FROM: | TO: |
South Carolina | 57-0858504 | |||
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
Large accelerated filed [ ] | Smaller reporting company [ X ] | |||
Non-accelerated filer [ X ] | Emerging growth company [ ] | |||
Accelerated filer [ ] |
YES | NO |
CLASS: | OUTSTANDING SHARES AT: | SHARES: | ||||
Common Stock, par value $0.01 per share | November 14, 2019 | 2,956,377 |
PART I. | FINANCIAL INFORMATION (UNAUDITED) | PAGE NO. |
Item 1. | Financial Statements (unaudited): | 3 |
Consolidated Balance Sheets at September 30, 2019 and December 31, 2018 | 3 | |
Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2019 and 2018 | 4 | |
Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2019 and 2018 | 5 | |
Consolidated Statements of Changes in Shareholders’ Equity for the Nine Months Ended September 30, 2019 and 2018 | 6 | |
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018 | 7 | |
Notes to Consolidated Financial Statements | 9 | |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 32 |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 46 |
Item 4. | Controls and Procedures | 46 |
PART II. | OTHER INFORMATION | |
Item 1. | Legal Proceedings | 47 |
Item 1A. | Risk Factors | 47 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 47 |
Item 3. | Defaults Upon Senior Securities | 47 |
Item 4. | Mine Safety Disclosures | 47 |
Item 5. | Other Information | 47 |
Item 6. | Exhibits | 47 |
Signatures | 49 | |
September 30, 2019 | December 31, 2018 | ||||||
(Unaudited) | (Audited) | ||||||
ASSETS: | |||||||
Cash and Cash Equivalents | $ | 13,793,394 | $ | 12,705,910 | |||
Certificates of Deposit with Other Banks | 950,005 | 1,200,010 | |||||
Investment and Mortgage-Backed Securities: | |||||||
Available For Sale ("AFS") | 438,243,435 | 386,255,837 | |||||
Held To Maturity ("HTM") (Fair Value of $21,953,200 and $23,249,400 at September 30, 2019 and December 31, 2018, Respectively) | 21,416,599 | 23,638,013 | |||||
Total Investments and Mortgage-Backed Securities | 459,660,034 | 409,893,850 | |||||
Loans Receivable, Net: | |||||||
Held For Sale | 3,682,876 | 1,781,985 | |||||
Held For Investment (Net of Allowance of $8,758,639 and $9,171,717 at September 30, 2019 and December 31, 2018, Respectively) | 449,958,619 | 428,271,532 | |||||
Total Loans Receivable, Net | 453,641,495 | 430,053,517 | |||||
Accrued Interest Receivable: | |||||||
Loans | 1,149,852 | 1,257,683 | |||||
Mortgage-Backed Securities | 601,984 | 591,849 | |||||
Investment Securities | 1,728,088 | 1,877,844 | |||||
Total Accrued Interest Receivable | 3,479,924 | 3,727,376 | |||||
Operating Lease Right-of-Use Assets | 2,811,157 | — | |||||
Premises and Equipment, Net | 26,377,920 | 24,174,707 | |||||
Federal Home Loan Bank ("FHLB") Stock, at Cost | 2,852,900 | 2,204,000 | |||||
Other Real Estate Owned ("OREO") | 703,540 | 722,442 | |||||
Bank Owned Life Insurance ("BOLI") | 21,366,647 | 21,237,893 | |||||
Goodwill | 1,199,754 | 1,199,754 | |||||
Other Assets | 4,424,714 | 5,494,800 | |||||
Total Assets | $ | 991,261,484 | $ | 912,614,259 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY: | |||||||
Liabilities: | |||||||
Deposit Accounts | $ | 814,620,366 | $ | 767,496,707 | |||
Advance Payments By Borrowers for Taxes and Insurance | 599,108 | 258,505 | |||||
Advances From FHLB | 47,800,000 | 34,030,000 | |||||
Other Borrowings | 14,988,524 | 10,698,429 | |||||
Note Payable | — | 2,362,500 | |||||
Junior Subordinated Debentures | 5,155,000 | 5,155,000 | |||||
Senior Convertible Debentures | 6,044,000 | 6,064,000 | |||||
Operating Lease Liabilities | 2,829,652 | — | |||||
Other Liabilities | 6,922,828 | 6,030,685 | |||||
Total Liabilities | $ | 898,959,478 | $ | 832,095,826 | |||
Shareholders' Equity: | |||||||
Common Stock, $.01 Par Value; Authorized 5,000,000 Shares; Issued and Outstanding Shares, 3,157,310 and 2,956,377, Respectively, at September 30, 2019 and 3,154,829 and 2,953,896, Respectively, at December 31, 2018 | $ | 31,573 | $ | 31,548 | |||
Additional Paid-In Capital ("APIC") | 12,294,432 | 12,235,341 | |||||
Treasury Stock, at Cost (200,933 Shares) | (4,330,712 | ) | (4,330,712 | ) | |||
Accumulated Other Comprehensive Income (Loss) ("AOCI") | 6,331,710 | (27,909 | ) | ||||
Retained Earnings | 77,975,003 | 72,610,165 | |||||
Total Shareholders' Equity | $ | 92,302,006 | $ | 80,518,433 | |||
Total Liabilities and Shareholders' Equity | $ | 991,261,484 | $ | 912,614,259 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Interest Income: | |||||||||||||||
Loans | $ | 6,369,586 | $ | 5,890,317 | $ | 18,419,922 | $ | 16,965,442 | |||||||
Mortgage-Backed Securities | 1,807,876 | 1,351,134 | 4,978,614 | 3,943,521 | |||||||||||
Investment Securities | 1,459,810 | 1,239,798 | 4,307,922 | 3,357,698 | |||||||||||
Other | 4,069 | 25,228 | 94,106 | 42,384 | |||||||||||
Total Interest Income | 9,641,341 | 8,506,477 | 27,800,564 | 24,309,045 | |||||||||||
Interest Expense: | |||||||||||||||
NOW and Money Market Accounts | 541,494 | 325,427 | 1,597,932 | 774,637 | |||||||||||
Savings Accounts | 18,753 | 14,120 | 53,947 | 38,420 | |||||||||||
Certificate Accounts | 1,204,990 | 706,590 | 3,181,783 | 1,856,348 | |||||||||||
FHLB Advances and Other Borrowed Money | 351,825 | 157,148 | 675,985 | 513,018 | |||||||||||
Note Payable | — | 51,856 | 35,515 | 190,790 | |||||||||||
Senior Convertible Debentures | 120,880 | 121,280 | 362,640 | 363,840 | |||||||||||
Junior Subordinated Debentures | 53,522 | 53,218 | 166,703 | 147,234 | |||||||||||
Total Interest Expense | 2,291,464 | 1,429,639 | 6,074,505 | 3,884,287 | |||||||||||
Net Interest Income | 7,349,877 | 7,076,838 | 21,726,059 | 20,424,758 | |||||||||||
Provision For Loan Losses | 75,000 | 150,000 | 175,000 | 150,000 | |||||||||||
Net Interest Income After Provision For Loan Losses | 7,274,877 | 6,926,838 | 21,551,059 | 20,274,758 | |||||||||||
Non-Interest Income: | |||||||||||||||
Gain on Sale of Investment Securities | 96,057 | — | 1,056,959 | 436,304 | |||||||||||
Gain on Sale of Loans | 580,220 | 345,396 | 1,126,551 | 999,045 | |||||||||||
Service Fees on Deposit Accounts | 279,360 | 262,821 | 785,987 | 770,493 | |||||||||||
Commissions From Insurance Agency | 201,253 | 196,817 | 528,246 | 525,153 | |||||||||||
Trust Income | 270,000 | 249,000 | 787,200 | 725,000 | |||||||||||
BOLI Income | 273,609 | 135,000 | 543,609 | 405,000 | |||||||||||
Check Card Fee Income | 365,659 | 320,708 | 1,063,314 | 966,365 | |||||||||||
Grant Income | 55,364 | 318,102 | 332,393 | 318,102 | |||||||||||
Other | 286,935 | 241,837 | 872,591 | 712,785 | |||||||||||
Total Non-Interest Income | 2,408,457 | 2,069,681 | 7,096,850 | 5,858,247 | |||||||||||
Non-Interest Expense: | |||||||||||||||
Compensation and Employee Benefits | 4,270,515 | 4,032,245 | 12,587,421 | 11,683,664 | |||||||||||
Occupancy | 599,512 | 586,527 | 1,728,732 | 1,677,970 | |||||||||||
Advertising | 190,070 | 181,663 | 539,234 | 455,753 | |||||||||||
Depreciation and Maintenance of Equipment | 644,800 | 575,750 | 1,894,997 | 1,673,470 | |||||||||||
Federal Deposit Insurance Corporation ("FDIC") Insurance Premiums | 41,540 | 72,837 | 184,022 | 206,218 | |||||||||||
Net Cost (Recovery) of OREO Operation | 189,467 | (203,104 | ) | (62,680 | ) | (362,864 | ) | ||||||||
Other | 1,053,219 | 1,171,664 | 4,103,020 | 3,842,576 | |||||||||||
Total Non-Interest Expense | 6,989,123 | 6,417,582 | 20,974,746 | 19,176,787 | |||||||||||
Income Before Income Taxes | 2,694,211 | 2,578,937 | 7,673,163 | 6,956,218 | |||||||||||
Provision For Income Taxes | 474,744 | 471,245 | 1,480,792 | 1,298,455 | |||||||||||
Net Income | 2,219,467 | 2,107,692 | 6,192,371 | 5,657,763 | |||||||||||
Net Income Per Common Share (Basic) | $ | 0.75 | $ | 0.71 | $ | 2.10 | $ | 1.92 | |||||||
Net Income Per Common Share (Diluted) | $ | 0.71 | $ | 0.68 | $ | 1.98 | $ | 1.82 | |||||||
Cash Dividend Per Share on Common Stock | $ | 0.10 | $ | 0.09 | $ | 0.28 | $ | 0.27 | |||||||
Weighted Average Shares Outstanding (Basic) | 2,956,156 | 2,953,424 | 2,955,446 | 2,953,340 | |||||||||||
Weighted Average Shares Outstanding (Diluted) | 3,258,356 | 3,256,624 | 3,257,646 | 3,256,540 |
Three Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Net Income | $ | 2,219,467 | $ | 2,107,692 | |||
Other Comprehensive Income (Loss) | |||||||
Unrealized Gains (Losses) on Securities: | |||||||
Unrealized Holding Gains (Losses) on Securities AFS, Net of Taxes of $421,086 and $(618,602) at September 30, 2019 and 2018, Respectively | 1,304,435 | (1,888,549 | ) | ||||
Reclassification Adjustment for Gains Included in Net Income, Net of Taxes of $24,014 at September 30, 2019 | (72,043 | ) | — | ||||
Amortization of Unrealized Gains on AFS Securities Transferred to HTM, Net of Taxes of $(1,095) and $(6,000) at September 30, 2019 and 2018, Respectively | (3,287 | ) | (17,998 | ) | |||
Other Comprehensive Income (Loss), Net of Tax | 1,229,105 | (1,906,547 | ) | ||||
Comprehensive Income | $ | 3,448,572 | $ | 201,145 |
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Net Income | $ | 6,192,371 | $ | 5,657,763 | |||
Other Comprehensive Income (Loss) | |||||||
Unrealized Gains (Losses) on Securities: | |||||||
Unrealized Holding Gains (Losses) on Securities AFS Net of Taxes of $2,341,270 and $(1,804,885) at September 30, 2019 and 2018, Respectively | 7,171,440 | (5,515,962 | ) | ||||
Reclassification Adjustment for Gains Included in Net Income, Net of Taxes of $264,240 and $109,076 at September 30, 2019 and 2018, Respectively | (792,719 | ) | (327,228 | ) | |||
Amortization of Unrealized Gains on AFS Securities Transferred to HTM, Net of Taxes of $(6,368) and $(23,718) at September 30, 2019 and 2018, Respectively | (19,102 | ) | (64,238 | ) | |||
Other Comprehensive Income (Loss) | 6,359,619 | (5,907,428 | ) | ||||
Comprehensive Income (Loss) | $ | 12,551,990 | $ | (249,665 | ) |
Common Stock | APIC | Treasury Stock | AOCI | Retained Earnings | Total | ||||||||||||||||||
Balance at December 31, 2017 | $ | 31,539 | $ | 12,212,844 | $ | (4,330,712 | ) | $ | 2,932,122 | $ | 67,077,661 | $ | 77,923,454 | ||||||||||
Net Income | — | — | — | — | 1,730,117 | 1,730,117 | |||||||||||||||||
Other Comprehensive Loss, Net of Tax | — | — | — | (3,095,804 | ) | — | (3,095,804 | ) | |||||||||||||||
Reclassification of stranded tax effects from AOCI to Retained Earnings | — | — | — | 611,091 | (611,091 | ) | — | ||||||||||||||||
Stock Options Exercised | 4 | 8,015 | — | — | — | 8,019 | |||||||||||||||||
Cash Dividends on Common Stock | (265,889 | ) | (265,889 | ) | |||||||||||||||||||
Balance at March 31, 2018 | $ | 31,543 | $ | 12,220,859 | $ | (4,330,712 | ) | $ | 447,409 | $ | 67,930,798 | $ | 76,299,897 | ||||||||||
Net Income | — | — | — | — | 1,819,954 | 1,819,954 | |||||||||||||||||
Other Comprehensive Loss, Net of Tax | — | — | — | (905,077 | ) | — | (905,077 | ) | |||||||||||||||
Stock Options Exercised | 1 | 2,290 | — | — | — | 2,291 | |||||||||||||||||
Cash Dividends on Common Stock | — | — | — | — | (265,898 | ) | (265,898 | ) | |||||||||||||||
Balance at June 30, 2018 | $ | 31,544 | $ | 12,223,149 | $ | (4,330,712 | ) | $ | (457,668 | ) | $ | 69,484,854 | $ | 76,951,167 | |||||||||
Net Income | — | — | — | — | 2,107,692 | 2,107,692 | |||||||||||||||||
Other Comprehensive Loss, Net of Tax | — | — | — | (1,906,547 | ) | — | (1,906,547 | ) | |||||||||||||||
Cash Dividends on Common Stock | — | — | — | — | (265,899 | ) | (265,899 | ) | |||||||||||||||
Balance at September 30, 2018 | $ | 31,544 | $ | 12,223,149 | $ | (4,330,712 | ) | $ | (2,364,215 | ) | $ | 71,326,647 | $ | 76,886,413 |
Common Stock | APIC | Treasury Stock | AOCI | Retained Earnings | Total | ||||||||||||||||||
Balance at December 31, 2018 | $ | 31,548 | $ | 12,235,341 | $ | (4,330,712 | ) | $ | (27,909 | ) | $ | 72,610,165 | $ | 80,518,433 | |||||||||
Net Income | — | — | — | — | 2,088,873 | 2,088,873 | |||||||||||||||||
Other Comprehensive Income, Net of Tax | — | — | — | 2,817,917 | — | 2,817,917 | |||||||||||||||||
Employee Stock Purchases | 5 | 12,004 | — | — | — | 12,009 | |||||||||||||||||
Redemption of Convertible Debentures | 10 | 19,990 | — | — | — | 20,000 | |||||||||||||||||
Cash Dividends on Common Stock | — | — | — | — | (265,982 | ) | (265,982 | ) | |||||||||||||||
Balance at March 31, 2019 | $ | 31,563 | $ | 12,267,335 | $ | (4,330,712 | ) | $ | 2,790,008 | $ | 74,433,056 | $ | 85,191,250 | ||||||||||
Net Income | — | — | — | — | 1,884,031 | 1,884,031 | |||||||||||||||||
Other Comprehensive Loss, Net of Tax | — | — | — | 2,312,597 | — | 2,312,597 | |||||||||||||||||
Employee Stock Purchases | 6 | 14,780 | — | — | — | 14,786 | |||||||||||||||||
Cash Dividends on Common Stock | — | — | — | — | (266,034 | ) | (266,034 | ) | |||||||||||||||
Balance at June 30, 2019 | $ | 31,569 | $ | 12,282,115 | $ | (4,330,712 | ) | $ | 5,102,605 | $ | 76,051,053 | $ | 89,136,630 | ||||||||||
Net Income | — | — | — | — | 2,219,467 | 2,219,467 | |||||||||||||||||
Other Comprehensive Loss, Net of Tax | — | — | — | 1,229,105 | — | 1,229,105 | |||||||||||||||||
Employee Stock Purchases | 4 | 12,317 | — | — | — | 12,321 | |||||||||||||||||
Cash Dividends on Common Stock | — | — | — | — | (295,517 | ) | (295,517 | ) | |||||||||||||||
Balance at September 30, 2019 | $ | 31,573 | $ | 12,294,432 | $ | (4,330,712 | ) | $ | 6,331,710 | $ | 77,975,003 | $ | 92,302,006 |
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net Income | $ | 6,192,371 | $ | 5,657,763 | |||
Adjustments To Reconcile Net Income To Net Cash Provided By Operating Activities: | |||||||
Depreciation Expense | 1,167,945 | 1,062,542 | |||||
Discount Accretion and Premium Amortization | 3,925,218 | 4,271,865 | |||||
Provision for Loan Losses | 175,000 | 150,000 | |||||
Earnings on BOLI | (405,000 | ) | (405,000 | ) | |||
Income Recognized From BOLI Death Benefit | (138,609 | ) | — | ||||
Gain on Sales of Loans | (1,126,551 | ) | (999,045 | ) | |||
Gain on Sales of Mortgage-Backed Securities ("MBS") | (98,515 | ) | (181,034 | ) | |||
Gain on Sales of Investment Securities | (958,443 | ) | (255,270 | ) | |||
Gain on Sales of OREO | (181,552 | ) | (547,685 | ) | |||
Write Down on OREO | 22,000 | 56,000 | |||||
Amortization of Operating Lease Right-of-Use Assets | 279,355 | — | |||||
Amortization of Deferred Loan Costs | 138,045 | 73,163 | |||||
Proceeds From Sale of Loans Held For Sale | 39,321,961 | 38,316,435 | |||||
Origination of Loans Held For Sale | (40,096,301 | ) | (35,002,538 | ) | |||
Decrease (Increase) in Accrued Interest Receivable: | |||||||
Loans | 107,831 | (129,675 | ) | ||||
MBS | (10,135 | ) | 11,356 | ||||
Investment Securities | 149,756 | (50,354 | ) | ||||
Increase in Advance Payments By Borrowers | 340,603 | 363,864 | |||||
Decrease in Other, Net | (394,763 | ) | (134,725 | ) | |||
Net Cash Provided By Operating Activities | $ | 8,410,216 | $ | 12,257,662 | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchase of MBS AFS | $ | (97,828,479 | ) | $ | (41,314,618 | ) | |
Proceeds from Sales and Maturities of MBS AFS | 60,486,276 | 45,040,636 | |||||
Proceeds from Payments and Maturities of MBS Held To Maturity ("HTM") | 2,057,157 | 2,536,945 | |||||
Purchase of Investment Securities AFS | (70,741,583 | ) | (38,965,898 | ) | |||
Proceeds from Sales and Maturities of Investment Securities AFS | 61,847,936 | 35,120,779 | |||||
Proceeds from Payments and Maturities of Investment Securities HTM | — | 2,000,000 | |||||
Proceeds from Redemption of Certificates of Deposits with Other Banks | 250,005 | — | |||||
Purchase of FHLB Stock | (7,365,500 | ) | (4,194,300 | ) | |||
Redemption of FHLB Stock | 6,716,600 | 4,640,500 | |||||
Purchase of BOLI | — | (1,900,000 | ) | ||||
Proceeds From BOLI Death Benefit | 414,855 | — | |||||
Increase in Loans Receivable | (22,802,932 | ) | (36,340,156 | ) | |||
Proceeds From Sale of OREO | 981,254 | 1,064,664 | |||||
Purchase and Improvement of Premises and Equipment | (3,371,158 | ) | (2,325,360 | ) | |||
Net Cash Used By Investing Activities | $ | (69,355,569 | ) | $ | (34,636,808 | ) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Increase in Deposit Accounts | $ | 47,123,659 | $ | 48,891,690 | |||
Proceeds from FHLB Advances | 228,708,000 | 160,083,000 | |||||
Repayment of FHLB Advances | (214,938,000 | ) | (172,763,000 | ) | |||
Increase in Other Borrowings, Net | 4,290,095 | 1,345,109 | |||||
Repayment of Note Payable | (2,362,500 | ) | (4,600,000 | ) | |||
Proceeds from Employee Stock Options Exercised | — | 10,310 | |||||
Proceeds from Employee Stock Purchases | 39,116 | — | |||||
Dividends to Common Stock Shareholders | (827,533 | ) | (797,686 | ) | |||
Net Cash Provided By Financing Activities | $ | 62,032,837 | $ | 32,169,423 | |||
Net Increase in Cash and Cash Equivalents | 1,087,484 | 9,790,277 | |||||
Cash and Cash Equivalents at Beginning of Period | 12,705,910 | 10,319,624 | |||||
Cash and Cash Equivalents at End of Period | $ | 13,793,394 | $ | 20,109,901 |
Consolidated Statements of Cash Flows (Unaudited) (Continued) | |||||||
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||
Cash Paid for Interest | $ | 5,654,177 | $ | 3,719,123 | |||
Cash Paid for Income Taxes | $ | 1,199,541 | $ | 992,273 | |||
Non-Cash Transactions: | |||||||
Initial Recognition of Operating Lease Right-of-Use Assets | $ | 3,090,512 | $ | — | |||
Initial Recognition of Operating Lease Liabilities | $ | 3,090,512 | $ | — | |||
Transfers From Loans Receivable to OREO | $ | 802,800 | $ | 315,550 | |||
Other Comprehensive Income (Loss) | $ | 6,359,619 | $ | (5,907,428 | ) |
Three Months Ended September 30, | |||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||
Income | Shares | Per Share | Income | Shares | Per Share | ||||||||||||||||
Basic EPS | $ | 2,219,467 | 2,956,156 | $ | 0.75 | $ | 2,107,692 | 2,953,424 | $ | 0.71 | |||||||||||
Senior Convertible Debentures | 90,660 | 302,200 | (0.04 | ) | 90,960 | 303,200 | (0.03) | ||||||||||||||
Diluted EPS | $ | 2,310,127 | 3,258,356 | $ | 0.71 | $ | 2,198,652 | 3,256,624 | $ | 0.68 |
Nine Months Ended September 30, | |||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||
Income | Shares | Per Share | Income | Shares | Per Share | ||||||||||||||||
Basic EPS | $ | 6,192,371 | 2,955,446 | $ | 2.10 | $ | 5,657,763 | 2,953,340 | $ | 1.92 | |||||||||||
Senior Convertible Debentures | 271,980 | 302,200 | (0.12) | 272,880 | 303,200 | (0.10) | |||||||||||||||
Diluted EPS | $ | 6,464,351 | 3,257,646 | $ | 1.98 | $ | 5,930,643 | 3,256,540 | $ | 1.82 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
2018 | 2018 | ||||||||||||
Shares | Weighted Average Exercise Price | Shares | Weighted Average Exercise Price | ||||||||||
Balance, Beginning of Period | 1,650 | $ | 22.91 | 4,500 | $ | 22.91 | |||||||
Options Exercised | — | — | (450) | 22.91 | |||||||||
Options Forfeited | (1,650 | ) | 22.91 | (4,050) | 22.91 | ||||||||
Balance, End of Period | — | $ | — | — | $ | — | |||||||
Options Available For Grant | 50,000 | 50,000 |
September 30, 2019 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
Student Loan Pools | $ | 41,569,303 | $ | 4,007 | $ | 329,972 | $ | 41,243,338 | |||||||
Small Business Administration (“SBA”) Bonds | 120,910,755 | 717,658 | 651,988 | 120,976,425 | |||||||||||
Tax Exempt Municipal Bonds | 43,187,057 | 4,329,929 | — | 47,516,986 | |||||||||||
Taxable Municipal Bonds | 2,013,786 | 40,892 | 37,623 | 2,017,055 | |||||||||||
Mortgage-Backed Securities | 221,931,218 | 4,836,297 | 494,126 | 226,273,389 | |||||||||||
State Tax Credit | 61,242 | — | — | 61,242 | |||||||||||
Equity Securities | 155,000 | — | — | 155,000 | |||||||||||
Total Available For Sale | $ | 429,828,361 | $ | 9,928,783 | $ | 1,513,709 | $ | 438,243,435 | |||||||
December 31, 2018 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
Student Loan Pools | $ | 12,934,037 | $ | 20,713 | $ | 69,249 | $ | 12,885,501 | |||||||
SBA Bonds | 125,777,016 | 560,352 | 890,837 | 125,446,531 | |||||||||||
Tax Exempt Municipal Bonds | 60,141,164 | 1,518,974 | 329,769 | 61,330,369 | |||||||||||
Taxable Municipal Bonds | 1,998,258 | 3,546 | 23,919 | 1,977,885 | |||||||||||
Mortgage-Backed Securities | 185,291,038 | 1,073,432 | 1,903,919 | 184,460,551 | |||||||||||
Equity Securities | 155,000 | — | — | 155,000 | |||||||||||
Total Available For Sale | $ | 386,296,513 | $ | 3,177,017 | $ | 3,217,693 | $ | 386,255,837 |
September 30, 2019 | |||||||
Investment Securities: | Amortized Cost | Fair Value | |||||
One Year or Less | $ | 99,189 | $ | 98,978 | |||
After One – Five Years | 7,796,197 | 7,840,171 | |||||
After Five – Ten Years | 59,181,477 | 59,258,866 | |||||
More Than Ten Years | 140,820,280 | 144,772,031 | |||||
Mortgage-Backed Securities | 221,931,218 | 226,273,389 | |||||
Total Available For Sale | $ | 429,828,361 | $ | 438,243,435 |
September 30, 2019 | ||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||
Student Loan Pools | $ | 31,327,315 | $ | 283,132 | $ | 3,030,566 | $ | 46,840 | $ | 34,357,881 | $ | 329,972 | ||||||||
SBA Bonds | 20,192,185 | 101,704 | 49,743,150 | 550,284 | 69,935,335 | 651,988 | ||||||||||||||
Taxable Municipal Bonds | 981,630 | 37,623 | — | — | 981,630 | 37,623 | ||||||||||||||
Mortgage-Backed Securities | 44,595,549 | 256,776 | 20,595,466 | 237,350 | 65,191,015 | 494,126 | ||||||||||||||
$ | 97,096,679 | $ | 679,235 | $ | 73,369,182 | $ | 834,474 | $ | 170,465,861 | $ | 1,513,709 |
December 31, 2018 | ||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||
Student Loan Pools | $ | 8,384,145 | $ | 69,249 | $ | — | $ | — | $ | 8,384,145 | $ | 69,249 | ||||||||
SBA Bonds | 59,496,936 | 479,955 | 25,054,861 | 410,882 | 84,551,797 | 890,837 | ||||||||||||||
Tax Exempt Municipal Bonds | 4,585,849 | 91,281 | 9,626,613 | 238,488 | 14,212,462 | 329,769 | ||||||||||||||
Taxable Municipal Bond | — | — | 980,520 | 23,919 | 980,520 | 23,919 | ||||||||||||||
Mortgage-Backed Securities | 38,168,598 | 249,050 | 81,947,249 | 1,654,869 | 120,115,847 | 1,903,919 | ||||||||||||||
$ | 110,635,528 | $ | 889,535 | $ | 117,609,243 | $ | 2,328,158 | $ | 228,244,771 | $ | 3,217,693 |
September 30, 2019 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
Federal Home Loan Mortgage Corporation ("FHLMC") Bond | $ | 998,880 | $ | 1,548 | $ | — | $ | 1,000,428 | |||||||
Mortgage-Backed Securities (1) | 20,417,719 | 536,275 | 1,222 | 20,952,772 | |||||||||||
Total Held To Maturity | $ | 21,416,599 | $ | 537,823 | $ | 1,222 | $ | 21,953,200 | |||||||
December 31, 2018 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
FHLMC Bond | $ | 998,541 | $ | — | $ | 20,564 | $ | 977,977 | |||||||
Mortgage-Backed Securities (1) | 22,639,472 | 78,281 | 446,330 | 22,271,423 | |||||||||||
Total Held To Maturity | $ | 23,638,013 | $ | 78,281 | $ | 466,894 | $ | 23,249,400 |
September 30, 2019 | |||||||
Investment Securities HTM: | Amortized Cost | Fair Value | |||||
One – Five Years | $ | 998,880 | $ | 1,000,428 | |||
Mortgage-Backed Securities | 20,417,719 | 20,952,772 | |||||
Total Held to Maturity | $ | 21,416,599 | $ | 21,953,200 |
September 30, 2019 | ||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||
Mortgage-Backed Securities (1) | $ | — | $ | — | $ | 828,312 | $ | 1,222 | $ | 828,312 | $ | 1,222 | ||||||||
$ | — | $ | — | $ | 828,312 | $ | 1,222 | $ | 828,312 | $ | 1,222 |
December 31, 2018 | ||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||
FHLMC Bond | $ | — | $ | — | $ | 977,977 | $ | 20,564 | $ | 977,977 | $ | 20,564 | ||||||||
Mortgage-Backed Securities (1) | — | — | 16,855,973 | 446,330 | 16,855,973 | 446,330 | ||||||||||||||
$ | — | $ | — | $ | 17,833,950 | $ | 466,894 | $ | 17,833,950 | $ | 466,894 |
September 30, 2019 | December 31, 2018 | ||||||
Residential Real Estate | $ | 85,770,830 | $ | 83,965,416 | |||
Consumer | 55,265,561 | 56,907,555 | |||||
Commercial Business | 26,925,440 | 28,086,686 | |||||
Commercial Real Estate | 299,354,651 | 275,960,438 | |||||
Total Loans Held For Investment | 467,316,482 | 444,920,095 | |||||
Loans Held For Sale | 3,682,876 | 1,781,985 | |||||
Total Loans Receivable, Gross | $ | 470,999,358 | $ | 446,702,080 | |||
Less: | |||||||
Allowance For Loan Losses | 8,758,638 | 9,171,717 | |||||
Loans in Process | 8,169,557 | 7,225,271 | |||||
Deferred Loan Fees | 429,668 | 251,575 | |||||
17,357,863 | 16,648,563 | ||||||
Total Loans Receivable, Net | $ | 453,641,495 | $ | 430,053,517 |
September 30, 2019 | Pass | Caution | Special Mention | Substandard | Total Loans | ||||||||||||||
Residential Real Estate | $ | 76,539,946 | $ | 4,267,222 | $ | 744,155 | $ | 4,219,507 | $ | 85,770,830 | |||||||||
Consumer | 43,907,321 | 8,968,651 | 513,664 | 1,875,925 | 55,265,561 | ||||||||||||||
Commercial Business | 21,827,500 | 4,425,501 | 345,998 | 326,441 | 26,925,440 | ||||||||||||||
Commercial Real Estate | 228,561,878 | 53,711,353 | 13,198,173 | 3,883,247 | 299,354,651 | ||||||||||||||
Total | $ | 370,836,645 | $ | 71,372,727 | $ | 14,801,990 | $ | 10,305,120 | $ | 467,316,482 |
December 31, 2018 | Pass | Caution | Special Mention | Substandard | Total Loans | ||||||||||||||
Residential Real Estate | $ | 75,558,544 | $ | 3,369,776 | $ | 958,354 | $ | 4,078,742 | $ | 83,965,416 | |||||||||
Consumer | 46,948,251 | 6,899,912 | 567,682 | 2,491,710 | 56,907,555 | ||||||||||||||
Commercial Business | 22,670,318 | 4,708,036 | 339,533 | 368,799 | 28,086,686 | ||||||||||||||
Commercial Real Estate | 204,197,354 | 45,653,796 | 18,492,785 | 7,616,503 | 275,960,438 | ||||||||||||||
Total | $ | 349,374,467 | $ | 60,631,520 | $ | 20,358,354 | $ | 14,555,754 | $ | 444,920,095 |
September 30, 2019 | |||||||||||||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due | Total Past Due | Current | Total Loans Receivable | ||||||||||||||||||
Residential Real Estate | $ | — | $ | 803,055 | $ | 393,183 | $ | 1,196,238 | $ | 84,574,592 | $ | 85,770,830 | |||||||||||
Consumer | 408,637 | 186,571 | 70,458 | 665,666 | 54,599,895 | 55,265,561 | |||||||||||||||||
Commercial Business | 104,213 | 51,709 | 1,797 | 157,719 | 26,767,721 | 26,925,440 | |||||||||||||||||
Commercial Real Estate | 1,006,503 | — | 1,716,611 | 2,723,114 | 296,631,537 | 299,354,651 | |||||||||||||||||
Total | $ | 1,519,353 | $ | 1,041,335 | $ | 2,182,049 | $ | 4,742,737 | $ | 462,573,745 | $ | 467,316,482 |
December 31, 2018 | |||||||||||||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due | Total Past Due | Current | Total Loans Receivable | ||||||||||||||||||
Residential Real Estate | $ | — | $ | 332,000 | $ | 497,713 | $ | 829,713 | $ | 83,135,703 | $ | 83,965,416 | |||||||||||
Consumer | 555,798 | 247,894 | 1,120,462 | 1,924,154 | 54,983,401 | 56,907,555 | |||||||||||||||||
Commercial Business | 205,613 | 106,163 | 18,648 | 330,424 | 27,756,262 | 28,086,686 | |||||||||||||||||
Commercial Real Estate | 1,556,863 | 424,103 | 1,634,770 | 3,615,736 | 272,344,702 | 275,960,438 | |||||||||||||||||
Total | $ | 2,318,274 | $ | 1,110,160 | $ | 3,271,593 | $ | 6,700,027 | $ | 438,220,068 | $ | 444,920,095 |
September 30, 2019 | December 31, 2018 | Increase (Decrease) | |||||||||||||||||
Amount | Percent (1) | Amount | Percent (1) | $ | % | ||||||||||||||
Non-accrual Loans: | |||||||||||||||||||
Residential Real Estate | $ | 1,375,320 | 0.3 | % | $ | 2,084,870 | 0.5 | % | $ | (709,550 | ) | (34.0)% | |||||||
Consumer | 326,972 | 0.1 | 1,274,673 | 0.3 | (947,701 | ) | (74.3) | ||||||||||||
Commercial Business | 124,791 | — | 124,458 | — | 333 | 0.3 | |||||||||||||
Commercial Real Estate | 2,254,125 | 0.5 | 3,564,494 | 0.8 | (1,310,369 | ) | (36.8) | ||||||||||||
Total Non-accrual Loans | $ | 4,081,208 | 0.9 | % | $ | 7,048,495 | 1.6 | % | $ | (2,967,287 | ) | (42.1)% |
Three Months Ended September 30, 2019 | |||||||||||||||||||
Residential Real Estate | Consumer | Commercial Business | Commercial Real Estate | Total | |||||||||||||||
Beginning Balance | $ | 1,125,812 | $ | 1,092,327 | $ | 896,843 | $ | 5,638,557 | $ | 8,753,539 | |||||||||
Provision for Loan Losses | 15,059 | 8,207 | (136,254 | ) | 187,988 | 75,000 | |||||||||||||
Charge-Offs | — | (102,273 | ) | — | — | (102,273 | ) | ||||||||||||
Recoveries | 600 | 25,289 | 549 | 5,934 | 32,372 | ||||||||||||||
Ending Balance | $ | 1,141,471 | $ | 1,023,550 | $ | 761,138 | $ | 5,832,479 | $ | 8,758,638 |
Nine Months Ended September 30, 2019 | |||||||||||||||||||
Residential Real Estate | Consumer | Commercial Business | Commercial Real Estate | Total | |||||||||||||||
Beginning Balance | $ | 1,191,443 | $ | 1,203,593 | $ | 923,600 | $ | 5,853,081 | $ | 9,171,717 | |||||||||
Provision for Loan Losses | (20,899 | ) | 82,715 | (176,443 | ) | 289,627 | 175,000 | ||||||||||||
Charge-Offs | (34,599 | ) | (367,753 | ) | (1,132 | ) | (428,164 | ) | (831,648 | ) | |||||||||
Recoveries | 5,526 | 104,995 | 15,113 | 117,935 | 243,569 | ||||||||||||||
Ending Balance | $ | 1,141,471 | $ | 1,023,550 | $ | 761,138 | $ | 5,832,479 | $ | 8,758,638 |
Three Months Ended September 30, 2018 | |||||||||||||||||||
Residential Real Estate | Consumer | Commercial Business | Commercial Real Estate | Total | |||||||||||||||
Beginning Balance | $ | 1,309,069 | $ | 1,213,774 | $ | 1,077,433 | $ | 5,010,900 | $ | 8,611,176 | |||||||||
Provision for Loan Losses | 128,753 | (21,106 | ) | (144,996 | ) | 187,349 | 150,000 | ||||||||||||
Charge-Offs | (27,489 | ) | (27,181 | ) | — | (117,822 | ) | (172,492 | ) | ||||||||||
Recoveries | — | 8,519 | — | 4,875 | 13,394 | ||||||||||||||
Ending Balance | $ | 1,410,333 | $ | 1,174,006 | $ | 932,437 | $ | 5,085,302 | $ | 8,602,078 |
Nine Months Ended September 30, 2018 | |||||||||||||||||||
Residential Real Estate | Consumer | Commercial Business | Commercial Real Estate | Total | |||||||||||||||
Beginning Balance | $ | 1,233,843 | $ | 1,144,815 | $ | 1,011,227 | $ | 4,831,733 | $ | 8,221,618 | |||||||||
Provision for Loan Losses | 217,702 | 51,275 | (46,272 | ) | (72,705 | ) | 150,000 | ||||||||||||
Charge-Offs | (41,419 | ) | (118,207 | ) | (32,518 | ) | (127,712 | ) | (319,856 | ) | |||||||||
Recoveries | 207 | 96,123 | — | 453,986 | 550,316 | ||||||||||||||
Ending Balance | $ | 1,410,333 | $ | 1,174,006 | $ | 932,437 | $ | 5,085,302 | $ | 8,602,078 |
Allowance For Loan Losses | |||||||||||
September 30, 2019 | Individually Evaluated For Impairment | Collectively Evaluated For Impairment | Total | ||||||||
Residential Real Estate | $ | — | $ | 1,141,471 | $ | 1,141,471 | |||||
Consumer | — | 1,023,550 | 1,023,550 | ||||||||
Commercial Business | — | 761,138 | 761,138 | ||||||||
Commercial Real Estate | 565,000 | 5,267,479 | 5,832,479 | ||||||||
Total | $ | 565,000 | $ | 8,193,638 | $ | 8,758,638 |
Allowance For Loan Losses | |||||||||||
December 31, 2018 | Individually Evaluated For Impairment | Collectively Evaluated For Impairment | Total | ||||||||
Residential Real Estate | $ | — | $ | 1,191,443 | $ | 1,191,443 | |||||
Consumer | 73,662 | 1,129,931 | 1,203,593 | ||||||||
Commercial Business | — | 923,600 | 923,600 | ||||||||
Commercial Real Estate | 665,000 | 5,188,081 | 5,853,081 | ||||||||
Total | $ | 738,662 | $ | 8,433,055 | $ | 9,171,717 |
Loans Receivable | |||||||||||
September 30, 2019 | Individually Evaluated For Impairment | Collectively Evaluated For Impairment | Total | ||||||||
Residential Real Estate | $ | 1,125,232 | $ | 84,645,598 | $ | 85,770,830 | |||||
Consumer | 132,538 | 55,133,023 | 55,265,561 | ||||||||
Commercial Business | 64,406 | 26,861,034 | 26,925,440 | ||||||||
Commercial Real Estate | 3,000,884 | 296,353,767 | 299,354,651 | ||||||||
Total | $ | 4,323,060 | $ | 462,993,422 | $ | 467,316,482 |
Loans Receivable | |||||||||||
December 31, 2018 | Individually Evaluated For Impairment | Collectively Evaluated For Impairment | Total | ||||||||
Residential Real Estate | $ | 1,700,861 | $ | 82,264,555 | $ | 83,965,416 | |||||
Consumer | 1,060,043 | 55,847,512 | 56,907,555 | ||||||||
Commercial Business | 77,206 | 28,009,480 | 28,086,686 | ||||||||
Commercial Real Estate | 6,526,015 | 269,434,423 | 275,960,438 | ||||||||
Total | $ | 9,364,125 | $ | 435,555,970 | $ | 444,920,095 |
September 30, 2019 | December 31, 2018 | ||||||||||||||||||
Impaired Loans | Recorded Investment | Unpaid Principal Balance | Related Allowance | Recorded Investment | Unpaid Principal Balance | Related Allowance | |||||||||||||
With No Related Allowance Recorded: | |||||||||||||||||||
Residential Real Estate | $ | 1,125,232 | $ | 1,125,232 | $ | — | $ | 1,700,861 | $ | 1,700,861 | $ | — | |||||||
Consumer | 132,538 | 140,838 | — | 986,380 | 994,680 | — | |||||||||||||
Commercial Business | 64,406 | 959,406 | — | 77,206 | 972,206 | — | |||||||||||||
Commercial Real Estate | 2,003,894 | 2,296,850 | — | 5,084,458 | 6,116,761 | — | |||||||||||||
With an Allowance Recorded: | |||||||||||||||||||
Consumer | — | — | — | 73,662 | 73,662 | 73,662 | |||||||||||||
Commercial Real Estate | 996,990 | 1,396,990 | 565,000 | 1,441,558 | 1,441,558 | 665,000 | |||||||||||||
Total | |||||||||||||||||||
Residential Real Estate | 1,125,232 | 1,125,232 | — | 1,700,861 | 1,700,861 | — | |||||||||||||
Consumer | 132,538 | 140,838 | — | 1,060,042 | 1,068,342 | 73,662 | |||||||||||||
Commercial Business | 64,406 | 959,406 | — | 77,206 | 972,206 | — | |||||||||||||
Commercial Real Estate | 3,000,884 | 3,693,840 | 565,000 | 6,526,016 | 7,558,319 | 665,000 | |||||||||||||
Total | $ | 4,323,060 | $ | 5,919,316 | $ | 565,000 | $ | 9,364,125 | $ | 11,299,728 | $ | 738,662 |
Three Months Ended September 30, | |||||||||||||
2019 | 2018 | ||||||||||||
Impaired Loans | Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | |||||||||
With No Related Allowance Recorded: | |||||||||||||
Residential Real Estate | $ | 1,133,768 | $ | — | $ | 1,967,761 | $ | — | |||||
Consumer | 204,782 | — | 957,392 | — | |||||||||
Commercial Business | 70,406 | — | 78,206 | — | |||||||||
Commercial Real Estate | 2,320,973 | 14,377 | 9,926,344 | 42,699 | |||||||||
With an Allowance Recorded: | |||||||||||||
Commercial Real Estate | 996,990 | — | — | — | |||||||||
Total | |||||||||||||
Residential Real Estate | 1,133,768 | — | 1,967,761 | — | |||||||||
Consumer | 204,782 | — | 957,392 | — | |||||||||
Commercial Business | 70,406 | — | 78,206 | — | |||||||||
Commercial Real Estate | 3,317,963 | 14,377 | 9,926,344 | 42,699 | |||||||||
Total | $ | 4,726,919 | $ | 14,377 | $ | 12,929,703 | $ | 42,699 |
Nine Months Ended September 30, | |||||||||||||
2019 | 2018 | ||||||||||||
Impaired Loans | Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | |||||||||
With No Related Allowance Recorded: | |||||||||||||
Residential Real Estate | $ | 1,336,122 | $ | — | $ | 2,407,872 | $ | 10,585 | |||||
Consumer | 1,052,347 | — | 1,043,893 | — | |||||||||
Commercial Business | 73,526 | — | 87,284 | — | |||||||||
Commercial Real Estate | 2,830,359 | 42,709 | 10,495,262 | 162,763 | |||||||||
With an Allowance Recorded: | |||||||||||||
Commercial Real Estate | 1,125,904 | — | — | — | |||||||||
Total | |||||||||||||
Residential Real Estate | 1,336,122 | — | 2,407,872 | 10,585 | |||||||||
Consumer | 1,052,347 | — | 1,043,893 | — | |||||||||
Commercial Business | 73,526 | — | 87,284 | — | |||||||||
Commercial Real Estate | 3,956,263 | 42,709 | 10,495,262 | 162,763 | |||||||||
Total | $ | 6,418,258 | $ | 42,709 | $ | 14,034,311 | $ | 173,348 |
Actual | For Capital Adequacy | To Be "Well-Capitalized" | |||||||||||||||
(Dollars in Thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||
September 30, 2019 | |||||||||||||||||
Tier 1 Risk-Based Core Capital (To Risk Weighted Assets) | $ | 91,013 | 15.7% | $ | 34,791 | 6.0% | $ | 46,389 | 8.0% | ||||||||
Total Risk-Based Capital (To Risk Weighted Assets) | 98,273 | 16.9% | 46,389 | 8.0% | 57,986 | 10.0% | |||||||||||
Common Equity Tier 1 Capital (To Risk Weighted Assets) | 91,013 | 15.7% | 26,094 | 4.5% | 37,691 | 6.5% | |||||||||||
Tier 1 Leverage (Core) Capital (To Adjusted Tangible Assets) | 91,013 | 9.3% | 39,274 | 4.0% | 49,092 | 5.0% | |||||||||||
December 31, 2018 | |||||||||||||||||
Tier 1 Risk-Based Core Capital (To Risk Weighted Assets) | $ | 89,188 | 16.2% | $ | 33,005 | 6.0% | $ | 44,007 | 8.0% | ||||||||
Total Risk-Based Capital (To Risk Weighted Assets) | 96,092 | 17.5% | 44,007 | 8.0% | 55,009 | 10.0% | |||||||||||
Common Equity Tier 1 Capital (To Risk Weighted Assets) | 89,188 | 16.2% | 24,754 | 4.5% | 35,756 | 6.5% | |||||||||||
Tier 1 Leverage (Core) Capital (To Adjusted Tangible Assets) | 89,188 | 9.8% | 36,486 | 4.0% | 45,608 | 5.0% |
Level 1 - | Quoted Market Price in Active Markets Valuation is based upon quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market, as well as U.S. Treasuries and money market funds. |
Level 2 - | Significant Other Observable Inputs Valuation is based upon quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments, mortgage-backed securities, municipal bonds, corporate debt securities and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes certain derivative contracts. |
Level 3 - | Significant Unobservable Inputs Valuation is generated from model-based techniques that use at least one significant assumption based on unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. |
September 30, 2019 | December 31, 2018 | ||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||
Student Loan Pools | $ | — | $ | 41,243,338 | $ | — | $ | — | $ | 12,885,501 | $ | — | |||||||||||
SBA Bonds | — | 120,976,425 | — | — | 125,446,531 | — | |||||||||||||||||
Tax Exempt Municipal Bonds | — | 47,516,986 | — | — | 61,330,369 | — | |||||||||||||||||
Taxable Municipal Bonds | — | 2,017,055 | — | — | 1,977,885 | — | |||||||||||||||||
Mortgage-Backed Securities | — | 226,273,389 | — | — | 184,460,551 | — | |||||||||||||||||
State Tax Credit | — | 61,242 | — | — | — | — | |||||||||||||||||
Equity Securities | — | 155,000 | — | — | 155,000 | — | |||||||||||||||||
Total | $ | — | $ | 438,243,435 | $ | — | $ | — | $ | 386,255,837 | $ | — |
September 30, 2019 | |||||||||||||||
Assets: | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Mortgage Loans Held For Sale | $ | — | $ | 3,682,876 | $ | — | $ | 3,682,876 | |||||||
Collateral Dependent Impaired Loans (1) | — | — | 3,749,734 | 3,749,734 | |||||||||||
Foreclosed Assets | — | — | 703,540 | 703,540 | |||||||||||
Total | $ | — | $ | 3,682,876 | $ | 4,453,274 | $ | 8,136,150 |
December 31, 2018 | |||||||||||||||
Assets: | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Mortgage Loans Held For Sale | $ | — | $ | 1,781,985 | $ | — | $ | 1,781,985 | |||||||
Collateral Dependent Impaired Loans (1) | — | — | 8,613,570 | 8,613,570 | |||||||||||
Foreclosed Assets | — | — | 722,442 | 722,442 | |||||||||||
Total | $ | — | $ | 1,781,985 | $ | 9,336,012 | $ | 11,117,997 |
Valuation | Significant | |||||
Level 3 Assets | Fair Value | Technique | Unobservable Inputs | Range | ||
Collateral Dependent Impaired Loans | $ | 3,749,734 | Appraised Value | Discount Rates/ Discounts to Appraised Values | 4% - 97% | |
Foreclosed Assets | $ | 703,540 | Appraised Value/Comparable Sales | Discount Rates/ Discounts to Appraised Values | 16% - 68% |
September 30, 2019 | Carrying | Fair Value | |||||||||||||||||
(In Thousands) | Amount | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Financial Assets: | |||||||||||||||||||
Cash and Cash Equivalents | $ | 13,793 | $ | 13,793 | $ | 13,793 | $ | — | $ | — | |||||||||
Certificates of Deposits with Other Banks | 950 | 950 | — | 950 | — | ||||||||||||||
Investment and Mortgage-Backed Securities | 459,660 | 460,197 | — | 460,197 | — | ||||||||||||||
Loans Receivable, Net | 453,641 | 450,165 | — | — | 450,165 | ||||||||||||||
FHLB Stock | 2,853 | 2,853 | 2,853 | — | — | ||||||||||||||
Financial Liabilities: | |||||||||||||||||||
Deposits: | |||||||||||||||||||
Checking, Savings & Money Market Accounts | $ | 534,622 | $ | 534,622 | $ | 534,622 | $ | — | $ | — | |||||||||
Certificate Accounts | 279,999 | 279,987 | — | 279,987 | — | ||||||||||||||
Advances from FHLB | 47,800 | 47,920 | — | 47,920 | — | ||||||||||||||
Other Borrowed Money | 14,989 | 14,989 | 14,989 | — | — | ||||||||||||||
Senior Convertible Debentures | 6,044 | 6,044 | — | 6,044 | — | ||||||||||||||
Junior Subordinated Debentures | 5,155 | 5,155 | — | 5,155 | — |
December 31, 2018 | Carrying | Fair Value | |||||||||||||||||
(In Thousands) | Amount | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Financial Assets: | |||||||||||||||||||
Cash and Cash Equivalents | $ | 12,706 | $ | 12,706 | $ | 12,706 | $ | — | $ | — | |||||||||
Certificates of Deposits with Other Banks | 1,200 | 1,200 | — | 1,200 | — | ||||||||||||||
Investment and Mortgage-Backed Securities | 409,894 | 409,505 | — | 409,505 | — | ||||||||||||||
Loans Receivable, Net | 430,054 | 421,379 | — | — | 421,379 | ||||||||||||||
FHLB Stock | 2,204 | 2,204 | 2,204 | — | — | ||||||||||||||
Financial Liabilities: | |||||||||||||||||||
Deposits: | |||||||||||||||||||
Checking, Savings & Money Market Accounts | $ | 529,043 | $ | 529,043 | $ | 529,043 | $ | — | $ | — | |||||||||
Certificate Accounts | 238,454 | 236,103 | — | 236,103 | — | ||||||||||||||
Advances from FHLB | 34,030 | 33,771 | — | 33,771 | — | ||||||||||||||
Other Borrowed Money | 10,698 | 10,698 | 10,698 | — | — | ||||||||||||||
Note Payable | 2,363 | 2,363 | — | 2,363 | — | ||||||||||||||
Senior Convertible Debentures | 6,064 | 6,064 | — | 6,064 | — | ||||||||||||||
Junior Subordinated Debentures | 5,155 | 5,155 | — | 5,155 | — |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Non-interest income: | |||||||||||||||
Service fees on deposit accounts | $ | 279,360 | $ | 262,821 | $ | 785,987 | $ | 770,493 | |||||||
Check card fee income | 365,659 | 320,708 | 1,063,314 | 966,365 | |||||||||||
Trust income | 270,000 | 249,000 | 787,200 | 725,000 | |||||||||||
Insurance commissions (1) | 201,253 | 196,817 | 528,246 | 525,153 | |||||||||||
Gain on sale of investment securities, net (1) | 96,057 | — | 1,056,959 | 436,304 | |||||||||||
Gain on sale of loans, net (1) | 580,220 | 345,396 | 1,126,551 | 999,045 | |||||||||||
BOLI income (1) | 273,609 | 135,000 | 543,609 | 405,000 | |||||||||||
Grant income (1) | 55,364 | 318,102 | 332,393 | 318,102 | |||||||||||
Other non-interest income (1) | 286,935 | 241,837 | 872,591 | 712,785 | |||||||||||
Total non-interest income | $ | 2,408,457 | $ | 2,069,681 | $ | 7,096,850 | $ | 5,858,247 | |||||||
(1) Not within the scope of ASC 606 |
Year | Cash Payments | Lease Expense | Liability Reduction | ||||||
2019 | $ | 443,858 | $ | 458,364 | $ | 458,364 | |||
2020 | 434,395 | 448,568 | 448,568 | ||||||
2021 | 425,078 | 438,771 | 438,771 | ||||||
2022 | 436,496 | 438,771 | 438,771 | ||||||
2023 | 448,299 | 438,771 | 438,771 | ||||||
Thereafter | 1,317,256 | 1,282,137 | 1,282,137 | ||||||
Total | $ | 3,505,382 | $ | 3,505,382 | $ | 3,505,382 |
• | the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and changes in our allowance for loan losses and provision for loan losses that may be affected by deterioration in the housing and commercial real estate markets which may lead to increased losses and non-performing assets in our loan portfolio, and may result in our allowance for loan losses not being adequate to cover actual losses, and require us to materially increase our allowance for loan losses; |
• | changes in general economic conditions, either nationally or in our market areas; |
• | changes in the levels of general interest rates, and the relative differences between short and long term interest rates, deposit interest rates, our net interest margin and funding sources; |
• | fluctuations in the demand for loans, the number of unsold homes, land and other properties and fluctuations in real estate values in our market areas; |
• | secondary market conditions for loans and our ability to originate loans for sale and sell loans in the secondary market; |
• | results of examinations of the Company by the Federal Reserve and our bank subsidiary by the FDIC and the South Carolina State Board of Financial Institutions, or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our reserve for loan losses, write-down assets, change our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits, or impose additional requirements or restrictions on us, any of which could adversely affect our liquidity and earnings; |
• | legislative or regulatory changes that adversely affect our business, including the effect of the Dodd-Frank Wall Street Reform and Consumer Protection Act; changes in regulatory policies and principles, or the interpretation of regulatory capital requirements or other rules, including as a result of Basel III; |
• | our ability to attract and retain deposits; |
• | our ability to control operating costs and expenses; |
• | our ability to implement our business strategies; |
• | the use of estimates in determining the fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; |
• | difficulties in reducing risks associated with the loans on our balance sheet; |
• | staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our workforce and potential associated charges; |
• | disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform several of our critical processing; |
• | our ability to retain key members of our senior management team; |
• | costs and effects of litigation, including settlements and judgments; |
• | our ability to manage loan delinquency rates; |
• | increased competitive pressures among financial services companies; |
• | changes in consumer spending, borrowing and savings habits; |
• | the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; |
• | our ability to pay dividends on our common stock; |
• | adverse changes in the securities markets; |
• | inability of key third-party providers to perform their obligations to us; |
• | changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the FASB, including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; and |
• | other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services and the other risks described elsewhere in this document. |
Increase (Decrease) | |||||||||||||
(Dollars in thousands) | 9/30/2019 | 12/31/2018 | $ | % | |||||||||
Cash and Cash Equivalents | $ | 13,793 | $ | 12,706 | $ | 1,087 | 8.6% | ||||||
Certificates of Deposits with Other Banks | 950 | 1,200 | (250 | ) | (20.8) | ||||||||
Investments and MBS – AFS | 438,243 | 386,256 | 51,987 | 13.5 | |||||||||
Investments and MBS – HTM | 21,417 | 23,638 | (2,221 | ) | (9.4) | ||||||||
Loans Receivable, Net | 453,641 | 430,054 | 23,587 | 5.5 | |||||||||
OREO | 704 | 722 | (18 | ) | (2.5) | ||||||||
Operating Lease Right-of-Use Assets | 2,811 | — | 2,811 | 100.0 | |||||||||
Premises and Equipment, Net | 26,378 | 24,175 | 2,203 | 9.1 | |||||||||
FHLB Stock | 2,853 | 2,204 | 649 | 29.4 | |||||||||
BOLI | 21,367 | 21,238 | 129 | 0.6 | |||||||||
Other Assets | 4,425 | 5,495 | (1,070 | ) | (19.5) |
9/30/19 | 12/31/18 | Increase (Decrease) | ||||||||||||||
(Dollars in thousands) | Balance | Weighted Rate | Balance | Weighted Rate | $ | % | ||||||||||
Demand Accounts: | ||||||||||||||||
Checking | $ | 240,644 | 0.05% | $ | 219,515 | 0.09% | $ | 21,129 | 9.6% | |||||||
Money Market | 242,665 | 0.77 | 261,136 | 0.65 | (18,471 | ) | (7.1) | |||||||||
Savings | 51,313 | 0.16 | 48,392 | 0.14 | 2,921 | 6.0 | ||||||||||
Total | $ | 534,622 | 0.36% | $ | 529,043 | 0.31% | $ | 5,579 | 1.1% | |||||||
Certificate Accounts | ||||||||||||||||
0.00 – 0.99% | $ | 31,807 | $ | 70,855 | $ | (39,048 | ) | (55.1)% | ||||||||
1.00 – 1.99% | 112,246 | 120,012 | (7,766 | ) | (6.5) | |||||||||||
2.00 – 2.99% | 135,946 | 47,587 | 88,359 | 185.7 | ||||||||||||
Total | $ | 279,999 | 1.82% | $ | 238,454 | 1.37% | $ | 41,545 | 17.4% | |||||||
Total Deposits | $ | 814,621 | 0.86% | $ | 767,497 | 0.64% | $ | 47,124 | 6.1% |
September 30, 2019 | December 31, 2018 | Increase (Decrease) | ||||||||||||
Year Due: | Balance | Rate | Balance | Rate | $ | % | ||||||||
2019 | $ | 4,000,000 | 1.62% | $ | 23,530,000 | 1.55% | $ | (19,530,000 | ) | (83.0)% | ||||
2020 | 18,800,000 | 2.01 | 10,500,000 | 1.91 | 8,300,000 | 79.0 | ||||||||
2021 | 25,000,000 | 1.97 | — | — | 25,000,000 | 100.0 | ||||||||
Total Advances | $ | 47,800,000 | 1.96% | $ | 34,030,000 | 1.66% | $ | 13,770,000 | 40.5% |
Three Months Ended September 30, | Change in Average Balance | Change in Tax Equivalent Interest Income | ||||||||||||||
2019 | 2018 | |||||||||||||||
(Dollars in thousands) | Average Balance | Yield(1) | Average Balance | Yield(1) | ||||||||||||
Loans Receivable, Net | $ | 451,652 | 5.64% | $ | 432,807 | 5.44% | $ | 18,845 | $ | 479 | ||||||
Mortgage-Backed Securities | 243,003 | 2.98 | 195,986 | 2.76 | 47,017 | 457 | ||||||||||
Investment Securities(2) | 216,458 | 2.80 | 197,877 | 2.68 | 18,581 | 192 | ||||||||||
Overnight Time and Certificates of Deposit | 1,157 | 1.41 | 7,528 | 1.34 | (6,371 | ) | (21 | ) | ||||||||
Total Interest-Earning Assets | $ | 912,270 | 4.25% | $ | 834,197 | 4.12% | $ | 78,073 | $ | 1,107 |
Three Months Ended September 30, | Change in Average Balance | Change in Interest Expense | ||||||||||||||||
2019 | 2018 | |||||||||||||||||
(Dollars in thousands) | Average Balance | Cost(1) | Average Balance | Cost(1) | ||||||||||||||
Now and Money Market Accounts | $ | 372,976 | 0.58% | $ | 360,644 | 0.36 | % | $ | 12,332 | $ | 216 | |||||||
Savings Accounts | 51,034 | 0.15 | 48,571 | 0.12 | 2,463 | 5 | ||||||||||||
Certificate Accounts | 268,803 | 1.79 | 237,851 | 1.19 | 30,952 | 498 | ||||||||||||
FHLB Advances and Other Borrowed Money | 76,769 | 1.83 | 52,651 | 1.19 | 24,118 | 195 | ||||||||||||
Note Payable | — | — | 4,317 | 4.80 | (4,317 | ) | (52 | ) | ||||||||||
Junior Subordinated Debentures | 5,155 | 4.15 | 5,155 | 4.13 | — | — | ||||||||||||
Senior Convertible Debentures | 6,044 | 8.00 | 6,064 | 8.00 | (20 | ) | — | |||||||||||
Total Interest-Bearing Liabilities | $ | 780,781 | 1.17% | $ | 715,253 | 0.80 | % | $ | 65,528 | $ | 862 |
Three Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Beginning Balance | $ | 8,753,539 | $ | 8,611,176 | |||
Provision for Loan Losses | 75,000 | 150,000 | |||||
Charge-offs | (102,273) | (172,492) | |||||
Recoveries | 32,372 | 13,394 | |||||
Net (Charge-offs) Recoveries | (69,901) | (159,098) | |||||
Ending Balance | $ | 8,758,638 | $ | 8,602,078 | |||
At Period End: | September 30, 2019 | September 30, 2018 | |||||
Allowance For Loan Losses as a % of Gross Loans Receivable (1) | 1.9% | 2.0% | |||||
Allowance For Loan Losses as a % of Impaired Loans | 202.6% | 68.3% | |||||
Impaired Loans | $ | 4,323,060 | $ | 12,595,869 | |||
Gross Loans Receivable, Held For Investment (1) | $ | 458,717,257 | $ | 431,844,768 | |||
Total Loans Receivable, Net | $ | 453,641,495 | $ | 423,979,788 |
Three Months Ended September 30, | Increase (Decrease) | |||||||||||
2019 | 2018 | $ | % | |||||||||
Gain on Sale of Investment Securities | $ | 96,057 | $ | — | $ | 96,057 | 100.0 | % | ||||
Gain on Sale of Loans | 580,220 | 345,396 | 234,824 | 68.0 | ||||||||
Service Fees on Deposit Accounts | 279,360 | 262,821 | 16,539 | 6.3 | ||||||||
Commissions From Insurance Agency | 201,253 | 196,817 | 4,436 | 2.3 | ||||||||
BOLI Income | 273,609 | 135,000 | 138,609 | 102.7 | ||||||||
Trust Income | 270,000 | 249,000 | 21,000 | 8.4 | ||||||||
Check Card Fee Income | 365,659 | 320,708 | 44,951 | 14.0 | ||||||||
Grant Income | 55,364 | 318,102 | (262,738 | ) | 1.0 | |||||||
Other | 286,935 | 241,837 | 45,098 | 18.6 | ||||||||
Total Non-Interest Income | $ | 2,408,457 | $ | 2,069,681 | $ | 338,776 | 16.4 | % |
Three Months Ended September 30, | Increase (Decrease) | ||||||||||
2019 | 2018 | Amounts | Percent | ||||||||
Compensation and Employee Benefits | $ | 4,270,515 | $ | 4,032,245 | $ | 238,270 | 5.9% | ||||
Occupancy | 599,512 | 586,527 | 12,985 | 2.2 | |||||||
Advertising | 190,070 | 181,663 | 8,407 | 4.6 | |||||||
Depreciation and Maintenance of Equipment | 644,800 | 575,750 | 69,050 | 12.0 | |||||||
FDIC Insurance Premiums | 41,540 | 72,837 | (31,297 | ) | (43.0) | ||||||
Net Cost (Recovery) of Operation of OREO | 189,467 | (203,104 | ) | 392,571 | (193.3) | ||||||
Other | 1,053,219 | 1,171,664 | (118,445 | ) | (10.1) | ||||||
Total Non-Interest Expense | $ | 6,989,123 | $ | 6,417,582 | $ | 571,541 | 8.9% |
Nine Months Ended September 30, | Change in Average Balance | Increase in Interest Income | |||||||||||||||
2019 | 2018 | ||||||||||||||||
(Dollars in Thousands) | Average Balance | Yield(1) | Average Balance | Yield(1) | |||||||||||||
Loans Receivable, Net | $ | 439,704 | 5.59 | % | $ | 421,795 | 5.36% | $ | 17,909 | $ | 1,454 | ||||||
Mortgage-Backed Securities | 222,326 | 2.99 | 198,421 | 2.65 | 23,905 | 1,035 | |||||||||||
Investment Securities(2) | 211,909 | 2.84 | 196,191 | 2.45 | 15,718 | 898 | |||||||||||
Overnight Time & Certificates of Deposit | 4,661 | 2.69 | 4,882 | 1.16 | (221 | ) | 52 | ||||||||||
Total Interest-Earning Assets | $ | 878,600 | 4.25 | % | $ | 821,289 | 3.99% | $ | 57,311 | $ | 3,439 |
Nine Months Ended September 30, | Change in Average Balance | Change in Interest Expense | ||||||||||||||||
2019 | 2018 | |||||||||||||||||
(Dollars in Thousands) | Average Balance | Yield(1) | Average Balance | Yield(1) | ||||||||||||||
Now and Money Market Accounts | $ | 374,396 | 0.57% | $ | 354,309 | 0.29 | % | $ | 20,087 | $ | 823 | |||||||
Savings Accounts | 50,223 | 0.14 | 46,216 | 0.11 | 4,007 | 16 | ||||||||||||
Certificates Accounts | 257,247 | 1.65 | 233,486 | 1.06 | 23,761 | 1,325 | ||||||||||||
FHLB Advances and Other Borrowed Money | 56,528 | 1.59 | 58,660 | 1.17 | (2,132 | ) | 163 | |||||||||||
Note Payable | 902 | 5.25 | 5,709 | 4.46 | (4,807 | ) | (155 | ) | ||||||||||
Junior Subordinated Debentures | 5,155 | 4.31 | 5,155 | 3.81 | — | 19 | ||||||||||||
Senior Convertible Debentures | 6,046 | 8.00 | 6,064 | 8.00 | (18 | ) | (1 | ) | ||||||||||
Total Interest-Bearing Liabilities | $ | 750,497 | 1.08 | % | $ | 709,599 | 0.73 | % | $ | 40,898 | $ | 2,190 |
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Beginning Balance | $ | 9,171,717 | $ | 8,221,618 | |||
Provision for Loan Losses | 175,000 | 150,000 | |||||
Charge-offs | (831,648) | (319,856) | |||||
Recoveries | 243,569 | 550,316 | |||||
Net (Charge-offs) Recoveries | (588,079) | 230,460 | |||||
Ending Balance | $ | 8,758,638 | $ | 8,602,078 |
Nine Months Ended September 30, | Increase (Decrease) | |||||||||||
2019 | 2018 | $ | % | |||||||||
Gain on Sale of Investment Securities | $ | 1,056,959 | $ | 436,304 | $ | 620,655 | 142.3 | % | ||||
Gain on Sale of Loans | 1,126,551 | 999,045 | 127,506 | 12.8 | ||||||||
Service Fees on Deposit Accounts | 785,987 | 770,493 | 15,494 | 2.0 | ||||||||
BOLI Income | 543,609 | 405,000 | 138,609 | 34.2 | ||||||||
Commissions From Insurance Agency | 528,246 | 525,153 | 3,093 | 0.6 | ||||||||
Trust Income | 787,200 | 725,000 | 62,200 | 8.6 | ||||||||
Check Card Fee Income | 1,063,314 | 966,365 | 96,949 | 10.0 | ||||||||
Grant Income | 332,393 | 318,102 | 14,291 | 4.5 | ||||||||
Other | 872,591 | 712,785 | 159,806 | 22.4 | ||||||||
Total Non-Interest Income | $ | 7,096,850 | $ | 5,858,247 | $ | 1,238,603 | 21.1 | % |
Nine Months Ended September 30, | Increase (Decrease) | |||||||||||
2019 | 2018 | $ | % | |||||||||
Compensation and Employee Benefits | $ | 12,587,421 | $ | 11,683,664 | $ | 903,757 | 7.7 | % | ||||
Occupancy | 1,728,732 | 1,677,970 | 50,762 | 3.0 | ||||||||
Advertising | 539,234 | 455,753 | 83,481 | 18.3 | ||||||||
Depreciation and Maintenance of Equipment | 1,894,997 | 1,673,470 | 221,527 | 13.2 | ||||||||
FDIC Insurance Premiums | 184,022 | 206,218 | (22,196 | ) | (10.8 | ) | ||||||
Net Benefit of Operation of OREO | (62,680 | ) | (362,864 | ) | 300,184 | (82.7 | ) | |||||
Other | 4,103,020 | 3,842,576 | 260,444 | 6.8 | ||||||||
Total Non-Interest Expense | $ | 20,974,746 | $ | 19,176,787 | $ | 1,797,959 | 9.4 | % |
(Dollars in thousands) | One Month or Less | One Through Three Months | Three Through Twelve Months | Total Within One Year | Greater Than One Year | Total | ||||||||||||
Unused Lines of Credit | $ | 134 | $ | 1,700 | $ | 33,556 | $ | 35,390 | $ | 63,161 | $ | 98,551 | ||||||
Standby Letters of Credit | — | — | 1,146 | 1,146 | 214 | 1,360 | ||||||||||||
Total | $ | 134 | $ | 1,700 | $ | 34,702 | $ | 36,536 | $ | 63,375 | $ | 99,911 |
3.1 | ||
3.2 | ||
4.1 | Form of Stock Certificate of the Company and other instruments defining the rights of security holders, including indentures (3) | |
4.2 | ||
4.3 | ||
10.1 | 1993 Salary Continuation Agreements (5) | |
10.2 | Amendment One to 1993 Salary Continuation Agreements (6) | |
10.3 | ||
10.4 | ||
10.5 |
10.6 | ||
10.7 | ||
10.8 | ||
10.9 | ||
10.10 | ||
10.11 | Incentive Compensation Plan (5) | |
31.1 | ||
31.2 | ||
32 | ||
101 | The following materials from Security Federal Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, formatted in Extensible Business Reporting Language (XBRL): (a) Consolidated Balance Sheets; (b) Consolidated Statements of Income; (c) Consolidated Statements of Comprehensive Income (Loss); (d) Consolidated Statements of Changes in Shareholders’ Equity; (e) Consolidated Statements of Cash Flows; and (f) Notes to Consolidated Financial Statements |
(1) | Filed on June 26, 1998, as an exhibit to the Company’s Proxy Statement and incorporated herein by reference. |
(2) | Filed on January 16, 2015 as an exhibit to the Company’s Current Report on Form 8-K dated January 15, 2015 and incorporated herein by reference. |
(3) | Filed on August 12, 1987, as an exhibit to the Company’s Registration Statement on Form 8-A and incorporated herein by reference. |
(4) | Filed on July 13, 2009 as an exhibit to the Company’s Registration Statement on Form S-1 (File No. 333-160553) and incorporated herein by reference. |
(5) | Filed on June 28, 1993, as an exhibit to the Company’s Annual Report on Form 10-KSB and incorporated herein by reference. |
(6) | Filed as an exhibit to the Company’s Quarterly Report on Form 10-QSB for the quarter ended September 30, 1993 and incorporated herein by reference. |
(7) | Filed on May 24, 2006 as an exhibit to the Company’s Current Report on Form 8-K dated May 18, 2006 and incorporated herein by reference. |
(8) | Filed on March 2, 2000, as an exhibit to the Company's Registration Statement on Form S-8 and incorporated herein by reference |
(9) | Filed on January 3, 2003, as an exhibit to the Company's Registration Statement on Form S-8 and incorporated herein by reference. |
(10) | Filed on August 22, 2006, as an exhibit to the Company's Registration Statement on Form S-8 (Registration Statement No. 333-136813) and incorporated herein by reference. |
(11) | Filed on November 12, 2008, as an exhibit to the Company's Registration Statement on Form S-8 and incorporated herein by reference. |
(12) | Filed on March 28, 2018, as an exhibit to the Company’s Proxy Statement and incorporated herein by reference. |
Date: | November 14, 2019 | By: | /s/J. Chris Verenes | ||
J. Chris Verenes | |||||
Chief Executive Officer | |||||
Duly Authorized Representative |
Date: | November 14, 2019 | By: | /s/Jessica T. Cummins | ||
Jessica T. Cummins | |||||
Chief Financial Officer | |||||
Duly Authorized Representative |
1. | I have reviewed this quarterly report on Form 10-Q of Security Federal 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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this 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(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/J. Chris Verenes | |
J. Chris Verenes | |
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Security Federal 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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this 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(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/Jessica T. Cummins | |
Jessica T. Cummins | |
Chief Financial Officer |
1. | the report fully complies with the requirements of Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, and |
2. | the information contained in the report fairly presents, in all material respects, the company's financial condition and results of operations. |
/s/J. Chris Verenes | /s/Jessica T. Cummins | |
J. Chris Verenes | Jessica T. Cummins | |
Chief Executive Officer | Chief Financial Officer |
Critical Accounting Policies |
9 Months Ended |
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Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Critical Accounting Policies | Critical Accounting Policies The Company has adopted various accounting policies, which govern the application of accounting principles generally accepted in the United States in the preparation of our financial statements. Our significant accounting policies are described in the footnotes to the audited consolidated financial statements at December 31, 2018 included in our 2018 Annual Report to Shareholders. Certain accounting policies involve significant judgments and assumptions by management, which have a material impact on the carrying value of certain assets and liabilities, and, as such, have a greater possibility of producing results that could be materially different than originally reported. We consider these accounting policies to be critical accounting policies. The judgments and assumptions we use are based on historical experience and other factors, which we believe to be reasonable under the circumstances. Because of the nature of the judgments and assumptions we make, actual results could differ from these judgments and estimates which could have a material impact on our carrying values of assets and liabilities and our results of operations. The Company believes the allowance for loan losses is a critical accounting policy that requires the most significant judgments and estimates used in preparation of the consolidated financial statements. The impact of an unexpected and sudden large loss could deplete the allowance and potentially require increased provisions to replenish the allowance, which would negatively affect earnings. The Company provides for loan losses using the allowance method. Accordingly, all loan losses are charged to the related allowance and all recoveries are credited to the allowance for loan losses. Additions to the allowance for loan losses are provided by charges to operations based on various factors, which, in management’s judgment, deserve current recognition in estimating possible losses. Such factors considered by management include the fair value of the underlying collateral, stated guarantees by the borrower (if applicable), the borrower’s ability to repay from other economic resources, growth and composition of the loan portfolio, the relationship of the allowance for loan losses to the outstanding loans, loss experience, delinquency trends, and general economic conditions. Management evaluates the carrying value of the loans periodically and the allowance is adjusted accordingly. 3. Critical Accounting Policies, Continued While management uses the best information available to make evaluations, future adjustments may be necessary if economic conditions differ substantially from the assumptions used in making these evaluations. The allowance for loan losses is subject to periodic evaluations by our bank regulatory agencies, including the Board of Governors of the Federal Reserve System ("Federal Reserve"), the FDIC and the South Carolina Board of Financial Institutions, that may require adjustments to be made to the allowance based upon the information that is available at the time of their examination. The Company values impaired loans at the loan’s fair value if it is probable that the Company will be unable to collect all amounts due according to the terms of the loan agreement at the present value of expected cash flows, the market price of the loan, if available, or the value of the underlying collateral. Expected cash flows are required to be discounted at the loan’s effective interest rate. When the ultimate collectibility of an impaired loan’s principal is in doubt, wholly or partially, all cash receipts are applied to principal. When this doubt does not exist, cash receipts are applied under the contractual terms of the loan agreement first to interest and then to principal. Once the recorded principal balance has been reduced to zero, future cash receipts are applied to interest income to the extent that any interest has been foregone. Further cash receipts are recorded as recoveries of any amounts previously charged off. The Company uses assumptions and estimates in determining income taxes payable or refundable for the current year, deferred income tax liabilities and assets for events recognized differently in its financial statements and income tax returns, and income tax expense. Determining these amounts requires analysis of certain transactions and interpretation of tax laws and regulations. The Company exercises considerable judgment in evaluating the amount and timing of recognition of the resulting tax liabilities and assets. These judgments and estimates are reevaluated on a continual basis as regulatory and business factors change. No assurance can be given that either the tax returns submitted by us or the income tax reported on the Consolidated Financial Statements will not be adjusted by either adverse rulings by the United States Tax Court, changes in the tax code, or assessments made by the Internal Revenue Service. |
Investment and Mortgage-Backed Securities, Held to Maturity |
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Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment and Mortgage-Backed Securities, Held to Maturity | 7. Investment and Mortgage-Backed Securities, Held to Maturity The amortized cost, gross unrealized gains, gross unrealized losses, and fair values of held to maturity securities at the dates indicated below were as follows:
(1) COMPRISED OF MORTGAGE-BACKED SECURITIES OF GSEs OR GNMA The FHLB, FHLMC and the Federal National Mortgage Association ("FNMA") are government sponsored enterprises ("GSEs") and the securities and bonds issued by GSEs are not backed by the full faith and credit of the United States government. At September 30, 2019, the Bank held an amortized cost and fair value of $12.0 million and $12.4 million, respectively, in GNMA mortgage-backed securities classified as held to maturity, which are included in the table above, compared to an amortized cost and fair value of $13.3 million and $13.1 million, respectively, at December 31, 2018. The Company has not invested in any private label mortgage-backed securities classified as held to maturity. At September 30, 2019, the amortized cost and fair value of mortgage-backed securities held to maturity that were pledged as collateral for certain deposit accounts, FHLB advances and other borrowings were $19.6 million and $20.1 million, respectively, compared to an amortized cost and fair value of $19.8 million and $19.4 million, respectively, at December 31, 2018. 7. Investment and Mortgage-Backed Securities, Held to Maturity, Continued The amortized cost and fair value of investment and mortgage-backed securities held to maturity at September 30, 2019 are shown below by contractual maturity. Expected maturities will differ from contractual maturities because borrowers have the right to prepay obligations with or without call or prepayment penalties. Since mortgage-backed securities are not due at a single maturity date, they are disclosed separately, rather than allocated over the maturity groupings set forth in the table below.
The following tables show gross unrealized losses, fair value, and length of time that individual held to maturity securities have been in a continuous unrealized loss position at the dates indicated below.
(1) COMPRISED OF MORTGAGE-BACKED SECURITIES OF GSEs OR GNMA
(1) COMPRISED OF MORTGAGE-BACKED SECURITIES OF GSEs OR GNMA The Company’s held to maturity portfolio is recorded at amortized cost. The Company has the ability and intent to hold these securities to maturity. |
Non-interest Income (Notes) |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Other Expense Disclosure [Text Block] | 12. Non-Interest Income The Company recognizes revenue as it is earned and noted no impact to its revenue recognition policies as a result of the adoption of ASU 2014-09. The following is a discussion of key revenues within the scope of this guidance. Revenue Recognition In accordance with Topic 606, revenues are recognized when control of promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services that are promised within each contract and identifies those that contain performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. 12. Non-Interest Income, Continued Deposit Fees The Bank earns fees from its deposit customers for account maintenance, transaction-based and overdraft services. Account maintenance fees consist primarily of account fees and analyzed account fees charged on deposit accounts on a monthly basis. The performance obligation is satisfied and the fees are recognized on a monthly basis as the service period is completed. Transaction-based fees on deposits accounts are charged to deposit customers for specific services provided to the customer, such as non-sufficient funds fees, overdraft fees, and wire fees. The performance obligation is completed as the transaction occurs and the fees are recognized at the time each specific service is provided to the customer. Check Card Fee Income Check card fee income represents fees earned when a debit card issued by the Bank is used. The Bank earns interchange fees from debit cardholder transactions through the Mastercard payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. The performance obligation is satisfied and the fees are earned when the cost of the transaction is charged to the card. Certain expenses directly associated with the debit card are recorded on a net basis with the fee income. Trust Income Trust income includes monthly advisory fees that are based on assets under management and certain transaction fees that are assessed and earned monthly, concurrently with the investment management services provided to the customer. The Bank does not charge performance based fees for its trust services and does not currently have any institutional clients, hedge funds or mutual funds. Although trust income is included within the scope of ASC 606, based on the fees charged by the Bank, there were no changes in the accounting for trust income at this time. Gains/Losses on OREO Sales Gains/losses on the sale of OREO are included in non-interest expense and are generally recognized when the performance obligation is complete. This is typically at delivery of control over the property to the buyer at the time of each real estate closing. The following table presents the Company's non-interest income for the three and nine months ended September 30, 2019 and 2018. All of the Company’s revenue from contracts with customers within the scope of ASC 606 is recognized in non-interest income, with the exception of gains on the sale of OREO, which are included in non-interest expense when applicable.
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Stock-Based Compensation (Stock Option Plans) (Details) - $ / shares |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2018 |
Sep. 30, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Options Exercised, Shares | 0 | (450) |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | (1,650) | (4,050) |
Balance, End of Period, Shares | 0 | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 0.00 | $ 22.91 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price | 22.91 | 22.91 |
Balance, End of Period, Weighted Avg. Exercise Price | $ 0.00 | $ 0.00 |
Carrying Amounts and Fair Value of Financial Instruments (Significant unobservable inputs used in the fair value measurements) (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2019 |
Dec. 31, 2018 |
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Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||
Other Real Estate Owned (OREO) | $ 703,540 | $ 703,540 | $ 722,442 | |||||||
Fair Value, Measurements, Nonrecurring | ||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||
Assets, Fair Value Disclosure, Nonrecurring (Deprecated 2018-01-31) | $ 8,136,150 | 8,136,150 | 11,117,997 | |||||||
Impaired Loans [Member] | Fair Value, Measurements, Nonrecurring | ||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||
Assets, Fair Value Disclosure, Nonrecurring (Deprecated 2018-01-31) | [1] | 8,613,570 | ||||||||
Significant Unobservable Inputs | Discount Rates/ Discounts to Appraised Values | |||||||||
Foreclosed Assets | Fair Value, Measurements, Nonrecurring | ||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||
Assets, Fair Value Disclosure, Nonrecurring (Deprecated 2018-01-31) | $ 703,540 | $ 703,540 | 722,442 | |||||||
Significant Unobservable Inputs | Discount Rates/ Discounts to Appraised Values | |||||||||
Minimum | Impaired Loans [Member] | Fair Value, Measurements, Nonrecurring | ||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||
Significant Unobservable Inputs, Percentage Range | 7.00% | |||||||||
Minimum | Foreclosed Assets | Fair Value, Measurements, Nonrecurring | ||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||
Significant Unobservable Inputs, Percentage Range | 13.00% | |||||||||
Maximum | Impaired Loans [Member] | Fair Value, Measurements, Nonrecurring | ||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||
Significant Unobservable Inputs, Percentage Range | 97.00% | |||||||||
Maximum | Foreclosed Assets | Fair Value, Measurements, Nonrecurring | ||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||
Significant Unobservable Inputs, Percentage Range | 100.00% | |||||||||
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Nonrecurring | ||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||
Assets, Fair Value Disclosure, Nonrecurring (Deprecated 2018-01-31) | $ 4,453,274 | $ 4,453,274 | 9,336,012 | |||||||
Fair Value, Inputs, Level 3 | Impaired Loans [Member] | Fair Value, Measurements, Nonrecurring | ||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||
Assets, Fair Value Disclosure, Nonrecurring (Deprecated 2018-01-31) | $ 3,749,734 | [2] | $ 3,749,734 | [2] | 8,613,570 | [1] | ||||
Fair Value, Inputs, Level 3 | Foreclosed Assets | Fair Value, Measurements, Nonrecurring | ||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||
Assets, Fair Value Disclosure, Nonrecurring (Deprecated 2018-01-31) | $ 722,442 | |||||||||
|
Loans Receivable, Net (Schedule of Allowance for Loan Losses) (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||
Balance At Beginning of Period | $ 8,753,539 | $ 8,611,176 | $ 9,171,717 | $ 8,221,618 |
Provision for Loan Losses | 75,000 | 150,000 | 175,000 | 150,000 |
Charge Offs | (102,273) | (172,492) | (831,648) | (319,856) |
Recoveries | 32,372 | 13,394 | 243,569 | 550,316 |
Balance At End of Period | 8,758,638 | 8,602,078 | 8,758,638 | 8,602,078 |
Residential Real Estate 1 [Member] | ||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||
Balance At Beginning of Period | 1,125,812 | 1,309,069 | 1,191,443 | 1,233,843 |
Provision for Loan Losses | 15,059 | 128,753 | (20,899) | 217,702 |
Charge Offs | 0 | (27,489) | (34,599) | (41,419) |
Recoveries | 600 | 0 | 5,526 | 207 |
Balance At End of Period | 1,141,471 | 1,410,333 | 1,141,471 | 1,410,333 |
Consumer [Member] | ||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||
Balance At Beginning of Period | 1,092,327 | 1,213,774 | 1,203,593 | 1,144,815 |
Provision for Loan Losses | 8,207 | (21,106) | 82,715 | 51,275 |
Charge Offs | (102,273) | (27,181) | (367,753) | (118,207) |
Recoveries | 25,289 | 8,519 | 104,995 | 96,123 |
Balance At End of Period | 1,023,550 | 1,174,006 | 1,023,550 | 1,174,006 |
Commercial Business [Member] | ||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||
Balance At Beginning of Period | 896,843 | 1,077,433 | 923,600 | 1,011,227 |
Provision for Loan Losses | (136,254) | (144,996) | (176,443) | (46,272) |
Charge Offs | 0 | 0 | (1,132) | (32,518) |
Recoveries | 549 | 0 | 15,113 | 0 |
Balance At End of Period | 761,138 | 932,437 | 761,138 | 932,437 |
Commercial Real Estate 1 [Member] | ||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||
Balance At Beginning of Period | 5,638,557 | 5,010,900 | 5,853,081 | 4,831,733 |
Provision for Loan Losses | 187,988 | 187,349 | 289,627 | (72,705) |
Charge Offs | 0 | (117,822) | (428,164) | (127,712) |
Recoveries | 5,934 | 4,875 | 117,935 | 453,986 |
Balance At End of Period | $ 5,832,479 | $ 5,085,302 | $ 5,832,479 | $ 5,085,302 |
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) |
Sep. 30, 2019 |
Dec. 31, 2018 |
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Statement of Financial Position [Abstract] | ||
Amortized Cost of Investment And Mortgage-Backed Securities Available For Sale | $ 429,828,361 | $ 386,296,513 |
Fair Value of Investment And Mortgage-Backed Securities Held To Maturity | 21,953,200 | 23,249,400 |
Allowance For Loan Losses | $ 8,758,638 | $ 9,171,717 |
Serial Preferred Stock Par Value Per Share | $ 0.01 | $ 0.01 |
Serial Preferred Stock Shares Authorized | 200,000 | 200,000 |
Serial Preferred Stock Shares Issued | 0 | 22,000 |
Serial Preferred Stock Shares Outstanding | 0 | 22,000 |
Common Stock Par Value Per Share | $ 0.01 | $ 0.01 |
Common Stock Shares Authorized | 5,000,000 | 5,000,000 |
Common Stock Shares Issued | 3,157,310 | 3,154,829 |
Common Stock, Shares, Outstanding | 2,956,377 | 2,953,896 |
Treasury Stock Shares Held | 200,933 | 200,933 |
Stock-Based Compensation (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity under stock option plans |
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Options outstanding |
Carrying Amounts and Fair Value of Financial Instruments (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurements, recurring basis | Assets measured at fair value on a recurring basis were as follows at September 30, 2019 and December 31, 2018:
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Fair value measurements, nonrecurring basis | The tables below present assets measured at fair value on a nonrecurring basis at September 30, 2019 and December 31, 2018, aggregated by the level in the fair value hierarchy within which those measurements fall.
(1) COLLATERAL IMPAIRED LOANS ARE REPORTED NET OF SPECIFIC RESERVES OF $565,000 AND $739,000 AT SEPTEMBER 30, 2019 AND DECEMBER 31, 2018, RESPECTIVELY. |
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Significant unobservable inputs used in the fair value measurements | For Level 3 assets and liabilities measured at fair value on a recurring or non-recurring basis at September 30, 2019, the significant unobservable inputs used in the fair value measurements were as follows:
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Summary of the carrying value and estimated fair value of financial instruments | The following tables provide a summary of the carrying value and estimated fair value of the Company’s financial instruments at September 30, 2019 and December 31, 2018 presented in accordance with the applicable accounting guidance.
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Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
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Statement of Comprehensive Income [Abstract] | ||||
Other Comprehensive Income, Amortization on Unrealized Gain on AFS Transfer to HTM, Tax | $ (1,095) | $ (6,000) | $ (6,368) | $ (23,718) |
Other Comprehensive Income (Loss), Securities, Available-for-Sale, Unrealized Holding Gain (Loss) Arising During Period, Tax | 421,086 | (618,601) | ||
Other Comprehensive Income (Loss), Securities, Available-for-sale, Tax | 2,341,270 | (1,804,885) | ||
Other Comprehensive Income (Loss), Available-for-sale Securities, before Reclassification Adjustments, Tax | $ 24,014 | $ 0 | ||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax | $ 264,240 | $ 109,076 |
Consolidated Balance Sheets (Unaudited) - USD ($) |
Sep. 30, 2019 |
Dec. 31, 2018 |
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ASSETS: | ||
Cash and Cash Equivalents | $ 13,793,394 | $ 12,705,910 |
Certificates of Deposit with Other Banks | 950,005 | 1,200,010 |
Investment and Mortgage-Backed Securities: | ||
Available For Sale (AFS) | 438,243,435 | 386,255,837 |
Investment and Mortgage-Backed Securities, Held to Maturity | 21,416,599 | 23,638,013 |
Total Investments And Mortgage-Backed Securities | 459,660,034 | 409,893,850 |
Loans Receivable, Net: | ||
Held For Sale | 3,682,876 | 1,781,985 |
Loans and Leases Receivable, Net Amount | 449,958,619 | 428,271,532 |
Total Loans Receivable, Net | 453,641,495 | 430,053,517 |
Accrued Interest Receivable: | ||
Loans | 1,149,852 | 1,257,683 |
Mortgage-Backed Securities | 601,984 | 591,849 |
Investment Securities | 1,728,088 | 1,877,844 |
Total Accrued Interest Receivable | 3,479,924 | 3,727,376 |
Operating Lease, Right-of-Use Asset | 2,811,157 | 0 |
Premises and Equipment, Net | 26,377,920 | 24,174,707 |
Federal Home Loan Bank (FHLB) Stock, at Cost | 2,852,900 | 2,204,000 |
Other Real Estate Owned (OREO) | 703,540 | 722,442 |
Bank Owned Life Insurance (BOLI) | 21,366,647 | 21,237,893 |
Goodwill | 1,199,754 | 1,199,754 |
Other Assets | 4,424,714 | 5,494,800 |
Total Assets | 991,261,484 | 912,614,259 |
Liabilities: | ||
Deposit Accounts | 814,620,366 | 767,496,707 |
Advance Payments By Borrowers For Taxes And Insurance | 599,108 | 258,505 |
Advances From FHLB | 47,800,000 | 34,030,000 |
Other Borrowings | 14,988,524 | 10,698,429 |
Junior Subordinated Debentures | 5,155,000 | |
Junior Subordinated Debentures | 5,155,000 | 5,155,000 |
Notes Payable | 0 | 2,362,500 |
Senior Convertible Debentures | 6,044,000 | |
Senior Convertible Debentures | 6,044,000 | 6,064,000 |
Operating Lease, Liability | 2,829,652 | 0 |
Other Liabilities | 6,922,828 | 6,030,685 |
Total Liabilities | 898,959,478 | 832,095,826 |
Shareholders' Equity: | ||
Common Stock, $.01 Par Value; Authorized 5,000,000 Shares; Issued and Outstanding Shares, 3,156,858 and 2,955,925, Respectively, at June 30, 2019 and 3,154,829 and 2,953,896, Respectively, at December 31, 2018 | 31,573 | 31,548 |
Additional Paid-In Capital | 12,294,432 | 12,235,341 |
Treasury Stock, at Cost (200,933 Shares) | (4,330,712) | (4,330,712) |
Accumulated Other Comprehensive Income (Loss) (AOCI) | 6,331,710 | (27,909) |
Retained Earnings | 77,975,003 | 72,610,165 |
Total Shareholders' Equity | 92,302,006 | 80,518,433 |
Total Liabilities and Shareholders' Equity | $ 991,261,484 | $ 912,614,259 |
Earnings Per Common Share (Tables) |
9 Months Ended |
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Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Reconciliation of net income to net income available to common shareholders |
Regulatory Matters (Tables) |
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Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory capital amounts and ratios |
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Carrying Amounts and Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Amounts and Fair Value of Financial Instruments | Carrying Amounts and Fair Value of Financial Instruments GAAP requires the Company to disclose fair value of financial instruments measured at amortized cost on the balance sheet and to measure that fair value using an exit price notion, the price that would be received for an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date under current market conditions. Accounting guidance emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, the guidance establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).
The following is a description of the valuation methodologies used for assets and liabilities recorded at fair value. Investment Securities Available for Sale Investment securities available for sale are recorded at fair value on a recurring basis. At September 30, 2019, the Company’s investment portfolio was comprised of student loan pools, government and agency bonds, mortgage-backed securities issued by government agencies or GSEs, private label CMO mortgage-backed securities, municipal securities, one state tax credit, and one equity investment. Fair value measurement is based upon prices obtained from third party pricing services that use independent pricing models which rely on a variety of factors including reported trades, broker/dealer quotes, benchmark yields, economic and industry events and other relevant market information. As a result, these securities are classified as Level 2. Mortgage Loans Held for Sale The Company originates fixed rate residential loans on a servicing released basis in the secondary market. Loans closed but not yet settled with the FHLMC or other investors, are carried in the Company’s loans held for sale portfolio. These loans are fixed rate residential loans that have been originated in the Company’s name and have closed. Virtually all of these loans have commitments to be purchased by investors and the majority of these loans were locked in by price with the investors on the same day or shortly thereafter that the loan was locked in with the Company’s customers. Therefore, these loans present very little market risk for the Company. The Company usually delivers a commitment to, and receives funding from, the investor within 30 days. Commitments to sell these loans to the investor are considered derivative contracts and are sold to investors on a “best efforts" basis. The Company is not obligated to deliver a loan or pay a penalty if a loan is not delivered to the investor. As a result of the short-term nature of these derivative contracts, the fair value of the mortgage loans held for sale in most cases is the same as the value of the loan amount at its origination. These loans are classified as Level 2. 10. Carrying Amounts and Fair Value of Financial Instruments, Continued Impaired Loans The Company does not record loans held for investment at fair value on a recurring basis. However, from time to time, a loan is considered impaired and an allowance for loan losses is established as necessary. 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 impairment by determining the fair value of the collateral for the loan. Fair value is estimated using one of the following methods: fair value of the collateral less estimated costs to sell, discounted cash flows, or market value of the loan based on similar debt. The fair value of the collateral less estimated costs to sell is the most frequently used method. Typically, the Company reviews the most recent appraisal and if it is over 24 months old will request a new third party appraisal. Depending on the particular circumstances surrounding the loan, including the location of the collateral, the date of the most recent appraisal and the value of the collateral relative to the recorded investment in the loan, management may order an independent appraisal immediately or, in some instances, may elect to perform an internal analysis. Specifically as an example, in situations where the collateral on a nonperforming commercial real estate loan is out of the Company’s primary market area, management would typically order an independent appraisal immediately, at the earlier of the date the loan becomes nonperforming or immediately following the determination that the loan is impaired. However, as a second example, on a nonperforming commercial real estate loan where management is familiar with the property and surrounding areas and where the original appraisal value far exceeds the recorded investment in the loan, management may perform an internal analysis whereby the previous appraisal value would be reviewed and adjusted for current conditions including recent sales of similar properties in the area and any other relevant economic trends. These valuations are reviewed at a minimum on a quarterly basis. 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. At September 30, 2019, our impaired loans were generally evaluated based on the fair value of the collateral. Impaired loans where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy. The Company records impaired loans as nonrecurring Level 3. At September 30, 2019 and December 31, 2018, the recorded investment in impaired loans was $4.3 million and $9.4 million, respectively. Foreclosed Assets Foreclosed assets are adjusted to fair value upon transfer of the loans to foreclosed assets. Subsequently, foreclosed assets are carried at the lower of carrying value or fair value. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. Foreclosed assets are recorded as nonrecurring Level 3. Assets measured at fair value on a recurring basis were as follows at September 30, 2019 and December 31, 2018:
There were no liabilities measured at fair value on a recurring basis at either September 30, 2019 or December 31, 2018. 10. Carrying Amounts and Fair Value of Financial Instruments, Continued The Company may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis. These include assets that are measured at the lower of cost or market that were recognized at fair value below cost at the end of the period. The tables below present assets measured at fair value on a nonrecurring basis at September 30, 2019 and December 31, 2018, aggregated by the level in the fair value hierarchy within which those measurements fall.
(1) COLLATERAL IMPAIRED LOANS ARE REPORTED NET OF SPECIFIC RESERVES OF $565,000 AND $739,000 AT SEPTEMBER 30, 2019 AND DECEMBER 31, 2018, RESPECTIVELY. There were no liabilities measured at fair value on a nonrecurring basis at either September 30, 2019 or December 31, 2018. For Level 3 assets and liabilities measured at fair value on a recurring or non-recurring basis at September 30, 2019, the significant unobservable inputs used in the fair value measurements were as follows:
For assets and liabilities not presented on the balance sheet at fair value, the following methods are used to determine fair value: Cash and Cash Equivalents—The carrying amount of these financial instruments approximates fair value. All mature within 90 days and do not present unanticipated credit concerns. Certificates of Deposit with Other Banks—Fair value is based on market prices for similar assets. Investment Securities Held to Maturity—Securities held to maturity are valued at quoted market prices or dealer quotes. Loans Receivable, Net—The fair value of loans are estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. As discount rates are based on current loan rates as well as management estimates, the fair values presented may not be indicative of the value negotiated in an actual sale. FHLB Stock—The fair value approximates the carrying value. Deposits—The fair value of demand deposits, savings accounts, and money market accounts is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposits is estimated by discounting the future cash flows using rates currently offered for deposits of similar remaining maturities. 10. Carrying Amounts and Fair Value of Financial Instruments, Continued FHLB Advances—Fair value is estimated using discounted cash flows with current market rates for borrowings with similar terms. Other Borrowed Money—The carrying value of these short term borrowings approximates fair value. Note Payable—The carrying value of the note payable approximates fair value. Senior Convertible Debentures— The fair value is estimated by discounting the future cash flows using the current rates at which similar debenture offerings with similar terms and maturities would be issued by similar institutions. As discount rates are based on current debenture rates as well as management estimates, the fair values presented may not be indicative of the value negotiated in an actual sale. Junior Subordinated Debentures—The carrying value of junior subordinated debentures approximates fair value. The following tables provide a summary of the carrying value and estimated fair value of the Company’s financial instruments at September 30, 2019 and December 31, 2018 presented in accordance with the applicable accounting guidance.
10. Carrying Amounts and Fair Value of Financial Instruments, Continued At September 30, 2019, the Bank had $99.9 million in off-balance sheet financial commitments. These commitments are to originate loans and unused consumer lines of credit and credit card lines. Because these obligations are based on current market rates, if funded, the original principal amount is considered to be a reasonable estimate of fair value. Fair value estimates are made on a specific date, based on relevant market data and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale the Bank’s entire holdings of a particular financial instrument. Because no active market exists for a significant portion of the Bank’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, current interest rates and prepayment trends, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in any of these assumptions used in calculating fair value would also significantly affect the estimates. Fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For example, the Bank has significant assets and liabilities that are not considered financial assets or liabilities including deposit franchise values, loan servicing portfolios, deferred tax liabilities, and premises and equipment. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of these estimates. The Company has used management’s best estimate of fair value on the above assumptions. Thus, the fair values presented may not be the amounts, which could be realized, in an immediate sale or settlement of the instrument. In addition, any income taxes or other expenses that would be incurred in an actual sale or settlement are not taken into consideration in the fair value presented. |
Principles of Consolidation |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation |
Investment and Mortgage-Backed Securities, Available for Sale |
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Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment and Mortgage-Backed Securities, Available for Sale | Investment and Mortgage-Backed Securities, Available For Sale The amortized cost, gross unrealized gains, gross unrealized losses, and fair values of investment and mortgage-backed securities available for sale at the dates indicated were as follows:
Student Loan Pools are typically 97% guaranteed by the United States government while SBA bonds are 100% backed by the full faith and credit of the United States government. Included in the tables above and below in mortgage-backed securities are Government National Mortgage Association ("GNMA") mortgage-backed securities, which are also backed by the full faith and credit of the United States government. At September 30, 2019, AFS GNMA mortgage-backed securities had an amortized cost and fair value of $84.2 million and $85.1 million, respectively, compared to an amortized cost and fair value of $80.4 million and $80.2 million, respectively, at December 31, 2018. Also included in mortgage-backed securities in the tables above and below are private label collateralized mortgage obligation ("CMO") securities, which are issued by non-governmental real estate mortgage investment conduits and are not backed by the full faith and credit of the United States government. At September 30, 2019 the Bank held AFS private label CMO mortgage-backed securities with an amortized cost and fair value of $25.1 million and $25.4 million, respectively, compared to an amortized cost and fair value of $29.7 million and $29.5 million, respectively, at December 31, 2018. 6. Investment and Mortgage-Backed Securities, Available For Sale, Continued The amortized cost and fair value of investment and mortgage-backed securities available for sale at September 30, 2019 are shown below by contractual maturity. Expected maturities will differ from contractual maturities because borrowers have the right to prepay obligations with or without call or prepayment penalties. Since mortgage-backed securities are not due at a single maturity date, they are disclosed separately, rather than allocated over the maturity groupings set forth in the table below.
At September 30, 2019 the amortized cost and fair value of investment and mortgage-backed securities available for sale pledged as collateral for certain deposit accounts, FHLB advances and other borrowings were $145.1 million and $147.5 million, respectively, compared to an amortized cost and fair value of $111.8 million and $111.7 million, respectively, at December 31, 2018. The Company received $70.8 million and $28.6 million in gross proceeds from sales of available for sale securities during the nine months ended September 30, 2019 and 2018, respectively. As a result, the Company recognized gross gains of $1.3 million and $503,000 during the nine months ended September 30, 2019 and 2018, respectively, with $288,000 and $67,000 gross losses recognized for the same periods, respectively. The following tables show gross unrealized losses and fair value, aggregated by investment category, and length of time that the individual available for sale securities were in a continuous unrealized loss position at the dates indicated.
6. Investment and Mortgage-Backed Securities, Available For Sale, Continued Securities classified as available for sale are recorded at fair market value. At September 30, 2019 and December 31, 2018, 55.1% and 72.4% of the unrealized losses, representing 71 and 92 individual securities, respectively, consisted of securities in a continuous loss position for 12 months or more. The Company has the ability and intent to hold these securities until such time as the value recovers or the securities mature. The Company believes, based on industry analyst reports and credit ratings, that the deterioration in value is attributable to changes in market interest rates and is not in the credit quality of the issuer and therefore, these losses are not considered other-than-temporary. The Company reviews its investment securities portfolio at least quarterly and more frequently when economic conditions warrant, assessing whether there is any indication of other-than-temporary impairment (“OTTI”). Factors considered in the review include estimated future cash flows, length of time and extent to which market value has been less than cost, the financial condition and near term prospects of the issuer, and our intent and ability to retain the security to allow for an anticipated recovery in market value. If the review determines that there is OTTI, then an impairment loss is recognized in earnings equal to the entire difference between the investment’s cost and its fair value at the balance sheet date of the reporting period for which the assessment is made, or the Company may recognize a portion in other comprehensive income. The fair value of investments on which OTTI is recognized then becomes the new cost basis of the investment. There was no OTTI recognized during the nine months ended September 30, 2019. |
Investment and Mortgage-Backed Securities, Available for Sale (Narrative) (Details) |
9 Months Ended | 12 Months Ended | |
---|---|---|---|
Sep. 30, 2019
USD ($)
security
|
Sep. 30, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
security
|
|
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost of Investment And Mortgage-Backed Securities Available For Sale | $ 429,828,361 | $ 386,296,513 | |
Available-for-sale Securities, Fair Value Disclosure | 438,243,435 | 386,255,837 | |
Available For Sale Securities Pledged as Collateral, Amortized Cost Basis | 145,100,000 | $ 111,800,000 | |
Proceeds From Sale of Available For Sale Securities Including Mortgage Backed Securities | $ 70,800,000 | $ 28,600,000 | |
Percent of unrealized losses for securities in a continuous loss position for 12 months or more | 55.10% | 72.40% | |
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 71 | 92 | |
Available-for-sale Securities, Gross Realized Losses | $ 288,000 | 67,000 | |
GNMA Mortgage-Backed Securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost of Investment And Mortgage-Backed Securities Available For Sale | 84,200,000 | $ 80,400,000 | |
Available-for-sale Securities, Fair Value Disclosure | 85,100,000 | 80,200,000 | |
Mortgage-backed Securities, Issued by Private Enterprises [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost of Investment And Mortgage-Backed Securities Available For Sale | 25,100,000 | 29,700,000 | |
Available-for-sale Securities, Fair Value Disclosure | 25,400,000 | ||
Investments [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale Securities, Gross Realized Gains | $ 1,300,000 | $ 503,000 | $ 20,713 |
Stock-Based Compensation (Options Outstanding) (Details) - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2018 |
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 0 | 0 | 1,650 | 4,500 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 0.00 | $ 0.00 | $ 22.91 | $ 22.91 |
Options Exercised, Shares | 0 | (450) | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ 0.00 | $ 22.91 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | (1,650) | (4,050) | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price | $ 22.91 | $ 22.91 |
Carrying Amounts and Fair Value of Financial Instruments (Fair value measurements, nonrecurring basis) (Details) - USD ($) |
Sep. 30, 2019 |
Dec. 31, 2018 |
||||||
---|---|---|---|---|---|---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Other Real Estate, Foreclosed Assets, and Repossessed Assets | $ 703,540 | $ 722,442 | ||||||
Fair Value, Measurements, Nonrecurring | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | 8,136,150 | 11,117,997 | ||||||
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 1 | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | 0 | 0 | ||||||
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 2 [Member] | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | 3,682,876 | 1,781,985 | ||||||
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | 4,453,274 | 9,336,012 | ||||||
Mortgage Loans Held For Sale | Fair Value, Measurements, Nonrecurring | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | 3,682,876 | 1,781,985 | ||||||
Mortgage Loans Held For Sale | Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 1 | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | 0 | 0 | ||||||
Mortgage Loans Held For Sale | Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 2 [Member] | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | 3,682,876 | 1,781,985 | ||||||
Mortgage Loans Held For Sale | Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | 0 | 0 | ||||||
Collateral Dependent Impaired Loans (1) | Fair Value, Measurements, Nonrecurring | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | [1] | 8,613,570 | ||||||
Impaired financing receivable, related allowance | 565,000 | 738,662 | ||||||
Collateral Dependent Impaired Loans (1) | Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 1 | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | 0 | [2] | 0 | [1] | ||||
Collateral Dependent Impaired Loans (1) | Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 2 [Member] | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | 0 | [2] | 0 | [1] | ||||
Collateral Dependent Impaired Loans (1) | Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | 3,749,734 | [2] | 8,613,570 | [1] | ||||
Foreclosed Assets | Fair Value, Measurements, Nonrecurring | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | 703,540 | 722,442 | ||||||
Foreclosed Assets | Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 1 | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | 0 | 0 | ||||||
Foreclosed Assets | Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 2 [Member] | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | $ 0 | 0 | ||||||
Foreclosed Assets | Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | $ 722,442 | |||||||
|
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