Company Quick10K Filing
Bankwell Financial
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$0.00 8 $216
10-Q 2019-11-01 Quarter: 2019-09-30
10-Q 2019-07-31 Quarter: 2019-06-30
10-Q 2019-05-07 Quarter: 2019-03-31
10-K 2019-03-04 Annual: 2018-12-31
10-Q 2018-11-01 Quarter: 2018-09-30
10-Q 2018-08-07 Quarter: 2018-06-30
10-Q 2018-05-10 Quarter: 2018-03-31
10-K 2018-03-30 Annual: 2017-12-31
10-Q 2017-11-09 Quarter: 2017-09-30
10-Q 2017-08-09 Quarter: 2017-06-30
10-Q 2017-05-10 Quarter: 2017-03-31
10-K 2017-03-16 Annual: 2016-12-31
10-Q 2016-11-09 Quarter: 2016-09-30
10-Q 2016-08-09 Quarter: 2016-06-30
10-Q 2016-05-10 Quarter: 2016-03-31
10-K 2016-03-15 Annual: 2015-12-31
10-Q 2015-11-09 Quarter: 2015-09-30
10-Q 2015-08-10 Quarter: 2015-06-30
10-Q 2015-05-11 Quarter: 2015-03-31
10-K 2015-03-16 Annual: 2014-12-31
10-Q 2014-11-14 Quarter: 2014-09-30
10-Q 2014-08-14 Quarter: 2014-06-30
10-Q 2014-06-04 Quarter: 2014-03-31
8-K 2020-02-07
8-K 2020-01-27
8-K 2020-01-15
8-K 2019-10-31
8-K 2019-10-30
8-K 2019-07-30
8-K 2019-05-29
8-K 2019-05-29
8-K 2019-04-24
8-K 2019-01-30
8-K 2018-12-19
8-K 2018-11-09
8-K 2018-10-30
8-K 2018-07-26
8-K 2018-07-14
8-K 2018-05-30
8-K 2018-05-11
8-K 2018-04-25
8-K 2018-04-25
8-K 2018-04-04
8-K 2018-01-31
BWFG 2019-09-30
Part 1 - Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
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
EX-31.1 bwfg09302019ex311.htm
EX-31.2 bwfg09302019ex312.htm
EX-32 bwfg09302019ex32.htm

Bankwell Financial Earnings 2019-09-30

BWFG 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Comparables ($MM TTM)
Ticker M Cap Assets Liab Rev G Profit Net Inc EBITDA EV G Margin EV/EBITDA ROA
UNTY 228 1,627 1,477 0 0 23 49 73 1.5 1%
PFBI 221 1,704 1,472 0 0 23 38 125 3.3 1%
SLCT 221 1,317 1,100 1 0 16 31 135 0% 4.4 1%
MVBF 220 1,833 1,632 2 0 25 57 402 0% 7.0 1%
BWFG 216 1,860 1,683 0 0 19 54 137 2.5 1%
SBBX 212 1,866 1,674 0 0 18 43 218 5.1 1%
INBK 210 3,959 3,663 0 0 22 99 -138 -1.4 1%
MPB 209 2,136 1,905 0 0 15 43 161 3.7 1%
NWFL 205 1,223 1,091 3 0 14 26 230 0% 9.0 1%
FBIZ 204 2,070 1,881 0 0 22 54 159 2.9 1%

10-Q 1 bwfg09301910q.htm 10-Q Document


 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2019

or

o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________to________

Commission File Number: 001-36448
Bankwell Financial Group, Inc.
(Exact Name of Registrant as specified in its Charter)
Connecticut
 
20-8251355
(State or other jurisdiction of
 
(I.R.S. Employer
Incorporation or organization)
 
Identification No.)
220 Elm Street
New Canaan, Connecticut 06840
(203) 652-0166
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

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

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which
Registered

Common Stock, no par value per
share

BWFG
NASDAQ Global Market


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. þ Yes ¨ No

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ¨
Accelerated filer þ
Non-accelerated filer ¨   
Smaller reporting company þ
Emerging growth company þ
 


1



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. þ

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

As of October 31, 2019, there were 7,841,103 shares of the registrant’s common stock outstanding.
 

2



Bankwell Financial Group, Inc.
Form 10-Q

Table of Contents
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Certifications
 

3



PART 1 – FINANCIAL INFORMATION
Item 1. Financial Statements
Bankwell Financial Group, Inc.
Consolidated Balance Sheets - (unaudited)
(In thousands, except share data)
 
September 30, 2019
 
December 31, 2018
ASSETS
 
 
 
Cash and due from banks
$
83,109

 
$
75,411

Federal funds sold

 
2,701

Cash and cash equivalents
83,109

 
78,112

 
 
 
 
Investment securities
 
 
 
Marketable equity securities, at fair value
2,120

 
2,009

Available for sale investment securities, at fair value
86,017

 
93,154

Held to maturity investment securities, at amortized cost (fair values of $19,758 and $21,988 at September 30, 2019 and December 31, 2018, respectively)
17,365

 
21,421

Total investment securities
105,502

 
116,584

 
 
 
 
Loans receivable (net of allowance for loan losses of $13,212 at September 30, 2019 and $15,462 at December 31, 2018)
1,548,988

 
1,586,775

Accrued interest receivable
5,916

 
6,375

Federal Home Loan Bank stock, at cost
7,475

 
8,110

Premises and equipment, net
28,892

 
19,771

Bank-owned life insurance
41,433

 
40,675

Goodwill
2,589

 
2,589

Other intangible assets
232

 
290

Deferred income taxes, net
6,591

 
4,347

Other assets
27,815

 
10,037

Total assets
$
1,858,542

 
$
1,873,665

LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
Liabilities
 
 
 
Deposits
 
 
 
Noninterest bearing deposits
$
178,733

 
$
173,198

Interest bearing deposits
1,291,551

 
1,329,046

Total deposits
1,470,284

 
1,502,244

 
 
 
 
Advances from the Federal Home Loan Bank
150,000

 
160,000

Subordinated debentures ($25,500 face, less unamortized debt issuance costs of $306 and $345 at September 30, 2019 and December 31, 2018, respectively)
25,194

 
25,155

Accrued expenses and other liabilities
37,052

 
12,070

Total liabilities
1,682,530

 
1,699,469

Commitments and contingencies


 


Shareholders' equity
 
 
 
Common stock, no par value; 10,000,000 shares authorized, 7,841,103 and 7,842,271 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively
120,343

 
120,527

Retained earnings
66,870

 
54,706

Accumulated other comprehensive loss
(11,201
)
 
(1,037
)
Total shareholders' equity
176,012

 
174,196

 
 
 
 
Total liabilities and shareholders' equity
$
1,858,542

 
$
1,873,665


See accompanying notes to consolidated financial statements (unaudited)

4



Bankwell Financial Group, Inc.
Consolidated Statements of Income – (unaudited)
(In thousands, except share data)
 
Three Months Ended September 30,
 
Nine Months Ended
September 30,
 
2019
 
2018
 
2019
 
2018
Interest and dividend income
 
 
 
 
 
 
 
Interest and fees on loans
$
19,055

 
$
19,153

 
$
58,691

 
$
54,685

Interest and dividends on securities
903

 
1,002

 
2,892

 
2,912

Interest on cash and cash equivalents
535

 
345

 
1,432

 
924

Total interest and dividend income
20,493

 
20,500

 
63,015

 
58,521

 
 
 
 
 
 
 
 
Interest expense
 
 
 
 
 
 
 
Interest expense on deposits
6,331

 
5,044

 
18,750

 
13,009

Interest expense on borrowings
1,151

 
1,210

 
3,386

 
3,653

Total interest expense
7,482

 
6,254

 
22,136

 
16,662

 
 
 
 
 
 
 
 
Net interest income
13,011

 
14,246

 
40,879

 
41,859

 
 
 
 
 
 
 
 
Provision for loan losses
773

 
322

 
127

 
645

 
 
 
 
 
 
 
 
Net interest income after provision for loan losses
12,238

 
13,924

 
40,752

 
41,214

 
 
 
 
 
 
 
 
Noninterest income
 
 
 
 
 
 
 
Gains and fees from sales of loans
703

 
150

 
1,409

 
835

Service charges and fees
264

 
285

 
776

 
806

Bank owned life insurance
255

 
267

 
758

 
795

Net gain on sale of available for sale securities

 

 
76

 
222

Loss on sale of other real estate owned, net
(102
)
 

 
(102
)
 

Other
432

 
157

 
1,279

 
641

Total noninterest income
1,552

 
859

 
4,196

 
3,299

 
 
 
 
 
 
 
 
Noninterest expense
 
 
 
 
 
 
 
Salaries and employee benefits
4,881

 
4,903

 
14,272

 
14,470

Occupancy and equipment
1,946

 
1,771

 
5,666

 
5,119

Data processing
505

 
512

 
1,568

 
1,546

Professional services
346

 
321

 
1,455

 
1,520

Director fees
235

 
260

 
639

 
749

Marketing
210

 
395

 
751

 
1,171

Amortization of intangibles
19

 
24

 
57

 
72

FDIC insurance
(125
)
 
203

 
74

 
620

Other
655

 
481

 
1,920

 
1,570

Total noninterest expense
8,672

 
8,870

 
26,402

 
26,837

Income before income tax expense
5,118

 
5,913

 
18,546

 
17,676

Income tax expense
1,030

 
1,056

 
3,802

 
3,504

Net income
$
4,088

 
$
4,857

 
$
14,744

 
$
14,172

 
 
 
 
 
 
 
 
Earnings Per Common Share:
 
 
 
 
 
 
 
Basic
$
0.52

 
$
0.62

 
$
1.88

 
$
1.81

Diluted
$
0.52

 
$
0.62

 
$
1.87

 
$
1.80

 
 
 
 
 
 
 
 
Weighted Average Common Shares Outstanding:
 
 
 
 
 
 
 
Basic
7,750,490

 
7,738,343

 
7,761,441

 
7,712,924

Diluted
7,766,485

 
7,763,935

 
7,788,839

 
7,758,762

Dividends per common share
$
0.13

 
$
0.12

 
$
0.39

 
$
0.36


See accompanying notes to consolidated financial statements (unaudited)

5



Bankwell Financial Group, Inc.
Consolidated Statements of Comprehensive (Loss) Income – (unaudited)
(In thousands)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
Net income
$
4,088

 
$
4,857

 
$
14,744

 
$
14,172

Other comprehensive (loss) income:
 
 
 
 
 
 
 
Unrealized gains (losses) on securities:
 
 
 
 
 
 
 
Unrealized holding gains (losses) on available for sale securities
353

 
(643
)
 
3,022

 
(2,762
)
Reclassification adjustment for gain realized in net income

 

 
(76
)
 
(222
)
Net change in unrealized gains (losses)
353

 
(643
)
 
2,946

 
(2,984
)
Income tax (expense) benefit
(74
)
 
135

 
(618
)
 
627

Unrealized gains (losses) on securities, net of tax
279

 
(508
)
 
2,328

 
(2,357
)
Unrealized (losses) gains on interest rate swaps:
 
 
 
 
 
 
 
Unrealized (losses) gains on interest rate swaps
(5,766
)
 
1,784

 
(15,811
)
 
3,599

Income tax benefit (expense)
1,211

 
(375
)
 
3,319

 
(756
)
Unrealized (losses) gains on interest rate swaps, net of tax
(4,555
)
 
1,409

 
(12,492
)
 
2,843

Total other comprehensive (loss) income, net of tax
(4,276
)
 
901

 
(10,164
)
 
486

Comprehensive (loss) income
$
(188
)
 
$
5,758

 
$
4,580

 
$
14,658


See accompanying notes to consolidated financial statements (unaudited)

6



Bankwell Financial Group, Inc.
Consolidated Statements of Shareholders' Equity – (unaudited)
(In thousands, except share data)

 
Number of Outstanding Shares
 
Common Stock
 
Retained Earnings
 
Accumulated Other Comprehensive Loss
 
Total
Balance at June 30, 2019
7,841,103

 
$
120,064

 
$
63,801

 
$
(6,925
)
 
$
176,940

Net income

 

 
4,088

 

 
4,088

Other comprehensive loss, net of tax

 

 

 
(4,276
)
 
(4,276
)
Cash dividends declared ($0.13 per share)

 

 
(1,019
)
 

 
(1,019
)
Stock-based compensation expense

 
279

 

 

 
279

Balance at September 30, 2019
7,841,103

 
$
120,343

 
$
66,870

 
$
(11,201
)
 
$
176,012


 
Number of Outstanding Shares
 
Common Stock
 
Retained Earnings
 
Accumulated Other Comprehensive Income
 
Total
Balance at June 30, 2018
7,841,720

 
$
119,824

 
$
48,470

 
$
1,279

 
$
169,573

Net income

 

 
4,857

 

 
4,857

Other comprehensive income, net of tax

 

 

 
901

 
901

Cash dividends declared ($0.12 per share)

 

 
(941
)
 

 
(941
)
Stock-based compensation expense

 
331

 

 

 
331

Forfeitures of restricted stock
(824
)
 

 

 

 

Stock options exercised
2,100

 
33

 

 

 
33

Balance at September 30, 2018
7,842,996

 
$
120,188

 
$
52,386

 
$
2,180

 
$
174,754


See accompanying notes to consolidated financial statements (unaudited)
















7



Bankwell Financial Group, Inc.
Consolidated Statements of Shareholders' Equity – (Continued)
(In thousands, except share data)
 
Number of Outstanding Shares
 
Common Stock
 
Retained Earnings
 
Accumulated Other Comprehensive Loss
 
Total
Balance at December 31, 2018
7,842,271

 
$
120,527

 
$
54,706

 
$
(1,037
)
 
$
174,196

Net income

 

 
14,744

 

 
14,744

Other comprehensive loss, net of tax

 

 

 
(10,164
)
 
(10,164
)
Cash dividends declared ($0.39 per share)

 

 
(3,061
)
 

 
(3,061
)
Stock-based compensation expense

 
774

 

 

 
774

ASU 2016-02 transition adjustment, net of tax

 

 
481

 

 
481

Forfeitures of restricted stock
(3,800
)
 

 

 

 

Issuance of restricted stock
34,450

 

 

 

 

Stock options exercised
2,350

 
30

 

 

 
30

Repurchase of common stock
(34,168
)
 
(988
)
 

 

 
(988
)
Balance at September 30, 2019
7,841,103

 
$
120,343

 
$
66,870

 
$
(11,201
)
 
$
176,012


 
Number of Outstanding Shares
 
Common Stock
 
Retained Earnings
 
Accumulated Other Comprehensive Income
 
Total
Balance at December 31, 2017
7,751,424

 
$
118,301

 
$
41,032

 
$
1,694

 
$
161,027

Net income

 

 
14,172

 

 
14,172

Other comprehensive income, net of tax

 

 

 
486

 
486

Cash dividends declared ($0.36 per share)

 

 
(2,818
)
 

 
(2,818
)
Stock-based compensation expense

 
964

 

 

 
964

Forfeitures of restricted stock
(1,498
)
 

 

 

 

Issuance of restricted stock
43,550

 

 

 

 

Warrants exercised
22,400

 
400

 

 

 
400

Stock options exercised
27,120

 
523

 

 

 
523

Balance at September 30, 2018
7,842,996

 
$
120,188

 
$
52,386

 
$
2,180

 
$
174,754


See accompanying notes to consolidated financial statements (unaudited)

8



Bankwell Financial Group, Inc.
Consolidated Statements of Cash Flows – (unaudited)
(In thousands)
 
Nine Months Ended September 30,
 
2019
 
2018
Cash flows from operating activities
 
 
 
Net income
$
14,744

 
$
14,172

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Net accretion of premiums and discounts on investment securities
(375
)
 
(38
)
Provision for loan losses
127

 
645

Provision for deferred income taxes
330

 
192

Net gain on sales of available for sale securities
(76
)
 
(222
)
Change in fair value of marketable equity securities
(77
)
 

Depreciation and amortization
2,534

 
1,259

Amortization of debt issuance costs
39

 
39

Increase in cash surrender value of bank-owned life insurance
(758
)
 
(795
)
Gains and fees from sales of loans
(1,409
)
 
(835
)
Stock-based compensation
774

 
964

Net (accretion) amortization of purchase accounting adjustments
(58
)
 
259

Loss on sale of premises and equipment
10

 
44

Loss on sale of other real estate owned, net
102

 

Net change in:
 
 
 
Deferred loan fees
(362
)
 
(391
)
Accrued interest receivable
459

 
(145
)
Other assets
(33,475
)
 
1,028

Accrued expenses and other liabilities
14,398

 
(1,101
)
Net cash (used in) provided by operating activities
(3,073
)
 
15,075

 
 
 
 
Cash flows from investing activities
 
 
 
Proceeds from principal repayments on available for sale securities
7,337

 
7,015

Proceeds from principal repayments on held to maturity securities
168

 
132

Net proceeds from sales and calls of available for sale securities
15,455

 
12,377

Net proceeds from calls of held to maturity securities
3,900

 

Purchases of marketable equity securities
(34
)
 

Purchases of available for sale securities
(12,270
)
 
(24,382
)
Net decrease (increase) in loans
36,807

 
(65,172
)
Loan principal sold from loans not originated for sale
(21,664
)
 
(7,208
)
Proceeds from sales of loans not originated for sale
23,073

 
8,043

Purchases of premises and equipment, net
(473
)
 
(3,353
)
Reduction (purchase) of Federal Home Loan Bank stock
635

 
(27
)
Proceeds from the sale of other real estate owned
1,115

 

Net cash provided by (used in) investing activities
54,049

 
(72,575
)

See accompanying notes to consolidated financial statements (unaudited)

9



Bankwell Financial Group, Inc.
Consolidated Statements of Cash Flows - (Continued)
(In thousands)
 
Nine Months Ended September 30,
 
2019
 
2018
Cash flows from financing activities
 
 
 
Net change in time certificates of deposit
$
28,704

 
$
11,176

Net change in other deposits
(60,664
)
 
83,589

Net change in FHLB advances
(10,000
)
 
(19,000
)
Proceeds from exercise of warrants

 
400

Proceeds from exercise of options
30

 
523

Dividends paid on common stock
(3,061
)
 
(2,818
)
Repurchase of common stock
(988
)
 

Net cash (used in) provided by financing activities
(45,979
)
 
73,870

Net increase in cash and cash equivalents
4,997

 
16,370

Cash and cash equivalents:
 
 
 
Beginning of year
78,112

 
70,731

End of period
$
83,109

 
$
87,101

Supplemental disclosures of cash flows information:
 
 
 
Cash paid for:
 
 
 
Interest
$
21,940

 
$
16,855

Income taxes
2,118

 
3,065

Noncash investing and financing activities:
 
 
 
Loans transferred to other real estate owned
$
1,217

 
$

Net change in unrealized gains or losses on available for sale securities
2,946

 
(2,984
)
Net change in unrealized gains or losses on interest rate swaps
(15,811
)
 
3,599

Establishment of right-of-use asset and lease liability
11,192

 



See accompanying notes to consolidated financial statements (unaudited)

10




1. Nature of Operations and Summary of Significant Accounting Policies

Bankwell Financial Group, Inc. (the “Company” or “Bankwell”) is a bank holding company headquartered in New Canaan, Connecticut. The Company offers a broad range of financial services through its banking subsidiary, Bankwell Bank (the “Bank”). The Bank is a Connecticut state chartered commercial bank, founded in 2002, whose deposits are insured under the Deposit Insurance Fund administered by the Federal Deposit Insurance Corporation (“FDIC”). The Bank provides a full range of banking services to commercial and consumer customers, primarily concentrated in the New York metropolitan area and throughout Connecticut, with the majority of the Company's loans in Fairfield and New Haven Counties, Connecticut, with branch locations in New Canaan, Stamford, Fairfield, Wilton, Westport, Darien, Norwalk, Hamden and North Haven Connecticut.

Principles of consolidation

The consolidated financial statements include the accounts of the Company and the Bank, including its wholly owned passive investment company subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of estimates

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”) and general practices within the banking industry. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of the date of the consolidated balance sheet, and revenue and expenses for the period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the allowance for loan losses, the valuation of derivative instruments, investment securities and deferred income taxes, and the evaluation of investment securities for other than temporary impairment.

Basis of consolidated financial statement presentation

The unaudited consolidated financial statements presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and Rule 10-01 of Regulation S-X and do not include all of the information and note disclosures required by GAAP. In the opinion of management, all adjustments (consisting of normal recurring adjustments) and disclosures considered necessary for the fair presentation of the accompanying unaudited interim consolidated financial statements have been included. Interim results are not necessarily reflective of the results that may be expected for the year ending December 31, 2019. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included on Form 10-K for the year ended December 31, 2018.

Significant concentrations of credit risk

Most of the Company’s activities are with customers located in the New York metropolitan area and throughout Fairfield and New Haven Counties and the surrounding region of Connecticut. Declines in property values in these areas could significantly impact the Company. The Company has a significant concentration in commercial real estate loans. Management does not believe this presents any special risk as loans are subject to an appropriate credit risk monitoring process. The Company does not have any significant concentrations in any one industry or customer.

Common Share Repurchases

The Company is incorporated in the state of Connecticut. Connecticut law does not provide for treasury shares, rather shares repurchased by the Company constitute authorized, but unissued shares. GAAP states that accounting for treasury stock shall conform to state law. Therefore, the cost of shares repurchased by the Company has been allocated to common stock balances.

Reclassification

Certain prior period amounts have been reclassified to conform to the 2019 financial statement presentation. These reclassifications only changed the reporting categories and did not affect the consolidated results of operations or consolidated financial position of the Company.


11



Recent accounting pronouncements

The following section includes changes in accounting principles and potential effects of new accounting guidance and pronouncements.

Recently issued accounting pronouncements not yet adopted
ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): “Measurement of Credit Losses on Financial Instruments.” This ASU changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held to maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that will replace today’s “incurred loss” model and can result in the earlier recognition of credit losses. For available for sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except that the losses will be recognized as an allowance. This update will be effective for the Company on January 1, 2020, including interim periods within that fiscal year. Early adoption is permitted as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Management is currently working with third-party consultants and continues to evaluate the impact of its pending adoption of this guidance on the Company's financial statements. On July 17, 2019, the FASB proposed deferring the effective date of ASC 326 for smaller reporting companies as defined by the SEC. The FASB has proposed a three-year deferral for smaller reporting companies, with an effective date of January 1, 2023. On October 16, 2019, the FASB voted in favor of finalizing its proposal to defer the effective date of this standard. Subject to any additional guidance or clarification from the FASB or the SEC, management believes the Company will qualify for this proposed deferral.

ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): “Simplifying the Test for Goodwill Impairment.” This ASU simplifies the test for goodwill impairment by eliminating Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity was required to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, this ASU also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. Therefore, the same impairment assessment applies to all reporting units. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The amendments will be effective for the Company for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. On October 16, 2019, the FASB voted in favor of a proposal to defer the effective date of this standard in the same manner it is deferring the effective date of ASC 326. The Company does not expect the application of this guidance to have a material impact on the Company’s financial statements.

ASU No. 2018-13, Fair Value Measurement (Topic 820): “Changes to the Disclosure Requirements for Fair Value Measurement.” The amendments in this update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. The following disclosure requirements were removed from topic 820 for public entities: (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, (2) the policy for timing of transfers between levels and (3) the valuation processes for Level 3 fair value measurements. This update also modified and added disclosure requirements to Topic 820, including adding (1) the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and (2) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. ASU 2018-13 will be effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods in the year of adoption. Early adoption is permitted for any interim or annual period. The Company does not expect the application of this guidance to have a material impact on the Company’s financial statements.


12



Recently adopted accounting pronouncements

ASU No. 2016-02, Leases (Topic 842): The amendments in this ASU require lessees to recognize, on the balance sheet, assets and liabilities for the rights and obligations created by operating leases. Accounting by lessors will remain largely unchanged. In July 2018, the FASB issued a subsequent update which introduced a new transition method, under which an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The guidance was effective for the Company on January 1, 2019. The Company recognized $0.5 million, net of tax, as a cumulative-effect adjustment to the opening balance of retained earnings at the time of adoption on January 1, 2019. In addition, the Company recorded a right of use asset totaling $10.6 million and a lease liability totaling $10.6 million on the balance sheet for the Company's outstanding lease obligations on January 1, 2019. The Company utilized a 6% discount rate to calculate the present value of the right of use asset and lease liability on January 1, 2019. The right of use asset is disclosed within premises and equipment, net on the balance sheet and the lease liability is disclosed within accrued expenses and other liabilities on the balance sheet.

2. Investment Securities

The amortized cost, gross unrealized gains and losses and fair value of available for sale and held to maturity securities at September 30, 2019 were as follows:
 
September 30, 2019
 
Amortized Cost
 
Gross Unrealized
 
Fair Value
 
 
Gains
 
Losses
 
 
(In thousands)
Available for sale securities:
 
 
 
 
 
 
 
U.S. Government and agency obligations
 
 
 
 
 
 
 
Less than one year
$
2,100

 
$

 
$
(4
)
 
$
2,096

Due from one through five years
10,944

 
78

 
(5
)
 
11,017

Due from five through ten years
8,354

 
385

 
(1
)
 
8,738

Due after ten years
63,418

 
748

 

 
64,166

 
 
 
 
 
 
 
 
Total available for sale securities
$
84,816

 
$
1,211

 
$
(10
)
 
$
86,017

 
 
 
 
 
 
 
 
Held to maturity securities:
 
 
 
 
 
 
 
State agency and municipal obligations
 
 
 
 
 
 
 
Due after ten years
$
16,284

 
$
2,388

 
$

 
$
18,672

 
 
 
 
 
 
 
 
Corporate bonds
 
 
 
 
 
 
 
Less than one year
1,000

 

 
(4
)
 
996

 
 
 
 
 
 
 
 
Government-sponsored mortgage backed securities
 
 
 
 
 
 
 
No contractual maturity
81

 
9

 

 
90

Total held to maturity securities
$
17,365

 
$
2,397

 
$
(4
)
 
$
19,758



13



The amortized cost, gross unrealized gains and losses and fair value of available for sale and held to maturity securities at December 31, 2018 were as follows:
 
December 31, 2018
 
Amortized Cost
 
Gross Unrealized
 
Fair Value
 
 
Gains
 
Losses
 
 
(In thousands)
Available for sale securities:
 
 
 
 
 
 
 
U.S. Government and agency obligations
 
 
 
 
 
 
 
Less than one year
$
1,000

 
$

 
$
(11
)
 
$
989

Due from one through five years
12,025

 

 
(161
)
 
11,864

Due from five through ten years
100

 

 
(5
)
 
95

Due after ten years
70,690

 
7

 
(1,509
)
 
69,188

 
83,815

 
7

 
(1,686
)
 
82,136

 
 
 
 
 
 
 
 
State agency and municipal obligations
 
 
 
 
 
 
 
Due from one through five years
2,234

 
18

 

 
2,252

Due from five through ten years
1,261

 
18

 

 
1,279

Due after ten years
528

 

 
(52
)
 
476

 
4,023

 
36

 
(52
)
 
4,007

 
 
 
 
 
 
 
 
Corporate bonds
 
 
 
 
 
 
 
Due from one through five years
7,061

 

 
(50
)
 
7,011

Total available for sale securities
$
94,899

 
$
43

 
$
(1,788
)
 
$
93,154

 
 
 
 
 
 
 
 
Held to maturity securities:
 
 
 
 
 
 
 
State agency and municipal obligations
 
 
 
 
 
 
 
Less than one year
$
3,894

 
$
6

 
$

 
$
3,900

Due after ten years
16,434

 
669

 
(113
)
 
16,990

 
20,328

 
675

 
(113
)
 
20,890

 
 
 
 
 
 
 
 
Corporate bonds
 
 
 
 
 
 
 
Less than one year
1,000

 

 

 
1,000

 
 
 
 
 
 
 
 
Government-sponsored mortgage backed securities
 
 
 
 
 
 
 
No contractual maturity
93

 
5

 

 
98

Total held to maturity securities
$
21,421

 
$
680

 
$
(113
)
 
$
21,988


The gross realized gains on the sales of investment securities totaled $0.1 million for the nine months ended September 30, 2019. The gross realized losses on the sales of investment securities totaled $17.0 thousand for the nine months ended September 30, 2019. Total sales proceeds and calls of available for sale securities were $15.5 million for the nine months ended September 30, 2019. There were no sales of investment securities during the three months ended September 30, 2019. The gross realized gains on the sales of investment securities totaled $0.2 million for the nine months ended September 30, 2018. The gross realized losses on the sales of investment securities totaled $2.0 thousand for the nine months ended September 30, 2018. Total sales proceeds and calls of available for sale securities were $12.4 million for the nine months ended September 30, 2018. There were no sales of investment securities during the three months ended September 30, 2018.

At September 30, 2019 and December 31, 2018, none of the Company's securities were pledged as collateral with the Federal Home Loan Bank ("FHLB") or any other institution.


14



As of September 30, 2019 and December 31, 2018, the actual duration of the Company's available for sale securities were significantly shorter than the notional maturities.

At September 30, 2019, the Company held marketable equity securities with a fair value of $2.1 million and an amortized cost of $2.0 million. At December 31, 2018, the Company held marketable equity securities with a fair value and amortized cost of $2.0 million. These securities represent an investment in mutual funds that have a primary objective to make investments for CRA purposes.

The following table provides information regarding investment securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2019 and December 31, 2018:
 
Length of Time in Continuous Unrealized Loss Position
 
 
 
 
 
 
 
Less Than 12 Months
 
12 Months or More
 
Total
 
Fair Value
 
Unrealized
Loss
 
Percent
Decline from
Amortized Cost
 
Fair Value
 
Unrealized
Loss
 
Percent
Decline from
Amortized Cost
 
Fair Value
 
Unrealized
Loss
 
Percent
Decline from
Amortized Cost
 
(Dollars in thousands)
September 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Government and agency obligations
$
99

 
$
(1
)
 
0.41
%
 
$
3,090

 
$
(9
)
 
0.31
%
 
$
3,189

 
$
(10
)
 
0.31
%
Corporate bonds
996

 
(4
)
 
0.38
%
 

 

 
%
 
996

 
(4
)
 
0.38
%
Total investment securities
$
1,095

 
$
(5
)
 
0.38
%
 
$
3,090

 
$
(9
)
 
0.31
%
 
$
4,185

 
$
(14
)
 
0.32
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Government and agency obligations
$
4,990

 
$
(38
)
 
0.75
%
 
$
72,676

 
$
(1,648
)
 
2.22
%
 
$
77,666

 
$
(1,686
)
 
2.12
%
State agency and municipal obligations
8,212

 
(113
)
 
1.36
%
 
476

 
(52
)
 
9.87
%
 
8,688

 
(165
)
 
1.87
%
Corporate bonds
2,033

 
(11
)
 
0.51
%
 
4,978

 
(39
)
 
0.78
%
 
7,011

 
(50
)
 
0.70
%
Total investment securities
$
15,235

 
$
(162
)
 
1.05
%
 
$
78,130

 
$
(1,739
)
 
2.18
%
 
$
93,365

 
$
(1,901
)
 
2.00
%

There were six and twenty-five investment securities as of September 30, 2019 and December 31, 2018, respectively, in which the fair value of the security was less than the amortized cost of the security.

The U.S. Government and agency obligations owned are either direct obligations of the U.S. Government or guaranteed by the U.S. Government, therefore the contractual cash flows are guaranteed and as a result the unrealized losses in this portfolio are not considered other than temporarily impaired.

The Company continually monitors its corporate bond portfolio and at this time this portfolio has minimal default risk because the corporate bond in this portfolio is rated investment grade.

At September 30, 2019, the Company has the intent and ability to retain its investment securities in an unrealized loss position until the decline in value has recovered or the security has matured.


15



3. Loans Receivable and Allowance for Loan Losses

The following table sets forth a summary of the loan portfolio at September 30, 2019 and December 31, 2018:
(In thousands)
September 30, 2019
 
December 31, 2018
Real estate loans:
 
 
 
Residential
$
159,193

 
$
178,079

Commercial
1,096,856

 
1,094,066

Construction
89,878

 
73,191

 
1,345,927

 
1,345,336

 
 
 
 
Commercial business
218,145

 
258,978

 
 
 
 
Consumer
260

 
412

Total loans
1,564,332

 
1,604,726

 
 
 
 
Allowance for loan losses
(13,212
)
 
(15,462
)
Deferred loan origination fees, net
(2,135
)
 
(2,497
)
Unamortized loan premiums
3

 
8

Loans receivable, net
$
1,548,988

 
$
1,586,775


Lending activities are conducted principally in the New York metropolitan area and throughout Connecticut, with the majority in Fairfield and New Haven Counties of Connecticut, and consist of commercial real estate loans, commercial business loans and, to a lesser degree, a variety of consumer loans. Loans may also be granted for the construction of commercial properties. The majority of commercial mortgage loans are collateralized by first or second mortgages on real estate.

Risk management

The Company has established credit policies applicable to each type of lending activity in which it engages. The Company evaluates the creditworthiness of each customer and extends credit of up to 80% of the market value of the collateral, depending on the borrower's creditworthiness and the type of collateral. The borrower’s ability to service the debt is monitored on an ongoing basis. Real estate is the primary form of collateral. Other important forms of collateral are business assets, time deposits and marketable securities. While collateral provides assurance as a secondary source of repayment, the Company ordinarily requires the primary source of repayment for commercial loans to be based on the borrower’s ability to generate continuing cash flows. In the fourth quarter of 2017, management made the strategic decision to cease the origination of residential mortgage loans. At the beginning of the third quarter 2019, the Company no longer offered home equity loans or lines of credit. The Company’s policy for residential lending generally required that the amount of the loan may not exceed 80% of the original appraised value of the property. In certain situations, the amount may have exceeded 80% LTV either with private mortgage insurance being required for that portion of the residential loan in excess of 80% of the appraised value of the property or where secondary financing is provided by a housing authority program second mortgage, a community’s low/moderate income housing program, or a religious or civic organization.

Credit quality of loans and the allowance for loan losses

Management segregates the loan portfolio into defined segments, which are used to develop and document a systematic method for determining the Company's allowance for loan losses. The portfolio segments are segregated based on loan types and the underlying risk factors present in each loan type. Such risk factors are periodically reviewed by management and revised as deemed appropriate.


16



The Company's loan portfolio is segregated into the following portfolio segments:

Residential Real Estate: This portfolio segment consists of first mortgage loans secured by one-to-four family owner occupied residential properties for personal use located in the Company's market area. This segment also includes home equity loans and home equity lines of credit secured by owner occupied one-to-four family residential properties. Loans of this type were written at a combined maximum of 80% of the appraised value of the property and the Company requires a first or second lien position on the property. These loans can be affected by economic conditions and the values of the underlying properties.

Commercial Real Estate: This portfolio segment includes loans secured by commercial real estate, multi-family dwellings and investor-owned one-to-four family dwellings. Loans secured by commercial real estate generally have larger loan balances and more credit risk than owner occupied one-to-four family mortgage loans.

Construction: This portfolio segment includes commercial construction loans for commercial development projects, including condominiums, apartment buildings, and single family subdivisions as well as office buildings, retail and other income producing properties and land loans, which are loans made with land as collateral. Construction and land development financing generally involves greater credit risk than long-term financing on improved, owner-occupied or leased real estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the value of the property at completion of construction compared to the estimated cost (including interest) of construction and other assumptions. If the estimate of construction cost proves to be inaccurate, the Company may be required to advance additional funds beyond the amount originally committed in order to protect the value of the property. Moreover, if the estimated value of the completed project proves to be inaccurate, the borrower may hold a property with a value that is insufficient to assure full repayment through sale or refinance. Construction loans also expose the Company to the risks that improvements will not be completed on time in accordance with specifications and projected costs and that repayment will depend on the successful operation or sale of the properties, which may cause some borrowers to be unable to continue paying debt service, which exposes the Company to greater risk of non-payment and loss.

Commercial Business: This portfolio segment includes commercial business loans secured by assignments of corporate assets and personal guarantees of the business owners. Commercial business loans generally have higher interest rates and shorter terms than other loans, but they also have increased difficulty of loan monitoring and a higher risk of default since their repayment generally depends on the successful operation of the borrower’s business.

Consumer: This portfolio segment includes loans secured by savings or certificate accounts, automobiles, as well as unsecured personal loans and overdraft lines of credit. This type of loan entails greater risk than residential mortgage loans, particularly in the case of loans that are unsecured or secured by assets that depreciate rapidly.


17



Allowance for loan losses

The following tables set forth the activity in the Company’s allowance for loan losses for the three and nine months ended September 30, 2019 and 2018, by portfolio segment:
 
Residential Real Estate
 
Commercial Real Estate
 
Construction
 
Commercial Business
 
Consumer
 
Total
 
(In thousands)
Three Months Ended September 30, 2019
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
923

 
$
9,910

 
$
259

 
$
2,797

 
$
1

 
$
13,890

Charge-offs
(78
)
 
(594
)
 

 
(748
)
 
(57
)
 
(1,477
)
Recoveries

 

 

 
2

 
24

 
26

(Credit) Provisions
(54
)
 
778

 
2

 
14

 
33

 
773

Ending balance
$
791

 
$
10,094

 
$
261

 
$
2,065

 
$
1

 
$
13,212


 
Residential Real Estate
 
Commercial Real Estate
 
Construction
 
Commercial Business
 
Consumer
 
Total
 
(In thousands)
Three Months Ended September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
750

 
$
14,185

 
$
481

 
$
3,589

 
$
1

 
$
19,006

Charge-offs
(16
)
 

 

 

 
(2
)
 
(18
)
Recoveries

 

 

 

 
1

 
1

Provisions (Credits)
349

 
(114
)
 
(122
)
 
208

 
1

 
322

Ending balance
$
1,083

 
$
14,071

 
$
359

 
$
3,797

 
$
1

 
$
19,311

 
Residential Real Estate
 
Commercial Real Estate
 
Construction
 
Commercial Business
 
Consumer
 
Total
 
(In thousands)
Nine Months Ended September 30, 2019
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
857

 
$
11,562

 
$
140

 
$
2,902

 
$
1

 
$
15,462

Charge-offs
(875
)
 
(594
)
 

 
(884
)
 
(70
)
 
(2,423
)
Recoveries

 

 

 
18

 
28

 
46

Provisions (Credit)
809

 
(874
)
 
121

 
29

 
42

 
127

Ending balance
$
791

 
$
10,094

 
$
261

 
$
2,065

 
$
1

 
$
13,212

 
Residential Real Estate
 
Commercial Real Estate
 
Construction
 
Commercial Business
 
Consumer
 
Total
 
(In thousands)
Nine Months Ended September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
1,721

 
$
12,777

 
$
907

 
$
3,498

 
$
1

 
$
18,904

Charge-offs
(72
)
 
(18
)
 

 
(96
)
 
(62
)
 
(248
)
Recoveries

 

 

 
4

 
6

 
10

(Credits) Provisions
(566
)
 
1,312

 
(548
)
 
391

 
56

 
645

Ending balance
$
1,083

 
$
14,071

 
$
359

 
$
3,797

 
$
1

 
$
19,311


18



Loans evaluated for impairment and the related allowance for loan losses as of September 30, 2019 and December 31, 2018 were as follows:
 
Portfolio
 
Allowance
 
(In thousands)
September 30, 2019
 
 
 
Loans individually evaluated for impairment:
 
 
 
Residential real estate
$
4,056

 
$

Commercial real estate
6,062

 
109

Commercial business
3,542

 
144

Subtotal
13,660

 
253

Loans collectively evaluated for impairment:
 
 
 
Residential real estate
155,137

 
791

Commercial real estate
1,090,794

 
9,985

Construction
89,878

 
261

Commercial business
214,603

 
1,921

Consumer
260

 
1

Subtotal
1,550,672

 
12,959

 
 
 
 
Total
$
1,564,332

 
$
13,212


 
Portfolio
 
Allowance
 
(In thousands)
December 31, 2018
 
 
 
Loans individually evaluated for impairment:
 
 
 
Residential real estate
$
6,534

 
$
233

Commercial real estate
6,383

 

Commercial business
6,155

 
133

Consumer
3

 

Subtotal
19,075

 
366

Loans collectively evaluated for impairment:
 
 
 
Residential real estate
171,545

 
624

Commercial real estate
1,087,683

 
11,562

Construction
73,191

 
140

Commercial business
252,823

 
2,769

Consumer
409

 
1

Subtotal
1,585,651

 
15,096

 
 
 
 
Total
$
1,604,726

 
$
15,462



19



Credit quality indicators

To measure credit risk for the loan portfolios, the Company employs a credit risk rating system. This risk rating represents an assessed level of a loan’s risk based on the character and creditworthiness of the borrower/guarantor, the capacity of the borrower to adequately service the debt, any credit enhancements or additional sources of repayment, and the quality, value and coverage of the collateral, if any.

The objectives of the Company’s risk rating system are to provide the Board of Directors and senior management with an objective assessment of the overall quality of the loan portfolio, to promptly and accurately identify loans with well-defined credit weaknesses so that timely action can be taken to minimize a potential credit loss, to identify relevant trends affecting the collectability of the loan portfolio, to isolate potential problem areas and to provide essential information for determining the adequacy of the allowance for loan losses. The Company’s credit risk rating system has nine grades, with each grade corresponding to a progressively greater risk of default. Risk ratings of (1) through (5) are "pass" categories and risk ratings of (6) through (9) are criticized asset categories as defined by the regulatory agencies.

A “special mention” (6) credit has a potential weakness which, if uncorrected, may result in a deterioration of the repayment prospects or inadequately protect the Company’s credit position at some time in the future. “Substandard” (7) loans are credits that have a well-defined weakness or weaknesses that jeopardize the full repayment of the debt. An asset rated “doubtful” (8) has all the weaknesses inherent in a substandard asset and which, in addition, make collection or liquidation in full highly questionable and improbable when considering existing facts, conditions, and values. Loans classified as “loss” (9) are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value; rather, it is not practical or desirable to defer writing-off this asset even though partial recovery may be made in the future.

Risk ratings are assigned as necessary to differentiate risk within the portfolio. They are reviewed on an ongoing basis through the annual loan review process performed by Company personnel, normal renewal activity and the quarterly watchlist and watched asset report process. They are revised to reflect changes in the borrower's financial condition and outlook, debt service coverage capability, repayment performance, collateral value and coverage, as well as other considerations. In addition to internal review at multiple points, outsourced loan review opines on risk ratings with regard to the sample of loans their review covers.


20



The following tables present credit risk ratings by loan segment as of September 30, 2019 and December 31, 2018:
 
Commercial Credit Quality Indicators
 
September 30, 2019
 
December 31, 2018
 
Commercial Real Estate
 
Construction
 
Commercial Business
 
Total
 
Commercial Real Estate
 
Construction
 
Commercial Business
 
Total
 
(In thousands)
Pass
$
1,072,187

 
$
89,878

 
$
189,416

 
$
1,351,481

 
$
1,084,695

 
$
73,191

 
$
237,933

 
$
1,395,819

Special Mention
18,607

 

 
25,187

 
43,794

 
2,988

 

 
14,890

 
17,878

Substandard
6,062

 

 
918

 
6,980

 
2,516

 

 
2,592

 
5,108

Doubtful

 

 
2,624

 
2,624

 
3,867

 

 
3,563

 
7,430

Loss