Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 28, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | SHORE BANCSHARES INC | ||
Entity Central Index Key | 1,035,092 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Trading Symbol | shbi | ||
Entity Common Stock, Shares Outstanding | 12,672,675 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 116,646,865 | ||
Entity Well-known Seasoned Issuer | No |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
ASSETS | ||
Cash and due from banks | $ 14,596 | $ 15,080 |
Interest-bearing deposits with other banks | 61,342 | 54,223 |
Federal funds sold | 4,508 | |
Cash and cash equivalents | 75,938 | 73,811 |
Investment securities: | ||
Available for sale, at fair value | 163,798 | 212,165 |
Held to maturity, at amortized cost - fair value of $6,806 (2016) and $4,243 (2015) | 6,808 | 4,191 |
Loans | 871,525 | 795,114 |
Less: allowance for credit losses | (8,726) | (8,316) |
Loans, net | 862,799 | 786,798 |
Premises and equipment, net | 16,558 | 16,864 |
Goodwill | 11,931 | 11,931 |
Other intangible assets, net | 1,079 | 1,211 |
Other real estate owned, net | 2,477 | 4,252 |
Other assets | 18,883 | 23,920 |
TOTAL ASSETS | 1,160,271 | 1,135,143 |
Deposits: | ||
Noninterest-bearing | 261,575 | 229,686 |
Interest-bearing | 735,914 | 745,778 |
Total deposits | 997,489 | 975,464 |
Short-term borrowings | 3,203 | 6,672 |
Other liabilities | 5,280 | 6,040 |
TOTAL LIABILITIES | 1,005,972 | 988,176 |
STOCKHOLDERS’ EQUITY | ||
Common stock, par value $.01 per share; shares authorized - 35,000,000; shares issued and outstanding - 12,664,797 (2016) and 12,631,160 (2015) | 127 | 126 |
Additional paid in capital | 64,201 | 63,815 |
Retained earnings | 90,964 | 83,097 |
Accumulated other comprehensive income (loss) | (993) | (71) |
TOTAL STOCKHOLDERS’ EQUITY | 154,299 | 146,967 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 1,160,271 | $ 1,135,143 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Investment securities held to maturity | $ 6,806 | $ 4,243 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 35,000,000 | 35,000,000 |
Common stock, shares, issued | 12,664,797 | 12,631,160 |
Common stock, shares outstanding | 12,664,797 | 12,631,160 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
INTEREST INCOME | |||
Interest and fees on loans | $ 37,155 | $ 35,126 | $ 35,140 |
Interest and dividends on investment securities: | |||
Taxable | 3,195 | 3,602 | 2,957 |
Tax-exempt | 7 | 10 | 12 |
Interest on federal funds sold | 6 | 3 | 1 |
Interest on deposits with other banks | 289 | 130 | 179 |
Total interest income | 40,652 | 38,871 | 38,289 |
INTEREST EXPENSE | |||
Interest on deposits | 2,389 | 3,331 | 4,229 |
Interest on short-term borrowings | 14 | 15 | 18 |
Total interest expense | 2,403 | 3,346 | 4,247 |
NET INTEREST INCOME | 38,249 | 35,525 | 34,042 |
Provision for credit losses | 1,848 | 2,075 | 3,350 |
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 36,401 | 33,450 | 30,692 |
NONINTEREST INCOME | |||
Service charges on deposit accounts | 3,465 | 2,867 | 2,407 |
Trust and investment fee income | 1,442 | 1,627 | 1,860 |
Gains on sales of investment securities | 30 | 23 | |
Gain on sale of credit card portfolio | 198 | ||
Insurance agency commissions | 8,551 | 8,274 | 9,525 |
Other noninterest income | 2,959 | 2,648 | 2,966 |
Total noninterest income | 16,645 | 15,416 | 16,781 |
NONINTEREST EXPENSE | |||
Salaries and wages | 17,626 | 17,540 | 17,600 |
Employee benefits | 3,993 | 3,905 | 4,092 |
Occupancy expense | 2,452 | 2,420 | 2,339 |
Furniture and equipment expense | 963 | 926 | 975 |
Data processing | 3,496 | 3,260 | 3,006 |
Directors’ fees | 511 | 470 | 474 |
Amortization of other intangible assets | 131 | 133 | 201 |
Insurance agency commissions expense | 906 | ||
FDIC insurance premium expense | 696 | 1,214 | 1,636 |
Write-downs of other real estate owned | 242 | 127 | 658 |
Legal and professional fees | 1,875 | 2,380 | 2,048 |
Other noninterest expenses | 5,162 | 4,975 | 5,426 |
Total noninterest expense | 37,147 | 37,350 | 39,361 |
INCOME BEFORE INCOME TAXES | 15,899 | 11,516 | 8,112 |
Income tax expense | 6,261 | 4,408 | 3,061 |
NET INCOME | $ 9,638 | $ 7,108 | $ 5,051 |
Basic net income per common share (in dollars per share) | $ 0.76 | $ 0.56 | $ 0.46 |
Diluted net income per common share (in dollars per share) | 0.76 | 0.56 | $ 0.46 |
Dividends paid per common share (in dollars per share) | $ 0.14 | $ 0.04 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 9,638 | $ 7,108 | $ 5,051 |
Securities available for sale: | |||
Unrealized holding (losses) gains on available-for-sale-securities | (1,514) | (649) | 1,285 |
Tax effect | 610 | 262 | (518) |
Reclassification of gains recognized in net income (loss) | (30) | (23) | |
Tax effect | 12 | 9 | |
Net of tax amount | (922) | (387) | 753 |
Total other comprehensive (loss) income | (922) | (387) | 753 |
Comprehensive income (loss) | $ 8,716 | $ 6,721 | $ 5,804 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Balances at Dec. 31, 2013 | $ 85 | $ 32,207 | $ 71,444 | $ (437) | $ 103,299 |
Net income | 5,051 | 5,051 | |||
Unrealized gains (losses) on available-for-sale securities, net of taxes | 753 | 753 | |||
Issuance of common stock through public offering, net | 41 | 31,238 | 31,279 | ||
Stock-based compensation | 87 | 87 | |||
Balances at Dec. 31, 2014 | 126 | 63,532 | 76,495 | 316 | 140,469 |
Net income | 7,108 | 7,108 | |||
Unrealized gains (losses) on available-for-sale securities, net of taxes | (387) | (387) | |||
Stock-based compensation | 283 | 283 | |||
Cash dividends paid | (506) | (506) | |||
Balances at Dec. 31, 2015 | 126 | 63,815 | 83,097 | (71) | 146,967 |
Net income | 9,638 | 9,638 | |||
Unrealized gains (losses) on available-for-sale securities, net of taxes | (922) | (922) | |||
Common shares issued for employee stock- based awards | 53 | 53 | |||
Stock-based compensation | 1 | 333 | 334 | ||
Cash dividends paid | (1,771) | (1,771) | |||
Balances at Dec. 31, 2016 | $ 127 | $ 64,201 | $ 90,964 | $ (993) | $ 154,299 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ 9,638 | $ 7,108 | $ 5,051 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Provision for credit losses | 1,848 | 2,075 | 3,350 |
Depreciation and amortization | 2,449 | 2,434 | 2,312 |
Discount accretion on debt securities | (22) | (99) | (60) |
Stock-based compensation expense | 334 | 283 | 87 |
Excess tax benefits from stock-based arrangements | (27) | (3) | |
Deferred income tax expense | 5,716 | 3,874 | 2,836 |
Gains on sales of securities | (30) | (23) | |
Losses on disposals of premises and equipment | 18 | 82 | |
Losses on sales and write-downs of other real estate owned | 363 | 171 | 687 |
Gain on sale of wholesale insurance subsidiary | (114) | ||
Gain on sale of credit card portfolio | (198) | ||
Net changes in: | |||
Accrued interest receivable | (218) | 205 | (102) |
Other assets | (98) | (870) | 170 |
Accrued interest payables | (32) | (66) | (53) |
Other liabilities | (728) | (15) | (1,044) |
Net cash provided by operating activities | 18,995 | 15,115 | 13,179 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Proceeds from maturities and principal payments of investment securities available for sale | 59,989 | 68,395 | 43,418 |
Proceeds from sales of investment securities available for sale | 3,961 | 988 | |
Proceeds from sales of investment securities held to maturity | 113 | ||
Purchases of investment securities available for sale | (18,120) | (46,102) | (133,006) |
Proceeds from maturities and principal payments of investment securities held to maturity | 376 | 432 | 443 |
Purchases of securities held to maturity | (3,000) | ||
Proceeds from the sale of credit card portfolio | 1,428 | ||
Net change in loans | (81,369) | (88,595) | (3,982) |
Purchases of premises and equipment | (699) | (1,518) | (2,077) |
Proceeds from sales of other real estate owned | 3,700 | 2,040 | 1,697 |
Proceeds from sale of subsidiary | 2,878 | ||
Net cash (used in) provided investing activities | (33,734) | (65,348) | (89,528) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Noninterest-bearing deposits | 31,890 | 35,872 | 21,017 |
Interest-bearing deposits | (9,864) | (9,412) | (5,482) |
Short-term borrowings | (3,469) | 1,864 | (5,332) |
Proceeds from the issuance of common stock | 53 | 31,279 | |
Excess tax benefits from stock-based arrangements | 27 | 3 | |
Common stock dividends paid | (1,771) | (506) | |
Net cash used in financing activities | 16,866 | 27,821 | 41,482 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | 2,127 | (22,412) | (34,867) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 73,811 | 96,223 | 131,090 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 75,938 | 73,811 | 96,223 |
Supplemental cash flows information: | |||
Interest paid | 2,434 | 3,413 | 4,300 |
Income taxes paid | 435 | 518 | 243 |
Transfers from loans to other real estate owned | 2,289 | 2,773 | 2,295 |
Transfers from loans held for sale to loans | 3,521 | ||
Change in unrealized (gain) loss on securities available for sale | $ (1,664) | $ 119 | $ (529) |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements include the accounts of Shore Bancshares, Inc. and its subsidiaries (collectively referred to in these Notes as the “Company”), with all significant intercompany transactions eliminated. The investments in subsidiaries are recorded on the Company’s books (Parent only) on the basis of its equity in the net assets of the subsidiaries. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”). For purposes of comparability, certain reclassifications have been made to amounts previously reported to conform with the current period presentation. Effective July 1, 2016, the Company’s two bank subsidiaries, The Talbot Bank of Easton Maryland and CNB were consolidated into one bank known as Shore United Bank. In these notes to the consolidated financial statements, the term “the Bank” refers to Shore United Bank, unless the context requires stipulating results of the individual banks before the consolidation occurred. Nature of Operations The Company engages in the banking business through Shore United Bank, a Maryland commercial bank with trust powers. The Company’s primary source of revenue is interest earned on commercial, real estate and consumer loans made to customers located on the Delmarva Peninsula. The Company engages in the insurance business through an insurance producer firm, The Avon-Dixon Agency, LLC, (“Avon-Dixon”) with two specialty lines, Elliott Wilson Insurance (Trucking) and Jack Martin Associates (Marine); and an insurance premium finance company, Mubell Finance, LLC (“Mubell”) (Avon-Dixon and Mubell are collectively referred to as the “Insurance Subsidiaries”). Avon-Dixon and Mubell are wholly-owned subsidiaries of Shore Bancshares, Inc. The Company engages in the trust services business through the trust department at Shore United Bank under the trade name Wye Financial & Trust. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The allowance for credit losses is a material estimate that is particularly susceptible to significant changes in the near term. Management believes that the Company’s current allowance for credit losses is sufficient to address the probable losses in the current portfolio. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions. In addition, various regulatory agencies, as an integral part of their examination processes, periodically review the Company’s allowance for credit losses. Such agencies may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination. Investment Securities Available for Sale Investment securities available for sale are stated at estimated fair value based on quoted prices. They represent those securities which management may sell as part of its asset/liability management strategy or which may be sold in response to changing interest rates, changes in prepayment risk or other similar factors. Realized gains and losses are recorded in noninterest income and are determined on a trade date basis using the specific identification method. Premiums and discounts are amortized or accreted into interest income using the interest method over the expected lives of the individual securities. Interest and dividends on investment securities are recognized in interest income on an accrual basis. Net unrealized holding gains and losses on these securities are reported as accumulated other comprehensive income, a separate component of stockholders’ equity, net of related income taxes. Declines in the fair value of individual available-for-sale securities below their cost that are other than temporary result in write-downs of the individual securities to their fair value and are reflected in earnings as realized losses. Factors affecting the determination of whether an other-than-temporary impairment has occurred include a downgrade of the security by a rating agency, a significant deterioration in the financial condition of the issuer, or a determination that management has the intent to sell the security or will be required to sell the security before recovery of its amortized cost. Investment Securities Held to Maturity Investment securities held to maturity are stated at cost adjusted for amortization of premiums and accretion of discounts. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. The Company intends and has the ability to hold such securities until maturity. Declines in the fair value of individual held-to-maturity securities below their cost that are other than temporary result in write-downs of the individual securities to their fair value. Factors affecting the determination of whether an other-than-temporary impairment has occurred include a downgrade of the security by a rating agency, a significant deterioration in the financial condition of the issuer, or a determination that management has the intent to sell the security or will be required to sell the security before recovery of its amortized cost. Loans Loans are stated at their principal amount outstanding net of any deferred fees, premiums, discounts and costs. Interest income on loans is accrued at the contractual rate based on the principal amount outstanding. Fees charged and costs capitalized for originating loans are being amortized substantially on the interest method over the term of the loan. A loan is placed on nonaccrual (i.e., interest income is no longer accrued) when it is specifically determined to be impaired or when principal or interest is delinquent for 90 days or more, unless the loan is well secured and in the process of collection. Any unpaid interest previously accrued on those loans is reversed from income. Interest payments received on nonaccrual loans are applied as a reduction of the loan principal balance unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured. A loan is considered impaired if it is probable that the Company will not collect all principal and interest payments according to the loan’s contractual terms. An impaired loan may show deficiencies in the borrower’s overall financial condition, payment history, support available from financial guarantors and/or the fair market value of collateral. The impairment of a loan is measured at the present value of expected future cash flows using the loan’s effective interest rate, or at the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. Generally, the Company measures impairment on such loans by reference to the fair value of the collateral. Once the amount of impairment has been determined, the uncollectible portion is charged off. Income on impaired loans is recognized on a cash basis, and payments are first applied against the principal balance outstanding (i.e., placing impaired loans on nonaccrual status). Generally, interest income is not recognized on impaired loans unless the likelihood of further loss is remote. The allowance for credit losses may include specific reserves related to impaired loans. Specific reserves remain until charge offs are made. Impaired loans do not include groups of smaller balance homogeneous loans such as residential mortgage and consumer installment loans that are evaluated collectively for impairment. Reserves for probable credit losses related to these loans are based on historical loss ratios and are included in the formula portion of the allowance for credit losses. See additional discussion below under the section, “Allowance for Credit Losses”. A loan is considered a troubled debt restructuring (“TDR”) if a borrower is experiencing financial difficulties and a creditor has granted a concession. Concessions may include interest rate reductions or below market interest rates, principal forgiveness, restructuring amortization schedules and other actions intended to minimize potential losses. Loans are identified to be restructured when signs of impairment arise such as borrower interest rate reduction request, slowness to pay, or when an inability to repay becomes evident. The terms being offered are evaluated to determine if they are more liberal than those that would be indicated by policy or industry standards for similar, untroubled credits. In those situations where the terms or the interest rates are considered to be more favorable than industry standards or the current underwriting guidelines of the Company’s banking subsidiary, the loan is classified as a TDR. All loans designated as TDRs are considered impaired loans and may be on either accrual or nonaccrual status. In instances where the loan has been placed on nonaccrual status, six consecutive months of timely payments are required prior to returning the loan to accrual status. All loans classified as TDRs which are restructured and accrue interest under revised terms require a full and comprehensive review of the borrower’s financial condition, capacity for repayment, realistic assessment of collateral values, and the assessment of risk entered into any workout agreement. Current financial information on the borrower, guarantor, and underlying collateral is analyzed to determine if it supports the ultimate collection of principal and interest. For commercial loans, the cash flows are analyzed, both for the underlying project and globally. For consumer loans, updated salary, credit history and cash flow information is obtained. Current market conditions are also considered. Following a full analysis, the determination of the appropriate loan structure is made. The Company does not participate in any specific government or Company sponsored loan modification programs. All TDR loan agreements are contracts negotiated with each of the borrowers. Allowance for Credit Losses The allowance for credit losses is maintained at a level believed adequate by management to absorb losses inherent in the loan portfolio as of the balance sheet date and is based on the size and current risk characteristics of the loan portfolio, an assessment of individual problem loans and actual loss experience, current economic events in specific industries and geographical areas, including unemployment levels, and other pertinent factors, including regulatory guidance and general economic conditions and other observable data. Determination of the allowance is inherently subjective as it requires significant estimates, including the amounts and timing of expected future cash flows or collateral value of impaired loans, estimated losses on pools of homogeneous loans that are based on historical loss experience, and consideration of current economic trends, all of which may be susceptible to significant change. Loans, or portions thereof, that are considered uncollectible are charged off against the allowance, while recoveries of amounts previously charged off are credited to the allowance. The criteria for charge offs are addressed in the Banks’ Collection and Workout Policy. Per the policy, the recognition of the loss of loans or portions of loans will occur when there is a reasonable probability of loss. When the amount of loss can be readily calculated, the loss will be recognized. In cases where an amount cannot be calculated, specific reserves will be maintained. A provision for credit losses is charged to operations based on management’s periodic evaluation of the factors previously mentioned, as well as other pertinent factors. Evaluations are conducted at least quarterly and more often if deemed necessary. The allowance for credit losses is an estimate of the losses that may be sustained in the loan portfolio. The allowance is based on two basic principles of accounting: (i) Accounting Standards Codification (“ASC”) Topic 450, “Contingencies”, which requires that losses be accrued when they are probable of occurring and estimable; and (ii) ASC Topic 310, “Receivables,” which requires that losses be accrued based on the differences between the loan balance and the value of collateral, present value of future cash flows or values that are observable in the secondary market. Management uses many factors to estimate the inherent loss that may be present in our loan portfolio, including economic conditions and trends, the value and adequacy of collateral, the volume and mix of the loan portfolio, and our internal loan processes. Actual losses could differ significantly from management’s estimates. In addition, GAAP itself may change from one previously acceptable method to another. Although the economics of transactions would be the same, the timing of events that would impact the transactions could change. Three basic components comprise our allowance for credit losses: (i) the specific allowance; (ii) the formula allowance; and (iii) the unallocated allowance. Each component is determined based on estimates that can and do change when the actual events occur. The specific allowance is established against impaired loans (i.e., nonaccrual loans and troubled debt restructurings (“TDRs”)) based on our assessment of the losses that may be associated with the individual loans. The specific allowance remains until charge-offs are made. An impaired loan may show deficiencies in the borrower’s overall financial condition, payment history, support available from financial guarantors and/or the fair market value of collateral. The formula allowance is used to estimate the loss on internally risk-rated loans, exclusive of those identified as impaired. Loans are grouped by type (construction, residential real estate, commercial real estate, commercial or consumer). Each loan type is assigned allowance factors based on management’s estimate of the risk, complexity and size of individual loans within a particular category. Loans that are identified as special mention, substandard and doubtful are adversely rated. These loans are assigned higher allowance factors than favorably rated loans due to management’s concerns regarding collectability or management’s knowledge of particular elements regarding the borrower. A special mention loan has potential weaknesses that could result in a future loss to the Company if the weaknesses are realized. A substandard loan has certain deficiencies that could result in a future loss to the Company if these deficiencies are not corrected. A doubtful loan has enough risk that there is a high probability that the Company will sustain a loss. Management has significant discretion in making the adjustments inherent in the determination of the provision and allowance for credit losses, including in connection with the valuation of collateral, the estimation of a borrower’s prospects of repayment, and the establishment of the allowance factors in the formula allowance and unallocated allowance components of the allowance. The establishment of allowance factors is a continuing exercise, based on management’s ongoing assessment of the totality of all factors, including, but not limited to, delinquencies, loss history, trends in volume and terms of loans, effects of changes in lending policy, the experience and depth of management, national and local economic trends, concentrations of credit, the quality of the loan review system and the effect of external factors such as competition and regulatory requirements, and their impact on the portfolio. Allowance factors may change from period to period, resulting in an increase or decrease in the amount of the provision or allowance, based on the same volume and classification of loans. Changes in allowance factors will have a direct impact on the amount of the provision, and a corresponding effect on net income. Errors in management’s perception and assessment of these factors and their impact on the portfolio could result in the allowance not being adequate to cover losses in the portfolio, and may result in additional provisions or charge-offs. Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets. Useful lives range from three to 10 years for furniture, fixtures and equipment; three to five years for computer hardware and data handling equipment; and 10 to 40 years for buildings and building improvements. Land improvements are amortized over a period of 15 years and leasehold improvements are amortized over the term of the respective lease. Sale-leaseback transactions are considered normal leasebacks and any realized gains are deferred and amortized to other income on a straight-line basis over the initial lease term. Maintenance and repairs are charged to expense as incurred, while improvements which extend the useful life of an asset are capitalized and depreciated over the estimated remaining life of the asset. Long-lived assets are evaluated periodically for impairment when events or changes in circumstances indicate the carrying amount may not be recoverable. Impairment exists when the expected undiscounted future cash flows of a long-lived asset are less than its carrying value. In that event, the Company recognizes a loss for the difference between the carrying amount and the estimated fair value of the asset. Goodwill and Other Intangible Assets Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Other intangible assets represent purchased assets that also lack physical substance but can be distinguished from goodwill because of contractual or other legal rights or because the asset is capable of being sold or exchanged either on its own or in combination with a related contract, asset or liability. Goodwill and other intangible assets are required to be recorded at fair value. Determining fair value is subjective, requiring the use of estimates, assumptions and management judgment. Goodwill and other intangible assets with indefinite lives are tested at least annually for impairment, usually during the third quarter, or on an interim basis if circumstances dictate. Intangible assets that have finite lives are amortized over their estimated useful lives and also are subject to impairment testing. Impairment testing requires that the fair value of each of the Company’s reporting units be compared to the carrying amount of its net assets, including goodwill. The Company’s reporting units were identified based on an analysis of each of its individual operating segments (i.e., the Bank and Insurance Subsidiaries). If the fair value of a reporting unit is less than book value, an expense may be required to write down the related goodwill or purchased intangibles to record an impairment loss. During the third quarter of 2016 and 2015 , goodwill and other intangible assets were subjected to the annual assessment for impairment. As a result of the assessment, it was determined that it was not more likely than not that the fair values of the Company’s reporting units were less than their carrying amounts so no impairment was recorded. Other Real Estate Owned Other real estate owned represents assets acquired in satisfaction of loans either by foreclosure or deeds taken in lieu of foreclosure. Properties acquired are recorded at fair value less estimated selling costs at the time of acquisition, establishing a new cost basis. Thereafter, costs incurred to operate or carry the properties as well as reductions in value as determined by periodic appraisals are charged to operating expense. Gains and losses resulting from the final disposition of the properties are included in noninterest income. Short-Term Borrowings Short-term borrowings are comprised primarily of repurchase agreements. The repurchase agreements are securities sold to the Company’s customers, at the customers’ request, under a continuing “roll-over” contract that matures in one business day. The underlying securities sold are U.S. Government agency securities, which are segregated from the Company’s other investment securities by its safekeeping agents. Income Taxes The Company and its subsidiaries file a consolidated federal income tax return. The Company accounts for income taxes using the liability method in accordance with required accounting guidance. Under this method, deferred tax assets and liabilities are determined by applying the applicable federal and state income tax rates to cumulative temporary differences. These temporary differences represent differences between financial statement carrying amounts and the corresponding tax bases of certain assets and liabilities. Deferred taxes result from such temporary differences. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. A valuation allowance, if needed, reduces deferred tax assets to the expected amount most likely to be realized. Realization of deferred tax assets is dependent on the generation of a sufficient level of future taxable income, recoverable taxes paid in prior years and tax planning strategies. The Company evaluates all positive and negative evidence before determining if a valuation allowance is deemed necessary regarding the realization of deferred tax assets. The Company recognizes accrued interest and penalties as a component of tax expense. The Company does not have any uncertain tax positions and did not recognize any adjustments for unrecognized tax benefits. The Company remains subject to examination for tax years ending on or after December 31, 2013. Basic and Diluted Earnings Per Common Share Basic earnings per share is calculated by dividing net income available to common stockholders by the weighted-average number of common shares outstanding and does not include the effect of any potentially dilutive common stock equivalents. Diluted earnings per share is calculated by dividing net income by the weighted-average number of shares outstanding, adjusted for the effect of any potentially dilutive common stock equivalents. Transfers of Financial Assets Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (i) the assets have been isolated from the Company, (ii) 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 (iii) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Cash and Cash Equivalents Cash and due from banks, interest-bearing deposits with other banks and federal funds sold are considered “cash and cash equivalents” for financial reporting purposes. Interest-bearing deposits with banks generally exceed balances that are recoverable under Federal Deposit Insurance Corporation (“FDIC”) insurance. Stock-Based Compensation Accounting guidance for stock-based compensation requires that expense relating to such transactions be recognized as compensation cost in the income statement. Stock-based compensation expense is measured at the grant date based on the fair value of the award and is recognized on a straight-line basis over the vesting period. See Note 12 for a further discussion. Fair Value The Company measures certain financial assets and liabilities at fair value, with the measurements made on a recurring or nonrecurring basis. Significant financial instruments measured at fair value on a recurring basis are investment securities. Impaired loans and other real estate owned are significant financial instruments measured at fair value on a nonrecurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In determining fair value, the Company is required to maximize the use of observable inputs and minimize the use of unobservable inputs, reducing subjectivity. See Note 20 for a further discussion of fair value. Advertising Costs Advertising costs are generally expensed as incurred. The Company incurred advertising costs of approximately $528 thousand, $495 thousand and $428 thousand for the years ended December 31, 2016 , 2015 , and 2014 , respectively. Recent Accounting Standards ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” amendment requires entities to recognize revenue to depict the transfer of promised goods or services to customers in amounts that reflect the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for periods beginning after December 16, 2016. ASU 2015-14, “ Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date ” – ASU 2015-14 amendments defer the effective date of Update 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations” – ASU 2016-08 amendments are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” – ASU 2016-10 amendments clarify that contractual provisions that, explicitly or implicitly, require an entity to transfer control of additional goods or services to a customer should be distinguished from contractual provisions that, explicitly or implicitly, define the attributes of a single promised license. Attributes of a promised license define the scope of a customer’s right to use or right to access an entity’s intellectual property and, therefore, do not define whether the entity satisfies its performance obligation at a point in time or over time and do not create an obligation for the entity to transfer any additional rights to use or access its intellectual property. ASU 2014-09 will be effective for The Company on January 1, 2018 and The Company is currently in the process of evaluating the impact of the adoption of this update will have on the consolidated financial statements. The Company preliminarily believes the adoption of this update will not have a material impact on the consolidated financial statements, as a majority of the Company’s revenue generating transactions are not included in the scope of this update. ASU No. 2014-12, "Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period." The amendments in the ASU require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation - Stock Compensation , as it relates to awards with performance conditions that affect vesting to account for such awards. The performance target should not be reflected in estimating the grant-date fair value of the award. However, compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. The amendments in this ASU are effective for interim or annual reporting periods beginning after December 15, 2015; early adoption is permitted. Entities may apply the amendments in this ASU either: (1) prospectively to all awards granted or modified after the effective date; or (2) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. As of December 31, 2016, the Company has share-based payment awards that included performance targets that could be achieved after the requisite service period. The adoption of ASU No. 2014-12 did not have a material impact on the Company's Consolidated Financial Statements. ASU No. 2015-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” This ASU provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new guidance does not change the accounting for a customer’s accounting for service contracts. ASU No. 2015-05 is effective for interim and annual reporting periods beginning after December 15, 2015. The adoption of ASU No. 2015-05 did not have a material impact on the Company's Consolidated Financial Statements. ASU No. 2015-16 – In September 2015, FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. Under current GAAP, the acquirer is required to retrospectively adjust the provisional amounts recognized at the acquisition date with a corresponding adjustment to goodwill and is also required to revise comparative information for prior periods presented in the financial statements. The amendments in this ASU, require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in this Update also require that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as the result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. An entity is required to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that wo |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 12 Months Ended |
Dec. 31, 2016 | |
INVESTMENT SECURITIES [Abstract] | |
INVESTMENT SECURITIES | NOTE 2. INVESTMENT SECURITIES The following table provides information on the amortized cost and estimated fair values of investment securities. Gross Gross Estimated Amortized Unrealized Unrealized Fair (Dollars in thousands) Cost Gains Losses Value Available-for-sale securities: December 31, 2016 U.S. Treasury $ - $ - $ - $ - U.S. Government agencies 34,320 56 162 34,214 Mortgage-backed 130,490 263 1,809 128,944 Equity 652 - 12 640 Total $ 165,462 $ 319 $ 1,983 $ 163,798 December 31, 2015 U.S. Treasury $ 5,078 $ 1 $ - $ 5,079 U.S. Government agencies 49,630 89 190 49,529 Mortgage-backed 156,939 639 662 156,916 Equity 637 4 - 641 Total $ 212,284 $ 733 $ 852 $ 212,165 Held-to-maturity securities: December 31, 2016 U.S. Government agencies $ 2,193 $ - $ 78 $ 2,115 States and political subdivisions 1,615 76 - 1,691 Other Equity Securities (1) 3,000 - - 3,000 Total $ 6,808 $ 76 $ 78 $ 6,806 December 31, 2015 U.S. Government agencies $ 2,575 $ - $ 60 $ 2,515 States and political subdivisions 1,616 112 - 1,728 Total $ 4,191 $ 112 $ 60 $ 4,243 (1) On December 15, 2016 the Company bought $3.0 million in subordinated notes from a local regional bank which it intends to hold to maturity of December 30, 2026. The following table provides information about gross unrealized losses and fair value by length of time that the individual securities have been in a continuous unrealized loss position at December 31, 2016 . Less than More than 12 Months 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) Value Losses Value Losses Value Losses December 31, 2016 Available-for-sale securities: U.S. Government agencies $ 11,926 $ 58 $ - $ 104 $ 11,926 $ 162 Mortgage-backed 100,237 1,546 9,208 263 109,445 1,809 Equity securities 640 12 - - 640 12 Total $ 112,803 $ 1,616 $ 9,208 $ 367 $ 122,011 $ 1,983 Held-to-maturity securities: U.S. Government agencies $ 2,115 $ 78 $ - $ - $ 2,115 $ 78 Less than More than 12 Months 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) Value Losses Value Losses Value Losses December 31, 2015 Available-for-sale securities: U.S. Government agencies $ 18,981 $ 57 $ - $ 133 $ 18,981 $ 190 Mortgage-backed 43,881 328 21,263 334 65,144 662 Equity securities - - - - - - Total $ 62,862 $ 385 $ 21,263 $ 467 $ 84,125 $ 852 Held-to-maturity securities: U.S. Government agencies $ - $ - $ 2,515 $ 60 $ 2,515 $ 60 All of the securities with unrealized losses in the portfolio have modest duration risk, low credit risk, and minimal losses when compared to total amortized cost. The unrealized losses on debt securities that exist are the result of market changes in interest rates since original purchase. Because the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell these securities before recovery of their amortized cost bases, which may be at maturity for debt securities, the Company considers the unrealized losses to be temporary. The following table provides information on the amortized cost and estimated fair values of investment securities by maturity date at December 31, 2016 . Available for sale Held to maturity Amortized Estimated Amortized Estimated (Dollars in thousands) Cost Fair Value Cost Fair Value Due in one year or less $ 15,018 $ 15,027 $ 210 $ 210 Due after one year through five years 16,983 16,948 501 531 Due after five years through ten years 12,889 12,736 904 950 Due after ten years 119,920 118,447 2,193 2,115 164,810 163,158 3,808 3,806 Equity securities 652 640 3,000 3,000 Total $ 165,462 $ 163,798 $ 6,808 $ 6,806 The maturity dates for debt securities are determined using contractual maturity dates. The following table sets forth the amortized cost and estimated fair values of securities which have been pledged as collateral for obligations to federal, state and local government agencies, and other purposes as required or permitted by law, or sold under agreements to repurchase. All pledged securities are in the available-for-sale investment portfolio. December 31, 2016 December 31, 2015 Amortized Estimated Amortized Estimated (Dollars in thousands) Cost Fair Value Cost Fair Value Pledged available-for-sale securities $ 140,042 $ 138,875 $ 121,142 $ 121,207 There were no obligations of states or political subdivisions with carrying values, as to any issuer, exceeding 10% of stockholders’ equity at December 31, 2016 or 2015. Proceeds from sales of investment securities were $4.0 million , $0 , and $988 thousand for the years ended December 31, 2016 , 2015 , and 2014 , respectively. Gross gains from sales of investment securities were $30 thousand , $ 0 and $23 thousand for the years ended December 31, 2016 , 2015 , and 2014 , respectively. There were no gross losses in 2016 , 2015 and 2014 . |
LOANS AND ALLOWANCE FOR CREDIT
LOANS AND ALLOWANCE FOR CREDIT LOSSES | 12 Months Ended |
Dec. 31, 2016 | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES [Abstract] | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES The Company makes residential mortgage, commercial and consumer loans to customers primarily in Talbot County, Queen Anne’s County, Kent County, Caroline County and Dorchester County in Maryland and in Kent County, Delaware. The following table provides information about the principal classes of the loan portfolio at December 31, 2016 and 2015 . (Dollars in thousands) 2016 2015 Construction $ 84,002 $ 85,632 Residential real estate 325,768 307,063 Commercial real estate 382,681 330,253 Commercial 72,435 64,911 Consumer 6,639 7,255 Total loans 871,525 795,114 Allowance for credit losses (8,726) (8,316) Total loans, net $ 862,799 $ 786,798 In the normal course of banking business, loans are made to officers and directors and their affiliated interests. These loans are made on substantially the same terms and conditions as those prevailing at the time for comparable transactions with persons who are not related to the Company and are not considered to involve more than the normal risk of collectibility. As of December 31, 2016 and 2015 , such loans outstanding, both direct and indirect (including guarantees), to directors, their associates and policy-making officers, totaled approximately $13.3 million and $22.0 million, respectively. During 2016 and 2015 , loan additions were approximately $3.3 million and $5.5 million, respectively, and loan repayments were approximately $1.1 million and $2.4 million, respectively. Due to the consolidation of the former Bank subsidiaries and their Board of Directors during 2016, many directors who served on those boards no longer serve as members of the new consolidated Bank as of December 31, 2016. This resulted in approximately $10.8 million in outstanding loans to be excluded for reporting loans made to inside directors of the Company and its subsidiaries as of December 31, 2016. Net loan origination fees, included in balances above, totaled $509 thousand and $357 thousand as of December 31, 2016 and 2015, respectively. In the normal course of banking business, risks related to specific loan categories are as follows: Construction loans – Construction loans generally finance the construction of residential real estate for builders and individuals for single family dwellings. In addition, the Bank periodically finances the construction of commercial projects. Credit risk factors include the borrower’s ability to successfully complete the construction on time and within budget, changing market conditions which could affect the value and marketability of projects, changes in the borrower’s ability or willingness to repay the loan and potentially rising interest rates which can impact both the borrower’s ability to repay and the collateral value. Residential real estate – Residential real estate loans are typically made to consumers and are secured by residential real estate. Credit risk arises from the borrower’s continuing financial stability, which can be adversely impacted by job loss, divorce, illness, or personal bankruptcy, among other factors. Also impacting credit risk would be a shortfall in the value of the residential real estate in relation to the outstanding loan balance in the event of a default or subsequent liquidation of the real estate collateral. Commercial real estate – Commercial real estate loans consist of both loans secured by owner occupied properties and non-owner occupied where an established banking relationship exists and involves investment properties for warehouse, retail, and office space with a history of occupancy and cash flow. These loans are subject to adverse changes in the local economy and commercial real estate markets. Credit risk associated with owner occupied properties arises from the borrower’s financial stability and the ability of the borrower and the business to repay the loan. Non-owner occupied properties carry the risk of a tenant’s deteriorating credit strength, lease expirations in soft markets and sustained vacancies which can adversely impact cash flow. Commercial – Commercial loans are secured or unsecured loans for business purposes. Loans are typically secured by accounts receivable, inventory, equipment and/or other assets of the business. Credit risk arises from the successful operation of the business which may be affected by competition, rising interest rates, regulatory changes and adverse conditions in the local and regional economy. Consumer – Consumer loans include home equity loans and lines, installment loans and personal lines of credit. Credit risk is similar to residential real estate loans above as it is subject to the borrower’s continuing financial stability and the value of the collateral securing the loan. The following tables include impairment information relating to loans and the allowance for credit losses as of December 31, 2016 and 2015 . Residential Commercial (Dollars in thousands) Construction real estate real estate Commercial Consumer Unallocated Total December 31, 2016 Loans individually evaluated for impairment $ 8,007 $ 7,778 $ 6,088 $ - $ 99 $ - $ 21,972 Loans collectively evaluated for impairment 75,995 317,990 376,593 72,435 6,540 - 849,553 Total loans $ 84,002 $ 325,768 $ 382,681 $ 72,435 $ 6,639 $ - $ 871,525 Allowance for credit losses allocated to: Loans individually evaluated for impairment $ 1,639 $ 317 $ 185 $ - $ - $ - $ 2,141 Loans collectively evaluated for impairment 1,148 1,636 2,425 1,145 231 - 6,585 Total loans $ 2,787 $ 1,953 $ 2,610 $ 1,145 $ 231 $ - $ 8,726 During 2016, due to the consolidation of Talbot and CNB, the processes and assumptions affecting the allowance methodology were re-evaluated for a more unified representation of the new consolidated bank. This re-evaluation resulted in a net change in the unallocated portion of the allowance of $776 thousand. Residential Commercial (Dollars in thousands) Construction real estate real estate Commercial Consumer Unallocated Total December 31, 2015 Loans individually evaluated for impairment $ 11,598 $ 7,945 $ 7,762 $ 161 $ 122 $ - $ 27,588 Loans collectively evaluated for impairment 74,034 299,118 322,491 64,750 7,133 - 767,526 Total loans $ 85,632 $ 307,063 $ 330,253 $ 64,911 $ 7,255 $ - $ 795,114 Allowance for credit losses allocated to: Loans individually evaluated for impairment $ 619 $ 435 $ 340 $ - $ 7 $ - $ 1,401 Loans collectively evaluated for impairment 1,027 1,746 2,659 558 149 776 6,915 Total loans $ 1,646 $ 2,181 $ 2,999 $ 558 $ 156 $ 776 $ 8,316 The following tables provide information on impaired loans and any related allowance by loan class as of December 31, 2016 and 2015 . The difference between the unpaid principal balance and the recorded investment is the amount of partial charge-offs that have been taken. Recorded Recorded Unpaid investment investment Average Interest principal with no with an Related recorded income (Dollars in thousands) balance allowance allowance allowance investment recognized December 31, 2016 Impaired nonaccrual loans: Construction $ 7,247 $ - $ 3,818 $ 1,621 $ 5,707 $ - Residential real estate 4,013 1,957 1,946 166 3,500 - Commercial real estate 1,801 959 193 117 2,144 - Commercial - - - - 108 - Consumer 99 99 - - 106 - Total $ 13,160 $ 3,015 $ 5,957 $ 1,904 $ 11,565 $ - Impaired accruing TDRs: Construction $ 4,189 $ 3,479 $ 710 $ 18 $ 4,172 $ 96 Residential real estate 3,875 2,829 1,046 151 4,663 195 Commercial real estate 4,936 1,573 3,363 68 5,090 174 Commercial - - - - - - Consumer - - - - - - Total $ 13,000 $ 7,881 $ 5,119 $ 237 $ 13,925 $ 465 Total impaired loans: Construction $ 11,436 $ 3,479 $ 4,528 $ 1,639 $ 9,879 $ 96 Residential real estate 7,888 4,786 2,992 317 8,163 195 Commercial real estate 6,737 2,532 3,556 185 7,234 174 Commercial - - - - 108 - Consumer 99 99 - - 106 - Total $ 26,160 $ 10,896 $ 11,076 $ 2,141 $ 25,490 $ 465 Recorded Recorded Unpaid investment investment Average Interest principal with no with an Related recorded income (Dollars in thousands) balance allowance allowance allowance investment recognized December 31, 2015 Impaired nonaccrual loans: Construction $ 11,850 $ 4,647 $ 2,882 $ 588 $ 8,176 $ - Residential real estate 2,563 1,773 487 208 2,767 - Commercial real estate 2,988 1,813 209 9 2,159 - Commercial 175 161 - - 126 - Consumer 128 98 23 7 122 - Total $ 17,704 $ 8,492 $ 3,601 $ 812 $ 13,350 $ - Impaired accruing TDRs: Construction $ 4,069 $ 3,266 $ 803 $ 31 $ 4,080 $ 84 Residential real estate 5,686 2,380 3,306 227 6,947 312 Commercial real estate 5,740 1,702 4,038 331 5,943 254 Commercial - - - - 27 1 Consumer - - - - - - Total $ 15,495 $ 7,348 $ 8,147 $ 589 $ 16,997 $ 651 Total impaired loans: Construction $ 15,919 $ 7,913 $ 3,685 $ 619 $ 12,256 $ 84 Residential real estate 8,249 4,153 3,793 435 9,714 312 Commercial real estate 8,728 3,515 4,247 340 8,102 254 Commercial 175 161 - - 153 1 Consumer 128 98 23 7 122 - Total $ 33,199 $ 15,840 $ 11,748 $ 1,401 $ 30,347 $ 651 The following tables provide a roll-forward for troubled debt restructurings as of December 31, 2016 and December 31, 2015 . 1/1/2016 12/31/2016 TDR New Disbursements Charge Reclassifications/ TDR Related (Dollars in thousands) Balance TDRs (Payments) offs Transfer In/(Out) Payoffs Balance Allowance For the year ended December 31, 2016 Accruing TDRs Construction $ 4,069 $ - $ 120 $ - $ - $ - $ 4,189 $ 18 Residential real estate 5,686 565 (405) - (1,595) (376) 3,875 151 Commercial real estate 5,740 495 (724) (117) (458) - 4,936 68 Commercial - - - - - - - - Consumer - - - - - - - - Total $ 15,495 $ 1,060 $ (1,009) $ (117) $ (2,053) $ (376) $ 13,000 $ 237 Nonaccrual TDRs Construction $ 4,960 $ 2,570 $ (2,022) $ (590) $ (1,100) $ - $ 3,818 $ 1,621 Residential real estate 445 117 (531) (23) 1,595 - 1,603 156 Commercial real estate - - (117) (258) 458 - 83 - Commercial - - - - - - - - Consumer 23 - (23) - - - - - Total $ 5,428 $ 2,687 $ (2,693) $ (871) $ 953 $ - $ 5,504 $ 1,777 Total $ 20,923 $ 3,747 $ (3,702) $ (988) $ (1,100) $ (376) $ 18,504 $ 2,014 1/1/2015 12/31/15 TDR New Disbursements Charge Reclassifications/ TDR Related (Dollars in thousands) Balance TDRs (Payments) offs Transfer In/(Out) Payoffs Balance Allowance For the year ended December 31, 2015 Accruing TDRs Construction $ 4,022 $ - $ (95) $ - $ 142 $ - $ 4,069 $ 31 Residential real estate 6,368 1,837 (1,195) - (1,324) - 5,686 227 Commercial real estate 6,237 - (497) - - - 5,740 331 Commercial 47 - (6) - (41) - - - Consumer - - - - - - - - Total $ 16,674 $ 1,837 $ (1,793) $ - $ (1,223) $ - $ 15,495 $ 589 Nonaccrual TDRs Construction $ 3,321 $ - $ (214) $ (1,058) $ 2,911 $ - $ 4,960 $ 588 Residential real estate 3,382 - (26) - (2,911) - 445 141 Commercial real estate 346 - (4) (40) (302) - - - Commercial - - - - - - - - Consumer 25 - (2) - - - 23 7 Total $ 7,074 $ - $ (246) $ (1,098) $ (302) $ - $ 5,428 $ 736 Total $ 23,748 $ 1,837 $ (2,039) $ (1,098) $ (1,525) * $ - $ 20,923 $ 1,325 * $1.3 million in subsequently modified TDRs were transferred from accruing TDR classification to accrual status during the third quarter of 2015, thus removing the TDR designation. In accordance with ASC 310-40-50-2 “Creditor Disclosure of Troubled Debt Restructurings,” an impaired loan that has been subsequently restructured in a troubled debt restructuring involving modification of terms need not be included in the disclosures in years after the restructuring if both of the following conditions exist: a) the subsequent restructuring agreement specifies an interest rate equal to or greater than the rate that the creditor was willing to accept at the time of the restructuring for a new loan with comparable risk; and b) the loan is not impaired based on the terms specified by the restructuring agreement. During the period ended December 31, 2015, three loans totaling $1.3 million met the conditions stipulated in ASC 310-40-50-2, and after a careful evaluation of well supported documentation by management, these loans were upgraded to accrual status. The following tables provide information on loans that were modified and considered TDRs during 2016 and 2015 . Premodification Postmodification outstanding outstanding Number of recorded recorded Related (Dollars in thousands) contracts investment investment allowance TDRs: For the year ended December 31, 2016 Construction - $ - $ - $ - Residential real estate 3 667 688 - Commercial real estate 2 695 572 - Commercial - - - - Consumer - - - - Total 5 $ 1,362 $ 1,260 $ - For the year ended December 31, 2015 Construction - $ - $ - $ - Residential real estate 10 1,835 1,837 19 Commercial real estate 1 2,262 2,347 - Commercial - - - - Consumer - - - - Total 11 $ 4,097 $ 4,184 $ 19 During the year ended December 31, 2016, there were five TDRs which were modified. The modifications to these TDRs consisted of reductions in principal, interest and rate as well as payment frequency for one of the TDRs. The following tables provide information on TDRs that defaulted during 2016 and 2015 . Generally, a loan is considered in default when principal or interest is past due 90 days or more. Number of Recorded Related (Dollars in thousands) contracts investment allowance TDRs that subsequently defaulted: For the year ended December 31, 2016 Construction 2 $ 589 $ - Residential real estate 1 23 - Commercial real estate 2 375 - Commercial - - - Consumer - - - Total 5 $ 987 $ - For the year ended December 31, 2015 Construction - $ - $ - Residential real estate - - - Commercial real estate 2 279 - Commercial - - - Consumer - - - Total 2 $ 279 $ - Management uses risk ratings as part of its monitoring of the credit quality in the Company’s loan portfolio. Loans that are identified as special mention, substandard or doubtful are adversely rated. They are assigned higher risk ratings than favorably rated loans in the calculation of the formula portion of the allowance for credit losses. At December 31, 2016 , there were no nonaccrual loans classified as special mention or doubtful and $9.0 million of nonaccrual loans were identified as substandard. The comparable amounts at December 31, 2015 were special mention $0 , substandard $12.1 million and doubtful $0 , respectively. The following tables provide information on loan risk ratings as of December 31, 2016 and 2015 . Special (Dollars in thousands) Pass/Performing Mention Substandard Doubtful Total December 31, 2016 Construction $ 72,641 $ 4,195 $ 7,166 $ - $ 84,002 Residential real estate 312,242 6,646 6,880 - 325,768 Commercial real estate 363,461 10,939 8,281 - 382,681 Commercial 71,313 857 265 - 72,435 Consumer 6,540 - 99 - 6,639 Total $ 826,197 $ 22,637 $ 22,691 $ - $ 871,525 Special (Dollars in thousands) Pass/Performing Mention Substandard Doubtful Total December 31, 2015 Construction $ 70,214 $ 3,903 $ 11,515 $ - $ 85,632 Residential real estate 290,857 8,837 7,369 - 307,063 Commercial real estate 302,438 18,699 9,116 - 330,253 Commercial 63,628 1,075 208 - 64,911 Consumer 7,107 26 122 - 7,255 Total $ 734,244 $ 32,540 $ 28,330 $ - $ 795,114 The following tables provide information on the aging of the loan portfolio as of December 31, 2016 and 2015 . Accruing 30-59 days 60-89 days Greater than Total (Dollars in thousands) Current past due past due 90 days past due Nonaccrual Total December 31, 2016 Construction $ 80,079 $ - $ 105 $ - $ 105 $ 3,818 $ 84,002 Residential real estate 317,992 1,778 2,095 - 3,873 3,903 325,768 Commercial real estate 375,552 3,219 2,758 - 5,977 1,152 382,681 Commercial 72,272 19 134 10 163 - 72,435 Consumer 6,515 13 2 10 25 99 6,639 Total $ 852,410 $ 5,029 $ 5,094 $ 20 $ 10,143 $ 8,972 $ 871,525 Percent of total loans 97.8 % 0.6 % 0.6 % - % 1.2 % 1.0 % 100.0 % Accruing 30-59 days 60-89 days Greater than Total (Dollars in thousands) Current past due past due 90 days past due Nonaccrual Total December 31, 2015 Construction $ 78,082 $ 21 $ - $ - $ 21 $ 7,529 $ 85,632 Residential real estate 300,563 2,139 2,102 - 4,241 2,259 307,063 Commercial real estate 327,370 - 861 - 861 2,022 330,253 Commercial 64,670 49 31 - 80 161 64,911 Consumer 7,107 13 6 7 26 122 7,255 Total $ 777,792 $ 2,222 $ 3,000 $ 7 $ 5,229 $ 12,093 $ 795,114 Percent of total loans 97.8 % 0.3 % 0.4 % - % 0.7 % 1.5 % 100.0 % The following tables provide a summary of the activity in the allowance for credit losses allocated by loan class for 2016 and 2015 . Allocation of a portion of the allowance to one loan class does not preclude its availability to absorb losses in other loan classes. Residential Commercial (Dollars in thousands) Construction real estate real estate Commercial Consumer Unallocated Total 2016 Allowance for credit losses: Beginning Balance $ 1,646 $ 2,181 $ 2,999 $ 558 $ 156 $ 776 $ 8,316 Charge-offs (615) (580) (503) (497) (45) - (2,240) Recoveries 35 298 25 428 16 - 802 Net charge-offs (580) (282) (478) (69) (29) - (1,438) Provision 1,721 54 89 656 104 (776) 1,848 Ending Balance $ 2,787 $ 1,953 $ 2,610 $ 1,145 $ 231 $ - $ 8,726 Residential Commercial (Dollars in thousands) Construction real estate real estate Commercial Consumer Unallocated Total 2015 Allowance for credit losses: Beginning Balance $ 1,303 $ 2,834 $ 2,379 $ 448 $ 229 $ 502 $ 7,695 Charge-offs (1,058) (283) (920) (396) (67) - (2,724) Recoveries 125 398 379 319 49 - 1,270 Net charge-offs (933) 115 (541) (77) (18) - (1,454) Provision 1,276 (768) 1,161 187 (55) 274 2,075 Ending Balance $ 1,646 $ 2,181 $ 2,999 $ 558 $ 156 $ 776 $ 8,316 Foreclosure Proceedings Consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure totaled $687 thousand and $581 thousand as of December 31, 2016 and 2015 . At December 31, 2016 and 2015, there were 2 and 5 residential properties held in other real estate owned totaling $18 thousand and $460 thousand, respectively. Performing TDRs were in compliance with their modified terms and there are no further commitments associated with these loans. |
PREMISES AND EQUIPMENT
PREMISES AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2016 | |
PREMISES AND EQUIPMENT [Abstract] | |
PREMISES AND EQUIPMENT [Abstract] | NOTE 4. PREMISES AND EQUIPMENT The following table provides information on premises and equipment at December 31, 2016 and 2015 . (Dollars in thousands) 2016 2015 Land $ 5,818 $ 5,818 Buildings and land improvements 16,296 15,982 Furniture and equipment 6,746 6,710 28,860 28,510 Accumulated depreciation (12,302) (11,646) Total $ 16,558 $ 16,864 Depreciation expense totaled $1.0 million, $912 thousand and $867 thousand for 2016 , 2015 , and 2014 , respectively. The Company leases facilities under operating leases. Rental expense for the years ended December 31, 2016 , 2015 , and 2014 was $660 thousand, $650 thousand and $700 thousand, respectively. Future minimum annual rental payments are approximately as follows: (Dollars in thousands) 2017 $ 567 2018 434 2019 382 2020 250 2021 215 Thereafter 806 Total minimum lease payments $ 2,654 |
INVESTMENT IN UNCONSOLIDATED SU
INVESTMENT IN UNCONSOLIDATED SUBSIDIARIES | 12 Months Ended |
Dec. 31, 2016 | |
INVESTMENT IN UNCONSOLIDATED SUBSIDIARIES [Abstract] | |
INVESTMENT IN UNCONSOLIDATED SUBSIDIARIES | NOTE 5. INVESTMENT IN UNCONSOLIDATED SUBSIDIARIES The Avon-Dixon Agency, LLC (“Avon-Dixon”), a wholly-owned insurance subsidiary of the Company, owns a 40% interest in a segregated portfolio of Eastern Re Ltd., SPC (“Eastern”), a specialty reinsurance company. This investment is carried at cost, adjusted for Avon-Dixon’s equity ownership in Eastern’s net income or loss. At December 31, 2016 and 2015 , the carrying value of the investment in Eastern was $361 thousand and $320 thousand, respectively. During 2016 and 2015 , income (loss) recognized from the investment in Eastern was $41 thousand and $(112) thousand, respectively. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 6. GOODWILL AND OTHER INTANGIBLE ASSETS The following table provides information on the significant components of goodwill and other acquired intangible assets at December 31, 2016 and 2015 . The Community Banking segment had goodwill of $2.5 million at the end of both 2016 and 2015 . The Insurance segment had goodwill of $9.4 million at the end of 2016 and 2015 . See Note 27 for further information regarding the Company’s business segments. December 31, 2016 Weighted Gross Accumulated Net Average Carrying Impairment Accumulated Carrying Remaining Life (Dollars in thousands) Amount Charges Amortization Amount (in years) Goodwill $ 15,235 $ (2,637) $ (667) $ 11,931 - Other intangible assets Amortizable Employment agreements $ 440 $ - $ (440) $ - - Insurance expirations 1,270 - (1,233) 37 0.4 Customer relationships 795 (95) (438) 262 5.6 2,505 (95) (2,111) 299 Unamortizable Carrier relationships - - - - Trade name 780 - - 780 - 780 - - 780 Total other intangible assets $ 3,285 $ (95) $ (2,111) $ 1,079 December 31, 2015 Weighted Gross Accumulated Net Average Carrying Impairment Accumulated Carrying Remaining Life Amount Charges Amortization Amount (in years) Goodwill $ 15,235 $ (2,637) $ (667) $ 11,931 - Other intangible assets Amortizable Employment agreements $ 440 $ - $ (440) $ - - Insurance expirations 1,270 - (1,148) 122 1.4 Customer relationships 795 (95) (391) 309 6.4 2,505 (95) (1,979) 431 Unamortizable Carrier relationships - - - - - Trade name 780 - - 780 - 780 - - 780 Total other intangible assets $ 3,285 $ (95) $ (1,979) $ 1,211 The aggregate amortization expense was $131 thousand, $133 thousand, and $201 thousand for the years ended December 31, 2016 , 2015 , and 2014 respectively. The following table provides information on current period and estimated future amortization expense for amortizable other intangible assets. Amortization (Dollars in thousands) Expense Estimate for years ended December 31, 2017 $ 84 2018 47 2019 47 2020 47 2021 44 |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
OTHER ASSETS [Abstract] | |
OTHER ASSETS | NOTE 7. OTHER ASSETS The Company had the following other assets at December 31, 2016 and 2015 . (Dollars in thousands) 2016 2015 Nonmarketable investment securities $ 1,650 $ 1,621 Accrued interest receivable 2,675 2,458 Deferred income taxes 7,039 12,132 Prepaid expenses 1,149 1,039 Cash surrender value on life insurance 2,589 2,521 Other assets 3,781 4,149 Total $ 18,883 $ 23,920 |
OTHER LIABILITIES
OTHER LIABILITIES | 12 Months Ended |
Dec. 31, 2016 | |
OTHER LIABILITIES [Abstract] | |
OTHER LIABILITIES | NOTE 8. OTHER LIABILITIES The Company had the following other liabilities at December 31, 2016 and 2015 . (Dollars in thousands) 2016 2015 Accrued interest payable $ 74 $ 106 Other accounts payable 2,461 2,775 Deferred compensation liability 1,444 1,464 Other liabilities 1,301 1,695 Total $ 5,280 $ 6,040 |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2016 | |
DEPOSITS [Abstract] | |
DEPOSITS | NOTE 9. DEPOSITS The approximate amount of certificates of deposit of $250,000 or more was $29.1 million and $29.1 million at December 31, 2016 and 2015 , respectively. The following table provides information on the approximate maturities of total time deposits at December 31, 2016 and 2015 . (Dollars in thousands) 2016 2015 Due in one year or less $ 154,328 $ 163,220 Due in one to three years 60,795 86,719 Due in three to five years 45,145 39,855 Total $ 260,268 $ 289,794 As of December 31, 2016 and 2015 , deposits, both direct and indirect, to directors, their associates and policy-making officers, totaled approximately $4.6 million and $5.6 million, respectively. |
SHORT-TERM BORROWINGS
SHORT-TERM BORROWINGS | 12 Months Ended |
Dec. 31, 2016 | |
SHORT-TERM BORROWINGS [Abstract] | |
SHORT-TERM BORROWINGS | NOTE 10. SHORT-TERM BORROWINGS The following table summarizes certain information on short-term borrowings for the years ended December 31, 2016 and 2015 . 2016 2015 (Dollars in thousands) Amount Rate Amount Rate Average for the Year Retail repurchase agreements $ 5,753 0.24 % $ 6,226 0.24 % At Year End Retail repurchase agreements $ 3,203 0.25 % $ 6,672 0.23 % Securities sold under agreements to repurchase are securities sold to customers, at the customers’ request, under a “roll-over” contract that matures in one business day. The underlying securities sold are U.S. Government agency securities, which are segregated in the Company’s custodial accounts from other investment securities. The Company may periodically borrow from a correspondent federal funds line of credit arrangement, under a secured reverse repurchase agreement, or from the Federal Home Loan Bank to meet short-term liquidity needs. |
BENEFIT PLANS
BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2016 | |
BENEFIT PLANS [Abstract] | |
BENEFIT PLANS | NOTE 11. BENEFIT PLANS 401(k) and Profit Sharing Plan The Company has a 401(k) and profit sharing plan covering substantially all full-time employees. The plan calls for matching contributions by the Company, and the Company makes discretionary contributions based on profits. Company contributions to this plan included in expense totaled $539 thousand, $491 thousand, and $545 thousand for 2016 , 2015 , and 2014 , respectively. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2016 | |
STOCK-BASED COMPENSATION [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 12. STOCK-BASED COMPENSATION At the 2016 annual meeting, stockholders approved the Shore Bancshares, Inc. 2016 Stock and Incentive Plan (“2016 Equity Plan”), replacing the Shore Bancshares, Inc. 2006 Stock and Incentive Plan (“2006 Equity Plan”), which expired on that date. The Company may issue shares of common stock or grant other equity-based awards pursuant to the 2016 Equity Plan. Stock-based awards granted to date generally are time-based, vest in equal installments on each anniversary of the grant date and range over a one - to five -year period of time, and, in the case of stock options, expire 10 years from the grant date. As part of the 2016 Equity Plan, a performance equity incentive award program, known as the “Long-term incentive plan” allows participating officers of the Company to earn incentive awards of performance share/restricted stock units if certain pre-determined targets are achieved at the end of a three-year performance cycle. Stock-based compensation expense based on the grant date fair value is recognized ratably over the requisite service period for all awards and reflects forfeitures as they occur. The 2016 Equity Plan originally reserved 750,000 shares of common stock for grant, and 732,545 shares remained available for grant at December 31, 2016 . The following tables provide information on stock-based compensation expense for 2016 , 2015 , and 2014 . (Dollars in thousands) 2016 2015 2014 Stock-based compensation expense $ 334 $ 283 $ 87 Excess tax benefits related to stock-based compensation 27 3 - December 31, (Dollars in thousands) 2016 2015 2014 Unrecognized stock-based compensation expense $ 337 $ 222 $ 59 Weighted average period unrecognized expense is expected to be recognized 0.9 years 1.5 years 0.8 years The following table summarizes restricted stock award activity for the Company under the 2016 Equity Plan for the three years ended December 31, 2016 . Year Ended December 31, 2016 Year Ended December 31, 2015 Year Ended December 31, 2014 Weighted Average Weighted Average Weighted Average Number of Grant Date Number of Grant Date Number of Grant Date Shares Fair Value Shares Fair Value Shares Fair Value Nonvested at beginning of period 12,488 $ 8.74 14,251 $ 8.51 13,930 $ 8.33 Granted 27,366 11.51 12,647 9.21 3,654 9.57 Vested (22,788) 10.01 (14,410) 8.93 (3,333) 8.93 Cancelled - - - - - - Nonvested at end of period 17,066 $ 11.46 12,488 $ 8.74 14,251 $ 8.51 The total fair value of restricted stock awards that vested was $228 thousand in 2016 , $129 thousand in 2015 , and $30 thousand in 2014. Restricted stock units (RSUs) are similar to restricted stock, except the recipient does not receive the stock immediately, but instead receives it upon the terms and conditions of the Company’s long-term incentive plans which are subject to performance milestones achieved at the end of a three-year period. Each RSU cliff vests at the end of the three -year period and entitles the recipient to receive one share of common stock on a specified issuance date. The recipient does not have any stockholder rights, including voting rights, with respect to the shares underlying awarded RSUs until the recipient becomes the holder of those shares. During 2016, the Company entered into a long-term incentive program agreement with officers of the Company and its subsidiaries to award RSUs based on a performance metric to be achieved as of December 31, 2018. These awards will cliff vest on this date, in which the final number of common shares to be issued will be determined. The range of RSUs which could potentially be awarded at the end of the performance cycle are between 12,214 shares and 48,871 shares, assuming a certain performance metric is met. In addition, two members of the long-term incentive plan from 2015 forfeited their RSUs due to leaving the Company before the end of the vesting period. The following table presents managements evaluation of the probable number of common stock awards to be issued at the end of the performance cycle. During 2015, the Company entered into a long-term incentive program agreement with officers of the Company and its subsidiaries to award RSUs based on performance metrics to be achieved as of December 31, 2017. These awards will cliff vest on this date, in which the final number of common shares to be issued will be determined. The range of RSUs which could potentially be awarded at the end of the performance cycle are 10,953 shares and 43,821 shares, assuming certain performance metrics are met. The following table presents managements evaluation of the probable number of common stock awards to be issued at the end of the performance cycle. The following table summarizes restricted stock units activity for the Company under the 2016 and 2006 Equity Plans for the three years ended December 31, 2016. Year Ended December 31, 2016 Year Ended December 31, 2015 Year Ended December 31, 2014 Weighted Average Weighted Average Weighted Average Number of Grant Date Number of Grant Date Number of Grant Date Shares Fair Value Shares Fair Value Shares Fair Value Outstanding at beginning of period 26,943 $ 9.49 - $ - - $ - Granted 24,433 11.68 26,943 9.49 - - Vested - - - - - - Forfeited (5,034) 9.49 - - - - Outstanding at end of period 46,342 $ 10.64 26,943 $ 9.49 - $ - The following table summarizes stock option activity for the Company under the 2016 Equity Plan for the three years ended December 31, 2016 . Year Ended December 31, 2016 Year Ended December 31, 2015 Year Ended December 31, 2014 Weighted Average Weighted Average Weighted Average Number of Grant Date Number of Grant Date Number of Grant Date Shares Fair Value Shares Fair Value Shares Fair Value Outstanding at beginning of period 61,327 $ 8.05 27,108 $ 6.64 40,662 $ 6.64 Granted 12,443 11.12 34,219 9.18 - - Exercised (11,684) 6.64 - - (3,593) 6.64 Expired/Cancelled - - - - (9,961) 6.64 Outstanding at end of period 62,086 $ 8.29 61,327 $ 8.05 27,108 $ 6.64 Exercisable at end of period 58,756 $ 8.14 44,218 $ 7.62 - $ - The weighted average fair value of stock options granted during 2016 was $5.03 . The Company estimates the fair value of options using the Black-Scholes valuation model with weighted average assumptions for dividend yield, expected volatility, risk-free interest rate and expected lives (in years). The expected dividend yield is calculated by dividing the total expected annual dividend payout by the average stock price. The expected volatility is based on historical volatility of the underlying securities. The risk-free interest rate is based on the Federal Reserve Bank’s constant maturities daily interest rate in effect at grant date. The expected contract life of the options represents the period of time that the Company expects the awards to be outstanding based on historical experience with similar awards. The following weighted average assumptions were used as inputs to the Black-Scholes valuation model for options granted in 2016 and 2015 . 2016 2015 Dividend yield 0.73 % - % Expected volatility 38.60 % 32.00 % Expected forfeiture rate - % - % Risk-free interest rate 1.75 % 1.97 % Expected contract life (in years) 10 years 7 years At December 31, 2016 , the aggregate intrinsic value of the options outstanding under the 2016 Equity Plan was $432 thousand based on the $15.25 market value per share of Shore Bancshares, Inc.’s common stock at December 31, 2016 . During 2016, 11,684 options were exercised. The intrinsic value associated with these stock options exercised was $21 thousand. Cash received on exercise of these options totaled $53 thousand. At December 31, 2016 , the weighted average remaining contract life of options outstanding was 7.1 years. |
DEFERRED COMPENSATION
DEFERRED COMPENSATION | 12 Months Ended |
Dec. 31, 2016 | |
DEFERRED COMPENSATION [Abstract] | |
DEFERRED COMPENSATION | NOTE 13. DEFERRED COMPENSATION The Shore Bancshares, Inc. Executive Deferred Compensation Plan (the “Plan”) is for members of management and highly compensated employees of Shore Bancshares, Inc. and its subsidiaries. The Plan permits a participant to elect, each year, to defer receipt of up to 100% of his or her salary and bonus to be earned in the following year. The Plan also permits the participant to defer the receipt of performance-based compensation not later than six months before the end of the period for which it is to be earned. The deferred amounts are credited to an account maintained on behalf of the participant and are invested at the discretion of each participant in certain deemed investment options selected from time to time by the Compensation Committee of the Board of Shore Bancshares, Inc. Shore Bancshares, Inc. may also make matching, mandatory and discretionary contributions for certain participants. A participant is fully vested at all times in the amounts that he or she elects to defer. Any contributions by Shore Bancshares, Inc. will vest over a five -year period. There were no elective deferrals made by plan participants during 2016 , 2015 or 2014 . The following table provides information on Shore Bancshares, Inc.’s contributions to the Plan for 2016 , 2015 , and 2014 and the related deferred compensation liability at December 31, 2016 and 2015 . (Dollars in thousands) 2016 2015 2014 Deferred compensation contribution $ - $ - $ - December 31, (Dollars in thousands) 2016 2015 Deferred compensation liability $ 496 $ 444 Shore United Bank assumed agreements held by the former CNB Bank under which its former directors had elected to defer part of their fees and compensation while serving on the former Board of CNB. The amounts deferred are invested in insurance policies, on the lives of the respective individuals. Amounts available under the policies are to be paid to the individuals as retirement benefits over future years. The following table includes information on the cash surrender value and the accrued benefit obligation included in other assets and other liabilities at December 31, 2016 and 2015 . (Dollars in thousands) 2016 2015 Cash surrender value $ 3,552 $ 3,448 Accrued benefit obligation 1,444 1,020 |
OTHER EXPENSES
OTHER EXPENSES | 12 Months Ended |
Dec. 31, 2016 | |
OTHER EXPENSES [Abstract] | |
OTHER EXPENSES | NOTE 14. OTHER EXPENSES The following table summarizes the Company’s other noninterest expenses for the years ended December 31: (Dollars in thousands) 2016 2015 2014 Advertising and marketing $ 528 $ 495 $ 428 Other customer expense 279 172 396 Other expense 2,096 2,168 2,070 Other loan expense 510 515 894 Software expense 895 697 664 Travel and entertainment expense 315 303 288 Trust professional fees 539 625 686 Total noninterest expense $ 5,162 $ 4,975 $ 5,426 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | NOTE 15. INCOME TAXES The following table provides information on components of income tax expense for each of the three years ended December 31. (Dollars in thousands) 2016 2015 2014 Current tax expense (benefit): Federal $ 525 $ 247 $ - State 19 287 225 544 534 225 Deferred income tax expense (benefit): Federal 4,486 3,369 2,516 State 1,230 505 320 5,716 3,874 2,836 Total income tax expense (benefit) $ 6,261 $ 4,408 $ 3,061 The following table provides a reconciliation of tax computed at th e statutory federal tax rate to the actual tax expense (benefit) for each of the three years ended December 31. (Dollars in thousands) 2016 2015 2014 Tax at federal statutory rate 35.0 % 34.0 % 34.0 % Tax effect of: Tax-exempt income (0.8) (0.4) (0.9) Other non-deductible expenses 0.3 0.2 0.3 State income taxes, net of federal benefit 5.1 4.5 4.4 Other (0.2) (0.1) (0.1) Actual income tax expense (benefit) rate 39.4 % 38.2 % 37.7 % The following table provides information on significant components of the Company’s deferred tax assets and liabilities as of December 31. (Dollars in thousands) 2016 2015 Deferred tax assets: Allowance for credit losses $ 3,486 $ 3,316 Reserve for off-balance sheet commitments 122 121 Net operating loss carry forward 2,232 9,069 Write-downs of other real estate owned 387 308 Deferred income 1,011 1,155 Unrealized gains on available-for-sale securities 672 48 Accrued expenses - 946 AMT Credits 869 - Other 1,192 191 Total deferred tax assets 9,971 15,154 Deferred tax liabilities: Depreciation 239 271 Amortization on loans FMV adjustment 156 140 Purchase accounting adjustments 2,019 1,988 Deferred capital gain on branch sale 401 411 Other 116 212 Total deferred tax liabilities 2,931 3,022 Net deferred tax assets $ 7,040 $ 12,132 The Company’s deferred tax assets consists of gross net operating loss carryovers for federal and state of $2.2 million and $27.3 million that will be used to offset taxable income in future periods. The Company’s federal and state net operating loss carryovers are available for use through December 31, 2033 while its state net operating losses will begin to expire in the year ended December 31, 2026 with limited amounts available through December 31, 2034 . Additionally, the Company has $869 thousand of alternative minimum tax credit carryforwards as of December 31, 2016 which may be carried forward indefinitely. No valuation allowance on these deferred tax assets was recorded at December 31, 2016 and December 31, 2015 as management believes it is more likely than not that all deferred tax assets will be realized based on the following positive material factors: 1) The Company was profitable for all four quarters of 2014, 2015 and 2016 on a GAAP basis. The net operating loss was originally created in the third quarter of 2013 and was solely attributable to the former Talbot Bank’s sale of loans and other real estate owned (the “Asset Sale”), which is considered non-recurring. 2) The Company had pre-tax income of $15.9 million and $11.5 million for the years ended December 31, 2016 and 2015 , providing further evidence that the Asset Sale was producing positive results and confirming the expectation of utilizing the deferred tax assets. Alternatively, the Company has reviewed negative factors which would influence the conclusion of realizing the deferred tax assets. These factors include the following: 1) The Company could be subject to Section 382 of the Internal Revenue Code (“IRC”), which could further limit the realization of the net operating loss-related deferred tax asset (“NOL-DTA”). 2) Although the local economy of the market in which the Company operates has been showing continued signs of improvement over the past four years, if this trend flattens or reverses, there is a potential that this potential negative evidence could outweigh the prevailing positive factors. Based on the aforementioned considerations, the Company has concluded that the predominance of observable positive evidence outweighs the future potential of negative evidence and therefore it is more likely than not that the Company will be able to realize in the future all of the net deferred tax assets. |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2016 | |
EARNINGS PER COMMON SHARE [Abstract] | |
EARNINGS PER COMMON SHARE | NOTE 16. EARNINGS PER COMMON SHARE Basic earnings/(loss) per common share is calculated by dividing net income/(loss) available to (allocable to) common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings/(loss) per common share is calculated by dividing net income/(loss) available to (allocable to) common stockholders by the weighted average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents (stock-based awards). There is no dilutive effect on the loss per share during loss periods. The following table provides information relating to the calculation of earnings/(loss) per common share. (In thousands, except per share data) 2016 2015 2014 Net income $ 9,638 $ 7,108 $ 5,051 Weighted average shares outstanding - basic 12,652 12,629 10,945 Dilutive effect of common stock equivalents 17 10 8 Weighted average shares outstanding - diluted 12,669 12,639 10,953 Income per common share - basic $ 0.76 $ 0.56 $ 0.46 Income per common share - diluted $ 0.76 $ 0.56 $ 0.46 The calculations of diluted income per share excluded weighted average common stock equivalents of 0 for 2016 , 0 for 2015 , and 51 thousand for 2014 because the effect of including them would have been antidilutive. |
REGULATORY CAPITAL REQUIREMENTS
REGULATORY CAPITAL REQUIREMENTS | 12 Months Ended |
Dec. 31, 2016 | |
REGULATORY CAPITAL REQUIREMENTS [Abstract] | |
REGULATORY CAPITAL REQUIREMENTS | NOTE 17. REGULATORY CAPITAL REQUIREMENTS Shore Bancshares, Inc. and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory - and possibly additional discretionary - actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Banks’ assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Banks’ capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Basel III The FRB and the FDIC approved the final rules implementing the Basel Committee on Banking Supervision's (“BCBS”) capital guidelines for U.S. banks. Under the final rules, minimum requirements increased for both the quantity and quality of capital held by the Company. The rules include a new common equity Tier 1 capital to risk-weighted assets minimum ratio of 4.5%, raise the minimum ratio of Tier 1 capital to risk-weighted assets to 6.0%, require a minimum ratio of Total Capital to risk-weighted assets of 8.0%, and require a minimum Tier 1 leverage ratio of 4.0%. A new capital conservation buffer, comprised of common equity Tier 1 capital, is also established above the regulatory minimum capital requirements. This capital conservation buffer was phased in beginning January 1, 2016 at 0.625% of risk-weighted assets and increase each subsequent year by an additional 0.625% until reaching its final level of 2.5% on January 1, 2019. Strict eligibility criteria for regulatory capital instruments were also implemented under the final rules. The final rules also revise the definition and calculation of Tier 1 capital, Total Capital, and risk-weighted assets. The phase-in period for the final rules became effective for the Company on January 1, 2015, with full compliance with all of the final rules’ requirements phased in over a multi-year schedule, to be fully phased-in by January 1, 2019. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain amounts and ratios (set forth in the table below) of Tier 1 and total capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average assets (leverage ratio). As of December 31, 2016 , management believes that Shore Bancshares, Inc. and Shore United Bank met all capital adequacy requirements to which they are subject. As of December 31, 2016 , the most recent notification from the Federal Deposit Insurance Corporation categorized the former Talbot Bank and CNB, now Shore Untied Bank, as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes would change the Bank’s classification. To be categorized as well capitalized, the Bank must maintain minimum common equity Tier 1, Tier 1 risk-based and total risk-based capital ratios, and Tier 1 leverage ratios, which are described below. The minimum ratios for capital adequacy purposes are 5.125%, 6.625%, 8.625% and 4.000% for the common equity Tier 1, Tier 1 risk-based capital, total risk-based capital and leverage ratios, which includes a capital conservation buffer of 0.625% respectively. To be categorized as well capitalized, a bank must maintain minimum ratios of 6.50%, 8.00%, 10.00% and 5.00% for its common equity Tier 1, Tier 1 risk-based capital, total risk-based capital and leverage ratios, respectively. Shore Bancshares, Inc., as a financial holding company, is subject to the well-capitalized requirement. The following tables present the capital amounts and ratios for Shore Bancshares, Inc. and Shore United Bank as of December 31, 2016 and Shore Bancshares, Inc., Talbot Bank and CNB as of December 31, 2015 . Common Total Net Tier 1 Total Equity/ Risk- Risk- Adjusted Common Risk-Based Risk-Based Tier 1 Tier 1 Based Weighted Average Equity Capital Capital Leverage December 31, 2016 Capital Capital Assets Total Assets Tier 1 ratio Ratio Ratio Ratio Company $ 140,897 $ 149,924 $ 893,116 $ 1,144,968 15.78 % 15.78 % 16.79 % 12.31 % Shore United Bank 122,543 131,570 885,206 1,126,136 13.84 % 13.84 % 14.86 % 10.88 % Common Total Net Tier 1 Total Equity/ Risk- Risk- Adjusted Common Risk-Based Risk-Based Tier 1 Tier 1 Based Weighted Average Equity Capital Capital Leverage December 31, 2015 Capital Capital Assets Total Assets Tier 1 ratio Ratio Ratio Ratio Company (1) $ 126,024 $ 134,643 $ 807,807 $ 1,116,692 15.60 % 15.60 % 16.67 % 11.29 % Talbot Bank (1) 59,692 64,405 448,634 613,945 13.31 % 13.31 % 14.36 % 9.72 % CNB 48,051 51,957 354,278 486,404 13.56 % 13.56 % 14.67 % 9.88 % (1) During 2016 an amended Call Report was filed for December 31, 2015. Bank and holding company regulations, as well as Maryland law, impose certain restrictions on dividend payments by the Bank, as well as restricting extensions of credit and transfers of assets between the Bank and the Company. At December 31, 2016, the Bank could pay dividends to the parent to the extent of its earnings so long as it maintained required capital ratios. The former CNB paid dividends of $680 thousand to Shore Bancshares, Inc. during 2016 before merging with the Talbot Bank and becoming Shore United Bank . Shore Bancshares, Inc. had no outstanding receivables from subsidiaries at December 31, 2016 or 2015 . |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Dec. 31, 2016 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | NOTE 18. ACCUMULATED OTHER COMPREHENSIVE INCOME The Company records unrealized holding gains (losses), net of tax, on investment securities available for sale as accumulated other comprehensive income (loss), a separate component of stockholders’ equity. The following table provides information on the changes in the components of accumulated other comprehensive income (loss) for 2016 and 2015 . Accumulated net unrealized holding Total accumulated gains (losses) on other available for sale comprehensive (Dollars in thousands) securities income(loss) Balance, December 31, 2015 $ (71) $ (71) Other comprehensive income (922) (922) Balance, December 31, 2016 $ (993) $ (993) Balance, December 31, 2014 $ 316 $ 316 Other comprehensive income (387) (387) Balance, December 31, 2015 $ (71) $ (71) The following table presents the amounts reclassified out of each component of accumulated comprehensive income (loss) for the years ended December 31, 2016 , 2015 , and 2014 . Details about Accumulated Other Amount Reclassified from Accumulated Comprehensive Income Components Other Comprehensive Income Affected Line Item in the Statement Where (dollars in thousands) (Loss) Net Income is Presented Year Ended December 31, 2016 2015 2014 Realized gain on sale of investment securities $ 18 $ - $ 14 Gain on sale of investment securities Total Reclassification for the Period $ 18 $ - $ 14 |
LINES OF CREDIT
LINES OF CREDIT | 12 Months Ended |
Dec. 31, 2016 | |
LINES OF CREDIT [Abstract] | |
LINES OF CREDIT | NOTE 19. LINES OF CREDIT The Bank had $15.0 million and $13.0 million in federal funds lines of credit and a reverse repurchase agreement available on a short-term basis from correspondent banks at December 31, 2016 and 2015 . In addition, the Banks had credit availability of approximately $205.1 million and $130.2 million from the Federal Home Loan Bank at December 31, 2016 and 2015 , respectively. These lines of credit are paid for monthly on a fee basis of 0.10% . The Bank has pledged as collateral, under a blanket lien, all qualifying residential loans under borrowing agreements with the Federal Home Loan Bank. The Bank had no short-term borrowings from the Federal Home Loan Bank at December 31, 2016 or 2015 . |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2016 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 20. FAIR VALUE MEASUREMENTS Accounting guidance under GAAP defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This accounting guidance also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Securities available for sale are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as impaired loans, loans held for sale and other real estate owned (foreclosed assets). These nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets. Under fair value accounting guidance, assets and liabilities are grouped at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine their fair values. These hierarchy levels are: Level 1 inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that the entity has the ability to access at the measurement date. Level 2 inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs – Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. Assets Measured at Fair Value on a Recurring Basis Investment Securities Available for Sale Fair value measurement for investment securities available for sale is based on quoted prices from an independent pricing service. The fair value measurements consider observable data that may include present value of future cash flows, prepayment assumptions, credit loss assumptions and other factors. The Company classifies its investments in U.S. Treasury securities as Level 1 in the fair value hierarchy, and it classifies its investments in U.S. Government agencies securities and mortgage-backed securities issued or guaranteed by U.S. Government sponsored entities as Level 2. The tables below present the recorded amount of assets measured at fair value on a recurring basis at December 31, 2016 and 2015. No assets were transferred from one hierarchy level to another during 2016or 2015. Significant Other Significant Quoted Observable Unobservable Prices Inputs Inputs (Dollars in thousands) Fair Value (Level 1) (Level 2) (Level 3) December 31, 2016 Securities available for sale: U.S. Treasury $ - $ - $ - $ - U.S. Government agencies 34,214 - 34,214 - Mortgage-backed 128,944 - 128,944 - Equity 640 - 640 - Total $ 163,798 $ - $ 163,798 $ - Significant Other Significant Quoted Observable Unobservable Prices Inputs Inputs (Dollars in thousands) Fair Value (Level 1) (Level 2) (Level 3) December 31, 2015 Securities available for sale: U.S. Treasury $ 5,079 $ 5,079 $ - $ - U.S. Government agencies 49,529 - 49,529 - Mortgage-backed 156,916 - 156,916 - Equity 641 - 641 - Total $ 212,165 $ 5,079 $ 207,086 $ - Assets Measured at Fair Value on a Nonrecurring Basis Impaired Loans Loans are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loan impairment is measured using the present value of expected cash flows, the loan’s observable market price or the fair value of the collateral (less selling costs) if the loans are collateral dependent and these are considered Level 3 in the fair value hierarchy . Collateral may be real estate and/or business assets including equipment, inventory and/or accounts receivable. The value of business equipment, inventory and accounts receivable, discounted on management’s review and analysis. Appraised and reported values may be discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, and/or management’s expertise and knowledge of the client and the client’s business. Impaired loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the factors identified above. Valuation techniques are consistent with those techniques applied in prior periods. Other Real Estate Owned (Foreclosed Assets) Foreclosed assets are adjusted for fair value upon transfer of loans to foreclosed assets. Subsequently, foreclosed assets are carried at the lower of carrying value and fair value. The estimated fair value for foreclosed assets included in Level 3 are determined by independent market based appraisals and other available market information, less costs to sell, that may be reduced further based on market expectations or an executed sales agreement. If the fair value of the collateral deteriorates subsequent to the initial recognition, the Company records the foreclosed asset as a non-recurring Level 3 adjustment. Valuation techniques are consistent with those techniques applied in prior periods. The following tables sets forth the Company’s financial assets subject to fair value adjustments (impairment) on a nonrecurring basis at December 31, 2016 and 2015, that are valued at the lower of cost or market. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The assets in the following table were transferred during 2016 from Level 2 to Level 3, based on managements reassessment an evaluation of the inputs in relation to impaired loans and foreclosed assets. This reassessment resulted in management conclusion that the inputs for these assets were more reflective of Level 3 as unobservable inputs and applied retrospectively to prior periods reported. Significant Other Significant Quoted Observable Unobservable Prices Inputs Inputs (Dollars in thousands) Fair Value (Level 1) (Level 2) (Level 3) December 31, 2016 Impaired loans Construction $ 6,368 $ - $ - $ 6,368 Residential real estate 7,461 - - 7,461 Commercial real estate 5,903 - - 5,903 Commercial - - - - Consumer 99 - - 99 Total impaired loans 19,831 - - 19,831 Other real estate owned 2,477 - - 2,477 Total assets measured at fair value on a nonrecurring basis $ 22,308 $ - $ - $ 22,308 Significant Other Significant Quoted Observable Unobservable Prices Inputs Inputs (Dollars in thousands) Fair Value (Level 1) (Level 2) (Level 3) December 31, 2015 Impaired loans Construction $ 10,979 $ - $ - $ 10,979 Residential real estate 7,510 - - 7,510 Commercial real estate 7,422 - - 7,422 Commercial 161 - - 161 Consumer 115 - - 115 Total impaired loans 26,187 - - 26,187 Other real estate owned 4,252 - - 4,252 Total assets measured at fair value on a nonrecurring basis $ 30,439 $ - $ - $ 30,439 Fair Value of Financial Assets and Financial Liabilities The following information relates to the estimated fair values of financial assets and liabilities that are reported in the Company’s consolidated balance sheets at their carrying amounts. The discussion below describes the methods and assumptions used to estimate the fair value of each class of financial asset and liability for which it is practicable to estimate that value. Cash and Cash Equivalents Cash equivalents include interest-bearing deposits with other banks and federal funds sold. For these short-term instruments, the carrying amount is a reasonable estimate of fair value. Investment Securities Held to Maturity For all investments in debt securities, fair values are based on quoted prices. If a quoted price is not available, fair value is estimated using quoted prices for similar securities. Loans The fair values of categories of fixed rate loans, such as commercial loans, residential real estate, and other consumer loans, are estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Other loans, including variable rate loans, are adjusted for differences in loan characteristics. Deposits and Short-Term Borrowings The fair values of demand deposits, savings accounts, and certain money market deposits are the amounts payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities. These estimates do not take into consideration the value of core deposit intangibles. Generally, the carrying amount of short-term borrowings is a reasonable estimate of fair value. The fair values of securities sold under agreements to repurchase (included in short-term borrowings) and long-term debt are estimated using the rates offered for similar borrowings. Commitments to Extend Credit and Standby Letters of Credit The majority of the Company’s commitments to grant loans and standby letters of credit are written to carry current market interest rates if converted to loans. In general, commitments to extend credit and letters of credit are not assignable by the Company or the borrower, so they generally have value only to the Company and the borrower. Therefore, it is impractical to assign any value to these commitments. The following table provides information on the estimated fair values of the Company’s financial assets and liabilities that are reported in the balance sheets at their carrying amounts. The financial assets and liabilities have been segregated by their classification level in the fair value hierarchy. December 31, 2016 December 31, 2015 Estimated Estimated Carrying Fair Carrying Fair (Dollars in thousands) Amount Value Amount Value Financial assets Level 1 inputs Cash and cash equivalents $ 75,938 $ 75,938 $ 73,811 $ 73,811 Level 2 inputs Investment securities held to maturity $ 6,808 $ 6,806 $ 4,191 $ 4,243 Loans, net 862,799 867,594 786,798 788,187 Financial liabilities Level 2 inputs Deposits $ 997,489 $ 929,573 $ 975,464 $ 922,161 Short-term borrowings 3,203 3,203 6,672 6,672 |
FINANCIAL INSTRUMENTS WITH OFF-
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK | 12 Months Ended |
Dec. 31, 2016 | |
Financial Instruments With Off Balance Sheet Risk Disclosure [Abstract] | |
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK | NOTE 21. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK In the normal course of business, to meet the financing needs of its customers, the Bank is party to financial instruments with off-balance sheet risk. These financial instruments include commitments to extend credit and standby letters of credit. The Banks’ exposure to credit loss in the event of nonperformance by the other party to these financial instruments is represented by the contractual amount of the instruments. The Bank uses the same credit policies in making commitments and conditional obligations as they do for on-balance sheet instruments. The Bank generally requires collateral or other security to support the financial instruments with credit risk. The amount of collateral or other security is determined based on management’s credit evaluation of the counterparty. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. 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. Letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. Letters of credit and other commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Because many of the letters of credit and commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. The following table provides information on commitments outstanding as of December 31, 2016 and 2015 . (Dollars in thousands) December 31, 2016 December 31, 2015 Commitments to extend credit $ 178,233 $ 166,931 Letters of credit 8,024 7,087 Total $ 186,257 $ 174,018 The Bank has established an allowance for off balance sheet credit exposures. The allowance is established as losses are estimated to have occurred through a loss for off balance sheet credit exposures charged to earnings. Losses are charged against the allowance when management believes the required funding of these exposures is uncollectible. While this evaluation is completed on a regular basis, it is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 22. RELATED PARTY TRANSACTIONS Shore Bancshares Inc. and its bank and insurance subsidiaries on occasion rent ballroom space from the Tidewater Inn located in Easton Maryland, to hold company meetings and events. A director of the board of Shore Bancshares Inc. holds a 61% interest in a limited liability company which owns the Tidewater Inn. During 2016 and 2015 , approximately $16 thousand and $38 thousand in expenses were paid for rental and catering services. |
CONTINGENCIES
CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
CONTINGENCIES [Abstract] | |
CONTINGENCIES | NOTE 23. CONTINGENCIES In the normal course of business, Shore Bancshares, Inc. and its subsidiaries may become involved in litigation arising from banking, financial, and other activities. Management, after consultation with legal counsel, does not anticipate that the future liability, if any, arising out of current proceedings will have a material effect on the Company’s financial condition, operating results, or liquidity. |
PARENT COMPANY FINANCIAL INFORM
PARENT COMPANY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2016 | |
PARENT COMPANY FINANCIAL INFORMATION [Abstract] | |
PARENT COMPANY FINANCIAL INFORMATION | NOTE 24. PARENT COMPANY FINANCIAL INFORMATION The following tables provide condensed financial information for Shore Bancshares, Inc. (Parent Company Only). Condensed Balance Sheets December 31, (Dollars in thousands) 2016 2015 Assets Cash $ 1,249 $ 1,899 Investment securities 11,846 12,246 Investment in subsidiaries 137,078 129,353 Premises and equipment, net 3,547 3,598 Other assets 3,160 2,419 Total assets $ 156,880 $ 149,515 Liabilities Accrued interest payable $ 1 $ 1 Other liabilities 1,737 1,204 Long-term debt 843 1,343 Total liabilities 2,581 2,548 Stockholders' equity Common stock 127 126 Additional paid in capital 64,201 63,815 Retained earnings 90,964 83,097 Accumulated other comprehensive (loss) (993) (71) Total stockholders' equity 154,299 146,967 Total liabilities and stockholders' equity $ 156,880 $ 149,515 Condensed Statement of Operations For the Years Ended December 31, (Dollars in thousands) 2016 2015 2014 Income Dividends from subsidiaries $ 1,230 $ 1,045 $ 200 Management and other fees from subsidiaries 8,960 8,723 7,933 Other income 278 228 110 Total income 10,468 9,996 8,243 Expenses Interest expense 46 61 80 Salaries and employee benefits 6,296 5,536 5,321 Occupancy and equipment expense 327 325 541 Other operating expenses 2,739 3,215 2,387 Total expenses 9,408 9,137 8,329 Income (loss) before income tax benefit and equity in undistributed net income (loss) of subsidiaries 1,060 859 (86) Income tax benefit (58) (65) (107) Income before equity in undistributed net income of subsidiaries 1,118 924 21 Equity in undistributed net income of subsidiaries 8,520 6,184 5,030 Net income $ 9,638 $ 7,108 $ 5,051 Condensed Statements of Cash Flows For the Years Ended December 31, (Dollars in thousands) 2016 2015 2014 Cash flows from operating activities: Net income $ 9,638 $ 7,108 $ 5,051 Adjustments to reconcile net (income) loss to cash provided by operating activities: Equity in undistributed net (income) loss of subsidiaries (8,520) (6,184) (5,030) Depreciation and amortization 288 336 379 Stock-based compensation expense 334 283 87 Excess tax benefit from stock-based arrangements (27) (3) - Net (increase) in other assets (669) (1,108) (121) Net increase in other liabilities 533 328 271 Net cash provided by operating activities 1,577 760 637 Cash flows from investing activities: Proceeds from maturities and principal payments of investment securities available for sale 2,171 1,418 442 Purchases of securities (2,032) (4,054) (10,112) Purchases of premises and equipment (175) (672) (632) Cash received from merged subsidiary - 3,349 - Investment in subsidiaries - - (20,000) Net cash (used in) provided by investing activities (36) 41 (30,302) Cash flows from financing activities: Repayment of long-term debt (500) (500) (500) Excess tax benefit from stock-based arrangements 27 3 - Proceeds from issuance of common stock 53 - 31,279 Common stock dividends paid (1,771) (506) - Net cash (used in) provided by financing activities (2,191) (1,003) 30,779 Net (decrease) increase in cash and cash equivalents (650) (202) 1,114 Cash and cash equivalents at beginning of year 1,899 2,101 987 Cash and cash equivalents at end of year $ 1,249 $ 1,899 $ 2,101 |
QUARTERLY FINANCIAL RESULTS
QUARTERLY FINANCIAL RESULTS | 12 Months Ended |
Dec. 31, 2016 | |
QUARTERLY FINANCIAL RESULTS [Abstract] | |
QUARTERLY FINANCIAL RESULTS | NOTE 25. QUARTERLY FINANCIAL RESULTS (unaudited) The following table provides a summary of selected consolidated quarterly financial data for the three years ended December 31, 2016 . First Second Third Fourth (In thousands, except per share data) Quarter Quarter Quarter Quarter 2016 Interest income $ 9,908 $ 10,003 $ 10,236 $ 10,505 Net interest income 9,243 9,383 9,658 9,965 Provision for credit losses 450 375 605 418 Income before income taxes 3,995 3,684 3,843 4,377 Net income 2,460 2,272 2,411 2,495 Basic earnings per common share $ 0.19 $ 0.18 $ 0.19 $ 0.20 Diluted earnings per common share $ 0.19 $ 0.18 $ 0.19 $ 0.20 Dividends paid per common share $ 0.03 $ 0.03 0.03 $ 0.05 2015 Interest income $ 9,445 $ 9,542 $ 9,837 $ 10,047 Net interest income 8,539 8,683 9,010 9,293 Provision for credit losses 650 540 410 475 Income before income taxes 2,270 2,631 3,109 3,506 Net income 1,409 1,627 1,909 2,163 Basic earnings per common share $ 0.11 $ 0.13 $ 0.15 $ 0.17 Diluted earnings per common share $ 0.11 $ 0.13 $ 0.15 $ 0.17 Dividends paid per common share $ - $ - $ 0.02 $ 0.02 2014 Interest income $ 9,455 $ 9,523 $ 9,686 $ 9,625 Net interest income 8,323 8,447 8,636 8,636 Provision for credit losses 975 950 775 650 Income before income taxes 2,021 2,108 2,036 1,947 Net income 1,258 1,305 1,262 1,226 Basic earnings per common share $ 0.15 $ 0.13 $ 0.10 $ 0.10 Diluted earnings per common share $ 0.15 $ 0.13 $ 0.10 $ 0.10 Dividends paid per common share $ - $ - $ - $ - Earnings per share are based on quarterly results and may not be additive to the annual earnings per share amounts. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2016 | |
SEGMENT REPORTING [Abstract] | |
SEGMENT REPORTING | NOTE 26. SEGMENT REPORTING The Company operates two primary business segments: Community Banking and Insurance Products and Services. The Community Banking business provides services to consumers and small businesses on the Eastern Shore of Maryland and in Delaware through its 18-branch network. Community banking activities include small business services, retail brokerage, trust services and consumer banking products and services. Loan products available to consumers include mortgage, home equity, automobile, marine, and installment loans, credit cards and other secured and unsecured personal lines of credit. Small business lending includes commercial mortgages, real estate development loans, equipment and operating loans, as well as secured and unsecured lines of credit, credit cards, accounts receivable financing arrangements, and merchant card services. Through the Insurance Products and Services business, the Company provides a full range of insurance products and services to businesses and consumers in the Company’s market areas. Products include property and casualty, life, marine, individual health and long-term care insurance. Pension and profit sharing plans and retirement plans for executives and employees are available to suit the needs of individual businesses. Selected financial information by business segments is included in the following table. Community Insurance Products Parent Consolidated (Dollars in thousands) Banking and Services Company Total 2016 Interest Income $ 40,400 $ - $ 252 $ 40,652 Interest Expense (2,403) - - (2,403) Provision for credit losses (1,848) - - (1,848) Noninterest income 7,935 8,710 - 16,645 Noninterest expense (21,054) (6,890) (9,203) (37,147) Net intersegment (expense) income (8,020) (761) 8,781 - Income (loss) before taxes 15,010 1,059 (170) 15,899 Income tax (expense) benefit (5,887) (432) 58 (6,261) Net Income (loss) $ 9,123 $ 627 $ (112) $ 9,638 Total assets $ 1,132,863 $ 9,596 $ 17,814 $ 1,160,271 2015 Interest Income $ 38,652 $ - $ 219 $ 38,871 Interest Expense (3,346) - - (3,346) Provision for credit losses (2,075) - - (2,075) Noninterest income 7,135 8,297 (16) 15,416 Noninterest expense (21,480) (6,984) (8,886) (37,350) Net intersegment (expense) income (7,718) (781) 8,499 - Income (loss) before taxes 11,168 532 (184) 11,516 Income tax (expense) benefit (4,274) (204) 70 (4,408) Net Income (loss) $ 6,894 $ 328 $ (114) $ 7,108 Total assets $ 1,107,367 $ 9,984 $ 17,792 $ 1,135,143 2014 Interest Income $ 38,202 $ - $ 87 $ 38,289 Interest Expense (4,247) - - (4,247) Provision for credit losses (3,350) - - (3,350) Noninterest income 6,482 10,305 (6) 16,781 Noninterest expense (22,776) (8,527) (8,058) (39,361) Net intersegment (expense) income (7,010) (680) 7,690 - Income (loss) before taxes 7,301 1,098 (287) 8,112 Income tax (expense) benefit (2,755) (414) 108 (3,061) Net Income (loss) $ 4,546 $ 684 $ (179) $ 5,051 Total assets $ 1,074,638 $ 10,824 $ 14,940 $ 1,100,402 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 27. SUBSEQUENT EVENTS On January 10, 2017, Shore United Bank announced it had entered into a purchase and assumption agreement to acquire three branches from Northwest Bank located in the greater Baltimore, Maryland metropolitan area communities of Elkridge, Owings Mills and Arbutus. Pursuant to the branch purchases, Shore United bank will acquire approximately $214 million in deposits, $152 million of performing loans and $40 million in cash from Northwest Bank. In connection with the purchase of these branches, Shore United will pay an 8% deposit premium for the transaction. Subject to customary closing conditions, including the receipt of all necessary regulatory approvals, the acquisition is expected to be completed during the second quarter of 2017 . Management is evaluating the recording of this transaction as a business combination. |
SUMMARY OF SIGNIFICANT ACCOUN35
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Nature of Operations | Nature of Operations The Company engages in the banking business through Shore United Bank, a Maryland commercial bank with trust powers. The Company’s primary source of revenue is interest earned on commercial, real estate and consumer loans made to customers located on the Delmarva Peninsula. The Company engages in the insurance business through an insurance producer firm, The Avon-Dixon Agency, LLC, (“Avon-Dixon”) with two specialty lines, Elliott Wilson Insurance (Trucking) and Jack Martin Associates (Marine); and an insurance premium finance company, Mubell Finance, LLC (“Mubell”) (Avon-Dixon and Mubell are collectively referred to as the “Insurance Subsidiaries”). Avon-Dixon and Mubell are wholly-owned subsidiaries of Shore Bancshares, Inc. The Company engages in the trust services business through the trust department at Shore United Bank under the trade name Wye Financial & Trust. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The allowance for credit losses is a material estimate that is particularly susceptible to significant changes in the near term. Management believes that the Company’s current allowance for credit losses is sufficient to address the probable losses in the current portfolio. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions. In addition, various regulatory agencies, as an integral part of their examination processes, periodically review the Company’s allowance for credit losses. Such agencies may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination. |
Investment Securities Available for Sale | Investment Securities Available for Sale Investment securities available for sale are stated at estimated fair value based on quoted prices. They represent those securities which management may sell as part of its asset/liability management strategy or which may be sold in response to changing interest rates, changes in prepayment risk or other similar factors. Realized gains and losses are recorded in noninterest income and are determined on a trade date basis using the specific identification method. Premiums and discounts are amortized or accreted into interest income using the interest method over the expected lives of the individual securities. Interest and dividends on investment securities are recognized in interest income on an accrual basis. Net unrealized holding gains and losses on these securities are reported as accumulated other comprehensive income, a separate component of stockholders’ equity, net of related income taxes. Declines in the fair value of individual available-for-sale securities below their cost that are other than temporary result in write-downs of the individual securities to their fair value and are reflected in earnings as realized losses. Factors affecting the determination of whether an other-than-temporary impairment has occurred include a downgrade of the security by a rating agency, a significant deterioration in the financial condition of the issuer, or a determination that management has the intent to sell the security or will be required to sell the security before recovery of its amortized cost. |
Investment Securities Held to Maturity | Investment Securities Held to Maturity Investment securities held to maturity are stated at cost adjusted for amortization of premiums and accretion of discounts. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. The Company intends and has the ability to hold such securities until maturity. Declines in the fair value of individual held-to-maturity securities below their cost that are other than temporary result in write-downs of the individual securities to their fair value. Factors affecting the determination of whether an other-than-temporary impairment has occurred include a downgrade of the security by a rating agency, a significant deterioration in the financial condition of the issuer, or a determination that management has the intent to sell the security or will be required to sell the security before recovery of its amortized cost. |
Loans | Loans Loans are stated at their principal amount outstanding net of any deferred fees, premiums, discounts and costs. Interest income on loans is accrued at the contractual rate based on the principal amount outstanding. Fees charged and costs capitalized for originating loans are being amortized substantially on the interest method over the term of the loan. A loan is placed on nonaccrual (i.e., interest income is no longer accrued) when it is specifically determined to be impaired or when principal or interest is delinquent for 90 days or more, unless the loan is well secured and in the process of collection. Any unpaid interest previously accrued on those loans is reversed from income. Interest payments received on nonaccrual loans are applied as a reduction of the loan principal balance unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured. A loan is considered impaired if it is probable that the Company will not collect all principal and interest payments according to the loan’s contractual terms. An impaired loan may show deficiencies in the borrower’s overall financial condition, payment history, support available from financial guarantors and/or the fair market value of collateral. The impairment of a loan is measured at the present value of expected future cash flows using the loan’s effective interest rate, or at the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. Generally, the Company measures impairment on such loans by reference to the fair value of the collateral. Once the amount of impairment has been determined, the uncollectible portion is charged off. Income on impaired loans is recognized on a cash basis, and payments are first applied against the principal balance outstanding (i.e., placing impaired loans on nonaccrual status). Generally, interest income is not recognized on impaired loans unless the likelihood of further loss is remote. The allowance for credit losses may include specific reserves related to impaired loans. Specific reserves remain until charge offs are made. Impaired loans do not include groups of smaller balance homogeneous loans such as residential mortgage and consumer installment loans that are evaluated collectively for impairment. Reserves for probable credit losses related to these loans are based on historical loss ratios and are included in the formula portion of the allowance for credit losses. See additional discussion below under the section, “Allowance for Credit Losses”. A loan is considered a troubled debt restructuring (“TDR”) if a borrower is experiencing financial difficulties and a creditor has granted a concession. Concessions may include interest rate reductions or below market interest rates, principal forgiveness, restructuring amortization schedules and other actions intended to minimize potential losses. Loans are identified to be restructured when signs of impairment arise such as borrower interest rate reduction request, slowness to pay, or when an inability to repay becomes evident. The terms being offered are evaluated to determine if they are more liberal than those that would be indicated by policy or industry standards for similar, untroubled credits. In those situations where the terms or the interest rates are considered to be more favorable than industry standards or the current underwriting guidelines of the Company’s banking subsidiary, the loan is classified as a TDR. All loans designated as TDRs are considered impaired loans and may be on either accrual or nonaccrual status. In instances where the loan has been placed on nonaccrual status, six consecutive months of timely payments are required prior to returning the loan to accrual status. All loans classified as TDRs which are restructured and accrue interest under revised terms require a full and comprehensive review of the borrower’s financial condition, capacity for repayment, realistic assessment of collateral values, and the assessment of risk entered into any workout agreement. Current financial information on the borrower, guarantor, and underlying collateral is analyzed to determine if it supports the ultimate collection of principal and interest. For commercial loans, the cash flows are analyzed, both for the underlying project and globally. For consumer loans, updated salary, credit history and cash flow information is obtained. Current market conditions are also considered. Following a full analysis, the determination of the appropriate loan structure is made. The Company does not participate in any specific government or Company sponsored loan modification programs. All TDR loan agreements are contracts negotiated with each of the borrowers. |
Allowance for Credit Losses | Allowance for Credit Losses The allowance for credit losses is maintained at a level believed adequate by management to absorb losses inherent in the loan portfolio as of the balance sheet date and is based on the size and current risk characteristics of the loan portfolio, an assessment of individual problem loans and actual loss experience, current economic events in specific industries and geographical areas, including unemployment levels, and other pertinent factors, including regulatory guidance and general economic conditions and other observable data. Determination of the allowance is inherently subjective as it requires significant estimates, including the amounts and timing of expected future cash flows or collateral value of impaired loans, estimated losses on pools of homogeneous loans that are based on historical loss experience, and consideration of current economic trends, all of which may be susceptible to significant change. Loans, or portions thereof, that are considered uncollectible are charged off against the allowance, while recoveries of amounts previously charged off are credited to the allowance. The criteria for charge offs are addressed in the Banks’ Collection and Workout Policy. Per the policy, the recognition of the loss of loans or portions of loans will occur when there is a reasonable probability of loss. When the amount of loss can be readily calculated, the loss will be recognized. In cases where an amount cannot be calculated, specific reserves will be maintained. A provision for credit losses is charged to operations based on management’s periodic evaluation of the factors previously mentioned, as well as other pertinent factors. Evaluations are conducted at least quarterly and more often if deemed necessary. The allowance for credit losses is an estimate of the losses that may be sustained in the loan portfolio. The allowance is based on two basic principles of accounting: (i) Accounting Standards Codification (“ASC”) Topic 450, “Contingencies”, which requires that losses be accrued when they are probable of occurring and estimable; and (ii) ASC Topic 310, “Receivables,” which requires that losses be accrued based on the differences between the loan balance and the value of collateral, present value of future cash flows or values that are observable in the secondary market. Management uses many factors to estimate the inherent loss that may be present in our loan portfolio, including economic conditions and trends, the value and adequacy of collateral, the volume and mix of the loan portfolio, and our internal loan processes. Actual losses could differ significantly from management’s estimates. In addition, GAAP itself may change from one previously acceptable method to another. Although the economics of transactions would be the same, the timing of events that would impact the transactions could change. Three basic components comprise our allowance for credit losses: (i) the specific allowance; (ii) the formula allowance; and (iii) the unallocated allowance. Each component is determined based on estimates that can and do change when the actual events occur. The specific allowance is established against impaired loans (i.e., nonaccrual loans and troubled debt restructurings (“TDRs”)) based on our assessment of the losses that may be associated with the individual loans. The specific allowance remains until charge-offs are made. An impaired loan may show deficiencies in the borrower’s overall financial condition, payment history, support available from financial guarantors and/or the fair market value of collateral. The formula allowance is used to estimate the loss on internally risk-rated loans, exclusive of those identified as impaired. Loans are grouped by type (construction, residential real estate, commercial real estate, commercial or consumer). Each loan type is assigned allowance factors based on management’s estimate of the risk, complexity and size of individual loans within a particular category. Loans that are identified as special mention, substandard and doubtful are adversely rated. These loans are assigned higher allowance factors than favorably rated loans due to management’s concerns regarding collectability or management’s knowledge of particular elements regarding the borrower. A special mention loan has potential weaknesses that could result in a future loss to the Company if the weaknesses are realized. A substandard loan has certain deficiencies that could result in a future loss to the Company if these deficiencies are not corrected. A doubtful loan has enough risk that there is a high probability that the Company will sustain a loss. Management has significant discretion in making the adjustments inherent in the determination of the provision and allowance for credit losses, including in connection with the valuation of collateral, the estimation of a borrower’s prospects of repayment, and the establishment of the allowance factors in the formula allowance and unallocated allowance components of the allowance. The establishment of allowance factors is a continuing exercise, based on management’s ongoing assessment of the totality of all factors, including, but not limited to, delinquencies, loss history, trends in volume and terms of loans, effects of changes in lending policy, the experience and depth of management, national and local economic trends, concentrations of credit, the quality of the loan review system and the effect of external factors such as competition and regulatory requirements, and their impact on the portfolio. Allowance factors may change from period to period, resulting in an increase or decrease in the amount of the provision or allowance, based on the same volume and classification of loans. Changes in allowance factors will have a direct impact on the amount of the provision, and a corresponding effect on net income. Errors in management’s perception and assessment of these factors and their impact on the portfolio could result in the allowance not being adequate to cover losses in the portfolio, and may result in additional provisions or charge-offs. |
Premises and Equipment | Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets. Useful lives range from three to 10 years for furniture, fixtures and equipment; three to five years for computer hardware and data handling equipment; and 10 to 40 years for buildings and building improvements. Land improvements are amortized over a period of 15 years and leasehold improvements are amortized over the term of the respective lease. Sale-leaseback transactions are considered normal leasebacks and any realized gains are deferred and amortized to other income on a straight-line basis over the initial lease term. Maintenance and repairs are charged to expense as incurred, while improvements which extend the useful life of an asset are capitalized and depreciated over the estimated remaining life of the asset. Long-lived assets are evaluated periodically for impairment when events or changes in circumstances indicate the carrying amount may not be recoverable. Impairment exists when the expected undiscounted future cash flows of a long-lived asset are less than its carrying value. In that event, the Company recognizes a loss for the difference between the carrying amount and the estimated fair value of the asset. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Other intangible assets represent purchased assets that also lack physical substance but can be distinguished from goodwill because of contractual or other legal rights or because the asset is capable of being sold or exchanged either on its own or in combination with a related contract, asset or liability. Goodwill and other intangible assets are required to be recorded at fair value. Determining fair value is subjective, requiring the use of estimates, assumptions and management judgment. Goodwill and other intangible assets with indefinite lives are tested at least annually for impairment, usually during the third quarter, or on an interim basis if circumstances dictate. Intangible assets that have finite lives are amortized over their estimated useful lives and also are subject to impairment testing. Impairment testing requires that the fair value of each of the Company’s reporting units be compared to the carrying amount of its net assets, including goodwill. The Company’s reporting units were identified based on an analysis of each of its individual operating segments (i.e., the Bank and Insurance Subsidiaries). If the fair value of a reporting unit is less than book value, an expense may be required to write down the related goodwill or purchased intangibles to record an impairment loss. During the third quarter of 2016 and 2015 , goodwill and other intangible assets were subjected to the annual assessment for impairment. As a result of the assessment, it was determined that it was not more likely than not that the fair values of the Company’s reporting units were less than their carrying amounts so no impairment was recorded. |
Other Real Estate Owned | Other Real Estate Owned Other real estate owned represents assets acquired in satisfaction of loans either by foreclosure or deeds taken in lieu of foreclosure. Properties acquired are recorded at fair value less estimated selling costs at the time of acquisition, establishing a new cost basis. Thereafter, costs incurred to operate or carry the properties as well as reductions in value as determined by periodic appraisals are charged to operating expense. Gains and losses resulting from the final disposition of the properties are included in noninterest income. |
Short-Term Borrowings | Short-Term Borrowings Short-term borrowings are comprised primarily of repurchase agreements. The repurchase agreements are securities sold to the Company’s customers, at the customers’ request, under a continuing “roll-over” contract that matures in one business day. The underlying securities sold are U.S. Government agency securities, which are segregated from the Company’s other investment securities by its safekeeping agents. |
Income Taxes | Income Taxes The Company and its subsidiaries file a consolidated federal income tax return. The Company accounts for income taxes using the liability method in accordance with required accounting guidance. Under this method, deferred tax assets and liabilities are determined by applying the applicable federal and state income tax rates to cumulative temporary differences. These temporary differences represent differences between financial statement carrying amounts and the corresponding tax bases of certain assets and liabilities. Deferred taxes result from such temporary differences. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. A valuation allowance, if needed, reduces deferred tax assets to the expected amount most likely to be realized. Realization of deferred tax assets is dependent on the generation of a sufficient level of future taxable income, recoverable taxes paid in prior years and tax planning strategies. The Company evaluates all positive and negative evidence before determining if a valuation allowance is deemed necessary regarding the realization of deferred tax assets. The Company recognizes accrued interest and penalties as a component of tax expense. The Company does not have any uncertain tax positions and did not recognize any adjustments for unrecognized tax benefits. The Company remains subject to examination for tax years ending on or after December 31, 2013. |
Basic and Diluted Earnings Per Common Share | Basic and Diluted Earnings Per Common Share Basic earnings per share is calculated by dividing net income available to common stockholders by the weighted-average number of common shares outstanding and does not include the effect of any potentially dilutive common stock equivalents. Diluted earnings per share is calculated by dividing net income by the weighted-average number of shares outstanding, adjusted for the effect of any potentially dilutive common stock equivalents. |
Transfers of Financial Assets | Transfers of Financial Assets Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (i) the assets have been isolated from the Company, (ii) 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 (iii) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and due from banks, interest-bearing deposits with other banks and federal funds sold are considered “cash and cash equivalents” for financial reporting purposes. Interest-bearing deposits with banks generally exceed balances that are recoverable under Federal Deposit Insurance Corporation (“FDIC”) insurance. |
Stock-Based Compensation | Stock-Based Compensation Accounting guidance for stock-based compensation requires that expense relating to such transactions be recognized as compensation cost in the income statement. Stock-based compensation expense is measured at the grant date based on the fair value of the award and is recognized on a straight-line basis over the vesting period. See Note 12 for a further discussion. |
Fair Value | Fair Value The Company measures certain financial assets and liabilities at fair value, with the measurements made on a recurring or nonrecurring basis. Significant financial instruments measured at fair value on a recurring basis are investment securities. Impaired loans and other real estate owned are significant financial instruments measured at fair value on a nonrecurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In determining fair value, the Company is required to maximize the use of observable inputs and minimize the use of unobservable inputs, reducing subjectivity. See Note 20 for a further discussion of fair value. |
Advertising Costs | Advertising Costs Advertising costs are generally expensed as incurred. The Company incurred advertising costs of approximately $528 thousand, $495 thousand and $428 thousand for the years ended December 31, 2016 , 2015 , and 2014 , respectively. |
Recent Accounting Standards | Recent Accounting Standards ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” amendment requires entities to recognize revenue to depict the transfer of promised goods or services to customers in amounts that reflect the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for periods beginning after December 16, 2016. ASU 2015-14, “ Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date ” – ASU 2015-14 amendments defer the effective date of Update 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations” – ASU 2016-08 amendments are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” – ASU 2016-10 amendments clarify that contractual provisions that, explicitly or implicitly, require an entity to transfer control of additional goods or services to a customer should be distinguished from contractual provisions that, explicitly or implicitly, define the attributes of a single promised license. Attributes of a promised license define the scope of a customer’s right to use or right to access an entity’s intellectual property and, therefore, do not define whether the entity satisfies its performance obligation at a point in time or over time and do not create an obligation for the entity to transfer any additional rights to use or access its intellectual property. ASU 2014-09 will be effective for The Company on January 1, 2018 and The Company is currently in the process of evaluating the impact of the adoption of this update will have on the consolidated financial statements. The Company preliminarily believes the adoption of this update will not have a material impact on the consolidated financial statements, as a majority of the Company’s revenue generating transactions are not included in the scope of this update. ASU No. 2014-12, "Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period." The amendments in the ASU require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation - Stock Compensation , as it relates to awards with performance conditions that affect vesting to account for such awards. The performance target should not be reflected in estimating the grant-date fair value of the award. However, compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. The amendments in this ASU are effective for interim or annual reporting periods beginning after December 15, 2015; early adoption is permitted. Entities may apply the amendments in this ASU either: (1) prospectively to all awards granted or modified after the effective date; or (2) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. As of December 31, 2016, the Company has share-based payment awards that included performance targets that could be achieved after the requisite service period. The adoption of ASU No. 2014-12 did not have a material impact on the Company's Consolidated Financial Statements. ASU No. 2015-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” This ASU provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new guidance does not change the accounting for a customer’s accounting for service contracts. ASU No. 2015-05 is effective for interim and annual reporting periods beginning after December 15, 2015. The adoption of ASU No. 2015-05 did not have a material impact on the Company's Consolidated Financial Statements. ASU No. 2015-16 – In September 2015, FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. Under current GAAP, the acquirer is required to retrospectively adjust the provisional amounts recognized at the acquisition date with a corresponding adjustment to goodwill and is also required to revise comparative information for prior periods presented in the financial statements. The amendments in this ASU, require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in this Update also require that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as the result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. An entity is required to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustments to the provisional amounts had been recognized as of the acquisition date. We adopted the amendments in this ASU effective January 1, 2016. The adoption of ASU No. 2015-16 did not have a material impact on our consolidated financial statements. ASU No. 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This ASU, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (v) 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 for financial instruments, (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and (vii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. ASU 2016-01 will be effective for us on January 1, 2018 and is not expected to have a significant impact on our financial statements. ASU No. 2016-02, “Leases (Topic 842).” This ASU stipulates that a lessee should recognize the assets and liabilities that arise from leases. All leases create an asset and a liability for the lessee in accordance with FASB Concepts Statement No. 6, Elements of Financial Statement , and, therefore, recognition of those lease assets and lease liabilities represents an improvement over previous GAAP, which did not require lease assets and lease liabilities to be recognized for most leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. When measuring assets and liabilities arising from a lease, a lessee (and a lessor) should include payments to be made in optional periods only if the lessee is reasonably certain to exercise an option to extend the lease or not to exercise an option to terminate the lease. Similarly, optional payments to purchase the underlying asset should be included in the measurement of lease assets and lease liabilities only if the lessee is reasonably certain to exercise that purchase option. In addition, also consistent with the previous leases guidance, a lessee (and a lessor) should exclude most variable lease payments in measuring lease assets and lease liabilities, other than those that depend on an index or a rate or are in substance fixed payments. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company expects to elect the package of practical expedients that allows it to not reassess whether any expire or existing contracts represent leases, the lease classification of any expired or existing lease and initial direct costs for any existing or expired leases. The Company expects this standard will have a material impact on its financial statements through gross-up of the balance sheet for lease assets and liabilities. However, no material change to lease expense recognition is expected. ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This ASU simplifies the treatment and accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any entity in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. ASU 2016-09 will be effective for us on January 1, 2017 and t he Company is currently in the process of evaluating the impact the adoption of this update will have on the consolidated financial statements. The Company preliminarily believes the adoption of this update will result in a marginal amount of volatility within income tax expense, depending on the amount and timing of share-based compensation award activity such as; the vesting of restricted stock awards and restricted stock units, as well as the exercise of stock options. ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendments in this ASU will replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect loans, debt securities, trade receivables, net investments in leases, off-balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments broaden the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. The use of forecasted information incorporates more timely information in the estimate of expected credit losses, which will be more decision useful to users of the financial statements. It is not expected that an entity will need to create an economic forecast over the entire contractual life of long-dated financial assets. Therefore, the amendments will allow an entity to revert to historical loss information that is reflective of the contractual term (considering the effect of prepayments) for periods that are beyond the time frame for which the entity is able to develop reasonable and supportable forecasts. The amendments retain many of the disclosure amendments in Accounting Standards Update No. 2010-20, Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses, updated to reflect the change from an incurred loss methodology to an expected credit loss methodology. Credit losses on available-for-sale debt securities should be measured in a manner similar to current GAAP. However, the amendments require that credit losses be presented as an allowance rather than a write-down. For public entities that are U.S. Securities and Exchange Commission (SEC) filers, the amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All entities may adopt the amendments earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company believes this ASU will have a significant impact on our consolidated financial statements and the method in which we calculate our credit losses, primarily on loans and available-for sale securities. At this time, the Company will continue to evaluate the impact and implementation of this standard to meet the effective date for consolidated financial statements beginning in 2019. ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments." Current GAAP is unclear or does not include specific guidance on how to classify certain transactions in the statement of cash flows. This ASU is intended to reduce diversity in practice in how eight particular transactions are classified in the statement of cash flows. ASU No. 2016-15 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted, provided that all of the amendments are adopted in the same period. Entities will be required to apply the guidance retrospectively. If it is impracticable to apply the guidance retrospectively for an issue, the amendments related to that issue would be applied prospectively. As this guidance only affects the classification within the statement of cash flows, ASU No. 2016-15 is not expected to have a material impact on the Company's consolidated financial statements ASU No. 2017-01 – In January 2017, FASB issued ASU No. 2017-01, Business Combinations (Topic 805)” Clarifying the Definition of a Business. The ASU clarifies the definition of a business to assist with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The guidance is not expected to have a significant impact on the Company’s financial positions, results of operations or disclosures. ASU No. 2017-03 – In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments – Equity Method and Joint Ventures (Topic 323): Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings. The ASU adds an SEC paragraph to ASUs 2014-09, 2016-02, and 2016-13 which specifies the SEC staff view that a registrant should evaluate ASUs that have not yet been adopted to determine the appropriate disclosure about the potential material effects of those ASUs on the financial statements when adopted. The guidance also specifies the SEC staff view on financial statement disclosures when the company does not know or cannot reasonably estimate the impact that adoption of the ASUs will have on the financial statements. The ASU also conforms SEC guidance on accounting for tax benefits resulting from investments in affordable housing projects to the guidance in ASU 2014-01, Investments – Equity Method and Joint Ventures (Topic 323). The amendments in this update are effective upon issuance. The guidance did not have a significant impact on our consolidated financial statements. ASU No. 2017-04 – In January 2017, FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The ASU simplifies measurement of goodwill and eliminates Step 2 from the goodwill impairment test. The Company should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The impairment charge is limited to the amount of goodwill allocated to that reporting unit. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for goodwill impairment tests performed on testing dates after January 1, 2017. The guidance is not expected to have a significant impact on the Company’s financial positions, results of operations or disclosures . |
INVESTMENT SECURITIES (Table)
INVESTMENT SECURITIES (Table) | 12 Months Ended |
Dec. 31, 2016 | |
INVESTMENT SECURITIES [Abstract] | |
Schedule of Available-for-Sale and Held-to-Maturity Securities Reconciliation | The following table provides information on the amortized cost and estimated fair values of investment securities. Gross Gross Estimated Amortized Unrealized Unrealized Fair (Dollars in thousands) Cost Gains Losses Value Available-for-sale securities: December 31, 2016 U.S. Treasury $ - $ - $ - $ - U.S. Government agencies 34,320 56 162 34,214 Mortgage-backed 130,490 263 1,809 128,944 Equity 652 - 12 640 Total $ 165,462 $ 319 $ 1,983 $ 163,798 December 31, 2015 U.S. Treasury $ 5,078 $ 1 $ - $ 5,079 U.S. Government agencies 49,630 89 190 49,529 Mortgage-backed 156,939 639 662 156,916 Equity 637 4 - 641 Total $ 212,284 $ 733 $ 852 $ 212,165 Held-to-maturity securities: December 31, 2016 U.S. Government agencies $ 2,193 $ - $ 78 $ 2,115 States and political subdivisions 1,615 76 - 1,691 Other Equity Securities (1) 3,000 - - 3,000 Total $ 6,808 $ 76 $ 78 $ 6,806 December 31, 2015 U.S. Government agencies $ 2,575 $ - $ 60 $ 2,515 States and political subdivisions 1,616 112 - 1,728 Total $ 4,191 $ 112 $ 60 $ 4,243 On December 15, 2016 the Company bought $3.0 million in subordinated notes from a local regional bank which it intends to hold to maturity of December 30, 2026. |
Available-For-Sale Securities and Held-to-Maturity, Continuous Unrealized Loss Position, Fair Value | The following table provides information about gross unrealized losses and fair value by length of time that the individual securities have been in a continuous unrealized loss position at December 31, 2016 . Less than More than 12 Months 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) Value Losses Value Losses Value Losses December 31, 2016 Available-for-sale securities: U.S. Government agencies $ 11,926 $ 58 $ - $ 104 $ 11,926 $ 162 Mortgage-backed 100,237 1,546 9,208 263 109,445 1,809 Equity securities 640 12 - - 640 12 Total $ 112,803 $ 1,616 $ 9,208 $ 367 $ 122,011 $ 1,983 Held-to-maturity securities: U.S. Government agencies $ 2,115 $ 78 $ - $ - $ 2,115 $ 78 Less than More than 12 Months 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) Value Losses Value Losses Value Losses December 31, 2015 Available-for-sale securities: U.S. Government agencies $ 18,981 $ 57 $ - $ 133 $ 18,981 $ 190 Mortgage-backed 43,881 328 21,263 334 65,144 662 Equity securities - - - - - - Total $ 62,862 $ 385 $ 21,263 $ 467 $ 84,125 $ 852 Held-to-maturity securities: U.S. Government agencies $ - $ - $ 2,515 $ 60 $ 2,515 $ 60 |
Schedule of Securities Debt Maturities | The following table provides information on the amortized cost and estimated fair values of investment securities by maturity date at December 31, 2016 . Available for sale Held to maturity Amortized Estimated Amortized Estimated (Dollars in thousands) Cost Fair Value Cost Fair Value Due in one year or less $ 15,018 $ 15,027 $ 210 $ 210 Due after one year through five years 16,983 16,948 501 531 Due after five years through ten years 12,889 12,736 904 950 Due after ten years 119,920 118,447 2,193 2,115 164,810 163,158 3,808 3,806 Equity securities 652 640 3,000 3,000 Total $ 165,462 $ 163,798 $ 6,808 $ 6,806 |
Amortized Cost and Estimated Fair Values of Securities | The following table sets forth the amortized cost and estimated fair values of securities which have been pledged as collateral for obligations to federal, state and local government agencies, and other purposes as required or permitted by law, or sold under agreements to repurchase. All pledged securities are in the available-for-sale investment portfolio. December 31, 2016 December 31, 2015 Amortized Estimated Amortized Estimated (Dollars in thousands) Cost Fair Value Cost Fair Value Pledged available-for-sale securities $ 140,042 $ 138,875 $ 121,142 $ 121,207 |
LOANS AND ALLOWANCE FOR CREDI37
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Table) | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Schedule of Financing Receivables | The following table provides information about the principal classes of the loan portfolio at December 31, 2016 and 2015 . (Dollars in thousands) 2016 2015 Construction $ 84,002 $ 85,632 Residential real estate 325,768 307,063 Commercial real estate 382,681 330,253 Commercial 72,435 64,911 Consumer 6,639 7,255 Total loans 871,525 795,114 Allowance for credit losses (8,726) (8,316) Total loans, net $ 862,799 $ 786,798 |
Allowance for Credit Losses on Financing Receivables | The following tables include impairment information relating to loans and the allowance for credit losses as of December 31, 2016 and 2015. Residential Commercial (Dollars in thousands) Construction real estate real estate Commercial Consumer Unallocated Total December 31, 2016 Loans individually evaluated for impairment $ 8,007 $ 7,778 $ 6,088 $ - $ 99 $ - $ 21,972 Loans collectively evaluated for impairment 75,995 317,990 376,593 72,435 6,540 - 849,553 Total loans $ 84,002 $ 325,768 $ 382,681 $ 72,435 $ 6,639 $ - $ 871,525 Allowance for credit losses allocated to: Loans individually evaluated for impairment $ 1,639 $ 317 $ 185 $ - $ - $ - $ 2,141 Loans collectively evaluated for impairment 1,148 1,636 2,425 1,145 231 - 6,585 Total loans $ 2,787 $ 1,953 $ 2,610 $ 1,145 $ 231 $ - $ 8,726 During 2016, due to the consolidation of Talbot and CNB, the processes and assumptions affecting the allowance methodology were re-evaluated for a more unified representation of the new consolidated bank. This re-evaluation resulted in a net change in the unallocated portion of the allowance of $776 thousand. Residential Commercial (Dollars in thousands) Construction real estate real estate Commercial Consumer Unallocated Total December 31, 2015 Loans individually evaluated for impairment $ 11,598 $ 7,945 $ 7,762 $ 161 $ 122 $ - $ 27,588 Loans collectively evaluated for impairment 74,034 299,118 322,491 64,750 7,133 - 767,526 Total loans $ 85,632 $ 307,063 $ 330,253 $ 64,911 $ 7,255 $ - $ 795,114 Allowance for credit losses allocated to: Loans individually evaluated for impairment $ 619 $ 435 $ 340 $ - $ 7 $ - $ 1,401 Loans collectively evaluated for impairment 1,027 1,746 2,659 558 149 776 6,915 Total loans $ 1,646 $ 2,181 $ 2,999 $ 558 $ 156 $ 776 $ 8,316 The following tables provide a summary of the activity in the allowance for credit losses allocated by loan class for 2016 and 2015. Allocation of a portion of the allowance to one loan class does not preclude its availability to absorb losses in other loan classes. Residential Commercial (Dollars in thousands) Construction real estate real estate Commercial Consumer Unallocated Total 2016 Allowance for credit losses: Beginning Balance $ 1,646 $ 2,181 $ 2,999 $ 558 $ 156 $ 776 $ 8,316 Charge-offs (615) (580) (503) (497) (45) - (2,240) Recoveries 35 298 25 428 16 - 802 Net charge-offs (580) (282) (478) (69) (29) - (1,438) Provision 1,721 54 89 656 104 (776) 1,848 Ending Balance $ 2,787 $ 1,953 $ 2,610 $ 1,145 $ 231 $ - $ 8,726 Residential Commercial (Dollars in thousands) Construction real estate real estate Commercial Consumer Unallocated Total 2015 Allowance for credit losses: Beginning Balance $ 1,303 $ 2,834 $ 2,379 $ 448 $ 229 $ 502 $ 7,695 Charge-offs (1,058) (283) (920) (396) (67) - (2,724) Recoveries 125 398 379 319 49 - 1,270 Net charge-offs (933) 115 (541) (77) (18) - (1,454) Provision 1,276 (768) 1,161 187 (55) 274 2,075 Ending Balance $ 1,646 $ 2,181 $ 2,999 $ 558 $ 156 $ 776 $ 8,316 |
Impaired Financing Receivables | The following tables provide information on impaired loans and any related allowance by loan class as of December 31, 2016 and 2015 . The difference between the unpaid principal balance and the recorded investment is the amount of partial charge-offs that have been taken. Recorded Recorded Unpaid investment investment Average Interest principal with no with an Related recorded income (Dollars in thousands) balance allowance allowance allowance investment recognized December 31, 2016 Impaired nonaccrual loans: Construction $ 7,247 $ - $ 3,818 $ 1,621 $ 5,707 $ - Residential real estate 4,013 1,957 1,946 166 3,500 - Commercial real estate 1,801 959 193 117 2,144 - Commercial - - - - 108 - Consumer 99 99 - - 106 - Total $ 13,160 $ 3,015 $ 5,957 $ 1,904 $ 11,565 $ - Impaired accruing TDRs: Construction $ 4,189 $ 3,479 $ 710 $ 18 $ 4,172 $ 96 Residential real estate 3,875 2,829 1,046 151 4,663 195 Commercial real estate 4,936 1,573 3,363 68 5,090 174 Commercial - - - - - - Consumer - - - - - - Total $ 13,000 $ 7,881 $ 5,119 $ 237 $ 13,925 $ 465 Total impaired loans: Construction $ 11,436 $ 3,479 $ 4,528 $ 1,639 $ 9,879 $ 96 Residential real estate 7,888 4,786 2,992 317 8,163 195 Commercial real estate 6,737 2,532 3,556 185 7,234 174 Commercial - - - - 108 - Consumer 99 99 - - 106 - Total $ 26,160 $ 10,896 $ 11,076 $ 2,141 $ 25,490 $ 465 Recorded Recorded Unpaid investment investment Average Interest principal with no with an Related recorded income (Dollars in thousands) balance allowance allowance allowance investment recognized December 31, 2015 Impaired nonaccrual loans: Construction $ 11,850 $ 4,647 $ 2,882 $ 588 $ 8,176 $ - Residential real estate 2,563 1,773 487 208 2,767 - Commercial real estate 2,988 1,813 209 9 2,159 - Commercial 175 161 - - 126 - Consumer 128 98 23 7 122 - Total $ 17,704 $ 8,492 $ 3,601 $ 812 $ 13,350 $ - Impaired accruing TDRs: Construction $ 4,069 $ 3,266 $ 803 $ 31 $ 4,080 $ 84 Residential real estate 5,686 2,380 3,306 227 6,947 312 Commercial real estate 5,740 1,702 4,038 331 5,943 254 Commercial - - - - 27 1 Consumer - - - - - - Total $ 15,495 $ 7,348 $ 8,147 $ 589 $ 16,997 $ 651 Total impaired loans: Construction $ 15,919 $ 7,913 $ 3,685 $ 619 $ 12,256 $ 84 Residential real estate 8,249 4,153 3,793 435 9,714 312 Commercial real estate 8,728 3,515 4,247 340 8,102 254 Commercial 175 161 - - 153 1 Consumer 128 98 23 7 122 - Total $ 33,199 $ 15,840 $ 11,748 $ 1,401 $ 30,347 $ 651 |
Troubled Debt Restructurings on Financing Receivables | The following tables provide a roll-forward for troubled debt restructurings as of December 31, 2016 and December 31, 2015 . 1/1/2016 12/31/2016 TDR New Disbursements Charge Reclassifications/ TDR Related (Dollars in thousands) Balance TDRs (Payments) offs Transfer In/(Out) Payoffs Balance Allowance For the year ended December 31, 2016 Accruing TDRs Construction $ 4,069 $ - $ 120 $ - $ - $ - $ 4,189 $ 18 Residential real estate 5,686 565 (405) - (1,595) (376) 3,875 151 Commercial real estate 5,740 495 (724) (117) (458) - 4,936 68 Commercial - - - - - - - - Consumer - - - - - - - - Total $ 15,495 $ 1,060 $ (1,009) $ (117) $ (2,053) $ (376) $ 13,000 $ 237 Nonaccrual TDRs Construction $ 4,960 $ 2,570 $ (2,022) $ (590) $ (1,100) $ - $ 3,818 $ 1,621 Residential real estate 445 117 (531) (23) 1,595 - 1,603 156 Commercial real estate - - (117) (258) 458 - 83 - Commercial - - - - - - - - Consumer 23 - (23) - - - - - Total $ 5,428 $ 2,687 $ (2,693) $ (871) $ 953 $ - $ 5,504 $ 1,777 Total $ 20,923 $ 3,747 $ (3,702) $ (988) $ (1,100) $ (376) $ 18,504 $ 2,014 1/1/2015 12/31/15 TDR New Disbursements Charge Reclassifications/ TDR Related (Dollars in thousands) Balance TDRs (Payments) offs Transfer In/(Out) Payoffs Balance Allowance For the year ended December 31, 2015 Accruing TDRs Construction $ 4,022 $ - $ (95) $ - $ 142 $ - $ 4,069 $ 31 Residential real estate 6,368 1,837 (1,195) - (1,324) - 5,686 227 Commercial real estate 6,237 - (497) - - - 5,740 331 Commercial 47 - (6) - (41) - - - Consumer - - - - - - - - Total $ 16,674 $ 1,837 $ (1,793) $ - $ (1,223) $ - $ 15,495 $ 589 Nonaccrual TDRs Construction $ 3,321 $ - $ (214) $ (1,058) $ 2,911 $ - $ 4,960 $ 588 Residential real estate 3,382 - (26) - (2,911) - 445 141 Commercial real estate 346 - (4) (40) (302) - - - Commercial - - - - - - - - Consumer 25 - (2) - - - 23 7 Total $ 7,074 $ - $ (246) $ (1,098) $ (302) $ - $ 5,428 $ 736 Total $ 23,748 $ 1,837 $ (2,039) $ (1,098) $ (1,525) * $ - $ 20,923 $ 1,325 * $1.3 million in subsequently modified TDRs were transferred from accruing TDR classification to accrual status during the third quarter of 2015, thus removing the TDR designation. In accordance with ASC 310-40-50-2 “Creditor Disclosure of Troubled Debt Restructurings,” an impaired loan that has been subsequently restructured in a troubled debt restructuring involving modification of terms need not be included in the disclosures in years after the restructuring if both of the following conditions exist: a) the subsequent restructuring agreement specifies an interest rate equal to or greater than the rate that the creditor was willing to accept at the time of the restructuring for a new loan with comparable risk; and b) the loan is not impaired based on the terms specified by the restructuring agreement. During the period ended December 31, 2015, three loans totaling $1.3 million met the conditions stipulated in ASC 310-40-50-2, and after a careful evaluation of well supported documentation by management, these loans were upgraded to accrual status. The following tables provide information on loans that were modified and considered TDRs during 2016 and 2015 . Premodification Postmodification outstanding outstanding Number of recorded recorded Related (Dollars in thousands) contracts investment investment allowance TDRs: For the year ended December 31, 2016 Construction - $ - $ - $ - Residential real estate 3 667 688 - Commercial real estate 2 695 572 - Commercial - - - - Consumer - - - - Total 5 $ 1,362 $ 1,260 $ - For the year ended December 31, 2015 Construction - $ - $ - $ - Residential real estate 10 1,835 1,837 19 Commercial real estate 1 2,262 2,347 - Commercial - - - - Consumer - - - - Total 11 $ 4,097 $ 4,184 $ 19 |
Troubled Debt Restructurings That Defaulted On Financing Receivables | During the year ended December 31, 2016, there were five TDRs which were modified. The modifications to these TDRs consisted of reductions in principal, interest and rate as well as payment frequency for one of the TDRs. The following tables provide information on TDRs that defaulted during 2016 and 2015 . Generally, a loan is considered in default when principal or interest is past due 90 days or more. Number of Recorded Related (Dollars in thousands) contracts investment allowance TDRs that subsequently defaulted: For the year ended December 31, 2016 Construction 2 $ 589 $ - Residential real estate 1 23 - Commercial real estate 2 375 - Commercial - - - Consumer - - - Total 5 $ 987 $ - For the year ended December 31, 2015 Construction - $ - $ - Residential real estate - - - Commercial real estate 2 279 - Commercial - - - Consumer - - - Total 2 $ 279 $ - |
Financing Receivable Credit Quality Indicators | The following tables provide information on loan risk ratings as of December 31, 2016 and 2015 . Special (Dollars in thousands) Pass/Performing Mention Substandard Doubtful Total December 31, 2016 Construction $ 72,641 $ 4,195 $ 7,166 $ - $ 84,002 Residential real estate 312,242 6,646 6,880 - 325,768 Commercial real estate 363,461 10,939 8,281 - 382,681 Commercial 71,313 857 265 - 72,435 Consumer 6,540 - 99 - 6,639 Total $ 826,197 $ 22,637 $ 22,691 $ - $ 871,525 Special (Dollars in thousands) Pass/Performing Mention Substandard Doubtful Total December 31, 2015 Construction $ 70,214 $ 3,903 $ 11,515 $ - $ 85,632 Residential real estate 290,857 8,837 7,369 - 307,063 Commercial real estate 302,438 18,699 9,116 - 330,253 Commercial 63,628 1,075 208 - 64,911 Consumer 7,107 26 122 - 7,255 Total $ 734,244 $ 32,540 $ 28,330 $ - $ 795,114 |
Past Due Financing Receivables | The following tables provide information on the aging of the loan portfolio as of December 31, 2016 and 2015 . Accruing 30-59 days 60-89 days Greater than Total (Dollars in thousands) Current past due past due 90 days past due Nonaccrual Total December 31, 2016 Construction $ 80,079 $ - $ 105 $ - $ 105 $ 3,818 $ 84,002 Residential real estate 317,992 1,778 2,095 - 3,873 3,903 325,768 Commercial real estate 375,552 3,219 2,758 - 5,977 1,152 382,681 Commercial 72,272 19 134 10 163 - 72,435 Consumer 6,515 13 2 10 25 99 6,639 Total $ 852,410 $ 5,029 $ 5,094 $ 20 $ 10,143 $ 8,972 $ 871,525 Percent of total loans 97.8 % 0.6 % 0.6 % - % 1.2 % 1.0 % 100.0 % Accruing 30-59 days 60-89 days Greater than Total (Dollars in thousands) Current past due past due 90 days past due Nonaccrual Total December 31, 2015 Construction $ 78,082 $ 21 $ - $ - $ 21 $ 7,529 $ 85,632 Residential real estate 300,563 2,139 2,102 - 4,241 2,259 307,063 Commercial real estate 327,370 - 861 - 861 2,022 330,253 Commercial 64,670 49 31 - 80 161 64,911 Consumer 7,107 13 6 7 26 122 7,255 Total $ 777,792 $ 2,222 $ 3,000 $ 7 $ 5,229 $ 12,093 $ 795,114 Percent of total loans 97.8 % 0.3 % 0.4 % - % 0.7 % 1.5 % 100.0 % |
PREMISES AND EQUIPMENT (Table)
PREMISES AND EQUIPMENT (Table) | 12 Months Ended |
Dec. 31, 2016 | |
PREMISES AND EQUIPMENT [Abstract] | |
Schedule of Property Plant and Equipment | The following table provides information on premises and equipment at December 31, 2016 and 2015 . (Dollars in thousands) 2016 2015 Land $ 5,818 $ 5,818 Buildings and land improvements 16,296 15,982 Furniture and equipment 6,746 6,710 28,860 28,510 Accumulated depreciation (12,302) (11,646) Total $ 16,558 $ 16,864 |
Operating Leases of Lessee Disclosure | Future minimum annual rental payments are approximately as follows: (Dollars in thousands) 2017 $ 567 2018 434 2019 382 2020 250 2021 215 Thereafter 806 Total minimum lease payments $ 2,654 |
GOODWILL AND OTHER INTANGIBLE39
GOODWILL AND OTHER INTANGIBLE ASSETS (Table) | 12 Months Ended |
Dec. 31, 2016 | |
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | |
Schedule of Components of Goodwill and Other Acquired Intangible Assets | The following table provides information on the significant components of goodwill and other acquired intangible assets at December 31, 2016 and 2015 . The Community Banking segment had goodwill of $2.5 million at the end of both 2016 and 2015 . The Insurance segment had goodwill of $9.4 million at the end of 2016 and 2015 . See Note 27 for further information regarding the Company’s business segments. December 31, 2016 Weighted Gross Accumulated Net Average Carrying Impairment Accumulated Carrying Remaining Life (Dollars in thousands) Amount Charges Amortization Amount (in years) Goodwill $ 15,235 $ (2,637) $ (667) $ 11,931 - Other intangible assets Amortizable Employment agreements $ 440 $ - $ (440) $ - - Insurance expirations 1,270 - (1,233) 37 0.4 Customer relationships 795 (95) (438) 262 5.6 2,505 (95) (2,111) 299 Unamortizable Carrier relationships - - - - Trade name 780 - - 780 - 780 - - 780 Total other intangible assets $ 3,285 $ (95) $ (2,111) $ 1,079 December 31, 2015 Weighted Gross Accumulated Net Average Carrying Impairment Accumulated Carrying Remaining Life Amount Charges Amortization Amount (in years) Goodwill $ 15,235 $ (2,637) $ (667) $ 11,931 - Other intangible assets Amortizable Employment agreements $ 440 $ - $ (440) $ - - Insurance expirations 1,270 - (1,148) 122 1.4 Customer relationships 795 (95) (391) 309 6.4 2,505 (95) (1,979) 431 Unamortizable Carrier relationships - - - - - Trade name 780 - - 780 - 780 - - 780 Total other intangible assets $ 3,285 $ (95) $ (1,979) $ 1,211 |
Future Amortization Expense for Amortizable Other Intangible Assets | The following table provides information on current period and estimated future amortization expense for amortizable other intangible assets. Amortization (Dollars in thousands) Expense Estimate for years ended December 31, 2017 $ 84 2018 47 2019 47 2020 47 2021 44 |
OTHER ASSETS (Table)
OTHER ASSETS (Table) | 12 Months Ended |
Dec. 31, 2016 | |
OTHER ASSETS [Abstract] | |
Schedule of Other Assets | The Company had the following other assets at December 31, 2016 and 2015 . (Dollars in thousands) 2016 2015 Nonmarketable investment securities $ 1,650 $ 1,621 Accrued interest receivable 2,675 2,458 Deferred income taxes 7,039 12,132 Prepaid expenses 1,149 1,039 Cash surrender value on life insurance 2,589 2,521 Other assets 3,781 4,149 Total $ 18,883 $ 23,920 |
OTHER LIABILITIES (Table)
OTHER LIABILITIES (Table) | 12 Months Ended |
Dec. 31, 2016 | |
OTHER LIABILITIES [Abstract] | |
Schedule of Other Liabilities | The Company had the following other liabilities at December 31, 2016 and 2015 . (Dollars in thousands) 2016 2015 Accrued interest payable $ 74 $ 106 Other accounts payable 2,461 2,775 Deferred compensation liability 1,444 1,464 Other liabilities 1,301 1,695 Total $ 5,280 $ 6,040 |
DEPOSITS (Table)
DEPOSITS (Table) | 12 Months Ended |
Dec. 31, 2016 | |
DEPOSITS [Abstract] | |
Schedule of Deposits | The following table provides information on the approximate maturities of total time deposits at December 31, 2016 and 2015 . (Dollars in thousands) 2016 2015 Due in one year or less $ 154,328 $ 163,220 Due in one to three years 60,795 86,719 Due in three to five years 45,145 39,855 Total $ 260,268 $ 289,794 |
SHORT-TERM BORROWINGS (Table)
SHORT-TERM BORROWINGS (Table) | 12 Months Ended |
Dec. 31, 2016 | |
SHORT-TERM BORROWINGS [Abstract] | |
Schedule of Short-term Borrowings | The following table summarizes certain information on short-term borrowings for the years ended December 31, 2016 and 2015 . 2016 2015 (Dollars in thousands) Amount Rate Amount Rate Average for the Year Retail repurchase agreements $ 5,753 0.24 % $ 6,226 0.24 % At Year End Retail repurchase agreements $ 3,203 0.25 % $ 6,672 0.23 % |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Table) | 12 Months Ended |
Dec. 31, 2016 | |
Schedule of Stock-Based Compensation | The following tables provide information on stock-based compensation expense for 2016 , 2015 , and 2014 . (Dollars in thousands) 2016 2015 2014 Stock-based compensation expense $ 334 $ 283 $ 87 Excess tax benefits related to stock-based compensation 27 3 - December 31, (Dollars in thousands) 2016 2015 2014 Unrecognized stock-based compensation expense $ 337 $ 222 $ 59 Weighted average period unrecognized expense is expected to be recognized 0.9 years 1.5 years 0.8 years |
Schedule of Share-based Compensation, Stock Options Activity | The following table summarizes stock option activity for the Company under the 2016 Equity Plan for the three years ended December 31, 2016 . Year Ended December 31, 2016 Year Ended December 31, 2015 Year Ended December 31, 2014 Weighted Average Weighted Average Weighted Average Number of Grant Date Number of Grant Date Number of Grant Date Shares Fair Value Shares Fair Value Shares Fair Value Outstanding at beginning of period 61,327 $ 8.05 27,108 $ 6.64 40,662 $ 6.64 Granted 12,443 11.12 34,219 9.18 - - Exercised (11,684) 6.64 - - (3,593) 6.64 Expired/Cancelled - - - - (9,961) 6.64 Outstanding at end of period 62,086 $ 8.29 61,327 $ 8.05 27,108 $ 6.64 Exercisable at end of period 58,756 $ 8.14 44,218 $ 7.62 - $ - |
Schedule of Share-based Payment Award, Stock Option Valuation Assumptions | The following weighted average assumptions were used as inputs to the Black-Scholes valuation model for options granted in 2016 and 2015 . 2016 2015 Dividend yield 0.73 % - % Expected volatility 38.60 % 32.00 % Expected forfeiture rate - % - % Risk-free interest rate 1.75 % 1.97 % Expected contract life (in years) 10 years 7 years |
Equity Plan 2016 [Member] | |
Schedule of Share-based Compensation, Restricted Stock and Units Award Activity | The following table summarizes restricted stock award activity for the Company under the 2016 Equity Plan for the three years ended December 31, 2016 . Year Ended December 31, 2016 Year Ended December 31, 2015 Year Ended December 31, 2014 Weighted Average Weighted Average Weighted Average Number of Grant Date Number of Grant Date Number of Grant Date Shares Fair Value Shares Fair Value Shares Fair Value Nonvested at beginning of period 12,488 $ 8.74 14,251 $ 8.51 13,930 $ 8.33 Granted 27,366 11.51 12,647 9.21 3,654 9.57 Vested (22,788) 10.01 (14,410) 8.93 (3,333) 8.93 Cancelled - - - - - - Nonvested at end of period 17,066 $ 11.46 12,488 $ 8.74 14,251 $ 8.51 |
2016 and 2006 Plan [Member] | Restricted Stock Units (RSUs) [Member] | |
Schedule of Share-based Compensation, Restricted Stock and Units Award Activity | The following table summarizes restricted stock units activity for the Company under the 2016 and 2006 Equity Plans for the three years ended December 31, 2016. Year Ended December 31, 2016 Year Ended December 31, 2015 Year Ended December 31, 2014 Weighted Average Weighted Average Weighted Average Number of Grant Date Number of Grant Date Number of Grant Date Shares Fair Value Shares Fair Value Shares Fair Value Outstanding at beginning of period 26,943 $ 9.49 - $ - - $ - Granted 24,433 11.68 26,943 9.49 - - Vested - - - - - - Forfeited (5,034) 9.49 - - - - Outstanding at end of period 46,342 $ 10.64 26,943 $ 9.49 - $ - |
DEFERRED COMPENSATION (Table)
DEFERRED COMPENSATION (Table) | 12 Months Ended |
Dec. 31, 2016 | |
DEFERRED COMPENSATION [Abstract] | |
Schedule of Deferred Compensation Arrangement | The following table provides information on Shore Bancshares, Inc.’s contributions to the Plan for 2016 , 2015 , and 2014 and the related deferred compensation liability at December 31, 2016 and 2015 . (Dollars in thousands) 2016 2015 2014 Deferred compensation contribution $ - $ - $ - December 31, (Dollars in thousands) 2016 2015 Deferred compensation liability $ 496 $ 444 |
Schedule of Deferred Compensation Arrangement in Other Assets and Other Liabilities | The following table includes information on the cash surrender value and the accrued benefit obligation included in other assets and other liabilities at December 31, 2016 and 2015 . (Dollars in thousands) 2016 2015 Cash surrender value $ 3,552 $ 3,448 Accrued benefit obligation 1,444 1,020 |
OTHER EXPENSES (Table)
OTHER EXPENSES (Table) | 12 Months Ended |
Dec. 31, 2016 | |
OTHER EXPENSES [Abstract] | |
Schedule of Other Noninterest Expenses | The following table summarizes the Company’s other noninterest expenses for the years ended December 31: (Dollars in thousands) 2016 2015 2014 Advertising and marketing $ 528 $ 495 $ 428 Other customer expense 279 172 396 Other expense 2,096 2,168 2,070 Other loan expense 510 515 894 Software expense 895 697 664 Travel and entertainment expense 315 303 288 Trust professional fees 539 625 686 Total noninterest expense $ 5,162 $ 4,975 $ 5,426 |
INCOME TAXES (Table)
INCOME TAXES (Table) | 12 Months Ended |
Dec. 31, 2016 | |
INCOME TAXES [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The following table provides information on components of income tax expense for each of the three years ended December 31. (Dollars in thousands) 2016 2015 2014 Current tax expense (benefit): Federal $ 525 $ 247 $ - State 19 287 225 544 534 225 Deferred income tax expense (benefit): Federal 4,486 3,369 2,516 State 1,230 505 320 5,716 3,874 2,836 Total income tax expense (benefit) $ 6,261 $ 4,408 $ 3,061 |
Schedule of Effective Income Tax Rate Reconciliation | The following table provides a reconciliation of tax computed at th e statutory federal tax rate to the actual tax expense (benefit) for each of the three years ended December 31. (Dollars in thousands) 2016 2015 2014 Tax at federal statutory rate 35.0 % 34.0 % 34.0 % Tax effect of: Tax-exempt income (0.8) (0.4) (0.9) Other non-deductible expenses 0.3 0.2 0.3 State income taxes, net of federal benefit 5.1 4.5 4.4 Other (0.2) (0.1) (0.1) Actual income tax expense (benefit) rate 39.4 % 38.2 % 37.7 % |
Schedule of Deferred Tax Assets and Liabilities | The following table provides information on significant components of the Company’s deferred tax assets and liabilities as of December 31. (Dollars in thousands) 2016 2015 Deferred tax assets: Allowance for credit losses $ 3,486 $ 3,316 Reserve for off-balance sheet commitments 122 121 Net operating loss carry forward 2,232 9,069 Write-downs of other real estate owned 387 308 Deferred income 1,011 1,155 Unrealized gains on available-for-sale securities 672 48 Accrued expenses - 946 AMT Credits 869 - Other 1,192 191 Total deferred tax assets 9,971 15,154 Deferred tax liabilities: Depreciation 239 271 Amortization on loans FMV adjustment 156 140 Purchase accounting adjustments 2,019 1,988 Deferred capital gain on branch sale 401 411 Other 116 212 Total deferred tax liabilities 2,931 3,022 Net deferred tax assets $ 7,040 $ 12,132 |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
EARNINGS PER COMMON SHARE [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table provides information relating to the calculation of earnings/(loss) per common share. (In thousands, except per share data) 2016 2015 2014 Net income $ 9,638 $ 7,108 $ 5,051 Weighted average shares outstanding - basic 12,652 12,629 10,945 Dilutive effect of common stock equivalents 17 10 8 Weighted average shares outstanding - diluted 12,669 12,639 10,953 Income per common share - basic $ 0.76 $ 0.56 $ 0.46 Income per common share - diluted $ 0.76 $ 0.56 $ 0.46 |
REGULATORY CAPITAL REQUIREMEN49
REGULATORY CAPITAL REQUIREMENTS (Table) | 12 Months Ended |
Dec. 31, 2016 | |
REGULATORY CAPITAL REQUIREMENTS [Abstract] | |
Schedule of Capital Amounts And Ratios | The following tables present the capital amounts and ratios for Shore Bancshares, Inc. and Shore United Bank as of December 31, 2016 and Shore Bancshares, Inc., Talbot Bank and CNB as of December 31, 2015 . Common Total Net Tier 1 Total Equity/ Risk- Risk- Adjusted Common Risk-Based Risk-Based Tier 1 Tier 1 Based Weighted Average Equity Capital Capital Leverage December 31, 2016 Capital Capital Assets Total Assets Tier 1 ratio Ratio Ratio Ratio Company $ 140,897 $ 149,924 $ 893,116 $ 1,144,968 15.78 % 15.78 % 16.79 % 12.31 % Shore United Bank 122,543 131,570 885,206 1,126,136 13.84 % 13.84 % 14.86 % 10.88 % Common Total Net Tier 1 Total Equity/ Risk- Risk- Adjusted Common Risk-Based Risk-Based Tier 1 Tier 1 Based Weighted Average Equity Capital Capital Leverage December 31, 2015 Capital Capital Assets Total Assets Tier 1 ratio Ratio Ratio Ratio Company (1) $ 126,024 $ 134,643 $ 807,807 $ 1,116,692 15.60 % 15.60 % 16.67 % 11.29 % Talbot Bank (1) 59,692 64,405 448,634 613,945 13.31 % 13.31 % 14.36 % 9.72 % CNB 48,051 51,957 354,278 486,404 13.56 % 13.56 % 14.67 % 9.88 % (1) During 2016 an amended Call Report was filed for December 31, 2015. |
ACCUMULATED OTHER COMPREHENSI50
ACCUMULATED OTHER COMPREHENSIVE INCOME (Table) | 12 Months Ended |
Dec. 31, 2016 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table provides information on the changes in the components of accumulated other comprehensive income (loss) for 2016 and 2015 . Accumulated net unrealized holding Total accumulated gains (losses) on other available for sale comprehensive (Dollars in thousands) securities income(loss) Balance, December 31, 2015 $ (71) $ (71) Other comprehensive income (922) (922) Balance, December 31, 2016 $ (993) $ (993) Balance, December 31, 2014 $ 316 $ 316 Other comprehensive income (387) (387) Balance, December 31, 2015 $ (71) $ (71) |
Schedule of Reclassification out of Accumulated Other Comprehensive Income | The following table presents the amounts reclassified out of each component of accumulated comprehensive income (loss) for the years ended December 31, 2016 , 2015 , and 2014 . Details about Accumulated Other Amount Reclassified from Accumulated Comprehensive Income Components Other Comprehensive Income Affected Line Item in the Statement Where (dollars in thousands) (Loss) Net Income is Presented Year Ended December 31, 2016 2015 2014 Realized gain on sale of investment securities $ 18 $ - $ 14 Gain on sale of investment securities Total Reclassification for the Period $ 18 $ - $ 14 |
FAIR VALUE MEASUREMENTS (Table)
FAIR VALUE MEASUREMENTS (Table) | 12 Months Ended |
Dec. 31, 2016 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis | The tables below present the recorded amount of assets measured at fair value on a recurring basis at December 31, 2016 and 2015. No assets were transferred from one hierarchy level to another during 2016or 2015. Significant Other Significant Quoted Observable Unobservable Prices Inputs Inputs (Dollars in thousands) Fair Value (Level 1) (Level 2) (Level 3) December 31, 2016 Securities available for sale: U.S. Treasury $ - $ - $ - $ - U.S. Government agencies 34,214 - 34,214 - Mortgage-backed 128,944 - 128,944 - Equity 640 - 640 - Total $ 163,798 $ - $ 163,798 $ - Significant Other Significant Quoted Observable Unobservable Prices Inputs Inputs (Dollars in thousands) Fair Value (Level 1) (Level 2) (Level 3) December 31, 2015 Securities available for sale: U.S. Treasury $ 5,079 $ 5,079 $ - $ - U.S. Government agencies 49,529 - 49,529 - Mortgage-backed 156,916 - 156,916 - Equity 641 - 641 - Total $ 212,165 $ 5,079 $ 207,086 $ - |
Fair Value of Assets Measured on Nonrecurring Basis | The following tables sets forth the Company’s financial assets subject to fair value adjustments (impairment) on a nonrecurring basis at December 31, 2016 and 2015, that are valued at the lower of cost or market. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The assets in the following table were transferred during 2016 from Level 2 to Level 3, based on managements reassessment an evaluation of the inputs in relation to impaired loans and foreclosed assets. This reassessment resulted in management conclusion that the inputs for these assets were more reflective of Level 3 as unobservable inputs and applied retrospectively to prior periods reported. Significant Other Significant Quoted Observable Unobservable Prices Inputs Inputs (Dollars in thousands) Fair Value (Level 1) (Level 2) (Level 3) December 31, 2016 Impaired loans Construction $ 6,368 $ - $ - $ 6,368 Residential real estate 7,461 - - 7,461 Commercial real estate 5,903 - - 5,903 Commercial - - - - Consumer 99 - - 99 Total impaired loans 19,831 - - 19,831 Other real estate owned 2,477 - - 2,477 Total assets measured at fair value on a nonrecurring basis $ 22,308 $ - $ - $ 22,308 Significant Other Significant Quoted Observable Unobservable Prices Inputs Inputs (Dollars in thousands) Fair Value (Level 1) (Level 2) (Level 3) December 31, 2015 Impaired loans Construction $ 10,979 $ - $ - $ 10,979 Residential real estate 7,510 - - 7,510 Commercial real estate 7,422 - - 7,422 Commercial 161 - - 161 Consumer 115 - - 115 Total impaired loans 26,187 - - 26,187 Other real estate owned 4,252 - - 4,252 Total assets measured at fair value on a nonrecurring basis $ 30,439 $ - $ - $ 30,439 |
Schedule of Estimated Fair Values of Financial Assets and Liabilities | The following table provides information on the estimated fair values of the Company’s financial assets and liabilities that are reported in the balance sheets at their carrying amounts. The financial assets and liabilities have been segregated by their classification level in the fair value hierarchy. December 31, 2016 December 31, 2015 Estimated Estimated Carrying Fair Carrying Fair (Dollars in thousands) Amount Value Amount Value Financial assets Level 1 inputs Cash and cash equivalents $ 75,938 $ 75,938 $ 73,811 $ 73,811 Level 2 inputs Investment securities held to maturity $ 6,808 $ 6,806 $ 4,191 $ 4,243 Loans, net 862,799 867,594 786,798 788,187 Financial liabilities Level 2 inputs Deposits $ 997,489 $ 929,573 $ 975,464 $ 922,161 Short-term borrowings 3,203 3,203 6,672 6,672 |
FINANCIAL INSTRUMENTS WITH OF52
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (Table) | 12 Months Ended |
Dec. 31, 2016 | |
Financial Instruments With Off Balance Sheet Risk Disclosure [Abstract] | |
Schedule of Commitments Outstanding | The following table provides information on commitments outstanding as of December 31, 2016 and 2015 . (Dollars in thousands) December 31, 2016 December 31, 2015 Commitments to extend credit $ 178,233 $ 166,931 Letters of credit 8,024 7,087 Total $ 186,257 $ 174,018 |
PARENT COMPANY FINANCIAL INFO53
PARENT COMPANY FINANCIAL INFORMATION (Table) | 12 Months Ended |
Dec. 31, 2016 | |
PARENT COMPANY FINANCIAL INFORMATION [Abstract] | |
Condensed Balance Sheet, Parent Only | The following tables provide condensed financial information for Shore Bancshares, Inc. (Parent Company Only). Condensed Balance Sheets December 31, (Dollars in thousands) 2016 2015 Assets Cash $ 1,249 $ 1,899 Investment securities 11,846 12,246 Investment in subsidiaries 137,078 129,353 Premises and equipment, net 3,547 3,598 Other assets 3,160 2,419 Total assets $ 156,880 $ 149,515 Liabilities Accrued interest payable $ 1 $ 1 Other liabilities 1,737 1,204 Long-term debt 843 1,343 Total liabilities 2,581 2,548 Stockholders' equity Common stock 127 126 Additional paid in capital 64,201 63,815 Retained earnings 90,964 83,097 Accumulated other comprehensive (loss) (993) (71) Total stockholders' equity 154,299 146,967 Total liabilities and stockholders' equity $ 156,880 $ 149,515 |
Condensed Statement of Operations, Parent Only | Condensed Statement of Operations For the Years Ended December 31, (Dollars in thousands) 2016 2015 2014 Income Dividends from subsidiaries $ 1,230 $ 1,045 $ 200 Management and other fees from subsidiaries 8,960 8,723 7,933 Other income 278 228 110 Total income 10,468 9,996 8,243 Expenses Interest expense 46 61 80 Salaries and employee benefits 6,296 5,536 5,321 Occupancy and equipment expense 327 325 541 Other operating expenses 2,739 3,215 2,387 Total expenses 9,408 9,137 8,329 Income (loss) before income tax benefit and equity in undistributed net income (loss) of subsidiaries 1,060 859 (86) Income tax benefit (58) (65) (107) Income before equity in undistributed net income of subsidiaries 1,118 924 21 Equity in undistributed net income of subsidiaries 8,520 6,184 5,030 Net income $ 9,638 $ 7,108 $ 5,051 |
Condensed Cash Flow, Parent Only | Condensed Statements of Cash Flows For the Years Ended December 31, (Dollars in thousands) 2016 2015 2014 Cash flows from operating activities: Net income $ 9,638 $ 7,108 $ 5,051 Adjustments to reconcile net (income) loss to cash provided by operating activities: Equity in undistributed net (income) loss of subsidiaries (8,520) (6,184) (5,030) Depreciation and amortization 288 336 379 Stock-based compensation expense 334 283 87 Excess tax benefit from stock-based arrangements (27) (3) - Net (increase) in other assets (669) (1,108) (121) Net increase in other liabilities 533 328 271 Net cash provided by operating activities 1,577 760 637 Cash flows from investing activities: Proceeds from maturities and principal payments of investment securities available for sale 2,171 1,418 442 Purchases of securities (2,032) (4,054) (10,112) Purchases of premises and equipment (175) (672) (632) Cash received from merged subsidiary - 3,349 - Investment in subsidiaries - - (20,000) Net cash (used in) provided by investing activities (36) 41 (30,302) Cash flows from financing activities: Repayment of long-term debt (500) (500) (500) Excess tax benefit from stock-based arrangements 27 3 - Proceeds from issuance of common stock 53 - 31,279 Common stock dividends paid (1,771) (506) - Net cash (used in) provided by financing activities (2,191) (1,003) 30,779 Net (decrease) increase in cash and cash equivalents (650) (202) 1,114 Cash and cash equivalents at beginning of year 1,899 2,101 987 Cash and cash equivalents at end of year $ 1,249 $ 1,899 $ 2,101 |
QUARTERLY FINANCIAL RESULTS (Ta
QUARTERLY FINANCIAL RESULTS (Table) | 12 Months Ended |
Dec. 31, 2016 | |
QUARTERLY FINANCIAL RESULTS [Abstract] | |
Schedule of Quarterly Financial Results | The following table provides a summary of selected consolidated quarterly financial data for the three years ended December 31, 2016 . First Second Third Fourth (In thousands, except per share data) Quarter Quarter Quarter Quarter 2016 Interest income $ 9,908 $ 10,003 $ 10,236 $ 10,505 Net interest income 9,243 9,383 9,658 9,965 Provision for credit losses 450 375 605 418 Income before income taxes 3,995 3,684 3,843 4,377 Net income 2,460 2,272 2,411 2,495 Basic earnings per common share $ 0.19 $ 0.18 $ 0.19 $ 0.20 Diluted earnings per common share $ 0.19 $ 0.18 $ 0.19 $ 0.20 Dividends paid per common share $ 0.03 $ 0.03 0.03 $ 0.05 2015 Interest income $ 9,445 $ 9,542 $ 9,837 $ 10,047 Net interest income 8,539 8,683 9,010 9,293 Provision for credit losses 650 540 410 475 Income before income taxes 2,270 2,631 3,109 3,506 Net income 1,409 1,627 1,909 2,163 Basic earnings per common share $ 0.11 $ 0.13 $ 0.15 $ 0.17 Diluted earnings per common share $ 0.11 $ 0.13 $ 0.15 $ 0.17 Dividends paid per common share $ - $ - $ 0.02 $ 0.02 2014 Interest income $ 9,455 $ 9,523 $ 9,686 $ 9,625 Net interest income 8,323 8,447 8,636 8,636 Provision for credit losses 975 950 775 650 Income before income taxes 2,021 2,108 2,036 1,947 Net income 1,258 1,305 1,262 1,226 Basic earnings per common share $ 0.15 $ 0.13 $ 0.10 $ 0.10 Diluted earnings per common share $ 0.15 $ 0.13 $ 0.10 $ 0.10 Dividends paid per common share $ - $ - $ - $ - |
SEGMENT REPORTING (Table)
SEGMENT REPORTING (Table) | 12 Months Ended |
Dec. 31, 2016 | |
SEGMENT REPORTING [Abstract] | |
Schedule of Segment Reporting Information by Segment | Selected financial information by business segments is included in the following table. Community Insurance Products Parent Consolidated (Dollars in thousands) Banking and Services Company Total 2016 Interest Income $ 40,400 $ - $ 252 $ 40,652 Interest Expense (2,403) - - (2,403) Provision for credit losses (1,848) - - (1,848) Noninterest income 7,935 8,710 - 16,645 Noninterest expense (21,054) (6,890) (9,203) (37,147) Net intersegment (expense) income (8,020) (761) 8,781 - Income (loss) before taxes 15,010 1,059 (170) 15,899 Income tax (expense) benefit (5,887) (432) 58 (6,261) Net Income (loss) $ 9,123 $ 627 $ (112) $ 9,638 Total assets $ 1,132,863 $ 9,596 $ 17,814 $ 1,160,271 2015 Interest Income $ 38,652 $ - $ 219 $ 38,871 Interest Expense (3,346) - - (3,346) Provision for credit losses (2,075) - - (2,075) Noninterest income 7,135 8,297 (16) 15,416 Noninterest expense (21,480) (6,984) (8,886) (37,350) Net intersegment (expense) income (7,718) (781) 8,499 - Income (loss) before taxes 11,168 532 (184) 11,516 Income tax (expense) benefit (4,274) (204) 70 (4,408) Net Income (loss) $ 6,894 $ 328 $ (114) $ 7,108 Total assets $ 1,107,367 $ 9,984 $ 17,792 $ 1,135,143 2014 Interest Income $ 38,202 $ - $ 87 $ 38,289 Interest Expense (4,247) - - (4,247) Provision for credit losses (3,350) - - (3,350) Noninterest income 6,482 10,305 (6) 16,781 Noninterest expense (22,776) (8,527) (8,058) (39,361) Net intersegment (expense) income (7,010) (680) 7,690 - Income (loss) before taxes 7,301 1,098 (287) 8,112 Income tax (expense) benefit (2,755) (414) 108 (3,061) Net Income (loss) $ 4,546 $ 684 $ (179) $ 5,051 Total assets $ 1,074,638 $ 10,824 $ 14,940 $ 1,100,402 |
SUMMARY OF SIGNIFICANT ACCOUN56
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, depreciation methods | Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets. | ||
Advertising expense | $ 528 | $ 495 | $ 428 |
Land Improvements [Member] | |||
Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life | 15 years | ||
Minimum [Member] | Furniture, Fixtures and Equipment [Member] | |||
Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life | 3 years | ||
Minimum [Member] | Computer Hardware and Data Handling Equipment [Member] | |||
Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life | 3 years | ||
Minimum [Member] | Building and Building Improvements [Member] | |||
Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life | 10 years | ||
Maximum [Member] | Furniture, Fixtures and Equipment [Member] | |||
Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life | 10 years | ||
Maximum [Member] | Computer Hardware and Data Handling Equipment [Member] | |||
Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life | 5 years | ||
Maximum [Member] | Building and Building Improvements [Member] | |||
Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life | 40 years |
INVESTMENT SECURITIES (Narrativ
INVESTMENT SECURITIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
INVESTMENT SECURITIES [Abstract] | |||
Proceeds from sale and maturity of marketable securities | $ 4,000 | $ 0 | $ 988 |
Gain on sale of investments | 30 | 0 | 23 |
Loss on sale of investments | $ 0 | $ 0 | $ 0 |
INVESTMENT SECURITIES (Schedule
INVESTMENT SECURITIES (Schedule of Available-for-Sale and Held-to-Maturity Securities Reconciliation) (Details) - USD ($) $ in Thousands | Dec. 15, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale securities, Amortized Cost | $ 165,462 | $ 212,284 | ||
Available-for-sale securities, Gross Unrealized Gains | 319 | 733 | ||
Available-for-sale securities, Gross Unrealized Losses | 1,983 | 852 | ||
Available-for-sale securities, Estimated Fair Value | 163,798 | 212,165 | ||
Held-to-maturity securities, Amortized Cost | 6,808 | 4,191 | ||
Held-to-maturity securities, Gross Unrealized Gains | 76 | 112 | ||
Held-to-maturity securities, Gross Unrealized Losses | 78 | 60 | ||
Held-to-maturity securities, Estimated Fair Value | 6,806 | 4,243 | ||
Purchases of securities held to maturity | $ 3,000 | 3,000 | ||
Equity [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale securities, Amortized Cost | 652 | 637 | ||
Available-for-sale securities, Gross Unrealized Gains | 4 | |||
Available-for-sale securities, Gross Unrealized Losses | 12 | |||
Available-for-sale securities, Estimated Fair Value | 640 | 641 | ||
Held-to-maturity securities, Amortized Cost | 3,000 | |||
Held-to-maturity securities, Estimated Fair Value | 3,000 | |||
Other Equity Securities [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Held-to-maturity securities, Amortized Cost | [1] | 3,000 | ||
Held-to-maturity securities, Estimated Fair Value | [1] | 3,000 | ||
U.S. Treasury [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale securities, Amortized Cost | 5,078 | |||
Available-for-sale securities, Gross Unrealized Gains | 1 | |||
Available-for-sale securities, Estimated Fair Value | 5,079 | |||
U.S. Government Agencies [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale securities, Amortized Cost | 34,320 | 49,630 | ||
Available-for-sale securities, Gross Unrealized Gains | 56 | 89 | ||
Available-for-sale securities, Gross Unrealized Losses | 162 | 190 | ||
Available-for-sale securities, Estimated Fair Value | 34,214 | 49,529 | ||
Held-to-maturity securities, Amortized Cost | 2,193 | 2,575 | ||
Held-to-maturity securities, Gross Unrealized Losses | 78 | 60 | ||
Held-to-maturity securities, Estimated Fair Value | 2,115 | 2,515 | ||
States and Political Subdivisions [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Held-to-maturity securities, Amortized Cost | 1,615 | 1,616 | ||
Held-to-maturity securities, Gross Unrealized Gains | 76 | 112 | ||
Held-to-maturity securities, Estimated Fair Value | 1,691 | 1,728 | ||
Mortgage-backed [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale securities, Amortized Cost | 130,490 | 156,939 | ||
Available-for-sale securities, Gross Unrealized Gains | 263 | 639 | ||
Available-for-sale securities, Gross Unrealized Losses | 1,809 | 662 | ||
Available-for-sale securities, Estimated Fair Value | $ 128,944 | $ 156,916 | ||
[1] | On December 15, 2016 the Company bought $3.0 million in subordinated notes from a local regional bank which it intends to hold to maturity of December 30, 2026. |
INVESTMENT SECURITIES (Availabl
INVESTMENT SECURITIES (Available-For-Sale Securities and Held-to-Maturity, Continuous Unrealized Loss Position, Fair Value) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than 12 months, fair value | $ 112,803 | $ 62,862 |
Available-for-sale securities, continuous unrealized loss position, less than 12 Months, unrealized losses | 1,616 | 385 |
Available-for-sale securities, continuous unrealized loss position, more than 12 Months, fair value | 9,208 | 21,263 |
Available-for-sale securities, continuous unrealized loss position, more than 12 Months, unrealized losses | 367 | 467 |
Available-for-sale securities, continuous unrealized loss position, fair value | 122,011 | 84,125 |
Available-for-sale securities, continuous unrealized loss position, unrealized losses | 1,983 | 852 |
Equity [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than 12 months, fair value | 640 | |
Available-for-sale securities, continuous unrealized loss position, less than 12 Months, unrealized losses | 12 | |
Available-for-sale securities, continuous unrealized loss position, more than 12 Months, fair value | ||
Available-for-sale securities, continuous unrealized loss position, more than 12 Months, unrealized losses | ||
Available-for-sale securities, continuous unrealized loss position, fair value | 640 | |
Available-for-sale securities, continuous unrealized loss position, unrealized losses | 12 | |
U.S. Government Agencies [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than 12 months, fair value | 11,926 | 18,981 |
Available-for-sale securities, continuous unrealized loss position, less than 12 Months, unrealized losses | 58 | 57 |
Available-for-sale securities, continuous unrealized loss position, more than 12 Months, unrealized losses | 104 | 133 |
Available-for-sale securities, continuous unrealized loss position, fair value | 11,926 | 18,981 |
Available-for-sale securities, continuous unrealized loss position, unrealized losses | 162 | 190 |
Held-to-maturity securities, continuous unrealized loss position, less than 12 Months, fair value | 2,115 | |
Held-to-maturity securities, continuous unrealized loss position, less than 12 Months, unrealized losses | 78 | |
Held-to-maturity securities, continuous unrealized loss position, more than 12 Months, fair value | 2,515 | |
Held-to-maturity securities, continuous unrealized loss position, more than 12 Months, unrealized losses | 60 | |
Held-to-maturity securities, continuous unrealized loss position, fair value | 2,115 | 2,515 |
Held-to-maturity securities, continuous unrealized loss position, unrealized losses | 78 | 60 |
Mortgage-backed [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than 12 months, fair value | 100,237 | 43,881 |
Available-for-sale securities, continuous unrealized loss position, less than 12 Months, unrealized losses | 1,546 | 328 |
Available-for-sale securities, continuous unrealized loss position, more than 12 Months, fair value | 9,208 | 21,263 |
Available-for-sale securities, continuous unrealized loss position, more than 12 Months, unrealized losses | 263 | 334 |
Available-for-sale securities, continuous unrealized loss position, fair value | 109,445 | 65,144 |
Available-for-sale securities, continuous unrealized loss position, unrealized losses | $ 1,809 | $ 662 |
INVESTMENT SECURITIES (Schedu60
INVESTMENT SECURITIES (Schedule of Securities Debt Maturities) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Available for sale, Amortized Cost, Due in one year or less | $ 15,018 | |
Available for sale, Amortized Cost, Due after one year through five years | 16,983 | |
Available for sale, Amortized Cost, Due after five years through ten years | 12,889 | |
Available for sale, Amortized Cost, Due after ten years | 119,920 | |
Available for sale, Amortized Cost, Debt maturities | 164,810 | |
Available-for-sale securities, Amortized Cost | 165,462 | $ 212,284 |
Available for sale, Estimated Fair Value, Due in one year or less | 15,027 | |
Available for sale, Estimated Fair Value, Due after one year through five years | 16,948 | |
Available for sale, Estimated Fair Value, Due after five years through ten years | 12,736 | |
Available for sale, Estimated Fair Value, Due after ten years | 118,447 | |
Available for sale, Estimated Fair Value, Debt maturities | 163,158 | |
Available for sale, Estimated Fair Value, Total | 163,798 | 212,165 |
Held to maturity securities, Amortized Cost, Due in one year or less | 210 | |
Held to maturity securities, Amortized Cost, Due after one year through five years | 501 | |
Held to maturity securities, Amortized Cost, Due after five years through ten years | 904 | |
Held to maturity securities, Amortized Cost, Due after ten years | 2,193 | |
Held to maturity securities, Amortized Cost, Debt maturities | 3,808 | |
Held to maturity securities, Amortized Cost, Total | 6,808 | 4,191 |
Held to maturity securities, Estimated Fair Value, Due in one year or less | 210 | |
Held to maturity securities, Estimated Fair Value, Due after one year through five years | 531 | |
Held to maturity securities, Estimated Fair Value, Due after five years through ten years | 950 | |
Held to maturity securities, Estimated Fair Value, Due after ten years | 2,115 | |
Held to maturity securities, Estimated Fair Value, Debt maturities | 3,806 | |
Held-to-maturity securities, Estimated Fair Value, Total | 6,806 | 4,243 |
Equity [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, Amortized Cost | 652 | 637 |
Available for sale, Estimated Fair Value, Total | 640 | $ 641 |
Held to maturity securities, Amortized Cost, Total | 3,000 | |
Held-to-maturity securities, Estimated Fair Value, Total | $ 3,000 |
INVESTMENT SECURITIES (Amortize
INVESTMENT SECURITIES (Amortized Cost and Estimated Fair Values of Securities) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Available for sale, Amortized Cost, Total | $ 165,462 | $ 212,284 |
Securities Pledged as Collateral [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available for sale, Amortized Cost, Total | 140,042 | 121,142 |
Available-for-sale, Pledged available-for-sale securities, Estimated Fair Value | $ 138,875 | $ 121,207 |
LOANS AND ALLOWANCE FOR CREDI62
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Narrative) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($)contract | Dec. 31, 2015USD ($)loancontract | |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Loans and leases receivable, related parties, period increase (decrease) | $ (10,800) | |
Financing receivable, modifications, post-modification recorded investment | $ 1,260 | $ 4,184 |
Financing receivable, modifications, number of contracts | contract | 5 | 11 |
Financing receivable, recorded investment, nonaccrual status | $ 8,972 | $ 12,093 |
Mortgage loans in process of foreclosure, amount | 687 | 581 |
Loans and leases receivable, net amount, total | 862,799 | 786,798 |
Loans and leases receivable allowance net change increase (decrease) | (776) | |
Financing receivable origination fee, net | 509 | 357 |
Other real estate owned, net | 2,477 | 4,252 |
Special Mention [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Financing receivable, recorded investment, nonaccrual status | 0 | 0 |
Doubtful [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Financing receivable, recorded investment, nonaccrual status | 0 | 0 |
Substandard [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Financing receivable, recorded investment, nonaccrual status | 9,000 | 12,100 |
Directors, Associates and Policy Making Officers [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Loans and leases receivable, related parties | 13,300 | 22,000 |
Loans and leases receivable, related parties, additions | 3,300 | 5,500 |
Loans and leases receivable, related parties, proceeds | 1,100 | 2,400 |
Residential Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Financing receivable, modifications, post-modification recorded investment | $ 688 | $ 1,837 |
Financing receivable, modifications, number of contracts | contract | 3 | 10 |
Financing receivable, recorded investment, nonaccrual status | $ 3,903 | $ 2,259 |
Other real estate owned, net | $ 18 | 460 |
3 Loans Transfer From Accruing Trouble Debt Restructuring to Accrual Status [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Financing receivable, modifications, post-modification recorded investment | $ 1,300 | |
Financing receivable, modifications, number of contracts | loan | 3 |
LOANS AND ALLOWANCE FOR CREDI63
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Schedule of Financing Receivables) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Loans and Leases Receivable Disclosure [Line Items] | ||
Loans | $ 871,525 | $ 795,114 |
Allowance for credit losses | (8,726) | (8,316) |
Loans, net | 862,799 | 786,798 |
Commercial and Residential Real Estate Portfolio Segment [Member] | Construction Loans [Member] | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Loans | 84,002 | 85,632 |
Allowance for credit losses | (2,787) | (1,646) |
Residential Portfolio Segment [Member] | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Loans | 325,768 | 307,063 |
Allowance for credit losses | (1,953) | (2,181) |
Commercial Real Estate Portfolio Segment [Member] | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Loans | 382,681 | 330,253 |
Allowance for credit losses | (2,610) | (2,999) |
Commercial Portfolio Segment [Member] | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Loans | 72,435 | 64,911 |
Allowance for credit losses | (1,145) | (558) |
Consumer Portfolio Segment [Member] | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Loans | 6,639 | 7,255 |
Allowance for credit losses | $ (231) | $ (156) |
LOANS AND ALLOWANCE FOR CREDI64
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Allowance for Credit Losses on Loans Receivable with Impairment) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Loans individually evaluated for impairment | $ 21,972 | $ 27,588 |
Loans collectively evaluated for impairment | 849,553 | 767,526 |
Total loans | 871,525 | 795,114 |
Allowance for credit losses allocated to: | ||
Loans individually evaluated for impairment | 2,141 | 1,401 |
Loans collectively evaluated for impairment | 6,585 | 6,915 |
Loans and Leases Receivable, Allowance, Total | 8,726 | 8,316 |
Commercial and Residential Real Estate Portfolio Segment [Member] | Construction Loans [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Loans individually evaluated for impairment | 8,007 | 11,598 |
Loans collectively evaluated for impairment | 75,995 | 74,034 |
Total loans | 84,002 | 85,632 |
Allowance for credit losses allocated to: | ||
Loans individually evaluated for impairment | 1,639 | 619 |
Loans collectively evaluated for impairment | 1,148 | 1,027 |
Loans and Leases Receivable, Allowance, Total | 2,787 | 1,646 |
Residential Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Loans individually evaluated for impairment | 7,778 | 7,945 |
Loans collectively evaluated for impairment | 317,990 | 299,118 |
Total loans | 325,768 | 307,063 |
Allowance for credit losses allocated to: | ||
Loans individually evaluated for impairment | 317 | 435 |
Loans collectively evaluated for impairment | 1,636 | 1,746 |
Loans and Leases Receivable, Allowance, Total | 1,953 | 2,181 |
Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Loans individually evaluated for impairment | 6,088 | 7,762 |
Loans collectively evaluated for impairment | 376,593 | 322,491 |
Total loans | 382,681 | 330,253 |
Allowance for credit losses allocated to: | ||
Loans individually evaluated for impairment | 185 | 340 |
Loans collectively evaluated for impairment | 2,425 | 2,659 |
Loans and Leases Receivable, Allowance, Total | 2,610 | 2,999 |
Commercial Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Loans individually evaluated for impairment | 161 | |
Loans collectively evaluated for impairment | 72,435 | 64,750 |
Total loans | 72,435 | 64,911 |
Allowance for credit losses allocated to: | ||
Loans collectively evaluated for impairment | 1,145 | 558 |
Loans and Leases Receivable, Allowance, Total | 1,145 | 558 |
Consumer Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Loans individually evaluated for impairment | 99 | 122 |
Loans collectively evaluated for impairment | 6,540 | 7,133 |
Total loans | 6,639 | 7,255 |
Allowance for credit losses allocated to: | ||
Loans individually evaluated for impairment | 7 | |
Loans collectively evaluated for impairment | 231 | 149 |
Loans and Leases Receivable, Allowance, Total | $ 231 | 156 |
Unallocated Financing Receivables [Member] | ||
Allowance for credit losses allocated to: | ||
Loans collectively evaluated for impairment | 776 | |
Loans and Leases Receivable, Allowance, Total | $ 776 |
LOANS AND ALLOWANCE FOR CREDI65
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Impaired Financing Receivables by Loan Class) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Unpaid principal balance | $ 26,160 | $ 33,199 |
Recorded investment with no allowance | 10,896 | 15,840 |
Recorded investment with an allowance | 11,076 | 11,748 |
Related allowance | 2,141 | 1,401 |
Average recorded investment | 25,490 | 30,347 |
Interest income recognized | 465 | 651 |
Impaired Nonaccrual Loans [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Unpaid principal balance | 13,160 | 17,704 |
Recorded investment with no allowance | 3,015 | 8,492 |
Recorded investment with an allowance | 5,957 | 3,601 |
Related allowance | 1,904 | 812 |
Average recorded investment | 11,565 | 13,350 |
Impaired Accruing Restructured Loans [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Unpaid principal balance | 13,000 | 15,495 |
Recorded investment with no allowance | 7,881 | 7,348 |
Recorded investment with an allowance | 5,119 | 8,147 |
Related allowance | 237 | 589 |
Average recorded investment | 13,925 | 16,997 |
Interest income recognized | 465 | 651 |
Residential Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Unpaid principal balance | 7,888 | 8,249 |
Recorded investment with no allowance | 4,786 | 4,153 |
Recorded investment with an allowance | 2,992 | 3,793 |
Related allowance | 317 | 435 |
Average recorded investment | 8,163 | 9,714 |
Interest income recognized | 195 | 312 |
Residential Portfolio Segment [Member] | Impaired Nonaccrual Loans [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Unpaid principal balance | 4,013 | 2,563 |
Recorded investment with no allowance | 1,957 | 1,773 |
Recorded investment with an allowance | 1,946 | 487 |
Related allowance | 166 | 208 |
Average recorded investment | 3,500 | 2,767 |
Residential Portfolio Segment [Member] | Impaired Accruing Restructured Loans [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Unpaid principal balance | 3,875 | 5,686 |
Recorded investment with no allowance | 2,829 | 2,380 |
Recorded investment with an allowance | 1,046 | 3,306 |
Related allowance | 151 | 227 |
Average recorded investment | 4,663 | 6,947 |
Interest income recognized | 195 | 312 |
Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Unpaid principal balance | 6,737 | 8,728 |
Recorded investment with no allowance | 2,532 | 3,515 |
Recorded investment with an allowance | 3,556 | 4,247 |
Related allowance | 185 | 340 |
Average recorded investment | 7,234 | 8,102 |
Interest income recognized | 174 | 254 |
Commercial Real Estate Portfolio Segment [Member] | Impaired Nonaccrual Loans [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Unpaid principal balance | 1,801 | 2,988 |
Recorded investment with no allowance | 959 | 1,813 |
Recorded investment with an allowance | 193 | 209 |
Related allowance | 117 | 9 |
Average recorded investment | 2,144 | 2,159 |
Commercial Real Estate Portfolio Segment [Member] | Impaired Accruing Restructured Loans [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Unpaid principal balance | 4,936 | 5,740 |
Recorded investment with no allowance | 1,573 | 1,702 |
Recorded investment with an allowance | 3,363 | 4,038 |
Related allowance | 68 | 331 |
Average recorded investment | 5,090 | 5,943 |
Interest income recognized | 174 | 254 |
Commercial Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Unpaid principal balance | 175 | |
Recorded investment with no allowance | 161 | |
Average recorded investment | 108 | 153 |
Interest income recognized | 1 | |
Commercial Portfolio Segment [Member] | Impaired Nonaccrual Loans [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Unpaid principal balance | 175 | |
Recorded investment with no allowance | 161 | |
Average recorded investment | 108 | 126 |
Commercial Portfolio Segment [Member] | Impaired Accruing Restructured Loans [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Average recorded investment | 27 | |
Interest income recognized | 1 | |
Consumer Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Unpaid principal balance | 99 | 128 |
Recorded investment with no allowance | 99 | 98 |
Recorded investment with an allowance | 23 | |
Related allowance | 7 | |
Average recorded investment | 106 | 122 |
Consumer Portfolio Segment [Member] | Impaired Nonaccrual Loans [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Unpaid principal balance | 99 | 128 |
Recorded investment with no allowance | 99 | 98 |
Recorded investment with an allowance | 23 | |
Related allowance | 7 | |
Average recorded investment | 106 | 122 |
Construction Loans [Member] | Commercial and Residential Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Unpaid principal balance | 11,436 | 15,919 |
Recorded investment with no allowance | 3,479 | 7,913 |
Recorded investment with an allowance | 4,528 | 3,685 |
Related allowance | 1,639 | 619 |
Average recorded investment | 9,879 | 12,256 |
Interest income recognized | 96 | 84 |
Construction Loans [Member] | Commercial and Residential Real Estate Portfolio Segment [Member] | Impaired Nonaccrual Loans [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Unpaid principal balance | 7,247 | 11,850 |
Recorded investment with no allowance | 4,647 | |
Recorded investment with an allowance | 3,818 | 2,882 |
Related allowance | 1,621 | 588 |
Average recorded investment | 5,707 | 8,176 |
Construction Loans [Member] | Commercial and Residential Real Estate Portfolio Segment [Member] | Impaired Accruing Restructured Loans [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Unpaid principal balance | 4,189 | 4,069 |
Recorded investment with no allowance | 3,479 | 3,266 |
Recorded investment with an allowance | 710 | 803 |
Related allowance | 18 | 31 |
Average recorded investment | 4,172 | 4,080 |
Interest income recognized | $ 96 | $ 84 |
LOANS AND ALLOWANCE FOR CREDI66
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Rollforward of TDRs) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
TDR beginning balance | $ 20,923 | $ 23,748 |
New TDRs | 3,747 | 1,837 |
Disbursements (Payments) | (3,702) | (2,039) |
Charge offs | (988) | (1,098) |
Reclassifications/Transfer In/(Out) | (1,100) | (1,525) |
Payoffs | (376) | |
TDR ending balance | 18,504 | 20,923 |
TDR, Related Allowance | 2,014 | 1,325 |
Impaired Nonaccrual Loans [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
TDR beginning balance | 5,428 | 7,074 |
New TDRs | 2,687 | |
Disbursements (Payments) | (2,693) | (246) |
Charge offs | (871) | (1,098) |
Reclassifications/Transfer In/(Out) | 953 | (302) |
TDR ending balance | 5,504 | 5,428 |
TDR, Related Allowance | 1,777 | 736 |
Impaired Nonaccrual Loans [Member] | Residential Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
TDR beginning balance | 445 | 3,382 |
New TDRs | 117 | |
Disbursements (Payments) | (531) | (26) |
Charge offs | (23) | |
Reclassifications/Transfer In/(Out) | 1,595 | (2,911) |
TDR ending balance | 1,603 | 445 |
TDR, Related Allowance | 156 | 141 |
Impaired Nonaccrual Loans [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
TDR beginning balance | 346 | |
Disbursements (Payments) | (117) | (4) |
Charge offs | (258) | (40) |
Reclassifications/Transfer In/(Out) | 458 | (302) |
TDR ending balance | 83 | |
Impaired Nonaccrual Loans [Member] | Consumer Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
TDR beginning balance | 23 | 25 |
Disbursements (Payments) | (23) | (2) |
TDR ending balance | 23 | |
TDR, Related Allowance | 7 | |
Impaired Nonaccrual Loans [Member] | Construction Loans [Member] | Commercial and Residential Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
TDR beginning balance | 4,960 | 3,321 |
New TDRs | 2,570 | |
Disbursements (Payments) | (2,022) | (214) |
Charge offs | (590) | (1,058) |
Reclassifications/Transfer In/(Out) | (1,100) | 2,911 |
TDR ending balance | 3,818 | 4,960 |
TDR, Related Allowance | 1,621 | 588 |
Impaired Accruing Restructured Loans [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
TDR beginning balance | 15,495 | 16,674 |
New TDRs | 1,060 | 1,837 |
Disbursements (Payments) | (1,009) | (1,793) |
Charge offs | (117) | |
Reclassifications/Transfer In/(Out) | (2,053) | (1,223) |
Payoffs | (376) | |
TDR ending balance | 13,000 | 15,495 |
TDR, Related Allowance | 237 | 589 |
Impaired Accruing Restructured Loans [Member] | Residential Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
TDR beginning balance | 5,686 | 6,368 |
New TDRs | 565 | 1,837 |
Disbursements (Payments) | (405) | (1,195) |
Reclassifications/Transfer In/(Out) | (1,595) | (1,324) |
Payoffs | (376) | |
TDR ending balance | 3,875 | 5,686 |
TDR, Related Allowance | 151 | 227 |
Impaired Accruing Restructured Loans [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
TDR beginning balance | 5,740 | 6,237 |
New TDRs | 495 | |
Disbursements (Payments) | (724) | (497) |
Charge offs | (117) | |
Reclassifications/Transfer In/(Out) | (458) | |
TDR ending balance | 4,936 | 5,740 |
TDR, Related Allowance | 68 | 331 |
Impaired Accruing Restructured Loans [Member] | Commercial Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
TDR beginning balance | 47 | |
Disbursements (Payments) | (6) | |
Reclassifications/Transfer In/(Out) | (41) | |
Impaired Accruing Restructured Loans [Member] | Construction Loans [Member] | Commercial and Residential Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
TDR beginning balance | 4,069 | 4,022 |
Disbursements (Payments) | 120 | (95) |
Reclassifications/Transfer In/(Out) | 142 | |
TDR ending balance | 4,189 | 4,069 |
TDR, Related Allowance | $ 18 | $ 31 |
LOANS AND ALLOWANCE FOR CREDI67
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Troubled Debt Restructurings on Financing Receivables) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($)contract | Dec. 31, 2015USD ($)contract | |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Number of contracts | contract | 5 | 11 |
Premodification outstanding recorded investment | $ 1,362 | $ 4,097 |
Postmodification outstanding recorded investment | $ 1,260 | 4,184 |
Related allowance | $ 19 | |
Residential Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Number of contracts | contract | 3 | 10 |
Premodification outstanding recorded investment | $ 667 | $ 1,835 |
Postmodification outstanding recorded investment | $ 688 | 1,837 |
Related allowance | $ 19 | |
Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Number of contracts | contract | 2 | 1 |
Premodification outstanding recorded investment | $ 695 | $ 2,262 |
Postmodification outstanding recorded investment | $ 572 | $ 2,347 |
LOANS AND ALLOWANCE FOR CREDI68
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Troubled Debt Restructurings With Subsequent Default) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($)contract | Dec. 31, 2015USD ($)contract | |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Number of contracts | contract | 5 | 2 |
Recorded investment | $ | $ 987 | $ 279 |
Residential Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Number of contracts | contract | 1 | |
Recorded investment | $ | $ 23 | |
Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Number of contracts | contract | 2 | 2 |
Recorded investment | $ | $ 375 | $ 279 |
Construction Loans [Member] | Commercial and Residential Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Number of contracts | contract | 2 | |
Recorded investment | $ | $ 589 |
LOANS AND ALLOWANCE FOR CREDI69
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Financing Receivable Credit Quality Indicators) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | $ 871,525 | $ 795,114 |
Pass/Performing [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 826,197 | 734,244 |
Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 22,637 | 32,540 |
Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 22,691 | 28,330 |
Commercial and Residential Real Estate Portfolio Segment [Member] | Construction Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 84,002 | 85,632 |
Commercial and Residential Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Pass/Performing [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 72,641 | 70,214 |
Commercial and Residential Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 4,195 | 3,903 |
Commercial and Residential Real Estate Portfolio Segment [Member] | Construction Loans [Member] | Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 7,166 | 11,515 |
Residential Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 325,768 | 307,063 |
Residential Portfolio Segment [Member] | Pass/Performing [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 312,242 | 290,857 |
Residential Portfolio Segment [Member] | Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 6,646 | 8,837 |
Residential Portfolio Segment [Member] | Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 6,880 | 7,369 |
Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 382,681 | 330,253 |
Commercial Real Estate Portfolio Segment [Member] | Pass/Performing [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 363,461 | 302,438 |
Commercial Real Estate Portfolio Segment [Member] | Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 10,939 | 18,699 |
Commercial Real Estate Portfolio Segment [Member] | Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 8,281 | 9,116 |
Commercial Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 72,435 | 64,911 |
Commercial Portfolio Segment [Member] | Pass/Performing [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 71,313 | 63,628 |
Commercial Portfolio Segment [Member] | Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 857 | 1,075 |
Commercial Portfolio Segment [Member] | Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 265 | 208 |
Consumer Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 6,639 | 7,255 |
Consumer Portfolio Segment [Member] | Pass/Performing [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 6,540 | 7,107 |
Consumer Portfolio Segment [Member] | Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | 26 | |
Consumer Portfolio Segment [Member] | Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loan Risk Rating | $ 99 | $ 122 |
LOANS AND ALLOWANCE FOR CREDI70
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Aging of Past Due Financing Receivables) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | $ 852,410 | $ 777,792 |
Total past due | 10,143 | 5,229 |
Nonaccrual | 8,972 | 12,093 |
Total loans | $ 871,525 | $ 795,114 |
Percent of total loans, Current | 97.80% | 97.80% |
Percent of total loans, Total past due | 1.20% | 0.70% |
Percent of total loans, Nonaccrual | 1.00% | 1.50% |
Percent of total loans, Total loans | 100.00% | 100.00% |
Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | $ 5,029 | $ 2,222 |
Percent of total loans, Total past due | 0.60% | 0.30% |
Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | $ 5,094 | $ 3,000 |
Percent of total loans, Total past due | 0.60% | 0.40% |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | $ 20 | $ 7 |
Residential Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 317,992 | 300,563 |
Total past due | 3,873 | 4,241 |
Nonaccrual | 3,903 | 2,259 |
Total loans | 325,768 | 307,063 |
Residential Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 1,778 | 2,139 |
Residential Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 2,095 | 2,102 |
Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 375,552 | 327,370 |
Total past due | 5,977 | 861 |
Nonaccrual | 1,152 | 2,022 |
Total loans | 382,681 | 330,253 |
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 3,219 | |
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 2,758 | 861 |
Commercial Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 72,272 | 64,670 |
Total past due | 163 | 80 |
Nonaccrual | 161 | |
Total loans | 72,435 | 64,911 |
Commercial Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 19 | 49 |
Commercial Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 134 | 31 |
Commercial Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 10 | |
Consumer Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 6,515 | 7,107 |
Total past due | 25 | 26 |
Nonaccrual | 99 | 122 |
Total loans | 6,639 | 7,255 |
Consumer Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 13 | 13 |
Consumer Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 2 | 6 |
Consumer Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | 10 | 7 |
Construction Loans [Member] | Commercial and Residential Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 80,079 | 78,082 |
Total past due | 105 | 21 |
Nonaccrual | 3,818 | 7,529 |
Total loans | 84,002 | 85,632 |
Construction Loans [Member] | Commercial and Residential Real Estate Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | $ 21 | |
Construction Loans [Member] | Commercial and Residential Real Estate Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total past due | $ 105 |
LOANS AND ALLOWANCE FOR CREDI71
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Allowance for Credit Losses on Financing Receivables) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for credit losses: | |||
Beginning balance | $ 8,316 | $ 7,695 | |
Charge-offs | (2,240) | (2,724) | |
Recoveries | 802 | 1,270 | |
Net charge-offs | (1,438) | (1,454) | |
Provision | 1,848 | 2,075 | $ 3,350 |
Ending balance | 8,726 | 8,316 | 7,695 |
Commercial and Residential Real Estate Portfolio Segment [Member] | Construction Loans [Member] | |||
Allowance for credit losses: | |||
Beginning balance | 1,646 | 1,303 | |
Charge-offs | (615) | (1,058) | |
Recoveries | 35 | 125 | |
Net charge-offs | (580) | (933) | |
Provision | 1,721 | 1,276 | |
Ending balance | 2,787 | 1,646 | 1,303 |
Residential Portfolio Segment [Member] | |||
Allowance for credit losses: | |||
Beginning balance | 2,181 | 2,834 | |
Charge-offs | (580) | (283) | |
Recoveries | 298 | 398 | |
Net charge-offs | (282) | 115 | |
Provision | 54 | (768) | |
Ending balance | 1,953 | 2,181 | 2,834 |
Commercial Real Estate Portfolio Segment [Member] | |||
Allowance for credit losses: | |||
Beginning balance | 2,999 | 2,379 | |
Charge-offs | (503) | (920) | |
Recoveries | 25 | 379 | |
Net charge-offs | (478) | (541) | |
Provision | 89 | 1,161 | |
Ending balance | 2,610 | 2,999 | 2,379 |
Commercial Portfolio Segment [Member] | |||
Allowance for credit losses: | |||
Beginning balance | 558 | 448 | |
Charge-offs | (497) | (396) | |
Recoveries | 428 | 319 | |
Net charge-offs | (69) | (77) | |
Provision | 656 | 187 | |
Ending balance | 1,145 | 558 | 448 |
Consumer Portfolio Segment [Member] | |||
Allowance for credit losses: | |||
Beginning balance | 156 | 229 | |
Charge-offs | (45) | (67) | |
Recoveries | 16 | 49 | |
Net charge-offs | (29) | (18) | |
Provision | 104 | (55) | |
Ending balance | 231 | 156 | 229 |
Unallocated Financing Receivables [Member] | |||
Allowance for credit losses: | |||
Beginning balance | 776 | 502 | |
Provision | $ (776) | 274 | |
Ending balance | $ 776 | $ 502 |
PREMISES AND EQUIPMENT (Narrati
PREMISES AND EQUIPMENT (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
PREMISES AND EQUIPMENT [Abstract] | |||
Depreciation | $ 1,000 | $ 912 | $ 867 |
Operating leases, rent expense | $ 660 | $ 650 | $ 700 |
PREMISES AND EQUIPMENT (Schedul
PREMISES AND EQUIPMENT (Schedule of Property Plant and Equipment) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 28,860 | $ 28,510 |
Accumulated depreciation | (12,302) | (11,646) |
Total | 16,558 | 16,864 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 5,818 | 5,818 |
Buildings and Land Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 16,296 | 15,982 |
Furniture, Fixtures and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 6,746 | 6,710 |
Parent Company [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 3,547 | $ 3,598 |
PREMISES AND EQUIPMENT (Operati
PREMISES AND EQUIPMENT (Operating Leases of Lessee Disclosure) (Details) $ in Thousands | Dec. 31, 2016USD ($) |
PREMISES AND EQUIPMENT [Abstract] | |
2,017 | $ 567 |
2,018 | 434 |
2,019 | 382 |
2,020 | 250 |
2,021 | 215 |
Thereafter | 806 |
Total minimum lease payments | $ 2,654 |
INVESTMENT IN UNCONSOLIDATED 75
INVESTMENT IN UNCONSOLIDATED SUBSIDIARIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Eastern [Member] | |||
Equity method investments | $ 361 | ||
Income (loss) from equity method investments | 41 | $ (112) | |
Parent Company [Member] | |||
Income (loss) from equity method investments | $ 8,520 | 6,184 | $ 5,030 |
Avon-Dixon Agency, LLC [Member] | Eastern [Member] | |||
Equity method investment, ownership percentage | 40.00% | ||
Equity method investments | $ 320 |
GOODWILL AND OTHER INTANGIBLE76
GOODWILL AND OTHER INTANGIBLE ASSETS (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill | $ 11,931 | $ 11,931 | |
Amortization of other intangible assets | 131 | 133 | $ 201 |
Community Banking [Member] | |||
Goodwill | 2,500 | 2,500 | |
Insurance Products and Services [Member] | |||
Goodwill | $ 9,400 | $ 9,400 |
GOODWILL AND OTHER INTANGIBLE77
GOODWILL AND OTHER INTANGIBLE ASSETS (Schedule of Components of Goodwill and Other Acquired Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets [Line Items] | ||
Goodwill, Gross | $ 15,235 | $ 15,235 |
Accumulated Impairment Charges | (2,637) | (2,637) |
Accumulated Amortization | (667) | (667) |
Net Carrying Amount | 11,931 | 11,931 |
Other intangible assets, Amortizable, Gross Carrying Amount | 2,505 | 2,505 |
Other intangible assets, Amortizable, Accumulated Impairment Charges | (95) | (95) |
Other intangible assets, Amortizable, Accumulated Amortization | (2,111) | (1,979) |
Other intangible assets, Amortizable, Net Carrying Amount | 299 | 431 |
Other intangible assets, Unamortizable, Net Carrying Amount | 780 | 780 |
Intangible Assets, Gross (Excluding Goodwill) | 3,285 | 3,285 |
Intangible Assets, Net (Excluding Goodwill), Total | 1,079 | 1,211 |
Employment Contracts [Member] | ||
Goodwill and Intangible Assets [Line Items] | ||
Other intangible assets, Amortizable, Gross Carrying Amount | 440 | 440 |
Other intangible assets, Amortizable, Accumulated Amortization | $ (440) | $ (440) |
Weighted Average Remaining Life (in years) | 0 years | 0 years |
Insurance Expirations [Member] | ||
Goodwill and Intangible Assets [Line Items] | ||
Other intangible assets, Amortizable, Gross Carrying Amount | $ 1,270 | $ 1,270 |
Other intangible assets, Amortizable, Accumulated Amortization | (1,233) | (1,148) |
Other intangible assets, Amortizable, Net Carrying Amount | $ 37 | $ 122 |
Weighted Average Remaining Life (in years) | 4 months 24 days | 1 year 4 months 24 days |
Customer Relationships [Member] | ||
Goodwill and Intangible Assets [Line Items] | ||
Other intangible assets, Amortizable, Gross Carrying Amount | $ 795 | $ 795 |
Other intangible assets, Amortizable, Accumulated Impairment Charges | (95) | (95) |
Other intangible assets, Amortizable, Accumulated Amortization | (438) | (391) |
Other intangible assets, Amortizable, Net Carrying Amount | $ 262 | $ 309 |
Weighted Average Remaining Life (in years) | 5 years 7 months 6 days | 6 years 4 months 24 days |
Carrier Relationship [Member] | ||
Goodwill and Intangible Assets [Line Items] | ||
Other intangible assets, Unamortizable, Net Carrying Amount | ||
Trade Names [Member] | ||
Goodwill and Intangible Assets [Line Items] | ||
Other intangible assets, Unamortizable, Net Carrying Amount | $ 780 | $ 780 |
GOODWILL AND OTHER INTANGIBLE78
GOODWILL AND OTHER INTANGIBLE ASSETS (Future Amortization Expense for Amortizable Other Intangible Assets) (Details) $ in Thousands | Dec. 31, 2016USD ($) |
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | |
Amortization Expense, Estimate for years ended December 31, 2017 | $ 84 |
Amortization Expense, Estimate for years ended December 31, 2018 | 47 |
Amortization Expense, Estimate for years ended December 31, 2019 | 47 |
Amortization Expense, Estimate for years ended December 31, 2020 | 47 |
Amortization Expense, Estimate for years ended December 31, 2021 | $ 44 |
OTHER ASSETS (Schedule of Other
OTHER ASSETS (Schedule of Other Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Nonmarketable investment securities | $ 1,650 | $ 1,621 |
Accrued interest receivable | 2,675 | 2,458 |
Deferred income taxes | 7,039 | 12,132 |
Prepaid expenses | 1,149 | 1,039 |
Cash surrender value of life insurance | 2,589 | 2,521 |
Other assets | 3,781 | 4,149 |
Total | 18,883 | 23,920 |
Parent Company [Member] | ||
Total | $ 3,160 | $ 2,419 |
OTHER LIABILITIES (Schedule of
OTHER LIABILITIES (Schedule of Other Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Accrued interest payable | $ 74 | $ 106 |
Other accounts payable | 2,461 | 2,775 |
Deferred compensation liability | 1,444 | 1,464 |
Other liabilities | 1,301 | 1,695 |
Total | 5,280 | 6,040 |
Parent Company [Member] | ||
Total | $ 1,737 | $ 1,204 |
DEPOSITS (Narrative) (Details)
DEPOSITS (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Certificate of deposit at or over $250,000 | $ 29,100 | $ 29,100 |
Deposits | 997,489 | 975,464 |
Directors, Associates and Policy Making Officers [Member] | ||
Deposits | $ 4,600 | $ 5,600 |
DEPOSITS (Schedule of Deposits)
DEPOSITS (Schedule of Deposits) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
DEPOSITS [Abstract] | ||
Time deposits maturity, Due in one year or less | $ 154,328 | $ 163,220 |
Time deposits maturity, Due in one to three years | 60,795 | 86,719 |
Time deposits maturity, Due in three to five years | 45,145 | 39,855 |
Time Deposits, Total | $ 260,268 | $ 289,794 |
SHORT-TERM BORROWINGS (Schedule
SHORT-TERM BORROWINGS (Schedule of Short-term Borrowings) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Short-term Debt [Line Items] | ||
Short-term borrowings, At Year End | $ 3,203 | $ 6,672 |
Retail Repurchase Agreements [Member] | ||
Short-term Debt [Line Items] | ||
Short-term borrowings, Average for the Year | $ 5,753 | $ 6,226 |
Short-term borrowings, weighted interest rate, Average for the Year | 0.24% | 0.24% |
Short-term borrowings, At Year End | $ 3,203 | $ 6,672 |
Short-term debt, weighted interest rate, At Year End | 0.25% | 0.23% |
BENEFIT PLANS (Narrative) (Deta
BENEFIT PLANS (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
BENEFIT PLANS [Abstract] | |||
Defined contribution plan, employer discretionary contribution amount | $ 539 | $ 491 | $ 545 |
STOCK-BASED COMPENSATION (Narra
STOCK-BASED COMPENSATION (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share price | $ 15.25 | ||||
Equity Plan 2016 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award description | The Company may issue shares of common stock or grant other equity-based awards pursuant to the 2016 Equity Plan. Stock-based awards granted to date generally are time-based, vest in equal installments on each anniversary of the grant date and range over a one- to five-year period of time, and, in the case of stock options, expire 10 years from the grant date. As part of the 2016 Equity Plan, a performance equity incentive award program, known as the "Long-term incentive plan" allows participating officers of the Company to earn incentive awards of performance share/restricted stock units if certain pre-determined targets are achieved at the end of a three-year performance cycle. Stock-based compensation expense based on the grant date fair value is recognized ratably over the requisite service period for all awards and reflects forfeitures as they occur. | ||||
Equity Plan 2016 [Member] | Employee Stock Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award method used for valuation | fair value of options using the Black-Scholes valuation model | ||||
Options, granted, weighted average fair value | $ 5.03 | ||||
Options, outstanding intrinsic value | $ 432 | ||||
Number of shares exercised, options | 11,684 | 3,593 | |||
Options, exercised, intrinsic value | $ 21 | ||||
Proceeds from stock options exercised | $ 53 | ||||
Options, Weighted average remaining contractual term | 7 years 1 month 6 days | ||||
Equity Plan 2016 [Member] | Restricted Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of Shares, Granted (in shares) | 27,366 | 12,647 | 3,654 | ||
Other than options, vested, fair value | $ 228 | $ 129 | $ 30 | ||
Equity Plan 2016 [Member] | Time Based Restricted Stock Awards [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award expiration | 10 years | ||||
Shares authorized for granting | 750,000 | ||||
Shares available to be granted | 732,545 | ||||
Equity Plan 2016 [Member] | Restricted Stock Units (RSUs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
Maximum [Member] | Equity Plan 2016 [Member] | Time Based Restricted Stock Awards [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 5 years | ||||
Maximum [Member] | Equity Plan 2016 [Member] | Restricted Stock Units (RSUs) [Member] | Scenario, Forecast [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of Shares, Granted (in shares) | 48,871 | 43,821 | |||
Minimum [Member] | Equity Plan 2016 [Member] | Time Based Restricted Stock Awards [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 1 year | ||||
Minimum [Member] | Equity Plan 2016 [Member] | Restricted Stock Units (RSUs) [Member] | Scenario, Forecast [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of Shares, Granted (in shares) | 12,214 | 10,953 |
STOCK-BASED COMPENSATION (Sched
STOCK-BASED COMPENSATION (Schedule of Stock-Based Compensation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
STOCK-BASED COMPENSATION [Abstract] | |||
Stock-based compensation expense | $ 334 | $ 283 | $ 87 |
Excess tax expense related to stock-based compensation | 27 | 3 | |
Unrecognized stock-based compensation expense | $ 337 | $ 222 | $ 59 |
Weighted average period unrecognized expense is expected to be recognized | 10 months 24 days | 1 year 6 months | 9 months 18 days |
STOCK-BASED COMPENSATION (Sch87
STOCK-BASED COMPENSATION (Schedule of Share-based Compensation, Restricted Stock Units Award Activity) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Equity Plan 2016 [Member] | Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Shares, Nonvested at beginning of period (in shares) | 12,488 | 14,251 | 13,930 |
Number of Shares, Granted (in shares) | 27,366 | 12,647 | 3,654 |
Number of Shares, Vested (in shares) | (22,788) | (14,410) | (3,333) |
Number of Shares, Nonvested at end of period (in shares) | 17,066 | 12,488 | 14,251 |
Weighted Average Grant Date Fair Value, Nonvested at beginning of period (in dollars per share) | $ 8.74 | $ 8.51 | $ 8.33 |
Weighted Average Grant Date Fair Value, Granted (in dollars per share) | 11.51 | 9.21 | 9.57 |
Weighted Average Grant Date Fair Value, Vested (in dollars per share) | 10.01 | 8.93 | 8.93 |
Weighted Average Grant Date Fair Value, Nonvested at end of period (in dollars per share) | $ 11.46 | $ 8.74 | $ 8.51 |
2016 and 2006 Plan [Member] | Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Shares, Nonvested at beginning of period (in shares) | 26,943 | ||
Number of Shares, Granted (in shares) | 24,433 | 26,943 | |
Number of Shares, Cancelled (in shares) | (5,034) | ||
Number of Shares, Nonvested at end of period (in shares) | 46,342 | 26,943 | |
Weighted Average Grant Date Fair Value, Nonvested at beginning of period (in dollars per share) | $ 9.49 | ||
Weighted Average Grant Date Fair Value, Granted (in dollars per share) | 11.68 | $ 9.49 | |
Weighted Average Grant Date Fair Value, Cancelled (in dollars per share) | 9.49 | ||
Weighted Average Grant Date Fair Value, Nonvested at end of period (in dollars per share) | $ 10.64 | $ 9.49 |
STOCK-BASED COMPENSATION (Sch88
STOCK-BASED COMPENSATION (Schedule of Share-based Compensation, Stock Options Activity) (Details) - Employee Stock Option [Member] - Equity Plan 2016 [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares, Outstanding at beginning of period (in shares) | 61,327 | 27,108 | 40,662 |
Number of shares, Granted (in shares) | 12,443 | 34,219 | |
Number of shares, Exercised (in shares) | (11,684) | (3,593) | |
Number of shares, Expired/Cancelled (in shares) | (9,961) | ||
Number of shares, Outstanding at end of period (in shares) | 62,086 | 61,327 | 27,108 |
Number of shares, Exercisable at end of period (in shares) | 58,756 | 44,218 | |
Weighted Average Grant Date Fair Value, Outstanding at beginning of period | $ 8.05 | $ 6.64 | $ 6.64 |
Weighted Average Grant Date Fair Value, Granted | 11.12 | 9.18 | |
Weighted Average Grant Date Fair Value, Exercised | 6.64 | 6.64 | |
Weighted Average Grant Date Fair Value, Expired/Cancelled | 6.64 | ||
Weighted Average Grant Date Fair Value, Outstanding at end of period | 8.29 | 8.05 | $ 6.64 |
Weighted Average Exercise Price, Exercisable at end of period | $ 8.14 | $ 7.62 |
STOCK-BASED COMPENSATION (Sch89
STOCK-BASED COMPENSATION (Schedule of Share-based Payment Award, Stock Option Valuation Assumptions) (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
STOCK-BASED COMPENSATION [Abstract] | ||
Dividend yield | 0.73% | |
Expected volatility | 38.60% | 32.00% |
Risk-free interest rate | 1.75% | 1.97% |
Expected contract life (in years) | 10 years | 7 years |
DEFERRED COMPENSATION (Narrativ
DEFERRED COMPENSATION (Narrative) (Details) - Management and Highly Compensated Employees [Member] - Executive Deferred Compensation Plan [Member] | 12 Months Ended |
Dec. 31, 2016 | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |
Deferred compensation arrangement with individual, description | Shore Bancshares, Inc. Executive Deferred Compensation Plan (the "Plan") is for members of management and highly compensated employees of Shore Bancshares, Inc. and its subsidiaries. The Plan permits a participant to elect, each year, to defer receipt of up to 100% of his or her salary and bonus to be earned in the following year. The Plan also permits the participant to defer the receipt of performance-based compensation not later than six months before the end of the period for which it is to be earned. |
Employee percentage of salary, maximum | 100.00% |
Award vesting period | 5 years |
DEFERRED COMPENSATION (Schedule
DEFERRED COMPENSATION (Schedule of Deferred Compensation Arrangement) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
DEFERRED COMPENSATION [Abstract] | |||
Deferred compensation contribution | |||
Deferred compensation liability | $ 496 | $ 444 |
DEFERRED COMPENSATION (Schedu92
DEFERRED COMPENSATION (Schedule of Deferred Compensation Arrangement in Other Assets and Other Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Cash surrender value | $ 2,589 | $ 2,521 |
Former Directors from CNB [Member] | ||
Cash surrender value | 3,552 | 3,448 |
Accrued benefit obliation | $ 1,444 | $ 1,020 |
OTHER EXPENSES (Schedule of Oth
OTHER EXPENSES (Schedule of Other Noninterest Expenses) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
OTHER EXPENSES [Abstract] | |||
Advertising and marketing | $ 528 | $ 495 | $ 428 |
Other customer expense | 279 | 172 | 396 |
Other expense | 2,096 | 2,168 | 2,070 |
Other loan expense | 510 | 515 | 894 |
Software expense | 895 | 697 | 664 |
Travel and entertainment expense | 315 | 303 | 288 |
Trust professional fees | 539 | 625 | 686 |
Total noninterest expense | $ 5,162 | $ 4,975 | $ 5,426 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Tax at federal statutory rate | 35.00% | 34.00% | 34.00% | ||||||||||||
Income (loss) before taxes | $ 4,377,000 | $ 3,843,000 | $ 3,684,000 | $ 3,995,000 | $ 3,506,000 | $ 3,109,000 | $ 2,631,000 | $ 2,270,000 | $ 1,947,000 | $ 2,036,000 | $ 2,108,000 | $ 2,021,000 | $ 15,899,000 | $ 11,516,000 | $ 8,112,000 |
Deferred tax assets, valuation allowance | 0 | $ 0 | 0 | 0 | |||||||||||
Operating loss carryforwards, Federal | 2,200,000 | 2,200,000 | |||||||||||||
Operating loss carryforwards, state | 27,300,000 | 27,300,000 | |||||||||||||
AMT carryover | $ 869,000 | $ 869,000 | |||||||||||||
Operating loss carryforwards, expiration date | Dec. 31, 2033 | ||||||||||||||
Domestic Tax Authority [Member] | |||||||||||||||
Operating loss carryforwards, expiration date | Dec. 31, 2034 | ||||||||||||||
Parent Company [Member] | |||||||||||||||
Income (loss) before taxes | $ 1,060,000 | $ 859,000 | $ (86,000) | ||||||||||||
Minimum [Member] | State and Local Jurisdiction [Member] | |||||||||||||||
Operating loss carryforwards, expiration date | Dec. 31, 2026 |
INCOME TAXES (Schedule of Compo
INCOME TAXES (Schedule of Components of Income Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current tax expense (benefit): | |||
Federal | $ 525 | $ 247 | |
State | 19 | 287 | $ 225 |
Current income tax expense (benefit), total | 544 | 534 | 225 |
Deferred income tax expense (benefit): | |||
Federal | 4,486 | 3,369 | 2,516 |
State | 1,230 | 505 | 320 |
Deferred income tax expense (benefit), total | 5,716 | 3,874 | 2,836 |
Total income tax expense (benefit) | 6,261 | 4,408 | 3,061 |
Parent Company [Member] | |||
Deferred income tax expense (benefit): | |||
Total income tax expense (benefit) | $ (58) | $ (65) | $ (107) |
INCOME TAXES (Schedule of Effec
INCOME TAXES (Schedule of Effective Income Tax Rate Reconciliation) (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
INCOME TAXES [Abstract] | |||
Tax at federal statutory rate | 35.00% | 34.00% | 34.00% |
Tax effect of: | |||
Tax-exempt income | (0.80%) | (0.40%) | (0.90%) |
Other non-deductible expenses | 0.30% | 0.20% | 0.30% |
State income taxes, net of federal benefit | 5.10% | 4.50% | 4.40% |
Other | (0.20%) | (0.10%) | (0.10%) |
Actual income tax expense (benefit) rate | 39.40% | 38.20% | 37.70% |
INCOME TAXES (Schedule of Defer
INCOME TAXES (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Allowance for credit losses | $ 3,486 | $ 3,316 |
Reserve for off-balance sheet commitments | 122 | 121 |
Net operating loss carry forward | 2,232 | 9,069 |
Write-downs of other real estate owned | 387 | 308 |
Deferred income | 1,011 | 1,155 |
Unrealized gains on available-for-sale securities | 672 | 48 |
Accrued expenses | 946 | |
AMT Credits | 869 | |
Other | 1,192 | 191 |
Total deferred tax assets | 9,971 | 15,154 |
Deferred Tax Liabilities, Net [Abstract] | ||
Depreciation | 239 | 271 |
Amortization on loans FMV adjustment | 156 | 140 |
Purchase accounting adjustments | 2,019 | 1,988 |
Deferred capital gain on branch sale | 401 | 411 |
Other | 116 | 212 |
Total deferred tax liabilities | 2,931 | 3,022 |
Net deferred tax assets | $ 7,040 | $ 12,132 |
EARNINGS PER COMMON SHARE (Sche
EARNINGS PER COMMON SHARE (Schedule of Earnings Per Share, Basic and Diluted)(Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net income (loss) | $ 2,495 | $ 2,411 | $ 2,272 | $ 2,460 | $ 2,163 | $ 1,909 | $ 1,627 | $ 1,409 | $ 1,226 | $ 1,262 | $ 1,305 | $ 1,258 | $ 9,638 | $ 7,108 | $ 5,051 |
Weighted average shares outstanding - Basic (in shares) | 12,652,000 | 12,629,000 | 10,945,000 | ||||||||||||
Dilutive effect of common stock equivalents (in shares) | 17,000 | 10,000 | 8,000 | ||||||||||||
Weighted average shares outstanding - Diluted (in shares) | 12,669,000 | 12,639,000 | 10,953,000 | ||||||||||||
Income (loss) per common share - basic | $ 0.20 | $ 0.19 | $ 0.18 | $ 0.19 | $ 0.17 | $ 0.15 | $ 0.13 | $ 0.11 | $ 0.10 | $ 0.10 | $ 0.13 | $ 0.15 | $ 0.76 | $ 0.56 | $ 0.46 |
Income (loss) per common share - diluted | $ 0.20 | $ 0.19 | $ 0.18 | $ 0.19 | $ 0.17 | $ 0.15 | $ 0.13 | $ 0.11 | $ 0.10 | $ 0.10 | $ 0.13 | $ 0.15 | $ 0.76 | $ 0.56 | $ 0.46 |
Weighted average common stock excluded from calculation of diluted EPS | 0 | 0 | 51,000 | ||||||||||||
Parent Company [Member] | |||||||||||||||
Net income (loss) | $ 9,638 | $ 7,108 | $ 5,051 |
REGULATORY CAPITAL REQUIREMEN99
REGULATORY CAPITAL REQUIREMENTS (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
REGULATORY CAPITAL REQUIREMENTS [Abstract] | ||
Proceeds from dividends received | $ 680 | |
Due to affiliate, current | $ 0 | $ 0 |
REGULATORY CAPITAL REQUIREME100
REGULATORY CAPITAL REQUIREMENTS (Schedule of Capital Amount and Ratios) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Tier One Risk Based Capital | $ 140,897 | $ 126,024 |
Capital | 149,924 | 134,643 |
Risk Weighted Assets | 893,116 | 807,807 |
Adjusted Average Total Assets | $ 1,144,968 | $ 1,116,692 |
Common Equity Tier 1 ratio | 15.78% | 15.60% |
Tier 1 Risk-Based Capital Ratio | 15.78% | 15.60% |
Total Risk-Based Capital Ratio | 16.79% | 16.67% |
Tier 1 Leverage Ratio | 12.31% | 11.29% |
Talbot Bank [Member] | ||
Tier One Risk Based Capital | $ 59,692 | |
Capital | 64,405 | |
Risk Weighted Assets | 448,634 | |
Adjusted Average Total Assets | $ 613,945 | |
Common Equity Tier 1 ratio | 13.31% | |
Tier 1 Risk-Based Capital Ratio | 13.31% | |
Total Risk-Based Capital Ratio | 14.36% | |
Tier 1 Leverage Ratio | 9.72% | |
Centreville National Bank [Member] | ||
Tier One Risk Based Capital | $ 48,051 | |
Capital | 51,957 | |
Risk Weighted Assets | 354,278 | |
Adjusted Average Total Assets | $ 486,404 | |
Common Equity Tier 1 ratio | 13.56% | |
Tier 1 Risk-Based Capital Ratio | 13.56% | |
Total Risk-Based Capital Ratio | 14.67% | |
Tier 1 Leverage Ratio | 9.88% | |
Shore United Bank [Member] | ||
Tier One Risk Based Capital | $ 122,543 | |
Capital | 131,570 | |
Risk Weighted Assets | 885,206 | |
Adjusted Average Total Assets | $ 1,126,136 | |
Common Equity Tier 1 ratio | 13.84% | |
Tier 1 Risk-Based Capital Ratio | 13.84% | |
Total Risk-Based Capital Ratio | 14.86% | |
Tier 1 Leverage Ratio | 10.88% |
ACCUMULATED OTHER COMPREHENS101
ACCUMULATED OTHER COMPREHENSIVE INCOME (Schedule of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total accumulated other comprehensive income (loss), Beginning Balance | $ (71) | $ 316 |
Other comprehensive income | (922) | (387) |
Reclassification of (gains) losses recognized | (18) | |
Total accumulated other comprehensive income (loss), Ending Balance | (993) | (71) |
Accumulated Net Unrealized Investment Gain (Loss) [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total accumulated other comprehensive income (loss), Beginning Balance | (71) | 316 |
Other comprehensive income | (922) | (387) |
Total accumulated other comprehensive income (loss), Ending Balance | $ (993) | $ (71) |
ACCUMULATED OTHER COMPREHENS102
ACCUMULATED OTHER COMPREHENSIVE INCOME (Schedule of Reclassification Out of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2014 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Realized gain on sale of investment securities | $ 18 | |
Total Reclassification for the Period | $ 18 | |
Reclassification out of Accumulated Other Comprehensive Income [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Realized gain on sale of investment securities | $ 14 | |
Total Reclassification for the Period | $ 14 |
LINES OF CREDIT (Narrative) (De
LINES OF CREDIT (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
LINES OF CREDIT [Abstract] | ||
Line of credit facility, current borrowing capacity | $ 15,000 | $ 13,000 |
FHLB, lines of credit, available | $ 205,100 | 130,200 |
FHLB, description of collateral | The Bank has pledged as collateral, under a blanket lien, all qualifying residential loans under borrowing agreements with the Federal Home Loan Bank. | |
Line of credit facility, commitment fee percentage | 0.10% | |
FHLB, short-term credit, outstanding | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS (Schedu
FAIR VALUE MEASUREMENTS (Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Securities available for sale: | ||
Available-for-sale Securities, Fair Value Disclosure | $ 163,798 | $ 212,165 |
U.S. Treasury [Member] | ||
Securities available for sale: | ||
Available-for-sale Securities, Fair Value Disclosure | 5,079 | |
U.S. Government Agencies [Member] | ||
Securities available for sale: | ||
Available-for-sale Securities, Fair Value Disclosure | 34,214 | 49,529 |
Mortgage-backed [Member] | ||
Securities available for sale: | ||
Available-for-sale Securities, Fair Value Disclosure | 128,944 | 156,916 |
Equity [Member] | ||
Securities available for sale: | ||
Available-for-sale Securities, Fair Value Disclosure | 640 | 641 |
Fair Value, Inputs, Level 1 [Member] | ||
Securities available for sale: | ||
Available-for-sale Securities, Fair Value Disclosure | 5,079 | |
Fair Value, Inputs, Level 1 [Member] | U.S. Treasury [Member] | ||
Securities available for sale: | ||
Available-for-sale Securities, Fair Value Disclosure | 5,079 | |
Fair Value, Inputs, Level 2 [Member] | ||
Securities available for sale: | ||
Available-for-sale Securities, Fair Value Disclosure | 163,798 | 207,086 |
Fair Value, Inputs, Level 2 [Member] | U.S. Government Agencies [Member] | ||
Securities available for sale: | ||
Available-for-sale Securities, Fair Value Disclosure | 34,214 | 49,529 |
Fair Value, Inputs, Level 2 [Member] | Mortgage-backed [Member] | ||
Securities available for sale: | ||
Available-for-sale Securities, Fair Value Disclosure | 128,944 | 156,916 |
Fair Value, Inputs, Level 2 [Member] | Equity [Member] | ||
Securities available for sale: | ||
Available-for-sale Securities, Fair Value Disclosure | $ 640 | $ 641 |
FAIR VALUE MEASUREMENTS (Fair V
FAIR VALUE MEASUREMENTS (Fair Value of Assets Measured on Nonrecurring Basis) (Details) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Impaired loans: | ||
Impaired loans | $ 19,831 | $ 26,187 |
Other real estate owned | 2,477 | 4,252 |
Total assets measured at fair value on a nonrecurring basis | 22,308 | 30,439 |
Fair Value, Inputs, Level 3 [Member] | ||
Impaired loans: | ||
Impaired loans | 19,831 | 26,187 |
Other real estate owned | 2,477 | 4,252 |
Total assets measured at fair value on a nonrecurring basis | 22,308 | 30,439 |
Residential Portfolio Segment [Member] | ||
Impaired loans: | ||
Impaired loans | 7,461 | 7,510 |
Residential Portfolio Segment [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Impaired loans: | ||
Impaired loans | 7,461 | 7,510 |
Commercial Real Estate Portfolio Segment [Member] | ||
Impaired loans: | ||
Impaired loans | 5,903 | 7,422 |
Commercial Real Estate Portfolio Segment [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Impaired loans: | ||
Impaired loans | 5,903 | 7,422 |
Commercial Portfolio Segment [Member] | ||
Impaired loans: | ||
Impaired loans | 161 | |
Commercial Portfolio Segment [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Impaired loans: | ||
Impaired loans | 161 | |
Consumer Portfolio Segment [Member] | ||
Impaired loans: | ||
Impaired loans | 99 | 115 |
Consumer Portfolio Segment [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Impaired loans: | ||
Impaired loans | 99 | 115 |
Construction Loans [Member] | Commercial and Residential Real Estate Portfolio Segment [Member] | ||
Impaired loans: | ||
Impaired loans | 6,368 | 10,979 |
Construction Loans [Member] | Commercial and Residential Real Estate Portfolio Segment [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Impaired loans: | ||
Impaired loans | $ 6,368 | $ 10,979 |
FAIR VALUE MEASUREMENTS (Sch106
FAIR VALUE MEASUREMENTS (Schedule of Estimated Fair Values of Financial Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Financial assets, Estimated Fair Value | ||
Investment securities held to maturity | $ 6,806 | $ 4,243 |
Fair Value, Inputs, Level 1 [Member] | Carrying Amount [Member] | ||
Financial assets, Estimated Fair Value | ||
Cash and cash equivalents | 75,938 | 73,811 |
Fair Value, Inputs, Level 1 [Member] | Estimated Fair Value [Member] | ||
Financial assets, Estimated Fair Value | ||
Cash and cash equivalents | 75,938 | 73,811 |
Fair Value, Inputs, Level 2 [Member] | Carrying Amount [Member] | ||
Financial assets, Estimated Fair Value | ||
Investment securities held to maturity | 6,808 | 4,191 |
Loans, net | 862,799 | 786,798 |
Financial liabilities, Estimated Fair Value | ||
Deposits | 997,489 | 975,464 |
Short-term borrowings | 3,203 | 6,672 |
Fair Value, Inputs, Level 2 [Member] | Estimated Fair Value [Member] | ||
Financial assets, Estimated Fair Value | ||
Investment securities held to maturity | 6,806 | 4,243 |
Loans, net | 867,594 | 788,187 |
Financial liabilities, Estimated Fair Value | ||
Deposits | 929,573 | 922,161 |
Short-term borrowings | $ 3,203 | $ 6,672 |
FINANCIAL INSTRUMENTS WITH O107
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (Schedule of Commitments Outstanding) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments outstanding | $ 186,257 | $ 174,018 |
Commitments to Extend Credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments outstanding | 178,233 | 166,931 |
Letters of Credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments outstanding | $ 8,024 | $ 7,087 |
RELATED PARTY TRANSACTION (Narr
RELATED PARTY TRANSACTION (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating leases, rent expense | $ 660 | $ 650 | $ 700 |
Tidewater Inn [Member] | Director [Member] | |||
Operating leases, rent expense | $ 16 | $ 38 | |
Ownership percentage, LLC | 61.00% | 61.00% |
PARENT COMPANY FINANCIAL INF109
PARENT COMPANY FINANCIAL INFORMATION (Condensed Balance Sheet, Parent Only) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
ASSETS | ||||
Premises and equipment, net | $ 16,558 | $ 16,864 | ||
Other assets | 18,883 | 23,920 | ||
TOTAL ASSETS | 1,160,271 | 1,135,143 | $ 1,100,402 | |
LIABILITIES | ||||
Other liabilities | 5,280 | 6,040 | ||
TOTAL LIABILITIES | 1,005,972 | 988,176 | ||
STOCKHOLDERS’ EQUITY | ||||
Common stock | 127 | 126 | ||
Additional paid in capital | 64,201 | 63,815 | ||
Retained earnings | 90,964 | 83,097 | ||
Accumulated other comprehensive income (loss) | (993) | (71) | 316 | |
TOTAL STOCKHOLDERS’ EQUITY | 154,299 | 146,967 | $ 140,469 | $ 103,299 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 1,160,271 | 1,135,143 | ||
Parent Company [Member] | ||||
ASSETS | ||||
Cash | 1,249 | 1,899 | ||
Investment securities | 11,846 | 12,246 | ||
Investment in subsidiaries | 137,078 | 129,353 | ||
Premises and equipment, net | 3,547 | 3,598 | ||
Other assets | 3,160 | 2,419 | ||
TOTAL ASSETS | 156,880 | 149,515 | ||
LIABILITIES | ||||
Accrued interest payable | 1 | 1 | ||
Other liabilities | 1,737 | 1,204 | ||
Long-term debt | 843 | 1,343 | ||
TOTAL LIABILITIES | 2,581 | 2,548 | ||
STOCKHOLDERS’ EQUITY | ||||
Common stock | 127 | 126 | ||
Additional paid in capital | 64,201 | 63,815 | ||
Retained earnings | 90,964 | 83,097 | ||
Accumulated other comprehensive income (loss) | (993) | (71) | ||
TOTAL STOCKHOLDERS’ EQUITY | 154,299 | 146,967 | ||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 156,880 | $ 149,515 |
PARENT COMPANY FINANCIAL INF110
PARENT COMPANY FINANCIAL INFORMATION (Condensed Statement of Operations, Parent Only) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Expenses | |||||||||||||||
Interest expense | $ 2,403 | $ 3,346 | $ 4,247 | ||||||||||||
INCOME BEFORE INCOME TAXES | $ 4,377 | $ 3,843 | $ 3,684 | $ 3,995 | $ 3,506 | $ 3,109 | $ 2,631 | $ 2,270 | $ 1,947 | $ 2,036 | $ 2,108 | $ 2,021 | 15,899 | 11,516 | 8,112 |
Income tax expense | 6,261 | 4,408 | 3,061 | ||||||||||||
NET INCOME | $ 2,495 | $ 2,411 | $ 2,272 | $ 2,460 | $ 2,163 | $ 1,909 | $ 1,627 | $ 1,409 | $ 1,226 | $ 1,262 | $ 1,305 | $ 1,258 | 9,638 | 7,108 | 5,051 |
Parent Company [Member] | |||||||||||||||
Dividends from subsidiaries | 1,230 | 1,045 | 200 | ||||||||||||
Management and other fees from subsidiaries | 8,960 | 8,723 | 7,933 | ||||||||||||
Other income | 278 | 228 | 110 | ||||||||||||
Total income | 10,468 | 9,996 | 8,243 | ||||||||||||
Expenses | |||||||||||||||
Interest expense | 46 | 61 | 80 | ||||||||||||
Salaries and employee benefits | 6,296 | 5,536 | 5,321 | ||||||||||||
Occupancy and equipment expense | 327 | 325 | 541 | ||||||||||||
Other operating expenses | 2,739 | 3,215 | 2,387 | ||||||||||||
Total expenses | 9,408 | 9,137 | 8,329 | ||||||||||||
INCOME BEFORE INCOME TAXES | 1,060 | 859 | (86) | ||||||||||||
Income tax expense | (58) | (65) | (107) | ||||||||||||
Income before equity in undistributed net income (loss) of subsidiaries | 1,118 | 924 | 21 | ||||||||||||
Equity in undistributed net income (loss) of subsidiaries | 8,520 | 6,184 | 5,030 | ||||||||||||
NET INCOME | $ 9,638 | $ 7,108 | $ 5,051 |
PARENT COMPANY FINANCIAL INF111
PARENT COMPANY FINANCIAL INFORMATION (Condensed Cash Flow, Parent Only) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||
Net income (loss) | $ 2,495 | $ 2,411 | $ 2,272 | $ 2,460 | $ 2,163 | $ 1,909 | $ 1,627 | $ 1,409 | $ 1,226 | $ 1,262 | $ 1,305 | $ 1,258 | $ 9,638 | $ 7,108 | $ 5,051 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||
Stock-based compensation expense | 334 | 283 | 87 | ||||||||||||
Excess tax benefits from stock-based arrangements | (27) | (3) | |||||||||||||
Net (increase) decrease in other assets | (98) | (870) | 170 | ||||||||||||
Net increase (decrease) in other liabilities | (728) | (15) | (1,044) | ||||||||||||
Net cash provided by operating activities | 18,995 | 15,115 | 13,179 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||
Proceeds from maturities and principal payments of investment securities available for sale | 59,989 | 68,395 | 43,418 | ||||||||||||
Purchases of premises and equipment | (699) | (1,518) | (2,077) | ||||||||||||
Net cash (used in) provided investing activities | (33,734) | (65,348) | (89,528) | ||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||
Excess tax benefits from stock-based arrangements | 27 | 3 | |||||||||||||
Proceeds from the issuance of common stock | 53 | 31,279 | |||||||||||||
Common stock dividends paid | (1,771) | (506) | |||||||||||||
Net cash used in financing activities | 16,866 | 27,821 | 41,482 | ||||||||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | 2,127 | (22,412) | (34,867) | ||||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 73,811 | 96,223 | 131,090 | 73,811 | 96,223 | 131,090 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | 75,938 | 73,811 | 96,223 | 75,938 | 73,811 | 96,223 | |||||||||
Parent Company [Member] | |||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||
Net income (loss) | 9,638 | 7,108 | 5,051 | ||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||
Equity in undistributed net (income) loss of subsidiaries | (8,520) | (6,184) | (5,030) | ||||||||||||
Depreciation and amortization | 288 | 336 | 379 | ||||||||||||
Stock-based compensation expense | 334 | 283 | 87 | ||||||||||||
Excess tax benefits from stock-based arrangements | (27) | (3) | |||||||||||||
Net (increase) decrease in other assets | (669) | (1,108) | (121) | ||||||||||||
Net increase (decrease) in other liabilities | 533 | 328 | 271 | ||||||||||||
Net cash provided by operating activities | 1,577 | 760 | 637 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||
Proceeds from maturities and principal payments of investment securities available for sale | 2,171 | 1,418 | 442 | ||||||||||||
Purchases of securities | (2,032) | (4,054) | (10,112) | ||||||||||||
Purchases of premises and equipment | (175) | (672) | (632) | ||||||||||||
Cash received from merged subsidiary | 3,349 | ||||||||||||||
Investment in subsidiaries | (20,000) | ||||||||||||||
Net cash (used in) provided investing activities | (36) | 41 | (30,302) | ||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||
Repayment of long-term debt | (500) | (500) | (500) | ||||||||||||
Excess tax benefits from stock-based arrangements | 27 | 3 | |||||||||||||
Proceeds from the issuance of common stock | 53 | 31,279 | |||||||||||||
Common stock dividends paid | (1,771) | (506) | |||||||||||||
Net cash used in financing activities | (2,191) | (1,003) | 30,779 | ||||||||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (650) | (202) | 1,114 | ||||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | $ 1,899 | $ 2,101 | $ 987 | 1,899 | 2,101 | 987 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ 1,249 | $ 1,899 | $ 2,101 | $ 1,249 | $ 1,899 | $ 2,101 |
QUARTERLY FINANCIAL RESULTS (Sc
QUARTERLY FINANCIAL RESULTS (Schedule of Quarterly Financial Results) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Interest income | $ 10,505 | $ 10,236 | $ 10,003 | $ 9,908 | $ 10,047 | $ 9,837 | $ 9,542 | $ 9,445 | $ 9,625 | $ 9,686 | $ 9,523 | $ 9,455 | $ 40,652 | $ 38,871 | $ 38,289 |
Net interest income | 9,965 | 9,658 | 9,383 | 9,243 | 9,293 | 9,010 | 8,683 | 8,539 | 8,636 | 8,636 | 8,447 | 8,323 | 38,249 | 35,525 | 34,042 |
Provision for credit losses | 418 | 605 | 375 | 450 | 475 | 410 | 540 | 650 | 650 | 775 | 950 | 975 | 1,848 | 2,075 | 3,350 |
Income (loss) before income taxes | 4,377 | 3,843 | 3,684 | 3,995 | 3,506 | 3,109 | 2,631 | 2,270 | 1,947 | 2,036 | 2,108 | 2,021 | 15,899 | 11,516 | 8,112 |
Net income (loss) | $ 2,495 | $ 2,411 | $ 2,272 | $ 2,460 | $ 2,163 | $ 1,909 | $ 1,627 | $ 1,409 | $ 1,226 | $ 1,262 | $ 1,305 | $ 1,258 | $ 9,638 | $ 7,108 | $ 5,051 |
Basic net income per common share (in dollars per share) | $ 0.20 | $ 0.19 | $ 0.18 | $ 0.19 | $ 0.17 | $ 0.15 | $ 0.13 | $ 0.11 | $ 0.10 | $ 0.10 | $ 0.13 | $ 0.15 | $ 0.76 | $ 0.56 | $ 0.46 |
Diluted net income per common share (in dollars per share) | 0.20 | 0.19 | 0.18 | 0.19 | 0.17 | 0.15 | $ 0.13 | $ 0.11 | 0.10 | 0.10 | 0.13 | 0.15 | 0.76 | 0.56 | $ 0.46 |
Dividends paid per common share (in dollars per share) | $ 0.05 | $ 0.03 | $ 0.03 | $ 0.03 | $ 0.02 | $ 0.02 | $ 0.14 | $ 0.04 | |||||||
Parent Company [Member] | |||||||||||||||
Income (loss) before income taxes | $ 1,060 | $ 859 | $ (86) | ||||||||||||
Net income (loss) | $ 9,638 | $ 7,108 | $ 5,051 |
SEGMENT REPORTING (Schedule of
SEGMENT REPORTING (Schedule of Segment Reporting Information by Segment) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2016USD ($)segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Segment Reporting Information [Line Items] | |||||||||||||||
Number of Operating Segments | segment | 2 | ||||||||||||||
Interest income | $ 10,505 | $ 10,236 | $ 10,003 | $ 9,908 | $ 10,047 | $ 9,837 | $ 9,542 | $ 9,445 | $ 9,625 | $ 9,686 | $ 9,523 | $ 9,455 | $ 40,652 | $ 38,871 | $ 38,289 |
Interest expense | (2,403) | (3,346) | (4,247) | ||||||||||||
Provision for credit losses | (1,848) | (2,075) | (3,350) | ||||||||||||
Noninterest income | 16,645 | 15,416 | 16,781 | ||||||||||||
Noninterest expense | (37,147) | (37,350) | (39,361) | ||||||||||||
Income (loss) before taxes | 4,377 | 3,843 | 3,684 | 3,995 | 3,506 | 3,109 | 2,631 | 2,270 | 1,947 | 2,036 | 2,108 | 2,021 | 15,899 | 11,516 | 8,112 |
Income tax (expense) benefit | (6,261) | (4,408) | (3,061) | ||||||||||||
Net income (loss) | 2,495 | $ 2,411 | $ 2,272 | $ 2,460 | 2,163 | $ 1,909 | $ 1,627 | $ 1,409 | 1,226 | $ 1,262 | $ 1,305 | $ 1,258 | 9,638 | 7,108 | 5,051 |
Total assets | 1,160,271 | 1,135,143 | 1,100,402 | 1,160,271 | 1,135,143 | 1,100,402 | |||||||||
Operating Segments [Member] | Community Banking [Member] | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Interest income | 40,400 | 38,652 | 38,202 | ||||||||||||
Interest expense | (2,403) | (3,346) | (4,247) | ||||||||||||
Provision for credit losses | (1,848) | (2,075) | (3,350) | ||||||||||||
Noninterest income | 7,935 | 7,135 | 6,482 | ||||||||||||
Noninterest expense | (21,054) | (21,480) | (22,776) | ||||||||||||
Net intersegment (expense) income | (8,020) | (7,718) | (7,010) | ||||||||||||
Income (loss) before taxes | 15,010 | 11,168 | 7,301 | ||||||||||||
Income tax (expense) benefit | (5,887) | (4,274) | (2,755) | ||||||||||||
Net income (loss) | 9,123 | 6,894 | 4,546 | ||||||||||||
Total assets | 1,132,863 | 1,107,367 | 1,074,638 | 1,132,863 | 1,107,367 | 1,074,638 | |||||||||
Operating Segments [Member] | Insurance Products and Services [Member] | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Noninterest income | 8,710 | 8,297 | 10,305 | ||||||||||||
Noninterest expense | (6,890) | (6,984) | (8,527) | ||||||||||||
Net intersegment (expense) income | (761) | (781) | (680) | ||||||||||||
Income (loss) before taxes | 1,059 | 532 | 1,098 | ||||||||||||
Income tax (expense) benefit | (432) | (204) | (414) | ||||||||||||
Net income (loss) | 627 | 328 | 684 | ||||||||||||
Total assets | 9,596 | 9,984 | 10,824 | 9,596 | 9,984 | 10,824 | |||||||||
Parent Company [Member] | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Interest expense | (46) | (61) | (80) | ||||||||||||
Income (loss) before taxes | 1,060 | 859 | (86) | ||||||||||||
Income tax (expense) benefit | 58 | 65 | 107 | ||||||||||||
Net income (loss) | 9,638 | 7,108 | 5,051 | ||||||||||||
Total assets | 156,880 | 149,515 | 156,880 | 149,515 | |||||||||||
Parent Company [Member] | Corporate, Non-Segment [Member] | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Interest income | 252 | 219 | 87 | ||||||||||||
Noninterest income | (16) | (6) | |||||||||||||
Noninterest expense | (9,203) | (8,886) | (8,058) | ||||||||||||
Net intersegment (expense) income | 8,781 | 8,499 | 7,690 | ||||||||||||
Income (loss) before taxes | (170) | (184) | (287) | ||||||||||||
Income tax (expense) benefit | 58 | 70 | 108 | ||||||||||||
Net income (loss) | (112) | (114) | (179) | ||||||||||||
Total assets | $ 17,814 | $ 17,792 | $ 14,940 | $ 17,814 | $ 17,792 | $ 14,940 |
SUBSEQUENT EVENTS (Narrative) (
SUBSEQUENT EVENTS (Narrative) (Details) - Northwest Bank [Member] $ in Millions | Jan. 10, 2017USD ($) |
Subsequent Event [Line Items] | |
Cash acquired from acquisition | $ 40 |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Deposit premium percentage related to acquisition | 8.00% |
Subsequent Event [Member] | Core Deposits [Member] | |
Subsequent Event [Line Items] | |
Finite-lived intangible assets acquired | $ 214 |
Subsequent Event [Member] | Performing Loans [Member] | |
Subsequent Event [Line Items] | |
Finite-lived intangible assets acquired | $ 152 |