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Section 1: 10-Q (10-Q)

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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 from                  to                

Commission File Number: 001‑32590

COMMUNITY BANKERS TRUST CORPORATION

(Exact name of registrant as specified in its charter)

 

 

Virginia

20‑2652949

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

 

 

9954 Mayland Drive, Suite 2100

 

Richmond, Virginia

23233

(Address of principal executive offices)

(Zip Code)

(804) 934‑9999

(Registrant’s telephone number, including area code)

 

n/a

(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 filing 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 and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit. such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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

    

Name of each exchange on which registered:

Common Stock, $0.01 par value

 

ESXB

 

The NASDAQ Stock Market, LLC

 

At March 31, 2019, there were 22,168,979 shares of the Company’s common stock outstanding.

 

 


 

Table of Contents

COMMUNITY BANKERS TRUST CORPORATION

TABLE OF CONTENTS

FORM 10‑Q

March 31, 2019

PART I — FINANCIAL INFORMATION 

 

Item 1. Financial Statements 

3

Unaudited Consolidated Balance Sheets 

3

Unaudited Consolidated Statements of Income 

4

Unaudited Consolidated Statements of Comprehensive Income 

5

Unaudited Consolidated Statements of Changes in Shareholders’ Equity 

6

Unaudited Consolidated Statements of Cash Flows 

7

Notes to Unaudited Consolidated Financial Statements 

8

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

28

Item 3. Quantitative and Qualitative Disclosures About Market Risk 

41

Item 4. Controls and Procedures 

42

PART II — OTHER INFORMATION 

 

Item 1. Legal Proceedings 

43

Item 1A. Risk Factors 

43

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

43

Item 3. Defaults upon Senior Securities 

43

Item 4. Mine Safety Disclosures 

43

Item 5. Other Information 

43

Item 6. Exhibits 

43

SIGNATURES 

44

 

 

2


 

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

COMMUNITY BANKERS TRUST CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2019 AND DECEMBER 31, 2018

(dollars in thousands, except per share data)

 

 

 

 

 

 

 

 

    

March 31, 2019

    

December 31, 2018 *

ASSETS

 

 

 

 

 

 

Cash and due from banks

 

$

16,809

 

$

18,292

Interest bearing bank deposits

 

 

18,757

 

 

15,927

Federal funds sold

 

 

240

 

 

 —

Total cash and cash equivalents

 

 

35,806

 

 

34,219

 

 

 

 

 

 

 

Securities available for sale, at fair value

 

 

200,094

 

 

206,726

Securities held to maturity, at cost (fair value of $42,045 and $42,253, respectively)

 

 

41,458

 

 

42,108

Equity securities, restricted, at cost

 

 

8,426

 

 

7,800

Total securities

 

 

249,978

 

 

256,634

 

 

 

 

 

 

 

Loans held for sale

 

 

396

 

 

146

 

 

 

 

 

 

 

Loans

 

 

997,982

 

 

993,705

Purchased credit impaired (PCI) loans

 

 

36,803

 

 

38,285

Total loans

 

 

1,034,785

 

 

1,031,990

Allowance for loan losses (loans of $8,661 and $8,983, respectively; PCI loans of $156 and $156, respectively)

 

 

(8,817)

 

 

(9,139)

Net loans

 

 

1,025,968

 

 

1,022,851

 

 

 

 

 

 

 

Bank premises and equipment, net

 

 

31,142

 

 

31,488

Bank premises and equipment held for sale

 

 

1,252

 

 

1,252

Leased assets

 

 

7,177

 

 

 —

Other real estate owned

 

 

1,225

 

 

1,099

Bank owned life insurance

 

 

29,015

 

 

28,834

Other assets

 

 

16,538

 

 

16,627

Total assets

 

$

1,398,497

 

$

1,393,150

 

 

 

 

 

 

 

LIABILITIES

 

 

  

 

 

  

Deposits:

 

 

  

 

 

  

Noninterest bearing

 

$

165,708

 

$

165,086

Interest bearing

 

 

1,002,415

 

 

999,889

Total deposits

 

 

1,168,123

 

 

1,164,975

 

 

 

 

 

 

 

Federal funds purchased

 

 

 —

 

 

19,440

Federal Home Loan Bank borowings

 

 

69,072

 

 

59,447

Trust preferred capital notes

 

 

4,124

 

 

4,124

Lease liabilities

 

 

7,418

 

 

 —

Other liabilities

 

 

7,452

 

 

7,703

Total liabilities

 

 

1,256,189

 

 

1,255,689

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY

 

 

  

 

 

  

Common stock (200,000,000 shares authorized, $0.01 par value; 22,168,979 and 22,132,304 shares issued and outstanding, respectively)

 

 

222

 

 

221

Additional paid in capital

 

 

149,115

 

 

148,763

Retained deficit

 

 

(7,406)

 

 

(10,244)

Accumulated other comprehensive income (loss)

 

 

377

 

 

(1,279)

Total shareholders’ equity

 

 

142,308

 

 

137,461

Total liabilities and shareholders’ equity

 

$

1,398,497

 

$

1,393,150


*Derived from audited consolidated financial statements

See accompanying notes to unaudited consolidated financial statements

3


 

Table of Contents

 

COMMUNITY BANKERS TRUST CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

(dollars and shares in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

March 31, 2019

    

March 31, 2018

 

Interest and dividend income

 

 

  

 

 

  

 

Interest and fees on loans

 

$

12,419

 

$

10,876

 

Interest and fees on PCI loans

 

 

1,293

 

 

1,398

 

Interest on deposits in other banks

 

 

96

 

 

40

 

Interest and dividends on securities

 

 

 

 

 

 

 

Taxable

 

 

1,522

 

 

1,186

 

Nontaxable

 

 

476

 

 

579

 

Total interest and dividend income

 

 

15,806

 

 

14,079

 

Interest expense

 

 

  

 

 

  

 

Interest on deposits

 

 

3,234

 

 

2,143

 

Interest on borrowed funds

 

 

447

 

 

469

 

Total interest expense

 

 

3,681

 

 

2,612

 

Net interest income

 

 

12,125

 

 

11,467

 

Provision for loan losses

 

 

 —

 

 

 —

 

Net interest income after provision for loan losses

 

 

12,125

 

 

11,467

 

Noninterest income

 

 

  

 

 

  

 

Service charges and fees

 

 

609

 

 

581

 

(Loss) gain on securities transactions, net

 

 

(14)

 

 

30

 

Income on bank owned life insurance

 

 

181

 

 

183

 

Mortgage loan income

 

 

62

 

 

111

 

Other

 

 

176

 

 

128

 

Total noninterest income

 

 

1,014

 

 

1,033

 

Noninterest expense

 

 

  

 

 

  

 

Salaries and employee benefits

 

 

5,381

 

 

5,849

 

Occupancy expenses

 

 

930

 

 

812

 

Equipment expenses

 

 

381

 

 

314

 

FDIC assessment

 

 

150

 

 

206

 

Data processing fees

 

 

568

 

 

486

 

Other real estate expense, net

 

 

(8)

 

 

50

 

Other operating expenses

 

 

1,438

 

 

1,649

 

Total noninterest expense

 

 

8,840

 

 

9,366

 

Income before income taxes

 

 

4,299

 

 

3,134

 

Income tax expense

 

 

796

 

 

540

 

Net income

 

$

3,503

 

$

2,594

 

Net income per share — basic

 

$

0.16

 

$

0.12

 

Net income per share — diluted

 

$

0.16

 

$

0.12

 

Dividends declared per common share

 

$

0.03

 

$

 

Weighted average number of shares outstanding

 

 

  

 

 

  

 

Basic

 

 

22,141

 

 

22,076

 

Diluted

 

 

22,430

 

 

22,521

 

 

See accompanying notes to unaudited consolidated financial statements

4


 

Table of Contents

COMMUNITY BANKERS TRUST CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

    

March 31, 2019

    

March 31, 2018

 

Net income

 

$

3,503

 

$

2,594

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

Unrealized gain (loss) on investment securities:

 

 

 

 

 

 

 

Change in unrealized gain (loss) on investment securities

 

 

2,204

 

 

(2,488)

 

Tax related to unrealized (gain) loss on investment securities

 

 

(485)

 

 

548

 

Reclassification adjustment for loss (gain) on securities sold

 

 

14

 

 

(30)

 

Tax related to realized (loss) gain on securities sold

 

 

(3)

 

 

 7

 

Cash flow hedge:

 

 

 

 

 

 

 

Change in unrealized (loss) gain on cash flow hedge

 

 

(94)

 

 

186

 

Tax related to cash flow hedge

 

 

20

 

 

(40)

 

Total other comprehensive income (loss)

 

 

1,656

 

 

(1,817)

 

Total comprehensive income

 

$

5,159

 

$

777

 

 

See accompanying notes to unaudited consolidated financial statements

5


 

Table of Contents

COMMUNITY BANKERS TRUST CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

(dollars and shares in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

Other

 

 

 

 

 

Common Stock

 

Paid in

 

Retained

 

Comprehensive

 

 

 

 

    

Shares

    

Amount

    

Capital

    

Deficit

    

(Loss) Income

    

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance January 1, 2018

 

22,073

 

$

221

 

$

147,671

 

$

(23,932)

 

$

43

 

$

124,003

Issuance of common stock

 

 4

 

 

 —

 

 

39

 

 

 —

 

 

 —

 

 

39

Exercise and issuance of employee stock options

 

 7

 

 

 —

 

 

225

 

 

 —

 

 

 —

 

 

225

Net income

 

 —

 

 

 —

 

 

 —

 

 

2,594

 

 

 —

 

 

2,594

Other comprehensive loss

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(1,817)

 

 

(1,817)

Balance March 31, 2018

 

22,084

 

$

221

 

$

147,935

 

$

(21,338)

 

$

(1,774)

 

$

125,044

Balance January 1, 2019

 

22,132

 

$

221

 

$

148,763

 

$

(10,244)

 

$

(1,279)

 

$

137,461

Issuance of common stock

 

 6

 

 

 —

 

 

54

 

 

 —

 

 

 —

 

 

54

Exercise and issuance of employee stock options

 

31

 

 

 1

 

 

298

 

 

 —

 

 

 —

 

 

299

Net income

 

 —

 

 

 —

 

 

 —

 

 

3,503

 

 

 —

 

 

3,503

Dividends paid on common stock

 

 —

 

 

 —

 

 

 —

 

 

(665)

 

 

 —

 

 

(665)

Other comprehensive income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

1,656

 

 

1,656

Balance March 31, 2019

 

22,169

 

$

222

 

$

149,115

 

$

(7,406)

 

$

377

 

$

142,308

 

See accompanying notes to unaudited consolidated financial statements

6


 

Table of Contents

COMMUNITY BANKERS TRUST CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

(dollars in thousands)

 

 

 

 

 

 

 

 

 

    

March 31, 2019

    

March 31, 2018

 

Operating activities:

 

 

 

 

 

 

 

Net income

 

$

3,503

 

$

2,594

 

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

 

 

 

 

 

 

 

Depreciation and intangibles amortization

 

 

545

 

 

459

 

Leased asset amortization

 

 

231

 

 

 —

 

Stock-based compensation expense

 

 

266

 

 

234

 

Tax benefit of exercised stock options

 

 

(31)

 

 

(10)

 

Amortization of purchased loan premium

 

 

60

 

 

54

 

Amortization of security premiums and accretion of discounts, net

 

 

281

 

 

443

 

Net loss (gain) on sale of securities

 

 

14

 

 

(30)

 

Net gain on sale and valuation of other real estate owned

 

 

(50)

 

 

 —

 

Originations of mortgages held for sale

 

 

(1,976)

 

 

(872)

 

Proceeds from sales of mortgages held for sale

 

 

1,726

 

 

872

 

Increase in bank owned life insurance investment

 

 

(181)

 

 

(184)

 

Changes in assets and liabilities:

 

 

 

 

 

  

 

Increase in other assets

 

 

(366)

 

 

(182)

 

(Decrease) increase in accrued expenses and other liabilities

 

 

(58)

 

 

673

 

Net cash provided by operating activities

 

 

3,964

 

 

4,051

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

  

 

 

  

 

Proceeds from sales/calls/maturities/paydowns of available for sale securities

 

 

19,264

 

 

9,363

 

Proceeds from calls/maturities/paydowns of held to maturity securities

 

 

626

 

 

1,584

 

Proceeds from sales of restricted equity securities

 

 

 —

 

 

17

 

Purchase of available for sale securities

 

 

(10,682)

 

 

(9,596)

 

Purchase of restricted equity securities

 

 

(626)

 

 

(78)

 

Proceeds from sale of other real estate owned

 

 

316

 

 

21

 

Net increase in loans

 

 

(4,351)

 

 

(20,708)

 

Principal recoveries of loans previously charged off

 

 

77

 

 

83

 

Purchase of premises and equipment, net

 

 

(199)

 

 

(548)

 

Purchase small business investment company fund investment

 

 

(262)

 

 

(210)

 

Proceeds from sale of loans

 

 

705

 

 

 —

 

Net cash provided by (used in) investing activities

 

 

4,868

 

 

(20,072)

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

  

 

 

  

 

Net increase in deposits

 

 

3,148

 

 

556

 

Net (decrease) increase in federal funds purchased

 

 

(19,440)

 

 

15,151

 

Net increase in short-term Federal Home Loan Bank borrowings

 

 

10,000

 

 

5,000

 

Payments on long-term Federal Home Loan Bank borrowings

 

 

(375)

 

 

(5,368)

 

Proceeds from issuance of common stock

 

 

87

 

 

30

 

Cash dividends paid

 

 

(665)

 

 

 —

 

Net cash (used in) provided by financing activities

 

 

(7,245)

 

 

15,369

 

 

 

 

 

 

 

 

 

Net increase (decrease)  in cash and cash equivalents

 

 

1,587

 

 

(652)

 

 

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

  

 

 

  

 

Beginning of the period

 

 

34,219

 

 

21,958

 

End of the period

 

$

35,806

 

$

21,306

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

  

 

 

  

 

Interest paid

 

$

3,512

 

$

2,638

 

Income taxes paid

 

 

439

 

 

 —

 

Transfers of loans to other real estate owned

 

 

392

 

 

396

 

Transfers of building premises and equipment to held for sale

 

 

 —

 

 

525

 

 

See accompanying notes to unaudited consolidated financial statements

 

 

7


 

Table of Contents

COMMUNITY BANKERS TRUST CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Nature of Banking Activities and Significant Accounting Policies

Organization

Community Bankers Trust Corporation (the “Company”) is headquartered in Richmond, Virginia and is the holding company for Essex Bank (the “Bank”), a Virginia state bank with 26 full-service offices and two loan production offices in Virginia and Maryland.

The Bank engages in a general commercial banking business and provides a wide range of financial services primarily to individuals, small businesses and larger commercial companies, including individual and commercial demand and time deposit accounts, commercial and industrial loans, consumer and small business loans, real estate and mortgage loans, investment services, on-line and mobile banking products, and cash management services.

Financial Statements

The consolidated statements presented include accounts of the Company and the Bank, its wholly-owned subsidiary. All material intercompany balances and transactions have been eliminated. The statements should be read in conjunction with the Company’s consolidated financial statements and the accompanying notes to consolidated financial statements included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2018. The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles (GAAP) and to the general practices within the banking industry. The interim financial statements have not been audited; however, in the opinion of management, all adjustments, consisting of normal accruals, were made that are necessary to present fairly the balance sheet of the Company as of March 31, 2019, the statements of income and comprehensive income, changes in shareholders’ equity, and cash flows for the three months ended March 31, 2019. Results for the three month period ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019.

The financial information contained within the statements is, to a significant extent, financial information that is based on measures of the financial effects of transactions and events that have already occurred. A variety of factors could affect the ultimate value that is obtained when either earning income, recognizing an expense, recovering an asset or relieving a liability. The Company uses historical loss factors as one factor in determining the inherent loss that may be present in its loan portfolio. Actual losses could differ significantly from the historical factors that the Company uses. In addition, GAAP itself may change from one previously acceptable method to another method. Although the economics of the Company’s transactions would be the same, the timing of events that would impact its transactions could change.

In preparing these financial statements, the Company has evaluated subsequent events and transactions for potential recognition or disclosure through the date the financial statements were issued.

Certain reclassifications have been made to prior period balances to conform to the current year presentations. Such reclassifications had no impact on net income or shareholders’ equity.

8


 

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Note 2. Securities

Amortized costs and fair values of securities available for sale and held to maturity at March 31, 2019 and December 31, 2018 were as follows (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2019

 

 

 

 

 

Gross Unrealized

 

  

 

 

    

Amortized Cost

    

Gains

    

Losses

    

Fair Value

Securities Available for Sale

 

 

  

 

 

  

 

 

  

 

 

  

U.S. Treasury issue

 

$

11,982

 

$

 —

 

$

(234)

 

$

11,748

U.S. Government agencies

 

 

23,949

 

 

76

 

 

(177)

 

 

23,848

State, county and municipal

 

 

110,171

 

 

2,011

 

 

(250)

 

 

111,932

Mortgage backed securities

 

 

41,342

 

 

397

 

 

(446)

 

 

41,293

Asset backed securities

 

 

5,222

 

 

51

 

 

(3)

 

 

5,270

Corporate bonds

 

 

6,002

 

 

23

 

 

(22)

 

 

6,003

Total Securities Available for Sale

 

$

198,668

 

$

2,558

 

$

(1,132)

 

$

200,094

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities Held to Maturity

 

 

  

 

 

  

 

 

  

 

 

  

U.S. Government agencies

 

$

10,000

 

$

 —

 

$

(141)

 

$

9,859

State, county and municipal

 

 

31,458

 

 

740

 

 

(12)

 

 

32,186

Total Securities Held to Maturity

 

$

41,458

 

$

740

 

$

(153)

 

$

42,045

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

 

 

 

 

Gross Unrealized

 

 

 

 

    

Amortized Cost

    

Gains

    

Losses

    

Fair Value

Securities Available for Sale

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury issue

 

$

13,460

 

$

 —

 

$

(336)

 

$

13,124

U.S. Government agencies

 

 

24,689

 

 

71

 

 

(151)

 

 

24,609

State, county and municipal

 

 

112,465

 

 

1,018

 

 

(941)

 

 

112,542

Mortgage backed securities

 

 

46,877

 

 

196

 

 

(656)

 

 

46,417

Asset backed securities

 

 

5,342

 

 

73

 

 

(4)

 

 

5,411

Corporate bonds

 

 

4,685

 

 

 —

 

 

(62)

 

 

4,623

Total Securities Available for Sale

 

$

207,518

 

$

1,358

 

$

(2,150)

 

$

206,726

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities Held to Maturity

 

 

  

 

 

  

 

 

  

 

 

  

U.S. Government agencies

 

$

10,000

 

$

 —

 

$

(210)

 

$

9,790

State, county and municipal

 

 

32,108

 

 

419

 

 

(64)

 

 

32,463

Total Securities Held to Maturity

 

$

42,108

 

$

419

 

$

(274)

 

$

42,253

 

The amortized cost and fair value of securities at March 31, 2019 by final contractual maturity are shown below. Expected maturities may differ from final contractual maturities because issuers may have the right to call or prepay obligations without any penalties.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity

 

Available for Sale

(dollars in thousands)

    

Amortized Cost

    

Fair Value

    

Amortized Cost

    

Fair Value

Due in one year or less

 

$

14,104

 

$

13,984

 

$

14,097

 

$

14,136

Due after one year through five years

 

 

13,930

 

 

14,220

 

 

81,687

 

 

81,854

Due after five years through ten years

 

 

11,661

 

 

12,030

 

 

84,400

 

 

85,374

Due after ten years

 

 

1,763

 

 

1,811

 

 

18,484

 

 

18,730

Total securities

 

$

41,458

 

$

42,045

 

$

198,668

 

$

200,094

 

9


 

Table of Contents

Proceeds from sales of securities available for sale were $16.8 million and $7.0 million during the  three months ended March 31, 2019 and 2018, respectively. Gains and losses on the sale of securities are determined using the specific identification method. Gross realized gains and losses on sales of securities available for sale during the three months ended March 31, 2019 and 2018 were as follows (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

    

March 31, 2019

    

March 31, 2018

 

Gross realized gains

 

$

53

 

$

42

 

Gross realized losses

 

 

(67)

 

 

(12)

 

Net securities (loss) gain

 

$

(14)

 

$

30

 

 

In estimating other than temporary impairment (OTTI) losses, management considers the length of time and the extent to which the fair value has been less than cost, the financial condition and short-term prospects for the issuer, and the intent and ability of management to hold its investment for a period of time to allow a recovery in fair value. There were no investments held that had OTTI losses for the three months ended March 31, 2019 and 2018.

The fair value and gross unrealized losses for securities, segregated by the length of time that individual securities have been in a continuous gross unrealized loss position, at March 31, 2019 and December 31, 2018 were as follows (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2019

 

 

Less than 12 Months

 

12 Months or More

 

Total

 

    

Fair Value

    

Unrealized Loss

    

Fair Value

    

Unrealized Loss

    

Fair Value

    

Unrealized Loss

Securities Available for Sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury issue

 

$

 —

 

$

 —

 

$

11,747

 

$

(234)

 

$

11,747

 

$

(234)

U.S. Government agencies

 

 

7,957

 

 

(53)

 

 

5,222

 

 

(124)

 

 

13,179

 

 

(177)

State, county and municipal

 

 

 —

 

 

 —

 

 

19,525

 

 

(250)

 

 

19,525

 

 

(250)

Mortgage backed securities

 

 

8,439

 

 

(76)

 

 

15,021

 

 

(370)

 

 

23,460

 

 

(446)

Asset backed securities

 

 

515

 

 

(1)

 

 

233

 

 

(2)

 

 

748

 

 

(3)

Corporate bonds

 

 

738

 

 

(12)

 

 

240

 

 

(10)

 

 

978

 

 

(22)

Total

 

$

17,649

 

$

(142)

 

$

51,988

 

$

(990)

 

$

69,637

 

$

(1,132)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities Held to Maturity

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

U.S. Government agencies

 

$

 —

 

$

 —

 

$

9,859

 

$

(141)

 

$

9,859

 

$

(141)

State, county and municipal

 

 

 —

 

 

 —

 

 

1,630

 

 

(12)

 

 

1,630

 

 

(12)

Total

 

$

 —

 

$

 —

 

$

11,489

 

$

(153)

 

$

11,489

 

$

(153)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

 

Less than 12 Months

 

12 Months or More

 

Total

 

    

Fair Value

    

Unrealized Loss

    

Fair Value

    

Unrealized Loss

    

Fair Value

    

Unrealized Loss

Securities Available for Sale