Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 23, 2017 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | BANK OF SOUTH CAROLINA CORP | ||
Entity Central Index Key | 1,007,273 | ||
Document Type | 10-K | ||
Trading Symbol | BKSC | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 51,069,297 | ||
Entity Common Stock, Shares Outstanding | 4,962,189 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
ASSETS | ||
Cash and due from banks | $ 8,141,030 | $ 5,295,924 |
Interest-bearing deposits in other banks | 18,101,300 | 23,898,862 |
Investment securities available for sale (amortized cost of $120,942,615 and $118,422,116 in 2016 and 2015, respectively) | 119,978,944 | 119,997,585 |
Mortgage loans to be sold | 4,386,210 | 5,820,239 |
Loans | 260,576,115 | 242,622,705 |
Less: Allowance for loan losses | (3,851,617) | (3,417,827) |
Net loans | 256,724,498 | 239,204,878 |
Premises, equipment and leasehold improvements, net | 2,296,624 | 2,289,228 |
Other real estate owned | 521,943 | 620,394 |
Accrued interest receivable | 1,614,002 | 1,284,063 |
Other assets | 2,185,085 | 761,339 |
Total assets | 413,949,636 | 399,172,512 |
Deposits: | ||
Non-interest-bearing demand | 126,034,478 | 122,073,396 |
Interest-bearing demand | 96,260,589 | 84,977,640 |
Money market accounts | 77,307,662 | 70,233,422 |
Time deposits over $250,000 | 17,822,136 | 25,896,768 |
Other time deposits | 26,019,121 | 28,871,044 |
Other savings deposits | 29,078,865 | 26,666,342 |
Total deposits | 372,522,851 | 358,718,612 |
Accrued interest payable and other liabilities | 813,811 | 1,302,188 |
Total liabilities | 373,336,662 | 360,020,800 |
Shareholders' Equity | ||
Common stock-no par, 12,000,000 shares authorized; 5,197,535 and 5,157,996 shares issued at December 31, 2016 and 2015, respectively; 4,956,139 and 4,916,600 shares outstanding at December 31, 2016 and 2015, respectively | ||
Additional paid in capital | 36,824,022 | 36,341,744 |
Retained earnings | 6,643,476 | 4,064,834 |
Treasury stock: 241,396 shares at December 31, 2016 and 2015 | (2,247,415) | (2,247,415) |
Accumulated other comprehensive income (loss), net of income taxes | (607,109) | 992,549 |
Total shareholders' equity | 40,612,974 | 39,151,712 |
Total liabilities and shareholders' equity | $ 413,949,636 | $ 399,172,512 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Amorization cost for investment securities available for sale | $ 120,942,615 | $ 118,422,116 |
Common Stock, no par value (in dollars per share) | ||
Common Stock, shares authorized | 12,000,000 | 12,000,000 |
Common Stock, shares issued | 5,197,535 | 5,157,996 |
Common Stock, shares outstanding | 4,956,139 | 4,916,600 |
Treasury stock, shares | 241,396 | 241,396 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Interest and fee income | |||
Loans, including fees | $ 12,851,900 | $ 11,795,303 | $ 11,263,048 |
Taxable securities | 1,297,636 | 1,376,441 | 1,045,592 |
Tax-exempt securities | 1,007,438 | 1,012,638 | 1,059,883 |
Other | 138,623 | 45,566 | 49,731 |
Total interest and fee income | 15,295,597 | 14,229,948 | 13,418,254 |
Interest expense | |||
Deposits | 378,733 | 401,463 | 408,266 |
Short-term borrowings | 7 | 932 | 681 |
Total interest expense | 378,740 | 402,395 | 408,947 |
Net interest income | 14,916,857 | 13,827,553 | 13,009,307 |
Provision for loan losses | 570,000 | 192,500 | 82,500 |
Net interest income after provision for loan losses | 14,346,857 | 13,635,053 | 12,926,807 |
Other income | |||
Service charges, fees and commissions | 1,061,349 | 991,007 | 921,638 |
Mortgage banking income | 1,387,740 | 1,605,676 | 1,315,020 |
Gain on sale of securities | 380,904 | 423,832 | 312,577 |
Other non-interest income | 31,090 | 29,443 | 29,466 |
Total other income | 2,861,083 | 3,049,958 | 2,578,701 |
Other expense | |||
Salaries and employee benefits | 6,087,929 | 5,859,203 | 5,466,446 |
Net occupancy expense | 1,528,048 | 1,480,606 | 1,473,700 |
Net other real estate owned expenses | 16,691 | 5,284 | 16,440 |
Other operating expenses | 2,639,776 | 2,168,382 | 2,152,236 |
Total other expenses | 10,272,444 | 9,513,475 | 9,108,822 |
Income before income tax expense | 6,935,496 | 7,171,536 | 6,396,686 |
Income tax expense | 1,688,433 | 2,287,248 | 1,997,866 |
Net income | $ 5,247,063 | $ 4,884,288 | $ 4,398,820 |
Weighted average shares outstanding | |||
Basic (in shares) | 4,935,349 | 4,912,499 | 4,907,208 |
Diluted (in shares) | 5,054,114 | 5,067,085 | 5,032,211 |
Basic income per common share (in dollars per share) | $ 1.06 | $ 0.99 | $ 0.90 |
Diluted income per common share (in dollars per share) | $ 1.04 | $ 0.96 | $ 0.87 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 5,247,063 | $ 4,884,288 | $ 4,398,820 |
Other comprehensive income (loss): | |||
Unrealized gain (loss) on securities arising during the period | (2,158,236) | 26,255 | 768,326 |
Reclassification adjustment for securities gains realized in net income | (380,904) | (423,832) | (312,577) |
Other comprehensive income (loss), before tax | (2,539,140) | (397,577) | 455,749 |
Income tax effect related to items of other comprehensive income (loss) | 939,482 | 147,104 | (168,627) |
Other comprehensive income (loss), after tax | (1,599,658) | (250,473) | 287,122 |
Total comprehensive income | $ 3,647,405 | $ 4,633,815 | $ 4,685,942 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | ADDITIONAL PAID IN CAPITAL [Member] | RETAINED EARNINGS [Member] | TREASURY STOCK [Member] | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [Member] | Total |
Beginning Balance at Dec. 31, 2013 | $ 28,678,150 | $ 7,007,532 | $ (1,902,439) | $ 955,900 | $ 34,739,143 |
Net income | 4,398,820 | 4,398,820 | |||
Other comprehensive income (loss) | 287,122 | 287,122 | |||
Exercise of stock options | 26,050 | 26,050 | |||
Stock-based compensation expense | 74,908 | 74,908 | |||
Cash dividends | (2,766,061) | (2,766,061) | |||
Ending balance at Dec. 31, 2014 | 28,779,108 | 8,640,291 | (1,902,439) | 1,243,022 | 36,759,982 |
Net income | 4,884,288 | 4,884,288 | |||
Other comprehensive income (loss) | (250,473) | (250,473) | |||
Exercise of stock options | 122,946 | 122,946 | |||
10% stock dividend 446,597 common 21,945 treasury at $15.72 | 7,360,703 | (7,020,505) | (344,976) | (4,778) | |
Stock-based compensation expense | 78,987 | 78,987 | |||
Cash dividends | (2,439,240) | (2,439,240) | |||
Ending balance at Dec. 31, 2015 | 36,341,744 | 4,064,834 | (2,247,415) | 992,549 | 39,151,712 |
Net income | 5,247,063 | 5,247,063 | |||
Other comprehensive income (loss) | (1,599,658) | (1,599,658) | |||
Exercise of stock options | 405,749 | 405,749 | |||
Stock-based compensation expense | 76,529 | 76,529 | |||
Cash dividends | (2,668,421) | (2,668,421) | |||
Ending balance at Dec. 31, 2016 | $ 36,824,022 | $ 6,643,476 | $ (2,247,415) | $ (607,109) | $ 40,612,974 |
CONSOLIDATED STATEMENTS OF SHA7
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Common stock dividends, shares | 446,597 | ||
Treasury stock, shares | 21,945 | ||
Stock dividend per dollar amount | $ 15.72 | ||
Exercise of Stock Options | 39,539 | 9,378 | 2,750 |
Cash dividends | $ 0.54 | $ 0.52 | $ 0.62 |
Common Stock - Pre Stock Dividend [Member] | |||
Exercise of Stock Options | 8,615 | 2,500 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net income | $ 5,247,063 | $ 4,884,288 | $ 4,398,820 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 189,188 | 196,827 | 200,178 |
Gain on sale of securities | (380,904) | (423,832) | (312,577) |
(Loss) gain on sale of other real estate | 13,450 | (2,382) | |
Provision for loan losses | 570,000 | 192,500 | 82,500 |
Stock-based compensation expense | 76,529 | 78,987 | 74,908 |
Deferred income taxes | (750,254) | 4,748 | 134,478 |
Net amortization of unearned discounts on investment securities | 250,755 | 109,311 | 303,036 |
Origination of mortgage loans held for sale | (76,032,671) | (91,053,923) | (71,767,800) |
Proceeds from sale of mortgage loans held for sale | 77,466,700 | 92,558,765 | 69,182,061 |
(Increase) decrease in accrued interest receivable and other assets | (63,949) | 391,043 | (274,201) |
Increase (decrease) in accrued interest payable and other liabilities | (543,083) | 176,898 | 153,882 |
Net cash provided by operating activities | 6,042,824 | 7,115,612 | 2,172,903 |
Cash flows from investing activities: | |||
Proceeds from calls and maturities of investment securities available for sale | 9,630,804 | 2,315,000 | 1,920,000 |
Proceeds from sale of available for sale securities | 36,218,087 | 16,564,118 | 37,159,363 |
Purchase of investment securities available for sale | (48,239,241) | (25,389,485) | (57,959,964) |
Proceeds from sale of other real estate | 85,001 | 37,855 | |
Net increase in loans | (18,089,620) | (8,712,885) | (16,394,833) |
Purchase of premises, equipment and leasehold improvements, net | (196,584) | (133,632) | (97,740) |
Net cash used by investing activities | (20,591,553) | (15,356,884) | (35,335,319) |
Cash flows from financing activities: | |||
Net increase in deposit accounts | 13,804,239 | 36,299,585 | 17,176,372 |
Net (decrease) increase in short-term borrowings | (6,980,681) | 6,980,681 | |
Dividends paid | (2,613,715) | (2,380,062) | (2,765,735) |
Stock options exercised | 405,749 | 122,946 | 26,050 |
Cash in lieu of fractional shares | (4,778) | ||
Net cash (used) provided by financing activities | 11,596,273 | 27,057,010 | 21,417,368 |
Net increase (decrease) in cash and cash equivalents | (2,952,456) | 18,815,738 | (11,745,048) |
Cash and cash equivalents at beginning of year | 29,194,786 | 10,379,048 | 22,124,096 |
Cash and cash equivalents at end of year | 26,242,330 | 29,194,786 | 10,379,048 |
Cash paid during the year for: | |||
Interest | 400,531 | 419,004 | 429,758 |
Income taxes | 2,320,830 | 2,196,000 | 1,819,000 |
Supplemental disclosure for non-cash investing and financing activity: | |||
Change in unrealized gain (loss) on securities available for sale, net of income taxes | (1,599,658) | (250,473) | 287,122 |
Change in dividends payable | 54,706 | 59,178 | 325 |
Transfer of loans to other real estate owned | $ 186,210 | $ 521,943 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | 1. ORGANIZATION The Bank of South Carolina (the “Bank”) was organized on October 22, 1986 and opened for business as a state-chartered financial institution on February 26, 1987, in Charleston, South Carolina. The Bank was reorganized into a wholly-owned subsidiary of Bank of South Carolina Corporation (the “Company”), effective April 17, 1995. At the time of the reorganization, each outstanding share of the Bank was exchanged for two shares of Bank of South Carolina Corporation Stock. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Our accounting and reporting policies conform, in all material respects, to U.S. generally accepted accounting principles (“GAAP”), and to general practices within the banking industry. The following summarizes the more significant of these policies and practices. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Bank of South Carolina Corporation (the “Company”) and its wholly-owned subsidiary, The Bank of South Carolina (the “Bank”). In consolidation, all significant intercompany balances and transactions have been eliminated. References to “we”, “us”, “our”, “the Bank”, or “the Company” refer to the parent and its subsidiary that are consolidated for financial purposes. We provide financial services through our four banking house locations: 256 Meeting Street, Charleston, SC, 100 North Main Street, Summerville, SC, 1337 Chuck Dawley Boulevard, Mt. Pleasant, SC and 2027 Sam Rittenberg Boulevard, Charleston, SC. Our primary deposit products are checking, savings, and term certificate accounts, and our primary lending products are residential mortgage, commercial, and installment loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. There are no significant concentrations of loans to any one industry or customer. However, the customers’ ability to repay their loans may be dependent on the general economic conditions in the area. Accounting Estimates and Assumptions The preparation of the financial statements are in conformity with GAAP, which require management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ significantly from these estimates and assumptions. Material estimates generally susceptible to significant change are related to the determination of the allowance for loan losses, impaired loans, other real estate owned, asset prepayment rates and other-than-temporary impairment of investment securities. Reclassification: Certain amounts in the prior years’ financial statements have been reclassified to conform to the current year’s presentation. Such reclassifications had no effect on shareholders’ equity or the net income as previously reported. 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. We have reviewed events occurring through the date the financial statements were available to be issued and no subsequent events occurred requiring accrual or disclosure. Cash and Cash Equivalents Cash and cash equivalents include working cash funds, due from banks, interest-bearing deposits in other banks, items in process of collection and federal funds sold. All cash equivalents are readily convertible to cash and have maturities of less than 90 days. Depository institutions are required to maintain reserve and clearing balances at the Federal Reserve Bank. Vault cash satisfied our daily reserve requirement for the years ended December 31, 2016 and 2015, respectively. Interest-bearing Deposits in Other Financial Institutions: Interest-bearing deposits in other financial institutions mature within one year and are carried at cost. Investment Securities We classify investments into three categories as follows: (1) Held to Maturity - debt securities that we have the positive intent and ability to hold to maturity, which are reported at amortized cost, adjusted for the amortization of any related premiums or the accretion of any related discounts into interest income using a methodology which approximates a level yield of interest over the estimated remaining period until maturity, (2) Trading - debt and equity securities that are bought and held principally for the purpose of selling them in the near term, which are reported at fair value, with unrealized gains and losses included in earnings, and (3) Available for Sale - debt and equity securities that may be sold under certain conditions, which are reported at fair value, with unrealized gains and losses excluded from earnings and reported as a separate component of shareholders’ equity, net of income taxes. Unrealized losses on securities due to fluctuations in fair value are recognized when it is determined that an other than temporary decline in value has occurred. Realized gains or losses on the sale of investments are recognized on a specific identification, trade date basis. All securities were classified as available for sale for 2016 and 2015. We do not have any mortgage-backed securities nor have we ever invested in mortgage-backed securities. Mortgage Loans to be Sold: We originate fixed and variable rate residential mortgage loans on a service release basis in the secondary market. Loans closed but not yet settled with an investor are carried in our loans held for sale portfolio. Virtually all of these loans have commitments to be purchased by investors and the majority of these loans were locked in by price with the investors on the same day or shortly thereafter that the loan was locked in with our customers. Therefore, these loans present very little market risk. We usually deliver to, and receive funding from, the investor within 30 to 60 days. Commitments to sell these loans to the investor are considered derivative contracts and are sold to investors on a “best efforts” basis. We are not obligated to deliver a loan or pay a penalty if a loan is not delivered to the investor. As a result of the short-term nature of these derivative contracts, the fair value of the mortgage loans held for sale in most cases is the same as the value of the loan amount at its origination . Mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated market value in the aggregate. Net unrealized losses are provided for in a valuation allowance by charges to operations as a component of mortgage banking income. Gains or losses on sales of loans are recognized when control over these assets has been surrendered and are included in mortgage banking income in the consolidated statements of operations. Loans and Allowance for Loan Losses Loans are carried at principal amounts outstanding. Loan origination fees, net of certain direct origination costs, are deferred and recognized over the weighted average life of the loan as an adjustment to yield. Interest income on all loans is recorded on an accrual basis. The accrual of interest and the amortization of net loan fees are generally discontinued on loans which 1) are maintained on a cash basis because of deterioration in the financial condition of the borrower; 2) for which payment of full principal is not expected; or 3) upon which principal or interest has been in default for a period of 90 days or more. We define past due loans based on contractual payment and maturity dates. The accrual of interest is generally discontinued on loans that become 90 days past due as to principal or interest. The accrual of interest on some loans, however, may continue even though they are 90 days past due if the loans are well secured or in the process of collection and management deems it appropriate. If non-accrual loans decrease their past due status to less than 30 days for a period of six to nine months, they are reviewed individually by management to determine if they should be returned to accrual status. When the ultimate collectability of an impaired loan’s principal is in doubt, wholly or partially, all cash receipts are applied to principal. Once the recorded principal balance has been reduced to zero, future cash receipts are applied to interest income, to the extent that any interest has been foregone. Further cash receipts are recorded as recoveries of any amounts previously charged off. When this doubt does not exist, cash receipts are applied under the contractual terms of the loan agreement first to interest income and then to principal. We account for impaired loans by requiring that all loans (greater than $50,000) for which it is estimated that we will be unable to collect all amounts due according to the terms of the loan agreement be recorded at the loan’s fair value. Fair value may be determined based upon the present value of expected future cash flows discounted at the loan’s effective interest rate, or the fair value of the collateral less cost to sell, if the loan is collateral dependent. Additional accounting guidance allows us to use existing methods for recognizing interest income on an impaired loan. The guidance also requires additional disclosures about how we estimate interest income related to our impaired loans. A loan is also considered impaired if its terms are modified in a troubled debt restructuring (“TDR”). For this type of impaired loan, cash receipts are typically applied to principal and interest receivable in accordance with the terms of the restructured loan agreement. Interest income is recognized on these loans using the accrual method of accounting, provided they are performing in accordance with their restructured terms. The allowance for loan losses is our estimate of credit losses inherent in the loan portfolio. The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when we believe the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is evaluated on a regular basis and is based upon our periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. We believe that the allowance is adequate to absorb inherent losses in the loan portfolio; however, there can be no assurance that loan losses in future periods will not exceed the current allowance amount or that future increases in the allowance will not be required. No assurance can be given that our ongoing evaluation of the loan portfolio, in light of changing economic conditions and other relevant circumstances, will not require significant future additions to the allowance, thus adversely affecting our operating results. The allowance is also subject to examination by regulatory agencies, which may consider such factors as the methodology used to determine adequacy and the size of the allowance relative to that of peer institutions and other adequacy tests. In addition, such regulatory agencies could require us to adjust our allowance based on information available at the time of the examination. The methodology used to determine the reserve for unfunded lending commitments, which is included in other liabilities, is inherently similar to the methodology used to determine the allowance for loan losses adjusted for factors specific to binding commitments, including the probability of funding and historical loss ratio. Concentration of Credit Risk: Our primary market consists of the counties of Berkeley, Charleston and Dorchester, South Carolina. At December 31, 2016, the majority of the total loan portfolio, as well as a substantial portion of the commercial and real estate loan portfolios, were to borrowers within this region. No other areas of significant concentration of credit risk have been identified. Premises, Equipment and Leasehold Improvements and Depreciation Land is carried at cost. Buildings and equipment are stated at cost less accumulated depreciation. Depreciation is recorded using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes over the estimated useful lives of the assets ranging from 40 years for buildings and 3 to 15 years for equipment. Leasehold improvements are amortized over the shorter of the asset’s useful life or the remaining lease term, including renewal periods when reasonably assured. The cost of maintenance and repairs is charged to operating expense as incurred. Other Real Estate Owned Real estate properties acquired through foreclosure are initially recorded at the lower of the recorded investment in the loan or fair value less costs to sell. Losses arising from the initial foreclosure are charged against the allowance for loan losses. Subsequent to foreclosure, real estate owned is recorded at the lower of cost or fair value, adjusted for net selling costs. Fair value is based upon independent market prices, appraised values of the collateral, or our estimation of the value of the collateral. Gains and losses on the sale of other real estate owned (“OREO”) and subsequent write-downs from periodic re-evaluation are charged to net other real estate owned expenses. Income Taxes We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Net deferred tax assets are included in other assets in the consolidated balance sheet. Accounting standards require the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. These standards also prescribe a recognition threshold and measurement of a tax position taken or expected to be taken in an enterprise’s tax return. We believe that we had no uncertain tax positions for the years ended December 31, 2016 and 2015. Stock-Based Compensation Compensation cost is recognized for stock options issued to employees, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options. Compensation cost is recognized over the required service period, generally defined as the vesting period (10 years). Income Per Common Share Basic income per share is computed by dividing net income by the weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares and potential common shares outstanding. Potential common shares consist of dilutive stock options determined using the treasury stock method and the average market price of common stock. Earnings per share are restated for all stock splits and stock dividends through the date of issuance of the financial statements. Comprehensive Income We apply accounting standards which establish guidance for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income consists of net income and net unrealized gains or losses on securities. Segment Information The Company operates and manages itself within one retail banking segment and has, therefore, not provided segment disclosures. Interest Rate Lock Commitments and Forward Sale Contracts Commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans are accounted for as free-standing derivatives. The fair value of the interest rate lock is recorded at the time the commitment to fund the mortgage loan is executed and is adjusted for the expected exercise of the commitments before the loan is funded. In order to hedge the change in interest rates resulting from commitments to fund the loans, we enter into forward commitments for the future delivery of mortgage loans when the interest rate is locked. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest on the loan is locked. Changes in the fair values of these derivatives are included in income when they occur. As a result of the short-term nature of mortgage loans held for sale (derivative contract), our derivative instruments were considered to be immaterial as of December 31, 2016 and 2015. We had no embedded derivative instruments requiring hedge accounting treatment at December 31, 2016. We do not currently engage in hedging activities. Recent Accounting Pronouncements: The following is a summary of recent authoritative pronouncements that could impact the accounting, reporting and/or disclosure of financial information by the Company. In May 2014, the FASB issued guidance to change the recognition of revenue from contracts with customers. The core principle of the new guidance is that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. This guidance also includes expanded disclosure requirements that result in an entity providing users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. In August 2015, the FASB deferred the effective date of the amendments. As a result of the deferral, the guidance will be effective for the Company for reporting periods beginning after December 15, 2017. We will apply this guidance using a modified retrospective approach. We do not expect this amendment to have a material effect on our consolidated financial statements. In June 2014, the FASB issued guidance which makes limited amendments to the guidance on accounting for certain repurchase agreements. The new guidance (1) requires entities to account for repurchase-to-maturity transactions as secured borrowings (rather than as sales with forward repurchase agreements), (2) eliminates accounting guidance on linked repurchase financing transactions, and (3) expands disclosure requirements related to certain transfers of financial assets that are accounted for as sales and certain transfers (specifically, repos, securities lending transactions, and repurchase-to-maturity transactions) accounted for as secured borrowings. The amendments became effective for the Company for the first interim or annual period beginning after December 31, 2014. We applied the guidance by making a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. This adjustment did not have a material effect on our financial statements. In January 2015, the FASB issued guidance to eliminate from U.S. GAAP the concept of an extraordinary item, which is an event or transaction that is both (1) unusual in nature and (2) infrequently occurring. Under the new guidance, an entity will no longer (1) segregate an extraordinary item from the results of ordinary operations; (2) separately present an extraordinary item on its income statement, net of tax, after income from continuing operations; or (3) disclose income taxes and earnings-per-share data applicable to an extraordinary item. The amendments were effective January 1, 2016 and did not have a material effect on our financial statements. In February 2015, the FASB issued guidance which amends the consolidation requirements and significantly changes the consolidation analysis required under U.S. GAAP. Although the amendments are expected to result in the deconsolidation of many entities, the Company will need to reevaluate all its previous consolidation conclusions. The amendments were effective January 1, 2016 and did not have a material effect on our financial statements. In June 2015, the FASB issued amendments to clarify the Accounting Standards Codification (ASC), correct unintended application of guidance, and make minor improvements to the ASC that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The amendments were effective upon issuance (June 12, 2015) for amendments that do not have transition guidance. Amendments that are subject to transition guidance were effective January 1, 2016 and did not have a material effect on our financial statements. In August 2015, the FASB issued amendments to the Interest topic of the Accounting Standards Codification to clarify the SEC staff’s position on presenting and measuring debt issuance costs incurred in connection with line-of-credit arrangements. The amendments were effective upon issuance. The Company does not expect these amendments to have a material effect on its financial statements. In January 2016, the FASB amended the Financial Instruments topic of the Accounting Standards Codification to address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We will apply the guidance by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal ear of adoption. The amendments related to equity securities without readily determinable fair values will be applied prospectively to equity investments that exist as of the date of adoption of the amendments. We do not expect this amendment to have a material effect on our financial statements. In February 2016, the FASB amended the Leases topic of the Accounting Standards Codification to require all leases with lease terms over 12 months to be capitalized as a right-of-use asset and lease liability on the balance sheet at the date of lease commencement. Leases will be classified as either finance leases or operating leases. This distinction will be relevant for the pattern of expense recognition in the income statement. The amendments will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of this guidance on its financial statements. In March 2016, the FASB amended the Revenue from Contracts with Customers topic of the Accounting Standards Codification to clarify the implementation guidance on principal versus agent considerations and address how an entity should assess whether it is the principal or the agent in contracts that include three or more parties. The amendments will be effective for the Company for reporting periods beginning after December 15, 2017. The Company does not expect these amendments to have a material effect on its financial statements. In March 2016, the FASB issued guidance to simplify several aspects of the accounting for share-based payment award transactions including the income tax consequences, the classification of awards as either equity or liabilities, and the classification on the statement of cash flows. Additionally, the guidance simplifies two areas specific to entities other than public business entities allowing them apply a practical expedient to estimate the expected term for all awards with performance or service conditions that have certain characteristics and also allowing them to make a one-time election to switch from measuring all liability-classified awards at fair value to measuring them at intrinsic value. The amendments were effective January 1, 2017. The Company does not expect these amendments to have a material effect on its financial statements. In April 2016, the FASB amended the Revenue from Contracts with Customers topic of the Accounting Standards Codification to clarify guidance related to identifying performance obligations and accounting for licenses of intellectual property. The amendments will be effective for the Company for reporting periods beginning after December 15, 2017. The Company does not expect these amendments to have a material effect on its financial statements. In May 2016, the FASB amended the Revenue from Contracts with Customers topic of the Accounting Standards Codification to clarify guidance related to collectability, noncash consideration, presentation of sales tax, and transition. The amendments will be effective for the Company for reporting periods beginning after December 15, 2017. The Company does not expect these amendments to have a material effect on its financial statements. In June 2016, the FASB issued guidance to change the accounting for credit losses and modify the impairment model for certain debt securities. The guidance requires a financial asset (including trade receivables) measured at amortized cost basis to be presented at the net amount expected to be collected. Thus, the income statement will reflect the measurement of credit losses for newly-recognized financial assets as well as the expected increases or decreases of expected credit losses that have taken place during the period. The amendments will be effective for the Company for reporting periods beginning after December 15, 2019. Early adoption is permitted for all organizations for periods beginning after December 15, 2018. The Company is currently in the process of evaluating the impact of adoption of this guidance on its financial statements. In August 2016, the FASB amended the Statement of Cash Flows topic of the Accounting Standards Codification to clarify how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments will be effective for the Company for fiscal years beginning after December 15, 2017, 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 October 2016, the FASB amended the Income Taxes topic of the Accounting Standards Codification to modify the accounting for intra-entity transfers of assets other than inventory. The amendments will be effective for the Company for fiscal years beginning after December 15, 2017, 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 October 2016, the FASB amended the Consolidation topic of the Accounting Standards Codification to revise the consolidation guidance on how a reporting entity that is the single decision maker of a variable interest entity (VIE) should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The amendments will be effective for the Company for fiscal years beginning after December 15, 2016, 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 November 2016, the FASB amended the Statement of Cash Flows topic of the Accounting Standards Codification to clarify how restricted cash is presented and classified in the statement of cash flows. The amendments will be effective for the Company for fiscal years beginning after December 15, 2017, 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 December 2016, the FASB issued amendments to clarify the Accounting Standards Codification (ASC), correct unintended application of guidance, and make minor improvements to the ASC that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The amendments were effective upon issuance (December 14, 2016) for amendments that do not have transition guidance. Amendments that are subject to transition guidance were effective January 1, 2017. The Company does not expect these amendments to have a material effect on its financial statements. In December 2016, the FASB issued technical corrections and improvements to the Revenue from Contracts with Customers Topic. These corrections make a limited number of revisions to several pieces of the revenue recognition standard issued in 2014. The effective date and transition requirements for the technical corrections will be effective for the Company for reporting periods beginning after December 15, 2017. The Company does not expect these amendments to have a material effect on its financial statements. 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 our financial position, results of operations or cash flows. |
INVESTMENT SECURITIES AVAILABLE
INVESTMENT SECURITIES AVAILABLE FOR SALE | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES AVAILABLE FOR SALE | 3. INVESTMENT SECURITIES AVAILABLE FOR SALE The amortized cost and fair value of investment securities available for sale are summarized as follows: DECEMBER 31, 2016 AMORTIZED COST GROSS UNREALIZED GAINS GROSS UNREALIZED LOSSES ESTIMATED FAIR VALUE U.S. Treasury Notes $ 24,148,295 $ 41,153 $ (250,385 ) $ 23,939,063 Government-Sponsored Enterprises 51,737,930 129,482 (833,321 ) 51,034,091 Municipal Securities 45,056,390 765,813 (816,413 ) 45,005,790 Total $ 120,942,615 $ 936,448 $ (1,900,119 ) $ 119,978,944 DECEMBER 31, 2015 AMORTIZED COST GROSS UNREALIZED GAINS GROSS UNREALIZED LOSSES ESTIMATED FAIR VALUE U.S. Treasury Notes $ 34,517,996 $ 161,037 $ (45,360 ) $ 34,633,673 Government-Sponsored Enterprises 51,136,426 281,650 (133,744 ) 51,284,332 Municipal Securities 32,767,694 1,340,610 (28,724 ) 34,079,580 Total $ 118,422,116 $ 1,783,297 $ (207,828 ) $ 119,997,585 The amortized cost and estimated fair value of investment securities available for sale at December 31, 2016 and December 31, 2015, by contractual maturity are as follows: DECEMBER 31, 2016 DECEMBER 31, 2015 AMORTIZED COST ESTIMATED FAIR VALUE AMORTIZED COST ESTIMATED FAIR VALUE Due in one year or less $ 3,343,347 $ 3,350,205 $ 3,311,346 $ 3,326,249 Due in one year to five years 82,848,411 82,682,901 69,870,930 70,584,179 Due in five years to ten years 29,662,030 29,169,228 41,930,801 42,670,986 Due in ten years and over 5,088,827 4,776,610 3,309,039 3,416,171 Total $ 120,942,615 $ 119,978,944 $ 118,422,116 $ 119,997,585 Securities pledged to secure deposits and repurchase agreements at December 31, 2016 and 2015, had a carrying amount of $47,619,232 and $48,027,575, respectively. The tables below summarize gross unrealized losses on investment securities and the fair market value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2016 and 2015. We believe that all unrealized losses have resulted from temporary changes in the interest rate market and not as a result of credit deterioration. We do not intend to sell and it is not likely that we will be required to sell any of the securities referenced in the table below before recovery of their amortized cost. Less Than 12 Months 12 Months or Longer Total Gross Gross Gross Unrealized Unrealized Unrealized # Fair Value Loss # Fair Value Loss # Fair Value Loss December 31, 2016 Available for sale U.S. Treasury notes 4 $ 17,968,594 $ (250,385 ) — $ — $ — 4 $ 17,958,594 $ (250,385 ) Government-sponsored enterprises 8 30,136,720 (833,321 ) — — — 8 30,136,720 (833,321 ) Municipal securities 54 22,606,430 (816,413 ) — — — 54 22,606,430 (816,413 ) Total 66 $ 70,711,744 $ (1,900,119 ) — $ — $ — 66 $ 70,711,744 $ (1,900,119 ) December 31, 2015 Available for sale U.S. Treasury notes 2 $ 10,064,063 $ (45,360 ) — $ — $ — 2 $ 10,064,063 $ (45,360 ) Government-sponsored enterprises 2 7,475,445 (38,538 ) 1 5,002,335 (95,206 ) 2 12,477,780 (133,744 ) Municipal securities 6 4,361,148 (28,724 ) — — — 6 4,361,148 (28,724 ) Total 10 $ 21,900,656 $ (112,622 ) 1 $ 5,002,335 $ (95,206 ) 10 $ 26,902,991 $ (207,828 ) We received proceeds from sales of securities available for sale and gross realized gains and losses as follows: For the Year Ended December 31, 2016 2015 2014 Gross proceeds $ 36,218,087 $ 16,564,118 $ 37,159,363 Gross realized gains 384,963 423,832 312,577 Gross realized losses (4,059 ) — — The tax provision related to these gains was $140,934 and $156,818 for the year ended December 31, 2016 and 2015, respectively. |
LOANS AND ALLOWANCE FOR LOAN LO
LOANS AND ALLOWANCE FOR LOAN LOSSES | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
LOANS AND ALLOWANCE FOR LOAN LOSSES | 4. LOANS AND ALLOWANCE FOR LOAN LOSSES Major classifications of loans (net of deferred loan fees of $136,446 at December 31, 2016, and $118,188 at December 31, 2015) are as follows: December 31 2016 2015 Commercial loans $ 52,262,209 $ 50,938,265 Commercial real estate: Construction 1,208,901 1,005,118 Other 122,968,126 115,736,034 Consumer: Real estate 77,131,816 69,777,307 Other 7,005,063 5,165,981 260,576,115 242,622,705 Allowance for loan losses (3,851,617 ) (3,417,827 ) Loans, net $ 256,724,498 $ 239,204,878 We had $101.2 million and $102.1 million of loans pledged as collateral to secure funding with the Federal Reserve Bank (“FRB”) Discount Window at December 31, 2016 and 2015, respectively. Our portfolio grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled. Our internal credit risk grading system is based on experience with similarly graded loans, industry best practices, and regulatory guidance. Our internally assigned grades pursuant to the Board-approved lending policy are as follows: ● Excellent ● Good ● Satisfactory ● Watch ● OAEM ● Substandard ● Doubtful ● Loss The following table illustrates credit risks by category and internally assigned grades at December 31, 2016 and December 31, 2015. “Pass” includes loans internally graded as excellent, good and satisfactory. December 31, 2016 Commercial Commercial Real Estate Construction Commercial Real Estate Other Consumer Real Estate Consumer Other Total Pass $ 48,289,944 $ 798,884 $ 116,490,396 $ 74,115,426 $ 6,728,367 $ 246,423,017 Watch 1,004,957 410,017 2,625,079 899,306 147,992 5,087,351 OAEM 1,666,048 — 995,549 630,957 28,939 3,321,493 Sub-Standard 1,301,260 — 2,857,102 1,486,127 99,765 5,744,254 Doubtful — — — — — — Loss — — — — — — Total $ 52,262,209 $ 1,208,901 $ 122,968,126 $ 77,131,816 $ 7,005,063 $ 260,576,115 December 31, 2015 Commercial Commercial Real Estate Construction Commercial Real Estate Other Consumer Real Estate Consumer Other Total Pass $ 46,865,088 $ 572,101 $ 110,040,948 $ 65,941,806 $ 4,857,576 $ 228,277,519 Watch 1,096,200 433,017 940,073 2,490,339 175,489 5,135,118 OAEM 1,337,002 — 1,203,518 99,743 26,961 2,667,224 Sub-Standard 1,639,975 — 3,551,495 1,245,419 105,955 6,542,844 Doubtful — — — — — — Loss — — — — — — Total $ 50,938,265 $ 1,005,118 $ 115,736,034 $ 69,777,307 $ 5,165,981 $ 242,622,705 The following tables include an aging analysis of the recorded investment of past-due financing receivable by class: December 31, 2016 30-59 60-89 Greater Than 90 Days Total Past Due Current Total Loans Receivable Recorded Investment > 90 Days and Accruing Commercial $ 438,159 $ — $ — $ 438,159 $ 51,824,050 $ 52,262,209 $ — Commercial Real Estate: Commercial Real Estate -Construction — — — — 1,208,901 1,208,901 — Commercial Real Estate -Other 6,363 — 1,501,153 1,507,516 121,460,610 122,968,126 89,908 Consumer: Consumer Real Estate 415,457 — — 415,457 76,716,359 77,131,816 — Consumer-Other 56,784 — 33,322 90,106 6,914,957 7,005,063 33,322 Total $ 916,763 $ — $ 1,534,475 $ 2,451,238 $ 258,124,877 $ 260,576,115 $ 123,230 December 31, 2015 30-59 60-89 Greater Than 90 Days Total Past Due Current Total Loans Receivable Recorded Investment > 90 Days and Accruing Commercial $ 1,162,676 $ 250,370 $ 4,317 $ 1,417,363 $ 49,520,902 $ 50,938,265 $ — Commercial Real Estate: Commercial Real Estate -Construction — — — — 1,005,118 1,005,118 — Commercial Real Estate -Other 91,607 1,215,473 1,152,774 2,459,854 113,276,180 115,736,034 — Consumer: Consumer Real Estate 68,240 249,754 82,015 400,009 69,377,298 69,777,307 — Consumer-Other 69,333 58,116 6,056 133,505 5,032,476 5,165,981 1,606 Total $ 1,391,856 $ 1,773,713 $ 1,245,162 $ 4,410,731 $ 238,211,974 $ 242,622,705 $ 1,606 There were two loans over 90 days past due and still accruing interest at December 31, 2016. There was one loan over 90 days past due still accruing interest at December 31, 2015. The following table summarizes the balances of non-accrual loans: Loans Receivable on Non-Accrual December 31, 2016 December 31, 2015 Commercial $ 61,781 $ 4,317 Commercial Real Estate: Commercial Real Estate - Construction — — Commercial Real Estate - Other 1,678,876 1,970,306 Consumer: Consumer - Real Estate — 82,015 Consumer - Other 964 4,450 Total $ 1,741,621 $ 2,061,088 The following tables set forth the changes in the allowance and an allocation of the allowance by loan category at December 31, 2016, December 31, 2015 and December 31, 2014. The allowance 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. December 31, 2016 Commercial Commercial Real Estate-Construction Commercial Real Estate-Other Consumer Real Estate Consumer Other Total Allowance for Loan Losses Beginning Balance $ 896,854 $ 59,861 $ 1,345,094 $ 941,470 $ 174,548 $ 3,417,827 Charge-offs (33,046 ) — (78,300 ) (82,015 ) (14,934 ) (208,295 ) Recoveries — — 65,000 — 7,085 72,085 Provisions 681,380 (8,392 ) 42,912 (133,064 ) (12,836 ) 570,000 Ending Balance $ 1,545,188 $ 51,469 $ 1,374,706 $ 726,391 $ 153,863 $ 3,851,617 December 31, 2015 Commercial Commercial Real Estate-Construction Commercial Real Estate-Other Consumer Real Estate Consumer Other Total Allowance for Loan Losses Beginning Balance $ 1,211,130 $ 42,904 $ 1,112,387 $ 863,351 $ 105,076 $ 3,334,848 Charge-offs (99,737 ) — (55,252 ) (6,075 ) (40,007 ) (201,071 ) Recoveries 9,164 — 53,753 6,075 22,558 91,550 Provisions (223,703 ) 16,957 234,206 78,119 86,921 192,500 Ending Balance $ 896,854 $ 59,861 $ 1,345,094 $ 941,470 $ 174,548 $ 3,417,827 December 31, 2014 Commercial Commercial Real Estate-Construction Commercial Real Estate-Other Consumer Real Estate Consumer Other Total Allowance for Loan Losses Beginning Balance $ 1,448,804 $ 22,137 $ 1,064,363 $ 672,813 $ 84,160 $ 3,292,277 Charge-offs (83,042 ) — (15,834 ) — (14,154 ) (113,030 ) Recoveries — — 46,000 — 27,101 73,101 Provisions (154,632 ) 20,767 17,858 190,538 7,969 82,500 Ending Balance $ 1,211,130 $ 42,904 $ 1,112,387 $ 863,351 $ 105,076 $ 3,334,848 The following tables present, by portfolio segment and reserving methodology, the allocation of the allowance for loan losses and the gross investment in loans. December 31, 2016 Commercial Commercial Commercial Real Estate-Other Consumer Consumer Other Total Allowance for Loan Losses Individually evaluated for impairment $ 1,051,219 $ — $ 324,587 $ 43,119 $ 89,047 $ 1,507,972 Collectively evaluated for impairment 493,969 51,469 1,050,119 683,272 64,816 2,343,645 Total Allowance for Losses $ 1,545,188 $ 51,469 $ 1,374,706 $ 726,391 $ 153,863 $ 3,851,617 Loans Receivable Individually evaluated for impairment $ 1,301,259 $ — $ 3,225,351 $ 1,286,127 $ 89,047 $ 5,901,784 Collectively evaluated for impairment 50,960,950 1,208,901 119,742,775 75,845,689 6,916,016 254,674,331 Total Loans Receivable $ 52,262,209 $ 1,208,901 $ 122,968,126 $ 77,131,816 $ 7,005,063 $ 260,576,115 December 31, 2015 Commercial Commercial Commercial Real Consumer Real Consumer Other Total Allowance for Loan Losses Individually evaluated for impairment $ 387,979 $ — $ 253,105 $ 342,320 $ 100,103 $ 1,083,507 Collectively evaluated for impairment 508,875 59,861 1,091,989 599,150 74,445 2,334,320 Total Allowance for Loan Losses $ 896,854 $ 59,861 $ 1,345,094 $ 941,470 $ 174,548 $ 3,417,827 Loans Receivable Individually evaluated for impairment $ 1,639,974 $ — $ 3,551,495 $ 1,245,419 $ 105,819 $ 6,542,707 Collectively evaluated for impairment 49,298,291 1,005,118 112,184,539 68,531,888 5,060,162 236,079,998 $ 50,938,265 $ 1,005,118 $ 115,736,034 $ 69,777,307 $ 5,165,981 $ 242,622,705 As of December 31, 2016 and 2015, loans individually evaluated and considered impaired are presented in the following table: Impaired and Restructured Loans As of The Year Ended December 31, 2016 2015 Unpaid Principal Balance Recorded Investment Related Allowance Unpaid Principal Balance Recorded Investment Related Allowance With no related allowance recorded: Commercial $ 250,040 $ 250,040 $ — $ 692,831 $ 692,831 $ — Commercial Real Estate- — — — — — — Commercial Real Estate-Other 2,174,770 2,174,770 — 2,476,018 2,476,018 — Consumer Real Estate 1,243,008 1,243,008 — 450,402 450,402 — Consumer Other — — — 5,715 5,715 — $ 3,667,818 $ 3,667,818 $ — $ 3,624,966 $ 3,624,966 $ — With an allowance recorded: Commercial $ 1,051,219 $ 1,051,219 $ 1,051,219 $ 947,143 $ 947,143 $ 387,979 Commercial Real Estate- Construction — — — — — — Commercial Real Estate-Other 1,050,581 1,050,581 324,587 1,075,477 1,075,477 253,105 Consumer Real Estate 43,119 43,119 43,119 795,017 795,017 342,320 Consumer Other 89,047 89,047 89,047 100,104 100,104 100,103 $ 2,233,966 $ 2,233,966 $ 1,507,972 $ 2,917,741 $ 2,917,741 $ 1,083,507 Total Commercial $ 1,301,259 $ 1,301,259 $ 1,051,219 $ 1,639,974 $ 1,639,974 $ 387,979 Commercial Real Estate-Construction — — — — — — Commercial Real Estate-Other 3,225,351 3,225,351 324,587 3,551,495 3,551,495 253,105 Consumer Real Estate 1,286,127 1,286,127 43,119 1,245,419 1,245,419 342,320 Consumer Other 89,047 89,047 89,047 105,819 105,819 100,103 $ 5,901,784 $ 5,901,784 $ 1,507,972 $ 6,542,707 $ 6,542,707 $ 1,083,507 The following table presents average impaired loans and interest income recognized on those impaired loans, by class segment, for the periods indicated. For the Year Ended December 31, 2016 2015 2014 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized With no related allowance recorded: Commercial $ 267,747 $ 12,282 $ 750,350 $ 43,853 $ 647,135 $ 18,129 Commercial Real Estate-Construction — — — — — — Commercial Real Estate-Other 2,267,288 81,582 2,500,204 128,352 3,515,431 177,416 Consumer Real Estate 1,242,515 22,111 450,117 17,035 351,550 12,877 Consumer-Other — — 56,758 2,557 — — $ 3,777,550 $ 115,975 $ 3,757,429 $ 191,797 $ 4,514,116 $ 208,422 With an allowance recorded: Commercial $ 1,087,559 $ 49,985 $ 1,009,765 $ 49,166 $ 1,222,383 $ 56,432 Commercial Real Estate-Construction — — — — — — Commercial Real Estate-Other 1,047,685 16,138 1,066,896 48,945 790,998 29,218 Consumer Real Estate 43,155 1,514 811,014 32,362 688,922 34,154 Consumer Other 94,945 5,533 55,439 3,540 41,631 1,923 $ 2,273,344 $ 73,170 $ 2,943,114 $ 134,013 $ 2,743,934 $ 121,727 Total Commercial $ 1,355,306 $ 62,267 $ 1,760,115 $ 93,019 $ 1,869,518 $ 74,561 Commercial Real Estate-Construction — — — — — — Commercial Real Estate-Other 3,314,973 97,720 3,567,100 177,297 4,306,429 206,634 Consumer Real Estate 1,285,670 23,625 1,261,131 49,397 1,040,472 47,031 Consumer Other 94,945 5,533 112,197 6,097 41,631 1,923 $ 6,050,894 $ 189,145 $ 6,700,543 $ 325,810 $ 7,258,050 $ 330,149 Restructured loans (loans, still accruing interest, which have been renegotiated at below-market interest rates or for which other concessions have been granted) were $378,392 (2 loans) and $458,268 (3 loans) at December 31, 2016 and December 31, 2015, respectively. Restructured loans were granted extended payment terms with no principal reduction. All restructured loans were performing as agreed as of December 31, 2016 and 2015, respectively. No TDRs defaulted during the years ended December 31, 2016 and 2015, which were modified within the previous twelve months. |
CONCENTRATIONS OF CREDIT RISK
CONCENTRATIONS OF CREDIT RISK | 12 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS OF CREDIT RISK | 5. CONCENTRATIONS OF CREDIT RISK We grant short to intermediate term commercial and consumer loans to customers throughout our primary market area of Charleston, Berkeley and Dorchester counties of South Carolina. Our primary market area is heavily dependent on tourism and medical services. Although we have a diversified loan portfolio, a substantial portion of our debtors’ ability to honor their contracts is dependent upon the stability of the economic environment in their primary market including the government, tourism and medical industries. The majority of the loan portfolio is located in our immediate market area with a concentration in Real Estate Related Activities and Offices and Clinics of Medical Doctors. Our loans were concentrated in the following categories. December 31, 2016 December 31, 2015 Commercial 20.06% 21.00% Commercial Real Estate-Construction 0.46% 0.41% Commercial Real Estate-Other 47.20% 47.70% Consumer Real Estate 29.59% 28.76% Consumer-Other 2.69% 2.13% Total Loans 100.00% 100.00% |
PREMISES, EQUIPMENT AND LEASEHO
PREMISES, EQUIPMENT AND LEASEHOLD IMPROVEMENTS | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
PREMISES, EQUIPMENT AND LEASEHOLD IMPROVEMENTS | 6. Premises, Equipment and Leasehold Improvements Premises, equipment and leasehold improvements are summarized as follows: December 31, 2016 2015 Bank buildings $ 1,824,613 $ 1,824,613 Land 838,075 838,075 Leasehold purchase 30,000 30,000 Lease improvements 690,212 687,333 Construction in process 11,754 11,754 Equipment 3,264,488 3,070,783 6,659,142 6,462,558 Accumulated depreciation (4,362,518 ) (4,173,330 ) Total $ 2,296,624 $ 2,289,228 Depreciation and amortization on our bank premises and equipment charged to operating expense totaled $189,188 in 2016, $196,827 in 2015, and $200,178 in 2014. We entered into agreements to lease equipment and office facilities under non-cancellable operating lease agreements expiring on various dates through 2039. We may, at our option, extend the lease of our office facility at 256 Meeting Street in Charleston, South Carolina, for one additional ten year period to 2027; extend the lease of our Summerville office at 100 North Main Street for two additional ten year periods; and extend the land lease where the Mt. Pleasant office is located for six additional five year periods. We rent office space at 1071 Morrison Drive, Charleston, South Carolina, from a related party, to house our Mortgage Department. Rent expense for this lease was $51,690 and $50,184 for the years ended December 31, 2016 and 2015, respectively. This lease renews every two years. Management intends to exercise its option on the lease agreements. Lease payments below include the lease renewals. Minimum rental commitments for these leases as of December 31, 2016 are as follows: 2017 $ 615,122 2018 622,890 2019 614,103 2020 591,067 2021 608,257 2022 and thereafter 4,708,393 Total $ 7,759,832 Total rental expense was $594,567, $591,058 and $572,395 in 2016, 2015 and 2014, respectively. On January 28, 2014, we signed a lease to open a banking office located on Highway 78, North Charleston, South Carolina (copy of the lease incorporated as Exhibit 10.8 in the 2013 10-K and copy of the Assignment and Assumption of Lease incorporated as Exhibit 10.9, First Amendment to the Lease incorporated as Exhibit 10.10 and Second Amendment to the Lease incorporated as Exhibit 10.11 in the 2015 10-K). The building is expected to be completed in the future. Rental payments do not commence until we take control of our space. |
OTHER REAL ESTATE OWNED
OTHER REAL ESTATE OWNED | 12 Months Ended |
Dec. 31, 2016 | |
Real Estate Owned, Disclosure of Detailed Components [Abstract] | |
OTHER REAL ESTATE OWNED | 7. OTHER REAL ESTATE OWNED The following table summarizes the activity in other real estate owned at December 31, 2016 and December 31, 2015. December 31, 2016 December 31, 2015 Balance, beginning of year $ 620,394 $ 521,943 Additions-foreclosure — 98,451 Sales (98,451 ) — Write-downs — — Balance, end of year $ 521,943 $ 620,394 We had one property valued at $521,943 classified as OREO at December 31, 2016. At December 31, 2015, we had two properties with an aggregate balance of $620,394 classified as OREO. Another property valued at $98,451 classified as OREO during 2015, was ultimately sold at a loss of $13,450. |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2016 | |
Deposits: | |
DEPOSITS | 8. DEPOSITS At December 31, 2016 and 2015, certificates of deposit of $250,000 or more totaled approximately $15,822,136 and $25,896,768, respectively. At December 31, 2016, the scheduled maturities of certificates of deposit are as follows: 2017 $ 41,020,714 2018 1,242,741 2019 516,921 2020 472,367 2021 and thereafter 588,514 $ 43,841,257 At December 31, 2016, deposits with a deficit balance of $24,963 were re-classified as other loans, compared to $121,331 at December 31, 2015. |
SHORT-TERM BORROWINGS
SHORT-TERM BORROWINGS | 12 Months Ended |
Dec. 31, 2016 | |
Short-term Debt [Abstract] | |
SHORT-TERM BORROWINGS | 9. Short-Term Borrowings Securities sold under agreements to repurchase with customers mature on demand. At December 31, 2016 and 2015, there were no securities sold under agreements to repurchase. There was no amount outstanding at any month end during 2016. The maximum amount of securities sold under agreements to repurchase outstanding at any month end was $5,480,927 for the year ended December 31, 2015. The average amount of outstanding securities sold under agreements to repurchase was $751 and $1,873,507 during the years ended December 31, 2016 and 2015, respectively. The securities underlying repurchase agreements are held in safekeeping by an authorized broker. At the maturity date of the agreement, the securities are returned to our account. At December 31, 2016 and 2015, we had no outstanding federal funds purchased. We have a Borrower-In-Custody arrangement with the Federal Reserve. This arrangement permits the Company to retain possession of loans pledged as collateral to secure advances from the Federal Reserve Discount Window. Under this agreement, we may borrow up to $75 million. We established this arrangement as an additional source of liquidity. There have been no borrowings under this arrangement. At December 31, 2016 and 2015, the Bank had unused short-term lines of credit totaling approximately $21,000,000 and $18,000,000, respectively (which are withdrawable at the lender’s option). |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 10. Income Taxes Total income taxes for the years ended December 31, 2016, 2015 and 2014 are as follows: For the Year Ended December 31, 2016 2015 2014 Income tax expense $ 1,688,433 $ 2,287,248 $ 1,997,866 Unrealized gains (losses) on securities available for sale presented in accumulated other comprehensive income (loss) (939,482 ) (147,104 ) 168,627 Total $ 748,951 $ 2,140,144 $ 2,166,493 Income tax expense was as follows: For the Year Ended December 31, 2016 2015 2014 Current income taxes Federal $ 2,438,687 $ 2,102,154 $ 1,703,444 State — 224,083 200,361 Total current tax expense 2,438,687 2,326,237 1,903,805 Deferred income tax (benefit) expense (750,254 ) (38,989 ) 94,061 Income tax expense $ 1,688,433 $ 2,287,248 $ 1,997,866 The differences between actual income tax expense and the amounts computed by applying the U.S. federal income tax rate of 34% to pretax income from continuing operations for the periods indicated are reconciled as follows: For the Year Ended December 31, 2016 2015 2014 Computed “expected” tax expense $ 2,358,069 $ 2,438,322 $ 2,174,873 Increase (reduction) in income taxes resulting from: State income tax, net of federal benefit (156,114 ) 147,895 132,238 Tax exempt interest income (339,994 ) (341,970 ) (357,834 ) Other, net (173,528 ) 43,001 48,589 $ 1,688,433 $ 2,287,248 $ 1,997,866 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2016 and 2015 are presented below: December 31 2016 2015 Deferred tax assets: Allowance for loan losses $ 1,248,551 $ 1,064,916 State net operating loss carryforward 50,301 45,987 State credit carryforward 236,536 — Unrealized loss on securities available for sale 356,562 — Other 45,661 23,749 Total gross deferred tax assets 1,937,611 1,134,652 Valuation allowance (50,301 ) (45,987 ) Deferred tax liabilities: Prepaid expenses (2,779 ) (1,363 ) Unrealized gain on securities available for sale — (582,926 ) Deferred loan fees (46,392 ) (40,184 ) Fixed assets, principally due to differences in depreciation (52,236 ) (24,611 ) Other bond accretion (78,877 ) (65,735 ) Total gross deferred tax liabilities (180,284 ) (714,819 ) Net deferred tax assets $ 1,707,026 $ 373,846 In 2016, the Company invested in a South Carolina Rehabilitation Credit. The tax credit is included in deferred tax assets and is being amortized. Amortization expense recognized for the year ended December 31, 2016 was $325,000 and was included in other operating expense on the statement of operations. There was a $50,301 valuation allowance for deferred tax assets at December 31, 2016 and $45,987 at December 31, 2015 associated with the Company’s state net operating loss. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible and prior to their expiration governed by the income tax code. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods during which the deferred income tax assets are expected to be deductible, management believes it is more likely than not the Company will realize the benefits of these deductible differences, net of the existing valuation allowance at December 31, 2016. The amount of the deferred income tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced. The Company has analyzed the tax positions taken or expected to be taken in its tax returns and concluded it has no liability related to uncertain tax positions in accordance with applicable regulations. Tax returns for 2013 and subsequent years are subject to examination by taxing authorities. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies | |
COMMITMENTS AND CONTINGENCIES | 11. Commitments and Contingencies We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit, interest rate, and liquidity risk. Our exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is essentially the same as that involved in extending loan facilities to customers. We use the same credit policies in making commitments and conditional obligations as we do for on-balance sheet instruments. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. If deemed necessary, the amount of collateral obtained upon extension of credit is based on our credit evaluation of the borrower. Collateral held varies, but may include accounts receivable, negotiable instruments, inventory, property, plant and equipment, and real estate. Commitments to extend credit, including unused lines of credit, amounted to $81,234,269 and $87,622,437 at December 31, 2016 and 2015, respectively. Standby letters of credit represent our obligation to a third party contingent upon the failure by our customer to perform under the terms of an underlying contract with the third party or obligates us to guarantee or stand as surety for the benefit of the third party. The underlying contract may entail either financial or nonfinancial obligations and may involve such things as the shipment of goods, performance of a contract, or repayment of an obligation. Under the terms of a standby letter, generally drafts will be drawn only when the underlying event fails to occur as intended. We can seek recovery of the amounts paid from the borrower. The majority of these standby letters of credit are unsecured. Commitments under standby letters of credit are usually for one year or less. At December 31, 2016 and 2015, we have recorded no liability for the current carrying amount of the obligation to perform as a guarantor; as such amounts are not considered material. The maximum potential amount of undiscounted future payments related to standby letters of credit at December 31, 2016 and 2015 was $793,992 and $745,187, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 12. Related Party Transactions In the opinion of management, loans to our executive officers and directors are made on substantially the same terms, including interest rates and collateral, as those terms prevailing at the time for comparable loans with persons not related to the lender that do not involve more than the normal risk of collectability. There were no outstanding loans to our executive officers as of December 31, 2016 and 2015. Related party loans are summarized as follows: DECEMBER 31, 2016 2015 Balance at beginning of year $ 6,523,137 $ 6,664,467 New loans or advances 4,833,545 6,662,930 Repayments (7,412,542 ) (6,804,260 ) Balance at end of year $ 3,944,140 $ 6,523,137 At December 31, 2016 and 2015, total deposits held by related parties were $4,376,563 and $7,760,342, respectively. The Company also leased office space from a related party as discussed in the Premises, Equipment and Leasehold Improvements footnote. |
OTHER EXPENSE
OTHER EXPENSE | 12 Months Ended |
Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |
OTHER EXPENSE | 13. Other Expense A summary of the components of other operating expense is as follows: For the Year Ended December 31, 2016 2015 2014 Advertising and business development $ 16,159 $ 16,662 $ 12,695 Supplies 94,006 111,604 123,087 Telephone and postage 194,853 188,052 193,039 Insurance 42,192 42,504 44,271 Professional fees 431,424 423,319 411,742 Data processing services 594,550 518,788 493,977 State and FDIC insurance and fees 242,926 228,627 216,129 Courier service 96,823 95,877 104,366 Amortization of state tax credit 325,000 — — Other 601,843 542,949 552,930 $ 2,639,776 $ 2,168,382 $ 2,152,236 |
STOCK INCENTIVE PLAN
STOCK INCENTIVE PLAN | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK INCENTIVE PLAN | 14. Stock Incentive Plan We have a Stock Incentive Plan which was approved in 1998 with 180,000 (329,422 adjusted for three 10% stock dividends, a 10% stock distribution, and a 25% stock dividend) shares reserved and a Stock Incentive Plan which was approved in 2010 with 300,000 (330,000 adjusted for a 10% stock dividend) shares reserved. Under both Plans, options are periodically granted to employees at a price not less than the fair market value of the shares at the date of grant. Employees become 20% vested after five years and then vest 20% each year until fully vested. The right to exercise each such 20% of the options is cumulative and will not expire until the tenth anniversary of the date of the grant. All employees are eligible to participate in this plan if the Executive Committee, in its sole discretion, determines that such person has contributed or can be expected to contribute to our profits or growth. Option awards are generally granted with an exercise price equal to the market price of the Company’s common stock at the date of grant. The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of our common stock. The expected term of the options granted shall not exceed ten years from the date of grant (the amount of time options granted are expected to be outstanding). The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The fair value of options granted was determined using the following weighted-average assumptions as of grant date: 2016 2015 2014 Risk free interest rate 2.33 % 1.96 % 2.33 % 2.94 % Expected life (in years) 10 10 10 10 Expected stock price volatility 27.95 % 19.62 % 19.62 % 36.34 % Dividend yield 3.47 % 4.13 % 4.13 % 3.98 % There are currently options to purchase 7,650 shares outstanding and exercisable under the 1998 Omnibus Stock Incentive Plan with options to purchase 7,170 shares exercisable at December 31, 2016. This plan has expired, however, those shares granted before the expiration date may still be exercised. The following table presents a summary of the activity under the 1998 and 2010 Omnibus Stock Incentive Plans for the years ended December 31: 2016 2015 2014 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding, January 1 183,302 $ 10.81 176,181 $ 10.48 175,081 $ 10.31 Granted 10,000 15.99 23,650 14.44 11,000 13.49 Expired — — — — — — Exercised (39,539 ) 10.26 (9,378 ) 13.11 (2,750 ) 9.74 Forfeited (12,858 ) 13.84 (7,151 ) 11.64 (7,150 ) 11.15 Outstanding, December 31 140,905 $ 11.06 183,302 $ 10.81 176,181 $ 10.48 Exercisable at year end 12,620 $ 11.50 17,457 $ 12.95 19,012 $ 13.39 Information has been retroactively adjusted for the 2015 10% stock dividend as applicable. The following table presents information pertaining to options outstanding at December 31, 2016: December 31, 2016 Exercise Price: Number of Options Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Intrinsic Value of Outstanding Options Number of Options Exercisable Weighted Average Exercise Price Intrinsic Value of Exercisable Options $ 13.22 6,050 — $ 13.22 $ 23,535 6,050 $ 13.22 $ 23,535 $ 11.73 1,600 1.2 $ 11.73 $ 8,608 1,120 $ 11.73 $ 6,026 $ 9.79 11,220 3.7 $ 9.79 $ 82,130 1,270 $ 9.79 $ 9,296 $ 10.61 4,400 4.2 $ 10.61 $ 28,600 — $ — $ — $ 9.47 71,610 4.5 $ 9.47 $ 54,710 4,180 $ 9.47 $ 31,935 $ 10.10 9,075 5.6 $ 10.10 $ 63,616 — $ — $ — $ 10.91 2,750 5.9 $ 10.91 $ 17,050 — $ — $ — $ 13.64 2,200 6.9 $ 13.64 $ 694 — $ — $ — $ 13.49 4,950 7.6 $ 13.49 $ 17,919 — $ — $ — $ 14.35 13,750 8.5 $ 14.35 $ 37,950 — $ — $ — $ 14.98 3,300 8.6 $ 14.98 $ 7,029 — $ — $ — $ 15.99 10,000 9.3 $ 15.99 $ 11,200 — $ — $ — 140,905 5.26 $ 11.06 $ 353,041 12,620 $ 11.50 $ 70,792 All relevant information has been retroactively adjusted for the 2015 10% stock dividend. The total intrinsic value of options exercised during the years ended December 31, 2016, 2015, and 2014, were $273,979, $14,272, and $12,775, respectively. We recognized compensation cost for the years ended December 31, 2016, 2015 and 2014 in the amount of $76,529, $78,987, and $74,908, respectively, related to the granted options. As of December 31, 2016, there was a total of $346,974 in unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plan. The cost is expected to be recognized over a weighted average period of 5.26 years. |
EMPLOYEE STOCK OWNERSHIP PLAN A
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST | 12 Months Ended |
Dec. 31, 2016 | |
Notes to Financial Statements | |
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST | 15. EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST We established an Employee Stock Ownership Plan (“ESOP”) effective January 1, 1989. Any employee of the Bank is eligible to become a participant in the ESOP upon reaching 21 years of age and credited with one-year of service (1,000 hours of service). The employee may enter the Plan on the January 1 st The Company recognizes expense when the contribution is approved by the Board of Directors. The total expenses amounted to $345,000 during the year ended December 31, 2016, $315,000 for the year ended December 31, 2015 and $280,000 for the year ended 2014. The plan currently owns 335,604 shares of common stock of Bank of South Carolina Corporation. A participant becomes vested in the ESOP based upon the employee’s credited years of service. The vesting schedule is as follows; ● 1 Year of Service 0% Vested ● 2 Years of Service 25% Vested ● 3 Years of Service 50% Vested ● 4 Years of Service 75% Vested ● 5 Years of Service 100% Vested Periodically the Internal Revenue Service “IRS” requires a restatement of a qualified retirement plan to ensure that the plan document includes provisions required by legislative and regulatory changes made since the last restatement. There have been no substantive changes to the plan. The Board of Directors approved a restated plan, on January 26, 2012 (incorporated as Exhibit 10.5 in the 2011 10-K). The Plan was submitted to the IRS for approval and a determination letter was issued September 26, 2013, stating that the plan satisfies the requirements of Code Section 4975 (e) (7). On January 26, 2017, the Board of Directors approved a restated plan (incorporated as Exhibit 10.6 in the 2016 10-K). |
DIVIDENDS
DIVIDENDS | 12 Months Ended |
Dec. 31, 2016 | |
Dividends [Abstract] | |
DIVIDENDS | 16. DIVIDENDS The Bank’s ability to pay dividends to the Company is restricted by the laws and regulations of the State of South Carolina. Generally, these restrictions allow the Bank to pay dividends from current earnings without the prior written consent of the South Carolina Commissioner of Banking, if it received a satisfactory rating at its most recent examination. Cash dividends when declared, are paid by the Bank to the Company for distribution to shareholders of the Company. The Bank paid dividends of $2,340,000, $2,475,000 and $2,865,000 to the Company during the years ended December 31, 2016, 2015 and 2014, respectively. On August 27, 2015, the Company’s Board of Directors declared a ten percent stock dividend to our shareholders. The record date was September 8, 2015 and the distribution date was September 28, 2015. Earnings per share and average shares outstanding have been adjusted to reflect the stock dividend in our consolidated financial statements. |
INCOME PER COMMON SHARE
INCOME PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
INCOME PER COMMON SHARE | 17. Income Per Common Share Basic income per share is computed by dividing net income by the weighted-average number of common shares outstanding. Diluted income per share is computed by dividing net income by the weighted-average number of common shares and potential common shares outstanding. Potential common shares consist of dilutive stock options determined using the treasury stock method and the average market price of common stock. The following table is a summary of the reconciliation of average shares outstanding for the years ended December 31: 2016 2015 2014 Numerator: Net income $ 5,247,063 $ 4,884,288 $ 4,398,820 Denominator: Weighted average shares outstanding 4,935,349 4,912,499 4,907,208 Effect of dilutive shares 118,765 154,586 125,003 Weighted average shares outstanding-diluted 5,054,114 5,067,085 5,032,211 Earnings per share - basic $ 1.06 $ 0.99 $ 0.90 Earnings per share - diluted $ 1.04 $ 0.96 $ 0.87 |
REGULATORY CAPITAL REQUIREMENTS
REGULATORY CAPITAL REQUIREMENTS | 12 Months Ended |
Dec. 31, 2016 | |
Regulatory Capital Requirements [Abstract] | |
REGULATORY CAPITAL REQUIREMENTS | 18. Regulatory Capital Requirements The Company and the Bank are subject to various capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company and the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the assets, liabilities, and certain off balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgements by the regulators about components, risk weightings, and other factors. Current quantitative measures established by regulation to ensure capital adequacy require that we maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital (as defined in the regulation) to risk-weighted assets (as defined) and to average assets. We believe that the Company and the Bank meet all capital adequacy requirements to which they were subject at December 31, 2016 and 2015. On July 2, 2013, the Federal Reserve Board approved the final rules implementing the Basel Committee on Banking Supervision’s (“BCBS”) capital guidelines for US banks (“Basel III”). Following the actions by the Federal Reserve, the FDIC also approved regulatory capital requirements on July 9, 2013. The FDIC’s rule is identical in substance to the final rules issued by the Federal Reserve Bank. Basel III became effective on January 1, 2015. The purpose is to improve the quality and increase the quantity of capital for all banking organizations. The minimum requirements for the quantity and quality of capital were increased. The rule includes a new common equity Tier 1 capital to risk-weighted assets ratio of 4.5% and a common equity Tier 1 capital conservation buffer of 2.5% of risk-weighted assets. The rule also raises the minimum ratio of Tier 1 capital to risk-weighted assets from 4% to 6% and requires a minimum leverage ratio of 4%. In addition, the rule also implements strict eligibility criteria for regulatory capital instruments and improves the methodology for calculating risk-weighted assets to enhance risk sensitivity. All final rule requirements will be phased in over a multi-year schedule. The capital conservation buffer in effect for the year ended December 31, 2016 was 0.625%. At December 31, 2016, the Bank was categorized as “well capitalized” under Basel III. To be categorized as “well capitalized” the Bank must maintain minimum total risk based, Tier 1 risk based, common equity Tier 1 risk based capital and Tier 1 leverage ratios of 10%, 8.0%, 6.5% and 5%, respectively, and to be categorized as “adequately capitalized,” the Bank must maintain minimum total risk based, Tier 1 risk based, common equity Tier 1 risk based capital, and Tier 1 leverage ratios of 8%, 6%, 4.5%, and 4.0%, respectively. The following tables present the actual and required capital amounts and ratios for the Company and Bank at December 31, 2016 and 2015: December 31, 2016 Actual For Capital To Be Well (Dollars in Thousands) Amount Ratio Amount Ratio Amount Ratio Total capital to risk-weighted assets: Company $ 44,850 15.46 % $ 23,213 8.00 % N/A N/A Bank $ 44,544 15.36 % $ 23,207 8.00 % $ 29,009 10.00 % Tier 1 capital to risk-weighted assets: Company $ 41,220 14.21 % $ 17,410 6.00 % N/A N/A Bank $ 40,915 14.10 % $ 17,405 6.00 % $ 23,207 8.00 % Tier 1 capital to average assets: Company $ 41,220 9.85 % $ 16,738 4.00 % N/A N/A Bank $ 40,915 9.78 % $ 16,735 4.00 % $ 20,919 5.00 % Common equity Tier 1 capital: Company $ 41,220 14.21 % $ 13,058 4.50 % N/A N/A Bank $ 40,915 14.10 % $ 13,054 4.50 % $ 18,856 6.50 % December 31, 2015 Actual For Capital To Be Well (Dollars in Thousands) Amount Ratio Amount Ratio Amount Ratio Total capital to risk-weighted assets: Company $ 41,497 15.54 % $ 21,359 8.00 % N/A N/A Bank $ 41,169 15.42 % $ 21,357 8.00 % $ 26,696 10.00 % Tier 1 capital to risk-weighted assets: Company $ 38,159 14.29 % $ 16,019 6.00 % N/A N/A Bank $ 37,831 14.17 % $ 16,018 6.00 % $ 21,357 8.00 % Tier 1 capital to average assets: Company $ 38,159 9.63 % $ 15,850 4.00 % N/A N/A Bank $ 37,831 9.55 % $ 15,843 4.00 % $ 19,803 5.00 % Common equity Tier 1 capital: Company $ 38,159 14.29 % $ 12,014 4.50 % N/A N/A Bank $ 37,831 14.17 % $ 12,013 4.50 % $ 17,353 6.50 % |
DISCLOSURES REGARDING FAIR VALU
DISCLOSURES REGARDING FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
DISCLOSURES REGARDING FAIR VALUE OF FINANCIAL INSTRUMENTS | 19. DISCLOSURES REGARDING FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value measurements apply whenever GAAP requires or permits assets or liabilities to be measured at fair value either on a recurring or nonrecurring basis. 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 in an orderly transaction between market participants at the measurement date. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities; it is not a forced transaction. The fair value standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of inputs by requiring that observable inputs be used when available. Observable inputs that market participants would use in pricing an asset or liability are developed based on market data we have obtained from independent sources. Unobservable inputs reflect our estimate of assumptions that market participants would use in pricing an asset or liability, which are developed based on the best information available in the circumstances. The fair value hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The fair value hierarchy is broken down into three levels based on the reliability of inputs as follows: ● Level 1: valuation is based upon unadjusted quoted market prices for identical instruments traded in active markets. ● Level 2: valuation is based upon quoted market prices for similar instruments traded in active markets, quoted market prices for identical or similar instruments traded in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by market data. ● Level 3: valuation is derived from other valuation methodologies, including discounted cash flow models and similar techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in determining fair value. Fair value estimates are made at a specific point of time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale our entire holdings of a particular financial instrument. Because no active market exists for a significant portion of our financial instruments, fair value estimates are based on judgements regarding future expected loss experience, current economic conditions, current interest rates and prepayment trends, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgement and therefore cannot be determined with precision. Changes in any of these assumptions used in calculating fair value could significantly affect the estimates. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of these estimates. The following is a description of valuation methodologies used for assets and liabilities recorded at fair value on a recurring basis: Investment Securities Available for Sale Securities available for sale are recorded at fair value on a recurring basis and are based upon quoted prices if available. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange such as the New York Stock Exchange, or by dealers or brokers in active over-the counter markets. Level 2 securities include mortgage backed securities issued by government sponsored entities, municipal bonds and corporate debt securities. Securities classified as Level 3 include asset-backed securities in less liquid markets. Derivative Instruments Derivative instruments include interest rate lock commitments and forward sale commitments. These instruments are valued based on the change in the value of the underlying loan between the commitment date and the end of the period. We classify these instruments as Level 3. The fair value of these commitments was not significant at December 31, 2016 or 2015. Assets and liabilities measured at fair value on a recurring basis at December 31, 2016 and December 31, 2015 are as follows: Balance at December 31, 2016 Quoted Significant Significant Unobservable Inputs Total US Treasury Notes $ 23,939,063 $ — $ — $ 23,939,063 Government Sponsored Enterprises — 51,034,091 — 51,034,091 Municipal Securities — 31,027,933 13,977,857 45,005,790 Total $ 23,939,063 $ 82,062,024 $ 13,977,857 $ 119,978,944 Balance at December 31, 2015 Quoted Significant Significant Unobservable Inputs Total US Treasury Notes $ 34,633,673 $ — $ — $ 34,633,673 Government Sponsored Enterprises — 51,284,332 — 51,284,332 Municipal Securities — 28,861,902 5,217,678 34,079,580 Total $ 34,633,673 $ 80,146,234 $ 5,217,678 $ 119,997,585 There were no liabilities recorded at fair value on a recurring basis as of December 31, 2016 or December 31, 2015. The following table reconciles the changes in assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2016 and 2015: Level 3 2015 Beginning Balance $ 5,217,678 $ 1,377,089 Total gains or (losses) (realized/unrealized) Included in earnings — — Included in other comprehensive income (818,821 ) (34,411 ) Purchases, issuances and settlements, net of maturities 9,579,000 3,875,000 Transfers in and/or out of level 3 — — Ending Balance $ 13,977,857 $ 5,217,678 There were no transfers between fair value levels in 2016 or 2015. Following is a description of valuation methodologies used for assets and liabilities recorded at fair value on a nonrecurring basis: Other Real Estate Owned (OREO) Loans, secured by real estate, are adjusted to the lower of the recorded investment in the loan or the fair value of the real estate upon transfer to OREO. Subsequently, OREO is carried at the lower of carrying value or fair value. Fair value is based upon independent market prices, appraised values of the collateral or our estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price or a current appraisal, we record the asset as nonrecurring Level 2. When an appraised value is not available or we determine the fair value of the collateral is further impaired below the appraised value and there is no observable market price, we record the asset as nonrecurring Level 3. Impaired Loans Impaired loans are carried at the lower of recorded investment or fair value. The fair value of the collateral less estimated costs to sell is the most frequently used method. Typically, we review the most recent appraisal and if it is over 12 to 18 months old we may request a new third party appraisal. Depending on the particular circumstances surrounding the loan, including the location of the collateral, the date of the most recent appraisal and the value of the collateral relative to the recorded investment in the loan, we may order an independent appraisal immediately or, in some instances, may elect to perform an internal analysis. Specifically as an example, in situations where the collateral on a nonperforming commercial real estate loan is out of our primary market area, we would typically order an independent appraisal immediately, at the earlier of the date the loan becomes nonperforming or immediately following the determination that the loan is impaired. However, as a second example, on a nonperforming commercial real estate loan where we are familiar with the property and surrounding areas and where the original appraisal value far exceeds the recorded investment in the loan, we may perform an internal analysis whereby the previous appraisal value would be reviewed considering recent current conditions, and known recent sales or listings of similar properties in the area, and any other relevant economic trends. This analysis may result in the call for a new appraisal. These valuations are reviewed and updated on a quarterly basis. In accordance with Accounting Standards Codification (“ASC”) 820 “Fair Value Measurement”, impaired loans, where an allowance is established based on the fair value of collateral, require classification in the fair value hierarchy. At December 31, 2016 and December 31, 2015, substantially all of the impaired loans were evaluated based on the fair value of the collateral. These impaired loans are classified as Level 3. Impaired loans measured using discounted future cash flows are not deemed to be measured at fair value. Loans Held for Sale Loans held for sale include mortgage loans and are carried at the lower of cost or market value. The fair values of mortgage loans held for sale are based on current market rates from investors within the secondary market for loans with similar characteristics. Carrying value approximates fair value. These loans are classified as Level 2. Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an on going basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The following table presents information about certain assets and liabilities measured at fair value on a nonrecurring basis at December 31, 2016, and 2015: December 31, 2016 Quoted Market Price in active markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Impaired loans $ — $ — $ 4,143,772 $ 4,143,772 Other real estate owned — — 521,943 521,943 Loans held for sale — 4,386,210 — 4,386,210 Total $ — $ 4,386,210 $ 4,665,715 $ 9,051,925 December 31, 2015 Quoted Market Price in active markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Impaired loans $ — $ — $ 5,459,200 $ 5,459,200 Other real estate owned — — 620,394 620,394 Loans held for sale — 5,820,239 — 5,820,239 Total $ — $ 5,820,239 $ 6,079,594 $ 11,899,833 There were no liabilities measured at fair value on a nonrecurring basis as of December 31, 2016 or 2015. The following table provides information describing the unobservable inputs used in Level 3 fair value measurements at December 31, 2016: Inputs Valuation Technique Unobservable Input General Range of Inputs Impaired Loans Discounted Appraisals Collateral Discounts 0 – 35% Other Real Estate Owned Appraisal Value/ Comparison Sales/Other Estimates Appraisals and/or Sales of Comparable Properties Appraisals Discounted 10% to 20% for Sales Commissions and Other Holding Costs Accounting standards require disclosure of fair value information for all of our assets and liabilities that are considered financial instruments, whether or not recognized on the balance sheet, for which it is practicable to estimate fair value. Fair value estimates are made as of a specific point in time based on the characteristics of the financial instruments and the relevant market information. When available, quoted market prices are used. In other cases, fair values are based on estimates using present value or other valuation techniques. These techniques involve uncertainties and are significantly affected by the assumptions used and the judgments made regarding risk characteristics of various financial instruments, discount rates, prepayments, and estimates of future cash flows, future expected loss experience and other factors. Changes in assumptions could significantly affect these estimates. Derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may or may not be realized in an immediate sale of the instrument. Under the accounting standard, fair value estimates are based on existing financial instruments without attempting to estimate the value of anticipated future business and the value of the assets and liabilities that are not financial instruments. Accordingly, the aggregate fair value amounts of existing financial instruments do not represent the underlying value of those instruments on our books. The following describes the methods and assumptions we use in estimating the fair values of financial instruments: a. Cash and due from banks, interest-bearing deposits in other banks The carrying value approximates fair value. All mature within 90 days and do not present unanticipated credit concerns. b. Investment securities available for sale Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. c. Loans The carrying values of variable rate consumer and commercial loans and consumer and commercial loans with remaining maturities of three months or less, approximate fair value. The fair values of fixed rate consumer and commercial loans with maturities greater than three months are determined using a discounted cash flow analysis and assume the rate being offered on these types of loans at December 31, 2016 and December 31, 2015, approximate market. The carrying value of mortgage loans held for sale approximates fair value. For lines of credit, the carrying value approximates fair value. d. Deposits The estimated fair value of deposits with no stated maturity is equal to the carrying amount. The fair value of time deposits is estimated by discounting contractual cash flows, using interest rates currently being offered on the deposit products. The fair value estimates for deposits do not include the benefit that results from the low cost funding provided by the deposit liabilities as compared to the cost of alternative forms of funding (deposit base intangibles). e. Accrued interest receivable and payable Since these financial instruments will typically be received or paid within three months, the carrying amounts of such instruments are deemed to be a reasonable estimate of fair value. f. Loan commitments Estimates of the fair value of these off-balance sheet items are not made because of the short-term nature of these arrangements and the credit standing on the counterparties. The following tables present the carrying amount, fair value, and placement in the fair value hierarchy of our financial instruments as of December 31, 2016 and December 31, 2015. Fair Value Measurements at December 31, 2016 Carrying Amount Estimated Fair Value Level 1 Level 2 Level 3 Financial Assets: Cash and due from banks $ 8,141,030 $ 8,141,030 $ 8,141,030 $ — $ — Interest-bearing deposits in other banks 18,101,300 18,101,300 18,101,300 — — Investments available for sale 119,978,944 119,978,944 23,939,063 82,062,024 13,977,857 Mortgage loans to be sold 4,386,210 4,386,210 — 4,386,210 — Loans 260,576,115 260,406,669 — — 260,406,669 Accrued interest receivable 1,614,002 1,614,002 — 1,614,002 — Financial Liabilities: Demand deposits 328,681,594 328,681,594 — 328,681,594 — Time deposits 43,841,257 43,856,383 — 43,856,383 — Accrued interest payable 51,629 51,629 — 51,629 — Fair Value Measurements at December 31, 2015 Carrying Amount Estimated Fair Value Level 1 Level 2 Level 3 Financial Assets: Cash and due from banks $ 5,295,924 $ 5,295,924 $ 5,295,924 $ — $ — Interest-bearing deposits in other banks 23,898,862 23,898,862 23,898,862 — — Investments available for sale 119,997,585 119,997,585 34,633,673 80,146,234 5,217,678 Mortgage loans to be sold 5,820,239 5,820,239 — 5,820,239 — Loans 242,622,705 242,581,154 — — 242,581,154 Accrued interest receivable 1,284,063 1,284,063 1,284,063 Financial Liabilities: Demand deposits 303,950,800 303,950,800 — 303,950,800 — Time deposits 54,767,812 54,780,915 — 54,780,915 — Accrued interest payable 73,421 73,421 — 73,421 — |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | 20. ACCUMULATED OTHER COMPREHENSIVE INCOME The following table summarizes the components of accumulated other comprehensive income (loss) and changes in those components as of and for the years ended December 31: Available for sale securities Beginning Balance December 31, 2013 $ 955,900 Change in net unrealized gains (losses) on securities available for sale 768,326 Reclassification adjustment for net securities gains included in net income (312,577 ) Income tax expense (benefit) (168,627 ) Balance December 31, 2014 1,243,022 Change in net unrealized gains (losses) on securities available for sale 26,255 Reclassification adjustment for net securities gains included in net income (423,832 ) Income tax expense (benefit) 147,104 Balance December 31, 2015 992,549 Change in net unrealized gains (losses) on securities available for sale (2,158,236 ) Reclassification adjustment for net securities gains included in net income (380,904 ) Income tax expense 939,482 Balance December 31, 2016 $ (607,109 ) The following table shows the line items in the consolidated Statements of Operations affected by amounts reclassified from accumulated other comprehensive income (loss): Year Ended December 31, 2016 2015 2014 Gain on sale of investments, net $ 380,904 $ 423,832 $ 312,577 Tax effect (140,934 ) — — Total reclassification, net of tax $ 239,970 $ 423,832 $ 312,577 |
BANK OF SOUTH CAROLINA CORPORAT
BANK OF SOUTH CAROLINA CORPORATION - PARENT COMPANY | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
BANK OF SOUTH CAROLINA CORPORATION - PARENT COMPANY | 21. Bank of South Carolina Corporation - Parent Company The Company’s principal source of income is dividends from the Bank. Certain regulatory requirements restrict the amount of dividends which the Bank can pay to the Company. The Company’s principal asset is its investment in its Bank subsidiary. The Company’s condensed statements of financial condition as of December 31, 2016 and 2015, and the related condensed statements of operations and cash flows for the years ended December 31, 2016, 2015 and 2014, are as follows: CONDENSED STATEMENTS OF FINANCIAL CONDITION 2016 2015 Assets Cash $ 922,595 $ 946,996 Investment in wholly-owned bank subsidiary 40,308,166 38,823,720 Other assets 76,077 20,154 Total assets $ 41,306,838 $ 39,790,870 Liabilities and shareholders’ equity Other liabilities $ 693,864 $ 639,158 Shareholders’ equity 40,612,974 39,151,712 Total liabilities and shareholders’ equity $ 41,306,838 $ 39,790,870 CONDENSED STATEMENTS OF OPERATIONS 2016 2015 2014 Interest income $ 571 $ 302 $ 306 Net operating expenses (177,612 ) (195,636 ) (187,284 ) Dividends received from bank 2,340,000 2,475,000 2,865,000 Equity in undistributed earnings of subsidiary 3,084,104 2,604,622 1,720,798 Net income $ 5,247,063 $ 4,884,288 $ 4,398,820 CONDENSED STATEMENTS OF CASH FLOWS 2016 2015 2014 Cash flows from operating activities: Net income $ 5,247,063 $ 4,884,288 $ 4,398,820 Stock-based compensation expense 76,529 78,987 74,908 Equity in undistributed earnings of subsidiary (3,084,104 ) (2,604,622 ) (1,720,798 ) Decrease (increase) in other assets (55,923 ) 202,043 (40,418 ) Net cash provided by operating activities 2,183,565 2,560,696 2,712,512 Cash flows from financing activities: Dividends paid (2,613,715 ) (2,380,062 ) (2,765,735 ) Cash in lieu of fractional shares — (4,778 ) — Stock options exercised 405,749 122,946 26,050 Net cash used by financing activities (2,207,966 ) (2,261,894 ) (2,739,685 ) Net increase (decrease) in cash (24,401 ) 298,802 (27,173 ) Cash at beginning of year 946,996 648,194 675,367 Cash at ending of year $ 922,595 $ 946,996 $ 648,194 Supplemental disclosure for non-cash investing and financing activity: Change in dividends payable $ 54,706 $ 59,178 $ 325 |
QUARTERLY RESULTS OF OPERATIONS
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | 22. Quarterly Results of Operations (unaudited) The tables below represent the quarterly results of operations for the years ended December 31, 2016 and 2015, respectively: 2016 FOURTH THIRD SECOND FIRST Total interest and fee income $ 3,862,720 $ 4,030,143 $ 3,770,669 $ 3,632,065 Total interest expense 95,146 96,467 92,988 94,139 Net interest income 3,767,574 3,933,676 3,677,681 3,537,926 Provision for loan losses 175,000 210,000 140,000 45,000 Net interest income after provisions for loan losses 3,592,574 3,723,676 3,537,681 3,492,926 Other income 638,896 686,586 729,572 806,029 Other expense 2,715,147 2,584,268 2,436,881 2,536,148 Income before income tax expense 1,516,323 1,825,994 1,830,372 1,762,807 Income tax expense 203,444 399,656 518,262 567,071 Net income $ 1,312,879 $ 1,426,338 $ 1,312,110 $ 1,195,736 Basic income per common share $ 0.27 $ 0.28 $ 0.27 $ 0.24 Diluted income per common share $ 0.26 $ 0.28 $ 0.26 $ 0.24 2015 FOURTH THIRD SECOND FIRST Total interest and fee income $ 3,635,011 $ 3,569,672 $ 3,550,663 $ 3,474,602 Total interest expense 108,115 101,230 99,579 93,471 Net interest income 3,526,896 3,468,442 3,451,084 3,381,131 Provision for loan losses 110,000 7,500 70,000 5,000 Net interest income after provisions for loan losses 3,416,896 3,460,942 3,381,084 3,376,131 Other income 788,770 662,038 868,492 730,658 Other expense 2,402,221 2,372,742 2,399,458 2,339,054 Income before income tax expense 1,803,445 1,750,238 1,850,118 1,767,737 Income tax expense 576,474 551,319 596,680 562,775 Net income $ 1,226,971 $ 1,198,919 $ 1,253,438 $ 1,204,960 Basic income per common share $ 0.25 $ 0.24 $ 0.26 $ 0.25 Diluted income per common share $ 0.24 $ 0.24 $ 0.25 $ 0.22 |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Bank of South Carolina Corporation (the “Company”) and its wholly-owned subsidiary, The Bank of South Carolina (the “Bank”). In consolidation, all significant intercompany balances and transactions have been eliminated. References to “we”, “us”, “our”, “the Bank”, or “the Company” refer to the parent and its subsidiary that are consolidated for financial purposes. We provide financial services through our four banking house locations: 256 Meeting Street, Charleston, SC, 100 North Main Street, Summerville, SC, 1337 Chuck Dawley Boulevard, Mt. Pleasant, SC and 2027 Sam Rittenberg Boulevard, Charleston, SC. Our primary deposit products are checking, savings, and term certificate accounts, and our primary lending products are residential mortgage, commercial, and installment loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. There are no significant concentrations of loans to any one industry or customer. However, the customers’ ability to repay their loans may be dependent on the general economic conditions in the area. |
Accounting Estimates and Assumptions | Accounting Estimates and Assumptions The preparation of the financial statements are in conformity with GAAP, which require management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ significantly from these estimates and assumptions. Material estimates generally susceptible to significant change are related to the determination of the allowance for loan losses, impaired loans, other real estate owned, asset prepayment rates and other-than-temporary impairment of investment securities. |
Reclassification | Reclassification: Certain amounts in the prior years’ financial statements have been reclassified to conform to the current year’s presentation. Such reclassifications had no effect on shareholders’ equity or the net income as previously reported. |
Subsequent Events | 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. We have reviewed events occurring through the date the financial statements were available to be issued and no subsequent events occurred requiring accrual or disclosure. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include working cash funds, due from banks, interest-bearing deposits in other banks, items in process of collection and federal funds sold. All cash equivalents are readily convertible to cash and have maturities of less than 90 days. Depository institutions are required to maintain reserve and clearing balances at the Federal Reserve Bank. Vault cash satisfied our daily reserve requirement for the years ended December 31, 2016 and 2015, respectively. |
Interest-bearing Deposits in Other Financial Institutions | Interest-bearing Deposits in Other Financial Institutions: Interest-bearing deposits in other financial institutions mature within one year and are carried at cost. |
Investment Securities | Investment Securities We classify investments into three categories as follows: (1) Held to Maturity - debt securities that we have the positive intent and ability to hold to maturity, which are reported at amortized cost, adjusted for the amortization of any related premiums or the accretion of any related discounts into interest income using a methodology which approximates a level yield of interest over the estimated remaining period until maturity, (2) Trading - debt and equity securities that are bought and held principally for the purpose of selling them in the near term, which are reported at fair value, with unrealized gains and losses included in earnings, and (3) Available for Sale - debt and equity securities that may be sold under certain conditions, which are reported at fair value, with unrealized gains and losses excluded from earnings and reported as a separate component of shareholders’ equity, net of income taxes. Unrealized losses on securities due to fluctuations in fair value are recognized when it is determined that an other than temporary decline in value has occurred. Realized gains or losses on the sale of investments are recognized on a specific identification, trade date basis. All securities were classified as available for sale for 2016 and 2015. We do not have any mortgage-backed securities nor have we ever invested in mortgage-backed securities. |
Mortgage Loans to be Sold | Mortgage Loans to be Sold: We originate fixed and variable rate residential mortgage loans on a service release basis in the secondary market. Loans closed but not yet settled with an investor are carried in our loans held for sale portfolio. Virtually all of these loans have commitments to be purchased by investors and the majority of these loans were locked in by price with the investors on the same day or shortly thereafter that the loan was locked in with our customers. Therefore, these loans present very little market risk. We usually deliver to, and receive funding from, the investor within 30 to 60 days. Commitments to sell these loans to the investor are considered derivative contracts and are sold to investors on a “best efforts” basis. We are not obligated to deliver a loan or pay a penalty if a loan is not delivered to the investor. As a result of the short-term nature of these derivative contracts, the fair value of the mortgage loans held for sale in most cases is the same as the value of the loan amount at its origination . Mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated market value in the aggregate. Net unrealized losses are provided for in a valuation allowance by charges to operations as a component of mortgage banking income. Gains or losses on sales of loans are recognized when control over these assets has been surrendered and are included in mortgage banking income in the consolidated statements of operations. |
Loans and Allowance for Loan Losses | Loans and Allowance for Loan Losses Loans are carried at principal amounts outstanding. Loan origination fees, net of certain direct origination costs, are deferred and recognized over the weighted average life of the loan as an adjustment to yield. Interest income on all loans is recorded on an accrual basis. The accrual of interest and the amortization of net loan fees are generally discontinued on loans which 1) are maintained on a cash basis because of deterioration in the financial condition of the borrower; 2) for which payment of full principal is not expected; or 3) upon which principal or interest has been in default for a period of 90 days or more. We define past due loans based on contractual payment and maturity dates. The accrual of interest is generally discontinued on loans that become 90 days past due as to principal or interest. The accrual of interest on some loans, however, may continue even though they are 90 days past due if the loans are well secured or in the process of collection and management deems it appropriate. If non-accrual loans decrease their past due status to less than 30 days for a period of six to nine months, they are reviewed individually by management to determine if they should be returned to accrual status. When the ultimate collectability of an impaired loan’s principal is in doubt, wholly or partially, all cash receipts are applied to principal. Once the recorded principal balance has been reduced to zero, future cash receipts are applied to interest income, to the extent that any interest has been foregone. Further cash receipts are recorded as recoveries of any amounts previously charged off. When this doubt does not exist, cash receipts are applied under the contractual terms of the loan agreement first to interest income and then to principal. We account for impaired loans by requiring that all loans (greater than $50,000) for which it is estimated that we will be unable to collect all amounts due according to the terms of the loan agreement be recorded at the loan’s fair value. Fair value may be determined based upon the present value of expected future cash flows discounted at the loan’s effective interest rate, or the fair value of the collateral less cost to sell, if the loan is collateral dependent. Additional accounting guidance allows us to use existing methods for recognizing interest income on an impaired loan. The guidance also requires additional disclosures about how we estimate interest income related to our impaired loans. A loan is also considered impaired if its terms are modified in a troubled debt restructuring (“TDR”). For this type of impaired loan, cash receipts are typically applied to principal and interest receivable in accordance with the terms of the restructured loan agreement. Interest income is recognized on these loans using the accrual method of accounting, provided they are performing in accordance with their restructured terms. The allowance for loan losses is our estimate of credit losses inherent in the loan portfolio. The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when we believe the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is evaluated on a regular basis and is based upon our periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. We believe that the allowance is adequate to absorb inherent losses in the loan portfolio; however, there can be no assurance that loan losses in future periods will not exceed the current allowance amount or that future increases in the allowance will not be required. No assurance can be given that our ongoing evaluation of the loan portfolio, in light of changing economic conditions and other relevant circumstances, will not require significant future additions to the allowance, thus adversely affecting our operating results. The allowance is also subject to examination by regulatory agencies, which may consider such factors as the methodology used to determine adequacy and the size of the allowance relative to that of peer institutions and other adequacy tests. In addition, such regulatory agencies could require us to adjust our allowance based on information available at the time of the examination. The methodology used to determine the reserve for unfunded lending commitments, which is included in other liabilities, is inherently similar to the methodology used to determine the allowance for loan losses adjusted for factors specific to binding commitments, including the probability of funding and historical loss ratio. |
Concentration of Credit Risk | Concentration of Credit Risk: Our primary market consists of the counties of Berkeley, Charleston and Dorchester, South Carolina. At December 31, 2016, the majority of the total loan portfolio, as well as a substantial portion of the commercial and real estate loan portfolios, were to borrowers within this region. No other areas of significant concentration of credit risk have been identified. |
Premises, Equipment and Leasehold Improvements and Depreciation | Premises, Equipment and Leasehold Improvements and Depreciation Land is carried at cost. Buildings and equipment are stated at cost less accumulated depreciation. Depreciation is recorded using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes over the estimated useful lives of the assets ranging from 40 years for buildings and 3 to 15 years for equipment. Leasehold improvements are amortized over the shorter of the asset’s useful life or the remaining lease term, including renewal periods when reasonably assured. The cost of maintenance and repairs is charged to operating expense as incurred. |
Other Real Estate Owned | Other Real Estate Owned Real estate properties acquired through foreclosure are initially recorded at the lower of the recorded investment in the loan or fair value less costs to sell. Losses arising from the initial foreclosure are charged against the allowance for loan losses. Subsequent to foreclosure, real estate owned is recorded at the lower of cost or fair value, adjusted for net selling costs. Fair value is based upon independent market prices, appraised values of the collateral, or our estimation of the value of the collateral. Gains and losses on the sale of other real estate owned (“OREO”) and subsequent write-downs from periodic re-evaluation are charged to net other real estate owned expenses. |
Income Taxes | Income Taxes We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Net deferred tax assets are included in other assets in the consolidated balance sheet. Accounting standards require the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. These standards also prescribe a recognition threshold and measurement of a tax position taken or expected to be taken in an enterprise’s tax return. We believe that we had no uncertain tax positions for the years ended December 31, 2016 and 2015. |
Stock-Based Compensation | Stock-Based Compensation Compensation cost is recognized for stock options issued to employees, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options. Compensation cost is recognized over the required service period, generally defined as the vesting period (10 years). |
Income Per Common Share | Income Per Common Share Basic income per share is computed by dividing net income by the weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares and potential common shares outstanding. Potential common shares consist of dilutive stock options determined using the treasury stock method and the average market price of common stock. Earnings per share are restated for all stock splits and stock dividends through the date of issuance of the financial statements. |
Comprehensive Income | Comprehensive Income We apply accounting standards which establish guidance for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income consists of net income and net unrealized gains or losses on securities. |
Segment Information | Segment Information The Company operates and manages itself within one retail banking segment and has, therefore, not provided segment disclosures. |
Interest Rate Lock Commitments and Forward Sale Contracts | Interest Rate Lock Commitments and Forward Sale Contracts Commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans are accounted for as free-standing derivatives. The fair value of the interest rate lock is recorded at the time the commitment to fund the mortgage loan is executed and is adjusted for the expected exercise of the commitments before the loan is funded. In order to hedge the change in interest rates resulting from commitments to fund the loans, we enter into forward commitments for the future delivery of mortgage loans when the interest rate is locked. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest on the loan is locked. Changes in the fair values of these derivatives are included in income when they occur. As a result of the short-term nature of mortgage loans held for sale (derivative contract), our derivative instruments were considered to be immaterial as of December 31, 2016 and 2015. We had no embedded derivative instruments requiring hedge accounting treatment at December 31, 2016. We do not currently engage in hedging activities. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements: The following is a summary of recent authoritative pronouncements that could impact the accounting, reporting and/or disclosure of financial information by the Company. In May 2014, the FASB issued guidance to change the recognition of revenue from contracts with customers. The core principle of the new guidance is that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. This guidance also includes expanded disclosure requirements that result in an entity providing users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. In August 2015, the FASB deferred the effective date of the amendments. As a result of the deferral, the guidance will be effective for the Company for reporting periods beginning after December 15, 2017. We will apply this guidance using a modified retrospective approach. We do not expect this amendment to have a material effect on our consolidated financial statements. In June 2014, the FASB issued guidance which makes limited amendments to the guidance on accounting for certain repurchase agreements. The new guidance (1) requires entities to account for repurchase-to-maturity transactions as secured borrowings (rather than as sales with forward repurchase agreements), (2) eliminates accounting guidance on linked repurchase financing transactions, and (3) expands disclosure requirements related to certain transfers of financial assets that are accounted for as sales and certain transfers (specifically, repos, securities lending transactions, and repurchase-to-maturity transactions) accounted for as secured borrowings. The amendments became effective for the Company for the first interim or annual period beginning after December 31, 2014. We applied the guidance by making a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. This adjustment did not have a material effect on our financial statements. In January 2015, the FASB issued guidance to eliminate from U.S. GAAP the concept of an extraordinary item, which is an event or transaction that is both (1) unusual in nature and (2) infrequently occurring. Under the new guidance, an entity will no longer (1) segregate an extraordinary item from the results of ordinary operations; (2) separately present an extraordinary item on its income statement, net of tax, after income from continuing operations; or (3) disclose income taxes and earnings-per-share data applicable to an extraordinary item. The amendments were effective January 1, 2016 and did not have a material effect on our financial statements. In February 2015, the FASB issued guidance which amends the consolidation requirements and significantly changes the consolidation analysis required under U.S. GAAP. Although the amendments are expected to result in the deconsolidation of many entities, the Company will need to reevaluate all its previous consolidation conclusions. The amendments were effective January 1, 2016 and did not have a material effect on our financial statements. In June 2015, the FASB issued amendments to clarify the Accounting Standards Codification (ASC), correct unintended application of guidance, and make minor improvements to the ASC that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The amendments were effective upon issuance (June 12, 2015) for amendments that do not have transition guidance. Amendments that are subject to transition guidance were effective January 1, 2016 and did not have a material effect on our financial statements. In August 2015, the FASB issued amendments to the Interest topic of the Accounting Standards Codification to clarify the SEC staff’s position on presenting and measuring debt issuance costs incurred in connection with line-of-credit arrangements. The amendments were effective upon issuance. The Company does not expect these amendments to have a material effect on its financial statements. In January 2016, the FASB amended the Financial Instruments topic of the Accounting Standards Codification to address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We will apply the guidance by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal ear of adoption. The amendments related to equity securities without readily determinable fair values will be applied prospectively to equity investments that exist as of the date of adoption of the amendments. We do not expect this amendment to have a material effect on our financial statements. In February 2016, the FASB amended the Leases topic of the Accounting Standards Codification to require all leases with lease terms over 12 months to be capitalized as a right-of-use asset and lease liability on the balance sheet at the date of lease commencement. Leases will be classified as either finance leases or operating leases. This distinction will be relevant for the pattern of expense recognition in the income statement. The amendments will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of this guidance on its financial statements. In March 2016, the FASB amended the Revenue from Contracts with Customers topic of the Accounting Standards Codification to clarify the implementation guidance on principal versus agent considerations and address how an entity should assess whether it is the principal or the agent in contracts that include three or more parties. The amendments will be effective for the Company for reporting periods beginning after December 15, 2017. The Company does not expect these amendments to have a material effect on its financial statements. In March 2016, the FASB issued guidance to simplify several aspects of the accounting for share-based payment award transactions including the income tax consequences, the classification of awards as either equity or liabilities, and the classification on the statement of cash flows. Additionally, the guidance simplifies two areas specific to entities other than public business entities allowing them apply a practical expedient to estimate the expected term for all awards with performance or service conditions that have certain characteristics and also allowing them to make a one-time election to switch from measuring all liability-classified awards at fair value to measuring them at intrinsic value. The amendments were effective January 1, 2017. The Company does not expect these amendments to have a material effect on its financial statements. In April 2016, the FASB amended the Revenue from Contracts with Customers topic of the Accounting Standards Codification to clarify guidance related to identifying performance obligations and accounting for licenses of intellectual property. The amendments will be effective for the Company for reporting periods beginning after December 15, 2017. The Company does not expect these amendments to have a material effect on its financial statements. In May 2016, the FASB amended the Revenue from Contracts with Customers topic of the Accounting Standards Codification to clarify guidance related to collectability, noncash consideration, presentation of sales tax, and transition. The amendments will be effective for the Company for reporting periods beginning after December 15, 2017. The Company does not expect these amendments to have a material effect on its financial statements. In June 2016, the FASB issued guidance to change the accounting for credit losses and modify the impairment model for certain debt securities. The guidance requires a financial asset (including trade receivables) measured at amortized cost basis to be presented at the net amount expected to be collected. Thus, the income statement will reflect the measurement of credit losses for newly-recognized financial assets as well as the expected increases or decreases of expected credit losses that have taken place during the period. The amendments will be effective for the Company for reporting periods beginning after December 15, 2019. Early adoption is permitted for all organizations for periods beginning after December 15, 2018. The Company is currently in the process of evaluating the impact of adoption of this guidance on its financial statements. In August 2016, the FASB amended the Statement of Cash Flows topic of the Accounting Standards Codification to clarify how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments will be effective for the Company for fiscal years beginning after December 15, 2017, 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 October 2016, the FASB amended the Income Taxes topic of the Accounting Standards Codification to modify the accounting for intra-entity transfers of assets other than inventory. The amendments will be effective for the Company for fiscal years beginning after December 15, 2017, 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 October 2016, the FASB amended the Consolidation topic of the Accounting Standards Codification to revise the consolidation guidance on how a reporting entity that is the single decision maker of a variable interest entity (VIE) should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The amendments will be effective for the Company for fiscal years beginning after December 15, 2016, 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 November 2016, the FASB amended the Statement of Cash Flows topic of the Accounting Standards Codification to clarify how restricted cash is presented and classified in the statement of cash flows. The amendments will be effective for the Company for fiscal years beginning after December 15, 2017, 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 December 2016, the FASB issued amendments to clarify the Accounting Standards Codification (ASC), correct unintended application of guidance, and make minor improvements to the ASC that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The amendments were effective upon issuance (December 14, 2016) for amendments that do not have transition guidance. Amendments that are subject to transition guidance were effective January 1, 2017. The Company does not expect these amendments to have a material effect on its financial statements. In December 2016, the FASB issued technical corrections and improvements to the Revenue from Contracts with Customers Topic. These corrections make a limited number of revisions to several pieces of the revenue recognition standard issued in 2014. The effective date and transition requirements for the technical corrections will be effective for the Company for reporting periods beginning after December 15, 2017. The Company does not expect these amendments to have a material effect on its financial statements. 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 our financial position, results of operations or cash flows. |
INVESTMENT SECURITIES AVAILAB32
INVESTMENT SECURITIES AVAILABLE FOR SALE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of investment securities available for sale | The amortized cost and fair value of investment securities available for sale are summarized as follows: DECEMBER 31, 2016 AMORTIZED COST GROSS UNREALIZED GAINS GROSS UNREALIZED LOSSES ESTIMATED FAIR VALUE U.S. Treasury Notes $ 24,148,295 $ 41,153 $ (250,385 ) $ 23,939,063 Government-Sponsored Enterprises 51,737,930 129,482 (833,321 ) 51,034,091 Municipal Securities 45,056,390 765,813 (816,413 ) 45,005,790 Total $ 120,942,615 $ 936,448 $ (1,900,119 ) $ 119,978,944 DECEMBER 31, 2015 AMORTIZED COST GROSS UNREALIZED GAINS GROSS UNREALIZED LOSSES ESTIMATED FAIR VALUE U.S. Treasury Notes $ 34,517,996 $ 161,037 $ (45,360 ) $ 34,633,673 Government-Sponsored Enterprises 51,136,426 281,650 (133,744 ) 51,284,332 Municipal Securities 32,767,694 1,340,610 (28,724 ) 34,079,580 Total $ 118,422,116 $ 1,783,297 $ (207,828 ) $ 119,997,585 |
Schedule of amortized cost and estimated fair value of investment securities available for sale by contractual maturity | The amortized cost and estimated fair value of investment securities available for sale at December 31, 2016 and December 31, 2015, by contractual maturity are as follows: DECEMBER 31, 2016 DECEMBER 31, 2015 AMORTIZED COST ESTIMATED FAIR VALUE AMORTIZED COST ESTIMATED FAIR VALUE Due in one year or less $ 3,343,347 $ 3,350,205 $ 3,311,346 $ 3,326,249 Due in one year to five years 82,848,411 82,682,901 69,870,930 70,584,179 Due in five years to ten years 29,662,030 29,169,228 41,930,801 42,670,986 Due in ten years and over 5,088,827 4,776,610 3,309,039 3,416,171 Total $ 120,942,615 $ 119,978,944 $ 118,422,116 $ 119,997,585 |
Schedule of investment securities gross unrealized losses on investment securities and the fair market value of the related securities | The tables below summarize gross unrealized losses on investment securities and the fair market value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2016 and 2015. We believe that all unrealized losses have resulted from temporary changes in the interest rate market and not as a result of credit deterioration. We do not intend to sell and it is not likely that we will be required to sell any of the securities referenced in the table below before recovery of their amortized cost. Less Than 12 Months 12 Months or Longer Total Gross Gross Gross Unrealized Unrealized Unrealized # Fair Value Loss # Fair Value Loss # Fair Value Loss December 31, 2016 Available for sale U.S. Treasury notes 4 $ 17,968,594 $ (250,385 ) — $ — $ — 4 $ 17,958,594 $ (250,385 ) Government-sponsored enterprises 8 30,136,720 (833,321 ) — — — 8 30,136,720 (833,321 ) Municipal securities 54 22,606,430 (816,413 ) — — — 54 22,606,430 (816,413 ) Total 66 $ 70,711,744 $ (1,900,119 ) — $ — $ — 66 $ 70,711,744 $ (1,900,119 ) December 31, 2015 Available for sale U.S. Treasury notes 2 $ 10,064,063 $ (45,360 ) — $ — $ — 2 $ 10,064,063 $ (45,360 ) Government-sponsored enterprises 2 7,475,445 (38,538 ) 1 5,002,335 (95,206 ) 2 12,477,780 (133,744 ) Municipal securities 6 4,361,148 (28,724 ) — — — 6 4,361,148 (28,724 ) Total 10 $ 21,900,656 $ (112,622 ) 1 $ 5,002,335 $ (95,206 ) 10 $ 26,902,991 $ (207,828 ) |
Schedule of proceeds from sales of securities available for sale and gross realized gains and losses | We received proceeds from sales of securities available for sale and gross realized gains and losses as follows: For the Year Ended December 31, 2016 2015 2014 Gross proceeds $ 36,218,087 $ 16,564,118 $ 37,159,363 Gross realized gains 384,963 423,832 312,577 Gross realized losses (4,059 ) — — |
LOANS AND ALLOWANCE FOR LOAN 33
LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Schedule of major classifications of loans | Major classifications of loans (net of deferred loan fees of $136,446 at December 31, 2016, and $118,188 at December 31, 2015) are as follows: December 31 2016 2015 Commercial loans $ 52,262,209 $ 50,938,265 Commercial real estate: Construction 1,208,901 1,005,118 Other 122,968,126 115,736,034 Consumer: Real estate 77,131,816 69,777,307 Other 7,005,063 5,165,981 260,576,115 242,622,705 Allowance for loan losses (3,851,617 ) (3,417,827 ) Loans, net $ 256,724,498 $ 239,204,878 |
Schedule of credit risks by category and internally assigned grades | The following table illustrates credit risks by category and internally assigned grades at December 31, 2016 and December 31, 2015. “Pass” includes loans internally graded as excellent, good and satisfactory. December 31, 2016 Commercial Commercial Real Estate Construction Commercial Real Estate Other Consumer Real Estate Consumer Other Total Pass $ 48,289,944 $ 798,884 $ 116,490,396 $ 74,115,426 $ 6,728,367 $ 246,423,017 Watch 1,004,957 410,017 2,625,079 899,306 147,992 5,087,351 OAEM 1,666,048 — 995,549 630,957 28,939 3,321,493 Sub-Standard 1,301,260 — 2,857,102 1,486,127 99,765 5,744,254 Doubtful — — — — — — Loss — — — — — — Total $ 52,262,209 $ 1,208,901 $ 122,968,126 $ 77,131,816 $ 7,005,063 $ 260,576,115 December 31, 2015 Commercial Commercial Real Estate Construction Commercial Real Estate Other Consumer Real Estate Consumer Other Total Pass $ 46,865,088 $ 572,101 $ 110,040,948 $ 65,941,806 $ 4,857,576 $ 228,277,519 Watch 1,096,200 433,017 940,073 2,490,339 175,489 5,135,118 OAEM 1,337,002 — 1,203,518 99,743 26,961 2,667,224 Sub-Standard 1,639,975 — 3,551,495 1,245,419 105,955 6,542,844 Doubtful — — — — — — Loss — — — — — — Total $ 50,938,265 $ 1,005,118 $ 115,736,034 $ 69,777,307 $ 5,165,981 $ 242,622,705 |
Schedule of aging analysis of the recorded investment of past-due financing receivable by class | The following tables include an aging analysis of the recorded investment of past-due financing receivable by class: December 31, 2016 30-59 60-89 Greater Than 90 Days Total Past Due Current Total Loans Receivable Recorded Investment > 90 Days and Accruing Commercial $ 438,159 $ — $ — $ 438,159 $ 51,824,050 $ 52,262,209 $ — Commercial Real Estate: Commercial Real Estate -Construction — — — — 1,208,901 1,208,901 — Commercial Real Estate -Other 6,363 — 1,501,153 1,507,516 121,460,610 122,968,126 89,908 Consumer: Consumer Real Estate 415,457 — — 415,457 76,716,359 77,131,816 — Consumer-Other 56,784 — 33,322 90,106 6,914,957 7,005,063 33,322 Total $ 916,763 $ — $ 1,534,475 $ 2,451,238 $ 258,124,877 $ 260,576,115 $ 123,230 December 31, 2015 30-59 60-89 Greater Than 90 Days Total Past Due Current Total Loans Receivable Recorded Investment > 90 Days and Accruing Commercial $ 1,162,676 $ 250,370 $ 4,317 $ 1,417,363 $ 49,520,902 $ 50,938,265 $ — Commercial Real Estate: Commercial Real Estate -Construction — — — — 1,005,118 1,005,118 — Commercial Real Estate -Other 91,607 1,215,473 1,152,774 2,459,854 113,276,180 115,736,034 — Consumer: Consumer Real Estate 68,240 249,754 82,015 400,009 69,377,298 69,777,307 — Consumer-Other 69,333 58,116 6,056 133,505 5,032,476 5,165,981 1,606 Total $ 1,391,856 $ 1,773,713 $ 1,245,162 $ 4,410,731 $ 238,211,974 $ 242,622,705 $ 1,606 |
Schedule of non-accrual loans | The following table summarizes the balances of non-accrual loans: Loans Receivable on Non-Accrual December 31, 2016 December 31, 2015 Commercial $ 61,781 $ 4,317 Commercial Real Estate: Commercial Real Estate - Construction — — Commercial Real Estate - Other 1,678,876 1,970,306 Consumer: Consumer - Real Estate — 82,015 Consumer - Other 964 4,450 Total $ 1,741,621 $ 2,061,088 |
Schedule of changes in the allowance and an allocation of the allowance by loan category | The following tables set forth the changes in the allowance and an allocation of the allowance by loan category at December 31, 2016, December 31, 2015 and December 31, 2014. The allowance 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. December 31, 2016 Commercial Commercial Real Estate-Construction Commercial Real Estate-Other Consumer Real Estate Consumer Other Total Allowance for Loan Losses Beginning Balance $ 896,854 $ 59,861 $ 1,345,094 $ 941,470 $ 174,548 $ 3,417,827 Charge-offs (33,046 ) — (78,300 ) (82,015 ) (14,934 ) (208,295 ) Recoveries — — 65,000 — 7,085 72,085 Provisions 681,380 (8,392 ) 42,912 (133,064 ) (12,836 ) 570,000 Ending Balance $ 1,545,188 $ 51,469 $ 1,374,706 $ 726,391 $ 153,863 $ 3,851,617 December 31, 2015 Commercial Commercial Real Estate-Construction Commercial Real Estate-Other Consumer Real Estate Consumer Other Total Allowance for Loan Losses Beginning Balance $ 1,211,130 $ 42,904 $ 1,112,387 $ 863,351 $ 105,076 $ 3,334,848 Charge-offs (99,737 ) — (55,252 ) (6,075 ) (40,007 ) (201,071 ) Recoveries 9,164 — 53,753 6,075 22,558 91,550 Provisions (223,703 ) 16,957 234,206 78,119 86,921 192,500 Ending Balance $ 896,854 $ 59,861 $ 1,345,094 $ 941,470 $ 174,548 $ 3,417,827 December 31, 2014 Commercial Commercial Real Estate-Construction Commercial Real Estate-Other Consumer Real Estate Consumer Other Total Allowance for Loan Losses Beginning Balance $ 1,448,804 $ 22,137 $ 1,064,363 $ 672,813 $ 84,160 $ 3,292,277 Charge-offs (83,042 ) — (15,834 ) — (14,154 ) (113,030 ) Recoveries — — 46,000 — 27,101 73,101 Provisions (154,632 ) 20,767 17,858 190,538 7,969 82,500 Ending Balance $ 1,211,130 $ 42,904 $ 1,112,387 $ 863,351 $ 105,076 $ 3,334,848 The following tables present, by portfolio segment and reserving methodology, the allocation of the allowance for loan losses and the gross investment in loans. December 31, 2016 Commercial Commercial Commercial Real Estate-Other Consumer Consumer Other Total Allowance for Loan Losses Individually evaluated for impairment $ 1,051,219 $ — $ 324,587 $ 43,119 $ 89,047 $ 1,507,972 Collectively evaluated for impairment 493,969 51,469 1,050,119 683,272 64,816 2,343,645 Total Allowance for Losses $ 1,545,188 $ 51,469 $ 1,374,706 $ 726,391 $ 153,863 $ 3,851,617 Loans Receivable Individually evaluated for impairment $ 1,301,259 $ — $ 3,225,351 $ 1,286,127 $ 89,047 $ 5,901,784 Collectively evaluated for impairment 50,960,950 1,208,901 119,742,775 75,845,689 6,916,016 254,674,331 Total Loans Receivable $ 52,262,209 $ 1,208,901 $ 122,968,126 $ 77,131,816 $ 7,005,063 $ 260,576,115 December 31, 2015 Commercial Commercial Commercial Real Consumer Real Consumer Other Total Allowance for Loan Losses Individually evaluated for impairment $ 387,979 $ — $ 253,105 $ 342,320 $ 100,103 $ 1,083,507 Collectively evaluated for impairment 508,875 59,861 1,091,989 599,150 74,445 2,334,320 Total Allowance for Loan Losses $ 896,854 $ 59,861 $ 1,345,094 $ 941,470 $ 174,548 $ 3,417,827 Loans Receivable Individually evaluated for impairment $ 1,639,974 $ — $ 3,551,495 $ 1,245,419 $ 105,819 $ 6,542,707 Collectively evaluated for impairment 49,298,291 1,005,118 112,184,539 68,531,888 5,060,162 236,079,998 $ 50,938,265 $ 1,005,118 $ 115,736,034 $ 69,777,307 $ 5,165,981 $ 242,622,705 |
Schedule of loans individually evaluated and considered impaired | As of December 31, 2016 and 2015, loans individually evaluated and considered impaired are presented in the following table: Impaired and Restructured Loans As of The Year Ended December 31, 2016 2015 Unpaid Principal Balance Recorded Investment Related Allowance Unpaid Principal Balance Recorded Investment Related Allowance With no related allowance recorded: Commercial $ 250,040 $ 250,040 $ — $ 692,831 $ 692,831 $ — Commercial Real Estate- — — — — — — Commercial Real Estate-Other 2,174,770 2,174,770 — 2,476,018 2,476,018 — Consumer Real Estate 1,243,008 1,243,008 — 450,402 450,402 — Consumer Other — — — 5,715 5,715 — $ 3,667,818 $ 3,667,818 $ — $ 3,624,966 $ 3,624,966 $ — With an allowance recorded: Commercial $ 1,051,219 $ 1,051,219 $ 1,051,219 $ 947,143 $ 947,143 $ 387,979 Commercial Real Estate- Construction — — — — — — Commercial Real Estate-Other 1,050,581 1,050,581 324,587 1,075,477 1,075,477 253,105 Consumer Real Estate 43,119 43,119 43,119 795,017 795,017 342,320 Consumer Other 89,047 89,047 89,047 100,104 100,104 100,103 $ 2,233,966 $ 2,233,966 $ 1,507,972 $ 2,917,741 $ 2,917,741 $ 1,083,507 Total Commercial $ 1,301,259 $ 1,301,259 $ 1,051,219 $ 1,639,974 $ 1,639,974 $ 387,979 Commercial Real Estate-Construction — — — — — — Commercial Real Estate-Other 3,225,351 3,225,351 324,587 3,551,495 3,551,495 253,105 Consumer Real Estate 1,286,127 1,286,127 43,119 1,245,419 1,245,419 342,320 Consumer Other 89,047 89,047 89,047 105,819 105,819 100,103 $ 5,901,784 $ 5,901,784 $ 1,507,972 $ 6,542,707 $ 6,542,707 $ 1,083,507 The following table presents average impaired loans and interest income recognized on those impaired loans, by class segment, for the periods indicated. For the Year Ended December 31, 2016 2015 2014 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized With no related allowance recorded: Commercial $ 267,747 $ 12,282 $ 750,350 $ 43,853 $ 647,135 $ 18,129 Commercial Real Estate-Construction — — — — — — Commercial Real Estate-Other 2,267,288 81,582 2,500,204 128,352 3,515,431 177,416 Consumer Real Estate 1,242,515 22,111 450,117 17,035 351,550 12,877 Consumer-Other — — 56,758 2,557 — — $ 3,777,550 $ 115,975 $ 3,757,429 $ 191,797 $ 4,514,116 $ 208,422 With an allowance recorded: Commercial $ 1,087,559 $ 49,985 $ 1,009,765 $ 49,166 $ 1,222,383 $ 56,432 Commercial Real Estate-Construction — — — — — — Commercial Real Estate-Other 1,047,685 16,138 1,066,896 48,945 790,998 29,218 Consumer Real Estate 43,155 1,514 811,014 32,362 688,922 34,154 Consumer Other 94,945 5,533 55,439 3,540 41,631 1,923 $ 2,273,344 $ 73,170 $ 2,943,114 $ 134,013 $ 2,743,934 $ 121,727 Total Commercial $ 1,355,306 $ 62,267 $ 1,760,115 $ 93,019 $ 1,869,518 $ 74,561 Commercial Real Estate-Construction — — — — — — Commercial Real Estate-Other 3,314,973 97,720 3,567,100 177,297 4,306,429 206,634 Consumer Real Estate 1,285,670 23,625 1,261,131 49,397 1,040,472 47,031 Consumer Other 94,945 5,533 112,197 6,097 41,631 1,923 $ 6,050,894 $ 189,145 $ 6,700,543 $ 325,810 $ 7,258,050 $ 330,149 |
CONCENTRATIONS OF CREDIT RISK (
CONCENTRATIONS OF CREDIT RISK (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
Schedule of loan concentration | Our loans were concentrated in the following categories. December 31, 2016 December 31, 2015 Commercial 20.06% 21.00% Commercial Real Estate-Construction 0.46% 0.41% Commercial Real Estate-Other 47.20% 47.70% Consumer Real Estate 29.59% 28.76% Consumer-Other 2.69% 2.13% Total Loans 100.00% 100.00% |
PREMISES, EQUIPMENT AND LEASE35
PREMISES, EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of premises, equipment and leasehold improvements | Premises, equipment and leasehold improvements are summarized as follows: December 31, 2016 2015 Bank buildings $ 1,824,613 $ 1,824,613 Land 838,075 838,075 Leasehold purchase 30,000 30,000 Lease improvements 690,212 687,333 Construction in process 11,754 11,754 Equipment 3,264,488 3,070,783 6,659,142 6,462,558 Accumulated depreciation (4,362,518 ) (4,173,330 ) Total $ 2,296,624 $ 2,289,228 |
Schedule of minimum rental commitments for leases | Minimum rental commitments for these leases as of December 31, 2016 are as follows: 2017 $ 615,122 2018 622,890 2019 614,103 2020 591,067 2021 608,257 2022 and thereafter 4,708,393 Total $ 7,759,832 |
OTHER REAL ESTATE OWNED (Tables
OTHER REAL ESTATE OWNED (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Real Estate Owned, Disclosure of Detailed Components [Abstract] | |
Schedule of activity in other real estate owned | The following table summarizes the activity in other real estate owned at December 31, 2016 and December 31, 2015. December 31, 2016 December 31, 2015 Balance, beginning of year $ 620,394 $ 521,943 Additions-foreclosure — 98,451 Sales (98,451 ) — Write-downs — — Balance, end of year $ 521,943 $ 620,394 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Deposits: | |
Schedule of maturities of certificates of deposits | At December 31, 2016, the scheduled maturities of certificates of deposit are as follows: 2017 $ 41,020,714 2018 1,242,741 2019 516,921 2020 472,367 2021 and thereafter 588,514 $ 43,841,257 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense | Total income taxes for the years ended December 31, 2016, 2015 and 2014 are as follows: For the Year Ended December 31, 2016 2015 2014 Income tax expense $ 1,688,433 $ 2,287,248 $ 1,997,866 Unrealized gains (losses) on securities available for sale presented in accumulated other comprehensive income (loss) (939,482 ) (147,104 ) 168,627 Total $ 748,951 $ 2,140,144 $ 2,166,493 Income tax expense was as follows: For the Year Ended December 31, 2016 2015 2014 Current income taxes Federal $ 2,438,687 $ 2,102,154 $ 1,703,444 State — 224,083 200,361 Total current tax expense 2,438,687 2,326,237 1,903,805 Deferred income tax (benefit) expense (750,254 ) (38,989 ) 94,061 Income tax expense $ 1,688,433 $ 2,287,248 $ 1,997,866 |
Schedule of income tax reconciliation | The differences between actual income tax expense and the amounts computed by applying the U.S. federal income tax rate of 34% to pretax income from continuing operations for the periods indicated are reconciled as follows: For the Year Ended December 31, 2016 2015 2014 Computed “expected” tax expense $ 2,358,069 $ 2,438,322 $ 2,174,873 Increase (reduction) in income taxes resulting from: State income tax, net of federal benefit (156,114 ) 147,895 132,238 Tax exempt interest income (339,994 ) (341,970 ) (357,834 ) Other, net (173,528 ) 43,001 48,589 $ 1,688,433 $ 2,287,248 $ 1,997,866 |
Schedule of deferred tax assets and liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2016 and 2015 are presented below: December 31 2016 2015 Deferred tax assets: Allowance for loan losses $ 1,248,551 $ 1,064,916 State net operating loss carryforward 50,301 45,987 State credit carryforward 236,536 — Unrealized loss on securities available for sale 356,562 — Other 45,661 23,749 Total gross deferred tax assets 1,937,611 1,134,652 Valuation allowance (50,301 ) (45,987 ) Deferred tax liabilities: Prepaid expenses (2,779 ) (1,363 ) Unrealized gain on securities available for sale — (582,926 ) Deferred loan fees (46,392 ) (40,184 ) Fixed assets, principally due to differences in depreciation (52,236 ) (24,611 ) Other bond accretion (78,877 ) (65,735 ) Total gross deferred tax liabilities (180,284 ) (714,819 ) Net deferred tax assets $ 1,707,026 $ 373,846 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions Tables | |
Schedule of related party loans | Related party loans are summarized as follows: DECEMBER 31, 2016 2015 Balance at beginning of year $ 6,523,137 $ 6,664,467 New loans or advances 4,833,545 6,662,930 Repayments (7,412,542 ) (6,804,260 ) Balance at end of year $ 3,944,140 $ 6,523,137 |
OTHER EXPENSE (Tables)
OTHER EXPENSE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |
Schedule of other operating expenses | A summary of the components of other operating expense is as follows: For the Year Ended December 31, 2016 2015 2014 Advertising and business development $ 16,159 $ 16,662 $ 12,695 Supplies 94,006 111,604 123,087 Telephone and postage 194,853 188,052 193,039 Insurance 42,192 42,504 44,271 Professional fees 431,424 423,319 411,742 Data processing services 594,550 518,788 493,977 State and FDIC insurance and fees 242,926 228,627 216,129 Courier service 96,823 95,877 104,366 Amortization of state tax credit 325,000 — — Other 601,843 542,949 552,930 $ 2,639,776 $ 2,168,382 $ 2,152,236 |
STOCK INCENTIVE PLAN (Tables)
STOCK INCENTIVE PLAN (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of fair value weighted-average assumptions as of options | The fair value of options granted was determined using the following weighted-average assumptions as of grant date: 2016 2015 2014 Risk free interest rate 2.33 % 1.96 % 2.33 % 2.94 % Expected life (in years) 10 10 10 10 Expected stock price volatility 27.95 % 19.62 % 19.62 % 36.34 % Dividend yield 3.47 % 4.13 % 4.13 % 3.98 % |
Schedule of activity under stock incentive plan | The following table presents a summary of the activity under the 1998 and 2010 Omnibus Stock Incentive Plans for the years ended December 31: 2016 2015 2014 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding, January 1 183,302 $ 10.81 176,181 $ 10.48 175,081 $ 10.31 Granted 10,000 15.99 23,650 14.44 11,000 13.49 Expired — — — — — — Exercised (39,539 ) 10.26 (9,378 ) 13.11 (2,750 ) 9.74 Forfeited (12,858 ) 13.84 (7,151 ) 11.64 (7,150 ) 11.15 Outstanding, December 31 140,905 $ 11.06 183,302 $ 10.81 176,181 $ 10.48 Exercisable at year end 12,620 $ 11.50 17,457 $ 12.95 19,012 $ 13.39 |
Schedule of information pertaining to options outstanding | The following table presents information pertaining to options outstanding at December 31, 2016: December 31, 2016 Exercise Price: Number of Options Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Intrinsic Value of Outstanding Options Number of Options Exercisable Weighted Average Exercise Price Intrinsic Value of Exercisable Options $ 13.22 6,050 — $ 13.22 $ 23,535 6,050 $ 13.22 $ 23,535 $ 11.73 1,600 1.2 $ 11.73 $ 8,608 1,120 $ 11.73 $ 6,026 $ 9.79 11,220 3.7 $ 9.79 $ 82,130 1,270 $ 9.79 $ 9,296 $ 10.61 4,400 4.2 $ 10.61 $ 28,600 — $ — $ — $ 9.47 71,610 4.5 $ 9.47 $ 54,710 4,180 $ 9.47 $ 31,935 $ 10.10 9,075 5.6 $ 10.10 $ 63,616 — $ — $ — $ 10.91 2,750 5.9 $ 10.91 $ 17,050 — $ — $ — $ 13.64 2,200 6.9 $ 13.64 $ 694 — $ — $ — $ 13.49 4,950 7.6 $ 13.49 $ 17,919 — $ — $ — $ 14.35 13,750 8.5 $ 14.35 $ 37,950 — $ — $ — $ 14.98 3,300 8.6 $ 14.98 $ 7,029 — $ — $ — $ 15.99 10,000 9.3 $ 15.99 $ 11,200 — $ — $ — 140,905 5.26 $ 11.06 $ 353,041 12,620 $ 11.50 $ 70,792 |
INCOME PER COMMON SHARE (Tables
INCOME PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of income per common share | The following table is a summary of the reconciliation of average shares outstanding for the years ended December 31: 2016 2015 2014 Numerator: Net income $ 5,247,063 $ 4,884,288 $ 4,398,820 Denominator: Weighted average shares outstanding 4,935,349 4,912,499 4,907,208 Effect of dilutive shares 118,765 154,586 125,003 Weighted average shares outstanding-diluted 5,054,114 5,067,085 5,032,211 Earnings per share - basic $ 1.06 $ 0.99 $ 0.90 Earnings per share - diluted $ 1.04 $ 0.96 $ 0.87 |
REGULATORY CAPITAL REQUIREMEN43
REGULATORY CAPITAL REQUIREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Regulatory Capital Requirements [Abstract] | |
Schedule of Regulatory Capital Requirements | The following tables present the actual and required capital amounts and ratios for the Company and Bank at December 31, 2016 and 2015: December 31, 2016 Actual For Capital To Be Well (Dollars in Thousands) Amount Ratio Amount Ratio Amount Ratio Total capital to risk-weighted assets: Company $ 44,850 15.46 % $ 23,213 8.00 % N/A N/A Bank $ 44,544 15.36 % $ 23,207 8.00 % $ 29,009 10.00 % Tier 1 capital to risk-weighted assets: Company $ 41,220 14.21 % $ 17,410 6.00 % N/A N/A Bank $ 40,915 14.10 % $ 17,405 6.00 % $ 23,207 8.00 % Tier 1 capital to average assets: Company $ 41,220 9.85 % $ 16,738 4.00 % N/A N/A Bank $ 40,915 9.78 % $ 16,735 4.00 % $ 20,919 5.00 % Common equity Tier 1 capital: Company $ 41,220 14.21 % $ 13,058 4.50 % N/A N/A Bank $ 40,915 14.10 % $ 13,054 4.50 % $ 18,856 6.50 % December 31, 2015 Actual For Capital To Be Well (Dollars in Thousands) Amount Ratio Amount Ratio Amount Ratio Total capital to risk-weighted assets: Company $ 41,497 15.54 % $ 21,359 8.00 % N/A N/A Bank $ 41,169 15.42 % $ 21,357 8.00 % $ 26,696 10.00 % Tier 1 capital to risk-weighted assets: Company $ 38,159 14.29 % $ 16,019 6.00 % N/A N/A Bank $ 37,831 14.17 % $ 16,018 6.00 % $ 21,357 8.00 % Tier 1 capital to average assets: Company $ 38,159 9.63 % $ 15,850 4.00 % N/A N/A Bank $ 37,831 9.55 % $ 15,843 4.00 % $ 19,803 5.00 % Common equity Tier 1 capital: Company $ 38,159 14.29 % $ 12,014 4.50 % N/A N/A Bank $ 37,831 14.17 % $ 12,013 4.50 % $ 17,353 6.50 % |
DISCLOSURES REGARDING FAIR VA44
DISCLOSURES REGARDING FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on a recurring basis | Assets and liabilities measured at fair value on a recurring basis at December 31, 2016 and December 31, 2015 are as follows: Balance at December 31, 2016 Quoted Significant Significant Unobservable Inputs Total US Treasury Notes $ 23,939,063 $ — $ — $ 23,939,063 Government Sponsored Enterprises — 51,034,091 — 51,034,091 Municipal Securities — 31,027,933 13,977,857 45,005,790 Total $ 23,939,063 $ 82,062,024 $ 13,977,857 $ 119,978,944 Balance at December 31, 2015 Quoted Significant Significant Unobservable Inputs Total US Treasury Notes $ 34,633,673 $ — $ — $ 34,633,673 Government Sponsored Enterprises — 51,284,332 — 51,284,332 Municipal Securities — 28,861,902 5,217,678 34,079,580 Total $ 34,633,673 $ 80,146,234 $ 5,217,678 $ 119,997,585 |
Schedule of changes in Level 3 instruments | The following table reconciles the changes in assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2016 and 2015: Level 3 2015 Beginning Balance $ 5,217,678 $ 1,377,089 Total gains or (losses) (realized/unrealized) Included in earnings — — Included in other comprehensive income (818,821 ) (34,411 ) Purchases, issuances and settlements, net of maturities 9,579,000 3,875,000 Transfers in and/or out of level 3 — — Ending Balance $ 13,977,857 $ 5,217,678 |
Schedule of assets and liabilities measured at fair value measured on a nonrecurring basis | The following table presents information about certain assets and liabilities measured at fair value on a nonrecurring basis at December 31, 2016, and 2015: December 31, 2016 Quoted (Level 1) Significant (Level 2) Significant (Level 3) Total Impaired loans $ — $ — $ 4,143,772 $ 4,143,772 Other real estate owned — — 521,943 521,943 Loans held for sale — 4,386,210 — 4,386,210 Total $ — $ 4,386,210 $ 4,665,715 $ 9,051,925 December 31, 2015 Quoted (Level 1) Significant (Level 2) Significant Unobservable (Level 3) Total Impaired loans $ — $ — $ 5,459,200 $ 5,459,200 Other real estate owned — — 620,394 620,394 Loans held for sale — 5,820,239 — 5,820,239 Total $ — $ 5,820,239 $ 6,079,594 $ 11,899,833 |
Schedule of unobservable inputs used in Level 3 fair value measurement | The following table provides information describing the unobservable inputs used in Level 3 fair value measurements at December 31, 2016: Inputs Valuation Technique Unobservable Input General Range of Inputs Impaired Loans Discounted Appraisals Collateral Discounts 0 – 35% Other Real Estate Owned Appraisal Value/ Comparison Sales/Other Estimates Appraisals and/or Sales of Comparable Properties Appraisals Discounted 10% to 20% for Sales Commissions and Other Holding Costs |
Schedule of carrying amount,estimated fair value and the financial hierarchy of entity's financial instruments | The following tables present the carrying amount, fair value, and placement in the fair value hierarchy of our financial instruments as of December 31, 2016 and December 31, 2015. Fair Value Measurements at December 31, 2016 Carrying Amount Estimated Fair Value Level 1 Level 2 Level 3 Financial Assets: Cash and due from banks $ 8,141,030 $ 8,141,030 $ 8,141,030 $ — $ — Interest-bearing deposits in other banks 18,101,300 18,101,300 18,101,300 — — Investments available for sale 119,978,944 119,978,944 23,939,063 82,062,024 13,977,857 Mortgage loans to be sold 4,386,210 4,386,210 — 4,386,210 — Loans 260,576,115 260,406,669 — — 260,406,669 Accrued interest receivable 1,614,002 1,614,002 — 1,614,002 — Financial Liabilities: Demand deposits 328,681,594 328,681,594 — 328,681,594 — Time deposits 43,841,257 43,856,383 — 43,856,383 — Accrued interest payable 51,629 51,629 — 51,629 — Fair Value Measurements at December 31, 2015 Carrying Amount Estimated Fair Value Level 1 Level 2 Level 3 Financial Assets: Cash and due from banks $ 5,295,924 $ 5,295,924 $ 5,295,924 $ — $ — Interest-bearing deposits in other banks 23,898,862 23,898,862 23,898,862 — — Investments available for sale 119,997,585 119,997,585 34,633,673 80,146,234 5,217,678 Mortgage loans to be sold 5,820,239 5,820,239 — 5,820,239 — Loans 242,622,705 242,581,154 — — 242,581,154 Accrued interest receivable 1,284,063 1,284,063 1,284,063 Financial Liabilities: Demand deposits 303,950,800 303,950,800 — 303,950,800 — Time deposits 54,767,812 54,780,915 — 54,780,915 — Accrued interest payable 73,421 73,421 — 73,421 — |
ACCUMULATED OTHER COMPREHENSI45
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of reclassification in accumulated other comprehensive income | The following table summarizes the components of accumulated other comprehensive income (loss) and changes in those components as of and for the years ended December 31: Available for sale securities Beginning Balance December 31, 2013 $ 955,900 Change in net unrealized gains (losses) on securities available for sale 768,326 Reclassification adjustment for net securities gains included in net income (312,577 ) Income tax expense (benefit) (168,627 ) Balance December 31, 2014 1,243,022 Change in net unrealized gains (losses) on securities available for sale 26,255 Reclassification adjustment for net securities gains included in net income (423,832 ) Income tax expense (benefit) 147,104 Balance December 31, 2015 992,549 Change in net unrealized gains (losses) on securities available for sale (2,158,236 ) Reclassification adjustment for net securities gains included in net income (380,904 ) Income tax expense 939,482 Balance December 31, 2016 $ (607,109 ) |
Schedule of amounts reclassified from accumulated other comprehensive income | The following table shows the line items in the consolidated Statements of Operations affected by amounts reclassified from accumulated other comprehensive income (loss): Year Ended December 31, 2016 2015 2014 Gain on sale of investments, net $ 380,904 $ 423,832 $ 312,577 Tax effect (140,934 ) — — Total reclassification, net of tax $ 239,970 $ 423,832 $ 312,577 |
BANK OF SOUTH CAROLINA CORPOR46
BANK OF SOUTH CAROLINA CORPORATION - PARENT COMPANY (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Schedule of condensed financial statements of parent company | CONDENSED STATEMENTS OF FINANCIAL CONDITION 2016 2015 Assets Cash $ 922,595 $ 946,996 Investment in wholly-owned bank subsidiary 40,308,166 38,823,720 Other assets 76,077 20,154 Total assets $ 41,306,838 $ 39,790,870 Liabilities and shareholders’ equity Other liabilities $ 693,864 $ 639,158 Shareholders’ equity 40,612,974 39,151,712 Total liabilities and shareholders’ equity $ 41,306,838 $ 39,790,870 CONDENSED STATEMENTS OF OPERATIONS 2016 2015 2014 Interest income $ 571 $ 302 $ 306 Net operating expenses (177,612 ) (195,636 ) (187,284 ) Dividends received from bank 2,340,000 2,475,000 2,865,000 Equity in undistributed earnings of subsidiary 3,084,104 2,604,622 1,720,798 Net income $ 5,247,063 $ 4,884,288 $ 4,398,820 CONDENSED STATEMENTS OF CASH FLOWS 2016 2015 2014 Cash flows from operating activities: Net income $ 5,247,063 $ 4,884,288 $ 4,398,820 Stock-based compensation expense 76,529 78,987 74,908 Equity in undistributed earnings of subsidiary (3,084,104 ) (2,604,622 ) (1,720,798 ) Decrease (increase) in other assets (55,923 ) 202,043 (40,418 ) Net cash provided by operating activities 2,183,565 2,560,696 2,712,512 Cash flows from financing activities: Dividends paid (2,613,715 ) (2,380,062 ) (2,765,735 ) Cash in lieu of fractional shares — (4,778 ) — Stock options exercised 405,749 122,946 26,050 Net cash used by financing activities (2,207,966 ) (2,261,894 ) (2,739,685 ) Net increase (decrease) in cash (24,401 ) 298,802 (27,173 ) Cash at beginning of year 946,996 648,194 675,367 Cash at ending of year $ 922,595 $ 946,996 $ 648,194 Supplemental disclosure for non-cash investing and financing activity: Change in dividends payable $ 54,706 $ 59,178 $ 325 |
QUARTERLY RESULTS OF OPERATIO47
QUARTERLY RESULTS OF OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly operating results | The tables below represent the quarterly results of operations for the years ended December 31, 2016 and 2015, respectively: 2016 FOURTH THIRD SECOND FIRST Total interest and fee income $ 3,862,720 $ 4,030,143 $ 3,770,669 $ 3,632,065 Total interest expense 95,146 96,467 92,988 94,139 Net interest income 3,767,574 3,933,676 3,677,681 3,537,926 Provision for loan losses 175,000 210,000 140,000 45,000 Net interest income after provisions for loan losses 3,592,574 3,723,676 3,537,681 3,492,926 Other income 638,896 686,586 729,572 806,029 Other expense 2,715,147 2,584,268 2,436,881 2,536,148 Income before income tax expense 1,516,323 1,825,994 1,830,372 1,762,807 Income tax expense 203,444 399,656 518,262 567,071 Net income $ 1,312,879 $ 1,426,338 $ 1,312,110 $ 1,195,736 Basic income per common share $ 0.27 $ 0.28 $ 0.27 $ 0.24 Diluted income per common share $ 0.26 $ 0.28 $ 0.26 $ 0.24 2015 FOURTH THIRD SECOND FIRST Total interest and fee income $ 3,635,011 $ 3,569,672 $ 3,550,663 $ 3,474,602 Total interest expense 108,115 101,230 99,579 93,471 Net interest income 3,526,896 3,468,442 3,451,084 3,381,131 Provision for loan losses 110,000 7,500 70,000 5,000 Net interest income after provisions for loan losses 3,416,896 3,460,942 3,381,084 3,376,131 Other income 788,770 662,038 868,492 730,658 Other expense 2,402,221 2,372,742 2,399,458 2,339,054 Income before income tax expense 1,803,445 1,750,238 1,850,118 1,767,737 Income tax expense 576,474 551,319 596,680 562,775 Net income $ 1,226,971 $ 1,198,919 $ 1,253,438 $ 1,204,960 Basic income per common share $ 0.25 $ 0.24 $ 0.26 $ 0.25 Diluted income per common share $ 0.24 $ 0.24 $ 0.25 $ 0.22 |
SUMMARY OF SIGNIFICANT ACCOUN48
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 12 Months Ended |
Dec. 31, 2016 | |
Equipment [Member] | Lower Range [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 3 years |
Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 15 years |
Bank Buildings [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 40 years |
INVESTMENT SECURITIES AVAILAB49
INVESTMENT SECURITIES AVAILABLE FOR SALE (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | ||
Carrying amount of securities pledged to secure deposits and repurchase agreements | $ 47,619,232 | $ 48,027,575 |
Tax provision | $ 140,934 | $ 156,818 |
INVESTMENT SECURITIES AVAILAB50
INVESTMENT SECURITIES AVAILABLE FOR SALE (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Amortized Cost | $ 120,942,615 | $ 118,422,116 |
Gross Unrealized Gains | 936,448 | 1,783,297 |
Gross Unrealized Losses | (1,900,119) | (207,828) |
Investments available for sale | 119,978,944 | 119,997,585 |
U.S. Treasury Notes [Member] | ||
Amortized Cost | 24,148,295 | 34,517,996 |
Gross Unrealized Gains | 41,153 | 161,037 |
Gross Unrealized Losses | (250,385) | (45,360) |
Investments available for sale | 23,939,063 | 34,633,673 |
Government-Sponsored Enterprises [Member] | ||
Amortized Cost | 51,737,930 | 51,136,426 |
Gross Unrealized Gains | 129,482 | 281,650 |
Gross Unrealized Losses | (833,321) | (133,744) |
Investments available for sale | 51,034,091 | 51,284,332 |
Municipal Securties [Member] | ||
Amortized Cost | 45,056,390 | 32,767,694 |
Gross Unrealized Gains | 765,813 | 1,340,610 |
Gross Unrealized Losses | (816,413) | (28,724) |
Investments available for sale | $ 45,005,790 | $ 34,079,580 |
INVESTMENT SECURITIES AVAILAB51
INVESTMENT SECURITIES AVAILABLE FOR SALE (Details 1) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Amortized Cost | ||
Due in one year or less | $ 3,343,347 | $ 3,311,346 |
Due in one year to five years | 82,848,411 | 69,870,930 |
Due in five years to ten years | 29,662,030 | 41,930,801 |
Due in ten years and over | 5,088,827 | 3,309,039 |
Total | 120,942,615 | 118,422,116 |
Estimated Fair Value | ||
Due in one year or less | 3,350,205 | 3,326,249 |
Due in one year to five years | 82,682,901 | 70,584,179 |
Due in five years to ten years | 29,169,228 | 42,670,986 |
Due in ten years and over | 4,776,610 | 3,416,171 |
Total | $ 119,978,944 | $ 119,997,585 |
INVESTMENT SECURITIES AVAILAB52
INVESTMENT SECURITIES AVAILABLE FOR SALE (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Less than 12 Months | ||
Fair Value | $ 70,711,744 | $ 21,900,656 |
Gross Unrealized Losses | (1,900,119) | (112,622) |
12 months or Longer | ||
Fair value | 5,002,335 | |
Gross Unrealized Losses | (95,206) | |
Total | ||
Fair value | 70,711,744 | 26,902,991 |
Gross Unrealized Losses | (1,900,119) | (207,828) |
U.S. Treasury Notes [Member] | ||
Less than 12 Months | ||
Fair Value | 17,968,594 | 10,064,063 |
Gross Unrealized Losses | (250,385) | (45,360) |
Total | ||
Fair value | 17,958,594 | 10,064,063 |
Gross Unrealized Losses | (250,385) | (45,360) |
Government-Sponsored Enterprises [Member] | ||
Less than 12 Months | ||
Fair Value | 30,136,720 | 7,475,445 |
Gross Unrealized Losses | (833,321) | (38,538) |
12 months or Longer | ||
Fair value | 5,002,335 | |
Gross Unrealized Losses | (95,206) | |
Total | ||
Fair value | 30,136,720 | 12,477,780 |
Gross Unrealized Losses | (833,321) | (133,744) |
Municipal Securties [Member] | ||
Less than 12 Months | ||
Fair Value | 22,606,430 | 4,361,148 |
Gross Unrealized Losses | (816,413) | (28,724) |
Total | ||
Fair value | 22,606,430 | 4,361,148 |
Gross Unrealized Losses | $ (816,413) | $ (28,724) |
INVESTMENT SECURITIES AVAILAB53
INVESTMENT SECURITIES AVAILABLE FOR SALE (Details 3) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Investments, Debt and Equity Securities [Abstract] | |||
Gross proceeds | $ 36,218,087 | $ 16,564,118 | $ 37,159,363 |
Gross realized gains | 384,963 | $ 423,832 | $ 312,577 |
Gross realized losses | $ (4,059) |
LOANS AND ALLOWANCE FOR LOAN 54
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details Narrative) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Receivables [Abstract] | ||
Deferred loan fees | $ 136,446 | $ 118,188 |
Loans pledged as collateral to secure funding with the Federal Reserve Bank | 101,200,000 | 102,100,000 |
Restructured loans | $ 378,392 | $ 458,268 |
LOANS AND ALLOWANCE FOR LOAN 55
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Loans | $ 260,576,115 | $ 242,622,705 |
Allowance for loan losses | (3,851,617) | (3,417,827) |
Loans, net | 256,724,498 | 239,204,878 |
Commercial [Member] | ||
Loans | 52,262,209 | 50,938,265 |
Commercial Real Estate Construction [Member] | ||
Loans | 1,208,901 | 1,005,118 |
Commercial Real Estate Other [Member] | ||
Loans | 122,968,126 | 115,736,034 |
Consumer Real Estate [Member] | ||
Loans | 77,131,816 | 69,777,307 |
Consumer Other [Member] | ||
Loans | $ 7,005,063 | $ 5,165,981 |
LOANS AND ALLOWANCE FOR LOAN 56
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 1) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Credit risks by category and internally assigned grades | ||
Loans | $ 260,576,115 | $ 242,622,705 |
Pass [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 246,423,017 | 228,277,519 |
Watch [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 5,087,351 | 5,135,118 |
OAEM [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 3,321,493 | 2,667,224 |
Substandard [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 5,744,254 | 6,542,844 |
Commercial [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 52,262,209 | 50,938,265 |
Commercial [Member] | Pass [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 48,289,944 | 46,865,088 |
Commercial [Member] | Watch [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 1,004,957 | 1,096,200 |
Commercial [Member] | OAEM [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 1,666,048 | 1,337,002 |
Commercial [Member] | Substandard [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 1,301,260 | 1,639,975 |
Commercial Real Estate Construction [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 1,208,901 | 1,005,118 |
Commercial Real Estate Construction [Member] | Pass [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 798,884 | 572,101 |
Commercial Real Estate Construction [Member] | Watch [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 410,017 | 433,017 |
Commercial Real Estate Other [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 122,968,126 | 115,736,034 |
Commercial Real Estate Other [Member] | Pass [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 116,490,396 | 110,040,948 |
Commercial Real Estate Other [Member] | Watch [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 2,625,079 | 940,073 |
Commercial Real Estate Other [Member] | OAEM [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 995,549 | 1,203,518 |
Commercial Real Estate Other [Member] | Substandard [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 2,857,102 | 3,551,495 |
Consumer Real Estate [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 77,131,816 | 69,777,307 |
Consumer Real Estate [Member] | Pass [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 74,115,426 | 65,941,806 |
Consumer Real Estate [Member] | Watch [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 899,306 | 2,490,339 |
Consumer Real Estate [Member] | OAEM [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 630,957 | 99,743 |
Consumer Real Estate [Member] | Substandard [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 1,486,127 | 1,245,419 |
Consumer Other [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 7,005,063 | 5,165,981 |
Consumer Other [Member] | Pass [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 6,728,367 | 4,857,576 |
Consumer Other [Member] | Watch [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 147,992 | 175,489 |
Consumer Other [Member] | OAEM [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 28,939 | 26,961 |
Consumer Other [Member] | Substandard [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | $ 99,765 | $ 105,955 |
LOANS AND ALLOWANCE FOR LOAN 57
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 2) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Delinquent loans | ||
Total Past Due | $ 2,451,238 | $ 4,410,731 |
Current | 258,124,877 | 238,211,974 |
Total Loans Receivable | 260,576,115 | 242,622,705 |
Recorded Investment > 90 Days and Accuring Interest | 123,230 | 1,606 |
30-59 Days Past Due [Member] | ||
Delinquent loans | ||
Total Past Due | 916,763 | 1,391,856 |
Greater Than 90 Days [Member] | ||
Delinquent loans | ||
Total Past Due | 1,534,475 | 1,245,162 |
60-89 Days Past Due [Member] | ||
Delinquent loans | ||
Total Past Due | 1,773,713 | |
Commercial [Member] | ||
Delinquent loans | ||
Total Past Due | 438,159 | 1,417,363 |
Current | 51,824,050 | 49,520,902 |
Total Loans Receivable | 52,262,209 | 50,938,265 |
Commercial [Member] | 30-59 Days Past Due [Member] | ||
Delinquent loans | ||
Total Past Due | 438,159 | 1,162,676 |
Commercial [Member] | Greater Than 90 Days [Member] | ||
Delinquent loans | ||
Total Past Due | 4,317 | |
Commercial [Member] | 60-89 Days Past Due [Member] | ||
Delinquent loans | ||
Total Past Due | 250,370 | |
Commercial Real Estate Construction [Member] | ||
Delinquent loans | ||
Current | 1,208,901 | 1,005,118 |
Total Loans Receivable | 1,208,901 | 1,005,118 |
Commercial Real Estate Other [Member] | ||
Delinquent loans | ||
Total Past Due | 1,507,516 | 2,459,854 |
Current | 121,460,610 | 113,276,180 |
Total Loans Receivable | 122,968,126 | 115,736,034 |
Recorded Investment > 90 Days and Accuring Interest | 89,908 | |
Commercial Real Estate Other [Member] | 30-59 Days Past Due [Member] | ||
Delinquent loans | ||
Total Past Due | 6,363 | 91,607 |
Commercial Real Estate Other [Member] | Greater Than 90 Days [Member] | ||
Delinquent loans | ||
Total Past Due | 1,501,153 | 1,152,774 |
Commercial Real Estate Other [Member] | 60-89 Days Past Due [Member] | ||
Delinquent loans | ||
Total Past Due | 1,215,473 | |
Consumer Real Estate [Member] | ||
Delinquent loans | ||
Total Past Due | 415,457 | 400,009 |
Current | 76,716,359 | 69,377,298 |
Total Loans Receivable | 77,131,816 | 69,777,307 |
Consumer Real Estate [Member] | 30-59 Days Past Due [Member] | ||
Delinquent loans | ||
Total Past Due | 415,457 | 68,240 |
Consumer Real Estate [Member] | Greater Than 90 Days [Member] | ||
Delinquent loans | ||
Total Past Due | 82,015 | |
Consumer Real Estate [Member] | 60-89 Days Past Due [Member] | ||
Delinquent loans | ||
Total Past Due | 249,754 | |
Consumer Other [Member] | ||
Delinquent loans | ||
Total Past Due | 90,106 | 133,505 |
Current | 6,914,957 | 5,032,476 |
Total Loans Receivable | 7,005,063 | 5,165,981 |
Recorded Investment > 90 Days and Accuring Interest | 33,322 | 1,606 |
Consumer Other [Member] | 30-59 Days Past Due [Member] | ||
Delinquent loans | ||
Total Past Due | 56,784 | 69,333 |
Consumer Other [Member] | Greater Than 90 Days [Member] | ||
Delinquent loans | ||
Total Past Due | $ 33,322 | 6,056 |
Consumer Other [Member] | 60-89 Days Past Due [Member] | ||
Delinquent loans | ||
Total Past Due | $ 58,116 |
LOANS AND ALLOWANCE FOR LOAN 58
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 3) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Loans Receivable on Non-Accrual | $ 1,741,621 | $ 2,061,088 |
Commercial [Member] | ||
Loans Receivable on Non-Accrual | 61,781 | 4,317 |
Commercial Real Estate Other [Member] | ||
Loans Receivable on Non-Accrual | 1,678,876 | 1,970,306 |
Consumer Real Estate [Member] | ||
Loans Receivable on Non-Accrual | 82,015 | |
Consumer Other [Member] | ||
Loans Receivable on Non-Accrual | $ 964 | $ 4,450 |
LOANS AND ALLOWANCE FOR LOAN 59
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 4) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Activity in the allowance for loan losses by portfolio segment | |||||||||||
Beginning Balance | $ 3,417,827 | $ 3,334,848 | $ 3,417,827 | $ 3,334,848 | $ 3,292,277 | ||||||
Charge-offs | (208,295) | (201,071) | (113,030) | ||||||||
Recoveries | 72,085 | 91,550 | 73,101 | ||||||||
Provisions | $ 175,000 | $ 210,000 | $ 140,000 | 45,000 | $ 110,000 | $ 7,500 | $ 70,000 | 5,000 | 570,000 | 192,500 | 82,500 |
Ending Balance | 3,851,617 | 3,417,827 | 3,851,617 | 3,417,827 | 3,334,848 | ||||||
Allowance for Loan Losses Ending Balances: | |||||||||||
Individually evaluated for impairment | 1,507,972 | 1,083,507 | 1,507,972 | 1,083,507 | |||||||
Collectively evaluated for impairment | 2,343,645 | 2,334,320 | 2,343,645 | 2,334,320 | |||||||
Loans Receivable: | |||||||||||
Individually evaluated for impairment | 5,901,784 | 6,542,707 | 5,901,784 | 6,542,707 | |||||||
Collectively evaluated for impairment | 254,674,331 | 236,079,998 | 254,674,331 | 236,079,998 | |||||||
Total Loan Receivable | 260,576,115 | 242,622,705 | 260,576,115 | 242,622,705 | |||||||
Commercial [Member] | |||||||||||
Activity in the allowance for loan losses by portfolio segment | |||||||||||
Beginning Balance | 896,854 | 1,211,130 | 896,854 | 1,211,130 | 1,448,804 | ||||||
Charge-offs | (33,045) | (99,737) | (83,042) | ||||||||
Recoveries | 9,164 | ||||||||||
Provisions | 681,380 | (223,703) | (154,632) | ||||||||
Ending Balance | 1,545,188 | 896,854 | 1,545,188 | 896,854 | 1,211,130 | ||||||
Allowance for Loan Losses Ending Balances: | |||||||||||
Individually evaluated for impairment | 1,051,219 | 387,979 | 1,051,219 | 387,979 | |||||||
Collectively evaluated for impairment | 493,969 | 508,875 | 493,969 | 508,875 | |||||||
Loans Receivable: | |||||||||||
Individually evaluated for impairment | 1,301,259 | 1,639,974 | 1,301,259 | 1,639,974 | |||||||
Collectively evaluated for impairment | 50,960,950 | 49,298,291 | 50,960,950 | 49,298,291 | |||||||
Total Loan Receivable | 52,262,209 | 50,938,265 | 52,262,209 | 50,938,265 | |||||||
Commercial Real Estate Construction [Member] | |||||||||||
Activity in the allowance for loan losses by portfolio segment | |||||||||||
Beginning Balance | 59,861 | 42,904 | 59,861 | 42,904 | 22,137 | ||||||
Provisions | (8,392) | 16,957 | 20,767 | ||||||||
Ending Balance | 51,469 | 59,861 | 51,469 | 59,861 | 42,904 | ||||||
Allowance for Loan Losses Ending Balances: | |||||||||||
Collectively evaluated for impairment | 51,469 | 59,861 | 51,469 | 59,861 | |||||||
Loans Receivable: | |||||||||||
Collectively evaluated for impairment | 1,208,901 | 1,005,118 | 1,208,901 | 1,005,118 | |||||||
Total Loan Receivable | 1,208,901 | 1,005,118 | 1,208,901 | 1,005,118 | |||||||
Commercial Real Estate Other [Member] | |||||||||||
Activity in the allowance for loan losses by portfolio segment | |||||||||||
Beginning Balance | 1,345,094 | 1,112,387 | 1,345,094 | 1,112,387 | 1,064,363 | ||||||
Charge-offs | (78,300) | (55,252) | (15,834) | ||||||||
Recoveries | 65,000 | 53,753 | 46,000 | ||||||||
Provisions | 42,912 | 234,206 | 17,858 | ||||||||
Ending Balance | 1,374,706 | 1,345,094 | 1,374,706 | 1,345,094 | 1,112,387 | ||||||
Allowance for Loan Losses Ending Balances: | |||||||||||
Individually evaluated for impairment | 324,587 | 253,105 | 324,587 | 253,105 | |||||||
Collectively evaluated for impairment | 1,050,119 | 1,091,989 | 1,050,119 | 1,091,989 | |||||||
Loans Receivable: | |||||||||||
Individually evaluated for impairment | 3,225,351 | 3,551,495 | 3,225,351 | 3,551,495 | |||||||
Collectively evaluated for impairment | 119,742,775 | 112,184,539 | 119,742,775 | 112,184,539 | |||||||
Total Loan Receivable | 122,968,126 | 115,736,034 | 122,968,126 | 115,736,034 | |||||||
Consumer Real Estate [Member] | |||||||||||
Activity in the allowance for loan losses by portfolio segment | |||||||||||
Beginning Balance | 941,470 | 863,351 | 941,470 | 863,351 | 672,813 | ||||||
Charge-offs | (82,015) | (6,075) | |||||||||
Recoveries | 6,075 | ||||||||||
Provisions | (133,064) | 78,119 | 190,538 | ||||||||
Ending Balance | 726,391 | 941,470 | 726,391 | 941,470 | 863,351 | ||||||
Allowance for Loan Losses Ending Balances: | |||||||||||
Individually evaluated for impairment | 43,119 | 342,320 | 43,119 | 342,320 | |||||||
Collectively evaluated for impairment | 683,272 | 599,150 | 683,272 | 599,150 | |||||||
Loans Receivable: | |||||||||||
Individually evaluated for impairment | 1,286,127 | 1,245,419 | 1,286,127 | 1,245,419 | |||||||
Collectively evaluated for impairment | 75,845,689 | 68,531,888 | 75,845,689 | 68,531,888 | |||||||
Total Loan Receivable | 77,131,816 | 69,777,307 | 77,131,816 | 69,777,307 | |||||||
Consumer Other [Member] | |||||||||||
Activity in the allowance for loan losses by portfolio segment | |||||||||||
Beginning Balance | $ 174,548 | $ 105,076 | 174,548 | 105,076 | 84,160 | ||||||
Charge-offs | (14,934) | (40,007) | (14,154) | ||||||||
Recoveries | 7,085 | 22,558 | 27,101 | ||||||||
Provisions | (12,836) | 86,921 | 7,969 | ||||||||
Ending Balance | 153,863 | 174,548 | 153,863 | 174,548 | $ 105,076 | ||||||
Allowance for Loan Losses Ending Balances: | |||||||||||
Individually evaluated for impairment | 89,047 | 100,103 | 89,047 | 100,103 | |||||||
Collectively evaluated for impairment | 64,816 | 74,445 | 64,816 | 74,445 | |||||||
Loans Receivable: | |||||||||||
Individually evaluated for impairment | 89,047 | 105,819 | 89,047 | 105,819 | |||||||
Collectively evaluated for impairment | 6,916,016 | 5,060,162 | 6,916,016 | 5,060,162 | |||||||
Total Loan Receivable | $ 7,005,063 | $ 5,165,981 | $ 7,005,063 | $ 5,165,981 |
LOANS AND ALLOWANCE FOR LOAN 60
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 5) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Impaired and Restructured Loans with no related allowance recorded | |||
Unpaid Principal Balance With no related allowance recorded | $ 3,667,818 | $ 3,624,966 | |
Recorded Investment With no related allowance recorded | 3,667,818 | 3,624,966 | |
Average Recorded Investment With no related allowance recorded | 3,777,550 | 3,757,429 | $ 4,514,116 |
Interest Income Recognized With no related allowance recorded | 115,975 | 191,797 | 208,422 |
Impaired and Restructured Loans with an allowance recorded | |||
Unpaid Principal Balance With an allowance recorded | 2,233,966 | 2,917,741 | |
Recorded Investment With an allowance recorded | 2,233,966 | 2,917,741 | |
Related Allowance | 1,507,972 | 1,083,507 | |
Average Recorded Investment With an allowance recorded | 2,273,344 | 2,943,114 | 2,743,934 |
Interest Income Recognized With an allowance recorded | 73,170 | 134,013 | 121,727 |
Total of Impaired and Restructured Loans | |||
Unpaid Principal balance | 5,901,784 | 6,542,707 | |
Recorded Investment | 5,901,784 | 6,542,707 | |
Average Recorded Investment | 6,050,894 | 6,700,543 | 7,258,050 |
Interest Income Recognized | 189,145 | 325,810 | 330,149 |
Commercial [Member] | |||
Impaired and Restructured Loans with no related allowance recorded | |||
Unpaid Principal Balance With no related allowance recorded | 250,040 | 692,831 | |
Recorded Investment With no related allowance recorded | 250,040 | 692,831 | |
Average Recorded Investment With no related allowance recorded | 267,747 | 750,350 | 647,135 |
Interest Income Recognized With no related allowance recorded | 12,282 | 43,853 | 18,129 |
Impaired and Restructured Loans with an allowance recorded | |||
Unpaid Principal Balance With an allowance recorded | 1,051,219 | 947,143 | |
Recorded Investment With an allowance recorded | 1,051,219 | 947,143 | |
Related Allowance | 1,051,219 | 387,979 | |
Average Recorded Investment With an allowance recorded | 1,087,559 | 1,009,765 | 1,222,383 |
Interest Income Recognized With an allowance recorded | 49,985 | 49,166 | 56,432 |
Total of Impaired and Restructured Loans | |||
Unpaid Principal balance | 1,301,259 | 1,639,974 | |
Recorded Investment | 1,301,259 | 1,639,974 | |
Average Recorded Investment | 1,355,306 | 1,760,115 | 1,869,518 |
Interest Income Recognized | 62,267 | 93,019 | 74,561 |
Commercial Real Estate Other [Member] | |||
Impaired and Restructured Loans with no related allowance recorded | |||
Unpaid Principal Balance With no related allowance recorded | 2,174,770 | 2,476,018 | |
Recorded Investment With no related allowance recorded | 2,174,770 | 2,476,018 | |
Average Recorded Investment With no related allowance recorded | 2,267,288 | 2,500,204 | 3,515,431 |
Interest Income Recognized With no related allowance recorded | 81,582 | 128,352 | 177,416 |
Impaired and Restructured Loans with an allowance recorded | |||
Unpaid Principal Balance With an allowance recorded | 1,050,581 | 1,075,477 | |
Recorded Investment With an allowance recorded | 1,050,581 | 1,075,477 | |
Related Allowance | 324,587 | 253,105 | |
Average Recorded Investment With an allowance recorded | 1,047,685 | 1,066,896 | 790,998 |
Interest Income Recognized With an allowance recorded | 16,138 | 48,945 | 29,218 |
Total of Impaired and Restructured Loans | |||
Unpaid Principal balance | 3,225,351 | 3,551,495 | |
Recorded Investment | 3,225,351 | 3,551,495 | |
Average Recorded Investment | 3,314,973 | 3,567,100 | 4,306,429 |
Interest Income Recognized | 97,720 | 177,297 | 206,634 |
Consumer Real Estate [Member] | |||
Impaired and Restructured Loans with no related allowance recorded | |||
Unpaid Principal Balance With no related allowance recorded | 1,243,008 | 450,402 | |
Recorded Investment With no related allowance recorded | 1,243,008 | 450,402 | |
Average Recorded Investment With no related allowance recorded | 1,242,515 | 450,117 | 351,550 |
Interest Income Recognized With no related allowance recorded | 22,111 | 17,035 | 12,877 |
Impaired and Restructured Loans with an allowance recorded | |||
Unpaid Principal Balance With an allowance recorded | 43,119 | 795,017 | |
Recorded Investment With an allowance recorded | 43,119 | 795,017 | |
Related Allowance | 43,119 | 342,320 | |
Average Recorded Investment With an allowance recorded | 43,155 | 811,014 | 688,922 |
Interest Income Recognized With an allowance recorded | 1,514 | 32,362 | 34,154 |
Total of Impaired and Restructured Loans | |||
Unpaid Principal balance | 1,286,127 | 1,245,419 | |
Recorded Investment | 1,286,127 | 1,245,419 | |
Average Recorded Investment | 1,285,670 | 1,261,131 | 1,040,472 |
Interest Income Recognized | 23,625 | 49,397 | 47,031 |
Consumer Other [Member] | |||
Impaired and Restructured Loans with no related allowance recorded | |||
Unpaid Principal Balance With no related allowance recorded | 5,715 | ||
Recorded Investment With no related allowance recorded | 5,715 | ||
Average Recorded Investment With no related allowance recorded | 56,758 | ||
Interest Income Recognized With no related allowance recorded | 2,557 | ||
Impaired and Restructured Loans with an allowance recorded | |||
Unpaid Principal Balance With an allowance recorded | 89,047 | 100,104 | |
Recorded Investment With an allowance recorded | 89,047 | 100,104 | |
Related Allowance | 89,047 | 100,103 | |
Average Recorded Investment With an allowance recorded | 94,945 | 55,439 | 41,631 |
Interest Income Recognized With an allowance recorded | 5,533 | 3,540 | 1,923 |
Total of Impaired and Restructured Loans | |||
Unpaid Principal balance | 89,047 | 105,819 | |
Recorded Investment | 89,047 | 105,819 | |
Average Recorded Investment | 94,945 | 112,197 | 41,631 |
Interest Income Recognized | $ 5,533 | $ 6,097 | $ 1,923 |
CONCENTRATIONS OF CREDIT RISK61
CONCENTRATIONS OF CREDIT RISK (Details) - Credit Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 100.00% | 100.00% |
Commercial [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 20.06% | 21.00% |
Commercial Real Estate Construction [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 0.46% | 0.41% |
Commercial Real Estate Other [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 47.20% | 47.70% |
Consumer Real Estate [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 29.59% | 28.76% |
Consumer Other [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 2.69% | 2.13% |
PREMISES, EQUIPMENT AND LEASE62
PREMISES, EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization | $ 189,188 | $ 196,827 | $ 200,178 |
Rent expense | $ 51,690 | $ 50,184 |
PREMISES, EQUIPMENT AND LEASE63
PREMISES, EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Premises, equipment and leasehold improvements, gross | $ 6,659,142 | $ 6,462,558 |
Accumulated depreciation | (4,362,518) | (4,173,330) |
Premises, equipment and leasehold improvements, net | 2,296,624 | 2,289,228 |
Bank Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises, equipment and leasehold improvements, gross | 1,824,613 | 1,824,613 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises, equipment and leasehold improvements, gross | 838,075 | 838,075 |
Leasehold Purchase [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises, equipment and leasehold improvements, gross | 30,000 | 30,000 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises, equipment and leasehold improvements, gross | 690,212 | 687,333 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises, equipment and leasehold improvements, gross | 11,754 | 11,754 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises, equipment and leasehold improvements, gross | $ 3,264,488 | $ 3,070,783 |
PREMISES, EQUIPMENT AND LEASE64
PREMISES, EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Details 1) | Dec. 31, 2016USD ($) |
Property, Plant and Equipment [Abstract] | |
2,017 | $ 615,122 |
2,018 | 622,890 |
2,019 | 614,103 |
2,020 | 591,067 |
2,021 | 608,257 |
2022 and thereafter | 4,708,393 |
Total | $ 7,759,832 |
OTHER REAL ESTATE OWNED (Detail
OTHER REAL ESTATE OWNED (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2016USD ($)Number | Dec. 31, 2015USD ($)Number | Dec. 31, 2014USD ($) | |
Real Estate Owned, Disclosure of Detailed Components [Abstract] | |||
(Loss) gain on sale of other real estate | $ | $ (13,450) | $ 2,382 | |
Number of properties | Number | 1 | 2 |
OTHER REAL ESTATE OWNED (Deta66
OTHER REAL ESTATE OWNED (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of activity in other real estate owned: | ||
Balance, beginning of year | $ 620,394 | $ 521,943 |
Additions - foreclosure | 98,451 | |
Sales | (98,451) | |
Balance, end of year | $ 521,943 | $ 620,394 |
DEPOSITS (Details Narrative)
DEPOSITS (Details Narrative) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Deposits: | ||
Deposits with deficit balance reclassified as other loans | $ 24,963 | $ 121,331 |
Time deposits over $250,000 | $ 17,822,136 | $ 25,896,768 |
DEPOSITS (Details)
DEPOSITS (Details) | Dec. 31, 2016USD ($) |
Maturities of certificates of deposits | |
2,017 | $ 41,020,714 |
2,018 | 1,242,741 |
2,019 | 516,921 |
2,020 | 472,367 |
2021 and thereafter | 588,514 |
Certificates of deposit | $ 43,841,257 |
SHORT-TERM BORROWINGS (Details
SHORT-TERM BORROWINGS (Details Narrative) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Line of Credit Facility [Line Items] | ||
Unused balance of line of credit | $ 21,000,000 | $ 18,000,000 |
Securities sold under repurchase agreements | $ 751 | 1,873,507 |
Maximum [Member] | ||
Line of Credit Facility [Line Items] | ||
Securities sold under repurchase agreements | 5,480,927 | |
Federal Reserve [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of credit maximum borrowing capacity | $ 75,000,000 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Federal income tax rate | 34.00% | |
Amortized expenses | $ 325,000 | |
Valuation allowance | 50,301 | $ 45,987 |
State Net Operating Loss [Member] | ||
Valuation allowance | $ 50,301 | $ 45,987 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||||||||||
Income tax expense | $ 203,444 | $ 399,656 | $ 518,262 | $ 567,071 | $ 576,474 | $ 551,319 | $ 596,680 | $ 562,775 | $ 1,688,433 | $ 2,287,248 | $ 1,997,866 |
Unrealized gains (losses) on securities available for sale presented in accumulated other comprehensive income (loss) | (939,482) | (147,104) | 168,627 | ||||||||
Total | $ 748,951 | $ 2,140,144 | $ 2,166,493 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current income tax | |||||||||||
Federal | $ 2,438,687 | $ 2,102,154 | $ 1,703,444 | ||||||||
State | 224,083 | 200,361 | |||||||||
Total current tax expense | 2,438,687 | 2,326,238 | 1,903,805 | ||||||||
Deferred income tax (benefit) expense | (750,254) | (38,989) | 94,061 | ||||||||
Income tax expense | $ 203,444 | $ 399,656 | $ 518,262 | $ 567,071 | $ 576,474 | $ 551,319 | $ 596,680 | $ 562,775 | $ 1,688,433 | $ 2,287,248 | $ 1,997,866 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||||||||||
Computed "expected" tax expense | $ 2,358,069 | $ 2,438,322 | $ 2,174,873 | ||||||||
Increase (reduction) in income taxes resulting from: | |||||||||||
State income tax, net of federal benefit | (156,114) | 147,895 | 132,238 | ||||||||
Tax exempt interest income | (339,994) | (341,970) | (357,834) | ||||||||
Other, net | (173,528) | 43,001 | 48,589 | ||||||||
Income tax expense | $ 203,444 | $ 399,656 | $ 518,262 | $ 567,071 | $ 576,474 | $ 551,319 | $ 596,680 | $ 562,775 | $ 1,688,433 | $ 2,287,248 | $ 1,997,866 |
INCOME TAXES (Details 3)
INCOME TAXES (Details 3) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Allowance for loan losses | $ 1,248,551 | $ 1,064,916 |
State net operating loss carryforward | 50,301 | 45,987 |
State credit carryforward | 236,536 | |
Unrealized loss on securities available for sale | 356,562 | |
Other | 45,661 | 23,749 |
Total gross deferred tax assets | 1,937,611 | 1,134,652 |
Valuation allowance | (50,301) | (45,987) |
Deferred tax liabilities: | ||
Prepaid expenses | (2,779) | (1,363) |
Unrealized gain on securities available for sale | (582,926) | |
Deferred loan fees | (46,392) | (40,184) |
Fixed assets, principally due to differences in depreciation | (52,236) | (24,611) |
Other bond accretion | (78,877) | (65,735) |
Total gross deferred tax liabilities | (180,284) | (714,819) |
Net deferred tax assets | $ 1,707,026 | $ 373,846 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Standby letters of credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Undiscounted future payments related to standby letters of credit | $ 793,992 | $ 745,187 |
Commitments to extend credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments to extend credit | $ 81,234,269 | $ 87,622,437 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Related Party Transactions [Abstract] | ||
Deposits held by related parties | $ 4,376,563 | $ 7,760,342 |
RELATED PARTY TRANSACTIONS (D77
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transactions [Abstract] | ||
Balance at beginning of year | $ 6,523,137 | $ 6,664,467 |
New loans or advances | 4,833,545 | 6,662,930 |
Repayments | (7,412,542) | (6,804,260) |
Balance at end of year | $ 3,944,140 | $ 6,523,137 |
OTHER EXPENSE (Details)
OTHER EXPENSE (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other Income and Expenses [Abstract] | |||
Advertising and business development | $ 16,159 | $ 16,662 | $ 12,695 |
Supplies | 94,006 | 111,604 | 123,087 |
Telephone and postage | 194,853 | 188,052 | 193,039 |
Insurance | 42,192 | 42,504 | 44,271 |
Professional fees | 431,424 | 423,319 | 411,742 |
Data processing services | 594,550 | 518,788 | 493,977 |
State and FDIC insurance and fees | 242,926 | 228,627 | 216,129 |
Courier service | 96,823 | 95,877 | 104,366 |
Amortization of state tax credit | 325,000 | ||
Other | 601,843 | 542,949 | 552,930 |
Other operating expenses | $ 2,639,776 | $ 2,168,382 | $ 2,152,236 |
STOCK INCENTIVE PLAN (Details N
STOCK INCENTIVE PLAN (Details Narrative) - USD ($) | 12 Months Ended | |||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 1998 | |
Distribution Made to Limited Liability Company (LLC) Member [Line Items] | ||||||
Dividend rate | 3.47% | 4.13% | 3.98% | |||
Total outstanding shares under plan | 140,905 | 183,302 | 176,181 | 175,081 | ||
Number of options exercisable under plan | 12,620 | 17,457 | 19,012 | |||
Intrinsic value of options exercised | $ 273,979 | $ 14,272 | $ 12,775 | |||
Stock-based compensation expense | 76,529 | $ 78,987 | $ 74,908 | |||
Unrecognized compensation cost | $ 346,974 | |||||
Period for unrecognized compensation cost to be recognized | 5 years 3 months 4 days | |||||
1998 Stock Incentive Plan [Member] | ||||||
Distribution Made to Limited Liability Company (LLC) Member [Line Items] | ||||||
Number of share authorized under stock incentive plan | 180,000 | |||||
Number of adjusted shares authorized | 329,422 | |||||
Total outstanding shares under plan | 7,650 | |||||
Number of options exercisable under plan | 7,170 | |||||
Stock dividends (percent) | 10.00% | |||||
Stock distribution (percent) | 25.00% | |||||
Stock dividend (percent) | 25.00% | |||||
2010 Stock Incentive Plan [Member] | ||||||
Distribution Made to Limited Liability Company (LLC) Member [Line Items] | ||||||
Number of share authorized under stock incentive plan | 300,000 | |||||
Number of adjusted shares authorized | 330,000 | |||||
Percent of options vesting in five years | 20.00% | |||||
Percentage of options vesting each following year | 20.00% | |||||
Stock dividends (percent) | 10.00% |
STOCK INCENTIVE PLAN (Details)
STOCK INCENTIVE PLAN (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Risk free interest rate | 2.33% | 2.94% | |
Expected life | 10 years | 10 years | 10 years |
Expected stock price volatility | 27.95% | 19.62% | 36.34% |
Dividend Yield | 3.47% | 4.13% | 3.98% |
Maximum [Member] | |||
Risk free interest rate | 1.96% | ||
Lower Range [Member] | |||
Risk free interest rate | 2.33% |
STOCK INCENTIVE PLAN (Details 1
STOCK INCENTIVE PLAN (Details 1) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Options | |||
Options outstanding, beginning | 183,302 | 176,181 | 175,081 |
Options granted | 10,000 | 23,650 | 11,000 |
Options exercised | (39,539) | (9,378) | (2,750) |
Options forfeited | (12,858) | (7,150) | (7,150) |
Options outstanding, ending | 140,905 | 183,302 | 176,181 |
Options exercisable | 12,620 | 17,457 | 19,012 |
Weighted Average Exercise Price | |||
Options outstanding, beginning | $ 10.81 | $ 10.48 | $ 10.31 |
Options granted | 15.99 | 14.44 | 13.49 |
Options forfeited | 10.26 | 13.11 | 9.74 |
Options exercised | 13.84 | 11.64 | 11.15 |
Options outstanding, ending | 11.06 | 10.81 | 10.48 |
Options exercisable | $ 11.50 | $ 12.95 | $ 13.39 |
STOCK INCENTIVE PLAN (Details 2
STOCK INCENTIVE PLAN (Details 2) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 11.06 | ||
Options outstanding, ending | 140,905 | ||
Options outstanding, weighted average remaining contractual life | 5 years 3 months 4 days | ||
Options exercisable, weighted average exercise price | $ 11.50 | $ 12.95 | $ 13.39 |
Options outstanding, intrinsic value | $ 353,041 | ||
Options exercisable | 12,620 | ||
Options exercisable, intrinsic value | $ 70,792 | ||
Exercise Price 1 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 13.22 | ||
Options outstanding, ending | 6,050 | ||
Options exercisable, weighted average exercise price | $ 13.22 | ||
Options outstanding, intrinsic value | $ 23,535 | ||
Options exercisable | 6,050 | ||
Options exercisable, intrinsic value | $ 23,535 | ||
Exercise Price 2 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 11.73 | ||
Options outstanding, ending | 1,600 | ||
Options outstanding, weighted average remaining contractual life | 1 year 2 months 12 days | ||
Options exercisable, weighted average exercise price | $ 11.73 | ||
Options outstanding, intrinsic value | $ 8,608 | ||
Options exercisable | 1,120 | ||
Options exercisable, intrinsic value | $ 6,026 | ||
Exercise Price 3 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 9.79 | ||
Options outstanding, ending | 11,220 | ||
Options outstanding, weighted average remaining contractual life | 3 years 8 months 12 days | ||
Options exercisable, weighted average exercise price | $ 9.79 | ||
Options outstanding, intrinsic value | $ 82,130 | ||
Options exercisable | 1,270 | ||
Options exercisable, intrinsic value | $ 9,296 | ||
Exercise Price 4 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 10.61 | ||
Options outstanding, ending | 4,400 | ||
Options outstanding, weighted average remaining contractual life | 4 years 2 months 12 days | ||
Options exercisable, weighted average exercise price | $ 10.61 | ||
Options outstanding, intrinsic value | $ 28,600 | ||
Exercise Price 5 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 9.47 | ||
Options outstanding, ending | 71,610 | ||
Options outstanding, weighted average remaining contractual life | 4 years 6 months | ||
Options exercisable, weighted average exercise price | $ 9.47 | ||
Options outstanding, intrinsic value | $ 54,710 | ||
Options exercisable | 4,180 | ||
Options exercisable, intrinsic value | $ 31,935 | ||
Exercise Price 6 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 10.1 | ||
Options outstanding, ending | 9,075 | ||
Options outstanding, weighted average remaining contractual life | 5 years 7 months 6 days | ||
Options exercisable, weighted average exercise price | $ 10.1 | ||
Options outstanding, intrinsic value | $ 63,616 | ||
Exercise Price 7 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 10.91 | ||
Options outstanding, ending | 2,750 | ||
Options outstanding, weighted average remaining contractual life | 5 years 10 months 24 days | ||
Options exercisable, weighted average exercise price | $ 10.91 | ||
Options outstanding, intrinsic value | $ 17,050 | ||
Exercise Price 8 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 13.64 | ||
Options outstanding, ending | 2,200 | ||
Options outstanding, weighted average remaining contractual life | 6 years 10 months 24 days | ||
Options exercisable, weighted average exercise price | $ 13.64 | ||
Options outstanding, intrinsic value | $ 694 | ||
Exercise Price 9 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 13.49 | ||
Options outstanding, ending | 4,950 | ||
Options outstanding, weighted average remaining contractual life | 7 years 7 months 6 days | ||
Options exercisable, weighted average exercise price | $ 13.49 | ||
Options outstanding, intrinsic value | $ 17,919 | ||
Exercise Price 10 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 14.35 | ||
Options outstanding, ending | 13,750 | ||
Options outstanding, weighted average remaining contractual life | 8 years 6 months | ||
Options exercisable, weighted average exercise price | $ 14.35 | ||
Options outstanding, intrinsic value | $ 37,950 | ||
Exercise Price 11 Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 14.98 | ||
Options outstanding, ending | 3,300 | ||
Options outstanding, weighted average remaining contractual life | 8 years 7 months 6 days | ||
Options exercisable, weighted average exercise price | $ 14.98 | ||
Options outstanding, intrinsic value | $ 7,029 | ||
Exercise Price 12 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 15.99 | ||
Options outstanding, ending | 10,000 | ||
Options outstanding, weighted average remaining contractual life | 9 years 3 months 18 days | ||
Options exercisable, weighted average exercise price | $ 15.99 | ||
Options outstanding, intrinsic value | $ 11,200 |
EMPLOYEE STOCK OWNERSHIP PLAN83
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2016USD ($)Hours of serviceAgeshares | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
ESOP Award, Tranche One [Member] | |||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||
Vesting rights by percent | 0.00% | ||
ESOP Award, Tranche Two [Member] | |||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||
Vesting rights by percent | 25.00% | ||
ESOP Award, Tranche Three [Member] | |||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||
Vesting rights by percent | 50.00% | ||
ESOP Award, Tranche Four [Member] | |||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||
Vesting rights by percent | 75.00% | ||
ESOP Award, Tranche Five [Member] | |||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||
Vesting rights by percent | 100.00% | ||
Employee Stock Ownership Plan (ESOP), Plan [Member] | |||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||
Stock-based compensation expense | $ | $ 345,000 | $ 315,000 | $ 280,000 |
Number of common shares the plan currently owns | shares | 335,604 | ||
Minimum age requirement | Age | 21 | ||
Hours of service | Hours of service | 1,000 |
DIVIDENDS (Details Narrative)
DIVIDENDS (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Dividends [Abstract] | |||
Dividends paid to parent by subsidiaries | $ 2,340,000 | $ 2,475,000 | $ 2,865,000 |
INCOME PER COMMON SHARE (Detail
INCOME PER COMMON SHARE (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Numerator: | |||||||||||
Net Income | $ 1,312,879 | $ 1,426,338 | $ 1,312,110 | $ 1,195,736 | $ 1,226,971 | $ 1,198,919 | $ 1,253,438 | $ 1,204,960 | $ 5,247,063 | $ 4,884,288 | $ 4,398,820 |
Denominator: | |||||||||||
Weighted average shares outstanding | 4,935,349 | 4,912,499 | 4,907,208 | ||||||||
Effect of dilutive shares | 118,765 | 154,586 | 125,003 | ||||||||
Weighted average shares outstanding-diluted | 5,054,114 | 5,067,085 | 5,032,211 | ||||||||
Earnings per share | |||||||||||
Earnings per share - basic | $ 0.27 | $ 0.28 | $ 0.27 | $ 0.24 | $ 0.25 | $ 0.24 | $ 0.26 | $ 0.25 | $ 1.06 | $ 0.99 | $ 0.90 |
Earnings per share - diluted | $ 0.26 | $ 0.28 | $ 0.26 | $ 0.24 | $ 0.24 | $ 0.24 | $ 0.25 | $ 0.22 | $ 1.04 | $ 0.96 | $ 0.87 |
REGULATORY CAPITAL REQUIREMEN86
REGULATORY CAPITAL REQUIREMENTS (Details Narrative) | Dec. 31, 2016 | Dec. 31, 2015 |
Regulatory Capital Requirements [Abstract] | ||
Common equity tier 1 capital conservation buffer (risk-weighted assets) | 0.625% | 2.50% |
REGULATORY CAPITAL REQUIREMEN87
REGULATORY CAPITAL REQUIREMENTS (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Total Capital to risk-weighted assets: | ||
Total Capital | $ 44,850,000 | $ 41,497,000 |
Total Capital (to risk-weighted assets) ratio | 15.46% | 15.54% |
Minimum amount of capital for adequacy purposes | $ 23,213,000 | $ 21,359,000 |
Minimum amount of capital for adequacy purposes, ratio | 8.00% | 8.00% |
Tier 1 capital to risk-weighted assets: | ||
Tier 1 Capital | $ 41,220,000 | $ 38,159,000 |
Tier 1 Capital (to risk-weighted assets) ratio | 14.21% | 14.29% |
Minimum amount of Tier 1 Capital for adequacy purposes | $ 17,410,000 | $ 16,019,000 |
Minimum amount of Tier 1 Capital for adequacy purposes, ratio | 6.00% | 6.00% |
Tier 1 capital to average assets: | ||
Tier 1 Capital | $ 41,220,000 | $ 38,159,000 |
Tier 1 Capital (to average assets) ratio | 9.85% | 9.63% |
Minimum amount of Tier 1 Capital for adequacy purposes | $ 16,738,000 | $ 15,850,000 |
Minimum amount of Tier 1 Capital for adequacy purposes, ratio | 4.00% | 4.00% |
Common equity Tier 1 capital: | ||
Tier 1 Capital | $ 41,220,000 | $ 38,159,000 |
Tier 1 Capital (to tangible assets) ratio | 14.21% | 14.29% |
Tier 1 Capital for adequacy purposes | $ 13,058,000 | $ 12,014,000 |
Tier 1 Capital for adequacy purposes, ratio | 4.50% | 4.50% |
Bank [Member] | ||
Total Capital to risk-weighted assets: | ||
Total Capital | $ 44,544,000 | $ 41,169,000 |
Total Capital (to risk-weighted assets) ratio | 15.36% | 15.42% |
Minimum amount of capital for adequacy purposes | $ 23,207,000 | $ 21,357,000 |
Minimum amount of capital for adequacy purposes, ratio | 8.00% | 8.00% |
Minimum Capital required to be well-capitalized | $ 29,009,000 | $ 26,696,000 |
Minimum Capital required to be well-capitalized, ratio | 10.00% | 10.00% |
Tier 1 capital to risk-weighted assets: | ||
Tier 1 Capital | $ 40,915,000 | $ 37,831,000 |
Tier 1 Capital (to risk-weighted assets) ratio | 14.10% | 14.17% |
Minimum amount of Tier 1 Capital for adequacy purposes | $ 17,405,000 | $ 16,018,000 |
Minimum amount of Tier 1 Capital for adequacy purposes, ratio | 6.00% | 6.00% |
Minimum Tier 1 Capital required to be well-capitalized | $ 23,207,000 | $ 21,357,000 |
Minimum Tier 1 Capital required to be well-capitalized, ratio | 8.00% | 8.00% |
Tier 1 capital to average assets: | ||
Tier 1 Capital | $ 40,915,000 | $ 37,831,000 |
Tier 1 Capital (to average assets) ratio | 9.78% | 9.55% |
Minimum amount of Tier 1 Capital for adequacy purposes | $ 16,735,000 | $ 15,843,000 |
Minimum amount of Tier 1 Capital for adequacy purposes, ratio | 4.00% | 4.00% |
Minimum Tier 1 Capital required to be well-capitalized | $ 20,919,000 | $ 19,803,000 |
Minimum Tier 1 Capital required to be well-capitalized, ratio | 5.00% | 5.00% |
Common equity Tier 1 capital: | ||
Tier 1 Capital | $ 40,915,000 | $ 37,831,000 |
Tier 1 Capital (to tangible assets) ratio | 14.10% | 14.17% |
Tier 1 Capital for adequacy purposes | $ 13,054,000 | $ 12,013,000 |
Tier 1 Capital for adequacy purposes, ratio | 4.50% | 4.50% |
Tier 1 Capital required to be well-capitalized | $ 18,856,000 | $ 17,353,000 |
Tier 1 Capital required to be well-capitalized, ratio | 6.50% | 6.50% |
DISCLOSURES REGARDING FAIR VA88
DISCLOSURES REGARDING FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Investments available for sale | $ 119,978,944 | $ 119,997,585 |
Quoted Prices in Active Markets (Level 1) [Member] | ||
Investments available for sale | 23,939,063 | 34,633,673 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Investments available for sale | 82,062,024 | 80,146,234 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Investments available for sale | 13,977,857 | 5,217,678 |
U.S. Treasury Notes [Member] | ||
Investments available for sale | 23,939,063 | 34,633,673 |
Government-Sponsored Enterprises [Member] | ||
Investments available for sale | 51,034,091 | 51,284,332 |
Municipal Securties [Member] | ||
Investments available for sale | 45,005,790 | 34,079,580 |
Recurring Basis [Member] | ||
Total fair value | 119,978,944 | 119,997,585 |
Recurring Basis [Member] | Quoted Prices in Active Markets (Level 1) [Member] | ||
Total fair value | 23,939,063 | 34,633,673 |
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Total fair value | 82,062,024 | 80,146,234 |
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Total fair value | 13,977,857 | 5,217,678 |
Recurring Basis [Member] | U.S. Treasury Notes [Member] | ||
Investments available for sale | 23,939,063 | 34,633,673 |
Recurring Basis [Member] | U.S. Treasury Notes [Member] | Quoted Prices in Active Markets (Level 1) [Member] | ||
Investments available for sale | 23,939,063 | 34,633,673 |
Recurring Basis [Member] | Government-Sponsored Enterprises [Member] | ||
Investments available for sale | 51,034,091 | 51,284,332 |
Recurring Basis [Member] | Government-Sponsored Enterprises [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Investments available for sale | 51,034,091 | 51,284,332 |
Recurring Basis [Member] | Municipal Securties [Member] | ||
Investments available for sale | 45,005,790 | 34,079,580 |
Recurring Basis [Member] | Municipal Securties [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Investments available for sale | 31,027,933 | 28,861,902 |
Recurring Basis [Member] | Municipal Securties [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Investments available for sale | $ 13,977,857 | $ 5,217,678 |
DISCLOSURES REGARDING FAIR VA89
DISCLOSURES REGARDING FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 1) - Significant Unobservable Inputs (Level 3) [Member] - Municipal Securties [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Beginning Balance | $ 5,217,678 | $ 1,377,089 |
Included in other comprehensive income | (818,821) | (34,411) |
Purchases, issuances and settlements, net of maturities | 9,579,000 | 3,875,000 |
Ending balance | $ 13,977,857 | $ 5,217,678 |
DISCLOSURES REGARDING FAIR VA90
DISCLOSURES REGARDING FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 2) - Nonrecurring Basis [Member] - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Impaired loans fair value | $ 4,143,772 | $ 5,459,200 |
Other real estate owned fair value | 521,943 | 620,394 |
Loans held for sale fair value | 4,386,210 | 5,820,239 |
Total fair value | 9,051,925 | 11,899,833 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Loans held for sale fair value | 4,386,210 | 5,820,239 |
Total fair value | 4,386,210 | 5,820,239 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Impaired loans fair value | 4,143,772 | 5,459,200 |
Other real estate owned fair value | 521,943 | 620,394 |
Total fair value | $ 4,665,715 | $ 6,079,594 |
DISCLOSURES REGARDING FAIR VA91
DISCLOSURES REGARDING FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 3) | 12 Months Ended |
Dec. 31, 2016 | |
Other Real Estate Owned [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Valuation technique | Appraisal Value/ Comparison Sales/Other Estimates |
Unobservable Input | Appraisals and/or Sales of Comparable Properties |
Description of general range of inputs | Appraisals Discounted 10% to 20% for Sales Commissions and Other Holding Costs |
Other Real Estate Owned [Member] | Collateral Discounts [Member] | Maximum [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Discount rate (in percent) | 20.00% |
Other Real Estate Owned [Member] | Appraisals and/or Sales [Member] | Lower Range [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Discount rate (in percent) | 10.00% |
Impaired Loans [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Valuation technique | Discounted Appraisals |
Unobservable Input | Collateral Discounts |
Description of general range of inputs | 0 35% |
Impaired Loans [Member] | Collateral Discounts [Member] | Lower Range [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Discount rate (in percent) | 0.00% |
Impaired Loans [Member] | Collateral Discounts [Member] | Maximum [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Discount rate (in percent) | 35.00% |
DISCLOSURES REGARDING FAIR VA92
DISCLOSURES REGARDING FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 4) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Financial Assets: | ||
Investments available for sale | $ 119,978,944 | $ 119,997,585 |
Quoted Prices in Active Markets (Level 1) [Member] | ||
Financial Assets: | ||
Cash and due from banks | 8,141,030 | 5,295,924 |
Interest-bearing deposits in other banks | 18,101,300 | 23,898,862 |
Investments available for sale | 23,939,063 | 34,633,673 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Financial Assets: | ||
Investments available for sale | 82,062,024 | 80,146,234 |
Mortgage loans to be sold | 4,386,210 | 5,820,239 |
Accrued interest receivable | 1,614,002 | 1,284,063 |
Financial Liabilities: | ||
Demand Deposits | 328,681,594 | 303,950,800 |
Time Deposits | 43,856,383 | 54,780,915 |
Accrued interest payable | 51,629 | 73,421 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Financial Assets: | ||
Investments available for sale | 13,977,857 | 5,217,678 |
Loans | 260,406,669 | 242,581,154 |
Carrying Amount [Member] | ||
Financial Assets: | ||
Cash and due from banks | 8,141,030 | 5,295,924 |
Interest-bearing deposits in other banks | 18,101,300 | 23,898,862 |
Investments available for sale | 119,978,944 | 119,997,585 |
Mortgage loans to be sold | 4,386,210 | 5,820,239 |
Loans | 260,576,115 | 242,622,705 |
Accrued interest receivable | 1,614,002 | 1,284,063 |
Financial Liabilities: | ||
Demand Deposits | 328,681,594 | 303,950,800 |
Time Deposits | 43,841,257 | 54,767,812 |
Accrued interest payable | 51,629 | 73,421 |
Estimated Fair Value [Member] | ||
Financial Assets: | ||
Cash and due from banks | 8,141,030 | 5,295,924 |
Interest-bearing deposits in other banks | 18,101,300 | 23,898,862 |
Investments available for sale | 119,978,944 | 119,997,585 |
Mortgage loans to be sold | 4,386,210 | 5,820,239 |
Loans | 260,406,669 | 242,581,154 |
Accrued interest receivable | 1,614,002 | 1,284,063 |
Financial Liabilities: | ||
Demand Deposits | 328,681,594 | 303,950,800 |
Time Deposits | 43,856,383 | 54,780,915 |
Accrued interest payable | $ 51,629 | $ 73,421 |
ACCUMULATED OTHER COMPREHENSI93
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Equity [Abstract] | |||
Available for sale securities, beginning | $ 992,549 | $ 1,243,022 | $ 955,900 |
Change in net unrealized gains (losses) on securities available for sale | (2,158,236) | 26,255 | 768,326 |
Reclassification adjustment for net securities gains included in net income | (380,904) | (423,832) | (312,577) |
Income tax expense (benefit) | 939,482 | 147,104 | (168,627) |
Available for sale securities, ending | $ (607,109) | $ 992,549 | $ 1,243,022 |
ACCUMULATED OTHER COMPREHENSI94
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Gain on sale of investments, net | $ 380,904 | $ 423,832 | $ 312,577 | ||||||||
Income tax expense | $ (203,444) | $ (399,656) | $ (518,262) | $ (567,071) | $ (576,474) | $ (551,319) | $ (596,680) | $ (562,775) | (1,688,433) | (2,287,248) | (1,997,866) |
Reclassification out of Accumulated Other Comprehensive Income [Member] | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Gain on sale of investments, net | 380,904 | 423,832 | 312,577 | ||||||||
Income tax expense | (140,934) | ||||||||||
Total reclassification, net of tax | $ 239,970 | $ 423,832 | $ 312,577 |
BANK OF SOUTH CAROLINA CORPOR95
BANK OF SOUTH CAROLINA CORPORATION - PARENT COMPANY (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Assets: | ||||
Other assets | $ 2,185,085 | $ 761,339 | ||
Total assets | 413,949,636 | 399,172,512 | ||
Liabilities and Shareholders' Equity: | ||||
Shareholders' equity | 40,612,974 | 39,151,712 | $ 36,759,982 | $ 34,739,143 |
Total liabilities and shareholders' equity | 413,949,636 | 399,172,512 | ||
Bank of South Carolina Corporation - Parent [Member] | ||||
Assets: | ||||
Cash | 922,595 | 946,996 | $ 648,194 | $ 675,367 |
Investment in wholly-owned subsidiary | 40,308,166 | 38,823,720 | ||
Other assets | 76,077 | 20,154 | ||
Total assets | 41,306,838 | 39,790,870 | ||
Liabilities and Shareholders' Equity: | ||||
Other liabilities | 693,864 | 639,158 | ||
Shareholders' equity | 40,612,974 | 39,151,712 | ||
Total liabilities and shareholders' equity | $ 41,306,838 | $ 39,790,870 |
BANK OF SOUTH CAROLINA CORPOR96
BANK OF SOUTH CAROLINA CORPORATION - PARENT COMPANY (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Condensed Statements of Operations | |||||||||||
Interest Income | $ 3,767,574 | $ 3,933,676 | $ 3,677,681 | $ 3,537,926 | $ 3,526,896 | $ 3,468,442 | $ 3,451,084 | $ 3,381,131 | $ 14,916,857 | $ 13,827,553 | $ 13,009,307 |
Net income | $ 1,312,879 | $ 1,426,338 | $ 1,312,110 | $ 1,195,736 | $ 1,226,971 | $ 1,198,919 | $ 1,253,438 | $ 1,204,960 | 5,247,063 | 4,884,288 | 4,398,820 |
Bank of South Carolina Corporation - Parent [Member] | |||||||||||
Condensed Statements of Operations | |||||||||||
Interest Income | 571 | 302 | 306 | ||||||||
Net operating expenses | (177,612) | (195,636) | (187,284) | ||||||||
Dividends received from bank | 2,340,000 | 2,475,000 | 2,865,000 | ||||||||
Equity in undistributed earnings of subsidiary | 3,084,104 | 2,604,622 | 1,720,798 | ||||||||
Net income | $ 5,247,063 | $ 4,884,288 | $ 4,398,820 |
BANK OF SOUTH CAROLINA CORPOR97
BANK OF SOUTH CAROLINA CORPORATION - PARENT COMPANY (Details 2) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||||||||||
Net income | $ 1,312,879 | $ 1,426,338 | $ 1,312,110 | $ 1,195,736 | $ 1,226,971 | $ 1,198,919 | $ 1,253,438 | $ 1,204,960 | $ 5,247,063 | $ 4,884,288 | $ 4,398,820 |
Stock-based compensation expense | 76,529 | 78,987 | 74,908 | ||||||||
Net cash provided by operating activities | 6,042,824 | 7,115,612 | 2,172,903 | ||||||||
Cash flows from financing activities: | |||||||||||
Dividends paid | (2,613,715) | (2,380,062) | (2,765,735) | ||||||||
Cash paid for fractional shares | (4,778) | ||||||||||
Stock options exercised | 405,749 | 122,946 | 26,050 | ||||||||
Net cash used by financing activities | 11,596,273 | 27,057,010 | 21,417,368 | ||||||||
Supplemental disclosure for non-cash investing and financing activity: | |||||||||||
Change in dividends payable | 54,706 | 59,178 | 325 | ||||||||
Bank of South Carolina Corporation - Parent [Member] | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | 5,247,063 | 4,884,288 | 4,398,820 | ||||||||
Stock-based compensation expense | 76,529 | 78,987 | 74,908 | ||||||||
Equity in undistributed earnings of subsidiary | (3,084,104) | (2,604,622) | (1,720,798) | ||||||||
Decrease (increase) in other assets | (55,923) | 202,043 | (40,092) | ||||||||
Net cash provided by operating activities | 2,183,565 | 2,560,696 | 2,712,838 | ||||||||
Cash flows from financing activities: | |||||||||||
Dividends paid | (2,613,715) | (2,380,062) | (2,766,061) | ||||||||
Cash paid for fractional shares | (4,778) | ||||||||||
Stock options exercised | 405,749 | 122,946 | 26,050 | ||||||||
Net cash used by financing activities | (2,207,966) | (2,261,894) | (2,740,011) | ||||||||
Net increase (decrease) in cash | (24,401) | 298,802 | (27,173) | ||||||||
Cash at beginning of year | $ 946,996 | $ 648,194 | 946,996 | 648,194 | 675,367 | ||||||
Cash at ending of year | $ 922,595 | $ 946,996 | 922,595 | 946,996 | 648,194 | ||||||
Supplemental disclosure for non-cash investing and financing activity: | |||||||||||
Change in dividends payable | $ 54,706 | $ 59,178 | $ 325 |
QUARTERLY RESULTS OF OPERATIO98
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total interest and fee income | $ 3,862,720 | $ 4,030,143 | $ 3,770,669 | $ 3,632,065 | $ 3,635,011 | $ 3,569,672 | $ 3,550,663 | $ 3,474,602 | $ 15,295,597 | $ 14,229,948 | $ 13,418,254 |
Total interest expense | 95,146 | 96,467 | 92,988 | 94,139 | 108,115 | 101,230 | 99,579 | 93,471 | 378,740 | 402,395 | 408,947 |
Net interest income | 3,767,574 | 3,933,676 | 3,677,681 | 3,537,926 | 3,526,896 | 3,468,442 | 3,451,084 | 3,381,131 | 14,916,857 | 13,827,553 | 13,009,307 |
Provision for loan losses | 175,000 | 210,000 | 140,000 | 45,000 | 110,000 | 7,500 | 70,000 | 5,000 | 570,000 | 192,500 | 82,500 |
Net interest income after provisions for loan losses | 3,592,574 | 3,723,676 | 3,537,681 | 3,492,926 | 3,416,896 | 3,460,942 | 3,381,084 | 3,376,131 | 14,346,857 | 13,635,053 | 12,926,807 |
Other income | 638,896 | 686,586 | 729,572 | 806,029 | 788,770 | 662,038 | 868,492 | 730,658 | 2,861,083 | 3,049,958 | 2,578,701 |
Other expense | 2,715,147 | 2,584,268 | 2,436,881 | 2,536,148 | 2,402,221 | 2,372,742 | 2,399,458 | 2,339,054 | 10,272,444 | 9,513,475 | 9,108,822 |
Income before income tax expense | 1,516,323 | 1,825,994 | 1,830,372 | 1,762,807 | 1,803,445 | 1,750,238 | 1,850,118 | 1,767,737 | 6,935,496 | 7,171,536 | 6,396,686 |
Income tax expense | 203,444 | 399,656 | 518,262 | 567,071 | 576,474 | 551,319 | 596,680 | 562,775 | 1,688,433 | 2,287,248 | 1,997,866 |
Net income | $ 1,312,879 | $ 1,426,338 | $ 1,312,110 | $ 1,195,736 | $ 1,226,971 | $ 1,198,919 | $ 1,253,438 | $ 1,204,960 | $ 5,247,063 | $ 4,884,288 | $ 4,398,820 |
Basic income per common share | $ 0.27 | $ 0.28 | $ 0.27 | $ 0.24 | $ 0.25 | $ 0.24 | $ 0.26 | $ 0.25 | $ 1.06 | $ 0.99 | $ 0.90 |
Diluted income per common share | $ 0.26 | $ 0.28 | $ 0.26 | $ 0.24 | $ 0.24 | $ 0.24 | $ 0.25 | $ 0.22 | $ 1.04 | $ 0.96 | $ 0.87 |