and between Trinity Capital Corporation and Los Alamos National Bank and John S. Gulas (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed April 26, 2018 (File No. 000-50266))
10.3	Change in Control Agreement, dated April 20, 2018, by and between Trinity Capital Corporation and Los Alamos National Bank and Thomas G. Dolan (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed April 26, 2018 (File No. 000-50266))
10.4	Form of 2018 Restricted Stock Unit Award Agreement under Trinity Capital Corporation 2015 Long-Term Incentive Plan (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed April 26, 2018 (File No. 000-50266))
31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a)
31.2	Certification on Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a)
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of March 31, 2018 and December 31, 2017; (ii) Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017; (iii) Consolidated Statements of Changes in Shareholders' Equity for the three months ended March 31, 2018 and 2017; (iv) Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and 2017; and (v) Notes to Consolidated Financial Statements, tagged as blocks of text

- 34 -

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

	TRINITY CAPITAL CORPORATION
Date: May 11, 2018
	By:	/s/ John S. Gulas
		John S. Gulas Chief Executive Officer and President
	By:	/s/ Thomas G. Dolan
		Thomas G. Dolan
		Chief Financial Officer

- 35 -

EX-31.1

Exhibit 31.1

I, John S. Gulas, Chief Executive Officer and President, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Trinity Capital Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter  (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	May 11, 2018	/s/ John S. Gulas
		John S. Gulas
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Thomas Dolan, Chief Financial Officer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Trinity Capital Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter  (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	May 11, 2018	/s/ Thomas Dolan
		Thomas Dolan
		Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Trinity Capital Corporation, a New Mexico corporation ("Trinity"), for the quarter ended March 31, 2018 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), John S. Gulas, as Chief Executive Officer and President of Trinity, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Trinity.

/s/ John S. Gulas

John S. Gulas

President and Chief Executive Officer

May 11, 2018

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Trinity Capital Corporation, a New Mexico corporation ("Trinity"), for the quarter ended March 31, 2018 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Thomas Dolan, as Chief Financial Officer of Trinity, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Trinity.

/s/ Thomas Dolan

Thomas Dolan

Chief Financial Officer

May 11, 2018

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	Apr. 30, 2018
Entity Registrant Name	TRINITY CAPITAL CORP
Entity Central Index Key	0000099771
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2018
Voting Common Stock [Member]
Entity Common Stock, Shares Outstanding		11,651,173
Nonvoting [Member]
Entity Common Stock, Shares Outstanding		8,044,292

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
ASSETS
Cash and due from banks	$ 10,003	$ 12,893
Interest-bearing deposits with banks	9,517	22,541
Cash and cash equivalents	19,520	35,434
Investment securities available for sale, at fair value	470,910	468,733
Investment securities held to maturity, at amortized cost (fair value of $7,312 and $7,369 as of March 31, 2018 and December 31, 2017, respectively)	7,824	7,854
Non-marketable equity securities	4,471	3,617
Loans (net of allowance for loan losses of $11,238 and $13,803 as of March 31, 2018 and December 31, 2017, respectively)	694,108	686,341
Mortgage servicing rights ("MSRs"), net	0	0
Bank owned life insurance ("BOLI")	25,874	25,656
Premises and equipment, net	28,336	28,542
Other real estate owned ("OREO"), net	6,449	6,432
Deferred tax assets	12,008	10,143
Other assets	13,567	14,781
Total assets	1,283,067	1,287,533
Deposits:
Noninterest-bearing	163,134	161,677
Interest-bearing	980,960	965,670
Total deposits	1,144,094	1,127,347
Long-term borrowings	2,300	2,300
Junior subordinated debt	26,764	36,941
Other liabilities	8,414	15,399
Total liabilities	1,181,572	1,181,987
Stock owned by Employee Stock Ownership Plan ("ESOP") participants; 831,645 shares and 831,645 shares as of March 31, 2018 and December 31, 2017, respectively, at fair value	5,961	5,961
Commitments and contingencies (Note 13)
Shareholders' equity
Additional paid-in capital	35,332	35,071
Retained earnings	56,279	54,587
Accumulated other comprehensive loss	(9,791)	(3,763)
Common stock related to ESOP	(5,961)	(5,961)
Total shareholders' equity	95,534	99,585
Total liabilities and shareholders' equity	1,283,067	1,287,533
Voting Common Stock [Member]
Shareholders' equity
Common stock	11,631	11,365
Nonvoting Common Stock [Member]
Shareholders' equity
Common stock	$ 8,044	$ 8,286

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
ASSETS
Investment securities held to maturity, at amortized cost	$ 7,312	$ 7,369
Net of allowance for loan losses	$ 11,238	$ 13,803
LIABILITIES AND SHAREHOLDERS' EQUITY
Participants, stock ownership (in shares)	831,645	831,645
Voting Common Stock [Member]
Stockholders' equity
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, authorized (in shares)	20,000,000	20,000,000
Common stock, issued (in shares)	11,631,064	11,364,862
Common stock, outstanding (in shares)	11,631,064	11,364,862
Nonvoting Common Stock [Member]
Stockholders' equity
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, authorized (in shares)	20,000,000	20,000,000
Common stock, issued (in shares)	8,044,292	8,286,200
Common stock, outstanding (in shares)	8,044,292	8,286,200

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Interest income:
Loans, including fees	$ 8,079	$ 9,307
Interest and dividends on investment securities:
Taxable	1,582	1,672
Nontaxable	1,038	246
Other interest income	113	161
Total interest income	10,812	11,386
Interest expense:
Deposits	412	459
Borrowings	53	36
Junior subordinated debt	787	720
Total interest expense	1,252	1,215
Net interest income	9,560	10,171
Provision for loan losses	220	30
Net interest income after provision for loan losses	9,340	10,141
Noninterest income:
Mortgage loan servicing fees	(2)	486
Trust and investment services fees	797	651
Service charges on deposits	254	295
Net gain on sale of OREO	41	328
BOLI income	218	91
Mortgage referral fee income	245	327
Interchange fees	496	630
Other fees	303	288
Other noninterest income	6	(21)
Total noninterest income	2,358	3,075
Noninterest expenses:
Salaries and employee benefits	5,551	6,037
Occupancy	590	491
Data processing	1,029	1,374
Legal, professional, and accounting fees	525	2,212
Change in value of MSRs	0	238
Other noninterest expense	2,118	3,564
Total noninterest expenses	9,813	13,916
Income (loss) before provision (benefit) for income taxes	1,885	(700)
Provision (benefit) for income taxes	193	(214)
Net income (loss)	1,692	(486)
Dividends and discount accretion on preferred shares	0	770
Net income (loss) available to common shareholders	$ 1,692	$ (1,256)
Basic earnings (loss) per common share (in dollars per share)	$ 0.09	$ (0.10)
Diluted earnings (loss) per common share (in dollars per share)	$ 0.09	$ (0.10)

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) [Abstract]
Net income (loss)	$ 1,692	$ (486)
Other comprehensive income (loss):
Unrealized (losses) gains on securities available for sale	(8,108)	630
Securities losses (gains) reclassified into earnings	0	0
Related income tax benefit (expense)	2,080	(249)
Other comprehensive (loss) income	(6,028)	381
Total comprehensive loss	$ (4,336)	$ (105)

XML

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Common Stock Issued [Member] Voting [Member]	Common Stock Issued [Member] Nonvoting [Member]	Common Stock Held in Treasury at Cost [Member]	Preferred Stock [Member]	Preferred Stock [Member] Series A Preferred Stock [Member]	Preferred Stock [Member] Series B Preferred Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Common Stock Related To ESOP [Member]	Total	Series A Preferred Stock [Member]	Series B Preferred Stock [Member]
Balance at Dec. 31, 2016	$ 9,509	$ 0	$ 0	$ 74,007			$ (1,373)	$ 60,651	$ (5,495)	$ (3,192)	$ 134,107
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income								(486)			(486)
Other comprehensive income (loss)									381		381
Redemption of preferred shares					$ (35,539)	$ (1,777)						$ (35,539)	$ (1,777)
Dividends declared on preferred shares								(372)			(372)
Series C preferred shares converted to non-voting common stock		8,286		(37,089)			28,803				0
Common stock issued for board compensation	34						124				158
Amortization of preferred stock issuance costs				398				(398)			0
RSUs compensation expenses							15				15
Balance at Mar. 31, 2017	9,543	8,286	0	0			27,569	59,395	(5,114)	(3,192)	96,487
Balance at Dec. 31, 2017	11,365	8,286	0	0			35,071	54,587	(3,763)	(5,961)	99,585
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income								1,692			1,692
Other comprehensive income (loss)									(6,028)		(6,028)
Rights offering costs							(2)				(2)
Common stock issued for board compensation	10						60				70
RSUs compensation expenses							217				217
Common stock issued for vested RSUs	14						(14)				0
Conversion from non-voting to voting common stock	242	(242)									0
Balance at Mar. 31, 2018	$ 11,631	$ 8,044	$ 0	$ 0			$ 35,332	$ 56,279	$ (9,791)	$ (5,961)	$ 95,534

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash Flows From Operating Activities
Net income (loss)	$ 1,692	$ (486)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,062	1,904
Provision for loan losses	220	30
Gains and write-downs on OREO, net	(21)	(321)
Loss on disposal of premises and equipment	2	0
Decrease in deferred income tax assets	215	(739)
Change in escrow liabilities	(5,209)	2,158
Change in value of MSRs	0	238
BOLI income	(218)	(91)
Compensation expense recognized for restricted stock units	217	16
Decrease in accrued interest payable on sub debt	0	(9,676)
Changes in operating assets and liabilities:
Other Assets	1,185	482
Other Liabilities	(1,775)	(872)
Net cash provided by operating activities before origination and gross sales of loans held for sale	(1,630)	(7,357)
Net cash used in operating activities	(1,630)	(7,357)
Cash Flows From Investing Activities
Proceeds from maturities and paydowns of investment securities, available for sale	9,905	14,264
Purchase of investment securities, available for sale	(21,824)	(26,823)
Proceeds from maturities and paydowns of investment securities, held to maturity	26	822
Proceeds from sale of other real estate owned	509	1,117
Purchase of investment securities, other	(857)	0
Loans paid down (funded), net	(8,424)	6,615
Purchases of premises and equipment	(122)	(390)
Net cash provided by (used in) investing activities	(20,787)	(4,395)
Cash Flows From Financing Activities
Net increase in demand deposits, NOW accounts and savings accounts	26,268	9,614
Net decrease in time deposits	(9,523)	(20,377)
Partial repayment of subordinated debt	(10,310)	0
Redemption of preferred stock	0	(37,316)
Issuance of common stock for stock option plan	68	158
Decrease in dividends payable on preferred stock	0	(12,965)
Net cash provided by (used in) financing activities	6,503	(60,886)
Net decrease in cash and cash equivalents	(15,914)	(72,638)
Cash and cash equivalents:
Beginning of period	35,434	119,335
End of period	19,520	46,697
Cash payments for:
Interest	1,601	10,928
Non-cash investing and financing activities:
Transfers from loans to other real estate owned	473	433
Transfer from venture capital to loans	0	150
Conversion of Series C preferred stock to non-voting common stock	0	37,089
Dividends declared on preferred stock	0	373
Conversion of non-voting common stock to voting common stock	$ 242	$ 0

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2018

Basis of Presentation [Abstract]

Basis of Presentation

Note 1. Basis of Presentation

Consolidation:  The accompanying unaudited consolidated financial statements include the consolidated balances and results of operations of Trinity Capital Corporation (“Trinity”) and its wholly owned subsidiaries: Los Alamos National Bank (the “Bank”) and TCC Advisors Corporation (“TCC Advisors”), collectively referred to as the “Company.” Trinity Capital Trust I (“Trust I”), Trinity Capital Trust III (“Trust III”), Trinity Capital Trust IV (“Trust IV”) and Trinity Capital Trust V (“Trust V”), collectively referred to as the “Trusts,” are trust subsidiaries of Trinity. Trinity owns all of the outstanding common securities of the Trusts. The Trusts are considered variable interest entities (“VIEs”) under Accounting Standards Codification ("ASC") Topic 810, "Consolidation."  Because Trinity is not the primary beneficiary of the Trusts, the financial statements of the Trusts are not included in the consolidated financial statements of the Company.  TCC Advisors Corporation and Trust I were dissolved in March 2018. 

Basis of presentation: The accompanying unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. Significant intercompany items and transactions have been eliminated in consolidation.  The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”) and general practices within the financial services industry.  In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the year then ended.  Actual results could differ from those estimates.

The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for financial information and with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the statements reflect all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows of the Company on a consolidated basis, and all such adjustments are of a normal recurring nature. These financial statements and the notes thereto should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (the "2017 Form 10-K"). Operating results for the three-month period ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018 or any other period.

Reclassifications: Some items in the prior year financial statements were reclassified to conform to the current presentation.  Reclassifications had no effect on prior year net income or shareholders' equity.

XML

Earnings (Loss) Per Share Data

3 Months Ended

Mar. 31, 2018

Earnings (Loss) Per Share Data [Abstract]

Earnings (Loss) Per Share Data

Note 2. Earnings (Loss) Per Share Data

The average number of shares used in calculating basic and diluted earnings (loss) per common share were as follows for the three months ended March 31, 2018 and 2017:

	Three Months Ended March 31,
	2018		2017
	(In thousands, except share and per share data)
Net income (loss)	$	1,692	$	(486	)
Dividends and discount accretion on preferred shares		-		770
Net income (loss) available to common shareholders	$	1,692	$	(1,256	)
Weighted average common shares issued		19,665,543		13,017,045
LESS: Weighted average treasury stock shares		-		-
Weighted average common shares outstanding, net		19,665,543		13,017,045
Basic income (loss) per common share	$	0.09	$	(0.10	)
Dilutive effect of stock-based compensation		45,133		-
Weighted average common shares outstanding including dilutive shares		19,710,676		13,017,045
Diluted income (loss) per common share	$	0.09	$	(0.10	)

Certain restricted stock units were not included in the above calculation, as they would have had an anti-dilutive effect.  There were no shares excluded for the three months ended March 31, 2018.  The total number of shares excluded was approximately 33,000 shares for three months ended March 31, 2017.

XML

Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2018

Recent Accounting Pronouncements [Abstract]

Recent Accounting Pronouncements

Note 3. Recent Accounting Pronouncements

Newly effective standards:  In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This update 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. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606) – Deferral of the Effective Date.  This update deferred the effective date of ASU 2014-09 by one year,  making it effective for annual reporting periods beginning after December 15, 2017 including interim reporting periods within that reporting period. The Company's revenue is comprised of net interest income on financial assets and liabilities, which is explicitly excluded from the scope of this guidance, and non-interest income.  The Company has reviewed non-interest income, such as deposit fees, assets management and investment advisory fees, OREO gains and losses on sale, and credit card interchange fees.  The Company completed its overall assessment of revenue streams and related contracts affected by the guidance and adopted ASC 606 on January 1, 2018 with no impact on total shareholders' equity or net income.

Revenue Recognition

The Company recognizes revenue as it is earned and determined no change to its revenue recognition policies as a result of the adoption of ASC 606.  The following is a discussion of revenues within the scope of the new revenue guidance:

· Service charges on deposit accounts - Revenue from service charges on deposit accounts is earned through deposit-related services; as well as overdraft, non-sufficient funds, account management and other deposit related fees.  Revenue is recognized either over time, corresponding with deposit accounts' monthly cycle, or at a point in time for transactional related services and fees.

· Debit and credit card interchange fee income - Card processing fees consist of interchange fees from consumer debit and credit card networks and other card related services.  Interchange fees are based on purchase transactions and other factors and are recognized as transactions occur.

· Wealth management and investment brokerage fees - The Company earns wealth management and investment brokerage fees from its contracts with trust and brokerage customers for management of assets, and/or transactions on their accounts.  These fees are primarily earned over time as the Company provides the contracted monthly or quarterly services and are generally assessed based on a tiered scale of the market value of the assets under management.  Fees that are transactional based are recognized at the point in time that the transaction is executed.  Other related services provided and the fees the Company earns are based on a fixed schedule and are recognized when the services are rendered.

· Gains/Losses on sales of OREO - The Company records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time the deed is executed.  When the Company finances the sale of OREO to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable.  Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer.  In determining the gain or loss on the sale, the Company may adjust the transaction price and related gain (loss) on sale if a significant financing component is present.

· Mortgage referral fees - The Company earns and records fee income from mortgage referrals to unaffiliated third parties.  This fee income is earned and recognized once the referred loan is closed.  

In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825).  The amendments in this update require that public entities measure equity investments with readily determinable fair values, at fair value, with changes in their fair value recorded through net income.  This ASU clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available for sale securities in combination with the entity's other deferred tax assets. This ASU also prescribes an exit price be used to determine the fair value of financial instruments not measured at fair value for disclosure in the fair value note.  The amendments within the update are effective for fiscal years and all interim periods beginning after December 15, 2017.  The Company has determined that the evaluation of deferred tax asset ("DTA") valuation allowance and the exit price for financial instruments are within scope for the Company.  The Company adopted this standard on January 1, 2018 and used a third-party to provide the exit pricing for Note 16, Fair Value Measurements, as required under ASU 2016-01.  The adoption of ASU 2016-01 did not have an impact on the Company's financial statements.

In May 2017, the FASB issues ASU 2017-09, Compensation - Stock Compensation (Topic 718).  ASU 2017-09 was effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  This ASU provides clarity on the guidance related to stock compensation when there have been changes to the terms or conditions of a share-based payment award to which an entity would be required to apply modification accounting under ASC 718.  The ASU provides the three following criteria must be met in order to not account for the effect of the modification of terms or conditions: the fair value, the vesting conditions and the classification as an equity or liability instrument of the modified award is the same as the original award immediately before the original award is modified. The Company adopted ASU 2017-09 on January 1, 2018.  The adoption of ASU 2017-09 did not have a material impact on the Company's Consolidated Financial Statements.

Newly Issued But Not Effective Accounting Standards: In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those periods using a modified retrospective approach and early adoption is permitted. This ASU requires a lessee to record a right-to-use asset and liability representing the obligation to make lease payments for long-term leases.  It is expected that assets and liabilities will increase based on the present value of remaining lease payments for leases in place at the adoption date; however, this is not expected to be material to the Company's results of operations or financial position.  The Company continues to evaluate the extent of potential impact the new guidance will have on the Company's consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.  This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.  The Company has created an internal committee focused on the implementation of ASU 2016-13 and is currently in the process of evaluating data needs and the effects of ASU 2016-13 on its financial statements and disclosures.  The Company is also working with a third party ALLL software provider to help with implementation.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.  This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.  The Company has created an internal committee focused on the implementation of ASU 2016-13 and is currently in the process of evaluating data needs and the effects of ASU 2016-13 on its financial statements and disclosures.  The Company is also working with a third party ALLL software provider to help with implementation.

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Restrictions on Cash and Due From Banks

3 Months Ended

Mar. 31, 2018

Restrictions on Cash and Due From Banks [Abstract]

Restrictions on Cash and Due From Banks

Note 4. Restrictions on Cash and Due From Banks

The Bank is required to maintain reserve balances in cash or on deposit with the Board of Governors of the Federal Reserve System ("FRB") based on the level of certain of its deposits.  This reserve requirement may be met by funds on deposit with the FRB and cash on hand.  As of March 31, 2018 and December 31, 2017, the reserve requirement was $0.

The Company maintains some of its cash in bank deposit accounts at financial institutions other than its subsidiaries that, at times, may exceed federally insured limits.  The Company may lose all uninsured balances if one of the correspondent banks fails without warning.  The Company has not experienced any losses in such accounts.  The Company believes it is not exposed to any significant credit risk on cash and cash equivalents.

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Investment Securities

3 Months Ended

Mar. 31, 2018

Investment Securities [Abstract]

Investment Securities

Note 5. Investment Securities

Amortized cost and fair values of investment securities are summarized as follows:

Securities Available for Sale:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)
March 31, 2018
U.S. government sponsored agencies	$	69,310	$	-	$	(1,633	)	$	67,677
State and political subdivisions		163,991		177		(3,690	)		160,478
Residential mortgage backed securities		120,195		2		(2,086	)		118,111
Residential collateralized mortgage obligations		18,294		50		(180	)		18,164
Commercial mortgage backed securities		110,244		-		(4,303	)		105,941
SBA pools		554		-		(15	)		539
Totals	$	482,588	$	229	$	(11,907	)	$	470,910
December 31, 2017
U.S. government sponsored agencies	$	69,315	$	-	$	(764	)	$	68,551
State and political subdivisions		157,652		1,306		(252	)		158,706
Residential mortgage backed securities		124,578		98		(1,593	)		123,083
Residential collateralized mortgage obligations		9,715		51		(80	)		9,686
Commercial mortgage backed securities		110,483		67		(2,388	)		108,162
SBA pools		560		-		(15	)		545
Totals	$	472,303	$	1,522	$	(5,092	)	$	468,733

Securities Held to Maturity	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)
March 31, 2018
SBA pools	$	7,824	$	-	$	(512	)	$	7,312
Totals	$	7,824	$	-	$	(512	)	$	7,312
December 31, 2017
SBA pools	$	7,854	$	-	$	(485	)	$	7,369
Totals	$	7,854	$	-	$	(485	)	$	7,369

 As of March 31, 2018 and 2017, there were no realized net gains or losses on sale and call of securities available for sale.  There was no tax benefit or provision related to these net realized gains and losses for the three months ended March 31, 2018 and 2017. 

A summary of unrealized loss information for investment securities, categorized by security type, as of March 31, 2018 and December 31, 2017 was as follows:

	Less than 12 Months					12 Months or Longer					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Securities Available for Sale:
March 31, 2018
U.S. government sponsored agencies	$	48,412	$	(979	)	$	19,265	$	(654	)	$	67,677	$	(1,633	)
State and political subdivisions		115,741		(2,913	)		24,041		(777	)		139,782		(3,690	)
Residential mortgage backed securities		37,193		(512	)		82,865		(1,574	)		120,058		(2,086	)
Residential collateralized mortgage obligations		12,521		(156	)		4,271		(24	)		16,792		(180	)
Commercial mortgage backed securities		24,331		(536	)		79,377		(3,767	)		103,708		(4,303	)
SBA pools		-		-			539		(15	)		539		(15	)
Totals	$	238,198	$	(5,096	)	$	210,358	$	(6,811	)	$	448,556	$	(11,907	)
December 31, 2017
U.S. government sponsored agencies	$	49,070	$	(331	)	$	19,481	$	(433	)	$	68,551	$	(764	)
State and political subdivisions		23,217		(95	)		24,774		(157	)		47,991		(252	)
Residential mortgage backed securities		18,771		(199	)		88,100		(1,394	)		106,871		(1,593	)
Residential collateralized mortgage obligations		4,761		(67	)		3,502		(13	)		8,263		(80	)
Commercial mortgage backed securities		6,961		(94	)		81,042		(2,294	)		88,003		(2,388	)
SBA pools		-		-			545		(15	)		545		(15	)
Totals	$	102,780	$	(786	)	$	217,444	$	(4,306	)	$	320,224	$	(5,092	)
Securities Held to Maturity:
March 31, 2018
SBA pools	$	-	$	-		$	7,312	$	(512	)	$	7,312	$	(512	)
Totals	$	-	$	-		$	7,312	$	(512	)	$	7,312	$	(512	)
December 31, 2017
SBA pools	$	-	$	-		$	7,369	$	(485	)	$	7,369	$	(485	)
Totals	$	-	$	-		$	7,369	$	(485	)	$	7,369	$	(485	)

As of March 31, 2018, the Company's security portfolio consisted of 156 securities, 133 of which were in an unrealized loss position. As of March 31, 2018, $468.3 million in investment securities had unrealized losses with aggregate depreciation of 2.58% of the Company’s amortized cost basis.  Of these securities, $225.0 million in amortized cost had a continuous unrealized loss position for twelve months or longer with an aggregate depreciation of 3.15%.  The unrealized losses relate principally to the general change in interest rates and illiquidity, and not credit quality, that has occurred since the securities' purchase dates, and such unrecognized losses or gains will continue to vary with general interest rate level fluctuations in the future.  As management does not intend to sell the securities, and it is likely that it will not be required to sell the securities before their anticipated recovery, no declines are deemed to be other than temporary.

At  March 31, 2018 and 2017, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of shareholders' equity.

The amortized cost and fair value of investment securities, as of March 31, 2018, by contractual maturity are shown below.  Maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.

	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
One year or less	$	201	$	200	$	-	$	-
One to five years		65,540		64,008		-		-
Five to ten years		6,578		6,487		-		-
Over ten years		161,536		157,999		7,824		7,312
Subtotal		233,855		228,694		7,824		7,312
Residential mortgage backed security		120,195		118,111		-		-
Residential collateralized mortgage obligation		18,294		18,164		-		-
Commercial mortgage backed security		110,244		105,941
Total	$	482,588	$	470,910	$	7,824	$	7,312

Securities with carrying amounts of $83.8 million and $87.4 million as of March 31, 2018 and December 31, 2017, respectively, were pledged as collateral on public deposits and for other purposes as required or permitted by law.

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Loans and Allowance for Loan Losses

3 Months Ended

Mar. 31, 2018

Loans and Allowance for Loan Losses [Abstract]

Loans and Allowance for Loan Losses

Note 6. Loans and Allowance for Loan Losses

As of March 31, 2018 and December 31, 2017, loans consisted of:

	March 31, 2018			December 31, 2017
	(In thousands)
Commercial	$	67,557		$	61,388
Commercial real estate		384,247			378,802
Residential real estate		169,559			178,296
Construction real estate		68,002			63,569
Installment and other		16,794			18,952
Total loans		706,159			701,007
Unearned income		(813	)		(863	)
Gross loans		705,346			700,144
Allowance for loan losses		(11,238	)		(13,803	)
Net loans	$	694,108		$	686,341

Loan Origination/Risk Management. The Company has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk.  Management and the Board of Directors review and approve these policies and procedures on an annual basis.  A reporting system supplements the review process by providing management with reports related to loan production, loan quality, concentrations of credit, loan delinquencies and non-performing and potential problem loans.  Management has identified the following categories in its loan portfolios:

Commercial loans: These loans are underwritten after evaluating and understanding the borrower’s ability to operate profitably and prudently expand its business.  Underwriting standards are designed to promote relationship banking rather than transactional banking.  Management examines current and projected cash flows to determine the ability of the borrower to repay their obligations as agreed.  Commercial loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower.  The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value.  Most commercial and industrial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis.  In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

Commercial real estate loans: These loans are subject to underwriting standards and processes similar to commercial loans, in addition to those of other real estate loans.  These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate.  Commercial real estate lending typically involves higher original amounts than other types of loans and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan.  Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy.  The properties securing the Company’s commercial real estate portfolio are geographically concentrated in the markets in which the Company operates.  Management monitors and evaluates commercial real estate loans based on collateral, location and risk grade criteria.  The Company also utilizes third-party sources to provide insight and guidance about economic conditions and trends affecting market areas it serves.  In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied loans.  As of March 31, 2018, 25.2% of the outstanding principal balances of the Company’s commercial real estate loans were secured by owner-occupied properties.

With respect to loans to developers and builders that are secured by non-owner occupied properties that the Company may originate from time to time, the Company generally requires the borrower to have had an existing relationship with the Company and have a proven record of success.

Residential real estate loans: Underwriting standards for residential real estate and home equity loans are heavily influenced by statutory requirements, which include, but are not limited to, maximum loan-to-value levels, debt-to-income levels, collection remedies, the number of such loans a borrower can have at one time and documentation requirements.

Construction real estate loans: These loans are underwritten utilizing feasibility studies, independent appraisal reviews, sensitivity analysis of absorption and lease rates and financial analysis of the developers and property owners.  Construction real estate loans are generally based upon estimates of costs and values associated with the completed project and often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project.  Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property or an interim loan commitment from the Company until permanent financing is obtained.  These loans are monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions and the availability of long-term financing.

Installment loans: The Company originates consumer loans utilizing a credit scoring analysis to supplement the underwriting process.  To monitor and manage consumer loan risk, policies and procedures are developed and modified, as needed.  This activity, coupled with relatively small loan amounts that are spread across many individual borrowers, minimizes risk.  Additionally, trend and outlook reports are reviewed by management on a regular basis.

The loan review process complements and reinforces the risk identification and assessment decisions made by lenders and credit personnel, as well as the Company’s policies and procedures, which include periodic internal reviews and reports to identify and address risk factors developing within the loan portfolio. The Company engages external independent loan reviews that assess and validate the credit risk program on a periodic basis.  Results of these reviews are presented to and reviewed by management and the Board of Directors.

The following table presents the contractual aging of the recorded investment in current and past due loans by class of loans as of March 31, 2018 and December 31, 2017, including nonaccrual loans:

	Current		30-59 Days Past Due		60-89 Days Past Due		Loans past due 90 days or more		Total Past Due		Total
March 31, 2018	(In thousands)
Commercial	$	67,214	$	318	$	25	$	-	$	343	$	67,557
Commercial real estate		380,993		1,292		-		1,962		3,254		384,247
Residential real estate		166,462		1,314		387		1,396		3,097		169,559
Construction real estate		64,114		338		-		3,550		3,888		68,002
Installment and other		16,673		29		-		92		121		16,794
Total loans	$	695,456	$	3,291	$	412	$	7,000	$	10,703	$	706,159
Nonaccrual loan classification, included above	$	4,729	$	484	$	412	$	7,000	$	7,896	$	12,625
December 31, 2017
Commercial	$	59,703	$	173	$	1,475	$	37	$	1,685	$	61,388
Commercial real estate		371,640		5,490		-		1,672		7,162		378,802
Residential real estate		174,388		1,899		-		2,009		3,908		178,296
Construction real estate		59,291		423		74		3,781		4,278		63,569
Installment and other		18,705		80		81		86		247		18,952
Total loans	$	683,727	$	8,065	$	1,630	$	7,585	$	17,280	$	701,007
Nonaccrual loan classification, included above	$	3,858	$	5,859	$	38	$	7,585	$	13,482	$	17,340

The following table presents the recorded investment in nonaccrual loans and loans past due 90 days or more and still accruing interest by class of loans as of March 31, 2018 and December 31, 2017:

	March 31, 2018				December 31, 2017
	Nonaccrual		Loans past due 90 days or more and still accruing interest		Nonaccrual		Loans past due 90 days or more and still accruing interest
	(In thousands)
Commercial	$	58	$	-	$	102	$	-
Commercial real estate		5,056		-		8,617		-
Residential real estate		3,774		-		4,599		-
Construction real estate		3,645		-		3,911		-
Installment and other		92		-		111		-
Total	$	12,625	$	-	$	17,340	$	-

The Company utilizes an internal asset classification system as a means of reporting problem and potential problem loans.  Under the Company’s risk rating system, problem and potential problem loans are classified as “Special Mention,” “Substandard,” and “Doubtful.”  “Substandard” loans include those characterized by the likelihood that the Company will sustain some loss if the deficiencies are not corrected.  Loans classified as "Doubtful" have all the weaknesses inherent in those classified as "Substandard" with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.  Loans that do not currently expose the Company to sufficient risk to warrant classification in one of the aforementioned categories, but possess weaknesses that deserve management’s close attention are deemed to be "Special Mention."  Any time a situation warrants, the risk rating may be reviewed.

Loans not meeting the criteria above that are analyzed individually are considered to be pass-rated loans.  The following table presents the risk category by class of loans based on the most recent analysis performed as of March 31, 2018 and December 31, 2017:

	Pass		Special Mention		Substandard		Doubtful		Total
March 31, 2018	(In thousands)
Commercial	$	64,757	$	225	$	2,575	$	-	$	67,557
Commercial real estate		369,163		4,507		10,577		-		384,247
Residential real estate		164,280		-		5,279		-		169,559
Construction real estate		61,717		898		5,387		-		68,002
Installment and other		16,386		-		408		-		16,794
Total	$	676,303	$	5,630	$	24,226	$	-	$	706,159
December 31, 2017
Commercial	$	58,769	$	2	$	2,617	$	-	$	61,388
Commercial real estate		359,768		4,762		14,272		-		378,802
Residential real estate		172,101		-		6,195		-		178,296
Construction real estate		56,661		917		5,991		-		63,569
Installment and other		18,523		-		429		-		18,952
Total	$	665,822	$	5,681	$	29,504	$	-	$	701,007

The following table shows all loans, including nonaccrual loans, by risk category and aging as of March 31, 2018 and December 31, 2017:

	Pass			Special Mention		Substandard		Doubtful		Total
March 31, 2018	(In thousands)
Current		$	673,557	$	5,630	$	16,269	$	-	$	695,456
Past due 30-59 days			2,746		-		545		-		3,291
Past due 60-89 days			-		-		412		-		412
Past due 90 days or more			-		-		7,000		-		7,000
Total		$	676,303	$	5,630	$	24,226	$	-	$	706,159
December 31, 2017	(In thousands)
Current		$	662,445	$	5,681	$	15,601	$	-	$	683,727
Past due 30-59 days			1,785		-		6,280		-		8,065
Past due 60-89 days			1,592		-		38		-		1,630
Past due 90 days or more			-		-		7,585		-		7,585
Total		$	665,822	$	5,681	$	29,504	$	-	$	701,007

As of March 31, 2018 and December 31, 2017, nonaccrual loans totaling $12.6 million and $17.3 million were classified as "Substandard," respectively.

The following table presents loans individually evaluated for impairment by class of loans as of March 31, 2018 and December 31, 2017, showing the unpaid principal balance, the recorded investment of the loan (reflecting any loans with partial charge-offs), and the amount of allowance for loan losses specifically allocated for these impaired loans (if any):

	March 31, 2018							December 31, 2017
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated			Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
	(In thousands)
With no related allowance recorded:
Commercial	$	99	$	96				$	184	$	182
Commercial real estate		8,014		5,056					4,294		4,154
Residential real estate		5,809		5,012					6,585		5,808
Construction real estate		6,804		5,429					7,471		6,049
Installment and other		309		308					349		348
With an allowance recorded:
Commercial		13,267		13,266		$	243		13,361		13,359		$	211
Commercial real estate		6,474		6,474			1,199		10,987		10,987			3,735
Residential real estate		6,641		6,641			857		6,774		6,774			943
Construction real estate		3,206		3,206			227		3,244		3,244			231
Installment and other		243		243			37		236		236			32
Total	$	50,866	$	45,731		$	2,563	$	53,485	$	51,141		$	5,152

The table above includes $39.9 million of troubled debt restructurings, or restructured loans, at March 31, 2018 and $38.9 million of restructured loans at December 31, 2017.

The following table presents loans individually evaluated for impairment by class of loans for the three months ended March 31, 2018 and 2017, showing the average recorded investment and the interest income recognized:

	Three Months Ended
	March 31, 2018				March 31, 2017
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(In thousands)
With no related allowance recorded:
Commercial	$	139	$	1	$	1,989	$	14
Commercial real estate		4,605		-		5,035		10
Residential real estate		5,410		15		4,459		22
Construction real estate		5,739		22		6,982		88
Installment and other		328		3		308		3
With an allowance recorded:
Commercial		13,313		187		13,935		186
Commercial real estate		8,730		70		6,353		67
Residential real estate		6,708		75		8,343		81
Construction real estate		3,225		42		4,209		40
Installment and other		239		2		405		3
Total	$	48,436	$	417	$	52,018	$	514

If nonaccrual loans outstanding had been current in accordance with their original terms, approximately $188.3 thousand and $211.4 thousand would have been recorded as loan interest income during the three months ended March 31, 2018 and 2017, respectively.  Interest income recognized in the above table was primarily recognized on a cash basis.

Recorded investment balances in the above tables exclude accrued interest income and unearned income as such amounts were immaterial.

Allowance for Loan Losses:

For the three months ended March 31, 2018 and 2017, activity in the allowance for loan losses was as follows:

	Commercial			Commercial real estate			Residential real estate			Construction real estate			Installment and other			Unallocated			Total
	(In thousands)
Three Months Ended March 31, 2018:
Beginning balance	$	536		$	8,573		$	2,843		$	1,030		$	315		$	506		$	13,803
Provision (benefit) for loan losses		46			1,046			(323	)		(53	)		(95	)		(401	)		220
Charge-offs		(9	)		(2,736	)		(105	)		(112	)		(28	)		-			(2,990	)
Recoveries		24			22			47			49			63			-			205
Net charge-offs		15			(2,714	)		(58	)		(63	)		35			-			(2,785	)
Ending balance	$	597		$	6,905		$	2,462		$	914		$	255		$	105		$	11,238
Three Months Ended March 31, 2017:
Beginning balance	$	1,449		$	6,472		$	4,524		$	1,119		$	715		$	73		$	14,352
Provision (benefit) for loan losses		320			13			(209	)		(27	)		4			(71	)		30
Charge-offs		(186	)		-			(244	)		(16	)		(137	)		-			(583	)
Recoveries		173			88			55			10			62			-			388
Net charge-offs		(13	)		88			(189	)		(6	)		(75	)		-			(195	)
Ending balance	$	1,756		$	6,573		$	4,126		$	1,086		$	644		$	2		$	14,187

Allocation of the allowance for loan losses (as well as the total loans in each allocation method), disaggregated on the basis of the Company’s impairment methodology, is as follows:

	Commercial		Commercial real estate		Residential real estate		Construction real estate		Installment and other		Unallocated		Total
March 31, 2018	(In thousands)
Allowance for loan losses allocated to:
Loans individually evaluated for impairment	$	243	$	1,199	$	857	$	227	$	37	$	-	$	2,563
Loans collectively evaluated for impairment		354		5,706		1,605		687		218		105		8,675
Ending balance	$	597	$	6,905	$	2,462	$	914	$	255	$	105	$	11,238
Loans:
Individually evaluated for impairment	$	13,362	$	11,530	$	11,653	$	8,635	$	551	$	-	$	45,731
Collectively evaluated for impairment		54,195		372,717		157,906		59,367		16,243		-		660,428
Total ending loans balance	$	67,557	$	384,247	$	169,559	$	68,002	$	16,794	$	-	$	706,159
December 31, 2017
Allowance for loan losses allocated to:
Loans individually evaluated for impairment	$	211	$	3,735	$	943	$	231	$	32	$	-	$	5,152
Loans collectively evaluated for impairment		325		4,838		1,900		799		283		506		8,651
Ending balance	$	536	$	8,573	$	2,843	$	1,030	$	315	$	506	$	13,803
Loans:
Individually evaluated for impairment	$	13,541	$	15,141	$	12,582	$	9,293	$	584	$	-	$	51,141
Collectively evaluated for impairment		47,847		363,661		165,714		54,276		18,368		-		649,866
Total ending loans balance	$	61,388	$	378,802	$	178,296	$	63,569	$	18,952	$	-	$	701,007

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification.  The evaluation is performed under the Company's internal underwriting policy.

Troubled Debt Restructurings:

TDRs are defined as those loans where: (1) the borrower is experiencing financial difficulties and (2) the restructuring includes a concession by the Bank to the borrower.

The following table presents loans restructured as TDRs during the three months ended March 31, 2018 and 2017, respectively.

	Three Months Ended March 31, 2018
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Specific reserves allocated
	(Dollars in thousands)
Commercial		1	$	171	$	171	$	1
Commercial real estate		2		2,356		2,356		-
Total		3	$	2,527	$	2,527	$	1

	Three Months ended March 31, 2017
	Number of Contracts		Pre-Modification Outstanding Recorded Investment			Post-Modification Outstanding Recorded Investment			Specific reserves allocated
	(Dollars in thousands)
Construction real estate		1		$	10		$	10		$	-
Total		1		$	10		$	10		$	-

The following table presents loans by class modified as TDRs for which there was a payment default within twelve months following the modification during the three months ended March 31, 2018 and 2017:

	Three Months Ended March 31, 2018
	Number of Contracts		Pre- Modification Outstanding Recorded Investment			Specific reserves allocated
	(Dollars in thousands)
Commercial		1		$	25		$	25
Total		1		$	25		$	25

	Three Months Ended March 31, 2017
	Number of Contracts		Pre- Modification Outstanding Recorded Investment			Specific reserves allocated
	(Dollars in thousands)
Construction real estate		1		$	61		$	-
Total		1		$	61		$	-

Impairment analyses are prepared on TDRs in conjunction with the normal allowance for loan loss process. TDRs restructured during the three months ended March 31, 2018 and 2017 required $1 thousand and $0 in specific reserves, respectively. TDRs resulted in charge-offs of $147 thousand and $20 thousand during the three months ended March 31, 2018 and 2017, respectively.  The TDRs that subsequently defaulted required a provision of $25 thousand and $0 to the allowance for loan losses for the three months ended March 31, 2018 and 2017, respectively.

The following table presents total TDRs, both in accrual and nonaccrual status as of the periods indicated:

	March 31, 2018					December 31, 2017
	Number of contracts			Amount		Number of contracts		Amount
	(Dollars in thousands)
Accrual		$	104	$	32,934	$	108	$	33,801
Nonaccrual			17		6,844		19		5,146
Total		$	121	$	39,778	$	127	$	38,947

              Specific reserves on TDRs at March 31, 2018 and December 31, 2017 were $2.6 million and $2.4 million, respectively.

As of March 31, 2018, the Bank had a total of $2.1 thousand in commitments to lend additional funds on one residential loan classified as a TDR.

Loans to Executive Officers and Directors:

Loan principal balances to executive officers and directors of the Company were $174.6 thousand and $198.4 thousand as of March 31, 2018 and December 31, 2017, respectively.  Total credit available, including companies in which these individuals have management control or beneficial ownership, was $300.6 thousand and $324.4 thousand as of March 31, 2018 and December 31, 2017, respectively.  An analysis of the activity related to these loans as of March 31, 2018 and December 31, 2017 is as follows:

	March 31, 2018			December 31, 2017
	(In thousands)
Balance, beginning	$	198		$	348
Additions		-			13
Changes in Board composition		-			(76	)
Principal payments and other reductions		(24	)		(87	)
Balance, ending	$	174		$	198

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Loan Servicing and Mortgage Servicing Rights ("MSRs")

3 Months Ended

Mar. 31, 2018

Loan Servicing and Mortgage Servicing Rights ("MSRs") [Abstract]

Loan Servicing and Mortgage Servicing Rights ("MSRs")

Note 7. Loan Servicing and Mortgage Servicing Rights ("MSRs")

Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets.  The company's mortgage loans serviced for others portfolio was transferred to another Fannie Mae-approved servicer on December 31, 2017.

During the three months ended March 31, 2017, substantially all of the loans serviced for others had a contractual servicing fee of 0.25% on the unpaid principal balance.  These fees are recorded as “mortgage loan servicing fees” under “noninterest income” on the consolidated statements of operations.

Late fees on the loans serviced for others totaled $18 thousand during the three months ended March 31, 2017.  These fees are recorded included in “noninterest income” on the consolidated statements of operations.

Custodial balances on deposit at the Bank in connection with the foregoing loan servicing were approximately $0 and $4.2 million as of March 31, 2018 and December 31, 2017, respectively.  There were no custodial balances on deposit with other financial institutions as of March 31, 2018 and December 31, 2017.

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Other Real Estate Owned ("OREO")

3 Months Ended

Mar. 31, 2018

Other Real Estate Owned ("OREO") [Abstract]

Other Real Estate Owned ("OREO")

Note 8. Other Real Estate Owned ("OREO")

OREO consists of property acquired due to foreclosure on real estate loans. As of March 31, 2018 and December 31, 2017, total OREO consisted of:

	March 31, 2018		December 31, 2017
	(In thousands)
Commercial real estate	$	1,649	$	1,667
Residential real estate		1,051		886
Construction real estate		3,749		3,879
Total	$	6,449	$	6,432

The following table presents a summary of OREO activity for the three months ended March 31, 2018 and 2017:

	Three Months Ended March 31,
	2018			2017
	(In thousands)
Balance at beginning of period	$	6,432		$	8,436
Transfers in at fair value		473			433
Capitalized improvements		32			-
Write-down of value		(18	)		(82	)
Gain on disposal		39			321
Cash received upon disposition		(509	)		(1,117	)
Sales financed by loans		-			-
Balance at end of period	$	6,449		$	7,991

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Deposits

3 Months Ended

Mar. 31, 2018

Deposits [Abstract]

Deposits

Note 9. Deposits

As of March 31, 2018 and December 31, 2017, deposits consisted of:

	March 31, 2018		December 31, 2017
	(In thousands )
Demand deposits, noninterest bearing	$	163,134	$	161,677
NOW and money market accounts		428,436		404,225
Savings deposits		388,901		388,300
Time certificates, $250,000 or more		21,339		21,639
Other time certificates		142,284		151,506
Total	$	1,144,094	$	1,127,347

Deposits from executive officers, directors and their affiliates as of March 31, 2018 and December 31, 2017 were $1.8 million and $2.2 million, respectively.

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Borrowings

3 Months Ended

Mar. 31, 2018

Borrowings [Abstract]

Borrowings

Note 10. Borrowings

Notes payable to the Federal Home Loan Bank of Dallas ("FHLB") as of March 31, 2018 and December 31, 2017 were secured by a blanket assignment of mortgage loans or other collateral acceptable to FHLB, and generally had a fixed rate of interest, interest payable monthly and principal due at end of term, unless otherwise noted. As of March 31, 2018, there were $328.6 million in collateral value from loans pledged under the blanket assignment and $76.1 million from investment securities held in safekeeping at the FHLB. At March 31, 2018, there were $2.3 million in advances outstanding at the FHLB. An additional $402.4 million in advances is available based on the March 31, 2018 value of the remaining unpledged loans and investment securities.  In the event that short-term liquidity is needed, the Bank has established a relationship with a large regional bank to provide short-term borrowings in the form of federal funds purchased.  The Bank has the ability to borrow up to $20 million for a short period (15 to 60 days) from this bank.

The following table details borrowings as of March 31, 2018 and December 31, 2017.

Maturity Date	Rate			Type	Principal due	March 31, 2018			December 31, 2017
						(In thousands)
April 27, 2021		6.343	%	Fixed	At maturity			2,300		2,300
					Total		$	2,300	$	2,300

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Junior Subordinated Debt

3 Months Ended

Mar. 31, 2018

Junior Subordinated Debt [Abstract]

Junior Subordinated Debt

Note 11. Junior Subordinated Debt

The following table presents details on the junior subordinated debt as of March 31, 2018:

	Trust I			Trust III		Trust IV			Trust V
				(Dollars in thousands)
Date of Issue	March 23, 2000			May 11, 2004		June 29, 2005			September 21, 2006
Amount of trust preferred securities issued	$	10,000		$	6,000	$	10,000		$	10,000
Rate on trust preferred securities		10.875	%	4.70625% (variable)			6.88	%	3.7745% (variable)
Maturity	March 8, 2030			September 8, 2034		November 23, 2035			December 15, 2036
Date of first redemption	March 8, 2010			September 8, 2009		August 23, 2010			September 15, 2011
Common equity securities issued	$	310		$	186	$	310		$	310
Junior subordinated deferrable interest debentures owed	$	-		$	6,186	$	10,310		$	10,310
Rate on junior subordinated deferrable interest debentures		10.875	%	4.70625% (variable)			6.88	%	3.7745% (variable)

On the dates of issue indicated above, the Trusts, being Delaware statutory business trusts, issued trust preferred securities (the “trust preferred securities”) in the amount and at the rate indicated above.  These trust preferred securities represent preferred beneficial interests in the assets of the Trusts.  The trust preferred securities will mature on the dates indicated, and are redeemable in whole or in part at the option of Trinity, with the approval of the FRB.  The Trusts also issued common equity securities to Trinity in the amounts indicated above.  The Trusts used the proceeds of the offering of the trust preferred securities to purchase junior subordinated deferrable interest debentures (the “debentures”) issued by Trinity, which have terms substantially similar to the trust preferred securities.

On March 8, 2018, Trinity consummated the early redemption of all $10.3 million principal amount of those certain Junior Subordinated Deferrable Interest Debentures due 2030 (the “Debt Securities”) issued by Trust I.  The Debt Securities carried an interest rate of 10.875% and were scheduled to mature on March 8, 2030.  The Debt Securities were callable at a redemption rate of 101.088%,  plus accrued and unpaid interest, for a total redemption price of $11.0 million.  Prior deferred issuance costs related to Trust I of $131 thousand were realized as other noninterest expense on the consolidated statement of operations.

Trinity has the right to defer payments of interest on the debentures at any time or from time to time for a period of up to ten consecutive semi-annual periods (or twenty consecutive quarterly periods in the case of Trusts with quarterly interest payments) with respect to each interest payment deferred.  During a period of deferral, unpaid accrued interest is compounded.

Under the terms of the debentures, under certain circumstances of default or if Trinity has elected to defer interest on the debentures, Trinity may not, with certain exceptions, declare or pay any dividends or distributions on its common stock or purchase or acquire any of its common stock.

As of March 31, 2018 and December 31, 2017, there was $110.7 thousand and $456.0 thousand, respectively, in interest accrued and unpaid to trust preferred security holders.

As of March 31, 2018 and December 31, 2017, the Company’s trust preferred securities, subject to certain limitations, qualified as Tier 1 Capital for regulatory capital purposes.

Payments of distributions on the trust preferred securities and payments on redemption of the trust preferred securities are guaranteed by Trinity.  Trinity also entered into an agreement as to expenses and liabilities with the Trusts pursuant to which it agreed, on a subordinated basis, to pay any costs, expenses or liabilities of the Trusts other than those arising under the trust preferred securities.  The obligations of Trinity under the junior subordinated debentures, the related indenture, the trust agreement establishing the Trusts, the guarantee and the agreement as to expenses and liabilities, in the aggregate, constitute a full and unconditional guarantee by Trinity of the Trusts’ obligations under the trust preferred securities.

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Income Taxes

3 Months Ended

Mar. 31, 2018

Income Taxes [Abstract]

Income Taxes

Note 12. Income Taxes

For the three months ended March 31, 2018, the Company recorded a tax expense of $193 thousand compared to a tax benefit of $214 thousand for the three months ended March 31, 2017.

Items causing differences between the Federal statutory tax rate and the effective tax rate are summarized as follows:

	Three Months Ended March 31, 2018						Three Months Ended March 31, 2017
	Amount			Rate			Amount			Rate
	(Dollars in thousands)
Federal statutory tax rate	$	396			21.00	%	$	(238	)		34.00	%
State income tax, net of federal benefit		61			3.23	%		155			(22.22	)%
Net tax exempt interest income		(211	)		(11.18	)%		(91	)		13.08	%
Other, net		(53	)		(2.81	)%		(40	)		5.68	%
Tax provision (benefit) before change in valuation allowance		193			10.24	%		(214	)		30.54	%
Change in valuation allowance		-			-			-			-
Provision (benefit) for income taxes	$	193			10.24	%	$	(214	)		30.54	%

A deferred tax asset ("DTA") or liability is recognized to reflect the net tax effects of temporary differences between the carrying amounts of existing assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes.  A valuation allowance is established when it is more likely than not that all or a portion of a net deferred tax asset will not be realized.  The Company had a valuation allowance at December 31, 2017 and March 31, 2018 of $2.5 million on part of the net DTAs.  This valuation allowance was initially recorded in 2017 when it was determined that $1.7 million and $645 thousand of federal and state tax credit carryforwards are expected to expire unused as a result of loss usage limitations resulting from the Company experiencing an “ownership change” under Section 382 of the Internal Revenue Code on December 19, 2016 which limits its ability to use pre-ownership change of control net operating losses and certain other pre-ownership change tax attributes against the Company’s post-ownership change income.

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Commitments and Off-Balance-Sheet Activities

3 Months Ended

Mar. 31, 2018

Commitments and Off-Balance-Sheet Activities [Abstract]

Commitments and Off-Balance-Sheet Activities

Note 13. Commitments and Off-Balance-Sheet Activities

Credit-related financial instruments: The Company is a party to credit-related commitments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers.  These credit-related commitments include commitments to extend credit, standby letters of credit and commercial letters of credit.  Such credit-related commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets.

The Company’s exposure to credit loss is represented by the contractual amount of these credit-related commitments.  The Company follows the same credit policies in making credit-related commitments as it does for on-balance-sheet instruments.

As of March 31, 2018 and December 31, 2017, the following credit-related commitments were outstanding:

	Contract Amount
	March 31, 2018			December 31, 2017
	(In thousands)
Unfunded commitments under lines of credit		$	133,162	$	122,910
Commercial and standby letters of credit			5,277		5,377
Commitments to make loans			15,444		1,909

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.  Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.  The commitments for equity lines of credit may expire without being drawn upon.  Therefore, the total commitment amounts do not necessarily represent future cash requirements.  The amount of collateral obtained, if deemed necessary by the Bank, is based on management’s credit evaluation of the customer.  Unfunded commitments under commercial lines of credit, revolving credit lines and overdraft protection agreements are commitments for possible future extensions of credit to existing customers.  Overdraft protection agreements are uncollateralized, but most other unfunded commitments have collateral.  These unfunded lines of credit usually do not contain a specified maturity date and may not necessarily be drawn upon to the total extent to which the Bank is committed.

Commitments to make loans are generally made for periods of 90 days or less.  The Company had outstanding loan commitments, excluding undisbursed portions of loans in process and equity lines of credit, of approximately $138.4 million as of March 31, 2018 and $128.3 million as of December 31, 2017, respectively.  Of these commitments outstanding, the breakdown between fixed rate and adjustable rate loans is as follows:

	March 31, 2018			December 31, 2017
	(In thousands)
Fixed rate		$	16,878	$	17,933
Adjustable rate			121,561		110,354
Total		$	138,439	$	128,287

The fixed loan commitments as of March 31, 2018 have interest rates ranging from 0.0% to 6.5% and maturities ranging from on demand to 8 years.

The FHLB requires a blanket assignment of mortgage loans or other collateral acceptable to the FHLB to secure the Company’s short and long-term borrowings from the FHLB.  The value of collateral with the FHLB at March 31, 2018 was $404.7 million.

Commercial and standby letters of credit are conditional credit-related commitments issued by the Bank to guarantee the performance of a customer to a third party.  Those letters of credit are primarily issued to support public and private borrowing arrangements.  Essentially all letters of credit issued have expiration dates within one year.  The credit risk involved in issuing letters of credit is the same as that involved in extending loans to customers.  The Bank generally holds collateral supporting those credit-related commitments, if deemed necessary.  In the event the customer does not perform in accordance with the terms of the agreement with the third party, the Bank would be required to fund the credit-related commitment.  The maximum potential amount of future payments the Bank could be required to make is represented by the contractual amount shown in the summary above.  If the credit-related commitment is funded, the Bank would be entitled to seek recovery from the customer.  As of both March 31, 2018 and December 31, 2017, $575 thousand had been recorded as liabilities for the Company’s potential losses under these credit-related commitments.  The fair value of these credit-related commitments is approximately equal to the fees collected when granting these letters of credit.  These fees collected were $24 thousand and $23 thousand as of March 31, 2018 and December 31, 2017, respectively, and are included in “other liabilities” on the consolidated balance sheets.

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Preferred Equity Issues

3 Months Ended

Mar. 31, 2018

Preferred Equity Issues [Abstract]

Preferred Equity Issues

Note 14. Preferred Equity Issues

The Company had no outstanding preferred shares as of March 31, 2018 or December 31, 2017.

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Stock Incentives

3 Months Ended

Mar. 31, 2018

Stock Incentives [Abstract]

Stock Incentives

Note 15. Stock Incentives

At the Shareholders' Meeting held on January 22, 2015, the Company's shareholders approved the Trinity Capital Corporation 2015 Long-Term Incentive Plan ("2015 Plan") for the benefit of key employees.  As of December 31, 2017, only 30,477 shares of voting common stock remained available for issuance.  In accordance with the terms for the 2015 Plan, on February 21, 2018, the Board approved an additional 500,000 shares of common stock to be reserved under the 2015 Plan. The Compensation Committee determines the terms and conditions of the awards.

There were 239,075 Restricted Stock Unit ("RSU") awards granted under the 2015 Plan during the quarter ended March 31, 2018 and forfeitures of 6,500 RSUs during the quarter ended March 31, 2018, leaving 297,902 shares of common stock available remaining to be issued under the 2015 Plan at March 31, 2018. 

Because share-based compensation awards vesting in the current periods were granted on a variety of dates, the assumptions are presented as weighted averages in those assumptions.  A summary of RSU activity under the 2015 Plan for the three months ended March 31, 2018 is presented below:  

	Shares			Weighted Average Grant Price		Weighted-Average Remaining Contractual Term, in Years		Aggregate Intrinsic Value (in thousands)
RSUs
Nonvested as of January 1, 2018		452,782		$	4.70		2.01	$	2,130
Granted		239,075			7.58		1.80		1,812
Vested		(13,925	)		4.00		-		(56	)
Forfeited or expired		(6,500	)		4.75		-		(31	)
Outstanding Nonvested as of March 31, 2018		671,432		$	5.74		1.66	$	3,855

Share-based compensation expense of $217 thousand and $16 thousand was recognized for the three months ended March 31, 2018 and 2017, respectively.  As of March 31, 2018, there was $3.4 million in unrecognized compensation costs related to unvested share-based compensation awards granted under the 2015 Plan.   The cost will be recognized over the remaining vesting periods.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2018

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 16. Fair Value Measurements

ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.  A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability.  The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability shall not be adjusted for transaction costs.  An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction.  Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact.

The Company uses valuation techniques that are consistent with the sales comparison approach, the income approach and/or the cost approach.  The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities.  The income approach uses valuation techniques to convert expected future amounts, such as cash flows or earnings, to a single present value amount on a discounted basis.  The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost).  Valuation techniques should be consistently applied. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability.  Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.  In that regard, ASC Topic 820 establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.  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 the Company’s monthly and/or quarterly valuation process.

Financial Instruments Recorded at Fair Value on a Recurring Basis

Securities Available for Sale. The fair values of securities available for sale are determined by quoted prices in active markets, when available.  If quoted market prices are not available, the fair value is determined by a matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities.

The following table summarizes the Company's financial assets and off-balance-sheet instruments measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

March 31, 2018	Total			Level 1			Level 2			Level 3
	(In thousands)
Financial Assets:
Investment securities available for sale:
U.S. government sponsored agency		$	67,677		$	-		$	67,677		$	-
States and political subdivision			160,478			-			160,478			-
Residential mortgage backed security			118,111			-			118,111			-
Residential collateralized mortgage obligation			18,164			-			18,164			-
Commercial mortgage backed security			105,941			-			105,941			-
SBA pools			539			-			539			-
Total		$	470,910		$	-		$	470,910		$	-

December 31, 2017	Total			Level 1			Level 2			Level 3
	(In thousands)
Financial Assets:
Investment securities available for sale:
U.S. government sponsored agency		$	68,551		$	-		$	68,551		$	-
States and political subdivision			158,706			-			158,706			-
Residential mortgage backed security			123,083			-			123,083			-
Residential collateralized mortgage obligation			9,686			-			9,686			-
Commercial mortgage backed security			108,162			-			108,162			-
SBA pools			545			-			545			-
Total		$	468,733		$	-		$	468,733		$	-

There were no financial assets or financial liabilities measured at fair value on a recurring basis for which the Company used significant unobservable inputs (Level 3) during the periods presented in these financial statements.  There were no transfers between the levels used on any asset classes during the three months ended March 31, 2018 or the year ended December 31, 2017.

Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis

The Company may be required, from time to time, to measure certain financial assets and financial liabilities at fair value on a nonrecurring basis in accordance with GAAP.

Impaired Loans.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.  Once a loan is identified as impaired, management measures the amount of that impairment in accordance with ASC Topic 310.  The fair value of impaired loans is estimated using one of several methods, including collateral value, liquidation value and discounted cash flows.  Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans.

In accordance with ASC Topic 820, impaired loans where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy.  Collateral values are estimated using Level 3 inputs based on customized discounting criteria.  For collateral dependent impaired loans, the Company obtains a current independent appraisal of loan collateral.  Other valuation techniques are used as well, including internal valuations, comparable property analysis and contractual sales information.

OREO. OREO is adjusted to fair value at the time the loans are transferred to OREO. Subsequently, OREO is carried at the lower of the carrying value or fair value. Fair value is determined based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. The fair value of OREO was computed based on third party appraisals, which are level 3 valuation inputs.

As of March 31, 2018, impaired loans with a carrying value of $29.8 million had a valuation allowance of $2.6 million. As of December 31, 2017, impaired loans with a carrying value of $39.8 million had a valuation allowance of $5.2 million recorded during 2017.

In the table below, OREO had write-downs during the three months ended March 31, 2018 of $19 thousand.  In the table below, OREO had writedowns during the year ended December 31, 2017 of $43 thousand.  The valuation adjustments on OREO have been recorded through earnings.

Assets measured at fair value on a nonrecurring basis as of March 31, 2018 and December 31, 2017 are included in the table below:

	Total		Level 1		Level 2		Level 3
	(In thousands)
March 31, 2018
Financial Assets
Impaired loans	$	27,267	$	-	$	-	$	27,267
Financial Assets
OREO		93		-		-		93
December 31, 2017
Financial Assets
Impaired loans	$	34,600	$	-	$	-	$	34,600
Non-Financial Assets
OREO		405		-		-		405

Assumptions used to determine impaired loans and OREO are presented below by classification, measured at fair value and on a nonrecurring basis as of March 31, 2018 and December 31, 2017:

	Fair value		Valuation Technique(s)	Unobservable Input(s)	Adjustment Range, Weighted Average
March 31, 2018	(In thousands)
Impaired loans
Commercial	$	13,023	Sales comparison	Adjustments for differences of comparable sales	(5.70)% to (150.00)%, (6.07)%
Commercial real estate		5,275	Sales comparison	Adjustments for differences of comparable sales	(4.25) to (7.62), (6.07)
Residential real estate		5,784	Sales comparison	Adjustments for differences of comparable sales	(3.13) to (7.50), (5.76)
Construction real estate		2,979	Sales comparison	Adjustments for differences of comparable sales	(4.00) to (7.25), (6.19)
Installment and other		206	Sales comparison	Adjustments for differences of comparable sales	(4.25) to (8.00), (6.24)
Total impaired loans	$	27,267
OREO
Commercial real estate	$	93	Sales comparison	Adjustments for differences of comparable sales	(16.67)% to (16.67)%,(16.67)%
		93

December 31, 2017
Impaired loans
Commercial	$	13,359	Sales comparison	Adjustments for differences of comparable sales	(5.00)% to (100.00)%, (5.97)%
Commercial real estate		10,987	Sales comparison	Adjustments for differences of comparable sales	(4.25) to (7.62), (6.63)
Residential real estate		6,774	Sales comparison	Adjustments for differences of comparable sales	(3.13) to (7.80), (5.74)
Construction real estate		3,244	Sales comparison	Adjustments for differences of comparable sales	(4.00) to (7.25), (6.18)
Installment and other		236	Sales comparison	Adjustments for differences of comparable sales	(4.25) to (8.00), (6.27)
Total impaired loans	$	34,600
OREO
Residential real estate		315	Sales comparison	Adjustments for differences of comparable sales	(9.09) to (9.09), (9.09)
Construction real estate		90	Sales comparison	Adjustments for differences of comparable sales	(9.78) to (9.78), (9.78)
Total OREO	$	405

Fair Value Assumptions

ASC Topic 825 requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis.  The following methods and assumptions were used by the Company in estimating the fair values (representing exit price) of its other financial instruments:

The carrying amount and estimated fair values of other financial instruments as of March 31, 2018 and December 31, 2017 are as follows:

	Carrying amount		Level 1		Level 2		Level 3		Total
	(In thousands)
March 31, 2018
Financial assets:
Cash and due from banks	$	10,003	$	10,003	$	-	$	-	$	10,003
Interest-bearing deposits with banks		9,517		9,517		-		-		9,517
Investments:
Available for sale		470,910		-		470,910		-		470,910
Held to maturity		7,824		-		7,312		-		7,312
Non-marketable equity securities		4,471		N/A		N/A		N/A		N/A
Loans, net		694,108		-		-		683,069		683,069
Accrued interest receivable on securities		2,726		-		2,726		-		2,726
Accrued interest receivable on loans		2,053		-		-		2,053		2,053
Accrued interest receivable other		7						7		7
Off-balance-sheet instruments:
Loan commitments and standby letters of credit	$	24	$	-	$	24	$	-	$	24
Financial liabilities:
Non-interest bearing deposits	$	163,134	$	163,134	$	-	$	-	$	163,134
Interest bearing deposits		980,960		-		979,054		-		979,054
Long-term borrowings		2,300		-		2,540		-		2,540
Junior subordinated debt		26,764		-		-		17,572		17,572
Accrued interest payable		279		-		168		111		279

December 31, 2017
Financial assets:
Cash and due from banks	$	12,893	$	12,983	$	-	$	-	$	12,983
Interest-bearing deposits with banks		22,541		22,541		-		-		22,541
Securities purchased under resell agreements		-		-		-		-		-
Investments:		-		-		-		-		-
Available for sale		468,733		-		468,733		-		468,733
Held to maturity		7,854		-		7,369		-		7,369
Non-marketable equity securities		3,617		N/A		N/A		N/A		N/A
Loans, net		686,341		-		-		680,911		680,911
Accrued interest receivable on securities		2,795		-		2,795		-		2,795
Accrued interest receivable on loans		2,238		-		-		2,238		2,238
Accrued interest receivable other		21		-		-		21		21
Off-balance-sheet instruments:
Loan commitments and standby letters of credit	$	23	$	-	$	23	$	-	$	23
Financial liabilities:
Non-interest bearing deposits	$	161,677	$	161,677	$	-	$	-	$	161,677
Interest bearing deposits		965,670		-		964,717		-		964,717
Long-term borrowings		2,300		-		2,592		-		2,592
Junior subordinated debt		37,116		-		-		27,128		27,128
Accrued interest payable		628		-		172		456		628

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Regulatory Matters

3 Months Ended

Mar. 31, 2018

Regulatory Matters [Abstract]

Regulatory Matters

Note 17. Regulatory Matters

The ability to pay dividends by any financial institution is affected by the requirement to maintain adequate capital pursuant to applicable capital adequacy guidelines and regulations, and a financial institution generally is prohibited from paying any dividends if, following payment thereof, the institution would be undercapitalized.

The Company is subject to statutory and regulatory restrictions on the payment of dividends and generally cannot pay dividends that exceed its net income or which may weaken its financial health.  The Company’s primary source of cash is dividends from the Bank.  Generally, the Bank is subject to certain restrictions on dividends that it may declare without prior regulatory approval.  The Bank cannot pay dividends in any calendar year that, in the aggregate, exceed the Bank’s year-to-date net income plus its retained income for the two preceding years.  Additionally, the Bank cannot pay dividends that are in excess of the amount that would result in the Bank falling below the minimum required for capital adequacy purposes.

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies.  Failure to meet capital requirements can initiate regulatory action.  The Basel III Rules became effective for the Company on January 1, 2015 with full compliance with all of the requirements being phased in over a multi-year schedule, and fully phased in by January 1, 2019.  See Item 1 - "Supervision & Regulation" for further discussion regarding the Basel III Rules.  The Company and the Bank met all capital adequacy requirements to which they were subject as of March 31, 2018 and December 31, 2017.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition.  If adequately capitalized, regulatory approval is required to accept brokered deposits.  If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required.

The statutory requirements and actual amounts and ratios for the Company and the Bank are presented below:

	Actual					For Capital Adequacy Purposes					To be well capitalized under prompt corrective action provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
March 31, 2018
Total capital (to risk-weighted assets):
Consolidated	$	144,143		16.8772	%	$	68,326		8.0000	%		N/A		N/A
Bank only		137,691		16.1420	%		68,240		8.0000	%	$	85,300		10.0000	%
Tier 1 capital (to risk weighted assets):
Consolidated		133,453		15.6256	%		51,244		6.0000	%		N/A		N/A
Bank only		127,014		14.8903	%		51,180		6.0000	%		68,240		8.0000	%
Common Equity Tier 1 Capital (to risk weighted assets):
Consolidated		107,453		12.5813	%		38,433		4.5000	%		N/A		N/A
Bank only		127,014		14.8903	%		38,385		4.5000	%		55,445		6.5000	%
Tier 1 leverage (to average assets):
Consolidated		133,453		10.4275	%		51,193		4.0000	%		N/A		N/A
Bank only		127,014		9.9331	%		51,148		4.0000	%		63,935		5.0000	%

N/A—not applicable

	Actual								For Capital Adequacy Purposes						To be well capitalized under prompt corrective action provisions
	Amount					Ratio			Amount			Ratio			Amount			Ratio
December 31, 2017
Total capital (to risk-weighted assets):
Consolidated			$	152,076			18.1982	%	$	66,853			8.0000	%		N/A			N/A
Bank only				134,959			16.1823	%		66,720			8.0000	%	$	83,399			10.0000	%
Tier 1 capital (to risk weighted assets):
Consolidated				132,900			15.9035	%		50,140			6.0000	%		N/A			N/A
Bank only				124,481			14.9259	%		50,040			6.0000	%		66,720			8.0000	%
Common Equity Tier 1 Capital (to risk weighted assets):
Consolidated		106,320		12.7228	%		37,605			4.5000	%		N/A			N/A
Bank only		124,481		14.9259	%		37,530			4.5000	%		54,210			6.5000	%
Tier 1 leverage (to average assets):
Consolidated		132,900		10.1821	%		33,427			4.0000	%		N/A			N/A
Bank only		124,481		9.6006	%		33,360			4.0000	%		41,700			5.0000	%

N/A - not applicable

The Bank’s capital ratios fall into the category of “well-capitalized” as of  March 31, 2018 and December 31, 2017.

Trinity and the Bank are also required to maintain a “capital conservation buffer” of 2.5% above the regulatory minimum risk-based capital requirements. The purpose of the conservation buffer is to ensure that banks maintain a buffer of capital that can be used to absorb losses during periods of financial and economic stress.  The capital conservation buffer began to be phased in beginning in January 2016 at 0.625% of risk-weighted assets and will increase by that amount each year until fully implemented in January 2019.  An institution would be subject to limitations on certain activities, including payment of dividends, share repurchases and discretionary bonuses to executive officers, if its capital level is below the buffered ratio. Factoring in the fully phased-in conservation buffer increases the minimum ratios described above to 7.0% for Common Equity Tier 1, 8.5% for Tier 1 Capital and 10.5% for Total Capital. At March 31, 2018 the Bank's capital conservation buffer was 8.1420% and the consolidated capital conservation buffer was 8.0813%.  At December 31, 2017 the Bank's capital conservation buffer was 8.1823% and the consolidated capital conservation buffer was 8.2228%.

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Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2018

Basis of Presentation [Abstract]

Consolidation

Consolidation:  The accompanying unaudited consolidated financial statements include the consolidated balances and results of operations of Trinity Capital Corporation (“Trinity”) and its wholly owned subsidiaries: Los Alamos National Bank (the “Bank”) and TCC Advisors Corporation (“TCC Advisors”), collectively referred to as the “Company.” Trinity Capital Trust I (“Trust I”), Trinity Capital Trust III (“Trust III”), Trinity Capital Trust IV (“Trust IV”) and Trinity Capital Trust V (“Trust V”), collectively referred to as the “Trusts,” are trust subsidiaries of Trinity. Trinity owns all of the outstanding common securities of the Trusts. The Trusts are considered variable interest entities (“VIEs”) under Accounting Standards Codification ("ASC") Topic 810, "Consolidation."  Because Trinity is not the primary beneficiary of the Trusts, the financial statements of the Trusts are not included in the consolidated financial statements of the Company.  TCC Advisors Corporation and Trust I were dissolved in March 2018. 

Basis of presentation

Basis of presentation: The accompanying unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. Significant intercompany items and transactions have been eliminated in consolidation.  The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”) and general practices within the financial services industry.  In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the year then ended.  Actual results could differ from those estimates.

The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for financial information and with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the statements reflect all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows of the Company on a consolidated basis, and all such adjustments are of a normal recurring nature. These financial statements and the notes thereto should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (the "2017 Form 10-K"). Operating results for the three-month period ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018 or any other period.

Reclassifications

Reclassifications: Some items in the prior year financial statements were reclassified to conform to the current presentation.  Reclassifications had no effect on prior year net income or shareholders' equity.

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Earnings (Loss) Per Share Data (Tables)

3 Months Ended

Mar. 31, 2018

Earnings (Loss) Per Share Data [Abstract]

Calculation of basic and diluted earnings (loss) per share

The average number of shares used in calculating basic and diluted earnings (loss) per common share were as follows for the three months ended March 31, 2018 and 2017:

	Three Months Ended March 31,
	2018		2017
	(In thousands, except share and per share data)
Net income (loss)	$	1,692	$	(486	)
Dividends and discount accretion on preferred shares		-		770
Net income (loss) available to common shareholders	$	1,692	$	(1,256	)
Weighted average common shares issued		19,665,543		13,017,045
LESS: Weighted average treasury stock shares		-		-
Weighted average common shares outstanding, net		19,665,543		13,017,045
Basic income (loss) per common share	$	0.09	$	(0.10	)
Dilutive effect of stock-based compensation		45,133		-
Weighted average common shares outstanding including dilutive shares		19,710,676		13,017,045
Diluted income (loss) per common share	$	0.09	$	(0.10	)

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Investment Securities (Tables)

3 Months Ended

Mar. 31, 2018

Investment Securities [Abstract]

Amortized cost and fair values of investment securities

Amortized cost and fair values of investment securities are summarized as follows:

Securities Available for Sale:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)
March 31, 2018
U.S. government sponsored agencies	$	69,310	$	-	$	(1,633	)	$	67,677
State and political subdivisions		163,991		177		(3,690	)		160,478
Residential mortgage backed securities		120,195		2		(2,086	)		118,111
Residential collateralized mortgage obligations		18,294		50		(180	)		18,164
Commercial mortgage backed securities		110,244		-		(4,303	)		105,941
SBA pools		554		-		(15	)		539
Totals	$	482,588	$	229	$	(11,907	)	$	470,910
December 31, 2017
U.S. government sponsored agencies	$	69,315	$	-	$	(764	)	$	68,551
State and political subdivisions		157,652		1,306		(252	)		158,706
Residential mortgage backed securities		124,578		98		(1,593	)		123,083
Residential collateralized mortgage obligations		9,715		51		(80	)		9,686
Commercial mortgage backed securities		110,483		67		(2,388	)		108,162
SBA pools		560		-		(15	)		545
Totals	$	472,303	$	1,522	$	(5,092	)	$	468,733

Securities Held to Maturity	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)
March 31, 2018
SBA pools	$	7,824	$	-	$	(512	)	$	7,312
Totals	$	7,824	$	-	$	(512	)	$	7,312
December 31, 2017
SBA pools	$	7,854	$	-	$	(485	)	$	7,369
Totals	$	7,854	$	-	$	(485	)	$	7,369

Unrealized loss information for investment securities

A summary of unrealized loss information for investment securities, categorized by security type, as of March 31, 2018 and December 31, 2017 was as follows:

	Less than 12 Months					12 Months or Longer					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Securities Available for Sale:
March 31, 2018
U.S. government sponsored agencies	$	48,412	$	(979	)	$	19,265	$	(654	)	$	67,677	$	(1,633	)
State and political subdivisions		115,741		(2,913	)		24,041		(777	)		139,782		(3,690	)
Residential mortgage backed securities		37,193		(512	)		82,865		(1,574	)		120,058		(2,086	)
Residential collateralized mortgage obligations		12,521		(156	)		4,271		(24	)		16,792		(180	)
Commercial mortgage backed securities		24,331		(536	)		79,377		(3,767	)		103,708		(4,303	)
SBA pools		-		-			539		(15	)		539		(15	)
Totals	$	238,198	$	(5,096	)	$	210,358	$	(6,811	)	$	448,556	$	(11,907	)
December 31, 2017
U.S. government sponsored agencies	$	49,070	$	(331	)	$	19,481	$	(433	)	$	68,551	$	(764	)
State and political subdivisions		23,217		(95	)		24,774		(157	)		47,991		(252	)
Residential mortgage backed securities		18,771		(199	)		88,100		(1,394	)		106,871		(1,593	)
Residential collateralized mortgage obligations		4,761		(67	)		3,502		(13	)		8,263		(80	)
Commercial mortgage backed securities		6,961		(94	)		81,042		(2,294	)		88,003		(2,388	)
SBA pools		-		-			545		(15	)		545		(15	)
Totals	$	102,780	$	(786	)	$	217,444	$	(4,306	)	$	320,224	$	(5,092	)
Securities Held to Maturity:
March 31, 2018
SBA pools	$	-	$	-		$	7,312	$	(512	)	$	7,312	$	(512	)
Totals	$	-	$	-		$	7,312	$	(512	)	$	7,312	$	(512	)
December 31, 2017
SBA pools	$	-	$	-		$	7,369	$	(485	)	$	7,369	$	(485	)
Totals	$	-	$	-		$	7,369	$	(485	)	$	7,369	$	(485	)

Amortized cost and fair value of investment securities, by contractual maturity

The amortized cost and fair value of investment securities, as of March 31, 2018, by contractual maturity are shown below.  Maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.

	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
One year or less	$	201	$	200	$	-	$	-
One to five years		65,540		64,008		-		-
Five to ten years		6,578		6,487		-		-
Over ten years		161,536		157,999		7,824		7,312
Subtotal		233,855		228,694		7,824		7,312
Residential mortgage backed security		120,195		118,111		-		-
Residential collateralized mortgage obligation		18,294		18,164		-		-
Commercial mortgage backed security		110,244		105,941
Total	$	482,588	$	470,910	$	7,824	$	7,312

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Loans and Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2018

Loans and Allowance for Loan Losses [Abstract]

Components of loans

As of March 31, 2018 and December 31, 2017, loans consisted of:

	March 31, 2018			December 31, 2017
	(In thousands)
Commercial	$	67,557		$	61,388
Commercial real estate		384,247			378,802
Residential real estate		169,559			178,296
Construction real estate		68,002			63,569
Installment and other		16,794			18,952
Total loans		706,159			701,007
Unearned income		(813	)		(863	)
Gross loans		705,346			700,144
Allowance for loan losses		(11,238	)		(13,803	)
Net loans	$	694,108		$	686,341

Contractual aging of the recorded investment in current and past due loans by class of loans

The following table presents the contractual aging of the recorded investment in current and past due loans by class of loans as of March 31, 2018 and December 31, 2017, including nonaccrual loans:

	Current		30-59 Days Past Due		60-89 Days Past Due		Loans past due 90 days or more		Total Past Due		Total
March 31, 2018	(In thousands)
Commercial	$	67,214	$	318	$	25	$	-	$	343	$	67,557
Commercial real estate		380,993		1,292		-		1,962		3,254		384,247
Residential real estate		166,462		1,314		387		1,396		3,097		169,559
Construction real estate		64,114		338		-		3,550		3,888		68,002
Installment and other		16,673		29		-		92		121		16,794
Total loans	$	695,456	$	3,291	$	412	$	7,000	$	10,703	$	706,159
Nonaccrual loan classification, included above	$	4,729	$	484	$	412	$	7,000	$	7,896	$	12,625
December 31, 2017
Commercial	$	59,703	$	173	$	1,475	$	37	$	1,685	$	61,388
Commercial real estate		371,640		5,490		-		1,672		7,162		378,802
Residential real estate		174,388		1,899		-		2,009		3,908		178,296
Construction real estate		59,291		423		74		3,781		4,278		63,569
Installment and other		18,705		80		81		86		247		18,952
Total loans	$	683,727	$	8,065	$	1,630	$	7,585	$	17,280	$	701,007
Nonaccrual loan classification, included above	$	3,858	$	5,859	$	38	$	7,585	$	13,482	$	17,340

The following table presents the recorded investment in nonaccrual loans and loans past due 90 days or more and still accruing interest by class of loans as of March 31, 2018 and December 31, 2017:

	March 31, 2018				December 31, 2017
	Nonaccrual		Loans past due 90 days or more and still accruing interest		Nonaccrual		Loans past due 90 days or more and still accruing interest
	(In thousands)
Commercial	$	58	$	-	$	102	$	-
Commercial real estate		5,056		-		8,617		-
Residential real estate		3,774		-		4,599		-
Construction real estate		3,645		-		3,911		-
Installment and other		92		-		111		-
Total	$	12,625	$	-	$	17,340	$	-

Risk category of loans by class of loans

Loans not meeting the criteria above that are analyzed individually are considered to be pass-rated loans.  The following table presents the risk category by class of loans based on the most recent analysis performed as of March 31, 2018 and December 31, 2017:

	Pass		Special Mention		Substandard		Doubtful		Total
March 31, 2018	(In thousands)
Commercial	$	64,757	$	225	$	2,575	$	-	$	67,557
Commercial real estate		369,163		4,507		10,577		-		384,247
Residential real estate		164,280		-		5,279		-		169,559
Construction real estate		61,717		898		5,387		-		68,002
Installment and other		16,386		-		408		-		16,794
Total	$	676,303	$	5,630	$	24,226	$	-	$	706,159
December 31, 2017
Commercial	$	58,769	$	2	$	2,617	$	-	$	61,388
Commercial real estate		359,768		4,762		14,272		-		378,802
Residential real estate		172,101		-		6,195		-		178,296
Construction real estate		56,661		917		5,991		-		63,569
Installment and other		18,523		-		429		-		18,952
Total	$	665,822	$	5,681	$	29,504	$	-	$	701,007

The following table shows all loans, including nonaccrual loans, by risk category and aging as of March 31, 2018 and December 31, 2017:

	Pass			Special Mention		Substandard		Doubtful		Total
March 31, 2018	(In thousands)
Current		$	673,557	$	5,630	$	16,269	$	-	$	695,456
Past due 30-59 days			2,746		-		545		-		3,291
Past due 60-89 days			-		-		412		-		412
Past due 90 days or more			-		-		7,000		-		7,000
Total		$	676,303	$	5,630	$	24,226	$	-	$	706,159
December 31, 2017	(In thousands)
Current		$	662,445	$	5,681	$	15,601	$	-	$	683,727
Past due 30-59 days			1,785		-		6,280		-		8,065
Past due 60-89 days			1,592		-		38		-		1,630
Past due 90 days or more			-		-		7,585		-		7,585
Total		$	665,822	$	5,681	$	29,504	$	-	$	701,007

Loans and average loans individually evaluated for impairment by class of loans

The following table presents loans individually evaluated for impairment by class of loans as of March 31, 2018 and December 31, 2017, showing the unpaid principal balance, the recorded investment of the loan (reflecting any loans with partial charge-offs), and the amount of allowance for loan losses specifically allocated for these impaired loans (if any):

	March 31, 2018							December 31, 2017
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated			Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
	(In thousands)
With no related allowance recorded:
Commercial	$	99	$	96				$	184	$	182
Commercial real estate		8,014		5,056					4,294		4,154
Residential real estate		5,809		5,012					6,585		5,808
Construction real estate		6,804		5,429					7,471		6,049
Installment and other		309		308					349		348
With an allowance recorded:
Commercial		13,267		13,266		$	243		13,361		13,359		$	211
Commercial real estate		6,474		6,474			1,199		10,987		10,987			3,735
Residential real estate		6,641		6,641			857		6,774		6,774			943
Construction real estate		3,206		3,206			227		3,244		3,244			231
Installment and other		243		243			37		236		236			32
Total	$	50,866	$	45,731		$	2,563	$	53,485	$	51,141		$	5,152

The following table presents loans individually evaluated for impairment by class of loans for the three months ended March 31, 2018 and 2017, showing the average recorded investment and the interest income recognized:

	Three Months Ended
	March 31, 2018				March 31, 2017
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(In thousands)
With no related allowance recorded:
Commercial	$	139	$	1	$	1,989	$	14
Commercial real estate		4,605		-		5,035		10
Residential real estate		5,410		15		4,459		22
Construction real estate		5,739		22		6,982		88
Installment and other		328		3		308		3
With an allowance recorded:
Commercial		13,313		187		13,935		186
Commercial real estate		8,730		70		6,353		67
Residential real estate		6,708		75		8,343		81
Construction real estate		3,225		42		4,209		40
Installment and other		239		2		405		3
Total	$	48,436	$	417	$	52,018	$	514

Activity and allocation of allowance for loan losses

For the three months ended March 31, 2018 and 2017, activity in the allowance for loan losses was as follows:

	Commercial			Commercial real estate			Residential real estate			Construction real estate			Installment and other			Unallocated			Total
	(In thousands)
Three Months Ended March 31, 2018:
Beginning balance	$	536		$	8,573		$	2,843		$	1,030		$	315		$	506		$	13,803
Provision (benefit) for loan losses		46			1,046			(323	)		(53	)		(95	)		(401	)		220
Charge-offs		(9	)		(2,736	)		(105	)		(112	)		(28	)		-			(2,990	)
Recoveries		24			22			47			49			63			-			205
Net charge-offs		15			(2,714	)		(58	)		(63	)		35			-			(2,785	)
Ending balance	$	597		$	6,905		$	2,462		$	914		$	255		$	105		$	11,238
Three Months Ended March 31, 2017:
Beginning balance	$	1,449		$	6,472		$	4,524		$	1,119		$	715		$	73		$	14,352
Provision (benefit) for loan losses		320			13			(209	)		(27	)		4			(71	)		30
Charge-offs		(186	)		-			(244	)		(16	)		(137	)		-			(583	)
Recoveries		173			88			55			10			62			-			388
Net charge-offs		(13	)		88			(189	)		(6	)		(75	)		-			(195	)
Ending balance	$	1,756		$	6,573		$	4,126		$	1,086		$	644		$	2		$	14,187

Allocation of the allowance for loan losses (as well as the total loans in each allocation method), disaggregated on the basis of the Company’s impairment methodology, is as follows:

	Commercial		Commercial real estate		Residential real estate		Construction real estate		Installment and other		Unallocated		Total
March 31, 2018	(In thousands)
Allowance for loan losses allocated to:
Loans individually evaluated for impairment	$	243	$	1,199	$	857	$	227	$	37	$	-	$	2,563
Loans collectively evaluated for impairment		354		5,706		1,605		687		218		105		8,675
Ending balance	$	597	$	6,905	$	2,462	$	914	$	255	$	105	$	11,238
Loans:
Individually evaluated for impairment	$	13,362	$	11,530	$	11,653	$	8,635	$	551	$	-	$	45,731
Collectively evaluated for impairment		54,195		372,717		157,906		59,367		16,243		-		660,428
Total ending loans balance	$	67,557	$	384,247	$	169,559	$	68,002	$	16,794	$	-	$	706,159
December 31, 2017
Allowance for loan losses allocated to:
Loans individually evaluated for impairment	$	211	$	3,735	$	943	$	231	$	32	$	-	$	5,152
Loans collectively evaluated for impairment		325		4,838		1,900		799		283		506		8,651
Ending balance	$	536	$	8,573	$	2,843	$	1,030	$	315	$	506	$	13,803
Loans:
Individually evaluated for impairment	$	13,541	$	15,141	$	12,582	$	9,293	$	584	$	-	$	51,141
Collectively evaluated for impairment		47,847		363,661		165,714		54,276		18,368		-		649,866
Total ending loans balance	$	61,388	$	378,802	$	178,296	$	63,569	$	18,952	$	-	$	701,007

Troubled debt restructurings on financing receivables

The following table presents loans restructured as TDRs during the three months ended March 31, 2018 and 2017, respectively.

	Three Months Ended March 31, 2018
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Specific reserves allocated
	(Dollars in thousands)
Commercial		1	$	171	$	171	$	1
Commercial real estate		2		2,356		2,356		-
Total		3	$	2,527	$	2,527	$	1

	Three Months ended March 31, 2017
	Number of Contracts		Pre-Modification Outstanding Recorded Investment			Post-Modification Outstanding Recorded Investment			Specific reserves allocated
	(Dollars in thousands)
Construction real estate		1		$	10		$	10		$	-
Total		1		$	10		$	10		$	-

The following table presents loans by class modified as TDRs for which there was a payment default within twelve months following the modification during the three months ended March 31, 2018 and 2017:

	Three Months Ended March 31, 2018
	Number of Contracts		Pre- Modification Outstanding Recorded Investment			Specific reserves allocated
	(Dollars in thousands)
Commercial		1		$	25		$	25
Total		1		$	25		$	25

	Three Months Ended March 31, 2017
	Number of Contracts		Pre- Modification Outstanding Recorded Investment			Specific reserves allocated
	(Dollars in thousands)
Construction real estate		1		$	61		$	-
Total		1		$	61		$	-

Total TDRs in accrual and nonaccrual status

The following table presents total TDRs, both in accrual and nonaccrual status as of the periods indicated:

	March 31, 2018					December 31, 2017
	Number of contracts			Amount		Number of contracts		Amount
	(Dollars in thousands)
Accrual		$	104	$	32,934	$	108	$	33,801
Nonaccrual			17		6,844		19		5,146
Total		$	121	$	39,778	$	127	$	38,947

Related parties loan

An analysis of the activity related to these loans as of March 31, 2018 and December 31, 2017 is as follows:

	March 31, 2018			December 31, 2017
	(In thousands)
Balance, beginning	$	198		$	348
Additions		-			13
Changes in Board composition		-			(76	)
Principal payments and other reductions		(24	)		(87	)
Balance, ending	$	174		$	198

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Other Real Estate Owned ("OREO") (Tables)

3 Months Ended

Mar. 31, 2018

Other Real Estate Owned ("OREO") [Abstract]

Other real estate owned

OREO consists of property acquired due to foreclosure on real estate loans. As of March 31, 2018 and December 31, 2017, total OREO consisted of:

	March 31, 2018		December 31, 2017
	(In thousands)
Commercial real estate	$	1,649	$	1,667
Residential real estate		1,051		886
Construction real estate		3,749		3,879
Total	$	6,449	$	6,432

Summary of OREO activity

The following table presents a summary of OREO activity for the three months ended March 31, 2018 and 2017:

	Three Months Ended March 31,
	2018			2017
	(In thousands)
Balance at beginning of period	$	6,432		$	8,436
Transfers in at fair value		473			433
Capitalized improvements		32			-
Write-down of value		(18	)		(82	)
Gain on disposal		39			321
Cash received upon disposition		(509	)		(1,117	)
Sales financed by loans		-			-
Balance at end of period	$	6,449		$	7,991

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Deposits (Tables)

3 Months Ended

Mar. 31, 2018

Deposits [Abstract]

Deposits

As of March 31, 2018 and December 31, 2017, deposits consisted of:

	March 31, 2018		December 31, 2017
	(In thousands )
Demand deposits, noninterest bearing	$	163,134	$	161,677
NOW and money market accounts		428,436		404,225
Savings deposits		388,901		388,300
Time certificates, $250,000 or more		21,339		21,639
Other time certificates		142,284		151,506
Total	$	1,144,094	$	1,127,347

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Borrowings (Tables)

3 Months Ended

Mar. 31, 2018

Borrowings [Abstract]

Schedule of borrowings

The following table details borrowings as of March 31, 2018 and December 31, 2017.

Maturity Date	Rate			Type	Principal due	March 31, 2018			December 31, 2017
						(In thousands)
April 27, 2021		6.343	%	Fixed	At maturity			2,300		2,300
					Total		$	2,300	$	2,300

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Junior Subordinated Debt (Tables)

3 Months Ended

Mar. 31, 2018

Junior Subordinated Debt [Abstract]

Junior subordinated debt owed to unconsolidated trust

The following table presents details on the junior subordinated debt as of March 31, 2018:

	Trust I			Trust III		Trust IV			Trust V
				(Dollars in thousands)
Date of Issue	March 23, 2000			May 11, 2004		June 29, 2005			September 21, 2006
Amount of trust preferred securities issued	$	10,000		$	6,000	$	10,000		$	10,000
Rate on trust preferred securities		10.875	%	4.70625% (variable)			6.88	%	3.7745% (variable)
Maturity	March 8, 2030			September 8, 2034		November 23, 2035			December 15, 2036
Date of first redemption	March 8, 2010			September 8, 2009		August 23, 2010			September 15, 2011
Common equity securities issued	$	310		$	186	$	310		$	310
Junior subordinated deferrable interest debentures owed	$	-		$	6,186	$	10,310		$	10,310
Rate on junior subordinated deferrable interest debentures		10.875	%	4.70625% (variable)			6.88	%	3.7745% (variable)

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2018

Income Taxes [Abstract]

Federal statutory tax rate and effective tax rate reconciliation

Items causing differences between the Federal statutory tax rate and the effective tax rate are summarized as follows:

	Three Months Ended March 31, 2018						Three Months Ended March 31, 2017
	Amount			Rate			Amount			Rate
	(Dollars in thousands)
Federal statutory tax rate	$	396			21.00	%	$	(238	)		34.00	%
State income tax, net of federal benefit		61			3.23	%		155			(22.22	)%
Net tax exempt interest income		(211	)		(11.18	)%		(91	)		13.08	%
Other, net		(53	)		(2.81	)%		(40	)		5.68	%
Tax provision (benefit) before change in valuation allowance		193			10.24	%		(214	)		30.54	%
Change in valuation allowance		-			-			-			-
Provision (benefit) for income taxes	$	193			10.24	%	$	(214	)		30.54	%

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Commitments and Off-Balance-Sheet Activities (Tables)

3 Months Ended

Mar. 31, 2018

Commitments and Off-Balance-Sheet Activities [Abstract]

Credit-related commitments

As of March 31, 2018 and December 31, 2017, the following credit-related commitments were outstanding:

	Contract Amount
	March 31, 2018			December 31, 2017
	(In thousands)
Unfunded commitments under lines of credit		$	133,162	$	122,910
Commercial and standby letters of credit			5,277		5,377
Commitments to make loans			15,444		1,909

Commitments outstanding, breakdown between fixed-and adjustable-rate loans

Of these commitments outstanding, the breakdown between fixed rate and adjustable rate loans is as follows:

	March 31, 2018			December 31, 2017
	(In thousands)
Fixed rate		$	16,878	$	17,933
Adjustable rate			121,561		110,354
Total		$	138,439	$	128,287

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Stock Incentives (Tables)

3 Months Ended

Mar. 31, 2018

Stock Incentives [Abstract]

Summary of changes in RSUs and performance-based restricted stock units

A summary of RSU activity under the 2015 Plan for the three months ended March 31, 2018 is presented below:  

	Shares			Weighted Average Grant Price		Weighted-Average Remaining Contractual Term, in Years		Aggregate Intrinsic Value (in thousands)
RSUs
Nonvested as of January 1, 2018		452,782		$	4.70		2.01	$	2,130
Granted		239,075			7.58		1.80		1,812
Vested		(13,925	)		4.00		-		(56	)
Forfeited or expired		(6,500	)		4.75		-		(31	)
Outstanding Nonvested as of March 31, 2018		671,432		$	5.74		1.66	$	3,855

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2018

Fair Value Measurements [Abstract]

Financial assets and off-balance-sheet instruments measured at fair value on a recurring basis

The following table summarizes the Company's financial assets and off-balance-sheet instruments measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

March 31, 2018	Total			Level 1			Level 2			Level 3
	(In thousands)
Financial Assets:
Investment securities available for sale:
U.S. government sponsored agency		$	67,677		$	-		$	67,677		$	-
States and political subdivision			160,478			-			160,478			-
Residential mortgage backed security			118,111			-			118,111			-
Residential collateralized mortgage obligation			18,164			-			18,164			-
Commercial mortgage backed security			105,941			-			105,941			-
SBA pools			539			-			539			-
Total		$	470,910		$	-		$	470,910		$	-

December 31, 2017	Total			Level 1			Level 2			Level 3
	(In thousands)
Financial Assets:
Investment securities available for sale:
U.S. government sponsored agency		$	68,551		$	-		$	68,551		$	-
States and political subdivision			158,706			-			158,706			-
Residential mortgage backed security			123,083			-			123,083			-
Residential collateralized mortgage obligation			9,686			-			9,686			-
Commercial mortgage backed security			108,162			-			108,162			-
SBA pools			545			-			545			-
Total		$	468,733		$	-		$	468,733		$	-

Assets measured at fair value on a nonrecurring basis

Assets measured at fair value on a nonrecurring basis as of March 31, 2018 and December 31, 2017 are included in the table below:

	Total		Level 1		Level 2		Level 3
	(In thousands)
March 31, 2018
Financial Assets
Impaired loans	$	27,267	$	-	$	-	$	27,267
Financial Assets
OREO		93		-		-		93
December 31, 2017
Financial Assets
Impaired loans	$	34,600	$	-	$	-	$	34,600
Non-Financial Assets
OREO		405		-		-		405

Valuation assumptions used on impaired loans and OREO on a nonrecurring basis at fair value

Assumptions used to determine impaired loans and OREO are presented below by classification, measured at fair value and on a nonrecurring basis as of March 31, 2018 and December 31, 2017:

	Fair value		Valuation Technique(s)	Unobservable Input(s)	Adjustment Range, Weighted Average
March 31, 2018	(In thousands)
Impaired loans
Commercial	$	13,023	Sales comparison	Adjustments for differences of comparable sales	(5.70)% to (150.00)%, (6.07)%
Commercial real estate		5,275	Sales comparison	Adjustments for differences of comparable sales	(4.25) to (7.62), (6.07)
Residential real estate		5,784	Sales comparison	Adjustments for differences of comparable sales	(3.13) to (7.50), (5.76)
Construction real estate		2,979	Sales comparison	Adjustments for differences of comparable sales	(4.00) to (7.25), (6.19)
Installment and other		206	Sales comparison	Adjustments for differences of comparable sales	(4.25) to (8.00), (6.24)
Total impaired loans	$	27,267
OREO
Commercial real estate	$	93	Sales comparison	Adjustments for differences of comparable sales	(16.67)% to (16.67)%,(16.67)%
		93

December 31, 2017
Impaired loans
Commercial	$	13,359	Sales comparison	Adjustments for differences of comparable sales	(5.00)% to (100.00)%, (5.97)%
Commercial real estate		10,987	Sales comparison	Adjustments for differences of comparable sales	(4.25) to (7.62), (6.63)
Residential real estate		6,774	Sales comparison	Adjustments for differences of comparable sales	(3.13) to (7.80), (5.74)
Construction real estate		3,244	Sales comparison	Adjustments for differences of comparable sales	(4.00) to (7.25), (6.18)
Installment and other		236	Sales comparison	Adjustments for differences of comparable sales	(4.25) to (8.00), (6.27)
Total impaired loans	$	34,600
OREO
Residential real estate		315	Sales comparison	Adjustments for differences of comparable sales	(9.09) to (9.09), (9.09)
Construction real estate		90	Sales comparison	Adjustments for differences of comparable sales	(9.78) to (9.78), (9.78)
Total OREO	$	405

Carrying amount and estimated fair values of financial instruments

	Carrying amount		Level 1		Level 2		Level 3		Total
	(In thousands)
March 31, 2018
Financial assets:
Cash and due from banks	$	10,003	$	10,003	$	-	$	-	$	10,003
Interest-bearing deposits with banks		9,517		9,517		-		-		9,517
Investments:
Available for sale		470,910		-		470,910		-		470,910
Held to maturity		7,824		-		7,312		-		7,312
Non-marketable equity securities		4,471		N/A		N/A		N/A		N/A
Loans, net		694,108		-		-		683,069		683,069
Accrued interest receivable on securities		2,726		-		2,726		-		2,726
Accrued interest receivable on loans		2,053		-		-		2,053		2,053
Accrued interest receivable other		7						7		7
Off-balance-sheet instruments:
Loan commitments and standby letters of credit	$	24	$	-	$	24	$	-	$	24
Financial liabilities:
Non-interest bearing deposits	$	163,134	$	163,134	$	-	$	-	$	163,134
Interest bearing deposits		980,960		-		979,054		-		979,054
Long-term borrowings		2,300		-		2,540		-		2,540
Junior subordinated debt		26,764		-		-		17,572		17,572
Accrued interest payable		279		-		168		111		279

December 31, 2017
Financial assets:
Cash and due from banks	$	12,893	$	12,983	$	-	$	-	$	12,983
Interest-bearing deposits with banks		22,541		22,541		-		-		22,541
Securities purchased under resell agreements		-		-		-		-		-
Investments:		-		-		-		-		-
Available for sale		468,733		-		468,733		-		468,733
Held to maturity		7,854		-		7,369		-		7,369
Non-marketable equity securities		3,617		N/A		N/A		N/A		N/A
Loans, net		686,341		-		-		680,911		680,911
Accrued interest receivable on securities		2,795		-		2,795		-		2,795
Accrued interest receivable on loans		2,238		-		-		2,238		2,238
Accrued interest receivable other		21		-		-		21		21
Off-balance-sheet instruments:
Loan commitments and standby letters of credit	$	23	$	-	$	23	$	-	$	23
Financial liabilities:
Non-interest bearing deposits	$	161,677	$	161,677	$	-	$	-	$	161,677
Interest bearing deposits		965,670		-		964,717		-		964,717
Long-term borrowings		2,300		-		2,592		-		2,592
Junior subordinated debt		37,116		-		-		27,128		27,128
Accrued interest payable		628		-		172		456		628

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Regulatory Matters (Tables)

3 Months Ended

Mar. 31, 2018

Regulatory Matters [Abstract]

Summary of required and actual amounts and ratios for the entity and the Bank

The statutory requirements and actual amounts and ratios for the Company and the Bank are presented below:

	Actual					For Capital Adequacy Purposes					To be well capitalized under prompt corrective action provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
March 31, 2018
Total capital (to risk-weighted assets):
Consolidated	$	144,143		16.8772	%	$	68,326		8.0000	%		N/A		N/A
Bank only		137,691		16.1420	%		68,240		8.0000	%	$	85,300		10.0000	%
Tier 1 capital (to risk weighted assets):
Consolidated		133,453		15.6256	%		51,244		6.0000	%		N/A		N/A
Bank only		127,014		14.8903	%		51,180		6.0000	%		68,240		8.0000	%
Common Equity Tier 1 Capital (to risk weighted assets):
Consolidated		107,453		12.5813	%		38,433		4.5000	%		N/A		N/A
Bank only		127,014		14.8903	%		38,385		4.5000	%		55,445		6.5000	%
Tier 1 leverage (to average assets):
Consolidated		133,453		10.4275	%		51,193		4.0000	%		N/A		N/A
Bank only		127,014		9.9331	%		51,148		4.0000	%		63,935		5.0000	%

N/A—not applicable

	Actual								For Capital Adequacy Purposes						To be well capitalized under prompt corrective action provisions
	Amount					Ratio			Amount			Ratio			Amount			Ratio
December 31, 2017
Total capital (to risk-weighted assets):
Consolidated			$	152,076			18.1982	%	$	66,853			8.0000	%		N/A			N/A
Bank only				134,959			16.1823	%		66,720			8.0000	%	$	83,399			10.0000	%
Tier 1 capital (to risk weighted assets):
Consolidated				132,900			15.9035	%		50,140			6.0000	%		N/A			N/A
Bank only				124,481			14.9259	%		50,040			6.0000	%		66,720			8.0000	%
Common Equity Tier 1 Capital (to risk weighted assets):
Consolidated		106,320		12.7228	%		37,605			4.5000	%		N/A			N/A
Bank only		124,481		14.9259	%		37,530			4.5000	%		54,210			6.5000	%
Tier 1 leverage (to average assets):
Consolidated		132,900		10.1821	%		33,427			4.0000	%		N/A			N/A
Bank only		124,481		9.6006	%		33,360			4.0000	%		41,700			5.0000	%

N/A - not applicable

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Earnings (Loss) Per Share Data (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Computation of basic and diluted earnings (loss) per share [Abstract]
Net income (loss)	$ 1,692	$ (486)
Dividends and discount accretion on preferred shares	0	770
Net income (loss) available to common shareholders	$ 1,692	$ (1,256)
Weighted average common shares issued (in shares)	19,665,543	13,017,045
LESS: Weighted average treasury stock shares (in shares)	0	0
Weighted average common shares outstanding, net (in shares)	19,665,543	13,017,045
Basic income (loss) per common share (in dollars per share)	$ 0.09	$ (0.10)
Dilutive effect of stock-based compensation (in shares)	45,133	0
Weighted average common shares outstanding including dilutive shares (in shares)	19,710,676	13,017,045
Diluted income (loss) per common share (in dollars per share)	$ 0.09	$ (0.10)
Restricted Stock Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of shares excluded computation of earnings per share (in shares)	0	33,000

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Restrictions on Cash and Due From Banks (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Restrictions on Cash and Due From Banks [Abstract]
Reserve balances in cash or on deposit with Federal Reserve Bank	$ 0	$ 0

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Investment Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Securities Available for Sale [Abstract]
Amortized Cost	$ 482,588	$ 472,303
Gross Unrealized Gains	229	1,522
Gross Unrealized Losses	(11,907)	(5,092)
Fair Value	470,910	468,733
Securities Held-to-maturity [Abstract]
Amortized Cost	7,824	7,854
Gross Unrecognized Gains	0	0
Gross Unrecognized Losses	(512)	(485)
Fair Value	7,312	7,369
U.S. Government Sponsored Agencies [Member]
Securities Available for Sale [Abstract]
Amortized Cost	69,310	69,315
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(1,633)	(764)
Fair Value	67,677	68,551
State and Political Subdivisions [Member]
Securities Available for Sale [Abstract]
Amortized Cost	163,991	157,652
Gross Unrealized Gains	177	1,306
Gross Unrealized Losses	(3,690)	(252)
Fair Value	160,478	158,706
Residential Mortgage-Backed Securities [Member]
Securities Available for Sale [Abstract]
Amortized Cost	120,195	124,578
Gross Unrealized Gains	2	98
Gross Unrealized Losses	(2,086)	(1,593)
Fair Value	118,111	123,083
Residential Collateralized Mortgage Obligations [Member]
Securities Available for Sale [Abstract]
Amortized Cost	18,294	9,715
Gross Unrealized Gains	50	51
Gross Unrealized Losses	(180)	(80)
Fair Value	18,164	9,686
Commercial Mortgage Backed Securities [Member]
Securities Available for Sale [Abstract]
Amortized Cost	110,244	110,483
Gross Unrealized Gains	0	67
Gross Unrealized Losses	(4,303)	(2,388)
Fair Value	105,941	108,162
SBA Pools [Member]
Securities Available for Sale [Abstract]
Amortized Cost	554	560
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(15)	(15)
Fair Value	539	545
SBA Pools [Member]
Securities Held-to-maturity [Abstract]
Amortized Cost	7,824	7,854
Gross Unrecognized Gains	0	0
Gross Unrecognized Losses	(512)	(485)
Fair Value	$ 7,312	$ 7,369

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Investment Securities, Realized Net Gains (Losses) on Sale of Securities Available for Sale (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Realized net gains (losses) on sale of securities available for sale [Abstract]
Realized net gains or losses on sale and call of securities available for sale	$ 0	$ 0

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Investment Securities, Unrealized Loss Information for Investment Securities (Details) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2018 USD ($) Security	Mar. 31, 2017 USD ($)	Dec. 31, 2017 USD ($)
Investment Securities [Abstract]
Tax benefit (provision) related to net realized gains and losses on sale and call of securities available for sale	$ 0	$ 0
Securities Available for Sale [Abstract]
Less than 12 Months, Fair Value	238,198		$ 102,780
Less than 12 Months, Unrealized Losses	(5,096)		(786)
12 Months or Longer, Fair Value	210,358		217,444
12 Months or Longer, Unrealized Losses	(6,811)		(4,306)
Total, Fair Value	448,556		320,224
Total, Unrealized Losses	(11,907)		(5,092)
Schedule of Held-to-maturity Securities [Line Items]
Less than 12 Months, Fair Value	0		0
Less than 12 Months, Unrealized Losses	0		0
12 Months or Longer, Fair Value	7,312		7,369
12 Months or Longer, Unrealized Losses	(512)		(485)
Total, Fair Value	7,312		7,369
Total, Unrealized Losses	$ (512)		(485)
Number of securities - total | Security	156
Number of securities in unrealized loss position | Security	133
Unrealized losses on debt securities	$ 468,300
Percentage of aggregate depreciation of amortized cost basis	2.58%
Investment securities continuous unrealized loss position twelve months or longer, fair value	$ 225,000
Percentage of aggregate depreciation related to continuous unrealized loss position twelve months or longer	3.15%
U.S. Government Sponsored Agencies [Member]
Securities Available for Sale [Abstract]
Less than 12 Months, Fair Value	$ 48,412		49,070
Less than 12 Months, Unrealized Losses	(979)		(331)
12 Months or Longer, Fair Value	19,265		19,481
12 Months or Longer, Unrealized Losses	(654)		(433)
Total, Fair Value	67,677		68,551
Total, Unrealized Losses	(1,633)		(764)
State and Political Subdivisions [Member]
Securities Available for Sale [Abstract]
Less than 12 Months, Fair Value	115,741		23,217
Less than 12 Months, Unrealized Losses	(2,913)		(95)
12 Months or Longer, Fair Value	24,041		24,774
12 Months or Longer, Unrealized Losses	(777)		(157)
Total, Fair Value	139,782		47,991
Total, Unrealized Losses	(3,690)		(252)
Residential Mortgage-Backed Securities [Member]
Securities Available for Sale [Abstract]
Less than 12 Months, Fair Value	37,193		18,771
Less than 12 Months, Unrealized Losses	(512)		(199)
12 Months or Longer, Fair Value	82,865		88,100
12 Months or Longer, Unrealized Losses	(1,574)		(1,394)
Total, Fair Value	120,058		106,871
Total, Unrealized Losses	(2,086)		(1,593)
Residential Collateralized Mortgage Obligations [Member]
Securities Available for Sale [Abstract]
Less than 12 Months, Fair Value	12,521		4,761
Less than 12 Months, Unrealized Losses	(156)		(67)
12 Months or Longer, Fair Value	4,271		3,502
12 Months or Longer, Unrealized Losses	(24)		(13)
Total, Fair Value	16,792		8,263
Total, Unrealized Losses	(180)		(80)
Commercial Mortgage Backed Securities [Member]
Securities Available for Sale [Abstract]
Less than 12 Months, Fair Value	24,331		6,961
Less than 12 Months, Unrealized Losses	(536)		(94)
12 Months or Longer, Fair Value	79,377		81,042
12 Months or Longer, Unrealized Losses	(3,767)		(2,294)
Total, Fair Value	103,708		88,003
Total, Unrealized Losses	(4,303)		(2,388)
SBA pools [Member]
Securities Available for Sale [Abstract]
Less than 12 Months, Fair Value	0		0
Less than 12 Months, Unrealized Losses	0		0
12 Months or Longer, Fair Value	539		545
12 Months or Longer, Unrealized Losses	(15)		(15)
Total, Fair Value	539		545
Total, Unrealized Losses	(15)		(15)
SBA pools [Member]
Schedule of Held-to-maturity Securities [Line Items]
Less than 12 Months, Fair Value	0		0
Less than 12 Months, Unrealized Losses	0		0
12 Months or Longer, Fair Value	7,312		7,369
12 Months or Longer, Unrealized Losses	(512)		(485)
Total, Fair Value	7,312		7,369
Total, Unrealized Losses	$ (512)		$ (485)

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Investment Securities, Amortized Cost and Fair Value of Investment Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Available for Sale, Amortized Cost [Abstract]
One year or less	$ 201
One to five years	65,540
Five to ten years	6,578
Over ten years	161,536
Subtotal	233,855
Amortized cost	482,588
Available for Sale, Fair Value [Abstract]
One year or less	200
One to five years	64,008
Five to ten years	6,487
Over ten years	157,999
Subtotal	228,694
Fair value	470,910
Held to Maturity, Amortized Cost [Abstract]
One year or less	0
One to five years	0
Five to ten years	0
Over ten years	7,824
Subtotal	7,824
Amortized Cost	7,824	$ 7,854
Held to Maturity, Fair Value [Abstract]
One year or less	0
One to five years	0
Five to ten years	0
Over ten years	7,312
Subtotal	7,312
Fair value	7,312	7,369
Securities pledged as collateral on public deposits and for other purposes as required or permitted by law	83,800	$ 87,400
Residential Mortgage-Backed Securities [Member]
Available for Sale, Amortized Cost [Abstract]
Amortized cost	120,195
Available for Sale, Fair Value [Abstract]
Fair value	118,111
Residential Collateralized Mortgage Obligations [Member]
Available for Sale, Amortized Cost [Abstract]
Amortized cost	18,294
Available for Sale, Fair Value [Abstract]
Fair value	18,164
Commercial Mortgage Backed Securities [Member]
Available for Sale, Amortized Cost [Abstract]
Amortized cost	110,244
Available for Sale, Fair Value [Abstract]
Fair value	105,941
Residential Mortgage-Backed Securities [Member]
Held to Maturity, Amortized Cost [Abstract]
Amortized Cost	0
Held to Maturity, Fair Value [Abstract]
Fair value	0
Residential Collateralized Mortgage Obligations [Member]
Held to Maturity, Amortized Cost [Abstract]
Amortized Cost	0
Held to Maturity, Fair Value [Abstract]
Fair value	$ 0

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Loans and Allowance for Loan Losses (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Components of loans receivables [Abstract]
Total loans	$ 706,159	$ 701,007
Unearned income	(813)	(863)
Gross loans	705,346	700,144
Allowance for loan losses	(11,238)	(13,803)
Net loans	$ 694,108	686,341
Percentage of outstanding principal balance of commercial real estate loans secured by owner occupied properties	25.20%
Commercial [Member]
Components of loans receivables [Abstract]
Total loans	$ 67,557	61,388
Commercial Real Estate [Member]
Components of loans receivables [Abstract]
Total loans	384,247	378,802
Residential Real Estate [Member]
Components of loans receivables [Abstract]
Total loans	169,559	178,296
Construction Real Estate [Member]
Components of loans receivables [Abstract]
Total loans	68,002	63,569
Installment and Other [Member]
Components of loans receivables [Abstract]
Total loans	$ 16,794	$ 18,952

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Loans and Allowance for Loan Losses, Loan Classification (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Current	$ 695,456	$ 683,727
Nonaccrual loan classification, Current	4,729	3,858
Total Past Due	10,703	17,280
Nonaccrual loan classification, Total Past Due	7,896	13,482
Total loans	706,159	701,007
Nonaccrual	12,625	17,340
Loans past due 90 days or more still accruing interest	0	0
30-59 Days Past Due [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Total Past Due	3,291	8,065
Nonaccrual loan classification, Total Past Due	484	5,859
60-89 Days Past Due [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Total Past Due	412	1,630
Nonaccrual loan classification, Total Past Due	412	38
90 Days or More Past Due [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Total Past Due	7,000	7,585
Nonaccrual loan classification, Total Past Due	7,000	7,585
Commercial [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Current	67,214	59,703
Total Past Due	343	1,685
Total loans	67,557	61,388
Nonaccrual	58	102
Loans past due 90 days or more still accruing interest	0	0
Commercial [Member] | 30-59 Days Past Due [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Total Past Due	318	173
Commercial [Member] | 60-89 Days Past Due [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Total Past Due	25	1,475
Commercial [Member] | 90 Days or More Past Due [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Total Past Due	0	37
Commercial Real Estate [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Current	380,993	371,640
Total Past Due	3,254	7,162
Total loans	384,247	378,802
Nonaccrual	5,056	8,617
Loans past due 90 days or more still accruing interest	0	0
Commercial Real Estate [Member] | 30-59 Days Past Due [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Total Past Due	1,292	5,490
Commercial Real Estate [Member] | 60-89 Days Past Due [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Total Past Due	0	0
Commercial Real Estate [Member] | 90 Days or More Past Due [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Total Past Due	1,962	1,672
Residential Real Estate [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Current	166,462	174,388
Total Past Due	3,097	3,908
Total loans	169,559	178,296
Nonaccrual	3,774	4,599
Loans past due 90 days or more still accruing interest	0	0
Residential Real Estate [Member] | 30-59 Days Past Due [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Total Past Due	1,314	1,899
Residential Real Estate [Member] | 60-89 Days Past Due [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Total Past Due	387	0
Residential Real Estate [Member] | 90 Days or More Past Due [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Total Past Due	1,396	2,009
Construction Real Estate [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Current	64,114	59,291
Total Past Due	3,888	4,278
Total loans	68,002	63,569
Nonaccrual	3,645	3,911
Loans past due 90 days or more still accruing interest	0	0
Construction Real Estate [Member] | 30-59 Days Past Due [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Total Past Due	338	423
Construction Real Estate [Member] | 60-89 Days Past Due [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Total Past Due	0	74
Construction Real Estate [Member] | 90 Days or More Past Due [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Total Past Due	3,550	3,781
Installment and Other [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Current	16,673	18,705
Total Past Due	121	247
Total loans	16,794	18,952
Nonaccrual	92	111
Loans past due 90 days or more still accruing interest	0	0
Installment and Other [Member] | 30-59 Days Past Due [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Total Past Due	29	80
Installment and Other [Member] | 60-89 Days Past Due [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Total Past Due	0	81
Installment and Other [Member] | 90 Days or More Past Due [Member]
Contractual aging of the recorded investment in current and past due loans by class of loans [Abstract]
Total Past Due	$ 92	$ 86

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Loans and Allowance for Loan Losses, Risk Category by Class of Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Risk category of loans by class of loans [Abstract]
Total loans	$ 706,159	$ 701,007
Current	695,456	683,727
Past due	10,703	17,280
Nonaccrual	12,625	17,340
30-59 Days Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	3,291	8,065
60-89 Days Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	412	1,630
90 Days or More Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	7,000	7,585
Pass [Member]
Risk category of loans by class of loans [Abstract]
Total loans	676,303	665,822
Current	673,557	662,445
Pass [Member] | 30-59 Days Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	2,746	1,785
Pass [Member] | 60-89 Days Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	0	1,592
Pass [Member] | 90 Days or More Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	0	0
Special Mention [Member]
Risk category of loans by class of loans [Abstract]
Total loans	5,630	5,681
Current	5,630	5,681
Special Mention [Member] | 30-59 Days Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	0	0
Special Mention [Member] | 60-89 Days Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	0	0
Special Mention [Member] | 90 Days or More Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	0	0
Substandard [Member]
Risk category of loans by class of loans [Abstract]
Total loans	24,226	29,504
Current	16,269	15,601
Nonaccrual	12,600	17,300
Substandard [Member] | 30-59 Days Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	545	6,280
Substandard [Member] | 60-89 Days Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	412	38
Substandard [Member] | 90 Days or More Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	7,000	7,585
Doubtful [Member]
Risk category of loans by class of loans [Abstract]
Total loans	0	0
Current	0	0
Doubtful [Member] | 30-59 Days Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	0	0
Doubtful [Member] | 60-89 Days Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	0	0
Doubtful [Member] | 90 Days or More Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	0	0
Commercial [Member]
Risk category of loans by class of loans [Abstract]
Total loans	67,557	61,388
Current	67,214	59,703
Past due	343	1,685
Nonaccrual	58	102
Commercial [Member] | 30-59 Days Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	318	173
Commercial [Member] | 60-89 Days Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	25	1,475
Commercial [Member] | 90 Days or More Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	0	37
Commercial [Member] | Pass [Member]
Risk category of loans by class of loans [Abstract]
Total loans	64,757	58,769
Commercial [Member] | Special Mention [Member]
Risk category of loans by class of loans [Abstract]
Total loans	225	2
Commercial [Member] | Substandard [Member]
Risk category of loans by class of loans [Abstract]
Total loans	2,575	2,617
Commercial [Member] | Doubtful [Member]
Risk category of loans by class of loans [Abstract]
Total loans	0	0
Commercial Real Estate [Member]
Risk category of loans by class of loans [Abstract]
Total loans	384,247	378,802
Current	380,993	371,640
Past due	3,254	7,162
Nonaccrual	5,056	8,617
Commercial Real Estate [Member] | 30-59 Days Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	1,292	5,490
Commercial Real Estate [Member] | 60-89 Days Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	0	0
Commercial Real Estate [Member] | 90 Days or More Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	1,962	1,672
Commercial Real Estate [Member] | Pass [Member]
Risk category of loans by class of loans [Abstract]
Total loans	369,163	359,768
Commercial Real Estate [Member] | Special Mention [Member]
Risk category of loans by class of loans [Abstract]
Total loans	4,507	4,762
Commercial Real Estate [Member] | Substandard [Member]
Risk category of loans by class of loans [Abstract]
Total loans	10,577	14,272
Commercial Real Estate [Member] | Doubtful [Member]
Risk category of loans by class of loans [Abstract]
Total loans	0	0
Residential Real Estate [Member]
Risk category of loans by class of loans [Abstract]
Total loans	169,559	178,296
Current	166,462	174,388
Past due	3,097	3,908
Nonaccrual	3,774	4,599
Residential Real Estate [Member] | 30-59 Days Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	1,314	1,899
Residential Real Estate [Member] | 60-89 Days Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	387	0
Residential Real Estate [Member] | 90 Days or More Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	1,396	2,009
Residential Real Estate [Member] | Pass [Member]
Risk category of loans by class of loans [Abstract]
Total loans	164,280	172,101
Residential Real Estate [Member] | Special Mention [Member]
Risk category of loans by class of loans [Abstract]
Total loans	0	0
Residential Real Estate [Member] | Substandard [Member]
Risk category of loans by class of loans [Abstract]
Total loans	5,279	6,195
Residential Real Estate [Member] | Doubtful [Member]
Risk category of loans by class of loans [Abstract]
Total loans	0	0
Construction Real Estate [Member]
Risk category of loans by class of loans [Abstract]
Total loans	68,002	63,569
Current	64,114	59,291
Past due	3,888	4,278
Nonaccrual	3,645	3,911
Construction Real Estate [Member] | 30-59 Days Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	338	423
Construction Real Estate [Member] | 60-89 Days Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	0	74
Construction Real Estate [Member] | 90 Days or More Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	3,550	3,781
Construction Real Estate [Member] | Pass [Member]
Risk category of loans by class of loans [Abstract]
Total loans	61,717	56,661
Construction Real Estate [Member] | Special Mention [Member]
Risk category of loans by class of loans [Abstract]
Total loans	898	917
Construction Real Estate [Member] | Substandard [Member]
Risk category of loans by class of loans [Abstract]
Total loans	5,387	5,991
Construction Real Estate [Member] | Doubtful [Member]
Risk category of loans by class of loans [Abstract]
Total loans	0	0
Installment and Other [Member]
Risk category of loans by class of loans [Abstract]
Total loans	16,794	18,952
Current	16,673	18,705
Past due	121	247
Nonaccrual	92	111
Installment and Other [Member] | 30-59 Days Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	29	80
Installment and Other [Member] | 60-89 Days Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	0	81
Installment and Other [Member] | 90 Days or More Past Due [Member]
Risk category of loans by class of loans [Abstract]
Past due	92	86
Installment and Other [Member] | Pass [Member]
Risk category of loans by class of loans [Abstract]
Total loans	16,386	18,523
Installment and Other [Member] | Special Mention [Member]
Risk category of loans by class of loans [Abstract]
Total loans	0	0
Installment and Other [Member] | Substandard [Member]
Risk category of loans by class of loans [Abstract]
Total loans	408	429
Installment and Other [Member] | Doubtful [Member]
Risk category of loans by class of loans [Abstract]
Total loans	$ 0	$ 0

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Loans and Allowance for Loan Losses, Impairment by Class of Loans (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Unpaid Principal Balance [Abstract]
Total	$ 50,866,000		$ 53,485,000
Recorded Investment [Abstract]
Total	45,731,000		51,141,000
Allowance for Loan Losses Allocated [Abstract]
With an allowance recorded	2,563,000		5,152,000
Average Recorded Investment [Abstract]
Total	48,436,000	$ 52,018,000
Interest Income Recognized [Abstract]
Total	417,000	514,000
Troubled debt restructuring, recorded investment	39,900,000		38,900,000
Loan interest income	188,300	211,400
Commercial [Member]
Unpaid Principal Balance [Abstract]
With no related allowance recorded	99,000		184,000
With an allowance recorded	13,267,000		13,361,000
Recorded Investment [Abstract]
With no related allowance recorded	96,000		182,000
With an allowance recorded	13,266,000		13,359,000
Allowance for Loan Losses Allocated [Abstract]
With an allowance recorded	243,000		211,000
Average Recorded Investment [Abstract]
With no related allowance recorded	139,000	1,989,000
With allowance recorded	13,313,000	13,935,000
Interest Income Recognized [Abstract]
With no related allowance recorded	1,000	14,000
With an allowance recorded	187,000	186,000
Commercial Real Estate [Member]
Unpaid Principal Balance [Abstract]
With no related allowance recorded	8,014,000		4,294,000
With an allowance recorded	6,474,000		10,987,000
Recorded Investment [Abstract]
With no related allowance recorded	5,056,000		4,154,000
With an allowance recorded	6,474,000		10,987,000
Allowance for Loan Losses Allocated [Abstract]
With an allowance recorded	1,199,000		3,735,000
Average Recorded Investment [Abstract]
With no related allowance recorded	4,605,000	5,035,000
With allowance recorded	8,730,000	6,353,000
Interest Income Recognized [Abstract]
With no related allowance recorded	0	10,000
With an allowance recorded	70,000	67,000
Residential Real Estate [Member]
Unpaid Principal Balance [Abstract]
With no related allowance recorded	5,809,000		6,585,000
With an allowance recorded	6,641,000		6,774,000
Recorded Investment [Abstract]
With no related allowance recorded	5,012,000		5,808,000
With an allowance recorded	6,641,000		6,774,000
Allowance for Loan Losses Allocated [Abstract]
With an allowance recorded	857,000		943,000
Average Recorded Investment [Abstract]
With no related allowance recorded	5,410,000	4,459,000
With allowance recorded	6,708,000	8,343,000
Interest Income Recognized [Abstract]
With no related allowance recorded	15,000	22,000
With an allowance recorded	75,000	81,000
Construction Real Estate [Member]
Unpaid Principal Balance [Abstract]
With no related allowance recorded	6,804,000		7,471,000
With an allowance recorded	3,206,000		3,244,000
Recorded Investment [Abstract]
With no related allowance recorded	5,429,000		6,049,000
With an allowance recorded	3,206,000		3,244,000
Allowance for Loan Losses Allocated [Abstract]
With an allowance recorded	227,000		231,000
Average Recorded Investment [Abstract]
With no related allowance recorded	5,739,000	6,982,000
With allowance recorded	3,225,000	4,209,000
Interest Income Recognized [Abstract]
With no related allowance recorded	22,000	88,000
With an allowance recorded	42,000	40,000
Installment and Other [Member]
Unpaid Principal Balance [Abstract]
With no related allowance recorded	309,000		349,000
With an allowance recorded	243,000		236,000
Recorded Investment [Abstract]
With no related allowance recorded	308,000		348,000
With an allowance recorded	243,000		236,000
Allowance for Loan Losses Allocated [Abstract]
With an allowance recorded	37,000		$ 32,000
Average Recorded Investment [Abstract]
With no related allowance recorded	328,000	308,000
With allowance recorded	239,000	405,000
Interest Income Recognized [Abstract]
With no related allowance recorded	3,000	3,000
With an allowance recorded	$ 2,000	$ 3,000

XML

Loans and Allowance for Loan Losses, Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2018	Dec. 31, 2017
Activity in the allowance for loan losses [Roll Forward]
Beginning balance	$ 13,803	$ 14,352
Provision (benefit) for loan losses	220	30
Charge-offs	(2,990)	(583)
Recoveries	205	388
Net charge-offs	(2,785)	(195)
Ending balance	11,238	14,187
Allowance for loan losses allocated to [Abstract]
Loans individually evaluated for impairment			$ 2,563	$ 5,152
Loans collectively evaluated for impairment			8,675	8,651
Ending balance	13,803	14,352	11,238	13,803
Loans [Abstract]
Individually evaluated for impairment			45,731	51,141
Collectively evaluated for impairment			660,428	649,866
Total ending loans balance			706,159	701,007
Commercial [Member]
Activity in the allowance for loan losses [Roll Forward]
Beginning balance	536	1,449
Provision (benefit) for loan losses	46	320
Charge-offs	(9)	(186)
Recoveries	24	173
Net charge-offs	15	(13)
Ending balance	597	1,756
Allowance for loan losses allocated to [Abstract]
Loans individually evaluated for impairment			243	211
Loans collectively evaluated for impairment			354	325
Ending balance	536	1,449	597	536
Loans [Abstract]
Individually evaluated for impairment			13,362	13,541
Collectively evaluated for impairment			54,195	47,847
Total ending loans balance			67,557	61,388
Commercial Real Estate [Member]
Activity in the allowance for loan losses [Roll Forward]
Beginning balance	8,573	6,472
Provision (benefit) for loan losses	1,046	13
Charge-offs	(2,736)	0
Recoveries	22	88
Net charge-offs	(2,714)	88
Ending balance	6,905	6,573
Allowance for loan losses allocated to [Abstract]
Loans individually evaluated for impairment			1,199	3,735
Loans collectively evaluated for impairment			5,706	4,838
Ending balance	8,573	6,472	6,905	8,573
Loans [Abstract]
Individually evaluated for impairment			11,530	15,141
Collectively evaluated for impairment			372,717	363,661
Total ending loans balance			384,247	378,802
Residential Real Estate [Member]
Activity in the allowance for loan losses [Roll Forward]
Beginning balance	2,843	4,524
Provision (benefit) for loan losses	(323)	(209)
Charge-offs	(105)	(244)
Recoveries	47	55
Net charge-offs	(58)	(189)
Ending balance	2,462	4,126
Allowance for loan losses allocated to [Abstract]
Loans individually evaluated for impairment			857	943
Loans collectively evaluated for impairment			1,605	1,900
Ending balance	2,843	4,524	2,462	2,843
Loans [Abstract]
Individually evaluated for impairment			11,653	12,582
Collectively evaluated for impairment			157,906	165,714
Total ending loans balance			169,559	178,296
Construction Real Estate [Member]
Activity in the allowance for loan losses [Roll Forward]
Beginning balance	1,030	1,119
Provision (benefit) for loan losses	(53)	(27)
Charge-offs	(112)	(16)
Recoveries	49	10
Net charge-offs	(63)	(6)
Ending balance	914	1,086
Allowance for loan losses allocated to [Abstract]
Loans individually evaluated for impairment			227	231
Loans collectively evaluated for impairment			687	799
Ending balance	1,030	1,119	914	1,030
Loans [Abstract]
Individually evaluated for impairment			8,635	9,293
Collectively evaluated for impairment			59,367	54,276
Total ending loans balance			68,002	63,569
Installment and Other [Member]
Activity in the allowance for loan losses [Roll Forward]
Beginning balance	315	715
Provision (benefit) for loan losses	(95)	4
Charge-offs	(28)	(137)
Recoveries	63	62
Net charge-offs	35	(75)
Ending balance	255	644
Allowance for loan losses allocated to [Abstract]
Loans individually evaluated for impairment			37	32
Loans collectively evaluated for impairment			218	283
Ending balance	315	715	255	315
Loans [Abstract]
Individually evaluated for impairment			551	584
Collectively evaluated for impairment			16,243	18,368
Total ending loans balance			16,794	18,952
Unallocated [Member]
Activity in the allowance for loan losses [Roll Forward]
Beginning balance	506	73
Provision (benefit) for loan losses	(401)	(71)
Charge-offs	0	0
Recoveries	0	0
Net charge-offs	0	0
Ending balance	105	2
Allowance for loan losses allocated to [Abstract]
Loans individually evaluated for impairment			0	0
Loans collectively evaluated for impairment			105	506
Ending balance	$ 506	$ 73	105	506
Loans [Abstract]
Individually evaluated for impairment			0	0
Collectively evaluated for impairment			0	0
Total ending loans balance			$ 0	$ 0

XML

Loans and Allowance for Loan Losses, Troubled Debt Restructurings (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2018 USD ($) Contract	Mar. 31, 2017 USD ($) Contract	Dec. 31, 2017 USD ($) Contract
TDRs on financing receivables [Abstract]
Number of Contracts | Contract	3	1
Pre-Modification Outstanding Recorded Investment	$ 2,527,000	$ 10,000
Post-Modification Outstanding Recorded Investment	2,527,000	10,000
Specific reserves allocated	$ 1,000	$ 0
TDRs, subsequent default [Abstract]
Number of Contracts | Contract	1	1
Pre-Modification Outstanding Recorded Investment	$ 25,000	$ 61,000
Specific reserves allocated	$ 25,000	0
Number of Contracts [Abstract]
Accrual | Contract	104		108
Nonaccrual | Contract	17		19
Total TDRs | Contract	121		127
Amount [Abstract]
Accrual	$ 32,934,000		$ 33,801,000
Nonaccrual	6,844,000		5,146,000
Total TDRs	39,778,000		38,947,000
TDRs requiring a specific reserve	1,000	0
TDR charge-offs	147,000	20,000
Troubled debt restructuring, subsequently defaulted, Provision to the allowance for loan losses	25,000	$ 0
Specific reserves on TDRs	2,600,000		$ 2,400,000
Commitments to lend additional funds	$ 2,100
Commercial [Member]
TDRs on financing receivables [Abstract]
Number of Contracts | Contract	1
Pre-Modification Outstanding Recorded Investment	$ 171,000
Post-Modification Outstanding Recorded Investment	171,000
Specific reserves allocated	$ 1,000
TDRs, subsequent default [Abstract]
Number of Contracts | Contract	1
Pre-Modification Outstanding Recorded Investment	$ 25,000
Specific reserves allocated	$ 25,000
Construction Real Estate [Member]
TDRs on financing receivables [Abstract]
Number of Contracts | Contract		1
TDRs, subsequent default [Abstract]
Number of Contracts | Contract		1
Pre-Modification Outstanding Recorded Investment		$ 61,000
Specific reserves allocated		0
Commercial Real Estate [Member]
TDRs on financing receivables [Abstract]
Number of Contracts | Contract	2
Pre-Modification Outstanding Recorded Investment	$ 2,356,000	10,000
Post-Modification Outstanding Recorded Investment	2,356,000	10,000
Specific reserves allocated	$ 0	$ 0

XML

Loans and Allowance for Loan Losses, Activity Related to Loans (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Loans and Allowance for Loan Losses [Abstract]
Loans outstanding to executive officers and directors	$ 300,600	$ 324,400
Analysis of the activity related to loans [Roll Forward]
Balance, beginning	198,000	348,000
Additions	0	13,000
Changes in Board composition	0	(76,000)
Principal payments and other reductions	(24,000)	(87,000)
Balance, ending	$ 174,000	$ 198,000

XML

Loan Servicing and Mortgage Servicing Rights ("MSRs") (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2018	Dec. 31, 2017
Loan Servicing and Mortgage Servicing Rights ("MSRs") [Abstract]
Contractual servicing fee	0.25%
Late fees on loans serviced for others	$ 18
Custodial balances on deposit at the Bank in connection with the foregoing loan servicing		$ 0	$ 4,200
Custodial balances on deposit with other financial institutions with the foregoing loan servicing		$ 0	$ 0

XML

Other Real Estate Owned ("OREO") (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
Real Estate [Line Items]
Other real estate owned	$ 6,449	$ 6,432	$ 7,991	$ 8,436
Commercial Real Estate [Member]
Real Estate [Line Items]
Other real estate owned	1,649	1,667
Residential Real Estate [Member]
Real Estate [Line Items]
Other real estate owned	1,051	886
Construction Real Estate [Member]
Real Estate [Line Items]
Other real estate owned	$ 3,749	$ 3,879

XML

Other Real Estate Owned ("OREO"), Rollforward (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Other Real Estate [Roll Forward]
Balance at beginning of period	$ 6,432	$ 8,436
Transfers in at fair value	473	433
Capitalized improvements	32	0
Write-down of value	(18)	(82)
Gain on disposal	39	321
Cash received upon disposition	(509)	(1,117)
Sales financed by loans	0	0
Balance at end of period	$ 6,449	$ 7,991

XML

Deposits (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Deposits [Abstract]
Demand deposits, noninterest bearing	$ 163,134	$ 161,677
NOW and money market accounts	428,436	404,225
Savings deposits	388,901	388,300
Time certificates, $250,000 or more	21,339	21,639
Other time certificates	142,284	151,506
Total deposits	1,144,094	1,127,347
Deposits from executive officers, directors and their affiliates	$ 1,800	$ 2,200

XML

Borrowings (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Line of Credit Facility [Line Items]
Loans pledged under blanket assignment	$ 328,600
Investment securities held in safekeeping by FHLB	76,100
Investment securities pledged as collateral	2,300
Advances available based on remaining unpledged investment securities	402,400
Fixed rate advances on borrowings [Abstract]
Long-term borrowings	2,300	$ 2,300
Short-term Borrowings [Member]
Line of Credit Facility [Line Items]
Amount of maximum borrowing capacity	$ 20,000
Minimum [Member]
Line of Credit Facility [Line Items]
Short-term borrowings period	15 days
Maximum [Member]
Line of Credit Facility [Line Items]
Short-term borrowings period	60 days
Federal Home Loan Bank Advances 6.343 % [Member]
Fixed rate advances on borrowings [Abstract]
Maturity Date	Apr. 27, 2021
Rate	6.343%
Type	Fixed
Principal due	At maturity
Long-term borrowings	$ 2,300	$ 2,300

XML

Junior Subordinated Debt (Details)		3 Months Ended
	Mar. 08, 2018 USD ($)	Mar. 31, 2018 USD ($) Payment	Mar. 31, 2017 USD ($)	Dec. 31, 2017 USD ($)
Variable Interest Entity [Line Items]
Junior subordinated deferrable interest debentures owed		$ 26,764,000		$ 36,941,000
Noninterest Expense		$ 9,813,000	$ 13,916,000
Number of semi annual payments entity has right to defer | Payment		10
Number of quarterly payments entity has right to defer | Payment		20
Trust Preferred Securities [Member]
Variable Interest Entity [Line Items]
Accrued interest and unpaid		$ 110,700		$ 456,000
Trust I [Member]
Variable Interest Entity [Line Items]
Date of Issue		Mar. 23, 2000
Amount of trust preferred securities issued		$ 10,000,000
Rate on trust preferred securities	10.875%	10.875%
Maturity		Mar. 08, 2030
Date of first redemption		Mar. 08, 2010
Common equity securities issued		$ 310,000
Junior subordinated deferrable interest debentures owed		$ 0
Rate on junior subordinated deferrable interest debentures, fixed		10.875%
Consummated early redemption of principal amount	$ 10,300,000
Redemption rate	101.088%
Redemption price	$ 11,000,000
Noninterest Expense	$ 131,000
Trust III [Member]
Variable Interest Entity [Line Items]
Date of Issue		May 11, 2004
Amount of trust preferred securities issued		$ 6,000,000
Variable rate on trust preferred securities		4.70625%
Maturity		Sep. 08, 2034
Date of first redemption		Sep. 08, 2009
Common equity securities issued		$ 186,000
Junior subordinated deferrable interest debentures owed		$ 6,186,000
Rate on junior subordinated deferrable interest debentures, variable		4.70625%
Trust IV [Member]
Variable Interest Entity [Line Items]
Date of Issue		Jun. 29, 2005
Amount of trust preferred securities issued		$ 10,000,000
Rate on trust preferred securities		6.88%
Maturity		Nov. 23, 2035
Date of first redemption		Aug. 23, 2010
Common equity securities issued		$ 310,000
Junior subordinated deferrable interest debentures owed		$ 10,310,000
Rate on junior subordinated deferrable interest debentures, fixed		6.88%
Trust V [Member]
Variable Interest Entity [Line Items]
Date of Issue		Sep. 21, 2006
Amount of trust preferred securities issued		$ 10,000,000
Variable rate on trust preferred securities		3.7745%
Maturity		Dec. 15, 2036
Date of first redemption		Sep. 15, 2011
Common equity securities issued		$ 310,000
Junior subordinated deferrable interest debentures owed		$ 10,310,000
Rate on junior subordinated deferrable interest debentures, variable		3.7745%

XML

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Effective Income Tax Rate Reconciliation, Amount [Abstract]
Federal statutory tax rate	$ 396	$ (238)
State income tax, net of federal benefit	61	155
Net tax exempt interest income	(211)	(91)
Other, net	(53)	(40)
Tax provision (benefit) before change in valuation allowance	193	(214)
Change in valuation allowance	0	0
Provision (benefit) for income taxes	$ 193	$ (214)
Effective Income Tax Rate Reconciliation, Percent [Abstract]
Federal statutory tax rate	21.00%	34.00%
State income tax, net of federal benefit	3.23%	(22.22%)
Net tax exempt interest income	(11.18%)	13.08%
Other, net	(2.81%)	5.68%
Tax provision (benefit) before change in valuation allowance	10.24%	30.54%
Change in valuation allowance	0.00%	0.00%
Provision (benefit) for income taxes	10.24%	30.54%
Deferred tax assets, valuation allowance	$ 2,500		$ 2,500
Federal [Member]
Operating Loss Carryforwards [Line Items]
Business tax credits, expire unused			1,700
State [Member]
Operating Loss Carryforwards [Line Items]
Business tax credits, expire unused			$ 645

XML

Commitments and Off-Balance-Sheet Activities (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Fixed And Adjustable Rate Loans [Abstract]
Fixed rate	$ 16,878	$ 17,933
Adjustable rate	121,561	110,354
Total	138,439	128,287
FHLB, collateral amount	$ 404,700
Term of letter of credit	1 year
Potential obligations under credit-related commitments	$ 575	575
Minimum [Member]
Fixed And Adjustable Rate Loans [Abstract]
Fixed interest rate	0.00%
Maximum [Member]
Fixed And Adjustable Rate Loans [Abstract]
Fixed interest rate	6.50%
Term of derivatives maturities	8 years
Unfunded Commitments under Lines of Credit [Member]
Loss Contingencies [Line Items]
Credit-related commitments	$ 133,162	122,910
Commercial and Standby Letters of Credit [Member]
Loss Contingencies [Line Items]
Credit-related commitments	5,277	5,377
Fixed And Adjustable Rate Loans [Abstract]
Fees collected on grants of letters of credit	24	23
Commitments to Make Loans [Member]
Loss Contingencies [Line Items]
Credit-related commitments	$ 15,444	$ 1,909

XML

Preferred Equity Issues (Details) - shares	Mar. 31, 2018	Dec. 31, 2017
Preferred Equity Issues [Abstract]
Preferred shares, outstanding (in shares)	0	0

XML

Stock Incentives (Details) - 2015 Plan [Member] - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended		12 Months Ended
	Feb. 28, 2018	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares issuable (in shares)		297,902		30,477
Additional number of share authorized to issue (in shares)	500,000
Additional Disclosures [Abstract]
Share-based compensation expense		$ 217,000	$ 16,000
Unrecognized compensation cost		$ 3,400
RSUs [Member]
Summary of changes in RSUs and performance-based RSUs [Roll Forward]
Nonvested, beginning balance (in shares)		452,782
Granted (in shares)		239,075
Vested (in shares)		(13,925)
Forfeited or expired (in shares)		(6,500)
Nonvested, ending balance (in shares)		671,432		452,782
Weighted-Average Grant Price [Roll Forward]
Outstanding, Beginning Balance (in dollars per share)		$ 4.70
Granted (in dollars per share)		7.58
Vested (in dollars per share)		4.00
Forfeited or expired (in dollars per share)		4.75
Outstanding, Ending Balance (in dollars per share)		$ 5.74		$ 4.70
Weighted-Average Remaining Contractual Term [Abstract]
Outstanding		1 year 7 months 28 days		2 years 4 days
Granted		1 year 9 months 18 days
Vested		0 years
Forfeited or expired		0 years
Aggregate Intrinsic Value [Abstract]
Outstanding, Beginning Balance		$ 2,130
Granted		1,812
Vested		(56)
Forfeitures or expired		(31)
Outstanding, Ending Balance		$ 3,855		$ 2,130

XML

Fair Value Measurements (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Investment securities available for sale [Abstract]
Fair value, Liabilities, Level 2 to Level 1 transfers	$ 0	$ 0
Fair value, Assets, Level 1 to Level 2 transfers	0	0
Fair value, Assets, Level 2 to Level 1 transfers	0	0
Fair value, Liabilities, Level 1 to Level 2 transfers	0	0
Carrying value of impaired loans	29,800	39,800
Impaired loans, valuation allowance	2,600	5,200
Write-down of OREO	19	43
Financial Assets [Abstract]
Impaired loans	45,731	51,141
Recurring [Member]
Investment securities available for sale [Abstract]
U.S. Government sponsored agencies	67,677	68,551
States and political subdivision	160,478	158,706
Residential mortgage backed securities	118,111	123,083
Residential collateralized mortgage obligation	18,164	9,686
Commercial mortgage backed securities	105,941	108,162
SBA pools	539	545
Total	470,910	468,733
Recurring [Member] | Level 1 [Member]
Investment securities available for sale [Abstract]
U.S. Government sponsored agencies	0	0
States and political subdivision	0	0
Residential mortgage backed securities	0	0
Residential collateralized mortgage obligation	0	0
Commercial mortgage backed securities	0	0
SBA pools	0	0
Total	0	0
Recurring [Member] | Level 2 [Member]
Investment securities available for sale [Abstract]
U.S. Government sponsored agencies	67,677	68,551
States and political subdivision	160,478	158,706
Residential mortgage backed securities	118,111	123,083
Residential collateralized mortgage obligation	18,164	9,686
Commercial mortgage backed securities	105,941	108,162
SBA pools	539	545
Total	470,910	468,733
Recurring [Member] | Level 3 [Member]
Investment securities available for sale [Abstract]
U.S. Government sponsored agencies	0	0
States and political subdivision	0	0
Residential mortgage backed securities	0	0
Residential collateralized mortgage obligation	0	0
Commercial mortgage backed securities	0	0
SBA pools	0	0
Total	0	0
Nonrecurring [Member]
Financial Assets [Abstract]
Impaired loans	27,267	34,600
Non-Financial Assets [Abstract]
OREO	93	405
Nonrecurring [Member] | Level 1 [Member]
Financial Assets [Abstract]
Impaired loans	0	0
Non-Financial Assets [Abstract]
OREO	0	0
Nonrecurring [Member] | Level 2 [Member]
Financial Assets [Abstract]
Impaired loans	0	0
Non-Financial Assets [Abstract]
OREO	0	0
Nonrecurring [Member] | Level 3 [Member]
Financial Assets [Abstract]
Impaired loans	27,267	34,600
Non-Financial Assets [Abstract]
OREO	$ 93	$ 405

XML

Fair Value Measurements, Assets, Quantitative Information (Details) - Nonrecurring [Member] - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Impaired Loans Commercial [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair value	$ 13,023	$ 13,359
Impaired Loans Commercial Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair value	5,275	10,987
Impaired Loans Residential Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair value	5,784	6,774
Impaired Loans Construction Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair value	2,979	3,244
Impaired Loans Installment and Other [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair value	206	236
Impaired Loans [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair value	27,267	34,600
Other Real Estate Owned Commercial Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair value	93
Other Real Estate Owned Residential Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair value		315
Other Real Estate Owned Construction Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair value		90
Other Real Estate Owned [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair value	$ 93	$ 405
Sales Comparison [Member] | Minimum [Member] | Impaired Loans Commercial [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches	5.70%	5.00%
Sales Comparison [Member] | Minimum [Member] | Impaired Loans Commercial Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches	4.25%	4.25%
Sales Comparison [Member] | Minimum [Member] | Impaired Loans Residential Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches	3.13%	3.13%
Sales Comparison [Member] | Minimum [Member] | Impaired Loans Construction Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches	4.00%	4.00%
Sales Comparison [Member] | Minimum [Member] | Impaired Loans Installment and Other [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches	4.25%	4.25%
Sales Comparison [Member] | Minimum [Member] | Other Real Estate Owned Commercial Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches	16.67%
Sales Comparison [Member] | Minimum [Member] | Other Real Estate Owned Residential Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches		9.09%
Sales Comparison [Member] | Minimum [Member] | Other Real Estate Owned Construction Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches		9.78%
Sales Comparison [Member] | Maximum [Member] | Impaired Loans Commercial [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches	150.00%	100.00%
Sales Comparison [Member] | Maximum [Member] | Impaired Loans Commercial Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches	7.62%	7.62%
Sales Comparison [Member] | Maximum [Member] | Impaired Loans Residential Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches	7.50%	7.80%
Sales Comparison [Member] | Maximum [Member] | Impaired Loans Construction Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches	7.25%	7.25%
Sales Comparison [Member] | Maximum [Member] | Impaired Loans Installment and Other [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches	8.00%	8.00%
Sales Comparison [Member] | Maximum [Member] | Other Real Estate Owned Commercial Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches	16.67%
Sales Comparison [Member] | Maximum [Member] | Other Real Estate Owned Residential Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches		9.09%
Sales Comparison [Member] | Maximum [Member] | Other Real Estate Owned Construction Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches		9.78%
Sales Comparison [Member] | Weighted Average [Member] | Impaired Loans Commercial [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches	6.07%	5.97%
Sales Comparison [Member] | Weighted Average [Member] | Impaired Loans Commercial Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches	6.07%	6.63%
Sales Comparison [Member] | Weighted Average [Member] | Impaired Loans Residential Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches	5.76%	5.74%
Sales Comparison [Member] | Weighted Average [Member] | Impaired Loans Construction Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches	6.19%	6.18%
Sales Comparison [Member] | Weighted Average [Member] | Impaired Loans Installment and Other [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches	6.24%	6.27%
Sales Comparison [Member] | Weighted Average [Member] | Other Real Estate Owned Commercial Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches	16.67%
Sales Comparison [Member] | Weighted Average [Member] | Other Real Estate Owned Residential Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches		9.09%
Sales Comparison [Member] | Weighted Average [Member] | Other Real Estate Owned Construction Real Estate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Comparison between sales and income approaches		9.78%

XML

Fair Value Measurements, Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Financial assets [Abstract]
Cash and due from banks	$ 10,003	$ 12,893
Interest-bearing deposits with banks	9,517	22,541
Investments [Abstract]
Available for sale	470,910	468,733
Held to maturity	7,824	7,854
Non-marketable equity securities	4,471	3,617
Loans, net	694,108	686,341
Financial liabilities [Abstract]
Non-interest bearing deposits	163,134	161,677
Interest bearing deposits	980,960	965,670
Long-term borrowings	2,300	2,300
Junior subordinated debt	26,764	36,941
Level 1 [Member]
Financial assets [Abstract]
Cash and due from banks	10,003	12,983
Interest-bearing deposits with banks	9,517	22,541
Securities purchased under resell agreements		0
Investments [Abstract]
Available for sale	0	0
Held to maturity	0	0
Loans, net	0	0
Accrued interest receivable on securities	0	0
Accrued interest receivable on loans	0	0
Accrued interest receivable other	0	0
Off-balance-sheet instruments [Abstract]
Loan commitments and standby letters of credit	0	0
Financial liabilities [Abstract]
Non-interest bearing deposits	163,134	161,677
Interest bearing deposits	0	0
Long-term borrowings	0	0
Junior subordinated debt	0	0
Accrued interest payable	0	0
Level 2 [Member]
Financial assets [Abstract]
Cash and due from banks	0	0
Interest-bearing deposits with banks	0	0
Securities purchased under resell agreements		0
Investments [Abstract]
Available for sale	470,910	468,733
Held to maturity	7,312	7,369
Loans, net	0	0
Accrued interest receivable on securities	2,726	2,795
Accrued interest receivable on loans	0	0
Accrued interest receivable other	0	0
Off-balance-sheet instruments [Abstract]
Loan commitments and standby letters of credit	24	23
Financial liabilities [Abstract]
Non-interest bearing deposits	0	0
Interest bearing deposits	979,054	964,717
Long-term borrowings	2,540	2,592
Junior subordinated debt	0	0
Accrued interest payable	168	172
Level 3 [Member]
Financial assets [Abstract]
Cash and due from banks	0	0
Interest-bearing deposits with banks	0	0
Securities purchased under resell agreements		0
Investments [Abstract]
Available for sale	0	0
Held to maturity	0	0
Loans, net	683,069	680,911
Accrued interest receivable on securities	0	0
Accrued interest receivable on loans	2,053	2,238
Accrued interest receivable other	7	21
Off-balance-sheet instruments [Abstract]
Loan commitments and standby letters of credit	0	0
Financial liabilities [Abstract]
Non-interest bearing deposits	0	0
Interest bearing deposits	0	0
Long-term borrowings	0	0
Junior subordinated debt	17,572	27,128
Accrued interest payable	111	456
Carrying Amount [Member]
Financial assets [Abstract]
Cash and due from banks	10,003	12,893
Interest-bearing deposits with banks	9,517	22,541
Securities purchased under resell agreements		0
Investments [Abstract]
Available for sale	470,910	468,733
Held to maturity	7,824	7,854
Non-marketable equity securities	4,471	3,617
Loans, net	694,108	686,341
Accrued interest receivable on securities	2,726	2,795
Accrued interest receivable on loans	2,053	2,238
Accrued interest receivable other	7	21
Off-balance-sheet instruments [Abstract]
Loan commitments and standby letters of credit	24	23
Financial liabilities [Abstract]
Non-interest bearing deposits	163,134	161,677
Interest bearing deposits	980,960	965,670
Long-term borrowings	2,300	2,300
Junior subordinated debt	26,764	37,116
Accrued interest payable	279	628
Fair Value [Member]
Financial assets [Abstract]
Cash and due from banks	10,003	12,983
Interest-bearing deposits with banks	9,517	22,541
Securities purchased under resell agreements		0
Investments [Abstract]
Available for sale	470,910	468,733
Held to maturity	7,312	7,369
Loans, net	683,069	680,911
Accrued interest receivable on securities	2,726	2,795
Accrued interest receivable on loans	2,053	2,238
Accrued interest receivable other	7	21
Off-balance-sheet instruments [Abstract]
Loan commitments and standby letters of credit	24	23
Financial liabilities [Abstract]
Non-interest bearing deposits	163,134	161,677
Interest bearing deposits	979,054	964,717
Long-term borrowings	2,540	2,592
Junior subordinated debt	17,572	27,128
Accrued interest payable	$ 279	$ 628

XML

Regulatory Matters (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items]
Number of years net income plus retained income taken for dividend payment	2 years
Total capital (to risk-weighted assets), Amount [Abstract]
Actual	$ 144,143	$ 152,076
For capital adequacy purposes	$ 68,326	$ 66,853
Total capital (to risk-weighted assets), Ratio [Abstract]
Actual	16.8772%	18.1982%
For capital adequacy purposes	8.00%	8.00%
Tier 1 capital (risk-weighted assets), Amount [Abstract]
Actual	$ 133,453	$ 132,900
For capital adequacy purposes	$ 51,244	$ 50,140
Tier 1 capital (to risk-weighted assets), Ratio [Abstract]
Actual	15.6256%	15.9035%
For capital adequacy purposes	6.00%	6.00%
Common equity Tier 1 capital (to risk weighted assets), Amount [Abstract]
Actual	$ 107,453	$ 106,320
For capital adequacy purposes	$ 38,433	$ 37,605
Common equity Tier 1 capital (to risk weighted assets), Ratio [Abstract]
Actual	12.5813%	12.7228%
For capital adequacy purposes	4.50%	4.50%
Tier 1 leverage (to average assets), Amount [Abstract]
Actual	$ 133,453	$ 132,900
For capital adequacy purposes	$ 51,193	$ 33,427
Tier 1 leverage (to average assets), Ratio [Abstract]
Actual	10.4275%	10.1821%
For capital adequacy purposes	4.00%	4.00%
Bank Only [Member]
Total capital (to risk-weighted assets), Amount [Abstract]
Actual	$ 137,691	$ 134,959
For capital adequacy purposes	68,240	66,720
To be well capitalized under prompt corrective action provisions	$ 85,300	$ 83,399
Total capital (to risk-weighted assets), Ratio [Abstract]
Actual	16.142%	16.1823%
For capital adequacy purposes	8.00%	8.00%
To be well capitalized under prompt corrective action provisions	10.00%	10.00%
Tier 1 capital (risk-weighted assets), Amount [Abstract]
Actual	$ 127,014	$ 124,481
For capital adequacy purposes	51,180	50,040
To be well capitalized under prompt corrective action provisions	$ 68,240	$ 66,720
Tier 1 capital (to risk-weighted assets), Ratio [Abstract]
Actual	14.8903%	14.9259%
For capital adequacy purposes	6.00%	6.00%
To be well capitalized under prompt corrective action provisions	8.00%	8.00%
Common equity Tier 1 capital (to risk weighted assets), Amount [Abstract]
Actual	$ 127,014	$ 124,481
For capital adequacy purposes	38,385	37,530
To be well capitalized under prompt corrective action provisions	$ 55,445	$ 54,210
Common equity Tier 1 capital (to risk weighted assets), Ratio [Abstract]
Actual	14.8903%	14.9259%
For capital adequacy purposes	4.50%	4.50%
To be well capitalized under prompt corrective action provisions	6.50%	6.50%
Tier 1 leverage (to average assets), Amount [Abstract]
Actual	$ 127,014	$ 124,481
For capital adequacy purposes	51,148	33,360
To be well capitalized under prompt corrective action provisions	$ 63,935	$ 41,700
Tier 1 leverage (to average assets), Ratio [Abstract]
Actual	9.9331%	9.6006%
For capital adequacy purposes	4.00%	4.00%
To be well capitalized under prompt corrective action provisions	5.00%	5.00%
Capital Conservation Buffer [Abstract]
Capital conservation buffer	8.142%	8.1823%
Consolidated capital conservation buffer	8.0813%	8.2228%