Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 08, 2017 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | ENTEGRA FINANCIAL CORP. | ||
Entity Central Index Key | 1,522,327 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
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 | Accelerated Filer | ||
Entity Public Float | $ 109,700 | ||
Entity Common Stock, Shares Outstanding | 6,467,946 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Cash and due from banks | $ 10,709 | $ 8,421 |
Interest-earning deposits | 32,585 | 32,229 |
Cash and cash equivalents | 43,294 | 40,650 |
Investments - trading | 5,211 | 4,714 |
Investments - available for sale | 398,291 | 238,862 |
Investments - held to maturity (fair value of $41,812 at December 31, 2015 ) | 41,164 | |
Other investments, at cost | 15,261 | 8,834 |
Loans held for sale | 4,584 | 8,348 |
Loans receivable | 744,361 | 624,072 |
Allowance for loan losses | (9,305) | (9,461) |
Fixed assets, net | 20,209 | 17,673 |
Real estate owned | 4,226 | 5,369 |
Interest receivable | 5,012 | 3,554 |
Bank owned life insurance | 31,347 | 20,858 |
Net deferred tax asset | 18,985 | 18,830 |
Loan servicing rights | 2,603 | 2,344 |
Goodwill | 2,065 | 711 |
Core deposit intangible | 979 | 590 |
Other assets | 5,754 | 4,304 |
Total assets | 1,292,877 | 1,031,416 |
Liabilities: | ||
Deposits | 830,013 | 716,617 |
Federal Home Loan Bank advances | 298,500 | 153,500 |
Junior subordinated notes | 14,433 | 14,433 |
Other borrowings | 2,725 | 2,198 |
Post employment benefits | 10,211 | 10,224 |
Accrued interest payable | 254 | 213 |
Other liabilities | 3,673 | 2,762 |
Total liabilities | 1,159,809 | 899,947 |
Commitments and contingencies (Notes 8 and 25) | ||
Equity: | ||
Preferred stock - no par value, 10,000,000 shares authorized; none issued and outstanding | ||
Common stock - no par value, 50,000,000 shares authorized; 6,467,550 and 6,546,375 shares issued and outstanding as of December 31, 2016 and 2015, respectively | ||
Common stock held by Rabbi Trust, at cost; 14,000 shares at December 31, 2016 and 2015 | (279) | (279) |
Additional paid in capital | 62,664 | 63,722 |
Retained earnings | 76,139 | 69,763 |
Accumulated other comprehensive loss | (5,456) | (1,736) |
Total equity | 133,068 | 131,469 |
Total liabilities and equity | $ 1,292,877 | $ 1,031,416 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Investment - held to maturity at fair value | $ 41,812 | |
Preferred stock, par value | $ 0 | $ 0 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0 | $ 0 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 6,467,550 | 6,546,375 |
Common stock, shares outstanding | 6,467,550 | 6,546,375 |
Common Stock held by Rabbi Trust | 14,000 | 14,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Interest income: | |||
Interest and fees on loans | $ 32,324 | $ 27,027 | $ 27,597 |
Interest on tax exempt loans | 337 | 141 | 68 |
Taxable securities | 5,628 | 5,223 | 4,139 |
Tax-exempt securities | 1,510 | 379 | 347 |
Interest-earning deposits | 210 | 75 | 95 |
Other | 511 | 299 | 199 |
Total interest and dividend income | 40,520 | 33,144 | 32,445 |
Interest expense: | |||
Deposits | 3,964 | 4,334 | 5,361 |
Federal Home Loan Bank advances | 1,419 | 826 | 703 |
Junior subordinated notes | 532 | 458 | 509 |
Other borrowings | 117 | 105 | |
Total interest expense | 6,032 | 5,723 | 6,573 |
Net interest income | 34,488 | 27,421 | 25,872 |
Provision for loan losses | 274 | (1,500) | 33 |
Net interest income after provision for loan losses | 34,214 | 28,921 | 25,839 |
Noninterest income: | |||
Servicing income, net | 487 | 341 | 565 |
Mortgage banking | 904 | 774 | 800 |
Gain on sale of SBA loans | 928 | 823 | 629 |
Gain on sale of investments, net | 1,216 | 403 | 657 |
Other than temporary impairment on cost method investment | (3) | (76) | |
Service charges on deposit accounts | 1,537 | 1,269 | 1,203 |
Interchange fees | 1,507 | 1,278 | 1,126 |
Bank owned life insurance | 489 | 457 | 456 |
Other | 778 | 453 | 719 |
Total noninterest income | 7,846 | 5,795 | 6,079 |
Noninterest expenses: | |||
Compensation and employee benefits | 17,164 | 14,625 | 11,843 |
Net occupancy | 3,534 | 2,986 | 2,697 |
Federal Home Loan Bank prepayment penalties | 118 | 1,762 | |
Marketing and advertising | 1,070 | 535 | 333 |
Federal deposit insurance | 562 | 905 | 1,265 |
Professional and advisory | 959 | 1,005 | 722 |
Data processing | 1,554 | 1,213 | 1,082 |
Merger-related expenses | 2,197 | 329 | |
Net cost of operation of real estate owned | 730 | 505 | 2,970 |
Other | 4,301 | 3,765 | 2,855 |
Total noninterest expenses | 32,189 | 27,630 | 23,767 |
Income before taxes | 9,871 | 7,086 | 8,151 |
Income tax expense (benefit) | 3,495 | (16,739) | 2,208 |
Net income (loss) | $ 6,376 | $ 23,825 | $ 5,943 |
Earnings per common share: | |||
Earnings per share - basic | $ 0.98 | $ 3.64 | $ 0.91 |
Earnings per share - diluted | $ 0.98 | $ 3.64 | $ 0.91 |
Weighted average common shares outstanding: | |||
Common shares outstanding - Basic | 6,477,284 | 6,546,375 | 6,546,375 |
Common shares outstanding - Diluted | 6,489,931 | 6,546,375 | 6,546,375 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 6,376 | $ 23,825 | $ 5,943 |
Other comprehensive income (loss): | |||
Change in unrealized holding gains and losses on securities available for sale | (6,652) | (166) | 5,665 |
Reclassification adjustment for securities gains realized in net income | (1,216) | (403) | (657) |
Amortization of unrealized loss on securities transferred to held to maturity | 578 | 984 | 199 |
Reduction in unrealized loss related to held to maturity securities transferred to available-for-sale | 325 | ||
Change in deferred tax valuation allowance attributable to unrealized gains and losses on investment securities available for sale | 377 | 289 | 1,992 |
Change in unrealized holding gains and losses on cash flow hedge | 476 | ||
Other comprehensive income (loss), before tax | (6,112) | 704 | 7,199 |
Income tax effect related to items of other comprehensive income (loss) | 2,392 | (171) | (1,992) |
Other comprehensive income (loss), after tax | (3,720) | 533 | 5,207 |
Comprehensive income (loss) | $ 2,656 | $ 24,358 | $ 11,150 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Common Stock held by Rabbi Trust | Total |
Beginning Balance at Dec. 31, 2013 | $ 39,994 | $ (7,476) | $ 32,518 | |||
Beginning Balance (in shares) at Dec. 31, 2013 | ||||||
Net income (loss) | 5,943 | 5,943 | ||||
Other comprehensive income, net of tax | 5,207 | 5,207 | ||||
Issuance of common stock | 65,464 | 65,464 | ||||
Issuance of common stock (in shares) | 6,546,375 | |||||
Common stock issuance costs | (1,813) | (1,813) | ||||
Stock compensation expense | ||||||
Purchase of stock to fund Rabbi Trust | ||||||
Ending Balance at Dec. 31, 2014 | 63,651 | 45,937 | (2,269) | 107,319 | ||
Ending Balance (in shares) at Dec. 31, 2014 | 6,546,375 | |||||
Net income (loss) | 23,825 | 23,825 | ||||
Other comprehensive income, net of tax | 533 | 533 | ||||
Common stock issuance costs | (1,813) | |||||
Stock compensation expense | 71 | 71 | ||||
Purchase of stock to fund Rabbi Trust | (279) | (279) | ||||
Ending Balance at Dec. 31, 2015 | 63,722 | 69,763 | (1,736) | (279) | 131,469 | |
Ending Balance (in shares) at Dec. 31, 2015 | 6,546,375 | |||||
Net income (loss) | 6,376 | 6,376 | ||||
Other comprehensive income, net of tax | (3,720) | (3,720) | ||||
Stock compensation expense | 864 | 864 | ||||
Vesting of restricted stock units, net shares surrendered | (87) | (87) | ||||
Vesting of restricted stock units (in shares) | 25,743 | |||||
Repurchase of common stock | (1,835) | (1,835) | ||||
Repurchase of common stock (in shares) | (104,568) | |||||
Purchase of stock to fund Rabbi Trust | ||||||
Ending Balance at Dec. 31, 2016 | $ 62,664 | $ 76,139 | $ (5,456) | $ (279) | $ 133,068 | |
Ending Balance (in shares) at Dec. 31, 2016 | 6,467,550 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 6,376 | $ 23,825 | $ 5,943 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and leasehold amortization | 1,096 | 1,002 | 875 |
Security amortization, net | 2,445 | 2,046 | 1,159 |
Trading account income | (328) | ||
Provision for loan losses | 274 | (1,500) | 33 |
Provision for real estate owned | 655 | 250 | 2,349 |
Share-based compensation expense | 864 | 71 | |
Change in net deferred tax asset | 2,922 | (16,437) | 2,121 |
Net increase (decrease) in deferred loan fees | (465) | (307) | 237 |
Gain on sales of securities available for sale | (1,216) | (403) | (657) |
Other than temporary impairment on cost method investment | 3 | 76 | |
Loss on disposal of fixed assets | 3 | 8 | |
Income on bank owned life insurance, net | (489) | (441) | (456) |
Mortgage banking income, net | (904) | (774) | (800) |
Gain on sale of SBA loans | (928) | (823) | (629) |
Net realized loss on sale of real estate owned | (222) | (71) | 49 |
Loans originated for sale | (40,288) | (35,649) | (31,939) |
Proceeds from sale of loans originated for sale | 45,884 | 39,659 | 28,295 |
Net change in operating assets and liabilities: | |||
Interest receivable | (906) | (629) | (252) |
Loan servicing rights | (259) | (157) | (304) |
Other assets | 1,500 | (1,439) | (544) |
Postemployment benefits | (13) | 465 | (440) |
Accrued interest payable | 11 | (110) | (1,700) |
Other liabilities | 628 | 1,225 | 18 |
Net cash provided by operating activities | 16,637 | 9,809 | 3,442 |
Activity for investment securities: | |||
Purchases | (267,263) | (129,960) | (115,617) |
Maturities/calls and principal repayments | 46,246 | 56,638 | 30,484 |
Sales | 124,823 | 39,022 | 19,170 |
Purchase of trading securities | (4,714) | ||
Net (increase) decrease in loans | (56,829) | (59,002) | (17,477) |
Purchased loans | (25,189) | ||
Net cash received in branch acquisition | 31,878 | ||
Proceeds from sale of real estate owned | 2,173 | 1,495 | 4,355 |
Real estate cost capitalized | (83) | (68) | |
Purchase of fixed assets | (357) | (3,556) | (881) |
Disposal of real estate held for investments | 2,430 | ||
Purchase of other investments, at cost | (5,873) | (4,076) | (1,462) |
Redemptions of other investments, at cost | 150 | 213 | |
Net cash paid in business combination | (5,913) | ||
Purchase of bank owned life insurance | (10,000) | ||
Net cash used in investing activities | (172,993) | (94,967) | (81,283) |
Cash flows from financing activities: | |||
Net increase (decrease) in deposits | 24,973 | (26,372) | 18,855 |
Net increase (decrease) in escrow deposits | (26) | (23) | 36 |
Proceeds from FHLB advances | 795,600 | 245,600 | 20,000 |
Repayment of FHLB advances | (659,625) | (152,100) | |
Purchase of common stock for Rabbi Trust | (279) | ||
Proceeds from sale of common stock | 63,651 | 63,651 | |
Repurchase of common stock | (1,835) | ||
Net cash provided by financing activities | 159,000 | 66,826 | 102,542 |
Increase (decrease) in cash and cash equivalents | 2,644 | (18,332) | 24,701 |
Cash and cash equivalents, beginning of period | 40,650 | 58,982 | 34,281 |
Cash and cash equivalents, end of period | 43,294 | 40,650 | 58,982 |
Cash paid during the year for: | |||
Interest on deposits and other borrowings | 6,021 | 5,833 | 8,273 |
Income taxes | 150 | 150 | |
Acquisitions | |||
Assets acquired | 110,010 | ||
Liabilities assumed | 97,878 | ||
Net assets | 12,132 | ||
Noncash investing and financing activities: | |||
Real estate acquired in satisfaction of mortgage loans | 748 | 3,350 | 2,200 |
Loans originated for disposition of real estate owned | 208 | 3,260 | 1,596 |
Transfer of investment securities available for sale to held to maturity | 4,473 | ||
Purchased loans and investments to be settled | 532 | 7,185 | |
Transfer of real estate owned to real estate held for investment | $ 30,368 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | NOTE 1. ORGANIZATION Entegra Financial Corp. (the “Company”) was incorporated on May 31, 2011 and became the holding company for Entegra Bank (the “Bank”) on September 30, 2014 upon the completion of Macon Bancorp’s merger with and into Entegra Financial Corp., pursuant to which Macon Bancorp converted from the mutual to stock form of organization. The Company’s primary operation is its investment in the Bank. The Company also owns 100% of the common stock of Macon Capital Trust I (the “Trust”), a Delaware statutory trust formed in 2003 to facilitate the issuance of trust preferred securities. The Bank is a North Carolina state-chartered savings bank and has a wholly owned subsidiary, Entegra Services, Inc., which previously owned a real estate investment property but was inactive as of December 31, 2016. The consolidated financials are presented in these financial statements. The Bank operates as a community-focused retail bank, originating primarily real estate based mortgage, consumer and commercial loans and accepting deposits from consumers and small businesses. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting and reporting policies of the Company conform, in all material respects, to U.S. generally accepted accounting principles, or GAAP, and to general practices within the banking industry. The following summarizes the more significant of these policies and practices. Estimates Material estimates that are particularly susceptible to significant change, in the near term, relate to the determination of the allowance for loan losses and the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans. In connection with the determination of the allowance for loan losses and the valuation of foreclosed real estate, management obtains independent appraisals for significant properties. Principles of Consolidation Reclassification Business Combinations Cash and Cash Equivalents Trading Assets Securities Available-for-Sale (“AFS”) and Held-to-Maturity (“HTM”) Held-to-maturity securities represent those securities that we have the positive intent and ability to hold to maturity and are carried at amortized cost. Realized gains and losses on the sale of securities and other-than-temporary impairment (“OTTI”) charges are recorded as a component of noninterest income in the Consolidated Statements of Operations. Realized gains and losses on the sale of securities are determined using the specific-identification method. Bond premiums are amortized to the call date and bond discounts are accreted to the maturity date, both on a level yield basis. We perform a quarterly review of our securities to identify those that may indicate OTTI. Our policy for OTTI within the debt securities portfolio is based upon a number of factors, including, but not limited to, the length of time and extent to which the estimated fair value has been less than cost, the financial condition of the underlying issuer and the ability of the issuer to meet contractual obligations. Other factors include the likelihood of the security’s ability to recover any decline in its estimated fair value and whether management intends to sell the security, or if it is more likely than not that management will be required to sell the investment security prior to the security’s recovery. The Company reclassified certain of its securities from available-for-sale to held-to-maturity during the years ended December 31, 2014 and 2013 in an effort to minimize the impact of future interest rate changes on Accumulated Other Comprehensive Income (Loss). The difference between the book values and fair values at the date of the transfer was reported in a separate component of Accumulated Other Comprehensive Income (Loss), and amortized into income over the remaining life of the securities as an adjustment of yield in a manner consistent with the amortization of a premium. Concurrently, the revised book values of the transferred securities (represented by the market value on the date of transfer) are amortized back to their par values over the remaining life of the security as an adjustment of yield in a manner consistent with the amortization of a discount. In the third quarter of 2016, the Company transferred its held-to-maturity investment portfolio to available-for-sale in order to provide more flexibility managing its investment portfolio. As a result, the Company is prohibited from classifying any investment securities as held-to-maturity for two years from the date of the transfer. Loans Held for Sale We generally sell the guaranteed portion of SBA loans in the secondary market and retain the unguaranteed portion in our portfolio. Upon sale of the guaranteed portion of an SBA loan, we recognize a portion of the gain on sale into income and defer a portion of the gain related to the relative fair value of the unguaranteed loan balance we retain. The deferred gain is amortized into income over the remaining life of the loan. Loans Receivable Generally, consumer loans are charged down to their estimated collateral value after reaching 90 days past due. The number of days past due is determined by the amount of time from when the payment was due based on contractual terms. Commercial loans are charged off as management becomes aware of facts and circumstances that raise doubt as to the collectability of all or a portion of the principal and when we believe a confirmed loss exists. The Company began originating and selling the guaranteed portion of SBA loans into the secondary market during the year ended December 31, 2013. When the Company retains the right to service a sold SBA loan, the previous carrying amount is allocated between the guaranteed portion of the loan sold, the unguaranteed portion of the loan retained and the retained SBA servicing right based on their relative fair values on the date of transfer. Nonaccrual Loans For loans modified in a troubled debt restructuring, the loan is generally placed on non-accrual until there is a period of satisfactory payment performance by the borrower (either immediately before or after the restructuring), generally defined as six months, and the ultimate collectability of all amounts contractually due is not in doubt. Troubled Debt Restructurings (“TDR”) All TDRs are considered to be impaired loans and will be reported as an impaired loan for the remaining life of the loan, unless the restructuring agreement specifies an interest rate equal to or greater than the rate that would be accepted at the time of the restructuring for a new loan with comparable risk and it is fully expected that the original principal and interest will be collected according to the restructured agreement. We may also remove a loan from TDR and impaired status if the TDR is subsequently restructured and at the time of the subsequent restructuring the borrower is not experiencing financial difficulties and, under the terms of the subsequent restructuring agreement, no concession has been granted to the borrower. Allowance for Loan Losses (“ALL”) A loan is considered impaired when it is probable that we will be unable to collect all principal and interest payments due according to the original contractual terms of the loan agreement. We individually evaluate all loans classified as substandard or nonaccrual greater than $350,000 for impairment. If the impaired loan is considered collateral dependent, a charge-off is taken based upon the appraised value of the property (less an estimate of selling costs if foreclosure is anticipated). If the impaired loan is not collateral dependent, a specific reserve is established based upon an estimate of the future discounted cash flows after consideration of modifications and the likelihood of future default and prepayment. The allowance for non-impaired loans consists of a base historical loss reserve and a qualitative reserve. Prior to the first quarter of 2015, we more heavily weighted the most recent four quarters than the least recent four quarters. Beginning in the first quarter of 2015, we no longer weight any quarters to calculate our average loss rates. This change in weighting did not have a material impact on our allowance for loan losses methodology. The loss rates for the base loss reserve are segmented into 13 loan categories and contain loss rates ranging from approximately 0.5% to 5%. The qualitative reserve adjusts the average loss rates utilized in the base loss reserve for trends in the following internal and external factors: · Non-accrual and classified loans · Collateral values · Loan concentrations and loan growth · Economic conditions – including unemployment rates, building permits, and a regional economic index. Qualitative reserve adjustment factors are decreased for favorable trends and increased for unfavorable trends. These factors are subject to further adjustment as economic and other conditions change. Fixed Assets Real Estate Owned Subsequent to foreclosure, real estate owned is recorded at the lower of carrying amount or fair value less estimated costs to sell. Valuations are periodically performed by management, but not less than every eighteen months, and an additional allowance for losses is established by a charge to Net Cost of Operation of Real Estate Owned in the Consolidated Statements of Operations, if necessary. Other Investments, at cost FHLB stock is carried at cost and evaluated for impairment based on the ultimate recoverability of the par value. The Company has evaluated its FHLB stock and concluded that it is not impaired because the FHLB Atlanta is currently paying cash dividends and redeeming stock at par. The FHLB requires members to purchase and hold a specified level of stock based upon on the members asset value, level of borrowings and participation in other programs offered. Stock in the FHLB is non-marketable and is redeemable at the discretion of the FHLB. Members do not purchase stock in the FHLB for the same reasons that traditional equity investors acquire stock in an investor-owned enterprise. Rather, members purchase stock to obtain access to the low-cost products and services offered by the FHLB. Unlike equity securities of traditional for-profit enterprises, the stock of the FHLB does not provide its holders with an opportunity for capital appreciation because, by regulation, FHLB stock can only be purchased, redeemed and transferred at par value. Both cash and stock dividends are reported as Other interest income in the Consolidated Statements of Operations. Bank Owned Life Insurance (“BOLI”) Loan Servicing Rights (“LSR”) Servicing fee income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal (generally 25 basis points for residential mortgage loans and 100 basis points for SBA loans) or a fixed amount per loan, and are recorded as income when earned. Changes in fair value of LSR’s are netted against loan servicing fee income and reported as Servicing income (expense), net in the Consolidated Statements of Operations. Goodwill and Other Intangible Assets The goodwill impairment analysis is a two-step test. The first, used to identify potential impairment, involves comparing each reporting unit’s estimated fair value to its carrying value, including goodwill. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill is not considered to be impaired. If the carrying value exceeds estimated fair value, there is an indication of potential impairment and the second step is performed to measure the amount of impairment. Authoritative guidance gives entities the option of first performing a qualitative assessment to test goodwill for impairment on a reporting-unit basis. If, after performing the qualitative assessment, an entity concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the entity would perform the two-step goodwill impairment test. However, if, after applying the qualitative assessment, the entity concludes that it is not more likely than not that the fair value is less than the carrying amount, the two-step goodwill impairment test is not required. Core deposit intangibles are amortized over the estimated useful lives of the deposit accounts acquired (generally seven years on a straight line basis). Derivative Financial Instruments and Hedging Activities – Interest Rate Lock Commitments and Forward Sale Contracts Our interest rate risk management strategy incorporates the use of derivative instruments to minimize fluctuations in net income that are caused by interest rate volatility. The goal is to manage interest rate sensitivity by modifying the repricing or maturity characteristics of certain balance sheet assets and liabilities so that net interest revenue is not, on a material basis, adversely affected by movements in interest rates. We view this strategy as a prudent management of interest rate risk, such that net income is not exposed to undue risk presented by changes in interest rates. In carrying out this part of its interest rate risk management strategy, we use interest rate derivative contracts; primarily interest rate swaps. Interest rate swaps generally involve the exchange of fixed- and variable-rate interest payments between two parties, based on a common notional principal amount and maturity date. We classify our derivative financial instruments as either (1) a hedge of an exposure to changes in the fair value of a recorded asset or liability (“fair value hedge”), (2) a hedge of an exposure to changes in the cash flows of a recognized asset, liability or forecasted transaction (“cash flow hedge”), or (3) derivatives not designated as accounting hedges. Changes in the fair value of derivatives not designated as hedges are recognized in current period earnings. Our interest rate swaps are classified as cash flow hedges and as such, adjustments to fair value are recorded in Accumulated Other Comprehensive Income. Small Business Investment Company Investments Advertising Expense Income Taxes Deferred income tax assets and liabilities are determined using the asset and liability method and are reported net in the Consolidated Balance Sheets. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax basis of assets and liabilities and recognizes enacted changes in tax rate and laws. When deferred tax assets are recognized, they are subject to a valuation allowance based on management’s judgment as to whether realization is more likely than not. In determining the need for a valuation allowance, the Company considers the following sources of taxable income: · Future reversals of existing taxable temporary differences · Future taxable income exclusive of reversing temporary differences and carry forwards · Taxable income in prior carryback years · Tax planning strategies that would, if necessary, be implemented As a result of the analysis above, the Company concluded that a valuation allowance was not necessary as of December 31, 2016 and 2015. The Company maintained a full valuation allowance as of December 31, 2014 except for consideration of certain tax planning strategies. Accrued taxes represent the net estimated amount due to taxing jurisdictions and are reported in other assets or other liabilities, as appropriate, in the Consolidated Balance Sheets. We evaluate and assess the relative risks and appropriate tax treatment of transactions and filing positions after considering statutes, regulations, judicial precedent and other information and maintain tax accruals consistent with the evaluation of these relative risks and merits. Changes to the estimate of accrued taxes occur periodically due to changes in tax rates, interpretations of tax laws, the status of examinations being conducted by taxing authorities and changes to statutory, judicial and regulatory guidance. These changes, when they occur, can affect deferred taxes and accrued taxes, as well as the current period’s income tax expense and can be significant to our operating results. Tax positions are recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50 percent likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Allowance for Unfunded Commitments Junior Subordinated Notes Stock-based Compensation Tax benefits realized upon the vesting of restricted shares that exceed the expense previously recognized for reporting purposes are recorded through the income statement as income tax benefit. If the tax benefit upon vesting is less than the expense previously recorded, the shortfall is recorded through the income statement as income tax expense. Segments Subsequent Events Recently Issued Accounting Standards In January 2016, the Financial Accounting Standards Board (“FASB”) amended the Financial Instruments In March 2016, the FASB amended the Revenue from Contracts with Customers In March 2016, the FASB issued guidance to simplify several aspects of the accounting for share-based payment award transactions including the income tax consequences, the classification of awards as either equity or liabilities, and the classification on the statement of cash flows. Additionally, the guidance simplifies two areas specific to entities other than public business entities allowing them to apply a practical expedient to estimate the expected term for all awards with performance or service conditions that have certain characteristics and also allowing them to make a one-time election to switch from measuring all liability-classified awards at fair value to measuring them at intrinsic value. The guidance will be effective for the Company for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The Company does not expect this guidance to have a material effect on its financial statements. In June 2016, the FASB issued amendments to Accounting Standards Update (“ASU”) 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In March 2016, the FASB issued ASU No. 2016-09 “ Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting In August 2016, the FASB issued ASU No. 2016-15 , “Classification of Certain Cash Receipts and Cash Payments.” In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement Period Adjustments In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. |
STOCK CONVERSION AND CHANGE IN
STOCK CONVERSION AND CHANGE IN CORPORATE FORM | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
STOCK CONVERSION AND CHANGE IN CORPORATE FORM | NOTE 3. STOCK CONVERSION AND CHANGE IN CORPORATE FORM On January 23, 2014, the Board of Directors of Macon Bancorp adopted a Plan of Conversion (the “Plan of Conversion”) which provided for the reorganization of Macon Bancorp from a North Carolina chartered mutual holding company into a stock holding company, Entegra Financial Corp., incorporated under the laws of the State of North Carolina (the “Conversion”). In connection with the Conversion, the Company sold 6,546,375 shares of common stock at an offering price of $10.00 per share and received gross sales proceeds of $65.5 million. The Company recognized $1.8 million in reorganization and stock issuance costs which have been deducted from the gross sales proceeds. Of the $63.7 million in net sales proceeds, $44.6 million, or approximately 70%, was contributed to the capital of the Bank upon completion of the Conversion on September 30, 2014. Common Stock Offering Summary (Dollars in thousands) Gross proceeds $ 65,464 Issuance costs (1,813 ) Net proceeds $ 63,651 Contributed to the Bank $ 44,581 Retained by the Company 19,070 $ 63,651 On September 30, 2014, liquidation accounts were established by the Company and the Bank for the benefit of eligible depositors of the Bank as defined in the Plan of Conversion. Each eligible depositor will have a pro rata interest in the liquidation accounts for each of his or her deposit accounts based upon the proportion that the balance of each such account bears to the balance of all deposit accounts of the Bank as of the dates specified in the Plan of Conversion. The liquidation accounts will be maintained for the benefit of eligible depositors who continue to maintain their deposit accounts in the Bank. The liquidation accounts will be reduced annually to the extent that eligible depositors reduce their qualifying deposits. In the unlikely event of a complete liquidation of the Bank or the Company or both, and only in such event, eligible depositors who continue to maintain accounts will be entitled to receive a distribution from the liquidation accounts before any distribution may be made with respect to common stock. Neither the Company nor the Bank may declare or pay a cash dividend if the effect thereof would cause its equity to be reduced below either the amount required for the liquidation accounts or the regulatory capital requirements imposed by the Company’s or the Bank’s regulators. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
ACQUISITIONS | NOTE 4. ACQUISITIONS The Company has determined that the acquisitions described below constitute a business combination as defined in ASC Topic 805, Business Combinations Fair Value Measurements On April 1, 2016, the Bank acquired Old Town Bank of Waynesville, North Carolina. In connection with the acquisition, the Bank acquired $110.0 million of assets and assumed $97.9 million of liabilities. Total consideration transferred was $13.5 million of cash. The fair value of consideration paid exceeded the fair value of the identifiable assets and liabilities acquired and resulted in the establishment of goodwill in the amount of $1.4 million, none of which is deductible for tax purposes. Loans purchased with evidence of credit impairment were not material. The purchased assets and assumed liabilities were recorded at their acquisition date fair values, and are summarized in the table below ( in thousands. As recorded by Fair Value As recorded by Assets Cash and cash equivalents $ 7,573 $ — $ 7,573 Investments 30,882 246 31,128 Loans 64,573 272 64,845 Fixed assets 3,414 (22 ) 3,392 Interest receivable 552 — 552 Core deposit intangible — 530 530 Other real estate owned 880 43 923 Deferred tax asset 259 207 466 Other assets 938 (337 ) 601 Total assets acquired $ 109,071 $ 939 $ 110,010 Liabilities Deposits $ 88,059 $ 648 $ 88,707 FHLB advances 9,000 25 9,025 Accrued Interest payable 30 — 30 Other liabilities 125 (9 ) 116 Total liabilities assumed 97,214 664 97,878 Excess of assets acquired over liabities assumed $ 11,857 $ 275 $ 12,132 Purchase price 13,486 Goodwill $ 1,354 On December 11, 2015, the Bank completed its acquisition of two branches from Arthur State Bank (“ASB”). In accordance with the Purchase and Assumption Agreement, dated August 13, 2015, by and between the Bank and ASB (the “P&A Agreement”), the Bank acquired approximately $39.9 million of deposits, approximately $4.7 million of performing loans, and the bank facilities and certain other assets. In consideration of the purchased assets and transferred liabilities, the Bank paid (1) the recorded investment of the loans acquired, (2) the fair value, or approximately $2.1 million, for the branch facilities and certain assets, and (3) a deposit premium of $1.2 million, equal to 2.87% of the average daily deposits for the 30- day period immediately prior to the acquisition date. The following table summarizes the assets acquired and liabilities assumed at the date of acquisition and their initial fair values: (Dollars in thousands) As Recorded by ASB Fair Value Adjustments As Recorded by the Company Assets Cash and cash equivalents $ 33,076 $ — $ 33,076 Loans 4,717 (72 )(a) 4,645 Premises and equipment 2,080 — 2,080 Core deposit intangible — 590 (b) 590 Other assets 16 — 16 Total assets acquired $ 39,889 $ 518 $ 40,407 Liabilities Deposits: Noninterest-bearing demand $ 22,084 $ — 22,084 Interest-bearing demand 15 — 15 Money market 2,556 — 2,556 Savings 7,242 — 7,242 Time deposits 7,967 31 (c) 7,998 Total deposits 39,864 31 39,895 Other liabilities 25 — 25 Total liabilities assumed 39,889 31 39,920 Excess of assets acquired over liabilities assumed $ — $ 487 $ 487 Purchase price 1,198 Goodwill $ 711 Fair values are subject to refinement for a period not to exceed one year after the closing date of an acquisition as information relative to closing date fair values becomes available. In particular, the fair value of collateral dependent loans and other real estate owned may change to the extent that the Company receives updated appraisals indicating changes in valuation assumptions at acquisition. Pro forma disclosures are not significant and not meaningful. On October 19, 2016, the Bank entered into a definitive agreement with Stearns Bank, N.A. (Stearns) pursuant to which the Bank acquired two branches in northern Georgia on February 24, 2017. The Bank assumed approximately $150.0 million in deposits and paid a deposit premium of 3.65%. |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES | NOTE 5. INVESTMENT SECURITIES The following table presents the holdings of our trading account as of December 31, 2016 and December 31, 2015: December 31, 2016 2015 (Dollars in thousands) Trading account $ 5,211 $ 4,714 The trading account is held in a Rabbi Trust and seeks to generate returns that will offset the change in liabilities related to market risk of certain deferred compensation agreements. There were $0.5 million of realized gains for the year ended December 31, 2016, and no changes in 2015. The Company’s HTM investment portfolio was transferred to available-for-sale during the third quarter of 2016 in order to provide the Company more flexibility managing its investment portfolio. As a result of the transfer, the Company is prohibited from classifying any investment securities as held-to-maturity for two years from the date of the transfer. The amortized cost and estimated fair values of securities classified as AFS are summarized as follows: December 31, 2016 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value (Dollars in thousands) U.S. government agencies $ 12,076 $ 31 $ — $ 12,107 Municipal securities 152,208 337 (5,774 ) 146,771 Mortgage-backed securities — U.S. government agencies 128,820 107 (2,161 ) 126,766 SBA securities 30,002 13 (303 ) 29,712 Collateralized mortgage obligations 62,524 16 (1,081 ) 61,459 U.S. Treasury securities 2,501 15 (2 ) 2,514 Corporate bonds 18,354 171 (167 ) 18,358 Mutual funds 616 — (12 ) 604 $ 407,101 $ 690 $ (9,500 ) $ 398,291 December 31, 2015 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value (Dollars in thousands) U.S. government agencies $ 25,633 $ 123 $ (36 ) $ 25,720 Municipal securities 39,751 311 (204 ) 39,858 Mortgage-backed securities U.S. government agencies 112,857 178 (1,025 ) 112,010 SBA securities 47,768 86 (272 ) 47,582 Collateralized mortgage obligations 11,702 12 (132 ) 11,582 U.S. Treasury securities 1,500 10 — 1,510 Mutual funds 602 — (2 ) 600 $ 239,813 $ 720 $ (1,671 ) $ 238,862 The amortized cost and estimated fair values of securities HTM as of December 31, 2015 are summarized below. As of December 31, 2016, the Company did not hold any securities classified as HTM. December 31, 2015 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value (Dollars in thousands) U.S. government agencies $ 15,877 $ 645 $ (23 ) $ 16,499 Municipal securities 12,428 199 (93 ) 12,534 Mortgage-backed securities Collateralized mortgage obligations 4,834 4 (62 ) 4,776 U.S. Treasury securities 1,002 — (7 ) 995 Corporate debt securities 7,023 25 (40 ) 7,008 $ 41,164 $ 873 $ (225 ) $ 41,812 Information pertaining to the activity of unrealized losses related to HTM securities (before the impact of income taxes) previously recognized in accumulated other comprehensive income (“AOCI”) is summarized below: Year Ended December 31, (Dollars in thousands) 2016 2015 2014 Beginning unrealized loss related to HTM securities previously recognized in AOCI $ 903 $ 1,887 $ 2,012 Additions for transfers to HTM — — 74 Amortization of unrealized losses on HTM securities previously recognized in AOCI (578 ) (984 ) (199 ) Reduction from transfers to AFS (325 ) — — Ending unrealized loss related to HTM securities previously recognized in AOCI $ — $ 903 $ 1,887 Information pertaining to securities with gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows: December 31, 2016 Less Than 12 Months More Than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (Dollars in thousands) Held-to-Maturity: $ — $ — $ — $ — $ — $ — Available-for-Sale: Municipal securities $ 122,468 $ 5,759 $ 331 $ 15 $ 122,799 $ 5,774 Mortgage-backed securities U.S. government agencies 101,382 2,068 5,102 93 106,484 2,161 SBA 15,199 145 11,434 158 26,633 303 Collateralized mortgage obligations 53,513 1,035 1,058 46 54,571 1,081 U.S. Treasury securities 1,000 2 — — 1,000 2 Corporate debt securities 6,741 167 — — 6,741 167 Mutual funds 616 12 — — 616 12 $ 300,919 $ 9,188 $ 17,925 $ 312 $ 318,844 $ 9,500 December 31, 2015 Less Than 12 Months More Than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (Dollars in thousands) Held to Maturity: U.S. government agencies $ 5,705 $ 23 $ — $ — $ 5,705 $ 23 Municipal securities 4,365 93 — — 4,365 93 Mortgage-backed securities Collateralized mortgage obligation 2,693 62 2,693 62 U.S. Treasury securities 995 7 — — 995 7 Corporate debt securities 4,911 40 — — 4,911 40 $ 18,669 $ 225 $ — $ — $ 18,669 $ 225 Available for Sale: U.S. government agencies $ 13,317 $ 36 $ — $ — $ 13,317 $ 36 Municipal securities 18,769 176 947 28 19,716 204 Mortgage-backed securities U.S. government agencies 73,476 662 13,892 363 87,368 1,025 SBA 23,012 190 5,730 82 28,742 272 Collateralized mortgage obligations 5,931 74 1,283 58 7,214 132 Mutual funds 600 2 — — 600 2 $ 135,105 $ 1,140 $ 21,852 $ 531 $ 156,957 $ 1,671 Information pertaining to the number of securities with unrealized losses is detailed in the table below. Management of the Company believes all unrealized losses as of December 31, 2016 and 2015 represent temporary impairment. The unrealized losses have resulted from temporary changes in the interest rate market and not as a result of credit deterioration. We do not intend to sell and it is not likely that we will be required to sell any of the securities referenced in the table below before recovery of their amortized cost. December 31, 2016 Less Than 12 Months More Than 12 Months Total Municipal securities 129 1 130 Mortgage-backed securities U.S. government agencies 66 5 71 SBA 11 8 19 Collateralized mortgage obligations 25 1 26 U.S. Treasury securities 1 — 1 Corporate debt securities 8 — 8 240 15 255 December 31, 2015 Less Than 12 Months More Than 12 Months Total U.S. government agencies 13 — 13 Municipal securities 51 2 53 Mortgage-backed securities U.S. government agencies 52 9 61 SBA 14 5 19 Collateralized mortgage obligations 5 1 6 U.S. Treasury securities 1 — 1 Corporate debt securities 9 — 9 Mutual funds 1 — 1 146 17 163 The Company received proceeds from sales of securities classified as AFS and corresponding gross realized gains and losses as follows: For the Year Ended December 31, 2016 2015 2014 (Dollars in thousands) Gross proceeds $ 124,823 $ 39,022 $ 19,170 Gross realized gains 1,261 423 680 Gross realized losses 45 20 — The Company had securities pledged against deposits and borrowings of approximately $237.1 million and $69.6 million at December 31, 2016 and 2015, respectively. The amortized cost and estimated fair value of investments in debt securities at December 31, 2016, by contractual maturity, is shown below. Mortgage-backed securities have not been scheduled because expected maturities will differ from contractual maturities when borrowers have the right to prepay the obligations. Available for Sale Amortized Cost Fair Value (Dollars in thousands) Less than 1 year $ 6,373 $ 6,369 Over 1 year through 5 years 17,845 17,846 After 5 years through 10 years 30,784 30,638 Over 10 years 130,753 125,501 185,755 180,354 Mortgage-backed securities 221,346 217,937 Total $ 407,101 $ 398,291 |
LOANS RECEIVABLE
LOANS RECEIVABLE | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
LOANS RECEIVABLE | NOTE 6. LOANS RECEIVABLE Loans receivable balances are summarized as follows: December 31, 2016 2015 (Dollars in thousands) Real estate mortgage loans: One-to four-family residential $ 278,437 $ 248,633 Commercial real estate 292,879 214,413 Home equity loans and lines of credit 50,334 53,446 Residential construction 18,531 7,848 Other construction and land 60,605 57,316 Total real estate loans 700,786 581,656 Commercial and industrial 41,306 41,046 Consumer 4,594 3,639 Total commercial and consumer 45,900 44,685 Loans receivable, gross 746,686 626,341 Less: Net deferred loan fees (923 ) (1,388 ) Fair value discount (857 ) (72 ) Unamortized premium 605 557 Unamortized discount (1,150 ) (1,366 ) Loans receivable, net of deferred fees $ 744,361 $ 624,072 The Bank had $144.3 million and $119.5 million of loans pledged as collateral to secure funding with FHLB at December 31, 2016 and 2015, respectively. The Bank also had $89.1 million and $88.4 million of loans pledged as collateral to secure funding with the FRB Discount Window at December 31, 2016 and 2015, respectively. Included in loans receivable and other borrowings at December 31, 2016 and 2015 are $2.7 million and $2.2 million in participated loans, respectively, that did not qualify for sale accounting. Interest expense on the other borrowings accrues at the same rate as the interest income recognized on the loans receivable, resulting in no effect to net income. The following table presents the activity related to the discount on individually purchased loans: For the Year Ended December 31, (Dollars in thousands) 2016 2015 2014 Discount on purchased loans, beginning of period $ 1,366 $ 1,487 $ — Additional discount for new purchases — 485 2,607 Accretion (216 ) (311 ) (365 ) Discount applied to charge-offs — (295 ) — Interest income recognized for repayments and restructurings — — (755 ) Discount on purchased loans, end of period $ 1,150 $ 1,366 $ 1,487 The following table presents the activity related to the fair value discount on acquired loans: For the Year Ended December 31, (Dollars in thousands) 2016 2015 2014 Fair value discount, beginning of period $ 72 $ — $ — Additional discount for acquisitions 960 72 — Accretion (175 ) — — Discount on purchased loans, end of period $ 857 $ 72 $ — There were no purchase credit impaired loans as of December 31, 2016. The aggregate principal amounts outstanding to executive officers and directors of the Company made in the ordinary course of business as of and for the years ended December 31 is detailed in the table below: December 31, 2016 2015 Beginning of year $ 8,930 $ 9,307 New loans 51 30 Repayments (759 ) (407 ) End of year $ 8,222 $ 8,930 |
ALLOWANCE FOR LOAN LOSSES
ALLOWANCE FOR LOAN LOSSES | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
ALLOWANCE FOR LOAN LOSSES | NOTE 7. ALLOWANCE FOR LOAN LOSSES The following tables present, by portfolio segment, the activity in the allowance for loan losses: Year Ended December 31, 2016 One-to four Family Residential Commercial Real Estate Home Equity and Lines of Credit Residential Construction Other Construction and Land Commercial Consumer Total (Dollars in thousands) Beginning balance $ 2,455 $ 3,221 $ 1,097 $ 278 $ 1,400 $ 603 $ 407 $ 9,461 Provision 413 1,016 (486 ) (125 ) (122 ) (85 ) (337 ) 274 Charge-offs (133 ) (431 ) (158 ) — (560 ) (63 ) (201 ) (1,546 ) Recoveries 77 173 224 32 130 144 336 1,116 Ending balance $ 2,812 $ 3,979 $ 677 $ 185 $ 848 $ 599 $ 205 $ 9,305 Year Ended December 31, 2015 One-to four Family Residential Commercial Real Estate Home Equity and Lines of Credit Residential Construction Other Construction and Land Commercial Consumer Total (Dollars in thousands) Beginning balance $ 2,983 $ 2,717 $ 1,333 $ 510 $ 2,936 $ 308 $ 285 $ 11,072 Provision (251 ) 388 200 (235 ) (1,741 ) 272 (133 ) (1,500 ) Charge-offs (536 ) (52 ) (540 ) — (137 ) (9 ) (48 ) $ (1,322 ) Recoveries 259 168 104 3 342 32 303 1,211 Ending balance $ 2,455 $ 3,221 $ 1,097 $ 278 $ 1,400 $ 603 $ 407 $ 9,461 Year Ended December 31, 2014 One-to four Family Residential Commercial Real Estate Home Equity and Lines of Credit Residential Construction Other Construction and Land Commercial Consumer Total (Dollars in thousands) Beginning balance $ 3,693 $ 4,360 $ 1,580 $ 501 $ 3,516 $ 336 $ 265 $ 14,251 Provision (201 ) 408 310 9 (232 ) (58 ) (203 ) 33 Charge-offs (702 ) (2,415 ) (598 ) — (566 ) (133 ) (140 ) (4,554 ) Recoveries 193 364 41 — 218 163 363 1,342 Ending balance $ 2,983 $ 2,717 $ 1,333 $ 510 $ 2,936 $ 308 $ 285 $ 11,072 The following tables present, by portfolio segment and reserving methodology, the allocation of the allowance for loan losses and the gross investment in loans: December 31, 2016 One-to four Family Residential Commercial Real Estate Home Equity and Lines of Credit Residential Construction Other Construction and Land Commercial Consumer Total (Dollars in thousands) Allowance for loan losses Individually evaluated for impairment $ 201 $ 178 $ 2 $ — $ 175 $ 28 $ — $ 584 Collectively evaluated for impairment 2,611 3,801 675 185 673 571 205 8,721 $ 2,812 $ 3,979 $ 677 $ 185 $ 848 $ 599 $ 205 $ 9,305 Loans Receivable Individually evaluated for impairment $ 3,814 $ 8,153 $ 313 $ — $ 1,720 $ 306 $ — $ 14,306 Collectively evaluated for impairment 274,623 284,726 50,021 18,531 58,885 41,000 4,594 732,380 $ 278,437 $ 292,879 $ 50,334 $ 18,531 $ 60,605 $ 41,306 $ 4,594 $ 746,686 December 31, 2015 One-to four Family Residential Commercial Real Estate Home Equity and Lines of Credit Residential Construction Other Construction and Land Commercial Consumer Total (Dollars in thousands) Allowance for loan losses Individually evaluated for impairment $ 344 $ 61 $ 6 $ — $ 61 $ 38 $ — $ 510 Collectively evaluated for impairment 2,111 3,160 1,091 278 1,339 565 407 8,951 $ 2,455 $ 3,221 $ 1,097 $ 278 $ 1,400 $ 603 $ 407 $ 9,461 Loans Receivable Individually evaluated for impairment $ 6,315 $ 9,013 $ 313 $ — $ 1,509 $ 318 $ — $ 17,468 Collectively evaluated for impairment 242,318 205,400 53,133 7,848 55,807 40,728 3,639 608,873 $ 248,633 $ 214,413 $ 53,446 $ 7,848 $ 57,316 $ 41,046 $ 3,639 $ 626,341 Portfolio Quality Indicators The Company’s portfolio grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled. The Company’s internal credit risk grading system is based on experiences with similarly graded loans, industry best practices, and regulatory guidance. Credit risk grades are refreshed each quarter, at which time management analyzes the resulting information, as well as other external statistics and factors, to track loan performance. The Company’s internally assigned grades pursuant to the Board-approved lending policy are as follows: · Pass (1-5) – Acceptable loans with any identifiable weaknesses appropriately mitigated. · Special Mention (6) – Potential weakness or identifiable weakness present without appropriate mitigating factors; however, loan continues to perform satisfactorily with no material delinquency noted. This may include some deterioration in repayment capacity and/or loan-to-value of securing collateral. · Substandard (7) – Significant weakness that remains unmitigated, most likely due to diminished repayment capacity, serious delinquency, and/or marginal performance based upon restructured loan terms. · Doubtful (8) – Significant weakness that remains unmitigated and collection in full is highly questionable or improbable. · Loss (9) – Collectability is unlikely resulting in immediate charge-off. Beginning as of March 31, 2015, we no longer risk grade consumer purposed loans within all categories for which the individual loan balance is less than $417,000. These loan types provide limited credit information subsequent to origination and therefore may not be properly risk graded within our standard risk grading system. All of our consumer purposed loans are now considered ungraded and will be analyzed on a performing versus non-performing basis. The non-performing ungraded loans will be deemed substandard when determining our classified assets. Consumer purposed loans may include residential loans, home equity loans and lines of credit, residential lot loans, and other consumer loans. This change in risk grading methodology did not have any material impact on our allowance for loan losses calculation. Description of segment and class risks Each of our portfolio segments and the classes within those segments are subject to risks that could have an adverse impact on the credit quality of our loan portfolio. Management has identified the most significant risks as described below which are generally similar among our segments and classes. While the list in not exhaustive, it provides a description of the risks that management has determined are the most significant. One-to-four family residential We centrally underwrite each of our one-to-four family residential loans using credit scoring and analytical tools consistent with the Board-approved lending policy and internal procedures based upon industry best practices and regulatory directives. Loans to be sold to secondary market investors must also adhere to investor guidelines. We also evaluate the value and marketability of that collateral. Common risks to each class of non-commercial loans, including one-to-four family residential, include risks that are not specific to individual transactions such as general economic conditions within our markets, particularly unemployment and potential declines in real estate values. Personal events such as death, disability or change in marital status also add risk to non-commercial loans. Commercial real estate Commercial mortgage loans are primarily dependent on the ability of our customers to achieve business results consistent with those projected at loan origination resulting in cash flow sufficient to service the debt. To the extent that a customer’s business results are significantly unfavorable versus the original projections, the ability for our loan to be serviced on a basis consistent with the contractual terms may be at risk. While these loans are secured by real property and possibly other business assets such as inventory or accounts receivable, it is possible that the liquidation of the collateral will not fully satisfy the obligation. Other commercial real estate loans consist primarily of loans secured by multifamily housing and agricultural loans. The primary risk associated with multifamily loans is the ability of the income-producing property that collateralizes the loan to produce adequate cash flow to service the debt. High unemployment or generally weak economic conditions may result in our customer having to provide rental rate concessions to achieve adequate occupancy rates. The performance of agricultural loans are highly dependent on favorable weather, reasonable costs for seed and fertilizer, and the ability to successfully market the product at a profitable margin. The demand for these products is also dependent on macroeconomic conditions that are beyond the control of the borrower. Home equity and lines of credit Home equity loans are often secured by first or second liens on residential real estate, thereby making such loans particularly susceptible to declining collateral values. A substantial decline in collateral value could render our second lien position to be effectively unsecured. Additional risks include lien perfection inaccuracies and disputes with first lienholders that may further weaken our collateral position. Further, the open-end structure of these loans creates the risk that customers may draw on the lines in excess of the collateral value if there have been significant declines since origination. Residential construction and other construction and land Residential mortgage construction loans are typically secured by undeveloped or partially developed land with funds to be disbursed as home construction is completed contingent upon receipt and satisfactory review of invoices and inspections. Declines in real estate values can result in residential mortgage loan borrowers having debt levels in excess of the collateral’s current market value. Non-commercial construction and land development loans can experience delays in completion and/or cost overruns that exceed the borrower’s financial ability to complete the project. Cost overruns can result in foreclosure of partially completed collateral with unrealized value and diminished marketability. Commercial construction and land development loans are dependent on the supply and demand for commercial real estate in the markets we serve as well as the demand for newly constructed residential homes and building lots. Deterioration in demand could result in significant decreases in the underlying collateral values and make repayment of the outstanding loans more difficult for our customers. Commercial We centrally underwrite each of our commercial loans based primarily upon the customer’s ability to generate the required cash flow to service the debt in accordance with the contractual terms and conditions of the loan agreement. We strive to gain a complete understanding of our borrower’s businesses including the experience and background of the principals. To the extent that the loan is secured by collateral, which is a predominant feature of the majority of our commercial loans, or other assets including accounts receivable and inventory, we gain an understanding of the likely value of the collateral and what level of strength it brings to the loan transaction. To the extent that the principals or other parties are obligated under the note or guaranty agreements, we analyze the relative financial strength and liquidity of each guarantor. Common risks to each class of commercial loans include risks that are not specific to individual transactions such as general economic conditions within our markets, as well as risks that are specific to each transaction including volatility or seasonality of cash flows, changing demand for products and services, personal events such as death, disability or change in marital status, and reductions in the value of our collateral. Consumer The consumer loan portfolio includes loans secured by personal property such as automobiles, marketable securities, other titled recreational vehicles including boats and motorcycles, as well as unsecured consumer debt. The value of underlying collateral within this class is especially volatile due to potential rapid depreciation in values since date of loan origination in excess of principal repayment. The following tables present the gross investment in loans by loan grade: December 31, 2016 Loan Grade One-to-Four Family Residential Commercial Real Estate Home Equity and Lines of Credit Residential Construction Other Construction and Land Commercial Consumer Total (Dollars in thousands) 1 $ — $ 9,867 $ — $ — $ — $ 429 $ — $ 10,296 2 — 4,290 — — — 1,463 — 5,753 3 28,129 24,744 1,812 587 2,163 2,772 — 60,207 4 75,542 131,117 3,393 10,686 22,374 21,824 51 264,987 5 26,474 95,447 3,471 2,370 17,942 11,092 325 157,121 6 2,594 11,537 — 286 2,473 268 — 17,158 7 1,747 7,346 — — 1,218 429 — 10,740 $ 134,486 $ 284,348 $ 8,676 $ 13,929 $ 46,170 $ 38,277 $ 376 $ 526,262 Ungraded Loan Exposure: Performing $ 142,889 $ 8,531 $ 41,406 $ 4,602 $ 14,182 $ 3,029 $ 4,172 $ 218,811 Nonperforming 1,062 — 252 — 253 — 46 1,613 Subtotal $ 143,951 $ 8,531 $ 41,658 $ 4,602 $ 14,435 $ 3,029 $ 4,218 $ 220,424 Total $ 278,437 $ 292,879 $ 50,334 $ 18,531 $ 60,605 $ 41,306 $ 4,594 $ 746,686 December 31, 2015 Loan Grade One-to-Four Family Residential Commercial Real Estate Home Equity and Lines of Credit Residential Construction Other Construction and Land Commercial Consumer Total (Dollars in thousands) 1 $ — $ 65 $ — $ — $ — $ 10,336 $ — $ 10,401 2 — 4,446 — — — 99 — 4,545 3 18,518 11,396 1,358 525 1,479 1,734 — 35,010 4 46,942 74,542 1,961 2,036 13,850 18,586 1 157,918 5 33,886 97,469 6,648 1,347 22,864 9,274 592 172,080 6 2,903 13,171 — 1,106 1,718 297 — 19,195 7 3,335 13,106 — — 579 458 — 17,478 $ 105,584 $ 214,195 $ 9,967 $ 5,014 $ 40,490 $ 40,784 $ 593 $ 416,627 Ungraded Loan Exposure: Performing $ 141,771 $ 218 $ 43,158 $ 2,834 $ 16,707 $ 262 $ 3,046 $ 207,996 Nonperforming 1,278 — 321 — 119 — — 1,718 Subtotal $ 143,049 $ 218 $ 43,479 $ 2,834 $ 16,826 $ 262 $ 3,046 $ 209,714 Total $ 248,633 $ 214,413 $ 53,446 $ 7,848 $ 57,316 $ 41,046 $ 3,639 $ 626,341 Delinquency Analysis of Loans by Class The following tables include an aging analysis of the gross investment of past-due financing receivables by class. The Company does not accrue interest on loans greater than 90 days past due. December 31, 2016 30-59 Days Past Due 60-89 Days Past Due 90 Days and Over Past Due Total Past Due Current Total Loans Receivable (Dollars in thousands) One-to-four family residential $ 4,931 $ 1,116 $ 554 $ 6,601 $ 271,836 $ 278,437 Commercial real estate 1,383 1,800 1,681 4,864 288,015 292,879 Home equity and lines of credit 126 44 233 403 49,931 50,334 Residential construction 180 — — 180 18,351 18,531 Other construction and land 467 — 919 1,386 59,219 60,605 Commercial 368 — — 368 40,938 41,306 Consumer 62 1 — 63 4,531 4,594 Total $ 7,517 $ 2,961 $ 3,387 $ 13,865 $ 732,821 $ 746,686 December 31, 2015 30-59 Days Past Due 60-89 Days Past Due 90 Days and Over Past Due Total Past Due Current Total Loans Receivable (Dollars in thousands) One-to-four family residential $ 5,610 $ 1,260 $ 1,205 $ 8,075 $ 240,558 $ 248,633 Commercial real estate 1,585 — 605 2,190 212,223 214,413 Home equity and lines of credit 369 38 322 729 52,717 53,446 Residential construction — — — — 7,848 7,848 Other construction and land 208 397 138 743 56,573 57,316 Commercial 625 — — 625 40,421 41,046 Consumer 12 4 — 16 3,623 3,639 Total $ 8,409 $ 1,699 $ 2,270 $ 12,378 $ 613,963 $ 626,341 Impaired Loans The following table presents investments in loans considered to be impaired and related information on those impaired loans: December 31, 2016 December 31, 2015 Recorded Balance Unpaid Principal Balance Specific Allowance Recorded Balance Unpaid Principal Balance Specific Allowance (Dollars in thousands) Loans without a valuation allowance One-to four-family residential $ 2,670 $ 2,723 $ — $ 4,289 $ 4,403 $ — Commercial real estate 6,078 7,710 — 7,226 8,809 — Home equity and lines of credit 213 328 — 213 328 — Other construction and land 809 911 — 658 818 — Commercial — — — — — — $ 9,770 $ 11,672 $ — $ 12,386 $ 14,358 $ — Loans with a valuation allowance One-to four-family residential $ 1,144 $ 1,144 $ 201 $ 2,026 $ 2,026 $ 344 Commercial real estate 2,075 2,075 178 1,787 1,787 61 Home equity and lines of credit 100 100 2 100 100 6 Other construction and land 911 911 175 851 851 61 Commercial 306 306 28 318 318 38 $ 4,536 $ 4,536 $ 584 $ 5,082 $ 5,082 $ 510 Total One-to four-family residential $ 3,814 $ 3,867 $ 201 $ 6,315 $ 6,429 $ 344 Commercial real estate 8,153 9,785 178 9,013 10,596 61 Home equity and lines of credit 313 428 2 313 428 6 Other construction and land 1,720 1,822 175 1,509 1,669 61 Commercial 306 306 28 318 318 38 $ 14,306 $ 16,208 $ 584 $ 17,468 $ 19,440 $ 510 The following table presents average impaired loans and interest income recognized on those impaired loans, by class segment, for the periods indicated: For the Year Ended December 31, 2016 2015 2014 Average Investment in Impaired Loans Interest Income Recognized Average Investment in Impaired Loans Interest Income Recognized Average Investment in Impaired Loans Interest Income Recognized (Dollars in thousands) Loans without a valuation allowance One-to-four family residential $ 2,758 $ 117 $ 6,072 $ 174 $ 6,079 $ 242 Commercial real estate 7,834 116 7,999 299 14,255 664 Home equity and lines of credit 328 10 213 9 1,728 53 Other construction and land 923 27 668 30 2,332 70 Commercial — — — — — — $ 11,843 $ 270 $ 14,952 $ 512 $ 24,394 $ 1,029 Loans with a valuation allowance One-to-four family residential $ 1,162 $ 48 $ 2,056 $ 88 $ 4,048 $ 137 Commercial real estate 2,098 82 1,808 82 3,715 152 Home equity and lines of credit 100 4 100 4 149 6 Other construction and land 1,027 37 1,502 37 2,042 81 Commercial 312 19 323 19 334 20 $ 4,699 $ 190 $ 5,789 $ 230 $ 10,288 $ 396 Total One-to-four family residential $ 3,920 $ 165 $ 8,128 $ 262 $ 10,127 $ 379 Commercial real estate 9,932 198 9,807 381 17,970 816 Home equity and lines of credit 428 14 313 13 1,877 59 Other construction and land 1,950 64 2,170 67 4,374 151 Commercial 312 19 323 19 334 20 $ 16,542 $ 460 $ 20,741 $ 742 $ 34,682 $ 1,425 Nonperforming Loans The following table summarizes the balances of nonperforming loans. Certain loans classified as Troubled Debt Restructurings (“TDRs”) and impaired loans may be on non-accrual status even though they are not contractually delinquent. December 31, 2016 2015 (Dollars in thousands) One-to-four family residential $ 1,125 $ 2,893 Commercial real estate 3,536 3,628 Home equity loans and lines of credit 250 320 Other construction and land 1,042 384 Commercial 41 55 Consumer 47 — Non-performing loans $ 6,041 $ 7,280 Troubled Debt Restructurings (TDRs) The following tables summarize TDRs as of the dates indicated: December 31, 2016 Performing Nonperforming Total TDRs TDRs TDRs (Dollars in thousands) One-to-four family residential $ 3,560 $ 210 $ 3,770 Commercial real estate 4,327 2,366 6,693 Home equity and lines of credit 313 — 313 Other construction and land 1,377 206 1,583 Commercial 305 — 305 $ 9,882 $ 2,782 $ 12,664 December 31, 2015 Performing Nonperforming Total TDRs TDRs TDRs (Dollars in thousands) One-to-four family residential $ 4,182 $ 211 $ 4,393 Commercial real estate 5,134 2,922 8,056 Home equity and lines of credit 313 — 313 Residential construction — — — Other construction and land 1,259 250 1,509 Commercial 318 12 330 $ 11,206 $ 3,395 $ 14,601 Loan modifications that were deemed TDRs at the time of the modification during the period presented are summarized in the table below: For the Year Ended December 31, 2015 (Dollars in thousands) Number of Loans Pre-modification Outstanding Recorded Investment Post-modification Outstanding Recorded Investment Forgiveness of principal: Commercial real estate 1 $ 1,988 $ 1,693 1 $ 1,988 $ 1,693 Extended payment terms: Commercial real estate 1 $ 833 $ 833 1 $ 833 $ 833 There were no loan modifications that were deemed TDRs at the time of modification during the year ended December 31, 2016. There were no TDRs that defaulted during the years ending December 31, 2016 or December 31, 2015 and which were modified as TDRs within the previous 12 months. |
CONCENTRATIONS OF CREDIT RISK
CONCENTRATIONS OF CREDIT RISK | 12 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS OF CREDIT RISK | NOTE 8. CONCENTRATIONS OF CREDIT RISK A substantial portion of the Company’s loan portfolio is represented by loans in western North Carolina, northern Georgia, and Upstate South Carolina. The capacity and willingness of the Company’s debtors to honor their contractual obligations is dependent upon general economic conditions and the health of the real estate market within its general lending area. The majority of the Company’s loans, commitments, and lines of credit have been granted to customers in its primary market area and substantially all of these instruments are collateralized by real estate or other assets. The Company, as a matter of policy, does not extend credit to any single borrower or group of related borrowers in excess of its legal lending limit which was $22.2 million at December 31, 2016 and $19.1 million at December 31, 2015. The Company’s loans were concentrated in the following categories: December 31, 2016 2015 One-to-four family residential 37.3 % 39.7 % Commercial real estate 39.2 34.2 Home equity and lines of credit 6.7 8.5 Residential construction 2.5 1.3 Other construction and land 8.1 9.1 Commercial 5.5 6.6 Consumer 0.7 0.6 Total loans 100.0 % 100.0 % |
FIXED ASSETS
FIXED ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS | NOTE 9. FIXED ASSETS Fixed assets are summarized as follows: December 31, 2016 2015 (Dollars in thousands) Land and improvements $ 9,201 $ 8,181 Buildings 18,696 16,826 Furniture, fixtures, and equipment 8,429 7,569 Construction in process — 31 Total fixed assets 36,326 32,607 Less accumulated depreciation (16,117 ) (14,934 ) Fixed assets, net $ 20,209 $ 17,673 Depreciation and leasehold amortization expense was $1.2 million, $1.0 million, and $0.9 million for the years ended December 31, 2016, 2015, and 2014, respectively. The Bank has entered into operating leases in connection with its retail branch operations. These leases expire at various dates through December 2017. Total rental expense was approximately $0.1 million for the each of the years ended December 31, 2016, 2015 and 2014. Following is a schedule of approximate annual future minimum lease payments under operating leases that have initial or remaining lease terms in excess of one year (in thousands): 2017 $ 49 Total minimum lease commitments $ 49 |
REAL ESTATE OWNED
REAL ESTATE OWNED | 12 Months Ended |
Dec. 31, 2016 | |
Banking and Thrift [Abstract] | |
REAL ESTATE OWNED | NOTE 10. REAL ESTATE OWNED The following tables summarizes real estate owned and changes in the valuation allowance for real estate owned as of and for the periods indicated: As of December 31, (Dollars in thousands) 2016 2015 Real estate owned, gross $ 5,650 $ 6,741 Less: Valuation allowance 1,424 1,372 Real estate owned, net $ 4,226 $ 5,369 Year Ended December 31, (Dollars in thousands) 2016 2015 2014 Valuation allowance, beginning $ 1,372 $ 1,760 $ 5,560 Provision charged to expense 655 171 2,349 Reduction due to disposal (603 ) (559 ) (6,149 ) Valuation allowance, ending $ 1,424 $ 1,372 $ 1,760 As of December 31, 2016, the Company had $0.1 million in loans secured by residential real estate properties for which formal foreclosure proceedings were in process. As of December 31, 2016, the Company had $1.3 million of residential real estate properties included in real estate owned. |
BANK OWNED LIFE INSURANCE (BOLI
BANK OWNED LIFE INSURANCE (BOLI) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, All Other Investments [Abstract] | |
BANK OWNED LIFE INSURANCE ("BOLI") | NOTE 11. BANK OWNED LIFE INSURANCE (“BOLI”) The following table summarizes the composition of our BOLI: December 31, 2016 2015 (Dollars in thousands) Separate account $ 12,548 $ 12,388 General account 17,944 7,636 Hybrid 855 834 Total $ 31,347 $ 20,858 The assets of the separate account are invested in the PIMCO Mortgage-backed Securities Account which is composed primarily of Treasury and Agency mortgage-backed securities with a rating of Aaa and repurchase agreements with a rating of P-1. The assets of the general account are invested in six different insurance carriers with ratings ranging from A+ to A++. |
LOAN SERVICING
LOAN SERVICING | 12 Months Ended |
Dec. 31, 2016 | |
Transfers and Servicing [Abstract] | |
LOAN SERVICING | NOTE 12. LOAN SERVICING Loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of mortgage and SBA loans serviced for others is detailed below. December 31, 2016 2015 2014 (Dollars in thousands) $ 264,264 $ 251,492 $ 246,348 The following summarizes the activity in the balance of loan servicing rights: December 31, 2016 2015 2014 (Dollars in thousands) Loan servicing rights, beginning of period $ 2,344 $ 2,187 $ 1,883 Capitalization from loans sold 604 544 385 Fair value adjustment (345 ) (387 ) (81 ) Loan servicing rights, end of period $ 2,603 $ 2,344 $ 2,187 The Company held custodial escrow deposits of $0.4 and $0.6 million for loan servicing accounts at December 31, 2016 and 2015, respectively. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 13. GOODWILL AND OTHER INTANGIBLE ASSETS The Company had $2.1 million and $0.7 million of goodwill as of December 31, 2016 and 2015, respectively. The following is a summary of changes in the carrying amounts of goodwill: Year Ended December 31, 2016 2015 Dollars in thousands Balance at beginning of period $ 711 $ — Additions: Goodwill from acquisitions 1,354 711 Balance at end of period $ 2,065 $ 711 The Company’s other intangible assets consist of core deposit intangibles related to core deposits acquired in the ASB branch and Old Town Bank acquisitions. The following is a summary of gross carrying amounts and accumulated amortization of core deposit intangibles: Years Ended December 31, 2016 2015 Dollars in thousands Gross balance at beginning of period $ 590 $ — Additions from acquisitions 530 590 Gross balance at end of period 1,120 590 Less accumulated amortization (141 ) — Core deposit intangible, net $ 979 $ 590 Core deposit intangibles are amortized using the straight-line method over their estimated useful lives of seven years. Estimated amortization expense for core deposit intangibles for each of the next five years is $0.2 million per year. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | NOTE 14. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposure to business and operational risks through management of its core business activities. The Company manages interest rate risk primarily by managing the amount, sources, and duration of its investment securities portfolio and borrowings and through the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Derivative financial instruments are used to manage differences in the amount, timing, and duration of known or expected cash receipts or payments principally related to loans and borrowings. The table below presents the fair value of the Company’s derivative financial instruments as of the dates indicated as well as their classification on the consolidated balance sheet (in thousands). Fair Value Balance Sheet Location December 31, 2016 December 31, 2015 Designated as hedges: Cash flow hedge of borrowings - interest rate swap Other assets $ 476 $ — Total $ 476 $ — Not designated as hedges: Mortgage banking - loan commitment Other assets $ 41 $ 30 Mortgage banking - forward sales commitment Other assets 19 15 Total $ 60 $ 45 Derivative contracts that are not accounted for as hedging instruments under ASC 815, Derivatives and Hedging The Company’s objectives in using interest rate derivatives are to add stability to net interest revenue and to manage its exposure to interest rate movements. To accomplish this objective, the Company uses interest rate swaps as part of its interest rate risk management strategy. The structure of the swap agreements is described in the table below: Underlyings Designation Notional Payment Provision Life of Swap Contract Junior Subordinated Debt Cash Flow Hedge $ 14,000 Pay 0.958%/Receive 3 month LIBOR 4 yrs FHLB Variable Rate Advance Cash Flow Hedge $ 15,000 Pay 1.054%/Receive 3 month LIBOR 2 yrs FHLB Variable Rate Advance Cash Flow Hedge $ 20,500 Pay 1.354%/Receive 3 month LIBOR 2 yrs The swap contracts involve the payment of fixed-rate amounts to a counterparty in exchange for the Company receiving variable-rate payments without exchange of the underlying notional amounts. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffectiveness of the cash flow hedge is recognized through earnings. There was no ineffectiveness in 2016. The table below presents the effect of the Company’s cash flow hedge on the Consolidated Statement of Income (in thousands). Amount of Gain(Loss) Recognized in Other Comprehensive Income on Derivative (Effective Portion) Gain(Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) December 31, December 31, 2016 2015 Location 2016 2015 Interest rate swap $ 476 $ — Interest Expense $ 32 $ — The Company may be exposed to credit risk in the event of non-performance by the counterparties to its interest rate derivative agreements. The Company assesses the credit risk of its financial institution counterparties by monitoring publicly available credit rating and financial information. The Company manages dealer credit risk by entering into interest rate derivatives only with primary and highly rated counterparties, the use of ISDA master agreements and counterparty limits. The agreements contain collateral arrangements with the amount of collateral to be posted generally governed by the settlement value of outstanding swaps. The Company does not currently anticipate any losses from failure of interest rate derivative counterparties to honor their obligations. The Company has agreements with its derivative counterparties that contain a provision in which if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, the Company could also be declared in default on its derivative obligations. Furthermore, certain agreements covering the Company’s derivative instruments contain provisions that require the Company to maintain its status as a well / adequately capitalized institution. These provisions enable the counterparties to the derivative instruments to request immediate payment or require the Company to post additional collateral. |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2016 | |
Banking and Thrift [Abstract] | |
DEPOSITS | NOTE 15. DEPOSITS The following table summarizes deposit balances and the related interest expense by type of deposit: As of and for the Year Ended December 31, 2016 2015 2014 (Dollars in thousands) Balance Interest Expense Balance Interest Expense Balance Interest Expense Noninterest-bearing demand $ 139,136 $ — $ 121,062 $ — $ 86,110 $ — Interest-bearing demand 122,271 160 103,198 136 92,877 149 Money market 239,387 770 180,377 558 178,320 983 Savings 40,014 49 35,838 33 27,591 36 Time deposits 289,205 2,985 276,142 3,607 318,219 4,193 $ 830,013 $ 3,964 $ 716,617 $ 4,334 $ 703,117 $ 5,361 Contractual maturities of time deposit accounts are summarized as follows: December 31, 2016 (Dollars in thousands) 2017 $ 151,236 2018 68,287 2019 31,093 2020 14,434 2021 11,789 Thereafter 12,366 $ 289,205 The following table presents the activity related to the fair value premium on acquired time deposits: For the Year Ended December 31, (Dollars in thousands) 2016 2015 2014 Time deposit premium, beginning of period $ 30 $ — $ — Additional premium for acquisitions 648 30 — Accretion (258 ) — — Time deposit premium, end of period $ 420 $ 30 $ — The Company had time deposit accounts in amounts of $250 thousand or more totaling $46.9 million and $26.4 million at December 31, 2016 and 2015, respectively. The Company held brokered deposits of approximately $11.8 million at December 31, 2016 and held no brokered deposits at December 31, 2015. The Company had deposits from related parties of $2.2 million and $1.7 million at December 31, 2016 and 2015, respectively. |
BORROWINGS
BORROWINGS | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
BORROWINGS | NOTE 16. BORROWINGS The Company has total credit availability with the FHLB of up to 30% of assets, subject to the availability of qualified collateral. As collateral for these borrowings, the Company pledges certain investment securities, its FHLB stock, and its entire loan portfolio of qualifying mortgages (as defined) under a blanket collateral agreement with the FHLB. At December 31, 2016, the Company had unused borrowing capacity with the FHLB of $13.9 million based on collateral pledged at that date. The Company had total additional credit availability with FHLB of $56.8 million as of December 31, 2016 if additional collateral was pledged. The following tables summarize the outstanding FHLB advances as of the dates indicated: December 31, 2016 Balance Type Rate Maturity (Dollars in thousands) $ 5,000 Fixed Rate 0.58 % 1/3/2017 5,000 Fixed Rate 0.44 % 1/3/2017 50,000 Fixed Rate 0.49 % 1/5/2017 30,000 Fixed Rate 0.64 % 1/15/2017 15,000 Fixed Rate 0.63 % 1/17/2017 25,000 Fixed Rate 0.64 % 1/23/2017 20,000 Fixed Rate 0.56 % 2/7/2017 5,000 Fixed Rate 0.58 % 3/28/2017 15,000 Adjustable Rate 0.56 % 3/29/2017 5,000 Fixed Rate 0.80 % 3/31/2017 5,000 Fixed Rate 0.60 % 4/3/2017 10,000 Fixed Rate 0.60 % 4/6/2017 1,000 Fixed Rate 0.87 % 5/11/2017 20,500 Adjustable Rate 0.73 % 5/23/2017 5,000 Fixed Rate 0.82 % 6/6/2017 2,000 Fixed Rate 1.02 % 6/12/2017 5,000 Fixed Rate 0.76 % 6/30/2017 25,000 Fixed Rate 0.77 % 8/7/2017 10,000 Fixed Rate 0.82 % 9/28/2017 10,000 Fixed Rate 0.77 % 12/29/2017 5,000 Fixed Rate 0.78 % 12/30/2017 5,000 Fixed Rate 1.26 % 6/5/2018 10,000 Fixed Rate 0.84 % 6/29/2018 5,000 Fixed Rate 1.40 % 7/1/2018 5,000 Fixed Rate 1.51 % 12/31/2018 $ 298,500 0.68 % December 31, 2015 Balance Type Rate Maturity (Dollars in thousands) $ 45,000 Fixed Rate 0.30 % 2/5/2016 5,000 Fixed Rate 0.39 % 3/28/2016 5,000 Fixed Rate 0.52 % 3/30/2016 10,000 Fixed Rate 0.47 % 3/31/2016 5,000 Fixed Rate 0.49 % 6/6/2016 5,000 Fixed Rate 0.69 % 6/30/2016 5,000 Fixed Rate 0.51 % 6/30/2016 5,000 Fixed Rate 0.74 % 7/1/2016 20,000 Daily Rate 0.49 % 7/21/2016 10,000 Fixed Rate 0.58 % 9/28/2016 5,000 Fixed Rate 0.79 % 12/5/2016 5,000 Fixed Rate 0.98 % 12/30/2016 5,000 Fixed Rate 0.74 % 12/30/2016 1,000 Fixed Rate 0.87 % 5/11/2017 2,000 Fixed Rate 1.02 % 6/12/2017 5,000 Fixed Rate 1.38 % 12/29/2017 2,000 Fixed Rate 1.25 % 5/11/2018 10,000 Fixed Rate 1.83 % 4/10/2019 2,500 Fixed Rate 1.77 % 6/11/2019 1,000 Fixed Rate 1.78 % 5/11/2020 $ 153,500 0.65 % To add stability to net interest revenue and manage our exposure to interest rate movement on our adjustable rate advances, we entered into two FHLB advance interest rate swaps in 2016. The swap contracts involve the payment of fixed-rate amounts to a counterparty in exchange for our receipt of variable-rate payments over the two year lives of the contracts. The effective interest rates were 0.76% and 1.15% at December 31, 2016 for the adjustable rate advances maturing March 29, 2017 and May 23, 2017, respectively. The scheduled annual maturities of FHLB advances and respective weighted average rates, are as follows: December 31, 2016 Year Balance Weighted Average Rate (Dollars in thousands) 2017 273,500 0.64 % 2018 25,000 1.17 % $ 298,500 0.68 % The Company also maintained approximately $48.9 million and $48.2 million in borrowing capacity with the FRB discount window as of December 31, 2016 and 2015, respectively. The Company had no FRB discount window borrowings outstanding at December 31, 2016 or 2015. The rate charged on discount window borrowings is currently the Fed Funds target rate plus 0.50% (i.e.,1.25% as of December 31, 2016). |
JUNIOR SUBORDINATED DEBT
JUNIOR SUBORDINATED DEBT | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
JUNIOR SUBORDINATED DEBT | NOTE 17. JUNIOR SUBORDINATED DEBT The Company issued $14.4 million of junior subordinated notes to its wholly owned subsidiary, Macon Capital Trust I, to fully and unconditionally guarantee the trust preferred securities issued by the Trust. These notes qualify as Tier I capital for the Company. The notes accrue interest quarterly at 2.80% above the 90-day LIBOR, adjusted quarterly. To add stability to net interest revenue and manage our exposure to interest rate movement, we entered into an interest rate swap in June 2016. The swap contract involves the payment of fixed-rate amounts to a counterparty in exchange for our receipt of variable-rate payments over the four year life of the contract. The effective interest rate was 3.76% and 3.34% at December 31, 2016 and 2015, respectively. The notes mature on March 30, 2034. The Company has the right to redeem the notes, in whole or in part, on or after March 30, 2009 at a price equal to 100% of the principal amount plus accrued and unpaid interest. In addition, the Company may redeem the notes in whole (but not in part) upon the occurrence of a capital disqualification event, an investment company event, or a tax event at a specified redemption price as defined in the indenture. The Company also may, at its option, defer the payment of interest on the notes for a period up to 20 consecutive quarters, provided that interest will also accrue on the deferred payments of interest. As of December 31, 2016, the Company was current on all interest payments due. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLANS | NOTE 18. EMPLOYEE BENEFIT PLANS The Company maintains an employee savings plan under Section 401(k) of the Internal Revenue Code. This plan covers substantially all full-time employees who have attained the age of 21. Employees may contribute a percentage of their annual gross salary as limited by the federal tax laws. The Company matches employee contributions based on the plan guidelines. The Company contribution totaled $0.5 million, $0.4 million, and $0.2 million for the years ended December 31, 2016, 2015, and 2014. The Company has a compensated expense policy that allows employees to accrue paid time off for vacation, sick or other unexcused absences up to a specified number of days each year. Employees may sell back a limited amount of unused time at the end of each year or convert the time to an accrued sick time account which is forfeited if unused at termination, but no carry-over or payout of unused time is permitted. |
POST-EMPLOYMENT BENEFITS
POST-EMPLOYMENT BENEFITS | 12 Months Ended |
Dec. 31, 2016 | |
Postemployment Benefits [Abstract] | |
POST-EMPLOYMENT BENEFITS | NOTE 19. POST-EMPLOYMENT BENEFITS The Company has established several nonqualified deferred compensation and post-employment programs providing benefits to certain directors and key management employees. No new participants have been admitted to any of the plans since 2009 and existing benefit levels have been frozen. A summary of the key terms and accounting for each plan are as follows: · Supplemental Executive Retirement Plan (“SERP”) – provides a post-retirement income stream to several current and former executives. The estimated present value of the future benefits to be paid during a post-retirement period of 216 months is accrued over the period from the effective date of the agreement to the expected date of retirement. The SERP is an unfunded plan and is considered a general contractual obligation of the Company. For the years ended December 31, 2016, 2015, and 2014, the Company recorded expense related to the SERP utilizing a discount rate of 4.0%, 4.0%, and 7.0%, respectively. · CAP Equity Plan – provides a post-retirement benefit payable in cash to several current and former officers and directors. During 2015, the Company funded a Rabbi Trust to seek to generate returns that will offset the market risk of certain deferred compensation agreements associated with the Plan. Some Plan participants elected to have their benefits tied to the value of specific assets, including, for example, the Company’s common stock. The remaining participants elected to continue receiving interest of 8% which is accrued on such participant’s unpaid balance after termination from the Company, subject to the terms of the Plan. The Plan was frozen in 2009, and no additional deferrals are allowed. · Director Consultation Plan – provides a post-retirement monthly benefit for continuing to provide consulting services as needed. The gross amounts of the future payments are accrued. · Life Insurance Plan – provides an endorsement split dollar benefit to several current and former executives, under which the Company has agreed to maintain an insurance policy during the executive’s retirement and to provide the executive with a death benefit. The estimated cost of insurance for the portion of the policy expected to be paid as a split dollar death benefit in each post-retirement year is measured for the period between expected retirement age and the earlier of (a) expected mortality and (b) age 95. The resulting amount is then allocated on a present value basis to the period ending on the participant’s full eligibility date. A discount rate of 4% and life expectancy based on the 2001 Valuation Basic Table has been assumed. The following table summarizes the liabilities for each plan as of the dates indicated: December 31, 2016 2015 (Dollars in thousands) SERP $ 4,417 $ 4,435 CAP Equity 4,718 4,890 Director Consultation 252 258 Life Insurance 824 641 $ 10,211 $ 10,224 The expense related to the plans noted above totaled $0.8 million, $1.4 million, and $0.6 million for the years ended December 31, 2016, 2015, and 2014, respectively. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 20. SHARE-BASED COMPENSATION The Company provides stock-based awards through its 2015 Long-Term Stock Incentive Plan which provides for awards of restricted stock, restricted stock units, stock options, and performance units to directors, officers, and employees. The cost of equity-based awards under the 2015 Long-Term Stock Incentive Plan generally is based on the fair value of the awards on their grant date. The maximum number of shares that may be utilized for awards under the plan is 654,637, including 458,246 for stock options and 196,391 for awards of restricted stock and restricted stock units. Shares of common stock awarded under the 2015 Long-Term Stock Incentive Plan may be issued from authorized but unissued shares or shares purchased on the open market. Share-based compensation expense related to stock options and restricted stock units recognized was $0.9 million and $0.1 million for the years ended December 31, 2016 and 2015, respectively. The table below presents stock option activity and related information: Restricted Stock Options (Dollars in thousands, except per share data) Shares Weighted Options Weighted Weighted Aggregate December 31, 2014 — $ — — $ — Granted 157,100 18.55 366,000 18.55 Vested — — — Forfeited — — — December 31, 2015 157,100 18.55 366,000 18.55 Granted 26,300 17.49 57,400 17.52 Vested/Exercised (30,220 ) 18.55 — — Forfeited (7,600 ) 18.55 (16,200 ) 18.55 December 31, 2016 145,580 18.36 407,200 18.41 9.00 $ 890 Vested/Exercisable at December 31, 2016 — — 70,600 18.55 8.92 143 The following is a summary of stock options outstanding at December 31, 2016: Options Outstanding Options Exercisable Shares Range Wtd Ave Ave Shares Wtd Ave Ave 5,000 $ 16.00-17.00 $ 16.75 9.14 — $ — — 40,500 17.01-18.00 17.45 9.41 — — — 361,700 18.01-18.55 18.54 8.95 70,600 18.55 8.92 407,200 18.41 9.00 70,600 18.55 8.92 The weighted average fair value of options granted in 2016 and 2015 was $3.02 and $3.37, respectively. The fair value of each option award is estimated on the date of the grant using the Black-Scholes option pricing model. The risk-free interest rate is based on a U.S. Treasury instrument with a life that is similar to the expected life of the option grant. The Company is a newly public company as defined by SEC Staff Accounting Bulletin No. 110. As such, the expected term of the options is based on a calculated average life using the “simplified method” and expected volatility is estimated based on the trading history for a composite index of U.S. Thrifts of similar size. The following table illustrates the assumptions for the Black-Scholes model used in determining the fair value of options granted: 2016 2015 Fair value per option $ 3.02 $ 3.37 Expected life (years) 6.5 years 6.5 years Expected stock price volatility 12 % 12 % Expected dividend yield 0.00 % 0.00 % Risk-free interest rate 1.57 % 1.85 % Expected forfeiture rate 0.00 % 0.00 % At December 31, 2016, the Company had $3.7 million of unrecognized compensation expense related to stock options and restricted stock. The remaining period over which compensation cost related to unvested stock options and restricted stock is expected to be recognized is 4.01 years at December 31, 2016. No stock options or restricted stock were vested as of December 31, 2015. All unexercised options expire ten years after the grant date. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 21. INCOME TAXES Income tax expense (benefit) is summarized as follows: For the Year Ended December 31, 2016 2015 2014 (Dollars in thousands) Current Federal $ 549 $ (150 ) $ 112 State 24 — (25 ) Deferred Federal 2,370 2,252 2,348 State 552 109 504 Change in valuation allowance — (18,950 ) (731 ) Total income tax expense (benefit) $ 3,495 $ (16,739 ) $ 2,208 The differences between actual income tax expense and the amount computed by applying the federal statutory income tax rate of 35% to income before income taxes for the periods indicated is reconciled as follows: For the Year Ended December 31, 2016 2015 2014 (Dollars in thousands) Computed income tax expense $ 3,455 $ 2,480 $ 2,853 Deferred tax valuation allowance — (18,950 ) (731 ) State income tax, net of federal benefit 218 165 271 Nontaxable municipal security income (544 ) (126 ) (115 ) Nontaxable BOLI income (107 ) (160 ) (182 ) Other 473 (148 ) 112 Actual income tax expense (benefit) $ 3,495 $ (16,739 ) $ 2,208 Effective tax rate 35.4 % -236.2 % 27.1 % The components of net deferred taxes as of the periods indicated are summarized as follows: As of December 31, 2016 2015 (Dollars in thousands) Deferred tax assets: Allowance for loan losses $ 3,245 $ 3,557 Deferred compensation and post employment benefits 3,365 3,498 Non-accrual interest 375 286 Valuation reserve for other real estate 693 516 North Carolina NOL carryover 557 988 Federal NOL carryover 8,560 10,750 Unrealized losses on securities 3,079 697 Loan basis differences 238 — Deposit premium 155 — Other 1,160 772 Total deferred tax assets 21,427 21,064 Deferred tax liabilities: Fixed assets 263 499 Loan servicing rights 962 881 Core deposit intangible 158 — Deferred loan costs 1,002 708 Prepaid expenses 57 146 Total deferred tax liabilities 2,442 2,234 Net deferred tax asset $ 18,985 $ 18,830 Upon exercise or vesting of a share-based award, if the tax deduction exceeds the compensation cost that was previously recorded for financial statement purposes this will result in an excess tax benefit. ASU 2016-09, “ Compensation-Stock Compensation (718) Improvements to Employee Share-based Payment Accounting During 2015, the Company completed an analysis of all positive and negative evidence in assessing the need to maintain the valuation allowance against its net deferred tax asset. As a result of this analysis, the Company determined that significant positive evidence existed that would support the reversal of the valuation allowance including the following: · A pattern of sustained profitability, excluding non-recurring items, since the first quarter of 2014; · A 3 year cumulative profit; · Forecasted earnings sufficient to utilize all remaining net operating losses prior to expiration beginning in 2024 for North Carolina and 2027 for federal; · Significant improvements in asset quality; · Resolution of all remaining regulatory orders; and · A strong capital position enabling future earnings investments. As of December 31, 2016 and 2015, $0.2 million and $0.6 million in valuation allowance related to net deferred tax assets on investment securities remains in accumulated other comprehensive income. This valuation allowance will be recognized as tax expense on a security-by-security basis upon the sale or maturity of the individual securities. The tax expense is expected to be recognized over the remaining life of the securities of approximately 1 year. The following table summarizes the amount and expiration dates of the Company’s unused net operating losses: As of December 31, 2016 (Dollars in thousands) Amount Expiration Dates Federal $ 24,458 2027-2034 North Carolina $ 28,425 2024-2028 The Company recognized reductions in its net deferred tax assets of approximately $0.4 million during both the years ended December 31, 2016 and 2015 as a result of a reduction in the expected North Carolina income tax rate from 4.0% to 3.0% and from 5.0% to 4.0%, respectively. The Company is subject to examination for federal and state purposes for the tax years 2013 through 2016. As of December 31, 2016 and 2015, the Company does not have any material unrecognized tax positions. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 22. EARNINGS PER SHARE The following is a reconciliation of the numerator and denominator of basic and diluted net income per share of common stock: For the Year Ended December 31, (Dollars in thousands, except per share amounts) 2016 2015 Numerator: Net income $ 6,376 $ 23,825 Denominator: Weighted-average common shares outstanding - basic 6,477,284 6,546,375 Effect of dilutive restricted stock units 12,647 — Weighted-average common shares outstanding - diluted 6,489,931 6,546,375 Earnings per share - basic $ 0.98 $ 3.64 Earnings per share - diluted $ 0.98 $ 3.64 The average market price used in calculating the assumed number of dilutive shares issued related to stock options for the years ended December 31, 2016 and 2015 was $17.93 and $16.87, respectively. As a result of the average stock price being less than the exercise price of all options in the years ended December 31, 2016 and 2015, the stock options are not deemed dilutive in calculating diluted earnings per share for the period. As of December 31, 2015, all 157,100 restricted stock units issued were deemed to be anti-dilutive based on the treasury stock method. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | NOTE 23. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table summarizes the components of accumulated other comprehensive income (loss) and changes in those components as of and for the years ended December 31: (Dollars in thousands) Available for Held to Maturity Deferred Tax Cash Flow Total Balance, December 31, 2013 $ (3,374 ) $ (1,242 ) $ (2,860 ) $ — $ (7,476 ) Change in deferred tax valuation allowance attributable to net unrealized losses on investment securities — — 1,992 — 1,992 Change in unrealized holding gains/losses on securities available for sale 5,665 — — — 5,665 Reclassification adjustment for net securities gains included in net income (657 ) — — — (657 ) Transfer of net unrealized loss from available for sale to held to maturity 74 (74 ) — — — Amortization of unrealized losses on securities transferred to held to maturity — 199 — — 199 Income tax expense (benefit) (1,944 ) (48 ) — — (1,992 ) Balance, December 31, 2014 $ (236 ) $ (1,165 ) $ (868 ) $ — $ (2,269 ) Change in deferred tax valuation allowance attributable to net unrealized losses on investment securities — — 289 — 289 Change in unrealized holding gains/losses on securities available for sale (166 ) — — — (166 ) Reclassification adjustment for net securities gains included in net income (403 ) — — — (403 ) Amortization of unrealized losses on securities transferred to held to maturity — 984 — — 984 Income tax expense (benefit) 211 (382 ) — — (171 ) Balance, December 31, 2015 $ (594 ) $ (563 ) $ (579 ) $ — $ (1,736 ) Change in deferred tax valuation allowance attributable to net unrealized losses on investment securities — — 377 — 377 Change in unrealized holding gains/losses on securities available for sale (6,652 ) — — — (6,652 ) Reclassification adjustment for net securities gains included in net income (1,216 ) — — — (1,216 ) Amortization of unrealized losses on securities transferred to held to maturity — 578 — — 578 Reduction in unrealized losses related to held to maturity securities transferred to available-for-sale — 325 — — 325 Change in unrealized holding gains/losses on cash flow hedge — — — 476 476 Income tax expense (benefit) 2,908 (340 ) — (176 ) 2,392 Balance, December 31, 2016 $ (5,554 ) $ — $ (202 ) $ 300 $ (5,456 ) The following table shows the line items in the Consolidated Statements of Operations affected by amounts reclassified from accumulated other comprehensive income (loss): (Dollars in thousands) 2016 2015 2014 Line Item Affected Available-for-sale securities Gains recognized $ 1,216 $ 403 $ 657 Gain on sale of investments, net of loss Income tax effect (449 ) (152 ) (247 ) Income tax expense Reclassified out of AOCI, net of tax 767 251 410 Net income Held-to-maturity securities Amortization of unrealized losses (578 ) (984 ) (199 ) Interest income - taxable securities Increase related to transfer from AFS — — 74 Interest income - taxable securities Reduction related to transfer to AFS (325 ) — — Interest income - taxable securities Income tax effect 340 382 48 Income tax expense Reclassified out of AOCI, net of tax (563 ) (602 ) (77 ) Net income Cash flow hedge Interest expense - effective portion (16 ) — — Interest expense - FHLB advances Interest expense - effective portion (16 ) — — Interest expense - Junior subordinated notes Income tax effect 12 — — Income tax expense Reclassified out of AOCI, net of tax (20 ) — — Net income Deferred tax valuation allowance Recognition of reversal of valuation allowance 377 289 — Income tax expense Total reclassified out of AOCI, net of tax $ 561 $ (62 ) $ 333 Net income |
REGULATORY MATTERS
REGULATORY MATTERS | 12 Months Ended |
Dec. 31, 2016 | |
Banking and Thrift [Abstract] | |
REGULATORY MATTERS | NOTE 24. REGULATORY MATTERS The Company and the Bank are subject to various regulatory capital requirements administered by their respective federal and state banking regulators. Failure to satisfy minimum capital requirements may result in certain mandatory and additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital to average assets (as defined). In July 2013, federal bank regulatory agencies issued final rules to revise their risk-based capital requirements and the method for calculating risk-weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act (“Basel III”). On January 1, 2015, the Basel III rules became effective and include transition provisions which implement certain portions of the rules through January 1, 2019. The rule also includes changes in what constitutes regulatory capital, some of which are subject to a transition period. These changes include the phasing-out of certain instruments as qualifying capital. In addition, Tier 2 capital is no longer limited to the amount of Tier 1 capital included in total capital. Mortgage servicing rights, certain deferred tax assets and investments in unconsolidated subsidiaries over designated percentages of common stock are required to be deducted from capital, subject to a transition period. Finally, common equity Tier 1 capital includes accumulated other comprehensive income (which includes all unrealized gains and losses on available-for-sale debt and equity securities), subject to a transition period and a one-time opt-out election. The Bank elected to opt-out of this provision. As such, accumulated comprehensive income is not included in the Bank’s Tier 1 capital. The Bank is subject to various regulatory capital requirements, including a risk-based capital measure. The risk-based guidelines and framework under prompt corrective action provisions include both a definition of capital and a framework for calculating risk-weighted assets by assigning balance sheet assets and off-balance sheet items to broad risk categories. When Basel III is fully phased in on January 1, 2019, the Company and the Bank will be required to maintain a 2.5% capital conservation buffer which is designed to absorb losses during periods of economic distress. This capital conservation buffer is comprised entirely of Common Equity Tier 1 Capital and is in addition to minimum risk-weighted asset ratios. The tables below summarize capital ratios and related information in accordance with Basel III as measured at December 31, 2016 and December 31, 2015. Following are the required and actual capital amounts and ratios for the Bank: Actual For Capital To Be Well- (Dollars in thousands) Amount Ratio Amount Ratio (1) Amount Ratio As of December 31, 2016: Tier 1 Leverage Capital $ 138,402 11.06 % $ 50,034 > 4.0% $ 62,542 > 5% Common Equity Tier 1 Capital $ 138,402 16.33 % $ 38,150 > 5.125% $ 55,106 > 6.5% Tier 1 Risk-based Capital $ 138,402 16.33 % $ 50,867 > $ 67,823 > 8% Total Risk-based Capital $ 147,807 17.43 % $ 67,823 > 8.625% $ 84,778 > 10% As of December 31, 2015: Tier 1 Leverage Capital $ 118,251 12.05 % $ 39,270 > 4% $ 49,087 > % Common Equity Tier 1 Capital $ 118,251 18.07 % $ 29,443 > 4.5% $ 42,529 > 5% Tier 1 Risk-based Capital $ 118,251 18.07 % $ 39,257 > % $ 52,343 > % Total Risk-based Capital $ 126,524 19.34 % $ 52,343 > 8% $ 65,429 > 10% (1) – As of December 31, 2016, includes capital conservation buffer of 0.625%. On a fully phased in basis, effective January 1, 2019, under Basel III, minimum capital ratios to be considered “adequately capitalized” including the capital conservation buffer of 2.5% will be as follows: Tier 1 Leverage Capital – 4.0%; Common Equity Tier 1 Capital – 7.0%; Tier 1 Risk-based Capital – 8.5%; and Total Risk-based Capital – 10.5%. Following are the required and actual capital amounts and ratios for the Company: Actual For Capital Adequacy (Dollars in thousands) Amount Ratio Amount Ratio (1) As of December 31, 2016: Tier I Leverage Capital $ 141,013 11.28 % $ 50,200 > 4.0% Common Equity Tier 1 Capital $ 130,079 15.33 % $ 38,188 > 5.125% Tier I Risk-based Capital $ 141,013 16.62 % $ 50,918 > Total Risk Based Capital $ 150,418 17.72 % $ 67,891 > 8.625% As of December 31, 2015: Tier I Leverage Capital $ 136,063 13.85 % $ 39,291 > 4% Common Equity Tier 1 Capital $ 128,007 19.55 % $ 29,468 > 4.5% Tier I Risk-based Capital $ 136,063 20.78 % $ 39,291 > % Total Risk Based Capital $ 144,343 22.04 % $ 52,388 > 8% (1) – As of December 31, 2016, includes capital conservation buffer of 0.625%. On a fully phased in basis, effective January 1, 2019, under Basel III, minimum capital ratios to be considered “adequately capitalized” including the capital conservation buffer of 2.5% will be as follows: Tier 1 Leverage Capital – 4.0%; Common Equity Tier 1 Capital – 7.0%; Tier 1 Risk-based Capital – 8.5%; and Total Risk-based Capital – 10.5%. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 25. COMMITMENTS AND CONTINGENCIES To accommodate the financial needs of its customers, the Company makes commitments under various terms to lend funds. These commitments include revolving credit agreements, term loan commitments and short-term borrowing agreements. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness. The amount of collateral obtained, if it is deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held includes first and second mortgages on one-to-four family dwellings, accounts receivable, inventory, and commercial real estate. Certain lines of credit are unsecured. The following summarizes the Company’s approximate commitments to extend credit: December 31, 2016 (Dollars in thousands) Lines of credit $ 111,263 Standby letters of credit 800 $ 112,063 The Company had outstanding commitments to originate loans as follows: December 31, 2016 Amount Range of Rates (Dollar in thousands) Fixed $ 24,855 1.99% to 7.99% Variable 9,755 3.25% to 6.25% $ 34,610 The allowance for unfunded commitments was $0.1 million at December 31, 2016 and 2015. The Company is exposed to loss as a result of its obligation for representations and warranties on loans sold to Fannie Mae and maintained a reserve of $0.3 million as of December 31, 2016 and 2015. In the normal course of business, the Company is periodically involved in litigation. In the opinion of the Company’s management, none of this litigation is expected to have a material adverse effect on the accompanying consolidated financial statements. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | NOTE 26. FAIR VALUE DISCLOSURES We use fair value measurements when recording and disclosing certain financial assets and liabilities. Securities classified as AFS, loan servicing rights and mortgage derivatives are recorded at fair value on a recurring basis. Additionally, from time to time, we may be required to record other assets at fair value on a nonrecurring basis, such as loans held for sale, impaired loans and real estate owned. Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants at the measurement date. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities; it is not a forced transaction. In determining fair value, we use various valuation approaches, including market, income and cost approaches. The fair value standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability, which is developed, based on market data we have obtained from independent sources. Unobservable inputs reflect our estimate of assumptions that market participants would use in pricing an asset or liability, which are developed based on the best information available in the circumstances. The fair value hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The fair value hierarchy is broken down into three levels based on the reliability of inputs as follows: · Level 1: valuation is based upon unadjusted quoted market prices for identical instruments traded in active markets. · Level 2: valuation is based upon quoted market prices for similar instruments traded in active markets, quoted market prices for identical or similar instruments traded in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by market data. · Level 3: valuation is derived from other valuation methodologies, including discounted cash flow models and similar techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in determining fair value. A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Fair value estimates are made at a specific point of time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale the Company’s entire holdings of a particular financial instrument. Because no active market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, current interest rates and prepayment trends, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in any of these assumptions used in calculating fair value also would affect significantly the estimates. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of these estimates. Following is a description of valuation methodologies used for assets and liabilities recorded at fair value on a recurring basis: Investment Securities We obtain fair values for debt securities from a third-party pricing service, which utilizes several sources for valuing fixed-income securities. The market evaluation sources for debt securities available-for-sale include observable inputs rather than significant unobservable inputs and are classified as Level 2. The service provider utilizes pricing models that vary by asset class and include available trade, bid and other market information. Generally, the methodologies include broker quotes, proprietary models, vast descriptive terms and conditions databases, as well as extensive quality control programs. Included in securities are investments in an exchange traded bond fund and U.S. Treasury bonds which are valued by reference to quoted market prices and considered a Level 1 security. Also included in securities are corporate bonds which are valued using significant unobservable inputs and are classified as Level 3. Trading securities represent investments in exchange traded mutual funds which are valued by reference to quoted market prices and considered a Level 1 security. Loan Servicing Rights Loan servicing rights are carried at fair value as determined by a third party valuation firm. The valuation model utilizes a discounted cash flow analysis using discount rates and prepayment speed assumptions used by market participants. The Company classifies loan servicing rights fair value measurements as Level 3. Derivative Instruments Derivative instruments include interest rate lock commitments, forward sale commitments, and interest rate swaps. Interest rate lock commitments and forward sale commitments are valued based on the change in the value of the underlying loan between the commitment date and the end of the period. The Company classifies these instruments as Level 3. Interest rate swaps are valued by a third party using significant assumptions that are observable in the market and can be corroborated by market data. The Company classifies interest rate swaps as Level 2. Following is a description of valuation methodologies used for assets and liabilities recorded at fair value on a nonrecurring basis: Loans Held for Sale Loans held for sale are carried at the lower of cost or fair value. The fair value of loans held for sale is based on what secondary markets are currently offering for portfolios with similar characteristics. Loans held for sale carried at fair value are classified as Level 2. Impaired Loans Impaired loans are carried at the lower of recorded investment or fair value. The fair value of collateral dependent impaired loans is estimated using the value of the collateral less selling costs if repayment is expected from liquidation of the collateral. Appraisals may be discounted based on our historical knowledge, changes in market conditions from the time of appraisal or our knowledge of the borrower and the borrower’s business. Impaired loans carried at fair value are classified as Level 3. Impaired loans measured using the present value of expected future cash flows are not deemed to be measured at fair value. Real Estate Owned Real estate owned, obtained in partial or total satisfaction of a loan is recorded at the lower of recorded investment in the loan or fair value less cost to sell. Subsequent to foreclosure, these assets are carried at the lower of the amount recorded at acquisition date or fair value less cost to sell. Accordingly, it may be necessary to record nonrecurring fair value adjustments. Fair value, when recorded, is generally based upon appraisals by approved, independent, state certified appraisers. Like impaired loans, appraisals may be discounted based on our historical knowledge, changes in market conditions from the time of appraisal or other information available to us. Real estate owned carried at fair value is classified as Level 3. In addition to financial instruments recorded at fair value in our financial statements, fair value accounting guidance requires disclosure of the fair value of all of an entity’s assets and liabilities that are considered financial instruments. The majority of our assets and liabilities are considered financial instruments. Many of these instruments lack an available trading market as characterized by a willing buyer and willing seller engaged in an exchange transaction. Also, it is our general practice and intent to hold our financial instruments to maturity and to not engage in trading or sales activities. For fair value disclosure purposes, we substantially utilize the fair value measurement criteria as required and explained above. In cases where quoted fair values are not available, we use present value methods to determine the fair value of our financial instruments. Following is a description of valuation methodologies used for the disclosure of the fair value of financial instruments not carried at fair value: Cash and Cash Equivalents The carrying amount of such instruments is deemed to be a reasonable estimate of fair value. Loans The fair value of variable rate performing loans is based on carrying values adjusted for credit risk. The fair value of fixed rate performing loans is estimated using discounted cash flow analyses, utilizing interest rates currently being offered for loans with similar terms, adjusted for credit risk. The fair value of nonperforming loans is based on their carrying values less any specific reserve. A prepayment assumption is used to estimate the portion of loans that will be repaid prior to their scheduled maturity. No adjustment has been made for the illiquidity in the market for loans as there is no active market for many of the Company’s loans on which to reasonably base this estimate. Bank Owned Life Insurance Fair values approximate net cash surrender values. Other Investments, at cost No ready market exists for this stock and it has no quoted market value. However, redemption of this stock has historically been at par value. Accordingly, the carrying amount is deemed to be a reasonable estimate of fair value. Small Business Investment Company Holdings No ready market exists for our Small Business Investment Company (“SBIC”) holdings and it has no quoted market value. Accordingly, the carrying amount is deemed to be a reasonable estimate of fair value. Deposits The fair values disclosed for demand deposits are equal to the amounts payable on demand at the reporting date. The fair value of certificates of deposit are estimated by discounting the amounts payable at the certificate rates using the rates currently offered for deposits of similar remaining maturities. Advances from the FHLB The fair values disclosed for fixed rate long-term borrowings are determined by discounting their contractual cash flows using current interest rates for long-term borrowings of similar remaining maturities. The carrying amounts of variable rate long-term borrowings approximate their fair values. Junior Subordinated Notes The carrying amount approximates fair value because the debt is variable rate tied to LIBOR. Other Borrowings The fair values disclosed for fixed rate long-term borrowings are determined by discounting their contractual cash flows using current interest rates for long-term borrowings of similar remaining maturities. Accrued Interest Receivable and Payable Since these financial instruments will typically be received or paid within three months, the carrying amounts of such instruments are deemed to be a reasonable estimate of fair value. Loan Commitments Estimates of the fair value of these off-balance sheet items are not made because of the short-term nature of these arrangements and the credit standing of the counterparties. Assets and Liabilities Recorded at Fair Value on a Recurring Basis Below is a table that presents information about certain assets and liabilities measured at fair value on a recurring basis: December 31, 2016 Level 1 Level 2 Level 3 Total (Dollars in thousands) Trading account assets $ 5,211 $ — $ — $ 5,211 Securities available for sale: U.S. government agencies — 12,107 — 12,107 Municipal securities — 146,771 — 146,771 Mortgage-backed securities — 217,937 — 217,937 U.S. Treasury securities 2,514 — — 2,514 Corporate bonds 16,214 2,144 18,358 Mutual funds 604 — — 604 8,329 393,029 2,144 403,502 Loan servicing rights — — 2,603 2,603 Derivative assets — 476 — 476 Forward sales commitments — — 19 19 Interest rate lock commitments — — 41 41 Total assets $ 8,329 $ 393,505 $ 4,807 $ 406,641 December 31, 2015 Level 1 Level 2 Level 3 Total (Dollars in thousands) Trading account assets $ 4,714 $ — $ — $ 4,714 Securities available for sale: U.S. government agencies — 25,720 — 25,720 Municipal securities — 39,858 — 39,858 Mortgage-backed securities — 171,174 — 171,174 U.S. Treasury securities 1,510 — — 1,510 Mutual funds 600 — — 600 6,824 236,752 — 243,576 Loan servicing rights — — 2,344 2,344 Forward sales commitments — — 16 16 Interest rate lock commitments — — 30 30 Total assets $ 6,824 $ 236,752 $ 2,390 $ 245,966 There were no liabilities measured at fair value on a recurring basis as of December 31, 2016 and 2015. The following table presents the changes in assets measured at fair value on a recurring basis for which we have utilized Level 3 inputs to determine fair value: Year Ended December 31, 2016 2015 2014 (Dollars in thousands) Balance at beginning of year $ 2,390 $ 2,248 $ 1,888 Corporate bonds Transfers from HTM 2,144 — — Loan servicing right activity, included in servicing income, net Capitalization from loans sold 604 544 385 Fair value adjustment (345 ) (387 ) (81 ) Mortgage derivative gains (losses) included in other income 14 (15 ) 56 Balance at end of year $ 4,807 $ 2,390 $ 2,248 Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis The table below presents information about certain assets and liabilities measured at fair value on a nonrecurring basis. There were no loans held for sale carried at fair value at either December 31, 2016 or 2015. December 31, 2016 Level 1 Level 2 Level 3 Total (Dollars in thousands) Collateral dependent impaired loans: One-to four family residential $ — $ — $ 2,205 $ 2,205 Commercial real estate — — 6,329 6,329 Home equity loans and lines of credit — — 213 213 Other construction and land — — 809 809 Real estate owned: One-to four family residential — — 1,336 1,336 Commercial real estate — — 722 722 Other construction and land — — 2,168 2,168 Total assets $ — $ — $ 13,782 $ 13,782 December 31, 2015 Level 1 Level 2 Level 3 Total (Dollars in thousands) Collateral dependent impaired loans: One-to four family residential $ — $ — $ 4,163 $ 4,163 Commercial real estate — — 7,226 7,226 Home equity loans and lines of credit — — 213 213 Other construction and land — — 658 658 Real estate owned: One-to four family residential — — 1,384 1,384 Commercial real estate — — 1,123 1,123 Other construction and land — — 2,862 2,862 Total assets $ — $ — $ 17,629 $ 17,629 There were no liabilities measured at fair value on a nonrecurring basis as of December 31, 2016 or 2015. Impaired loans totaling $4.6 million at December 31, 2016 and $5.2 million at December 31, 2015, were measured using the present value of expected future cash flows. These impaired loans were not deemed to be measured at fair value on a nonrecurring basis. The following table provides information describing the unobservable inputs used in Level 3 fair value measurements at December 31, 2016. Valuation Technique Unobservable Input General Range Impaired loans Discounted Appraisals Collateral discounts and estimated selling cost 0 – 30% Real estate owned Discounted Appraisals Collateral discounts and estimated selling cost 0 – 30% Corporate bonds Discounted Cash Flows Recent trade pricing 0-8% Loan servicing rights Discounted Cash Flows Prepayment speed 5 – 35% Discount rate 12-14% The approximate carrying and estimated fair value of financial instruments are summarized below: Carrying Fair Value Measurements at December 31, 2016 (Dollars in thousands) Amount Total Level 1 Level 2 Level 3 Assets: Cash and equivalents $ 43,294 $ 43,294 $ 43,294 $ — $ — Trading securities 5,211 5,211 5,211 — — Securities available for sale 398,291 398,291 3,118 393,029 2,144 Loans held for sale 4,584 5,093 — 5,093 — Loans receivable, net 744,361 741,612 — — 741,612 Other investments, at cost 15,261 15,261 — 15,261 — Interest receivable 5,012 5,012 — 5,012 — Bank owned life insurance 31,347 31,347 — 31,347 — Loan servicing rights 2,603 2,603 — — 2,603 Forward sales commitments 19 19 — — 19 Interest rate lock commitments 41 41 — — 41 Derivative asset 476 476 — 476 — SBIC investments 1,666 1,666 — — 1,666 Liabilities: Demand deposits $ 540,808 540,808 $ — $ 540,808 $ — Time deposits 289,205 286,611 — — 286,611 Federal Home Loan Bank advances 298,500 298,667 — 298,667 — Junior subordinated debentures 14,433 14,433 — 14,433 — Other borrowings 2,725 2,907 — 2,907 — Accrued interest payable 254 254 — 254 — Carrying Fair Value Measurements at December 31, 2015 (Dollars in thousands) Amount Total Level 1 Level 2 Level 3 Assets: Cash and equivalents $ 40,650 $ 40,650 $ 40,650 $ — $ — Trading securities 4,714 4,714 4,714 — — Securities available for sale 238,862 238,862 2,110 236,752 — Securities held to maturity 41,164 41,812 995 40,817 — Loans held for sale 8,348 8,952 — 8,952 — Loans receivable, net 624,072 620,516 — — 620,516 Other investments, at cost 8,834 8,834 — 8,834 — Interest receivable 3,554 3,554 — 3,554 — Bank owned life insurance 20,858 20,858 — 20,858 — Loan servicing rights 2,344 2,344 — — 2,344 Forward sales commitments 16 16 — — 16 Interest rate lock commitments 30 30 — — 30 SBIC investments 1,025 1,025 1,025 Liabilities: Demand deposits $ 440,475 440,475 $ — $ 440,475 $ — Time deposits 276,142 275,403 — — 275,403 Federal Home Loan Bank advances 153,500 153,441 — 153,441 — Junior subordinated debentures 14,433 14,433 — 14,433 — Other borrowings 2,198 2,198 — — 2,198 Accrued interest payable 213 213 — 213 — |
SHARE REPURCHASES
SHARE REPURCHASES | 12 Months Ended |
Dec. 31, 2016 | |
Banking and Thrift [Abstract] | |
SHARE REPURCHASES | NOTE 27. SHARE REPURCHASES On January 28, 2016, the Company announced that the Board of Directors had authorized the repurchase of up to 327,318 shares of the Company’s common stock through January 27, 2017. The authorization represented approximately 5% of the Company’s shares outstanding as of December 31, 2015. The following table summarizes share repurchase activity through December 31, 2016: Period Total Number of Average Price Total Number of Shares Maximum Number of January 1, 2016 to January 31, 2016 — $ — — — February 1, 2016 to February 29, 2016 40,621 $ 17.04 40,621 286,697 March 1, 2016 to March 31, 2016 33,382 $ 17.70 33,382 253,315 April 1, 2016 to April 30, 2016 5,997 $ 17.65 5,997 247,318 May 1, 2016 to September 30, 2016 — $ — — 247,318 October 1, 2016 to October 31, 2016 24,568 $ 18.10 24,568 222,750 November 1, 2016 to November 31, 2016 — $ — — 222,750 December 1, 2016 to December 31, 2016 — $ — — 222,750 Total year-to-date 2016 104,568 $ 17.55 104,568 222,750 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 28. SUBSEQUENT EVENTS On February 24, 2017, the Company announced the extension of its previously announced stock repurchase program (the “Stock Repurchase Program”) through February 23, 2018. The Stock Repurchase Program allows for the repurchase of up to 327,318 shares of the Company’s common stock, representing approximately 5% of the Company’s outstanding shares. Approximately 104,568 shares have been repurchased under the Stock Repurchase Program through December 31, 2016, leaving a balance of 222,750 shares that may be purchased under the Stock Repurchase Program, as extended. On February 24, 2017, the Company completed its acquisition of two branches in Jasper, Georgia from Stearns Bank, N.A.. The acquisition added approximately $147.6 million to the Company’s assets, and $153.0 million to the Company’s deposits. The Company paid a deposit premium of approximately $5.7 million. The conversion of the core operating systems is complete. However, the initial accounting for the business combination is not complete. In accordance with ASC 805, Business Combinations |
PARENT COMPANY FINANCIAL INFORM
PARENT COMPANY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
PARENT COMPANY FINANCIAL INFORMATION | NOTE 29. PARENT COMPANY FINANCIAL INFORMATION Following is condensed financial information of Entegra Financial Corp. (parent company only): Condensed Balance Sheets December 31, 2016 2015 (Dollars in thousands) Assets Cash $ 3,137 $ 17,545 Equity investment in subsidiary 144,011 128,090 Equity investment in trust 433 433 Other assets 508 188 Total assets $ 148,089 $ 146,256 Liabilities and Shareholders’ Equity Junior subordinated debentures $ 14,433 $ 14,433 Other liabilities 588 354 Shareholders’ equity 133,068 131,469 Total liabilities and shareholders’ equity $ 148,089 $ 146,256 Condensed Statements of Operations Year Ended December 31, 2016 2015 2014 (Dollars in thousands) Income Interest income $ 81 $ 190 $ 78 Dividends from subsidiary 510 114 — 591 304 78 Expenses Interest 532 458 509 Other 358 259 29 890 717 538 Loss before income taxes and equity in undistributed income of subsidiary (299 ) (413 ) (460 ) Income tax benefit allocated from consolidated income tax return 283 180 180 Loss before equity in undistributed income of subsidiary (16 ) (233 ) (280 ) Equity in undistributed income of 6,392 24,058 6,223 Net income $ 6,376 $ 23,825 $ 5,943 Condensed Statements of Cash Flows Year Ended December 31, 2016 2015 2014 (Dollars in thousands) Operating activities: Net income $ 6,376 $ 23,825 $ 5,943 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity in undistributed earnings of subsdiary (6,392 ) (24,058 ) (6,223 ) (Increase) decrease in other assets 55 (19 ) (46 ) Increase (decrease) in other liablilities 97 75 (1,567 ) Net cash provided by (used in) operating activities $ 136 $ (177 ) $ (1,893 ) Investing activities: Investment in subsidiary $ (13,486 ) $ — $ (44,581 ) Net cash used in investing activities $ (13,486 ) $ — $ (44,581 ) Financing activities: Proceeds from sale of common stock $ — $ — $ 63,651 Purchase of stock (1,922 ) — — Reimbursement from bank subsidiary for share-based compensation 864 70 — Net cash provided by (used in) financing activities $ (1,058 ) $ 70 $ 63,651 (Decrease)/increase in cash and cash equivalents (14,408 ) (107 ) 17,177 Cash and cash equivalents, beginning of year 17,545 17,652 475 Cash and cash equivalents, end of year $ 3,137 $ 17,545 $ 17,652 |
SUMMARY OF SIGNIFICANT ACCOUN37
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Summary Of Significant Accounting Policies Policies | |
Estimates | Estimates Material estimates that are particularly susceptible to significant change, in the near term, relate to the determination of the allowance for loan losses and the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans. In connection with the determination of the allowance for loan losses and the valuation of foreclosed real estate, management obtains independent appraisals for significant properties. |
Principles of Consolidation | Principles of Consolidation |
Reclassification | Reclassification |
Business Combinations | Business Combinations |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Trading Assets | Trading Assets |
Securities Available for Sale and Held to Maturity | Securities Available-for-Sale (“AFS”) and Held-to-Maturity (“HTM”) Held-to-maturity securities represent those securities that we have the positive intent and ability to hold to maturity and are carried at amortized cost. Realized gains and losses on the sale of securities and other-than-temporary impairment (“OTTI”) charges are recorded as a component of noninterest income in the Consolidated Statements of Operations. Realized gains and losses on the sale of securities are determined using the specific-identification method. Bond premiums are amortized to the call date and bond discounts are accreted to the maturity date, both on a level yield basis. We perform a quarterly review of our securities to identify those that may indicate OTTI. Our policy for OTTI within the debt securities portfolio is based upon a number of factors, including, but not limited to, the length of time and extent to which the estimated fair value has been less than cost, the financial condition of the underlying issuer and the ability of the issuer to meet contractual obligations. Other factors include the likelihood of the security’s ability to recover any decline in its estimated fair value and whether management intends to sell the security, or if it is more likely than not that management will be required to sell the investment security prior to the security’s recovery. The Company reclassified certain of its securities from available-for-sale to held-to-maturity during the years ended December 31, 2014 and 2013 in an effort to minimize the impact of future interest rate changes on Accumulated Other Comprehensive Income (Loss). The difference between the book values and fair values at the date of the transfer was reported in a separate component of Accumulated Other Comprehensive Income (Loss), and amortized into income over the remaining life of the securities as an adjustment of yield in a manner consistent with the amortization of a premium. Concurrently, the revised book values of the transferred securities (represented by the market value on the date of transfer) are amortized back to their par values over the remaining life of the security as an adjustment of yield in a manner consistent with the amortization of a discount. In the third quarter of 2016, the Company transferred its held-to-maturity investment portfolio to available-for-sale in order to provide more flexibility managing its investment portfolio. As a result, the Company is prohibited from classifying any investment securities as held-to-maturity for two years from the date of the transfer. |
Loans Held for Sale | Loans Held for Sale We generally sell the guaranteed portion of SBA loans in the secondary market and retain the unguaranteed portion in our portfolio. Upon sale of the guaranteed portion of an SBA loan, we recognize a portion of the gain on sale into income and defer a portion of the gain related to the relative fair value of the unguaranteed loan balance we retain. The deferred gain is amortized into income over the remaining life of the loan. |
Loans Receivable | Loans Receivable Generally, consumer loans are charged down to their estimated collateral value after reaching 90 days past due. The number of days past due is determined by the amount of time from when the payment was due based on contractual terms. Commercial loans are charged off as management becomes aware of facts and circumstances that raise doubt as to the collectability of all or a portion of the principal and when we believe a confirmed loss exists. The Company began originating and selling the guaranteed portion of SBA loans into the secondary market during the year ended December 31, 2013. When the Company retains the right to service a sold SBA loan, the previous carrying amount is allocated between the guaranteed portion of the loan sold, the unguaranteed portion of the loan retained and the retained SBA servicing right based on their relative fair values on the date of transfer. |
Nonaccrual Loans | Nonaccrual Loans For loans modified in a troubled debt restructuring, the loan is generally placed on non-accrual until there is a period of satisfactory payment performance by the borrower (either immediately before or after the restructuring), generally defined as six months, and the ultimate collectability of all amounts contractually due is not in doubt. |
Troubled Debt Restructurings (TDR) | Troubled Debt Restructurings (“TDR”) All TDRs are considered to be impaired loans and will be reported as an impaired loan for the remaining life of the loan, unless the restructuring agreement specifies an interest rate equal to or greater than the rate that would be accepted at the time of the restructuring for a new loan with comparable risk and it is fully expected that the original principal and interest will be collected according to the restructured agreement. We may also remove a loan from TDR and impaired status if the TDR is subsequently restructured and at the time of the subsequent restructuring the borrower is not experiencing financial difficulties and, under the terms of the subsequent restructuring agreement, no concession has been granted to the borrower. |
Allowance for Loan Losses (ALL) | Allowance for Loan Losses (“ALL”) A loan is considered impaired when it is probable that we will be unable to collect all principal and interest payments due according to the original contractual terms of the loan agreement. We individually evaluate all loans classified as substandard or nonaccrual greater than $350,000 for impairment. If the impaired loan is considered collateral dependent, a charge-off is taken based upon the appraised value of the property (less an estimate of selling costs if foreclosure is anticipated). If the impaired loan is not collateral dependent, a specific reserve is established based upon an estimate of the future discounted cash flows after consideration of modifications and the likelihood of future default and prepayment. The allowance for non-impaired loans consists of a base historical loss reserve and a qualitative reserve. Prior to the first quarter of 2015, we more heavily weighted the most recent four quarters than the least recent four quarters. Beginning in the first quarter of 2015, we no longer weight any quarters to calculate our average loss rates. This change in weighting did not have a material impact on our allowance for loan losses methodology. The loss rates for the base loss reserve are segmented into 13 loan categories and contain loss rates ranging from approximately 0.5% to 5%. The qualitative reserve adjusts the average loss rates utilized in the base loss reserve for trends in the following internal and external factors: · Non-accrual and classified loans · Collateral values · Loan concentrations and loan growth · Economic conditions – including unemployment rates, building permits, and a regional economic index. Qualitative reserve adjustment factors are decreased for favorable trends and increased for unfavorable trends. These factors are subject to further adjustment as economic and other conditions change. |
Fixed Assets | Fixed Assets |
Real Estate Owned | Real Estate Owned Subsequent to foreclosure, real estate owned is recorded at the lower of carrying amount or fair value less estimated costs to sell. Valuations are periodically performed by management, but not less than every eighteen months, and an additional allowance for losses is established by a charge to Net Cost of Operation of Real Estate Owned in the Consolidated Statements of Operations, if necessary. |
Other Investments, at cost | Other Investments, at cost FHLB stock is carried at cost and evaluated for impairment based on the ultimate recoverability of the par value. The Company has evaluated its FHLB stock and concluded that it is not impaired because the FHLB Atlanta is currently paying cash dividends and redeeming stock at par. The FHLB requires members to purchase and hold a specified level of stock based upon on the members asset value, level of borrowings and participation in other programs offered. Stock in the FHLB is non-marketable and is redeemable at the discretion of the FHLB. Members do not purchase stock in the FHLB for the same reasons that traditional equity investors acquire stock in an investor-owned enterprise. Rather, members purchase stock to obtain access to the low-cost products and services offered by the FHLB. Unlike equity securities of traditional for-profit enterprises, the stock of the FHLB does not provide its holders with an opportunity for capital appreciation because, by regulation, FHLB stock can only be purchased, redeemed and transferred at par value. Both cash and stock dividends are reported as Other interest income in the Consolidated Statements of Operations. |
Bank Owned Life Insurance (BOLI) | Bank Owned Life Insurance (“BOLI”) |
Loan Servicing Rights (LSR) | Loan Servicing Rights (“LSR”) Servicing fee income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal (generally 25 basis points for residential mortgage loans and 100 basis points for SBA loans) or a fixed amount per loan, and are recorded as income when earned. Changes in fair value of LSR’s are netted against loan servicing fee income and reported as Servicing income (expense), net in the Consolidated Statements of Operations. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The goodwill impairment analysis is a two-step test. The first, used to identify potential impairment, involves comparing each reporting unit’s estimated fair value to its carrying value, including goodwill. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill is not considered to be impaired. If the carrying value exceeds estimated fair value, there is an indication of potential impairment and the second step is performed to measure the amount of impairment. Authoritative guidance gives entities the option of first performing a qualitative assessment to test goodwill for impairment on a reporting-unit basis. If, after performing the qualitative assessment, an entity concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the entity would perform the two-step goodwill impairment test. However, if, after applying the qualitative assessment, the entity concludes that it is not more likely than not that the fair value is less than the carrying amount, the two-step goodwill impairment test is not required. Core deposit intangibles are amortized over the estimated useful lives of the deposit accounts acquired (generally seven years on a straight line basis). |
Derivative Financial Instruments - Interest Rate Lock Commitments and Forward Sale Contracts | Derivative Financial Instruments and Hedging Activities – Interest Rate Lock Commitments and Forward Sale Contracts Our interest rate risk management strategy incorporates the use of derivative instruments to minimize fluctuations in net income that are caused by interest rate volatility. The goal is to manage interest rate sensitivity by modifying the repricing or maturity characteristics of certain balance sheet assets and liabilities so that net interest revenue is not, on a material basis, adversely affected by movements in interest rates. We view this strategy as a prudent management of interest rate risk, such that net income is not exposed to undue risk presented by changes in interest rates. In carrying out this part of its interest rate risk management strategy, we use interest rate derivative contracts; primarily interest rate swaps. Interest rate swaps generally involve the exchange of fixed- and variable-rate interest payments between two parties, based on a common notional principal amount and maturity date. We classify our derivative financial instruments as either (1) a hedge of an exposure to changes in the fair value of a recorded asset or liability (“fair value hedge”), (2) a hedge of an exposure to changes in the cash flows of a recognized asset, liability or forecasted transaction (“cash flow hedge”), or (3) derivatives not designated as accounting hedges. Changes in the fair value of derivatives not designated as hedges are recognized in current period earnings. Our interest rate swaps are classified as cash flow hedges and as such, adjustments to fair value are recorded in Accumulated Other Comprehensive Income. |
Small Business Investment Company Investments | Small Business Investment Company Investments |
Advertising Expense | Advertising Expense |
Income Taxes | Income Taxes Deferred income tax assets and liabilities are determined using the asset and liability method and are reported net in the Consolidated Balance Sheets. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax basis of assets and liabilities and recognizes enacted changes in tax rate and laws. When deferred tax assets are recognized, they are subject to a valuation allowance based on management’s judgment as to whether realization is more likely than not. In determining the need for a valuation allowance, the Company considers the following sources of taxable income: · Future reversals of existing taxable temporary differences · Future taxable income exclusive of reversing temporary differences and carry forwards · Taxable income in prior carryback years · Tax planning strategies that would, if necessary, be implemented As a result of the analysis above, the Company concluded that a valuation allowance was not necessary as of December 31, 2016 and 2015. The Company maintained a full valuation allowance as of December 31, 2014 except for consideration of certain tax planning strategies. Accrued taxes represent the net estimated amount due to taxing jurisdictions and are reported in other assets or other liabilities, as appropriate, in the Consolidated Balance Sheets. We evaluate and assess the relative risks and appropriate tax treatment of transactions and filing positions after considering statutes, regulations, judicial precedent and other information and maintain tax accruals consistent with the evaluation of these relative risks and merits. Changes to the estimate of accrued taxes occur periodically due to changes in tax rates, interpretations of tax laws, the status of examinations being conducted by taxing authorities and changes to statutory, judicial and regulatory guidance. These changes, when they occur, can affect deferred taxes and accrued taxes, as well as the current period’s income tax expense and can be significant to our operating results. Tax positions are recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50 percent likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. |
Allowance for Unfunded Commitments | Allowance for Unfunded Commitments |
Junior Subordinated Notes | Junior Subordinated Notes |
Stock-based Compensation | Stock-based Compensation Tax benefits realized upon the vesting of restricted shares that exceed the expense previously recognized for reporting purposes are recorded through the income statement as income tax benefit. If the tax benefit upon vesting is less than the expense previously recorded, the shortfall is recorded through the income statement as income tax expense. |
Segments | Segments |
Subsequent Events | Subsequent Events |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In January 2016, the Financial Accounting Standards Board (“FASB”) amended the Financial Instruments In March 2016, the FASB amended the Revenue from Contracts with Customers In March 2016, the FASB issued guidance to simplify several aspects of the accounting for share-based payment award transactions including the income tax consequences, the classification of awards as either equity or liabilities, and the classification on the statement of cash flows. Additionally, the guidance simplifies two areas specific to entities other than public business entities allowing them to apply a practical expedient to estimate the expected term for all awards with performance or service conditions that have certain characteristics and also allowing them to make a one-time election to switch from measuring all liability-classified awards at fair value to measuring them at intrinsic value. The guidance will be effective for the Company for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The Company does not expect this guidance to have a material effect on its financial statements. In June 2016, the FASB issued amendments to Accounting Standards Update (“ASU”) 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In March 2016, the FASB issued ASU No. 2016-09 “ Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting In August 2016, the FASB issued ASU No. 2016-15 , “Classification of Certain Cash Receipts and Cash Payments.” In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement Period Adjustments In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Companys financial position, results of operations or cash flows. |
STOCK CONVERSION AND CHANGE I38
STOCK CONVERSION AND CHANGE IN CORPORATE FORM (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stock Conversion And Change In Corporate Form Tables | |
Proceeds From Common Stock Offering Summary | Common Stock Offering Summary (Dollars in thousands) Gross proceeds $ 65,464 Issuance costs (1,813 ) Net proceeds $ 63,651 Contributed to the Bank $ 44,581 Retained by the Company 19,070 $ 63,651 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
As Recorded by Old Bank Town [Member] | |
Schedule of Assets and Liabilities assumed at the date of acquisition and their initial fair values | The purchased assets and assumed liabilities were recorded at their acquisition date fair values, and are summarized in the table below ( in thousands. As recorded by Fair Value As recorded by Assets Cash and cash equivalents $ 7,573 $ — $ 7,573 Investments 30,882 246 31,128 Loans 64,573 272 64,845 Fixed assets 3,414 (22 ) 3,392 Interest receivable 552 — 552 Core deposit intangible — 530 530 Other real estate owned 880 43 923 Deferred tax asset 259 207 466 Other assets 938 (337 ) 601 Total assets acquired $ 109,071 $ 939 $ 110,010 Liabilities Deposits $ 88,059 $ 648 $ 88,707 FHLB advances 9,000 25 9,025 Accrued Interest payable 30 — 30 Other liabilities 125 (9 ) 116 Total liabilities assumed 97,214 664 97,878 Excess of assets acquired over liabities assumed $ 11,857 $ 275 $ 12,132 Purchase price 13,486 Goodwill $ 1,354 On December 11, 2015, the Bank completed its acquisition of two branches from Arthur State Bank (“ASB”). In accordance with the Purchase and Assumption Agreement, dated August 13, 2015, by and between the Bank and ASB (the “P&A Agreement”), the Bank acquired approximately $39.9 million of deposits, approximately $4.7 million of performing loans, and the bank facilities and certain other assets. In consideration of the purchased assets and transferred liabilities, the Bank paid (1) the recorded investment of the loans acquired, (2) the fair value, or approximately $2.1 million, for the branch facilities and certain assets, and (3) a deposit premium of $1.2 million, equal to 2.87% of the average daily deposits for the 30- day period immediately prior to the acquisition date. |
As Recorded by ASB | |
Schedule of Assets and Liabilities assumed at the date of acquisition and their initial fair values | The following table summarizes the assets acquired and liabilities assumed at the date of acquisition and their initial fair values: (Dollars in thousands) As Recorded by ASB Fair Value Adjustments As Recorded by the Company Assets Cash and cash equivalents $ 33,076 $ — $ 33,076 Loans 4,717 (72 )(a) 4,645 Premises and equipment 2,080 — 2,080 Core deposit intangible — 590 (b) 590 Other assets 16 — 16 Total assets acquired $ 39,889 $ 518 $ 40,407 Liabilities Deposits: Noninterest-bearing demand $ 22,084 $ — 22,084 Interest-bearing demand 15 — 15 Money market 2,556 — 2,556 Savings 7,242 — 7,242 Time deposits 7,967 31 (c) 7,998 Total deposits 39,864 31 39,895 Other liabilities 25 — 25 Total liabilities assumed 39,889 31 39,920 Excess of assets acquired over liabilities assumed $ — $ 487 $ 487 Purchase price 1,198 Goodwill $ 711 Fair values are subject to refinement for a period not to exceed one year after the closing date of an acquisition as information relative to closing date fair values becomes available. In particular, the fair value of collateral dependent loans and other real estate owned may change to the extent that the Company receives updated appraisals indicating changes in valuation assumptions at acquisition. On October 19, 2016, the Bank entered into a definitive agreement with Stearns Bank, N.A. (Stearns) pursuant to which the Bank acquired two branches in northern Georgia on February 24, 2017. The Bank assumed approximately $150.0 million in deposits and paid a deposit premium of 3.65%. |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investment Securities Tables | |
Schedule of holdings of our trading account | The following table presents the holdings of our trading account as of December 31, 2016 and December 31, 2015: December 31, 2016 2015 (Dollars in thousands) Trading account $ 5,211 $ 4,714 |
Schedule of investment securities available for sale | The amortized cost and estimated fair values of securities classified as AFS are summarized as follows: December 31, 2016 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value (Dollars in thousands) U.S. government agencies $ 12,076 $ 31 $ — $ 12,107 Municipal securities 152,208 337 (5,774 ) 146,771 Mortgage-backed securities — U.S. government agencies 128,820 107 (2,161 ) 126,766 SBA securities 30,002 13 (303 ) 29,712 Collateralized mortgage obligations 62,524 16 (1,081 ) 61,459 U.S. Treasury securities 2,501 15 (2 ) 2,514 Corporate bonds 18,354 171 (167 ) 18,358 Mutual funds 616 — (12 ) 604 $ 407,101 $ 690 $ (9,500 ) $ 398,291 December 31, 2015 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value (Dollars in thousands) U.S. government agencies $ 25,633 $ 123 $ (36 ) $ 25,720 Municipal securities 39,751 311 (204 ) 39,858 Mortgage-backed securities U.S. government agencies 112,857 178 (1,025 ) 112,010 SBA securities 47,768 86 (272 ) 47,582 Collateralized mortgage obligations 11,702 12 (132 ) 11,582 U.S. Treasury securities 1,500 10 — 1,510 Mutual funds 602 — (2 ) 600 $ 239,813 $ 720 $ (1,671 ) $ 238,862 |
Schedule of investment securities held to maturity | The amortized cost and estimated fair values of securities HTM as of December 31, 2015 are summarized below. As of December 31, 2016, the Company did not hold any securities classified as HTM. December 31, 2015 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value (Dollars in thousands) U.S. government agencies $ 15,877 $ 645 $ (23 ) $ 16,499 Municipal securities 12,428 199 (93 ) 12,534 Mortgage-backed securities Collateralized mortgage obligations 4,834 4 (62 ) 4,776 U.S. Treasury securities 1,002 — (7 ) 995 Corporate debt securities 7,023 25 (40 ) 7,008 $ 41,164 $ 873 $ (225 ) $ 41,812 |
Transfer of Investment Securities from Available for Sale to Held to Maturity | Information pertaining to the activity of unrealized losses related to HTM securities (before the impact of income taxes) previously recognized in accumulated other comprehensive income (“AOCI”) is summarized below: Year Ended December 31, (Dollars in thousands) 2016 2015 2014 Beginning unrealized loss related to HTM securities previously recognized in AOCI $ 903 $ 1,887 $ 2,012 Additions for transfers to HTM — — 74 Amortization of unrealized losses on HTM securities previously recognized in AOCI (578 ) (984 ) (199 ) Reduction from transfers to AFS (325 ) — — Ending unrealized loss related to HTM securities previously recognized in AOCI $ — $ 903 $ 1,887 |
Unrealized Losses Related to Held to Maturity Securities Previously Recognized in Other Comprehensive Income | Information pertaining to securities with gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows: December 31, 2016 Less Than 12 Months More Than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (Dollars in thousands) Held-to-Maturity: $ — $ — $ — $ — $ — $ — Available-for-Sale: Municipal securities $ 122,468 $ 5,759 $ 331 $ 15 $ 122,799 $ 5,774 Mortgage-backed securities U.S. government agencies 101,382 2,068 5,102 93 106,484 2,161 SBA 15,199 145 11,434 158 26,633 303 Collateralized mortgage obligations 53,513 1,035 1,058 46 54,571 1,081 U.S. Treasury securities 1,000 2 — — 1,000 2 Corporate debt securities 6,741 167 — — 6,741 167 Mutual funds 616 12 — — 616 12 $ 300,919 $ 9,188 $ 17,925 $ 312 $ 318,844 $ 9,500 December 31, 2015 Less Than 12 Months More Than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (Dollars in thousands) Held to Maturity: U.S. government agencies $ 5,705 $ 23 $ — $ — $ 5,705 $ 23 Municipal securities 4,365 93 — — 4,365 93 Mortgage-backed securities Collateralized mortgage obligation 2,693 62 2,693 62 U.S. Treasury securities 995 7 — — 995 7 Corporate debt securities 4,911 40 — — 4,911 40 $ 18,669 $ 225 $ — $ — $ 18,669 $ 225 Available for Sale: U.S. government agencies $ 13,317 $ 36 $ — $ — $ 13,317 $ 36 Municipal securities 18,769 176 947 28 19,716 204 Mortgage-backed securities U.S. government agencies 73,476 662 13,892 363 87,368 1,025 SBA 23,012 190 5,730 82 28,742 272 Collateralized mortgage obligations 5,931 74 1,283 58 7,214 132 Mutual funds 600 2 — — 600 2 $ 135,105 $ 1,140 $ 21,852 $ 531 $ 156,957 $ 1,671 |
Securities Gross Unrealized Losses Position | December 31, 2016 Less Than 12 Months More Than 12 Months Total Municipal securities 129 1 130 Mortgage-backed securities U.S. government agencies 66 5 71 SBA 11 8 19 Collateralized mortgage obligations 25 1 26 U.S. Treasury securities 1 — 1 Corporate debt securities 8 — 8 240 15 255 December 31, 2015 Less Than 12 Months More Than 12 Months Total U.S. government agencies 13 — 13 Municipal securities 51 2 53 Mortgage-backed securities U.S. government agencies 52 9 61 SBA 14 5 19 Collateralized mortgage obligations 5 1 6 U.S. Treasury securities 1 — 1 Corporate debt securities 9 — 9 Mutual funds 1 — 1 146 17 163 |
Proceeds from Sales of Securities Available For Sale and Their Corresponding Gross Realized Gains and Losses | The Company received proceeds from sales of securities classified as AFS and corresponding gross realized gains and losses as follows: For the Year Ended December 31, 2016 2015 2014 (Dollars in thousands) Gross proceeds $ 124,823 $ 39,022 $ 19,170 Gross realized gains 1,261 423 680 Gross realized losses 45 20 — |
Amortized Cost and Estimated Fair Value of Securities by Contractual Maturity | Available for Sale Amortized Cost Fair Value (Dollars in thousands) Less than 1 year $ 6,373 $ 6,369 Over 1 year through 5 years 17,845 17,846 After 5 years through 10 years 30,784 30,638 Over 10 years 130,753 125,501 185,755 180,354 Mortgage-backed securities 221,346 217,937 Total $ 407,101 $ 398,291 |
LOANS RECEIVABLE (Tables)
LOANS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Loans Receivable Tables | |
Loan Receivable | Loans receivable balances are summarized as follows: December 31, 2016 2015 (Dollars in thousands) Real estate mortgage loans: One-to four-family residential $ 278,437 $ 248,633 Commercial real estate 292,879 214,413 Home equity loans and lines of credit 50,334 53,446 Residential construction 18,531 7,848 Other construction and land 60,605 57,316 Total real estate loans 700,786 581,656 Commercial and industrial 41,306 41,046 Consumer 4,594 3,639 Total commercial and consumer 45,900 44,685 Loans receivable, gross 746,686 626,341 Less: Net deferred loan fees (923 ) (1,388 ) Fair value discount (857 ) (72 ) Unamortized premium 605 557 Unamortized discount (1,150 ) (1,366 ) Loans receivable, net of deferred fees $ 744,361 $ 624,072 |
Activity Related to Discount on Purchased Loans | The following table presents the activity related to the discount on individually purchased loans: For the Year Ended December 31, (Dollars in thousands) 2016 2015 2014 Discount on purchased loans, beginning of period $ 1,366 $ 1,487 $ — Additional discount for new purchases — 485 2,607 Accretion (216 ) (311 ) (365 ) Discount applied to charge-offs — (295 ) — Interest income recognized for repayments and restructurings — — (755 ) Discount on purchased loans, end of period $ 1,150 $ 1,366 $ 1,487 The following table presents the activity related to the fair value discount on acquired loans: For the Year Ended December 31, (Dollars in thousands) 2016 2015 2014 Fair value discount, beginning of period $ 72 $ — $ — Additional discount for acquisitions 960 72 — Accretion (175 ) — — Discount on purchased loans, end of period $ 857 $ 72 $ — |
Aggregate amount of extensions of credit to executive officers and directors | December 31, 2016 2015 Beginning of year $ 8,930 $ 9,307 New loans 51 30 Repayments (759 ) (407 ) End of year $ 8,222 $ 8,930 |
ALLOWANCE FOR LOAN LOSSES (Tabl
ALLOWANCE FOR LOAN LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Allowance For Loan Losses Tables | |
Changes in Allowance for Loan Losses | Year Ended December 31, 2016 One-to four Family Residential Commercial Real Estate Home Equity and Lines of Credit Residential Construction Other Construction and Land Commercial Consumer Total (Dollars in thousands) Beginning balance $ 2,455 $ 3,221 $ 1,097 $ 278 $ 1,400 $ 603 $ 407 $ 9,461 Provision 413 1,016 (486 ) (125 ) (122 ) (85 ) (337 ) 274 Charge-offs (133 ) (431 ) (158 ) — (560 ) (63 ) (201 ) (1,546 ) Recoveries 77 173 224 32 130 144 336 1,116 Ending balance $ 2,812 $ 3,979 $ 677 $ 185 $ 848 $ 599 $ 205 $ 9,305 Year Ended December 31, 2015 One-to four Family Residential Commercial Real Estate Home Equity and Lines of Credit Residential Construction Other Construction and Land Commercial Consumer Total (Dollars in thousands) Beginning balance $ 2,983 $ 2,717 $ 1,333 $ 510 $ 2,936 $ 308 $ 285 $ 11,072 Provision (251 ) 388 200 (235 ) (1,741 ) 272 (133 ) (1,500 ) Charge-offs (536 ) (52 ) (540 ) — (137 ) (9 ) (48 ) $ (1,322 ) Recoveries 259 168 104 3 342 32 303 1,211 Ending balance $ 2,455 $ 3,221 $ 1,097 $ 278 $ 1,400 $ 603 $ 407 $ 9,461 Year Ended December 31, 2014 One-to four Family Residential Commercial Real Estate Home Equity and Lines of Credit Residential Construction Other Construction and Land Commercial Consumer Total (Dollars in thousands) Beginning balance $ 3,693 $ 4,360 $ 1,580 $ 501 $ 3,516 $ 336 $ 265 $ 14,251 Provision (201 ) 408 310 9 (232 ) (58 ) (203 ) 33 Charge-offs (702 ) (2,415 ) (598 ) — (566 ) (133 ) (140 ) (4,554 ) Recoveries 193 364 41 — 218 163 363 1,342 Ending balance $ 2,983 $ 2,717 $ 1,333 $ 510 $ 2,936 $ 308 $ 285 $ 11,072 |
Investment in Loans by Portfolio Segment | December 31, 2016 One-to four Family Residential Commercial Real Estate Home Equity and Lines of Credit Residential Construction Other Construction and Land Commercial Consumer Total (Dollars in thousands) Allowance for loan losses Individually evaluated for impairment $ 201 $ 178 $ 2 $ — $ 175 $ 28 $ — $ 584 Collectively evaluated for impairment 2,611 3,801 675 185 673 571 205 8,721 $ 2,812 $ 3,979 $ 677 $ 185 $ 848 $ 599 $ 205 $ 9,305 Loans Receivable Individually evaluated for impairment $ 3,814 $ 8,153 $ 313 $ — $ 1,720 $ 306 $ — $ 14,306 Collectively evaluated for impairment 274,623 284,726 50,021 18,531 58,885 41,000 4,594 732,380 $ 278,437 $ 292,879 $ 50,334 $ 18,531 $ 60,605 $ 41,306 $ 4,594 $ 746,686 December 31, 2015 One-to four Family Residential Commercial Real Estate Home Equity and Lines of Credit Residential Construction Other Construction and Land Commercial Consumer Total (Dollars in thousands) Allowance for loan losses Individually evaluated for impairment $ 344 $ 61 $ 6 $ — $ 61 $ 38 $ — $ 510 Collectively evaluated for impairment 2,111 3,160 1,091 278 1,339 565 407 8,951 $ 2,455 $ 3,221 $ 1,097 $ 278 $ 1,400 $ 603 $ 407 $ 9,461 Loans Receivable Individually evaluated for impairment $ 6,315 $ 9,013 $ 313 $ — $ 1,509 $ 318 $ — $ 17,468 Collectively evaluated for impairment 242,318 205,400 53,133 7,848 55,807 40,728 3,639 608,873 $ 248,633 $ 214,413 $ 53,446 $ 7,848 $ 57,316 $ 41,046 $ 3,639 $ 626,341 |
Credit Risk Profile by Rating | December 31, 2016 Loan Grade One-to-Four Family Residential Commercial Real Estate Home Equity and Lines of Credit Residential Construction Other Construction and Land Commercial Consumer Total (Dollars in thousands) 1 $ — $ 9,867 $ — $ — $ — $ 429 $ — $ 10,296 2 — 4,290 — — — 1,463 — 5,753 3 28,129 24,744 1,812 587 2,163 2,772 — 60,207 4 75,542 131,117 3,393 10,686 22,374 21,824 51 264,987 5 26,474 95,447 3,471 2,370 17,942 11,092 325 157,121 6 2,594 11,537 — 286 2,473 268 — 17,158 7 1,747 7,346 — — 1,218 429 — 10,740 $ 134,486 $ 284,348 $ 8,676 $ 13,929 $ 46,170 $ 38,277 $ 376 $ 526,262 Ungraded Loan Exposure: Performing $ 142,889 $ 8,531 $ 41,406 $ 4,602 $ 14,182 $ 3,029 $ 4,172 $ 218,811 Nonperforming 1,062 — 252 — 253 — 46 1,613 Subtotal $ 143,951 $ 8,531 $ 41,658 $ 4,602 $ 14,435 $ 3,029 $ 4,218 $ 220,424 Total $ 278,437 $ 292,879 $ 50,334 $ 18,531 $ 60,605 $ 41,306 $ 4,594 $ 746,686 December 31, 2015 Loan Grade One-to-Four Family Residential Commercial Real Estate Home Equity and Lines of Credit Residential Construction Other Construction and Land Commercial Consumer Total (Dollars in thousands) 1 $ — $ 65 $ — $ — $ — $ 10,336 $ — $ 10,401 2 — 4,446 — — — 99 — 4,545 3 18,518 11,396 1,358 525 1,479 1,734 — 35,010 4 46,942 74,542 1,961 2,036 13,850 18,586 1 157,918 5 33,886 97,469 6,648 1,347 22,864 9,274 592 172,080 6 2,903 13,171 — 1,106 1,718 297 — 19,195 7 3,335 13,106 — — 579 458 — 17,478 $ 105,584 $ 214,195 $ 9,967 $ 5,014 $ 40,490 $ 40,784 $ 593 $ 416,627 Ungraded Loan Exposure: Performing $ 141,771 $ 218 $ 43,158 $ 2,834 $ 16,707 $ 262 $ 3,046 $ 207,996 Nonperforming 1,278 — 321 — 119 — — 1,718 Subtotal $ 143,049 $ 218 $ 43,479 $ 2,834 $ 16,826 $ 262 $ 3,046 $ 209,714 Total $ 248,633 $ 214,413 $ 53,446 $ 7,848 $ 57,316 $ 41,046 $ 3,639 $ 626,341 |
Aging Analysis of Recorded Investment of Past-Due Financing Receivables | December 31, 2016 30-59 Days Past Due 60-89 Days Past Due 90 Days and Over Past Due Total Past Due Current Total Loans Receivable (Dollars in thousands) One-to-four family residential $ 4,931 $ 1,116 $ 554 $ 6,601 $ 271,836 $ 278,437 Commercial real estate 1,383 1,800 1,681 4,864 288,015 292,879 Home equity and lines of credit 126 44 233 403 49,931 50,334 Residential construction 180 — — 180 18,351 18,531 Other construction and land 467 — 919 1,386 59,219 60,605 Commercial 368 — — 368 40,938 41,306 Consumer 62 1 — 63 4,531 4,594 Total $ 7,517 $ 2,961 $ 3,387 $ 13,865 $ 732,821 $ 746,686 December 31, 2015 30-59 Days Past Due 60-89 Days Past Due 90 Days and Over Past Due Total Past Due Current Total Loans Receivable (Dollars in thousands) One-to-four family residential $ 5,610 $ 1,260 $ 1,205 $ 8,075 $ 240,558 $ 248,633 Commercial real estate 1,585 — 605 2,190 212,223 214,413 Home equity and lines of credit 369 38 322 729 52,717 53,446 Residential construction — — — — 7,848 7,848 Other construction and land 208 397 138 743 56,573 57,316 Commercial 625 — — 625 40,421 41,046 Consumer 12 4 — 16 3,623 3,639 Total $ 8,409 $ 1,699 $ 2,270 $ 12,378 $ 613,963 $ 626,341 |
Summary of Average Impaired Loans | The following table presents investments in loans considered to be impaired and related information on those impaired loans: December 31, 2016 December 31, 2015 Recorded Balance Unpaid Principal Balance Specific Allowance Recorded Balance Unpaid Principal Balance Specific Allowance (Dollars in thousands) Loans without a valuation allowance One-to four-family residential $ 2,670 $ 2,723 $ — $ 4,289 $ 4,403 $ — Commercial real estate 6,078 7,710 — 7,226 8,809 — Home equity and lines of credit 213 328 — 213 328 — Other construction and land 809 911 — 658 818 — Commercial — — — — — — $ 9,770 $ 11,672 $ — $ 12,386 $ 14,358 $ — Loans with a valuation allowance One-to four-family residential $ 1,144 $ 1,144 $ 201 $ 2,026 $ 2,026 $ 344 Commercial real estate 2,075 2,075 178 1,787 1,787 61 Home equity and lines of credit 100 100 2 100 100 6 Other construction and land 911 911 175 851 851 61 Commercial 306 306 28 318 318 38 $ 4,536 $ 4,536 $ 584 $ 5,082 $ 5,082 $ 510 Total One-to four-family residential $ 3,814 $ 3,867 $ 201 $ 6,315 $ 6,429 $ 344 Commercial real estate 8,153 9,785 178 9,013 10,596 61 Home equity and lines of credit 313 428 2 313 428 6 Other construction and land 1,720 1,822 175 1,509 1,669 61 Commercial 306 306 28 318 318 38 $ 14,306 $ 16,208 $ 584 $ 17,468 $ 19,440 $ 510 The following table presents average impaired loans and interest income recognized on those impaired loans, by class segment, for the periods indicated: For the Year Ended December 31, 2016 2015 2014 Average Investment in Impaired Loans Interest Income Recognized Average Investment in Impaired Loans Interest Income Recognized Average Investment in Impaired Loans Interest Income Recognized (Dollars in thousands) Loans without a valuation allowance One-to-four family residential $ 2,758 $ 117 $ 6,072 $ 174 $ 6,079 $ 242 Commercial real estate 7,834 116 7,999 299 14,255 664 Home equity and lines of credit 328 10 213 9 1,728 53 Other construction and land 923 27 668 30 2,332 70 Commercial — — — — — — $ 11,843 $ 270 $ 14,952 $ 512 $ 24,394 $ 1,029 Loans with a valuation allowance One-to-four family residential $ 1,162 $ 48 $ 2,056 $ 88 $ 4,048 $ 137 Commercial real estate 2,098 82 1,808 82 3,715 152 Home equity and lines of credit 100 4 100 4 149 6 Other construction and land 1,027 37 1,502 37 2,042 81 Commercial 312 19 323 19 334 20 $ 4,699 $ 190 $ 5,789 $ 230 $ 10,288 $ 396 Total One-to-four family residential $ 3,920 $ 165 $ 8,128 $ 262 $ 10,127 $ 379 Commercial real estate 9,932 198 9,807 381 17,970 816 Home equity and lines of credit 428 14 313 13 1,877 59 Other construction and land 1,950 64 2,170 67 4,374 151 Commercial 312 19 323 19 334 20 $ 16,542 $ 460 $ 20,741 $ 742 $ 34,682 $ 1,425 |
Financing Receivables on Nonaccrual Status | December 31, 2016 2015 (Dollars in thousands) One-to-four family residential $ 1,125 $ 2,893 Commercial real estate 3,536 3,628 Home equity loans and lines of credit 250 320 Other construction and land 1,042 384 Commercial 41 55 Consumer 47 — Non-performing loans $ 6,041 $ 7,280 |
Summary of TDR Loans | The following tables summarize TDRs as of the dates indicated: December 31, 2016 Performing Nonperforming Total TDRs TDRs TDRs (Dollars in thousands) One-to-four family residential $ 3,560 $ 210 $ 3,770 Commercial real estate 4,327 2,366 6,693 Home equity and lines of credit 313 — 313 Other construction and land 1,377 206 1,583 Commercial 305 — 305 $ 9,882 $ 2,782 $ 12,664 December 31, 2015 Performing Nonperforming Total TDRs TDRs TDRs (Dollars in thousands) One-to-four family residential $ 4,182 $ 211 $ 4,393 Commercial real estate 5,134 2,922 8,056 Home equity and lines of credit 313 — 313 Residential construction — — — Other construction and land 1,259 250 1,509 Commercial 318 12 330 $ 11,206 $ 3,395 $ 14,601 Loan modifications that were deemed TDRs at the time of the modification during the period presented are summarized in the table below: For the Year Ended December 31, 2015 (Dollars in thousands) Number of Loans Pre-modification Outstanding Recorded Investment Post-modification Outstanding Recorded Investment Forgiveness of principal: Commercial real estate 1 $ 1,988 $ 1,693 1 $ 1,988 $ 1,693 Extended payment terms: Commercial real estate 1 $ 833 $ 833 1 $ 833 $ 833 |
CONCENTRATIONS OF CREDIT RISK (
CONCENTRATIONS OF CREDIT RISK (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Concentrations Of Credit Risk Tables | |
Concentration of Company loan | The Company’s loans were concentrated in the following categories: December 31, 2016 2015 One-to-four family residential 37.3 % 39.7 % Commercial real estate 39.2 34.2 Home equity and lines of credit 6.7 8.5 Residential construction 2.5 1.3 Other construction and land 8.1 9.1 Commercial 5.5 6.6 Consumer 0.7 0.6 Total loans 100.0 % 100.0 % |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fixed Assets Tables | |
Schedule of Fixed Assets | Fixed assets are summarized as follows: December 31, 2016 2015 (Dollars in thousands) Land and improvements $ 9,201 $ 8,181 Buildings 18,696 16,826 Furniture, fixtures, and equipment 8,429 7,569 Construction in process — 31 Total fixed assets 36,326 32,607 Less accumulated depreciation (16,117 ) (14,934 ) Fixed assets, net $ 20,209 $ 17,673 |
Schedule of Future Minimum Rental Payments for Operating Leases | Following is a schedule of approximate annual future minimum lease payments under operating leases that have initial or remaining lease terms in excess of one year (in thousands): 2017 $ 49 Total minimum lease commitments $ 49 |
REAL ESTATE OWNED (Tables)
REAL ESTATE OWNED (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Real Estate Owned Tables | |
Summary of Real Estate Owned and Changes in the Valuation Allowances | As of December 31, (Dollars in thousands) 2016 2015 Real estate owned, gross $ 5,650 $ 6,741 Less: Valuation allowance 1,424 1,372 Real estate owned, net $ 4,226 $ 5,369 Year Ended December 31, (Dollars in thousands) 2016 2015 2014 Valuation allowance, beginning $ 1,372 $ 1,760 $ 5,560 Provision charged to expense 655 171 2,349 Reduction due to disposal (603 ) (559 ) (6,149 ) Valuation allowance, ending $ 1,424 $ 1,372 $ 1,760 |
BANK OWNED LIFE INSURANCE (BO46
BANK OWNED LIFE INSURANCE (BOLI) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Bank Owned Life Insurance Boli Tables | |
Schedule of composition of Bank Owned Life Insurance | December 31, 2016 2015 (Dollars in thousands) Separate account $ 12,548 $ 12,388 General account 17,944 7,636 Hybrid 855 834 Total $ 31,347 $ 20,858 |
LOAN SERVICING (Tables)
LOAN SERVICING (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Loan Servicing Tables | |
Summary of Unpaid Principal Mortgage and Other Loans | December 31, 2016 2015 2014 (Dollars in thousands) $ 264,264 $ 251,492 $ 246,348 |
Loan Servicing Rights | December 31, 2016 2015 2014 (Dollars in thousands) Loan servicing rights, beginning of period $ 2,344 $ 2,187 $ 1,883 Capitalization from loans sold 604 544 385 Fair value adjustment (345 ) (387 ) (81 ) Loan servicing rights, end of period $ 2,603 $ 2,344 $ 2,187 |
GOODWILL AND OTHER INTANGIBLE48
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in the carrying amounts of goodwill | Year Ended December 31, 2016 2015 Dollars in thousands Balance at beginning of period $ 711 $ — Additions: Goodwill from acquisitions 1,354 711 Balance at end of period $ 2,065 $ 711 |
Schedule of gross carrying amounts and accumulated amortization of core deposit intangibles | Years Ended December 31, 2016 2015 Dollars in thousands Gross balance at beginning of period $ 590 $ — Additions from acquisitions 530 590 Gross balance at end of period 1,120 590 Less accumulated amortization (141 ) — Core deposit intangible, net $ 979 $ 590 |
DERIVATIVE FINANCIAL INSTRUME49
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair value of the Company's derivative financial instruments | Fair Value Balance Sheet Location December 31, 2016 December 31, 2015 Designated as hedges: Cash flow hedge of borrowings - interest rate swap Other assets $ 476 $ — Total $ 476 $ — Not designated as hedges: Mortgage banking - loan commitment Other assets $ 41 $ 30 Mortgage banking - forward sales commitment Other assets 19 15 Total $ 60 $ 45 |
Schedule of Structure of the Swap Agreements | Underlyings Designation Notional Payment Provision Life of Swap Contract Junior Subordinated Debt Cash Flow Hedge $ 14,000 Pay 0.958%/Receive 3 month LIBOR 4 yrs FHLB Variable Rate Advance Cash Flow Hedge $ 15,000 Pay 1.054%/Receive 3 month LIBOR 2 yrs FHLB Variable Rate Advance Cash Flow Hedge $ 20,500 Pay 1.354%/Receive 3 month LIBOR 2 yrs |
Schedule of Cash Flow Hedges Included in Statement of Income | Amount of Gain(Loss) Recognized in Other Comprehensive Income on Derivative (Effective Portion) Gain(Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) December 31, December 31, 2016 2015 Location 2016 2015 Interest rate swap $ 476 $ — Interest Expense $ 32 $ — |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Deposits Tables | |
Summary of Deposit Balances and Interest Expenses | As of and for the Year Ended December 31, 2016 2015 2014 (Dollars in thousands) Balance Interest Expense Balance Interest Expense Balance Interest Expense Noninterest-bearing demand $ 139,136 $ — $ 121,062 $ — $ 86,110 $ — Interest-bearing demand 122,271 160 103,198 136 92,877 149 Money market 239,387 770 180,377 558 178,320 983 Savings 40,014 49 35,838 33 27,591 36 Time deposits 289,205 2,985 276,142 3,607 318,219 4,193 $ 830,013 $ 3,964 $ 716,617 $ 4,334 $ 703,117 $ 5,361 |
Schedule Of Certificates Of Deposit, By Contractual Maturity | December 31, 2016 (Dollars in thousands) 2017 $ 151,236 2018 68,287 2019 31,093 2020 14,434 2021 11,789 Thereafter 12,366 $ 289,205 |
Schedule of activity related to the fair value premium on acquired time deposits | For the Year Ended December 31, (Dollars in thousands) 2016 2015 2014 Time deposit premium, beginning of period $ 30 $ — $ — Additional premium for acquisitions 648 30 — Accretion (258 ) — — Time deposit premium, end of period $ 420 $ 30 $ — |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Borrowings Tables | |
Schedule of Outstanding FHLB advances | December 31, 2016 Balance Type Rate Maturity (Dollars in thousands) $ 5,000 Fixed Rate 0.58 % 1/3/2017 5,000 Fixed Rate 0.44 % 1/3/2017 50,000 Fixed Rate 0.49 % 1/5/2017 30,000 Fixed Rate 0.64 % 1/15/2017 15,000 Fixed Rate 0.63 % 1/17/2017 25,000 Fixed Rate 0.64 % 1/23/2017 20,000 Fixed Rate 0.56 % 2/7/2017 5,000 Fixed Rate 0.58 % 3/28/2017 15,000 Adjustable Rate 0.56 % 3/29/2017 5,000 Fixed Rate 0.80 % 3/31/2017 5,000 Fixed Rate 0.60 % 4/3/2017 10,000 Fixed Rate 0.60 % 4/6/2017 1,000 Fixed Rate 0.87 % 5/11/2017 20,500 Adjustable Rate 0.73 % 5/23/2017 5,000 Fixed Rate 0.82 % 6/6/2017 2,000 Fixed Rate 1.02 % 6/12/2017 5,000 Fixed Rate 0.76 % 6/30/2017 25,000 Fixed Rate 0.77 % 8/7/2017 10,000 Fixed Rate 0.82 % 9/28/2017 10,000 Fixed Rate 0.77 % 12/29/2017 5,000 Fixed Rate 0.78 % 12/30/2017 5,000 Fixed Rate 1.26 % 6/5/2018 10,000 Fixed Rate 0.84 % 6/29/2018 5,000 Fixed Rate 1.40 % 7/1/2018 5,000 Fixed Rate 1.51 % 12/31/2018 $ 298,500 0.68 % December 31, 2015 Balance Type Rate Maturity (Dollars in thousands) $ 45,000 Fixed Rate 0.30 % 2/5/2016 5,000 Fixed Rate 0.39 % 3/28/2016 5,000 Fixed Rate 0.52 % 3/30/2016 10,000 Fixed Rate 0.47 % 3/31/2016 5,000 Fixed Rate 0.49 % 6/6/2016 5,000 Fixed Rate 0.69 % 6/30/2016 5,000 Fixed Rate 0.51 % 6/30/2016 5,000 Fixed Rate 0.74 % 7/1/2016 20,000 Daily Rate 0.49 % 7/21/2016 10,000 Fixed Rate 0.58 % 9/28/2016 5,000 Fixed Rate 0.79 % 12/5/2016 5,000 Fixed Rate 0.98 % 12/30/2016 5,000 Fixed Rate 0.74 % 12/30/2016 1,000 Fixed Rate 0.87 % 5/11/2017 2,000 Fixed Rate 1.02 % 6/12/2017 5,000 Fixed Rate 1.38 % 12/29/2017 2,000 Fixed Rate 1.25 % 5/11/2018 10,000 Fixed Rate 1.83 % 4/10/2019 2,500 Fixed Rate 1.77 % 6/11/2019 1,000 Fixed Rate 1.78 % 5/11/2020 $ 153,500 0.65 % |
Scheduled maturities of FHLB advances and respective weighted average rates | December 31, 2016 Year Balance Weighted Average Rate (Dollars in thousands) 2017 273,500 0.64 % 2018 25,000 1.17 % $ 298,500 0.68 % |
POST-EMPLOYMENT BENEFITS (Table
POST-EMPLOYMENT BENEFITS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Post-employment Benefits Tables | |
Schedule of liabilities for each plan | December 31, 2016 2015 (Dollars in thousands) SERP $ 4,417 $ 4,435 CAP Equity 4,718 4,890 Director Consultation 252 258 Life Insurance 824 641 $ 10,211 $ 10,224 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock option activity | Restricted Stock Options (Dollars in thousands, except per share data) Shares Weighted Options Weighted Weighted Aggregate December 31, 2014 — $ — — $ — Granted 157,100 18.55 366,000 18.55 Vested — — — Forfeited — — — December 31, 2015 157,100 18.55 366,000 18.55 Granted 26,300 17.49 57,400 17.52 Vested/Exercised (30,220 ) 18.55 — — Forfeited (7,600 ) 18.55 (16,200 ) 18.55 December 31, 2016 145,580 18.36 407,200 18.41 9.00 $ 890 Vested/Exercisable at December 31, 2016 — — 70,600 18.55 8.92 143 |
Schedule of fair value of options granted Black-Scholes model | Options Outstanding Options Exercisable Shares Range Wtd Ave Ave Shares Wtd Ave Ave 5,000 $ 16.00-17.00 $ 16.75 9.14 — $ — — 40,500 17.01-18.00 17.45 9.41 — — — 361,700 18.01-18.55 18.54 8.95 70,600 18.55 8.92 407,200 18.41 9.00 70,600 18.55 8.92 |
Schedule of Restricted stock unit activity | 2016 2015 Fair value per option $ 3.02 $ 3.37 Expected life (years) 6.5 years 6.5 years Expected stock price volatility 12 % 12 % Expected dividend yield 0.00 % 0.00 % Risk-free interest rate 1.57 % 1.85 % Expected forfeiture rate 0.00 % 0.00 % |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes Tables | |
Schedule of Components of Income Tax Expense (Benefit) | For the Year Ended December 31, 2016 2015 2014 (Dollars in thousands) Current Federal $ 549 $ (150 ) $ 112 State 24 — (25 ) Deferred Federal 2,370 2,252 2,348 State 552 109 504 Change in valuation allowance — (18,950 ) (731 ) Total income tax expense (benefit) $ 3,495 $ (16,739 ) $ 2,208 |
Schedule of Effective Income Tax Rate Reconciliation | For the Year Ended December 31, 2016 2015 2014 (Dollars in thousands) Computed income tax expense $ 3,455 $ 2,480 $ 2,853 Deferred tax valuation allowance — (18,950 ) (731 ) State income tax, net of federal benefit 218 165 271 Nontaxable municipal security income (544 ) (126 ) (115 ) Nontaxable BOLI income (107 ) (160 ) (182 ) Other 473 (148 ) 112 Actual income tax expense (benefit) $ 3,495 $ (16,739 ) $ 2,208 Effective tax rate 35.4 % -236.2 % 27.1 % |
Schedule of Deferred Tax Assets and Liabilities | As of December 31, 2016 2015 (Dollars in thousands) Deferred tax assets: Allowance for loan losses $ 3,245 $ 3,557 Deferred compensation and post employment benefits 3,365 3,498 Non-accrual interest 375 286 Valuation reserve for other real estate 693 516 North Carolina NOL carryover 557 988 Federal NOL carryover 8,560 10,750 Unrealized losses on securities 3,079 697 Loan basis differences 238 — Deposit premium 155 — Other 1,160 772 Total deferred tax assets 21,427 21,064 Deferred tax liabilities: Fixed assets 263 499 Loan servicing rights 962 881 Core deposit intangible 158 — Deferred loan costs 1,002 708 Prepaid expenses 57 146 Total deferred tax liabilities 2,442 2,234 Net deferred tax asset $ 18,985 $ 18,830 |
Schedule of Unused net operating losses and expiration dates | As of December 31, 2016 (Dollars in thousands) Amount Expiration Dates Federal $ 24,458 2027-2034 North Carolina $ 28,425 2024-2028 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share Tables | |
Schedule of reconciliation of average shares outstanding | For the Year Ended December 31, (Dollars in thousands, except per share amounts) 2016 2015 Numerator: Net income $ 6,376 $ 23,825 Denominator: Weighted-average common shares outstanding - basic 6,477,284 6,546,375 Effect of dilutive restricted stock units 12,647 — Weighted-average common shares outstanding - diluted 6,489,931 6,546,375 Earnings per share - basic $ 0.98 $ 3.64 Earnings per share - diluted $ 0.98 $ 3.64 |
ACCUMULATED OTHER COMPREHENSI56
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accumulated Other Comprehensive Income Loss Tables | |
Schedule of Accumulated other comprehensive income (loss) | (Dollars in thousands) Available for Held to Maturity Deferred Tax Cash Flow Total Balance, December 31, 2013 $ (3,374 ) $ (1,242 ) $ (2,860 ) $ — $ (7,476 ) Change in deferred tax valuation allowance attributable to net unrealized losses on investment securities — — 1,992 — 1,992 Change in unrealized holding gains/losses on securities available for sale 5,665 — — — 5,665 Reclassification adjustment for net securities gains included in net income (657 ) — — — (657 ) Transfer of net unrealized loss from available for sale to held to maturity 74 (74 ) — — — Amortization of unrealized losses on securities transferred to held to maturity — 199 — — 199 Income tax expense (benefit) (1,944 ) (48 ) — — (1,992 ) Balance, December 31, 2014 $ (236 ) $ (1,165 ) $ (868 ) $ — $ (2,269 ) Change in deferred tax valuation allowance attributable to net unrealized losses on investment securities — — 289 — 289 Change in unrealized holding gains/losses on securities available for sale (166 ) — — — (166 ) Reclassification adjustment for net securities gains included in net income (403 ) — — — (403 ) Amortization of unrealized losses on securities transferred to held to maturity — 984 — — 984 Income tax expense (benefit) 211 (382 ) — — (171 ) Balance, December 31, 2015 $ (594 ) $ (563 ) $ (579 ) $ — $ (1,736 ) Change in deferred tax valuation allowance attributable to net unrealized losses on investment securities — — 377 — 377 Change in unrealized holding gains/losses on securities available for sale (6,652 ) — — — (6,652 ) Reclassification adjustment for net securities gains included in net income (1,216 ) — — — (1,216 ) Amortization of unrealized losses on securities transferred to held to maturity — 578 — — 578 Reduction in unrealized losses related to held to maturity securities transferred to available-for-sale — 325 — — 325 Change in unrealized holding gains/losses on cash flow hedge — — — 476 476 Income tax expense (benefit) 2,908 (340 ) — (176 ) 2,392 Balance, December 31, 2016 $ (5,554 ) $ — $ (202 ) $ 300 $ (5,456 ) |
Schedule of Consolidated Statements of Operations affected by amounts reclassified from accumulated other comprehensive income (loss) | (Dollars in thousands) 2016 2015 2014 Line Item Affected Available-for-sale securities Gains recognized $ 1,216 $ 403 $ 657 Gain on sale of investments, net of loss Income tax effect (449 ) (152 ) (247 ) Income tax expense Reclassified out of AOCI, net of tax 767 251 410 Net income Held-to-maturity securities Amortization of unrealized losses (578 ) (984 ) (199 ) Interest income - taxable securities Increase related to transfer from AFS — — 74 Interest income - taxable securities Reduction related to transfer to AFS (325 ) — — Interest income - taxable securities Income tax effect 340 382 48 Income tax expense Reclassified out of AOCI, net of tax (563 ) (602 ) (77 ) Net income Cash flow hedge Interest expense - effective portion (16 ) — — Interest expense - FHLB advances Interest expense - effective portion (16 ) — — Interest expense - Junior subordinated notes Income tax effect 12 — — Income tax expense Reclassified out of AOCI, net of tax (20 ) — — Net income Deferred tax valuation allowance Recognition of reversal of valuation allowance 377 289 — Income tax expense Total reclassified out of AOCI, net of tax $ 561 $ (62 ) $ 333 Net income |
REGULATORY MATTERS (Tables)
REGULATORY MATTERS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Regulatory Matters Tables | |
Schedule of actual and required capital amounts and ratios | Following are the required and actual capital amounts and ratios for the Bank: Actual For Capital To Be Well- (Dollars in thousands) Amount Ratio Amount Ratio (1) Amount Ratio As of December 31, 2016: Tier 1 Leverage Capital $ 138,402 11.06 % $ 50,034 > 4.0% $ 62,542 > 5% Common Equity Tier 1 Capital $ 138,402 16.33 % $ 38,150 > 5.125% $ 55,106 > 6.5% Tier 1 Risk-based Capital $ 138,402 16.33 % $ 50,867 > $ 67,823 > 8% Total Risk-based Capital $ 147,807 17.43 % $ 67,823 > 8.625% $ 84,778 > 10% As of December 31, 2015: Tier 1 Leverage Capital $ 118,251 12.05 % $ 39,270 > 4% $ 49,087 > % Common Equity Tier 1 Capital $ 118,251 18.07 % $ 29,443 > 4.5% $ 42,529 > 5% Tier 1 Risk-based Capital $ 118,251 18.07 % $ 39,257 > % $ 52,343 > % Total Risk-based Capital $ 126,524 19.34 % $ 52,343 > 8% $ 65,429 > 10% (1) – As of December 31, 2016, includes capital conservation buffer of 0.625%. On a fully phased in basis, effective January 1, 2019, under Basel III, minimum capital ratios to be considered “adequately capitalized” including the capital conservation buffer of 2.5% will be as follows: Tier 1 Leverage Capital – 4.0%; Common Equity Tier 1 Capital – 7.0%; Tier 1 Risk-based Capital – 8.5%; and Total Risk-based Capital – 10.5%. Following are the required and actual capital amounts and ratios for the Company: Actual For Capital Adequacy (Dollars in thousands) Amount Ratio Amount Ratio (1) As of December 31, 2016: Tier I Leverage Capital $ 141,013 11.28 % $ 50,200 > 4.0% Common Equity Tier 1 Capital $ 130,079 15.33 % $ 38,188 > 5.125% Tier I Risk-based Capital $ 141,013 16.62 % $ 50,918 > Total Risk Based Capital $ 150,418 17.72 % $ 67,891 > 8.625% As of December 31, 2015: Tier I Leverage Capital $ 136,063 13.85 % $ 39,291 > 4% Common Equity Tier 1 Capital $ 128,007 19.55 % $ 29,468 > 4.5% Tier I Risk-based Capital $ 136,063 20.78 % $ 39,291 > % Total Risk Based Capital $ 144,343 22.04 % $ 52,388 > 8% (1) – As of December 31, 2016, includes capital conservation buffer of 0.625%. On a fully phased in basis, effective January 1, 2019, under Basel III, minimum capital ratios to be considered “adequately capitalized” including the capital conservation buffer of 2.5% will be as follows: Tier 1 Leverage Capital – 4.0%; Common Equity Tier 1 Capital – 7.0%; Tier 1 Risk-based Capital – 8.5%; and Total Risk-based Capital – 10.5%. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies Tables | |
Schedule of commitments to fund lines of credit | December 31, 2016 (Dollars in thousands) Lines of credit $ 111,263 Standby letters of credit 800 $ 112,063 |
Schedule of Outstanding commitments to originate mortgage loans | December 31, 2016 Amount Range of Rates (Dollar in thousands) Fixed $ 24,855 1.99% to 7.99% Variable 9,755 3.25% to 6.25% $ 34,610 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures Tables | |
Summary of assets and liabilities measured at fair value on a recurring basis | December 31, 2016 Level 1 Level 2 Level 3 Total (Dollars in thousands) Trading account assets $ 5,211 $ — $ — $ 5,211 Securities available for sale: U.S. government agencies — 12,107 — 12,107 Municipal securities — 146,771 — 146,771 Mortgage-backed securities — 217,937 — 217,937 U.S. Treasury securities 2,514 — — 2,514 Corporate bonds 16,214 2,144 18,358 Mutual funds 604 — — 604 8,329 393,029 2,144 403,502 Loan servicing rights — — 2,603 2,603 Derivative assets — 476 — 476 Forward sales commitments — — 19 19 Interest rate lock commitments — — 41 41 Total assets $ 8,329 $ 393,505 $ 4,807 $ 406,641 December 31, 2015 Level 1 Level 2 Level 3 Total (Dollars in thousands) Trading account assets $ 4,714 $ — $ — $ 4,714 Securities available for sale: U.S. government agencies — 25,720 — 25,720 Municipal securities — 39,858 — 39,858 Mortgage-backed securities — 171,174 — 171,174 U.S. Treasury securities 1,510 — — 1,510 Mutual funds 600 — — 600 6,824 236,752 — 243,576 Loan servicing rights — — 2,344 2,344 Forward sales commitments — — 16 16 Interest rate lock commitments — — 30 30 Total assets $ 6,824 $ 236,752 $ 2,390 $ 245,966 |
Schedule of changes in assets measured at fair value on a recurring basis | Year Ended December 31, 2016 2015 2014 (Dollars in thousands) Balance at beginning of year $ 2,390 $ 2,248 $ 1,888 Corporate bonds Transfers from HTM 2,144 — — Loan servicing right activity, included in servicing income, net Capitalization from loans sold 604 544 385 Fair value adjustment (345 ) (387 ) (81 ) Mortgage derivative gains (losses) included in other income 14 (15 ) 56 Balance at end of year $ 4,807 $ 2,390 $ 2,248 |
Summary of assets and liabilities measured at a fair value on a nonrecurring basis | December 31, 2016 Level 1 Level 2 Level 3 Total (Dollars in thousands) Collateral dependent impaired loans: One-to four family residential $ — $ — $ 2,205 $ 2,205 Commercial real estate — — 6,329 6,329 Home equity loans and lines of credit — — 213 213 Other construction and land — — 809 809 Real estate owned: One-to four family residential — — 1,336 1,336 Commercial real estate — — 722 722 Other construction and land — — 2,168 2,168 Total assets $ — $ — $ 13,782 $ 13,782 December 31, 2015 Level 1 Level 2 Level 3 Total (Dollars in thousands) Collateral dependent impaired loans: One-to four family residential $ — $ — $ 4,163 $ 4,163 Commercial real estate — — 7,226 7,226 Home equity loans and lines of credit — — 213 213 Other construction and land — — 658 658 Real estate owned: One-to four family residential — — 1,384 1,384 Commercial real estate — — 1,123 1,123 Other construction and land — — 2,862 2,862 Total assets $ — $ — $ 17,629 $ 17,629 |
Schedule of significant unobservable inputs used in the fair value measurements | Valuation Technique Unobservable Input General Range Impaired loans Discounted Appraisals Collateral discounts and estimated selling cost 0 – 30% Real estate owned Discounted Appraisals Collateral discounts and estimated selling cost 0 – 30% Corporate bonds Discounted Cash Flows Recent trade pricing 0-8% Loan servicing rights Discounted Cash Flows Prepayment speed 5 – 35% Discount rate 12-14% |
Schedule of carrying amount and estimated fair value of the Company's financial instruments | Carrying Fair Value Measurements at December 31, 2016 (Dollars in thousands) Amount Total Level 1 Level 2 Level 3 Assets: Cash and equivalents $ 43,294 $ 43,294 $ 43,294 $ — $ — Trading securities 5,211 5,211 5,211 — — Securities available for sale 398,291 398,291 3,118 393,029 2,144 Loans held for sale 4,584 5,093 — 5,093 — Loans receivable, net 744,361 741,612 — — 741,612 Other investments, at cost 15,261 15,261 — 15,261 — Interest receivable 5,012 5,012 — 5,012 — Bank owned life insurance 31,347 31,347 — 31,347 — Loan servicing rights 2,603 2,603 — — 2,603 Forward sales commitments 19 19 — — 19 Interest rate lock commitments 41 41 — — 41 Derivative asset 476 476 — 476 — SBIC investments 1,666 1,666 — — 1,666 Liabilities: Demand deposits $ 540,808 540,808 $ — $ 540,808 $ — Time deposits 289,205 286,611 — — 286,611 Federal Home Loan Bank advances 298,500 298,667 — 298,667 — Junior subordinated debentures 14,433 14,433 — 14,433 — Other borrowings 2,725 2,907 — 2,907 — Accrued interest payable 254 254 — 254 — Carrying Fair Value Measurements at December 31, 2015 (Dollars in thousands) Amount Total Level 1 Level 2 Level 3 Assets: Cash and equivalents $ 40,650 $ 40,650 $ 40,650 $ — $ — Trading securities 4,714 4,714 4,714 — — Securities available for sale 238,862 238,862 2,110 236,752 — Securities held to maturity 41,164 41,812 995 40,817 — Loans held for sale 8,348 8,952 — 8,952 — Loans receivable, net 624,072 620,516 — — 620,516 Other investments, at cost 8,834 8,834 — 8,834 — Interest receivable 3,554 3,554 — 3,554 — Bank owned life insurance 20,858 20,858 — 20,858 — Loan servicing rights 2,344 2,344 — — 2,344 Forward sales commitments 16 16 — — 16 Interest rate lock commitments 30 30 — — 30 SBIC investments 1,025 1,025 1,025 Liabilities: Demand deposits $ 440,475 440,475 $ — $ 440,475 $ — Time deposits 276,142 275,403 — — 275,403 Federal Home Loan Bank advances 153,500 153,441 — 153,441 — Junior subordinated debentures 14,433 14,433 — 14,433 — Other borrowings 2,198 2,198 — — 2,198 Accrued interest payable 213 213 — 213 — |
SHARE REPURCHASES (Tables)
SHARE REPURCHASES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Banking and Thrift [Abstract] | |
Schedule of Share Repurchase Activity | Period Total Number of Average Price Total Number of Shares Maximum Number of January 1, 2016 to January 31, 2016 — $ — — — February 1, 2016 to February 29, 2016 40,621 $ 17.04 40,621 286,697 March 1, 2016 to March 31, 2016 33,382 $ 17.70 33,382 253,315 April 1, 2016 to April 30, 2016 5,997 $ 17.65 5,997 247,318 May 1, 2016 to September 30, 2016 — $ — — 247,318 October 1, 2016 to October 31, 2016 24,568 $ 18.10 24,568 222,750 November 1, 2016 to November 31, 2016 — $ — — 222,750 December 1, 2016 to December 31, 2016 — $ — — 222,750 Total year-to-date 2016 104,568 $ 17.55 104,568 222,750 |
PARENT COMPANY FINANCIAL INFO61
PARENT COMPANY FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Parent Company Financial Information Tables | |
Schedule of Condensed Balance Sheet | Condensed Balance Sheets December 31, 2016 2015 (Dollars in thousands) Assets Cash $ 3,137 $ 17,545 Equity investment in subsidiary 144,011 128,090 Equity investment in trust 433 433 Other assets 508 188 Total assets $ 148,089 $ 146,256 Liabilities and Shareholders’ Equity Junior subordinated debentures $ 14,433 $ 14,433 Other liabilities 588 354 Shareholders’ equity 133,068 131,469 Total liabilities and shareholders’ equity $ 148,089 $ 146,256 |
Schedule of Condensed Income Statement | Condensed Statements of Operations Year Ended December 31, 2016 2015 2014 (Dollars in thousands) Income Interest income $ 81 $ 190 $ 78 Dividends from subsidiary 510 114 — 591 304 78 Expenses Interest 532 458 509 Other 358 259 29 890 717 538 Loss before income taxes and equity in undistributed income of subsidiary (299 ) (413 ) (460 ) Income tax benefit allocated from consolidated income tax return 283 180 180 Loss before equity in undistributed income of subsidiary (16 ) (233 ) (280 ) Equity in undistributed income of 6,392 24,058 6,223 Net income $ 6,376 $ 23,825 $ 5,943 |
Schedule of Condensed Cash Flow Statement | Condensed Statements of Cash Flows Year Ended December 31, 2016 2015 2014 (Dollars in thousands) Operating activities: Net income $ 6,376 $ 23,825 $ 5,943 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity in undistributed earnings of subsdiary (6,392 ) (24,058 ) (6,223 ) (Increase) decrease in other assets 55 (19 ) (46 ) Increase (decrease) in other liablilities 97 75 (1,567 ) Net cash provided by (used in) operating activities $ 136 $ (177 ) $ (1,893 ) Investing activities: Investment in subsidiary $ (13,486 ) $ — $ (44,581 ) Net cash used in investing activities $ (13,486 ) $ — $ (44,581 ) Financing activities: Proceeds from sale of common stock $ — $ — $ 63,651 Purchase of stock (1,922 ) — — Reimbursement from bank subsidiary for share-based compensation 864 70 — Net cash provided by (used in) financing activities $ (1,058 ) $ 70 $ 63,651 (Decrease)/increase in cash and cash equivalents (14,408 ) (107 ) 17,177 Cash and cash equivalents, beginning of year 17,545 17,652 475 Cash and cash equivalents, end of year $ 3,137 $ 17,545 $ 17,652 |
ORGANIZATION (Details Narrative
ORGANIZATION (Details Narrative) | Dec. 31, 2016 |
Organization Details Narrative | |
Ownership percentage in Macon Capital Trust I | 100.00% |
SUMMARY OF SIGNIFICANT ACCOUN63
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Advertising Expense | $ 1,100 | $ 500 | $ 300 |
Debt issuance costs of the Junior Subordinated Notes | $ 100 | $ 100 | $ 100 |
Minimum [Member] | |||
Estimated useful lives of the assets | 4 years | ||
Maximum [Member] | |||
Estimated useful lives of the assets | 30 years |
STOCK CONVERSION AND CHANGE I64
STOCK CONVERSION AND CHANGE IN CORPORATE FORM (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock Conversion And Change In Corporate Form Details | |||
Common stock, shares, issued | 6,467,550 | 6,546,375 | |
Common stock price per share | $ 10 | ||
Proceeds from issuance of common stock, gross | $ 65,464 | ||
Stock issuance costs | (1,813) | $ (1,813) | |
Proceeds from issuance of common stock, net | 63,651 | $ 63,651 | |
Amount contributed to the capital of the bank from stock conversion | 44,581 | ||
Amount Retained by the Company from stock conversion | $ 19,070 | ||
Amount contributed to the capital of the bank from stock conversion, percentage | 70.00% |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Apr. 02, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Liabilities | |||||
Goodwill | $ 2,065 | $ 711 | |||
As recorded by Old Town Bank [Member] | |||||
Assets | |||||
Cash and cash equivalents | $ 7,573 | ||||
Investments | 30,882 | ||||
Loans | 64,573 | ||||
Fixed assets | 3,414 | ||||
Interest receivable | 552 | ||||
Core deposit intangible | |||||
Other real estate owned | 880 | ||||
Deferred tax asset | 259 | ||||
Other assets | 938 | ||||
Total assets acquired | 109,071 | ||||
Liabilities | |||||
Deposits | 88,059 | ||||
FHLB advances | 9,000 | ||||
Accrued interest payable | 30 | ||||
Other liabilities | 125 | ||||
Total liabilities assumed | 97,214 | ||||
Excess of assets acquired over liabilities assumed | 11,857 | ||||
Fair Value Adjustments [Member] | |||||
Assets | |||||
Cash and cash equivalents | |||||
Investments | 246 | ||||
Loans | 272 | ||||
Fixed assets | (22) | ||||
Interest receivable | |||||
Core deposit intangible | 590 | [1] | 530 | ||
Other real estate owned | 43 | ||||
Deferred tax asset | 207 | ||||
Other assets | (337) | ||||
Total assets acquired | 939 | ||||
Liabilities | |||||
Deposits | 648 | ||||
FHLB advances | 25 | ||||
Accrued interest payable | |||||
Other liabilities | (9) | ||||
Total liabilities assumed | 31 | 664 | |||
Excess of assets acquired over liabilities assumed | $ 487 | 275 | |||
As recorded by the Company [Member] | |||||
Assets | |||||
Cash and cash equivalents | 7,573 | ||||
Investments | 31,128 | ||||
Loans | 64,845 | ||||
Fixed assets | 3,392 | ||||
Interest receivable | 552 | ||||
Core deposit intangible | 530 | ||||
Other real estate owned | 923 | ||||
Deferred tax asset | 466 | ||||
Other assets | 601 | ||||
Total assets acquired | 110,010 | ||||
Liabilities | |||||
Deposits | 88,707 | ||||
FHLB advances | 9,025 | ||||
Accrued interest payable | 30 | ||||
Other liabilities | 116 | ||||
Total liabilities assumed | 97,878 | ||||
Excess of assets acquired over liabilities assumed | 12,132 | ||||
Purchase price | 13,486 | ||||
Goodwill | $ 1,354 | ||||
[1] | Adjustment reflects the recording of the core deposit intangible on the acquired core deposit accounts. This amount was recorded by the Company as an identifiable intangible asset and will be amortized as an expense on a straight-line basis over the average life of the core deposit base, which is estimated to be 7 years. |
ACQUISITIONS (Details 2)
ACQUISITIONS (Details 2) - USD ($) $ in Thousands | Dec. 31, 2016 | Apr. 02, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Deposits: | ||||||
Goodwill | $ 2,065 | $ 711 | ||||
As Recorded by ASB | ||||||
Assets | ||||||
Cash and cash equivalents | 33,076 | |||||
Loans | 4,717 | |||||
Premises and equipment | 2,080 | |||||
Core deposit intangible | ||||||
Other assets | 16 | |||||
Total assets | 39,889 | |||||
Deposits: | ||||||
Noninterest-bearing demand | 22,084 | |||||
Interest-bearing demand | 15 | |||||
Money market | 2,556 | |||||
Savings | 7,242 | |||||
Time deposits | 7,967 | |||||
Total deposits | 39,864 | |||||
Other liabilities | 25 | |||||
Total liabilities | 39,889 | |||||
Net identifiable assets acquired over liabilities assumed | ||||||
Fair Value Adjustments | ||||||
Assets | ||||||
Cash and cash equivalents | ||||||
Loans | [1] | (72) | ||||
Premises and equipment | ||||||
Core deposit intangible | 590 | [2] | 530 | |||
Other assets | (337) | |||||
Total assets | 518 | |||||
Deposits: | ||||||
Noninterest-bearing demand | ||||||
Interest-bearing demand | ||||||
Money market | ||||||
Savings | ||||||
Time deposits | [3] | 31 | ||||
Total deposits | 31 | |||||
Other liabilities | (9) | |||||
Total liabilities | 31 | 664 | ||||
Net identifiable assets acquired over liabilities assumed | 487 | $ 275 | ||||
As Recorded by the Company | ||||||
Assets | ||||||
Cash and cash equivalents | 33,076 | |||||
Loans | 4,645 | |||||
Premises and equipment | 2,080 | |||||
Core deposit intangible | 590 | |||||
Other assets | 16 | |||||
Total assets | 40,407 | |||||
Deposits: | ||||||
Noninterest-bearing demand | 22,084 | |||||
Interest-bearing demand | 15 | |||||
Money market | 2,556 | |||||
Savings | 7,242 | |||||
Time deposits | 7,998 | |||||
Total deposits | 39,895 | |||||
Other liabilities | 25 | |||||
Total liabilities | 39,920 | |||||
Net identifiable assets acquired over liabilities assumed | 487 | |||||
Purchase price | 1,198 | |||||
Goodwill | $ 711 | |||||
[1] | Adjustment reflects the fair value adjustments based on the Company's evaluation of the acquired loan portfolio. | |||||
[2] | Adjustment reflects the recording of the core deposit intangible on the acquired core deposit accounts. This amount was recorded by the Company as an identifiable intangible asset and will be amortized as an expense on a straight-line basis over the average life of the core deposit base, which is estimated to be 7 years. | |||||
[3] | Adjustment reflects the fair value adjustment of time deposits. |
INVESTMENT SECURITIES (Details)
INVESTMENT SECURITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Trading Securities Cash | $ 5,211 | $ 4,714 |
Amortized Cost | 407,101 | 239,813 |
Gross Unrealized Gains | 690 | 720 |
Gross Unrealized Losses | (9,500) | (1,671) |
Estimated fair value | 398,291 | 238,862 |
U.S. Government Agencies [Member] | ||
Amortized Cost | 12,076 | 25,633 |
Gross Unrealized Gains | 31 | 123 |
Gross Unrealized Losses | (36) | |
Estimated fair value | 12,107 | 25,720 |
Municipal Securities [Member] | ||
Amortized Cost | 152,208 | 39,751 |
Gross Unrealized Gains | 337 | 311 |
Gross Unrealized Losses | (5,774) | (204) |
Estimated fair value | 146,771 | 39,858 |
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | ||
Amortized Cost | 128,820 | 112,857 |
Gross Unrealized Gains | 107 | 178 |
Gross Unrealized Losses | (2,161) | (1,025) |
Estimated fair value | 126,766 | 112,010 |
Mortgage-backed Securities, SBA securities [Member] | ||
Amortized Cost | 30,002 | 47,768 |
Gross Unrealized Gains | 13 | 86 |
Gross Unrealized Losses | (303) | (272) |
Estimated fair value | 29,712 | 47,582 |
Mortgage-backed Securities, Collateralized mortgage obligations [Member] | ||
Amortized Cost | 62,524 | 11,702 |
Gross Unrealized Gains | 16 | 12 |
Gross Unrealized Losses | (1,081) | (132) |
Estimated fair value | 61,459 | 11,582 |
U.S. Treasury securities [Member] | ||
Amortized Cost | 2,501 | 1,500 |
Gross Unrealized Gains | 15 | 10 |
Gross Unrealized Losses | (2) | |
Estimated fair value | 2,514 | 1,510 |
Corporate debt securities [Member] | ||
Amortized Cost | 18,354 | |
Gross Unrealized Gains | 171 | |
Gross Unrealized Losses | (167) | |
Estimated fair value | 18,358 | |
Mutual Funds [Member] | ||
Amortized Cost | 616 | 602 |
Gross Unrealized Gains | ||
Gross Unrealized Losses | (12) | (2) |
Estimated fair value | $ 604 | $ 600 |
INVESTMENT SECURITIES (Details
INVESTMENT SECURITIES (Details 2) $ in Thousands | Dec. 31, 2015USD ($) |
Amortized Cost | $ 41,164 |
Gross Unrealized Gains | 873 |
Gross Unrealized Losses | (225) |
Estimated Fair Value | 41,812 |
U.S. Government Agencies [Member] | |
Amortized Cost | 15,877 |
Gross Unrealized Gains | 645 |
Gross Unrealized Losses | (23) |
Estimated Fair Value | 16,499 |
Municipal Securities [Member] | |
Amortized Cost | 12,428 |
Gross Unrealized Gains | 199 |
Gross Unrealized Losses | (93) |
Estimated Fair Value | 12,534 |
Mortgage-backed Securities, Collateralized mortgage obligations [Member] | |
Amortized Cost | 4,834 |
Gross Unrealized Gains | 4 |
Gross Unrealized Losses | (62) |
Estimated Fair Value | 4,776 |
U.S. Treasury securities [Member] | |
Amortized Cost | 1,002 |
Gross Unrealized Gains | |
Gross Unrealized Losses | (7) |
Estimated Fair Value | 995 |
Corporate debt securities [Member] | |
Amortized Cost | 7,023 |
Gross Unrealized Gains | 25 |
Gross Unrealized Losses | (40) |
Estimated Fair Value | $ 7,008 |
INVESTMENT SECURITIES (Detail69
INVESTMENT SECURITIES (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Investment Securities Details 3 | |||
Beginning unrealized loss related to HTM securities previously recognized in OCI | $ 903 | $ 1,887 | $ 2,012 |
Additions for transfers to HTM | 74 | ||
Amortization of unrealized losses on HTM securities previously recognized in OCI | (578) | (984) | (199) |
Reduction from transfers to AFS | (325) | ||
Ending unrealized loss in OCI related to HTM securities previously recognized in OCI | $ 903 | $ 1,887 |
INVESTMENT SECURITIES (Detail70
INVESTMENT SECURITIES (Details 4) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Held to maturity, Less Than 12 Months Fair Value | $ 18,669 | |
Held to maturity, Less Than 12 Months Unrealized Losses | 225 | |
Held to maturity, Over 12 Months Fair Value | ||
Held to maturity, Over 12 Months Unrealized Losses | ||
Held to maturity, Fair Value | 18,669 | |
Held to maturity, Unrealized Losses | 225 | |
Available for sale, Less Than 12 Months Fair Value | 300,919 | 135,105 |
Available for sale, Less Than 12 Months Unrealized Losses | 9,188 | 1,140 |
Available for sale, Over 12 Months Fair Value | 17,925 | 21,852 |
Available for sale, Over 12 Months Unrealized Losses | 312 | 531 |
Available for sale, Fair Value | 318,844 | 156,957 |
Available for sale, Unrealized Losses | 9,500 | 1,671 |
Municipal Securities [Member] | ||
Held to maturity, Less Than 12 Months Fair Value | 4,365 | |
Held to maturity, Less Than 12 Months Unrealized Losses | 93 | |
Held to maturity, Over 12 Months Fair Value | ||
Held to maturity, Over 12 Months Unrealized Losses | ||
Held to maturity, Fair Value | 4,365 | |
Held to maturity, Unrealized Losses | 93 | |
Available for sale, Less Than 12 Months Fair Value | 122,468 | 18,769 |
Available for sale, Less Than 12 Months Unrealized Losses | 5,759 | 176 |
Available for sale, Over 12 Months Fair Value | 331 | 947 |
Available for sale, Over 12 Months Unrealized Losses | 15 | 28 |
Available for sale, Fair Value | 122,799 | 19,716 |
Available for sale, Unrealized Losses | 5,774 | 204 |
U.S. Government Agencies [Member] | ||
Held to maturity, Less Than 12 Months Fair Value | 5,705 | |
Held to maturity, Less Than 12 Months Unrealized Losses | 23 | |
Held to maturity, Over 12 Months Fair Value | ||
Held to maturity, Over 12 Months Unrealized Losses | ||
Held to maturity, Fair Value | 5,705 | |
Held to maturity, Unrealized Losses | 23 | |
Available for sale, Less Than 12 Months Fair Value | 101,382 | 13,317 |
Available for sale, Less Than 12 Months Unrealized Losses | 2,068 | 36 |
Available for sale, Over 12 Months Fair Value | 5,102 | |
Available for sale, Over 12 Months Unrealized Losses | 93 | |
Available for sale, Fair Value | 106,484 | 13,317 |
Available for sale, Unrealized Losses | 2,161 | 36 |
Mortgage-backed Securities, SBA securities [Member] | ||
Available for sale, Less Than 12 Months Fair Value | 15,199 | 23,012 |
Available for sale, Less Than 12 Months Unrealized Losses | 145 | 190 |
Available for sale, Over 12 Months Fair Value | 11,434 | 5,730 |
Available for sale, Over 12 Months Unrealized Losses | 158 | 82 |
Available for sale, Fair Value | 26,633 | 28,742 |
Available for sale, Unrealized Losses | 303 | 272 |
Mortgage-backed Securities, Collateralized mortgage obligations [Member] | ||
Held to maturity, Less Than 12 Months Fair Value | 2,693 | |
Held to maturity, Less Than 12 Months Unrealized Losses | 62 | |
Held to maturity, Fair Value | 2,693 | |
Held to maturity, Unrealized Losses | 62 | |
Available for sale, Less Than 12 Months Fair Value | 53,513 | 5,931 |
Available for sale, Less Than 12 Months Unrealized Losses | 1,035 | 74 |
Available for sale, Over 12 Months Fair Value | 1,058 | 1,283 |
Available for sale, Over 12 Months Unrealized Losses | 46 | 58 |
Available for sale, Fair Value | 54,571 | 7,214 |
Available for sale, Unrealized Losses | 1,081 | 132 |
U.S. Treasury securities [Member] | ||
Held to maturity, Less Than 12 Months Fair Value | 995 | |
Held to maturity, Less Than 12 Months Unrealized Losses | 7 | |
Held to maturity, Over 12 Months Fair Value | ||
Held to maturity, Over 12 Months Unrealized Losses | ||
Held to maturity, Fair Value | 995 | |
Held to maturity, Unrealized Losses | 7 | |
Available for sale, Less Than 12 Months Fair Value | 1,000 | |
Available for sale, Less Than 12 Months Unrealized Losses | 2 | |
Available for sale, Over 12 Months Fair Value | ||
Available for sale, Over 12 Months Unrealized Losses | ||
Available for sale, Fair Value | 1,000 | |
Available for sale, Unrealized Losses | 2 | |
Corporate debt securities [Member] | ||
Held to maturity, Less Than 12 Months Fair Value | 4,911 | |
Held to maturity, Less Than 12 Months Unrealized Losses | 40 | |
Held to maturity, Over 12 Months Fair Value | ||
Held to maturity, Over 12 Months Unrealized Losses | ||
Held to maturity, Fair Value | 4,911 | |
Held to maturity, Unrealized Losses | 40 | |
Available for sale, Less Than 12 Months Fair Value | 6,741 | |
Available for sale, Less Than 12 Months Unrealized Losses | 167 | |
Available for sale, Over 12 Months Fair Value | ||
Available for sale, Over 12 Months Unrealized Losses | ||
Available for sale, Fair Value | 6,741 | |
Available for sale, Unrealized Losses | 167 | |
Mutual Funds [Member] | ||
Available for sale, Less Than 12 Months Fair Value | 616 | 600 |
Available for sale, Less Than 12 Months Unrealized Losses | 12 | 2 |
Available for sale, Over 12 Months Fair Value | ||
Available for sale, Over 12 Months Unrealized Losses | ||
Available for sale, Fair Value | 616 | 600 |
Available for sale, Unrealized Losses | $ 12 | 2 |
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | ||
Available for sale, Less Than 12 Months Fair Value | 73,476 | |
Available for sale, Less Than 12 Months Unrealized Losses | 662 | |
Available for sale, Over 12 Months Fair Value | 13,892 | |
Available for sale, Over 12 Months Unrealized Losses | 363 | |
Available for sale, Fair Value | 87,368 | |
Available for sale, Unrealized Losses | $ 1,025 |
INVESTMENT SECURITIES (Detail71
INVESTMENT SECURITIES (Details 5) - Securities | Dec. 31, 2016 | Dec. 31, 2015 |
Number of securities less than 12 months | 240 | 146 |
Number of securities more than 12 months | 15 | 17 |
Number of securities | 255 | 163 |
Municipal Securities [Member] | ||
Number of securities less than 12 months | 129 | 51 |
Number of securities more than 12 months | 1 | 2 |
Number of securities | 130 | 53 |
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | ||
Number of securities less than 12 months | 66 | 52 |
Number of securities more than 12 months | 5 | 9 |
Number of securities | 71 | 61 |
Mortgage-backed Securities, SBA securities [Member] | ||
Number of securities less than 12 months | 11 | 14 |
Number of securities more than 12 months | 8 | 5 |
Number of securities | 19 | 19 |
Mortgage-backed Securities, Collateralized mortgage obligations [Member] | ||
Number of securities less than 12 months | 25 | 5 |
Number of securities more than 12 months | 1 | 1 |
Number of securities | 26 | 6 |
U.S. Treasury securities [Member] | ||
Number of securities less than 12 months | 1 | 1 |
Number of securities more than 12 months | ||
Number of securities | 1 | 1 |
Corporate debt securities [Member] | ||
Number of securities less than 12 months | 8 | 9 |
Number of securities more than 12 months | ||
Number of securities | 8 | 9 |
U.S. Government Agencies [Member] | ||
Number of securities less than 12 months | 13 | |
Number of securities more than 12 months | ||
Number of securities | 13 | |
Mutual Funds [Member] | ||
Number of securities less than 12 months | 1 | |
Number of securities more than 12 months | ||
Number of securities | 1 |
INVESTMENT SECURITIES (Detail72
INVESTMENT SECURITIES (Details 6) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Investment Securities Details 6 | |||
Gross proceeds | $ 124,823 | $ 39,022 | $ 19,170 |
Gross realized gains | 1,261 | 423 | 680 |
Gross realized losses | 45 | 20 | |
Securities pledged against deposits | $ 237,100 | $ 69,600 |
INVESTMENT SECURITIES (Detail73
INVESTMENT SECURITIES (Details 7) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Investment Securities Details 6 | ||
Available for sale, Less than 1 year, Amortized Cost | $ 6,373 | |
Available for sale, Over 1 year through 5 years, Amortized Cost | 17,845 | |
Available for sale, After 5 years through 10 years, Amortized Cost | 30,784 | |
Available for sale, Over 10 years, Amortized Cost | 130,753 | |
Available for sale, Before Amortized Cost Available for sale, Mortgage-backed securities, Amortized Cost | 185,755 | |
Available for sale, Mortgage-backed securities, Amortized Cost | 221,346 | |
Available for sale, Total, Amortized Cost | 407,101 | |
Available for Sale, Less than 1 year, Fair Value | 6,369 | |
Available for Sale, Over 1 year through 5 years, Fair Value | 17,846 | |
Available for Sale, After 5 years through 10 years, Fair Value | 30,638 | |
Available for Sale, Over 10 years, Fair Value | 125,501 | |
Available for sale, Before Amortized Cost Available for sale, Mortgage-backed securities, Fair Value | 180,354 | |
Available for Sale, Mortgage-backed securities, Fair Value | 217,937 | |
Available for Sale, Total, Fair Value | $ 398,291 | |
Held to Maturity, Total, Amortized Cost | $ 41,164 | |
Held to Maturity, Total, Fair Value | $ 41,812 |
LOANS RECEIVABLE (Details)
LOANS RECEIVABLE (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans receivable, gross | $ 746,686 | $ 626,341 | |
Less: Net deferred loan fees | (923) | (1,388) | |
Fair value discount | (857) | (72) | |
Unamortized premium | 605 | 557 | |
Unamortized discount | (1,150) | (1,366) | |
Loans receivable, net | 744,361 | 624,072 | |
One To Four Family Residential [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans receivable, gross | 278,437 | 248,633 | |
Commercial Real Estate Portfolio Segment [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans receivable, gross | 292,879 | 214,413 | |
Home Equity Line of Credit [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans receivable, gross | 50,334 | 53,446 | |
Residential Construction [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans receivable, gross | 18,531 | 7,848 | |
Other Portfolio Segment [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans receivable, gross | 60,605 | 57,316 | |
Real Estate Loans [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans receivable, gross | 700,786 | 581,656 | |
Commercial Portfolio Segment [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans receivable, gross | 41,306 | 41,046 | |
Consumer Portfolio Segment [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans receivable, gross | 4,594 | 3,639 | |
Commercial and Consumer Loan [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans receivable, gross | $ 45,900 | $ 44,685 |
LOANS RECEIVABLE (Detail Narrat
LOANS RECEIVABLE (Detail Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Restructuring of loan | $ 12,664 | $ 14,601 |
Interest income recognized for repayments and restructurings | 300 | 300 |
Federal Reserve Bank Advances [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans pledged as collateral to secure funding amount | 89,100 | 88,400 |
Federal Home Loan Bank of Atlanta [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans pledged as collateral to secure funding amount | $ 144,300 | $ 119,500 |
LOANS RECEIVABLE (Details 2)
LOANS RECEIVABLE (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Discount on purchased loans, beginning of period | $ 1,388 | ||
Interest income recognized for repayments and restructurings | (300) | $ (300) | |
Discount on purchased loans, end of period | 923 | 1,388 | |
Fair value discount, beginning of year | (72) | ||
Additional discount for acquisitions | 960 | (72) | |
Accretion | (175) | ||
Discount on purchased loans, end of period | (857) | (72) | |
Federal Deposit Insurance Corporation [Member] | |||
Discount on purchased loans, beginning of period | 1,366 | 1,487 | |
Additional discount for new purchases | 485 | 2,607 | |
Accretion | (216) | (311) | (365) |
Discount applied to charge-offs | (295) | ||
Interest income recognized for repayments and restructurings | (755) | ||
Discount on purchased loans, end of period | $ 1,150 | $ 1,366 | $ 1,487 |
LOANS RECEIVABLE (Details 3)
LOANS RECEIVABLE (Details 3) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Loans Receivable Details 3 | ||
Balance at beginning of year | $ 8,930 | $ 9,307 |
New loans | 51 | 30 |
Repayments | (759) | (407) |
Balance at end of year | $ 8,222 | $ 8,930 |
ALLOWANCE FOR LOAN LOSSES (Deta
ALLOWANCE FOR LOAN LOSSES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning balance | $ 9,461 | $ 11,072 | $ 14,251 |
Provision | 274 | (1,500) | 33 |
Charge-offs | (1,546) | (1,322) | (4,554) |
Recoveries | 1,116 | 1,211 | 1,342 |
Balance, end of period | 9,305 | 9,461 | 11,072 |
One To Four Family Residential [Member] | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning balance | 2,455 | 2,983 | 3,693 |
Provision | 413 | (251) | (201) |
Charge-offs | (133) | (536) | (702) |
Recoveries | 77 | 259 | 193 |
Balance, end of period | 2,812 | 2,455 | 2,983 |
Commercial Real Estate Portfolio Segment [Member] | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning balance | 3,221 | 2,717 | 4,360 |
Provision | 1,016 | 388 | 408 |
Charge-offs | (431) | (52) | (2,415) |
Recoveries | 173 | 168 | 364 |
Balance, end of period | 3,979 | 3,221 | 2,717 |
Home Equity Line of Credit [Member] | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning balance | 1,097 | 1,333 | 1,580 |
Provision | (486) | 200 | 310 |
Charge-offs | (158) | (540) | (598) |
Recoveries | 224 | 104 | 41 |
Balance, end of period | 677 | 1,097 | 1,333 |
Residential Construction [Member] | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning balance | 278 | 510 | 501 |
Provision | (125) | (235) | 9 |
Charge-offs | |||
Recoveries | 32 | 3 | |
Balance, end of period | 185 | 278 | 510 |
Other Portfolio Segment [Member] | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning balance | 1,400 | 2,936 | 3,516 |
Provision | (122) | (1,741) | (232) |
Charge-offs | (560) | (137) | (566) |
Recoveries | 130 | 342 | 218 |
Balance, end of period | 848 | 1,400 | 2,936 |
Commercial Portfolio Segment [Member] | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning balance | 603 | 308 | 336 |
Provision | (85) | 272 | (58) |
Charge-offs | (63) | (9) | (133) |
Recoveries | 144 | 32 | 163 |
Balance, end of period | 599 | 603 | 308 |
Consumer Portfolio Segment [Member] | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning balance | 407 | 285 | 265 |
Provision | (337) | (133) | (203) |
Charge-offs | (201) | (48) | (140) |
Recoveries | 336 | 303 | 363 |
Balance, end of period | $ 205 | $ 407 | $ 285 |
ALLOWANCE FOR LOAN LOSSES (De79
ALLOWANCE FOR LOAN LOSSES (Details 2) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Allowance for loan losses | ||||
Individually evaluated for impairment | $ 584 | $ 510 | ||
Collectively evaluated for impairment | 8,721 | 8,951 | ||
Balance, end of period | 9,305 | 9,461 | $ 11,072 | $ 14,251 |
Loans Receivable | ||||
Individually evaluated for impairment | 14,306 | 17,468 | ||
Collectively evaluated for impairment | 732,380 | 608,873 | ||
Total Loans Receivable | 746,686 | 626,341 | ||
One To Four Family Residential [Member] | ||||
Allowance for loan losses | ||||
Individually evaluated for impairment | 201 | 344 | ||
Collectively evaluated for impairment | 2,611 | 2,111 | ||
Balance, end of period | 2,812 | 2,455 | 2,983 | 3,693 |
Loans Receivable | ||||
Individually evaluated for impairment | 3,814 | 6,315 | ||
Collectively evaluated for impairment | 274,623 | 242,318 | ||
Total Loans Receivable | 278,437 | 248,633 | ||
Commercial Real Estate Portfolio Segment [Member] | ||||
Allowance for loan losses | ||||
Individually evaluated for impairment | 178 | 61 | ||
Collectively evaluated for impairment | 3,801 | 3,160 | ||
Balance, end of period | 3,979 | 3,221 | 2,717 | 4,360 |
Loans Receivable | ||||
Individually evaluated for impairment | 8,153 | 9,013 | ||
Collectively evaluated for impairment | 284,726 | 205,400 | ||
Total Loans Receivable | 292,879 | 214,413 | ||
Home Equity Line of Credit [Member] | ||||
Allowance for loan losses | ||||
Individually evaluated for impairment | 2 | 6 | ||
Collectively evaluated for impairment | 675 | 1,091 | ||
Balance, end of period | 677 | 1,097 | 1,333 | 1,580 |
Loans Receivable | ||||
Individually evaluated for impairment | 313 | 313 | ||
Collectively evaluated for impairment | 50,021 | 53,133 | ||
Total Loans Receivable | 50,334 | 53,446 | ||
Residential Construction [Member] | ||||
Allowance for loan losses | ||||
Individually evaluated for impairment | ||||
Collectively evaluated for impairment | 185 | 278 | ||
Balance, end of period | 185 | 278 | 510 | 501 |
Loans Receivable | ||||
Individually evaluated for impairment | ||||
Collectively evaluated for impairment | 18,531 | 7,848 | ||
Total Loans Receivable | 18,531 | 7,848 | ||
Other Portfolio Segment [Member] | ||||
Allowance for loan losses | ||||
Individually evaluated for impairment | 175 | 61 | ||
Collectively evaluated for impairment | 673 | 1,339 | ||
Balance, end of period | 848 | 1,400 | 2,936 | 3,516 |
Loans Receivable | ||||
Individually evaluated for impairment | 1,720 | 1,509 | ||
Collectively evaluated for impairment | 58,885 | 55,807 | ||
Total Loans Receivable | 60,605 | 57,316 | ||
Commercial Portfolio Segment [Member] | ||||
Allowance for loan losses | ||||
Individually evaluated for impairment | 28 | 38 | ||
Collectively evaluated for impairment | 571 | 565 | ||
Balance, end of period | 599 | 603 | 308 | 336 |
Loans Receivable | ||||
Individually evaluated for impairment | 306 | 318 | ||
Collectively evaluated for impairment | 41,000 | 40,728 | ||
Total Loans Receivable | 41,306 | 41,046 | ||
Consumer Portfolio Segment [Member] | ||||
Allowance for loan losses | ||||
Individually evaluated for impairment | ||||
Collectively evaluated for impairment | 205 | 407 | ||
Balance, end of period | 205 | 407 | $ 285 | $ 265 |
Loans Receivable | ||||
Individually evaluated for impairment | ||||
Collectively evaluated for impairment | 4,594 | 3,639 | ||
Total Loans Receivable | $ 4,594 | $ 3,639 |
ALLOWANCE FOR LOAN LOSSES (De80
ALLOWANCE FOR LOAN LOSSES (Details 3) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Loans Reported amount | $ 746,686 | $ 626,341 |
One To Four Family Residential [Member] | ||
Loans Reported amount | 278,437 | 248,633 |
Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 41,306 | 41,046 |
Home Equity Line of Credit [Member] | ||
Loans Reported amount | 50,334 | 53,446 |
Residential Construction [Member] | ||
Loans Reported amount | 18,531 | 7,848 |
Other Portfolio Segment [Member] | ||
Loans Reported amount | 60,605 | 57,316 |
Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 292,879 | 214,413 |
Consumer Portfolio Segment [Member] | ||
Loans Reported amount | 4,594 | 3,639 |
Graded Loan [Member] | ||
Loans Reported amount | 416,627 | 450,617 |
Graded Loan [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | 134,486 | 105,584 |
Graded Loan [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 38,277 | 40,784 |
Graded Loan [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | 8,676 | 9,967 |
Graded Loan [Member] | Residential Construction [Member] | ||
Loans Reported amount | 13,929 | 5,014 |
Graded Loan [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | 46,170 | 40,490 |
Graded Loan [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 284,348 | 214,195 |
Graded Loan [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | 376 | 593 |
Graded Loan [Member] | Loan Grade One [Member] | ||
Loans Reported amount | 10,401 | 2,599 |
Graded Loan [Member] | Loan Grade One [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade One [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 429 | 10,336 |
Graded Loan [Member] | Loan Grade One [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade One [Member] | Residential Construction [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade One [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade One [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 9,867 | 65 |
Graded Loan [Member] | Loan Grade One [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade Two [Member] | ||
Loans Reported amount | 4,545 | 100 |
Graded Loan [Member] | Loan Grade Two [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade Two [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 1,463 | 99 |
Graded Loan [Member] | Loan Grade Two [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade Two [Member] | Residential Construction [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade Two [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade Two [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 4,290 | 4,446 |
Graded Loan [Member] | Loan Grade Two [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade Three [Member] | ||
Loans Reported amount | 35,010 | 90,180 |
Graded Loan [Member] | Loan Grade Three [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | 28,129 | 18,518 |
Graded Loan [Member] | Loan Grade Three [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 2,772 | 1,734 |
Graded Loan [Member] | Loan Grade Three [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | 1,812 | 1,358 |
Graded Loan [Member] | Loan Grade Three [Member] | Residential Construction [Member] | ||
Loans Reported amount | 587 | 525 |
Graded Loan [Member] | Loan Grade Three [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | 2,163 | 1,479 |
Graded Loan [Member] | Loan Grade Three [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 24,744 | 11,396 |
Graded Loan [Member] | Loan Grade Three [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade Four [Member] | ||
Loans Reported amount | 157,918 | 121,411 |
Graded Loan [Member] | Loan Grade Four [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | 75,542 | 46,942 |
Graded Loan [Member] | Loan Grade Four [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 21,824 | 18,586 |
Graded Loan [Member] | Loan Grade Four [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | 3,393 | 1,961 |
Graded Loan [Member] | Loan Grade Four [Member] | Residential Construction [Member] | ||
Loans Reported amount | 10,686 | 2,036 |
Graded Loan [Member] | Loan Grade Four [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | 22,374 | 13,850 |
Graded Loan [Member] | Loan Grade Four [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 131,117 | 74,542 |
Graded Loan [Member] | Loan Grade Four [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | 51 | 1 |
Graded Loan [Member] | Loan Grade Five [Member] | ||
Loans Reported amount | 172,080 | 175,978 |
Graded Loan [Member] | Loan Grade Five [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | 26,474 | 33,886 |
Graded Loan [Member] | Loan Grade Five [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 11,092 | 9,274 |
Graded Loan [Member] | Loan Grade Five [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | 3,471 | 6,648 |
Graded Loan [Member] | Loan Grade Five [Member] | Residential Construction [Member] | ||
Loans Reported amount | 2,370 | 1,347 |
Graded Loan [Member] | Loan Grade Five [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | 17,942 | 22,864 |
Graded Loan [Member] | Loan Grade Five [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 95,447 | 97,469 |
Graded Loan [Member] | Loan Grade Five [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | 325 | 592 |
Graded Loan [Member] | Loan Grade Six [Member] | ||
Loans Reported amount | 19,195 | 31,283 |
Graded Loan [Member] | Loan Grade Six [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | 2,594 | 2,903 |
Graded Loan [Member] | Loan Grade Six [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 268 | 297 |
Graded Loan [Member] | Loan Grade Six [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade Six [Member] | Residential Construction [Member] | ||
Loans Reported amount | 286 | 1,106 |
Graded Loan [Member] | Loan Grade Six [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | 2,473 | 1,718 |
Graded Loan [Member] | Loan Grade Six [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 11,537 | 13,171 |
Graded Loan [Member] | Loan Grade Six [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade Seven [Member] | ||
Loans Reported amount | 17,478 | 29,066 |
Graded Loan [Member] | Loan Grade Seven [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | 1,747 | 3,335 |
Graded Loan [Member] | Loan Grade Seven [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 429 | 458 |
Graded Loan [Member] | Loan Grade Seven [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade Seven [Member] | Residential Construction [Member] | ||
Loans Reported amount | ||
Graded Loan [Member] | Loan Grade Seven [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | 1,218 | 579 |
Graded Loan [Member] | Loan Grade Seven [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 7,346 | 13,106 |
Graded Loan [Member] | Loan Grade Seven [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | ||
UnGraded Loan [Member] | ||
Loans Reported amount | 209,714 | 93,044 |
UnGraded Loan [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | 143,951 | 143,049 |
UnGraded Loan [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 3,029 | 262 |
UnGraded Loan [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | 41,658 | 43,479 |
UnGraded Loan [Member] | Residential Construction [Member] | ||
Loans Reported amount | 4,602 | 2,834 |
UnGraded Loan [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | 14,435 | 16,826 |
UnGraded Loan [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 8,531 | 218 |
UnGraded Loan [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | 4,218 | 3,046 |
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | ||
Loans Reported amount | 1,718 | 2,139 |
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | 1,062 | 1,278 |
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | ||
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | 252 | 321 |
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Residential Construction [Member] | ||
Loans Reported amount | ||
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | 253 | 119 |
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | ||
UnGraded Loan [Member] | Nonperforming Financing Receivable [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | 46 | |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | ||
Loans Reported amount | 207,996 | 90,905 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | One To Four Family Residential [Member] | ||
Loans Reported amount | 142,889 | 141,771 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Commercial Portfolio Segment [Member] | ||
Loans Reported amount | 3,029 | 262 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Home Equity Line of Credit [Member] | ||
Loans Reported amount | 41,406 | 43,158 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Residential Construction [Member] | ||
Loans Reported amount | 4,602 | 2,834 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Other Portfolio Segment [Member] | ||
Loans Reported amount | 14,182 | 16,707 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Loans Reported amount | 8,531 | 218 |
UnGraded Loan [Member] | Performing Financing Receivable [Member] | Consumer Portfolio Segment [Member] | ||
Loans Reported amount | $ 4,172 | $ 3,046 |
ALLOWANCE FOR LOAN LOSSES (De81
ALLOWANCE FOR LOAN LOSSES (Details 4) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | $ 7,517 | $ 8,409 |
60-89 Days Past | 2,961 | 1,699 |
90 Days and Over Past Due | 3,387 | 2,270 |
Total Past Due | 13,865 | 12,378 |
Current | 732,821 | 613,963 |
Total Loans Receivable | 746,686 | 626,341 |
One To Four Family Residential [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 4,931 | 5,610 |
60-89 Days Past | 1,116 | 1,260 |
90 Days and Over Past Due | 554 | 1,205 |
Total Past Due | 6,601 | 8,075 |
Current | 271,836 | 240,558 |
Total Loans Receivable | 278,437 | 248,633 |
Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 1,383 | 1,585 |
60-89 Days Past | 1,800 | |
90 Days and Over Past Due | 1,681 | 605 |
Total Past Due | 4,864 | 2,190 |
Current | 288,015 | 212,223 |
Total Loans Receivable | 292,879 | 214,413 |
Home Equity Line of Credit [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 126 | 369 |
60-89 Days Past | 44 | 38 |
90 Days and Over Past Due | 233 | 322 |
Total Past Due | 403 | 729 |
Current | 49,931 | 52,717 |
Total Loans Receivable | 50,334 | 53,446 |
Residential Construction [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 180 | |
60-89 Days Past | ||
90 Days and Over Past Due | ||
Total Past Due | 180 | |
Current | 18,351 | 7,848 |
Total Loans Receivable | 18,531 | 7,848 |
Other Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 467 | 208 |
60-89 Days Past | 397 | |
90 Days and Over Past Due | 919 | 138 |
Total Past Due | 1,386 | 743 |
Current | 59,219 | 56,573 |
Total Loans Receivable | 60,605 | 57,316 |
Commercial Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 368 | 625 |
60-89 Days Past | ||
90 Days and Over Past Due | ||
Total Past Due | 368 | 625 |
Current | 40,938 | 40,421 |
Total Loans Receivable | 41,306 | 41,046 |
Consumer Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
30-59 Days Past Due | 62 | 12 |
60-89 Days Past | 1 | 4 |
90 Days and Over Past Due | ||
Total Past Due | 63 | 16 |
Current | 4,531 | 3,623 |
Total Loans Receivable | $ 4,594 | $ 3,639 |
ALLOWANCE FOR LOAN LOSSES (De82
ALLOWANCE FOR LOAN LOSSES (Details 5) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, without a valuation allowance | $ 9,770 | $ 12,386 |
Unpaid Principal Balance, without a valuation allowance | 11,672 | 14,358 |
Recorded Balance, Recorded Balance, with a valuation allowance | 4,536 | 5,082 |
Unpaid Principal Balance, with a valuation allowance | 4,536 | 5,082 |
Recorded Balance | 14,306 | 17,468 |
Unpaid Principal Balance | 16,208 | 19,440 |
Specific Allowance | 584 | 510 |
One To Four Family Residential [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, without a valuation allowance | 2,670 | 4,289 |
Unpaid Principal Balance, without a valuation allowance | 2,723 | 4,403 |
Recorded Balance, Recorded Balance, with a valuation allowance | 1,144 | 2,026 |
Unpaid Principal Balance, with a valuation allowance | 1,144 | 2,026 |
Recorded Balance | 3,814 | 6,315 |
Unpaid Principal Balance | 3,867 | 6,429 |
Specific Allowance | 201 | 344 |
Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, without a valuation allowance | 6,078 | 7,226 |
Unpaid Principal Balance, without a valuation allowance | 7,710 | 8,809 |
Recorded Balance, Recorded Balance, with a valuation allowance | 2,075 | 1,787 |
Unpaid Principal Balance, with a valuation allowance | 2,075 | 1,787 |
Recorded Balance | 8,153 | 9,013 |
Unpaid Principal Balance | 9,785 | 10,596 |
Specific Allowance | 178 | 61 |
Home Equity Line of Credit [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, without a valuation allowance | 213 | 213 |
Unpaid Principal Balance, without a valuation allowance | 328 | 328 |
Recorded Balance, Recorded Balance, with a valuation allowance | 100 | 100 |
Unpaid Principal Balance, with a valuation allowance | 100 | 100 |
Recorded Balance | 313 | 313 |
Unpaid Principal Balance | 428 | 428 |
Specific Allowance | 2 | 6 |
Other Portfolio Segment [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, without a valuation allowance | 809 | 658 |
Unpaid Principal Balance, without a valuation allowance | 911 | 818 |
Recorded Balance, Recorded Balance, with a valuation allowance | 911 | 851 |
Unpaid Principal Balance, with a valuation allowance | 911 | 851 |
Recorded Balance | 1,720 | 1,509 |
Unpaid Principal Balance | 1,822 | 1,669 |
Specific Allowance | 175 | 61 |
Commercial Portfolio Segment [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Balance, without a valuation allowance | ||
Unpaid Principal Balance, without a valuation allowance | ||
Recorded Balance, Recorded Balance, with a valuation allowance | 306 | 318 |
Unpaid Principal Balance, with a valuation allowance | 306 | 318 |
Recorded Balance | 306 | 318 |
Unpaid Principal Balance | 306 | 318 |
Specific Allowance | $ 28 | $ 38 |
ALLOWANCE FOR LOAN LOSSES (De83
ALLOWANCE FOR LOAN LOSSES (Details 6) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Average Investment in Impaired Loans, without a valuation allowance | $ 11,843 | $ 14,952 | $ 24,394 |
Interest Income Recognized, without a valuation allowance | 270 | 512 | 1,029 |
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 4,699 | 5,789 | 10,288 |
Interest Income Recognized, with a valuation allowance | 190 | 230 | 396 |
Average Investment in Impaired Loans | 16,542 | 20,741 | 34,682 |
Interest Income Recognized | 460 | 742 | 1,425 |
One To Four Family Residential [Member] | |||
Average Investment in Impaired Loans, without a valuation allowance | 2,758 | 6,072 | 6,079 |
Interest Income Recognized, without a valuation allowance | 117 | 174 | 242 |
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 1,162 | 2,056 | 4,048 |
Interest Income Recognized, with a valuation allowance | 48 | 88 | 137 |
Average Investment in Impaired Loans | 3,920 | 8,128 | 10,127 |
Interest Income Recognized | 165 | 262 | 379 |
Commercial Real Estate Portfolio Segment [Member] | |||
Average Investment in Impaired Loans, without a valuation allowance | 7,834 | 14,255 | 7,999 |
Interest Income Recognized, without a valuation allowance | 116 | 664 | 299 |
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 2,098 | 3,715 | 1,808 |
Interest Income Recognized, with a valuation allowance | 82 | 152 | 82 |
Average Investment in Impaired Loans | 9,932 | 17,970 | 9,807 |
Interest Income Recognized | 198 | 816 | 381 |
Home Equity Line of Credit [Member] | |||
Average Investment in Impaired Loans, without a valuation allowance | 328 | 213 | 1,728 |
Interest Income Recognized, without a valuation allowance | 10 | 9 | 53 |
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 100 | 100 | 149 |
Interest Income Recognized, with a valuation allowance | 4 | 4 | 6 |
Average Investment in Impaired Loans | 428 | 313 | 1,877 |
Interest Income Recognized | 14 | 13 | 59 |
Other Portfolio Segment [Member] | |||
Average Investment in Impaired Loans, without a valuation allowance | 923 | 668 | 2,332 |
Interest Income Recognized, without a valuation allowance | 27 | 30 | 70 |
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 1,027 | 1,502 | 2,042 |
Interest Income Recognized, with a valuation allowance | 37 | 37 | 81 |
Average Investment in Impaired Loans | 1,950 | 2,170 | 4,374 |
Interest Income Recognized | 64 | 67 | 151 |
Commercial Portfolio Segment [Member] | |||
Average Investment in Impaired Loans, without a valuation allowance | |||
Interest Income Recognized, without a valuation allowance | |||
Average Investment in Impaired Loans, Interest Income Recognized, with a valuation allowance | 312 | 323 | 334 |
Interest Income Recognized, with a valuation allowance | 19 | 19 | 20 |
Average Investment in Impaired Loans | 312 | 323 | 334 |
Interest Income Recognized | $ 19 | $ 19 | $ 20 |
ALLOWANCE FOR LOAN LOSSES (De84
ALLOWANCE FOR LOAN LOSSES (Details 7) - Nonperforming Financing Receivable [Member] - Loans [Member] - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | $ 6,041 | $ 7,280 |
One To Four Family Residential [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | 1,125 | 2,893 |
Commercial Real Estate Portfolio Segment [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | 3,536 | 3,628 |
Home Equity Line of Credit [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | 250 | 320 |
Other Portfolio Segment [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | 1,042 | 384 |
Commercial Portfolio Segment [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | 41 | 55 |
Consumer Portfolio Segment [Member] | ||
Non Performing Loan Receivables and Other Assets [Line Items] | ||
Finance receivable, non-accrual | $ 47 |
ALLOWANCE FOR LOAN LOSSES (De85
ALLOWANCE FOR LOAN LOSSES (Details 8) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Financing Receivable, Modifications [Line Items] | ||
TDR loans | $ 12,664 | $ 14,601 |
Performing Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 9,882 | 11,206 |
Nonperforming Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 2,782 | 3,395 |
One To Four Family Residential [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 3,770 | 4,393 |
One To Four Family Residential [Member] | Performing Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 3,560 | 4,182 |
One To Four Family Residential [Member] | Nonperforming Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 210 | 211 |
Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 6,693 | 8,056 |
Commercial Real Estate Portfolio Segment [Member] | Performing Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 4,327 | 5,134 |
Commercial Real Estate Portfolio Segment [Member] | Nonperforming Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 2,366 | 2,922 |
Home Equity Line of Credit [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 313 | 313 |
Home Equity Line of Credit [Member] | Performing Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 313 | 313 |
Home Equity Line of Credit [Member] | Nonperforming Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | ||
Residential Construction [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | ||
Residential Construction [Member] | Performing Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | ||
Residential Construction [Member] | Nonperforming Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | ||
Other Portfolio Segment [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 1,583 | 1,509 |
Other Portfolio Segment [Member] | Performing Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 1,377 | 1,259 |
Other Portfolio Segment [Member] | Nonperforming Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 206 | 250 |
Commercial Portfolio Segment [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 305 | 330 |
Commercial Portfolio Segment [Member] | Performing Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | 305 | 318 |
Commercial Portfolio Segment [Member] | Nonperforming Financing Receivable [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
TDR loans | $ 12 |
ALLOWANCE FOR LOAN LOSSES (De86
ALLOWANCE FOR LOAN LOSSES (Details 9) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($)LoansModifications | |
Extended Payment Term [Member] | |
Number of Loans | LoansModifications | 1 |
Pre-modification Outstanding Recorded Investment | $ 833 |
Post-modification Outstanding Recorded Investment | $ 833 |
Extended Payment Term [Member] | Commercial Real Estate Portfolio Segment [Member] | |
Number of Loans | LoansModifications | 1 |
Pre-modification Outstanding Recorded Investment | $ 833 |
Post-modification Outstanding Recorded Investment | $ 833 |
Forgiveness of Principal [Member] | |
Number of Loans | LoansModifications | 1 |
Pre-modification Outstanding Recorded Investment | $ 1,988 |
Post-modification Outstanding Recorded Investment | $ 1,693 |
Forgiveness of Principal [Member] | Commercial Real Estate Portfolio Segment [Member] | |
Number of Loans | LoansModifications | 1 |
Pre-modification Outstanding Recorded Investment | $ 1,988 |
Post-modification Outstanding Recorded Investment | $ 1,693 |
CONCENTRATIONS OF CREDIT RISK87
CONCENTRATIONS OF CREDIT RISK (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Maximum legal lending limits | $ 22,200 | $ 19,100 |
Percentage of Total Loan | 100.00% | 100.00% |
One To Four Family Residential [Member] | ||
Percentage of Total Loan | 37.30% | 39.70% |
Commercial Real Estate Portfolio Segment [Member] | ||
Percentage of Total Loan | 39.20% | 34.20% |
Home Equity Line of Credit [Member] | ||
Percentage of Total Loan | 6.70% | 8.50% |
Residential Construction [Member] | ||
Percentage of Total Loan | 2.50% | 1.30% |
Other Portfolio Segment [Member] | ||
Percentage of Total Loan | 8.10% | 9.10% |
Commercial Portfolio Segment [Member] | ||
Percentage of Total Loan | 5.50% | 6.60% |
Consumer Portfolio Segment [Member] | ||
Percentage of Total Loan | 0.07% | 0.60% |
FIXED ASSETS (Details)
FIXED ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Total premises and equipment | $ 36,326 | $ 32,607 | |
Less: Accumulated depreciation | (16,117) | (14,934) | |
Premises and equipment, net | 20,209 | 17,673 | |
Depreciation and leasehold amortization expense | 1,200 | 1,000 | $ 900 |
Land [Member] | |||
Total premises and equipment | 9,201 | 8,181 | |
Building [Member] | |||
Total premises and equipment | 18,696 | 16,826 | |
Furniture and Fixtures [Member] | |||
Total premises and equipment | 8,429 | 7,569 | |
Construction in Progress [Member] | |||
Total premises and equipment | $ 31 |
FIXED ASSETS (Details 2)
FIXED ASSETS (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Fixed Assets Details 2 | |||
2,017 | $ 49 | ||
Total | 49 | ||
Rental Expense | $ 100 | $ 100 | $ 100 |
REAL ESTATE OWNED (Details)
REAL ESTATE OWNED (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Real Estate Owned Details | ||||
Real estate owned, gross | $ 5,650 | $ 6,741 | ||
Less: Valuation allowance | 1,424 | 1,372 | $ 1,760 | $ 5,560 |
Real estate owned, net | $ 4,226 | $ 5,369 |
REAL ESTATE OWNED (Details 2)
REAL ESTATE OWNED (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Real Estate Owned Valuation Allowance [Roll Forward] | |||
Valuation allowance, beginning | $ 1,372 | $ 1,760 | $ 5,560 |
Provision charged to expense | 655 | 171 | 2,349 |
Reduction due to disposal | (603) | (559) | (6,149) |
Valuation allowance, ending | 1,424 | 1,372 | $ 1,760 |
Real estate acquired through foreclosure | 5,650 | $ 6,741 | |
Residential Real Estate [Member] | |||
Real Estate Owned Valuation Allowance [Roll Forward] | |||
Real estate acquired through foreclosure | 100 | ||
Other real estate | $ 1,300 |
BANK OWNED LIFE INSURANCE (BO92
BANK OWNED LIFE INSURANCE (BOLI) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Bank Owned Life Insurance Boli Details | ||
Separate account | $ 12,548 | $ 12,388 |
General account | 17,944 | 7,636 |
Hybrid | 855 | 834 |
Bank owned life insurance | $ 31,347 | $ 20,858 |
LOAN SERVICING (Details)
LOAN SERVICING (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Loan Servicing Details | |||
Unpaid principal balance of mortgage loans serviced for others | $ 264,264 | $ 251,492 | $ 246,348 |
LOAN SERVICING (Details 2)
LOAN SERVICING (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Loan Servicing Details 2 | |||
Loan servicing rights, beginning of period | $ 2,344 | $ 2,187 | $ 1,883 |
Capitalization from loans sold | 604 | 544 | 385 |
Fair value adjustment | (345) | (387) | (81) |
Loan servicing rights, end of period | 2,603 | 2,344 | $ 2,187 |
Escrow deposits | $ 400 | $ 600 |
GOODWILL AND OTHER INTANGIBLE95
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Balance at beginning of period | $ 711 | |
Goodwill from ASB branch acquisition | 1,354 | 711 |
Balance at end of period | $ 2,065 | $ 711 |
GOODWILL AND OTHER INTANGIBLE96
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Gross carrying amount at beginning of period | $ 590 | |
Additions from acquisitions during the period | 530 | $ 590 |
Gross balance at end of period | 1,120 | 590 |
Accumulated amortization | (141) | |
Finite Lived Core Deposits Net | 979 | $ 590 |
Amortization expense | $ 200 |
DERIVATIVE FINANCIAL INSTRUME97
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Designated as Hedging Instrument [Member] | ||
Asset derivatives, Fair value | $ 476 | |
Designated as Hedging Instrument [Member] | Interest rate swaps [Member] | ||
Asset derivatives, Fair value | 476 | |
Not Designated as Hedging Instrument [Member] | ||
Asset derivatives, Fair value | 60 | 45 |
Not Designated as Hedging Instrument [Member] | Mortgage banking - loan commitment [Member] | ||
Asset derivatives, Fair value | 41 | 30 |
Not Designated as Hedging Instrument [Member] | Mortgage loan forward sales commitments [Member] | ||
Asset derivatives, Fair value | $ 19 | $ 15 |
DERIVATIVE FINANCIAL INSTRUME98
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Details 2) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Junior Subordinated Debt [Member] | |
Notional Amount | $ 14 |
Fixed Interest Rate | 0.958% |
Underlying Rate | 3 month LIBOR |
Life of Swap Contract | 4 years |
FHLB Variable Rate Advance [Member] | |
Notional Amount | $ 15 |
Fixed Interest Rate | 1.054% |
Underlying Rate | 3 month LIBOR |
Life of Swap Contract | 2 years |
FHLB Variable Rate Advance 1 [Member] | |
Notional Amount | $ 21 |
Fixed Interest Rate | 1.354% |
Underlying Rate | 3 month LIBOR |
Life of Swap Contract | 2 years |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Deposits By Type [Line Items] | |||
Balance | $ 830,013 | $ 716,617 | $ 703,117 |
Interest Expense | 3,964 | 4,334 | 5,361 |
Noninterest-bearing demand [Member] | |||
Deposits By Type [Line Items] | |||
Balance | 139,136 | 121,062 | 86,110 |
Interest Expense | |||
Interest-bearing Deposits [Member] | |||
Deposits By Type [Line Items] | |||
Balance | 122,271 | 103,198 | 92,877 |
Interest Expense | 160 | 136 | 149 |
Money Market Funds [Member] | |||
Deposits By Type [Line Items] | |||
Balance | 239,387 | 180,377 | 178,320 |
Interest Expense | 770 | 558 | 983 |
Savings Deposits [Member] | |||
Deposits By Type [Line Items] | |||
Balance | 40,014 | 35,838 | 27,591 |
Interest Expense | 49 | 33 | 36 |
Time deposit [Member] | |||
Deposits By Type [Line Items] | |||
Balance | 289,205 | 276,142 | 318,219 |
Interest Expense | $ 2,985 | $ 3,607 | $ 4,193 |
DEPOSITS (Details 2)
DEPOSITS (Details 2) $ in Thousands | Dec. 31, 2016USD ($) |
Deposits Details 2 | |
2,017 | $ 151,236 |
2,018 | 68,287 |
2,019 | 31,093 |
2,020 | 14,434 |
2,021 | 11,789 |
Thereafter | 12,366 |
Deposits | $ 289,205 |
DEPOSITS (Details 3)
DEPOSITS (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Deposits Details 3 | |||
Time deposit premium, beginning of period | $ 30 | ||
Additional premium for acquisitions | 648 | 30 | |
Accretion | (258) | ||
Time deposit premium, end of period | $ 420 | $ 30 |
DEPOSITS (Details Narrative)
DEPOSITS (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deposits Details 3 | ||
Time Deposits, $250,000 or More | $ 46,900 | $ 26,400 |
Brokered Deposits | 11,800 | 0 |
Deposits from Related Parties | $ 2,200 | $ 1,700 |
BORROWINGS (Details)
BORROWINGS (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Balance | $ 298,500 | $ 153,500 |
Rate | 0.68% | 0.65% |
Maturity 2/5/2016 [Member] | ||
Balance | $ 45,000 | |
Type | Fixed | |
Rate | 0.30% | |
Maturity 3/28/2016 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.39% | |
Maturity 3/30/2016 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.52% | |
Maturity 3/31/2016 [Member] | ||
Balance | $ 10,000 | |
Type | Fixed | |
Rate | 0.47% | |
Maturity 6/6/2016 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.49% | |
Maturity 6/30/2016 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.69% | |
Maturity 6/30/2016 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.51% | |
Maturity 7/1/2016 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.74% | |
Maturity 7/21/2016 [Member] | ||
Balance | $ 20,000 | |
Type | Floating | |
Rate | 0.49% | |
Maturity 9/28/2016 [Member] | ||
Balance | $ 10,000 | |
Type | Fixed | |
Rate | 0.58% | |
Maturity 12/5/2016 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.79% | |
Maturity 12/30/2016 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.98% | |
Maturity 12/30/2016 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.74% | |
Maturity 05/11/2017 [Member] | ||
Balance | $ 1,000 | $ 1,000 |
Type | Fixed | Fixed |
Rate | 0.87% | 0.87% |
Maturity 06/12/2017 [Member] | ||
Balance | $ 2,000 | $ 2,000 |
Type | Fixed | Fixed |
Rate | 1.02% | 1.02% |
Maturity 12/29/2017 [Member] | ||
Balance | $ 10,000 | $ 5,000 |
Type | Fixed | Fixed |
Rate | 0.77% | 1.38% |
Maturity 5/11/2018 [Member] | ||
Balance | $ 2,000 | |
Type | Fixed | |
Rate | 1.25% | |
Maturity 4/10/2019 [Member] | ||
Balance | $ 10,000 | |
Type | Fixed | |
Rate | 1.83% | |
Maturity 6/11/2019 [Member] | ||
Balance | $ 2,500 | |
Type | Fixed | |
Rate | 1.77% | |
Maturity 5/11/2020 [Member] | ||
Balance | $ 1,000 | |
Type | Fixed | |
Rate | 1.78% | |
Maturity 01/03/2017 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.58% | |
Maturity 01/03/2017 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.44% | |
Maturity 01/05/2017 [Member] | ||
Balance | $ 50,000 | |
Type | Fixed | |
Rate | 0.49% | |
Maturity 01/15/2017 [Member] | ||
Balance | $ 30,000 | |
Type | Fixed | |
Rate | 0.64% | |
Maturity 01/17/2017 [Member] | ||
Balance | $ 15,000 | |
Type | Fixed | |
Rate | 0.63% | |
Maturity 01/23/2017 [Member] | ||
Balance | $ 25,000 | |
Type | Fixed | |
Rate | 0.64% | |
Maturity 02/07/2017 [Member] | ||
Balance | $ 20,000 | |
Type | Fixed | |
Rate | 0.56% | |
Maturity 03/28/2017 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.58% | |
Maturity 03/29/2017 [Member] | ||
Balance | $ 15,000 | |
Type | Floating | |
Rate | 0.56% | |
Maturity 03/31/2017 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.80% | |
Maturity 04/03/2017 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.60% | |
Maturity 04/06/2017 [Member] | ||
Balance | $ 10,000 | |
Type | Fixed | |
Rate | 0.60% | |
Maturity 05/23/2017 [Member] | ||
Balance | $ 20,500 | |
Type | Floating | |
Rate | 0.73% | |
Maturity 06/06/2017 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.82% | |
Maturity 06/30/2017 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.76% | |
Maturity 08/07/2017 [Member] | ||
Balance | $ 25,000 | |
Type | Fixed | |
Rate | 0.77% | |
Maturity 09/28/2017 [Member] | ||
Balance | $ 10,000 | |
Type | Fixed | |
Rate | 0.82% | |
Maturity 12/30/2017 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 0.78% | |
Maturity 06/05/2018 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 1.26% | |
Maturity 06/29/2018 [Member] | ||
Balance | $ 10,000 | |
Type | Fixed | |
Rate | 0.84% | |
Maturity 07/01/2018 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 1.40% | |
Maturity 12/31/2018 [Member] | ||
Balance | $ 5,000 | |
Type | Fixed | |
Rate | 1.51% |
BORROWINGS (Details 2)
BORROWINGS (Details 2) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Federal Home Loan Bank, Advances [Abstract] | ||
2,017 | $ 273,500 | |
2,018 | 25,000 | |
Total | $ 298,500 | $ 153,500 |
Federal Home Loan Bank, Advances, Weighted Average Rate [Abstract] | ||
2,017 | 0.64% | |
2,018 | 1.17% | |
Total | 0.68% | 0.65% |
Federal Reserve Bank Advances [Member] | ||
Federal Home Loan Bank, Advances, Weighted Average Rate [Abstract] | ||
Borrowing Capacity with the Federal Reserve Discount Window | $ 48,900 | $ 48,200 |
JUNIOR SUBORDINATED DEBT (Detai
JUNIOR SUBORDINATED DEBT (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||
Junior subordinated notes | $ 14,433 | $ 14,433 |
Junior Subordinated Debt [Member] | ||
Debt Instrument [Line Items] | ||
Junior subordinated notes | $ 14,433 | |
Debt instrument, interest rate | 3.76% | 3.34% |
Debt instrument, maturity date | Mar. 30, 2034 | |
Debt redemption price percentage | 100.00% | |
Junior Subordinated Debt [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 2.80% |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Employee Benefit Plans Details Narrative | |||
Defined Contribution Plan, Contributions by Employer | $ 500 | $ 400 | $ 200 |
POST-EMPLOYMENT BENEFITS (Detai
POST-EMPLOYMENT BENEFITS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan, Liabilities | $ 10,211 | $ 10,224 | |
Expense related to Defined Benefit Plan | 800 | 1,400 | $ 600 |
Supplemental Employee Retirement Plan [Member] | |||
Defined Benefit Plan, Liabilities | 4,417 | 4,435 | |
Cap Equity [Member] | |||
Defined Benefit Plan, Liabilities | 4,718 | 4,890 | |
Director Consultation [Member] | |||
Defined Benefit Plan, Liabilities | 252 | 258 | |
Life Insurance [Member] | |||
Defined Benefit Plan, Liabilities | $ 824 | $ 641 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Restricted Stock [Member] | ||
Maximum number of shares to be awarded under plan | 196,391 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Share-based Compensation Arrangement Options, Outstanding | 157,100 | |
Granted | 26,300 | 157,100 |
Exercised | (30,220) | |
Forfeited or expired | (7,600) | |
Share-based Compensation Arrangement Options, Outstanding | 145,580 | 157,100 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Weighted Average Exercise Price of Options Outstanding | $ 18.55 | |
Granted | 17.49 | 18.55 |
Exercised | 18.55 | |
Forfeited, exchanged or expired | 18.55 | |
Weighted Average Exercise Price of Options Outstanding | $ 18.36 | $ 18.55 |
Employee Stock Option [Member] | ||
Maximum number of shares to be awarded under plan | 458,246 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Share-based Compensation Arrangement Options, Outstanding | 366,000 | |
Granted | 57,400 | 366,000 |
Exercised | ||
Forfeited or expired | (16,200) | |
Share-based Compensation Arrangement Options, Outstanding | 407,200 | 366,000 |
Option Exercisable | 70,600 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Weighted Average Exercise Price of Options Outstanding | $ 18.55 | |
Granted | 17.52 | 18.55 |
Exercised | ||
Forfeited, exchanged or expired | 18.55 | |
Weighted Average Exercise Price of Options Outstanding | 18.41 | $ 18.55 |
Weighted Average Exercise Price of Options Exercisable | $ 18.55 | |
Weighted Avg. Remaining Years Contractual Life (in years) | 9 years | |
Aggregate Intrinsic Value of Options Outstanding | $ 890 |
SHARE-BASED COMPENSATION (De109
SHARE-BASED COMPENSATION (Details 2) - Employee Stock Option [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Valuation and related assumption for option program | ||
Fair value per option | $ 3.02 | $ 3.37 |
Expected life (in years) | 6 years 6 months | 6 years 6 months |
Expected stock price volatility | 12.00% | 12.00% |
Expected dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 1.57% | 1.85% |
Expected forfeiture rate | 0.00% | 0.00% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes Details | |||
Current - Federal | $ 549 | $ (150) | $ 112 |
Current - State | 24 | (25) | |
Deferred - Federal | 2,370 | 2,252 | 2,852 |
Deferred - State | 552 | 109 | 504 |
Change in valuation allowance | (18,950) | (731) | |
Income tax expense (benefit) | $ 3,495 | $ (16,739) | $ 2,208 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes Details | |||
Computed income tax expense (benefit) | $ 3,455 | $ 2,480 | $ 2,853 |
Deferred tax valuation allowance | (18,950) | (731) | |
State income tax, net of federal benefit | 218 | 165 | 271 |
Nontaxable municipal security income | (544) | (126) | (115) |
Nontaxable BOLI income | (107) | (160) | (182) |
Other | 473 | (148) | 112 |
Actual income tax expense (benefit) | $ 3,495 | $ (16,739) | $ 2,208 |
Effective tax rate | 35.40% | (236.20%) | 27.10% |
INCOME TAXES (Details 3)
INCOME TAXES (Details 3) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Allowance for loan losses | $ 3,245 | $ 3,557 |
Deferred compensation and post employment benefits | 3,365 | 3,498 |
Non-accrual interest | 375 | 286 |
Valuation reserve for other real estate | 693 | 516 |
North Carolina NOL carryover | 557 | 988 |
Federal NOL carryover | 8,560 | 10,750 |
Unrealized losses on securities | 3,079 | 697 |
Loan basis differences | 238 | |
Deposit premium | 155 | |
Other | 1,160 | 772 |
Total deferred tax assets | 21,427 | 21,064 |
Fixed assets | 263 | 499 |
Loan servicing rights | 962 | 881 |
Core deposit intangible | 158 | |
Deferred loan costs | 1,002 | 708 |
Prepaid expenses | 57 | 146 |
Total deferred tax liabilities | 2,442 | 2,234 |
Net deferred tax asset | $ 18,985 | $ 18,830 |
INCOME TAXES (Details 4)
INCOME TAXES (Details 4) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Federal [Member] | |
Unused Net Operating Losses | $ 24,458 |
Federal [Member] | Minimum [Member] | |
Expiration Dates | 2,027 |
Federal [Member] | Maximum [Member] | |
Expiration Dates | 2,034 |
North Carolina [Member] | |
Unused Net Operating Losses | $ 28,425 |
North Carolina [Member] | Minimum [Member] | |
Expiration Dates | 2,024 |
North Carolina [Member] | Maximum [Member] | |
Expiration Dates | 2,028 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share Details | |||
Net income | $ 6,376 | $ 23,825 | $ 5,943 |
Weighted average shares outstanding | 6,477,284 | 6,546,375 | 6,546,375 |
Effect of dilutive securities | 12,647 | ||
Average shares outstanding | 6,489,931 | 6,546,375 | 6,546,375 |
Earnings per share - basic | $ 0.98 | $ 3.64 | $ 0.91 |
Earnings per share - diluted | $ 0.98 | $ 3.64 | $ 0.91 |
ACCUMULATED OTHER COMPREHENS115
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Balance, beginning of period | $ (1,736) | $ (2,269) | $ (7,476) |
Change in deferred tax valuation allowance attributable to unrealized (gain) loss on investment securities available for sale | 377 | 289 | 1,992 |
Change in unrealized holding gain (loss) on securities available for sale | (6,652) | (166) | 5,665 |
Reclassification adjustment for net securities gains realized in net income | (1,216) | (403) | (657) |
Transfer of net unrealized loss from available for sale to held to maturity | |||
Amortization of unrealized gains and losses on securities transferred to held to maturity | 578 | 984 | 199 |
Reduction in unrealized loss related to held to maturity securities transferred to available-for-sale | 325 | ||
Change in unrealized holding gains and losses on cash flow hedge | 476 | ||
Income tax benefit (expense) | 2,392 | (171) | (1,992) |
Balance, end of period | (5,456) | (1,736) | (2,269) |
Valuation Allowance of Deferred Tax Assets [Member] | |||
Balance, beginning of period | (579) | (868) | (2,860) |
Change in deferred tax valuation allowance attributable to unrealized (gain) loss on investment securities available for sale | 377 | 289 | 1,992 |
Change in unrealized holding gain (loss) on securities available for sale | |||
Reclassification adjustment for net securities gains realized in net income | |||
Transfer of net unrealized loss from available for sale to held to maturity | |||
Amortization of unrealized gains and losses on securities transferred to held to maturity | |||
Reduction in unrealized loss related to held to maturity securities transferred to available-for-sale | |||
Income tax benefit (expense) | |||
Balance, end of period | (202) | (579) | (868) |
Available-for-sale Securities [Member] | |||
Balance, beginning of period | (594) | (236) | (3,374) |
Change in deferred tax valuation allowance attributable to unrealized (gain) loss on investment securities available for sale | |||
Change in unrealized holding gain (loss) on securities available for sale | (6,652) | (166) | 5,665 |
Reclassification adjustment for net securities gains realized in net income | (1,216) | (403) | (657) |
Transfer of net unrealized loss from available for sale to held to maturity | 74 | ||
Amortization of unrealized gains and losses on securities transferred to held to maturity | |||
Reduction in unrealized loss related to held to maturity securities transferred to available-for-sale | |||
Income tax benefit (expense) | 2,908 | 211 | (1,944) |
Balance, end of period | (5,554) | (594) | (236) |
Held-to-maturity Securities [Member] | |||
Balance, beginning of period | (563) | (1,165) | (1,242) |
Change in deferred tax valuation allowance attributable to unrealized (gain) loss on investment securities available for sale | |||
Change in unrealized holding gain (loss) on securities available for sale | |||
Reclassification adjustment for net securities gains realized in net income | |||
Transfer of net unrealized loss from available for sale to held to maturity | (74) | ||
Amortization of unrealized gains and losses on securities transferred to held to maturity | 578 | 984 | 199 |
Reduction in unrealized loss related to held to maturity securities transferred to available-for-sale | 325 | ||
Income tax benefit (expense) | (340) | (382) | (48) |
Balance, end of period | $ (563) | $ (1,165) | |
Cash Flow Hedge [Member] | |||
Change in unrealized holding gains and losses on cash flow hedge | 476 | ||
Income tax benefit (expense) | (176) | ||
Balance, end of period | $ 300 |
ACCUMULATED OTHER COMPREHENS116
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Increase related to transfer from AFS | |||
Reduction related to transfer to AFS | $ 325 | ||
Interest expense - effective portion | (6,032) | (5,723) | (6,573) |
Cash Flow Hedge [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Tax effect | 12 | ||
Impact, net of tax | (20) | ||
Interest expense - effective portion | (16) | ||
Reclassification out of Accumulated Other Comprehensive Income [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Impact, net of tax | 561 | (62) | 333 |
Gain on sale of investments, net [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Before tax | 1,216 | 403 | 657 |
Tax effect | (449) | (152) | (247) |
Impact, net of tax | 767 | 657 | 410 |
Investment Income (Expense) [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Before tax | (578) | (984) | (199) |
Increase related to transfer from AFS | 74 | ||
Reduction related to transfer to AFS | (325) | ||
Tax effect | 340 | 382 | 48 |
Impact, net of tax | $ (563) | $ (602) | $ (77) |
REGULATORY MATTERS (Details)
REGULATORY MATTERS (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Bank [Member] | |||
Tier I capital to total average assets, Actual Amount | $ 138,402 | $ 118,251 | |
Tier I capital to total average assets, Actual Percent | 11.06% | 12.05% | |
Tier I capital to total average assets, Minimum capital adequacy Amount | $ 50,034 | $ 39,270 | |
Tier I capital to total average assets, Minimum capital adequacy Percent | [1] | 4.00% | 4.00% |
Tier I capital to total average assets, Required to be Categorized Well Capitalized, Amount | $ 62,542 | $ 49,087 | |
Tier I capital to total average assets, Required to be Categorized Well Capitalized, Percent | 5.00% | 5.00% | |
CET1 capital to risk-weighted assets, Actual Amount | $ 138,402 | $ 118,251 | |
CET1 capital to risk-weighted assets, Actual Percent | 16.33% | 18.07% | |
CET1 capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Amount | $ 38,150 | $ 29,443 | |
CET1 capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Percent | [1] | 5.125% | 4.50% |
CET1 capital to risk-weighted assets, Required to be Categorized Well Capitalized, Amount | $ 55,106 | $ 42,529 | |
CET1 capital to risk-weighted assets, Required to be Categorized Well Capitalized, Percent | 6.50% | 6.50% | |
Tier I capital to risk-weighted assets, Actual Amount | $ 138,402 | $ 118,251 | |
Tier I capital to risk-weighted assets, Actual Percent | 16.33% | 18.07% | |
Tier I capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Amount | $ 50,867 | $ 39,257 | |
Tier I capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Percent | [1] | 6.625% | 6.00% |
Tier I capital to risk-weighted assets, Required to meet Memorandum of Understanding, Amount | $ 67,823 | $ 52,343 | |
Tier I capital to risk-weighted assets, Required to meet Memorandum of Understanding, Percent | 8.00% | 8.00% | |
Total Capital to risk-weighted assets, Actual Amount | $ 147,807 | $ 126,524 | |
Total Capital to risk-weighted assets, Actual Percent | 17.43% | 19.34% | |
Total Capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Amount | $ 67,823 | $ 52,343 | |
Total Capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Percent | [1] | 8.625% | 8.00% |
Total Capital to risk-weighted assets, Required to be Categorized Well Capitalized, Amount | $ 84,778 | $ 65,429 | |
Total Capital to risk-weighted assets, Required to be Categorized Well Capitalized, Percent | 10.00% | 10.00% | |
Parent Company [Member] | |||
Tier I capital to total average assets, Actual Amount | $ 141,013 | $ 136,063 | |
Tier I capital to total average assets, Actual Percent | 11.28% | 13.85% | |
Tier I capital to total average assets, Minimum capital adequacy Amount | $ 50,200 | $ 39,291 | |
Tier I capital to total average assets, Minimum capital adequacy Percent | [1] | 4.00% | 4.00% |
CET1 capital to risk-weighted assets, Actual Amount | $ 130,079 | $ 128,007 | |
CET1 capital to risk-weighted assets, Actual Percent | 15.33% | 19.55% | |
CET1 capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Amount | $ 38,188 | $ 29,468 | |
CET1 capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Percent | [1] | 5.125% | 4.50% |
Tier I capital to risk-weighted assets, Actual Amount | $ 141,013 | $ 136,063 | |
Tier I capital to risk-weighted assets, Actual Percent | 16.62% | 20.78% | |
Tier I capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Amount | $ 50,918 | $ 39,291 | |
Tier I capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Percent | [1] | 6.625% | 6.00% |
Total Capital to risk-weighted assets, Actual Amount | $ 150,418 | $ 144,343 | |
Total Capital to risk-weighted assets, Actual Percent | 17.72% | 22.04% | |
Total Capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Amount | $ 67,891 | $ 52,388 | |
Total Capital to risk-weighted assets, Required to be Categorized Adequately Capitalized, Percent | [1] | 8.625% | 8.00% |
[1] | As of December 31, 2016, includes capital conservation buffer of 0.625%. On a fully phased in basis, effective January 1, 2019, under Basel III, minimum capital ratios to be considered "adequately capitalized" including the capital conservation buffer of 2.5% will be as follows: Tier 1 Leverage Capital - 4.0%; Common Equity Tier 1 Capital - 7.0%; Tier 1 Risk-based Capital - 8.5%; and Total Risk-based Capital - 10.5%. |
COMMITMENTS AND CONTINGENCIE118
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Other Commitments [Line Items] | |
Commitments to fund lines of credit | $ 112,063 |
Lines of credit [Member] | |
Other Commitments [Line Items] | |
Commitments to fund lines of credit | 111,263 |
Standby Letters of Credit [Member] | |
Other Commitments [Line Items] | |
Commitments to fund lines of credit | $ 800 |
COMMITMENTS AND CONTINGENCIE119
COMMITMENTS AND CONTINGENCIES (Details 2) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Fixed | $ 24,855 |
Variable | 9,755 |
Total | $ 34,610 |
Minimum [Member] | |
Fixed (as a percent) | 1.99% |
Variable (as a percent) | 3.25% |
Maximum [Member] | |
Fixed (as a percent) | 7.99% |
Variable (as a percent) | 6.25% |
COMMITMENTS AND CONTINGENCIE120
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Mortgage Loans Sold to Federal National Mortgage Association[Member] | ||
Loss Contingencies [Line Items] | ||
Obligation for representations and warranties, reserve | $ 300 | $ 300 |
Commitments to Extend Credit [Member] | ||
Loss Contingencies [Line Items] | ||
Allowance for unfunded commitments | $ 100 | $ 100 |
FAIR VALUE DISCLOSURES (Details
FAIR VALUE DISCLOSURES (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | $ 406,641 | $ 245,966 |
Available-for-sale Securities [Member] | U.S. Treasury securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 2,514 | |
Available-for-sale Securities [Member] | US Government Corporations and Agencies Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 12,107 | 25,720 |
Trading account assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 4,714 | |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 8,329 | 6,824 |
Fair Value, Inputs, Level 1 [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 8,329 | 6,824 |
Fair Value, Inputs, Level 1 [Member] | Available-for-sale Securities [Member] | U.S. Treasury securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 2,514 | |
Fair Value, Inputs, Level 1 [Member] | Trading account assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 4,714 | |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 393,505 | 236,752 |
Fair Value, Inputs, Level 2 [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 393,029 | 236,752 |
Fair Value, Inputs, Level 2 [Member] | Available-for-sale Securities [Member] | US Government Corporations and Agencies Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 12,107 | 25,720 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 4,807 | 2,390 |
Fair Value, Inputs, Level 3 [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 2,144 | |
Trading account assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 5,211 | |
Trading account assets [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 5,211 | |
Mutual Funds [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 604 | 600 |
Mutual Funds [Member] | Fair Value, Inputs, Level 1 [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 604 | 600 |
Municipal Securities [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 146,771 | 39,858 |
Municipal Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 146,771 | 39,858 |
Collateralized Mortgage Backed Securities [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 217,937 | 171,174 |
Collateralized Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 217,937 | 171,174 |
Corporate Bond [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 18,358 | |
Corporate Bond [Member] | Fair Value, Inputs, Level 2 [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 16,214 | |
Corporate Bond [Member] | Fair Value, Inputs, Level 3 [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 2,144 | |
Derivative Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 476 | |
Derivative Assets [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 476 | |
Loan Servicing Rights[Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 2,603 | 2,344 |
Loan Servicing Rights[Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 2,603 | 2,344 |
Forward Sales Commitments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 19 | 16 |
Forward Sales Commitments [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 19 | 16 |
Interest Rate Lock Commitments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 41 | 30 |
Interest Rate Lock Commitments [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | $ 41 | 30 |
U.S. Treasury securities [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 1,510 | |
U.S. Treasury securities [Member] | Fair Value, Inputs, Level 1 [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | $ 1,510 |
FAIR VALUE DISCLOSURES (Deta122
FAIR VALUE DISCLOSURES (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value Disclosures Details 2 | |||
Balance at beginning of period | $ 2,390 | $ 2,248 | $ 1,888 |
Transfers from HTM | 2,144 | ||
Capitalization from loans sold | 604 | 544 | 385 |
Fair value adjustment | (345) | (387) | (81) |
Mortgage derivative gains included in Other income | 14 | (15) | 56 |
Balance at end of period | $ 4,807 | $ 2,390 | $ 2,248 |
FAIR VALUE DISCLOSURES (Deta123
FAIR VALUE DISCLOSURES (Details 3) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Assets measured at fair value on nonrecurring basis | $ 13,872 | $ 17,629 |
Impaired loans measured at present value | 4,600 | 5,200 |
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Assets measured at fair value on nonrecurring basis | 13,872 | 17,629 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | One To Four Family Residential [Member] | ||
Assets measured at fair value on nonrecurring basis | 2,205 | 4,163 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 6,329 | 7,226 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | Home Equity Line of Credit [Member] | ||
Assets measured at fair value on nonrecurring basis | 213 | 213 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | Other Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 809 | 658 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member] | One To Four Family Residential [Member] | ||
Assets measured at fair value on nonrecurring basis | 2,205 | 4,163 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 6,329 | 7,226 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Home Equity Line of Credit [Member] | ||
Assets measured at fair value on nonrecurring basis | 213 | 213 |
Fair Value, Measurements, Nonrecurring [Member] | Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Other Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 809 | 658 |
Fair Value, Measurements, Nonrecurring [Member] | Real Estate Owned [Member] | One To Four Family Residential [Member] | ||
Assets measured at fair value on nonrecurring basis | 1,336 | 1,384 |
Fair Value, Measurements, Nonrecurring [Member] | Real Estate Owned [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 722 | 1,123 |
Fair Value, Measurements, Nonrecurring [Member] | Real Estate Owned [Member] | Other Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 2,168 | 2,862 |
Fair Value, Measurements, Nonrecurring [Member] | Real Estate Owned [Member] | Fair Value, Inputs, Level 3 [Member] | One To Four Family Residential [Member] | ||
Assets measured at fair value on nonrecurring basis | 1,336 | 1,384 |
Fair Value, Measurements, Nonrecurring [Member] | Real Estate Owned [Member] | Fair Value, Inputs, Level 3 [Member] | Commercial Real Estate Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | 722 | 1,123 |
Fair Value, Measurements, Nonrecurring [Member] | Real Estate Owned [Member] | Fair Value, Inputs, Level 3 [Member] | Other Portfolio Segment [Member] | ||
Assets measured at fair value on nonrecurring basis | $ 2,168 | $ 2,862 |
FAIR VALUE DISCLOSURES (Deta124
FAIR VALUE DISCLOSURES (Details 4) | 12 Months Ended |
Dec. 31, 2016 | |
Impaired Loans [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Unobservable Input | Collateral discounts and estimated selling cost |
Valuation Technique | Discounted Appraisals |
Impaired Loans [Member] | Minimum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Collateral discounts and estimated selling cost | 0.00% |
Impaired Loans [Member] | Maximum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Collateral discounts and estimated selling cost | 30.00% |
Real Estate Owned [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Unobservable Input | Collateral discounts and estimated selling cost |
Valuation Technique | Discounted Appraisals |
Real Estate Owned [Member] | Minimum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Collateral discounts and estimated selling cost | 0.00% |
Real Estate Owned [Member] | Maximum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Collateral discounts and estimated selling cost | 30.00% |
Loan Servicing Rights[Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Valuation Technique | Discounted Cash Flows |
Loan Servicing Rights[Member] | Minimum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Prepayment Speed | 5.00% |
Discount rate | 12.00% |
Loan Servicing Rights[Member] | Maximum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Prepayment Speed | 35.00% |
Discount rate | 14.00% |
Corporate Bond [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Unobservable Input | Recent trade pricing |
Valuation Technique | Discounted Cash Flows |
Corporate Bond [Member] | Minimum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Recent trade pricing | 0.00% |
Corporate Bond [Member] | Maximum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Recent trade pricing | 8.00% |
FAIR VALUE DISCLOSURES (Deta125
FAIR VALUE DISCLOSURES (Details 5) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Assets: | ||||
Cash and equivalents | $ 43,294 | $ 40,650 | $ 58,982 | $ 34,281 |
Trading securities | 5,211 | 4,714 | ||
Securities available for sale | 398,291 | 238,862 | ||
Securities held to maturity | 41,164 | |||
Other investments, at cost | 15,261 | 8,834 | ||
Interest receivable | 5,012 | 3,554 | ||
Bank owned life insurance | 31,347 | 20,858 | ||
Loan servicing rights | 2,603 | 2,344 | $ 2,187 | $ 1,883 |
Commitments | ||||
Liabilities: | ||||
Time deposits | 289,205 | |||
Federal Home Loan Bank advances | 298,500 | 153,500 | ||
Junior subordinated debentures | 14,433 | 14,433 | ||
Other borrowings | 2,725 | 2,198 | ||
Accrued interest payable | 254 | 213 | ||
Reported Value Measurement [Member] | ||||
Assets: | ||||
Cash and equivalents | 43,294 | 40,650 | ||
Trading securities | 5,211 | 4,714 | ||
Securities available for sale | 398,291 | 238,862 | ||
Securities held to maturity | 41,164 | |||
Loans held for sale | 4,584 | 8,348 | ||
Loans receivable, net | 744,361 | 624,072 | ||
Other investments, at cost | 15,261 | 8,834 | ||
Interest receivable | 5,012 | 3,554 | ||
Bank owned life insurance | 31,347 | 20,858 | ||
Loan servicing rights | 2,603 | 2,344 | ||
Derivative asset | 476 | |||
SBIC investments | 1,666 | 1,025 | ||
Liabilities: | ||||
Demand deposits | 540,808 | 440,475 | ||
Time deposits | 289,205 | 276,142 | ||
Federal Home Loan Bank advances | 298,500 | 153,500 | ||
Junior subordinated debentures | 14,433 | 14,433 | ||
Other borrowings | 2,725 | 2,198 | ||
Accrued interest payable | 254 | 213 | ||
Reported Value Measurement [Member] | Forward Sales Commitments [Member] | ||||
Assets: | ||||
Commitments | 19 | 16 | ||
Reported Value Measurement [Member] | Interest Rate Lock Commitments [Member] | ||||
Assets: | ||||
Commitments | 41 | 30 | ||
Portion at Fair Value Measurement [Member] | ||||
Assets: | ||||
Cash and equivalents | 43,294 | 40,650 | ||
Trading securities | 5,211 | 4,714 | ||
Securities available for sale | 398,291 | 238,862 | ||
Securities held to maturity | 41,812 | |||
Loans held for sale | 5,093 | 8,952 | ||
Loans receivable, net | 741,612 | 620,516 | ||
Other investments, at cost | 15,261 | 8,834 | ||
Interest receivable | 5,012 | 3,554 | ||
Bank owned life insurance | 31,347 | 20,858 | ||
Loan servicing rights | 2,603 | 2,344 | ||
Derivative asset | 476 | |||
SBIC investments | 1,666 | 1,025 | ||
Liabilities: | ||||
Demand deposits | 540,808 | 440,475 | ||
Time deposits | 286,611 | 275,403 | ||
Federal Home Loan Bank advances | 298,667 | 153,441 | ||
Junior subordinated debentures | 14,433 | 14,433 | ||
Other borrowings | 2,907 | 2,198 | ||
Accrued interest payable | 254 | 213 | ||
Portion at Fair Value Measurement [Member] | Forward Sales Commitments [Member] | ||||
Assets: | ||||
Commitments | 19 | 16 | ||
Portion at Fair Value Measurement [Member] | Interest Rate Lock Commitments [Member] | ||||
Assets: | ||||
Commitments | 41 | 30 | ||
Fair Value, Inputs, Level 1 [Member] | Portion at Fair Value Measurement [Member] | ||||
Assets: | ||||
Cash and equivalents | 43,294 | 40,650 | ||
Trading securities | 5,211 | 4,714 | ||
Securities available for sale | 3,118 | 2,110 | ||
Securities held to maturity | 995 | |||
Loans held for sale | ||||
Loans receivable, net | ||||
Other investments, at cost | ||||
Interest receivable | ||||
Bank owned life insurance | ||||
Loan servicing rights | ||||
Derivative asset | ||||
SBIC investments | ||||
Liabilities: | ||||
Demand deposits | ||||
Time deposits | ||||
Federal Home Loan Bank advances | ||||
Junior subordinated debentures | ||||
Other borrowings | ||||
Accrued interest payable | ||||
Fair Value, Inputs, Level 2 [Member] | Portion at Fair Value Measurement [Member] | ||||
Assets: | ||||
Cash and equivalents | ||||
Trading securities | ||||
Securities available for sale | 393,029 | 236,752 | ||
Securities held to maturity | 40,817 | |||
Loans held for sale | 5,093 | 8,952 | ||
Loans receivable, net | ||||
Other investments, at cost | 15,261 | 8,834 | ||
Interest receivable | 5,012 | 3,554 | ||
Bank owned life insurance | 31,347 | 20,858 | ||
Loan servicing rights | ||||
Derivative asset | 476 | |||
SBIC investments | ||||
Liabilities: | ||||
Demand deposits | 540,808 | 440,475 | ||
Time deposits | ||||
Federal Home Loan Bank advances | 298,667 | 153,441 | ||
Junior subordinated debentures | 14,433 | 14,433 | ||
Other borrowings | 2,907 | |||
Accrued interest payable | 254 | 213 | ||
Fair Value, Inputs, Level 3 [Member] | Portion at Fair Value Measurement [Member] | ||||
Assets: | ||||
Cash and equivalents | ||||
Trading securities | ||||
Securities available for sale | 2,144 | |||
Securities held to maturity | ||||
Loans held for sale | ||||
Loans receivable, net | 741,612 | 620,516 | ||
Other investments, at cost | ||||
Interest receivable | ||||
Bank owned life insurance | ||||
Loan servicing rights | 2,603 | 2,344 | ||
Derivative asset | ||||
SBIC investments | 1,666 | 1,025 | ||
Liabilities: | ||||
Demand deposits | ||||
Time deposits | 286,611 | 275,403 | ||
Federal Home Loan Bank advances | ||||
Junior subordinated debentures | ||||
Other borrowings | 2,198 | |||
Accrued interest payable | ||||
Fair Value, Inputs, Level 3 [Member] | Portion at Fair Value Measurement [Member] | Forward Sales Commitments [Member] | ||||
Assets: | ||||
Commitments | 19 | 16 | ||
Fair Value, Inputs, Level 3 [Member] | Portion at Fair Value Measurement [Member] | Interest Rate Lock Commitments [Member] | ||||
Assets: | ||||
Commitments | $ 41 | $ 30 |
SHARE REPURCHASES (Details)
SHARE REPURCHASES (Details) - $ / shares | 1 Months Ended | 12 Months Ended | |||||||
Oct. 31, 2016 | Apr. 30, 2016 | Mar. 31, 2016 | Feb. 29, 2016 | Dec. 31, 2016 | Nov. 30, 2016 | Jun. 30, 2016 | May 31, 2016 | Jan. 28, 2016 | |
Share Repurchases Details | |||||||||
Number of Shares Authorized to be Repurchased | 327,318 | ||||||||
Number of Shares Purchased | 24,568 | 5,997 | 33,382 | 40,621 | 104,568 | ||||
Average Price Paid per Share | $ 18.10 | $ 17.65 | $ 17.70 | $ 17.04 | $ 17.55 | ||||
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | 222,750 | 247,318 | 286,697 | 222,750 | 222,750 | 253,315 | 247,318 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] $ in Thousands | Feb. 24, 2017USD ($)Number |
No. of Branches Acquired | Number | 2 |
Assets Acquired | $ 147,600 |
Deposit Acquired | 153,000 |
Deposit premium paid | $ 5,700 |
PARENT COMPANY FINANCIAL INF128
PARENT COMPANY FINANCIAL INFORMATION - Condensed Statements of Financial Condition (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Assets: | ||||
Cash and cash equivalents | $ 43,294 | $ 40,650 | $ 58,982 | $ 34,281 |
Other assets | 5,754 | 4,304 | ||
Total assets | 1,292,877 | 1,031,416 | ||
Liabilities and stockholders' equity: | ||||
Junior subordinated notes | 14,433 | 14,433 | ||
Other liabilities | 3,673 | 2,762 | ||
Stockholders equity | 133,068 | 131,469 | $ 107,319 | $ 32,518 |
Total liabilities and stockholders' equity | 1,292,877 | 1,031,416 | ||
Parent Company [Member] | ||||
Assets: | ||||
Cash and cash equivalents | 3,137 | 17,545 | ||
Equity investment in subsidiary | 144,011 | 128,090 | ||
Equity investment in trust | 433 | 433 | ||
Other assets | 508 | 188 | ||
Total assets | 148,089 | 146,256 | ||
Liabilities and stockholders' equity: | ||||
Junior subordinated notes | 14,433 | 14,433 | ||
Other liabilities | 588 | 354 | ||
Stockholders equity | 133,068 | 131,469 | ||
Total liabilities and stockholders' equity | $ 148,089 | $ 146,256 |
PARENT COMPANY FINANCIAL INF129
PARENT COMPANY FINANCIAL INFORMATION - Condensed Statements of Operations (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Total income | $ 40,520 | $ 33,144 | $ 32,445 |
Interest expense | 6,032 | 5,723 | 6,573 |
Loss before income taxes and equity in undistributed income of subsidiary | 9,871 | 7,086 | 8,151 |
Income tax benefit allocated from consolidated income tax return | 3,495 | (16,739) | 2,208 |
Net income (loss) | 6,376 | 23,825 | 5,943 |
Parent Company [Member] | |||
Interest income | 81 | 190 | 78 |
Dividends from subsidiary | 510 | 114 | |
Total income | 591 | 304 | 78 |
Interest expense | 532 | 458 | 509 |
Other | 358 | 259 | 29 |
Total expenses | 890 | 717 | 538 |
Loss before income taxes and equity in undistributed income of subsidiary | (299) | (413) | (460) |
Income tax benefit allocated from consolidated income tax return | 283 | 180 | 180 |
Loss before equity in undistributed income (loss) of subsidiary | (16) | (233) | (280) |
Equity in undistributed income (loss) of subsidiary | 6,392 | 24,058 | 6,223 |
Net income (loss) | $ 6,376 | $ 23,825 | $ 5,943 |
PARENT COMPANY FINANCIAL INF130
PARENT COMPANY FINANCIAL INFORMATION - Condensed Statements of Cash Flows (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net income | $ 6,376 | $ 23,825 | $ 5,943 |
Investing activities: | |||
Net cash used in investing activities | (172,993) | (94,967) | (81,283) |
Cash flows from financing activities: | |||
Proceeds from sale of common stock | 63,651 | 63,651 | |
Purchase of stock | (1,835) | ||
Net cash provided by (used in) financing activities | 159,000 | 66,826 | 102,542 |
Increase in cash and cash equivalents | 2,644 | (18,332) | 24,701 |
Parent Company [Member] | |||
Cash flows from operating activities: | |||
Net income | 6,376 | 23,825 | 5,943 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Equity in undistributed earnings in subsidiaries | (6,392) | (24,058) | (6,223) |
(Increase) decrease in other assets | 55 | (19) | (46) |
Increase (decrease) in other liabilities | 97 | 75 | (1,567) |
Net cash provided by (used in) operating activities | 136 | (177) | (1,893) |
Investing activities: | |||
Investment in subsidiary | (13,486) | (44,581) | |
Net cash used in investing activities | (13,486) | (44,581) | |
Cash flows from financing activities: | |||
Proceeds from sale of common stock | 63,651 | ||
Purchase of stock | (1,922) | ||
Reimbursement from bank subsidiary for share-based compensation | 864 | 70 | |
Net cash provided by (used in) financing activities | (1,058) | 70 | 63,651 |
Increase in cash and cash equivalents | (14,408) | (107) | 17,177 |
Cash and cash equivalents, beginning of year | 17,545 | 17,652 | 475 |
Cash and cash equivalents, end of year | $ 3,137 | $ 17,545 | $ 17,652 |