0001419536-20-000103 | 10-Q | XBRL Viewer

Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2020	Nov. 05, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	001-38671
Entity Registrant Name	CAPITAL BANCORP INC
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	52-2083046
Entity Address, Address Line One	2275 Research Boulevard
Entity Address, Address Line Two	Suite 600
Entity Address, City or Town	Rockville
Entity Address, State or Province	MD
Entity Address, Postal Zip Code	20850
City Area Code	301
Local Phone Number	468-8848
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	CBNK
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		13,680,974
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001419536
Current Fiscal Year End Date	--12-31

Consolidated Balance Sheets - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Assets
Cash and due from banks	$ 20,138,000	$ 10,530,000
Interest bearing deposits at other financial institutions	179,789,000	102,447,000
Federal funds sold	5,590,000	1,847,000
Total cash and cash equivalents	205,517,000	114,824,000
Investment securities available for sale	53,992,000	60,828,000
Restricted investments	3,958,000	3,966,000
Loans held for sale	137,717,000	71,030,000
Small Business Administration Payroll Protection Program (“SBA-PPP”) loans receivable, net of fees	233,349,000	0
Portfolio loans receivable, net of deferred fees and costs and net of allowance for loan losses of $22,016 and $13,301	1,222,597,000	1,157,820,000
Premises and equipment, net	5,021,000	6,092,000
Accrued interest receivable	7,678,000	4,770,000
Deferred income taxes	3,589,000	4,263,000
Foreclosed real estate	3,326,000	2,384,000
Other assets	2,285,000	2,518,000
Total assets	1,879,029,000	1,428,495,000
Deposits
Noninterest-bearing, including related party balances of $20,821 and $16,009	596,239,000	291,777,000
Interest-bearing, including related party balances of $126,703 and $125,304	1,065,972,000	933,644,000
Total deposits	1,662,211,000	1,225,421,000
Federal Home Loan Bank advances	22,222,000	32,222,000
Other borrowed funds	17,516,000	15,423,000
Accrued interest payable	1,523,000	1,801,000
Other liabilities	26,180,000	20,297,000
Total liabilities	1,729,652,000	1,295,164,000
Stockholders' equity
Common stock, $.01 par value; 49,000,000 shares authorized; 13,682,198 and 13,894,842 issued and outstanding	137,000	139,000
Additional paid-in capital	49,866,000	51,561,000
Retained earnings	97,580,000	81,618,000
Accumulated other comprehensive income	1,794,000	13,000
Total stockholders' equity	149,377,000	133,331,000
Total liabilities and stockholders' equity	$ 1,879,029,000	$ 1,428,495,000

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Allowance for loan losses	$ 22,016	$ 13,301
Noninterest-bearing deposits, related party	20,821	16,009
Interest-bearing deposits, related party	$ 126,703	$ 125,304
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	49,000,000	49,000,000
Common stock, shares issued (in shares)	13,682,198	13,894,842
Common stock, shares outstanding (in shares)	13,682,198	13,894,842

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Interest income
Loans, including fees	$ 24,836	$ 21,900	$ 67,520	$ 59,548
Investment securities available for sale	273	215	929	707
Federal funds sold and other	80	239	484	706
Total interest income	25,189	22,354	68,933	60,961
Interest expense
Deposits, includes payments to related parties of $184 and $862 for the three and nine months ended September 30, 2020, respectively, and $479 and $1,448 for the three and nine months ended September 30, 2019, respectively.	2,634	3,449	9,201	9,887
Borrowed funds	516	721	1,382	1,615
Total interest expense	3,150	4,170	10,583	11,502
Net interest income	22,039	18,184	58,350	49,459
Provision for loan losses	3,500	1,071	9,209	1,869
Net interest income after provision for loan losses	18,539	17,113	49,141	47,590
Noninterest income
Gain on sale of investment securities available for sale	0	0	0	26
Other fees and charges	895	116	2,058	320
Total noninterest income	21,146	7,221	41,626	17,240
Noninterest expenses
Salaries and employee benefits	12,609	9,238	32,362	24,136
Occupancy and equipment	1,328	1,111	3,658	3,307
Professional fees	1,307	724	2,971	1,952
Data processing	7,880	4,193	17,664	11,222
Advertising	633	584	1,875	1,557
Loan processing	1,264	634	2,451	1,279
Foreclosed real estate expenses, net	9	7	137	57
Other operating	3,089	1,737	7,547	5,258
Total noninterest expenses	28,119	18,228	68,665	48,768
Income before income taxes	11,566	6,106	22,102	16,062
Income tax expense	3,128	1,625	5,968	4,239
Net income	$ 8,438	$ 4,481	$ 16,134	$ 11,823
Basic earnings per share (in dollars per share)	$ 0.61	$ 0.33	$ 1.17	$ 0.86
Diluted earnings per share (in dollars per share)	$ 0.61	$ 0.32	$ 1.17	$ 0.85
Weighted average common shares outstanding:
Basic (in shares)	13,794,628	13,727,519	13,829,341	13,714,260
Diluted (in shares)	13,794,628	13,986,382	13,832,176	13,921,995
Service charges on deposits
Noninterest income
Noninterest income	$ 119	$ 146	$ 378	$ 382
Credit card fees
Noninterest income
Noninterest income	5,773	2,059	10,694	5,521
Mortgage banking revenue
Noninterest income
Noninterest income	$ 14,359	$ 4,900	$ 28,496	$ 10,991

Consolidated Statements of Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Deposits, related party	$ 184	$ 479	$ 862	$ 1,448

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Net income	$ 8,438	$ 4,481	$ 16,134	$ 11,823
Other comprehensive income (loss):
Unrealized gain on investment securities available for sale	37	57	2,458	867
Reclassification of realized gain on sale of investment securities available for sale	0	0	0	(26)
Unrealized loss on cash flow hedging derivative	0	0	0	(5)
Other comprehensive income (loss)	37	57	2,458	836
Income tax expense relating to the items above	(10)	(16)	(677)	(230)
Other comprehensive income	27	41	1,781	606
Comprehensive income	$ 8,465	$ 4,522	$ 17,915	$ 12,429

Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Cumulative Effect, Period of Adoption, Adjustment	Cumulative Effect, Period of Adoption, Adjustment Retained Earnings
Beginning balance (in shares) at Dec. 31, 2018		13,672,479
Beginning balance at Dec. 31, 2018	$ 114,564	$ 137	$ 49,321	$ 65,701	$ (595)	$ (54)	$ (54)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	3,319			3,319
Unrealized gain on investment securities available for sale, net of income taxes	270				270
Unrealized loss on cash flow hedging derivative, net of income taxes	(5)				(5)
Stock options exercised (in shares)		21,706
Stock options exercised	107	$ 0	155	(48)
Shares issued as compensation (in shares)		18,380
Shares issued as compensation	150	$ 0	150
Stock-based compensation	199		199
Ending balance (in shares) at Mar. 31, 2019		13,712,565
Ending balance at Mar. 31, 2019	118,550	$ 137	49,825	68,918	(330)
Beginning balance (in shares) at Dec. 31, 2018		13,672,479
Beginning balance at Dec. 31, 2018	114,564	$ 137	49,321	65,701	(595)	$ (54)	$ (54)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	11,823
Ending balance (in shares) at Sep. 30, 2019		13,782,538
Ending balance at Sep. 30, 2019	127,829	$ 138	50,585	77,095	11
Beginning balance (in shares) at Mar. 31, 2019		13,712,565
Beginning balance at Mar. 31, 2019	118,550	$ 137	49,825	68,918	(330)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	4,023			4,023
Unrealized gain on investment securities available for sale, net of income taxes	300				300
Stock options exercised (in shares)		6,100
Stock options exercised	46	$ 0	47	(1)
Stock-based compensation	199		199
Ending balance (in shares) at Jun. 30, 2019		13,718,665
Ending balance at Jun. 30, 2019	123,118	$ 137	50,071	72,940	(30)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	4,481			4,481
Unrealized gain on investment securities available for sale, net of income taxes	41				41
Stock options exercised (in shares)		85,003
Stock options exercised	253	$ 1	578	(326)
Stock-based compensation	199		199
Shares repurchased and retired (in shares)		(21,130)
Shares repurchased and retired	(263)	$ 0	(263)
Ending balance (in shares) at Sep. 30, 2019		13,782,538
Ending balance at Sep. 30, 2019	$ 127,829	$ 138	50,585	77,095	11
Beginning balance (in shares) at Dec. 31, 2019	13,894,842	13,894,842
Beginning balance at Dec. 31, 2019	$ 133,331	$ 139	51,561	81,618	13
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	2,934			2,934
Unrealized gain on investment securities available for sale, net of income taxes	754				754
Stock options exercised (in shares)		34,015
Stock options exercised	100	$ 0	263	(163)
Stock-based compensation	244		244
Shares repurchased and retired (in shares)		(112,134)
Shares repurchased and retired	(1,283)	$ (1)	(1,282)
Ending balance (in shares) at Mar. 31, 2020		13,816,723
Ending balance at Mar. 31, 2020	$ 136,080	$ 138	50,786	84,389	767
Beginning balance (in shares) at Dec. 31, 2019	13,894,842	13,894,842
Beginning balance at Dec. 31, 2019	$ 133,331	$ 139	51,561	81,618	13
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	$ 16,134
Ending balance (in shares) at Sep. 30, 2020	13,682,198	13,682,198
Ending balance at Sep. 30, 2020	$ 149,377	$ 137	49,866	97,580	1,794
Beginning balance (in shares) at Mar. 31, 2020		13,816,723
Beginning balance at Mar. 31, 2020	136,080	$ 138	50,786	84,389	767
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	4,761			4,761
Unrealized gain on investment securities available for sale, net of income taxes	1,000				1,000
Shares issued as compensation (in shares)		3,000
Shares issued as compensation	37	$ 0	37
Stock-based compensation	244		243	1
Shares repurchased and retired (in shares)		(1,500)
Shares repurchased and retired	(14)	$ 0	(14)
Ending balance (in shares) at Jun. 30, 2020		13,818,223
Ending balance at Jun. 30, 2020	142,108	$ 138	51,052	89,151	1,767
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	8,438			8,438
Unrealized gain on investment securities available for sale, net of income taxes	27				27
Stock options exercised (in shares)		5,175
Stock options exercised	57	$ 0	57	0
Stock-based compensation	248		249	(1)
Shares repurchased and retired (in shares)		(141,200)
Shares repurchased and retired	$ (1,501)	$ (1)	(1,492)	(8)
Ending balance (in shares) at Sep. 30, 2020	13,682,198	13,682,198
Ending balance at Sep. 30, 2020	$ 149,377	$ 137	$ 49,866	$ 97,580	$ 1,794

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities
Net income	$ 16,134,000	$ 11,823,000
Adjustments to reconcile net income to net cash used by operating activities:
Provision for loan losses	9,209,000	1,869,000
Provision for losses on mortgage loans sold	475,000	128,000
Provision for off balance sheet credit risk	233,000	138,000
Amortization on investments, net	216,000	113,000
Depreciation and amortization	1,401,000	844,000
Stock-based compensation expense	736,000	597,000
Director and employee compensation paid in stock	37,000	150,000
Deferred income tax benefit	(3,000)	(132,000)
Amortization of debt issuance expense	139,000	23,000
Gain on sale of securities available for sale	0	(26,000)
Mortgage banking revenue	(28,496,000)	(10,991,000)
Proceeds from sales of loans held for sale	888,454,000	367,986,000
Originations of loans held for sale	(926,645,000)	(407,451,000)
Changes in assets and liabilities:
Accrued interest receivable	(2,908,000)	(174,000)
Prepaid income taxes and taxes payable	0	(263,000)
Other assets	233,000	(1,312,000)
Accrued interest payable	(278,000)	548,000
Other liabilities	5,175,000	1,601,000
Net cash used in operating activities	(35,888,000)	(34,529,000)
Cash flows from investing activities
Purchases of securities available for sale	(2,000,000)	(8,202,000)
Maturities, calls and principal paydowns of securities available for sale	11,078,000	15,535,000
Proceeds from sale of securities available for sale	0	3,280,000
Sales (purchases) of restricted investments	8,000	(1,504,000)
Increase in SBA-PPP loans receivable, net	(233,349,000)	0
Increase in portfolio loans receivable, net	(74,928,000)	(140,468,000)
Disposals (purchases) of premises and equipment, net	(330,000)	622,000
Proceeds from sales of foreclosed real estate	0	50,000
Net cash used in investing activities	(299,521,000)	(130,687,000)
Net increase (decrease) in:
Noninterest-bearing deposits	304,461,000	51,119,000
Interest-bearing deposits	132,328,000	106,085,000
Securities sold under agreements to repurchase	0	(3,332,000)
Federal funds purchased	0	(2,000,000)
Federal Home Loan Bank advances, net	(10,000,000)	33,556,000
Other borrowed funds	1,954,000	0
Repurchase of common stock	(2,798,000)	(263,000)
Proceeds from exercise of stock options	157,000	406,000
Net cash provided by financing activities	426,102,000	185,571,000
Net increase in cash and cash equivalents	90,693,000	20,355,000
Cash and cash equivalents, beginning of year	114,824,000	34,723,000
Cash and cash equivalents, end of period	205,517,000	55,078,000
Noncash activities:
Loans transferred to foreclosed real estate	942,000	57,000
Change in unrealized gains on investments	2,458,000	841,000
Change in fair value of cash flow hedging derivative	0	(5,000)
Establishment of lease right-of-use asset	0	5,158,000
Establishment of lease liability	0	5,358,000
Cash paid during the period for:
Taxes	7,350,000	4,406,000
Interest	$ 10,861,000	$ 10,954,000

Nature of Business and Basis of Presentation

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Nature of Business and Basis of Presentation

Capital Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 1 - Nature of Business and Basis of Presentation

Nature of operations:

Capital Bancorp, Inc. is a Maryland corporation and bank holding company (the “Company”) for Capital Bank, N.A. (the “Bank”). The Company's primary operations are conducted by the Bank, which operates branches in Rockville, Columbia and North Bethesda, Maryland, Reston, Virginia, and the District of Columbia. The Bank is principally engaged in the business of investing in commercial, real estate, and credit card loans and attracting deposits. The Company originates residential mortgages for sale in the secondary market through Capital Bank Home Loans (“CBHL”), our residential mortgage banking arm, and issues credit cards through OpenSky^®, a secured, digitally-driven nationwide credit card platform.

The Company formed Church Street Capital, LLC (“Church Street Capital”) in 2014 to provide short-term secured real estate financing to Washington, D.C. area investors and developers that may not meet all Bank credit criteria. At September 30, 2020, Church Street Capital had loans totaling $4.3 million.

In addition, the Company owns all of the stock of Capital Bancorp (MD) Statutory Trust I (the “Trust”). The Trust is a special purpose non-consolidated entity organized for the sole purpose of issuing trust preferred securities.

Basis of presentation:

The accompanying consolidated financial statements include the activity of the Company and its wholly-owned subsidiaries, the Bank and Church Street Capital. All intercompany transactions have been eliminated in consolidation. The Company reports its activities as four business segments. In determining the appropriateness of segment definition, the Company considers components of the business about which financial information is available and regularly evaluated relative to resource allocation and performance assessment. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and conform to general practices within the banking industry.

Risks and Uncertainties

The novel coronavirus (“COVID-19”) spread rapidly across the world in the first quarter of 2020 and was declared a pandemic by the World Health Organization. In March 2020, the government and private sector responses to contain its spread began to significantly affect operations and continue to do so through the current period. It is likely operations will continue to be adversely affected. The duration and extent of the effects over longer terms cannot be reasonably estimated at this time. The risks and uncertainties resulting from the pandemic which are most likely to affect future earnings, cash flows and financial condition in future quarters primarily include the nature and duration of the financial effects felt by our customers and the concomitant impact on the customers' ability to fulfill their financial obligations to the Company; as well as the potential decline of real estate values resulting from market disruption which may impair the values of collateral-dependent loans. Accordingly, estimates used in the preparation of the financial statements may be subject to significant adjustments in future periods. The greater the duration and severity of the pandemic, the more likely that results will be materially impacted by its effects.

Significant Accounting Policies:

The preparation of consolidated financial statements in accordance with GAAP requires estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. The primary reference point for the estimates is historical experience and assumptions believed to be reasonable regarding the carrying value of certain assets and

liabilities that are not readily available from other sources. Estimates are evaluated on an ongoing basis. Actual results may materially differ from these estimates under different assumptions or conditions.

Cash and cash equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from financial institutions, interest bearing deposits with financial institutions and federal funds sold. Generally, federal funds are sold for one-day periods.

Investment securities

Investment securities are classified as available for sale and carried at fair value with unrealized gains and losses included in stockholders’ equity on an after-tax basis. Premiums and discounts on investment securities are amortized or accreted using the interest method. Changes in the fair value of debt securities available for sale are included in stockholders’ equity as unrealized gains and losses, net of the related tax effect. Unrealized losses are periodically reviewed to determine whether the loss represents an other than temporary impairment. Any unrealized losses judged to be other than a temporary impairment are charged to income.

Loans held for sale

Mortgage loans originated and intended for sale are recorded at fair value, determined individually, as of the balance sheet date. Fair value is determined based on outstanding investor commitments, or in the absence of such commitments, based on current investor yield requirements. Gains and losses on loan sales are determined by the specific-identification method. The Company’s current practice is to sell residential mortgage loans on a servicing released basis, and, therefore, it has no servicing rights recorded for the value of such servicing. Interest on loans held for sale is credited to income based on the principal amounts outstanding.

Upon sale and delivery, loans are legally isolated from the Company and the Company has no ability to restrict or constrain the ability of third‑party investors to pledge or exchange the mortgage loans. The Company does not have the entitlement or ability to repurchase the mortgage loans or unilaterally cause third‑party investors to put the mortgage loans back to the Company. Unrealized and realized gains on loan sales are determined using the specific-identification method and are recognized through mortgage banking activity in the Consolidated Statements of Income.

The Company elected to measure loans held for sale at fair value to better align reported results with the underlying economic changes in value of the loans on the Company’s balance sheet.

Small Business Administration Paycheck Protection Program

The Small Business Administration Paycheck Protection Program (“SBA-PPP”) is one of the centerpieces of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was passed on March 27, 2020 in response to the outbreak of coronavirus (“COVID-19”) and was supplemented with subsequent legislation. Overseen by the United States (“U.S.”) Treasury Department, the SBA-PPP offered cash-flow assistance to nonprofit and small business employers through guaranteed loans for expenses incurred between February 15, 2020, and August 8, 2020. Borrowers are eligible for forgiveness of principal and accrued interest on SBA-PPP loans to the extent that the proceeds are used to cover eligible payroll costs, interest costs, rent, and utility costs over a period between eight and 24-weeks after the loan is made as

long as the borrower retains its employees and their compensation levels. The CARES Act authorized the SBA to fully guarantee these loans.

Due to the unique nature of these provisions, SBA-PPP loans have been disclosed as a separate balance sheet item. Origination fees received by the SBA are capitalized into the carrying amount of the loans. The deferred fee income, net of origination costs, is recognized over the life of the loan as an adjustment to yield using the effective interest method. SBA-PPP loans receivable as of September 30, 2020 totaled $238.7 million with $5.4 million in net unearned fees and generated $1.5 million of interest income during the third quarter and $2.5 million for the nine months ended September 30, 2020.

Loans and the Allowance for Loan Losses

Loans are stated at the principal amount outstanding, adjusted for deferred origination fees and costs, discounts on loans acquired, and the allowance for loan losses. Interest is accrued based on the loan principal balances and stated interest rates. Origination fees and costs are recognized as an adjustment to the related loan yield using approximate interest methods. The Company discontinues the accrual of interest when any portion of the principal and interest is 90 days past due, or when it is probable that not all principal and interest payments will be collected, and collateral is insufficient to discharge the debt in full. Generally, interest payments on nonaccrual loans are recorded as a reduction of the principal balance.

Loans are considered impaired when, based on current information, management believes the Company will not collect all principal and interest payments according to contractual terms. Generally, loans are reviewed for impairment when the risk grade for a loan is downgraded to a classified asset category. The loans are evaluated for appropriate classification, accrual, impairment, and troubled debt restructure (“TDR”) status. If collection of principal is evaluated as doubtful, all payments are applied to principal. A modification of a loan is considered a TDR when a borrower is experiencing financial difficulty and the modification constitutes a concession; however, the CARES Act provides financial institutions optional temporary relief from TDR and impairment accounting for certain loan modifications related to the COVID-19 pandemic. Under Section 401 of the CARES Act, banks may elect not to categorize loan modifications as TDRs if they are (1) related to COVID-19; (2) executed on a loan that was not more than 30 days past due as of December 31, 2019; and (3) executed between March 1, 2020, and the earlier of (A) 60 days after the date of termination of the National Emergency or (B) December 31, 2020.

All other short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, are not TDRs. This includes short-term modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented.

Loans are generally charged-off in part or in full when management determines the loan to be uncollectible. Factors for charge-off that may be considered include: repayments deemed to be projected beyond reasonable time frames, client bankruptcy and lack of assets, and/or collateral deficiencies.

The allowance for loan losses is estimated to adequately provide for probable future losses on existing loans. The allowance consists of specific and general components. For loans that are classified as impaired, an allowance is established when the collateral value, if the loan is collateral dependent, or the discounted cash flows of the impaired loan is lower than the carrying value of that loan. The general component covers pools of nonclassified loans and is based on historical loss experience adjusted with qualitative factors such as: trends in volume and terms of loans; levels of, and trends in, delinquencies and non-accruals; effects of any changes in lending policies, experience, ability and depth of management; national and local economic

trends and conditions (with a specific evaluation of COVID-19 impact); commitments and concentrations of credit; changes in the quality of the Company’s loan review system; and the volume of loans with identified incomplete financial documentation. Actual loan performance may differ materially from those estimates. A loss is recognized as a charge to the allowance when management believes that collection of the loan is unlikely. Collections of loans previously charged off are added to the allowance at the time of recovery.

The Company determines the allowance for loan losses based on the accumulation of various components that are calculated independently in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 450 for pools of loans, and ASC 310 for TDRs and for individually evaluated loans. The process for determining an appropriate allowance for loan losses is based on a comprehensive and consistently applied analysis of the loan portfolio. The analysis considers all significant factors that affect the collectibility of the portfolio and supports the credit losses estimated by this process. It is important to recognize that the related process, methodology, and underlying assumptions require a substantial degree of judgment. Additional disclosure on the allowance for loan losses, qualitative factors, and the potential COVID-19 impact can be found in Part II, Item 1A - Risk Factors and Note 5 - Portfolio Loans Receivable.

The allowance for loan losses for SBA-PPP loans were separately evaluated given the explicit government guarantee. This analysis, which incorporated historical experience with similar SBA guarantees and underwriting, concluded the likelihood of loss was remote and therefore no allowance for loan losses was assigned to these loans.

Premises and equipment

Premises and equipment are stated at cost less accumulated depreciation and amortization over two to seven years. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related property. Leasehold improvements are amortized over the estimated useful lives of the improvements, approximately ten years, or the term of the lease, whichever is less. Expenditures for maintenance, repairs, and minor replacements are charged to noninterest expenses as incurred.

Leases

During the first quarter of 2019, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 applies a right-of-use (“ROU”) model that requires a lessee to record, for all leases with a lease term of more than 12 months, an asset representing its right to use the underlying asset and a liability to make lease payments. The Company elected to apply the package of practical expedients permitting entities to not reassess: 1) whether any expired or existing contracts are or contain leases; 2) the lease classification for any expired or existing leases; and 3) initial direct costs for any existing leases. Additionally, as provided by ASU 2016-02, the Company elected not to apply the recognition requirements of ASC 842 to short-term leases, defined as leases with a term of 12 months or less, and to recognize the lease payments in net income on short-term leases on a straight-line basis over the lease term.

The Company is largely accounting for existing operating leases consistent with prior guidance except for the incremental balance sheet recognition for leases. The adoption of this standard resulted in the Company recognizing lease right-of-use assets and related lease liabilities totaling $5.5 million and $5.6 million, respectively, as of January 1, 2019. The difference between the lease assets and the lease liabilities was $146 thousand of deferred rent, which was reclassified to lease liabilities, and the remainder was recorded as an adjustment to retained earnings in the amount of $54 thousand. The adoption of this ASU

did not have a significant impact on the Company’s consolidated statement of income. Additional information is included in Note 7 - Leases.

Derivative Financial Instruments

The Company enters into commitments to fund residential mortgage loans (interest rate locks) with the intention of selling them in the secondary market. The Company also enters into forward sales agreements for certain funded loans and loan commitments. The Company records unfunded commitments intended for loans held for sale and forward sales agreements at fair value with changes in fair value recorded as a component of mortgage banking revenue. Loans originated and intended for sale in the secondary market are carried at fair value. For pipeline loans which are not pre-sold to an investor, the Company endeavors to manage the interest rate risk on rate lock commitments by entering into forward sale contracts, whereby the Company obtains the right to deliver securities to investors in the future at a specified price. Such contracts are accounted for as derivatives and are recorded at fair value as derivative assets or liabilities, with changes in fair value recorded in mortgage banking revenue.

The Company accounts for derivative instruments and hedging activities according to guidelines established in ASC 815-10, Accounting for Derivative Instruments and Hedging Activities, as amended. The Company recognizes all derivatives as either assets or liabilities on the balance sheet and measures those instruments at fair value. Changes in fair value of derivatives designated and accounted for as cash flow hedges, to the extent they are effective as hedges, are recorded in other comprehensive income, net of deferred taxes. Any hedge ineffectiveness would be recognized in the income statement line item pertaining to the hedged item.

Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction between market participants at the measurement date. The degree of management judgment involved in determining the fair value of a financial instrument is dependent upon the availability of quoted market prices or observable market inputs. For financial instruments that are traded actively and have quoted market prices or observable market inputs, there is minimal subjectivity involved in measuring fair value. However, when quoted market prices or observable market inputs are not fully available, significant management judgment may be necessary to estimate fair value. In developing our fair value estimates, we endeavor to maximize the use of observable inputs and minimize the use of unobservable inputs.

The fair value hierarchy defines Level 1 valuations as those based on quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 valuations include inputs based on quoted prices for similar assets or liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 valuations are based on at least one significant assumption not observable in the market, or significant management judgment or estimation, some of which may be internally developed.

Financial assets that are recorded at fair value on a recurring basis include investment securities available for sale, loans held for sale, and derivative financial instruments. Financial liabilities that are recorded at fair value on a recurring basis are comprised of derivative financial instruments. Additional information is included in Note 8 - Fair Value.

Income Taxes

Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are recognized when it is deemed more likely than not that the benefits of such deferred income taxes will be realized.

Earnings per share:

Earnings per share is computed by dividing net income available to common stockholders by the weighted average number of shares outstanding. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares outstanding, adjusted for the dilutive effect of stock options and restricted stock using the treasury stock method. At September 30, 2020 and 2019, there were 510,550 and 273,600 stock options, respectively, that were not included in the calculation as their effect would have been anti-dilutive.

Comprehensive income:

The Company reports as comprehensive income all changes in stockholders' equity during the year from sources other than stockholders. Other comprehensive income refers to all components (income, expenses, gains, and losses) of comprehensive income that are excluded from net income.

The Company's only component of other comprehensive income is unrealized gains and losses on investment securities available for sale, net of income taxes. Information concerning the Company's accumulated other comprehensive income as of September 30, 2020 and December 31, 2019 is as follows:



(in thousands)	September 30, 2020			December 31, 2019
Unrealized gains on securities available for sale	$	2,475		$	18
Deferred tax expense	(681		)	(5		)
Total accumulated comprehensive income	$	1,794		$	13

Recently issued accounting pronouncements:

In June 2016, the FASB issued guidance to change the accounting for credit losses and modify the impairment model for certain debt securities. The FASB subsequently revised ASU 2019-10, which delayed implementation and the new standard is now effective for fiscal years beginning after December 15, 2022, including the interim periods within those fiscal years. The Company expects the provisions of this standard to impact the Company’s consolidated financial statements, in particular, the level of the reserve for credit losses. The Company is continuing to evaluate the extent of the potential impact and expects that portfolio composition and economic conditions at the time of adoption will be a factor.

In November 2019, the FASB issued guidance to defer the effective dates for private companies, not-for-profit organizations, and certain smaller reporting companies to apply standards on current expected loan losses (“CECL”). The new effective dates will be fiscal years beginning after December 15, 2022 including interim periods within those fiscal years. In addition, the FASB issued guidance that addresses issues raised by stakeholders during the implementation of ASU 2016-13, “Financial Instruments-loan losses (Topic 326): Measurement of Loan Losses on Financial Instruments.” The amendments affect a variety of Topics in the Accounting Standards Codification. For entities that have not yet adopted the amendments in ASU 2016-13, the amendments are effective for fiscal years beginning after December 15, 2022 including interim periods

within those fiscal years. Early adoption is permitted in any interim period as long as an entity has adopted the amendments in ASU 2016-13. While the Company does not expect these amendments to have a material effect on its financial statements, the Company is continuing to evaluate the extent of the potential impact and expects that portfolio composition and economic conditions at the time of adoption will be a factor.

The Company will apply the ASU through a cumulative-effect adjustment to beginning retained earnings in the year of adoption. While early adoption has been permitted since first quarter 2019, the Company does not expect to early adopt. In addition to the allowance for loan losses, the Company will also record an allowance for credit losses on debt securities instead of applying the impairment model currently utilized. The amount of the adjustments will be impacted by each portfolio’s composition and credit quality at the adoption date as well as economic conditions and forecasts at that time.

In April 2019, the FASB issued codification improvements to ASU Topic 326 - Financial Instruments - Credit Loss, Topic 815 - Derivatives and Hedging, and Subtopic 825-10 - Financial Instruments. This codification provides technical corrections and clarifies issues related to fair value hedges. The Company early adopted this guidance upon issuance, and it did not have a material impact on the Company’s consolidated financial statements.

In December 2019, the FASB issued guidance to simplify accounting for income taxes by removing specific technical exceptions that often produce information investors have a hard time understanding. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The amendments are effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company does not expect these amendments to have a material effect on its financial statements.

In March 2020, the FASB issued ASU 2020-04, ‘‘Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This new ASU provides temporary optional expedients and exceptions to GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. Entities can elect not to apply certain modification accounting requirements to contracts affected by reference rate reform, if certain criteria are met. Entities that make such elections would not have to remeasure contracts at the modification date or reassess a previous accounting determination. Entities can elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met. This amended guidance and the ability to elect its temporary optional expedients and exceptions are effective for the Company as of March 12, 2020 through December 31, 2022. The adoption of ASU 2020-04 Topic 848 is not expected to have a material impact on the Company’s financial statements.

In March 2020, various regulatory agencies, including the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation, (“agencies”) issued an interagency statement on loan modifications and reporting for financial institutions working with customers affected by COVID-19. The interagency statement was effective immediately and impacted accounting for loan modifications. Under ASC 310-40, “Receivables - Troubled Debt Restructurings by Creditors,” a restructuring of debt constitutes a TDR if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The agencies confirmed with the FASB that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, are not to be considered TDRs. Such modifications include short-term (e.g., six months) modifications that include payment deferrals of (i) principal and interest, (ii) interest only and (iii) principal only, fee waivers, extensions of repayment terms, or other delays in payment that are deemed insignificant.

Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. As of September 30, 2020, the Company has offered payment deferrals for commercial and consumer customers for up to six months. The loan modifications offered to borrowers provided the borrower with payment relief in the form of reduced or deferred payments for up to 90 days (six months in selected instances) during which time interest is continuing to accrue. It is not expected that this interagency guidance will have a material impact on the Company’s financial statements; however, this impact cannot be quantified at this time.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company's financial position, results of operations or cash flows.

Reclassifications:

Certain reclassifications have been made to amounts reported in prior periods to conform to the current period presentation. The reclassifications had no material effect on net income or total stockholders' equity.

Subsequent Events:

Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Non-recognized subsequent events are events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date. Management has reviewed events through the date the financial statements were available to be issued and no subsequent events occurred requiring accrual or disclosure.

Cash and Cash Equivalents	9 Months Ended
Cash and Cash Equivalents	Sep. 30, 2020
Cash and Cash Equivalents [Abstract]
Cash and Cash Equivalents	Cash and Cash Equivalents Cash and cash equivalents include cash and amounts due from banks, interest bearing deposits and federal funds sold. The Bank is required by regulations to maintain an average cash reserve balance based on a percentage of deposits. At September 30, 2020 and December 31, 2019, the requirements were satisfied by amounts on deposit with the Federal Reserve Bank and cash on hand.

Investment Securities

9 Months Ended

Sep. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Investment Securities

The amortized cost and estimated fair value of investment securities at September 30, 2020 and December 31, 2019 are summarized as follows:



Investment Securities Available for Sale
(in thousands)
September 30, 2020	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Municipal	$	513	$	31	$	—		$	544
Corporate	4,260		35		(25		)	4,270
Mortgage-backed securities	46,744		2,434		—			49,178
Total	$	51,517	$	2,500	$	(25	)	$	53,992

December 31, 2019
U.S. government-sponsored enterprises	$	1,000	$	—	$	(1	)	$	999
Municipal	515		13		—			528
Corporate	2,542		46		(23		)	2,565
Mortgage-backed securities	56,754		117		(135		)	56,736
Total	$	60,811	$	176	$	(159	)	$	60,828

There were no securities sold during the nine months ended September 30, 2020. Proceeds from sales of securities sold during the nine months ended September 30, 2019 were $3.3 million. The investment sales resulted in realized gains of $26 thousand for the three and nine months ended September 30, 2019.

Information related to unrealized losses in the investment portfolio as of September 30, 2020 and December 31, 2019 is summarized as follows:



Investment Securities Unrealized Losses
(in thousands)	Less than 12 months					12 months or longer					Total
September 30, 2020	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate	$	—	$	—		$	235	$	(25	)	$	235	$	(25	)
Total	$	—	$	—		$	235	$	(25	)	$	235	$	(25	)

December 31, 2019
U.S. government-sponsored enterprises	$	—	$	—		$	999	$	(1	)	$	999	$	(1	)
Corporate	—		—			519		(23		)	519		(23		)
Mortgage-backed securities	21,487		(78		)	5,246		(57		)	26,733		(135		)
Total	$	21,487	$	(78	)	$	6,764	$	(81	)	$	28,251	$	(159	)

At September 30, 2020, there was one corporate security that had been in an unrealized loss position for greater than twelve months. At December 31, 2019, there was one U.S. government-sponsored enterprises security, two corporate securities, and four mortgage-backed securities that had been in a loss position for greater than twelve months. Management believes that the unrealized loss at September 30, 2020 resulted from changes in the interest rates and current market conditions and not as a result of credit deterioration. Management has the ability and the intent to hold these investment securities until maturity or until they recover in value.

A summary of pledged securities at September 30, 2020 and December 31, 2019 is shown below:



Pledged Securities
	September 30, 2020				December 31, 2019
(in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Federal Home Loan Bank	$	47,257	$	49,722	$	1,508	$	1,522

Contractual maturities of U.S. government-sponsored enterprises, municipals and corporate securities at September 30, 2020 and December 31, 2019 are shown below. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call premiums or prepayment penalties.



Contractual Maturities
	September 30, 2020				December 31, 2019
(in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within one year	$	—	$	—	$	1,542	$	1,518
Over one to five years	—		—		—		—
Over five to ten years	4,000		4,035		2,000		2,046
Over ten years	773		779		515		528
Mortgage-backed securities⁽¹⁾	46,744		49,178		56,754		56,736
Total	$	51,517	$	53,992	$	60,811	$	60,828

_______________

⁽¹⁾

Mortgage-backed securities contractually repay in monthly installments.

SBA-PPP Loans Receivable

9 Months Ended

Sep. 30, 2020

Loans and Leases Receivable Disclosure [Line Items]

SBA-PPP Loans Receivable

Portfolio Loans Receivable

Major classifications of portfolio loans as are as follows:



Portfolio Loan Categories
(in thousands)	September 30, 2020			December 31, 2019
Real estate:
Residential	$	422,698		$	427,926
Commercial	372,972			348,091
Construction	227,662			198,702
Commercial and Industrial	134,889			151,109
Credit card	84,964			46,412
Other consumer	2,268			1,285
Portfolio loans receivable, gross	1,245,453			1,173,525
Deferred origination fees, net	(840		)	(2,404		)
Allowance for loan losses	(22,016		)	(13,301		)
Portfolio loans receivable, net	$	1,222,597		$	1,157,820

The Company makes loans to customers located primarily in the Washington, D.C. and Baltimore, Maryland metropolitan areas. Although the loan portfolio is diversified, its performance is influenced by the regional economy. The Company’s loan categories, excluding SBA-PPP loans, previously discussed in Note 4, are described below.

Residential Real Estate Loans. One-to-four family mortgage loans are primarily secured by owner-occupied primary residences and, to a lesser extent, investor owned residences. Residential loans are originated through the commercial sales teams and Capital Bank Home Loans division. Residential loans also include home equity lines of credit. Owner-occupied residential real estate loans usually have fixed rates for five or seven years and adjust on an annual basis after the initial term based on a typical maturity of 30 years. Investor residential real estate loans are generally based on 25-year terms with a balloon payment due after five years. Generally, the required minimum debt service coverage ratio is 115%. Residential real estate loans have represented a stable and growing portion of our loan portfolio.

Commercial Real Estate Loans. Commercial real estate loans are originated on owner-occupied and non-owner-occupied properties. These loans may be more adversely affected by conditions in the real estate markets or in the general economy. Commercial loans that are secured by owner-occupied commercial real

estate and primarily collateralized by operating cash flows are also included in this category of loans. As of September 30, 2020, there were approximately $181.2 million of owner-occupied commercial real estate loans, representing approximately 48.6% of the commercial real estate portfolio. Commercial real estate loan terms are generally extended for 10 years or less and amortize generally over 25 years or less. The interest rates on commercial real estate loans generally have initial fixed rate terms that adjust typically at 5 years. Origination fees are routinely charged for services. Personal guarantees from the principal owners of the business are generally required, supported by a review of the principal owners’ personal financial statements and global debt service obligations. The properties securing the portfolio are somewhat diverse in terms and type. This diversity may help reduce the exposure to adverse economic events that affect any single industry.

Construction Loans. Construction loans are offered within the Company’s Washington, D.C. and Baltimore, Maryland metropolitan operating areas to builders primarily for the construction of single-family homes and condominium and townhouse conversions or renovations and, to a lesser extent, to individuals. Construction loans typically have terms of 12 to 18 months. The Company frequently transitions the end purchaser to permanent financing or re-underwriting and sale into the secondary market through Capital Bank Home Loans. According to underwriting standards, the ratio of loan principal to collateral value, as established by an independent appraisal, cannot exceed 75% for investor-owned and 80% for owner-occupied properties. Exceptions are sometimes made. Semi-annual stress testing of the construction loan portfolio is conducted, and underlying real estate conditions are closely monitored as well as trends of sales outcomes versus underwriting valuations as part of ongoing risk management efforts. The borrowers’ progress in construction buildout is closely monitored to enforce the original underwriting guidelines for construction milestones and completion timelines.

Commercial and Industrial. In addition to other loan products, general commercial loans, including commercial lines of credit, working capital loans, term loans, equipment financing, letters of credit and other loan products are offered, primarily in target markets, and underwritten based on each borrower’s ability to service debt from income. These loans are primarily made based on the identified cash flows of the borrower and secondarily, on the underlying collateral provided by the borrower. Most commercial business loans are secured by a lien on general business assets including, among other things, available real estate, accounts receivable, promissory notes, inventory and equipment. Personal guaranties from the borrower or other principal are generally obtained.

Credit Cards. Our OpenSky® credit card division provides credit cards on a nationwide basis to under-banked populations and those looking to rebuild their credit scores through a fully digital and mobile platform. Substantially all of the lines of credit are secured by a noninterest bearing demand account at the Bank in an amount equal to the full credit limit of the credit card. In addition, using a proprietary scoring model, which considers credit score and repayment history (typically a minimum of six months of on-time repayments, but ultimately determined on a case-by-case basis), the Bank has recently begun to offer certain customers an unsecured line in excess of their secured line of credit. Approximately $81.1 million and $43.3 million of the credit card balances were secured by savings deposits held by the Company as of September 30, 2020 and December 31, 2019, respectively.

Other Consumer Loans. To a limited extent and typically as an accommodation to existing customers, personal consumer loans, such as, for example, term loans, car loans or boat loans are offered.

Loans acquired through acquisitions are recorded at estimated fair value on their purchase date with no carryover of the related allowance for loan losses. In estimating the fair value of loans acquired, certain factors were considered, including the remaining lives of the acquired loans, payment history, estimated prepayments, estimated loss ratios, estimated value of the underlying collateral, and the net present value

of cash flows expected. Discounts on loans that were not considered impaired at acquisition were recorded as an accretable discount, which will be recognized in interest income over the terms of the related loans. For loans considered to be impaired, the difference between the contractually required payments and expected cash flows was recorded as a nonaccretable discount. The remaining nonaccretable discounts on loans acquired was $285 thousand as of September 30, 2020 and December 31, 2019. Loans with nonaccretable discounts had carrying values of $841 thousand and $864 thousand as of September 30, 2020 and December 31, 2019.

Accretable discounts on loans acquired is summarized as follows:



Accretable Discounts on Loans Acquired
(in thousands)	For the Three Months Ended						For the Nine Months Ended
	September 30, 2020			September 30, 2019			September 30, 2020			September 30, 2019
Accretable discount at beginning of period	$	230		$	424		$	429		$	438
Less: Accretion and payoff of loans	(4		)	(13		)	(203		)	(27		)
Other changes, net	—			22			—			22
Accretable discount at end of period	$	226		$	433		$	226		$	433

The following tables set forth the changes in the allowance for loan losses and an allocation of the allowance for loan losses by class for the three and nine months ended September 30, 2020 and September 30, 2019.



Allowance for Loan Losses
(in thousands)	Beginning Balance		Provision for Loan Losses		Charge-Offs			Recoveries		Ending Balance
Three Months Ended September 30, 2020	Beginning Balance		Provision for Loan Losses		Charge-Offs			Recoveries		Ending Balance
Real estate:
Residential	$	6,244	$	737	$	—		$	—	$	6,981
Commercial	5,232		1,158		—			—		6,390
Construction	3,952		537		—			—		4,489
Commercial and Industrial	1,743		671		(85		)	—		2,329
Credit card	1,497		376		(85		)	7		1,795
Other consumer	11		21		—			—		32
Total	$	18,679	$	3,500	$	(170	)	$	7	$	22,016

Nine Months Ended September 30, 2020
Real estate:
Residential	$	4,135	$	2,846	$	—		$	—	$	6,981
Commercial	3,573		2,817		—			—		6,390
Construction	2,668		1,821		—			—		4,489
Commercial and Industrial	1,548		892		(111		)	—		2,329
Credit card	1,367		811		(408		)	25		1,795
Other consumer	10		22		—			—		32
Total	$	13,301	$	9,209	$	(519	)	$	25	$	22,016



Allowance for Loan Losses
(in thousands)	Beginning Balance		Provision for Loan Losses			Charge-Offs			Recoveries		Ending Balance
Three Months Ended September 30, 2019	Beginning Balance		Provision for Loan Losses			Charge-Offs			Recoveries		Ending Balance
Real estate:
Residential	$	3,915	$	269		$	(8	)	$	—	$	4,176
Commercial	3,116		307			—			3		3,426
Construction	2,204		173			—			—		2,377
Commercial and Industrial	1,472		140			(54		)	—		1,558
Credit card	1,199		181			(120		)	3		1,263
Other consumer	7		1			—			—		8
Total	$	11,913	$	1,071		$	(182	)	$	6	$	12,808

Nine Months Ended September 30, 2019
Real estate:
Residential	$	3,541	$	643		$	(8	)	$	—	$	4,176
Commercial	3,003		413			—			10		3,426
Construction	2,093		284			—			—		2,377
Commercial and Industrial	1,578		62			(82		)	—		1,558
Credit card	1,084		468			(303		)	14		1,263
Other consumer	9		(1		)	—			—		8
Total	$	11,308	$	1,869		$	(393	)	$	24	$	12,808

The following tables present, by class and reserving methodology, the allocation of the allowance for loan losses and the gross investment in loans. The allowance for loan losses consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The general component covers non-impaired loans and is based on historical loss experience adjusted for current economic factors.



Allowance for Loan Loss Composition
(in thousands)	Allowance for Loan Losses Ending Balance Evaluated for Impairment:				Outstanding Portfolio Loan Balances Evaluated for Impairment:
September 30, 2020	Individually		Collectively		Individually		Collectively
Real estate:
Residential	$	—	$	6,981	$	1,626	$	421,072
Commercial	—		6,390		1,466		371,506
Construction	—		4,489		6,464		221,198
Commercial and Industrial	574		1,755		1,395		133,494
Credit card	—		1,795		—		84,964
Other consumer	—		32		—		2,268
Total	$	574	$	21,442	$	10,951	$	1,234,502

December 31, 2019
Real estate:
Residential	$	—	$	4,135	$	2,192	$	425,734
Commercial	—		3,572		1,433		346,658
Construction	—		2,668		—		198,702
Commercial and Industrial	119		1,429		474		150,635
Credit card	—		1,368		—		46,412
Other consumer	—		10		—		1,285
Total	$	119	$	13,182	$	4,099	$	1,169,426

Past due loans, segregated by age and class of loans, as of September 30, 2020 and December 31, 2019 were as follows:



Portfolio Loans Past Due
	Loans 30-89 Days Past Due		Loans 90 or More Days Past Due		Total Past Due Loans		Current Loans		Total Portfolio Loans		Accruing Loans 90 or More Days Past Due		Non-accrual Loans
(in thousands)
September 30, 2020
Real estate:
Residential	$	708	$	1,580	$	2,288	$	420,410	$	422,698	$	—	$	1,626
Commercial	3,331		1,695		5,026		367,946		372,972		230		1,466
Construction	4,750		589		5,339		222,323		227,662		297		6,464
Commercial and Industrial	425		323		748		134,141		134,889		—		1,395
Credit card	7,698		2		7,700		77,264		84,964		2		—
Other consumer	—		—		—		2,268		2,268		—		—
Total	$	16,912	$	4,189	$	21,101	$	1,224,352	$	1,245,453	$	529	$	10,951

Acquired loans included in total above	$	—	$	576	$	576	$	5,141	$	5,717	$	230	$	393

December 31, 2019
Real estate:
Residential	$	704	$	2,436	$	3,140	$	424,786	$	427,926	$	374	$	2,192
Commercial	275		1,671		1,946		346,145		348,091		237		1,433
Construction	756		—		756		197,946		198,702		—		—
Commercial and Industrial	172		353		525		150,584		151,109		—		474
Credit card	5,526		8		5,534		40,878		46,412		9		—
Other consumer	—		—		—		1,285		1,285		—		—
Total	$	7,433	$	4,468	$	11,901	$	1,161,624	$	1,173,525	$	620	$	4,099

Acquired loans included in total above	$	305	$	1,243	$	1,548	$	4,873	$	6,421	$	464	$	880

Loans secured by a one-to-four family residential property in the process of foreclosure at September 30, 2020 and December 31, 2019 amounted to $11 thousand and $481 thousand, respectively.

Impaired loans were as follows:



Impaired Loans
	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
(in thousands)
September 30, 2020
Real estate:
Residential	$	1,843	$	1,626	$	—	$	1,626	$	—
Commercial	1,594		1,466		—		1,466		—
Construction	6,566		6,464		—		6,464		—
Commercial and Industrial	1,548		—		1,395		1,395		574
Credit card	—		—		—		—		—
Other consumer	—		—		—		—		—
Total	$	11,551	$	9,556	$	1,395	$	10,951	$	574

Acquired loans included above	$	552	$	393	$	—	$	393	$	—

December 31, 2019
Real estate:
Residential	$	2,309	$	2,192	$	—	$	2,192	$	—
Commercial	1,477		1,433		—		1,433		—
Construction	—		—		—		—		—
Commercial and Industrial	574		201		273		474		119
Credit card	—		—		—		—		—
Other consumer	—		—		—		—		—
Total	$	4,360	$	3,826	$	273	$	4,099	$	119

Acquired loans included above	$	1,148	$	880	$	—	$	880	$	—

The following tables summarize interest recognized on impaired loans:



Interest Recognized on Impaired Loans
	For the Three Months Ended September 30, 2020				For the Nine Months Ended September 30, 2020
(in thousands)	Average Recorded Investment		Interest Recognized		Average Recorded Investment		Interest Recognized
Real estate:
Residential	$	1,860	$	1	$	1,864	$	1
Commercial	1,616		8		1,618		10
Construction	6,531		169		6,462		178
Commercial and Industrial	1,813		54		1,841		54
Total	$	11,820	$	232	$	11,785	$	243



Interest Recognized on Impaired Loans
	For the Three Months Ended September 30, 2019				For the Nine Months Ended September 30, 2019
(in thousands)	Average Recorded Investment		Interest Recognized		Average Recorded Investment		Interest Recognized
Real estate:
Residential	$	2,612	$	8	$	2,620	$	11
Commercial	1,160		2		1,161		2
Construction	2,133		—		2,132		—
Commercial and Industrial	1,003		8		1,005		9
Total	$	6,908	$	18	$	6,918	$	22

Impaired loans include loans acquired on which management has recorded a nonaccretable discount.

Credit quality indicators

As part of the ongoing monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to the risk grade of loans, the level of classified loans, net charge-offs, nonperforming loans, and the general economic conditions in the Company’s market.

The Company utilizes a risk grading matrix to assign a risk grade to each of its loans. A description of the general characteristics of loans characterized as classified is as follows:

Special Mention

A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

Borrowers may exhibit poor liquidity and leverage positions resulting from generally negative cash flow or negative trends in earnings. Access to alternative financing may be limited to finance companies for business borrowers and may be unavailable for commercial real estate borrowers.

Substandard

A substandard loan is inadequately protected by the current financial condition and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Borrowers may exhibit recent or unexpected unprofitable operations, an inadequate debt service coverage ratio, or marginal liquidity and capitalization. These loans require more intense supervision by Company management.

Doubtful

A doubtful loan has all the weaknesses inherent as a substandard loan with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

The following table presents the balances of classified loans based on the risk grade. Classified loans include Special Mention, Substandard, and Doubtful loans:



Portfolio Loan Classifications
(in thousands)	Pass⁽¹⁾		Special Mention		Substandard		Doubtful		Total
September 30, 2020
Real estate:
Residential	$	411,957	$	8,245	$	2,496	$	—	$	422,698
Commercial	361,474		10,243		1,255		—		372,972
Construction	220,086		1,112		6,464		—		227,662
Commercial and Industrial	121,707		10,965		2,217		—		134,889
Credit card	84,964		—		—		—		84,964
Other consumer	2,268		—		—		—		2,268
Portfolio loans receivable, gross	$	1,202,456	$	30,565	$	12,432	$	—	$	1,245,453

December 31, 2019
Real estate:
Residential	$	425,661	$	—	$	2,265	$	—	$	427,926
Commercial	340,313		6,345		1,433		—		348,091
Construction	198,702		—		—		—		198,702
Commercial and Industrial	145,178		4,505		1,426		—		151,109
Credit card	46,412		—		—		—		46,412
Other consumer	1,285		—		—		—		1,285
Portfolio loans receivable, gross	$	1,157,551	$	10,850	$	5,124	$	—	$	1,173,525

________________________


⁽¹⁾	Category includes loans graded exceptional, very good, good, satisfactory and pass/watch, in addition to credit cards and consumer credits that are not graded.

Impaired loans also include certain loans that have been modified in TDRs where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Company’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after confirmation of the borrower’s sustained repayment performance for a reasonable period, generally six months.

Modifications such as payment deferrals through September 30, 2020 have been short term in nature and are included in the population of loans deferred and have not impacted TDRs. The status of TDRs is as follows:



Troubled Debt Restructurings
(in thousands)	Number of Contracts	Recorded Investment
September 30, 2020	Number of Contracts	Performing		Nonperforming		Total
Real estate:
Residential	3	$	—	$	145	$	145
Commercial and Industrial	2	—		301		301
Total	5	$	—	$	446	$	446

Acquired loans included in total above	3	$	—	$	145	$	145

December 31, 2019
Real estate:
Residential	3	$	—	$	145	$	145
Commercial and Industrial	2	—		314		314
Total	5	$	—	$	459	$	459

Acquired loans included in total above	3	$	—	$	145	$	145

There were no new TDRs in the nine months ended September 30, 2020. The Company had no defaulted TDR loans over the last twelve months.

Outstanding loan commitments were as follows:



Loan Commitments
(in thousands)	September 30, 2020		December 31, 2019
Unused lines of credit
Real Estate:
Residential	$	10,360	$	13,754
Residential - Home Equity	29,838		26,407
Commercial	17,069		31,411
Construction	116,714		114,999
Commercial and Industrial	46,537		36,442
Secured credit card	95,854		37,517
Personal	634		43
Total	$	317,006	$	260,573

Commitments to originate residential loans held for sale	$	9,823	$	2,646

Letters of credit	$	5,102	$	5,305

Lines of credit are agreements to lend to a customer as long as there is no violation of any condition of the contract. Lines of credit generally have variable interest rates. Such lines do not represent future cash requirements because it is unlikely that all customers will draw upon their lines in full at any time. Loan commitments generally have variable interest rates, fixed expiration dates, and may require payment of a

fee.

The Company's maximum exposure to credit loss in the event of nonperformance by the customer is the contractual amount of the credit commitment. Loan commitments and lines of credit are generally made on the same terms, including collateral, as outstanding loans. Management is not aware of any accounting loss to be incurred by funding these loan commitments. The Company maintains an estimated reserve for off balance sheet items such as unfunded lines of credit, which is reflected in other liabilities, with changes being charged to or released from operating expense. Activity for this account is as follows for the periods presented:



Off Balance Sheet Reserve
(in thousands)	For the Three Months Ended				For the Nine Months Ended
	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
Balance at beginning of period	$	1,271	$	1,146	$	1,226	$	1,053
Provision for off balance sheet credit commitments	188		45		233		138
Balance at end of period	$	1,459	$	1,191	$	1,459	$	1,191

The Company makes representations and warranties that loans sold to investors meet their program's guidelines and that the information provided by the borrowers is accurate and complete. In the event of a default on a loan sold, the investor may have the right to make a claim for losses due to document deficiencies, program compliance, early payment default, and fraud or borrower misrepresentations.

The Company maintains an estimated reserve for potential losses on mortgage loans sold, which is reflected in other liabilities, with changes being charged to or released from operating expense. Activity in this reserve is as follows for the periods presented:



Mortgage Loan Put-back Reserve
(in thousands)	For the Three Months Ended					For the Nine Months Ended
	September 30, 2020		September 30, 2019			September 30, 2020			September 30, 2019
Balance at beginning of period	$	823	$	527		$	575		$	501
Provision for mortgage loan put backs	213		61			475			128
Charge-offs	—		(48		)	(14		)	(89		)
Balance at end of period	$	1,036	$	540		$	1,036		$	540

Paycheck Protection Program

Loans and Leases Receivable Disclosure [Line Items]

SBA-PPP Loans Receivable

Pursuant to the CARES Act, the SBA-PPP provides forgivable loans to small businesses to enable them to maintain payroll, hire back employees who have been laid off, and cover applicable overhead. SBA-PPP loans have an interest rate of 1%, have 2 and 5 year terms, and carry a 100% guarantee of the SBA.

The allowance for loan losses for SBA-PPP loans was separately evaluated given the explicit government guarantee. This analysis, which incorporated historical experience with similar SBA guarantees and underwriting, concluded the likelihood of loss was remote and therefore no allowance for loan losses was assigned to these loans.

At September 30, 2020, SBA-PPP loans receivable, which totaled $238.7 million, are all rated as pass credits, not past due, nonaccrual, TDR, or otherwise impaired. Unearned net fees associated with the SBA-PPP loans amounted to $5.4 million at September 30, 2020. There were no outstanding commitments to extend additional SBA-PPP loans at September 30, 2020.

Portfolio Loans Receivable

9 Months Ended

Sep. 30, 2020

Receivables [Abstract]

Portfolio Loans Receivable

Major classifications of portfolio loans as are as follows:



Portfolio Loan Categories
(in thousands)	September 30, 2020			December 31, 2019
Real estate:
Residential	$	422,698		$	427,926
Commercial	372,972			348,091
Construction	227,662			198,702
Commercial and Industrial	134,889			151,109
Credit card	84,964			46,412
Other consumer	2,268			1,285
Portfolio loans receivable, gross	1,245,453			1,173,525
Deferred origination fees, net	(840		)	(2,404		)
Allowance for loan losses	(22,016		)	(13,301		)
Portfolio loans receivable, net	$	1,222,597		$	1,157,820

Other Consumer Loans. To a limited extent and typically as an accommodation to existing customers, personal consumer loans, such as, for example, term loans, car loans or boat loans are offered.

Accretable discounts on loans acquired is summarized as follows:



Accretable Discounts on Loans Acquired
(in thousands)	For the Three Months Ended						For the Nine Months Ended
	September 30, 2020			September 30, 2019			September 30, 2020			September 30, 2019
Accretable discount at beginning of period	$	230		$	424		$	429		$	438
Less: Accretion and payoff of loans	(4		)	(13		)	(203		)	(27		)
Other changes, net	—			22			—			22
Accretable discount at end of period	$	226		$	433		$	226		$	433



Allowance for Loan Losses
(in thousands)	Beginning Balance		Provision for Loan Losses		Charge-Offs			Recoveries		Ending Balance
Three Months Ended September 30, 2020	Beginning Balance		Provision for Loan Losses		Charge-Offs			Recoveries		Ending Balance
Real estate:
Residential	$	6,244	$	737	$	—		$	—	$	6,981
Commercial	5,232		1,158		—			—		6,390
Construction	3,952		537		—			—		4,489
Commercial and Industrial	1,743		671		(85		)	—		2,329
Credit card	1,497		376		(85		)	7		1,795
Other consumer	11		21		—			—		32
Total	$	18,679	$	3,500	$	(170	)	$	7	$	22,016

Nine Months Ended September 30, 2020
Real estate:
Residential	$	4,135	$	2,846	$	—		$	—	$	6,981
Commercial	3,573		2,817		—			—		6,390
Construction	2,668		1,821		—			—		4,489
Commercial and Industrial	1,548		892		(111		)	—		2,329
Credit card	1,367		811		(408		)	25		1,795
Other consumer	10		22		—			—		32
Total	$	13,301	$	9,209	$	(519	)	$	25	$	22,016



Allowance for Loan Losses
(in thousands)	Beginning Balance		Provision for Loan Losses			Charge-Offs			Recoveries		Ending Balance
Three Months Ended September 30, 2019	Beginning Balance		Provision for Loan Losses			Charge-Offs			Recoveries		Ending Balance
Real estate:
Residential	$	3,915	$	269		$	(8	)	$	—	$	4,176
Commercial	3,116		307			—			3		3,426
Construction	2,204		173			—			—		2,377
Commercial and Industrial	1,472		140			(54		)	—		1,558
Credit card	1,199		181			(120		)	3		1,263
Other consumer	7		1			—			—		8
Total	$	11,913	$	1,071		$	(182	)	$	6	$	12,808

Nine Months Ended September 30, 2019
Real estate:
Residential	$	3,541	$	643		$	(8	)	$	—	$	4,176
Commercial	3,003		413			—			10		3,426
Construction	2,093		284			—			—		2,377
Commercial and Industrial	1,578		62			(82		)	—		1,558
Credit card	1,084		468			(303		)	14		1,263
Other consumer	9		(1		)	—			—		8
Total	$	11,308	$	1,869		$	(393	)	$	24	$	12,808



Allowance for Loan Loss Composition
(in thousands)	Allowance for Loan Losses Ending Balance Evaluated for Impairment:				Outstanding Portfolio Loan Balances Evaluated for Impairment:
September 30, 2020	Individually		Collectively		Individually		Collectively
Real estate:
Residential	$	—	$	6,981	$	1,626	$	421,072
Commercial	—		6,390		1,466		371,506
Construction	—		4,489		6,464		221,198
Commercial and Industrial	574		1,755		1,395		133,494
Credit card	—		1,795		—		84,964
Other consumer	—		32		—		2,268
Total	$	574	$	21,442	$	10,951	$	1,234,502

December 31, 2019
Real estate:
Residential	$	—	$	4,135	$	2,192	$	425,734
Commercial	—		3,572		1,433		346,658
Construction	—		2,668		—		198,702
Commercial and Industrial	119		1,429		474		150,635
Credit card	—		1,368		—		46,412
Other consumer	—		10		—		1,285
Total	$	119	$	13,182	$	4,099	$	1,169,426

Past due loans, segregated by age and class of loans, as of September 30, 2020 and December 31, 2019 were as follows:



Portfolio Loans Past Due
	Loans 30-89 Days Past Due		Loans 90 or More Days Past Due		Total Past Due Loans		Current Loans		Total Portfolio Loans		Accruing Loans 90 or More Days Past Due		Non-accrual Loans
(in thousands)
September 30, 2020
Real estate:
Residential	$	708	$	1,580	$	2,288	$	420,410	$	422,698	$	—	$	1,626
Commercial	3,331		1,695		5,026		367,946		372,972		230		1,466
Construction	4,750		589		5,339		222,323		227,662		297		6,464
Commercial and Industrial	425		323		748		134,141		134,889		—		1,395
Credit card	7,698		2		7,700		77,264		84,964		2		—
Other consumer	—		—		—		2,268		2,268		—		—
Total	$	16,912	$	4,189	$	21,101	$	1,224,352	$	1,245,453	$	529	$	10,951

Acquired loans included in total above	$	—	$	576	$	576	$	5,141	$	5,717	$	230	$	393

December 31, 2019
Real estate:
Residential	$	704	$	2,436	$	3,140	$	424,786	$	427,926	$	374	$	2,192
Commercial	275		1,671		1,946		346,145		348,091		237		1,433
Construction	756		—		756		197,946		198,702		—		—
Commercial and Industrial	172		353		525		150,584		151,109		—		474
Credit card	5,526		8		5,534		40,878		46,412		9		—
Other consumer	—		—		—		1,285		1,285		—		—
Total	$	7,433	$	4,468	$	11,901	$	1,161,624	$	1,173,525	$	620	$	4,099

Acquired loans included in total above	$	305	$	1,243	$	1,548	$	4,873	$	6,421	$	464	$	880

Loans secured by a one-to-four family residential property in the process of foreclosure at September 30, 2020 and December 31, 2019 amounted to $11 thousand and $481 thousand, respectively.

Impaired loans were as follows:



Impaired Loans
	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
(in thousands)
September 30, 2020
Real estate:
Residential	$	1,843	$	1,626	$	—	$	1,626	$	—
Commercial	1,594		1,466		—		1,466		—
Construction	6,566		6,464		—		6,464		—
Commercial and Industrial	1,548		—		1,395		1,395		574
Credit card	—		—		—		—		—
Other consumer	—		—		—		—		—
Total	$	11,551	$	9,556	$	1,395	$	10,951	$	574

Acquired loans included above	$	552	$	393	$	—	$	393	$	—

December 31, 2019
Real estate:
Residential	$	2,309	$	2,192	$	—	$	2,192	$	—
Commercial	1,477		1,433		—		1,433		—
Construction	—		—		—		—		—
Commercial and Industrial	574		201		273		474		119
Credit card	—		—		—		—		—
Other consumer	—		—		—		—		—
Total	$	4,360	$	3,826	$	273	$	4,099	$	119

Acquired loans included above	$	1,148	$	880	$	—	$	880	$	—

The following tables summarize interest recognized on impaired loans:



Interest Recognized on Impaired Loans
	For the Three Months Ended September 30, 2020				For the Nine Months Ended September 30, 2020
(in thousands)	Average Recorded Investment		Interest Recognized		Average Recorded Investment		Interest Recognized
Real estate:
Residential	$	1,860	$	1	$	1,864	$	1
Commercial	1,616		8		1,618		10
Construction	6,531		169		6,462		178
Commercial and Industrial	1,813		54		1,841		54
Total	$	11,820	$	232	$	11,785	$	243



Interest Recognized on Impaired Loans
	For the Three Months Ended September 30, 2019				For the Nine Months Ended September 30, 2019
(in thousands)	Average Recorded Investment		Interest Recognized		Average Recorded Investment		Interest Recognized
Real estate:
Residential	$	2,612	$	8	$	2,620	$	11
Commercial	1,160		2		1,161		2
Construction	2,133		—		2,132		—
Commercial and Industrial	1,003		8		1,005		9
Total	$	6,908	$	18	$	6,918	$	22

Impaired loans include loans acquired on which management has recorded a nonaccretable discount.

Credit quality indicators

The Company utilizes a risk grading matrix to assign a risk grade to each of its loans. A description of the general characteristics of loans characterized as classified is as follows:

Special Mention

Substandard

Doubtful

The following table presents the balances of classified loans based on the risk grade. Classified loans include Special Mention, Substandard, and Doubtful loans:



Portfolio Loan Classifications
(in thousands)	Pass⁽¹⁾		Special Mention		Substandard		Doubtful		Total
September 30, 2020
Real estate:
Residential	$	411,957	$	8,245	$	2,496	$	—	$	422,698
Commercial	361,474		10,243		1,255		—		372,972
Construction	220,086		1,112		6,464		—		227,662
Commercial and Industrial	121,707		10,965		2,217		—		134,889
Credit card	84,964		—		—		—		84,964
Other consumer	2,268		—		—		—		2,268
Portfolio loans receivable, gross	$	1,202,456	$	30,565	$	12,432	$	—	$	1,245,453

December 31, 2019
Real estate:
Residential	$	425,661	$	—	$	2,265	$	—	$	427,926
Commercial	340,313		6,345		1,433		—		348,091
Construction	198,702		—		—		—		198,702
Commercial and Industrial	145,178		4,505		1,426		—		151,109
Credit card	46,412		—		—		—		46,412
Other consumer	1,285		—		—		—		1,285
Portfolio loans receivable, gross	$	1,157,551	$	10,850	$	5,124	$	—	$	1,173,525

________________________


⁽¹⁾	Category includes loans graded exceptional, very good, good, satisfactory and pass/watch, in addition to credit cards and consumer credits that are not graded.



Troubled Debt Restructurings
(in thousands)	Number of Contracts	Recorded Investment
September 30, 2020	Number of Contracts	Performing		Nonperforming		Total
Real estate:
Residential	3	$	—	$	145	$	145
Commercial and Industrial	2	—		301		301
Total	5	$	—	$	446	$	446

Acquired loans included in total above	3	$	—	$	145	$	145

December 31, 2019
Real estate:
Residential	3	$	—	$	145	$	145
Commercial and Industrial	2	—		314		314
Total	5	$	—	$	459	$	459

Acquired loans included in total above	3	$	—	$	145	$	145

There were no new TDRs in the nine months ended September 30, 2020. The Company had no defaulted TDR loans over the last twelve months.

Outstanding loan commitments were as follows:



Loan Commitments
(in thousands)	September 30, 2020		December 31, 2019
Unused lines of credit
Real Estate:
Residential	$	10,360	$	13,754
Residential - Home Equity	29,838		26,407
Commercial	17,069		31,411
Construction	116,714		114,999
Commercial and Industrial	46,537		36,442
Secured credit card	95,854		37,517
Personal	634		43
Total	$	317,006	$	260,573

Commitments to originate residential loans held for sale	$	9,823	$	2,646

Letters of credit	$	5,102	$	5,305

fee.



Off Balance Sheet Reserve
(in thousands)	For the Three Months Ended				For the Nine Months Ended
	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
Balance at beginning of period	$	1,271	$	1,146	$	1,226	$	1,053
Provision for off balance sheet credit commitments	188		45		233		138
Balance at end of period	$	1,459	$	1,191	$	1,459	$	1,191



Mortgage Loan Put-back Reserve
(in thousands)	For the Three Months Ended					For the Nine Months Ended
	September 30, 2020		September 30, 2019			September 30, 2020			September 30, 2019
Balance at beginning of period	$	823	$	527		$	575		$	501
Provision for mortgage loan put backs	213		61			475			128
Charge-offs	—		(48		)	(14		)	(89		)
Balance at end of period	$	1,036	$	540		$	1,036		$	540

Derivative Financial Instruments

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

As part of its mortgage banking activities, the Company enters into interest rate lock commitments, which are commitments to originate loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. The Company then either locks the loan and rate in with an investor and commits to deliver the loan if settlement occurs (Best Efforts) or commits to deliver the locked loan to an investor in a binding (Mandatory) delivery program. Certain loans under rate lock commitments are covered under forward sales contracts. Forward sales contracts are recorded at fair value with changes in fair value recorded in mortgage banking revenue. Interest rate lock commitments and commitments to deliver loans to investors are considered derivatives. The market value of interest rate lock commitments and best efforts contracts are not readily ascertainable with precision because they are not actively traded in stand-alone markets. The Company determines the fair value of rate lock commitments and delivery contracts by estimating the fair value of the underlying asset, which is impacted by current interest rates and takes into consideration the probability that the rate lock commitments will close or will be funded.

The following table reports the commitment and fair value amounts on the outstanding derivatives:



Derivatives
(in thousands)	September 30, 2020			December 31, 2019
Notional amount of open forward sales agreements	$	66,000		$	61,000
Fair value of open forward delivery sales agreements	(278		)	(125		)
Notional amount of open mandatory delivery commitments	8,899			22,888
Fair value of open mandatory delivery commitments	158			115
Notional amount of interest rate lock commitments	42,906			32,365
Fair value of interest rate lock commitments	267			122

Leases

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases

The Company’s primary leasing activities relate to certain real estate leases entered into in support of the Company’s branch operations and back office operations. The Company leases five of its full service branches and five other locations for corporate/administration activities, operations, and loan production. All property leases under lease agreements have been been designated as operating leases. The Company does not have leases designated as finance leases.

The Company determines if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets are included in premises and equipment, and operating lease liabilities are included as other liabilities in the consolidated balance sheets. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The weighted average discount rate used was 2.23% at September 30, 2020 and 2.24% at December 31, 2019. The operating lease ROU asset also includes any lease pre-payments. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which the Company has elected to account for separately as the non-lease component amounts are readily determinable under most leases.

As of September 30, 2020, the Company’s lease ROU assets and related lease liabilities were $3.5 million and $3.8 million, respectively, compared to December 31, 2019 balances of $3.9 million of ROU assets and $4.3 million of lease liabilities, and have remaining terms ranging from 1 - 6 years, including extension options that the Company is reasonably certain will be exercised. As of September 30, 2020, the Company had not entered into any material leases that have not yet commenced. The Company’s lease information is summarized as follows:



Leases
(in thousands)	September 30, 2020			December 31, 2019
Lease Right of Use Asset:
Lease asset	$	5,462		$	5,158
Less: Accumulated amortization	(1,974		)	(1,238		)
Net lease asset	$	3,488		$	3,920

Lease Liability:
Lease liability	$	3,837		$	4,291

Future minimum payments for operating leases with initial or remaining terms of one year or more are as follows:



Lease Payment Obligations
(in thousands)	September 30, 2020
Amounts due in:
2020	$	361
2021	1,408
2022	1,023
2023	777
2024	420
Total future lease payments	3,989
Discount of cash flows	(152		)
Present value of net future lease payments	$	3,837

Fair Value

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value

Generally accepted accounting principles define fair value, establish a framework for measuring fair value, recommend disclosures about fair value, and establish a hierarchy for determining fair value measurement. The hierarchy includes three levels and is based upon the valuation techniques used to measure assets and liabilities. The three levels are as follows:

Level 1 - Inputs to the valuation method are quoted prices (unadjusted) for identical assets or liabilities in active markets;

Level 2 - Inputs to the valuation method include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and

Level 3 - Inputs to the valuation method are unobservable and significant to the fair value measurement.

Fair value measurements on a recurring basis

Investment securities available for sale - The fair values of the Company's investment securities available for sale are provided by an independent pricing service. The fair values of the Company's securities are determined based on quoted prices for similar securities under Level 2 inputs.

Loans held for sale - The fair value of loans held for sale is determined using Level 2 inputs of quoted prices for a similar asset, adjusted for specific attributes of that loan.

Derivative financial instruments - Derivative instruments used to hedge residential mortgage loans held for sale and the related interest rate lock commitments include forward commitments to sell mortgage loans and are reported at fair value utilizing Level 2 inputs. The fair values of derivative financial instruments are based on derivative market data inputs as of the valuation date and the underlying value of mortgage loans for rate lock commitments.

The Company has categorized its financial instruments measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019 as follows:



Fair Value of Financial Instruments
(in thousands)
September 30, 2020	Total		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
Investment securities available for sale
Municipal	$	544	—		$	544	—
Corporate	4,270		—		4,270		—
Mortgage-backed securities	49,178		—		49,178		—
Total	$	53,992	$	—	$	53,992	$	—
Loans held for sale	$	137,717	$	—	$	137,717	$	—
Derivative assets	$	425	$	—	$	425	$	—
Derivative liabilities	$	278	$	—	$	278	$	—

December 31, 2019
Investment securities available for sale
U.S. government-sponsored enterprises	$	999	$	—	$	999	$	—
Municipal	528		—		528		—
Corporate	2,565		—		2,565		—
Mortgage-backed securities	56,736		—		56,736		—
Total	$	60,828	$	—	$	60,828	$	—
Loans held for sale	$	71,030	$	—	$	71,030	$	—
Derivative assets	$	237	$	—	$	237	$	—
Derivative liabilities	$	125	$	—	$	125	$	—

Financial instruments recorded using FASB ASC 825-10

Under FASB ASC 825-10, the Company may elect to report most financial instruments and certain other items at fair value on an instrument-by-instrument basis with changes in fair value reported in net income. After the initial adoption, the election is made at the acquisition of an eligible financial asset, financial liability or firm commitment or when certain specified reconsideration events occur. The fair value election, with respect to an item, may not be revoked once an election is made.

The following table reflects the difference between the fair value carrying amount of loans held for sale, measured at fair value under FASB ASC 825-10, and the aggregate unpaid principal amount the Company is contractually entitled to receive at maturity:



Fair Value of Loans Held for Sale
(in thousands)	September 30, 2020		December 31, 2019
Aggregate fair value	$	137,717	$	71,030
Contractual principal	127,934		67,118
Difference	$	9,783	$	3,912

The Company has elected to account for loans held for sale at fair value to eliminate the mismatch that would occur by recording changes in market value on derivative instruments used to hedge loans held for sale while carrying the loans at the lower of cost or market.

Fair value measurements on a nonrecurring basis

Impaired loans - The Company has measured impairment generally based on the fair value of the loan's collateral and discounted cash flow analysis. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values. As of September 30, 2020 and December 31, 2019, the fair values consist of loan balances of $11.0 million and $4.1 million, with specific reserves of $574 thousand and $119 thousand, respectively.

Foreclosed real estate - The Company's foreclosed real estate is measured at fair value less cost to sell. Fair value was determined based on offers and/or appraisals. Cost to sell the real estate was based on standard market factors. The Company has categorized its foreclosed real estate as Level 3.

The Company has categorized its impaired loans and foreclosed real estate as follows:



Fair Value of Impaired Loans and Foreclosed Real Estate
(in thousands)	September 30, 2020		December 31, 2019
Impaired loans
Level 1 inputs	$	—	$	—
Level 2 inputs	—		—
Level 3 inputs	10,377		3,980
Total	$	10,377	$	3,980

Foreclosed real estate
Level 1 inputs	$	—	$	—
Level 2 inputs	—		—
Level 3 inputs	3,326		2,384
Total	$	3,326	$	2,384

The following table provides information describing the unobservable inputs used in Level 3 fair value measurements at September 30, 2020 and December 31, 2019:



Unobservable Inputs
	Valuation Technique	Unobservable Inputs	Range of Inputs
	Valuation Technique	Unobservable Inputs	Range of Inputs
Impaired Loans	Appraised Value/Discounted Cash Flows	Discounts to appraisals or cash flows for estimated holding and/or selling costs	11 to 25%
Foreclosed Real Estate	Appraised Value/Comparable Sales	Discounts to appraisals for estimated holding and/or selling costs	11 to 25%

Fair value of financial instruments

Fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practical to estimate the value is based upon the characteristics of the instruments and relevant market information. Financial instruments include cash, evidence of ownership in an entity, or contracts that convey or impose on an entity the contractual right or obligation to either receive or deliver cash for another financial instrument.

The information used to determine fair value is highly subjective and judgmental in nature and, therefore, the results may not be precise. Subjective factors include, among other things, estimates of cash flows, risk characteristics, credit quality, and interest rates, all of which are subject to change. Since the fair value is estimated as of the balance sheet date, the amounts that will actually be realized or paid upon settlement or maturity on these various instruments could be significantly different.

The fair value of the Company’s loan portfolio includes a credit risk assumption in the determination of the fair value of its loans. This credit risk assumption is intended to approximate the fair value that a market participant would realize in a hypothetical orderly transaction. The Company’s loan portfolio is initially fair valued using a segmented approach. The Company divides its loan portfolio into the following categories: variable rate loans, impaired loans, and all other loans. The results are then adjusted to account for credit risk as described above. However, under the new guidance, the Company believes a further credit risk discount must be applied through the use of a discounted cash flow model to compensate for illiquidity risk, based on certain assumptions included within the discounted cash flow model, primarily the use of discount rates that better capture inherent credit risk over the lifetime of a loan. This consideration of enhanced credit risk provides an estimated exit price for the Company’s loan portfolio.

For variable-rate loans that reprice frequently and have no significant change in credit risk, fair values approximate carrying values. Fair values for impaired loans are estimated using discounted cash flow models or based on the fair value of the underlying collateral.

The fair value of cash and cash equivalents and investments in restricted stocks is the carrying amount. Restricted stock includes equity of the Federal Reserve and other banker’s banks.

The fair value of noninterest bearing deposits and securities sold under agreements to repurchase is the carrying amount.

The fair value of checking, savings, and money market deposits is the amount payable on demand at the reporting date. Fair value of fixed maturity term accounts and individual retirement accounts is estimated using rates currently offered for accounts of similar remaining maturities.

The fair value of certificates of deposit in other financial institutions is estimated based on interest rates currently offered for deposits of similar remaining maturities.

The fair value of borrowings is estimated by discounting the value of contractual cash flows using current market rates for borrowings with similar terms and remaining maturities.

The fair value of outstanding loan commitments, unused lines of credit, and letters of credit are not included in the table since the carrying value generally approximates fair value. These instruments generate fees that approximate those currently charged to originate similar commitments.

The table below presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments.



Fair Value of Selected Financial Instruments
	September 30, 2020				December 31, 2019
(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets
Level 1
Cash and due from banks	$	20,138	$	20,138	$	10,530	$	10,530
Interest bearing deposits at other financial institutions	179,789		179,789		102,447		102,447
Federal funds sold	5,590		5,590		1,847		1,847
Level 3
Loans receivable, net ⁽¹⁾	$	1,455,946	$	1,467,771	$	1,157,820	$	1,155,922
Restricted investments	3,958		3,958		3,966		3,966

Financial liabilities
Level 1
Noninterest bearing deposits	$	596,239	$	596,239	$	291,777	$	291,777
Level 3
Interest bearing deposits	$	1,065,972	$	1,072,067	$	933,644	$	934,349
FHLB advances and other borrowed funds	39,738		39,663		47,645		47,678

________________________

⁽¹⁾

Includes SBA-PPP loans and portfolio loans.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Segments

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Segments

The Company’s reportable segments represent product line divisions and are viewed separately for strategic planning purposes by management. The four segments include Commercial Banking, Capital Bank Home Loans (the Company’s mortgage loan division), OpenSky^® (the Company’s credit card division) and the Corporate Office. The following schedule presents financial information for each reportable segment at September 30, 2020.



Segments

For the Three Months Ended September 30, 2020
(in thousands)	Commercial Bank		CBHL		OpenSky^®		Corporate		Eliminations			Consolidated
Interest income	$	16,695	$	856	$	7,070	$	607	$	(39	)	$	25,189
Interest expense	2,214		565		—		410		(39		)	3,150
Net interest income	14,481		291		7,070		197		—			22,039
Provision for loan losses	3,123		—		377		—		—			3,500
Net interest income after provision	11,358		291		6,693		197		—			18,539
Noninterest income	164		15,209		5,773		—		—			21,146
Noninterest expense	9,148		8,912		9,974		85		—			28,119
Net income before taxes	$	2,374	$	6,588	$	2,492	$	112	$	—		$	11,566

Total assets	$	1,611,947	$	138,781	$	95,124	$	172,269	$	(139,092	)	$	1,879,029

For the Three Months Ended September 30, 2019
Interest income	$	15,878	$	896	$	5,180	$	400	$	—		$	22,354
Interest expense	3,888		277		—		5		—			4,170
Net interest income	11,990		619		5,180		395		—			18,184
Provision for loan losses	882		—		189		—		—			1,071
Net interest income after provision	11,108		619		4,991		395		—			17,113
Noninterest income	228		4,933		2,059		1		—			7,221
Noninterest expense	7,859		4,411		5,564		394		—			18,228
Net income before taxes	$	3,477	$	1,141	$	1,486	$	2	$	—		$	6,106

Total assets	$	1,157,332	$	70,110	$	46,694	$	148,016	$	(110,745	)	$	1,311,406



Segments

For the Nine Months Ended September 30, 2020
(in thousands)	Commercial Bank		CBHL		OpenSky^®		Corporate			Eliminations			Consolidated
Interest income	$	49,147	$	1,912	$	16,151	$	1,817		$	(94	)	$	68,933
Interest expense	8,536		1,161		—		980			(94		)	10,583
Net interest income	40,611		751		16,151		837			—			58,350
Provision for loan losses	8,399		—		810		—			—			9,209
Net interest income after provision	32,212		751		15,341		837			—			49,141
Noninterest income	574		30,356		10,694		2			—			41,626
Noninterest expense	26,039		19,634		22,700		292			—			68,665
Net income before taxes	$	6,747	$	11,473	$	3,335	$	547		$	—		$	22,102

Total assets	$	1,611,947	$	138,781	$	95,124	$	172,269		$	(139,092	)	$	1,879,029

For the Nine Months Ended September 30, 2019
Interest income	$	44,641	$	1,928	$	13,362	$	1,031		—			$	60,961
Interest expense	10,781		520		—		202			—			11,502
Net interest income	33,860		1,408		13,362		829			—			49,459
Provision for loan losses	1,283		—		536		50			—			1,869
Net interest income after provision	32,577		1,408		12,826		779			—			47,590
Noninterest income	573		11,142		5,521		4			—			17,240
Noninterest expense	22,271		10,472		14,799		1,226			—			48,768
Net income before taxes	$	10,879	$	2,078	$	3,548	$	(443	)	$	—		$	16,062

Total assets	$	1,157,332	$	70,110	$	46,694	$	148,016		$	(110,745	)	$	1,311,406

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Subsequent Events	9 Months Ended
Subsequent Events	Sep. 30, 2020
Subsequent Events [Abstract]
Subsequent Events	<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:16px;padding-top:0px;text-align:left;padding-left:0px;text-indent:0px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-weight:bold;">Subsequent Events</font></div><div style="line-height:120%;padding-bottom:16px;padding-top:0px;text-align:justify;padding-left:0px;text-indent:24px;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;color:#000000;">Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Non-recognized subsequent events are events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date.</font></div></div>

Nature of Business and Basis of Presentation (Policies)	9 Months Ended
Nature of Business and Basis of Presentation (Policies)	Sep. 30, 2020
Accounting Policies [Abstract]
Nature of operations	Nature of operations: Capital Bancorp, Inc. is a Maryland corporation and bank holding company (the “Company”) for Capital Bank, N.A. (the “Bank”). The Company's primary operations are conducted by the Bank, which operates branches in Rockville, Columbia and North Bethesda, Maryland, Reston, Virginia, and the District of Columbia. The Bank is principally engaged in the business of investing in commercial, real estate, and credit card loans and attracting deposits. The Company originates residential mortgages for sale in the secondary market through Capital Bank Home Loans (“CBHL”), our residential mortgage banking arm, and issues credit cards through OpenSky^®, a secured, digitally-driven nationwide credit card platform. The Company formed Church Street Capital, LLC (“Church Street Capital”) in 2014 to provide short-term secured real estate financing to Washington, D.C. area investors and developers that may not meet all Bank credit criteria. At September 30, 2020, Church Street Capital had loans totaling $4.3 million. In addition, the Company owns all of the stock of Capital Bancorp (MD) Statutory Trust I (the “Trust”). The Trust is a special purpose non-consolidated entity organized for the sole purpose of issuing trust preferred securities.
Basis of presentation	Basis of presentation: The accompanying consolidated financial statements include the activity of the Company and its wholly-owned subsidiaries, the Bank and Church Street Capital. All intercompany transactions have been eliminated in consolidation. The Company reports its activities as four business segments. In determining the appropriateness of segment definition, the Company considers components of the business about which financial information is available and regularly evaluated relative to resource allocation and performance assessment. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and conform to general practices within the banking industry. Risks and Uncertainties The novel coronavirus (“COVID-19”) spread rapidly across the world in the first quarter of 2020 and was declared a pandemic by the World Health Organization. In March 2020, the government and private sector responses to contain its spread began to significantly affect operations and continue to do so through the current period. It is likely operations will continue to be adversely affected. The duration and extent of the effects over longer terms cannot be reasonably estimated at this time. The risks and uncertainties resulting from the pandemic which are most likely to affect future earnings, cash flows and financial condition in future quarters primarily include the nature and duration of the financial effects felt by our customers and the concomitant impact on the customers' ability to fulfill their financial obligations to the Company; as well as the potential decline of real estate values resulting from market disruption which may impair the values of collateral-dependent loans. Accordingly, estimates used in the preparation of the financial statements may be subject to significant adjustments in future periods. The greater the duration and severity of the pandemic, the more likely that results will be materially impacted by its effects.
Cash and cash equivalents	Cash and cash equivalents For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from financial institutions, interest bearing deposits with financial institutions and federal funds sold. Generally, federal funds are sold for one-day periods.
Investment securities	Investment securities Investment securities are classified as available for sale and carried at fair value with unrealized gains and losses included in stockholders’ equity on an after-tax basis. Premiums and discounts on investment securities are amortized or accreted using the interest method. Changes in the fair value of debt securities available for sale are included in stockholders’ equity as unrealized gains and losses, net of the related tax effect. Unrealized losses are periodically reviewed to determine whether the loss represents an other than temporary impairment. Any unrealized losses judged to be other than a temporary impairment are charged to income.
Small Business Administration Paycheck Protection Program	Small Business Administration Paycheck Protection Program The Small Business Administration Paycheck Protection Program (“SBA-PPP”) is one of the centerpieces of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was passed on March 27, 2020 in response to the outbreak of coronavirus (“COVID-19”) and was supplemented with subsequent legislation. Overseen by the United States (“U.S.”) Treasury Department, the SBA-PPP offered cash-flow assistance to nonprofit and small business employers through guaranteed loans for expenses incurred between February 15, 2020, and August 8, 2020. Borrowers are eligible for forgiveness of principal and accrued interest on SBA-PPP loans to the extent that the proceeds are used to cover eligible payroll costs, interest costs, rent, and utility costs over a period between eight and 24-weeks after the loan is made as long as the borrower retains its employees and their compensation levels. The CARES Act authorized the SBA to fully guarantee these loans. Due to the unique nature of these provisions, SBA-PPP loans have been disclosed as a separate balance sheet item. Origination fees received by the SBA are capitalized into the carrying amount of the loans. The deferred fee income, net of origination costs, is recognized over the life of the loan as an adjustment to yield using the effective interest method.
Loans held for sale	Loans held for sale Mortgage loans originated and intended for sale are recorded at fair value, determined individually, as of the balance sheet date. Fair value is determined based on outstanding investor commitments, or in the absence of such commitments, based on current investor yield requirements. Gains and losses on loan sales are determined by the specific-identification method. The Company’s current practice is to sell residential mortgage loans on a servicing released basis, and, therefore, it has no servicing rights recorded for the value of such servicing. Interest on loans held for sale is credited to income based on the principal amounts outstanding. Upon sale and delivery, loans are legally isolated from the Company and the Company has no ability to restrict or constrain the ability of third‑party investors to pledge or exchange the mortgage loans. The Company does not have the entitlement or ability to repurchase the mortgage loans or unilaterally cause third‑party investors to put the mortgage loans back to the Company. Unrealized and realized gains on loan sales are determined using the specific-identification method and are recognized through mortgage banking activity in the Consolidated Statements of Income. The Company elected to measure loans held for sale at fair value to better align reported results with the underlying economic changes in value of the loans on the Company’s balance sheet.
Loans and Allowance for Loan Losses	Loans and the Allowance for Loan Losses Loans are stated at the principal amount outstanding, adjusted for deferred origination fees and costs, discounts on loans acquired, and the allowance for loan losses. Interest is accrued based on the loan principal balances and stated interest rates. Origination fees and costs are recognized as an adjustment to the related loan yield using approximate interest methods. The Company discontinues the accrual of interest when any portion of the principal and interest is 90 days past due, or when it is probable that not all principal and interest payments will be collected, and collateral is insufficient to discharge the debt in full. Generally, interest payments on nonaccrual loans are recorded as a reduction of the principal balance. Loans are considered impaired when, based on current information, management believes the Company will not collect all principal and interest payments according to contractual terms. Generally, loans are reviewed for impairment when the risk grade for a loan is downgraded to a classified asset category. The loans are evaluated for appropriate classification, accrual, impairment, and troubled debt restructure (“TDR”) status. If collection of principal is evaluated as doubtful, all payments are applied to principal. A modification of a loan is considered a TDR when a borrower is experiencing financial difficulty and the modification constitutes a concession; however, the CARES Act provides financial institutions optional temporary relief from TDR and impairment accounting for certain loan modifications related to the COVID-19 pandemic. Under Section 401 of the CARES Act, banks may elect not to categorize loan modifications as TDRs if they are (1) related to COVID-19; (2) executed on a loan that was not more than 30 days past due as of December 31, 2019; and (3) executed between March 1, 2020, and the earlier of (A) 60 days after the date of termination of the National Emergency or (B) December 31, 2020. All other short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, are not TDRs. This includes short-term modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. Loans are generally charged-off in part or in full when management determines the loan to be uncollectible. Factors for charge-off that may be considered include: repayments deemed to be projected beyond reasonable time frames, client bankruptcy and lack of assets, and/or collateral deficiencies. The allowance for loan losses is estimated to adequately provide for probable future losses on existing loans. The allowance consists of specific and general components. For loans that are classified as impaired, an allowance is established when the collateral value, if the loan is collateral dependent, or the discounted cash flows of the impaired loan is lower than the carrying value of that loan. The general component covers pools of nonclassified loans and is based on historical loss experience adjusted with qualitative factors such as: trends in volume and terms of loans; levels of, and trends in, delinquencies and non-accruals; effects of any changes in lending policies, experience, ability and depth of management; national and local economic trends and conditions (with a specific evaluation of COVID-19 impact); commitments and concentrations of credit; changes in the quality of the Company’s loan review system; and the volume of loans with identified incomplete financial documentation. Actual loan performance may differ materially from those estimates. A loss is recognized as a charge to the allowance when management believes that collection of the loan is unlikely. Collections of loans previously charged off are added to the allowance at the time of recovery. The Company determines the allowance for loan losses based on the accumulation of various components that are calculated independently in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 450 for pools of loans, and ASC 310 for TDRs and for individually evaluated loans. The process for determining an appropriate allowance for loan losses is based on a comprehensive and consistently applied analysis of the loan portfolio. The analysis considers all significant factors that affect the collectibility of the portfolio and supports the credit losses estimated by this process. It is important to recognize that the related process, methodology, and underlying assumptions require a substantial degree of judgment.
Premises and equipment	Premises and equipment Premises and equipment are stated at cost less accumulated depreciation and amortization over two to seven years. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related property. Leasehold improvements are amortized over the estimated useful lives of the improvements, approximately ten years, or the term of the lease, whichever is less. Expenditures for maintenance, repairs, and minor replacements are charged to noninterest expenses as incurred.
Leases	Leases During the first quarter of 2019, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 applies a right-of-use (“ROU”) model that requires a lessee to record, for all leases with a lease term of more than 12 months, an asset representing its right to use the underlying asset and a liability to make lease payments. The Company elected to apply the package of practical expedients permitting entities to not reassess: 1) whether any expired or existing contracts are or contain leases; 2) the lease classification for any expired or existing leases; and 3) initial direct costs for any existing leases. Additionally, as provided by ASU 2016-02, the Company elected not to apply the recognition requirements of ASC 842 to short-term leases, defined as leases with a term of 12 months or less, and to recognize the lease payments in net income on short-term leases on a straight-line basis over the lease term. The Company is largely accounting for existing operating leases consistent with prior guidance except for the incremental balance sheet recognition for leases.
Derivative Financial Instruments	Derivative Financial Instruments The Company enters into commitments to fund residential mortgage loans (interest rate locks) with the intention of selling them in the secondary market. The Company also enters into forward sales agreements for certain funded loans and loan commitments. The Company records unfunded commitments intended for loans held for sale and forward sales agreements at fair value with changes in fair value recorded as a component of mortgage banking revenue. Loans originated and intended for sale in the secondary market are carried at fair value. For pipeline loans which are not pre-sold to an investor, the Company endeavors to manage the interest rate risk on rate lock commitments by entering into forward sale contracts, whereby the Company obtains the right to deliver securities to investors in the future at a specified price. Such contracts are accounted for as derivatives and are recorded at fair value as derivative assets or liabilities, with changes in fair value recorded in mortgage banking revenue. The Company accounts for derivative instruments and hedging activities according to guidelines established in ASC 815-10, Accounting for Derivative Instruments and Hedging Activities, as amended. The Company recognizes all derivatives as either assets or liabilities on the balance sheet and measures those instruments at fair value. Changes in fair value of derivatives designated and accounted for as cash flow hedges, to the extent they are effective as hedges, are recorded in other comprehensive income, net of deferred taxes. Any hedge ineffectiveness would be recognized in the income statement line item pertaining to the hedged item.
Fair Value Measurements	Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction between market participants at the measurement date. The degree of management judgment involved in determining the fair value of a financial instrument is dependent upon the availability of quoted market prices or observable market inputs. For financial instruments that are traded actively and have quoted market prices or observable market inputs, there is minimal subjectivity involved in measuring fair value. However, when quoted market prices or observable market inputs are not fully available, significant management judgment may be necessary to estimate fair value. In developing our fair value estimates, we endeavor to maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines Level 1 valuations as those based on quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 valuations include inputs based on quoted prices for similar assets or liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 valuations are based on at least one significant assumption not observable in the market, or significant management judgment or estimation, some of which may be internally developed. Financial assets that are recorded at fair value on a recurring basis include investment securities available for sale, loans held for sale, and derivative financial instruments. Financial liabilities that are recorded at fair value on a recurring basis are comprised of derivative financial instruments.
Income Taxes	Income Taxes Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are recognized when it is deemed more likely than not that the benefits of such deferred income taxes will be realized.
Earnings per share	Earnings per share: Earnings per share is computed by dividing net income available to common stockholders by the weighted average number of shares outstanding. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares outstanding, adjusted for the dilutive effect of stock options and restricted stock using the treasury stock method.
Comprehensive income	Comprehensive income: The Company reports as comprehensive income all changes in stockholders' equity during the year from sources other than stockholders. Other comprehensive income refers to all components (income, expenses, gains, and losses) of comprehensive income that are excluded from net income. The Company's only component of other comprehensive income is unrealized gains and losses on investment securities available for sale, net of income taxes.
Recently issued accounting pronouncements	Recently issued accounting pronouncements: In June 2016, the FASB issued guidance to change the accounting for credit losses and modify the impairment model for certain debt securities. The FASB subsequently revised ASU 2019-10, which delayed implementation and the new standard is now effective for fiscal years beginning after December 15, 2022, including the interim periods within those fiscal years. The Company expects the provisions of this standard to impact the Company’s consolidated financial statements, in particular, the level of the reserve for credit losses. The Company is continuing to evaluate the extent of the potential impact and expects that portfolio composition and economic conditions at the time of adoption will be a factor. In November 2019, the FASB issued guidance to defer the effective dates for private companies, not-for-profit organizations, and certain smaller reporting companies to apply standards on current expected loan losses (“CECL”). The new effective dates will be fiscal years beginning after December 15, 2022 including interim periods within those fiscal years. In addition, the FASB issued guidance that addresses issues raised by stakeholders during the implementation of ASU 2016-13, “Financial Instruments-loan losses (Topic 326): Measurement of Loan Losses on Financial Instruments.” The amendments affect a variety of Topics in the Accounting Standards Codification. For entities that have not yet adopted the amendments in ASU 2016-13, the amendments are effective for fiscal years beginning after December 15, 2022 including interim periods within those fiscal years. Early adoption is permitted in any interim period as long as an entity has adopted the amendments in ASU 2016-13. While the Company does not expect these amendments to have a material effect on its financial statements, the Company is continuing to evaluate the extent of the potential impact and expects that portfolio composition and economic conditions at the time of adoption will be a factor. The Company will apply the ASU through a cumulative-effect adjustment to beginning retained earnings in the year of adoption. While early adoption has been permitted since first quarter 2019, the Company does not expect to early adopt. In addition to the allowance for loan losses, the Company will also record an allowance for credit losses on debt securities instead of applying the impairment model currently utilized. The amount of the adjustments will be impacted by each portfolio’s composition and credit quality at the adoption date as well as economic conditions and forecasts at that time. In April 2019, the FASB issued codification improvements to ASU Topic 326 - Financial Instruments - Credit Loss, Topic 815 - Derivatives and Hedging, and Subtopic 825-10 - Financial Instruments. This codification provides technical corrections and clarifies issues related to fair value hedges. The Company early adopted this guidance upon issuance, and it did not have a material impact on the Company’s consolidated financial statements. In December 2019, the FASB issued guidance to simplify accounting for income taxes by removing specific technical exceptions that often produce information investors have a hard time understanding. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The amendments are effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company does not expect these amendments to have a material effect on its financial statements. In March 2020, the FASB issued ASU 2020-04, ‘‘Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This new ASU provides temporary optional expedients and exceptions to GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. Entities can elect not to apply certain modification accounting requirements to contracts affected by reference rate reform, if certain criteria are met. Entities that make such elections would not have to remeasure contracts at the modification date or reassess a previous accounting determination. Entities can elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met. This amended guidance and the ability to elect its temporary optional expedients and exceptions are effective for the Company as of March 12, 2020 through December 31, 2022. The adoption of ASU 2020-04 Topic 848 is not expected to have a material impact on the Company’s financial statements. In March 2020, various regulatory agencies, including the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation, (“agencies”) issued an interagency statement on loan modifications and reporting for financial institutions working with customers affected by COVID-19. The interagency statement was effective immediately and impacted accounting for loan modifications. Under ASC 310-40, “Receivables - Troubled Debt Restructurings by Creditors,” a restructuring of debt constitutes a TDR if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The agencies confirmed with the FASB that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, are not to be considered TDRs. Such modifications include short-term (e.g., six months) modifications that include payment deferrals of (i) principal and interest, (ii) interest only and (iii) principal only, fee waivers, extensions of repayment terms, or other delays in payment that are deemed insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. As of September 30, 2020, the Company has offered payment deferrals for commercial and consumer customers for up to six months. The loan modifications offered to borrowers provided the borrower with payment relief in the form of reduced or deferred payments for up to 90 days (six months in selected instances) during which time interest is continuing to accrue. It is not expected that this interagency guidance will have a material impact on the Company’s financial statements; however, this impact cannot be quantified at this time. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company's financial position, results of operations or cash flows.
Reclassifications	Reclassifications: Certain reclassifications have been made to amounts reported in prior periods to conform to the current period presentation. The reclassifications had no material effect on net income or total stockholders' equity.

Nature of Business and Basis of Presentation (Tables)

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

Information concerning the Company's accumulated other comprehensive income as of September 30, 2020 and December 31, 2019 is as follows:



(in thousands)	September 30, 2020			December 31, 2019
Unrealized gains on securities available for sale	$	2,475		$	18
Deferred tax expense	(681		)	(5		)
Total accumulated comprehensive income	$	1,794		$	13

Investment Securities (Tables)

9 Months Ended

Sep. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Unrealized Gain (Loss) on Investments

The amortized cost and estimated fair value of investment securities at September 30, 2020 and December 31, 2019 are summarized as follows:



Investment Securities Available for Sale
(in thousands)
September 30, 2020	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Municipal	$	513	$	31	$	—		$	544
Corporate	4,260		35		(25		)	4,270
Mortgage-backed securities	46,744		2,434		—			49,178
Total	$	51,517	$	2,500	$	(25	)	$	53,992

December 31, 2019
U.S. government-sponsored enterprises	$	1,000	$	—	$	(1	)	$	999
Municipal	515		13		—			528
Corporate	2,542		46		(23		)	2,565
Mortgage-backed securities	56,754		117		(135		)	56,736
Total	$	60,811	$	176	$	(159	)	$	60,828

Schedule of Investment Portfolio in Continuous Unrealized Loss Position, Fair Value

Information related to unrealized losses in the investment portfolio as of September 30, 2020 and December 31, 2019 is summarized as follows:



Investment Securities Unrealized Losses
(in thousands)	Less than 12 months					12 months or longer					Total
September 30, 2020	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate	$	—	$	—		$	235	$	(25	)	$	235	$	(25	)
Total	$	—	$	—		$	235	$	(25	)	$	235	$	(25	)

December 31, 2019
U.S. government-sponsored enterprises	$	—	$	—		$	999	$	(1	)	$	999	$	(1	)
Corporate	—		—			519		(23		)	519		(23		)
Mortgage-backed securities	21,487		(78		)	5,246		(57		)	26,733		(135		)
Total	$	21,487	$	(78	)	$	6,764	$	(81	)	$	28,251	$	(159	)

Schedule of Pledged Securities

A summary of pledged securities at September 30, 2020 and December 31, 2019 is shown below:



Pledged Securities
	September 30, 2020				December 31, 2019
(in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Federal Home Loan Bank	$	47,257	$	49,722	$	1,508	$	1,522

Investments Classified by Contractual Maturity Date



Contractual Maturities
	September 30, 2020				December 31, 2019
(in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within one year	$	—	$	—	$	1,542	$	1,518
Over one to five years	—		—		—		—
Over five to ten years	4,000		4,035		2,000		2,046
Over ten years	773		779		515		528
Mortgage-backed securities⁽¹⁾	46,744		49,178		56,754		56,736
Total	$	51,517	$	53,992	$	60,811	$	60,828

_______________

⁽¹⁾

Mortgage-backed securities contractually repay in monthly installments.

Portfolio Loans Receivable (Tables)

9 Months Ended

Sep. 30, 2020

Receivables [Abstract]

Schedule of Loans Receivable

Major classifications of portfolio loans as are as follows:



Portfolio Loan Categories
(in thousands)	September 30, 2020			December 31, 2019
Real estate:
Residential	$	422,698		$	427,926
Commercial	372,972			348,091
Construction	227,662			198,702
Commercial and Industrial	134,889			151,109
Credit card	84,964			46,412
Other consumer	2,268			1,285
Portfolio loans receivable, gross	1,245,453			1,173,525
Deferred origination fees, net	(840		)	(2,404		)
Allowance for loan losses	(22,016		)	(13,301		)
Portfolio loans receivable, net	$	1,222,597		$	1,157,820

Schedule Of Activity In Accretable Discounts On Loans Acquired

Accretable discounts on loans acquired is summarized as follows:



Accretable Discounts on Loans Acquired
(in thousands)	For the Three Months Ended						For the Nine Months Ended
	September 30, 2020			September 30, 2019			September 30, 2020			September 30, 2019
Accretable discount at beginning of period	$	230		$	424		$	429		$	438
Less: Accretion and payoff of loans	(4		)	(13		)	(203		)	(27		)
Other changes, net	—			22			—			22
Accretable discount at end of period	$	226		$	433		$	226		$	433

Allowance for Credit Losses on Loans Receivables



Allowance for Loan Losses
(in thousands)	Beginning Balance		Provision for Loan Losses		Charge-Offs			Recoveries		Ending Balance
Three Months Ended September 30, 2020	Beginning Balance		Provision for Loan Losses		Charge-Offs			Recoveries		Ending Balance
Real estate:
Residential	$	6,244	$	737	$	—		$	—	$	6,981
Commercial	5,232		1,158		—			—		6,390
Construction	3,952		537		—			—		4,489
Commercial and Industrial	1,743		671		(85		)	—		2,329
Credit card	1,497		376		(85		)	7		1,795
Other consumer	11		21		—			—		32
Total	$	18,679	$	3,500	$	(170	)	$	7	$	22,016

Nine Months Ended September 30, 2020
Real estate:
Residential	$	4,135	$	2,846	$	—		$	—	$	6,981
Commercial	3,573		2,817		—			—		6,390
Construction	2,668		1,821		—			—		4,489
Commercial and Industrial	1,548		892		(111		)	—		2,329
Credit card	1,367		811		(408		)	25		1,795
Other consumer	10		22		—			—		32
Total	$	13,301	$	9,209	$	(519	)	$	25	$	22,016



Allowance for Loan Losses
(in thousands)	Beginning Balance		Provision for Loan Losses			Charge-Offs			Recoveries		Ending Balance
Three Months Ended September 30, 2019	Beginning Balance		Provision for Loan Losses			Charge-Offs			Recoveries		Ending Balance
Real estate:
Residential	$	3,915	$	269		$	(8	)	$	—	$	4,176
Commercial	3,116		307			—			3		3,426
Construction	2,204		173			—			—		2,377
Commercial and Industrial	1,472		140			(54		)	—		1,558
Credit card	1,199		181			(120		)	3		1,263
Other consumer	7		1			—			—		8
Total	$	11,913	$	1,071		$	(182	)	$	6	$	12,808

Nine Months Ended September 30, 2019
Real estate:
Residential	$	3,541	$	643		$	(8	)	$	—	$	4,176
Commercial	3,003		413			—			10		3,426
Construction	2,093		284			—			—		2,377
Commercial and Industrial	1,578		62			(82		)	—		1,558
Credit card	1,084		468			(303		)	14		1,263
Other consumer	9		(1		)	—			—		8
Total	$	11,308	$	1,869		$	(393	)	$	24	$	12,808



Allowance for Loan Loss Composition
(in thousands)	Allowance for Loan Losses Ending Balance Evaluated for Impairment:				Outstanding Portfolio Loan Balances Evaluated for Impairment:
September 30, 2020	Individually		Collectively		Individually		Collectively
Real estate:
Residential	$	—	$	6,981	$	1,626	$	421,072
Commercial	—		6,390		1,466		371,506
Construction	—		4,489		6,464		221,198
Commercial and Industrial	574		1,755		1,395		133,494
Credit card	—		1,795		—		84,964
Other consumer	—		32		—		2,268
Total	$	574	$	21,442	$	10,951	$	1,234,502

December 31, 2019
Real estate:
Residential	$	—	$	4,135	$	2,192	$	425,734
Commercial	—		3,572		1,433		346,658
Construction	—		2,668		—		198,702
Commercial and Industrial	119		1,429		474		150,635
Credit card	—		1,368		—		46,412
Other consumer	—		10		—		1,285
Total	$	119	$	13,182	$	4,099	$	1,169,426

Past Due Loans Receivables

Past due loans, segregated by age and class of loans, as of September 30, 2020 and December 31, 2019 were as follows:



Portfolio Loans Past Due
	Loans 30-89 Days Past Due		Loans 90 or More Days Past Due		Total Past Due Loans		Current Loans		Total Portfolio Loans		Accruing Loans 90 or More Days Past Due		Non-accrual Loans
(in thousands)
September 30, 2020
Real estate:
Residential	$	708	$	1,580	$	2,288	$	420,410	$	422,698	$	—	$	1,626
Commercial	3,331		1,695		5,026		367,946		372,972		230		1,466
Construction	4,750		589		5,339		222,323		227,662		297		6,464
Commercial and Industrial	425		323		748		134,141		134,889		—		1,395
Credit card	7,698		2		7,700		77,264		84,964		2		—
Other consumer	—		—		—		2,268		2,268		—		—
Total	$	16,912	$	4,189	$	21,101	$	1,224,352	$	1,245,453	$	529	$	10,951

Acquired loans included in total above	$	—	$	576	$	576	$	5,141	$	5,717	$	230	$	393

December 31, 2019
Real estate:
Residential	$	704	$	2,436	$	3,140	$	424,786	$	427,926	$	374	$	2,192
Commercial	275		1,671		1,946		346,145		348,091		237		1,433
Construction	756		—		756		197,946		198,702		—		—
Commercial and Industrial	172		353		525		150,584		151,109		—		474
Credit card	5,526		8		5,534		40,878		46,412		9		—
Other consumer	—		—		—		1,285		1,285		—		—
Total	$	7,433	$	4,468	$	11,901	$	1,161,624	$	1,173,525	$	620	$	4,099

Acquired loans included in total above	$	305	$	1,243	$	1,548	$	4,873	$	6,421	$	464	$	880

Impaired Loans Receivables

Impaired loans were as follows:



Impaired Loans
	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
(in thousands)
September 30, 2020
Real estate:
Residential	$	1,843	$	1,626	$	—	$	1,626	$	—
Commercial	1,594		1,466		—		1,466		—
Construction	6,566		6,464		—		6,464		—
Commercial and Industrial	1,548		—		1,395		1,395		574
Credit card	—		—		—		—		—
Other consumer	—		—		—		—		—
Total	$	11,551	$	9,556	$	1,395	$	10,951	$	574

Acquired loans included above	$	552	$	393	$	—	$	393	$	—

December 31, 2019
Real estate:
Residential	$	2,309	$	2,192	$	—	$	2,192	$	—
Commercial	1,477		1,433		—		1,433		—
Construction	—		—		—		—		—
Commercial and Industrial	574		201		273		474		119
Credit card	—		—		—		—		—
Other consumer	—		—		—		—		—
Total	$	4,360	$	3,826	$	273	$	4,099	$	119

Acquired loans included above	$	1,148	$	880	$	—	$	880	$	—

The following tables summarize interest recognized on impaired loans:



Interest Recognized on Impaired Loans
	For the Three Months Ended September 30, 2020				For the Nine Months Ended September 30, 2020
(in thousands)	Average Recorded Investment		Interest Recognized		Average Recorded Investment		Interest Recognized
Real estate:
Residential	$	1,860	$	1	$	1,864	$	1
Commercial	1,616		8		1,618		10
Construction	6,531		169		6,462		178
Commercial and Industrial	1,813		54		1,841		54
Total	$	11,820	$	232	$	11,785	$	243



Interest Recognized on Impaired Loans
	For the Three Months Ended September 30, 2019				For the Nine Months Ended September 30, 2019
(in thousands)	Average Recorded Investment		Interest Recognized		Average Recorded Investment		Interest Recognized
Real estate:
Residential	$	2,612	$	8	$	2,620	$	11
Commercial	1,160		2		1,161		2
Construction	2,133		—		2,132		—
Commercial and Industrial	1,003		8		1,005		9
Total	$	6,908	$	18	$	6,918	$	22

Loans Receivables Credit Quality Indicators

The following table presents the balances of classified loans based on the risk grade. Classified loans include Special Mention, Substandard, and Doubtful loans:



Portfolio Loan Classifications
(in thousands)	Pass⁽¹⁾		Special Mention		Substandard		Doubtful		Total
September 30, 2020
Real estate:
Residential	$	411,957	$	8,245	$	2,496	$	—	$	422,698
Commercial	361,474		10,243		1,255		—		372,972
Construction	220,086		1,112		6,464		—		227,662
Commercial and Industrial	121,707		10,965		2,217		—		134,889
Credit card	84,964		—		—		—		84,964
Other consumer	2,268		—		—		—		2,268
Portfolio loans receivable, gross	$	1,202,456	$	30,565	$	12,432	$	—	$	1,245,453

December 31, 2019
Real estate:
Residential	$	425,661	$	—	$	2,265	$	—	$	427,926
Commercial	340,313		6,345		1,433		—		348,091
Construction	198,702		—		—		—		198,702
Commercial and Industrial	145,178		4,505		1,426		—		151,109
Credit card	46,412		—		—		—		46,412
Other consumer	1,285		—		—		—		1,285
Portfolio loans receivable, gross	$	1,157,551	$	10,850	$	5,124	$	—	$	1,173,525

________________________

⁽¹⁾

Category includes loans graded exceptional, very good, good, satisfactory and pass/watch, in addition to credit cards and consumer credits that are not graded.

Troubled Debt Restructurings on Loans Receivables



Troubled Debt Restructurings
(in thousands)	Number of Contracts	Recorded Investment
September 30, 2020	Number of Contracts	Performing		Nonperforming		Total
Real estate:
Residential	3	$	—	$	145	$	145
Commercial and Industrial	2	—		301		301
Total	5	$	—	$	446	$	446

Acquired loans included in total above	3	$	—	$	145	$	145

December 31, 2019
Real estate:
Residential	3	$	—	$	145	$	145
Commercial and Industrial	2	—		314		314
Total	5	$	—	$	459	$	459

Acquired loans included in total above	3	$	—	$	145	$	145

Schedule Of Outstanding Loan Commitments

Outstanding loan commitments were as follows:



Loan Commitments
(in thousands)	September 30, 2020		December 31, 2019
Unused lines of credit
Real Estate:
Residential	$	10,360	$	13,754
Residential - Home Equity	29,838		26,407
Commercial	17,069		31,411
Construction	116,714		114,999
Commercial and Industrial	46,537		36,442
Secured credit card	95,854		37,517
Personal	634		43
Total	$	317,006	$	260,573

Commitments to originate residential loans held for sale	$	9,823	$	2,646

Letters of credit	$	5,102	$	5,305

Schedule of Credit Losses for Financing Receivables



Off Balance Sheet Reserve
(in thousands)	For the Three Months Ended				For the Nine Months Ended
	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
Balance at beginning of period	$	1,271	$	1,146	$	1,226	$	1,053
Provision for off balance sheet credit commitments	188		45		233		138
Balance at end of period	$	1,459	$	1,191	$	1,459	$	1,191



Mortgage Loan Put-back Reserve
(in thousands)	For the Three Months Ended					For the Nine Months Ended
	September 30, 2020		September 30, 2019			September 30, 2020			September 30, 2019
Balance at beginning of period	$	823	$	527		$	575		$	501
Provision for mortgage loan put backs	213		61			475			128
Charge-offs	—		(48		)	(14		)	(89		)
Balance at end of period	$	1,036	$	540		$	1,036		$	540

Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

The following table reports the commitment and fair value amounts on the outstanding derivatives:



Derivatives
(in thousands)	September 30, 2020			December 31, 2019
Notional amount of open forward sales agreements	$	66,000		$	61,000
Fair value of open forward delivery sales agreements	(278		)	(125		)
Notional amount of open mandatory delivery commitments	8,899			22,888
Fair value of open mandatory delivery commitments	158			115
Notional amount of interest rate lock commitments	42,906			32,365
Fair value of interest rate lock commitments	267			122

- Definition

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
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-Section 50
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Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=121590274&loc=SL5579245-113959

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-Name Accounting Standards Codification
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Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
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Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
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-URI http://asc.fasb.org/extlink&oid=121590274&loc=SL5579240-113959

+ Details

Leases (Tables)

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Assets And Liabilities, Lessee

The Company’s lease information is summarized as follows:



Leases
(in thousands)	September 30, 2020			December 31, 2019
Lease Right of Use Asset:
Lease asset	$	5,462		$	5,158
Less: Accumulated amortization	(1,974		)	(1,238		)
Net lease asset	$	3,488		$	3,920

Lease Liability:
Lease liability	$	3,837		$	4,291

Lessee, Operating Lease, Liability, Maturity

Future minimum payments for operating leases with initial or remaining terms of one year or more are as follows:



Lease Payment Obligations
(in thousands)	September 30, 2020
Amounts due in:
2020	$	361
2021	1,408
2022	1,023
2023	777
2024	420
Total future lease payments	3,989
Discount of cash flows	(152		)
Present value of net future lease payments	$	3,837

Fair Value (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The Company has categorized its financial instruments measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019 as follows:



Fair Value of Financial Instruments
(in thousands)
September 30, 2020	Total		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
Investment securities available for sale
Municipal	$	544	—		$	544	—
Corporate	4,270		—		4,270		—
Mortgage-backed securities	49,178		—		49,178		—
Total	$	53,992	$	—	$	53,992	$	—
Loans held for sale	$	137,717	$	—	$	137,717	$	—
Derivative assets	$	425	$	—	$	425	$	—
Derivative liabilities	$	278	$	—	$	278	$	—

December 31, 2019
Investment securities available for sale
U.S. government-sponsored enterprises	$	999	$	—	$	999	$	—
Municipal	528		—		528		—
Corporate	2,565		—		2,565		—
Mortgage-backed securities	56,736		—		56,736		—
Total	$	60,828	$	—	$	60,828	$	—
Loans held for sale	$	71,030	$	—	$	71,030	$	—
Derivative assets	$	237	$	—	$	237	$	—
Derivative liabilities	$	125	$	—	$	125	$	—

Schedule of Fair Value of Loans Held For Sale



Fair Value of Loans Held for Sale
(in thousands)	September 30, 2020		December 31, 2019
Aggregate fair value	$	137,717	$	71,030
Contractual principal	127,934		67,118
Difference	$	9,783	$	3,912

Fair Value Measurements, Nonrecurring

The Company has categorized its impaired loans and foreclosed real estate as follows:



Fair Value of Impaired Loans and Foreclosed Real Estate
(in thousands)	September 30, 2020		December 31, 2019
Impaired loans
Level 1 inputs	$	—	$	—
Level 2 inputs	—		—
Level 3 inputs	10,377		3,980
Total	$	10,377	$	3,980

Foreclosed real estate
Level 1 inputs	$	—	$	—
Level 2 inputs	—		—
Level 3 inputs	3,326		2,384
Total	$	3,326	$	2,384

Fair Value Measurement Inputs and Valuation Techniques

The following table provides information describing the unobservable inputs used in Level 3 fair value measurements at September 30, 2020 and December 31, 2019:



Unobservable Inputs
	Valuation Technique	Unobservable Inputs	Range of Inputs
	Valuation Technique	Unobservable Inputs	Range of Inputs
Impaired Loans	Appraised Value/Discounted Cash Flows	Discounts to appraisals or cash flows for estimated holding and/or selling costs	11 to 25%
Foreclosed Real Estate	Appraised Value/Comparable Sales	Discounts to appraisals for estimated holding and/or selling costs	11 to 25%

Fair Value Measurements, Recurring and Nonrecurring

The table below presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments.



Fair Value of Selected Financial Instruments
	September 30, 2020				December 31, 2019
(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets
Level 1
Cash and due from banks	$	20,138	$	20,138	$	10,530	$	10,530
Interest bearing deposits at other financial institutions	179,789		179,789		102,447		102,447
Federal funds sold	5,590		5,590		1,847		1,847
Level 3
Loans receivable, net ⁽¹⁾	$	1,455,946	$	1,467,771	$	1,157,820	$	1,155,922
Restricted investments	3,958		3,958		3,966		3,966

Financial liabilities
Level 1
Noninterest bearing deposits	$	596,239	$	596,239	$	291,777	$	291,777
Level 3
Interest bearing deposits	$	1,065,972	$	1,072,067	$	933,644	$	934,349
FHLB advances and other borrowed funds	39,738		39,663		47,645		47,678

________________________

⁽¹⁾

Includes SBA-PPP loans and portfolio loans.

Segments (Tables)

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

he following schedule presents financial information for each reportable segment at September 30, 2020.



Segments

For the Three Months Ended September 30, 2020
(in thousands)	Commercial Bank		CBHL		OpenSky^®		Corporate		Eliminations			Consolidated
Interest income	$	16,695	$	856	$	7,070	$	607	$	(39	)	$	25,189
Interest expense	2,214		565		—		410		(39		)	3,150
Net interest income	14,481		291		7,070		197		—			22,039
Provision for loan losses	3,123		—		377		—		—			3,500
Net interest income after provision	11,358		291		6,693		197		—			18,539
Noninterest income	164		15,209		5,773		—		—			21,146
Noninterest expense	9,148		8,912		9,974		85		—			28,119
Net income before taxes	$	2,374	$	6,588	$	2,492	$	112	$	—		$	11,566

Total assets	$	1,611,947	$	138,781	$	95,124	$	172,269	$	(139,092	)	$	1,879,029

For the Three Months Ended September 30, 2019
Interest income	$	15,878	$	896	$	5,180	$	400	$	—		$	22,354
Interest expense	3,888		277		—		5		—			4,170
Net interest income	11,990		619		5,180		395		—			18,184
Provision for loan losses	882		—		189		—		—			1,071
Net interest income after provision	11,108		619		4,991		395		—			17,113
Noninterest income	228		4,933		2,059		1		—			7,221
Noninterest expense	7,859		4,411		5,564		394		—			18,228
Net income before taxes	$	3,477	$	1,141	$	1,486	$	2	$	—		$	6,106

Total assets	$	1,157,332	$	70,110	$	46,694	$	148,016	$	(110,745	)	$	1,311,406



Segments

For the Nine Months Ended September 30, 2020
(in thousands)	Commercial Bank		CBHL		OpenSky^®		Corporate			Eliminations			Consolidated
Interest income	$	49,147	$	1,912	$	16,151	$	1,817		$	(94	)	$	68,933
Interest expense	8,536		1,161		—		980			(94		)	10,583
Net interest income	40,611		751		16,151		837			—			58,350
Provision for loan losses	8,399		—		810		—			—			9,209
Net interest income after provision	32,212		751		15,341		837			—			49,141
Noninterest income	574		30,356		10,694		2			—			41,626
Noninterest expense	26,039		19,634		22,700		292			—			68,665
Net income before taxes	$	6,747	$	11,473	$	3,335	$	547		$	—		$	22,102

Total assets	$	1,611,947	$	138,781	$	95,124	$	172,269		$	(139,092	)	$	1,879,029

For the Nine Months Ended September 30, 2019
Interest income	$	44,641	$	1,928	$	13,362	$	1,031		—			$	60,961
Interest expense	10,781		520		—		202			—			11,502
Net interest income	33,860		1,408		13,362		829			—			49,459
Provision for loan losses	1,283		—		536		50			—			1,869
Net interest income after provision	32,577		1,408		12,826		779			—			47,590
Noninterest income	573		11,142		5,521		4			—			17,240
Noninterest expense	22,271		10,472		14,799		1,226			—			48,768
Net income before taxes	$	10,879	$	2,078	$	3,548	$	(443	)	$	—		$	16,062

Total assets	$	1,157,332	$	70,110	$	46,694	$	148,016		$	(110,745	)	$	1,311,406

Nature of Business and Basis of Presentation - Basis of presentation (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($) segment	Sep. 30, 2019 segment	Dec. 31, 2019 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans outstanding	$ 1,222,597		$ 1,157,820
Number of reportable segments \| segment	4	4
Church Street Capital
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans outstanding	$ 4,300

Nature of Business and Basis of Presentation - SBA Paycheck Protection Program (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020	Dec. 31, 2019
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable, gross	$ 1,245,453	$ 1,245,453	$ 1,173,525
Commercial
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable, gross	134,889	134,889	$ 151,109
Commercial \| Paycheck Protection Program
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable, gross	238,700	238,700
Unearned net fees	(5,400)	(5,400)
Interest income	$ 1,500	$ 2,500

Nature of Business and Basis of Presentation - Premises and equipment (Details)	9 Months Ended
	Sep. 30, 2020
Premises and equipment \| Minimum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	2 years
Premises and equipment \| Maximum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	7 years
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	10 years

Nature of Business and Basis of Presentation - Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019	Jan. 01, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Right-of-use asset	$ 5,462	$ 5,158
Operating lease, liability	3,837	4,291
Adjustment to retained earnings	$ (97,580)	$ (81,618)
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Right-of-use asset			$ 5,500
Operating lease, liability			5,600
Accounting Standards Update 2016-02 \| Revision of Prior Period, Accounting Standards Update, Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Reclassification of deferred rent			146
Adjustment to retained earnings			$ 54

Nature of Business and Basis of Presentation - Earnings per Share (Details) - shares	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	510,550	273,600

Nature of Business and Basis of Presentation - Comprehensive Income (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Accumulated Other Comprehensive Income (Loss) [Line Items]
Total accumulated comprehensive income	$ 1,794	$ 13
Accumulated Net Investment Gain (Loss) Attributable to Parent
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive income (loss) before tax	2,475	18
Deferred tax benefit (expense)	(681)	(5)
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Income (Loss) [Line Items]
Total accumulated comprehensive income	$ 1,794	$ 13

- Definition

Accumulated change in equity from transactions and other events and circumstances from non-owner sources, net of tax effect, at period end. Excludes Net Income (Loss), and accumulated changes in equity from transactions resulting from investments by owners and distributions to owners. Includes foreign currency translation items, certain pension adjustments, unrealized gains and losses on certain investments in debt and equity securities, other than temporary impairment (OTTI) losses related to factors other than credit losses on available-for-sale and held-to-maturity debt securities that an entity does not intend to sell and it is not more likely than not that the entity will be required to sell before recovery of the amortized cost basis, as well as changes in the fair value of derivatives related to the effective portion of a designated cash flow hedge.

+ References + Details

Investment Securities - Amortized cost to Estimated Fair Value (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 51,517,000		$ 51,517,000		$ 60,811,000
Unrealized Gains	2,500,000		2,500,000		176,000
Unrealized Losses	(25,000)		(25,000)		(159,000)
Fair Value	53,992,000		53,992,000		60,828,000
Proceeds from sales of securities sold			0	$ 3,280,000
Realized gains on investment sales	0	$ 0	0	$ 26,000
U.S. government-sponsored enterprises
Debt Securities, Available-for-sale [Line Items]
Amortized Cost					1,000,000
Unrealized Gains					0
Unrealized Losses					(1,000)
Fair Value					999,000
Municipal
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	513,000		513,000		515,000
Unrealized Gains	31,000		31,000		13,000
Unrealized Losses	0		0		0
Fair Value	544,000		544,000		528,000
Corporate
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	4,260,000		4,260,000		2,542,000
Unrealized Gains	35,000		35,000		46,000
Unrealized Losses	(25,000)		(25,000)		(23,000)
Fair Value	4,270,000		4,270,000		2,565,000
Mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	46,744,000		46,744,000		56,754,000
Unrealized Gains	2,434,000		2,434,000		117,000
Unrealized Losses	0		0		(135,000)
Fair Value	$ 49,178,000		$ 49,178,000		$ 56,736,000

Investment Securities - Unrealized Losses (Details) $ in Thousands	Sep. 30, 2020 USD ($) security	Dec. 31, 2019 USD ($) security
Fair Value
Less than 12 months	$ 0	$ 21,487
12 months or longer	235	6,764
Total	235	28,251
Unrealized Losses
Less than 12 months	0	(78)
12 months or longer	(25)	(81)
Total	(25)	(159)
U.S. government-sponsored enterprises
Fair Value
Less than 12 months		0
12 months or longer		999
Total		999
Unrealized Losses
Less than 12 months		0
12 months or longer		(1)
Total		$ (1)
Number of securities in a loss position for greater than twelve months \| security		1
Corporate
Fair Value
Less than 12 months	0	$ 0
12 months or longer	235	519
Total	235	519
Unrealized Losses
Less than 12 months	0	0
12 months or longer	(25)	(23)
Total	$ (25)	$ (23)
Number of securities in a loss position for greater than twelve months \| security	1	2
Mortgage-backed securities
Fair Value
Less than 12 months		$ 21,487
12 months or longer		5,246
Total		26,733
Unrealized Losses
Less than 12 months		(78)
12 months or longer		(57)
Total		$ (135)
Number of securities in a loss position for greater than twelve months \| security		4

Investment Securities - Pledged Securities (Details) - Federal Home Loan Bank - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Amortized Cost
Assets Sold under Agreements to Repurchase [Line Items]
Securities pledged	$ 47,257	$ 1,508
Fair Value
Assets Sold under Agreements to Repurchase [Line Items]
Securities pledged	$ 49,722	$ 1,522

Investment Securities - by Maturity Dates (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Amortized Cost
Within one year	$ 0	$ 1,542
Over one to five years	0	0
Over five to ten years	4,000	2,000
Over ten years	773	515
Amortized Cost	51,517	60,811
Fair Value
Within one year	0	1,518
Over one to five years	0	0
Over five to ten years	4,035	2,046
Over ten years	779	528
Fair Value	53,992	60,828
Mortgage-backed securities
Amortized Cost
Amortized Cost	46,744	56,754
Fair Value
Fair Value	$ 49,178	$ 56,736

SBA-PPP Loans Receivable (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable, gross	$ 1,245,453	$ 1,173,525
Commercial
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable, gross	134,889	$ 151,109
Commercial \| Paycheck Protection Program
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable, gross	238,700
Unearned net fees	$ (5,400)

Portfolio Loans Receivable - Classification of Loans (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Dec. 31, 2018 USD ($)
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable, gross	$ 1,245,453		$ 1,173,525
Deferred origination fees, net	(840)		(2,404)
Allowance for loan losses	(22,016)	$ (18,679)	(13,301)	$ (12,808)	$ (11,913)	$ (11,308)
Portfolio loans receivable, net	1,222,597		1,157,820
Residential \| Real estate:
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable, gross	422,698		427,926
Allowance for loan losses	(6,981)	(6,244)	(4,135)	(4,176)	(3,915)	(3,541)
Commercial
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable, gross	134,889		151,109
Allowance for loan losses	(2,329)	(1,743)	(1,548)	(1,558)	(1,472)	(1,578)
Commercial \| Real estate:
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable, gross	372,972		348,091
Allowance for loan losses	$ (6,390)	(5,232)	(3,573)	(3,426)	(3,116)	(3,003)
Fixed interest rate term	5 years
Initial commitment term	10 years
Amortization period	25 years
Commercial \| Paycheck Protection Program
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable, gross	$ 238,700
Construction \| Real estate:
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable, gross	227,662		198,702
Allowance for loan losses	(4,489)	(3,952)	(2,668)	(2,377)	(2,204)	(2,093)
Consumer \| Credit card
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable, gross	84,964		46,412
Allowance for loan losses	(1,795)	(1,497)	(1,367)	(1,263)	(1,199)	(1,084)
Consumer \| Credit card \| Savings Deposits
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable, gross	$ 81,100		43,300
Repayment history used for scoring model	6 months
Consumer \| Other consumer
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable, gross	$ 2,268		1,285
Allowance for loan losses	$ (32)	$ (11)	$ (10)	$ (8)	$ (7)	$ (9)
Minimum \| Construction \| Real estate:
Loans and Leases Receivable Disclosure [Line Items]
Initial commitment term	12 months
Maximum \| Construction \| Real estate:
Loans and Leases Receivable Disclosure [Line Items]
Initial commitment term	18 months
Owner Occupied Real Estate \| Residential \| Real estate:
Loans and Leases Receivable Disclosure [Line Items]
Initial commitment term	30 years
Owner Occupied Real Estate \| Commercial \| Real estate:
Loans and Leases Receivable Disclosure [Line Items]
Loans receivable, gross	$ 181,200
Percent of real estate portfolio	48.60%
Owner Occupied Real Estate \| Construction \| Real estate:
Loans and Leases Receivable Disclosure [Line Items]
Principal to collateral value ratio, percent	80.00%
Owner Occupied Real Estate \| Minimum \| Residential \| Real estate:
Loans and Leases Receivable Disclosure [Line Items]
Fixed interest rate term	5 years
Owner Occupied Real Estate \| Maximum \| Residential \| Real estate:
Loans and Leases Receivable Disclosure [Line Items]
Fixed interest rate term	7 years
Investor Real Estate \| Residential \| Real estate:
Loans and Leases Receivable Disclosure [Line Items]
Initial commitment term	25 years
Balloon payment period	5 years
Debt service coverage ratio	1.15
Investor Real Estate \| Construction \| Real estate:
Loans and Leases Receivable Disclosure [Line Items]
Principal to collateral value ratio, percent	75.00%

Portfolio Loans Receivable - Accretable Discount (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Jun. 30, 2020	Dec. 31, 2019
Receivables [Abstract]
Remaining nonaccretable discounts on loans acquired	$ 285		$ 285			$ 285
Carrying value of loans with nonaccretable discounts					$ 841	$ 864
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Accretable discount at beginning of period	230	$ 424	429	$ 438
Less: Accretion and payoff of loans	(4)	(13)	(203)	(27)
Other changes, net			0	22
Accretable discount at end of period	$ 226	$ 433	$ 226	$ 433

Portfolio Loans Receivable - Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of year	$ 18,679	$ 11,913	$ 13,301	$ 11,308
Provision for loan losses	3,500	1,071	9,209	1,869
Charge-Offs	(170)	(182)	(519)	(393)
Recoveries	7	6	25	24
Balance at end of year	22,016	12,808	22,016	12,808
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Individually	574		574		$ 119
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively	21,442		21,442		13,182
Outstanding Loan Balances Evaluated for Impairment: Individually	10,951		10,951		4,099
Outstanding Loan Balances Evaluated for Impairment: Collectively	1,234,502		1,234,502		1,169,426
Residential \| Real estate:
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of year	6,244	3,915	4,135	3,541
Provision for loan losses	737	269	2,846	643
Charge-Offs	0	(8)	0	(8)
Recoveries	0	0	0	0
Balance at end of year	6,981	4,176	6,981	4,176
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Individually	0		0		0
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively	6,981		6,981		4,135
Outstanding Loan Balances Evaluated for Impairment: Individually	1,626		1,626		2,192
Outstanding Loan Balances Evaluated for Impairment: Collectively	421,072		421,072		425,734
Commercial
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of year	1,743	1,472	1,548	1,578
Provision for loan losses	671	140	892	62
Charge-Offs	(85)	(54)	(111)	(82)
Recoveries	0	0	0	0
Balance at end of year	2,329	1,558	2,329	1,558
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Individually	574		574		119
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively	1,755		1,755		1,429
Outstanding Loan Balances Evaluated for Impairment: Individually	1,395		1,395		474
Outstanding Loan Balances Evaluated for Impairment: Collectively	133,494		133,494		150,635
Commercial \| Real estate:
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of year	5,232	3,116	3,573	3,003
Provision for loan losses	1,158	307	2,817	413
Charge-Offs	0	0	0	0
Recoveries	0	3	0	10
Balance at end of year	6,390	3,426	6,390	3,426
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Individually	0		0		0
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively	6,390		6,390		3,572
Outstanding Loan Balances Evaluated for Impairment: Individually	1,466		1,466		1,433
Outstanding Loan Balances Evaluated for Impairment: Collectively	371,506		371,506		346,658
Construction \| Real estate:
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of year	3,952	2,204	2,668	2,093
Provision for loan losses	537	173	1,821	284
Charge-Offs	0	0	0	0
Recoveries	0	0	0	0
Balance at end of year	4,489	2,377	4,489	2,377
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Individually	0		0		0
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively	4,489		4,489		2,668
Outstanding Loan Balances Evaluated for Impairment: Individually	6,464		6,464		0
Outstanding Loan Balances Evaluated for Impairment: Collectively	221,198		221,198		198,702
Consumer \| Credit card
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of year	1,497	1,199	1,367	1,084
Provision for loan losses	376	181	811	468
Charge-Offs	(85)	(120)	(408)	(303)
Recoveries	7	3	25	14
Balance at end of year	1,795	1,263	1,795	1,263
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Individually	0		0		0
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively	1,795		1,795		1,368
Outstanding Loan Balances Evaluated for Impairment: Individually	0		0		0
Outstanding Loan Balances Evaluated for Impairment: Collectively	84,964		84,964		46,412
Consumer \| Other consumer
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of year	11	7	10	9
Provision for loan losses	21	1	22	(1)
Charge-Offs	0	0	0	0
Recoveries	0	0	0	0
Balance at end of year	32	$ 8	32	$ 8
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Individually	0		0		0
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively	32		32		10
Outstanding Loan Balances Evaluated for Impairment: Individually	0		0		0
Outstanding Loan Balances Evaluated for Impairment: Collectively	$ 2,268		$ 2,268		$ 1,285

Portfolio Loans Receivable - Past Due Financing Receivable (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	$ 21,101	$ 11,901
Current Loans	1,224,352	1,161,624
Total Portfolio Loans	1,245,453	1,173,525
Accruing Loans 90 or More Days Past Due	529	620
Non-accrual Loans	10,951	4,099
Residential Real Estate
Financing Receivable, Past Due [Line Items]
Total Portfolio Loans	11	481
Loans 30-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	16,912	7,433
Loans 90 or More Days Past Due
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	4,189	4,468
Acquired loans
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	576	1,548
Current Loans	5,141	4,873
Total Portfolio Loans	5,717	6,421
Accruing Loans 90 or More Days Past Due	230	464
Non-accrual Loans	393	880
Acquired loans \| Loans 30-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	0	305
Acquired loans \| Loans 90 or More Days Past Due
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	576	1,243
Residential \| Real estate:
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	2,288	3,140
Current Loans	420,410	424,786
Total Portfolio Loans	422,698	427,926
Accruing Loans 90 or More Days Past Due	0	374
Non-accrual Loans	1,626	2,192
Residential \| Real estate: \| Loans 30-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	708	704
Residential \| Real estate: \| Loans 90 or More Days Past Due
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	1,580	2,436
Commercial
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	748	525
Current Loans	134,141	150,584
Total Portfolio Loans	134,889	151,109
Accruing Loans 90 or More Days Past Due	0	0
Non-accrual Loans	1,395	474
Commercial \| Loans 30-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	425	172
Commercial \| Loans 90 or More Days Past Due
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	323	353
Commercial \| Real estate:
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	5,026	1,946
Current Loans	367,946	346,145
Total Portfolio Loans	372,972	348,091
Accruing Loans 90 or More Days Past Due	230	237
Non-accrual Loans	1,466	1,433
Commercial \| Real estate: \| Loans 30-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	3,331	275
Commercial \| Real estate: \| Loans 90 or More Days Past Due
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	1,695	1,671
Construction \| Real estate:
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	5,339	756
Current Loans	222,323	197,946
Total Portfolio Loans	227,662	198,702
Accruing Loans 90 or More Days Past Due	297	0
Non-accrual Loans	6,464	0
Construction \| Real estate: \| Loans 30-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	4,750	756
Construction \| Real estate: \| Loans 90 or More Days Past Due
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	589	0
Consumer \| Credit card
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	7,700	5,534
Current Loans	77,264	40,878
Total Portfolio Loans	84,964	46,412
Accruing Loans 90 or More Days Past Due	2	9
Non-accrual Loans	0	0
Consumer \| Credit card \| Loans 30-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	7,698	5,526
Consumer \| Credit card \| Loans 90 or More Days Past Due
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	2	8
Consumer \| Other consumer
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	0	0
Current Loans	2,268	1,285
Total Portfolio Loans	2,268	1,285
Accruing Loans 90 or More Days Past Due	0	0
Non-accrual Loans	0	0
Consumer \| Other consumer \| Loans 30-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	0	0
Consumer \| Other consumer \| Loans 90 or More Days Past Due
Financing Receivable, Past Due [Line Items]
Portfolio Loans Past Due	$ 0	$ 0

Portfolio Loans Receivable - Impaired Loans (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Financing Receivable, Impaired [Line Items]
Unpaid Contractual Principal Balance	$ 11,551		$ 11,551		$ 4,360
Recorded Investment With No Allowance	9,556		9,556		3,826
Recorded Investment With Allowance	1,395		1,395		273
Total Recorded Investment	10,951		10,951		4,099
Related Allowance	574		574		119
Average Recorded Investment	11,820	$ 6,908	11,785	$ 6,918
Interest Recognized	232	18	243	22
Acquired loans
Financing Receivable, Impaired [Line Items]
Unpaid Contractual Principal Balance	552		552		1,148
Recorded Investment With No Allowance	393		393		880
Recorded Investment With Allowance	0		0		0
Total Recorded Investment	393		393		880
Related Allowance	0		0		0
Residential \| Real estate:
Financing Receivable, Impaired [Line Items]
Unpaid Contractual Principal Balance	1,843		1,843		2,309
Recorded Investment With No Allowance	1,626		1,626		2,192
Recorded Investment With Allowance	0		0		0
Total Recorded Investment	1,626		1,626		2,192
Related Allowance	0		0		0
Average Recorded Investment	1,860	2,612	1,864	2,620
Interest Recognized	1	8	1	11
Commercial
Financing Receivable, Impaired [Line Items]
Unpaid Contractual Principal Balance	1,548		1,548		574
Recorded Investment With No Allowance	0		0		201
Recorded Investment With Allowance	1,395		1,395		273
Total Recorded Investment	1,395		1,395		474
Related Allowance	574		574		119
Average Recorded Investment	1,813	1,003	1,841	1,005
Interest Recognized	54	8	54	9
Commercial \| Real estate:
Financing Receivable, Impaired [Line Items]
Unpaid Contractual Principal Balance	1,594		1,594		1,477
Recorded Investment With No Allowance	1,466		1,466		1,433
Recorded Investment With Allowance	0		0		0
Total Recorded Investment	1,466		1,466		1,433
Related Allowance	0		0		0
Average Recorded Investment	1,616	1,160	1,618	1,161
Interest Recognized	8	2	10	2
Construction \| Real estate:
Financing Receivable, Impaired [Line Items]
Unpaid Contractual Principal Balance	6,566		6,566		0
Recorded Investment With No Allowance	6,464		6,464		0
Recorded Investment With Allowance	0		0		0
Total Recorded Investment	6,464		6,464		0
Related Allowance	0		0		0
Average Recorded Investment	6,531	2,133	6,462	2,132
Interest Recognized	169	$ 0	178	$ 0
Consumer \| Credit card
Financing Receivable, Impaired [Line Items]
Unpaid Contractual Principal Balance	0		0		0
Recorded Investment With No Allowance	0		0		0
Recorded Investment With Allowance	0		0		0
Total Recorded Investment	0		0		0
Related Allowance	0		0		0
Consumer \| Other consumer
Financing Receivable, Impaired [Line Items]
Unpaid Contractual Principal Balance	0		0		0
Recorded Investment With No Allowance	0		0		0
Recorded Investment With Allowance	0		0		0
Total Recorded Investment	0		0		0
Related Allowance	$ 0		$ 0		$ 0

Portfolio Loans Receivable - Trouble Debt Restructuring (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($) contract	Sep. 30, 2019 contract	Dec. 31, 2019 USD ($)
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts \| contract	5	5
Recorded Investment	$ 446		$ 459
Acquired loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts \| contract	3	3
Recorded Investment	$ 145		145
Residential \| Real estate:
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts \| contract	3	3
Recorded Investment	$ 145		145
Commercial
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Contracts \| contract	2	2
Recorded Investment	$ 301		314
Performing
Financing Receivable, Troubled Debt Restructuring [Line Items]
Recorded Investment	0		0
Performing \| Acquired loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Recorded Investment	0		0
Performing \| Residential \| Real estate:
Financing Receivable, Troubled Debt Restructuring [Line Items]
Recorded Investment	0		0
Performing \| Commercial
Financing Receivable, Troubled Debt Restructuring [Line Items]
Recorded Investment	0		0
Nonperforming
Financing Receivable, Troubled Debt Restructuring [Line Items]
Recorded Investment	446		459
Nonperforming \| Acquired loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Recorded Investment	145		145
Nonperforming \| Residential \| Real estate:
Financing Receivable, Troubled Debt Restructuring [Line Items]
Recorded Investment	145		145
Nonperforming \| Commercial
Financing Receivable, Troubled Debt Restructuring [Line Items]
Recorded Investment	$ 301		$ 314

Portfolio Loans Receivable - Outstanding Loan Commitments (Details) - Commitments to Extend Credit - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unused lines of credit	$ 317,006	$ 260,573
Letters of credit	5,102	5,305
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unused lines of credit	46,537	36,442
Commercial real estate \| Real estate:
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unused lines of credit	17,069	31,411
Commercial real estate \| Construction commitments
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unused lines of credit	116,714	114,999
Residential real estate \| Real estate:
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unused lines of credit	10,360	13,754
Residential real estate \| Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unused lines of credit	29,838	26,407
Residential real estate \| Residential loans held for sale
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unused lines of credit	9,823	2,646
Consumer \| Secured credit card
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unused lines of credit	95,854	37,517
Consumer \| Personal
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unused lines of credit	$ 634	$ 43

Portfolio Loans Receivable - Activity in Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at beginning of year	$ 18,679	$ 11,913	$ 13,301	$ 11,308
Provision charged to operating expense	3,500	1,071	9,209	1,869
Balance at end of year	22,016	12,808	22,016	12,808
Off Balance Sheet Reserve
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at beginning of year	1,271	1,146	1,226	1,053
Provision charged to operating expense	188	45	233	138
Balance at end of year	1,459	1,191	1,459	1,191
Mortgage Loan Put-back Reserve
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at beginning of year	823	527	575	501
Provision charged to operating expense	213	61	475	128
Charge-offs	0	(48)	(14)	(89)
Balance at end of year	$ 1,036	$ 540	$ 1,036	$ 540

Derivative Financial Instruments (Details) - Designated as Hedging Instrument - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Open Forward Delivery Sales Agreements
Derivatives, Fair Value [Line Items]
Notional amount	$ 66,000	$ 61,000
Fair amounts, liabilities	(278)	(125)
Open Mandatory Delivery Commitments
Derivatives, Fair Value [Line Items]
Notional amount	8,899	22,888
Fair value amounts, assets	158	115
Interest Rate Lock Commitments
Derivatives, Fair Value [Line Items]
Notional amount	42,906	32,365
Fair value amounts, assets	$ 267	$ 122

Leases - Additional Information (Details) $ in Thousands	9 Months Ended
Leases - Additional Information (Details) $ in Thousands	Sep. 30, 2020 USD ($) branch	Dec. 31, 2019 USD ($)	Jan. 01, 2019 branch
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of full service branches \| branch			5
Number of locations \| branch	5
Weighted average discount rate	2.23%	2.24%
ROU assets \| $	$ 3,488	$ 3,920
Related lease liabilities \| $	$ 3,800	$ 4,300
Minimum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Remaining term of contract	1 year
Maximum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Remaining term of contract	6 years

Leases - Assets and Liabilities and Lease Payment Obligations (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Leases [Abstract]
Lease asset	$ 5,462	$ 5,158
Less: Accumulated amortization	(1,974)	(1,238)
Net lease asset	3,488	3,920
Operating lease, liability	$ 3,837	4,291
Operating lease, liability, statement of financial position [Extensible List]	us-gaap:OtherLiabilities
Amounts due in:
2020	$ 361
2021	1,408
2022	1,023
2023	777
2024	420
Total future lease payments	3,989
Discount of cash flows	(152)
Present value of net future lease payments	$ 3,837	$ 4,291

Fair Value - Financial Instruments Measured at FV on Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	$ 53,992	$ 60,828
Loans held for sale	137,717	71,030
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	53,992	60,828
Loans held for sale	137,717	71,030
Derivative assets	425	237
Derivative liabilities	278	125
Fair Value, Measurements, Recurring \| Level 1 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Loans held for sale	0	0
Derivative assets	0	0
Derivative liabilities	0	0
Fair Value, Measurements, Recurring \| Level 2 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	53,992	60,828
Loans held for sale	137,717	71,030
Derivative assets	425	237
Derivative liabilities	278	125
Fair Value, Measurements, Recurring \| Level 3 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Loans held for sale	0	0
Derivative assets	0	0
Derivative liabilities	0	0
U.S. government-sponsored enterprises
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale		999
U.S. government-sponsored enterprises \| Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale		999
U.S. government-sponsored enterprises \| Fair Value, Measurements, Recurring \| Level 1 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale		0
U.S. government-sponsored enterprises \| Fair Value, Measurements, Recurring \| Level 2 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale		999
U.S. government-sponsored enterprises \| Fair Value, Measurements, Recurring \| Level 3 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale		0
Municipal
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	544	528
Municipal \| Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	544	528
Municipal \| Fair Value, Measurements, Recurring \| Level 1 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Municipal \| Fair Value, Measurements, Recurring \| Level 2 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	544	528
Municipal \| Fair Value, Measurements, Recurring \| Level 3 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Corporate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	4,270	2,565
Corporate \| Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	4,270	2,565
Corporate \| Fair Value, Measurements, Recurring \| Level 1 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Corporate \| Fair Value, Measurements, Recurring \| Level 2 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	4,270	2,565
Corporate \| Fair Value, Measurements, Recurring \| Level 3 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	49,178	56,736
Mortgage-backed securities \| Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	49,178	56,736
Mortgage-backed securities \| Fair Value, Measurements, Recurring \| Level 1 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	0	0
Mortgage-backed securities \| Fair Value, Measurements, Recurring \| Level 2 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	49,178	56,736
Mortgage-backed securities \| Fair Value, Measurements, Recurring \| Level 3 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available for sale	$ 0	$ 0

Fair Value - Loans Held For Sale (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans Held for Sale	$ 137,717	$ 71,030
Aggregate fair value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans Held for Sale	137,717	71,030
Contractual principal
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans Held for Sale	127,934	67,118
Difference
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans Held for Sale	$ 9,783	$ 3,912

Fair Value - Impaired Loans and Foreclosed Real Estate (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, net	$ 1,395	$ 273
Impaired loans, valuation allowance	574	119
Impaired loans	10,951	4,099
Foreclosed real estate	3,326	2,384
Fair Value, Measurements, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	10,377	3,980
Foreclosed real estate	3,326	2,384
Fair Value, Measurements, Nonrecurring \| Level 1 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Foreclosed real estate	0	0
Fair Value, Measurements, Nonrecurring \| Level 2 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Foreclosed real estate	0	0
Fair Value, Measurements, Nonrecurring \| Level 3 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, net	11,000	4,100
Impaired loans, valuation allowance	574	119
Impaired loans	10,377	3,980
Foreclosed real estate	$ 3,326	$ 2,384
Minimum \| Level 3 Inputs \| Measurement Input, Cost to Sell \| Valuation Technique, Discounted Cash Flow
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discounts to appraisals or cash flows for estimated holding and/or selling costs (percent)	11.00%
Minimum \| Level 3 Inputs \| Measurement Input, Cost to Sell \| Valuation Technique, Consensus Pricing Model
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discounts to appraisals for estimated holding and/or selling costs (percent)	11.00%
Maximum \| Level 3 Inputs \| Measurement Input, Cost to Sell \| Valuation Technique, Discounted Cash Flow
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discounts to appraisals or cash flows for estimated holding and/or selling costs (percent)	25.00%
Maximum \| Level 3 Inputs \| Measurement Input, Cost to Sell \| Valuation Technique, Consensus Pricing Model
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discounts to appraisals for estimated holding and/or selling costs (percent)	25.00%

Fair Value - Financial Instruments Carrying Amount, FV and Placement (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Financial assets
Cash and due from banks	$ 20,138	$ 10,530
Interest bearing deposits at other financial institutions	179,789	102,447
Federal funds sold	5,590	1,847
Carrying Amount \| Level 1
Financial assets
Cash and due from banks	20,138	10,530
Interest bearing deposits at other financial institutions	179,789	102,447
Federal funds sold	5,590	1,847
Restricted investments	3,958	3,966
Financial liabilities
Noninterest bearing deposits	596,239	291,777
Carrying Amount \| Level 3
Financial assets
Loans receivable, net (1)	1,455,946	1,157,820
Financial liabilities
Interest bearing deposits	1,065,972	933,644
FHLB advances and other borrowed funds	39,738	47,645
Fair Value \| Level 1
Financial assets
Cash and due from banks	20,138	10,530
Interest bearing deposits at other financial institutions	179,789	102,447
Federal funds sold	5,590	1,847
Restricted investments	3,958	3,966
Financial liabilities
Noninterest bearing deposits	596,239	291,777
Fair Value \| Level 3
Financial assets
Loans receivable, net (1)	1,467,771	1,155,922
Financial liabilities
Interest bearing deposits	1,072,067	934,349
FHLB advances and other borrowed funds	$ 39,663	$ 47,678

Segments (Details) $ in Thousands	3 Months Ended		9 Months Ended
Segments (Details) $ in Thousands	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) segment	Sep. 30, 2019 USD ($) segment	Dec. 31, 2019 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments \| segment			4	4
Interest income	$ 25,189	$ 22,354	$ 68,933	$ 60,961
Interest expense	3,150	4,170	10,583	11,502
Net interest income	22,039	18,184	58,350	49,459
Provision charged to operating expense	3,500	1,071	9,209	1,869
Net interest income after provision for loan losses	18,539	17,113	49,141	47,590
Noninterest income	21,146	7,221	41,626	17,240
Noninterest expense	28,119	18,228	68,665	48,768
Income before income taxes	11,566	6,106	22,102	16,062
Total assets	1,879,029	1,311,406	1,879,029	1,311,406	$ 1,428,495
Operating Segments \| Commercial Bank
Segment Reporting Information [Line Items]
Interest income	16,695	15,878	49,147	44,641
Interest expense	2,214	3,888	8,536	10,781
Net interest income	14,481	11,990	40,611	33,860
Provision charged to operating expense	3,123	882	8,399	1,283
Net interest income after provision for loan losses	11,358	11,108	32,212	32,577
Noninterest income	164	228	574	573
Noninterest expense	9,148	7,859	26,039	22,271
Income before income taxes	2,374	3,477	6,747	10,879
Total assets	1,611,947	1,157,332	1,611,947	1,157,332
Operating Segments \| CBHL
Segment Reporting Information [Line Items]
Interest income	856	896	1,912	1,928
Interest expense	565	277	1,161	520
Net interest income	291	619	751	1,408
Provision charged to operating expense	0	0	0	0
Net interest income after provision for loan losses	291	619	751	1,408
Noninterest income	15,209	4,933	30,356	11,142
Noninterest expense	8,912	4,411	19,634	10,472
Income before income taxes	6,588	1,141	11,473	2,078
Total assets	138,781	70,110	138,781	70,110
Operating Segments \| OpenSky®
Segment Reporting Information [Line Items]
Interest income	7,070	5,180	16,151	13,362
Interest expense	0	0	0	0
Net interest income	7,070	5,180	16,151	13,362
Provision charged to operating expense	377	189	810	536
Net interest income after provision for loan losses	6,693	4,991	15,341	12,826
Noninterest income	5,773	2,059	10,694	5,521
Noninterest expense	9,974	5,564	22,700	14,799
Income before income taxes	2,492	1,486	3,335	3,548
Total assets	95,124	46,694	95,124	46,694
Operating Segments \| Corporate
Segment Reporting Information [Line Items]
Interest income	607	400	1,817	1,031
Interest expense	410	5	980	202
Net interest income	197	395	837	829
Provision charged to operating expense	0	0	0	50
Net interest income after provision for loan losses	197	395	837	779
Noninterest income	0	1	2	4
Noninterest expense	85	394	292	1,226
Income before income taxes	112	2	547	(443)
Total assets	172,269	148,016	172,269	148,016
Eliminations
Segment Reporting Information [Line Items]
Interest income	(39)	0	(94)	0
Interest expense	(39)	0	(94)	0
Net interest income	0	0	0	0
Provision charged to operating expense	0	0	0	0
Net interest income after provision for loan losses	0	0	0	0
Noninterest income	0	0	0	0
Noninterest expense	0	0	0	0
Income before income taxes	0	0	0	0
Total assets	$ (139,092)	$ (110,745)	$ (139,092)	$ (110,745)

Label	Element	Value
Accounting Standards Update [Extensible List]	us-gaap_AccountingStandardsUpdateExtensibleList	us-gaap:AccountingStandardsUpdate201811Member

- Definition

Indicates amendment to accounting standards.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 65
-Paragraph 8
-Subparagraph (d)(2)

Reference 32: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 65
-Paragraph 8
-Subparagraph (d)(3)

+ Details

Portfolio Loans Receivable - Credit Quality Indicators (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	$ 1,245,453	$ 1,173,525
Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	1,202,456	1,157,551
Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	30,565	10,850
Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	12,432	5,124
Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	0	0
Residential \| Real estate:
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	422,698	427,926
Residential \| Real estate: \| Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	411,957	425,661
Residential \| Real estate: \| Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	8,245	0
Residential \| Real estate: \| Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	2,496	2,265
Residential \| Real estate: \| Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	0	0
Commercial
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	134,889	151,109
Commercial \| Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	121,707	145,178
Commercial \| Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	10,965	4,505
Commercial \| Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	2,217	1,426
Commercial \| Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	0	0
Commercial \| Real estate:
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	372,972	348,091
Commercial \| Real estate: \| Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	361,474	340,313
Commercial \| Real estate: \| Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	10,243	6,345
Commercial \| Real estate: \| Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	1,255	1,433
Commercial \| Real estate: \| Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	0	0
Construction \| Real estate:
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	227,662	198,702
Construction \| Real estate: \| Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	220,086	198,702
Construction \| Real estate: \| Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	1,112	0
Construction \| Real estate: \| Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	6,464	0
Construction \| Real estate: \| Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	0	0
Consumer \| Credit card
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	84,964	46,412
Consumer \| Credit card \| Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	84,964	46,412
Consumer \| Credit card \| Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	0	0
Consumer \| Credit card \| Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	0	0
Consumer \| Credit card \| Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	0	0
Consumer \| Other consumer
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	2,268	1,285
Consumer \| Other consumer \| Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	2,268	1,285
Consumer \| Other consumer \| Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	0	0
Consumer \| Other consumer \| Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	0	0
Consumer \| Other consumer \| Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Loans receivable, net of allowance for loan losses of $15,514 and $13,301 at March 31, 2020 and December 31, 2019, respectively	$ 0	$ 0