Document and Entity Information
Document and Entity Information - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Mar. 08, 2019 | Jun. 30, 2018 | Jun. 29, 2018 | |
Document And Entity Information | ||||
Entity Registrant Name | Western New England Bancorp, Inc. | |||
Entity Central Index Key | 0001157647 | |||
Document Type | 10-K | |||
Document Period End Date | Dec. 31, 2018 | |||
Amendment Flag | false | |||
Current Fiscal Year End Date | --12-31 | |||
Entity Well Known Seasoned Issuer | No | |||
Entity Voluntary Filers | No | |||
Entity's Reporting Status Current | Yes | |||
Entity Emerging Growth Company | false | |||
Entity Small Business | true | |||
Entity Shell Company | false | |||
Entity Filer Category | Non-accelerated Filer | |||
Entity Public Float | $ 327,213,777 | |||
Share price | $ 11 | |||
Entity Common Stock, Shares Outstanding | 27,263,103 | |||
Document Fiscal Period Focus | FY | |||
Document Fiscal Year Focus | 2018 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
ASSETS | |||
Cash and due from banks | $ 20,616 | $ 21,607 | |
Federal Funds Sold | 1,246 | 322 | |
Interest-bearing deposits and other short-term investments | 4,927 | 5,203 | |
Cash and cash equivalents | 26,789 | 27,132 | |
Securities available-for-sale, at fair value | 253,748 | [1] | 288,416 |
Marketable equity securities, at fair value | 6,408 | ||
Federal Home Loan Bank stock and other restricted stock , at cost | 14,695 | 15,553 | |
Loans, net of allowance for loan losses of $12,053 and $10,831 at December 31, 2018 and 2017, respectively | 1,684,804 | 1,619,850 | |
Premises and equipment, net | 24,624 | 23,500 | |
Accrued interest receivable | 5,652 | 5,946 | |
Bank-owned life insurance | 69,252 | 68,762 | |
Deferred tax asset, net | 9,872 | 8,784 | |
Goodwill | 12,487 | 12,487 | |
Core deposit intangible | 3,688 | 4,063 | |
Other real estate owned | 155 | ||
Other assets | 6,803 | 8,422 | |
Total Assets | 2,118,822 | 2,083,070 | |
Deposits: | |||
Non-interest-bearing | 355,389 | 311,851 | |
Interest-bearing | 1,240,604 | 1,194,231 | |
Total deposits | 1,595,993 | 1,506,082 | |
Short-term borrowings | 59,250 | 144,650 | |
Long-term debt | 208,018 | 164,786 | |
Securities pending settlement | 221 | 304 | |
Other liabilities | 18,311 | 19,967 | |
Total liabilities | 1,881,793 | 1,835,789 | |
SHAREHOLDERS' EQUITY: | |||
Preferred stock - $0.01 par value, 5,000,000 shares authorized, none outstanding at December 31, 2018 and December 31, 2017 | |||
Common stock - $0.01 par value, 75,000,000 shares authorized, 28,393,348 shares issued and outstanding at December 31, 2018; 30,487,309 shares issued and outstanding at December 31, 2017 | 284 | 305 | |
Additional paid-in capital | 182,096 | 203,527 | |
Unearned compensation - ESOP | (5,171) | (5,786) | |
Unearned compensation - Equity Incentive Plan | (872) | (791) | |
Retained earnings | 74,108 | 62,578 | |
Accumulated other comprehensive loss | (13,416) | (12,552) | |
TOTAL SHAREHOLDERS' EQUITY: | 237,029 | 247,281 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 2,118,822 | $ 2,083,070 | |
[1] | Does not include investments in restricted stock consisting of $14.7 million and $15.6 million at December 31, 2018 and December 31, 2017, respectively. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for loan losses | $ 12,053 | $ 10,831 |
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 | 28,393,348 | 30,487,309 |
Common stock, outstanding | 28,393,348 | 30,487,309 |
CONSOLIDATED STATEMENTS OF NET
CONSOLIDATED STATEMENTS OF NET INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Interest and dividend income: | |||
Residential and commercial real estate loans | $ 57,647 | $ 53,733 | $ 32,562 |
Commercial and industrial loans | 12,801 | 11,587 | 7,431 |
Consumer loans | 347 | 344 | 205 |
Debt securities, taxable | 6,920 | 7,333 | 7,387 |
Debt securities, tax-exempt | 85 | 104 | 168 |
Equity securities | 152 | 140 | 180 |
Other investments | 863 | 678 | 550 |
Short-term investments | 175 | 120 | 115 |
Total interest and dividend income | 78,990 | 74,039 | 48,598 |
INTEREST EXPENSE: | |||
Deposits | 11,683 | 8,448 | 6,581 |
Long-term debt | 4,380 | 2,261 | 2,266 |
Short-term borrowings | 2,915 | 3,936 | 2,438 |
Total interest expense | 18,978 | 14,645 | 11,285 |
Net interest and dividend income | 60,012 | 59,394 | 37,313 |
Provision for loan losses | 1,900 | 1,360 | 575 |
Net interest and dividend income after provision for loan losses | 58,112 | 58,034 | 36,738 |
Non-interest income (loss): | |||
Service charges and fees | 6,937 | 6,389 | 4,181 |
Income from BOLI | 1,825 | 1,824 | 1,558 |
Loss on prepayment of borrowings | (915) | ||
Gain on bank-owned life insurance death benefit | 715 | ||
(Loss) gain on available-for-sale securities, net | (281) | 52 | 1,139 |
Gain on sale of OREO | 48 | 9 | |
Unrealized losses on marketable equity securities | (142) | ||
Other income | 131 | 227 | 8 |
Total non-interest income | 9,233 | 8,501 | 5,971 |
Non-interest expense: | |||
Salaries and employees benefits | 25,982 | 25,431 | 17,386 |
Occupancy | 3,974 | 3,774 | 2,587 |
Furniture and equipment | 1,561 | 1,533 | 1,084 |
Data processing | 2,638 | 2,372 | 1,696 |
Professional fees | 2,810 | 2,559 | 2,177 |
FDIC insurance assessment | 603 | 620 | 716 |
Merger related expenses | 526 | 4,051 | |
Advertising | 1,395 | 1,296 | 910 |
Other expenses | 7,274 | 6,676 | 4,699 |
Total non-interest expense | 46,237 | 44,787 | 35,306 |
Income before income taxes | 21,108 | 21,748 | 7,403 |
Income tax provision | 4,700 | 9,428 | 2,569 |
Net income | $ 16,408 | $ 12,320 | $ 4,834 |
Earnings per common share: | |||
Basic earnings per share (in dollars per share) | $ 0.57 | $ 0.41 | $ 0.25 |
Weighted average shares outstanding (in shares) | 28,886,904 | 29,858,984 | 19,707,948 |
Diluted earnings per share (in dollars per share) | $ 0.57 | $ 0.41 | $ 0.24 |
Weighted average diluted shares outstanding (in shares) | 29,029,394 | 30,026,638 | 19,803,744 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 16,408 | $ 12,320 | $ 4,834 | |
Unrealized (losses) gains on securities: | ||||
Unrealized holding (losses) gains on available-for-sale securities | (4,814) | 557 | (2,381) | |
Reclassification adjustment for net losses (gains) realized in income | [1] | 281 | (52) | (1,139) |
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 | ||
Unrealized (losses) gains on securities | (4,533) | 505 | (1,206) | |
Tax effect | 938 | (22) | 413 | |
Net-of-tax amount | (3,595) | 483 | (793) | |
Cash flow hedges: | ||||
Change in fair value of derivatives used for cash flow hedges | 442 | 31 | (1,126) | |
Reclassification adjustment for loss realized in interest expense | [4] | 452 | 970 | 619 |
Reclassification adjustment for termination fee realized in interest expense | [5] | 1,068 | 1,068 | 956 |
Unrealized gains on cash flow hedges | 1,962 | 2,069 | 449 | |
Tax effect | (551) | (305) | (152) | |
Net-of-tax amount | 1,411 | 1,764 | 297 | |
Defined benefit pension plan: | ||||
Gains (losses) arising during the period | 1,328 | (663) | (1,906) | |
Amortization of defined benefit plans actuarial loss | [6] | 177 | 124 | 109 |
Unrecognized actuarial gains (losses) defined benefit plan | 1,505 | (539) | (1,797) | |
Tax effect | (422) | 527 | 610 | |
Net-of-tax amount | 1,083 | (12) | (1,187) | |
Other comprehensive (loss) income | (1,101) | 2,235 | (1,683) | |
Comprehensive income | $ 15,307 | $ 14,555 | $ 3,151 | |
[1] | Realized gains realized on available-for-sale securities are recognized as a component of non-interest income. The tax effects applicable to net realized gains were $(9,000), $21,000 and $387,000 for the years ended December 31, 2018, 2017 and 2016, respectively. | |||
[2] | Amortization of net unrealized gains and losses 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 year ended December 31, 2016. | |||
[3] | Income tax effects associated with the reclassification adjustments upon transfer of held-to-maturity to available-for-sale were $790,000 for the year ended December 31, 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 $127,000, $396,000 and $210,000 for the years ended December 31, 2018, 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 $300,000, $436,000 and $325,000 for the years ended December 31, 2018, 2017 and 2016, respectively. | |||
[6] | Amounts represent the reclassification of defined benefit plans amortization and have been recognized as a component of non-interest expense. Income tax effects associated with the reclassification adjustments were $50,000, $51,000 and $37,000 for the years ended December 31, 2018, 2017 and 2016, respectively. |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Income tax benefits on realized losses on available-for-sale securities | $ (9) | $ 21 | $ 387 |
Income tax expense (benefits) on amortization of net unrealized (gain) loss on held-to-maturity securities | (9) | ||
Income tax expense (benefits) on net unrealized (loss) gain upon transfer of held-to-maturity to available-for-sale | 790 | ||
Income tax benefit on derivative instruments | 127 | 396 | 210 |
Income tax benefit on termination fee on derivative instruments | 300 | 436 | 325 |
Income tax benefit, defined benefit plans | $ 50 | $ 51 | $ 37 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - 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 |
BALANCE AT BEGINNING at Dec. 31, 2015 | $ 183 | $ 108,210 | $ (6,952) | $ (313) | $ 49,316 | $ (10,978) | $ 139,466 |
BALANCE AT BEGINNING (shares) at Dec. 31, 2015 | 18,267,747 | ||||||
Comprehensive income | 4,834 | (1,683) | 3,151 | ||||
Common stock held by ESOP committed to be released | 96 | 534 | 630 | ||||
Share-based compensation - equity incentive plan | 262 | 262 | |||||
Excess tax benefit from equity incentive plan | 12 | 12 | |||||
Acquisition of Chicopee Bancorp | $ 125 | 98,386 | 98,511 | ||||
Acquisition of Chicopee Bancorp (in shares) | 12,469,334 | ||||||
Retirement of Chicopee Bancorp ESOP | $ (5) | (4,102) | (4,107) | ||||
Retirement of Chicopee Bancorp ESOP (in shares) | (519,922) | ||||||
Premium to equity for rollover of Chicopee Bancorp options | 2,864 | 2,864 | |||||
Retirement of WNEB stock previously owned by Chicopee Bancorp | (236) | (236) | |||||
Retirement of WNEB stock previously owned by Chicopee Bancorp (in shares) | (30,000) | ||||||
Common stock repurchased | $ (2) | (1,831) | (1,833) | ||||
Common stock repurchased (in shares) | (201,296) | ||||||
Issuance of common stock in connection with stock option exercises | $ 2 | 1,969 | 1,971 | ||||
Issuance of common stock in connection with stock option exercises (shares) | 331,628 | ||||||
Issuance of common stock in connection with equity incentive plan | $ 1 | 484 | (485) | ||||
Issuance of common stock in connection with equity incentive plan (shares) | 62,740 | ||||||
Excess tax benefits in connection with stock option exercises | 144 | 144 | |||||
Cash dividends declared and paid | (2,439) | (2,439) | |||||
BALANCE AT ENDING at Dec. 31, 2016 | $ 304 | 205,996 | (6,418) | (536) | 51,711 | (12,661) | 238,396 |
BALANCE AT ENDING (shares) at Dec. 31, 2016 | 30,380,231 | ||||||
Cumulative-effect adjustment due to change in accounting principle at Dec. 31, 2016 | 2,126 | (2,126) | |||||
Comprehensive income | 12,320 | 2,235 | 14,555 | ||||
Common stock held by ESOP committed to be released | 326 | 632 | 958 | ||||
Share-based compensation - equity incentive plan | 649 | 649 | |||||
Common stock repurchased | $ (9) | (9,154) | (9,163) | ||||
Common stock repurchased (in shares) | (903,813) | ||||||
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 (shares) | 921,849 | ||||||
Issuance of common stock in connection with equity incentive plan | $ 1 | 903 | (904) | ||||
Issuance of common stock in connection with equity incentive plan (shares) | 89,042 | ||||||
Cash dividends declared and paid | (3,579) | (3,579) | |||||
BALANCE AT ENDING at Dec. 31, 2017 | $ 305 | 203,527 | (5,786) | (791) | 62,578 | (12,552) | 247,281 |
BALANCE AT ENDING (shares) at Dec. 31, 2017 | 30,487,309 | ||||||
Cumulative-effect adjustment due to change in accounting principle at Dec. 31, 2017 | (237) | 237 | |||||
Comprehensive income | 16,408 | (1,101) | 15,307 | ||||
Common stock held by ESOP committed to be released | 345 | 615 | 960 | ||||
Share-based compensation - equity incentive plan | 845 | 845 | |||||
Common stock repurchased | $ (22) | (22,815) | (22,837) | ||||
Common stock repurchased (in shares) | (2,198,376) | ||||||
Issuance of common stock in connection with stock option exercises | 114 | 114 | |||||
Issuance of common stock in connection with stock option exercises (shares) | 18,975 | ||||||
Issuance of common stock in connection with equity incentive plan | $ 1 | 925 | (926) | ||||
Issuance of common stock in connection with equity incentive plan (shares) | 85,440 | ||||||
Cash dividends declared and paid | (4,641) | (4,641) | |||||
BALANCE AT ENDING at Dec. 31, 2018 | $ 284 | $ 182,096 | $ (5,171) | $ (872) | $ 74,108 | $ (13,416) | $ 237,029 |
BALANCE AT ENDING (shares) at Dec. 31, 2018 | 28,393,348 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Stockholders' Equity [Abstract] | |||
Common stock held by ESOP committed to be released (shares) | 90,978 | 93,679 | 79,082 |
Cash dividends declared (per share) | $ 0.16 | $ 0.12 | $ 0.12 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
OPERATING ACTIVITIES: | |||
Net income | $ 16,408 | $ 12,320 | $ 4,834 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision for loan losses | 1,900 | 1,360 | 575 |
Depreciation and amortization of premises and equipment | 2,055 | 1,965 | 1,429 |
Accretion of purchase accounting adjustments, net | (1,094) | (2,373) | (194) |
Amortization of core deposit intangible | 375 | 375 | 73 |
Net amortization of premiums and discounts on securities and mortgage loans | 2,417 | 3,181 | 3,447 |
Net amortization of premiums on modified debt | 60 | ||
Share-based compensation expense | 845 | 649 | 262 |
ESOP expense | 960 | 958 | 630 |
Excess tax benefits from equity incentive plan | (12) | ||
Excess tax benefits in connection with stock option exercises | (144) | ||
Change in unrealized loss on equity securities | 142 | ||
Net loss (gain) on sales of securities | 281 | (52) | (1,139) |
Net gain on sales of other real estate owned | (48) | (9) | |
Loss on prepayment of borrowings | 915 | ||
Deferred income tax (benefit) expense | (796) | 7,342 | 274 |
Income from bank-owned life insurance | (1,825) | (1,824) | (1,558) |
Gain on bank-owned life insurance death benefit | (715) | ||
Net change in: | |||
Accrued interest receivable | 294 | (164) | (464) |
Other assets | 1,628 | (3,549) | (1,564) |
Other liabilities | 1,811 | (1,318) | (6,494) |
Net cash provided by operating activities | 24,638 | 18,861 | 930 |
Securities, held-to-maturity: | |||
Proceeds from calls, maturities, and principal collections | 6,836 | ||
Purchases | (16,896) | (67,246) | (87,246) |
Proceeds from sales | 12,470 | 22,453 | 136,829 |
Proceeds from calls, maturities, and principal collections | 25,060 | 53,915 | 59,112 |
Purchase of residential mortgages | (48,205) | (108,448) | |
Loan originations and principal payments, net | (66,263) | (15,658) | 1,196 |
Net cash acquired from acquisition of Chicopee Bancorp | 23,808 | ||
Redemption of Federal Home Loan Bank of Boston stock | 858 | 571 | 3,126 |
Proceeds from sale of other real estate owned | 203 | 410 | |
Purchases of premises and equipment | (3,327) | (2,212) | (1,487) |
Proceeds from sale of premises and equipment | 100 | 20 | |
Proceeds from payout on bank-owned life insurance | 2,050 | ||
Net cash (used in) provided by investing activities | (45,745) | (55,972) | 33,746 |
FINANCING ACTIVITIES: | |||
Net increase (decrease) in deposits | 90,189 | (11,097) | 72,270 |
Net change in short-term borrowings | (85,400) | (27,701) | 38,944 |
Repayment of long-term debt | (69,578) | (21,185) | (89,933) |
Proceeds from long-term debt | 113,000 | 61,420 | 2,264 |
Cash dividends paid | (4,641) | (3,579) | (2,439) |
Common stock repurchased | (22,920) | (9,314) | (1,378) |
Issuance of common stock in connection with stock option exercises | 114 | 5,465 | 1,971 |
Excess tax benefits from equity incentive plan | 12 | ||
Excess tax benefits in connection with stock option exercises | 144 | ||
Net cash provided by (used in) financing activities | 20,764 | (5,991) | 21,855 |
NET CHANGE IN CASH AND CASH EQUIVALENTS: | (343) | (43,102) | 56,531 |
Beginning of year | 27,132 | 70,234 | 13,703 |
End of year | 26,789 | 27,132 | 70,234 |
Supplemental cash flow information: | |||
Securities reclassified from held-to-maturity to available-for-sale | (232,817) | ||
Net change in due to broker for common stock repurchased | $ (83) | (151) | 455 |
Loans transferred to other real estate owned | $ 258 | 298 | |
In connection with the purchase acquisition detailed in Note 1 to the audited consolidated financial statements: | |||
Fair value of non-cash assets acquired | 674,529 | ||
Goodwill and core deposit intangibles | 18,258 | ||
Fair value of liabilities assumed | 617,803 | ||
Value of common shares issued | $ 98,792 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations and Basis of Presentation The Bank’s deposits are insured up to the maximum Federal Deposit Insurance Corporation (“FDIC”) coverage limits. The Bank operates 22 banking offices in western Massachusetts and northern Connecticut, and its primary sources of revenue is interest income from loans as well as interest income from investment securities. Wholly-owned Subsidiaries and Acquisition On October 21, 2016, the Company acquired Chicopee Bancorp, Inc. (“Chicopee”), the holding company for Chicopee Savings Bank. The acquisition added eight full-service banking offices located in western Massachusetts. The primary purpose of the acquisition with Chicopee was to expand our presence in western Massachusetts and diversify our market area. The transaction qualified as a tax-free reorganization for federal income tax purposes. The consideration paid in the transaction to Chicopee’s shareholders consisted of 11,919,412 shares of common stock of the Company, net of shares of Chicopee already owned, and shares of Chicopee’s ESOP were liquidated to pay off the ESOP loan. Based upon the per share closing price on October 21, 2016, of $7.90, the transaction was valued at approximately $98.8 million. As a result of this transaction, we added eight branches, total assets of $716.6 million, total loans of $640.9 million and total deposits of $545.7 million to our franchise. We accounted for the transaction using the acquisition method. Additionally, our results of operations include Chicopee’s operating results from the date of acquisition. Principles of Consolidation Estimates Reclassifications. Significant Group Concentrations of Credit Risk Cash and Cash Equivalents Securities and Mortgage-Backed Securities Financial Instruments —Overall Recognition and Measurement of Financial Assets and Financial Liabilities Realized gains and losses on sales of securities and mortgage-backed securities are computed using the specific identification method and are included in non-interest income on the trade date. The amortization of premiums and accretion of discounts is determined by using the level yield method to the maturity date. Derivatives. Other-than-Temporary Impairment of Securities Fair Value Hierarchy Level 1: Level 2: Level 3: Transfers between levels are recognized at the end of a reporting period, if applicable. Federal Home Loan Bank of Boston Stock Loans Held for Sale Loans Receivable Allowance for Loan Losses 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, commercial real estate, commercial and industrial, and consumer. Residential real estate loans include classes for residential and home equity. 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; internal credit ratings; effects of changes in risk selection; underwriting standards and other changes in lending policies, procedures and practices; and national and local economic trends and industry conditions. In 2018, there were no changes to the Company’s policies or methodology pertaining to the general component of the allowance for loan losses. The qualitative factors are determined based on the various risk characteristics of each loan segment. Risk characteristics relevant to each loan portfolio segment are as follows: Commercial real estate loans Residential real estate loans Commercial and industrial loans Consumer loans 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 nonperforming or 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 all of the 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. 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”). All TDRs are classified as impaired. While we use our best judgment and information available, the ultimate appropriateness of the allowance is dependent upon a variety of factors beyond our control, including the performance of our loan portfolio, the economy, changes in interest rates and the view of the regulatory authorities toward loan classifications. 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 reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating allocated and general reserves in the portfolio. Loans Acquired with Deteriorated Credit Quality. Bank-owned Life Insurance. Transfers and Servicing of Financial Assets Premises and Equipment Years Buildings 39 Leasehold Improvements 5-20 Furniture and Equipment 3-7 The cost of maintenance and repairs is charged to expense when incurred. Major expenditures for betterments are capitalized and depreciated. Other Real Estate Owned Servicing Servicing fee income is recorded for fees earned for servicing loans, which is included in service charges and fee income. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income when earned. Impairment of Long-lived Assets Goodwill is measured as the excess of the cost of a business combination over the sum of the amounts assigned to identifiable intangible assets acquired less liabilities assumed. Goodwill is not amortized but rather assessed for impairment annually or more frequently if circumstances warrant. Management has the option of first assessing qualitative factors, such as events and circumstances, to determine whether it is more likely than not, meaning a likelihood of more than 50%, the value of a reporting unit is less than its carrying amount. If, after considering all relevant events and circumstances, management determines it is not more likely than not the fair value of a reporting unit is less than its carrying amount, then performing an impairment test is unnecessary. For the year ended December 31, 2018, management determined that it was not more likely than not the fair value of the reporting unit (the consolidated Company, in our case) was less than its carrying amount. If management had determined otherwise, a fair value analysis would have been completed to determine the impairment and necessary write-down of goodwill. Retirement Plans and Employee Benefits. Share-based Compensation Plans Employee Stock Ownership Plan Advertising Costs Income Taxes Earnings per Share. Earnings per common share have been computed based on the following: Years Ended December 31, 2018 2017 2016 (In thousands, except per share data) Net income applicable to common stock $ 16,408 $ 12,320 $ 4,834 Average number of common shares issued 29,734 30,755 20,659 Less: Average unallocated ESOP Shares (757 ) (849 ) (935 ) Less: Average unvested equity incentive plan shares (90 ) (47 ) (16 ) Average number of common shares outstanding used to calculate basic earnings per common share 28,887 29,859 19,708 Effect of dilutive equity incentive plan 46 17 3 Effect of dilutive stock options 96 151 93 Average number of common shares outstanding used to calculate diluted earnings per common share 29,029 30,027 19,804 Basic earnings per share $ 0.57 $ 0.41 $ 0.25 Diluted earnings per share $ 0.57 $ 0.41 $ 0.24 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 (loss). The components of accumulated other comprehensive loss, included in shareholders’ equity, are as follows: December 31, 2018 December 31, 2017 (In thousands) Net unrealized losses on securities available-for-sale $ (9,891 ) $ (5,358 ) Tax effect 2,491 1,316 Net-of-tax amount (7,400 ) (4,042 ) Fair value of derivatives used for cash flow hedges (1,259 ) (2,152 ) Termination fee on cancelled cash flow hedges (2,595 ) (3,664 ) Total derivatives (3,854 ) (5,816 ) Tax effect 1,084 1,635 Net-of-tax amount (2,770 ) (4,181 ) Unrecognized actuarial loss on the defined benefit plan (4,516 ) (6,021 ) Tax effect 1,270 1,692 Net-of-tax amount (3,246 ) (4,329 ) Accumulated other comprehensive loss $ (13,416 ) $ (12,552 ) The following table presents changes in accumulated other comprehensive loss for the years ended December 31, 2018 and 2017 by component: Securities Derivatives Defined Benefit Pension Plan Accumulated Other Comprehensive Loss (In thousands) Balance at December 31, 2016 $ (3,839 ) $ (5,204 ) $ (3,618 ) $ (12,661 ) Adoption of ASU 2018-02 (see Note 13) (686 ) (741 ) (699 ) (2,126 ) Current-period other comprehensive (loss) income 483 1,764 (12 ) 2,235 Balance at December 31, 2017 $ (4,042 ) $ (4,181 ) $ (4,329 ) $ (12,552 ) Balance at December 31, 2017 $ (4,042 ) $ (4,181 ) $ (4,329 ) $ (12,552 ) Cumulative-effect adjustment due to change in accounting principle (ASU 2016-01) 237 — — 237 Current-period other comprehensive (loss) income (3,595 ) 1,411 1,083 (1,101 ) Balance at December 31, 2018 $ (7,400 ) $ (2,770 ) $ (3,246 ) $ (13,416 ) With regard to the defined benefit plan, an actuarial loss of $124,000 is expected to be recognized as a component of net periodic pension cost during the year ending December 31, 2019. Recent Accounting Pronouncements. In February 2016, the FASB issued ASU 2016-02, Leases Leases In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses In March 2017, the FASB issued ASU 2017-08— Receivables—Nonrefundable Fees and Other Costs 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 In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES | 2. INVESTMENT SECURITIES The amortized cost and fair values of available-for-sale investment securities at December 31, 2018 and 2017 are summarized as follows: December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Available-for-sale securities: Debt securities: Government-sponsored enterprise obligations $ 25,150 $ — $ (1,203 ) $ 23,947 State and municipal bonds 2,976 33 (65 ) 2,944 Corporate bonds 49,819 — (1,651 ) 48,168 Total debt securities 77,945 33 (2,919 ) 75,059 Mortgage-backed securities: Government-sponsored mortgage-backed securities 165,605 1 (6,255 ) 159,351 U.S. government guaranteed mortgage-backed securities 20,089 1 (752 ) 19,338 Total mortgage-backed securities 185,694 2 (7,007 ) 178,689 Total available-for-sale (1) $ 263,639 $ 35 $ (9,926 ) $ 253,748 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Available-for-sale securities: Debt securities: Government-sponsored enterprise obligations $ 25,151 $ — $ (770 ) $ 24,381 State and municipal bonds 3,222 36 (19 ) 3,239 Corporate bonds 56,084 352 (292 ) 56,144 Total debt securities 84,457 388 (1,081 ) 83,764 Mortgage-backed securities: Government-sponsored mortgage-backed securities 185,769 10 (3,778 ) 182,001 U.S. government guaranteed mortgage-backed securities 16,821 — (567 ) 16,254 Total mortgage-backed securities 202,590 10 (4,345 ) 198,255 Marketable equity securities (1) Mutual fund 6,727 — (330 ) 6,397 Total available-for-sale $ 293,774 $ 398 $ (5,756 ) $ 288,416 (1) Does not include investments in restricted stock consisting of $14.7 million and $15.6 million at December 31, 2018 and December 31, 2017, respectively. At December 31, 2018, government-sponsored enterprise obligations with a fair value of $6.6 million and mortgage-backed securities with a fair value $57.8 million were pledged to secure public deposits and for other purposes as required or permitted by law. The securities collateralizing public deposits 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 such deposits. In 2018, the Company adopted FASB ASU 2016-01, Financial Instruments —Overall Recognition and Measurement of Financial Assets and Financial Liabilities The main significant effect resulting from the adoption of this ASU is that marketable equity securities previously reported within securities available-for-sale are now shown as a single line item (“marketable equity securities”) in the Company’s balance sheet and the recognition in net income of the changes in fair value of marketable equity securities. The cumulative-effect adjustment resulting from the adoption of this ASU was a decrease to retained earnings and accumulated other comprehensive loss as of January 1, 2018 of $237,000. The amortized cost and fair value of available-for-sale debt securities at December 31, 2018, by final maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers have the right to call or prepay obligations. Also, because mortgage-backed securities require periodic principal pay downs, they are not included in the maturity categories in the following summary. December 31, 2018 Amortized Cost Fair Value (In thousands) Available-for-sale securities: Debt securities: Due in one year or less $ 240 $ 241 Due after one year through five years 40,864 39,846 Due after five years through ten years 30,094 28,561 Due after ten years 6,747 6,411 Total debt securities 77,945 75,059 Mortgage-backed securities 185,694 178,689 Total available-for-sale securities $ 263,639 $ 253,748 Gross realized gains and losses on sales of securities for the years ended December 31, 2018, 2017 and 2016 are as follows: Years Ended December 31, 2018 2017 2016 (In thousands) Gross gains realized $ — $ 117 $ 1,976 Gross losses realized (281 ) (65 ) (837 ) Net gain realized $ (281 ) $ 52 $ 1,139 Proceeds from the sale and redemption of securities available-for-sale totaled $12.5 million, $22.5 million and $136.8 million for the years ended December 31, 2018, 2017 and 2016, respectively. The Company did not hold any held-to-maturity securities at December 31, 2018 and December 31, 2017. The following tables summarize investments having temporary impairment due to the fair market values having declined below the amortized costs of the individual investments, and the period that the investments have been temporarily impaired at December 31, 2018 and 2017: December 31, 2018 Less Than 12 Months Over 12 Months Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value (In thousands) Available-for-sale: Government-sponsored mortgage-backed securities $ 74 $ 7,354 $ 6,181 $ 148,762 U.S. government guaranteed mortgage-backed securities 15 2,829 737 14,669 Corporate bonds 110 9,995 1,541 38,173 State and municipal bonds — — 65 1,532 Government-sponsored enterprise obligations — — 1,203 23,947 Total available-for-sale $ 199 $ 20,178 $ 9,727 $ 227,083 December 31, 2017 Less Than 12 Months Over 12 Months Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value (In thousands) Available-for-sale: Government-sponsored mortgage-backed securities $ 613 $ 68,538 $ 3,165 $ 111,595 U.S. government guaranteed mortgage-backed securities 23 1,205 544 15,049 Corporate bonds 292 26,016 — — State and municipal bonds — — 19 1,581 Government-sponsored enterprise obligations — — 770 24,381 Mutual funds — — 330 6,397 Total available-for-sale $ 928 $ 95,759 $ 4,828 $ 159,003 During the years ended December 31, 2018 and 2017, the Company did not record any fair value impairment charges on its investments. Management regularly reviews the portfolio for securities with unrealized losses. At December 31, 2018, management did not consider it debt securities to have other-than-temporary impairment (“OTTI”) and attributes the unrealized losses to increases in current market yields compared to the yields at the time the investments were purchased by the Company and not due to credit quality. The process for assessing investments for OTTI may vary depending on the type of security. In assessing the Company’s investments in federal agency mortgage-backed securities and federal agency obligations, the contractual cash flows of these investments are guaranteed by the respective government-sponsored enterprise; Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National Mortgage Association (“FNMA”), Federal Farm Credit Bank (“FFCB”), or Federal Home Loan Bank (“FHLB”). Accordingly, it is expected that the securities would not be settled at a price less than the par value of the Company’s investments. Management’s assessment of other debt securities within the portfolio includes reviews of market pricing, ongoing credit quality evaluations, assessment of the investments’ materiality, and duration of the investments’ unrealized loss position. A December 31, 2018, the Company’s corporate and municipal bond portfolios did not contain any securities below investment grade, as reported by major credit rating agencies. |
LOANS
LOANS | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
LOANS | 3. LOANS Major classifications of loans at the periods indicated were as follows: December 31, 2018 2017 (In thousands) Commercial real estate $ 768,881 $ 732,616 Residential real estate: Residential 1-4 family 577,641 557,752 Home equity 97,238 92,599 Commercial and industrial 243,493 238,502 Consumer 5,203 4,478 Total gross loans 1,692,456 1,625,947 Premiums and deferred loan fees and costs, net 4,401 4,734 Allowance for loan losses (12,053 ) (10,831 ) Net loans $ 1,684,804 $ 1,619,850 There were no residential real estate loan purchases in 2018. During 2017, the Company purchased residential real estate loans aggregating $48.2 million. These purchased loans are subject to underwriting standards that are consistent with our originated loans and we consider the risk attributes to be similar to originated loans. Loans Serviced for Others. The Company has transferred a portion of its originated commercial loans to participating lenders. The amounts transferred have been accounted for as sales and are therefore not included in our accompanying consolidated balance sheets. We continue to service the loans on behalf of the participating lenders. We share, on a pro-rated basis, with participating lenders any gains or losses that may result from a borrower’s lack of compliance with contractual terms of the loan. At December 31, 2018 and December 31, 2017, the Company was servicing commercial loans participated out to various other institutions totaling $35.4 million and $32.6 million, respectively. 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 FHLMC. 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 December 31, 2018, include weighted average prepayment speed for the portfolio using the Public Securities Association Standard Prepayment Model (128 PSA), weighted average internal rate of return (12.04%), weighted average servicing fee (0.25%), and net cost to service loans ($84.48 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. At December 31, 2018 and 2017, the Company was servicing residential mortgage loans owned by investors totaling $56.6 million and $65.8 million, respectively. Net service fee income of $89,000, $63,000 and $12,500 was recorded for the years ended December 31, 2018, 2017 and 2016, respectively, and is included in service charges and fees on the consolidated statements of net income. A summary of the activity in the balances of mortgage servicing rights follows: Years Ended December 31, 2018 2017 (In thousands) Balance at the beginning of year: $ 352 $ 465 Capitalized mortgage servicing rights — — Amortization (66 ) (113 ) Balance at the end of year $ 286 $ 352 Fair value at the end of year $ 455 $ 528 Allowance for Loan Losses. An analysis of changes in the allowance for loan losses by segment for the years ended December 31, 2018, 2017 and 2016 is as follows: Commercial Real Estate Residential Real Estate Commercial and Industrial Consumer Unallocated Total (In thousands) Balance at December 31, 2015 $ 3,856 $ 2,431 $ 2,485 $ 22 $ 46 $ 8,840 Provision (credit) (668 ) 579 575 135 (46 ) 575 Charge-offs (170 ) (157 ) — (159 ) — (486 ) Recoveries 1,065 9 25 40 — 1,139 Balance at December 31, 2016 $ 4,083 $ 2,862 $ 3,085 $ 38 $ — $ 10,068 Provision (credit) 779 433 (144 ) 288 4 1,360 Charge-offs (292 ) (148 ) (289 ) (319 ) — (1,048 ) Recoveries 142 164 81 64 — 451 Balance at December 31, 2017 $ 4,712 $ 3,311 $ 2,733 $ 71 $ 4 $ 10,831 Provision (credit) 214 863 660 179 (16 ) 1,900 Charge-offs (35 ) (645 ) (299 ) (171 ) — (1,150 ) Recoveries 369 27 20 56 — 472 Balance at December 31, 2018 $ 5,260 $ 3,556 $ 3,114 $ 135 $ (12 ) $ 12,053 The following table presents information pertaining to the allowance for loan losses by segment for the dates indicated: Commercial Real Estate Residential Real Estate Commercial and Industrial Consumer Unallocated Total (In thousands) December 31, 2018 Amount of allowance for impaired loans $ — $ — $ — $ — $ — $ — Amount of allowance for non-impaired loans 5,260 3,556 3,114 135 (12 ) 12,053 Total allowance for loan losses $ 5,260 $ 3,556 $ 3,114 $ 135 $ (12 ) $ 12,053 Impaired loans $ 5,237 $ 4,754 $ 2,345 $ 60 $ — $ 12,396 Non-impaired loans 752,770 666,883 240,235 5,143 — 1,665,031 Impaired loans acquired with deteriorated credit quality 10,874 3,242 913 — — 15,029 Total loans $ 768,881 $ 674,879 $ 243,493 $ 5,203 $ — $ 1,692,456 Commercial Real Estate Residential Real Estate Commercial and Industrial Consumer Unallocated Total (In thousands) December 31, 2017 Amount of allowance for impaired loans $ — $ — $ — $ — $ — $ — Amount of allowance for non-impaired loans 4,712 3,311 2,733 71 4 10,831 Total allowance for loan losses $ 4,712 $ 3,311 $ 2,733 $ 71 $ 4 $ 10,831 Impaired loans $ 3,674 $ 3,964 $ 2,766 $ 120 $ — $ 10,524 Non-impaired loans 716,571 642,787 234,582 4,358 — 1,598,298 Impaired loans acquired with deteriorated credit quality 12,371 3,600 1,154 — — 17,125 Total loans $ 732,616 $ 650,351 $ 238,502 $ 4,478 $ — $ 1,625,947 Past Due and Non-accrual loans. The following tables present an age analysis of past due loans as of the dates indicated: Balance at December 31, 2018 30 – 59 Days Past Due 60 – 89 Days Past Due Greater than 90 Days Past Due Total Past Due Loans Total Current Loans Total Loans Non- Accrual Loans (In thousands) Commercial real estate $ 1,857 $ — $ 2,865 $ 4,722 $ 764,159 $ 768,881 $ 4,701 Residential real estate: Residential 1,798 572 1,879 4,249 573,392 577,641 5,856 Home equity 600 5 242 847 96,391 97,238 391 Commercial and industrial 794 1,463 305 2,562 240,931 243,493 2,476 Consumer 93 1 21 115 5,088 5,203 60 Total loans $ 5,142 $ 2,041 $ 5,312 $ 12,495 $ 1,679,961 $ 1,692,456 $ 13,484 Balance at December 31, 2017 30 – 59 Days Past Due 60 – 89 Days Past Due Greater than 90 Days Past Due Total Past Due Loans Total Current Loans Total Loans Non- Accrual Loans (In thousands) Commercial real estate $ 1,951 $ 144 $ 290 $ 2,385 $ 730,231 $ 732,616 $ 2,959 Residential real estate: Residential 2,992 1,480 1,911 6,383 551,369 557,752 5,961 Home equity 635 — 48 683 91,916 92,599 696 Commercial and industrial 1,731 797 162 2,690 235,812 238,502 3,019 Consumer 65 — 41 106 4,372 4,478 120 Total loans $ 7,374 $ 2,421 $ 2,452 $ 12,247 $ 1,613,700 $ 1,625,947 $ 12,755 At December 31, 2018 and December 31, 2017, all loans past due 90 days or more were carried as non-accrual. The ratio of non-accrual loans to total loans was 0.80% and 0.78% at December 31, 2018 and December 31, 2017, respectively. Impaired Loans. The following is a summary of impaired loans by class: Year Ended At December 31, 2018 December 31, 2018 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized Impaired Loans (1) (In thousands) Commercial real estate $ 16,111 $ 19,081 $ — $ 14,830 $ 772 Residential real estate 7,558 8,614 — 7,033 51 Home equity 438 468 636 4 Commercial and industrial 3,258 7,788 — 4,119 147 Consumer 60 70 85 — Total impaired loans $ 27,425 $ 36,021 $ — $ 26,703 $ 974 Year Ended At December 31, 2017 December 31, 2017 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized Impaired Loans: (1) (In thousands) Commercial real estate $ 16,045 $ 18,773 $ — $ 18,215 $ 842 Residential real estate 6,816 7,298 — 6,630 45 Home equity 748 783 359 4 Commercial and industrial 3,920 9,215 — 4,388 237 Consumer 120 129 93 — Total impaired loans $ 27,649 $ 36,198 $ — $ 29,685 $ 1,128 (1) Includes loans acquired with deteriorated credit quality and performing troubled debt restructurings. The majority of impaired loans are included within the non-accrual balances; however, not every loan on non-accrual status has been designated as impaired. Impaired loans include loans that have been modified in a TDR. Impaired loans are individually evaluated and exclude large groups of smaller-balance homogeneous loans, such as residential mortgage loans and consumer loans, which are collectively evaluated for impairment, and loans that are measured at fair value, unless the loan is amended in a TDR. All payments received on impaired loans in non-accrual status are applied to principal. There was no interest income recognized on nonaccrual impaired loans during the years ended December 31, 2018 and December 31, 2017. The Company’s obligation to fulfill the additional funding commitments on impaired loans is generally contingent on the borrower’s compliance with the terms of the credit agreement. If the borrower is not in compliance, additional funding commitments may or may not be made at the Company’s discretion. As of December 31, 2018, we have not committed to lend any additional funds for loans that are classified as impaired. Payments received on impaired loans in accrual status are recorded in accordance with the contractual terms of the loan. Troubled debt restructurings. Loans are designated as a TDR when, as part of an agreement to modify the original contractual terms of the loan as a result of financial difficulties of the borrower, the Bank grants the borrower a concession on the terms, that would not otherwise be considered. Typically, such concessions may consist of a reduction in interest rate to a below market rate, taking into account the credit quality of the note, extension of additional credit based on receipt of adequate collateral, or a deferment or reduction of payments (principal or interest) which materially alters the Bank’s position or significantly extends the note’s maturity date, such that the present value of cash flows to be received is materially less than those contractually established at the loan’s origination. All loans that are modified are reviewed by the Company to identify if a TDR has occurred. All TDR loans 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 a specific allowance or a charge-off to the allowance. Non-performing TDRs are included in non-performing loans. There were no TDR loans modified during the year ended December 31, 2018. During the year ended December 31, 2017, one commercial and industrial loan in the amount of $112,000 was modified to extend the maturity and re-amortize the payments. During the years ended December 31, 2018 and 2017, no TDRs defaulted (defined as 30 days or more past due) within 12 months of restructuring. There were no charge-offs on TDRs during the year ended December 31, 2018. There were $256,000 in charge-offs on TDRs during the year ended December 31, 2017. Loans Acquired with Deteriorated Credit Quality The following is a summary of loans acquired with evidence of credit deterioration from Chicopee as of December 31, 2018. Contractual Required Payments Receivable Cash Expected To Be Collected Non- Accretable Discount Accretable Yield Loans Receivable (In thousands) Balance at December 31, 2017 $ 29,362 $ 23,158 $ 6,204 $ 6,033 $ 17,125 Collections (4,000 ) (2,780 ) (1,220 ) (742 ) (2,038 ) Dispositions (569 ) (495 ) (74 ) (437 ) (58 ) Balance at December 31, 2018 $ 24,793 $ 19,883 $ 4,910 $ 4,854 $ 15,029 Credit Quality Information The Company utilizes 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. Non-performing residential real estate, home equity and consumer loans are monitored individually for impairment and risk rated as “substandard.” Loans rated 1 – 4 Loans rated 5 Loans rated 6 Loans rated 7 Loans rated 8 On an annual basis, or more often if needed, we formally review the ratings on all commercial real estate and commercial and industrial loans. In addition, management utilizes delinquency reports, the criticized report and other loan reports to monitor credit quality. In addition, at least on an annual basis, the Company contracts with an external loan review company to review the internal credit ratings assigned to loans in the commercial loan portfolio on a pre-determined schedule, based on the type, size, rating, and overall risk of the loan. During the course of their review, the third party examines a sample of loans, including new loans, existing relationships over certain dollar amounts and classified assets. The following table presents our loans by risk rating for the periods indicated: Commercial Real Estate Residential 1-4 family Home Equity Commercial and Industrial Consumer Total (In thousands) December 31, 2018 Pass (Rated 1 – 4) $ 732,729 $ 570,428 $ 96,643 $ 207,663 $ 5,143 $ 1,612,606 Special Mention (Rated 5) 17,929 — — 12,248 — 30,177 Substandard (Rated 6) 18,223 7,213 595 23,582 60 49,673 Total $ 768,881 $ 577,641 $ 97,238 $ 243,493 $ 5,203 $ 1,692,456 Commercial Real Estate Residential 1-4 family Home Equity Commercial and Industrial Consumer Total December 31, 2017 (In thousands) Pass (Rated 1 – 4) $ 708,992 $ 551,469 $ 91,903 $ 205,537 $ 4,475 $ 1,562,376 Special Mention (Rated 5) 15,098 — — 24,565 — 39,663 Substandard (Rated 6) 8,526 6,283 696 8,400 3 23,908 Total $ 732,616 $ 557,752 $ 92,599 $ 238,502 $ 4,478 $ 1,625,947 |
PREMISES AND EQUIPMENT
PREMISES AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PREMISES AND EQUIPMENT | 4. PREMISES AND EQUIPMENT Premises and equipment are summarized as follows: December 31, 2018 2017 (In thousands) Land $ 5,651 $ 5,651 Buildings 24,144 22,693 Leasehold improvements 2,372 2,220 Furniture and equipment 16,824 15,200 Total 48,991 45,764 Less: accumulated depreciation and amortization (24,367 ) (22,264 ) Premises and equipment, net $ 24,624 $ 23,500 Depreciation and amortization expense for the years ended December 31, 2018, 2017 and 2016 amounted to $2.1 million, $2.0 million and $1.4 million, respectively. |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLES | 5. GOODWILL AND OTHER INTANGIBLES At December 31, 2018 and December 31, 2017, the Company’s goodwill was related to the acquisition of Chicopee in October 2016. There was no goodwill impairment recorded during the years ended December 31, 2018 and 2017. Annually, or more frequently if events or changes in circumstances warrant such evaluation, the Company evaluates its goodwill for impairment. Core Deposit Intangibles In connection with the acquisition of Chicopee, the Bank recorded a core deposit intangible of $4.5 million which is amortized over twelve years using the straight-line method. Amortization expense was $375,000, $375,000 and $73,000 for the years ended December 31, 2018, 2017 and 2016. At December 31, 2018, future amortization of the core deposit intangible totaled $375,000 for each of the next five years and $1.8 million thereafter. |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2018 | |
Banking and Thrift [Abstract] | |
DEPOSITS | 6. DEPOSITS Deposit accounts, by type, are summarized as follows for the periods indicated: At December 31, 2018 2017 (In thousands) Demand and interest-bearing checking: Interest-bearing checking accounts $ 63,620 $ 87,394 Demand deposits 355,389 311,851 Savings: Regular accounts 118,542 140,081 Money market accounts 398,396 410,223 Time deposits 660,046 556,533 Total deposits $ 1,595,993 $ 1,506,082 Brokered deposits, which are included within time deposits, totaled $23.8 million and $6.9 million at December 31, 2018 and 2017, respectively, Time deposits of $250,000 or more totaled $180.3 million at December 31, 2018. Interest expense on time deposits of $250,000 or more totaled $2.5 million and $1.4 million for the years ended December 31, 2018 and 2017, respectively. The scheduled maturities of time deposits for the periods indicated are as follows: Years Ended December 31, 2018 2017 (In thousands) 2018 $ — $ 300,531 2019 443,187 179,780 2020 152,346 34,000 2021 38,328 25,381 2022 18,787 16,841 2023 7,398 — Total time deposits $ 660,046 $ 556,533 Interest expense on deposits for the years ended December 31, 2018, 2017 and 2016 is summarized as follows: Years Ended December 31, 2018 2017 2016 (In thousands) Regular accounts $ 162 $ 179 $ 106 Money market accounts 1,911 1,565 1,189 Time deposits 9,270 6,374 5,139 Interest-bearing checking accounts 340 330 147 Total $ 11,683 $ 8,448 $ 6,581 |
SHORT-TERM BORROWINGS
SHORT-TERM BORROWINGS | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
SHORT-TERM BORROWINGS | 7. SHORT-TERM BORROWINGS As a member of the FHLB, the Bank has the potential capacity to borrow an amount up to the value of its discounted qualified collateral. Borrowings from the FHLB are secured by certain securities from the Company’s investment portfolio not otherwise pledged and certain residential and commercial real estate loans. FHLB advances with an original maturity of less than one year totaled $59.3 million and $133.0 million at December 31, 2018 and 2017, respectively, with a weighted average rate of 3.28% and 1.58%, respectively. At December 31, 2018, based on qualifying collateral less outstanding advances, the Bank had the capacity to borrow up to approximately $218.3 million from the FHLB. In addition, at December 31, 2018 and December 31, 2017, the Company had an available Ideal Way line of credit with the FHLB for up to $9.5 million. Interest on this line of credit is payable at a rate determined and reset by the FHLB on a daily basis. The outstanding principal is due daily and the portion not repaid will be automatically renewed. At December 31, 2018 and December 31, 2017, there were no advances outstanding under this line. The Bank also had a line of credit in the amount up to $15.0 million with a correspondent bank at an interest rate determined and reset on a daily basis. There were no advances outstanding under this line at December 31, 2018 and 2017. We also had a $50.0 million line of credit with another correspondent bank at an interest rate determined and reset on a daily basis. There were no advances outstanding under the line at December 31, 2018 and 2017. Customer Repurchase Agreements. At or for the year ended December 31, 2017 (In thousands) Balance outstanding at end of year $ 11,650 Maximum amount outstanding during year 30,880 Average amount outstanding during year 18,418 Weighted average interest rate at end of year 0.10 % Amortized cost of collateral pledged at end of year 63,193 Fair value of collateral pledged at end of year 65,157 At December 31, 2017, repurchase agreements were collateralized by government-sponsored enterprise obligations with a fair value of $6.7 million and certain mortgage-backed securities with a fair value of $58.4 million. The weighted average interest rate on the pledged collateral was 2.62% at December 31, 2017. |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | 8. LONG-TERM DEBT FHLB Advances. Amount Weighted Average Rate 2018 2017 2018 2017 (In thousands) Fixed-rate advances maturing: 2018 $ — $ 54,652 — % 2.0 % 2019 81,891 49,105 2.3 2.0 2020 84,269 40,535 2.2 1.9 2021 31,766 4,434 2.6 1.0 2022 9,461 5,325 2.2 1.4 2024 631 735 2.6 2.6 208,018 154,786 2.3 1.9 Variable-rate advances maturing: 2018 — 10,000 — 1.4 Total long-term advances $ 208,018 $ 164,786 2.3 % 1.9 % Cash paid for interest on long-term debt totaled $4.2 million, $2.3 million, and $2.3 million for the years ended December 31, 2018, 2017, and 2016, respectively. |
STOCK PLANS AND EMPLOYEE STOCK
STOCK PLANS AND EMPLOYEE STOCK OWNERSHIP PLAN | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK PLANS AND EMPLOYEE STOCK OWNERSHIP PLAN | 9. STOCK PLANS AND EMPLOYEE STOCK OWNERSHIP PLAN Stock Options. A summary of the status of our stock options at December 31, 2018 is presented below: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2017 257,050 $ 6.31 4.41 $ 1,175 Exercised (18,975 ) 6.03 3.80 89 Outstanding at December 31, 2018 238,075 $ 6.33 3.44 $ 877 Exercisable at December 31, 2018 238,075 $ 6.33 3.44 $ 877 Cash received for options exercised during the years ended December 31, 2018 and 2017 was $114,000 and $5.5 million, respectively. Restricted Stock Awards. In January 2015, there were 48,560 shares granted under the RSA Plan. These shares vest ratably over five years. The fair market value of shares awarded are based on the market price at the grant date and recorded as unearned compensation. The shares are amortized over the applicable vesting period. In 2016, the Compensation Committee (the “Committee”) approved the long-term incentive program (“2016 LTI Plan”). The 2016 LTI Plan provides a periodic award that is both performance and time-based and is designed to recognize the executive’s responsibilities, reward performance and leadership and as a retention tool. The objective of the 2016 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 2016 LTI Plan includes eligible participants of the Company that are nominated by the Chief Executive Officer and approved by the Compensation Committee. The 2016 LTI Plan is triggered by the Company’s achievement of satisfactory safety and soundness results from its most recent regulatory examination and additional Company performance metrics. Stock grants made under the 2016 LTI Plan will consist of 50% time-based stock and 50% performance-based stock. In May 2016, there were 62,740 shares granted under the 2016 LTI Plan. Of the 62,740 shares granted, 36,543 shares were time-based stock, with 10,352 vesting in one year and 26,191 vesting ratably over a three year period. The remaining 26,197 shares granted were performance-based and are subject to the achievement of the 2016 LTI performance metrics. Under the 2016 LTI Plan, the primary performance metric was return on equity. Performance-based shares will be earned based on the Company achieving the threshold and target metrics over the three-year performance period. As a result of the Tax Cuts and Jobs Act of 2017, the return on equity performance metrics were adjusted to incorporate the impact and benefits of the corporate tax rate reductions thereunder. The original and adjusted threshold and target metrics under the 2016 Plan are as follows: Return on Equity Metrics Threshold Target Original metrics 5.85 % 6.32 % Adjusted metrics 6.38 % 6.79 % In May 2017, there were 89,042 shares granted under the 2017 LTI Plan. Of the 89,042 shares, 55,159 shares are time-based, with 21,276 vesting in one year and 33,883 vesting ratably over a three year period. The remaining 33,883 shares granted were performance-based and are subject to the achievement of the 2017 LTI performance metric. Vesting is realized after a three year period. Under the 2017 LTI Plan, the primary performance metric was return on equity. Performance-based 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. As a result of the Tax Cuts and Jobs Act of 2017, the return on equity performance metrics for 2018 and 2019 were adjusted to incorporate the impact and benefits of the corporate tax rate reductions thereunder. The original and adjusted threshold, target and maximum metrics under the 2017 Plan are as follows: Return on Equity Metrics Performance Period Ending Original Threshold Adjusted Threshold Original Target Adjusted Target Original Maximum Adjusted Maximum December 31, 2018 6.30 % 6.87 % 7.00 % 7.63 % 7.60 % 8.28 % December 31, 2019 6.50 % 7.09 % 7.20 % 7.85 % 7.90 % 8.61 % Eligible participants will be able to earn between 50% (“threshold” performance), 100% (“target” performance) and 150% (“maximum” performance). In January 2018, there were 83,812 shares granted under the 2018 LTI Plan. Of the 83,812 shares, 50,852 shares were time-based, with 17,908 vesting in one year and 32,944 vesting ratably over a three-year period. The remaining 32,960 shares granted are performance-based and are subject to the achievement of the 2018 long-term incentive performance metric. Under the 2018 LTI Plan, the primary performance metric was 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 stretch metrics under the 2018 LTI Plan are as follows: Return on Equity Metrics Performance Period Ending Threshold Target Stretch December 31, 2018 6.30 % 6.80 % 7.20 % December 31, 2019 6.85 % 7.35 % 7.75 % December 31, 2020 7.40 % 7.90 % 8.30 % Participants will be able to earn between 50% (“threshold” performance), 100% (“target” performance) and 150% (“maximum” performance). The fair market value of shares awarded is based on the market price at the grant date, recorded as unearned compensation and amortized over the applicable vesting period. Performance-based metrics are monitored on a quarterly basis in order to compare actual results to the performance metric, with any necessary adjustments being recognized through share-based compensation expense and unearned compensation. At December 31, 2018, there were an additional 236,053 shares available for future grants under the RSA Plan. A summary of the status of restricted stock awards at December 31, 2018 is presented below: Shares Weighted Average Grant Date Fair Value Balance at December 31, 2017 138,833 $ 8.98 Shares granted 83,812 11.05 Shares vested (62,726 ) 9.44 Shares forfeited (4,207 ) 10.63 Balance at December 31, 2018 155,712 $ 9.87 The aggregate fair value of restricted stock vested during 2018 was $659,000. We recorded total expense for restricted stock awards of $845,000, $649,000 and $262,000 for the years ended December 31, 2018, 2017, and 2016, respectively. Tax benefits related to equity incentive plan expense were $24,000, $42,000 and $89,000 for the years ended December 31, 2018, 2017 and 2016, respectively. Unrecognized compensation cost for stock awards was $732,000 at December 31, 2018 with a remaining term of 1.7 years. Employee Stock Ownership Plan (“ESOP”). In January 2007, as part of the second-step stock conversion, we provided an additional loan to the ESOP Trust which was used to purchase 4.0%, or 736,000 shares, of the 18,400,000 shares of common stock sold in the offering. The 2002 and 2007 loans bear an interest rate of 8.0% and provide for annual payments of interest and principal. At December 31, 2018, the remaining principal balances are payable as follows: Years Ending December 31, Amount (In thousands) 2019 $ 447 2020 447 2021 447 2022 447 2023 447 Thereafter 4,184 Total $ 6,419 We have committed to make contributions to the ESOP sufficient to support the debt service of the loans. The loans are secured by the shares purchased, which are held in a suspense account for allocation among the participants as the loans are paid. Total compensation expense applicable to the ESOP amounted to $960,000, $958,000 and $630,000 for the years ended December 31, 2018, 2017 and 2016, respectively. Shares held by the ESOP include the following at December 31, 2018 and 2017: 2018 2017 Allocated 936,522 899,969 Committed to be allocated 90,978 93,679 Unallocated 700,124 791,102 Total 1,727,624 1,784,750 Cash dividends declared and received on allocated shares are allocated to participants and charged to retained earnings. Cash dividends declared and received on unallocated shares are held in suspense and are applied to repay the outstanding debt of the ESOP. The fair value of unallocated shares was $10.3 million and $8.6 million at December 31, 2018 and 2017, respectively. ESOP shares are considered outstanding for earnings per share calculations when they are committed to be allocated. Unallocated ESOP shares are excluded from earnings per share calculations. The cost of unearned shares to be allocated to ESOP participants for future services not yet performed is reflected as a reduction of shareholders’ equity. |
RETIREMENT PLANS AND EMPLOYEE B
RETIREMENT PLANS AND EMPLOYEE BENEFITS | 12 Months Ended |
Dec. 31, 2018 | |
Defined Benefit Plan [Abstract] | |
RETIREMENT PLANS AND EMPLOYEE BENEFITS | 10. RETIREMENT PLANS AND EMPLOYEE BENEFITS Pension Plan The following table provides information for the Plan at or for the years ended December 31: Years Ended December 31, 2018 2017 2016 (In thousands) Change in benefit obligation: Benefit obligation at beginning of year $ 29,345 $ 25,819 $ 22,458 Service cost 1,269 1,139 1,130 Interest 1,012 1,002 959 Actuarial (gain) loss (3,887 ) 1,987 1,846 Benefits paid (430 ) (602 ) (574 ) Benefit obligation at end of year 27,309 29,345 25,819 Change in plan assets: Fair value of plan assets at beginning of year 19,215 16,498 15,233 Actual (loss) return on plan assets (1,192 ) 2,519 1,039 Employer contribution 800 800 800 Benefits paid (430 ) (602 ) (574 ) Fair value of plan assets at end of year 18,393 19,215 16,498 Funded status and accrued benefit at end of year $ (8,916 ) $ (10,130 ) $ (9,321 ) Accumulated benefit obligation at end of year $ 21,449 $ 21,930 $ 19,027 The following actuarial assumptions were used in determining the pension benefit obligation: December 31, 2018 2017 Discount rate 4.25 % 3.60 % Rate of compensation increase 4.00 4.00 Net pension cost includes the following components for the years ended December 31: 2018 2017 2016 (In thousands) Service cost $ 1,269 $ 1,139 $ 1,130 Interest cost 1,012 1,002 959 Expected return on assets (1,387 ) (1,194 ) (1,097 ) Amortization of actuarial loss 170 124 102 Net periodic pension cost $ 1,064 $ 1,071 $ 1,094 The following actuarial assumptions were used in determining the net periodic pension cost for the years ended December 31: 2018 2017 2016 Discount rate 3.60 % 4.15 % 4.35 % Expected return on plan assets 7.50 7.50 7.50 Rate of compensation increase 4.00 4.00 4.00 The following is a summary of the Plan’s investments for the years ended December 31: 2018 2017 (In thousands) Pooled separate investment accounts: Fixed income $ 10,559 $ 10,355 Large U.S. equity 4,365 5,080 International equity 2,368 2,518 Small/mid U.S. equity 734 877 Balanced/asset allocation 367 385 Total $ 18,393 $ 19,215 Pooled separate accounts are valued at the NAV of units held by the Plan at year end. The NAV is used as a practical expedient to estimate fair value. This practical expedient would not be used if it was determined to be probable that the funds will sell the underlying investments for an amount different from the reported NAV. Participant transactions (purchases and sales) may occur daily. The preceding method described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The following table summarizes the investments for which fair value is measured using NAV per share as a practical expedient for the years ended December 31, 2018 and 2017. There are no pertinent redemption restrictions for these investments; the redemption notice period is applicable only to the Plan. Fair Value Unfunded Commitments Redemption Frequency (if Currently Eligible) Redemption Notice Period (In thousands) December 31, 2018 $ 18,393 n/a Daily 1 day December 31, 2017 $ 19,215 n/a Daily 1 day The defined benefit plan offers a mixture of fixed income, equity and real assets as the underlying investment structure for its retirement structure for the pension plan. The target allocation mix for the pension plan for 2018 was an equity-based investment deployment of 50% of total portfolio assets based on advice received from an external advisory firm with confirmation by the Bank’s Investment Committee. The remainder of the portfolio is allocated to fixed income at 50% of total assets. The investment objective is to diversify investments across a spectrum of investment types to limit risks from large market swings and to provide anticipated stabilized investment returns. Trustees of the Plan select investment managers for the portfolio and a second investment advisory firm is retained to provide allocation analysis. The overall investment objective is to diversify equity investments across a spectrum of types, small cap, large cap and international, along with investment styles such as growth and value. We estimate that the benefits to be paid from the pension plan for years ended December 31 are as follows: Year Benefit Payments to Participants (In thousands) 2019 $ 857 2020 1,083 2021 1,195 2022 1,549 2023 1,477 In aggregate for 2024 – 2028 14,502 We have not yet determined the amount of the contribution we expect to make to the plan during the fiscal year ending December 31, 2019. 401(k) Defined Contribution Plan. The Company has a 401(k) defined contribution employee benefit plan. The 401(k) plan allows eligible employees to contribute a percentage of their earnings to the plan. A portion of the employee contribution, as determined by the Compensation Committee of the Board of Directors, is matched by the Company. In 2018, 2017 and 2016, the Company’s percentage match was 50% up to the first 6% contributed by the employee. The Company’s expense for the 401(k) plan match was $398,000, $370,000 and $242,000 for the years ended December 31, 2018, 2017 and 2016, respectively. |
DERIVATIVES AND HEDGING ACTIVIT
DERIVATIVES AND HEDGING ACTIVITIES | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING ACTIVITIES | 11. DERIVATIVES AND HEDGING ACTIVITIES Risk Management Objective of Using Derivatives The Company is 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 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 December 31, 2018. December 31, 2018 Asset Derivatives Liability Derivatives Balance Sheet Location Fair Value Balance Sheet Location Fair Value (In thousands) Interest rate swaps Other Assets $ — Other Liabilities $ 1,259 Total derivatives designated as hedging instruments $ — $ 1,259 December 31, 2017 Asset Derivatives Liability Derivatives Balance Sheet Location Fair Value Balance Sheet Location Fair Value (In thousands) Interest rate swaps Other Assets $ — Other Liabilities $ 2,152 Total derivatives designated as hedging instruments $ — $ 2,152 At December 31, 2018 and 2017, all derivatives were designated as hedging instruments. Cash Flow Hedges of Interest Rate Risk The Company’s 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, the Company enters 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 December 31, 2018 and 2017: December 31, 2018 Notional Weighted Average Weighted Average Rate Estimated Fair Amount Maturity Receive Pay Value (In thousands) (In years) (In thousands) Interest rate swaps on FHLB borrowings $ 35,000 3.7 2.79 % 3.54 % $ (1,259 ) Total cash flow hedges $ 35,000 3.7 $ (1,259 ) December 31, 2017 Notional Weighted Average Weighted Average Rate Estimated Fair Amount Maturity Received Paid Value (In thousands) (In years) (In thousands) Interest rate swaps on FHLB borrowings $ 55,000 3.3 1.64 % 2.93 % $ (2,152 ) Total cash flow hedges $ 55,000 3.3 $ (2,152 ) During 2016, the Company 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, the Company terminated forward-starting interest rate swaps with a notional amount of $47.5 million and incurred a termination fee of $2.4 million. The termination fees are being amortized as a reclassification from accumulated 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. 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 in 2018, 2017 or 2016. We are hedging our exposure to the variability in future cash flows for forecasted borrowings 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 loss of our cash flow hedges for the periods indicated. Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) Years Ended December 31, 2018 2017 2016 (In thousands) Interest rate swaps $ 442 $ 31 $ (1,126 ) Amounts reported in accumulated other comprehensive loss related to these derivatives are reclassified to interest expense as interest payments are made on our designated rate sensitive liabilities. During the years ended December 31, 2018, 2017 and 2016, we reclassified $1.5 million, $2.0 million and $1.6 million into interest expense, respectively. During the next 12 months, we estimate that $1.4 million will be reclassified as an increase in interest expense. During the years ended December 31, 2018, 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 the Company 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. At December 31, 2018 and 2017, we had a net liability position of $1.3 million and $2.2 million with our counterparties, respectively. As of December 31, 2018, we had minimum collateral posting thresholds with certain of our derivative counterparties and had mortgage-backed securities with a fair value of $1.0 million and $260,000 in cash posted as collateral against our obligations under these agreements. If we had breached any of these provisions at December 31, 2018, we could have been required to settle our obligations under the agreements at the termination value. |
REGULATORY CAPITAL
REGULATORY CAPITAL | 12 Months Ended |
Dec. 31, 2018 | |
Banking and Thrift [Abstract] | |
REGULATORY CAPITAL | 12. REGULATORY CAPITAL The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on our consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to savings and loan holding companies. Federal banking regulations require the Company and the Bank to maintain minimum amounts and ratios of total, common equity Tier 1, Tier 1 and total capital to risk-weighted assets and Tier 1 capital to average assets, as set forth in the table below. Additionally, community banking institutions must maintain a capital conservation buffer of common equity Tier 1 capital in an amount greater than 2.5% of total risk-weighted assets to avoid being subject to limitations on capital distributions and discretionary bonuses. The capital conservation buffer and certain deductions from and adjustments to regulatory capital and risk-weighted assets are being phased in over several years. The required minimum conservation buffer is 1.875% as of December 31, 2018 and will increase to 2.5% on January 1, 2019. Management believes that the capital levels will remain characterized as “well-capitalized” throughout the phase-in periods. At December 31, 2018, we exceeded each of the applicable regulatory capital requirements. As of December 31, 2018, the most recent notification from the Office of Comptroller of the Currency categorized the Bank as “well-capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well-capitalized,” the Bank must maintain minimum total risk-based, Tier 1 risk-based, Common Equity Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the following table. There are no conditions or events since that notification that management believes would change our category. Our actual capital ratios of December 31, 2018 and December 31, 2017 are also presented in the following table. Minimum To Be Well Minimum For Capital Capitalized Under Prompt Actual Adequacy Purpose Corrective Action Provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) December 31, 2018 Total Capital (to Risk Weighted Assets): Consolidated $ 247,361 14.87 % $ 133,089 8.00 % N/A N/A Bank 235,569 14.18 132,892 8.00 $ 166,115 10.00 % Tier 1 Capital (to Risk Weighted Assets): Consolidated 235,308 14.14 99,817 6.00 N/A N/A Bank 223,516 13.46 99,669 6.00 132,892 8.00 Common Equity Tier 1 Capital (to Risk Weighted Assets): Consolidated 235,308 14.14 74,862 4.50 N/A N/A Bank 223,516 13.46 74,752 4.50 107,974 6.50 Tier 1 Leverage Ratio (to Adjusted Average Assets): Consolidated 235,308 11.14 84,497 4.00 N/A N/A Bank 223,516 10.59 84,465 4.00 105,581 5.00 December 31, 2017 Total Capital (to Risk Weighted Assets): Consolidated $ 255,605 15.53 % $ 131,711 8.00 % N/A N/A Bank 245,380 14.94 131,367 8.00 $ 164,208 10.00 % Tier 1 Capital (to Risk Weighted Assets): Consolidated 244,774 14.87 98,783 6.00 N/A N/A Bank 234,549 14.28 98,525 6.00 131,367 8.00 Common Equity Tier 1 Capital (to Risk Weighted Assets): Consolidated 244,774 14.87 74,087 4.50 N/A N/A Bank 234,549 14.28 73,894 4.50 106,735 6.50 Tier 1 Leverage Ratio (to Adjusted Average Assets): Consolidated 244,774 11.84 82,702 4.00 N/A N/A Bank 234,549 11.36 82,584 4.00 103,230 5.00 The following is a reconciliation of our GAAP capital to regulatory Tier 1, Common Equity Tier 1 and total capital: December 31, 2018 2017 (In thousands) Consolidated GAAP capital $ 237,029 $ 247,281 Net unrealized losses on available-for-sale securities, net of tax 7,400 4,042 Unrealized loss on defined benefit pension plan, net of tax 3,246 4,329 Accumulated net loss on cash flow hedges, net of tax 2,770 4,181 Unrealized loss on certain available-for-sale equity securities — (236 ) Goodwill (12,487 ) (12,487 ) Intangible assets, net of associated deferred tax liabilities (2,652 ) (2,336 ) Tier 1 and Common Equity Tier 1 capital 235,308 244,774 Allowance for loan losses 12,053 10,831 Total regulatory capital $ 247,361 $ 255,605 On January 31, 2017, the Board of Directors authorized a stock repurchase program (the “2017 Plan”) under which the Company may purchase up to 3,047,000 shares, or 10%, of its outstanding common stock, to be affected via a combination of Rule 10b5-1 plans and discretionary share repurchases. As of December 31, 2018, there were 251,333 shares remaining to be purchased under this plan. On March 1, 2019, the Company announced the completion of the 2017 Plan. On January 29, 2019, the Board of Directors authorized an additional stock repurchase program (the “2019 Plan”) under which the Company may purchase up to 2,814,200 shares, or 10%, of its outstanding common stock following the completion of the Company’s current share repurchase program, to be affected via a combination of Rule 10b5-1 plans and discretionary share repurchases, which will commence upon the completion of the Company’s existing repurchase program. We are subject to dividend restrictions imposed by various regulators, including a limitation on the total of all dividends that the Bank may pay to the Company in any calendar year, to an amount that shall not exceed the Bank’s net income for the current year, plus its net income retained for the two previous years, without regulatory approval. At December 31, 2018 and 2017, the Bank had no retained earnings available for payment of dividends without prior regulatory approval. In addition, the Bank may not declare or pay dividends on, and we may not repurchase, any of our shares of common stock if the effect thereof would cause shareholders’ equity to be reduced below applicable regulatory capital maintenance requirements or if such declaration, payment or repurchase would otherwise violate regulatory requirements. The Bank will be prohibited from paying cash dividends to the Company to the extent that any such payment would reduce the Bank’s capital below required capital levels. Accordingly, $132.9 million and $131.4 million of our equity in the net assets of the Bank was restricted at December 31, 2018 and 2017, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 13. INCOME TAXES Income taxes consist of the following: Years Ended December 31, 2018 2017 2016 (In thousands) Current tax provision: Federal $ 3,910 $ 1,505 $ 1,925 State 1,586 581 370 Total 5,496 2,086 2,295 Deferred tax (benefit) provision: Federal (542 ) 7,613 262 State (254 ) 702 10 Change in valuation reserve — (973 ) 2 Total (796 ) 7,342 274 Total $ 4,700 $ 9,428 $ 2,569 The reasons for the differences between the statutory federal income tax rate and the effective rates are summarized below: Years Ended December 31, 2018 2017 2016 Statutory federal income tax rate 21.0 % 35.0 % 34.0 % Increase (decrease) resulting from: State taxes, net of federal tax benefit 5.0 3.2 3.4 Tax exempt income (1.8 ) (2.8 ) (2.6 ) Bank-owned life insurance (BOLI) (1.8 ) (2.9 ) (7.2 ) Nondeductible merger expenses — 0.1 8.3 Change in valuation reserve — (4.5 ) — Option exercise tax benefit (0.1 ) (3.2 ) — Effect of tax rate change — 18.4 — Other, net — — (1.2 ) Effective tax rate 22.3 % 43.3 % 34.7 % Cash paid for income taxes for the years ended December 31, 2018, 2017 and 2016 was $3.7 million, $5.6 million and $2.6 million, respectively. The tax effects of each item that gives rise to deferred taxes are as follows: December 31, 2018 2017 (In thousands) Deferred tax assets: Allowance for loan losses $ 3,388 $ 3,045 Net unrealized loss on derivative and hedging activity 1,084 1,635 Employee benefit and share-based compensation plans 2,233 2,184 Defined benefit plan 1,270 1,692 Net unrealized loss on securities available for sale 2,491 1,316 Other-than-temporary impairment write-down — 91 Purchased mortgage servicing rights 293 344 Nonaccrual interest 674 487 Other 777 509 Gross deferred tax assets 12,210 11,303 Deferred tax liabilities: Deferred loan fees (1,122 ) (1,226 ) Hedge termination payments (729 ) (1,030 ) Purchase accounting adjustments, net (416 ) (234 ) Other (71 ) (29 ) Gross deferred tax liabilities (2,338 ) (2,519 ) Net deferred tax asset $ 9,872 $ 8,784 The federal income tax reserve for loan losses at the Bank’s base year is $9.4 million. If any portion of the reserve is used for purposes other than to absorb loan losses, approximately 150% of the amount actually used, limited to the amount of the reserve, would be subject to taxation in the fiscal year in which used. As the Bank intends to use the reserve solely to absorb loan losses, a deferred tax liability of $2.6 million has not been provided. We do not have any uncertain tax positions at December 31, 2018 or 2017 which require accrual or disclosure. We record interest and penalties as part of income tax expense. No interest was recorded for the years ended December 31, 2018 and 2017, and no penalties were recorded for the years ended December 31, 2018, 2017 and 2016. Our income tax returns are subject to review and examination by federal and state tax authorities. We are currently open to audit under the applicable statutes of limitations by the Internal Revenue Service for the years ended December 31, 2015 through 2018. The years open to examination by state taxing authorities vary by jurisdiction; however, no years prior to 2015 are open. The Company had net operating loss carryforwards brought over in the Chicopee merger of $3.5 million, which was used during the year ended December 31, 2017. As a result of the Tax Act, the Company recorded $4.0 million in additional income tax expense which includes a tax benefit of $2.1 million relating to the impact of the rate change on deferred tax items originally recorded through other comprehensive income (net unrealized losses on securities available for sale, change in fair value of derivatives used for cash flow hedges and actuarial losses on the defined benefit pension plan). This accounting treatment effectively stranded $2.1 million of deferred tax items in accumulated other comprehensive income (“AOCI”). In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220), which allows for a reclassification from AOCI to retained earnings to eliminate the stranded tax effects resulting from the Tax Act. As permitted, the Company early adopted the ASU and recorded a $2.1 million reclassification to 2017 retained earnings from accumulated other comprehensive loss. |
TRANSACTIONS WITH DIRECTORS AND
TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS | 14. TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS We have had, and expect to have in the future, loans with our directors and executive officers including their affiliates. Such loans, in our opinion, do not include more than the normal risk of collectability or other unfavorable features. Following is a summary of activity for such loans: Years Ended December 31, 2018 2017 (In thousands) Balance at beginning of year $ 1,631 $ 1,475 Principal distributions 837 1,034 Repayments of principal (1,513 ) (878 ) Balance at end of year $ 955 $ 1,631 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 15. COMMITMENTS AND CONTINGENCIES In the normal course of business, various commitments and contingent liabilities are outstanding, such as standby letters of credit and commitments to extend credit with off-balance-sheet risk that are not reflected in the consolidated financial statements. Financial instruments with off-balance-sheet risk involve elements of credit, interest rate, liquidity and market risk. We do not anticipate any significant losses as a result of these transactions. The following summarizes these financial instruments and other commitments and contingent liabilities at their contract amounts: December 31, 2018 2017 (In thousands) Commitments to extend credit: Unused lines of credit $ 259,009 $ 229,436 Loan commitments 53,199 40,878 Existing construction loan agreements 45,339 42,555 Standby letters of credit 11,370 9,138 We use the same credit policies in making commitments and conditional obligations as for on balance sheet instruments. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some commitments expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. We evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by us upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, and income-producing commercial properties. Standby letters of credit are written conditional commitments issued by us that guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. At December 31, 2018, outstanding commitments to extend credit totaled $368.9 million, with $45.3 million in fixed rate commitments with interest rates ranging from 1.49% to 18.00% and $323.6 million in variable rate commitments. At December 31, 2017, outstanding commitments to extend credit totaled $322.0 million, with $47.4 million in fixed rate commitments with interest rates ranging from 1.49% to 18.00% and $274.6 million in variable rate commitments. We also have risk participation agreements (“RPAs”) with another financial institution. The RPAs are a guarantee to share credit risk associated with an interest rate swap on participation loans in the event of counterparty default. As such, we accept a portion of the credit risk in order to participate in the loans and we receive a one-time fee. The interest rate swap is collateralized (generally by real estate or business assets) by us and the third party, which limits the credit risk associated with the RPAs. Per the terms of the RPAs, we must pledge collateral equal to our exposure for the interest rate swap. We monitor overall collateral as part of our off-balance sheet liability analysis, and at December 31, 2018, believe sufficient collateral is available to cover potential swap losses. At December 31, 2018, we had three RPAs with a fair value exposure of $1.2 million. The remaining terms of these RPAs, which corresponds to the term of the underlying swaps, range from eight years to 20 years. Under these agreements we guarantee a percentage of the amount in the event of a default. The maximum potential future payment guaranteed by us cannot be readily estimated, but is dependent upon the fair value of the interest rate swaps and the probability of a default event. If an event of default on all contracts had occurred at December 31, 2018, we would have been required to make payments of approximately $587,000. In the ordinary course of business, we are party to various legal proceedings, none of which, in our opinion, will have a material effect on our consolidated financial position or results of operations. We lease facilities and certain equipment under cancelable and non-cancelable leases expiring in various years through the year 2047. Certain of the leases provide for renewal periods for up to forty years at our discretion under the original lease agreement. Rent expense under operating leases was $1.1 million, $1.1 million, and $798,000 for the years ended December 31, 2018, 2017, and 2016, respectively. Aggregate future minimum rental payments under the terms of non-cancelable operating leases at December 31, 2018, are as follows: Years Ending December 31, Amount (In thousands) 2019 $ 1,128 2020 995 2021 915 2022 887 2023 700 Thereafter 4,340 Total $ 8,965 Investment Commitments. The Bank is a limited partner in a Small Business Investment Company (“SBIC”) and committed to contribute capital of $3.0 million to the partnership. At December 31, 2018, the SBIC currently has a book value of $1.4 million and is included in other assets. The unfunded commitment to the partnership was $1.6 million at December 31, 2018. Employment and change of control agreements. We have entered into employment and change of control agreements with certain senior officers. The initial term of the employment agreements is for three years subject to separate one-year extensions as approved by the Board of Directors at the end of each applicable fiscal year. Each employment agreement provides for minimum annual salaries, discretionary cash bonuses and other fringe benefits as well as severance benefits upon certain terminations of employment that are not for cause. The change of control agreements expire one year following a notice of non-extension and only provide for severance benefits upon certain terminations of employment that are not for cause and that are related to a change of control of the Company or the Bank. |
FAIR VALUE OF ASSETS AND LIABIL
FAIR VALUE OF ASSETS AND LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF ASSETS AND LIABILITIES | 16. FAIR VALUE OF ASSETS AND LIABLITIES 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. 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. Securities available-for-sale. Interest rate swaps. Assets and Liabilities Measured at Fair Value on a Recurring Basis. Assets and liabilities measured at fair value on a recurring basis are summarized below: December 31, 2018 Level 1 Level 2 Level 3 Total Assets: (In thousands) Government-sponsored mortgage-backed securities $ — $ 159,351 $ — $ 159,351 U.S. government guaranteed mortgage-backed securities — 19,338 — 19,338 Corporate bonds — 48,168 — 48,168 State and municipal bonds — 2,944 — 2,944 Government-sponsored enterprise obligations — 23,947 — 23,947 Marketable equity securities 6,408 — — 6,408 Total assets $ 6,408 $ 253,748 $ — $ 260,156 Liabilities: Interest rate swaps $ — $ 1,259 $ — $ 1,259 December 31, 2017 Level 1 Level 2 Level 3 Total Assets: (In thousands) Government-sponsored mortgage-backed securities $ — $ 182,001 $ — $ 182,001 U.S. government guaranteed mortgage-backed securities — 16,254 — 16,254 Corporate bonds — 56,144 — 56,144 State and municipal bonds — 3,239 — 3,239 Government-sponsored enterprise obligations — 24,381 — 24,381 Mutual funds 6,397 — — 6,397 Total assets $ 6,397 $ 282,019 $ — $ 288,416 Liabilities: Interest rate swaps $ — $ 2,152 $ — $ 2,152 There were no transfers to or from Level 1 and 2 for assets measured at fair value on a recurring basis during the years ended December 31, 2018 and 2017. Assets Measured at Fair Value on a Non-recurring Basis. We may also be required, from time to time, to measure certain other financial assets at fair value on a nonrecurring basis in accordance with generally accepted accounting principles. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. The following table summarizes the fair value hierarchy used to determine the carrying values of the related assets as of December 31, 2018 and 2017. Year Ended At December 31, 2018 December 31, 2018 Total Level 1 Level 2 Level 3 Losses (In thousands) (In thousands) Impaired Loans $ — $ — $ 1,676 $ 612 Year Ended At December 31, 2017 December 31, 2017 Total Level 1 Level 2 Level 3 Losses (In thousands) (In thousands) Impaired Loans $ — $ — $ 1,495 $ 256 The amount of impaired loans represents the carrying value, and net of the related write-down or 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. There were no liabilities measured at fair value on a non-recurring basis at December 31, 2018 and 2017. Summary of Fair Values of Financial Instruments. The estimated fair values of our financial instruments are as follows: December 31, 2018 Carrying Value Fair Value Level 1 Level 2 Level 3 Total (In thousands) Assets: Cash and cash equivalents $ 26,789 $ 26,789 $ — $ — $ 26,789 Securities available-for-sale 253,748 — 253,748 — 253,748 Marketable equity securities 6,408 6,408 — — 6,408 Federal Home Loan Bank of Boston and other restricted stock 14,695 — — 14,695 14,695 Loans - net 1,684,804 — — 1,631,558 1,631,558 Accrued interest receivable 5,652 — — 5,652 5,652 Mortgage servicing rights 286 — 456 — 456 Liabilities: Deposits 1,595,993 — — 1,592,521 1,592,521 Short-term borrowings 59,250 — 59,247 — 59,247 Long-term debt 208,018 — 206,789 — 206,789 Accrued interest payable 530 — — 530 530 Derivative liabilities 1,259 — 1,259 — 1,259 December 31, 2017 Carrying Value Fair Value Level 1 Level 2 Level 3 Total (In thousands) Assets: Cash and cash equivalents $ 27,132 $ 27,132 $ — $ — $ 27,132 Securities available-for-sale 288,416 6,397 282,019 — 288,416 Federal Home Loan Bank of Boston and other restricted stock 15,553 — — 15,553 15,553 Loans - net 1,619,850 — — 1,581,929 1,581,929 Accrued interest receivable 5,946 — — 5,946 5,946 Mortgage servicing rights 352 — 528 — 528 Liabilities: Deposits 1,506,082 — — 1,503,311 1,503,311 Short-term borrowings 144,650 — 144,650 — 144,650 Long-term debt 164,786 — 164,016 — 164,016 Accrued interest payable 441 — — 441 441 Derivative liabilities 2,152 — 2,152 — 2,152 Limitations |
SEGMENT
SEGMENT | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT | 17. SEGMENT The Company, through its bank subsidiary, provides a broad range of financial services to individuals and companies primarily in western Massachusetts and northern Connecticut. These services include commercial lending, residential lending and consumer lending, checking, savings and time deposits, cash management, and wealth management. Substantially all of the Company’s revenues, profits, and assets are derived by the Bank from banking products and services. The Company did not have any reportable segments for the years ended December 31, 2018, 2017 or 2016. |
CONDENSED PARENT COMPANY FINANC
CONDENSED PARENT COMPANY FINANCIAL STATEMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
CONDENSED PARENT COMPANY FINANCIAL STATEMENTS | 18. CONDENSED PARENT COMPANY FINANCIAL STATEMENTS The condensed balance sheets of the parent company are as follows: December 31, 2018 2017 (In thousands) ASSETS: Cash equivalents $ 74 $ 120 Investment in subsidiaries 225,238 237,056 ESOP loan receivable 6,419 7,135 Other assets 12,164 10,529 TOTAL ASSETS 243,895 254,840 LIABILITIES: ESOP loan payable 6,419 7,135 Other liabilities 447 424 EQUITY 237,029 247,281 TOTAL LIABILITIES AND EQUITY $ 243,895 $ 254,840 The condensed statements of income for the parent company are as follows: Years Ended December 31, 2018 2017 2016 (In thousands) INCOME: Dividends from subsidiaries $ 28,712 $ 8,561 $ 3,499 Interest income from securities — — 32 ESOP loan interest income 571 629 670 Gain on sales of securities, net — — 451 Other income 1 4 — Total income 29,284 9,194 4,652 OPERATING EXPENSE: Salaries and employee benefits 1,837 1,646 926 ESOP interest 571 629 670 Other expenses 286 298 507 Total operating expense 2,694 2,573 2,103 Income before equity in undistributed income of subsidiaries and income taxes 26,590 6,621 2,549 Equity in undistributed (loss) income of subsidiaries (10,717 ) 4,188 1,955 Net income before taxes 15,873 10,809 4,504 Income tax benefit (535 ) (1,511 ) (330 ) Net income $ 16,408 $ 12,320 $ 4,834 The condensed statements of cash flows of the parent company are as follows: Years Ended December 31, 2018 2017 2016 (In thousands) OPERATING ACTIVITIES: Net income $ 16,408 $ 12,320 $ 4,834 Equity in undistributed loss (income) of subsidiaries 10,717 (4,188 ) (1,955 ) Gain on sales of securities, net — — (451 ) Change in other liabilities (610 ) (833 ) (597 ) Change in other assets (919 ) (2,330 ) (271 ) Other, net 1,805 1,607 1,049 Net cash provided by operating activities 27,401 6,576 2,609 INVESTING ACTIVITIES: Purchase of securities (127 ) (106 ) (116 ) Sales of securities 127 106 116 Net cash provided by investing activities — — — FINANCING ACTIVITIES: Cash dividends paid (4,641 ) (3,579 ) (2,439 ) Common stock repurchased (22,920 ) (9,314 ) (1,378 ) Excess tax benefit from share-based compensation — — 156 Issuance of common stock in connection with stock option exercises 114 5,465 1,971 Net cash used in financing activities (27,447 ) (7,428 ) (1,690 ) NET CHANGE IN CASH AND CASH EQUIVALENTS (46 ) (852 ) 919 CASH AND CASH EQUIVALENTS Beginning of year 120 972 53 End of year $ 74 $ 120 $ 972 Supplemental cash flow information: Net change in due to broker for common stock repurchased $ (83 ) $ (151 ) $ 455 |
SUMMARY OF QUARTERLY FINANCIAL
SUMMARY OF QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
SUMMARY OF QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | 19. SUMMARY OF QUARTERLY FINANCIAL INFORMATION (UNAUDITED) The following tables present a summary of our quarterly financial information for the periods indicated. The year-to-date totals may differ slightly due to rounding. All unaudited interim financial statements furnished shall reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for interim periods presented and are of a normal and recurring nature, unless otherwise noted. 2018 First Quarter Second Quarter Third Quarter Fourth Quarter (Dollars in thousands, except per share amounts) Interest and dividend income $ 18,732 $ 20,464 $ 19,605 $ 20,189 Interest expense 4,010 4,599 5,000 5,369 Net interest and dividend income 14,722 15,865 14,605 14,820 Provision for loan losses 500 750 350 300 Gain on disposal of other real estate owned 48 — — — Loss on available-for-sale securities, net (201 ) (49 ) — (31 ) Unrealized (losses) gains on marketable equity securities (106 ) (41 ) (43 ) 48 Swap fee income — 131 — — Bank-owned life insurance death benefit — 715 — — Other non-interest income 2,025 2,177 2,339 2,221 Non-interest income 1,766 2,933 2,296 2,238 Non-interest expense 11,426 11,546 11,572 11,693 Income before income taxes 4,562 6,502 4,979 5,065 Income tax provision 1,043 1,364 1,070 1,223 Net income $ 3,519 $ 5,138 $ 3,909 $ 3,842 Basic earnings per share $ 0.12 $ 0.18 $ 0.14 $ 0.14 Diluted earnings per share $ 0.12 $ 0.18 $ 0.14 $ 0.14 2017 First Quarter Second Quarter Third Quarter Fourth Quarter (Dollars in thousands, except per share amounts) Interest and dividend income $ 17,957 $ 18,327 $ 18,516 $ 19,239 Interest expense 3,454 3,584 3,720 3,887 Net interest and dividend income 14,503 14,743 14,796 15,352 Provision for loan losses 350 350 200 510 Gain (loss) on disposal of other real estate owned — — 67 (58 ) Gain (loss) on sales of securities, net (64 ) 46 70 — Swap fee income 116 — 111 — Other non-interest income 1,965 2,029 2,164 2,055 Non-interest income 2,017 2,075 2,412 1,997 Non-interest expense 10,970 11,296 11,156 11,364 Income before income taxes 5,250 5,172 5,852 5,475 Income tax provision (1) 147 1,416 2,037 5,828 Net income (loss) $ 5,103 $ 3,756 $ 3,815 $ (353 ) Basic earnings per share $ 0.17 $ 0.13 $ 0.13 $ (0.01 ) Diluted earnings per share $ 0.17 $ 0.12 $ 0.13 $ (0.01 ) (1) Increase in the quarter ended December 31, 2017 is due to the enactment of the Tax Act on December 22, 2017. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 20. SUBSEQUENT EVENTS Subsequent events represent events or transactions occurring after the balance sheet date but before the financial statements are issued. Financial statements are considered “issued” when they are widely distributed to shareholders and others for general use and reliance in a form and format that complies with GAAP. The Company is an SEC filer and management has evaluated subsequent events through the date that the financial statements were issued. From the period January 1, 2019 through March 13, 2019, the Company has repurchased 1,492,705 shares of its common stock under the 2017 and 2019 Plans at an average price of $9.92, which resulted in a decrease to shareholders’ equity of $14.8 million. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Nature of Operations and Basis of Presentation | Nature of Operations and Basis of Presentation The Bank’s deposits are insured up to the maximum Federal Deposit Insurance Corporation (“FDIC”) coverage limits. The Bank operates 22 banking offices in western Massachusetts and northern Connecticut, and its primary sources of revenue is interest income from loans as well as interest income from investment securities. |
Wholly-owned Subsidiaries and Acquisition | Wholly-owned Subsidiaries and Acquisition On October 21, 2016, the Company acquired Chicopee Bancorp, Inc. (“Chicopee”), the holding company for Chicopee Savings Bank. The acquisition added eight full-service banking offices located in western Massachusetts. The primary purpose of the acquisition with Chicopee was to expand our presence in western Massachusetts and diversify our market area. The transaction qualified as a tax-free reorganization for federal income tax purposes. The consideration paid in the transaction to Chicopee’s shareholders consisted of 11,919,412 shares of common stock of the Company, net of shares of Chicopee already owned, and shares of Chicopee’s ESOP were liquidated to pay off the ESOP loan. Based upon the per share closing price on October 21, 2016, of $7.90, the transaction was valued at approximately $98.8 million. As a result of this transaction, we added eight branches, total assets of $716.6 million, total loans of $640.9 million and total deposits of $545.7 million to our franchise. We accounted for the transaction using the acquisition method. Additionally, our results of operations include Chicopee’s operating results from the date of acquisition. |
Principles of Consolidation | Principles of Consolidation |
Estimates | Estimates |
Reclassifications | Reclassifications. |
Significant Group Concentrations of Credit Risk | Significant Group Concentrations of Credit Risk |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Securities and Mortgage-Backed Securities | Securities and Mortgage-Backed Securities Financial Instruments —Overall Recognition and Measurement of Financial Assets and Financial Liabilities Realized gains and losses on sales of securities and mortgage-backed securities are computed using the specific identification method and are included in non-interest income on the trade date. The amortization of premiums and accretion of discounts is determined by using the level yield method to the maturity date. |
Derivatives | Derivatives. |
Other-than-Temporary Impairment of Securities | Other-than-Temporary Impairment of Securities |
Fair Value Hierarchy | Fair Value Hierarchy Level 1: Level 2: Level 3: Transfers between levels are recognized at the end of a reporting period, if applicable. |
Federal Home Loan Bank of Boston Stock | Federal Home Loan Bank of Boston Stock |
Loans Held for Sale | Loans Held for Sale |
Loans Receivable | Loans Receivable |
Allowance for Loan Losses | Allowance for Loan Losses 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, commercial real estate, commercial and industrial, and consumer. Residential real estate loans include classes for residential and home equity. 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; internal credit ratings; effects of changes in risk selection; underwriting standards and other changes in lending policies, procedures and practices; and national and local economic trends and industry conditions. In 2018, there were no changes to the Company’s policies or methodology pertaining to the general component of the allowance for loan losses. The qualitative factors are determined based on the various risk characteristics of each loan segment. Risk characteristics relevant to each loan portfolio segment are as follows: Commercial real estate loans Residential real estate loans Commercial and industrial loans Consumer loans 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 nonperforming or 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 all of the 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. 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”). All TDRs are classified as impaired. While we use our best judgment and information available, the ultimate appropriateness of the allowance is dependent upon a variety of factors beyond our control, including the performance of our loan portfolio, the economy, changes in interest rates and the view of the regulatory authorities toward loan classifications. 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 reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating allocated and general reserves in the portfolio. |
Loans Acquired with Deteriorated Credit Quality | Loans Acquired with Deteriorated Credit Quality. |
Bank-owned Life Insurance | Bank-owned Life Insurance. |
Transfers and Servicing of Financial Assets | Transfers and Servicing of Financial Assets |
Premises and Equipment | Premises and Equipment Years Buildings 39 Leasehold Improvements 5-20 Furniture and Equipment 3-7 The cost of maintenance and repairs is charged to expense when incurred. Major expenditures for betterments are capitalized and depreciated. |
Other Real Estate Owned | Other Real Estate Owned |
Servicing | Servicing Servicing fee income is recorded for fees earned for servicing loans, which is included in service charges and fee income. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income when earned. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets Goodwill is measured as the excess of the cost of a business combination over the sum of the amounts assigned to identifiable intangible assets acquired less liabilities assumed. Goodwill is not amortized but rather assessed for impairment annually or more frequently if circumstances warrant. Management has the option of first assessing qualitative factors, such as events and circumstances, to determine whether it is more likely than not, meaning a likelihood of more than 50%, the value of a reporting unit is less than its carrying amount. If, after considering all relevant events and circumstances, management determines it is not more likely than not the fair value of a reporting unit is less than its carrying amount, then performing an impairment test is unnecessary. For the year ended December 31, 2018, management determined that it was not more likely than not the fair value of the reporting unit (the consolidated Company, in our case) was less than its carrying amount. If management had determined otherwise, a fair value analysis would have been completed to determine the impairment and necessary write-down of goodwill. |
Retirement Plans and Employee Benefits | Retirement Plans and Employee Benefits. |
Share-based Compensation Plans | Share-based Compensation Plans |
Employee Stock Ownership Plan | Employee Stock Ownership Plan |
Advertising Costs | Advertising Costs |
Income Taxes | Income Taxes |
Earnings per Share | Earnings per Share. Earnings per common share have been computed based on the following: Years Ended December 31, 2018 2017 2016 (In thousands, except per share data) Net income applicable to common stock $ 16,408 $ 12,320 $ 4,834 Average number of common shares issued 29,734 30,755 20,659 Less: Average unallocated ESOP Shares (757 ) (849 ) (935 ) Less: Average unvested equity incentive plan shares (90 ) (47 ) (16 ) Average number of common shares outstanding used to calculate basic earnings per common share 28,887 29,859 19,708 Effect of dilutive equity incentive plan 46 17 3 Effect of dilutive stock options 96 151 93 Average number of common shares outstanding used to calculate diluted earnings per common share 29,029 30,027 19,804 Basic earnings per share $ 0.57 $ 0.41 $ 0.25 Diluted earnings per share $ 0.57 $ 0.41 $ 0.24 |
Comprehensive Income (Loss) | 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 (loss). The components of accumulated other comprehensive loss, included in shareholders’ equity, are as follows: December 31, 2018 December 31, 2017 (In thousands) Net unrealized losses on securities available-for-sale $ (9,891 ) $ (5,358 ) Tax effect 2,491 1,316 Net-of-tax amount (7,400 ) (4,042 ) Fair value of derivatives used for cash flow hedges (1,259 ) (2,152 ) Termination fee on cancelled cash flow hedges (2,595 ) (3,664 ) Total derivatives (3,854 ) (5,816 ) Tax effect 1,084 1,635 Net-of-tax amount (2,770 ) (4,181 ) Unrecognized actuarial loss on the defined benefit plan (4,516 ) (6,021 ) Tax effect 1,270 1,692 Net-of-tax amount (3,246 ) (4,329 ) Accumulated other comprehensive loss $ (13,416 ) $ (12,552 ) The following table presents changes in accumulated other comprehensive loss for the years ended December 31, 2018 and 2017 by component: Securities Derivatives Defined Benefit Pension Plan Accumulated Other Comprehensive Loss (In thousands) Balance at December 31, 2016 $ (3,839 ) $ (5,204 ) $ (3,618 ) $ (12,661 ) Adoption of ASU 2018-02 (see Note 13) (686 ) (741 ) (699 ) (2,126 ) Current-period other comprehensive (loss) income 483 1,764 (12 ) 2,235 Balance at December 31, 2017 $ (4,042 ) $ (4,181 ) $ (4,329 ) $ (12,552 ) Balance at December 31, 2017 $ (4,042 ) $ (4,181 ) $ (4,329 ) $ (12,552 ) Cumulative-effect adjustment due to change in accounting principle (ASU 2016-01) 237 — — 237 Current-period other comprehensive (loss) income (3,595 ) 1,411 1,083 (1,101 ) Balance at December 31, 2018 $ (7,400 ) $ (2,770 ) $ (3,246 ) $ (13,416 ) With regard to the defined benefit plan, an actuarial loss of $124,000 is expected to be recognized as a component of net periodic pension cost during the year ending December 31, 2019. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements. In February 2016, the FASB issued ASU 2016-02, Leases Leases In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses In March 2017, the FASB issued ASU 2017-08— Receivables—Nonrefundable Fees and Other Costs 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 In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful lives of the assets | The estimated useful lives of the assets are as follows: Years Buildings 39 Leasehold Improvements 5-20 Furniture and Equipment 3-7 |
Schedule of earnings per common share | Earnings per common share have been computed based on the following: Years Ended December 31, 2018 2017 2016 (In thousands, except per share data) Net income applicable to common stock $ 16,408 $ 12,320 $ 4,834 Average number of common shares issued 29,734 30,755 20,659 Less: Average unallocated ESOP Shares (757 ) (849 ) (935 ) Less: Average unvested equity incentive plan shares (90 ) (47 ) (16 ) Average number of common shares outstanding used to calculate basic earnings per common share 28,887 29,859 19,708 Effect of dilutive equity incentive plan 46 17 3 Effect of dilutive stock options 96 151 93 Average number of common shares outstanding used to calculate diluted earnings per common share 29,029 30,027 19,804 Basic earnings per share $ 0.57 $ 0.41 $ 0.25 Diluted earnings per share $ 0.57 $ 0.41 $ 0.24 |
Schedule of accumulated other comprehensive loss included sharesholders equity | The components of accumulated other comprehensive loss, included in shareholders’ equity, are as follows: December 31, 2018 December 31, 2017 (In thousands) Net unrealized losses on securities available-for-sale $ (9,891 ) $ (5,358 ) Tax effect 2,491 1,316 Net-of-tax amount (7,400 ) (4,042 ) Fair value of derivatives used for cash flow hedges (1,259 ) (2,152 ) Termination fee on cancelled cash flow hedges (2,595 ) (3,664 ) Total derivatives (3,854 ) (5,816 ) Tax effect 1,084 1,635 Net-of-tax amount (2,770 ) (4,181 ) Unrecognized actuarial loss on the defined benefit plan (4,516 ) (6,021 ) Tax effect 1,270 1,692 Net-of-tax amount (3,246 ) (4,329 ) Accumulated other comprehensive loss $ (13,416 ) $ (12,552 ) |
Schedule of changes in accumulated other loss by component | The following table presents changes in accumulated other comprehensive loss for the years ended December 31, 2018 and 2017 by component: Securities Derivatives Defined Benefit Pension Plan Accumulated Other Comprehensive Loss (In thousands) Balance at December 31, 2016 $ (3,839 ) $ (5,204 ) $ (3,618 ) $ (12,661 ) Adoption of ASU 2018-02 (see Note 13) (686 ) (741 ) (699 ) (2,126 ) Current-period other comprehensive (loss) income 483 1,764 (12 ) 2,235 Balance at December 31, 2017 $ (4,042 ) $ (4,181 ) $ (4,329 ) $ (12,552 ) Balance at December 31, 2017 $ (4,042 ) $ (4,181 ) $ (4,329 ) $ (12,552 ) Cumulative-effect adjustment due to change in accounting principle (ASU 2016-01) 237 — — 237 Current-period other comprehensive (loss) income (3,595 ) 1,411 1,083 (1,101 ) Balance at December 31, 2018 $ (7,400 ) $ (2,770 ) $ (3,246 ) $ (13,416 ) |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of securities available for sale | The amortized cost and fair values of available-for-sale investment securities at December 31, 2018 and 2017 are summarized as follows: December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Available-for-sale securities: Debt securities: Government-sponsored enterprise obligations $ 25,150 $ — $ (1,203 ) $ 23,947 State and municipal bonds 2,976 33 (65 ) 2,944 Corporate bonds 49,819 — (1,651 ) 48,168 Total debt securities 77,945 33 (2,919 ) 75,059 Mortgage-backed securities: Government-sponsored mortgage-backed securities 165,605 1 (6,255 ) 159,351 U.S. government guaranteed mortgage-backed securities 20,089 1 (752 ) 19,338 Total mortgage-backed securities 185,694 2 (7,007 ) 178,689 Total available-for-sale (1) $ 263,639 $ 35 $ (9,926 ) $ 253,748 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) Available-for-sale securities: Debt securities: Government-sponsored enterprise obligations $ 25,151 $ — $ (770 ) $ 24,381 State and municipal bonds 3,222 36 (19 ) 3,239 Corporate bonds 56,084 352 (292 ) 56,144 Total debt securities 84,457 388 (1,081 ) 83,764 Mortgage-backed securities: Government-sponsored mortgage-backed securities 185,769 10 (3,778 ) 182,001 U.S. government guaranteed mortgage-backed securities 16,821 — (567 ) 16,254 Total mortgage-backed securities 202,590 10 (4,345 ) 198,255 Marketable equity securities (1) Mutual fund 6,727 — (330 ) 6,397 Total available-for-sale $ 293,774 $ 398 $ (5,756 ) $ 288,416 (1) Does not include investments in restricted stock consisting of $14.7 million and $15.6 million at December 31, 2018 and December 31, 2017, respectively. |
Schedule of amortized cost and fair value of securities available for sale by maturity | The amortized cost and fair value of available-for-sale debt securities at December 31, 2018, by final maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers have the right to call or prepay obligations. Also, because mortgage-backed securities require periodic principal pay downs, they are not included in the maturity categories in the following summary. December 31, 2018 Amortized Cost Fair Value (In thousands) Available-for-sale securities: Debt securities: Due in one year or less $ 240 $ 241 Due after one year through five years 40,864 39,846 Due after five years through ten years 30,094 28,561 Due after ten years 6,747 6,411 Total debt securities 77,945 75,059 Mortgage-backed securities 185,694 178,689 Total available-for-sale securities $ 263,639 $ 253,748 |
Schedule of gross realized gains and losses on sales of securities available for sale | Gross realized gains and losses on sales of securities for the years ended December 31, 2018, 2017 and 2016 are as follows: Years Ended December 31, 2018 2017 2016 (In thousands) Gross gains realized $ — $ 117 $ 1,976 Gross losses realized (281 ) (65 ) (837 ) Net gain realized $ (281 ) $ 52 $ 1,139 |
Schedule of securities with gross unrealized losses in continuous loss position | The following tables summarize investments having temporary impairment due to the fair market values having declined below the amortized costs of the individual investments, and the period that the investments have been temporarily impaired at December 31, 2018 and 2017: December 31, 2018 Less Than 12 Months Over 12 Months Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value (In thousands) Available-for-sale: Government-sponsored mortgage-backed securities $ 74 $ 7,354 $ 6,181 $ 148,762 U.S. government guaranteed mortgage-backed securities 15 2,829 737 14,669 Corporate bonds 110 9,995 1,541 38,173 State and municipal bonds — — 65 1,532 Government-sponsored enterprise obligations — — 1,203 23,947 Total available-for-sale $ 199 $ 20,178 $ 9,727 $ 227,083 December 31, 2017 Less Than 12 Months Over 12 Months Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value (In thousands) Available-for-sale: Government-sponsored mortgage-backed securities $ 613 $ 68,538 $ 3,165 $ 111,595 U.S. government guaranteed mortgage-backed securities 23 1,205 544 15,049 Corporate bonds 292 26,016 — — State and municipal bonds — — 19 1,581 Government-sponsored enterprise obligations — — 770 24,381 Mutual funds — — 330 6,397 Total available-for-sale $ 928 $ 95,759 $ 4,828 $ 159,003 |
LOANS (Tables)
LOANS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of loans | Major classifications of loans at the periods indicated were as follows: December 31, 2018 2017 (In thousands) Commercial real estate $ 768,881 $ 732,616 Residential real estate: Residential 1-4 family 577,641 557,752 Home equity 97,238 92,599 Commercial and industrial 243,493 238,502 Consumer 5,203 4,478 Total gross loans 1,692,456 1,625,947 Premiums and deferred loan fees and costs, net 4,401 4,734 Allowance for loan losses (12,053 ) (10,831 ) Net loans $ 1,684,804 $ 1,619,850 |
Schedule of mortgage servicing rights | A summary of the activity in the balances of mortgage servicing rights follows: Years Ended December 31, 2018 2017 (In thousands) Balance at the beginning of year: $ 352 $ 465 Capitalized mortgage servicing rights — — Amortization (66 ) (113 ) Balance at the end of year $ 286 $ 352 Fair value at the end of year $ 455 $ 528 |
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 years ended December 31, 2018, 2017 and 2016 is as follows: Commercial Real Estate Residential Real Estate Commercial and Industrial Consumer Unallocated Total (In thousands) Balance at December 31, 2015 $ 3,856 $ 2,431 $ 2,485 $ 22 $ 46 $ 8,840 Provision (credit) (668 ) 579 575 135 (46 ) 575 Charge-offs (170 ) (157 ) — (159 ) — (486 ) Recoveries 1,065 9 25 40 — 1,139 Balance at December 31, 2016 $ 4,083 $ 2,862 $ 3,085 $ 38 $ — $ 10,068 Provision (credit) 779 433 (144 ) 288 4 1,360 Charge-offs (292 ) (148 ) (289 ) (319 ) — (1,048 ) Recoveries 142 164 81 64 — 451 Balance at December 31, 2017 $ 4,712 $ 3,311 $ 2,733 $ 71 $ 4 $ 10,831 Provision (credit) 214 863 660 179 (16 ) 1,900 Charge-offs (35 ) (645 ) (299 ) (171 ) — (1,150 ) Recoveries 369 27 20 56 — 472 Balance at December 31, 2018 $ 5,260 $ 3,556 $ 3,114 $ 135 $ (12 ) $ 12,053 |
Schedule of information pertaining to the allowance for loan losses by segment | The following table presents information pertaining to the allowance for loan losses by segment for the dates indicated: Commercial Real Estate Residential Real Estate Commercial and Industrial Consumer Unallocated Total (In thousands) December 31, 2018 Amount of allowance for impaired loans $ — $ — $ — $ — $ — $ — Amount of allowance for non-impaired loans 5,260 3,556 3,114 135 (12 ) 12,053 Total allowance for loan losses $ 5,260 $ 3,556 $ 3,114 $ 135 $ (12 ) $ 12,053 Impaired loans $ 5,237 $ 4,754 $ 2,345 $ 60 $ — $ 12,396 Non-impaired loans 752,770 666,883 240,235 5,143 — 1,665,031 Impaired loans acquired with deteriorated credit quality 10,874 3,242 913 — — 15,029 Total loans $ 768,881 $ 674,879 $ 243,493 $ 5,203 $ — $ 1,692,456 Commercial Real Estate Residential Real Estate Commercial and Industrial Consumer Unallocated Total (In thousands) December 31, 2017 Amount of allowance for impaired loans $ — $ — $ — $ — $ — $ — Amount of allowance for non-impaired loans 4,712 3,311 2,733 71 4 10,831 Total allowance for loan losses $ 4,712 $ 3,311 $ 2,733 $ 71 $ 4 $ 10,831 Impaired loans $ 3,674 $ 3,964 $ 2,766 $ 120 $ — $ 10,524 Non-impaired loans 716,571 642,787 234,582 4,358 — 1,598,298 Impaired loans acquired with deteriorated credit quality 12,371 3,600 1,154 — — 17,125 Total loans $ 732,616 $ 650,351 $ 238,502 $ 4,478 $ — $ 1,625,947 |
Schedule of past due and nonaccrual loans by class | The following tables present an age analysis of past due loans as of the dates indicated: Balance at December 31, 2018 30 – 59 Days Past Due 60 – 89 Days Past Due Greater than 90 Days Past Due Total Past Due Loans Total Current Loans Total Loans Non- Accrual Loans (In thousands) Commercial real estate $ 1,857 $ — $ 2,865 $ 4,722 $ 764,159 $ 768,881 $ 4,701 Residential real estate: Residential 1,798 572 1,879 4,249 573,392 577,641 5,856 Home equity 600 5 242 847 96,391 97,238 391 Commercial and industrial 794 1,463 305 2,562 240,931 243,493 2,476 Consumer 93 1 21 115 5,088 5,203 60 Total loans $ 5,142 $ 2,041 $ 5,312 $ 12,495 $ 1,679,961 $ 1,692,456 $ 13,484 Balance at December 31, 2017 30 – 59 Days Past Due 60 – 89 Days Past Due Greater than 90 Days Past Due Total Past Due Loans Total Current Loans Total Loans Non- Accrual Loans (In thousands) Commercial real estate $ 1,951 $ 144 $ 290 $ 2,385 $ 730,231 $ 732,616 $ 2,959 Residential real estate: Residential 2,992 1,480 1,911 6,383 551,369 557,752 5,961 Home equity 635 — 48 683 91,916 92,599 696 Commercial and industrial 1,731 797 162 2,690 235,812 238,502 3,019 Consumer 65 — 41 106 4,372 4,478 120 Total loans $ 7,374 $ 2,421 $ 2,452 $ 12,247 $ 1,613,700 $ 1,625,947 $ 12,755 |
Schedule of impaired loans by class | The following is a summary of impaired loans by class: Year Ended At December 31, 2018 December 31, 2018 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized Impaired Loans (1) (In thousands) Commercial real estate $ 16,111 $ 19,081 $ — $ 14,830 $ 772 Residential real estate 7,558 8,614 — 7,033 51 Home equity 438 468 636 4 Commercial and industrial 3,258 7,788 — 4,119 147 Consumer 60 70 85 — Total impaired loans $ 27,425 $ 36,021 $ — $ 26,703 $ 974 Year Ended At December 31, 2017 December 31, 2017 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized Impaired Loans: (1) (In thousands) Commercial real estate $ 16,045 $ 18,773 $ — $ 18,215 $ 842 Residential real estate 6,816 7,298 — 6,630 45 Home equity 748 783 359 4 Commercial and industrial 3,920 9,215 — 4,388 237 Consumer 120 129 93 — Total impaired loans $ 27,649 $ 36,198 $ — $ 29,685 $ 1,128 (1) Includes loans acquired with deteriorated credit quality and performing troubled debt restructurings. |
Schedule of loans acquired with deteriorated credit quality | The following is a summary of loans acquired with evidence of credit deterioration from Chicopee as of December 31, 2018. Contractual Required Payments Receivable Cash Expected To Be Collected Non- Accretable Discount Accretable Yield Loans Receivable (In thousands) Balance at December 31, 2017 $ 29,362 $ 23,158 $ 6,204 $ 6,033 $ 17,125 Collections (4,000 ) (2,780 ) (1,220 ) (742 ) (2,038 ) Dispositions (569 ) (495 ) (74 ) (437 ) (58 ) Balance at December 31, 2018 $ 24,793 $ 19,883 $ 4,910 $ 4,854 $ 15,029 |
Schedule of loans by risk rating | The following table presents our loans by risk rating for the periods indicated: Commercial Real Estate Residential 1-4 family Home Equity Commercial and Industrial Consumer Total (In thousands) December 31, 2018 Pass (Rated 1 – 4) $ 732,729 $ 570,428 $ 96,643 $ 207,663 $ 5,143 $ 1,612,606 Special Mention (Rated 5) 17,929 — — 12,248 — 30,177 Substandard (Rated 6) 18,223 7,213 595 23,582 60 49,673 Total $ 768,881 $ 577,641 $ 97,238 $ 243,493 $ 5,203 $ 1,692,456 Commercial Real Estate Residential 1-4 family Home Equity Commercial and Industrial Consumer Total December 31, 2017 (In thousands) Pass (Rated 1 – 4) $ 708,992 $ 551,469 $ 91,903 $ 205,537 $ 4,475 $ 1,562,376 Special Mention (Rated 5) 15,098 — — 24,565 — 39,663 Substandard (Rated 6) 8,526 6,283 696 8,400 3 23,908 Total $ 732,616 $ 557,752 $ 92,599 $ 238,502 $ 4,478 $ 1,625,947 |
PREMISES AND EQUIPMENT (Tables)
PREMISES AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of premises and equipment | Premises and equipment are summarized as follows: December 31, 2018 2017 (In thousands) Land $ 5,651 $ 5,651 Buildings 24,144 22,693 Leasehold improvements 2,372 2,220 Furniture and equipment 16,824 15,200 Total 48,991 45,764 Less: accumulated depreciation and amortization (24,367 ) (22,264 ) Premises and equipment, net $ 24,624 $ 23,500 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Banking and Thrift [Abstract] | |
Schedule of of deposit accounts by type | Deposit accounts, by type, are summarized as follows for the periods indicated: At December 31, 2018 2017 (In thousands) Demand and interest-bearing checking: Interest-bearing checking accounts $ 63,620 $ 87,394 Demand deposits 355,389 311,851 Savings: Regular accounts 118,542 140,081 Money market accounts 398,396 410,223 Time deposits 660,046 556,533 Total deposits $ 1,595,993 $ 1,506,082 |
Scheduled maturities of time certificates of deposit | The scheduled maturities of time deposits for the periods indicated are as follows: Years Ended December 31, 2018 2017 (In thousands) 2018 $ — $ 300,531 2019 443,187 179,780 2020 152,346 34,000 2021 38,328 25,381 2022 18,787 16,841 2023 7,398 — Total time deposits $ 660,046 $ 556,533 |
Schedule of interest expense on deposits | Interest expense on deposits for the years ended December 31, 2018, 2017 and 2016 is summarized as follows: Years Ended December 31, 2018 2017 2016 (In thousands) Regular accounts $ 162 $ 179 $ 106 Money market accounts 1,911 1,565 1,189 Time deposits 9,270 6,374 5,139 Interest-bearing checking accounts 340 330 147 Total $ 11,683 $ 8,448 $ 6,581 |
SHORT-TERM BORROWINGS (Tables)
SHORT-TERM BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of information regarding repurchase agreements | The following table summarizes information regarding repurchase agreements outstanding at December 31, 2017: At or for the year ended December 31, 2017 (In thousands) Balance outstanding at end of year $ 11,650 Maximum amount outstanding during year 30,880 Average amount outstanding during year 18,418 Weighted average interest rate at end of year 0.10 % Amortized cost of collateral pledged at end of year 63,193 Fair value of collateral pledged at end of year 65,157 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of advances collateralized by lien | The following advances are collateralized by a blanket lien on our residential real estate loans and certain eligible commercial real estate loans. Amount Weighted Average Rate 2018 2017 2018 2017 (In thousands) Fixed-rate advances maturing: 2018 $ — $ 54,652 — % 2.0 % 2019 81,891 49,105 2.3 2.0 2020 84,269 40,535 2.2 1.9 2021 31,766 4,434 2.6 1.0 2022 9,461 5,325 2.2 1.4 2024 631 735 2.6 2.6 208,018 154,786 2.3 1.9 Variable-rate advances maturing: 2018 — 10,000 — 1.4 Total long-term advances $ 208,018 $ 164,786 2.3 % 1.9 % |
STOCK PLANS AND EMPLOYEE STOC_2
STOCK PLANS AND EMPLOYEE STOCK OWNERSHIP PLAN (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock option activity | A summary of the status of our stock options at December 31, 2018 is presented below: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2017 257,050 $ 6.31 4.41 $ 1,175 Exercised (18,975 ) 6.03 3.80 89 Outstanding at December 31, 2018 238,075 $ 6.33 3.44 $ 877 Exercisable at December 31, 2018 238,075 $ 6.33 3.44 $ 877 |
Schedule of original and adjusted threshold and target metrics | The original and adjusted threshold and target metrics under the 2016 Plan are as follows: Return on Equity Metrics Threshold Target Original metrics 5.85 % 6.32 % Adjusted metrics 6.38 % 6.79 % The original and adjusted threshold, target and maximum metrics under the 2017 Plan are as follows: Return on Equity Metrics Performance Period Ending Original Threshold Adjusted Threshold Original Target Adjusted Target Original Maximum Adjusted Maximum December 31, 2018 6.30 % 6.87 % 7.00 % 7.63 % 7.60 % 8.28 % December 31, 2019 6.50 % 7.09 % 7.20 % 7.85 % 7.90 % 8.61 % The threshold, target and stretch metrics under the 2018 LTI Plan are as follows: Return on Equity Metrics Performance Period Ending Threshold Target Stretch December 31, 2018 6.30 % 6.80 % 7.20 % December 31, 2019 6.85 % 7.35 % 7.75 % December 31, 2020 7.40 % 7.90 % 8.30 % |
Schedule of stock award plan activity | A summary of the status of restricted stock awards at December 31, 2018 is presented below: Shares Weighted Average Grant Date Fair Value Balance at December 31, 2017 138,833 $ 8.98 Shares granted 83,812 11.05 Shares vested (62,726 ) 9.44 Shares forfeited (4,207 ) 10.63 Balance at December 31, 2018 155,712 $ 9.87 |
Schedule of the remaining principal balance payable | At December 31, 2018, the remaining principal balances are payable as follows: Years Ending December 31, Amount (In thousands) 2019 $ 447 2020 447 2021 447 2022 447 2023 447 Thereafter 4,184 Total $ 6,419 |
Schedule of shares held by ESOP | Shares held by the ESOP include the following at December 31, 2018 and 2017: 2018 2017 Allocated 936,522 899,969 Committed to be allocated 90,978 93,679 Unallocated 700,124 791,102 Total 1,727,624 1,784,750 |
RETIREMENT PLANS AND EMPLOYEE_2
RETIREMENT PLANS AND EMPLOYEE BENEFITS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Defined Benefit Plan [Abstract] | |
Schedule of information for plan | The following table provides information for the Plan at or for the years ended December 31: Years Ended December 31, 2018 2017 2016 (In thousands) Change in benefit obligation: Benefit obligation at beginning of year $ 29,345 $ 25,819 $ 22,458 Service cost 1,269 1,139 1,130 Interest 1,012 1,002 959 Actuarial (gain) loss (3,887 ) 1,987 1,846 Benefits paid (430 ) (602 ) (574 ) Benefit obligation at end of year 27,309 29,345 25,819 Change in plan assets: Fair value of plan assets at beginning of year 19,215 16,498 15,233 Actual (loss) return on plan assets (1,192 ) 2,519 1,039 Employer contribution 800 800 800 Benefits paid (430 ) (602 ) (574 ) Fair value of plan assets at end of year 18,393 19,215 16,498 Funded status and accrued benefit at end of year $ (8,916 ) $ (10,130 ) $ (9,321 ) Accumulated benefit obligation at end of year $ 21,449 $ 21,930 $ 19,027 |
Schedule of actuarial assumptions used in determining the pension benefit obligation | The following actuarial assumptions were used in determining the pension benefit obligation: December 31, 2018 2017 Discount rate 4.25 % 3.60 % Rate of compensation increase 4.00 4.00 |
Schedule of net pension benefit costs | Net pension cost includes the following components for the years ended December 31: 2018 2017 2016 (In thousands) Service cost $ 1,269 $ 1,139 $ 1,130 Interest cost 1,012 1,002 959 Expected return on assets (1,387 ) (1,194 ) (1,097 ) Amortization of actuarial loss 170 124 102 Net periodic pension cost $ 1,064 $ 1,071 $ 1,094 |
Schedule of actuarial assumptions used in determining the service costs | The following actuarial assumptions were used in determining the net periodic pension cost for the years ended December 31: 2018 2017 2016 Discount rate 3.60 % 4.15 % 4.35 % Expected return on plan assets 7.50 7.50 7.50 Rate of compensation increase 4.00 4.00 4.00 |
Schedule of investments of pension plan assets | The following is a summary of the Plan’s investments for the years ended December 31: 2018 2017 (In thousands) Pooled separate investment accounts: Fixed income $ 10,559 $ 10,355 Large U.S. equity 4,365 5,080 International equity 2,368 2,518 Small/mid U.S. equity 734 877 Balanced/asset allocation 367 385 Total $ 18,393 $ 19,215 |
Schedule of investments for which fair value measured using NAV for pension plan assets | The following table summarizes the investments for which fair value is measured using NAV per share as a practical expedient for the years ended December 31, 2018 and 2017. There are no pertinent redemption restrictions for these investments; the redemption notice period is applicable only to the Plan. Fair Value Unfunded Commitments Redemption Frequency (if Currently Eligible) Redemption Notice Period (In thousands) December 31, 2018 $ 18,393 n/a Daily 1 day December 31, 2017 $ 19,215 n/a Daily 1 day |
Schedule of estimated benefits to be paid from the pension plan | We estimate that the benefits to be paid from the pension plan for years ended December 31 are as follows: Year Benefit Payments to Participants (In thousands) 2019 $ 857 2020 1,083 2021 1,195 2022 1,549 2023 1,477 In aggregate for 2024 – 2028 14,502 |
DERIVATIVES AND HEDGING ACTIV_2
DERIVATIVES AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair values of derivative financial instruments | 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 December 31, 2018. December 31, 2018 Asset Derivatives Liability Derivatives Balance Sheet Location Fair Value Balance Sheet Location Fair Value (In thousands) Interest rate swaps Other Assets $ — Other Liabilities $ 1,259 Total derivatives designated as hedging instruments $ — $ 1,259 December 31, 2017 Asset Derivatives Liability Derivatives Balance Sheet Location Fair Value Balance Sheet Location Fair Value (In thousands) Interest rate swaps Other Assets $ — Other Liabilities $ 2,152 Total derivatives designated as hedging instruments $ — $ 2,152 |
Schedule of information about cash flow hedges | The following table presents information about our cash flow hedges at December 31, 2018 and 2017: December 31, 2018 Notional Weighted Average Weighted Average Rate Estimated Fair Amount Maturity Receive Pay Value (In thousands) (In years) (In thousands) Interest rate swaps on FHLB borrowings $ 35,000 3.7 2.79 % 3.54 % $ (1,259 ) Total cash flow hedges $ 35,000 3.7 $ (1,259 ) December 31, 2017 Notional Weighted Average Weighted Average Rate Estimated Fair Amount Maturity Received Paid Value (In thousands) (In years) (In thousands) Interest rate swaps on FHLB borrowings $ 55,000 3.3 1.64 % 2.93 % $ (2,152 ) Total cash flow hedges $ 55,000 3.3 $ (2,152 ) |
Schedule of pre-tax net losses of cash flow hedges | The table below presents the pre-tax net loss of our cash flow hedges for the periods indicated. Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) Years Ended December 31, 2018 2017 2016 (In thousands) Interest rate swaps $ 442 $ 31 $ (1,126 ) |
REGULATORY CAPITAL (Tables)
REGULATORY CAPITAL (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Banking and Thrift [Abstract] | |
Schedule of actual capital ratios | Our actual capital ratios of December 31, 2018 and December 31, 2017 are also presented in the following table. Minimum To Be Well Minimum For Capital Capitalized Under Prompt Actual Adequacy Purpose Corrective Action Provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) December 31, 2018 Total Capital (to Risk Weighted Assets): Consolidated $ 247,361 14.87 % $ 133,089 8.00 % N/A N/A Bank 235,569 14.18 132,892 8.00 $ 166,115 10.00 % Tier 1 Capital (to Risk Weighted Assets): Consolidated 235,308 14.14 99,817 6.00 N/A N/A Bank 223,516 13.46 99,669 6.00 132,892 8.00 Common Equity Tier 1 Capital (to Risk Weighted Assets): Consolidated 235,308 14.14 74,862 4.50 N/A N/A Bank 223,516 13.46 74,752 4.50 107,974 6.50 Tier 1 Leverage Ratio (to Adjusted Average Assets): Consolidated 235,308 11.14 84,497 4.00 N/A N/A Bank 223,516 10.59 84,465 4.00 105,581 5.00 December 31, 2017 Total Capital (to Risk Weighted Assets): Consolidated $ 255,605 15.53 % $ 131,711 8.00 % N/A N/A Bank 245,380 14.94 131,367 8.00 $ 164,208 10.00 % Tier 1 Capital (to Risk Weighted Assets): Consolidated 244,774 14.87 98,783 6.00 N/A N/A Bank 234,549 14.28 98,525 6.00 131,367 8.00 Common Equity Tier 1 Capital (to Risk Weighted Assets): Consolidated 244,774 14.87 74,087 4.50 N/A N/A Bank 234,549 14.28 73,894 4.50 106,735 6.50 Tier 1 Leverage Ratio (to Adjusted Average Assets): Consolidated 244,774 11.84 82,702 4.00 N/A N/A Bank 234,549 11.36 82,584 4.00 103,230 5.00 |
Schedule of reconciliation of capital to regulatory Tier 1, Common Equity Tier 1 and total capital | The following is a reconciliation of our GAAP capital to regulatory Tier 1, Common Equity Tier 1 and total capital: December 31, 2018 2017 (In thousands) Consolidated GAAP capital $ 237,029 $ 247,281 Net unrealized losses on available-for-sale securities, net of tax 7,400 4,042 Unrealized loss on defined benefit pension plan, net of tax 3,246 4,329 Accumulated net loss on cash flow hedges, net of tax 2,770 4,181 Unrealized loss on certain available-for-sale equity securities — (236 ) Goodwill (12,487 ) (12,487 ) Intangible assets, net of associated deferred tax liabilities (2,652 ) (2,336 ) Tier 1 and Common Equity Tier 1 capital 235,308 244,774 Allowance for loan losses 12,053 10,831 Total regulatory capital $ 247,361 $ 255,605 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of income taxes | Income taxes consist of the following: Years Ended December 31, 2018 2017 2016 (In thousands) Current tax provision: Federal $ 3,910 $ 1,505 $ 1,925 State 1,586 581 370 Total 5,496 2,086 2,295 Deferred tax (benefit) provision: Federal (542 ) 7,613 262 State (254 ) 702 10 Change in valuation reserve — (973 ) 2 Total (796 ) 7,342 274 Total $ 4,700 $ 9,428 $ 2,569 |
Schedule of differences between statutory federal income tax rate and effective rates | The reasons for the differences between the statutory federal income tax rate and the effective rates are summarized below: Years Ended December 31, 2018 2017 2016 Statutory federal income tax rate 21.0 % 35.0 % 34.0 % Increase (decrease) resulting from: State taxes, net of federal tax benefit 5.0 3.2 3.4 Tax exempt income (1.8 ) (2.8 ) (2.6 ) Bank-owned life insurance (BOLI) (1.8 ) (2.9 ) (7.2 ) Nondeductible merger expenses — 0.1 8.3 Change in valuation reserve — (4.5 ) — Option exercise tax benefit (0.1 ) (3.2 ) — Effect of tax rate change — 18.4 — Other, net — — (1.2 ) Effective tax rate 22.3 % 43.3 % 34.7 % |
Schedule of deferred taxes | The tax effects of each item that gives rise to deferred taxes are as follows: December 31, 2018 2017 (In thousands) Deferred tax assets: Allowance for loan losses $ 3,388 $ 3,045 Net unrealized loss on derivative and hedging activity 1,084 1,635 Employee benefit and share-based compensation plans 2,233 2,184 Defined benefit plan 1,270 1,692 Net unrealized loss on securities available for sale 2,491 1,316 Other-than-temporary impairment write-down — 91 Purchased mortgage servicing rights 293 344 Nonaccrual interest 674 487 Other 777 509 Gross deferred tax assets 12,210 11,303 Deferred tax liabilities: Deferred loan fees (1,122 ) (1,226 ) Hedge termination payments (729 ) (1,030 ) Purchase accounting adjustments, net (416 ) (234 ) Other (71 ) (29 ) Gross deferred tax liabilities (2,338 ) (2,519 ) Net deferred tax asset $ 9,872 $ 8,784 |
TRANSACTIONS WITH DIRECTORS A_2
TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of activity for loans - directors and executive officers | Following is a summary of activity for such loans: Years Ended December 31, 2018 2017 (In thousands) Balance at beginning of year $ 1,631 $ 1,475 Principal distributions 837 1,034 Repayments of principal (1,513 ) (878 ) Balance at end of year $ 955 $ 1,631 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of financial instruments and other commitments and contingent liabilities | The following summarizes these financial instruments and other commitments and contingent liabilities at their contract amounts: December 31, 2018 2017 (In thousands) Commitments to extend credit: Unused lines of credit $ 259,009 $ 229,436 Loan commitments 53,199 40,878 Existing construction loan agreements 45,339 42,555 Standby letters of credit 11,370 9,138 |
Schedule of aggregate future minimum rental payments | Aggregate future minimum rental payments under the terms of non-cancelable operating leases at December 31, 2018, are as follows: Years Ending December 31, Amount (In thousands) 2019 $ 1,128 2020 995 2021 915 2022 887 2023 700 Thereafter 4,340 Total $ 8,965 |
FAIR VALUE OF ASSETS AND LIAB_2
FAIR VALUE OF ASSETS AND LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on recurring basis | Assets and liabilities measured at fair value on a recurring basis are summarized below: December 31, 2018 Level 1 Level 2 Level 3 Total Assets: (In thousands) Government-sponsored mortgage-backed securities $ — $ 159,351 $ — $ 159,351 U.S. government guaranteed mortgage-backed securities — 19,338 — 19,338 Corporate bonds — 48,168 — 48,168 State and municipal bonds — 2,944 — 2,944 Government-sponsored enterprise obligations — 23,947 — 23,947 Marketable equity securities 6,408 — — 6,408 Total assets $ 6,408 $ 253,748 $ — $ 260,156 Liabilities: Interest rate swaps $ — $ 1,259 $ — $ 1,259 December 31, 2017 Level 1 Level 2 Level 3 Total Assets: (In thousands) Government-sponsored mortgage-backed securities $ — $ 182,001 $ — $ 182,001 U.S. government guaranteed mortgage-backed securities — 16,254 — 16,254 Corporate bonds — 56,144 — 56,144 State and municipal bonds — 3,239 — 3,239 Government-sponsored enterprise obligations — 24,381 — 24,381 Mutual funds 6,397 — — 6,397 Total assets $ 6,397 $ 282,019 $ — $ 288,416 Liabilities: Interest rate swaps $ — $ 2,152 $ — $ 2,152 |
Schedule of assets measured at fair value on non-recurring basis | The following table summarizes the fair value hierarchy used to determine the carrying values of the related assets as of December 31, 2018 and 2017. Year Ended At December 31, 2018 December 31, 2018 Total Level 1 Level 2 Level 3 Losses (In thousands) (In thousands) Impaired Loans $ — $ — $ 1,676 $ 612 Year Ended At December 31, 2017 December 31, 2017 Total Level 1 Level 2 Level 3 Losses (In thousands) (In thousands) Impaired Loans $ — $ — $ 1,495 $ 256 |
Schedule of estimated fair values of financial instruments | The estimated fair values of our financial instruments are as follows: December 31, 2018 Carrying Value Fair Value Level 1 Level 2 Level 3 Total (In thousands) Assets: Cash and cash equivalents $ 26,789 $ 26,789 $ — $ — $ 26,789 Securities available-for-sale 253,748 — 253,748 — 253,748 Marketable equity securities 6,408 6,408 — — 6,408 Federal Home Loan Bank of Boston and other restricted stock 14,695 — — 14,695 14,695 Loans - net 1,684,804 — — 1,631,558 1,631,558 Accrued interest receivable 5,652 — — 5,652 5,652 Mortgage servicing rights 286 — 456 — 456 Liabilities: Deposits 1,595,993 — — 1,592,521 1,592,521 Short-term borrowings 59,250 — 59,247 — 59,247 Long-term debt 208,018 — 206,789 — 206,789 Accrued interest payable 530 — — 530 530 Derivative liabilities 1,259 — 1,259 — 1,259 December 31, 2017 Carrying Value Fair Value Level 1 Level 2 Level 3 Total (In thousands) Assets: Cash and cash equivalents $ 27,132 $ 27,132 $ — $ — $ 27,132 Securities available-for-sale 288,416 6,397 282,019 — 288,416 Federal Home Loan Bank of Boston and other restricted stock 15,553 — — 15,553 15,553 Loans - net 1,619,850 — — 1,581,929 1,581,929 Accrued interest receivable 5,946 — — 5,946 5,946 Mortgage servicing rights 352 — 528 — 528 Liabilities: Deposits 1,506,082 — — 1,503,311 1,503,311 Short-term borrowings 144,650 — 144,650 — 144,650 Long-term debt 164,786 — 164,016 — 164,016 Accrued interest payable 441 — — 441 441 Derivative liabilities 2,152 — 2,152 — 2,152 |
CONDENSED PARENT COMPANY FINA_2
CONDENSED PARENT COMPANY FINANCIAL STATEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of condensed balance sheets | The condensed balance sheets of the parent company are as follows: December 31, 2018 2017 (In thousands) ASSETS: Cash equivalents $ 74 $ 120 Investment in subsidiaries 225,238 237,056 ESOP loan receivable 6,419 7,135 Other assets 12,164 10,529 TOTAL ASSETS 243,895 254,840 LIABILITIES: ESOP loan payable 6,419 7,135 Other liabilities 447 424 EQUITY 237,029 247,281 TOTAL LIABILITIES AND EQUITY $ 243,895 $ 254,840 |
Schedule of condensed statements of income | The condensed statements of income for the parent company are as follows: Years Ended December 31, 2018 2017 2016 (In thousands) INCOME: Dividends from subsidiaries $ 28,712 $ 8,561 $ 3,499 Interest income from securities — — 32 ESOP loan interest income 571 629 670 Gain on sales of securities, net — — 451 Other income 1 4 — Total income 29,284 9,194 4,652 OPERATING EXPENSE: Salaries and employee benefits 1,837 1,646 926 ESOP interest 571 629 670 Other expenses 286 298 507 Total operating expense 2,694 2,573 2,103 Income before equity in undistributed income of subsidiaries and income taxes 26,590 6,621 2,549 Equity in undistributed (loss) income of subsidiaries (10,717 ) 4,188 1,955 Net income before taxes 15,873 10,809 4,504 Income tax benefit (535 ) (1,511 ) (330 ) Net income $ 16,408 $ 12,320 $ 4,834 |
Schedule of condensed statements of cash flows | The condensed statements of cash flows of the parent company are as follows: Years Ended December 31, 2018 2017 2016 (In thousands) OPERATING ACTIVITIES: Net income $ 16,408 $ 12,320 $ 4,834 Equity in undistributed loss (income) of subsidiaries 10,717 (4,188 ) (1,955 ) Gain on sales of securities, net — — (451 ) Change in other liabilities (610 ) (833 ) (597 ) Change in other assets (919 ) (2,330 ) (271 ) Other, net 1,805 1,607 1,049 Net cash provided by operating activities 27,401 6,576 2,609 INVESTING ACTIVITIES: Purchase of securities (127 ) (106 ) (116 ) Sales of securities 127 106 116 Net cash provided by investing activities — — — FINANCING ACTIVITIES: Cash dividends paid (4,641 ) (3,579 ) (2,439 ) Common stock repurchased (22,920 ) (9,314 ) (1,378 ) Excess tax benefit from share-based compensation — — 156 Issuance of common stock in connection with stock option exercises 114 5,465 1,971 Net cash used in financing activities (27,447 ) (7,428 ) (1,690 ) NET CHANGE IN CASH AND CASH EQUIVALENTS (46 ) (852 ) 919 CASH AND CASH EQUIVALENTS Beginning of year 120 972 53 End of year $ 74 $ 120 $ 972 Supplemental cash flow information: Net change in due to broker for common stock repurchased $ (83 ) $ (151 ) $ 455 |
SUMMARY OF QUARTERLY FINANCIA_2
SUMMARY OF QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of quarterly financial information | The following tables present a summary of our quarterly financial information for the periods indicated. The year-to-date totals may differ slightly due to rounding. All unaudited interim financial statements furnished shall reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for interim periods presented and are of a normal and recurring nature, unless otherwise noted. 2018 First Quarter Second Quarter Third Quarter Fourth Quarter (Dollars in thousands, except per share amounts) Interest and dividend income $ 18,732 $ 20,464 $ 19,605 $ 20,189 Interest expense 4,010 4,599 5,000 5,369 Net interest and dividend income 14,722 15,865 14,605 14,820 Provision for loan losses 500 750 350 300 Gain on disposal of other real estate owned 48 — — — Loss on available-for-sale securities, net (201 ) (49 ) — (31 ) Unrealized (losses) gains on marketable equity securities (106 ) (41 ) (43 ) 48 Swap fee income — 131 — — Bank-owned life insurance death benefit — 715 — — Other non-interest income 2,025 2,177 2,339 2,221 Non-interest income 1,766 2,933 2,296 2,238 Non-interest expense 11,426 11,546 11,572 11,693 Income before income taxes 4,562 6,502 4,979 5,065 Income tax provision 1,043 1,364 1,070 1,223 Net income $ 3,519 $ 5,138 $ 3,909 $ 3,842 Basic earnings per share $ 0.12 $ 0.18 $ 0.14 $ 0.14 Diluted earnings per share $ 0.12 $ 0.18 $ 0.14 $ 0.14 2017 First Quarter Second Quarter Third Quarter Fourth Quarter (Dollars in thousands, except per share amounts) Interest and dividend income $ 17,957 $ 18,327 $ 18,516 $ 19,239 Interest expense 3,454 3,584 3,720 3,887 Net interest and dividend income 14,503 14,743 14,796 15,352 Provision for loan losses 350 350 200 510 Gain (loss) on disposal of other real estate owned — — 67 (58 ) Gain (loss) on sales of securities, net (64 ) 46 70 — Swap fee income 116 — 111 — Other non-interest income 1,965 2,029 2,164 2,055 Non-interest income 2,017 2,075 2,412 1,997 Non-interest expense 10,970 11,296 11,156 11,364 Income before income taxes 5,250 5,172 5,852 5,475 Income tax provision (1) 147 1,416 2,037 5,828 Net income (loss) $ 5,103 $ 3,756 $ 3,815 $ (353 ) Basic earnings per share $ 0.17 $ 0.13 $ 0.13 $ (0.01 ) Diluted earnings per share $ 0.17 $ 0.12 $ 0.13 $ (0.01 ) (1) Increase in the quarter ended December 31, 2017 is due to the enactment of the Tax Act on December 22, 2017. |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Building [Member] | |
Estimated useful lives | 39 years |
Leasehold Improvements [Member] | Minimum [Member] | |
Estimated useful lives | 5 years |
Leasehold Improvements [Member] | Maximum [Member] | |
Estimated useful lives | 20 years |
Furniture And Equipment [Member] | Minimum [Member] | |
Estimated useful lives | 3 years |
Furniture And Equipment [Member] | Maximum [Member] | |
Estimated useful lives | 7 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||||||||||
Net income applicable to common stock | $ 3,842 | $ 3,909 | $ 5,138 | $ 3,519 | $ (353) | $ 3,815 | $ 3,756 | $ 5,103 | $ 16,408 | $ 12,320 | $ 4,834 |
Average number of common shares issued | 29,734,000 | 30,755,000 | 20,659,000 | ||||||||
Less: Average unallocated ESOP Shares | (757,000) | (849,000) | (935,000) | ||||||||
Less: Average unvested equity incentive plan shares | (90,000) | (47,000) | (16,000) | ||||||||
Average number of common shares outstanding used to calculate basic earnings per common share | 28,886,904 | 29,858,984 | 19,707,948 | ||||||||
Effect of dilutive equity incentive plan | 46,000 | 17,000 | 3,000 | ||||||||
Effect of dilutive stock options | 96,000 | 151,000 | 93,000 | ||||||||
Average number of common shares outstanding used to calculate diluted earnings per common share | 29,029,394 | 30,026,638 | 19,803,744 | ||||||||
Basic earnings per share (in dollars per share) | $ 0.14 | $ 0.14 | $ 0.18 | $ 0.12 | $ (0.01) | $ 0.13 | $ 0.13 | $ 0.17 | $ 0.57 | $ 0.41 | $ 0.25 |
Diluted earnings per share (in dollars per share) | $ 0.14 | $ 0.14 | $ 0.18 | $ 0.12 | $ (0.01) | $ 0.13 | $ 0.12 | $ 0.17 | $ 0.57 | $ 0.41 | $ 0.24 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Accumulated other comprehensive income (loss), net of tax amount | $ (13,416) | $ (12,552) | $ (12,661) |
Securities [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Accumulated other comprehensive income (loss) before tax | (9,891) | (5,358) | |
Tax effect | 2,491 | 1,316 | |
Accumulated other comprehensive income (loss), net of tax amount | (7,400) | (4,042) | (3,839) |
Derivatives [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Fair value of derivatives used for cash flow hegdes | (1,259) | (2,152) | |
Derivative Termination fee on cancelled cash flow hedges | (2,595) | (3,664) | |
Accumulated other comprehensive income (loss) before tax | (3,854) | (5,816) | |
Tax effect | 1,084 | 1,635 | |
Accumulated other comprehensive income (loss), net of tax amount | (2,770) | (4,181) | (5,204) |
Defined Benefit Plan [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Accumulated other comprehensive income (loss) before tax | (4,516) | (6,021) | |
Tax effect | 1,270 | 1,692 | |
Accumulated other comprehensive income (loss), net of tax amount | $ (3,246) | $ (4,329) | $ (3,618) |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | $ (12,552) | $ (12,661) | |
Cumulative-effect adjustment due to change in accounting principle | 237 | (2,126) | |
Current-period other comprehensive (loss) income | (1,101) | 2,235 | $ (1,683) |
Ending balance | (13,416) | (12,552) | (12,661) |
Securities [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | (4,042) | (3,839) | |
Cumulative-effect adjustment due to change in accounting principle | 237 | (686) | |
Current-period other comprehensive (loss) income | (3,595) | 483 | |
Ending balance | (7,400) | (4,042) | (3,839) |
Derivatives [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | (4,181) | (5,204) | |
Cumulative-effect adjustment due to change in accounting principle | (741) | ||
Current-period other comprehensive (loss) income | 1,411 | 1,764 | |
Ending balance | (2,770) | (4,181) | (5,204) |
Defined Benefit Plan [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | (4,329) | (3,618) | |
Cumulative-effect adjustment due to change in accounting principle | (699) | ||
Current-period other comprehensive (loss) income | 1,083 | (12) | |
Ending balance | $ (3,246) | $ (4,329) | $ (3,618) |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | Jan. 02, 2019USD ($) | Oct. 21, 2016USD ($)$ / sharesshares | Dec. 31, 2018USD ($)Number | Jun. 29, 2018$ / shares | Dec. 31, 2017USD ($) |
Share price | $ / shares | $ 11 | ||||
Actuarial loss expected to be recognized in net periodic pension costs in 2019 | $ 124,000 | ||||
Future lease payments outstanding | 8,965,000 | ||||
Total assets | 2,118,822,000 | $ 2,083,070,000 | |||
Total loans | $ 208,018,000 | $ 164,786,000 | |||
Subsequent Event [Member] | |||||
Increase in assets due to adoption of new accounting standard | $ 7,200,000 | ||||
Increase in liabilities due to adoption of new accounting standard | 7,200,000 | ||||
Debt securities of adoption new accounting standard | $ 10,400 | ||||
401 (k) [Member] | |||||
Maximum percentage of participant's annual earnings subject to match by employer for 401(K) plan | 6.00% | ||||
Employer matching contribution for the first 6% of each participant's annual earnings | 50.00% | ||||
Chicopee Bancorp Inc [Member] | |||||
Number of shares issued (in shares) | shares | 11,919,412 | ||||
Share price | $ / shares | $ 7.90 | ||||
Transaction cost | $ 98,800,000 | ||||
Total assets | 716,600,000 | ||||
Total deposits | 545,700,000 | ||||
Total loans | $ 640,900,000 | ||||
Massachusetts and Granby and Enfield, Connecticut [Member] | |||||
Number of banking offices in which bank operates | Number | 22 |
INVESTMENT SECURITIES (Details)
INVESTMENT SECURITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | ||
Available-for-sale securities: | ||||
Amortized Cost | $ 263,639 | [1] | $ 293,774 | |
Gross Unrealized Gains | 35 | [1] | 398 | |
Gross Unrealized Losses | (9,926) | [1] | (5,756) | |
Fair Value | 253,748 | [1] | 288,416 | |
Government-Sponsored Enterprise Obligations [Member] | ||||
Available-for-sale securities: | ||||
Amortized Cost | 25,150 | 25,151 | ||
Gross Unrealized Losses | (1,203) | (770) | ||
Fair Value | 23,947 | 24,381 | ||
State And Municipal Bonds [Member] | ||||
Available-for-sale securities: | ||||
Amortized Cost | 2,976 | 3,222 | ||
Gross Unrealized Gains | 33 | 36 | ||
Gross Unrealized Losses | (65) | (19) | ||
Fair Value | 2,944 | 3,239 | ||
Corporate Bonds [Member] | ||||
Available-for-sale securities: | ||||
Amortized Cost | 49,819 | 56,084 | ||
Gross Unrealized Gains | 352 | |||
Gross Unrealized Losses | (1,651) | (292) | ||
Fair Value | 48,168 | 56,144 | ||
Debt Securities [Member] | ||||
Available-for-sale securities: | ||||
Amortized Cost | 77,945 | 84,457 | ||
Gross Unrealized Gains | 33 | 388 | ||
Gross Unrealized Losses | (2,919) | (1,081) | ||
Fair Value | 75,059 | 83,764 | ||
Collateralized Mortgage Backed Securities [Member] | ||||
Available-for-sale securities: | ||||
Amortized Cost | 185,694 | 202,590 | ||
Gross Unrealized Gains | 2 | 10 | ||
Gross Unrealized Losses | (7,007) | (4,345) | ||
Fair Value | 178,689 | 198,255 | ||
Mutual Funds [Member] | ||||
Available-for-sale securities: | ||||
Amortized Cost | [1] | 6,727 | ||
Gross Unrealized Losses | [1] | (330) | ||
Fair Value | [1] | 6,397 | ||
Government-Sponsored Mortgage-Backed Securities [Member] | ||||
Available-for-sale securities: | ||||
Amortized Cost | 165,605 | 185,769 | ||
Gross Unrealized Gains | 1 | 10 | ||
Gross Unrealized Losses | (6,255) | (3,778) | ||
Fair Value | 159,351 | 182,001 | ||
US Government Guaranteed Mortgage-Backed Securities [Member] | ||||
Available-for-sale securities: | ||||
Amortized Cost | 20,089 | 16,821 | ||
Gross Unrealized Gains | 1 | |||
Gross Unrealized Losses | (752) | (567) | ||
Fair Value | $ 19,338 | $ 16,254 | ||
[1] | Does not include investments in restricted stock consisting of $14.7 million and $15.6 million at December 31, 2018 and December 31, 2017, respectively. |
INVESTMENT SECURITIES (Details
INVESTMENT SECURITIES (Details 1) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Investments [Line Items] | |||
Available for Sale Securities, Amortized Cost, Total | $ 263,639 | [1] | $ 293,774 |
Available for Sale Securities, Fair Value, Total | 253,748 | ||
Debt Securities [Member] | |||
Schedule of Investments [Line Items] | |||
Available for Sale Securities, Amortized Cost, Due in one year or less | 240 | ||
Available for Sale Securities, Amortized Cost, Due after one year through five years | 40,864 | ||
Available for Sale Securities, Amortized Cost, Due after five years through ten years | 30,094 | ||
Available for Sale Securities, Amortized Cost, Due after ten years | 6,747 | ||
Available for Sale Securities, Amortized Cost, Total | 77,945 | ||
Available for Sale Securities, Fair Value, Due in one year or less | 241 | ||
Available for Sale Securities, Fair Value, Due after one year through five years | 39,846 | ||
Available for Sale Securities, Fair Value, Due after five years through ten years | 28,561 | ||
Available for Sale Securities, Fair Value, Due after ten years | 6,411 | ||
Available for Sale Securities, Fair Value, Total | 75,059 | ||
Collateralized Mortgage Backed Securities [Member] | |||
Schedule of Investments [Line Items] | |||
Available for Sale Securities, Amortized Cost, Total | 185,694 | $ 202,590 | |
Available for Sale Securities, Fair Value, Total | $ 178,689 | ||
[1] | Does not include investments in restricted stock consisting of $14.7 million and $15.6 million at December 31, 2018 and December 31, 2017, respectively. |
INVESTMENT SECURITIES (Detail_2
INVESTMENT SECURITIES (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |||
Gross gains realized | $ 117 | $ 1,976 | |
Gross losses realized | $ (281) | (65) | (837) |
Net gain realized | $ (281) | $ 52 | $ 1,139 |
INVESTMENT SECURITIES (Detail_3
INVESTMENT SECURITIES (Details 3) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Available for sale, Less Than 12 Months Gross Unrealized Losses | $ 199 | $ 928 |
Available for sale, Less Than 12 Months Fair Value | 20,178 | 95,759 |
Available for sale, Over 12 Months Gross Unrealized Losses | 9,727 | 4,828 |
Available for sale, Over 12 Months Fair Value | 227,083 | 159,003 |
Government-Sponsored Mortgage-Backed Securities [Member] | ||
Available for sale, Less Than 12 Months Gross Unrealized Losses | 74 | 613 |
Available for sale, Less Than 12 Months Fair Value | 7,354 | 68,538 |
Available for sale, Over 12 Months Gross Unrealized Losses | 6,181 | 3,165 |
Available for sale, Over 12 Months Fair Value | 148,762 | 111,595 |
Corporate Bonds [Member] | ||
Available for sale, Less Than 12 Months Gross Unrealized Losses | 110 | 292 |
Available for sale, Less Than 12 Months Fair Value | 9,995 | 26,016 |
Available for sale, Over 12 Months Gross Unrealized Losses | 1,541 | |
Available for sale, Over 12 Months Fair Value | 38,173 | |
States and Municipal Bonds [Member] | ||
Available for sale, Over 12 Months Gross Unrealized Losses | 65 | 19 |
Available for sale, Over 12 Months Fair Value | 1,532 | 1,581 |
Government-Sponsored Enterprise Obligations [Member] | ||
Available for sale, Over 12 Months Gross Unrealized Losses | 1,203 | 770 |
Available for sale, Over 12 Months Fair Value | 23,947 | 24,381 |
Mutual Funds [Member] | ||
Available for sale, Over 12 Months Gross Unrealized Losses | 330 | |
Available for sale, Over 12 Months Fair Value | 6,397 | |
US Government Guaranteed Mortgage-Backed Securities [Member] | ||
Available for sale, Less Than 12 Months Gross Unrealized Losses | 15 | 23 |
Available for sale, Less Than 12 Months Fair Value | 2,829 | 1,205 |
Available for sale, Over 12 Months Gross Unrealized Losses | 737 | 544 |
Available for sale, Over 12 Months Fair Value | $ 14,669 | $ 15,049 |
INVESTMENT SECURITIES (Detail_4
INVESTMENT SECURITIES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cumulative-effect adjustment due to change in accounting principle (ASU 2016-01) | $ 237 | $ (2,126) | |
Proceeds from redemptions and sales | 12,470 | 22,453 | $ 136,829 |
Investments in restricted stock | 14,695 | 15,553 | |
Government-Sponsored Enterprise Obligations [Member] | |||
Fair value of collateralized public deposits | 6,600 | ||
Collateralized Mortgage Backed Securities [Member] | |||
Fair value of collateralized public deposits | 57,800 | ||
Securities [Member] | |||
Cumulative-effect adjustment due to change in accounting principle (ASU 2016-01) | $ 237 | $ (686) |
LOANS (Details)
LOANS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total gross loans | $ 1,692,456 | $ 1,625,947 | ||
Premiums and deferred loan fees and costs, net | 4,401 | 4,734 | ||
Allowance for loan losses | (12,053) | (10,831) | $ (10,068) | $ (8,840) |
Net loans | 1,684,804 | 1,619,850 | ||
Commercial Real Estate [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total gross loans | 768,881 | 732,616 | ||
Allowance for loan losses | (5,260) | (4,712) | (4,083) | (3,856) |
Residential Real Estate - Residential 1-4 Family [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total gross loans | 577,641 | 557,752 | ||
Residential Real Estate - Home Equity [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total gross loans | 97,238 | 92,599 | ||
Commercial And Industrial [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total gross loans | 243,493 | 238,502 | ||
Allowance for loan losses | (3,114) | (2,733) | (3,085) | (2,485) |
Consumer [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total gross loans | 5,203 | 4,478 | ||
Allowance for loan losses | $ (135) | $ (71) | $ (38) | $ (22) |
LOANS (Details 1)
LOANS (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Servicing Asset | ||
Balance at the beginning of period: | $ 352 | $ 465 |
Amortization | (66) | (113) |
Balance at the end of year | 286 | 352 |
Fair value at the end of year | $ 455 | $ 528 |
LOANS (Details 2)
LOANS (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Beginning Balance | $ 10,831 | $ 10,068 | $ 8,840 |
Provision (credit) | 1,900 | 1,360 | 575 |
Charge-offs | (1,150) | (1,048) | (486) |
Recoveries | 472 | 451 | 1,139 |
Ending Balance | 12,053 | 10,831 | 10,068 |
Commercial Real Estate [Member] | |||
Beginning Balance | 4,712 | 4,083 | 3,856 |
Provision (credit) | 214 | 779 | (668) |
Charge-offs | (35) | (292) | (170) |
Recoveries | 369 | 142 | 1,065 |
Ending Balance | 5,260 | 4,712 | 4,083 |
Residential Real Estate [Member] | |||
Beginning Balance | 3,311 | 2,862 | 2,431 |
Provision (credit) | 863 | 433 | 579 |
Charge-offs | (645) | (148) | (157) |
Recoveries | 27 | 164 | 9 |
Ending Balance | 3,556 | 3,311 | 2,862 |
Commercial And Industrial [Member] | |||
Beginning Balance | 2,733 | 3,085 | 2,485 |
Provision (credit) | 660 | (144) | 575 |
Charge-offs | (299) | (289) | |
Recoveries | 20 | 81 | 25 |
Ending Balance | 3,114 | 2,733 | 3,085 |
Consumer [Member] | |||
Beginning Balance | 71 | 38 | 22 |
Provision (credit) | 179 | 288 | 135 |
Charge-offs | (171) | (319) | (159) |
Recoveries | 56 | 64 | 40 |
Ending Balance | 135 | 71 | 38 |
Unallocated [Member] | |||
Beginning Balance | 4 | 46 | |
Provision (credit) | (16) | 4 | $ (46) |
Ending Balance | $ (12) | $ 4 |
LOANS (Details 3)
LOANS (Details 3) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Amount of allowance for non-impaired loans | $ 12,053 | $ 10,831 | ||
Total allowance for loan losses | 12,053 | 10,831 | $ 10,068 | $ 8,840 |
Impaired loans | 12,396 | 10,524 | ||
Non-impaired loans | 1,665,031 | 1,598,298 | ||
Impaired loans acquired with deteriorated credit quality | 15,029 | 17,125 | ||
Total loans | 1,692,456 | 1,625,947 | ||
Commercial Real Estate [Member] | ||||
Amount of allowance for non-impaired loans | 5,260 | 4,712 | ||
Total allowance for loan losses | 5,260 | 4,712 | 4,083 | 3,856 |
Impaired loans | 5,237 | 3,674 | ||
Non-impaired loans | 752,770 | 716,571 | ||
Impaired loans acquired with deteriorated credit quality | 10,874 | 12,371 | ||
Total loans | 768,881 | 732,616 | ||
Residential Real Estate [Member] | ||||
Amount of allowance for non-impaired loans | 3,556 | 3,311 | ||
Total allowance for loan losses | 3,556 | 3,311 | 2,862 | 2,431 |
Impaired loans | 4,754 | 3,964 | ||
Non-impaired loans | 666,883 | 642,787 | ||
Impaired loans acquired with deteriorated credit quality | 3,242 | 3,600 | ||
Total loans | 674,879 | 650,351 | ||
Commercial And Industrial [Member] | ||||
Amount of allowance for non-impaired loans | 3,114 | 2,733 | ||
Total allowance for loan losses | 3,114 | 2,733 | 3,085 | 2,485 |
Impaired loans | 2,345 | 2,766 | ||
Non-impaired loans | 240,235 | 234,582 | ||
Impaired loans acquired with deteriorated credit quality | 913 | 1,154 | ||
Total loans | 243,493 | 238,502 | ||
Consumer [Member] | ||||
Amount of allowance for non-impaired loans | 135 | 71 | ||
Total allowance for loan losses | 135 | 71 | $ 38 | 22 |
Impaired loans | 60 | 120 | ||
Non-impaired loans | 5,143 | 4,358 | ||
Total loans | 5,203 | 4,478 | ||
Unallocated [Member] | ||||
Amount of allowance for non-impaired loans | (12) | 4 | ||
Total allowance for loan losses | $ (12) | $ 4 | $ 46 |
LOANS (Details 4)
LOANS (Details 4) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Total Past Due | $ 12,495 | $ 12,247 |
Total Current Loans | 1,679,961 | 1,613,700 |
Total loans | 1,692,456 | 1,625,947 |
Non-Accrual Loans | 13,484 | 12,755 |
30-59 Days Past Due [Member] | ||
Total Past Due | 5,142 | 7,374 |
60 - 89 Days Past Due [Member] | ||
Total Past Due | 2,041 | 2,421 |
Greater than 90 Days Past Due [Member] | ||
Total Past Due | 5,312 | 2,452 |
Commercial Real Estate [Member] | ||
Total Past Due | 4,722 | 2,385 |
Total Current Loans | 764,159 | 730,231 |
Total loans | 768,881 | 732,616 |
Non-Accrual Loans | 4,701 | 2,959 |
Commercial Real Estate [Member] | 30-59 Days Past Due [Member] | ||
Total Past Due | 1,857 | 1,951 |
Commercial Real Estate [Member] | 60 - 89 Days Past Due [Member] | ||
Total Past Due | 144 | |
Commercial Real Estate [Member] | Greater than 90 Days Past Due [Member] | ||
Total Past Due | 2,865 | 290 |
Residential Real Estate - Residential 1-4 Family [Member] | ||
Total Past Due | 4,249 | 6,383 |
Total Current Loans | 573,392 | 551,369 |
Total loans | 577,641 | 557,752 |
Non-Accrual Loans | 5,856 | 5,961 |
Residential Real Estate - Residential 1-4 Family [Member] | 30-59 Days Past Due [Member] | ||
Total Past Due | 1,798 | 2,992 |
Residential Real Estate - Residential 1-4 Family [Member] | 60 - 89 Days Past Due [Member] | ||
Total Past Due | 572 | 1,480 |
Residential Real Estate - Residential 1-4 Family [Member] | Greater than 90 Days Past Due [Member] | ||
Total Past Due | 1,879 | 1,911 |
Residential Real Estate - Home Equity [Member] | ||
Total Past Due | 847 | 683 |
Total Current Loans | 96,391 | 91,916 |
Total loans | 97,238 | 92,599 |
Non-Accrual Loans | 391 | 696 |
Residential Real Estate - Home Equity [Member] | 30-59 Days Past Due [Member] | ||
Total Past Due | 600 | 635 |
Residential Real Estate - Home Equity [Member] | 60 - 89 Days Past Due [Member] | ||
Total Past Due | 5 | |
Residential Real Estate - Home Equity [Member] | Greater than 90 Days Past Due [Member] | ||
Total Past Due | 242 | 48 |
Commercial And Industrial [Member] | ||
Total Past Due | 2,562 | 2,690 |
Total Current Loans | 240,931 | 235,812 |
Total loans | 243,493 | 238,502 |
Non-Accrual Loans | 2,476 | 3,019 |
Commercial And Industrial [Member] | 30-59 Days Past Due [Member] | ||
Total Past Due | 794 | 1,731 |
Commercial And Industrial [Member] | 60 - 89 Days Past Due [Member] | ||
Total Past Due | 1,463 | 797 |
Commercial And Industrial [Member] | Greater than 90 Days Past Due [Member] | ||
Total Past Due | 305 | 162 |
Consumer [Member] | ||
Total Past Due | 115 | 106 |
Total Current Loans | 5,088 | 4,372 |
Total loans | 5,203 | 4,478 |
Non-Accrual Loans | 60 | 120 |
Consumer [Member] | 30-59 Days Past Due [Member] | ||
Total Past Due | 93 | 65 |
Consumer [Member] | 60 - 89 Days Past Due [Member] | ||
Total Past Due | 1 | |
Consumer [Member] | Greater than 90 Days Past Due [Member] | ||
Total Past Due | $ 21 | $ 41 |
LOANS (Details 5)
LOANS (Details 5) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Total Impaired loans: | |||
Recorded Investment | [1] | $ 27,425 | $ 27,649 |
Unpaid Principal Balance | [1] | 36,021 | 36,198 |
Average Recorded Investment | [1] | 26,703 | 29,685 |
Interest Income Recognized | [1] | 974 | 1,128 |
Commercial Real Estate [Member] | |||
Total Impaired loans: | |||
Recorded Investment | [1] | 16,111 | 16,045 |
Unpaid Principal Balance | [1] | 19,081 | 18,773 |
Average Recorded Investment | [1] | 14,830 | 18,215 |
Interest Income Recognized | [1] | 772 | 842 |
Residential Real Estate [Member] | |||
Total Impaired loans: | |||
Recorded Investment | [1] | 7,558 | 6,816 |
Unpaid Principal Balance | [1] | 8,614 | 7,298 |
Average Recorded Investment | [1] | 7,033 | 6,630 |
Interest Income Recognized | [1] | 51 | 45 |
Residential Real Estate - Home Equity [Member] | |||
Total Impaired loans: | |||
Recorded Investment | [1] | 438 | 748 |
Unpaid Principal Balance | [1] | 468 | 783 |
Average Recorded Investment | [1] | 636 | 359 |
Interest Income Recognized | [1] | 4 | 4 |
Commercial And Industrial [Member] | |||
Total Impaired loans: | |||
Recorded Investment | [1] | 3,258 | 3,920 |
Unpaid Principal Balance | [1] | 7,788 | 9,215 |
Average Recorded Investment | [1] | 4,119 | 4,388 |
Interest Income Recognized | [1] | 147 | 237 |
Consumer [Member] | |||
Total Impaired loans: | |||
Recorded Investment | [1] | 60 | 120 |
Unpaid Principal Balance | [1] | 70 | 129 |
Average Recorded Investment | [1] | $ 85 | $ 93 |
[1] | Includes loans acquired with deteriorated credit quality and performing troubled debt restructurings. |
LOANS (Details 6)
LOANS (Details 6) - Chicopee Bancorp Inc [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Loans receivable - Contractual Required Payments Receivable beginning | $ 29,362 |
Collections - Contractually Required Payments Receivable | (4,000) |
Dispositions - Contractually Required Payments Receivable | (569) |
Loans receivable - Contractual Required Payments Receivable ending | 24,793 |
Loans receivable - Cash Expected To Be Collected beginning | 23,158 |
Collections - Cash Expected to be Collected | (2,780) |
Dispositions - Cash Expected to be Collected | (495) |
Loans receivable - Cash Expected To Be Collected ending | 19,883 |
Loans receivable - Non-Accretable Discount beginning | 6,204 |
Collections - Non-Accretable DIscount | (1,220) |
Dispositions - Non-Accretable Discount | (74) |
Loans receivable - Non-Accretable Discount ending | 4,910 |
Loans receivable - Accretable Yield beginning | 6,033 |
Collections - Accretable Yield | (742) |
Dispositions - Accretable Yield | (437) |
Loans receivable - Accretable Yield ending | 4,854 |
Loans receivable - Outstanding beginning | 17,125 |
Collections | (2,038) |
Dispositions | (58) |
Loans receivable - Outstanding ending | $ 15,029 |
LOANS (Details 7)
LOANS (Details 7) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | $ 1,692,456 | $ 1,625,947 |
Pass (Rated 1 - 4) [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,612,606 | 1,562,376 |
Special Mention (Rated 5) [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 30,177 | 39,663 |
Substandard (Rated 6) [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 49,673 | 23,908 |
Commercial Real Estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 768,881 | 732,616 |
Commercial Real Estate [Member] | Loans rated 1-4 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 732,729 | 708,992 |
Commercial Real Estate [Member] | Loans rated 5 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 17,929 | 15,098 |
Commercial Real Estate [Member] | Loans rated 6 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 18,223 | 8,526 |
Residential Real Estate - Residential 1-4 Family [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 577,641 | 557,752 |
Residential Real Estate - Residential 1-4 Family [Member] | Loans rated 1-4 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 570,428 | 551,469 |
Residential Real Estate - Residential 1-4 Family [Member] | Loans rated 6 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 7,213 | 6,283 |
Residential Real Estate - Home Equity [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 97,238 | 92,599 |
Residential Real Estate - Home Equity [Member] | Loans rated 1-4 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 96,643 | 91,903 |
Residential Real Estate - Home Equity [Member] | Loans rated 6 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 595 | 696 |
Commercial And Industrial [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 243,493 | 238,502 |
Commercial And Industrial [Member] | Loans rated 1-4 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 207,663 | 205,537 |
Commercial And Industrial [Member] | Loans rated 5 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 12,248 | 24,565 |
Commercial And Industrial [Member] | Loans rated 6 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 23,582 | 8,400 |
Consumer [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 5,203 | 4,478 |
Consumer [Member] | Loans rated 1-4 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 5,143 | 4,475 |
Consumer [Member] | Loans rated 6 [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | $ 60 | $ 3 |
LOANS (Details Narrative)
LOANS (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2018USD ($)$ / Loans | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Receivables [Abstract] | |||
Purchase of residential mortgages | $ 48,205,000 | $ 108,448,000 | |
Serviced commercial loans for participants | $ 35,400,000 | 32,600,000 | |
Mortgage loans serviced for others | 56,600,000 | 65,800,000 | |
Net service fee income | $ 89,000 | 63,000 | $ 12,500 |
Weighted average internal rate of return | 12.04% | ||
Weighted average servicing fee | 0.25% | ||
Net cost to service loans | $ / Loans | 84.48 | ||
TDR Charge offs | 256,000 | ||
Loan modified to extend the maturity and re-amortize the payments | $ 112,000,000 | ||
Percentage of non-accrual loans | 0.80% | 0.78% |
PREMISES AND EQUIPMENT (Details
PREMISES AND EQUIPMENT (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 48,991 | $ 45,764 |
Less: accumulated depreciation and amortization | (24,367) | (22,264) |
Premises and equipment, net | 24,624 | 23,500 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 5,651 | 5,651 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 24,144 | 22,693 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | 2,372 | 2,220 |
Furniture And Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises and equipment, gross | $ 16,824 | $ 15,200 |
PREMISES AND EQUIPMENT (Detai_2
PREMISES AND EQUIPMENT (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expense | $ 2,055 | $ 1,965 | $ 1,429 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Amortization of core deposit intangible | $ 375 | $ 375 | $ 73 |
Future amortization of core deposit intangible assets years 1-5 | 375 | ||
Core Deposit Intangibles [Member] | |||
Acquired core deposit liabilities | 4,500 | ||
Future amortization of core deposit intangible assets thereafter | $ 1,800 |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Demand and interest-bearing checking: | ||
Interest-bearing checking accounts | $ 63,620 | $ 87,394 |
Demand deposits | 355,389 | 311,851 |
Savings: | ||
Regular accounts | 118,542 | 140,081 |
Money market accounts | 398,396 | 410,223 |
Time deposits | 660,046 | 556,533 |
Total deposits | $ 1,595,993 | $ 1,506,082 |
DEPOSITS (Details 1)
DEPOSITS (Details 1) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Maturities of time certificates of deposit | ||
2018 | $ 300,531 | |
2019 | $ 443,187 | 179,780 |
2020 | 152,346 | 34,000 |
2021 | 38,328 | 25,381 |
2022 | 18,787 | 16,841 |
2023 | 7,398 | |
Total time deposits | $ 660,046 | $ 556,533 |
DEPOSITS (Details 2)
DEPOSITS (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Interest expense on deposits: | |||
Regular | $ 162 | $ 179 | $ 106 |
Money market | 1,911 | 1,565 | 1,189 |
Time | 9,270 | 6,374 | 5,139 |
Interest-bearing checking accounts | 340 | 330 | 147 |
Total | $ 11,683 | $ 8,448 | $ 6,581 |
DEPOSITS (Details Narrative)
DEPOSITS (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Banking and Thrift [Abstract] | ||
Time deposits over $250,000 or more | $ 180,300 | |
Interest expense on time deposits $250,000 or more | 2,500 | $ 1,400 |
Brokered deposits | $ 23,800 | $ 6,900 |
SHORT-TERM BORROWINGS (Details)
SHORT-TERM BORROWINGS (Details) - Customer Repurchase Agreements [Member] $ in Thousands | Dec. 31, 2017USD ($) |
Customer Repurchase Agreements | |
Balance outstanding at year end | $ 11,650 |
Maximum amount outstanding during year | 30,880 |
Average amount outstanding during year | $ 18,418 |
Weighted average interest rate at end of year | 0.10% |
Amortized cost of collateral pledged at end of year | $ 63,193 |
Fair value of collateral pledged at end of year | $ 65,157 |
SHORT-TERM BORROWINGS (Details
SHORT-TERM BORROWINGS (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Collateralized Government-sponsored enterprise obligations [Member] | ||
Fair value collateral of repurchase agreements | $ 6,700 | |
Government-Sponsored Mortgage-Backed Securities [Member] | ||
Fair value collateral of repurchase agreements | $ 58,400 | |
Government-Sponsored Mortgage-Backed Securities [Member] | Collateralized Government-sponsored enterprise obligations [Member] | ||
Weighted average rate | 2.62% | |
FHLBB Ideal Way Line of Credit [Member] | ||
Line of credit available | $ 9,500 | $ 9,500 |
Correspondent Bank [Member] | ||
Line of credit available | 50,000 | |
Correspondent Bank [Member] | ||
Line of credit available | $ 1,500 | |
FHLBB Advances [Member] | ||
Weighted average rate | 3.28% | 1.58% |
Short-term borrowings | $ 59,300 | $ 133,000 |
FHLBB Advances [Member] | Maximum [Member] | ||
Short-term borrowings | $ 218,300 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fixed-rate advances maturing: | ||
Year 1 | $ 59,250 | $ 144,650 |
Weighted average rate | ||
Advances, weighted average rate | 2.30% | 1.90% |
FHLBB Advances - Fixed Rate [Member] | ||
Fixed-rate advances maturing: | ||
Year 1 | $ 81,891 | $ 54,652 |
Year 2 | 84,269 | 49,105 |
Year 3 | 31,766 | 40,535 |
Year 4 | 9,461 | 4,434 |
Year 5 | 631 | 5,325 |
Year 6 | 735 | |
Total fixed rate advances | $ 208,018 | $ 154,786 |
Weighted average rate | ||
Year 1 | 2.00% | |
Year 2 | 2.30% | 2.00% |
Year 3 | 2.20% | 1.90% |
Year 4 | 2.60% | 1.00% |
Year 5 | 2.20% | 1.40% |
Year 6 | 2.60% | 2.60% |
Advances, weighted average rate | 2.30% | 1.90% |
FHLBB Advances - Variable Rate [Member] | ||
Variable-rate maturing | ||
Year 1 | $ 10,000 | |
Weighted average rate | ||
Year 1 | 1.40% |
LONG-TERM DEBT (Details Narrati
LONG-TERM DEBT (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Long Term Debt [Member] | |||
Debt Instrument [Line Items] | |||
Cash paid for interest | $ 4,200 | $ 2,300 | $ 2,300 |
STOCK PLANS AND EMPLOYEE STOC_3
STOCK PLANS AND EMPLOYEE STOCK OWNERSHIP PLAN (Details) - Stock Options [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Options, Outstanding | |
Outstanding at beginning of period | shares | 257,050 |
Exercised | shares | (18,975) |
Outstanding at end of period | shares | 238,075 |
Exercisable at end of period | shares | 238,075 |
Options, Outstanding, Weighted Average Exercise Price | |
Outstanding at beginning of period | $ / shares | $ 6.31 |
Exercised | $ / shares | 6.03 |
Outstanding at end of period | $ / shares | 6.33 |
Exercisable at end of period | $ / shares | $ 6.33 |
Options, Outstanding, Weighted Average Remaining Contractual Term (in years) | |
Outstanding at beginning of period | 4 years 4 months 28 days |
Exercised | 3 years 9 months 18 days |
Outstanding at end of period | 3 years 5 months 8 days |
Exercisable at end of period | 3 years 5 months 8 days |
Options, Outstanding, Aggregate Intrinsic Value | |
Outstanding at beginning of period | $ | $ 1,175 |
Exercised | $ | 89 |
Outstanding at end of period | $ | 877 |
Exercisable at end of period | $ | $ 877 |
STOCK PLANS AND EMPLOYEE STOC_4
STOCK PLANS AND EMPLOYEE STOCK OWNERSHIP PLAN (Details 1) | 12 Months Ended |
Dec. 31, 2018 | |
LTI Plan for 2016 [Member] | Original Threshold [Member] | |
Original metrics | 5.85% |
Adjusted metrics | 6.38% |
LTI Plan for 2016 [Member] | Original Target [Member] | |
Original metrics | 6.32% |
Adjusted metrics | 6.79% |
LTI Plan for 2017 [Member] | Original Maximum [Member] | |
December 31, 2018 | 7.60% |
December 31, 2019 | 7.90% |
LTI Plan for 2017 [Member] | Original Threshold [Member] | |
December 31, 2018 | 6.30% |
December 31, 2019 | 6.50% |
LTI Plan for 2017 [Member] | Original Target [Member] | |
December 31, 2018 | 7.00% |
December 31, 2019 | 7.20% |
LTI Plan for 2017 [Member] | Adjusted Threshold [Member] | |
December 31, 2018 | 6.87% |
December 31, 2019 | 7.09% |
LTI Plan for 2017 [Member] | Adjusted Target [Member] | |
December 31, 2018 | 7.63% |
December 31, 2019 | 7.85% |
LTI Plan for 2017 [Member] | Adjusted Maximum [Member] | |
December 31, 2018 | 8.28% |
December 31, 2019 | 8.61% |
LTI Plan for 2018 [Member] | Original Threshold [Member] | |
December 31, 2018 | 6.30% |
December 31, 2019 | 6.85% |
December 31, 2020 | 7.40% |
LTI Plan for 2018 [Member] | Original Target [Member] | |
December 31, 2018 | 6.80% |
December 31, 2019 | 7.35% |
December 31, 2020 | 7.90% |
LTI Plan for 2018 [Member] | Stretch [Member] | |
December 31, 2018 | 7.20% |
December 31, 2019 | 7.75% |
December 31, 2020 | 8.30% |
STOCK PLANS AND EMPLOYEE STOC_5
STOCK PLANS AND EMPLOYEE STOCK OWNERSHIP PLAN (Details 2) - Restricted Stock [Member] | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Restricted Stock Awards | |
Beginning balance | shares | 138,833 |
Shares granted | shares | 83,812 |
Shares vested | shares | (62,726) |
Shares forfeited | shares | (4,207) |
Ending balance | shares | 155,712 |
Weighted Average Grant Date Fair Value | |
Beginning balance | $ / shares | $ 8.98 |
Shares granted | $ / shares | 11.05 |
Shares vested | $ / shares | 9.44 |
Shares forfeited | $ / shares | 10.63 |
Ending balance | $ / shares | $ 9.87 |
STOCK PLANS AND EMPLOYEE STOC_6
STOCK PLANS AND EMPLOYEE STOCK OWNERSHIP PLAN (Details 3) - Loan To Employee Stock Ownership Plan Trust [Member] $ in Thousands | Dec. 31, 2018USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
2019 | $ 447 |
2020 | 447 |
2021 | 447 |
2022 | 447 |
2023 | 447 |
Thereafter | 4,184 |
ESOP Loan | $ 6,419 |
STOCK PLANS AND EMPLOYEE STOC_7
STOCK PLANS AND EMPLOYEE STOCK OWNERSHIP PLAN (Details 4) - shares | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Allocated | 936,522 | 899,969 |
Committed to be allocated | 90,978 | 93,679 |
Unallocated | 700,124 | 791,102 |
Total | 1,727,624 | 1,784,750 |
STOCK PLANS AND EMPLOYEE STOC_8
STOCK PLANS AND EMPLOYEE STOCK OWNERSHIP PLAN (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Jan. 31, 2018 | May 31, 2017 | May 31, 2016 | Jan. 31, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | May 31, 2014 | |
Stock Options | ||||||||
Cash received for options exercised | $ 114 | $ 5,465 | $ 1,971 | |||||
Restricted Stock Awards | ||||||||
Share-based compensation expense | 845 | $ 649 | $ 262 | |||||
Fair value of restricted stock vested | $ 659 | |||||||
LTI Plan for 2016 [Member] | ||||||||
Restricted Stock Awards | ||||||||
Shares granted | 62,740 | |||||||
LTI Plan for 2017 [Member] | ||||||||
Restricted Stock Awards | ||||||||
Shares granted | 89,042 | |||||||
LTI Plan for 2018 [Member] | ||||||||
Restricted Stock Awards | ||||||||
Shares granted | 83,812 | |||||||
Restricted Stock Award Plan [Member] | ||||||||
Restricted Stock Awards | ||||||||
Share based compensation, shares available for grant | 236,053 | |||||||
New Stock-Based Compensation Plan ("RSA Plan") [Member] | ||||||||
Restricted Stock Awards | ||||||||
Shares authorized | 516,000 | |||||||
Shares granted | 48,560 | |||||||
Vesting term | 5 years | |||||||
Time Based Shares [Member] | LTI Plan for 2016 [Member] | ||||||||
Restricted Stock Awards | ||||||||
Shares granted | 36,543 | |||||||
Percent of awards under plan | 50.00% | |||||||
Time Based Shares [Member] | LTI Plan for 2016 [Member] | Award, Tranche One [Member] | ||||||||
Restricted Stock Awards | ||||||||
Shares granted | 10,352 | |||||||
Vesting term | 1 year | |||||||
Time Based Shares [Member] | LTI Plan for 2016 [Member] | Award, Tranche Two [Member] | ||||||||
Restricted Stock Awards | ||||||||
Shares granted | 26,191 | |||||||
Vesting term | 3 years | |||||||
Time Based Shares [Member] | LTI Plan for 2017 [Member] | ||||||||
Restricted Stock Awards | ||||||||
Shares granted | 55,159 | |||||||
Time Based Shares [Member] | LTI Plan for 2017 [Member] | Award, Tranche One [Member] | ||||||||
Restricted Stock Awards | ||||||||
Shares granted | 21,276 | |||||||
Vesting term | 1 year | |||||||
Time Based Shares [Member] | LTI Plan for 2017 [Member] | Award, Tranche Two [Member] | ||||||||
Restricted Stock Awards | ||||||||
Shares granted | 33,883 | |||||||
Vesting term | 3 years | |||||||
Time Based Shares [Member] | LTI Plan for 2018 [Member] | ||||||||
Restricted Stock Awards | ||||||||
Shares granted | 50,852 | |||||||
Time Based Shares [Member] | LTI Plan for 2018 [Member] | Award, Tranche One [Member] | ||||||||
Restricted Stock Awards | ||||||||
Shares granted | 17,908 | |||||||
Vesting term | 1 year | |||||||
Time Based Shares [Member] | LTI Plan for 2018 [Member] | Award, Tranche Two [Member] | ||||||||
Restricted Stock Awards | ||||||||
Shares granted | 32,944 | |||||||
Vesting term | 3 years | |||||||
Performance Shares [Member] | LTI Plan for 2016 [Member] | ||||||||
Restricted Stock Awards | ||||||||
Shares granted | 26,197 | |||||||
Vesting term | 3 years | |||||||
Percent of awards under plan | 50.00% | |||||||
Performance Shares [Member] | LTI Plan for 2017 [Member] | ||||||||
Restricted Stock Awards | ||||||||
Shares granted | 33,883 | |||||||
Vesting term | 3 years | |||||||
Performance Shares [Member] | LTI Plan for 2017 [Member] | Original Maximum [Member] | ||||||||
Restricted Stock Awards | ||||||||
Percent of awards participants may earn | 150.00% | |||||||
Performance Shares [Member] | LTI Plan for 2017 [Member] | Original Threshold [Member] | ||||||||
Restricted Stock Awards | ||||||||
Percent of awards participants may earn | 50.00% | |||||||
Performance Shares [Member] | LTI Plan for 2017 [Member] | Original Target [Member] | ||||||||
Restricted Stock Awards | ||||||||
Percent of awards participants may earn | 100.00% | |||||||
Performance Shares [Member] | LTI Plan for 2018 [Member] | ||||||||
Restricted Stock Awards | ||||||||
Shares granted | 32,960 | |||||||
Vesting term | 3 years | |||||||
Performance Shares [Member] | LTI Plan for 2018 [Member] | Original Maximum [Member] | ||||||||
Restricted Stock Awards | ||||||||
Percent of awards participants may earn | 150.00% | |||||||
Performance Shares [Member] | LTI Plan for 2018 [Member] | Original Threshold [Member] | ||||||||
Restricted Stock Awards | ||||||||
Percent of awards participants may earn | 50.00% | |||||||
Performance Shares [Member] | LTI Plan for 2018 [Member] | Original Target [Member] | ||||||||
Restricted Stock Awards | ||||||||
Percent of awards participants may earn | 100.00% |
STOCK PLANS AND EMPLOYEE STOC_9
STOCK PLANS AND EMPLOYEE STOCK OWNERSHIP PLAN (Detail Narrative 1) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jan. 31, 2007shares | Jan. 31, 2002Numbershares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Employee Stock Owneship Plan | |||||
Employee age required to qualify for ESOP benefit | Number | 21 | ||||
Minimum working hours needed for eligibility | Number | 1,000 | ||||
Purchase of common stock by ESOP Trust of IPO, percent | 4.00% | 8.00% | |||
Purchase of common stock by ESOP Trust of IPO | shares | 736,000 | 1,305,359 | |||
Number of shares sold in IPO | shares | 18,400,000 | ||||
Total ESOP compensation expense | $ | $ 960 | $ 958 | $ 630 | ||
Fair value of unallocated ESOP shares | $ | $ 10,300 | $ 8,600 | |||
Loan To Employee Stock Ownership Plan Trust [Member] | |||||
Employee Stock Owneship Plan | |||||
Debt, interest rate | 8.00% |
RETIREMENT PLANS AND EMPLOYEE_3
RETIREMENT PLANS AND EMPLOYEE BENEFITS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Change in benefit obligation: | |||
Benefit obligation at beginning of year | $ 29,345 | $ 25,819 | $ 22,458 |
Service cost | 1,269 | 1,139 | 1,130 |
Interest | 1,012 | 1,002 | 959 |
Actuarial (gain) loss | (3,887) | 1,987 | 1,846 |
Benefits paid | (430) | (602) | (574) |
Benefit obligation at end of year | 27,309 | 29,345 | 25,819 |
Change in plan assets: | |||
Balance at beginning of year | 19,215 | 16,498 | 15,233 |
Actual (loss) return on plan assets | (1,192) | 2,519 | 1,039 |
Employer contribution | 800 | 800 | 800 |
Benefits paid | (430) | (602) | (574) |
Balance at end of year | 18,393 | 19,215 | 16,498 |
Funded status and accrued benefit at end of year | (8,916) | (10,130) | (9,321) |
Accumulated benefit obligation at end of year | $ 21,449 | $ 21,930 | $ 19,027 |
RETIREMENT PLANS AND EMPLOYEE_4
RETIREMENT PLANS AND EMPLOYEE BENEFITS (Details 1) | Dec. 31, 2018 | Dec. 31, 2017 |
Defined Benefit Plan [Abstract] | ||
Discount rate | 4.25% | 3.60% |
Rate of compensation increase | 4.00% | 4.00% |
RETIREMENT PLANS AND EMPLOYEE_5
RETIREMENT PLANS AND EMPLOYEE BENEFITS (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plan [Abstract] | |||
Service cost | $ 1,269 | $ 1,139 | $ 1,130 |
Interest cost | 1,012 | 1,002 | 959 |
Expected return on assets | (1,387) | (1,194) | (1,097) |
Amortization of actuarial loss | 170 | 124 | 102 |
Net periodic pension cost | $ 1,064 | $ 1,071 | $ 1,094 |
RETIREMENT PLANS AND EMPLOYEE_6
RETIREMENT PLANS AND EMPLOYEE BENEFITS (Details 3) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Service Costs Assumptions | |||
Discount rate | 3.60% | 4.15% | 4.35% |
Expected return on plan assets | 7.50% | 7.50% | 7.50% |
Rate of compensation increase | 4.00% | 4.00% | 4.00% |
RETIREMENT PLANS AND EMPLOYEE_7
RETIREMENT PLANS AND EMPLOYEE BENEFITS (Details 4) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Defined Benefit Plan Disclosure [Line Items] | ||||
Define benefit plan fair value of plan asset | $ 18,393 | $ 19,215 | $ 16,498 | $ 15,233 |
Fixed Income [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Define benefit plan fair value of plan asset | 10,559 | 10,355 | ||
Large U.S. Equity [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Define benefit plan fair value of plan asset | 4,365 | 5,080 | ||
International Equity [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Define benefit plan fair value of plan asset | 2,368 | 2,518 | ||
Small/Mid U.S. Equity [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Define benefit plan fair value of plan asset | 734 | 877 | ||
Balanced/Asset Allocation [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Define benefit plan fair value of plan asset | $ 367 | $ 385 |
RETIREMENT PLANS AND EMPLOYEE_8
RETIREMENT PLANS AND EMPLOYEE BENEFITS (Details 5) - NAV - Fair Value [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Fair Value | $ 18,393 | $ 19,215 |
Unfunded Commitments | n/a | n/a |
Redemption Frequency (if Currently Eligible) | Daily | Daily |
Redemption Notice Period | 1 day | 1 day |
RETIREMENT PLANS AND EMPLOYEE_9
RETIREMENT PLANS AND EMPLOYEE BENEFITS (Details 6) $ in Thousands | Dec. 31, 2018USD ($) |
Defined Benefit Plan [Abstract] | |
2019 | $ 857 |
2020 | 1,083 |
2021 | 1,195 |
2022 | 1,549 |
2023 | 1,477 |
In aggregate for 2024 - 2028 | $ 14,502 |
RETIREMENT PLANS AND EMPLOYE_10
RETIREMENT PLANS AND EMPLOYEE BENEFITS (Details Narrative) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)h | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
401 (k) [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Employer matching contribution for the first 6% of each participant's annual earnings | 50.00% | ||
Maximum percentage of participant's annual earnings subject to match by employer for 401(K) plan | 6.00% | ||
Employer contribution to plan | $ | $ 398 | $ 370 | $ 242 |
Pension Plan [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Minimum working hours needed for eligibility | h | 1,000 |
DERIVATIVES AND HEDGING ACTIV_3
DERIVATIVES AND HEDGING ACTIVITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Other Liabilities [Member] | Interest Rate Swap Agreement [Member] | Designated as Hedging Instrument [Member] | ||
Fair value of derivative liability | $ 1,259 | $ 2,152 |
DERIVATIVES AND HEDGING ACTIV_4
DERIVATIVES AND HEDGING ACTIVITIES (Details 1) - Interest Rate Swap Agreement [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Notional Amount | $ 35,000 | $ 55,000 |
Weighted Average Maturity | 3 years 8 months 12 days | 3 years 3 months 18 days |
Weighted Average Rate Received | 2.79% | 1.64% |
Weighted Average Rate Paid | 3.54% | 2.93% |
Estimated Fair Value | $ (1,259) | $ (2,152) |
DERIVATIVES AND HEDGING ACTIV_5
DERIVATIVES AND HEDGING ACTIVITIES (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Interest Rate Swap [Member] | Derivatives Designated As Cash Flow Hedges [Member] | |||
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | $ 442 | $ 31 | $ (1,126) |
DERIVATIVES AND HEDGING ACTIV_6
DERIVATIVES AND HEDGING ACTIVITIES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Estimated amount to be reclassified during the next 12 month period | $ 1,400 | |||
Termination value of derivatives in a net liability position | 1,300 | $ 2,200 | ||
Cash posted as collateral | 260 | |||
Collateralized Mortgage Backed Securities [Member] | ||||
Fair value of mortgage backed securities collateralized | 1,000 | |||
Interest Rate Swap [Member] | ||||
Reclassifications amount, effective portion | $ 1,500 | $ 2,000 | $ 1,600 | |
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 |
REGULATORY CAPITAL (Details)
REGULATORY CAPITAL (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Total Capital (to Risk Weighted Assets): | ||
Total Capital | $ 247,361 | $ 255,605 |
Total Capital (to risk-weighted assets) ratio | 14.87% | 15.53% |
Minimum amount of capital for adequacy purposes | $ 133,089 | $ 131,711 |
Minimum amount of capital for adequacy purposes, ratio | 8.00% | 8.00% |
Tier 1 Capital (to Risk Weighted Assets): | ||
Tier 1 Capital | $ 235,308 | $ 244,774 |
Tier 1 Capital (to risk-weighted assets) ratio | 14.14% | 14.87% |
Minimum amount of Tier 1 Capital for adequacy purposes | $ 99,817 | $ 98,783 |
Minimum amount of Tier 1 Capital for adequacy purposes, ratio | 6.00% | 6.00% |
Common Equity Tier 1 Capital (to risk-weighted assets) | ||
Common Equity Tier 1 Capital | $ 235,308 | $ 244,774 |
Common Equity Tier 1 Capital (to risk-weighted assets) ratio | 14.14% | 14.87% |
Minimum amount of Common Equity Tier 1 Capital for adequacy purposes | $ 74,862 | $ 74,087 |
Minimum amount of Common Equity Tier 1 Capital for adequacy purposes, ratio | 4.50% | 4.50% |
Tier 1 Leverage Ratio (to Adjusted Average Assets): | ||
Tier 1 Leverage ratio | $ 235,308 | $ 244,774 |
Tier 1 Leverage (to adjusted average assets) ratio | 11.14% | 11.84% |
Minimum amount of Tier 1 Leverage for adequacy purposes | $ 84,497 | $ 82,702 |
Minimum amount of Tier 1 Leverage for adequacy purposes, ratio | 4.00% | 4.00% |
Bank [Member] | ||
Total Capital (to Risk Weighted Assets): | ||
Total Capital | $ 235,569 | $ 245,380 |
Total Capital (to risk-weighted assets) ratio | 14.18% | 14.94% |
Minimum amount of capital for adequacy purposes | $ 132,892 | $ 131,367 |
Minimum amount of capital for adequacy purposes, ratio | 8.00% | 8.00% |
Minimum Capital required to be well-capitalized | $ 166,115 | $ 164,208 |
Minimum Capital required to be well-capitalized, ratio | 10.00% | 10.00% |
Tier 1 Capital (to Risk Weighted Assets): | ||
Tier 1 Capital | $ 223,516 | $ 234,549 |
Tier 1 Capital (to risk-weighted assets) ratio | 13.46% | 14.28% |
Minimum amount of Tier 1 Capital for adequacy purposes | $ 99,669 | $ 98,525 |
Minimum amount of Tier 1 Capital for adequacy purposes, ratio | 6.00% | 6.00% |
Minimum Tier 1 Capital required to be well-capitalized | $ 132,892 | $ 131,367 |
Minimum Tier 1 Capital required to be well-capitalized, ratio | 8.00% | 8.00% |
Common Equity Tier 1 Capital (to risk-weighted assets) | ||
Common Equity Tier 1 Capital | $ 223,516 | $ 234,549 |
Common Equity Tier 1 Capital (to risk-weighted assets) ratio | 13.46% | 14.28% |
Minimum amount of Common Equity Tier 1 Capital for adequacy purposes | $ 74,752 | $ 73,894 |
Minimum amount of Common Equity Tier 1 Capital for adequacy purposes, ratio | 4.50% | 4.50% |
Minimum Common Equity Tier 1 Capital required to be well-capitalized | $ 107,974 | $ 106,735 |
Minimum Common Equity Tier 1 Capital required to be well-capitalized, ratio | 6.50% | 6.50% |
Tier 1 Leverage Ratio (to Adjusted Average Assets): | ||
Tier 1 Leverage ratio | $ 223,516 | $ 234,549 |
Tier 1 Leverage (to adjusted average assets) ratio | 10.59% | 11.36% |
Minimum amount of Tier 1 Leverage for adequacy purposes | $ 84,465 | $ 82,584 |
Minimum amount of Tier 1 Leverage for adequacy purposes, ratio | 4.00% | 4.00% |
Minimum Tier 1 Capital required to be well-capitalized | $ 105,581 | $ 103,230 |
Minimum Tier 1 Leverage required to be well-capitalized, ratio | 5.00% | 5.00% |
REGULATORY CAPITAL (Details 1)
REGULATORY CAPITAL (Details 1) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Banking and Thrift [Abstract] | ||||
Consolidated GAAP capital | $ 237,029 | $ 247,281 | $ 238,396 | $ 139,466 |
Net unrealized losses on available-for-sale securities, net of tax | 7,400 | 4,042 | ||
Unrealized loss on defined benefit pension plan, net of tax | 3,246 | 4,329 | ||
Accumulated net loss on cash flow hedges, net of tax | 2,770 | 4,181 | ||
Unrealized loss on certain available-for-sale equity securities | (236) | |||
Goodwill | (12,487) | (12,487) | ||
Intangible assets, net of associated deferred tax liabilities | (2,652) | (2,336) | ||
Tier 1 and Common Equity Tier 1 capital | 235,308 | 244,774 | ||
Allowance for loan losses | 12,053 | 10,831 | ||
Total regulatory capital | $ 247,361 | $ 255,605 |
REGULATORY CAPITAL (Details Nar
REGULATORY CAPITAL (Details Narrative) - USD ($) $ in Thousands | Jan. 29, 2019 | Jan. 02, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 31, 2017 |
Number of shares authorized to be repurchased | 2,814,200 | 251,333 | 3,047,000 | ||
Number of shares authorized to be repurchased as percentage of total outstanding shares of common stock | 10.00% | 10.00% | |||
Restricted equity in net assets | $ 132,900 | $ 131,400 | |||
Capital converservation buffer of Common Equity Tier 1 Capital ratio | 1.875% | ||||
Percentage of initial phase-in amount | 2.50% | ||||
Subsequent Event [Member] | |||||
Capital converservation buffer of Common Equity Tier 1 Capital ratio | 2.50% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | [1] | Sep. 30, 2017 | [1] | Jun. 30, 2017 | [1] | Mar. 31, 2017 | [1] | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current tax provision: | |||||||||||||||
Federal | $ 3,910 | $ 1,505 | $ 1,925 | ||||||||||||
State | 1,586 | 581 | 370 | ||||||||||||
Total | 5,496 | 2,086 | 2,295 | ||||||||||||
Deferred tax (benefit) provision: | |||||||||||||||
Federal | (542) | 7,613 | 262 | ||||||||||||
State | (254) | 702 | 10 | ||||||||||||
Change in valuation reserve | (973) | 2 | |||||||||||||
Total | (796) | 7,342 | 274 | ||||||||||||
Total | $ 1,223 | $ 1,070 | $ 1,364 | $ 1,043 | $ 5,828 | $ 2,037 | $ 1,416 | $ 147 | $ 4,700 | $ 9,428 | $ 2,569 | ||||
[1] | Increase in the quarter ended December 31, 2017 is due to the enactment of the Tax Act on December 22, 2017. |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal income tax rate | 21.00% | 35.00% | 34.00% |
Increase (decrease) resulting from: | |||
State taxes, net of federal tax benefit | 5.00% | 3.20% | 3.40% |
Tax exempt income | (1.80%) | (2.80%) | (2.60%) |
Bank-owned life insurance (BOLI) | (1.80%) | (2.90%) | (7.20%) |
Nondeductible merger expenses | 0.10% | 8.30% | |
Change in valuation reserve | (4.50%) | ||
Option exercise tax benefit | (0.10%) | (3.20%) | |
Effect of tax rate change | 18.40% | ||
Other, net | (1.20%) | ||
Effective tax rate | 22.30% | 43.30% | 34.70% |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Allowance for loan losses | $ 3,388 | $ 3,045 |
Net unrealized loss on derivative and hedging activity | 1,084 | 1,635 |
Employee benefit and share-based compensation plans | 2,233 | 2,184 |
Defined benefit plan | 1,270 | 1,692 |
Net unrealized loss on securities available for sale | 2,491 | 1,316 |
Other-than-temporary impairment write-down | 91 | |
Purchased mortgage servicing rights | 293 | 344 |
Nonaccrual interest | 674 | 487 |
Other | 777 | 509 |
Gross deferred tax assets | 12,210 | 11,303 |
Deferred tax liabilities: | ||
Deferred loan fees | (1,122) | (1,226) |
Hedge termination payments | (729) | (1,030) |
Purchase accounting adjustments, net | (416) | (234) |
Other | (71) | (29) |
Gross deferred tax liabilities | (2,338) | (2,519) |
Net deferred tax asset | $ 9,872 | $ 8,784 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | |||
Cash paid for income taxes | $ 3,700 | $ 5,600 | $ 2,600 |
Additional income tax expense | 4,000 | ||
Additional income tax benefit | 2,100 | ||
Chicopee Bancorp Inc [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 3,500 | ||
Federal Income Tax [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Income tax reserve for loan losses at Bank's base year | $ 9,400 | ||
Percentage of amount actually used net of reserve subject to taxation | 150.00% | ||
Deferred tax liability not recognized | $ 2,600 |
TRANSACTIONS WITH DIRECTORS A_3
TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Loans and Leases Receivable, Related Parties [Roll Forward] | ||
Balance at beginning of year | $ 1,631 | $ 1,475 |
Principal distributions | 837 | 1,034 |
Repayments of principal | (1,513) | (878) |
Balance at end of year | $ 955 | $ 1,631 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Unused Lines of Credit [Member] | ||
Loss Contingencies [Line Items] | ||
Commitments to extend credit | $ 259,009 | $ 229,436 |
Loan Commitments [Member] | ||
Loss Contingencies [Line Items] | ||
Commitments to extend credit | 53,199 | 40,878 |
Existing Construction Loan Agreements [Member] | ||
Loss Contingencies [Line Items] | ||
Commitments to extend credit | 45,339 | 42,555 |
Standby Letters of Credit [Member] | ||
Loss Contingencies [Line Items] | ||
Commitments to extend credit | $ 11,370 | $ 9,138 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details 1) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 1,128 |
2020 | 995 |
2021 | 915 |
2022 | 887 |
2023 | 700 |
Thereafter | 4,340 |
Total | $ 8,965 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments to extend credit | $ 368,900 | $ 322,000 | |
Fixed rate commitments | 45,300 | 47,400 | |
Variable rate commitments | 323,600 | 274,600 | |
Rent expense under operating leases | 1,100 | $ 1,100 | $ 798 |
Small Business Investment Company [Member] | |||
Partners committed capital contrbution | 3,000 | ||
Unfunded commitment | 1,600 | ||
Small Business Investment Company [Member] | Other Assets [Member] | |||
Partners committed book value | 1,400 | ||
Risk Participation Agreements [Member] | |||
Risk Participation agreement - fair value | 1,200 | ||
Estimated risk participation agreement maximum exposure | $ 587 | ||
Minimum [Member] | |||
Fixed rate commitments - interest rates | 1.49% | 1.49% | |
Minimum [Member] | Risk Participation Agreements Two [Member] | |||
Risk participation agreement term | 8 years | ||
Maximum [Member] | |||
Fixed rate commitments - interest rates | 18.00% | 18.00% | |
Maximum [Member] | Risk Participation Agreements Two [Member] | |||
Risk participation agreement term | 20 years |
FAIR VALUE OF ASSETS AND LIABLI
FAIR VALUE OF ASSETS AND LIABLITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Available for sale securities | $ 253,748 | |
Marketable equity securities | 6,408 | |
Interest rate swaps - Liabilities | 1,259 | $ 2,152 |
Fair Value Level 1 [Member] | ||
Marketable equity securities | 6,408 | |
Fair Value Level 2 [Member] | ||
Interest rate swaps - Liabilities | 1,259 | 2,152 |
Recurring [Member] | ||
Marketable equity securities | 6,408 | |
Total assets | 260,156 | 288,416 |
Interest rate swaps - Liabilities | 1,259 | 2,152 |
Recurring [Member] | Government-Sponsored Mortgage-Backed Securities [Member] | ||
Available for sale securities | 159,351 | 182,001 |
Recurring [Member] | US Government Guaranteed Mortgage-Backed Securities [Member] | ||
Available for sale securities | 19,338 | 16,254 |
Recurring [Member] | Corporate Bonds [Member] | ||
Available for sale securities | 48,168 | 56,144 |
Recurring [Member] | States and Municipal Bonds [Member] | ||
Available for sale securities | 2,944 | 3,239 |
Recurring [Member] | Government-Sponsored Enterprise Obligations [Member] | ||
Available for sale securities | 23,947 | 24,381 |
Recurring [Member] | Mutual Funds [Member] | ||
Mutual funds | 6,397 | |
Recurring [Member] | Fair Value Level 1 [Member] | ||
Marketable equity securities | 6,408 | |
Total assets | 6,408 | 6,397 |
Recurring [Member] | Fair Value Level 1 [Member] | Mutual Funds [Member] | ||
Mutual funds | 6,397 | |
Recurring [Member] | Fair Value Level 2 [Member] | ||
Total assets | 253,748 | 282,019 |
Interest rate swaps - Liabilities | 1,259 | 2,152 |
Recurring [Member] | Fair Value Level 2 [Member] | Government-Sponsored Mortgage-Backed Securities [Member] | ||
Available for sale securities | 159,351 | 182,001 |
Recurring [Member] | Fair Value Level 2 [Member] | US Government Guaranteed Mortgage-Backed Securities [Member] | ||
Available for sale securities | 19,338 | 16,254 |
Recurring [Member] | Fair Value Level 2 [Member] | Corporate Bonds [Member] | ||
Available for sale securities | 48,168 | 56,144 |
Recurring [Member] | Fair Value Level 2 [Member] | States and Municipal Bonds [Member] | ||
Available for sale securities | 2,944 | 3,239 |
Recurring [Member] | Fair Value Level 2 [Member] | Government-Sponsored Enterprise Obligations [Member] | ||
Available for sale securities | $ 23,947 | $ 24,381 |
FAIR VALUE OF ASSETS AND LIAB_3
FAIR VALUE OF ASSETS AND LIABLITIES (Details 1) - Nonrecurring [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Impaired Loans [Member] | ||
Total losses | $ 612 | $ 256 |
Fair Value Inputs Level 3 [Member] | ||
Impaired loans | $ 1,676 | $ 1,495 |
FAIR VALUE OF ASSETS AND LIAB_4
FAIR VALUE OF ASSETS AND LIABLITIES (Details 2) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Assets: | |||
Cash and cash equivalents | $ 26,789 | $ 27,132 | |
Securities available-for-sale | 253,748 | [1] | 288,416 |
Marketable equity securities | 6,408 | ||
Federal Home Loan Bank of Boston and other restricted stock | 14,695 | 15,553 | |
Loans - net | 1,684,804 | 1,619,850 | |
Accrued interest receivable | 5,652 | 5,946 | |
Mortgage servicing rights | 286 | 352 | |
Liabilities: | |||
Deposits | 1,595,993 | 1,506,082 | |
Short-term borrowings | 59,250 | 144,650 | |
Long-term debt | 208,018 | 164,786 | |
Accrued interest payable | 530 | 441 | |
Derivative liabilities | 1,259 | 2,152 | |
Fair Value Level 1 [Member] | |||
Assets: | |||
Cash and cash equivalents | 26,789 | 27,132 | |
Securities available-for-sale | 6,397 | ||
Marketable equity securities | 6,408 | ||
Fair Value Level 2 [Member] | |||
Assets: | |||
Securities available-for-sale | 253,748 | 282,019 | |
Mortgage servicing rights | 456 | 528 | |
Liabilities: | |||
Short-term borrowings | 59,247 | 144,650 | |
Long-term debt | 206,789 | 164,016 | |
Derivative liabilities | 1,259 | 2,152 | |
Fair Value Level 3 [Member] | |||
Assets: | |||
Federal Home Loan Bank of Boston and other restricted stock | 14,695 | 15,553 | |
Loans - net | 1,631,558 | 1,581,929 | |
Accrued interest receivable | 5,652 | 5,946 | |
Liabilities: | |||
Deposits | 1,592,521 | 1,503,311 | |
Accrued interest payable | 530 | 441 | |
Carrying Value [Member] | |||
Assets: | |||
Cash and cash equivalents | 26,789 | 27,132 | |
Securities available-for-sale | 253,748 | 288,416 | |
Marketable equity securities | 6,408 | ||
Federal Home Loan Bank of Boston and other restricted stock | 14,695 | 15,553 | |
Loans - net | 1,631,558 | 1,581,929 | |
Accrued interest receivable | 5,652 | 5,946 | |
Mortgage servicing rights | 456 | 528 | |
Liabilities: | |||
Deposits | 1,592,521 | 1,503,311 | |
Short-term borrowings | 59,247 | 144,650 | |
Long-term debt | 206,789 | 164,016 | |
Accrued interest payable | 530 | 441 | |
Derivative liabilities | $ 1,259 | $ 2,152 | |
[1] | Does not include investments in restricted stock consisting of $14.7 million and $15.6 million at December 31, 2018 and December 31, 2017, respectively. |
CONDENSED PARENT COMPANY FINA_3
CONDENSED PARENT COMPANY FINANCIAL STATEMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
ASSETS: | ||||
Other assets | $ 6,803 | $ 8,422 | ||
Total Assets | 2,118,822 | 2,083,070 | ||
LIABILITIES: | ||||
Other liabilities | 18,311 | 19,967 | ||
EQUITY | 237,029 | 247,281 | $ 238,396 | $ 139,466 |
TOTAL LIABILITIES AND EQUITY | 2,118,822 | 2,083,070 | ||
Parent Company [Member] | ||||
ASSETS: | ||||
Cash equivalents | 74 | 120 | ||
Investment in subsidiaries | 225,238 | 237,056 | ||
ESOP loan receivable | 6,419 | 7,135 | ||
Other assets | 12,164 | 10,529 | ||
Total Assets | 243,895 | 254,840 | ||
LIABILITIES: | ||||
ESOP loan payable | 6,419 | 7,135 | ||
Other liabilities | 447 | 424 | ||
EQUITY | 237,029 | 247,281 | ||
TOTAL LIABILITIES AND EQUITY | $ 243,895 | $ 254,840 |
CONDENSED PARENT COMPANY FINA_4
CONDENSED PARENT COMPANY FINANCIAL STATEMENTS (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||||
INCOME: | |||||||||||||||
Gain on sales of securities, net | $ (281) | $ 52 | $ 1,139 | ||||||||||||
OPERATING EXPENSE: | |||||||||||||||
Salaries and employee benefits | 25,982 | 25,431 | 17,386 | ||||||||||||
Income before equity in undistributed income of subsidiaries and income taxes | $ 5,065 | $ 4,979 | $ 6,502 | $ 4,562 | $ 5,475 | $ 5,852 | $ 5,172 | $ 5,250 | 21,108 | 21,748 | 7,403 | ||||
Income tax benefit | 1,223 | 1,070 | 1,364 | 1,043 | 5,828 | [1] | 2,037 | [1] | 1,416 | [1] | 147 | [1] | 4,700 | 9,428 | 2,569 |
Net income | $ 3,842 | $ 3,909 | $ 5,138 | $ 3,519 | $ (353) | $ 3,815 | $ 3,756 | $ 5,103 | 16,408 | 12,320 | 4,834 | ||||
Parent Company [Member] | |||||||||||||||
INCOME: | |||||||||||||||
Dividends from subsidiaries | 28,712 | 8,561 | 3,499 | ||||||||||||
Interest income from securities | 32 | ||||||||||||||
ESOP loan interest income | 571 | 629 | 670 | ||||||||||||
Gain on sales of securities, net | 451 | ||||||||||||||
Other income | 1 | 4 | |||||||||||||
Total income | 29,284 | 9,194 | 4,652 | ||||||||||||
OPERATING EXPENSE: | |||||||||||||||
Salaries and employee benefits | 1,837 | 1,646 | 926 | ||||||||||||
ESOP interest | 571 | 629 | 670 | ||||||||||||
Other expenses | 286 | 298 | 507 | ||||||||||||
Total operating expense | 2,694 | 2,573 | 2,103 | ||||||||||||
Income before equity in undistributed income of subsidiaries and income taxes | 26,590 | 6,621 | 2,549 | ||||||||||||
Equity in undistributed (loss) income of subsidiaries | (10,717) | 4,188 | 1,955 | ||||||||||||
Net income before taxes | 15,873 | 10,809 | 4,504 | ||||||||||||
Income tax benefit | (535) | (1,511) | (330) | ||||||||||||
Net income | $ 16,408 | $ 12,320 | $ 4,834 | ||||||||||||
[1] | Increase in the quarter ended December 31, 2017 is due to the enactment of the Tax Act on December 22, 2017. |
CONDENSED PARENT COMPANY FINA_5
CONDENSED PARENT COMPANY FINANCIAL STATEMENTS (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
OPERATING ACTIVITIES: | |||||||||||
Net income | $ 3,842 | $ 3,909 | $ 5,138 | $ 3,519 | $ (353) | $ 3,815 | $ 3,756 | $ 5,103 | $ 16,408 | $ 12,320 | $ 4,834 |
Gain on sales of securities, net | 281 | (52) | (1,139) | ||||||||
Change in other liabilities | 1,811 | (1,318) | (6,494) | ||||||||
Change in other assets | 1,628 | (3,549) | (1,564) | ||||||||
Net cash provided by operating activities | 24,638 | 18,861 | 930 | ||||||||
INVESTING ACTIVITIES: | |||||||||||
Sales of securities | 12,470 | 22,453 | 136,829 | ||||||||
Net cash (used in) provided by investing activities | (45,745) | (55,972) | 33,746 | ||||||||
FINANCING ACTIVITIES: | |||||||||||
Cash dividends paid | (4,641) | (3,579) | (2,439) | ||||||||
Common stock repurchased | (22,920) | (9,314) | (1,378) | ||||||||
Excess tax benefit from share-based compensation | 144 | ||||||||||
Issuance of common stock in connection with stock option exercises | 114 | 5,465 | 1,971 | ||||||||
Net cash provided by (used in) financing activities | 20,764 | (5,991) | 21,855 | ||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | (343) | (43,102) | 56,531 | ||||||||
Parent Company [Member] | |||||||||||
OPERATING ACTIVITIES: | |||||||||||
Net income | 16,408 | 12,320 | 4,834 | ||||||||
Equity in undistributed loss (income) of subsidiaries | 10,717 | (4,188) | (1,955) | ||||||||
Gain on sales of securities, net | (451) | ||||||||||
Change in other liabilities | (610) | (833) | (597) | ||||||||
Change in other assets | (919) | (2,330) | (271) | ||||||||
Other, net | 1,805 | 1,607 | 1,049 | ||||||||
Net cash provided by operating activities | 27,401 | 6,576 | 2,609 | ||||||||
INVESTING ACTIVITIES: | |||||||||||
Purchase of securities | (127) | (106) | (116) | ||||||||
Sales of securities | 127 | 106 | 116 | ||||||||
FINANCING ACTIVITIES: | |||||||||||
Cash dividends paid | (4,641) | (3,579) | (2,439) | ||||||||
Common stock repurchased | (22,920) | (9,314) | (1,378) | ||||||||
Excess tax benefit from share-based compensation | 156 | ||||||||||
Issuance of common stock in connection with stock option exercises | 114 | 5,465 | 1,971 | ||||||||
Net cash provided by (used in) financing activities | (27,447) | (7,428) | (1,690) | ||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | (46) | (852) | 919 | ||||||||
CASH AND CASH EQUIVALENTS | |||||||||||
Beginning of year | $ 120 | $ 972 | 120 | 972 | 53 | ||||||
End of year | $ 74 | $ 120 | 74 | 120 | 972 | ||||||
Supplemental cash flow information: | |||||||||||
Net change in cash due to broker for common stock repurchased | $ (83) | $ (151) | $ 455 |
SUMMARY OF QUARTERLY FINANCIA_3
SUMMARY OF QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||
Interest and dividend income | $ 20,189 | $ 19,605 | $ 20,464 | $ 18,732 | $ 19,239 | $ 18,516 | $ 18,327 | $ 17,957 | |||||||
Interest expense | 5,369 | 5,000 | 4,599 | 4,010 | 3,887 | 3,720 | 3,584 | 3,454 | $ 18,978 | $ 14,645 | $ 11,285 | ||||
Total interest and dividend income | 14,820 | 14,605 | 15,865 | 14,722 | 15,352 | 14,796 | 14,743 | 14,503 | 78,990 | 74,039 | 48,598 | ||||
Provision for loan losses | 300 | 350 | 750 | 500 | 510 | 200 | 350 | 350 | |||||||
Gain (loss) on disposal of other real estate owned | 48 | (58) | 67 | ||||||||||||
Gain (loss) on sales of securities, net | (31) | (49) | (201) | 70 | 46 | (64) | 12 | ||||||||
Unrealized (losses) gains on marketable equity securities | 48 | (43) | (41) | (106) | (142) | ||||||||||
Swap fee income | 131 | 111 | 116 | ||||||||||||
Bank-owned life insurance death benefit | 715 | 715 | |||||||||||||
Other non-interest income | 2,221 | 2,339 | 2,177 | 2,025 | 2,055 | 2,164 | 2,029 | 1,965 | |||||||
Non-interest income | 2,238 | 2,296 | 2,933 | 1,766 | 1,997 | 2,412 | 2,075 | 2,017 | 9,233 | 8,501 | 5,971 | ||||
Non-interest expense | 11,693 | 11,572 | 11,546 | 11,426 | 11,364 | 11,156 | 11,296 | 10,970 | 46,237 | 44,787 | 35,306 | ||||
Income before income taxes | 5,065 | 4,979 | 6,502 | 4,562 | 5,475 | 5,852 | 5,172 | 5,250 | 21,108 | 21,748 | 7,403 | ||||
Income tax provision | 1,223 | 1,070 | 1,364 | 1,043 | 5,828 | [1] | 2,037 | [1] | 1,416 | [1] | 147 | [1] | 4,700 | 9,428 | 2,569 |
Net income (loss) | $ 3,842 | $ 3,909 | $ 5,138 | $ 3,519 | $ (353) | $ 3,815 | $ 3,756 | $ 5,103 | $ 16,408 | $ 12,320 | $ 4,834 | ||||
Basic earnings per share (in dollars per share) | $ 0.14 | $ 0.14 | $ 0.18 | $ 0.12 | $ (0.01) | $ 0.13 | $ 0.13 | $ 0.17 | $ 0.57 | $ 0.41 | $ 0.25 | ||||
Diluted earnings per share (in dollars per share) | $ 0.14 | $ 0.14 | $ 0.18 | $ 0.12 | $ (0.01) | $ 0.13 | $ 0.12 | $ 0.17 | $ 0.57 | $ 0.41 | $ 0.24 | ||||
[1] | Increase in the quarter ended December 31, 2017 is due to the enactment of the Tax Act on December 22, 2017. |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] $ / shares in Units, $ in Thousands | 2 Months Ended |
Mar. 13, 2019USD ($)$ / sharesshares | |
Shares repurchased under plan | shares | 1,492,705 |
Average repurchase price | $ / shares | $ 9.92 |
Decrease in shareholders' equity | $ | $ 14,800 |