Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 03, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Western New England Bancorp, Inc. | |
Entity Central Index Key | 1,157,647 | |
Document Type | 10-Q | |
Trading Symbol | WNEB | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 30,634,170 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
ASSETS | ||
CASH AND DUE FROM BANKS | $ 25,108 | $ 23,297 |
FEDERAL FUNDS SOLD | 885 | 4,388 |
INTEREST-BEARING DEPOSITS AND OTHER SHORT-TERM INVESTMENTS | 2,907 | 42,549 |
CASH AND CASH EQUIVALENTS | 28,900 | 70,234 |
SECURITIES AVAILABLE-FOR-SALE - AT FAIR VALUE | 297,919 | 300,115 |
FEDERAL HOME LOAN BANK OF BOSTON AND OTHER RESTRICTED STOCK - AT COST | 15,704 | 16,124 |
LOANS - Net of allowance for loan losses of $10,518 and $10,068 at September 30, 2017 and December 31, 2016, respectively | 1,608,255 | 1,556,416 |
PREMISES AND EQUIPMENT, Net | 23,440 | 20,885 |
ACCRUED INTEREST RECEIVABLE | 5,764 | 5,782 |
BANK-OWNED LIFE INSURANCE | 68,307 | 66,938 |
DEFERRED TAX ASSET, Net | 15,636 | 16,159 |
GOODWILL | 12,487 | 13,747 |
CORE DEPOSIT INTANGIBLE | 4,156 | 4,438 |
OTHER REAL ESTATE OWNED | 103 | 298 |
OTHER ASSETS | 5,707 | 4,882 |
TOTAL ASSETS | 2,086,378 | 2,076,018 |
DEPOSITS : | ||
Non-interest-bearing | 308,934 | 303,993 |
Interest-bearing | 1,206,264 | 1,214,078 |
Total deposits | 1,515,198 | 1,518,071 |
SHORT-TERM BORROWINGS | 192,465 | 172,351 |
LONG-TERM DEBT | 106,339 | 124,836 |
SECURITIES PENDING SETTLEMENT | 137 | 455 |
OTHER LIABILITIES | 19,684 | 21,909 |
TOTAL LIABILITIES | 1,833,823 | 1,837,622 |
SHAREHOLDERS' EQUITY: | ||
Preferred stock - $0.01 par value, 5,000,000 shares authorized, none outstanding at September 30, 2017 and December 31, 2016 | ||
Common stock - $0.01 par value, 75,000,000 shares authorized, 30,816,813 shares issued and outstanding at September 30, 2017; 30,380,231 shares issued and outstanding at December 31, 2016 | 309 | 304 |
Additional paid-in capital | 206,914 | 205,996 |
Unearned compensation - ESOP | (5,946) | (6,418) |
Unearned compensation - Equity Incentive Plan | (950) | (536) |
Retained earnings | 61,695 | 51,711 |
Accumulated other comprehensive loss | (9,467) | (12,661) |
Total shareholders' equity | 252,555 | 238,396 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 2,086,378 | $ 2,076,018 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for loan losses | $ 10,518 | $ 10,068 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized | 75,000,000 | 75,000,000 |
Common stock, issued | 30,816,813 | 30,380,231 |
Common stock, outstanding | 30,816,813 | 30,380,231 |
CONSOLIDATED STATEMENTS OF NET
CONSOLIDATED STATEMENTS OF NET INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
INTEREST AND DIVIDEND INCOME: | ||||
Residential and commercial real estate loans | $ 13,474 | $ 7,367 | $ 40,042 | $ 20,803 |
Commercial and industrial loans | 2,883 | 1,728 | 8,180 | 5,098 |
Consumer loans | 88 | 43 | 260 | 126 |
Debt securities, taxable | 1,828 | 1,618 | 5,529 | 5,723 |
Debt securities, tax-exempt | 25 | 32 | 81 | 136 |
Equity securities | 35 | 45 | 105 | 140 |
Other investments | 172 | 130 | 501 | 398 |
Federal funds sold, interest-bearing deposits and other short-term investments | 11 | 14 | 103 | 67 |
Total interest and dividend income | 18,516 | 10,977 | 54,801 | 32,491 |
INTEREST EXPENSE: | ||||
Deposits | 2,111 | 1,582 | 6,180 | 4,589 |
Long-term debt | 534 | 446 | 1,633 | 1,749 |
Short-term borrowings | 1,075 | 621 | 2,946 | 1,580 |
Total interest expense | 3,720 | 2,649 | 10,759 | 7,918 |
Net interest and dividend income | 14,796 | 8,328 | 44,042 | 24,573 |
PROVISION FOR LOAN LOSSES | 200 | 375 | 850 | 400 |
Net interest and dividend income after provision for loan losses | 14,596 | 7,953 | 43,192 | 24,173 |
NON-INTEREST INCOME (LOSS): | ||||
Service charges and fees | 1,714 | 953 | 4,789 | 2,696 |
Income from bank-owned life insurance | 450 | 369 | 1,369 | 1,133 |
Loss on prepayment of borrowings | (915) | |||
Gain on sales of securities, net | 70 | 1 | 52 | 684 |
Gain on sale of OREO | 67 | 67 | ||
Other income | 111 | 227 | ||
Total non-interest income | 2,412 | 1,323 | 6,504 | 3,598 |
NON-INTEREST EXPENSE: | ||||
Salaries and employee benefits | 6,490 | 4,057 | 18,954 | 11,709 |
Occupancy | 891 | 555 | 2,815 | 1,712 |
Furniture and equipment | 410 | 242 | 1,149 | 723 |
Data processing | 680 | 404 | 1,740 | 1,167 |
Professional fees | 642 | 656 | 1,919 | 1,717 |
FDIC insurance assessment | 163 | 214 | 466 | 594 |
Merger related expenses | 830 | 626 | 1,913 | |
Advertising | 328 | 192 | 961 | 696 |
Other | 1,552 | 1,075 | 4,792 | 3,064 |
Total non-interest expense | 11,156 | 8,225 | 33,422 | 23,295 |
INCOME BEFORE INCOME TAXES | 5,852 | 1,051 | 16,274 | 4,476 |
INCOME TAX PROVISION | 2,037 | 423 | 3,600 | 1,495 |
NET INCOME | $ 3,815 | $ 628 | $ 12,674 | $ 2,981 |
EARNINGS PER COMMON SHARE: | ||||
Basic earnings per share (in dollars per share) | $ 0.13 | $ 0.04 | $ 0.42 | $ 0.17 |
Weighted average shares outstanding (in shares) | 30,103,095 | 17,377,844 | 29,895,621 | 17,340,101 |
Diluted earnings per share (in dollars per share) | $ 0.13 | $ 0.02 | $ 0.42 | $ 0.17 |
Weighted average diluted shares outstanding (in shares) | 30,219,083 | 17,377,844 | 30,074,361 | 17,340,101 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net income | $ 3,815 | $ 628 | $ 12,674 | $ 2,981 | |
Unrealized gains (losses) on securities: | |||||
Unrealized holding gains (losses) on available for sale securities | 381 | (359) | 2,133 | 5,820 | |
Reclassification adjustment for gains realized in income | [1] | (70) | (1) | (52) | (684) |
Amortization of net unrealized loss on held-to-maturity securities | [2] | 26 | |||
Net unrealized loss upon transfer of held-to-maturity to available-for-sale | [3] | 2,288 | |||
Net unrealized gains (losses) | 311 | (360) | 2,081 | 7,450 | |
Tax effect | (100) | 125 | (627) | (2,567) | |
Net-of-tax amount | 211 | (235) | 1,454 | 4,883 | |
Derivative instruments: | |||||
Change in fair value of derivatives used for cash flow hedges | (14) | 417 | (307) | (2,863) | |
Reclassification adjustment for loss realized in interest expense | [4] | 228 | 128 | 751 | 313 |
Reclassification adjustment for termination fee realized in interest expense | [5] | 269 | 269 | 799 | 687 |
Net adjustments relating to derivative instruments | 483 | 814 | 1,243 | (1,863) | |
Tax effect | (133) | (277) | 32 | 633 | |
Net-of-tax amount | 350 | 537 | 1,275 | (1,230) | |
Defined benefit pension plans: | |||||
Amortization of defined benefit plans actuarial loss | [6] | 51 | 24 | 153 | 71 |
Tax effect | 28 | (8) | 312 | (24) | |
Net-of-tax amount | 79 | 16 | 465 | 47 | |
Other comprehensive income | 640 | 318 | 3,194 | 3,700 | |
Comprehensive income | $ 4,455 | $ 946 | $ 15,868 | $ 6,681 | |
[1] | Realized gains on available-for-sale securities are recognized as a component of non-interest income. The tax effects applicable to net realized gains were $29,000 and $407 for the three months ended September 30, 2017 and 2016, respectively. The tax effects applicable to net realized gains were $21,000 and $236,000 for the nine months ended September 30, 2017 and 2016, respectively. | ||||
[2] | Amortization of net unrealized gains on held-to-maturity securities is recognized as a component of interest income on debt securities. Income tax effects associated with the reclassification adjustments were $(9,000) for the nine months ended September 30, 2016. | ||||
[3] | Income tax effect associated with the reclassification adjustments upon transfer of held-to-maturity to available-for-sale was $790,000 for the nine months ended September 30, 2016. | ||||
[4] | Loss realized in interest expense on derivative instruments is recognized as a component of interest expense on short-term debt. Income tax effects associated with the reclassification adjustment were $93,000 and $44,000 for the three months ended September 30, 2017 and 2016, respectively. Income tax effects associated with the reclassification adjustment were $307,000 and $106,000 for the nine months ended September 30, 2017 and 2016, respectively | ||||
[5] | Loss realized in interest expense on derivative instruments is recognized as a component of interest expense on short-term debt. Income tax effects associated with the reclassification adjustment were $110,000 and $91,000 for the three months ended September 30, 2017 and 2016, respectively. Income tax effects associated with the reclassification adjustment were $326,000 and $234,000 for the nine months ended September 30, 2017 and 2016, respectively | ||||
[6] | Amounts represent the reclassification of defined benefit plans amortization and have been recognized as a component of salaries and employee benefit expense. Income tax effects associated with the reclassification adjustments were $(21,000) and $8,000 for the three months ended September 30, 2017 and 2016, respectively. Income tax effects associated with the reclassification adjustments were $(63,000) and $24,000 for the nine months ended September 30, 2017 and 2016, respectively. |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Income tax expense (benefits) on realized gains reclassification adjustment | $ 29,000 | $ 407 | $ 21,000 | $ 236,000 |
Income tax expense (benefits) on amortization of net unrealized (gain) loss on held-to-maturity securities | (9,000) | |||
Income tax expense (benefits) on net unrealized (loss) gain upon transfer of held-to-maturity to available-for-sale | 790,000 | |||
Income tax expense (benefits), derivative instruments | 93,000 | 44,000 | 307,000 | 106,000 |
Income tax benefit on termination fee on derivative instruments | 110,000 | 91,000 | 326,000 | 234,000 |
Income tax expense (benefits), defined benefit plans | $ (21,000) | $ 8,000 | $ (63,000) | $ 24,000 |
Tax rate adjustments (in percent) | 40.85% | 34.00% |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Unearned Compensation-ESOP [Member] | Unearned Compensation-Equity Incentive Plan [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Total |
BEGINNING BALANCE at Dec. 31, 2015 | $ 183 | $ 108,210 | $ (6,952) | $ (313) | $ 49,316 | $ (10,978) | $ 139,466 |
BEGINNING BALANCE (in shares) at Dec. 31, 2015 | 18,267,747 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Comprehensive income | 2,981 | 3,700 | 6,681 | ||||
Common stock held by ESOP committed to be released (93,679 and 74,430 shares at June 30, 2017 and June 30, 2016 respectively) | 62 | 382 | 444 | ||||
Share-based compensation - equity incentive plan | 186 | 186 | |||||
Excess tax benefit from equity incentive plan | 5 | 5 | |||||
Issuance of common stock in connection with equity incentive plan | $ 1 | 484 | (485) | ||||
Issuance of common stock in connection with equity incentive plan (in shares) | 62,740 | ||||||
Cash dividends declared and paid ($0.09 per share) | (1,559) | (1,559) | |||||
ENDING BALANCE at Sep. 30, 2016 | $ 184 | 108,761 | (6,570) | (612) | 50,738 | (7,278) | 145,223 |
ENDING BALANCE (in shares) at Sep. 30, 2016 | 18,330,487 | ||||||
BEGINNING BALANCE at Dec. 31, 2016 | $ 304 | 205,996 | (6,418) | (536) | 51,711 | (12,661) | 238,396 |
BEGINNING BALANCE (in shares) at Dec. 31, 2016 | 30,380,231 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Comprehensive income | 12,674 | 3,194 | 15,868 | ||||
Common stock held by ESOP committed to be released (93,679 and 74,430 shares at June 30, 2017 and June 30, 2016 respectively) | 226 | 472 | 698 | ||||
Share-based compensation - equity incentive plan | 490 | 490 | |||||
Issuance of common stock in connection with equity incentive plan | $ 1 | 903 | (904) | ||||
Issuance of common stock in connection with equity incentive plan (in shares) | 89,042 | ||||||
Cash dividends declared and paid ($0.09 per share) | (2,690) | (2,690) | |||||
Common stock repurchased | $ (5) | (5,667) | (5,672) | ||||
Common stock repurchased (in shares) | (574,309) | ||||||
Issuance of common stock in connection with stock option exercises | $ 9 | 5,456 | 5,465 | ||||
Issuance of common stock in connection with stock option exercises (in shares) | 921,849 | ||||||
ENDING BALANCE at Sep. 30, 2017 | $ 309 | $ 206,914 | $ (5,946) | $ (950) | $ 61,695 | $ (9,467) | $ 252,555 |
ENDING BALANCE (in shares) at Sep. 30, 2017 | 30,816,813 |
CONSOLIDATED STATEMENTS OF CHA8
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Stockholders' Equity [Abstract] | ||
Common stock held by ESOP committed to be released, shares | 93,679 | 74,430 |
Cash dividends declared, per share | $ 0.09 | $ 0.09 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
OPERATING ACTIVITIES: | ||
Net income | $ 12,674 | $ 2,981 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for loan losses | 850 | 400 |
Depreciation and amortization of premises and equipment | 1,468 | 969 |
Accretion of purchase accounting adjustments, net | (1,431) | |
Amortization of core deposit intangible | 282 | |
Net amortization of premiums and discounts on securities and mortgage loans | 2,577 | 2,758 |
Net amortization of premiums on modified debt | 60 | |
Share-based compensation expense | 490 | 186 |
ESOP expense | 698 | 444 |
Excess tax benefits from equity incentive plan | (5) | |
Net gains on sales of securities | (52) | (684) |
Gain on sale of other real estate owned | (67) | |
Loss on prepayment of borrowings | 915 | |
Deferred income tax benefit | (973) | |
Income from bank-owned life insurance | (1,369) | (1,133) |
Changes in assets and liabilities: | ||
Accrued interest receivable | 18 | 300 |
Other assets | (3,578) | (1,468) |
Other liabilities | 1,995 | (2,184) |
Net cash provided by operating activities | 13,582 | 3,539 |
Securities, held to maturity: | ||
Proceeds from calls, maturities, and principal collections | 6,835 | |
Securities, available for sale: | ||
Purchases | (67,246) | (59,595) |
Proceeds from sales | 22,453 | 136,825 |
Proceeds from calls, maturities, and principal collections | 46,576 | 46,639 |
Purchase of residential mortgages | (48,205) | (107,632) |
Loan originations and principal payments, net | (4,133) | (21,185) |
Redemption of Federal Home Loan Bank of Boston stock | 420 | 2,880 |
Proceeds from sale of other real estate owned | 365 | |
Purchases of premises and equipment | (1,645) | (565) |
Proceeds from sale of premises and equipment | 20 | |
Net cash (used in) provided by investing activities | (51,415) | 4,222 |
FINANCING ACTIVITIES: | ||
Net (decrease) increase in deposits | (2,120) | 62,195 |
Net change in short-term borrowings | 20,114 | 51,866 |
Repayment of long-term debt | (19,700) | (84,333) |
Proceeds from long-term debt | 1,420 | 1,165 |
Cash dividends paid | (2,690) | (1,559) |
Common stock repurchased | (5,990) | |
Issuance of common stock in connection with stock option exercises | 5,465 | |
Excess tax benefits in connection with equity incentive plan | 5 | |
Net cash (used in) provided by financing activities | (3,501) | 29,339 |
NET CHANGE IN CASH AND CASH EQUIVALENTS: | (41,334) | 37,100 |
Beginning of period | 70,234 | 13,703 |
End of period | 28,900 | 50,803 |
Supplemental cashflow information: | ||
Securities reclassified from held-to-maturity to available-for-sale | (232,817) | |
Net change in cash due to broker for common stock repurchased | (318) | |
Interest paid | 10,774 | 8,036 |
Taxes paid | $ 3,658 | $ 2,150 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations The Bank’s deposits are insured to the limits specified by the Federal Deposit Insurance Corporation (“FDIC”). The Bank operates 21 banking offices in western Massachusetts and northern Connecticut, and its primary sources of revenue are earnings on loans to small and middle-market businesses and to residential property homeowners and income from securities. Wholly-Owned Subsidiaries and Acquisition Principles of Consolidation – Estimates – Basis of Presentation – These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2016, included in our Annual Report on Form 10-K for the year ended December 31, 2016 (the “2016 Annual Report”). Reclassifications – |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2017 | |
EARNINGS PER COMMON SHARE: | |
EARNINGS PER SHARE | 2. EARNINGS PER SHARE Basic earnings per share represent income available to shareholders divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect additional common shares that would have been outstanding if dilutive potential shares had been issued, as well as any adjustment to income that would result from the assumed issuance. No dilutive potential shares were outstanding during the periods presented. Share-based compensation awards that qualify as participating securities (entitled to receive non-forfeitable dividends) are included in basic earnings per share. Earnings per common share for the three and nine months ended September 30, 2017 and 2016 have been computed based on the following: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands, except per share data) Net income applicable to common stock $ 3,815 $ 628 $ 12,674 $ 2,981 Average number of common shares issued 31,001 18,330 30,799 18,298 Less: Average unallocated ESOP Shares (838 ) (926 ) (861 ) (945 ) Less: Average unvested equity incentive plan shares (60 ) (26 ) (42 ) (13 ) Average number of common shares outstanding used to calculate basic earnings per common share 30,103 17,378 29,896 17,340 Effect of dilutive equity incentive plan 26 — 12 — Effect of dilutive stock options 90 — 166 — Average number of common shares outstanding used to calculate diluted earnings per common share 30,219 17,378 30,074 17,340 Basic earnings per share $ 0.13 $ 0.04 $ 0.42 $ 0.17 Diluted earnings per share $ 0.13 $ 0.04 $ 0.42 $ 0.17 |
COMPREHENSIVE INCOME_LOSS
COMPREHENSIVE INCOME/LOSS | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
COMPREHENSIVE INCOME/LOSS | 3. COMPREHENSIVE INCOME/LOSS Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income. The components of accumulated other comprehensive loss included in shareholders’ equity are as follows: September 30, 2017 December 31, (In thousands) Net unrealized losses on securities available-for-sale $ (3,782 ) $ (5,863 ) Tax effect 1,397 2,024 Net-of-tax amount (2,385 ) (3,839 ) Fair value of derivatives used for cash flow hedges (2,709 ) (3,152 ) Termination fees on forward starting interest rate swaps (3,933 ) (4,733 ) Total derivatives (6,642 ) (7,885 ) Tax effect 2,713 2,681 Net-of-tax amount (3,929 ) (5,204 ) Unrecognized actuarial loss on defined benefit plan (5,329 ) (5,482 ) Tax effect 2,176 1,864 Net-of-tax amount (3,153 ) (3,618 ) Accumulated other comprehensive loss $ (9,467 ) $ (12,661 ) The following table presents changes in accumulated other comprehensive loss for the periods ended September 30, 2017 and 2016 by component: Securities Derivatives Defined Accumulated (In thousands) Balance at December 31, 2015 $ (3,046 ) $ (5,501 ) $ (2,431 ) $ (10,978 ) Current-period other comprehensive income (loss) 4,883 (1,230 ) 47 3,700 Balance at September 30, 2016 $ 1,837 $ (6,731 ) $ (2,384 ) $ (7,278 ) Balance at December 31, 2016 $ (3,839 ) $ (5,204 ) $ (3,618 ) $ (12,661 ) Current-period other comprehensive income 1,454 1,275 465 3,194 Balance at September 30, 2017 $ (2,385 ) $ (3,929 ) $ (3,153 ) $ (9,467 ) |
SECURITIES
SECURITIES | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
SECURITIES | 4. SECURITIES Securities available-for-sale are summarized as follows: September 30, 2017 Amortized Gross Gross Fair Value (In thousands) Available-for-sale securities: Government-sponsored mortgage-backed securities $ 193,037 $ 120 $ (2,836 ) $ 190,321 U.S. government guaranteed mortgage-backed securities 17,408 — (447 ) 16,961 Corporate bonds 56,192 582 (221 ) 56,553 State and municipal bonds 3,223 39 (37 ) 3,225 Government-sponsored enterprise obligations 25,150 — (697 ) 24,453 Mutual funds 6,691 — (285 ) 6,406 Total available-for-sale $ 301,701 $ 741 $ (4,523 ) $ 297,919 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Available-for-sale securities: Government-sponsored mortgage-backed securities $ 184,127 $ 33 $ (4,024 ) $ 180,136 U.S. government guaranteed mortgage-backed securities 17,753 — (403 ) 17,350 Corporate bonds 50,255 265 (203 ) 50,317 State and municipal bonds 4,117 13 (122 ) 4,008 Government-sponsored enterprise obligations 43,140 — (1,132 ) 42,008 Mutual funds 6,586 — (290 ) 6,296 Total available-for-sale securities $ 305,978 $ 311 $ (6,174 ) $ 300,115 Our repurchase agreements are collateralized by government-sponsored enterprise obligations and certain mortgage-backed securities (see Note 8). The amortized cost and fair value of available-for-sale debt securities at September 30, 2017, by maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers have the right to call or repay obligations. Also, because mortgage-backed securities require periodic principal paydowns, they are not included in the maturity categories in the following maturity summary. September 30, 2017 Amortized Cost Fair Value (In thousands) Available for securities: Debt securities: Due in one year or less $ — $ — Due after one year through five years 28,079 28,497 Due after five years through ten years 49,735 49,149 Due after ten years 6,751 6,585 Total securities $ 84,565 $ 84,231 Mortgage-backed securities 210,445 207,282 Total $ 295,010 $ 291,513 Gross realized gains and losses on sales of securities available-for-sale for the three and nine months ended September 30, 2017 and 2016 are as follows: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands) Gross gains realized $ 71 $ 1 $ 117 $ 1,521 Gross losses realized (1 ) — (65 ) (837 ) Net gain realized $ 70 $ 1 $ 52 $ 684 Proceeds from the sale of securities available-for-sale amounted to $22.5 million and $136.8 million for the nine months ended September 30, 2017 and 2016, respectively. Information pertaining to securities with gross unrealized losses at September 30, 2017 and December 31, 2016, aggregated by investment category and length of time that individual securities have been in a continuous loss position are as follows: September 30, 2017 Less Than 12 Months Over 12 Months Gross Fair Value Gross Fair Value (In thousands) Available-for-sale: Government-sponsored mortgage-backed securities $ 1,022 $ 105,596 $ 1,814 $ 61,415 U.S. government guaranteed mortgage-backed securities 160 9,874 287 7,086 Corporate bonds 210 20,915 11 2,058 State and municipal bonds — — 37 1,564 Government-sponsored enterprise obligations 129 5,021 568 19,432 Mutual funds 57 3,508 228 2,898 Total available-for-sale $ 1,578 $ 144,914 $ 2,945 $ 94,453 December 31, 2016 Less Than 12 Months Over 12 Months Gross Fair Value Gross Fair Value (In thousands) Available-for-sale: Government-sponsored mortgage-backed securities $ 3,016 $ 147,691 $ 1,008 $ 27,303 U.S. government guaranteed mortgage-backed securities 192 12,536 211 4,814 Corporate bonds 203 18,481 — — State and municipal bonds 95 1,507 27 305 Government-sponsored enterprise obligations 1,132 42,008 — — Mutual funds 79 3,429 211 2,867 Total available-for-sale $ 4,717 $ 225,652 $ 1,457 $ 35,289 September 30, 2017 Less Than 12 Months Over 12 Months Number of Securities Amortized Gross Depreciation from Amortized Cost Basis (%) Number of Securities Amortized Cost Basis Gross Loss Depreciation from Amortized Cost Basis (%) (Dollars in thousands) Government-sponsored mortgage-backed securities 41 $ 106,618 $ 1,022 1.0 % 27 $ 63,229 $ 1,814 2.9 % U.S. government guaranteed mortgage-backed securities 3 10,034 160 1.6 4 7,373 287 3.9 Corporate bonds 7 21,125 210 1.0 1 2,069 11 0.5 Government-sponsored enterprise obligations 1 5,150 129 2.5 8 20,000 568 2.8 State and municipal bonds — — — — 3 1,601 37 2.3 Mutual funds 1 3,565 57 1.6 2 3,126 228 7.3 $ 146,492 $ 1,578 $ 97,398 $ 2,945 These unrealized losses are the result of changes in interest rates and not credit quality. Because we do not intend to sell the securities and it is more likely than not that we will not be required to sell the investments before recovery of their amortized cost basis, no declines are deemed to be other-than-temporary. |
LOANS AND ALLOWANCE FOR LOAN LO
LOANS AND ALLOWANCE FOR LOAN LOSSES | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
LOANS AND ALLOWANCE FOR LOAN LOSSES | 5. LOANS AND ALLOWANCE FOR LOAN LOSSES Loans consisted of the following amounts: September 30, December 31, 2017 2016 (In thousands) Commercial real estate $ 716,890 $ 720,741 Residential real estate: Residential 555,768 522,083 Home equity 92,359 92,083 Commercial and industrial 244,374 222,286 Consumer 4,467 4,424 Total Loans 1,613,858 1,561,617 Unearned premiums and deferred loan fees and costs, net 4,915 4,867 Allowance for loan losses (10,518 ) (10,068 ) $ 1,608,255 $ 1,556,416 During the nine months ended September 30, 2017 and 2016, we purchased residential real estate loans aggregating $48.2 million and $107.6 million, respectively. We have transferred a portion of our originated commercial real estate and commercial and industrial loans to participating lenders. The amounts transferred have been accounted for as sales and are therefore not included in our accompanying unaudited consolidated balance sheets. We share ratably with our participating lenders in any gains or losses that may result from a borrower’s lack of compliance with contractual terms of the loan. We continue to 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 September 30, 2017 and December 31, 2016, we serviced commercial loans for participants aggregating $32.4 million and $42.6 million, respectively. Residential mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid balances of these loans totaled $67.8 million and $75.2 million at September 30, 2017 and December 31, 2016, respectively. Service fee income of $49,000 and $3,000 was recorded for the nine months ended September 30, 2017 and 2016, respectively, and is included in service charges and fees on the consolidated statements of net income. Residential real estate mortgages are originated by the Bank both for its portfolio and for sale into the secondary market. The Bank may sell its loans to institutional investors such as the Federal Home Loan Mortgage Corporation. Under loan sale and servicing agreements with the investor, the Bank generally continues to service the residential real estate mortgages. The Bank pays the investor an agreed upon rate on the loan, which is less than the interest rate received from the borrower. The Bank retains the difference as a fee for servicing the residential real estate mortgages. The Bank capitalizes mortgage servicing rights at their fair value upon sale of the related loans, amortizes the asset over the estimated life of the serviced loan, and periodically assesses the asset for impairment. The significant assumptions used by a third party to estimate the fair value of capitalized servicing rights at September 30, 2017, include weighted average prepayment speed for the portfolio using the Public Securities Association Standard Prepayment Model (203 PSA), weighted average internal rate of return (10.05%), weighted average servicing fee (0.2501%), and average net cost to service loans ($59.32 per loan). The estimated fair value of capitalized servicing rights may vary significantly in subsequent periods primarily due to changing market interest rates, and their effect on prepayment speeds and discount rates. A summary of the activity in the balances of mortgage servicing rights follows: Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 (In thousands) Balance at the beginning of period: $ 408 $ 465 Capitalized mortgage servicing rights — — Amortization (28 ) (85 ) Balance at the end of period $ 380 $ 380 Fair value at the end of period $ 538 $ 538 Prior to the acquisition of Chicopee in 2016, mortgage servicing rights were not material to the consolidated financial statements, and therefore, were not recorded. Loans are recorded at the principal amount outstanding, adjusted for charge-offs, unearned premiums and deferred loan fees and costs. Interest on loans is calculated using the effective yield method on daily balances of the principal amount outstanding and is credited to income on the accrual basis to the extent it is deemed collectable. Our general policy is to discontinue the accrual of interest when principal or interest payments are delinquent 90 days or more based on the contractual terms of the loan, or earlier if the loan is considered impaired. Any unpaid amounts previously accrued on these loans are reversed from income. Subsequent cash receipts are applied to the outstanding principal balance or to interest income if, in the judgment of management, collection of the principal balance is not in question. Loans are returned to accrual status when they become current as to both principal and interest and perform in accordance with contractual terms for a period of at least six months, reducing the concern as to the collectability of principal and interest. Loan fees and certain direct loan origination costs are deferred, and the net fee or cost is recognized as an adjustment to interest income over the estimated average lives of the related loans. The allowance for loan losses is established through provisions for loan losses charged to expense. Loans are charged-off against the allowance when management believes that the collectability of the principal is unlikely. Subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is evaluated on a regular basis by management. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The allowance consists of general, allocated, and unallocated components, as further described below. General component The general component of the allowance for loan losses is based on historical loss experience adjusted for qualitative factors stratified by the following loan segments: residential real estate (includes one-to-four family and home equity), commercial real estate, commercial and industrial, and consumer. Management uses a rolling average of historical losses based on a time frame appropriate to capture relevant loss data for each loan segment. This historical loss factor is adjusted for the following qualitative factors: trends in delinquencies and nonperforming loans; 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; and national and local economic trends and industry conditions. There were no changes in our policies or methodology pertaining to the general component of the allowance for loan losses during the periods presented for disclosure. 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 – We require private mortgage insurance for all loans originated with a loan-to-value ratio greater than 80% and we do not grant subprime loans. All loans in this segment are collateralized 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. Home equity loans are secured by first or second mortgages on one-to-four family owner occupied properties. Commercial real estate – Loans in this segment are primarily income-producing investment properties and owner-occupied commercial properties throughout New England. The underlying cash flows generated by the properties or operations can be adversely impacted by a downturn in the economy due to increased vacancy rates or diminished cash flows, which in turn, would have an effect on the credit quality in this segment. Management obtains financial information annually and continually monitors the cash flows of these loans. Commercial and industrial loans – Loans in this segment are made to businesses and are generally secured by assets of the business. Repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality in this segment. Consumer loans – Loans in this segment are secured or unsecured and repayment is dependent on the credit quality of the individual borrower. Allocated component The allocated component relates to loans that are classified as impaired. Impaired loans are identified by analysis of loan performance, internal credit ratings and watch list loans that management believes are subject to a higher risk of loss. Impairment is measured on a loan by loan basis for commercial real estate and commercial and industrial loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent. An allowance is established when the discounted cash flows (or collateral value) of the impaired loan is lower than the carrying value of that loan. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, we do not separately identify individual consumer and residential real estate loans for impairment disclosures, unless such loans are subject to a troubled debt restructuring agreement. A loan is considered impaired when, based on current information and events, it is probable that we 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. We determine 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. Unallocated component An unallocated component may be maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance, if any, reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating allocated and general reserves in the portfolio. An analysis of changes in the allowance for loan losses by segment for the periods ended September 30, 2017 and 2016 is as follows: Commercial Real Estate Residential Real Estate Commercial and Industrial Consumer Unallocated Total (In thousands) Three Months Ended Balance at June 30, 2016 $ 3,956 $ 2,804 $ 2,797 $ 20 $ (7 ) $ 9,570 Provision (credit) 62 189 83 43 (2 ) 375 Charge-offs — (40 ) — (46 ) — (86 ) Recoveries 59 — — 9 — 68 Balance at September 30, 2016 $ 4,077 $ 2,953 $ 2,880 $ 26 $ (9 ) $ 9,927 Balance at June 30, 2017 $ 4,472 $ 3,126 $ 2,754 $ 53 $ 13 $ 10,418 Provision (credit) (68 ) 146 (109 ) 83 148 200 Charge-offs — (107 ) — (104 ) — (211 ) Recoveries — 80 3 28 — 111 Balance at September 30, 2017 $ 4,404 $ 3,245 $ 2,648 $ 60 $ 161 $ 10,518 Nine Months Ended Balance at December 31, 2015 $ 3,856 $ 2,431 $ 2,485 $ 22 $ 46 $ 8,840 Provision (credit) (614 ) 610 395 64 (55 ) 400 Charge-offs (170 ) (90 ) — (87 ) — (347 ) Recoveries 1,005 2 — 27 — 1,034 Balance at September 30, 2016 $ 4,077 $ 2,953 $ 2,880 $ 26 $ (9 ) $ 9,927 Balance at December 31, 2016 $ 4,083 $ 2,862 $ 3,085 $ 38 $ — $ 10,068 Provision (credit) 239 427 (180 ) 203 161 850 Charge-offs (36 ) (148 ) (285 ) (237 ) — (706 ) Recoveries 118 104 28 56 — 306 Balance at September 30, 2017 $ 4,404 $ 3,245 $ 2,648 $ 60 $ 161 $ 10,518 Further information pertaining to the allowance for loan losses by segment at September 30, 2017 and December 31, 2016 follows: Commercial Real Estate Residential Real Estate Commercial and Industrial Consumer Unallocated Total (In thousands) September 30, 2017 Amount of allowance for impaired loans $ — $ — $ — $ — $ — $ — Amount of allowance for non-impaired loans 4,404 3,245 2,648 60 161 10,518 Total allowance for loan losses $ 4,404 $ 3,245 $ 2,648 $ 60 $ 161 $ 10,518 Impaired loans $ 3,993 $ 3,854 $ 2,869 $ 127 $ — $ 10,843 Non-impaired loans 699,945 640,622 240,421 4,340 — 1,585,328 Loans acquired with deteriorated credit quality 12,952 3,651 1,084 — — 17,687 Total loans $ 716,890 $ 648,127 $ 244,374 $ 4,467 $ — $ 1,613,858 December 31, 2016 Amount of allowance for impaired loans $ — $ — $ — $ — $ — $ — Amount of allowance for non-impaired loans 4,083 2,862 3,085 38 — 10,068 Total allowance for loan losses 4,083 2,862 3,085 38 — 10,068 Impaired loans $ 3,335 $ 452 $ 3,042 $ — $ — $ 6,829 Non-impaired loans 701,766 609,107 217,972 4,424 — 1,533,269 Loans acquired with deteriorated credit quality 15,640 4,607 1,272 — — 21,519 Total loans $ 720,741 $ 614,166 $ 222,286 $ 4,424 $ — $ 1,561,617 The following is a summary of past due and non-accrual loans by class at September 30, 2017 and December 31, 2016: 30 – 59 Days 60 – 89 Days Greater than Total Past Past Due 90 Loans on Non- (In thousands) September 30, 2017 Commercial real estate $ 196 $ 295 $ 136 $ 627 $ — $ 2,181 Residential real estate: Residential 2,308 570 572 3,450 — 1,744 Home equity 218 135 72 425 — 73 Commercial and industrial 472 59 108 639 — 2,700 Consumer 54 18 5 77 — 17 Total legacy loans 3,248 1,077 893 5,218 — 6,715 Loans acquired from Chicopee Savings Bank 2,957 1,610 1,279 5,846 — 6,450 Total $ 6,205 $ 2,687 $ 2,172 $ 11,064 $ — $ 13,165 December 31, 2016 Commercial real estate $ 302 $ 555 $ 137 $ 994 $ — $ 2,740 Residential real estate: Residential 791 262 689 1,742 — 1,658 Home equity 208 36 — 244 — 37 Commercial and industrial 326 32 — 358 — 3,214 Consumer 27 9 7 43 — 14 Total legacy loans 1,654 894 833 3,381 — 7,663 Loans acquired from Chicopee Savings Bank 3,854 1,907 551 6,312 — 6,394 Total past due loans $ 5,508 $ 2,801 $ 1,384 $ 9,693 $ — $ 14,057 The following is a summary of impaired loans by class at and for the periods ended September 30, 2017 and December 31, 2016: Impaired Loans (1)(2) Three Months Ended Nine Months Ended At September 30, 2017 (1) September 30, 2017 September 30, 2017 Recorded Unpaid Average Interest Average Interest (In thousands) Impaired loans without a valuation allowance (2) Commercial real estate $ 16,945 $ 19,380 $ 17,731 $ 199 $ 18,788 $ 650 Residential real estate: Residential real estate 6,939 7,410 7,016 11 6,548 34 Home equity 566 590 407 1 260 3 Commercial and industrial 3,953 10,242 4,442 54 4,538 183 Consumer 127 131 122 — 83 — Total impaired loans $ 28,530 $ 37,753 $ 29,718 $ 265 $ 30,217 $ 870 (1) Includes loans acquired with deteriorated credit quality and performing troubled debt restructurings. (2) Includes loans acquired with deteriorated credit quality from the Chicopee Bancorp merger. Impaired Loans (1)(2) Three Months Ended Nine Months Ended At December 31, 2016 (1) September 30, 2016 September 30, 2016 Recorded Unpaid Average Interest Average Interest (In thousands) Impaired loans without a valuation allowance (2) Commercial real estate $ 18,975 $ 21,330 $ 3,487 $ 17 $ 3,551 $ 49 Residential real estate 5,059 5,676 515 — 482 — Commercial and industrial 4,314 11,049 3,356 — 3,434 — Total impaired loans $ 28,348 $ 38,055 $ 7,358 $ 17 $ 7,467 $ 49 (1) (2) No interest income was recognized for impaired loans on a cash-basis method during the three and nine months ended September 30, 2017 or 2016. Interest income recognized on an accrual basis during the three and nine months ended September 30, 2017 related to performing purchase impaired loans while activity in the comparable 2016 periods related to performing TDR loans. We may periodically 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”). These concessions could include a reduction in the interest rate on the loan, payment extensions, postponement or forgiveness of principal, forbearance or other actions intended to maximize collection. All TDRs are classified as impaired. When we modify loans in a TDR, we measure impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan agreement, or use the current fair value of the collateral, less selling costs for collateral dependent loans. If we determine that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance. In periods subsequent to modification, we evaluate all TDRs, including those that have payment defaults, for possible impairment and recognize impairment through the allowance. Nonperforming TDRs are shown as nonperforming assets. There were no loans modified in TDRs during the three and nine months ended September 30, 2017. A substandard impaired loan relationship in the amount of $4.6 million was designated a TDR during the nine months ended September 30, 2016. The bank entered into a forbearance agreement which offered an interest only period. Due to the borrower continuing to experience declining sales, the interest only period was extended during the second quarter of 2016, resulting in the TDR classification. The loans are on non-accrual and are current. The loans are measured for impairment quarterly and appropriate reserves/charge offs have been taken. Nine Months Ended September 30, 2016 Number of Pre-Modification Post-Modification Outstanding (Dollars in thousands) Troubled Debt Restructurings Commercial Real Estate 1 $ 1,940 $ 1,940 Commercial and Industrial 3 2,681 2,681 Residential 2 161 161 Total 6 $ 4,782 $ 4,782 A default occurs when a loan is 30 days or more past due. No TDRs defaulted within twelve months of restructuring during the three and nine months ended September 30, 2017 or 2016. There were no charge-offs on TDRs during the three and nine months ended September 30, 2017 and 2016. Loans Acquired with Deteriorated Credit Quality The following is a summary of loans acquired from Chicopee with evidence of credit deterioration as of September 30, 2017. Contractual Required Payments Receivable Cash Expected To Be Collected Non- Accretable Loans (In thousands) Balance at December 31, 2016 $ 37,437 $ 29,040 $ 8,397 $ 7,521 $ 21,519 Collections (3,860 ) (3,326 ) (534 ) (1,003 ) (2,323 ) Dispositions (1,833 ) (1,503 ) (330 ) 6 (1,509 ) Balance at September 30, 2017 $ 31,744 $ 24,211 $ 7,533 $ 6,524 $ 17,687 Credit Quality Information We utilize an eight-grade internal loan rating system for commercial real estate and commercial and industrial loans. Performing residential real estate, home equity and consumer loans are grouped with “Pass” rated loans. Nonperforming residential real estate, home equity and consumer loans are monitored individually for impairment and risk rated as “Substandard.” Loans rated 1 – 3 are considered “Pass” rated loans with low to average risk. Loans rated 4 are considered “Pass Watch,” with an acceptable level of risk. Loans in this category remain “pass” rated and are not a criticized or classified loan, however, represent borrowers which may exhibit tight cash flows and/or leveraged balance sheets. Loans rated 5 are considered “Special Mention.” These loans exhibit potential credit weaknesses or downward trends and are being closely monitored by us. Loans rated 6 are considered “Substandard.” Generally, a loan is considered substandard if the borrower exhibits a well-defined weakness that may be inadequately protected by the current net worth and cash flow capacity to pay the current debt. Loans rated 7 are considered “Doubtful.” Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable and that a partial loss of principal is likely. Loans rated 8 are considered uncollectible and of such little value that their continuance as loans is not warranted. On an annual basis, or more often if needed, we formally review the ratings on all commercial real estate and commercial and industrial loans. Construction loans are reported within commercial real estate loans and total $67.6 million and $88.9 million at September 30, 2017 and December 31, 2016, respectively. We engage an independent third party to review a significant portion of loans within these segments on a semi-annual basis. We use the results of these reviews as part of our annual review process. In addition, management utilizes delinquency reports, the watch list and other loan reports to monitor credit quality in other segments. The following table presents our loans by risk rating at September 30, 2017 and December 31, 2016: Commercial Residential Home Commercial Consumer Total (In thousands) September 30, 2017 Loans rated 1 – 3 $ 647,599 $ 549,936 $ 91,854 $ 192,968 $ 4,340 $ 1,486,697 Loans rated 4 45,339 95 — 35,585 — 81,019 Loans rated 5 14,724 — — 7,521 — 22,245 Loans rated 6 9,228 5,737 505 8,300 127 23,897 $ 716,890 $ 555,768 $ 92,359 $ 244,374 $ 4,467 $ 1,613,858 December 31, 2016 Loans rated 1 – 3 $ 673,957 $ 516,339 $ 91,964 $ 180,675 $ 4,391 $ 1,467,326 Loans rated 4 24,207 — — 16,621 6 40,834 Loans rated 5 14,068 — — 6,727 — 20,795 Loans rated 6 6,604 5,744 119 15,379 27 27,873 Loans rated 7 1,905 — — 2,884 — 4,789 $ 720,741 $ 522,083 $ 92,083 $ 222,286 $ 4,424 $ 1,561,617 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLES | 6. GOODWILL AND OTHER INTANGIBLES Goodwill Goodwill for the nine months ended September 30, 2017 is summarized as follows: Nine Months Ended September 30, 2017 (In thousands) Balance at December 31, 2016 $ 13,747 Current period adjustments (1,260 ) Balance at September 30, 2017 $ 12,487 At September 30, 2017 and December 31, 2016, the Company’s goodwill related to the acquisition of Chicopee in October 2016. Annually, or more frequently if events or changes in circumstances warrant such evaluation, the Company evaluates its goodwill for impairment. No goodwill impairment was recorded for the nine months ended September 30, 2017. During the three months ended March 31, 2017, management completed their evaluation of premises and equipment acquired from Chicopee, which resulted in a $2.4 million adjustment to the provisional fair values of bank premises acquired and a $1.4 million reduction in goodwill. The remaining adjustments to goodwill of $140,000 during the three months ended March 31, 2017 resulted from information obtain during the quarter about events and circumstances that existed as of the acquisition date. Core Deposit Intangibles In connection with the assumption of $545.7 million of deposit liabilities from the Chicopee acquisition in October 2016, of which $345.2 million were core deposits, the Bank recorded a core deposit intangible of $4.5 million. The resulting core deposit intangible is amortized over twelve years using the straight-line method. Core deposit intangibles are summarized as follows: Nine Months Ended September 30, 2017 (In thousands) Balance at December 31, 2016 $ 4,438 Amortization (282 ) Balance at September 30, 2017 $ 4,156 Amortization expense was $282,000 for the nine months ended September 30, 2017. At September 30, 2017, future amortization of the core deposit intangible totals $375,000 for each of the next five years and $2.3 million thereafter. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | 7. SHARE-BASED COMPENSATION Stock Options – A summary of stock option activity for the nine months ended September 30, 2017 is presented below. No options were outstanding during the nine months ended September 30, 2016. Shares Weighted Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2016 1,178,899 $ 6.01 1.98 $ 3,930 Exercised (921,849 ) 5.93 0.91 3,675 Outstanding at September 30, 2017 257,050 $ 6.31 4.66 $ 1,175 Exercisable at September 30, 2017 257,050 $ 6.31 4.66 $ 1,175 Cash received for options exercised during the nine months ended September 30, 2017 was $5.5 million. Restricted Stock Awards – In January 2015, 48,560 shares were granted under this plan and vest ratably over five years. The fair market value of shares awarded, based on the market price at the date of grant, was recorded as unearned compensation and is being amortized over the applicable vesting period. In 2016, the Compensation Committee (the “Committee”) approved the long-term incentive program (the “LTI Plan”). The LTI Plan provides a periodic award that is both performance and retention based in that it is designed to recognize the executive’s responsibilities, reward demonstrated performance and leadership and to retain such executives. The objective of the LTI Plan is to align compensation for the named executive officers and directors over a multi-year period directly with the interests of our shareholders by motivating and rewarding creation and preservation of long-term financial strength, shareholder value and relative shareholder return. The LTI Plan includes eligible officers of the Company who are nominated by the Company’s Chief Executive Officer and approved by the Committee. The LTI Plan is triggered by the Company’s achievement of satisfactory safety and soundness results from its most recent regulatory examination. Employee stock grants made through the 2016 LTI plan will be a combination of 50% time-vested restricted stock and 50% performance-based restricted stock. In May 2016, 62,740 shares were granted under the LTI Plan. Of this total, 36,543 shares are retention-based, with 10,352 vesting in one year and 26,191 vesting ratably over a three year period. The remaining 26,197 shares granted are performance based and are subject to the achievement of the 2016 LTI performance metric before vesting is realized after a three year period. For the performance shares, the primary performance metric for 2016 awards is return on equity. Performance shares will be earned based upon how the Company performs relative to threshold and target absolute goals (i.e. Company-specific, not relative to a peer index) over the three-year performance period. The threshold amount for the performance period will be a return on equity of 5.85% and a target amount of 6.32%. Participants will be able to earn between 50% (for threshold performance) and 100% of the target amount for the performance shares but will not earn additional shares if performance exceeds target performance. In May 2017, 89,042 shares were granted under the LTI Plan. Of this total, 55,159 shares are retention-based, with 21,276 vesting in one year and 33,883 vesting ratably over a three year period. The remaining 33,883 shares granted are performance based and are subject to the achievement of the 2017 LTI performance metric before vesting is realized after a three year period. For the performance shares, the primary performance metric for 2017 awards is return on equity. Performance shares will be earned based upon how the Company performs relative to threshold, target and maximum absolute goals (i.e. Company-specific, not relative to a peer index) on an annual performance period, but will be distributed at the end of the three year period. The threshold, target and maximum for the three year period under the 2017 Plan is as follows: Return on Equity Targets Performance Period Ending Threshold Target Maximum December 31, 2017 6.00 % 6.60 % 7.30 % December 31, 2018 6.30 % 7.00 % 7.60 % December 31, 2019 6.50 % 7.20 % 7.90 % Participants will be able to earn between 50% (for threshold performance), 100% (for target performance) and 150% (for the maximum performance). The fair market value of shares awarded, based on the market price at the date of grant, is recorded as unearned compensation and amortized over the applicable vesting period. Shares granted under performance-based conditions are monitored on a quarterly basis in order to compare actual results to the performance metric established, with any necessary adjustments being recognized through share-based compensation expense and unearned compensation. At September 30, 2017, an additional 315,658 shares were available for future grants under this plan. Our stock award plan activity for the nine months ended September 30, 2017 and 2016 is summarized below: Unvested Stock Awards Outstanding Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2016 91,371 $ 7.51 Shares granted 89,042 10.15 Shares vested (21,552 ) 7.44 Outstanding at September 30, 2017 158,861 $ 9.00 Outstanding at December 31, 2015 54,160 $ 7.28 Shares granted 62,740 7.73 Shares vested (11,200 ) 7.18 Outstanding at September 30, 2016 105,700 $ 7.56 We recorded compensation cost related to the stock awards of $490,000 and $186,000 for the nine months ended September 30, 2017 and 2016, respectively. |
SHORT-TERM BORROWINGS AND LONG-
SHORT-TERM BORROWINGS AND LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
SHORT-TERM BORROWINGS AND LONG-TERM DEBT | 8. SHORT-TERM BORROWINGS AND LONG-TERM DEBT We utilize short-term borrowings and long-term debt as an additional source of funds to finance our lending and investing activities and to provide liquidity for daily operations. Short-term borrowings are made up of FHLBB advances with an original maturity of less than one year, a line of credit with the FHLBB and customer repurchase agreements, which mature daily. Short-term borrowings issued by the FHLBB were $174.0 million at September 30, 2017 and $155.0 million at December 31, 2016. We have an “Ideal Way” line of credit with the FHLBB for $9.5 million at September 30, 2017 and December 31, 2016. Interest on this line of credit is payable at a rate determined and reset by the FHLBB on a daily basis. The outstanding principal is due daily, but the portion not repaid will be automatically renewed. There were no advances outstanding on the line of credit as of September 30, 2017 or December 31, 2016. Customer repurchase agreements were $18.5 million at September 30, 2017 and $17.4 million at December 31, 2016. A customer repurchase agreement is an agreement by us to sell to and repurchase from the customer an interest in specific securities issued by or guaranteed by the U.S. government. This transaction settles immediately on a same day basis in immediately available funds. Interest paid is commensurate with other products of equal interest and credit risk. In addition, we have lines of credit of $4.0 million and $50.0 million with Bankers Bank Northeast (“BBN”) and PNC Bank, respectively. The interest rates on these lines are determined and reset on a daily basis by each respective bank. There were no advances outstanding under these lines of credit at September 30, 2017 or December 31, 2016. As part of our contract with BBN, we are required to maintain a reserve balance of $300,000 with BBN for our use of this line of credit. Long-term debt consists of FHLBB advances with an original maturity of one year or more. At September 30, 2017, we had $106.3 million in long-term debt with the FHLBB. This compares to $124.8 million in long-term debt with FHLBB advances at December 31, 2016. Customer repurchase agreements are collateralized by government-sponsored enterprise obligations with fair value of $6.8 million and $24.6 million, and mortgage backed securities with a fair value of $61.1 million and $57.6 million, at September 30, 2017 and December 31, 2016, respectively. The securities collateralizing repurchase agreements are subject to fluctuations in fair value. We monitor the fair value of the collateral on a periodic basis, and would pledge additional collateral if necessary based on changes in fair value of collateral or the balances of the repurchase agreements. All FHLBB advances are collateralized by a blanket lien on our owner occupied residential real estate loans and certain eligible commercial real estate loans. |
PENSION BENEFITS
PENSION BENEFITS | 9 Months Ended |
Sep. 30, 2017 | |
Defined Benefit Plan [Abstract] | |
PENSION BENEFITS | 9. PENSION BENEFITS We maintain a pension plan for our eligible employees. On September 30, 2016, we effected a soft freeze on the Plan and therefore no new participants will be included in the Plan after such effective date. We plan to contribute to the pension plan the amount required to meet the minimum funding standards under Section 412 of the Internal Revenue Code of 1986, as amended. Additional contributions will be made as deemed appropriate by management in conjunction with the pension plan’s actuaries. We have not yet determined how much we expect to contribute to our pension plan in 2017. No contributions have been made to the plan for the nine months ended September 30, 2017. The pension plan assets are invested in group annuity contracts with the Principal Financial Group, who also acts as third-party administrator for our 401(k) and ESOP plans. The following table provides information regarding net pension benefit costs for the periods shown: Three Months Ended September 30, Nine Months Ended, September 30, 2017 2016 2017 2016 (In thousands) Service cost $ 245 $ 283 $ 778 $ 854 Interest cost 254 240 761 719 Expected return on assets (298 ) (275 ) (895 ) (823 ) Amortization of actuarial losses 51 24 153 71 Net periodic pension cost $ 252 $ 272 $ 797 $ 821 |
DERIVATIVES AND HEDGING ACTIVIT
DERIVATIVES AND HEDGING ACTIVITIES | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING ACTIVITIES | 10. DERIVATIVES AND HEDGING ACTIVITIES Risk Management Objective of Using Derivatives We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposures to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of our assets and liabilities and the use of derivative financial instruments. Specifically, we entered into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash receipts and our known or expected cash payments principally related to certain variable rate loan assets and variable rate borrowings. Fair Values of Derivative Instruments on the Balance Sheet The table below presents the fair value of our derivative financial instruments designated as hedging instruments as well as our classification on the balance sheet as of September 30, 2017 and December 31, 2016. September 30, 2017 Asset Derivatives Liability Derivatives Balance Sheet Location Fair Value Balance Sheet Location Fair Value (In thousands) Interest rate swaps Other Assets $ 1 Other Liabilities $ 2,710 December 31, 2016 Asset Derivatives Liability Derivatives Balance Sheet Location Fair Value Balance Sheet Location Fair Value (In thousands) Interest rate swaps Other Assets $ — Other Liabilities $ 3,152 Cash Flow Hedges of Interest Rate Risk Our objectives in using interest rate derivatives are to add stability to interest income and expense and to manage our exposure to interest rate movements. To accomplish this objective, we entered into interest rate swaps as part of our interest rate risk management strategy. These interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from a counterparty in exchange for our making fixed payments. The following table presents information about our cash flow hedges at September 30, 2017 and December 31, 2016: Notional Weighted Weighted Average Rate Estimated Fair September 30, 2017 Amount Maturity Receive Pay Value (In thousands) (In years) (In thousands) Interest rate swaps on FHLBB borrowings $ 75,000 2.6 1.31 % 2.46 % $ (2,709 ) Notional Weighted Weighted Average Rate Estimated Fair December 31, 2016 Amount Maturity Receive Pay Value (In thousands) (In years) (In thousands) Interest rate swaps on FHLBB borrowings $ 75,000 3.4 0.92 % 2.46 % $ (3,152 ) During 2016, we terminated a forward-starting interest rate swap with a notional amount of $32.5 million and incurred a termination fee of $3.4 million. During 2015, we terminated forward-starting interest rate swaps with notional amounts of $47.5 million and incurred a termination fee of $2.4 million. The termination fees are amortized as a reclassification of other comprehensive income into interest expense over the terms of the previously hedged borrowings, which were six and five years for the swaps terminated in 2016 and 2015, respectively. For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of the derivative is initially reported in other comprehensive income (outside of earnings), net of tax, and subsequently reclassified to earnings when the hedged transaction affects earnings, and the ineffective portion of changes in the fair value of the derivative is recognized directly in earnings. We assess the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged transactions. We did not recognize any hedge ineffectiveness in earnings during the nine months ended September 30, 2017 or 2016. We are hedging our exposure to the variability in future cash flows for forecasted transactions over a maximum period of six years (excluding forecasted payment of variable interest on existing financial instruments). The table below presents the pre-tax net losses of our cash flow hedges for the periods indicated. Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (In thousands) Interest rate swaps $ (14 ) $ 417 $ (307 ) $ (2,863 ) Amounts reported in accumulated other comprehensive loss related to these derivatives are reclassified to interest expense as interest payments are made on our rate sensitive assets/liabilities. The amount reclassified from accumulated other comprehensive income into net income for the effective portion of interest rate swaps and termination fees was $497,000 and $397,000 during the three months ended September 30, 2017 and 2016, respectively and $1.6 million and $1.0 million during the nine months ended September 30, 2017 and 2016, respectively. During the next 12 months, we estimate that $1.8 million will be reclassified as an increase in interest expense. During the nine months ended September 30, 2017 and 2016, no gains or losses were reclassified from accumulated other comprehensive loss into income for ineffectiveness on cash flow hedges. Credit-risk-related Contingent Features By using derivative financial instruments, we expose ourselves to credit risk. Credit risk is the risk of failure by the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. When the fair value of a derivative is negative, we owe the counterparty and, therefore, it does not possess credit risk. The credit risk in derivative instruments is mitigated by entering into transactions with highly-rated counterparties that we believe to be creditworthy and by limiting the amount of exposure to each counterparty. We have agreements with our derivative counterparties that contain a provision where if we default on any of our indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then we could also be declared in default on our derivative obligations. We also have agreements with certain of our derivative counterparties that contain a provision where if we fail to maintain our status as well capitalized, then the counterparty could terminate the derivative positions and we would be required to settle our obligations under the agreements. Certain of our agreements with our derivative counterparties contain provisions where if a formal administrative action by a federal or state regulatory agency occurs that materially changes our creditworthiness in an adverse manner, we may be required to fully collateralize our obligations under the derivative instrument. As of September 30, 2017, the termination value of derivatives in a net liability position related to these agreements, which includes accrued interest but excludes any adjustment for nonperformance risk, was $2.7 million. As of September 30, 2017, we have mortgage-backed securities with a fair value of $3.0 million and $50,000 cash posted as collateral against our obligations under these agreements. If we had breached any of these provisions at September 30, 2017, we could have been required to settle our obligations under the agreements at the termination value. |
FAIR VALUE OF ASSETS AND LIABIL
FAIR VALUE OF ASSETS AND LIABILITIES | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF ASSETS AND LIABILITIES | 11. FAIR VALUE OF ASSETS AND LIABILITIES Determination of Fair Value We use fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for our various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Fair Value Hierarchy Level 1 – Valuation is based on quoted prices in active markets for identical assets. Level 1 assets generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets. Level 2 – Valuation is based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets. Level 3 assets include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. Methods and assumptions for valuing our financial instruments are set forth below. Estimated fair values are calculated based on the value without regard to any premium or discount that may result from concentrations of ownership of a financial instrument, possible tax ramifications or estimated transaction cost. Cash and cash equivalents Securities and mortgage-backed securities Federal Home Loan Bank and other stock Loans receivable Accrued interest Deposit liabilities Short-term borrowings and long-term debt Interest rate swaps Commitments to extend credit Assets and liabilities measured at fair value on a recurring basis are summarized below: September 30, 2017 Level 1 Level 2 Level 3 Total Assets: (In thousands) Securities available-for-sale Government-sponsored mortgage-backed securities $ — $ 190,321 $ — $ 190,321 U.S. government guaranteed mortgage-backed securities — 16,961 — 16,961 Corporate bonds — 56,553 — 56,553 State and municipal bonds — 3,225 — 3,225 Government-sponsored enterprise obligations — 24,453 — 24,453 Mutual funds 6,406 — — 6,406 Total securities available-for-sale 6,406 291,513 — 297,919 Interest rate swaps — 1 — 1 Total assets $ 6,406 $ 291,514 $ — $ 297,920 Liabilities: Interest rate swaps $ — $ 2,710 $ — $ 2,710 December 31, 2016 Level 1 Level 2 Level 3 Total Assets: (In thousands) Government-sponsored mortgage-backed securities $ — $ 180,136 $ — $ 180,136 U.S. government guaranteed mortgage-backed securities — 17,350 — 17,350 Corporate bonds — 50,317 — 50,317 State and municipal bonds — 4,008 — 4,008 Government-sponsored enterprise obligations — 42,008 — 42,008 Mutual funds 6,296 — — 6,296 Total assets $ 6,296 $ 293,819 $ — $ 300,115 Liabilities: Interest rate swaps $ — $ 3,152 $ — $ 3,152 Also, we may be required, from time to time, to measure certain other assets at fair value on a non-recurring basis in accordance with U.S. GAAP. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. There were no assets measured at fair value on a non-recurring basis at September 30, 2017. The following table summarizes the fair value hierarchy used to determine each adjustment and the carrying value of the related assets at September 30, 2016. Total losses represent the change in carrying value as a result of fair value adjustments related to assets still held at September 30, 2016. At September 30, 2016 Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 Total Total Level 1 Level 2 Level 3 Gains (Losses) Gains (Losses) (In thousands) Impaired Loans $ — $ — $ 2,059 $ — $ (220 ) The amount of impaired loans represents the carrying value and related write-down and valuation allowance of impaired loans for which adjustments are based on the estimated fair value of the underlying collateral. The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on real estate appraisals performed by independent licensed or certified appraisers. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Management will discount appraisals as deemed necessary based on the date of the appraisal and new information deemed relevant to the valuation. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value. The resulting losses were recognized in earnings through the provision for loan losses. Impaired loans with adjustments resulting from discounted cash flows or without a specific reserve are not included in this disclosure. There were no transfers to or from Level 1 and 2 during the three and nine months ended September 30, 2017 and 2016. We did not measure any liabilities at fair value on a non-recurring basis on the consolidated balance sheets. Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time our entire holdings of a particular financial instrument. Where quoted market prices are not available, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment. Changes in assumptions could significantly affect the estimates. The estimated fair values of our financial instruments are as follows: September 30, 2017 Carrying Value Fair Value Level 1 Level 2 Level 3 Total (In thousands) Assets: Cash and cash equivalents $ 28,900 $ 28,900 $ — $ — $ 28,900 Securities available-for-sale 297,919 6,406 291,513 — 297,919 Federal Home Loan Bank of Boston and other restricted stock 15,704 — — 15,704 15,704 Loans - net 1,608,255 — — 1,577,309 1,577,309 Accrued interest receivable 5,764 — — 5,764 5,764 Mortgage servicing rights 380 — 380 — 380 Derivative assets 1 — 1 — 1 Liabilities: Deposits 1,515,198 — — 1,514,641 1,514,641 Short-term borrowings 192,465 — 192,482 — 192,482 Long-term debt 106,339 — 106,517 — 106,517 Accrued interest payable 394 — — 394 394 Derivative liabilities 2,710 — 2,710 — 2,710 December 31, 2016 Carrying Value Fair Value Level 1 Level 2 Level 3 Total (In thousands) Assets: Cash and cash equivalents $ 70,234 $ 70,234 $ — $ — $ 70,234 Securities available-for-sale 300,115 6,296 293,819 — 300,115 Federal Home Loan Bank of Boston and other restricted stock 16,124 — — 16,124 16,124 Loans - net 1,556,416 — — 1,525,274 1,525,274 Accrued interest receivable 5,782 — — 5,782 5,782 Mortgage servicing rights 465 — 628 — 628 Liabilities: Deposits 1,518,071 — — 1,521,580 1,521,580 Short-term borrowings 172,351 — 172,351 — 172,351 Long-term debt 124,836 — 125,183 — 125,183 Accrued interest payable 1,012 — — 1,012 1,012 Derivative liabilities 3,152 — 3,152 — 3,152 |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | 12. RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall In February 2016, the FASB issued ASU 2016-02, Leases In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows Classification of Certain Cash Receipts and Cash Payments In March 2017, the FASB issued ASU No. 2017-08— Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20) Premium Amortization on Purchased Callable Debt Securities In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities |
SUMMARY OF SIGNIFICANT ACCOUN22
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation – |
Estimates | Estimates – |
Basis of Presentation | Basis of Presentation – These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2016, included in our Annual Report on Form 10-K for the year ended December 31, 2016 (the “2016 Annual Report”). |
Reclassifications | Reclassifications – |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
EARNINGS PER COMMON SHARE: | |
Schedule of earnings per common share | Earnings per common share for the three and nine months ended September 30, 2017 and 2016 have been computed based on the following: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands, except per share data) Net income applicable to common stock $ 3,815 $ 628 $ 12,674 $ 2,981 Average number of common shares issued 31,001 18,330 30,799 18,298 Less: Average unallocated ESOP Shares (838 ) (926 ) (861 ) (945 ) Less: Average unvested equity incentive plan shares (60 ) (26 ) (42 ) (13 ) Average number of common shares outstanding used to calculate basic earnings per common share 30,103 17,378 29,896 17,340 Effect of dilutive equity incentive plan 26 — 12 — Effect of dilutive stock options 90 — 166 — Average number of common shares outstanding used to calculate diluted earnings per common share 30,219 17,378 30,074 17,340 Basic earnings per share $ 0.13 $ 0.04 $ 0.42 $ 0.17 Diluted earnings per share $ 0.13 $ 0.04 $ 0.42 $ 0.17 |
COMPREHENSIVE INCOME_LOSS (Tabl
COMPREHENSIVE INCOME/LOSS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of accumulated other comprehensive loss in sharesholders equity | The components of accumulated other comprehensive loss included in shareholders’ equity are as follows: September 30, 2017 December 31, (In thousands) Net unrealized losses on securities available-for-sale $ (3,782 ) $ (5,863 ) Tax effect 1,397 2,024 Net-of-tax amount (2,385 ) (3,839 ) Fair value of derivatives used for cash flow hedges (2,709 ) (3,152 ) Termination fees on forward starting interest rate swaps (3,933 ) (4,733 ) Total derivatives (6,642 ) (7,885 ) Tax effect 2,713 2,681 Net-of-tax amount (3,929 ) (5,204 ) Unrecognized actuarial loss on defined benefit plan (5,329 ) (5,482 ) Tax effect 2,176 1,864 Net-of-tax amount (3,153 ) (3,618 ) Accumulated other comprehensive loss $ (9,467 ) $ (12,661 ) |
Schedule of changes in accumulated other loss | The following table presents changes in accumulated other comprehensive loss for the periods ended September 30, 2017 and 2016 by component: Securities Derivatives Defined Accumulated (In thousands) Balance at December 31, 2015 $ (3,046 ) $ (5,501 ) $ (2,431 ) $ (10,978 ) Current-period other comprehensive income (loss) 4,883 (1,230 ) 47 3,700 Balance at September 30, 2016 $ 1,837 $ (6,731 ) $ (2,384 ) $ (7,278 ) Balance at December 31, 2016 $ (3,839 ) $ (5,204 ) $ (3,618 ) $ (12,661 ) Current-period other comprehensive income 1,454 1,275 465 3,194 Balance at September 30, 2017 $ (2,385 ) $ (3,929 ) $ (3,153 ) $ (9,467 ) |
SECURITIES (Tables)
SECURITIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of securities available for sale and held to maturity | Securities available-for-sale are summarized as follows: September 30, 2017 Amortized Gross Gross Fair Value (In thousands) Available-for-sale securities: Government-sponsored mortgage-backed securities $ 193,037 $ 120 $ (2,836 ) $ 190,321 U.S. government guaranteed mortgage-backed securities 17,408 — (447 ) 16,961 Corporate bonds 56,192 582 (221 ) 56,553 State and municipal bonds 3,223 39 (37 ) 3,225 Government-sponsored enterprise obligations 25,150 — (697 ) 24,453 Mutual funds 6,691 — (285 ) 6,406 Total available-for-sale $ 301,701 $ 741 $ (4,523 ) $ 297,919 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Available-for-sale securities: Government-sponsored mortgage-backed securities $ 184,127 $ 33 $ (4,024 ) $ 180,136 U.S. government guaranteed mortgage-backed securities 17,753 — (403 ) 17,350 Corporate bonds 50,255 265 (203 ) 50,317 State and municipal bonds 4,117 13 (122 ) 4,008 Government-sponsored enterprise obligations 43,140 — (1,132 ) 42,008 Mutual funds 6,586 — (290 ) 6,296 Total available-for-sale securities $ 305,978 $ 311 $ (6,174 ) $ 300,115 |
Schedule of amortized cost and fair value of securities available for sale and held to maturity by maturity | The amortized cost and fair value of available-for-sale debt securities at September 30, 2017, by maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers have the right to call or repay obligations. Also, because mortgage-backed securities require periodic principal paydowns, they are not included in the maturity categories in the following maturity summary. September 30, 2017 Amortized Cost Fair Value (In thousands) Available for securities: Debt securities: Due in one year or less $ — $ — Due after one year through five years 28,079 28,497 Due after five years through ten years 49,735 49,149 Due after ten years 6,751 6,585 Total securities $ 84,565 $ 84,231 Mortgage-backed securities 210,445 207,282 Total $ 295,010 $ 291,513 |
Schedule of gross realized gains and losses on sales of securities available for sale | Gross realized gains and losses on sales of securities available-for-sale for the three and nine months ended September 30, 2017 and 2016 are as follows: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (In thousands) Gross gains realized $ 71 $ 1 $ 117 $ 1,521 Gross losses realized (1 ) — (65 ) (837 ) Net gain realized $ 70 $ 1 $ 52 $ 684 |
Schedule of securities with gross unrealized losses in continuous loss position | Information pertaining to securities with gross unrealized losses at September 30, 2017 and December 31, 2016, aggregated by investment category and length of time that individual securities have been in a continuous loss position are as follows: September 30, 2017 Less Than 12 Months Over 12 Months Gross Fair Value Gross Fair Value (In thousands) Available-for-sale: Government-sponsored mortgage-backed securities $ 1,022 $ 105,596 $ 1,814 $ 61,415 U.S. government guaranteed mortgage-backed securities 160 9,874 287 7,086 Corporate bonds 210 20,915 11 2,058 State and municipal bonds — — 37 1,564 Government-sponsored enterprise obligations 129 5,021 568 19,432 Mutual funds 57 3,508 228 2,898 Total available-for-sale $ 1,578 $ 144,914 $ 2,945 $ 94,453 December 31, 2016 Less Than 12 Months Over 12 Months Gross Fair Value Gross Fair Value (In thousands) Available-for-sale: Government-sponsored mortgage-backed securities $ 3,016 $ 147,691 $ 1,008 $ 27,303 U.S. government guaranteed mortgage-backed securities 192 12,536 211 4,814 Corporate bonds 203 18,481 — — State and municipal bonds 95 1,507 27 305 Government-sponsored enterprise obligations 1,132 42,008 — — Mutual funds 79 3,429 211 2,867 Total available-for-sale $ 4,717 $ 225,652 $ 1,457 $ 35,289 September 30, 2017 Less Than 12 Months Over 12 Months Number of Securities Amortized Gross Depreciation from Amortized Cost Basis (%) Number of Securities Amortized Cost Basis Gross Loss Depreciation from Amortized Cost Basis (%) (Dollars in thousands) Government-sponsored mortgage-backed securities 41 $ 106,618 $ 1,022 1.0 % 27 $ 63,229 $ 1,814 2.9 % U.S. government guaranteed mortgage-backed securities 3 10,034 160 1.6 4 7,373 287 3.9 Corporate bonds 7 21,125 210 1.0 1 2,069 11 0.5 Government-sponsored enterprise obligations 1 5,150 129 2.5 8 20,000 568 2.8 State and municipal bonds — — — — 3 1,601 37 2.3 Mutual funds 1 3,565 57 1.6 2 3,126 228 7.3 $ 146,492 $ 1,578 $ 97,398 $ 2,945 |
LOANS AND ALLOWANCE FOR LOAN 26
LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Schedule of loans | Loans consisted of the following amounts: September 30, December 31, 2017 2016 (In thousands) Commercial real estate $ 716,890 $ 720,741 Residential real estate: Residential 555,768 522,083 Home equity 92,359 92,083 Commercial and industrial 244,374 222,286 Consumer 4,467 4,424 Total Loans 1,613,858 1,561,617 Unearned premiums and deferred loan fees and costs, net 4,915 4,867 Allowance for loan losses (10,518 ) (10,068 ) $ 1,608,255 $ 1,556,416 |
Schedule of mortgage servicing rights | A summary of the activity in the balances of mortgage servicing rights follows: Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 (In thousands) Balance at the beginning of period: $ 408 $ 465 Capitalized mortgage servicing rights — — Amortization (28 ) (85 ) Balance at the end of period $ 380 $ 380 Fair value at the end of period $ 538 $ 538 |
Schedule of analysis of changes in allowance for loan losses by segment | An analysis of changes in the allowance for loan losses by segment for the periods ended September 30, 2017 and 2016 is as follows: Commercial Real Estate Residential Real Estate Commercial and Industrial Consumer Unallocated Total (In thousands) Three Months Ended Balance at June 30, 2016 $ 3,956 $ 2,804 $ 2,797 $ 20 $ (7 ) $ 9,570 Provision (credit) 62 189 83 43 (2 ) 375 Charge-offs — (40 ) — (46 ) — (86 ) Recoveries 59 — — 9 — 68 Balance at September 30, 2016 $ 4,077 $ 2,953 $ 2,880 $ 26 $ (9 ) $ 9,927 Balance at June 30, 2017 $ 4,472 $ 3,126 $ 2,754 $ 53 $ 13 $ 10,418 Provision (credit) (68 ) 146 (109 ) 83 148 200 Charge-offs — (107 ) — (104 ) — (211 ) Recoveries — 80 3 28 — 111 Balance at September 30, 2017 $ 4,404 $ 3,245 $ 2,648 $ 60 $ 161 $ 10,518 Nine Months Ended Balance at December 31, 2015 $ 3,856 $ 2,431 $ 2,485 $ 22 $ 46 $ 8,840 Provision (credit) (614 ) 610 395 64 (55 ) 400 Charge-offs (170 ) (90 ) — (87 ) — (347 ) Recoveries 1,005 2 — 27 — 1,034 Balance at September 30, 2016 $ 4,077 $ 2,953 $ 2,880 $ 26 $ (9 ) $ 9,927 Balance at December 31, 2016 $ 4,083 $ 2,862 $ 3,085 $ 38 $ — $ 10,068 Provision (credit) 239 427 (180 ) 203 161 850 Charge-offs (36 ) (148 ) (285 ) (237 ) — (706 ) Recoveries 118 104 28 56 — 306 Balance at September 30, 2017 $ 4,404 $ 3,245 $ 2,648 $ 60 $ 161 $ 10,518 |
Schedule of information pertaining to the allowance for loan losses by segment | Further information pertaining to the allowance for loan losses by segment at September 30, 2017 and December 31, 2016 follows: Commercial Real Estate Residential Real Estate Commercial and Industrial Consumer Unallocated Tota (In thousands) September 30, 2017 Amount of allowance for impaired loans $ — $ — $ — $ — $ — $ — Amount of allowance for non-impaired loans 4,404 3,245 2,648 60 161 10,518 Total allowance for loan losses $ 4,404 $ 3,245 $ 2,648 $ 60 $ 161 $ 10,518 Impaired loans $ 3,993 $ 3,854 $ 2,869 $ 127 $ — $ 10,843 Non-impaired loans 699,945 640,622 240,421 4,340 — 1,585,328 Loans acquired with deteriorated credit quality 12,952 3,651 1,084 — — 17,687 Total loans $ 716,890 $ 648,127 $ 244,374 $ 4,467 $ — $ 1,613,858 December 31, 2016 Amount of allowance for impaired loans $ — $ — $ — $ — $ — $ — Amount of allowance for non-impaired loans 4,083 2,862 3,085 38 — 10,068 Total allowance for loan losses 4,083 2,862 3,085 38 — 10,068 Impaired loans $ 3,335 $ 452 $ 3,042 $ — $ — $ 6,829 Non-impaired loans 701,766 609,107 217,972 4,424 — 1,533,269 Loans acquired with deteriorated credit quality 15,640 4,607 1,272 — — 21,519 Total loans $ 720,741 $ 614,166 $ 222,286 $ 4,424 $ — $ 1,561,617 |
Schedule of past due and nonaccrual loans by class | The following is a summary of past due and non-accrual loans by class at September 30, 2017 and December 31, 2016: 30 – 59 Days 60 – 89 Days Greater than Total Past Past Due 90 Loans on Non- (In thousands) September 30, 2017 Commercial real estate $ 196 $ 295 $ 136 $ 627 $ — $ 2,181 Residential real estate: Residential 2,308 570 572 3,450 — 1,744 Home equity 218 135 72 425 — 73 Commercial and industrial 472 59 108 639 — 2,700 Consumer 54 18 5 77 — 17 Total legacy loans 3,248 1,077 893 5,218 — 6,715 Loans acquired from Chicopee Savings Bank 2,957 1,610 1,279 5,846 — 6,450 Total $ 6,205 $ 2,687 $ 2,172 $ 11,064 $ — $ 13,165 December 31, 2016 Commercial real estate $ 302 $ 555 $ 137 $ 994 $ — $ 2,740 Residential real estate: Residential 791 262 689 1,742 — 1,658 Home equity 208 36 — 244 — 37 Commercial and industrial 326 32 — 358 — 3,214 Consumer 27 9 7 43 — 14 Total legacy loans 1,654 894 833 3,381 — 7,663 Loans acquired from Chicopee Savings Bank 3,854 1,907 551 6,312 — 6,394 Total past due loans $ 5,508 $ 2,801 $ 1,384 $ 9,693 $ — $ 14,057 |
Schedule of impaired loans by class | The following is a summary of impaired loans by class at and for the periods ended September 30, 2017 and December 31, 2016: Impaired Loans (1)(2) Three Months Ended Nine Months Ended At September 30, 2017 (1) September 30, 2017 September 30, 2017 Recorded Unpaid Average Interest Average Interest (In thousands) Impaired loans without a valuation allowance (2) Commercial real estate $ 16,945 $ 19,380 $ 17,731 $ 199 $ 18,788 $ 650 Residential real estate: Residential real estate 6,939 7,410 7,016 11 6,548 34 Home equity 566 590 407 1 260 3 Commercial and industrial 3,953 10,242 4,442 54 4,538 183 Consumer 127 131 122 — 83 — Total impaired loans $ 28,530 $ 37,753 $ 29,718 $ 265 $ 30,217 $ 870 (1) Includes loans acquired with deteriorated credit quality and performing troubled debt restructurings. (2) Includes loans acquired with deteriorated credit quality from the Chicopee Bancorp merger. Impaired Loans (1)(2) Three Months Ended Nine Months Ended At December 31, 2016 (1) September 30, 2016 September 30, 2016 Recorded Unpaid Average Interest Average Interest (In thousands) Impaired loans without a valuation allowance (2) Commercial real estate $ 18,975 $ 21,330 $ 3,487 $ 17 $ 3,551 $ 49 Residential real estate 5,059 5,676 515 — 482 — Commercial and industrial 4,314 11,049 3,356 — 3,434 — Total impaired loans $ 28,348 $ 38,055 $ 7,358 $ 17 $ 7,467 $ 49 (1) (2) |
Schedule of troubled debt restructurings | The loans are on non-accrual and are current. The loans are measured for impairment quarterly and appropriate reserves/charge offs have been taken. Nine Months Ended September 30, 2016 Number of Pre-Modification Post-Modification Outstanding (Dollars in thousands) Troubled Debt Restructurings Commercial Real Estate 1 $ 1,940 $ 1,940 Commercial and Industrial 3 2,681 2,681 Residential 2 161 161 Total 6 $ 4,782 $ 4,782 |
Schedule of loans acquired with deteriorated credit quality | The following is a summary of loans acquired from Chicopee with evidence of credit deterioration as of September 30, 2017. Contractual Required Payments Receivable Cash Expected To Be Collected Non- Accretable Loans (In thousands) Balance at December 31, 2016 $ 37,437 $ 29,040 $ 8,397 $ 7,521 $ 21,519 Collections (3,860 ) (3,326 ) (534 ) (1,003 ) (2,323 ) Dispositions (1,833 ) (1,503 ) (330 ) 6 (1,509 ) Balance at September 30, 2017 $ 31,744 $ 24,211 $ 7,533 $ 6,524 $ 17,687 |
Schedule of loans by risk rating | The following table presents our loans by risk rating at September 30, 2017 and December 31, 2016: Commercial Residential Home Commercial Consumer Total (In thousands) September 30, 2017 Loans rated 1 – 3 $ 647,599 $ 549,936 $ 91,854 $ 192,968 $ 4,340 $ 1,486,697 Loans rated 4 45,339 95 — 35,585 — 81,019 Loans rated 5 14,724 — — 7,521 — 22,245 Loans rated 6 9,228 5,737 505 8,300 127 23,897 $ 716,890 $ 555,768 $ 92,359 $ 244,374 $ 4,467 $ 1,613,858 December 31, 2016 Loans rated 1 – 3 $ 673,957 $ 516,339 $ 91,964 $ 180,675 $ 4,391 $ 1,467,326 Loans rated 4 24,207 — — 16,621 6 40,834 Loans rated 5 14,068 — — 6,727 — 20,795 Loans rated 6 6,604 5,744 119 15,379 27 27,873 Loans rated 7 1,905 — — 2,884 — 4,789 $ 720,741 $ 522,083 $ 92,083 $ 222,286 $ 4,424 $ 1,561,617 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Goodwill for the nine months ended September 30, 2017 is summarized as follows: Nine Months Ended September 30, 2017 (In thousands) Balance at December 31, 2016 $ 13,747 Current period adjustments (1,260 ) Balance at September 30, 2017 $ 12,487 |
Schedule of other intangible assets | The resulting core deposit intangible is amortized over twelve years using the straight-line method. Core deposit intangibles are summarized as follows: Nine Months Ended September 30, 2017 (In thousands) Balance at December 31, 2016 $ 4,438 Amortization (282 ) Balance at September 30, 2017 $ 4,156 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock option activity | A summary of stock option activity for the nine months ended September 30, 2017 is presented below. No options were outstanding during the nine months ended September 30, 2016. Shares Weighted Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2016 1,178,899 $ 6.01 1.98 $ 3,930 Exercised (921,849 ) 5.93 0.91 3,675 Outstanding at September 30, 2017 257,050 $ 6.31 4.66 $ 1,175 Exercisable at September 30, 2017 257,050 $ 6.31 4.66 $ 1,175 |
Schedule of threshold, target and maximum | The threshold, target and maximum for the three year period under the 2017 Plan is as follows: Return on Equity Targets Performance Period Ending Threshold Target Maximum December 31, 2017 6.00 % 6.60 % 7.30 % December 31, 2018 6.30 % 7.00 % 7.60 % December 31, 2019 6.50 % 7.20 % 7.90 % |
Schedule of unvested restricted stock awards | Our stock award plan activity for the nine months ended September 30, 2017 and 2016 is summarized below: Unvested Stock Awards Outstanding Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2016 91,371 $ 7.51 Shares granted 89,042 10.15 Shares vested (21,552 ) 7.44 Outstanding at September 30, 2017 158,861 $ 9.00 Outstanding at December 31, 2015 54,160 $ 7.28 Shares granted 62,740 7.73 Shares vested (11,200 ) 7.18 Outstanding at September 30, 2016 105,700 $ 7.56 |
PENSION BENEFITS (Tables)
PENSION BENEFITS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Defined Benefit Plan [Abstract] | |
Schedule of net pension benefit costs | The following table provides information regarding net pension benefit costs for the periods shown: Three Months Ended September 30, Nine Months Ended, September 30, 2017 2016 2017 2016 (In thousands) Service cost $ 245 $ 283 $ 778 $ 854 Interest cost 254 240 761 719 Expected return on assets (298 ) (275 ) (895 ) (823 ) Amortization of actuarial losses 51 24 153 71 Net periodic pension cost $ 252 $ 272 $ 797 $ 821 |
DERIVATIVES AND HEDGING ACTIV30
DERIVATIVES AND HEDGING ACTIVITIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair values of derivative instruments on the balance sheet | The table below presents the fair value of our derivative financial instruments designated as hedging instruments as well as our classification on the balance sheet as of September 30, 2017 and December 31, 2016. September 30, 2017 Asset Derivatives Liability Derivatives Balance Sheet Location Fair Value Balance Sheet Location Fair Value (In thousands) Interest rate swaps Other Assets $ 1 Other Liabilities $ 2,710 December 31, 2016 Asset Derivatives Liability Derivatives Balance Sheet Location Fair Value Balance Sheet Location Fair Value (In thousands) Interest rate swaps Other Assets $ — Other Liabilities $ 3,152 |
Schedule of information about cash flow hedges | The following table presents information about our cash flow hedges at September 30, 2017 and December 31, 2016: Notional Weighted Weighted Average Rate Estimated Fair September 30, 2017 Amount Maturity Receive Pay Value (In thousands) (In years) (In thousands) Interest rate swaps on FHLBB borrowings $ 75,000 2.6 1.31 % 2.46 % $ (2,709 ) Notional Weighted Weighted Average Rate Estimated Fair December 31, 2016 Amount Maturity Receive Pay Value (In thousands) (In years) (In thousands) Interest rate swaps on FHLBB borrowings $ 75,000 3.4 0.92 % 2.46 % $ (3,152 ) |
Schedule of pre-tax net gains (losses) of cash flow hedges | The table below presents the pre-tax net losses of our cash flow hedges for the periods indicated. Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (In thousands) Interest rate swaps $ (14 ) $ 417 $ (307 ) $ (2,863 ) |
FAIR VALUE OF ASSETS AND LIAB31
FAIR VALUE OF ASSETS AND LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on recurring basis | Assets and liabilities measured at fair value on a recurring basis are summarized below: September 30, 2017 Level 1 Level 2 Level 3 Total Assets (In thousands) Securities available-for-sale Government-sponsored mortgage-backed securities $ — $ 190,321 $ — $ 190,321 U.S. government guaranteed mortgage-backed securities — 16,961 — 16,961 Corporate bonds — 56,553 — 56,553 State and municipal bonds — 3,225 — 3,225 Government-sponsored enterprise obligations — 24,453 — 24,453 Mutual funds 6,406 — — 6,406 Total securities available-for-sale 6,406 291,513 — 297,919 Interest rate swaps — 1 — 1 Total assets $ 6,406 $ 291,514 $ — $ 297,920 Liabilities: Interest rate swaps $ — $ 2,710 $ — $ 2,710 December 31, 2016 Level 1 Level 2 Level 3 Total Assets: (In thousands) Government-sponsored mortgage-backed securities $ — $ 180,136 $ — $ 180,136 U.S. government guaranteed mortgage-backed securities — 17,350 — 17,350 Corporate bonds — 50,317 — 50,317 State and municipal bonds — 4,008 — 4,008 Government-sponsored enterprise obligations — 42,008 — 42,008 Mutual funds 6,296 — — 6,296 Total assets $ 6,296 $ 293,819 $ — $ 300,115 Liabilities: Interest rate swaps $ — $ 3,152 $ — $ 3,152 |
Schedule of assets measured at fair value on non-recurring basis | Total losses represent the change in carrying value as a result of fair value adjustments related to assets still held at September 30, 2016. At September 30, 2016 Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 Total Total Level 1 Level 2 Level 3 Gains (Losses) Gains (Losses (In thousands) Impaired Loans $ — $ — $ 2,059 $ — $ (220 ) |
Summary of fair values of financial instruments | The estimated fair values of our financial instruments are as follows: September 30, 2017 Carrying Value Fair Value Level 1 Level 2 Level 3 Total (In thousands) Assets: Cash and cash equivalents $ 28,900 $ 28,900 $ — $ — $ 28,900 Securities available-for-sale 297,919 6,406 291,513 — 297,919 Federal Home Loan Bank of Boston and other restricted stock 15,704 — — 15,704 15,704 Loans - net 1,608,255 — — 1,577,309 1,577,309 Accrued interest receivable 5,764 — — 5,764 5,764 Mortgage servicing rights 380 — 380 — 380 Derivative assets 1 — 1 — 1 Liabilities: Deposits 1,515,198 — — 1,514,641 1,514,641 Short-term borrowings 192,465 — 192,482 — 192,482 Long-term debt 106,339 — 106,517 — 106,517 Accrued interest payable 394 — — 394 394 Derivative liabilities 2,710 — 2,710 — 2,710 December 31, 2016 Carrying Value Fair Value Level 1 Level 2 Level 3 Total (In thousands) Assets: Cash and cash equivalents $ 70,234 $ 70,234 $ — $ — $ 70,234 Securities available-for-sale 300,115 6,296 293,819 — 300,115 Federal Home Loan Bank of Boston and other restricted stock 16,124 — — 16,124 16,124 Loans - net 1,556,416 — — 1,525,274 1,525,274 Accrued interest receivable 5,782 — — 5,782 5,782 Mortgage servicing rights 465 — 628 — 628 Liabilities: Deposits 1,518,071 — — 1,521,580 1,521,580 Short-term borrowings 172,351 — 172,351 — 172,351 Long-term debt 124,836 — 125,183 — 125,183 Accrued interest payable 1,012 — — 1,012 1,012 Derivative liabilities 3,152 — 3,152 — 3,152 |
SUMMARY OF SIGNIFICANT ACCOUN32
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | Sep. 30, 2017Office |
Western Massachusetts and Northern Connecticut [Member] | |
Number of banking offices in which bank operates | 21 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings per common share | ||||
Net income applicable to common stock | $ 3,815 | $ 628 | $ 12,674 | $ 2,981 |
Average number of common shares issued | 31,001 | 18,330 | 30,799 | 18,298 |
Less: Average unallocated ESOP Shares | (838) | (926) | (861) | (945) |
Less: Average unvested equity incentive plan shares | (60) | (26) | (42) | (13) |
Average number of common shares outstanding used to calculate basic earnings per common share | 30,103,095 | 17,377,844 | 29,895,621 | 17,340,101 |
Effect of dilutive equity incentive plan | 26 | 12 | ||
Effect of dilutive stock options | 90 | 166 | ||
Average number of common shares outstanding used to calculate diluted earnings per common share | 30,219,083 | 17,377,844 | 30,074,361 | 17,340,101 |
Basic earnings per share (in dollars per share) | $ 0.13 | $ 0.04 | $ 0.42 | $ 0.17 |
Diluted earnings per share (in dollars per share) | $ 0.13 | $ 0.02 | $ 0.42 | $ 0.17 |
COMPREHENSIVE INCOME_LOSS (Deta
COMPREHENSIVE INCOME/LOSS (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated other comprehensive income (loss), net of tax amount, ending | $ (9,467) | $ (12,661) | $ (7,278) | $ (10,978) |
Unrealized Losses Available For Sale Securities [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated other comprehensive income (loss) before tax, beginning | (3,782) | (5,863) | ||
Tax effect | 1,397 | 2,024 | ||
Accumulated other comprehensive income (loss), net of tax amount, ending | (2,385) | (3,839) | ||
Fair value of derivatives used for cash flow hedges [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated other comprehensive income (loss) before tax, beginning | (2,709) | (3,152) | ||
Termination fees on forward starting interest rate swaps | (3,933) | (4,733) | ||
Total derivatives | (6,642) | (7,885) | ||
Tax effect | 2,713 | 2,681 | ||
Accumulated other comprehensive income (loss), net of tax amount, ending | (3,929) | (5,204) | ||
Unrecognized actuarial loss on defined benefit plan [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated other comprehensive income (loss) before tax, beginning | (5,329) | (5,482) | ||
Tax effect | 2,176 | 1,864 | ||
Accumulated other comprehensive income (loss), net of tax amount, ending | $ (3,153) | $ (3,618) |
COMPREHENSIVE INCOME_LOSS (De35
COMPREHENSIVE INCOME/LOSS (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | $ (12,661) | $ (10,978) | ||
Current-period other comprehensive income (loss) | $ 640 | $ 318 | 3,194 | 3,700 |
Ending balance | (9,467) | (7,278) | (9,467) | (7,278) |
Defined Benefit Plan [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | (3,618) | (2,431) | ||
Current-period other comprehensive income (loss) | 465 | 47 | ||
Ending balance | (3,153) | (2,384) | (3,153) | (2,384) |
Derivative [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | (5,204) | (5,501) | ||
Current-period other comprehensive income (loss) | 1,275 | (1,230) | ||
Ending balance | (3,929) | (6,731) | (3,929) | (6,731) |
Securities [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | (3,839) | (3,046) | ||
Current-period other comprehensive income (loss) | 1,454 | 4,883 | ||
Ending balance | $ (2,385) | $ 1,837 | $ (2,385) | $ 1,837 |
SECURITIES (Details)
SECURITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Available-for-sale securities | ||
Amortized Cost | $ 301,701 | $ 305,978 |
Gross Unrealized Gains | 741 | 311 |
Gross Unrealized Losses | (4,523) | (6,174) |
Fair Value | 297,919 | 300,115 |
Government-Sponsored Mortgage-Backed Securities [Member] | ||
Available-for-sale securities | ||
Amortized Cost | 193,037 | 184,127 |
Gross Unrealized Gains | 120 | 33 |
Gross Unrealized Losses | (2,836) | (4,024) |
Fair Value | 190,321 | 180,136 |
US Government Guaranteed Mortgage-Backed Securities [Member] | ||
Available-for-sale securities | ||
Amortized Cost | 17,408 | 17,753 |
Gross Unrealized Losses | (447) | (403) |
Fair Value | 16,961 | 17,350 |
Corporate Bonds [Member] | ||
Available-for-sale securities | ||
Amortized Cost | 56,192 | 50,255 |
Gross Unrealized Gains | 582 | 265 |
Gross Unrealized Losses | (221) | (203) |
Fair Value | 56,553 | 50,317 |
States and Municipal Bonds [Member] | ||
Available-for-sale securities | ||
Amortized Cost | 3,223 | 4,117 |
Gross Unrealized Gains | 39 | 13 |
Gross Unrealized Losses | (37) | (122) |
Fair Value | 3,225 | 4,008 |
Government-Sponsored Enterprise Obligations [Member] | ||
Available-for-sale securities | ||
Amortized Cost | 25,150 | 43,140 |
Gross Unrealized Losses | (697) | (1,132) |
Fair Value | 24,453 | 42,008 |
Mutual Funds [Member] | ||
Available-for-sale securities | ||
Amortized Cost | 6,691 | 6,586 |
Gross Unrealized Losses | (285) | (290) |
Fair Value | $ 6,406 | $ 6,296 |
SECURITIES (Details 1)
SECURITIES (Details 1) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of Investments [Line Items] | ||
Available for Sale Securities, Amortized Cost, Total | $ 301,701 | $ 305,978 |
Debt Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Available for Sale Securities, Amortized Cost, Due after one year through five years | 28,079 | |
Available for Sale Securities, Amortized Cost, Due after five years through ten years | 49,735 | |
Available for Sale Securities, Amortized Cost, Due after ten years | 6,751 | |
Available for Sale Securities, Amortized Cost, Total | 84,565 | |
Available for Sale Securities, Fair Value, Due after one year through five years | 28,497 | |
Available for Sale Securities, Fair Value, Due after five years through ten years | 49,149 | |
Available for Sale Securities, Fair Value, Due after ten years | 6,585 | |
Available for Sale Securities, Fair Value, Total | 84,231 | |
Mortgage-Backed Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Available for Sale Securities, Amortized Cost, Total | 210,445 | |
Available for Sale Securities, Fair Value, Total | 207,282 | |
Available-For-Sale Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Available for Sale Securities, Amortized Cost, Total | 295,010 | |
Available for Sale Securities, Fair Value, Total | $ 291,513 |
SECURITIES (Details 2)
SECURITIES (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Gross gains realized | $ 71 | $ 1 | $ 117 | $ 1,521 |
Gross losses realized | (1) | (65) | (837) | |
Net gain realized | $ 70 | $ 1 | $ 52 | $ 684 |
SECURITIES (Details 3)
SECURITIES (Details 3) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017USD ($)Security | Dec. 31, 2016USD ($) | |
Available for sale, Less Than 12 Months Gross Unrealized Losses | $ 1,578 | $ 4,717 |
Available for sale, Less Than 12 Months Fair Value | 144,914 | 225,652 |
Available for sale, Over 12 Months Gross Unrealized Losses | 2,945 | 1,457 |
Available for sale, Over 12 Months Fair Value | 94,453 | 35,289 |
Amortized Cost Basis - less than 12 months | 146,492 | |
Gross Loss - less than 12 months | 1,578 | |
Amortized Cost Basis - Over 12 Months | 97,398 | |
Gross Loss - Over 12 Months | 2,945 | |
Government-Sponsored Mortgage-Backed Securities [Member] | ||
Available for sale, Less Than 12 Months Gross Unrealized Losses | 1,022 | 3,016 |
Available for sale, Less Than 12 Months Fair Value | 105,596 | 147,691 |
Available for sale, Over 12 Months Gross Unrealized Losses | 1,814 | 1,008 |
Available for sale, Over 12 Months Fair Value | $ 61,415 | 27,303 |
Number of Securities - less than 12 months | Security | 41 | |
Amortized Cost Basis - less than 12 months | $ 106,618 | |
Gross Loss - less than 12 months | $ 1,022 | |
Depreciation from Amortized Cost Basis (%) - less than 12 months | 1.00% | |
Number of Securities - Over 12 Months | Security | 27 | |
Amortized Cost Basis - Over 12 Months | $ 63,229 | |
Gross Loss - Over 12 Months | $ 1,814 | |
Depreciation from Amortized Cost Basis (%) - Over 12 months | 2.90% | |
US Government Guaranteed Mortgage-Backed Securities [Member] | ||
Available for sale, Less Than 12 Months Gross Unrealized Losses | $ 160 | 192 |
Available for sale, Less Than 12 Months Fair Value | 9,874 | 12,536 |
Available for sale, Over 12 Months Gross Unrealized Losses | 287 | 211 |
Available for sale, Over 12 Months Fair Value | $ 7,086 | 4,814 |
Number of Securities - less than 12 months | Security | 3 | |
Amortized Cost Basis - less than 12 months | $ 10,034 | |
Gross Loss - less than 12 months | $ 160 | |
Depreciation from Amortized Cost Basis (%) - less than 12 months | 1.60% | |
Number of Securities - Over 12 Months | Security | 4 | |
Amortized Cost Basis - Over 12 Months | $ 7,373 | |
Gross Loss - Over 12 Months | $ 287 | |
Depreciation from Amortized Cost Basis (%) - Over 12 months | 3.90% | |
Corporate Bonds [Member] | ||
Available for sale, Less Than 12 Months Gross Unrealized Losses | $ 210 | 203 |
Available for sale, Less Than 12 Months Fair Value | 20,915 | 18,481 |
Available for sale, Over 12 Months Gross Unrealized Losses | 11 | |
Available for sale, Over 12 Months Fair Value | $ 2,058 | |
Number of Securities - less than 12 months | Security | 7 | |
Amortized Cost Basis - less than 12 months | $ 21,125 | |
Gross Loss - less than 12 months | $ 210 | |
Depreciation from Amortized Cost Basis (%) - less than 12 months | 1.00% | |
Number of Securities - Over 12 Months | Security | 1 | |
Amortized Cost Basis - Over 12 Months | $ 2,069 | |
Gross Loss - Over 12 Months | $ 11 | |
Depreciation from Amortized Cost Basis (%) - Over 12 months | 0.50% | |
States and Municipal Bonds [Member] | ||
Available for sale, Less Than 12 Months Gross Unrealized Losses | 95 | |
Available for sale, Less Than 12 Months Fair Value | 1,507 | |
Available for sale, Over 12 Months Gross Unrealized Losses | $ 37 | 27 |
Available for sale, Over 12 Months Fair Value | $ 1,564 | 305 |
Number of Securities - Over 12 Months | Security | 3 | |
Amortized Cost Basis - Over 12 Months | $ 1,601 | |
Gross Loss - Over 12 Months | $ 37 | |
Depreciation from Amortized Cost Basis (%) - Over 12 months | 2.30% | |
Government-Sponsored Enterprise Obligations [Member] | ||
Available for sale, Less Than 12 Months Gross Unrealized Losses | $ 129 | 1,132 |
Available for sale, Less Than 12 Months Fair Value | 5,021 | 42,008 |
Available for sale, Over 12 Months Gross Unrealized Losses | 568 | |
Available for sale, Over 12 Months Fair Value | $ 19,432 | |
Number of Securities - less than 12 months | Security | 1 | |
Amortized Cost Basis - less than 12 months | $ 5,150 | |
Gross Loss - less than 12 months | $ 129 | |
Depreciation from Amortized Cost Basis (%) - less than 12 months | 2.50% | |
Number of Securities - Over 12 Months | Security | 8 | |
Amortized Cost Basis - Over 12 Months | $ 20,000 | |
Gross Loss - Over 12 Months | $ 568 | |
Depreciation from Amortized Cost Basis (%) - Over 12 months | 2.80% | |
Mutual Funds [Member] | ||
Available for sale, Less Than 12 Months Gross Unrealized Losses | $ 57 | 79 |
Available for sale, Less Than 12 Months Fair Value | 3,508 | 3,429 |
Available for sale, Over 12 Months Gross Unrealized Losses | 228 | 211 |
Available for sale, Over 12 Months Fair Value | $ 2,898 | $ 2,867 |
Number of Securities - less than 12 months | Security | 1 | |
Amortized Cost Basis - less than 12 months | $ 3,565 | |
Gross Loss - less than 12 months | $ 57 | |
Depreciation from Amortized Cost Basis (%) - less than 12 months | 1.60% | |
Number of Securities - Over 12 Months | Security | 2 | |
Amortized Cost Basis - Over 12 Months | $ 3,126 | |
Gross Loss - Over 12 Months | $ 228 | |
Depreciation from Amortized Cost Basis (%) - Over 12 months | 7.30% |
LOANS AND ALLOWANCE FOR LOAN 40
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | $ 1,613,858 | $ 1,561,617 | ||||
Unearned premiums and deferred loan fees and costs, net | 4,915 | 4,867 | ||||
Allowance for loan losses | (10,518) | $ (10,418) | (10,068) | $ (9,927) | $ (9,570) | $ (8,840) |
Loans, net | 1,608,255 | 1,556,416 | ||||
Commercial Real Estate [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | 716,890 | 720,741 | ||||
Allowance for loan losses | (4,404) | (4,472) | (4,083) | (4,077) | (3,956) | (3,856) |
Residential [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | 555,768 | 522,083 | ||||
Home Equity [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | 92,359 | 92,083 | ||||
Commercial and Industrial [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | 244,374 | 222,286 | ||||
Allowance for loan losses | (2,648) | (2,754) | (3,085) | (2,880) | (2,797) | (2,485) |
Consumer [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans | 4,467 | 4,424 | ||||
Allowance for loan losses | $ (60) | $ (53) | $ (38) | $ (26) | $ (20) | $ (22) |
LOANS AND ALLOWANCE FOR LOAN 41
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Servicing Asset [Roll Forward] | ||
Balance at the beginning of period: | $ 408 | $ 465 |
Amortization | (28) | (85) |
Balance at the end of year | 380 | 380 |
Fair value at the end of year | $ 538 | $ 538 |
LOANS AND ALLOWANCE FOR LOAN 42
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Beginning Balance | $ 10,418 | $ 9,570 | $ 10,068 | $ 8,840 |
Provision (credit) | 200 | 375 | 850 | 400 |
Charge-offs | (211) | (86) | (706) | (347) |
Recoveries | 111 | 68 | 306 | 1,034 |
Ending Balance | 10,518 | 9,927 | 10,518 | 9,927 |
Commercial Real Estate [Member] | ||||
Beginning Balance | 4,472 | 3,956 | 4,083 | 3,856 |
Provision (credit) | (68) | 62 | 239 | (676) |
Charge-offs | (36) | (170) | ||
Recoveries | 59 | 118 | 1,005 | |
Ending Balance | 4,404 | 4,077 | 4,404 | 4,077 |
Residential Real Estate [Member] | ||||
Beginning Balance | 3,126 | 2,804 | 2,862 | 2,431 |
Provision (credit) | 146 | 189 | 427 | 610 |
Charge-offs | (107) | (40) | (148) | (90) |
Recoveries | 80 | 104 | 2 | |
Ending Balance | 3,245 | 2,953 | 3,245 | 2,953 |
Commercial and Industrial [Member] | ||||
Beginning Balance | 2,754 | 2,797 | 3,085 | 2,485 |
Provision (credit) | (109) | 83 | (180) | 395 |
Charge-offs | (285) | |||
Recoveries | 3 | 28 | ||
Ending Balance | 2,648 | 2,880 | 2,648 | 2,880 |
Consumer [Member] | ||||
Beginning Balance | 53 | 20 | 38 | 22 |
Provision (credit) | 83 | 43 | 203 | 64 |
Charge-offs | (104) | (46) | (237) | (87) |
Recoveries | 28 | 9 | 56 | 27 |
Ending Balance | 60 | 26 | 60 | 26 |
Unallocated [Member] | ||||
Beginning Balance | 13 | (7) | 46 | |
Provision (credit) | 148 | (2) | 161 | (55) |
Ending Balance | $ 161 | $ (9) | $ 161 | $ (9) |
LOANS AND ALLOWANCE FOR LOAN 43
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 3) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||
Amount of allowance for non-impaired loans | $ 10,518 | $ 10,068 | ||||
Total allowance for loan losses | 10,518 | $ 10,418 | 10,068 | $ 9,927 | $ 9,570 | $ 8,840 |
Impaired loans | 10,843 | 6,829 | ||||
Non-impaired loans | 1,585,328 | 1,533,269 | ||||
Amount of loans acquired with deteriorated credit quality | 17,687 | 21,519 | ||||
Total loans | 1,613,858 | 1,561,617 | ||||
Commercial Real Estate [Member] | ||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||
Amount of allowance for non-impaired loans | 4,404 | 4,083 | ||||
Total allowance for loan losses | 4,404 | 4,472 | 4,083 | 4,077 | 3,956 | 3,856 |
Impaired loans | 3,993 | 3,335 | ||||
Non-impaired loans | 699,945 | 701,766 | ||||
Amount of loans acquired with deteriorated credit quality | 12,952 | 15,640 | ||||
Total loans | 716,890 | 720,741 | ||||
Residential Real Estate [Member] | ||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||
Amount of allowance for non-impaired loans | 3,245 | 2,862 | ||||
Total allowance for loan losses | 3,245 | 3,126 | 2,862 | 2,953 | 2,804 | 2,431 |
Impaired loans | 3,854 | 452 | ||||
Non-impaired loans | 640,622 | 609,107 | ||||
Amount of loans acquired with deteriorated credit quality | 3,651 | 4,607 | ||||
Total loans | 648,127 | 614,166 | ||||
Commercial and Industrial [Member] | ||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||
Amount of allowance for non-impaired loans | 2,648 | 3,085 | ||||
Total allowance for loan losses | 2,648 | 2,754 | 3,085 | 2,880 | 2,797 | 2,485 |
Impaired loans | 2,869 | 3,042 | ||||
Non-impaired loans | 240,421 | 217,972 | ||||
Amount of loans acquired with deteriorated credit quality | 1,084 | 1,272 | ||||
Total loans | 244,374 | 222,286 | ||||
Consumer [Member] | ||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||
Amount of allowance for non-impaired loans | 60 | 38 | ||||
Total allowance for loan losses | 60 | 53 | 38 | 26 | 20 | 22 |
Impaired loans | 127 | |||||
Non-impaired loans | 4,340 | 4,424 | ||||
Total loans | 4,467 | $ 4,424 | ||||
Unallocated [Member] | ||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||||
Amount of allowance for non-impaired loans | 161 | |||||
Total allowance for loan losses | $ 161 | $ 13 | $ (9) | $ (7) | $ 46 |
LOANS AND ALLOWANCE FOR LOAN 44
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 4) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | $ 5,218 | $ 3,381 |
Loans acquired from Chicopee Savings Bank | 5,846 | 6,312 |
Total Past Due | 11,064 | 9,693 |
Total legacy loans on non-accrual | 6,715 | 7,663 |
Loans acquired from Chicopee Savings Bank as non accrual | 6,450 | 6,394 |
Total past due on non accrual | 13,165 | 14,057 |
30-59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 3,248 | 1,654 |
Loans acquired from Chicopee Savings Bank | 2,957 | 3,854 |
Total Past Due | 6,205 | 5,508 |
60 - 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 1,077 | 894 |
Loans acquired from Chicopee Savings Bank | 1,610 | 1,907 |
Total Past Due | 2,687 | 2,801 |
Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 893 | 833 |
Loans acquired from Chicopee Savings Bank | 1,279 | 551 |
Total Past Due | 2,172 | 1,384 |
Commercial Real Estate [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 627 | 994 |
Loans on Non-Accrual | 2,181 | 2,740 |
Commercial Real Estate [Member] | 30-59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 196 | 302 |
Commercial Real Estate [Member] | 60 - 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 295 | 555 |
Commercial Real Estate [Member] | Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 136 | 137 |
Residential [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 3,450 | 1,742 |
Loans on Non-Accrual | 1,744 | 1,658 |
Residential [Member] | 30-59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 2,308 | 791 |
Residential [Member] | 60 - 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 570 | 262 |
Residential [Member] | Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 572 | 689 |
Home Equity [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 425 | 244 |
Loans on Non-Accrual | 73 | 37 |
Home Equity [Member] | 30-59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 218 | 208 |
Home Equity [Member] | 60 - 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 135 | 36 |
Home Equity [Member] | Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 72 | |
Commercial and Industrial [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 639 | 358 |
Loans on Non-Accrual | 2,700 | 3,214 |
Commercial and Industrial [Member] | 30-59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 472 | 326 |
Commercial and Industrial [Member] | 60 - 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 59 | 32 |
Commercial and Industrial [Member] | Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 108 | |
Consumer [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 77 | 43 |
Loans on Non-Accrual | 17 | 14 |
Consumer [Member] | 30-59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 54 | 27 |
Consumer [Member] | 60 - 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | 18 | 9 |
Consumer [Member] | Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total legacy loans | $ 5 | $ 7 |
LOANS AND ALLOWANCE FOR LOAN 45
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 5) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2017 | Sep. 30, 2016 | [2],[3] | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | [3] | |||
Total Impaired loans: | |||||||||
Recorded Investment | [1],[2] | $ 28,530 | $ 28,530 | $ 28,348 | |||||
Unpaid Principal Balance | [1],[2] | 37,753 | 37,753 | 38,055 | |||||
Average Recorded Investment | 29,718 | [1],[2] | $ 7,358 | 30,217 | $ 7,467 | ||||
Interest Income Recognized | 265 | [1],[2] | 17 | 870 | 49 | ||||
Commercial Real Estate [Member] | |||||||||
Total Impaired loans: | |||||||||
Recorded Investment | [1],[2] | 16,945 | 16,945 | 18,975 | |||||
Unpaid Principal Balance | [1],[2] | 19,380 | 19,380 | 21,330 | |||||
Average Recorded Investment | 17,731 | [1],[2] | 3,487 | 18,788 | 3,551 | ||||
Interest Income Recognized | 199 | [1],[2] | 17 | 650 | 49 | ||||
Residential Real Estate [Member] | |||||||||
Total Impaired loans: | |||||||||
Recorded Investment | [1],[2] | 6,939 | 6,939 | 5,059 | |||||
Unpaid Principal Balance | [1],[2] | 7,410 | 7,410 | 5,676 | |||||
Average Recorded Investment | 7,016 | [1],[2] | 515 | 6,548 | 482 | ||||
Interest Income Recognized | 11 | [1],[2] | 34 | ||||||
Home Equity [Member] | |||||||||
Total Impaired loans: | |||||||||
Recorded Investment | [1],[2] | 566 | 566 | ||||||
Unpaid Principal Balance | [1],[2] | 590 | 590 | ||||||
Average Recorded Investment | 407 | [1],[2] | 260 | ||||||
Interest Income Recognized | 1 | [1],[2] | 3 | ||||||
Commercial and Industrial [Member] | |||||||||
Total Impaired loans: | |||||||||
Recorded Investment | [1],[2] | 3,953 | 3,953 | 4,314 | |||||
Unpaid Principal Balance | [1],[2] | 10,242 | 10,242 | $ 11,049 | |||||
Average Recorded Investment | 4,442 | [1],[2] | $ 3,356 | 4,538 | $ 3,434 | ||||
Interest Income Recognized | 54 | [1],[2] | 183 | ||||||
Consumer [Member] | |||||||||
Total Impaired loans: | |||||||||
Recorded Investment | [1],[2] | 127 | 127 | ||||||
Unpaid Principal Balance | [1],[2] | 131 | 131 | ||||||
Average Recorded Investment | $ 122 | [1],[2] | $ 83 | ||||||
[1] | Includes loans acquired with deteriorated credit quality and performing troubled debt restructurings. | ||||||||
[2] | Includes loans acquired with deteriorated credit quality from the Chicopee Bancorp merger. | ||||||||
[3] | Includes loans acquired with deteriorated credit quality from the Chicopee Bancorp, Inc. merger. |
LOANS AND ALLOWANCE FOR LOAN 46
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 6) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($)Contracts | |
Number of Contracts | Contracts | 6 |
Pre- Modification Outstanding Recorded Investment | $ 4,782 |
Post- Modification Outstanding Recorded Investment | $ 4,782 |
Commercial Real Estate [Member] | |
Number of Contracts | Contracts | 1 |
Pre- Modification Outstanding Recorded Investment | $ 1,940 |
Post- Modification Outstanding Recorded Investment | $ 1,940 |
Commercial and Industrial [Member] | |
Number of Contracts | Contracts | 3 |
Pre- Modification Outstanding Recorded Investment | $ 2,681 |
Post- Modification Outstanding Recorded Investment | $ 2,681 |
Residential Real Estate [Member] | |
Number of Contracts | Contracts | 2 |
Pre- Modification Outstanding Recorded Investment | $ 161 |
Post- Modification Outstanding Recorded Investment | $ 161 |
LOANS AND ALLOWANCE FOR LOAN 47
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 7) - Chicopee Bancorp Inc [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Loans receivable - Contractual Required Payments Receivable beginning | $ 37,437 |
Loans receivable - Cash Expected To Be Collected beginning | 29,040 |
Loans receivable at acquisition - Non-Accretable Discount beginning | 8,397 |
Loans receivable at acquisition - Accretable Yield beginning | 7,521 |
Loans receivable at acquisition - Outstanding beginning | 21,519 |
Collections - Contractually Required Payments Receivable | (3,860) |
Collections - Cash Flows Expected to be Collected | (3,326) |
Collections - Non-Accretable DIscount | (534) |
Collections - Accretable Yield | (1,003) |
Collections | (2,323) |
Dispositions - Contractually Required Payments Receivable | (1,833) |
Dispositions - Cash Flows Expected to be Collected | (1,503) |
Dispositions - Non-Accretable Discount | (330) |
Dispositions - Accretable Yield | 6 |
Dispositions | (1,509) |
Loans receivable - Contractual Required Payments Receivable ending | 31,744 |
Loans receivable - Cash Expected To Be Collected ending | 24,211 |
Loans receivable at acquisition - Non-Accretable Discount ending | 7,533 |
Loans receivable at acquisition - Accretable Yield ending | 6,524 |
Loans receivable at acquisition - Outstanding ending | $ 17,687 |
LOANS AND ALLOWANCE FOR LOAN 48
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 8) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | $ 1,613,858 | $ 1,561,617 |
Loans rated 1-3 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,486,697 | 1,467,326 |
Loans rated 4 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 81,019 | 40,834 |
Loans rated 5 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 22,245 | 20,795 |
Loans rated 6 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 23,897 | 27,873 |
Loans rated 7 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 4,789 | |
Commercial Real Estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 716,890 | 720,741 |
Commercial Real Estate [Member] | Loans rated 1-3 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 647,599 | 673,957 |
Commercial Real Estate [Member] | Loans rated 4 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 45,339 | 24,207 |
Commercial Real Estate [Member] | Loans rated 5 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 14,724 | 14,068 |
Commercial Real Estate [Member] | Loans rated 6 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 9,228 | 6,604 |
Commercial Real Estate [Member] | Loans rated 7 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,905 | |
Residential [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 555,768 | 522,083 |
Residential [Member] | Loans rated 1-3 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 549,936 | 516,339 |
Residential [Member] | Loans rated 4 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 95 | |
Residential [Member] | Loans rated 6 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 5,737 | 5,744 |
Home Equity [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 92,359 | 92,083 |
Home Equity [Member] | Loans rated 1-3 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 91,854 | 91,964 |
Home Equity [Member] | Loans rated 6 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 505 | 119 |
Commercial and Industrial [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 244,374 | 222,286 |
Commercial and Industrial [Member] | Loans rated 1-3 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 192,968 | 180,675 |
Commercial and Industrial [Member] | Loans rated 4 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 35,585 | 16,621 |
Commercial and Industrial [Member] | Loans rated 5 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 7,521 | 6,727 |
Commercial and Industrial [Member] | Loans rated 6 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 8,300 | 15,379 |
Commercial and Industrial [Member] | Loans rated 7 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 2,884 | |
Consumer [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 4,467 | 4,424 |
Consumer [Member] | Loans rated 1-3 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 4,340 | 4,391 |
Consumer [Member] | Loans rated 4 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 6 | |
Consumer [Member] | Loans rated 6 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | $ 127 | $ 27 |
LOANS AND ALLOWANCE FOR LOAN 49
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details Narrative) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2017USD ($)$ / Loan | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Purchase of residential mortgages | $ 48,205 | $ 107,632 | |
Serviced commercial loans for participants | 32,400 | $ 42,600 | |
Mortgage loans serviced for others | 67,800 | 75,200 | |
Loans | 1,613,858 | 1,561,617 | |
Net service fee income | $ 49 | 3 | |
Weighted average internal rate of return | 10.05% | ||
Weighted average servicing fee | 0.2501% | ||
Net cost to service loans | $ / Loan | 59.32 | ||
Impaired loans desginated as TDR | $ 4,600 | ||
Commercial Real Estate - Construction Loans [Member] | |||
Loans | $ 67,600 | $ 88,900 |
GOODWILL AND OTHER INTANGIBLE50
GOODWILL AND OTHER INTANGIBLES (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning of the year | $ 13,747 |
Current period adjustments | (1,260) |
Balance at end of the year | $ 12,487 |
GOODWILL AND OTHER INTANGIBLE51
GOODWILL AND OTHER INTANGIBLES (Details 1) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Core Deposit Intangibles [Roll Forward] | ||
Balance at end of the year | $ 4,156 | $ 4,438 |
Core Deposit Intangibles [Member] | ||
Core Deposit Intangibles [Roll Forward] | ||
Balance at beginning of the year | 4,438 | |
Amortization | (282) | |
Balance at end of the year | $ 4,156 |
GOODWILL AND OTHER INTANGIBLE52
GOODWILL AND OTHER INTANGIBLES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Mar. 31, 2017 | Sep. 30, 2017 | |
Acquired deposit liabilities | $ 545,700 | |
Acquired core deposit liabilities | 345,200 | |
Amortization of core deposit intangible | 282 | |
Reduction in Goodwill | $ 1,400 | |
Adjustment to aquire asset | 2,400 | |
Reamining adjustments to goodwill | $ 140 | |
Core Deposit Intangibles [Member] | ||
Acquired core deposit liabilities | 4,500 | |
Future amortization of core deposit intangible assets years 1-5 | 375 | |
Future amortization of core deposit intangible assets thereafter | $ 2,300 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - Stock Options [Member] $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($)$ / sharesshares | |
Options, Outstanding | |
Outstanding at beginning | shares | 1,178,899 |
Exercised | shares | (921,849) |
Outstanding at end | shares | 257,050 |
Exercisable at end | shares | 257,050 |
Options, Outstanding, Weighted Average Exercise Price | |
Outstanding at beginning | $ / shares | $ 6.01 |
Exercised | $ / shares | 5.93 |
Outstanding at end | $ / shares | 6.31 |
Exercisable at end | $ / shares | $ 6.31 |
Options, Outstanding, Weighted Average Remaining Contractual Term (in years) | |
Outstanding at beginning | 1 year 11 months 23 days |
Exercised | 10 months 28 days |
Outstanding at end | 4 years 7 months 28 days |
Exercisable at end | 4 years 7 months 28 days |
Options, Outstanding, Aggregate Intrinsic Value | |
Outstanding at beginning | $ | $ 3,930 |
Exercised | $ | 3,675 |
Outstanding at end | $ | 1,175 |
Exercisable at end | $ | $ 1,175 |
SHARE-BASED COMPENSATION (Det54
SHARE-BASED COMPENSATION (Details 1) | 9 Months Ended |
Sep. 30, 2017 | |
Threshold [Member] | |
December 31, 2017 | 6.00% |
December 31, 2018 | 6.30% |
December 31, 2019 | 6.50% |
Target [Member] | |
December 31, 2017 | 6.60% |
December 31, 2018 | 7.00% |
December 31, 2019 | 7.20% |
Maximum [Member] | |
December 31, 2017 | 7.30% |
December 31, 2018 | 7.60% |
December 31, 2019 | 7.90% |
SHARE-BASED COMPENSATION (Det55
SHARE-BASED COMPENSATION (Details 2) - Restricted Stock [Member] - $ / shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Shares [Roll Forward] | ||
Beginning balance | 91,371 | 54,160 |
Shares granted | 89,042 | 62,740 |
Shares vested | (21,552) | (11,200) |
Ending balance | 158,861 | 105,700 |
Weighted Average Grant Date Fair Value [Roll Forward] | ||
Beginning balance | $ 7.51 | $ 7.28 |
Shares granted | 10.15 | 7.73 |
Shares vested | 7.44 | 7.18 |
Ending balance | $ 9 | $ 7.56 |
SHARE-BASED COMPENSATION (Det56
SHARE-BASED COMPENSATION (Detail Narrative) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||||
May 31, 2017 | May 31, 2016 | Jan. 31, 2015 | Sep. 30, 2017 | Sep. 30, 2016 | May 31, 2014 | |
Stock Options | ||||||
Cash received for options exercised | $ 5,465 | |||||
Restricted Stock Awards | ||||||
Share-based compensation expense | $ 490 | $ 186 | ||||
LTI Plan [Member] | ||||||
Restricted Stock Awards | ||||||
Shares granted | 89,042 | 62,740 | ||||
Share based compensation, shares available for grant | 315,658 | |||||
Stock Compensation Plan [Member] | ||||||
Restricted Stock Awards | ||||||
Shares authorized | 516,000 | |||||
Shares granted | 48,560 | |||||
Vesting term | 5 years | |||||
Time-Vested Restricted Stock [Member] | LTI Plan [Member] | ||||||
Restricted Stock Awards | ||||||
Percent of awards under plan | 50.00% | |||||
Performance Shares [Member] | LTI Plan [Member] | ||||||
Restricted Stock Awards | ||||||
Shares granted | 33,883 | 26,197 | ||||
Vesting term | 3 years | 3 years | ||||
Percent of awards under plan | 50.00% | |||||
Return on equity - performance threshold | 5.85% | |||||
Return on equity - target | 6.32% | |||||
Performance Shares [Member] | LTI Plan [Member] | Threshold [Member] | ||||||
Restricted Stock Awards | ||||||
Percent of awards participants may earn | 50.00% | 50.00% | ||||
Performance Shares [Member] | LTI Plan [Member] | Target [Member] | ||||||
Restricted Stock Awards | ||||||
Percent of awards participants may earn | 100.00% | 100.00% | ||||
Performance Shares [Member] | LTI Plan [Member] | Maximum [Member] | ||||||
Restricted Stock Awards | ||||||
Percent of awards participants may earn | 150.00% | |||||
Retention Based Shares [Member] | LTI Plan [Member] | ||||||
Restricted Stock Awards | ||||||
Shares granted | 55,159 | 36,543 | ||||
Retention Based Shares [Member] | LTI Plan [Member] | Award, Tranche One [Member] | ||||||
Restricted Stock Awards | ||||||
Shares granted | 21,276 | 10,352 | ||||
Vesting term | 1 year | 1 year | ||||
Retention Based Shares [Member] | LTI Plan [Member] | Award, Tranche Two [Member] | ||||||
Restricted Stock Awards | ||||||
Shares granted | 33,883 | 26,191 | ||||
Vesting term | 3 years | 3 years |
SHORT-TERM BORROWINGS AND LON57
SHORT-TERM BORROWINGS AND LONG-TERM DEBT (Detail Narrative) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Short-term borrowings | $ 192,465 | $ 172,351 |
Long-term debt | 106,339 | 124,836 |
Government-Sponsored Mortgage-Backed Securities [Member] | ||
Fair value of collateralized repurchase agreements | 6,800 | 24,600 |
Mortgage-Backed Securities [Member] | ||
Fair value of collateralized repurchase agreements | 61,100 | 57,600 |
Cutomer Repurchase Agreements [Member] | ||
Customer repurchase agreements | 18,500 | 17,400 |
FHLBB Ideal Way Line of Credit [Member] | ||
Line of credit available | 9,500 | 9,500 |
BBN [Member] | ||
Line of credit available | 4,000 | 4,000 |
Required cash reserve amount | 300 | 300 |
PNC Bank [Member] | ||
Line of credit available | 50,000 | 50,000 |
FHLBB Advances [Member] | ||
Short-term borrowings | 174,000 | 155,000 |
Long-term debt | $ 106,300 | $ 124,800 |
PENSION BENEFITS (Details)
PENSION BENEFITS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Defined Benefit Plan [Abstract] | ||||
Service cost | $ 245 | $ 283 | $ 778 | $ 854 |
Interest cost | 254 | 240 | 761 | 719 |
Expected return on assets | (298) | (275) | (895) | (823) |
Amortization of actuarial losses | 51 | 24 | 153 | 71 |
Net periodic pension cost | $ 252 | $ 272 | $ 797 | $ 821 |
DERIVATIVES AND HEDGING ACTIV59
DERIVATIVES AND HEDGING ACTIVITIES (Details) - Interest Rate Swap Agreement [Member] - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair value of derivative assets | $ 2,709 | $ 3,152 |
Other Assets [Member] | Designated as Hedging Instrument [Member] | ||
Fair value of derivative assets | 1 | |
Other Liabilities [Member] | Designated as Hedging Instrument [Member] | ||
Fair value of derivative liability | $ 2,710 | $ 3,152 |
DERIVATIVES AND HEDGING ACTIV60
DERIVATIVES AND HEDGING ACTIVITIES (Details 1) - Interest Rate Swap Agreement [Member] - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Notional Amount | $ 75,000 | $ 75,000 |
Weighted Average Maturity | 2 years 7 months 6 days | 3 years 4 months 24 days |
Weighted Average Rate Received | 1.31% | 0.92% |
Weighted Average Rate Paid | 2.46% | 2.46% |
Estimated Fair Value | $ (2,709) | $ (3,152) |
DERIVATIVES AND HEDGING ACTIV61
DERIVATIVES AND HEDGING ACTIVITIES (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Interest Rate Swap [Member] | Derivatives Designated As Cash Flow Hedges [Member] | ||||
Amount of Loss Recognized in OCI on Derivative | $ (14) | $ 417 | $ (307) | $ (2,863) |
DERIVATIVES AND HEDGING ACTIV62
DERIVATIVES AND HEDGING ACTIVITIES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Termination value of derivatives in a net liability position | $ 2,700 | $ 2,700 | ||||
Estimated amount to be reclassified during the next 12 month period | 1,800 | 1,800 | ||||
Cash posted as collateral | 50 | 50 | ||||
Mortgage-Backed Securities [Member] | ||||||
Fair value of mortgage backed securities collateralized | 3,000 | 3,000 | ||||
Terminated Foward Starting Interest Rate Swap [Member] | ||||||
Derivative notional amount | $ 32,500 | $ 47,500 | ||||
Termination fees | $ 3,400 | $ 2,400 | ||||
Termination fees amortized period | 6 years | 5 years | ||||
Interest Rate Swap [Member] | ||||||
Reclassifications amount, effective portion | $ 497 | $ 397 | $ 1,600 | $ 1,000 |
FAIR VALUE OF ASSETS AND LIABLI
FAIR VALUE OF ASSETS AND LIABLITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 297,919 | $ 300,115 |
Interest rate swaps - Assets | 1 | |
Interest rate swaps - Liabilities | 2,710 | 3,152 |
Mutual Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 6,406 | 6,296 |
Government-Sponsored Mortgage-Backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 190,321 | 180,136 |
US Government Guaranteed Mortgage-Backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 16,961 | 17,350 |
Corporate Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 56,553 | 50,317 |
States and Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 3,225 | 4,008 |
Government-Sponsored Enterprise Obligations [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 24,453 | 42,008 |
Fair Value Inputs Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 6,406 | 6,296 |
Fair Value Inputs Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 291,513 | 293,819 |
Interest rate swaps - Assets | 1 | |
Interest rate swaps - Liabilities | 2,710 | 3,152 |
Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 297,919 | |
Interest rate swaps - Assets | 1 | |
Total assets | 297,920 | 300,115 |
Interest rate swaps - Liabilities | 2,710 | 3,152 |
Recurring [Member] | Mutual Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mutual funds | 6,406 | 6,296 |
Recurring [Member] | Government-Sponsored Mortgage-Backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 190,321 | 180,136 |
Recurring [Member] | US Government Guaranteed Mortgage-Backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 16,961 | 17,350 |
Recurring [Member] | Corporate Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 56,553 | 50,317 |
Recurring [Member] | States and Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 3,225 | 4,008 |
Recurring [Member] | Government-Sponsored Enterprise Obligations [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 24,453 | 42,008 |
Recurring [Member] | Fair Value Inputs Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 6,406 | |
Total assets | 6,406 | 6,296 |
Recurring [Member] | Fair Value Inputs Level 1 [Member] | Mutual Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mutual funds | 6,406 | 6,296 |
Recurring [Member] | Fair Value Inputs Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 291,513 | |
Interest rate swaps - Assets | 1 | |
Total assets | 291,514 | 293,819 |
Interest rate swaps - Liabilities | 2,710 | 3,152 |
Recurring [Member] | Fair Value Inputs Level 2 [Member] | Government-Sponsored Mortgage-Backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 190,321 | 180,136 |
Recurring [Member] | Fair Value Inputs Level 2 [Member] | US Government Guaranteed Mortgage-Backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 16,961 | 17,350 |
Recurring [Member] | Fair Value Inputs Level 2 [Member] | Corporate Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 56,553 | 50,317 |
Recurring [Member] | Fair Value Inputs Level 2 [Member] | States and Municipal Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 3,225 | 4,008 |
Recurring [Member] | Fair Value Inputs Level 2 [Member] | Government-Sponsored Enterprise Obligations [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | $ 24,453 | $ 42,008 |
FAIR VALUE OF ASSETS AND LIAB64
FAIR VALUE OF ASSETS AND LIABLITIES (Details 1) - Nonrecurring [Member] - Impaired Loans [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Gains (Losses) arising from fair value adjustment of assets | $ (220) | |
Fair Value Inputs Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Gains (Losses) arising from fair value adjustment of assets | $ 2,059 |
FAIR VALUE OF ASSETS AND LIAB65
FAIR VALUE OF ASSETS AND LIABLITIES (Details 2) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Assets: | ||
Cash and cash equivalents | $ 28,900 | $ 70,234 |
Securities available for sale | 297,919 | 300,115 |
Federal Home Loan Bank of Boston and other restricted stock | 15,704 | 16,124 |
Loans - net | 1,577,309 | 1,525,274 |
Accrued interest receivable | 5,764 | 5,782 |
Mortgage servicing rights | 380 | 628 |
Derivative assets | 1 | |
Liabilities: | ||
Deposits | 1,514,641 | 1,521,580 |
Short-term borrowings | 192,482 | 172,351 |
Long-term debt | 106,517 | 125,183 |
Accrued interest payable | 394 | 1,012 |
Derivative liabilities | 2,710 | 3,152 |
Fair Value Inputs Level 1 [Member] | ||
Assets: | ||
Cash and cash equivalents | 28,900 | 70,234 |
Securities available for sale | 6,406 | 6,296 |
Fair Value Inputs Level 2 [Member] | ||
Assets: | ||
Securities available for sale | 291,513 | 293,819 |
Mortgage servicing rights | 380 | 628 |
Derivative assets | 1 | |
Liabilities: | ||
Short-term borrowings | 192,482 | 172,351 |
Long-term debt | 106,517 | 125,183 |
Derivative liabilities | 2,710 | 3,152 |
Fair Value Inputs Level 3 [Member] | ||
Assets: | ||
Federal Home Loan Bank of Boston and other restricted stock | 15,704 | 16,124 |
Loans - net | 1,577,309 | 1,525,274 |
Accrued interest receivable | 5,764 | 5,782 |
Liabilities: | ||
Deposits | 1,514,641 | 1,521,580 |
Accrued interest payable | 394 | 1,012 |
Carrying Value [Member] | ||
Assets: | ||
Cash and cash equivalents | 28,900 | 70,234 |
Securities available for sale | 297,919 | 300,115 |
Federal Home Loan Bank of Boston and other restricted stock | 15,704 | 16,124 |
Loans - net | 1,608,255 | 1,556,416 |
Accrued interest receivable | 5,764 | 5,782 |
Mortgage servicing rights | 380 | 465 |
Derivative assets | 1 | |
Liabilities: | ||
Deposits | 1,515,198 | 1,518,071 |
Short-term borrowings | 192,465 | 172,351 |
Long-term debt | 106,339 | 124,836 |
Accrued interest payable | 394 | 1,012 |
Derivative liabilities | $ 2,710 | $ 3,152 |
RECENT ACCOUNTING PRONOUNCEME66
RECENT ACCOUNTING PRONOUNCEMENTS (Details Narrative) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Stock Options [Member] | |
Tax benefit | $ 821 |