Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 15, 2018 | Jun. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | ENB Financial Corp | ||
Entity Central Index Key | 1,437,479 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 60,076,731 | ||
Entity Common Stock, Shares Outstanding | 2,849,823 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash and due from banks | $ 21,867 | $ 19,852 |
Interest-bearing deposits in other banks | 31,206 | 25,780 |
Total cash and cash equivalents | 53,073 | 45,632 |
Securities available for sale (at fair value) | 319,661 | 308,111 |
Loans held for sale | 2,892 | 2,552 |
Loans (net of unearned income) | 597,553 | 571,567 |
Less: Allowance for loan losses | 8,240 | 7,562 |
Net loans | 589,313 | 564,005 |
Premises and equipment | 25,687 | 22,568 |
Regulatory stock | 5,794 | 5,372 |
Bank owned life insurance | 27,814 | 24,687 |
Other assets | 9,388 | 11,326 |
Total assets | 1,033,622 | 984,253 |
Deposits: | ||
Noninterest-bearing | 314,917 | 280,543 |
Interest-bearing | 551,560 | 536,948 |
Total deposits | 866,477 | 817,491 |
Short-term borrowings | 8,329 | |
Long-term debt | 65,850 | 61,257 |
Other liabilities | 1,536 | 2,237 |
Total liabilities | 933,863 | 889,314 |
Stockholders' equity: | ||
Common stock, par value $0.20; Shares: Authorized 12,000,000 Issued 2,869,557 and Outstanding 2,849,823 as of 12/31/17 Issued 2,869,557 and Outstanding 2,850,382 as of 12/31/16 | 574 | 574 |
Capital surplus | 4,415 | 4,403 |
Retained earnings | 98,629 | 95,475 |
Accumulated other comprehensive loss net of tax | (3,195) | (4,885) |
Less: Treasury stock cost on 19,734 shares as of 12/31/17 19,175 shares as of 12/31/16 | (664) | (628) |
Total stockholders' equity | 99,759 | 94,939 |
Total liabilities and stockholders' equity | $ 1,033,622 | $ 984,253 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.20 | $ 0.20 |
Common stock, authorized | 12,000,000 | 12,000,000 |
Common stock, issued | 2,869,557 | 2,869,557 |
Common stock, outstanding | 2,849,823 | 2,850,382 |
Treasury shares | 19,734 | 19,175 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Interest and dividend income: | |||
Interest and fees on loans | $ 24,253 | $ 22,525 | $ 20,205 |
Interest on securities available for sale | |||
Taxable | 3,841 | 1,480 | 2,969 |
Tax-exempt | 4,248 | 3,863 | 3,234 |
Interest on deposits at other banks | 388 | 138 | 75 |
Dividend income | 387 | 335 | 359 |
Total interest and dividend income | 33,117 | 28,341 | 26,842 |
Interest expense: | |||
Interest on deposits | 1,929 | 2,067 | 2,484 |
Interest on borrowings | 1,010 | 987 | 1,260 |
Total interest expense | 2,939 | 3,054 | 3,744 |
Net interest income | 30,178 | 25,287 | 23,098 |
Provision for loan losses | 940 | 325 | 150 |
Net interest income after provision for loan losses | 29,238 | 24,962 | 22,948 |
Other income: | |||
Trust and investment services income | 1,776 | 1,475 | 1,286 |
Service fees | 2,669 | 2,259 | 2,019 |
Commissions | 2,303 | 2,169 | 2,033 |
Gains on securities transactions, net | 675 | 2,370 | 2,840 |
Gains on sale of mortgages | 1,715 | 1,512 | 806 |
Earnings on bank-owned life insurance | 688 | 785 | 726 |
Other income | 495 | 574 | 345 |
Total other income | 10,321 | 11,144 | 10,055 |
Operating expenses: | |||
Salaries and employee benefits | 19,340 | 16,769 | 14,796 |
Occupancy | 2,413 | 2,183 | 2,092 |
Equipment | 1,166 | 1,091 | 1,126 |
Advertising & marketing | 698 | 614 | 552 |
Computer software & data processing | 2,210 | 1,831 | 1,594 |
Shares tax | 859 | 807 | 781 |
Professional services | 1,673 | 1,590 | 1,443 |
Other expense | 2,518 | 2,315 | 2,351 |
Total operating expenses | 30,877 | 27,200 | 24,735 |
Income before income taxes | 8,682 | 8,906 | 8,268 |
Provision for federal income taxes | 2,338 | 1,353 | 1,358 |
Net income | $ 6,344 | $ 7,553 | $ 6,910 |
Earnings per share of common stock | $ 2.23 | $ 2.65 | $ 2.42 |
Cash dividends paid per share | $ 1.12 | $ 1.09 | $ 1.08 |
Weighted average shares outstanding | 2,849,084 | 2,850,610 | 2,853,310 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 6,344 | $ 7,553 | $ 6,910 |
Securities available for sale not other-than-temporarily impaired: | |||
Unrealized gains (losses) arising during the period | 3,235 | (4,649) | 941 |
Income tax effect | (1,100) | 1,580 | (320) |
Total | 2,135 | (3,069) | 621 |
Gains recognized in earnings | (675) | (2,370) | (2,840) |
Income tax effect | 230 | 806 | 965 |
Total | (445) | (1,564) | (1,875) |
Other comprehensive income (loss), net of tax | 1,690 | (4,633) | (1,254) |
Comprehensive Income | $ 8,034 | $ 2,920 | $ 5,656 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Capital Surplus [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Treasury Stock [Member] | Total |
Balance, beginning at Dec. 31, 2014 | $ 574 | $ 4,375 | $ 87,200 | $ 1,002 | $ (384) | $ 92,767 |
Net income | 6,910 | 6,910 | ||||
Other comprehensive income net of tax | (1,254) | (1,254) | ||||
Treasury stock purchased | (752) | (752) | ||||
Treasury stock issued | 20 | 492 | 512 | |||
Cash dividends paid | (3,081) | (3,081) | ||||
Balance, ending at Dec. 31, 2015 | 574 | 4,395 | 91,029 | (252) | (644) | 95,102 |
Net income | 7,553 | 7,553 | ||||
Other comprehensive income net of tax | (4,633) | (4,633) | ||||
Treasury stock purchased | (465) | (465) | ||||
Treasury stock issued | 8 | 481 | 489 | |||
Cash dividends paid | (3,107) | (3,107) | ||||
Balance, ending at Dec. 31, 2016 | 574 | 4,403 | 95,475 | (4,885) | (628) | 94,939 |
Net income | 6,344 | 6,344 | ||||
Other comprehensive income net of tax | 1,690 | 1,690 | ||||
Treasury stock purchased | (568) | (568) | ||||
Treasury stock issued | 12 | 532 | 544 | |||
Cash dividends paid | (3,190) | (3,190) | ||||
Balance, ending at Dec. 31, 2017 | $ 574 | $ 4,415 | $ 98,629 | $ (3,195) | $ (664) | $ 99,759 |
CONSOLIDATED STATEMENTS OF CHA7
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended | 17 Months Ended | |||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | ||||||||||||||||
Treasury stock purchased, shares | 16,500 | 14,000 | 22,935 | 42,635 | ||||||||||||
Treasury stock issued, shares | 15,941 | 14,858 | 15,623 | |||||||||||||
Cash dividends paid, per share | $ 0.28 | $ 0.28 | $ 0.28 | $ 0.28 | $ 0.28 | $ 0.27 | $ 0.27 | $ 0.27 | $ 0.27 | $ 0.27 | $ 0.27 | $ 0.27 | $ 1.12 | $ 1.09 | $ 1.08 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 6,344 | $ 7,553 | $ 6,910 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Net amortization of securities premiums and discounts and loan fees | 3,892 | 6,481 | 6,268 |
Decrease (increase) in interest receivable | 66 | (150) | 106 |
Increase (decrease) in interest payable | 1 | (72) | (130) |
Provision for loan losses | 940 | 325 | 150 |
Gains on securities transactions, net | (675) | (2,370) | (2,840) |
Gains on sale of mortgages | (1,715) | (1,512) | (806) |
Loans originated for sale | (42,847) | (46,556) | (25,863) |
Proceeds from sales of loans | 44,222 | 46,642 | 26,049 |
Earnings on bank-owned life insurance | (688) | (785) | (726) |
Loss on sale of other real estate owned | 30 | ||
Depreciation of premises and equipment and amortization of software | 1,624 | 1,623 | 1,548 |
Net decrease (increase) in deferred income tax | 1,496 | (381) | 275 |
Other assets and other liabilities, net | (1,310) | (354) | (563) |
Net cash provided by operating activities | 11,350 | 10,444 | 10,408 |
Securities available for sale: | |||
Proceeds from maturities, calls, and repayments | 21,864 | 59,094 | 45,941 |
Proceeds from sales | 80,642 | 163,085 | 154,384 |
Purchases | (114,269) | (251,616) | (199,023) |
Proceeds from sale of other real estate owned | 176 | ||
Purchase of regulatory bank stock | (2,920) | (2,267) | (1,511) |
Redemptions of regulatory bank stock | 2,498 | 1,209 | 424 |
Purchase of bank-owned life insurance | (2,439) | (33) | (2,540) |
Net increase in loans | (26,693) | (51,507) | (49,695) |
Purchases of premises and equipment, net | (4,510) | (2,280) | (689) |
Purchase of computer software | (118) | (326) | (180) |
Net cash used for investing activities | (45,945) | (84,641) | (52,713) |
Cash flows from financing activities: | |||
Net increase in demand, NOW, and savings accounts | 61,181 | 96,929 | 60,876 |
Net decrease in time deposits | (12,195) | (19,500) | (20,465) |
Net increase (decrease) in short-term borrowings | (8,329) | (407) | 8,736 |
Proceeds from long-term debt | 19,593 | 17,163 | 12,794 |
Repayments of long-term debt | (15,000) | (15,500) | (15,500) |
Dividends paid | (3,190) | (3,107) | (3,081) |
Proceeds from sale of treasury stock | 544 | 489 | 512 |
Treasury stock purchased | (568) | (465) | (752) |
Net cash provided by financing activities | 42,036 | 75,602 | 43,120 |
Increase in cash and cash equivalents | 7,441 | 1,405 | 815 |
Cash and cash equivalents at beginning of period | 45,632 | 44,227 | 43,412 |
Cash and cash equivalents at end of period | 53,073 | 45,632 | 44,227 |
Supplemental disclosures of cash flow information: | |||
Interest paid | 2,938 | 3,126 | 3,874 |
Income taxes paid | 1,725 | 1,840 | 1,067 |
Supplemental disclosure of non-cash investing and financing activities: | |||
Net transfer of other real estate owned from loans | 137 | ||
Fair value adjustments for securities available for sale | $ (2,560) | $ 7,019 | $ (1,899) |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations ENB Financial Corp, through its wholly owned subsidiary, Ephrata National Bank, provides financial services to Northern Lancaster County and surrounding communities. ENB Financial Corp, a bank holding company, was formed on July 1, 2008, to become the parent company of Ephrata National Bank, which existed as a stand-alone national bank since its formation on April 11, 1881. The Corporation’s wholly owned subsidiary, Ephrata National Bank, offers a full array of banking services including loan and deposit products for both personal and commercial customers, as well as trust and investment services, through twelve full-service office locations. Basis of Presentation The consolidated financial statements of ENB Financial Corp and its subsidiary, Ephrata National Bank, (collectively “the Corporation”) conform to U.S. generally accepted accounting principles (GAAP). The preparation of these statements requires that management make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Material estimates of the Corporation, including the allowance for loan losses, the fair market value of financial instruments, and deferred tax assets or liabilities, are evaluated regularly by management. Actual results could differ from the reported estimates given different conditions or assumptions. The accounting and reporting policies followed by the Corporation conform with U.S. GAAP and to general practices within the banking industry. All significant intercompany transactions have been eliminated in consolidation. The following is a summary of the more significant policies. Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents are identified as cash and due from banks and include cash on hand, collection items, amounts due from banks, and interest bearing deposits in other banks with maturities of less than 90 days. Securities Available for Sale The Corporation classifies its entire portfolio of debt and equity securities as available for sale securities, which the Corporation reports at fair value. Any unrealized valuation gains or losses in the portfolio are reported as a separate component of stockholders' equity, net of deferred income taxes. The constant yield method is used for the amortization of premiums and the accretion of discounts for all of the Corporation’s securities with the exception of collateralized mortgage obligations (CMOs) and mortgage backed securities (MBS). The constant yield method maintains a stable yield on the instrument through its maturity. For CMOs and MBS, a two-step/proration method is used for amortization and accretion. The first step is a proration based on the current pay down. This component ensures that the book price stays level with par. The second step amortizes or accretes the remaining premium or discount to the calculated final amortization or accretion date based on the current three-month constant prepayment rates. Net gains or losses realized on sales or calls of securities are reported as gains or losses on security transactions during the year of sale, using the specific identification method. Other Than Temporary Impairment (“OTTI”) Management monitors all of the Corporation’s securities for OTTI on a monthly basis and determines whether any impairment should be recorded. A number of factors are considered in determining whether a security is impaired, including, but not limited to, the following: · Percentage of unrealized losses, · Period of time the security has had unrealized losses, · Type of security, · Maturity date of the instrument if a debt instrument, · The intent to sell the security or whether it is more likely than not that the Corporation would be required to sell the security before its anticipated recovery in market value, · Amount of projected credit losses based on current cash flow analysis, default and severity rates, and · Market dynamics impacting the market for and liquidity of the security. Management will more closely evaluate those securities that have unrealized losses of 10% or more and have had unrealized losses for more than twelve months. If management determines that the declines in value of the security are not temporary, or if management does not have the ability to hold the security until maturity, which is the case with equity securities, then management will record impairment on the security. For equity securities, typically the amount of impairment is the difference between the security’s book value and current fair market value determined by obtaining independent market pricing. For debt securities evaluated for impairment, management will determine what portion of the unrealized valuation loss is attributed to projected or known loss of principal, and what portion is attributed to market pricing not reflective of the true value of the security, based on current cash flow analysis. Management will generally record impairment equivalent to the projected or known loss of principal, known as the credit loss. The other portion of the fair market value loss is attributed to market factors and it is management’s opinion that these fair value losses are temporary and not permanent. All impairment is recorded as a loss on securities and is included in the Corporation’s Consolidated Statements of Income. Loans Held for Investment Loans receivable, that management has the intent and ability to hold for the foreseeable future, or until maturity or payoff, generally are reported at the outstanding principal balances, reduced by any charge-offs and net of any deferred loan origination fees or costs. Net loan origination fees and costs are deferred and recognized as an adjustment of yield over the contractual life of the loan. Interest accrues daily on outstanding loan balances. Generally, the accrual of interest discontinues when the ability to collect the loan becomes doubtful or when a loan becomes more than 90 days past due as to principal and interest. These loans are referred to as non-accrual loans. Management may elect to continue the accrual of interest based on the expectation of future payments and/or the sufficiency of the underlying collateral. Loans Held for Sale Loans originated and intended for sale on the secondary market are carried at the lower of cost or fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance by charges to income. In general, fixed-rate residential mortgage loans originated by the Corporation and held for sale are carried in the aggregate at the lower of cost or market. The Corporation originates loans for immediate sale with servicing retained and servicing released to several investors. However, the vast majority of the sold mortgages are sold to the Federal Home Loan Bank of Pittsburgh (FHLB) and Fannie Mae, with servicing retained. As a result, the Corporation has a growing portfolio of mortgages that are serviced on behalf of FHLB and Fannie Mae. In addition, the Corporation originates FHA, VA, and USDA mortgages which are originated for immediate sale to various investors on a service-released basis. Allowance for Loan Losses The allowance for loan losses is maintained at a level considered by management to be adequate to provide for known and inherent risks in the loan portfolio at the Consolidated Balance Sheets dates. The monthly provision or credit for loan losses is an expense or a reduction of expense which increases or decreases the allowance, and charge-offs, net of recoveries, decrease the allowance. The Corporation performs ongoing credit reviews of the loan portfolio and considers current economic conditions, historical loan loss experience, and other factors in determining the adequacy of the reserve balance. Loans determined to be uncollectible are charged to the allowance during the period in which such determination is made. In calculating the allowance, management will begin by compiling the balance of loans by credit quality for each loan segment in order that allocations can be made in aggregate based on historic losses and qualitative factors. Prior to calculating these aggregate allocations, management will individually evaluate commercial and commercial real estate loans for impairment. A loan is impaired when it is probable that a creditor will be unable to collect all principal and interest due according to the contractual terms of the loan agreement. All other loan types such as residential mortgages, home equity loans and lines of credit, and all other consumer loans, are not individually evaluated for impairment and are therefore allocated for in aggregate. These loans are considered to be large groups of smaller-balance homogenous loans and are measured for impairment collectively. Loans that experience insignificant payment delays, which are defined as 90 days or less, generally are not classified as impaired. Management determines the significance of payment delays on a case-by-case basis, taking into consideration all circumstances concerning the loan, the creditworthiness and payment history of the borrower, the length of the payment delay, and the amount of shortfall in relation to the principal and interest owed. For loans deemed to be impaired, management will provide a specific allocation. This loan balance is then subtracted from the total loan balances being allocated for in the aggregate. The remaining balances, along with the full loan balances for the other loan types are then multiplied by an adjusted loss ratio, which is the sum of both the historical loss ratio and a qualitative factor adjustment. Generally both the historical loss ratio and the qualitative factor adjustment will increase as the credit rating of the loan deteriorates. The credit ratings begin with unclassified loans, which represent the best internal credit rating, also referred to as a “pass” credit and then continue with declining grades of special mention, substandard, doubtful, and loss. Special mention loans are no longer deemed to be a “pass” credit and require additional management attention. They are essentially placed on “watched” status and attempts are made to improve the credit to an unclassified status. If the credit would deteriorate further it would then be a substandard credit, which for regulatory purposes, is deemed to be a classified loan. Doubtful and loss credit grades represent further credit deterioration and are also considered classified loans. For each loan type, all of these credit rating categories are broken out with adjusted loss ratios. The loan balance is then multiplied by the adjusted loss ratio to produce the required allowance. The allowances are totaled and added to any specific allocations on impaired loans to arrive at the total allowance for loan losses for the Corporation. Management tracks and assigns a historical loss percentage for each loan rating category within each loan type. A rolling three-year historical loss ratio, calculated on a quarterly basis, with a 60%, 30%, and 10% weighting for the past three years is used. In this manner the historical loss percentage is heavily weighted to the current loss environment, but has sufficient weighting assigned to prior periods to avoid unnecessary volatile fluctuations based on just one period’s data. Management currently utilizes nine qualitative factors that are adjusted based on changes in the lending environment and economic conditions. The qualitative factors include the following: · levels of and trends in delinquencies, non-accruals, and charge-offs, · trends in the nature and volume of the loan portfolio, · changes in lending policies and procedures, · experience, ability, and depth of lending personnel and management oversight, · national and local economic trends, · concentrations of credit, · external factors such as competition, legal, and regulatory requirements, · changes in the quality of loan review and Board oversight, · changes in the value of underlying collateral. The number of qualitative factors can change. Factors can be added for new risks or taken away if the risk no longer applies. Each loan type will have its own risk profile and management will evaluate and adjust each qualitative factor for each loan type quarterly, if necessary. For example, if one area of the loan portfolio is experiencing sharp increases in growth, it is likely the qualitative factor for trends in the loan portfolio would be increased for that loan type. As levels of delinquencies and non-accrual loans decline for any segment of the loan portfolio it is likely that factor would be reduced. In terms of the Corporation’s loan portfolio, the commercial and industrial loans and commercial real estate loans are deemed to have more risk than the consumer real estate loans and other consumer loans in the portfolio. The commercial loans not secured by real estate are highly dependent on their financial condition and therefore are more dependent on economic conditions. The commercial loans secured by real estate are also dependent on economic conditions but generally have stronger forms of collateral. More recently, commercial real estate has been negatively impacted by devaluation so these commercial loans carry a higher qualitative factor for changes in the value of collateral. The commercial loans and commercial real estate loans have historically been responsible for the majority of the Corporation’s delinquencies, non-accrual loans, and charge-offs, so both of these categories carry higher qualitative factors than consumer real estate loans and other consumer loans. Of particular focus currently is the dairy component of the Corporation’s agricultural loans. The decline in milk prices continues to put financial pressure on these operations and management has increased qualitative factors over the year to reflect this. The Corporation has historically experienced very low levels of consumer real estate and consumer loan charge-offs so these qualitative factors are set lower than the commercial real estate and commercial and industrial loans. Impaired and Non-Accrual Loans The definition of “impaired loans” is not the same as the definition of “non-accrual loans,” although the two categories overlap. Generally, a non-accrual loan will always be considered impaired due to payment delinquency or uncertain collection, but there are cases where an impaired loan is not considered non-accrual. The primary factors considered by management in determining impairment include payment status and collateral value, but could also include debt service coverage, financial health of the business, and other external factors that could impact the ability of the borrower to fully repay the loan. The amount of impairment for these types of loans is determined by the difference between the present value of the expected cash flows related to the loan using the original interest rate and its recorded value or, as a practical expedient in the case of collateral-dependent loans, the difference between the fair value of the collateral and the recorded amount of the loan. When foreclosure is probable, impairment is measured based on the fair value of the collateral on a discounted basis, relative to the loan amount. Management will place a business or commercial loan on non-accrual status when it is determined that the loan is impaired, or when the loan is 90 days past due with a history of prolonged periods of delinquency. These customers will generally be placed on non-accrual status at the end of each quarter. Consumer loans over 90 days delinquent are generally charged off or, in the case of larger residential real estate loans, they would be placed on non-accrual status as the Corporation seeks to bring the customer current or pursue foreclosure options. When the borrower is on non-accrual, the Corporation will reverse any accrued interest on the books and will discontinue recognizing any interest income until the borrower is placed back on accrual status or fully pays off the loan balance plus any accrued interest. Payments received by the customer while the loan is on non-accrual are fully applied against principal. The Corporation maintains records of the full amount of interest that is owed by the borrower. A non-accrual loan will generally only be placed back on accrual status after the borrower has become current and has demonstrated six consecutive months of non-delinquency. Allowance for Off-Balance Sheet Extensions of Credit The Corporation maintains an allowance for off-balance sheet extensions of credit, which would include any unadvanced amount on lines of credit and any letters of credit provided to borrowers. The allowance is carried as a liability and is included in other liabilities on the Corporation’s Consolidated Balance Sheets. The liability was $317,000 as of December 31, 2017, and $345,000 as of December 31, 2016. As the unadvanced portion of lines of credit increases, this provision will increase. Management follows the same methodology as the allowance for loan losses when calculating the allowance for off-balance sheet extensions of credit, with the exception of multiplying the unadvanced total by a high/low balance variance to arrive at the expected unadvanced portion that could be drawn upon at any time, or the amount at risk. The unadvanced amounts for each loan segment are broken down by credit classification. A historical loss ratio and qualitative factor are calculated for each credit classification by loan type. The historical loss ratio and qualitative factor are combined to produce an adjusted loss ratio, which is multiplied by the amount at risk for each credit classification within each loan segment to arrive at an allocation. The allocations are summed to arrive at the total allowance for off-balance sheet extensions of credit. Other Real Estate Owned (OREO) OREO represents properties acquired through customer loan defaults. These properties are recorded at the lower of cost or fair value less projected disposal costs at acquisition date. Fair value is determined by current appraisals. Costs associated with holding OREO are charged to operational expense. OREO is a component of other assets on the Corporation’s Consolidated Balance Sheets. The Corporation had no OREO as of December 31, 2017, or December 31, 2016. Mortgage Servicing Rights (MSRs) The Corporation has agreements for the express purpose of selling residential mortgage loans on the secondary market, referred to as mortgage servicing rights. The Corporation maintains all servicing rights for loans currently sold through FHLB and Fannie Mae. The Corporation had $661,000 of MSRs as of December 31, 2017, compared to $410,000 as of December 31, 2016. Management expects MSRs to continue to grow as a result of the expanded mortgage program. The value of newly originated MSRs is determined by estimating the life of the mortgage and how long the Corporation will have access to the servicing income stream to determine the relative fair value. The Corporation utilizes a third party that calculates the MSR valuation on a quarterly basis. A longer estimated life would increase the MSR while a shorter estimated life would decrease the value of the asset. Management records the MSR value based on this reporting. Ultimately the value of the MSRs would be at what level a willing buyer and seller would exchange the MSRs. MSRs are amortized in proportion to the estimated servicing income over the estimated life of the servicing portfolio. Impairment is evaluated based on the fair value of the rights, portfolio interest rates, and prepayment characteristics. MSRs are a component of other assets on the Consolidated Balance Sheets. Premises and Equipment Land is carried at cost. Premises and equipment are carried at cost, less accumulated depreciation. Book depreciation is computed using straight-line methods over the estimated useful lives of generally fifteen to thirty-nine years for buildings and improvements and four to ten years for furniture and equipment. Maintenance and repairs of property and equipment are charged to operational expense as incurred, while major improvements are capitalized. Net gains or losses upon disposition are included in other income or operational expense, as applicable. Transfer of Assets Transfers of financial assets 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. Bank-Owned Life Insurance (BOLI) BOLI is carried by the Corporation at the cash surrender value of the underlying policies. Income earned on the policies is based on any increase in cash surrender value less the cost of the insurance, which varies according to age and health of the insured. The life insurance policies owned by the Corporation had a cash surrender value of $27,814,000 and $24,687,000 as of December 31, 2017, and 2016, respectively. The increase in BOLI cash surrender value was primarily due to $2.5 million of additional policies being purchased in December of 2017, with the remainder of the increase attributable to normal appreciation of existing policies as a result of returns exceeding expenses. Advertising Costs The Corporation expenses advertising costs as incurred. Advertising costs for the years ended December 31, 2017, 2016, and 2015, were $698,000, $614,000, and $552,000, respectively. Income Taxes An asset and liability approach is followed for financial accounting and reporting for income taxes. Accordingly, a net deferred tax asset or liability is recorded in the consolidated financial statements for the tax effects of temporary differences, which are items of income and expense reported in different periods for income tax and financial reporting purposes. Deferred tax expense is determined by the change in the assets or liabilities related to deferred income taxes. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Earnings per Share The Corporation currently maintains a simple capital structure with no stock option plans that would have a dilutive effect on earnings per share. Earnings per share are calculated by dividing net income by the weighted-average number of shares outstanding for the periods. Comprehensive Income The Corporation is required to present comprehensive income in a full set of general-purpose consolidated financial statements for all periods presented. Other comprehensive income (loss) consists of unrealized holding gains and losses on the available for sale securities portfolio. Segment Disclosure U.S. generally accepted accounting principles establish standards for the manner in which public business enterprises report information about segments in the annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports issued to shareholders. It also establishes standards for related disclosures regarding financial products and services, geographic areas, and major customers. The Corporation has only one operating segment consisting of its banking and fiduciary operations. Pension Plans The Corporation provides an optional 401(k) plan, in which employees may elect to defer pre-tax salary dollars, subject to the maximum annual Internal Revenue Service contribution amounts. The Corporation will match 50% of employee contributions up to 5%, limiting the match to 2.5%. As part of the 401(k) Plan, the Corporation also has a noncontributory Profit Sharing Plan which covers substantially all employees. The Corporation provides a 3% Non-Elective contribution to all employees and contributes a 2% Elective Contribution to all employees aged 21 or older who work 1,000 or greater hours in a calendar year and have completed at least one full year of employment. Trust Assets and Income Assets held by ENB’s Money Management Group in a fiduciary or agency capacity for customers are not included in the Corporation’s Consolidated Balance Sheets since these items are not assets of the Corporation. In accordance with banking industry practice, trust income is recognized on a cash basis; as such income does not differ significantly from amounts that would be recognized on an accrual basis. Trust income is reported in the Corporation’s Consolidated Statements of Income under other income. Reclassification of Comparative Amounts Certain comparative amounts for the prior year have been reclassified to conform to current-year classifications. Such reclassifications had no material effect on net income or stockholders’ equity. Recently Issued Accounting Standards In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In March 2016, the FASB issued ASU 2016-04, Liabilities – In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606). Revenue from Contracts with Customers (Topic 606), Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606). Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) In October 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) In December 2016, the FASB issued ASU 2016-20 , Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers Guarantees In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment after December 15, 2021. This Update is not expected to have a significant impact on the Corporation’s financial statements. In February 2017, the FASB issued ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20). beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. This Update is not expected to have a significant impact on the Corporation’s financial statements. In February 2017, the FASB issued ASU 2017-06 , Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), and Health and Welfare Benefit Plans (Topic 965) This Update relates primarily to the reporting by an employee benefit plan for its interest in a master trust, which is a trust for which a regulated financial institution serves as a trustee or custodian and in which assets of more than one plan sponsored by a single employer or by a group of employers under common control are held. For each master trust in which a plan holds an interest, the amendments in this Update require a plan's interest in that master trust and any change in that interest to be presented in separate line items in the statement of net assets available for benefits and in the statement of changes in net assets available for benefits, respectively. The amendments in this Update remove the requirement to disclose the percentage interest in the master trust for plans with divided interests and require that all plans disclose the dollar amount of their interest in each of those general types of investments, which supplements the existing requirement to disclose the master trusts balances in each general type of investments. There are also increased disclosure requirements for investments in master In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715) In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20). In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718) available for issuance. The amendments in this Update should be applied prospectively to an award modified on or after the adoption date. This Update is not expected to have a significant impact on the Corporation’s financial statements. In May 2017, the FASB issued ASU 2017-10, Service Concession Arrangements (Topic 853) Revenue from Contracts with Customers (Topic 606)) Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , deferred the effective date of Update 2014-09 by one year. This Update is not expected to have a significant impact on the Corporation’s financial statements. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), and Derivative and Hedging (Topic 815) Debt—Debt with Conversion and Other Options amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. This Update is not expected to have a significant impact on the Corporation’s financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 850) an entity adopts the amendments in this Update. The amended presentation and disclosure guidance is required only prospectively. This Update is not expected to have a significant impact on the Corporation’s financial statements. In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842) date and transition requirements for the amendments are the same as the effective date and transition requirements in ASU 2016-02. This Update is not expected to have a significant impact on the Corporation’s financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) |
SECURITIES AVAILABLE FOR SALE
SECURITIES AVAILABLE FOR SALE | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
SECURITIES AVAILABLE FOR SALE | NOTE B - SECURITIES AVAILABLE FOR SALE (DOLLARS IN THOUSANDS) The amortized cost and fair value of securities held at December 31, 2017, and 2016, are as follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value $ $ $ $ December 31, 2017 U.S. government agencies 35,101 — (749 ) 34,352 U.S. agency mortgage-backed securities 52,981 8 (916 ) 52,073 U.S. agency collateralized mortgage obligations 55,493 46 (898 ) 54,641 Corporate bonds 61,334 24 (589 ) 60,769 Obligations of states and political subdivisions 114,047 243 (2,047 ) 112,243 Total debt securities 318,956 321 (5,199 ) 314,078 Marketable equity securities 5,547 36 — 5,583 Total securities available for sale 324,503 357 (5,199 ) 319,661 December 31, 2016 U.S. government agencies 33,124 — (863 ) 32,261 U.S. agency mortgage-backed securities 56,826 22 (979 ) 55,869 U.S. agency collateralized mortgage obligations 38,737 41 (842 ) 37,936 Corporate bonds 52,928 8 (845 ) 52,091 Obligations of states and political subdivisions 128,428 346 (4,344 ) 124,430 Total debt securities 310,043 417 (7,873 ) 302,587 Marketable equity securities 5,469 55 — 5,524 Total securities available for sale 315,512 472 (7,873 ) 308,111 The amortized cost and fair value of debt securities available for sale at December 31, 2017, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities due to certain call or prepayment provisions. CONTRACTUAL MATURITY OF DEBT SECURITIES (DOLLARS IN THOUSANDS) Amortized Cost Fair Value $ $ Due in one year or less 18,451 18,223 Due after one year through five years 122,859 121,231 Due after five years through ten years 68,321 67,020 Due after ten years 109,325 107,604 Total debt securities 318,956 314,078 Securities available for sale with a par value of $64,580,000 and $63,726,000 at December 31, 2017 and 2016, respectively, were pledged or restricted for public funds, borrowings, or other purposes as required by law. The fair market value of these pledged securities was $66,157,000 at December 31, 2017, and $65,770,000 at December 31, 2016. Proceeds from active sales of debt securities available for sale, along with the associated gross realized gains and gross realized losses, are shown below. Realized gains and losses are computed on the basis of specific identification. PROCEEDS FROM SALES OF SECURITIES AVAILABLE FOR SALE (DOLLARS IN THOUSANDS) Securities Available for Sale 2017 2016 2015 $ $ $ Proceeds from sales 80,642 163,085 154,384 Gross realized gains 946 2,457 2,934 Gross realized losses 271 87 94 The bottom portion of the above table shows the net gains on security transactions, including any impairment taken on securities held by the Corporation. The net gain or loss from security transactions is also reflected on the Corporation’s Consolidated Statements of Income and Consolidated Statements of Cash Flows. Information pertaining to securities with gross unrealized losses at December 31, 2017, and December 31, 2016, aggregated by investment category and length of time that individual securities have been in a continuous loss position follows: TEMPORARY IMPAIRMENTS OF SECURITIES (DOLLARS IN THOUSANDS) Less than 12 months More than 12 months Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses $ $ $ $ $ $ As of December 31, 2017 U.S. government agencies 9,941 (59 ) 24,411 (690 ) 34,352 (749 ) U.S. agency mortgage-backed securities 10,326 (78 ) 37,123 (838 ) 47,449 (916 ) U.S. agency collateralized mortgage obligations 29,551 (280 ) 20,980 (618 ) 50,531 (898 ) Corporate bonds 38,543 (282 ) 15,019 (307 ) 53,562 (589 ) Obligations of states & political subdivisions 15,188 (142 ) 68,278 (1,905 ) 83,466 (2,047 ) Total temporarily impaired securities 103,549 (841 ) 165,811 (4,358 ) 269,360 (5,199 ) As of December 31, 2016 U.S. government agencies 32,261 (863 ) — — 32,261 (863 ) U.S. agency mortgage-backed securities 47,418 (856 ) 3,989 (123 ) 51,407 (979 ) U.S. agency collateralized mortgage obligations 33,206 (842 ) — — 33,206 (842 ) Corporate bonds 45,335 (830 ) 2,002 (15 ) 47,337 (845 ) Obligations of states & political subdivisions 101,229 (4,063 ) 8,041 (281 ) 109,270 (4,344 ) Total temporarily impaired securities 259,449 (7,454 ) 14,032 (419 ) 273,481 (7,873 ) In the debt security portfolio, there are 187 positions carrying unrealized losses as of December 31, 2017. There were no instruments considered to be other-than-temporarily impaired at December 31, 2017. The Corporation evaluates both equity and fixed income positions for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic and market concerns warrant such evaluation. Equity investments are bank stocks held by the Corporation with no maturity date, whereas the fixed income positions are bonds held by the Corporation with fixed maturity dates. U.S. generally accepted accounting principles provide for the bifurcation of OTTI into two categories: (a) the amount of the total OTTI related to a decrease in cash flows expected to be collected from the debt security (the credit loss), which is recognized in earnings, and (b) the amount of total OTTI related to all other factors, which is recognized, net of taxes, as a component of accumulated other comprehensive income (loss). |
LOANS AND ALLOWANCE FOR LOAN LO
LOANS AND ALLOWANCE FOR LOAN LOSSES | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
LOANS AND ALLOWANCE FOR LOAN LOSSES | NOTE C - LOANS AND ALLOWANCE FOR LOAN LOSSES The following table presents the Corporation’s loan portfolio by category of loans for 2017 and 2016. LOAN PORTFOLIO (DOLLARS IN THOUSANDS) December 31, 2017 2016 $ $ Commercial real estate Commercial mortgages 90,072 86,434 Agriculture mortgages 152,050 163,753 Construction 18,670 24,880 Total commercial real estate 260,792 275,067 Consumer real estate (a) 1-4 family residential mortgages 176,971 150,253 Home equity loans 11,181 10,391 Home equity lines of credit 61,104 53,127 Total consumer real estate 249,256 213,771 Commercial and industrial Commercial and industrial 41,426 42,471 Tax-free loans 20,722 13,091 Agriculture loans 18,794 21,630 Total commercial and industrial 80,942 77,192 Consumer 5,320 4,537 Gross loans prior to deferred costs and allowance for loan losses 596,310 570,567 Deferred loan costs, net 1,243 1,000 Allowance for loan losses (8,240 ) (7,562 ) Total net loans 589,313 564,005 (a) Real estate loans serviced for others, which are not included in the Consolidated Balance Sheets, totaled $98,262,000 and $66,767,000 as of December 31, 2017, and 2016, respectively. The Corporation grades commercial credits differently than consumer credits. The following tables represent all of the Corporation’s commercial credit exposures by internally assigned grades as of December 31, 2017 and 2016. The grading analysis estimates the capability of the borrower to repay the contractual obligations under the loan agreements as scheduled or at all. The Corporation's internal commercial credit risk grading system is based on experiences with similarly graded loans. The Corporation's internally assigned grades for commercial credits are as follows: · Pass – loans which are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral. · Special Mention – loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected. · Substandard – loans that have a well-defined weakness based on objective evidence and characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected. · Doubtful – loans classified as doubtful have all the weaknesses inherent in a substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances. · Loss – loans classified as a loss are considered uncollectible, or of such value that continuance as an asset is not warranted. COMMERCIAL CREDIT EXPOSURE CREDIT RISK PROFILE BY INTERNALLY ASSIGNED GRADE (DOLLARS IN THOUSANDS) Commercial Commercial Agriculture and Tax-free Agriculture December 31, 2017 Mortgages Mortgages Construction Industrial Loans Loans Total $ $ $ $ $ $ $ Grade: Pass 86,259 143,037 17,670 37,947 20,514 17,798 323,225 Special Mention 160 3,873 — 1,015 208 270 5,526 Substandard 3,653 5,140 1,000 2,464 — 726 12,983 Doubtful — — — — — — — Loss — — — — — — — Total 90,072 152,050 18,670 41,426 20,722 18,794 341,734 COMMERCIAL CREDIT EXPOSURE CREDIT RISK PROFILE BY INTERNALLY ASSIGNED GRADE (DOLLARS IN THOUSANDS) Commercial Commercial Agriculture and Tax-free Agriculture December 31, 2016 Mortgages Mortgages Construction Industrial Loans Loans Total $ $ $ $ $ $ $ Grade: Pass 78,367 155,820 23,880 36,887 13,091 20,245 328,290 Special Mention 4,860 5,360 — 1,955 — 653 12,828 Substandard 3,207 2,573 1,000 3,629 — 732 11,141 Doubtful — — — — — — — Loss — — — — — — — Total 86,434 163,753 24,880 42,471 13,091 21,630 352,259 For consumer loans, the Corporation evaluates credit quality based on whether the loan is considered performing or non-performing. A consumer loan is considered non-performing when it is over 90 days past due. Management will generally charge off consumer loans more than 120 days past due for closed end loans and over 180 days for open-end consumer loans. The following table presents the balances of consumer loans by classes of the loan portfolio based on payment performance as of December 31, 2017 and 2016: CONSUMER CREDIT EXPOSURE CREDIT RISK PROFILE BY PAYMENT PERFORMANCE (DOLLARS IN THOUSANDS) 1-4 Family Home Equity December 31, 2017 Residential Home Equity Lines of Mortgages Loans Credit Consumer Total Payment performance: $ $ $ $ $ Performing 176,576 11,181 61,074 5,305 254,136 Non-performing 395 — 30 15 440 Total 176,971 11,181 61,104 5,320 254,576 CONSUMER CREDIT EXPOSURE CREDIT RISK PROFILE BY PAYMENT PERFORMANCE (DOLLARS IN THOUSANDS) 1-4 Family Home Equity December 31, 2016 Residential Home Equity Lines of Mortgages Loans Credit Consumer Total Payment performance: $ $ $ $ $ Performing 149,873 10,388 53,127 4,536 217,924 Non-performing 380 3 — 1 384 Total 150,253 10,391 53,127 4,537 218,308 The following tables present an age analysis of the Corporation’s past due loans, segregated by loan portfolio class, as of December 31, 2017 and 2016: AGING OF LOANS RECEIVABLE (DOLLARS IN THOUSANDS) Loans December 31, 2017 Greater Receivable > 30-59 Days 60-89 Days than 90 Total Past Total Loans 90 Days and Past Due Past Due Days Due Current Receivable Accruing $ $ $ $ $ $ $ Commercial real estate Commercial mortgages — — 372 372 89,700 90,072 — Agriculture mortgages — — — — 152,050 152,050 — Construction — — — — 18,670 18,670 — Consumer real estate 1-4 family residential mortgages 533 248 395 1,176 175,795 176,971 395 Home equity loans 40 — — 40 11,141 11,181 — Home equity lines of credit — — 30 30 61,074 61,104 30 Commercial and industrial Commercial and industrial 65 109 — 174 41,252 41,426 — Tax-free loans — — — — 20,722 20,722 — Agriculture loans — — — — 18,794 18,794 — Consumer 8 3 15 26 5,294 5,320 15 Total 646 360 812 1,818 594,492 596,310 440 AGING OF LOANS RECEIVABLE (DOLLARS IN THOUSANDS) Loans December 31, 2016 Greater Receivable > 30-59 Days 60-89 Days than 90 Total Past Total Loans 90 Days and Past Due Past Due Days Due Current Receivable Accruing $ $ $ $ $ $ $ Commercial real estate Commercial mortgages — 419 417 836 85,598 86,434 — Agriculture mortgages 165 — — 165 163,588 163,753 — Construction — — — — 24,880 24,880 — Consumer real estate 1-4 family residential mortgages 565 662 380 1,607 148,639 150,253 380 Home equity loans 178 — 3 181 10,307 10,391 3 Home equity lines of credit — — — — 53,037 53,127 — Commercial and industrial Commercial and industrial 266 — 75 341 42,130 42,471 — Tax-free loans — — — — 13,091 13,091 — Agriculture loans — — — — 21,630 21,630 — Consumer 16 4 1 21 4,516 4,537 1 Total 1,190 1,085 876 3,151 567,416 570,567 384 As of December 31, 2017, 2016, and 2015, all of the Corporation’s loans on non-accrual status were also considered impaired. Interest income on loans would have increased by approximately $24,000, ,000 The following table presents non-accrual loans by classes of the loan portfolio as of December 31: NON-ACCRUAL LOANS BY LOAN CLASS (DOLLARS IN THOUSANDS) 2017 2016 $ $ Commercial real estate Commercial mortgages 393 646 Agriculture mortgages — — Construction — — Consumer real estate 1-4 family residential mortgages — — Home equity loans — — Home equity lines of credit — — Commercial and industrial Commercial and industrial — 75 Tax-free loans — — Agriculture loans — — Consumer — — Total 393 721 During 2017 there was one loan modification made causing a loan to be considered a troubled debt restructuring (TDR). A TDR is a loan where management has granted a concession to a borrower that is experiencing financial difficulty. A concession is generally defined as more favorable payment or credit terms granted to a borrower in an effort to improve the likelihood of the lender collecting principal in its entirety. Concessions usually are in the form of interest only for a period of time, or a lower interest rate offered in an effort to enable the borrower to continue to make normally scheduled payments. The loan classified as a TDR during 2017 was an agricultural loan with a principal balance at December 31, 2017, of $245,000. The concession granted to the borrower was an interest-only period initially running for three months to March 31, 2017. However, in April 2017, that deferral period was extended for an additional three months, causing management to classify the loan as a TDR. The concession period ended June 30, 2017. Subsequent to June 30, 2017, the borrower resumed normal principal and interest payments as of July 2017. There were no loans classified as a TDR in 2016 or 2015. The following table summarizes information in regards to impaired loans by loan portfolio class as of December 31, 2017: IMPAIRED LOAN ANALYSIS (DOLLARS IN THOUSANDS) Recorded Unpaid Related Average Interest $ $ $ $ $ With no related allowance recorded: Commercial real estate Commercial mortgages 393 690 — 585 4 Agriculture mortgages 1,174 1,174 — 1,210 54 Construction — — — — — Total commercial real estate 1,567 1,864 — 1,795 58 Commercial and industrial Commercial and industrial — — — — — Tax-free loans — — — — — Agriculture loans 245 245 — 163 7 Total commercial and industrial 245 245 — 163 7 Total with no related allowance 1,812 2,109 — 1,958 65 With an allowance recorded: Commercial real estate Commercial mortgages — — — — — Agriculture mortgages — — — — — Construction — — — — — Total commercial real estate — — — — — Commercial and industrial Commercial and industrial — — — — — Tax-free loans — — — — — Agriculture loans — — — — — Total commercial and industrial — — — — — Total with a related allowance — — — — — Total by loan class: Commercial real estate Commercial mortgages 393 690 — 585 4 Agriculture mortgages 1,174 1,174 — 1,210 54 Construction — — — — — Total commercial real estate 1,567 1,864 — 1,795 58 Commercial and industrial Commercial and industrial — — — — — Tax-free loans — — — — — Agriculture loans 245 245 — 163 7 Total commercial and industrial 245 245 — 163 7 Total 1,812 2,109 — 1,958 65 The following table summarizes information in regards to impaired loans by loan portfolio class as of December 31, 2016: IMPAIRED LOAN ANALYSIS (DOLLARS IN THOUSANDS) Recorded Unpaid Related Average Interest $ $ $ $ $ With no related allowance recorded: Commercial real estate Commercial mortgages 646 743 — 768 2 Agriculture mortgages 1,248 1,248 — 1,285 55 Construction — — — — — Total commercial real estate 1,894 1,991 — 2,053 57 Commercial and industrial Commercial and industrial 75 75 — 76 — Tax-free loans — — — — — Agriculture loans — — — — — Total commercial and industrial 75 75 — 76 — Total with no related allowance 1,969 2,066 — 2,129 57 With an allowance recorded: Commercial real estate Commercial mortgages — — — — — Agriculture mortgages — — — — — Construction — — — — — Total commercial real estate — — — — — Commercial and industrial Commercial and industrial — — — — — Tax-free loans — — — — — Agriculture loans — — — — — Total commercial and industrial — — — — — Total with a related allowance — — — — — Total by loan class: Commercial real estate Commercial mortgages 646 743 — 768 2 Agriculture mortgages 1,248 1,248 — 1,285 55 Construction — — — — — Total commercial real estate 1,894 1,991 — 2,053 57 Commercial and industrial Commercial and industrial 75 75 — 76 — Tax-free loans — — — — — Agriculture loans — — — — — Total commercial and industrial 75 75 — 76 — Total 1,969 2,066 — 2,129 57 The following table summarizes information in regards to impaired loans by loan portfolio class as of December 31, 2015: IMPAIRED LOAN ANALYSIS (DOLLARS IN THOUSANDS) Recorded Unpaid Related Average Interest $ $ $ $ $ With no related allowance recorded: Commercial real estate Commercial mortgages 380 952 — 544 — Agriculture mortgages 1,325 1,325 — 1,359 83 Construction — — — — — Total commercial real estate 1,705 2,277 — 1,903 83 Commercial and industrial Commercial and industrial — 49 — 54 3 Tax-free loans — — — — — Agriculture loans — — — — — Total commercial and industrial — 49 — 54 3 Total with no related allowance 1,705 2,326 — 1,957 86 With an allowance recorded: Commercial real estate Commercial mortgages — — — — — Agriculture mortgages — — — — — Construction — — — — — Total commercial real estate — — — — — Commercial and industrial Commercial and industrial — — — — — Tax-free loans — — — — — Agriculture loans — — — — — Total commercial and industrial — — — — — Total with a related allowance — — — — — Total by loan class: Commercial real estate Commercial mortgages 380 952 — 544 — Agriculture mortgages 1,325 1,325 — 1,359 83 Construction — — — — — Total commercial real estate 1,705 2,277 — 1,903 83 Commercial and industrial Commercial and industrial — 49 — 54 3 Tax-free loans — — — — — Agriculture loans — — — — — Total commercial and industrial — 49 — 54 3 Total 1,705 2,326 — 1,957 86 The following table details activity in the allowance for loan losses by portfolio segment for the year ended December 31, 2017: ALLOWANCE FOR CREDIT LOSSES AND RECORDED INVESTMENT IN LOANS RECEIVABLE (DOLLARS IN THOUSANDS) Commercial Commercial Consumer and Real Estate Real Estate Industrial Consumer Unallocated Total $ $ $ $ $ $ Allowance for credit losses: Beginning balance 3,795 1,652 1,552 82 481 7,562 Charge-offs (200 ) — (89 ) (28 ) — (317 ) Recoveries — 20 24 11 — 55 Provision (credit) 268 380 342 33 (83 ) 940 Ending balance 3,863 2,052 1,829 98 398 8,240 Ending balance: individually evaluated for impairment — — — — — — Ending balance: collectively evaluated for impairment 3,863 2,052 1,829 98 398 8,240 Loans receivable: Ending balance 260,792 249,256 80,942 5,320 596,310 Ending balance: individually evaluated for impairment 1,567 — 245 — 1,812 Ending balance: collectively evaluated for impairment 259,225 249,256 80,697 5,320 594,498 The dollar amount of the allowance increased for all loan segments since December 31, 2016. Loan growth and higher charge-off amounts resulted in higher allowance balances but delinquencies, non-performing loans, and classified loans were all down from prior years’ levels. The higher charge-offs in 2017 increased the historical loss adjustments in the commercial real estate and commercial and industrial pools causing the associated allowance to increase in those areas. The primary reason for the increase in allowance in the consumer real estate segment was due to a significant 16.6% increase in loan balances as well as increases in some qualititative factors related to this segment. The December 31, 2017 ending balance of the allowance was up $678,000, or 9.0%, from December 31, 2016, and the allowance as a percentage of total loans was up from 1.32% as of December 31, 2016, to 1.38% as of December 31, 2017. The following table details activity in the allowance for loan losses by portfolio segment for the year ended December 31, 2016: ALLOWANCE FOR CREDIT LOSSES AND RECORDED INVESTMENT IN LOANS RECEIVABLE (DOLLARS IN THOUSANDS) Commercial Commercial Consumer and Real Estate Real Estate Industrial Consumer Unallocated Total $ $ $ $ $ $ Allowance for credit losses: Beginning balance 3,831 1,403 1,314 62 468 7,078 Charge-offs — — (23 ) (31 ) — (54 ) Recoveries — 10 193 10 — 213 Provision (credit) (36 ) 239 68 41 13 325 Ending balance 3,795 1,652 1,552 82 481 7,562 Ending balance: individually evaluated for impairment — — — — — — Ending balance: collectively evaluated for impairment 3,795 1,652 1,552 82 481 7,562 Loans receivable: Ending balance 275,067 213,771 77,192 4,537 570,567 Ending balance: individually evaluated for impairment 1,894 — 75 — 1,969 Ending balance: collectively evaluated for impairment 273,173 213,771 77,117 4,537 568,598 The dollar amount of the allowance increased for all loan segments with the exception of commercial real estate since December 31, 2015. Loan growth resulted in higher allowance balances but delinquencies, non-performing loans, and classified loans were all down from prior years’ levels so the Corporation was not carrying as large of an allowance as a percentage of total loans. The amount of allowance allocated to commercial real estate remained at nearly the same level as the prior year. While commercial real estate loans increased $14.2 million, or 5.4%, from December 31, 2015 to December 31, 2016, the allowance remained at the same level due to improvements in the qualitative factors. The growth rate of agricultural real estate lending slowed significantly and commercial real estate outside of agricultural real estate showed a slight decline. While commercial real estate construction accounted for the majority of the commercial real estate growth, the health of the Corporation’s developers had improved from 2015 to 2016 not requiring any additional reserves. The December 31, 2016 ending balance of the allowance was up $484,000, or 6.8%, from December 31, 2015, but the allowance as a percentage of total loans declined from 1.36% as of December 31, 2015, to 1.32% as of December 31, 2016. The Corporation recorded provision expense for the consumer real estate segment to compensate for 7% growth in the residential mortgage portfolio and 32% growth in home equity loans. A smaller provision was recorded for commercial and industrial loans to account for 1% growth coupled with a five basis point increase in the qualitative factor adjustment for that pool. Provision expense of $41,000 was booked against the consumer loan segment in response to $31,000 of charge-offs and a 16.6% increase in unsecured consumer loan balances. The following table details activity in the allowance for loan losses by portfolio segment for the year ended December 31, 2015: ALLOWANCE FOR CREDIT LOSSES AND RECORDED INVESTMENT IN LOANS RECEIVABLE (DOLLARS IN THOUSANDS) Commercial Commercial Consumer and Real Estate Real Estate Industrial Consumer Unallocated Total $ $ $ $ $ $ Allowance for credit losses: Beginning balance 3,834 1,367 1,301 66 573 7,141 Charge-offs (272 ) (28 ) (44 ) (18 ) — (362 ) Recoveries 34 — 112 3 — 149 Provision (credit) 235 64 (55 ) 11 (105 ) 150 Ending balance 3,831 1,403 1,314 62 468 7,078 Ending balance: individually evaluated for impairment — — — — — — Ending balance: collectively evaluated for impairment 3,831 1,403 1,314 62 468 7,078 Loans receivable: Ending balance 260,900 181,200 73,577 3,892 519,569 Ending balance: individually evaluated for impairment 1,705 — — — 1,705 Ending balance: collectively evaluated for impairment 259,195 181,200 73,577 3,892 517,864 The dollar amount of the allowance for all major loan segments did not change materially from December 31, 2014 to December 31, 2015, however the allowance as a percentage of loan balances did decline for all segments. Delinquencies, non-performing loans, and classified loans were all down from prior years’ levels so the Corporation was not carrying as large of an allowance as a percentage of total loans. The December 31, 2015 ending balance of the allowance was down $63,000, or 0.9%, from December 31, 2014. The Corporation recorded provision expense for the commercial real estate segment to compensate for increased charge-off activity in that segment. Provision expense was also recorded for the consumer real estate and consumer segments of the portfolio, but at smaller levels primarily due to limited charge-offs and growth within those portfolios. The Corporation was able to record a credit provision for the commercial and industrial segment due to continued improvements in credit loss experience and additional recoveries received. Commercial and industrial charge-offs in 2015 were only $44,000, while recoveries totaled $112,000. This enabled management to record a $55,000 credit provision for this segment. |
PREMISES AND EQUIPMENT
PREMISES AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
PREMISES AND EQUIPMENT | NOTE D – PREMISES AND EQUIPMENT (DOLLARS IN THOUSANDS ) The major classes of the Corporation’s premises and equipment and accumulated depreciation are as follows: December 31, 2017 2016 $ $ Land 5,043 3,787 Buildings and improvements 26,424 26,307 Furniture and equipment 13,510 12,970 Construction in process 2,773 180 Total 47,750 43,244 Less accumulated depreciation (22,063 ) (20,676 ) Premises and equipment 25,687 22,568 Depreciation expense, which is included in operating expenses, amounted to $1,391,000 for 2017, $1,408,000 for 2016, and $1,440,000 for 2015. The construction in process category represents expenditures for ongoing projects. When construction is completed, these amounts will be reclassified into buildings and improvements, and/or furniture and equipment. Depreciation only begins when the project or asset is placed into service. As of December 31, 2017, the construction in process consists primarily of costs associated with the building of the permanent branch office in Strasburg, PA which was opened for business in January of 2018. |
REGULATORY STOCK
REGULATORY STOCK | 12 Months Ended |
Dec. 31, 2017 | |
Federal Home Loan Bank Stock and Federal Reserve Bank Stock [Abstract] | |
REGULATORY STOCK | NOTE E – REGULATORY STOCK The Bank is a member of the Federal Home Loan Bank (FHLB) of Pittsburgh, which is one of 12 regional Federal Home Loan Banks. Each FHLB serves as a reserve or central bank for its members within its assigned region. As a member, the Bank is required to purchase and maintain stock in the FHLB in an amount equal to 0.10% of its asset value plus an additional 4% of its outstanding advances from the FHLB and mortgage partnership finance loans sold to the FHLB. At December 31, 2017, the Bank held $5,606,000 in stock of the FHLB compared to $5,184,000 as of December 31, 2016. The FHLB repurchases excess capital stock on a quarterly basis and pays a quarterly dividend on stock held by the Corporation. The FHLB’s quarterly dividend yield was 5.00% annualized on activity stock and 2.00% annualized on membership stock as of December 31, 2017. Most of the Corporation’s dividend is based on the activity stock, which is based on the amount of borrowings and mortgage activity with FHLB. Subsequent to December 31, 2017, but prior to the filing of this Form 10-K report, the FHLB of Pittsburgh declared a first quarter 2018 dividend, based on 2017 results, with a yield of 6.75% annualized based on activity stock and 3.50% annualized on membership stock. The Corporation will continue to monitor the financial condition of the FHLB quarterly to assess its ability to continue to regularly repurchase excess capital stock and pay a quarterly dividend. The Corporation also owned $151,000 of Federal Reserve Bank stock and $37,000 of Atlantic Community Bancshares, Inc. stock, the Bank Holding Company of ACBB, as of December 31, 2017 and December 31, 2016. |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2017 | |
Deposits: | |
DEPOSITS | NOTE F – DEPOSITS (DOLLARS IN THOUSANDS) Deposits by major classifications are summarized as follows: December 31, 2017 2016 $ $ Non-interest bearing demand 314,917 280,543 Interest-bearing demand 20,230 20,108 NOW accounts 86,758 85,540 Money market deposit accounts 105,994 93,943 Savings accounts 189,169 175,753 Time deposits under $250,000 143,073 151,988 Time deposits of $250,000 or more 6,336 9,616 Total deposits 866,477 817,491 At December 31, 2017, the scheduled maturities of time deposits are as follows: 2018 64,234 2019 29,406 2020 22,479 2021 22,355 2022 10,935 Total 149,409 |
SHORT TERM BORROWINGS
SHORT TERM BORROWINGS | 12 Months Ended |
Dec. 31, 2017 | |
Short-term Debt [Abstract] | |
SHORT TERM BORROWINGS | NOTE G – SHORT TERM BORROWINGS (DOLLARS IN THOUSANDS) Short-term borrowings consist of Federal funds purchased that mature one business day from the transaction date, overnight borrowings from the Federal Reserve Discount Window, and FHLB advances with a term of less than one year. A summary of short-term borrowings is as follows for the years ended December 31, 2017, 2016, and 2015: 2017 2016 2015 $ $ $ Total short-term borrowings outstanding at year end — 8,329 8,736 Average interest rate at year end — 0.65 0.29 Maximum outstanding at any month end 28,674 16,532 13,666 Average amount outstanding for the year 7,331 11,087 8,720 Weighted-average interest rate for the year 0.75% 0.49% 0.34% As of December 31, 2017, the Corporation had approved unsecured Federal funds lines of $32 million. The Corporation also has the ability to borrow through the FRB Discount Window. The amount of borrowing available through the Discount Window was $29.8 million as of December 31, 2017. For further information on borrowings from the FHLB see Note H. |
OTHER BORROWED FUNDS
OTHER BORROWED FUNDS | 12 Months Ended |
Dec. 31, 2017 | |
Long-term Debt, Unclassified [Abstract] | |
OTHER BORROWED FUNDS | NOTE H – OTHER BORROWED FUNDS (DOLLARS IN THOUSANDS) Maturities of other borrowings at December 31, 2017, and 2016, are summarized as follows: December 31, 2017 2016 Weighted- Weighted- Average Average Amount Rate Amount Rate $ % $ % FHLB fixed rate loans 2017 — — 15,000 1.26 2018 14,625 1.25 11,650 1.22 2019 12,237 1.53 9,267 1.58 2020 10,677 1.59 10,677 1.59 2021 14,505 1.72 9,443 1.59 2022 13,806 1.72 5,220 1.26 Total other borrowings 65,850 1.56 61,257 1.41 All of the Corporation’s long term borrowed funds were through the FHLB of Pittsburgh as of December 31, 2017. As a member of the FHLB of Pittsburgh, the Corporation has access to significant credit facilities. Borrowings from FHLB are secured with a blanket security agreement and the required investment in FHLB member bank stock. As part of the security agreement, the Corporation maintains unencumbered qualifying assets (principally 1-4 family residential mortgage loans) in an amount at least as much as the advances from the FHLB. Additionally, all of the Corporation’s FHLB stock is pledged to secure these advances. The Corporation had an FHLB maximum borrowing capacity of $352.3 million as of December 31, 2017, with remaining borrowing capacity of $286.5 million. The borrowing arrangement with the FHLB is subject to annual renewal. The maximum borrowing capacity is recalculated quarterly. |
CAPITAL TRANSACTIONS
CAPITAL TRANSACTIONS | 12 Months Ended |
Dec. 31, 2017 | |
Class of Stock Disclosures [Abstract] | |
CAPITAL TRANSACTIONS | NOTE I – CAPITAL TRANSACTIONS On June 17, 2015, the Board of Directors of ENB Financial Corp announced the approval of a new plan to purchase, in open market and privately negotiated transactions, up to 140,000 shares of its outstanding common stock. Shares repurchased are being held as treasury shares to be utilized in connection with the Corporation’s three stock purchase plans. The first purchase of common stock under this plan occurred on July 31, 2015. As of December 31, 2017, a total of 42,635 shares were repurchased under this plan at a weighted-average cost per share of $33.54. Currently, the following three stock purchase plans are in place: · a nondiscriminatory employee stock purchase plan (ESPP), which allows employees to purchase shares at a 10% discount from the stock’s fair market value at the end of each quarter, · a dividend reinvestment plan (DRP), and; · a directors’ stock purchase plan (DSPP). The ESPP was started in 2001 and is the largest of the three plans. There were 8,162 shares issued through the ESPP in 2017 with 100,652 shares issued since existence. The DRP was started in 2005 and has grown to nearly as large as the ESPP with 6,368 shares issued in 2017 and 91,437 total shares issued since existence. Lastly, the DSPP was started in 2010 as an additional option for board compensation. This plan is limited to outside directors. Only 1,411 shares were issued in connection with this plan in 2017 and 16,236 since existence. In 2016, there were 6,880 shares issued through the ESPP, 6,265 shares issued through the DRP, and 1,713 shares issued through the DSPP. The plans are beneficial to the Corporation as all reissued shares increase capital and since dividends are paid out in the form of additional shares, the plans act as a source of funds. The total amount of shares issued from Treasury for these plans collectively in 2017, 2016, and 2015 was 15,941, 14,858, and 15,623, respectively. All plans issue shares from treasury shares acquired. During 2017, 15,941 shares were reissued from treasury shares in connection with the plans. As of December 31, 2017, the Corporation held 19,734 treasury shares, at a weighted-average cost of $33.65 per share, with a cost basis of $664,000. |
RETIREMENT PLANS
RETIREMENT PLANS | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
RETIREMENT PLANS | NOTE J – RETIREMENT PLANS The Corporation provides an optional 401(k) plan, in which employees may elect to defer pre-tax or after-tax salary dollars, subject to the maximum annual Internal Revenue Service contribution amounts. The contribution maximum for 2017, 2016, and 2015 was $18,000, for persons under age 50, and for persons over age 50 was $24,000 in all three years. The Corporation matches employee contributions into the 401(k) plan at a rate of 50% on the first 5.0% of employee contributions. The Corporation’s cost for this 401(k) match was $316,000, $266,000 and $225,000 for 2017, 2016, and 2015, respectively. Effective January 1, 2016, the Corporation consolidated its Money Purchase Pension Plan and 401(k) Savings Plan. In the process of the consolidation the Money Purchase Pension feature was discontinued and replaced with a Non-Elective Safe Harbor feature and a Non-Elective Employer Contribution feature. Under the new plan, the Corporation provides a Non-Elective Safe Harbor Contribution equal to 3% of all employees’ compensation for the year. Additionally, the Corporation may contribute a Non-Elective Employer Contribution of up to 2% annually to all employees aged 21 or older who work 1,000 or greater hours in a calendar year and have met the eligibility requirements of the plan. In year 2015, the Corporation provided 5% of all employee compensation in the Money Purchase Pension Plan for qualifying employees. The qualification for the Non-Elective Employer Contribution under the new 401(k) Savings Plan mirrors the requirements of the Money Purchase Pension Plan. Effective January 1, 2016, the balance of the Money Purchase Pension Plan was transferred into the new 401(k) Savings Plan. For purposes of the new 401(k) Savings Plan and the former Money Purchase Pension Plan, covered compensation was limited to $270,000 in 2017 and $265,000 in 2016 and 2015. Total expenses of the plan were $704,000, $651,000, and $497,000, for 2017, 2016, and 2015, respectively. The Corporation’s new 401(k) Savings Plan is fully funded as all obligations are funded monthly. Employees who have met the eligibility requirements of the new plan have the potential to receive employer contributions of 7.5% of their compensation. Employees that contributed at least 5% of their compensation into the new 401(k) Savings Plan will continue to receive an employer matching contribution of 2.5% of their compensation. Employees who met the eligibility requirements under the new 401(k) Savings Plan will receive a Non-Elective Safe Harbor Contribution of 3% of their compensation and may receive a Non-Elective Employer Contribution of 2% of their compensation. |
DEFERRED COMPENSATION
DEFERRED COMPENSATION | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Compensation Arrangements [Abstract] | |
DEFERRED COMPENSATION | NOTE K - DEFERRED COMPENSATION Prior to 1999, directors of the Corporation had the ability to defer their directors’ fees into a directors’ deferred compensation plan. Directors electing to defer their compensation signed a contract that allowed the Corporation to take out a life insurance policy on the director designed to fund the future deferred compensation obligation, which is paid out over a ten-year period at retirement age. A contract and life insurance policy was taken out for each period of pay deferred. The amount of deferred compensation to be paid to each director was actuarially determined based on the amount of life insurance the annual directors’ fees were able to purchase. This amount varies for each director depending on age, general health, and the number of years until the director is entitled to begin receiving payments. The Corporation is the owner and beneficiary of all life insurance policies on the directors. At the time the directors’ pay was deferred, the Corporation used the amount of the annual directors’ fees to pay the premiums on the life insurance policies. The Corporation could continue to pay premiums after the deferment period, or could allow the policies to fund annual premiums through loans against the policy’s cash surrender value. The Corporation has continued to pay the premiums on the life insurance policies and no loans exist on the policies. The life insurance policies had an aggregate face amount of $3,409,000 for December 31, 2017, and December 31, 2016. The death benefits totaled $6,680,000 at December 31, 2017, and $6,399,000 at December 31, 2016. The cash surrender value of the above policies totaled $4,775,000 and $4,726,000 as of December 31, 2017, and 2016, respectively. The net present value of the vested portion of deferred payments totaled $130,000 at December 31, 2017, and $279,000 at December 31, 2016. The interest rate used to discount these obligations was 4.50% for 2017 and 2016. These net present value amounts are included in other liabilities on the Corporation’s Consolidated Balance Sheets. Total charges to expense for deferred compensation amounted to $9,000 for 2017, $16,000 for 2016, and $23,000 for 2015, and are included in other operating expenses in the Consolidated Statements of Income. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE L - INCOME TAXES Federal income tax expense as reported differs from the amount computed by applying the statutory Federal income tax rate to income before taxes. A reconciliation of the differences by amount and percent is as follows: FEDERAL INCOME TAX SUMMARY (DOLLARS IN THOUSANDS) Year Ended December 31, 2017 2016 2015 $ % $ % $ % Income tax at statutory rate 2,952 34.0 3,028 34.0 2,811 34.0 Tax-exempt interest income (1,620 ) (18.7 ) (1,478 ) (16.6 ) (1,270 ) (15.4 ) Non-deductible interest expense 72 0.8 52 0.6 39 0.5 Bank-owned life insurance (234 ) (2.7 ) (267 ) (3.0 ) (247 ) (3.0 ) Other 37 0.4 18 0.2 25 0.3 Change in corporate tax rate 1,131 13.1 — — — — Income tax expense 2,338 26.9 1,353 15.2 1,358 16.4 The ability to realize the benefit of deferred tax assets is dependent upon a number of factors, including the generation of future taxable income, the ability to carry back losses to recover taxes paid in previous years, the ability to offset capital losses with capital gains, the reversal of deferred tax liabilities, and certain tax planning strategies. The Corporation has a deferred tax asset for credits related to Alternative Minimum Taxes (AMT) of $1,158,000 as of December 31, 2017, and $1,043,000 as of December 31, 2016. The AMT credits have an unlimited carry-forward period. No valuation has been established for these deferred tax assets in view of the Corporation’s ability to carry forward tax credits to future years, coupled with the anticipated future taxable income as evidenced by the Corporation’s earnings potential. Additionally, this asset’s value was not impacted by the change in the corporate tax rate described below. U.S. generally accepted accounting principles prescribe a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. There is currently no liability for uncertain tax positions and no known unrecognized tax benefits. The Corporation recognizes, when applicable, interest and penalties related to unrecognized tax benefits in the provision for income taxes in the Consolidated Statements of Income. With few exceptions, the Corporation is no longer subject to U.S. federal, state, or local income tax examinations by tax authorities for years before 2014. The Tax Cuts and Jobs Act, enacted on December 22, 2017, lowered the Corporation’s federal income tax rate from 34% to 21% effective January 1, 2018. As a result, the carrying value of net deferred tax assets was reduced which increased income tax expense by $1,131,000. Significant components of income tax expense are as follows: (DOLLARS IN THOUSANDS) Year Ended December 31, 2017 2016 2015 $ $ $ Current tax expense 842 1,734 1,095 Deferred tax expense (benefit) 365 (381 ) 275 Valuation allowance adjustment — — (12 ) Change in corporate tax rate 1,131 — — Income tax expense 2,338 1,353 1,358 Components of the Corporation's net deferred tax position are as follows: (DOLLARS IN THOUSANDS) December 31, 2017 2016 2015 $ $ $ Deferred tax assets Allowance for loan losses 2,802 2,571 2,406 Net unrealized holding losses on securities available for sale 1,016 2,516 130 Deferred compensation reserve 44 95 148 Capital loss carryforward — — 13 Tax credit carryforward 1,158 1,043 1,085 Allowance for off-balance sheet extensions of credit 108 117 155 Interest on non-accrual loans 174 166 155 Other 11 7 7 Total deferred tax assets 5,313 6,515 4,099 Valuation allowance — — (13 ) Net deferred taxes 5,313 6,515 4,086 Deferred tax liabilities Premises and equipment (2,670 ) (1,497 ) (1,852 ) Discount on investment securities — — (1 ) Other (161 ) (41 ) (24 ) Total deferred tax liabilities (2,831 ) (1,538 ) (1,877 ) Net deferred tax assets 2,482 4,977 2,209 |
REGULATORY MATTERS AND RESTRICT
REGULATORY MATTERS AND RESTRICTIONS | 12 Months Ended |
Dec. 31, 2017 | |
Regulatory Capital Requirements [Abstract] | |
REGULATORY MATTERS AND RESTRICTIONS | NOTE M – REGULATORY MATTERS AND RESTRICTIONS The Corporation and the Bank are subject to various regulatory capital requirements administered by the Federal banking agencies. Failure to meet the 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 Corporation’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Corporation and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. The quantitative measures established by regulation to ensure capital adequacy require the Corporation and the Bank to maintain minimum amounts and ratios (set forth below) of tier I capital to average assets, and common equity tier I capital, tier I capital, and total capital to risk-weighted assets. As of December 31, 2017 and 2016, the Corporation and Bank were categorized as “well capitalized” under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category. The following chart details the Corporation’s and the Bank’s capital levels as of December 31, 2017 and December 31, 2016, compared to regulatory levels. CAPITAL LEVELS To Be Well (DOLLARS IN THOUSANDS) Capitalized Under For Capital Prompt Corrective Actual Adequacy Purposes Action Provision $ % $ % $ % As of December 31, 2017 Total Capital to Risk-Weighted Assets Consolidated 111,512 15.0 59,525 8.0 74,406 10.0 Bank 109,961 14.8 59,502 8.0 74,378 10.0 Tier I Capital to Risk-Weighted Assets Consolidated 102,955 13.8 44,644 6.0 59,525 8.0 Bank 101,404 13.6 44,627 6.0 59,502 8.0 Common Equity Tier I Capital to Risk-Weighted Assets Consolidated 102,955 13.8 33,483 4.5 48,364 6.5 Bank 101,404 13.6 33,470 4.5 48,346 6.5 Tier I Capital to Average Assets Consolidated 102,955 10.1 40,971 4.0 51,214 5.0 Bank 101,404 9.9 40,971 4.0 51,214 5.0 As of December 31, 2016 Total Capital to Risk-Weighted Assets Consolidated 107,732 15.2 56,635 8.0 70,794 10.0 Bank 106,084 15.0 56,634 8.0 70,793 10.0 Tier I Capital to Risk-Weighted Assets Consolidated 99,824 14.1 42,476 6.0 56,635 8.0 Bank 98,176 13.9 42,476 6.0 56,634 8.0 Common Equity Tier I Capital to Risk-Weighted Assets Consolidated 99,824 14.1 31,857 4.5 46,016 6.5 Bank 98,176 13.9 31,857 4.5 46,015 6.5 Tier I Capital to Average Assets Consolidated 99,824 10.2 39,092 4.0 48,865 5.0 Bank 98,176 10.1 39,059 4.0 48,824 5.0 In addition to the capital guidelines, certain laws restrict the amount of dividends paid to stockholders in any given year. The approval of the OCC shall be required if the total of all dividends declared by the Corporation in any year shall exceed the total of its net profits for that year combined with retained net profits of the preceding two years. Under this restriction, the Corporation could declare dividends in 2017, without the approval of the OCC, of approximately $7.1 million, plus an additional amount equal to the Corporation’s net profits for 2018, up to the date of any such dividend declaration. |
TRANSACTIONS WITH DIRECTORS AND
TRANSACTIONS WITH DIRECTORS AND OFFICERS | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
TRANSACTIONS WITH DIRECTORS AND OFFICERS | NOTE N – TRANSACTIONS WITH DIRECTORS AND OFFICERS The following table presents activity in the amounts due from directors, executive officers, immediate family, and affiliated companies. These transactions are made on the same terms and conditions, including interest rates and collateral requirements as those prevailing at the time for comparable transactions with others. An analysis of the activity with respect to such aggregate loans to related parties is shown below. LOANS TO INSIDERS (DOLLARS IN THOUSANDS) Actual $ Balance, January 1, 2016 4,248 Advances 2,427 Repayments (2,222 ) Balance, December 31, 2016 4,453 Balance, January 1, 2017 4,453 Advances 3,358 Repayments (2,142 ) Balance, December 31, 2017 5,669 Deposits from the insiders totaled $4,034,000 as of December 31, 2017, and $4,999,000 as of December 31, 2016. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE O - COMMITMENTS AND CONTINGENCIES In the normal course of business, the Corporation makes various commitments that are not reflected in the accompanying consolidated financial statements. These are commonly referred to as off-balance sheet commitments and include firm commitments to extend credit, unused lines of credit, and open letters of credit. On December 31, 2017, firm loan commitments totaled approximately $45.0 million; unused lines of credit totaled $214.2 million; and open letters of credit totaled $11.3 million. The sum of these commitments, $270.5 million, represents total exposure to credit loss in the event of nonperformance by customers with respect to these financial instruments; however the vast majority of these commitments are typically not drawn upon. The same credit policies for on-balance sheet instruments apply for making commitments and conditional obligations and the actual credit losses that could arise from the exercise of these commitments is expected to compare favorably with the loan loss experience on the loan portfolio taken as a whole. Commitments to extend credit on December 31, 2016, totaled $234.6 million, representing firm loan commitments of $35.1 million, unused lines of credit of $189.2 million, and open letters of credit totaling $10.3 million. Firm commitments to extend credit and unused lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Each customer’s creditworthiness is evaluated on an individual basis. The amount of collateral obtained, if deemed necessary by the extension of credit, is based on management’s credit evaluation of the customer. These commitments are supported by various types of collateral, where it is determined that collateral is required. Open letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements. Most guarantees expire within one year. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. While various assets of the customer act as collateral for these letters of credit, real estate is the primary collateral held for these potential obligations. |
FINANCIAL INSTRUMENTS WITH CONC
FINANCIAL INSTRUMENTS WITH CONCENTRATIONS OF CREDIT RISK | 12 Months Ended |
Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
FINANCIAL INSTRUMENTS WITH CONCENTRATIONS OF CREDIT RISK | NOTE P - FINANCIAL INSTRUMENTS WITH CONCENTRATIONS OF CREDIT RISK The Corporation determines concentrations of credit risk by reviewing loans by borrower, geographical area, and loan purpose. The amount of credit extended to a single borrower or group of borrowers is capped by the legal lending limit, which is defined as 15% of the Bank’s risk-based capital, less the allowance for loan losses. The Corporation’s lending policy further restricts the amount to 75% of the legal lending limit. As of December 31, 2017, the Corporation’s legal lending limit was $16,494,000, and the Corporation’s lending policy limit was $12,371,000. This compared to a legal lending limit of $15,913,000, and lending policy limit of $11,934,000 as of December 31, 2016. As of December 31, 2017 and 2016, no lending relationships exceeded the Corporation’s internal lending policy limit. Geographically, the primary lending area for the Corporation encompasses Lancaster, Lebanon, and Berks counties of Pennsylvania, with the vast majority of the loans made in Lancaster County. The ability of debtors to honor their loan agreements is impacted by the health of the local economy. The Corporation’s immediate market area benefits from a diverse economy, which has resulted in a diverse loan portfolio. As a community bank, the largest amount of loans outstanding consists of personal mortgages, residential rental loans, and personal loans secured by real estate. Beyond personal lending, the Corporation’s business and commercial lending includes loans for agricultural, construction, specialized manufacturing, service industries, many types of small businesses, and loans to governmental units and non-profit entities. Management evaluates concentrations of credit based on loan purpose on a quarterly basis. The Corporation’s greatest concentration of loans by purpose is residential real estate, which comprises $249.3 million, or 41.8%, of the $596.3 million gross loans outstanding as of December 31, 2017. This compares to $213.8 million, or 37.5%, of the $570.6 million of gross loans outstanding as of December 31, 2016. Residential real estate consists of first mortgages and home equity loans. A concentration in commercial real estate of 43.7%, or $260.8 million, also exists; however, within that category there is not a concentration by specific industry type. The Corporation remains focused on agricultural purpose loans, of which the vast majority are real estate secured. Agricultural mortgages made up 25.5% of gross loans as of December 31, 2017, compared to 28.7% as of December 31, 2016; however these agricultural mortgages are spread over several broader types of agricultural purpose loans. More specifically within these larger purpose categories, management monitors on a quarterly basis the largest concentrations of non-consumer credit based on the North American Industrial Classification System (NAICS). As of December 31, 2017, the largest specific industry type categories were dairy cattle and milk production loans of $81.2 million, or 13.6% of gross loans, residential real estate investment loans of $38.8 million, or 6.5% of gross loans, and non-residential real estate investment loans with a balance of $38.7 million, or 6.5% of gross loans. Outside of consumer and commercial real estate, including agricultural mortgages, the third largest component of the Corporation’s loans consist of commercial and industrial loans. These loans are generally secured by personal guarantees, inventory, or pledges of municipalities. Out of the $80.9 million of loans designated as commercial and industrial for the Uniform Bank Performance Reports, the largest concentration within that area is $20.7 million of loans to political subdivisions, which account for 3.5% of gross loans outstanding. For the Corporation, these loans consisted of tax-free loans to local municipalities. To evaluate risk for the securities portfolio, the Corporation reviews both geographical concentration and credit ratings. The largest geographical concentrations as of December 31, 2017, were obligations of states and political subdivisions located in the states of Pennsylvania, Texas, and Illinois. Based on fair market value, the Corporation held $30.4 million of obligations issued by municipalities within the state of Pennsylvania, which is 27.1% of the municipal portfolio, and 9.7% of total debt securities. The Corporation held $19.5 million of obligations issued by municipalities within the state of Texas, which is 17.4% of the municipal portfolio, and 6.2% of total debt securities. The Corporation also held $15.2 million of obligations of states and political subdivisions issued by municipalities located within the state of Illinois, which is 13.5% of the municipal portfolio, and 4.8% of total debt securities. Internal policy requires municipal bonds purchased to be rated at least A3 by Moody’s and/or A- by Standard & Poor’s (S&P) at the time of purchase. As of December 31, 2017, no municipal bonds were below the A3/A- credit ratings the Corporation requires at the time of purchase. The Corporation held $61.3 million of corporate bonds based on amortized cost as of December 31, 2017. As a total, the $61.3 million represents 19.2% of the Corporation’s total debt securities. Management has a policy limit for corporate holdings at 55% of total regulatory capital and 20% of the securities portfolio. The Corporation was at these policy limits as of December 31, 2017. Management believes shorter corporate bonds currently provide better structure and return than government agencies and mortgage backed securities and CMOs. To limit the Corporation’s credit exposure to any one issuer, the policy limits investment to $3 million of par value per company. Out of the $61.3 million of total corporate securities, $39.1 million is domestic and $22.2 million is foreign-issued debt. None of the Corporation’s foreign corporate debt originates from the European countries that have struggled with the sovereign debt crisis, namely Portugal, Italy, Ireland, Greece, and Spain. Most of the Corporation’s foreign-issued debt is from the United Kingdom, Australia, and Switzerland. Within the corporate bond segment of the portfolio, management has preferred to invest in the banking, brokerage, and finance industry, where management is more comfortable analyzing and evaluating the credit risk of these firms. As a result, based on amortized cost, $47.9 million, or 78.1%, of the corporate bonds held are invested in national or foreign banks, bank holding companies, brokerage firms, or finance companies. In this broader finance-related group, management has selectively pursued foreign bank-issued debt where there is governmental ownership of the bank, and/or implied backing driven by the heavy reliance on these banks for the nation’s financial system. Out of the total $47.9 million of financial and brokerage-related corporate issues, $25.6 million is domestic and $22.3 million is foreign. All of the $22.3 million of foreign financial-related corporate paper is in the form of foreign bank-issued debt. Out of the $25.6 million of domestic financial-related debt, $14.5 million is in bank debt and $11.1 million is in brokerage. The remaining $13.4 million of non-financial related corporate paper consists of $4.1 million in energy companies, $2.1 million in insurance companies, $2.1 million in real estate companies, $2.1 million in healthcare, $2.0 million in biotechnology, and $1.0 million in farm equipment. By internal policy, at time of purchase, all corporate bonds must carry a credit rating of at least A3 by Moody’s or A- by S&P, and at all times corporate bonds are to be investment grade, which is defined as Baa3 for Moody’s and BBB- for S&P, or above. As of December 31, 2017, all of the Corporation’s corporate bonds carried at least one single A credit rating of A3 by Moody’s or A- by S&P. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE Q - FAIR VALUE MEASUREMENTS The following disclosures show the hierarchal disclosure framework associated with the level of pricing observations utilized in measuring assets and liabilities at fair value. The three broad levels defined by U.S. generally accepted accounting principles are as follows: Level I: Quoted prices are available in active markets for identical assets or liabilities as of the reported date. Level II: Pricing inputs are other than the quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities includes items for which quoted prices are available but traded less frequently and items that are fair-valued using other financial instruments, the parameters of which can be directly observed. Level III: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. This hierarchy requires the use of observable market data when available. The following table presents the assets reported on the Consolidated Balance Sheets at their fair value as of December 31, 2017, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. ASSETS REPORTED AT FAIR VALUE (DOLLARS IN THOUSANDS) December 31, 2017 Level I Level II Level III Total $ $ $ $ U.S. government agencies — 34,352 — 34,352 U.S. agency mortgage-backed securities — 52,073 — 52,073 U. S. agency collateralized mortgage obligations — 54,641 — 54,641 Corporate bonds — 60,769 — 60,769 Obligations of states and political subdivisions — 112,243 — 112,243 Marketable equity securities 5,583 — — 5,583 Total securities 5,583 314,078 — 319,661 On December 31, 2017, the Corporation held no securities valued using level III inputs. All of the Corporation’s debt instruments were valued using level II inputs, where quoted prices are available and observable but not necessarily quotes on identical securities traded in active markets on a daily basis. The Corporation’s CRA fund investments and bank stocks are fair valued utilizing level I inputs because the funds have their own quoted prices in an active market. As of December 31, 2017, the CRA fund investments had a $5,280,000 book and market value and the bank stocks had a book value of $267,000 and a market value of $303,000. Financial instruments are considered level III when their values are determined using pricing models, discounted cash flow methodologies, or similar techniques, and at least one significant model assumption or input is unobservable. In addition to these unobservable inputs, the valuation models for level III financial instruments typically also rely on a number of inputs that are readily observable either directly or indirectly. Level III financial instruments also include those for which the determination of fair value requires significant management judgment or estimation. The following table presents the assets reported on the Consolidated Balance Sheets at their fair value as of December 31, 2016, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. ASSETS REPORTED AT FAIR VALUE (DOLLARS IN THOUSANDS) December 31, 2016 Level I Level II Level III Total $ $ $ $ U.S. government agencies — 32,261 — 32,261 U.S. agency mortgage-backed securities — 55,869 — 55,869 U. S. agency collateralized mortgage obligations — 37,936 — 37,936 Corporate bonds — 52,091 — 52,091 Obligations of states and political subdivisions — 124,430 — 124,430 Marketable equity securities 5,524 — — 5,524 Total securities 5,524 302,587 — 308,111 On December 31, 2016, the Corporation held no securities valued using level III inputs. All of the Corporation’s debt instruments were valued using level II inputs, where quoted prices are available and observable but not necessarily quotes on identical securities traded in active markets on a daily basis. The Corporation’s CRA fund investments and bank stocks are fair valued utilizing level I inputs because the funds have their own quoted prices in an active market. As of December 31, 2016, the CRA fund investments had a $5,250,000 book and market value and the bank stocks had a book value of $219,000 and a market value of $274,000. The following table presents the assets measured on a nonrecurring basis on the Consolidated Balance Sheets at their fair value as of December 31, 2017, and December 31, 2016, by level within the fair value hierarchy. ASSETS MEASURED ON A NONRECURRING BASIS (DOLLARS IN THOUSANDS) December 31, 2017 Level I Level II Level III Total $ $ $ $ Assets: Impaired Loans — — 1,812 1,812 OREO — — — — Total — — 1,812 1,812 December 31, 2016 Level I Level II Level III Total $ $ $ $ Assets: Impaired Loans — — 1,969 1,969 OREO — — — — Total — — 1,969 1,969 The Corporation had a total of $1,812,000 of impaired loans as of December 31, 2017, with no specific allocation against these loans. As of December 31, 2016, the Corporation had a total of $1,969,000 of impaired loans with no specific allocation against these loans. Other real estate owned (OREO) is measured at fair value, less estimated costs to sell at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management. The assets are carried at the lower of carrying amount or fair value, less estimated costs to sell. The Corporation had no OREO as of December 31, 2017 or December 31, 2016. The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis for which the Corporation has utilized level III inputs to determine fair value: QUANTITATIVE INFORMATION ABOUT LEVEL III FAIR VALUE MEASUREMENTS (DOLLARS IN THOUSANDS) December 31, 2017 Fair Value Valuation Unobservable Range Estimate Techniques Input (Weighted Avg) Impaired loans 1,812 Appraisal of collateral (1) Appraisal adjustments (2) 0% to -20% (-20%) Liquidation expenses (2) 0% to -10% (-10%) December 31, 2016 Fair Value Valuation Unobservable Range Estimate Techniques Input (Weighted Avg) Impaired loans 1,969 Appraisal of collateral (1) Appraisal adjustments (2) 0% to -20% (-20%) Liquidation expenses (2) 0% to -10% (-10%) (1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally includes various level III inputs which are not identifiable. (2) Appraisals may be adjusted by management 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. |
DISCLOSURES ABOUT FAIR VALUE OF
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | |
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE R - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS The following methods and assumptions were used to estimate the fair value of each class of financial instruments: Cash and Cash Equivalents For these short-term instruments, the carrying amount is a reasonable estimate of fair value. Securities Available for Sale Management utilizes quoted market pricing for the fair value of the Corporation's securities that are available for sale, if available. If a quoted market rate is not available, fair value is estimated using quoted market prices for similar securities. Regulatory Stock Regulatory stock is valued at a stable dollar price, which is the price used to purchase or liquidate shares; therefore the carrying amount is a reasonable estimate of fair value. Loans Held for Sale Loans held for sale are individual loans for which the Corporation has a firm sales commitment; therefore, the carrying value is a reasonable estimate of the fair value. Loans The fair value of fixed and variable rate loans is estimated by discounting back the scheduled future cash flows of the particular loan product, using the market interest rates of comparable loan products in the Corporation’s greater market area, with the same general structure, comparable credit ratings, and for the same remaining maturities. Accrued Interest Receivable The carrying amount of accrued interest receivable is a reasonable estimate of fair value. Bank-Owned Life Insurance Fair value is equal to the cash surrender value of the life insurance policies. Deposits The fair value of non-interest bearing demand deposit accounts and interest bearing demand deposit and savings accounts is based on the amount payable on demand at the reporting date. The fair value of fixed-maturity time deposits is estimated by discounting back the expected cash flows of the time deposit using market interest rates from the Corporation’s greater market area, which are currently being offered for similar time deposits with similar remaining maturities. Borrowings The fair value of a term borrowing is estimated by comparing the rate currently offered for the same type of borrowing instrument with a matching remaining term. Accrued Interest Payable The carrying amount of accrued interest payable is a reasonable estimate of fair value. Firm Commitments to Extend Credit, Lines of Credit, and Open Letters of Credit These financial instruments are generally not subject to sale and estimated fair values are not readily available. The carrying value, represented by the net deferred fee arising from the unrecognized commitment or letter of credit, and the fair value, determined by discounting the remaining contractual fee over the term of the commitment, using fees currently charged to enter into similar agreements with similar credit risk, is not considered material for disclosure purposes. The contractual amounts of unfunded commitments are presented in Note O. The carrying amounts and estimated fair values of the Corporation's financial instruments at December 31, 2017, are summarized as follows: FAIR VALUE OF FINANCIAL INSTRUMENTS (DOLLARS IN THOUSANDS) December 31, 2017 Quoted Prices in Active Markets Significant Other Significant for Identical Observable Unobservable Carrying Assets Inputs Inputs Amount Fair Value (Level I) (Level II) (Level III) $ $ $ $ $ Financial Assets: Cash and cash equivalents 53,073 53,073 53,073 — — Securities available for sale 319,661 319,661 5,583 314,078 — Regulatory stock 5,794 5,794 5,794 — — Loans held for sale 2,892 2,892 2,892 — — Loans, net of allowance 589,313 590,415 — — 590,415 Accrued interest receivable 3,684 3,684 3,684 — — Bank owned life insurance 27,814 27,814 27,814 — — Financial Liabilities: Demand deposits 314,917 314,917 314,917 — — Interest-bearing demand deposits 20,230 20,230 20,230 — — NOW accounts 86,758 86,758 86,758 — — Money market deposit accounts 105,994 105,994 105,994 — — Savings accounts 189,169 189,169 189,169 — — Time deposits 149,409 150,165 — — 150,165 Total deposits 866,477 867,233 717,068 — 150,165 Long-term debt 65,850 65,850 — — 65,850 Accrued interest payable 385 385 385 — — The carrying amounts and estimated fair values of the Corporation’s financial instruments at December 31, 2016, are summarized as follows: FAIR VALUE OF FINANCIAL INSTRUMENTS (DOLLARS IN THOUSANDS) December 31, 2016 Quoted Prices in Active Markets Significant Other Significant for Identical Observable Unobservable Carrying Assets Inputs Inputs Amount Fair Value (Level I) (Level II) (Level III) $ $ $ $ $ Financial Assets: Cash and cash equivalents 45,632 45,632 45,632 — — Securities available for sale 308,111 308,111 5,524 302,587 — Regulatory stock 5,372 5,372 5,372 — — Loans held for sale 2,552 2,552 2,552 — — Loans, net of allowance 564,005 563,418 — — 563,418 Accrued interest receivable 3,750 3,750 3,750 — — Bank owned life insurance 24,687 24,687 24,687 — — Financial Liabilities: Demand deposits 280,543 280,543 280,543 — — Interest-bearing demand deposits 20,108 20,108 20,108 — — NOW accounts 85,540 85,540 85,540 — — Money market deposit accounts 93,943 93,943 93,943 — — Savings accounts 175,753 175,753 175,753 — — Time deposits 161,604 163,464 — — 163,464 Total deposits 817,491 819,351 655,887 — 163,464 Short-term borrowings 8,329 8,329 8,329 — — Long-term debt 61,257 61,372 — — 61,372 Accrued interest payable 384 384 384 — — |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | NOTE S – ACCUMULATED OTHER COMPREHENSIVE LOSS The activity in accumulated other comprehensive loss for the years ended December 31, 2017 and 2016 is as follows: ACCUMULATED OTHER COMPREHENSIVE LOSS (1) (2) (DOLLARS IN THOUSANDS) Unrealized Gains (Losses) on Securities Available-for-Sale $ Balance at January 1, 2017 (4,885 ) Other comprehensive income before reclassifications 2,135 Amount reclassified from accumulated other comprehensive loss (445 ) Period change 1,690 Balance at December 31, 2017 (3,195 ) Balance at January 1, 2016 (252 ) Other comprehensive loss before reclassifications (3,069 ) Amount reclassified from accumulated other comprehensive loss (1,564 ) Period change (4,633 ) Balance at December 31, 2016 (4,885 ) (1) All amounts are net of tax. Related income tax expense or benefit is calculated using a Federal income tax rate of 34%. (2) Amounts in parentheses indicate debits. DETAILS ABOUT ACCUMULATED OTHER COMPREHENSIVE LOSS COMPONENTS (1) (DOLLARS IN THOUSANDS) Amount Reclassified from Accumulated Other Comprehensive Income (Loss) For the Year Ended December 31, Affected Line Item 2017 2016 in the Consolidated $ $ Statements of Income Securities available-for-sale: Net securities gains reclassified into earnings 675 2,370 Gains on securities transactions, net Related income tax expense (230 ) (806 ) Provision for federal income taxes Net effect on accumulated other comprehensive loss for the period 445 1,564 Total reclassifications for the period 445 1,564 (1) Amounts in parentheses indicate debits. |
CONDENSED PARENT ONLY DATA
CONDENSED PARENT ONLY DATA | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
CONDENSED PARENT ONLY DATA | NOTE T – CONDENSED PARENT ONLY DATA Condensed Balance Sheets (Parent Company Only) (DOLLARS IN THOUSANDS) December 31, 2017 2016 $ $ Assets Cash 1,187 1,356 Securities available for sale (at fair value) 304 274 Equity in bank subsidiary 98,184 93,255 Other assets 84 54 Total assets 99,759 94,939 Stockholders' Equity Common stock 574 574 Capital surplus 4,415 4,403 Retained earnings 98,629 95,475 Accumulated other comprehensive loss, net of tax (3,195 ) (4,885 ) Treasury stock (664 ) (628 ) Total stockholders' equity 99,759 94,939 Condensed Statements of Comprehensive Income (DOLLARS IN THOUSANDS) Year Ended December 31, 2017 2016 2015 $ $ $ Income Dividend income - investment securities 10 29 16 Gains on securities transactions 57 171 25 Dividend income 3,190 3,606 3,581 Undistributed earnings of bank subsidiary 3,228 3,918 3,462 Total income 6,485 7,724 7,084 Expense Shareholder expenses 120 125 118 Other expenses 21 46 56 Total expense 141 171 174 Net Income 6,344 7,553 6,910 Comprehensive Income 8,034 2,920 5,656 Condensed Statements of Cash Flows (DOLLARS IN THOUSANDS) Year Ended December 31, 2017 2016 2015 Cash Flows from Operating Activities: $ $ $ Net Income 6,344 7,553 6,910 Equity in undistributed earnings of subsidiaries (3,228 ) (3,918 ) (3,462 ) Gains on securities transactions, net (57 ) (171 ) (25 ) Net change in other assets (30 ) 12 5 Net cash provided by operating activities 3,029 3,476 3,428 Cash Flows from Investing Activities: Proceeds from sales of securities available for sale 150 812 167 Purchases of securities available for sale (134 ) (358 ) (467 ) Net cash provided by (used for) investing activities 16 454 (300 ) Cash Flows from Financing Activities: Proceeds from issuance of treasury stock 544 489 512 Payment to repurchase common stock (568 ) (465 ) (752 ) Dividends paid (3,190 ) (3,107 ) (3,081 ) Net cash used for financing activities (3,214 ) (3,083 ) (3,321 ) Cash and Cash Equivalents: Net change in cash and cash equivalents (169 ) 847 (193 ) Cash and cash equivalents at beginning of period 1,356 509 702 Cash and cash equivalents at end of period 1,187 1,356 509 The unaudited quarterly results of operations for the years ended 2017, 2016, and 2015 are as follows: |
SUMMARY OF QUARTERLY FINANCIAL
SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Data [Abstract] | |
SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED) | NOTE U - SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 2017 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr $ $ $ $ Interest income 7,982 8,213 8,444 8,478 Interest expense 702 731 754 752 Net interest income 7,280 7,482 7,690 7,726 Less provision for loan losses 90 120 240 490 Net interest income after provision for loan losses 7,190 7,362 7,450 7,236 Other income 2,412 2,512 2,622 2,775 Operating expenses: Salaries and employee benefits 4,719 4,811 4,840 4,970 Occupancy and equipment expenses 881 902 923 873 Other operating expenses 1,918 2,002 1,884 2,154 Total operating expenses 7,518 7,715 7,647 7,997 Income before income taxes 2,084 2,159 2,425 2,014 Provision for Federal income taxes 257 287 391 1,403 Net income 1,827 1,872 2,034 611 FINANCIAL RATIOS Per share data: Net income 0.64 0.66 0.71 0.21 Cash dividends paid 0.28 0.28 0.28 0.28 2016 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr $ $ $ $ Interest income 6,886 6,294 7,393 7,768 Interest expense 811 757 751 735 Net interest income 6,075 5,537 6,642 7,033 Less provision (credit) for loan losses (50 ) 50 200 125 Net interest income after provision (credit) for loan losses 6,125 5,487 6,442 6,908 Other income 2,651 3,087 2,828 2,578 Operating expenses: Salaries and employee benefits 3,971 4,040 4,219 4,539 Occupancy and equipment expenses 777 787 831 879 Other operating expenses 1,734 1,885 1,698 1,840 Total operating expenses 6,482 6,712 6,748 7,258 Income before income taxes 2,294 1,862 2,522 2,228 Provision for Federal income taxes 382 218 445 308 Net income 1,912 1,644 2,077 1,920 FINANCIAL RATIOS Per share data: Net income 0.67 0.58 0.73 0.67 Cash dividends paid 0.27 0.27 0.27 0.28 2015 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr $ $ $ $ Interest income 6,872 6,718 6,761 6,491 Interest expense 1,014 951 928 851 Net interest income 5,858 5,767 5,833 5,640 Less provision (credit) for loan losses 200 100 (150 ) — Net interest income after provision (credit) for loan losses 5,658 5,667 5,983 5,640 Other income 2,201 2,394 2,342 3,118 Operating expenses: Salaries and employee benefits 3,702 3,674 3,679 3,741 Occupancy and equipment expenses 822 822 791 783 Other operating expenses 1,626 1,691 1,620 1,784 Total operating expenses 6,150 6,187 6,090 6,308 Income before income taxes 1,709 1,874 2,235 2,450 Provision for Federal income taxes 243 278 382 455 Net income 1,466 1,596 1,853 1,995 FINANCIAL RATIOS Per share data: Net income 0.51 0.56 0.65 0.70 Cash dividends paid 0.27 0.27 0.27 0.27 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE V – SUBSEQUENT EVENTS Subsequent to December 31, 2017, but prior to the filing of this document, the Corporation was saddened to learn of the untimely February 1, 2018 death of a former employee that was covered under Ephrata National Bank’s executive bank owned life insurance (BOLI) plan. A Form 8-K was filed on February 13, 2018 as a matter of public information. The Bank purchased and is the beneficiary of all BOLI life insurance policies taken out on key officers. The purpose of the life insurance policies is to supplement employee benefits the Bank provides to all employees. Due to the death of this employee, the Bank will be receiving the face amount of life insurance plus the net cash surrender value on all applicable policies. This event is expected to positively impact the Corporation’s net income by approximately $910,000 in the first quarter of 2018. |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements of ENB Financial Corp and its subsidiary, Ephrata National Bank, (collectively “the Corporation”) conform to U.S. generally accepted accounting principles (GAAP). The preparation of these statements requires that management make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Material estimates of the Corporation, including the allowance for loan losses, the fair market value of financial instruments, and deferred tax assets or liabilities, are evaluated regularly by management. Actual results could differ from the reported estimates given different conditions or assumptions. The accounting and reporting policies followed by the Corporation conform with U.S. GAAP and to general practices within the banking industry. All significant intercompany transactions have been eliminated in consolidation. The following is a summary of the more significant policies. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents are identified as cash and due from banks and include cash on hand, collection items, amounts due from banks, and interest bearing deposits in other banks with maturities of less than 90 days. |
Securities Available for Sale | Securities Available for Sale The Corporation classifies its entire portfolio of debt and equity securities as available for sale securities, which the Corporation reports at fair value. Any unrealized valuation gains or losses in the portfolio are reported as a separate component of stockholders' equity, net of deferred income taxes. The constant yield method is used for the amortization of premiums and the accretion of discounts for all of the Corporation’s securities with the exception of collateralized mortgage obligations (CMOs) and mortgage backed securities (MBS). The constant yield method maintains a stable yield on the instrument through its maturity. For CMOs and MBS, a two-step/proration method is used for amortization and accretion. The first step is a proration based on the current pay down. This component ensures that the book price stays level with par. The second step amortizes or accretes the remaining premium or discount to the calculated final amortization or accretion date based on the current three-month constant prepayment rates. Net gains or losses realized on sales or calls of securities are reported as gains or losses on security transactions during the year of sale, using the specific identification method. Other Than Temporary Impairment (“OTTI”) Management monitors all of the Corporation’s securities for OTTI on a monthly basis and determines whether any impairment should be recorded. A number of factors are considered in determining whether a security is impaired, including, but not limited to, the following: · Percentage of unrealized losses, · Period of time the security has had unrealized losses, · Type of security, · Maturity date of the instrument if a debt instrument, · The intent to sell the security or whether it is more likely than not that the Corporation would be required to sell the security before its anticipated recovery in market value, · Amount of projected credit losses based on current cash flow analysis, default and severity rates, and · Market dynamics impacting the market for and liquidity of the security. Management will more closely evaluate those securities that have unrealized losses of 10% or more and have had unrealized losses for more than twelve months. If management determines that the declines in value of the security are not temporary, or if management does not have the ability to hold the security until maturity, which is the case with equity securities, then management will record impairment on the security. For equity securities, typically the amount of impairment is the difference between the security’s book value and current fair market value determined by obtaining independent market pricing. For debt securities evaluated for impairment, management will determine what portion of the unrealized valuation loss is attributed to projected or known loss of principal, and what portion is attributed to market pricing not reflective of the true value of the security, based on current cash flow analysis. Management will generally record impairment equivalent to the projected or known loss of principal, known as the credit loss. The other portion of the fair market value loss is attributed to market factors and it is management’s opinion that these fair value losses are temporary and not permanent. All impairment is recorded as a loss on securities and is included in the Corporation’s Consolidated Statements of Income. |
Loans Held for Investment | Loans Held for Investment Loans receivable, that management has the intent and ability to hold for the foreseeable future, or until maturity or payoff, generally are reported at the outstanding principal balances, reduced by any charge-offs and net of any deferred loan origination fees or costs. Net loan origination fees and costs are deferred and recognized as an adjustment of yield over the contractual life of the loan. Interest accrues daily on outstanding loan balances. Generally, the accrual of interest discontinues when the ability to collect the loan becomes doubtful or when a loan becomes more than 90 days past due as to principal and interest. These loans are referred to as non-accrual loans. Management may elect to continue the accrual of interest based on the expectation of future payments and/or the sufficiency of the underlying collateral. |
Loans Held for Sale | Loans Held for Sale Loans originated and intended for sale on the secondary market are carried at the lower of cost or fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance by charges to income. In general, fixed-rate residential mortgage loans originated by the Corporation and held for sale are carried in the aggregate at the lower of cost or market. The Corporation originates loans for immediate sale with servicing retained and servicing released to several investors. However, the vast majority of the sold mortgages are sold to the Federal Home Loan Bank of Pittsburgh (FHLB) and Fannie Mae, with servicing retained. As a result, the Corporation has a growing portfolio of mortgages that are serviced on behalf of FHLB and Fannie Mae. In addition, the Corporation originates FHA, VA, and USDA mortgages which are originated for immediate sale to various investors on a service-released basis. |
Allowance for Loan Losses | Allowance for Loan Losses The allowance for loan losses is maintained at a level considered by management to be adequate to provide for known and inherent risks in the loan portfolio at the Consolidated Balance Sheets dates. The monthly provision or credit for loan losses is an expense or a reduction of expense which increases or decreases the allowance, and charge-offs, net of recoveries, decrease the allowance. The Corporation performs ongoing credit reviews of the loan portfolio and considers current economic conditions, historical loan loss experience, and other factors in determining the adequacy of the reserve balance. Loans determined to be uncollectible are charged to the allowance during the period in which such determination is made. In calculating the allowance, management will begin by compiling the balance of loans by credit quality for each loan segment in order that allocations can be made in aggregate based on historic losses and qualitative factors. Prior to calculating these aggregate allocations, management will individually evaluate commercial and commercial real estate loans for impairment. A loan is impaired when it is probable that a creditor will be unable to collect all principal and interest due according to the contractual terms of the loan agreement. All other loan types such as residential mortgages, home equity loans and lines of credit, and all other consumer loans, are not individually evaluated for impairment and are therefore allocated for in aggregate. These loans are considered to be large groups of smaller-balance homogenous loans and are measured for impairment collectively. Loans that experience insignificant payment delays, which are defined as 90 days or less, generally are not classified as impaired. Management determines the significance of payment delays on a case-by-case basis, taking into consideration all circumstances concerning the loan, the creditworthiness and payment history of the borrower, the length of the payment delay, and the amount of shortfall in relation to the principal and interest owed. For loans deemed to be impaired, management will provide a specific allocation. This loan balance is then subtracted from the total loan balances being allocated for in the aggregate. The remaining balances, along with the full loan balances for the other loan types are then multiplied by an adjusted loss ratio, which is the sum of both the historical loss ratio and a qualitative factor adjustment. Generally both the historical loss ratio and the qualitative factor adjustment will increase as the credit rating of the loan deteriorates. The credit ratings begin with unclassified loans, which represent the best internal credit rating, also referred to as a “pass” credit and then continue with declining grades of special mention, substandard, doubtful, and loss. Special mention loans are no longer deemed to be a “pass” credit and require additional management attention. They are essentially placed on “watched” status and attempts are made to improve the credit to an unclassified status. If the credit would deteriorate further it would then be a substandard credit, which for regulatory purposes, is deemed to be a classified loan. Doubtful and loss credit grades represent further credit deterioration and are also considered classified loans. For each loan type, all of these credit rating categories are broken out with adjusted loss ratios. The loan balance is then multiplied by the adjusted loss ratio to produce the required allowance. The allowances are totaled and added to any specific allocations on impaired loans to arrive at the total allowance for loan losses for the Corporation. Management tracks and assigns a historical loss percentage for each loan rating category within each loan type. A rolling three-year historical loss ratio, calculated on a quarterly basis, with a 60%, 30%, and 10% weighting for the past three years is used. In this manner the historical loss percentage is heavily weighted to the current loss environment, but has sufficient weighting assigned to prior periods to avoid unnecessary volatile fluctuations based on just one period’s data. Management currently utilizes nine qualitative factors that are adjusted based on changes in the lending environment and economic conditions. The qualitative factors include the following: · levels of and trends in delinquencies, non-accruals, and charge-offs, · trends in the nature and volume of the loan portfolio, · changes in lending policies and procedures, · experience, ability, and depth of lending personnel and management oversight, · national and local economic trends, · concentrations of credit, · external factors such as competition, legal, and regulatory requirements, · changes in the quality of loan review and Board oversight, · changes in the value of underlying collateral. The number of qualitative factors can change. Factors can be added for new risks or taken away if the risk no longer applies. Each loan type will have its own risk profile and management will evaluate and adjust each qualitative factor for each loan type quarterly, if necessary. For example, if one area of the loan portfolio is experiencing sharp increases in growth, it is likely the qualitative factor for trends in the loan portfolio would be increased for that loan type. As levels of delinquencies and non-accrual loans decline for any segment of the loan portfolio it is likely that factor would be reduced. In terms of the Corporation’s loan portfolio, the commercial and industrial loans and commercial real estate loans are deemed to have more risk than the consumer real estate loans and other consumer loans in the portfolio. The commercial loans not secured by real estate are highly dependent on their financial condition and therefore are more dependent on economic conditions. The commercial loans secured by real estate are also dependent on economic conditions but generally have stronger forms of collateral. More recently, commercial real estate has been negatively impacted by devaluation so these commercial loans carry a higher qualitative factor for changes in the value of collateral. The commercial loans and commercial real estate loans have historically been responsible for the majority of the Corporation’s delinquencies, non-accrual loans, and charge-offs, so both of these categories carry higher qualitative factors than consumer real estate loans and other consumer loans. Of particular focus currently is the dairy component of the Corporation’s agricultural loans. The decline in milk prices continues to put financial pressure on these operations and management has increased qualitative factors over the year to reflect this. The Corporation has historically experienced very low levels of consumer real estate and consumer loan charge-offs so these qualitative factors are set lower than the commercial real estate and commercial and industrial loans. |
Impaired and Non-Accrual Loans | Impaired and Non-Accrual Loans The definition of “impaired loans” is not the same as the definition of “non-accrual loans,” although the two categories overlap. Generally, a non-accrual loan will always be considered impaired due to payment delinquency or uncertain collection, but there are cases where an impaired loan is not considered non-accrual. The primary factors considered by management in determining impairment include payment status and collateral value, but could also include debt service coverage, financial health of the business, and other external factors that could impact the ability of the borrower to fully repay the loan. The amount of impairment for these types of loans is determined by the difference between the present value of the expected cash flows related to the loan using the original interest rate and its recorded value or, as a practical expedient in the case of collateral-dependent loans, the difference between the fair value of the collateral and the recorded amount of the loan. When foreclosure is probable, impairment is measured based on the fair value of the collateral on a discounted basis, relative to the loan amount. Management will place a business or commercial loan on non-accrual status when it is determined that the loan is impaired, or when the loan is 90 days past due with a history of prolonged periods of delinquency. These customers will generally be placed on non-accrual status at the end of each quarter. Consumer loans over 90 days delinquent are generally charged off or, in the case of larger residential real estate loans, they would be placed on non-accrual status as the Corporation seeks to bring the customer current or pursue foreclosure options. When the borrower is on non-accrual, the Corporation will reverse any accrued interest on the books and will discontinue recognizing any interest income until the borrower is placed back on accrual status or fully pays off the loan balance plus any accrued interest. Payments received by the customer while the loan is on non-accrual are fully applied against principal. The Corporation maintains records of the full amount of interest that is owed by the borrower. A non-accrual loan will generally only be placed back on accrual status after the borrower has become current and has demonstrated six consecutive months of non-delinquency. |
Allowance for Off-Balance Sheet Extensions of Credit | Allowance for Off-Balance Sheet Extensions of Credit The Corporation maintains an allowance for off-balance sheet extensions of credit, which would include any unadvanced amount on lines of credit and any letters of credit provided to borrowers. The allowance is carried as a liability and is included in other liabilities on the Corporation’s Consolidated Balance Sheets. The liability was $317,000 as of December 31, 2017, and $345,000 as of December 31, 2016. As the unadvanced portion of lines of credit increases, this provision will increase. Management follows the same methodology as the allowance for loan losses when calculating the allowance for off-balance sheet extensions of credit, with the exception of multiplying the unadvanced total by a high/low balance variance to arrive at the expected unadvanced portion that could be drawn upon at any time, or the amount at risk. The unadvanced amounts for each loan segment are broken down by credit classification. A historical loss ratio and qualitative factor are calculated for each credit classification by loan type. The historical loss ratio and qualitative factor are combined to produce an adjusted loss ratio, which is multiplied by the amount at risk for each credit classification within each loan segment to arrive at an allocation. The allocations are summed to arrive at the total allowance for off-balance sheet extensions of credit. |
Other Real Estate Owned (OREO) | Other Real Estate Owned (OREO) OREO represents properties acquired through customer loan defaults. These properties are recorded at the lower of cost or fair value less projected disposal costs at acquisition date. Fair value is determined by current appraisals. Costs associated with holding OREO are charged to operational expense. OREO is a component of other assets on the Corporation’s Consolidated Balance Sheets. The Corporation had no OREO as of December 31, 2017, or December 31, 2016. |
Mortgage Servicing Rights (MSRs) | Mortgage Servicing Rights (MSRs) The Corporation has agreements for the express purpose of selling residential mortgage loans on the secondary market, referred to as mortgage servicing rights. The Corporation maintains all servicing rights for loans currently sold through FHLB and Fannie Mae. The Corporation had $661,000 of MSRs as of December 31, 2017, compared to $410,000 as of December 31, 2016. Management expects MSRs to continue to grow as a result of the expanded mortgage program. The value of newly originated MSRs is determined by estimating the life of the mortgage and how long the Corporation will have access to the servicing income stream to determine the relative fair value. The Corporation utilizes a third party that calculates the MSR valuation on a quarterly basis. A longer estimated life would increase the MSR while a shorter estimated life would decrease the value of the asset. Management records the MSR value based on this reporting. Ultimately the value of the MSRs would be at what level a willing buyer and seller would exchange the MSRs. MSRs are amortized in proportion to the estimated servicing income over the estimated life of the servicing portfolio. Impairment is evaluated based on the fair value of the rights, portfolio interest rates, and prepayment characteristics. MSRs are a component of other assets on the Consolidated Balance Sheets. |
Premises and Equipment | Premises and Equipment Land is carried at cost. Premises and equipment are carried at cost, less accumulated depreciation. Book depreciation is computed using straight-line methods over the estimated useful lives of generally fifteen to thirty-nine years for buildings and improvements and four to ten years for furniture and equipment. Maintenance and repairs of property and equipment are charged to operational expense as incurred, while major improvements are capitalized. Net gains or losses upon disposition are included in other income or operational expense, as applicable. |
Transfer of Assets | Transfer of Assets Transfers of financial assets 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. |
Bank-Owned Life Insurance (BOLI) | Bank-Owned Life Insurance (BOLI) BOLI is carried by the Corporation at the cash surrender value of the underlying policies. Income earned on the policies is based on any increase in cash surrender value less the cost of the insurance, which varies according to age and health of the insured. The life insurance policies owned by the Corporation had a cash surrender value of $27,814,000 and $24,687,000 as of December 31, 2017, and 2016, respectively. The increase in BOLI cash surrender value was primarily due to $2.5 million of additional policies being purchased in December of 2017, with the remainder of the increase attributable to normal appreciation of existing policies as a result of returns exceeding expenses. |
Advertising Costs | Advertising Costs The Corporation expenses advertising costs as incurred. Advertising costs for the years ended December 31, 2017, 2016, and 2015, were $698,000, $614,000, and $552,000, respectively. |
Income Taxes | Income Taxes An asset and liability approach is followed for financial accounting and reporting for income taxes. Accordingly, a net deferred tax asset or liability is recorded in the consolidated financial statements for the tax effects of temporary differences, which are items of income and expense reported in different periods for income tax and financial reporting purposes. Deferred tax expense is determined by the change in the assets or liabilities related to deferred income taxes. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. |
Earnings per Share | Earnings per Share The Corporation currently maintains a simple capital structure with no stock option plans that would have a dilutive effect on earnings per share. Earnings per share are calculated by dividing net income by the weighted-average number of shares outstanding for the periods. |
Comprehensive Income | Comprehensive Income The Corporation is required to present comprehensive income in a full set of general-purpose consolidated financial statements for all periods presented. Other comprehensive income (loss) consists of unrealized holding gains and losses on the available for sale securities portfolio. |
Segment Disclosure | Segment Disclosure U.S. generally accepted accounting principles establish standards for the manner in which public business enterprises report information about segments in the annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports issued to shareholders. It also establishes standards for related disclosures regarding financial products and services, geographic areas, and major customers. The Corporation has only one operating segment consisting of its banking and fiduciary operations. |
Pension Plans | Pension Plans The Corporation provides an optional 401(k) plan, in which employees may elect to defer pre-tax salary dollars, subject to the maximum annual Internal Revenue Service contribution amounts. The Corporation will match 50% of employee contributions up to 5%, limiting the match to 2.5%. As part of the 401(k) Plan, the Corporation also has a noncontributory Profit Sharing Plan which covers substantially all employees. The Corporation provides a 3% Non-Elective contribution to all employees and contributes a 2% Elective Contribution to all employees aged 21 or older who work 1,000 or greater hours in a calendar year and have completed at least one full year of employment. |
Trust Assets and Income | Trust Assets and Income Assets held by ENB’s Money Management Group in a fiduciary or agency capacity for customers are not included in the Corporation’s Consolidated Balance Sheets since these items are not assets of the Corporation. In accordance with banking industry practice, trust income is recognized on a cash basis; as such income does not differ significantly from amounts that would be recognized on an accrual basis. Trust income is reported in the Corporation’s Consolidated Statements of Income under other income. |
Reclassification of Comparative Amounts | Reclassification of Comparative Amounts Certain comparative amounts for the prior year have been reclassified to conform to current-year classifications. Such reclassifications had no material effect on net income or stockholders’ equity. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In March 2016, the FASB issued ASU 2016-04, Liabilities – In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606). Revenue from Contracts with Customers (Topic 606), Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606). Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) In October 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) In December 2016, the FASB issued ASU 2016-20 , Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers Guarantees In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment after December 15, 2021. This Update is not expected to have a significant impact on the Corporation’s financial statements. In February 2017, the FASB issued ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20). beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. This Update is not expected to have a significant impact on the Corporation’s financial statements. In February 2017, the FASB issued ASU 2017-06 , Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), and Health and Welfare Benefit Plans (Topic 965) This Update relates primarily to the reporting by an employee benefit plan for its interest in a master trust, which is a trust for which a regulated financial institution serves as a trustee or custodian and in which assets of more than one plan sponsored by a single employer or by a group of employers under common control are held. For each master trust in which a plan holds an interest, the amendments in this Update require a plan's interest in that master trust and any change in that interest to be presented in separate line items in the statement of net assets available for benefits and in the statement of changes in net assets available for benefits, respectively. The amendments in this Update remove the requirement to disclose the percentage interest in the master trust for plans with divided interests and require that all plans disclose the dollar amount of their interest in each of those general types of investments, which supplements the existing requirement to disclose the master trusts balances in each general type of investments. There are also increased disclosure requirements for investments in master In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715) In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20). In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718) available for issuance. The amendments in this Update should be applied prospectively to an award modified on or after the adoption date. This Update is not expected to have a significant impact on the Corporation’s financial statements. In May 2017, the FASB issued ASU 2017-10, Service Concession Arrangements (Topic 853) Revenue from Contracts with Customers (Topic 606)) Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , deferred the effective date of Update 2014-09 by one year. This Update is not expected to have a significant impact on the Corporation’s financial statements. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), and Derivative and Hedging (Topic 815) Debt—Debt with Conversion and Other Options amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. This Update is not expected to have a significant impact on the Corporation’s financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 850) an entity adopts the amendments in this Update. The amended presentation and disclosure guidance is required only prospectively. This Update is not expected to have a significant impact on the Corporation’s financial statements. In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842) date and transition requirements for the amendments are the same as the effective date and transition requirements in ASU 2016-02. This Update is not expected to have a significant impact on the Corporation’s financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) |
SECURITIES AVAILABLE FOR SALE (
SECURITIES AVAILABLE FOR SALE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of amortized cost and fair value of securities | The amortized cost and fair value of securities held at December 31, 2017, and 2016, are as follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value $ $ $ $ December 31, 2017 U.S. government agencies 35,101 — (749 ) 34,352 U.S. agency mortgage-backed securities 52,981 8 (916 ) 52,073 U.S. agency collateralized mortgage obligations 55,493 46 (898 ) 54,641 Corporate bonds 61,334 24 (589 ) 60,769 Obligations of states and political subdivisions 114,047 243 (2,047 ) 112,243 Total debt securities 318,956 321 (5,199 ) 314,078 Marketable equity securities 5,547 36 — 5,583 Total securities available for sale 324,503 357 (5,199 ) 319,661 December 31, 2016 U.S. government agencies 33,124 — (863 ) 32,261 U.S. agency mortgage-backed securities 56,826 22 (979 ) 55,869 U.S. agency collateralized mortgage obligations 38,737 41 (842 ) 37,936 Corporate bonds 52,928 8 (845 ) 52,091 Obligations of states and political subdivisions 128,428 346 (4,344 ) 124,430 Total debt securities 310,043 417 (7,873 ) 302,587 Marketable equity securities 5,469 55 — 5,524 Total securities available for sale 315,512 472 (7,873 ) 308,111 |
Schedule of contractual maturity of debt securities | The amortized cost and fair value of debt securities available for sale at December 31, 2017, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities due to certain call or prepayment provisions. CONTRACTUAL MATURITY OF DEBT SECURITIES (DOLLARS IN THOUSANDS) Amortized Cost Fair Value $ $ Due in one year or less 18,451 18,223 Due after one year through five years 122,859 121,231 Due after five years through ten years 68,321 67,020 Due after ten years 109,325 107,604 Total debt securities 318,956 314,078 |
Schedule of proceeds and gains and losses on securities available for sale | Proceeds from active sales of debt securities available for sale, along with the associated gross realized gains and gross realized losses, are shown below. Realized gains and losses are computed on the basis of specific identification. PROCEEDS FROM SALES OF SECURITIES AVAILABLE FOR SALE (DOLLARS IN THOUSANDS) Securities Available for Sale 2017 2016 2015 $ $ $ Proceeds from sales 80,642 163,085 154,384 Gross realized gains 946 2,457 2,934 Gross realized losses 271 87 94 |
Schedule of securities in an unrealized loss position (temporary impairment) | Information pertaining to securities with gross unrealized losses at December 31, 2017, and December 31, 2016, aggregated by investment category and length of time that individual securities have been in a continuous loss position follows: TEMPORARY IMPAIRMENTS OF SECURITIES (DOLLARS IN THOUSANDS) Less than 12 months More than 12 months Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses $ $ $ $ $ $ As of December 31, 2017 U.S. government agencies 9,941 (59 ) 24,411 (690 ) 34,352 (749 ) U.S. agency mortgage-backed securities 10,326 (78 ) 37,123 (838 ) 47,449 (916 ) U.S. agency collateralized mortgage obligations 29,551 (280 ) 20,980 (618 ) 50,531 (898 ) Corporate bonds 38,543 (282 ) 15,019 (307 ) 53,562 (589 ) Obligations of states & political subdivisions 15,188 (142 ) 68,278 (1,905 ) 83,466 (2,047 ) Total temporarily impaired securities 103,549 (841 ) 165,811 (4,358 ) 269,360 (5,199 ) As of December 31, 2016 U.S. government agencies 32,261 (863 ) — — 32,261 (863 ) U.S. agency mortgage-backed securities 47,418 (856 ) 3,989 (123 ) 51,407 (979 ) U.S. agency collateralized mortgage obligations 33,206 (842 ) — — 33,206 (842 ) Corporate bonds 45,335 (830 ) 2,002 (15 ) 47,337 (845 ) Obligations of states & political subdivisions 101,229 (4,063 ) 8,041 (281 ) 109,270 (4,344 ) Total temporarily impaired securities 259,449 (7,454 ) 14,032 (419 ) 273,481 (7,873 ) |
LOANS AND ALLOWANCE FOR LOAN 33
LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Schedule of loan portfolio by category | The following table presents the Corporation’s loan portfolio by category of loans for 2017 and 2016. LOAN PORTFOLIO (DOLLARS IN THOUSANDS) December 31, 2017 2016 $ $ Commercial real estate Commercial mortgages 90,072 86,434 Agriculture mortgages 152,050 163,753 Construction 18,670 24,880 Total commercial real estate 260,792 275,067 Consumer real estate (a) 1-4 family residential mortgages 176,971 150,253 Home equity loans 11,181 10,391 Home equity lines of credit 61,104 53,127 Total consumer real estate 249,256 213,771 Commercial and industrial Commercial and industrial 41,426 42,471 Tax-free loans 20,722 13,091 Agriculture loans 18,794 21,630 Total commercial and industrial 80,942 77,192 Consumer 5,320 4,537 Gross loans prior to deferred costs and allowance for loan losses 596,310 570,567 Deferred loan costs, net 1,243 1,000 Allowance for loan losses (8,240 ) (7,562 ) Total net loans 589,313 564,005 (a) Real estate loans serviced for others, which are not included in the Consolidated Balance Sheets, totaled $98,262,000 and $66,767,000 as of December 31, 2017, and 2016, respectively. |
Schedule of commercial and consumer credit exposure | COMMERCIAL CREDIT EXPOSURE CREDIT RISK PROFILE BY INTERNALLY ASSIGNED GRADE (DOLLARS IN THOUSANDS) Commercial Commercial Agriculture and Tax-free Agriculture December 31, 2017 Mortgages Mortgages Construction Industrial Loans Loans Total $ $ $ $ $ $ $ Grade: Pass 86,259 143,037 17,670 37,947 20,514 17,798 323,225 Special Mention 160 3,873 — 1,015 208 270 5,526 Substandard 3,653 5,140 1,000 2,464 — 726 12,983 Doubtful — — — — — — — Loss — — — — — — — Total 90,072 152,050 18,670 41,426 20,722 18,794 341,734 COMMERCIAL CREDIT EXPOSURE CREDIT RISK PROFILE BY INTERNALLY ASSIGNED GRADE (DOLLARS IN THOUSANDS) Commercial Commercial Agriculture and Tax-free Agriculture December 31, 2016 Mortgages Mortgages Construction Industrial Loans Loans Total $ $ $ $ $ $ $ Grade: Pass 78,367 155,820 23,880 36,887 13,091 20,245 328,290 Special Mention 4,860 5,360 — 1,955 — 653 12,828 Substandard 3,207 2,573 1,000 3,629 — 732 11,141 Doubtful — — — — — — — Loss — — — — — — — Total 86,434 163,753 24,880 42,471 13,091 21,630 352,259 CONSUMER CREDIT EXPOSURE CREDIT RISK PROFILE BY PAYMENT PERFORMANCE (DOLLARS IN THOUSANDS) 1-4 Family Home Equity December 31, 2017 Residential Home Equity Lines of Mortgages Loans Credit Consumer Total Payment performance: $ $ $ $ $ Performing 176,576 11,181 61,074 5,305 254,136 Non-performing 395 — 30 15 440 Total 176,971 11,181 61,104 5,320 254,576 CONSUMER CREDIT EXPOSURE CREDIT RISK PROFILE BY PAYMENT PERFORMANCE (DOLLARS IN THOUSANDS) 1-4 Family Home Equity December 31, 2016 Residential Home Equity Lines of Mortgages Loans Credit Consumer Total Payment performance: $ $ $ $ $ Performing 149,873 10,388 53,127 4,536 217,924 Non-performing 380 3 — 1 384 Total 150,253 10,391 53,127 4,537 218,308 |
Schedule of aging of loans receivable | The following tables present an age analysis of the Corporation’s past due loans, segregated by loan portfolio class, as of December 31, 2017 and 2016: AGING OF LOANS RECEIVABLE (DOLLARS IN THOUSANDS) Loans December 31, 2017 Greater Receivable > 30-59 Days 60-89 Days than 90 Total Past Total Loans 90 Days and Past Due Past Due Days Due Current Receivable Accruing $ $ $ $ $ $ $ Commercial real estate Commercial mortgages — — 372 372 89,700 90,072 — Agriculture mortgages — — — — 152,050 152,050 — Construction — — — — 18,670 18,670 — Consumer real estate 1-4 family residential mortgages 533 248 395 1,176 175,795 176,971 395 Home equity loans 40 — — 40 11,141 11,181 — Home equity lines of credit — — 30 30 61,074 61,104 30 Commercial and industrial Commercial and industrial 65 109 — 174 41,252 41,426 — Tax-free loans — — — — 20,722 20,722 — Agriculture loans — — — — 18,794 18,794 — Consumer 8 3 15 26 5,294 5,320 15 Total 646 360 812 1,818 594,492 596,310 440 AGING OF LOANS RECEIVABLE (DOLLARS IN THOUSANDS) Loans December 31, 2016 Greater Receivable > 30-59 Days 60-89 Days than 90 Total Past Total Loans 90 Days and Past Due Past Due Days Due Current Receivable Accruing $ $ $ $ $ $ $ Commercial real estate Commercial mortgages — 419 417 836 85,598 86,434 — Agriculture mortgages 165 — — 165 163,588 163,753 — Construction — — — — 24,880 24,880 — Consumer real estate 1-4 family residential mortgages 565 662 380 1,607 148,639 150,253 380 Home equity loans 178 — 3 181 10,307 10,391 3 Home equity lines of credit — — — — 53,037 53,127 — Commercial and industrial Commercial and industrial 266 — 75 341 42,130 42,471 — Tax-free loans — — — — 13,091 13,091 — Agriculture loans — — — — 21,630 21,630 — Consumer 16 4 1 21 4,516 4,537 1 Total 1,190 1,085 876 3,151 567,416 570,567 384 |
Schedule of nonaccrual loans by class | The following table presents non-accrual loans by classes of the loan portfolio as of December 31: NON-ACCRUAL LOANS BY LOAN CLASS (DOLLARS IN THOUSANDS) 2017 2016 $ $ Commercial real estate Commercial mortgages 393 646 Agriculture mortgages — — Construction — — Consumer real estate 1-4 family residential mortgages — — Home equity loans — — Home equity lines of credit — — Commercial and industrial Commercial and industrial — 75 Tax-free loans — — Agriculture loans — — Consumer — — Total 393 721 |
Schedule of impaired loans | The following table summarizes information in regards to impaired loans by loan portfolio class as of December 31, 2017: IMPAIRED LOAN ANALYSIS (DOLLARS IN THOUSANDS) Recorded Unpaid Related Average Interest $ $ $ $ $ With no related allowance recorded: Commercial real estate Commercial mortgages 393 690 — 585 4 Agriculture mortgages 1,174 1,174 — 1,210 54 Construction — — — — — Total commercial real estate 1,567 1,864 — 1,795 58 Commercial and industrial Commercial and industrial — — — — — Tax-free loans — — — — — Agriculture loans 245 245 — 163 7 Total commercial and industrial 245 245 — 163 7 Total with no related allowance 1,812 2,109 — 1,958 65 With an allowance recorded: Commercial real estate Commercial mortgages — — — — — Agriculture mortgages — — — — — Construction — — — — — Total commercial real estate — — — — — Commercial and industrial Commercial and industrial — — — — — Tax-free loans — — — — — Agriculture loans — — — — — Total commercial and industrial — — — — — Total with a related allowance — — — — — Total by loan class: Commercial real estate Commercial mortgages 393 690 — 585 4 Agriculture mortgages 1,174 1,174 — 1,210 54 Construction — — — — — Total commercial real estate 1,567 1,864 — 1,795 58 Commercial and industrial Commercial and industrial — — — — — Tax-free loans — — — — — Agriculture loans 245 245 — 163 7 Total commercial and industrial 245 245 — 163 7 Total 1,812 2,109 — 1,958 65 The following table summarizes information in regards to impaired loans by loan portfolio class as of December 31, 2016: IMPAIRED LOAN ANALYSIS (DOLLARS IN THOUSANDS) Recorded Unpaid Related Average Interest $ $ $ $ $ With no related allowance recorded: Commercial real estate Commercial mortgages 646 743 — 768 2 Agriculture mortgages 1,248 1,248 — 1,285 55 Construction — — — — — Total commercial real estate 1,894 1,991 — 2,053 57 Commercial and industrial Commercial and industrial 75 75 — 76 — Tax-free loans — — — — — Agriculture loans — — — — — Total commercial and industrial 75 75 — 76 — Total with no related allowance 1,969 2,066 — 2,129 57 With an allowance recorded: Commercial real estate Commercial mortgages — — — — — Agriculture mortgages — — — — — Construction — — — — — Total commercial real estate — — — — — Commercial and industrial Commercial and industrial — — — — — Tax-free loans — — — — — Agriculture loans — — — — — Total commercial and industrial — — — — — Total with a related allowance — — — — — Total by loan class: Commercial real estate Commercial mortgages 646 743 — 768 2 Agriculture mortgages 1,248 1,248 — 1,285 55 Construction — — — — — Total commercial real estate 1,894 1,991 — 2,053 57 Commercial and industrial Commercial and industrial 75 75 — 76 — Tax-free loans — — — — — Agriculture loans — — — — — Total commercial and industrial 75 75 — 76 — Total 1,969 2,066 — 2,129 57 The following table summarizes information in regards to impaired loans by loan portfolio class as of December 31, 2015: IMPAIRED LOAN ANALYSIS (DOLLARS IN THOUSANDS) Recorded Unpaid Related Average Interest $ $ $ $ $ With no related allowance recorded: Commercial real estate Commercial mortgages 380 952 — 544 — Agriculture mortgages 1,325 1,325 — 1,359 83 Construction — — — — — Total commercial real estate 1,705 2,277 — 1,903 83 Commercial and industrial Commercial and industrial — 49 — 54 3 Tax-free loans — — — — — Agriculture loans — — — — — Total commercial and industrial — 49 — 54 3 Total with no related allowance 1,705 2,326 — 1,957 86 With an allowance recorded: Commercial real estate Commercial mortgages — — — — — Agriculture mortgages — — — — — Construction — — — — — Total commercial real estate — — — — — Commercial and industrial Commercial and industrial — — — — — Tax-free loans — — — — — Agriculture loans — — — — — Total commercial and industrial — — — — — Total with a related allowance — — — — — Total by loan class: Commercial real estate Commercial mortgages 380 952 — 544 — Agriculture mortgages 1,325 1,325 — 1,359 83 Construction — — — — — Total commercial real estate 1,705 2,277 — 1,903 83 Commercial and industrial Commercial and industrial — 49 — 54 3 Tax-free loans — — — — — Agriculture loans — — — — — Total commercial and industrial — 49 — 54 3 Total 1,705 2,326 — 1,957 86 |
Schedule of allowance for credit losses | The following table details activity in the allowance for loan losses by portfolio segment for the year ended December 31, 2017: ALLOWANCE FOR CREDIT LOSSES AND RECORDED INVESTMENT IN LOANS RECEIVABLE (DOLLARS IN THOUSANDS) Commercial Commercial Consumer and Real Estate Real Estate Industrial Consumer Unallocated Total $ $ $ $ $ $ Allowance for credit losses: Beginning balance 3,795 1,652 1,552 82 481 7,562 Charge-offs (200 ) — (89 ) (28 ) — (317 ) Recoveries — 20 24 11 — 55 Provision (credit) 268 380 342 33 (83 ) 940 Ending balance 3,863 2,052 1,829 98 398 8,240 Ending balance: individually evaluated for impairment — — — — — — Ending balance: collectively evaluated for impairment 3,863 2,052 1,829 98 398 8,240 Loans receivable: Ending balance 260,792 249,256 80,942 5,320 596,310 Ending balance: individually evaluated for impairment 1,567 — 245 — 1,812 Ending balance: collectively evaluated for impairment 259,225 249,256 80,697 5,320 594,498 The following table details activity in the allowance for loan losses by portfolio segment for the year ended December 31, 2016: ALLOWANCE FOR CREDIT LOSSES AND RECORDED INVESTMENT IN LOANS RECEIVABLE (DOLLARS IN THOUSANDS) Commercial Commercial Consumer and Real Estate Real Estate Industrial Consumer Unallocated Total $ $ $ $ $ $ Allowance for credit losses: Beginning balance 3,831 1,403 1,314 62 468 7,078 Charge-offs — — (23 ) (31 ) — (54 ) Recoveries — 10 193 10 — 213 Provision (credit) (36 ) 239 68 41 13 325 Ending balance 3,795 1,652 1,552 82 481 7,562 Ending balance: individually evaluated for impairment — — — — — — Ending balance: collectively evaluated for impairment 3,795 1,652 1,552 82 481 7,562 Loans receivable: Ending balance 275,067 213,771 77,192 4,537 570,567 Ending balance: individually evaluated for impairment 1,894 — 75 — 1,969 Ending balance: collectively evaluated for impairment 273,173 213,771 77,117 4,537 568,598 The following table details activity in the allowance for loan losses by portfolio segment for the year ended December 31, 2015: ALLOWANCE FOR CREDIT LOSSES AND RECORDED INVESTMENT IN LOANS RECEIVABLE (DOLLARS IN THOUSANDS) Commercial Commercial Consumer and Real Estate Real Estate Industrial Consumer Unallocated Total $ $ $ $ $ $ Allowance for credit losses: Beginning balance 3,834 1,367 1,301 66 573 7,141 Charge-offs (272 ) (28 ) (44 ) (18 ) — (362 ) Recoveries 34 — 112 3 — 149 Provision (credit) 235 64 (55 ) 11 (105 ) 150 Ending balance 3,831 1,403 1,314 62 468 7,078 Ending balance: individually evaluated for impairment — — — — — — Ending balance: collectively evaluated for impairment 3,831 1,403 1,314 62 468 7,078 Loans receivable: Ending balance 260,900 181,200 73,577 3,892 519,569 Ending balance: individually evaluated for impairment 1,705 — — — 1,705 Ending balance: collectively evaluated for impairment 259,195 181,200 73,577 3,892 517,864 |
PREMISES AND EQUIPMENT (Tables)
PREMISES AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Premises and Equipment | The major classes of the Corporation’s premises and equipment and accumulated depreciation are as follows: December 31, 2017 2016 $ $ Land 5,043 3,787 Buildings and improvements 26,424 26,307 Furniture and equipment 13,510 12,970 Construction in process 2,773 180 Total 47,750 43,244 Less accumulated depreciation (22,063 ) (20,676 ) Premises and equipment 25,687 22,568 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deposits: | |
Schedule of Deposit Liabilities | Deposits by major classifications are summarized as follows: December 31, 2017 2016 $ $ Non-interest bearing demand 314,917 280,543 Interest-bearing demand 20,230 20,108 NOW accounts 86,758 85,540 Money market deposit accounts 105,994 93,943 Savings accounts 189,169 175,753 Time deposits under $250,000 143,073 151,988 Time deposits of $250,000 or more 6,336 9,616 Total deposits 866,477 817,491 |
Maturities of time deposits | At December 31, 2017, the scheduled maturities of time deposits are as follows: 2018 64,234 2019 29,406 2020 22,479 2021 22,355 2022 10,935 Total 149,409 |
SHORT TERM BORROWINGS (Tables)
SHORT TERM BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Short-term Debt [Abstract] | |
Schedule of Short-term borrowings | A summary of short-term borrowings is as follows for the years ended December 31, 2017, 2016, and 2015: 2017 2016 2015 $ $ $ Total short-term borrowings outstanding at year end — 8,329 8,736 Average interest rate at year end — 0.65 0.29 Maximum outstanding at any month end 28,674 16,532 13,666 Average amount outstanding for the year 7,331 11,087 8,720 Weighted-average interest rate for the year 0.75% 0.49% 0.34% |
OTHER BORROWED FUNDS (Tables)
OTHER BORROWED FUNDS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Long-term Debt, Unclassified [Abstract] | |
Schedule of Federal Home Loan Bank Advances by Maturity | Maturities of other borrowings at December 31, 2017, and 2016, are summarized as follows: December 31, 2017 2016 Weighted- Weighted- Average Average Amount Rate Amount Rate $ % $ % FHLB fixed rate loans 2017 — — 15,000 1.26 2018 14,625 1.25 11,650 1.22 2019 12,237 1.53 9,267 1.58 2020 10,677 1.59 10,677 1.59 2021 14,505 1.72 9,443 1.59 2022 13,806 1.72 5,220 1.26 Total other borrowings 65,850 1.56 61,257 1.41 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Reconciliation | Federal income tax expense as reported differs from the amount computed by applying the statutory Federal income tax rate to income before taxes. A reconciliation of the differences by amount and percent is as follows: FEDERAL INCOME TAX SUMMARY (DOLLARS IN THOUSANDS) Year Ended December 31, 2017 2016 2015 $ % $ % $ % Income tax at statutory rate 2,952 34.0 3,028 34.0 2,811 34.0 Tax-exempt interest income (1,620 ) (18.7 ) (1,478 ) (16.6 ) (1,270 ) (15.4 ) Non-deductible interest expense 72 0.8 52 0.6 39 0.5 Bank-owned life insurance (234 ) (2.7 ) (267 ) (3.0 ) (247 ) (3.0 ) Other 37 0.4 18 0.2 25 0.3 Change in corporate tax rate 1,131 13.1 — — — — Income tax expense 2,338 26.9 1,353 15.2 1,358 16.4 |
Schedule of Components of Income Tax Expense | Significant components of income tax expense are as follows: (DOLLARS IN THOUSANDS) Year Ended December 31, 2017 2016 2015 $ $ $ Current tax expense 842 1,734 1,095 Deferred tax expense (benefit) 365 (381 ) 275 Valuation allowance adjustment — — (12 ) Change in corporate tax rate 1,131 — — Income tax expense 2,338 1,353 1,358 |
Schedule of Deferred Tax Assets and Liabilities | Components of the Corporation's net deferred tax position are as follows: (DOLLARS IN THOUSANDS) December 31, 2017 2016 2015 $ $ $ Deferred tax assets Allowance for loan losses 2,802 2,571 2,406 Net unrealized holding losses on securities available for sale 1,016 2,516 130 Deferred compensation reserve 44 95 148 Capital loss carryforward — — 13 Tax credit carryforward 1,158 1,043 1,085 Allowance for off-balance sheet extensions of credit 108 117 155 Interest on non-accrual loans 174 166 155 Other 11 7 7 Total deferred tax assets 5,313 6,515 4,099 Valuation allowance — — (13 ) Net deferred taxes 5,313 6,515 4,086 Deferred tax liabilities Premises and equipment (2,670 ) (1,497 ) (1,852 ) Discount on investment securities — — (1 ) Other (161 ) (41 ) (24 ) Total deferred tax liabilities (2,831 ) (1,538 ) (1,877 ) Net deferred tax assets 2,482 4,977 2,209 |
REGULATORY MATTERS AND RESTRI39
REGULATORY MATTERS AND RESTRICTIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Regulatory Capital Requirements [Abstract] | |
Schedule of Regulatory Capital Requirements | The following chart details the Corporation’s and the Bank’s capital levels as of December 31, 2017 and December 31, 2016, compared to regulatory levels. CAPITAL LEVELS To Be Well (DOLLARS IN THOUSANDS) Capitalized Under For Capital Prompt Corrective Actual Adequacy Purposes Action Provision $ % $ % $ % As of December 31, 2017 Total Capital to Risk-Weighted Assets Consolidated 111,512 15.0 59,525 8.0 74,406 10.0 Bank 109,961 14.8 59,502 8.0 74,378 10.0 Tier I Capital to Risk-Weighted Assets Consolidated 102,955 13.8 44,644 6.0 59,525 8.0 Bank 101,404 13.6 44,627 6.0 59,502 8.0 Common Equity Tier I Capital to Risk-Weighted Assets Consolidated 102,955 13.8 33,483 4.5 48,364 6.5 Bank 101,404 13.6 33,470 4.5 48,346 6.5 Tier I Capital to Average Assets Consolidated 102,955 10.1 40,971 4.0 51,214 5.0 Bank 101,404 9.9 40,971 4.0 51,214 5.0 As of December 31, 2016 Total Capital to Risk-Weighted Assets Consolidated 107,732 15.2 56,635 8.0 70,794 10.0 Bank 106,084 15.0 56,634 8.0 70,793 10.0 Tier I Capital to Risk-Weighted Assets Consolidated 99,824 14.1 42,476 6.0 56,635 8.0 Bank 98,176 13.9 42,476 6.0 56,634 8.0 Common Equity Tier I Capital to Risk-Weighted Assets Consolidated 99,824 14.1 31,857 4.5 46,016 6.5 Bank 98,176 13.9 31,857 4.5 46,015 6.5 Tier I Capital to Average Assets Consolidated 99,824 10.2 39,092 4.0 48,865 5.0 Bank 98,176 10.1 39,059 4.0 48,824 5.0 |
TRANSACTIONS WITH DIRECTORS A40
TRANSACTIONS WITH DIRECTORS AND OFFICERS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Loans | The following table presents activity in the amounts due from directors, executive officers, immediate family, and affiliated companies. These transactions are made on the same terms and conditions, including interest rates and collateral requirements as those prevailing at the time for comparable transactions with others. An analysis of the activity with respect to such aggregate loans to related parties is shown below. LOANS TO INSIDERS (DOLLARS IN THOUSANDS) Actual $ Balance, January 1, 2016 4,248 Advances 2,427 Repayments (2,222 ) Balance, December 31, 2016 4,453 Balance, January 1, 2017 4,453 Advances 3,358 Repayments (2,142 ) Balance, December 31, 2017 5,669 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets measured on a recurring basis | The following table presents the assets reported on the Consolidated Balance Sheets at their fair value as of December 31, 2017, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. ASSETS REPORTED AT FAIR VALUE (DOLLARS IN THOUSANDS) December 31, 2017 Level I Level II Level III Total $ $ $ $ U.S. government agencies — 34,352 — 34,352 U.S. agency mortgage-backed securities — 52,073 — 52,073 U. S. agency collateralized mortgage obligations — 54,641 — 54,641 Corporate bonds — 60,769 — 60,769 Obligations of states and political subdivisions — 112,243 — 112,243 Marketable equity securities 5,583 — — 5,583 Total securities 5,583 314,078 — 319,661 The following table presents the assets reported on the Consolidated Balance Sheets at their fair value as of December 31, 2016, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. ASSETS REPORTED AT FAIR VALUE (DOLLARS IN THOUSANDS) December 31, 2016 Level I Level II Level III Total $ $ $ $ U.S. government agencies — 32,261 — 32,261 U.S. agency mortgage-backed securities — 55,869 — 55,869 U. S. agency collateralized mortgage obligations — 37,936 — 37,936 Corporate bonds — 52,091 — 52,091 Obligations of states and political subdivisions — 124,430 — 124,430 Marketable equity securities 5,524 — — 5,524 Total securities 5,524 302,587 — 308,111 |
Schedule of assets measured on a nonrecurring basis | The following table presents the assets measured on a nonrecurring basis on the Consolidated Balance Sheets at their fair value as of December 31, 2017, and December 31, 2016, by level within the fair value hierarchy. ASSETS MEASURED ON A NONRECURRING BASIS (DOLLARS IN THOUSANDS) December 31, 2017 Level I Level II Level III Total $ $ $ $ Assets: Impaired Loans — — 1,812 1,812 OREO — — — — Total — — 1,812 1,812 December 31, 2016 Level I Level II Level III Total $ $ $ $ Assets: Impaired Loans — — 1,969 1,969 OREO — — — — Total — — 1,969 1,969 |
Schedule of Level III inputs | The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis for which the Corporation has utilized level III inputs to determine fair value: QUANTITATIVE INFORMATION ABOUT LEVEL III FAIR VALUE MEASUREMENTS (DOLLARS IN THOUSANDS) December 31, 2017 Fair Value Valuation Unobservable Range Estimate Techniques Input (Weighted Avg) Impaired loans 1,812 Appraisal of collateral (1) Appraisal adjustments (2) 0% to -20% (-20%) Liquidation expenses (2) 0% to -10% (-10%) December 31, 2016 Fair Value Valuation Unobservable Range Estimate Techniques Input (Weighted Avg) Impaired loans 1,969 Appraisal of collateral (1) Appraisal adjustments (2) 0% to -20% (-20%) Liquidation expenses (2) 0% to -10% (-10%) (1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally includes various level III inputs which are not identifiable. (2) Appraisals may be adjusted by management 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. |
DISCLOSURES ABOUT FAIR VALUE 42
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] | |
Schedule of carrying amount and fair value of financial instruments | The carrying amounts and estimated fair values of the Corporation's financial instruments at December 31, 2017, are summarized as follows: FAIR VALUE OF FINANCIAL INSTRUMENTS (DOLLARS IN THOUSANDS) December 31, 2017 Quoted Prices in Active Markets Significant Other Significant for Identical Observable Unobservable Carrying Assets Inputs Inputs Amount Fair Value (Level I) (Level II) (Level III) $ $ $ $ $ Financial Assets: Cash and cash equivalents 53,073 53,073 53,073 — — Securities available for sale 319,661 319,661 5,583 314,078 — Regulatory stock 5,794 5,794 5,794 — — Loans held for sale 2,892 2,892 2,892 — — Loans, net of allowance 589,313 590,415 — — 590,415 Accrued interest receivable 3,684 3,684 3,684 — — Bank owned life insurance 27,814 27,814 27,814 — — Financial Liabilities: Demand deposits 314,917 314,917 314,917 — — Interest-bearing demand deposits 20,230 20,230 20,230 — — NOW accounts 86,758 86,758 86,758 — — Money market deposit accounts 105,994 105,994 105,994 — — Savings accounts 189,169 189,169 189,169 — — Time deposits 149,409 150,165 — — 150,165 Total deposits 866,477 867,233 717,068 — 150,165 Long-term debt 65,850 65,850 — — 65,850 Accrued interest payable 385 385 385 — — The carrying amounts and estimated fair values of the Corporation’s financial instruments at December 31, 2016, are summarized as follows: FAIR VALUE OF FINANCIAL INSTRUMENTS (DOLLARS IN THOUSANDS) December 31, 2016 Quoted Prices in Active Markets Significant Other Significant for Identical Observable Unobservable Carrying Assets Inputs Inputs Amount Fair Value (Level I) (Level II) (Level III) $ $ $ $ $ Financial Assets: Cash and cash equivalents 45,632 45,632 45,632 — — Securities available for sale 308,111 308,111 5,524 302,587 — Regulatory stock 5,372 5,372 5,372 — — Loans held for sale 2,552 2,552 2,552 — — Loans, net of allowance 564,005 563,418 — — 563,418 Accrued interest receivable 3,750 3,750 3,750 — — Bank owned life insurance 24,687 24,687 24,687 — — Financial Liabilities: Demand deposits 280,543 280,543 280,543 — — Interest-bearing demand deposits 20,108 20,108 20,108 — — NOW accounts 85,540 85,540 85,540 — — Money market deposit accounts 93,943 93,943 93,943 — — Savings accounts 175,753 175,753 175,753 — — Time deposits 161,604 163,464 — — 163,464 Total deposits 817,491 819,351 655,887 — 163,464 Short-term borrowings 8,329 8,329 8,329 — — Long-term debt 61,257 61,372 — — 61,372 Accrued interest payable 384 384 384 — — |
ACCUMULATED OTHER COMPREHENSI43
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of accumulated other comprehensive income | The activity in accumulated other comprehensive loss for the years ended December 31, 2017 and 2016 is as follows: ACCUMULATED OTHER COMPREHENSIVE LOSS (1) (2) (DOLLARS IN THOUSANDS) Unrealized Gains (Losses) on Securities Available-for-Sale $ Balance at January 1, 2017 (4,885 ) Other comprehensive income before reclassifications 2,135 Amount reclassified from accumulated other comprehensive loss (445 ) Period change 1,690 Balance at December 31, 2017 (3,195 ) Balance at January 1, 2016 (252 ) Other comprehensive loss before reclassifications (3,069 ) Amount reclassified from accumulated other comprehensive loss (1,564 ) Period change (4,633 ) Balance at December 31, 2016 (4,885 ) (1) All amounts are net of tax. Related income tax expense or benefit is calculated using a Federal income tax rate of 34%. (2) Amounts in parentheses indicate debits. DETAILS ABOUT ACCUMULATED OTHER COMPREHENSIVE LOSS COMPONENTS (1) (DOLLARS IN THOUSANDS) Amount Reclassified from Accumulated Other Comprehensive Income (Loss) For the Year Ended December 31, Affected Line Item 2017 2016 in the Consolidated $ $ Statements of Income Securities available-for-sale: Net securities gains reclassified into earnings 675 2,370 Gains on securities transactions, net Related income tax expense (230 ) (806 ) Provision for federal income taxes Net effect on accumulated other comprehensive loss for the period 445 1,564 Total reclassifications for the period 445 1,564 (1) Amounts in parentheses indicate debits. |
CONDENSED PARENT ONLY DATA (Tab
CONDENSED PARENT ONLY DATA (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Balance Sheet | Condensed Balance Sheets (Parent Company Only) (DOLLARS IN THOUSANDS) December 31, 2017 2016 $ $ Assets Cash 1,187 1,356 Securities available for sale (at fair value) 304 274 Equity in bank subsidiary 98,184 93,255 Other assets 84 54 Total assets 99,759 94,939 Stockholders' Equity Common stock 574 574 Capital surplus 4,415 4,403 Retained earnings 98,629 95,475 Accumulated other comprehensive loss, net of tax (3,195 ) (4,885 ) Treasury stock (664 ) (628 ) Total stockholders' equity 99,759 94,939 |
Condensed Statements of Comprehensive Income | Condensed Statements of Comprehensive Income (DOLLARS IN THOUSANDS) Year Ended December 31, 2017 2016 2015 $ $ $ Income Dividend income - investment securities 10 29 16 Gains on securities transactions 57 171 25 Dividend income 3,190 3,606 3,581 Undistributed earnings of bank subsidiary 3,228 3,918 3,462 Total income 6,485 7,724 7,084 Expense Shareholder expenses 120 125 118 Other expenses 21 46 56 Total expense 141 171 174 Net Income 6,344 7,553 6,910 Comprehensive Income 8,034 2,920 5,656 |
Condensed Statements of Cash Flows | Condensed Statements of Cash Flows (DOLLARS IN THOUSANDS) Year Ended December 31, 2017 2016 2015 Cash Flows from Operating Activities: $ $ $ Net Income 6,344 7,553 6,910 Equity in undistributed earnings of subsidiaries (3,228 ) (3,918 ) (3,462 ) Gains on securities transactions, net (57 ) (171 ) (25 ) Net change in other assets (30 ) 12 5 Net cash provided by operating activities 3,029 3,476 3,428 Cash Flows from Investing Activities: Proceeds from sales of securities available for sale 150 812 167 Purchases of securities available for sale (134 ) (358 ) (467 ) Net cash provided by (used for) investing activities 16 454 (300 ) Cash Flows from Financing Activities: Proceeds from issuance of treasury stock 544 489 512 Payment to repurchase common stock (568 ) (465 ) (752 ) Dividends paid (3,190 ) (3,107 ) (3,081 ) Net cash used for financing activities (3,214 ) (3,083 ) (3,321 ) Cash and Cash Equivalents: Net change in cash and cash equivalents (169 ) 847 (193 ) Cash and cash equivalents at beginning of period 1,356 509 702 Cash and cash equivalents at end of period 1,187 1,356 509 |
SUMMARY OF QUARTERLY FINANCIA45
SUMMARY OF QUARTERLY FINANCIAL DATA (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Data [Abstract] | |
Schedule of Quarterly Results of Operations | 2017 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr $ $ $ $ Interest income 7,982 8,213 8,444 8,478 Interest expense 702 731 754 752 Net interest income 7,280 7,482 7,690 7,726 Less provision for loan losses 90 120 240 490 Net interest income after provision for loan losses 7,190 7,362 7,450 7,236 Other income 2,412 2,512 2,622 2,775 Operating expenses: Salaries and employee benefits 4,719 4,811 4,840 4,970 Occupancy and equipment expenses 881 902 923 873 Other operating expenses 1,918 2,002 1,884 2,154 Total operating expenses 7,518 7,715 7,647 7,997 Income before income taxes 2,084 2,159 2,425 2,014 Provision for Federal income taxes 257 287 391 1,403 Net income 1,827 1,872 2,034 611 FINANCIAL RATIOS Per share data: Net income 0.64 0.66 0.71 0.21 Cash dividends paid 0.28 0.28 0.28 0.28 2016 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr $ $ $ $ Interest income 6,886 6,294 7,393 7,768 Interest expense 811 757 751 735 Net interest income 6,075 5,537 6,642 7,033 Less provision (credit) for loan losses (50 ) 50 200 125 Net interest income after provision (credit) for loan losses 6,125 5,487 6,442 6,908 Other income 2,651 3,087 2,828 2,578 Operating expenses: Salaries and employee benefits 3,971 4,040 4,219 4,539 Occupancy and equipment expenses 777 787 831 879 Other operating expenses 1,734 1,885 1,698 1,840 Total operating expenses 6,482 6,712 6,748 7,258 Income before income taxes 2,294 1,862 2,522 2,228 Provision for Federal income taxes 382 218 445 308 Net income 1,912 1,644 2,077 1,920 FINANCIAL RATIOS Per share data: Net income 0.67 0.58 0.73 0.67 Cash dividends paid 0.27 0.27 0.27 0.28 2015 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr $ $ $ $ Interest income 6,872 6,718 6,761 6,491 Interest expense 1,014 951 928 851 Net interest income 5,858 5,767 5,833 5,640 Less provision (credit) for loan losses 200 100 (150 ) — Net interest income after provision (credit) for loan losses 5,658 5,667 5,983 5,640 Other income 2,201 2,394 2,342 3,118 Operating expenses: Salaries and employee benefits 3,702 3,674 3,679 3,741 Occupancy and equipment expenses 822 822 791 783 Other operating expenses 1,626 1,691 1,620 1,784 Total operating expenses 6,150 6,187 6,090 6,308 Income before income taxes 1,709 1,874 2,235 2,450 Provision for Federal income taxes 243 278 382 455 Net income 1,466 1,596 1,853 1,995 FINANCIAL RATIOS Per share data: Net income 0.51 0.56 0.65 0.70 Cash dividends paid 0.27 0.27 0.27 0.27 |
SUMMARY OF SIGNIFICANT ACCOUN46
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Feb. 28, 2018 | Mar. 31, 2017 | Jan. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowances for off-balance sheet extensions of credit | $ 317,000 | $ 345,000 | ||||
Other Real Estate Owned (OREO) | 0 | 0 | ||||
Mortgage Servicing Rights (MSRs) | 661,000 | 410,000 | ||||
Bank owned life insurance | $ 27,814,000 | $ 24,687,000 | ||||
Employer matching contribution, maximum percentage of employee pay | 7.50% | 7.50% | ||||
Employer matching contribution, matching percentage | 2.00% | 2.00% | ||||
Increase in BOLI | $ 2,500,000 | |||||
Advertising costs | $ 698,000 | $ 614,000 | $ 552,000 | |||
Percentage increase in assets and liabilities | 0.00% | 1.00% | ||||
Cumulative effect adjustment from accumulated other comprehensive income to retained earnings | $ 1,700 | $ 36,000 | ||||
Subsequent Event [Member] | ||||||
Cumulative effect adjustment from accumulated other comprehensive income to retained earnings | $ 634,000 | |||||
401(K) Plan [Member] | ||||||
Employee contribution percentage | 5.00% | |||||
Employer matching contribution, maximum percentage of employee pay | 2.50% | |||||
Employer matching contribution, matching percentage | 50.00% | |||||
Working hour in a calender year | 1,000 | |||||
401(K) Plan [Member] | Non-Elective contribution [Member] | ||||||
Employee contribution percentage | 3.00% | |||||
401(K) Plan [Member] | Elective contribution [Member] | ||||||
Employee contribution percentage | 2.00% | |||||
Lower Range [Member] | 401(K) Plan [Member] | Non-Elective contribution [Member] | ||||||
Employee contribution percentage | 2.00% | |||||
Upper Range [Member] | 401(K) Plan [Member] | Non-Elective contribution [Member] | ||||||
Employee contribution percentage | 3.00% | |||||
Buildings and improvements [Member] | Lower Range [Member] | ||||||
Useful life | 15 years | |||||
Buildings and improvements [Member] | Upper Range [Member] | ||||||
Useful life | 39 years | |||||
Furniture and Equipment [Member] | Lower Range [Member] | ||||||
Useful life | 4 years | |||||
Furniture and Equipment [Member] | Upper Range [Member] | ||||||
Useful life | 10 years |
SECURITIES AVAILABLE FOR SALE47
SECURITIES AVAILABLE FOR SALE (Narrative) (Details) | Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) |
Schedule of Available-for-sale Securities [Line Items] | ||
Available for sale debt securities pledged or restricted for public funds, par value | $ 64,580,000 | $ 63,726,000 |
Available for sale debt securities pledged or restricted for public funds, fair value | $ 66,157,000 | $ 65,770,000 |
Debt Security Portfolio [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of securities considered temporarily impaired | item | 187 |
SECURITIES AVAILABLE FOR SALE48
SECURITIES AVAILABLE FOR SALE (Schedule of Amortized Cost and Fair Value of Securities) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Securities Available For Sale | ||
Amortized Cost | $ 324,503 | $ 315,512 |
Gross Unrealized Gains | 357 | 472 |
Gross Unrealized Losses | (5,199) | (7,873) |
Fair Value | 319,661 | 308,111 |
U.S. Government Agencies [Member] | ||
Securities Available For Sale | ||
Amortized Cost | 35,101 | 33,124 |
Gross Unrealized Gains | ||
Gross Unrealized Losses | (749) | (863) |
Fair Value | 34,352 | 32,261 |
U.S. Agency Mortgage-Backed Securities [Member] | ||
Securities Available For Sale | ||
Amortized Cost | 52,981 | 56,826 |
Gross Unrealized Gains | 8 | 22 |
Gross Unrealized Losses | (916) | (979) |
Fair Value | 52,073 | 55,869 |
U.S. Agency Collateralized Mortgage Obligations [Member] | ||
Securities Available For Sale | ||
Amortized Cost | 55,493 | 38,737 |
Gross Unrealized Gains | 46 | 41 |
Gross Unrealized Losses | (898) | (842) |
Fair Value | 54,641 | 37,936 |
Corporate Bonds [Member] | ||
Securities Available For Sale | ||
Amortized Cost | 61,334 | 52,928 |
Gross Unrealized Gains | 24 | 8 |
Gross Unrealized Losses | (589) | (845) |
Fair Value | 60,769 | 52,091 |
Obligations of States and Political Subdivisions [Member] | ||
Securities Available For Sale | ||
Amortized Cost | 114,047 | 128,428 |
Gross Unrealized Gains | 243 | 346 |
Gross Unrealized Losses | (2,047) | (4,344) |
Fair Value | 112,243 | 124,430 |
Total Debt Securities [Member] | ||
Securities Available For Sale | ||
Amortized Cost | 318,956 | 310,043 |
Gross Unrealized Gains | 321 | 417 |
Gross Unrealized Losses | (5,199) | (7,873) |
Fair Value | 314,078 | 302,587 |
Marketable equity securities [Member] | ||
Securities Available For Sale | ||
Amortized Cost | 5,547 | 5,469 |
Gross Unrealized Gains | 36 | 55 |
Gross Unrealized Losses | ||
Fair Value | $ 5,583 | $ 5,524 |
SECURITIES AVAILABLE FOR SALE49
SECURITIES AVAILABLE FOR SALE (Schedule of Contractual Maturity of Debt Securities) (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Contractual maturity of debt securities, Amortized Cost | |
Due in one year or less | $ 18,451 |
Due after one year through five years | 122,859 |
Due after five years through ten years | 68,321 |
Due after ten years | 109,325 |
Total debt securities | 318,956 |
Contractual maturity of debt securities, Fair Value | |
Due in one year or less | 18,223 |
Due after one year through five years | 121,231 |
Due after five years through ten years | 67,020 |
Due after ten years | 107,604 |
Securities available for sale | $ 314,078 |
SECURITIES AVAILABLE FOR SALE50
SECURITIES AVAILABLE FOR SALE (Schedule of Proceeds and Gains and Losses on Securities) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Proceeds from sales of securities available for sale | |||
Proceeds from sales | $ 80,642 | $ 163,085 | $ 154,384 |
Gross realized gains | 946 | 2,457 | 2,934 |
Gross realized losses | $ 271 | $ 87 | $ 94 |
SECURITIES AVAILABLE FOR SALE51
SECURITIES AVAILABLE FOR SALE (Schedule of Securities in an Unrealized Loss Position) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value | ||
Less than 12 months | $ 103,549 | $ 259,449 |
More than 12 months | 165,811 | 14,032 |
Total | 269,360 | 273,481 |
Gross Unrealized Losses | ||
Less than 12 months | (841) | (7,454) |
More than 12 months | (4,358) | (419) |
Total | (5,199) | (7,873) |
U.S. Government Agencies [Member] | ||
Fair Value | ||
Less than 12 months | 9,941 | 32,261 |
More than 12 months | 24,411 | |
Total | 34,352 | 32,261 |
Gross Unrealized Losses | ||
Less than 12 months | (59) | (863) |
More than 12 months | (690) | |
Total | (749) | (863) |
U.S. Agency Mortgage-Backed Securities [Member] | ||
Fair Value | ||
Less than 12 months | 10,326 | 47,418 |
More than 12 months | 37,123 | 3,989 |
Total | 47,449 | 51,407 |
Gross Unrealized Losses | ||
Less than 12 months | (78) | (856) |
More than 12 months | (838) | (123) |
Total | (916) | (979) |
U.S. Agency Collateralized Mortgage Obligations [Member] | ||
Fair Value | ||
Less than 12 months | 29,551 | 33,206 |
More than 12 months | 20,980 | |
Total | 50,531 | 33,206 |
Gross Unrealized Losses | ||
Less than 12 months | (280) | (842) |
More than 12 months | (618) | |
Total | (898) | (842) |
Corporate Bonds [Member] | ||
Fair Value | ||
Less than 12 months | 38,543 | 45,335 |
More than 12 months | 15,019 | 2,002 |
Total | 53,562 | 47,337 |
Gross Unrealized Losses | ||
Less than 12 months | (282) | (830) |
More than 12 months | (307) | (15) |
Total | (589) | (845) |
Obligations of States and Political Subdivisions [Member] | ||
Fair Value | ||
Less than 12 months | 15,188 | 101,229 |
More than 12 months | 68,278 | 8,041 |
Total | 83,466 | 109,270 |
Gross Unrealized Losses | ||
Less than 12 months | (142) | (4,063) |
More than 12 months | (1,905) | (281) |
Total | $ (2,047) | $ (4,344) |
LOANS AND ALLOWANCE FOR LOAN 52
LOANS AND ALLOWANCE FOR LOAN LOSSES (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Foregone interest income for impaired loans | $ 24,000 | $ 23,000 | $ 23,000 |
Increase/Decrease in ending balance of allowance for loan losses | $ 678,000 | $ 484,000 | $ (63,000) |
Increase/Decrease in ending balance of allowance for loan losses | 9.00% | 6.80% | 0.90% |
Charge-offs | $ (317,000) | $ (54,000) | $ (362,000) |
Recoveries | 55,000 | 213,000 | 149,000 |
Provision | $ 940,000 | $ 325,000 | $ 150,000 |
Allowance as a percentage of loans | 1.38% | 1.32% | 1.36% |
Agriculture loans [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
TDR loan | $ 245,000 | ||
Loans Serviced for Others [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Real estate loans serviced for others | $ 98,262,000 | $ 66,767,000 | |
Commercial Real Estate [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Increase/Decrease in ending balance of allowance for loan losses | $ 14,200,000 | ||
Increase/Decrease in ending balance of allowance for loan losses | 5.40% | ||
Residential mortgage portfolio [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Percentage of loans to compensate by provision expense | 7.00% | ||
Home Equity Loan [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Percentage of loans to compensate by provision expense | 32.00% | ||
Commercial and Industrial [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Percentage of loans to compensate by provision expense | 1.00% | ||
Charge-offs | $ 44,000 | ||
Recoveries | 112,000 | ||
Provision | $ 55,000 | ||
Consumer loan segment [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Provision expense | $ 41,000 | ||
Charge-offs | $ 31,000 |
LOANS AND ALLOWANCE FOR LOAN 53
LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of Loan Portfolio by Category) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Loan Portfolio | |||||
Gross loans prior to deferred costs and allowance for loan losses | $ 596,310 | $ 570,567 | $ 519,569 | ||
Deferred loan costs, net | 1,243 | 1,000 | |||
Allowance for loan losses | 8,240 | 7,562 | 7,078 | $ 7,141 | |
Net loans | 589,313 | 564,005 | |||
Home Equity Loan [Member] | |||||
Loan Portfolio | |||||
Gross loans prior to deferred costs and allowance for loan losses | 11,181 | 10,391 | |||
Consumer Home Equity Lines of Credit [Member] | |||||
Loan Portfolio | |||||
Gross loans prior to deferred costs and allowance for loan losses | 61,104 | 53,127 | |||
Commercial Real Estate [Member] | |||||
Loan Portfolio | |||||
Gross loans prior to deferred costs and allowance for loan losses | 260,792 | 275,067 | 260,900 | ||
Allowance for loan losses | 3,863 | 3,795 | 3,831 | 3,834 | |
Commercial Real Estate [Member] | Commercial and Industrial [Member] | |||||
Loan Portfolio | |||||
Gross loans prior to deferred costs and allowance for loan losses | 90,072 | 86,434 | |||
Commercial Real Estate [Member] | Agriculture mortgages loans [Member] | |||||
Loan Portfolio | |||||
Gross loans prior to deferred costs and allowance for loan losses | 152,050 | 163,753 | |||
Commercial Real Estate [Member] | Real Estate Loan [Member] | Commercial and Industrial [Member] | |||||
Loan Portfolio | |||||
Gross loans prior to deferred costs and allowance for loan losses | 90,072 | 86,434 | |||
Commercial Real Estate [Member] | Construction Loans [Member] | |||||
Loan Portfolio | |||||
Gross loans prior to deferred costs and allowance for loan losses | 18,670 | 24,880 | |||
Residential Portfolio Segment [Member] | |||||
Loan Portfolio | |||||
Gross loans prior to deferred costs and allowance for loan losses | [1] | 249,256 | 213,771 | ||
Allowance for loan losses | 1,403 | ||||
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | |||||
Loan Portfolio | |||||
Gross loans prior to deferred costs and allowance for loan losses | [1] | 176,971 | 150,253 | ||
Residential Portfolio Segment [Member] | Home Equity Loan [Member] | |||||
Loan Portfolio | |||||
Gross loans prior to deferred costs and allowance for loan losses | [1] | 11,181 | 10,391 | ||
Residential Portfolio Segment [Member] | Consumer Home Equity Lines of Credit [Member] | |||||
Loan Portfolio | |||||
Gross loans prior to deferred costs and allowance for loan losses | [1] | 61,104 | 53,127 | ||
Commercial mortgages [Member] | |||||
Loan Portfolio | |||||
Gross loans prior to deferred costs and allowance for loan losses | 80,942 | 77,192 | |||
Allowance for loan losses | 1,552 | ||||
Commercial mortgages [Member] | Commercial and Industrial [Member] | |||||
Loan Portfolio | |||||
Gross loans prior to deferred costs and allowance for loan losses | 41,426 | 42,471 | |||
Commercial mortgages [Member] | Agriculture mortgages loans [Member] | |||||
Loan Portfolio | |||||
Gross loans prior to deferred costs and allowance for loan losses | 18,794 | 21,630 | |||
Commercial mortgages [Member] | Government Sector [Member] | |||||
Loan Portfolio | |||||
Gross loans prior to deferred costs and allowance for loan losses | 20,722 | 13,091 | |||
Consumer [Member] | |||||
Loan Portfolio | |||||
Gross loans prior to deferred costs and allowance for loan losses | 5,320 | 4,537 | 3,892 | ||
Allowance for loan losses | $ 98 | $ 82 | $ 62 | $ 66 | |
[1] | Real estate loans serviced for others, which are not included in the Consolidated Balance Sheets, totaled $98,262,000 and $66,767,000 as of December 31, 2017, and 2016, respectively. |
LOANS AND ALLOWANCE FOR LOAN 54
LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of Commercial and Consumer Credit Exposure) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Total | $ 341,734 | $ 352,259 |
Pass [Member] | ||
Total | 323,225 | 328,290 |
Special Mention [Member] | ||
Total | 5,526 | 12,828 |
Substandard [Member] | ||
Total | 12,983 | 11,141 |
Doubtful [Member] | ||
Total | ||
Loss [Member] | ||
Total | ||
Construction Loans [Member] | ||
Total | 18,670 | 24,880 |
Construction Loans [Member] | Pass [Member] | ||
Total | 17,670 | 23,880 |
Construction Loans [Member] | Special Mention [Member] | ||
Total | ||
Construction Loans [Member] | Substandard [Member] | ||
Total | 1,000 | 1,000 |
Construction Loans [Member] | Doubtful [Member] | ||
Total | ||
Construction Loans [Member] | Loss [Member] | ||
Total | ||
Agriculture mortgages loans [Member] | ||
Total | 152,050 | 163,753 |
Agriculture mortgages loans [Member] | Pass [Member] | ||
Total | 143,037 | 155,820 |
Agriculture mortgages loans [Member] | Special Mention [Member] | ||
Total | 3,873 | 5,360 |
Agriculture mortgages loans [Member] | Substandard [Member] | ||
Total | 5,140 | 2,573 |
Agriculture mortgages loans [Member] | Doubtful [Member] | ||
Total | ||
Agriculture mortgages loans [Member] | Loss [Member] | ||
Total | ||
Commercial and Industrial [Member] | ||
Total | 41,426 | 42,471 |
Commercial and Industrial [Member] | Pass [Member] | ||
Total | 37,947 | 36,887 |
Commercial and Industrial [Member] | Special Mention [Member] | ||
Total | 1,015 | 1,955 |
Commercial and Industrial [Member] | Substandard [Member] | ||
Total | 2,464 | 3,629 |
Commercial and Industrial [Member] | Doubtful [Member] | ||
Total | ||
Commercial and Industrial [Member] | Loss [Member] | ||
Total | ||
Government Sector [Member] | ||
Total | 20,722 | 13,091 |
Government Sector [Member] | Pass [Member] | ||
Total | 20,514 | 13,091 |
Government Sector [Member] | Special Mention [Member] | ||
Total | 208 | |
Government Sector [Member] | Substandard [Member] | ||
Total | ||
Government Sector [Member] | Doubtful [Member] | ||
Total | ||
Government Sector [Member] | Loss [Member] | ||
Total | ||
Agriculture loans [Member] | ||
Total | 18,794 | 21,630 |
Agriculture loans [Member] | Pass [Member] | ||
Total | 17,798 | 20,245 |
Agriculture loans [Member] | Special Mention [Member] | ||
Total | 270 | 653 |
Agriculture loans [Member] | Substandard [Member] | ||
Total | 726 | 732 |
Agriculture loans [Member] | Doubtful [Member] | ||
Total | ||
Agriculture loans [Member] | Loss [Member] | ||
Total | ||
Commercial mortgages [Member] | ||
Total | 90,072 | 86,434 |
Commercial mortgages [Member] | Pass [Member] | ||
Total | 86,259 | 78,367 |
Commercial mortgages [Member] | Special Mention [Member] | ||
Total | 160 | 4,860 |
Commercial mortgages [Member] | Substandard [Member] | ||
Total | 3,653 | 3,207 |
Commercial mortgages [Member] | Doubtful [Member] | ||
Total | ||
Commercial mortgages [Member] | Loss [Member] | ||
Total |
LOANS AND ALLOWANCE FOR LOAN 55
LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of Credit Risk Profile by Payment Performance) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Gross loans prior to deferred costs and allowance for loan losses | $ 596,310 | $ 570,567 | $ 519,569 |
Consumer Borrower [Member] | |||
Gross loans prior to deferred costs and allowance for loan losses | 254,576 | 218,308 | |
Home Equity Loan [Member] | |||
Gross loans prior to deferred costs and allowance for loan losses | 11,181 | 10,391 | |
Consumer Home Equity Lines of Credit [Member] | |||
Gross loans prior to deferred costs and allowance for loan losses | 61,104 | 53,127 | |
1-4 Family Residential Mortgages [Member] | |||
Gross loans prior to deferred costs and allowance for loan losses | 176,971 | 150,253 | |
Consumer [Member] | |||
Gross loans prior to deferred costs and allowance for loan losses | 5,320 | 4,537 | $ 3,892 |
Performing [Member] | |||
Gross loans prior to deferred costs and allowance for loan losses | 254,136 | 217,924 | |
Performing [Member] | Home Equity Loan [Member] | |||
Gross loans prior to deferred costs and allowance for loan losses | 11,181 | 10,388 | |
Performing [Member] | Consumer Home Equity Lines of Credit [Member] | |||
Gross loans prior to deferred costs and allowance for loan losses | 61,074 | 53,127 | |
Performing [Member] | 1-4 Family Residential Mortgages [Member] | |||
Gross loans prior to deferred costs and allowance for loan losses | 176,576 | 149,873 | |
Performing [Member] | Consumer [Member] | |||
Gross loans prior to deferred costs and allowance for loan losses | 5,305 | 4,536 | |
Nonperforming [Member] | |||
Gross loans prior to deferred costs and allowance for loan losses | 440 | 384 | |
Nonperforming [Member] | Home Equity Loan [Member] | |||
Gross loans prior to deferred costs and allowance for loan losses | 3 | ||
Nonperforming [Member] | Consumer Home Equity Lines of Credit [Member] | |||
Gross loans prior to deferred costs and allowance for loan losses | 30 | ||
Nonperforming [Member] | 1-4 Family Residential Mortgages [Member] | |||
Gross loans prior to deferred costs and allowance for loan losses | 395 | 380 | |
Nonperforming [Member] | Consumer [Member] | |||
Gross loans prior to deferred costs and allowance for loan losses | $ 15 | $ 1 |
LOANS AND ALLOWANCE FOR LOAN 56
LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of Aging of Loans Receivable) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | $ 1,818 | $ 3,151 | ||
Current | 594,492 | 567,416 | ||
Total Loans Receivable | 596,310 | 570,567 | $ 519,569 | |
Loans Receivable - Greater than 90 Days and Accruing | 440 | 384 | ||
Financing Receivables, 30 to 59 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 646 | 1,190 | ||
Financing Receivables, 60 to 89 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 360 | 1,085 | ||
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 812 | 876 | ||
Home Equity Loan [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Loans Receivable | 11,181 | 10,391 | ||
Consumer Home Equity Lines of Credit [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Loans Receivable | 61,104 | 53,127 | ||
Commercial Real Estate [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Loans Receivable | 260,792 | 275,067 | 260,900 | |
Commercial Real Estate [Member] | Construction Loans [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | ||||
Current | 18,670 | 24,880 | ||
Total Loans Receivable | 18,670 | 24,880 | ||
Loans Receivable - Greater than 90 Days and Accruing | ||||
Commercial Real Estate [Member] | Construction Loans [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | ||||
Commercial Real Estate [Member] | Construction Loans [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | ||||
Commercial Real Estate [Member] | Construction Loans [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | ||||
Residential Portfolio Segment [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Loans Receivable | [1] | 249,256 | 213,771 | |
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 1,176 | 1,607 | ||
Current | 175,795 | 148,639 | ||
Total Loans Receivable | [1] | 176,971 | 150,253 | |
Loans Receivable - Greater than 90 Days and Accruing | 395 | 380 | ||
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 533 | 565 | ||
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 248 | 662 | ||
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 395 | 380 | ||
Residential Portfolio Segment [Member] | Home Equity Loan [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 40 | 181 | ||
Current | 11,141 | 10,307 | ||
Total Loans Receivable | [1] | 11,181 | 10,391 | |
Loans Receivable - Greater than 90 Days and Accruing | 3 | |||
Residential Portfolio Segment [Member] | Home Equity Loan [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 40 | 178 | ||
Residential Portfolio Segment [Member] | Home Equity Loan [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | ||||
Residential Portfolio Segment [Member] | Home Equity Loan [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 3 | |||
Residential Portfolio Segment [Member] | Consumer Home Equity Lines of Credit [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 30 | |||
Current | 61,074 | 53,037 | ||
Total Loans Receivable | [1] | 61,104 | 53,127 | |
Loans Receivable - Greater than 90 Days and Accruing | 30 | |||
Residential Portfolio Segment [Member] | Consumer Home Equity Lines of Credit [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | ||||
Residential Portfolio Segment [Member] | Consumer Home Equity Lines of Credit [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | ||||
Residential Portfolio Segment [Member] | Consumer Home Equity Lines of Credit [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 30 | |||
Commercial mortgages [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Loans Receivable | 80,942 | 77,192 | ||
Consumer [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 26 | 21 | ||
Current | 5,294 | 4,516 | ||
Total Loans Receivable | 5,320 | 4,537 | $ 3,892 | |
Loans Receivable - Greater than 90 Days and Accruing | 15 | 1 | ||
Consumer [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 8 | 16 | ||
Consumer [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 3 | 4 | ||
Consumer [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 15 | 1 | ||
Commercial and Industrial [Member] | Commercial Real Estate [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 372 | 836 | ||
Current | 89,700 | 85,598 | ||
Total Loans Receivable | 90,072 | 86,434 | ||
Loans Receivable - Greater than 90 Days and Accruing | ||||
Commercial and Industrial [Member] | Commercial Real Estate [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | ||||
Commercial and Industrial [Member] | Commercial Real Estate [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 419 | |||
Commercial and Industrial [Member] | Commercial Real Estate [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 372 | 417 | ||
Commercial and Industrial [Member] | Commercial Real Estate [Member] | Real Estate Loan [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Loans Receivable | 90,072 | 86,434 | ||
Commercial and Industrial [Member] | Commercial mortgages [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 174 | 341 | ||
Current | 41,252 | 42,130 | ||
Total Loans Receivable | 41,426 | 42,471 | ||
Loans Receivable - Greater than 90 Days and Accruing | ||||
Commercial and Industrial [Member] | Commercial mortgages [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 65 | 266 | ||
Commercial and Industrial [Member] | Commercial mortgages [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 109 | |||
Commercial and Industrial [Member] | Commercial mortgages [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 75 | |||
Agriculture mortgages loans [Member] | Commercial Real Estate [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 165 | |||
Current | 152,050 | 163,588 | ||
Total Loans Receivable | 152,050 | 163,753 | ||
Loans Receivable - Greater than 90 Days and Accruing | ||||
Agriculture mortgages loans [Member] | Commercial Real Estate [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | 165 | |||
Agriculture mortgages loans [Member] | Commercial Real Estate [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | ||||
Agriculture mortgages loans [Member] | Commercial Real Estate [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | ||||
Agriculture mortgages loans [Member] | Commercial mortgages [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | ||||
Current | 18,794 | 21,630 | ||
Total Loans Receivable | 18,794 | 21,630 | ||
Loans Receivable - Greater than 90 Days and Accruing | ||||
Agriculture mortgages loans [Member] | Commercial mortgages [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | ||||
Agriculture mortgages loans [Member] | Commercial mortgages [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | ||||
Agriculture mortgages loans [Member] | Commercial mortgages [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | ||||
Government Sector [Member] | Commercial mortgages [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | ||||
Current | 20,722 | 13,091 | ||
Total Loans Receivable | 20,722 | 13,091 | ||
Loans Receivable - Greater than 90 Days and Accruing | ||||
Government Sector [Member] | Commercial mortgages [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | ||||
Government Sector [Member] | Commercial mortgages [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | ||||
Government Sector [Member] | Commercial mortgages [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Total Past Due | ||||
[1] | Real estate loans serviced for others, which are not included in the Consolidated Balance Sheets, totaled $98,262,000 and $66,767,000 as of December 31, 2017, and 2016, respectively. |
LOANS AND ALLOWANCE FOR LOAN 57
LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of Nonaccrual Loans by Class) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual Loans | $ 393 | $ 721 |
Commercial Real Estate [Member] | Construction Loans [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual Loans | ||
Residential Portfolio Segment [Member] | Real Estate Loan [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual Loans | ||
Residential Portfolio Segment [Member] | Home Equity Loan [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual Loans | ||
Residential Portfolio Segment [Member] | Consumer Home Equity Lines of Credit [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual Loans | ||
Consumer [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual Loans | ||
Commercial and Industrial [Member] | Commercial Real Estate [Member] | Real Estate Loan [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual Loans | 393 | 646 |
Commercial and Industrial [Member] | Commercial mortgages [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual Loans | 75 | |
Agriculture mortgages loans [Member] | Commercial Real Estate [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual Loans | ||
Agriculture mortgages loans [Member] | Commercial mortgages [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual Loans | ||
Government Sector [Member] | Commercial mortgages [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual Loans |
LOANS AND ALLOWANCE FOR LOAN 58
LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of Impaired Loans by Loan Portfolio Class) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Loans with no related allowance recorded: | |||
Recorded Investment | $ 1,812 | $ 1,969 | $ 1,705 |
Unpaid Principal Balance | 2,109 | 2,066 | 2,326 |
Average Recorded Investment | 1,958 | 2,129 | 1,957 |
Interest Income Recognized | 65 | 57 | 86 |
Loans with an allowance recorded: | |||
Recorded Investment | |||
Unpaid Principal Balance | |||
Related Allowance | |||
Average Recorded Investment | |||
Interest Income Recognized | |||
Total impaired loans | |||
Recorded Investment | 1,958 | 1,969 | 1,957 |
Unpaid Principal Balance | 65 | 2,066 | 86 |
Average Recorded Investment | 1,958 | 2,129 | 1,957 |
Interest Income Recognized | 65 | 57 | 86 |
Commercial Real Estate [Member] | |||
Loans with no related allowance recorded: | |||
Recorded Investment | 1,567 | 1,894 | 1,705 |
Unpaid Principal Balance | 1,864 | 1,991 | 2,277 |
Average Recorded Investment | 1,795 | 2,053 | 1,903 |
Interest Income Recognized | 58 | 57 | 83 |
Loans with an allowance recorded: | |||
Recorded Investment | |||
Unpaid Principal Balance | |||
Related Allowance | |||
Average Recorded Investment | |||
Interest Income Recognized | |||
Total impaired loans | |||
Recorded Investment | 1,567 | 1,894 | 1,705 |
Unpaid Principal Balance | 1,864 | 1,991 | 2,277 |
Average Recorded Investment | 1,795 | 2,053 | 1,903 |
Interest Income Recognized | 58 | 57 | 83 |
Commercial Real Estate [Member] | Agriculture mortgages loans [Member] | |||
Loans with no related allowance recorded: | |||
Recorded Investment | 1,174 | 1,248 | 1,325 |
Unpaid Principal Balance | 1,174 | 1,248 | 1,325 |
Average Recorded Investment | 1,210 | 1,285 | 1,359 |
Interest Income Recognized | 54 | 55 | 83 |
Loans with an allowance recorded: | |||
Recorded Investment | |||
Unpaid Principal Balance | |||
Related Allowance | |||
Average Recorded Investment | |||
Interest Income Recognized | |||
Total impaired loans | |||
Recorded Investment | 1,174 | 1,248 | 1,325 |
Unpaid Principal Balance | 1,174 | 1,248 | 1,325 |
Average Recorded Investment | 1,210 | 1,285 | 1,359 |
Interest Income Recognized | 54 | 55 | 83 |
Commercial Real Estate [Member] | Commercial mortgages [Member] | |||
Loans with no related allowance recorded: | |||
Recorded Investment | 393 | 646 | 380 |
Unpaid Principal Balance | 690 | 743 | 952 |
Average Recorded Investment | 585 | 768 | 544 |
Interest Income Recognized | 4 | 2 | |
Loans with an allowance recorded: | |||
Recorded Investment | |||
Unpaid Principal Balance | |||
Related Allowance | |||
Average Recorded Investment | |||
Interest Income Recognized | |||
Total impaired loans | |||
Recorded Investment | 393 | 646 | 380 |
Unpaid Principal Balance | 690 | 743 | 952 |
Average Recorded Investment | 585 | 768 | 544 |
Interest Income Recognized | 4 | 2 | |
Commercial Real Estate [Member] | Construction Loans [Member] | |||
Loans with no related allowance recorded: | |||
Recorded Investment | |||
Unpaid Principal Balance | |||
Average Recorded Investment | |||
Interest Income Recognized | |||
Loans with an allowance recorded: | |||
Recorded Investment | |||
Unpaid Principal Balance | |||
Related Allowance | |||
Average Recorded Investment | |||
Interest Income Recognized | |||
Total impaired loans | |||
Recorded Investment | |||
Unpaid Principal Balance | |||
Average Recorded Investment | |||
Interest Income Recognized | |||
Commercial and Industrial [Member] | |||
Loans with no related allowance recorded: | |||
Recorded Investment | 245 | 75 | |
Unpaid Principal Balance | 245 | 75 | 49 |
Average Recorded Investment | 163 | 76 | 54 |
Interest Income Recognized | 7 | 3 | |
Loans with an allowance recorded: | |||
Recorded Investment | |||
Unpaid Principal Balance | |||
Related Allowance | |||
Average Recorded Investment | |||
Interest Income Recognized | |||
Total impaired loans | |||
Recorded Investment | 245 | 75 | |
Unpaid Principal Balance | 245 | 75 | 49 |
Average Recorded Investment | 163 | 76 | 54 |
Interest Income Recognized | 7 | 3 | |
Commercial and Industrial [Member] | Agriculture mortgages loans [Member] | |||
Loans with no related allowance recorded: | |||
Recorded Investment | 245 | ||
Unpaid Principal Balance | 245 | ||
Average Recorded Investment | 163 | ||
Interest Income Recognized | 7 | ||
Loans with an allowance recorded: | |||
Recorded Investment | |||
Unpaid Principal Balance | |||
Related Allowance | |||
Average Recorded Investment | |||
Interest Income Recognized | |||
Total impaired loans | |||
Recorded Investment | 245 | ||
Unpaid Principal Balance | 245 | ||
Average Recorded Investment | 163 | ||
Interest Income Recognized | 7 | ||
Commercial and Industrial [Member] | Tax-free loans [Member] | |||
Loans with no related allowance recorded: | |||
Recorded Investment | |||
Unpaid Principal Balance | |||
Average Recorded Investment | |||
Interest Income Recognized | |||
Loans with an allowance recorded: | |||
Recorded Investment | |||
Unpaid Principal Balance | |||
Related Allowance | |||
Average Recorded Investment | |||
Interest Income Recognized | |||
Total impaired loans | |||
Recorded Investment | |||
Unpaid Principal Balance | |||
Average Recorded Investment | |||
Interest Income Recognized |
LOANS AND ALLOWANCE FOR LOAN 59
LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of Schedule of Allowance for Credit Losses) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for credit losses: | |||
Beginning balance | $ 7,562 | $ 7,078 | $ 7,141 |
Charge-offs | (317) | (54) | (362) |
Recoveries | 55 | 213 | 149 |
Provision (credit) | 940 | 325 | 150 |
Ending balance | 8,240 | 7,562 | 7,078 |
Ending balance: Individually evaluated for impairment | |||
Ending balance: Collectively evaluated for impairment | 8,240 | 7,562 | 7,078 |
Loans receivable: | |||
Total Loans Receivable | 596,310 | 570,567 | 519,569 |
Ending balance: Individually evaluated for impairment | 1,812 | 1,969 | 1,705 |
Ending balance: Collectively evaluated for impairment | 594,498 | 568,598 | 517,864 |
Commercial Real Estate [Member] | |||
Allowance for credit losses: | |||
Beginning balance | 3,795 | 3,831 | 3,834 |
Charge-offs | (200) | (272) | |
Recoveries | 34 | ||
Provision (credit) | 268 | (36) | 235 |
Ending balance | 3,863 | 3,795 | 3,831 |
Ending balance: Individually evaluated for impairment | |||
Ending balance: Collectively evaluated for impairment | 3,863 | 3,795 | 3,831 |
Loans receivable: | |||
Total Loans Receivable | 260,792 | 275,067 | 260,900 |
Ending balance: Individually evaluated for impairment | 1,567 | 1,894 | 1,705 |
Ending balance: Collectively evaluated for impairment | 259,225 | 273,173 | 259,195 |
Consumer Real Estate [Member] | |||
Allowance for credit losses: | |||
Beginning balance | 1,652 | 1,403 | 1,367 |
Charge-offs | (28) | ||
Recoveries | 20 | 10 | |
Provision (credit) | 380 | 239 | 64 |
Ending balance | 2,052 | 1,652 | 1,403 |
Ending balance: Individually evaluated for impairment | |||
Ending balance: Collectively evaluated for impairment | 2,052 | 1,652 | 1,403 |
Loans receivable: | |||
Total Loans Receivable | 249,256 | 213,771 | 181,200 |
Ending balance: Individually evaluated for impairment | |||
Ending balance: Collectively evaluated for impairment | 249,256 | 213,771 | 181,200 |
Commercial and Industrial [Member] | |||
Allowance for credit losses: | |||
Beginning balance | 1,552 | 1,314 | 1,301 |
Charge-offs | (89) | (23) | (44) |
Recoveries | 24 | 193 | 112 |
Provision (credit) | 342 | 68 | (55) |
Ending balance | 1,829 | 1,552 | 1,314 |
Ending balance: Individually evaluated for impairment | |||
Ending balance: Collectively evaluated for impairment | 1,829 | 1,552 | 1,314 |
Loans receivable: | |||
Total Loans Receivable | 80,942 | 77,192 | 73,577 |
Ending balance: Individually evaluated for impairment | 245 | 75 | |
Ending balance: Collectively evaluated for impairment | 80,697 | 77,117 | 73,577 |
Consumer [Member] | |||
Allowance for credit losses: | |||
Beginning balance | 82 | 62 | 66 |
Charge-offs | (28) | (31) | (18) |
Recoveries | 11 | 10 | 3 |
Provision (credit) | 33 | 41 | 11 |
Ending balance | 98 | 82 | 62 |
Ending balance: Individually evaluated for impairment | |||
Ending balance: Collectively evaluated for impairment | 98 | 82 | 62 |
Loans receivable: | |||
Total Loans Receivable | 5,320 | 4,537 | 3,892 |
Ending balance: Individually evaluated for impairment | |||
Ending balance: Collectively evaluated for impairment | 5,320 | 4,537 | 3,892 |
Unallocated [Member] | |||
Allowance for credit losses: | |||
Beginning balance | 481 | 468 | 573 |
Charge-offs | |||
Recoveries | |||
Provision (credit) | (83) | 13 | (105) |
Ending balance | 398 | 481 | 468 |
Ending balance: Individually evaluated for impairment | |||
Ending balance: Collectively evaluated for impairment | $ 398 | $ 481 | $ 468 |
PREMISES AND EQUIPMENT (Narrati
PREMISES AND EQUIPMENT (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 1,391,000 | $ 1,408,000 | $ 1,440,000 |
PREMISES AND EQUIPMENT (Schedul
PREMISES AND EQUIPMENT (Schedule of Premises and Equipment and Accumulated Depreciation) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Premises and equipment, gross | $ 47,750 | $ 43,244 |
Less accumulated depreciation | (22,063) | (20,676) |
Premises and equipment, net | 25,687 | 22,568 |
Land [Member] | ||
Premises and equipment, gross | 5,043 | 3,787 |
Buildings and improvements [Member] | ||
Premises and equipment, gross | 26,424 | 26,307 |
Furniture and Equipment [Member] | ||
Premises and equipment, gross | 13,510 | 12,970 |
Construction in Progress [Member] | ||
Premises and equipment, gross | $ 2,773 | $ 180 |
REGULATORY STOCK (Narrative) (D
REGULATORY STOCK (Narrative) (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Federal Home Loan Bank Stock and Federal Reserve Bank Stock [Abstract] | ||
Federal Home Loan Bank Stock | $ 5,606,000 | $ 5,184,000 |
Federal Reserve Bank Stock | 151,000 | 151,000 |
Atlantic Community Bankers' Bank Stock | $ 37,000 | $ 37,000 |
Federal Home Loan Bank quarterly dividend yield, annualized on activity stock | 6.75% | 5.00% |
Federal Home Loan Bank quarterly dividend yield, annualized on membership stock | 3.50% | 2.00% |
DEPOSITS (Schedule of Deposits
DEPOSITS (Schedule of Deposits by Major Classification) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deposits: | ||
Non-interest bearing demand | $ 314,917 | $ 280,543 |
Interest-bearing demand | 20,230 | 20,108 |
NOW accounts | 86,758 | 85,540 |
Money market deposit accounts | 105,994 | 93,943 |
Savings accounts | 189,169 | 175,753 |
Time deposits under $250,000 | 143,073 | 151,988 |
Time deposits of $250,000 or more | 6,336 | 9,616 |
Total deposits | $ 866,477 | $ 817,491 |
DEPOSITS (Schedule of Maturitie
DEPOSITS (Schedule of Maturities of Time Deposits) (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Maturities of time deposits | |
2,018 | $ 64,234 |
2,019 | 29,406 |
2,020 | 22,479 |
2,021 | 22,355 |
2,022 | 10,935 |
Total | $ 149,409 |
SHORT TERM BORROWINGS (Narrativ
SHORT TERM BORROWINGS (Narrative) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Federal Fund Lines [Member] | |
Amount of borrowings available | $ 32 |
FRB Discount Window [Member] | |
Amount of borrowings available | $ 29.8 |
SHORT TERM BORROWINGS (Schedule
SHORT TERM BORROWINGS (Schedule of Short-Term Borrowings) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Total short-term borrowings outstanding at year end | $ 8,329 | $ 8,736 | |
Short-term Borrowings [Member] | |||
Average interest rate at year end | 0.00% | 0.65% | 0.29% |
Maximum outstanding at any month end | $ 28,674 | $ 16,532 | $ 13,666 |
Average amount outstanding for the year | $ 7,331 | $ 11,087 | $ 8,720 |
Weighted-average interest rate for the year | 0.75% | 0.49% | 0.34% |
OTHER BORROWED FUNDS (Narrative
OTHER BORROWED FUNDS (Narrative) (Details) - Federal Home Loan Bank Advances [Member] $ in Millions | Dec. 31, 2017USD ($) |
Maximum borrowing capacity | $ 352.3 |
Amount available to be borrowed | $ 286.5 |
OTHER BORROWED FUNDS (Schedule
OTHER BORROWED FUNDS (Schedule of Maturities of other borrowings) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Federal Home Loan bank Advances | ||
Federal Home Loan Bank Advances | $ 65,850 | $ 61,257 |
Weighted- Average Rate % | 1.56% | 1.41% |
FHLB Fixed Rate Loans 1 [Member] | ||
Federal Home Loan bank Advances | ||
Maturity Year | 2,017 | 2,017 |
Federal Home Loan Bank Advances | $ 15,000 | |
Weighted- Average Rate % | 1.26% | |
FHLB Fixed Rate Loans 2 [Member] | ||
Federal Home Loan bank Advances | ||
Maturity Year | 2,018 | 2,018 |
Federal Home Loan Bank Advances | $ 14,625 | $ 11,650 |
Weighted- Average Rate % | 1.25% | 1.22% |
FHLB Fixed Rate Loans 3 [Member] | ||
Federal Home Loan bank Advances | ||
Maturity Year | 2,019 | 2,019 |
Federal Home Loan Bank Advances | $ 12,237 | $ 9,267 |
Weighted- Average Rate % | 1.53% | 1.58% |
FHLB Fixed Rate Loans 4 [Member] | ||
Federal Home Loan bank Advances | ||
Maturity Year | 2,020 | 2,020 |
Federal Home Loan Bank Advances | $ 10,677 | $ 10,677 |
Weighted- Average Rate % | 1.59% | 1.59% |
FHLB Fixed Rate Loans 5 [Member] | ||
Federal Home Loan bank Advances | ||
Maturity Year | 2,021 | 2,021 |
Federal Home Loan Bank Advances | $ 14,505 | $ 9,443 |
Weighted- Average Rate % | 1.72% | 1.59% |
FHLB Fixed Rate Loans 6 [Member] | ||
Federal Home Loan bank Advances | ||
Maturity Year | 2,022 | 2,022 |
Federal Home Loan Bank Advances | $ 13,806 | $ 5,220 |
Weighted- Average Rate % | 1.72% | 1.26% |
CAPITAL TRANSACTIONS (Details)
CAPITAL TRANSACTIONS (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | 17 Months Ended | 144 Months Ended | 192 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2017 | Jun. 17, 2015 | |
Class of Stock Disclosures [Abstract] | |||||||
Stock buyback plan authorized | 140,000 | ||||||
Weighted-average cost per share of shares repurchased | $ 33.54 | ||||||
Share discount via stock purchase plan | 10.00% | 10.00% | 10.00% | 10.00% | |||
Treasury stock purchased, shares | 16,500 | 14,000 | 22,935 | 42,635 | |||
Treasury stock issued, shares | 15,941 | 14,858 | 15,623 | ||||
Shares issued under Employee Stock Purchase Plan (ESPP) | 8,162 | 6,880 | 100,652 | ||||
Shares issued under Dividend Reinvestment Plan (DRP) | 6,368 | 6,265 | 91,437 | ||||
Shares issued under Directors' Stock Purchase Plan | 1,411 | 1,713 | 16,236 | ||||
Treasury shares | 19,734 | 19,175 | 19,734 | 19,734 | 19,734 | ||
Weighted-average cost per share of treasury stock | $ 33.65 | $ 33.65 | $ 33.65 | $ 33.65 | |||
Cost basis of treasury shares | $ 664,000 | $ 664,000 | $ 664,000 | $ 664,000 |
RETIREMENT PLANS (Details)
RETIREMENT PLANS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Contribution, percentage | 7.50% | 7.50% | |
Matching contribution, percentage of match | 2.00% | 2.00% | |
401(K) Plan [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Contribution, percentage | 2.50% | ||
Matching contribution, percentage of match | 50.00% | ||
Employee contribution | 5.00% | ||
Working hour in a calender year | 1,000 | ||
Elective contribution [Member] | 401(K) Plan [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employee contribution | 2.00% | ||
Non-Elective contribution [Member] | 401(K) Plan [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employee contribution | 3.00% | ||
Non-Elective contribution [Member] | 401(K) Plan [Member] | Upper Range [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employee contribution | 3.00% | ||
Non-Elective contribution [Member] | 401(K) Plan [Member] | Lower Range [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employee contribution | 2.00% | ||
Pension [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Covered compensation limit of the defined contribution pension plan | $ 270,000 | $ 265,000 | $ 265,000 |
Expenses recognized for defined contribution plans | $ 704,000 | $ 651,000 | $ 497,000 |
Contribution, percentage | 5.00% | 5.00% | 5.00% |
401(k) Plan [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Expenses recognized for defined contribution plans | $ 316,000 | $ 266,000 | $ 225,000 |
Contribution, percentage | 5.00% | ||
Matching contribution, percentage of match | 50.00% | ||
Effective contribution rate | 2.50% | ||
Employee contribution | 5.00% | ||
Working hour in a calender year | 1,000 | ||
401(k) Plan [Member] | Participants Under Age 50 [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Maximum contribution to plans | $ 18,000 | 18,000 | 18,000 |
401(k) Plan [Member] | Participants Over Age 50 [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Maximum contribution to plans | $ 24,000 | $ 24,000 | $ 23,000 |
DEFERRED COMPENSATION (Details)
DEFERRED COMPENSATION (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Deferred Compensation Arrangements [Abstract] | |||
Life insurance policies, aggregate face amount | $ 3,409,000 | $ 3,409,000 | |
Death benefits of life insurance policies | 6,680,000 | 6,399,000 | |
Cash surrender value of life insurance policies | 4,775,000 | 4,726,000 | |
Net present value of deferred life insurance payments | $ 130,000 | $ 279,000 | |
Discount rate used in net present value calculation | 4.50% | 4.50% | |
Deferred compensation expense | $ 9,000 | $ 16,000 | $ 23,000 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Alternative minimum tax credits | $ 1,158,000 | $ 1,043,000 |
INCOME TAXES (Schedule of Incom
INCOME TAXES (Schedule of Income Tax Reconciliation) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||||||||||||
Income tax at statutory rate | $ 2,952 | $ 3,028 | $ 2,811 | ||||||||||||
Tax-exempt interest income | (1,620) | (1,478) | (1,270) | ||||||||||||
Non-deductible interest expense | 72 | 52 | 39 | ||||||||||||
Bank-owned life insurance | (234) | (267) | (247) | ||||||||||||
Other | 37 | 18 | 25 | ||||||||||||
Change in corporate tax rate | 1,131 | ||||||||||||||
Income tax expense | $ 1,403 | $ 391 | $ 287 | $ 257 | $ 308 | $ 445 | $ 218 | $ 382 | $ 455 | $ 382 | $ 278 | $ 243 | $ 2,338 | $ 1,353 | $ 1,358 |
Income tax at statutory rate, rate | 34.00% | 34.00% | 34.00% | ||||||||||||
Tax-exempt interest income, rate | (18.70%) | (16.60%) | (15.40%) | ||||||||||||
Non-deductible interest expense, rate | 0.80% | 0.60% | 0.50% | ||||||||||||
Bank-owned life insurance, rate | (2.70%) | (3.00%) | (3.00%) | ||||||||||||
Other, rate | 0.40% | 0.20% | 0.30% | ||||||||||||
Change in corporate tax rate | 13.10% | ||||||||||||||
Income tax expense, rate | 26.90% | 15.20% | 16.40% |
INCOME TAXES (Schedule of Compo
INCOME TAXES (Schedule of Components of Income Tax Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||||||||||||
Current tax expense | $ 842 | $ 1,734 | $ 1,095 | ||||||||||||
Deferred tax expense (benefit) | 365 | (381) | 275 | ||||||||||||
Valuation allowance adjustment | (12) | ||||||||||||||
Change in corporate tax rate | 1,131 | ||||||||||||||
Income tax expense | $ 1,403 | $ 391 | $ 287 | $ 257 | $ 308 | $ 445 | $ 218 | $ 382 | $ 455 | $ 382 | $ 278 | $ 243 | $ 2,338 | $ 1,353 | $ 1,358 |
INCOME TAXES (Schedule of Com75
INCOME TAXES (Schedule of Components of Corporation's Net Deferred Tax Position) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets | |||
Allowance for loan losses | $ 2,802 | $ 2,571 | $ 2,406 |
Net unrealized holding losses on securities available for sale | 1,016 | 2,516 | 130 |
Deferred compensation reserve | 44 | 95 | 148 |
Capital loss carryforward | 13 | ||
Tax credit carryforward | 1,158 | 1,043 | 1,085 |
Allowance for off-balance sheet extensions of credit | 108 | 117 | 155 |
Interest on non-accrual loans | 174 | 166 | 155 |
Other | 11 | 7 | 7 |
Total deferred tax assets | 5,313 | 6,515 | 4,099 |
Valuation allowance | (13) | ||
Net deferred taxes | 5,313 | 6,515 | 4,086 |
Deferred tax liabilities | |||
Premises and equipment | (2,670) | (1,497) | (1,852) |
Discount on investment securities | (1) | ||
Other | (161) | (41) | (24) |
Total deferred tax liabilities | (2,831) | (1,538) | (1,877) |
Net deferred tax assets | $ 2,482 | $ 4,977 | $ 2,209 |
REGULATORY MATTERS AND RESTRI76
REGULATORY MATTERS AND RESTRICTIONS (Narrative) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Regulatory Capital Requirements [Abstract] | |
Retained net profits available to pay dividends | $ 7.1 |
REGULATORY MATTERS AND RESTRI77
REGULATORY MATTERS AND RESTRICTIONS (Schedule of Retained Net Profits Available to Pay Dividends) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Bank [Member] | ||
Total Capital | ||
Total Capital | $ 109,961 | $ 106,084 |
Total Capital (to risk-weighted assets) ratio | 14.80% | 15.00% |
Amount of capital for adequacy purposes | $ 59,502 | $ 56,634 |
Amount of capital for adequacy purposes, ratio | 8.00% | 8.00% |
To be well-capitalized | $ 74,378 | $ 70,793 |
To be well-capitalized, ratio | 10.00% | 10.00% |
Tier 1 Capital (to risk-weighted assets) | ||
Tier 1 Capital | $ 101,404 | $ 98,176 |
Tier 1 Capital (to risk-weighted assets) ratio | 13.60% | 13.90% |
Amount of Tier 1 Capital for adequacy purposes | $ 44,627 | $ 42,476 |
Amount of Tier 1 Capital for adequacy purposes, ratio | 6.00% | 6.00% |
Tier 1 Capital to be well-capitalized | $ 59,502 | $ 56,634 |
Tier 1 Capital to be well-capitalized, ratio | 8.00% | 8.00% |
Common Equity Tier I Capital (to risk-weighted assets) | ||
Common Equity Tier I Capital | $ 101,404 | $ 98,176 |
Common Equity Tier I Capital ratio | 13.60% | 13.90% |
Amount of Common Equity Tier 1 Capital for adequacy purposes | $ 33,470 | $ 31,857 |
Amount of Common Equity Tier 1 Capital for adequacy purposes, ratio | 4.50% | 4.50% |
Common Equity Tier 1 Capital to be well-capitalized | $ 48,346 | $ 46,016 |
Common Equity Tier 1 Capital to be well-capitalized, ratio | 6.50% | 6.50% |
Tier 1 Leverage Capital (to average assets) | ||
Tier 1 Capital | $ 101,404 | $ 98,176 |
Tier 1 Capital (to average assets) ratio | 9.90% | 10.10% |
Amount of Tier 1 Capital for adequacy purposes | $ 40,971 | $ 39,059 |
Amount of Tier 1 Capital for adequacy purposes, ratio | 4.00% | 4.00% |
Tier 1 Capital to be well-capitalized | $ 51,214 | $ 48,824 |
Tier 1 Capital to be well-capitalized, ratio | 5.00% | 5.00% |
Consolidated [Member] | ||
Total Capital | ||
Total Capital | $ 111,512 | $ 107,732 |
Total Capital (to risk-weighted assets) ratio | 15.00% | 15.20% |
Amount of capital for adequacy purposes | $ 59,525 | $ 56,635 |
Amount of capital for adequacy purposes, ratio | 8.00% | 8.00% |
To be well-capitalized | $ 74,406 | $ 70,794 |
To be well-capitalized, ratio | 10.00% | 10.00% |
Tier 1 Capital (to risk-weighted assets) | ||
Tier 1 Capital | $ 102,955 | $ 99,824 |
Tier 1 Capital (to risk-weighted assets) ratio | 13.80% | 14.10% |
Amount of Tier 1 Capital for adequacy purposes | $ 44,644 | $ 42,476 |
Amount of Tier 1 Capital for adequacy purposes, ratio | 6.00% | 6.00% |
Tier 1 Capital to be well-capitalized | $ 59,525 | $ 56,635 |
Tier 1 Capital to be well-capitalized, ratio | 8.00% | 8.00% |
Common Equity Tier I Capital (to risk-weighted assets) | ||
Common Equity Tier I Capital | $ 102,955 | $ 99,824 |
Common Equity Tier I Capital ratio | 13.80% | 14.10% |
Amount of Common Equity Tier 1 Capital for adequacy purposes | $ 33,483 | $ 31,857 |
Amount of Common Equity Tier 1 Capital for adequacy purposes, ratio | 4.50% | 4.50% |
Common Equity Tier 1 Capital to be well-capitalized | $ 48,364 | $ 46,016 |
Common Equity Tier 1 Capital to be well-capitalized, ratio | 6.50% | 6.50% |
Tier 1 Leverage Capital (to average assets) | ||
Tier 1 Capital | $ 102,955 | $ 99,824 |
Tier 1 Capital (to average assets) ratio | 10.10% | 10.20% |
Amount of Tier 1 Capital for adequacy purposes | $ 40,971 | $ 39,092 |
Amount of Tier 1 Capital for adequacy purposes, ratio | 4.00% | 4.00% |
Tier 1 Capital to be well-capitalized | $ 51,214 | $ 48,865 |
Tier 1 Capital to be well-capitalized, ratio | 5.00% | 5.00% |
TRANSACTIONS WITH DIRECTORS A78
TRANSACTIONS WITH DIRECTORS AND OFFICERS (Narrative) (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Related Party Transactions [Abstract] | ||
Related party deposit liabilities | $ 4,034,000 | $ 4,999,000 |
TRANSACTIONS WITH DIRECTORS A79
TRANSACTIONS WITH DIRECTORS AND OFFICERS (Schedule of Related Party Loans) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Loans to Insiders | ||
Beginning Balance | $ 4,453 | $ 4,248 |
Advances | 3,358 | 2,427 |
Repayments | (2,142) | (2,222) |
Ending Balance | $ 5,669 | $ 4,453 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Commitment to extend credit | $ 270.5 | $ 234.6 |
Loan Commitments [Member] | ||
Commitment to extend credit | 45 | 35.1 |
Line of Credit [Member] | ||
Commitment to extend credit | 214.2 | 189.2 |
Open Letter of Credit [Member] | ||
Commitment to extend credit | $ 11.3 | $ 10.3 |
FINANCIAL INSTRUMENTS WITH CO81
FINANCIAL INSTRUMENTS WITH CONCENTRATIONS OF CREDIT RISK (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Loans receivable: | |||
Legal Lending Limit | $ 16,494,000 | $ 15,913,000 | |
Legal Lending Limit, percent | 15.00% | 15.00% | |
Policy Lending Limit | $ 12,371,000 | $ 11,934,000 | |
Policy Lending Limit, percent | 75.00% | 75.00% | |
Gross loans prior to deferred costs and allowance for loan losses | $ 596,310,000 | $ 570,567,000 | $ 519,569,000 |
Securities Available for sale: | |||
Gross Amortized Cost | 324,503,000 | $ 315,512,000 | |
Commercial and Industrial Tax Free Loans [Member] | |||
Loans receivable: | |||
Gross loans prior to deferred costs and allowance for loan losses | $ 20,700,000 | ||
Commercial and Industrial Tax Free Loans [Member] | Credit concentration risk [Member] | |||
Loans receivable: | |||
Concentration risk (as a percentage) | 3.50% | ||
Total Commercial and Industrial [Member] | |||
Loans receivable: | |||
Gross loans prior to deferred costs and allowance for loan losses | $ 80,900,000 | ||
NAICS Dairy Cattle and Milk Production Loans [Member] | |||
Loans receivable: | |||
Gross loans prior to deferred costs and allowance for loan losses | $ 81,200,000 | ||
NAICS Dairy Cattle and Milk Production Loans [Member] | Credit concentration risk [Member] | Loan [Member] | |||
Loans receivable: | |||
Concentration risk (as a percentage) | 13.60% | ||
NAICS Non-Residential Real Estate Investment Loans [Member] | |||
Loans receivable: | |||
Gross loans prior to deferred costs and allowance for loan losses | $ 38,700,000 | ||
NAICS Non-Residential Real Estate Investment Loans [Member] | Credit concentration risk [Member] | Loan [Member] | |||
Loans receivable: | |||
Concentration risk (as a percentage) | 6.50% | ||
Broilers and other chicken production loans [Member] | |||
Loans receivable: | |||
Gross loans prior to deferred costs and allowance for loan losses | $ 38,800,000 | ||
Broilers and other chicken production loans [Member] | Credit concentration risk [Member] | Loan [Member] | |||
Loans receivable: | |||
Concentration risk (as a percentage) | 6.50% | ||
Commercial Real Estate Agriculture Mortgages [Member] | Credit concentration risk [Member] | Loan [Member] | |||
Loans receivable: | |||
Concentration risk (as a percentage) | 25.50% | 28.70% | |
Commercial Real Estate [Member] | |||
Loans receivable: | |||
Gross loans prior to deferred costs and allowance for loan losses | $ 260,800,000 | ||
Commercial Real Estate [Member] | Credit concentration risk [Member] | Loan [Member] | |||
Loans receivable: | |||
Concentration risk (as a percentage) | 43.70% | ||
Total Consumer Real Estate [Member] | |||
Loans receivable: | |||
Gross loans prior to deferred costs and allowance for loan losses | $ 249,300,000 | $ 213,800,000 | |
Total Consumer Real Estate [Member] | Credit concentration risk [Member] | Loan [Member] | |||
Loans receivable: | |||
Concentration risk (as a percentage) | 41.80% | 37.50% | |
More Typically Known Corporate Bonds [Member] | |||
Securities Available for sale: | |||
Concentration Risk Percentage, as compared to total debt securities | 20.00% | ||
Concentration Risk Percentage, as compared to total municipal securities portfolio | 55.00% | ||
Corporate Bonds [Member] | |||
Securities Available for sale: | |||
Gross Amortized Cost | $ 61,334,000 | $ 52,928,000 | |
Concentration Risk Percentage, as compared to total debt securities | 19.20% | ||
Corporate Bonds [Member] | Non-Financial Commercial Paper [Member] | |||
Securities Available for sale: | |||
Gross Amortized Cost | $ 13,400,000 | ||
Corporate Bonds [Member] | Non-Financial Commercial Paper [Member] | Insurance Companies [Member] | |||
Securities Available for sale: | |||
Gross Amortized Cost | 2,100,000 | ||
Corporate Bonds [Member] | Non-Financial Commercial Paper [Member] | Farm Equipment Companies [Member] | |||
Securities Available for sale: | |||
Gross Amortized Cost | 1,000,000 | ||
Corporate Bonds [Member] | Non-Financial Commercial Paper [Member] | Energy companies [Member] | |||
Securities Available for sale: | |||
Gross Amortized Cost | 4,100,000 | ||
Corporate Bonds [Member] | Non-Financial Commercial Paper [Member] | Real Estate Companies [Member] | |||
Securities Available for sale: | |||
Gross Amortized Cost | 2,100,000 | ||
Corporate Bonds [Member] | Non-Financial Commercial Paper [Member] | Healthcare [Member] | |||
Securities Available for sale: | |||
Gross Amortized Cost | 2,100,000 | ||
Corporate Bonds [Member] | Non-Financial Commercial Paper [Member] | Biotechnology [Member] | |||
Securities Available for sale: | |||
Gross Amortized Cost | 2,000,000 | ||
Corporate Bonds [Member] | Financial and Brokerage Issuers [Member] | |||
Securities Available for sale: | |||
Gross Amortized Cost | $ 47,900,000 | ||
Concentration Risk Percentage, as compared to total corporate bond securities | 78.10% | ||
Corporate Bonds [Member] | Domestic Issuers [Member] | |||
Securities Available for sale: | |||
Gross Amortized Cost | $ 39,100,000 | ||
Corporate Bonds [Member] | Domestic Issuers [Member] | Financial and Brokerage Issuers [Member] | |||
Securities Available for sale: | |||
Gross Amortized Cost | 25,600,000 | ||
Corporate Bonds [Member] | Domestic Issuers [Member] | Financial and Brokerage Issuers [Member] | Commercial Paper - Brokerage [Member] | |||
Securities Available for sale: | |||
Gross Amortized Cost | 11,100,000 | ||
Corporate Bonds [Member] | Domestic Issuers [Member] | Financial and Brokerage Issuers [Member] | Commercial Paper - Bank Debt [Member] | |||
Securities Available for sale: | |||
Gross Amortized Cost | 14,500,000 | ||
Corporate Bonds [Member] | Foreign Issuers [Member] | |||
Securities Available for sale: | |||
Gross Amortized Cost | 22,200,000 | ||
Corporate Bonds [Member] | Foreign Issuers [Member] | Financial and Brokerage Issuers [Member] | |||
Securities Available for sale: | |||
Gross Amortized Cost | 22,300,000 | ||
Corporate Bonds [Member] | Foreign Issuers [Member] | Financial and Brokerage Issuers [Member] | Commercial Paper [Member] | |||
Securities Available for sale: | |||
Gross Amortized Cost | 22,300,000 | ||
Obligations of States and Political Subdivisions - States of Illinois [Member] | |||
Securities Available for sale: | |||
Gross Amortized Cost | $ 15,200,000 | ||
Concentration Risk Percentage, as compared to total debt securities | 4.80% | ||
Concentration Risk Percentage, as compared to total municipal securities portfolio | 13.50% | ||
Obligations of States and Political Subdivisions - State of Texas [Member] | |||
Securities Available for sale: | |||
Gross Amortized Cost | $ 19,500,000 | ||
Concentration Risk Percentage, as compared to total debt securities | 6.20% | ||
Concentration Risk Percentage, as compared to total municipal securities portfolio | 17.40% | ||
Obligations of states and political subdivisions - State of Pennsylvania [Member] | |||
Securities Available for sale: | |||
Gross Amortized Cost | $ 30,400,000 | ||
Concentration Risk Percentage, as compared to total debt securities | 9.70% | ||
Concentration Risk Percentage, as compared to total municipal securities portfolio | 27.10% |
FAIR VALUE MEASUREMENTS (Narrat
FAIR VALUE MEASUREMENTS (Narrative) (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impaired Financing Receivable, Recorded Investment | $ 1,958,000 | $ 1,969,000 | $ 1,957,000 |
CRA Investment Fund [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Marketable equity securities, book value | 5,280,000 | 5,250,000 | |
Regulatory Bank Stock [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Marketable equity securities, book value | 267,000 | 219,000 | |
Regulatory Bank Stock [Member] | Quoted Prices in Active Markets for Identical Assets (Level I) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Marketable equity securities, market value | $ 303,000 | $ 274,000 |
FAIR VALUE MEASUREMENTS (Schedu
FAIR VALUE MEASUREMENTS (Schedule of Assets Measured on Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | $ 319,661 | $ 308,111 |
Fair Value Measured on a Recurring Basis [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | 314,078 | 308,111 |
Fair Value Measured on a Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level I) [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | 5,583 | 5,524 |
Fair Value Measured on a Recurring Basis [Member] | Significant Other Observable Inputs (Level II) [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | 314,078 | 302,587 |
Fair Value Measured on a Recurring Basis [Member] | Significant Unobservable Inputs (Level III) [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | ||
U.S. Government Agencies [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | 34,352 | 32,261 |
U.S. Government Agencies [Member] | Fair Value Measured on a Recurring Basis [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | 34,352 | 32,261 |
U.S. Government Agencies [Member] | Fair Value Measured on a Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level I) [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | ||
U.S. Government Agencies [Member] | Fair Value Measured on a Recurring Basis [Member] | Significant Other Observable Inputs (Level II) [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | 34,352 | 32,261 |
U.S. Government Agencies [Member] | Fair Value Measured on a Recurring Basis [Member] | Significant Unobservable Inputs (Level III) [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | ||
U.S. Agency Mortgage-Backed Securities [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | 52,073 | 55,869 |
U.S. Agency Mortgage-Backed Securities [Member] | Fair Value Measured on a Recurring Basis [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | 52,073 | 55,869 |
U.S. Agency Mortgage-Backed Securities [Member] | Fair Value Measured on a Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level I) [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | ||
U.S. Agency Mortgage-Backed Securities [Member] | Fair Value Measured on a Recurring Basis [Member] | Significant Other Observable Inputs (Level II) [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | 52,073 | 55,869 |
U.S. Agency Mortgage-Backed Securities [Member] | Fair Value Measured on a Recurring Basis [Member] | Significant Unobservable Inputs (Level III) [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | ||
U.S. Agency Collateralized Mortgage Obligations [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | 54,641 | 37,936 |
U.S. Agency Collateralized Mortgage Obligations [Member] | Fair Value Measured on a Recurring Basis [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | 54,641 | 37,936 |
U.S. Agency Collateralized Mortgage Obligations [Member] | Fair Value Measured on a Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level I) [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | ||
U.S. Agency Collateralized Mortgage Obligations [Member] | Fair Value Measured on a Recurring Basis [Member] | Significant Other Observable Inputs (Level II) [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | 54,641 | 37,936 |
U.S. Agency Collateralized Mortgage Obligations [Member] | Fair Value Measured on a Recurring Basis [Member] | Significant Unobservable Inputs (Level III) [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | ||
Corporate Bonds [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | 60,769 | 52,091 |
Corporate Bonds [Member] | Fair Value Measured on a Recurring Basis [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | 60,769 | 52,091 |
Corporate Bonds [Member] | Fair Value Measured on a Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level I) [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | ||
Corporate Bonds [Member] | Fair Value Measured on a Recurring Basis [Member] | Significant Other Observable Inputs (Level II) [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | 60,769 | 52,091 |
Corporate Bonds [Member] | Fair Value Measured on a Recurring Basis [Member] | Significant Unobservable Inputs (Level III) [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | ||
Obligations of States and Political Subdivisions [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | 112,243 | 124,430 |
Obligations of States and Political Subdivisions [Member] | Fair Value Measured on a Recurring Basis [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | 112,243 | 124,430 |
Obligations of States and Political Subdivisions [Member] | Fair Value Measured on a Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level I) [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | ||
Obligations of States and Political Subdivisions [Member] | Fair Value Measured on a Recurring Basis [Member] | Significant Other Observable Inputs (Level II) [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | 112,243 | 124,430 |
Obligations of States and Political Subdivisions [Member] | Fair Value Measured on a Recurring Basis [Member] | Significant Unobservable Inputs (Level III) [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | ||
Marketable equity securities [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | 5,583 | 5,524 |
Marketable equity securities [Member] | Fair Value Measured on a Recurring Basis [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | 5,524 | |
Marketable equity securities [Member] | Fair Value Measured on a Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level I) [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | 5,583 | 5,524 |
Marketable equity securities [Member] | Fair Value Measured on a Recurring Basis [Member] | Significant Other Observable Inputs (Level II) [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) | ||
Marketable equity securities [Member] | Fair Value Measured on a Recurring Basis [Member] | Significant Unobservable Inputs (Level III) [Member] | ||
Recurring Fair Value Measurements | ||
Securities available for sale (at fair value) |
FAIR VALUE MEASUREMENTS (Sche84
FAIR VALUE MEASUREMENTS (Schedule of Assets Measured on Nonrecurring Basis) (Details) - Fair Value Measured on a Nonrecurring Basis [Member] - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Non-Recurring Fair Value Measurements | ||
Impaired Loans | $ 1,812 | $ 1,969 |
OREO | ||
Total Fair Value, non-recurring | 1,812 | 1,969 |
Quoted Prices in Active Markets for Identical Assets (Level I) [Member] | ||
Non-Recurring Fair Value Measurements | ||
Impaired Loans | ||
OREO | ||
Total Fair Value, non-recurring | ||
Significant Other Observable Inputs (Level II) [Member] | ||
Non-Recurring Fair Value Measurements | ||
Impaired Loans | ||
OREO | ||
Total Fair Value, non-recurring | ||
Significant Unobservable Inputs (Level III) [Member] | ||
Non-Recurring Fair Value Measurements | ||
Impaired Loans | 1,812 | 1,969 |
OREO | ||
Total Fair Value, non-recurring | $ 1,812 | $ 1,969 |
FAIR VALUE MEASUREMENTS (Sche85
FAIR VALUE MEASUREMENTS (Schedule of Level III Inputs to Determine Fair Value) (Details) - Impaired Loans [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Total Fair Value, non-recurring | $ 1,812 | $ 1,969 | |
Valuation Techniques | [1] | Appraisal of collateral | Appraisal of collateral |
Lower Range [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Total Fair Value, non-recurring | $ 1,812 | $ 1,969 | |
Unobservable inputs - Appraisal adjustments | (20.00%) | (20.00%) | |
Unobservable inputs - Liquidation expenses | (10.00%) | (10.00%) | |
Upper Range [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Total Fair Value, non-recurring | $ 1,812 | $ 1,969 | |
Unobservable inputs - Appraisal adjustments | 0.00% | 0.00% | |
Unobservable inputs - Liquidation expenses | 0.00% | 0.00% | |
Weighted Average [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Total Fair Value, non-recurring | $ 1,812 | $ 1,969 | |
Unobservable inputs - Appraisal adjustments | (20.00%) | (20.00%) | |
Unobservable inputs - Liquidation expenses | (10.00%) | (10.00%) | |
[1] | Fair value is generally determined through independent appraisals of the underlying collateral, which generally includes various level III inputs which are not identifiable. |
DISCLOSURES ABOUT FAIR VALUE 86
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Financial Assets: | ||||
Cash and cash equivalents | $ 53,073 | $ 45,632 | $ 44,227 | $ 43,412 |
Securities available for sale | 319,661 | 308,111 | ||
Regulatory stock | 5,794 | 5,372 | ||
Loans, net of allowance | 589,313 | 564,005 | ||
Bank owned life insurance | 27,814 | 24,687 | ||
Financial Liabilities: | ||||
Demand deposits | 314,917 | 280,543 | ||
Interest-bearing demand deposits | 20,230 | 20,108 | ||
NOW accounts | 86,758 | 85,540 | ||
Money market deposit accounts | 105,994 | 93,943 | ||
Savings accounts | 189,169 | 175,753 | ||
Total deposits | 866,477 | 817,491 | ||
Short-term borrowings | 8,329 | $ 8,736 | ||
Long-term debt | 65,850 | 61,257 | ||
Carrying Amount [Member] | ||||
Financial Assets: | ||||
Cash and cash equivalents | 53,073 | 45,632 | ||
Securities available for sale | 319,661 | 308,111 | ||
Regulatory stock | 5,794 | 5,372 | ||
Loans held for sale | 2,892 | 2,552 | ||
Loans, net of allowance | 589,313 | 564,005 | ||
Accrued interest receivable | 3,684 | 3,750 | ||
Bank owned life insurance | 27,814 | 24,687 | ||
Financial Liabilities: | ||||
Demand deposits | 314,917 | 280,543 | ||
Interest-bearing demand deposits | 20,230 | 20,108 | ||
NOW accounts | 86,758 | 85,540 | ||
Money market deposit accounts | 105,994 | 93,943 | ||
Savings accounts | 189,169 | 175,753 | ||
Time deposits | 149,409 | 161,604 | ||
Total deposits | 866,477 | 817,491 | ||
Short-term borrowings | 8,329 | |||
Long-term debt | 65,850 | 61,257 | ||
Accrued interest payable | 385 | 384 | ||
Fair Value [Member] | ||||
Financial Assets: | ||||
Cash and cash equivalents | 53,073 | 45,632 | ||
Securities available for sale | 319,661 | 308,111 | ||
Regulatory stock | 5,794 | 5,372 | ||
Loans held for sale | 2,892 | 2,552 | ||
Loans, net of allowance | 590,415 | 563,418 | ||
Accrued interest receivable | 3,684 | 3,750 | ||
Bank owned life insurance | 27,814 | 24,687 | ||
Financial Liabilities: | ||||
Demand deposits | 314,917 | 280,543 | ||
Interest-bearing demand deposits | 20,230 | 20,108 | ||
NOW accounts | 86,758 | 85,540 | ||
Money market deposit accounts | 105,994 | 93,943 | ||
Savings accounts | 189,169 | 175,753 | ||
Time deposits | 150,165 | 163,464 | ||
Total deposits | 867,233 | 819,351 | ||
Short-term borrowings | 8,329 | |||
Long-term debt | 65,850 | 61,372 | ||
Accrued interest payable | 385 | 384 | ||
Fair Value [Member] | Quoted Prices in Active Markets for Identical Assets (Level I) [Member] | ||||
Financial Assets: | ||||
Cash and cash equivalents | 53,073 | 45,632 | ||
Securities available for sale | 5,583 | 5,524 | ||
Regulatory stock | 5,794 | 5,372 | ||
Loans held for sale | 2,892 | 2,552 | ||
Loans, net of allowance | ||||
Accrued interest receivable | 3,684 | 3,750 | ||
Bank owned life insurance | 27,814 | 24,687 | ||
Financial Liabilities: | ||||
Demand deposits | 314,917 | 280,543 | ||
Interest-bearing demand deposits | 20,230 | 20,108 | ||
NOW accounts | 86,758 | 85,540 | ||
Money market deposit accounts | 105,994 | 93,943 | ||
Savings accounts | 189,169 | 175,753 | ||
Time deposits | ||||
Total deposits | 717,068 | 655,887 | ||
Short-term borrowings | 8,329 | |||
Long-term debt | ||||
Accrued interest payable | 385 | 384 | ||
Fair Value [Member] | Significant Other Observable Inputs (Level II) [Member] | ||||
Financial Assets: | ||||
Cash and cash equivalents | ||||
Securities available for sale | 314,078 | 302,587 | ||
Regulatory stock | ||||
Loans held for sale | ||||
Loans, net of allowance | ||||
Accrued interest receivable | ||||
Bank owned life insurance | ||||
Financial Liabilities: | ||||
Demand deposits | ||||
Interest-bearing demand deposits | ||||
NOW accounts | ||||
Money market deposit accounts | ||||
Savings accounts | ||||
Time deposits | ||||
Total deposits | ||||
Short-term borrowings | ||||
Long-term debt | ||||
Accrued interest payable | ||||
Fair Value [Member] | Significant Unobservable Inputs (Level III) [Member] | ||||
Financial Assets: | ||||
Cash and cash equivalents | ||||
Securities available for sale | ||||
Regulatory stock | ||||
Loans held for sale | ||||
Loans, net of allowance | 590,415 | 563,418 | ||
Accrued interest receivable | ||||
Bank owned life insurance | ||||
Financial Liabilities: | ||||
Demand deposits | ||||
Interest-bearing demand deposits | ||||
NOW accounts | ||||
Money market deposit accounts | ||||
Savings accounts | ||||
Time deposits | 150,165 | 163,464 | ||
Total deposits | 150,165 | 163,464 | ||
Short-term borrowings | ||||
Long-term debt | 65,850 | 61,372 | ||
Accrued interest payable |
ACCUMULATED OTHER COMPREHENSI87
ACCUMULATED OTHER COMPREHENSIVE LOSS (Schedule of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning | $ 94,939 | $ 95,102 | $ 92,767 | |
Other comprehensive income (loss), net of tax | 1,690 | (4,633) | (1,254) | |
Balance, ending | $ 99,759 | $ 94,939 | $ 95,102 | |
Federal income tax rate | 34.00% | 34.00% | 34.00% | |
Unrealized Gain (Losses) on Securities AFS [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning | [1],[2] | $ (4,885) | $ (252) | |
Other comprehensive income before reclassifications | [1],[2] | 2,135 | (3,069) | |
Amount reclassified from accumulated other comprehensive loss | [1],[2] | (445) | (1,564) | |
Other comprehensive income (loss), net of tax | [1],[2] | 1,690 | (4,633) | |
Balance, ending | [1],[2] | $ (3,195) | $ (4,885) | $ (252) |
Federal income tax rate | 34.00% | 34.00% | ||
[1] | All amounts are net of tax. Related income tax expense or benefit is calculated using a Federal income tax rate of 34%. | |||
[2] | Amounts in parentheses indicate debits. |
ACCUMULATED OTHER COMPREHENSI88
ACCUMULATED OTHER COMPREHENSIVE LOSS (Schedule of Amounts Reclassified from AOCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||||||
Gains on securities transactions, net | $ 675 | $ 2,370 | $ 2,840 | ||||||||||||
Provision for federal income taxes | $ (1,403) | $ (391) | $ (287) | $ (257) | $ (308) | $ (445) | $ (218) | $ (382) | $ (455) | $ (382) | $ (278) | $ (243) | (2,338) | (1,353) | (1,358) |
Reclassifications for the period | $ 611 | $ 2,034 | $ 1,872 | $ 1,827 | $ 1,920 | $ 2,077 | $ 1,644 | $ 1,912 | $ 1,995 | $ 1,853 | $ 1,596 | $ 1,466 | 6,344 | 7,553 | $ 6,910 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | |||||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||||||
Reclassifications for the period | 445 | 1,564 | |||||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gain (Losses) on Securities AFS [Member] | |||||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||||||
Gains on securities transactions, net | 675 | 2,370 | |||||||||||||
Provision for federal income taxes | (230) | (806) | |||||||||||||
Reclassifications for the period | $ 445 | $ 1,564 |
CONDENSED PARENT ONLY DATA (Con
CONDENSED PARENT ONLY DATA (Condensed Balance Sheets) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
ASSETS | ||||
Cash | $ 53,073 | $ 45,632 | $ 44,227 | $ 43,412 |
Securities available for sale (at fair value) | 319,661 | 308,111 | ||
Other assets | 9,388 | 11,326 | ||
Total assets | 1,033,622 | 984,253 | ||
Stockholders' Equity: | ||||
Capital stock | 574 | 574 | ||
Capital surplus | 4,415 | 4,403 | ||
Retained earnings | 98,629 | 95,475 | ||
Accumulated other comprehensive loss, net of tax | (3,195) | (4,885) | ||
Treasury stock | (664) | (628) | ||
Total stockholders' equity | 99,759 | 94,939 | 95,102 | 92,767 |
Parent Company [Member] | ||||
ASSETS | ||||
Cash | 1,187 | 1,356 | $ 509 | $ 702 |
Securities available for sale (at fair value) | 304 | 274 | ||
Equity in bank subsidiary | 98,184 | 93,255 | ||
Other assets | 84 | 54 | ||
Total assets | 99,759 | 94,939 | ||
Stockholders' Equity: | ||||
Capital stock | 574 | 574 | ||
Capital surplus | 4,415 | 4,403 | ||
Retained earnings | 98,629 | 95,475 | ||
Accumulated other comprehensive loss, net of tax | (3,195) | (4,885) | ||
Treasury stock | (664) | (628) | ||
Total stockholders' equity | $ 99,759 | $ 94,939 |
CONDENSED PARENT ONLY DATA (C90
CONDENSED PARENT ONLY DATA (Condensed Statements of Comprehensive Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income | |||||||||||||||
Gains on securities transactions | $ 675 | $ 2,370 | $ 2,840 | ||||||||||||
Dividend income | 387 | 335 | 359 | ||||||||||||
Expense | |||||||||||||||
Other expenses | 2,518 | 2,315 | 2,351 | ||||||||||||
Total expenses | $ 7,997 | $ 7,647 | $ 7,715 | $ 7,518 | $ 7,258 | $ 6,748 | $ 6,712 | $ 6,482 | $ 6,308 | $ 6,090 | $ 6,187 | $ 6,150 | 30,877 | 27,200 | 24,735 |
Net income | $ 611 | $ 2,034 | $ 1,872 | $ 1,827 | $ 1,920 | $ 2,077 | $ 1,644 | $ 1,912 | $ 1,995 | $ 1,853 | $ 1,596 | $ 1,466 | 6,344 | 7,553 | 6,910 |
Comprehensive Income | 8,034 | 2,920 | 5,656 | ||||||||||||
Parent Company [Member] | |||||||||||||||
Income | |||||||||||||||
Dividend income - investment securities | 10 | 29 | 16 | ||||||||||||
Gains on securities transactions | 57 | 171 | 25 | ||||||||||||
Dividend income | 3,190 | 3,606 | 3,581 | ||||||||||||
Undistributed earnings of bank subsidiary | 3,228 | 3,918 | 3,462 | ||||||||||||
Total Income | 6,485 | 7,724 | 7,084 | ||||||||||||
Expense | |||||||||||||||
Shareholder expenses | 120 | 125 | 118 | ||||||||||||
Other expenses | 21 | 46 | 56 | ||||||||||||
Total expenses | 141 | 171 | 174 | ||||||||||||
Net income | 6,344 | 7,553 | 6,910 | ||||||||||||
Comprehensive Income | $ 8,034 | $ 2,920 | $ 5,656 |
CONDENSED PARENT ONLY DATA (C91
CONDENSED PARENT ONLY DATA (Condensed Statements of Cash Flows) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash Flows from Operating Activities: | |||||||||||||||
Net income | $ 611 | $ 2,034 | $ 1,872 | $ 1,827 | $ 1,920 | $ 2,077 | $ 1,644 | $ 1,912 | $ 1,995 | $ 1,853 | $ 1,596 | $ 1,466 | $ 6,344 | $ 7,553 | $ 6,910 |
Gains on securities transactions, net | (675) | (2,370) | (2,840) | ||||||||||||
Net cash provided by operating activities | 11,350 | 10,444 | 10,408 | ||||||||||||
Cash Flows from Investing Activities: | |||||||||||||||
Proceeds from sales of securities available for sale | 80,642 | 163,085 | 154,384 | ||||||||||||
Purchases of securities available for sale | (114,269) | (251,616) | (199,023) | ||||||||||||
Net cash provided by (used for) investing activities | (45,945) | (84,641) | (52,713) | ||||||||||||
Cash Flows from Financing Activities: | |||||||||||||||
Proceeds from issuance of treasury stock | 544 | 489 | 512 | ||||||||||||
Payment to repurchase common stock | (568) | (465) | (752) | ||||||||||||
Dividends paid | (3,190) | (3,107) | (3,081) | ||||||||||||
Net cash used for financing activities | 42,036 | 75,602 | 43,120 | ||||||||||||
Cash and Cash Equivalents: | |||||||||||||||
Net change in cash and cash equivalents | 7,441 | 1,405 | 815 | ||||||||||||
Cash and cash equivalents at beginning of period | 45,632 | 44,227 | 43,412 | 45,632 | 44,227 | 43,412 | |||||||||
Cash and cash equivalents at end of period | 53,073 | 45,632 | 44,227 | 53,073 | 45,632 | 44,227 | |||||||||
Parent Company [Member] | |||||||||||||||
Cash Flows from Operating Activities: | |||||||||||||||
Net income | 6,344 | 7,553 | 6,910 | ||||||||||||
Equity in undistributed earnings of subsidiaries | (3,228) | (3,918) | (3,462) | ||||||||||||
Gains on securities transactions, net | (57) | (171) | (25) | ||||||||||||
Net change in other assets | (30) | 12 | 5 | ||||||||||||
Net cash provided by operating activities | 3,029 | 3,476 | 3,428 | ||||||||||||
Cash Flows from Investing Activities: | |||||||||||||||
Proceeds from sales of securities available for sale | 150 | 812 | 167 | ||||||||||||
Purchases of securities available for sale | (134) | (358) | (467) | ||||||||||||
Net cash provided by (used for) investing activities | 16 | 454 | (300) | ||||||||||||
Cash Flows from Financing Activities: | |||||||||||||||
Proceeds from issuance of treasury stock | 544 | 489 | 512 | ||||||||||||
Payment to repurchase common stock | (568) | (465) | (752) | ||||||||||||
Dividends paid | (3,190) | (3,107) | (3,081) | ||||||||||||
Net cash used for financing activities | (3,214) | (3,083) | (3,321) | ||||||||||||
Cash and Cash Equivalents: | |||||||||||||||
Net change in cash and cash equivalents | (169) | 847 | (193) | ||||||||||||
Cash and cash equivalents at beginning of period | $ 1,356 | $ 509 | $ 702 | 1,356 | 509 | 702 | |||||||||
Cash and cash equivalents at end of period | $ 1,187 | $ 1,356 | $ 509 | $ 1,187 | $ 1,356 | $ 509 |
SUMMARY OF QUARTERLY FINANCIA92
SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Data [Abstract] | |||||||||||||||
Interest income | $ 8,478 | $ 8,444 | $ 8,213 | $ 7,982 | $ 7,768 | $ 7,393 | $ 6,294 | $ 6,886 | $ 6,491 | $ 6,761 | $ 6,718 | $ 6,872 | $ 33,117 | $ 28,341 | $ 26,842 |
Interest expense | 752 | 754 | 731 | 702 | 735 | 751 | 757 | 811 | 851 | 928 | 951 | 1,014 | 2,939 | 3,054 | 3,744 |
Net interest income | 7,726 | 7,690 | 7,482 | 7,280 | 7,033 | 6,642 | 5,537 | 6,075 | 5,640 | 5,833 | 5,767 | 5,858 | 30,178 | 25,287 | 23,098 |
Less provision (credit) for loan losses | 490 | 240 | 120 | 90 | 125 | 200 | 50 | (50) | (150) | 100 | 200 | ||||
Net interest income after credit for loan losses | 7,236 | 7,450 | 7,362 | 7,190 | 6,908 | 6,442 | 5,487 | 6,125 | 5,640 | 5,983 | 5,667 | 5,658 | 29,238 | 24,962 | 22,948 |
Other income | 2,775 | 2,622 | 2,512 | 2,412 | 2,578 | 2,828 | 3,087 | 2,651 | 3,118 | 2,342 | 2,394 | 2,201 | 10,321 | 11,144 | 10,055 |
Operating expenses: | |||||||||||||||
Salaries and employee benefits | 4,970 | 4,840 | 4,811 | 4,719 | 4,539 | 4,219 | 4,040 | 3,971 | 3,741 | 3,679 | 3,674 | 3,702 | 19,340 | 16,769 | 14,796 |
Occupancy and equipment expenses | 873 | 923 | 902 | 881 | 879 | 831 | 787 | 777 | 783 | 791 | 822 | 822 | |||
Other operating expenses | 2,154 | 1,884 | 2,002 | 1,918 | 1,840 | 1,698 | 1,885 | 1,734 | 1,784 | 1,620 | 1,691 | 1,626 | |||
Total operating expenses | 7,997 | 7,647 | 7,715 | 7,518 | 7,258 | 6,748 | 6,712 | 6,482 | 6,308 | 6,090 | 6,187 | 6,150 | 30,877 | 27,200 | 24,735 |
Income before income taxes | 2,014 | 2,425 | 2,159 | 2,084 | 2,228 | 2,522 | 1,862 | 2,294 | 2,450 | 2,235 | 1,874 | 1,709 | 8,682 | 8,906 | 8,268 |
Provision for Federal income taxes | 1,403 | 391 | 287 | 257 | 308 | 445 | 218 | 382 | 455 | 382 | 278 | 243 | 2,338 | 1,353 | 1,358 |
Net income | $ 611 | $ 2,034 | $ 1,872 | $ 1,827 | $ 1,920 | $ 2,077 | $ 1,644 | $ 1,912 | $ 1,995 | $ 1,853 | $ 1,596 | $ 1,466 | $ 6,344 | $ 7,553 | $ 6,910 |
Earnings per share of common stock | $ 0.21 | $ 0.71 | $ 0.66 | $ 0.64 | $ 0.67 | $ 0.73 | $ 0.58 | $ 0.67 | $ 0.70 | $ 0.65 | $ 0.56 | $ 0.51 | $ 2.23 | $ 2.65 | $ 2.42 |
Cash dividends paid per share | $ 0.28 | $ 0.28 | $ 0.28 | $ 0.28 | $ 0.28 | $ 0.27 | $ 0.27 | $ 0.27 | $ 0.27 | $ 0.27 | $ 0.27 | $ 0.27 | $ 1.12 | $ 1.09 | $ 1.08 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Subsequent Events Details | |
Expected life insurance proceeds | $ 910 |