Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 02, 2018 | Jun. 30, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | Bancorp of New Jersey, Inc. | ||
Entity Central Index Key | 1,390,312 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 79,744,539 | ||
Entity Common Stock, Shares Outstanding | 6,947,690 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and due from banks | $ 1,627 | $ 2,628 |
Interest bearing deposits | 90,540 | 73,896 |
Federal funds sold | 452 | 452 |
Total cash and cash equivalents | 92,619 | 76,976 |
Interest bearing time deposits | 1,000 | 1,000 |
Securities available for sale | 53,234 | 61,589 |
Securities held to maturity (fair value $6,058 and $7,343 at December 31, 2017 and December 31, 2016, respectively) | 6,058 | 7,343 |
Restricted investment in bank stock, at cost | 1,380 | 1,983 |
Loans receivable | 721,191 | 660,571 |
Deferred loan fees and costs, net | (798) | (586) |
Allowance for loan losses | (8,317) | (8,287) |
Net loans | 712,076 | 651,698 |
Premises and equipment, net | 13,725 | 13,497 |
Accrued interest receivable | 2,695 | 2,366 |
Other real estate owned | 415 | 614 |
Other assets | 4,205 | 5,374 |
Total assets | 887,407 | 822,440 |
Deposits: | ||
Noninterest-bearing demand deposits | 133,661 | 137,564 |
Savings and interest bearing transaction accounts | 307,583 | 287,682 |
Time deposits $250 and under | 231,224 | 156,477 |
Time deposits over $250 | 115,825 | 136,265 |
Total deposits | 788,293 | 717,988 |
Borrowed funds | 13,385 | 25,008 |
Accrued expenses and other liabilities | 2,420 | 2,300 |
Total liabilities | 804,098 | 745,296 |
Stockholders' equity: | ||
Common stock, no par value, authorized 20,000,000 shares; issued and outstanding 6,932,690 at December 31, 2017 and 6,316,291 at December 31, 2016 | 70,182 | 61,524 |
Retained earnings | 13,482 | 15,813 |
Accumulated other comprehensive loss | (355) | (193) |
Total stockholders’ equity | 83,309 | 77,144 |
Total liabilities and stockholders’ equity | $ 887,407 | $ 822,440 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
CONSOLIDATED BALANCE SHEET | ||
Securities held to maturity | $ 6,058 | $ 7,343 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, authorized shares | 20,000,000 | 20,000,000 |
Common stock, issued shares | 6,932,690 | 6,316,291 |
Common stock, outstanding shares | 6,932,690 | 6,316,291 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Interest income: | ||
Loans, including fees | $ 30,707 | $ 30,242 |
Securities | 862 | 751 |
Interest-earning deposits in banks | 1,065 | 412 |
Federal funds sold | 7 | 5 |
Total interest income | 32,641 | 31,410 |
Interest expense: | ||
Savings and money markets | 1,756 | 1,523 |
Time deposits | 5,577 | 5,026 |
Borrowed funds | 278 | 425 |
Total interest expense | 7,611 | 6,974 |
Net interest income | 25,030 | 24,436 |
Provision for loan losses | 400 | 1,570 |
Net interest income after provision for loan losses | 24,630 | 22,866 |
Non interest income | ||
Fees and service charges on deposit accounts | 448 | 491 |
Total non interest income | 448 | 491 |
Non interest expense | ||
Salaries and employee benefits | 9,012 | 8,338 |
Occupancy and equipment expense | 2,966 | 2,755 |
FDIC and state assessments | 729 | 868 |
Legal fees | 398 | 260 |
Other real estate owned related expenses | 70 | 95 |
Professional fees | 1,248 | 1,543 |
Data processing | 1,433 | 1,201 |
Other operating expenses | 1,975 | 2,162 |
Total non interest expenses | 17,831 | 17,222 |
Income before income taxes | 7,247 | 6,135 |
Income tax expense | 3,673 | 2,134 |
Net income | $ 3,574 | $ 4,001 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.55 | $ 0.64 |
Diluted (in dollars per share) | $ 0.54 | $ 0.64 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Net income | $ 3,574 | $ 4,001 |
Other comprehensive income | ||
Unrealized holding gains (losses) on securities available for sale, net of deferred income tax expense of $69 and $62, respectively | (104) | 103 |
Comprehensive income | $ 3,470 | $ 4,104 |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Unrealized holding gains (losses) on securities available for sale, deferred income tax expense | $ 69 | $ 62 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Retained Earnings | Accumulated Other Comprehensive (Loss) | Total |
Balance at Dec. 31, 2015 | $ 60,509 | $ 12,940 | $ (296) | $ 73,153 |
Increase (Decrease) in Stockholders' Equity | ||||
Exercise of stock options | 730 | 730 | ||
Stock based compensation | 285 | 285 | ||
Dividends on common stock | (1,128) | (1,128) | ||
Net income | 4,001 | 4,001 | ||
Other comprehensive income, net of tax | 103 | 103 | ||
Balance at Dec. 31, 2016 | 61,524 | 15,813 | (193) | 77,144 |
Increase (Decrease) in Stockholders' Equity | ||||
Exercise of stock options | 2,993 | 2,993 | ||
Stock based compensation | 397 | 397 | ||
Dividends on common stock | (693) | (693) | ||
Net income | 3,574 | 3,574 | ||
5% Stock dividend (319,294 shares) | 5,270 | (5,270) | ||
Dividends in lieu of fractional shares of stock dividend | (2) | (2) | ||
Reclassification related to adoption of ASU 2018-02 | 58 | (58) | 58 | |
Other comprehensive income, net of tax | (104) | (104) | ||
Balance at Dec. 31, 2017 | $ 70,182 | $ 13,482 | $ (355) | $ 83,309 |
CONSOLIDATED STATEMENTS OF STO8
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | |
Exercise of stock options (in shares) | 273,381 |
Dividends on common stock (in dollars per share) | $ / shares | $ 0.10 |
Dividends Declared (in percent) | 5.00% |
Stock dividend (in shares) | 319,294 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 3,574 | $ 4,001 |
Adjustments to reconcile net income to net cash provided by Operating activities: | ||
Provision for loan losses | 400 | 1,570 |
Amortization of securities premiums | 193 | 146 |
Deferred taxes | 1,028 | (483) |
Depreciation | 669 | 665 |
Stock based compensation | 397 | 285 |
Accretion of net loan origination fees and costs | 212 | 205 |
Gain on sale of other real estate owned | (18) | |
Write down of other real estate owned | 41 | 56 |
Changes in operating assets and liabilities: | ||
Increase in accrued interest receivable | (329) | (62) |
Decrease in other assets | 210 | 202 |
Increase (decrease) in accrued interest payable and other liabilities | 121 | (199) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 6,498 | 6,386 |
Cash flows from investing activities: | ||
Purchases of securities available for sale | (15,064) | (47,000) |
Purchases of securities held to maturity | (10,148) | (7,343) |
Proceeds from maturities of securities held to maturity | 11,433 | 5,829 |
Proceeds from calls, maturities and other principal payments of securities available for sale | 23,052 | 50,180 |
Purchase of restricted investment in bank stock | (56) | (706) |
Proceeds from calls of restricted investment of bank stock | 659 | 743 |
Proceeds from sale of other real estate owned | 176 | |
Net increase in loans | (60,990) | (16,970) |
Purchases of premises and equipment | (897) | (3,662) |
NET CASH USED IN INVESTING ACTIVITIES | (51,835) | (18,929) |
Cash flows from financing activities: | ||
Net increase in deposits | 70,305 | 17,249 |
Net decrease in borrowed funds | (11,623) | (1,521) |
Dividends paid | (695) | (1,128) |
Proceeds from exercise of stock options | 2,993 | 730 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 60,980 | 15,330 |
Increase in cash and cash equivalents | 15,643 | 2,787 |
Cash and cash equivalents at beginning of year | 76,976 | 74,189 |
CASH AND CASH EQUIVALENTS, END OF YEAR | 92,619 | 76,976 |
Cash paid during the year for: | ||
Interest | 7,476 | 7,174 |
Taxes | $ 2,605 | 2,609 |
Supplemental disclosure of non-cash investing and financing transactions: | ||
Loans transferred to other real estate owned | $ 158 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | NOTE 1. Summary of Significant Accounting Policies Basis of Financial Statement Presentation The accompanying consolidated financial statements include the accounts of Bancorp of New Jersey, Inc. (together with its consolidated subsidiary, the “Company”), and its direct wholly-owned subsidiary, Bank of New Jersey (the “Bank”) and the Bank’s wholly-owned subsidiaries, BONJ-New York Corp., BONJ-New Jersey Investment Company, BONJ- Delaware Investment Company, and BONJ REIT Inc. Bancorp of New Jersey is incorporated under the laws of the State of New Jersey to serve as a holding company for the Bank. All significant inter-company accounts and transactions have been eliminated in consolidation. Nature of Operations The Company’s primary business is ownership and supervision of the Bank. The Bank commenced operations as of May 10, 2006. The Company, through the Bank, conducts a traditional commercial banking business, accepting deposits from the general public, including individuals, businesses, non-profit organizations, and governmental units. The Bank makes commercial loans, consumer loans and commercial real estate loans. In addition, the Bank provides other customer services and makes investments in securities, as permitted by law. Since opening in May, 2006, the Bank has established nine branch offices in addition to its main office. During the second quarter of 2009, the Bank formed BONJ-New York Corporation. The New York subsidiary was engaged in the business of acquiring, managing and administering portions of Bank of New Jersey’s investment and loan portofolios. During 2014, the Bank formed BONJ-Delaware Investment Company and BONJ-New Jersey Investment Company to use to acquire, manage and administer portions of the Bank of New Jersey’s investments and loans. Also in 2014, the Bank formed BONJ-REIT, Inc. This company was formed to acquire, manage and administer portions of the Bank’s loans. BONJ-Reit, Inc. is owned by BONJ-Delaware Investment Company. Use of Estimates Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of the deferred tax asset and the determination of other-than-temporary impairment on securities. While management uses available information to recognize estimated losses on loans, future additions may be necessary based on changes in economic conditions. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. These agencies may require the Company to recognize additions to the allowance based on their judgements of information available to them at the time of their examination. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period indicated. Actual results could differ significantly from those estimates. Significant Group of Concentration of Credit Risk The Company’s activities are, primarily, with customers located within Bergen County, New Jersey. The Company does not have any significant concentration to any one industry or customers within its primary service area. Note 3 describes the types of lending in which the Company engages. Although the Company actively manages the diversification of the loan portfolio, a substantial portion of the debtors’ ability to honor their contracts is dependent on the strength of the local economy. Cash and Cash Equivalents Cash and cash equivalents include cash and due from banks, interest-bearing deposits in banks, and federal funds sold, which are generally sold for one-day periods. Interest-bearing deposits in banks Interest-bearing deposits in banks are carried at cost, which approximate fair value. Regulators The Bank is subject to federal and New Jersey statutes applicable to banks chartered under the New Jersey banking laws. The Bank’s deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”). Accordingly, the Bank is subject to regulation, supervision, and examination by the New Jersey State Department of Banking and Insurance and the FDIC. The Company is subject to regulation, supervision and examination by the Board of Governors of the Federal Reserve System (“FRB”). Investment Securities The Company reports investment securities in one of the following categories: (i) held to maturity (management has the intent and ability to hold to maturity), which are reported at amortized cost; (ii) trading (held for current resale), which are reported at fair value, with unrealized gains and losses included in earnings and (iii) available for sale, which are reported at fair value, with unrealized gains and lossess excluded from earnings and reported as a separate component of stockholders’ equity. The Company has classified all of its holdings of investment securities as either held to matruity or available for sale. At the time a security is purchased, a determination is made as to the approproiate classification. Premiums and discounts on investment securities are amortized as expense and accreted as income over the estimated life of the respective security using a method that generally approximates the level-yield method. Gains and losses on the sales of investment securities are recognized upon realization, using the specific identification method and shown separately in the Consolidated Statements of Income. Management evaluates securities for other than temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirment to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the statement of income and 2) OTTI related to other factors, which is recognized in other comprehensive income (loss). The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of impairment is recognized through earnings. Premises and Equipment Premises and equipment are stated at historical cost, less accumulated depreciation and amortization. Depreciation of fixed assets is accumulated on a straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the term of the related lease. The estimated lives of the Company’s premises and equipment range from 3 years for certain computer related equipment to 39 years for building costs associated with newly constructed buildings. Maintenance and repairs are charged to expense in the year incurred. Loans and Allowance for Loan Losses Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balances, net of an allowance for loan losses and any deferred fees or costs. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the yield (interest income) of the related loans. The Company is generally amortizing these amounts over the contractual life of the loan. Premiums and discounts on purchased loans are amortized as adjustments to interest income using the effective yield method. For all commercial loans receivable, the accrual of interest on loans is discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest, even though the loan is currently performing. A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. When a loan is placed on nonaccrual status, unpaid interest credited to income in the current year is reversed and unpaid interest accrued in prior years is charged against the allowance for loan losses. Interest received on nonaccrual loans, including impaired loans, generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months) and the ultimate collectability of the total contractual principal and interest is no longer in doubt. The past due status of loans receivable is determined based on contractual due dates for loan payments. The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments. The allowance for loan losses represents management’s estimate of losses inherent in the loan portfolio as of the balance sheet date and is recorded as a reduction to loans. The reserve for unfunded lending commitments represents management’s estimate of losses inherent in its unfunded loan commitments and is recorded in other liabilities on the consolidated balance sheets. The allowance for loan losses is increased by the provision for loan losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance for loan losses, and subsequent recoveries, if any, are credited to the allowance. All, or part, of the principal balance of loans receivable are charged off to the allowance as soon as it is determined that the repayment of all, or part, of the principal balance is highly unlikely. Because all identified losses are immediately charged off, no portion of the allowance for loan losses is restricted to any individual loan or groups of loans, and the entire allowance is available to absorb any and all loan losses. The allowance for credit losses is maintained at a level considered adequate to provide for losses that are probable and reasonable to estimate. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based on the Company’s past loan loss experience, known and inherent risks in the loan portfolio and unfunded commitments, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available. The allowance for loan losses consists of general and unallocated components. The general component covers pools of loans by loan class including commercial loans not considered impaired, as well as smaller balance homogeneous loans, such as residential real estate, home equity and other consumer loans. These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these categories of loans, adjusted for qualitative factors. These qualitative risk factors include: 1. Lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices. 2. National, regional, and local economic and business conditions as well as the condition of various market segments, including the value of underlying collateral for collateral dependent loans. 3. Nature and volume of the portfolio and terms of loans. 4. Experience, ability, and depth of lending management and staff. 5. Volume and severity of past due, classified and nonaccrual loans as well as and other loan modifications. 6. Quality of the Company’s loan review system, and the degree of oversight by the Company’s Board of Directors. 7. Existence and effect of any concentrations of credit and changes in the level of such concentrations. 8. Effect of external factors, such as competition and legal and regulatory requirements. Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation. Adjustments to the factors are supported through documentation of changes in conditions in a narrative accompanying the allowance for loan loss calculation. An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis 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. Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (“TDR”) and classified as impaired. All or part of the principal balance of a loan is charged-off for an impaired loan if its carrying value exceeds its estimated fair value. The estimated fair values of substantially all of the Company’s impaired loans are measured based on the estimated fair value of the loan’s collateral. For commercial loans secured by real estate, estimated fair values are determined primarily through third-party appraisals. When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the original appraisal and the condition of the property. Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include estimated costs to sell the property. For commercial loans secured by non-real estate collateral, such as accounts receivable, inventory and equipment, estimated fair values are determined based on the borrower’s financial statements, inventory reports, accounts receivable aging or equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual residential mortgage loans, home equity loans and other consumer loans for impairment disclosures, unless such loans are the subject of a TDR agreement. Loans whose terms are modified are classified as TDRs if the Company grants such borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a TDR generally involve a temporary reduction in interest rate or an extension of a loan’s stated maturity date. Loans classified as TDRs are designated as impaired and evaluated for impairment until they are ultimately repaid in full or foreclosed and sold. Nonaccrual TDR are restored to accrual status if principal and interest payments, under the modified terms, are current for six consecutive months after modification. The Company’s methodology for the determination of the allowance for loan losses includes further segregation of loan classes into risk rating categories. The borrower’s overall financial condition, repayment sources, guarantors and value of collateral, if appropriate, are evaluated annually for commercial loans or when credit deficiencies arise, such as delinquent loan payments, for commercial and consumer loans. Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful and loss. Loans classified as special mention have potential weaknesses that deserve management’s close attention. If uncorrected, the potential weaknesses may result in deterioration of the repayment prospects. Loans classified substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They include loans that are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified doubtful have all the weaknesses inherent in loans classified substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as a loss are considered uncollectible and are charged to the allowance for loan losses. Loans not classified are rated pass. In addition to the Company’s methodology, Federal regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses and may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination, which may not be currently available to management. Management believes the level of the allowance for loan losses was adequate to absorb losses inherent in the loan portfolio as of December 31, 2017. Other Real Estate Owned Other real estate owned consists of real estate acquired by foreclosure and is initially recorded at fair value, less estimated selling costs. Subsequent to foreclosure, revenues are included in non-interest income and expenses from operations and lower of cost or market changes in the valuation are included in non-interest expenses. Stock-Based Compensation Accounting Standards Codification (“ASC”) Topic 718 Compensation-Stock Compensation addresses the accounting for share-based payment transactions in which an enterprise receives employee service in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. Guidance requires an entity to recognize the grant-date fair value of stock options and other equity-based compensation issued to employees within the income statement using a fair-value-based method. The Company accounts for stock options under these recognition and measurement principles. The Company recorded stock-based compensation expense of $397 thousand and $285 thousand during 2017 and 2016, respectively. At December 31, 2017, the Company had $132 thousand of unrecognized compensation expense related to stock options. At December 31, 2017, the Company had $324 thousand of unrecognized compensation expense related to unvested restricted stock. Income Taxes The Company uses the asset and liability method of accounting for income taxes. There are two components of the income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted law to the taxable income or excess of deductions and revenues. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. As required by ASC Topic 740, Income Taxes , the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. The Bank applied ASC Topic 740 to all tax positions for which the statute of limitations remained open. There was no material effect on the Company’s consolidated financial position or results of operations and no adjustment to retained earnings. The Company recognizes interest and penalties on income taxes as a component of income tax. Earnings Per Share Basic earnings per share excludes dilution and represents the effect of earnings upon the weighted average number of shares outstanding for the period. Diluted earnings per share reflects the effect of earnings upon weighted average shares including the potential dilution that could occur if securities or contracts to issue common stock were converted or exercised, utilizing the treasury stock method. Comprehensive Income Comprehensive income consists of net income for the current period and income, expenses, or gains and losses not included in the Consolidated Statements of Income and which are reported directly as a separate component of stockholders’ equity. Advertising The Company expenses advertising costs as incurred. Advertising expenses totaled $216 thousand and $308 thousand for 2017 and 2016, respectively and are included in other operating expenses. Transfer of Financial Assets Transfers of financial assets, including loan and loan participation sales, are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity, or the ability to unilaterally cause the holder to return specific assets. Restricted Investment in Bank Stock Restricted investment in bank stocks which represent required investments in the common stock of correspondent banks, is carried at cost and consists of the common stock of the Federal Home Loan Bank of New York (“FHLB”) of $1.28 million and Atlantic Community Bankers Bank, (“ACBB”) of $100 thousand respectively as of December 31, 2017. Federal law requires a member institution of the FHLB to hold stock according to a predetermined formula. Management believes no impairment charge is necessary related to the FHLB or ACBB restricted stock as of December 31, 2017. Restrictions on Cash and Amounts Due From Banks The Bank is required to maintain average balances on hand or with the Federal Reserve Bank of New York (“FRBNY”). At December 31, 2017 and 2016, these reserve balances amounted to $3.8 million and $5.9 million, respectively, and are reflected in interest bearing deposits in banks. |
Securities
Securities | 12 Months Ended |
Dec. 31, 2017 | |
Securities | |
Securities | NOTE 2. Securities A summary of securities held to maturity and securities available for sale at December 31, 2017 and 2016 is as follows (in thousands): Gross Gross Amortized Unrealized Unrealized Fair 2017 Cost Gains Losses Value Securities Held to Maturity: Obligations of states and political subdivisions $ 6,058 $ — $ — $ 6,058 Total securities held to maturity 6,058 — — 6,058 Securities Available for Sale: U.S. Treasury securities 6,286 — (124) 6,162 Government sponsored enterprise obligations Agency backed 33,453 — (218) 33,235 Mortgage backed 13,986 — (149) 13,837 Total securities available for sale 53,725 — (491) 53,234 $ 59,783 $ — $ (491) $ 59,292 Gross Gross Amortized Unrealized Unrealized Fair 2016 Cost Gains Losses Value Securities Held to Maturity: Obligations of states and political subdivisions $ 7,343 $ — $ — $ 7,343 Total securities held to maturity 7,343 — — 7,343 Securities Available for Sale: U.S. Treasury securities 6,400 — (132) 6,268 Government sponsored enterprise obligations 55,506 6 (191) 55,321 Total securities available for sale 61,906 6 (323) 61,589 $ 69,249 $ 6 $ (323) $ 68,932 For the year ended December 31, 2017 and 2016, the Company did not sell any securities from its available for sale portfolio and therefore no loss or gain was recognized. The Company did not sell any securities from its held to maturity portfolio in 2017 or 2016. The unrealized losses, categorized by the length of time of continuous loss position, and the fair value of related securities available for sale at December 31, 2017 and 2016 are as follows (in thousands): Less than 12 Months More than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized 2017 Value Losses Value Losses Value Losses Securities Available for Sale: U.S. Treasury securities — — 6,162 (124) 6,162 (124) Government sponsored enterprise obligations 23,691 (201) 23,381 (166) 47,072 (367) Total securities available for sale 23,691 (201) 29,543 (290) 53,234 (491) Total securities $ 23,691 $ (201) $ 29,543 $ (290) $ 53,234 $ (491) Less than 12 Months More than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized 2016 Value Losses Value Losses Value Losses Securities Available for Sale: U.S. Treasury securities — — 6,268 (132) 6,268 (132) Government sponsored enterprise obligations 34,473 (158) 6,966 (33) 41,439 (191) Total securities available for sale 34,473 (158) 13,234 (165) 47,707 (323) Total securities $ 34,473 $ (158) $ 13,234 $ (165) $ 47,707 $ (323) Unrealized losses at December 31, 2017 consisted of losses on twelve investments in government sponsored enterprise obligations, and two in U. S. Treasury securities, all of which were caused by interest rate increases. Nine of the investments with unrealized losses at December 31, 2017 were in a loss position for more than twelve months. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. Because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at December 31, 2017. The following table sets forth as of December 31, 2017, the maturity distribution of the Company’s held to maturity and available for sale portfolios (in thousands): Securities Held to Maturity Securities Available for Sale Amortized Fair Amortized Fair Cost Value Cost Value One year or less $ 6,058 $ 6,058 $ 18,047 $ 17,933 After one to five years — — 21,692 21,465 Greater than five years — — 13,986 13,836 Total $ 6,058 $ 6,058 $ 53,725 $ 53,234 |
Loans and Allowance for Loan Lo
Loans and Allowance for Loan Losses | 12 Months Ended |
Dec. 31, 2017 | |
Loans and Allowance for Loan Losses | |
Loans and Allowance for Loan Losses | NOTE 3. Loans and Allowance for Loan Losses Loans at December 31, 2017 and 2016, are summarized as follows (in thousands): December 31, 2017 December 31, 2016 Commercial real estate $ 573,941 $ 492,296 Residential mortgages 66,497 78,961 Commercial and industrial 27,237 30,259 Home equity 53,199 58,399 Consumer 317 656 $ 721,191 $ 660,571 The Company grants loans primarily to residents and businesses within its local New Jersey market area. Its borrowers’ abilities to repay their obligations are dependent upon various factors, including the borrowers’ income and net worth, cash flows generated by the underlying collateral, value of the underlying collateral and priority of the Company’s lien on the property. Such factors are dependent upon various economic conditions and individual circumstances beyond the Company’s control; the Company is therefore subject to risk of loss. The Company believes its lending policies and procedures adequately manage the potential exposure to such risks and an allowance for loan losses is provided for management’s best estimate of probable loan losses. The following table presents the activity in the allowance for loan losses and recorded investment in loan receivables as of and for the year ended December 31, 2017 (in thousands): Commercial Residential Commercial Real Estate Mortgages & Industrial Home Equity Consumer Unallocated Total Allowance for loan losses: Beginning Balance $ 5,925 $ 554 $ 809 $ 425 $ 6 $ 568 $ 8,287 Charge-offs — (49) (90) (171) (97) — (407) Recoveries 30 — 1 — 6 — 37 Provision (88) (133) (145) 149 135 482 400 Ending balance $ 5,867 $ 372 $ 575 $ 403 $ 50 $ 1,050 $ 8,317 Ending balance: individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — Ending balance: collectively evaluated for impairment $ 5,867 $ 372 $ 575 $ 403 $ 50 $ 1,050 $ 8,317 Loan receivables: Ending balance $ 573,941 $ 66,497 $ 27,237 $ 53,199 $ 317 $ — $ 721,191 Ending balance: individually evaluated for impairment $ 11,554 $ 8,966 $ 2,957 $ 3,214 $ — $ — $ 26,691 Ending balance: collectively evaluated for impairment $ 562,387 $ 57,531 $ 24,280 $ 49,985 $ 317 $ — $ 694,500 The following table presents the activity in the allowance for loan losses and recorded investment in loan receivables as of and for the year ended December 31, 2016 (in thousands): Commercial Residential Commercial Real Estate Mortgages & Industrial Home Equity Consumer Unallocated Total Allowance for loan losses: Beginning Balance $ 5,566 $ 572 $ 1,066 $ 573 $ 39 $ 204 $ 8,020 Charge-offs — (158) (1,026) (155) (1) — (1,340) Recoveries 35 — 2 — — — 37 Provision 324 140 767 7 (32) 364 1,570 Ending balance $ 5,925 $ 554 $ 809 $ 425 $ 6 $ 568 $ 8,287 Ending balance: individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — Ending balance: collectively evaluated for impairment $ 5,925 $ 554 $ 809 $ 425 $ 6 $ 568 $ 8,287 Loan receivables: Ending balance $ 492,296 $ 78,961 $ 30,259 $ 58,399 $ 656 $ — $ Ending balance: individually evaluated for impairment $ 10,485 $ 9,731 $ 3,257 $ 4,543 $ — $ — $ 28,016 Ending balance: collectively evaluated for impairment $ 481,811 $ 69,230 $ 27,002 $ 53,856 $ 656 $ — $ 632,555 The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The following tables present the classes of the loan portfolio summarized by the past due status as of December 31, 2017 and 2016 (in thousands): 30-59 Days 60-89 Days 90+ Days Total Past Total Loans Nonaccrual 2017 Past Due Past Due Past Due Due Current Receivables Loans Commercial real estate $ 209 $ — $ 3,344 $ 3,553 $ 570,388 $ 573,941 $ 3,344 Residential mortgages 2,463 974 9,052 12,489 54,008 66,497 9,052 Commercial and industrial — 25 2,957 2,982 24,255 27,237 2,957 Home equity 1,823 775 3,073 5,671 47,528 53,199 3,073 Consumer — — — — 317 317 — $ 4,495 $ 1,774 $ 18,426 $ 24,695 $ 696,496 $ 721,191 $ 18,426 30-59 Days 60-89 Days Greater than Total Past Total Loans Nonaccrual 2016 Past Due Past Due 90 Days Due Current Receivables Loans Commercial real estate $ 2,744 $ — $ 5,992 $ 8,736 $ 483,560 $ 492,296 $ 5,992 Residential mortgages — — 3,907 3,907 75,054 78,961 3,907 Commercial and industrial — — 3,257 3,257 27,002 30,259 3,257 Home equity 1,590 — 5,597 7,187 51,212 58,399 5,597 Consumer — — — — 656 656 — $ 4,334 $ — $ 18,753 $ 23,087 $ 637,484 $ 660,571 $ 18,753 The following tables present the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within the Company’s internal risk rating system as of December 31, 2017 and 2016 (in thousands): Commercial Residential Commercial 2017 Real Estate Mortgages & Industrial Home Equity Consumer Total Pass $ 562,387 $ 56,407 $ 24,051 $ 49,985 $ 317 $ 693,147 Special Mention — 1,124 229 — — 1,353 Substandard 11,554 8,966 2,957 3,214 — 26,691 Doubtful — — — — — — $ 573,941 $ 66,497 $ 27,237 $ 53,199 $ 317 $ 721,191 Commercial Residential Commercial 2016 Real Estate Mortgages & Industrial Home Equity Consumer Total Pass $ $ $ $ $ $ Special Mention 600 2,026 — — Substandard 9,731 — Doubtful — — — — — — $ $ $ $ $ $ As of December 31, 2017 and 2016 the Company had no accruing loans greater than 90 days delinquent. The following tables provide information about the Company’s impaired loans as of and for the years ended December 31, 2017 and 2016 (in thousands): Unpaid Recorded Principal Related 2017 Investment Balance Allowance Commercial real estate $ 11,554 $ 11,578 $ — Residential mortgages 8,966 10,287 — Commercial and industrial 2,957 3,057 — Home equity 3,214 3,509 — Total impaired loans $ 26,691 $ 28,431 $ — Unpaid Recorded Principal Related 2016 Investment Balance Allowance Commercial real estate $ 10,485 $ 10,509 $ — Residential mortgages 9,731 10,804 — Commercial and industrial 3,257 3,257 — Home equity 4,543 4,675 — Total impaired loans $ $ $ — Year Ended Year Ended December 31, 2017 December 31, 2016 Average Interest Average Interest Recorded Income Recorded Income Investment Received Investment Received Impaired loans with no specific reserves: Commercial real estate 10,232 — 15,031 — Residential mortgages 9,360 — 4,429 — Commercial and industrial 3,149 — 3,256 — Home equity 3,205 — 4,834 — Consumer — — — — $ 25,946 $ — $ 27,550 $ — If interest had been accrued on these non-accrual loans, the interest income recognized would have been approximately $636 thousand and $354 thousand for the years ended December 31, 2017 and 2016 respectively. The following table presents TDR loans (all of which are classified as impaired loans) as of December 31, 2017 and 2016 (in thousands): Accrual Number of Nonaccrual Number of 2017 Status Loans Status Loans Total Commercial real estate $ — — $ 338 1 $ 338 Residential mortgages 637 3 7,446 10 8,083 Home equity — — 2,959 8 2,959 $ 637 3 $ 10,743 19 $ 11,380 Accrual Number of Nonaccrual Number of 2016 Status Loans Status Loans Total Commercial real estate $ — — $ 338 1 $ 338 Residential mortgages 521 2 3,477 5 3,998 Home equity 103 2 3,441 7 3,544 $ 624 4 $ 7,256 13 $ 7,880 The following table summarizes information in regards to troubled debt restructurings that occurred during the year ended December 31, 2017 and 2016 (in thousands): Post- Pre-Modification Modification Outstanding Outstanding Number of Recorded Recorded 2017 Loans Investments Investments Residential mortgages 4 $ 3,695 $ 3,695 Home equity 1 320 320 5 $ 4,015 $ 4,015 Post- Pre-Modification Modification Outstanding Outstanding Number of Recorded Recorded 2016 Loans Investments Investments Residential mortgages 2 $ 543 $ 304 Home equity 6 2,730 2,631 8 $ 3,273 $ 2,935 The following table displays the nature of modifications during the year ended December 31, 2017 (in thousands): Rate Term Interest Only Payment Combination Total 2017 Modification Modification Modification Modification Modification Modifications Pre-modification outstanding recorded investment: Residential mortgages $ — $ 3,695 $ — $ — $ — $ 3,695 Home equity — 320 — — — 320 $ — $ 4,015 $ — $ — $ — $ 4,015 During the years ended December 31, 2017 and 2016, the Company had no loans meeting the definition of a TDR which were placed on default status. The Company may obtain physical possession of real estate collateralizing loans via foreclosure or an in-substance repossession into other real estate owned. As of December 31, 2017 and 2016, the Company has no foreclosed residential real estate properties. In addition, as of December 31, 2017 and 2016, the Company had loans with a carrying value of $2.6 million and $1.7 million respectively, collateralized by residential real estate property for which formal foreclosure proceedings were in process. |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Premises and Equipment | |
Premises and Equipment | NOTE 4. Premises and Equipment At December 31, 2017 and 2016, premises and equipment consists of the following (in thousands): 2017 2016 Land $ 4,828 $ 4,828 Building 10,468 10,038 Furniture and fixtures 1,309 1,131 Equipment 2,512 2,223 19,117 18,220 Less accumulated depreciation and amortization 5,392 4,723 Total premises and equipment, net $ 13,725 $ 13,497 Depreciation expense amounted to $669 thousand and $665 thousand for the years ended December 31, 2017 and 2016, respectively. |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2017 | |
Deposits | |
Deposits | NOTE 5. Deposits At December 31, 2017 and 2016, respectively, a summary of the maturity of time deposits (which includes certificates of deposit and individual retirement account (IRA) certificates) is as follows (in thousands): 2017 2016 3 months or less $ 43,535 $ 59,889 Over 3 months through 12 months 95,818 92,044 Over 1 year through 2 years 62,356 51,818 Over 2 years through 3 years 29,110 31,135 Over 3 years through 4 years 40,250 9,976 Over 4 years through 5 years 75,980 47,880 $ 347,049 $ 292,742 At December 31, 2017 and 2016, the Company’s brokered deposits are as follows: 2017 2016 CDARS* Public Funds Reciprocal $ 8,191 $ 7,311 Non-Public Funds Reciprocal 15,186 14,898 FTN** Non-Reciprocal Funds 2,063 4,991 25,440 27,200 *Certificate of Deposit Account Registry Service **First Tennessee National Bank At December 31, 2017 and 2016, deposits of certain municipalities and local government agencies were collateralized by a Municipal Letter of Credit from FHLB in the amount of $40 million and $30 million and securities with a fair value of $20.0 million and $37.2 million, respectively. |
Borrowed Funds
Borrowed Funds | 12 Months Ended |
Dec. 31, 2017 | |
Borrowed Funds. | |
Borrowed Funds | NOTE 6. Borrowed Funds Borrowings may consist of fixed rate advances from the FHLB as well as short term borrowings through lines of credit with other financial institutions. Information concerning long-term borrowings at December 31, 2017 and 2016 is as follows (in thousands): 2017 Original Amount Rate Term (years) Maturity Fixed Rate Amortizing Note 1,624 1.50 % June 2019 Fixed Rate Amortizing Note 2,563 1.51 % July 2019 Fixed Rate Amortizing Note 2,511 1.51 % August 2019 Fixed Rate Amortizing Note 2,766 2.02 % August 2021 Fixed Rate Amortizing Note 3,921 1.48 % October 2019 $ 13,385 1.61 % 2016 Original Amount Rate Term (years) Maturity Fixed Rate Medium Note $ 5,000 0.98 % 1 April 2017 Fixed Rate Amortizing Note 2,630 1.50 % 5 June 2019 Fixed Rate Amortizing Note 4,070 1.51 % 5 July 2019 Fixed Rate Amortizing Note 3,916 1.51 % 5 August 2019 Fixed Rate Amortizing Note 3,469 2.02 % 7 August 2021 Fixed Rate Amortizing Note 5,923 1.48 % 5 October 2019 $ 25,008 1.47 % At December 31, 2017 and 2016, loans with a carrying value of approximately $149.3 million and $86.2 million and securities with a fair value of $11.0 million and $11.1 million, respectively, were pledged to secure advances from FHLB. The Company has a $5.0 million line of credit with the Atlantic Community Bankers Bank. In addition, the Bank has a $16.0 million overnight line of credit facility available with Zions First National Bank, a $12.0 million overnight line of credit facility available with First Tennessee Bank and a $10.0 million overnight line of credit with Atlantic Community Bankers Bank for the purchase of federal funds in the event that temporary liquidity needs arise. Additionally, the Bank is a member of the FHLB. The FHLB relationship provides additional borrowing capacity. There were no outstanding borrowings on any of the lines of credit at December 31, 2017 and December 31, 2016. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Income Taxes | NOTE 7. Income Taxes The current and deferred amounts of the provision for income taxes expense (benefit) for the years ended December 31, 2017 and 2016 is as follows (in thousands): 2017 2016 Current tax expense: Federal $ 2,259 $ 2,455 State 268 162 Deferred income tax benefit: Federal (218) (383) Re-measurement of deferred taxes due to Tax Cuts and Jobs Act 1,393 — State (29) (100) $ 3,673 $ 2,134 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2017 and 2016 are as follows (in thousands): 2017 2016 Deferred tax assets: Start up expenses $ 82 $ 152 Allowance for loan losses 2,488 3,541 Accrued expenses 224 299 Stock compensation plans 129 451 Unrealized losses on securities available for sale 135 124 Other 728 605 Total 3,786 5,172 Deferred tax liabilities: Deferred loan costs (52) (83) Prepaid expenses (133) (120) Depreciation (191) (424) Total (376) (627) Net deferred tax asset $ 3,410 $ 4,545 The realizability of deferred tax assets is dependent upon a variety of factors, including the generation of future taxable income, the existence of taxes paid and recoverable, the reversal of deferred tax liabilities and tax planning strategies. During 2017 and 2016, the Company sustained continued profitability, continued to pay taxes, and recognized deferred tax benefits. Based upon these and other factors, management believes it is more likely than not that the Company will realize the benefits of these remaining deferred tax assets. The net deferred tax asset is included in other assets on the Consolidated Balance Sheets. The Tax Cut and Jobs Act that was signed into law on December 22, 2017 resulted in re-measurement of the Company’s deferred tax assets and liabilities at the new 21% federal tax rate compared to a 34% federal tax rate in 2016. The impact of the re-measurement is recorded as a component of income tax expense in the Consolidated Statements of Income for the year ended December 31, 2017. Deferred tax assets related to securities available for sale losses that were revalued as of December 31, 2017 created a “stranded tax effect” in Accumulated Other Comprehensive Income (AOCI) due to the enactment of the Tax Cuts and Jobs Act. The issue arose due to the nature of U.S GAAP recognition of the effect on tax rate changes on the deferred tax assets related to securities available for sale. As mentioned above, the entirety of the revaluation was recorded as an adjustment to income tax provision. There was no corresponding impact to AOCI. In January 2018, the FASB issued ASU 2018-02 (see Note 18). The company early adopted the provisions of the ASU 2018-02 and recorded a one-time reclassification of $58 thousand from AOCI to retained earnings for stranded tax effects resulting from the newly enacted corporate tax rate. The amount of the reclassificaiton was the difference between the 34% historical corporate tax rate and the newly enacted 21% corporate tax rate. See Statement of Changes in Stockholders’ Equity for details of the reclassification. A reconciliation between the amount of the effective income tax expense and the income tax expense that would have been provided at the federal statutory rate of 34% is shown below (in thousands): 2017 2016 Federal income tax expense at statutory rate $ 2,464 $ 2,086 Increase (decrease) in taxes resulting from: State taxes, net of federal income tax expense 158 41 Tax exempt income (20) (13) Stock-based compensation (317) 21 Meals and entertainment 4 10 Re-measurement of deferred taxes due to Tax Cuts and Jobs Act 1,393 — Other (9) (11) Effective Income Tax $ 3,673 $ 2,134 The Company is subject to income taxes in the U.S. and various states. Tax regulations are subject to interpretation of the related tax laws and regulations and require significant judgment to apply. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2017 | |
Leases | |
Leases | NOTE 8. Leases The Company leases facilities under operating leases which expire at various dates through December 31, 2026. These leases do contain certain options to renew the leases. Rental expense amounted to $1.4 million, for the years ended December 31, 2017 and December 31, 2016, respectively. The following is a schedule of future minimum lease payments (exclusive of payments for maintenance, insurance, taxes and any other costs associated with offices) for operating leases with initial or remaining terms in excess of one year from December 31, 2017 (in thousands): Year ending December 31, 2018 $ 1,396 2019 1,174 2020 879 2021 648 2022 369 Thereafter 863 $ 5,329 |
Related-party Transactions
Related-party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related-party Transactions | |
Related-party Transactions | NOTE 9. Related-party Transactions The Company has made, and expects to continue to make, loans in the future to its directors and executive officers and their family members, and to firms, corporations, and other entities in which they and their family members maintain interests. All such loans require the prior approval of the Company’s Board of Directors. None of those loans were nonaccrual, past due, or restructures at December 31, 2017 while five of such loans were nonaccrual at December 31, 2016. The borrower of these five loans is no longer a related party, effective January 13, 2017 and the reduction in total related-party loan balances is reflected in the table below. Related party deposit balances were $34.9 million and $55.5 million at December 31, 2017 and 2016, respectively. The following table represents a summary of related-party loan activity during the years ended December 31, 2017 and 2016 (in thousands): 2017 2016 Outstanding loans at beginning of the year $ 22,994 $ 26,791 Advances 7,039 4,098 Repayments (5,314) (7,895) Former director (7,473) — Outstanding loans at end of the year $ 17,246 $ 22,994 Two of the Company’s directors have acted as the Company’s legal counsel on several loan closings. During 2017 and 2016 the total cost of such work has been reimbursed by the respective loan customers and totals $119 thousand and $158 thousand respectively. Additionally, these directors have acted as legal counsel to the Bank on several matters. The total amount paid for legal fees, for non-loan related matters was approximately $15 thousand and $7 thousand for the years ended December 31, 2017 and 2016, respectively. The Company’s or the Bank’s commercial insurance policy, as well as other policies, has been placed with various insurance carriers by an insurance agency of which one of the Company’s directors is the president. Gross insurance premiums paid to carriers through this agency was approximately $220 thousand for the years ended December 31, 2017 and 2016, respectively. The Bank rents office space from entities related to two of the Company’s directors. The total amount of rent expense to these entities was $226 thousand and $443 thousand for the years ended December 31, 2017 and 2016, respectively. The Audit Committee of the Board of Directors or the disinterested directors have reviewed all transactions and relationships with the directors and businesses in which they maintain interests and have approved each such transaction and relationship. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share | |
Earnings Per Share | NOTE 10. Earnings Per Share The Company’s calculation of earnings per share is as follows: For the year ended December 31, (In thousands except per share data) 2017 2016 Net income available to common stockholders $ 3,574 $ 4,001 Weighted average number of common shares outstanding - basic 6,556 6,274 Basic earnings per share $ 0.55 $ 0.64 Net income available to common stockholders $ 3,574 $ 4,001 Weighted average number of common shares outstanding 6,556 6,274 Effect of dilutive options 16 — Weighted average number of common shares outstanding- diluted 6,572 6,274 Diluted earnings per share $ 0.54 $ 0.64 Non-qualified options to purchase 97,453 shares of common stock at a weighted average price of $11.62 were included in the computation of diluted earnings per share for the year ended December 31, 2017. Non-qualified options to purchase 310,000 shares of common stock at a weighted average price of $11.50; and incentive stock options to purchase 30,000 shares of common stock at a weighted average price of $11.50; non-qualified stock options to purchase 10,000 shares of common stock at a weighted average price of $11.23; and 28,000 unvested shares of restricted stock were included in the computation of diluted earnings per share for the year ended December 31, 2016. |
Stockholders' Equity and Divide
Stockholders' Equity and Dividend Restrictions | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity and Dividend Restrictions | |
Stockholders' Equity and Dividend Restrictions | NOTE 11. Stockholders’ Equity and Dividend Restrictions In 2017, the Company declared a 5% stock dividend and a cash dividend in the amount of $0.10 per share. The stock dividend was paid to shareholders on August 1, 2017 and the cash dividend was paid to shareholders on December 27, 2017. In 2016, the Company declared three cash dividends in the amount of $0.06 per share. These cash dividends were paid to shareholders on March 31, 2016, June 30, 2016 and September 30, 2016. The decision to pay, as well as the timing and amount of any future dividends to be paid by the Company will be determined by the board of directors, giving consideration to the Company’s earnings, capital needs, financial condition, regulatory requirements and other relevant factors. Under applicable New Jersey law, the Company is permitted to pay dividends on its capital stock if, following the payment of the dividend, it is able to pay its debts as they become due in the usual course of business, or its total assets are greater than its total liabilities. Further, it is the policy of the FRB that bank holding companies should pay dividends only out of current earnings and only if future retained earnings would be consistent with the holding company’s capital, liquidity, asset quality and financial condition. As part of its supervisory authority, the FRB may impose informal or formal restrictions on the Company’s ability to pay dividends, including requiring the non-objection of the FRB for payment of any dividends. Under the New Jersey Banking Act of 1948, as amended, the Bank may declare and pay dividends only if, after payment of the dividend, the capital stock of the Bank will be unimpaired and either the Bank will have a surplus of not less than 50% of its capital stock or the payment of the dividend will not reduce the Bank’s surplus. The FDIC prohibits payment of cash dividends if, as a result, the Bank would be undercapitalized. |
Benefit Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Benefit Plans | |
Benefit Plans | NOTE 12. Benefit Plans Stock option and restricted share information, and the related activity, for the periods presented have been adjusted for a 5% stock dividend declared on June 26, 2017. 2006 Stock Option Plan During 2006, the Bank’s stockholders approved the 2006 Stock Option Plan. At the time of the holding company reorganization, the 2006 Stock Option Plan was assumed by the Company. The plan allows the Company to grant options to directors and employees of the Company to purchase up to 251,983 shares of the Company’s common stock. At December 31, 2017, stock options to purchase 220,659 shares, net of forfeitures have been issued to directors and employees of the Company under the 2006 Stock Option Plan, of which options to purchase 51,253 shares were outstanding. There are no shares available for grants under the 2006 Stock Options Plan as the plan has expired. During 2016, the Company granted 67,158 Non-Qualified Stock Options (“NQO”) to employees of the Company. The fair value of the NQOs granted was $2.63 per NQO on the date of grant. The fair value of the NQOs was determined using the Black-Scholes option pricing model. The following assumptions were used in determining the fair value of the NQOs granted: expected dividend yield of 2.149%, risk free interest rate of 1.57%, expected volatility of 26.54% and expected lives of 10 years. One third of the NQOs granted vest each on February 1, 2017, February 1, 2018 and February 1, 2019. Under the 2006 Stock Option Plan, there were 34,545 unvested options at December 31, 2017 and 59,283 unvested options at December 31, 2016. At December 31, 2017 there was $49 thousand of unrecognized compensation expense related to unvested options. For the three months and year ended December 31, 2017, $1 thousand and $49 thousand, respectively was recorded as expense for options that have been issued through the 2006 Plan. For the three months and year ended December 31, 2016, $29 thousand and $48 thousand, respectively was recorded as expense for options that have been issued through the 2006 Plan. During the year ended December 31, 2017 options to purchase 31,500 shares and 881 shares of common stock at a price of $10.95 and $10.64, respectively, per share were exercised for a total price of $354 thousand. A summary of stock option activity under the 2006 Stock Option Plan during the years ended December 31, 2016 and 2017 are presented below: Weighted Weighted Average Average Aggregate Remaining Number of Exercise Price Intrinsic Value Contractual Shares per Share (1) Term Outstanding at December 31, 2015 167,685 $ 9.73 Granted 67,158 10.64 Forfeited (59,745) 10.73 Exercised (84,315) 8.66 Outstanding at December 31, 2016 $ $ 191,552 Exercisable at December 31, 2016 $ $ 60,000 Weighted Weighted Average Average Aggregate Remaining Number of Exercise Price Intrinsic Value Contractual Shares per Share (1) Term Outstanding at December 31, 2016 90,783 $ 10.74 Forfeited (7,149) 10.64 Exercised (32,381) 10.94 Outstanding at December 31, 2017 $ $ 390,035 Exercisable at December 31, 2017 $ $ 127,148 (1) The aggregate intrinsic value of a stock option in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had they exercised their options on December 31, 2017. This amount changes based on the changes in the market value in the Company’s common stock. 2007 Director Plan During 2007, the Bank’s stockholders approved the 2007 Non-Qualified Stock Option Plan for Directors (the “2007 Director Plan”). At the time of the holding company reorganization, the 2007 Director Plan was assumed by the Company. This plan provides for 504,000 options to purchase shares of the Company’s common stock to be issued to non-employee directors of the Company. At December 31, 2017, stock options to purchase 404,600 shares, net of forfeitures, have been issued to non-employee directors of the Company under the 2007 Director Plan. No options to purchase shares were outstanding at December 31, 2017. There are no shares available for grants under the 2007 Non-Qualified Stock Option Plan as the plan has expired. Under the 2007 Directors Stock Option Plan, there were no unvested options and no unrecognized compensation expense at December 31, 2017 and 2016. In connection with the 2007 Director Plan, no share based compensation expense was recognized for the three months and year ended December 31, 2017. During the year ended December 31, 2017 options to purchase 241,000 shares of common stock at a price of $10.95 per share were exercised for a total price of $2.64 million. A summary of stock option activity under the 2007 Non-Qualified Stock Option Plan for Directors during the years ended December 31, 2016 and 2017 are presented below: Weighted Weighted Average Average Aggregate Remaining Number of Exercise Price Intrinsic Value Contractual Life Shares per Share (1) (Years) Outstanding at December 31, 2015 347,901 $ 10.95 Forfeited (22,401) 10.95 Outstanding at December 31, 2016 325,500 $ 10.95 $ 620,000 0.81 Exercisable at December 31, 2016 325,500 $ 10.95 $ 620,000 0.81 Weighted Weighted Average Average Aggregate Remaining Number of Exercise Price Intrinsic Value Contractual Life Shares per Share (1) (Years) Outstanding at December 31, 2016 325,500 $ 10.95 Expired (84,500) 10.95 — — Exercised (241,000) 10.95 — — Outstanding at December 31, 2017 — $ — $ — — Exercisable at December 31, 2017 — $ — $ — — (1) The aggregate intrinsic value of a stock option in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had they exercised their options on December 31, 2017. This amount changes based on the changes in the market value in the Company’s common stock. 2011 Equity Incentive Plan During 2011, the stockholders of the Company approved the Bancorp of New Jersey, Inc. 2011 Equity Incentive Plan (the “2011 Plan”). The 2011 Plan authorizes the issuance of up to 262,500 shares of the Company’s common stock, subject to adjustment in certain circumstances described in the 2011 Plan, pursuant to awards of incentive stock options or non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units or performance awards. Employees, directors, consultants, and other service providers of the Company and its affiliates (primarily the Bank) are eligible to receive awards under the 2011 Plan, provided, that only employees are eligible to receive incentive stock options. At December 31, 2017, there were 156,943 shares, net of forfeitures, issued to employees and directors of the Company under the 2011 Plan. The following is a summary of the non-vested restricted stock awards granted under the 2011 Plan: 2016 Weighted Average Number Grant Date of Shares Fair Value Outstanding, beginning of year 50,663 $ 12.37 Forfeited (4,463) 12.29 Vested (16,800) 12.38 Outstanding, end of year 29,400 $ 2017 Weighted Average Number Grant Date of Shares Fair Value Outstanding, beginning of year 29,400 $ 12.38 Granted 31,500 14.28 Forfeited (4,200) 12.38 Vested (24,150) 13.21 Outstanding, end of year 32,550 $ Approximately $324 thousand remains to be expensed over the next 24 months related to the unvested restricted stock. For the years ended December 31, 2017, and 2016, $287 thousand and $188 thousand, respectively, was recorded as compensation expense for restricted stock that had been issued through the 2011 Plan. During 2016, the Company granted 31,500 NQOs to an executive of the Company. The fair value of the 31,500 NQOs granted was $2.78 per NQO on the date of grant. The fair value of the NQOs was determined using the Black-Scholes option pricing model. The following assumptions were used in determining the fair value of the NQOs granted: expected dividend yield of 2.137%, risk free interest rate of 1.87%, expected volatility of 27.0% and expected lives of 10 years. One third of the NQOs granted vested immediately, with the remaining NQOs vesting over a two year period. In July 2017, the Company granted 14,700 NQOs to employees of the Company. The fair value of the NQOs granted was $6.95 per NQO on the date of grant. The fair value of the NQOs was determined using the Black-Scholes option pricing model. The following assumptions were used in determining the fair value of the NQOs granted: expected dividend yield of 0.00%, risk free interest rate of 2.31%, expected volatility of 26.81% and expected lives of 10 years. One third of the NQOs granted vest each on February 1, 2018, February 1, 2019 and February 1, 2020. Under the 2011 Plan, there were 25,200 unvested options at December 31, 2017 and 20,000 unvested options at December 31, 2016. At December 31, 2017 there was $83 thousand of unrecognized compensation expense related to unvested options. For the three months and year ended December 31, 2017, $24 thousand and $57 thousand, respectively were recorded as expense for options that have been issued through the 2011 Plan. For the three months and year ended December 31, 2016, $7 thousand and $49 thousand, respectively were recorded as expense for options that have been issued through the 2011 Plan. No options were exercised under the 2011 Plan during the years ended December 31, 2017 and 2016. A summary of stock option activity under the 2011 Plan during the years ended December 31, 2016 and 2017 are presented below: Weighted Weighted Average Average Aggregate Remaining Number of Exercise Price Intrinsic Value Contractual Shares per Share (1) Term Outstanding at December 31, 2015 — $ — Granted 31,500 Outstanding at December 31, 2016 $ $ 68,100 Exercisable at December 31, 2016 $ $ 22,700 Weighted Weighted Average Average Aggregate Remaining Number of Exercise Price Intrinsic Value Contractual Shares per Share (1) Term Outstanding at December 31, 2016 31,500 $ Granted 14,700 Outstanding at December 31, 2017 $ $ 255,465 Exercisable at December 31, 2017 $ $ 158,500 (1) The aggregate intrinsic value of a stock option in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had they exercised their options on December 31, 2017. This amount changes based on the changes in the market value in the Company’s common stock. Defined Contribution Plan The Company currently offers a Safe Harbor 401(k) Plan (“Plan”) covering eligible employees, wherein employees can invest eligible pretax and after tax earnings up to the Plan and legal limits. The Company makes safe harbor matching contributions equal to 100% of the employees’ earnings deferrals that do not exceed 4% of the employees’ compensation. The Company recorded matching contributions of approximately $216 thousand and $80 thousand during 2017 and 2016, respectively. |
Regulatory Capital Requirements
Regulatory Capital Requirements | 12 Months Ended |
Dec. 31, 2017 | |
Regulatory Capital Requirements | |
Regulatory Capital Requirements | NOTE 13. Regulatory Capital Requirements The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s 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. Capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Bank to meet a minimum Tier 1 leverage ratio, Common equity tier 1 risk-based capital ratio, Tier 1 risk-based ratio and Total risk-based capital ratio (as defined in the regulations). In July 2013, the Federal Deposit insurance Corporation and the other federal bank regulatory agencies issued a final rule that revised their leverage and risk-based capital requirements and the method for calculating risk-weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act. The Final Capital Rules also revised the quantity and quality of required minimum risk-based and leverage capital requirements, consistent with the Dodd-Frank Act and the Third Basel Accord adopted by the Basel Committee on Banking Supervision, or Basel III capital standards. The Common equity tier 1 risk-based capital ratio and changes to the calculation of risk-weighted assets became effective for the Bank on January 1, 2015. As of December 31, 2017 and 2016, management believes that the Bank meets all capital adequacy requirements to which it is subject. As of December 31, 2017, the most recent notification from the Federal Deposit Insurance Corporation 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 Tier 1 leverage capital, Common equity tier 1 capital, Tier 1 risk-based capital and Total risk-based capital as set forth in the tables. There are no conditions or events since that notification that management believes have changed the Bank's category. The following is a summary of the Bank’s actual capital amounts and ratios as of December 31, 2017 and 2016 compared to the FDIC minimum capital adequacy requirements and the FDIC requirements for classification as a well-capitalized institution. FDIC requirements Minimum Capital Minimum Capital For Classification Bank actual Adequacy With Phase-in Buffer As Well Capitalized Amount Ratio Amount Ratio Amount Ratio Amount Ratio 2017 Leverage (Tier 1) Capital Ratio $ 83,664 9.59 % $ 34,888 4.00 % $ N/A $ 43,610 5.00 % Risk-Based Capital: Common Equity Tier 1 Capital $ 83,664 10.84 % $ 34,746 4.50 % $ 44,397 5.75 % $ 50,188 6.50 % Tier 1 Capital Ratio $ 83,664 10.84 % $ 46,327 6.00 % $ 55,979 7.25 % $ 61,770 8.00 % Total Capital Ratio $ 92,265 11.95 % $ 61,770 8.00 % $ 71,421 9.25 % $ 77,212 10.00 % 2016 Leverage (Tier 1) Capital Ratio $ 77,337 9.02 % $ 33,293 4.00 % $ N/A $ 41,617 5.00 % Risk-based capital: Common Equity Tier 1 Capital $ 77,337 10.98 % $ 31,685 4.50 % $ 36,086 5.125 % $ 45,767 6.50 % Tier 1 Capital Ration $ 77,337 10.98 % $ 42,247 6.00 % $ 46,647 6.625 % $ 56,329 8.00 % Total Capital Ratio $ 85,993 12.21 % $ 56,329 8.00 % $ 60,730 8.625 % $ 70,411 10.00 % Since the Company has less than $1 billion in assets, it is not subject to minimum consolidated capital ratio requirements. |
Financial Instruments with Off-
Financial Instruments with Off-Balance Sheet Risk | 12 Months Ended |
Dec. 31, 2017 | |
Financial Instruments with Off-Balance Sheet Risk | |
Financial Instruments with Off-Balance Sheet Risk | NOTE 14. Financial Instruments with Off-Balance Sheet Risk The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business in order to meet the financing needs of its customers. These financial instruments consist of commitments to extend credit and letters of credit and involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the accompanying consolidated balance sheets. The Company uses the same credit policies and collateral requirements in making commitments and conditional obligations as it does for on-balance-sheet loans. Commitments to extend credit are agreements to lend to customers 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 the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the borrower. Outstanding available loan commitments, primarily for commercial real estate, construction, and land development loans totaled $83 million and $95.3 million at December 31, 2017 and 2016. At December 31, 2017 and 2016, the Company had outstanding letters of credit to customers totaling $3.4 million and $3.6 million, respectively, whereby the Company guarantees performance to a third party. These letters of credit generally have fixed expiration dates of one year or less. The fair value of these letters of credits is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements. At December 31, 2017 and 2016, such amounts were deemed not material. |
Financial Information of Parent
Financial Information of Parent Company | 12 Months Ended |
Dec. 31, 2017 | |
Financial Information of Parent Company | |
Financial Information of Parent Company | NOTE 15. Financial Information of Parent Company The following information represents Bancorp of New Jersey, Inc. only balance sheets as of December 31, 2017 and 2016, respectively, the statements of income for the years ended December 31, 2017 and December 31, 2016, and the statements of cash flows for the years December 31, 2017 and December 31, 2016 and should be read in conjunction with the notes to the consolidated financial statements. Balance Sheets (in thousands) December 31, 2017 2016 Assets: Investment in subsidiary, net $ 83,309 $ 77,144 Total assets $ 83,309 $ 77,144 Liabilities and stockholders’ equity: Stockholders’ equity $ 83,309 $ 77,144 $ 83,309 $ 77,144 Statements of Income and Comprehensive Income Years ended December 31, (in thousands) 2017 2016 Equity in undistributed earnings of subsidiary bank $ 3,574 $ 4,001 Net income 3,574 4,001 Other comprehensive (loss) income (162) 103 Comprehensive income $ 3,412 $ 4,104 Statements of Cash Flow Years ended December 31, (in thousands) 2017 2016 Cash flow from operating activities: Net income $ 3,574 $ 4,001 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed earnings of the subsidiary bank (3,574) (4,001) Net cash provided by operating activities: — — Cash flows from investing activities: Cash dividends received from subsidiary bank 695 1,128 Net cash provided by investing activities 695 1,128 Cash flows from financing activities: Cash dividends paid (695) (1,128) Net cash provided by financing activities (695) (1,128) Net change in cash for the period — — Net cash at beginning of year — — Net cash at end of year $ — $ — |
Fair Value Measurements and Fai
Fair Value Measurements and Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurement and Fair Value of Financial Instruments | |
Fair Value Measurement and Fair Value of Financial Instruments | NOTE 16. Fair Value Measurement and Fair Value of Financial Instruments U. S. GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: · Level 1 Inputs - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. · Level 2 Inputs - Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability. · Level 3 Inputs - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported with little or no market activity). An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2017 and December 31, 2016, respectively, are as follows (in thousands): (Level 1) (Level 2) (Level 3) Quoted Prices in Active Markets Significant Other December 31, for Identical Observable Significant Description 2017 Assets Inputs Unobservable Inputs Securities available for sale: U.S. Treasury securities $ 6,162 $ — $ 6,162 $ — Government sponsored enterprise obligations: Agency backed 33,235 33,235 Mortgage backed 13,837 — 13,837 — Total securities available for sale $ 53,234 $ — $ 53,234 $ — (Level 1) (Level 2) (Level 3) Quoted Prices in Active Markets Significant Other December 31, for Identical Observable Significant Description 2016 Assets Inputs Unobservable Inputs Securities available for sale: U.S. Treasury securities $ 6,268 $ — $ 6,268 $ — Government sponsored enterprise obligations 55,321 — 55,321 — Total securities available for sale $ 61,589 $ — $ 61,589 $ — For financial assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2017 and December 31, 2016, respectively, is as follows (in thousands): (Level 1) (Level 2) (Level 3) Quoted Prices in December 31, Active Markets for Significant Other Significant Description 2017 Identical Assets Observable Inputs Unobservable Inputs Other real estate owned $ 415 $ — $ — $ 415 (Level 1) (Level 2) (Level 3) Quoted Prices in December 31, Active Markets for Significant Other Significant Description 2016 Identical Assets Observable Inputs Unobservable Inputs Other real estate owned $ 614 $ — $ — $ 614 The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine fair value (in thousands): Fair Value Valuation Unobservable Range December 31, 2017 Estimate Techniques Input (Weighted Average) Other real estate owned $ 415 Appraisal of Collateral (1) Appraisal Adjustments (2) 21.8 Liquidation Expenses (2) 6.8 Fair Value Valuation Unobservable Range December 31, 2016 Estimate Techniques Input (Weighted Average) Other real estate owned $ 614 Appraisal of Collateral (1) Appraisal Adjustments (2) 11.5% - 48.40% (21.8)% Liquidation Expenses (2) 8.9% - 10.3% (9.3)% (1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable. (2) Appraisals may be adjusted for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal. Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Company could have realized in sales transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective period end and have not been re-evaluated or updated for purposes of these financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each period end. The following information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Company’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful. Fair value estimates for the Company’s financial instruments are as follows at December 31, 2017 and 2016 (in thousands): (Level 1) (Level 2) (Level 3) Quoted Prices in Significant December 31, 2017 Active Markets for Significant Other Unobservable Carrying amount Estimated Fair Value Identical Assets Observable Inputs Inputs Financial assets: Cash and cash equivalents $ 92,619 $ 92,619 $ 92,619 $ — $ — Interest bearing time deposits 1,000 1,000 — 1,000 — Securities available for sale 53,234 53,234 — 53,234 — Securities held to maturity 6,058 6,058 — 6,058 — Restricted investment in bank stock 1,380 1,380 — 1,380 — Net loans 712,076 703,901 — — 703,901 Accrued interest receivable 2,695 2,695 — 2,695 — Financial liabilities: Deposits 788,293 793,879 — 793,879 — Borrowed funds 13,385 13,307 — 13,307 — Accrued interest payable 651 651 — 651 — (Level 1) (Level 2) (Level 3) Quoted Prices in Significant December 31, 2016 Active Markets for Significant Other Unobservable Carrying amount Estimated Fair Value Identical Assets Observable Inputs Inputs Financial assets: Cash and cash equivalents $ 76,976 $ 76,976 $ 76,976 $ — $ — Interest bearing time deposits 1,000 1,000 — 1,000 — Securities available for sale 61,589 61,589 — 61,589 — Securities held to maturity 7,343 7,343 — 7,343 — Restricted investment in bank stock 1,983 1,983 — 1,983 — Net loans 651,698 659,084 — — 659,084 Accrued interest receivable 2,366 2,366 — 2,366 — Financial liabilities: Deposits 717,988 722,711 — 722,711 — Borrowed funds 25,008 24,933 — 24,933 — Accrued interest payable 516 516 — 516 — The following methods and assumptions were used to estimate the fair values of the Company’s financial instruments at December 31, 2017 and 2016. Cash and Cash Equivalents and Interest Bearing Time Deposits The carrying amounts reported in the balance sheet for cash and cash equivalents approximate those assets’ fair values. Securities The fair value of securities available for sale (carried at fair value) and held to maturity (carried at amortized cost) are determined by obtaining market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices. For certain securities which are not traded in active markets or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, and such adjustments are generally based on available market evidence (Level 3). In the absence of such evidence, management’s best estimate is used. Management’s best estimate consists of both internal and external support on certain Level 3 investments. Internal cash flow models using a present value formula that includes assumptions market participants would use along with indicative exit pricing obtained from broker/dealers (where available) would be used to support fair values of certain Level 3 investments, if applicable. Restricted Investment in Bank Stock The carrying amount of restricted investment in bank stock approximates fair value, and considers the limited marketability of such securities. Loans Receivable The fair value of loans are estimated using discounted cash flow analyses, using market rates at the balance sheet date that reflect the credit and the interest rate-risk inherent in the loans. Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal. Generally, for variable rate loans that re-price frequently and with no significant change in credit risk, fair values approximate carrying values. Impaired loans Impaired loans are those for which the Company has measured fair value generally based on the fair value of the loan’s collateral (based on independent third party appraisal) or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements. Accrued Interest Receivable and Payable The carrying amount of accrued interest receivable and accrued interest payable approximates fair value. Other real estate owned Other real estate owned assets are adjusted to fair value less estimated selling costs upon transfer of the loans to other real estate owned. The fair value of other real estate owned is based upon independent third party appraisal values of the collateral or management’s estimation of the value of the collateral. These assets are included as Level 3 fair values. Deposits The fair values disclosed for demand deposits (e.g., interest and noninterest checking, passbook savings and money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). Fair values for fixed rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities of time deposits. Borrowed Funds The fair value of borrowed funds is estimated using quoted market prices, if available, or by discounting future cash flows using current interest rates for similar financial instruments. Limitation The preceding fair value estimates were made at December 31, 2017 and 2016 based on pertinent market data and relevant information on the financial instruments. These estimates do not include any premium or discount that could result from an offer to sell at one time the Company’s entire holdings of a particular financial instrument or category thereof. Since no market exists for a substantial portion of the Company’s financial instruments, fair value estimates were necessarily based on judgments regarding future expected loss experience, current economic conditions, risk assessment of various financial instruments, and other factors. Given the innately subjective nature of these estimates, the uncertainties surrounding them and the matter of significant judgment that must be applied, these fair value estimates cannot be calculated with precision. Modifications in such assumptions could meaningfully alter these estimates. Since these fair value approximations were made solely for on and off balance sheet financial instruments at December 31, 2017 and 2016, no attempt was made to estimate the value of anticipated future business. Furthermore, certain tax implications related to the realization of the unrealized gains and losses could have a substantial impact on these fair value estimates and have not been incorporated into the estimates. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income (Loss) | NOTE 17. Accumulated Other Comprehensive Income (Loss) There were no reclassifications out of accumulated comprehensive income due to sale of securities for the years ended December 31, 2017 and 2016. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2017 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | NOTE 18. Recent Accounting Pronouncements This section provides a summary description of recent accounting standards that have significant implications (elected or required) within the consolidated financial statements, or that management expects may have a significant impact on financial statements issued in the near future. ASU 2014-09, Revenue from Contracts with Customers (Topic 606) In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers. The amendments in this ASU establish a comprehensive revenue recognition standard for virtually all industries under U.S. GAAP, including those that previously followed industry-specific guidance such as the real estate, construction and software industries. The revenue standard’s core principle is built on the contract between a vendor and a customer for the provision of goods and services. It attempts to depict the exchange of rights and obligations between the parties in the pattern of revenue recognition based on the consideration to which the vendor is entitled. To accomplish this objective, the standard requires five basic steps: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. Public entities will apply the new standard for annual periods beginning after December 15, 2017, including interim periods therein. Three basic transition methods are available – full retrospective, retrospective with certain practical expedients, and a cumulative effect approach. Under the third alternative, an entity would apply the new revenue standard only to contracts that are incomplete under legacy U.S. GAAP at the date of initial application (e.g. January 1, 2018) and recognize the cumulative effect of the new standard as an adjustment to the opening balance of retained earnings. That is, prior years would not be restated and additional disclosures would be required to enable users of the financial statements to understand the impact of adopting the new standard in the current year compared to prior years that are presented under legacy U.S. GAAP. Early adoption is prohibited under U.S. GAAP. The implementation of ASU 2014-09 should not have a material impact on the Company’s consolidated financial position or consolidated results of operations. However, the Company does believe the new standard will result in new disclosure requirements. The Company is currently in the process of reviewing contracts to assess the impact of the new guidance on our service offerings that are in the scope of the guidance, included in non-interest income such as service charges and payments processing fees. The Company is continuing to evaluate the effect of the new guidance on revenue sources other than financial instruments on its consolidated financial statements. ASU 2016-1, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. In January 2016 the FASB issued ASU 2016-1, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements; and clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale. ASU 2016-01 will be effective for the Company on January 1, 2018 and is not expected to have a material impact on the Company’s financial position or results of operations. ASU 2016-02, Leases. In February 2016 the FASB issued ASU 2016-02, Leases. ASU 2016-02 amends existing lease accounting guidance to include the requirement to recognize most lease arrangements on the balance sheet. The adoption of this standard will require the Company to recognize the rights and obligations arising from operating leases as assets and liabilities. ASU 2016-02 will be effective for fiscal years beginning after December 15, 2018, early adoption is permitted. The Company is presently evaluating the potential impact of the adoption of this accounting pronouncement to its financial position or results of operations. ASU 2016-13, Financial Instruments – Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses. ASU 2016-13 requires entities to report “expected” credit losses on financial instruments and other commitments to extend credit rather than the current “incurred loss” model. These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU will also require enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. For public business entities that are U.S. Securities and Exchange Commission filers, the amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For all other public business entities, the amendments are effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The Company is currently evaluating the impact the adoption of ASU 2016-13 will have on its consolidated financial statements and results of operations. ASU 2018-02, Income Statement – Reporting Comprehensive Income On February 2, 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 202) . The amendments in this ASU affect any entity that is required to apply the provisions of Topic 220, Income Statement—Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP. The amendments in this ASU allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the 2017 Tax Reform Act; eliminates the stranded tax effects resulting from the 2017 Tax Reform Act. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this update is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not yet been issued. The amendments in this ASU should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the 2017 Tax Reform Act is recognized. BONJ adopted the provision of ASU 2018-02 effective December 31, 2017. The effect of adoption at BONJ resulted in a reclassification of $58,000 from accumulated other comprehensive loss to retained earnings in the consolidated statements of stockholders' equity. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Basis of Financial Statement Presentation | Basis of Financial Statement Presentation The accompanying consolidated financial statements include the accounts of Bancorp of New Jersey, Inc. (together with its consolidated subsidiary, the “Company”), and its direct wholly-owned subsidiary, Bank of New Jersey (the “Bank”) and the Bank’s wholly-owned subsidiaries, BONJ-New York Corp., BONJ-New Jersey Investment Company, BONJ- Delaware Investment Company, and BONJ REIT Inc. Bancorp of New Jersey is incorporated under the laws of the State of New Jersey to serve as a holding company for the Bank. All significant inter-company accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of the deferred tax asset and the determination of other-than-temporary impairment on securities. While management uses available information to recognize estimated losses on loans, future additions may be necessary based on changes in economic conditions. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. These agencies may require the Company to recognize additions to the allowance based on their judgements of information available to them at the time of their examination. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period indicated. Actual results could differ significantly from those estimates. |
Significant Group of Concentration of Credit Risk | Significant Group of Concentration of Credit Risk The Company’s activities are, primarily, with customers located within Bergen County, New Jersey. The Company does not have any significant concentration to any one industry or customers within its primary service area. Note 3 describes the types of lending in which the Company engages. Although the Company actively manages the diversification of the loan portfolio, a substantial portion of the debtors’ ability to honor their contracts is dependent on the strength of the local economy. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash and due from banks, interest-bearing deposits in banks, and federal funds sold, which are generally sold for one-day periods. |
Interest-bearing deposits in banks | Interest-bearing deposits in banks Interest-bearing deposits in banks are carried at cost, which approximate fair value. |
Regulators | Regulators The Bank is subject to federal and New Jersey statutes applicable to banks chartered under the New Jersey banking laws. The Bank’s deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”). Accordingly, the Bank is subject to regulation, supervision, and examination by the New Jersey State Department of Banking and Insurance and the FDIC. The Company is subject to regulation, supervision and examination by the Board of Governors of the Federal Reserve System (“FRB”). |
Investment Securities | Investment Securities The Company reports investment securities in one of the following categories: (i) held to maturity (management has the intent and ability to hold to maturity), which are reported at amortized cost; (ii) trading (held for current resale), which are reported at fair value, with unrealized gains and losses included in earnings and (iii) available for sale, which are reported at fair value, with unrealized gains and lossess excluded from earnings and reported as a separate component of stockholders’ equity. The Company has classified all of its holdings of investment securities as either held to matruity or available for sale. At the time a security is purchased, a determination is made as to the approproiate classification. Premiums and discounts on investment securities are amortized as expense and accreted as income over the estimated life of the respective security using a method that generally approximates the level-yield method. Gains and losses on the sales of investment securities are recognized upon realization, using the specific identification method and shown separately in the Consolidated Statements of Income. Management evaluates securities for other than temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirment to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the statement of income and 2) OTTI related to other factors, which is recognized in other comprehensive income (loss). The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of impairment is recognized through earnings. |
Premises and Equipment | Premises and Equipment Premises and equipment are stated at historical cost, less accumulated depreciation and amortization. Depreciation of fixed assets is accumulated on a straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the term of the related lease. The estimated lives of the Company’s premises and equipment range from 3 years for certain computer related equipment to 39 years for building costs associated with newly constructed buildings. Maintenance and repairs are charged to expense in the year incurred. |
Loans and Allowance for Loan Losses | Loans and Allowance for Loan Losses Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balances, net of an allowance for loan losses and any deferred fees or costs. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the yield (interest income) of the related loans. The Company is generally amortizing these amounts over the contractual life of the loan. Premiums and discounts on purchased loans are amortized as adjustments to interest income using the effective yield method. For all commercial loans receivable, the accrual of interest on loans is discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest, even though the loan is currently performing. A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. When a loan is placed on nonaccrual status, unpaid interest credited to income in the current year is reversed and unpaid interest accrued in prior years is charged against the allowance for loan losses. Interest received on nonaccrual loans, including impaired loans, generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months) and the ultimate collectability of the total contractual principal and interest is no longer in doubt. The past due status of loans receivable is determined based on contractual due dates for loan payments. The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments. The allowance for loan losses represents management’s estimate of losses inherent in the loan portfolio as of the balance sheet date and is recorded as a reduction to loans. The reserve for unfunded lending commitments represents management’s estimate of losses inherent in its unfunded loan commitments and is recorded in other liabilities on the consolidated balance sheets. The allowance for loan losses is increased by the provision for loan losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance for loan losses, and subsequent recoveries, if any, are credited to the allowance. All, or part, of the principal balance of loans receivable are charged off to the allowance as soon as it is determined that the repayment of all, or part, of the principal balance is highly unlikely. Because all identified losses are immediately charged off, no portion of the allowance for loan losses is restricted to any individual loan or groups of loans, and the entire allowance is available to absorb any and all loan losses. The allowance for credit losses is maintained at a level considered adequate to provide for losses that are probable and reasonable to estimate. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based on the Company’s past loan loss experience, known and inherent risks in the loan portfolio and unfunded commitments, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available. The allowance for loan losses consists of general and unallocated components. The general component covers pools of loans by loan class including commercial loans not considered impaired, as well as smaller balance homogeneous loans, such as residential real estate, home equity and other consumer loans. These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these categories of loans, adjusted for qualitative factors. These qualitative risk factors include: 1. Lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices. 2. National, regional, and local economic and business conditions as well as the condition of various market segments, including the value of underlying collateral for collateral dependent loans. 3. Nature and volume of the portfolio and terms of loans. 4. Experience, ability, and depth of lending management and staff. 5. Volume and severity of past due, classified and nonaccrual loans as well as and other loan modifications. 6. Quality of the Company’s loan review system, and the degree of oversight by the Company’s Board of Directors. 7. Existence and effect of any concentrations of credit and changes in the level of such concentrations. 8. Effect of external factors, such as competition and legal and regulatory requirements. Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation. Adjustments to the factors are supported through documentation of changes in conditions in a narrative accompanying the allowance for loan loss calculation. An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis 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. Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (“TDR”) and classified as impaired. All or part of the principal balance of a loan is charged-off for an impaired loan if its carrying value exceeds its estimated fair value. The estimated fair values of substantially all of the Company’s impaired loans are measured based on the estimated fair value of the loan’s collateral. For commercial loans secured by real estate, estimated fair values are determined primarily through third-party appraisals. When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the original appraisal and the condition of the property. Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include estimated costs to sell the property. For commercial loans secured by non-real estate collateral, such as accounts receivable, inventory and equipment, estimated fair values are determined based on the borrower’s financial statements, inventory reports, accounts receivable aging or equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual residential mortgage loans, home equity loans and other consumer loans for impairment disclosures, unless such loans are the subject of a TDR agreement. Loans whose terms are modified are classified as TDRs if the Company grants such borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a TDR generally involve a temporary reduction in interest rate or an extension of a loan’s stated maturity date. Loans classified as TDRs are designated as impaired and evaluated for impairment until they are ultimately repaid in full or foreclosed and sold. Nonaccrual TDR are restored to accrual status if principal and interest payments, under the modified terms, are current for six consecutive months after modification. The Company’s methodology for the determination of the allowance for loan losses includes further segregation of loan classes into risk rating categories. The borrower’s overall financial condition, repayment sources, guarantors and value of collateral, if appropriate, are evaluated annually for commercial loans or when credit deficiencies arise, such as delinquent loan payments, for commercial and consumer loans. Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful and loss. Loans classified as special mention have potential weaknesses that deserve management’s close attention. If uncorrected, the potential weaknesses may result in deterioration of the repayment prospects. Loans classified substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They include loans that are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified doubtful have all the weaknesses inherent in loans classified substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as a loss are considered uncollectible and are charged to the allowance for loan losses. Loans not classified are rated pass. In addition to the Company’s methodology, Federal regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses and may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination, which may not be currently available to management. Management believes the level of the allowance for loan losses was adequate to absorb losses inherent in the loan portfolio as of December 31, 2017. |
Other Real Estate Owned | Other Real Estate Owned Other real estate owned consists of real estate acquired by foreclosure and is initially recorded at fair value, less estimated selling costs. Subsequent to foreclosure, revenues are included in non-interest income and expenses from operations and lower of cost or market changes in the valuation are included in non-interest expenses. |
Stock-Based Compensation | Stock-Based Compensation Accounting Standards Codification (“ASC”) Topic 718 Compensation-Stock Compensation addresses the accounting for share-based payment transactions in which an enterprise receives employee service in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. Guidance requires an entity to recognize the grant-date fair value of stock options and other equity-based compensation issued to employees within the income statement using a fair-value-based method. The Company accounts for stock options under these recognition and measurement principles. The Company recorded stock-based compensation expense of $397 thousand and $285 thousand during 2017 and 2016, respectively. At December 31, 2017, the Company had $132 thousand of unrecognized compensation expense related to stock options. At December 31, 2017, the Company had $324 thousand of unrecognized compensation expense related to unvested restricted stock. |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes. There are two components of the income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted law to the taxable income or excess of deductions and revenues. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. As required by ASC Topic 740, Income Taxes , the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. The Bank applied ASC Topic 740 to all tax positions for which the statute of limitations remained open. There was no material effect on the Company’s consolidated financial position or results of operations and no adjustment to retained earnings. The Company recognizes interest and penalties on income taxes as a component of income tax. |
Earnings Per Share | Earnings Per Share Basic earnings per share excludes dilution and represents the effect of earnings upon the weighted average number of shares outstanding for the period. Diluted earnings per share reflects the effect of earnings upon weighted average shares including the potential dilution that could occur if securities or contracts to issue common stock were converted or exercised, utilizing the treasury stock method. |
Comprehensive Income | Comprehensive Income Comprehensive income consists of net income for the current period and income, expenses, or gains and losses not included in the Consolidated Statements of Income and which are reported directly as a separate component of stockholders’ equity. |
Advertising | Advertising The Company expenses advertising costs as incurred. Advertising expenses totaled $216 thousand and $308 thousand for 2017 and 2016, respectively and are included in other operating expenses. |
Transfer of Financial Assets | Transfer of Financial Assets Transfers of financial assets, including loan and loan participation sales, are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity, or the ability to unilaterally cause the holder to return specific assets. |
Restricted Investment in Bank Stock | Restricted Investment in Bank Stock Restricted investment in bank stocks which represent required investments in the common stock of correspondent banks, is carried at cost and consists of the common stock of the Federal Home Loan Bank of New York (“FHLB”) of $1.28 million and Atlantic Community Bankers Bank, (“ACBB”) of $100 thousand respectively as of December 31, 2017. Federal law requires a member institution of the FHLB to hold stock according to a predetermined formula. Management believes no impairment charge is necessary related to the FHLB or ACBB restricted stock as of December 31, 2017. |
Restrictions on Cash and Amounts Due From Banks | Restrictions on Cash and Amounts Due From Banks The Bank is required to maintain average balances on hand or with the Federal Reserve Bank of New York (“FRBNY”). At December 31, 2017 and 2016, these reserve balances amounted to $3.8 million and $5.9 million, respectively, and are reflected in interest bearing deposits in banks. |
Securities (Tables)
Securities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Securities | |
Summary of securities held to maturity and securities available for sale | A summary of securities held to maturity and securities available for sale at December 31, 2017 and 2016 is as follows (in thousands): Gross Gross Amortized Unrealized Unrealized Fair 2017 Cost Gains Losses Value Securities Held to Maturity: Obligations of states and political subdivisions $ 6,058 $ — $ — $ 6,058 Total securities held to maturity 6,058 — — 6,058 Securities Available for Sale: U.S. Treasury securities 6,286 — (124) 6,162 Government sponsored enterprise obligations Agency backed 33,453 — (218) 33,235 Mortgage backed 13,986 — (149) 13,837 Total securities available for sale 53,725 — (491) 53,234 $ 59,783 $ — $ (491) $ 59,292 Gross Gross Amortized Unrealized Unrealized Fair 2016 Cost Gains Losses Value Securities Held to Maturity: Obligations of states and political subdivisions $ 7,343 $ — $ — $ 7,343 Total securities held to maturity 7,343 — — 7,343 Securities Available for Sale: U.S. Treasury securities 6,400 — (132) 6,268 Government sponsored enterprise obligations 55,506 6 (191) 55,321 Total securities available for sale 61,906 6 (323) 61,589 $ 69,249 $ 6 $ (323) $ 68,932 |
Schedule of unrealized losses, categorized by the length of time of continuous loss position, and the fair value of related securities | The unrealized losses, categorized by the length of time of continuous loss position, and the fair value of related securities available for sale at December 31, 2017 and 2016 are as follows (in thousands): Less than 12 Months More than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized 2017 Value Losses Value Losses Value Losses Securities Available for Sale: U.S. Treasury securities — — 6,162 (124) 6,162 (124) Government sponsored enterprise obligations 23,691 (201) 23,381 (166) 47,072 (367) Total securities available for sale 23,691 (201) 29,543 (290) 53,234 (491) Total securities $ 23,691 $ (201) $ 29,543 $ (290) $ 53,234 $ (491) Less than 12 Months More than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized 2016 Value Losses Value Losses Value Losses Securities Available for Sale: U.S. Treasury securities — — 6,268 (132) 6,268 (132) Government sponsored enterprise obligations 34,473 (158) 6,966 (33) 41,439 (191) Total securities available for sale 34,473 (158) 13,234 (165) 47,707 (323) Total securities $ 34,473 $ (158) $ 13,234 $ (165) $ 47,707 $ (323) |
Schedule of maturity distribution of the Company's held to maturity and available for sale portfolios | The following table sets forth as of December 31, 2017, the maturity distribution of the Company’s held to maturity and available for sale portfolios (in thousands): Securities Held to Maturity Securities Available for Sale Amortized Fair Amortized Fair Cost Value Cost Value One year or less $ 6,058 $ 6,058 $ 18,047 $ 17,933 After one to five years — — 21,692 21,465 Greater than five years — — 13,986 13,836 Total $ 6,058 $ 6,058 $ 53,725 $ 53,234 |
Loans and Allowance for Loan 30
Loans and Allowance for Loan Losses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Loans and Allowance for Loan Losses | |
Summary of loans | Loans at December 31, 2017 and 2016, are summarized as follows (in thousands): December 31, 2017 December 31, 2016 Commercial real estate $ 573,941 $ 492,296 Residential mortgages 66,497 78,961 Commercial and industrial 27,237 30,259 Home equity 53,199 58,399 Consumer 317 656 $ 721,191 $ 660,571 |
Schedule of activity in the allowance for loan losses and recorded investment in loan receivables | The following table presents the activity in the allowance for loan losses and recorded investment in loan receivables as of and for the year ended December 31, 2017 (in thousands): Commercial Residential Commercial Real Estate Mortgages & Industrial Home Equity Consumer Unallocated Total Allowance for loan losses: Beginning Balance $ 5,925 $ 554 $ 809 $ 425 $ 6 $ 568 $ 8,287 Charge-offs — (49) (90) (171) (97) — (407) Recoveries 30 — 1 — 6 — 37 Provision (88) (133) (145) 149 135 482 400 Ending balance $ 5,867 $ 372 $ 575 $ 403 $ 50 $ 1,050 $ 8,317 Ending balance: individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — Ending balance: collectively evaluated for impairment $ 5,867 $ 372 $ 575 $ 403 $ 50 $ 1,050 $ 8,317 Loan receivables: Ending balance $ 573,941 $ 66,497 $ 27,237 $ 53,199 $ 317 $ — $ 721,191 Ending balance: individually evaluated for impairment $ 11,554 $ 8,966 $ 2,957 $ 3,214 $ — $ — $ 26,691 Ending balance: collectively evaluated for impairment $ 562,387 $ 57,531 $ 24,280 $ 49,985 $ 317 $ — $ 694,500 The following table presents the activity in the allowance for loan losses and recorded investment in loan receivables as of and for the year ended December 31, 2016 (in thousands): Commercial Residential Commercial Real Estate Mortgages & Industrial Home Equity Consumer Unallocated Total Allowance for loan losses: Beginning Balance $ 5,566 $ 572 $ 1,066 $ 573 $ 39 $ 204 $ 8,020 Charge-offs — (158) (1,026) (155) (1) — (1,340) Recoveries 35 — 2 — — — 37 Provision 324 140 767 7 (32) 364 1,570 Ending balance $ 5,925 $ 554 $ 809 $ 425 $ 6 $ 568 $ 8,287 Ending balance: individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — Ending balance: collectively evaluated for impairment $ 5,925 $ 554 $ 809 $ 425 $ 6 $ 568 $ 8,287 Loan receivables: Ending balance $ 492,296 $ 78,961 $ 30,259 $ 58,399 $ 656 $ — $ Ending balance: individually evaluated for impairment $ 10,485 $ 9,731 $ 3,257 $ 4,543 $ — $ — $ 28,016 Ending balance: collectively evaluated for impairment $ 481,811 $ 69,230 $ 27,002 $ 53,856 $ 656 $ — $ 632,555 |
Schedule of classes of the loan portfolio summarized by the past due status | The following tables present the classes of the loan portfolio summarized by the past due status as of December 31, 2017 and 2016 (in thousands): 30-59 Days 60-89 Days 90+ Days Total Past Total Loans Nonaccrual 2017 Past Due Past Due Past Due Due Current Receivables Loans Commercial real estate $ 209 $ — $ 3,344 $ 3,553 $ 570,388 $ 573,941 $ 3,344 Residential mortgages 2,463 974 9,052 12,489 54,008 66,497 9,052 Commercial and industrial — 25 2,957 2,982 24,255 27,237 2,957 Home equity 1,823 775 3,073 5,671 47,528 53,199 3,073 Consumer — — — — 317 317 — $ 4,495 $ 1,774 $ 18,426 $ 24,695 $ 696,496 $ 721,191 $ 18,426 30-59 Days 60-89 Days Greater than Total Past Total Loans Nonaccrual 2016 Past Due Past Due 90 Days Due Current Receivables Loans Commercial real estate $ 2,744 $ — $ 5,992 $ 8,736 $ 483,560 $ 492,296 $ 5,992 Residential mortgages — — 3,907 3,907 75,054 78,961 3,907 Commercial and industrial — — 3,257 3,257 27,002 30,259 3,257 Home equity 1,590 — 5,597 7,187 51,212 58,399 5,597 Consumer — — — — 656 656 — $ 4,334 $ — $ 18,753 $ 23,087 $ 637,484 $ 660,571 $ 18,753 |
Summary of loan portfolio by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within the Company's internal risk rating system | The following tables present the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within the Company’s internal risk rating system as of December 31, 2017 and 2016 (in thousands): Commercial Residential Commercial 2017 Real Estate Mortgages & Industrial Home Equity Consumer Total Pass $ 562,387 $ 56,407 $ 24,051 $ 49,985 $ 317 $ 693,147 Special Mention — 1,124 229 — — 1,353 Substandard 11,554 8,966 2,957 3,214 — 26,691 Doubtful — — — — — — $ 573,941 $ 66,497 $ 27,237 $ 53,199 $ 317 $ 721,191 Commercial Residential Commercial 2016 Real Estate Mortgages & Industrial Home Equity Consumer Total Pass $ $ $ $ $ $ Special Mention 600 2,026 — — Substandard 9,731 — Doubtful — — — — — — $ $ $ $ $ $ |
Schedule of information about Company's impaired loans | The following tables provide information about the Company’s impaired loans as of and for the years ended December 31, 2017 and 2016 (in thousands): Unpaid Recorded Principal Related 2017 Investment Balance Allowance Commercial real estate $ 11,554 $ 11,578 $ — Residential mortgages 8,966 10,287 — Commercial and industrial 2,957 3,057 — Home equity 3,214 3,509 — Total impaired loans $ 26,691 $ 28,431 $ — Unpaid Recorded Principal Related 2016 Investment Balance Allowance Commercial real estate $ 10,485 $ 10,509 $ — Residential mortgages 9,731 10,804 — Commercial and industrial 3,257 3,257 — Home equity 4,543 4,675 — Total impaired loans $ $ $ — Year Ended Year Ended December 31, 2017 December 31, 2016 Average Interest Average Interest Recorded Income Recorded Income Investment Received Investment Received Impaired loans with no specific reserves: Commercial real estate 10,232 — 15,031 — Residential mortgages 9,360 — 4,429 — Commercial and industrial 3,149 — 3,256 — Home equity 3,205 — 4,834 — Consumer — — — — $ 25,946 $ — $ 27,550 $ — |
Schedule of TDR loans | The following table presents TDR loans (all of which are classified as impaired loans) as of December 31, 2017 and 2016 (in thousands): Accrual Number of Nonaccrual Number of 2017 Status Loans Status Loans Total Commercial real estate $ — — $ 338 1 $ 338 Residential mortgages 637 3 7,446 10 8,083 Home equity — — 2,959 8 2,959 $ 637 3 $ 10,743 19 $ 11,380 Accrual Number of Nonaccrual Number of 2016 Status Loans Status Loans Total Commercial real estate $ — — $ 338 1 $ 338 Residential mortgages 521 2 3,477 5 3,998 Home equity 103 2 3,441 7 3,544 $ 624 4 $ 7,256 13 $ 7,880 |
Summary of pre and post modification troubled debt restructurings recorded investments | The following table summarizes information in regards to troubled debt restructurings that occurred during the year ended December 31, 2017 and 2016 (in thousands): Post- Pre-Modification Modification Outstanding Outstanding Number of Recorded Recorded 2017 Loans Investments Investments Residential mortgages 4 $ 3,695 $ 3,695 Home equity 1 320 320 5 $ 4,015 $ 4,015 Post- Pre-Modification Modification Outstanding Outstanding Number of Recorded Recorded 2016 Loans Investments Investments Residential mortgages 2 $ 543 $ 304 Home equity 6 2,730 2,631 8 $ 3,273 $ 2,935 |
Schedule of nature of modifications | The following table displays the nature of modifications during the year ended December 31, 2017 (in thousands): Rate Term Interest Only Payment Combination Total 2017 Modification Modification Modification Modification Modification Modifications Pre-modification outstanding recorded investment: Residential mortgages $ — $ 3,695 $ — $ — $ — $ 3,695 Home equity — 320 — — — 320 $ — $ 4,015 $ — $ — $ — $ 4,015 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Premises and Equipment | |
Schedule of premises and equipment | At December 31, 2017 and 2016, premises and equipment consists of the following (in thousands): 2017 2016 Land $ 4,828 $ 4,828 Building 10,468 10,038 Furniture and fixtures 1,309 1,131 Equipment 2,512 2,223 19,117 18,220 Less accumulated depreciation and amortization 5,392 4,723 Total premises and equipment, net $ 13,725 $ 13,497 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deposits | |
Summary of the maturity of time deposits (which includes certificates of deposit and individual retirement account (IRA) certificates) | At December 31, 2017 and 2016, respectively, a summary of the maturity of time deposits (which includes certificates of deposit and individual retirement account (IRA) certificates) is as follows (in thousands): 2017 2016 3 months or less $ 43,535 $ 59,889 Over 3 months through 12 months 95,818 92,044 Over 1 year through 2 years 62,356 51,818 Over 2 years through 3 years 29,110 31,135 Over 3 years through 4 years 40,250 9,976 Over 4 years through 5 years 75,980 47,880 $ 347,049 $ 292,742 |
Schedule of brokered deposits | At December 31, 2017 and 2016, the Company’s brokered deposits are as follows: 2017 2016 CDARS* Public Funds Reciprocal $ 8,191 $ 7,311 Non-Public Funds Reciprocal 15,186 14,898 FTN** Non-Reciprocal Funds 2,063 4,991 25,440 27,200 *Certificate of Deposit Account Registry Service **First Tennessee National Bank |
Borrowed Funds (Tables)
Borrowed Funds (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Borrowed Funds. | |
Schedule of information concerning long-term borrowings | Information concerning long-term borrowings at December 31, 2017 and 2016 is as follows (in thousands): 2017 Original Amount Rate Term (years) Maturity Fixed Rate Amortizing Note 1,624 1.50 % June 2019 Fixed Rate Amortizing Note 2,563 1.51 % July 2019 Fixed Rate Amortizing Note 2,511 1.51 % August 2019 Fixed Rate Amortizing Note 2,766 2.02 % August 2021 Fixed Rate Amortizing Note 3,921 1.48 % October 2019 $ 13,385 1.61 % 2016 Original Amount Rate Term (years) Maturity Fixed Rate Medium Note $ 5,000 0.98 % 1 April 2017 Fixed Rate Amortizing Note 2,630 1.50 % 5 June 2019 Fixed Rate Amortizing Note 4,070 1.51 % 5 July 2019 Fixed Rate Amortizing Note 3,916 1.51 % 5 August 2019 Fixed Rate Amortizing Note 3,469 2.02 % 7 August 2021 Fixed Rate Amortizing Note 5,923 1.48 % 5 October 2019 $ 25,008 1.47 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Schedule of current and deferred amounts of the provision for income taxes expense (benefit) | The current and deferred amounts of the provision for income taxes expense (benefit) for the years ended December 31, 2017 and 2016 is as follows (in thousands): 2017 2016 Current tax expense: Federal $ 2,259 $ 2,455 State 268 162 Deferred income tax benefit: Federal (218) (383) Re-measurement of deferred taxes due to Tax Cuts and Jobs Act 1,393 — State (29) (100) $ 3,673 $ 2,134 |
Schedule of significant portions of the deferred tax assets and deferred tax liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2017 and 2016 are as follows (in thousands): 2017 2016 Deferred tax assets: Start up expenses $ 82 $ 152 Allowance for loan losses 2,488 3,541 Accrued expenses 224 299 Stock compensation plans 129 451 Unrealized losses on securities available for sale 135 124 Other 728 605 Total 3,786 5,172 Deferred tax liabilities: Deferred loan costs (52) (83) Prepaid expenses (133) (120) Depreciation (191) (424) Total (376) (627) Net deferred tax asset $ 3,410 $ 4,545 |
A reconciliation between the amount of the effective income tax expense and the income tax expense that would have been provided at the federal statutory rate | A reconciliation between the amount of the effective income tax expense and the income tax expense that would have been provided at the federal statutory rate of 34% is shown below (in thousands): 2017 2016 Federal income tax expense at statutory rate $ 2,464 $ 2,086 Increase (decrease) in taxes resulting from: State taxes, net of federal income tax expense 158 41 Tax exempt income (20) (13) Stock-based compensation (317) 21 Meals and entertainment 4 10 Re-measurement of deferred taxes due to Tax Cuts and Jobs Act 1,393 — Other (9) (11) Effective Income Tax $ 3,673 $ 2,134 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Leases | |
Schedule of future minimum lease payments (exclusive of payments for maintenance, insurance, taxes and any other costs associated with offices) for operating leases | The following is a schedule of future minimum lease payments (exclusive of payments for maintenance, insurance, taxes and any other costs associated with offices) for operating leases with initial or remaining terms in excess of one year from December 31, 2017 (in thousands): Year ending December 31, 2018 $ 1,396 2019 1,174 2020 879 2021 648 2022 369 Thereafter 863 $ 5,329 |
Related-party Transactions (Tab
Related-party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related-party Transactions | |
Summary of related-party loan activity | The following table represents a summary of related-party loan activity during the years ended December 31, 2017 and 2016 (in thousands): 2017 2016 Outstanding loans at beginning of the year $ 22,994 $ 26,791 Advances 7,039 4,098 Repayments (5,314) (7,895) Former director (7,473) — Outstanding loans at end of the year $ 17,246 $ 22,994 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share | |
Schedule showing earnings per share | For the year ended December 31, (In thousands except per share data) 2017 2016 Net income available to common stockholders $ 3,574 $ 4,001 Weighted average number of common shares outstanding - basic 6,556 6,274 Basic earnings per share $ 0.55 $ 0.64 Net income available to common stockholders $ 3,574 $ 4,001 Weighted average number of common shares outstanding 6,556 6,274 Effect of dilutive options 16 — Weighted average number of common shares outstanding- diluted 6,572 6,274 Diluted earnings per share $ 0.54 $ 0.64 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
2006 Stock Option Plan | |
Benefit Plans | |
Summary of stock option activity | Weighted Weighted Average Average Aggregate Remaining Number of Exercise Price Intrinsic Value Contractual Shares per Share (1) Term Outstanding at December 31, 2015 167,685 $ 9.73 Granted 67,158 10.64 Forfeited (59,745) 10.73 Exercised (84,315) 8.66 Outstanding at December 31, 2016 $ $ 191,552 Exercisable at December 31, 2016 $ $ 60,000 Weighted Weighted Average Average Aggregate Remaining Number of Exercise Price Intrinsic Value Contractual Shares per Share (1) Term Outstanding at December 31, 2016 90,783 $ 10.74 Forfeited (7,149) 10.64 Exercised (32,381) 10.94 Outstanding at December 31, 2017 $ $ 390,035 Exercisable at December 31, 2017 $ $ 127,148 (1) The aggregate intrinsic value of a stock option in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had they exercised their options on December 31, 2017. This amount changes based on the changes in the market value in the Company’s common stock. |
2007 Director Plan | |
Benefit Plans | |
Summary of stock option activity | Weighted Weighted Average Average Aggregate Remaining Number of Exercise Price Intrinsic Value Contractual Life Shares per Share (1) (Years) Outstanding at December 31, 2015 347,901 $ 10.95 Forfeited (22,401) 10.95 Outstanding at December 31, 2016 325,500 $ 10.95 $ 620,000 0.81 Exercisable at December 31, 2016 325,500 $ 10.95 $ 620,000 0.81 Weighted Weighted Average Average Aggregate Remaining Number of Exercise Price Intrinsic Value Contractual Life Shares per Share (1) (Years) Outstanding at December 31, 2016 325,500 $ 10.95 Expired (84,500) 10.95 — — Exercised (241,000) 10.95 — — Outstanding at December 31, 2017 — $ — $ — — Exercisable at December 31, 2017 — $ — $ — — (1) The aggregate intrinsic value of a stock option in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had they exercised their options on December 31, 2017. This amount changes based on the changes in the market value in the Company’s common stock. |
2011 Equity Incentive Plan | |
Benefit Plans | |
Schedule of summary of the non-vested restricted stock awards | 2016 Weighted Average Number Grant Date of Shares Fair Value Outstanding, beginning of year 50,663 $ 12.37 Forfeited (4,463) 12.29 Vested (16,800) 12.38 Outstanding, end of year 29,400 $ 2017 Weighted Average Number Grant Date of Shares Fair Value Outstanding, beginning of year 29,400 $ 12.38 Granted 31,500 14.28 Forfeited (4,200) 12.38 Vested (24,150) 13.21 Outstanding, end of year 32,550 $ |
2011 Equity Incentive Plan | Non-qualified options | |
Benefit Plans | |
Summary of stock option activity | Weighted Weighted Average Average Aggregate Remaining Number of Exercise Price Intrinsic Value Contractual Shares per Share (1) Term Outstanding at December 31, 2015 — $ — Granted 31,500 Outstanding at December 31, 2016 $ $ 68,100 Exercisable at December 31, 2016 $ $ 22,700 Weighted Weighted Average Average Aggregate Remaining Number of Exercise Price Intrinsic Value Contractual Shares per Share (1) Term Outstanding at December 31, 2016 31,500 $ Granted 14,700 Outstanding at December 31, 2017 $ $ 255,465 Exercisable at December 31, 2017 $ $ 158,500 (1) The aggregate intrinsic value of a stock option in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had they exercised their options on December 31, 2017. This amount changes based on the changes in the market value in the Company’s common stock. |
Regulatory Capital Requiremen39
Regulatory Capital Requirements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Regulatory Capital Requirements | |
Summary of the Bank's actual capital amounts and ratios compared to the applicable minimum required based on the phase-in provisions and the minimum required to be considered well capitalized | FDIC requirements Minimum Capital Minimum Capital For Classification Bank actual Adequacy With Phase-in Buffer As Well Capitalized Amount Ratio Amount Ratio Amount Ratio Amount Ratio 2017 Leverage (Tier 1) Capital Ratio $ 83,664 9.59 % $ 34,888 4.00 % $ N/A $ 43,610 5.00 % Risk-Based Capital: Common Equity Tier 1 Capital $ 83,664 10.84 % $ 34,746 4.50 % $ 44,397 5.75 % $ 50,188 6.50 % Tier 1 Capital Ratio $ 83,664 10.84 % $ 46,327 6.00 % $ 55,979 7.25 % $ 61,770 8.00 % Total Capital Ratio $ 92,265 11.95 % $ 61,770 8.00 % $ 71,421 9.25 % $ 77,212 10.00 % 2016 Leverage (Tier 1) Capital Ratio $ 77,337 9.02 % $ 33,293 4.00 % $ N/A $ 41,617 5.00 % Risk-based capital: Common Equity Tier 1 Capital $ 77,337 10.98 % $ 31,685 4.50 % $ 36,086 5.125 % $ 45,767 6.50 % Tier 1 Capital Ration $ 77,337 10.98 % $ 42,247 6.00 % $ 46,647 6.625 % $ 56,329 8.00 % Total Capital Ratio $ 85,993 12.21 % $ 56,329 8.00 % $ 60,730 8.625 % $ 70,411 10.00 % |
Financial Information of Pare40
Financial Information of Parent Company (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Financial Information of Parent Company | |
Schedule of Balance Sheet of Parent Company | Balance Sheets (in thousands) December 31, 2017 2016 Assets: Investment in subsidiary, net $ 83,309 $ 77,144 Total assets $ 83,309 $ 77,144 Liabilities and stockholders’ equity: Stockholders’ equity $ 83,309 $ 77,144 $ 83,309 $ 77,144 |
Schedule of Statement of Income and Comprehensive Income of Parent Company | Statements of Income and Comprehensive Income Years ended December 31, (in thousands) 2017 2016 Equity in undistributed earnings of subsidiary bank $ 3,574 $ 4,001 Net income 3,574 4,001 Other comprehensive (loss) income (162) 103 Comprehensive income $ 3,412 $ 4,104 |
Schedule of Statement of Cash Flow of Parent Company | Statements of Cash Flow Years ended December 31, (in thousands) 2017 2016 Cash flow from operating activities: Net income $ 3,574 $ 4,001 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed earnings of the subsidiary bank (3,574) (4,001) Net cash provided by operating activities: — — Cash flows from investing activities: Cash dividends received from subsidiary bank 695 1,128 Net cash provided by investing activities 695 1,128 Cash flows from financing activities: Cash dividends paid (695) (1,128) Net cash provided by financing activities (695) (1,128) Net change in cash for the period — — Net cash at beginning of year — — Net cash at end of year $ — $ — |
Fair Value Measurement and Fair
Fair Value Measurement and Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurement and Fair Value of Financial Instruments | |
Schedule of financial assets measured at fair value on a recurring basis | For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2017 and December 31, 2016, respectively, are as follows (in thousands): (Level 1) (Level 2) (Level 3) Quoted Prices in Active Markets Significant Other December 31, for Identical Observable Significant Description 2017 Assets Inputs Unobservable Inputs Securities available for sale: U.S. Treasury securities $ 6,162 $ — $ 6,162 $ — Government sponsored enterprise obligations: Agency backed 33,235 33,235 Mortgage backed 13,837 — 13,837 — Total securities available for sale $ 53,234 $ — $ 53,234 $ — (Level 1) (Level 2) (Level 3) Quoted Prices in Active Markets Significant Other December 31, for Identical Observable Significant Description 2016 Assets Inputs Unobservable Inputs Securities available for sale: U.S. Treasury securities $ 6,268 $ — $ 6,268 $ — Government sponsored enterprise obligations 55,321 — 55,321 — Total securities available for sale $ 61,589 $ — $ 61,589 $ — |
Schedule of financial assets measured at fair value on a nonrecurring basis | For financial assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2017 and December 31, 2016, respectively, is as follows (in thousands): (Level 1) (Level 2) (Level 3) Quoted Prices in December 31, Active Markets for Significant Other Significant Description 2017 Identical Assets Observable Inputs Unobservable Inputs Other real estate owned $ 415 $ — $ — $ 415 (Level 1) (Level 2) (Level 3) Quoted Prices in December 31, Active Markets for Significant Other Significant Description 2016 Identical Assets Observable Inputs Unobservable Inputs Other real estate owned $ 614 $ — $ — $ 614 |
Schedule of additional quantitative information about assets measured at fair value on a nonrecurring basis for which the Company utilized Level 3 inputs to determine fair value | The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine fair value (in thousands): Fair Value Valuation Unobservable Range December 31, 2017 Estimate Techniques Input (Weighted Average) Other real estate owned $ 415 Appraisal of Collateral (1) Appraisal Adjustments (2) 21.8 Liquidation Expenses (2) 6.8 Fair Value Valuation Unobservable Range December 31, 2016 Estimate Techniques Input (Weighted Average) Other real estate owned $ 614 Appraisal of Collateral (1) Appraisal Adjustments (2) 11.5% - 48.40% (21.8)% Liquidation Expenses (2) 8.9% - 10.3% (9.3)% (1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable. (2) Appraisals may be adjusted for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal. |
Schedule of fair value estimates of financial instruments | Fair value estimates for the Company’s financial instruments are as follows at December 31, 2017 and 2016 (in thousands): (Level 1) (Level 2) (Level 3) Quoted Prices in Significant December 31, 2017 Active Markets for Significant Other Unobservable Carrying amount Estimated Fair Value Identical Assets Observable Inputs Inputs Financial assets: Cash and cash equivalents $ 92,619 $ 92,619 $ 92,619 $ — $ — Interest bearing time deposits 1,000 1,000 — 1,000 — Securities available for sale 53,234 53,234 — 53,234 — Securities held to maturity 6,058 6,058 — 6,058 — Restricted investment in bank stock 1,380 1,380 — 1,380 — Net loans 712,076 703,901 — — 703,901 Accrued interest receivable 2,695 2,695 — 2,695 — Financial liabilities: Deposits 788,293 793,879 — 793,879 — Borrowed funds 13,385 13,307 — 13,307 — Accrued interest payable 651 651 — 651 — (Level 1) (Level 2) (Level 3) Quoted Prices in Significant December 31, 2016 Active Markets for Significant Other Unobservable Carrying amount Estimated Fair Value Identical Assets Observable Inputs Inputs Financial assets: Cash and cash equivalents $ 76,976 $ 76,976 $ 76,976 $ — $ — Interest bearing time deposits 1,000 1,000 — 1,000 — Securities available for sale 61,589 61,589 — 61,589 — Securities held to maturity 7,343 7,343 — 7,343 — Restricted investment in bank stock 1,983 1,983 — 1,983 — Net loans 651,698 659,084 — — 659,084 Accrued interest receivable 2,366 2,366 — 2,366 — Financial liabilities: Deposits 717,988 722,711 — 722,711 — Borrowed funds 25,008 24,933 — 24,933 — Accrued interest payable 516 516 — 516 — |
Summary of Significant Accoun42
Summary of Significant Accounting Policies - Par Value and Branch Offices (Details) | Dec. 31, 2017item |
Bank | |
Significant accounting policies. | |
Number of branch offices in addition to main office | 9 |
Summary of Significant Accoun43
Summary of Significant Accounting Policies - Premises and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Loans and Allowance for Loan Losses | ||
Past due period after which accrual of interest is discontinued | 90 days | |
Reasonable period for restoration of loans to accrual status | 6 months | |
Portion of the allowance for loan losses restricted to any individual loan or groups of loans | $ 0 | |
Stock-Based Compensation | ||
Stock-based compensation expense | 397,000 | $ 285,000 |
Unrecognized compensation expenses related to unvested stock options | 132,000 | |
Unrecognized compensation expense related to unvested restricted stock granted | 324,000 | |
Advertising | ||
Advertising expenses | $ 216,000 | $ 308,000 |
Computer related equipment | Minimum | ||
Premises and equipment | ||
Estimated lives | 3 years | |
Building | Maximum | ||
Premises and equipment | ||
Estimated lives | 39 years |
Summary of Significant Accoun44
Summary of Significant Accounting Policies - Restrictions (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Restricted Investment in Bank Stock | ||
Restricted investment in bank stock | $ 1,380 | $ 1,983 |
Federal Home Loan Bank of New York | ||
Restricted Investment in Bank Stock | ||
Restricted investment in bank stock | 1,280 | |
Atlantic Community Bankers Bank | ||
Restricted Investment in Bank Stock | ||
Restricted investment in bank stock | 100 | |
Federal Reserve Bank of New York | ||
Restrictions on Cash and Amounts Due From Banks | ||
Average balances on hand or with the Federal Reserve Bank of New York | $ 3,800 | $ 5,900 |
Securities - Summary (Details)
Securities - Summary (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Securities Held to Maturity: | ||
Amortized Cost | $ 6,058 | $ 7,343 |
Total | 6,058 | 7,343 |
Securities Available for Sale: | ||
Amortized Cost | 53,725 | 61,906 |
Gross Unrealized Gains | 6 | |
Gross Unrealized Losses | (491) | (323) |
Total | 53,234 | 61,589 |
Total securities | ||
Amortized Cost | 59,783 | 69,249 |
Gross Unrealized Gains | 6 | |
Gross Unrealized Losses | (491) | (323) |
Fair Value | 59,292 | 68,932 |
Obligations of states and political subdivisions | ||
Securities Held to Maturity: | ||
Amortized Cost | 6,058 | 7,343 |
Total | 6,058 | 7,343 |
U.S. Treasury securities | ||
Securities Available for Sale: | ||
Amortized Cost | 6,286 | 6,400 |
Gross Unrealized Losses | (124) | (132) |
Total | 6,162 | 6,268 |
Government sponsored enterprise obligations | ||
Securities Available for Sale: | ||
Amortized Cost | 55,506 | |
Gross Unrealized Gains | 6 | |
Gross Unrealized Losses | (191) | |
Total | $ 55,321 | |
Agency backed | ||
Securities Available for Sale: | ||
Amortized Cost | 33,453 | |
Gross Unrealized Losses | (218) | |
Total | 33,235 | |
Mortgage backed | ||
Securities Available for Sale: | ||
Amortized Cost | 13,986 | |
Gross Unrealized Losses | (149) | |
Total | $ 13,837 |
Securities - Pledged Securities
Securities - Pledged Securities and Securities Sold (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Securities | ||
Recognized loss on sale of available for sale securities | $ 0 | $ 0 |
Securities - Unrealized Losses
Securities - Unrealized Losses and Fair Value (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | |
Securities Available for Sale - Fair Value | ||
Less than 12 Months | $ 23,691 | $ 34,473 |
More than 12 Months | 29,543 | 13,234 |
Total | 53,234 | 47,707 |
Securities Available for Sale - Unrealized Losses | ||
Less than 12 Months | (201) | (158) |
More than 12 Months | (290) | (165) |
Total | (491) | (323) |
Total Securities - Fair Value | ||
Less than 12 Months | 23,691 | 34,473 |
More than 12 Months | 29,543 | 13,234 |
Total | 53,234 | 47,707 |
Total Securities - Unrealized Losses | ||
Less than 12 Months | (201) | (158) |
More than 12 Months | (290) | (165) |
Total | $ (491) | (323) |
Number of available for sale securities in unrealized loss position for more than twelve months | item | 9 | |
U.S. Treasury securities | ||
Securities Available for Sale - Fair Value | ||
More than 12 Months | $ 6,162 | 6,268 |
Total | 6,162 | 6,268 |
Securities Available for Sale - Unrealized Losses | ||
More than 12 Months | (124) | (132) |
Total | $ (124) | (132) |
Total Securities - Unrealized Losses | ||
Number of available for sale securities in unrealized loss position | item | 2 | |
Government sponsored enterprise obligations | ||
Securities Available for Sale - Fair Value | ||
Less than 12 Months | $ 23,691 | 34,473 |
More than 12 Months | 23,381 | 6,966 |
Total | 47,072 | 41,439 |
Securities Available for Sale - Unrealized Losses | ||
Less than 12 Months | (201) | (158) |
More than 12 Months | (166) | (33) |
Total | $ (367) | $ (191) |
Total Securities - Unrealized Losses | ||
Number of available for sale securities in unrealized loss position | item | 12 |
Securities - Maturity Distribut
Securities - Maturity Distribution (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Securities Held to Maturity, Amortized Cost | ||
One year or less | $ 6,058 | |
Amortized Cost | 6,058 | $ 7,343 |
Securities Held to Maturity, Fair Value | ||
One year or less | 6,058 | |
Total | 6,058 | 7,343 |
Securities Available for sale, Amortized Cost | ||
One year or less | 18,047 | |
After one to five years | 21,692 | |
Greater than five years | 13,986 | |
Total | 53,725 | |
Securities Available for sale, Fair Value | ||
One year or less | 17,933 | |
After one to five years | 21,465 | |
Greater than five years | 13,836 | |
Total | $ 53,234 | $ 61,589 |
Loans and Allowance for Loan 49
Loans and Allowance for Loan Losses - Summary (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Loans | ||
Loans receivable | $ 721,191 | $ 660,571 |
Commercial Real Estate | ||
Loans | ||
Loans receivable | 573,941 | 492,296 |
Residential Mortgages | ||
Loans | ||
Loans receivable | 66,497 | 78,961 |
Commercial and Industrial | ||
Loans | ||
Loans receivable | 27,237 | 30,259 |
Home Equity | ||
Loans | ||
Loans receivable | 53,199 | 58,399 |
Consumer | ||
Loans | ||
Loans receivable | $ 317 | $ 656 |
Loans and Allowance for Loan 50
Loans and Allowance for Loan Losses - Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for loan losses: | ||||
Beginning Balance | $ 8,287 | $ 8,020 | ||
Charge-offs | (407) | (1,340) | ||
Recoveries | 37 | 37 | ||
Provision for loan losses | 400 | 1,570 | ||
Ending balance | 8,287 | 8,020 | $ 8,317 | $ 8,287 |
Ending balance: collectively evaluated for impairment | 8,317 | 8,287 | ||
Commercial Real Estate | ||||
Allowance for loan losses: | ||||
Beginning Balance | 5,925 | 5,566 | ||
Recoveries | 30 | 35 | ||
Provision for loan losses | (88) | 324 | ||
Ending balance | 5,925 | 5,566 | 5,867 | 5,925 |
Ending balance: collectively evaluated for impairment | 5,867 | 5,925 | ||
Residential Mortgages | ||||
Allowance for loan losses: | ||||
Beginning Balance | 554 | 572 | ||
Charge-offs | (49) | (158) | ||
Provision for loan losses | (133) | 140 | ||
Ending balance | 554 | 572 | 372 | 554 |
Ending balance: collectively evaluated for impairment | 372 | 554 | ||
Commercial and Industrial | ||||
Allowance for loan losses: | ||||
Beginning Balance | 809 | 1,066 | ||
Charge-offs | (90) | (1,026) | ||
Recoveries | 1 | 2 | ||
Provision for loan losses | (145) | 767 | ||
Ending balance | 809 | 1,066 | 575 | 809 |
Ending balance: collectively evaluated for impairment | 575 | 809 | ||
Home Equity | ||||
Allowance for loan losses: | ||||
Beginning Balance | 425 | 573 | ||
Charge-offs | (171) | (155) | ||
Provision for loan losses | 149 | 7 | ||
Ending balance | 425 | 573 | 403 | 425 |
Ending balance: collectively evaluated for impairment | 403 | 425 | ||
Consumer | ||||
Allowance for loan losses: | ||||
Beginning Balance | 6 | 39 | ||
Charge-offs | (97) | (1) | ||
Recoveries | 6 | |||
Provision for loan losses | 135 | (32) | ||
Ending balance | 6 | 39 | 50 | 6 |
Ending balance: collectively evaluated for impairment | 50 | 6 | ||
Unallocated | ||||
Allowance for loan losses: | ||||
Beginning Balance | 568 | 204 | ||
Provision for loan losses | 482 | 364 | ||
Ending balance | $ 568 | $ 204 | 1,050 | 568 |
Ending balance: collectively evaluated for impairment | $ 1,050 | $ 568 |
Loans and Allowance for Loan 51
Loans and Allowance for Loan Losses - Loan Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Loan receivables: Ending balance | ||
Total Loans Receivable | $ 721,191 | $ 660,571 |
Ending balance: individually evaluated for impairment | 26,691 | 28,016 |
Ending balance: collectively evaluated for impairment | 694,500 | 632,555 |
Commercial Real Estate | ||
Loan receivables: Ending balance | ||
Total Loans Receivable | 573,941 | 492,296 |
Ending balance: individually evaluated for impairment | 11,554 | 10,485 |
Ending balance: collectively evaluated for impairment | 562,387 | 481,811 |
Residential Mortgages | ||
Loan receivables: Ending balance | ||
Total Loans Receivable | 66,497 | 78,961 |
Ending balance: individually evaluated for impairment | 8,966 | 9,731 |
Ending balance: collectively evaluated for impairment | 57,531 | 69,230 |
Commercial and Industrial | ||
Loan receivables: Ending balance | ||
Total Loans Receivable | 27,237 | 30,259 |
Ending balance: individually evaluated for impairment | 2,957 | 3,257 |
Ending balance: collectively evaluated for impairment | 24,280 | 27,002 |
Home Equity | ||
Loan receivables: Ending balance | ||
Total Loans Receivable | 53,199 | 58,399 |
Ending balance: individually evaluated for impairment | 3,214 | 4,543 |
Ending balance: collectively evaluated for impairment | 49,985 | 53,856 |
Consumer | ||
Loan receivables: Ending balance | ||
Total Loans Receivable | 317 | 656 |
Ending balance: collectively evaluated for impairment | $ 317 | $ 656 |
Loans and Allowance for Loan 52
Loans and Allowance for Loan Losses - Past Due Status (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)loan | Dec. 31, 2016USD ($)loan | |
Past due receivable | ||
Total Past Due | $ 24,695 | $ 23,087 |
Current | 696,496 | 637,484 |
Total Loans Receivable | 721,191 | 660,571 |
Nonaccrual loans | $ 18,426 | $ 18,753 |
Number of accruing loans greater than 90 days delinquent and accruing interest | loan | 0 | 0 |
Interest income that would have been recognized on nonaccrual loans | $ 636 | $ 354 |
30 to 59 Days Past Due | ||
Past due receivable | ||
Total Past Due | 4,495 | 4,334 |
60 to 89 Days Past Due | ||
Past due receivable | ||
Total Past Due | 1,774 | |
Greater than 90 Days | ||
Past due receivable | ||
Total Past Due | 18,426 | 18,753 |
Commercial Real Estate | ||
Past due receivable | ||
Total Past Due | 3,553 | 8,736 |
Current | 570,388 | 483,560 |
Total Loans Receivable | 573,941 | 492,296 |
Nonaccrual loans | 3,344 | 5,992 |
Commercial Real Estate | 30 to 59 Days Past Due | ||
Past due receivable | ||
Total Past Due | 209 | 2,744 |
Commercial Real Estate | Greater than 90 Days | ||
Past due receivable | ||
Total Past Due | 3,344 | 5,992 |
Residential Mortgages | ||
Past due receivable | ||
Total Past Due | 12,489 | 3,907 |
Current | 54,008 | 75,054 |
Total Loans Receivable | 66,497 | 78,961 |
Nonaccrual loans | 9,052 | 3,907 |
Residential Mortgages | 30 to 59 Days Past Due | ||
Past due receivable | ||
Total Past Due | 2,463 | |
Residential Mortgages | 60 to 89 Days Past Due | ||
Past due receivable | ||
Total Past Due | 974 | |
Residential Mortgages | Greater than 90 Days | ||
Past due receivable | ||
Total Past Due | 9,052 | 3,907 |
Commercial and Industrial | ||
Past due receivable | ||
Total Past Due | 2,982 | 3,257 |
Current | 24,255 | 27,002 |
Total Loans Receivable | 27,237 | 30,259 |
Nonaccrual loans | 2,957 | 3,257 |
Commercial and Industrial | 60 to 89 Days Past Due | ||
Past due receivable | ||
Total Past Due | 25 | |
Commercial and Industrial | Greater than 90 Days | ||
Past due receivable | ||
Total Past Due | 2,957 | 3,257 |
Home Equity | ||
Past due receivable | ||
Total Past Due | 5,671 | 7,187 |
Current | 47,528 | 51,212 |
Total Loans Receivable | 53,199 | 58,399 |
Nonaccrual loans | 3,073 | 5,597 |
Home Equity | 30 to 59 Days Past Due | ||
Past due receivable | ||
Total Past Due | 1,823 | 1,590 |
Home Equity | 60 to 89 Days Past Due | ||
Past due receivable | ||
Total Past Due | 775 | |
Home Equity | Greater than 90 Days | ||
Past due receivable | ||
Total Past Due | 3,073 | 5,597 |
Consumer | ||
Past due receivable | ||
Current | 317 | 656 |
Total Loans Receivable | $ 317 | $ 656 |
Loans and Allowance for Loan 53
Loans and Allowance for Loan Losses - Ratings (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Loan portfolio by the aggregate pass rating | ||
Total | $ 721,191 | $ 660,571 |
Pass | ||
Loan portfolio by the aggregate pass rating | ||
Total | 693,147 | 629,608 |
Special Mention | ||
Loan portfolio by the aggregate pass rating | ||
Total | 1,353 | 2,947 |
Substandard | ||
Loan portfolio by the aggregate pass rating | ||
Total | 26,691 | 28,016 |
Commercial Real Estate | ||
Loan portfolio by the aggregate pass rating | ||
Total | 573,941 | 492,296 |
Commercial Real Estate | Pass | ||
Loan portfolio by the aggregate pass rating | ||
Total | 562,387 | 481,211 |
Commercial Real Estate | Special Mention | ||
Loan portfolio by the aggregate pass rating | ||
Total | 600 | |
Commercial Real Estate | Substandard | ||
Loan portfolio by the aggregate pass rating | ||
Total | 11,554 | 10,485 |
Residential Mortgages | ||
Loan portfolio by the aggregate pass rating | ||
Total | 66,497 | 78,961 |
Residential Mortgages | Pass | ||
Loan portfolio by the aggregate pass rating | ||
Total | 56,407 | 67,204 |
Residential Mortgages | Special Mention | ||
Loan portfolio by the aggregate pass rating | ||
Total | 1,124 | 2,026 |
Residential Mortgages | Substandard | ||
Loan portfolio by the aggregate pass rating | ||
Total | 8,966 | 9,731 |
Commercial and Industrial | ||
Loan portfolio by the aggregate pass rating | ||
Total | 27,237 | 30,259 |
Commercial and Industrial | Pass | ||
Loan portfolio by the aggregate pass rating | ||
Total | 24,051 | 26,681 |
Commercial and Industrial | Special Mention | ||
Loan portfolio by the aggregate pass rating | ||
Total | 229 | 321 |
Commercial and Industrial | Substandard | ||
Loan portfolio by the aggregate pass rating | ||
Total | 2,957 | 3,257 |
Home Equity | ||
Loan portfolio by the aggregate pass rating | ||
Total | 53,199 | 58,399 |
Home Equity | Pass | ||
Loan portfolio by the aggregate pass rating | ||
Total | 49,985 | 53,856 |
Home Equity | Substandard | ||
Loan portfolio by the aggregate pass rating | ||
Total | 3,214 | 4,543 |
Consumer | ||
Loan portfolio by the aggregate pass rating | ||
Total | 317 | 656 |
Consumer | Pass | ||
Loan portfolio by the aggregate pass rating | ||
Total | $ 317 | $ 656 |
Loans and Allowance for Loan 54
Loans and Allowance for Loan Losses - Impaired Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Recorded Investment | ||
Total loans | $ 26,691 | $ 28,016 |
Unpaid Principal Balance | ||
Total loans | 28,431 | 29,245 |
Average Recorded Investment | ||
Total loans | 25,946 | 27,550 |
Commercial Real Estate | ||
Recorded Investment | ||
Loans with no specific reserves | 11,554 | 10,485 |
Unpaid Principal Balance | ||
Loans with no specific reserves | 11,578 | 10,509 |
Average Recorded Investment | ||
Loans with no specific reserves | 10,232 | 15,031 |
Residential Mortgages | ||
Recorded Investment | ||
Loans with no specific reserves | 8,966 | 9,731 |
Unpaid Principal Balance | ||
Loans with no specific reserves | 10,287 | 10,804 |
Average Recorded Investment | ||
Loans with no specific reserves | 9,360 | 4,429 |
Commercial and Industrial | ||
Recorded Investment | ||
Loans with no specific reserves | 2,957 | 3,257 |
Unpaid Principal Balance | ||
Loans with no specific reserves | 3,057 | 3,257 |
Average Recorded Investment | ||
Loans with no specific reserves | 3,149 | 3,256 |
Home Equity | ||
Recorded Investment | ||
Loans with no specific reserves | 3,214 | 4,543 |
Unpaid Principal Balance | ||
Loans with no specific reserves | 3,509 | 4,675 |
Average Recorded Investment | ||
Loans with no specific reserves | $ 3,205 | $ 4,834 |
Loans and Allowance for Loan 55
Loans and Allowance for Loan Losses - Troubled Debt Restructuring (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)loan | Dec. 31, 2016USD ($)loan | |
Troubled debt restructuring | ||
Accrual Status | $ 637 | $ 624 |
Number of Loans | loan | 3 | 4 |
Nonaccrual Status | $ 10,743 | $ 7,256 |
Number of Loans | loan | 19 | 13 |
Total | $ 11,380 | $ 7,880 |
Number of new TDRs | loan | 5 | 8 |
Pre-modification outstanding recorded investments | $ 4,015 | $ 3,273 |
Post-modification outstanding recorded investments | $ 4,015 | $ 2,935 |
Number of TDR loan contracts which had payment defaults | loan | 0 | 0 |
Foreclosed properties | ||
Foreclosed residential real estate properties held as a result of obtaining physical possession | $ 0 | $ 0 |
Loans in formal foreclosure proceedings | 2,600 | 1,700 |
Term Modification | ||
Troubled debt restructuring | ||
Pre-modification outstanding recorded investments | 4,015 | |
Residential Mortgages | ||
Troubled debt restructuring | ||
Accrual Status | $ 637 | $ 521 |
Number of Loans | loan | 3 | 2 |
Nonaccrual Status | $ 7,446 | $ 3,477 |
Number of Loans | loan | 10 | 5 |
Total | $ 8,083 | $ 3,998 |
Number of new TDRs | loan | 4 | 2 |
Pre-modification outstanding recorded investments | $ 3,695 | $ 543 |
Post-modification outstanding recorded investments | 3,695 | 304 |
Residential Mortgages | Term Modification | ||
Troubled debt restructuring | ||
Pre-modification outstanding recorded investments | 3,695 | |
Commercial Real Estate | ||
Troubled debt restructuring | ||
Nonaccrual Status | $ 338 | $ 338 |
Number of Loans | loan | 1 | 1 |
Total | $ 338 | $ 338 |
Home Equity | ||
Troubled debt restructuring | ||
Accrual Status | $ 103 | |
Number of Loans | loan | 2 | |
Nonaccrual Status | $ 2,959 | $ 3,441 |
Number of Loans | loan | 8 | 7 |
Total | $ 2,959 | $ 3,544 |
Number of new TDRs | loan | 1 | 6 |
Pre-modification outstanding recorded investments | $ 320 | $ 2,730 |
Post-modification outstanding recorded investments | 320 | $ 2,631 |
Home Equity | Term Modification | ||
Troubled debt restructuring | ||
Pre-modification outstanding recorded investments | $ 320 |
Premises and Equipment (Details
Premises and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Premises and equipment | ||
Total premises and equipment, gross | $ 19,117 | $ 18,220 |
Less accumulated depreciation and amortization | 5,392 | 4,723 |
Total premises and equipment, net | 13,725 | 13,497 |
Depreciation and amortization | 669 | 665 |
Land | ||
Premises and equipment | ||
Total premises and equipment, gross | 4,828 | 4,828 |
Building | ||
Premises and equipment | ||
Total premises and equipment, gross | 10,468 | 10,038 |
Furniture and fixtures | ||
Premises and equipment | ||
Total premises and equipment, gross | 1,309 | 1,131 |
Equipment | ||
Premises and equipment | ||
Total premises and equipment, gross | $ 2,512 | $ 2,223 |
Deposits (Details)
Deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Maturity of Time Deposits | ||
3 months or less | $ 43,535 | $ 59,889 |
Over 3 months through 12 months | 95,818 | 92,044 |
Over 1 year through 2 years | 62,356 | 51,818 |
Over 2 years through 3 years | 29,110 | 31,135 |
Over 3 years through 4 years | 40,250 | 9,976 |
Over 4 years through 5 years | 75,980 | 47,880 |
Total time deposits | 347,049 | 292,742 |
Brokered Deposits | ||
Brokered deposits | 25,440 | 27,200 |
Public Funds Reciprocal | ||
Brokered Deposits | ||
Brokered deposits | 8,191 | 7,311 |
Non-Public Funds Reciprocal | ||
Brokered Deposits | ||
Brokered deposits | 15,186 | 14,898 |
Non-Reciprocal Funds | ||
Brokered Deposits | ||
Brokered deposits | 2,063 | 4,991 |
Certain municipalities and local government agencies | ||
Brokered Deposits | ||
Municipal Letter of Credit from FHLB that is used to collateralize for deposits of certain municipalities and local government agencies | 40,000 | 30,000 |
Fair value of securities pledged for deposits from certain municipalities and local government agencies | $ 20,000 | $ 37,200 |
Borrowed Funds (Details)
Borrowed Funds (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Borrowed Funds | ||
Amount outstanding under line of credit facility | $ 0 | $ 0 |
Carrying value of loans was pledged to secure advances from FHLB | 149,300 | 86,200 |
Securities were pledged to secure advances from FHLB | 11,000 | 11,100 |
Federal Home Loan Bank of New York | ||
Borrowed Funds | ||
Amount | $ 13,385 | $ 25,008 |
Rate (as a percent) | 1.61% | 1.47% |
F H L B Advances 0.98 Percent Due 2017 April | ||
Borrowed Funds | ||
Amount | $ 5,000 | |
Rate (as a percent) | 0.98% | |
Original Term (years) | 1 year | |
F H L B Advances 1.50 Percent Due 2019 June | ||
Borrowed Funds | ||
Amount | $ 1,624 | $ 2,630 |
Rate (as a percent) | 1.50% | 1.50% |
Original Term (years) | 5 years | 5 years |
F H L B Advances 1.51 Percent Due 2019 July | ||
Borrowed Funds | ||
Amount | $ 2,563 | $ 4,070 |
Rate (as a percent) | 1.51% | 1.51% |
Original Term (years) | 5 years | 5 years |
F H L B Advances 1.51 Percent Due 2019 August | ||
Borrowed Funds | ||
Amount | $ 2,511 | $ 3,916 |
Rate (as a percent) | 1.51% | 1.51% |
Original Term (years) | 5 years | 5 years |
F H L B Advances 2.02 Percent Due 2021 August | ||
Borrowed Funds | ||
Amount | $ 2,766 | $ 3,469 |
Rate (as a percent) | 2.02% | 2.02% |
Original Term (years) | 7 years | 7 years |
F H L B Advances 1.48 Percent Due 2019 October | ||
Borrowed Funds | ||
Amount | $ 3,921 | $ 5,923 |
Rate (as a percent) | 1.48% | 1.48% |
Original Term (years) | 5 years | 5 years |
Zions First National Bank | ||
Borrowed Funds | ||
Overnight line of credit facility available | $ 16,000 | |
First Tennessee Bank | ||
Borrowed Funds | ||
Overnight line of credit facility available | 12,000 | |
Atlantic Community Bankers Bank | ||
Borrowed Funds | ||
Overnight line of credit facility available | 10,000 | |
Amount outstanding under line of credit facility | $ 5,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current tax expense: | |||
Federal | $ 2,259 | $ 2,455 | |
State | 268 | 162 | |
Deferred income tax benefit: | |||
Federal | (218) | (383) | |
Re-measurement of deferred taxes due to Tax Cuts and Jobs Act | 1,393 | ||
State | (29) | (100) | |
Income tax expense | 3,673 | 2,134 | |
Deferred tax assets: | |||
Start up expenses | 82 | 152 | |
Allowance for loan losses | 2,488 | 3,541 | |
Accrued expenses | 224 | 299 | |
Stock compensation plans | 129 | 451 | |
Unrealized losses on securities available for sale | 135 | 124 | |
Other | 728 | 605 | |
Total | 3,786 | 5,172 | |
Deferred tax liabilities: | |||
Deferred loan costs | (52) | (83) | |
Prepaid expenses | (133) | (120) | |
Depreciation | (191) | (424) | |
Total | (376) | (627) | |
Net deferred tax asset | $ 3,410 | $ 4,545 | |
Income tax expense differs from the amounts computed by applying the U.S. federal income tax rate | |||
U.S. federal income tax rate (as a percent) | 34.00% | 34.00% | |
Reclassification related to adoption of ASU 2018-02 | $ 58 | ||
Federal income tax expense at statutory rate | 2,464 | $ 2,086 | |
Increase (decrease) in taxes resulting from: | |||
State taxes, net of federal income tax expense | 158 | 41 | |
Tax exempt income | (20) | (13) | |
Stock-based compensation | (317) | 21 | |
Meals and entertainment | 4 | 10 | |
Re-measurement of deferred taxes due to Tax Cuts and Jobs Act | 1,393 | ||
Other | (9) | (11) | |
Income tax expense | $ 3,673 | $ 2,134 | |
Forecast | |||
Income tax expense differs from the amounts computed by applying the U.S. federal income tax rate | |||
U.S. federal income tax rate (as a percent) | 21.00% |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Leases | ||
Rental expense | $ 1,400 | $ 1,400 |
Future minimum lease payments (exclusive of payments for maintenance, insurance, taxes and any other costs associated with offices) for operating leases | ||
2,018 | 1,396 | |
2,019 | 1,174 | |
2,020 | 879 | |
2,021 | 648 | |
2,022 | 369 | |
Thereafter | 863 | |
Total future minimum lease payments | $ 5,329 |
Related-party Transactions (Det
Related-party Transactions (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)itemloan | Dec. 31, 2016USD ($)loan | |
Related party transactions | ||
Number of loans in nonaccrual, past due, or restructured status | loan | 0 | 5 |
Related party deposit balance | $ 34,900 | $ 55,500 |
Number of directors related to office space renting entities where the company rents | item | 2 | |
Changes in related-party loans | ||
Legal fees, for non-loan related matters | $ 398 | 260 |
Director serving as a related party of a company where office space is rented | ||
Changes in related-party loans | ||
Rent paid to third party entity | 226 | 443 |
Bank | ||
Changes in related-party loans | ||
Outstanding loans at beginning of the year | 22,994 | 26,791 |
Advances | 7,039 | 4,098 |
Repayments | (5,314) | (7,895) |
Former director | (7,473) | |
Outstanding loans at end of the year | 17,246 | 22,994 |
Two directors | ||
Changes in related-party loans | ||
Legal fees, for non-loan related matters | $ 15 | 7 |
Two directors | Legal counsel on loan closings | ||
Changes in related-party loans | ||
Number of directors that participated in transaction | item | 2 | |
Loan reimbursement from third party customer | $ 119 | 158 |
Management of Third Party Company | Director serving as president of insurance company where policy held | ||
Changes in related-party loans | ||
Number of directors that participated in transaction | item | 1 | |
Insurance premiums paid to third party carrier | $ 220 | $ 220 |
Earnings Per Share - Calculatio
Earnings Per Share - Calculation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Basic earnings per share | ||
Net income available to common stockholders | $ 3,574 | $ 4,001 |
Weighted average number of common shares outstanding - basic | 6,556 | 6,274 |
Basic earnings per share (in dollars per share) | $ 0.55 | $ 0.64 |
Diluted earnings per share | ||
Net income available to common stockholders | $ 3,574 | $ 4,001 |
Weighted average number of common shares outstanding | 6,556 | 6,274 |
Effect of dilutive options (in shares) | 16 | |
Weighted average number of common shares and common share equivalents- diluted | 6,572 | 6,274 |
Diluted earnings per share (in dollars per share) | $ 0.54 | $ 0.64 |
Earnings Per Share - Dilution (
Earnings Per Share - Dilution (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share | ||
Effect of dilutive options (in shares) | 16,000 | |
Incentive stock options at a weighted average price of $11.50 | ||
Earnings Per Share | ||
Effect of dilutive options (in shares) | 30,000 | |
Weighted average price of incentive stock options included in computation of diluted earnings per share (in dollars per share) | $ 11.50 | |
Restricted stock | ||
Earnings Per Share | ||
Effect of dilutive options (in shares) | 28,000 | |
Non-qualified stock options at a weighted average price of $11.62 | ||
Earnings Per Share | ||
Effect of dilutive options (in shares) | 97,453 | |
Weighted average price of incentive stock options included in computation of diluted earnings per share (in dollars per share) | $ 11.62 | |
Non-qualified stock options at a weighted average price of $11.50 | ||
Earnings Per Share | ||
Effect of dilutive options (in shares) | 310,000 | |
Weighted average price of incentive stock options included in computation of diluted earnings per share (in dollars per share) | $ 11.50 | |
Nonqualified stock options at a weighted average Price of $11.23 | ||
Earnings Per Share | ||
Effect of dilutive options (in shares) | 10,000 | |
Weighted average price of incentive stock options included in computation of diluted earnings per share (in dollars per share) | $ 11.23 |
Stockholders' Equity and Divi64
Stockholders' Equity and Dividend Restrictions (Details) | Jun. 26, 2017 | Dec. 31, 2017$ / shares | Dec. 31, 2016item$ / shares |
Stockholders' Equity and Dividend Restrictions | |||
Dividends Declared (in percent) | 5.00% | 5.00% | |
Cash dividend declared (in dollars per share) | $ 0.10 | $ 0.18 | |
Number of quarterly cash dividends | item | 3 | ||
Quarterly cash dividend declared (in dollars per share) | $ 0.06 | ||
Minimum percentage of surplus on capital stock to declare and pay dividends | 50.00% |
Benefit Plans - 2006 Stock Opti
Benefit Plans - 2006 Stock Option Plan (Details) - USD ($) | Jun. 26, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Benefit Plans and Stock-Based Compensation | ||||||||
Dividends Declared (in percent) | 5.00% | 5.00% | ||||||
Unrecognized compensation expenses related to unvested stock options | $ 132,000 | |||||||
Share based compensation expense | $ 397,000 | $ 285,000 | ||||||
Number of Shares | ||||||||
Exercised (in shares) | (273,381) | (80,300) | ||||||
Total value of exercised stock options | $ 2,993,000 | $ 730,000 | ||||||
2006 Stock Option Plan | ||||||||
Benefit Plans and Stock-Based Compensation | ||||||||
Number of shares available for grants | 0 | |||||||
Number of unvested options outstanding | 34,545 | 59,283 | ||||||
Maximum number of shares authorized to be purchased | 251,983 | |||||||
Unrecognized compensation expenses related to unvested stock options | $ 49,000 | |||||||
Share based compensation expense | $ 1,000 | $ 29,000 | $ 49,000 | $ 48,000 | ||||
2006 Stock Option Plan | Incentive stock options | ||||||||
Benefit Plans and Stock-Based Compensation | ||||||||
Aggregate number of incentive stock options issued (in shares) | 220,659 | |||||||
Number of shares outstanding under the plan | 51,253 | 90,783 | 51,253 | 90,783 | 51,253 | 90,783 | 167,685 | |
Number of Shares | ||||||||
Number of shares outstanding under the plan | 51,253 | 90,783 | 51,253 | 90,783 | 51,253 | 90,783 | 167,685 | |
Granted (in shares) | 67,158 | |||||||
Forfeited (in shares) | (7,149) | (59,745) | ||||||
Exercised (in shares) | (32,381) | (84,315) | ||||||
Outstanding at the end of the period (in shares) | 51,253 | 90,783 | 51,253 | 90,783 | ||||
Exercisable at the end of the period (in shares) | 16,708 | 31,500 | ||||||
Total value of exercised stock options | $ 354,000 | |||||||
Weighted Average Exercise Price per Share | ||||||||
Outstanding at the beginning of the period (in dollars per share) | $ 10.74 | $ 9.73 | ||||||
Granted (in dollars per share) | 10.64 | |||||||
Forfeited (in dollars per share) | 10.64 | 10.73 | ||||||
Exercised (in dollars per share) | 10.94 | 8.66 | ||||||
Outstanding at the end of the period (in dollars per share) | $ 10.63 | $ 10.74 | $ 10.63 | $ 10.74 | ||||
Exercisable at the end of the period (in dollars per share) | $ 10.63 | $ 10.85 | ||||||
Aggregate Intrinsic Value | ||||||||
Aggregate intrinsic value of options outstanding | $ 390,035 | $ 191,552 | ||||||
Exercisable at the end of the period (in dollars) | $ 127,148 | $ 60,000 | ||||||
Weighted Average Remaining Contractual Term | ||||||||
Outstanding at the end of the period | 8 years 6 months 22 days | 6 years 6 months 22 days | ||||||
Exercisable at the end of the period | 8 years 6 months 22 days | 11 months 1 day | ||||||
2006 Stock Option Plan | Non-qualified options | ||||||||
Number of Shares | ||||||||
Expected dividend yield (as a percent) | 2.149% | |||||||
Risk free interest rate (as a percent) | 1.57% | |||||||
Expected volatility rate (as a percent) | 26.54% | |||||||
Expected life (in years) | 10 years | |||||||
2006 Stock Option Plan | Non-qualified options | Executive | ||||||||
Benefit Plans and Stock-Based Compensation | ||||||||
Fair value of grant (in dollars per NQO) | $ 2.63 | |||||||
Number of Shares | ||||||||
Granted (in shares) | 67,158 | |||||||
Vesting on February 1, 2017, February 1, 2018 and February 1, 2019 | 2006 Stock Option Plan | Non-qualified options | ||||||||
Number of Shares | ||||||||
Vesting percentage | 33.33% | |||||||
Share Based Compensation Exercise Price One Member | 2006 Stock Option Plan | Incentive stock options | ||||||||
Number of Shares | ||||||||
Exercised (in shares) | (31,500) | |||||||
Weighted Average Exercise Price per Share | ||||||||
Exercised (in dollars per share) | $ 10.95 | |||||||
Share Based Compensation Exercise Price Two Member | ||||||||
Number of Shares | ||||||||
Exercised (in shares) | (881) | |||||||
Share Based Compensation Exercise Price Two Member | 2006 Stock Option Plan | Incentive stock options | ||||||||
Weighted Average Exercise Price per Share | ||||||||
Exercised (in dollars per share) | $ 10.64 |
Benefit Plans - 2007 Director P
Benefit Plans - 2007 Director Plan (Details) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2017USD ($)shares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | |
Benefit Plans and Stock-Based Compensation | |||
Unrecognized compensation expenses related to unvested stock options | $ | $ 132,000 | $ 132,000 | |
Share based compensation expense | $ | 397,000 | $ 285,000 | |
Total value of exercised stock options | $ | $ 2,993,000 | $ 730,000 | |
Number of Shares | |||
Exercised (in shares) | (273,381) | (80,300) | |
2007 Director Plan | |||
Benefit Plans and Stock-Based Compensation | |||
Number of unvested options outstanding | 0 | 0 | 0 |
2007 Director Plan | Non-qualified options | |||
Benefit Plans and Stock-Based Compensation | |||
Number of shares available for grants | 0 | 0 | |
Maximum number of shares authorized to be purchased | 504,000 | 504,000 | |
Aggregate number of incentive stock options issued (in shares) | 404,600 | 404,600 | |
Unrecognized compensation expenses related to unvested stock options | $ | $ 0 | $ 0 | $ 0 |
Share based compensation expense | $ | $ 0 | $ 0 | |
Exercise price of options (in dollars per share) | $ / shares | $ 10.95 | ||
Total value of exercised stock options | $ | $ 2,640,000 | ||
Number of Shares | |||
Outstanding at the beginning of the period (in shares) | 325,500 | 347,901 | |
Forfeited (in shares) | (84,500) | (22,401) | |
Exercised (in shares) | (241,000) | ||
Outstanding at the end of the period (in shares) | 325,500 | ||
Exercisable at the end of the period (in shares) | 325,500 | ||
Weighted Average Exercise Price per Share | |||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 10.95 | $ 10.95 | |
Forfeited (in dollars per share) | $ / shares | 10.95 | 10.95 | |
Exercised (in dollars per share) | $ / shares | $ 10.95 | ||
Outstanding at the end of the period (in dollars per share) | $ / shares | 10.95 | ||
Exercisable at the end of the period (in dollars per share) | $ / shares | $ 10.95 | ||
Aggregate Intrinsic Value | |||
Aggregate intrinsic value of options outstanding | $ | $ 620,000 | ||
Exercisable at the end of the period (in dollars) | $ | $ 620,000 | ||
Weighted Average Remaining Contractual Term | |||
Outstanding at the end of the period | 9 months 22 days | ||
Exercisable at the end of the period | 9 months 22 days | ||
Share Based Compensation Exercise Price Two Member | |||
Number of Shares | |||
Exercised (in shares) | (881) |
Benefit Plans - 2011 Equity Inc
Benefit Plans - 2011 Equity Incentive Plan (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jul. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Benefit Plans and Stock-Based Compensation | |||||
Unrecognized compensation expenses | $ 324,000 | $ 324,000 | |||
Share based compensation expense | $ 397,000 | $ 285,000 | |||
Exercised (in shares) | 273,381 | 80,300 | |||
Unrecognized compensation expenses related to unvested stock options | $ 132,000 | $ 132,000 | |||
2011 Equity Incentive Plan | |||||
Benefit Plans and Stock-Based Compensation | |||||
Number of unvested options outstanding | 25,200 | 25,200 | |||
Maximum number of shares authorized to be purchased | 262,500 | 262,500 | |||
Aggregate number of incentive stock options issued (in shares) | 156,943 | 156,943 | |||
Exercised (in shares) | 0 | 0 | |||
2011 Equity Incentive Plan | Incentive stock options | |||||
Benefit Plans and Stock-Based Compensation | |||||
Number of unvested options outstanding | 20,000 | 20,000 | |||
Share based compensation expense | $ 24,000 | $ 7,000 | $ 57,000 | $ 49,000 | |
Unrecognized compensation expenses related to unvested stock options | $ 83,000 | $ 83,000 | |||
2011 Equity Incentive Plan | Non-qualified options | |||||
Benefit Plans and Stock-Based Compensation | |||||
Expected dividend yield (as a percent) | 0.00% | 2.137% | |||
Risk free interest rate (as a percent) | 2.31% | 1.87% | |||
Expected volatility rate (as a percent) | 26.81% | 27.00% | |||
Expected life (in years) | 10 years | 10 years | |||
Number of Shares | |||||
Outstanding at the beginning of the period (in shares) | 31,500 | ||||
Granted (in shares) | 14,700 | 31,500 | |||
Outstanding at the end of the period (in shares) | 46,200 | 31,500 | 46,200 | 31,500 | |
Exercisable at the end of the period (in shares) | 21,000 | 10,500 | 21,000 | 10,500 | |
Weighted Average Exercise Price per Share | |||||
Outstanding at the beginning of the period (in dollars per share) | $ 10.70 | ||||
Granted (in dollars per share) | 17.05 | $ 10.70 | |||
Outstanding at the end of the period (in dollars per share) | $ 12.72 | $ 10.70 | 12.72 | 10.70 | |
Exercisable at the end of the period (in dollars per share) | $ 10.70 | $ 10.70 | $ 10.70 | $ 10.70 | |
Aggregate Intrinsic Value | |||||
Aggregate intrinsic value of options outstanding | $ 255,465,000 | $ 68,100,000 | $ 255,465,000 | $ 68,100,000 | |
Exercisable at the end of the period (in dollars) | 158,500,000 | $ 22,700,000 | $ 158,500,000 | $ 22,700,000 | |
Weighted Average Remaining Contractual Term | |||||
Outstanding at the end of the period | 8 years 8 months 9 days | 9 years 3 months 22 days | |||
Exercisable at the end of the period | 8 years 3 months 22 days | 9 years 3 months 22 days | |||
2011 Equity Incentive Plan | Non-qualified options | Executive | |||||
Benefit Plans and Stock-Based Compensation | |||||
Fair value of grant (in dollars per NQO) | $ 6.95 | $ 2.78 | |||
Number of Shares | |||||
Granted (in shares) | 14,700 | 31,500 | |||
2011 Equity Incentive Plan | Restricted stock | |||||
Benefit Plans and Stock-Based Compensation | |||||
Unrecognized compensation expenses | $ 324,000 | $ 324,000 | |||
Period over which unrecognized compensation expense is expected to be recognized | 24 months | ||||
Share based compensation expense | $ 287,000 | $ 188,000 | |||
Restricted Stock, Number of Shares | |||||
Non-vested restricted stock, Outstanding, beginning of year (in shares) | 29,400 | 50,663 | |||
Granted (in shares) | 31,500 | ||||
Forfeited (in shares) | (4,200) | (4,463) | |||
Vested (in shares) | (24,150) | (16,800) | |||
Non-vested restricted stock, Outstanding, end of year (in shares) | 32,550 | 29,400 | 32,550 | 29,400 | |
Restricted Stock, Weighted Average Grant Date Fair Value | |||||
Non-vested restricted stock, Outstanding, beginning of year (in dollars per share) | $ 12.38 | $ 12.37 | |||
Granted (in dollars per share) | 14.28 | ||||
Forfeited (in dollars per share) | 12.38 | 12.29 | |||
Vested (in dollars per share) | 13.21 | 12.38 | |||
Non-vested restricted stock, Outstanding, end of year (in dollars per share) | $ 13.61 | $ 12.38 | $ 13.61 | $ 12.38 | |
2006 Stock Option Plan | |||||
Benefit Plans and Stock-Based Compensation | |||||
Number of unvested options outstanding | 34,545 | 59,283 | 34,545 | 59,283 | |
Maximum number of shares authorized to be purchased | 251,983 | 251,983 | |||
Share based compensation expense | $ 1,000 | $ 29,000 | $ 49,000 | $ 48,000 | |
Unrecognized compensation expenses related to unvested stock options | $ 49,000 | $ 49,000 | |||
2006 Stock Option Plan | Incentive stock options | |||||
Benefit Plans and Stock-Based Compensation | |||||
Aggregate number of incentive stock options issued (in shares) | 220,659 | 220,659 | |||
Exercised (in shares) | 32,381 | 84,315 | |||
Forfeited (in shares) | (7,149) | (59,745) | |||
Number of Shares | |||||
Outstanding at the beginning of the period (in shares) | 90,783 | 167,685 | |||
Granted (in shares) | 67,158 | ||||
Outstanding at the end of the period (in shares) | 51,253 | 90,783 | 51,253 | 90,783 | |
Exercisable at the end of the period (in shares) | 16,708 | 31,500 | 16,708 | 31,500 | |
Weighted Average Exercise Price per Share | |||||
Outstanding at the beginning of the period (in dollars per share) | $ 10.74 | $ 9.73 | |||
Granted (in dollars per share) | 10.64 | ||||
Outstanding at the end of the period (in dollars per share) | $ 10.63 | $ 10.74 | 10.63 | 10.74 | |
Exercisable at the end of the period (in dollars per share) | $ 10.63 | $ 10.85 | $ 10.63 | $ 10.85 | |
Aggregate Intrinsic Value | |||||
Aggregate intrinsic value of options outstanding | $ 390,035 | $ 191,552 | $ 390,035 | $ 191,552 | |
Exercisable at the end of the period (in dollars) | $ 127,148 | $ 60,000 | $ 127,148 | $ 60,000 | |
Weighted Average Remaining Contractual Term | |||||
Outstanding at the end of the period | 8 years 6 months 22 days | 6 years 6 months 22 days | |||
Exercisable at the end of the period | 8 years 6 months 22 days | 11 months 1 day | |||
2006 Stock Option Plan | Non-qualified options | |||||
Benefit Plans and Stock-Based Compensation | |||||
Expected dividend yield (as a percent) | 2.149% | ||||
Risk free interest rate (as a percent) | 1.57% | ||||
Expected volatility rate (as a percent) | 26.54% | ||||
Expected life (in years) | 10 years | ||||
2006 Stock Option Plan | Non-qualified options | Executive | |||||
Benefit Plans and Stock-Based Compensation | |||||
Fair value of grant (in dollars per NQO) | $ 2.63 | ||||
Number of Shares | |||||
Granted (in shares) | 67,158 | ||||
Vesting immediately | 2011 Equity Incentive Plan | Non-qualified options | |||||
Benefit Plans and Stock-Based Compensation | |||||
Vesting percentage | 33.33% | ||||
Vesting over two years | 2011 Equity Incentive Plan | Non-qualified options | |||||
Benefit Plans and Stock-Based Compensation | |||||
Vesting term | 2 years | ||||
Vesting on February 1, 2017, February 1, 2018 and February 1, 2019 | 2011 Equity Incentive Plan | Non-qualified options | |||||
Benefit Plans and Stock-Based Compensation | |||||
Vesting percentage | 33.33% | ||||
Vesting on February 1, 2017, February 1, 2018 and February 1, 2019 | 2006 Stock Option Plan | Non-qualified options | |||||
Benefit Plans and Stock-Based Compensation | |||||
Vesting percentage | 33.33% |
Benefit Plans - Defined Contrib
Benefit Plans - Defined Contribution Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Employer safe harbor matching contributions (as a percent) | 100.00% | |
Matching contributions under the 401(k) profit sharing plan | $ 216 | $ 80 |
Maximum | ||
Percentage of contribution by employer on employees' compensation | 4.00% |
Regulatory Capital Requiremen69
Regulatory Capital Requirements (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Leverage (Tier 1) Capital Ratio | ||
Bank actual Amount | $ 83,664 | $ 77,337 |
Bank actual Ratio (as a percent) | 9.59% | 9.02% |
FDIC requirements, Minimum Capital Adequacy Amount | $ 34,888 | $ 33,293 |
FDIC requirements, Minimum Capital Adequacy Ratio (as a percent) | 4.00% | 4.00% |
FDIC requirements, For Classification As Well Capitalized Amount | $ 43,610 | $ 41,617 |
FDIC requirements, For Classification As Well Capitalized Ratio (as a percent) | 5.00% | 5.00% |
Risk-Based Capital: Common Equity Tier 1 Capital | ||
Bank actual, Amount | $ 83,664 | $ 77,337 |
Bank actual, Ratio (as a percent) | 10.84% | 10.98% |
FDIC requirements, Minimum Capital Adequacy, Amount | $ 34,746 | $ 31,685 |
FDIC requirements, Minimum Capital Adequacy, Ratio (as a percent) | 4.50% | 4.50% |
FDIC requirements, Minimum Capital With Phase-in Buffer, Amount | $ 44,397 | $ 36,086 |
FDIC requirements, Minimum Capital With Phase-in Buffer Ratio (as a percent) | 5.75 | 5.125 |
FDIC requirements, For Classification As Well Capitalized Amount | $ 50,188 | $ 45,767 |
FDIC requirements, For Classification As Well Capitalized Ratio (as a percent) | 6.50% | 6.50% |
Risk-Based Capital: Tier 1 Capital Ratio | ||
Bank actual Amount | $ 83,664 | $ 77,337 |
Bank actual Ratio (as a percent) | 10.84% | 10.98% |
FDIC requirements, Minimum Capital Adequacy Amount | $ 46,327 | $ 42,247 |
FDIC requirements, Minimum Capital Adequacy Ratio (as a percent) | 6.00% | 6.00% |
FDIC requirements, Minimum Capital With Phase-in Buffer, Amount | $ 55,979 | $ 46,647 |
FDIC requirements, Minimum Capital With Phase-in Buffer, Ratio | 7.25% | 6.625% |
FDIC requirements, For Classification As Well Capitalized Amount | $ 61,770 | $ 56,329 |
FDIC requirements, For Classification As Well Capitalized Ratio (as a percent) | 8.00% | 8.00% |
Risk-Based Capital: Total Capital Ratio | ||
Bank actual Amount | $ 92,265 | $ 85,993 |
Bank actual Ratio (as a percent) | 11.95% | 12.21% |
FDIC requirements, Minimum Capital Adequacy Amount | $ 61,770 | $ 56,329 |
FDIC requirements, Minimum Capital Adequacy Ratio (as a percent) | 8.00% | 8.00% |
FDIC requirements, Minimum Capital With Phase-in Buffer, Amount | $ 71,421 | $ 60,730 |
FDIC Requirements, Minimum Capital With Phase-in Buffer, Ratio (as a percent) | 9.25% | 8.625% |
FDIC requirements, For Classification As Well Capitalized Amount | $ 77,212 | $ 70,411 |
Total Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 10.00% | 10.00% |
Assets | $ 887,407 | $ 822,440 |
Maximum | ||
Risk-Based Capital: Total Capital Ratio | ||
Assets | 1,000,000 | |
Bancorp of New Jersey, Inc | ||
Risk-Based Capital: Total Capital Ratio | ||
Assets | $ 83,309 | $ 77,144 |
Financial Instruments with Of70
Financial Instruments with Off-Balance Sheet Risk (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Bank | ||
Financial Instruments with Off-Balance Sheet Risk | ||
Outstanding available loan commitments | $ 83 | $ 95.3 |
Standby letters of credit | ||
Financial Instruments with Off-Balance Sheet Risk | ||
Expiration period of letters of credit, maximum | 1 year | |
Standby letters of credit | Bank | ||
Financial Instruments with Off-Balance Sheet Risk | ||
Outstanding letters of credit | $ 3.4 | $ 3.6 |
Financial Information of Pare71
Financial Information of Parent Company - Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets: | |||
Total assets | $ 887,407 | $ 822,440 | |
Liabilities and stockholders' equity: | |||
Stockholders' equity | 83,309 | 77,144 | $ 73,153 |
Total liabilities and stockholders’ equity | 887,407 | 822,440 | |
Bancorp of New Jersey, Inc | |||
Assets: | |||
Investment in subsidiary, net | 83,309 | 77,144 | |
Total assets | 83,309 | 77,144 | |
Liabilities and stockholders' equity: | |||
Stockholders' equity | 83,309 | 77,144 | |
Total liabilities and stockholders’ equity | $ 83,309 | $ 77,144 |
Financial Information of Pare72
Financial Information of Parent Company - Statements of Income and Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Financial Statements of Parent Company | ||
Net income | $ 3,574 | $ 4,001 |
Other comprehensive (loss) income | (104) | 103 |
Comprehensive income | 3,470 | 4,104 |
Bancorp of New Jersey, Inc | ||
Condensed Financial Statements of Parent Company | ||
Equity in undistributed earnings of subsidiary bank | 3,574 | 4,001 |
Net income | 3,574 | 4,001 |
Other comprehensive (loss) income | (162) | 103 |
Comprehensive income | $ 3,412 | $ 4,104 |
Financial Information of Pare73
Financial Information of Parent Company - Statement of Cash Flow (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flow from operating activities: | ||
Net income | $ 3,574 | $ 4,001 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 6,498 | 6,386 |
Cash flows from investing activities: | ||
NET CASH USED IN INVESTING ACTIVITIES | (51,835) | (18,929) |
Cash flows from financing activities: | ||
Cash dividends paid | (695) | (1,128) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 60,980 | 15,330 |
Increase in cash and cash equivalents | 15,643 | 2,787 |
Bancorp of New Jersey, Inc | ||
Cash flow from operating activities: | ||
Net income | 3,574 | 4,001 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Equity in undistributed earnings of the subsidiary bank | (3,574) | (4,001) |
Cash flows from investing activities: | ||
Cash dividends received from subsidiary bank | 695 | 1,128 |
NET CASH USED IN INVESTING ACTIVITIES | 695 | 1,128 |
Cash flows from financing activities: | ||
Cash dividends paid | (695) | (1,128) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | (695) | (1,128) |
Net cash at beginning of year | 0 | 0 |
Net cash at end of year | $ 0 | $ 0 |
Fair Value Measurement and Fa74
Fair Value Measurement and Fair Value of Financial Instruments - Recurring and Nonrecurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair value measurements | ||
Securities available for sale | $ 53,234 | $ 61,589 |
Significant Other Observable Inputs (Level 2) | ||
Fair value measurements | ||
Securities available for sale | 53,234 | 61,589 |
Recurring basis | ||
Fair value measurements | ||
Securities available for sale | 53,234 | 61,589 |
Recurring basis | U.S. Treasury securities | ||
Fair value measurements | ||
Securities available for sale | 6,162 | 6,268 |
Recurring basis | Government sponsored enterprise obligations | ||
Fair value measurements | ||
Securities available for sale | 55,321 | |
Recurring basis | Agency backed | ||
Fair value measurements | ||
Securities available for sale | 33,235 | |
Recurring basis | Mortgage backed | ||
Fair value measurements | ||
Securities available for sale | 13,837 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | ||
Fair value measurements | ||
Securities available for sale | 53,234 | 61,589 |
Recurring basis | Significant Other Observable Inputs (Level 2) | U.S. Treasury securities | ||
Fair value measurements | ||
Securities available for sale | 6,162 | 6,268 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Government sponsored enterprise obligations | ||
Fair value measurements | ||
Securities available for sale | 55,321 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | Agency backed | ||
Fair value measurements | ||
Securities available for sale | 33,235 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | Mortgage backed | ||
Fair value measurements | ||
Securities available for sale | 13,837 | |
Nonrecurring basis | Significant Unobservable Inputs (Level 3) | ||
Fair value measurements | ||
Other Real Estate Owned Fair Value Disclosure | $ 415 | $ 614 |
Fair Value Measurement and Fa75
Fair Value Measurement and Fair Value of Financial Instruments - Level 3 Information (Details) - Nonrecurring basis - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value | ||
Additional quantitative information about assets measured at fair value on a nonrecurring basis for which the Company utilized Level 3 inputs to determine fair value | ||
Other real estate owned, portion valued at fair value | $ 415 | $ 614 |
Significant Unobservable Inputs (Level 3) | ||
Additional quantitative information about assets measured at fair value on a nonrecurring basis for which the Company utilized Level 3 inputs to determine fair value | ||
Other real estate owned, portion valued at fair value | $ 415 | $ 614 |
Significant Unobservable Inputs (Level 3) | Appraisal of collateral | Minimum | ||
Additional quantitative information about assets measured at fair value on a nonrecurring basis for which the Company utilized Level 3 inputs to determine fair value | ||
Impaired loans - Appraisal Adjustments (as a percent) | 11.50% | |
Impaired loans - Liquidation Expenses (as a percent) | 8.90% | |
Other real estate owned - Appraisal Adjustments (as a percent) | 21.80% | |
Other real estate owned - Liquidation Expenses (as a percent) | 6.80% | |
Significant Unobservable Inputs (Level 3) | Appraisal of collateral | Maximum | ||
Additional quantitative information about assets measured at fair value on a nonrecurring basis for which the Company utilized Level 3 inputs to determine fair value | ||
Impaired loans - Appraisal Adjustments (as a percent) | 48.40% | |
Impaired loans - Liquidation Expenses (as a percent) | 10.30% | |
Significant Unobservable Inputs (Level 3) | Appraisal of collateral | Weighted average | ||
Additional quantitative information about assets measured at fair value on a nonrecurring basis for which the Company utilized Level 3 inputs to determine fair value | ||
Impaired loans - Appraisal Adjustments (as a percent) | 21.80% | |
Impaired loans - Liquidation Expenses (as a percent) | 9.30% |
Fair Value Measurement and Fa76
Fair Value Measurement and Fair Value of Financial Instruments - Carrying Amount (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Financial assets: | ||
Interest bearing time deposits | $ 1,000 | $ 1,000 |
Securities available for sale | 53,234 | 61,589 |
Securities held to maturity | 6,058 | 7,343 |
Restricted investment in bank stock | 1,380 | 1,983 |
Accrued interest receivable | 2,695 | 2,366 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Cash and cash equivalents | 92,619 | 76,976 |
Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Interest bearing time deposits | 1,000 | 1,000 |
Securities available for sale | 53,234 | 61,589 |
Securities held to maturity | 6,058 | 7,343 |
Restricted investment in bank stock | 1,380 | 1,983 |
Accrued interest receivable | 2,695 | 2,366 |
Financial liabilities: | ||
Deposits | 793,879 | 722,711 |
Borrowed funds | 13,307 | 24,933 |
Accrued interest payable | 651 | 516 |
Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Net loans | 703,901 | 659,084 |
Carrying amount | ||
Financial assets: | ||
Cash and cash equivalents | 92,619 | 76,976 |
Interest bearing time deposits | 1,000 | 1,000 |
Securities available for sale | 53,234 | 61,589 |
Securities held to maturity | 6,058 | 7,343 |
Restricted investment in bank stock | 1,380 | 1,983 |
Net loans | 712,076 | 651,698 |
Accrued interest receivable | 2,695 | 2,366 |
Financial liabilities: | ||
Deposits | 788,293 | 717,988 |
Borrowed funds | 13,385 | 25,008 |
Accrued interest payable | 651 | 516 |
Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 92,619 | 76,976 |
Interest bearing time deposits | 1,000 | 1,000 |
Securities available for sale | 53,234 | 61,589 |
Securities held to maturity | 6,058 | 7,343 |
Restricted investment in bank stock | 1,380 | 1,983 |
Net loans | 703,901 | 659,084 |
Accrued interest receivable | 2,695 | 2,366 |
Financial liabilities: | ||
Deposits | 793,879 | 722,711 |
Borrowed funds | 13,307 | 24,933 |
Accrued interest payable | $ 651 | $ 516 |
Accumulated Other Comprehensi77
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Accumulated other comprehensive income | ||
Amount Reclassified | $ 3,574 | $ 4,001 |
Available for Sale Securities | Amount Reclassified out of Accumulated Other Comprehensive Income | ||
Accumulated other comprehensive income | ||
Amount Reclassified | $ 0 | $ 0 |
Recent Accounting Pronounceme78
Recent Accounting Pronouncements - (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Accumulated other comprehensive loss | $ 355 | $ 193 |
Reclassification related to adoption of ASU 2018-02 | 58 | |
Retained earnings | 13,482 | $ 15,813 |
Accounting Standards Update 2018-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Accumulated other comprehensive loss | 58 | |
Retained earnings | $ 58 |