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Section 1: 10-Q (10-Q)

cfbi-10q_20190331.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

For the quarterly period ended March 31, 2019

OR

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

For the transition period

Commission File No. 001-38074

 

Community First Bancshares, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Federal

 

82-1147778

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

3175 Highway 278

Covington, Georgia

 

30014

(Address of Principal Executive Offices)

 

(Zip Code)

 

(770) 786-7088

(Registrant’s Telephone Number, Including Area Code)

 

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

 

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 requirements for the past 90 days.  YES     NO 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  YES      NO  

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.  

 

Large accelerated filer

 

 

  

Accelerated filer

 

 

 

 

 

 

Non-accelerated filer

 

 

  

  

Smaller reporting company

 

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

 

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

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES      NO  

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

 

 

 

 

 

Common Stock, par value $0.01 per share

 

CFBI

 

The NASDAQ Stock Market LLC

 

As of May 10, 2019, 7,424,874 shares of the Registrant’s common stock, par value $0.01 per share, were outstanding.

 

 

 

 

 


 

Community First Bancshares, Inc.

Form 10-Q

Table of Contents

 

 

 

 

 

Page

PART I.  FINANCIAL INFORMATION

 

 

 

 

 

Item 1.

 

Financial Statements

 

2

 

 

 

 

 

 

 

Consolidated Balance Sheets at March 31, 2019 (unaudited) and December 31, 2018 (unaudited)

 

2

 

 

 

 

 

 

 

Consolidated Statements of Operations for the Three Months Ended March 31, 2019 and 2018 (unaudited)

 

3

 

 

 

 

 

 

 

Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2019 and 2018 (unaudited)

 

4

 

 

 

 

 

 

 

Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2019 and 2018 (unaudited)

 

5

 

 

 

Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2019 and 2018 (unaudited)

 

6

 

 

 

 

 

 

 

Notes to Unaudited Consolidated Financial Statements

 

7

 

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

18

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

29

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

29

 

 

 

 

 

PART II.  OTHER INFORMATION

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

30

 

 

 

 

 

Item 1A.

 

Risk Factors

 

30

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

30

 

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

 

30

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

 

30

 

 

 

 

 

Item 5.

 

Other Information

 

30

 

 

 

 

 

Item 6.

 

Exhibits

 

30

 

 

 

 

 

 

 

SIGNATURES

 

31

 

 

1


 

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements

COMMUNITY FIRST BANCSHARES, INC.

Consolidated Balance Sheets

(unaudited)

 

 

 

March 31, 2019

 

 

December 31, 2018

 

 

 

(In thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

Cash and due from banks, including reserve requirement of $1,867 and $1,834 at

  March 31, 2019 and December 31, 2018, respectively

 

$

4,633

 

 

 

3,817

 

Interest-earning deposits in other depository institutions

 

 

26,036

 

 

 

33,212

 

Cash and cash equivalents

 

 

30,669

 

 

 

37,029

 

Investment securities held-to-maturity (estimated fair values of $996 and $993)

 

 

1,000

 

 

 

1,000

 

Investment securities available-for-sale

 

 

21,143

 

 

 

21,145

 

Federal Home Loan Bank stock

 

 

278

 

 

 

580

 

Loans, net

 

 

235,366

 

 

 

227,424

 

Other real estate owned

 

 

283

 

 

 

508

 

Premises and equipment, net

 

 

8,782

 

 

 

8,896

 

Bank owned life insurance

 

 

7,303

 

 

 

7,251

 

Accrued interest receivable and other assets

 

 

3,197

 

 

 

3,862

 

Total assets

 

$

308,021

 

 

 

307,695

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Savings accounts

 

$

25,896

 

 

 

24,511

 

Interest-bearing checking

 

 

55,996

 

 

 

53,752

 

Market rate checking

 

 

25,280

 

 

 

24,936

 

Non-interest bearing checking

 

 

29,995

 

 

 

28,472

 

Certificate of deposits

 

 

89,791

 

 

 

87,510

 

Total deposits

 

 

226,958

 

 

 

219,181

 

Federal Home Loan Bank advances

 

 

 

 

 

7,570

 

Accrued interest payable and other liabilities

 

 

4,744

 

 

 

4,546

 

Total liabilities

 

 

231,702

 

 

 

231,297

 

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

Common stock (par value $0.01 per share, 19,000,000 shares authorized, 7,538,250

   issued and 7,424,874 outstanding at March 31, 2019 and 7,538,250 issued and

   7,478,992 outstanding at December 31, 2018)

 

 

75

 

 

 

75

 

Preferred stock (1,000,000 shares authorized, no shares outstanding)

 

 

 

 

 

 

Additional paid in capital

 

 

33,079

 

 

 

33,078

 

Treasury stock, 113,376 shares at March 31, 2019, and 59,258 shares at

   December 31, 2018, at cost

 

 

(1,268

)

 

 

(668

)

Unearned ESOP shares

 

 

(2,659

)

 

 

(2,689

)

Retained earnings

 

 

47,160

 

 

 

47,043

 

Accumulated other comprehensive loss

 

 

(68

)

 

 

(441

)

Total stockholders' equity

 

 

76,319

 

 

 

76,398

 

Total liabilities and stockholders' equity

 

$

308,021

 

 

 

307,695

 

 

See accompanying notes to unaudited consolidated financial statements.

2


 

COMMUNITY FIRST BANCSHARES, INC.

Consolidated Statements of Operations

(unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Interest income:

 

 

 

 

 

 

 

 

Loans, including fees

 

$

3,244

 

 

 

3,137

 

Investment securities, including dividends

 

 

142

 

 

 

154

 

Interest-earning deposits

 

 

177

 

 

 

76

 

Total interest income

 

 

3,563

 

 

 

3,367

 

Interest expense:

 

 

 

 

 

 

 

 

Deposits

 

 

511

 

 

 

316

 

Borrowings

 

 

24

 

 

 

37

 

Total interest expense

 

 

535

 

 

 

353

 

Net interest income

 

 

3,028

 

 

 

3,014

 

Non-interest income:

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

173

 

 

 

167

 

Small Business Administration (SBA) loan fees

 

 

5

 

 

 

168

 

Other

 

 

178

 

 

 

121

 

Total non-interest income

 

 

356

 

 

 

456

 

Non-interest expenses:

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

1,798

 

 

 

1,735

 

Deferred compensation

 

 

52

 

 

 

52

 

Occupancy

 

 

478

 

 

 

413

 

Advertising

 

 

32

 

 

 

27

 

Data processing

 

 

262

 

 

 

234

 

Other real estate owned

 

 

2

 

 

 

8

 

Net gain on sale of other real estate owned

 

 

(34

)

 

 

(20

)

Legal and accounting

 

 

274

 

 

 

264

 

Organizational dues and subscriptions

 

 

80

 

 

 

73

 

Director compensation

 

 

47

 

 

 

55

 

Federal deposit insurance premiums

 

 

16

 

 

 

16

 

Other

 

 

279

 

 

 

225

 

Total non-interest expenses

 

 

3,286

 

 

 

3,082

 

Income before income taxes

 

 

98

 

 

 

388

 

Income tax (benefit) expense

 

 

(19

)

 

 

55

 

Net income

 

$

117

 

 

 

333

 

Basic and diluted earnings per share

 

$

0.02

 

 

$

0.04

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to unaudited consolidated financial statements.

3


 

COMMUNITY FIRST BANCSHARES, INC.

Consolidated Statements of Comprehensive Income (Loss)

(unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Net income

 

$

117

 

 

$

333

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized gain (loss) on available for sale securities, net of taxes of $131 and $(135)

 

 

373

 

 

 

(381

)

 

 

 

 

 

 

 

 

 

Total other comprehensive income (loss)

 

 

373

 

 

 

(381

)

 

 

 

 

 

 

 

 

 

Total comprehensive income (loss)

 

$

490

 

 

$

(48

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to unaudited consolidated financial statements.

4


 

COMMUNITY FIRST BANCSHARES, INC.

Consolidated Statements of Changes in Stockholders’ Equity

(unaudited)

 

 

 

Three Months Ended March 31, 2018  and March 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

Common

 

 

Paid In

 

 

Treasury

 

 

Unearned

 

 

Retained

 

 

Comprehensive

 

 

 

 

 

 

 

Stock

 

 

Capital

 

 

Stock

 

 

ESOP Shares

 

 

Earnings

 

 

Income (Loss)

 

 

Total

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

Beginning balance December 31,

   2017

 

$

75

 

 

$

33,063

 

 

$

 

 

$

(2,807

)

 

$

45,485

 

 

$

(152

)

 

$

75,664

 

ESOP loan payment and

   release of ESOP shares

 

 

 

 

 

4

 

 

 

 

 

 

29

 

 

 

 

 

 

 

 

 

33

 

Change in unrealized loss

   on investment securities

   available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(381

)

 

 

(381

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

333

 

 

 

 

 

 

333

 

Ending balance March 31, 2018

 

$

75

 

 

$

33,067

 

 

$

 

 

$

(2,778

)

 

$

45,818

 

 

$

(533

)

 

$

75,649

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance December 31,

   2018

 

$

75

 

 

$

33,078

 

 

$

(668

)

 

$

(2,689

)

 

$

47,043

 

 

$

(441

)

 

$

76,398

 

ESOP loan payment and

   release of ESOP shares

 

 

 

 

 

1

 

 

 

 

 

 

30

 

 

 

 

 

 

 

 

 

31

 

Purchase of treasury stock

 

 

 

 

 

 

 

 

(600

)

 

 

 

 

 

 

 

 

 

 

 

(600

)

Change in unrealized gain

   on investment securities

   available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

373

 

 

 

373

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

117

 

 

 

 

 

 

117

 

Ending balance March 31, 2019

 

$

75

 

 

$

33,079

 

 

$

(1,268

)

 

$

(2,659

)

 

$

47,160

 

 

$

(68

)

 

$

76,319

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to unaudited consolidated financial statements.

5


 

COMMUNITY FIRST BANCSHARES, INC.

Consolidated Statements of Cash Flows

(unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

117

 

 

 

333

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

228

 

 

 

223

 

Deferred income tax

 

 

 

 

 

(156

)

ESOP expense

 

 

31

 

 

 

33

 

Net gain on sale of other real estate owned

 

 

(34

)

 

 

(20

)

Increase in cash surrender value of life insurance

 

 

(52

)

 

 

(58

)

Change in:

 

 

 

 

 

 

 

 

Accrued interest receivable and other assets

 

 

534

 

 

 

329

 

Accrued interest payable and other liabilities

 

 

198

 

 

 

(250

)

Net cash provided by operating activities

 

 

1,022

 

 

 

434

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of premises and equipment

 

 

(68

)

 

 

(714

)

Proceeds from paydowns of investment securities available-for-sale

 

 

460

 

 

 

500

 

Purchases of other investments

 

 

 

 

 

(43

)

Proceeds from sales of other investments

 

 

302

 

 

 

 

Net change in loans

 

 

(7,942

)

 

 

(10,902

)

Proceeds from sales of other real estate owned

 

 

259

 

 

 

185

 

Net cash used in investing activities

 

 

(6,989

)

 

 

(10,974

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Net change in demand and savings deposits

 

 

7,777

 

 

 

4,777

 

Purchase of treasury stock

 

 

(600

)

 

 

 

Repayment of FHLB advances

 

 

(7,570

)

 

 

 

Net cash (used in) provided by financing activities

 

 

(393

)

 

 

4,777

 

Net change in cash and cash equivalents

 

 

(6,360

)

 

 

(5,763

)

Cash and cash equivalents at beginning of period

 

 

37,029

 

 

 

25,098

 

Cash and cash equivalents at end of period

 

$

30,669

 

 

 

19,335

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

555

 

 

 

378

 

Supplemental disclosures of noncash investing activities:

 

 

 

 

 

 

 

 

Other real estate owned acquired through foreclosures

 

 

 

 

 

52

 

 

 

 

 

 

 

 

 

See accompanying notes to unaudited consolidated financial statements.

 

 

6


 

COMMUNITY FIRST BANCSHARES, INC.

Notes to Unaudited Consolidated Financial Statements

 

(1)

Basis of Presentation

Community First Bancshares, Inc. (the “Company”) is a savings and loan holding company headquartered in Covington, Georgia. The Company has one operating subsidiary, Newton Federal Bank (the “Bank”), conducting banking activities primarily in Newton County, Georgia and surrounding counties. The main emphasis of the Bank is providing mortgage loans in its primary lending area.  It offers such customary banking services as consumer and commercial checking accounts, savings accounts, certificates of deposit, mortgage, commercial and consumer loans, money transfers and a variety of other banking services.  In October 2018, we opened an indirect automobile loan division, Community First Auto.

The accompanying unaudited consolidated financial statements and notes thereto contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly, in accordance with accounting principles generally accepted in the United States of America (“GAAP”), the financial position of the Company as of March 31, 2019 and the results of its operations and its cash flows for the periods presented. The interim consolidated financial information should be read in conjunction with the annual financial statements and the notes thereto included in the Company’s September 30, 2018 Form 10-K. The results of operations for the quarter ended March 31, 2019, are not necessarily indicative of the results to be expected for a full year or for any other period.

On October 25, 2018, both the Company and the Bank changed their fiscal year end from September 30 to December 31.  This change will bring the Company and the Bank in line with industry standards and will improve accounting and reporting efficiencies by making the fiscal year-end and the calendar year-end the same.  As a result of the change in fiscal year, the Company filed a Transition Report on Form 10-Q covering the transition period from October 1, 2018 to December 31, 2018.

Use of Estimates – The preparation of financial statements in conformity with 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 reported period. Actual results could differ from those estimates. Material estimates common to the banking industry that are particularly susceptible to significant change in the near term include, but are not limited to, the determination of the allowance for loan losses, the valuation of other real estate acquired in connection with foreclosure or in satisfaction of loans and valuation allowances associated with the realization of deferred tax assets, which are based on future taxable income.

Summary of Significant Accounting Policies – The accounting and reporting policies of the Company conform to GAAP and general practices within the banking industry. There have been no material changes or developments in the application of principles or in our evaluation of the accounting estimates and the underlying assumptions or methodologies that we believe to be Critical Accounting Policies as disclosed in the Company’s financial statements for the year ended September 30, 2018 included in the Company’s Form 10-K.

Net income per share is calculated for the period that the Company’s shares of common stock were outstanding which includes the current quarter and the same quarter in the previous year.  The net income for the current period was $117,000 and the weighted average common shares outstanding were 7,451,933.  The net income for the same quarter in the previous year was $333,000 and the weighted average common shares outstanding were 7,538,250. 

Recent Accounting Pronouncements

There have been no pronouncements issued during the quarter that would have a material impact on the Company's financial statements.

(2)

Investment Securities

Investment Securities Held-to-Maturity

Investment securities held-to-maturity at March 31, 2019 and December 31, 2018 are as follows: (in thousands)

 

March 31, 2019

 

Amortized

Cost

 

 

Gross

Unrealized

Gains

 

 

Gross

Unrealized

Losses

 

 

Estimated

Fair Value

 

U.S. Government sponsored enterprises

 

$

1,000

 

 

 

 

 

 

(4

)

 

 

996

 

December 31, 2018                                                                                       _                        

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government sponsored enterprises

 

$

1,000

 

 

 

 

 

 

(7

)

 

 

993

 

7


COMMUNITY FIRST BANCSHARES, INC.

Notes to Unaudited Consolidated Financial Statements

 

 

The U.S. government sponsored enterprise security as of March 31, 2019 is comprised of one debt financing security issued by a government agency that matures within one year.

There were no sales of securities held-to-maturity during the three months ended March 31, 2019 or 2018.

The one held-to-maturity security was pledged to secure public deposits at both March 31, 2019 and December 31, 2018.

Investment Securities Available-for-Sale

Investment securities available-for-sale at March 31, 2019 and December 31, 2018 are as follows: (in thousands)

 

 

 

Amortized

 

 

Gross

Unrealized

 

 

Gross

Unrealized

 

 

Estimated

 

March 31, 2019

 

Cost

 

 

Gains

 

 

Losses

 

 

Fair Value

 

Municipal securities - tax exempt

 

$

5,652

 

 

 

78

 

 

 

(1

)

 

 

5,729

 

Municipal securities - taxable

 

 

3,116

 

 

 

12

 

 

 

(29

)

 

 

3,099

 

Government agency securities

 

 

501

 

 

 

 

 

 

(6

)

 

 

495

 

Government agency mortgage-backed securities

 

 

11,966

 

 

 

 

 

 

(146

)

 

 

11,820

 

Total

 

$

21,235

 

 

 

90

 

 

 

(182

)

 

 

21,143

 

December 31, 2018                                                                                       _

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal securities - tax exempt

 

$

5,670

 

 

 

12

 

 

 

(73

)

 

 

5,609

 

Municipal securities - taxable

 

 

3,119

 

 

 

 

 

 

(132

)

 

 

2,987

 

Government agency securities

 

 

501

 

 

 

 

 

 

(10

)

 

 

491

 

Government agency mortgage-backed securities

 

 

12,451

 

 

 

 

 

 

(393

)

 

 

12,058

 

Total

 

$

21,741

 

 

 

12

 

 

 

(608

)

 

 

21,145

 

 

There were no securities in an unrealized loss position less than 12 months and 26 securities were in an unrealized loss position 12 months or greater as of March 31, 2019.  The unrealized losses on the debt securities arose due to changing interest rates and market conditions and are considered temporary because of acceptable investment grades where the repayment sources of principal and interest are largely backed by U.S. Government sponsored agencies or financially stable municipalities.  The Company does not intend to sell the investments and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost basis which may be at maturity.

 

8


COMMUNITY FIRST BANCSHARES, INC.

Notes to Unaudited Consolidated Financial Statements

 

The amortized cost and estimated fair value of investment securities available-for-sale at March 31, 2019, by contractual maturity, are shown below. Maturities of mortgage-backed securities will differ from contractual maturities because borrowers may have the right to call or prepay certain obligations with or without call or prepayment penalties. Therefore, these securities are not included in the maturity categories. (in thousands)

 

 

 

 

Amortized

 

 

Estimated

 

 

 

Cost

 

 

Fair Value

 

Municipal securities - tax exempt

 

 

 

 

 

 

 

 

Within 1 year

 

$

 

 

 

 

Greater than 1 to 5 years

 

 

749

 

 

 

764

 

Greater than 5 to 10 years

 

 

4,903

 

 

 

4,965

 

Greater than 10 years

 

 

 

 

 

 

 

 

 

5,652

 

 

 

5,729

 

Municipal securities - taxable

 

 

 

 

 

 

 

 

Within 1 year

 

 

 

 

 

 

Greater than 1 to 5 years

 

 

 

 

 

 

Greater than 5 to 10 years

 

 

2,106

 

 

 

2,107

 

Greater than 10 years

 

 

1,010

 

 

 

992

 

 

 

 

3,116

 

 

 

3,099

 

Government agency securities

 

 

 

 

 

 

 

 

Within 1 year

 

 

 

 

 

 

Greater than 1 to 5 years

 

 

501

 

 

 

495

 

Greater than 5 to 10 years

 

 

 

 

 

 

Greater than 10 years

 

 

 

 

 

 

 

 

 

501

 

 

 

495

 

Government agency mortgage-backed securities

 

 

11,966

 

 

 

11,820

 

Total

 

$

21,235

 

 

 

21,143

 

 

There were no sales of securities available-for-sale during the three months ended March 31, 2019 or 2018.

Securities with a carrying value of approximately $1.8 million were pledged to secure public deposits at March 31, 2019 and December 31, 2018.

(3)

Loans and Allowance for Loan Losses

Major classifications of loans, by collateral code, at March 31, 2019 and December 31, 2018 are summarized as follows: (in thousands)

 

 

March 31, 2019

 

 

December 31, 2018

 

Commercial (secured by real estate)

 

$

53,082

 

 

 

50,716

 

Commercial and industrial

 

 

26,256

 

 

 

25,612

 

Construction, land and acquisition & development

 

 

16,475

 

 

 

12,367

 

Residential mortgage 1-4 family

 

 

132,352

 

 

 

138,156

 

Consumer installment

 

 

11,347

 

 

 

4,595

 

Total

 

 

239,512

 

 

 

231,446

 

Less allowance for loan losses

 

 

(4,146

)

 

 

(4,022

)

Total loans, net

 

$

235,366

 

 

 

227,424

 

 

The Bank grants loans and extensions of credit to individuals and a variety of firms and corporations located primarily in Newton County and other surrounding Georgia counties. A substantial portion of the loan portfolio is collateralized by improved and unimproved real estate and is dependent upon the real estate market.

Qualifying loans in the amount of approximately $119.9 million and $125.0 million were pledged to secure the line of credit from Federal Home Loan Bank (the “FHLB”) at March 31, 2019 and December 31, 2018, respectively.

9


COMMUNITY FIRST BANCSHARES, INC.

Notes to Unaudited Consolidated Financial Statements

 

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of and for the three months ended March 31, 2019 and 2018: (in thousands)

 

March 31, 2019

 

Commercial

(Secured by Real

Estate)

 

 

Commercial

and Industrial

 

 

Construction,

Land and

Acquisition & Development

 

 

Residential

Mortgage

 

 

Consumer

Installment

 

 

Unallocated

 

 

Total

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

1,619

 

 

 

1,520

 

 

 

108

 

 

 

641

 

 

 

127

 

 

 

7

 

 

 

4,022

 

Provision

 

 

24

 

 

 

(9

)

 

 

24

 

 

 

(192

)

 

 

154

 

 

 

(1

)

 

 

 

Charge-offs

 

 

 

 

 

(26

)

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

(27

)

Recoveries

 

 

25

 

 

 

18

 

 

 

 

 

 

107

 

 

 

1

 

 

 

 

 

 

151

 

Ending balance

 

$

1,668

 

 

 

1,503

 

 

 

132

 

 

 

556

 

 

 

281

 

 

 

6

 

 

 

4,146

 

Ending allowance attributable to loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually evaluated for impairment

 

$

3