Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 01, 2020 | Jun. 30, 2019 | |
Document And Entity Information | |||
Entity Registrant Name | SALISBURY BANCORP INC | ||
Entity Central Index Key | 0001060219 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Entity Incorporation, State or Country Code | CT | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 000-24751 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Interactive Data Current | Yes | ||
Is Entity Emerging Growth Company? | false | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Public Float | $ 110,100 | ||
Entity Common Stock, Shares Outstanding | 2,827,667 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 | ||
Entity Shell Company | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and due from banks | $ 7,406 | $ 7,238 |
Interest bearing demand deposits with other banks | 19,479 | 51,207 |
Total cash and cash equivalents | 26,885 | 58,445 |
Interest bearing time deposits with financial institutions | 750 | |
Securities | ||
Available-for-sale at fair value | 91,801 | 91,818 |
CRA mutual fund | 882 | 836 |
Federal Home Loan Bank of Boston stock at cost | 3,242 | 4,496 |
Loans held-for-sale | 332 | |
Loans receivable, net (allowance for loan losses: $8,846 and $7,831) | 927,413 | 909,279 |
Other real estate owned | 314 | 1,810 |
Bank premises and equipment, net | 17,385 | 18,175 |
Goodwill | 13,815 | 13,815 |
Intangible assets (net of accumulated amortization: $4,795 and $4,498) | 995 | 1,383 |
Accrued interest receivable | 3,415 | 3,148 |
Cash surrender value of life insurance policies | 20,580 | 14,438 |
Deferred taxes | 1,249 | 1,276 |
Other assets | 3,390 | 2,635 |
Total Assets | 1,112,448 | 1,121,554 |
Deposits | ||
Demand (non-interest bearing) | 237,852 | 228,448 |
Demand (interest bearing) | 153,314 | 153,586 |
Money market | 239,504 | 204,219 |
Savings and other | 161,112 | 178,807 |
Certificates of deposit | 127,724 | 161,679 |
Total deposits | 919,506 | 926,739 |
Repurchase agreements | 8,530 | 4,104 |
Federal Home Loan Bank of Boston advances | 50,887 | 67,154 |
Subordinated debt | 9,859 | 9,835 |
Note payable | 246 | 280 |
Financial lease obligations | 1,718 | 3,081 |
Accrued interest and other liabilities | 8,047 | 6,902 |
Total Liabilities | 998,793 | 1,018,095 |
Shareholders' Equity | ||
Common stock - $.10 per share par value; Authorized: 5,000,000; Issued: 2,899,408 and 2,884,988; Outstanding: 2,823,212 and 2,806,781 | 283 | 281 |
Unearned compensation - restricted stock awards | (795) | (711) |
Paid-in capital | 44,490 | 43,770 |
Retained earnings | 68,320 | 60,339 |
Accumulated other comprehensive income (loss), net | 1,357 | (220) |
Total Shareholders' Equity | 113,655 | 103,459 |
Total Liabilities and Shareholders' Equity | $ 1,112,448 | $ 1,121,554 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Allowance for loan losses, loans receivable | $ 8,895 | $ 7,831 |
Accumulated amortization, intangible assets | $ 4,886 | $ 4,498 |
Shareholders' Equity | ||
Common stock, par value | $ 0.10 | $ 0.10 |
Common stock, authorized | 5,000,000 | 5,000,000 |
Common stock, issued | 2,825,912 | 2,806,781 |
Common stock, outstanding | 2,825,912 | 2,806,781 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Interest and dividend income | |||
Interest and fees on loans | $ 39,742 | $ 37,072 | $ 33,090 |
Interest on debt securities | |||
Taxable | 2,223 | 2,231 | 1,566 |
Tax exempt | 545 | 136 | 380 |
Other interest and dividends | 903 | 933 | 485 |
Total interest and dividend income | 43,413 | 40,372 | 35,521 |
Interest expense | |||
Deposits | 7,324 | 4,656 | 2,483 |
Repurchase agreements | 24 | 12 | 5 |
Finance lease | 170 | 178 | 96 |
Note payable | 16 | 18 | 18 |
Subordinated debt | 624 | 624 | 624 |
Federal Home Loan Bank of Boston advances | 1,143 | 1,733 | 1,012 |
Total interest expense | 9,301 | 7,221 | 4,238 |
Net interest and dividend income | 34,112 | 33,151 | 31,283 |
Provision for loan losses | 955 | 1,728 | 1,020 |
Net interest and dividend income after provision for loan losses | 33,157 | 31,423 | 30,263 |
Non-interest income | |||
Trust and wealth advisory | 3,995 | 3,700 | 3,477 |
Service charges and fees | 4,028 | 3,718 | 3,718 |
Gains on sales of mortgage loans, net | 116 | 89 | 125 |
Mortgage servicing, net | 307 | 308 | 255 |
Gains (Losses) on CRA mutual fund | 25 | (18) | |
Gains on securities, net | 263 | 318 | 178 |
BOLI income and gains | 392 | 678 | 343 |
Other | 124 | 152 | 140 |
Total non-interest income | 9,250 | 8,945 | 8,236 |
Non-interest expense | |||
Salaries | 12,048 | 12,003 | 11,135 |
Employee benefits | 4,384 | 4,280 | 3,767 |
Premises and equipment | 4,016 | 4,535 | 3,831 |
Data processing | 2,201 | 2,119 | 2,057 |
Professional fees | 2,213 | 2,236 | 2,499 |
OREO gains, losses and write-downs, net | 408 | 275 | 1,716 |
Collections, OREO, and appraisals | 436 | 578 | 463 |
FDIC insurance | 261 | 579 | 497 |
Marketing and community support | 619 | 815 | 793 |
Amortization of intangibles | 388 | 454 | 533 |
Other | 1,938 | 1,961 | 2,038 |
Total non-interest expense | 28,912 | 29,835 | 29,329 |
Income before income taxes | 13,495 | 10,533 | 9,170 |
Income tax provision | 2,359 | 1,709 | 2,914 |
Net income | 11,136 | 8,824 | 6,256 |
Net income allocated to common stock | $ 10,976 | $ 8,713 | $ 6,201 |
Basic earnings per common share | $ 3.95 | $ 3.15 | $ 2.25 |
Weighted average common shares outstanding, to calculate basic earnings per share | 2,782 | 2,763 | 2,755 |
Diluted earnings per common share | $ 3.93 | $ 3.13 | $ 2.24 |
Weighted average common shares outstanding, to calculate diluted earnings per share | 2,794 | 2,780 | 2,774 |
Common dividends per share | $ 1.12 | $ 1.12 | $ 1.12 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Net income | $ 11,136 | $ 8,824 | $ 6,256 |
Other comprehensive income (loss) | |||
Net unrealized gains (losses) on securities available-for-sale | 2,258 | (202) | (318) |
Reclassification of net realized gains in net income | (263) | (318) | (178) |
Unrealized gains (losses) on securities available-for-sale | 1,995 | (520) | (496) |
Income tax (expense) benefit | (418) | 105 | 198 |
Unrealized gains (losses) on securities available-for-sale, net of tax | 1,577 | (415) | (298) |
Other comprehensive income (loss) | 1,577 | (415) | (298) |
Comprehensive income | $ 12,713 | $ 8,409 | $ 5,958 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Paid-in capital | Retained earnings | Unearned compensation restricted stock awards | Accumulated other comprehensive (loss) income | Total |
Balance - Beginning, amount at Dec. 31, 2016 | $ 276 | $ 42,085 | $ 51,521 | $ (352) | $ 477 | $ 94,007 |
Balance - Beginning, shares at Dec. 31, 2016 | 2,758,086 | |||||
Net income | 6,256 | 6,256 | ||||
Other comprehensive loss/income, net of tax | (298) | (298) | ||||
Common stock dividends declared | (3,113) | (3,113) | ||||
Stock options exercised, amount | $ 1 | 315 | 316 | |||
Stock options exercised, shares | 12,150 | |||||
Issuance of restricted common stock, amount | $ 2 | 462 | (464) | |||
Issuance of restricted common stock, shares | 11,800 | |||||
Forfeiture of restricted stock, amount | (28) | 28 | ||||
Forfeiture of restricted stock, shares | (900) | |||||
Issuance of common stock for directors fees, amount | 81 | 81 | ||||
Issuance of common stock for directors fees, shares | 2,056 | |||||
Issuance of director's restricted stock awards, amount | 83 | (83) | ||||
Issuance of director's restricted stock awards, shares | 2,024 | |||||
Stock based compensation - restricted stock awards | 265 | 265 | ||||
Balance - Ending, amount at Dec. 31, 2017 | $ 279 | 42,998 | 54,664 | (606) | 179 | 97,514 |
Balance - Ending, shares at Dec. 31, 2017 | 2,785,216 | |||||
Net income | 8,824 | 8,824 | ||||
Adoption of new accounting principle | (16) | 16 | ||||
Other comprehensive loss/income, net of tax | (415) | (415) | ||||
Common stock dividends declared | (3,133) | (3,133) | ||||
Stock options exercised, amount | $ 1 | 221 | 222 | |||
Stock options exercised, shares | 9,155 | |||||
Issuance of restricted common stock, amount | $ 1 | 409 | (410) | |||
Issuance of restricted common stock, shares | 9,250 | |||||
Forfeiture of restricted stock, amount | (33) | 33 | ||||
Forfeiture of restricted stock, shares | (800) | |||||
Issuance of director's restricted stock awards, amount | 175 | (175) | ||||
Issuance of director's restricted stock awards, shares | 3,960 | |||||
Stock based compensation - restricted stock awards | 447 | 447 | ||||
Balance - Ending, amount at Dec. 31, 2018 | $ 281 | 43,770 | 60,339 | (711) | (220) | $ 103,459 |
Balance - Ending, shares at Dec. 31, 2018 | 2,806,781 | 2,806,781 | ||||
Net income | 11,136 | $ 11,136 | ||||
Other comprehensive loss/income, net of tax | 1,577 | 1,577 | ||||
Common stock dividends declared | (3,155) | (3,155) | ||||
Stock options exercised, amount | 82 | 82 | ||||
Stock options exercised, shares | 4,725 | |||||
Issuance of restricted common stock, amount | $ 2 | 457 | (459) | |||
Issuance of restricted common stock, shares | 11,530 | |||||
Forfeiture of restricted stock, amount | (31) | 31 | ||||
Forfeiture of restricted stock, shares | (710) | |||||
Issuance of director's restricted stock awards, amount | 142 | (142) | ||||
Issuance of director's restricted stock awards, shares | 3,600 | |||||
Retired common stock, amount | ||||||
Retired common stock, shares | (14) | |||||
Stock based compensation - restricted stock awards | 70 | 486 | 556 | |||
Balance - Ending, amount at Dec. 31, 2019 | $ 283 | $ 44,490 | $ 68,320 | $ (795) | $ 1,357 | $ 113,655 |
Balance - Ending, shares at Dec. 31, 2019 | 2,825,912 | 2,825,912 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Activities | |||
Net income | $ 11,136 | $ 8,824 | $ 6,256 |
(Accretion), amortization and depreciation | |||
Securities | 332 | 31 | 145 |
Bank premises and equipment | 1,591 | 1,668 | 1,441 |
Core deposit intangible | 388 | 454 | 533 |
Modification fees on Federal Home Loan Bank of Boston advances | 232 | 232 | 234 |
Subordinated debt issuance costs | 24 | 24 | 23 |
Mortgage servicing rights | 51 | 48 | 169 |
Fair value adjustment on loans | (64) | (779) | (1,207) |
Fair value adjustment on deposits | (8) | (37) | (78) |
(Gains) and losses, including write-downs on sales and calls of securities available-for-sale, net | (263) | (318) | (178) |
(Gains) and losses, including write-downs on sales of loans, excluding capitalized servicing rights | (82) | (71) | (95) |
(Gains) and losses, including write-downs on CRA Mutual Fund | (25) | 18 | |
(Gains) and losses, including write-downs of other real estate owned | 408 | 274 | 1,717 |
(Gains) and losses, including write-downs on sale/disposals of premises and equipment | 85 | 1 | |
Gain from BOLI | (341) | ||
Provision for loan losses | 955 | 1,728 | 1,020 |
Proceeds from loans sold | 6,447 | 4,555 | 5,440 |
Loans originated for sale | (6,697) | (3,815) | (6,014) |
Decrease (increase) in deferred loan origination fees and costs, net | 59 | (132) | (42) |
Mortgage servicing rights originated | (61) | (43) | (63) |
Decrease in mortgage servicing rights impairment reserve | (23) | ||
Increase in interest receivable | (267) | (478) | (229) |
Deferred tax (benefit) expense | (391) | (494) | 888 |
(Increase) decrease in prepaid expenses | (174) | (50) | 123 |
Increase in cash surrender value of life insurance policies | (392) | (337) | (343) |
Decrease (increase) in income tax receivable | 137 | 760 | (173) |
Increase in income tax payable | 235 | ||
Decrease in other assets | 846 | 48 | 790 |
Increase (decrease) in accrued expenses | 352 | 769 | (643) |
(Decrease) increase in interest payable | (159) | 138 | 10 |
(Decrease) increase in other liabilities | (835) | 69 | 240 |
Stock based compensation - restricted stock awards | 556 | 447 | 265 |
Net cash provided by operating activities | 14,330 | 13,277 | 10,207 |
Investing Activities | |||
Redemptions (purchases) of Federal Home Loan Bank of Boston stock, net | 1,254 | (683) | (602) |
Purchases of securities available-for-sale | (53,467) | (41,631) | (36,654) |
Purchases of interest bearing time deposits with financial institutions | (750) | ||
Proceeds from sales of securities available-for-sale | 41,814 | 10,036 | 199 |
Proceeds from calls of securities available-for-sale | 75 | 695 | 16,141 |
Proceeds from maturities of securities available-for-sale | 13,521 | 17,061 | 20,427 |
Reinvestment of CRA Mutual Fund | (21) | (19) | |
Loan originations and principle collections, net | (19,172) | (102,273) | (32,536) |
Recoveries of loans previously charged off | 88 | 74 | 600 |
Proceeds from sales of other real estate owned | 1,088 | 289 | 2,080 |
Capital expenditures | (2,055) | (1,393) | (1,954) |
Investment in BOLI | (5,750) | ||
Net cash and cash equivalents (paid) acquired in branch acquisition | (298) | 22,396 | |
Net cash utilized by investing activities | (23,375) | (118,142) | (9,903) |
Financing Activities | |||
Increase in deposit transaction accounts, net | 26,722 | 58,658 | 7,578 |
(Decrease) increase in time deposits, net | (33,947) | 44,300 | (5,208) |
Increase (decrease) in securities sold under agreements to repurchase, net | 4,426 | 2,436 | (3,867) |
Short-term Federal Home Loan Bank of Boston advances, net | 20,500 | (17,500) | 17,000 |
Long-term Federal Home Loan Bank of Boston advances, net | (37,000) | 30,000 | |
Principal payments on note payable | (34) | (33) | (31) |
Decrease in finance lease obligation | (109) | (127) | (59) |
Stock options exercised | 82 | 222 | 316 |
Issuance of shares for directors' fees | 1 | 81 | |
Common stock dividends paid | (3,155) | (3,133) | (3,113) |
Net cash (applied to) provided by financing activities | (22,515) | 114,824 | 12,697 |
Net (decrease) increase in cash and cash equivalents | (31,560) | 9,959 | 13,001 |
Cash and cash equivalents, beginning of year | 58,445 | 48,486 | 35,485 |
Cash and cash equivalents, end of year | 26,885 | 58,445 | 48,486 |
Cash paid during year | |||
Interest | 9,212 | 6,864 | 4,049 |
Income taxes | 2,378 | 1,443 | 2,291 |
Non-cash transfers | |||
From loans to other real estate owned | 1,654 | 743 | |
Finance Lease Obligation | 1,373 | ||
Finance Lease Paid-off | |||
Fixed Asset | (1,158) | ||
Lease liability | 1,254 | ||
Deferred gain applied to bank premises and equipment | (96) | ||
Transfer of unearned credit-related discount to allowance for loan losses | 663 | ||
Adoption of new accounting principle - Other assets | 1,552 | ||
Adoption of new accounting principle - Other liabilities | (1,552) | ||
Adoption of new accounting principle | 16 | ||
BOLI proceeds included in other assets | 621 | ||
Branch acquisition | |||
Cash and cash equivalents (paid) acquired | (298) | 22,387 | |
Net loans acquired | 7,849 | 7,097 | |
Fixed assets acquired (including capital leases) | 761 | 1,605 | |
Accrued interest receivable acquired | 5 | 12 | |
Other assets acquired | 6 | 20 | |
Core deposit intangible | 633 | ||
Goodwill | 1,263 | ||
Deposits assumed | 8,323 | 31,433 | |
Capital lease assumed | 1,476 | ||
Other liabilities assumed | $ 3 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Salisbury Bancorp, Inc. (“Salisbury” or the “Company”) is the bank holding company for Salisbury Bank (the “Bank”), a State chartered commercial bank. Salisbury's activity is currently limited to the holding of the Bank's outstanding capital stock and the Bank is Salisbury's only subsidiary and its primary investment. The Bank is a Connecticut chartered and Federal Deposit Insurance Corporation (the "FDIC") insured commercial bank headquartered in Lakeville, Connecticut. The Bank's principal business consists of attracting deposits from the public and using such deposits, with other funds, to make various types of loans and investments. The Bank conducts its business through fourteen full-service offices located in Litchfield, Berkshire and Dutchess, Orange and Ulster Counties in Connecticut, Massachusetts and New York, respectively. Principles of Consolidation The consolidated financial statements include those of Salisbury and the Bank after elimination of all inter-company accounts and transactions. Basis of Financial Statement Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and general practices within the financial services industry. In preparing the consolidated financial statements, management is required to make extensive use of estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statement of condition, and revenues and expenses for the period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, potential other-than-temporary impairment of securities and potential impairment of goodwill and intangibles. Certain reclassifications have been made to the 2018 and 2017 consolidated financial statements to make them consistent with the 2019 presentation. Cash and Cash Equivalents Cash and cash equivalents include cash and balances due from banks and interest-bearing demand deposits in other banks. Due to the nature of cash and cash equivalents, Salisbury estimated that the carrying amount of such instruments approximated fair value. The nature of the Bank's business requires that it maintain amounts due from banks which, at times, may exceed federally insured limits. The Bank has not experienced any losses on such amounts and all amounts are maintained with well-capitalized institutions. Interest Bearing Time Deposits with Financial Institutions Interest bearing time deposits are balances held in CD's in a CDARS program. Due to the nature of time deposits, Salisbury estimated that the carrying amount of such instruments are at par. Securities Securities that may be sold as part of Salisbury's asset/liability or liquidity management or in response to or in anticipation of changes in interest rates and resulting prepayment risk, or for other similar factors, are classified as available-for-sale and carried at their fair value. Unrealized holding gains and losses on such securities are reported net of related taxes, if applicable, as a separate component of shareholders' equity. Securities that Salisbury has the ability and positive intent to hold to maturity are classified as held-to-maturity and carried at amortized cost. Realized gains and losses on the sales of all securities are reported in earnings and computed using the specific identification cost basis. Securities are reviewed regularly for other-than-temporary impairment (“OTTI”). Premiums and discounts are amortized or accreted utilizing the interest method over the life or call of the term of the investment security. For any debt security with a fair value less than its amortized cost basis, Salisbury will determine whether it has the intent to sell the debt security or whether it is more likely than not it will be required to sell the debt security before the recovery of its amortized cost basis. If either condition is met, Salisbury will recognize a full impairment charge to earnings. For all other debt securities that are considered OTTI and do not meet either condition, the credit loss portion of impairment will be recognized in earnings as realized losses. Federal Home Loan Bank of Boston Stock The Bank is a member of the Federal Home Loan Bank of Boston (“FHLBB”). The FHLBB is a cooperative that provides services, including funding in the form of advances, to its member banking institutions. As a requirement of membership, the Bank must own a minimum amount of FHLBB stock, calculated periodically based primarily on its level of borrowings from the FHLBB. No market exists for shares of the FHLBB and therefore, they are carried at par value. FHLBB stock may be redeemed at par value five years following termination of FHLBB membership, subject to limitations which may be imposed by the FHLBB or its regulator, the Federal Housing Finance Board, to maintain capital adequacy of the FHLBB. While the Bank currently has no intentions to terminate its FHLBB membership, the ability to redeem its investment in FHLBB stock would be subject to the conditions imposed by the FHLBB. Based on the capital adequacy and the liquidity position of the FHLBB, management believes there is no impairment related to the carrying amount of the Bank's FHLBB stock as of December 31, 2019. Deterioration of the FHLBB's capital levels may require the Bank to deem its restricted investment in FHLBB stock to be OTTI. If evidence of impairment exists in the future, the FHLBB stock would reflect fair value using either observable or unobservable inputs. The Bank will continue to monitor its investment in FHLBB stock. Loans Loans receivable consist of loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off. Loans receivable are reported at their outstanding principal balance, net of unamortized deferred loan origination fees and costs on originated loans and unamortized premiums on purchased loans. Interest income is accrued on the unpaid principal balance. Deferred loan origination fees and costs are amortized as an adjustment to yield over the lives of the related loans. The Bank's loans collateralized by real estate and all other real estate owned (“OREO”) are located principally in northwestern Connecticut and New York and Massachusetts towns, which constitute Salisbury's service area. Accordingly, the collectability of a substantial portion of the loan portfolio and OREO is susceptible to changes in market conditions in Salisbury's service area. While management uses available information to recognize losses on loans and OREO, future additions to the allowance or write-downs of OREO may be necessary based on changes in local economic conditions, particularly in Salisbury's service area. Loans held-for-sale consist of residential mortgage loans that management has the intent to sell. Loans held-for-sale are valued at the lower of cost or market as determined by outstanding commitments from investors or current investor yield requirements calculated on the aggregate loan basis, net of deferred loan origination fees and costs. Changes in the carrying value, deferred loan origination fees and costs, and realized gains and losses on sales of loans held-for-sale are reported in earnings as gains and losses on sales of mortgage loans, net, when the proceeds are received from investors. The accrual of interest on loans, including troubled debt restructured loans, is generally discontinued when principal or interest is past due by 90 days or more, or earlier when, in the opinion of management, full collection of principal or interest is unlikely, except for loans that are well collateralized, in the process of collection and where full collection of principal and interest is assured. When a loan is placed on non-accrual status, interest previously accrued but not collected is reversed against current income. Income on such loans, including impaired loans, is then recognized only to the extent that cash is received and future collection of principal is probable. Loans, including troubled debt restructured loans, are restored to accrual status when principal and interest payments are brought current and future payments are reasonably assured, following a sustained period of repayment performance by the borrower in accordance with the loan's contractual terms. Troubled debt restructured loans include those for which concessions such as reduction of interest rates, other than normal market rate adjustments, or deferral of principal or interest payments, extension of maturity dates, or reduction of principal balance or accrued interest, have been granted due to a borrower's financial condition. The decision to restructure a loan, versus aggressively enforcing the collection of the loan, may benefit Salisbury by increasing the ultimate probability of collection. Troubled debt restructured loans are classified as accruing or non-accruing based on management's assessment of the collectability of the loan. Loans which are already on non-accrual status at the time of the troubled debt restructuring generally remain on non-accrual status for approximately six months before management considers such loans for return to accruing status. Accruing troubled debt restructured loans are generally placed into non-accrual status if and when the borrower fails to comply with the restructured terms. Acquired Loans Loans that Salisbury acquired through business combinations are initially recorded at fair value with no carryover of the related allowance for credit losses. Determining the fair value of the loans involves estimating the amount and timing of principal and interest cash flows initially expected to be collected on the loans and discounting those cash flows at an appropriate market rate of interest. For loans that meet the criteria stipulated in Accounting Standards Codification (“ASC”) 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality,” Salisbury recognizes the accretable yield, which is defined as the excess of all cash flows expected to be collected at acquisition over the initial fair value of the loan, as interest income on a level-yield basis over the expected remaining life of the loan. The excess of the loan's contractually required payments over the cash flows expected to be collected is the nonaccretable difference. The nonaccretable difference is not recognized as an adjustment of yield, a loss accrual, or a valuation allowance. Going forward, Salisbury continues to evaluate whether the timing and the amount of cash to be collected are reasonably expected. Subsequent significant increases in cash flows Salisbury expects to collect will first reduce any previously recognized valuation allowance and then be reflected prospectively as an increase to the level yield. Subsequent decreases in expected cash flows may result in the loan being considered impaired. Such decreases may also result in recognition of additional provisions to the allowance for loan losses. Interest income is not recognized to the extent that the net investment in the loan would increase to an amount greater than the estimated payoff amount. For ASC 310-30 loans, the expected cash flows reflect anticipated prepayments, determined on a loan by loan basis according to the anticipated collection plan of these loans. The expected prepayments used to determine the accretable yield are consistent between the cash flows expected to be collected and projections of contractual cash flows so as to not affect the nonaccretable difference. For ASC 310-30 loans, prepayments result in the recognition of the nonaccretable balance as current period yield. Changes in prepayment assumptions may change the amount of interest income and principal expected to be collected. For loans that do not meet the ASC 310-30 criteria, Salisbury accretes interest income on a level yield basis using the contractually required cash flows. Salisbury subjects loans that do not meet the ASC 310-30 criteria to ASC Topic 450, “Contingencies” by collectively evaluating these loans for an allowance for loan losses. Acquired loans that met the criteria for nonaccrual of interest prior to the acquisition are considered performing upon acquisition, regardless of whether the customer is contractually delinquent, if Salisbury can reasonably estimate the timing and amount of the expected cash flows on such loans and if Salisbury expects to fully collect the new carrying value of the loans. As such, Salisbury may no longer consider the loan to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable yield. In first quarter 2019 Salisbury transferred the remaining unearned credit-related discount on loans acquired in its 2014 acquisition of Riverside Bank to the allowance for loan loss reserves. As a result of this transfer, gross loans receivable and the allowance for loan losses increased by $663 thousand. The balance of net loans receivable did not change as a result of this transfer. Allowance for Loan Losses The allowance for loan losses represents management's estimate of the probable credit losses inherent in the loan portfolio as of the reporting date. The allowance is increased by provisions charged to earnings and by recoveries of amounts previously charged off, and is reduced by loan charge-offs. Loan charge-offs are recognized when management determines a loan or portion of a loan to be uncollectible. The determination of the adequacy of the allowance is based on management's ongoing review of numerous factors, including the growth and composition of the loan portfolio, historical loss experience over an economic cycle, probable credit losses based upon internal and external portfolio reviews, credit risk concentrations, changes in lending policy, current economic conditions, analysis of current levels and asset quality, delinquency levels and trends, estimates of the current value of underlying collateral, the performance of individual loans in relation to contract terms, and other pertinent factors. While management believes that the allowance for loan losses is adequate, the allowance is an estimate, and ultimate losses may vary from management's estimate. Future additions to the allowance may also be necessary based on changes in assumptions and economic conditions. In addition, various regulatory agencies periodically review the allowance for loan losses. Such agencies may require additions to the allowance based on their judgments about information available to them at the time of their examination. Changes in the estimate are recorded in the results of operations in the period in which they become known, along with provisions for estimated losses incurred during that period. The allowance for loan losses is computed by segregating the portfolio into three components: (1) loans collectively evaluated for impairment: general loss allocation factors for non-impaired loans based on loan product, collateral type and abundance, loan risk rating, historical loss experience, delinquency factors and other similar economic indicators, (2) loans individually evaluated for impairment: individual loss allocations for loans deemed to be impaired based on discounted cash flows or collateral value, and (3) unallocated: general loss allocations for other environmental factors. Loans collectively evaluated for impairment This component of the allowance for loan losses is stratified by the following loan segments: residential real estate secured (residential 1-4 family and 5+ multifamily, construction of residential 1-4 family, and home equity lines of credit), commercial real estate secured (commercial and construction of commercial), secured by land (farm and vacant land), commercial and industrial, municipal and consumer. Management's general loss allocation factors are based on a rolling five-year annual historical loss rate for each loan segment adjusted for qualitative factors and specific risk ratings. Qualitative factors include levels/trends in delinquencies; trends in volume and terms of loans; effects of changes in risk selection and underwriting standards and other changes in lending policies, procedures and practices; experience/ability/depth of lending management and staff; and national and local economic trends and conditions. There were no changes in Salisbury's policies or methodology pertaining to the general component of the allowance for loan losses during 2019. The qualitative factors are determined based on the various risk characteristics of each loan segment. Risk characteristics relevant to each portfolio segment are as follows: Residential real estate - Salisbury generally does not originate loans with a loan-to-value ratio greater than 80 percent and generally does not grant subprime loans. Loans in this segment are collateralized primarily by owner-occupied residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment. Commercial real estate - Loans in this segment are primarily owner-occupied businesses or income-producing investment properties throughout Salisbury's market area. The underlying cash flows generated by the properties are adversely impacted by a downturn in the economy as evidenced by decreased sales or increased vacancy rates which, in turn, will have an effect on the credit quality in this segment. For commercial loans management annually obtains business and personal financial statements, tax returns, and, where applicable, rent rolls, and continually monitors the repayment of these loans. Construction loans - Loans in this segment are primarily residential construction loans which typically roll into a permanent residential mortgage loan when construction is completed, or commercial construction which consist primarily of owner-occupied commercial construction projects. Commercial and industrial loans - Loans in this segment are made to businesses and are generally secured by assets of the business, including equipment and/or inventory. Repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased retail or wholesale spending, has an effect on the credit quality in this segment. Farm – Loans in this segment are made to independent agricultural businesses and may be affected by adverse weather conditions or weak commodity prices. Vacant land – Loans in this segment are primarily dependent on the credit quality of the individual borrowers. Loan-to-value ratios for loans with vacant land for collateral are more conservative than for commercial or residential real estate loans. Municipal loans – Loans in this segment are extensions of credit to municipal and other governmental entities throughout Salisbury's market area. The bank-qualified, tax-exempt loans are backed by the full faith and credit of the borrowing entity with taxing or appropriating authority, as appropriate. Maturities range from one year for bond anticipation notes to twenty years for long-term project finance. The ability of the borrower to pay may be affected by an economic downturn resulting in a severe reduction in tax or other revenues coupled with the depletion of an entity's reserve liquidity. Historical default rates for bank-qualified (small issuer) general obligation municipal credit facilities are 0% since the asset class was created in 1986. Consumer loans - Loans in this segment are generally unsecured and repayment is dependent on the credit quality of the individual borrower. Loans individually evaluated for impairment This component relates to loans that are classified as impaired. Impairment is measured on a loan by loan basis for all portfolio loans (except consumer loans and homogeneous residential real estate loans) by either the present value of expected future cash flows discounted at the loan's effective interest rate, the fair value of the collateral if the loan is collateral dependent or third-party market loan pricing. An allowance is established when the discounted cash flows (or collateral value) of the impaired loan are lower than the carrying value of that loan. A loan is considered impaired when, based on current information and events, it is probable that Salisbury will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record, and the amount of the shortfall in relation to the principal and interest owed. In seeking to protect the best interests of the Bank, Salisbury may agree to modify the contractual terms of loans. When a loan is modified and a concession is made to a borrower experiencing financial difficulty, the modification is considered a troubled debt restructuring ("TDR"). All TDRs are classified as impaired. Unallocated An unallocated component is maintained to cover uncertainties that could affect management's estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating allocated and general reserves in the portfolio. Mortgage Servicing Rights As part of our growth and risk management strategy, Salisbury from time to sells whole loans. typically residential loans. Salisbury's ability to sell whole loans benefits the Bank by freeing up capital and funding to lend to new customers. Additionally, we typically earn a gain on the sale of loans sold and receive a servicing fee while maintaining the customer relationship. Mortgage (“MSRs”), which the bank evaluates with the assistance of a third party on a quarterly basis, are included on the consolidated balance and are accounted for under the amortization method. that method mortgage servicing rights are amortized in proportion to, and over the period of, estimated net servicing revenues. Refinance activities are considered in estimating the period of net servicing revenues. Other Real Estate Owned (“OREO”) OREO consists of properties acquired through foreclosure or a deed in lieu of foreclosure. These properties are initially transferred at fair value less estimated costs to sell. Any write-down from cost to estimated fair value required at the time of foreclosure is charged to the allowance for loan losses. A valuation allowance is maintained for declines in market value and for estimated selling expenses. Increases to the valuation allowance, expenses associated with ownership of these properties, and gains and losses from their sale are included in OREO expense. As of December 31, 2019, and 2018, the recorded investment in residential mortgage loans collateralized by residential real estate that were in the process of foreclosure was $0.1 million and $0.5 million, respectively. Income Taxes Deferred income taxes are provided for differences arising in the timing of income and expenses for financial reporting and for income tax purposes using the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Salisbury provides deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is assured beyond a reasonable doubt. A valuation allowance is established against deferred tax assets when, based upon all available evidence, it is determined that it is more likely than not that some or all of the deferred tax assets will not be realized. Bank Premises and Equipment Bank premises, furniture and equipment are carried at cost, less accumulated depreciation and amortization computed on the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized on the straight-line basis over the shorter of the estimated useful lives of the improvements or the term of the related leases. Guidelines for expected useful life are as follows: • Buildings/Improvements – 39 years • Land Improvements – 15 years • Furniture and Fixtures – 7 years • Computer Equipment – 5 years • Software – 3 years Intangible Assets Intangible assets consist of core deposit intangibles and goodwill. Intangible assets equal the excess of the purchase price over the fair value of the tangible net assets acquired in business combinations accounted for using the acquisition method of accounting. Salisbury's intangible assets at December 31, 2019, and 2018, include goodwill of $2.4 million arising from the purchase of a branch office in 2001, $7.2 million arising from the 2004 acquisition of Canaan National Bancorp, Inc., $319 thousand arising from the 2007 purchase of a branch office in New York State, $2.7 million arising from the acquisition of Riverside Bank in December 2014 and $1.3 million from the purchase of an additional branch office in New York in 2017. See Note 9. On an annual basis, management assesses intangible assets for impairment and, for the year ending December 31, 2019, concluded there was no impairment. If a permanent loss in value is indicated, an impairment charge to income will be recognized. Bank-Owned Life Insurance Bank-owned life insurance policies are reflected on the consolidated balance sheet at cash surrender value. Changes in the net cash surrender value of the policies, as well as insurance proceeds received, are reflected in non-interest income on the consolidated statements of operations and are generally not subject to income taxes. The Bank reviews the financial strength of the insurance carriers prior to the purchase of life insurance policies and no less than annually thereafter. A life insurance policy with any individual carrier is limited to 15% of tier one capital and the total cash surrender value of the life insurance policies is limited to 25% of tier one capital. Stock Based Compensation Stock based compensation expense is recognized, based on the fair value at the date of grant on a straight-line basis over the period of time between the grant date and vesting date. Advertising Expense Advertising costs of $480 thousand and $608 thousand in 2019 and 2018, respectively, are expensed as incurred and not capitalized. Statements of Cash Flows For the purpose of the Consolidated Statements of Cash Flows, cash and cash equivalents include cash and due from banks and interest-bearing demand deposits with other financial institutions. Computation of Earnings per Share The Company defines unvested share-based payment awards that contain non-forfeitable rights to dividends as participating securities that are included in computing earnings per share (“EPS”) using the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each share of common stock and participating securities according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends. Basic EPS excludes dilution and is computed by dividing income allocated to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Revenue Recognition A significant portion of Salisbury's revenue, including interest income from loans and investments, falls outside the scope of ASC 606. Revenue from Salisbury's Trust and Wealth Advisory business, service charges and fees and interchange fees, however, are within the scope of ASC 606. Revenue for these in-scope services is recognized when, or as, obligations under the terms of a contract are satisfied, which occurs when the services are transferred to customers. Revenue is measured as the amount of consideration Salisbury expects to receive in exchange for providing the services to a customer (“transaction price”). To the extent the transaction price includes variable consideration, Salisbury estimates the amount of variable consideration that should be included in the transaction price utilizing the most likely amount to which Salisbury expects to be entitled. Variable consideration is included in the transaction price if, in Salisbury's judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of Salisbury's anticipated performance and all information (historical, current, and forecasted) that is reasonably available. Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue. Contracts with customers may contain multiple performance obligations. For such arrangements, the transaction price is allocated to each performance obligation based on the estimated relative standalone selling prices of the promised services underlying each performance obligation. Salisbury determines standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through fee schedules provided to its customers or through past transactions, Salisbury estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. Contracts are often modified to account for changes in contract specifications and requirements. Contract modifications exist when the modification either creates new or changes the existing enforceable rights and obligations. Generally, contract modifications are for products or services that are distinct from the existing contract and are accounted for as if they were a new and separate contract. The original contract is still accounted for according to its original terms. Trust and Wealth Advisory The Trust and Wealth Advisory business generates revenue through a range of fiduciary services including trust and estate administration, wealth advisory, and investment management to individuals, families, businesses and institutions. Revenue from these services is generally recognized over time and are typically based on the market value of assets under administration and established fee schedules. Certain fees, such as real estate sale fees, asset liquidation fees, special asset fees, and daily money management fees, are recorded as revenue at a point in time at the completion of the service. Service Charges and Fees Salisbury offers a variety of deposit accounts with a range of interest rates and other terms, which are designed to meet customer financial needs. Monthly deposit account fees and account research fees are recognized over time using the right to invoice measure of progress. Overdraft protection, ATM services, cash management, bill pay, money transfers, among others, are generally recognized at point in time at the completion of the service. Interchange Fees Salisbury earns interchange fee revenue through customers' use of the Bank's debit cards. Interchange fees are generally r |
MERGERS AND ACQUISITIONS
MERGERS AND ACQUISITIONS | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
MERGERS AND ACQUISITIONS | NOTE 2 – MERGERS AND ACQUISITIONS On December 5, 2014, the Company acquired Riverside Bank. Riverside Bank operated four banking offices serving Dutchess, Ulster and Orange Counties in New York, and was merged with and into the Bank. In first quarter 2019, Salisbury transferred the remaining unearned credit-related discount on loans acquired in its 2014 acquisition of Riverside Bank to the allowance for loan losses. The following table summarizes activity in the accretable yield for the acquired loan portfolio that falls under the purview of ASC 310-30. (In thousands) 2019 2018 Balance at beginning of period $ 204 $ 517 Acquisitions — — Accretion (204 ) (164 ) Disposals — (149 ) Reclassification from non-accretable to accretable — — Balance at end of period $ — $ 204 In first quarter 2019 Salisbury transferred the remaining unearned credit-related discount on loans acquired in its 2014 acquisition of Riverside Bank to the allowance for loan losses. At December 31, 2018, Salisbury ASC 310-30 loans had an outstanding balance totaling $2.1 million and a carrying value of $1.9 million. |
SECURITIES
SECURITIES | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
SECURITIES | NOTE 3 - SECURITIES The composition of securities is as follows: (in thousands) Amortized Gross un- realized gains Gross un- realized losses Fair value December 31, 2019 Available-for-sale U.S. Government Agency notes $ 4,520 $ 125 $ 1 $ 4,644 Municipal bonds 26,562 704 73 27,193 Mortgage-backed securities: U.S. Government agencies and U.S. Government- sponsored enterprises 28,961 420 24 29,357 Collateralized mortgage obligations: U.S. Government agencies 25,041 468 10 25,499 Corporate bonds 5,000 108 — 5,108 Total securities available-for-sale $ 90,084 $ 1,825 $ 108 $ 91,801 CRA mutual fund $ 882 Non-marketable securities Federal Home Loan Bank of Boston stock $ 3,242 $ — $ — $ 3,242 (in thousands) Amortized Gross un- realized gains Gross un- realized losses Fair value December 31, 2018 Available-for-sale U.S. Government Agency notes $ 7,590 $ 83 $ 3 $ 7,670 Municipal bonds 5,334 45 — 5,379 Mortgage-backed securities: U.S. Government agencies and U.S. Government sponsored enterprises 57,837 170 561 57,446 Collateralized mortgage obligations: U.S. Government agencies 17,835 85 173 17,747 Corporate bonds 3,500 76 — 3,576 Total securities available-for-sale $ 92,096 $ 459 $ 737 $ 91,818 CRA mutual fund $ 836 Non-marketable securities Federal Home Loan Bank of Boston stock $ 4,496 $ — $ — $ 4,496 Sales of securities available-for-sale and gross gains and gross losses realized are as follows: Years ended December 31, (in thousands) 2019 2018 2017 Proceeds $ 41,814 $ 10,036 $ 199 Gains realized 371 361 192 Losses realized (108 ) (43 ) (14 ) Net gains realized 263 318 178 Income tax provision 55 67 61 The following table summarizes the aggregate fair value and gross unrealized loss of securities that have been in a continuous unrealized loss position as of the dates presented: Less than 12 Months 12 Months or Longer Total December 31, 2019 (in thousands) Fair Unrealized losses Fair Unrealized losses Fair Unrealized losses Available-for-sale U.S. Government Agency notes $ — $ — $ 195 $ 1 $ 195 $ 1 Municipal bonds 6,273 73 — — 6,273 73 Mortgage- backed securities: U.S. Government agencies and U.S. Government - sponsored enterprises 5,781 22 704 2 6,485 24 Collateralized mortgage obligations: U.S. Government Agencies 1,438 10 — — 1,438 10 Total temporarily impaired securities $ 13,492 $ 105 $ 899 $ 3 $ 14,391 $ 108 Less than 12 Months 12 Months or Longer Total December 31, 2018 (in thousands) Fair Unrealized losses Fair Unrealized losses Fair Unrealized losses Available-for-sale U.S. Government Agency notes $ 34 $ — $ 532 $ 3 $ 566 $ 3 Mortgage-backed securities: U.S. Government agencies and U.S. Government –sponsored enterprises 13,063 175 26,777 386 39,840 561 Collateralized mortgage obligations: U.S. Government Agencies — — 8,281 173 8,281 173 Total temporarily impaired securities $ 13,097 $ 175 $ 35,590 $ 562 $ 48,687 $ 737 The table below presents the amortized cost, fair value and tax equivalent yield of securities, by maturity. Debt securities issued by U.S. Government agencies (SBA securities), MBS, and CMOS are disclosed separately in the table below as these securities may prepay prior to the scheduled contractual maturity dates. December 31, 2019 (in thousands) Maturity Amortized cost Fair value Yield (1) U.S. Government Agency notes After 5 year but within 10 years $ 2,497 $ 2,551 3.48 % Total 2,497 2,551 3.48 Municipal bonds Within 1 year 60 60 2.63 After 5 year but within 10 years 1,734 1,833 3.16 After 10 years 24,768 25,300 3.48 Total 26,562 27,193 3.46 Corporate bonds After 5 years but within 10 years 5,000 5,108 5.21 Mortgage-backed securities, CMO securities and SBA securities 56,025 56,949 2.85 Securities available-for-sale $ 90,084 $ 91,801 3.17 % (1) Yield is based on amortized cost. Salisbury evaluates debt securities for OTTI where the fair value of a security is less than its amortized cost basis at the balance sheet date. As part of this process, Salisbury considers whether it has the intent to sell each debt security and whether it is more likely than not that it will be required to sell the security before its anticipated recovery. If either of these conditions is met, Salisbury recognizes an OTTI charge to earnings equal to the entire difference between the security's amortized cost basis and its fair value at the balance sheet date. For securities that meet neither of these conditions, an analysis is performed to determine if any of these securities are at risk for OTTI. The following summarizes, by security type, the basis for evaluating if the applicable debt securities were OTTI at December 31, 2019. U.S. Government Agency notes: The contractual cash flows are guaranteed by the U.S. government. Four securities had unrealized losses at December 31, 2019, which approximated 0.75% of their amortized cost. Changes in fair values are a function of changes in investment spreads and interest rate movements and not changes in credit quality since time of purchase. Management expects to recover the entire amortized cost basis of these securities. Furthermore, Salisbury evaluates these securities for strategic fit and may reduce its position in these securities, although it is not more likely than not that Salisbury will be required to sell these securities before recovery of their cost basis, which may be maturity, and does not intend to sell these securities. Management evaluated the impairment status of these debt securities, and concluded that the gross unrealized losses were temporary in nature. Therefore, management does not consider these investments to be other-than temporarily impaired at December 31, 2019. Municipal bonds: Salisbury performed a detailed analysis of the municipal bond portfolio. Six securities had unrealized losses at December 31, 2019, which approximated 1.15% of their amortized cost. Management believes the unrealized loss position is attributable to interest rate and spread movements and not changes in credit quality. Management expects to recover the entire amortized cost basis of these securities. Furthermore, Salisbury evaluates these securities for strategic fit and may reduce its position in these securities, although it is not more likely than not that Salisbury will be required to sell these securities before recovery of their cost basis, which may be maturity, and does not intend to sell these securities. Management evaluated the impairment status of these debt securities, and concluded that the gross unrealized losses were temporary in nature. Therefore, management does not consider these investments to be other-than temporarily impaired at December 31, 2019. U.S. Government agency and U.S. Government-sponsored mortgage-backed securities and collateralized mortgage obligations: The contractual cash flows are guaranteed by U.S. government agencies and U.S. government-sponsored enterprises. Nine securities had unrealized losses at December 31, 2019, which approximated 0.42% of their amortized cost. Changes in fair values are a function of changes in investment spreads and interest rate movements and not changes in credit quality. Management expects to recover the entire amortized cost basis of these securities. Furthermore, Salisbury evaluates these securities for strategic fit and may reduce its position in these securities, although it is not more likely than not that Salisbury will be required to sell these securities before recovery of their cost basis, which may be maturity, and does not intend to sell these securities. Therefore, management does not consider these investments to be other-than-temporarily impaired at December 31, 2019. The Federal Home Loan Bank of Boston (FHLBB) is a cooperative that provides services, including funding in the form of advances, to its member banking institutions. As a requirement of membership, the Bank must own a minimum amount of FHLBB stock, calculated periodically based primarily on its level of borrowings from the FHLBB. No market exists for shares of the FHLBB and therefore, they are carried at par value. FHLBB stock may be redeemed at par value five years following termination of FHLBB membership, subject to limitations which may be imposed by the FHLBB or its regulator, the Federal Housing Finance Board, to maintain capital adequacy of the FHLBB. While the Bank currently has no intentions to terminate its FHLBB membership, the ability to redeem its investment in FHLBB stock would be subject to the conditions imposed by the FHLBB. Based on the capital adequacy and the liquidity position of the FHLBB, management believes there is no impairment related to the carrying amount of the Bank's FHLBB stock as of December 31, 2019. Deterioration of the FHLBB's capital levels may require the Bank to deem its restricted investment in FHLBB stock to be OTTI. If evidence of impairment exists in the future, the FHLBB stock would reflect fair value using either observable or unobservable inputs. The Bank will continue to monitor its investment in FHLBB stock. See Note 7 to the Consolidated Financial Statements for further information. |
LOANS
LOANS | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
LOANS | NOTE 4 - LOANS The composition of loans receivable and loans held-for-sale is as follows: December 31, 2019 2018 (in thousands) Total Loans Total Loans Residential 1-4 family $ 346,299 $ 345,862 Residential 5+ multifamily 35,455 36,510 Construction of residential 1-4 family 11,889 12,041 Home equity lines of credit 33,798 34,433 Residential real estate 427,441 428,846 Commercial 289,795 283,599 Construction of commercial 8,466 8,976 Commercial real estate 298,261 292,575 Farm land 3,641 4,185 Vacant land 7,893 8,322 Real estate secured 737,236 733,928 Commercial and industrial 169,411 162,905 Municipal 21,914 14,344 Consumer 6,385 4,512 Loans receivable, gross 934,946 915,689 Deferred loan origination fees and costs, net 1,362 1,421 Allowance for loan losses (8,895 ) (7,831 ) Loans receivable, net $ 927,413 $ 909,279 Loans held-for-sale Residential 1-4 family $ 332 $ — Salisbury has entered into loan participation agreements with other banks and transferred a portion of its originated loans to the participating banks. Transferred amounts are accounted for as sales and excluded from Salisbury's loans receivable. Salisbury and its participating lenders share ratably in any gains or losses that may result from a borrower's lack of compliance with contractual terms of the loan. Salisbury services the loans on behalf of the participating lenders and, as such, collects cash payments from the borrowers, remits payments (net of servicing fees) to participating lenders and disburses required escrow funds to relevant parties. Salisbury also has entered into loan participation agreements with other banks and purchased a portion of the other banks' originated loans. Purchased amounts are accounted for as loans without recourse to the originating bank. Salisbury and its originating lenders share ratably in any gains or losses that may result from a borrower's lack of compliance with contractual terms of the loan. The originating banks service the loans on behalf of the participating lenders and, as such, collect cash payments from the borrowers, remit payments (net of servicing fees) to participating lenders and disburse required escrow funds to relevant parties. At December 31, 2019 and 2018, Salisbury serviced commercial loans for other banks under loan participation agreements totaling $67.0 million and $66.4 million, respectively. Concentrations of Credit Risk Salisbury's loans consist primarily of residential and commercial real estate loans located principally in Litchfield County, Connecticut; Dutchess, Orange and Ulster Counties, New York; and Berkshire County, Massachusetts, which constitute Salisbury's service area. Salisbury offers a broad range of loan and credit facilities to borrowers in its service area, including residential mortgage loans, commercial real estate loans, construction loans, working capital loans, equipment loans, and a variety of consumer loans, including home equity lines of credit, installment loans and collateral loans. All residential and commercial mortgage loans are collateralized by first or second mortgages on real estate. The ability of single family residential and consumer borrowers to honor their repayment commitments is generally dependent on the level of overall economic activity within the market area and real estate values. The ability of commercial borrowers to honor their repayment commitments is dependent on the general economy as well as the health of the real estate economic sector in Salisbury's market area. Salisbury's commercial real estate exposure as a percentage of the Bank's total risk-based capital, which represents Tier 1 plus Tier 2 capital, was approximately 169% as of December 31, 2019 and 170% at December 31, 2018 compared to the regulatory monitoring guideline of 300%. Credit Quality Salisbury uses credit risk ratings as part of its determination of the allowance for loan losses. Credit risk ratings categorize loans by common financial and structural characteristics that measure the credit strength of a borrower. The rating model has eight risk rating grades, with each grade corresponding to a progressively greater risk of default. Grades 1 through 4 are pass ratings and 5 through 8 are criticized as defined by the regulatory agencies. Risk ratings are assigned to differentiate risk within the portfolio and are reviewed on an ongoing basis and revised, if needed, to reflect changes in the borrowers' current financial position and outlook, risk profiles and the related collateral and structural positions. Loans rated as "special mention" (5) possess credit deficiencies or potential weaknesses deserving management's close attention that if left uncorrected may result in deterioration of the repayment prospects for the loans at some future date. Loans rated as "substandard" (6) are loans where the Bank's position is clearly not protected adequately by borrower current net worth or payment capacity. These loans have well defined weaknesses based on objective evidence and include loans where future losses to the Bank may result if deficiencies are not corrected, and loans where the primary source of repayment such as income is diminished and the Bank must rely on sale of collateral or other secondary sources of collection. Loans rated "doubtful" (7) have the same weaknesses as substandard loans with the added characteristic that the weakness makes collection or liquidation in full, given current facts, conditions, and values, to be highly improbable. The possibility of loss is high, but due to certain important and reasonably specific pending factors, which may work to strengthen the loan, its reclassification as an estimated loss is deferred until its exact status can be determined. Loans classified as "loss" (8) are considered uncollectible and of such little value that continuance as Bank assets is unwarranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather, it is not practical or desirable to defer writing off this loan even though partial recovery may be made in the future. Management actively reviews and tests its credit risk ratings against actual experience and engages an independent third-party to annually validate its assignment of credit risk ratings. In addition, the Bank's loan portfolio is examined periodically by its regulatory agencies, the FDIC and the CTDOB. The composition of loans receivable by risk rating grade is as follows: (in thousands) Pass Special mention Substandard Doubtful Loss Total December 31, 2019 Residential 1-4 family $ 337,302 $ 4,278 $ 4,719 $ — $ — $ 346,299 Residential 5+ multifamily 33,619 99 1,737 — — 35,455 Construction of residential 1-4 family 11,889 — — — — 11,889 Home equity lines of credit 33,381 312 105 — — 33,798 Residential real estate 416,191 4,689 6,561 — — 427,441 Commercial 271,708 10,964 7,052 71 — 289,795 Construction of commercial 8,225 — 241 — — 8,466 Commercial real estate 279,933 10,964 7,293 71 — 298,261 Farm land 1,934 — 1,707 — — 3,641 Vacant land 7,834 59 — — — 7,893 Real estate secured 705,892 15,712 15,561 71 — 737,236 Commercial and industrial 167,458 443 1,510 — — 169,411 Municipal 21,914 — — — — 21,914 Consumer 6,344 3 38 — — 6,385 Loans receivable, gross $ 901,608 $ 16,158 $ 17,109 $ 71 $ — $ 934,946 (in thousands) Pass Special mention Substandard Doubtful Loss Total December 31, 2018 Residential 1-4 family $ 337,520 $ 4,281 $ 4,061 $ — $ — $ 345,862 Residential 5+ multifamily 34,726 784 1,000 — — 36,510 Construction of residential 1-4 family 12,041 — — — — 12,041 Home equity lines of credit 33,728 265 440 — — 34,433 Residential real estate 418,015 5,330 5,501 — — 428,846 Commercial 270,461 4,530 8,608 — — 283,599 Construction of commercial 8,482 — 494 — — 8,976 Commercial real estate 278,943 4,530 9,102 — — 292,575 Farm land 3,969 — 216 — — 4,185 Vacant land 8,253 69 — — — 8,322 Real estate secured 709,180 9,929 14,819 — — 733,928 Commercial and industrial 159,127 2,672 1,106 — — 162,905 Municipal 14,344 — — — — 14,344 Consumer 4,502 10 — — — 4,512 Loans receivable, gross $ 887,153 $ 12,611 $ 15,925 $ — $ — $ 915,689 The composition of loans receivable by delinquency status is as follows: Past due (In thousands) Current 30-59 days 60-89 days 90-179 days 180 days and over 30 days and over Accruing 90 days and over Non- accrual December 31, 2019 Residential 1-4 family $ 344,085 $ 971 $ 351 $ 200 $ 692 $ 2,214 $ — $ 1,551 Residential 5+ multifamily 34,594 — — — 861 861 — 861 Construction of residential 1-4 family 11,889 — — — — — — — Home equity lines of credit 33,522 152 46 — 78 276 — 105 Residential real estate 424,090 1,123 397 200 1,631 3,351 — 2,517 Commercial 289,103 336 141 71 144 692 — 914 Construction of commercial 8,466 — — — — — — — Commercial real estate 297,569 336 141 71 144 692 — 914 Farm land 3,461 180 — — — 180 — 186 Vacant land 7,852 — 41 — — 41 — — Real estate secured 732,972 1,639 579 271 1,775 4,264 — 3,617 Commercial and industrial 169,262 2 146 1 — 149 1 — Municipal 21,914 — — — — — — — Consumer 6,382 — 1 2 — 3 2 — Loans receivable, gross $ 930,530 $ 1,641 $ 726 $ 274 $ 1,775 $ 4,416 $ 3 $ 3,617 Past due (In thousands) Current 30-59 days 60-89 days 90-179 days 180 days and over 30 days and over Accruing 90 days and over Non- accrual December 31, 2018 Residential 1-4 family $ 342,881 $ 1,100 $ 521 $ — $ 1,360 $ 2,981 $ — $ 2,092 Residential 5+ multifamily 35,648 — — 633 229 862 — 1,000 Construction of residential 1-4 family 12,041 — — — — — — — Home equity lines of credit 33,806 235 33 — 359 627 — 411 Residential real estate 424,376 1,335 554 633 1,948 4,470 — 3,503 Commercial 281,053 264 240 833 1,209 2,546 654 1,388 Construction of commercial 8,835 — — 141 — 141 141 252 Commercial real estate 289,888 264 240 974 1,209 2,687 795 1,640 Farm land 4,185 — — — — — — 216 Vacant land 8,280 42 — — — 42 — — Real estate secured 726,729 1,641 794 1,607 3,157 7,199 795 5,359 Commercial and industrial 162,507 — 38 — 360 398 — 360 Municipal 14,344 — — — — — — — Consumer 4,504 2 6 — — 8 — — Loans receivable, gross $ 908,084 $ 1,643 $ 838 $ 1,607 $ 3,517 $ 7,605 $ 795 $ 5,719 Troubled Debt Restructurings (TDRs) Troubled debt restructurings occurring during the years ended December 31, 2019 and 2018: Business Activities Loans December 31, 2019 December 31, 2018 (in thousands) Quantity Pre-modification balance Post-modification balance Quantity Pre-modification balance Post-modification balance Residential real estate 3 $ 1,416 $ 1,416 1 $ 68 $ 68 Commercial real estate 4 977 1,191 1 566 566 Consumer 1 — 36 — — — Troubled debt restructurings 8 $ 2,393 $ 2,643 2 $ 634 $ 634 Interest only payments to sell property 1 $ 791 $ 791 — $ — $ — Rate reduction — — — 2 634 634 Modification and Rate reduction 2 625 625 — — — Extension of new funds to pay outstanding taxes 3 259 442 — — — Modification and term extension 2 718 785 — — — Troubled debt restructurings 8 $ 2,393 $ 2,643 2 $ 634 $ 634 For the twelve months ended December 2019, there were eight troubled debt restructurings. Salisbury currently does not have any commitments to lend additional funds to TDR loans. The following table discloses the recorded investment and number of modifications for TDRs within the last year where a concession has been made, that then defaulted in the current reporting period. All TDR loans are included in the Impaired Loan schedule and are individually evaluated. Modifications that Subsequently Defaulted For the twelve months ending December 31, 2019 For the twelve months ending December 31, 2018 Quantity Balance Quantity Balance Troubled Debt Restructurings Residential 1-4 family — $ — 1 $ 67 Commercial real estate 1 274 — — Total 1 $ 274 1 $ 67 Impaired loans Loans individually evaluated for impairment (impaired loans) are loans for which Salisbury does not expect to collect all principal and interest in accordance with the contractual terms of the loan. Impaired loans include all modified loans classified as TDRs and loans on non-accrual status. The components of impaired loans are as follows: December 31, (in thousands) 2019 2018 Non-accrual loans, excluding troubled debt restructured loans $ 2,604 $ 4,430 Non-accrual troubled debt restructured loans 1,013 1,289 Accruing troubled debt restructured loans 7,778 6,801 Total impaired loans $ 11,395 $ 12,520 Commitments to lend additional amounts to impaired borrowers $ — $ — Allowance for Loan Losses In first quarter 2019 Salisbury transferred the remaining unearned credit-related discount on loans acquired in its 2014 acquisition of Riverside Bank to the allowance for loan losses. As a result of this transfer, which is reflected in the table below as the “acquisition discount transfer”, gross loans receivable and the allowance for loan losses increased by $663 thousand. The balance of net loans receivable did not change as a result of this transfer. December 31, 2019 December 31, 2018 (in thousands) Beginning Acquisition Discount Provi- Charge- Reco- Ending Beginning Provi- Charge- Reco- Ending balance Transfer sion offs veries balance balance sions offs veries balance Residential 1-4 family $ 2,149 $ 10 $ 367 $ (136 ) $ 3 $ 2,393 $ 1,862 $ 580 $ (299 ) $ 6 $ 2,149 Residential 5+ multifamily 413 — 33 — — 446 155 258 — — 413 Construction of residential 1-4 family 83 — (8 ) — — 75 75 8 — — 83 Home equity lines of credit 219 1 258 (281 ) — 197 236 (18 ) — 1 219 Residential real estate 2,864 11 650 (417 ) 3 3,111 2,328 828 (299 ) 7 2,864 Commercial 3,048 488 248 (44 ) 2 3,742 2,547 756 (259 ) 4 3,048 Construction of commercial 122 — (18 ) — — 104 80 42 — — 122 Commercial real estate 3,170 488 230 (44 ) 2 3,846 2,627 798 (259 ) 4 3,170 Farm land 33 — 14 — — 47 32 (6 ) — 7 33 Vacant land 100 — (29 ) — — 71 132 (32 ) — — 100 Real estate secured 6,167 499 865 (461 ) 5 7,075 5,119 1,588 (558 ) 18 6,167 Commercial and industrial 1,158 164 (78 ) (145 ) 46 1,145 984 255 (108 ) 27 1,158 Municipal 12 — 34 — — 46 30 (18 ) — — 12 Consumer 56 — 3 (36 ) 37 60 80 28 (81 ) 29 56 Unallocated 438 — 131 — — 569 563 (125 ) — — 438 Totals $ 7,831 $ 663 $ 955 $ (642 ) $ 88 $ 8,895 $ 6,776 $ 1,728 $ (747 ) $ 74 $ 7,831 December 31, 2017 (in thousands) Beginning balance Provision Charge-offs Reco-veries Ending balance Residential 1-4 family $ 1,926 $ 100 $ (197 ) $ 33 $ 1,862 Residential 5+ multifamily 62 93 — — 155 Construction of residential 1-4 family 91 (16 ) — — 75 Home equity lines of credit 348 (115 ) (4 ) 7 236 Residential real estate 2,427 62 (201 ) 40 2,328 Commercial 1,920 836 (453 ) 244 2,547 Construction of commercial 38 42 — — 80 Commercial real estate 1,958 878 (453 ) 244 2,627 Farm land 28 45 (43 ) 2 32 Vacant land 170 (2 ) (36 ) — 132 Real estate secured 4,583 983 (733 ) 286 5,119 Commercial and industrial 1,079 (229 ) (162 ) 296 984 Municipal 53 (23 ) — — 30 Consumer 75 63 (76 ) 18 80 Unallocated 337 226 — — 563 Totals $ 6,127 $ 1,020 $ (971 ) $ 600 $ 6,776 The composition of loans receivable and the allowance for loan losses is as follows: (in thousands) Collectively evaluated 1 Individually evaluated Total portfolio Loans Allowance Loans Allowance Loans Allowance December 31, 2019 Residential 1-4 family $ 340,847 $ 2,117 $ 5,452 $ 276 $ 346,299 $ 2,393 Residential 5+ multifamily 34,478 446 977 — 35,455 446 Construction of residential 1-4 family 11,889 75 — — 11,889 75 Home equity lines of credit 33,693 197 105 — 33,798 197 Residential real estate 420,907 2,835 6,534 276 427,441 3,111 Commercial 285,462 3,333 4,333 409 289,795 3,742 Construction of commercial 8,466 104 — — 8,466 104 Commercial real estate 293,928 3,437 4,333 409 298,261 3,846 Farm land 3,455 47 186 — 3,641 47 Vacant land 7,713 66 180 5 7,893 71 Real estate secured 726,003 6,385 11,233 690 737,236 7,075 Commercial and industrial 169,285 1,143 126 2 169,411 1,145 Municipal 21,914 46 — — 21,914 46 Consumer 6,349 59 36 1 6,385 60 Unallocated allowance — 569 — — — 569 Totals $ 923,551 $ 8,202 $ 11,395 $ 693 $ 934,946 $ 8,895 (in thousands) Collectively evaluated 1 Individually evaluated Total portfolio Loans Allowance Loans Allowance Loans Allowance December 31, 2018 Residential 1-4 family $ 340,946 $ 2,042 $ 4,916 $ 107 $ 345,862 $ 2,149 Residential 5+ multifamily 34,835 413 1,675 — 36,510 413 Construction of residential 1-4 family 12,041 83 — — 12,041 83 Home equity lines of credit 33,975 213 458 6 34,433 219 Residential real estate 421,797 2,751 7,049 113 428,846 2,864 Commercial 279,389 2,907 4,210 141 283,599 3,048 Construction of commercial 8,622 106 354 16 8,976 122 Commercial real estate 288,011 3,013 4,564 157 292,575 3,170 Farm land 3,969 33 216 — 4,185 33 Vacant land 8,132 98 190 2 8,322 100 Real estate secured 721,909 5,895 12,019 272 733,928 6,167 Commercial and industrial 162,404 1,158 501 — 162,905 1,158 Municipal 14,344 12 — — 14,344 12 Consumer 4,512 56 — — 4,512 56 Unallocated allowance — 438 — — — 438 Totals $ 903,169 $ 7,559 $ 12,520 $ 272 $ 915,689 $ 7,831 1 The credit quality segments of loans receivable and the allowance for loan losses are as follows: December 31, 2019 (in thousands) Collectively evaluated Individually evaluated Total portfolio Loans Allowance Loans Allowance Loans Allowance Performing loans $ 913,648 $ 7,251 $ — $ — $ 913,648 $ 7,251 Potential problem loans 1 9,903 382 — — 9,903 382 Impaired loans — — 11,395 693 11,395 693 Unallocated allowance — 569 — — — 569 Totals $ 923,551 $ 8,202 $ 11,395 $ 693 $ 934,946 $ 8,895 December 31, 2018 (in thousands) Collectively evaluated Individually evaluated Total portfolio Loans Allowance Loans Allowance Loans Allowance Performing loans $ 895,527 $ 6,989 $ — $ — $ 895,527 $ 6,989 Potential problem loans 1 7,642 132 — — 7,642 132 Impaired loans — — 12,520 272 12,520 272 Unallocated allowance — 438 — — — 438 Totals $ 903,169 $ 7,559 $ 12,520 $ 272 $ 915,689 $ 7,831 1 A specific valuation allowance is established for the impairment amount of each impaired loan, calculated using the present value of expected cash flows or collateral, in accordance with the most likely means of recovery. Certain data with respect to loans individually evaluated for impairment is as follows: Impaired loans with specific allowance Impaired loans with no specific allowance (In thousands) Loan balance Specific Income Loan balance Income Book Note Average allowance recognized Book Note Average recognized December 31, 2019 Residential $ 4,111 $ 4,190 $ 3,725 $ 276 $ 162 $ 2,318 $ 3,081 $ 2,940 $ 52 Home equity lines of credit — — 52 — — 105 450 391 — Residential real estate 4,111 4,190 3,777 276 162 2,423 3,531 3,331 52 Commercial 3,309 3,335 2,574 409 90 1,024 1,733 1,747 54 Construction of commercial — — 77 — — — — 39 — Farm land — — — — — 186 329 203 — Vacant land 41 41 42 5 3 139 157 143 10 Real estate secured 7,461 7,566 6,470 690 255 3,772 5,750 5,463 116 Commercial and industrial 93 97 16 2 4 33 188 265 4 Consumer 36 36 21 1 — — — 3 — Totals $ 7,590 $ 7,699 $ 6,507 $ 693 $ 259 $ 3,805 $ 5,938 $ 5,731 $ 120 Impaired loans with specific allowance Impaired loans with no specific allowance (In thousands) Loan balance Specific Income Loan balance Income Book Note Average allowance recognized Book Note Average recognized December 31, 2018 Residential $ 2,792 $ 2,842 $ 3,429 $ 107 $ 101 $ 3,799 $ 5,140 $ 3,726 $ 102 Home equity lines of credit 47 47 158 6 2 411 498 114 2 Residential real estate 2,839 2,889 3,587 113 103 4,210 5,638 3,840 104 Commercial 1,808 1,808 2,001 141 88 2,403 3,989 2,992 75 Construction of commercial 252 252 67 16 — 102 110 295 7 Farm land — — — — — 216 432 232 — Vacant land 42 42 43 2 3 147 168 151 10 Real estate secured 4,941 4,991 5,698 272 194 7,078 10,337 7,510 196 Commercial and industrial — — 40 — — 501 596 469 5 Totals $ 4,941 $ 4,991 $ 5,738 $ 272 $ 194 $ 7,579 $ 10,933 $ 7,979 $ 201 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2019 | |
Notes to Financial Statements | |
LEASES | NOTE 5 – LEASES On January 1, 2019, the Bank adopted ASU 2016-02, “Leases (Topic 842)” and all subsequent ASUs that modified Topic 842. The Bank leases facilities and equipment with various expiration dates through 2036. The facilities leases have varying renewal options, generally require fixed annual rent, and provide that real estate taxes, insurance, and maintenance are to be paid by Salisbury. The leases for two Bank facilities were accounted for as finance leases (previously referred to as capital leases) at December 31, 2019. The remaining leases were classified as operating leases, and therefore, were previously not recognized on the Bank's Consolidated Balance Sheet. Effective January 1, 2019, the Bank recorded approximately $1.6 million of right-of-use assets and corresponding lease liability related to these operating leases. The Bank does not have any leases with related parties and equipment leases are not material to Salisbury's consolidated financial statements. The following table provides the assets and liabilities as well as the costs of operating and finance leases that are included in the Bank's consolidated balance sheet as of December 31, 2019 and consolidated income statements for the twelve months and three months ended December 31, 2019. ($ in thousands) Classification December 31, 2019 Assets Operating Other assets $ 1,360 Finance Bank premises and equipment 1 1,503 Total Leased Assets $ 2,863 Liabilities Operating Accrued interest and other liabilities $ 1,360 Finance Finance lease obligations 1,718 Total lease liabilities $ 3,078 1 Lease cost ($ in thousands) Classification Twelve months ended December 31, 2019 Operating leases Premises and equipment $ 255 Finance leases: Amortization of leased assets Premises and equipment 200 Interest on finance leases Interest expense 173 Total lease cost $ 628 Weighted Average Remaining Lease Term Operating leases 8.2 years Financing leases 15.1 years Weighted Average Discount Rate 1 Operating leases 3.70 % Financing leases 8.41 % 1 The following is a schedule by years of the present value of the net minimum lease payments as of December 31, 2019. Future minimum lease payments (in thousands) Operating Leases Finance Leases 2020 $ 246 $ 186 2021 228 192 2022 199 195 2023 134 198 2024 129 200 Thereafter 653 1,980 Total future minimum lease payments 1,589 2,951 Less amount representing interest (229 ) (1,233 ) Total present value of net future minimum lease payments $ 1,360 $ 1,718 |
MORTGAGE SERVICING RIGHTS
MORTGAGE SERVICING RIGHTS | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract] | |
MORTGAGE SERVICING RIGHTS | NOTE 6 - MORTGAGE SERVICING RIGHTS Loans serviced for others are not included in the consolidated balance sheets. Balances of loans serviced for others and the fair value of mortgage servicing rights are as follows: December 31, (in thousands) 2019 2018 Residential mortgage loans serviced for others $ 106,255 $ 111,378 Fair value of mortgage servicing rights 813 951 Changes in mortgage servicing rights are as follows: Years ended December 31, (in thousands) 2019 2018 2017 Mortgage Servicing Rights Balance, beginning of period $ 228 $ 233 $ 339 Originated 61 43 63 Amortization (1) (51 ) (48 ) (169 ) Balance, end of period 238 228 233 Valuation Allowance Balance, beginning of period — — (23 ) Decrease (increase) in impairment reserve (1) — — 23 Balance, end of period — — — Mortgage servicing rights, net $ 238 $ 228 $ 233 (1) Amortization expense and changes in the impairment reserve are recorded in mortgage servicing, net. |
PLEDGED ASSETS
PLEDGED ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
Guarantees [Abstract] | |
PLEDGED ASSETS | NOTE 7 - PLEDGED ASSETS The following securities and loans were pledged to secure public and trust deposits, securities sold under agreements to repurchase, FHLBB advances and credit facilities available. December 31, (in thousands) 2019 2018 Securities available-for-sale (at fair value) $ 52,845 $ 80,991 Loans receivable (at book value) 434,329 328,674 Total pledged assets $ 487,174 $ 409,665 At December 31, 2019, securities were pledged as follows: $43.55 million to secure public deposits, $9.25 million to secure repurchase agreements and $0.05 million to secure FHLBB advances. During 2019, additional loans receivable were pledged to secure incremental borrowing capacity from the FHLBB. |
BANK PREMISES AND EQUIPMENT
BANK PREMISES AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
BANK PREMISES AND EQUIPMENT | NOTE 8 - BANK PREMISES AND EQUIPMENT The components of premises and equipment are as follows: December 31, (in thousands) 2019 2018 Land $ 2,762 $ 2,593 Buildings and improvements 14,878 13,458 Leasehold improvements 1,553 1,553 Finance leases 1,798 3,273 Furniture, fixtures, equipment and software 9,370 8,978 Fixed assets in process 768 790 Total cost 31,129 30,645 Accumulated depreciation and amortization (13,744 ) (12,470 ) Bank premises and equipment, net $ 17,385 $ 18,175 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 9 - GOODWILL AND INTANGIBLE ASSETS Changes in the carrying values of goodwill and intangible assets were as follows: Years ended December 31, (in thousands) 2019 2018 2017 Goodwill (1) Balance, beginning of period $ 13,815 $ 13,815 $ 12,552 Additions — — 1,263 Impairment — — — Balance, end of period $ 13,815 $ 13,815 $ 13,815 Core Deposit Intangibles Cost, beginning of period $ 5,881 $ 5,881 $ 5,248 Additions — — 633 Cost, end of period 5,881 5,881 5,881 Amortization, beginning of period (4,498 ) (4,044 ) (3,511 ) Amortization (388 ) (454 ) (533 ) Amortization, end of period (4,886 ) (4,498 ) (4,044 ) Core deposit intangibles, net $ 995 $ 1,383 $ 1,837 (1) Not subject to amortization. In June 2017, Salisbury acquired the New Paltz, New York branch of Empire State Bank, and assumed approximately $31.4 million in deposits and acquired approximately $7.1 million in loans. Salisbury realized goodwill in the amount of $1.26 million and a core deposit intangible of $633 thousand as a result of this acquisition. Salisbury did not recognize any goodwill or a core deposit intangible as a result of its acquisition of the Fishkill, New York branch from Orange Bank and Trust Company in April 2018. Salisbury performed an evaluation of its goodwill and intangible assets as of December 31, 2019. There was no impairment recognized during 2019, 2018, or 2017. The core deposit intangibles were recorded as identifiable intangible assets and are being amortized over ten years using the sum-of-the-years' digits method. Estimated annual amortization expense of core deposit intangibles is as follows: December 31, (in thousands) CDI amortization 2020 $ 321 2021 255 2022 192 2023 128 2024 61 2025 25 2026 13 Total $ 995 |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2019 | |
Banking and Thrift, Interest [Abstract] | |
DEPOSITS | NOTE 10 - DEPOSITS Scheduled maturities of time certificates of deposit are as follows: December 31, (in thousands) CD maturities 2020 $ 86,025 2021 19,342 2022 9,749 2023 4,937 2024 7,671 Total $ 127,724 The total amount and scheduled maturities of time certificates of deposit in denominations of $250 thousand or more were as follows: Years ended December 31, (in thousands) 2019 2018 Within three months $ 4,603 $ 1,128 After three through six months 3,799 1,359 After six through twelve months 6,628 3,785 Over one year 6,750 9,726 Total $ 21,780 $ 15,998 Included in certificates of deposit at December 31, 2019 and 2018 are brokered and reciprocal deposits of approximately $8.0 million and $44.4 million, respectively. Included in money market funds at December 31, 2019 and 2018 are approximately $66.0 million and $41.1 million, respectively of brokered money market accounts. |
SECURITIES SOLD UNDER AGREEMENT
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE | 12 Months Ended |
Dec. 31, 2019 | |
Banking and Thrift, Interest [Abstract] | |
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE | NOTE 11 – SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE Salisbury enters into overnight and short-term repurchase agreements with its customers. Securities sold under repurchase agreements are as follows: December 31, (dollars in thousands) 2019 2018 Repurchase agreements, ending balance $ 8,530 $ 4,104 Repurchase agreements, average balance during period 4,913 3,340 Book value of collateral 9,031 11,194 Market value of collateral 9,246 11,276 Weighted average rate during period 0.48 % 0.35 % Weighted average maturity 1 day 1 day |
FEDERAL HOME LOAN BANK OF BOSTO
FEDERAL HOME LOAN BANK OF BOSTON ADVANCES AND OTHER BORROWED FUNDS | 12 Months Ended |
Dec. 31, 2019 | |
Banking and Thrift, Interest [Abstract] | |
FEDERAL HOME LOAN BANK OF BOSTON ADVANCES AND OTHER BORROWED FUNDS | NOTE 12 – FEDERAL HOME LOAN BANK OF BOSTON ADVANCES AND OTHER BORROWED FUNDS Federal Home Loan Bank of Boston (“FHLBB”) advances are as follows: December 31, 2019 December 31, 2018 Years ended December 31, (dollars in thousands) Total (1) Rate (2) Total (1) Rate (2) Overnight $ — — % $ 9,500 2.72 % 2019 — — 36,767 3.19 2020 44,899 2.14 14,899 2.18 2021 5,988 2.45 5,988 2.45 Total $ 50,887 2.18 % $ 67,154 2.94 % (1) Net of modification costs (2) Weighted average rate based on scheduled maturity dates. In addition to outstanding FHLBB advances, Salisbury has additional available borrowing capacity, based on current capital stock levels, of $233.7 million including access to an unused FHLBB line of credit of $3.5 million at December 31, 2019. Advances from the FHLBB are secured by a blanket lien on qualified collateral, consisting primarily of loans with first mortgages secured by one-to-four family properties, certain unencumbered investment securities and other qualified assets. Subordinated Debentures: In December 2015, Salisbury completed the issuance of $10.0 million in aggregate principal amount of 6.00% Fixed-to-Floating Rate Subordinated Notes Due 2025 (the “Notes”) in a private placement transaction to various accredited investors including $500 thousand to certain of Salisbury's related parties. The Notes have a maturity date of December 15, 2025 and bear interest at an annual rate of 6.00% from and including the original issue date of the Notes to, but excluding, December 15, 2020 or the earlier redemption date payable semi-annually in arrears on June 15 and December 15 of each year. Thereafter, from and including December 15, 2020 to, but excluding, December 15, 2025, the annual interest rate will be reset quarterly and equal to the three-month LIBOR, plus 430 basis points, as described in the Notes, payable quarterly, in arrears, on March 15, June 15, September 15 and December 15 of each year during the time that the Notes remain outstanding through December 15, 2025 or earlier redemption date. The notes are redeemable, without penalty, on or after December 15, 2020 and, in certain limited circumstances, prior to that date. As more completely described in the Notes, the indebtedness evidenced by the Notes, including principal and interest, is unsecured and subordinate and junior in right of Salisbury's payments to general and secured creditors and depositors of the Bank. The Notes also contain provisions with respect to redemption features and other matters pertaining to the Notes. The Notes have been structured to qualify as Tier 2 capital for regulatory capital purposes, subject to applicable limitations. Subordinated debentures totaled $9.9 million at December 31, 2019 and compared to $9.8 million at December 31, 2018, which includes $141 thousand and $165 thousand, respectively of remaining unamortized debt issuance costs. The debt issuance costs are being amortized to maturity. The effective interest rate of the subordinated debentures is 6.33% compared to 6.34% at December 31, 2018. LIBOR is due to be phased out as a market reference rate by the end of 2021. In December 2014, a group of market participants, known as the Alternative Reference Rates Committee (AARC) was initially convened by the Board of Governors of the Federal Reserve System and the New York Fed in cooperation with the U.S. Department of the Treasury, the U.S. Commodity Futures Trading Commission, and the U.S. Office of Financial Research to identify an alternative reference rate for use primarily in derivatives contracts. The AARC recommended the Secured Overnight Financing Rate (SOFR) as an alternative to LIBOR and the Federal Reserve began publishing the SOFR in April 2018. Salisbury will continue to monitor the transition from LIBOR to a new reference rate and its impact on Salisbury's subordinated debt, which will reprice on December 15, 2020. Notes Payable: In October 2015, Salisbury entered into a private mortgage for $380 thousand to purchase the Sharon branch property. The mortgage, which has an interest rate of 6%, will mature in September 2030. The outstanding mortgage balance at December 31, 2019 and December 31, 2018 was $246 thousand and $280 thousand, respectively. |
NET DEFERRED TAX ASSET AND INCO
NET DEFERRED TAX ASSET AND INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
NET DEFERRED TAX ASSET AND INCOME TAXES | NOTE 13 – NET DEFERRED TAX ASSET AND INCOME TAXES Salisbury provides deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not. The components of the income tax provision were as follows: Years ended December 31, (in thousands) 2019 2018 2017 Federal $ 2,406 $ 1,986 $ 1,831 State 344 217 195 Current provision 2,750 2,203 2,026 Federal (317 ) (455 ) 840 State (74 ) (39 ) 48 Deferred (benefit) expense (391 ) (494 ) 888 Income tax provision $ 2,359 $ 1,709 $ 2,914 The following is a reconciliation of the expected federal statutory tax to the income tax provision: Years ended December 31, 2019 2018 2017 Income tax at statutory federal tax rate 21.00 % 21.00 % 34.00 % State tax, net of federal tax benefit 1.58 1.37 1.74 Tax exempt income and dividends received deduction (3.82 ) (3.84 ) (7.00 ) Remeasurement of net deferred tax assets — — 4.85 BOLI interest and gain (0.61 ) (1.35 ) (1.34 ) Other (0.67 ) (0.95 ) (0.47 ) Change in valuation allowance — — — Effective income tax rates 17.48 % 16.23 % 31.78 % The components of Salisbury's net deferred tax assets are as follows: December 31, (in thousands) 2019 2018 Allowance for loan losses $ 2,174 $ 1,916 Interest on non-performing loans 244 233 Accrued deferred compensation 493 334 Post-retirement benefits 11 11 Other real estate owned write-downs 30 — Restricted stock awards 220 162 Net unrealized holding loss on available for sale securities — 58 Write-down of securities 2 4 Other 139 282 Gross deferred tax assets 3,313 3,000 Deferred loan costs, net (329 ) (344 ) Mark-to-market purchase accounting adjustments (44 ) (37 ) Goodwill and core deposit intangible asset (570 ) (545 ) Accelerated depreciation (703 ) (698 ) Other real estate owned write-downs — (45 ) Mortgage servicing rights (58 ) (55 ) Net unrealized holding gains on available-for-sale securities (360 ) — Gross deferred tax liabilities (2,064 ) (1,724 ) Net deferred tax asset $ 1,249 $ 1,276 Salisbury will only recognize a deferred tax asset when, based upon available evidence, realization is more likely than not. Salisbury remeasured its net deferred tax asset as of December 31, 2017 due to the enactment of the Tax Cuts and Job Act during the fourth quarter of 2017. This remeasurement resulted in a $445 thousand increase in the tax provision for 2017 and a related reduction in the net deferred tax asset. In accordance with Connecticut legislation, in 2004, Salisbury formed a PIC, SBT Mortgage Service Corporation. Salisbury does not expect to pay Connecticut state income tax in the foreseeable future unless there is a change in Connecticut law. Salisbury's policy is to provide for uncertain tax positions and the related interest and penalties (recorded as a component of income tax expense, if any) based upon management's assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. As of December 31, 2019 and 2018, there were no material uncertain tax positions related to federal and state tax matters. Salisbury is currently open to audit under the statute of limitations by the Internal Revenue Service and state taxing authorities for the years ended December 31, 2016 through December 31, 2019. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 14 – SHAREHOLDERS' EQUITY Capital Requirements The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional and discretionary actions by the regulators that, if undertaken, could have a direct material effect on the Bank's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. The requirements of the final rules approved by the Federal Reserve Bank (“FRB”) and FDIC, include a common equity Tier 1 capital risk-weighted assets minimum ratio of 4.5%, minimum ratio of Tier 1 capital to risk-weighted assets of 6.0%, require a minimum ratio of Total capital to risk-weighted assets of 8.0%, and require a minimum Tier 1 leverage ratio of 4.0%. A capital conservation buffer, comprised of common equity Tier 1 capital, is also established above the regulatory minimum capital requirements. The initial implementation of the capital conservation buffer began phasing in January 1, 2016 at 0.625% of risk-weighted assets and increased each subsequent January 1, by an additional 0.625% until reaching its final level of 2.5% on January 1, 2019. As of December 31, 2019, the Bank exceeded the fully phased in regulatory requirement for the capital conservation buffer. Strict eligibility criteria for regulatory capital instruments were also implemented under the final rules. A bank can be considered “well-capitalized” even if it does not maintain the capital conservation buffer as long as it meets the “well-capitalized” levels set forth below (and provided it is not subject to any written order, agreement, capital directive, etc.). A bank with a capital conservation buffer of at least 2.5% means that it generally will not be subject to certain limitations regarding capital distributions, such as dividend payments, discretionary payments on tier 1 instruments, share buybacks, and certain discretionary bonus payments to executive officers. The Bank's risk-weighted assets at December 31, 2019 and December 31, 2018 were $891.0 million and $860.6 million, respectively. Actual regulatory capital position and minimum capital requirements as defined "To Be Well Capitalized Under Prompt Corrective Action Provisions" and "For Capital Adequacy Purposes" for the Bank are as follows: Actual Minimum Capital Required For Capital Adequacy Minimum Capital Required For Capital Adequacy Plus Required Capital Conservation Buffer Minimum To Be Well Capitalized Under (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio December 30, 2019 Total Capital (to risk-weighted assets) $ 114,421 12.84 % $ 71,278 8.0 % $ 93,553 10.5 % $ 89,098 10.0 % Tier 1 Capital (to risk-weighted assets) 105,430 11.83 53,459 6.0 75,733 8.5 71,278 8.0 Common Equity Tier 1 Capital (to risk-weighted assets) 105,430 11.83 40,094 4.5 62,368 7.0 57,914 6.5 Tier 1 Capital (to average assets) $ 105,430 9.60 43,944 4.0 43,944 4.0 54,930 5.0 December 31, 2018 Total Capital (to risk-weighted assets) $ 104,013 12.09 % $ 68,848 8.0 % $ 90,362 10.5 % $ 86,059 10.0 % Tier 1 Capital (to risk-weighted assets) 96,092 11.17 51,636 6.0 73,150 8.5 68,848 8.0 Common Equity Tier 1 Capital (to risk-weighted assets) 96,092 11.17 38,727 4.5 60,242 7.0 55,939 6.5 Tier 1 Capital (to average assets) $ 96,092 8.83 $ 43,527 4.0 $ 43,527 4.0 $ 54,409 5.0 Restrictions on Cash Dividends to Common Shareholders Salisbury's ability to pay cash dividends is substantially dependent on the Bank's ability to pay cash dividends to Salisbury. There are certain restrictions on the payment of cash dividends and other payments by the Bank to Salisbury. Under Connecticut law, the Bank cannot declare a cash dividend except from net profits, defined as the remainder of all earnings from current operations. The total of all cash dividends declared by the Bank in any calendar year shall not, unless specifically approved by the Banking Commissioner, exceed the total of its net profits of that year combined with its retained net profits of the preceding two years. FRB Supervisory Letter SR 09-4, February 24, 2009, revised March 30, 2009, notes that, as a general matter, the Board of Directors of a Bank Holding Company (“BHC”) should inform the Federal Reserve and should eliminate, defer, or significantly reduce dividends if (1) net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends; (2) the prospective rate of earnings retention is not consistent with capital needs and overall current and prospective financial condition; or (3) the BHC will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios. Moreover, a BHC should inform the Federal Reserve reasonably in advance of declaring or paying a dividend that exceeds earnings for the period (e.g., quarter) for which the dividend is being paid or that could result in a material adverse change to the BHC capital structure. |
OTHER BENEFITS
OTHER BENEFITS | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
OTHER BENEFITS | NOTE 15 –OTHER BENEFITS 401(k) Plan Salisbury offers a 401(k) Plan to eligible employees. Under the 401(k) Plan, eligible participants may contribute a percentage of their pay subject to IRS limitations. Salisbury may make discretionary contributions to the Plan. The Plan Employee Stock Ownership Plan (ESOP) Salisbury offers an ESOP to eligible employees. Under the Plan, Salisbury may make discretionary contributions to the Plan. Discretionary contributions vest in full upon six years and reflect the following schedule of qualified service: 20% after the second year, 20% per year thereafter, vesting at 100% after six full years of service. Other Retirement Plans Salisbury adopted ASC 715-60, “Compensation - Retirement Benefits - Defined Benefit Plans - Other Postretirement" and recognized a liability for Salisbury's future postretirement benefit obligations under endorsement split-dollar life insurance arrangements. The total liability for the arrangements included in other liabilities was $765 thousand and $992 thousand at December 31, 2019, and 2018, respectively. During 2019, the related agreements were modified, which resulted in a benefit adjustment of $328 thousand with an offsetting expense of $101 thousand totaling a net credit to expense of $227 thousand. Expense under this arrangement was $26 thousand for 2018, and $117 thousand for 2017. The Bank entered into a Supplemental Retirement Plan Agreement with its former Chief Executive Officer that provides for supplemental post retirement payments for a ten-year period as described in the agreement. The related liability was $0 and $25 thousand at December 31, 2019, and 2018, respectively. The related expenses were immaterial for all periods presented. The Bank assumed a Supplemental Retirement Plan Agreement with a former Chief Executive Officer of Riverside Bank that provides for supplemental post retirement payments for a fifteen-year period as described in the agreement. The related liability was $358 thousand and $403 thousand at December 31, 2019 and December 31, 2018, respectively. The related expenses were immaterial for all periods presented. A Non-Qualified Deferred Compensation Plan (the "Plan") was adopted effective January 1, 2013. This Plan was adopted by the Bank for the benefit of certain key employees ("Executive" or "Executives") who have been selected and approved by the Bank to participate in this Plan and who have evidenced their participation by execution of a Non-Qualified Deferred Compensation Plan Participation Agreement ("Participation Agreement") in a form provided by the Bank. This Plan is intended to comply with Internal Revenue Code ("Code") Section 409A and any regulatory or other guidance issued under such Section. In 2019, 2018, and 2017, the Bank awarded seven (7), six (6), and eight (8) Executives, respectively, with discretionary contributions to the plan. Expenses related to this plan amounted to $114 thousand in 2019, $115 thousand in 2018, and $80 thousand in 2017. Management Agreements: Salisbury or the Bank has entered into various management agreements with its named executive officers, including a severance agreement with Mr. Cantele, President and Chief Executive Officer, a change in control agreement with Mr. Albero, Executive Vice President and Chief Financial Officer, and a severance agreement with Mr. Davies, President of the New York Region and Chief Lending Officer. Such agreements are designed to allow Salisbury to retain the services of the designated executives while reducing, to the extent possible, unnecessary disruptions to Salisbury's operations. |
LONG TERM INCENTIVE PLANS
LONG TERM INCENTIVE PLANS | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
LONG TERM INCENTIVE PLANS | NOTE 16 - LONG TERM INCENTIVE PLANS The Board of Directors adopted the 2011 Long Term Incentive Plan (the “Plan”) on March 25, 2011, and the shareholders approved the Plan at the 2011 Annual Meeting. The Plan was amended on January 18, 2013, January 29, 2016 and again on April 28, 2017. The purpose of the Plan is to assist Salisbury and the Bank in attracting, motivating, retaining and rewarding employees, officers and directors by enabling such persons to acquire or increase a proprietary interest in Salisbury in order to strengthen the mutuality of interests between such persons and our shareholders, and providing such persons with stock-based long-term performance incentives to expend their maximum efforts in the creation of shareholder value. The terms of the Plan provide for grants of Directors Stock Retainer Awards, Stock Options, Stock Appreciation Rights (“SARs”), Restricted Stock, Restricted Stock Units, Performance Awards, Deferred Stock, Dividend Equivalents, and Stock or Other Stock-Based Awards that may be settled in shares of common stock, cash, or other property (collectively, “Awards”). Under the Plan, the total number of shares of Common Stock reserved and available for issuance in the ten years following adoption of the Plan in connection with Awards under the Plan is 84,000 shares of Common Stock, which represented less than 5% of Salisbury's outstanding shares of Common Stock at the time the Plan was adopted. Shares of Common Stock with respect to Awards previously granted under the Plan that are cancelled, terminate without being exercised, expire, are forfeited or lapse will again be available for issuance as Awards. Also, shares of Common Stock subject to Awards settled in cash and shares of Common Stock that are surrendered in payment of any Award or any tax withholding requirements will again be available for issuance as Awards. No more than 30,000 shares of Common Stock may be issued pursuant to Awards in any one calendar year. In addition, the Plan limits the total number of shares of Common Stock that may be awarded as Incentive Stock Options (“ISOs”) to 42,000 and the total number of shares of Common Stock that may be issued as Directors Stock Retainer Awards to 15,000. The Directors stock retainer awards were increased from 120 shares per year to 240 shares per year effective January 25, 2013. Effective January 29, 2016, the Directors stock retainer award was increased from 240 shares to 340 shares annually. The Board of Directors adopted the 2017 Long Term Incentive Plan (the “2017 LTIP”) on February 24, 2017, which was approved by shareholders at the 2017 Annual Meeting on May 17, 2017. Pursuant to the 2017 LTIP, as of May 2017, following shareholder approval of the 2017 LTIP, no further awards will be made under the 2011 LTIP, which shall remain in existence solely for purposes of administering outstanding grants. Under the 2017 LTIP, the total number of shares of Common Stock reserved and available for issuance in the next ten years in connection with awards under the 2017 LTIP is 200,000 shares of Common Stock, which represents approximately 7% of Salisbury's 2,770,036 outstanding shares of Common Stock as of March 20, 2017. Of the maximum shares available under the 2017 LTIP, 200,000 shares may be issued upon the exercise of stock options (all of which may be granted as incentive stock options) and 150,000 shares may be issued as restricted stock or restricted stock units (including deferred stock units), provided that, to the extent that a share is issued as a restricted stock award or a restricted stock unit, the share would no longer be available for award as a stock option, unless the restricted stock award or restricted unit is forfeited or otherwise returned to the 2017 LTIP. Restricted stock In 2019, 2018 and 2017 Salisbury granted a total of 15,130, 13,210, and 13,824 shares of restricted stock pursuant to its 2011 and 2017 LTIP to certain employees and Directors. The fair value of the stock at grant date was determined to be $601 thousand, $585 thousand, and $547 thousand, respectively. The stock will be vested three years from the grant date. The following table presents the amount of cumulatively granted restricted stock awards under the 2011 and 2017 Long-Term Incentive Plans: Weighted Average Weighted Average Year Ended December 31, 2019 Grant Price 2018 Grant Price Beginning of Year 39,434 $ 37.73 27,024 $ 34.62 Granted 15,130 39.70 13,210 44.30 Vested (14,228 ) 30.33 — — Forfeited (710 ) 42.81 (800 ) 40.99 End of Year 39,626 $ 41.04 39,434 $ 37.73 The fair value of the restricted shares that vested during 2019, 2018 and 2017 were $556 thousand, $0, and $222 thousand, respectively. Compensation expense for restricted stock awards in 2019, 2018, and 2017 was $486 thousand, $447 thousand, and $265 thousand, respectively. Unrecognized compensation cost relating to the restricted stock awards was $795 thousand, $711 thousand, and $606 thousand as of December 31, 2019, 2018 and 2017, respectively. The remaining weighted average vesting period on restricted shares as of December 31, 2019, over which unrecognized compensation cost is expected to be recognized, is 1.5 years. In 2017, Salisbury, recorded a $105 thousand benefit to the tax provision for the adoption of ASU 2016-09. The tax benefit associated with restricted stock awards, which was recognized in earnings for 2019, 2018 and 2017, was approximately $103 thousand, $87 thousand and $88 thousand, respectively. Additionally, in 2019, 2018 and 2017 the Compensation Committee granted a total of 0, 53,500 and 56,600, Phantom Stock Appreciation Units (“PSUs” pursuant to the 2013 Phantom Stock Appreciation Unit and Long-Term Incentive Plan (the “Plan”) to certain employees, including the Named Executive Officers. The units will vest on the third anniversary of the grant date. Salisbury's compensation expense related to the PSUs was $414 thousand, $171 thousand, and $135 thousand for 2019, 2018, and 2017 respectively. Performance-based restricted stock units On March 29, 2019, the Compensation Committee granted 6,800 performance-based restricted stock units (RSU) pursuant to the 2017 Long-Term Incentive Plan to further align compensation with the Bank's performance. This RSU plan replaced the Bank's Phantom Stock Appreciation Units plan (Phantom). Salisbury will continue to record an expense for the Phantom plan until the final tranche of awards is paid out in January 2021. The performance goal under the RSU plan is based on the increase in the Bank's tangible book value by $3.50 per share over the performance period for threshold performance. Vesting will range from 75% of target for achieving threshold performance, to 100% of target for achieving target payout performance ($5.00 increase in tangible book value per share) to 150% of target for achieving in excess of target payout performance and, if the performance goals are achieved, vesting will occur no later than March 29, 2022. The fair value of the RSUs at the grant date was $280 thousand. Compensation expense of $70 thousand was recorded with respect to these RSUs in 2019. No performance-based restricted stock units were awarded prior to 2019. Short Term Incentive Plan (STIP) Salisbury offers a short-term discretionary compensation plan to eligible employees on an annual basis. Under this incentive plan, Salisbury may reward employees with cash compensation if certain pre-determined Bank and individual performance goals have been achieved. The STIP expense, which is included in compensation expenses, totaled $888 thousand, $758 thousand, and $532 thousand, in 2019, 2018, and 2017, respectively. |
STOCK OPTIONS
STOCK OPTIONS | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
STOCK OPTIONS | NOTE 17 – STOCK OPTIONS Salisbury issued stock options in conjunction with its acquisition of Riverside Bank in 2014. The table below reflects the remaining outstanding options related to this transaction and presents a summary of the status of Salisbury's outstanding stock options as of and for the year ended December 31, 2019: Number of options Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value Beginning of period 22,545 $ 17.04 Granted — — Exercised (4,725 ) 17.04 Forfeited or expired — — End of period 17,820 $ 17.04 4.00 $ 510,187 Number of options Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value Beginning of period 40,500 $ 21.73 Granted — — Exercised (9,155 ) 24.26 Forfeited or expired (8,800 ) 31.11 End of period 22,545 $ 17.04 5.00 $ 456,000 All options are vested and exercisable at December 31, 2019. The total intrinsic value is the amount by which the fair value of the underlying stock exceeds the exercise price of an option on the exercise date. The total intrinsic value of stock options exercised during the years ended December 31, 2019, 2018 and 2017 was $125 thousand, $160 thousand, and $156 thousand, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 18 - RELATED PARTY TRANSACTIONS In the normal course of business the Bank has granted loans to executive officers, directors, principal shareholders and associates of the foregoing persons considered to be related parties. Changes in loans to executive officers, directors and their related associates are as follows (there are no loans to principal shareholders): Years ended December 31, (in thousands) 2019 2018 Balance, beginning of period $ 9,432 $ 7,651 Advances 8,010 4,374 Repayments (6,787 ) (2,593 ) Balance, end of period $ 10,655 $ 9,432 |
OTHER COMPREHENSIVE INCOME (LOS
OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Dec. 31, 2019 | |
Other Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
OTHER COMPREHENSIVE LOSS | NOTE 19 – OTHER COMPREHENSIVE INCOME (LOSS) The following table presents a reconciliation of the changes in the components of other comprehensive income (loss) for the dates indicated, including the amount of income tax benefit allocated to each component of other comprehensive loss: Years ended December 31, (in thousands) 2019 2018 2017 Other comprehensive income (loss) Net unrealized gains (losses) on securities available-for-sale $ 2,258 $ (202 ) $ (318 ) Reclassification of net realized gains in net income (1) (263 ) (318 ) (178 ) Unrealized gains (losses) on securities available-for-sale 1,995 (520 ) (496 ) Income tax (expense) benefit (418 ) 105 198 Unrealized gains (losses) on securities available-for-sale, net of tax 1,577 (415 ) (298 ) Other comprehensive income (loss) $ 1,577 $ (415 ) $ (298 ) (1) The components of accumulated other comprehensive income (loss) are as follows: December 31, (dollars in thousands) 2019 2018 Unrealized gains (losses) on securities available-for-sale, net of tax $ 1,357 $ (220 ) Accumulated other comprehensive income (loss) $ 1,357 $ (220 |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 20 - COMMITMENTS AND CONTINGENT LIABILITIES Commitments The Bank's agreement with the core accounting processing service provider will continue until the eighth anniversary of the commencement date, which was November 10, 2016. If the Bank cancels the agreement prior to the end of the contract term, a lump sum termination fee will have to be paid. The fee shall consist of the total amount that would have been paid or reimbursed to the service provider during the remainder of the term of the agreement. Employment and Change in Control Agreements Salisbury has entered into severance agreements with certain senior executives, including with two (2) named executive officers, Richard J. Cantele, Jr., and John M. Davies which provide payouts ranging from 1.0 to 3.0 times base salary, annual cash bonus and other benefits. Salisbury has also entered into change in control agreements with certain senior executives, including named executive officer Peter Albero, all of which provide a severance payment ranging from 0.5 to 2.0 times base salary, annual cash bonus and other benefits in the event employment is terminated in conjunction with a defined change in control. Contingent Liabilities The Bank is involved in various claims and legal proceedings, which are not material, arising in the ordinary course of business. There are no material pending legal proceedings, other than ordinary routine litigation incidental to the registrant's business, to which Salisbury is a party or to which any of its property is subject. On October 4, 2019, Salisbury entered into a contract with Arris Contracting Company, Inc. to construct an operations center on its Lakeville, CT. campus in 2020. The estimated construction cost is $5.0 million and Salisbury may terminate the contract at its convenience and without cause. In the event of such termination, Salisbury will be required to pay for work executed and costs incurred by reason of such termination. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2019 | |
Investments, All Other Investments [Abstract] | |
FINANCIAL INSTRUMENTS | NOTE 21 - FINANCIAL INSTRUMENTS The Bank, in the normal course of business and to meet the financing needs of its customers, is a party to financial instruments with off-balance sheet risk. These financial instruments include commitments to originate loans, letters of credit, and unadvanced funds on loans. The instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheets. The contract amounts of those instruments reflect the extent of involvement the Bank has in particular classes of financial instruments. The Bank's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for loan commitments and standby letters of credit is represented by the contractual amounts of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Commitments to originate loans are agreements to lend to a customer provided there are no violations of any conditions established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management's credit evaluation of the borrower. Collateral held varies, but may include secured interests in mortgages, accounts receivable, inventory, property, plant and equipment and income producing properties. Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance by a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. As of December 31, 2019 and 2018, the maximum potential amount of the Bank's obligation was $4.7 million and $3.9 million, respectively, for financial, commercial and standby letters of credit. If a letter of credit is drawn upon, the Bank may seek recourse through the customer's underlying line of credit. If the customer's line of credit is also in default, the Bank may take possession of the collateral, if any, securing the line of credit. Financial instrument liabilities with off-balance sheet credit risk are as follows: December 31, (dollars in thousands) 2019 2018 Residential $ 5,815 $ 6,751 Home equity lines of credit 28,160 29,872 Commercial 14,858 19,051 Land 1,014 14 Real estate secured 49,847 55,688 Commercial and industrial 78,286 77,219 Municipal 2,499 250 Consumer 2,148 1,583 Unadvanced portions of loans 132,780 134,740 Commitments to originate loans 33,781 18,397 Letters of credit 4,657 3,865 Total $ 171,218 $ 157,002 The allowance for off balance sheet commitments is calculated by applying a reserve percentage discounted by a utilization factor to the sum of unguaranteed unused lines of credit and loan contracts that the Bank has committed to but not funded as of year-end. The allowance for off-balance sheet commitments was $96 thousand and $90 thousand as of December 31, 2019 and December 31, 2018, respectively. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF ASSETS AND LIABILITIES | NOTE 22 - FAIR VALUE MEASUREMENTS Salisbury uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Securities available-for-sale and the CRA mutual fund are recorded at fair value on a recurring basis. Additionally, from time to time, other assets are recorded at fair value on a nonrecurring basis, such as loans held for sale, collateral dependent impaired loans, property acquired through foreclosure or repossession and mortgage servicing rights. These nonrecurring fair value adjustments typically involve the application of lower-of-cost-or-market accounting or write-downs of individual assets. Salisbury adopted ASC 820-10, “Fair Value Measurement - Overall,” which provides a framework for measuring fair value under generally accepted accounting principles. This guidance permitted Salisbury the irrevocable option to elect fair value for the initial and subsequent measurement for certain financial assets and liabilities on a contract-by-contract basis. Salisbury did not elect fair value treatment for any financial assets or liabilities upon adoption. In accordance with ASC 820-10, Salisbury groups its financial assets and financial liabilities measured at fair value in three levels based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. GAAP specifies a hierarchy of valuation techniques based on whether the types of valuation information (“inputs”) are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect Salisbury's market assumptions. These two types of inputs have created the following fair value hierarchy: • Level 1. Quoted prices in active markets for identical assets. Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. • Level 2. Significant other observable inputs. Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third party pricing services for identical or comparable assets or liabilities. • Level 3. Significant unobservable inputs. Valuations for assets and liabilities that are derived from other methodologies, including option pricing models, discounted cash flow models and similar techniques, are not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets and liabilities. A financial instrument's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Salisbury did not have any significant transfers of assets between levels 1 and 2 of the fair value hierarchy during the year ended December 31, 2019. The following is a description of valuation methodologies for assets recorded at fair value, including the general classification of such assets and liabilities pursuant to the valuation hierarchy. • Securities available-for-sale and the CRA mutual fund. Securities available-for-sale and the CRA mutual fund are recorded at fair value on a recurring basis. Level 1 securities include exchange-traded equity securities. Level 2 securities include debt securities with quoted prices, which are traded less frequently than exchange-traded instruments, whose value is determined using matrix pricing with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes obligations of the U.S. Treasury and U.S. government-sponsored enterprises, mortgage-backed securities, collateralized mortgage obligations, municipal bonds, SBA bonds, corporate bonds and certain preferred equities. Level 3 is for positions that are not traded in active markets or are subject to transfer restrictions, valuations are adjusted to reflect illiquidity and/or non-transferability, and such adjustments are generally based on available market evidence. In the absence of such evidence, management's best estimate is used. Subsequent to inception, management only changes level 3 inputs and assumptions when corroborated by evidence such as transactions in similar instruments, completed or pending third-party transactions in the underlying investment or comparable entities, subsequent rounds of financing, recapitalization and other transactions across the capital structure, offerings in the equity or debt markets, and changes in financial ratios or cash flows. • Collateral dependent loans that are deemed to be impaired are valued based upon the fair value of the underlying collateral less costs to sell. Such collateral primarily consists of real estate and, to a lesser extent, other business assets. Management may adjust appraised values to reflect estimated market value declines or apply other discounts to appraised values resulting from its knowledge of the property. Internal valuations are utilized to determine the fair value of other business assets. Collateral dependent impaired loans are categorized as Level 3. • Other real estate owned acquired through foreclosure or repossession is adjusted to fair value less costs to sell upon transfer out of loans. Subsequently, it is carried at the lower of carrying value or fair value less costs to sell. Fair value is generally based upon independent market prices or appraised values of the collateral. Management adjusts appraised values to reflect estimated market value declines or apply other discounts to appraised values for unobservable factors resulting from its knowledge of the property, and such property is categorized as Level 3. Assets measured at fair value are as follows: Fair Value Measurements Using Assets at (in thousands) Level 1 Level 2 Level 3 fair value December 31, 2019 Assets at fair value on a recurring basis U.S. Government Agency notes $ — $ 4,644 $ — $ 4,644 Municipal bonds — 27,193 — 27,193 Mortgage-backed securities: U.S. Government agencies and U.S. Government-sponsored enterprises — 29,357 — 29,357 Collateralized mortgage obligations: U.S. Government agencies — 25,499 — 25,499 Corporate bonds — 5,108 — 5,108 Securities available-for-sale $ — $ 91,801 $ — $ 91,801 CRA mutual funds 882 — — 882 Assets at fair value on a non-recurring basis Collateral dependent impaired loans $ — $ — $ 1,593 $ 1,593 Other real estate owned $ — $ — $ 314 $ 314 December 31, 2018 Assets at fair value on a recurring basis U.S. Government Agency notes $ — $ 7,670 $ — $ 7,670 Municipal bonds — 5,379 — 5,379 Mortgage-backed securities: U.S. Government agencies and U.S. Government-sponsored enterprises — 57,446 — 57,446 Collateralized mortgage obligations: U.S. Government agencies — 17,747 — 17,747 Corporate bonds — 3,576 — 3,576 Securities available-for-sale $ — $ 91,818 $ — $ 91,818 CRA mutual funds 836 — — 836 Assets at fair value on a non-recurring basis Collateral dependent impaired loans $ — $ — $ 4,238 $ 4,238 Other real estate owned $ — $ — $ 1,810 $ 1,810 Carrying values and estimated fair values of financial instruments are as follows: Carrying Estimated Fair value measurements using (In thousands) value fair value Level 1 Level 2 Level 3 December 31, 2019 Financial Assets Cash and cash equivalents $ 26,885 $ 26,885 $ 26,885 $ — $ — Interest bearing time deposits with financial institutions 750 750 750 — — Securities available-for-sale 91,801 91,801 — 91,801 — CRA mutual fund 882 882 882 — — Federal Home Loan Bank of Boston stock 3,242 3,242 3,242 — — Loans held-for-sale 332 334 — — 334 Loans receivable, net 927,413 933,287 — — 933,287 Accrued interest receivable 3,415 3,415 3,415 — — Cash surrender value of life insurance policies 20,580 20,580 20,580 — — Financial Liabilities Demand (non-interest-bearing) $ 237,852 $ 237,852 $ — $ 237,852 $ — Demand (interest-bearing) 153,314 153,314 — 153,314 — Money market 239,504 239,504 — 239,504 — Savings and other 161,112 161,112 — 161,112 — Certificates of deposit 127,724 128,629 — 128,629 — Deposits 919,506 920,411 — 920,411 — Repurchase agreements 8,530 8,530 — 8,530 — FHLBB advances 50,887 51,028 — 51,028 — Subordinated debt 9,859 10,113 10,113 — — Note payable 246 251 — 251 — Finance lease liability 1,718 1,967 — — 1,967 Accrued interest payable 78 78 78 — — December 31, 2018 Financial Assets Cash and cash equivalents $ 58,445 $ 58,445 $ 58,445 $ — $ — Securities available-for-sale, net 91,818 91,818 — 91,818 — CRA mutual fund 836 836 836 — — Federal Home Loan Bank of Boston stock 4,496 4,496 4,496 — — Loans receivable, net 909,279 886,222 — — 886,222 Accrued interest receivable 3,148 3,148 3,148 — — Cash surrender value of life insurance policies 14,438 14,438 14,438 — — Financial Liabilities Demand (non-interest-bearing) $ 228,448 $ 228,448 $ — $ 228,448 $ — Demand (interest-bearing) 153,586 153,586 — 153,586 — Money market 204,219 204,219 — 204,219 — Savings and other 178,807 178,807 — 178,807 — Certificates of deposit 161,679 162,013 — 162,013 — Deposits 926,739 927,073 — 927,073 — Repurchase agreements 4,104 4,104 — 4,104 — FHLBB advances 67,154 67,231 — 67,231 — Subordinated debt 9,835 10,006 10,006 — — Note payable 280 288 — 288 — Finance lease liability 3,081 3,339 — — 3,339 Accrued interest payable 237 237 237 — — During 2019, management reassessed the pricing inputs for certain assets and liabilities including Federal Home Loan Bank of Boston stock, accrued interest receivable, deposits and subordinated debt. Based on this reassessment, Federal Home Loan Bank of Boston stock, accrued interest receivable and subordinated debt were reclassified from Level 3 to Level 1 and deposits were reclassified from Level 3 to Level 2. Prior period data were reclassified to conform to the current presentation. |
SALISBURY BANCORP, INC. (PARENT
SALISBURY BANCORP, INC. (PARENT ONLY) CONDENSED FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
SALISBURY BANCORP, INC. (PARENT ONLY) CONDENSED FINANCIAL INFORMATION | NOTE 23 – SALISBURY BANCORP, INC. (PARENT ONLY) CONDENSED FINANCIAL INFORMATION The unconsolidated balance sheets and statements of income and cash flows of Salisbury Bancorp, Inc. are presented as follows: Balance Sheets 2019 2018 Assets Cash and due from banks $ 2,273 $ 2,105 Investment in bank subsidiary 121,027 110,525 Other assets 252 689 Total Assets $ 123,552 $ 113,319 Liabilities and Shareholders' Equity Subordinated debt $ 9,859 $ 9,835 Other liabilities 38 25 Shareholders' equity 113,655 103,459 Total Liabilities and Shareholders' Equity $ 123,552 $ 113,319 Statements of Income 2019 2018 2017 Dividends from subsidiary $ 3,546 $ 3,529 $ 3,691 Interest income 10 10 8 Interest expense 624 624 624 Non-interest expenses 417 435 530 Income before taxes and equity in undistributed net income of subsidiary 2,515 2,480 2,545 Income tax benefit 252 256 421 Income before equity in undistributed net income of subsidiary 2,767 2,736 2,966 Equity in undistributed net income of subsidiary 8,369 6,088 3,290 Net income $ 11,136 $ 8,824 $ 6,256 Statements of Cash Flows 2019 2018 2017 Net income $ 11,136 $ 8,824 $ 6,256 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed net income of subsidiary (8,369 ) (6,088 ) (3,290 ) Other 474 (239 ) (410 ) Net cash provided by operating activities 3,241 2,497 2,556 Investing Activities Investment in bank — — — Net cash utilized by investing activities — — — Financing Activities Common stock dividends paid (3,155 ) (3,133 ) (3,113 ) Proceeds from issuance of common stock 82 222 395 Net cash (utilized) by financing activities (3,073 ) (2,911 ) (2,718 ) Net increase (decrease) in cash and cash equivalents 168 (414 ) (162 ) Cash and cash equivalents, beginning of period 2,105 2,519 2,681 Cash and cash equivalents, end of period $ 2,273 $ 2,105 $ 2,519 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 24 – EARNINGS PER SHARE The calculation of earnings per share is as follows: Years ended December 31, (in thousands, except per share amounts) 2019 2018 2017 Net income applicable to common shareholders $ 11,136 $ 8,824 $ 6,256 Less: Undistributed earnings allocated to participating securities (160 ) (111 ) (55 ) Net income allocated to common stock $ 10,976 $ 8,713 $ 6,201 Weighted average common shares issued 2,817 2,798 2,779 Less: Unvested restricted stock awards (35 ) (35 ) (24 ) Weighted average common shares outstanding used to calculate basic earnings per common share 2,782 2,763 2,755 Add: Dilutive effect of stock options 12 17 19 Weighted average common shares outstanding used to calculate diluted earnings per common share 2,794 2,780 2,774 Earnings per common share (basic) $ 3.95 $ 3.15 $ 2.25 Earnings per common share (diluted) $ 3.93 $ 3.13 $ 2.24 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 25 – SUBSEQUENT EVENTS Salisbury has evaluated subsequent events for potential recognition and/or disclosure through the date these consolidated financial statements were issued. The Board of Directors of Salisbury approved a $0.01 increase in the quarterly dividend to $0.29 per common share at their January 24, 2020 meeting. The dividend was paid on February 28, 2020 to shareholders of record as of February 14, 2020. On January 24, 2020, Salisbury entered into updated severance agreements with Richard J. Cantele, Jr., President and Chief Executive Officer, and John M. Davies, President of N.Y. Region and Chief Lending Officer. Salisbury also entered into an updated change in control agreement with Peter Albero, Chief Financial Officer. The new agreements supersede and replace their previous agreements with Salisbury. For additional information see Form 8-K filed January 30, 2020. |
SELECTED QUARTERLY CONSOLIDATED
SELECTED QUARTERLY CONSOLIDATED FINANCIAL DATA (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
SELECTED QUARTERLY CONSOLIDATED FINANCIAL DATA (Unaudited) | NOTE 25 – SELECTED QUARTERLY CONSOLIDATED FINANCIAL DATA (Unaudited) Selected quarterly consolidated financial data for the years ended December 31, 2019 and 2018 is as follows: Year ended December 31, 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Statement of Income Interest and dividend income $ 10,854 $ 10,832 $ 11,023 $ 10,705 Interest expense 2,417 2,488 2,356 2,040 Net interest and dividend income 8,437 8,344 8,667 8,665 Provision for loan losses 294 151 94 417 Trust and Wealth Advisory 906 1,044 1,023 1,022 Service charges and fees 920 1,012 1,003 1,092 Gains on sales of mortgage loans, net 7 1 42 67 Mortgage servicing, net 76 80 76 75 Gains (Losses) on CRA mutual fund 11 12 6 (4 ) (Losses) Gains on sales of available -for-sale- securities, net (9 ) 281 (9 ) — BOLI income and gains 79 87 86 139 Other 37 31 29 28 Non-interest income 2,027 2,548 2,256 2,419 Non-interest expense 7,211 7,439 7,184 7,080 Income before income taxes 2,959 3,302 3,645 3,587 Income tax provision 525 599 657 578 Net income 2,434 2,703 2,988 3,009 Net income allocated to common stock 2,408 2,671 2,940 2,960 Financial Condition Total assets 1,118,925 1,119,212 1,144,240 1,112,448 Loans, net 911,188 910,573 915,083 927,413 Allowance for loan losses 8,750 8,887 8,846 8,895 Securities 102,479 103,857 98,270 95,925 Deposits 941,969 950,723 966,178 919,506 Repurchase agreements 2,951 6,308 8,588 8,530 FHLBB advances 47,712 32,769 37,828 50,887 Shareholders' equity 106,109 108,948 111,580 113,655 Non-performing assets 7,130 5,463 5,687 3,935 Per Common Share Data Earnings, basic $ 0.87 $ 0.96 $ 1.06 $ 1.06 Earnings, diluted 0.86 0.95 1.05 1.06 Cash dividends declared 0.28 0.28 0.28 0.28 Cash dividends paid 0.28 0.28 0.28 0.28 Book value 37.81 38.59 39.52 40.22 Market price: (a) High 44.20 42.60 40.00 47.05 Low 35.25 37.20 35.26 37.42 Statistical Data Net interest margin (fully tax equivalent) 3.28 % 3.19 % 3.29 % 3.34 % Efficiency ratio (fully tax equivalent) 66.15 65.81 62.90 61.81 Return on average assets 0.89 0.97 1.05 1.07 Return on average shareholders' equity 9.45 10.07 10.73 10.56 Weighted average common shares outstanding, basic 2,777 2,780 2,783 2,781 Weighted average common shares outstanding, diluted 2,789 2,793 2,795 2,794 (a) The above market prices reflect inter-dealer prices, without retail markup, markdown or commissions, and may not necessarily represent actual transactions. Salisbury Bancorp, Inc.'s Common Stock, par value $0.10 per share ("Common Stock") trades on the NASDAQ under the symbol: SAL. As of March 9, 2020, there were approximately 2,308 shareholders of record of the Company's Common Stock. Selected quarterly consolidated financial data (unaudited) continued: Year ended December 31, 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Statement of Income Interest and dividend income $ 9,300 $ 9,749 $ 10,516 $ 10,807 Interest expense 1,306 1,706 2,016 2,192 Net interest and dividend income 7,993 8,043 8,500 8,615 Provision (benefit) for loan losses 325 467 378 558 Trust and Wealth Advisory 894 949 936 921 Service charges and fees 868 892 932 1,025 Gains (Losses) on sales of mortgage loans, net 18 (1 ) 21 51 Mortgage servicing, net 83 84 84 57 (Losses) Gains on CRA mutual fund (13 ) (7 ) (6 ) 8 (Losses) Gains on sales of available -for-sale- securities, net (2 ) 17 — 302 BOLI income and gains 82 82 83 432 Other 45 42 38 28 Non-interest income 1,975 2,058 2,088 2,824 Non-interest expense 7,180 7,417 7,329 7,909 Income before income taxes 2,463 2,217 2,881 2,972 Income tax provision 446 318 537 408 Net income 2,017 1,899 2,344 2,564 Net income allocated to common stock 1,997 1,877 2,311 2,528 Financial Condition Total assets 1,014,934 1,096,780 1,098,715 1,121,554 Loans, net 830,370 872,796 898,625 909,279 Allowance for loan losses 7,058 7,381 7,745 7,831 Securities 84,878 90,870 101,591 97,150 Deposits 831,837 897,481 902,161 926,739 Repurchase agreements 3,962 1,691 6,658 4,104 FHLBB advances 62,480 79,538 67,596 67,154 Shareholders' equity 98,097 99,180 100,767 103,459 Non-performing assets 5,761 6,359 8,513 8,324 Per Common Share Data Earnings, basic $ 0.72 $ 0.68 $ 0.84 $ 0.91 Earnings, diluted 0.71 0.68 0.83 0.91 Cash dividends declared 0.28 0.28 0.28 0.28 Cash dividends paid 0.28 0.28 0.28 0.28 Book value 35.20 35.38 35.93 36.86 Market price: (a) High 49.85 46.70 48.44 43.04 Low 44.00 38.15 40.36 35.25 Statistical Data Net interest margin (fully tax equivalent) 3.46 % 3.31 % 3.29 % 3.34 % Efficiency ratio (fully tax equivalent) 69.35 70.87 66.91 69.13 Return on average assets 0.81 0.69 0.85 0.92 Return on average shareholders' equity 8.33 7.68 9.26 9.99 Weighted average common shares outstanding, basic 2,759 2,761 2,764 2,766 Weighted average common shares outstanding, diluted 2,780 2,779 2,779 2,779 (a) The above market prices reflect inter-dealer prices, without retail markup, markdown or commissions, and may not necessarily represent actual transactions. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include those of Salisbury and the Bank after elimination of all inter-company accounts and transactions. |
Basis of Financial Statement Presentation | Basis of Financial Statement Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and general practices within the financial services industry. In preparing the consolidated financial statements, management is required to make extensive use of estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statement of condition, and revenues and expenses for the period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, potential other-than-temporary impairment of securities and potential impairment of goodwill and intangibles. Certain reclassifications have been made to the 2018 and 2017 consolidated financial statements to make them consistent with the 2019 presentation. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash and balances due from banks and interest-bearing demand deposits in other banks. Due to the nature of cash and cash equivalents, Salisbury estimated that the carrying amount of such instruments approximated fair value. The nature of the Bank's business requires that it maintain amounts due from banks which, at times, may exceed federally insured limits. The Bank has not experienced any losses on such amounts and all amounts are maintained with well-capitalized institutions. |
Interest Bearing Time Deposits with Financial Institutions | Interest Bearing Time Deposits with Financial Institutions Interest bearing time deposits are balances held in CD's in a CDARS program. Due to the nature of time deposits, Salisbury estimated that the carrying amount of such instruments are at par. |
Securities | Securities Securities that may be sold as part of Salisbury's asset/liability or liquidity management or in response to or in anticipation of changes in interest rates and resulting prepayment risk, or for other similar factors, are classified as available-for-sale and carried at their fair value. Unrealized holding gains and losses on such securities are reported net of related taxes, if applicable, as a separate component of shareholders' equity. Securities that Salisbury has the ability and positive intent to hold to maturity are classified as held-to-maturity and carried at amortized cost. Realized gains and losses on the sales of all securities are reported in earnings and computed using the specific identification cost basis. Securities are reviewed regularly for other-than-temporary impairment (“OTTI”). Premiums and discounts are amortized or accreted utilizing the interest method over the life or call of the term of the investment security. For any debt security with a fair value less than its amortized cost basis, Salisbury will determine whether it has the intent to sell the debt security or whether it is more likely than not it will be required to sell the debt security before the recovery of its amortized cost basis. If either condition is met, Salisbury will recognize a full impairment charge to earnings. For all other debt securities that are considered OTTI and do not meet either condition, the credit loss portion of impairment will be recognized in earnings as realized losses. |
Federal Home Loan Bank of Boston Stock | Federal Home Loan Bank of Boston Stock The Bank is a member of the Federal Home Loan Bank of Boston (“FHLBB”). The FHLBB is a cooperative that provides services, including funding in the form of advances, to its member banking institutions. As a requirement of membership, the Bank must own a minimum amount of FHLBB stock, calculated periodically based primarily on its level of borrowings from the FHLBB. No market exists for shares of the FHLBB and therefore, they are carried at par value. FHLBB stock may be redeemed at par value five years following termination of FHLBB membership, subject to limitations which may be imposed by the FHLBB or its regulator, the Federal Housing Finance Board, to maintain capital adequacy of the FHLBB. While the Bank currently has no intentions to terminate its FHLBB membership, the ability to redeem its investment in FHLBB stock would be subject to the conditions imposed by the FHLBB. Based on the capital adequacy and the liquidity position of the FHLBB, management believes there is no impairment related to the carrying amount of the Bank's FHLBB stock as of December 31, 2019. Deterioration of the FHLBB's capital levels may require the Bank to deem its restricted investment in FHLBB stock to be OTTI. If evidence of impairment exists in the future, the FHLBB stock would reflect fair value using either observable or unobservable inputs. The Bank will continue to monitor its investment in FHLBB stock. |
Loans | Loans Loans receivable consist of loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off. Loans receivable are reported at their outstanding principal balance, net of unamortized deferred loan origination fees and costs on originated loans and unamortized premiums on purchased loans. Interest income is accrued on the unpaid principal balance. Deferred loan origination fees and costs are amortized as an adjustment to yield over the lives of the related loans. The Bank's loans collateralized by real estate and all other real estate owned (“OREO”) are located principally in northwestern Connecticut and New York and Massachusetts towns, which constitute Salisbury's service area. Accordingly, the collectability of a substantial portion of the loan portfolio and OREO is susceptible to changes in market conditions in Salisbury's service area. While management uses available information to recognize losses on loans and OREO, future additions to the allowance or write-downs of OREO may be necessary based on changes in local economic conditions, particularly in Salisbury's service area. Loans held-for-sale consist of residential mortgage loans that management has the intent to sell. Loans held-for-sale are valued at the lower of cost or market as determined by outstanding commitments from investors or current investor yield requirements calculated on the aggregate loan basis, net of deferred loan origination fees and costs. Changes in the carrying value, deferred loan origination fees and costs, and realized gains and losses on sales of loans held-for-sale are reported in earnings as gains and losses on sales of mortgage loans, net, when the proceeds are received from investors. The accrual of interest on loans, including troubled debt restructured loans, is generally discontinued when principal or interest is past due by 90 days or more, or earlier when, in the opinion of management, full collection of principal or interest is unlikely, except for loans that are well collateralized, in the process of collection and where full collection of principal and interest is assured. When a loan is placed on non-accrual status, interest previously accrued but not collected is reversed against current income. Income on such loans, including impaired loans, is then recognized only to the extent that cash is received and future collection of principal is probable. Loans, including troubled debt restructured loans, are restored to accrual status when principal and interest payments are brought current and future payments are reasonably assured, following a sustained period of repayment performance by the borrower in accordance with the loan's contractual terms. Troubled debt restructured loans include those for which concessions such as reduction of interest rates, other than normal market rate adjustments, or deferral of principal or interest payments, extension of maturity dates, or reduction of principal balance or accrued interest, have been granted due to a borrower's financial condition. The decision to restructure a loan, versus aggressively enforcing the collection of the loan, may benefit Salisbury by increasing the ultimate probability of collection. Troubled debt restructured loans are classified as accruing or non-accruing based on management's assessment of the collectability of the loan. Loans which are already on non-accrual status at the time of the troubled debt restructuring generally remain on non-accrual status for approximately six months before management considers such loans for return to accruing status. Accruing troubled debt restructured loans are generally placed into non-accrual status if and when the borrower fails to comply with the restructured terms. |
Acquired Loans | Acquired Loans Loans that Salisbury acquired through business combinations are initially recorded at fair value with no carryover of the related allowance for credit losses. Determining the fair value of the loans involves estimating the amount and timing of principal and interest cash flows initially expected to be collected on the loans and discounting those cash flows at an appropriate market rate of interest. For loans that meet the criteria stipulated in Accounting Standards Codification (“ASC”) 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality,” Salisbury recognizes the accretable yield, which is defined as the excess of all cash flows expected to be collected at acquisition over the initial fair value of the loan, as interest income on a level-yield basis over the expected remaining life of the loan. The excess of the loan's contractually required payments over the cash flows expected to be collected is the nonaccretable difference. The nonaccretable difference is not recognized as an adjustment of yield, a loss accrual, or a valuation allowance. Going forward, Salisbury continues to evaluate whether the timing and the amount of cash to be collected are reasonably expected. Subsequent significant increases in cash flows Salisbury expects to collect will first reduce any previously recognized valuation allowance and then be reflected prospectively as an increase to the level yield. Subsequent decreases in expected cash flows may result in the loan being considered impaired. Such decreases may also result in recognition of additional provisions to the allowance for loan losses. Interest income is not recognized to the extent that the net investment in the loan would increase to an amount greater than the estimated payoff amount. For ASC 310-30 loans, the expected cash flows reflect anticipated prepayments, determined on a loan by loan basis according to the anticipated collection plan of these loans. The expected prepayments used to determine the accretable yield are consistent between the cash flows expected to be collected and projections of contractual cash flows so as to not affect the nonaccretable difference. For ASC 310-30 loans, prepayments result in the recognition of the nonaccretable balance as current period yield. Changes in prepayment assumptions may change the amount of interest income and principal expected to be collected. For loans that do not meet the ASC 310-30 criteria, Salisbury accretes interest income on a level yield basis using the contractually required cash flows. Salisbury subjects loans that do not meet the ASC 310-30 criteria to ASC Topic 450, “Contingencies” by collectively evaluating these loans for an allowance for loan losses. Acquired loans that met the criteria for nonaccrual of interest prior to the acquisition are considered performing upon acquisition, regardless of whether the customer is contractually delinquent, if Salisbury can reasonably estimate the timing and amount of the expected cash flows on such loans and if Salisbury expects to fully collect the new carrying value of the loans. As such, Salisbury may no longer consider the loan to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable yield. In first quarter 2019 Salisbury transferred the remaining unearned credit-related discount on loans acquired in its 2014 acquisition of Riverside Bank to the allowance for loan loss reserves. As a result of this transfer, gross loans receivable and the allowance for loan losses increased by $663 thousand. The balance of net loans receivable did not change as a result of this transfer. |
Allowance for Loan Losses | Allowance for Loan Losses The allowance for loan losses represents management's estimate of the probable credit losses inherent in the loan portfolio as of the reporting date. The allowance is increased by provisions charged to earnings and by recoveries of amounts previously charged off, and is reduced by loan charge-offs. Loan charge-offs are recognized when management determines a loan or portion of a loan to be uncollectible. The determination of the adequacy of the allowance is based on management's ongoing review of numerous factors, including the growth and composition of the loan portfolio, historical loss experience over an economic cycle, probable credit losses based upon internal and external portfolio reviews, credit risk concentrations, changes in lending policy, current economic conditions, analysis of current levels and asset quality, delinquency levels and trends, estimates of the current value of underlying collateral, the performance of individual loans in relation to contract terms, and other pertinent factors. While management believes that the allowance for loan losses is adequate, the allowance is an estimate, and ultimate losses may vary from management's estimate. Future additions to the allowance may also be necessary based on changes in assumptions and economic conditions. In addition, various regulatory agencies periodically review the allowance for loan losses. Such agencies may require additions to the allowance based on their judgments about information available to them at the time of their examination. Changes in the estimate are recorded in the results of operations in the period in which they become known, along with provisions for estimated losses incurred during that period. The allowance for loan losses is computed by segregating the portfolio into three components: (1) loans collectively evaluated for impairment: general loss allocation factors for non-impaired loans based on loan product, collateral type and abundance, loan risk rating, historical loss experience, delinquency factors and other similar economic indicators, (2) loans individually evaluated for impairment: individual loss allocations for loans deemed to be impaired based on discounted cash flows or collateral value, and (3) unallocated: general loss allocations for other environmental factors. Loans collectively evaluated for impairment This component of the allowance for loan losses is stratified by the following loan segments: residential real estate secured (residential 1-4 family and 5+ multifamily, construction of residential 1-4 family, and home equity lines of credit), commercial real estate secured (commercial and construction of commercial), secured by land (farm and vacant land), commercial and industrial, municipal and consumer. Management's general loss allocation factors are based on a rolling five-year annual historical loss rate for each loan segment adjusted for qualitative factors and specific risk ratings. Qualitative factors include levels/trends in delinquencies; trends in volume and terms of loans; effects of changes in risk selection and underwriting standards and other changes in lending policies, procedures and practices; experience/ability/depth of lending management and staff; and national and local economic trends and conditions. There were no changes in Salisbury's policies or methodology pertaining to the general component of the allowance for loan losses during 2019. The qualitative factors are determined based on the various risk characteristics of each loan segment. Risk characteristics relevant to each portfolio segment are as follows: Residential real estate - Salisbury generally does not originate loans with a loan-to-value ratio greater than 80 percent and generally does not grant subprime loans. Loans in this segment are collateralized primarily by owner-occupied residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment. Commercial real estate - Loans in this segment are primarily owner-occupied businesses or income-producing investment properties throughout Salisbury's market area. The underlying cash flows generated by the properties are adversely impacted by a downturn in the economy as evidenced by decreased sales or increased vacancy rates which, in turn, will have an effect on the credit quality in this segment. For commercial loans management annually obtains business and personal financial statements, tax returns, and, where applicable, rent rolls, and continually monitors the repayment of these loans. Construction loans - Loans in this segment are primarily residential construction loans which typically roll into a permanent residential mortgage loan when construction is completed, or commercial construction which consist primarily of owner-occupied commercial construction projects. Commercial and industrial loans - Loans in this segment are made to businesses and are generally secured by assets of the business, including equipment and/or inventory. Repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased retail or wholesale spending, has an effect on the credit quality in this segment. Farm – Loans in this segment are made to independent agricultural businesses and may be affected by adverse weather conditions or weak commodity prices. Vacant land – Loans in this segment are primarily dependent on the credit quality of the individual borrowers. Loan-to-value ratios for loans with vacant land for collateral are more conservative than for commercial or residential real estate loans. Municipal loans – Loans in this segment are extensions of credit to municipal and other governmental entities throughout Salisbury's market area. The bank-qualified, tax-exempt loans are backed by the full faith and credit of the borrowing entity with taxing or appropriating authority, as appropriate. Maturities range from one year for bond anticipation notes to twenty years for long-term project finance. The ability of the borrower to pay may be affected by an economic downturn resulting in a severe reduction in tax or other revenues coupled with the depletion of an entity's reserve liquidity. Historical default rates for bank-qualified (small issuer) general obligation municipal credit facilities are 0% since the asset class was created in 1986. Consumer loans - Loans in this segment are generally unsecured and repayment is dependent on the credit quality of the individual borrower. Loans individually evaluated for impairment This component relates to loans that are classified as impaired. Impairment is measured on a loan by loan basis for all portfolio loans (except consumer loans and homogeneous residential real estate loans) by either the present value of expected future cash flows discounted at the loan's effective interest rate, the fair value of the collateral if the loan is collateral dependent or third-party market loan pricing. An allowance is established when the discounted cash flows (or collateral value) of the impaired loan are lower than the carrying value of that loan. A loan is considered impaired when, based on current information and events, it is probable that Salisbury will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record, and the amount of the shortfall in relation to the principal and interest owed. In seeking to protect the best interests of the Bank, Salisbury may agree to modify the contractual terms of loans. When a loan is modified and a concession is made to a borrower experiencing financial difficulty, the modification is considered a troubled debt restructuring ("TDR"). All TDRs are classified as impaired. Unallocated An unallocated component is maintained to cover uncertainties that could affect management's estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating allocated and general reserves in the portfolio. |
Mortgage Servicing Rights | Mortgage Servicing Rights As part of our growth and risk management strategy, Salisbury from time to sells whole loans. typically residential loans. Salisbury's ability to sell whole loans benefits the Bank by freeing up capital and funding to lend to new customers. Additionally, we typically earn a gain on the sale of loans sold and receive a servicing fee while maintaining the customer relationship. Mortgage (“MSRs”), which the bank evaluates with the assistance of a third party on a quarterly basis, are included on the consolidated balance and are accounted for under the amortization method. that method mortgage servicing rights are amortized in proportion to, and over the period of, estimated net servicing revenues. Refinance activities are considered in estimating the period of net servicing revenues. |
Other Real Estate Owned ("OREO") | Other Real Estate Owned (“OREO”) OREO consists of properties acquired through foreclosure or a deed in lieu of foreclosure. These properties are initially transferred at fair value less estimated costs to sell. Any write-down from cost to estimated fair value required at the time of foreclosure is charged to the allowance for loan losses. A valuation allowance is maintained for declines in market value and for estimated selling expenses. Increases to the valuation allowance, expenses associated with ownership of these properties, and gains and losses from their sale are included in OREO expense. As of December 31, 2019, and 2018, the recorded investment in residential mortgage loans collateralized by residential real estate that were in the process of foreclosure was $0.1 million and $0.5 million, respectively. |
Income Taxes | Income Taxes Deferred income taxes are provided for differences arising in the timing of income and expenses for financial reporting and for income tax purposes using the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Salisbury provides deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is assured beyond a reasonable doubt. A valuation allowance is established against deferred tax assets when, based upon all available evidence, it is determined that it is more likely than not that some or all of the deferred tax assets will not be realized. |
Bank Premises and Equipment | Bank Premises and Equipment Bank premises, furniture and equipment are carried at cost, less accumulated depreciation and amortization computed on the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized on the straight-line basis over the shorter of the estimated useful lives of the improvements or the term of the related leases. Guidelines for expected useful life are as follows: • Buildings/Improvements – 39 years • Land Improvements – 15 years • Furniture and Fixtures – 7 years • Computer Equipment – 5 years • Software – 3 years |
Intangible Assets | Intangible Assets Intangible assets consist of core deposit intangibles and goodwill. Intangible assets equal the excess of the purchase price over the fair value of the tangible net assets acquired in business combinations accounted for using the acquisition method of accounting. Salisbury's intangible assets at December 31, 2019, and 2018, include goodwill of $2.4 million arising from the purchase of a branch office in 2001, $7.2 million arising from the 2004 acquisition of Canaan National Bancorp, Inc., $319 thousand arising from the 2007 purchase of a branch office in New York State, $2.7 million arising from the acquisition of Riverside Bank in December 2014 and $1.3 million from the purchase of an additional branch office in New York in 2017. See Note 9. On an annual basis, management assesses intangible assets for impairment and, for the year ending December 31, 2019, concluded there was no impairment. If a permanent loss in value is indicated, an impairment charge to income will be recognized. |
Bank-Owned Life Insurance | Bank-Owned Life Insurance Bank-owned life insurance policies are reflected on the consolidated balance sheet at cash surrender value. Changes in the net cash surrender value of the policies, as well as insurance proceeds received, are reflected in non-interest income on the consolidated statements of operations and are generally not subject to income taxes. The Bank reviews the financial strength of the insurance carriers prior to the purchase of life insurance policies and no less than annually thereafter. A life insurance policy with any individual carrier is limited to 15% of tier one capital and the total cash surrender value of the life insurance policies is limited to 25% of tier one capital. |
Stock Based Compensation | Stock Based Compensation Stock based compensation expense is recognized, based on the fair value at the date of grant on a straight-line basis over the period of time between the grant date and vesting date. |
Advertising Expense | Advertising Expense Advertising costs of $480 thousand and $608 thousand in 2019 and 2018, respectively, are expensed as incurred and not capitalized. |
Statement of Cash Flows | Statements of Cash Flows For the purpose of the Consolidated Statements of Cash Flows, cash and cash equivalents include cash and due from banks and interest-bearing demand deposits with other financial institutions. |
Computation of Earnings per Share | Computation of Earnings per Share The Company defines unvested share-based payment awards that contain non-forfeitable rights to dividends as participating securities that are included in computing earnings per share (“EPS”) using the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each share of common stock and participating securities according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends. Basic EPS excludes dilution and is computed by dividing income allocated to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. |
Revenue Recognition | Revenue Recognition A significant portion of Salisbury's revenue, including interest income from loans and investments, falls outside the scope of ASC 606. Revenue from Salisbury's Trust and Wealth Advisory business, service charges and fees and interchange fees, however, are within the scope of ASC 606. Revenue for these in-scope services is recognized when, or as, obligations under the terms of a contract are satisfied, which occurs when the services are transferred to customers. Revenue is measured as the amount of consideration Salisbury expects to receive in exchange for providing the services to a customer (“transaction price”). To the extent the transaction price includes variable consideration, Salisbury estimates the amount of variable consideration that should be included in the transaction price utilizing the most likely amount to which Salisbury expects to be entitled. Variable consideration is included in the transaction price if, in Salisbury's judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of Salisbury's anticipated performance and all information (historical, current, and forecasted) that is reasonably available. Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue. Contracts with customers may contain multiple performance obligations. For such arrangements, the transaction price is allocated to each performance obligation based on the estimated relative standalone selling prices of the promised services underlying each performance obligation. Salisbury determines standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through fee schedules provided to its customers or through past transactions, Salisbury estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. Contracts are often modified to account for changes in contract specifications and requirements. Contract modifications exist when the modification either creates new or changes the existing enforceable rights and obligations. Generally, contract modifications are for products or services that are distinct from the existing contract and are accounted for as if they were a new and separate contract. The original contract is still accounted for according to its original terms. Trust and Wealth Advisory The Trust and Wealth Advisory business generates revenue through a range of fiduciary services including trust and estate administration, wealth advisory, and investment management to individuals, families, businesses and institutions. Revenue from these services is generally recognized over time and are typically based on the market value of assets under administration and established fee schedules. Certain fees, such as real estate sale fees, asset liquidation fees, special asset fees, and daily money management fees, are recorded as revenue at a point in time at the completion of the service. Service Charges and Fees Salisbury offers a variety of deposit accounts with a range of interest rates and other terms, which are designed to meet customer financial needs. Monthly deposit account fees and account research fees are recognized over time using the right to invoice measure of progress. Overdraft protection, ATM services, cash management, bill pay, money transfers, among others, are generally recognized at point in time at the completion of the service. Interchange Fees Salisbury earns interchange fee revenue through customers' use of the Bank's debit cards. Interchange fees are generally recognized as revenue at a point in time when customers make a purchase using their debit card. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, "Leases (Topic 842)”. Under the new guidance, lessees are required to recognize the following for all leases (with the exception of short-term leases): (1) a lease liability, which is the present value of a lessee's obligation to make lease payments, and (2) a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. Lessor accounting under the new guidance remains largely unchanged as it is substantially equivalent to existing guidance for sales-type leases, direct financing leases, and operating leases. Leveraged leases have been eliminated, although lessors can continue to account for existing leveraged leases using the current accounting guidance. Other limited changes were made to align lessor accounting with the lessee accounting model and the new revenue recognition standard. All entities will classify leases to determine how to recognize lease-related revenue and expense. Quantitative and qualitative disclosures are required by lessees and lessors to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The intention is to require enough information to supplement the amounts recorded in the financial statements so that users can understand more about the nature of an entity's leasing activities. In July 2018, the FASB issued ASU 2018-10 which provided technical corrections to the new lease standard. In August 2018, the FASB issued ASU 2018-11 Leases – Targeted Improvements, to provide entities with relief from the costs of implementing certain aspects of the new leasing standard. Specifically, under the amendments in ASU 2018-11, entities may elect not to recast the comparative periods presented when transitioning to the new lease standard. ASU 2018-11 has the same effective date as ASU 2016-02 (January 1, 2019 for the Company). Salisbury adopted ASU 2018-11 and elected the transition option. In March 2019, the FASB issued ASU 2019-01, the transition guidance related to certain interim disclosures provided in the year of adoption. To coincide with the adoption of AU 2016-02, Salisbury elected to early adopt ASU 2019-01 on January 1, 2019. Salisbury's consolidated assets and liabilities increased by approximately $1.6 million due to the recording of operating leases as a result of adopting ASU 2016-02 effective January 1, 2019. In conformance with ASU 2018-11, Salisbury elected not to recast comparative periods. See also Note 5 to the Consolidated Financial Statement for further information. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which adds a new Topic 326 to the Codification and removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities. Under current U.S. GAAP, companies generally recognize credit losses when it is probable that the loss has been incurred. The revised guidance will remove all recognition thresholds and will require companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the company expects to collect over the instrument's contractual life. ASU 2016-13 also amends the credit loss measurement guidance for available-for-sale debt securities and beneficial interests in securitized financial assets. The guidance in ASU 2016-13 is effective for “public business entities,” as defined, that are SEC filers for fiscal years and for interim periods with those fiscal years beginning after December 15, 2019. In April 2019, the FASB issued ASU 2019-04 which clarified the treatment of accrued interest when measuring credit losses. Entities may: (1) measure the allowance for credit losses on accrued interest receivable balances separately from other components of the amortized cost basis of associated financial assets; (2) make various accounting policy elections regarding the treatment of accrued interest receivable; or (3) elect a practical expedient to disclose separately the total amount of accrued interest included in the amortized cost basis as a single balance to meet certain disclosure requirements. ASU 2019-04 also clarified that expected recoveries of amounts previously written off and expected to be written off should be included in the valuation account and should not exceed the aggregate of amounts previously written off and expected to be written off by the entity. In addition, for collateral dependent financial assets, the amendments clarify that an allowance for credit losses that is added to the amortized cost basis of the financial asset(s) should not exceed amounts previously written off. In November 2019, the FASB issued ASU 2019-10, which delayed the effective date of ASU 2016-13 to fiscal years beginning after December 15, 2022 for smaller reporting companies, although early adoption is permitted. Salisbury meets the definition of a smaller reporting company because its public float is less than $250 million. In November 2019, the FASB issued ASU 2019-11, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses” which clarified or addressed specific issues about certain aspects of the amendments in ASU 2016-13. The amendments in ASU 2019-11 clarified the following: (1) The allowance for credit losses for purchased financial assets with credit deterioration should include expected recoveries of amounts previously written off and expected to be written off by the entity and should not exceed the aggregate of amounts of the amortized cost basis previously written off and expected to be written off by an entity. In addition, the amendments clarify that when a method other than a discounted cash flow method is used to estimate expected credit losses, expected recoveries should not include any amounts that result in an acceleration of the noncredit discount. An entity may include increases in expected cashflows after acquisition; (2) Transition relief will be provided by permitting entities an accounting policy election to adjust the effective interest rate on existing troubled debt restructurings using prepayment assumptions on the date of adoption of Topic 326 rather than the prepayment assumptions in effect immediately before the restructuring; (3) Disclosure relief will be extended for accrued interest receivable balances to additional relevant disclosures involving amortized cost basis. (4) An entity should assess whether it reasonably expects the borrower will be able to continually replenish collateral securing the financial asset to apply the practical expedient. The amendments clarify that an entity applying the practical expedient should estimate expected credit losses for any difference between the amount of the amortized cost basis that is greater than the fair value of the collateral securing the financial asset (that is, the unsecured portion of the amortized cost basis). An entity may determine that the expectation of nonpayment for the amount of the amortized cost basis equal to the fair value of the collateral securing the financial asset is zero. Upon adoption, Salisbury will apply the standards' provisions as a cumulative effect adjustment to retained earnings as of the first reporting period in which the guidance is effective. Salisbury anticipates that the adoption of ASU 2016-13 and related updates will impact the consolidated financial statements as it relates to the balance in the allowance for loan losses. Salisbury has engaged a third-party software vendor to model the allowance for loan and losses in conformance with this ASU. Salisbury will continue to refine this model and assess the impact to its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” This ASU is intended to allow companies to simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying amount of that goodwill. The FASB is researching whether similar amendments should be considered for other entities, including public business entities. ASU 2017-04 is effective for public business entities that are SEC filers for fiscal years beginning after December 15, 2019 and interim periods within those years. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. Entities should apply the guidance prospectively. Salisbury does not expect the provisions of ASU 2017-04 to have a material impact on its Consolidated Financial Statements. In March 2017, the FASB issued ASU 2017-08, “Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” This ASU will amend the amortization period for certain purchased callable debt securities held at a premium. The Board is shortening the amortization period for the premium to the earliest call date. Under previous generally accepted accounting principles, entities generally amortized the premium as an adjustment of yield over the contractual life of the instrument. On January 1, 2019, the Bank adopted the new standard, which did not have a material impact on Salisbury's Consolidated Financial Statements. In August 2018, the FASB issued ASU 2018-03, “Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements. Among the changes, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. ASU 2018-03 is effective for interim and annual reporting periods beginning after December 15, 2019; early adoption is permitted. As ASU 2018-13 only revises disclosure requirements, it will not have a material impact on Salisbury's Consolidated Financial Statements. In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting or Income Taxes.” The amendments in this Update simplify the accounting for income taxes by removing the following exceptions: 1. Exception to the incremental approach for intra-period tax allocation when there is a loss from continuing operations and income or a gain from other items (for example, discontinued operations or other comprehensive income) 2. Exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment 3. Exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary 4. Exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. The amendments in this Update also simplify the accounting for income taxes by doing the following: 1. Requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax. 2. Requiring that an entity evaluate when a step-up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction. 3. Specifying that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements. However, an entity may elect to do so (on an entity-by-entity basis) for a legal entity that is both not subject to tax and disregarded by the taxing authority. 4. Requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. 5. Making minor Codification improvements for income taxes related to employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years; early adoption is permitted. Salisbury is currently evaluating the provisions of ASU 2019-12 to determine the potential impact the new standard will have on Salisbury's Consolidated Financial Statements. |
MERGERS AND ACQUISITIONS (Table
MERGERS AND ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Accretable yield for ASC 310-30 acquired loan portfolio | (In thousands) 2019 2018 Balance at beginning of period $ 204 $ 517 Acquisitions — — Accretion (204 ) (164 ) Disposals — (149 ) Reclassification from non-accretable to accretable — — Balance at end of period $ — $ 204 |
SECURITIES (Tables)
SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Composition of Securities | (in thousands) Amortized Gross un- realized gains Gross un- realized losses Fair value December 31, 2019 Available-for-sale U.S. Government Agency notes $ 4,520 $ 125 $ 1 $ 4,644 Municipal bonds 26,562 704 73 27,193 Mortgage-backed securities: U.S. Government agencies and U.S. Government- sponsored enterprises 28,961 420 24 29,357 Collateralized mortgage obligations: U.S. Government agencies 25,041 468 10 25,499 Corporate bonds 5,000 108 — 5,108 Total securities available-for-sale $ 90,084 $ 1,825 $ 108 $ 91,801 CRA mutual fund $ 882 Non-marketable securities Federal Home Loan Bank of Boston stock $ 3,242 $ — $ — $ 3,242 (in thousands) Amortized Gross un- realized gains Gross un- realized losses Fair value December 31, 2018 Available-for-sale U.S. Government Agency notes $ 7,590 $ 83 $ 3 $ 7,670 Municipal bonds 5,334 45 — 5,379 Mortgage-backed securities: U.S. Government agencies and U.S. Government sponsored enterprises 57,837 170 561 57,446 Collateralized mortgage obligations: U.S. Government agencies 17,835 85 173 17,747 Corporate bonds 3,500 76 — 3,576 Total securities available-for-sale $ 92,096 $ 459 $ 737 $ 91,818 CRA mutual fund $ 836 Non-marketable securities Federal Home Loan Bank of Boston stock $ 4,496 $ — $ — $ 4,496 |
Sales of securities available-for-sale and gross gains and gross losses realized | Years ended December 31, (in thousands) 2019 2018 2017 Proceeds $ 41,814 $ 10,036 $ 199 Gains realized 371 361 192 Losses realized (108 ) (43 ) (14 ) Net gains realized 263 318 178 Income tax provision 55 67 61 |
Aggreggate fair value and gross unrealized loss of securities | Less than 12 Months 12 Months or Longer Total December 31, 2019 (in thousands) Fair Unrealized losses Fair Unrealized losses Fair Unrealized losses Available-for-sale U.S. Government Agency notes $ — $ — $ 195 $ 1 $ 195 $ 1 Municipal bonds 6,273 73 — — 6,273 73 Mortgage- backed securities: U.S. Government agencies and U.S. Government - sponsored enterprises 5,781 22 704 2 6,485 24 Collateralized mortgage obligations: U.S. Government Agencies 1,438 10 — — 1,438 10 Total temporarily impaired securities $ 13,492 $ 105 $ 899 $ 3 $ 14,391 $ 108 Less than 12 Months 12 Months or Longer Total December 31, 2018 (in thousands) Fair Unrealized losses Fair Unrealized losses Fair Unrealized losses Available-for-sale U.S. Government Agency notes $ 34 $ — $ 532 $ 3 $ 566 $ 3 Mortgage-backed securities: U.S. Government agencies and U.S. Government –sponsored enterprises 13,063 175 26,777 386 39,840 561 Collateralized mortgage obligations: U.S. Government Agencies — — 8,281 173 8,281 173 Total temporarily impaired securities $ 13,097 $ 175 $ 35,590 $ 562 $ 48,687 $ 737 |
Amortized cost, fair value and tax equivalent yield of securities | December 31, 2019 (in thousands) Maturity Amortized cost Fair value Yield (1) U.S. Government Agency notes After 5 year but within 10 years $ 2,497 $ 2,551 3.48 % Total 2,497 2,551 3.48 Municipal bonds Within 1 year 60 60 2.63 After 5 year but within 10 years 1,734 1,833 3.16 After 10 years 24,768 25,300 3.48 Total 26,562 27,193 3.46 Corporate bonds After 5 years but within 10 years 5,000 5,108 5.21 Mortgage-backed securities, CMO securities and SBA securities 56,025 56,949 2.85 Securities available-for-sale $ 90,084 $ 91,801 3.17 % (1) Yield is based on amortized cost. |
LOANS (Tables)
LOANS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Composition of loans receivable and loans held-for-sale | December 31, 2019 2018 (in thousands) Total Loans Total Loans Residential 1-4 family $ 346,299 $ 345,862 Residential 5+ multifamily 35,455 36,510 Construction of residential 1-4 family 11,889 12,041 Home equity lines of credit 33,798 34,433 Residential real estate 427,441 428,846 Commercial 289,795 283,599 Construction of commercial 8,466 8,976 Commercial real estate 298,261 292,575 Farm land 3,641 4,185 Vacant land 7,893 8,322 Real estate secured 737,236 733,928 Commercial and industrial 169,411 162,905 Municipal 21,914 14,344 Consumer 6,385 4,512 Loans receivable, gross 934,946 915,689 Deferred loan origination fees and costs, net 1,362 1,421 Allowance for loan losses (8,895 ) (7,831 ) Loans receivable, net $ 927,413 $ 909,279 Loans held-for-sale Residential 1-4 family $ 332 $ — |
Composition of loans receivable by risk rating grade | (in thousands) Pass Special mention Substandard Doubtful Loss Total December 31, 2019 Residential 1-4 family $ 337,302 $ 4,278 $ 4,719 $ — $ — $ 346,299 Residential 5+ multifamily 33,619 99 1,737 — — 35,455 Construction of residential 1-4 family 11,889 — — — — 11,889 Home equity lines of credit 33,381 312 105 — — 33,798 Residential real estate 416,191 4,689 6,561 — — 427,441 Commercial 271,708 10,964 7,052 71 — 289,795 Construction of commercial 8,225 — 241 — — 8,466 Commercial real estate 279,933 10,964 7,293 71 — 298,261 Farm land 1,934 — 1,707 — — 3,641 Vacant land 7,834 59 — — — 7,893 Real estate secured 705,892 15,712 15,561 71 — 737,236 Commercial and industrial 167,458 443 1,510 — — 169,411 Municipal 21,914 — — — — 21,914 Consumer 6,344 3 38 — — 6,385 Loans receivable, gross $ 901,608 $ 16,158 $ 17,109 $ 71 $ — $ 934,946 (in thousands) Pass Special mention Substandard Doubtful Loss Total December 31, 2018 Residential 1-4 family $ 337,520 $ 4,281 $ 4,061 $ — $ — $ 345,862 Residential 5+ multifamily 34,726 784 1,000 — — 36,510 Construction of residential 1-4 family 12,041 — — — — 12,041 Home equity lines of credit 33,728 265 440 — — 34,433 Residential real estate 418,015 5,330 5,501 — — 428,846 Commercial 270,461 4,530 8,608 — — 283,599 Construction of commercial 8,482 — 494 — — 8,976 Commercial real estate 278,943 4,530 9,102 — — 292,575 Farm land 3,969 — 216 — — 4,185 Vacant land 8,253 69 — — — 8,322 Real estate secured 709,180 9,929 14,819 — — 733,928 Commercial and industrial 159,127 2,672 1,106 — — 162,905 Municipal 14,344 — — — — 14,344 Consumer 4,502 10 — — — 4,512 Loans receivable, gross $ 887,153 $ 12,611 $ 15,925 $ — $ — $ 915,689 |
Composition of loans receivable by delinquency status | Past due (In thousands) Current 30-59 days 60-89 days 90-179 days 180 days and over 30 days and over Accruing 90 days and over Non- accrual December 31, 2019 Residential 1-4 family $ 344,085 $ 971 $ 351 $ 200 $ 692 $ 2,214 $ — $ 1,551 Residential 5+ multifamily 34,594 — — — 861 861 — 861 Construction of residential 1-4 family 11,889 — — — — — — — Home equity lines of credit 33,522 152 46 — 78 276 — 105 Residential real estate 424,090 1,123 397 200 1,631 3,351 — 2,517 Commercial 289,103 336 141 71 144 692 — 914 Construction of commercial 8,466 — — — — — — — Commercial real estate 297,569 336 141 71 144 692 — 914 Farm land 3,461 180 — — — 180 — 186 Vacant land 7,852 — 41 — — 41 — — Real estate secured 732,972 1,639 579 271 1,775 4,264 — 3,617 Commercial and industrial 169,262 2 146 1 — 149 1 — Municipal 21,914 — — — — — — — Consumer 6,382 — 1 2 — 3 2 — Loans receivable, gross $ 930,530 $ 1,641 $ 726 $ 274 $ 1,775 $ 4,416 $ 3 $ 3,617 Past due (In thousands) Current 30-59 days 60-89 days 90-179 days 180 days and over 30 days and over Accruing 90 days and over Non- accrual December 31, 2018 Residential 1-4 family $ 342,881 $ 1,100 $ 521 $ — $ 1,360 $ 2,981 $ — $ 2,092 Residential 5+ multifamily 35,648 — — 633 229 862 — 1,000 Construction of residential 1-4 family 12,041 — — — — — — — Home equity lines of credit 33,806 235 33 — 359 627 — 411 Residential real estate 424,376 1,335 554 633 1,948 4,470 — 3,503 Commercial 281,053 264 240 833 1,209 2,546 654 1,388 Construction of commercial 8,835 — — 141 — 141 141 252 Commercial real estate 289,888 264 240 974 1,209 2,687 795 1,640 Farm land 4,185 — — — — — — 216 Vacant land 8,280 42 — — — 42 — — Real estate secured 726,729 1,641 794 1,607 3,157 7,199 795 5,359 Commercial and industrial 162,507 — 38 — 360 398 — 360 Municipal 14,344 — — — — — — — Consumer 4,504 2 6 — — 8 — — Loans receivable, gross $ 908,084 $ 1,643 $ 838 $ 1,607 $ 3,517 $ 7,605 $ 795 $ 5,719 |
Troubled debt restructurings | Business Activities Loans December 31, 2019 December 31, 2018 (in thousands) Quantity Pre-modification balance Post-modification balance Quantity Pre-modification balance Post-modification balance Residential real estate 3 $ 1,416 $ 1,416 1 $ 68 $ 68 Commercial real estate 4 977 1,191 1 566 566 Consumer 1 — 36 — — — Troubled debt restructurings 8 $ 2,393 $ 2,643 2 $ 634 $ 634 Interest only payments to sell property 1 $ 791 $ 791 — $ — $ — Rate reduction — — — 2 634 634 Modification and Rate reduction 2 625 625 — — — Extension of new funds to pay outstanding taxes 3 259 442 — — — Modification and term extension 2 718 785 — — — Troubled debt restructurings 8 $ 2,393 $ 2,643 2 $ 634 $ 634 |
Recorded investment and number of modifications for TDRs | Modifications that Subsequently Defaulted For the twelve months ending December 31, 2019 For the twelve months ending December 31, 2018 Quantity Balance Quantity Balance Troubled Debt Restructurings Residential 1-4 family — $ — 1 $ 67 Commercial real estate 1 274 — — Total 1 $ 274 1 $ 67 |
Components of impaired loans | December 31, (in thousands) 2019 2018 Non-accrual loans, excluding troubled debt restructured loans $ 2,604 $ 4,430 Non-accrual troubled debt restructured loans 1,013 1,289 Accruing troubled debt restructured loans 7,778 6,801 Total impaired loans $ 11,395 $ 12,520 Commitments to lend additional amounts to impaired borrowers $ — $ — |
Changes in allowance for loan losses | December 31, 2019 December 31, 2018 (in thousands) Beginning Acquisition Discount Provi- Charge- Reco- Ending Beginning Provi- Charge- Reco- Ending balance Transfer sion offs veries balance balance sions offs veries balance Residential 1-4 family $ 2,149 $ 10 $ 367 $ (136 ) $ 3 $ 2,393 $ 1,862 $ 580 $ (299 ) $ 6 $ 2,149 Residential 5+ multifamily 413 — 33 — — 446 155 258 — — 413 Construction of residential 1-4 family 83 — (8 ) — — 75 75 8 — — 83 Home equity lines of credit 219 1 258 (281 ) — 197 236 (18 ) — 1 219 Residential real estate 2,864 11 650 (417 ) 3 3,111 2,328 828 (299 ) 7 2,864 Commercial 3,048 488 248 (44 ) 2 3,742 2,547 756 (259 ) 4 3,048 Construction of commercial 122 — (18 ) — — 104 80 42 — — 122 Commercial real estate 3,170 488 230 (44 ) 2 3,846 2,627 798 (259 ) 4 3,170 Farm land 33 — 14 — — 47 32 (6 ) — 7 33 Vacant land 100 — (29 ) — — 71 132 (32 ) — — 100 Real estate secured 6,167 499 865 (461 ) 5 7,075 5,119 1,588 (558 ) 18 6,167 Commercial and industrial 1,158 164 (78 ) (145 ) 46 1,145 984 255 (108 ) 27 1,158 Municipal 12 — 34 — — 46 30 (18 ) — — 12 Consumer 56 — 3 (36 ) 37 60 80 28 (81 ) 29 56 Unallocated 438 — 131 — — 569 563 (125 ) — — 438 Totals $ 7,831 $ 663 $ 955 $ (642 ) $ 88 $ 8,895 $ 6,776 $ 1,728 $ (747 ) $ 74 $ 7,831 December 31, 2017 (in thousands) Beginning balance Provision Charge-offs Reco-veries Ending balance Residential 1-4 family $ 1,926 $ 100 $ (197 ) $ 33 $ 1,862 Residential 5+ multifamily 62 93 — — 155 Construction of residential 1-4 family 91 (16 ) — — 75 Home equity lines of credit 348 (115 ) (4 ) 7 236 Residential real estate 2,427 62 (201 ) 40 2,328 Commercial 1,920 836 (453 ) 244 2,547 Construction of commercial 38 42 — — 80 Commercial real estate 1,958 878 (453 ) 244 2,627 Farm land 28 45 (43 ) 2 32 Vacant land 170 (2 ) (36 ) — 132 Real estate secured 4,583 983 (733 ) 286 5,119 Commercial and industrial 1,079 (229 ) (162 ) 296 984 Municipal 53 (23 ) — — 30 Consumer 75 63 (76 ) 18 80 Unallocated 337 226 — — 563 Totals $ 6,127 $ 1,020 $ (971 ) $ 600 $ 6,776 T |
Composition of loans receivable and allowance for loan losses | (in thousands) Collectively evaluated 1 Individually evaluated Total portfolio Loans Allowance Loans Allowance Loans Allowance December 31, 2019 Residential 1-4 family $ 340,847 $ 2,117 $ 5,452 $ 276 $ 346,299 $ 2,393 Residential 5+ multifamily 34,478 446 977 — 35,455 446 Construction of residential 1-4 family 11,889 75 — — 11,889 75 Home equity lines of credit 33,693 197 105 — 33,798 197 Residential real estate 420,907 2,835 6,534 276 427,441 3,111 Commercial 285,462 3,333 4,333 409 289,795 3,742 Construction of commercial 8,466 104 — — 8,466 104 Commercial real estate 293,928 3,437 4,333 409 298,261 3,846 Farm land 3,455 47 186 — 3,641 47 Vacant land 7,713 66 180 5 7,893 71 Real estate secured 726,003 6,385 11,233 690 737,236 7,075 Commercial and industrial 169,285 1,143 126 2 169,411 1,145 Municipal 21,914 46 — — 21,914 46 Consumer 6,349 59 36 1 6,385 60 Unallocated allowance — 569 — — — 569 Totals $ 923,551 $ 8,202 $ 11,395 $ 693 $ 934,946 $ 8,895 (in thousands) Collectively evaluated 1 Individually evaluated Total portfolio Loans Allowance Loans Allowance Loans Allowance December 31, 2018 Residential 1-4 family $ 340,946 $ 2,042 $ 4,916 $ 107 $ 345,862 $ 2,149 Residential 5+ multifamily 34,835 413 1,675 — 36,510 413 Construction of residential 1-4 family 12,041 83 — — 12,041 83 Home equity lines of credit 33,975 213 458 6 34,433 219 Residential real estate 421,797 2,751 7,049 113 428,846 2,864 Commercial 279,389 2,907 4,210 141 283,599 3,048 Construction of commercial 8,622 106 354 16 8,976 122 Commercial real estate 288,011 3,013 4,564 157 292,575 3,170 Farm land 3,969 33 216 — 4,185 33 Vacant land 8,132 98 190 2 8,322 100 Real estate secured 721,909 5,895 12,019 272 733,928 6,167 Commercial and industrial 162,404 1,158 501 — 162,905 1,158 Municipal 14,344 12 — — 14,344 12 Consumer 4,512 56 — — 4,512 56 Unallocated allowance — 438 — — — 438 Totals $ 903,169 $ 7,559 $ 12,520 $ 272 $ 915,689 $ 7,831 1 |
Credit quality segments of loans receivable and allowance for loan losses | December 31, 2019 (in thousands) Collectively evaluated Individually evaluated Total portfolio Loans Allowance Loans Allowance Loans Allowance Performing loans $ 913,648 $ 7,251 $ — $ — $ 913,648 $ 7,251 Potential problem loans 1 9,903 382 — — 9,903 382 Impaired loans — — 11,395 693 11,395 693 Unallocated allowance — 569 — — — 569 Totals $ 923,551 $ 8,202 $ 11,395 $ 693 $ 934,946 $ 8,895 December 31, 2018 (in thousands) Collectively evaluated Individually evaluated Total portfolio Loans Allowance Loans Allowance Loans Allowance Performing loans $ 895,527 $ 6,989 $ — $ — $ 895,527 $ 6,989 Potential problem loans 1 7,642 132 — — 7,642 132 Impaired loans — — 12,520 272 12,520 272 Unallocated allowance — 438 — — — 438 Totals $ 903,169 $ 7,559 $ 12,520 $ 272 $ 915,689 $ 7,831 1 |
Certain data with respect to loans individually evaluated for impairment | Impaired loans with specific allowance Impaired loans with no specific allowance (In thousands) Loan balance Specific Income Loan balance Income Book Note Average allowance recognized Book Note Average recognized December 31, 2019 Residential $ 4,111 $ 4,190 $ 3,725 $ 276 $ 162 $ 2,318 $ 3,081 $ 2,940 $ 52 Home equity lines of credit — — 52 — — 105 450 391 — Residential real estate 4,111 4,190 3,777 276 162 2,423 3,531 3,331 52 Commercial 3,309 3,335 2,574 409 90 1,024 1,733 1,747 54 Construction of commercial — — 77 — — — — 39 — Farm land — — — — — 186 329 203 — Vacant land 41 41 42 5 3 139 157 143 10 Real estate secured 7,461 7,566 6,470 690 255 3,772 5,750 5,463 116 Commercial and industrial 93 97 16 2 4 33 188 265 4 Consumer 36 36 21 1 — — — 3 — Totals $ 7,590 $ 7,699 $ 6,507 $ 693 $ 259 $ 3,805 $ 5,938 $ 5,731 $ 120 Impaired loans with specific allowance Impaired loans with no specific allowance (In thousands) Loan balance Specific Income Loan balance Income Book Note Average allowance recognized Book Note Average recognized December 31, 2018 Residential $ 2,792 $ 2,842 $ 3,429 $ 107 $ 101 $ 3,799 $ 5,140 $ 3,726 $ 102 Home equity lines of credit 47 47 158 6 2 411 498 114 2 Residential real estate 2,839 2,889 3,587 113 103 4,210 5,638 3,840 104 Commercial 1,808 1,808 2,001 141 88 2,403 3,989 2,992 75 Construction of commercial 252 252 67 16 — 102 110 295 7 Farm land — — — — — 216 432 232 — Vacant land 42 42 43 2 3 147 168 151 10 Real estate secured 4,941 4,991 5,698 272 194 7,078 10,337 7,510 196 Commercial and industrial — — 40 — — 501 596 469 5 Totals $ 4,941 $ 4,991 $ 5,738 $ 272 $ 194 $ 7,579 $ 10,933 $ 7,979 $ 201 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Notes to Financial Statements | |
Assets and liabilities as well as the costs of operating and financial leases | ($ in thousands) Classification December 31, 2019 Assets Operating Other assets $ 1,360 Finance Bank premises and equipment 1 1,503 Total Leased Assets $ 2,863 Liabilities Operating Accrued interest and other liabilities $ 1,360 Finance Finance lease obligations 1,718 Total lease liabilities $ 3,078 1 Lease cost ($ in thousands) Classification Twelve months ended December 31, 2019 Operating leases Premises and equipment $ 255 Finance leases: Amortization of leased assets Premises and equipment 200 Interest on finance leases Interest expense 173 Total lease cost $ 628 Weighted Average Remaining Lease Term Operating leases 8.2 years Financing leases 15.1 years Weighted Average Discount Rate 1 Operating leases 3.70 % Financing leases 8.41 % 1 |
Present value of the net minimum lease payments | Future minimum lease payments (in thousands) Operating Leases Finance Leases 2020 $ 246 $ 186 2021 228 192 2022 199 195 2023 134 198 2024 129 200 Thereafter 653 1,980 Total future minimum lease payments 1,589 2,951 Less amount representing interest (229 ) (1,233 ) Total present value of net future minimum lease payments $ 1,360 $ 1,718 |
MORTGAGE SERVICING RIGHTS (Tabl
MORTGAGE SERVICING RIGHTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract] | |
Balance of loans serviced for others and fair value of mortgage servicing rights | December 31, (in thousands) 2019 2018 Residential mortgage loans serviced for others $ 106,255 $ 111,378 Fair value of mortgage servicing rights 813 951 |
Changes in mortgage servicing rights | Years ended December 31, (in thousands) 2019 2018 2017 Mortgage Servicing Rights Balance, beginning of period $ 228 $ 233 $ 339 Originated 61 43 63 Amortization (1) (51 ) (48 ) (169 ) Balance, end of period 238 228 233 Valuation Allowance Balance, beginning of period — — (23 ) Decrease (increase) in impairment reserve (1) — — 23 Balance, end of period — — — Mortgage servicing rights, net $ 238 $ 228 $ 233 (1) Amortization expense and changes in the impairment reserve are recorded in mortgage servicing, net. |
PLEDGED ASSETS (Tables)
PLEDGED ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Guarantees [Abstract] | |
Securities and loans pledged to secure public and trust deposits, securities sold under agreements to repurchase, FHLBB advances and credit facilities available | December 31, (in thousands) 2019 2018 Securities available-for-sale (at fair value) $ 52,845 $ 80,991 Loans receivable (at book value) 434,329 328,674 Total pledged assets $ 487,174 $ 409,665 |
BANK PREMISES AND EQUIPMENT (Ta
BANK PREMISES AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Components of premises and equipment | December 31, (in thousands) 2019 2018 Land $ 2,762 $ 2,593 Buildings and improvements 14,878 13,458 Leasehold improvements 1,553 1,553 Finance leases 1,798 3,273 Furniture, fixtures, equipment and software 9,370 8,978 Fixed assets in process 768 790 Total cost 31,129 30,645 Accumulated depreciation and amortization (13,744 ) (12,470 ) Bank premises and equipment, net $ 17,385 $ 18,175 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in carrying values of goodwill and intangible assets | Years ended December 31, (in thousands) 2019 2018 2017 Goodwill (1) Balance, beginning of period $ 13,815 $ 13,815 $ 12,552 Additions — — 1,263 Impairment — — — Balance, end of period $ 13,815 $ 13,815 $ 13,815 Core Deposit Intangibles Cost, beginning of period $ 5,881 $ 5,881 $ 5,248 Additions — — 633 Cost, end of period 5,881 5,881 5,881 Amortization, beginning of period (4,498 ) (4,044 ) (3,511 ) Amortization (388 ) (454 ) (533 ) Amortization, end of period (4,886 ) (4,498 ) (4,044 ) Core deposit intangibles, net $ 995 $ 1,383 $ 1,837 (1) Not subject to amortization. |
Estimated annual amortization expense of core deposit intangibles | December 31, (in thousands) CDI amortization 2020 $ 321 2021 255 2022 192 2023 128 2024 61 2025 25 2026 13 Total $ 995 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Banking and Thrift, Interest [Abstract] | |
Scheduled maturities of time certificates of deposit | December 31, (in thousands) CD maturities 2020 $ 86,025 2021 19,342 2022 9,749 2023 4,937 2024 7,671 Total $ 127,724 |
Total amount and scheduled maturities of time certificates of deposit in denominations of $250,000 or more | Years ended December 31, (in thousands) 2019 2018 Within three months $ 4,603 $ 1,128 After three through six months 3,799 1,359 After six through twelve months 6,628 3,785 Over one year 6,750 9,726 Total $ 21,780 $ 15,998 |
SECURITIES SOLD UNDER AGREEME_2
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Banking and Thrift, Interest [Abstract] | |
Securities sold under repurchase agreements | December 31, (dollars in thousands) 2019 2018 Repurchase agreements, ending balance $ 8,530 $ 4,104 Repurchase agreements, average balance during period 4,913 3,340 Book value of collateral 9,031 11,194 Market value of collateral 9,246 11,276 Weighted average rate during period 0.48 % 0.35 % Weighted average maturity 1 day 1 day |
FEDERAL HOME LOAN BANK OF BOS_2
FEDERAL HOME LOAN BANK OF BOSTON ADVANCES AND OTHER BORROWED FUNDS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Banking and Thrift, Interest [Abstract] | |
Federal Home Loan Bank of Boston advances | December 31, 2019 December 31, 2018 Years ended December 31, (dollars in thousands) Total (1) Rate (2) Total (1) Rate (2) Overnight $ — — % $ 9,500 2.72 % 2019 — — 36,767 3.19 2020 44,899 2.14 14,899 2.18 2021 5,988 2.45 5,988 2.45 Total $ 50,887 2.18 % $ 67,154 2.94 % (1) Net of modification costs (2) Weighted average rate based on scheduled maturity dates. |
NET DEFERRED TAX ASSET AND IN_2
NET DEFERRED TAX ASSET AND INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Components of income tax provision | Years ended December 31, (in thousands) 2019 2018 2017 Federal $ 2,406 $ 1,986 $ 1,831 State 344 217 195 Current provision 2,750 2,203 2,026 Federal (317 ) (455 ) 840 State (74 ) (39 ) 48 Deferred (benefit) expense (391 ) (494 ) 888 Income tax provision $ 2,359 $ 1,709 $ 2,914 |
Reconciliation of expected federal statutory tax to income tax provision | Years ended December 31, 2019 2018 2017 Income tax at statutory federal tax rate 21.00 % 21.00 % 34.00 % State tax, net of federal tax benefit 1.58 1.37 1.74 Tax exempt income and dividends received deduction (3.82 ) (3.84 ) (7.00 ) Remeasurement of net deferred tax assets — — 4.85 BOLI interest and gain (0.61 ) (1.35 ) (1.34 ) Other (0.67 ) (0.95 ) (0.47 ) Change in valuation allowance — — — Effective income tax rates 17.48 % 16.23 % 31.78 % |
Components of net deferred tax assets | December 31, (in thousands) 2019 2018 Allowance for loan losses $ 2,174 $ 1,916 Interest on non-performing loans 244 233 Accrued deferred compensation 493 334 Post-retirement benefits 11 11 Other real estate owned write-downs 30 — Restricted stock awards 220 162 Net unrealized holding loss on available for sale securities — 58 Write-down of securities 2 4 Other 139 282 Gross deferred tax assets 3,313 3,000 Deferred loan costs, net (329 ) (344 ) Mark-to-market purchase accounting adjustments (44 ) (37 ) Goodwill and core deposit intangible asset (570 ) (545 ) Accelerated depreciation (703 ) (698 ) Other real estate owned write-downs — (45 ) Mortgage servicing rights (58 ) (55 ) Net unrealized holding gains on available-for-sale securities (360 ) — Gross deferred tax liabilities (2,064 ) (1,724 ) Net deferred tax asset $ 1,249 $ 1,276 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Actual regulatory capital position and minimum capital requirements | Actual Minimum Capital Required For Capital Adequacy Minimum Capital Required For Capital Adequacy Plus Required Capital Conservation Buffer Minimum To Be Well Capitalized Under (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio December 30, 2019 Total Capital (to risk-weighted assets) $ 114,421 12.84 % $ 71,278 8.0 % $ 93,553 10.5 % $ 89,098 10.0 % Tier 1 Capital (to risk-weighted assets) 105,430 11.83 53,459 6.0 75,733 8.5 71,278 8.0 Common Equity Tier 1 Capital (to risk-weighted assets) 105,430 11.83 40,094 4.5 62,368 7.0 57,914 6.5 Tier 1 Capital (to average assets) $ 105,430 9.60 43,944 4.0 43,944 4.0 54,930 5.0 December 31, 2018 Total Capital (to risk-weighted assets) $ 104,013 12.09 % $ 68,848 8.0 % $ 90,362 10.5 % $ 86,059 10.0 % Tier 1 Capital (to risk-weighted assets) 96,092 11.17 51,636 6.0 73,150 8.5 68,848 8.0 Common Equity Tier 1 Capital (to risk-weighted assets) 96,092 11.17 38,727 4.5 60,242 7.0 55,939 6.5 Tier 1 Capital (to average assets) $ 96,092 8.83 $ 43,527 4.0 $ 43,527 4.0 $ 54,409 5.0 |
LONG TERM INCENTIVE PLANS (Tabl
LONG TERM INCENTIVE PLANS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Amount of cumulatively granted restricted stock awards under 2011 and 2017 Long-Term Incentive Plans | Weighted Average Weighted Average Year Ended December 31, 2019 Grant Price 2018 Grant Price Beginning of Year 39,434 $ 37.73 27,024 $ 34.62 Granted 15,130 39.70 13,210 44.30 Vested (14,228 ) 30.33 — — Forfeited (710 ) 42.81 (800 ) 40.99 End of Year 39,626 $ 41.04 39,434 $ 37.73 |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Summary of status of Salisbury's outstanding stock options | Year ended December 31, 2019 Number of options Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value Beginning of period 22,545 $ 17.04 Granted — — Exercised (4,725 ) 17.04 Forfeited or expired — — End of period 17,820 $ 17.04 4.00 $ 510,187 Number of options Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value Beginning of period 40,500 $ 21.73 Granted — — Exercised (9,155 ) 24.26 Forfeited or expired (8,800 ) 31.11 End of period 22,545 $ 17.04 5.00 $ 456,000 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Changes in loans to executive officers, directors and their related associates | Years ended December 31, (in thousands) 2019 2018 Balance, beginning of period $ 9,432 $ 7,651 Advances 8,010 4,374 Repayments (6,787 ) (2,593 ) Balance, end of period $ 10,655 $ 9,432 |
OTHER COMPREHENSIVE INCOME (L_2
OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Reconciliation of changes in components of other comprehensive loss, including amount of income tax benefit allocated to each component of other comprehensive loss | Years ended December 31, (in thousands) 2019 2018 2017 Other comprehensive income (loss) Net unrealized gains (losses) on securities available-for-sale $ 2,258 $ (202 ) $ (318 ) Reclassification of net realized gains in net income (1) (263 ) (318 ) (178 ) Unrealized gains (losses) on securities available-for-sale 1,995 (520 ) (496 ) Income tax (expense) benefit (418 ) 105 198 Unrealized gains (losses) on securities available-for-sale, net of tax 1,577 (415 ) (298 ) Other comprehensive income (loss) $ 1,577 $ (415 ) $ (298 ) (1) |
Components of accumulated other comprehensive income | December 31, (dollars in thousands) 2019 2018 Unrealized gains (losses) on securities available-for-sale, net of tax $ 1,357 $ (220 ) Accumulated other comprehensive income (loss) $ 1,357 $ (220 |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments, All Other Investments [Abstract] | |
Financial instrument liabilities with off-balance sheet credit risk | December 31, (dollars in thousands) 2019 2018 Residential $ 5,815 $ 6,751 Home equity lines of credit 28,160 29,872 Commercial 14,858 19,051 Land 1,014 14 Real estate secured 49,847 55,688 Commercial and industrial 78,286 77,219 Municipal 2,499 250 Consumer 2,148 1,583 Unadvanced portions of loans 132,780 134,740 Commitments to originate loans 33,781 18,397 Letters of credit 4,657 3,865 Total $ 171,218 $ 157,002 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Assets measured at fair value | Fair Value Measurements Using Assets at (in thousands) Level 1 Level 2 Level 3 fair value December 31, 2019 Assets at fair value on a recurring basis U.S. Government Agency notes $ — $ 4,644 $ — $ 4,644 Municipal bonds — 27,193 — 27,193 Mortgage-backed securities: U.S. Government agencies and U.S. Government-sponsored enterprises — 29,357 — 29,357 Collateralized mortgage obligations: U.S. Government agencies — 25,499 — 25,499 Corporate bonds — 5,108 — 5,108 Securities available-for-sale $ — $ 91,801 $ — $ 91,801 CRA mutual funds 882 — — 882 Assets at fair value on a non-recurring basis Collateral dependent impaired loans $ — $ — $ 1,593 $ 1,593 Other real estate owned $ — $ — $ 314 $ 314 December 31, 2018 Assets at fair value on a recurring basis U.S. Government Agency notes $ — $ 7,670 $ — $ 7,670 Municipal bonds — 5,379 — 5,379 Mortgage-backed securities: U.S. Government agencies and U.S. Government-sponsored enterprises — 57,446 — 57,446 Collateralized mortgage obligations: U.S. Government agencies — 17,747 — 17,747 Corporate bonds — 3,576 — 3,576 Securities available-for-sale $ — $ 91,818 $ — $ 91,818 CRA mutual funds 836 — — 836 Assets at fair value on a non-recurring basis Collateral dependent impaired loans $ — $ — $ 4,238 $ 4,238 Other real estate owned $ — $ — $ 1,810 $ 1,810 |
Carrying value and estimated fair values of financial instruments | Carrying Estimated Fair value measurements using (In thousands) value fair value Level 1 Level 2 Level 3 December 31, 2019 Financial Assets Cash and cash equivalents $ 26,885 $ 26,885 $ 26,885 $ — $ — Interest bearing time deposits with financial institutions 750 750 750 — — Securities available-for-sale 91,801 91,801 — 91,801 — CRA mutual fund 882 882 882 — — Federal Home Loan Bank of Boston stock 3,242 3,242 3,242 — — Loans held-for-sale 332 334 — — 334 Loans receivable, net 927,413 933,287 — — 933,287 Accrued interest receivable 3,415 3,415 3,415 — — Cash surrender value of life insurance policies 20,580 20,580 20,580 — — Financial Liabilities Demand (non-interest-bearing) $ 237,852 $ 237,852 $ — $ 237,852 $ — Demand (interest-bearing) 153,314 153,314 — 153,314 — Money market 239,504 239,504 — 239,504 — Savings and other 161,112 161,112 — 161,112 — Certificates of deposit 127,724 128,629 — 128,629 — Deposits 919,506 920,411 — 920,411 — Repurchase agreements 8,530 8,530 — 8,530 — FHLBB advances 50,887 51,028 — 51,028 — Subordinated debt 9,859 10,113 10,113 — — Note payable 246 251 — 251 — Finance lease liability 1,718 1,967 — — 1,967 Accrued interest payable 78 78 78 — — December 31, 2018 Financial Assets Cash and cash equivalents $ 58,445 $ 58,445 $ 58,445 $ — $ — Securities available-for-sale, net 91,818 91,818 — 91,818 — CRA mutual fund 836 836 836 — — Federal Home Loan Bank of Boston stock 4,496 4,496 4,496 — — Loans receivable, net 909,279 886,222 — — 886,222 Accrued interest receivable 3,148 3,148 3,148 — — Cash surrender value of life insurance policies 14,438 14,438 14,438 — — Financial Liabilities Demand (non-interest-bearing) $ 228,448 $ 228,448 $ — $ 228,448 $ — Demand (interest-bearing) 153,586 153,586 — 153,586 — Money market 204,219 204,219 — 204,219 — Savings and other 178,807 178,807 — 178,807 — Certificates of deposit 161,679 162,013 — 162,013 — Deposits 926,739 927,073 — 927,073 — Repurchase agreements 4,104 4,104 — 4,104 — FHLBB advances 67,154 67,231 — 67,231 — Subordinated debt 9,835 10,006 10,006 — — Note payable 280 288 — 288 — Finance lease liability 3,081 3,339 — — 3,339 Accrued interest payable 237 237 237 — — |
SALISBURY BANCORP, INC. (PARE_2
SALISBURY BANCORP, INC. (PARENT ONLY) CONDENSED FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Unconsolidated balance sheets of Salisbury Bancorp, Inc. | Balance Sheets 2019 2018 Assets Cash and due from banks $ 2,273 $ 2,105 Investment in bank subsidiary 121,027 110,525 Other assets 252 689 Total Assets $ 123,552 $ 113,319 Liabilities and Shareholders' Equity Subordinated debt $ 9,859 $ 9,835 Other liabilities 38 25 Shareholders' equity 113,655 103,459 Total Liabilities and Shareholders' Equity $ 123,552 $ 113,319 |
Unconsolidated statements of income of Salisbury Bancorp, Inc. | Statements of Income 2019 2018 2017 Dividends from subsidiary $ 3,546 $ 3,529 $ 3,691 Interest income 10 10 8 Interest expense 624 624 624 Non-interest expenses 417 435 530 Income before taxes and equity in undistributed net income of subsidiary 2,515 2,480 2,545 Income tax benefit 252 256 421 Income before equity in undistributed net income of subsidiary 2,767 2,736 2,966 Equity in undistributed net income of subsidiary 8,369 6,088 3,290 Net income $ 11,136 $ 8,824 $ 6,256 |
Unconsolidated statements of cash flows of Salisbury Bancorp, Inc. | Statements of Cash Flows 2019 2018 2017 Net income $ 11,136 $ 8,824 $ 6,256 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed net income of subsidiary (8,369 ) (6,088 ) (3,290 ) Other 474 (239 ) (410 ) Net cash provided by operating activities 3,241 2,497 2,556 Investing Activities Investment in bank — — — Net cash utilized by investing activities — — — Financing Activities Common stock dividends paid (3,155 ) (3,133 ) (3,113 ) Proceeds from issuance of common stock 82 222 395 Net cash (utilized) by financing activities (3,073 ) (2,911 ) (2,718 ) Net increase (decrease) in cash and cash equivalents 168 (414 ) (162 ) Cash and cash equivalents, beginning of period 2,105 2,519 2,681 Cash and cash equivalents, end of period $ 2,273 $ 2,105 $ 2,519 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Computation of earnings per share | Years ended December 31, (in thousands, except per share amounts) 2019 2018 2017 Net income applicable to common shareholders $ 11,136 $ 8,824 $ 6,256 Less: Undistributed earnings allocated to participating securities (160 ) (111 ) (55 ) Net income allocated to common stock $ 10,976 $ 8,713 $ 6,201 Weighted average common shares issued 2,817 2,798 2,779 Less: Unvested restricted stock awards (35 ) (35 ) (24 ) Weighted average common shares outstanding used to calculate basic earnings per common share 2,782 2,763 2,755 Add: Dilutive effect of stock options 12 17 19 Weighted average common shares outstanding used to calculate diluted earnings per common share 2,794 2,780 2,774 Earnings per common share (basic) $ 3.95 $ 3.15 $ 2.25 Earnings per common share (diluted) $ 3.93 $ 3.13 $ 2.24 |
SELECTED QUARTERLY CONSOLIDAT_2
SELECTED QUARTERLY CONSOLIDATED FINANCIAL DATA (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected quarterly consolidated financial data (unaudited) | Year ended December 31, 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Statement of Income Interest and dividend income $ 10,854 $ 10,832 $ 11,023 $ 10,705 Interest expense 2,417 2,488 2,356 2,040 Net interest and dividend income 8,437 8,344 8,667 8,665 Provision for loan losses 294 151 94 417 Trust and Wealth Advisory 906 1,044 1,023 1,022 Service charges and fees 920 1,012 1,003 1,092 Gains on sales of mortgage loans, net 7 1 42 67 Mortgage servicing, net 76 80 76 75 Gains (Losses) on CRA mutual fund 11 12 6 (4 ) (Losses) Gains on sales of available -for-sale- securities, net (9 ) 281 (9 ) — BOLI income and gains 79 87 86 139 Other 37 31 29 28 Non-interest income 2,027 2,548 2,256 2,419 Non-interest expense 7,211 7,439 7,184 7,080 Income before income taxes 2,959 3,302 3,645 3,587 Income tax provision 525 599 657 578 Net income 2,434 2,703 2,988 3,009 Net income allocated to common stock 2,408 2,671 2,940 2,960 Financial Condition Total assets 1,118,925 1,119,212 1,144,240 1,112,448 Loans, net 911,188 910,573 915,083 927,413 Allowance for loan losses 8,750 8,887 8,846 8,895 Securities 102,479 103,857 98,270 95,925 Deposits 941,969 950,723 966,178 919,506 Repurchase agreements 2,951 6,308 8,588 8,530 FHLBB advances 47,712 32,769 37,828 50,887 Shareholders' equity 106,109 108,948 111,580 113,655 Non-performing assets 7,130 5,463 5,687 3,935 Per Common Share Data Earnings, basic $ 0.87 $ 0.96 $ 1.06 $ 1.06 Earnings, diluted 0.86 0.95 1.05 1.06 Cash dividends declared 0.28 0.28 0.28 0.28 Cash dividends paid 0.28 0.28 0.28 0.28 Book value 37.81 38.59 39.52 40.22 Market price: (a) High 44.20 42.60 40.00 47.05 Low 35.25 37.20 35.26 37.42 Statistical Data Net interest margin (fully tax equivalent) 3.28 % 3.19 % 3.29 % 3.34 % Efficiency ratio (fully tax equivalent) 66.15 65.81 62.90 61.81 Return on average assets 0.89 0.97 1.05 1.07 Return on average shareholders' equity 9.45 10.07 10.73 10.56 Weighted average common shares outstanding, basic 2,777 2,780 2,783 2,781 Weighted average common shares outstanding, diluted 2,789 2,793 2,795 2,794 (a) The above market prices reflect inter-dealer prices, without retail markup, markdown or commissions, and may not necessarily represent actual transactions. Year ended December 31, 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Statement of Income Interest and dividend income $ 9,300 $ 9,749 $ 10,516 $ 10,807 Interest expense 1,306 1,706 2,016 2,192 Net interest and dividend income 7,993 8,043 8,500 8,615 Provision (benefit) for loan losses 325 467 378 558 Trust and Wealth Advisory 894 949 936 921 Service charges and fees 868 892 932 1,025 Gains (Losses) on sales of mortgage loans, net 18 (1 ) 21 51 Mortgage servicing, net 83 84 84 57 (Losses) Gains on CRA mutual fund (13 ) (7 ) (6 ) 8 (Losses) Gains on sales of available -for-sale- securities, net (2 ) 17 — 302 BOLI income and gains 82 82 83 432 Other 45 42 38 28 Non-interest income 1,975 2,058 2,088 2,824 Non-interest expense 7,180 7,417 7,329 7,909 Income before income taxes 2,463 2,217 2,881 2,972 Income tax provision 446 318 537 408 Net income 2,017 1,899 2,344 2,564 Net income allocated to common stock 1,997 1,877 2,311 2,528 Financial Condition Total assets 1,014,934 1,096,780 1,098,715 1,121,554 Loans, net 830,370 872,796 898,625 909,279 Allowance for loan losses 7,058 7,381 7,745 7,831 Securities 84,878 90,870 101,591 97,150 Deposits 831,837 897,481 902,161 926,739 Repurchase agreements 3,962 1,691 6,658 4,104 FHLBB advances 62,480 79,538 67,596 67,154 Shareholders' equity 98,097 99,180 100,767 103,459 Non-performing assets 5,761 6,359 8,513 8,324 Per Common Share Data Earnings, basic $ 0.72 $ 0.68 $ 0.84 $ 0.91 Earnings, diluted 0.71 0.68 0.83 0.91 Cash dividends declared 0.28 0.28 0.28 0.28 Cash dividends paid 0.28 0.28 0.28 0.28 Book value 35.20 35.38 35.93 36.86 Market price: (a) High 49.85 46.70 48.44 43.04 Low 44.00 38.15 40.36 35.25 Statistical Data Net interest margin (fully tax equivalent) 3.46 % 3.31 % 3.29 % 3.34 % Efficiency ratio (fully tax equivalent) 69.35 70.87 66.91 69.13 Return on average assets 0.81 0.69 0.85 0.92 Return on average shareholders' equity 8.33 7.68 9.26 9.99 Weighted average common shares outstanding, basic 2,759 2,761 2,764 2,766 Weighted average common shares outstanding, diluted 2,780 2,779 2,779 2,779 (a) The above market prices reflect inter-dealer prices, without retail markup, markdown or commissions, and may not necessarily represent actual transactions. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Bank Premises and Equipment (Details Narrative) | 12 Months Ended |
Dec. 31, 2019 | |
Building/Improvements | |
Expected useful life | 39 years |
Land Improvements | |
Expected useful life | 15 years |
Furniture and Fixtures | |
Expected useful life | 7 years |
Computer Equipment | |
Expected useful life | 5 years |
Software | |
Expected useful life | 3 years |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible Assets (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Purchase of branch office in 2001 | ||
Goodwill from purchases and acquisitions | $ 2,400 | $ 2,400 |
Canaan National Bancorp, Inc. acquisition in 2004 | ||
Goodwill from purchases and acquisitions | 7,200 | 7,200 |
Branch office purchase in New York State in 2007 | ||
Goodwill from purchases and acquisitions | 319 | 319 |
Riverside Bank acquisition in December 2014 | ||
Goodwill from purchases and acquisitions | 2,700 | 2,700 |
Purchase of additional branch office in New York in 2017 | ||
Goodwill from purchases and acquisitions | $ 1,300 | $ 1,300 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Summary Of Significant Accounting Policies | ||
Recorded investment in residential mortgage loans collateralized by residential real estate in process of foreclosure | $ 100 | $ 500 |
Advertising expenses | $ 480 | $ 608 |
MERGERS AND ACQUISITIONS - Accr
MERGERS AND ACQUISITIONS - Accretable yield for ASC 310-30 acquired loan portfolio (Details) - ASC 310-30 acquired loan portfolio accretable yield - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Balance at beginning of period | $ 204 | $ 517 |
Acquisitions | ||
Accretion | (204) | (164) |
Disposals | (149) | |
Reclassification from non-accretable to accretable | ||
Balance at end of period | $ 204 |
MERGERS AND ACQUISITIONS (Detai
MERGERS AND ACQUISITIONS (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Business Combinations [Abstract] | ||
ASC 310-30 loans, outstanding balance | $ 2,100 | |
ASC 310-30 loans, carrying value | $ 1,900 |
SECURITIES - Composition of Sec
SECURITIES - Composition of Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Amortized cost basis (1) | ||
Available-for-sale | ||
U.S. Government Agency notes | $ 4,520 | $ 7,590 |
Municipal bonds | 26,562 | 5,334 |
Mortgage-backed securities, U.S. Government agencies and U.S. Government-sponsored enterprises | 28,961 | 57,837 |
Collateralized mortgage obligations, U.S. Government Agencies | 25,041 | 17,835 |
Corporate bonds | 5,000 | 3,500 |
Total securities available-for-sale | 90,084 | 92,096 |
Non-marketable securities | ||
Federal Home Loan Bank of Boston stock | 3,242 | 4,496 |
Gross unrealized gains | ||
Available-for-sale | ||
U.S. Government Agency notes | 125 | 83 |
Municipal bonds | 704 | 45 |
Mortgage-backed securities, U.S. Government agencies and U.S. Government-sponsored enterprises | 420 | 170 |
Collateralized mortgage obligations, U.S. Government Agencies | 468 | 85 |
Corporate bonds | 108 | 76 |
Total securities available-for-sale | 1,825 | 459 |
Non-marketable securities | ||
Federal Home Loan Bank of Boston stock | ||
Gross unrealized losses | ||
Available-for-sale | ||
U.S. Government Agency notes | 1 | 3 |
Municipal bonds | 73 | |
Mortgage-backed securities, U.S. Government agencies and U.S. Government-sponsored enterprises | 24 | 561 |
Collateralized mortgage obligations, U.S. Government Agencies | 10 | 173 |
Corporate bonds | ||
Total securities available-for-sale | 108 | 737 |
Non-marketable securities | ||
Federal Home Loan Bank of Boston stock | ||
Fair value | ||
Available-for-sale | ||
U.S. Government Agency notes | 4,644 | 7,670 |
Municipal bonds | 27,193 | 5,379 |
Mortgage-backed securities, U.S. Government agencies and U.S. Government-sponsored enterprises | 29,357 | 57,446 |
Collateralized mortgage obligations, U.S. Government Agencies | 25,499 | 17,747 |
Corporate bonds | 5,108 | 3,576 |
Total securities available-for-sale | 91,801 | 91,818 |
CRA mutual funds | 882 | 836 |
Non-marketable securities | ||
Federal Home Loan Bank of Boston stock | $ 3,242 | $ 4,496 |
SECURITIES - Sales of securitie
SECURITIES - Sales of securities available-for-sale and gross gains and gross losses realized (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |||
Proceeds | $ 41,814 | $ 10,036 | $ 199 |
Gains realized | 371 | 361 | 192 |
Losses realized | (108) | (43) | (14) |
Net gains realized | 263 | 318 | 178 |
Income tax provision | $ 55 | $ 67 | $ 61 |
SECURITIES - Aggreggate fair va
SECURITIES - Aggreggate fair value and gross unrealized loss of securities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Less Than 12 Months, Fair value | ||
Available-for-sale | ||
U.S. Government Agency notes | $ 34 | |
Municipal bonds | 6,273 | |
Mortgage-backed securities: U.S. Government agencies and U.S. Government- sponsored enterprises | 5,781 | 13,063 |
Collateralized mortgage obligations: U.S. Government agencies | 1,438 | |
Total temporarily impaired securities | 13,492 | 13,097 |
Less Than 12 Months, Unrealized losses | ||
Available-for-sale | ||
U.S. Government Agency notes | ||
Municipal bonds | 73 | |
Mortgage-backed securities: U.S. Government agencies and U.S. Government- sponsored enterprises | 22 | 175 |
Collateralized mortgage obligations: U.S. Government agencies | 10 | |
Total temporarily impaired securities | 105 | 175 |
12 Months or Longer, Fair value | ||
Available-for-sale | ||
U.S. Government Agency notes | 195 | 532 |
Municipal bonds | ||
Mortgage-backed securities: U.S. Government agencies and U.S. Government- sponsored enterprises | 704 | 26,777 |
Collateralized mortgage obligations: U.S. Government agencies | 8,281 | |
Total temporarily impaired securities | 899 | 35,590 |
12 Months or Longer, Unrealized losses | ||
Available-for-sale | ||
U.S. Government Agency notes | 1 | 3 |
Municipal bonds | ||
Mortgage-backed securities: U.S. Government agencies and U.S. Government- sponsored enterprises | 2 | 386 |
Collateralized mortgage obligations: U.S. Government agencies | 173 | |
Total temporarily impaired securities | 3 | 562 |
Total, Fair value | ||
Available-for-sale | ||
U.S. Government Agency notes | 195 | 566 |
Municipal bonds | 6,273 | |
Mortgage-backed securities: U.S. Government agencies and U.S. Government- sponsored enterprises | 6,485 | 39,840 |
Collateralized mortgage obligations: U.S. Government agencies | 1,438 | 8,281 |
Total temporarily impaired securities | 14,391 | 48,687 |
Total, Unrealized losses | ||
Available-for-sale | ||
U.S. Government Agency notes | 1 | 3 |
Municipal bonds | 73 | |
Mortgage-backed securities: U.S. Government agencies and U.S. Government- sponsored enterprises | 24 | 561 |
Collateralized mortgage obligations: U.S. Government agencies | 10 | 173 |
Total temporarily impaired securities | $ 108 | $ 737 |
SECURITIES - Amortized cost, fa
SECURITIES - Amortized cost, fair value and tax equivalent yield of securities (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
U.S. Government agency notes - After 5 years but within 10 years | |
Amortized cost | $ 2,497 |
Fair value | $ 2,551 |
Yield | 3.48% |
U.S. Government agency notes - Total | |
Amortized cost | $ 2,497 |
Fair value | $ 2,551 |
Yield | 3.48% |
Municipal bonds - Within 1 year | |
Amortized cost | $ 60 |
Fair value | $ 60 |
Yield | 2.63% |
Municipal bonds - After 5 years but within 10 years | |
Amortized cost | $ 1,734 |
Fair value | $ 1,833 |
Yield | 3.16% |
Municipal bonds - After 10 years | |
Amortized cost | $ 24,768 |
Fair value | $ 25,300 |
Yield | 3.48% |
Municipal bonds - Total | |
Amortized cost | $ 26,562 |
Fair value | $ 27,193 |
Yield | 3.46% |
Corporate bonds - After 5 years but within 10 years | |
Amortized cost | $ 5,000 |
Fair value | $ 5,108 |
Yield | 5.21% |
Mortgage-backed securities, CMO securities and SBA securities | |
Amortized cost | $ 56,025 |
Fair value | $ 56,949 |
Yield | 2.85% |
Securities available-for-sale | |
Amortized cost | $ 90,084 |
Fair value | $ 91,801 |
Yield | 3.17% |
LOANS - Composition of loans re
LOANS - Composition of loans receivable and loans held-for-sale (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Loans receivable, net | $ 927,413 | $ 909,279 |
Total | ||
Residential 1-4 family | 346,299 | 345,862 |
Residential 5+ multifamily | 35,455 | 36,510 |
Construction of residential 1-4 family | 11,889 | 12,041 |
Home equity lines of credit | 33,798 | 34,433 |
Residential real estate | 427,441 | 428,846 |
Commercial | 289,795 | 283,599 |
Construction of commercial | 8,466 | 8,976 |
Commercial real estate | 298,261 | 292,575 |
Farm land | 3,641 | 4,185 |
Vacant land | 7,893 | 8,322 |
Real estate secured | 737,236 | 733,928 |
Commercial and industrial | 169,411 | 162,905 |
Municipal | 21,914 | 14,344 |
Consumer | 6,385 | 4,512 |
Loans receivable, gross | 934,946 | 915,689 |
Deferred loan origination fees and costs, net | 1,362 | 1,421 |
Allowance for loan losses | (8,895) | (7,831) |
Loans receivable, net | 927,413 | 909,279 |
Loans held-for-sale | ||
Residential 1-4 family | $ 332 |
LOANS - Composition of loans _2
LOANS - Composition of loans receivable by risk rating grade (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Pass | ||
Residential 1-4 family | $ 337,302 | $ 337,520 |
Residential 5+ multifamily | 33,619 | 34,726 |
Construction of residential 1-4 family | 11,889 | 12,041 |
Home equity lines of credit | 33,381 | 33,728 |
Residential real estate | 416,191 | 418,015 |
Commercial | 271,708 | 270,461 |
Construction of commercial | 8,225 | 8,482 |
Commercial real estate | 279,933 | 278,943 |
Farm land | 1,934 | 3,969 |
Vacant land | 7,834 | 8,253 |
Real estate secured | 705,892 | 709,180 |
Commercial and industrial | 167,458 | 159,127 |
Municipal | 21,914 | 14,344 |
Consumer | 6,344 | 4,502 |
Loans receivable, gross | 901,608 | 887,153 |
Special mention | ||
Residential 1-4 family | 4,278 | 4,281 |
Residential 5+ multifamily | 99 | 784 |
Construction of residential 1-4 family | ||
Home equity lines of credit | 312 | 265 |
Residential real estate | 4,689 | 5,330 |
Commercial | 10,964 | 4,530 |
Construction of commercial | ||
Commercial real estate | 10,964 | 4,530 |
Farm land | ||
Vacant land | 59 | 69 |
Real estate secured | 15,712 | 9,929 |
Commercial and industrial | 443 | 2,672 |
Municipal | ||
Consumer | 3 | 10 |
Loans receivable, gross | 16,158 | 12,611 |
Substandard | ||
Residential 1-4 family | 4,719 | 4,061 |
Residential 5+ multifamily | 1,737 | 1,000 |
Construction of residential 1-4 family | ||
Home equity lines of credit | 105 | 440 |
Residential real estate | 6,561 | 5,501 |
Commercial | 7,052 | 8,608 |
Construction of commercial | 241 | 494 |
Commercial real estate | 7,293 | 9,102 |
Farm land | 1,707 | 216 |
Vacant land | ||
Real estate secured | 15,561 | 14,819 |
Commercial and industrial | 1,510 | 1,106 |
Municipal | ||
Consumer | 38 | |
Loans receivable, gross | 17,109 | 15,925 |
Doubtful | ||
Residential 1-4 family | ||
Residential 5+ multifamily | ||
Construction of residential 1-4 family | ||
Home equity lines of credit | ||
Residential real estate | ||
Commercial | 71 | |
Construction of commercial | ||
Commercial real estate | 71 | |
Farm land | ||
Vacant land | ||
Real estate secured | 71 | |
Commercial and industrial | ||
Municipal | ||
Consumer | ||
Loans receivable, gross | 71 | |
Loss | ||
Residential 1-4 family | ||
Residential 5+ multifamily | ||
Construction of residential 1-4 family | ||
Home equity lines of credit | ||
Residential real estate | ||
Commercial | ||
Construction of commercial | ||
Commercial real estate | ||
Farm land | ||
Vacant land | ||
Real estate secured | ||
Commercial and industrial | ||
Municipal | ||
Consumer | ||
Loans receivable, gross | ||
Total | ||
Residential 1-4 family | 346,299 | 345,862 |
Residential 5+ multifamily | 35,455 | 36,510 |
Construction of residential 1-4 family | 11,889 | 12,041 |
Home equity lines of credit | 33,798 | 34,433 |
Residential real estate | 427,441 | 428,846 |
Commercial | 289,795 | 283,599 |
Construction of commercial | 8,466 | 8,976 |
Commercial real estate | 298,261 | 292,575 |
Farm land | 3,641 | 4,185 |
Vacant land | 7,893 | 8,322 |
Real estate secured | 737,236 | 733,928 |
Commercial and industrial | 169,411 | 162,905 |
Municipal | 21,914 | 14,344 |
Consumer | 6,385 | 4,512 |
Loans receivable, gross | $ 934,946 | $ 915,689 |
LOANS - Composition of loans _3
LOANS - Composition of loans receivable by delinquency status (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current | ||
Residential 1-4 family | $ 344,085 | $ 342,881 |
Residential 5+ multifamily | 34,594 | 35,648 |
Construction of residential 1-4 family | 11,889 | 12,041 |
Home equity lines of credit | 33,522 | 33,806 |
Residential real estate | 424,090 | 424,376 |
Commercial | 289,103 | 281,053 |
Construction of commercial | 8,466 | 8,835 |
Commercial real estate | 297,569 | 289,888 |
Farm land | 3,461 | 4,185 |
Vacant land | 7,852 | 8,280 |
Real estate secured | 732,972 | 726,729 |
Commercial and industrial | 169,262 | 162,507 |
Municipal | 21,914 | 14,344 |
Consumer | 6,382 | 4,504 |
Loans receivable, gross | 930,530 | 908,084 |
Past due 30-59 days | ||
Residential 1-4 family | 971 | 1,100 |
Residential 5+ multifamily | ||
Construction of residential 1-4 family | ||
Home equity lines of credit | 152 | 235 |
Residential real estate | 1,123 | 1,335 |
Commercial | 336 | 264 |
Construction of commercial | ||
Commercial real estate | 336 | 264 |
Farm land | 180 | |
Vacant land | 42 | |
Real estate secured | 1,639 | 1,641 |
Commercial and industrial | 2 | |
Municipal | ||
Consumer | 2 | |
Loans receivable, gross | 1,641 | 1,643 |
Past due 60-89 days | ||
Residential 1-4 family | 351 | 521 |
Residential 5+ multifamily | ||
Construction of residential 1-4 family | ||
Home equity lines of credit | 46 | 33 |
Residential real estate | 397 | 554 |
Commercial | 141 | 240 |
Construction of commercial | ||
Commercial real estate | 141 | 240 |
Farm land | ||
Vacant land | 41 | |
Real estate secured | 579 | 794 |
Commercial and industrial | 146 | 38 |
Municipal | ||
Consumer | 1 | 6 |
Loans receivable, gross | 726 | 838 |
Past due 90-179 days | ||
Residential 1-4 family | 200 | |
Residential 5+ multifamily | 633 | |
Construction of residential 1-4 family | ||
Home equity lines of credit | ||
Residential real estate | 200 | 633 |
Commercial | 71 | 833 |
Construction of commercial | 141 | |
Commercial real estate | 71 | 974 |
Farm land | ||
Vacant land | ||
Real estate secured | 271 | 1,607 |
Commercial and industrial | 1 | |
Municipal | ||
Consumer | 2 | |
Loans receivable, gross | 274 | 1,607 |
Past due 180 days and over | ||
Residential 1-4 family | 692 | 1,360 |
Residential 5+ multifamily | 861 | 229 |
Construction of residential 1-4 family | ||
Home equity lines of credit | 78 | 359 |
Residential real estate | 1,631 | 1,948 |
Commercial | 144 | 1,209 |
Construction of commercial | ||
Commercial real estate | 144 | 1,209 |
Farm land | ||
Vacant land | ||
Real estate secured | 1,775 | 3,157 |
Commercial and industrial | 360 | |
Municipal | ||
Consumer | ||
Loans receivable, gross | 1,775 | 3,517 |
Past due 30 days and over | ||
Residential 1-4 family | 2,214 | 2,981 |
Residential 5+ multifamily | 861 | 862 |
Construction of residential 1-4 family | ||
Home equity lines of credit | 276 | 627 |
Residential real estate | 3,351 | 4,470 |
Commercial | 692 | 2,546 |
Construction of commercial | 141 | |
Commercial real estate | 692 | 2,687 |
Farm land | 180 | |
Vacant land | 41 | 42 |
Real estate secured | 4,264 | 7,199 |
Commercial and industrial | 149 | 398 |
Municipal | ||
Consumer | 3 | 8 |
Loans receivable, gross | 4,416 | 7,605 |
Past due Accruing 90 days and over | ||
Residential 1-4 family | ||
Residential 5+ multifamily | ||
Construction of residential 1-4 family | ||
Home equity lines of credit | ||
Residential real estate | ||
Commercial | 654 | |
Construction of commercial | 141 | |
Commercial real estate | 795 | |
Farm land | ||
Vacant land | ||
Real estate secured | 795 | |
Commercial and industrial | 1 | |
Municipal | ||
Consumer | 2 | |
Loans receivable, gross | 3 | 795 |
Non-accrual | ||
Residential 1-4 family | 1,551 | 2,092 |
Residential 5+ multifamily | 861 | 1,000 |
Construction of residential 1-4 family | ||
Home equity lines of credit | 105 | 411 |
Residential real estate | 2,517 | 3,503 |
Commercial | 914 | 1,388 |
Construction of commercial | 252 | |
Commercial real estate | 914 | 1,640 |
Farm land | 186 | 216 |
Vacant land | ||
Real estate secured | 3,617 | 5,359 |
Commercial and industrial | 360 | |
Municipal | ||
Consumer | ||
Loans receivable, gross | $ 3,617 | $ 5,719 |
LOANS - Troubled debt restructu
LOANS - Troubled debt restructurings (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($)Integer | Dec. 31, 2018USD ($)Integer | |
Business Activities Loans - Residential real estate | ||
Quantity of troubled debt restructurings | Integer | 3 | 1 |
Pre-modification balance | $ 1,416 | $ 68 |
Post-modification balance | $ 1,416 | $ 68 |
Business Activities Loans - Commercial real estate | ||
Quantity of troubled debt restructurings | Integer | 4 | 1 |
Pre-modification balance | $ 977 | $ 566 |
Post-modification balance | $ 1,191 | $ 566 |
Business Activities Loans - Consumer | ||
Quantity of troubled debt restructurings | Integer | 1 | |
Pre-modification balance | ||
Post-modification balance | $ 36 | |
Business Activities Loans - Troubled debt restructurings, total | ||
Quantity of troubled debt restructurings | Integer | 8 | 2 |
Pre-modification balance | $ 2,393 | $ 634 |
Post-modification balance | $ 2,643 | $ 634 |
Business Activities Loans - Interest only payments to sell property | ||
Quantity of troubled debt restructurings | Integer | 1 | |
Pre-modification balance | $ 791 | |
Post-modification balance | $ 791 | |
Business Activities Loans - Rate reduction | ||
Quantity of troubled debt restructurings | Integer | 2 | |
Pre-modification balance | $ 634 | |
Post-modification balance | $ 634 | |
Business Activities Loans - Modification and Rate reduction | ||
Quantity of troubled debt restructurings | Integer | 2 | |
Pre-modification balance | $ 625 | |
Post-modification balance | $ 625 | |
Business Activities Loans - Extension of new funds to pay outstanding taxes | ||
Quantity of troubled debt restructurings | Integer | 3 | |
Pre-modification balance | $ 259 | |
Post-modification balance | $ 442 | |
Business Activities Loans - Modification and term extension | ||
Quantity of troubled debt restructurings | Integer | 2 | |
Pre-modification balance | $ 718 | |
Post-modification balance | $ 785 |
LOANS - Recorded investment and
LOANS - Recorded investment and number of modifications for TDRs (Details) $ in Thousands | Dec. 31, 2019USD ($)Integer | Dec. 31, 2018USD ($)Integer |
Residential 1-4 family | ||
Quanity, TDRs with Modifications that Subsequently Defaulted | Integer | 1 | |
Balance, TDRs with Modifications that Subsequently Defaulted | $ | $ 67 | |
Commercial real estate | ||
Quanity, TDRs with Modifications that Subsequently Defaulted | Integer | 1 | |
Balance, TDRs with Modifications that Subsequently Defaulted | $ | $ 274 | |
Total | ||
Quanity, TDRs with Modifications that Subsequently Defaulted | Integer | 1 | 1 |
Balance, TDRs with Modifications that Subsequently Defaulted | $ | $ 274 | $ 67 |
LOANS - Components of impaired
LOANS - Components of impaired loans (Details) - Impaired Loans - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Non-accrual loans, excluding troubled debt restructured loans | $ 2,604 | $ 4,430 |
Non-accrual troubled debt restructured loans | 1,013 | 1,289 |
Accruing troubled debt restructured loans | 7,778 | 6,801 |
Total impaired loans | 11,395 | 12,520 |
Commitments to lend additional amounts to impaired borrowers |
LOANS - Changes in allowance fo
LOANS - Changes in allowance for loan losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Residential 1-4 family | |||
Beginning balance | $ 2,149 | $ 1,862 | $ 1,926 |
Acquisition Discount Transfer | 10 | ||
Provision | 367 | 580 | 100 |
Charge-offs | (136) | (299) | (197) |
Recoveries | 3 | 6 | 33 |
Ending balance | 2,393 | 2,149 | 1,862 |
Residential 5+ multifamily | |||
Beginning balance | 413 | 155 | 62 |
Acquisition Discount Transfer | |||
Provision | 33 | 258 | 93 |
Charge-offs | |||
Recoveries | |||
Ending balance | 446 | 413 | 155 |
Construction of residential 1-4 family | |||
Beginning balance | 83 | 75 | 91 |
Acquisition Discount Transfer | |||
Provision | (8) | 8 | (16) |
Charge-offs | |||
Recoveries | |||
Ending balance | 75 | 83 | 75 |
Home equity lines of credit | |||
Beginning balance | 219 | 236 | 348 |
Acquisition Discount Transfer | 1 | ||
Provision | 258 | (18) | (115) |
Charge-offs | (281) | (4) | |
Recoveries | 1 | 7 | |
Ending balance | 197 | 219 | 236 |
Business Activities Loans - Residential real estate | |||
Beginning balance | 2,864 | 2,328 | 2,427 |
Acquisition Discount Transfer | 11 | ||
Provision | 650 | 828 | 62 |
Charge-offs | (417) | (299) | (201) |
Recoveries | 3 | 7 | 40 |
Ending balance | 3,111 | 2,864 | 2,328 |
Commercial | |||
Beginning balance | 3,048 | 2,547 | 1,920 |
Acquisition Discount Transfer | 488 | ||
Provision | 248 | 756 | 836 |
Charge-offs | (44) | (259) | (453) |
Recoveries | 2 | 4 | 244 |
Ending balance | 3,742 | 3,048 | 2,547 |
Construction of commercial | |||
Beginning balance | 122 | 80 | 38 |
Acquisition Discount Transfer | |||
Provision | (18) | 42 | 42 |
Charge-offs | |||
Recoveries | |||
Ending balance | 104 | 122 | 80 |
Commercial real estate | |||
Beginning balance | 3,170 | 2,627 | 1,958 |
Acquisition Discount Transfer | 488 | ||
Provision | 230 | 798 | 878 |
Charge-offs | (44) | (259) | (453) |
Recoveries | 2 | 4 | 244 |
Ending balance | 3,846 | 3,170 | 2,627 |
Farm land | |||
Beginning balance | 33 | 32 | 28 |
Acquisition Discount Transfer | |||
Provision | 14 | (6) | 45 |
Charge-offs | (43) | ||
Recoveries | 7 | 2 | |
Ending balance | 47 | 33 | 32 |
Vacant land | |||
Beginning balance | 100 | 132 | 170 |
Acquisition Discount Transfer | |||
Provision | (29) | (32) | (2) |
Charge-offs | (36) | ||
Recoveries | |||
Ending balance | 71 | 100 | 132 |
Real estate secured | |||
Beginning balance | 6,167 | 5,119 | 4,583 |
Acquisition Discount Transfer | 499 | ||
Provision | 865 | 1,588 | 983 |
Charge-offs | (461) | (558) | (733) |
Recoveries | 5 | 18 | 286 |
Ending balance | 7,075 | 6,167 | 5,119 |
Business Activities Loans - Commercial real estate | |||
Beginning balance | 1,158 | 984 | 1,079 |
Acquisition Discount Transfer | 164 | ||
Provision | (78) | 255 | (229) |
Charge-offs | (145) | (108) | (162) |
Recoveries | 46 | 27 | 296 |
Ending balance | 1,145 | 1,158 | 984 |
Municipal | |||
Beginning balance | 12 | 30 | 53 |
Acquisition Discount Transfer | |||
Provision | 34 | (18) | (23) |
Charge-offs | |||
Recoveries | |||
Ending balance | 46 | 12 | 30 |
Business Activities Loans - Consumer | |||
Beginning balance | 56 | 80 | 75 |
Acquisition Discount Transfer | |||
Provision | 3 | 28 | 63 |
Charge-offs | (36) | (81) | (76) |
Recoveries | 37 | 29 | 18 |
Ending balance | 60 | 56 | 80 |
Unallocated | |||
Beginning balance | 438 | 563 | 337 |
Acquisition Discount Transfer | |||
Provision | 131 | (125) | 226 |
Charge-offs | |||
Recoveries | |||
Ending balance | 569 | 438 | 563 |
Business Activities Loans - Troubled debt restructurings, total | |||
Beginning balance | 7,831 | 6,776 | 6,127 |
Acquisition Discount Transfer | 663 | ||
Provision | 955 | 1,728 | 1,020 |
Charge-offs | (642) | (747) | (971) |
Recoveries | 88 | 74 | 600 |
Ending balance | $ 8,895 | $ 7,831 | $ 6,776 |
LOANS - Composition of loans _4
LOANS - Composition of loans receivable and allowance for loan losses (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Totals | $ 927,413 | $ 909,279 |
Collectively evaluated Loans | ||
Residential 1-4 family | 340,847 | 340,946 |
Residential 5+ multifamily | 34,478 | 34,835 |
Construction of residential 1-4 family | 11,889 | 12,041 |
Home equity lines credit | 33,693 | 33,975 |
Residential real estate | 420,907 | 421,797 |
Commercial | 285,462 | 279,389 |
Construction of commercial | 8,466 | 8,622 |
Commercial real estate | 293,928 | 288,011 |
Farm land | 3,455 | 3,969 |
Vacant land | 7,713 | 8,132 |
Real estate secured | 726,003 | 721,909 |
Commercial and industrial | 169,285 | 162,404 |
Municipal | 21,914 | 14,344 |
Consumer | 6,349 | 4,512 |
Unallocated allowance | ||
Totals | 923,551 | 903,169 |
Collectively evaluated Allowance | ||
Residential 1-4 family | 2,117 | 2,042 |
Residential 5+ multifamily | 446 | 413 |
Construction of residential 1-4 family | 75 | 83 |
Home equity lines credit | 197 | 213 |
Residential real estate | 2,835 | 2,751 |
Commercial | 3,333 | 2,907 |
Construction of commercial | 104 | 106 |
Commercial real estate | 3,437 | 3,013 |
Farm land | 47 | 33 |
Vacant land | 66 | 98 |
Real estate secured | 6,385 | 5,895 |
Commercial and industrial | 1,143 | 1,158 |
Municipal | 46 | 12 |
Consumer | 59 | 56 |
Unallocated allowance | 569 | 438 |
Totals | 8,202 | 7,559 |
Individually evaluated Loans | ||
Residential 1-4 family | 5,452 | 4,916 |
Residential 5+ multifamily | 977 | 1,675 |
Construction of residential 1-4 family | ||
Home equity lines credit | 105 | 458 |
Residential real estate | 6,534 | 7,049 |
Commercial | 4,333 | 4,210 |
Construction of commercial | 354 | |
Commercial real estate | 4,333 | 4,564 |
Farm land | 186 | 216 |
Vacant land | 180 | 190 |
Real estate secured | 11,233 | 12,019 |
Commercial and industrial | 126 | 501 |
Municipal | ||
Consumer | 36 | |
Unallocated allowance | ||
Totals | 11,395 | 12,520 |
Individually evaluated Allowance | ||
Residential 1-4 family | 276 | 107 |
Residential 5+ multifamily | ||
Construction of residential 1-4 family | ||
Home equity lines credit | 6 | |
Residential real estate | 276 | 113 |
Commercial | 409 | 141 |
Construction of commercial | 16 | |
Commercial real estate | 409 | 157 |
Farm land | ||
Vacant land | 5 | 2 |
Real estate secured | 690 | 272 |
Commercial and industrial | 2 | |
Municipal | ||
Consumer | 1 | |
Unallocated allowance | ||
Totals | 693 | 272 |
Total portfolio Loans | ||
Residential 1-4 family | 346,299 | 345,862 |
Residential 5+ multifamily | 35,455 | 36,510 |
Construction of residential 1-4 family | 11,889 | 12,041 |
Home equity lines credit | 33,798 | 34,433 |
Residential real estate | 427,441 | 428,846 |
Commercial | 289,795 | 283,599 |
Construction of commercial | 8,466 | 8,976 |
Commercial real estate | 298,261 | 292,575 |
Farm land | 3,641 | 4,185 |
Vacant land | 7,893 | 8,322 |
Real estate secured | 737,236 | 733,928 |
Commercial and industrial | 169,411 | 162,905 |
Municipal | 21,914 | 14,344 |
Consumer | 6,385 | 4,512 |
Unallocated allowance | ||
Totals | 934,946 | 915,689 |
Total portfolio Allowance | ||
Residential 1-4 family | 2,393 | 2,149 |
Residential 5+ multifamily | 446 | 413 |
Construction of residential 1-4 family | 75 | 83 |
Home equity lines credit | 197 | 219 |
Residential real estate | 3,111 | 2,864 |
Commercial | 3,742 | 3,048 |
Construction of commercial | 104 | 122 |
Commercial real estate | 3,846 | 3,170 |
Farm land | 47 | 33 |
Vacant land | 71 | 100 |
Real estate secured | 7,075 | 6,167 |
Commercial and industrial | 1,145 | 1,158 |
Municipal | 46 | 12 |
Consumer | 60 | 56 |
Unallocated allowance | 569 | 438 |
Totals | $ 8,895 | $ 7,831 |
LOANS - Credit quality segments
LOANS - Credit quality segments of loans receivable and allowance for loan losses (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Totals | $ 927,413 | $ 909,279 |
Collectively evaluated Loans | ||
Performing loans | 913,648 | 895,527 |
Potential problem loans | 9,903 | 7,642 |
Impaired loans | ||
Unallocated allowance | ||
Totals | 923,551 | 903,169 |
Collectively evaluated Allowance | ||
Performing loans | 7,251 | 6,989 |
Potential problem loans | 382 | 132 |
Impaired loans | ||
Unallocated allowance | 569 | 438 |
Totals | 8,202 | 7,559 |
Individually evaluated Loans | ||
Performing loans | ||
Potential problem loans | ||
Impaired loans | 11,395 | 12,520 |
Unallocated allowance | ||
Totals | 11,395 | 12,520 |
Individually evaluated Allowance | ||
Performing loans | ||
Potential problem loans | ||
Impaired loans | 693 | 272 |
Unallocated allowance | ||
Totals | 693 | 272 |
Total portfolio Loans | ||
Performing loans | 913,648 | 895,527 |
Potential problem loans | 9,903 | 7,642 |
Impaired loans | 11,395 | 12,520 |
Unallocated allowance | ||
Totals | 934,946 | 915,689 |
Total portfolio Allowance | ||
Performing loans | 7,251 | 6,989 |
Potential problem loans | 382 | 132 |
Impaired loans | 693 | 272 |
Unallocated allowance | 569 | 438 |
Totals | $ 8,895 | $ 7,831 |
LOANS - Certain data with respe
LOANS - Certain data with respect to loans individually evaluated for impairment (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Totals | $ 927,413 | $ 909,279 |
Impaired loans with specific allowance - Loan balance - Book | ||
Residential | 4,111 | 2,792 |
Home equity lines of credit | 47 | |
Residential real estate | 4,111 | 2,839 |
Commercial | 3,309 | 1,808 |
Construction of commercial | 252 | |
Farm land | ||
Vacant land | 41 | 42 |
Real estate secured | 7,461 | 4,941 |
Commercial and industrial | 93 | |
Consumer | 36 | 4,941 |
Totals | 7,590 | |
Impaired loans with specific allowance - Loan balance - Note | ||
Residential | 4,190 | 2,842 |
Home equity lines of credit | 47 | |
Residential real estate | 4,190 | 2,889 |
Commercial | 3,335 | 1,808 |
Construction of commercial | 252 | |
Farm land | ||
Vacant land | 41 | 42 |
Real estate secured | 7,566 | 4,991 |
Commercial and industrial | 97 | |
Consumer | 36 | 4,991 |
Totals | 7,699 | |
Impaired loans with specific allowance - Loan balance - Average | ||
Residential | 3,725 | 3,429 |
Home equity lines of credit | 52 | 158 |
Residential real estate | 3,777 | 3,587 |
Commercial | 2,574 | 2,001 |
Construction of commercial | 77 | 67 |
Farm land | ||
Vacant land | 42 | 43 |
Real estate secured | 6,470 | 5,698 |
Commercial and industrial | 16 | 40 |
Consumer | 21 | 5,738 |
Totals | 6,507 | |
Impaired loans with specific allowance - Specific allowance | ||
Residential | 276 | 107 |
Home equity lines of credit | 6 | |
Residential real estate | 276 | 113 |
Commercial | 409 | 141 |
Construction of commercial | 16 | |
Farm land | ||
Vacant land | 5 | 2 |
Real estate secured | 690 | 272 |
Commercial and industrial | 2 | |
Consumer | 1 | 272 |
Totals | 693 | |
Impaired loans with specific allowance - Income recognized | ||
Residential | 162 | 101 |
Home equity lines of credit | 2 | |
Residential real estate | 162 | 103 |
Commercial | 90 | 88 |
Construction of commercial | ||
Farm land | ||
Vacant land | 3 | 3 |
Real estate secured | 255 | 194 |
Commercial and industrial | 4 | |
Consumer | 194 | |
Totals | 259 | |
Impaired loans with no specific allowance - Loan balance - Book | ||
Residential | 2,318 | 3,799 |
Home equity lines of credit | 105 | 411 |
Residential real estate | 2,423 | 4,210 |
Commercial | 1,024 | 2,403 |
Construction of commercial | 102 | |
Farm land | 186 | 216 |
Vacant land | 139 | 147 |
Real estate secured | 3,772 | 7,078 |
Commercial and industrial | 33 | 501 |
Consumer | 7,579 | |
Totals | 3,805 | |
Impaired loans with no specific allowance - Loan balance - Note | ||
Residential | 3,081 | 5,140 |
Home equity lines of credit | 450 | 498 |
Residential real estate | 3,531 | 5,638 |
Commercial | 1,733 | 3,989 |
Construction of commercial | 110 | |
Farm land | 329 | 432 |
Vacant land | 157 | 168 |
Real estate secured | 5,750 | 10,337 |
Commercial and industrial | 188 | 596 |
Consumer | 10,933 | |
Totals | 5,938 | |
Impaired loans with no specific allowance - Loan balance - Average | ||
Residential | 2,940 | 3,726 |
Home equity lines of credit | 391 | 114 |
Residential real estate | 3,331 | 3,840 |
Commercial | 1,747 | 2,992 |
Construction of commercial | 39 | 295 |
Farm land | 203 | 232 |
Vacant land | 143 | 151 |
Real estate secured | 5,463 | 7,510 |
Commercial and industrial | 265 | 469 |
Consumer | 3 | 7,979 |
Totals | 5,731 | |
Impaired loans with no specific allowance - Income recognized | ||
Residential | 52 | 102 |
Home equity lines of credit | 2 | |
Residential real estate | 52 | 104 |
Commercial | 54 | 75 |
Construction of commercial | 7 | |
Farm land | ||
Vacant land | 10 | 10 |
Real estate secured | 116 | 196 |
Commercial and industrial | 4 | 5 |
Consumer | $ 201 | |
Totals | $ 120 |
LOANS (Details Narrative)
LOANS (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Loans Details Narrative Abstract | ||
Commercial loans for other banks serviced by Company under loan participation agreements | $ 67,000 | $ 66,400 |
ASC 310-30 loans | 1,700 | |
ASC 310-30 allowance |
LEASES - Assets and liabilities
LEASES - Assets and liabilities as well as the costs of operating and financial leases (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases - Assets | |
Operating - Other assets | $ 1,360 |
Finance - Bank premises and equipment | 1,503 |
Total Leased Assets | 2,863 |
Leases - Liabilities | |
Operating - Accrued interest and other liabilities | 1,360 |
Finance - Finance lease obligations | 1,718 |
Total lease liabilities | 3,078 |
Lease cost | |
Operating leases - Premises and equipment | 255 |
Finance leases: Amortization of leased assets - Premises and equipment | 200 |
Finance leases: Interest on finance leases - Interest expense | 173 |
Total lease cost | $ 628 |
Weighted Average Remaining Lease Term | |
Operating leases | 8 years 2 months 12 days |
Financing leases | 15 years 1 month 6 days |
Weighted Average Discount Rate | |
Operating leases | 3.70% |
Financing leases | 8.41% |
LEASES - Present value of the n
LEASES - Present value of the net minimum lease payments (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Operating Leases | |
2020 | $ 246 |
2021 | 228 |
2022 | 199 |
2023 | 134 |
2024 | 129 |
Thereafter | 653 |
Total future minimum lease payments | 1,589 |
Less amount representing interest | (229) |
Total present value of net future minimum lease payments | 1,360 |
Finance Leases | |
2020 | 186 |
2021 | 192 |
2022 | 195 |
2023 | 198 |
2024 | 200 |
Thereafter | 1,980 |
Total future minimum lease payments | 2,951 |
Less amount representing interest | (1,233) |
Total present value of net future minimum lease payments | $ 1,718 |
LEASES (Details Narrative)
LEASES (Details Narrative) $ in Thousands | Dec. 31, 2019USD ($) |
Notes to Financial Statements | |
Right-of-use assets and corresponding lease liability related to operating leases | $ 1,600 |
MORTGAGE SERVICING RIGHTS - Bal
MORTGAGE SERVICING RIGHTS - Balance of loans serviced for others and fair value of mortgage servicing rights (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract] | ||
Residential mortgage loans serviced for others | $ 106,255 | $ 111,378 |
Fair value of mortgage servicing rights | $ 813 | $ 951 |
MORTGAGE SERVICING RIGHTS - Cha
MORTGAGE SERVICING RIGHTS - Changes in mortgage servicing rights (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Mortgage Servicing Rights | |||
Balance, beginning of period | $ 228 | $ 233 | $ 339 |
Originated | 61 | 43 | 63 |
Amortization | (51) | (48) | (169) |
Balance, end of period | 238 | 228 | 233 |
Valuation Allowance | |||
Balance, beginning of period | (23) | ||
Decrease (increase) in impairment reserve (1) | 23 | ||
Balance, end of period | |||
Mortgage servicing rights, net | $ 238 | $ 228 | $ 233 |
PLEDGED ASSETS - Securities and
PLEDGED ASSETS - Securities and loans pledged (Details) - Pledged Assets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Securities available-for-sale (at fair value) | $ 52,845 | $ 80,991 |
Loans receivable (at book value) | 434,329 | 328,674 |
Total pledged assets | $ 487,174 | $ 409,665 |
PLEDGED ASSETS (Details Narrati
PLEDGED ASSETS (Details Narrative) $ in Thousands | Dec. 31, 2019USD ($) |
Guarantees [Abstract] | |
Securities pledged to secure public deposits | $ 43,550 |
Securities pledged to secure repurchase agreements | 9,250 |
Securities pledged to secure FHLBB advances | $ 50 |
BANK PREMISES AND EQUIPMENT -
BANK PREMISES AND EQUIPMENT - Components of premises and equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Finance leases | $ 2,863 | |
Components of premises and equipment | ||
Land | 2,762 | $ 2,593 |
Buildings and improvements | 14,878 | 13,458 |
Leasehold improvements | 1,553 | 1,553 |
Finance leases | 1,798 | 3,273 |
Furniture, fixtures, equipment and software | 9,370 | 8,978 |
Fixed assets in process | 768 | 790 |
Total cost | 31,129 | 30,645 |
Accumulated depreciation and amortization | (13,744) | (12,470) |
Bank premises and equipment, net | $ 17,385 | $ 18,175 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Changes in carrying values of goodwill and intangible assets (Details) - Changes in carrying values of goodwill and intangible assets - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill | |||
Balance, beginning of period | $ 13,815 | $ 13,815 | $ 12,552 |
Additions | 1,263 | ||
Impairment | |||
Balance, end of period | 13,815 | 13,815 | 13,815 |
Core Deposit Intangibles | |||
Cost, beginning of period | 5,881 | 5,881 | 5,248 |
Additions | 633 | ||
Cost, end of period | 5,881 | 5,881 | 5,881 |
Amortization, beginning of period | (4,498) | (4,044) | (3,511) |
Amortization | (388) | (454) | (533) |
Amortization, end of period | (4,886) | (4,498) | (4,044) |
Core deposit intangibles, net | $ 995 | $ 1,383 | $ 1,837 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Estimated annual amortization expense of core deposit intangibles (Details) - USD ($) $ in Thousands | 12 Months Ended | 84 Months Ended | ||||||
Dec. 31, 2026 | Dec. 31, 2025 | Dec. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2026 | |
CDI amortization | $ 995 | |||||||
CDI amortization | ||||||||
CDI amortization | $ 13 | $ 25 | $ 61 | $ 128 | $ 192 | $ 255 | $ 321 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Deposits assumed from acquisition | $ 31,400 |
Loans acquired from acquisition | 7,100 |
Goodwill realized | 1,260 |
Core deposit intangible assigned to acquisition | $ 633 |
DEPOSITS - Scheduled maturities
DEPOSITS - Scheduled maturities of time certificates of deposit (Details) - CDI maturities $ in Thousands | Dec. 31, 2019USD ($) |
2020 | $ 86,025 |
2021 | 19,342 |
2022 | 9,749 |
2023 | 4,937 |
2024 | 7,671 |
Total | $ 127,724 |
DEPOSITS - Total amount and sch
DEPOSITS - Total amount and scheduled maturities of time certificates of deposit in denominations of $250,000 or more (Details) - CDI in demoninations of $250,000 or more - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Within three months | $ 4,603 | $ 1,128 |
After three through six months | 3,799 | 1,359 |
After six through twelve months | 6,628 | 3,785 |
Over one year | 6,750 | 9,726 |
Total | $ 21,780 | $ 15,998 |
DEPOSITS (Details Narrative)
DEPOSITS (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deposits Details Narrative Abstract | ||
Brokered and reciprocal deposits included in certificates of deposit | $ 8,000 | $ 44,400 |
Brokered and money market accounts included in money market funds | $ 66,000 | $ 41,100 |
SECURITIES SOLD UNDER AGREEME_3
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE - Securities sold under repurchase agreements (Details) - Securities sold under repurchase agreements - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Repurchase agreements, ending balance | $ 8,530 | $ 4,104 |
Repurchase agreements, average balance during period | 4,913 | 3,340 |
Book value of collateral | 9,031 | 11,194 |
Market value of collateral | $ 9,246 | $ 11,276 |
Weighted average rate during period | 0.48% | 0.35% |
Weighted average maturity | 1 day | 1 day |
FEDERAL HOME LOAN BANK OF BOS_3
FEDERAL HOME LOAN BANK OF BOSTON ADVANCES AND OTHER BORROWED FUNDS - Federal Home Loan Bank of Boston advances (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Total | ||
Overnight advances | $ 9,500 | |
2019 advances | 36,767 | |
2020 advances | 44,899 | 14,899 |
2021 advances | 5,988 | 5,988 |
Total advances | $ 50,887 | $ 67,154 |
Rate | ||
Overnight rate | 2.72% | |
2019 rate | 3.19% | |
2020 rate | 2.14% | 2.18% |
2021 rate | 2.45% | 2.45% |
Total weighted average rate | 2.18% | 2.94% |
FEDERAL HOME LOAN BANK OF BOS_4
FEDERAL HOME LOAN BANK OF BOSTON ADVANCES AND OTHER BORROWED FUNDS (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Federal Home Loan Bank Of Boston Advances And Other Borrowed Funds | ||
Additional available borrowing capacity in addition to outstanding FHLBB advances | $ 233,700 | |
Unused FHLBB line of credit Company has access to | 3,500 | |
Subordinated Debentures | ||
Issuance of debt in private placement, aggregate principal amount | 10,000 | |
Portion to certain related parties | $ 500 | |
Maturity date | Dec. 15, 2025 | |
Annual interest rate | 6.00% | |
Total subordinated debentures | $ 9,859 | $ 9,835 |
Remaining unamortized debt issuance costs | $ 141 | 165 |
Effective interest rate of subordinated debentures | 6.33% | |
Notes Payable | ||
Outstanding mortgage balance from Sharon branch property purchase | $ 246 | $ 280 |
NET DEFERRED TAX ASSET AND IN_3
NET DEFERRED TAX ASSET AND INCOME TAXES - Components of income tax provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred (benefit) expense | $ (391) | $ (494) | $ 888 |
Income tax provision | 2,359 | 1,709 | 2,914 |
Components of income tax provision | |||
Federal | 2,406 | 1,986 | 1,831 |
State | 344 | 217 | 195 |
Current provision | 2,750 | 2,203 | 2,026 |
Federal | (317) | (455) | 840 |
State | (74) | (39) | 48 |
Deferred (benefit) expense | (391) | (494) | 888 |
Income tax provision | $ 2,359 | $ 1,709 | $ 2,914 |
NET DEFERRED TAX ASSET AND IN_4
NET DEFERRED TAX ASSET AND INCOME TAXES - Reconciliation of expected federal statutory tax to income tax provision (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Income tax at statutory federal tax rate | 21.00% | 21.00% | 34.00% |
State tax, net of federal tax benefit | 1.58% | 1.37% | 1.74% |
Tax exempt income and dividends received deduction | (3.82%) | (3.84%) | (7.00%) |
Remeasurement of net deferred tax assets | 4.85% | ||
BOLI interest and gain | (0.61%) | (1.35%) | (1.34%) |
Other | (0.67%) | (0.95%) | (0.47%) |
Change in valuation allowance | |||
Effective income tax rates | 17.48% | 16.23% | 31.78% |
NET DEFERRED TAX ASSET AND IN_5
NET DEFERRED TAX ASSET AND INCOME TAXES - Components of net deferred tax assets (Details) - Components of net deferred tax assets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Allowance for loan losses | $ 2,174 | $ 1,916 |
Interest on non-performing loans | 244 | 233 |
Accrued deferred compensation | 493 | 334 |
Post-retirement benefits | 11 | 11 |
Other real estate owned write-downs | 30 | |
Restricted stock awards | 220 | 162 |
Net unrealized holding loss on available-for-sale securities | 58 | |
Write-down of securities | 2 | 4 |
Other | 139 | 282 |
Gross deferred tax assets | 3,313 | 3,000 |
Deferred loan costs, net | (329) | (344) |
Mark-to-market purchase accounting adjustments | (44) | (37) |
Goodwill and core deposit intangible asset | (570) | (545) |
Accelerated depreciation | (703) | (698) |
Other real estate owned write-downs | (45) | |
Mortgage servicing rights | (58) | (55) |
Net unrealized holding gain on available-for-sale securities | (360) | |
Gross deferred tax liabilities | (2,064) | (1,724) |
Net deferred tax asset | $ 1,249 | $ 1,276 |
NET DEFERRED TAX ASSET AND IN_6
NET DEFERRED TAX ASSET AND INCOME TAXES (Details Narrative) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Income Tax Disclosure [Abstract] | |
Increase in tax provision as a result of remeasurement | $ 445 |
SHAREHOLDERS' EQUITY - Actual r
SHAREHOLDERS' EQUITY - Actual regulatory capital position and minimum capital requirements (Details) - Salisbury - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Total Capital (to risk-weighted assets) | ||
Actual - Amount | $ 114,421 | $ 104,013 |
Actual - Ratio | 12.84% | 12.09% |
Minimum Capital Required For Capital Adequacy - Amount | $ 71,278 | $ 68,848 |
Minimum Capital Required For Capital Adequacy - Ratio | 8.00% | 8.00% |
Minimum Capital Required For Capital Adequacy Plus Required Capital Conservation Buffer - Amount | $ 93,553 | $ 90,362 |
Minimum Capital Required For Capital Adequacy Plus Required Capital Conservation Buffer - Ratio | 10.50% | 10.50% |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions - Amount | $ 89,098 | $ 86,059 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions - Ratio | 10.00% | 10.00% |
Tier 1 Capital (to risk-weighted assets) | ||
Actual - Amount | $ 105,430 | $ 96,092 |
Actual - Ratio | 11.83% | 11.17% |
Minimum Capital Required For Capital Adequacy - Amount | $ 53,459 | $ 51,636 |
Minimum Capital Required For Capital Adequacy - Ratio | 6.00% | 6.00% |
Minimum Capital Required For Capital Adequacy Plus Required Capital Conservation Buffer - Amount | $ 75,733 | $ 73,150 |
Minimum Capital Required For Capital Adequacy Plus Required Capital Conservation Buffer - Ratio | 8.50% | 8.50% |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions - Amount | $ 71,278 | $ 68,848 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions - Ratio | 8.00% | 8.00% |
Common Equity Tier 1 Capital (to risk-weighted assets) | ||
Actual - Amount | $ 105,430 | $ 96,092 |
Actual - Ratio | 11.83% | 11.17% |
Minimum Capital Required For Capital Adequacy - Amount | $ 40,094 | $ 38,727 |
Minimum Capital Required For Capital Adequacy - Ratio | 4.50% | 4.50% |
Minimum Capital Required For Capital Adequacy Plus Required Capital Conservation Buffer - Amount | $ 62,368 | $ 60,242 |
Minimum Capital Required For Capital Adequacy Plus Required Capital Conservation Buffer - Ratio | 7.00% | 7.00% |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions - Amount | $ 57,914 | $ 55,939 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions - Ratio | 6.50% | 6.50% |
Tier 1 Capital (to average assets) | ||
Actual - Amount | $ 105,430 | $ 96,092 |
Actual - Ratio | 9.60% | 8.83% |
Minimum Capital Required For Capital Adequacy - Amount | $ 43,944 | $ 43,527 |
Minimum Capital Required For Capital Adequacy - Ratio | 4.00% | 4.00% |
Minimum Capital Required For Capital Adequacy Plus Required Capital Conservation Buffer - Amount | $ 43,944 | $ 43,527 |
Minimum Capital Required For Capital Adequacy Plus Required Capital Conservation Buffer - Ratio | 4.00% | 4.00% |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions - Amount | $ 54,930 | $ 54,409 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions - Ratio | 5.00% | 5.00% |
SHAREHOLDERS' EQUITY (Details N
SHAREHOLDERS' EQUITY (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Equity [Abstract] | ||
Risk-weighted assets | $ 891,000 | $ 860,600 |
OTHER BENEFITS (Details Narrati
OTHER BENEFITS (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |||
401(k) Plan contribution expense | $ 900 | $ 1,000 | $ 800 |
Employee Stock Ownership Plan (ESOP) | |||
ESOP expense | 285 | 358 | 132 |
Other Retirement Plans | |||
Total liability for endorsement split-dollar life insurance arrangements included in other liabilities | 765 | 992 | |
Benefit adjustment on future postretirement benefit obligations under endorsement split-dollar life insurance arrangements | 328 | ||
Offsetting expense on future postretirement benefit obligations under endorsement split-dollar life insurance arrangements | 101 | ||
Net credit to expense future postretirement benefit obligations under endorsement split-dollar life insurance arrangements | 227 | ||
Expense under endorsement split-dollar life insurance arrangement | 26 | 117 | |
Former CEO supplemental post retirement payment liability | 25 | ||
Former Riverside CEO supplemental post retirement payment liability | 358 | 403 | |
Expenses for Non-Qualified Deferred Compensation Plan | $ 114 | $ 115 | $ 80 |
LONG TERM INCENTIVE PLANS - Amo
LONG TERM INCENTIVE PLANS - Amount of cumulatively granted restricted stock awards under 2011 and 2017 Long-Term Incentive Plans (Details) - Restricted stock awards cumulatively granted under 2011 and 2017 Long-Term Incentive Plans - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Restricted stock awards, beginning of year | 39,434 | 27,024 |
Beginning of year, weighted average grant price | $ 37.73 | $ 34.62 |
Granted | 15,130 | 13,210 |
Granted, weighted average grant price | $ 39.70 | $ 44.30 |
Vested | (14,228) | |
Vested, weighted average grant price | $ 30.33 | |
Forfeited | (710) | (800) |
Forfeited, weighted average grant price | $ 42.81 | $ 40.99 |
Restricted stock awards, end of year | 39,626 | 39,434 |
End of year, weighted average grant price | $ 41.04 | $ 37.73 |
LONG TERM INCENTIVE PLANS (Deta
LONG TERM INCENTIVE PLANS (Details Narrative) - Unearned compensation-restricted stock awards - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Total number of shares of Common Stock reserved and available for issuance in ten years following adoption of Plan | 84,000 | ||
Annual stock retainer, individual director maximum | 340 | 340 | 340 |
Restricted stock | |||
Shares of restricted stock granted pursuant to the Plan | 15,130 | 13,210 | 13,824 |
Fair value of stock granted pursuant to the Plan | $ 601 | $ 585 | $ 547 |
Fair value of vested restricted stock awards | 556 | 222 | |
Compensation expense | 486 | 447 | 265 |
Unrecognized compensation cost relating to awards | 795 | 711 | 606 |
Tax provision benefit recorded | 105 | ||
Tax benefit associated with restricted stock awards, recognized in earnings | $ 103 | $ 87 | $ 88 |
Phantom Stock Appreciation Units granted pursuant to the Plan | 53,500 | 56,600 | |
Compensation expense related to PSUs | $ 414 | $ 171 | $ 135 |
Performance-based restricted stock units | |||
Performance-based restricted stock units pursuant to 2017 Long-Term Incentive Plan, granted | 6,800 | ||
Performance-based restricted stock units pursuant to 2017 Long-Term Incentive Plan, fair value | $ 280 | ||
Performance-based restricted stock units pursuant to 2017 Long-Term Incentive Plan, compensation expense | 70 | ||
Short Term Incentive Plan (STIP) | |||
STIP expense, included in compensation expenses | $ 888 | $ 758 | $ 532 |
STOCK OPTIONS - Summary of stat
STOCK OPTIONS - Summary of status of Salisbury's outstanding stock options (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number, beginning of period | 22,545 | 40,500 |
Weighted average exercise price, beginning of period | $ 17.04 | $ 21.73 |
Number of options, granted | ||
Weighted average exercise price, granted | ||
Number of options, exercised | (4,725) | (9,155) |
Weighted average exercise price, exercised | $ 17.04 | $ 24.26 |
Number of options, forfeited or expired | (8,800) | |
Weighted average exercise price, forfeited or expired | $ 31.11 | |
Number, end of period | 17,820 | 22,545 |
Weighted average exercise price, end of period | $ 17.04 | $ 17.04 |
Weighted average remaining contractual term | 4 years | 5 years |
Aggregate intrinsic value | $ 510 | $ 456 |
STOCK OPTIONS (Details Narrativ
STOCK OPTIONS (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |||
Total intrinsic value of stock options exercised | $ 125 | $ 160 | $ 156 |
RELATED PARTY TRANSACTIONS - Ch
RELATED PARTY TRANSACTIONS - Changes in loans to executive officers, directors and their related associates (Details) - Related party transactions - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Balance, beginning of period | $ 9,432 | $ 7,651 |
Advances | 8,010 | 4,374 |
Repayments | (6,787) | (2,593) |
Balance, end of period | $ 10,655 | $ 9,432 |
OTHER COMPREHENSIVE INCOME (L_3
OTHER COMPREHENSIVE INCOME (LOSS) - Reconciliation of changes in components of other comprehensive loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other comprehensive income (loss) | |||
Net unrealized gains (losses) on securities available-for-sale | $ 2,258 | $ (202) | $ (318) |
Unrealized gains (losses) on securities available-for-sale | 1,995 | (520) | (496) |
Other comprehensive income (loss) | 1,577 | (415) | (298) |
Statements of Comprehensive Income (Loss) | |||
Other comprehensive income (loss) | |||
Net unrealized gains (losses) on securities available-for-sale | 2,258 | (202) | (318) |
Reclassification of net realized gains in net income | (263) | (318) | (178) |
Unrealized gains (losses) on securities available-for-sale | 1,995 | (520) | (496) |
Income tax (expense) benefit | (418) | 105 | 198 |
Unrealized gains (losses) on securities available-for-sale, net of tax | 1,577 | (415) | (298) |
Other comprehensive income (loss) | $ 1,577 | $ (415) | $ (298) |
OTHER COMPREHENSIVE INCOME (L_4
OTHER COMPREHENSIVE INCOME (LOSS) - Components of accumulated other comprehensive income (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accumulated other comprehensive income (loss) | $ 1,357 | $ (220) |
Statements of Comprehensive Income (Loss) | ||
Unrealized gains (losses) on securities available-for-sale, net of tax | 1,357 | (220) |
Accumulated other comprehensive income (loss) | $ 1,357 | $ (220) |
OTHER COMPREHENSIVE LOSS (Detai
OTHER COMPREHENSIVE LOSS (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |||
Income tax expense related to reclassification of net realized gains | $ 55 | $ 67 | $ 61 |
FINANCIAL INSTRUMENTS - Financi
FINANCIAL INSTRUMENTS - Financial instrument liabilities with off-balance sheet credit risk (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Letters of credit | $ 4,700 | $ 3,900 |
Financial instrument liabilities | ||
Residential | 5,815 | 6,751 |
Home equity lines of credit | 28,160 | 29,872 |
Commercial | 14,858 | 19,051 |
Land | 1,014 | 14 |
Real estate secured | 49,847 | 55,688 |
Commercial and industrial | 78,286 | 77,219 |
Municipal | 2,499 | 250 |
Consumer | 2,148 | 1,583 |
Unadvanced portions of loans | 132,780 | 134,740 |
Commitments to originate loans | 33,781 | 18,397 |
Letters of credit | 4,657 | 3,865 |
Total | $ 171,218 | $ 157,002 |
FINANCIAL INSTRUMENTS (Details
FINANCIAL INSTRUMENTS (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Investments, All Other Investments [Abstract] | ||
Maximum potential amount of Bank's obligation for financial, commercial and standby letters of credit | $ 4,700 | $ 3,900 |
Allowance for off-balance sheet commitments | $ 96 | $ 90 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets measured at fair value (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets at fair value | ||
Assets at fair value on a recurring basis | ||
U.S. Government Agency notes | $ 4,644 | $ 7,670 |
Municipal bonds | 27,193 | 5,379 |
Mortgage backed securities: U.S. Government agencies and U.S. Government-sponsored enterprises | 29,357 | 57,446 |
Collateralized mortgage obligations: U.S. Government agencies | 25,499 | 17,747 |
Corporate bonds | 5,108 | 3,576 |
Securities available-for-sale | 91,801 | 91,818 |
CRA mutual funds | 882 | 836 |
Assets at fair value on a non-recurring basis | ||
Collateral dependent impaired loans | 1,593 | 4,238 |
Other real estate owned | 314 | 1,810 |
Fair Value Measurements Using - Level 1 | ||
Assets at fair value on a recurring basis | ||
U.S. Government Agency notes | ||
Municipal bonds | ||
Mortgage backed securities: U.S. Government agencies and U.S. Government-sponsored enterprises | ||
Collateralized mortgage obligations: U.S. Government agencies | ||
Corporate bonds | ||
Securities available-for-sale | ||
CRA mutual funds | 882 | 836 |
Assets at fair value on a non-recurring basis | ||
Collateral dependent impaired loans | ||
Other real estate owned | ||
Fair Value Measurements Using - Level 2 | ||
Assets at fair value on a recurring basis | ||
U.S. Government Agency notes | 4,644 | 7,670 |
Municipal bonds | 27,193 | 5,379 |
Mortgage backed securities: U.S. Government agencies and U.S. Government-sponsored enterprises | 29,357 | 57,446 |
Collateralized mortgage obligations: U.S. Government agencies | 25,499 | 17,747 |
Corporate bonds | 5,108 | 3,576 |
Securities available-for-sale | 91,801 | 91,818 |
CRA mutual funds | ||
Assets at fair value on a non-recurring basis | ||
Collateral dependent impaired loans | ||
Other real estate owned | ||
Fair Value Measurements Using - Level 3 | ||
Assets at fair value on a recurring basis | ||
U.S. Government Agency notes | ||
Municipal bonds | ||
Mortgage backed securities: U.S. Government agencies and U.S. Government-sponsored enterprises | ||
Collateralized mortgage obligations: U.S. Government agencies | ||
Corporate bonds | ||
Securities available-for-sale | ||
CRA mutual funds | ||
Assets at fair value on a non-recurring basis | ||
Collateral dependent impaired loans | 1,593 | 4,238 |
Other real estate owned | $ 314 | $ 1,810 |
FAIR VALUE MEASUREMENTS - Carry
FAIR VALUE MEASUREMENTS - Carrying value and estimated fair values of financial instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Carrying value | ||
Financial Assets | ||
Cash and cash equivalents | $ 26,885 | $ 58,445 |
Interest bearing time deposits with financial institutions | 750 | |
Securities available-for-sale | 91,801 | 91,818 |
CRA mutual fund | 882 | 836 |
Federal Home Loan Bank of Boston stock | 3,242 | 4,496 |
Loans held-for-sale | 332 | |
Loans receivable, net | 927,413 | 909,279 |
Accrued interest receivable | 3,415 | 3,148 |
Cash surrender value of life insurance policies | 20,580 | 14,438 |
Financial Liabilities | ||
Demand (non-interest-bearing) | 237,852 | 228,448 |
Demand (interest-bearing) | 153,314 | 153,586 |
Money market | 239,504 | 204,219 |
Savings and other | 161,112 | 178,807 |
Certificates of deposit | 127,724 | 161,679 |
Deposits | 919,506 | 926,739 |
Repurchase agreements | 8,530 | 4,104 |
FHLBB advances | 50,887 | 67,154 |
Subordinated debt | 9,859 | 9,835 |
Note payable | 246 | 280 |
Finance lease liability | 1,718 | 3,081 |
Accrued interest payable | 78 | 237 |
Estimated fair value | ||
Financial Assets | ||
Cash and cash equivalents | 26,885 | 58,445 |
Interest bearing time deposits with financial institutions | 750 | |
Securities available-for-sale | 91,801 | 91,818 |
CRA mutual fund | 882 | 836 |
Federal Home Loan Bank of Boston stock | 3,242 | 4,496 |
Loans held-for-sale | 334 | |
Loans receivable, net | 933,287 | 886,222 |
Accrued interest receivable | 3,415 | 3,148 |
Cash surrender value of life insurance policies | 20,580 | 14,438 |
Financial Liabilities | ||
Demand (non-interest-bearing) | 237,852 | 228,448 |
Demand (interest-bearing) | 153,314 | 153,586 |
Money market | 239,504 | 204,219 |
Savings and other | 161,112 | 178,807 |
Certificates of deposit | 128,629 | 162,013 |
Deposits | 920,411 | 927,073 |
Repurchase agreements | 8,530 | 4,104 |
FHLBB advances | 51,028 | 67,231 |
Subordinated debt | 10,113 | 10,006 |
Note payable | 251 | 288 |
Finance lease liability | 1,967 | 3,339 |
Accrued interest payable | 78 | 237 |
Fair Value Measurements Using - Level 1 | ||
Financial Assets | ||
Cash and cash equivalents | 26,885 | 58,445 |
Interest bearing time deposits with financial institutions | 750 | |
Securities available-for-sale | ||
CRA mutual fund | 882 | 836 |
Federal Home Loan Bank of Boston stock | 3,242 | 4,496 |
Loans held-for-sale | ||
Loans receivable, net | ||
Accrued interest receivable | 3,415 | 3,148 |
Cash surrender value of life insurance policies | 20,580 | 14,438 |
Financial Liabilities | ||
Demand (non-interest-bearing) | ||
Demand (interest-bearing) | ||
Money market | ||
Savings and other | ||
Certificates of deposit | ||
Deposits | ||
Repurchase agreements | ||
FHLBB advances | ||
Subordinated debt | 10,113 | 10,006 |
Note payable | ||
Finance lease liability | ||
Accrued interest payable | 78 | 237 |
Fair Value Measurements Using - Level 2 | ||
Financial Assets | ||
Cash and cash equivalents | ||
Interest bearing time deposits with financial institutions | ||
Securities available-for-sale | 91,801 | 91,818 |
CRA mutual fund | ||
Federal Home Loan Bank of Boston stock | ||
Loans held-for-sale | ||
Loans receivable, net | ||
Accrued interest receivable | ||
Cash surrender value of life insurance policies | ||
Financial Liabilities | ||
Demand (non-interest-bearing) | 237,852 | 228,448 |
Demand (interest-bearing) | 153,314 | 153,586 |
Money market | 239,504 | 204,219 |
Savings and other | 161,112 | 178,807 |
Certificates of deposit | 128,629 | 162,013 |
Deposits | 920,411 | 927,073 |
Repurchase agreements | 8,530 | 4,104 |
FHLBB advances | 51,028 | 67,231 |
Subordinated debt | ||
Note payable | 251 | 288 |
Finance lease liability | ||
Accrued interest payable | ||
Fair Value Measurements Using - Level 3 | ||
Financial Assets | ||
Cash and cash equivalents | ||
Interest bearing time deposits with financial institutions | ||
Securities available-for-sale | ||
CRA mutual fund | ||
Federal Home Loan Bank of Boston stock | ||
Loans held-for-sale | 334 | |
Loans receivable, net | 933,287 | 886,222 |
Accrued interest receivable | ||
Cash surrender value of life insurance policies | ||
Financial Liabilities | ||
Demand (non-interest-bearing) | ||
Demand (interest-bearing) | ||
Money market | ||
Savings and other | ||
Certificates of deposit | ||
Deposits | ||
Repurchase agreements | ||
FHLBB advances | ||
Subordinated debt | ||
Note payable | ||
Finance lease liability | 1,967 | 3,339 |
Accrued interest payable |
SALISBURY BANCORP (PARENT ONLY)
SALISBURY BANCORP (PARENT ONLY) CONDENSED FINANCIAL INFORMATION - Unconsolidated balance sheets of Salisbury Bancorp, Inc. (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||||
Cash and due from banks | $ 7,406 | $ 7,238 | ||
Other assets | 3,390 | 2,635 | ||
Total Assets | 1,112,448 | 1,121,554 | ||
Liabilities and Shareholders' Equity | ||||
Subordinated debt | 9,859 | 9,835 | ||
Shareholders' equity | 113,655 | 103,459 | $ 97,514 | $ 94,007 |
Total Liabilities and Shareholders' Equity | 1,112,448 | 1,121,554 | ||
Salisbury Bancorp, Inc. (Parent Only) | ||||
Assets | ||||
Cash and due from banks | 2,273 | 2,105 | ||
Investment in bank subsidiary | 121,027 | 110,525 | ||
Other assets | 252 | 689 | ||
Total Assets | 123,552 | 113,319 | ||
Liabilities and Shareholders' Equity | ||||
Subordinated debt | 9,859 | 9,835 | ||
Other liabilities | 38 | 25 | ||
Shareholders' equity | 113,655 | 103,459 | ||
Total Liabilities and Shareholders' Equity | $ 123,552 | $ 113,319 |
SALISBURY BANCORP (PARENT ONL_2
SALISBURY BANCORP (PARENT ONLY) CONDENSED FINANCIAL INFORMATION - Unconsolidated statements of income of Salisbury Bancorp, Inc. (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net income | $ 11,136 | $ 8,824 | $ 6,256 |
Salisbury Bancorp, Inc. (Parent Only) | |||
Dividends from subsidiary | 3,546 | 3,529 | 3,691 |
Interest income | 10 | 10 | 8 |
Interest expense | 624 | 624 | 624 |
Non-interest expenses | 417 | 435 | 530 |
Income before taxes and equity in undistributed net income of subsidiary | 2,515 | 2,480 | 2,545 |
Income tax benefit | 252 | 256 | 421 |
Income before equity in undistributed net income of subsidiary | 2,767 | 2,736 | 2,966 |
Equity in undistributed net income of subsidiary | 8,369 | 6,088 | 3,290 |
Net income | $ 11,136 | $ 8,824 | $ 6,256 |
SALISBURY BANCORP (PARENT ONL_3
SALISBURY BANCORP (PARENT ONLY) CONDENSED FINANCIAL INFORMATION - Unconsolidated statements of cash flows of Salisbury Bancorp, Inc. (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net income | $ 11,136 | $ 8,824 | $ 6,256 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Net cash provided by operating activities | 14,330 | 13,277 | 10,207 |
Investing Activities | |||
Net cash utilized by investing activities | (23,375) | (118,142) | (9,903) |
Financing Activities | |||
Common stock dividends paid | (3,155) | (3,133) | (3,113) |
Net cash (utilized) by financing activities | (22,515) | 114,824 | 12,697 |
Net increase (decrease) in cash and cash equivalents | (31,560) | 9,959 | 13,001 |
Salisbury Bancorp, Inc. (Parent Only) | |||
Net income | 11,136 | 8,824 | 6,256 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Equity in undistributed net income of subsidiary | (8,369) | (6,088) | (3,290) |
Other | 474 | (239) | (410) |
Net cash provided by operating activities | 3,241 | 2,497 | 2,556 |
Investing Activities | |||
Investment in bank | |||
Net cash utilized by investing activities | |||
Financing Activities | |||
Common stock dividends paid | (3,155) | (3,133) | (3,113) |
Proceeds from issuance of common stock | 82 | 222 | 395 |
Net cash (utilized) by financing activities | (3,073) | (2,911) | (2,718) |
Net increase (decrease) in cash and cash equivalents | 168 | (414) | (162) |
Cash and cash equivalents, beginning of period | 2,105 | 2,519 | 2,681 |
Cash and cash equivalents, end of period | $ 2,273 | $ 2,105 | $ 2,519 |
EARNINGS PER SHARE - Computatio
EARNINGS PER SHARE - Computation of earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||
Net income | $ 11,136 | $ 8,824 | $ 6,256 |
Less: Undistributed earnings allocated to participating securities | (160) | (111) | (55) |
Net income allocated to common stock | 10,976 | 8,713 | 6,201 |
Weighted average common shares issued | 2,817 | 2,798 | 2,779 |
Less: Unvested restricted stock awards | (35) | (35) | (24) |
Weighted average common shares outstanding used to calculate basic earnings per common share | 2,782 | 2,763 | 2,755 |
Add: Dilutive effect of stock options | 12 | 17 | 19 |
Weighted average common shares outstanding used to calculate diluted earnings per common share | $ 2,794 | $ 2,780 | $ 2,774 |
Earnings per common share (basic) | $ 3.95 | $ 3.15 | $ 2.25 |
Earnings per common share (diluted) | $ 3.93 | $ 3.13 | $ 2.24 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) | Jan. 24, 2020$ / shares |
Subsequent Events [Abstract] | |
Dividend declared | $ .29 |
SELECTED QUARTERLY CONSOLIDAT_3
SELECTED QUARTERLY CONSOLIDATED FINANCIAL DATA - Selected quarterly consolidated financial data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Income | |||||||||||
Interest and dividend income | $ 43,413 | $ 40,372 | $ 35,521 | ||||||||
Interest expense | 9,301 | 7,221 | 4,238 | ||||||||
Net interest and dividend income | 34,112 | 33,151 | 31,283 | ||||||||
Provision (benefit) for loan losses | 955 | 1,728 | 1,020 | ||||||||
Trust and Wealth Advisory | 3,995 | 3,700 | 3,477 | ||||||||
Service charges and fees | 4,028 | 3,718 | 3,718 | ||||||||
Gains (Losses) on sales of mortgage loans, net | 116 | 89 | 125 | ||||||||
Mortgage servicing, net | 307 | 308 | 255 | ||||||||
Gains (Losses) on CRA mutual fund | 25 | (18) | |||||||||
(Losses) Gains on sales of available -for-sale- securities, net | 263 | 318 | 178 | ||||||||
BOLI income and gains | 392 | 678 | 343 | ||||||||
Other | 124 | 152 | 140 | ||||||||
Non-interest income | 9,250 | 8,945 | 8,236 | ||||||||
Non-interest expense | 28,912 | 29,835 | 29,329 | ||||||||
Income before income taxes | 13,495 | 10,533 | 9,170 | ||||||||
Net income allocated to common stock | 10,976 | 8,713 | $ 6,201 | ||||||||
Financial Condition | |||||||||||
Total assets | $ 1,112,448 | $ 1,121,554 | 1,112,448 | 1,121,554 | |||||||
Loans, net | 927,413 | 909,279 | $ 927,413 | $ 909,279 | |||||||
Per Common Share Data | |||||||||||
Earnings, basic | $ 3.95 | $ 3.15 | $ 2.25 | ||||||||
Earnings, diluted | 3.93 | 3.13 | 2.24 | ||||||||
Cash dividends declared | $ 1.12 | $ 1.12 | $ 1.12 | ||||||||
Statistical Data | |||||||||||
Weighted average common shares outstanding, basic | 2,782 | 2,763 | 2,755 | ||||||||
Selected quarterly consolidated financial data | |||||||||||
Statement of Income | |||||||||||
Interest and dividend income | 10,705 | $ 11,023 | $ 10,832 | $ 10,854 | 10,807 | $ 10,516 | $ 9,749 | $ 9,300 | |||
Interest expense | 2,040 | 2,356 | 2,488 | 2,417 | 2,192 | 2,016 | 1,706 | 1,306 | |||
Net interest and dividend income | 8,665 | 8,667 | 8,344 | 8,437 | 8,615 | 8,500 | 8,043 | 7,993 | |||
Provision (benefit) for loan losses | 417 | 94 | 151 | 294 | 558 | 378 | 467 | 325 | |||
Trust and Wealth Advisory | 1,022 | 1,023 | 1,044 | 906 | 921 | 936 | 949 | 894 | |||
Service charges and fees | 1,092 | 1,003 | 1,012 | 920 | 1,025 | 932 | 892 | 868 | |||
Gains (Losses) on sales of mortgage loans, net | 67 | 42 | 1 | 7 | 51 | 21 | (1) | 18 | |||
Mortgage servicing, net | 75 | 76 | 80 | 76 | 57 | 84 | 84 | 83 | |||
Gains (Losses) on CRA mutual fund | (4) | 6 | 12 | 11 | 8 | (6) | (7) | (13) | |||
(Losses) Gains on sales of available -for-sale- securities, net | (9) | 281 | (9) | 302 | 17 | (2) | |||||
BOLI income and gains | 139 | 86 | 87 | 79 | 432 | 83 | 82 | 82 | |||
Other | 28 | 29 | 31 | 37 | 28 | 38 | 42 | 45 | |||
Non-interest income | 2,419 | 2,256 | 2,548 | 2,027 | 2,824 | 2,088 | 2,058 | 1,975 | |||
Non-interest expense | 7,080 | 7,184 | 7,439 | 7,211 | 7,909 | 7,329 | 7,417 | 7,180 | |||
Income before income taxes | 3,587 | 3,645 | 3,302 | 2,959 | 2,972 | 2,881 | 2,217 | 2,463 | |||
Income tax provision | 578 | 657 | 599 | 525 | 408 | 537 | 318 | 446 | |||
Net income | 3,009 | 2,988 | 2,703 | 2,434 | 2,564 | 2,344 | 1,899 | 2,017 | |||
Net income allocated to common stock | 2,960 | 2,940 | 2,671 | 2,408 | 2,528 | 2,311 | 1,877 | 1,997 | |||
Financial Condition | |||||||||||
Total assets | 1,112,448 | 1,144,240 | 1,119,212 | 1,118,925 | 1,121,554 | 1,098,715 | 1,096,780 | 1,014,934 | $ 1,112,448 | $ 1,121,554 | |
Loans, net | 927,413 | 915,083 | 910,573 | 911,188 | 909,279 | 898,625 | 872,796 | 830,370 | 927,413 | 909,279 | |
Allowance for loan losses | 8,895 | 8,846 | 8,887 | 8,750 | 7,831 | 7,745 | 7,381 | 7,058 | 8,895 | 7,831 | |
Securities | 95,925 | 98,270 | 103,857 | 102,479 | 97,150 | 101,591 | 90,870 | 84,878 | 95,925 | 97,150 | |
Deposits | 919,506 | 966,178 | 950,723 | 941,969 | 926,739 | 902,161 | 897,481 | 831,837 | 919,506 | 926,739 | |
Repurchase agreements | 8,530 | 8,588 | 6,308 | 2,951 | 4,104 | 6,658 | 1,691 | 3,962 | 8,530 | 4,104 | |
FHLBB advances | 50,887 | 37,828 | 32,769 | 47,712 | 67,154 | 67,596 | 79,538 | 62,480 | 50,887 | 67,154 | |
Shareholders' equity | 113,655 | 111,580 | 108,948 | 106,109 | 103,459 | 100,767 | 99,180 | 98,097 | 113,655 | 103,459 | |
Non-performing assets | $ 3,935 | $ 5,687 | $ 5,463 | $ 7,130 | $ 8,324 | $ 8,513 | $ 6,359 | $ 5,761 | $ 3,935 | $ 8,324 | |
Per Common Share Data | |||||||||||
Earnings, basic | $ 1.06 | $ 1.06 | $ 0.96 | $ 0.87 | $ 0.91 | $ 0.84 | $ 0.68 | $ 0.72 | |||
Earnings, diluted | 1.06 | 1.05 | 0.95 | 0.86 | 0.91 | 0.83 | 0.68 | 0.71 | |||
Cash dividends declared | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 | |||
Cash dividends paid | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 | |||
Book value | 40.22 | 39.52 | 38.59 | 37.81 | 36.86 | 35.93 | 35.38 | 35.20 | |||
Market price: High | 47.05 | 40 | 42.60 | 44.20 | 43.04 | 48.44 | 46.70 | 49.85 | |||
Market price: Low | $ 37.42 | $ 35.26 | $ 37.20 | $ 35.25 | $ 35.25 | $ 40.36 | $ 38.15 | $ 44 | |||
Statistical Data | |||||||||||
Net interest margin (fully tax equivalent) | 3.34% | 3.29% | 3.19% | 3.28% | 3.34% | 3.29% | 3.31% | 3.46% | |||
Efficiency ratio (fully tax equivalent) | 61.81% | 62.90% | 65.81% | 66.15% | 69.13% | 66.91% | 70.87% | 69.35% | |||
Return on average assets | 1.07% | 1.05% | 0.97% | 0.89% | 0.92% | 0.85% | 0.69% | 0.81% | |||
Return on average shareholders' equity | 10.56% | 10.73% | 10.07% | 9.45% | 9.99% | 9.26% | 7.68% | 8.33% | |||
Weighted average common shares outstanding, basic | 2,781 | 2,783 | 2,780 | 2,777 | 2,766 | 2,764 | 2,761 | 2,759 | |||
Weighted average common shares outstanding, diluted | 2,794 | 2,795 | 2,793 | 2,789 | 2,779 | 2,779 | 2,779 | 2,780 |