Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 25, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | FOUR OAKS FINCORP INC | ||
Entity Central Index Key | 1,040,799 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 33,664,216 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 23,817,672 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
ASSETS | ||
Cash and due from banks | $ 17,375 | $ 15,519 |
Interest-earning deposits | 9,380 | 143,008 |
Cash and cash equivalents | 26,755 | 158,527 |
Certificates of deposits held for investment | 23,520 | 27,784 |
Investment securities available-for-sale, at fair value | 70,281 | 64,211 |
Investment securities held-to-maturity, at amortized cost | 65,354 | 81,583 |
Total investment securities | 135,635 | 145,794 |
Loans held for sale | 1,145 | 2,882 |
Loans | 458,313 | 452,256 |
Allowance for loan losses | (9,616) | (9,377) |
Net loans | 448,697 | 442,879 |
Accrued interest receivable | 1,594 | 1,627 |
Bank premises and equipment, net | 12,293 | 11,895 |
FHLB stock | 3,288 | 4,788 |
Investment in life insurance | 14,777 | 14,590 |
Foreclosed assets | 1,760 | 3,782 |
Deferred tax assets, net | 16,679 | 0 |
Other assets | 5,244 | 6,248 |
TOTAL ASSETS | 691,387 | 820,796 |
Deposits: | ||
Noninterest-bearing demand | 132,044 | 251,723 |
Money market, NOW accounts and savings accounts | 180,214 | 175,731 |
Time deposits, $100,000 and over | 151,010 | 143,336 |
Other time deposits | 79,066 | 90,395 |
Total deposits | 542,334 | 661,185 |
Borrowings | 60,000 | 90,000 |
Subordinated debentures | 12,372 | 12,372 |
Subordinated promissory notes | 11,500 | 12,000 |
Accrued interest payable | 437 | 1,704 |
Other liabilities | 4,338 | 2,806 |
TOTAL LIABILITIES | $ 630,981 | $ 780,067 |
Commitments and Contingencies | ||
Shareholders’ equity: | ||
Common stock, $1.00 par value, 80,000,000 shares authorized; 33,595,812 and 32,032,327 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively | $ 33,596 | $ 32,032 |
Additional paid-in capital | 31,666 | 32,520 |
Accumulated deficit | (4,571) | (24,579) |
Accumulated other comprehensive (loss) income | (285) | 756 |
Total shareholders' equity | 60,406 | 40,729 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 691,387 | $ 820,796 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Shareholders’ equity: | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, shares issued | 33,595,812 | 32,032,327 |
Common stock, shares outstanding | 33,595,812 | 32,032,327 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Interest and dividend income: | ||
Loans, including fees | $ 25,208 | $ 25,331 |
Taxable investments | 3,299 | 2,401 |
Dividends | 331 | 326 |
Interest-earning deposits | 528 | 747 |
Total interest and dividend income | 29,366 | 28,805 |
Interest expense: | ||
Deposits | 2,446 | 2,872 |
Borrowings | 3,059 | 3,997 |
Subordinated debentures | 250 | 199 |
Subordinated promissory notes | 1,023 | 1,020 |
Total interest expense | 6,778 | 8,088 |
Net interest income | 22,588 | 20,717 |
Provision for loan losses | 0 | 7,954 |
Net interest income after provision for loan losses | 22,588 | 12,763 |
Non-interest income: | ||
Service charges on deposit accounts | 1,566 | 1,672 |
Other service charges, commissions and fees | 3,664 | 3,442 |
Gains on sale of investment securities available-for-sale, net | 265 | 265 |
Gains on sale of loans held for sale | 3,205 | 1,150 |
Recovery of impairment loss and gain on redemption of equity securities | 0 | 298 |
Income from investment in life insurance | 187 | 210 |
Indemnification from third party payment processor clients | 445 | 3,872 |
Other non-interest income | 225 | 205 |
Total non-interest income | 9,557 | 11,114 |
Non-interest expense: | ||
Salaries | 12,190 | 9,306 |
Employee benefits | 2,072 | 1,748 |
Occupancy expenses | 1,342 | 1,311 |
Equipment expenses | 707 | 1,134 |
Professional and consulting fees | 2,500 | 3,419 |
FDIC assessments | 736 | 1,835 |
Foreclosed asset-related costs, net | 393 | 1,931 |
Collection expenses | 337 | 630 |
Prepayment of FHLB borrowings | 2,089 | 1,487 |
Other operating expenses | 6,251 | 5,265 |
Total non-interest expense | 28,617 | 28,066 |
Income (loss) before income taxes | 3,528 | (4,189) |
Income tax benefit | (16,480) | 0 |
Net income (loss) | $ 20,008 | $ (4,189) |
Basic net income (loss) per common share (in dollars per share) | $ 0.62 | $ (0.24) |
Diluted net income (loss) per common share (in dollars per share) | $ 0.62 | $ (0.24) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 20,008 | $ (4,189) |
Securities available-for-sale: | ||
Unrealized holding (losses) gains on available-for-sale securities | (882) | 1,348 |
Tax effect | 203 | 0 |
Reclassification of gains recognized in net income | (265) | (265) |
Tax effect | 0 | 0 |
Amortization of unrealized losses on investment securities transferred from available-for-sale to held-to-maturity | (59) | (93) |
Tax effect | (38) | 0 |
Total other comprehensive (loss) income | (1,041) | 990 |
Comprehensive income (loss) | $ 18,967 | $ (3,199) |
Consolidated Statements of Shar
Consolidated Statements of Shareholders’ Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Beginning balance (in shares) at Dec. 31, 2013 | 7,977,657 | ||||
Beginning balance at Dec. 31, 2013 | $ 21,623 | $ 7,978 | $ 34,269 | $ (20,390) | $ (234) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (4,189) | (4,189) | |||
Other comprehensive income (loss) | $ 990 | 990 | |||
Issuance of common stock (in shares) | 24,000,000 | 24,054,670 | |||
Issuance of common stock | $ 22,242 | $ 24,054 | (1,812) | ||
Stock based compensation | 63 | 63 | |||
Ending balance (in shares) at Dec. 31, 2014 | 32,032,327 | ||||
Ending balance at Dec. 31, 2014 | 40,729 | $ 32,032 | 32,520 | (24,579) | 756 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 20,008 | 20,008 | |||
Other comprehensive income (loss) | (1,041) | (1,041) | |||
Issuance of common stock (in shares) | 117,023 | ||||
Issuance of common stock | 170 | $ 117 | 53 | ||
Stock based compensation | 565 | 565 | |||
Issuance of restricted stock (in shares) | 1,521,000 | ||||
Issuance of restricted stock | 0 | $ 1,521 | (1,521) | ||
Forfeiture of restricted stock (in shares) | (60,000) | ||||
Forfeiture of restricted stock | 0 | $ (60) | 60 | ||
Stock withheld for payment of taxes (in shares) | (14,538) | ||||
Stock withheld for payment of taxes | (25) | $ (14) | (11) | ||
Ending balance (in shares) at Dec. 31, 2015 | 33,595,812 | ||||
Ending balance at Dec. 31, 2015 | $ 60,406 | $ 33,596 | $ 31,666 | $ (4,571) | $ (285) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 20,008 | $ (4,189) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Provision for loan losses | 0 | 7,954 |
Deferred income tax benefit | (16,514) | 0 |
Provision for depreciation and amortization | 684 | 646 |
Net amortization of bond premiums and discounts | 1,153 | 1,167 |
Stock based compensation | 565 | 63 |
Gain on sale of investment securities | (265) | (265) |
Loss on disposition of bank premises and equipment | 48 | 0 |
Gain on sale of foreclosed assets, net | (73) | (193) |
Valuation adjustment on foreclosed assets | 344 | 1,772 |
Earnings on investment in bank-owned life insurance | (187) | (210) |
Gain on sale of mortgage loans held for sale | (644) | (571) |
Gain on sale of problem loans held for sale | (3,205) | (1,150) |
Originations of mortgage loans held for sale | (29,060) | (24,440) |
Proceeds from sale of loans held for sale | 37,003 | 33,418 |
Recovery of impairment loss on redemption of securities | 0 | (298) |
Changes in assets and liabilities: | ||
Other assets | 1,004 | (153) |
Accrued interest receivable | 33 | (51) |
Other liabilities | 1,532 | (1,483) |
Accrued interest payable | (1,267) | 62 |
Net cash provided by operating activities | 11,159 | 12,079 |
Cash flows from investing activities: | ||
Proceeds from sales and calls of investment securities available-for-sale | 8,324 | 22,737 |
Proceeds from paydowns of investment securities available-for-sale | 6,008 | 1,065 |
Proceeds from paydowns of investment securities held-to-maturity | 15,430 | 15,323 |
Purchases of investment securities available-for-sale | (21,697) | (53,787) |
Redemption of certificates of deposits held for investment | 4,264 | 4,066 |
Redemption of FHLB stock | 1,500 | 1,288 |
Net (increase) decrease in loans outstanding | (9,414) | 17,863 |
(Purchase) disposal of bank premises and equipment | (1,130) | 29 |
Proceeds from sales of foreclosed assets | 2,990 | 5,428 |
Net cash provided by investing activities | 6,275 | 14,012 |
Cash flows from financing activities: | ||
Net repayments from borrowings | (30,000) | (22,000) |
Net (decrease) increase in deposit accounts | (118,851) | 3,565 |
Proceeds from issuance of common stock | 170 | 22,242 |
Net repayments of subordinated promissory notes | (500) | 0 |
Shares withheld for payment of taxes | (25) | 0 |
Net cash (used in) provided by financing activities | (149,206) | 3,807 |
Change in cash and cash equivalents | (131,772) | 29,898 |
Cash and cash equivalents at beginning of period | 158,527 | 128,629 |
Cash and cash equivalents at end of period | 26,755 | 158,527 |
Supplemental disclosures of cash flow information: | ||
Interest paid on deposits and borrowings | 8,045 | 8,026 |
Income taxes paid | 0 | 110 |
Supplemental disclosures of noncash investing and financing activities: | ||
Unrealized (losses) gains on investment securities available-for-sale | (1,147) | 1,248 |
Loans transferred from held for investment to held for sale | 2,618 | 13,193 |
Transfer of loans to foreclosed assets | 1,239 | 2,287 |
Loans transferred from held for sale to held for investment | 261 | 3,054 |
Amortization of net losses on investment securities transferred to held-to-maturity | $ (59) | $ (93) |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Four Oaks Fincorp, Inc. (the "Company") was incorporated under the laws of the State of North Carolina on February 5, 1997. The Company’s primary function is to serve as the holding company for its owned subsidiaries, Four Oaks Bank & Trust Company, Inc. (the "Bank") and Four Oaks Mortgage Services, L.L.C (inactive). The Bank operates sixteen offices in eastern and central North Carolina, and its primary source of revenue is derived from loans to customers and from its securities portfolio. The loan portfolio is comprised mainly of real estate, commercial, and consumer loans. These loans are primarily collateralized by residential and commercial properties, commercial equipment, and personal property. Basis of Presentation The consolidated financial statements include the accounts and transactions of the Company, a bank holding company incorporated under the laws of the State of North Carolina, and its wholly-owned subsidiaries, the Bank, and Four Oaks Mortgage Services, L.L.C., which has been inactive since September 30, 2012. All significant intercompany transactions have been eliminated. In March 2006, the Company formed Four Oaks Statutory Trust I, a wholly owned Delaware statutory business trust (the “Trust”), for the sole purpose of issuing Trust Preferred Securities (as defined in Note H - Trust Preferred Securities). The Trust is not included in the consolidated financial statements of the Company. Certain amounts previously presented in the Company's Consolidated Financial Statements for the prior periods have been reclassified to conform to current classifications. All such reclassifications had no impact on the prior period's Statements of Operations, Comprehensive Income (Loss), or Shareholders' Equity as previously reported. Use of Estimates Preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, fair value of impaired loans, fair value of foreclosed assets, other than temporary impairment of investment securities available-for-sale and held-to-maturity, and the valuation allowance against deferred tax assets. Cash and Cash Equivalents For the purpose of presentation in the consolidated statements of cash flows, cash and cash equivalents are defined as those amounts included in the balance sheet captions cash and due from banks, and interest-earning deposits. Federal regulations require institutions to set aside specified amounts of cash as reserves against transactions and time deposits. As of December 31, 2015 , the daily average gross reserve requirement was $0 due to the amount of cash on the balance sheet. Investment Securities Investment securities are classified into three categories: (1) Held-to-Maturity - Debt securities that the Company has the positive intent and the ability to hold to maturity are classified as held-to-maturity and reported at amortized cost. (2) Trading - Debt and equity securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings. (3) Available-for-Sale - Debt and equity securities not classified as either securities held-to-maturity or trading securities are reported at fair value, with unrealized gains and losses excluded from earnings and reported, net of income taxes, as other comprehensive income, a separate component of shareholders' equity. Gains and losses on sales of securities, computed based on specific identification of adjusted cost of each security, are included in income at the time of the sale. Premiums and discounts are amortized into interest income using a method that approximates the interest method over the period to maturity. Transfers of securities into held-to-maturity from available-for-sale are made at fair value as of the transfer date. The unrealized gain or loss as of the transfer date is retained in accumulated other comprehensive income and in the carrying value of the held-to-maturity securities. The unrealized gain or loss is then amortized over the remaining life of the securities. Each investment security in a loss position is evaluated for other-than-temporary impairment on at least a quarterly basis. The review includes an analysis of the facts and circumstances of each individual investment such as: (1) the length of time and the extent to which the fair value has been below cost, (2) changes in the earnings performance, credit rating, asset quality, or business prospects of the issuer, (3) the ability of the issuer to make principal and interest payments, (4) changes in the regulatory, economic, or technological environment of the issuer, and (5) changes in the general market condition of either the geographic area or industry in which the issuer operates. Regardless of these factors, if we have developed a plan to sell the security or it is likely that we will be forced to sell the security in the near future, then the impairment is considered other-than-temporary and the carrying value of the security is permanently written down to the current fair value with the difference between the new carrying value and the amortized cost charged to earnings. If we do not intend to sell the security and it is not more likely than not that we will be required to sell the security before recovery of its amortized cost basis less any current period credit loss, the other-than-temporary impairment is separated into the following: (1) the amount representing the credit loss and (2) the amount related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings and the amount of the total other-than-temporary impairment related to other factors is recognized in other comprehensive income, net of applicable taxes. Loans Held for Sale As part of the asset resolution plan (the "Asset Resolution Plan") executed during 2014, the Company transferred loans held for investment to loans held for sale in anticipation of near term loan sales. The Asset Resolution Plan was completed in the fourth quarter of 2015 and all loans not sold were transferred from loans held for sale to loans held for investment. Other loans held for sale generally represent single-family, residential first mortgage loans on a pre-sold basis originated by our mortgage division. Commitments to sell the residential first mortgage loans are made after the intent to proceed with mortgage applications are initiated with borrowers, and all necessary components of the loan are approved according to secondary market underwriting standards of the investor that purchases the loan. Upon closing, these loans, together with their servicing rights, are sold to mortgage loan investors under prearranged terms. Loans held for sale are measured at the lower of cost or fair value on an aggregated basis within the consolidated balance sheet under the caption “loans held for sale”. Rate Lock Commitments The Company enters into commitments to originate loans whereby the interest rate on the loan is determined prior to funding (rate lock commitments). As required by Accounting Standard Codification ("ASC") ASC 815, Derivatives and Hedging , rate lock commitments related to the origination of mortgage loans held for sale and the corresponding forward loan sale commitments are considered to be derivatives. The commitments are generally for periods of 60 days and are at market rates. In order to mitigate the risk from interest rate fluctuations, the Company enters into forward loan sale commitments on a “best efforts” basis while the loan is in the pipeline. Interest rate lock commitments and forward sales commitments are not material to the financial statements for any period presented. Loans Loans are stated at the amount of unpaid principal, reduced by an allowance for loan losses. Interest on all loan classifications is calculated by using the simple interest method on daily balances of the principal amount outstanding. Loan origination fees are deferred, as well as certain direct loan origination costs. Such costs and fees are recognized as an adjustment to yield over the contractual lives of the related loans utilizing the interest method. For all classes of loans, a loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect full repayment of all principal and accrued interest when due either under the terms of the original loan agreement or within reasonably modified contractual terms. Once a loan has been determined to meet the definition of impairment, the amount of that impairment is measured through one of the following methods; a calculation of the net present value of the expected future cash flows of the loan discounted by the effective interest rate of the loan or by determining the fair market value of the underlying collateral securing the loan. If a deficit is calculated, the amount of the measured impairment results in the establishment of a specific valuation allowance or charge-off, and is incorporated into the Bank's allowance for loan and lease losses ("ALLL"). Groups of small dollar impaired loans with similar risk characteristics are evaluated for impairment collectively. Income Recognition on Impaired and Nonaccrual Loans Loans, including impaired loans, are generally classified as nonaccrual when doubts arise regarding the full collectibility of principal or interest and we are therefore uncertain that the borrower can satisfy the contractual terms of the loan agreement. In addition our policy is to place a loan on nonaccrual status at the point when the loan becomes past due 90 days unless there is sufficient documentation to establish that the loan is well secured and in the process of collection. If a loan or a portion of a loan is classified as doubtful or is partially charged-off, the loan is generally classified as nonaccrual. While a loan is classified as nonaccrual and the future collectibility of the recorded loan balance is doubtful, collections of interest and principal are generally applied as a reduction to the principal outstanding, except in the case of loans with scheduled amortizations where the payment is generally applied to the oldest payment due. When the future collectibility of the recorded loan balance is expected, interest income may be recognized on a cash basis. In the case where a nonaccrual loan had been partially charged-off, recognition of interest on a cash basis is limited to that which would have been recognized on the recorded loan balance at the contractual interest rate. Receipts in excess of that amount are recorded as recoveries to the allowance for loan losses until prior charge-offs have been fully recovered. Allowance for Loan Losses The allowance for loan losses is established through periodic charges to earnings in the form of a provision for loan losses. Increases to the allowance for loan losses occur as a result of provisions charged to operations and recoveries of amounts previously charged-off, and decreases to the allowance occur when loans are charged-off because management believes that the uncollectibility of a loan balance is confirmed. Management evaluates the adequacy of our allowance for loan losses on at least a quarterly basis. The evaluation of the adequacy of the allowance for loan losses involves the consideration of loan growth, loan portfolio composition and industry diversification, historical loan loss experience, current delinquency levels, adverse conditions that might affect a borrower’s ability to repay the loan, estimated value of underlying collateral, prevailing economic conditions and all other relevant factors derived from our history of operations. Additionally, regulatory agencies review our allowance for loan losses and may require additional provisions for estimated losses based on judgments that differ from those of management. Management has developed a model for evaluating the adequacy of the allowance for loan losses. The model uses the Company’s internal grading system to quantify the risk of each loan. The grade is initially assigned by the lending officer and/or the credit administration function. The internal grading system is reviewed and tested periodically by an independent internal loan review function as well as an independent external credit review firm. The testing process involves the evaluation of a sample of new loans, loans having been identified as possessing potential weakness in credit quality, and past due and nonaccrual loans to determine the ongoing effectiveness of the internal grading system. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company's allowance for loan losses. Such agencies may require us to recognize adjustments to the allowance based on their judgments of information available to them at the time of their examination. The grading system is comprised of seven risk categories for active loans. Grades 1 through 4 demonstrate various degrees of risk, but each is considered to have the capacity to perform in accordance with the terms of the loan. Loans possessing a grade of 5 exhibit characteristics which indicate higher risk that the loan may not be able to perform in accordance with the terms of the loan. Grade 6 loans are considered substandard and are generally impaired. Grade 7 loans are considered doubtful and would be included in nonaccrual loans. Grade 8 loans are considered uncollectable and identified as a confirmed loss. Loans can also be classified as non-accrual, troubled debt restructuring ("TDR"), or otherwise impaired, all of which are considered impaired. Once a loan has been determined to meet the definition of impairment, the amount of that impairment is measured through one of the following methods: a calculation of the net present value of the expected future cash flows of the loan discounted by the effective interest rate of the loan or by determining the fair market value of the underlying collateral securing the loan. If the fair market value of collateral method is selected for use, an updated collateral value is generally obtained based on where the loan is in the collection process and the age of the existing appraisal. Groups of small dollar impaired loans with similar risk characteristics are evaluated for impairment collectively. Other impaired loans are then analyzed individually to determine the net value of collateral or cash flows and an estimate of potential loss. The net value of collateral per our analysis is determined using various subjective discounts, selling expenses and a review of the assumptions used to generate the current appraisal. If collection is deemed to be collateral dependent then the deficiency is generally charged off. Appraised values on real estate collateral are subject to constant change and management makes certain assumptions about how the age of an appraisal impacts current value. Impaired loans are re-evaluated periodically to determine the adequacy of specific reserves and charge-offs. Groups of small dollar impaired loans with similar risk characteristics may be evaluated for impairment collectively. Loans that are not assessed for specific reserves under FASB ASC 310-10 are reserved for under FASB ASC 450. The loans analyzed under FASB ASC 450 are assigned a reserve based on a quantitative factor and a qualitative factor. The quantitative factor is based on historical charge-off levels and is adjusted for the loan's risk grade. The qualitative factors address loan growth, loan portfolio composition and industry diversification, historical loan loss experience, current delinquency levels, prevailing economic conditions and all other relevant factors derived from our history of operations. Together these two components comprise the ASC 450, or general reserve. During 2015, the Company enhanced its ALLL methodology by increasing the look back period used to calculate historical loss rates for the quantitative ASC 450 reserve. In prior periods, the Company calculated historical loss rates from the most recent three years on a rolling quarter basis but this was increased to the most recent five years on a rolling quarter basis. This change was made in an effort to provide a more precise estimate of potential losses and to provide for the highest base charge-off rate regardless of whether the historical charge-offs are improving or declining. In addition, the Bank assigns a different percentage ("multiplier") of the base charge-off rate to the balances for each risk grade within a loan category to reflect the varied risk of charge-off for each. The standard multipliers range from 0% for a risk grade 1 and 300% for a risk grade 6 that is unimpaired. In addition, categories that have a concentrated level of charge-offs associated with a particular risk grade could have an additional reserve factor of 50% to 100% added to that particular risk grade. Categories that have had historically high charge-offs also have an additional reserve factor between 25% to 100% added to the risk grade 5s and 6s to account for the additional risk in those categories. The reserve amount by risk grade is calculated and then combined for a blended quantitative reserve factor for each loan category. The allowance for loan losses represents management’s estimate of an appropriate amount to provide for known and inherent losses in the loan portfolio in the normal course of business. While management believes the methodology used to establish the allowance for loan losses incorporates the best information available at the time, future adjustments to the level of the allowance may be necessary and the results of operations could be adversely affected should circumstances differ substantially from the assumptions initially used. We believe that the allowance for loan losses was established in conformity with generally accepted accounting principles. However, upon examination by various regulatory agencies, adjustments to the allowance may be required. Likewise, there can be no assurance that the existing allowance for loan losses is adequate should there be deterioration in the quality of any loans or changes in any of the factors discussed above. Any increases in the provision for loan losses resulting from such deterioration or change in condition could adversely affect our financial condition and results of operations. Bank Premises and Equipment Land is carried at cost. Buildings, furniture, and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method based on the estimated useful lives of assets. Useful lives range from 5 to 10 years for furniture and equipment and 40 years for buildings. Expenditures for repairs and maintenance are charged to expense as incurred. Stock in Federal Home Loan Bank of Atlanta The Company owned Federal Home Loan Bank of Atlanta (“FHLB”) stock that it accounts for under the cost method. Based on the continued payment of dividends and that redemption of this stock has historically been at par, management believes that its investment in FHLB stock was not other-than-temporarily impaired as of December 31, 2015 or December 31, 2014 . However, there can be no assurance that the impact of recent or future legislation on the Federal Home Loan Banks will not cause a decrease in the value of the FHLB stock held by the Company. Foreclosed Assets Assets acquired as a result of foreclosure are valued at fair value, less estimated selling costs, at the date of foreclosure establishing a new cost basis. After foreclosure, valuations of the property are periodically performed by management and the assets are carried at the lower of cost or fair value minus estimated costs to sell. Losses from the acquisition of property in full or partial satisfaction of debt are treated as credit losses. Routine holding costs, subsequent declines in value, and gains or losses on disposition are included in other income and expense. Income Taxes Accrued taxes represent the estimated amount payable to or receivable from taxing jurisdictions, either currently or in the future, and are reported, on a net basis, as a component of “other assets” in the consolidated balance sheets. The calculation of the Company’s income tax expense is complex and requires the use of many estimates and judgments in its determination. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. These temporary differences consist primarily of the allowance for loan losses, differences in the financial statement and income tax basis in premises and equipment and differences in financial statement and income tax basis in accrued liabilities. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that the tax benefits will not be fully realized. Management’s determination of the realization of the net deferred tax asset is based upon management’s judgment of various future events and uncertainties, including the timing and amount of future income and the implementation of various tax plans to maximize realization of the deferred tax asset. From time to time, management bases the estimates of related tax liabilities on its belief that future events will validate management’s current assumptions regarding the ultimate outcome of tax-related exposures. While the Company has obtained the opinion of advisors that the anticipated tax treatment of these transactions should prevail and has assessed the relative merits and risks of the appropriate tax treatment, examination of the Company’s income tax returns, changes in tax law and regulatory guidance may impact the treatment of these transactions and resulting provisions for income taxes. Stock Compensation Plans The Company accounts for stock based awards granted to employees using the fair value method. The cost of employee services received in exchange for an award of equity instruments in the financial statements over the period the employee is required to perform the services in exchange for the award (usually the vesting period). The cost of employee services received in exchange for an award is based on the grant-date fair value of the award. Excess tax benefits are reported as financing cash inflows, rather than as a reduction of taxes paid, which is included within operating cash flows. Recent Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) , which will require lessees to be recorded as an asset on the balance sheet for the right to use the leased asset and a liability for the corresponding lease obligation for leases with terms of more than 12 months. The accounting treatment for lessors will remain relatively unchanged. The ASU also requires additional qualitative and quantitative disclosures related to the nature, timing and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . This update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The existing recognition and measurement guidance for debt issuance costs are not affected by this update. ASU 2015-03 is effective for annual and interim reporting periods beginning after December 15, 2015. The Company does not believe the adoption of this update will have a material impact on the Company’s consolidated financial statements. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . This update requires management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date the financial statements are issued. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that an entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. If the substantial doubt is alleviated as a result of consideration of management’s plans, the entity should disclose information that enables financial statement users to understand the principal conditions or events that raised substantial doubt, management’s evaluation of the conditions and management’s plans to alleviate the substantial doubt. If substantial doubt exists about an entity’s ability to continue as a going concern, and the substantial doubt is not alleviated after consideration of management’s plans, an entity should include a statement in the footnotes indicating that there is substantial doubt about the entity’s ability to continue as a going concern. The amendments in this update become effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company does not believe the adoption of this update will have a material impact on the Company’s consolidated financial statements. In August 2014, the FASB issued ASU No. 2014-14, Receivables–Troubled Debt Restructurings by Creditors (Subtopic 310-40): Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure . This update addresses classification of government-guaranteed mortgage loans, including those where guarantees are offered by the Federal Housing Administration (“FHA”), the U.S. Department of Housing and Urban Development (“HUD”), and the U.S. Department of Veterans Affairs (“VA”). Although current accounting guidance stipulates proper measurement and classification in situations where a creditor obtains from a debtor, assets in satisfaction of a receivable (such as through foreclosure), current guidance does not specify how to measure and classify foreclosed mortgage loans that are government-guaranteed. Under the provisions of this update, a creditor would derecognize a mortgage loan that has been foreclosed upon, and recognize a separate receivable if the following conditions are met: (1) The loan has a government guarantee that is not separable from the loan before foreclosure, (2) At the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim, and (3) At the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. The amendments within this update are effective for annual and interim periods beginning after December 15, 2014. The adoption of the new guidance did not have a material impact on the Company's consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) which supersedes the revenue recognition requirements of Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition , and most industry-specific guidance on revenue recognition throughout the ASC. The new standard is principles based and provides a five step model to determine when and how revenue is recognized. The core principle of the new standard is that revenue should be recognized when a company transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard also requires disclosure of qualitative and quantitative information surrounding the amount, nature, timing and uncertainty of revenues and cash flows arising from contracts with customers. On August 12, 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which defers the effective date of the new revenue recognition standard by one year. Based on ASU 2015-14, public organizations would apply the new revenue standard to annual reporting periods beginning after December 15, 2017. Early adoption is permitted, but not before the original effective date (i.e., interim and annual reporting periods beginning after December 15, 2016). The Company is currently evaluating the impact of adoption of the new standard on its consolidated financial statements. In January 2014, the FASB issued ASU No. 2014-04, Receivables–Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure. This update clarifies that an in-substance repossession or foreclosure occurs upon either the creditor obtaining legal title to the residential real estate property or the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. This amendment is effective for annual and interim periods beginning after December 15, 2014. The adoption of the new guidance did not have a material impact on the Company's consolidated financial statements. Other accounting standards that have been issued by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations and cash flows. From time to time the FASB issues exposure drafts for proposed statements of financial accounting standards. Such exposure drafts are subject to comment from the public, to revisions by the FASB and to final issuance by the FASB as statements of financial accounting standards. Management considers the effect of the proposed statements on the consolidated financial statements of the Company and monitors the status of changes to and proposed effective dates of exposure drafts. |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | NET INCOME (LOSS) PER SHARE Basic net income (loss) per share represents earnings credited to common shareholders divided by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate solely to outstanding stock options. Basic and diluted net income (loss) per common share have been computed based upon net income (loss) as presented in the accompanying consolidated statements of operations divided by the weighted average number of common shares outstanding or assumed to be outstanding as summarized below (amounts in thousands, except share data) : Twelve Months Ended December 31, 2015 2014 Net income (loss) available to common shareholders $ 20,008 $ (4,189 ) Weighted average number of common shares - basic 32,103,671 17,484,541 Effect of dilutive stock options 15,776 — Effect of dilutive restricted stock awards 128,276 — Weighted average number of common shares - dilutive 32,247,723 17,484,541 Basic earnings (loss) per common share $ 0.62 $ (0.24 ) Diluted earnings (loss) per common share $ 0.62 $ (0.24 ) Anti-dilutive awards 147,655 227,407 During 2014, 24.0 million shares of common stock were issued in connection with the Company's shareholder rights offering and concurrent private placement standby offering in which a net of $22.2 million of capital was raised. Consequently, the diluted weighted average shares of common stock increased 14.8 million for the year ended December 31, 2015 to 32.2 million as compared to 17.5 million at December 31, 2014 . |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 12 Months Ended |
Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES | INVESTMENT SECURITIES The amortized cost, gross unrealized gains, gross unrealized losses, and fair values of securities available-for-sale as of December 31, 2015 and 2014 are as follows (amounts in thousands): Securities Available-for-Sale At December 31 2015 2014 Amortized Gross Gross Fair Amortized Gross Gross Fair Taxable municipal securities $ 24,789 $ 225 $ 447 $ 24,567 $ 16,412 $ 686 $ 20 $ 17,078 Mortgage-backed securities GNMA 13,512 68 50 13,530 16,204 163 103 16,264 FNMA & FHLMC 32,024 — 351 31,673 30,992 — 134 30,858 Other debt securities 500 — — 500 — — — — Equity securities 11 — — 11 11 — — 11 Total $ 70,836 $ 293 $ 848 $ 70,281 $ 63,619 $ 849 $ 257 $ 64,211 The amortized cost, gross unrealized gains, gross unrealized losses, and fair values of securities held-to-maturity as of December 31, 2015 and 2014 are as follows ( amounts in thousands): Securities Held-to-Maturity At December 31 2015 2014 Amortized Gross Gross Fair Amortized Gross Gross Fair Taxable municipal securities $ 3,531 $ 1 $ 20 $ 3,512 $ 3,584 $ — $ 28 $ 3,556 Mortgage-backed securities GNMA 59,185 509 230 59,464 74,482 887 244 75,125 FNMA 2,638 19 — 2,657 3,517 44 — 3,561 Total $ 65,354 $ 529 $ 250 $ 65,633 $ 81,583 $ 931 $ 272 $ 82,242 Management evaluates each quarter whether unrealized losses on securities represent impairment that is other than temporary. For debt securities, the Company considers its intent to sell the securities or if it is more likely than not that the Company will be required to sell the securities. If such impairment is identified, based upon the intent to sell or the more likely than not threshold, the carrying amount of the security is reduced to fair value with a charge to earnings. Upon the result of the aforementioned review, management then reviews for potential other than temporary impairment based upon other qualitative factors. In making this evaluation, management considers changes in market rates relative to those available when the security was acquired, changes in market expectations about the timing of cash flows from securities that can be prepaid, performance of the debt security, and changes in the market's perception of the issuer's financial health and the security's credit quality. If determined that a debt security has incurred other than temporary impairment, then the amount of the credit related impairment is determined. If a credit loss is evident, the amount of the credit loss is charged to earnings and the non-credit related impairment is recognized through other comprehensive income. The unrealized gains and losses on securities at December 31, 2015 resulted from changing market interest rates compared to the yields available at the time the underlying securities were purchased. Twenty of fifty-four Government National Mortgage Association ("GNMA") mortgage-backed securities ("MBS"), eleven of fourteen Federal National Mortgage Association ("FNMA") and Federal Home Loan Mortgage Corporation ("FHLMC") MBS, and twenty-nine of thirty-nine taxable municipal securities contained net unrealized losses at December 31, 2015 . Management identified no impairment related to credit quality. At December 31, 2015 , management had the intent and ability to hold impaired securities and no impairment was evaluated as other than temporary. As a result, no other than temporary impairment losses were recognized during the twelve months ended December 31, 2015 . The following tables reflect the gross unrealized losses and fair values of securities available-for-sale, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at the dates presented. (amounts in thousands): Securities Available-for-Sale 12/31/2015 Less Than 12 Months 12 Months or More Total Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Taxable municipal securities $ 16,888 $ 447 $ — $ — $ 16,888 $ 447 Mortgage-backed securities GNMA 10,010 50 — — 10,010 50 FNMA & FHLMC 31,673 351 — — 31,673 351 Total temporarily impaired securities $ 58,571 $ 848 $ — $ — $ 58,571 $ 848 Securities Available-for-Sale 12/31/2014 Less Than 12 Months 12 Months or More Total Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Taxable municipal securities $ 2,580 $ 20 $ — $ — $ 2,580 $ 20 Mortgage-backed securities GNMA 7,425 103 — — 7,425 103 FNMA & FHLMC 30,858 134 — — 30,858 134 Total temporarily impaired securities $ 40,863 $ 257 $ — $ — $ 40,863 $ 257 The following tables reflect the gross unrealized losses and fair values of securities held-to-maturity, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at the dates presented. (amounts in thousands): Securities Held-to-Maturity 12/31/2015 Less Than 12 Months 12 Months or More Total Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Taxable municipal securities $ 3,325 $ 20 $ — $ — $ 3,325 $ 20 Mortgage-backed securities GNMA 20,784 116 5,130 114 25,914 230 Total temporarily impaired securities $ 24,109 $ 136 $ 5,130 $ 114 $ 29,239 $ 250 Securities Held-to-Maturity 12/31/2014 Less Than 12 Months 12 Months or More Total Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Taxable municipal securities $ — $ — $ 3,556 $ 28 $ 3,556 $ 28 Mortgage-backed securities GNMA 7,594 41 12,240 203 19,834 244 Total temporarily impaired securities $ 7,594 $ 41 $ 15,796 $ 231 $ 23,390 $ 272 The following table shows a roll forward of the amount related to credit losses recognized on debt securities held by the Company for which a portion of an other-than-temporary impairment was recognized in other comprehensive income (amounts in thousands): 2015 2014 Balance of credit losses on debt securities at the beginning of the period $ — $ 75 Income received on other-than-temporary impaired debt securities — (75 ) Balance of credit losses on debt securities at the end of the period $ — $ — The amortized cost and fair value of available-for-sale and held-to-maturity securities at December 31, 2015 by expected maturities are shown below (amounts in thousands). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Available-for-Sale Taxable municipal securities Mortgage-backed securities - GNMA Mortgage-backed securities - FNMA & FHLMC Other Debt Securities Amortized Fair Value Amortized Fair Value Amortized Fair Value Amortized Cost Fair Value Due within one year $ — $ — $ — $ — $ — $ — $ — $ — Due after one year through five years — — — — — — — — Due after five years through ten years — — — — — — 500 500 Due after ten years 24,789 24,567 13,512 13,530 32,024 31,673 — — Total Munis, GNMA, FNMA & FHLMC and Other Debt securities $ 24,789 $ 24,567 $ 13,512 $ 13,530 $ 32,024 $ 31,673 $ 500 $ 500 Securities without a specific maturity: Equity securities 11 11 Total other securities $ 11 $ 11 Held-to-Maturity Taxable municipal securities Mortgage-backed securities - GNMA Mortgage-backed securities - FNMA Amortized Fair Value Amortized Fair Value Amortized Fair Value Due within one year $ 100 $ 100 $ — $ — $ — $ — Due after one year through five years 2,367 2,351 — — — — Due after five years through ten years 1,064 1,061 5,291 5,425 2,638 2,657 Due after ten years — — 53,894 54,039 — — Total Munis, GNMA, and FNMA securities $ 3,531 $ 3,512 $ 59,185 $ 59,464 $ 2,638 $ 2,657 Securities with a carrying value of approximately $61.1 million and $101.8 million at December 31, 2015 and 2014 , respectively, were pledged to secure public deposits and for other purposes required or permitted by law. Sales and calls of securities available-for-sale during 2015 and 2014 of $8.3 million and $22.7 million generated gross realized gains of $264,771 and $265,087 , respectively, and no gross realized losses for 2015 and 2014 . |
LOANS AND ALLOWANCE FOR LOAN LO
LOANS AND ALLOWANCE FOR LOAN LOSSES | 12 Months Ended |
Dec. 31, 2015 | |
Loans and Leases Receivable Disclosure [Abstract] | |
LOANS AND ALLOWANCE FOR LOAN LOSSES | LOANS AND ALLOWANCE FOR LOAN LOSSES The classification of loan segments as of December 31, 2015 and 2014 are summarized as follows (amounts in thousands): 2015 2014 Commercial and industrial $ 23,163 $ 24,286 Commercial construction and land development 50,510 53,642 Commercial real estate 208,737 200,510 Residential construction 36,618 28,130 Residential mortgage 128,442 135,022 Consumer 6,638 7,248 Other 1,257 499 Consumer credit cards 2,240 2,276 Business credit cards 1,168 1,251 458,773 452,864 Net deferred loan fees (460 ) (608 ) Allowance for loan losses (9,616 ) (9,377 ) Total net loans $ 448,697 $ 442,879 Loans held for sale $ 1,145 $ 2,882 Nonperforming assets Nonperforming assets at December 31, 2015 and 2014 consist of the following (amounts in thousands): 2015 2014 Loans past due ninety days or more and still accruing $ 65 $ 17 Nonaccrual loans 6,598 8,259 Loans held for sale - nonperforming — 1,865 Foreclosed assets 1,760 3,782 Total $ 8,423 $ 13,923 Related Party Loans The Company had loan and deposit relationships with directors, executive officers, and associates of these parties as of December 31, 2015 and 2014 . The following is a reconciliation of these loans (amounts in thousands): 2015 2014 Beginning balance $ 8,777 $ 9,840 New loans 1,689 1,539 Principal repayments (1,716 ) (2,602 ) Ending balance $ 8,750 $ 8,777 As a matter of policy, these loans and credit lines are approved by the Company’s Board of Directors and are made with interest rates, terms, and collateral requirements comparable to those required of other borrowers. In the opinion of management, these loans do not involve more than the normal risk of collectibility. Credit Risk We use an internal grading system to assign the degree of inherent risk on each individual loan and monitor trends in portfolio quality. The grade is initially assigned by the lending officer or credit administration and reviewed by the loan administration function throughout the life of the loan. The credit grades have been defined as follows: • Grade 1 - Superior / Lowest Risk Loans that are virtually risk-free and are well-collateralized by cash or cash-equivalent instruments held by the Bank. They are loans secured by properly margined liquid collateral such as certificates of deposit, government securities, cash value of life insurance, stock actively traded on one of the major stock exchanges, etc. The repayment program is well-defined and achievable, and repayment sources are numerous. Repayment is definite and being handled as agreed. No material documentation deficiencies or exceptions exist. • Grade 2 - Strong Loans secured by readily marketable collateral, properly margined and with a definite repayment program in effect. These loans are within guidelines to borrowers with liquid financial statements and sound financial condition. A liquid financial statement is generally a financial statement with substantial liquid assets, particularly relative to the debts. These loans have excellent, multiple sources of repayment, with no significant identifiable risk of collection. The repayment source is well-defined by proven income, cash flow, trade asset turn, etc. Documented sources of repayment exceed required minimum Bank guidelines, and can be supplemented with verifiable cash flow from other sources. Such loans conform in all respects to Bank policy, guidelines, underwriting standards, and Federal and State regulations (no exceptions of any kind). • Grade 3 - Solid / Standard These loans have adequate sources of repayment, with little identifiable risk of collection. Generally, loans assigned this risk grade will demonstrate the following characteristics: ◦ Conformity in most respects with Bank policy, guidelines, underwriting standards, and Federal and State regulations (limited exceptions of any kind). All exceptions noted have documented mitigating factors that offset any additional risk associated with the exceptions noted. ◦ Documented sources of repayment that meet required minimum Bank guidelines, or that can be supplemented with verifiable cash flow from other sources. ◦ Adequate secondary sources to liquidate the debt, including combinations of liquidity, liquidation of collateral, or liquidation value to the net worth of the borrower or guarantor. ◦ Secured loans repaying as agreed where collateral value and marketability are sufficient and do not materially affect risk. ◦ Fully collectible, unsecured loans repaying as agreed and backed by sound personal or business financial statements with reachable assets that can be readily liquidated. • Grade 4 - Acceptable These are acceptable loans that show signs of weakness in either adequate sources of repayment or collateral, but have demonstrated mitigating factors that minimize the risk of delinquency or loss. Loans assigned this grade may demonstrate some or all of the following characteristics: ◦ Exceptions to the Bank's policy requirements, product guidelines or underwriting standards that present a higher degree of risk to the Bank. Although the combination and/or severity of identified exceptions are greater for this risk grade, the exceptions may be properly mitigated by other documented factors that offset any additional risks. ◦ Unproved, insufficient or marginal primary sources of repayment that appear sufficient to service the debt at this time. ◦ Marginal or unproven secondary sources to liquidate the debt, including combinations of liquidation of collateral and liquidation value to the net worth of the borrower or guarantor. ◦ Secured loans repaying as agreed where collateral value or marketability are questionable but do not materially affect risk of repayment/collection. ◦ Includes loans to borrowers with an established borrowing history with the Bank, with no Bank delinquencies and no delinquencies with other creditors, but with little or no identifiable cash flow to support the borrower's unblemished repayment history. • Grade 5 - Special Mention or Watch List A Special Mention loan (OAEM) has potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the Bank's credit position at some future date. Special Mention loans are not adversely classified and do not expose the Bank to sufficient risk to warrant adverse classification. Special Mention or Watch List loans may include the following characteristics: ◦ Loans with guideline tolerances or exceptions of any kind that have not been mitigated by other economic or credit factors. ◦ Loans that are currently performing satisfactorily but with potential weaknesses that may, if not corrected, weaken the asset or inadequately protect the Bank's position at some future date. ◦ Borrowers that are experiencing adverse operating trends or an ill-proportioned balance sheet. ◦ Loans being repaid as agreed that require close following because of complexity, information or underwriting deficiencies, emerging signs of weakness or non-standard terms. ◦ Potential weaknesses exist, generally the result of deviations from prudent lending practices, such as over advances on collateral or unproven and inadequate primary repayment sources. ◦ Loans where adverse economic conditions have developed subsequent to the loan origination that may not jeopardize liquidation of the debt, but do substantially increase the level of risk, may also warrant this rating. • Grades 6-8 - Substandard (Grade 6), Doubtful (Grade 7) and Loss (Grade 8) A substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as Substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt; they are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Loans classified Doubtful have all the weaknesses inherent in loans classified Substandard, plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable. Loans classified as Loss are considered uncollectable and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this worthless loan even though partial recovery may be affected in the future. Loans are not typically made if graded Substandard or worse at inception without management's approval. The following tables illustrate the credit risk profile by creditworthiness class as of December 31, 2015 and 2014 (amounts in thousands) : December 31, 2015 Commercial and Commercial Commercial Residential - Residential - Consumer - Other - Loans Total 1 - Lowest Risk $ 1,942 $ — $ — $ — $ — $ 1,773 $ — $ 3,715 2 - Strong 971 749 2,280 — 15,187 386 7 19,580 3 - Standard 10,530 11,262 94,357 4,296 56,493 1,250 469 178,657 4 - Acceptable 9,297 33,832 103,740 31,431 50,226 3,170 757 232,453 5 - Special Mention 304 2,486 4,444 170 5,231 59 — 12,694 6 - Substandard or worse (1) 119 2,181 3,916 721 1,305 — 24 8,266 $ 23,163 $ 50,510 $ 208,737 $ 36,618 $ 128,442 $ 6,638 $ 1,257 $ 455,365 (1) The above table does not include business and consumer credit cards. December 31, 2014 Commercial and Commercial Commercial Residential - Residential - Consumer - Other - Total 1 - Lowest Risk $ 2,099 $ — $ — $ — $ — $ 1,638 $ — $ 3,737 2 - Strong 606 630 2,206 — 14,794 314 11 18,561 3 - Standard 9,506 10,625 81,761 1,893 53,007 3,556 225 160,573 4 - Acceptable 11,932 34,709 110,683 26,074 56,359 1,186 146 241,089 5 - Special Mention 143 1,892 3,989 — 8,720 62 117 14,923 6 - Substandard or worse (1) — 5,786 1,871 163 2,142 492 — 10,454 $ 24,286 $ 53,642 $ 200,510 $ 28,130 $ 135,022 $ 7,248 $ 499 $ 449,337 (1) The above table does not include business and consumer credit cards and loans held for sale. As of December 31, 2014 , there were $2.5 million in risk grade 6 loans classified as held for sale. The following table illustrates the credit card portfolio exposure as of December 31, 2015 and 2014 (amounts in thousands) : December 31, 2015 December 31, 2014 Consumer - Business - Consumer - Business - Performing $ 2,211 $ 1,133 $ 2,263 $ 1,248 Nonperforming 29 35 13 3 $ 2,240 $ 1,168 $ 2,276 $ 1,251 Nonaccruals and Past Due Loans The following tables illustrate the age analysis of past due loans by loan class as of December 31, 2015 and 2014 (amounts in thousands) : December 31, 2015 30-89 Days Past Due Nonaccrual Greater than 90 Days Past Due Total Past Due Current Total Loans Commercial & industrial $ 56 $ 119 $ — $ 175 $ 22,988 $ 23,163 Commercial construction & land development 211 1,626 — 1,837 48,673 50,510 Commercial real estate — 2,929 — 2,929 205,808 208,737 Residential construction 133 721 — 854 35,764 36,618 Residential mortgage 499 1,203 — 1,702 126,740 128,442 Consumer 71 — — 71 6,567 6,638 Consumer credit cards 95 — 29 124 2,116 2,240 Business credit cards 107 — 36 143 1,025 1,168 Other loans — — — — 1,257 1,257 Total $ 1,172 $ 6,598 $ 65 $ 7,835 $ 450,938 $ 458,773 December 31, 2014 30-89 Days Past Due Nonaccrual (1) Greater than 90 Days Past Due Total Past Due Current Total Loans Commercial & industrial $ 14 $ — $ — $ 14 $ 24,272 $ 24,286 Commercial construction & land development 27 5,533 — 5,560 48,082 53,642 Commercial real estate — 983 — 983 199,527 200,510 Residential construction — — — — 28,130 28,130 Residential mortgage 1,058 1,271 — 2,329 132,693 135,022 Consumer 82 472 — 554 6,694 7,248 Consumer credit cards 46 — 14 60 2,216 2,276 Business credit cards 41 — 3 44 1,207 1,251 Other loans 84 — — 84 415 499 Total $ 1,352 $ 8,259 $ 17 $ 9,628 $ 443,236 $ 452,864 (1) The above table includes loans held for investment only. As of December 31, 2014 , there were $67,000 in loans 30-89 days past due and $1.9 million in loans on nonaccrual classified as held for sale. Impaired Loans Impaired loans are those loans for which the Bank does not expect full repayment of all principal and accrued interest when due either under the terms of the original loan agreement or within reasonably modified contractual terms. If the loan has been restructured, such as in the case of a TDR, the loan continues to be considered impaired for the duration of the restructured loan term. Whereas loans which are classified as Substandard (Risk Grade 6) are not necessarily impaired, all loans which are classified as Doubtful (Risk Grade 7) are considered impaired. Once a loan has been determined to meet the definition of impairment, the amount of that impairment is measured through one of a number of available methods; a calculation of the net present value of the expected future cash flows of the loan discounted by the effective interest rate of the loan, through the observable market value of the loan or should the loan be collateral dependent, upon the fair market value of the underlying assets securing the loan. If a deficit is calculated, the amount of the measured impairment results in the establishment of a specific valuation allowance or reserve or charge-off, and is incorporated into the Bank's ALLL. When a loan has been designated as impaired and full collection of principal and interest under the contractual terms is not assured, the impaired loan will be placed into nonaccrual status and interest income will not be recognized. Payments received against such loans are initially applied fully to the principal balance of the note until the principal balance is satisfied. Subsequent payments are thereupon applied to the accrued interest balance which only then results in the recognition of interest income. Payments received against accruing impaired loans are applied in the same manner as that of accruing loans which have not been deemed impaired. The recorded investment in impaired loans does not include deferred fees or accrued interest and management deems this amount to be immaterial. The following tables illustrate the impaired loans by loan class as of December 31, 2015 and 2014 ( amounts in thousands ): December 31, 2015 Recorded Unpaid Related Average Interest With no related allowance recorded: Commercial and industrial $ 67 $ 67 $ — $ 63 $ 3 Commercial construction & land development 737 1,706 — 1,031 19 Commercial real estate 2,258 2,614 — 2,020 50 Residential construction 721 722 — 408 8 Residential mortgage 1,305 1,312 — 1,191 51 Subtotal: $ 5,088 $ 6,421 $ — $ 4,713 $ 131 With an allowance recorded: Commercial and industrial $ 52 $ 63 $ 7 $ 58 $ 4 Commercial construction & land development 1,948 3,020 1,006 2,086 122 Commercial real estate 1,699 1,699 228 1,713 79 Residential mortgage 139 217 20 183 8 Subtotal: $ 3,838 $ 4,999 $ 1,261 $ 4,040 $ 213 Totals: Commercial $ 6,761 $ 9,169 $ 1,241 $ 6,971 $ 277 Residential 2,165 2,251 20 1,782 67 Grand Total $ 8,926 $ 11,420 $ 1,261 $ 8,753 $ 344 At December 31, 2015 , the recorded investment in loans considered impaired totaled $8.9 million . Of the total investment in loans considered impaired, $3.8 million were found to show specific impairment for which a $1.3 million valuation allowance was recorded; the remaining $5.1 million in impaired loans required no specific valuation allowance because either previously established valuation allowances had been absorbed by partial charge-offs or loan evaluations had no indication of impairment which would require a valuation allowance. December 31, 2014 Recorded (1) Unpaid Related Interest With no related allowance recorded: Commercial construction & land development $ 5,445 $ 6,454 $ — $ 6,715 $ 15 Commercial real estate 3,468 4,295 — 4,103 139 Residential mortgage 2,030 1,614 — 2,279 59 Consumer 467 729 — 524 — Subtotal: $ 11,410 $ 13,092 $ — $ 13,621 $ 213 With an allowance recorded: Commercial construction & land development $ 1,433 $ 2,656 $ 580 $ 1,866 $ 92 Commercial real estate 372 379 17 378 19 Residential mortgage 192 169 61 224 5 Consumer 8 6 5 8 — Subtotal: $ 2,005 $ 3,210 $ 663 $ 2,476 $ 116 Totals: Commercial $ 10,718 $ 13,784 $ 597 $ 13,062 $ 265 Consumer 475 735 5 532 — Residential 2,222 1,783 61 2,503 64 Grand Total: $ 13,415 $ 16,302 $ 663 $ 16,097 $ 329 (1) The above table includes loans held for investment only. As of December 31, 2014 , there were $2.4 million in impaired loans classified as held for sale and there were no reserves recorded for these loans. At December 31, 2014 , the recorded investment in loans considered impaired totaled $13.4 million . Of the total investment in loans considered impaired, $2.0 million were found to show specific impairment for which a $663,000 valuation allowance was recorded; the remaining $11.4 million in impaired loans required no specific valuation allowance because either previously established valuation allowances had been absorbed by partial charge-offs or loan evaluations had no indication of impairment which would require a valuation allowance. Troubled Debt Restructurings Loans are classified as a TDR when, for economic or legal reasons which result in a debtor experiencing financial difficulties, the Bank grants a concession through a modification of the original loan agreement that would not otherwise be considered. Generally concessions are granted as a result of a borrower's inability to meet the contractual repayment obligations of the initial loan terms and in the interest of improving the likelihood of recovery of the loan. We may grant these concessions by a number of means such as (1) forgiving principal or interest, (2) reducing the stated interest rate to a below market rate, (3) deferring principal payments, (4) changing repayment terms from amortizing to interest only, (5) extending the repayment period, or (6) accepting a change in terms based upon a bankruptcy plan. However, the Bank only restructures loans for borrowers that demonstrate the willingness and capacity to repay the loan under reasonable terms and where the Bank has sufficient protection provided by the cash flow of the underlying collateral or business. Loans in the process of renewal or modification are reviewed by the Bank to determine if the risk grade assigned is accurate based on updated information. All loans identified by the Bank's internal loan grading system to pose a heightened level of risk at or prior to renewal or modification are additionally reviewed to determine if the loan should be classified as a TDR. The Bank's knowledge of the borrower's situation and any updated financial information obtained is first used to determine whether the borrower is experiencing financial difficulty. Once this is determined, the Bank reviews the modification terms to determine whether a concession has been granted. If the Bank determines that both conditions have been met, the loan will be classified as a TDR. If the Bank determines that both conditions have not been met, the loan is not classified as a TDR, but would typically then be monitored for any additional deterioration. Documentation to support this determination of TDR classification is maintained within the credit file. For the year ended December 31, 2015 , there were no loans modified as TDRs compared to three loans totaling $104,000 which were deemed TDRs for the year ended December 31, 2014 . The following table presents a breakdown of TDRs by loan class and the type of concession made to the borrower as of December 31, 2014 (amounts in thousands, except number of loans): For the Year Ended December 31, 2014 Number of loans Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Extended payment terms: Consumer 1 $ 4 $ 4 Subtotal 1 $ 4 $ 4 Forgiveness of principal: Commercial construction and land development 2 $ 100 $ 43 Subtotal 2 $ 100 $ 43 Total 3 $ 104 $ 47 There were no loans modified as TDRs and for which there was a payment default during the year ended December 31, 2015 . Allowance for Loan Losses and Recorded Investment in Loans The allowance for loan losses represents management’s estimate of an amount adequate to provide for known and inherent losses in the loan portfolio in the normal course of business. Management evaluates the adequacy of this allowance on at least a quarterly basis, which includes a review of loans both specifically and collectively evaluated for impairment. Following is an analysis of the allowance for loan losses by loan segment as of and for the years ended December 31, 2015 and 2014 (amounts in thousands): December 31, 2015 Real Estate Allowances for loan losses: Commercial and Industrial Commercial construction and land development Commercial real estate Residential construction Residential mortgage Consumer Other Totals Balance, beginning of period $ 119 $ 5,105 $ 2,382 $ 436 $ 1,206 $ 89 $ 40 $ 9,377 Provision for loan losses (58 ) (615 ) 71 (90 ) 497 121 74 — Loans charged-off (74 ) (196 ) (578 ) (41 ) (713 ) (210 ) (69 ) (1,881 ) Recoveries 234 1,176 393 — 201 113 3 2,120 Net (charge-offs) recoveries 160 980 (185 ) (41 ) (512 ) (97 ) (66 ) 239 Balance, end of period $ 221 $ 5,470 $ 2,268 $ 305 $ 1,191 $ 113 $ 48 $ 9,616 Ending balance: individually evaluated for impairment $ 2 $ 989 $ 228 $ — $ — $ — $ — $ 1,219 Ending balance: collectively evaluated for impairment (1) $ 219 $ 4,481 $ 2,040 $ 305 $ 1,191 $ 113 $ 48 $ 8,397 Loans: Balance, end of period $ 24,331 $ 50,510 $ 208,737 $ 36,618 $ 128,442 $ 8,878 $ 1,257 $ 458,773 Ending balance: individually evaluated for impairment $ 84 $ 2,564 $ 3,957 $ 721 $ 1,305 $ — $ — $ 8,631 Ending balance: collectively evaluated for impairment (1) $ 24,247 $ 47,946 $ 204,780 $ 35,897 $ 127,137 $ 8,878 $ 1,257 $ 450,142 (1) At December 31, 2015 , there were $295,000 in impaired loans collectively evaluated for impairment with $42,000 in reserves established. December 31, 2014 Real Estate Allowances for loan losses: Commercial and Industrial Commercial construction and land development Commercial real estate Residential construction Residential mortgage Consumer Other Totals Balance, beginning of period $ 487 $ 5,037 $ 2,981 $ 713 $ 2,146 $ 188 $ 38 $ 11,590 Provision for loan losses (84 ) 2,778 2,382 (106 ) 3,041 (36 ) (21 ) 7,954 Loans charged-off (492 ) (3,107 ) (3,315 ) (171 ) (4,847 ) (183 ) — (12,115 ) Recoveries 208 397 334 — 866 120 23 1,948 Net (charge-offs) recoveries (284 ) (2,710 ) (2,981 ) (171 ) (3,981 ) (63 ) 23 (10,167 ) Balance, end of period $ 119 $ 5,105 $ 2,382 $ 436 $ 1,206 $ 89 $ 40 $ 9,377 Ending balance: individually evaluated for impairment $ — $ 516 $ 4 $ — $ — $ 4 $ — $ 524 Ending balance: collectively evaluated for impairment (1) $ 119 $ 4,589 $ 2,378 $ 436 $ 1,206 $ 85 $ 40 $ 8,853 Loans: Balance, end of period $ 25,537 $ 53,642 $ 200,510 $ 28,130 $ 135,022 $ 9,524 $ 499 $ 452,864 Ending balance: individually evaluated for impairment $ — $ 6,678 $ 3,801 $ — $ 2,030 $ 471 $ — $ 12,980 Ending balance: collectively evaluated for impairment (1) $ 25,537 $ 46,964 $ 196,709 $ 28,130 $ 132,992 $ 9,053 $ 499 $ 439,884 (1) At December 31, 2014 , there were $436,000 in impaired loans collectively evaluated for impairment with $139,000 in reserves established. |
BANK PREMISES AND EQUIPMENT
BANK PREMISES AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
BANK PREMISES AND EQUIPMENT | BANK PREMISES AND EQUIPMENT Company premises and equipment at December 31, 2015 and 2014 are as follows (amounts in thousands): 2015 2014 Land $ 4,394 $ 4,394 Buildings and leasehold improvements 11,312 11,189 Furniture and equipment 5,182 11,411 Construction in process 1,467 562 22,355 27,556 Less accumulated depreciation (10,062 ) (15,661 ) $ 12,293 $ 11,895 Depreciation expense was $684,000 and $833,000 for the years ended December 31, 2015 and 2014 , respectively. |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2015 | |
Banking and Thrift [Abstract] | |
DEPOSITS | DEPOSITS At December 31, 2015 , the scheduled maturities of time deposits are as follows (amounts in thousands): Less than $100,000 Total 2016 $ 44,628 $ 94,570 $ 139,198 2017 22,174 32,320 54,494 2018 7,518 10,612 18,130 2019 1,790 4,347 6,137 2020 2,803 7,338 10,141 2021 and beyond 153 1,823 1,976 Total time deposits $ 79,066 $ 151,010 $ 230,076 |
BORROWINGS
BORROWINGS | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
BORROWINGS | BORROWINGS At December 31, 2015 and 2014 , borrowed funds included the following FHLB advances (amounts in thousands): Maturity Interest Rate 2015 2014 June 5, 2017 4.35% Fixed $ — $ 10,000 July 3, 2017 4.36% Fixed — 13,000 July 31, 2017 4.35% Fixed — 5,000 August 14, 2017 4.08% Fixed — 5,000 August 14, 2017 3.94% Fixed 5,000 5,000 October 4, 2017 3.95% Fixed — 7,000 February 5, 2018 2.06% Fixed 10,000 10,000 June 5, 2018 2.25% Fixed 5,000 5,000 June 5, 2018 2.55% Fixed 5,000 5,000 June 5, 2018 3.03% Fixed 5,000 5,000 September 10, 2018 3.14% Fixed 10,000 10,000 September 18, 2018 2.71% Fixed 10,000 10,000 February 22, 2016 0.48% Fixed 10,000 — $ 60,000 $ 90,000 FHLB advances are secured by a floating lien covering the Company’s loan portfolio of qualifying residential (1-4 units) first mortgage loans. At December 31, 2015 , the Company has available lines of credit totaling $138.3 million with the FHLB for borrowing dependent on adequate collateralization. The weighted average rates for the above borrowings at December 31, 2015 and 2014 were 2.38% and 3.42% , respectively. In addition to the above advances, the Company has lines of credit of $37.0 million from various financial institutions to purchase federal funds on a short-term basis. The Company has no federal funds purchases outstanding as of December 31, 2015 . |
TRUST PREFERRED SECURITIES
TRUST PREFERRED SECURITIES | 12 Months Ended |
Dec. 31, 2015 | |
Trust Preferred Securities [Abstract] | |
TRUST PREFERRED SECURITIES | TRUST PREFERRED SECURITIES On March 30, 2006, $12.4 million of trust preferred securities (the “Trust Preferred Securities”) were placed through the Trust. The Trust has invested the net proceeds from the sale of the Trust Preferred Securities in Junior Subordinated Deferrable Interest Debentures (the “Debentures”) issued by the Company and recorded in borrowings on the accompanying consolidated balance sheets. The Trust Preferred Securities pay cumulative cash distributions quarterly at an annual rate, reset quarterly, equal to three month LIBOR plus 1.35% . The dividends paid to holders of the Trust Preferred Securities, which will be recorded as interest expense, are deductible for income tax purposes. The Trust Preferred Securities are redeemable on June 15, 2011 or afterwards in whole or in part, on any June 15, September 15, December 15, or March 15. Redemption is mandatory by June 15, 2036. The Company has fully and unconditionally guaranteed the Trust Preferred Securities through the combined operation of the Debentures and other related documents. The Company’s obligation under the guarantee is unsecured and subordinate to senior and subordinated indebtedness of the Company. The Trust Preferred Securities qualify as Tier I capital for regulatory capital purposes subject to certain limitations. We have the right to defer payment of interest on the Debentures at any time and from time to time for a period not exceeding five years , provided that no deferral period extends beyond the stated maturities of the Debentures. Such deferral of interest payments by the Company will result in a deferral of distribution payments on the related Trust Preferred Securities. Whenever we defer the payment of interest on the Debentures, the Company will be precluded from the payment of cash dividends to shareholders. In January 2011, the Company elected to defer the regularly scheduled interest payments on the Debentures related to our outstanding Trust Preferred Securities as the Company was prohibited by the 2011 Written Agreement, as defined and described in Note K - Regulatory Restrictions of these Notes to Consolidated Financial Statements, from paying interest without prior approval of the supervisory authorities. On July 30, 2015, the 2011 Written Agreement was terminated and these restrictions were eliminated allowing the Company to pay the deferred interest on its Debentures. The Company is now current with interest payments on the Debentures. |
SUBORDINATED PROMISSORY NOTES
SUBORDINATED PROMISSORY NOTES | 12 Months Ended |
Dec. 31, 2015 | |
Subordinated Debt [Abstract] | |
SUBORDINATED PROMISSORY NOTES | SUBORDINATED PROMISSORY NOTES In late 2015, the Company sold $11.5 million aggregate principal amount of subordinated promissory notes. These notes are due on November 30, 2025 and the Company is obligated to pay interest at an annualized rate of 6.25% payable in quarterly installments commencing on March 1, 2016. The Company may prepay the notes at any time after November 30, 2020, subject to compliance with applicable law. The proceeds of the offering were used to refinance the Company's outstanding subordinated promissory notes issued in 2009. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Allocation of income tax expense between current and deferred portions is as follows (amounts in thousands): Years Ended December 31, 2015 2014 Current tax expense (benefit): Federal $ 34 $ — State — — 34 — Deferred tax expense (benefit): Federal (15,184 ) — State (1,330 ) — (16,514 ) — Income tax benefit $ (16,480 ) $ — The reconciliation of expected income tax at the statutory federal rate of 34% with income tax expense is as follows (amounts in thousands): Years Ended December 31, 2015 2014 Expense computed at statutory rate of 34% $ 1,200 $ (1,424 ) Effect of state income taxes, net of federal benefit (790 ) 39 Tax exempt income (19 ) (22 ) Bank owned life insurance income (64 ) (71 ) Valuation allowance (16,819 ) 1,421 Other, net 12 57 $ (16,480 ) $ — Deferred income taxes consist of the following (amounts in thousands): Years Ended December 31, 2015 2014 Deferred tax assets: Allowance for loan losses $ 3,523 $ 3,454 Restricted stock and stock options 240 384 OTTI 188 345 Net deferred loan fees 169 206 Net operating loss 14,901 16,187 FMV adjustment on purchased assets — 89 SERP accrual 186 178 Other 1,335 2,545 Unrealized loss on securities 165 — Total deferred tax assets 20,707 23,388 Less valuation allowance (3,765 ) (22,013 ) Net deferred tax assets 16,942 1,375 Deferred tax liabilities: Property and equipment $ 133 $ 809 Prepaid expense 80 255 Unrealized gain on securities — 282 Other 50 29 Total deferred tax liabilities 263 1,375 Net deferred tax asset (liability) $ 16,679 $ — When tax returns are filed, it is highly likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely to be realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. For the years ended December 31, 2015 and 2014 , there were no uncertain tax positions taken by the Company. The Company classifies interest and penalties related to income tax assessments, if any, in income tax expense in the consolidated statements of operations. Fiscal years ending December 31, 2009 and thereafter are subject to IRS examination. For the twelve months ended December 31, 2015 , the Company recorded a discrete income tax benefit of $16.5 million . This compares to no income tax benefit or expense for the same period in 2014. The year-over-year variance is due to the Company’s release of the valuation allowance against its deferred tax assets in the second quarter of 2015 offset by an income tax expense in the third quarter of 2015 as a result of changes to the North Carolina tax rate and its impact on future deferred tax benefits. As of December 31, 2015, the Company had net operating losses available for carryforward of $39.4 million that will expire, if unused, from 2028 through 2034. Under the accounting principles generally accepted in the United States ("GAAP"), companies are required to assess whether a valuation allowance should be established against their deferred tax assets based on consideration of all available positive and negative evidence using a “more likely than not” standard. During the analysis for the twelve months ended December 31, 2010 and continuing through March 31, 2015, the Company had concluded that it was not more-likely-than-not that the Company would be able to utilize its deferred tax assets and, accordingly, had established a full valuation allowance against the value of the deferred tax assets. This conclusion was based on negative credit quality trends, increasing provision for loan losses, cumulative loss position, and uncertainty regarding the amount of future taxable income that the Company could forecast. As part of the ongoing evaluation of positive and negative factors, the Company determined in the second quarter of 2015, it is more likely than not that it will generate sufficient taxable income to utilize a significant portion of its deferred tax assets. As a result of this change in judgment about the ability to utilize its deferred tax assets in future years, the Company released $16.6 million of the valuation allowance against its deferred tax assets resulting in an income tax benefit. This conclusion, and partial release of the valuation allowance, was based upon a number of factors including continued improvement in quarterly earnings, forecasted future profitability, improved asset quality and the execution of the Asset Resolution Plan. The Company will continue to evaluate its ability to utilize the remaining $3.8 million in net deferred tax assets as more objective information on growth and profitability becomes available. Future evidence may show that it is more likely than not that the remaining deferred tax assets will be utilized at which point the remaining valuation allowance can be reversed. Alternatively, future evidence may prove that it is more likely than not that a portion of the deferred tax assets will not be utilized in which case a valuation allowance may be reestablished. |
REGULATORY RESTRICTIONS
REGULATORY RESTRICTIONS | 12 Months Ended |
Dec. 31, 2015 | |
Regulatory Capital Requirements [Abstract] | |
REGULATORY RESTRICTIONS | REGULATORY RESTRICTIONS North Carolina banking law requires that the Bank may not pay a dividend that would reduce its capital below the applicable required capital. In addition, regulatory authorities may limit payment of dividends by any bank when it is determined that such a limitation is in the public interest and is necessary to ensure the financial soundness of the Bank. Although not currently limited by regulatory authorities, there were no dividends paid to the Company by the Bank during 2015 . In early July 2013, the Federal Reserve approved a final rule that implemented Basel III’s integrated regulatory capital framework. This rule substantially revised risk-based capital requirements including defining the components of capital, modifying the risk weights applied to assets, and addressing other issues affecting the calculation of banking institution's regulatory capital ratios. The Based III rule became effective for the Company and the Bank on January 1, 2015. The minimum capital level requirements applicable to the Company and Bank under the Basel III rules are a common equity Tier 1 capital ratio of 4.5% , a Tier 1 risk-based capital ratio of at least 6.0% , a total risk-based capital ratio of 8.0% , and a Tier 1 leverage ratio of 4.0% . At December 31, 2015 , the Bank was classified as well capitalized for regulatory capital purposes. The Bank’s actual capital amounts and ratios are also presented in the table below and at (amounts in thousands, except ratios): Actual Minimum For Capital Minimum To be Well Amount Ratio Amount Ratio Amount Ratio As of December 31, 2015: Total Capital (to Risk Weighted Assets) $ 77,620 15.6 % $ 39,750 8.0 % $ 49,688 10.0 % Tier I Capital (to Risk Weighted Assets) 71,367 14.4 % 29,813 6.0 % 39,750 8.0 % Common Equity Tier 1 Capital (to Risk Weighted Assets) 71,367 14.4 % 22,360 4.5 % 32,297 6.5 % Tier I Capital (to Average Assets) 71,367 10.2 % 28,015 4.0 % 35,019 5.0 % As of December 31, 2014: Total Capital (to Risk Weighted Assets) $ 66,498 14.7 % $ 36,109 8.0 % $ 45,136 10.0 % Tier I Capital (to Risk Weighted Assets) 60,810 13.5 % 18,054 4.0 % 27,082 6.0 % Tier I Capital (to Average Assets) 60,810 7.2 % 33,844 4.0 % 42,305 5.0 % At December 31, 2015 , the Company’s total capital to risk weighted assets, Tier 1 capital to risk weighted assets, common equity Tier 1 capital to risk weighted assets, and Tier 1 capital to average assets were 16.0% , 12.4% , 11.3% , and 8.8% , respectively, as compared to total capital to risk weighted assets, Tier 1 capital to risk weighted assets, and Tier 1 capital to average assets of 15.0% , 11.6% , and 6.2% , respectively, at December 31, 2014 . In late May 2011, the Company and the Bank entered into a Written Agreement (the "2011 Written Agreement") with the Federal Reserve Bank of Richmond (the "FRB") and the North Carolina Office of the Commissioner of Banks (the "NCCOB"). Working closely with its regulatory partners, the Company demonstrated substantial business and risk management progress and was deemed in compliance with the 2011 Written Agreement. The Company's 2014 capital raise, continued asset quality improvements, and implementation of the Asset Resolution Plan were critical to the Bank's ability to demonstrate the required compliance. As a result, on July 30, 2015, the 2011 Written Agreement was terminated by the FRB and the NCCOB. In connection with the termination of the 2011 Written Agreement, the Bank entered into a new Written Agreement on July 30, 2015 (the “2015 Written Agreement”) with only the FRB, which is unrelated to the Bank’s financial condition. Under the terms of the 2015 Written Agreement, the Bank submitted the following plans for approval: • a written plan to assure ongoing board oversight of the Bank's management and operations; • a written program for the review of new products, services, or business lines; and • an enhanced written program for conducting appropriate levels of customer due diligence by the Bank. In addition, the Bank has agreed that it will: • within ten days of approval by the FRB, adopt the approved programs specified in the second and third bullets, above; and • within 30 days after the end of each calendar quarter following the date of the 2015 Written Agreement, submit to FRB written progress reports detailing the form and manner of all actions taken to secure compliance with the 2015 Written Agreement and the results thereof. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The Company is a party to financial instruments with off-balance sheet credit risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheet. The contract or notional amounts of those instruments reflect the extent of involvement the Bank has in particular classes of financial instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company, upon extension of credit is based on management’s credit evaluation of the borrower. Collateral obtained varies but may include real estate, stocks, bonds, and certificates of deposit. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of conditions established in the commitment letter or contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Undisbursed lines of credit are commitments for possible future extensions of credit to customers on existing loans. These lines of credit generally contain a specified maturity date, but could also exclude an expiration date such as is the case for our overdraft protection lines. Similar to commitments, undisbursed lines of credit may not be drawn upon to the total extent to which the Bank is committed and do not necessarily represent future cash requirements. Stand-by letters of credit are conditional lending commitments issued by the Bank to guarantee the performance of a customer to a third party. Those letters of credit are primarily issued to support public and private borrowing arrangements. Essentially all letters of credit issued have expiration dates within four years . The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. At December 31, 2015 and 2014 , financial instruments whose contract amounts represent credit risk were (amounts in thousands): 2015 2014 Commitments to extend credit $ 29,354 $ 14,182 Undisbursed lines of credit 94,241 73,888 Financial stand-by letters of credit 438 238 Performance stand-by letters of credit 233 1,203 Legally binding commitments 124,266 89,511 Unused credit card lines 15,982 12,773 Total $ 140,248 $ 102,284 Litigation Proceedings In October 2013, multiple putative class action lawsuits were filed in United States district courts across the country against a number of different banks based on the banks' alleged role in "payday lending". Four of these lawsuits, filed in the Northern District of Georgia, the Middle District of North Carolina, the District of Maryland, and the Southern District of Florida, named the Bank as one of the defendants. The lawsuits allege that, by processing Automatic Clearing House transactions indirectly on behalf of "payday" lenders, the Bank is illegally participating in an enterprise to collect unlawful debts and is therefore liable to plaintiffs for damages under the federal Racketeer Influenced and Corrupt Organizations Act. The lawsuits also allege a variety of state law claims. The Bank moved to dismiss each of these lawsuits. The Georgia action was voluntarily dismissed by the plaintiffs and the District of Maryland granted the motion and dismissed the case, which the parties subsequently settled while on appeal to the United States Court of Appeals for the Fourth Circuit. The lawsuit in the Southern District of Florida has been stayed pending arbitration of the plaintiff's claims against the Bank’s co-defendants. The Middle District of North Carolina granted the motion in part and denied it in part; the case against the Bank has been stayed pending resolution of motions to compel arbitration filed by the Bank's co-defendants. Additionally, the Company and the Bank are parties to certain other legal actions in the ordinary course of their business. The Company believes these actions are routine in nature and incidental to the operation of their business. While the outcome of these actions cannot be predicted with certainty, management’s present judgment is that the ultimate resolution of these matters will not have a material adverse impact on our business, financial condition, results of operations, cash flows or prospects. If, however, the Company's assessment of these actions is inaccurate, or there are any significant adverse developments in these actions, the Company's business, financial condition, results of operations, cash flows and prospects could be adversely affected. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair Value Measured on a Recurring Basis . The Company measures certain assets at fair value on a recurring basis, as described below. Investment Securities Available-for-Sale Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities have historically included equity securities traded on an active exchange, such as the New York Stock Exchange. As of December 31, 2015 , there were no Level 1 securities. Level 2 securities include taxable municipalities, mortgage-backed securities issued by government sponsored entities, and certain equity securities. The Company’s mortgage-backed securities were primarily issued by the Government National Mortgage Association (“GNMA”), with additional mortgage-backed securities issued by the Federal National Mortgage Association (“FNMA”) and Federal Home Loan Mortgage Corporation ("FHLMC"). As of December 31, 2015 , all of the Company’s mortgage-backed securities were agency issued and designated as Level 2 securities. Securities classified as Level 3 include other debt securities in less liquid markets and with no quoted market price. The following table presents information about assets measured at fair value on a recurring basis at December 31, 2015 and 2014 (amounts in thousands): Available-for-Sale Securities: Fair Value Measurements at Total Carrying Assets Quoted Prices Significant Significant (Level 1) (Level 2) (Level 3) Taxable municipal securities $ 24,567 $ 24,567 $ — $ 24,567 $ — Mortgage-backed securities: GNMA 13,530 13,530 — 13,530 — FNMA & FHLMC 31,673 31,673 — 31,673 — Other debt securities 500 500 — — 500 Equity securities 11 11 — 11 — Total available-for-sale securities $ 70,281 $ 70,281 $ — $ 69,781 $ 500 Available-for-Sale Securities: Fair Value Measurements at Total Carrying Assets Quoted Prices Significant Significant (Level 1) (Level 2) (Level 3) Taxable municipal securities $ 17,078 $ 17,078 $ — $ 17,078 $ — Mortgage-backed securities: GNMA 16,264 16,264 — 16,264 — FNMA & FHLMC 30,858 30,858 — 30,858 — Equity securities 11 11 — 11 — Total available-for-sale securities $ 64,211 $ 64,211 $ — $ 64,211 $ — The table below presents reconciliation for the years ended December 31, 2015 and 2014 for all Level 3 assets that are measured at fair value on a recurring basis (amounts in thousands) . During the year ended December 31, 2015 , no securities were transferred from Level 3 to Level 2. Available-for-Sale Securities 2015 2014 Beginning Balance $ — $ 1,025 Total realized and unrealized gains or (losses): Included in earnings — 250 Included in other comprehensive income — 150 Purchases, issuances and settlements 500 (1,425 ) Ending Balance $ 500 $ — Fair Value Measured on a Nonrecurring Basis. The Company measures certain assets at fair value on a nonrecurring basis, as described below. Loans Held for Sale Loans held for sale are carried at the lower of cost or market value. The fair value of loans held for sale is based on what secondary markets are currently offering for portfolios with similar characteristics. As such, the Company classifies loans held for sale as a Level 2 valuation. At December 31, 2015 , the Company had $1.1 million in loans held for sale which were made up entirely of residential mortgage loans held for sale in the secondary market. At December 31, 2014 , the Company had $2.9 million in loans held for sale which included $335,000 in residential mortgage loans held for sale in the secondary market and $2.5 million in other loans for sale that were transferred from loans held for investment during 2014 . These loans were transferred to held for sale and are being carried at fair value in anticipation of near term loan sales resulting from the Asset Resolution Plan. Impaired Loans The Company does not record loans at fair value on a recurring basis. However, when a loan is considered impaired, it is evaluated for impairment and written down to its estimated fair value or an allowance for loan losses is established. When the fair value of an impaired loan is based on an observable market price or a current appraised value with no adjustments, the Company records the impaired loan as nonrecurring Level 2. When there is no observable market prices, an appraised value is not available, or the Company determines the fair value of the collateral is further impaired below the appraised value, the impaired loan is classified as nonrecurring Level 3. As of December 31, 2015 , the Bank identified $3.5 million in impaired loans that were carried at fair value which included $3.8 million in loans that required a specific valuation allowance of $1.3 million and an additional $1.0 million in loans without a specific valuation allowance that have previously been written down to fair value. As of December 31, 2014 , the Bank identified $9.9 million in impaired loans that were carried at fair value which included $1.6 million in loans that required a specific valuation allowance of $524,000 and an additional $8.8 million in loans without a specific valuation allowance that have previously been written down to fair value. Foreclosed Assets Foreclosed assets are adjusted to fair value less estimated selling costs upon transfer of the loans to foreclosed assets. Subsequently, foreclosed assets are carried at the lower of carrying value or fair value. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. Given the lack of observable market prices for identical properties, the Company records foreclosed assets as non-recurring Level 3. At December 31, 2015 , there were $344,000 of fair value adjustments required after transfer related to foreclosed real estate of $1.8 million compared to $1.8 million and $3.8 million , respectively, at December 31, 2014 . Assets measured at fair value on a non-recurring basis are included in the table below at December 31, 2015 and 2014 (amounts in thousands): Fair Value Measurements at Description Total Carrying Amount in the Consolidated Balance Sheet Assets Measured at Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs Significant Unobservable Inputs Loans held for sale $ 1,145 $ 1,145 $ — $ 1,145 $ — Impaired loans $ 3,540 $ 3,540 $ — $ — $ 3,540 Foreclosed assets $ 1,760 $ 1,760 $ — $ — $ 1,760 Fair Value Measurements at Description Total Carrying Amount in the Consolidated Balance Sheet Assets Measured at Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs Significant Unobservable Inputs Loans held for sale $ 2,882 $ 2,882 $ — $ 2,882 $ — Impaired loans $ 9,855 $ 9,855 $ — $ — $ 9,855 Foreclosed assets $ 3,782 $ 3,782 $ — $ — $ 3,782 Quantitative Information about Level 3 Fair Value Measurements The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a nonrecurring basis at December 31, 2015 (amounts in thousands, except percentages): Total Carrying Amount at December 31, 2015 Valuation Methodology Range of Inputs Recurring measurements: Probability of default 10-20% Other debt securities $ 500 Loss given default 100% Nonrecurring measurements: Impaired loans $ 3,540 Collateral discounts 9 - 50% Foreclosed assets $ 1,760 Discounted appraisals 10 - 30% Collateral discounts to determine fair value on impaired loans varies widely and result from the consideration of the following factors: the age of the most recent appraisal, the type of asset serving as collateral, the expected marketability of the asset, its material or environmental condition, and comparisons to actual sales data of similar assets from both internal and external sources. The following table reflects the general range of collateral discounts for impaired loans by segment: Loan Segment: Range of Percentages Commercial construction and land development 10% - 40% Commercial real estate 9% - 50% Residential construction 9% - 30% Residential mortgage 9% - 20% All other segments 9% - 20% As foreclosed assets are brought into other real estate owned through a process which requires a fair market valuation, further discounts typically reflect market conditions specific to the asset. These conditions are usually captured in subsequent appraisals which are required on an annual basis, and depending upon asset type and marketability demonstrate a more restrained variance than that noted above. Fair Value of Financial Instruments The following methods and assumptions were used to estimate the fair value of each class of financial instrument. Cash and Cash Equivalents The carrying amounts of cash and cash equivalents are equal to the fair value due to the liquid nature of the financial instruments. Certificates of Deposit These investments are valued at carrying amounts for fair value purposes. Securities Available-for-Sale and Securities Held-to-Maturity Fair values of investment securities are based on quoted market prices. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities. Loans Held For Sale The fair value of mortgage loans held for sale is based on commitments on hand from investors within the secondary market for loans with similar characteristics. Loans The fair value of loans has been estimated utilizing the net present value of future cash flows based upon contractual balances, prepayment assumptions, and applicable weighted average interest rates, adjusted for a 5% current liquidity and market discount assumption. The Company has assigned no fair value to off-balance sheet financial instruments since they are either short term in nature or subject to immediate repricing. FHLB Stock The carrying amount of FHLB stock approximates fair value. Premises and Equipment, Held for Sale The carrying amount of premises and equipment held for sale approximates fair value. Deposits The fair value of non-maturing deposits such as noninterest-bearing demand, money market, NOW, and savings accounts, are by definition, equal to the amount payable on demand. Fair value for maturing deposits such as CDs and IRAs are estimated using a discounted cash flow approach that applies current interest rates to expected maturities. Borrowings, Subordinated Debentures, and Subordinated Promissory Notes The fair value of borrowings, subordinated debentures, and subordinated promissory notes, is based on discounting expected cash flows at the interest rate from debt with the same or similar remaining maturities and collection requirements. Accrued Interest Receivable and Payable The carrying amounts of accrued interest approximates fair value. The following table presents information for financial assets and liabilities as of December 31, 2015 and 2014 (amounts in thousands): December 31, 2015 Carrying Estimated Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 26,755 $ 26,755 $ 26,755 $ — $ — Certificates of deposit 23,520 23,520 — 23,520 — Securities available-for-sale 70,281 70,281 — 69,781 500 Securities held-to-maturity 65,354 65,633 — 65,633 — Loans held for sale 1,145 1,145 — 1,145 — Loans, net 448,697 423,285 — — 423,285 FHLB stock 3,288 3,288 — 3,288 — Accrued interest receivable 1,594 1,594 — 1,594 — Financial liabilities: Deposits $ 542,334 $ 541,818 $ — $ 541,818 $ — Subordinated debentures and subordinated promissory notes 23,872 23,872 — — 23,872 Borrowings 60,000 61,709 — 61,709 — Accrued interest payable 437 437 — 437 — December 31, 2014 Carrying Estimated Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 158,527 $ 158,527 $ 158,527 $ — $ — Certificates of deposit 27,784 27,784 — 27,784 — Securities available-for-sale 64,211 64,211 — 64,211 — Securities held-to-maturity 81,583 82,242 — 82,242 — Loans held for sale 2,882 2,882 — 2,882 — Loans, net 442,879 422,906 — — 422,906 FHLB stock 4,788 4,788 — 4,788 — Accrued interest receivable 1,627 1,627 — 1,627 — Financial liabilities: Deposits $ 661,185 $ 663,000 $ — $ 663,000 $ — Subordinated debentures and subordinated promissory notes 24,372 25,671 — — 25,671 Borrowings 90,000 95,573 — 95,573 — Accrued interest payable 1,704 1,704 — 1,704 — |
STOCK OPTION PLAN
STOCK OPTION PLAN | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK OPTION PLAN | STOCK OPTION PLAN The Company has a non-qualified stock option plan for certain key employees under which it is authorized to issue options for up to 1,542,773 shares of common stock. Options are granted at the discretion of the Company’s Board of Directors at an exercise price approximating market value, as determined by a committee of Board members. All options granted subsequent to a 1997 amendment will be 100% vested after either one or two years from the grant date and will expire after such a period as is determined by the Board at the time of grant. Options granted in 2014 have a two year vesting provision. There were no options granted during 2015 . A summary of option activity under the Plan for the year ended December 31, 2015 , is presented below: Shares Option Weighted Aggregate Outstanding at January 1, 2015 278,582 $ 4.86 Issued — — Exercised — — Forfeited 18,525 1.99 Expired 66,327 7.20 Balance at December 31, 2015 193,730 $ 4.33 1.76 $ 32,328 Exercisable at December 31, 2015 144,199 $ 5.23 1.28 $ 29,853 The weighted average exercise price of all exercisable options at December 31, 2015 is $5.23 . There were 214,845 shares reserved for future issuance under the Company’s stock option plan at December 31, 2015 . A summary of the status of the Company's non-vested options as of December 31, 2015 and changes during the year then ended is presented below: Shares Weighted average grant date fair value Non-vested - December 31, 2014 104,556 $ 0.86 Granted — — Vested 46,075 0.69 Forfeited/Expired 8,950 0.83 Non-vested - December 31, 2015 49,531 $ 1.03 As of December 31, 2015 and 2014 , there was $25,388 and $42,016 of unrecognized compensation cost related to non-vested options, respectively. Additional information concerning the Company’s stock options at December 31, 2015 is as follows: Exercise Price Number Contractual Number 1.15-1.69 46,075 2.19 46,075 1.70 - 2.99 93,650 2.21 44,148 3.00 - 40.78 41,700 0.16 41,671 40.79 12,305 2.07 12,305 193,730 1.76 144,199 The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions used for grants in 2015 and 2014 : 2015 2014 Dividend yield — 0 % Expected volatility — 73.30 % Risk free interest rate — 1.57 % Expected life — 5 years The weighted average fair value of options granted during 2014 was $1.03 There were no options granted during 2015 . RESTRICTED STOCK In January 2015, the Board of the Company approved and adopted the Four Oaks Fincorp, Inc. 2015 Restricted Stock Plan (the “Plan”). During 2015, the Company awarded 1,521,000 shares of the Company’s common stock at $1.00 par value per share to certain employees, directors and third party service providers in the form of restricted stock. Awards of performance based restricted stock vest in two separate tranches, 15% at the end of the one -year period ended on December 31, 2015, and 85% at the end of the three -year period ending on December 31, 2018 (each such period, a “Performance Period”), in each case based on the attainment of the performance measures and goals for that Performance Period. The performance measures for the one -year period which ended December 31, 2015 were (1) budgeted net income as set forth in the Company’s 2015 budget and (2) the Company having net income in each quarter of 2015. Budgeted net income must be achieved at the 70% threshold performance level in order for 10.5% of the awards to vest and at the 100% target performance level in order for 15% of the awards to vest. Where achievement against budgeted net income falls between these performance levels, the number of shares vested is determined based on straight-line interpolation. We achieved our targeted performance level for the one -year Performance Period ending December 31, 2015, and therefore 15% of the shares of restricted stock have now vested. If the performance goals had not been met, 15% of the awards would have been forfeited. The performance measures and related goals for the three -year period ending December 31, 2018 are based on cumulative earnings per share and were set by the compensation committee of the Board (the "Committee"), in its sole discretion as administrator of the Plan, in the fourth quarter of 2015. Earnings per share must be achieved at the 60% threshold performance level in order for 50% of the remaining awards to vest and at the 100% target performance level in order for 100% of the awards to vest. Where achievement against earnings per share falls between these performance levels, the number of shares vest also falls within these levels. Achievement of 70% , 80% , and 90% of target earnings per share results in vesting of 60% , 75% , and 87.5% respectively. Additionally, if 110% or more of the target performance level is obtained, 100% of the awards will vest and an additional 10% of the applicable restricted stock grant amount will be awarded to each recipient in fully-vested shares. Awards of time based restricted stock also vest in two separate tranches, 15% at the end of the one -year period ending on December 31, 2015, and 85% at the end of the three -year period ending on December 31, 2018. In order for these shares to vest, the recipient of the award generally must be employed by the Company on the vesting date. Any restricted stock that has not vested at the time of the termination of the recipient's service relationship will be forfeited; although, the Committee has the power, in its sole and absolute discretion, to accelerate vesting where such termination is a result of the recipient's death or disability or in other termination situations. The following table summarizes non-vested restricted stock awards as of the period ended December 31, 2015 : Restricted Stock Weighted Average Grant-Date Fair Value Balance as of December 31, 2014: — $ — Granted 1,521,000 1.53 Vested (97,825 ) 1.52 Forfeited (60,000 ) 1.52 Balance as of December 31, 2015: 1,363,175 $ 1.64 The Company recognized $540,000 in compensation expense related to restricted stock awards for the twelve months ended December 31, 2015 and the Company estimates there was $1.8 million in unrecognized compensation expense for restricted stock granted. |
RESTRICTED STOCK
RESTRICTED STOCK | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
RESTRICTED STOCK | STOCK OPTION PLAN The Company has a non-qualified stock option plan for certain key employees under which it is authorized to issue options for up to 1,542,773 shares of common stock. Options are granted at the discretion of the Company’s Board of Directors at an exercise price approximating market value, as determined by a committee of Board members. All options granted subsequent to a 1997 amendment will be 100% vested after either one or two years from the grant date and will expire after such a period as is determined by the Board at the time of grant. Options granted in 2014 have a two year vesting provision. There were no options granted during 2015 . A summary of option activity under the Plan for the year ended December 31, 2015 , is presented below: Shares Option Weighted Aggregate Outstanding at January 1, 2015 278,582 $ 4.86 Issued — — Exercised — — Forfeited 18,525 1.99 Expired 66,327 7.20 Balance at December 31, 2015 193,730 $ 4.33 1.76 $ 32,328 Exercisable at December 31, 2015 144,199 $ 5.23 1.28 $ 29,853 The weighted average exercise price of all exercisable options at December 31, 2015 is $5.23 . There were 214,845 shares reserved for future issuance under the Company’s stock option plan at December 31, 2015 . A summary of the status of the Company's non-vested options as of December 31, 2015 and changes during the year then ended is presented below: Shares Weighted average grant date fair value Non-vested - December 31, 2014 104,556 $ 0.86 Granted — — Vested 46,075 0.69 Forfeited/Expired 8,950 0.83 Non-vested - December 31, 2015 49,531 $ 1.03 As of December 31, 2015 and 2014 , there was $25,388 and $42,016 of unrecognized compensation cost related to non-vested options, respectively. Additional information concerning the Company’s stock options at December 31, 2015 is as follows: Exercise Price Number Contractual Number 1.15-1.69 46,075 2.19 46,075 1.70 - 2.99 93,650 2.21 44,148 3.00 - 40.78 41,700 0.16 41,671 40.79 12,305 2.07 12,305 193,730 1.76 144,199 The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions used for grants in 2015 and 2014 : 2015 2014 Dividend yield — 0 % Expected volatility — 73.30 % Risk free interest rate — 1.57 % Expected life — 5 years The weighted average fair value of options granted during 2014 was $1.03 There were no options granted during 2015 . RESTRICTED STOCK In January 2015, the Board of the Company approved and adopted the Four Oaks Fincorp, Inc. 2015 Restricted Stock Plan (the “Plan”). During 2015, the Company awarded 1,521,000 shares of the Company’s common stock at $1.00 par value per share to certain employees, directors and third party service providers in the form of restricted stock. Awards of performance based restricted stock vest in two separate tranches, 15% at the end of the one -year period ended on December 31, 2015, and 85% at the end of the three -year period ending on December 31, 2018 (each such period, a “Performance Period”), in each case based on the attainment of the performance measures and goals for that Performance Period. The performance measures for the one -year period which ended December 31, 2015 were (1) budgeted net income as set forth in the Company’s 2015 budget and (2) the Company having net income in each quarter of 2015. Budgeted net income must be achieved at the 70% threshold performance level in order for 10.5% of the awards to vest and at the 100% target performance level in order for 15% of the awards to vest. Where achievement against budgeted net income falls between these performance levels, the number of shares vested is determined based on straight-line interpolation. We achieved our targeted performance level for the one -year Performance Period ending December 31, 2015, and therefore 15% of the shares of restricted stock have now vested. If the performance goals had not been met, 15% of the awards would have been forfeited. The performance measures and related goals for the three -year period ending December 31, 2018 are based on cumulative earnings per share and were set by the compensation committee of the Board (the "Committee"), in its sole discretion as administrator of the Plan, in the fourth quarter of 2015. Earnings per share must be achieved at the 60% threshold performance level in order for 50% of the remaining awards to vest and at the 100% target performance level in order for 100% of the awards to vest. Where achievement against earnings per share falls between these performance levels, the number of shares vest also falls within these levels. Achievement of 70% , 80% , and 90% of target earnings per share results in vesting of 60% , 75% , and 87.5% respectively. Additionally, if 110% or more of the target performance level is obtained, 100% of the awards will vest and an additional 10% of the applicable restricted stock grant amount will be awarded to each recipient in fully-vested shares. Awards of time based restricted stock also vest in two separate tranches, 15% at the end of the one -year period ending on December 31, 2015, and 85% at the end of the three -year period ending on December 31, 2018. In order for these shares to vest, the recipient of the award generally must be employed by the Company on the vesting date. Any restricted stock that has not vested at the time of the termination of the recipient's service relationship will be forfeited; although, the Committee has the power, in its sole and absolute discretion, to accelerate vesting where such termination is a result of the recipient's death or disability or in other termination situations. The following table summarizes non-vested restricted stock awards as of the period ended December 31, 2015 : Restricted Stock Weighted Average Grant-Date Fair Value Balance as of December 31, 2014: — $ — Granted 1,521,000 1.53 Vested (97,825 ) 1.52 Forfeited (60,000 ) 1.52 Balance as of December 31, 2015: 1,363,175 $ 1.64 The Company recognized $540,000 in compensation expense related to restricted stock awards for the twelve months ended December 31, 2015 and the Company estimates there was $1.8 million in unrecognized compensation expense for restricted stock granted. |
OTHER EMPLOYEE BENEFITS
OTHER EMPLOYEE BENEFITS | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
OTHER EMPLOYEE BENEFITS | OTHER EMPLOYEE BENEFITS Supplemental Retirement In 1998, the Bank adopted a Supplemental Executive Retirement Plan (“SERP”) for its then president. The Company has purchased life insurance policies in order to provide future funding of benefit payments. SERP benefits accrued and vested during the period of employment and will be paid in annual benefit payments over the officer’s remaining life commencing with the officer’s retirement on December 31, 2015 . The liability accrued under the SERP plan amounts to $507,000 and $477,000 at December 31, 2015 and 2014 , respectively. Due to a change in the valuation of expected benefit payments, the expense attributable to the SERP amounted to $30,000 and $0 for 2015 and 2014 , respectively. Employment Agreements The Company has entered into employment agreements with certain of its executive officers to ensure a stable and competent management base. The agreements provide for benefits as spelled out in the contracts and cannot be terminated by the Company’s Board of Directors, except for cause, without triggering the officers’ rights to receive certain vested rights, including severance compensation. In addition, the Company has entered into additional severance compensation arrangements with certain of its executive officers and key employees to provide them with increased severance pay benefits in the event of a termination of employment following a change in control of the Company, as outlined in the agreements; the acquirer will be bound to the terms of the contracts. Defined Contribution Plan The Company sponsors a contributory profit-sharing plan in effect for substantially all employees. Participants may make voluntary contributions resulting in salary deferrals in accordance with Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”). The plan provides for employee contributions up to $17,500 of the participant's annual salary and an employer contribution of 50% matching of the first 6% of pre-tax salary contributed by each participant. For the year ended December 31, 2014 , the plan provided for employee contributions of up to $17,500 of the participants annual salary and an employer contribution of 25% matching of the first 6% of pre-tax salary contributed. Expenses related to these plans for the years ended December 31, 2015 and 2014 were $189,000 and $76,000 , respectively. Contributions under the plan are made at the discretion of the Company’s Board of Directors. Employee Stock Purchase and Bonus Plan The Employee Stock Purchase and Bonus Plan (the “Purchase Plan”) is a voluntary plan that enables full-time employees of the Company and its subsidiaries to purchase shares of the Company’s common stock. The Purchase Plan is administered by a committee of the Board of Directors, which has broad discretionary authority to administer the Purchase Plan. The Company’s Board of Directors may amend or terminate the Purchase Plan at any time. The Purchase Plan is not intended to be qualified as an employee stock purchase plan under Section 423 of the Code. Once a year, participants in the Purchase Plan purchase the Company’s common stock at fair market value. Participants are permitted to purchase shares under the Purchase Plan up to five percent ( 5% ) of their compensation, with a maximum purchase amount of $1,000 per year. The Company matches, in cash, fifty percent ( 50% ) of the amount of each participant’s purchase, up to $500 . After withholding for income and employment taxes, participants use the balance of the Company’s matching grant to purchase shares of the Company’s common stock. As of December 31, 2015 , 39,000 shares of the Company’s common stock had been reserved for future issuance under the Purchase Plan, and 480,000 total shares had been purchased to date. During the year ended December 31, 2015, 79,000 shares were purchased under the Purchase Plan. Sick Leave Plan The Company allows employees to accrue up to 60 days of sick leave that can be carried forward from one year to the next. Employees with 10 consecutive years of service who retire after age 55 are paid for unused sick leave up to a maximum of 60 days . As of December 31, 2015 and 2014 , the Company maintained an accrued liability for future obligations in the amount of $587,000 and $562,000 , respectively. Future obligations under the plan are assessed on an annual basis. Deferred compensation expenses under the plan totaled $68,000 and $82,000 for 2015 and 2014 , respectively. Cash benefits paid to retiring employees totaled $43,000 and $40,000 for 2015 and 2014 , respectively. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2015 | |
Leases [Abstract] | |
LEASES | LEASES The Company has entered into non-cancelable operating leases for seven facilities. Future minimum lease payments under the leases for future years are as follows (amounts in thousands): Leases 2016 $ 329 2017 240 2018 185 2019 178 2020 183 2021 and beyond 266 $ 1,381 Total rental expense under operating leases for the years ended December 31, 2015 and 2014 amounted to $373,000 and $327,000 , respectively. |
PARENT COMPANY FINANCIAL INFORM
PARENT COMPANY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2015 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
PARENT COMPANY FINANCIAL INFORMATION | PARENT COMPANY FINANCIAL INFORMATION Condensed financial information of Four Oaks Fincorp, Inc. at December 31, 2015 and 2014 , and for the years ended December 31, 2015 and 2014 is presented below (amounts in thousands): Condensed Balance Sheets 2015 2014 Assets: Cash and cash equivalents $ 1,362 $ 3,958 Equity investment in subsidiaries 81,638 61,937 Investment securities available-for-sale 11 11 Other assets 1,128 131 Total assets $ 84,139 $ 66,037 Liabilities and Shareholders’ Equity: Other liabilities $ 26 $ 936 Subordinated debentures 12,372 12,372 Subordinated promissory notes 11,500 12,000 Shareholders' equity 60,241 40,729 Total liabilities and shareholders’ equity $ 84,139 $ 66,037 For the Years Ended December 31, Condensed Statements of Operations 2015 2014 Equity in undistributed income (loss) of subsidiaries $ 20,367 $ (3,128 ) Interest income 27 5 Gain on sale of investments, available-for-sale — 109 Recovery of impairment loss on investment securities available-for-sale — 189 Other income 11 20 Other expenses (1,408 ) (1,384 ) Income (loss) before income taxes 18,997 (4,189 ) Applicable income tax benefit (1,011 ) — Net income (loss) $ 20,008 $ (4,189 ) Condensed Statements of Cash Flows 2015 2014 Operating activities: Net income (loss) $ 20,008 $ (4,189 ) Equity in undistributed loss of subsidiaries (20,367 ) 3,128 Gain on sale of investments — (298 ) (Increase) decrease in other assets (972 ) 16 (Decrease) increase in other liabilities (910 ) 199 Net cash used in operating activities (2,241 ) (1,144 ) Investing activities: Investment in subsidiaries — (19,157 ) Sales and maturities of securities — 1,560 Net cash used in investing activities — (17,597 ) Financing activities: Proceeds from issuance of common stock 170 22,243 Repayment of subordinated promissory notes (500 ) — Shares withheld for payment of taxes (25 ) — Net cash (used in) provided by financing activities (355 ) 22,243 Net (decrease) increase in cash and cash equivalents (2,596 ) 3,502 Cash and cash equivalents, beginning of year 3,958 456 Cash and cash equivalents, end of year $ 1,362 $ 3,958 |
ORGANIZATION AND SUMMARY OF S26
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts and transactions of the Company, a bank holding company incorporated under the laws of the State of North Carolina, and its wholly-owned subsidiaries, the Bank, and Four Oaks Mortgage Services, L.L.C., which has been inactive since September 30, 2012. All significant intercompany transactions have been eliminated. In March 2006, the Company formed Four Oaks Statutory Trust I, a wholly owned Delaware statutory business trust (the “Trust”), for the sole purpose of issuing Trust Preferred Securities (as defined in Note H - Trust Preferred Securities). The Trust is not included in the consolidated financial statements of the Company. Certain amounts previously presented in the Company's Consolidated Financial Statements for the prior periods have been reclassified to conform to current classifications. All such reclassifications had no impact on the prior period's Statements of Operations, Comprehensive Income (Loss), or Shareholders' Equity as previously reported. |
Use of Estimates | Use of Estimates Preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, fair value of impaired loans, fair value of foreclosed assets, other than temporary impairment of investment securities available-for-sale and held-to-maturity, and the valuation allowance against deferred tax assets. |
Cash and Cash Equivalents | Cash and Cash Equivalents For the purpose of presentation in the consolidated statements of cash flows, cash and cash equivalents are defined as those amounts included in the balance sheet captions cash and due from banks, and interest-earning deposits. Federal regulations require institutions to set aside specified amounts of cash as reserves against transactions and time deposits. |
Investment Securities | Investment Securities Investment securities are classified into three categories: (1) Held-to-Maturity - Debt securities that the Company has the positive intent and the ability to hold to maturity are classified as held-to-maturity and reported at amortized cost. (2) Trading - Debt and equity securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings. (3) Available-for-Sale - Debt and equity securities not classified as either securities held-to-maturity or trading securities are reported at fair value, with unrealized gains and losses excluded from earnings and reported, net of income taxes, as other comprehensive income, a separate component of shareholders' equity. Gains and losses on sales of securities, computed based on specific identification of adjusted cost of each security, are included in income at the time of the sale. Premiums and discounts are amortized into interest income using a method that approximates the interest method over the period to maturity. Transfers of securities into held-to-maturity from available-for-sale are made at fair value as of the transfer date. The unrealized gain or loss as of the transfer date is retained in accumulated other comprehensive income and in the carrying value of the held-to-maturity securities. The unrealized gain or loss is then amortized over the remaining life of the securities. |
Other Than Temporary Impairment | Each investment security in a loss position is evaluated for other-than-temporary impairment on at least a quarterly basis. The review includes an analysis of the facts and circumstances of each individual investment such as: (1) the length of time and the extent to which the fair value has been below cost, (2) changes in the earnings performance, credit rating, asset quality, or business prospects of the issuer, (3) the ability of the issuer to make principal and interest payments, (4) changes in the regulatory, economic, or technological environment of the issuer, and (5) changes in the general market condition of either the geographic area or industry in which the issuer operates. Regardless of these factors, if we have developed a plan to sell the security or it is likely that we will be forced to sell the security in the near future, then the impairment is considered other-than-temporary and the carrying value of the security is permanently written down to the current fair value with the difference between the new carrying value and the amortized cost charged to earnings. If we do not intend to sell the security and it is not more likely than not that we will be required to sell the security before recovery of its amortized cost basis less any current period credit loss, the other-than-temporary impairment is separated into the following: (1) the amount representing the credit loss and (2) the amount related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings and the amount of the total other-than-temporary impairment related to other factors is recognized in other comprehensive income, net of applicable taxes. |
Loans Held for Sale | Loans Held for Sale As part of the asset resolution plan (the "Asset Resolution Plan") executed during 2014, the Company transferred loans held for investment to loans held for sale in anticipation of near term loan sales. The Asset Resolution Plan was completed in the fourth quarter of 2015 and all loans not sold were transferred from loans held for sale to loans held for investment. Other loans held for sale generally represent single-family, residential first mortgage loans on a pre-sold basis originated by our mortgage division. Commitments to sell the residential first mortgage loans are made after the intent to proceed with mortgage applications are initiated with borrowers, and all necessary components of the loan are approved according to secondary market underwriting standards of the investor that purchases the loan. Upon closing, these loans, together with their servicing rights, are sold to mortgage loan investors under prearranged terms. Loans held for sale are measured at the lower of cost or fair value on an aggregated basis within the consolidated balance sheet under the caption “loans held for sale”. |
Rate Lock Commitments | Rate Lock Commitments The Company enters into commitments to originate loans whereby the interest rate on the loan is determined prior to funding (rate lock commitments). As required by Accounting Standard Codification ("ASC") ASC 815, Derivatives and Hedging , rate lock commitments related to the origination of mortgage loans held for sale and the corresponding forward loan sale commitments are considered to be derivatives. The commitments are generally for periods of 60 days and are at market rates. In order to mitigate the risk from interest rate fluctuations, the Company enters into forward loan sale commitments on a “best efforts” basis while the loan is in the pipeline. Interest rate lock commitments and forward sales commitments are not material to the financial statements for any period presented. |
Loans, Allowance for Loan Losses and Foreclosed Assets | Foreclosed Assets Assets acquired as a result of foreclosure are valued at fair value, less estimated selling costs, at the date of foreclosure establishing a new cost basis. After foreclosure, valuations of the property are periodically performed by management and the assets are carried at the lower of cost or fair value minus estimated costs to sell. Losses from the acquisition of property in full or partial satisfaction of debt are treated as credit losses. Routine holding costs, subsequent declines in value, and gains or losses on disposition are included in other income and expense. Allowance for Loan Losses The allowance for loan losses is established through periodic charges to earnings in the form of a provision for loan losses. Increases to the allowance for loan losses occur as a result of provisions charged to operations and recoveries of amounts previously charged-off, and decreases to the allowance occur when loans are charged-off because management believes that the uncollectibility of a loan balance is confirmed. Management evaluates the adequacy of our allowance for loan losses on at least a quarterly basis. The evaluation of the adequacy of the allowance for loan losses involves the consideration of loan growth, loan portfolio composition and industry diversification, historical loan loss experience, current delinquency levels, adverse conditions that might affect a borrower’s ability to repay the loan, estimated value of underlying collateral, prevailing economic conditions and all other relevant factors derived from our history of operations. Additionally, regulatory agencies review our allowance for loan losses and may require additional provisions for estimated losses based on judgments that differ from those of management. Management has developed a model for evaluating the adequacy of the allowance for loan losses. The model uses the Company’s internal grading system to quantify the risk of each loan. The grade is initially assigned by the lending officer and/or the credit administration function. The internal grading system is reviewed and tested periodically by an independent internal loan review function as well as an independent external credit review firm. The testing process involves the evaluation of a sample of new loans, loans having been identified as possessing potential weakness in credit quality, and past due and nonaccrual loans to determine the ongoing effectiveness of the internal grading system. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company's allowance for loan losses. Such agencies may require us to recognize adjustments to the allowance based on their judgments of information available to them at the time of their examination. The grading system is comprised of seven risk categories for active loans. Grades 1 through 4 demonstrate various degrees of risk, but each is considered to have the capacity to perform in accordance with the terms of the loan. Loans possessing a grade of 5 exhibit characteristics which indicate higher risk that the loan may not be able to perform in accordance with the terms of the loan. Grade 6 loans are considered substandard and are generally impaired. Grade 7 loans are considered doubtful and would be included in nonaccrual loans. Grade 8 loans are considered uncollectable and identified as a confirmed loss. Loans can also be classified as non-accrual, troubled debt restructuring ("TDR"), or otherwise impaired, all of which are considered impaired. Once a loan has been determined to meet the definition of impairment, the amount of that impairment is measured through one of the following methods: a calculation of the net present value of the expected future cash flows of the loan discounted by the effective interest rate of the loan or by determining the fair market value of the underlying collateral securing the loan. If the fair market value of collateral method is selected for use, an updated collateral value is generally obtained based on where the loan is in the collection process and the age of the existing appraisal. Groups of small dollar impaired loans with similar risk characteristics are evaluated for impairment collectively. Other impaired loans are then analyzed individually to determine the net value of collateral or cash flows and an estimate of potential loss. The net value of collateral per our analysis is determined using various subjective discounts, selling expenses and a review of the assumptions used to generate the current appraisal. If collection is deemed to be collateral dependent then the deficiency is generally charged off. Appraised values on real estate collateral are subject to constant change and management makes certain assumptions about how the age of an appraisal impacts current value. Impaired loans are re-evaluated periodically to determine the adequacy of specific reserves and charge-offs. Groups of small dollar impaired loans with similar risk characteristics may be evaluated for impairment collectively. Loans that are not assessed for specific reserves under FASB ASC 310-10 are reserved for under FASB ASC 450. The loans analyzed under FASB ASC 450 are assigned a reserve based on a quantitative factor and a qualitative factor. The quantitative factor is based on historical charge-off levels and is adjusted for the loan's risk grade. The qualitative factors address loan growth, loan portfolio composition and industry diversification, historical loan loss experience, current delinquency levels, prevailing economic conditions and all other relevant factors derived from our history of operations. Together these two components comprise the ASC 450, or general reserve. During 2015, the Company enhanced its ALLL methodology by increasing the look back period used to calculate historical loss rates for the quantitative ASC 450 reserve. In prior periods, the Company calculated historical loss rates from the most recent three years on a rolling quarter basis but this was increased to the most recent five years on a rolling quarter basis. This change was made in an effort to provide a more precise estimate of potential losses and to provide for the highest base charge-off rate regardless of whether the historical charge-offs are improving or declining. In addition, the Bank assigns a different percentage ("multiplier") of the base charge-off rate to the balances for each risk grade within a loan category to reflect the varied risk of charge-off for each. The standard multipliers range from 0% for a risk grade 1 and 300% for a risk grade 6 that is unimpaired. In addition, categories that have a concentrated level of charge-offs associated with a particular risk grade could have an additional reserve factor of 50% to 100% added to that particular risk grade. Categories that have had historically high charge-offs also have an additional reserve factor between 25% to 100% added to the risk grade 5s and 6s to account for the additional risk in those categories. The reserve amount by risk grade is calculated and then combined for a blended quantitative reserve factor for each loan category. The allowance for loan losses represents management’s estimate of an appropriate amount to provide for known and inherent losses in the loan portfolio in the normal course of business. While management believes the methodology used to establish the allowance for loan losses incorporates the best information available at the time, future adjustments to the level of the allowance may be necessary and the results of operations could be adversely affected should circumstances differ substantially from the assumptions initially used. We believe that the allowance for loan losses was established in conformity with generally accepted accounting principles. However, upon examination by various regulatory agencies, adjustments to the allowance may be required. Likewise, there can be no assurance that the existing allowance for loan losses is adequate should there be deterioration in the quality of any loans or changes in any of the factors discussed above. Any increases in the provision for loan losses resulting from such deterioration or change in condition could adversely affect our financial condition and results of operations. Loans Loans are stated at the amount of unpaid principal, reduced by an allowance for loan losses. Interest on all loan classifications is calculated by using the simple interest method on daily balances of the principal amount outstanding. Loan origination fees are deferred, as well as certain direct loan origination costs. Such costs and fees are recognized as an adjustment to yield over the contractual lives of the related loans utilizing the interest method. For all classes of loans, a loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect full repayment of all principal and accrued interest when due either under the terms of the original loan agreement or within reasonably modified contractual terms. Once a loan has been determined to meet the definition of impairment, the amount of that impairment is measured through one of the following methods; a calculation of the net present value of the expected future cash flows of the loan discounted by the effective interest rate of the loan or by determining the fair market value of the underlying collateral securing the loan. If a deficit is calculated, the amount of the measured impairment results in the establishment of a specific valuation allowance or charge-off, and is incorporated into the Bank's allowance for loan and lease losses ("ALLL"). Groups of small dollar impaired loans with similar risk characteristics are evaluated for impairment collectively. |
Income Recognition on Impaired and Nonaccrual Loans | Income Recognition on Impaired and Nonaccrual Loans Loans, including impaired loans, are generally classified as nonaccrual when doubts arise regarding the full collectibility of principal or interest and we are therefore uncertain that the borrower can satisfy the contractual terms of the loan agreement. In addition our policy is to place a loan on nonaccrual status at the point when the loan becomes past due 90 days unless there is sufficient documentation to establish that the loan is well secured and in the process of collection. If a loan or a portion of a loan is classified as doubtful or is partially charged-off, the loan is generally classified as nonaccrual. While a loan is classified as nonaccrual and the future collectibility of the recorded loan balance is doubtful, collections of interest and principal are generally applied as a reduction to the principal outstanding, except in the case of loans with scheduled amortizations where the payment is generally applied to the oldest payment due. When the future collectibility of the recorded loan balance is expected, interest income may be recognized on a cash basis. In the case where a nonaccrual loan had been partially charged-off, recognition of interest on a cash basis is limited to that which would have been recognized on the recorded loan balance at the contractual interest rate. Receipts in excess of that amount are recorded as recoveries to the allowance for loan losses until prior charge-offs have been fully recovered. |
Bank Premises and Equipment | Bank Premises and Equipment Land is carried at cost. Buildings, furniture, and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method based on the estimated useful lives of assets. Useful lives range from 5 to 10 years for furniture and equipment and 40 years for buildings. Expenditures for repairs and maintenance are charged to expense as incurred. |
Income Taxes | Income Taxes Accrued taxes represent the estimated amount payable to or receivable from taxing jurisdictions, either currently or in the future, and are reported, on a net basis, as a component of “other assets” in the consolidated balance sheets. The calculation of the Company’s income tax expense is complex and requires the use of many estimates and judgments in its determination. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. These temporary differences consist primarily of the allowance for loan losses, differences in the financial statement and income tax basis in premises and equipment and differences in financial statement and income tax basis in accrued liabilities. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that the tax benefits will not be fully realized. Management’s determination of the realization of the net deferred tax asset is based upon management’s judgment of various future events and uncertainties, including the timing and amount of future income and the implementation of various tax plans to maximize realization of the deferred tax asset. From time to time, management bases the estimates of related tax liabilities on its belief that future events will validate management’s current assumptions regarding the ultimate outcome of tax-related exposures. While the Company has obtained the opinion of advisors that the anticipated tax treatment of these transactions should prevail and has assessed the relative merits and risks of the appropriate tax treatment, examination of the Company’s income tax returns, changes in tax law and regulatory guidance may impact the treatment of these transactions and resulting provisions for income taxes. |
Stock Compensation Plans | Stock Compensation Plans The Company accounts for stock based awards granted to employees using the fair value method. The cost of employee services received in exchange for an award of equity instruments in the financial statements over the period the employee is required to perform the services in exchange for the award (usually the vesting period). The cost of employee services received in exchange for an award is based on the grant-date fair value of the award. Excess tax benefits are reported as financing cash inflows, rather than as a reduction of taxes paid, which is included within operating cash flows. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) , which will require lessees to be recorded as an asset on the balance sheet for the right to use the leased asset and a liability for the corresponding lease obligation for leases with terms of more than 12 months. The accounting treatment for lessors will remain relatively unchanged. The ASU also requires additional qualitative and quantitative disclosures related to the nature, timing and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . This update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The existing recognition and measurement guidance for debt issuance costs are not affected by this update. ASU 2015-03 is effective for annual and interim reporting periods beginning after December 15, 2015. The Company does not believe the adoption of this update will have a material impact on the Company’s consolidated financial statements. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . This update requires management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date the financial statements are issued. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that an entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. If the substantial doubt is alleviated as a result of consideration of management’s plans, the entity should disclose information that enables financial statement users to understand the principal conditions or events that raised substantial doubt, management’s evaluation of the conditions and management’s plans to alleviate the substantial doubt. If substantial doubt exists about an entity’s ability to continue as a going concern, and the substantial doubt is not alleviated after consideration of management’s plans, an entity should include a statement in the footnotes indicating that there is substantial doubt about the entity’s ability to continue as a going concern. The amendments in this update become effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company does not believe the adoption of this update will have a material impact on the Company’s consolidated financial statements. In August 2014, the FASB issued ASU No. 2014-14, Receivables–Troubled Debt Restructurings by Creditors (Subtopic 310-40): Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure . This update addresses classification of government-guaranteed mortgage loans, including those where guarantees are offered by the Federal Housing Administration (“FHA”), the U.S. Department of Housing and Urban Development (“HUD”), and the U.S. Department of Veterans Affairs (“VA”). Although current accounting guidance stipulates proper measurement and classification in situations where a creditor obtains from a debtor, assets in satisfaction of a receivable (such as through foreclosure), current guidance does not specify how to measure and classify foreclosed mortgage loans that are government-guaranteed. Under the provisions of this update, a creditor would derecognize a mortgage loan that has been foreclosed upon, and recognize a separate receivable if the following conditions are met: (1) The loan has a government guarantee that is not separable from the loan before foreclosure, (2) At the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim, and (3) At the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. The amendments within this update are effective for annual and interim periods beginning after December 15, 2014. The adoption of the new guidance did not have a material impact on the Company's consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) which supersedes the revenue recognition requirements of Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition , and most industry-specific guidance on revenue recognition throughout the ASC. The new standard is principles based and provides a five step model to determine when and how revenue is recognized. The core principle of the new standard is that revenue should be recognized when a company transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard also requires disclosure of qualitative and quantitative information surrounding the amount, nature, timing and uncertainty of revenues and cash flows arising from contracts with customers. On August 12, 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which defers the effective date of the new revenue recognition standard by one year. Based on ASU 2015-14, public organizations would apply the new revenue standard to annual reporting periods beginning after December 15, 2017. Early adoption is permitted, but not before the original effective date (i.e., interim and annual reporting periods beginning after December 15, 2016). The Company is currently evaluating the impact of adoption of the new standard on its consolidated financial statements. In January 2014, the FASB issued ASU No. 2014-04, Receivables–Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure. This update clarifies that an in-substance repossession or foreclosure occurs upon either the creditor obtaining legal title to the residential real estate property or the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. This amendment is effective for annual and interim periods beginning after December 15, 2014. The adoption of the new guidance did not have a material impact on the Company's consolidated financial statements. Other accounting standards that have been issued by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations and cash flows. From time to time the FASB issues exposure drafts for proposed statements of financial accounting standards. Such exposure drafts are subject to comment from the public, to revisions by the FASB and to final issuance by the FASB as statements of financial accounting standards. Management considers the effect of the proposed statements on the consolidated financial statements of the Company and monitors the status of changes to and proposed effective dates of exposure drafts. |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Income (Loss) Per Share | Basic and diluted net income (loss) per common share have been computed based upon net income (loss) as presented in the accompanying consolidated statements of operations divided by the weighted average number of common shares outstanding or assumed to be outstanding as summarized below (amounts in thousands, except share data) : Twelve Months Ended December 31, 2015 2014 Net income (loss) available to common shareholders $ 20,008 $ (4,189 ) Weighted average number of common shares - basic 32,103,671 17,484,541 Effect of dilutive stock options 15,776 — Effect of dilutive restricted stock awards 128,276 — Weighted average number of common shares - dilutive 32,247,723 17,484,541 Basic earnings (loss) per common share $ 0.62 $ (0.24 ) Diluted earnings (loss) per common share $ 0.62 $ (0.24 ) Anti-dilutive awards 147,655 227,407 |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Amortized Cost, Gross Unrealized Gains, Gross Unrealized Losses, and Fair Values of Securities Available for Sale | The amortized cost, gross unrealized gains, gross unrealized losses, and fair values of securities available-for-sale as of December 31, 2015 and 2014 are as follows (amounts in thousands): Securities Available-for-Sale At December 31 2015 2014 Amortized Gross Gross Fair Amortized Gross Gross Fair Taxable municipal securities $ 24,789 $ 225 $ 447 $ 24,567 $ 16,412 $ 686 $ 20 $ 17,078 Mortgage-backed securities GNMA 13,512 68 50 13,530 16,204 163 103 16,264 FNMA & FHLMC 32,024 — 351 31,673 30,992 — 134 30,858 Other debt securities 500 — — 500 — — — — Equity securities 11 — — 11 11 — — 11 Total $ 70,836 $ 293 $ 848 $ 70,281 $ 63,619 $ 849 $ 257 $ 64,211 |
Schedule of Amortized Cost, Gross Unrealized Gains, Gross Unrealized Losses, and Fair Values of Securities Held to Maturity | The amortized cost, gross unrealized gains, gross unrealized losses, and fair values of securities held-to-maturity as of December 31, 2015 and 2014 are as follows ( amounts in thousands): Securities Held-to-Maturity At December 31 2015 2014 Amortized Gross Gross Fair Amortized Gross Gross Fair Taxable municipal securities $ 3,531 $ 1 $ 20 $ 3,512 $ 3,584 $ — $ 28 $ 3,556 Mortgage-backed securities GNMA 59,185 509 230 59,464 74,482 887 244 75,125 FNMA 2,638 19 — 2,657 3,517 44 — 3,561 Total $ 65,354 $ 529 $ 250 $ 65,633 $ 81,583 $ 931 $ 272 $ 82,242 |
Schedule of Unrealized Losses and Fair Values of Investment Securities | The following tables reflect the gross unrealized losses and fair values of securities available-for-sale, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at the dates presented. (amounts in thousands): Securities Available-for-Sale 12/31/2015 Less Than 12 Months 12 Months or More Total Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Taxable municipal securities $ 16,888 $ 447 $ — $ — $ 16,888 $ 447 Mortgage-backed securities GNMA 10,010 50 — — 10,010 50 FNMA & FHLMC 31,673 351 — — 31,673 351 Total temporarily impaired securities $ 58,571 $ 848 $ — $ — $ 58,571 $ 848 Securities Available-for-Sale 12/31/2014 Less Than 12 Months 12 Months or More Total Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Taxable municipal securities $ 2,580 $ 20 $ — $ — $ 2,580 $ 20 Mortgage-backed securities GNMA 7,425 103 — — 7,425 103 FNMA & FHLMC 30,858 134 — — 30,858 134 Total temporarily impaired securities $ 40,863 $ 257 $ — $ — $ 40,863 $ 257 The following tables reflect the gross unrealized losses and fair values of securities held-to-maturity, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at the dates presented. (amounts in thousands): Securities Held-to-Maturity 12/31/2015 Less Than 12 Months 12 Months or More Total Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Taxable municipal securities $ 3,325 $ 20 $ — $ — $ 3,325 $ 20 Mortgage-backed securities GNMA 20,784 116 5,130 114 25,914 230 Total temporarily impaired securities $ 24,109 $ 136 $ 5,130 $ 114 $ 29,239 $ 250 Securities Held-to-Maturity 12/31/2014 Less Than 12 Months 12 Months or More Total Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Taxable municipal securities $ — $ — $ 3,556 $ 28 $ 3,556 $ 28 Mortgage-backed securities GNMA 7,594 41 12,240 203 19,834 244 Total temporarily impaired securities $ 7,594 $ 41 $ 15,796 $ 231 $ 23,390 $ 272 |
Roll Forward of Credit Losses on Debt Securities | The following table shows a roll forward of the amount related to credit losses recognized on debt securities held by the Company for which a portion of an other-than-temporary impairment was recognized in other comprehensive income (amounts in thousands): 2015 2014 Balance of credit losses on debt securities at the beginning of the period $ — $ 75 Income received on other-than-temporary impaired debt securities — (75 ) Balance of credit losses on debt securities at the end of the period $ — $ — |
Investment Securities Classified by Contractual Maturities | The amortized cost and fair value of available-for-sale and held-to-maturity securities at December 31, 2015 by expected maturities are shown below (amounts in thousands). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Available-for-Sale Taxable municipal securities Mortgage-backed securities - GNMA Mortgage-backed securities - FNMA & FHLMC Other Debt Securities Amortized Fair Value Amortized Fair Value Amortized Fair Value Amortized Cost Fair Value Due within one year $ — $ — $ — $ — $ — $ — $ — $ — Due after one year through five years — — — — — — — — Due after five years through ten years — — — — — — 500 500 Due after ten years 24,789 24,567 13,512 13,530 32,024 31,673 — — Total Munis, GNMA, FNMA & FHLMC and Other Debt securities $ 24,789 $ 24,567 $ 13,512 $ 13,530 $ 32,024 $ 31,673 $ 500 $ 500 Securities without a specific maturity: Equity securities 11 11 Total other securities $ 11 $ 11 Held-to-Maturity Taxable municipal securities Mortgage-backed securities - GNMA Mortgage-backed securities - FNMA Amortized Fair Value Amortized Fair Value Amortized Fair Value Due within one year $ 100 $ 100 $ — $ — $ — $ — Due after one year through five years 2,367 2,351 — — — — Due after five years through ten years 1,064 1,061 5,291 5,425 2,638 2,657 Due after ten years — — 53,894 54,039 — — Total Munis, GNMA, and FNMA securities $ 3,531 $ 3,512 $ 59,185 $ 59,464 $ 2,638 $ 2,657 |
LOANS AND ALLOWANCE FOR LOAN 29
LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Summary of Loans Outstanding | The classification of loan segments as of December 31, 2015 and 2014 are summarized as follows (amounts in thousands): 2015 2014 Commercial and industrial $ 23,163 $ 24,286 Commercial construction and land development 50,510 53,642 Commercial real estate 208,737 200,510 Residential construction 36,618 28,130 Residential mortgage 128,442 135,022 Consumer 6,638 7,248 Other 1,257 499 Consumer credit cards 2,240 2,276 Business credit cards 1,168 1,251 458,773 452,864 Net deferred loan fees (460 ) (608 ) Allowance for loan losses (9,616 ) (9,377 ) Total net loans $ 448,697 $ 442,879 Loans held for sale $ 1,145 $ 2,882 |
Summary of Nonperforming Assets | Nonperforming assets at December 31, 2015 and 2014 consist of the following (amounts in thousands): 2015 2014 Loans past due ninety days or more and still accruing $ 65 $ 17 Nonaccrual loans 6,598 8,259 Loans held for sale - nonperforming — 1,865 Foreclosed assets 1,760 3,782 Total $ 8,423 $ 13,923 |
Reconciliation of Related Party Loans | The Company had loan and deposit relationships with directors, executive officers, and associates of these parties as of December 31, 2015 and 2014 . The following is a reconciliation of these loans (amounts in thousands): 2015 2014 Beginning balance $ 8,777 $ 9,840 New loans 1,689 1,539 Principal repayments (1,716 ) (2,602 ) Ending balance $ 8,750 $ 8,777 |
Summary of Segments of Loans by Grade | The following tables illustrate the credit risk profile by creditworthiness class as of December 31, 2015 and 2014 (amounts in thousands) : December 31, 2015 Commercial and Commercial Commercial Residential - Residential - Consumer - Other - Loans Total 1 - Lowest Risk $ 1,942 $ — $ — $ — $ — $ 1,773 $ — $ 3,715 2 - Strong 971 749 2,280 — 15,187 386 7 19,580 3 - Standard 10,530 11,262 94,357 4,296 56,493 1,250 469 178,657 4 - Acceptable 9,297 33,832 103,740 31,431 50,226 3,170 757 232,453 5 - Special Mention 304 2,486 4,444 170 5,231 59 — 12,694 6 - Substandard or worse (1) 119 2,181 3,916 721 1,305 — 24 8,266 $ 23,163 $ 50,510 $ 208,737 $ 36,618 $ 128,442 $ 6,638 $ 1,257 $ 455,365 (1) The above table does not include business and consumer credit cards. December 31, 2014 Commercial and Commercial Commercial Residential - Residential - Consumer - Other - Total 1 - Lowest Risk $ 2,099 $ — $ — $ — $ — $ 1,638 $ — $ 3,737 2 - Strong 606 630 2,206 — 14,794 314 11 18,561 3 - Standard 9,506 10,625 81,761 1,893 53,007 3,556 225 160,573 4 - Acceptable 11,932 34,709 110,683 26,074 56,359 1,186 146 241,089 5 - Special Mention 143 1,892 3,989 — 8,720 62 117 14,923 6 - Substandard or worse (1) — 5,786 1,871 163 2,142 492 — 10,454 $ 24,286 $ 53,642 $ 200,510 $ 28,130 $ 135,022 $ 7,248 $ 499 $ 449,337 (1) The above table does not include business and consumer credit cards and loans held for sale. As of December 31, 2014 , there were $2.5 million in risk grade 6 loans classified as held for sale. The following table illustrates the credit card portfolio exposure as of December 31, 2015 and 2014 (amounts in thousands) : December 31, 2015 December 31, 2014 Consumer - Business - Consumer - Business - Performing $ 2,211 $ 1,133 $ 2,263 $ 1,248 Nonperforming 29 35 13 3 $ 2,240 $ 1,168 $ 2,276 $ 1,251 |
Age Analysis of Past Due Loans | The following tables illustrate the age analysis of past due loans by loan class as of December 31, 2015 and 2014 (amounts in thousands) : December 31, 2015 30-89 Days Past Due Nonaccrual Greater than 90 Days Past Due Total Past Due Current Total Loans Commercial & industrial $ 56 $ 119 $ — $ 175 $ 22,988 $ 23,163 Commercial construction & land development 211 1,626 — 1,837 48,673 50,510 Commercial real estate — 2,929 — 2,929 205,808 208,737 Residential construction 133 721 — 854 35,764 36,618 Residential mortgage 499 1,203 — 1,702 126,740 128,442 Consumer 71 — — 71 6,567 6,638 Consumer credit cards 95 — 29 124 2,116 2,240 Business credit cards 107 — 36 143 1,025 1,168 Other loans — — — — 1,257 1,257 Total $ 1,172 $ 6,598 $ 65 $ 7,835 $ 450,938 $ 458,773 December 31, 2014 30-89 Days Past Due Nonaccrual (1) Greater than 90 Days Past Due Total Past Due Current Total Loans Commercial & industrial $ 14 $ — $ — $ 14 $ 24,272 $ 24,286 Commercial construction & land development 27 5,533 — 5,560 48,082 53,642 Commercial real estate — 983 — 983 199,527 200,510 Residential construction — — — — 28,130 28,130 Residential mortgage 1,058 1,271 — 2,329 132,693 135,022 Consumer 82 472 — 554 6,694 7,248 Consumer credit cards 46 — 14 60 2,216 2,276 Business credit cards 41 — 3 44 1,207 1,251 Other loans 84 — — 84 415 499 Total $ 1,352 $ 8,259 $ 17 $ 9,628 $ 443,236 $ 452,864 (1) The above table includes loans held for investment only. As of December 31, 2014 , there were $67,000 in loans 30-89 days past due and $1.9 million in loans on nonaccrual classified as held for sale. |
Summary of Impaired Loans | December 31, 2014 Recorded (1) Unpaid Related Interest With no related allowance recorded: Commercial construction & land development $ 5,445 $ 6,454 $ — $ 6,715 $ 15 Commercial real estate 3,468 4,295 — 4,103 139 Residential mortgage 2,030 1,614 — 2,279 59 Consumer 467 729 — 524 — Subtotal: $ 11,410 $ 13,092 $ — $ 13,621 $ 213 With an allowance recorded: Commercial construction & land development $ 1,433 $ 2,656 $ 580 $ 1,866 $ 92 Commercial real estate 372 379 17 378 19 Residential mortgage 192 169 61 224 5 Consumer 8 6 5 8 — Subtotal: $ 2,005 $ 3,210 $ 663 $ 2,476 $ 116 Totals: Commercial $ 10,718 $ 13,784 $ 597 $ 13,062 $ 265 Consumer 475 735 5 532 — Residential 2,222 1,783 61 2,503 64 Grand Total: $ 13,415 $ 16,302 $ 663 $ 16,097 $ 329 (1) The above table includes loans held for investment only. As of December 31, 2014 , there were $2.4 million in impaired loans classified as held for sale and there were no reserves recorded for these loans. The following tables illustrate the impaired loans by loan class as of December 31, 2015 and 2014 ( amounts in thousands ): December 31, 2015 Recorded Unpaid Related Average Interest With no related allowance recorded: Commercial and industrial $ 67 $ 67 $ — $ 63 $ 3 Commercial construction & land development 737 1,706 — 1,031 19 Commercial real estate 2,258 2,614 — 2,020 50 Residential construction 721 722 — 408 8 Residential mortgage 1,305 1,312 — 1,191 51 Subtotal: $ 5,088 $ 6,421 $ — $ 4,713 $ 131 With an allowance recorded: Commercial and industrial $ 52 $ 63 $ 7 $ 58 $ 4 Commercial construction & land development 1,948 3,020 1,006 2,086 122 Commercial real estate 1,699 1,699 228 1,713 79 Residential mortgage 139 217 20 183 8 Subtotal: $ 3,838 $ 4,999 $ 1,261 $ 4,040 $ 213 Totals: Commercial $ 6,761 $ 9,169 $ 1,241 $ 6,971 $ 277 Residential 2,165 2,251 20 1,782 67 Grand Total $ 8,926 $ 11,420 $ 1,261 $ 8,753 $ 344 |
Summary of Troubled Debt Restructurings by Loan Class | The following table presents a breakdown of TDRs by loan class and the type of concession made to the borrower as of December 31, 2014 (amounts in thousands, except number of loans): For the Year Ended December 31, 2014 Number of loans Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Extended payment terms: Consumer 1 $ 4 $ 4 Subtotal 1 $ 4 $ 4 Forgiveness of principal: Commercial construction and land development 2 $ 100 $ 43 Subtotal 2 $ 100 $ 43 Total 3 $ 104 $ 47 |
Analysis of the Allowance for Loan Losses by Loan Class | Following is an analysis of the allowance for loan losses by loan segment as of and for the years ended December 31, 2015 and 2014 (amounts in thousands): December 31, 2015 Real Estate Allowances for loan losses: Commercial and Industrial Commercial construction and land development Commercial real estate Residential construction Residential mortgage Consumer Other Totals Balance, beginning of period $ 119 $ 5,105 $ 2,382 $ 436 $ 1,206 $ 89 $ 40 $ 9,377 Provision for loan losses (58 ) (615 ) 71 (90 ) 497 121 74 — Loans charged-off (74 ) (196 ) (578 ) (41 ) (713 ) (210 ) (69 ) (1,881 ) Recoveries 234 1,176 393 — 201 113 3 2,120 Net (charge-offs) recoveries 160 980 (185 ) (41 ) (512 ) (97 ) (66 ) 239 Balance, end of period $ 221 $ 5,470 $ 2,268 $ 305 $ 1,191 $ 113 $ 48 $ 9,616 Ending balance: individually evaluated for impairment $ 2 $ 989 $ 228 $ — $ — $ — $ — $ 1,219 Ending balance: collectively evaluated for impairment (1) $ 219 $ 4,481 $ 2,040 $ 305 $ 1,191 $ 113 $ 48 $ 8,397 Loans: Balance, end of period $ 24,331 $ 50,510 $ 208,737 $ 36,618 $ 128,442 $ 8,878 $ 1,257 $ 458,773 Ending balance: individually evaluated for impairment $ 84 $ 2,564 $ 3,957 $ 721 $ 1,305 $ — $ — $ 8,631 Ending balance: collectively evaluated for impairment (1) $ 24,247 $ 47,946 $ 204,780 $ 35,897 $ 127,137 $ 8,878 $ 1,257 $ 450,142 (1) At December 31, 2015 , there were $295,000 in impaired loans collectively evaluated for impairment with $42,000 in reserves established. December 31, 2014 Real Estate Allowances for loan losses: Commercial and Industrial Commercial construction and land development Commercial real estate Residential construction Residential mortgage Consumer Other Totals Balance, beginning of period $ 487 $ 5,037 $ 2,981 $ 713 $ 2,146 $ 188 $ 38 $ 11,590 Provision for loan losses (84 ) 2,778 2,382 (106 ) 3,041 (36 ) (21 ) 7,954 Loans charged-off (492 ) (3,107 ) (3,315 ) (171 ) (4,847 ) (183 ) — (12,115 ) Recoveries 208 397 334 — 866 120 23 1,948 Net (charge-offs) recoveries (284 ) (2,710 ) (2,981 ) (171 ) (3,981 ) (63 ) 23 (10,167 ) Balance, end of period $ 119 $ 5,105 $ 2,382 $ 436 $ 1,206 $ 89 $ 40 $ 9,377 Ending balance: individually evaluated for impairment $ — $ 516 $ 4 $ — $ — $ 4 $ — $ 524 Ending balance: collectively evaluated for impairment (1) $ 119 $ 4,589 $ 2,378 $ 436 $ 1,206 $ 85 $ 40 $ 8,853 Loans: Balance, end of period $ 25,537 $ 53,642 $ 200,510 $ 28,130 $ 135,022 $ 9,524 $ 499 $ 452,864 Ending balance: individually evaluated for impairment $ — $ 6,678 $ 3,801 $ — $ 2,030 $ 471 $ — $ 12,980 Ending balance: collectively evaluated for impairment (1) $ 25,537 $ 46,964 $ 196,709 $ 28,130 $ 132,992 $ 9,053 $ 499 $ 439,884 (1) At December 31, 2014 , there were $436,000 in impaired loans collectively evaluated for impairment with $139,000 in reserves established. |
BANK PREMISES AND EQUIPMENT (Ta
BANK PREMISES AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Premises and Equipment | Company premises and equipment at December 31, 2015 and 2014 are as follows (amounts in thousands): 2015 2014 Land $ 4,394 $ 4,394 Buildings and leasehold improvements 11,312 11,189 Furniture and equipment 5,182 11,411 Construction in process 1,467 562 22,355 27,556 Less accumulated depreciation (10,062 ) (15,661 ) $ 12,293 $ 11,895 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Banking and Thrift [Abstract] | |
Schedule of Maturities of Time Deposits | At December 31, 2015 , the scheduled maturities of time deposits are as follows (amounts in thousands): Less than $100,000 Total 2016 $ 44,628 $ 94,570 $ 139,198 2017 22,174 32,320 54,494 2018 7,518 10,612 18,130 2019 1,790 4,347 6,137 2020 2,803 7,338 10,141 2021 and beyond 153 1,823 1,976 Total time deposits $ 79,066 $ 151,010 $ 230,076 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Federal Home Loan Bank, Advances | At December 31, 2015 and 2014 , borrowed funds included the following FHLB advances (amounts in thousands): Maturity Interest Rate 2015 2014 June 5, 2017 4.35% Fixed $ — $ 10,000 July 3, 2017 4.36% Fixed — 13,000 July 31, 2017 4.35% Fixed — 5,000 August 14, 2017 4.08% Fixed — 5,000 August 14, 2017 3.94% Fixed 5,000 5,000 October 4, 2017 3.95% Fixed — 7,000 February 5, 2018 2.06% Fixed 10,000 10,000 June 5, 2018 2.25% Fixed 5,000 5,000 June 5, 2018 2.55% Fixed 5,000 5,000 June 5, 2018 3.03% Fixed 5,000 5,000 September 10, 2018 3.14% Fixed 10,000 10,000 September 18, 2018 2.71% Fixed 10,000 10,000 February 22, 2016 0.48% Fixed 10,000 — $ 60,000 $ 90,000 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Allocation of income tax expense between current and deferred portions is as follows (amounts in thousands): Years Ended December 31, 2015 2014 Current tax expense (benefit): Federal $ 34 $ — State — — 34 — Deferred tax expense (benefit): Federal (15,184 ) — State (1,330 ) — (16,514 ) — Income tax benefit $ (16,480 ) $ — |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of expected income tax at the statutory federal rate of 34% with income tax expense is as follows (amounts in thousands): Years Ended December 31, 2015 2014 Expense computed at statutory rate of 34% $ 1,200 $ (1,424 ) Effect of state income taxes, net of federal benefit (790 ) 39 Tax exempt income (19 ) (22 ) Bank owned life insurance income (64 ) (71 ) Valuation allowance (16,819 ) 1,421 Other, net 12 57 $ (16,480 ) $ — |
Schedule of Deferred Tax Assets | Deferred income taxes consist of the following (amounts in thousands): Years Ended December 31, 2015 2014 Deferred tax assets: Allowance for loan losses $ 3,523 $ 3,454 Restricted stock and stock options 240 384 OTTI 188 345 Net deferred loan fees 169 206 Net operating loss 14,901 16,187 FMV adjustment on purchased assets — 89 SERP accrual 186 178 Other 1,335 2,545 Unrealized loss on securities 165 — Total deferred tax assets 20,707 23,388 Less valuation allowance (3,765 ) (22,013 ) Net deferred tax assets 16,942 1,375 Deferred tax liabilities: Property and equipment $ 133 $ 809 Prepaid expense 80 255 Unrealized gain on securities — 282 Other 50 29 Total deferred tax liabilities 263 1,375 Net deferred tax asset (liability) $ 16,679 $ — |
REGULATORY RESTRICTIONS (Tables
REGULATORY RESTRICTIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Regulatory Capital Requirements [Abstract] | |
Schedule of Capital Amounts and Ratios | The Bank’s actual capital amounts and ratios are also presented in the table below and at (amounts in thousands, except ratios): Actual Minimum For Capital Minimum To be Well Amount Ratio Amount Ratio Amount Ratio As of December 31, 2015: Total Capital (to Risk Weighted Assets) $ 77,620 15.6 % $ 39,750 8.0 % $ 49,688 10.0 % Tier I Capital (to Risk Weighted Assets) 71,367 14.4 % 29,813 6.0 % 39,750 8.0 % Common Equity Tier 1 Capital (to Risk Weighted Assets) 71,367 14.4 % 22,360 4.5 % 32,297 6.5 % Tier I Capital (to Average Assets) 71,367 10.2 % 28,015 4.0 % 35,019 5.0 % As of December 31, 2014: Total Capital (to Risk Weighted Assets) $ 66,498 14.7 % $ 36,109 8.0 % $ 45,136 10.0 % Tier I Capital (to Risk Weighted Assets) 60,810 13.5 % 18,054 4.0 % 27,082 6.0 % Tier I Capital (to Average Assets) 60,810 7.2 % 33,844 4.0 % 42,305 5.0 % |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Loan Commitments | At December 31, 2015 and 2014 , financial instruments whose contract amounts represent credit risk were (amounts in thousands): 2015 2014 Commitments to extend credit $ 29,354 $ 14,182 Undisbursed lines of credit 94,241 73,888 Financial stand-by letters of credit 438 238 Performance stand-by letters of credit 233 1,203 Legally binding commitments 124,266 89,511 Unused credit card lines 15,982 12,773 Total $ 140,248 $ 102,284 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Assets Measured at Fair Value on a Recurring Basis | The following table presents information about assets measured at fair value on a recurring basis at December 31, 2015 and 2014 (amounts in thousands): Available-for-Sale Securities: Fair Value Measurements at Total Carrying Assets Quoted Prices Significant Significant (Level 1) (Level 2) (Level 3) Taxable municipal securities $ 24,567 $ 24,567 $ — $ 24,567 $ — Mortgage-backed securities: GNMA 13,530 13,530 — 13,530 — FNMA & FHLMC 31,673 31,673 — 31,673 — Other debt securities 500 500 — — 500 Equity securities 11 11 — 11 — Total available-for-sale securities $ 70,281 $ 70,281 $ — $ 69,781 $ 500 Available-for-Sale Securities: Fair Value Measurements at Total Carrying Assets Quoted Prices Significant Significant (Level 1) (Level 2) (Level 3) Taxable municipal securities $ 17,078 $ 17,078 $ — $ 17,078 $ — Mortgage-backed securities: GNMA 16,264 16,264 — 16,264 — FNMA & FHLMC 30,858 30,858 — 30,858 — Equity securities 11 11 — 11 — Total available-for-sale securities $ 64,211 $ 64,211 $ — $ 64,211 $ — |
Level 3 Assets Measured at Fair Value on a Recurring Basis | The table below presents reconciliation for the years ended December 31, 2015 and 2014 for all Level 3 assets that are measured at fair value on a recurring basis (amounts in thousands) . During the year ended December 31, 2015 , no securities were transferred from Level 3 to Level 2. Available-for-Sale Securities 2015 2014 Beginning Balance $ — $ 1,025 Total realized and unrealized gains or (losses): Included in earnings — 250 Included in other comprehensive income — 150 Purchases, issuances and settlements 500 (1,425 ) Ending Balance $ 500 $ — |
Impaired Loans and Foreclosed Assets Measured at Fair Value on a Nonrecurring Basis | Assets measured at fair value on a non-recurring basis are included in the table below at December 31, 2015 and 2014 (amounts in thousands): Fair Value Measurements at Description Total Carrying Amount in the Consolidated Balance Sheet Assets Measured at Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs Significant Unobservable Inputs Loans held for sale $ 1,145 $ 1,145 $ — $ 1,145 $ — Impaired loans $ 3,540 $ 3,540 $ — $ — $ 3,540 Foreclosed assets $ 1,760 $ 1,760 $ — $ — $ 1,760 Fair Value Measurements at Description Total Carrying Amount in the Consolidated Balance Sheet Assets Measured at Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs Significant Unobservable Inputs Loans held for sale $ 2,882 $ 2,882 $ — $ 2,882 $ — Impaired loans $ 9,855 $ 9,855 $ — $ — $ 9,855 Foreclosed assets $ 3,782 $ 3,782 $ — $ — $ 3,782 |
Quantitative Information About Level 3 Fair Value Measurements | The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a nonrecurring basis at December 31, 2015 (amounts in thousands, except percentages): Total Carrying Amount at December 31, 2015 Valuation Methodology Range of Inputs Recurring measurements: Probability of default 10-20% Other debt securities $ 500 Loss given default 100% Nonrecurring measurements: Impaired loans $ 3,540 Collateral discounts 9 - 50% Foreclosed assets $ 1,760 Discounted appraisals 10 - 30% |
Range of Collateral Discounts for Impaired Loans by Segment | The following table reflects the general range of collateral discounts for impaired loans by segment: Loan Segment: Range of Percentages Commercial construction and land development 10% - 40% Commercial real estate 9% - 50% Residential construction 9% - 30% Residential mortgage 9% - 20% All other segments 9% - 20% |
Fair Value of Financial Instruments | The following table presents information for financial assets and liabilities as of December 31, 2015 and 2014 (amounts in thousands): December 31, 2015 Carrying Estimated Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 26,755 $ 26,755 $ 26,755 $ — $ — Certificates of deposit 23,520 23,520 — 23,520 — Securities available-for-sale 70,281 70,281 — 69,781 500 Securities held-to-maturity 65,354 65,633 — 65,633 — Loans held for sale 1,145 1,145 — 1,145 — Loans, net 448,697 423,285 — — 423,285 FHLB stock 3,288 3,288 — 3,288 — Accrued interest receivable 1,594 1,594 — 1,594 — Financial liabilities: Deposits $ 542,334 $ 541,818 $ — $ 541,818 $ — Subordinated debentures and subordinated promissory notes 23,872 23,872 — — 23,872 Borrowings 60,000 61,709 — 61,709 — Accrued interest payable 437 437 — 437 — December 31, 2014 Carrying Estimated Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 158,527 $ 158,527 $ 158,527 $ — $ — Certificates of deposit 27,784 27,784 — 27,784 — Securities available-for-sale 64,211 64,211 — 64,211 — Securities held-to-maturity 81,583 82,242 — 82,242 — Loans held for sale 2,882 2,882 — 2,882 — Loans, net 442,879 422,906 — — 422,906 FHLB stock 4,788 4,788 — 4,788 — Accrued interest receivable 1,627 1,627 — 1,627 — Financial liabilities: Deposits $ 661,185 $ 663,000 $ — $ 663,000 $ — Subordinated debentures and subordinated promissory notes 24,372 25,671 — — 25,671 Borrowings 90,000 95,573 — 95,573 — Accrued interest payable 1,704 1,704 — 1,704 — |
STOCK OPTION PLAN (Tables)
STOCK OPTION PLAN (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Option Activity | A summary of option activity under the Plan for the year ended December 31, 2015 , is presented below: Shares Option Weighted Aggregate Outstanding at January 1, 2015 278,582 $ 4.86 Issued — — Exercised — — Forfeited 18,525 1.99 Expired 66,327 7.20 Balance at December 31, 2015 193,730 $ 4.33 1.76 $ 32,328 Exercisable at December 31, 2015 144,199 $ 5.23 1.28 $ 29,853 |
Summary of Non-vested Options | A summary of the status of the Company's non-vested options as of December 31, 2015 and changes during the year then ended is presented below: Shares Weighted average grant date fair value Non-vested - December 31, 2014 104,556 $ 0.86 Granted — — Vested 46,075 0.69 Forfeited/Expired 8,950 0.83 Non-vested - December 31, 2015 49,531 $ 1.03 |
Schedule of Shares Authorized under Stock Option Plans, by Exercise Price Range | Additional information concerning the Company’s stock options at December 31, 2015 is as follows: Exercise Price Number Contractual Number 1.15-1.69 46,075 2.19 46,075 1.70 - 2.99 93,650 2.21 44,148 3.00 - 40.78 41,700 0.16 41,671 40.79 12,305 2.07 12,305 193,730 1.76 144,199 |
Schedule of Stock Options, Valuation Assumptions | The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions used for grants in 2015 and 2014 : 2015 2014 Dividend yield — 0 % Expected volatility — 73.30 % Risk free interest rate — 1.57 % Expected life — 5 years |
RESTRICTED STOCK (Tables)
RESTRICTED STOCK (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Non-vested Restricted Stock Awards | The following table summarizes non-vested restricted stock awards as of the period ended December 31, 2015 : Restricted Stock Weighted Average Grant-Date Fair Value Balance as of December 31, 2014: — $ — Granted 1,521,000 1.53 Vested (97,825 ) 1.52 Forfeited (60,000 ) 1.52 Balance as of December 31, 2015: 1,363,175 $ 1.64 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Payments | Future minimum lease payments under the leases for future years are as follows (amounts in thousands): Leases 2016 $ 329 2017 240 2018 185 2019 178 2020 183 2021 and beyond 266 $ 1,381 |
PARENT COMPANY FINANCIAL INFO40
PARENT COMPANY FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Schedule of Condensed Balance Sheets | Condensed financial information of Four Oaks Fincorp, Inc. at December 31, 2015 and 2014 , and for the years ended December 31, 2015 and 2014 is presented below (amounts in thousands): Condensed Balance Sheets 2015 2014 Assets: Cash and cash equivalents $ 1,362 $ 3,958 Equity investment in subsidiaries 81,638 61,937 Investment securities available-for-sale 11 11 Other assets 1,128 131 Total assets $ 84,139 $ 66,037 Liabilities and Shareholders’ Equity: Other liabilities $ 26 $ 936 Subordinated debentures 12,372 12,372 Subordinated promissory notes 11,500 12,000 Shareholders' equity 60,241 40,729 Total liabilities and shareholders’ equity $ 84,139 $ 66,037 |
Schedule of Condensed Statements of Operations | For the Years Ended December 31, Condensed Statements of Operations 2015 2014 Equity in undistributed income (loss) of subsidiaries $ 20,367 $ (3,128 ) Interest income 27 5 Gain on sale of investments, available-for-sale — 109 Recovery of impairment loss on investment securities available-for-sale — 189 Other income 11 20 Other expenses (1,408 ) (1,384 ) Income (loss) before income taxes 18,997 (4,189 ) Applicable income tax benefit (1,011 ) — Net income (loss) $ 20,008 $ (4,189 ) |
Schedule of Condensed Statements of Cash Flows | Condensed Statements of Cash Flows 2015 2014 Operating activities: Net income (loss) $ 20,008 $ (4,189 ) Equity in undistributed loss of subsidiaries (20,367 ) 3,128 Gain on sale of investments — (298 ) (Increase) decrease in other assets (972 ) 16 (Decrease) increase in other liabilities (910 ) 199 Net cash used in operating activities (2,241 ) (1,144 ) Investing activities: Investment in subsidiaries — (19,157 ) Sales and maturities of securities — 1,560 Net cash used in investing activities — (17,597 ) Financing activities: Proceeds from issuance of common stock 170 22,243 Repayment of subordinated promissory notes (500 ) — Shares withheld for payment of taxes (25 ) — Net cash (used in) provided by financing activities (355 ) 22,243 Net (decrease) increase in cash and cash equivalents (2,596 ) 3,502 Cash and cash equivalents, beginning of year 3,958 456 Cash and cash equivalents, end of year $ 1,362 $ 3,958 |
ORGANIZATION AND SUMMARY OF S41
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2015USD ($)branch_offices | Dec. 31, 2014 | |
Cash and Cash Equivalents: | ||
Daily average gross reserve requirement | $ | $ 0 | |
Nature of Operations: | ||
Number of offices in which the Bank operates | branch_offices | 16 | |
Income Recognition on Impaired and Nonaccrual Loans: | ||
Threshold period past due for nonaccrual status of loans | 90 days | |
Allowance for Loan Losses: | ||
Charge-off rate, period | 5 years | 3 years |
Buildings [Member] | ||
Bank Premises and Equipment: | ||
Bank premises and equipment, useful life | 40 years | |
Minimum [Member] | ||
Allowance for Loan Losses: | ||
Additional reserve factor for categories with concentrated level of charge-offs | 50.00% | |
Minimum [Member] | Furniture and Equipment [Member] | ||
Bank Premises and Equipment: | ||
Bank premises and equipment, useful life | 5 years | |
Minimum [Member] | Risk Grade 1 [Member] | ||
Allowance for Loan Losses: | ||
Standard multipliers | 0.00% | |
Minimum [Member] | Risk Grade 5s and 6s [Member] | ||
Allowance for Loan Losses: | ||
Additional reserve factor for categories with historically high charge-offs | 25.00% | |
Maximum [Member] | ||
Allowance for Loan Losses: | ||
Additional reserve factor for categories with concentrated level of charge-offs | 100.00% | |
Maximum [Member] | Furniture and Equipment [Member] | ||
Bank Premises and Equipment: | ||
Bank premises and equipment, useful life | 10 years | |
Maximum [Member] | Risk Grade 6 [Member] | ||
Allowance for Loan Losses: | ||
Standard multipliers | 300.00% | |
Maximum [Member] | Risk Grade 5s and 6s [Member] | ||
Allowance for Loan Losses: | ||
Additional reserve factor for categories with historically high charge-offs | 100.00% | |
Interest Rate Lock Commitments [Member] | ||
Rate Lock Commitments: | ||
Interest rate lock commitment period | 60 days |
NET INCOME (LOSS) PER SHARE (Co
NET INCOME (LOSS) PER SHARE (Computation of Basic and Diluted Net Income (Loss) Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net income (loss) available to common shareholders | $ 20,008 | $ (4,189) |
Weighted average number of common shares outstanding: | ||
Weighted average number of common shares - basic | 32,103,671 | 17,484,541 |
Weighted average number of common shares - dilutive | 32,247,723 | 17,484,541 |
Basic earnings (loss) per common share (in dollars per share) | $ 0.62 | $ (0.24) |
Diluted earnings (loss) per common share (in dollars per share) | $ 0.62 | $ (0.24) |
Antidilutive awards (in shares) | 147,655 | 227,407 |
Stock Options [Member] | ||
Weighted average number of common shares outstanding: | ||
Effect of dilutive shares | 15,776 | 0 |
Restricted Stock Awards [Member] | ||
Weighted average number of common shares outstanding: | ||
Effect of dilutive shares | 128,276 | 0 |
NET INCOME (LOSS) PER SHARE (Na
NET INCOME (LOSS) PER SHARE (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | ||
Issuance of common stock (in shares) | 24,000,000 | |
Issuance of common stock | $ 170 | $ 22,242 |
Increase in weighted average shares outstanding | 14,800,000 | |
Weighted average number of common shares - dilutive | 32,247,723 | 17,484,541 |
INVESTMENT SECURITIES (Availabl
INVESTMENT SECURITIES (Available for Sale Securities) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 70,836 | $ 63,619 |
Gross Unrealized Gains | 293 | 849 |
Gross Unrealized Losses | 848 | 257 |
Fair Value | 70,281 | 64,211 |
Taxable Municipal Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 24,789 | 16,412 |
Gross Unrealized Gains | 225 | 686 |
Gross Unrealized Losses | 447 | 20 |
Fair Value | 24,567 | 17,078 |
Mortgage-backed Securities GNMA [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 13,512 | 16,204 |
Gross Unrealized Gains | 68 | 163 |
Gross Unrealized Losses | 50 | 103 |
Fair Value | 13,530 | 16,264 |
Mortgage-backed Securities FNMA & FHLMC [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 32,024 | 30,992 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 351 | 134 |
Fair Value | 31,673 | 30,858 |
Other Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 500 | 0 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 500 | 0 |
Equity Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 11 | 11 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 11 | $ 11 |
INVESTMENT SECURITIES (Held to
INVESTMENT SECURITIES (Held to Maturity Securities) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | $ 65,354 | $ 81,583 |
Gross Unrealized Gains | 529 | 931 |
Gross Unrealized Losses | 250 | 272 |
Fair Value | 65,633 | 82,242 |
Taxable Municipal Securities [Member] | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 3,531 | 3,584 |
Gross Unrealized Gains | 1 | 0 |
Gross Unrealized Losses | 20 | 28 |
Fair Value | 3,512 | 3,556 |
Mortgage-backed Securities GNMA [Member] | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 59,185 | 74,482 |
Gross Unrealized Gains | 509 | 887 |
Gross Unrealized Losses | 230 | 244 |
Fair Value | 59,464 | 75,125 |
Mortgage-backed Securities FNMA [Member] | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 2,638 | 3,517 |
Gross Unrealized Gains | 19 | 44 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 2,657 | $ 3,561 |
INVESTMENT SECURITIES (Narrativ
INVESTMENT SECURITIES (Narrative) (Details) | 12 Months Ended | |
Dec. 31, 2015USD ($)security | Dec. 31, 2014USD ($) | |
Schedule of Available-for-sale Securities [Line Items] | ||
OTTI losses recognized | $ | $ 0 | |
Carrying value of securities | $ | 61,100,000 | $ 101,800,000 |
Proceeds from sales and calls of investment securities available-for-sale | $ | 8,324,000 | 22,737,000 |
Gross realized gains | $ | 264,771 | 265,087 |
Gross realized losses | $ | $ 0 | $ 0 |
Mortgage-backed Securities GNMA [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of loss positions | 20 | |
Number of debt securities held | 54 | |
Mortgage-backed Securities FNMA & FHLMC [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of loss positions | 11 | |
Number of debt securities held | 14 | |
Taxable Municipal Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of loss positions | 29 | |
Number of debt securities held | 39 |
INVESTMENT SECURITIES (Unrealiz
INVESTMENT SECURITIES (Unrealized Losses and Fair Values of Investment Securities) (Details) - Temporarily Impaired Securities [Member] - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Securities Available-for-Sale | ||
Less Than 12 Months, Fair value | $ 58,571 | $ 40,863 |
Less Than 12 Months, Unrealized losses | 848 | 257 |
12 Months or More, Fair value | 0 | 0 |
12 Months or More, Unrealized losses | 0 | 0 |
Total, Fair value | 58,571 | 40,863 |
Total, Unrealized losses | 848 | 257 |
Securities Held-to-Maturity | ||
Less Than 12 Months, Fair value | 24,109 | 7,594 |
Less Than 12 Months, Unrealized losses | 136 | 41 |
12 Months or More, Fair value | 5,130 | 15,796 |
12 Months or More, Unrealized losses | 114 | 231 |
Total, Fair value | 29,239 | 23,390 |
Total, Unrealized losses | 250 | 272 |
Taxable Municipal Securities [Member] | ||
Securities Available-for-Sale | ||
Less Than 12 Months, Fair value | 16,888 | 2,580 |
Less Than 12 Months, Unrealized losses | 447 | 20 |
12 Months or More, Fair value | 0 | 0 |
12 Months or More, Unrealized losses | 0 | 0 |
Total, Fair value | 16,888 | 2,580 |
Total, Unrealized losses | 447 | 20 |
Securities Held-to-Maturity | ||
Less Than 12 Months, Fair value | 3,325 | 0 |
Less Than 12 Months, Unrealized losses | 20 | 0 |
12 Months or More, Fair value | 0 | 3,556 |
12 Months or More, Unrealized losses | 0 | 28 |
Total, Fair value | 3,325 | 3,556 |
Total, Unrealized losses | 20 | 28 |
Mortgage-backed Securities GNMA [Member] | ||
Securities Available-for-Sale | ||
Less Than 12 Months, Fair value | 10,010 | 7,425 |
Less Than 12 Months, Unrealized losses | 50 | 103 |
12 Months or More, Fair value | 0 | 0 |
12 Months or More, Unrealized losses | 0 | 0 |
Total, Fair value | 10,010 | 7,425 |
Total, Unrealized losses | 50 | 103 |
Securities Held-to-Maturity | ||
Less Than 12 Months, Fair value | 20,784 | 7,594 |
Less Than 12 Months, Unrealized losses | 116 | 41 |
12 Months or More, Fair value | 5,130 | 12,240 |
12 Months or More, Unrealized losses | 114 | 203 |
Total, Fair value | 25,914 | 19,834 |
Total, Unrealized losses | 230 | 244 |
Mortgage-backed Securities FNMA & FHLMC [Member] | ||
Securities Available-for-Sale | ||
Less Than 12 Months, Fair value | 31,673 | 30,858 |
Less Than 12 Months, Unrealized losses | 351 | 134 |
12 Months or More, Fair value | 0 | 0 |
12 Months or More, Unrealized losses | 0 | 0 |
Total, Fair value | 31,673 | 30,858 |
Total, Unrealized losses | $ 351 | $ 134 |
INVESTMENT SECURITIES (Roll For
INVESTMENT SECURITIES (Roll Forward of Credit Losses on Debt Securities) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Roll forward of credit losses recognized on debt securities held with OTTI recognized in OCI: | ||
Balance of credit losses on debt securities at the beginning of the period | $ 0 | $ 75 |
Income received on other-than-temporary impaired debt securities | 0 | (75) |
Balance of credit losses on debt securities at the end of the period | $ 0 | $ 0 |
INVESTMENT SECURITIES (Investme
INVESTMENT SECURITIES (Investment Securities Classified by Contractual Maturities) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Available for Sale, Amortized Cost | ||
Amortized Cost | $ 70,836 | $ 63,619 |
Available for Sale, Fair Value | ||
Fair Value | 70,281 | 64,211 |
Held to Maturity, Fair Value | ||
Fair Value | 65,633 | 82,242 |
Taxable Municipal Securities [Member] | ||
Available for Sale, Amortized Cost | ||
Due within one year | 0 | |
Due after one year through five years | 0 | |
Due after five years through ten years | 0 | |
Due after ten years | 24,789 | |
Amortized Cost | 24,789 | 16,412 |
Available for Sale, Fair Value | ||
Due within one year | 0 | |
Due after one year through five years | 0 | |
Due after five years through ten years | 0 | |
Due after ten years | 24,567 | |
Fair Value | 24,567 | 17,078 |
Held to Maturity, Amortized Cost | ||
Due within one year | 100 | |
Due after one year through five years | 2,367 | |
Due after five years through ten years | 1,064 | |
Due after ten years | 0 | |
Amortized Cost | 3,531 | |
Held to Maturity, Fair Value | ||
Due within one year | 100 | |
Due after one year through five years | 2,351 | |
Due after five years through ten years | 1,061 | |
Due after ten years | 0 | |
Fair Value | 3,512 | 3,556 |
Mortgage-backed Securities GNMA [Member] | ||
Available for Sale, Amortized Cost | ||
Due within one year | 0 | |
Due after one year through five years | 0 | |
Due after five years through ten years | 0 | |
Due after ten years | 13,512 | |
Amortized Cost | 13,512 | 16,204 |
Available for Sale, Fair Value | ||
Due within one year | 0 | |
Due after one year through five years | 0 | |
Due after five years through ten years | 0 | |
Due after ten years | 13,530 | |
Fair Value | 13,530 | 16,264 |
Held to Maturity, Amortized Cost | ||
Due within one year | 0 | |
Due after one year through five years | 0 | |
Due after five years through ten years | 5,291 | |
Due after ten years | 53,894 | |
Amortized Cost | 59,185 | |
Held to Maturity, Fair Value | ||
Due within one year | 0 | |
Due after one year through five years | 0 | |
Due after five years through ten years | 5,425 | |
Due after ten years | 54,039 | |
Fair Value | 59,464 | 75,125 |
Mortgage-backed Securities FNMA & FHLMC [Member] | ||
Available for Sale, Amortized Cost | ||
Due within one year | 0 | |
Due after one year through five years | 0 | |
Due after five years through ten years | 0 | |
Due after ten years | 32,024 | |
Amortized Cost | 32,024 | 30,992 |
Available for Sale, Fair Value | ||
Due within one year | 0 | |
Due after one year through five years | 0 | |
Due after five years through ten years | 0 | |
Due after ten years | 31,673 | |
Fair Value | 31,673 | 30,858 |
Other Debt Securities [Member] | ||
Available for Sale, Amortized Cost | ||
Due within one year | 0 | |
Due after one year through five years | 0 | |
Due after five years through ten years | 500 | |
Due after ten years | 0 | |
Amortized Cost | 500 | 0 |
Available for Sale, Fair Value | ||
Due within one year | 0 | |
Due after one year through five years | 0 | |
Due after five years through ten years | 500 | |
Due after ten years | 0 | |
Fair Value | 500 | 0 |
Mortgage-backed Securities FNMA [Member] | ||
Held to Maturity, Amortized Cost | ||
Due within one year | 0 | |
Due after one year through five years | 0 | |
Due after five years through ten years | 2,638 | |
Due after ten years | 0 | |
Amortized Cost | 2,638 | |
Held to Maturity, Fair Value | ||
Due within one year | 0 | |
Due after one year through five years | 0 | |
Due after five years through ten years | 2,657 | |
Due after ten years | 0 | |
Fair Value | 2,657 | 3,561 |
Equity Securities [Member] | ||
Available for Sale, Amortized Cost | ||
Amortized Cost | 11 | 11 |
Available for Sale, Fair Value | ||
Fair Value | 11 | $ 11 |
Total Other Securities [Member] | ||
Available for Sale, Amortized Cost | ||
Amortized Cost | 11 | |
Available for Sale, Fair Value | ||
Fair Value | $ 11 |
LOANS AND ALLOWANCE FOR LOAN 50
LOANS AND ALLOWANCE FOR LOAN LOSSES (Loans Outstanding) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Loans and Leases Receivable Disclosure [Abstract] | |||
Commercial and industrial | $ 23,163 | $ 24,286 | |
Commercial construction and land development | 50,510 | 53,642 | |
Commercial real estate | 208,737 | 200,510 | |
Residential construction | 36,618 | 28,130 | |
Residential mortgage | 128,442 | 135,022 | |
Consumer | 6,638 | 7,248 | |
Other | 1,257 | 499 | |
Consumer credit cards | 2,240 | 2,276 | |
Business credit cards | 1,168 | 1,251 | |
Total loans | 458,773 | 452,864 | |
Net deferred loan fees | (460) | (608) | |
Allowance for loan losses | (9,616) | (9,377) | $ (11,590) |
Net loans | 448,697 | 442,879 | |
Loans held for sale | $ 1,145 | $ 2,882 |
LOANS AND ALLOWANCE FOR LOAN 51
LOANS AND ALLOWANCE FOR LOAN LOSSES (Nonperforming Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Loans and Leases Receivable Disclosure [Abstract] | ||
Loans past due ninety days or more and still accruing | $ 65 | $ 17 |
Nonaccrual loans | 6,598 | 8,259 |
Loans held for sale - nonperforming | 0 | 1,865 |
Foreclosed assets | 1,760 | 3,782 |
Total | $ 8,423 | $ 13,923 |
LOANS AND ALLOWANCE FOR LOAN 52
LOANS AND ALLOWANCE FOR LOAN LOSSES (Related Party Loans) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Loans and Leases Receivable, Related Parties [Roll Forward] | ||
Beginning balance | $ 8,777 | $ 9,840 |
New loans | 1,689 | 1,539 |
Principal repayments | (1,716) | (2,602) |
Ending balance | $ 8,750 | $ 8,777 |
LOANS AND ALLOWANCE FOR LOAN 53
LOANS AND ALLOWANCE FOR LOAN LOSSES (Credit Quality) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Financing Receivable, Recorded Investment [Line Items] | ||
Commercial and Industrial | $ 23,163 | $ 24,286 |
Commercial Construction and Land Development | 50,510 | 53,642 |
Commercial Real Estate - Other | 208,737 | 200,510 |
Residential - Construction | 36,618 | 28,130 |
Residential - Mortgage | 128,442 | 135,022 |
Consumer - Other | 6,638 | 7,248 |
Other - Loans | 1,257 | 499 |
Total | 455,365 | 449,337 |
Risk grade 6 loans classified as held for sale | 1,145 | 2,882 |
Consumer - Credit Card | 2,240 | 2,276 |
Business - Credit Card | 1,168 | 1,251 |
Credit Card Portfolio Exposure [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Consumer - Credit Card | 2,240 | 2,276 |
Business - Credit Card | 1,168 | 1,251 |
1 - Lowest Risk [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Commercial and Industrial | 1,942 | 2,099 |
Commercial Construction and Land Development | 0 | 0 |
Commercial Real Estate - Other | 0 | 0 |
Residential - Construction | 0 | 0 |
Residential - Mortgage | 0 | 0 |
Consumer - Other | 1,773 | 1,638 |
Other - Loans | 0 | 0 |
Total | 3,715 | 3,737 |
2 - Strong [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Commercial and Industrial | 971 | 606 |
Commercial Construction and Land Development | 749 | 630 |
Commercial Real Estate - Other | 2,280 | 2,206 |
Residential - Construction | 0 | 0 |
Residential - Mortgage | 15,187 | 14,794 |
Consumer - Other | 386 | 314 |
Other - Loans | 7 | 11 |
Total | 19,580 | 18,561 |
3 - Standard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Commercial and Industrial | 10,530 | 9,506 |
Commercial Construction and Land Development | 11,262 | 10,625 |
Commercial Real Estate - Other | 94,357 | 81,761 |
Residential - Construction | 4,296 | 1,893 |
Residential - Mortgage | 56,493 | 53,007 |
Consumer - Other | 1,250 | 3,556 |
Other - Loans | 469 | 225 |
Total | 178,657 | 160,573 |
4 - Acceptable [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Commercial and Industrial | 9,297 | 11,932 |
Commercial Construction and Land Development | 33,832 | 34,709 |
Commercial Real Estate - Other | 103,740 | 110,683 |
Residential - Construction | 31,431 | 26,074 |
Residential - Mortgage | 50,226 | 56,359 |
Consumer - Other | 3,170 | 1,186 |
Other - Loans | 757 | 146 |
Total | 232,453 | 241,089 |
5 - Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Commercial and Industrial | 304 | 143 |
Commercial Construction and Land Development | 2,486 | 1,892 |
Commercial Real Estate - Other | 4,444 | 3,989 |
Residential - Construction | 170 | 0 |
Residential - Mortgage | 5,231 | 8,720 |
Consumer - Other | 59 | 62 |
Other - Loans | 0 | 117 |
Total | 12,694 | 14,923 |
6 - Substandard or Worse [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Commercial and Industrial | 119 | 0 |
Commercial Construction and Land Development | 2,181 | 5,786 |
Commercial Real Estate - Other | 3,916 | 1,871 |
Residential - Construction | 721 | 163 |
Residential - Mortgage | 1,305 | 2,142 |
Consumer - Other | 0 | 492 |
Other - Loans | 24 | 0 |
Total | 8,266 | 10,454 |
Risk grade 6 loans classified as held for sale | 2,500 | |
Performing [Member] | Credit Card Portfolio Exposure [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Consumer - Credit Card | 2,211 | 2,263 |
Business - Credit Card | 1,133 | 1,248 |
Nonperforming [Member] | Credit Card Portfolio Exposure [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Consumer - Credit Card | 29 | 13 |
Business - Credit Card | $ 35 | $ 3 |
LOANS AND ALLOWANCE FOR LOAN 54
LOANS AND ALLOWANCE FOR LOAN LOSSES (Age Analysis of Past Due Loans) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-89 Days Past Due | $ 1,172 | $ 1,352 |
Nonaccrual | 6,598 | 8,259 |
Greater than 90 Days Past Due | 65 | 17 |
Total Past Due | 7,835 | 9,628 |
Current | 450,938 | 443,236 |
Total loans | 458,773 | 452,864 |
Loans in 30-89 days past due classified as held for sale | 67 | |
Loans on nonaccrual classified as held for sale | 0 | 1,865 |
Commercial and Industrial [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-89 Days Past Due | 56 | 14 |
Nonaccrual | 119 | 0 |
Greater than 90 Days Past Due | 0 | 0 |
Total Past Due | 175 | 14 |
Current | 22,988 | 24,272 |
Total loans | 23,163 | 24,286 |
Commercial Construction and Land Development [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-89 Days Past Due | 211 | 27 |
Nonaccrual | 1,626 | 5,533 |
Greater than 90 Days Past Due | 0 | 0 |
Total Past Due | 1,837 | 5,560 |
Current | 48,673 | 48,082 |
Total loans | 50,510 | 53,642 |
Commercial Real Estate [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-89 Days Past Due | 0 | 0 |
Nonaccrual | 2,929 | 983 |
Greater than 90 Days Past Due | 0 | 0 |
Total Past Due | 2,929 | 983 |
Current | 205,808 | 199,527 |
Total loans | 208,737 | 200,510 |
Residential Construction [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-89 Days Past Due | 133 | 0 |
Nonaccrual | 721 | 0 |
Greater than 90 Days Past Due | 0 | 0 |
Total Past Due | 854 | 0 |
Current | 35,764 | 28,130 |
Total loans | 36,618 | 28,130 |
Residential Mortgage [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-89 Days Past Due | 499 | 1,058 |
Nonaccrual | 1,203 | 1,271 |
Greater than 90 Days Past Due | 0 | 0 |
Total Past Due | 1,702 | 2,329 |
Current | 126,740 | 132,693 |
Total loans | 128,442 | 135,022 |
Consumer [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-89 Days Past Due | 71 | 82 |
Nonaccrual | 0 | 472 |
Greater than 90 Days Past Due | 0 | 0 |
Total Past Due | 71 | 554 |
Current | 6,567 | 6,694 |
Total loans | 6,638 | 7,248 |
Consumer Credit Cards [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-89 Days Past Due | 95 | 46 |
Nonaccrual | 0 | 0 |
Greater than 90 Days Past Due | 29 | 14 |
Total Past Due | 124 | 60 |
Current | 2,116 | 2,216 |
Total loans | 2,240 | 2,276 |
Business Credit Cards [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-89 Days Past Due | 107 | 41 |
Nonaccrual | 0 | 0 |
Greater than 90 Days Past Due | 36 | 3 |
Total Past Due | 143 | 44 |
Current | 1,025 | 1,207 |
Total loans | 1,168 | 1,251 |
Other Loans [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-89 Days Past Due | 0 | 84 |
Nonaccrual | 0 | 0 |
Greater than 90 Days Past Due | 0 | 0 |
Total Past Due | 0 | 84 |
Current | 1,257 | 415 |
Total loans | $ 1,257 | $ 499 |
LOANS AND ALLOWANCE FOR LOAN 55
LOANS AND ALLOWANCE FOR LOAN LOSSES (Impaired Loans) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Impaired Loans, Recorded Investment | ||
With no related allowance recorded | $ 5,088,000 | $ 11,410,000 |
With an allowance recorded | 3,838,000 | 2,005,000 |
Total | 8,926,000 | 13,415,000 |
Impaired Loans, Unpaid Principal Balance | ||
With no related allowance recorded | 6,421,000 | 13,092,000 |
With an allowance recorded | 4,999,000 | 3,210,000 |
Total | 11,420,000 | 16,302,000 |
Related Allowance | 1,261,000 | 663,000 |
Impaired Loans, YTD Average Recorded Investment | ||
With no related allowance recorded | 4,713,000 | 13,621,000 |
With an allowance recorded | 4,040,000 | 2,476,000 |
Total | 8,753,000 | 16,097,000 |
Impaired Loans, Interest Income Recognized | ||
With no related allowance recorded | 131,000 | 213,000 |
With an allowance recorded | 213,000 | 116,000 |
Total | 344,000 | 329,000 |
Impaired loans classified as held for sale | 2,400,000 | |
Reserves recorded for loans held for sale | 0 | |
Commercial [Member] | ||
Impaired Loans, Recorded Investment | ||
Total | 6,761,000 | 10,718,000 |
Impaired Loans, Unpaid Principal Balance | ||
Total | 9,169,000 | 13,784,000 |
Related Allowance | 1,241,000 | 597,000 |
Impaired Loans, YTD Average Recorded Investment | ||
Total | 6,971,000 | 13,062,000 |
Impaired Loans, Interest Income Recognized | ||
Total | 277,000 | 265,000 |
Commercial and Industrial [Member] | ||
Impaired Loans, Recorded Investment | ||
With no related allowance recorded | 67,000 | |
With an allowance recorded | 52,000 | |
Impaired Loans, Unpaid Principal Balance | ||
With no related allowance recorded | 67,000 | |
With an allowance recorded | 63,000 | |
Related Allowance | 7,000 | |
Impaired Loans, YTD Average Recorded Investment | ||
With no related allowance recorded | 63,000 | |
With an allowance recorded | 58,000 | |
Impaired Loans, Interest Income Recognized | ||
With no related allowance recorded | 3,000 | |
With an allowance recorded | 4,000 | |
Commercial Construction and Land Development [Member] | ||
Impaired Loans, Recorded Investment | ||
With no related allowance recorded | 737,000 | 5,445,000 |
With an allowance recorded | 1,948,000 | 1,433,000 |
Impaired Loans, Unpaid Principal Balance | ||
With no related allowance recorded | 1,706,000 | 6,454,000 |
With an allowance recorded | 3,020,000 | 2,656,000 |
Related Allowance | 1,006,000 | 580,000 |
Impaired Loans, YTD Average Recorded Investment | ||
With no related allowance recorded | 1,031,000 | 6,715,000 |
With an allowance recorded | 2,086,000 | 1,866,000 |
Impaired Loans, Interest Income Recognized | ||
With no related allowance recorded | 19,000 | 15,000 |
With an allowance recorded | 122,000 | 92,000 |
Commercial Real Estate [Member] | ||
Impaired Loans, Recorded Investment | ||
With no related allowance recorded | 2,258,000 | 3,468,000 |
With an allowance recorded | 1,699,000 | 372,000 |
Impaired Loans, Unpaid Principal Balance | ||
With no related allowance recorded | 2,614,000 | 4,295,000 |
With an allowance recorded | 1,699,000 | 379,000 |
Related Allowance | 228,000 | 17,000 |
Impaired Loans, YTD Average Recorded Investment | ||
With no related allowance recorded | 2,020,000 | 4,103,000 |
With an allowance recorded | 1,713,000 | 378,000 |
Impaired Loans, Interest Income Recognized | ||
With no related allowance recorded | 50,000 | 139,000 |
With an allowance recorded | 79,000 | 19,000 |
Residential [Member] | ||
Impaired Loans, Recorded Investment | ||
Total | 2,165,000 | 2,222,000 |
Impaired Loans, Unpaid Principal Balance | ||
Total | 2,251,000 | 1,783,000 |
Related Allowance | 20,000 | 61,000 |
Impaired Loans, YTD Average Recorded Investment | ||
Total | 1,782,000 | 2,503,000 |
Impaired Loans, Interest Income Recognized | ||
Total | 67,000 | 64,000 |
Residential Construction [Member] | ||
Impaired Loans, Recorded Investment | ||
With no related allowance recorded | 721,000 | |
Impaired Loans, Unpaid Principal Balance | ||
With no related allowance recorded | 722,000 | |
Impaired Loans, YTD Average Recorded Investment | ||
With no related allowance recorded | 408,000 | |
Impaired Loans, Interest Income Recognized | ||
With no related allowance recorded | 8,000 | |
Residential Mortgage [Member] | ||
Impaired Loans, Recorded Investment | ||
With no related allowance recorded | 1,305,000 | 2,030,000 |
With an allowance recorded | 139,000 | 192,000 |
Impaired Loans, Unpaid Principal Balance | ||
With no related allowance recorded | 1,312,000 | 1,614,000 |
With an allowance recorded | 217,000 | 169,000 |
Related Allowance | 20,000 | 61,000 |
Impaired Loans, YTD Average Recorded Investment | ||
With no related allowance recorded | 1,191,000 | 2,279,000 |
With an allowance recorded | 183,000 | 224,000 |
Impaired Loans, Interest Income Recognized | ||
With no related allowance recorded | 51,000 | 59,000 |
With an allowance recorded | $ 8,000 | 5,000 |
Consumer [Member] | ||
Impaired Loans, Recorded Investment | ||
With no related allowance recorded | 467,000 | |
With an allowance recorded | 8,000 | |
Total | 475,000 | |
Impaired Loans, Unpaid Principal Balance | ||
With no related allowance recorded | 729,000 | |
With an allowance recorded | 6,000 | |
Total | 735,000 | |
Related Allowance | 5,000 | |
Impaired Loans, YTD Average Recorded Investment | ||
With no related allowance recorded | 524,000 | |
With an allowance recorded | 8,000 | |
Total | 532,000 | |
Impaired Loans, Interest Income Recognized | ||
With no related allowance recorded | 0 | |
With an allowance recorded | 0 | |
Total | $ 0 |
LOANS AND ALLOWANCE FOR LOAN 56
LOANS AND ALLOWANCE FOR LOAN LOSSES (Narrative) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015USD ($)loans | Dec. 31, 2014USD ($)loans | |
Loans and Leases Receivable Disclosure [Abstract] | ||
Impaired loans, recorded investment | $ 8,926 | $ 13,415 |
Carrying value of impaired loans before allocations | 3,838 | 2,005 |
Impaired loans, allowance | 1,261 | 663 |
Impaired loans, with no related allowance | $ 5,088 | $ 11,410 |
Number of loans modified | loans | 0 | 3 |
Pre-classification outstanding recorded investment | $ 104 | |
Modified TDRs | loans | 0 |
LOANS AND ALLOWANCE FOR LOAN 57
LOANS AND ALLOWANCE FOR LOAN LOSSES (Troubled Debt Restructurings by Loan Class) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015loans | Dec. 31, 2014USD ($)loans | |
Financing Receivable, Modifications [Line Items] | ||
Number of loans | loans | 0 | 3 |
Pre-Modification Outstanding Recorded Investment | $ 104 | |
Post-Modification Outstanding Recorded Investment | $ 47 | |
Extended Payment Terms [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of loans | loans | 1 | |
Pre-Modification Outstanding Recorded Investment | $ 4 | |
Post-Modification Outstanding Recorded Investment | $ 4 | |
Extended Payment Terms [Member] | Consumer [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of loans | loans | 1 | |
Pre-Modification Outstanding Recorded Investment | $ 4 | |
Post-Modification Outstanding Recorded Investment | $ 4 | |
Forgiveness of Principal [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of loans | loans | 2 | |
Pre-Modification Outstanding Recorded Investment | $ 100 | |
Post-Modification Outstanding Recorded Investment | $ 43 | |
Forgiveness of Principal [Member] | Commercial Construction and Land Development [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of loans | loans | 2 | |
Pre-Modification Outstanding Recorded Investment | $ 100 | |
Post-Modification Outstanding Recorded Investment | $ 43 |
LOANS AND ALLOWANCE FOR LOAN 58
LOANS AND ALLOWANCE FOR LOAN LOSSES (Allowance for Loan Losses by Loan Class) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for loan losses: | ||
Balance, beginning of period | $ 9,377 | $ 11,590 |
Provision for loan losses | 0 | 7,954 |
Loans charged-off | (1,881) | (12,115) |
Recoveries | 2,120 | 1,948 |
Net (charge-offs) recoveries | 239 | (10,167) |
Balance, end of period | 9,616 | 9,377 |
Ending balance: individually evaluated for impairment | 1,219 | 524 |
Ending balance: collectively evaluated for impairment | 8,397 | 8,853 |
Loans: | ||
Balance, end of period | 458,773 | 452,864 |
Ending balance: individually evaluated for impairment | 8,631 | 12,980 |
Ending balance: collectively evaluated for impairment | 450,142 | 439,884 |
Commercial and Industrial [Member] | ||
Allowance for loan losses: | ||
Balance, beginning of period | 119 | 487 |
Provision for loan losses | (58) | (84) |
Loans charged-off | (74) | (492) |
Recoveries | 234 | 208 |
Net (charge-offs) recoveries | 160 | (284) |
Balance, end of period | 221 | 119 |
Ending balance: individually evaluated for impairment | 2 | 0 |
Ending balance: collectively evaluated for impairment | 219 | 119 |
Loans: | ||
Balance, end of period | 24,331 | 25,537 |
Ending balance: individually evaluated for impairment | 84 | 0 |
Ending balance: collectively evaluated for impairment | 24,247 | 25,537 |
Commercial Construction and Land Development [Member] | ||
Allowance for loan losses: | ||
Balance, beginning of period | 5,105 | 5,037 |
Provision for loan losses | (615) | 2,778 |
Loans charged-off | (196) | (3,107) |
Recoveries | 1,176 | 397 |
Net (charge-offs) recoveries | 980 | (2,710) |
Balance, end of period | 5,470 | 5,105 |
Ending balance: individually evaluated for impairment | 989 | 516 |
Ending balance: collectively evaluated for impairment | 4,481 | 4,589 |
Loans: | ||
Balance, end of period | 50,510 | 53,642 |
Ending balance: individually evaluated for impairment | 2,564 | 6,678 |
Ending balance: collectively evaluated for impairment | 47,946 | 46,964 |
Commercial Real Estate [Member] | ||
Allowance for loan losses: | ||
Balance, beginning of period | 2,382 | 2,981 |
Provision for loan losses | 71 | 2,382 |
Loans charged-off | (578) | (3,315) |
Recoveries | 393 | 334 |
Net (charge-offs) recoveries | (185) | (2,981) |
Balance, end of period | 2,268 | 2,382 |
Ending balance: individually evaluated for impairment | 228 | 4 |
Ending balance: collectively evaluated for impairment | 2,040 | 2,378 |
Loans: | ||
Balance, end of period | 208,737 | 200,510 |
Ending balance: individually evaluated for impairment | 3,957 | 3,801 |
Ending balance: collectively evaluated for impairment | 204,780 | 196,709 |
Residential Construction [Member] | ||
Allowance for loan losses: | ||
Balance, beginning of period | 436 | 713 |
Provision for loan losses | (90) | (106) |
Loans charged-off | (41) | (171) |
Recoveries | 0 | 0 |
Net (charge-offs) recoveries | (41) | (171) |
Balance, end of period | 305 | 436 |
Ending balance: individually evaluated for impairment | 0 | 0 |
Ending balance: collectively evaluated for impairment | 305 | 436 |
Loans: | ||
Balance, end of period | 36,618 | 28,130 |
Ending balance: individually evaluated for impairment | 721 | 0 |
Ending balance: collectively evaluated for impairment | 35,897 | 28,130 |
Residential Mortgage [Member] | ||
Allowance for loan losses: | ||
Balance, beginning of period | 1,206 | 2,146 |
Provision for loan losses | 497 | 3,041 |
Loans charged-off | (713) | (4,847) |
Recoveries | 201 | 866 |
Net (charge-offs) recoveries | (512) | (3,981) |
Balance, end of period | 1,191 | 1,206 |
Ending balance: individually evaluated for impairment | 0 | 0 |
Ending balance: collectively evaluated for impairment | 1,191 | 1,206 |
Loans: | ||
Balance, end of period | 128,442 | 135,022 |
Ending balance: individually evaluated for impairment | 1,305 | 2,030 |
Ending balance: collectively evaluated for impairment | 127,137 | 132,992 |
Consumer [Member] | ||
Allowance for loan losses: | ||
Balance, beginning of period | 89 | 188 |
Provision for loan losses | 121 | (36) |
Loans charged-off | (210) | (183) |
Recoveries | 113 | 120 |
Net (charge-offs) recoveries | (97) | (63) |
Balance, end of period | 113 | 89 |
Ending balance: individually evaluated for impairment | 0 | 4 |
Ending balance: collectively evaluated for impairment | 113 | 85 |
Loans: | ||
Balance, end of period | 8,878 | 9,524 |
Ending balance: individually evaluated for impairment | 0 | 471 |
Ending balance: collectively evaluated for impairment | 8,878 | 9,053 |
Other [Member] | ||
Allowance for loan losses: | ||
Balance, beginning of period | 40 | 38 |
Provision for loan losses | 74 | (21) |
Loans charged-off | (69) | 0 |
Recoveries | 3 | 23 |
Net (charge-offs) recoveries | (66) | 23 |
Balance, end of period | 48 | 40 |
Ending balance: individually evaluated for impairment | 0 | 0 |
Ending balance: collectively evaluated for impairment | 48 | 40 |
Loans: | ||
Balance, end of period | 1,257 | 499 |
Ending balance: individually evaluated for impairment | 0 | 0 |
Ending balance: collectively evaluated for impairment | 1,257 | 499 |
Impaired Loans [Member] | ||
Allowance for loan losses: | ||
Ending balance: collectively evaluated for impairment | 42 | 139 |
Loans: | ||
Ending balance: collectively evaluated for impairment | $ 295 | $ 436 |
BANK PREMISES AND EQUIPMENT (De
BANK PREMISES AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 22,355 | $ 27,556 |
Less accumulated depreciation | (10,062) | (15,661) |
Premises and equipment, net | 12,293 | 11,895 |
Depreciation expense | 684 | 833 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 4,394 | 4,394 |
Buildings and Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 11,312 | 11,189 |
Furniture and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 5,182 | 11,411 |
Construction in Process [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 1,467 | $ 562 |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Less than $100,000 | ||
2,016 | $ 44,628 | |
2,017 | 22,174 | |
2,018 | 7,518 | |
2,019 | 1,790 | |
2,020 | 2,803 | |
2021 and beyond | 153 | |
Total time deposits | 79,066 | $ 90,395 |
$100,000 or more | ||
2,016 | 94,570 | |
2,017 | 32,320 | |
2,018 | 10,612 | |
2,019 | 4,347 | |
2,020 | 7,338 | |
2021 and beyond | 1,823 | |
Total time deposits | 151,010 | $ 143,336 |
Total | ||
2,016 | 139,198 | |
2,017 | 54,494 | |
2,018 | 18,130 | |
2,019 | 6,137 | |
2,020 | 10,141 | |
2021 and beyond | 1,976 | |
Total time deposits | $ 230,076 |
BORROWINGS (FHLB Advances) (Det
BORROWINGS (FHLB Advances) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
FHLB Advances | $ 60,000 | $ 90,000 |
4.35% Advance Maturing June 5, 2017 [Member] | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Interest Rate | 4.35% | |
FHLB Advances | $ 0 | 10,000 |
4.36% Advance Maturing July 3, 2017 [Member] | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Interest Rate | 4.36% | |
FHLB Advances | $ 0 | 13,000 |
4.35% Advance Maturing July 31, 2017 [Member] | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Interest Rate | 4.35% | |
FHLB Advances | $ 0 | 5,000 |
4.08% Advance Maturing August 14, 2017 [Member] | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Interest Rate | 4.08% | |
FHLB Advances | $ 0 | 5,000 |
3.94% Advance Maturing August 14, 2017 [Member] | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Interest Rate | 3.94% | |
FHLB Advances | $ 5,000 | 5,000 |
3.95% Advance Maturing October 4, 2017 [Member] | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Interest Rate | 3.95% | |
FHLB Advances | $ 0 | 7,000 |
2.06% Advance Maturing February 5, 2018 [Member] | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Interest Rate | 2.06% | |
FHLB Advances | $ 10,000 | 10,000 |
2.25% Advance Maturing June 5, 2018 [Member] | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Interest Rate | 2.25% | |
FHLB Advances | $ 5,000 | 5,000 |
2.55% Advance Maturing June 5, 2018 [Member] | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Interest Rate | 2.55% | |
FHLB Advances | $ 5,000 | 5,000 |
3.03% Advance Maturing June 5, 2018 [Member] | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Interest Rate | 3.03% | |
FHLB Advances | $ 5,000 | 5,000 |
3.14% Advance Maturing September 10, 2018 [Member] | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Interest Rate | 3.14% | |
FHLB Advances | $ 10,000 | 10,000 |
2.71% Advance Maturing September 18, 2018 [Member] | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Interest Rate | 2.71% | |
FHLB Advances | $ 10,000 | 10,000 |
0.48% Advance Maturing February 22, 2016 [Member] | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Interest Rate | 0.48% | |
FHLB Advances | $ 10,000 | $ 0 |
BORROWINGS (Narrative) (Details
BORROWINGS (Narrative) (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Disclosure [Abstract] | ||
FHLB, available lines of credit | $ 138,300,000 | |
FHLB borrowings, weighted average interest rate | 2.38% | 3.42% |
Line of credit, various financial institutions | $ 37,000,000 | |
Federal fund purchases outstanding | $ 0 |
TRUST PREFERRED SECURITIES (Det
TRUST PREFERRED SECURITIES (Details) - USD ($) $ in Millions | Mar. 30, 2006 | Dec. 31, 2015 |
Trust Preferred Securities | ||
Trust preferred securities | $ 12.4 | |
Debentures, deferral period | 5 years | |
LIBOR [Member] | Subordinated Debt [Member] | Trust Preferred Securities [Member] | ||
Trust Preferred Securities | ||
Trust preferred securities, basis spread on variable rate | 1.35% |
SUBORDINATED PROMISSORY NOTES (
SUBORDINATED PROMISSORY NOTES (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2015USD ($) | |
Subordinated Debt [Abstract] | |
Aggregate principal amount of subordinated promissory notes sold | $ 11.5 |
Subordinated debt, interest rate | 6.25% |
INCOME TAXES (Allocation of Inc
INCOME TAXES (Allocation of Income Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Current tax expense (benefit): | ||
Federal | $ 34 | $ 0 |
State | 0 | 0 |
Current tax expense (benefit) | 34 | 0 |
Deferred tax expense (benefit): | ||
Federal | (15,184) | 0 |
State | (1,330) | 0 |
Deferred tax expense (benefit) | (16,514) | 0 |
Income tax benefit | $ (16,480) | $ 0 |
INCOME TAXES (Income Tax Reconc
INCOME TAXES (Income Tax Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal rate | 34.00% | 34.00% |
Expense computed at statutory rate of 34% | $ 1,200 | $ (1,424) |
Effect of state income taxes, net of federal benefit | (790) | 39 |
Tax exempt income | (19) | (22) |
Bank owned life insurance income | (64) | (71) |
Valuation allowance | (16,819) | 1,421 |
Other, net | 12 | 57 |
Income tax benefit | $ (16,480) | $ 0 |
INCOME TAXES (Deferred Tax Asse
INCOME TAXES (Deferred Tax Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Allowance for loan losses | $ 3,523 | $ 3,454 |
Restricted stock and stock options | 240 | 384 |
OTTI | 188 | 345 |
Net deferred loan fees | 169 | 206 |
Net operating loss | 14,901 | 16,187 |
FMV adjustment on purchased assets | 0 | 89 |
SERP accrual | 186 | 178 |
Other | 1,335 | 2,545 |
Unrealized loss on securities | 165 | 0 |
Total deferred tax assets | 20,707 | 23,388 |
Less valuation allowance | (3,765) | (22,013) |
Net deferred tax assets | 16,942 | 1,375 |
Deferred tax liabilities: | ||
Property and equipment | 133 | 809 |
Prepaid expense | 80 | 255 |
Unrealized gain on securities | 0 | 282 |
Other | 50 | 29 |
Total deferred tax liabilities | 263 | 1,375 |
Net deferred tax asset (liability) | $ 16,679 | $ 0 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Income tax benefit | $ (16,480) | $ 0 | |
Net operating losses available for carryforward | 39,400 | ||
Release of the valuation allowance against deferred tax assets | $ 16,600 | ||
Deferred tax assets, valuation allowance | $ 3,765 | $ 22,013 |
REGULATORY RESTRICTIONS (Detail
REGULATORY RESTRICTIONS (Details) - USD ($) | Jul. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Tier I Capital (to Average Assets), Ratio | |||
FRB, approval period for adoption of approved programs | 10 days | ||
FRB, submission period of written progress reports | 30 days | ||
Four Oaks Bank & Trust Company (the “Bank”) [Member] | |||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |||
Dividends paid to the Company by the Bank | $ 0 | ||
Total Capital (to Risk Weighted Assets), Amount | |||
Total Capital (to Risk Weighted Assets), Actual | 77,620,000 | $ 66,498,000 | |
Total Capital (to Risk Weighted Assets), Minimum for Capital Adequacy Purposes | 39,750,000 | 36,109,000 | |
Total Capital (to Risk Weighted Assets), Minimum to be Well Capitalized under Prompt Corrective Action Provisions | 49,688,000 | 45,136,000 | |
Tier I Capital (to Risk Weighted Assets), Amount | |||
Tier I Capital (to Risk Weighted Assets), Actual | 71,367,000 | 60,810,000 | |
Tier I Capital (to Risk Weighted Assets), Minimum for Capital Adequacy Purposes | 29,813,000 | 18,054,000 | |
Tier I Capital (to Risk Weighted Assets), Minimum to be Well Capitalized under Prompt Corrective Action Provisions | 39,750,000 | 27,082,000 | |
Common Equity Tier 1 Capital (to Risk Weighted Assets), Amount | |||
Common Equity Tier 1 Capital (to Risk Weighted Assets), Actual | 71,367,000 | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), Minimum for Capital Adequacy Purposes | 22,360,000 | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), Minimum to be Well Capitalized under Prompt Corrective Action Provisions | 32,297,000 | ||
Tier I Capital (to Average Assets), Amount | |||
Tier I Capital (to Average Assets), Actual | 71,367,000 | 60,810,000 | |
Tier I Capital (to Average Assets), Minimum for Capital Adequacy Purposes | 28,015,000 | 33,844,000 | |
Tier I Capital (to Average Assets), Minimum to be Well Capitalized under Prompt Corrective Action Provisions | $ 35,019,000 | $ 42,305,000 | |
Total Capital and Tier I Capital (to Risk Weighted Assets), Ratio | |||
Total Capital (to Risk Weighted Assets), Actual | 15.60% | 14.70% | |
Total Capital (to Risk Weighted Assets), Minimum for Capital Adequacy Purposes | 8.00% | 8.00% | |
Total Capital (to Risk Weighted Assets), Minimum to be Well Capitalized under Prompt Corrective Action Provisions | 10.00% | 10.00% | |
Tier I Capital (to Risk Weighted Assets), Actual | 14.40% | 13.50% | |
Tier I Capital (to Risk Weighted Assets), Minimum for Capital Adequacy Purposes | 6.00% | 4.00% | |
Tier I Capital (to Risk Weighted Assets), Minimum to be Well Capitalized under Prompt Corrective Action Provisions | 8.00% | 6.00% | |
Common Equity Tier 1 Capital (to Risk Weighted Assets), Actual | 14.40% | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), Minimum for Capital Adequacy Purposes | 4.50% | ||
Common Equity Tier 1 Capital (to Risk Weighted Assets), Minimum to be Well Capitalized under Prompt Corrective Action Provisions | 6.50% | ||
Tier I Capital (to Average Assets), Ratio | |||
Tier I Capital (to Average Assets), Actual | 10.20% | 7.20% | |
Tier I Capital (to Average Assets), Minimum for Capital Adequacy Purposes | 4.00% | 4.00% | |
Tier I Capital (to Average Assets), Minimum to be Well Capitalized under Prompt Corrective Action Provisions | 5.00% | 5.00% | |
Parent Company [Member] | |||
Total Capital and Tier I Capital (to Risk Weighted Assets), Ratio | |||
Total Capital (to Risk Weighted Assets), Actual | 16.00% | 15.00% | |
Tier I Capital (to Risk Weighted Assets), Actual | 12.40% | 11.60% | |
Common Equity Tier 1 Capital (to Risk Weighted Assets), Actual | 11.30% | ||
Tier I Capital (to Average Assets), Ratio | |||
Tier I Capital (to Average Assets), Actual | 8.80% | 6.20% |
COMMITMENTS AND CONTINGENCIES70
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2013lawsuit | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Loan Commitments [Line Items] | |||
Loan commitments | $ 140,248 | $ 102,284 | |
Number of claims filed that name the Bank as a defendant | lawsuit | 4 | ||
Legally Binding Commitments [Member] | |||
Loan Commitments [Line Items] | |||
Loan commitments | 124,266 | 89,511 | |
Commitments to Extend Credit [Member] | |||
Loan Commitments [Line Items] | |||
Loan commitments | 29,354 | 14,182 | |
Undisbursed Lines of Credit [Member] | |||
Loan Commitments [Line Items] | |||
Loan commitments | 94,241 | 73,888 | |
Financial Stand-by Letters of Credit [Member] | |||
Loan Commitments [Line Items] | |||
Loan commitments | 438 | 238 | |
Performance Stand-by Letters of Credit [Member] | |||
Loan Commitments [Line Items] | |||
Loan commitments | 233 | 1,203 | |
Unused Credit Card Lines [Member] | |||
Loan Commitments [Line Items] | |||
Loan commitments | $ 15,982 | $ 12,773 | |
Letter of Credit [Member] | |||
Loan Commitments [Line Items] | |||
Debt term | 4 years |
FAIR VALUE MEASUREMENTS (Assets
FAIR VALUE MEASUREMENTS (Assets Measured at Fair Value on Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | $ 70,281 | $ 64,211 |
Taxable Municipal Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 24,567 | 17,078 |
Mortgage-backed Securities GNMA [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 13,530 | 16,264 |
Mortgage-backed Securities FNMA & FHLMC [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 31,673 | 30,858 |
Other Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 500 | 0 |
Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 11 | 11 |
Quoted Prices in Active Markets for Identical Asset (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 0 | 0 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 69,781 | 64,211 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 500 | 0 |
Total Carrying Amount in the Consolidated Balance Sheet [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 70,281 | 64,211 |
Assets Measured at Fair Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 70,281 | 64,211 |
Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Asset (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 0 | 0 |
Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Asset (Level 1) [Member] | Taxable Municipal Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 0 | 0 |
Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Asset (Level 1) [Member] | Mortgage-backed Securities GNMA [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 0 | 0 |
Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Asset (Level 1) [Member] | Mortgage-backed Securities FNMA & FHLMC [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 0 | 0 |
Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Asset (Level 1) [Member] | Other Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 0 | |
Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Asset (Level 1) [Member] | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 0 | 0 |
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 69,781 | 64,211 |
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Taxable Municipal Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 24,567 | 17,078 |
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Mortgage-backed Securities GNMA [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 13,530 | 16,264 |
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Mortgage-backed Securities FNMA & FHLMC [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 31,673 | 30,858 |
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Other Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 0 | |
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 11 | 11 |
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 500 | 0 |
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Taxable Municipal Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 0 | 0 |
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Mortgage-backed Securities GNMA [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 0 | 0 |
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Mortgage-backed Securities FNMA & FHLMC [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 0 | 0 |
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Other Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 500 | |
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 0 | 0 |
Recurring Basis [Member] | Total Carrying Amount in the Consolidated Balance Sheet [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 70,281 | 64,211 |
Recurring Basis [Member] | Total Carrying Amount in the Consolidated Balance Sheet [Member] | Taxable Municipal Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 24,567 | 17,078 |
Recurring Basis [Member] | Total Carrying Amount in the Consolidated Balance Sheet [Member] | Mortgage-backed Securities GNMA [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 13,530 | 16,264 |
Recurring Basis [Member] | Total Carrying Amount in the Consolidated Balance Sheet [Member] | Mortgage-backed Securities FNMA & FHLMC [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 31,673 | 30,858 |
Recurring Basis [Member] | Total Carrying Amount in the Consolidated Balance Sheet [Member] | Other Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 500 | |
Recurring Basis [Member] | Total Carrying Amount in the Consolidated Balance Sheet [Member] | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 11 | 11 |
Recurring Basis [Member] | Assets Measured at Fair Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 70,281 | 64,211 |
Recurring Basis [Member] | Assets Measured at Fair Value [Member] | Taxable Municipal Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 24,567 | 17,078 |
Recurring Basis [Member] | Assets Measured at Fair Value [Member] | Mortgage-backed Securities GNMA [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 13,530 | 16,264 |
Recurring Basis [Member] | Assets Measured at Fair Value [Member] | Mortgage-backed Securities FNMA & FHLMC [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 31,673 | 30,858 |
Recurring Basis [Member] | Assets Measured at Fair Value [Member] | Other Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 500 | |
Recurring Basis [Member] | Assets Measured at Fair Value [Member] | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | $ 11 | $ 11 |
FAIR VALUE MEASUREMENTS (Level
FAIR VALUE MEASUREMENTS (Level 3 Assets Measured at Fair Value on Recurring Basis) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Level 3 Assets Measured at Fair Value on a Recurring Basis [Roll Forward] | ||
Beginning Balance | $ 0 | $ 1,025 |
Total realized and unrealized gains or (losses) included in earnings | 0 | 250 |
Total realized and unrealized gains or (losses) included in other comprehensive income | 0 | 150 |
Purchases, issuances and settlements | 500 | (1,425) |
Ending Balance | $ 500 | $ 0 |
FAIR VALUE MEASUREMENTS (Narrat
FAIR VALUE MEASUREMENTS (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | $ 1,145 | $ 2,882 |
Transfers of loans to loans held for sale | 2,618 | 13,193 |
Impaired loans | 8,926 | 13,415 |
With an allowance recorded | 3,838 | 2,005 |
Specific valuation allowance allocations | 1,261 | 663 |
With no related allowance recorded | 5,088 | 11,410 |
Valuation adjustment on foreclosed assets | 344 | 1,772 |
Foreclosed assets | 1,760 | 3,782 |
Estimated Fair Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 3,500 | 9,900 |
With an allowance recorded | 3,800 | 1,600 |
Specific valuation allowance allocations | 1,300 | 524 |
With no related allowance recorded | 1,000 | 8,800 |
Residential Mortgage [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | 335 | |
With an allowance recorded | 139 | 192 |
Specific valuation allowance allocations | 20 | 61 |
With no related allowance recorded | $ 1,305 | 2,030 |
Other Loans [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Transfers of loans to loans held for sale | $ 2,500 |
FAIR VALUE MEASUREMENTS (Asse74
FAIR VALUE MEASUREMENTS (Assets Measured at Fair Value on Nonrecurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Quoted Prices in Active Markets for Identical Asset (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | $ 0 | $ 0 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | 1,145 | 2,882 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | 0 | 0 |
Total Carrying Amount in the Consolidated Balance Sheet [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | 1,145 | 2,882 |
Assets Measured at Fair Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | 1,145 | 2,882 |
Nonrecurring Basis [Member] | Quoted Prices in Active Markets for Identical Asset (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | 0 | 0 |
Impaired loans | 0 | 0 |
Foreclosed assets | 0 | 0 |
Nonrecurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | 1,145 | 2,882 |
Impaired loans | 0 | 0 |
Foreclosed assets | 0 | 0 |
Nonrecurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | 0 | 0 |
Impaired loans | 3,540 | 9,855 |
Foreclosed assets | 1,760 | 3,782 |
Nonrecurring Basis [Member] | Total Carrying Amount in the Consolidated Balance Sheet [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | 1,145 | 2,882 |
Impaired loans | 3,540 | 9,855 |
Foreclosed assets | 1,760 | 3,782 |
Nonrecurring Basis [Member] | Assets Measured at Fair Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | 1,145 | 2,882 |
Impaired loans | 3,540 | 9,855 |
Foreclosed assets | $ 1,760 | $ 3,782 |
FAIR VALUE MEASUREMENTS (Leve75
FAIR VALUE MEASUREMENTS (Level 3 Nonrecurring and Recurring Fair Value Measurement) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Available for sale securities | $ 70,281 | $ 64,211 |
Impaired loans | 8,926 | 13,415 |
Foreclosed assets | 1,760 | 3,782 |
Other Debt Securities [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Available for sale securities | 500 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Available for sale securities | 500 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | Recurring Measurements [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Available for sale securities | 500 | $ 0 |
Significant Unobservable Inputs (Level 3) [Member] | Recurring Measurements [Member] | Other Debt Securities [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Available for sale securities | 500 | |
Significant Unobservable Inputs (Level 3) [Member] | Nonrecurring Measurements [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Impaired loans | 3,540 | |
Foreclosed assets | $ 1,760 | |
Loss given default (as a percent) | 100.00% | |
Significant Unobservable Inputs (Level 3) [Member] | Nonrecurring Measurements [Member] | Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Probability of default (as a percent) | 10.00% | |
Collateral discounts (as a percent) | 9.00% | |
Discounted appraisals (as a percent) | 10.00% | |
Significant Unobservable Inputs (Level 3) [Member] | Nonrecurring Measurements [Member] | Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Probability of default (as a percent) | 20.00% | |
Collateral discounts (as a percent) | 50.00% | |
Discounted appraisals (as a percent) | 30.00% |
FAIR VALUE MEASUREMENTS (Range
FAIR VALUE MEASUREMENTS (Range of Collateral Discounts) (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Commercial Construction and Land Development [Member] | Minimum [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Collateral discounts | 10.00% |
Commercial Construction and Land Development [Member] | Maximum [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Collateral discounts | 40.00% |
Commercial Real Estate [Member] | Minimum [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Collateral discounts | 9.00% |
Commercial Real Estate [Member] | Maximum [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Collateral discounts | 50.00% |
Residential Construction [Member] | Minimum [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Collateral discounts | 9.00% |
Residential Construction [Member] | Maximum [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Collateral discounts | 30.00% |
Residential Mortgage [Member] | Minimum [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Collateral discounts | 9.00% |
Residential Mortgage [Member] | Maximum [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Collateral discounts | 20.00% |
All Other Segments [Member] | Minimum [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Collateral discounts | 9.00% |
All Other Segments [Member] | Maximum [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Collateral discounts | 20.00% |
FAIR VALUE MEASUREMENTS (Fair V
FAIR VALUE MEASUREMENTS (Fair Value of Financial Instruments) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Financial assets: | ||
Certificates of deposit | $ 23,520 | $ 27,784 |
Available for sale securities | 70,281 | 64,211 |
Securities held-to-maturity | 65,633 | 82,242 |
Level 1 [Member] | ||
Financial assets: | ||
Cash and cash equivalents | 26,755 | 158,527 |
Certificates of deposit | 0 | 0 |
Available for sale securities | 0 | 0 |
Securities held-to-maturity | 0 | 0 |
Loans held for sale | 0 | 0 |
Loans, net | 0 | 0 |
FHLB stock | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Financial liabilities: | ||
Deposits | 0 | 0 |
Subordinated debentures and subordinated promissory notes | 0 | 0 |
Borrowings | 0 | 0 |
Accrued interest payable | 0 | 0 |
Level 2 [Member] | ||
Financial assets: | ||
Cash and cash equivalents | 0 | 0 |
Certificates of deposit | 23,520 | 27,784 |
Available for sale securities | 69,781 | 64,211 |
Securities held-to-maturity | 65,633 | 82,242 |
Loans held for sale | 1,145 | 2,882 |
Loans, net | 0 | 0 |
FHLB stock | 3,288 | 4,788 |
Accrued interest receivable | 1,594 | 1,627 |
Financial liabilities: | ||
Deposits | 541,818 | 663,000 |
Subordinated debentures and subordinated promissory notes | 0 | 0 |
Borrowings | 61,709 | 95,573 |
Accrued interest payable | 437 | 1,704 |
Level 3 [Member] | ||
Financial assets: | ||
Cash and cash equivalents | 0 | 0 |
Certificates of deposit | 0 | 0 |
Available for sale securities | 500 | 0 |
Securities held-to-maturity | 0 | 0 |
Loans held for sale | 0 | 0 |
Loans, net | 423,285 | 422,906 |
FHLB stock | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Financial liabilities: | ||
Deposits | 0 | 0 |
Subordinated debentures and subordinated promissory notes | 23,872 | 25,671 |
Borrowings | 0 | 0 |
Accrued interest payable | 0 | 0 |
Carrying Value [Member] | ||
Financial assets: | ||
Cash and cash equivalents | 26,755 | 158,527 |
Certificates of deposit | 23,520 | 27,784 |
Available for sale securities | 70,281 | 64,211 |
Securities held-to-maturity | 65,354 | 81,583 |
Loans held for sale | 1,145 | 2,882 |
Loans, net | 448,697 | 442,879 |
FHLB stock | 3,288 | 4,788 |
Accrued interest receivable | 1,594 | 1,627 |
Financial liabilities: | ||
Deposits | 542,334 | 661,185 |
Subordinated debentures and subordinated promissory notes | 23,872 | 24,372 |
Borrowings | 60,000 | 90,000 |
Accrued interest payable | 437 | 1,704 |
Estimated Fair Value [Member] | ||
Financial assets: | ||
Cash and cash equivalents | 26,755 | 158,527 |
Certificates of deposit | 23,520 | 27,784 |
Available for sale securities | 70,281 | 64,211 |
Securities held-to-maturity | 65,633 | 82,242 |
Loans held for sale | 1,145 | 2,882 |
Loans, net | 423,285 | 422,906 |
FHLB stock | 3,288 | 4,788 |
Accrued interest receivable | 1,594 | 1,627 |
Financial liabilities: | ||
Deposits | 541,818 | 663,000 |
Subordinated debentures and subordinated promissory notes | 23,872 | 25,671 |
Borrowings | 61,709 | 95,573 |
Accrued interest payable | $ 437 | $ 1,704 |
Loans Receivable [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Adjustment for current liquidity and market discount, rate | 5.00% |
STOCK OPTION PLAN (Narrative) (
STOCK OPTION PLAN (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for future issuance | 214,845 | |
Number of options granted during period (in shares) | 0 | |
Weighted average exercise price, exercisable options (in dollars per share) | $ 5.23 | |
Unrecognized compensation cost, non-vested awards | $ 25,388 | $ 42,016 |
Weighted average fair value of options granted (in dollars per share) | $ 0 | $ 1.03 |
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for future issuance | 1,542,773 | |
Award vesting rights, percentage | 100.00% | |
Award vesting period | 2 years | |
Stock Options [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 1 year | |
Stock Options [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 2 years |
STOCK OPTION PLAN (Option Activ
STOCK OPTION PLAN (Option Activity Rollforward) (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($)$ / sharesshares | |
Shares | |
Outstanding at beginning of period (in shares) | shares | 278,582 |
Issued (in shares) | shares | 0 |
Exercised (in shares) | shares | 0 |
Forfeited (in shares) | shares | 18,525 |
Expired (in shares) | shares | 66,327 |
Outstanding at end of period (in shares) | shares | 193,730 |
Option Price Per Share | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 4.86 |
Granted (in dollars per share) | $ / shares | 0 |
Exercised (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 1.99 |
Expired (in dollars per share) | $ / shares | 7.20 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 4.33 |
Options, Additional Disclosures | |
Weighted-Average Remaining Contractual Term | 1 year 9 months 3 days |
Aggregate Intrinsic Value | $ | $ 32,328 |
Options, Exercisable (in shares) | shares | 144,199 |
Options, Exercisable (in dollars per share) | $ / shares | $ 5.23 |
Options, Exercisable, Weighted Average Remaining Contractual Term | 1 year 3 months 10 days |
Options, Exercisable, Intrinsic Value | $ | $ 29,853 |
STOCK OPTION PLAN (Non-vested O
STOCK OPTION PLAN (Non-vested Options) (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Shares | ||
Non-vested - beginning of period (in shares) | 104,556 | |
Granted (in shares) | 0 | |
Vested (in shares) | 46,075 | |
Forfeited/Expired (in shares) | 8,950 | |
Non-vested - end of period (in shares) | 49,531 | 104,556 |
Weighted average grant date fair value | ||
Non-vested - beginning of period (in dollars per share) | $ 0.86 | |
Granted (in dollars per share) | 0 | $ 1.03 |
Vested (in dollars per share) | 0.69 | |
Forfeited/Expired (in dollars per share) | 0.83 | |
Non-vested - end of period (in dollars per share) | $ 1.03 | $ 0.86 |
STOCK OPTION PLAN (Options by E
STOCK OPTION PLAN (Options by Exercise Price) (Details) | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number Outstanding (in shares) | 193,730 |
Contractual Life (Years) | 1 year 9 months 3 days |
Number Exercisable (in shares) | 144,199 |
1.15 - 1.69 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | $ / shares | $ 1.15 |
Exercise price range, upper range limit (in dollars per share) | $ / shares | $ 1.69 |
Number Outstanding (in shares) | 46,075 |
Contractual Life (Years) | 2 years 2 months 8 days |
Number Exercisable (in shares) | 46,075 |
1.70 - 2.99 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | $ / shares | $ 1.70 |
Exercise price range, upper range limit (in dollars per share) | $ / shares | $ 2.99 |
Number Outstanding (in shares) | 93,650 |
Contractual Life (Years) | 2 years 2 months 15 days |
Number Exercisable (in shares) | 44,148 |
3.00 - 40.78 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | $ / shares | $ 3 |
Exercise price range, upper range limit (in dollars per share) | $ / shares | $ 40.78 |
Number Outstanding (in shares) | 41,700 |
Contractual Life (Years) | 1 month 27 days |
Number Exercisable (in shares) | 41,671 |
40.79 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price range, lower range limit (in dollars per share) | $ / shares | $ 40.79 |
Exercise price range, upper range limit (in dollars per share) | $ / shares | $ 40.79 |
Number Outstanding (in shares) | 12,305 |
Contractual Life (Years) | 2 years 25 days |
Number Exercisable (in shares) | 12,305 |
STOCK OPTION PLAN (Valuation As
STOCK OPTION PLAN (Valuation Assumptions) (Details) - Stock Options [Member] | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Valuation Assumptions [Line Items] | ||
Dividend yield | 0.00% | 0.00% |
Expected volatility | 0.00% | 73.30% |
Risk free interest rate | 0.00% | 1.57% |
Expected life | 0 years | 5 years |
RESTRICTED STOCK (Narrative) (D
RESTRICTED STOCK (Narrative) (Details) | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2015tranche | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock, par value (in dollars per share) | $ / shares | $ 1 | $ 1 | |
Unrecognized compensation cost | $ 25,388 | $ 42,016 | |
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares awarded | shares | 1,521,000 | ||
Compensation expense | $ 540,000 | ||
Unrecognized compensation cost | $ 1,800,000 | ||
Restricted Stock [Member] | Restricted Stock Plan 2015 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock, par value (in dollars per share) | $ / shares | $ 1 | ||
Number of separate tranches | tranche | 2 | ||
Restricted Stock [Member] | Restricted Stock Plan 2015 [Member] | At the End of Period Ended December 31, 2015 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage | 15.00% | ||
Award vesting period | 1 year | ||
Percentage of awards that will be forfeited | 15.00% | ||
Restricted Stock [Member] | Restricted Stock Plan 2015 [Member] | At the End of Period Ended December 31, 2015 [Member] | Threshold Performance Level Achieved [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage | 10.50% | ||
Budgeted net income, performance target (as a percent) | 70.00% | ||
Restricted Stock [Member] | Restricted Stock Plan 2015 [Member] | At the End of Period Ended December 31, 2015 [Member] | Target Performance Level Achieved [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage | 15.00% | ||
Budgeted net income, performance target (as a percent) | 100.00% | ||
Restricted Stock [Member] | Restricted Stock Plan 2015 [Member] | At the End of Period Ending December 31, 2018 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage | 85.00% | ||
Award vesting period | 3 years | ||
Restricted Stock [Member] | Restricted Stock Plan 2015 [Member] | At the End of Period Ending December 31, 2018 [Member] | Threshold Performance Level Achieved [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage | 50.00% | ||
Earnings per share, performance target (as a percent) | 60.00% | ||
Restricted Stock [Member] | Restricted Stock Plan 2015 [Member] | At the End of Period Ending December 31, 2018 [Member] | Target Performance Level Achieved [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage | 100.00% | ||
Earnings per share, performance target (as a percent) | 100.00% | ||
Restricted Stock [Member] | Restricted Stock Plan 2015 [Member] | At the End of Period Ending December 31, 2018 [Member] | Below Performance Level, Achievement Rate One [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage | 60.00% | ||
Earnings per share, performance target (as a percent) | 70.00% | ||
Restricted Stock [Member] | Restricted Stock Plan 2015 [Member] | At the End of Period Ending December 31, 2018 [Member] | Below Performance Level, Achievement Rate Two [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage | 75.00% | ||
Earnings per share, performance target (as a percent) | 80.00% | ||
Restricted Stock [Member] | Restricted Stock Plan 2015 [Member] | At the End of Period Ending December 31, 2018 [Member] | Below Performance Level, Achievement Rate Three [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage | 87.50% | ||
Earnings per share, performance target (as a percent) | 90.00% | ||
Restricted Stock [Member] | Restricted Stock Plan 2015 [Member] | At the End of Period Ending December 31, 2018 [Member] | Above Target Performance Level Achieved, Additional Rate [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage | 10.00% | ||
Earnings per share, performance target (as a percent) | 110.00% |
RESTRICTED STOCK (Non-vested Re
RESTRICTED STOCK (Non-vested Restricted Stock Award) (Details) - Restricted Stock [Member] | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Restricted Stock | |
Balance as of beginning of period (in shares) | shares | 0 |
Granted (in shares) | shares | 1,521,000 |
Vested (in shares) | shares | (97,825) |
Forfeited (in shares) | shares | (60,000) |
Balance as of end of period (in shares) | shares | 1,363,175 |
Weighted Average Grant-Date Fair Value | |
Balance as of beginning of period (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 1.53 |
Vested (in dollars per share) | $ / shares | 1.52 |
Forfeited (in dollars per share) | $ / shares | 1.52 |
Balance as of end of period (in dollars per share) | $ / shares | $ 1.64 |
OTHER EMPLOYEE BENEFITS (Detail
OTHER EMPLOYEE BENEFITS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Maximum annual contribution per employee, amount | $ 17,500 | $ 17,500 |
Maximum annual contribution per employee, percent | 50.00% | 25.00% |
Employer matching contribution, percent | 6.00% | 6.00% |
Defined contribution plan, expenses | $ 189,000 | $ 76,000 |
Common stock reserved for future issuance | 214,845 | |
Sick Leave Plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Maximum contractual term | 60 days | |
Requisite service period | 10 years | |
Retirement age | 55 years | |
Accrued liability, sick leave | $ 587,000 | 562,000 |
Deferred compensation expenses under the plan | 68,000 | 82,000 |
Cash benefits paid to retiring employees | $ 43,000 | 40,000 |
Employee Stock Purchase and Bonus Plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Maximum employee subscription rate | 5.00% | |
Maximum employee subscription amount | $ 1,000 | |
Employer matching percent | 50.00% | |
Employer matching amount | $ 500 | |
Common stock reserved for future issuance | 39,000 | |
Total shares purchased to date | 480,000 | |
Shares purchased | 79,000 | |
President [Member] | SERP [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Accrued liability | $ 507,000 | 477,000 |
Retirement plan expense | $ 30,000 | $ 0 |
LEASES (Details)
LEASES (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015USD ($)branch_offices | Dec. 31, 2014USD ($) | |
Leases [Abstract] | ||
Number of branch facilities | branch_offices | 7 | |
Leases | ||
2,016 | $ 329 | |
2,017 | 240 | |
2,018 | 185 | |
2,019 | 178 | |
2,020 | 183 | |
2021 and beyond | 266 | |
Future minimum lease payments | 1,381 | |
Total rental expense | $ 373 | $ 327 |
PARENT COMPANY FINANCIAL INFO87
PARENT COMPANY FINANCIAL INFORMATION (Condensed Balance Sheets) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Assets: | |||
Cash and cash equivalents | $ 26,755 | $ 158,527 | $ 128,629 |
Available for sale securities | 70,281 | 64,211 | |
Other assets | 5,244 | 6,248 | |
TOTAL ASSETS | 691,387 | 820,796 | |
Liabilities and Shareholders’ Equity: | |||
Other liabilities | 4,338 | 2,806 | |
Subordinated debentures | 12,372 | 12,372 | |
Subordinated promissory notes | 11,500 | 12,000 | |
Shareholders' equity | 60,406 | 40,729 | 21,623 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 691,387 | 820,796 | |
Parent Company [Member] | |||
Assets: | |||
Cash and cash equivalents | 1,362 | 3,958 | $ 456 |
Equity investment in subsidiaries | 81,638 | 61,937 | |
Available for sale securities | 11 | 11 | |
Other assets | 1,128 | 131 | |
TOTAL ASSETS | 84,139 | 66,037 | |
Liabilities and Shareholders’ Equity: | |||
Other liabilities | 26 | 936 | |
Subordinated debentures | 12,372 | 12,372 | |
Subordinated promissory notes | 11,500 | 12,000 | |
Shareholders' equity | 60,241 | 40,729 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 84,139 | $ 66,037 |
PARENT COMPANY FINANCIAL INFO88
PARENT COMPANY FINANCIAL INFORMATION (Condensed Statements of Operations) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Condensed Income Statements, Captions [Line Items] | ||
Gain on sale of investments, available-for-sale | $ 265,000 | $ 265,000 |
Recovery of impairment loss on investment securities available-for-sale | 0 | |
Income (loss) before income taxes | 3,528,000 | (4,189,000) |
Applicable income tax benefit | (16,480,000) | 0 |
Net income (loss) | 20,008,000 | (4,189,000) |
Parent Company [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Equity in undistributed income (loss) of subsidiaries | 20,367,000 | (3,128,000) |
Interest income | 27,000 | 5,000 |
Gain on sale of investments, available-for-sale | 0 | 109,000 |
Recovery of impairment loss on investment securities available-for-sale | 0 | 189,000 |
Other income | 11,000 | 20,000 |
Other expenses | (1,408,000) | (1,384,000) |
Income (loss) before income taxes | 18,997,000 | (4,189,000) |
Applicable income tax benefit | (1,011,000) | 0 |
Net income (loss) | $ 20,008,000 | $ (4,189,000) |
PARENT COMPANY FINANCIAL INFO89
PARENT COMPANY FINANCIAL INFORMATION (Condensed Statements of Cash Flows) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities: | ||
Net income (loss) | $ 20,008 | $ (4,189) |
Gain on sale of investments | (265) | (265) |
(Increase) decrease in other assets | 1,004 | (153) |
(Decrease) increase in other liabilities | 1,532 | (1,483) |
Net cash provided by operating activities | 11,159 | 12,079 |
Investing activities: | ||
Sales and maturities of securities | 8,324 | 22,737 |
Net cash provided by investing activities | 6,275 | 14,012 |
Financing activities: | ||
Proceeds from issuance of common stock | 170 | 22,242 |
Repayment of subordinated promissory notes | (500) | 0 |
Shares withheld for payment of taxes | (25) | 0 |
Net cash (used in) provided by financing activities | (149,206) | 3,807 |
Change in cash and cash equivalents | (131,772) | 29,898 |
Cash and cash equivalents at beginning of period | 158,527 | 128,629 |
Cash and cash equivalents at end of period | 26,755 | 158,527 |
Parent Company [Member] | ||
Operating activities: | ||
Net income (loss) | 20,008 | (4,189) |
Equity in undistributed loss of subsidiaries | (20,367) | 3,128 |
Gain on sale of investments | 0 | (298) |
(Increase) decrease in other assets | (972) | 16 |
(Decrease) increase in other liabilities | (910) | 199 |
Net cash provided by operating activities | (2,241) | (1,144) |
Investing activities: | ||
Investment in subsidiaries | 0 | (19,157) |
Sales and maturities of securities | 0 | 1,560 |
Net cash provided by investing activities | 0 | (17,597) |
Financing activities: | ||
Proceeds from issuance of common stock | 170 | 22,243 |
Repayment of subordinated promissory notes | (500) | 0 |
Shares withheld for payment of taxes | (25) | 0 |
Net cash (used in) provided by financing activities | (355) | 22,243 |
Change in cash and cash equivalents | (2,596) | 3,502 |
Cash and cash equivalents at beginning of period | 3,958 | 456 |
Cash and cash equivalents at end of period | $ 1,362 | $ 3,958 |