Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED September 30, 2017. |
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o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO . |
Commission file number: 0-12820
AMERICAN NATIONAL BANKSHARES INC.
(Exact name of registrant as specified in its charter)
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VIRGINIA | | 54-1284688 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
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628 Main Street | | |
Danville, Virginia | | 24541 |
(Address of principal executive offices) | | (Zip Code) |
(434) 792-5111
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
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Large accelerated filer o | Accelerated filer x |
Non-accelerated filer o (Do not check if a smaller reporting company) |
Smaller reporting company o | Emerging growth company o |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
At October 30, 2017, the Company had 8,647,345 shares of Common Stock outstanding, $1 par value.
AMERICAN NATIONAL BANKSHARES INC.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
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American National Bankshares Inc. |
Consolidated Balance Sheets |
(Dollars in thousands, except per share data) |
| | | |
Assets | (Unaudited) September 30, 2017 | | (*) December 31, 2016 |
Cash and due from banks | $ | 26,949 |
| | $ | 20,268 |
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Interest-bearing deposits in other banks | 76,271 |
| | 32,939 |
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| | | |
Securities available for sale, at fair value | 272,205 |
| | 346,502 |
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Restricted stock, at cost | 5,509 |
| | 6,224 |
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Loans held for sale | 3,386 |
| | 5,996 |
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| | | |
Loans, net of unearned income | 1,295,154 |
| | 1,164,821 |
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Less allowance for loan losses | (13,858 | ) | | (12,801 | ) |
Net loans | 1,281,296 |
| | 1,152,020 |
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| | | |
Premises and equipment, net | 25,923 |
| | 25,439 |
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Other real estate owned, net of valuation allowance of $196 in 2017 and $192 in 2016 | 2,101 |
| | 1,328 |
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Goodwill | 43,872 |
| | 43,872 |
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Core deposit intangibles, net | 1,271 |
| | 1,719 |
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Bank owned life insurance | 18,491 |
| | 18,163 |
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Accrued interest receivable and other assets | 23,267 |
| | 24,168 |
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Total assets | $ | 1,780,541 |
| | $ | 1,678,638 |
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Liabilities | |
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Demand deposits -- noninterest bearing | $ | 402,100 |
| | $ | 378,600 |
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Demand deposits -- interest bearing | 225,279 |
| | 209,430 |
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Money market deposits | 336,752 |
| | 283,035 |
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Savings deposits | 124,025 |
| | 120,720 |
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Time deposits | 392,049 |
| | 378,855 |
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Total deposits | 1,480,205 |
| | 1,370,640 |
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Short-term borrowings: | | | |
Customer repurchase agreements | 43,240 |
| | 39,166 |
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Other short-term borrowings | — |
| | 20,000 |
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Long-term borrowings | 9,996 |
| | 9,980 |
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Junior subordinated debt | 27,800 |
| | 27,724 |
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Accrued interest payable and other liabilities | 9,086 |
| | 9,748 |
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Total liabilities | 1,570,327 |
| | 1,477,258 |
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Shareholders' equity | |
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Preferred stock, $5 par, 2,000,000 shares authorized, none outstanding | — |
| | — |
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Common stock, $1 par, 20,000,000 shares authorized, 8,647,345 shares outstanding at September 30, 2017 and 8,618,051 shares outstanding at December 31, 2016 | 8,600 |
| | 8,578 |
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Capital in excess of par value | 75,943 |
| | 75,076 |
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Retained earnings | 126,507 |
| | 119,600 |
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Accumulated other comprehensive loss, net | (836 | ) | | (1,874 | ) |
Total shareholders' equity | 210,214 |
| | 201,380 |
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Total liabilities and shareholders' equity | $ | 1,780,541 |
| | $ | 1,678,638 |
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(*) - Derived from audited consolidated financial statements.
The accompanying notes are an integral part of the consolidated financial statements.
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American National Bankshares Inc. |
Consolidated Statements of Income |
(Dollars in thousands, except per share data) (Unaudited) |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2017 | | 2016 | | 2017 | | 2016 |
Interest and Dividend Income: | | | | | | | |
Interest and fees on loans | $ | 14,394 |
| | $ | 12,032 |
| | $ | 40,850 |
| | $ | 35,789 |
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Interest and dividends on securities: | |
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Taxable | 1,108 |
| | 1,112 |
| | 3,395 |
| | 3,346 |
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Tax-exempt | 460 |
| | 767 |
| | 1,604 |
| | 2,407 |
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Dividends | 77 |
| | 74 |
| | 240 |
| | 258 |
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Other interest income | 235 |
| | 78 |
| | 469 |
| | 203 |
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Total interest and dividend income | 16,274 |
| | 14,063 |
| | 46,558 |
| | 42,003 |
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Interest Expense: | |
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Interest on deposits | 1,529 |
| | 1,291 |
| | 4,081 |
| | 3,902 |
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Interest on short-term borrowings | 52 |
| | 4 |
| | 94 |
| | 6 |
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Interest on long-term borrowings | 82 |
| | 81 |
| | 243 |
| | 243 |
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Interest on junior subordinated debt | 273 |
| | 223 |
| | 756 |
| | 644 |
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Total interest expense | 1,936 |
| | 1,599 |
| | 5,174 |
| | 4,795 |
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Net Interest Income | 14,338 |
| | 12,464 |
| | 41,384 |
| | 37,208 |
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Provision for Loan Losses | 440 |
| | 100 |
| | 1,090 |
| | 200 |
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Net Interest Income After Provision for Loan Losses | 13,898 |
| | 12,364 |
| | 40,294 |
| | 37,008 |
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Noninterest Income: | |
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Trust fees | 1,098 |
| | 938 |
| | 2,918 |
| | 2,829 |
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Service charges on deposit accounts | 513 |
| | 514 |
| | 1,498 |
| | 1,520 |
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Other fees and commissions | 727 |
| | 663 |
| | 2,172 |
| | 1,991 |
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Mortgage banking income | 612 |
| | 512 |
| | 1,603 |
| | 1,169 |
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Securities gains, net | — |
| | 73 |
| | 590 |
| | 661 |
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Brokerage fees | 219 |
| | 209 |
| | 603 |
| | 636 |
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Income from Small Business Investment Companies | 86 |
| | — |
| | 118 |
| | 238 |
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Gains (losses) on premises and equipment, net | 337 |
| | (1 | ) | | 337 |
| | (9 | ) |
Other | 212 |
| | 212 |
| | 584 |
| | 749 |
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Total noninterest income | 3,804 |
| | 3,120 |
| | 10,423 |
| | 9,784 |
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Noninterest Expense: | |
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Salaries | 5,072 |
| | 4,626 |
| | 14,604 |
| | 12,872 |
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Employee benefits | 1,112 |
| | 1,034 |
| | 3,425 |
| | 3,203 |
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Occupancy and equipment | 1,151 |
| | 1,004 |
| | 3,367 |
| | 3,162 |
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FDIC assessment | 138 |
| | 138 |
| | 401 |
| | 519 |
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Bank franchise tax | 276 |
| | 257 |
| | 795 |
| | 769 |
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Core deposit intangible amortization | 80 |
| | 213 |
| | 448 |
| | 789 |
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Data processing | 475 |
| | 437 |
| | 1,464 |
| | 1,340 |
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Software | 303 |
| | 301 |
| | 853 |
| | 872 |
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Other real estate owned, net | 62 |
| | 105 |
| | 173 |
| | 314 |
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Other | 2,041 |
| | 1,752 |
| | 6,332 |
| | 5,601 |
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Total noninterest expense | 10,710 |
| | 9,867 |
| | 31,862 |
| | 29,441 |
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Income Before Income Taxes | 6,992 |
| | 5,617 |
| | 18,855 |
| | 17,351 |
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Income Taxes | 2,205 |
| | 1,654 |
| | 5,726 |
| | 5,172 |
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Net Income | $ | 4,787 |
| | $ | 3,963 |
| | $ | 13,129 |
| | $ | 12,179 |
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Net Income Per Common Share: | |
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Basic | $ | 0.55 |
| | $ | 0.46 |
| | $ | 1.52 |
| | $ | 1.41 |
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Diluted | $ | 0.55 |
| | $ | 0.46 |
| | $ | 1.52 |
| | $ | 1.41 |
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Average Common Shares Outstanding: | |
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Basic | 8,644,310 |
| | 8,608,323 |
| | 8,639,433 |
| | 8,610,100 |
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Diluted | 8,663,246 |
| | 8,618,335 |
| | 8,657,891 |
| | 8,618,386 |
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The accompanying notes are an integral part of the consolidated financial statements.
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American National Bankshares Inc. |
Consolidated Statements of Comprehensive Income |
(Dollars in thousands) (Unaudited) |
| Three Months Ended September 30, |
| 2017 | | 2016 |
Net income | $ | 4,787 |
| | $ | 3,963 |
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Other comprehensive income (loss): | |
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Unrealized gains (losses) on securities available for sale | 296 |
| | (1,424 | ) |
Tax effect | (104 | ) | | 499 |
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Reclassification adjustment for gains on sales of securities | — |
| | (73 | ) |
Tax effect | — |
| | 25 |
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Other comprehensive income (loss) | 192 |
| | (973 | ) |
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Comprehensive income | $ | 4,979 |
| | $ | 2,990 |
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The accompanying notes are an integral part of the consolidated financial statements.
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American National Bankshares Inc. |
Consolidated Statements of Comprehensive Income |
(Dollars in thousands) (Unaudited) |
| Nine Months Ended September 30, |
| 2017 | | 2016 |
Net income | $ | 13,129 |
| | $ | 12,179 |
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Other comprehensive income: | |
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Unrealized gains on securities available for sale | 2,186 |
| | 1,381 |
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Tax effect | (765 | ) | | (483 | ) |
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Reclassification adjustment for gains on sales of securities | (590 | ) | | (661 | ) |
Tax effect | 207 |
| | 231 |
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Other comprehensive income | 1,038 |
| | 468 |
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Comprehensive income | $ | 14,167 |
| | $ | 12,647 |
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The accompanying notes are an integral part of the consolidated financial statements.
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American National Bankshares Inc. |
Consolidated Statements of Changes in Shareholders' Equity |
Nine Months Ended September 30, 2017 and 2016 |
(Dollars in thousands, except per share data) (Unaudited) |
| Common Stock | | Capital in Excess of Par Value | | Retained Earnings | | Accumulated Other Comprehensive Income (Loss) | | Total Shareholders' Equity |
Balance, December 31, 2015 | $ | 8,605 |
| | $ | 75,375 |
| | $ | 111,565 |
| | $ | 2,290 |
| | $ | 197,835 |
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Net income | — |
| | — |
| | 12,179 |
| | — |
| | 12,179 |
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Other comprehensive income | — |
| | — |
| | — |
| | 468 |
| | 468 |
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Stock repurchased (51,384 shares) | (51 | ) | | (1,241 | ) | | — |
| | — |
| | (1,292 | ) |
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Stock options exercised (4,134 shares) | 4 |
| | 97 |
| | — |
| | — |
| | 101 |
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Vesting of restricted stock (5,510 shares) | 5 |
| | (5 | ) | | — |
| | — |
| | — |
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Equity based compensation (35,984 shares) | 10 |
| | 613 |
| | — |
| | — |
| | 623 |
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Cash dividends paid, $0.72 per share | — |
| | — |
| | (6,201 | ) | | — |
| | (6,201 | ) |
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Balance, September 30, 2016 | $ | 8,573 |
| | $ | 74,839 |
| | $ | 117,543 |
| | $ | 2,758 |
| | $ | 203,713 |
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Balance, December 31, 2016 | $ | 8,578 |
| | $ | 75,076 |
| | $ | 119,600 |
| | $ | (1,874 | ) | | $ | 201,380 |
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Net income | — |
| | — |
| | 13,129 |
| | — |
| | 13,129 |
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Other comprehensive income | — |
| | — |
| | — |
| | 1,038 |
| | 1,038 |
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Stock options exercised (4,950 shares) | 5 |
| | 109 |
| | — |
| | — |
| | 114 |
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Vesting of restricted stock (7,086 shares) | 7 |
| | (7 | ) | | — |
| | — |
| | — |
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Equity based compensation (24,344 shares) | 10 |
| | 765 |
| | — |
| | — |
| | 775 |
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Cash dividends paid, $0.72 per share | — |
| | — |
| | (6,222 | ) | | — |
| | (6,222 | ) |
| | | | | | | | | |
Balance, September 30, 2017 | $ | 8,600 |
| | $ | 75,943 |
| | $ | 126,507 |
| | $ | (836 | ) | | $ | 210,214 |
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The accompanying notes are an integral part of the consolidated financial statements.
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American National Bankshares Inc. |
Consolidated Statements of Cash Flows |
(Dollars in thousands) (Unaudited) |
| Nine Months Ended September 30, |
| 2017 | | 2016 |
Cash Flows from Operating Activities: | | | |
Net income | $ | 13,129 |
| | $ | 12,179 |
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Adjustments to reconcile net income to net cash provided by operating activities: | |
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Provision for loan losses | 1,090 |
| | 200 |
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Depreciation | 1,394 |
| | 1,409 |
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Net accretion of acquisition accounting adjustments | (1,586 | ) | | (1,709 | ) |
Core deposit intangible amortization | 448 |
| | 789 |
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Net amortization of securities | 1,417 |
| | 2,034 |
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Net gains on sale or call of securities | (590 | ) | | (661 | ) |
Gain on sale of loans held for sale | (1,274 | ) | | (906 | ) |
Proceeds from sales of loans held for sale | 67,511 |
| | 53,266 |
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Originations of loans held for sale | (63,627 | ) | | (53,870 | ) |
Net (gain) loss on other real estate owned | (13 | ) | | 72 |
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Valuation allowance on other real estate owned | 86 |
| | 156 |
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Net (gain) loss on sale of premises and equipment | (337 | ) | | 9 |
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Equity based compensation expense | 775 |
| | 623 |
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Earnings on bank owned life insurance | (328 | ) | | (340 | ) |
Deferred income tax expense (benefit) | 792 |
| | (1,596 | ) |
Net change in interest receivable | 299 |
| | (458 | ) |
Net change in other assets | (749 | ) | | (211 | ) |
Net change in interest payable | 39 |
| | (18 | ) |
Net change in other liabilities | (701 | ) | | 156 |
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Net cash provided by operating activities | 17,775 |
| | 11,124 |
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Cash Flows from Investing Activities: | |
| | |
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Proceeds from sales of securities available for sale | 55,403 |
| | 9,317 |
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Proceeds from maturities, calls and paydowns of securities available for sale | 39,441 |
| | 116,254 |
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Purchases of securities available for sale | (19,778 | ) | | (137,314 | ) |
Net change in restricted stock | 715 |
| | (694 | ) |
Net increase in loans | (129,920 | ) | | (76,015 | ) |
Proceeds from sale of premises and equipment | 647 |
| | 1 |
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Purchases of premises and equipment | (2,188 | ) | | (536 | ) |
Proceeds from sales of other real estate owned | 387 |
| | 908 |
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Net cash used in investing activities | (55,293 | ) | | (88,079 | ) |
| | | |
Cash Flows from Financing Activities: | |
| | |
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Net change in demand, money market, and savings deposits | 96,371 |
| | 46,367 |
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Net change in time deposits | 13,194 |
| | (3,019 | ) |
Net change in customer repurchase agreements | 4,074 |
| | 3,479 |
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Net change in other short-term borrowings | (20,000 | ) | | 15,000 |
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Common stock dividends paid | (6,222 | ) | | (6,201 | ) |
Repurchase of common stock | — |
| | (1,292 | ) |
Proceeds from exercise of stock options | 114 |
| | 101 |
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Net cash provided by financing activities | 87,531 |
| | 54,435 |
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| | | |
Net Increase (Decrease) in Cash and Cash Equivalents | 50,013 |
| | (22,520 | ) |
| | | |
Cash and Cash Equivalents at Beginning of Period | 53,207 |
| | 95,337 |
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| | | |
Cash and Cash Equivalents at End of Period | $ | 103,220 |
| | $ | 72,817 |
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The accompanying notes are an integral part of the consolidated financial statements.
AMERICAN NATIONAL BANKSHARES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – Accounting Policies
The consolidated financial statements include the accounts of American National Bankshares Inc. (the "Company") and its wholly owned subsidiary, American National Bank and Trust Company (the "Bank"). The Bank offers a wide variety of retail, commercial, secondary market mortgage lending, and trust and investment services which also include non-deposit products such as mutual funds and insurance policies.
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, goodwill and intangible assets, unfunded pension liability, other-than-temporary impairment of securities, accounting for merger and acquisition activity, accounting for acquired loans with specific credit-related deterioration, the valuation of deferred tax assets and liabilities, and the valuation of other real estate owned ("OREO").
All significant inter-company transactions and accounts are eliminated in consolidation, with the exception of the AMNB Trust and the MidCarolina Trusts, as detailed in Note 8.
In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the results of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results that may occur for any other period. Certain reclassifications have been made to prior period balances to conform to the current period presentation. These reclassifications did not have an impact on net income and were considered immaterial. These statements should be read in conjunction with the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016.
Adoption of New Accounting Standard
During the first quarter of 2017, the Company adopted Accounting Standards Update ("ASU") 2016-09, "Compensation-Stock Compensation (Topic 718): Improvements to Employer Share-Based Payment Accounting." This ASU simplifies several aspects of the accounting for share-based payment award transactions, one of which is the recognition of excess tax benefits and deficiencies related to share-based payments, including tax benefits of dividends on share-based payment awards. Prior to the adoption of ASU 2016-09, such tax consequences were recognized as components of additional paid-in capital. With the adoption of this ASU, tax benefits and deficiencies are recognized within income tax expense. In accordance with the adoption provisions of ASU 2016-09, the results for the third quarter and first nine months of 2016 include only the excess tax (expense) benefits attributable to the third quarter and first nine months of 2016 in the amounts of $0 and $50,000, respectively.
Recent Accounting Pronouncements
In January 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." The amendments in ASU 2016-01, among other things: (1) requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (2) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (3) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables); and (4) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently assessing the impact that ASU 2016-01 will have on its consolidated financial statements.
In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)." Among other things, in the amendments in ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606,
Revenue from Contracts with Customers. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted upon issuance. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The Company is currently assessing the impact that ASU 2016-02 will have on its consolidated financial statements.
During June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." The amendments in this ASU, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The amendments in this ASU are effective for Securities and Exchange Commission ("SEC") filers for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently assessing the impact that ASU 2016-13 will have on its consolidated financial statements.
During August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments", to address diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The amendments should be applied using a retrospective transition method to each period presented. If retrospective application is impractical for some of the issues addressed by the update, the amendments for those issues would be applied prospectively as of the earliest date practicable. Early adoption is permitted, including adoption in an interim period. The Company does not expect the adoption of ASU 2016-15 to have a material impact on its consolidated financial statements.
During January 2017, the FASB issued ASU No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business". The amendments in this ASU clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Under the current implementation guidance in Topic 805, there are three elements of a business-inputs, processes, and outputs. While an integrated set of assets and activities (collectively referred to as a "set") that is a business usually has outputs, outputs are not required to be present. In addition, all the inputs and processes that a seller uses in operating a set are not required if market participants can acquire the set and continue to produce outputs. The amendments in this ASU provide a screen to determine when a set is not a business. If the screen is not met, the amendments (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. The ASU provides a framework to assist entities in evaluating whether both an input and a substantive process are present. The amendments in this ASU are effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The amendments in this ASU should be applied prospectively on or after the effective date. No disclosures are required at transition. The Company does not expect the adoption of ASU 2017-01 to have a material impact on its consolidated financial statements.
During January 2017, the FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". The amendments in this ASU simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying amount of that goodwill. Instead, under the amendments in this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Public business entities that are SEC filers should adopt the amendments in this ASU for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of ASU 2017-04 to have a material impact on its consolidated financial statements.
During March 2017, the FASB issued ASU 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost." The amendments in this ASU require an employer that offers defined benefit pension plans, other postretirement benefit plans, or other types of benefits accounted for under Topic 715 to report the service cost component of net periodic benefit cost in the same line item(s) as other compensation costs arising from services rendered during the period. The other components of net periodic benefit cost are
required to be presented in the income statement separately from the service cost component. If the other components of net periodic benefit cost are not presented on a separate line or lines, the line item(s) used in the income statement must be disclosed. In addition, only the service cost component will be eligible for capitalization as part of an asset, when applicable. The amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted. The Company does not expect the adoption of ASU 2017-07 to have a material impact on its consolidated financial statements.
During March 2017, the FASB issued ASU 2017-08, "Receivables-Nonrefundable Fees and Other Costs (Subtopic 310‐20), Premium Amortization on Purchased Callable Debt Securities." The amendments in this ASU shorten the amortization period for certain callable debt securities purchased at a premium. Upon adoption of the standard, premiums on these qualifying callable debt securities will be amortized to the earliest call date. Discounts on purchased debt securities will continue to be accreted to maturity. The amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. Upon transition, entities should apply the guidance on a modified retrospective basis, with a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption and provide the disclosures required for a change in accounting principle. The Company is currently assessing the impact that ASU 2017-08 will have on its consolidated financial statements.
During May 2017, the FASB issued ASU 2017-09, "Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting." The amendments provide guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 718. The amendments are effective for all entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for reporting periods for which financial statements have not yet been issued. The Company is currently assessing the impact that ASU 2017-09 will have on its consolidated financial statements.
During August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” The amendments in this ASU modify the designation and measurement guidance for hedge accounting as well as provide for increased transparency regarding the presentation of economic results on both the financial statements and related footnotes. Certain aspects of hedge effectiveness assessments will also be simplified upon implementation of this update. The amendments are effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018. Early adoption is permitted, including adoption in any interim period. The Company is currently assessing the impact that ASU 2017-12 will have on its consolidated financial statements.
Note 2 – Securities
The amortized cost and fair value of investments in debt and equity securities at September 30, 2017 and December 31, 2016 were as follows (dollars in thousands): |
| | | | | | | | | | | | | | | |
| September 30, 2017 |
| Amortized Cost | | Unrealized Gains | | Unrealized Losses | | Fair Value |
Securities available for sale: | | | | | | | |
Federal agencies and GSEs | $ | 88,413 |
| | $ | 21 |
| | $ | 1,511 |
| | $ | 86,923 |
|
Mortgage-backed and CMOs | 80,026 |
| | 412 |
| | 542 |
| | 79,896 |
|
State and municipal | 93,012 |
| | 1,996 |
| | 225 |
| | 94,783 |
|
Corporate | 8,100 |
| | 248 |
| | 4 |
| | 8,344 |
|
Equity securities | 1,288 |
| | 971 |
| | — |
| | 2,259 |
|
Total securities available for sale | $ | 270,839 |
| | $ | 3,648 |
| | $ | 2,282 |
| | $ | 272,205 |
|
|
| | | | | | | | | | | | | | | |
| December 31, 2016 |
| Amortized Cost | | Unrealized Gains | | Unrealized Losses | | Fair Value |
Securities available for sale: | | | | | | | |
Federal agencies and GSEs | $ | 106,379 |
| | $ | 62 |
| | $ | 2,387 |
| | $ | 104,054 |
|
Mortgage-backed and CMOs | 79,917 |
| | 514 |
| | 938 |
| | 79,493 |
|
State and municipal | 145,757 |
| | 2,540 |
| | 782 |
| | 147,515 |
|
Corporate | 13,392 |
| | 123 |
| | 23 |
| | 13,492 |
|
Equity securities | 1,288 |
| | 660 |
| | — |
| | 1,948 |
|
Total securities available for sale | $ | 346,733 |
| | $ | 3,899 |
| | $ | 4,130 |
| | $ | 346,502 |
|
Restricted Stock
Due to restrictions placed upon the Bank's common stock investment in the Federal Reserve Bank of Richmond ("FRB") and Federal Home Loan Bank of Atlanta ("FHLB"), these securities have been classified as restricted equity securities and carried at cost. The restricted securities are not subject to the investment security classification and are included as a separate line item on the Company's Consolidated Balance Sheet. The FRB requires the Bank to maintain stock with a par value equal to 3.00% of its outstanding capital and an additional 3.00% is on call. The FHLB requires the Bank to maintain stock in an amount equal to 4.25% of outstanding borrowings and a specific percentage of the Bank's total assets. The cost of restricted stock at September 30, 2017 and December 31, 2016 was as follows (dollars in thousands): |
| | | | | | | |
| September 30, 2017 | | December 31, 2016 |
FRB stock | $ | 3,581 |
| | $ | 3,559 |
|
FHLB stock | 1,928 |
| | 2,665 |
|
Total restricted stock | $ | 5,509 |
| | $ | 6,224 |
|
Temporarily Impaired Securities
The following table shows estimated fair value and gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at September 30, 2017. The reference point for determining when securities are in an unrealized loss position is month-end. Therefore, it is possible that a security's market value exceeded its amortized cost on other days during the past twelve-month period.
Available for sale securities that have been in a continuous unrealized loss position are as follows (dollars in thousands): |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total | | Less than 12 Months | | 12 Months or More |
| Fair Value | | Unrealized Loss | | Fair Value | | Unrealized Loss | | Fair Value | | Unrealized Loss |
Federal agencies and GSEs | $ | 73,901 |
| | $ | 1,511 |
| | $ | 32,812 |
| | $ | 131 |
| | $ | 41,089 |
| | $ | 1,380 |
|
Mortgage-backed and CMOs | 56,190 |
| | 542 |
| | 42,328 |
| | 270 |
| | 13,862 |
| | 272 |
|
State and municipal | 13,165 |
| | 225 |
| | 6,370 |
| | 61 |
| | 6,795 |
| | 164 |
|
Corporate | 1,546 |
| | 4 |
| | 1,546 |
| | 4 |
| | — |
| | — |
|
Total | $ | 144,802 |
| | $ | 2,282 |
| | $ | 83,056 |
| | $ | 466 |
| | $ | 61,746 |
| | $ | 1,816 |
|
Federal agencies and GSEs: The unrealized losses on the Company's investment in 18 government sponsored entities ("GSE") securities were caused by interest rate increases. Nine of these securities were in an unrealized loss position for 12 months or more. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. Because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at September 30, 2017.
Mortgage-backed securities: The unrealized losses on the Company's investment in 33 GSE mortgage-backed securities were caused by interest rate increases. Nine of these securities were in an unrealized loss position for 12 months or more. The contractual cash flows of those investments are guaranteed by an agency of the U.S. Government. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost basis of the Company's investments. Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at September 30, 2017.
Collateralized Mortgage Obligations: The unrealized loss associated with one private GSE collateralized mortgage obligation ("CMO") was due to normal market fluctuations. This security had been in an unrealized loss position for 12 months or more. The contractual cash flows of that investment is guaranteed by an agency of the U.S. Government. Accordingly, it is expected that the security would not be settled at a price less than the amortized cost basis of the Company's investment. Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the investment and it is not more likely than not that the Company will be required to sell the investment before recovery of its amortized cost basis, which may be maturity, the Company does not consider that investment to be other-than-temporarily impaired at September 30, 2017.
State and municipal securities: The unrealized losses on 18 state and municipal securities were caused by interest rate increases. Ten of these securities were in an unrealized loss position for 12 months or more. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. Because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at September 30, 2017.
Corporate securities: The unrealized losses on two corporate securities were caused by interest rate increases. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. Because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at September 30, 2017.
Restricted stock: When evaluating restricted stock for impairment, its value is based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. The Company does not consider restricted stock to be other-than-temporarily impaired at September 30, 2017, and no impairment has been recognized.
The table below shows estimated fair value and gross unrealized losses, aggregated by investment category and length of time that individual securities had been in a continuous unrealized loss position, at December 31, 2016 (dollars in thousands): |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total | | Less than 12 Months | | 12 Months or More |
| Fair Value | | Unrealized Loss | | Fair Value | | Unrealized Loss | | Fair Value | | Unrealized Loss |
Federal agencies and GSEs | $ | 89,597 |
| | $ | 2,387 |
| | $ | 89,597 |
| | $ | 2,387 |
| | $ | — |
| | $ | — |
|
Mortgage-backed and CMOs | 57,762 |
| | 938 |
| | 56,076 |
| | 911 |
| | 1,686 |
| | 27 |
|
State and municipal | 47,221 |
| | 782 |
| | 47,221 |
| | 782 |
| | — |
| | — |
|
Corporate | 2,895 |
| | 23 |
| | 2,895 |
| | 23 |
| | — |
| | — |
|
Total | $ | 197,475 |
| | $ | 4,130 |
| | $ | 195,789 |
| | $ | 4,103 |
| | $ | 1,686 |
| | $ | 27 |
|
Other-Than-Temporarily-Impaired Securities
As of September 30, 2017 and December 31, 2016, there were no securities classified as other-than-temporarily impaired.
Realized Gains and Losses
The following table presents the gross realized gains and losses on and the proceeds from the sale of securities during the three and nine months ended September 30, 2017 and 2016 (dollars in thousands): |
| | | | | | | |
| Three Months Ended September 30, 2017 | | Nine Months Ended September 30, 2017 |
Realized gains (losses): | | | |
Gross realized gains | $ | — |
| | $ | 605 |
|
Gross realized losses | — |
| | (15 | ) |
Net realized gains | $ | — |
| | $ | 590 |
|
Proceeds from sales of securities | $ | — |
| | $ | 55,403 |
|
| | | |
| Three Months Ended September 30, 2016 | | Nine Months Ended September 30, 2016 |
Realized gains (losses): | | | |
Gross realized gains | $ | 81 |
| | $ | 674 |
|
Gross realized losses | (8 | ) | | (13 | ) |
Net realized gains | $ | 73 |
| | $ | 661 |
|
Proceeds from sales of securities | $ | — |
| | $ | 9,317 |
|
Note 3 – Loans
Loans, excluding loans held for sale, at September 30, 2017 and December 31, 2016, were comprised of the following (dollars in thousands): |
| | | | | | | |
| September 30, 2017 | | December 31, 2016 |
Commercial | $ | 230,484 |
| | $ | 208,717 |
|
Commercial real estate: | |
| | |
|
Construction and land development | 137,869 |
| | 114,258 |
|
Commercial real estate | 602,434 |
| | 510,960 |
|
Residential real estate: | |
| | |
|
Residential | 209,201 |
| | 215,104 |
|
Home equity | 110,926 |
| | 110,751 |
|
Consumer | 4,240 |
| | 5,031 |
|
Total loans | $ | 1,295,154 |
| | $ | 1,164,821 |
|
Acquired Loans
The outstanding principal balance and the carrying amount of these loans included in the consolidated balance sheets at September 30, 2017 and December 31, 2016 are as follows (dollars in thousands): |
| | | | | | | |
| September 30, 2017 | | December 31, 2016 |
Outstanding principal balance | $ | 84,832 |
| | $ | 104,172 |
|
Carrying amount | 78,635 |
| | 96,487 |
|
The outstanding principal balance and related carrying amount of acquired impaired loans, for which the Company applies FASB Accounting Standards Codification ("ASC") 310-30 to account for interest earned, as of the indicated dates are as follows (dollars in thousands): |
| | | | | | | |
| September 30, 2017 | | December 31, 2016 |
Outstanding principal balance | $ | 29,648 |
| | $ | 34,378 |
|
Carrying amount | 24,860 |
| | 28,669 |
|
The following table presents changes in the accretable yield on acquired impaired loans, for which the Company applies FASB ASC 310-30, for the nine months ended September 30, 2017 and the year ended December 31, 2016 (dollars in thousands): |
| | | | | | | |
| September 30, 2017 | | December 31, 2016 |
Balance at January 1 | $ | 6,103 |
| | $ | 7,299 |
|
Accretion | (607 | ) | | (3,232 | ) |
Reclassification from nonaccretable difference | 380 |
| | 2,197 |
|
Other changes, net* | (463 | ) | | (161 | ) |
| $ | 5,413 |
| | $ | 6,103 |
|
*This line item represents changes in the cash flows expected to be collected due to the impact of non-credit changes such as prepayment assumptions, changes in interest rates on variable rate acquired impaired loans, and discounted payoffs that occurred in the period.
Past Due Loans
The following table shows an analysis by portfolio segment of the Company's past due loans at September 30, 2017 (dollars in thousands): |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 30- 59 Days Past Due | | 60-89 Days Past Due | | 90 Days + Past Due and Still Accruing | | Non- Accrual Loans | | Total Past Due | | Current | | Total Loans |
Commercial | $ | 22 |
| | $ | 20 |
| | $ | — |
| | $ | 143 |
| | $ | 185 |
| | $ | 230,299 |
| | $ | 230,484 |
|
Commercial real estate: | |
| | |
| | |
| | |
| | |
| | |
| | |
|
Construction and land development | — |
| | — |
| | — |
| | 58 |
| | 58 |
| | 137,811 |
| | 137,869 |
|
Commercial real estate | 33 |
| | 239 |
| | 279 |
| | 803 |
| | 1,354 |
| | 601,080 |
| | 602,434 |
|
Residential: | |
| | |
| | |
| | |
| | |
| | |
| | |
|
Residential | 196 |
| | 257 |
| | 259 |
| | 1,244 |
| | 1,956 |
| | 207,245 |
| | 209,201 |
|
Home equity | 22 |
| | — |
| | — |
| | 249 |
| | 271 |
| | 110,655 |
| | 110,926 |
|
Consumer | 8 |
| | — |
| | — |
| | 1 |
| | 9 |
| | 4,231 |
| | 4,240 |
|
Total | $ | 281 |
| | $ | 516 |
| | $ | 538 |
| | $ | 2,498 |
| | $ | 3,833 |
| | $ | 1,291,321 |
| | $ | 1,295,154 |
|
The following table shows an analysis by portfolio segment of the Company's past due loans at December 31, 2016 (dollars in thousands): |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 30- 59 Days Past Due | | 60-89 Days Past Due | | 90 Days + Past Due and Still Accruing | | Non- Accrual Loans | | Total Past Due | | Current | | Total Loans |
Commercial | $ | 50 |
| | $ | — |
| | $ | — |
| | $ | 19 |
| | $ | 69 |
| | $ | 208,648 |
| | $ | 208,717 |
|
Commercial real estate: | |
| | |
| | |
| | |
| | |
| | |
| | |
|
Construction and land development | 60 |
| | 12 |
| | — |
| | 64 |
| | 136 |
| | 114,122 |
| | 114,258 |
|
Commercial real estate | — |
| | 127 |
| | 339 |
| | 773 |
| | 1,239 |
| | 509,721 |
| | 510,960 |
|
Residential: | |
| | |
| | |
| | |
| | |
| | |
| | |
|
Residential | 1,280 |
| | 117 |
| | 248 |
| | 1,802 |
| | 3,447 |
| | 211,657 |
| | 215,104 |
|
Home equity | 229 |
| | — |
| | — |
| | 289 |
| | 518 |
| | 110,233 |
| | 110,751 |
|
Consumer | 6 |
| | 5 |
| | — |
| | 18 |
| | 29 |
| | 5,002 |
| | 5,031 |
|
Total | $ | 1,625 |
| | $ | 261 |
| | $ | 587 |
| | $ | 2,965 |
| | $ | 5,438 |
| | $ | 1,159,383 |
| | $ | 1,164,821 |
|
Impaired Loans
The following table presents the Company's impaired loan balances by portfolio segment, excluding acquired impaired loans, at September 30, 2017 (dollars in thousands): |
| | | | | | | | | | | | | | | | | | | |
| Recorded Investment | | Unpaid Principal Balance | | Related Allowance | | Average Recorded Investment | | Interest Income Recognized |
With no related allowance recorded: | | | | | | | | | |
Commercial | $ | — |
| | $ | — |
| | $ | — |
| | $ | 17 |
| | $ | 1 |
|
Commercial real estate: | |
| | |
| | |
| | |
| | |
|
Construction and land development | — |
| | — |
| | — |
| | 124 |
| | 4 |
|
Commercial real estate | 1,053 |
| | 1,051 |
| | — |
| | 1,274 |
| | 55 |
|
Residential: | |
| | |
| | |
| | |
| | |
|
Residential | 962 |
| | 964 |
| | — |
| | 432 |
| | 32 |
|
Home equity | 144 |
| | 144 |
| | — |
| | 132 |
| | 8 |
|
Consumer | 6 |
| | 6 |
| | — |
| | 9 |
| | — |
|
| $ | 2,165 |
| | $ | 2,165 |
| | $ | — |
| | $ | 1,988 |
| | $ | 100 |
|
With a related allowance recorded: | |
| | |
| | |
| | |
| | |
|
Commercial | $ | 257 |
| | $ | 255 |
| | $ | 155 |
| | $ | 98 |
| | $ | 9 |
|
Commercial real estate: | |
| | |
| | |
| | |
| | |
|
Construction and land development* | 59 |
| | 59 |
| | — |
| | 193 |
| | — |
|
Commercial real estate* | 95 |
| | 93 |
| | — |
| | 208 |
| | — |
|
Residential | |
| | |
| | |
| | |
| | |
|
Residential | 795 |
| | 794 |
| | 9 |
| | 1,446 |
| | 22 |
|
Home equity | 269 |
| | 268 |
| | 1 |
| | 311 |
| | 1 |
|
Consumer* | 1 |
| | 1 |
| | — |
| | 11 |
| | — |
|
| $ | 1,476 |
| | $ | 1,470 |
| | $ | 165 |
| | $ | 2,267 |
| | $ | 32 |
|
Total: | |
| | |
| | |
| | |
| | |
|
Commercial | $ | 257 |
| | $ | 255 |
| | $ | 155 |
| | $ | 115 |
| | $ | 10 |
|
Commercial real estate: | |
| | |
| | |
| | |
| | |
|
Construction and land development | 59 |
| | 59 |
| | — |
| | 317 |
| | 4 |
|
Commercial real estate | 1,148 |
| | 1,144 |
| | — |
| | 1,482 |
| | 55 |
|
Residential: | |
| | |
| | |
| | |
| | |
|
Residential | 1,757 |
| | 1,758 |
| | 9 |
| | 1,878 |
| | 54 |
|
Home equity | 413 |
| | 412 |
| | 1 |
| | 443 |
| | 9 |
|
Consumer | 7 |
| | 7 |
| | — |
| | 20 |
| | — |
|
| $ | 3,641 |
| | $ | 3,635 |
| | $ | 165 |
| | $ | 4,255 |
| | $ | 132 |
|
*Allowance is reported as zero in the table due to presentation in thousands and rounding.
In the table above, recorded investment may exceed unpaid principal balance due to acquired loans with a premium and loans where unearned costs exceed unearned fees.
The following table presents the Company's impaired loan balances by portfolio segment, excluding acquired impaired loans, at December 31, 2016 (dollars in thousands): |
| | | | | | | | | | | | | | | | | | | |
| Recorded Investment | | Unpaid Principal Balance | | Related Allowance | | Average Recorded Investment | | Interest Income Recognized |
With no related allowance recorded: | | | | | | | | | |
Commercial | $ | 24 |
| | $ | 24 |
| | $ | — |
| | $ | 12 |
| | $ | 2 |
|
Commercial real estate: | |
| | |
| | |
| | |
| | |
|
Construction and land development | 158 |
| | 157 |
| | — |
| | 198 |
| | 16 |
|
Commercial real estate | 1,916 |
| | 1,917 |
| | — |
| | 1,409 |
| | 107 |
|
Residential: | |
| | |
| | |
| | |
| | |
|
Residential | 557 |
| | 567 |
| | — |
| | 318 |
| | 38 |
|
Home equity | 6 |
| | 6 |
| | — |
| | 153 |
| | 16 |
|
Consumer | 9 |
| | 9 |
| | — |
| | 10 |
| | 1 |
|
| $ | 2,670 |
| | $ | 2,680 |
| | $ | — |
| | $ | 2,100 |
| | $ | 180 |
|
With a related allowance recorded: | |
| | |
| | |
| | |
| | |
|
Commercial* | $ | 19 |
| | $ | 19 |
| | $ | — |
| | $ | 78 |
| | $ | 1 |
|
Commercial real estate: | |
| | |
| | |
| | |
| | |
|
Construction and land development* | 64 |
| | 65 |
| | — |
| | 272 |
| | 10 |
|
Commercial real estate* | 48 |
| | 48 |
| | — |
| | 286 |
| | 7 |
|
Residential: | |
| | |
| | |
| | |
| | |
|
Residential | 1,639 |
| | 1,639 |
| | 22 |
| | 1,593 |
| | 32 |
|
Home equity | 386 |
| | 385 |
| | 1 |
| | 345 |
| | 4 |
|
Consumer* | 18 |
| | 18 |
| | — |
| | 14 |
| | — |
|
| $ | 2,174 |
| | $ | 2,174 |
| | $ | 23 |
| | $ | 2,588 |
| | $ | 54 |
|
Total: | |
| | |
| | |
| | |
| | |
|
Commercial | $ | 43 |
| | $ | 43 |
| | $ | — |
| | $ | 90 |
| | $ | 3 |
|
Commercial real estate: | |
| | |
| | |
| | |
| | |
|
Construction and land development | 222 |
| | 222 |
| | — |
| | 470 |
| | 26 |
|
Commercial real estate | 1,964 |
| | 1,965 |
| | — |
| | 1,695 |
| | 114 |
|
Residential: | |
| | |
| | |
| | |
| | |
|
Residential | 2,196 |
| | 2,206 |
| | 22 |
| | 1,911 |
| | 70 |
|
Home equity | 392 |
| | 391 |
| | 1 |
| | 498 |
| | 20 |
|
Consumer | 27 |
| | 27 |
| | — |
| | 24 |
| | 1 |
|
| $ | 4,844 |
| | $ | 4,854 |
| | $ | 23 |
| | $ | 4,688 |
| | $ | 234 |
|
*Allowance is reported as zero in the table due to presentation in thousands and rounding.
In the table above, recorded investment may exceed unpaid principal balance due to acquired loans with a premium and loans where unearned costs exceed unearned fees.
The following tables show the detail of loans modified as troubled debt restructurings ("TDRs") during the three and nine months ended September 30, 2017 included in the impaired loan balances (dollars in thousands): |
| | | | | | | | | | | |
| | Loans Modified as a TDR for the |
| | Three Months Ended September 30, 2017 |
Loan Type | | Number of Contracts | | Pre-Modification Outstanding Recorded Investment | | Post-Modification Outstanding Recorded Investment |
Commercial | | 1 |
| | $ | 45 |
| | $ | 45 |
|
Commercial real estate | | — |
| | — |
| | — |
|
Construction and land development | | — |
| | — |
| | — |
|
Home Equity | | — |
| | — |
| | — |
|
Residential real estate | | — |
| | — |
| | — |
|
Consumer | | — |
| | — |
| | — |
|
Total | | 1 |
| | $ | 45 |
| | $ | 45 |
|
|
| | | | | | | | | | | |
| | Loans Modified as a TDR for the |
| | Nine Months Ended September 30, 2017 |
Loan Type | | Number of Contracts | | Pre-Modification Outstanding Recorded Investment | | Post-Modification Outstanding Recorded Investment |
Commercial | | 4 |
| | $ | 118 |
| | $ | 118 |
|
Commercial real estate | | — |
| | — |
| | — |
|
Construction and land development | | — |
| | — |
| | — |
|
Home Equity | | 2 |
| | 57 |
| | 57 |
|
Residential real estate | | — |
| | — |
| | — |
|
Consumer | | — |
| | — |
| | — |
|
Total | | 6 |
| | $ | 175 |
| | $ | 175 |
|
The following tables show the detail of loans modified as TDRs during the three and nine months ended September 30, 2016 included in the impaired loan balances (dollars in thousands): |
| | | | | | | | | | | |
| | Loans Modified as a TDR for the |
| | Three Months Ended September 30, 2016 |
Loan Type | | Number of Contracts | | Pre-Modification Outstanding Recorded Investment | | Post-Modification Outstanding Recorded Investment |
Commercial | | — |
| | $ | — |
| | $ | |