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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Community West Bancshares New | NASDAQ:CWBC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.06 | -0.34% | 17.34 | 15.20 | 19.99 | 17.98 | 17.30 | 17.35 | 65,296 | 01:00:00 |
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
California
|
77-0446957
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
445 Pine Avenue, Goleta, California
|
93117
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
|
Non-accelerated filer ☐ (Do not check if a smaller reporting company)
|
Smaller reporting company ☒
|
|
Emerging growth company ☐
|
Index
|
Page
|
||
Part I. Financial Information
|
|||
Item 1 – Financial Statements
|
|||
2
|
|||
3
|
|||
4
|
|||
5
|
|||
6
|
|||
7
|
|||
The financial statements included in this Form 10-Q should be read in conjunction with Community West Bancshares’ Annual Report on Form 10-K for the fiscal year ended
December 31, 2019.
|
|||
34
|
|||
53
|
|||
53
|
|||
Part II. Other Information
|
|||
54
|
|||
54
|
|||
55
|
|||
55
|
|||
55
|
|||
55
|
|||
56
|
|||
56
|
Item 1. |
Financial Statements
|
June 30,
2020
|
December 31,
2019
|
|||||||
(unaudited)
|
||||||||
(in thousands, except share amounts)
|
||||||||
Assets:
|
||||||||
Cash and due from banks and federal funds sold
|
$
|
4,679
|
$
|
2,539
|
||||
Interest-earning demand in other financial institutions
|
142,823
|
80,122
|
||||||
Cash and cash equivalents
|
147,502
|
82,661
|
||||||
Investment securities - available-for-sale, at fair value; amortized cost of $18,507 at June 30, 2020 and $19,382 at December 31, 2019
|
18,423
|
19,264
|
||||||
Investment securities - held-to-maturity, at amortized cost; fair value of $5,965 at June 30, 2020 and $6,302 at December 31, 2019
|
5,670
|
6,132
|
||||||
Investment securities - measured at fair value; amortized cost of $66 at June 30, 2020 and December 31, 2019
|
128
|
167
|
||||||
Federal Home Loan Bank stock, at cost
|
3,645
|
2,714
|
||||||
Federal Reserve Bank stock, at cost
|
1,373
|
1,373
|
||||||
Loans:
|
||||||||
Held for sale, at lower of cost or fair value
|
35,090
|
42,046
|
||||||
Held for investment, net of allowance for loan losses of $10,008 at June 30, 2020 and $8,717 at December 31, 2019
|
810,931
|
724,800
|
||||||
Total loans
|
846,021
|
766,846
|
||||||
Other assets acquired through foreclosure, net
|
2,707
|
2,524
|
||||||
Premises and equipment, net
|
7,328
|
7,655
|
||||||
Other assets
|
28,050
|
24,534
|
||||||
Total assets
|
$
|
1,060,847
|
$
|
913,870
|
||||
Liabilities:
|
||||||||
Deposits:
|
||||||||
Non-interest-bearing demand
|
$
|
192,806
|
$
|
110,843
|
||||
Interest-bearing demand
|
311,266
|
314,278
|
||||||
Savings
|
17,862
|
15,689
|
||||||
Certificates of deposit ($250,000 or more)
|
86,046
|
96,431
|
||||||
Other certificates of deposit
|
142,178
|
213,693
|
||||||
Total deposits
|
750,158
|
750,934
|
||||||
Other borrowings
|
210,103
|
65,000
|
||||||
Other liabilities
|
16,493
|
15,958
|
||||||
Total liabilities
|
976,754
|
831,892
|
||||||
Commitments and Contingencies (Note 12)
|
||||||||
Stockholders’ equity:
|
||||||||
Common stock — no par value, 60,000,000 shares authorized; 8,472,463 shares issued and outstanding at June 30, 2020 and 8,472,463 at December 31, 2019
|
42,766
|
42,586
|
||||||
Retained earnings
|
41,380
|
39,470
|
||||||
Accumulated other comprehensive (loss)
|
(53
|
)
|
(78
|
)
|
||||
Total stockholders’ equity
|
84,093
|
81,978
|
||||||
Total liabilities and stockholders’ equity
|
$
|
1,060,847
|
$
|
913,870
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Interest income:
|
(in thousands, except per share amounts)
|
|||||||||||||||
Loans, including fees
|
$
|
10,585
|
$
|
10,907
|
$
|
21,249
|
$
|
21,448
|
||||||||
Investment securities and other
|
192
|
460
|
503
|
944
|
||||||||||||
Total interest income
|
10,777
|
11,367
|
21,752
|
22,392
|
||||||||||||
Interest expense:
|
||||||||||||||||
Deposits
|
1,500
|
2,583
|
3,622
|
5,027
|
||||||||||||
Other borrowings
|
496
|
286
|
886
|
644
|
||||||||||||
Total interest expense
|
1,996
|
2,869
|
4,508
|
5,671
|
||||||||||||
Net interest income
|
8,781
|
8,498
|
17,244
|
16,721
|
||||||||||||
Provision for loan losses
|
762
|
177
|
1,154
|
120
|
||||||||||||
Net interest income after provision for loan losses
|
8,019
|
8,321
|
16,090
|
16,601
|
||||||||||||
Non-interest income:
|
||||||||||||||||
Other loan fees
|
283
|
269
|
624
|
476
|
||||||||||||
Gains from loan sales, net
|
97
|
-
|
287
|
-
|
||||||||||||
Document processing fees
|
108
|
124
|
232
|
211
|
||||||||||||
Service charges
|
62
|
139
|
196
|
278
|
||||||||||||
Other
|
90
|
160
|
251
|
331
|
||||||||||||
Total non-interest income
|
640
|
692
|
1,590
|
1,296
|
||||||||||||
Non-interest expenses:
|
||||||||||||||||
Salaries and employee benefits
|
4,574
|
4,318
|
8,972
|
8,699
|
||||||||||||
Occupancy, net
|
776
|
768
|
1,534
|
1,550
|
||||||||||||
Professional services
|
559
|
405
|
942
|
786
|
||||||||||||
Data processing
|
260
|
201
|
543
|
425
|
||||||||||||
Depreciation
|
206
|
218
|
414
|
431
|
||||||||||||
FDIC assessment
|
133
|
154
|
277
|
324
|
||||||||||||
Advertising and marketing
|
265
|
230
|
418
|
359
|
||||||||||||
Stock based compensation
|
95
|
97
|
180
|
192
|
||||||||||||
Other
|
135
|
369
|
452
|
711
|
||||||||||||
Total non-interest expenses
|
7,003
|
6,760
|
13,732
|
13,477
|
||||||||||||
Income before provision for income taxes
|
1,656
|
2,253
|
3,948
|
4,420
|
||||||||||||
Provision for income taxes
|
496
|
673
|
1,190
|
1,330
|
||||||||||||
Net income
|
$
|
1,160
|
$
|
1,580
|
$
|
2,758
|
$
|
3,090
|
||||||||
Earnings per share:
|
||||||||||||||||
Basic
|
$
|
0.14
|
$
|
0.19
|
$
|
0.33
|
$
|
0.37
|
||||||||
Diluted
|
$
|
0.14
|
$
|
0.18
|
$
|
0.32
|
$
|
0.36
|
||||||||
Weighted average number of common shares outstanding:
|
||||||||||||||||
Basic
|
8,472
|
8,455
|
8,472
|
8,473
|
||||||||||||
Diluted
|
8,498
|
8,562
|
8,541
|
8,582
|
||||||||||||
Dividends declared per common share
|
$
|
0.045
|
$
|
0.055
|
$
|
0.100
|
$
|
0.105
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Net income
|
$
|
1,160
|
$
|
1,580
|
$
|
2,758
|
$
|
3,090
|
||||||||
Other comprehensive income, net:
|
||||||||||||||||
Unrealized income on securities available-for-sale (AFS), net (tax effect of $24, $44, $10 and $49 for each respective period presented)
|
59
|
63
|
25
|
70
|
||||||||||||
Net other comprehensive income
|
59
|
63
|
25
|
70
|
||||||||||||
Comprehensive income
|
$
|
1,219
|
$
|
1,643
|
$
|
2,783
|
$
|
3,160
|
Three Months Ended June 30, 2020
|
Common Stock
|
Accumulated
Other
Comprehensive
|
Retained
|
Total
Stockholders’
|
||||||||||||||||
Shares
|
Amount
|
Income (Loss)
|
Earnings
|
Equity
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Balance, March 31, 2020:
|
8,472
|
$
|
42,671
|
$
|
(112
|
)
|
$
|
40,602
|
$
|
83,161
|
||||||||||
Net income
|
—
|
—
|
—
|
1,160
|
1,160
|
|||||||||||||||
Exercise of stock options
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Stock based compensation
|
—
|
95
|
—
|
—
|
95
|
|||||||||||||||
Dividends on common stock
|
—
|
—
|
—
|
(382
|
)
|
(382
|
)
|
|||||||||||||
Other comprehensive income, net
|
—
|
—
|
59
|
—
|
59
|
|||||||||||||||
Balance, June 30, 2020
|
8,472
|
$
|
42,766
|
$
|
(53
|
)
|
$
|
41,380
|
$
|
84,093
|
Three Months Ended June 30, 2019
|
Common Stock
|
Accumulated
Other
Comprehensive
|
Retained
|
Total
Stockholders’
|
||||||||||||||||
Shares
|
Amount
|
Income (Loss)
|
Earnings
|
Equity
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Balance, March 31, 2019:
|
8,450
|
$
|
42,173
|
$
|
(134
|
)
|
$
|
34,414
|
$
|
76,453
|
||||||||||
Net income
|
—
|
—
|
—
|
1,580
|
1,580
|
|||||||||||||||
Exercise of stock options
|
15
|
102
|
—
|
—
|
102
|
|||||||||||||||
Stock based compensation
|
—
|
97
|
—
|
—
|
97
|
|||||||||||||||
Dividends on common stock
|
—
|
—
|
—
|
(466
|
)
|
(466
|
)
|
|||||||||||||
Other comprehensive income, net
|
—
|
—
|
63
|
—
|
63
|
|||||||||||||||
Balance, June 30, 2019
|
8,465
|
$
|
42,372
|
$
|
(71
|
)
|
$
|
35,528
|
$
|
77,829
|
Six Months Ended June 30, 2020
|
Common Stock
|
Accumulated
Other
Comprehensive
|
Retained
|
Total
Stockholders’
|
||||||||||||||||
Shares
|
Amount
|
Income (Loss)
|
Earnings
|
Equity
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Balance, December 31, 2019:
|
8,472
|
$
|
42,586
|
$
|
(78
|
)
|
$
|
39,470
|
$
|
81,978
|
||||||||||
Net income
|
—
|
—
|
—
|
2,758
|
2,758
|
|||||||||||||||
Exercise of stock options
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Stock based compensation
|
—
|
180
|
—
|
—
|
180
|
|||||||||||||||
Dividends on common stock
|
—
|
—
|
—
|
(848
|
)
|
(848
|
)
|
|||||||||||||
Other comprehensive income, net
|
—
|
—
|
25
|
—
|
25
|
|||||||||||||||
Balance, June 30, 2020
|
8,472
|
$
|
42,766
|
$
|
(53
|
)
|
$
|
41,380
|
$
|
84,093
|
Six Months Ended June 30, 2019
|
Common Stock
|
Accumulated
Other
Comprehensive
|
Retained
|
Total
Stockholders’
|
||||||||||||||||
Shares
|
Amount
|
Income (Loss)
|
Earnings
|
Equity
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Balance, December 31, 2018:
|
8,533
|
$
|
42,964
|
$
|
(141
|
)
|
$
|
33,328
|
$
|
76,151
|
||||||||||
Net income
|
—
|
—
|
—
|
3,090
|
3,090
|
|||||||||||||||
Exercise of stock options
|
21
|
145
|
—
|
—
|
145
|
|||||||||||||||
Stock based compensation
|
—
|
192
|
—
|
—
|
192
|
|||||||||||||||
Common stock repurchase
|
(89
|
)
|
(929
|
)
|
—
|
—
|
(929
|
)
|
||||||||||||
Dividends on common stock
|
—
|
—
|
—
|
(890
|
)
|
(890
|
)
|
|||||||||||||
Other comprehensive income, net
|
—
|
—
|
70
|
—
|
70
|
|||||||||||||||
Balance, June 30, 2019
|
8,465
|
$
|
42,372
|
$
|
(71
|
)
|
$
|
35,528
|
$
|
77,829
|
Six Months Ended June 30,
|
||||||||
2020
|
2019
|
|||||||
(in thousands)
|
||||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
2,758
|
$
|
3,090
|
||||
Adjustments to reconcile net income to cash provided by operating activities:
|
||||||||
Provision for loan losses
|
1,154
|
120
|
||||||
Depreciation
|
414
|
431
|
||||||
Stock based compensation
|
180
|
192
|
||||||
Deferred income taxes
|
(217
|
)
|
(16
|
)
|
||||
Net accretion of discounts and premiums for investment securities
|
46
|
47
|
||||||
(Gains) Losses on:
|
||||||||
Sale of loans, net
|
(287
|
)
|
—
|
|||||
Sale of assets, net
|
25
|
—
|
||||||
Loans originated for sale and principal collections, net
|
6,956
|
2,908
|
||||||
Changes in:
|
||||||||
Investment securities held at fair value
|
39
|
(24
|
)
|
|||||
Other assets
|
(3,717
|
)
|
(714
|
)
|
||||
Other liabilities
|
993
|
(697
|
)
|
|||||
Servicing assets, net
|
(125
|
)
|
12
|
|||||
Net cash provided by operating activities
|
8,219
|
5,349
|
||||||
Cash flows from investing activities:
|
||||||||
Principal pay downs and maturities of available-for-sale securities
|
2,342
|
1,553
|
||||||
Purchase of available-for-sale securities
|
(1,500
|
)
|
—
|
|||||
Principal pay downs and maturities of held-to-maturity securities
|
449
|
482
|
||||||
Loan originations and principal collections, net
|
(87,105
|
)
|
(23,497
|
)
|
||||
Purchase of restricted stock, net
|
(931
|
)
|
—
|
|||||
Purchase of premises and equipment, net
|
(112
|
)
|
(2,052
|
)
|
||||
Net cash used in investing activities
|
(86,857
|
)
|
(23,514
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Net (decrease) increase in deposits
|
(776
|
)
|
49,105
|
|||||
Net increase (decrease) in borrowings
|
145,103
|
(29,000
|
)
|
|||||
Exercise of stock options
|
—
|
145
|
||||||
Cash dividends paid on common stock
|
(848
|
)
|
(890
|
)
|
||||
Common stock repurchase
|
—
|
(929
|
)
|
|||||
Net cash provided by financing activities
|
143,479
|
18,431
|
||||||
Net increase cash and cash equivalents
|
64,841
|
266
|
||||||
Cash and cash equivalents at beginning of period
|
82,661
|
56,915
|
||||||
Cash and cash equivalents at end of period
|
$
|
147,502
|
$
|
57,181
|
||||
Supplemental disclosure:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$
|
4,557
|
$
|
5,786
|
||||
Non-cash investing and financing activity:
|
||||||||
Transfers to other assets acquired through foreclosure, net
|
106
|
1,074
|
||||||
Operating lease right-of-use asset
|
—
|
7,190
|
|
|||||
Operating lease liability
|
—
|
6,757
|
1. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
• |
Commercial Real Estate, Commercial, Commercial Agriculture, SBA, HELOC, Single Family Residential, and Consumer – Migration analysis combined with risk rating is used to determine the required ALL for all
non-impaired loans. In addition, the migration results are adjusted based upon qualitative factors that affect the specific portfolio category. Reserves on impaired loans are determined based upon the individual characteristics of the loan.
|
|
• |
Manufactured Housing – The ALL is calculated on the basis of loss history and risk rating, which is primarily a function of delinquency. In addition, the loss results are adjusted based upon qualitative
factors that affect this specific portfolio.
|
|
• |
The expected future cash flows are estimated and then discounted at the effective interest rate.
|
|
• |
The value of the underlying collateral net of selling costs. Selling costs are estimated based on industry standards, the Company’s actual experience or actual costs incurred as appropriate. When evaluating
real estate collateral, the Company typically uses appraisals or valuations, no more than twelve months old at time of evaluation. When evaluating non-real estate collateral securing the loan, the Company will use audited financial
statements or appraisals no more than twelve months old at time of evaluation. Additionally, for both real estate and non-real estate collateral, the Company may use other sources to determine value as deemed appropriate.
|
|
• |
The loan’s observable market price.
|
|
• |
Concentrations of credit
|
|
• |
Trends in volume, maturity, and composition of loans
|
|
• |
Volume and trend in delinquency, nonaccrual, and classified assets
|
|
• |
Economic conditions
|
|
• |
Geographic distance
|
|
• |
Policy and procedures or underwriting standards
|
|
• |
Staff experience and ability
|
|
• |
Value of underlying collateral
|
|
• |
Competition, legal, or regulatory environment
|
|
• |
Results of outside exams and quality of loan review and Board oversight
|
|
• |
Migration
|
|
• |
Elevated risk
|
2. |
INVESTMENT SECURITIES
|
June 30, 2020
|
||||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
(Losses)
|
Fair
Value
|
|||||||||||||
Securities available-for-sale
|
(in thousands)
|
|||||||||||||||
U.S. government agency notes
|
$
|
7,002
|
$
|
—
|
$
|
(64
|
)
|
$
|
6,938
|
|||||||
U.S. government agency collateralized mortgage obligations (“CMO”)
|
10,005
|
28
|
(43
|
)
|
9,990
|
|||||||||||
Other securities
|
1,500
|
—
|
(5
|
)
|
1,495
|
|||||||||||
Total
|
$
|
18,507
|
$
|
28
|
$
|
(112
|
)
|
$
|
18,423
|
|||||||
Securities held-to-maturity
|
||||||||||||||||
U.S. government agency mortgage backed securities (“MBS”)
|
$
|
5,670
|
$
|
295
|
$
|
—
|
$
|
5,965
|
||||||||
Total
|
$
|
5,670
|
$
|
295
|
$
|
—
|
$
|
5,965
|
||||||||
Securities measured at fair value
|
||||||||||||||||
Equity securities: Farmer Mac class A stock
|
$
|
66
|
$
|
62
|
$
|
$ —
|
$
|
128
|
||||||||
Total
|
$
|
66
|
$
|
62
|
$
|
—
|
$
|
128
|
December 31, 2019
|
||||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
(Losses)
|
Fair
Value
|
|||||||||||||
Securities available-for-sale
|
(in thousands)
|
|||||||||||||||
U.S. government agency notes
|
$
|
8,112
|
$
|
—
|
$
|
(64
|
)
|
$
|
8,048
|
|||||||
U.S. government agency collateralized mortgage obligations (“CMO”)
|
11,270
|
23
|
(77
|
)
|
11,216
|
|||||||||||
Total
|
$
|
19,382
|
$
|
23
|
$
|
(141
|
)
|
$
|
19,264
|
|||||||
Securities held-to-maturity
|
||||||||||||||||
U.S. government agency mortgage backed securities (“MBS”)
|
$
|
6,132
|
$
|
189
|
$
|
(19
|
)
|
$
|
6,302
|
|||||||
Total
|
$
|
6,132
|
$
|
189
|
$
|
(19
|
)
|
$
|
6,302
|
|||||||
Securities measured at fair value
|
||||||||||||||||
Equity securities: Farmer Mac class A stock
|
$
|
66
|
$
|
101
|
$
|
—
|
$
|
167
|
||||||||
Total
|
$
|
66
|
$
|
101
|
$
|
—
|
$
|
167
|
June 30, 2020
|
||||||||||||||||||||||||||||||||||||||||
Less than One
Year
|
One to Five
Years
|
Five to Ten
Years
|
Over Ten
Years
|
Total
|
||||||||||||||||||||||||||||||||||||
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
|||||||||||||||||||||||||||||||
Securities available-for-sale
|
(dollars in thousands)
|
|||||||||||||||||||||||||||||||||||||||
U.S. government agency notes
|
$
|
—
|
—
|
$
|
928
|
0.6
|
%
|
$
|
6,010
|
1.1
|
%
|
$
|
—
|
—
|
$
|
6,938
|
1.1
|
%
|
||||||||||||||||||||||
U.S. government agency CMO
|
442
|
2.3
|
%
|
8,218
|
0.7
|
%
|
1,330
|
0.9
|
%
|
—
|
—
|
9,990
|
0.8
|
%
|
||||||||||||||||||||||||||
Other securities
|
—
|
—
|
—
|
—
|
1,495
|
5.0
|
%
|
—
|
—
|
1,495
|
5.0
|
%
|
||||||||||||||||||||||||||||
Total
|
$
|
442
|
2.3
|
%
|
$
|
9,146
|
0.7
|
%
|
$
|
8,835
|
1.8
|
%
|
$
|
—
|
—
|
$
|
18,423
|
1.2
|
%
|
|||||||||||||||||||||
Securities held-to-maturity
|
||||||||||||||||||||||||||||||||||||||||
U.S. government agency MBS
|
$
|
—
|
—
|
$
|
4,897
|
3.2
|
%
|
$
|
—
|
—
|
$
|
773
|
3.6
|
%
|
$
|
5,670
|
3.3
|
%
|
||||||||||||||||||||||
Total
|
$
|
—
|
—
|
$
|
4,897
|
3.2
|
%
|
$
|
—
|
—
|
$
|
773
|
3.6
|
%
|
$
|
5,670
|
3.3
|
%
|
||||||||||||||||||||||
Securities measured at fair value
|
||||||||||||||||||||||||||||||||||||||||
Farmer Mac class A stock
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
128
|
—
|
|||||||||||||||||||||||||
Total
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
128
|
—
|
December 31, 2019
|
||||||||||||||||||||||||||||||||||||||||
Less than One
Year
|
One to Five
Years
|
Five to Ten
Years
|
Over Ten
Years
|
Total
|
||||||||||||||||||||||||||||||||||||
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
|||||||||||||||||||||||||||||||
Securities available-for-sale
|
(dollars in thousands)
|
|||||||||||||||||||||||||||||||||||||||
U.S. government agency notes
|
$
|
—
|
—
|
$
|
1,094
|
2.3
|
%
|
$
|
6,955
|
2.8
|
%
|
$
|
—
|
—
|
$
|
8,049
|
2.8
|
%
|
||||||||||||||||||||||
U.S. government agency CMO
|
—
|
—
|
3,766
|
2.1
|
%
|
6,120
|
2.3
|
%
|
1,329
|
2.4
|
%
|
11,215
|
2.3
|
%
|
||||||||||||||||||||||||||
Total
|
$
|
—
|
—
|
$
|
4,860
|
2.2
|
%
|
$
|
13,075
|
2.6
|
%
|
$
|
1,329
|
2.4
|
%
|
$
|
19,264
|
2.5
|
%
|
|||||||||||||||||||||
Securities held-to-maturity
|
||||||||||||||||||||||||||||||||||||||||
U.S. government agency MBS
|
$
|
—
|
—
|
$
|
2,465
|
4.2
|
%
|
$
|
2,887
|
2.9
|
%
|
$
|
780
|
3.6
|
%
|
$
|
6,132
|
3.5
|
%
|
|||||||||||||||||||||
Total
|
$
|
—
|
—
|
$
|
2,465
|
4.2
|
%
|
$
|
2,887
|
2.9
|
%
|
$
|
780
|
3.6
|
%
|
$
|
6,132
|
3.5
|
%
|
|||||||||||||||||||||
Securities measured at fair value
|
||||||||||||||||||||||||||||||||||||||||
Farmer Mac class A stock
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
167
|
—
|
|||||||||||||||||||||||||
Total
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
—
|
—
|
$
|
167
|
—
|
June 30,
2020
|
December 31,
2019
|
|||||||||||||||
Amortized
Cost
|
Estimated
Fair Value
|
Amortized
Cost
|
Estimated
Fair Value
|
|||||||||||||
Securities available-for-sale
|
(in thousands)
|
|||||||||||||||
Due in one year or less
|
$
|
439
|
$
|
442
|
$
|
—
|
$
|
—
|
||||||||
After one year through five years
|
9,145
|
9,146
|
4,884
|
4,860
|
||||||||||||
After five years through ten years
|
8,923
|
8,835
|
13,121
|
13,075
|
||||||||||||
After ten years
|
—
|
—
|
1,377
|
1,329
|
||||||||||||
Total
|
$
|
18,507
|
$
|
18,423
|
$
|
19,382
|
$
|
19,264
|
||||||||
Securities held-to-maturity
|
||||||||||||||||
Due in one year or less
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||
After one year through five years
|
4,897
|
5,070
|
2,465
|
2,565
|
||||||||||||
After five years through ten years
|
—
|
—
|
2,887
|
2,892
|
||||||||||||
After ten years
|
773
|
895
|
780
|
845
|
||||||||||||
Total
|
$
|
5,670
|
$
|
5,965
|
$
|
6,132
|
$
|
6,302
|
||||||||
Securities measured at fair value
|
||||||||||||||||
Farmer Mac class A stock
|
$
|
66
|
$
|
128
|
$
|
66
|
$
|
167
|
||||||||
Total
|
$
|
66
|
$
|
128
|
$
|
66
|
$
|
167
|
June 30, 2020
|
||||||||||||||||||||||||
Less Than Twelve Months
|
More Than Twelve Months
|
Total
|
||||||||||||||||||||||
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||||||||
Securities available-for-sale
|
(in thousands)
|
|||||||||||||||||||||||
U.S. government agency notes
|
$
|
4
|
$
|
1,104
|
$
|
60
|
$
|
5,834
|
$
|
64
|
$
|
6,938
|
||||||||||||
U.S. government agency CMO
|
7
|
510
|
36
|
5,336
|
43
|
5,846
|
||||||||||||||||||
Other securities
|
5
|
1,495
|
—
|
—
|
5
|
1,495
|
||||||||||||||||||
Total
|
$
|
16
|
$
|
3,109
|
$
|
96
|
$
|
11,170
|
$
|
112
|
$
|
14,279
|
||||||||||||
Securities held-to-maturity
|
||||||||||||||||||||||||
U.S. Government-agency MBS
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||||
Total
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||||
Securities measured at fair value
|
||||||||||||||||||||||||
Farmer Mac class A stock
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||||
Total
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
December 31, 2019
|
||||||||||||||||||||||||
Less Than Twelve Months
|
More Than Twelve Months
|
Total
|
||||||||||||||||||||||
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||||||||
Securities available-for-sale
|
(in thousands)
|
|||||||||||||||||||||||
U.S. government agency notes
|
$
|
3
|
$
|
1,126
|
$
|
61
|
$
|
6,922
|
$
|
64
|
$
|
8,048
|
||||||||||||
U.S. government agency CMO
|
25
|
5,275
|
52
|
2,264
|
77
|
7,539
|
||||||||||||||||||
Total
|
$
|
28
|
$
|
6,401
|
$
|
113
|
$
|
9,186
|
$
|
141
|
$
|
15,587
|
||||||||||||
Securities held-to-maturity
|
||||||||||||||||||||||||
U.S. Government-agency MBS
|
$
|
—
|
$
|
—
|
$
|
19
|
$
|
2,139
|
$
|
19
|
$
|
2,139
|
||||||||||||
Total
|
$
|
—
|
$
|
—
|
$
|
19
|
$
|
2,139
|
$
|
19
|
$
|
2,139
|
||||||||||||
Securities measured at fair value
|
||||||||||||||||||||||||
Farmer Mac class A stock
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||||
Total
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
3. |
LOANS HELD FOR SALE
|
4. |
LOANS HELD FOR INVESTMENT
|
June 30,
2020
|
December 31,
2019
|
|||||||
(in thousands)
|
||||||||
Manufactured housing
|
$
|
267,343
|
$
|
257,247
|
||||
Commercial real estate
|
392,790
|
385,642
|
||||||
Commercial
|
69,178
|
69,843
|
||||||
SBA (1)
|
79,060
|
4,429
|
||||||
HELOC
|
3,918
|
4,531
|
||||||
Single family real estate
|
11,234
|
11,845
|
||||||
Consumer
|
45
|
94
|
||||||
823,568
|
733,631
|
|||||||
Allowance for loan losses
|
(10,008
|
)
|
(8,717
|
)
|
||||
Deferred fees, net
|
(2,577
|
)
|
(58
|
)
|
||||
Discount on SBA loans
|
(52
|
)
|
(56
|
)
|
||||
Total loans held for investment, net
|
$
|
810,931
|
$
|
724,800
|
June 30, 2020
|
||||||||||||||||||||||||||||||||
Current
|
30-59 Days
Past Due
|
60-89 Days
Past Due
|
Over 90 Days
Past Due
|
Total
Past Due
|
Nonaccrual
|
Total
|
Recorded
Investment
Over 90 Days
and Accruing
|
|||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||
Manufactured housing
|
$
|
265,696
|
$
|
323
|
$
|
391
|
$
|
—
|
$
|
714
|
$
|
933
|
$
|
267,343
|
$
|
—
|
||||||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||||||||||
Commercial real estate
|
339,017
|
—
|
—
|
—
|
—
|
84
|
339,101
|
—
|
||||||||||||||||||||||||
SBA 504 1st trust deed
|
19,535
|
—
|
—
|
—
|
—
|
—
|
19,535
|
—
|
||||||||||||||||||||||||
Land
|
5,009
|
—
|
—
|
—
|
—
|
—
|
5,009
|
—
|
||||||||||||||||||||||||
Construction
|
29,145
|
—
|
—
|
—
|
—
|
—
|
29,145
|
—
|
||||||||||||||||||||||||
Commercial
|
67,633
|
—
|
—
|
—
|
—
|
1,545
|
69,178
|
—
|
||||||||||||||||||||||||
SBA
|
78,736
|
—
|
—
|
—
|
—
|
324
|
79,060
|
—
|
||||||||||||||||||||||||
HELOC
|
3,918
|
—
|
—
|
—
|
—
|
—
|
3,918
|
—
|
||||||||||||||||||||||||
Single family real estate
|
11,208
|
—
|
26
|
—
|
26
|
—
|
11,234
|
—
|
||||||||||||||||||||||||
Consumer
|
45
|
—
|
—
|
—
|
—
|
—
|
45
|
—
|
||||||||||||||||||||||||
Total
|
$
|
819,942
|
$
|
323
|
$
|
417
|
$
|
—
|
$
|
740
|
$
|
2,886
|
$
|
823,568
|
$
|
—
|
December 31, 2019
|
||||||||||||||||||||||||||||||||
Current
|
30-59 Days
Past Due
|
60-89 Days
Past Due
|
Over 90 Days
Past Due
|
Total
Past Due
|
Nonaccrual
|
Total
|
Recorded
Investment
Over 90 Days
and Accruing
|
|||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||
Manufactured housing
|
$
|
256,251
|
$
|
156
|
$
|
246
|
$
|
—
|
$
|
402
|
$
|
594
|
$
|
257,247
|
$
|
—
|
||||||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||||||||||
Commercial real estate
|
327,255
|
—
|
—
|
—
|
—
|
84
|
327,339
|
—
|
||||||||||||||||||||||||
SBA 504 1st trust deed
|
17,151
|
1,401
|
—
|
—
|
1,401
|
—
|
18,552
|
—
|
||||||||||||||||||||||||
Land
|
4,457
|
—
|
—
|
—
|
—
|
—
|
4,457
|
—
|
||||||||||||||||||||||||
Construction
|
35,294
|
—
|
—
|
—
|
—
|
—
|
35,294
|
—
|
||||||||||||||||||||||||
Commercial
|
68,224
|
—
|
—
|
—
|
—
|
1,619
|
69,843
|
—
|
||||||||||||||||||||||||
SBA
|
3,935
|
112
|
—
|
—
|
112
|
382
|
4,429
|
—
|
||||||||||||||||||||||||
HELOC
|
4,531
|
—
|
—
|
—
|
—
|
—
|
4,531
|
—
|
||||||||||||||||||||||||
Single family real estate
|
11,813
|
32
|
—
|
—
|
32
|
—
|
11,845
|
—
|
||||||||||||||||||||||||
Consumer
|
94
|
—
|
—
|
—
|
—
|
—
|
94
|
—
|
||||||||||||||||||||||||
Total
|
$
|
729,005
|
$
|
1,701
|
$
|
246
|
$
|
—
|
$
|
1,947
|
$
|
2,679
|
$
|
733,631
|
$
|
—
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands)
|
(in thousands)
|
|||||||||||||||
Beginning balance
|
$
|
9,167
|
$
|
8,648
|
$
|
8,717
|
$
|
8,691
|
||||||||
Charge-offs
|
—
|
(14
|
)
|
—
|
(31
|
)
|
||||||||||
Recoveries
|
79
|
76
|
137
|
107
|
||||||||||||
Net recoveries
|
79
|
62
|
137
|
76
|
||||||||||||
Provision
|
762
|
177
|
1,154
|
120
|
||||||||||||
Ending balance
|
$
|
10,008
|
$
|
8,887
|
$
|
10,008
|
$
|
8,887
|
For the Three Months Ended June 30,
|
||||||||||||||||||||||||||||||||
Manufactured
Housing
|
Commercial
Real Estate
|
Commercial
|
SBA
|
HELOC
|
Single Family
Real Estate
|
Consumer
|
Total
|
|||||||||||||||||||||||||
2020
|
(in thousands)
|
|||||||||||||||||||||||||||||||
Beginning balance
|
$
|
2,364
|
$
|
5,484
|
$
|
1,164
|
$
|
29
|
$
|
27
|
$
|
96
|
$
|
3
|
$
|
9,167
|
||||||||||||||||
Charge-offs
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Recoveries
|
7
|
20
|
47
|
3
|
2
|
—
|
—
|
79
|
||||||||||||||||||||||||
Net recoveries
|
7
|
20
|
47
|
3
|
2
|
—
|
—
|
79
|
||||||||||||||||||||||||
Provision (credit)
|
99
|
255
|
292
|
96
|
(3
|
)
|
24
|
(1
|
)
|
762
|
||||||||||||||||||||||
Ending balance
|
$
|
2,470
|
$
|
5,759
|
$
|
1,503
|
$
|
128
|
$
|
26
|
$
|
120
|
$
|
2
|
$
|
10,008
|
||||||||||||||||
2019
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$
|
2,188
|
$
|
5,058
|
$
|
1,219
|
$
|
44
|
$
|
48
|
$
|
91
|
$
|
—
|
$
|
8,648
|
||||||||||||||||
Charge-offs
|
—
|
—
|
(14
|
)
|
—
|
—
|
—
|
—
|
(14
|
)
|
||||||||||||||||||||||
Recoveries
|
37
|
12
|
20
|
6
|
1
|
—
|
—
|
76
|
||||||||||||||||||||||||
Net recoveries
|
37
|
12
|
6
|
6
|
1
|
—
|
—
|
62
|
||||||||||||||||||||||||
Provision (credit)
|
(26
|
)
|
288
|
(75
|
)
|
(10
|
)
|
—
|
—
|
—
|
177
|
|||||||||||||||||||||
Ending balance
|
$
|
2,199
|
$
|
5,358
|
$
|
1,150
|
$
|
40
|
$
|
49
|
$
|
91
|
$
|
—
|
$
|
8,887
|
For the Six Months Ended June 30,
|
||||||||||||||||||||||||||||||||
Manufactured
Housing
|
Commercial
Real Estate
|
Commercial
|
SBA
|
HELOC
|
Single Family
Real Estate
|
Consumer
|
Total
|
|||||||||||||||||||||||||
2020
|
(in thousands)
|
|||||||||||||||||||||||||||||||
Beginning balance
|
$
|
2,184
|
$
|
5,217
|
$
|
1,162
|
$
|
32
|
$
|
27
|
$
|
92
|
$
|
3
|
$
|
8,717
|
||||||||||||||||
Charge-offs
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Recoveries
|
13
|
40
|
74
|
6
|
3
|
1
|
—
|
137
|
||||||||||||||||||||||||
Net recoveries
|
13
|
40
|
74
|
6
|
3
|
1
|
—
|
137
|
||||||||||||||||||||||||
Provision (credit)
|
273
|
502
|
267
|
90
|
(4
|
)
|
27
|
(1
|
)
|
1,154
|
||||||||||||||||||||||
Ending balance
|
$
|
2,470
|
$
|
5,759
|
$
|
1,503
|
$
|
128
|
$
|
26
|
$
|
120
|
$
|
2
|
$
|
10,008
|
||||||||||||||||
2019
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$
|
2,196
|
$
|
5,028
|
$
|
1,210
|
$
|
79
|
$
|
90
|
$
|
88
|
$
|
—
|
$
|
8,691
|
||||||||||||||||
Charge-offs
|
—
|
—
|
(31
|
)
|
—
|
—
|
—
|
—
|
(31
|
)
|
||||||||||||||||||||||
Recoveries
|
43
|
12
|
39
|
11
|
2
|
—
|
—
|
107
|
||||||||||||||||||||||||
Net recoveries
|
43
|
12
|
8
|
11
|
2
|
—
|
—
|
76
|
||||||||||||||||||||||||
Provision (credit)
|
(40
|
)
|
318
|
(68
|
)
|
(50
|
)
|
(43
|
)
|
3
|
—
|
120
|
||||||||||||||||||||
Ending balance
|
$
|
2,199
|
$
|
5,358
|
$
|
1,150
|
$
|
40
|
$
|
49
|
$
|
91
|
$
|
—
|
$
|
8,887
|
Manufactured
Housing
|
Commercial
Real Estate
|
Commercial
|
SBA
|
HELOC
|
Single Family
Real Estate
|
Consumer
|
Total
Loans
|
|||||||||||||||||||||||||
Loans Held for Investment as of June 30, 2020:
|
(in thousands)
|
|||||||||||||||||||||||||||||||
Recorded Investment:
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
$
|
5,144
|
$
|
—
|
$
|
149
|
$
|
—
|
$
|
—
|
$
|
459
|
$
|
—
|
$
|
5,752
|
||||||||||||||||
Impaired loans with no allowance recorded
|
2,392
|
315
|
1,545
|
324
|
—
|
1,754
|
—
|
6,330
|
||||||||||||||||||||||||
Total loans individually evaluated for impairment
|
7,536
|
315
|
1,694
|
324
|
—
|
2,213
|
—
|
12,082
|
||||||||||||||||||||||||
Loans collectively evaluated for impairment
|
259,807
|
392,706
|
67,253
|
78,736
|
3,918
|
9,021
|
45
|
811,486
|
||||||||||||||||||||||||
Total loans held for investment
|
$
|
267,343
|
$
|
393,021
|
$
|
68,947
|
$
|
79,060
|
$
|
3,918
|
$
|
11,234
|
$
|
45
|
$
|
823,568
|
||||||||||||||||
Unpaid Principal Balance
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
$
|
5,144
|
$
|
—
|
$
|
149
|
$
|
—
|
$
|
—
|
$
|
459
|
$
|
—
|
$
|
5,752
|
||||||||||||||||
Impaired loans with no allowance recorded
|
3,213
|
382
|
1,801
|
690
|
—
|
1,754
|
—
|
7,840
|
||||||||||||||||||||||||
Total loans individually evaluated for impairment
|
8,357
|
382
|
1,950
|
690
|
—
|
2,213
|
—
|
13,592
|
||||||||||||||||||||||||
Loans collectively evaluated for impairment
|
259,807
|
392,706
|
67,253
|
78,736
|
3,918
|
9,021
|
45
|
811,486
|
||||||||||||||||||||||||
Total loans held for investment
|
$
|
268,164
|
$
|
393,088
|
$
|
69,203
|
$
|
79,426
|
$
|
3,918
|
$
|
11,234
|
$
|
45
|
$
|
825,078
|
||||||||||||||||
Related Allowance for Credit Losses
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
$
|
314
|
$
|
—
|
$
|
30
|
$
|
—
|
$
|
—
|
$
|
16
|
$
|
—
|
$
|
360
|
||||||||||||||||
Impaired loans with no allowance recorded
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Total loans individually evaluated for impairment
|
314
|
—
|
30
|
—
|
—
|
16
|
—
|
360
|
||||||||||||||||||||||||
Loans collectively evaluated for impairment
|
2,156
|
5,759
|
1,473
|
128
|
26
|
104
|
2
|
9,648
|
||||||||||||||||||||||||
Total loans held for investment
|
$
|
2,470
|
$
|
5,759
|
$
|
1,503
|
$
|
128
|
$
|
26
|
$
|
120
|
$
|
2
|
$
|
10,008
|
Manufactured
Housing
|
Commercial
Real Estate
|
Commercial
|
SBA
|
HELOC
|
Single Family
Real Estate
|
Consumer
|
Total
Loans
|
|||||||||||||||||||||||||
Loans Held for Investment as of December 31, 2019:
|
(in thousands)
|
|||||||||||||||||||||||||||||||
Recorded Investment:
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
$
|
5,702
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
470
|
$
|
—
|
$
|
6,172
|
||||||||||||||||
Impaired loans with no allowance recorded
|
2,296
|
318
|
1,802
|
382
|
—
|
1,858
|
—
|
6,656
|
||||||||||||||||||||||||
Total loans individually evaluated for impairment
|
7,998
|
318
|
1,802
|
382
|
—
|
2,328
|
—
|
12,828
|
||||||||||||||||||||||||
Loans collectively evaluated for impairment
|
249,249
|
385,324
|
68,041
|
4,047
|
4,531
|
9,517
|
94
|
720,803
|
||||||||||||||||||||||||
Total loans held for investment
|
$
|
257,247
|
$
|
385,642
|
$
|
69,843
|
$
|
4,429
|
$
|
4,531
|
$
|
11,845
|
$
|
94
|
$
|
733,631
|
||||||||||||||||
Unpaid Principal Balance
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
$
|
5,702
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
470
|
$
|
—
|
$
|
6,172
|
||||||||||||||||
Impaired loans with no allowance recorded
|
3,134
|
384
|
2,156
|
736
|
—
|
1,858
|
—
|
8,268
|
||||||||||||||||||||||||
Total loans individually evaluated for impairment
|
8,836
|
384
|
2,156
|
736
|
—
|
2,328
|
—
|
14,440
|
||||||||||||||||||||||||
Loans collectively evaluated for impairment
|
249,249
|
385,324
|
68,041
|
4,047
|
4,531
|
9,517
|
94
|
720,803
|
||||||||||||||||||||||||
Total loans held for investment
|
$
|
258,085
|
$
|
385,708
|
$
|
70,197
|
$
|
4,783
|
$
|
4,531
|
$
|
11,845
|
$
|
94
|
$
|
735,243
|
||||||||||||||||
Related Allowance for Credit Losses
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
$
|
334
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
18
|
$
|
—
|
$
|
352
|
||||||||||||||||
Impaired loans with no allowance recorded
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Total loans individually evaluated for impairment
|
334
|
—
|
—
|
—
|
—
|
18
|
—
|
352
|
||||||||||||||||||||||||
Loans collectively evaluated for impairment
|
1,850
|
5,217
|
1,162
|
32
|
27
|
74
|
3
|
8,365
|
||||||||||||||||||||||||
Total loans held for investment
|
$
|
2,184
|
$
|
5,217
|
$
|
1,162
|
$
|
32
|
$
|
27
|
$
|
92
|
$
|
3
|
$
|
8,717
|
June 30,
2020
|
December 31,
2019
|
|||||||
(in thousands)
|
||||||||
Impaired loans with a specific valuation allowance under ASC 310
|
$
|
5,752
|
$
|
6,172
|
||||
Impaired loans without a specific valuation allowance under ASC 310
|
6,330
|
6,656
|
||||||
Total impaired loans
|
$
|
12,082
|
$
|
12,828
|
||||
Valuation allowance related to impaired loans
|
$
|
360
|
$
|
352
|
June 30,
2020
|
December 31,
2019
|
|||||||
(in thousands)
|
||||||||
Manufactured housing
|
$
|
7,536
|
$
|
7,998
|
||||
Commercial real estate :
|
||||||||
Commercial real estate
|
84
|
84
|
||||||
SBA 504 1st trust deed
|
231
|
234
|
||||||
Land
|
—
|
—
|
||||||
Construction
|
—
|
—
|
||||||
Commercial
|
1,694
|
1,802
|
||||||
SBA
|
324
|
382
|
||||||
HELOC
|
—
|
—
|
||||||
Single family real estate
|
2,213
|
2,328
|
||||||
Consumer
|
—
|
—
|
||||||
Total
|
$
|
12,082
|
$
|
12,828
|
Three Months Ended June 30,
|
||||||||||||||||
2020
|
2019
|
|||||||||||||||
Average
Investment
in Impaired
Loans
|
Interest
Income
|
Average
Investment
in Impaired
Loans
|
Interest
Income
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Manufactured housing
|
$
|
7,660
|
$
|
131
|
$
|
8,577
|
$
|
166
|
||||||||
Commercial real estate:
|
||||||||||||||||
Commercial real estate
|
84
|
—
|
119
|
—
|
||||||||||||
SBA 504 1st trust deed
|
232
|
4
|
226
|
4
|
||||||||||||
Land
|
—
|
—
|
—
|
—
|
||||||||||||
Construction
|
—
|
—
|
—
|
—
|
||||||||||||
Commercial
|
1,693
|
2
|
5,672
|
43
|
||||||||||||
SBA
|
340
|
—
|
924
|
—
|
||||||||||||
HELOC
|
—
|
—
|
208
|
5
|
||||||||||||
Single family real estate
|
2,262
|
29
|
2,318
|
34
|
||||||||||||
Consumer
|
—
|
—
|
—
|
—
|
||||||||||||
Total
|
$
|
12,271
|
$
|
166
|
$
|
18,044
|
$
|
252
|
Six Months Ended June 30,
|
||||||||||||||||
2020
|
2019
|
|||||||||||||||
Average
Investment
in Impaired
Loans
|
Interest
Income
|
Average
Investment
in Impaired
Loans
|
Interest
Income
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Manufactured housing
|
$
|
7,790
|
$
|
266
|
$
|
9,660
|
$
|
319
|
||||||||
Commercial real estate:
|
||||||||||||||||
Commercial real estate
|
84
|
—
|
113
|
—
|
||||||||||||
SBA 504 1st trust deed
|
233
|
9
|
231
|
9
|
||||||||||||
Land
|
—
|
—
|
—
|
—
|
||||||||||||
Construction
|
—
|
—
|
—
|
—
|
||||||||||||
Commercial
|
1,733
|
4
|
6,350
|
79
|
||||||||||||
SBA
|
355
|
—
|
889
|
—
|
||||||||||||
HELOC
|
—
|
—
|
205
|
11
|
||||||||||||
Single family real estate
|
2,289
|
60
|
2,450
|
65
|
||||||||||||
Consumer
|
—
|
—
|
—
|
—
|
||||||||||||
Total
|
$
|
12,484
|
$
|
339
|
$
|
19,898
|
$
|
483
|
June 30,
2020
|
December 31,
2019
|
|||||||
(in thousands)
|
||||||||
Nonaccrual loans
|
$
|
2,886
|
$
|
2,679
|
||||
Government guaranteed portion of loans included above
|
$
|
246
|
$
|
290
|
||||
Troubled debt restructured loans, gross
|
$
|
10,186
|
$
|
10,774
|
||||
Loans 30 through 89 days past due with interest accruing
|
$
|
740
|
$
|
1,947
|
||||
Loans 90 days or more past due with interest accruing
|
$
|
—
|
$
|
—
|
||||
Allowance for loan losses to gross loans held for investment
|
1.22
|
%
|
1.19
|
%
|
June 30,
2020
|
December 31,
2019
|
|||||||
(in thousands)
|
||||||||
Manufactured housing
|
$
|
933
|
$
|
594
|
||||
Commercial real estate:
|
||||||||
Commercial real estate
|
84
|
84
|
||||||
SBA 504 1st trust deed
|
—
|
—
|
||||||
Land
|
—
|
—
|
||||||
Construction
|
—
|
—
|
||||||
Commercial
|
1,545
|
1,619
|
||||||
SBA
|
324
|
382
|
||||||
HELOC
|
—
|
—
|
||||||
Single family real estate
|
—
|
—
|
||||||
Consumer
|
—
|
—
|
||||||
Total
|
$
|
2,886
|
$
|
2,679
|
June 30, 2020
|
||||||||||||||||||||
Pass
|
Special Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Manufactured housing
|
$
|
266,116
|
$
|
—
|
$
|
1,227
|
$
|
—
|
$
|
267,343
|
||||||||||
Commercial real estate:
|
||||||||||||||||||||
Commercial real estate
|
325,549
|
3,832
|
8,378
|
—
|
337,759
|
|||||||||||||||
SBA 504 1st trust deed
|
18,907
|
—
|
628
|
—
|
19,535
|
|||||||||||||||
Land
|
5,009
|
—
|
—
|
—
|
5,009
|
|||||||||||||||
Construction
|
27,061
|
—
|
2,084
|
—
|
29,145
|
|||||||||||||||
Commercial
|
56,948
|
—
|
3,591
|
—
|
60,539
|
|||||||||||||||
SBA
|
2,830
|
—
|
282
|
—
|
3,112
|
|||||||||||||||
HELOC
|
3,918
|
—
|
—
|
—
|
3,918
|
|||||||||||||||
Single family real estate
|
11,229
|
—
|
5
|
—
|
11,234
|
|||||||||||||||
Consumer
|
45
|
—
|
—
|
—
|
45
|
|||||||||||||||
Total, net
|
717,612
|
3,832
|
16,195
|
—
|
737,639
|
|||||||||||||||
Government guarantee
|
81,281
|
—
|
4,648
|
—
|
85,929
|
|||||||||||||||
Total
|
$
|
798,893
|
$
|
3,832
|
$
|
20,843
|
$
|
—
|
$
|
823,568
|
December 31, 2019
|
||||||||||||||||||||
Pass
|
Special Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Manufactured housing
|
$
|
256,430
|
$
|
—
|
$
|
817
|
$
|
—
|
$
|
257,247
|
||||||||||
Commercial real estate:
|
||||||||||||||||||||
Commercial real estate
|
322,389
|
3,507
|
84
|
—
|
325,980
|
|||||||||||||||
SBA 504 1st trust deed
|
18,250
|
—
|
302
|
—
|
18,552
|
|||||||||||||||
Land
|
4,457
|
—
|
—
|
—
|
4,457
|
|||||||||||||||
Construction
|
33,280
|
—
|
2,014
|
—
|
35,294
|
|||||||||||||||
Commercial
|
61,387
|
170
|
1,619
|
—
|
63,176
|
|||||||||||||||
SBA
|
2,325
|
28
|
1,154
|
3,507
|
||||||||||||||||
HELOC
|
4,531
|
—
|
—
|
—
|
4,531
|
|||||||||||||||
Single family real estate
|
11,840
|
—
|
5
|
—
|
11,845
|
|||||||||||||||
Consumer
|
94
|
—
|
—
|
—
|
94
|
|||||||||||||||
Total, net
|
714,983
|
3,705
|
5,995
|
$
|
—
|
724,683
|
||||||||||||||
Government guarantee
|
6,551
|
1,530
|
867
|
—
|
8,948
|
|||||||||||||||
Total
|
$
|
721,534
|
$
|
5,235
|
$
|
6,862
|
$
|
—
|
$
|
733,631
|
|
For the Six Months Ended June 30, 2020
|
|||||||||||||||||||||||
Number
of Loans
|
Pre-
Modification
Recorded
Investment
|
Post
Modification
Recorded
Investment
|
Balance of
Loans with
Rate
Reduction
|
Balance of
Loans with
Term
Extension
|
Effect on
Allowance
for
Loan Losses
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
Manufactured housing
|
1
|
$
|
56
|
$
|
56
|
$
|
56
|
$
|
56
|
$
|
1
|
|||||||||||||
Total
|
1
|
$
|
56
|
$
|
56
|
$
|
56
|
$
|
56
|
$
|
1
|
|
For the Six Months Ended June 30, 2019
|
|||||||||||||||||||||||
Number
of Loans
|
Pre-
Modification
Recorded
Investment
|
Post
Modification
Recorded
Investment
|
Balance of
Loans with
Rate
Reduction
|
Balance of
Loans with
Term
Extension
|
Effect on
Allowance
for
Loan Losses
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
SBA
|
1
|
$
|
48
|
$
|
48
|
$
|
48
|
$
|
—
|
—
|
||||||||||||||
Total
|
1
|
$
|
48
|
$
|
48
|
$
|
48
|
$
|
—
|
$
|
—
|
5. |
OTHER ASSETS ACQUIRED THROUGH FORECLOSURE
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Balance, beginning of period
|
$
|
2,707
|
$
|
—
|
$
|
2,524
|
$
|
—
|
||||||||
Additions
|
—
|
1,074
|
106
|
1,074
|
||||||||||||
Proceeds from dispositions
|
—
|
—
|
—
|
—
|
||||||||||||
(Loss) gain on sales, net
|
—
|
—
|
77
|
—
|
||||||||||||
Third-party portion of writedown/loss
|
—
|
—
|
—
|
—
|
||||||||||||
Balance, end of period
|
$
|
2,707
|
$
|
1,074
|
$
|
2,707
|
$
|
1,074
|
6. |
FAIR VALUE MEASUREMENT
|
|
• |
Level 1— Observable quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
|
|
• |
Level 2— Observable quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, matrix pricing or model-based valuation techniques
where all significant assumptions are observable, either directly or indirectly in the market.
|
|
• |
Level 3— Model-based techniques where all significant assumptions are not observable, either directly or indirectly, in the market. These unobservable assumptions reflect management’s estimates of assumptions
that market participants would use in pricing the asset or liability. Valuation techniques may include use of discounted cash flow models and similar techniques.
|
Fair Value Measurements at the End of the
Reporting Period Using:
|
||||||||||||||||
June 30, 2020
|
Quoted Prices in
Active
Markets for
Identical Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Fair
Value
|
||||||||||||
Assets:
|
(in thousands)
|
|||||||||||||||
Investment securities measured at fair value
|
$
|
128
|
$
|
—
|
$
|
—
|
$
|
128
|
||||||||
Investment securities available-for-sale
|
—
|
18,423
|
—
|
18,423
|
||||||||||||
Interest only strips
|
—
|
—
|
32
|
32
|
||||||||||||
Servicing assets
|
—
|
—
|
971
|
971
|
||||||||||||
Total
|
$
|
128
|
$
|
18,423
|
$
|
1,003
|
$
|
19,554
|
Fair Value Measurements at the End of the
Reporting Period Using:
|
||||||||||||||||
December 31, 2019
|
Quoted Prices in
Active
Markets for
Identical Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Fair
Value
|
||||||||||||
Assets:
|
(in thousands)
|
|||||||||||||||
Investment securities measured at fair value
|
$
|
167
|
$
|
—
|
$
|
—
|
$
|
167
|
||||||||
Investment securities available-for-sale
|
—
|
19,264
|
—
|
19,264
|
||||||||||||
Interest only strips
|
—
|
—
|
41
|
41
|
||||||||||||
Servicing assets
|
—
|
—
|
846
|
846
|
||||||||||||
Total
|
$
|
167
|
$
|
19,264
|
$
|
887
|
$
|
20,318
|
Fair Value Measurements at the End of the
Reporting Period Using:
|
||||||||||||||||
Total
|
Quoted Prices in
Active
Markets for
Identical Assets
(Level 1)
|
Active Markets
for Similar
Assets
(Level 2)
|
Unobservable
Inputs
(Level 3)
|
|||||||||||||
(in thousands)
|
||||||||||||||||
June 30, 2020:
|
||||||||||||||||
Impaired loans
|
$
|
2,512
|
$
|
—
|
$
|
2,512
|
$
|
—
|
||||||||
Loans held for sale
|
38,071
|
—
|
38,071
|
—
|
||||||||||||
Foreclosed real estate and repossessed assets
|
2,707
|
—
|
2,707
|
—
|
||||||||||||
Total
|
$
|
43,290
|
$
|
—
|
$
|
43,290
|
$
|
—
|
Fair Value Measurements at the End of the
Reporting Period Using:
|
||||||||||||||||
Total
|
Quoted Prices in
Active
Markets for
Identical Assets
(Level 1)
|
Active Markets
for Similar
Assets
(Level 2)
|
Unobservable Inputs
(Level 3)
|
|||||||||||||
(in thousands)
|
||||||||||||||||
December 31, 2019:
|
||||||||||||||||
Impaired loans
|
$
|
2,334
|
$
|
—
|
$
|
2,334
|
$
|
—
|
||||||||
Loans held for sale
|
42,900
|
—
|
42,900
|
—
|
||||||||||||
Foreclosed real estate and repossessed assets
|
2,524
|
—
|
2,524
|
—
|
||||||||||||
Total
|
$
|
47,758
|
$
|
—
|
$
|
47,758
|
$
|
—
|
June 30, 2020
|
||||||||||||||||||||
Carrying
|
Fair Value
|
|||||||||||||||||||
Amount
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
Financial assets:
|
(in thousands)
|
|||||||||||||||||||
Cash and cash equivalents
|
$
|
147,502
|
$
|
147,502
|
$
|
—
|
$
|
—
|
$
|
147,502
|
||||||||||
FRB and FHLB stock
|
5,018
|
—
|
5,018
|
—
|
5,018
|
|||||||||||||||
Investment securities
|
24,221
|
128
|
24,388
|
—
|
24,516
|
|||||||||||||||
Loans, net
|
846,021
|
—
|
853,477
|
8,978
|
862,455
|
|||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
750,158
|
—
|
750,257
|
—
|
750,257
|
|||||||||||||||
Other borrowings
|
210,103
|
—
|
211,219
|
—
|
211,219
|
December 31, 2019
|
||||||||||||||||||||
Carrying
|
Fair Value
|
|||||||||||||||||||
Amount
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
Financial assets:
|
(in thousands)
|
|||||||||||||||||||
Cash and cash equivalents
|
$
|
82,661
|
$
|
82,661
|
$
|
—
|
$
|
—
|
$
|
82,661
|
||||||||||
FRB and FHLB stock
|
4,087
|
—
|
4,087
|
—
|
4,087
|
|||||||||||||||
Investment securities
|
25,563
|
167
|
25,399
|
—
|
25,566
|
|||||||||||||||
Loans, net
|
766,846
|
—
|
752,287
|
9,907
|
762,194
|
|||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
750,934
|
—
|
751,398
|
—
|
751,398
|
|||||||||||||||
Other borrowings
|
65,000
|
—
|
65,236
|
—
|
65,236
|
7. |
OTHER BORROWINGS
|
8. |
STOCKHOLDERS’ EQUITY
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Unrealized holding
gains (losses) on AFS
|
Unrealized holding
gains (losses) on AFS
|
|||||||||||||||
(in thousands)
|
||||||||||||||||
Beginning balance
|
$
|
(112
|
)
|
$
|
(134
|
)
|
$
|
(78
|
)
|
$
|
(141
|
)
|
||||
Other comprehensive income before reclassifications
|
59
|
63
|
25
|
70
|
||||||||||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
—
|
—
|
—
|
||||||||||||
Net current-period other comprehensive income
|
59
|
63
|
25
|
70
|
||||||||||||
Ending Balance
|
$
|
(53
|
)
|
$
|
(71
|
)
|
$
|
(53
|
)
|
$
|
(71
|
)
|
9. |
CAPITAL REQUIREMENT
|
Total
Capital
(To Risk-
Weighted
Assets)
|
Tier 1
Capital
(To Risk-
Weighted
Assets)
|
Common
Equity
Tier 1
(To Risk-
Weighted
Assets)
|
Leverage
Ratio/Tier
1 Capital
(To
Average
Assets)
|
Community
Banking
Leverage
Ratio
|
||||||||||||||||
June 30, 2020
|
||||||||||||||||||||
CWB’s actual regulatory ratios
|
11.63
|
%
|
10.38
|
%
|
10.38
|
%
|
8.94
|
%
|
8.94
|
%
|
||||||||||
Minimum capital requirements
|
8.00
|
%
|
6.00
|
%
|
4.50
|
%
|
4.00
|
%
|
8.00
|
%
|
||||||||||
Well-capitalized requirements
|
10.00
|
%
|
8.00
|
%
|
6.50
|
%
|
N/A
|
9.00
|
%
|
|||||||||||
Minimum capital requirements including fully-phased in capital conservation buffer
|
10.50
|
%
|
8.50
|
%
|
7.00
|
%
|
N/A
|
N/A
|
Total Capital
(To Risk-
Weighted
Assets)
|
Tier 1
Capital
(To Risk-
Weighted
Assets)
|
Common
Equity
Tier 1
(To Risk-
Weighted
Assets)
|
Leverage
Ratio/Tier
1 Capital
(To
Average
Assets)
|
|||||||||||||
December 31, 2019
|
||||||||||||||||
CWB’s actual regulatory ratios
|
11.41
|
%
|
10.28
|
%
|
10.28
|
%
|
9.06
|
%
|
||||||||
Minimum capital requirements
|
8.00
|
%
|
6.00
|
%
|
4.50
|
%
|
4.00
|
%
|
||||||||
Well-capitalized requirements
|
10.00
|
%
|
8.00
|
%
|
6.50
|
%
|
N/A
|
|||||||||
Minimum capital requirements including fully-phased in capital conservation buffer
|
10.50
|
%
|
8.50
|
%
|
7.00
|
%
|
N/A
|
10.
|
REVENUE RECOGNITION
|
Non-interest income
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
In-scope of Topic 606:
|
(in thousands)
|
|||||||||||||||
Service charges on deposit accounts
|
$
|
51
|
$
|
121
|
$
|
171
|
$
|
246
|
||||||||
Exchange fees and other service charges
|
31
|
44
|
71
|
78
|
||||||||||||
Non-interest income (in-scope of Topic 606)
|
82
|
164
|
241
|
324
|
||||||||||||
Non-interest income (out-of-scope of Topic 606)
|
558
|
528
|
1,349
|
972
|
||||||||||||
Total
|
$
|
640
|
$
|
692
|
$
|
1,590
|
$
|
1,296
|
11.
|
LEASES
|
Six Months Ended June 30,
|
||||||||
2020
|
2019
|
|||||||
Lease cost:
|
(in thousands)
|
|||||||
Operating lease cost
|
277
|
583
|
||||||
Sublease income
|
—
|
—
|
||||||
Total lease cost
|
277
|
583
|
||||||
Other information
|
||||||||
Cash paid for amounts included in the measurement of lease liabilities
|
—
|
—
|
||||||
Operating cash flows from operating leases
|
274
|
572
|
||||||
Weighted average remaining lease term - operating leases
|
9.42 years
|
9.88 years
|
||||||
Weighted average discount rate - operating leases
|
3.25
|
%
|
3.22
|
%
|
June 30,
|
||||||||
2020
|
2019
|
|||||||
(in thousands)
|
||||||||
2019
|
$
|
—
|
$
|
545
|
||||
2020
|
467
|
1,015
|
||||||
2021
|
884
|
884
|
||||||
2022
|
779
|
779
|
||||||
2023
|
705
|
705
|
||||||
2024
|
713
|
813
|
||||||
Thereafter
|
3,291
|
3,191
|
||||||
Total future minimum lease payments
|
$
|
6,839
|
$
|
7,932
|
||||
Less remaining imputed interest
|
974
|
1,175
|
||||||
Total lease liabilities
|
$
|
5,865
|
$
|
6,757
|
12.
|
RISKS AND UNCERTAINTIES
|
ITEM 2. |
|
• |
general economic conditions, either nationally or locally in some or all areas in which business is conducted, or conditions in the real estate or securities markets or the banking industry which could affect
liquidity in the capital markets, the volume of loan origination, deposit flows, real estate values, the levels of non-interest income and the amount of loan losses;
|
|
• |
changes in existing loan portfolio composition and credit quality, and changes in loan loss requirements;
|
|
• |
legislative or regulatory changes which may adversely affect the Company’s business;
|
|
• |
the water shortage in certain areas of California and its impact on the economy;
|
|
• |
the Company’s success in implementing its new business initiatives, including expanding its product line, adding new branches and successfully building its brand image;
|
|
• |
changes in interest rates which may reduce or increase net interest margin and net interest income;
|
|
• |
increases in competitive pressure among financial institutions or non-financial institutions;
|
|
• |
technological changes which may be more difficult to implement or more expensive than anticipated;
|
|
• |
changes in borrowing facilities, capital markets and investment opportunities which may adversely affect the business;
|
|
• |
changes in accounting principles, policies or guidelines which may cause conditions to be perceived differently;
|
|
• |
litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, which may delay the occurrence or non-occurrence of events longer than anticipated;
|
|
• |
the ability to originate loans with attractive terms and acceptable credit quality;
|
|
• |
the ability to attract and retain key members of management;
|
|
• |
the ability to realize cost efficiencies;
|
|
• |
a failure or breach of our operational or security systems or infrastructure;
|
|
• |
a return of recessionary conditions could result in increases in our level of non-performing loans and/or reduce demand for our products and services; and
|
|
• |
risks related to health epidemics.
|
|
• |
Net income was $1.2 million, or $0.14 per diluted share, in 2Q20, compared to $1.6 million, or $0.19 per diluted share in 1Q20, and $1.6 million, or $0.18 per diluted share in 2Q19.
|
|
• |
Net interest income was $8.8 million for the quarter, compared to $8.5 million for 1Q20, and $8.5 million for 2Q19.
|
|
• |
Provision for loan losses was $762,000 for the quarter, compared to $392,000 for 1Q20, and $177,000 for 2Q19.
|
|
• |
Net interest margin was 3.72% for 2Q20, compared to 3.97% for 1Q20, and 4.07% for 2Q19.
|
|
• |
Total demand deposits increased $96.0 million to $504.0 million at June 30, 2020, compared to $408.0 million at March 31, 2020, and increased $47.7 million compared to $456.3 million at June 30, 2019. Total demand deposits represented
67.2% of total deposits at June 30, 2020.
|
|
• |
Non-interest-bearing demand deposits increased $71.5 million to $192.8 million at June 30, 2020 compared to $121.3 million at March 31, 2020, and increased $80.3 million compared to $112.5 million at June 30, 2019.
|
|
• |
Total loans increased $74.0 million during the quarter to $856.0 million at June 30, 2020, compared to $782.0 million at March 31, 2020, and increased $67.1 million from $788.9 million at June 30, 2019.
|
|
• |
Book value per common share increased to $9.93 at June 30, 2020, compared to $9.82 at March 31, 2020, and $9.19 at June 30, 2019.
|
|
• |
Total risked-based capital improved to 11.63% for the Bank at June 30, 2020, compared to 11.60% at March 31, 2020 and 10.67% at June 30, 2019.
|
|
• |
Net non-accrual loans of $2.6 million at June 30, 2020 and at March 31, 2020, compared to $3.0 million at June 30, 2019.
|
|
• |
Other assets acquired through foreclosure, net was $2.7 million at June 30, 2020 and at March 31, 2020, compared to $1.1 million at June 30, 2019.
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands, except per share amounts)
|
||||||||||||||||
Net income
|
$
|
1,160
|
$
|
1,580
|
$
|
2,758
|
$
|
3,090
|
||||||||
Basic earnings per share
|
$
|
0.14
|
$
|
0.19
|
$
|
0.33
|
$
|
0.37
|
||||||||
Diluted earnings per share
|
$
|
0.14
|
$
|
0.18
|
$
|
0.32
|
$
|
0.36
|
||||||||
Total assets
|
$
|
1,060,847
|
$
|
905,567
|
$
|
1,060,847
|
$
|
905,567
|
||||||||
Total loans
|
$
|
846,021
|
$
|
780,021
|
$
|
846,021
|
$
|
780,021
|
||||||||
Total deposits
|
$
|
750,158
|
$
|
765,111
|
$
|
750,158
|
$
|
765,111
|
||||||||
Total stockholders’ equity
|
$
|
84,093
|
$
|
77,829
|
$
|
84,093
|
$
|
77,829
|
||||||||
Book value per common share
|
$
|
9.93
|
$
|
9.19
|
$
|
9.93
|
$
|
9.19
|
||||||||
Net interest margin
|
3.72
|
%
|
4.07
|
%
|
3.84
|
%
|
4.03
|
%
|
||||||||
Return on average assets
|
0.48
|
%
|
0.73
|
%
|
0.59
|
%
|
0.72
|
%
|
||||||||
Return on average stockholders’ equity
|
5.57
|
%
|
8.18
|
%
|
6.66
|
%
|
8.09
|
%
|
Three Months Ended
June 30,
|
Increase
|
Six Months Ended June
30,
|
Increase
|
|||||||||||||||||||||
2020
|
2019
|
(Decrease)
|
2020
|
2019
|
(Decrease)
|
|||||||||||||||||||
(in thousands, except per share amounts)
|
||||||||||||||||||||||||
Consolidated Income Statement Data:
|
||||||||||||||||||||||||
Interest income
|
$
|
10,777
|
$
|
11,367
|
$
|
(590
|
)
|
$
|
21,752
|
$
|
22,392
|
$
|
(640
|
)
|
||||||||||
Interest expense
|
1,996
|
2,869
|
(873
|
)
|
4,508
|
5,671
|
(1,163
|
)
|
||||||||||||||||
Net interest income
|
8,781
|
8,498
|
283
|
17,244
|
16,721
|
523
|
||||||||||||||||||
Credit (provision) for loan losses
|
762
|
177
|
585
|
1,154
|
120
|
1,034
|
||||||||||||||||||
Net interest income after provision for loan losses
|
8,019
|
8,321
|
(302
|
)
|
16,090
|
16,601
|
(511
|
)
|
||||||||||||||||
Non-interest income
|
640
|
692
|
(52
|
)
|
1,590
|
1,296
|
294
|
|||||||||||||||||
Non-interest expenses
|
7,003
|
6,760
|
243
|
13,732
|
13,477
|
255
|
||||||||||||||||||
Income before income taxes
|
1,656
|
2,253
|
(597
|
)
|
3,948
|
4,420
|
(472
|
)
|
||||||||||||||||
Provision for income taxes
|
496
|
673
|
(177
|
)
|
1,190
|
1,330
|
(140
|
)
|
||||||||||||||||
Net income
|
$
|
1,160
|
$
|
1,580
|
$
|
(420
|
)
|
$
|
2,758
|
$
|
3,090
|
$
|
(332
|
)
|
||||||||||
Income per share - basic
|
$
|
0.14
|
$
|
0.19
|
$
|
(0.05
|
)
|
$
|
0.33
|
$
|
0.37
|
$
|
(0.04
|
)
|
||||||||||
Income per share - diluted
|
$
|
0.14
|
$
|
0.18
|
$
|
(0.05
|
)
|
$
|
0.32
|
$
|
0.36
|
$
|
(0.04
|
)
|
Three Months Ended June 30,
|
||||||||||||||||||||||||
2020
|
2019
|
|||||||||||||||||||||||
Average
Balance
|
Interest
|
Average
Yield/Cost
(2)
|
Average
Balance
|
Interest
|
Average
Yield/Cost
(2)
|
|||||||||||||||||||
Interest-Earning Assets
|
(in thousands)
|
|||||||||||||||||||||||
Federal funds sold and interest-earning deposits
|
$
|
81,116
|
$
|
59
|
0.29
|
%
|
$
|
25,025
|
$
|
118
|
1.89
|
%
|
||||||||||||
Investment securities
|
28,408
|
133
|
1.88
|
%
|
35,251
|
342
|
3.89
|
%
|
||||||||||||||||
Loans (1)
|
839,625
|
10,585
|
5.07
|
%
|
777,828
|
10,907
|
5.62
|
%
|
||||||||||||||||
Total earnings assets
|
949,149
|
10,777
|
4.57
|
%
|
838,104
|
11,367
|
5.44
|
%
|
||||||||||||||||
Nonearning Assets
|
||||||||||||||||||||||||
Cash and due from banks
|
2,283
|
2,060
|
||||||||||||||||||||||
Allowance for loan losses
|
(9,239
|
)
|
(8,732
|
)
|
||||||||||||||||||||
Other assets
|
36,057
|
33,151
|
||||||||||||||||||||||
Total assets
|
$
|
978,250
|
$
|
864,583
|
||||||||||||||||||||
Interest-Bearing Liabilities
|
||||||||||||||||||||||||
Interest-bearing demand deposits
|
$
|
291,328
|
$
|
496
|
0.68
|
%
|
$
|
294,903
|
$
|
933
|
1.27
|
%
|
||||||||||||
Savings deposits
|
17,028
|
27
|
0.64
|
%
|
15,820
|
32
|
0.81
|
%
|
||||||||||||||||
Time deposits
|
261,287
|
977
|
1.50
|
%
|
299,737
|
1,618
|
2.17
|
%
|
||||||||||||||||
Total interest-bearing deposits
|
569,643
|
1,500
|
1.06
|
%
|
610,460
|
2,583
|
1.70
|
%
|
||||||||||||||||
Other borrowings
|
133,342
|
496
|
1.50
|
%
|
43,420
|
286
|
2.64
|
%
|
||||||||||||||||
Total interest-bearing liabilities
|
702,985
|
1,996
|
1.14
|
%
|
653,880
|
2,869
|
1.76
|
%
|
||||||||||||||||
Noninterest-Bearing Liabilities
|
||||||||||||||||||||||||
Noninterest-bearing demand deposits
|
176,001
|
115,906
|
||||||||||||||||||||||
Other liabilities
|
15,507
|
17,365
|
||||||||||||||||||||||
Stockholders’ equity
|
83,757
|
77,432
|
||||||||||||||||||||||
Total Liabilities and Stockholders’ Equity
|
$
|
978,250
|
$
|
864,583
|
||||||||||||||||||||
Net interest income and margin (3)
|
$
|
8,781
|
3.72
|
%
|
$
|
8,498
|
4.07
|
%
|
||||||||||||||||
Net interest spread (4)
|
3.43
|
%
|
3.68
|
%
|
(1) |
Includes nonaccrual loans.
|
(2) |
Annualized.
|
(3) |
Net interest margin is computed by dividing net interest income by total average earning assets.
|
(4) |
Net interest spread represents average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities.
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
2020
|
2019
|
|||||||||||||||||||||||
Average
Balance
|
Interest
|
Average
Yield/Cost
(2)
|
Average
Balance
|
Interest
|
Average
Yield/Cost
(2)
|
|||||||||||||||||||
Interest-Earning Assets
|
(in thousands)
|
|||||||||||||||||||||||
Federal funds sold and interest-earning deposits
|
$
|
61,348
|
$
|
185
|
0.61
|
%
|
$
|
27,750
|
$
|
285
|
2.07
|
%
|
||||||||||||
Investment securities
|
28,732
|
318
|
2.23
|
%
|
35,716
|
659
|
3.72
|
%
|
||||||||||||||||
Loans (1)
|
813,581
|
21,249
|
5.25
|
%
|
773,067
|
21,448
|
5.59
|
%
|
||||||||||||||||
Total earnings assets
|
903,661
|
21,752
|
4.84
|
%
|
836,533
|
22,392
|
5.40
|
%
|
||||||||||||||||
Nonearning Assets
|
||||||||||||||||||||||||
Cash and due from banks
|
2,613
|
2,613
|
||||||||||||||||||||||
Allowance for loan losses
|
(9,059
|
)
|
(8,736
|
)
|
||||||||||||||||||||
Other assets
|
35,119
|
31,736
|
||||||||||||||||||||||
Total assets
|
$
|
932,334
|
$
|
862,146
|
||||||||||||||||||||
Interest-Bearing Liabilities
|
||||||||||||||||||||||||
Interest-bearing demand deposits
|
$
|
287,269
|
$
|
1,215
|
0.85
|
%
|
$
|
289,541
|
$
|
1,764
|
1.23
|
%
|
||||||||||||
Savings deposits
|
16,367
|
57
|
0.70
|
%
|
15,521
|
63
|
0.82
|
%
|
||||||||||||||||
Time deposits
|
281,343
|
2,350
|
1.68
|
%
|
301,878
|
3,200
|
2.14
|
%
|
||||||||||||||||
Total interest-bearing deposits
|
584,979
|
3,622
|
1.25
|
%
|
606,940
|
5,027
|
1.67
|
%
|
||||||||||||||||
Other borrowings
|
100,956
|
886
|
1.76
|
%
|
46,663
|
644
|
2.78
|
%
|
||||||||||||||||
Total interest-bearing liabilities
|
685,935
|
4,508
|
1.32
|
%
|
653,603
|
5,671
|
1.75
|
%
|
||||||||||||||||
Noninterest-Bearing Liabilities
|
||||||||||||||||||||||||
Noninterest-bearing demand deposits
|
146,946
|
114,745
|
||||||||||||||||||||||
Other liabilities
|
16,167
|
16,739
|
||||||||||||||||||||||
Stockholders’ equity
|
83,286
|
77,059
|
||||||||||||||||||||||
Total Liabilities and Stockholders’ Equity
|
$
|
932,334
|
$
|
862,146
|
||||||||||||||||||||
Net interest income and margin (3)
|
$
|
17,244
|
3.84
|
%
|
$
|
16,721
|
4.03
|
%
|
||||||||||||||||
Net interest spread (4)
|
3.52
|
%
|
3.65
|
%
|
(1) |
Includes nonaccrual loans.
|
(2) |
Annualized.
|
(3) |
Net interest margin is computed by dividing net interest income by total average earning assets.
|
(4) |
Net interest spread represents average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities.
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||||||||||
2020 versus 2019
|
2020 versus 2019
|
|||||||||||||||||||||||
Increase (Decrease)
Due to Changes in (1)
|
Increase (Decrease)
Due to Changes in (1)
|
|||||||||||||||||||||||
Volume
|
Rate
|
Total
|
Volume
|
Rate
|
Total
|
|||||||||||||||||||
(in thousands)
|
(in thousands)
|
|||||||||||||||||||||||
Interest income:
|
||||||||||||||||||||||||
Federal funds sold and interest-earning deposits
|
$
|
41
|
$
|
(100
|
)
|
$
|
(59
|
)
|
$
|
102
|
$
|
(202
|
)
|
$
|
(100
|
)
|
||||||||
Investment securities
|
(32
|
)
|
(177
|
)
|
(209
|
)
|
(78
|
)
|
(263
|
)
|
(341
|
)
|
||||||||||||
Loans, net
|
781
|
(1,103
|
)
|
(322
|
)
|
1,061
|
(1,260
|
)
|
(199
|
)
|
||||||||||||||
Total interest income
|
790
|
(1,380
|
)
|
(590
|
)
|
1,085
|
(1,725
|
)
|
(640
|
)
|
||||||||||||||
Interest expense:
|
||||||||||||||||||||||||
Interest-bearing demand deposits
|
(6
|
)
|
(431
|
)
|
(437
|
)
|
(10
|
)
|
(539
|
)
|
(549
|
)
|
||||||||||||
Savings deposits
|
2
|
(7
|
)
|
(5
|
)
|
3
|
(9
|
)
|
(6
|
)
|
||||||||||||||
Time deposits
|
(144
|
)
|
(497
|
)
|
(641
|
)
|
(172
|
)
|
(678
|
)
|
(850
|
)
|
||||||||||||
Short-term borrowings
|
336
|
(126
|
)
|
210
|
476
|
(234
|
)
|
242
|
||||||||||||||||
Total interest expense
|
188
|
(1,061
|
)
|
(873
|
)
|
297
|
(1,460
|
)
|
(1,163
|
)
|
||||||||||||||
Net increase
|
$
|
602
|
$
|
(319
|
)
|
$
|
283
|
$
|
788
|
$
|
(265
|
)
|
$
|
523
|
|
(1) |
Changes due to both volume and rate have been allocated to volume changes.
|
For the Three Months Ended June 30,
|
||||||||||||||||||||||||||||||||
Manufactured
Housing
|
Commercial
Real Estate
|
Commercial
|
SBA
|
HELOC
|
Single Family
Real Estate
|
Consumer
|
Total
|
|||||||||||||||||||||||||
2020
|
(in thousands)
|
|||||||||||||||||||||||||||||||
Beginning balance
|
$
|
2,364
|
$
|
5,484
|
$
|
1,164
|
$
|
29
|
$
|
27
|
$
|
96
|
$
|
3
|
$
|
9,167
|
||||||||||||||||
Charge-offs
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Recoveries
|
7
|
20
|
47
|
3
|
2
|
—
|
—
|
79
|
||||||||||||||||||||||||
Net recoveries
|
7
|
20
|
47
|
3
|
2
|
—
|
—
|
79
|
||||||||||||||||||||||||
Provision (credit)
|
99
|
255
|
292
|
96
|
(3
|
)
|
24
|
(1
|
)
|
762
|
||||||||||||||||||||||
Ending balance
|
$
|
2,470
|
$
|
5,759
|
$
|
1,503
|
$
|
128
|
$
|
26
|
$
|
120
|
$
|
2
|
$
|
10,008
|
||||||||||||||||
2019
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$
|
2,188
|
$
|
5,058
|
$
|
1,219
|
$
|
44
|
$
|
48
|
$
|
91
|
$
|
—
|
$
|
8,648
|
||||||||||||||||
Charge-offs
|
—
|
—
|
(14
|
)
|
—
|
—
|
—
|
—
|
(14
|
)
|
||||||||||||||||||||||
Recoveries
|
37
|
12
|
20
|
6
|
1
|
—
|
—
|
76
|
||||||||||||||||||||||||
Net recoveries
|
37
|
12
|
6
|
6
|
1
|
—
|
—
|
62
|
||||||||||||||||||||||||
Provision (credit)
|
(26
|
)
|
288
|
(75
|
)
|
(10
|
)
|
—
|
—
|
—
|
177
|
|||||||||||||||||||||
Ending balance
|
$
|
2,199
|
$
|
5,358
|
$
|
1,150
|
$
|
40
|
$
|
49
|
$
|
91
|
$
|
—
|
$
|
8,887
|
For the Six Months Ended June 30,
|
||||||||||||||||||||||||||||||||
Manufactured
Housing
|
Commercial
Real Estate
|
Commercial
|
SBA
|
HELOC
|
Single Family
Real Estate
|
Consumer
|
Total
|
|||||||||||||||||||||||||
2020
|
(in thousands)
|
|||||||||||||||||||||||||||||||
Beginning balance
|
$
|
2,184
|
$
|
5,217
|
$
|
1,162
|
$
|
32
|
$
|
27
|
$
|
92
|
$
|
3
|
$
|
8,717
|
||||||||||||||||
Charge-offs
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Recoveries
|
13
|
40
|
74
|
6
|
3
|
1
|
—
|
137
|
||||||||||||||||||||||||
Net recoveries
|
13
|
40
|
74
|
6
|
3
|
1
|
—
|
137
|
||||||||||||||||||||||||
Provision (credit)
|
273
|
502
|
267
|
90
|
(4
|
)
|
27
|
(1
|
)
|
1,154
|
||||||||||||||||||||||
Ending balance
|
$
|
2,470
|
$
|
5,759
|
$
|
1,503
|
$
|
128
|
$
|
26
|
$
|
120
|
$
|
2
|
$
|
10,008
|
||||||||||||||||
2019
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$
|
2,196
|
$
|
5,028
|
$
|
1,210
|
$
|
79
|
$
|
90
|
$
|
88
|
$
|
—
|
$
|
8,691
|
||||||||||||||||
Charge-offs
|
—
|
—
|
(31
|
)
|
—
|
—
|
—
|
—
|
(31
|
)
|
||||||||||||||||||||||
Recoveries
|
43
|
12
|
39
|
11
|
2
|
—
|
—
|
107
|
||||||||||||||||||||||||
Net recoveries
|
43
|
12
|
8
|
11
|
2
|
—
|
—
|
76
|
||||||||||||||||||||||||
Provision (credit)
|
(40
|
)
|
318
|
(68
|
)
|
(50
|
)
|
(43
|
)
|
3
|
—
|
120
|
||||||||||||||||||||
Ending balance
|
$
|
2,199
|
$
|
5,358
|
$
|
1,150
|
$
|
40
|
$
|
49
|
$
|
91
|
$
|
—
|
$
|
8,887
|
Three Months Ended
June 30,
|
Increase
|
Six Months Ended June
30,
|
Increase
|
|||||||||||||||||||||
2020
|
2019
|
(Decrease)
|
2020
|
2019
|
(Decrease)
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Other loan fees
|
$
|
283
|
$
|
269
|
$
|
14
|
$
|
624
|
$
|
476
|
$
|
148
|
||||||||||||
Gains from loan sales, net
|
97
|
—
|
97
|
287
|
—
|
287
|
||||||||||||||||||
Document processing fees
|
108
|
124
|
(16
|
)
|
232
|
211
|
21
|
|||||||||||||||||
Service charges
|
62
|
139
|
(77
|
)
|
196
|
278
|
(82
|
)
|
||||||||||||||||
Other
|
90
|
160
|
(70
|
)
|
251
|
331
|
(80
|
)
|
||||||||||||||||
Total non-interest income
|
$
|
640
|
$
|
692
|
$
|
(52
|
)
|
$
|
1,590
|
$
|
1,296
|
$
|
294
|
Three Months Ended
June 30,
|
Increase
|
Six Months Ended June
30,
|
Increase
|
|||||||||||||||||||||
2020
|
2019
|
(Decrease)
|
2020
|
2019
|
(Decrease)
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Salaries and employee benefits
|
$
|
4,574
|
$
|
4,318
|
$
|
256
|
$
|
8,972
|
$
|
8,699
|
$
|
273
|
||||||||||||
Occupancy, net
|
776
|
768
|
8
|
1,534
|
1,550
|
(16
|
)
|
|||||||||||||||||
Professional services
|
559
|
405
|
154
|
942
|
786
|
156
|
||||||||||||||||||
Data processing
|
260
|
201
|
59
|
543
|
425
|
118
|
||||||||||||||||||
Depreciation
|
206
|
218
|
(12
|
)
|
414
|
431
|
(17
|
)
|
||||||||||||||||
FDIC assessment
|
133
|
154
|
(21
|
)
|
277
|
324
|
(47
|
)
|
||||||||||||||||
Advertising and marketing
|
265
|
230
|
35
|
418
|
359
|
59
|
||||||||||||||||||
Stock based compensation
|
95
|
97
|
(2
|
)
|
180
|
192
|
(12
|
)
|
||||||||||||||||
Other
|
135
|
369
|
(234
|
)
|
452
|
711
|
(259
|
)
|
||||||||||||||||
Total non-interest expense
|
$
|
7,003
|
$
|
6,760
|
$
|
243
|
$
|
13,732
|
$
|
13,477
|
$
|
255
|
June 30,
2020
|
December 31,
2019
|
Increase
(Decrease)
|
Percent
Increase
(Decrease)
|
|||||||||||||
(dollars in thousands)
|
||||||||||||||||
Cash and cash equivalents
|
$
|
147,502
|
$
|
82,661
|
$
|
64,841
|
78.4
|
%
|
||||||||
Investment securities available-for-sale
|
18,423
|
19,264
|
(841
|
)
|
(4.4
|
)%
|
||||||||||
Investment securities held-to-maturity
|
5,670
|
6,132
|
(462
|
)
|
(7.5
|
)%
|
||||||||||
Loans - held for sale
|
35,090
|
42,046
|
(6,956
|
)
|
(16.5
|
)%
|
||||||||||
Loans - held for investment, net
|
810,931
|
724,800
|
86,131
|
11.9
|
%
|
|||||||||||
Total assets
|
1,060,847
|
913,870
|
146,977
|
16.1
|
%
|
|||||||||||
Total deposits
|
750,158
|
750,934
|
(776
|
)
|
(0.1
|
)%
|
||||||||||
Other borrowings
|
210,103
|
65,000
|
145,103
|
223.2
|
%
|
|||||||||||
Total stockholder’s equity
|
84,093
|
81,978
|
2,115
|
2.6
|
%
|
June 30,
2020
|
December 31,
2019
|
|||||||
(in thousands)
|
||||||||
Manufactured housing
|
$
|
267,343
|
$
|
257,247
|
||||
Commercial real estate
|
392,790
|
385,642
|
||||||
Commercial
|
69,178
|
69,843
|
||||||
SBA
|
79,060
|
4,429
|
||||||
HELOC
|
3,918
|
4,531
|
||||||
Single family real estate
|
11,234
|
11,845
|
||||||
Consumer
|
45
|
94
|
||||||
823,568
|
733,631
|
|||||||
Allowance for loan losses
|
(10,008
|
)
|
(8,717
|
)
|
||||
Deferred costs, net
|
(2,577
|
)
|
(58
|
)
|
||||
Discount on SBA loans
|
(52
|
)
|
(56
|
)
|
||||
Total loans held for investment, net
|
$
|
810,931
|
$
|
724,800
|
June 30, 2020
|
||||||||
Loan segment
|
Count
|
Balance
|
||||||
(in thousands)
|
||||||||
Manufactured housing
|
142
|
$
|
19,903
|
|||||
Commercial real estate
|
78
|
124,629
|
||||||
Commercial
|
36
|
10,825
|
||||||
SBA
|
1
|
17
|
||||||
HELOC
|
0
|
0
|
||||||
Single family real estate
|
5
|
1,027
|
||||||
Consumer
|
0
|
0
|
||||||
Total pandemic deferments
|
262
|
$
|
156,401
|
Ventura/Los
Angeles
Counties
|
Santa
Barbara
County
|
San Luis
Obispo
County
|
Other
|
Loans
Outstanding
(includes $11
million of
guarantees)*
|
$ Non-
accrual
|
% Non-
accrual
|
$ Classified
|
%
Classified
|
$
Deferrals
|
%
Deferral
|
||||||||||||||||||||||||||||||||||
Healthcare
|
$
|
9,135
|
$
|
9,695
|
$
|
27,205
|
$
|
2,431
|
$
|
48,466
|
$
|
1,657
|
3.42
|
%
|
$
|
2,025
|
4.18
|
%
|
$
|
14,232
|
29.36
|
%
|
||||||||||||||||||||||
Senior/Assisted Living Facilities
|
$
|
1,695
|
$
|
612
|
$
|
20,779
|
$
|
0
|
$
|
23,086
|
$
|
0
|
0.00
|
%
|
$
|
0
|
0.00
|
%
|
$
|
0
|
0.00
|
%
|
||||||||||||||||||||||
Medical Offices
|
$
|
5,332
|
$
|
6,609
|
$
|
5,806
|
$
|
1,240
|
$
|
18,987
|
$
|
0
|
0.00
|
%
|
$
|
290
|
1.53
|
%
|
$
|
10,026
|
52.80
|
%
|
||||||||||||||||||||||
General Healthcare
|
$
|
2,108
|
$
|
2,474
|
$
|
620
|
$
|
1,191
|
$
|
6,393
|
$
|
1,657
|
25.92
|
%
|
$
|
1,735
|
27.14
|
%
|
$
|
4,206
|
65.79
|
%
|
||||||||||||||||||||||
Hospitality
|
$
|
9,011
|
$
|
16,446
|
$
|
27,941
|
$
|
2,209
|
$
|
55,607
|
$
|
3
|
0.01
|
%
|
$
|
1,673
|
3.01
|
%
|
$
|
40,197
|
72.29
|
%
|
||||||||||||||||||||||
Lodging
|
$
|
3,093
|
$
|
12,497
|
$
|
23,965
|
$
|
1,593
|
$
|
41,148
|
$
|
0
|
0.00
|
%
|
$
|
0
|
0.00
|
%
|
$
|
33,229
|
80.75
|
%
|
||||||||||||||||||||||
Restaurants
|
$
|
5,918
|
$
|
615
|
$
|
3,976
|
$
|
616
|
$
|
11,125
|
$
|
3
|
0.03
|
%
|
$
|
1,673
|
15.04
|
%
|
$
|
6,968
|
62.63
|
%
|
||||||||||||||||||||||
RV-Mobile Home Parks
|
$
|
0
|
$
|
3,334
|
$
|
0
|
$
|
0
|
$
|
3,334
|
$
|
0
|
0.00
|
%
|
$
|
0
|
0.00
|
%
|
$
|
0
|
0.00
|
%
|
||||||||||||||||||||||
Retail Commercial Real Estate
|
$
|
23,590
|
$
|
16,991
|
$
|
9,980
|
$
|
8,275
|
$
|
58,836
|
$
|
25
|
0.04
|
%
|
$
|
8,415
|
14.30
|
%
|
$
|
24,405
|
41.48
|
%
|
||||||||||||||||||||||
Retail Services
|
$
|
5,242
|
$
|
5,948
|
$
|
6,072
|
$
|
5,724
|
$
|
22,986
|
$
|
0
|
0.00
|
%
|
$
|
19
|
0.08
|
%
|
$
|
2,844
|
12.37
|
%
|
||||||||||||||||||||||
Schools
|
$
|
0
|
$
|
50
|
$
|
1,088
|
$
|
107
|
$
|
1,245
|
$
|
0
|
0.00
|
%
|
$
|
0
|
0.00
|
%
|
$
|
0
|
0.00
|
%
|
||||||||||||||||||||||
Energy
|
$
|
149
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
149
|
$
|
0
|
0.00
|
%
|
$
|
0
|
0.00
|
%
|
$
|
149
|
100.00
|
%
|
||||||||||||||||||||||
Total
|
$
|
47,127
|
$
|
49,130
|
$
|
72,286
|
$
|
18,746
|
$
|
187,289
|
$
|
1,685
|
0.90
|
%
|
$
|
12,132
|
6.48
|
%
|
$
|
81,827
|
43.69
|
%
|
June 30,
2020
|
December 31,
2019
|
|||||||
(in thousands)
|
||||||||
Nonaccrual loans (net of government guaranteed portion)
|
$
|
2,640
|
$
|
2,389
|
||||
Troubled debt restructured loans, gross
|
10,186
|
10,774
|
||||||
Nonaccrual loans (net of government guaranteed portion) to gross loans
|
0.31
|
%
|
0.30
|
%
|
||||
Net charge-offs (recoveries) (annualized) to average loans
|
0.00
|
%
|
(0.02
|
)%
|
||||
Allowance for loan losses to nonaccrual loans (net of government guaranteed portion)
|
379
|
%
|
365
|
%
|
||||
Allowance for loan losses to gross loans
|
1.22
|
%
|
1.19
|
%
|
June 30,
2020
|
December 31,
2019
|
|||||||
(in thousands)
|
||||||||
Total nonaccrual loans
|
$
|
2,886
|
$
|
2,679
|
||||
Government guaranteed portion of loans included above
|
(246
|
)
|
(290
|
)
|
||||
Total nonaccrual loans, without guarantees
|
$
|
2,640
|
$
|
2,389
|
||||
Troubled debt restructured loans, gross
|
$
|
10,186
|
$
|
10,774
|
||||
Loans 30 through 89 days past due with interest accruing
|
$
|
740
|
$
|
1,947
|
||||
Loans 90 days or more past due with interest accruing
|
$
|
—
|
$
|
—
|
||||
Allowance for loan losses to gross loans held for investment
|
1.22
|
%
|
1.19
|
%
|
Manufactured
Housing
|
Commercial
Real Estate
|
Commercial
|
SBA
|
HELOC
|
Single Family
Real Estate
|
Consumer
|
Total
Loans
|
|||||||||||||||||||||||||
Impaired Loans as of
June 30, 2020:
|
(in thousands)
|
|||||||||||||||||||||||||||||||
Recorded Investment:
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
$
|
5,144
|
$
|
—
|
$
|
149
|
$
|
—
|
$
|
—
|
$
|
459
|
$
|
—
|
$
|
5,752
|
||||||||||||||||
Impaired loans with no allowance recorded
|
2,392
|
315
|
1,545
|
324
|
—
|
1,754
|
—
|
6,330
|
||||||||||||||||||||||||
Total loans individually evaluated for impairment
|
7,536
|
315
|
1,694
|
324
|
—
|
2,213
|
—
|
12,082
|
||||||||||||||||||||||||
Related Allowance for Credit Losses
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
314
|
—
|
30
|
—
|
—
|
16
|
—
|
360
|
||||||||||||||||||||||||
Impaired loans with no allowance recorded
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Total loans individually evaluated for impairment
|
314
|
—
|
30
|
—
|
—
|
16
|
—
|
360
|
||||||||||||||||||||||||
Total impaired loans, net
|
$
|
7,222
|
$
|
315
|
$
|
1,664
|
$
|
324
|
$
|
—
|
$
|
2,197
|
$
|
—
|
$
|
11,722
|
Manufactured
Housing
|
Commercial
Real Estate
|
Commercial
|
SBA
|
HELOC
|
Single Family
Real Estate
|
Consumer
|
Total
Loans
|
|||||||||||||||||||||||||
Impaired Loans as of
December 31, 2019:
|
(in thousands)
|
|||||||||||||||||||||||||||||||
Recorded Investment:
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
$
|
5,702
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
470
|
$
|
—
|
$
|
6,172
|
||||||||||||||||
Impaired loans with no allowance recorded
|
2,296
|
318
|
1,802
|
382
|
—
|
1,858
|
—
|
6,656
|
||||||||||||||||||||||||
Total loans individually evaluated for impairment
|
7,998
|
318
|
1,802
|
382
|
—
|
2,328
|
—
|
12,828
|
||||||||||||||||||||||||
Related Allowance for Credit Losses
|
||||||||||||||||||||||||||||||||
Impaired loans with an allowance recorded
|
334
|
—
|
—
|
—
|
—
|
18
|
—
|
352
|
||||||||||||||||||||||||
Impaired loans with no allowance recorded
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Total loans individually evaluated for impairment
|
334
|
—
|
—
|
—
|
—
|
18
|
—
|
352
|
||||||||||||||||||||||||
Total impaired loans, net
|
$
|
7,664
|
$
|
318
|
$
|
1,802
|
$
|
382
|
$
|
—
|
$
|
2,310
|
$
|
—
|
$
|
12,476
|
At June 30, 2020
|
At December 31, 2019
|
|||||||||||||||||||||||
Nonaccrual
Balance
|
%
|
Percent of
Total Loans
|
Nonaccrual
Balance
|
%
|
Percent of
Total Loans
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
Manufactured housing
|
$
|
933
|
32.33
|
%
|
0.11
|
%
|
$
|
594
|
22.17
|
%
|
0.08
|
%
|
||||||||||||
Commercial real estate
|
84
|
2.91
|
%
|
0.01
|
%
|
84
|
3.14
|
%
|
0.01
|
%
|
||||||||||||||
Commercial
|
—
|
0.00
|
%
|
0.00
|
%
|
1,619
|
60.43
|
%
|
0.21
|
%
|
||||||||||||||
SBA
|
—
|
0.00
|
%
|
0.00
|
%
|
382
|
14.26
|
%
|
0.05
|
%
|
||||||||||||||
HELOC
|
1,545
|
53.53
|
%
|
0.19
|
%
|
—
|
0.00
|
%
|
0.00
|
%
|
||||||||||||||
Single family real estate
|
324
|
11.23
|
%
|
0.04
|
%
|
—
|
0.00
|
%
|
0.00
|
%
|
||||||||||||||
Consumer
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Total nonaccrual loans
|
$
|
2,886
|
100.00
|
%
|
0.35
|
%
|
$
|
2,679
|
100.00
|
%
|
0.35
|
%
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Allowance for loan losses:
|
(in thousands)
|
|||||||||||||||
Balance at beginning of period
|
$
|
9,167
|
$
|
8,648
|
$
|
8,717
|
$
|
8,691
|
||||||||
Provisions charged to operating expenses:
|
||||||||||||||||
Manufactured housing
|
99
|
(26
|
)
|
273
|
(40
|
)
|
||||||||||
Commercial real estate
|
255
|
288
|
502
|
318
|
||||||||||||
Commercial
|
292
|
(75
|
)
|
267
|
(68
|
)
|
||||||||||
SBA
|
96
|
(10
|
)
|
90
|
(50
|
)
|
||||||||||
HELOC
|
(3
|
)
|
—
|
(4
|
)
|
(43
|
)
|
|||||||||
Single family real estate
|
24
|
—
|
27
|
3
|
||||||||||||
Consumer
|
(1
|
)
|
—
|
(1
|
)
|
—
|
||||||||||
Total Provision (credit)
|
762
|
177
|
1,154
|
120
|
||||||||||||
Recoveries of loans previously charged-off:
|
||||||||||||||||
Manufactured housing
|
7
|
37
|
13
|
43
|
||||||||||||
Commercial real estate
|
20
|
12
|
40
|
12
|
||||||||||||
Commercial
|
47
|
20
|
74
|
39
|
||||||||||||
SBA
|
3
|
6
|
6
|
11
|
||||||||||||
HELOC
|
2
|
1
|
3
|
2
|
||||||||||||
Single family real estate
|
—
|
—
|
1
|
—
|
||||||||||||
Consumer
|
—
|
—
|
—
|
—
|
||||||||||||
Total recoveries
|
79
|
76
|
137
|
107
|
||||||||||||
Loans charged-off:
|
||||||||||||||||
Manufactured housing
|
—
|
—
|
—
|
—
|
||||||||||||
Commercial real estate
|
—
|
—
|
—
|
—
|
||||||||||||
Commercial
|
—
|
14
|
—
|
31
|
||||||||||||
SBA
|
—
|
—
|
—
|
—
|
||||||||||||
HELOC
|
—
|
—
|
—
|
—
|
||||||||||||
Single family real estate
|
—
|
—
|
—
|
—
|
||||||||||||
Consumer
|
—
|
—
|
—
|
—
|
||||||||||||
Total charged-off
|
—
|
14
|
—
|
31
|
||||||||||||
Net charge-offs (recoveries)
|
(79
|
)
|
(62
|
)
|
(137
|
)
|
(76
|
)
|
||||||||
Balance at end of period
|
$
|
10,008
|
$
|
8,887
|
$
|
10,008
|
$
|
8,887
|
June 30, 2020
|
||||||||||||||||
Number
of Loans
|
Loan
Balance (1)
|
Percent
|
Percent of
Total Loans
|
|||||||||||||
(dollars in thousands)
|
||||||||||||||||
Manufactured housing
|
4
|
$
|
195
|
0.90
|
%
|
0.02
|
%
|
|||||||||
Commercial real estate
|
13
|
14,839
|
68.41
|
%
|
1.75
|
%
|
||||||||||
Commercial
|
9
|
5,895
|
27.18
|
%
|
0.70
|
%
|
||||||||||
SBA
|
4
|
757
|
3.49
|
%
|
0.09
|
%
|
||||||||||
HELOC
|
—
|
—
|
0.00
|
%
|
0.00
|
%
|
||||||||||
Single family real estate
|
1
|
5
|
0.02
|
%
|
0.00
|
%
|
||||||||||
Total
|
31
|
$
|
21,691
|
100.00
|
%
|
2.56
|
%
|
(1) |
Of the $21.7 million of potential problem loans, $4.4 million are guaranteed by government agencies.
|
December 31, 2019
|
||||||||||||||||
Number
of Loans
|
Loan
Balance (1)
|
Percent
|
Percent of
Total Loans
|
|||||||||||||
(dollars in thousands)
|
||||||||||||||||
Manufactured housing
|
2
|
$
|
163
|
1.92
|
%
|
0.02
|
%
|
|||||||||
Commercial real estate
|
5
|
5,824
|
68.60
|
%
|
0.75
|
%
|
||||||||||
Commercial
|
2
|
1,699
|
20.01
|
%
|
0.22
|
%
|
||||||||||
SBA
|
5
|
799
|
9.41
|
%
|
0.10
|
%
|
||||||||||
HELOC
|
—
|
—
|
0.00
|
%
|
0.00
|
%
|
||||||||||
Single family real estate
|
1
|
5
|
0.06
|
%
|
0.00
|
%
|
||||||||||
Total
|
15
|
$
|
8,490
|
100.00
|
%
|
1.09
|
%
|
|
(1) |
Of the $8.5 million of potential problem loans, $2.1 million are guaranteed by government agencies.
|
June 30,
2020
|
December 31,
2019
|
|||||||
(in thousands)
|
||||||||
U.S. government agency notes
|
$
|
6,938
|
$
|
8,048
|
||||
U.S. government agency mortgage backed securities (“MBS”)
|
5,670
|
6,132
|
||||||
U.S. government agency collateralized mortgage obligations (“CMO”)
|
9,990
|
11,216
|
||||||
Other securities
|
1,495
|
—
|
||||||
Equity securities: Farmer Mac class A stock
|
128
|
167
|
||||||
Total
|
$
|
24,221
|
$
|
25,563
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Balance, beginning of period
|
$
|
2,707
|
$
|
—
|
$
|
2,524
|
$
|
—
|
||||||||
Additions
|
—
|
1,074
|
106
|
1,074
|
||||||||||||
Proceeds from dispositions
|
—
|
—
|
—
|
—
|
||||||||||||
(Loss) gain on sales, net
|
—
|
—
|
77
|
—
|
||||||||||||
Third-party portion of writedown/loss
|
—
|
—
|
—
|
—
|
||||||||||||
Balance, end of period
|
$
|
2,707
|
$
|
1,074
|
$
|
2,707
|
$
|
1,074
|
June 30,
2020
|
December 31,
2019
|
Increase
(Decrease)
|
Percent
Increase
(Decrease)
|
|||||||||||||
(dollars in thousands)
|
||||||||||||||||
Non-interest bearing demand deposits
|
$
|
192,806
|
$
|
110,843
|
$
|
81,963
|
73.9
|
%
|
||||||||
Interest-bearing demand deposits
|
311,266
|
314,278
|
(3,012
|
)
|
(1.0
|
)%
|
||||||||||
Savings
|
17,862
|
15,689
|
2,173
|
13.9
|
%
|
|||||||||||
Certificates of deposit ($250,000 or more)
|
86,046
|
96,431
|
(10,385
|
)
|
(10.8
|
)%
|
||||||||||
Other certificates of deposit
|
142,178
|
213,693
|
(71,515
|
)
|
(33.5
|
)%
|
||||||||||
Total deposits
|
$
|
750,158
|
$
|
750,934
|
$
|
(776
|
)
|
(0.1
|
)%
|
Liquidity and Capital Resources
|
Total
Capital
(To Risk-
Weighted
Assets)
|
Tier 1
Capital
(To Risk-
Weighted
Assets)
|
Common
Equity
Tier 1
(To Risk-
Weighted
Assets)
|
Leverage
Ratio/Tier 1
Capital
(To Average
Assets)
|
Community
Banking
Leverage
Ratio
|
||||||||||||||||
June 30, 2020
|
||||||||||||||||||||
CWB’s actual regulatory ratios
|
11.63
|
%
|
10.38
|
%
|
10.38
|
%
|
8.94
|
%
|
8.94
|
%
|
||||||||||
Minimum capital requirements
|
8.00
|
%
|
6.00
|
%
|
4.50
|
%
|
4.00
|
%
|
8.00
|
%
|
||||||||||
Well-capitalized requirements
|
10.00
|
%
|
8.00
|
%
|
6.50
|
%
|
N/A
|
9.00
|
%
|
|||||||||||
Minimum capital requirements including fully-phased in capital conservation buffer
|
10.50
|
%
|
8.50
|
%
|
7.00
|
%
|
N/A
|
N/A
|
Total Capital
(To Risk-
Weighted
Assets)
|
Tier 1
Capital
(To Risk-
Weighted
Assets)
|
Common
Equity
Tier 1
(To Risk-
Weighted
Assets)
|
Leverage
Ratio/Tier
1 Capital
(To
Average
Assets)
|
|||||||||||||
December 31, 2019
|
||||||||||||||||
CWB’s actual regulatory ratios
|
11.41
|
%
|
10.28
|
%
|
10.28
|
%
|
9.06
|
%
|
||||||||
Minimum capital requirements
|
8.00
|
%
|
6.00
|
%
|
4.50
|
%
|
4.00
|
%
|
||||||||
Well-capitalized requirements
|
10.00
|
%
|
8.00
|
%
|
6.50
|
%
|
N/A
|
|||||||||
Minimum capital requirements including fully-phased in capital conservation buffer (2019)
|
10.50
|
%
|
8.50
|
%
|
7.00
|
%
|
N/A
|
Supervision and Regulation
|
ITEM 3. |
ITEM 4. |
ITEM 1. |
ITEM 1A. |
RISK FACTORS
|
|
• |
demand for our products and services may decline, making it difficult to grow assets and income;
|
|
• |
if the economy is unable to substantially reopen, and high levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced
income;
|
|
• |
collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase;
|
|
• |
our allowance for loan losses may have to be increased if borrowers experience financial difficulties beyond forbearance periods, which will adversely affect our net income;
|
|
• |
the net worth and liquidity of our loan guarantors may decline, impairing their ability to honor commitments to us;
|
|
• |
as the result of the decline in the Federal Reserve Board’s target federal funds rate, the yield on our assets may decline to greater extent than the cost of interest-bearing liabilities, reducing our net interest margin and spread and
reducing our income;
|
|
• |
a material decrease in net income or a net loss over several quarters could result in a decrease in the rate of our quarterly cash dividend;
|
|
• |
an increase in information security risk, with exploitation of clients and added risks of remote work;
|
|
• |
we rely on third party vendors for certain services and the unavailability of a critical service due to the COVID-19 outbreak could have an adverse effect on us; and
|
|
• |
Federal Deposit Insurance Corporation premiums may increase if the agency experiences additional resolution costs.
|
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4. |
MINE SAFETY DISCLOSURES
|
ITEM 5. |
OTHER INFORMATION
|
ITEM 6. |
EXHIBITS
|
Exhibit
Number
|
|
31.1
|
Certification of Chief Executive Officer of the Registrant pursuant to Rule 13a-14(a) or Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.
|
31.2
|
Certification of Chief Financial Officer of the Registrant pursuant to Rule 13a-14(a) or Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.
|
32.1*
|
Certification of Chief Executive Officer and Chief Financial Officer of the Registrant pursuant to Rule 13a-14(b) or Rule 15d-14(b), promulgated under the Securities Exchange Act of 1934, as
Amended, and 18 U.S.C. 1350.
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
* |
This certification is furnished to, but shall not be deemed filed, with the Commission. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of
1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates it by reference.
|
Date: August 7, 2020
|
BY: /s/ Susan C. Thompson
|
Susan C. Thompson
|
|
Executive Vice President and Chief Financial Officer
|
|
On Behalf of Registrant and as a Duly Authorized Officer
|
|
and as Principal Financial and Accounting Officer
|
* |
This certification is furnished to, but shall not be deemed filed, with the Commission. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or
the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates it by reference.
|
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