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EX-32.1 - EX-32.1 - MVB FINANCIAL CORPmvbf-20150930ex3212ae61a.htm
EX-31.1 - EX-31.1 - MVB FINANCIAL CORPmvbf-20150930ex311743dd2.htm
EX-31.2 - EX-31.2 - MVB FINANCIAL CORPmvbf-20150930ex312af093b.htm
EX-32.2 - EX-32.2 - MVB FINANCIAL CORPmvbf-20150930ex32245ec6a.htm

 

United States

Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[  X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

 

OR

 

[     ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from               to                 .

Commission File number 000-50567

MVB Financial Corp.

(Exact name of registrant as specified in its charter)

 

 

 

West Virginia

20-0034461

(State or other jurisdiction of incorporation or organization)

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

 

301 Virginia Avenue

Fairmont, West Virginia  26554-2777

(Address of principal executive offices)

304-363-4800

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address, and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant has (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  [ X ]                         No  [    ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  [ X ]                         No  [    ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check One):

Large accelerated filer

Accelerated filer    [ X ]

Non-accelerated filer                            

Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)

Yes  [     ]                         No  [ X ]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

As of November 5, 2015, the number of shares outstanding of the issuer’s only class of common stock was 8,061,921.

 

 


 

MVB Financial Corp.

Table of Contents

 

 

 

Part I. 

Financial Information

 

 

Item 1. 

Financial Statements

 

 

 

The unaudited interim consolidated financial statements of MVB Financial Corp. (“the Company” or “MVB”) and subsidiaries (“Subsidiaries”) including MVB Bank, Inc. (the “Bank” or “MVB Bank”) and its wholly-owned subsidiary Potomac Mortgage Group, Inc., which does business as  MVB Mortgage (“MVB Mortgage”) and MVB Insurance, LLC (“MVB Insurance”) listed below are included on pages 3-38 of this report.

 

 

 

Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014

 

Consolidated Statements of Income for the Nine Months and Three Months ended September 30, 2015 and 2014

 

Consolidated Statements of Comprehensive Income for the Nine Months and Three Months ended September 30, 2015 and 2014

 

Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2015 and 2014

 

Notes to Consolidated Financial Statements

 

 

Item 2. 

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

 

 

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations are included on pages 39-53 of this report.

 

 

Item 3. 

Quantitative and Qualitative Disclosures About Market Risk.

 

 

Item 4. 

Controls and Procedures

 

 

Part II. 

Other Information

 

 

Item 1. 

Legal Proceedings

 

 

Item 1A. 

Risk Factors

 

 

Item 2. 

Unregistered Sales of Equity Securities and Use of Proceeds.

 

 

Item 3. 

Defaults Upon Senior Securities

 

 

Item 4. 

Mine Safety Disclosures

 

 

Item 5. 

Other Information

 

 

Item 6. 

Exhibits

 

 

 

2


 

Part I. Financial Information

Item 1. Financial Statements

MVB Financial Corp. and Subsidiaries

Consolidated Balance Sheets  

(Dollars in thousands except per share data)

 

 

 

 

 

 

 

 

 

 

    

September 30,

    

December 31,

 

 

 

2015

 

2014

 

 

 

(Unaudited)

 

(Note 1)

 

Assets

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

 

 

Cash and due from banks

 

$

16,522

 

$

13,403

 

Interest bearing balances

 

 

8,613

 

 

16,674

 

Total cash and cash equivalents

 

 

25,135

 

 

30,077

 

Certificates of deposits in other banks

 

 

13,150

 

 

11,907

 

Investment securities:

 

 

 

 

 

 

 

Securities available-for-sale

 

 

68,158

 

 

68,213

 

Securities held-to-maturity (fair value of $53,923 for 2015 and $55,871 for 2014)

 

 

52,969

 

 

54,538

 

Loans held for sale

 

 

73,047

 

 

69,527

 

Loans:

 

 

994,833

 

 

798,297

 

Less: Allowance for loan losses

 

 

(7,388)

 

 

(6,223)

 

Net loans

 

 

987,445

 

 

792,074

 

Bank premises, furniture and equipment

 

 

26,292

 

 

25,472

 

Bank owned life insurance

 

 

22,172

 

 

21,679

 

Accrued interest receivable and other assets

 

 

19,681

 

 

19,193

 

Goodwill

 

 

18,480

 

 

17,779

 

Total assets

 

$

1,306,529

 

$

1,110,459

 

Liabilities

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

Non-interest bearing

 

$

87,244

 

$

67,066

 

Interest bearing

 

 

931,011

 

 

756,161

 

Total deposits

 

 

1,018,255

 

 

823,227

 

 

 

 

 

 

 

 

 

Accrued interest, taxes and other liabilities

 

 

11,591

 

 

10,310

 

Repurchase agreements

 

 

26,562

 

 

32,673

 

FHLB and other borrowings

 

 

102,468

 

 

101,287

 

Subordinated debt

 

 

33,524

 

 

33,524

 

Total liabilities

 

 

1,192,400

 

 

1,001,021

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

Preferred stock, par value $1,00020,783 authorized and 9,283 issued in 2015 and 2014, respectively

 

 

16,334

 

 

16,334

 

Common stock, par value $1;  20,000,000 shares authorized; 8,112,998 and 8,034,362 issued; and 8,061,921 and 7,983,285 outstanding in 2015 and 2014, respectively

 

 

8,113

 

 

8,034

 

Additional paid-in capital

 

 

74,123

 

 

74,342

 

Retained earnings

 

 

18,958

 

 

14,454

 

Accumulated other comprehensive loss

 

 

(2,315)

 

 

(2,642)

 

Treasury stock, 51,077 shares, at cost

 

 

(1,084)

 

 

(1,084)

 

Total stockholders’ equity

 

 

114,129

 

 

109,438

 

Total liabilities and stockholders’ equity

 

$

1,306,529

 

$

1,110,459

 

 

See accompanying notes to unaudited financial statements.

3


 

 

MVB Financial Corp. and Subsidiaries

Consolidated Statements of Income

(Unaudited) (Dollars in thousands except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended

 

Three months ended 

 

 

 

September 30,

 

September 30,

 

 

 

2015

 

2014

 

2015

 

2014

 

Interest income

    

 

    

    

 

    

    

 

    

    

 

    

 

Interest and fees on loans

 

$

29,187

 

$

23,322

 

$

10,584

 

$

8,161

 

Interest on deposits with other banks

 

 

198

 

 

150

 

 

71

 

 

53

 

Interest on investment securities – taxable

 

 

674

 

 

1,022

 

 

213

 

 

253

 

Interest on tax exempt loans and securities

 

 

1,689

 

 

2,138

 

 

548

 

 

627

 

Total interest income

 

 

31,748

 

 

26,632

 

 

11,416

 

 

9,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

4,554

 

 

4,133

 

 

1,665

 

 

1,337

 

Repurchase agreements

 

 

62

 

 

262

 

 

18

 

 

29

 

FHLB and other borrowings

 

 

493

 

 

399

 

 

159

 

 

126

 

Subordinated debt

 

 

1,648

 

 

589

 

 

556

 

 

544

 

Total interest expense

 

 

6,757

 

 

5,383

 

 

2,398

 

 

2,036

 

Net interest income

 

 

24,991

 

 

21,249

 

 

9,018

 

 

7,058

 

Provision for loan losses

 

 

1,856

 

 

2,192

 

 

636

 

 

783

 

Net interest income after provision for loan losses

 

 

23,135

 

 

19,057

 

 

8,382

 

 

6,275

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

471

 

 

500

 

 

175

 

 

183

 

Income on bank owned life insurance

 

 

492

 

 

424

 

 

160

 

 

169

 

Visa debit card and interchange income

 

 

684

 

 

573

 

 

244

 

 

203

 

Mortgage fee income

 

 

23,881

 

 

12,491

 

 

8,955

 

 

4,948

 

Gain on sale of portfolio loans

 

 

1,119

 

 

1,549

 

 

319

 

 

216

 

Insurance and investment services income

 

 

3,805

 

 

2,745

 

 

1,142

 

 

909

 

Gain on sale of securities

 

 

130

 

 

396

 

 

4

 

 

271

 

Gain (loss) on derivatives

 

 

67

 

 

548

 

 

(2,039)

 

 

(391)

 

Gain on sale of other real estate owned

 

 

654

 

 

57

 

 

618

 

 

 —

 

Other operating income

 

 

596

 

 

119

 

 

376

 

 

72

 

Total noninterest income

 

 

31,899

 

 

19,402

 

 

9,954

 

 

6,580

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Salary and employee benefits

 

 

30,131

 

 

22,327

 

 

10,203

 

 

7,598

 

Occupancy expense

 

 

2,657

 

 

2,036

 

 

902

 

 

732

 

Equipment depreciation and maintenance

 

 

1,524

 

 

1,111

 

 

557

 

 

400

 

Data processing and communications

 

 

2,945

 

 

2,114

 

 

1,075

 

 

733

 

Mortgage processing

 

 

2,310

 

 

1,706

 

 

774

 

 

596

 

Marketing, contributions and sponsorships

 

 

1,094

 

 

828

 

 

398

 

 

293

 

Professional fees

 

 

2,217

 

 

1,522

 

 

936

 

 

645

 

Printing, postage and supplies

 

 

566

 

 

579

 

 

210

 

 

186

 

Insurance, tax and assessment expense

 

 

1,283

 

 

1,147

 

 

436

 

 

423

 

Travel, entertainment, dues and subscriptions

 

 

1,237

 

 

1,003

 

 

485

 

 

330

 

Other operating expenses

 

 

1,138

 

 

866

 

 

448

 

 

279

 

Total noninterest expense

 

 

47,102

 

 

35,239

 

 

16,424

 

 

12,215

 

Income before income taxes

 

 

7,932

 

 

3,220

 

 

1,912

 

 

640

 

Income tax expense

 

 

2,518

 

 

556

 

 

506

 

 

103

 

Net income

 

$

5,414

 

$

2,664

 

$

1,406

 

$

537

 

Preferred dividends

 

 

430

 

 

187

 

 

145

 

 

144

 

Net income available to common shareholders

 

$

4,984

 

$

2,477

 

$

1,261

 

$

393

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – basic

 

$

0.62

 

$

0.31

 

$

0.16

 

$

0.05

 

Earnings per share – diluted

 

$

0.62

 

$

0.31

 

$

0.16

 

$

0.05

 

Weighted average shares outstanding - basic

 

 

7,998,203

 

 

7,863,820

 

 

8,023,549

 

 

8,032,362

 

Weighted average shares outstanding - diluted

 

 

8,606,354

 

 

8,077,895

 

 

8,631,700

 

 

8,246,437

 

 

See accompanying notes to unaudited financial statements.

4


 

MVB Financial Corp. and Subsidiaries

Consolidated Statements of Comprehensive Income

(Unaudited)(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended

 

Three months ended 

 

 

 

September 30,

 

September 30,

 

 

 

2015

 

2014

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

    

$

5,414

    

$

2,664

    

$

1,406

    

$

537

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized holding gains during the year

 

 

549

 

 

1,855

 

 

433

 

 

209

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax effect

 

 

(220)

 

 

(742)

 

 

(174)

 

 

(83)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reclassification adjustment for gain recognized in income

 

 

(130)

 

 

(396)

 

 

(4)

 

 

(271)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax effect

 

 

52

 

 

159

 

 

2

 

 

108

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in defined benefit pension plan

 

 

127

 

 

(505)

 

 

(400)

 

 

(190)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax effect

 

 

(51)

 

 

202

 

 

160

 

 

76

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

327

 

 

573

 

 

17

 

 

(151)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income

 

$

5,741

 

$

3,237

 

$

1,423

 

$

386

 

 

See accompanying notes to unaudited financial statements.

 

 

 

5


 

MVB Financial Corp. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited) (Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

Nine months ended

 

 

 

September 30,

 

September 30,

 

 

 

2015

 

2014

 

Operating activities

    

 

    

    

 

    

  

Net income

 

$

5,414

 

$

2,664

 

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

 

 

 

 

 

 

 

Net amortization and accretion of investments

 

 

586

 

 

628

 

Net amortization of deferred loan fees

 

 

(110)

 

 

166

 

Provision for loan losses

 

 

1,856

 

 

2,192

 

Depreciation and amortization

 

 

1,437

 

 

898

 

Stock based compensation

 

 

308

 

 

222

 

Loans originated for sale

 

 

(1,047,432)

 

 

(596,844)

 

Proceeds of loans sold

 

 

1,067,793

 

 

647,905

 

Mortgage fee income

 

 

(23,881)

 

 

(12,491)

 

Gain on sale of investment securities

 

 

(130)

 

 

(396)

 

Income on bank owned life insurance

 

 

(492)

 

 

(424)

 

Deferred taxes

 

 

118

 

 

(1,016)

 

Other, net

 

 

799

 

 

(1,405)

 

Net cash provided by operating activities

 

 

6,266

 

 

42,099

 

Investing activities

 

 

 

 

 

 

 

Purchases of investment securities available-for-sale

 

 

(28,212)

 

 

(24,268)

 

Purchases of investment securities held-to-maturity

 

 

 —

 

 

(250)

 

Maturities/paydowns of investment securities held-to-maturity

 

 

865

 

 

1,000

 

Maturities/paydowns of investment securities available-for-sale

 

 

15,601

 

 

6,533

 

Sales of investment securities available-for-sale

 

 

12,912

 

 

54,268

 

Sales of investment securities held-to-maturity

 

 

421

 

 

 —

 

Purchases of premises and equipment

 

 

(1,648)

 

 

(7,985)

 

Net increase in loans

 

 

(177,798)

 

 

(139,999)

 

Gain on sale of portfolio loans

 

 

(1,119)

 

 

(1,549)

 

Purchases of restricted bank stock

 

 

(17,431)

 

 

(8,080)

 

Redemptions of restricted bank stock

 

 

16,977

 

 

9,602

 

Proceeds from sale of certificates of deposit with banks

 

 

248

 

 

 —

 

Purchase of certificates of deposit with banks

 

 

(1,491)

 

 

 —

 

Proceeds from sale of other real estate owned

 

 

1,132

 

 

76

 

Branch acquisition, net cash acquired

 

 

48,292

 

 

 —

 

Purchase of bank owned life insurance

 

 

 —

 

 

(5,000)

 

Net cash used in investing activities

 

 

(131,251)

 

 

(115,652)

 

Financing activities

 

 

 

 

 

 

 

Net increase in deposits

 

 

126,331

 

 

150,510

 

Net (decrease) in repurchase agreements

 

 

(6,111)

 

 

(47,684)

 

Net change in short-term FHLB borrowings

 

 

3,335

 

 

(48,062)

 

Principal payments on FHLB borrowings

 

 

(2,154)

 

 

(1,120)

 

Proceeds from subordinated debt

 

 

 —

 

 

29,400

 

Proceeds from stock offering

 

 

 —

 

 

5,617

 

Preferred stock issuance

 

 

 —

 

 

7,834

 

Dividend reinvestment plan proceeds

 

 

 —

 

 

180

 

Common stock options exercised

 

 

(448)

 

 

48

 

Cash dividends paid on common stock

 

 

(480)

 

 

(317)

 

Cash dividends paid on preferred stock

 

 

(430)

 

 

(187)

 

Net cash provided by financing activities

 

 

120,043

 

 

96,219

 

(Decrease) in cash and cash equivalents

 

 

(4,942)

 

 

22,666

 

Cash and cash equivalents at beginning of period

 

 

30,077

 

 

39,843

 

Cash and cash equivalents at end of period

 

$

25,135

 

$

62,509

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information

    

 

    

    

 

    

 

 

 

 

 

 

 

 

 

Loans transferred to other real estate owned

 

$

174

 

$

346

 

Cashless stock options exercised

 

$

1,180

 

$

 —

 

Cash payments for:

 

 

 

 

 

 

 

Interest on deposits, repurchase agreements and borrowings

 

$

8,278

 

$

6,444

 

Income taxes

 

$

2,400

 

$

1,600

 

See accompanying notes to unaudited financial statements.

 

6


 

MVB Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

 

 

Note 1 – Basis of Presentation

 

These consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with instructions to Form 10‑Q.  Accordingly, they do not include all the information and footnotes required by GAAP for annual year-end financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation, have been included and are of a normal, recurring nature. The consolidated balance sheet as of December 31, 2014 has been derived from audited financial statements included in the Company’s 2014 filing on Form 10-K.  Operating results for the nine and three months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.

 

The accounting and reporting policies of MVB Financial Corp. (“the Company” or “MVB”) and its subsidiaries (“Subsidiaries”), including MVB Bank, Inc. (the “Bank”), the Bank’s subsidiary Potomac Mortgage Group, Inc., which does business as MVB Mortgage (“MVB Mortgage”) and MVB Insurance, LLC, conform to accounting principles generally accepted in the United States and practices in the banking industry. The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates, such as the allowance for loan losses, are based upon known facts and circumstances. Estimates are revised by management in the period such facts and circumstances change.  Actual results could differ from those estimates. All significant inter-company accounts and transactions have been eliminated in consolidation. 

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted. These financial statements should be read in conjunction with the financial statements and notes thereto included in MVB’s December 31, 2014, Form 10-K filed with the Securities and Exchange Commission.

 

In certain instances, amounts reported in prior periods’ consolidated financial statements have been reclassified to conform to the current presentation. Specifically, a portion of the prior periods’ interest income and interest expense was classified as gain on loans held for sale and has been reclassified in the current presentation.

 

Information is presented in these notes with dollars expressed in thousands, unless otherwise noted or specified.

 

Note 2 – Recent Accounting Pronouncements 

 

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). These amendments affect any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g. insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance, and creates a Topic 606, Revenue from Contracts with Customers. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This ASU will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is not permitted. The ASU allows for either full retrospective or modified retrospective adoption. We are evaluating the transition method that will be elected and the potential effects of the adoption of the ASU on our financial statements.

 

 

7


 

In June 2014, the FASB issued ASU No. 2014-11, "Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures." The new guidance aligns the accounting for repurchase-to-maturity transactions and repurchase agreements executed as repurchase financings with the accounting for other typical repurchase agreements. Going forward, these transactions would all be accounted for as secured borrowings. The guidance eliminates sale accounting for repurchase-to-maturity transactions and supersedes the guidance under which a transfer of a financial asset and a contemporaneous repurchase financing could be accounted for on a combined basis as a forward agreement, which has resulted in outcomes referred to as off-balance-sheet accounting. The amendments in the ASU require a new disclosure for transactions economically similar to repurchase agreements in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets throughout the term of the transaction. The amendments in the ASU also require expanded disclosures, effective for the current reporting period of June 30, 2015, about the nature of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings (see Note 5 to the Consolidated Financial Statements). The Company adopted the amendments in this ASU effective January 1, 2015. As of June 30, 2015, all of the Company's repurchase agreements were typical in nature (i.e., not repurchase-to-maturity transactions or repurchase agreements executed as a repurchase financing) and are accounted for as secured borrowings. As such, the adoption of ASU No. 2014-11 did not have a material impact on the Company's Consolidated Financial Statements but resulted in additional disclosures.

 

In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): “Amendments to the Consolidation Analysis.”  The amendments modify the evaluation reporting organizations must perform to determine if certain legal entities should be consolidated as VIEs. Specifically, the amendments: (1) Modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities; (2) Eliminate the presumption that a general partner should consolidate a limited partnership; (3) Affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships; and (4) Provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. ASU No. 2015-02 is effective for interim and annual reporting periods beginning after December 15, 2015. The Company is currently evaluating the provisions of ASU No. 2015-02 to determine the potential impact the new standard will have on the Company's consolidated financial statements.

Note 3 – Investments

Amortized cost and fair values of investment securities held-to-maturity at September 30, 2015, including gross unrealized gains and losses, are summarized as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Amortized

    

Unrealized

    

Unrealized

    

Fair

 

(in thousands)

 

Cost

 

Gain

 

Loss

 

Value

 

Municipal securities

 

$

52,969

 

$

1,336

 

$

(382)

 

$

53,923

 

Total investment securities held-to-maturity

 

$

52,969

 

$

1,336

 

$

(382)

 

$

53,923

 

 

Amortized cost and fair values of investment securities held-to-maturity at December 31, 2014, including gross unrealized gains and losses, are summarized as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Amortized

    

Unrealized

    

Unrealized

    

Fair

 

(in thousands)

 

Cost

 

Gain

 

Loss

 

Value

 

Municipal securities

 

$

54,538

 

$

1,600

 

$

(267)

 

$

55,871

 

Total investment securities held–to-maturity

 

$

54,538

 

$

1,600

 

$

(267)

 

$

55,871

 

 

Amortized cost and fair values of investment securities available-for-sale at September 30, 2015 are summarized as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8


 

 

    

Amortized

    

Unrealized

    

Unrealized

    

Fair

 

(in thousands)

 

Cost

 

Gain

 

Loss

 

Value

 

U.S. Agency securities

 

$

32,104

 

$

20

 

$

(34)

 

$

32,090

 

U.S. Sponsored Mortgage-backed securities

 

 

35,044

 

 

23

 

 

(355)

 

 

34,712

 

Municipal securities

 

 

459

 

 

 —

 

 

 —

 

 

459

 

Total debt securities

 

 

67,607

 

 

43

 

 

(389)

 

 

67,261

 

Equity and other securities

 

 

809

 

 

88

 

 

 —

 

 

897

 

Total investment securities available-for-sale

 

$

68,416

 

$

131

 

$

(389)

 

$

68,158

 

 

Amortized cost and fair values of investment securities available-for-sale at December 31, 2014 are summarized as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Amortized

    

Unrealized

    

Unrealized

    

Fair

 

(in thousands)

 

Cost

 

Gain

 

Loss

 

Value

 

U.S. Agency securities

 

$

37,926

 

$

73

 

$

(465)

 

$

37,534

 

U.S. Sponsored Mortgage-backed securities

 

 

30,293

 

 

58

 

 

(419)

 

 

29,932

 

Total debt securities

 

 

68,219

 

 

131

 

 

(884)

 

 

67,466

 

Equity and other securities

 

 

670

 

 

77

 

 

 —

 

 

747

 

Total investment securities available-for-sale

 

$

68,889

 

$

208

 

$

(884)

 

$

68,213

 

 

The following tables summarize amortized cost and fair values of debt securities by maturity at September 30, 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity

 

Available for sale

 

 

    

Amortized

    

Fair

    

Amortized

    

Fair

 

 

 

Cost

 

Value

 

Cost

 

Value

 

Within one year

 

$

 —

 

$