Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 13, 2019 | Jun. 30, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | STEWARDSHIP FINANCIAL CORP | ||
Entity Central Index Key | 0001023860 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity Shell Company | false | ||
Entity a Voluntary Filer | No | ||
Entity Reporting Status Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Public Float | $ 90,707 | ||
Entity Common Stock, Shares Outstanding | 8,684,456 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and due from banks | $ 16,340 | $ 20,558 |
Other short-term interest-earning assets | 483 | 712 |
Cash and cash equivalents | 16,823 | 21,270 |
Securities available-for-sale | 108,811 | 109,259 |
Securities held-to-maturity; estimated fair value of $60,997 (2018) and $51,551 (2017) | 62,308 | 52,442 |
Other equity investments, at fair value (2018) and available-for-sale (2017) | 1,648 | |
Other equity investments, at fair value (2018) and available-for-sale (2017) | 3,756 | |
Federal Home Loan Bank of New York stock, at cost | 3,965 | 3,715 |
Loans held for sale | 0 | 370 |
Loans, net of allowance for loan losses of $7,926 (2018) and $8,762 (2017) | 725,404 | 702,561 |
Premises and equipment, net | 7,007 | 6,909 |
Accrued interest receivable | 2,696 | 2,566 |
Bank owned life insurance | 21,636 | 21,084 |
Other assets | 5,332 | 4,834 |
Total assets | 955,630 | 928,766 |
Deposits: | ||
Noninterest-bearing | 174,717 | 172,861 |
Interest-bearing | 607,374 | 591,238 |
Total deposits | 782,091 | 764,099 |
Federal Home Loan Bank of New York advances | 65,700 | 63,760 |
Subordinated Debentures and Subordinated Notes | 23,382 | 23,317 |
Accrued interest payable | 1,106 | 1,116 |
Accrued expenses and other liabilities | 3,201 | 2,809 |
Total liabilities | 875,480 | 855,101 |
Shareholders' equity | ||
Common stock, no par value; 20,000,000 and 20,000,000 shares authorized; 8,680,388 and 8,652,804 shares issued and outstanding at December 31, 2018, and 2017, respectively | 61,030 | 60,742 |
Retained earnings | 21,056 | 14,307 |
Accumulated other comprehensive loss, net | (1,936) | (1,384) |
Total Shareholders' equity | 80,150 | 73,665 |
Total liabilities and Shareholders' equity | $ 955,630 | $ 928,766 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Securities held to maturity | $ 60,997 | $ 51,551 |
Allowance for loan losses | $ 7,926 | $ 8,762 |
Shareholders' equity | ||
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 8,680,388 | 8,652,804 |
Common stock, shares outstanding (in shares) | 8,680,388 | 8,652,804 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Interest income: | ||
Loans | $ 31,514,000 | $ 28,385,000 |
Securities held-to-maturity: | ||
Taxable | 1,247,000 | 990,000 |
Nontaxable | 98,000 | 197,000 |
Securities available-for-sale: | ||
Taxable | 2,618,000 | 2,196,000 |
Nontaxable | 57,000 | 57,000 |
Other equity investments | 99,000 | 96,000 |
FHLB dividends | 228,000 | 203,000 |
Other interest-earning assets | 138,000 | 106,000 |
Total interest income | 35,999,000 | 32,230,000 |
Interest expense: | ||
Deposits | 5,293,000 | 3,189,000 |
FHLB-NY borrowings | 968,000 | 1,177,000 |
Subordinated Debentures and Subordinated Notes | 1,575,000 | 1,492,000 |
Total interest expense | 7,836,000 | 5,858,000 |
Net interest income before provision for loan losses | 28,163,000 | 26,372,000 |
Provision for loan losses | (1,615,000) | 655,000 |
Net interest income after provision for loan losses | 29,778,000 | 25,717,000 |
Noninterest income: | ||
Fees and service charges | 2,228,000 | 2,111,000 |
Bank owned life insurance | 552,000 | 526,000 |
Gain (loss) on calls and sales of securities, net | (186,000) | 1,000 |
Gain on sales of mortgage loans | 70,000 | 178,000 |
Gain on sale of other real estate owned | 0 | 13,000 |
Gain on sales of SBA loans | 193,000 | 0 |
Gain on equity investments | 80,000 | 0 |
Miscellaneous | 480,000 | 478,000 |
Total noninterest income | 3,417,000 | 3,307,000 |
Noninterest expenses: | ||
Salaries and employee benefits | 12,636,000 | 11,455,000 |
Occupancy, net | 1,701,000 | 1,630,000 |
Equipment | 746,000 | 673,000 |
Data processing | 1,947,000 | 1,811,000 |
Advertising | 715,000 | 700,000 |
FDIC insurance premium | 277,000 | 322,000 |
Charitable contributions | 910,000 | 615,000 |
Bank-card related services | 533,000 | 551,000 |
Other real estate owned, net | 0 | 24,000 |
Miscellaneous | 2,680,000 | 2,520,000 |
Total noninterest expenses | 22,145,000 | 20,301,000 |
Income before income tax expense | 11,050,000 | 8,723,000 |
Income tax expense | 3,020,000 | 4,776,000 |
Net income | $ 8,030,000 | $ 3,947,000 |
Basic and diluted earnings per common share (in usd per share) | $ 0.93 | $ 0.50 |
Weighted average number of basic and diluted common shares outstanding (in shares) | 8,672,840 | 7,906,791 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
Net income | $ 8,030 | $ 3,947 |
Other comprehensive income (loss), net of tax: | ||
Change in unrealized holding gains (losses) on securities available-for-sale during the period | (677) | 150 |
Reclassification adjustment for securities available for sale (gains) losses in net income | (4) | (1) |
Accretion of unrealized loss on securities reclassified to held-to-maturity | 22 | 28 |
Change in fair value of interest rate swap in a cash flow hedging relationship | (88) | |
Change in fair value of interest rate swap in a cash flow hedging relationship | (19) | |
Reclassification adjustment for interest rate swap interest expense in net income | 32 | |
Reclassification adjustment for interest rate swap interest expense in net income | 2 | |
Total other comprehensive income (loss) | (715) | 160 |
Total comprehensive income | $ 7,315 | $ 4,107 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss), Net |
Balance beginning at Dec. 31, 2016 | $ 51,387 | $ 41,626 | $ 11,082 | $ (1,321) |
Balance beginning, shares at Dec. 31, 2016 | 6,121,329 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock, net of costs | 18,860 | $ 18,860 | ||
Issuance of common stock, net of costs, shares | 2,509,090 | |||
Cash dividends declared | (961) | (961) | ||
Payment of discount on dividend reinvestment plan | (5) | $ (5) | ||
Common stock issued under dividend reinvestment plan | 90 | $ 90 | ||
Common stock issued under dividend reinvestment plan, shares | 10,031 | |||
Common stock issued under stock plans | 77 | $ 77 | ||
Common stock issued under stock plans, shares | 8,025 | |||
Issuance of restricted stock | 0 | $ 185 | (185) | |
Issuance of restricted stock, shares | 20,876 | |||
Compensation expense and amortization of restricted stock | 184 | |||
Tax benefit from restricted stock vesting | 48 | $ 48 | ||
Restricted stock forfeited | (122) | $ (139) | 17 | |
Restricted stock forfeited, shares | (16,547) | |||
Net income | 3,947 | 3,947 | ||
Other comprehensive (loss) | 160 | 160 | ||
Reclassification due to the adoption of ASU 2018-02 | (223) | 223 | (223) | |
Balance ending at Dec. 31, 2017 | $ 73,665 | $ 60,742 | 14,307 | (1,384) |
Balance ending, shares at Dec. 31, 2017 | 8,652,804 | 8,652,804 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Reclassification due to the adoption of ASU 2016-01 | (163) | 163 | ||
Cash dividends declared | $ (1,040) | (1,040) | ||
Payment of discount on dividend reinvestment plan | (4) | $ (4) | ||
Common stock issued under dividend reinvestment plan | 87 | $ 87 | ||
Common stock issued under dividend reinvestment plan, shares | 8,386 | |||
Common stock issued under stock plans | 30 | $ 30 | ||
Common stock issued under stock plans, shares | 2,943 | |||
Issuance of restricted stock | 0 | $ 301 | (301) | |
Issuance of restricted stock, shares | 28,221 | |||
Compensation expense and amortization of restricted stock | 206 | 206 | ||
Restricted stock forfeited | (109) | $ (126) | 17 | |
Restricted stock forfeited, shares | (11,966) | |||
Net income | 8,030 | 8,030 | ||
Other comprehensive (loss) | (715) | (715) | ||
Balance ending at Dec. 31, 2018 | $ 80,150 | $ 61,030 | $ 21,056 | $ (1,936) |
Balance ending, shares at Dec. 31, 2018 | 8,680,388 | 8,680,388 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Reclassification due to the adoption of ASU 2016-01 | $ 163 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends declared on common stock (in usd per share) | $ 0.12 | $ 0.12 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 8,030,000 | $ 3,947,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of premises and equipment | 475,000 | 399,000 |
Amortization of premiums and accretion of discounts, net | 465,000 | 533,000 |
Compensation expense on restricted stock, net of forfeitures | 201,000 | 62,000 |
Amortization of Subordinated Notes issuance cost | 65,000 | 65,000 |
Accretion of deferred loan fees | 147,000 | 145,000 |
Fair value adjustment for equity securities | (80,000) | 0 |
Provision for loan losses | (1,615,000) | 655,000 |
Originations of mortgage loans held for sale | (4,666,000) | (10,316,000) |
Proceeds from sale of mortgage loans | 5,106,000 | 10,897,000 |
Gain on sale of SBA loans | (193,000) | 0 |
Gain on sales of mortgage loans | (70,000) | (178,000) |
(Gain) loss on sales and calls of securities | 186,000 | (1,000) |
Gain on sale of other real estate owned | 0 | (13,000) |
Deferred income tax expense | (3,000) | 1,419,000 |
Excess tax benefit from restricted stock vesting | 0 | 48,000 |
Increase in accrued interest receivable | (130,000) | (433,000) |
Increase (decrease) in accrued interest payable | (10,000) | 322,000 |
Earnings on bank owned life insurance | (552,000) | (526,000) |
Increase (decrease) in other assets | (155,000) | 686,000 |
Increase in other liabilities | 335,000 | 819,000 |
Net cash provided by operating activities | 7,536,000 | 8,530,000 |
Cash flows from investing activities: | ||
Purchase of securities available-for-sale | (17,160,000) | (29,201,000) |
Proceeds from maturities and principal repayments on securities available-for-sale | 15,212,000 | 14,096,000 |
Proceeds from sales and calls on securities available-for-sale | 1,007,000 | 500,000 |
Purchase of securities held-to-maturity | (15,828,000) | (8,173,000) |
Proceeds from maturities and principal repayments on securities held-to-maturity | 5,614,000 | 6,665,000 |
Proceeds from calls on securities held-to-maturity | 280,000 | 1,320,000 |
Purchase of equity securities | (41,000) | 0 |
Proceeds from sales of equity securities | 2,037,000 | 0 |
Purchase of FHLB-NY stock | (6,671,000) | (11,650,000) |
Redemption of FHLB-NY stock | 6,421,000 | 11,450,000 |
Net increase in loans | (21,182,000) | (107,409,000) |
Proceeds from sale of other real estate owned | 0 | 414,000 |
Purchase of bank owned life insurance | 0 | (4,000,000) |
Additions to premises and equipment | (573,000) | (742,000) |
Net cash used in investing activities | (30,884,000) | (126,730,000) |
Cash flows from financing activities: | ||
Net increase in noninterest-bearing deposits | 1,856,000 | 3,555,000 |
Net increase in interest-bearing deposits | 16,136,000 | 101,614,000 |
Increase in long term borrowings | 10,000,000 | 25,000,000 |
Repayment of long term borrowings | (20,760,000) | (15,000,000) |
Net increase (decrease) in short term borrowings | 12,700,000 | (5,440,000) |
Proceeds from issuance of common stock, net of costs | 0 | 18,860,000 |
Cash dividends paid on common stock | (1,040,000) | (961,000) |
Payment of discount on dividend reinvestment plan | (4,000) | (5,000) |
Taxes paid related to net share settlement of restricted stock | (104,000) | 0 |
Issuance of common stock | 117,000 | 167,000 |
Net cash provided by financing activities | 18,901,000 | 127,790,000 |
Net increase (decrease) in cash and cash equivalents | (4,447,000) | 9,590,000 |
Cash and cash equivalents - beginning | 21,270,000 | 11,680,000 |
Cash and cash equivalents - ending | 16,823,000 | 21,270,000 |
Supplemental disclosures of cash flow information: | ||
Cash paid during the year for interest | 7,846,000 | 5,536,000 |
Cash paid during the year for income taxes | $ 3,928,000 | $ 2,322,000 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Nature of operations and principles of consolidation The consolidated financial statements include the accounts of Stewardship Financial Corporation and its wholly owned subsidiary, Atlantic Stewardship Bank (“the Bank”), together referred to as “the Corporation”. The Bank includes its wholly-owned subsidiaries, Stewardship Investment Corporation (whose primary business is to own and manage an investment portfolio), Stewardship Realty LLC (whose primary business is to own and manage property at 612 Godwin Avenue, Midland Park, New Jersey), Atlantic Stewardship Insurance Company, LLC (whose primary business is insurance) and several other subsidiaries formed to hold title to properties acquired through foreclosure or deed in lieu of foreclosure. The Bank’s subsidiaries have an insignificant impact on the daily operations. All intercompany accounts and transactions are eliminated in the consolidated financial statements. Certain prior period amounts have been reclassified to conform with the current year presentation. The Corporation provides financial services through the Bank’s offices in Bergen, Passaic, and Morris Counties, New Jersey. Its primary deposit products are checking, savings, and term certificate accounts, and its primary lending products are commercial, residential mortgage 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 generated from the operations of businesses. There are no significant concentrations of loans to any one industry or customer. The Corporation’s lending activities are concentrated in loans secured by real estate located in northern New Jersey and, therefore, collectability of the loan portfolio is susceptible to changes in real estate market conditions in the northern New Jersey market. The Corporation has not made loans to borrowers outside the United States. Basis of consolidated financial statements presentation The consolidated financial statements of the Corporation have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). In preparing the financial statements, management is required to make estimates and assumptions, based on available information, that affect the amounts reported in the financial statements and the disclosures provided. The estimate of the allowance for loan losses and the valuation of deferred tax assets are particularly critical because they involve a higher degree of complexity and subjectivity and require estimates and assumptions about highly uncertain matters. Actual results may differ from those estimates and assumptions. The current economic environment has increased the degree of uncertainty inherent in these material estimates. Cash flows Cash and cash equivalents include cash and deposits with other financial institutions and interest-bearing deposits in other banks with original maturities under 90 days. Net cash flows are reported for customer loan and deposit transactions, and short term borrowings and securities sold under agreement to repurchase. Securities available-for-sale and held-to-maturity The Corporation classifies its securities as held-to-maturity or available-for-sale. Investments in debt securities that the Corporation has the positive intent and ability to hold to maturity are classified as securities held-to-maturity and are carried at amortized cost. All other securities are classified as securities available-for-sale. Securities available-for-sale may be sold prior to maturity in response to changes in interest rates or prepayment risk, for asset/liability management purposes, or other similar factors. These securities are carried at fair value with unrealized holding gains or losses reported in a separate component of shareholders’ equity, net of the related tax effects. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments except for mortgage-backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: (1) OTTI related to credit loss, which must be recognized in the income statement and (2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. Other Equity Investments The Corporation carried other equity investments at fair value with unrealized holding gains or losses reported through the Consolidated Statement of Income beginning January 1, 2018 with the adoption of ASU No. 2016-01, "Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Liabilities. Prior to the adoption of ASU No. 2016-01, the unrealized holding gains or losses reported in a component of shareholders' equity, net of the related tax effects. Cash dividends are reported as income when declared. Federal Home Loan Bank (“FHLB”) Stock The Bank is a member of the FHLB system. Members are required to own a certain amount of FHLB stock based on their level of borrowings and other factors. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on the ultimate recovery of par value. Cash dividends are reported as income when declared. Loans held for sale Loans held for sale generally represent mortgage loans originated and intended for sale in the secondary market, which are carried at the lower of cost or fair value on an aggregate basis. Mortgage loans held for sale are carried net of deferred fees, which are recognized as income at the time the loans are sold to permanent investors. Gains or losses on the sale of mortgage loans held for sale are recognized at the settlement date and are determined by the difference between the net proceeds and the carrying value. All loans are generally sold with loan servicing rights released to the buyer. Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal amount outstanding, net of deferred loan fees and costs and an allowance for loan losses. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments. The recorded investment in loans represents the outstanding principal balance after charge-offs and does not include accrued interest receivable as the inclusion is not significant to the reported amounts. Interest income on loans is discontinued at the time the loan is 90 days delinquent unless the loan is well secured and in process of collection. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or are charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to an accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Allowance for loan losses The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the collectability of the full loan balance is in doubt. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off. The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired. In addition, the allowance contains an unallocated reserve amount to cover inherent imprecision of the overall loss estimation process. Due to the complexity in determining the estimated amount of allowance for loan losses, these unallocated reserves reflect management's attempt to ensure that the overall allowance reflects an appropriate level of reserves. A loan is considered impaired when, based on current information and events, it is probable that the Corporation will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Loans for which the terms have been modified and for which the borrower is experiencing financial difficulties are considered troubled debt restructuring and classified as impaired. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the fair value of the note, or the fair value of the collateral if the loan is collateral-dependent. Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans are collectively evaluated for impairment and, accordingly, they are not separately identified for impairment disclosures. Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the lower of the recorded investment or fair value of the collateral. For troubled debt restructurings that subsequently default, the Corporation determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses. The general component of the allowance is based on historical loss experience, including an appropriate loss emergence period, adjusted for qualitative factors. The historical loss experience is determined for each portfolio segment and class, and is based on the actual loss history experienced by the Corporation over the most recent five years. The Bank prepares an analysis for each portfolio segment, which examines the historical loss experience as well as the loss emergence period. The analysis is updated quarterly for the purpose of determining the assigned allocation factors which are essential components of the allowance for loan losses calculation. This actual loss experience is supplemented with other qualitative factors based on the risks present for each portfolio segment or class. These qualitative factors include consideration of the following: levels of and trends in charge-offs; levels of and trends in delinquencies and impaired loans; levels and trends in loan size; levels of real estate concentrations; national and local economic trends and conditions; the depth and experience of lending management and staff; and other changes in lending policies, procedures, and practices. For purposes of determining the allowance for loan losses, loans in the portfolio are segregated by type into the following segments: commercial, commercial real estate, construction, residential real estate, consumer and other. The Corporation also sub-divides these segments into classes based on the associated risks within those segments. Commercial loans are divided into the following two classes: secured by real estate and other. Construction loans are divided into the following two classes: commercial and residential. Consumer loans are divided into two classes: secured by real estate and other. The models and assumptions used to determine the allowance require management’s judgment. Assumptions, data and computations are appropriately reviewed and properly documented. The risk characteristics of each of the identified portfolio segments are as follows: Commercial – Commercial loans are generally of higher risk and typically are made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business. As a result, the availability of funds for the repayment of commercial loans may depend substantially on the success of the business itself. Furthermore, any collateral securing such loans may depreciate over time, may be difficult to appraise and may fluctuate in value. Commercial Real Estate – Commercial real estate loans are secured by multi-family and nonresidential real estate and generally have larger balances and generally are considered to involve a greater degree of risk than residential real estate loans. Commercial real estate loans depend on the global cash flow analysis of the borrower and the net operating income of the property, the borrower’s expertise, credit history and profitability, and the value of the underlying property. Of primary concern in commercial real estate lending is the borrower’s creditworthiness and the cash flow from the property. Payments on loans secured by income producing properties often depend on successful operation and management of the properties. As a result, repayment of such loans may be subject, to a greater extent than residential real estate loans, to adverse conditions in the real estate market or the economy. Commercial real estate is also subject to adverse market conditions that cause a decrease in market value or lease rates, obsolescence in location or function and market conditions associated with oversupply of units in a specific region. Construction – Construction financing is generally considered to involve a higher degree of risk of loss than long-term financing on improved, occupied real estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the property’s value at completion of construction and the estimated cost of construction. During the construction phase, a number of factors could result in delays and cost overruns. If the estimate of construction costs proves to be inaccurate, additional funds may be required to be advanced in excess of the amount originally committed to permit completion of the building. If the estimate of value proves to be inaccurate, the value of the building may be insufficient to assure full repayment if liquidation is required. If foreclosure is required on a building before or at completion due to a default, there can be no assurance that all of the unpaid balance of, and accrued interest on, the loan as well as related foreclosure and holding costs will be recovered. Residential Real Estate – Residential real estate loans are generally made on the basis of the borrower’s ability to make repayment from his or her employment income or other income, and which are secured by real property whose value tends to be more easily ascertainable. Repayment of residential real estate loans is subject to adverse employment conditions in the local economy leading to increased default rate and decreased market values from oversupply in a geographic area. In general, residential real estate loans depend on the borrower’s continuing financial stability and, therefore, are likely to be adversely affected by various factors, including job loss, divorce, illness or personal bankruptcy. Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans. Consumer loans – Consumer loans secured by real estate may entail greater risk than residential mortgage loans due to a lower lien position. In addition, other consumer loans, particularly loans secured by assets that depreciate rapidly, such as motor vehicles, are subject to greater risk. In all cases, collateral for a defaulted consumer loan may not provide an adequate source of repayment for the outstanding loan and a small remaining deficiency often does not warrant further substantial collection efforts against the borrower. Consumer loan collections depend on the borrower’s continuing financial stability and, therefore, are likely to be adversely affected by various factors, including job loss, divorce, illness or personal bankruptcy. Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans. Generally, when it is probable that some portion or all of a loan balance will not be collected, regardless of portfolio segment, that amount is charged-off as a loss against the allowance for loan losses. On loans secured by real estate, the charge-offs reflect partial writedowns due to the initial valuation of market values of the underlying real estate collateral in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 310-40. Consumer loans are generally charged-off in full when they reach 90 – 120 days past due. Transfers of Financial Assets Transfers of financial assets are accounted for as sales, when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Corporation, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Corporation does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Premises and equipment Land is stated at cost. Buildings and improvements and furniture, fixtures and equipment are stated at cost, less accumulated depreciation computed on the straight-line method over the estimated lives of each type of asset. Estimated useful lives are three to forty years for buildings and improvements and three to twenty-five years for furniture, fixtures and equipment. Leasehold improvements are stated at cost less accumulated amortization computed on the straight-line method over the shorter of the term of the lease or useful life. Long-Term Assets Premises and equipment and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recovered from future undiscounted cash flows. If impaired, the assets are recorded at fair value. Bank owned life insurance The Corporation has purchased life insurance policies on certain key officers. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. Dividend Reinvestment Plan The Corporation offers shareholders the opportunity to participate in a dividend reinvestment plan. Plan participants may reinvest cash dividends to purchase new shares of stock at 95% of the market value, based on the most recent trades. Cash dividends due to the plan participants are utilized to acquire shares from either, or a combination of, the issuance of authorized shares or purchases of shares in the open market through an approved broker. The Corporation reimburses the broker for the 5% discount when the purchase of the Corporation’s stock is completed. The plan is considered to be non-compensatory. Stock-based compensation Stock-based compensation cost is based on the fair value of the awards at the date of grant. The fair value of restricted stock awards is based upon the average of the high and low sale price reported for the Corporation’s common stock on the date of grant. Compensation cost is recognized for restricted stock over the required service period, generally defined as the vesting period. Restricted shares may be forfeited if the vesting requirements are not met. Forfeitures are recognized when they occur. Advertising Costs The Corporation expenses advertising costs as incurred. Income taxes The Corporation records income taxes in accordance with ASC 740, Income Taxes, as amended, using the asset and liability method. Accordingly, deferred tax assets and liabilities: (i) are recognized for the expected future tax consequences of events that have been recognized in the financial statements or tax returns; (ii) are attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases; and (iii) are measured using enacted tax rates expected to apply in the years when those temporary differences are expected to be recovered or settled. Where applicable, deferred tax assets are reduced by a valuation allowance for any portions determined not likely to be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period of enactment. The valuation allowance is adjusted, by a charge or credit to income tax expense, as changes in facts and circumstances warrant. Deferred tax assets and liabilities are reported as a component of other assets on the consolidated statements of financial condition. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Corporation recognizes interest and/or penalties related to income tax matters in income tax expense. Comprehensive income Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income includes unrealized gains and losses on securities available-for-sale, accretion of losses related to securities transferred from available-for-sale to held to maturity, and unrealized gains or losses on cash flow hedges, net of tax, which are also recognized as separate components of equity. Earnings per common share Basic earnings per common share is calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Common stock equivalents are not included in the calculation. Diluted earnings per share is computed similar to that of the basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potential dilutive common shares were issued. Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. Loss contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are such matters that will have a material effect on the financial statements. Dividend restriction Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to the Corporation or by the Corporation to its shareholders. The Corporation's ability to pay cash dividends is based, among other things, on its ability to receive cash from the Bank. Banking regulations limit the amount of dividends that may be paid without prior approval of regulatory agencies. Under these regulations, the amount of dividends that may be paid in any calendar year is limited to the current year's profits, combined with the retained net profits of the preceding two years. At December 31, 2018 the Bank could have paid dividends totaling approximately $13.8 million . At December 31, 2018 , this restriction did not result in any effective limitation in the manner in which the Corporation is currently operating. Derivatives Derivative financial instruments are recognized as assets or liabilities at fair value. The Corporation’s only free standing derivatives consist of interest rate swap agreements, which are used as part of its asset liability management strategy to help manage interest rate risk related to its deposits and Subordinated Debentures (see Note 8 to the Consolidated Financial Statements). The Corporation does not use derivatives for trading purposes. The Corporation designated the interest rate swaps as cash flow hedges, which is a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability. For a cash flow hedge, the change in the fair value on the derivative is reported in other comprehensive income (loss) and is reclassified into earnings in the same periods during which the hedged transaction affects earnings. Net cash settlements on these interest rate swaps that qualify for hedge accounting are recorded in interest expense. Changes in the fair value of derivatives that are not highly effective in hedging the changes in fair value or expected cash flows of the hedged items are recognized immediately in current earnings. The Corporation formally documented the risk-management objective and the strategy for undertaking the hedge transaction at the inception of the hedging relationship. The documentation includes linking the fair value of the cash flow hedge to the deposit or Subordinated Debentures on the balance sheet. The Corporation formally assessed, both at the hedge’s inception and on an ongoing basis, whether the interest rate swaps are highly effective in offsetting changes in cash flows of the deposits and Subordinated Debentures. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transactions are still expected to occur, gains or losses that would be accumulated in other comprehensive income are amortized into earnings over the same periods in which the hedged transactions will affect earnings. Fair value of financial instruments Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. Segment Reporting The Corporation acts as an independent community financial services provider and offers traditional banking and related financial services to individual, business and government customer. Through its branches, automated teller machine networks, and internet banking services, the Corporation offers a full array of commercial and retail financial service, including time, savings and demand deposits; the making of commercial, consumer and mortgage loans; and the providing of other financial services. Management does not separately allocate expense, including the cost of funding loan demand, between the commercial, retail, mortgage and consumer banking operation of the Corporation. Accordingly, all significant operating decisions are based upon analysis of the Bank as one segment or unit. Subsequent Events The Corporation has evaluated events and transactions occurring subsequent to the balance sheet date of December 31, 2018 for items that should potentially be recognized or disclosed in these financial statements. Adoption of New Accounting Standards In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, "Revenue from Contracts with Customers (Topic 606)". The objective of this amendment is to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and International Financial Reporting Standards. This update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are in the scope of other standards. The ASU is effective for public business entities for financial statements issued for fiscal years beginning after December 15, 2017, and early adoption is permitted. Subsequently, the FASB issued the following standards related to ASU 2014-09: ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations;” ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing;” ASU 2016-11, “Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting;” ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients;” ASU 2016-20, "Technical Corrections and Improvements to Topic 606, Revenue Contracts with Customers;" ASU 2017-13, "Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments;" and ASU 2017-14, "Income Statement - Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606): Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 116 and SEC Release No. 33-10403." These amendments are intended to improve and clarify the implementation guidance of ASU 2014-09 and have the same effective date as the original standard. The Corporation’s implementation efforts include the identification of revenue within the scope of the guidance, as well as the evaluation of revenue contracts and the respective performance obligations within those contracts. We have evaluated the nature of our contracts with customers and determined that further disaggregation of revenue from con |
SECURITIES
SECURITIES | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
SECURITIES | SECURITIES The fair value of the available-for-sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows: December 31, 2018 Amortized Gross Unrealized Fair Cost Gains Losses Value (In thousands) U.S. government-sponsored agencies $ 26,232 $ 15 $ (498 ) $ 25,749 Obligations of state and political subdivisions 3,205 — (84 ) 3,121 Mortgage-backed securities 63,659 68 (1,564 ) 62,163 Asset-backed securities (a) 4,916 6 — 4,922 Corporate debt (b) 13,369 48 (561 ) 12,856 Total $ 111,381 $ 137 $ (2,707 ) $ 108,811 December 31, 2017 Amortized Gross Unrealized Fair Cost Gains Losses Value (In thousands) U.S. government-sponsored agencies $ 21,699 $ 30 $ (396 ) $ 21,333 Obligations of state and political subdivisions 3,221 — (56 ) 3,165 Mortgage-backed securities 64,775 70 (1,011 ) 63,834 Asset-backed securities (a) 6,672 30 (4 ) 6,698 Corporate debt (b) 14,437 94 (302 ) 14,229 Total $ 110,804 $ 224 $ (1,769 ) $ 109,259 (a) Collateralized by student loans. (b) Corporate debt securities are primarily in financial institutions. Cash proceeds realized from sales and calls of securities available-for-sale for the years ended December 31, 2018 and 2017 were $1,007,000 and $500,000 , respectively. There were gross gains totaling $6,000 and no gross losses realized on sales or calls during the year ended December 31, 2018 . There were gross gains totaling $1,000 and no gross losses realized on sales or calls during the year ended December 31, 2017 . The fair value of available-for-sale securities pledged to secure public deposits for the years ended December 31, 2018 and 2017 was $988,000 and $990,000 , respectively. See also Note 7 to the Consolidated Financial Statements regarding securities pledged as collateral for Federal Home Loan Bank of New York advances. The following is a summary of the held-to-maturity securities and related gross unrealized gains and losses: December 31, 2018 Amortized Gross Unrealized Fair Cost Gains Losses Value (In thousands) U.S. Treasury $ 999 $ — $ (14 ) $ 985 U.S. government-sponsored agencies 35,565 20 (976 ) 34,609 Obligations of state and political subdivisions 2,358 14 (27 ) 2,345 Mortgage-backed securities 23,386 47 (375 ) 23,058 Total $ 62,308 $ 81 $ (1,392 ) $ 60,997 December 31, 2017 Amortized Gross Unrealized Fair Cost Gains Losses Value (In thousands) U.S. Treasury $ 999 $ — $ (11 ) $ 988 U.S. government-sponsored agencies 27,075 4 (760 ) 26,319 Obligations of state and political subdivisions 4,057 21 (23 ) 4,055 Mortgage-backed securities 20,311 76 (198 ) 20,189 Total $ 52,442 $ 101 $ (992 ) $ 51,551 Cash proceeds realized from calls of securities held-to-maturity for the years ended December 31, 2018 and 2017 were $280,000 and $1,320,000 , respectively. There were no gross gains and no gross losses realized from calls during the years ended December 31, 2018 and 2017 . The fair value of held-to-maturity securities pledged to secure public deposits for the years ended December 31, 2018 and 2017 was $626,000 and $789,000 , respectively. See also Note 7 to the Consolidated Financial Statements regarding securities pledged as collateral for Federal Home Loan Bank of New York advances. Issuers may have the right to call or prepay obligations with or without call or prepayment penalties. This might cause actual maturities to differ from the contractual maturities. Mortgage-backed securities are a type of asset-backed security secured by a mortgage or collection of mortgages, purchased by government agencies such as the Government National Mortgage Association and government sponsored agencies such as the Federal National Mortgage Association ("FNMA") and the Federal Home Loan Mortgage Corporation, which then issue securities that represent claims on the principal and interest payments made by borrowers on the loans in the pool. At year-end 2018 and 2017 , the Corporation had no holdings of securities of any one issuer other than the U.S. government and its agencies in an amount greater than 10% of shareholders' equity. The following table presents the amortized cost and fair value of the debt securities portfolio by contractual maturity. As issuers may have the right to call or prepay obligations with or without call or prepayment premiums, the actual maturities may differ from contractual maturities. Securities not due at a single maturity date, such as mortgage-backed securities and asset-backed securities, are shown separately. December 31, 2018 Amortized Cost Fair Value (In thousands) Available-for-sale Within one year $ 1,543 $ 1,528 After one year, but within five years 12,918 12,734 After five years, but within ten years 23,978 23,260 After ten years 4,367 4,204 Mortgage-backed securities 63,659 62,163 Asset-backed securities 4,916 4,922 Total $ 111,381 $ 108,811 Held-to-maturity Within one year $ 335 $ 336 After one year, but within five years 18,032 17,738 After five years, but within ten years 20,067 19,404 After ten years 488 461 Mortgage-backed securities 23,386 23,058 Total $ 62,308 $ 60,997 The following tables summarize the fair value and unrealized losses of those investment securities which reported an unrealized loss at December 31, 2018 and 2017 , and if the unrealized loss position was continuous for the twelve months prior to December 31, 2018 and 2017 . Available-for-sale December 31, 2018 Less than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (In thousands) U.S. government- sponsored agencies $ — $ — $ 17,432 $ (498 ) $ 17,432 $ (498 ) Obligations of state and political subdivisions — — 3,121 (84 ) 3,121 (84 ) Mortgage-backed securities 4,177 (19 ) 47,479 (1,545 ) 51,656 (1,564 ) Asset-backed securities 2,892 — — — 2,892 — Corporate debt — — 8,808 (561 ) 8,808 (561 ) Total temporarily impaired securities $ 7,069 $ (19 ) $ 76,840 $ (2,688 ) $ 83,909 $ (2,707 ) Available-for-sale December 31, 2017 Less than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (In thousands) U.S. government- sponsored agencies $ 8,260 $ (70 ) $ 11,174 $ (326 ) $ 19,434 $ (396 ) Obligations of state and political subdivisions 1,384 (7 ) 1,781 (49 ) 3,165 (56 ) Mortgage-backed securities 30,575 (201 ) 26,809 (810 ) 57,384 (1,011 ) Asset-backed securities — — 3,013 (4 ) 3,013 (4 ) Corporate debt — — 9,135 (302 ) 9,135 (302 ) Total temporarily impaired securities $ 40,219 $ (278 ) $ 51,912 $ (1,491 ) $ 92,131 $ (1,769 ) Held-to-maturity December 31, 2018 Less than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (In thousands) U.S. Treasury $ — $ — $ 985 $ (14 ) $ 985 $ (14 ) U.S. government- sponsored agencies 2,496 (9 ) 24,595 (967 ) 27,091 (976 ) Obligations of state and political subdivisions — — 461 (27 ) 461 (27 ) Mortgage-backed securities 5,885 (67 ) 11,081 (308 ) 16,966 (375 ) Total temporarily impaired securities $ 8,381 $ (76 ) $ 37,122 $ (1,316 ) $ 45,503 $ (1,392 ) Held-to-maturity December 31, 2017 Less than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (In thousands) U.S. Treasury $ 988 $ (11 ) $ — $ — $ 988 $ (11 ) U.S. government- sponsored agencies 10,032 (139 ) 15,265 (621 ) 25,297 (760 ) Obligations of state and political subdivisions — — 474 (23 ) 474 (23 ) Mortgage-backed securities 9,531 (114 ) 3,896 (84 ) 13,427 (198 ) Total temporarily impaired securities $ 20,551 $ (264 ) $ 19,635 $ (728 ) $ 40,186 $ (992 ) Equity securities consist solely of a Community Reinvestment Act ("CRA") mutual fund. During 2018, the Corporation adopted Accounting Standards Update No. 2016-01, "Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Liabilities. As a result of adoption, this fund was transferred from available for sale and reclassified into other equity investments on the Consolidated Statements of Financial Condition. In addition, the Corporation recorded an cumulative effect adjustment of $163,000 as a reclassification from accumulated other comprehensive loss to retained earnings. All future unrealized gains and losses are recognized in the Consolidated Statements of Income. Other-Than-Temporary-Impairment At December 31, 2018 , there were available-for-sale investments comprising twenty-one U.S. government-sponsored agency securities, seven obligations of state and political subdivision securities, seventy-three mortgage-backed securities, and nine corporate debt securities in a continuous loss position for twelve months or longer. At December 31, 2018 , there were held-to-maturity investments comprising one U.S. treasury, twenty-six U.S. government-sponsored agency securities, one obligation of state and political subdivision security, and twenty-seven mortgage-backed securities in a continuous loss position for twelve months or longer. Management has assessed the securities that were in an unrealized loss position at December 31, 2018 and 2017 and determined that any decline in fair value below amortized cost primarily relate to changes in interest rates and market spreads and was temporary. In making this determination management considered the following factors: the period of time the securities were in an unrealized loss position; the percentage decline in comparison to the securities’ amortized cost; any adverse conditions specifically related to the security, an industry or a geographic area; the rating or changes to the rating by a credit rating agency; the financial condition of the issuer and guarantor and any recoveries or additional declines in fair value subsequent to the balance sheet date. Management does not intend to sell securities in an unrealized loss position and it is not more likely than not that the Corporation will be required to sell these securities before the recovery of their amortized cost bases, which may be at maturity. |
LOANS AND ALLOWANCE FOR LOAN LO
LOANS AND ALLOWANCE FOR LOAN LOSSES | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
LOANS AND ALLOWANCE FOR LOAN LOSSES | LOANS AND ALLOWANCE FOR LOAN LOSSES At December 31, 2018 and 2017 , respectively, the loan portfolio consisted of the following: December 31, 2018 2017 (In thousands) Commercial: Secured by real estate $ 28,790 $ 31,684 Other 64,965 57,372 Commercial real estate 504,522 493,542 Commercial construction 9,787 2,152 Residential real estate 82,491 85,760 Consumer: Secured by real estate 36,120 32,207 Other 455 563 Government Guaranteed Loans - guaranteed portion 6,559 8,334 Other 98 106 Total gross loans 733,787 711,720 Less: Deferred loan costs, net 457 397 Allowance for loan losses 7,926 8,762 8,383 9,159 Loans, net $ 725,404 $ 702,561 Included in Commercial - Other and Commercial real estate were $170,000 and $3,561,000 , respectively, of Small Business Administration ("SBA") loans originated during 2018. The guaranteed portion of these loans were sold during the year ended December 31, 2018. In addition to the origination of SBA loans, prior to 2017, the Corporation purchased the guaranteed portion of several Government Guaranteed loans. These loans are listed separately in the table above. Due to the guarantee of the principal amount of these loans, no allowance for loan losses is established for these loans. The Corporation has entered into lending transactions with directors, executive officers and principal shareholders of the Corporation and their affiliates. At December 31, 2018 and 2017 , these loans aggregated approximately $3,038,000 and $3,248,000 , respectively. During the year ended December 31, 2018 , new loans totaling $2,126,000 were granted and repayments totaled approximately $1,461,000 . Additionally, one loan relationship in the amount of $874,000 is no longer included in the December 31, 2018 balance as the director is no longer affiliated with this borrower as they had been previously. The loans, at December 31, 2018 and 2017, were current as to principal and interest payments. Excluded from the above table are $14.3 million and $11.4 million of unpaid principal balances of loans serviced for others at December 31, 2018 and 2017, respectively. Activity in the allowance for loan losses is summarized as follows: Year Ended December 31, 2018 Balance beginning of period Provision charged to operations Loans charged-off Recoveries of loans charged-off Balance end of period (In thousands) Commercial $ 3,058 $ (468 ) $ (29 ) $ 142 $ 2,703 Commercial real estate 5,531 (1,249 ) — 665 4,947 Commercial construction 33 98 — — 131 Residential real estate 68 (3 ) — — 65 Consumer 64 2 — 2 68 Other 1 1 (2 ) 1 1 Unallocated 7 4 — — 11 Balance, ending $ 8,762 $ (1,615 ) $ (31 ) $ 810 $ 7,926 Year Ended December 31, 2017 Balance beginning of period Provision charged to operations Loans charged-off Recoveries of loans charged-off Balance end of period (In thousands) Commercial $ 2,663 $ 301 $ (3 ) $ 97 $ 3,058 Commercial real estate 4,734 697 — 100 5,531 Commercial construction 355 (322 ) — — 33 Residential real estate 66 2 — — 68 Consumer 75 (19 ) — 8 64 Other — 1 (1 ) 1 1 Unallocated 12 (5 ) — — 7 Balance, ending $ 7,905 $ 655 $ (4 ) $ 206 $ 8,762 The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on the impairment method as of December 31, 2018 and 2017 : December 31, 2018 Commercial Commercial Real Estate Commercial Construction Residential Real Estate Consumer Government Guaranteed Other Loans Unallocated Total (In thousands) Allowance for loan losses: Ending allowance balance attributable to loans Individually evaluated for impairment $ 88 $ 561 $ — $ — $ — $ — $ — $ — $ 649 Collectively evaluated for impairment 2,615 4,386 131 65 68 — 1 11 7,277 Total ending allowance balance $ 2,703 $ 4,947 $ 131 $ 65 $ 68 $ — $ 1 $ 11 $ 7,926 Loans: Loans individually evaluated for impairment $ 633 $ 6,079 $ — $ 576 $ — $ — $ — $ — $ 7,288 Loans collectively evaluated for impairment 93,122 498,443 9,787 81,915 36,575 6,559 98 — 726,499 Total ending loan balance $ 93,755 $ 504,522 $ 9,787 $ 82,491 $ 36,575 $ 6,559 $ 98 $ — $ 733,787 December 31, 2017 Commercial Commercial Real Estate Commercial Construction Residential Real Estate Consumer Government Guaranteed Other Loans Unallocated Total (In thousands) Allowance for loan losses: Ending allowance balance attributable to loans Individually evaluated for impairment $ 34 $ 575 $ — $ — $ — $ — $ — $ — $ 609 Collectively evaluated for impairment 3,024 4,956 33 68 64 — 1 7 8,153 Total ending allowance balance $ 3,058 $ 5,531 $ 33 $ 68 $ 64 $ — $ 1 $ 7 $ 8,762 Loans: Loans individually evaluated for impairment $ 549 $ 6,236 $ — $ 295 $ 62 $ — $ — $ — $ 7,142 Loans collectively evaluated for impairment 88,507 487,306 2,152 85,465 32,708 8,334 106 — 704,578 Total ending loan balance $ 89,056 $ 493,542 $ 2,152 $ 85,760 $ 32,770 $ 8,334 $ 106 $ — $ 711,720 The following table presents the recorded investment in nonaccrual loans at the dates indicated: December 31, 2018 2017 (In thousands) Commercial: Secured by real estate $ 394 $ 136 Commercial real estate 574 701 Residential real estate 576 295 Consumer: Secured by real estate — 62 Total nonaccrual loans $ 1,544 $ 1,194 At December 31, 2018 and 2017 there were no loans that were past due 90 days and still accruing. The following table presents loans individually evaluated for impairment by class of loans at and for the periods indicated: At And For The Year Ended December 31, 2018 Unpaid Principal Balance Recorded Investment Allowance for Loan Losses Allocated Average Recorded Investment Interest Income Recognized (In thousands) With no related allowance recorded: Commercial: Secured by real estate $ 447 $ 416 $ 455 $ 11 Commercial real estate 3,329 3,001 3,061 108 Residential real estate 587 576 343 — Consumer: Secured by real estate — — 28 — With an allowance recorded: Commercial: Secured by real estate 95 95 $ 83 65 3 Other 122 122 5 125 9 Commercial real estate 3,078 3,078 561 3,095 161 Total impaired loans $ 7,658 $ 7,288 $ 649 $ 7,172 $ 292 During the year ended December 31, 2018 , no interest income was recognized on a cash basis. At And For The Year Ended December 31, 2017 Unpaid Principal Balance Recorded Investment Allowance for Loan Losses Allocated Average Recorded Investment Interest Income Recognized (In thousands) With no related allowance recorded: Commercial: Secured by real estate $ 389 $ 389 $ 964 $ 70 Commercial real estate 3,442 3,124 3,148 121 Residential real estate 295 295 59 — Consumer: Secured by real estate 71 62 70 — With an allowance recorded: Commercial: Secured by real estate 33 32 $ 27 45 — Other 128 128 7 171 12 Commercial real estate 3,112 3,112 575 3,144 128 Total impaired loans $ 7,470 $ 7,142 $ 609 $ 7,601 $ 331 During the year ended December 31, 2017 , no interest income was recognized on a cash basis. The following table presents the aging of the recorded investment in past due loans by class of loans as of December 31, 2018 and 2017 . Nonaccrual loans are included in the disclosure by payment status: December 31, 2018 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days Past Due Total Past Due Loans Not Past Due Total (In thousands) Commercial: Secured by real estate $ — $ — $ 394 $ 394 $ 28,396 $ 28,790 Other 6 — — 6 64,959 64,965 Commercial real estate 2,155 — 509 2,664 501,858 504,522 Commercial construction — — — — 9,787 9,787 Residential real estate 112 42 308 462 82,029 82,491 Consumer: Secured by real estate — — — — 36,120 36,120 Other 1 — — 1 454 455 Government Guaranteed Loans — — — — 6,559 6,559 Other — — — — 98 98 Total $ 2,274 $ 42 $ 1,211 $ 3,527 $ 730,260 $ 733,787 December 31, 2017 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days Past Due Total Past Due Loans Not Past Due Total (In thousands) Commercial: Secured by real estate $ 186 $ — $ — $ 186 $ 31,498 $ 31,684 Other 8 — — 8 57,364 57,372 Commercial real estate 300 — 599 899 492,643 493,542 Commercial construction — — — — 2,152 2,152 Residential real estate 314 — — 314 85,446 85,760 Consumer: Secured by real estate — — 28 28 32,179 32,207 Other — — — — 563 563 Government Guaranteed Loans — — — — 8,334 8,334 Other — — — — 106 106 Total $ 808 $ — $ 627 $ 1,435 $ 710,285 $ 711,720 Troubled Debt Restructurings In order to determine whether a borrower is experiencing financial difficulty necessitating a restructuring, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed in accordance with the Corporation’s internal underwriting policy. A loan is considered to be in payment default once it is contractually 90 days past due. At December 31, 2018 and 2017 , the Corporation had $6.3 million and $6.6 million , respectively, of loans whose terms have been modified in troubled debt restructurings. Of these loans, $5.7 million and $5.9 million had demonstrated a reasonable period of performance in accordance with their new terms at December 31, 2018 and 2017 , respectively, and are, therefore, accruing loans. The remaining troubled debt restructurings are reported as nonaccrual loans. Specific reserves of $649,000 and $582,000 have been recorded for the troubled debt restructurings at December 31, 2018 and 2017 , respectively, and are included in the table above. As of December 31, 2018 and December 31, 2017, there were no additional funds committed to these borrowers. The following table presents the number of loans and their recorded investment immediately prior to the modification date and immediately after the modification date by class that were modified as troubled debt restructurings during the year ended December 31, 2018: December 31, 2018 Number of Loans Pre- Modification Recorded Investment Post- Modification Recorded Investment (Dollars in thousands) Commercial: Secured by real estate 1 $ 95 $ 95 Total 1 $ 95 $ 95 During the year ended December 31, 2018, there was one loan modified as a troubled debt restructuring. The modification of the terms of the commercial - secured by real estate loan represented the term out of the remaining balance of a line of credit. For the year ended December 31, 2018, the troubled debt restructuring described above resulted in an increase in the allowance for loan losses of $83,000 . There were no charge-offs during the twelve months ended December 31, 2018 related to this troubled debt restructuring. There were no new loans classified as troubled debt restructuring during the year ended December 31, 2017. For the years ended December 31, 2018 and 2017 , there was a net increase in the allowance for loan losses of $67,000 and decrease of $28,000 , respectively, related to troubled debt restructurings. There were no charge-offs in 2018 or 2017 related to these troubled debt restructurings. There were no loans modified as TDRs within the previous 12 months from both December 31, 2018 and 2017, which had a payment default (90 days or more past due) during the years ended December 31, 2018 and 2017. TDRs that subsequently default are considered collateral dependent impaired loans and are evaluated for impairment based on the estimated fair value of the underlying collateral less expected selling costs. Credit Quality Indicators The Corporation categorizes loans into risk categories based on relevant information about the ability of the borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Corporation analyzes loans individually by classifying the loans as to credit risk. This analysis includes non-homogeneous loans, such as commercial, commercial real estate and commercial construction loans. This analysis is performed at the time the loan is originated and annually thereafter. The Corporation uses the following definitions for risk ratings. Special Mention – A Special Mention asset has potential weaknesses that deserve management’s close attention, which, if left uncorrected, may result in deterioration of the repayment prospects for the asset or the Bank’s credit position at some future date. Special Mention assets are not adversely classified and do not expose the Bank to sufficient risk to warrant adverse classification. Substandard – Substandard loans are inadequately protected by the current net worth and paying capacity of the borrower or by the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the repayment and liquidation of the debt. These loans are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Doubtful – A Doubtful loan has all of the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable or improbable. The likelihood of loss is extremely high, but because of certain important and reasonably specific factors, an estimated loss is deferred until a more exact status can be determined. Loss – A loan classified Loss is considered uncollectible and of such little value that its continuance as an asset is not warranted. This classification does not necessarily mean that an asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off a basically worthless asset even though partial recovery may be affected in the future. Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. As of December 31, 2018 and 2017 , and based on the most recent analysis performed at those times, the risk category of loans by class is as follows: December 31, 2018 Pass Special Mention Substandard Doubtful Loss Total (In thousands) Commercial: Secured by real estate $ 26,879 $ 1,234 $ 677 $ — $ — $ 28,790 Other 63,438 181 1,346 — — 64,965 Commercial real estate 490,661 7,086 6,775 — — 504,522 Commercial construction 9,787 — — — — 9,787 Government Guaranteed Loans guaranteed portion 6,559 — — — — 6,559 Total $ 597,324 $ 8,501 $ 8,798 $ — $ — $ 614,623 December 31, 2017 Pass Special Mention Substandard Doubtful Loss Total (In thousands) Commercial: Secured by real estate $ 29,025 $ 2,153 $ 506 $ — $ — $ 31,684 Other 56,632 216 524 — — 57,372 Commercial real estate 481,443 10,023 2,076 — — 493,542 Commercial construction 2,152 — — — — 2,152 Government Guaranteed Loans guaranteed portion 8,334 — — — — 8,334 Total $ 577,586 $ 12,392 $ 3,106 $ — $ — $ 593,084 The Corporation considers the historical and projected performance of the loan portfolio and its impact on the allowance for loan losses. For residential real estate and consumer loan segments, the Corporation evaluates credit quality primarily based on payment activity and historical loss data. The following table presents the recorded investment in residential real estate and consumer loans based on payment activity as of December 31, 2018 and 2017 . December 31, 2018 Current 30+ Days Past Due or Nonaccrual Total (In thousands) Residential real estate $ 81,761 $ 730 $ 82,491 Consumer: Secured by real estate 36,120 — 36,120 Other 454 1 455 Total $ 118,335 $ 731 $ 119,066 December 31, 2017 Current 30+ Days Past Due or Nonaccrual Total (In thousands) Residential real estate $ 85,446 $ 314 $ 85,760 Consumer: Secured by real estate 32,179 28 32,207 Other 563 — 563 Total $ 118,188 $ 342 $ 118,530 |
PREMISES AND EQUIPMENT, NET
PREMISES AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PREMISES AND EQUIPMENT, NET | PREMISES AND EQUIPMENT, NET The balance of premises and equipment consists of the following at December 31, 2018 and 2017 : Years Ended December 31, 2018 2017 (In thousands) Land $ 3,240 $ 3,240 Buildings and improvements 4,654 4,505 Leasehold improvements 1,925 1,923 Furniture, fixtures, and equipment 2,027 1,605 11,846 11,273 Less: accumulated depreciation and amortization 4,839 4,364 Total premises & equipment, net $ 7,007 $ 6,909 Amounts charged to net occupancy expense for depreciation and amortization of banking premises and equipment amounted to $475,000 and $399,000 in 2018 and 2017 , respectively. |
OTHER REAL ESTATE OWNED
OTHER REAL ESTATE OWNED | 12 Months Ended |
Dec. 31, 2018 | |
OTHER REAL ESTATE OWNED [Abstract] | |
OTHER REAL ESTATE OWNED | OTHER REAL ESTATE OWNED There was no other real estate owned at the years ended December 31, 2018 and 2017 . There was no activity in the allowance for losses on other real estate owned for the year ended December 31, 2018. Activity in the allowance for losses on other real estate owned for the year ended December 31, 2017 was as follows: Year Ended December 31, 2017 (In thousands) Beginning of year $ 3 Additions charged to expense — Reductions from sales of other real estate owned (3 ) End of year $ — There was no gain on sale of other real estate owned for the year ended December 31, 2018 . Net gain on sale of other real estate owned totaled $13,000 for the year ended December 31, 2017 . There were no other real estate owned expenses for the year ended December 31, 2018 . Expenses related to other real estate owned for the year ended December 31, 2017 include: Year Ended December 31, 2017 (In thousands) Provision for unrealized losses $ — Operating expenses, net of rental income 24 End of year $ 24 |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2018 | |
DEPOSITS [Abstract] | |
DEPOSITS | DEPOSITS The following table presents deposits at December 31, 2018 and 2017 : December 31, 2018 2017 (In thousands) Noninterest-bearing demand $ 174,717 $ 172,861 Interest-bearing checking accounts 175,215 196,924 Money market accounts 149,936 110,256 Total interest-bearing demand 325,151 307,180 Statement savings and clubs 71,472 77,284 Business savings 5,273 5,830 Total savings 76,745 83,114 IRA investment and variable rate savings 31,876 33,236 Brokered certificates 37,063 25,944 Money market certificates 136,539 141,764 Total certificates of deposit 205,478 200,944 Total interest-bearing deposits 607,374 591,238 Total deposits $ 782,091 $ 764,099 Certificates of deposit with balances of $250,000 or more at December 31, 2018 and 2017 , totaled $59,421,000 and $42,810,000 , respectively. The scheduled maturities of certificates of deposit were as follows: Year Ended December 31, Balances (In thousands) 2019 $ 115,418 2020 45,973 2021 34,421 2022 7,132 2023 2,534 $ 205,478 The following table presents interest expense on deposits at December 31, 2018 and 2017 summarized as follows: December 31, 2018 2017 (In thousands) Total interest bearing demand $ 2,147 $ 709 Total savings 83 91 Total certificates of deposit 3,063 2,389 Total interest expense $ 5,293 $ 3,189 Deposits from executive officers and directors at December 31, 2018 and 2017 were $3,627,000 and $3,793,000 , respectively. |
BORROWINGS
BORROWINGS | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
BORROWINGS | BORROWINGS Federal Home Loan Bank of New York Advances The following table presents Federal Home Loan Bank of New York ("FHLB-NY") advances by maturity date: December 31, 2018 December 31, 2017 Advances Maturing Amount Weighted Average Rate Amount Weighted Average Rate (Dollars in thousands) Within one year $ 45,700 1.99 % $ 20,760 1.59 % After one year, but within two years 5,000 1.88 % 33,000 1.76 % After two years, but within three years 5,000 1.68 % 5,000 1.88 % After three years, but within four years — — % 5,000 1.68 % After four years, but within five years 10,000 3.25 % — — % Total advances maturing $ 65,700 2.15 % $ 63,760 1.71 % During 2018 and 2017 , the maximum amount of FHLB-NY advances outstanding at any month end was $65.8 million and $93.8 million , respectively. The average amount of advances outstanding during the years ended December 31, 2018 and 2017 was $52.4 million and $74.4 million , respectively. Advances from the FHLB-NY are all fixed rate borrowings and are secured by a blanket assignment of the Corporation's unpledged, qualifying residential first mortgage loans, by select commercial real estate loans and by certain securities. The loans remain under the control of the Corporation. Securities are maintained in safekeeping with the FHLB-NY. As of December 31, 2018 and 2017 , the advances were collateralized by $68.2 million and $73.0 million , respectively, of residential first mortgage loans under the blanket lien arrangement and by $44.1 million and $49.3 million of investment securities, respectively. Additionally, as of December 31, 2018 , the advances were collateralized by $37.8 million of select commercial real estate loans pledged to the FHLB-NY. Based on the collateral, the Corporation was eligible to borrow up to a total of $150.2 million at December 31, 2018 and $122.3 million at December 31, 2017 . The Corporation has the ability to borrow overnight with the FHLB-NY. As of December 31, 2018 , overnight borrowings with the FHLB-NY were $12.7 million . There were no overnight borrowings with the FHLB-NY as of December 31, 2017 . The overall borrowing capacity is contingent on available collateral to secure borrowings and the ability to purchase additional activity-based capital stock of the FHLB-NY. The Corporation may also borrow from the Discount Window of the Federal Reserve Bank of New York based on the market value of collateral pledged. At December 31, 2018 and 2017 , the Corporation’s borrowing capacity at the Discount Window was $3.3 million and $4.7 million , respectively. In addition, at both December 31, 2018 and 2017 the Corporation had available overnight variable repricing lines of credit with other correspondent banks totaling $38.0 million , on an unsecured basis. There were no borrowings under these lines of credit at December 31, 2018 and 2017 . |
SUBORDINATED DEBENTURES AND SUB
SUBORDINATED DEBENTURES AND SUBORDINATED NOTES | 12 Months Ended |
Dec. 31, 2018 | |
SUBORDINATED DEBENTURES AND SUBORDINATED NOTES [Abstract] | |
SUBORDINATED DEBENTURES AND SUBORDINATED NOTES | SUBORDINATED DEBENTURES AND SUBORDINATED NOTES Carrying Amount December 31, Issue Maturity Rate 2018 2017 (In thousands) 9/17/2003 9/17/2033 Fixed / Floating Rate Junior Subordinated Debentures $ 7,217 $ 7,217 8/28/2015 8/25/2025 Fixed Rate Subordinated Notes 16,165 16,100 Total $ 23,382 $ 23,317 In 2003, the Corporation formed Stewardship Statutory Trust I (the “Trust”), a statutory business trust, which on September 17, 2003 issued $7.0 million Fixed/Floating Rate Capital Securities (“Capital Securities”). The Trust used the proceeds of the Capital Securities to purchase from the Corporation, $7,217,000 of Fixed/Floating Rate Junior Subordinated Deferrable Interest Debentures (the “Subordinated Debentures”) maturing September 17, 2033. The Trust is obligated to distribute all proceeds of a redemption whether voluntary or upon maturity, to holders of the Capital Securities. The Corporation’s obligation with respect to the Capital Securities and the Subordinated Debentures, when taken together, provide a full and unconditional guarantee on a subordinated basis by the Corporation of the Trust’s obligations to pay amounts when due on the Capital Securities. The Corporation is not considered the primary beneficiary of the Trust (variable interest entity); therefore, the Trust is not consolidated in the Corporation’s consolidated financial statements, but rather the Subordinated Debentures are shown as a liability. Prior to September 17, 2008, the Capital Securities and the Subordinated Debentures both had a fixed interest rate of 6.75% . Beginning September 17, 2008, the rate floats quarterly at a rate of three month LIBOR plus 2.95% . At December 31, 2018 and 2017 , the rate on both the Capital Securities and the Subordinated Debentures was 5.74% and 4.55% , respectively. The Corporation has the right to defer payments of interest on the Subordinated Debentures by extending the interest payment period for up to 20 consecutive quarterly periods. The Subordinated Debentures may be included in Tier 1 capital (with certain limitations applicable) under current regulatory guidelines and interpretations. On August 28, 2015, the Corporation completed a private placement of $16.6 million in aggregate principal amount of fixed rate subordinated notes (the “Subordinated Notes”) to certain institutional accredited investors pursuant to a Subordinated Note Purchase Agreement dated August 28, 2015 between the Corporation and such investors. The Subordinated Notes have a maturity date of August 28, 2025 and bear interest at the rate of 6.75% per annum, payable semi-annually, in arrears, on March 1 and September 1 of each year during the time that the Subordinated Notes remain outstanding. The Subordinated Notes include a right of prepayment, without penalty, on or after August 28, 2020 and, in certain limited circumstances, before that date. The indebtedness evidenced by the Subordinated Notes, including principal and interest, is unsecured and subordinate and junior in right of the Corporation's payment to general and secured creditors and depositors of the Bank. The Subordinated Notes have been structured to qualify as Tier 2 capital for regulatory purposes. The Subordinated Notes totaled $16.2 million and $16.1 million at December 31, 2018 and 2017 , respectively, which includes $435,000 and $500,000 , respectively, of remaining unamortized debt issuance costs. The debt issuance costs are being amortized over the expected life of the issue. |
REGULATORY CAPITAL REQUIREMENTS
REGULATORY CAPITAL REQUIREMENTS | 12 Months Ended |
Dec. 31, 2018 | |
REGULATORY CAPITAL REQUIREMENTS [Abstract] | |
REGULATORY CAPITAL REQUIREMENTS | REGULATORY CAPITAL REQUIREMENTS The Corporation is subject to capital adequacy guidelines promulgated by the Board of Governors of the Federal Reserve System (“FRB Board”). The Bank is subject to somewhat comparable but different capital adequacy requirements imposed by the Federal Deposit Insurance Corporation (the “FDIC”). The federal banking agencies have adopted risk-based capital guidelines for banks and bank holding companies. The risk-based capital guidelines are designed to make regulatory capital requirements more sensitive to differences in risk profiles among banks and bank holding companies, to account for off-balance sheet exposure, and to minimize disincentives for holding liquid assets. Under these guidelines, assets and off-balance sheet items are assigned to broad risk categories, each with appropriate weights. The resulting capital ratios represent capital as a percentage of total risk-weighted assets and off-balance sheet items. Federal banking regulators have also adopted leverage capital guidelines to supplement the risk-based measures. Leverage capital to average total assets is determined by dividing Tier 1 Capital as defined under the risk-based capital guidelines by average total assets (non-risk adjusted). Guidelines for Banks In December 2010 and January 2011, the Basel Committee on Banking Supervision (the “Basel Committee”) published the final texts of reforms on capital and liquidity, which are generally referred to as “Basel III”. The Basel Committee is a committee of central banks and bank supervisors and regulators from the major industrialized countries that develops broad policy guidelines for the regulation of banks and bank holding companies. In July 2013, the FDIC and the other federal bank regulatory agencies adopted final rules (the “Basel Rules”) to implement certain provisions of Basel III and the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Basel Rules revised the leverage and risk-based capital requirements and the methods for calculating risk-weighted assets. The Basel Rules apply to all depository institutions, top-tier bank holding companies with total consolidated assets of $1 billion or more and top-tier savings and loan holding companies. Among other things, the Basel Rules (a) established a new common equity Tier 1 Capital (“CET1”) to risk-weighted assets ratio minimum of 4.5% of risk-weighted assets, (b) raised the minimum Tier 1 Capital to risk-based assets requirement (“Tier 1 Capital Ratio) from 4% to 6% of risk-weighted assets and (c) assigned a higher risk weight of 150% to exposures that are more than 90 days past due or are on nonaccrual status and to certain commercial real estate facilities. The minimum ratio of Total Capital to risk-weighted assets (including certain off-balance sheet activities, such as standby letters of credit) is 8%. At least 6% of the Total Capital is required to be “Tier 1 Capital”, which consists of common shareholders’ equity and certain preferred stock, less certain items and other intangible assets. The remainder, “Tier 2 Capital,” may consist of (a) the allowance for loan losses of up to 1.25% of risk-weighted assets, (b) excess of qualifying preferred stock, (c) hybrid capital instruments, (d) debt, (e) mandatory convertible securities and (f) qualifying subordinated debt. “Total Capital” is the sum of Tier 1 Capital and Tier 2 Capital less reciprocal holdings of other banking organizations’ capital instruments, investments in unconsolidated subsidiaries and any other deductions as determined by the federal banking regulatory agencies on a case-by-case basis or as a matter of policy after formal rule-making. A small bank holding company that has the highest regulatory examination rating and is not contemplating significant growth or expansion must maintain a minimum level of Tier 1 Capital to average total consolidated assets leverage ratio of at least 3%. All other bank holding companies are expected to maintain a leverage ratio of at least 100 to 200 basis points above the stated minimum. The Basel Rules also require unrealized gains and losses on certain available-for-sale securities to be included for purposes of calculating regulatory capital unless a one-time opt-out was exercised. Additional constraints are also imposed on the inclusion in regulatory capital of mortgage-servicing assets and deferred tax assets. The Basel Rules limit a banking organization’s capital distributions and certain discretionary bonus payments if the banking organization does not hold a “capital conservation buffer” consisting of 2.5% of CET1 to risk-weighted assets in addition to the amount necessary to meet a minimum risk-based capital requirement. The purpose of the capital conservation buffer is to ensure that banking organizations conserve capital when it is needed most, allowing them to weather periods of economic stress. Banking institutions with a CET1 Ratio, Tier 1 Capital Ratio or Total Capital Ratio above the minimum capital ratios but below the minimum capital ratios plus the capital conservation buffer will face constraints on their ability to pay dividends, repurchase equity and pay discretionary bonuses to executive officers based on the amount of the shortfall. The Basel Rules became effective for the Bank on January 1, 2015. The capital conservation buffer requirement of 0.625% became effective January 1, 2016 and was phased in annually through January 1, 2019, when the full capital conservation buffer requirement of 2.50% became effective. At December 31, 2018 , the Bank's capital conservation buffer requirement was 1.875% and the actual capital conservation buffer was 5.54% . Bank assets are given risk-weights of 0%, 20%, 50%, 100%, and 150%. In addition, certain off-balance sheet items are given similar credit conversion factors to convert them to asset equivalent amounts to which an appropriate risk-weight will apply. These computations result in the total risk-weighted assets. Most loans are assigned to the 100% risk category, except for performing first mortgage loans fully secured by residential property which carry a 50% risk-weighting. Loan exposures past due 90 days or more or on nonaccrual are assigned a risk-weighting of at least 100%. High volatility commercial real estate ("HVCRE") loan exposures are assigned to the 150% category; provided, however, Section 214 of the Economic Growth Act, prohibits federal banking agencies from requiring the financial institution to assign heightened risk weights to HVCRE loans unless the loan is related to real estate acquisition, development and construction (“HVCRE ADC”). Under the Basel III capital rules, HVCRE ADC loans are assigned a higher risk weight than other commercial real estate loans. Most investment securities (including, primarily, general obligation claims of states or other political subdivisions of the United States) are assigned to the 20% category, except for municipal or state revenue bonds, which have a 50% risk-weight, and direct obligations of the U.S. Treasury or obligations backed by the full faith and credit of the U.S. government, which have a 0% risk-weight. In converting off-balance sheet items, direct credit substitutes, including general guarantees and standby letters of credit backing nonfinancial obligations, and undrawn commitments (including commercial credit lines with an initial maturity of more than one year) have a 50% risk-weighting. Short-term undrawn commitments and commercial letters of credit with an initial maturity of under one year have a 50% risk-weighting and certain short-term unconditionally cancelable commitments are not risk-weighted. Community Bank Leverage Ratio The recently enacted Economic Growth Act requires federal banking agencies to develop a “community bank leverage ratio” (the ratio of a bank’s tangible equity capital to average total consolidated assets) for financial institutions with assets of less than $10 billion. A “qualifying community bank” that exceeds this ratio will be deemed to be in compliance with all other capital and leverage requirements, including the capital requirements to be considered “well capitalized” under prompt corrective action rules. The federal banking agencies may consider an institution’s risk profile when evaluating whether it qualifies as a community bank for purposes of the capital ratio requirement. The minimum capital for the new community bank leverage ratio must be set at not less than 8% and not more than 10%. A financial institution can elect to be subject to this new definition. The Economic Growth Act requires the federal banking agencies to consult with state banking regulators and notify the applicable state banking regulator of any qualifying community bank that exceeds or no longer exceeds the Community Bank Leverage Ratio. Guidelines for Small Bank Holding Companies The Dodd-Frank Act required the FRB to establish for all bank and savings and loan holding companies minimum consolidated capital requirements that are as stringent as those required for the insured depository subsidiaries. The FRB has updated and amended its Small Bank Holding Company Policy Statement to extend to bank and savings and loan holding companies the applicability of the “Small Bank Holding Company” exception to its consolidated capital requirements and, as a result of the Economic Growth Act, increased the threshold for the exception from $1.0 billion in consolidated assets to $3.0 billion in consolidated assets. As a result of the revised Small Bank Holding Company Policy Statement, Basel III capital rules and reporting requirements do not apply to small bank holding companies (“SBHC”), such as the Corporation, that have total consolidated assets of less than $3 billion unless otherwise advised by the FRB. The minimum risk-based capital requirements for a SBHC to be considered adequately capitalized are 4% for Tier 1 Capital and 8% for Total Capital to risk-weighted assets. The regulations for SBHCs classify risk-based capital into two categories: “Tier 1 Capital” which consists of common and qualifying perpetual preferred shareholders’ equity less goodwill and other intangibles and “Tier 2 Capital” which consists of (a) the allowance for loan losses of up to 1.25% of risk-weighted assets, (b) the excess of qualifying preferred stock, (c) hybrid capital instruments, (d) debt, (e) mandatory convertible securities and (f) qualifying subordinated debt. Total qualifying capital consists of Tier 1 Capital and Tier 2 Capital less reciprocal holdings of other banking organizations’ capital instruments, investments in unconsolidated subsidiaries and any other deductions as determined by the FRB on a case-by-case basis or as a matter of policy after formal rule-making. However, the amount of Tier 2 Capital may not exceed the amount of Tier 1 Capital. The Corporation must maintain a minimum level of Tier 1 Capital to average total consolidated assets leverage ratio of 3%, which is the leverage ratio reserved for top-tier bank holding companies having the highest regulatory examination rating and not contemplating significant growth or expansion. Bank holding company assets are given risk-weights of 0%, 20%, 50%, and 100%. In addition, certain off-balance sheet items are given similar credit conversion factors to convert them to asset equivalent amounts to which an appropriate risk-weight will apply. These computations result in the total risk-weighted assets. Actual Required for Capital Adequacy Purposes To Be Well Capitalized Under Prompt Corrective Action Regulations Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) December 31, 2018 Tier 1 Leverage ratio Corporation $ 89,086 9.33 % $ 38,213 4.00 % N/A N/A Bank 99,761 10.49 % 38,032 4.00 % $ 47,540 5.00 % Risk-based capital: Common Equity Tier 1 Corporation N/A N/A N/A N/A N/A N/A Bank 99,761 12.54 % 35,798 4.50 % 51,708 6.50 % Tier 1 Corporation 89,086 11.33 % 31,461 4.00 % N/A N/A Bank 99,761 12.54 % 47,731 6.00 % 63,641 8.00 % Total Corporation 113,178 14.39 % 62,922 8.00 % N/A N/A Bank 107,687 13.54 % 63,641 8.00 % 79,551 10.00 % December 31, 2017 Tier 1 Leverage ratio Corporation $ 81,886 8.88 % $ 36,867 4.00 % N/A N/A Bank 92,824 10.12 % 36,698 4.00 % $ 45,872 5.00 % Risk-based capital: Common Equity Tier 1 Corporation N/A N/A N/A N/A N/A N/A Bank 92,824 12.24 % 34,113 4.50 % 49,274 6.50 % Tier 1 Corporation 81,886 10.96 % 29,889 4.00 % N/A N/A Bank 92,824 12.24 % 45,484 6.00 % 60,645 8.00 % Total Corporation 106,748 14.29 % 59,777 8.00 % N/A N/A Bank 101,586 13.40 % 60,645 8.00 % 75,807 10.00 % As presented above, at December 31, 2018 and 2017 , the Bank’s regulatory capital ratios exceeded the established minimum capital requirements. The Subordinated Notes have been structured to qualify as Tier 2 capital for regulatory purposes. |
BENEFIT PLANS
BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
BENEFIT PLANS | BENEFIT PLANS The Corporation has a 401(k) plan which covers all eligible employees. Participants may elect to contribute a percentage, up to 100% , of their salaries, not to exceed the applicable limitations as per the Internal Revenue Code. The Corporation's matching contribution is determined on an annual basis. For the year ended ended December 31, 2018 and 2017 , the Corporation matched 50% of the participant’s first 7% contribution. Total 401(k) expense for the years ended December 31, 2018 and 2017 amounted to approximately $ 213,000 and $173,000 , respectively. The Corporation offers an Employee Stock Purchase Plan which allows all eligible employees to authorize a specific payroll deduction from his or her base compensation for the purchase of the Corporation’s Common Stock. Total stock purchases amounted to 2,863 and 2,724 shares during 2018 and 2017 , respectively. At December 31, 2018 , the Corporation had 165,706 shares reserved for issuance under this plan. During 2017, the Corporation introduced a Supplemental Executive Retirement Plan (“SERP”) for the President / Chief Executive Officer of the Corporation. In 2018 this plan was expanded to include the Executive Vice President / Chief Financial Officer and the Executive Vice President / Chief Lending Officer. The SERP provides a supplemental retirement income benefit upon the attainment of age 66 or separation of service. SERP benefits are payable in equal monthly installments for 180 months. Benefits are also payable upon death. The estimated present value of future benefits is accrued over the period from the effective date of the agreement until the expected retirement date. The Corporation recorded SERP expense of $444,000 and $258,000 for the years ended December 31, 2018 and 2017 , respectively. The benefits accrued under the SERP included in Accrued Expenses and Other Liabilities totaled $702,000 and $258,000 at December 31, 2018 and 2017 , respectively, and are unfunded. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION At December 31, 2018 , the Corporation maintained the following stock award programs. Director Stock Plan The Director Stock Plan permits members of the Board of Directors of the Bank to receive their monthly Board of Directors’ fees in shares of the Corporation’s Common Stock, rather than in cash. Shares are purchased for directors in the open market and resulted in purchases of 2,644 and 2,855 shares for the years ended December 31, 2018 and 2017 , respectively. At December 31, 2018 , the Corporation had 512,005 shares authorized but unissued for this plan. Stock Incentive Plan The 2010 Stock Incentive Plan covers both employees and directors. The purpose of the plan is to promote the long-term growth and profitability of the Corporation by (i) providing key people with incentives to improve shareholder value and to contribute to the growth and financial success of the Corporation, and (ii) enabling the Corporation to attract, retain and reward the best available persons. The plan permits the granting of stock (including incentive stock options qualifying under Internal Revenue Code section 422 and nonqualified options), stock appreciation rights, restricted or unrestricted stock awards, phantom stock, performance awards or other stock-based awards. Restricted shares granted under the plan generally vest over a three year service period with compensation expenses recognized on a straight-line basis. The value of restricted shares is based upon an average of the high and low closing price of the Corporation's common stock on the date of grant. Changes in nonvested restricted shares were as follows: 2018 2017 Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Balance January 1 51,528 $ 6.91 68,586 $ 5.52 Granted 28,221 10.65 20,876 8.88 Vested (1) (28,066 ) 4.39 (34,675 ) 5.40 Forfeited (2,131 ) 9.82 (3,259 ) 6.41 Balance December 31 49,552 $ 10.34 51,528 $ 6.91 (1) Includes 9,835 and 13,288 shares in 2018 and 2017, respectively, that vested but were immediately forfeited to cover taxes. Stock based compensation expense related to stock grants to associates was $97,000 and $62,000 for the years ended December 31, 2018 and 2017 , respectively. As of December 31, 2018, there was approximately $282,000 of unrecognized compensation cost related to non-vested stock grants that will be recognized over the next 26 months. There were no unrestricted stock awards granted during the years ended December 31, 2018 . There were 5,000 unrestricted stock awards granted to the members of the Board of Directors during the year ended December 31, 2017 . Expense related to stock grants to directors was $50,000 for the year ended December 31, 2017 . At December 31, 2018 the Corporation had 64,528 shares authorized but unissued for this plan. |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON SHARE | EARNINGS PER COMMON SHARE The following reconciles the income available to common shareholders (numerator) and the weighted average common stock outstanding (denominator) for both basic and diluted earnings per share: Years Ended December 31, 2018 2017 (Dollars in thousands, except per share amounts) Net income available to common shareholders $ 8,030 $ 3,947 Weighted average common shares outstanding - basic and diluted 8,672,840 7,906,791 Basic and diluted earnings per common share $ 0.93 $ 0.50 There were no stock options to purchase shares of common stock for the years ended December 31, 2018 or 2017 . |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Tax Cuts and Jobs Act ("Tax Act) was signed into law on December 22, 2017. Included as part of the law was a permanent reduction in the Federal corporate income tax rate from 35% to 21% effective January 1, 2018. Based upon the change in the tax rate, the Corporation revalued its net deferred tax asset at December 31, 2017. As a result of the enactment of the Tax Act, the Corporation recognized an additional tax expense of $1.4 million for the year ended December 31, 2017. The components of income tax expense are summarized as follows: Years Ended December 31, 2018 2017 (In thousands) Current tax expense Federal $ 1,865 $ 2,438 State 1,158 919 3,023 3,357 Deferred tax expense Federal 100 1,555 State (101 ) (128 ) Valuation allowance (2 ) (8 ) (3 ) 1,419 Total $ 3,020 $ 4,776 The following table presents a reconciliation between the reported income taxes and the income taxes which would be computed by applying the normal federal income tax rate (21% and 34% for the year ended December 31, 2018 and 2017, respectively) to income before income taxes: Years Ended December 31, 2018 2017 (In thousands) Federal income tax $ 2,320 $ 2,966 Add (deduct) effect of: State income taxes, net of federal income tax effect 835 606 Nontaxable interest income (47 ) (129 ) Effect of change in Federal statutory tax rate 33 1,420 Bank owned life insurance (116 ) (198 ) Nondeductible expenses (14 ) (31 ) Change in valuation reserve (2 ) (8 ) Out of period adjustment for state fixed asset basis — 150 Other 11 — Effective federal income taxes $ 3,020 $ 4,776 The tax effects of existing temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: December 31, 2018 2017 (In thousands) Deferred tax assets: Allowance for loan losses $ 2,285 $ 2,455 Accrued compensation 109 91 Nonaccrual loan interest 30 12 Depreciation 94 202 Contribution carry forward — 2 Mortgage servicing rights (22 ) (5 ) Accrued contributions 249 167 Unrealized loss on securities available-for-sale 836 498 SERP 202 — 3,783 3,422 Valuation reserve — (2 ) Net deferred tax assets $ 3,783 $ 3,420 At December 31, 2018 , the Corporation provided a valuation allowance relating to a state tax benefit of contribution carryforwards. Management had determined that it was more likely than not that it would not be able to realize this deferred tax benefit. There were no unrecognized tax benefits during the years or at the years ended December 31, 2018 and 2017 and management does not expect a significant change in unrecognized benefits in the next twelve months. There were no tax interest and penalties recorded in the income statement for the years ended December 31, 2018 and 2017 . There were no tax interest and penalties accrued for the years ended December 31, 2018 and 2017 . The Corporation and its subsidiaries are subject to U.S. federal income tax as well as income tax of the States of New Jersey and New York. The Corporation is no longer subject to examination by taxing authorities for years before 2015. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Loan Commitments The Corporation is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated financial statements. The contract or notional amounts of those instruments reflect the extent of involvement the Corporation has in particular classes of financial instruments. The Corporation's 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 represented by the contractual notional amount of those instruments. The Corporation uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. At December 31, 2018 , the Corporation had no residential mortgage commitments to extend credit. Commercial, construction, and home equity loan commitments of approximately $7.3 million were extended with variable rates averaging 5.43% and approximately $780,000 extended at fixed rates averaging 4.36% . Generally, commitments were due to expire within approximately 90 days. Additionally, at December 31, 2018 , the Corporation was committed for approximately $124.7 million of unused lines of credit, consisting of $31.8 million relating to a home equity line of credit program and an unsecured line of credit program, $3.9 million relating to an unsecured overdraft protection program, and $89.0 million relating to commercial and construction lines of credit. Amounts drawn on the unused lines of credit are predominantly assessed interest at rates which fluctuate with the base rate. Commitments under standby letters of credit were approximately $2.5 million at December 31, 2018 , of which $2.4 million expire within one year. Should any letter of credit be drawn on, the interest rate charged on the resulting note would fluctuate with the Corporation's base rate. 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 may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Corporation evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Corporation upon extension of credit, is based on management's credit evaluation of the borrower. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, and income-producing commercial properties. Standby letters of credit are conditional commitments issued by the Corporation to guarantee payment or performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Corporation obtains collateral supporting those commitments for which collateral is deemed necessary. Lease Commitments At December 31, 2018 , the minimum rental commitments on the noncancellable leases with an initial term of one year and expiring thereafter are as follows: Year Ended Minimum December 31, Rent (In thousands) 2019 $ 718 2020 657 2021 483 2022 454 2023 379 Thereafter 666 $ 3,357 Rental expense under long-term operating leases for branch offices amounted to approximately $888,000 and $873,000 during the years ended December 31, 2018 and 2017 , respectively. Rental income was approximately $36,000 and $36,000 for the years ended December 31, 2018 and 2017 , respectively. Contingencies The Corporation is also subject to litigation which arises primarily in the ordinary course of business. In the opinion of management the ultimate disposition of such litigation should not have a material adverse effect on the financial position of the Corporation. |
INTEREST RATE SWAP
INTEREST RATE SWAP | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
INTEREST RATE SWAP | INTEREST RATE SWAP The Corporation utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swap does not represent an amount exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements. Interest Rate Swap Designated as Cash Flow Hedge : During the second quarter of 2017, the Corporation entered into a forward-starting interest rate swap with an effective date of December 18, 2017 and a notional amount of $7.0 million . This swap was designated as a cash flow hedge of the Subordinated Debentures (See Note 8 to the Consolidated Financial Statements). In addition, during the second quarter of 2018, the Corporation entered into two forward-starting interest rate swaps with an effective date of September 1, 2018 and notional amount of $10.0 million each. These swaps were designated as cash flow hedges of money market deposit accounts whose interest rate is tied to the Effective Federal Funds Rate. All of the swaps were determined to be highly effective during the years ended December 31, 2018 and 2017 . As such, no amount of ineffectiveness has been included in net income per ASU 2017-12. Therefore, the aggregate fair value of the swaps is recorded in other assets (liabilities) with changes in fair value recorded in other comprehensive income (loss). The amount included in accumulated other comprehensive income (loss) would be reclassified to current earnings should the hedge no longer be considered effective. In addition, interest expense on the swaps is reclassified and reported as a component of interest expense as incurred. Summary information as of December 31, 2018 and 2017 about the interest swaps designated as cash flow hedges are as follows: As of December 31, 2018 Notional Amount Unrealized Gain / (Loss) Fixed Pay Rate Floating Receive Rate Maturity Date (Dollars in thousands) Interest rate swaps by effective date December 18, 2017 $ 7,000 $ 134 5.323 % 3 month LIBOR plus 2.95% June 17, 2027 September 1, 2018 10,000 (84 ) 2.607 % Federal Funds Rate August 31, 2021 September 1, 2018 10,000 (162 ) 2.615 % Federal Funds Rate August 31, 2023 $ 27,000 $ (112 ) As of December 31, 2017 Notional Amount Unrealized Loss Fixed Pay Rate Floating Receive Rate Maturity Date (Dollars in thousands) Interest rate swaps by effective date December 18, 2017 $ 7,000 $ (29 ) 5.323 % 3 month LIBOR plus 2.95% June 17, 2027 $ 7,000 $ (29 ) The Corporation has secured the interest rate swaps by pledging investment securities with a fair value of $170,000 at both December 31, 2018 and 2017 . The net expense recorded on the swap transactions totaled $46,000 and $2,000 for the years ended December 31, 2018 and 2017 , respectively, and is reported as a component of interest expense on Deposits and Subordinated Debentures and Subordinated Notes, as appropriate. There are no netting arrangements for any of the interest rate swaps. The fair value of the interest rate swaps in the amount of $134,000 were included in other assets on the Consolidated Statements of Financial Condition at December 31, 2018 . The fair value of the interest rate swap in the amount of ($246,000) and ($29,000) at December 31, 2018 and 2017 , respectively, were included in accrued expenses and other liabilities on the Consolidated Statements of Financial Condition. The following table presents the after tax net gains recorded in accumulated other comprehensive income and the Consolidated Statements of Income relating to the cash flow derivative instruments for the periods indicated. Year Ended December 31, 2018 Amount of Gain (Loss) Recognized in OCI (Effective Portion) Amount of Gain (Loss) Reclassified from OCI to Interest Expense Amount of Gain (Loss) Recognized in Other Noninterest Income (Ineffective Portion) (In thousands) Interest rate swaps by effective date December 18, 2017 $ 119 $ (16 ) $ — September 1, 2018 (60 ) (15 ) — September 1, 2018 (115 ) (15 ) — Total $ (56 ) $ (46 ) $ — Year Ended December 31, 2017 Amount of Gain (Loss) Recognized in OCI (Effective Portion) Amount of Gain (Loss) Reclassified from OCI to Interest Expense Amount of Gain (Loss) Recognized in Other Noninterest Income (Ineffective Portion) (In thousands) Interest rate swaps by effective date December 18, 2017 $ (21 ) $ — $ — Total $ (21 ) $ — $ — |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair value: Level 1: Quoted prices (unadjusted) or identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. Assets and Liabilities Measured on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis are summarized below: Fair Value Measurements Using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2018 (In thousands) Assets: Available-for-sale securities U.S. government - sponsored agencies $ 25,749 $ — $ 25,749 $ — Obligations of state and political subdivisions 3,121 — 3,121 — Mortgage-backed securities 62,163 — 62,163 — Asset-backed securities 4,922 — 4,922 — Corporate bonds 12,856 — 12,856 — Total available-for-sale securities $ 108,811 $ — $ 108,811 $ — Other equity investments $ 1,648 $ 1,588 $ 60 $ — Interest Rate Swap $ 134 $ — $ 134 $ — Liabilities: Interest rate swap $ 246 $ — $ 246 $ — Fair Value Measurements Using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2017 (In thousands) Assets: Available-for-sale securities U.S. government - sponsored agencies $ 21,333 $ — $ 21,333 $ — Obligations of state and political subdivisions 3,165 — 3,165 — Mortgage-backed securities 63,834 — 63,834 — Asset-backed securities 6,698 — 6,698 — Corporate bonds 14,229 — 14,229 — Total available-for-sale securities $ 109,259 $ — $ 109,259 $ — Other equity investments $ 3,756 $ 3,696 $ 60 $ — Liabilities: Interest rate swap $ 29 $ — $ 29 $ — There were no transfers of assets between Level 1 and Level 2 during the years ended December 31, 2018 and 2017 . There were no changes to the valuation techniques for fair value measurements as of December 31, 2018 and 2017 . The fair values of investment securities are determined by quoted market prices, if available (Level 1). If quoted prices are not available, fair values of investment securities are determined by matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). The Corporation performs quarterly analyses on the prices received from the pricing service to determine whether the prices are reasonable estimates of fair value. Specifically, the Corporation compares the prices received from the pricing service to a secondary pricing source. The Corporation’s internal price verification procedures have not historically resulted in adjustment in the prices obtained from the pricing service. Other equity investments primarily represent a Community Reinvestment Act (CRA) mutual fund investment. The interest rate swaps are reported at fair values obtained from brokers who utilize internal models with observable market data inputs to estimate the values of these instruments (Level 2 inputs). Assets and Liabilities Measured on a Non-Recurring Basis Assets and liabilities measured at fair value on a non-recurring basis are summarized below: Fair Value Measurements Using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2018 (In thousands) Assets: Impaired loans Commercial: Secured by real estate $ 301 $ — $ — $ 301 Residential real estate 308 — — 308 Total Assets $ 609 $ — $ — $ 609 Fair Value Measurements Using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2017 (In thousands) Assets: Impaired loans Commercial: Secured by real estate $ 109 $ — $ — $ 109 Commercial real estate 192 — — 192 Residential real estate 296 — — 296 Total Assets $ 597 $ — $ — $ 597 Collateral-dependent impaired loans measured for impairment using the fair value of the collateral had a recorded investment value of $692,000 , resulting in an increase of the allocation for loan losses of $83,000 for the year ended December 31, 2018 . Collateral-dependent impaired loans measured for impairment using the fair value of the collateral had a recorded investment value of $624,000 , resulting in an increase of the allocation for loan losses of $27,000 for the year ended December 31, 2017 . There was no OREO at December 31, 2018 or 2017 . The Corporation does not record loans at fair value on a recurring basis. However, from time to time, the Corporation records non-recurring fair value adjustments to collateral dependent loans to reflect impairment. The Corporation measures impairment of collateralized loans based on the estimated fair value of the collateral less estimated costs to sell the collateral, incorporating assumptions that experienced parties might use in estimating the value of such collateral (Level 3 inputs). At the time a loan is considered impaired, it is valued at the lower of cost or fair value. Generally, impaired loans carried at fair value have been partially charged-off or receive specific allocations of the allowance for loan losses. For collateral dependent loans, fair value is commonly based on real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. In the appraisal process, the independent appraiser routinely adjusts for differences between the comparable sales and income data available. Such adjustments typically result in a Level 3 classification of the inputs for determining fair value. Methods for valuing non-real estate collateral include using an appraisal, the net book value recorded for the collateral on the borrower’s financial statements, or aging reports. Collateral is then adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the borrower and borrower’s business, resulting in a Level 3 fair value classification. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly. Appraisals are generally obtained to support the fair value of collateral. Appraisals for collateral-dependent impaired loans are performed by licensed appraisers whose qualifications and licenses have been reviewed and verified by the Corporation. The Corporation utilizes a third party to order appraisals and, once received, reviews the assumptions and approaches utilized in the appraisal as well as the resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Real estate appraisals typically incorporate measures such as recent sales prices for comparable properties. Appraisers may make adjustments to the sales price of the comparable properties as deemed appropriate based on the age, condition or general characteristics of the subject property. Management generally applies a 12% discount to real estate appraised values to cover disposition / selling costs and to reflect the potential price reductions in the market necessary to complete an expedient sale transaction and to factor in the impact of the perception that a transaction being completed by a bank may result in further price reduction pressure. For the Level 3 assets measured at fair value on a non-recurring basis, the significant unobservable inputs used in the fair value measurements were as follows: December 31, 2018 Assets Fair Value Valuation Technique Unobservable Inputs Range (Dollars in thousands) Impaired loans $ 609 Comparable real estate sales and / or the income approach. Adjustments for differences between comparable sales and income data available. 5% Estimated selling costs. 7% December 31, 2017 Assets Fair Value Valuation Technique Unobservable Inputs Range (Dollars in thousands) Impaired loans $ 597 Comparable real estate sales and / or the income approach. Adjustments for differences between comparable sales and income data available. 5% Estimated selling costs. 7% Fair value estimates for the Corporation’s financial instruments are summarized below: Fair Value Measurements Using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2018 (In thousands) Financial assets: Cash and cash equivalents $ 16,823 $ 16,823 $ — $ — Securities available-for-sale 108,811 — 108,811 — Securities held-to-maturity 62,308 — 60,997 — Other Equity Investments 1,648 1,588 60 — FHLB-NY stock 3,965 N/A N/A N/A Loans, net 725,404 — — 704,273 Interest rate swap 134 — 134 — Financial liabilities: Deposits 782,091 578,460 201,846 — FHLB-NY advances 65,700 — 65,477 — Subordinated Debentures and Subordinated Notes 23,382 — — 23,441 Interest rate swap 246 — 246 — Fair Value Measurements Using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2017 (In thousands) Financial assets: Cash and cash equivalents $ 21,270 $ 21,270 $ — $ — Securities available-for-sale 109,259 — 109,259 — Securities held-to-maturity 52,442 — 51,551 — Other equity investments 3,756 3,696 60 — FHLB-NY stock 3,715 N/A N/A N/A Mortgage loans held for sale 370 — — 370 Loans, net 702,561 — — 714,387 Financial liabilities: Deposits 764,099 565,292 197,696 — FHLB-NY advances 63,760 — 63,340 — Subordinated Debentures and Subordinated Notes 23,317 — — 23,478 Interest rate swap 29 — 29 — The following methods and assumptions were used to estimate the fair value of financial instruments recorded at fair value on a recurring or non-recurring basis not previously described: Cash and cash equivalents – The carrying amount approximates fair value and is classified as Level 1. FHLB-NY stock – It is not practicable to determine the fair value of FHLB-NY stock due to restrictions placed on the transferability of the stock. Mortgage loans held for sale – Loans in this category have been committed for sale to third party investors at the current carrying amount resulting in a Level 3 classification. Loans, net – Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as residential and commercial mortgages, commercial and other installment loans. Fair value of loans at December 31, 2018 is based on an exit price model as required by ASU 2016-01 taking into account inputs such as probability of default and loss given default assumptions. As of December 31, 2017, the fair value of loans is estimated by discounting cash flows using estimated market discount rates which reflect the credit and interest rate risk inherent in the loans resulting in a Level 3 classification. Fair values estimated in this manner do not fully incorporate an exit-price approach to fair value, but instead are based on a comparison to current market rates for comparable loans. Deposits – The fair value of deposits, with no stated maturity, such as noninterest-bearing demand deposits, savings, NOW and money market accounts, is equal to the amount payable on demand resulting in a Level 1 classification. The fair value of certificates of deposit is based on the discounted value of cash flows resulting in a Level 2 classification. The discount rate is estimated using market discount rates which reflect interest rate risk inherent in the certificates of deposit. Fair values estimated in this manner do not fully incorporate an exit-price approach to fair value, but instead are based on a comparison to current market rates for comparable deposits. FHLB-NY advances – With respect to FHLB-NY borrowings, the fair value is based on the discounted value of cash flows. The discount rate is estimated using market discount rates which reflect the interest rate risk and credit risk inherent in the term borrowings resulting in a Level 2 classification. Subordinated Debentures and Subordinated Notes – The fair value of the Subordinated Debentures and the Subordinated Notes (see Note 8) is based on the discounted value of the cash flows. The discount rate is estimated using market rates which reflect the interest rate and credit risk inherent in the Subordinated Debentures and the Subordinated Notes resulting in a Level 3 classification. Interest rate swap – The fair value of derivatives, which is included in Accrued Expenses and Other Liabilities on the Consolidated Statements of Financial Condition, are based on valuation models using observable market data as of the measurement date (Level 2). Commitments to extend credit – The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present credit worthiness of the counter parties. At December 31, 2018 and 2017 the fair value of such commitments were not material. Limitations The preceding fair value estimates were made at December 31, 2018 and 2017 based on pertinent market data and relevant information concerning the financial instruments. These estimates do not include any premiums or discounts that could result from an offer to sell at one time the Corporation's entire holdings of a particular financial instrument or category thereof. Since no market exists for a substantial portion of the Corporation's financial instruments, fair value estimates were necessarily based on judgments with respect to future expected loss experience, current economic conditions, risk assessments of various financial instruments, and other factors. Given the subjective nature of these estimates, the uncertainties surrounding them and the matters of significant judgment that must be applied, these fair value estimates cannot be calculated with precision. Modifications in such assumptions could meaningfully alter these estimates. Since these fair value approximations were made solely for on- and off-balance sheet financial instruments at December 31, 2018 and 2017 , no attempt was made to estimate the value of anticipated future business. Furthermore, certain tax implications related to the realization of unrealized gains and losses could have a substantial impact on these fair value estimates and have not been incorporated into the estimates. |
PARENT COMPANY ONLY
PARENT COMPANY ONLY | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
PARENT COMPANY ONLY | PARENT COMPANY ONLY The Corporation was formed in January 1995 as a bank holding company to operate its wholly-owned subsidiary, the Bank. The earnings of the Bank are recognized by the Corporation using the equity method of accounting. Accordingly, the Bank dividends paid reduce the Corporation's investment in the subsidiary. Condensed financial statements are presented below: Condensed Statements of Financial Condition December 31, 2018 2017 (In thousands) Assets Cash and due from banks $ 750 $ 378 Securities available-for-sale 3,877 3,911 Investment in subsidiary 97,861 91,689 Accrued interest receivable 21 21 Other assets 1,458 1,435 Total assets $ 103,967 $ 97,434 Liabilities and Shareholders' equity Subordinated Debentures $ 7,217 $ 7,217 Subordinated Notes 16,165 16,100 Other liabilities 435 452 Shareholders' equity 80,150 73,665 Total liabilities and Shareholders' equity $ 103,967 $ 97,434 Condensed Statements of Income and Comprehensive Income Years Ended December 31, 2018 2017 (In thousands) Interest income - securities available-for-sale $ 94 $ 76 Dividend income 2,700 2,218 Other income 11 10 Total income 2,805 2,304 Interest expense 1,575 1,492 Other expenses 351 354 Total expenses 1,926 1,846 Income before income tax benefit 879 458 Tax benefit (381 ) (597 ) Income before equity in undistributed earnings of subsidiary 1,260 1,055 Equity in undistributed earnings of subsidiary 6,770 2,892 Net income 8,030 3,947 Equity in other comprehensive income (loss) (715 ) 160 Total comprehensive income $ 7,315 $ 4,107 Condensed Statements of Cash Flows Years Ended December 31, 2018 2017 (In thousands) Cash flows from operating activities: Net income $ 8,030 $ 3,947 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed earnings of subsidiary (6,770 ) (2,892 ) Amortization of Subordinated Notes issuance cost 65 65 Restricted stock-forfeited (122 ) — Gain on calls of securities — (1 ) Increase in accrued interest receivable — (11 ) Decrease (increase) in other assets 92 (139 ) Increase in other liabilities 4 18 Net cash provided by operating activities 1,299 987 Cash flows from investing activities: Purchase of securities available-for-sale — (2,999 ) Proceeds from calls on securities available-for-sale — 500 Proceeds from maturities on securities available-for-sale — 500 Investment in subsidiary bank — (16,800 ) Net cash used in investing activities — (18,799 ) Cash flows from financing activities: Proceeds from issuance of common stock, net of costs — 18,860 Restricted stock-forfeited — (135 ) Cash dividends paid on common stock (1,040 ) (961 ) Payment of discount on dividend reinvestment plan (4 ) (5 ) Issuance of common stock 117 167 Net cash provided by (used in) financing activities (927 ) 17,926 Net decrease in cash and cash equivalents 372 114 Cash and cash equivalents - beginning 378 264 Cash and cash equivalents - ending $ 750 $ 378 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | ACCUMULATED OTHER COMPREHENSIVE INCOME The components of comprehensive income, both gross and net of tax, are presented for the periods below: Years Ended December 31, 2018 December 31, 2017 Gross Tax Effect Net Gross Tax Effect Net (In thousands) Net income $ 11,050 $ (3,020 ) $ 8,030 $ 8,723 $ (4,776 ) $ 3,947 Other comprehensive income: Change in unrealized holding gains (losses) on securities available-for-sale (1,020 ) 343 (677 ) 241 (91 ) 150 Reclassification adjustment for gains in net income (6 ) 2 (4 ) (1 ) — (1 ) Accretion of loss on securities reclassified to held-to-maturity 27 (5 ) 22 46 (18 ) 28 Change in fair value of interest rate swap (128 ) 40 (88 ) (31 ) 12 (19 ) Reclassification adjustment for interest rate swap interest expense in net income 46 (14 ) 32 2 — 2 Total other comprehensive income (1,081 ) 366 (715 ) 257 (97 ) 160 Total comprehensive income $ 9,969 $ (2,654 ) $ 7,315 $ 8,980 $ (4,873 ) $ 4,107 The Corporation, in accordance with ASU No. 2018-02, elected to reclassify the income tax effects of the Tax Act from accumulated other comprehensive income (loss) to retained earnings for the year ended December 31, 2017. The following table presents the components of accumulated other comprehensive income (loss), net of tax, for the years ended December 31, 2018 and 2017 , including the reclassification of income tax effects due to the adoption of ASU No. 2018-02 for the year ended December 31, 2017. Year Ended December 31, 2018 Components of Accumulated Other Comprehensive Income Total Unrealized Gains / (Losses) on Available-for-Sale (AFS) Securities Loss on Securities Reclassified from Available-for-Sale to Held-to- Maturity Unrealized Gains / (Losses) on Derivatives Accumulated Other Comprehensive Income (Loss) (In thousands) Balance at December 31, 2017 $ (1,303 ) $ (60 ) $ (21 ) $ (1,384 ) Other comprehensive income (loss) before reclassifications (677 ) 22 (88 ) (743 ) Amounts reclassified from other comprehensive income (4 ) — 32 28 Other comprehensive income (loss), net (681 ) 22 (56 ) (715 ) Reclassification due to the adoption of ASU No. 2016-01 163 — — 163 Balance at December 31, 2018 $ (1,821 ) $ (38 ) $ (77 ) $ (1,936 ) Year Ended December 31, 2017 Components of Accumulated Other Comprehensive Income Total Unrealized Gains / (Losses) on Available-for-Sale (AFS) Securities Loss on Securities Reclassified from Available-for-Sale to Held-to- Maturity Unrealized Gains / (Losses) on Derivatives Accumulated Other Comprehensive Income (Loss) (In thousands) Balance at December 31, 2016 $ (1,243 ) $ (78 ) $ — $ (1,321 ) Other comprehensive income (loss) before reclassifications 150 28 (19 ) 159 Amounts reclassified from other comprehensive income (1 ) — 2 1 Other comprehensive income, net 149 28 (17 ) 160 Reclassification of tax effects due to the adoption of ASU No. 2018-02 (209 ) (10 ) (4 ) (223 ) Balance at December 31, 2017 $ (1,303 ) $ (60 ) $ (21 ) $ (1,384 ) The following table presents amounts reclassified from each component of accumulated other comprehensive income on a gross and net of tax basis for the years ended December 31, 2018 and 2017 . Years Ended Components of Accumulated Other December 31, Income Statement Comprehensive Income (Loss) 2018 2017 Line Item (In thousands) Unrealized gains on AFS securities before tax $ 6 $ 1 Gains on securities transactions, net Tax effect (2 ) — Total, net of tax 4 1 Unrealized losses on derivatives before tax (46 ) (2 ) Interest expense on derivatives Tax effect 14 — Total, net of tax (32 ) (2 ) Total reclassifications, net of tax $ (28 ) $ (1 ) |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Effective January 1, 2018, the Corporation adopted ASU No. 2014-09 (Topic 606) and all subsequent ASUs that modified Topic 606. For further details on Topic 606 see Note 1 - “Significant Accounting Policies - Adoption of New Accounting Standards”. The adoption of Topic 606 did not have any impact on the measurement or recognition of revenue as it does not apply to revenue associated with financial instruments, including revenue from loans and investment securities, which is the Corporation's primary source of revenue. In addition, certain non-interest income streams such as income on bank owned life insurance, gains on securities, and other non-interest income are not in the scope of the guidance. The Corporation’s revenue streams that are within the scope of Topic 606 include service charges on deposit accounts, ATM and card interchange fees, and investment services fees. However, the revenue recognition of these revenue streams did not change upon adoption of Topic 606 as our customer contracts generally do not have performance obligations and fees are assessed and collected as the transaction occurs. The following table summarizes non-interest income for the periods indicated (in thousands): For the Years Ended December 31, 2018 2017 (In thousands) Noninterest income In-scope of Topic 606: Banking service charges and other fees: Overdrafts $ 728 $ 671 Interchange 696 646 Other 763 745 Total banking service charges and other fees 2,187 2,062 Miscellaneous 424 416 Total in-scope noninterest income 2,611 2,478 Total out-of-scope noninterest income 806 829 Total noninterest income $ 3,417 $ 3,307 Service Charges on Deposit Accounts: The Corporation earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Corporation fulfills the customer's request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Corporation satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer's account balance. Interchange Income: The Corporation earns interchange fees from debit cardholder transactions conducted through the Mastercard payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. Other: The Corporation earns other service charges such as minimum balance fees, stop payment charges, wire transfer fees and fees for utilizing online bill pay payment. These fees are either recognized at the time the service is rendered or monthly. Miscellaneous: The Corporation earns income from checkbook income, safe deposit box rental income, and referral fee income related to credit cards and merchant services. These fees are either recognized at the time the service is rendered or monthly. Out-of-scope non-interest income primarily consists of Bank-owned life insurance along with gains and losses on the call and sale of securities, gains and losses on the sale of loans and other real estate, and loan servicing fees. None of these revenue streams are subject to the requirements of Topic 606. |
QUARTERLY FINANCIAL DATA (Unaud
QUARTERLY FINANCIAL DATA (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL DATA (Unaudited) | QUARTERLY FINANCIAL DATA (Unaudited) The following table contains quarterly financial data for the years ended December 31, 2018 and 2017 . Year Ended December 31, 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Total (In thousands, except per share amounts) Interest income $ 8,539 $ 8,868 $ 9,215 $ 9,377 $ 35,999 Interest expense 1,716 1,860 2,013 2,247 7,836 Net interest income before provision for loan losses 6,823 7,008 7,202 7,130 28,163 Provision for loan losses (335 ) (780 ) (490 ) (10 ) (1,615 ) Net interest income after provision for loan losses 7,158 7,788 7,692 7,140 29,778 Noninterest income 725 859 837 996 3,417 Noninterest expenses 5,428 5,504 5,554 5,659 22,145 Income before income tax expense 2,455 3,143 2,975 2,477 11,050 Income tax expense 647 842 813 718 3,020 Net income $ 1,808 $ 2,301 $ 2,162 $ 1,759 $ 8,030 Basic and diluted earnings per share $ 0.21 $ 0.27 $ 0.25 $ 0.20 $ 0.93 Year Ended December 31, 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Total (In thousands, except per share amounts) Interest income $ 7,424 $ 7,943 $ 8,400 $ 8,463 $ 32,230 Interest expense 1,244 1,409 1,577 1,628 5,858 Net interest income before provision for loan losses 6,180 6,534 6,823 6,835 26,372 Provision for loan losses 300 260 20 75 655 Net interest income after provision for loan losses 5,880 6,274 6,803 6,760 25,717 Noninterest income 799 813 845 850 3,307 Noninterest expenses 5,114 5,083 5,036 5,068 20,301 Income before income tax expense 1,565 2,004 2,612 2,542 8,723 Income tax expense 574 736 972 2,494 4,776 Net income $ 991 $ 1,268 $ 1,640 $ 48 $ 3,947 Basic and diluted earnings per share $ 0.16 $ 0.16 $ 0.19 $ 0.01 $ 0.50 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of operations and principles of consolidation | Nature of operations and principles of consolidation The consolidated financial statements include the accounts of Stewardship Financial Corporation and its wholly owned subsidiary, Atlantic Stewardship Bank (“the Bank”), together referred to as “the Corporation”. The Bank includes its wholly-owned subsidiaries, Stewardship Investment Corporation (whose primary business is to own and manage an investment portfolio), Stewardship Realty LLC (whose primary business is to own and manage property at 612 Godwin Avenue, Midland Park, New Jersey), Atlantic Stewardship Insurance Company, LLC (whose primary business is insurance) and several other subsidiaries formed to hold title to properties acquired through foreclosure or deed in lieu of foreclosure. The Bank’s subsidiaries have an insignificant impact on the daily operations. All intercompany accounts and transactions are eliminated in the consolidated financial statements. Certain prior period amounts have been reclassified to conform with the current year presentation. The Corporation provides financial services through the Bank’s offices in Bergen, Passaic, and Morris Counties, New Jersey. Its primary deposit products are checking, savings, and term certificate accounts, and its primary lending products are commercial, residential mortgage 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 generated from the operations of businesses. There are no significant concentrations of loans to any one industry or customer. The Corporation’s lending activities are concentrated in loans secured by real estate located in northern New Jersey and, therefore, collectability of the loan portfolio is susceptible to changes in real estate market conditions in the northern New Jersey market. The Corporation has not made loans to borrowers outside the United States. |
Basis of consolidated financial statements presentation | Basis of consolidated financial statements presentation The consolidated financial statements of the Corporation have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). In preparing the financial statements, management is required to make estimates and assumptions, based on available information, that affect the amounts reported in the financial statements and the disclosures provided. The estimate of the allowance for loan losses and the valuation of deferred tax assets are particularly critical because they involve a higher degree of complexity and subjectivity and require estimates and assumptions about highly uncertain matters. Actual results may differ from those estimates and assumptions. The current economic environment has increased the degree of uncertainty inherent in these material estimates. |
Cash flows | Cash flows Cash and cash equivalents include cash and deposits with other financial institutions and interest-bearing deposits in other banks with original maturities under 90 days. Net cash flows are reported for customer loan and deposit transactions, and short term borrowings and securities sold under agreement to repurchase. |
Securities available-for-sale and held to maturity and Other Equity Investments | Securities available-for-sale and held-to-maturity The Corporation classifies its securities as held-to-maturity or available-for-sale. Investments in debt securities that the Corporation has the positive intent and ability to hold to maturity are classified as securities held-to-maturity and are carried at amortized cost. All other securities are classified as securities available-for-sale. Securities available-for-sale may be sold prior to maturity in response to changes in interest rates or prepayment risk, for asset/liability management purposes, or other similar factors. These securities are carried at fair value with unrealized holding gains or losses reported in a separate component of shareholders’ equity, net of the related tax effects. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments except for mortgage-backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: (1) OTTI related to credit loss, which must be recognized in the income statement and (2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. Other Equity Investments The Corporation carried other equity investments at fair value with unrealized holding gains or losses reported through the Consolidated Statement of Income beginning January 1, 2018 with the adoption of ASU No. 2016-01, "Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Liabilities. Prior to the adoption of ASU No. 2016-01, the unrealized holding gains or losses reported in a component of shareholders' equity, net of the related tax effects. Cash dividends are reported as income when declared. |
Federal Home Loan Bank ("FHLB") Stock | Federal Home Loan Bank (“FHLB”) Stock The Bank is a member of the FHLB system. Members are required to own a certain amount of FHLB stock based on their level of borrowings and other factors. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on the ultimate recovery of par value. Cash dividends are reported as income when declared. |
Loans held for sale | Loans held for sale Loans held for sale generally represent mortgage loans originated and intended for sale in the secondary market, which are carried at the lower of cost or fair value on an aggregate basis. Mortgage loans held for sale are carried net of deferred fees, which are recognized as income at the time the loans are sold to permanent investors. Gains or losses on the sale of mortgage loans held for sale are recognized at the settlement date and are determined by the difference between the net proceeds and the carrying value. All loans are generally sold with loan servicing rights released to the buyer. |
Loans | Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal amount outstanding, net of deferred loan fees and costs and an allowance for loan losses. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments. The recorded investment in loans represents the outstanding principal balance after charge-offs and does not include accrued interest receivable as the inclusion is not significant to the reported amounts. Interest income on loans is discontinued at the time the loan is 90 days delinquent unless the loan is well secured and in process of collection. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or are charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to an accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. |
Allowance for loan losses | Allowance for loan losses The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the collectability of the full loan balance is in doubt. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off. The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired. In addition, the allowance contains an unallocated reserve amount to cover inherent imprecision of the overall loss estimation process. Due to the complexity in determining the estimated amount of allowance for loan losses, these unallocated reserves reflect management's attempt to ensure that the overall allowance reflects an appropriate level of reserves. A loan is considered impaired when, based on current information and events, it is probable that the Corporation will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Loans for which the terms have been modified and for which the borrower is experiencing financial difficulties are considered troubled debt restructuring and classified as impaired. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the fair value of the note, or the fair value of the collateral if the loan is collateral-dependent. Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans are collectively evaluated for impairment and, accordingly, they are not separately identified for impairment disclosures. Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the lower of the recorded investment or fair value of the collateral. For troubled debt restructurings that subsequently default, the Corporation determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses. The general component of the allowance is based on historical loss experience, including an appropriate loss emergence period, adjusted for qualitative factors. The historical loss experience is determined for each portfolio segment and class, and is based on the actual loss history experienced by the Corporation over the most recent five years. The Bank prepares an analysis for each portfolio segment, which examines the historical loss experience as well as the loss emergence period. The analysis is updated quarterly for the purpose of determining the assigned allocation factors which are essential components of the allowance for loan losses calculation. This actual loss experience is supplemented with other qualitative factors based on the risks present for each portfolio segment or class. These qualitative factors include consideration of the following: levels of and trends in charge-offs; levels of and trends in delinquencies and impaired loans; levels and trends in loan size; levels of real estate concentrations; national and local economic trends and conditions; the depth and experience of lending management and staff; and other changes in lending policies, procedures, and practices. For purposes of determining the allowance for loan losses, loans in the portfolio are segregated by type into the following segments: commercial, commercial real estate, construction, residential real estate, consumer and other. The Corporation also sub-divides these segments into classes based on the associated risks within those segments. Commercial loans are divided into the following two classes: secured by real estate and other. Construction loans are divided into the following two classes: commercial and residential. Consumer loans are divided into two classes: secured by real estate and other. The models and assumptions used to determine the allowance require management’s judgment. Assumptions, data and computations are appropriately reviewed and properly documented. The risk characteristics of each of the identified portfolio segments are as follows: Commercial – Commercial loans are generally of higher risk and typically are made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business. As a result, the availability of funds for the repayment of commercial loans may depend substantially on the success of the business itself. Furthermore, any collateral securing such loans may depreciate over time, may be difficult to appraise and may fluctuate in value. Commercial Real Estate – Commercial real estate loans are secured by multi-family and nonresidential real estate and generally have larger balances and generally are considered to involve a greater degree of risk than residential real estate loans. Commercial real estate loans depend on the global cash flow analysis of the borrower and the net operating income of the property, the borrower’s expertise, credit history and profitability, and the value of the underlying property. Of primary concern in commercial real estate lending is the borrower’s creditworthiness and the cash flow from the property. Payments on loans secured by income producing properties often depend on successful operation and management of the properties. As a result, repayment of such loans may be subject, to a greater extent than residential real estate loans, to adverse conditions in the real estate market or the economy. Commercial real estate is also subject to adverse market conditions that cause a decrease in market value or lease rates, obsolescence in location or function and market conditions associated with oversupply of units in a specific region. Construction – Construction financing is generally considered to involve a higher degree of risk of loss than long-term financing on improved, occupied real estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the property’s value at completion of construction and the estimated cost of construction. During the construction phase, a number of factors could result in delays and cost overruns. If the estimate of construction costs proves to be inaccurate, additional funds may be required to be advanced in excess of the amount originally committed to permit completion of the building. If the estimate of value proves to be inaccurate, the value of the building may be insufficient to assure full repayment if liquidation is required. If foreclosure is required on a building before or at completion due to a default, there can be no assurance that all of the unpaid balance of, and accrued interest on, the loan as well as related foreclosure and holding costs will be recovered. Residential Real Estate – Residential real estate loans are generally made on the basis of the borrower’s ability to make repayment from his or her employment income or other income, and which are secured by real property whose value tends to be more easily ascertainable. Repayment of residential real estate loans is subject to adverse employment conditions in the local economy leading to increased default rate and decreased market values from oversupply in a geographic area. In general, residential real estate loans depend on the borrower’s continuing financial stability and, therefore, are likely to be adversely affected by various factors, including job loss, divorce, illness or personal bankruptcy. Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans. Consumer loans – Consumer loans secured by real estate may entail greater risk than residential mortgage loans due to a lower lien position. In addition, other consumer loans, particularly loans secured by assets that depreciate rapidly, such as motor vehicles, are subject to greater risk. In all cases, collateral for a defaulted consumer loan may not provide an adequate source of repayment for the outstanding loan and a small remaining deficiency often does not warrant further substantial collection efforts against the borrower. Consumer loan collections depend on the borrower’s continuing financial stability and, therefore, are likely to be adversely affected by various factors, including job loss, divorce, illness or personal bankruptcy. Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans. Generally, when it is probable that some portion or all of a loan balance will not be collected, regardless of portfolio segment, that amount is charged-off as a loss against the allowance for loan losses. On loans secured by real estate, the charge-offs reflect partial writedowns due to the initial valuation of market values of the underlying real estate collateral in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 310-40. Consumer loans are generally charged-off in full when they reach 90 – 120 days past due. |
Transfers of Financial Assets | Transfers of Financial Assets Transfers of financial assets are accounted for as sales, when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Corporation, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Corporation does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. |
Premises and equipment | Premises and equipment Land is stated at cost. Buildings and improvements and furniture, fixtures and equipment are stated at cost, less accumulated depreciation computed on the straight-line method over the estimated lives of each type of asset. Estimated useful lives are three to forty years for buildings and improvements and three to twenty-five years for furniture, fixtures and equipment. Leasehold improvements are stated at cost less accumulated amortization computed on the straight-line method over the shorter of the term of the lease or useful life. |
Long-Term Assets | Long-Term Assets Premises and equipment and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recovered from future undiscounted cash flows. If impaired, the assets are recorded at fair value. |
Bank owned life insurance | Bank owned life insurance The Corporation has purchased life insurance policies on certain key officers. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. |
Dividend Reinvestment Plan | Dividend Reinvestment Plan The Corporation offers shareholders the opportunity to participate in a dividend reinvestment plan. Plan participants may reinvest cash dividends to purchase new shares of stock at 95% of the market value, based on the most recent trades. Cash dividends due to the plan participants are utilized to acquire shares from either, or a combination of, the issuance of authorized shares or purchases of shares in the open market through an approved broker. The Corporation reimburses the broker for the 5% discount when the purchase of the Corporation’s stock is completed. The plan is considered to be non-compensatory. |
Stock-based compensation | Stock-based compensation Stock-based compensation cost is based on the fair value of the awards at the date of grant. The fair value of restricted stock awards is based upon the average of the high and low sale price reported for the Corporation’s common stock on the date of grant. Compensation cost is recognized for restricted stock over the required service period, generally defined as the vesting period. Restricted shares may be forfeited if the vesting requirements are not met. Forfeitures are recognized when they occur. |
Advertising Costs | Advertising Costs The Corporation expenses advertising costs as incurred. |
Income taxes | Income taxes The Corporation records income taxes in accordance with ASC 740, Income Taxes, as amended, using the asset and liability method. Accordingly, deferred tax assets and liabilities: (i) are recognized for the expected future tax consequences of events that have been recognized in the financial statements or tax returns; (ii) are attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases; and (iii) are measured using enacted tax rates expected to apply in the years when those temporary differences are expected to be recovered or settled. Where applicable, deferred tax assets are reduced by a valuation allowance for any portions determined not likely to be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period of enactment. The valuation allowance is adjusted, by a charge or credit to income tax expense, as changes in facts and circumstances warrant. Deferred tax assets and liabilities are reported as a component of other assets on the consolidated statements of financial condition. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Corporation recognizes interest and/or penalties related to income tax matters in income tax expense. |
Comprehensive income | Comprehensive income Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income includes unrealized gains and losses on securities available-for-sale, accretion of losses related to securities transferred from available-for-sale to held to maturity, and unrealized gains or losses on cash flow hedges, net of tax, which are also recognized as separate components of equity. |
Earnings per common share | Earnings per common share Basic earnings per common share is calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Common stock equivalents are not included in the calculation. Diluted earnings per share is computed similar to that of the basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potential dilutive common shares were issued. |
Loan Commitments and Related Financial Instruments | Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. |
Loss contingencies | Loss contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are such matters that will have a material effect on the financial statements. |
Dividend restriction | Dividend restriction Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to the Corporation or by the Corporation to its shareholders. The Corporation's ability to pay cash dividends is based, among other things, on its ability to receive cash from the Bank. Banking regulations limit the amount of dividends that may be paid without prior approval of regulatory agencies. Under these regulations, the amount of dividends that may be paid in any calendar year is limited to the current year's profits, combined with the retained net profits of the preceding two years. |
Derivatives | Derivatives Derivative financial instruments are recognized as assets or liabilities at fair value. The Corporation’s only free standing derivatives consist of interest rate swap agreements, which are used as part of its asset liability management strategy to help manage interest rate risk related to its deposits and Subordinated Debentures (see Note 8 to the Consolidated Financial Statements). The Corporation does not use derivatives for trading purposes. The Corporation designated the interest rate swaps as cash flow hedges, which is a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability. For a cash flow hedge, the change in the fair value on the derivative is reported in other comprehensive income (loss) and is reclassified into earnings in the same periods during which the hedged transaction affects earnings. Net cash settlements on these interest rate swaps that qualify for hedge accounting are recorded in interest expense. Changes in the fair value of derivatives that are not highly effective in hedging the changes in fair value or expected cash flows of the hedged items are recognized immediately in current earnings. The Corporation formally documented the risk-management objective and the strategy for undertaking the hedge transaction at the inception of the hedging relationship. The documentation includes linking the fair value of the cash flow hedge to the deposit or Subordinated Debentures on the balance sheet. The Corporation formally assessed, both at the hedge’s inception and on an ongoing basis, whether the interest rate swaps are highly effective in offsetting changes in cash flows of the deposits and Subordinated Debentures. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transactions are still expected to occur, gains or losses that would be accumulated in other comprehensive income are amortized into earnings over the same periods in which the hedged transactions will affect earnings. |
Fair value of financial instruments | Fair value of financial instruments Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. |
Segment Reporting | Segment Reporting The Corporation acts as an independent community financial services provider and offers traditional banking and related financial services to individual, business and government customer. Through its branches, automated teller machine networks, and internet banking services, the Corporation offers a full array of commercial and retail financial service, including time, savings and demand deposits; the making of commercial, consumer and mortgage loans; and the providing of other financial services. Management does not separately allocate expense, including the cost of funding loan demand, between the commercial, retail, mortgage and consumer banking operation of the Corporation. Accordingly, all significant operating decisions are based upon analysis of the Bank as one segment or unit. |
Subsequent Events | Subsequent Events The Corporation has evaluated events and transactions occurring subsequent to the balance sheet date of December 31, 2018 for items that should potentially be recognized or disclosed in these financial statements. |
Adoption of New Accounting Standards | Adoption of New Accounting Standards In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, "Revenue from Contracts with Customers (Topic 606)". The objective of this amendment is to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and International Financial Reporting Standards. This update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are in the scope of other standards. The ASU is effective for public business entities for financial statements issued for fiscal years beginning after December 15, 2017, and early adoption is permitted. Subsequently, the FASB issued the following standards related to ASU 2014-09: ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations;” ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing;” ASU 2016-11, “Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting;” ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients;” ASU 2016-20, "Technical Corrections and Improvements to Topic 606, Revenue Contracts with Customers;" ASU 2017-13, "Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments;" and ASU 2017-14, "Income Statement - Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606): Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 116 and SEC Release No. 33-10403." These amendments are intended to improve and clarify the implementation guidance of ASU 2014-09 and have the same effective date as the original standard. The Corporation’s implementation efforts include the identification of revenue within the scope of the guidance, as well as the evaluation of revenue contracts and the respective performance obligations within those contracts. We have evaluated the nature of our contracts with customers and determined that further disaggregation of revenue from contracts with customers into more granular categories beyond what is presented in the Condensed Consolidated Statement of Income was not necessary. We generally satisfy our performance obligations on contracts with customers as services are rendered, and the transaction prices are typically fixed and charged either on a periodic basis or based on activity. Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is little judgment involved in applying this ASU that significantly affect the determination of the amount and timing of the revenue from contracts with customers. The Corporation has completed its evaluation and adopted this ASU effective January 1, 2018 using the modified retrospective approach. Adoption of ASU 2014-09 did not have a material impact on our Consolidated Financial Statements and related disclosures as our primary sources of revenues are derived from interest and dividends earned on loans, securities and other financial instruments that are not within the scope of the new standard. Our revenue recognition pattern for revenue streams within the scope of the new standard, including but not limited to service charges on deposit accounts and debit card interchange, did not change significantly from prior practice. The modified retrospective method requires application of ASU 2014-09 to uncompleted contracts at the date of adoption, however, periods prior to the date of adoption have not been retrospectively revised as the impact of the new standard on uncompleted contracts as of the date of adoption was not material. As such, a cumulative effective adjustment to opening retained earnings was not deemed necessary. Additional disclosures required have been included in Note 19 - Revenue Recognition. In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Liabilities." This ASU addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This amendment supersedes the guidance to classify equity securities with readily determinable fair values into different categories, requires equity securities to be measured at fair value with changes in the fair value recognized through net income, and simplifies the impairment assessment of equity investments without readily determinable fair values. The amendment requires public business entities that are required to disclose the fair value of financial instruments measured at amortized cost on the balance sheet to measure that fair value using the exit price notion. The amendment requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option. The amendment requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements. The amendment reduces diversity in current practice by clarifying that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available for sale securities in combination with the entity’s other deferred tax assets. This amendment is effective for fiscal years, including interim periods, beginning after December 15, 2017. Entities should apply the amendment by means of a cumulative-effect adjustment as of the beginning of the fiscal year of adoption, with the exception of the amendment related to equity securities without readily determinable fair values, which should be applied prospectively to equity investments that exist as of the date of adoption. The Corporation's adoption of the guidance on January 1, 2018 resulted in the reclassification from accumulated other comprehensive income (loss) to retained earnings of $163,000 , reflected in the Consolidated Statements of Changes in Shareholders' Equity. In addition, the fair value of loans has been estimated using the exit price notion as described in Note 16 to the Consolidated Financial Statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Subtopic 842).” This ASU requires all lessees to recognize a lease liability and a right-of-use asset, measured at the present value of the future minimum lease payments, at the lease commencement date. Lessor accounting remains largely unchanged under the new guidance. The amendments in ASU 2016-02 are effective for fiscal years, including interim periods, beginning after December 15, 2018. Early adoption of ASU 2016-02 is permitted. Subsequently, the FASB issued the following standards related to ASU 2016-02: ASU 2017-13, "Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments;" ASU 2018-1, "Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842; ASU 2018-10, "Codification Improvements to Topic 842, Leases;" and ASU 2018-11, "Leases (Topic 842): Targeted Improvements." Based on the current lease portfolio, upon adoption of the new accounting standard, the Corporation anticipates recognizing a lease liability and related right-of-use asset on the Consolidated Statements of Financial Condition. Management is continuing to evaluate the Corporation's outstanding inventory of leases and determining the effect of recognizing operating leases on the Consolidated Statements of Financial Condition. The Corporation plans to adopt the modified retrospective approach under ASU 2018-11 in the first quarter of 2019. Based on the current composition of leases, at adoption, the Corporation is expected to record an estimated $3.3 million lease liability with a corresponding right-of-use asset on the Consolidated Statements of Financial Condition. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The main objective of this ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments by a reporting entity at each reporting date. The amendments in this ASU require financial assets measured at amortized cost to be presented at the net amount expected to be collected. The allowance for credit losses would represent a valuation account that would be deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. The income statement would 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 measurement of expected credit losses would be based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. An entity will be required to use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. The amendments in ASU 2016-13 are effective for fiscal years, including interim periods, beginning after December 15, 2019. Early adoption of this ASU is permitted for fiscal years beginning after December 15, 2018. The Corporation is currently evaluating the potential impact of ASU 2016-13 on the Corporation's consolidated financial statements. The Corporation has formed a working group, under the direction of the Chief Financial Officer, which is currently developing an implementation plan to include assessment of processes, portfolio segmentation, model development, system requirements and the identification of data and resource needs, among other things. Also, the Corporation is currently evaluating third-party vendor solutions to assist in the application of ASU 2016-13. The adoption of ASU 2016-13 may result in an increase in the allowance for loan losses due to changing from an "incurred loss" model, which encompasses allowances for current known and inherent losses within the portfolio, to an "expected loss" model, which encompasses allowances for losses expected to be incurred over the life of the portfolio. Furthermore, ASU 2016-13 will necessitate establishing an allowance for expected credit losses on debt securities. The Corporation has reviewed available historical data, preliminarily identified the appropriate loan pools and is in the process of reviewing loss rates. The completion of shadow calculations are expected in 2019. The Corporation is currently unable to reasonably estimate the impact of adopting ASU 2016-13, and it is expected that the impact of adoption will be significantly influenced by the composition, characteristics and quality of our loan and securities portfolios as well as the prevailing economic conditions and forecasts as of the adoption date. In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments." ASU 2016-15 addresses changes to reduce the presentation diversity of certain cash receipts and cash payments in the statement of cash flows, including debt prepayment or extinguishment costs, settlement of certain debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and distributions received from equity method investees. The guidance became effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The new standard should be applied retrospectively, but may be applied prospectively if retrospective application would be impracticable. The Company adopted this ASU on January 1, 2018 and the impact was not material on the financial statements. In March 2017, the FASB issued ASU 2017-08, "Premium Amortization on Purchased Callable Debt Securities (Subtopic 310-20)." The update shortens the amortization period for premiums on purchased callable debt securities to the earliest call date. The amendment will apply only to callable debt securities with explicit, noncontingent call features that are callable at fixed prices and on preset dates, apply to all premiums on callable debt securities, regardless of how they were generated, and require companies to reset the effective yield using the payment terms of the debt security if the call option is not exercised on the earliest call date. ASU 2017-08 does not require an accounting change for securities held at a discount. The discount continues to be amortized to maturity and does not apply when the investor has already incorporated prepayments into the calculation of its effective yield under other GAAP. The amendments in ASU 2017-08 are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within those years. Early adoption is permitted, including adoption in an interim period. As the Corporation already amortizes these premiums to the call date, the adoption of this ASU will not have any impact on the Corporation's consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities", with the objective of improving the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. The amendments in ASU 2017-12 expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This ASU will be effective for interim and annual periods beginning after December 15, 2018. Early adoption of ASU 2017-12 is permitted. As of December 31, 2018, the Corporation has early adopted ASU 2017-12 with no material impact to the Corporation's consolidated financial statements. |
SECURITIES (Tables)
SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available-for-sale Securities Reconciliation | The fair value of the available-for-sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows: December 31, 2018 Amortized Gross Unrealized Fair Cost Gains Losses Value (In thousands) U.S. government-sponsored agencies $ 26,232 $ 15 $ (498 ) $ 25,749 Obligations of state and political subdivisions 3,205 — (84 ) 3,121 Mortgage-backed securities 63,659 68 (1,564 ) 62,163 Asset-backed securities (a) 4,916 6 — 4,922 Corporate debt (b) 13,369 48 (561 ) 12,856 Total $ 111,381 $ 137 $ (2,707 ) $ 108,811 December 31, 2017 Amortized Gross Unrealized Fair Cost Gains Losses Value (In thousands) U.S. government-sponsored agencies $ 21,699 $ 30 $ (396 ) $ 21,333 Obligations of state and political subdivisions 3,221 — (56 ) 3,165 Mortgage-backed securities 64,775 70 (1,011 ) 63,834 Asset-backed securities (a) 6,672 30 (4 ) 6,698 Corporate debt (b) 14,437 94 (302 ) 14,229 Total $ 110,804 $ 224 $ (1,769 ) $ 109,259 (a) Collateralized by student loans. (b) Corporate debt securities are primarily in financial institutions. |
Schedule of Held to Maturity Securities and Related Unrecognized Gains and Losses | The following is a summary of the held-to-maturity securities and related gross unrealized gains and losses: December 31, 2018 Amortized Gross Unrealized Fair Cost Gains Losses Value (In thousands) U.S. Treasury $ 999 $ — $ (14 ) $ 985 U.S. government-sponsored agencies 35,565 20 (976 ) 34,609 Obligations of state and political subdivisions 2,358 14 (27 ) 2,345 Mortgage-backed securities 23,386 47 (375 ) 23,058 Total $ 62,308 $ 81 $ (1,392 ) $ 60,997 December 31, 2017 Amortized Gross Unrealized Fair Cost Gains Losses Value (In thousands) U.S. Treasury $ 999 $ — $ (11 ) $ 988 U.S. government-sponsored agencies 27,075 4 (760 ) 26,319 Obligations of state and political subdivisions 4,057 21 (23 ) 4,055 Mortgage-backed securities 20,311 76 (198 ) 20,189 Total $ 52,442 $ 101 $ (992 ) $ 51,551 |
Amortized Cost and Fair Value of the Investment Securities Portfolio by Contractual Maturity. | The following table presents the amortized cost and fair value of the debt securities portfolio by contractual maturity. As issuers may have the right to call or prepay obligations with or without call or prepayment premiums, the actual maturities may differ from contractual maturities. Securities not due at a single maturity date, such as mortgage-backed securities and asset-backed securities, are shown separately. December 31, 2018 Amortized Cost Fair Value (In thousands) Available-for-sale Within one year $ 1,543 $ 1,528 After one year, but within five years 12,918 12,734 After five years, but within ten years 23,978 23,260 After ten years 4,367 4,204 Mortgage-backed securities 63,659 62,163 Asset-backed securities 4,916 4,922 Total $ 111,381 $ 108,811 Held-to-maturity Within one year $ 335 $ 336 After one year, but within five years 18,032 17,738 After five years, but within ten years 20,067 19,404 After ten years 488 461 Mortgage-backed securities 23,386 23,058 Total $ 62,308 $ 60,997 |
Schedule of Continuous Unrealized Loss Position for Investment Securities Available for Sale and Held to Maturity | The following tables summarize the fair value and unrealized losses of those investment securities which reported an unrealized loss at December 31, 2018 and 2017 , and if the unrealized loss position was continuous for the twelve months prior to December 31, 2018 and 2017 . Available-for-sale December 31, 2018 Less than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (In thousands) U.S. government- sponsored agencies $ — $ — $ 17,432 $ (498 ) $ 17,432 $ (498 ) Obligations of state and political subdivisions — — 3,121 (84 ) 3,121 (84 ) Mortgage-backed securities 4,177 (19 ) 47,479 (1,545 ) 51,656 (1,564 ) Asset-backed securities 2,892 — — — 2,892 — Corporate debt — — 8,808 (561 ) 8,808 (561 ) Total temporarily impaired securities $ 7,069 $ (19 ) $ 76,840 $ (2,688 ) $ 83,909 $ (2,707 ) Available-for-sale December 31, 2017 Less than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (In thousands) U.S. government- sponsored agencies $ 8,260 $ (70 ) $ 11,174 $ (326 ) $ 19,434 $ (396 ) Obligations of state and political subdivisions 1,384 (7 ) 1,781 (49 ) 3,165 (56 ) Mortgage-backed securities 30,575 (201 ) 26,809 (810 ) 57,384 (1,011 ) Asset-backed securities — — 3,013 (4 ) 3,013 (4 ) Corporate debt — — 9,135 (302 ) 9,135 (302 ) Total temporarily impaired securities $ 40,219 $ (278 ) $ 51,912 $ (1,491 ) $ 92,131 $ (1,769 ) Held-to-maturity December 31, 2018 Less than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (In thousands) U.S. Treasury $ — $ — $ 985 $ (14 ) $ 985 $ (14 ) U.S. government- sponsored agencies 2,496 (9 ) 24,595 (967 ) 27,091 (976 ) Obligations of state and political subdivisions — — 461 (27 ) 461 (27 ) Mortgage-backed securities 5,885 (67 ) 11,081 (308 ) 16,966 (375 ) Total temporarily impaired securities $ 8,381 $ (76 ) $ 37,122 $ (1,316 ) $ 45,503 $ (1,392 ) Held-to-maturity December 31, 2017 Less than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses (In thousands) U.S. Treasury $ 988 $ (11 ) $ — $ — $ 988 $ (11 ) U.S. government- sponsored agencies 10,032 (139 ) 15,265 (621 ) 25,297 (760 ) Obligations of state and political subdivisions — — 474 (23 ) 474 (23 ) Mortgage-backed securities 9,531 (114 ) 3,896 (84 ) 13,427 (198 ) Total temporarily impaired securities $ 20,551 $ (264 ) $ 19,635 $ (728 ) $ 40,186 $ (992 ) |
LOANS AND ALLOWANCE FOR LOAN _2
LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Loan Portfolio Schedule | At December 31, 2018 and 2017 , respectively, the loan portfolio consisted of the following: December 31, 2018 2017 (In thousands) Commercial: Secured by real estate $ 28,790 $ 31,684 Other 64,965 57,372 Commercial real estate 504,522 493,542 Commercial construction 9,787 2,152 Residential real estate 82,491 85,760 Consumer: Secured by real estate 36,120 32,207 Other 455 563 Government Guaranteed Loans - guaranteed portion 6,559 8,334 Other 98 106 Total gross loans 733,787 711,720 Less: Deferred loan costs, net 457 397 Allowance for loan losses 7,926 8,762 8,383 9,159 Loans, net $ 725,404 $ 702,561 |
Schedule of Allowance for Loan Losses | Activity in the allowance for loan losses is summarized as follows: Year Ended December 31, 2018 Balance beginning of period Provision charged to operations Loans charged-off Recoveries of loans charged-off Balance end of period (In thousands) Commercial $ 3,058 $ (468 ) $ (29 ) $ 142 $ 2,703 Commercial real estate 5,531 (1,249 ) — 665 4,947 Commercial construction 33 98 — — 131 Residential real estate 68 (3 ) — — 65 Consumer 64 2 — 2 68 Other 1 1 (2 ) 1 1 Unallocated 7 4 — — 11 Balance, ending $ 8,762 $ (1,615 ) $ (31 ) $ 810 $ 7,926 Year Ended December 31, 2017 Balance beginning of period Provision charged to operations Loans charged-off Recoveries of loans charged-off Balance end of period (In thousands) Commercial $ 2,663 $ 301 $ (3 ) $ 97 $ 3,058 Commercial real estate 4,734 697 — 100 5,531 Commercial construction 355 (322 ) — — 33 Residential real estate 66 2 — — 68 Consumer 75 (19 ) — 8 64 Other — 1 (1 ) 1 1 Unallocated 12 (5 ) — — 7 Balance, ending $ 7,905 $ 655 $ (4 ) $ 206 $ 8,762 The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on the impairment method as of December 31, 2018 and 2017 : December 31, 2018 Commercial Commercial Real Estate Commercial Construction Residential Real Estate Consumer Government Guaranteed Other Loans Unallocated Total (In thousands) Allowance for loan losses: Ending allowance balance attributable to loans Individually evaluated for impairment $ 88 $ 561 $ — $ — $ — $ — $ — $ — $ 649 Collectively evaluated for impairment 2,615 4,386 131 65 68 — 1 11 7,277 Total ending allowance balance $ 2,703 $ 4,947 $ 131 $ 65 $ 68 $ — $ 1 $ 11 $ 7,926 Loans: Loans individually evaluated for impairment $ 633 $ 6,079 $ — $ 576 $ — $ — $ — $ — $ 7,288 Loans collectively evaluated for impairment 93,122 498,443 9,787 81,915 36,575 6,559 98 — 726,499 Total ending loan balance $ 93,755 $ 504,522 $ 9,787 $ 82,491 $ 36,575 $ 6,559 $ 98 $ — $ 733,787 December 31, 2017 Commercial Commercial Real Estate Commercial Construction Residential Real Estate Consumer Government Guaranteed Other Loans Unallocated Total (In thousands) Allowance for loan losses: Ending allowance balance attributable to loans Individually evaluated for impairment $ 34 $ 575 $ — $ — $ — $ — $ — $ — $ 609 Collectively evaluated for impairment 3,024 4,956 33 68 64 — 1 7 8,153 Total ending allowance balance $ 3,058 $ 5,531 $ 33 $ 68 $ 64 $ — $ 1 $ 7 $ 8,762 Loans: Loans individually evaluated for impairment $ 549 $ 6,236 $ — $ 295 $ 62 $ — $ — $ — $ 7,142 Loans collectively evaluated for impairment 88,507 487,306 2,152 85,465 32,708 8,334 106 — 704,578 Total ending loan balance $ 89,056 $ 493,542 $ 2,152 $ 85,760 $ 32,770 $ 8,334 $ 106 $ — $ 711,720 |
Schedule of Recorded Investment in Nonaccrual Loans | The following table presents the recorded investment in nonaccrual loans at the dates indicated: December 31, 2018 2017 (In thousands) Commercial: Secured by real estate $ 394 $ 136 Commercial real estate 574 701 Residential real estate 576 295 Consumer: Secured by real estate — 62 Total nonaccrual loans $ 1,544 $ 1,194 |
Schedule of Recorded Investments in Impaired Loans | The following table presents loans individually evaluated for impairment by class of loans at and for the periods indicated: At And For The Year Ended December 31, 2018 Unpaid Principal Balance Recorded Investment Allowance for Loan Losses Allocated Average Recorded Investment Interest Income Recognized (In thousands) With no related allowance recorded: Commercial: Secured by real estate $ 447 $ 416 $ 455 $ 11 Commercial real estate 3,329 3,001 3,061 108 Residential real estate 587 576 343 — Consumer: Secured by real estate — — 28 — With an allowance recorded: Commercial: Secured by real estate 95 95 $ 83 65 3 Other 122 122 5 125 9 Commercial real estate 3,078 3,078 561 3,095 161 Total impaired loans $ 7,658 $ 7,288 $ 649 $ 7,172 $ 292 During the year ended December 31, 2018 , no interest income was recognized on a cash basis. At And For The Year Ended December 31, 2017 Unpaid Principal Balance Recorded Investment Allowance for Loan Losses Allocated Average Recorded Investment Interest Income Recognized (In thousands) With no related allowance recorded: Commercial: Secured by real estate $ 389 $ 389 $ 964 $ 70 Commercial real estate 3,442 3,124 3,148 121 Residential real estate 295 295 59 — Consumer: Secured by real estate 71 62 70 — With an allowance recorded: Commercial: Secured by real estate 33 32 $ 27 45 — Other 128 128 7 171 12 Commercial real estate 3,112 3,112 575 3,144 128 Total impaired loans $ 7,470 $ 7,142 $ 609 $ 7,601 $ 331 |
Schedule of Aging of the Recorded Investment in Past Due Loans by Class of Loans | The following table presents the aging of the recorded investment in past due loans by class of loans as of December 31, 2018 and 2017 . Nonaccrual loans are included in the disclosure by payment status: December 31, 2018 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days Past Due Total Past Due Loans Not Past Due Total (In thousands) Commercial: Secured by real estate $ — $ — $ 394 $ 394 $ 28,396 $ 28,790 Other 6 — — 6 64,959 64,965 Commercial real estate 2,155 — 509 2,664 501,858 504,522 Commercial construction — — — — 9,787 9,787 Residential real estate 112 42 308 462 82,029 82,491 Consumer: Secured by real estate — — — — 36,120 36,120 Other 1 — — 1 454 455 Government Guaranteed Loans — — — — 6,559 6,559 Other — — — — 98 98 Total $ 2,274 $ 42 $ 1,211 $ 3,527 $ 730,260 $ 733,787 December 31, 2017 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days Past Due Total Past Due Loans Not Past Due Total (In thousands) Commercial: Secured by real estate $ 186 $ — $ — $ 186 $ 31,498 $ 31,684 Other 8 — — 8 57,364 57,372 Commercial real estate 300 — 599 899 492,643 493,542 Commercial construction — — — — 2,152 2,152 Residential real estate 314 — — 314 85,446 85,760 Consumer: Secured by real estate — — 28 28 32,179 32,207 Other — — — — 563 563 Government Guaranteed Loans — — — — 8,334 8,334 Other — — — — 106 106 Total $ 808 $ — $ 627 $ 1,435 $ 710,285 $ 711,720 |
Schedule of Debtor Troubled Debt Restructuring, Current Period | The following table presents the number of loans and their recorded investment immediately prior to the modification date and immediately after the modification date by class that were modified as troubled debt restructurings during the year ended December 31, 2018: December 31, 2018 Number of Loans Pre- Modification Recorded Investment Post- Modification Recorded Investment (Dollars in thousands) Commercial: Secured by real estate 1 $ 95 $ 95 Total 1 $ 95 $ 95 |
Schedule of Loans by Credit Quality Indicators | As of December 31, 2018 and 2017 , and based on the most recent analysis performed at those times, the risk category of loans by class is as follows: December 31, 2018 Pass Special Mention Substandard Doubtful Loss Total (In thousands) Commercial: Secured by real estate $ 26,879 $ 1,234 $ 677 $ — $ — $ 28,790 Other 63,438 181 1,346 — — 64,965 Commercial real estate 490,661 7,086 6,775 — — 504,522 Commercial construction 9,787 — — — — 9,787 Government Guaranteed Loans guaranteed portion 6,559 — — — — 6,559 Total $ 597,324 $ 8,501 $ 8,798 $ — $ — $ 614,623 December 31, 2017 Pass Special Mention Substandard Doubtful Loss Total (In thousands) Commercial: Secured by real estate $ 29,025 $ 2,153 $ 506 $ — $ — $ 31,684 Other 56,632 216 524 — — 57,372 Commercial real estate 481,443 10,023 2,076 — — 493,542 Commercial construction 2,152 — — — — 2,152 Government Guaranteed Loans guaranteed portion 8,334 — — — — 8,334 Total $ 577,586 $ 12,392 $ 3,106 $ — $ — $ 593,084 |
Schedule of Recorded Investment in Residential Real Estate and Consumer Loans Based on Payment Activity | The following table presents the recorded investment in residential real estate and consumer loans based on payment activity as of December 31, 2018 and 2017 . December 31, 2018 Current 30+ Days Past Due or Nonaccrual Total (In thousands) Residential real estate $ 81,761 $ 730 $ 82,491 Consumer: Secured by real estate 36,120 — 36,120 Other 454 1 455 Total $ 118,335 $ 731 $ 119,066 December 31, 2017 Current 30+ Days Past Due or Nonaccrual Total (In thousands) Residential real estate $ 85,446 $ 314 $ 85,760 Consumer: Secured by real estate 32,179 28 32,207 Other 563 — 563 Total $ 118,188 $ 342 $ 118,530 |
PREMISES AND EQUIPMENT, NET (Ta
PREMISES AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Premises and Equipment | The balance of premises and equipment consists of the following at December 31, 2018 and 2017 : Years Ended December 31, 2018 2017 (In thousands) Land $ 3,240 $ 3,240 Buildings and improvements 4,654 4,505 Leasehold improvements 1,925 1,923 Furniture, fixtures, and equipment 2,027 1,605 11,846 11,273 Less: accumulated depreciation and amortization 4,839 4,364 Total premises & equipment, net $ 7,007 $ 6,909 |
OTHER REAL ESTATE OWNED (Tables
OTHER REAL ESTATE OWNED (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
OTHER REAL ESTATE OWNED [Abstract] | |
Schedule of Activity in Allowance for Losses on Other Real Estate Owned | Activity in the allowance for losses on other real estate owned for the year ended December 31, 2017 was as follows: Year Ended December 31, 2017 (In thousands) Beginning of year $ 3 Additions charged to expense — Reductions from sales of other real estate owned (3 ) End of year $ — |
Schedule of Expenses Related to Other Real Estate Owned | Expenses related to other real estate owned for the year ended December 31, 2017 include: Year Ended December 31, 2017 (In thousands) Provision for unrealized losses $ — Operating expenses, net of rental income 24 End of year $ 24 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
DEPOSITS [Abstract] | |
Schedule of Deposit Liabilities | The following table presents deposits at December 31, 2018 and 2017 : December 31, 2018 2017 (In thousands) Noninterest-bearing demand $ 174,717 $ 172,861 Interest-bearing checking accounts 175,215 196,924 Money market accounts 149,936 110,256 Total interest-bearing demand 325,151 307,180 Statement savings and clubs 71,472 77,284 Business savings 5,273 5,830 Total savings 76,745 83,114 IRA investment and variable rate savings 31,876 33,236 Brokered certificates 37,063 25,944 Money market certificates 136,539 141,764 Total certificates of deposit 205,478 200,944 Total interest-bearing deposits 607,374 591,238 Total deposits $ 782,091 $ 764,099 |
Schedule of Maturities of Time Deposits | The scheduled maturities of certificates of deposit were as follows: Year Ended December 31, Balances (In thousands) 2019 $ 115,418 2020 45,973 2021 34,421 2022 7,132 2023 2,534 $ 205,478 |
Schedule of Interest Expense on Deposits | The following table presents interest expense on deposits at December 31, 2018 and 2017 summarized as follows: December 31, 2018 2017 (In thousands) Total interest bearing demand $ 2,147 $ 709 Total savings 83 91 Total certificates of deposit 3,063 2,389 Total interest expense $ 5,293 $ 3,189 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of FHLB Advances | The following table presents Federal Home Loan Bank of New York ("FHLB-NY") advances by maturity date: December 31, 2018 December 31, 2017 Advances Maturing Amount Weighted Average Rate Amount Weighted Average Rate (Dollars in thousands) Within one year $ 45,700 1.99 % $ 20,760 1.59 % After one year, but within two years 5,000 1.88 % 33,000 1.76 % After two years, but within three years 5,000 1.68 % 5,000 1.88 % After three years, but within four years — — % 5,000 1.68 % After four years, but within five years 10,000 3.25 % — — % Total advances maturing $ 65,700 2.15 % $ 63,760 1.71 % |
SUBORDINATED DEBENTURES AND S_2
SUBORDINATED DEBENTURES AND SUBORDINATED NOTES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SUBORDINATED DEBENTURES AND SUBORDINATED NOTES [Abstract] | |
Schedule of Subordinated Debt | Carrying Amount December 31, Issue Maturity Rate 2018 2017 (In thousands) 9/17/2003 9/17/2033 Fixed / Floating Rate Junior Subordinated Debentures $ 7,217 $ 7,217 8/28/2015 8/25/2025 Fixed Rate Subordinated Notes 16,165 16,100 Total $ 23,382 $ 23,317 |
REGULATORY CAPITAL REQUIREMEN_2
REGULATORY CAPITAL REQUIREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
REGULATORY CAPITAL REQUIREMENTS [Abstract] | |
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | Actual Required for Capital Adequacy Purposes To Be Well Capitalized Under Prompt Corrective Action Regulations Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) December 31, 2018 Tier 1 Leverage ratio Corporation $ 89,086 9.33 % $ 38,213 4.00 % N/A N/A Bank 99,761 10.49 % 38,032 4.00 % $ 47,540 5.00 % Risk-based capital: Common Equity Tier 1 Corporation N/A N/A N/A N/A N/A N/A Bank 99,761 12.54 % 35,798 4.50 % 51,708 6.50 % Tier 1 Corporation 89,086 11.33 % 31,461 4.00 % N/A N/A Bank 99,761 12.54 % 47,731 6.00 % 63,641 8.00 % Total Corporation 113,178 14.39 % 62,922 8.00 % N/A N/A Bank 107,687 13.54 % 63,641 8.00 % 79,551 10.00 % December 31, 2017 Tier 1 Leverage ratio Corporation $ 81,886 8.88 % $ 36,867 4.00 % N/A N/A Bank 92,824 10.12 % 36,698 4.00 % $ 45,872 5.00 % Risk-based capital: Common Equity Tier 1 Corporation N/A N/A N/A N/A N/A N/A Bank 92,824 12.24 % 34,113 4.50 % 49,274 6.50 % Tier 1 Corporation 81,886 10.96 % 29,889 4.00 % N/A N/A Bank 92,824 12.24 % 45,484 6.00 % 60,645 8.00 % Total Corporation 106,748 14.29 % 59,777 8.00 % N/A N/A Bank 101,586 13.40 % 60,645 8.00 % 75,807 10.00 % |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of changes in nonvested restricted shares | Changes in nonvested restricted shares were as follows: 2018 2017 Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Balance January 1 51,528 $ 6.91 68,586 $ 5.52 Granted 28,221 10.65 20,876 8.88 Vested (1) (28,066 ) 4.39 (34,675 ) 5.40 Forfeited (2,131 ) 9.82 (3,259 ) 6.41 Balance December 31 49,552 $ 10.34 51,528 $ 6.91 (1) Includes 9,835 and 13,288 shares in 2018 and 2017, respectively, that vested but were immediately forfeited to cover taxes. |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following reconciles the income available to common shareholders (numerator) and the weighted average common stock outstanding (denominator) for both basic and diluted earnings per share: Years Ended December 31, 2018 2017 (Dollars in thousands, except per share amounts) Net income available to common shareholders $ 8,030 $ 3,947 Weighted average common shares outstanding - basic and diluted 8,672,840 7,906,791 Basic and diluted earnings per common share $ 0.93 $ 0.50 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax expense are summarized as follows: Years Ended December 31, 2018 2017 (In thousands) Current tax expense Federal $ 1,865 $ 2,438 State 1,158 919 3,023 3,357 Deferred tax expense Federal 100 1,555 State (101 ) (128 ) Valuation allowance (2 ) (8 ) (3 ) 1,419 Total $ 3,020 $ 4,776 |
Schedule of Effective Income Tax Rate Reconciliation | The following table presents a reconciliation between the reported income taxes and the income taxes which would be computed by applying the normal federal income tax rate (21% and 34% for the year ended December 31, 2018 and 2017, respectively) to income before income taxes: Years Ended December 31, 2018 2017 (In thousands) Federal income tax $ 2,320 $ 2,966 Add (deduct) effect of: State income taxes, net of federal income tax effect 835 606 Nontaxable interest income (47 ) (129 ) Effect of change in Federal statutory tax rate 33 1,420 Bank owned life insurance (116 ) (198 ) Nondeductible expenses (14 ) (31 ) Change in valuation reserve (2 ) (8 ) Out of period adjustment for state fixed asset basis — 150 Other 11 — Effective federal income taxes $ 3,020 $ 4,776 |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of existing temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: December 31, 2018 2017 (In thousands) Deferred tax assets: Allowance for loan losses $ 2,285 $ 2,455 Accrued compensation 109 91 Nonaccrual loan interest 30 12 Depreciation 94 202 Contribution carry forward — 2 Mortgage servicing rights (22 ) (5 ) Accrued contributions 249 167 Unrealized loss on securities available-for-sale 836 498 SERP 202 — 3,783 3,422 Valuation reserve — (2 ) Net deferred tax assets $ 3,783 $ 3,420 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | At December 31, 2018 , the minimum rental commitments on the noncancellable leases with an initial term of one year and expiring thereafter are as follows: Year Ended Minimum December 31, Rent (In thousands) 2019 $ 718 2020 657 2021 483 2022 454 2023 379 Thereafter 666 $ 3,357 |
INTEREST RATE SWAP (Tables)
INTEREST RATE SWAP (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary Information of Interest Swap | Summary information as of December 31, 2018 and 2017 about the interest swaps designated as cash flow hedges are as follows: As of December 31, 2018 Notional Amount Unrealized Gain / (Loss) Fixed Pay Rate Floating Receive Rate Maturity Date (Dollars in thousands) Interest rate swaps by effective date December 18, 2017 $ 7,000 $ 134 5.323 % 3 month LIBOR plus 2.95% June 17, 2027 September 1, 2018 10,000 (84 ) 2.607 % Federal Funds Rate August 31, 2021 September 1, 2018 10,000 (162 ) 2.615 % Federal Funds Rate August 31, 2023 $ 27,000 $ (112 ) As of December 31, 2017 Notional Amount Unrealized Loss Fixed Pay Rate Floating Receive Rate Maturity Date (Dollars in thousands) Interest rate swaps by effective date December 18, 2017 $ 7,000 $ (29 ) 5.323 % 3 month LIBOR plus 2.95% June 17, 2027 $ 7,000 $ (29 ) |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The following table presents the after tax net gains recorded in accumulated other comprehensive income and the Consolidated Statements of Income relating to the cash flow derivative instruments for the periods indicated. Year Ended December 31, 2018 Amount of Gain (Loss) Recognized in OCI (Effective Portion) Amount of Gain (Loss) Reclassified from OCI to Interest Expense Amount of Gain (Loss) Recognized in Other Noninterest Income (Ineffective Portion) (In thousands) Interest rate swaps by effective date December 18, 2017 $ 119 $ (16 ) $ — September 1, 2018 (60 ) (15 ) — September 1, 2018 (115 ) (15 ) — Total $ (56 ) $ (46 ) $ — Year Ended December 31, 2017 Amount of Gain (Loss) Recognized in OCI (Effective Portion) Amount of Gain (Loss) Reclassified from OCI to Interest Expense Amount of Gain (Loss) Recognized in Other Noninterest Income (Ineffective Portion) (In thousands) Interest rate swaps by effective date December 18, 2017 $ (21 ) $ — $ — Total $ (21 ) $ — $ — |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized below: Fair Value Measurements Using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2018 (In thousands) Assets: Available-for-sale securities U.S. government - sponsored agencies $ 25,749 $ — $ 25,749 $ — Obligations of state and political subdivisions 3,121 — 3,121 — Mortgage-backed securities 62,163 — 62,163 — Asset-backed securities 4,922 — 4,922 — Corporate bonds 12,856 — 12,856 — Total available-for-sale securities $ 108,811 $ — $ 108,811 $ — Other equity investments $ 1,648 $ 1,588 $ 60 $ — Interest Rate Swap $ 134 $ — $ 134 $ — Liabilities: Interest rate swap $ 246 $ — $ 246 $ — Fair Value Measurements Using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2017 (In thousands) Assets: Available-for-sale securities U.S. government - sponsored agencies $ 21,333 $ — $ 21,333 $ — Obligations of state and political subdivisions 3,165 — 3,165 — Mortgage-backed securities 63,834 — 63,834 — Asset-backed securities 6,698 — 6,698 — Corporate bonds 14,229 — 14,229 — Total available-for-sale securities $ 109,259 $ — $ 109,259 $ — Other equity investments $ 3,756 $ 3,696 $ 60 $ — Liabilities: Interest rate swap $ 29 $ — $ 29 $ — |
Schedule of Assets and Liabilities Measured at Fair Value on a Non-recurring Basis | Assets and liabilities measured at fair value on a non-recurring basis are summarized below: Fair Value Measurements Using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2018 (In thousands) Assets: Impaired loans Commercial: Secured by real estate $ 301 $ — $ — $ 301 Residential real estate 308 — — 308 Total Assets $ 609 $ — $ — $ 609 Fair Value Measurements Using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2017 (In thousands) Assets: Impaired loans Commercial: Secured by real estate $ 109 $ — $ — $ 109 Commercial real estate 192 — — 192 Residential real estate 296 — — 296 Total Assets $ 597 $ — $ — $ 597 |
Schedule of Fair Value Assumptions for Level 3 Asset Measurements | For the Level 3 assets measured at fair value on a non-recurring basis, the significant unobservable inputs used in the fair value measurements were as follows: December 31, 2018 Assets Fair Value Valuation Technique Unobservable Inputs Range (Dollars in thousands) Impaired loans $ 609 Comparable real estate sales and / or the income approach. Adjustments for differences between comparable sales and income data available. 5% Estimated selling costs. 7% December 31, 2017 Assets Fair Value Valuation Technique Unobservable Inputs Range (Dollars in thousands) Impaired loans $ 597 Comparable real estate sales and / or the income approach. Adjustments for differences between comparable sales and income data available. 5% Estimated selling costs. 7% |
Schedule of Fair Value Estimates for the Financial Instruments | Fair value estimates for the Corporation’s financial instruments are summarized below: Fair Value Measurements Using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2018 (In thousands) Financial assets: Cash and cash equivalents $ 16,823 $ 16,823 $ — $ — Securities available-for-sale 108,811 — 108,811 — Securities held-to-maturity 62,308 — 60,997 — Other Equity Investments 1,648 1,588 60 — FHLB-NY stock 3,965 N/A N/A N/A Loans, net 725,404 — — 704,273 Interest rate swap 134 — 134 — Financial liabilities: Deposits 782,091 578,460 201,846 — FHLB-NY advances 65,700 — 65,477 — Subordinated Debentures and Subordinated Notes 23,382 — — 23,441 Interest rate swap 246 — 246 — Fair Value Measurements Using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2017 (In thousands) Financial assets: Cash and cash equivalents $ 21,270 $ 21,270 $ — $ — Securities available-for-sale 109,259 — 109,259 — Securities held-to-maturity 52,442 — 51,551 — Other equity investments 3,756 3,696 60 — FHLB-NY stock 3,715 N/A N/A N/A Mortgage loans held for sale 370 — — 370 Loans, net 702,561 — — 714,387 Financial liabilities: Deposits 764,099 565,292 197,696 — FHLB-NY advances 63,760 — 63,340 — Subordinated Debentures and Subordinated Notes 23,317 — — 23,478 Interest rate swap 29 — 29 — |
PARENT COMPANY ONLY (Tables)
PARENT COMPANY ONLY (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Statement of Financial Condition | Condensed Statements of Financial Condition December 31, 2018 2017 (In thousands) Assets Cash and due from banks $ 750 $ 378 Securities available-for-sale 3,877 3,911 Investment in subsidiary 97,861 91,689 Accrued interest receivable 21 21 Other assets 1,458 1,435 Total assets $ 103,967 $ 97,434 Liabilities and Shareholders' equity Subordinated Debentures $ 7,217 $ 7,217 Subordinated Notes 16,165 16,100 Other liabilities 435 452 Shareholders' equity 80,150 73,665 Total liabilities and Shareholders' equity $ 103,967 $ 97,434 |
Condensed Statements of Income | Condensed Statements of Income and Comprehensive Income Years Ended December 31, 2018 2017 (In thousands) Interest income - securities available-for-sale $ 94 $ 76 Dividend income 2,700 2,218 Other income 11 10 Total income 2,805 2,304 Interest expense 1,575 1,492 Other expenses 351 354 Total expenses 1,926 1,846 Income before income tax benefit 879 458 Tax benefit (381 ) (597 ) Income before equity in undistributed earnings of subsidiary 1,260 1,055 Equity in undistributed earnings of subsidiary 6,770 2,892 Net income 8,030 3,947 Equity in other comprehensive income (loss) (715 ) 160 Total comprehensive income $ 7,315 $ 4,107 |
Condensed Statements of Cash Flows | Condensed Statements of Cash Flows Years Ended December 31, 2018 2017 (In thousands) Cash flows from operating activities: Net income $ 8,030 $ 3,947 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed earnings of subsidiary (6,770 ) (2,892 ) Amortization of Subordinated Notes issuance cost 65 65 Restricted stock-forfeited (122 ) — Gain on calls of securities — (1 ) Increase in accrued interest receivable — (11 ) Decrease (increase) in other assets 92 (139 ) Increase in other liabilities 4 18 Net cash provided by operating activities 1,299 987 Cash flows from investing activities: Purchase of securities available-for-sale — (2,999 ) Proceeds from calls on securities available-for-sale — 500 Proceeds from maturities on securities available-for-sale — 500 Investment in subsidiary bank — (16,800 ) Net cash used in investing activities — (18,799 ) Cash flows from financing activities: Proceeds from issuance of common stock, net of costs — 18,860 Restricted stock-forfeited — (135 ) Cash dividends paid on common stock (1,040 ) (961 ) Payment of discount on dividend reinvestment plan (4 ) (5 ) Issuance of common stock 117 167 Net cash provided by (used in) financing activities (927 ) 17,926 Net decrease in cash and cash equivalents 372 114 Cash and cash equivalents - beginning 378 264 Cash and cash equivalents - ending $ 750 $ 378 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Components of Comprehensive Income | The components of comprehensive income, both gross and net of tax, are presented for the periods below: Years Ended December 31, 2018 December 31, 2017 Gross Tax Effect Net Gross Tax Effect Net (In thousands) Net income $ 11,050 $ (3,020 ) $ 8,030 $ 8,723 $ (4,776 ) $ 3,947 Other comprehensive income: Change in unrealized holding gains (losses) on securities available-for-sale (1,020 ) 343 (677 ) 241 (91 ) 150 Reclassification adjustment for gains in net income (6 ) 2 (4 ) (1 ) — (1 ) Accretion of loss on securities reclassified to held-to-maturity 27 (5 ) 22 46 (18 ) 28 Change in fair value of interest rate swap (128 ) 40 (88 ) (31 ) 12 (19 ) Reclassification adjustment for interest rate swap interest expense in net income 46 (14 ) 32 2 — 2 Total other comprehensive income (1,081 ) 366 (715 ) 257 (97 ) 160 Total comprehensive income $ 9,969 $ (2,654 ) $ 7,315 $ 8,980 $ (4,873 ) $ 4,107 |
Schedule of Components of Accumulated Other Comprehensive Income | The following table presents the components of accumulated other comprehensive income (loss), net of tax, for the years ended December 31, 2018 and 2017 , including the reclassification of income tax effects due to the adoption of ASU No. 2018-02 for the year ended December 31, 2017. Year Ended December 31, 2018 Components of Accumulated Other Comprehensive Income Total Unrealized Gains / (Losses) on Available-for-Sale (AFS) Securities Loss on Securities Reclassified from Available-for-Sale to Held-to- Maturity Unrealized Gains / (Losses) on Derivatives Accumulated Other Comprehensive Income (Loss) (In thousands) Balance at December 31, 2017 $ (1,303 ) $ (60 ) $ (21 ) $ (1,384 ) Other comprehensive income (loss) before reclassifications (677 ) 22 (88 ) (743 ) Amounts reclassified from other comprehensive income (4 ) — 32 28 Other comprehensive income (loss), net (681 ) 22 (56 ) (715 ) Reclassification due to the adoption of ASU No. 2016-01 163 — — 163 Balance at December 31, 2018 $ (1,821 ) $ (38 ) $ (77 ) $ (1,936 ) Year Ended December 31, 2017 Components of Accumulated Other Comprehensive Income Total Unrealized Gains / (Losses) on Available-for-Sale (AFS) Securities Loss on Securities Reclassified from Available-for-Sale to Held-to- Maturity Unrealized Gains / (Losses) on Derivatives Accumulated Other Comprehensive Income (Loss) (In thousands) Balance at December 31, 2016 $ (1,243 ) $ (78 ) $ — $ (1,321 ) Other comprehensive income (loss) before reclassifications 150 28 (19 ) 159 Amounts reclassified from other comprehensive income (1 ) — 2 1 Other comprehensive income, net 149 28 (17 ) 160 Reclassification of tax effects due to the adoption of ASU No. 2018-02 (209 ) (10 ) (4 ) (223 ) Balance at December 31, 2017 $ (1,303 ) $ (60 ) $ (21 ) $ (1,384 ) |
Schedule of Amount Reclassified from each Component of Accumulated Other Comprehensive Income | The following table presents amounts reclassified from each component of accumulated other comprehensive income on a gross and net of tax basis for the years ended December 31, 2018 and 2017 . Years Ended Components of Accumulated Other December 31, Income Statement Comprehensive Income (Loss) 2018 2017 Line Item (In thousands) Unrealized gains on AFS securities before tax $ 6 $ 1 Gains on securities transactions, net Tax effect (2 ) — Total, net of tax 4 1 Unrealized losses on derivatives before tax (46 ) (2 ) Interest expense on derivatives Tax effect 14 — Total, net of tax (32 ) (2 ) Total reclassifications, net of tax $ (28 ) $ (1 ) |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Non-interest Income | The following table summarizes non-interest income for the periods indicated (in thousands): For the Years Ended December 31, 2018 2017 (In thousands) Noninterest income In-scope of Topic 606: Banking service charges and other fees: Overdrafts $ 728 $ 671 Interchange 696 646 Other 763 745 Total banking service charges and other fees 2,187 2,062 Miscellaneous 424 416 Total in-scope noninterest income 2,611 2,478 Total out-of-scope noninterest income 806 829 Total noninterest income $ 3,417 $ 3,307 |
QUARTERLY FINANCIAL DATA (Una_2
QUARTERLY FINANCIAL DATA (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The following table contains quarterly financial data for the years ended December 31, 2018 and 2017 . Year Ended December 31, 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Total (In thousands, except per share amounts) Interest income $ 8,539 $ 8,868 $ 9,215 $ 9,377 $ 35,999 Interest expense 1,716 1,860 2,013 2,247 7,836 Net interest income before provision for loan losses 6,823 7,008 7,202 7,130 28,163 Provision for loan losses (335 ) (780 ) (490 ) (10 ) (1,615 ) Net interest income after provision for loan losses 7,158 7,788 7,692 7,140 29,778 Noninterest income 725 859 837 996 3,417 Noninterest expenses 5,428 5,504 5,554 5,659 22,145 Income before income tax expense 2,455 3,143 2,975 2,477 11,050 Income tax expense 647 842 813 718 3,020 Net income $ 1,808 $ 2,301 $ 2,162 $ 1,759 $ 8,030 Basic and diluted earnings per share $ 0.21 $ 0.27 $ 0.25 $ 0.20 $ 0.93 Year Ended December 31, 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Total (In thousands, except per share amounts) Interest income $ 7,424 $ 7,943 $ 8,400 $ 8,463 $ 32,230 Interest expense 1,244 1,409 1,577 1,628 5,858 Net interest income before provision for loan losses 6,180 6,534 6,823 6,835 26,372 Provision for loan losses 300 260 20 75 655 Net interest income after provision for loan losses 5,880 6,274 6,803 6,760 25,717 Noninterest income 799 813 845 850 3,307 Noninterest expenses 5,114 5,083 5,036 5,068 20,301 Income before income tax expense 1,565 2,004 2,612 2,542 8,723 Income tax expense 574 736 972 2,494 4,776 Net income $ 991 $ 1,268 $ 1,640 $ 48 $ 3,947 Basic and diluted earnings per share $ 0.16 $ 0.16 $ 0.19 $ 0.01 $ 0.50 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 31, 2019 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Dividend reinvestment plan, option to purchase new shares at percentage of market value | 95.00% | ||
Dividend reinvestment plan, discount rate reimbursed to broker at sale of stock | 5.00% | ||
Dividends that the Bank could have paid | $ 13,800 | ||
Reclassification due to the adoption of ASU 2016-01 | $ 163 | ||
Buildings and improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives (in years) | P3Y | ||
Buildings and improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives (in years) | P40Y | ||
Furniture, Fixtures, and Equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives (in years) | P3Y | ||
Furniture, Fixtures, and Equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives (in years) | P25Y | ||
Retained Earnings | |||
Property, Plant and Equipment [Line Items] | |||
Reclassification due to the adoption of ASU 2016-01 | $ (163) | ||
Retained Earnings | Accounting Standards Update 2016-01 | |||
Property, Plant and Equipment [Line Items] | |||
Reclassification due to the adoption of ASU 2016-01 | 163 | ||
Accumulated Other Comprehensive Income (Loss), Net | |||
Property, Plant and Equipment [Line Items] | |||
Reclassification due to the adoption of ASU 2016-01 | 163 | ||
Accumulated Other Comprehensive Income (Loss), Net | Accounting Standards Update 2016-01 | |||
Property, Plant and Equipment [Line Items] | |||
Reclassification due to the adoption of ASU 2016-01 | $ (163) | ||
Forecast | Accounting Standards Update 2016-02 | |||
Property, Plant and Equipment [Line Items] | |||
Lease liability | $ 3,300 | ||
Right-of-use asset | $ 3,300 |
SECURITIES (Schedule of Fair Va
SECURITIES (Schedule of Fair Value of Available For Sale Securities and Related Gross Unrealized Gains and Losses) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Available-for-sale securities | ||
Amortized Cost | $ 111,381 | $ 110,804 |
Gross Unrealized Gains | 137 | 224 |
Gross Unrealized Losses | (2,707) | (1,769) |
Fair Value | 108,811 | 109,259 |
U.S. government-sponsored agencies | ||
Available-for-sale securities | ||
Amortized Cost | 26,232 | 21,699 |
Gross Unrealized Gains | 15 | 30 |
Gross Unrealized Losses | (498) | (396) |
Fair Value | 25,749 | 21,333 |
Obligations of state and political subdivisions | ||
Available-for-sale securities | ||
Amortized Cost | 3,205 | 3,221 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (84) | (56) |
Fair Value | 3,121 | 3,165 |
Mortgage-backed securities | ||
Available-for-sale securities | ||
Amortized Cost | 63,659 | 64,775 |
Gross Unrealized Gains | 68 | 70 |
Gross Unrealized Losses | (1,564) | (1,011) |
Fair Value | 62,163 | 63,834 |
Asset-backed securities | ||
Available-for-sale securities | ||
Amortized Cost | 4,916 | 6,672 |
Gross Unrealized Gains | 6 | 30 |
Gross Unrealized Losses | 0 | (4) |
Fair Value | 4,922 | 6,698 |
Corporate debt (b) | ||
Available-for-sale securities | ||
Amortized Cost | 13,369 | 14,437 |
Gross Unrealized Gains | 48 | 94 |
Gross Unrealized Losses | (561) | (302) |
Fair Value | $ 12,856 | $ 14,229 |
SECURITIES (Narrative) (Details
SECURITIES (Narrative) (Details) | 12 Months Ended | |
Dec. 31, 2018USD ($)security | Dec. 31, 2017USD ($) | |
Debt Securities, Available-for-sale [Line Items] | ||
Proceeds from sales and calls on securities available-for-sale | $ 1,007,000 | $ 500,000 |
Gross gains realized from sales or calls of available-for-sale securities | 6,000 | 1,000 |
Gross losses realized from sales or calls of available-for-sale securities | 0 | 0 |
Available for sale securities pledged to secure public deposits | 988,000 | 990,000 |
Proceeds from calls on securities held-to-maturity | 280,000 | 1,320,000 |
Held-to-maturity securities, gross realized gains | 0 | 0 |
Held-to-maturity securities, gross realized losses | 0 | 0 |
The fair value of held to maturity securities pledged to secure public deposits | 626,000 | 789,000 |
Reclassification due to the adoption of ASU 2016-01 | $ 163,000 | |
U.S. government-sponsored agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of available-for-sale securities in a continuous loss position | security | 21 | |
Obligations of state and political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of available-for-sale securities in a continuous loss position | security | 7 | |
Number of held-to-maturity securities in a continuous loss position | security | 1 | |
Mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of available-for-sale securities in a continuous loss position | security | 73 | |
Corporate debt (b) | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of available-for-sale securities in a continuous loss position | security | 9 | |
U.S. Treasury | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of held-to-maturity securities in a continuous loss position | security | 1 | |
US government agencies debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of held-to-maturity securities in a continuous loss position | security | 26 | |
Collateralized mortgage backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of held-to-maturity securities in a continuous loss position | security | 27 | |
Accumulated Other Comprehensive Income (Loss), Net | ||
Debt Securities, Available-for-sale [Line Items] | ||
Reclassification due to the adoption of ASU 2016-01 | 163,000 | |
Accumulated Other Comprehensive Income (Loss), Net | Accounting Standards Update 2016-01 | ||
Debt Securities, Available-for-sale [Line Items] | ||
Reclassification due to the adoption of ASU 2016-01 | (163,000) | |
Retained Earnings | ||
Debt Securities, Available-for-sale [Line Items] | ||
Reclassification due to the adoption of ASU 2016-01 | (163,000) | |
Retained Earnings | Accounting Standards Update 2016-01 | ||
Debt Securities, Available-for-sale [Line Items] | ||
Reclassification due to the adoption of ASU 2016-01 | $ 163,000 |
SECURITIES (Schedule of Held to
SECURITIES (Schedule of Held to Maturity Securities and Related Unrecognized Gains and Losses) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Held to maturity securities | ||
Amortized Cost | $ 62,308 | $ 52,442 |
Gross Unrealized Gains | 81 | 101 |
Gross Unrealized Losses | (1,392) | (992) |
Fair value | 60,997 | 51,551 |
U.S. Treasury | ||
Held to maturity securities | ||
Amortized Cost | 999 | 999 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (14) | (11) |
Fair value | 985 | 988 |
U.S. government-sponsored agencies | ||
Held to maturity securities | ||
Amortized Cost | 35,565 | 27,075 |
Gross Unrealized Gains | 20 | 4 |
Gross Unrealized Losses | (976) | (760) |
Fair value | 34,609 | 26,319 |
Obligations of state and political subdivisions | ||
Held to maturity securities | ||
Amortized Cost | 2,358 | 4,057 |
Gross Unrealized Gains | 14 | 21 |
Gross Unrealized Losses | (27) | (23) |
Fair value | 2,345 | 4,055 |
Mortgage-backed securities | ||
Held to maturity securities | ||
Amortized Cost | 23,386 | 20,311 |
Gross Unrealized Gains | 47 | 76 |
Gross Unrealized Losses | (375) | (198) |
Fair value | $ 23,058 | $ 20,189 |
SECURITIES (Schedule of Amortiz
SECURITIES (Schedule of Amortized Cost and Fair Value by Contractual Maturity) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Amortized Cost | ||
Within one year | $ 1,543 | |
After one year, but within five years | 12,918 | |
After five years, but within ten years | 23,978 | |
After ten years | 4,367 | |
Amortized cost basis | 111,381 | $ 110,804 |
Fair Value | ||
Within one year | 1,528 | |
After one year, but within five years | 12,734 | |
After five years, but within ten years | 23,260 | |
After ten years | 4,204 | |
Available for sale securities, fair value | 108,811 | |
Amortized Cost | ||
Within one year | 335 | |
After one year, but within five years | 18,032 | |
After five years, but within ten years | 20,067 | |
After ten years | 488 | |
Securities held-to-maturity | 62,308 | 52,442 |
Fair Value | ||
Within one year | 336 | |
After one year, but within five years | 17,738 | |
After five years, but within ten years | 19,404 | |
After ten years | 461 | |
Fair value | 60,997 | 51,551 |
Mortgage-backed securities | ||
Amortized Cost | ||
Amortized cost basis | 63,659 | 64,775 |
Fair Value | ||
Available for sale securities, fair value | 62,163 | |
Amortized Cost | ||
Securities held-to-maturity | 23,386 | |
Fair Value | ||
Fair value | 23,058 | 20,189 |
Asset-backed securities | ||
Amortized Cost | ||
Amortized cost basis | 4,916 | $ 6,672 |
Fair Value | ||
Available for sale securities, fair value | $ 4,922 |
SECURITIES (Schedule of Continu
SECURITIES (Schedule of Continuous Unrealized Loss Position) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Available for sale securities, Continuous unrealized loss position | ||
Less than 12 Months, Fair Value | $ 7,069 | $ 40,219 |
Less than 12 Months, Unrealized Losses | (19) | (278) |
12 Months or Longer, Fair Value | 76,840 | 51,912 |
12 Months or Longer, Unrealized Losses | (2,688) | (1,491) |
Fair Value | 83,909 | 92,131 |
Unrealized Losses | (2,707) | (1,769) |
Held to maturity securities, Continuous unrealized loss position | ||
Less than 12 Months, Fair Value | 8,381 | 20,551 |
Less than 12 Months, Unrealized Losses | (76) | (264) |
12 Months or Longer, Fair Value | 37,122 | 19,635 |
12 Months or Longer, Unrealized Losses | (1,316) | (728) |
Fair Value | 45,503 | 40,186 |
Unrealized Losses | (1,392) | (992) |
U.S. Treasury | ||
Held to maturity securities, Continuous unrealized loss position | ||
Less than 12 Months, Fair Value | 0 | 988 |
Less than 12 Months, Unrealized Losses | 0 | (11) |
12 Months or Longer, Fair Value | 985 | 0 |
12 Months or Longer, Unrealized Losses | (14) | 0 |
Fair Value | 985 | 988 |
Unrealized Losses | (14) | (11) |
U.S. government-sponsored agencies | ||
Available for sale securities, Continuous unrealized loss position | ||
Less than 12 Months, Fair Value | 0 | 8,260 |
Less than 12 Months, Unrealized Losses | 0 | (70) |
12 Months or Longer, Fair Value | 17,432 | 11,174 |
12 Months or Longer, Unrealized Losses | (498) | (326) |
Fair Value | 17,432 | 19,434 |
Unrealized Losses | (498) | (396) |
Held to maturity securities, Continuous unrealized loss position | ||
Less than 12 Months, Fair Value | 2,496 | 10,032 |
Less than 12 Months, Unrealized Losses | (9) | (139) |
12 Months or Longer, Fair Value | 24,595 | 15,265 |
12 Months or Longer, Unrealized Losses | (967) | (621) |
Fair Value | 27,091 | 25,297 |
Unrealized Losses | (976) | (760) |
Obligations of state and political subdivisions | ||
Available for sale securities, Continuous unrealized loss position | ||
Less than 12 Months, Fair Value | 0 | 1,384 |
Less than 12 Months, Unrealized Losses | 0 | (7) |
12 Months or Longer, Fair Value | 3,121 | 1,781 |
12 Months or Longer, Unrealized Losses | (84) | (49) |
Fair Value | 3,121 | 3,165 |
Unrealized Losses | (84) | (56) |
Held to maturity securities, Continuous unrealized loss position | ||
Less than 12 Months, Fair Value | 0 | 0 |
Less than 12 Months, Unrealized Losses | 0 | 0 |
12 Months or Longer, Fair Value | 461 | 474 |
12 Months or Longer, Unrealized Losses | (27) | (23) |
Fair Value | 461 | 474 |
Unrealized Losses | (27) | (23) |
Mortgage-backed securities | ||
Available for sale securities, Continuous unrealized loss position | ||
Less than 12 Months, Fair Value | 4,177 | 30,575 |
Less than 12 Months, Unrealized Losses | (19) | (201) |
12 Months or Longer, Fair Value | 47,479 | 26,809 |
12 Months or Longer, Unrealized Losses | (1,545) | (810) |
Fair Value | 51,656 | 57,384 |
Unrealized Losses | (1,564) | (1,011) |
Held to maturity securities, Continuous unrealized loss position | ||
Less than 12 Months, Fair Value | 5,885 | 9,531 |
Less than 12 Months, Unrealized Losses | (67) | (114) |
12 Months or Longer, Fair Value | 11,081 | 3,896 |
12 Months or Longer, Unrealized Losses | (308) | (84) |
Fair Value | 16,966 | 13,427 |
Unrealized Losses | (375) | (198) |
Asset-backed securities | ||
Available for sale securities, Continuous unrealized loss position | ||
Less than 12 Months, Fair Value | 2,892 | 0 |
Less than 12 Months, Unrealized Losses | 0 | 0 |
12 Months or Longer, Fair Value | 0 | 3,013 |
12 Months or Longer, Unrealized Losses | 0 | (4) |
Fair Value | 2,892 | 3,013 |
Unrealized Losses | 0 | (4) |
Corporate debt (b) | ||
Available for sale securities, Continuous unrealized loss position | ||
Less than 12 Months, Fair Value | 0 | 0 |
Less than 12 Months, Unrealized Losses | 0 | 0 |
12 Months or Longer, Fair Value | 8,808 | 9,135 |
12 Months or Longer, Unrealized Losses | (561) | (302) |
Fair Value | 8,808 | 9,135 |
Unrealized Losses | $ (561) | $ (302) |
LOANS AND ALLOWANCE FOR LOAN _3
LOANS AND ALLOWANCE FOR LOAN LOSSES (Loan Portfolio Schedule) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans | $ 733,787 | $ 711,720 |
Less: Deferred loan costs (fees), net | 457 | 397 |
Allowance for loan losses | 7,926 | 8,762 |
Allowance net of deferred loan fees | 8,383 | 9,159 |
Loans, net | 725,404 | 702,561 |
Commercial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans | 93,755 | 89,056 |
Allowance for loan losses | 2,703 | 3,058 |
Commercial | Secured by real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans | 28,790 | 31,684 |
Commercial | Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans | 64,965 | 57,372 |
Commercial real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans | 504,522 | 493,542 |
Allowance for loan losses | 4,947 | 5,531 |
Commercial construction | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans | 9,787 | 2,152 |
Allowance for loan losses | 131 | 33 |
Residential real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans | 82,491 | 85,760 |
Allowance for loan losses | 65 | 68 |
Consumer | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans | 36,575 | 32,770 |
Allowance for loan losses | 68 | 64 |
Consumer | Secured by real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans | 36,120 | 32,207 |
Consumer | Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans | 455 | 563 |
Government Guaranteed | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans | 6,559 | 8,334 |
Allowance for loan losses | 0 | 0 |
Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans | 98 | 106 |
Allowance for loan losses | $ 1 | $ 1 |
LOANS AND ALLOWANCE FOR LOAN _4
LOANS AND ALLOWANCE FOR LOAN LOSSES (Narrative) (Details) | 12 Months Ended | |
Dec. 31, 2018USD ($)loan_relationshiploan | Dec. 31, 2017USD ($)loan | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans | $ 733,787,000 | $ 711,720,000 |
Loans receivable from related parties | 3,038,000 | 3,248,000 |
Draws | 2,126,000 | |
Repayments | $ 1,461,000 | |
Loan relationship no longer classified as related party | loan_relationship | 1 | |
Deductions due to reclassification | $ 874,000 | |
Unpaid principal balance of loans serviced for others | $ 14,300,000 | $ 11,400,000 |
Number of loans past due over 90 days still accruing | loan | 0 | 0 |
Committed funds for construction loan, classified as troubled debt restructuring | $ 0 | $ 0 |
Total value of modified loans in troubled debt restructurings | 6,300,000 | 6,600,000 |
Trouble debt restructuring classified as performing | 5,700,000 | 5,900,000 |
Specific reserve related to TDR | $ 649,000 | 582,000 |
Reclassification due to the adoption of ASU 2018-02 | $ (223,000) | |
Number of loans modified | loan | 1 | 0 |
Increase in allowance for loan losses | $ 83,000 | |
Charge-offs related to trouble debt restructurings | 0 | $ 0 |
Net increase (decrease) in allowance for loans losses | 67,000 | (28,000) |
Commercial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans | 93,755,000 | 89,056,000 |
Commercial | Small Business Administration Loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans | 170,000 | |
Commercial | Secured by real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans | $ 28,790,000 | 31,684,000 |
Number of loans modified | loan | 1 | |
Commercial real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans | $ 504,522,000 | 493,542,000 |
Commercial real estate | Small Business Administration Loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans | 3,561,000 | |
Consumer | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans | 36,575,000 | 32,770,000 |
Consumer | Secured by real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total gross loans | $ 36,120,000 | $ 32,207,000 |
LOANS AND ALLOWANCE FOR LOAN _5
LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of Allowance for Loan Losses) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Activity in the allowance for loan losses | ||
Balance beginning of period | $ 8,762 | $ 7,905 |
Provision for loan losses | (1,615) | 655 |
Loans charged-off | (31) | (4) |
Recoveries of loans charged-off | 810 | 206 |
Balance end of period | 7,926 | 8,762 |
Commercial | ||
Activity in the allowance for loan losses | ||
Balance beginning of period | 3,058 | 2,663 |
Provision for loan losses | (468) | 301 |
Loans charged-off | (29) | (3) |
Recoveries of loans charged-off | 142 | 97 |
Balance end of period | 2,703 | 3,058 |
Commercial real estate | ||
Activity in the allowance for loan losses | ||
Balance beginning of period | 5,531 | 4,734 |
Provision for loan losses | (1,249) | 697 |
Loans charged-off | 0 | 0 |
Recoveries of loans charged-off | 665 | 100 |
Balance end of period | 4,947 | 5,531 |
Commercial construction | ||
Activity in the allowance for loan losses | ||
Balance beginning of period | 33 | 355 |
Provision for loan losses | 98 | (322) |
Loans charged-off | 0 | 0 |
Recoveries of loans charged-off | 0 | 0 |
Balance end of period | 131 | 33 |
Residential real estate | ||
Activity in the allowance for loan losses | ||
Balance beginning of period | 68 | 66 |
Provision for loan losses | (3) | 2 |
Loans charged-off | 0 | 0 |
Recoveries of loans charged-off | 0 | 0 |
Balance end of period | 65 | 68 |
Consumer | ||
Activity in the allowance for loan losses | ||
Balance beginning of period | 64 | 75 |
Provision for loan losses | 2 | (19) |
Loans charged-off | 0 | 0 |
Recoveries of loans charged-off | 2 | 8 |
Balance end of period | 68 | 64 |
Other | ||
Activity in the allowance for loan losses | ||
Balance beginning of period | 1 | 0 |
Provision for loan losses | 1 | 1 |
Loans charged-off | (2) | (1) |
Recoveries of loans charged-off | 1 | 1 |
Balance end of period | 1 | 1 |
Unallocated | ||
Activity in the allowance for loan losses | ||
Balance beginning of period | 7 | 12 |
Provision for loan losses | 4 | (5) |
Loans charged-off | 0 | 0 |
Recoveries of loans charged-off | 0 | 0 |
Balance end of period | $ 11 | $ 7 |
LOANS AND ALLOWANCE FOR LOAN _6
LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of Allowance for Loan Losses and Recorded Investment) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Ending balances: Allowance for loan losses | ||
Individually evaluated for impairment | $ 649 | $ 609 |
Collectively evaluated for impairment | 7,277 | 8,153 |
Total ending allowance balance | 7,926 | 8,762 |
Ending balances: Loans | ||
Loans individually evaluated for impairment | 7,288 | 7,142 |
Loans collectively evaluated for impairment | 726,499 | 704,578 |
Total loans | 733,787 | 711,720 |
Commercial | ||
Ending balances: Allowance for loan losses | ||
Individually evaluated for impairment | 88 | 34 |
Collectively evaluated for impairment | 2,615 | 3,024 |
Total ending allowance balance | 2,703 | 3,058 |
Ending balances: Loans | ||
Loans individually evaluated for impairment | 633 | 549 |
Loans collectively evaluated for impairment | 93,122 | 88,507 |
Total loans | 93,755 | 89,056 |
Commercial real estate | ||
Ending balances: Allowance for loan losses | ||
Individually evaluated for impairment | 561 | 575 |
Collectively evaluated for impairment | 4,386 | 4,956 |
Total ending allowance balance | 4,947 | 5,531 |
Ending balances: Loans | ||
Loans individually evaluated for impairment | 6,079 | 6,236 |
Loans collectively evaluated for impairment | 498,443 | 487,306 |
Total loans | 504,522 | 493,542 |
Commercial construction | ||
Ending balances: Allowance for loan losses | ||
Individually evaluated for impairment | 0 | 0 |
Collectively evaluated for impairment | 131 | 33 |
Total ending allowance balance | 131 | 33 |
Ending balances: Loans | ||
Loans individually evaluated for impairment | 0 | 0 |
Loans collectively evaluated for impairment | 9,787 | 2,152 |
Total loans | 9,787 | 2,152 |
Residential real estate | ||
Ending balances: Allowance for loan losses | ||
Individually evaluated for impairment | 0 | 0 |
Collectively evaluated for impairment | 65 | 68 |
Total ending allowance balance | 65 | 68 |
Ending balances: Loans | ||
Loans individually evaluated for impairment | 576 | 295 |
Loans collectively evaluated for impairment | 81,915 | 85,465 |
Total loans | 82,491 | 85,760 |
Consumer | ||
Ending balances: Allowance for loan losses | ||
Individually evaluated for impairment | 0 | 0 |
Collectively evaluated for impairment | 68 | 64 |
Total ending allowance balance | 68 | 64 |
Ending balances: Loans | ||
Loans individually evaluated for impairment | 0 | 62 |
Loans collectively evaluated for impairment | 36,575 | 32,708 |
Total loans | 36,575 | 32,770 |
Government Guaranteed | ||
Ending balances: Allowance for loan losses | ||
Individually evaluated for impairment | 0 | 0 |
Collectively evaluated for impairment | 0 | 0 |
Total ending allowance balance | 0 | 0 |
Ending balances: Loans | ||
Loans individually evaluated for impairment | 0 | 0 |
Loans collectively evaluated for impairment | 6,559 | 8,334 |
Total loans | 6,559 | 8,334 |
Other | ||
Ending balances: Allowance for loan losses | ||
Individually evaluated for impairment | 0 | 0 |
Collectively evaluated for impairment | 1 | 1 |
Total ending allowance balance | 1 | 1 |
Ending balances: Loans | ||
Loans individually evaluated for impairment | 0 | 0 |
Loans collectively evaluated for impairment | 98 | 106 |
Total loans | 98 | 106 |
Unallocated | ||
Ending balances: Allowance for loan losses | ||
Individually evaluated for impairment | 0 | 0 |
Collectively evaluated for impairment | 11 | 7 |
Total ending allowance balance | 11 | 7 |
Ending balances: Loans | ||
Loans individually evaluated for impairment | 0 | 0 |
Loans collectively evaluated for impairment | 0 | 0 |
Total loans | $ 0 | $ 0 |
LOANS AND ALLOWANCE FOR LOAN _7
LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of Recorded Investment in Nonaccrual Loans) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total nonaccrual loans | $ 1,544 | $ 1,194 |
Commercial | Secured by real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total nonaccrual loans | 394 | 136 |
Commercial real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total nonaccrual loans | 574 | 701 |
Residential real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total nonaccrual loans | 576 | 295 |
Consumer | Secured by real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total nonaccrual loans | $ 0 | $ 62 |
LOANS AND ALLOWANCE FOR LOAN _8
LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of Recorded Investments in Impaired Loans) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Total impaired loans | ||
Unpaid Principal Balance | $ 7,658 | $ 7,470 |
Recorded Investment | 7,288 | 7,142 |
Allowance for Loan Losses Allocated | 649 | 609 |
Average Recorded Investment | 7,172 | 7,601 |
Interest Income Recognized | 292 | 331 |
Commercial | Secured by real estate | ||
With no related allowance recorded: | ||
Unpaid Principal Balance | 447 | 389 |
Recorded Investment | 416 | 389 |
Average Recorded Investment | 455 | 964 |
Interest Income Recognized | 11 | 70 |
With an allowance recorded: | ||
Unpaid Principal Balance | 95 | 33 |
Recorded Investment | 95 | 32 |
Average Recorded Investment | 65 | 45 |
Interest Income Recognized | 3 | 0 |
Total impaired loans | ||
Allowance for Loan Losses Allocated | 83 | 27 |
Commercial | Other | ||
With an allowance recorded: | ||
Unpaid Principal Balance | 122 | 128 |
Recorded Investment | 122 | 128 |
Average Recorded Investment | 125 | 171 |
Interest Income Recognized | 9 | 12 |
Total impaired loans | ||
Allowance for Loan Losses Allocated | 5 | 7 |
Commercial real estate | ||
With no related allowance recorded: | ||
Unpaid Principal Balance | 3,329 | 3,442 |
Recorded Investment | 3,001 | 3,124 |
Average Recorded Investment | 3,061 | 3,148 |
Interest Income Recognized | 108 | 121 |
With an allowance recorded: | ||
Unpaid Principal Balance | 3,078 | 3,112 |
Recorded Investment | 3,078 | 3,112 |
Average Recorded Investment | 3,095 | 3,144 |
Interest Income Recognized | 161 | 128 |
Total impaired loans | ||
Allowance for Loan Losses Allocated | 561 | 575 |
Residential real estate | ||
With no related allowance recorded: | ||
Unpaid Principal Balance | 587 | 295 |
Recorded Investment | 576 | 295 |
Average Recorded Investment | 343 | 59 |
Interest Income Recognized | 0 | 0 |
Consumer | Secured by real estate | ||
With no related allowance recorded: | ||
Unpaid Principal Balance | 0 | 71 |
Recorded Investment | 0 | 62 |
Average Recorded Investment | 28 | 70 |
Interest Income Recognized | $ 0 | $ 0 |
LOANS AND ALLOWANCE FOR LOAN _9
LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of Aging of the Recorded Investment in Past Due Loans by Class of Loans) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Aging analysis of past due loans | ||
Total Past Due | $ 3,527 | $ 1,435 |
Loans Not Past Due | 730,260 | 710,285 |
Total loans | 733,787 | 711,720 |
30-59 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 2,274 | 808 |
60-89 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 42 | 0 |
Greater than 90 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 1,211 | 627 |
Commercial | ||
Aging analysis of past due loans | ||
Total loans | 93,755 | 89,056 |
Commercial | Secured by real estate | ||
Aging analysis of past due loans | ||
Total Past Due | 394 | 186 |
Loans Not Past Due | 28,396 | 31,498 |
Total loans | 28,790 | 31,684 |
Commercial | Secured by real estate | 30-59 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 186 |
Commercial | Secured by real estate | 60-89 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 0 |
Commercial | Secured by real estate | Greater than 90 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 394 | 0 |
Commercial | Other | ||
Aging analysis of past due loans | ||
Total Past Due | 6 | 8 |
Loans Not Past Due | 64,959 | 57,364 |
Total loans | 64,965 | 57,372 |
Commercial | Other | 30-59 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 6 | 8 |
Commercial | Other | 60-89 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 0 |
Commercial | Other | Greater than 90 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 0 |
Commercial real estate | ||
Aging analysis of past due loans | ||
Total Past Due | 2,664 | 899 |
Loans Not Past Due | 501,858 | 492,643 |
Total loans | 504,522 | 493,542 |
Commercial real estate | 30-59 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 2,155 | 300 |
Commercial real estate | 60-89 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 0 |
Commercial real estate | Greater than 90 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 509 | 599 |
Commercial construction | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 0 |
Loans Not Past Due | 9,787 | 2,152 |
Total loans | 9,787 | 2,152 |
Commercial construction | 30-59 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 0 |
Commercial construction | 60-89 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 0 |
Commercial construction | Greater than 90 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 0 |
Residential real estate | ||
Aging analysis of past due loans | ||
Total Past Due | 462 | 314 |
Loans Not Past Due | 82,029 | 85,446 |
Total loans | 82,491 | 85,760 |
Residential real estate | 30-59 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 112 | 314 |
Residential real estate | 60-89 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 42 | 0 |
Residential real estate | Greater than 90 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 308 | 0 |
Consumer | ||
Aging analysis of past due loans | ||
Total loans | 36,575 | 32,770 |
Consumer | Secured by real estate | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 28 |
Loans Not Past Due | 36,120 | 32,179 |
Total loans | 36,120 | 32,207 |
Consumer | Secured by real estate | 30-59 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 0 |
Consumer | Secured by real estate | 60-89 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 0 |
Consumer | Secured by real estate | Greater than 90 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 28 |
Consumer | Other | ||
Aging analysis of past due loans | ||
Total Past Due | 1 | 0 |
Loans Not Past Due | 454 | 563 |
Total loans | 455 | 563 |
Consumer | Other | 30-59 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 1 | 0 |
Consumer | Other | 60-89 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 0 |
Consumer | Other | Greater than 90 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 0 |
Government Guaranteed | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 0 |
Loans Not Past Due | 6,559 | 8,334 |
Total loans | 6,559 | 8,334 |
Government Guaranteed | 30-59 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 0 |
Government Guaranteed | 60-89 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 0 |
Government Guaranteed | Greater than 90 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 0 |
Other | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 0 |
Loans Not Past Due | 98 | 106 |
Total loans | 98 | 106 |
Other | 30-59 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 0 |
Other | 60-89 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | 0 | 0 |
Other | Greater than 90 Days Past Due | ||
Aging analysis of past due loans | ||
Total Past Due | $ 0 | $ 0 |
LOANS AND ALLOWANCE FOR LOAN_10
LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of Troubled Debt Restructurings) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)loan | Dec. 31, 2017loan | |
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 1 | 0 |
Pre- Modification Recorded Investment | $ 95 | |
Post- Modification Recorded Investment | $ 95 | |
Commercial | Secured by real estate | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 1 | |
Pre- Modification Recorded Investment | $ 95 | |
Post- Modification Recorded Investment | $ 95 |
LOANS AND ALLOWANCE FOR LOAN_11
LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of Loans by Credit Quality Indicators) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | $ 733,787 | $ 711,720 |
Commercial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 93,755 | 89,056 |
Commercial | Secured by real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 28,790 | 31,684 |
Commercial | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 64,965 | 57,372 |
Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 504,522 | 493,542 |
Commercial construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 9,787 | 2,152 |
Government Guaranteed Loans guaranteed portion | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 6,559 | 8,334 |
Receivables Acquired with Deteriorated Credit Quality | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 614,623 | 593,084 |
Receivables Acquired with Deteriorated Credit Quality | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 597,324 | 577,586 |
Receivables Acquired with Deteriorated Credit Quality | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 8,501 | 12,392 |
Receivables Acquired with Deteriorated Credit Quality | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 8,798 | 3,106 |
Receivables Acquired with Deteriorated Credit Quality | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 0 | 0 |
Receivables Acquired with Deteriorated Credit Quality | Loss | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 0 | 0 |
Receivables Acquired with Deteriorated Credit Quality | Commercial | Secured by real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 28,790 | 31,684 |
Receivables Acquired with Deteriorated Credit Quality | Commercial | Secured by real estate | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 26,879 | 29,025 |
Receivables Acquired with Deteriorated Credit Quality | Commercial | Secured by real estate | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 1,234 | 2,153 |
Receivables Acquired with Deteriorated Credit Quality | Commercial | Secured by real estate | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 677 | 506 |
Receivables Acquired with Deteriorated Credit Quality | Commercial | Secured by real estate | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 0 | 0 |
Receivables Acquired with Deteriorated Credit Quality | Commercial | Secured by real estate | Loss | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 0 | 0 |
Receivables Acquired with Deteriorated Credit Quality | Commercial | Other | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 64,965 | 57,372 |
Receivables Acquired with Deteriorated Credit Quality | Commercial | Other | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 63,438 | 56,632 |
Receivables Acquired with Deteriorated Credit Quality | Commercial | Other | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 181 | 216 |
Receivables Acquired with Deteriorated Credit Quality | Commercial | Other | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 1,346 | 524 |
Receivables Acquired with Deteriorated Credit Quality | Commercial | Other | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 0 | 0 |
Receivables Acquired with Deteriorated Credit Quality | Commercial | Other | Loss | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 0 | 0 |
Receivables Acquired with Deteriorated Credit Quality | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 504,522 | 493,542 |
Receivables Acquired with Deteriorated Credit Quality | Commercial real estate | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 490,661 | 481,443 |
Receivables Acquired with Deteriorated Credit Quality | Commercial real estate | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 7,086 | 10,023 |
Receivables Acquired with Deteriorated Credit Quality | Commercial real estate | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 6,775 | 2,076 |
Receivables Acquired with Deteriorated Credit Quality | Commercial real estate | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 0 | 0 |
Receivables Acquired with Deteriorated Credit Quality | Commercial real estate | Loss | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 0 | 0 |
Receivables Acquired with Deteriorated Credit Quality | Commercial construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 9,787 | 2,152 |
Receivables Acquired with Deteriorated Credit Quality | Commercial construction | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 9,787 | 2,152 |
Receivables Acquired with Deteriorated Credit Quality | Commercial construction | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 0 | 0 |
Receivables Acquired with Deteriorated Credit Quality | Commercial construction | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 0 | 0 |
Receivables Acquired with Deteriorated Credit Quality | Commercial construction | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 0 | 0 |
Receivables Acquired with Deteriorated Credit Quality | Commercial construction | Loss | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 0 | 0 |
Receivables Acquired with Deteriorated Credit Quality | Government Guaranteed Loans guaranteed portion | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 6,559 | 8,334 |
Receivables Acquired with Deteriorated Credit Quality | Government Guaranteed Loans guaranteed portion | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 6,559 | 8,334 |
Receivables Acquired with Deteriorated Credit Quality | Government Guaranteed Loans guaranteed portion | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 0 | 0 |
Receivables Acquired with Deteriorated Credit Quality | Government Guaranteed Loans guaranteed portion | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 0 | 0 |
Receivables Acquired with Deteriorated Credit Quality | Government Guaranteed Loans guaranteed portion | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | 0 | 0 |
Receivables Acquired with Deteriorated Credit Quality | Government Guaranteed Loans guaranteed portion | Loss | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total Loans | $ 0 | $ 0 |
LOANS AND ALLOWANCE FOR LOAN_12
LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of Recorded Investment in Residential and Consumer Loans) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | $ 733,787 | $ 711,720 |
Residential real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Current | 81,761 | 85,446 |
30 Days Past Due and Nonaccrual | 730 | 314 |
Total loans | 82,491 | 85,760 |
Consumer | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans | 36,575 | 32,770 |
Consumer | Secured by real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Current | 36,120 | 32,179 |
30 Days Past Due and Nonaccrual | 0 | 28 |
Total loans | 36,120 | 32,207 |
Consumer | Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Current | 454 | 563 |
30 Days Past Due and Nonaccrual | 1 | 0 |
Total loans | 455 | 563 |
Residential and Consumer | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Current | 118,335 | 118,188 |
30 Days Past Due and Nonaccrual | 731 | 342 |
Total loans | $ 119,066 | $ 118,530 |
PREMISES AND EQUIPMENT, NET (De
PREMISES AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Premise and equipment, gross | $ 11,846 | $ 11,273 |
Less: accumulated depreciation and amortization | 4,839 | 4,364 |
Total premises & equipment, net | 7,007 | 6,909 |
Depreciation and amortization | 475 | 399 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Premise and equipment, gross | 3,240 | 3,240 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Premise and equipment, gross | 4,654 | 4,505 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Premise and equipment, gross | 1,925 | 1,923 |
Furniture, fixtures, and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Premise and equipment, gross | $ 2,027 | $ 1,605 |
OTHER REAL ESTATE OWNED (Schedu
OTHER REAL ESTATE OWNED (Schedule of Activity in Allowance for Losses on Other Real Estate Owned) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for Loan Losses - Other Real Estate Owned | ||
Beginning of year | $ 0 | $ 3,000 |
Additions charged to expense | $ 0 | 0 |
Reductions from sales of other real estate owned | (3,000) | |
End of year | $ 0 |
OTHER REAL ESTATE OWNED (Narrat
OTHER REAL ESTATE OWNED (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
OTHER REAL ESTATE OWNED [Abstract] | ||
Other real estate owned, net | $ 0 | $ 0 |
Valuation allowance activity | 0 | |
Net gain on sale of other real estate owned | 0 | 13,000 |
Additions charged to expense | $ 0 | $ 0 |
OTHER REAL ESTATE OWNED (Sche_2
OTHER REAL ESTATE OWNED (Schedule of Expenses Related to Other Real Estate Owned) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
OTHER REAL ESTATE OWNED [Abstract] | ||
Provision for unrealized losses | $ 0 | $ 0 |
Operating expenses, net of rental income | 24,000 | |
End of year | $ 24,000 |
DEPOSITS (Schedule of Deposit L
DEPOSITS (Schedule of Deposit Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deposits: | ||
Noninterest-bearing demand | $ 174,717 | $ 172,861 |
Interest-bearing checking accounts | 175,215 | 196,924 |
Money market accounts | 149,936 | 110,256 |
Total interest-bearing demand | 325,151 | 307,180 |
Statement savings and clubs | 71,472 | 77,284 |
Business savings | 5,273 | 5,830 |
Total savings | 76,745 | 83,114 |
IRA investment and variable rate savings | 31,876 | 33,236 |
Brokered certificates | 37,063 | 25,944 |
Money market certificates | 136,539 | 141,764 |
Total certificates of deposit | 205,478 | 200,944 |
Total interest-bearing deposits | 607,374 | 591,238 |
Total deposits | $ 782,091 | $ 764,099 |
DEPOSITS (Narrative) (Details)
DEPOSITS (Narrative) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
DEPOSITS [Abstract] | ||
Certificates of deposit with balances of $250,000 or more | $ 59,421,000 | $ 42,810,000 |
Deposits from executive officers and directors | $ 3,627,000 | $ 3,793,000 |
DEPOSITS (Schedule of Maturitie
DEPOSITS (Schedule of Maturities of Time Deposits) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Maturities of certificates of deposits in fiscal year: | ||
2019 | $ 115,418 | |
2020 | 45,973 | |
2021 | 34,421 | |
2022 | 7,132 | |
2023 | 2,534 | |
Total certificates of deposit | $ 205,478 | $ 200,944 |
DEPOSITS (Schedule of Interest
DEPOSITS (Schedule of Interest on Deposits) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Banking and Thrift [Abstract] | ||
Total interest bearing demand | $ 2,147 | $ 709 |
Total savings | 83 | 91 |
Total certificates of deposit | 3,063 | 2,389 |
Total interest expense | $ 5,293 | $ 3,189 |
BORROWINGS (Schedule of Maturit
BORROWINGS (Schedule of Maturities of FHLB Advances) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Amount | ||
Within one year | $ 45,700 | $ 20,760 |
After one year, but within two years | 5,000 | 33,000 |
After two years, but within three years | 5,000 | 5,000 |
After three years, but within four years | 0 | 5,000 |
After four years, but within five years | 10,000 | 0 |
Advances from Federal Home Loan Banks | $ 65,700 | $ 63,760 |
Weighted Average Rate | ||
Within one year | 1.99% | 1.59% |
After one year, but within two years | 1.88% | 1.76% |
After two years, but within three years | 1.68% | 1.88% |
After three years, but within four years | 0.00% | 1.68% |
After four years, but within five years | 3.25% | 0.00% |
Total advances maturing | 2.15% | 1.71% |
BORROWINGS (Narrative) (Details
BORROWINGS (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Maximum FHLB advances outstanding at any month end | $ 65,800,000 | $ 93,800,000 |
Average Balance of FHLB advances outstanding | 52,400,000 | 74,400,000 |
Additional borrowing capacity from FHLB | 150,200,000 | 122,300,000 |
Overnight borrowings with FHLB | 12,700,000 | 0 |
Borrowing capacity at the Federal Reserve Bank discount window | 3,300,000 | 4,700,000 |
Overnight variable pricing lines with other correspondent banks | 38,000,000 | 38,000,000 |
Federal Home Loan Bank Advances - new borrowings | ||
Debt Instrument [Line Items] | ||
Assets pledged as security for FHLB advances | 68,200,000 | 73,000,000 |
Investment Securities | ||
Debt Instrument [Line Items] | ||
Assets pledged as security for FHLB advances | 44,100,000 | 49,300,000 |
Federal Reserve Bank Advances | ||
Debt Instrument [Line Items] | ||
Borrowings on the Federal Reserve Bank | 0 | $ 0 |
Commercial real estate | ||
Debt Instrument [Line Items] | ||
Assets pledged as security for FHLB advances | $ 37,800,000 |
SUBORDINATED DEBENTURES AND S_3
SUBORDINATED DEBENTURES AND SUBORDINATED NOTES (Schedule of Subordinated Debentures and Subordinated Notes) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
SUBORDINATED DEBENTURES AND SUBORDINATED NOTES [Line Items] | ||
Subordinated debt, carrying amount | $ 23,382 | $ 23,317 |
Fixed / Floating Rate Junior Subordinated Debentures | ||
SUBORDINATED DEBENTURES AND SUBORDINATED NOTES [Line Items] | ||
Subordinated debt, carrying amount | 7,217 | 7,217 |
Fixed Rate Subordinated Notes | ||
SUBORDINATED DEBENTURES AND SUBORDINATED NOTES [Line Items] | ||
Subordinated debt, carrying amount | $ 16,165 | $ 16,100 |
SUBORDINATED DEBENTURES AND S_4
SUBORDINATED DEBENTURES AND SUBORDINATED NOTES (Narrative) (Details) | Sep. 17, 2003USD ($) | Dec. 31, 2018USD ($)Item | Dec. 31, 2017USD ($) | Aug. 28, 2015USD ($) | Sep. 17, 2008 |
SUBORDINATED DEBENTURES AND SUBORDINATED NOTES [Line Items] | |||||
Subordinated debentures and subordinated notes | $ 23,382,000 | $ 23,317,000 | |||
Fixed / Floating Rate Junior Subordinated Debentures | |||||
SUBORDINATED DEBENTURES AND SUBORDINATED NOTES [Line Items] | |||||
Securities issued by the trust | $ 7,000,000 | ||||
Sale of fixed/floating rate junior subordinated deferrable interest debentures from the company to the trust | $ 7,217,000 | ||||
Interest rate of securities and debentures (percentage) | 6.75% | ||||
Interest rate of debentures (percentage) | 5.74% | 4.55% | |||
Number of maximum extended period for interest payment | Item | 20 | ||||
Subordinated Notes | |||||
SUBORDINATED DEBENTURES AND SUBORDINATED NOTES [Line Items] | |||||
Debt instrument, face amount | $ 16,600,000 | ||||
Debt instrument, interest rate (percentage) | 6.75% | ||||
Subordinated debentures and subordinated notes | $ 16,200,000 | $ 16,100,000 | |||
Unamortized debt issuance costs | $ 435,000 | $ 500,000 | |||
London Interbank Offered Rate (LIBOR) | Fixed / Floating Rate Junior Subordinated Debentures | |||||
SUBORDINATED DEBENTURES AND SUBORDINATED NOTES [Line Items] | |||||
Spread on variable rate (percentage) | 2.95% |
REGULATORY CAPITAL REQUIREMEN_3
REGULATORY CAPITAL REQUIREMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Corporation | ||
Tier 1 Leverage Capital (to average assets) | ||
Tier 1 Leverage ratio, Actual, Amount | $ 89,086 | $ 81,886 |
Tier 1 Leverage ratio, Actual, Ratio (percentage) | 9.33% | 8.88% |
Tier 1 Leverage ratio, Required for Capital Adequacy Purposes, Amount | $ 38,213 | $ 36,867 |
Tier 1 Leverage ratio, Required for Capital Adequacy Purposes, Ratio (percentage) | 4.00% | 4.00% |
Tier 1 Capital (to risk-weighted assets) | ||
Tier 1, Actual, Amount | $ 89,086 | $ 81,886 |
Tier 1, Actual, Ratio (as a percent) | 11.33% | 10.96% |
Tier 1, Required for Capital Adequacy Purposes, Amount | $ 31,461 | $ 29,889 |
Tier 1, Required for Capital Adequacy Purposes, Ratio (as a percent) | 4.00% | 4.00% |
Total Capital | ||
Total, Actual, Amount | $ 113,178 | $ 106,748 |
Total, Actual, Ratio (percentage) | 14.39% | 14.29% |
Total, Required for Capital Adequacy Purposes, Amount | $ 62,922 | $ 59,777 |
Total, Required for Capital Adequacy Purposes, Ratio (percentage) | 8.00% | 8.00% |
Bank | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Conservation buffer (as a percent) | 5.54% | |
Tier 1 Leverage Capital (to average assets) | ||
Tier 1 Leverage ratio, Actual, Amount | $ 99,761 | $ 92,824 |
Tier 1 Leverage ratio, Actual, Ratio (percentage) | 10.49% | 10.12% |
Tier 1 Leverage ratio, Required for Capital Adequacy Purposes, Amount | $ 38,032 | $ 36,698 |
Tier 1 Leverage ratio, Required for Capital Adequacy Purposes, Ratio (percentage) | 4.00% | 4.00% |
Tier 1 Leverage ratio, To Be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 47,540 | $ 45,872 |
Tier 1 Leverage ratio, To Be Well Capitalized Under Prompt Corrective Action Regulations, Ratio (percentage) | 5.00% | 5.00% |
Tier 1 Capital (to risk-weighted assets) | ||
Common Equity Tier 1, Actual, Amount | $ 99,761 | $ 92,824 |
Common Equity Tier 1, Actual, Ratio (percentage) | 12.54% | 12.24% |
Common Equity Tier 1, Required for Capital Adequacy Purposes, Amount | $ 35,798 | $ 34,113 |
Common Equity Tier 1, Required for Capital Adequacy Purposes, Ratio (percentage) | 4.50% | 4.50% |
Common Equity Tier 1, To Be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 51,708 | $ 49,274 |
Common Equity Tier 1, To Be Well Capitalized Under Prompt Corrective Action Regulations, Ratio (percentage) | 6.50% | 6.50% |
Tier 1, Actual, Amount | $ 99,761 | $ 92,824 |
Tier 1, Actual, Ratio (as a percent) | 12.54% | 12.24% |
Tier 1, Required for Capital Adequacy Purposes, Amount | $ 47,731 | $ 45,484 |
Tier 1, Required for Capital Adequacy Purposes, Ratio (as a percent) | 6.00% | 6.00% |
Tier 1, To Be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 63,641 | $ 60,645 |
Tier 1, To Be Well Capitalized Under Prompt Corrective Action Regulations, Ratio (percentage) | 8.00% | 8.00% |
Total Capital | ||
Total, Actual, Amount | $ 107,687 | $ 101,586 |
Total, Actual, Ratio (percentage) | 13.54% | 13.40% |
Total, Required for Capital Adequacy Purposes, Amount | $ 63,641 | $ 60,645 |
Total, Required for Capital Adequacy Purposes, Ratio (percentage) | 8.00% | 8.00% |
Total, To Be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 79,551 | $ 75,807 |
Total, To Be Well Capitalized Under Prompt Corrective Action Regulations, Ratio (percentage) | 10.00% | 10.00% |
BENEFIT PLANS (Details)
BENEFIT PLANS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | ||
Maximum employee contribution as a percentage of salary | 100.00% | |
Maximum employer contribution as a percentage of the first 5% of employee contribution | 50.00% | |
Maximum percentage of employee contribution used for basis for employer contribution | 7.00% | |
Defined benefit plan, contributions by employer | $ 213 | $ 173 |
Total stock purchases (shares) | 2,863 | 2,724 |
Number of shares reserved for issuance | 165,706 | |
Supplemental Employee Retirement Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, monthly installments per participant period | 180 months | |
Benefits expense | $ 444 | $ 258 |
Defined benefit plan liability | $ 702 | $ 258 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost related to non-vested stock grants | $ 282 | |
Director Stock Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares purchased for plan (in shares) | 2,644 | 2,855 |
Awards authorized but unissued (in shares) | 512,005 | |
2010 Stock Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards authorized but unissued (in shares) | 64,528 | |
Restricted shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period (years) | 3 years | |
Stock-based compensation expense for stock grant | $ 97 | $ 62 |
Unrecognized compensation cost related to non-vested stock grants, period of recognition | 26 months | |
Awards granted (shares) | 28,221 | 20,876 |
Restricted shares | Board of Directors | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense for stock grant | $ 50 | |
Awards granted (shares) | 0 | 5,000 |
STOCK-BASED COMPENSATION (Sched
STOCK-BASED COMPENSATION (Schedule of Changes in Nonvested Restricted Shares) (Details) - Restricted shares - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Shares | ||
Balance January 1 (shares) | 51,528 | 68,586 |
Granted (shares) | 28,221 | 20,876 |
Vested (shares) | (28,066) | (34,675) |
Forfeited (shares) | (2,131) | (3,259) |
Balance December 31 (shares) | 49,552 | 51,528 |
Weighted Average Grant Date Fair Value | ||
Balance January 1 (in usd per share) | $ 6.91 | $ 5.52 |
Granted (in usd per share) | 10.65 | 8.88 |
Vested (in usd per share) | 4.39 | 5.40 |
Forfeited (in usd per share) | 9.82 | 6.41 |
Balance December 31 (in usd per share) | $ 10.34 | $ 6.91 |
Shares forfeited to cover taxes (shares) | 9,835 | 13,288 |
EARNINGS PER COMMON SHARE (Sche
EARNINGS PER COMMON SHARE (Schedule of Earnings Per Common Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | ||||||||||
Net income available to common shareholders | $ 8,030 | $ 3,947 | ||||||||
Weighted average common shares outstanding - basic and diluted (in shares) | 8,672,840 | 7,906,791 | ||||||||
Basic and diluted earnings per common share (in usd per share) | $ 0.20 | $ 0.25 | $ 0.27 | $ 0.21 | $ 0.01 | $ 0.19 | $ 0.16 | $ 0.16 | $ 0.93 | $ 0.50 |
EARNINGS PER COMMON SHARE (Narr
EARNINGS PER COMMON SHARE (Narrative) (Details) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 0 |
INCOME TAXES (Schedule of Compo
INCOME TAXES (Schedule of Components of Income Tax Benefit) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current tax expense | ||||||||||
Federal | $ 1,865 | $ 2,438 | ||||||||
State | 1,158 | 919 | ||||||||
Current income tax (benefit) expense | 3,023 | 3,357 | ||||||||
Deferred tax expense | ||||||||||
Federal | 100 | 1,555 | ||||||||
State | (101) | (128) | ||||||||
Valuation allowance | (2) | (8) | ||||||||
Deferred tax (benefit) expense | (3) | 1,419 | ||||||||
Effective federal income taxes | $ 718 | $ 813 | $ 842 | $ 647 | $ 2,494 | $ 972 | $ 736 | $ 574 | $ 3,020 | $ 4,776 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Income expense due to revaluation of deferred tax asset for Tax Act | $ 1,400,000 | |
Unrecognized tax benefits | $ 0 | 0 |
Tax, interest and penalties | 0 | 0 |
Accrued tax interest and penalties | $ 0 | $ 0 |
INCOME TAXES (Schedule of Effec
INCOME TAXES (Schedule of Effective Income Tax Rate Reconciliation) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||||||||||
Federal income tax | $ 2,320 | $ 2,966 | ||||||||
Add (deduct) effect of: | ||||||||||
State income taxes, net of federal income tax effect | 835 | 606 | ||||||||
Nontaxable interest income | (47) | (129) | ||||||||
Effect of change in Federal statutory tax rate | 33 | 1,420 | ||||||||
Bank owned life insurance | (116) | (198) | ||||||||
Nondeductible expenses | (14) | (31) | ||||||||
Change in valuation reserve | (2) | (8) | ||||||||
Out of period adjustment for state fixed asset basis | 0 | 150 | ||||||||
Other | 11 | 0 | ||||||||
Effective federal income taxes | $ 718 | $ 813 | $ 842 | $ 647 | $ 2,494 | $ 972 | $ 736 | $ 574 | $ 3,020 | $ 4,776 |
INCOME TAXES (Schedule of Defer
INCOME TAXES (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Allowance for loan losses | $ 2,285 | $ 2,455 |
Accrued compensation | 109 | 91 |
Nonaccrual loan interest | 30 | 12 |
Depreciation | 94 | 202 |
Contribution carry forward | 0 | 2 |
Mortgage servicing rights | (22) | (5) |
Accrued contributions | 249 | 167 |
Unrealized loss on securities available-for-sale | 836 | 498 |
SERP | 202 | 0 |
Deferred tax assets, gross | 3,783 | 3,422 |
Valuation reserve | 0 | (2) |
Net deferred tax assets | $ 3,783 | $ 3,420 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Other Commitments [Line Items] | ||
Rental expense | $ 888 | $ 873 |
Rental income | 36 | $ 36 |
Commercial, construction and home equity loan commitments | ||
Other Commitments [Line Items] | ||
Commitment to extend credit at variable rates | $ 7,300 | |
Variable interest rate committed to | 5.43% | |
Commitment to extend credit at fixed rates | $ 780 | |
Fixed interest rate agreed to | 4.36% | |
Unused lines of Credit | ||
Other Commitments [Line Items] | ||
Commitments | $ 124,700 | |
Unused lines of Credit | Home Equity Line of Credit | ||
Other Commitments [Line Items] | ||
Commitments | 31,800 | |
Unused lines of Credit | Cash Overdraft | ||
Other Commitments [Line Items] | ||
Commitments | 3,900 | |
Unused lines of Credit | Commercial and Construction | ||
Other Commitments [Line Items] | ||
Commitments | 89,000 | |
Standby Letters of Credit | ||
Other Commitments [Line Items] | ||
Commitments | 2,500 | |
Credit commitment due to expire in next twelve months | $ 2,400 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Operating Leases) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Minimum annual lease payments operating lease agreements | |
2019 | $ 718 |
2020 | 657 |
2021 | 483 |
2022 | 454 |
2023 | 379 |
Thereafter | 666 |
Total | $ 3,357 |
INTEREST RATE SWAP (Narrative)
INTEREST RATE SWAP (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Derivative [Line Items] | ||||
Notional amount | $ 7,000,000 | |||
Fair value of collateral | $ 170,000 | 170,000 | ||
Interest expense | 46,000 | 2,000 | ||
Interest rate swap assets | 134,000 | |||
Interest rate swap liabilities | (246,000) | $ (29,000) | ||
Interest rate swap | ||||
Derivative [Line Items] | ||||
Notional amount | 27,000,000 | $ 7,000,000 | ||
September 1, 2018 | Interest rate swap | ||||
Derivative [Line Items] | ||||
Notional amount | 10,000,000 | $ 10,000,000 | ||
September 1, 2018 | Interest rate swap | ||||
Derivative [Line Items] | ||||
Notional amount | $ 10,000,000 | $ 10,000,000 |
INTEREST RATE SWAP (Detail of I
INTEREST RATE SWAP (Detail of Interest Rate Swap) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Derivative [Line Items] | ||||
Notional Amount | $ 7,000,000 | |||
Unrealized Gain / (Loss) | $ (29,000) | |||
Interest rate swap | ||||
Derivative [Line Items] | ||||
Notional Amount | $ 27,000,000 | $ 7,000,000 | ||
Unrealized Gain / (Loss) | $ (112,000) | |||
Receive | London Interbank Offered Rate (LIBOR) | Interest rate swap | ||||
Derivative [Line Items] | ||||
Receive Rate, basis spread | 2.95% | 2.95% | ||
December 18, 2017 | Interest rate swap | ||||
Derivative [Line Items] | ||||
Notional Amount | $ 7,000,000 | $ 7,000,000 | ||
Unrealized Gain / (Loss) | $ 134,000 | $ (29,000) | ||
December 18, 2017 | Pay | Interest rate swap | ||||
Derivative [Line Items] | ||||
Fixed Pay Rate | 5.323% | 5.323% | ||
September 1, 2018 | Interest rate swap | ||||
Derivative [Line Items] | ||||
Notional Amount | $ 10,000,000 | $ 10,000,000 | ||
Unrealized Gain / (Loss) | $ (84,000) | |||
September 1, 2018 | Pay | Interest rate swap | ||||
Derivative [Line Items] | ||||
Fixed Pay Rate | 2.607% | |||
September 1, 2018 | Interest rate swap | ||||
Derivative [Line Items] | ||||
Notional Amount | $ 10,000,000 | $ 10,000,000 | ||
Unrealized Gain / (Loss) | $ (162,000) | |||
September 1, 2018 | Pay | Interest rate swap | ||||
Derivative [Line Items] | ||||
Fixed Pay Rate | 2.615% |
INTEREST RATE SWAP (Schedule of
INTEREST RATE SWAP (Schedule of Derivatives Recorded in Accumulated Comprehensive Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative [Line Items] | ||
Amount of Gain (Loss) Recognized in OCI (Effective Portion) | $ (56) | |
Amount of Gain (Loss) Recognized in OCI (Effective Portion) | $ (21) | |
Amount of Gain (Loss) Reclassified from OCI to Interest Expense | (46) | |
Amount of Gain (Loss) Reclassified from OCI to Interest Expense | 0 | |
Amount of Gain (Loss) Recognized in Other Noninterest Income (Ineffective Portion) | 0 | |
Amount of Gain (Loss) Recognized in Other Noninterest Income (Ineffective Portion) | 0 | |
December 18, 2017 | ||
Derivative [Line Items] | ||
Amount of Gain (Loss) Recognized in OCI (Effective Portion) | 119 | |
Amount of Gain (Loss) Recognized in OCI (Effective Portion) | (21) | |
Amount of Gain (Loss) Reclassified from OCI to Interest Expense | (16) | |
Amount of Gain (Loss) Reclassified from OCI to Interest Expense | 0 | |
Amount of Gain (Loss) Recognized in Other Noninterest Income (Ineffective Portion) | 0 | |
Amount of Gain (Loss) Recognized in Other Noninterest Income (Ineffective Portion) | $ 0 | |
September 1, 2018 | ||
Derivative [Line Items] | ||
Amount of Gain (Loss) Recognized in OCI (Effective Portion) | (60) | |
Amount of Gain (Loss) Reclassified from OCI to Interest Expense | (15) | |
Amount of Gain (Loss) Recognized in Other Noninterest Income (Ineffective Portion) | 0 | |
September 1, 2018 | ||
Derivative [Line Items] | ||
Amount of Gain (Loss) Recognized in OCI (Effective Portion) | (115) | |
Amount of Gain (Loss) Reclassified from OCI to Interest Expense | (15) | |
Amount of Gain (Loss) Recognized in Other Noninterest Income (Ineffective Portion) | $ 0 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Narrative) (Details) | 12 Months Ended | |
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Provision for loan losses | $ (1,615,000) | $ 655,000 |
Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
OREO properties | 0 | 0 |
Impaired Loans | Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Recorded investment with an allowance recorded | 692,000 | 624,000 |
Provision for loan losses | $ 83,000 | $ 27,000 |
Discount Rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Discount to real estate appraised values | 0.12 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS (Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Available-for-sale securities | ||
Securities available-for-sale | $ 108,811 | $ 109,259 |
Interest Rate Swap | 134 | |
Liabilities: | ||
Interest rate swap | 246 | 29 |
Carrying Value | ||
Available-for-sale securities | ||
U.S. government - sponsored agencies | 25,749 | 21,333 |
Obligations of state and political subdivisions | 3,121 | 3,165 |
Mortgage-backed securities | 62,163 | 63,834 |
Asset-backed securities | 4,922 | 6,698 |
Corporate bonds | 12,856 | 14,229 |
Securities available-for-sale | 108,811 | 109,259 |
Other equity investments | 1,648 | 3,756 |
Interest Rate Swap | 134 | |
Liabilities: | ||
Interest rate swap | 246 | 29 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Available-for-sale securities | ||
Securities available-for-sale | 0 | 0 |
Interest Rate Swap | 0 | |
Liabilities: | ||
Interest rate swap | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Available-for-sale securities | ||
Securities available-for-sale | 108,811 | 109,259 |
Interest Rate Swap | 134 | |
Liabilities: | ||
Interest rate swap | 246 | 29 |
Significant Unobservable Inputs (Level 3) | ||
Available-for-sale securities | ||
Securities available-for-sale | 0 | 0 |
Interest Rate Swap | 0 | |
Liabilities: | ||
Interest rate swap | 0 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Available-for-sale securities | ||
U.S. government - sponsored agencies | 0 | 0 |
Obligations of state and political subdivisions | 0 | 0 |
Mortgage-backed securities | 0 | 0 |
Asset-backed securities | 0 | 0 |
Corporate bonds | 0 | 0 |
Securities available-for-sale | 0 | 0 |
Other equity investments | 1,588 | 3,696 |
Interest Rate Swap | 0 | |
Liabilities: | ||
Interest rate swap | 0 | 0 |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Available-for-sale securities | ||
U.S. government - sponsored agencies | 25,749 | 21,333 |
Obligations of state and political subdivisions | 3,121 | 3,165 |
Mortgage-backed securities | 62,163 | 63,834 |
Asset-backed securities | 4,922 | 6,698 |
Corporate bonds | 12,856 | 14,229 |
Securities available-for-sale | 108,811 | 109,259 |
Other equity investments | 60 | 60 |
Interest Rate Swap | 134 | |
Liabilities: | ||
Interest rate swap | 246 | 29 |
Recurring | Significant Unobservable Inputs (Level 3) | ||
Available-for-sale securities | ||
U.S. government - sponsored agencies | 0 | 0 |
Obligations of state and political subdivisions | 0 | 0 |
Mortgage-backed securities | 0 | 0 |
Asset-backed securities | 0 | 0 |
Corporate bonds | 0 | 0 |
Securities available-for-sale | 0 | 0 |
Other equity investments | 0 | 0 |
Interest Rate Swap | 0 | |
Liabilities: | ||
Interest rate swap | $ 0 | $ 0 |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS (Schedule of Assets and Liabilities Measured at Fair Value on Non-recurring Basis) (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Impaired loans | ||
Real estate assets | $ 0 | $ 0 |
Significant Other Observable Inputs (Level 2) | ||
Impaired loans | ||
Real estate assets | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Impaired loans | ||
Real estate assets | 704,273,000 | 714,387,000 |
Carrying Value | ||
Impaired loans | ||
Real estate assets | 725,404,000 | 702,561,000 |
Nonrecurring | ||
Impaired loans | ||
Residential real estate | 0 | 0 |
Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Impaired loans | ||
Commercial real estate | 0 | |
Real estate assets | 0 | 0 |
Nonrecurring | Significant Other Observable Inputs (Level 2) | ||
Impaired loans | ||
Commercial real estate | 0 | |
Real estate assets | 0 | 0 |
Nonrecurring | Significant Unobservable Inputs (Level 3) | ||
Impaired loans | ||
Commercial real estate | 192,000 | |
Real estate assets | 609,000 | 597,000 |
Nonrecurring | Carrying Value | ||
Impaired loans | ||
Commercial real estate | 192,000 | |
Real estate assets | 609,000 | 597,000 |
Real Estate | Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Impaired loans | ||
Commercial real estate | 0 | 0 |
Real Estate | Nonrecurring | Significant Other Observable Inputs (Level 2) | ||
Impaired loans | ||
Commercial real estate | 0 | 0 |
Real Estate | Nonrecurring | Significant Unobservable Inputs (Level 3) | ||
Impaired loans | ||
Commercial real estate | 301,000 | 109,000 |
Real Estate | Nonrecurring | Carrying Value | ||
Impaired loans | ||
Commercial real estate | 301,000 | 109,000 |
Residential mortgage | Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Impaired loans | ||
Residential real estate | 0 | 0 |
Residential mortgage | Nonrecurring | Significant Other Observable Inputs (Level 2) | ||
Impaired loans | ||
Residential real estate | 0 | 0 |
Residential mortgage | Nonrecurring | Significant Unobservable Inputs (Level 3) | ||
Impaired loans | ||
Residential real estate | 308,000 | 296,000 |
Residential mortgage | Nonrecurring | Carrying Value | ||
Impaired loans | ||
Residential real estate | $ 308,000 | $ 296,000 |
FAIR VALUE OF FINANCIAL INSTR_6
FAIR VALUE OF FINANCIAL INSTRUMENTS (Schedule of Fair Value Assumptions for Level 3 Asset Measurements) (Details) - Nonrecurring - Significant Unobservable Inputs (Level 3) $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Impaired Loans | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Fair Value | $ 609 | $ 597 |
Adjustments for differences between comparable sales and income data available. | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Unobservable Inputs | 0.05 | 0.05 |
Estimated selling costs. | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Unobservable Inputs | 0.07 | 0.07 |
FAIR VALUE OF FINANCIAL INSTR_7
FAIR VALUE OF FINANCIAL INSTRUMENTS (Schedule of Fair Value Estimates for the Financial Instruments) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financial assets: | ||
Securities available-for-sale | $ 108,811 | $ 109,259 |
Securities held-to-maturity | 62,308 | 52,442 |
Other Equity Investments | 1,648 | |
FHLB-NY stock | 3,965 | 3,715 |
Interest Rate Swap | 134 | |
Financial liabilities: | ||
Subordinated Debentures and Subordinated Notes | 23,382 | 23,317 |
Interest rate swap | 246 | 29 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Cash and cash equivalents | 16,823 | 21,270 |
Securities available-for-sale | 0 | 0 |
Securities held-to-maturity | 0 | 0 |
Other Equity Investments | 1,588 | 3,696 |
Mortgage loans held for sale | 0 | |
Loans, net | 0 | 0 |
Interest Rate Swap | 0 | |
Financial liabilities: | ||
Deposits | 578,460 | 565,292 |
FHLB-NY advances | 0 | 0 |
Subordinated Debentures and Subordinated Notes | 0 | 0 |
Interest rate swap | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Cash and cash equivalents | 0 | 0 |
Securities available-for-sale | 108,811 | 109,259 |
Securities held-to-maturity | 60,997 | 51,551 |
Other Equity Investments | 60 | 60 |
Mortgage loans held for sale | 0 | |
Loans, net | 0 | 0 |
Interest Rate Swap | 134 | |
Financial liabilities: | ||
Deposits | 201,846 | 197,696 |
FHLB-NY advances | 65,477 | 63,340 |
Subordinated Debentures and Subordinated Notes | 0 | 0 |
Interest rate swap | 246 | 29 |
Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Cash and cash equivalents | 0 | 0 |
Securities available-for-sale | 0 | 0 |
Securities held-to-maturity | 0 | 0 |
Other Equity Investments | 0 | 0 |
Mortgage loans held for sale | 370 | |
Loans, net | 704,273 | 714,387 |
Interest Rate Swap | 0 | |
Financial liabilities: | ||
Deposits | 0 | 0 |
FHLB-NY advances | 0 | 0 |
Subordinated Debentures and Subordinated Notes | 23,441 | 23,478 |
Interest rate swap | 0 | 0 |
Carrying Value | ||
Financial assets: | ||
Cash and cash equivalents | 16,823 | 21,270 |
Securities available-for-sale | 108,811 | 109,259 |
Securities held-to-maturity | 62,308 | 52,442 |
Other Equity Investments | 1,648 | 3,756 |
FHLB-NY stock | 3,965 | 3,715 |
Mortgage loans held for sale | 370 | |
Loans, net | 725,404 | 702,561 |
Interest Rate Swap | 134 | |
Financial liabilities: | ||
Deposits | 782,091 | 764,099 |
FHLB-NY advances | 65,700 | 63,760 |
Subordinated Debentures and Subordinated Notes | 23,382 | 23,317 |
Interest rate swap | $ 246 | $ 29 |
PARENT COMPANY ONLY (Condensed
PARENT COMPANY ONLY (Condensed Statements of Condition) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | |||
Cash and due from banks | $ 16,340 | $ 20,558 | |
Securities available-for-sale | 108,811 | 109,259 | |
Accrued interest receivable | 2,696 | 2,566 | |
Other assets | 5,332 | 4,834 | |
Total assets | 955,630 | 928,766 | |
Liabilities and Shareholders' equity | |||
Subordinated Debentures | 23,382 | 23,317 | |
Shareholders' equity | 80,150 | 73,665 | $ 51,387 |
Total liabilities and Shareholders' equity | 955,630 | 928,766 | |
Parent Company | |||
Assets | |||
Cash and due from banks | 750 | 378 | |
Securities available-for-sale | 3,877 | 3,911 | |
Investment in subsidiary | 97,861 | 91,689 | |
Accrued interest receivable | 21 | 21 | |
Other assets | 1,458 | 1,435 | |
Total assets | 103,967 | 97,434 | |
Liabilities and Shareholders' equity | |||
Subordinated Debentures | 7,217 | 7,217 | |
Subordinated Notes | 16,165 | 16,100 | |
Other liabilities | 435 | 452 | |
Shareholders' equity | 80,150 | 73,665 | |
Total liabilities and Shareholders' equity | $ 103,967 | $ 97,434 |
PARENT COMPANY ONLY (Condense_2
PARENT COMPANY ONLY (Condensed Statements of Income and Comprehensive Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Income Statements, Captions [Line Items] | ||||||||||
Interest expense | $ 2,247 | $ 2,013 | $ 1,860 | $ 1,716 | $ 1,628 | $ 1,577 | $ 1,409 | $ 1,244 | $ 7,836 | $ 5,858 |
Income before income tax expense | 2,477 | 2,975 | 3,143 | 2,455 | 2,542 | 2,612 | 2,004 | 1,565 | 11,050 | 8,723 |
Tax benefit | 718 | 813 | 842 | 647 | 2,494 | 972 | 736 | 574 | 3,020 | 4,776 |
Net income | $ 1,759 | $ 2,162 | $ 2,301 | $ 1,808 | $ 48 | $ 1,640 | $ 1,268 | $ 991 | 8,030 | 3,947 |
Other comprehensive (loss) | (715) | 160 | ||||||||
Total comprehensive income | 7,315 | 4,107 | ||||||||
Parent Company | ||||||||||
Condensed Income Statements, Captions [Line Items] | ||||||||||
Interest income - securities available-for-sale | 94 | 76 | ||||||||
Dividend income | 2,700 | 2,218 | ||||||||
Other income | 11 | 10 | ||||||||
Total income | 2,805 | 2,304 | ||||||||
Interest expense | 1,575 | 1,492 | ||||||||
Other expenses | 351 | 354 | ||||||||
Total expenses | 1,926 | 1,846 | ||||||||
Income before income tax expense | 879 | 458 | ||||||||
Tax benefit | (381) | (597) | ||||||||
Income before equity in undistributed earnings of subsidiary | 1,260 | 1,055 | ||||||||
Equity in undistributed earnings of subsidiary | 6,770 | 2,892 | ||||||||
Net income | 8,030 | 3,947 | ||||||||
Other comprehensive (loss) | (715) | 160 | ||||||||
Total comprehensive income | $ 7,315 | $ 4,107 |
PARENT COMPANY ONLY (Condense_3
PARENT COMPANY ONLY (Condensed Statements of Cash Flows) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||||||||||
Net income | $ 1,759 | $ 2,162 | $ 2,301 | $ 1,808 | $ 48 | $ 1,640 | $ 1,268 | $ 991 | $ 8,030 | $ 3,947 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Amortization of Subordinated Notes issuance cost | 65 | 65 | ||||||||
Compensation expense on restricted stock, net of forfeitures | 201 | 62 | ||||||||
Gain on calls of securities | 186 | (1) | ||||||||
Increase in accrued interest receivable | (130) | (433) | ||||||||
Decrease (increase) in other assets | (155) | 686 | ||||||||
Increase in other liabilities | 335 | 819 | ||||||||
Net cash provided by operating activities | 7,536 | 8,530 | ||||||||
Cash flows from investing activities: | ||||||||||
Purchase of securities available-for-sale | (17,160) | (29,201) | ||||||||
Proceeds from sales and calls on securities available-for-sale | 1,007 | 500 | ||||||||
Proceeds from maturities and principal repayments on securities available-for-sale | 15,212 | 14,096 | ||||||||
Net cash used in investing activities | (30,884) | (126,730) | ||||||||
Cash flows from financing activities: | ||||||||||
Proceeds from issuance of common stock, net of costs | 0 | 18,860 | ||||||||
Cash dividends paid on common stock | (1,040) | (961) | ||||||||
Payment of discount on dividend reinvestment plan | 4 | 5 | ||||||||
Issuance of common stock | 117 | 167 | ||||||||
Net cash provided by financing activities | 18,901 | 127,790 | ||||||||
Net increase (decrease) in cash and cash equivalents | (4,447) | 9,590 | ||||||||
Cash and cash equivalents - beginning | 21,270 | 11,680 | 21,270 | 11,680 | ||||||
Cash and cash equivalents - ending | 16,823 | 21,270 | 16,823 | 21,270 | ||||||
Parent Company | ||||||||||
Cash flows from operating activities: | ||||||||||
Net income | 8,030 | 3,947 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Equity in undistributed earnings of subsidiary | (6,770) | (2,892) | ||||||||
Amortization of Subordinated Notes issuance cost | 65 | 65 | ||||||||
Compensation expense on restricted stock, net of forfeitures | (122) | 0 | ||||||||
Gain on calls of securities | 0 | (1) | ||||||||
Increase in accrued interest receivable | 0 | (11) | ||||||||
Decrease (increase) in other assets | 92 | (139) | ||||||||
Increase in other liabilities | 4 | 18 | ||||||||
Net cash provided by operating activities | 1,299 | 987 | ||||||||
Cash flows from investing activities: | ||||||||||
Purchase of securities available-for-sale | 0 | (2,999) | ||||||||
Proceeds from sales and calls on securities available-for-sale | 0 | 500 | ||||||||
Proceeds from maturities and principal repayments on securities available-for-sale | 0 | 500 | ||||||||
Investment in subsidiary bank | 0 | (16,800) | ||||||||
Net cash used in investing activities | 0 | (18,799) | ||||||||
Cash flows from financing activities: | ||||||||||
Proceeds from issuance of common stock, net of costs | 0 | 18,860 | ||||||||
Restricted stock-forfeited | 0 | (135) | ||||||||
Cash dividends paid on common stock | (1,040) | (961) | ||||||||
Payment of discount on dividend reinvestment plan | (4) | (5) | ||||||||
Issuance of common stock | 117 | 167 | ||||||||
Net cash provided by financing activities | (927) | 17,926 | ||||||||
Net increase (decrease) in cash and cash equivalents | 372 | 114 | ||||||||
Cash and cash equivalents - beginning | $ 378 | $ 264 | 378 | 264 | ||||||
Cash and cash equivalents - ending | $ 750 | $ 378 | $ 750 | $ 378 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (Schedule of Components of Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Net income, gross | $ 2,477 | $ 2,975 | $ 3,143 | $ 2,455 | $ 2,542 | $ 2,612 | $ 2,004 | $ 1,565 | $ 11,050 | $ 8,723 |
Net income, tax effect | (718) | (813) | (842) | (647) | (2,494) | (972) | (736) | (574) | (3,020) | (4,776) |
Net income | $ 1,759 | $ 2,162 | $ 2,301 | $ 1,808 | $ 48 | $ 1,640 | $ 1,268 | $ 991 | 8,030 | 3,947 |
Other comprehensive income: | ||||||||||
Other comprehensive income (loss), before reclassifications, net | (88) | |||||||||
Other comprehensive income (loss), before reclassifications, net | (677) | 150 | ||||||||
Other comprehensive income (loss), before reclassifications, net | (19) | |||||||||
Reclassification adjustment for gains in net income, net | (4) | (1) | ||||||||
Accretion of loss on securities reclassified to held to maturity, net | 22 | 28 | ||||||||
Total other comprehensive income, gross | (1,081) | 257 | ||||||||
Total other comprehensive income, tax effect | 366 | (97) | ||||||||
Total other comprehensive income, net | (715) | 160 | ||||||||
Total comprehensive income, gross | 9,969 | 8,980 | ||||||||
Total comprehensive income, tax effect | (2,654) | (4,873) | ||||||||
Total comprehensive income | 7,315 | 4,107 | ||||||||
Accumulated Net Investment Gain (Loss) Attributable to Parent | ||||||||||
Other comprehensive income: | ||||||||||
Other comprehensive income, gross | (1,020) | 241 | ||||||||
Other comprehensive income, tax effect | 343 | (91) | ||||||||
Other comprehensive income (loss), before reclassifications, net | (677) | 150 | ||||||||
Reclassification adjustment for gains in net income, gross | (6) | (1) | ||||||||
Reclassification adjustment for gains in net income, tax effect | 2 | 0 | ||||||||
Reclassification adjustment for gains in net income, net | (4) | (1) | ||||||||
Accretion of loss on securities reclassified to held to maturity, gross | 27 | 46 | ||||||||
Accretion of loss on securities reclassified to held to maturity, tax effect | (5) | (18) | ||||||||
Accretion of loss on securities reclassified to held to maturity, net | 22 | 28 | ||||||||
Total other comprehensive income, net | (681) | 149 | ||||||||
Unrealized Gains / (Losses) on Derivatives | ||||||||||
Other comprehensive income: | ||||||||||
Other comprehensive income, gross | (128) | |||||||||
Other comprehensive income, tax effect | 40 | |||||||||
Other comprehensive income (loss), before reclassifications, net | (88) | |||||||||
Reclassification adjustment for gains in net income, gross | 46 | |||||||||
Reclassification adjustment for gains in net income, tax effect | (14) | |||||||||
Reclassification adjustment for gains in net income, net | 32 | |||||||||
Total other comprehensive income, net | $ (56) | |||||||||
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent | ||||||||||
Other comprehensive income: | ||||||||||
Other comprehensive income, gross | (31) | |||||||||
Other comprehensive income, tax effect | 12 | |||||||||
Other comprehensive income (loss), before reclassifications, net | (19) | |||||||||
Reclassification adjustment for gains in net income, gross | 2 | |||||||||
Reclassification adjustment for gains in net income, tax effect | 0 | |||||||||
Reclassification adjustment for gains in net income, net | 2 | |||||||||
Total other comprehensive income, net | $ (17) |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME (Schedule of Components of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Unrealized gains and losses on available for sale (AFS) securities | ||
Balance beginning | $ 73,665 | $ 51,387 |
Other comprehensive income (loss) before reclassifications | (743) | 159 |
Amounts reclassified from other comprehensive income | 28 | 1 |
Total other comprehensive income, net | (715) | 160 |
Reclassification due to the adoption of ASU 2016-01 | 163 | |
Reclassification due to the adoption of ASU 2018-02 | (223) | |
Balance ending | 80,150 | 73,665 |
Unrealized Gains / (Losses) on Available-for-Sale (AFS) Securities | ||
Unrealized gains and losses on available for sale (AFS) securities | ||
Balance beginning | (1,303) | (1,243) |
Other comprehensive income (loss) before reclassifications | (677) | 150 |
Amounts reclassified from other comprehensive income | (4) | (1) |
Total other comprehensive income, net | (681) | 149 |
Reclassification due to the adoption of ASU 2016-01 | 163 | |
Reclassification due to the adoption of ASU 2018-02 | (209) | |
Balance ending | (1,821) | (1,303) |
Loss on Securities Reclassified from Available-for-Sale to Held-to- Maturity | ||
Unrealized gains and losses on available for sale (AFS) securities | ||
Balance beginning | (60) | (78) |
Other comprehensive income (loss) before reclassifications | 22 | 28 |
Amounts reclassified from other comprehensive income | 0 | 0 |
Total other comprehensive income, net | 22 | 28 |
Reclassification due to the adoption of ASU 2016-01 | 0 | |
Reclassification due to the adoption of ASU 2018-02 | (10) | |
Balance ending | (38) | (60) |
Unrealized Gains / (Losses) on Derivatives | ||
Unrealized gains and losses on available for sale (AFS) securities | ||
Balance beginning | (21) | |
Other comprehensive income (loss) before reclassifications | (88) | |
Amounts reclassified from other comprehensive income | 32 | |
Total other comprehensive income, net | (56) | |
Reclassification due to the adoption of ASU 2016-01 | 0 | |
Balance ending | (77) | (21) |
Unrealized Gains / (Losses) on Derivatives | ||
Unrealized gains and losses on available for sale (AFS) securities | ||
Balance beginning | (21) | 0 |
Other comprehensive income (loss) before reclassifications | (19) | |
Amounts reclassified from other comprehensive income | 2 | |
Total other comprehensive income, net | (17) | |
Reclassification due to the adoption of ASU 2018-02 | (4) | |
Balance ending | (21) | |
Accumulated Other Comprehensive Income (Loss) | ||
Unrealized gains and losses on available for sale (AFS) securities | ||
Balance beginning | (1,384) | (1,321) |
Reclassification due to the adoption of ASU 2016-01 | 163 | |
Reclassification due to the adoption of ASU 2018-02 | (223) | |
Balance ending | $ (1,936) | $ (1,384) |
ACCUMULATED OTHER COMPREHENSI_5
ACCUMULATED OTHER COMPREHENSIVE INCOME (Schedule of Amounts Reclassified) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||||||
Tax effect | $ (718) | $ (813) | $ (842) | $ (647) | $ (2,494) | $ (972) | $ (736) | $ (574) | $ (3,020) | $ (4,776) |
Net income available to common shareholders | 8,030 | 3,947 | ||||||||
Total reclassifications, net of tax | (28) | (1) | ||||||||
Unrealized Gains / (Losses) on Available-for-Sale (AFS) Securities | ||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||||||
Total reclassifications, net of tax | 4 | 1 | ||||||||
Unrealized losses on derivatives | ||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||||||
Total reclassifications, net of tax | (32) | |||||||||
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent | ||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||||||
Total reclassifications, net of tax | (2) | |||||||||
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Gains / (Losses) on Available-for-Sale (AFS) Securities | ||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||||||
Gains on securities transactions, net | 6 | 1 | ||||||||
Tax effect | (2) | 0 | ||||||||
Net income available to common shareholders | 4 | 1 | ||||||||
Reclassification out of Accumulated Other Comprehensive Income | Unrealized losses on derivatives | ||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||||||
Tax effect | 14 | |||||||||
Net income available to common shareholders | (32) | |||||||||
Interest expense on derivatives | $ (46) | |||||||||
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent | ||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||||||||
Tax effect | 0 | |||||||||
Net income available to common shareholders | (2) | |||||||||
Interest expense on derivatives | $ (2) |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||||||||||
In-scope noninterest income | $ 2,611 | $ 2,478 | ||||||||
Total out-of-scope noninterest income | 806 | 829 | ||||||||
Total noninterest income | $ 996 | $ 837 | $ 859 | $ 725 | $ 850 | $ 845 | $ 813 | $ 799 | 3,417 | 3,307 |
Overdrafts | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
In-scope noninterest income | 728 | 671 | ||||||||
Interchange | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
In-scope noninterest income | 696 | 646 | ||||||||
Other | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
In-scope noninterest income | 763 | 745 | ||||||||
Total banking service charges and other fees | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
In-scope noninterest income | 2,187 | 2,062 | ||||||||
Miscellaneous | ||||||||||
Disaggregation of Revenue [Line Items] | ||||||||||
In-scope noninterest income | $ 424 | $ 416 |
QUARTERLY FINANCIAL DATA (Una_3
QUARTERLY FINANCIAL DATA (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||
Interest income | $ 9,377 | $ 9,215 | $ 8,868 | $ 8,539 | $ 8,463 | $ 8,400 | $ 7,943 | $ 7,424 | $ 35,999 | $ 32,230 |
Interest expense | 2,247 | 2,013 | 1,860 | 1,716 | 1,628 | 1,577 | 1,409 | 1,244 | 7,836 | 5,858 |
Net interest income before provision for loan losses | 7,130 | 7,202 | 7,008 | 6,823 | 6,835 | 6,823 | 6,534 | 6,180 | 28,163 | 26,372 |
Provision for loan losses | (10) | (490) | (780) | (335) | 75 | 20 | 260 | 300 | (1,615) | 655 |
Net interest income after provision for loan losses | 7,140 | 7,692 | 7,788 | 7,158 | 6,760 | 6,803 | 6,274 | 5,880 | 29,778 | 25,717 |
Noninterest income | 996 | 837 | 859 | 725 | 850 | 845 | 813 | 799 | 3,417 | 3,307 |
Noninterest expenses | 5,659 | 5,554 | 5,504 | 5,428 | 5,068 | 5,036 | 5,083 | 5,114 | 22,145 | 20,301 |
Income before income tax expense | 2,477 | 2,975 | 3,143 | 2,455 | 2,542 | 2,612 | 2,004 | 1,565 | 11,050 | 8,723 |
Income tax expense | 718 | 813 | 842 | 647 | 2,494 | 972 | 736 | 574 | 3,020 | 4,776 |
Net income | $ 1,759 | $ 2,162 | $ 2,301 | $ 1,808 | $ 48 | $ 1,640 | $ 1,268 | $ 991 | $ 8,030 | $ 3,947 |
Basic and diluted earnings per common share (in usd per share) | $ 0.20 | $ 0.25 | $ 0.27 | $ 0.21 | $ 0.01 | $ 0.19 | $ 0.16 | $ 0.16 | $ 0.93 | $ 0.50 |