Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Entity Registrant Name | Wellesley Bancorp, Inc. | |
Trading Symbol | WEBK | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 2,625,899 | |
Entity Central Index Key | 0001526952 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and due from banks | $ 20,595 | $ 7,886 |
Short-term investments | 14,331 | 34,208 |
Total cash and cash equivalents | 34,926 | 42,094 |
Certificates of deposit | 100 | 100 |
Securities available for sale, at fair value | 24,369 | 29,815 |
Federal Home Loan Bank of Boston stock, at cost | 6,202 | 4,906 |
Loans held for sale | 2,089 | 3,354 |
Loans | 863,735 | 842,113 |
Less allowance for loan losses | (8,208) | (7,653) |
Loans, net | 855,527 | 834,460 |
Bank-owned life insurance | 8,063 | 8,005 |
Operating lease, right-of-use asset | 7,489 | 6,473 |
Premises and equipment, net | 3,228 | 3,508 |
Accrued interest receivable | 2,595 | 2,525 |
Net deferred tax asset | 2,911 | 2,713 |
Other assets | 13,416 | 7,265 |
Total assets | 960,915 | 945,218 |
Deposits: | ||
Non-interest-bearing | 152,887 | 139,969 |
Interest-bearing | 582,139 | 612,498 |
Total deposits | 735,026 | 752,467 |
Short-term borrowings | 45,000 | 20,000 |
Long-term borrowings | 72,859 | 74,196 |
Subordinated debt | 9,868 | 9,861 |
Lease liability | 7,578 | 6,543 |
Accrued expenses and other liabilities | 15,278 | 8,700 |
Total liabilities | 885,609 | 871,767 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value; 1,000,000 shares authorized, none issued | 0 | 0 |
Common stock, $0.01 par value; 14,000,000 shares authorized, 2,608,872 and 2,599,105 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 26 | 26 |
Additional paid-in capital | 28,447 | 28,169 |
Retained earnings | 47,011 | 45,625 |
Accumulated other comprehensive income (loss) | 492 | 530 |
Unearned compensation - ESOP | (867) | (899) |
Total stockholders' equity | 75,109 | 73,451 |
Total liabilities and stockholders' equity | $ 960,915 | $ 945,218 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 14,000,000 | 14,000,000 |
Common Stock, Shares, Issued | 2,608,872 | 2,599,105 |
Common Stock, Shares, Outstanding | 2,608,872 | 2,599,105 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Interest and dividend income: | ||
Interest and fees on loans and loans held for sale | $ 9,703 | $ 8,727 |
Debt securities: | ||
Taxable | 162 | 378 |
Tax-exempt | 55 | 82 |
Short-term investments and certificates of deposit | 107 | 164 |
FHLB stock | 74 | 79 |
Total interest and dividend income | 10,101 | 9,430 |
Interest expense: | ||
Deposits | 2,053 | 2,489 |
Short-term borrowings | 171 | 110 |
Long-term debt | 480 | 243 |
Subordinated debt | 157 | 157 |
Total interest expense | 2,861 | 2,999 |
Net interest income | 7,240 | 6,431 |
Provision for loan losses | 555 | 240 |
Net interest income, after provision for loan losses | 6,685 | 6,191 |
Non-interest income: | ||
Customer service fees | 54 | 39 |
Mortgage banking activities | 7 | 28 |
Income on bank-owned life insurance | 58 | 58 |
Wealth management fees | 365 | 434 |
Miscellaneous | 572 | 123 |
Total non-interest income | 1,056 | 682 |
Non-interest expense: | ||
Salaries and employee benefits | 3,196 | 3,040 |
Occupancy and equipment | 915 | 804 |
Data processing | 302 | 297 |
FDIC insurance | 180 | 135 |
Professional fees | 498 | 190 |
Other general and administrative | 472 | 629 |
Total non-interest expenses | 5,563 | 5,095 |
Income before income taxes | 2,178 | 1,778 |
Provision for income taxes | 637 | 476 |
Net income | 1,541 | 1,302 |
Other comprehensive income: | ||
Net unrealized holding (loss) gain on available-for-sale securities | (52) | 858 |
Income tax benefit (expense) | 14 | (215) |
Total other comprehensive (loss) gain income | (38) | 643 |
Comprehensive income | $ 1,503 | $ 1,945 |
Earnings per common share: | ||
Basic | $ 0.61 | $ 0.54 |
Diluted | $ 0.60 | $ 0.52 |
Weighted average shares outstanding: | ||
Basic | 2,510,907 | 2,431,324 |
Diluted | 2,587,643 | 2,523,907 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (loss) [Member] | Unearned Compensation - ESOP [Member] | Total |
Balance at Dec. 31, 2018 | $ 25 | $ 26,462 | $ 40,203 | $ (533) | $ (1,027) | $ 65,130 |
Balance (in shares) at Dec. 31, 2018 | 2,525,611 | |||||
Comprehensive income | 1,302 | 643 | 1,945 | |||
Restricted stock awards grant (in shares) | 11,500 | |||||
Stock options exercised | 48 | 48 | ||||
Stock options exercised (shares) | 2,553 | |||||
Restricted stock forfeitures (shares) | (2,000) | |||||
Dividends paid to common stockholders | (140) | (140) | ||||
Share-based compensation- equity incentive plan | 102 | 102 | ||||
ESOP shares committed to be allocated | 64 | 32 | 96 | |||
Balance at Mar. 31, 2019 | $ 25 | 26,676 | 41,365 | 110 | (995) | 67,181 |
Balance (in shares) at Mar. 31, 2019 | 2,537,664 | |||||
Balance at Dec. 31, 2019 | $ 26 | 28,169 | 45,625 | 530 | (899) | 73,451 |
Balance (in shares) at Dec. 31, 2019 | 2,599,105 | |||||
Comprehensive income | 1,541 | (38) | 1,503 | |||
Stock options exercised | 162 | 162 | ||||
Stock options exercised (shares) | 10,527 | |||||
Common stock repurchased for restricted stock awards | (34) | (34) | ||||
Common stock repurchased for restricted stock awards (in shares) | (760) | |||||
Dividends paid to common stockholders | (155) | (155) | ||||
Share-based compensation- equity incentive plan | 61 | 61 | ||||
ESOP shares committed to be allocated | 89 | 32 | 121 | |||
Balance at Mar. 31, 2020 | $ 26 | $ 28,447 | $ 47,011 | $ 492 | $ (867) | $ 75,109 |
Balance (in shares) at Mar. 31, 2020 | 2,608,872 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY | ||
Dividends paid to common stockholders, per share | $ 0.06 | $ 0.055 |
ESOP shares committed to be allocated, Shares | 3,209 | 3,209 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 1,541 | $ 1,302 |
Adjustments to reconcile net income to net cash provided (used) by operating activities: | ||
Provision for loan losses | 555 | 240 |
Depreciation and amortization | 211 | 187 |
Net amortization of securities | 15 | 42 |
Gains on sales of securities, net | 0 | 0 |
Principal balance of loans sold | 6,129 | 1,228 |
Loans originated for sale | (4,864) | (1,228) |
Accretion of net deferred loan fees | (162) | (142) |
Amortization of subordinated debt issuance costs | 7 | 8 |
Income on bank-owned life insurance | (58) | (58) |
Deferred income tax provision | (111) | 96 |
ESOP expense | 121 | 96 |
Share-based compensation | 61 | 102 |
Net change in other assets and liabilities | 579 | (1,524) |
Net cash provided by operating activities | 4,024 | 349 |
Cash flows from investing activities: | ||
Maturities, prepayments and calls | 5,379 | 3,563 |
Purchase (redemption) of Federal Home Loan Bank stock | (1,296) | 905 |
Net loan originations | (21,460) | (41,599) |
Additions to premises and equipment | (10) | (116) |
Net cash used by investing activities | (17,387) | (37,247) |
Cash flows from financing activities: | ||
Net increase (decrease) in deposits | (17,441) | 32,992 |
Proceeds from issuance of long-term debt | 7,000 | 3,000 |
Repayments of long-term debt | (8,337) | (8,331) |
Increase in short-term borrowings | 25,000 | 3,000 |
Stock options exercised | 162 | 48 |
Common stock repurchased | (34) | 0 |
Cash dividends paid on common stock | (155) | (140) |
Net cash provided by financing activities | 6,195 | 30,569 |
Net change in cash and cash equivalents | (7,168) | (6,329) |
Cash and cash equivalents at beginning period | 42,094 | 42,650 |
Cash and cash equivalents at end of period | 34,926 | 36,321 |
Supplementary information: | ||
Interest paid | 2,486 | 2,718 |
Income taxes paid | $ 0 | $ 330 |
BASIS OF PRESENTATION AND CONSO
BASIS OF PRESENTATION AND CONSOLIDATION | 3 Months Ended |
Mar. 31, 2020 | |
BASIS OF PRESENTATION AND CONSOLIDATION | |
BASIS OF PRESENTATION AND CONSOLIDATION | NOTE 1 – BASIS OF PRESENTATION AND CONSOLIDATION On December 5, 2019, Cambridge Bancorp ("Cambridge") and Wellesley Bancorp, Inc. (the "Company") issued a joint press release announcing that Cambridge and the Company have entered into an Agreement and Plan of Merger (the "Merger Agreement") pursuant to which the Company will merge with and into Cambridge, with Cambridge as the surviving entity (the "Merger"). Under the terms of the Merger Agreement, which has been approved by the boards of directors and stockholders of both companies, stockholders of the Company will receive 0.580 shares of Cambridge common stock for each share of Wellesley common stock. The transaction is subject to customary closing conditions and is expected to close during the second quarter of 2020. The accompanying unaudited interim consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Wellesley Bank (the “Bank”), the principal operating entity, and its wholly-owned subsidiaries: Wellesley Securities Corporation, which engages in the business of buying, selling and dealing in securities exclusively on its own behalf; Wellesley Investment Partners, LLC, formed to provide investment management services for individuals, not-for-profit entities and businesses; and Central Linden, LLC, to hold, manage and sell foreclosed real estate. All significant intercompany balances and transactions have been eliminated in consolidation. Assets under management at Wellesley Investment Partners, LLC are not included in these consolidated financial statements because they are not assets of the Company. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information, and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. The accompanying consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2019 Annual Report on Form 10-K. The results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 or for any other period. |
LOAN POLICIES
LOAN POLICIES | 3 Months Ended |
Mar. 31, 2020 | |
LOAN POLICIES | |
LOAN POLICIES | NOTE 2 – LOAN POLICIES The loan portfolio consists of real estate, commercial and other loans to the Company’s customers in our primary market areas in eastern Massachusetts. The ability of the Company’s debtors to honor their contracts is dependent upon the economy in general and the state of real estate and construction sectors within our markets. Loans that management has the intent and ability to hold for the foreseeable future, or until maturity or pay-off, are reported at their outstanding unpaid principal balances adjusted for charge-offs, the allowance for loan losses, and any deferred loan origination fees or costs. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method. Interest is generally not accrued on loans that are identified as impaired or loans which are ninety days or more past due. Past due status is based on the contractual terms of the loan. Interest income previously accrued on such loans is reversed against current period interest income. Interest income on non-accrual loans is recognized only to the extent of interest payments received and is first applied to the outstanding principal balance when collectibility of principal is in doubt. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured through sustained payment performance for at least six months. Allowance for loan losses The allowance for loan losses is established through a provision for loan losses charged to earnings as losses are estimated to occur. Loan losses are charged against the allowance when management believes the uncollectibility of the loan balance is confirmed. Subsequent recoveries are credited to the allowance. The allowance for loan losses is evaluated on a regular basis by management. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The allowance consists of general, allocated and unallocated components. General component The general component is based on the following loan segments: residential real estate, commercial real estate, construction, commercial, home equity lines of credit and other consumer. Management considers a rolling average of historical losses for each segment based on a time frame appropriate to capture relevant loss data for each loan segment, generally three and 10 years. This historical loss factor is adjusted for the following qualitative factors: levels/trends in delinquencies; trends in volume, concentrations and terms of loans; level of collateral protection; effects of changes in risk selection and underwriting standards; experience/ability/depth of lending management and staff; and national and local economic trends and conditions. There were no significant changes to the Company’s policies or methodology pertaining to the general component of the allowance during 2020 or 2019. The qualitative factor adjustments are determined based on the various risk characteristics of each loan segment. Risk characteristics relevant to each portfolio segment are as follows: Residential real estate – The Company generally does not originate loans with a loan-to-value ratio greater than 80 percent and does not originate subprime loans. Most loans in this segment are collateralized by one-to-four family residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality of this segment. Commercial real estate – Loans in this segment are primarily income-producing properties in the Company’s primary market areas in eastern Massachusetts. The underlying cash flows generated by the properties may be adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which, in turn, will have an effect on the credit quality in this segment. Management typically obtains rent rolls annually and continually monitors the cash flows of these loans. Construction – Loans in this segment include speculative construction loans primarily on residential properties for which payment is derived from the sale of the property. Credit risk is affected by cost overruns, time to sell at an adequate price, and market conditions. Residential construction loans in this segment also include loans to build one-to-four family owner-occupied properties which are subject to the same credit quality factors as residential real estate. Commercial – Loans in this segment are made to businesses and are generally secured by assets of the business. Repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality in this segment. Home equity lines of credit – Loans in this segment are collateralized by one-to-four family residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment. Other consumer – Loans in this segment are generally unsecured and repayment is dependent on the credit quality of the individual borrower. Allocated component The allocated component relates to loans that are classified as impaired. Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the fair value of the loan or, if the loan is collateral dependent, by the fair value of the collateral less estimated costs to sell. An allowance is established when the discounted cash flows or collateral value of the impaired loan are lower than the carrying value of that loan. Large groups of smaller-balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify performing individual residential and consumer loans for impairment disclosures, unless such loans are subject to a troubled debt restructuring agreement. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due, according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. The Company periodically may agree to modify the contractual terms of loans. When a loan is modified and a concession is made to a borrower experiencing financial difficulty, the modification is considered a troubled debt restructuring ("TDR"). All TDRs are initially classified as impaired. Unallocated component An unallocated component is maintained to cover additional uncertainties in management’s estimation of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating allocated and general reserves in the portfolio. |
COMPREHENSIVE INCOME
COMPREHENSIVE INCOME | 3 Months Ended |
Mar. 31, 2020 | |
COMPREHENSIVE INCOME | |
COMPREHENSIVE INCOME | NOTE 3 – COMPREHENSIVE INCOME Accounting principles generally require that recognized revenue, expenses, and gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the stockholders’ equity section of the consolidated balance sheets, such items, along with net income, are components of comprehensive income/loss. The components of accumulated other comprehensive income (loss) and related tax effects are as follows: March 31, December 31, 2020 2019 (In thousands) Unrealized holding gains (losses) on securities available for sale $ 644 $ 696 Tax effect (152) (166) Net-of tax amount $ 492 $ 530 |
RECENT ACCOUNTING AND REGULATOR
RECENT ACCOUNTING AND REGULATORY PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2020 | |
RECENT ACCOUNTING AND REGULATORY PRONOUNCEMENTS | |
RECENT ACCOUNTING AND REGULATORY PRONOUNCEMENTS | NOTE 4 – RECENT ACCOUNTING AND REGULATORY PRONOUNCEMENTS In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure expected credit losses based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. Entities will now use forward-looking information to better form their credit loss estimates. Credit losses on available-for-sale debt securities should be measured in a manner similar to current GAAP; however, recognized credit losses will be presented as an allowance rather than as a write-down. This ASU was scheduled to be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. However, the FASB recently voted to propose delaying the standard by three years for smaller reporting companies, which included Wellesley Bank. The Board of Directors voted to delay implementation of the standard. |
SECURITIES AVAILABLE FOR SALE
SECURITIES AVAILABLE FOR SALE | 3 Months Ended |
Mar. 31, 2020 | |
SECURITIES AVAILABLE FOR SALE | |
SECURITIES AVAILABLE FOR SALE | NOTE 5 – SECURITIES AVAILABLE FOR SALE The amortized cost and fair value of securities available for sale, with gross unrealized gains and losses, follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) March 31, 2020 Residential mortgage-backed securities: Government National Mortgage Association $ 2,694 $ 88 $ (44) $ 2,738 Government-sponsored enterprises 1,181 20 (4) 1,197 SBA and other asset-backed securities 3,805 138 (25) 3,918 State and municipal bonds 7,433 355 — 7,788 Government-sponsored enterprise obligations 1,864 40 — 1,904 Corporate bonds 6,748 113 (37) 6,824 $ 23,725 $ 754 $ (110) $ 24,369 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) December 31, 2019 Residential mortgage-backed securities: Government National Mortgage Association $ 2,770 $ 61 $ (16) $ 2,815 Government-sponsored enterprises 2,224 51 (9) 2,266 SBA and other asset-backed securities 4,082 112 (2) 4,192 State and municipal bonds 7,446 375 — 7,821 Government-sponsored enterprise obligations 4,000 — (6) 3,994 Corporate bonds 8,597 139 (9) 8,727 $ 29,119 $ 738 $ (42) $ 29,815 There were no sales of available-for-sale securities for the three months ended March 31, 2020 and 2019. The amortized cost and fair value of debt securities by contractual maturity at March 31, 2020 are as follows: Amortized Fair Cost Value (In thousands) Within 1 year $ — $ — After 1 year to 5 years 6,654 6,723 After 5 years to 10 years 7,019 7,316 After 10 years 2,372 2,477 16,045 16,516 Mortgage- and asset-backed securities 7,680 7,853 $ 23,725 $ 24,369 Expected maturities may differ from contractual maturities because the issuer, in certain instances, has the right to call or prepay obligations with or without call or prepayment penalties. 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: Less Than Twelve Months Over Twelve Months Gross Gross Unrealized Fair Unrealized Fair Losses Value Losses Value (In thousands) March 31, 2020 Residential mortgage-backed securities: Government National Mortgage Association $ — $ — $ (44) $ 876 Government-sponsored enterprises (4) 359 — — SBA and other asset-backed securities (5) 856 (20) 259 Corporate bonds (3) 997 (34) 974 $ (12) $ 2,212 $ (98) $ 2,109 Less Than Twelve Months Over Twelve Months Gross Gross Unrealized Fair Unrealized Fair Losses Value Losses Value (In thousands) December 31, 2019 Residential mortgage-backed securities: Government National Mortgage Association $ — $ — $ (16) $ 908 Government-sponsored enterprises — — (9) 342 SBA and other asset-backed securities — — (2) 290 Government-sponsored enterprise obligations (6) 2,994 — — Corporate bonds — — (9) 1,000 $ (6) $ 2,994 $ (36) $ 2,540 Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market conditions warrant such evaluations. At March 31, 2020, various debt securities have unrealized losses with aggregate depreciation of 2.5% from their aggregate amortized cost basis. These unrealized losses relate principally to the effect of interest rate changes on the fair value of debt securities and not an increase in credit risk of the issuers. As the Company does not intend to sell the securities and it is more likely than not that the Company will not be required to sell the securities before recovery of their amortized cost, which may be maturity, the Company does not consider these securities to be other-than-temporarily impaired at March 31, 2020. |
LOANS AND ALLOWANCE FOR LOAN LO
LOANS AND ALLOWANCE FOR LOAN LOSSES | 3 Months Ended |
Mar. 31, 2020 | |
LOANS AND ALLOWANCE FOR LOAN LOSSES | |
LOANS AND ALLOWANCE FOR LOAN LOSSES | NOTE 6 – LOANS AND ALLOWANCE FOR LOAN LOSSES A summary of the ending balances of loans is as follows: March 31, December 31, 2020 2019 (In thousands) Real estate loans: Residential – fixed $ 89,954 $ 77,679 Residential – variable 311,826 310,646 Commercial 180,393 181,928 Construction 139,265 138,007 721,438 708,260 Commercial loans: Secured 100,276 92,347 Unsecured 4,818 4,934 105,094 97,281 Consumer loans: Home equity lines of credit 37,456 36,693 Other 126 171 37,582 36,864 Total loans 864,114 842,405 Net deferred originations costs (379) (292) Total loans, net of deferred fees 863,735 842,113 Less: Allowance for loan losses (8,208) (7,653) Loans, net $ 855,527 $ 834,460 The following table summarizes the changes in the allowance for loan losses by portfolio segment for the three months ended March 31, 2020 and 2019: Residential Commercial Home Other Real Estate Real Estate Construction Commercial Equity Consumer Unallocated Total (In thousands) Three Months Ended March 31, 2020 Allowance at December 31, 2019 $ 2,100 $ 1,626 $ 1,823 $ 1,864 $ 235 $ 4 $ 1 $ 7,653 Provision (credit) for loan losses 239 162 266 (147) 27 (1) 9 555 Allowance at March 31, 2020 $ 2,339 $ 1,788 $ 2,089 $ 1,717 $ 262 $ 3 $ 10 $ 8,208 Three Months Ended March 31, 2019 Allowance at December 31, 2018 $ 2,216 $ 1,602 $ 1,462 $ 1,124 $ 257 $ 3 $ 74 $ 6,738 Provision (credit) for loan losses (14) (241) 347 157 5 — (14) 240 Allowance at March 31, 2019 $ 2,202 $ 1,361 $ 1,809 $ 1,281 $ 262 $ 3 $ 60 $ 6,978 Further information pertaining to the allowance for loan losses is as follows: Residential Commercial Home Other Real Estate Real Estate Construction Commercial Equity Consumer Unallocated Total (In thousands) March 31, 2020 Allowance related to impaired loans $ — $ — $ — $ — $ — $ — $ — $ — Allowance related to non-impaired loans 2,339 1,788 2,089 1,717 262 3 10 8,208 Total allowance $ 2,339 $ 1,788 $ 2,089 $ 1,717 $ 262 $ 3 $ 10 $ 8,208 Impaired loan balances $ 715 $ 548 $ — $ 553 $ 500 $ — $ — $ 2,316 Non-impaired loan balances 401,065 179,845 139,265 104,541 36,956 126 — 861,798 Total loans $ 401,780 $ 180,393 $ 139,265 $ 105,094 $ 37,456 $ 126 $ — $ 864,114 December 31, 2019 Allowance related to impaired loans $ — $ — $ — $ 350 $ — $ — $ — $ 350 Allowance related to non-impaired loans 2,100 1,626 1,823 1,514 235 4 1 7,303 Total allowance $ 2,100 $ 1,626 $ 1,823 $ 1,864 $ 235 $ 4 $ 1 $ 7,653 Impaired loan balances $ 721 $ 2,565 $ — $ 1,993 $ 500 $ — $ — $ 5,779 Non-impaired loan balances 387,604 179,363 138,007 95,288 36,193 171 — 836,626 Total loans $ 388,325 $ 181,928 $ 138,007 $ 97,281 $ 36,693 $ 171 $ — $ 842,405 The following is a summary of past due and non-accrual loans at March 31, 2020 and December 31, 2019: Past Due 90 30‑59 Past Due 90 Days or More Days 60‑89 Days Days or Total and Still Non-accrual Past Due Past Due More Past Due Accruing Loans (In thousands) March 31, 2020 Residential real estate $ 532 $ — $ — $ 532 $ — $ 558 Commercial real estate 3,434 — 548 3,982 — 548 Home equity lines of credit 118 — 500 618 — 500 Total $ 4,084 $ — $ 1,048 $ 5,132 $ — $ 1,606 December 31, 2019 Residential real estate $ — $ — $ — $ — $ — $ 562 Commercial real estate — — 548 548 — 548 Commercial loans — — — — — 883 Home equity lines of credit — — 500 500 — 500 Total $ — $ — $ 1,048 $ 1,048 $ — $ 2,493 The following is a summary of impaired loans: March 31, 2020 December 31, 2019 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance (In thousands) Impaired loans without a valuation allowance: Residential real estate $ 715 $ 732 $ — $ 721 $ 738 $ — Commercial real estate 548 674 — 2,565 2,691 — Commercial loans 553 553 — 1,110 1,110 — Home equity lines of credit 500 500 — 500 500 — Total 2,316 2,459 — 4,896 5,039 — Impaired loans with a valuation allowance: Commercial loans — — — 883 883 350 Total impaired loans $ 2,316 $ 2,459 $ — $ 5,779 $ 5,922 $ 350 Further information pertaining to impaired loans follows: Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Interest Interest Average Interest Income Average Interest Income Recorded Income Recognized Recorded Income Recognized Investment Recognized on Cash Basis Investment Recognized on Cash Basis (In thousands) Residential real estate $ 718 $ 9 $ 6 $ 744 $ 6 $ 4 Commercial real estate 1,053 8 — 2,809 33 8 Commercial loans 1,386 27 15 — — — Home equity lines of credit 500 — — — — — Total $ 3,657 $ 44 $ 21 $ 3,553 $ 39 $ 12 There were no new troubled debt restructurings recorded during the three months ended March 31, 2020 and 2019. There were no TDRs that defaulted, generally considered 90 days past due or longer, during the three months ended March 31, 2020 and 2019, and for which default was within one year of the restructure date. TDRs did not have a material impact on the allowance for loan losses for the three months ended March 31, 2020 and 2019. Credit Quality Information The Company utilizes an eleven-grade internal loan rating system for commercial real estate, construction and commercial loans. Loans rated 1‑4: Loans in these categories are considered “pass” rated loans with low to average risk. Loans rated 5: Loans in this category are considered “special mention.” These loans are starting to show signs of potential weakness and are being closely monitored by management. Loans rated 6: Loans in this category are considered “substandard.” Generally, a loan is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligors and/or the collateral pledged. There is a distinct possibility that the Company will sustain some loss if the weakness is not corrected. Loans rated 7: Loans in this category are considered “doubtful.” Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable. Loans rated 8: Loans in this category are considered uncollectible “loss” and of such little value that their continuance as loans is not warranted. Loans rated 9: Loans in this category only include commercial loans under $25 thousand with no other outstandings or relationships with the Company. Loans rated 10: Loans in this category include loans which otherwise require rating but which have not been rated, or loans for which the Company’s loan policy does not require rating. Loans rated 11: Loans in this category include credit commitments/relationships that cannot be rated due to a lack of financial information or inaccurate financial information. If within 60 days of the assignment of an 11 rating, information is still not available to allow a standard rating, the credit will be rated 6. On an annual basis, or more often if needed, the Company formally reviews the ratings on all commercial real estate, construction and commercial loans. During each calendar year, the Company engages an independent third party to review a significant portion of loans within these segments. Management uses the results of these reviews as part of its annual review process. On a monthly basis, the Company reviews the residential real estate and consumer loan portfolio for credit quality primarily through the use of delinquency reports. The following table presents the Company’s loans by risk rating: March 31, 2020 December 31, 2019 Commercial Commercial Real Estate Construction Commercial Total Real Estate Construction Commercial Total (In thousands) Loans rated 1‑4 $ 178,979 $ 139,265 $ 104,541 $ 422,785 $ 178,488 $ 138,007 $ 95,287 $ 411,782 Loans rated 5 866 — — 866 875 — — 875 Loans rated 6 — — 553 553 2,017 — 1,994 4,011 Loans rated 7 548 — — 548 548 — — 548 Total $ 180,393 $ 139,265 $ 105,094 $ 424,752 $ 181,928 $ 138,007 $ 97,281 $ 417,216 |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 3 Months Ended |
Mar. 31, 2020 | |
DERIVATIVE INSTRUMENTS | |
DERIVATIVE INSTRUMENTS | NOTE 7 - DERIVATIVE INSTRUMENTS Certain derivative instruments do not meet the requirements to be accounted for as hedging instruments. These undesignated derivative instruments are recognized on the consolidated balance sheet at fair value, with changes in the fair value recorded in miscellaneous income. Derivative Loan Commitments Mortgage loan commitments are referred to as derivative loan commitments if the loan that will result from exercise of the commitment will be held for sale upon funding. The Company enters into commitments to fund residential mortgage loans at specified rates and times in the future, with the intention that these loans will subsequently be sold in the secondary market. Outstanding derivative loan commitments expose the Company to the potential for changes in the fair value of the underlying loans as interest rates change, along with the value of the loan commitment. If interest rates increase, the value of these loan commitments will decrease. Conversely, if interest rates decrease, the value of these loan commitments will increase. The notional amount of undesignated derivative loan commitments was $320 thousand at March 31, 2020. The fair value of these commitments was a liability of $9 thousand. The notional amount of undesignated derivative loan commitments was $350 thousand at December 31, 2019. The fair value of these commitments was a liability of $1 thousand at December 31, 2019. Forward Loan Sale Commitments To protect against the price risk inherent in derivative loan commitments, the Company utilizes “best efforts” forward loan sale commitments to mitigate the risk of potential decreases in the values of loans that would result from the exercise of the derivative loan commitments. With a “best efforts” contract, the Company commits to deliver an individual mortgage loan of a specified principal amount and quality to an investor if the loan to the underlying borrower closes. Generally, the price the investor will pay the seller for an individual loan is specified prior to the loan being funded. The Company expects that these forward loan sale commitments will experience changes in fair value opposite to the change in fair value of derivative loan commitments. The notional amount of undesignated forward loan sale commitments was $2.5 million at March 31, 2020. The fair value of these commitments was an asset of $34 thousand at March 31, 2020. . The notional amount of undesignated forward loan sale commitments was $3.7 million at December 31, 2019. The fair value of these commitments was a liability of $4 thousand at December 31, 2019. Interest Rate Swap Agreements The Company has entered into derivative financial instruments in the normal course of business to manage exposure to fluctuations in interest rates for its commercial customers. Typically these agreements have generally been limited to loan level interest rate swap agreements, which are entered into with borrowers and a third party. Typically, the Company enters into a floating-rate loan and a fixed-rate swap directly with a loan customer. The Company offsets the fixed-rate interest rate risk with an identical offsetting swap with a swap dealer. This is referred to as a “back-to-back” swap structure. As this structure has equal and offsetting interest rate contracts, fair value gains and losses recorded each month are offsetting. The notional amounts are amounts on which calculations, payments, and the value of the derivatives are based. Notional amounts do not represent direct credit exposures. The primary risk associated with these transactions is the ability of the counterparties to meet the terms of the contract. The fair value of the derivative instruments is reflected on the Company’s consolidated balance sheet as other assets and other liabilities as appropriate. At March 31, 2020, cash in the amount of $11.7 million is pledged as collateral by the Company to its third-party financial institution counterparty. Changes in fair values are recorded in miscellaneous income in the consolidated statements of comprehensive income. There is no credit valuation adjustment at March 31, 2020. A summary of the interest rate swaps is as follows: With commercial With third-party loan borrowers financial institutions March 31, December 31, March 31, December 31, 2020 2019 2020 2019 (dollars in thousands) Notional amount $ 88,152 $ 71,941 $ 88,152 $ 71,941 Receive (pay) fixed rate weighted average 4.25 % 4.43 % (4.25) % (4.43) % Receive (pay) variable rate weighted average (3.01) % (3.79) % 3.01 % 3.79 % Weighted average remaining years 12.6 years 11.0 years 12.6 years 11.0 years Unrealized fair value gain (loss) $ 10,181 $ 3,472 $ (10,181) $ (3,472) |
FAIR VALUES OF FINANCIAL INSTRU
FAIR VALUES OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2020 | |
FAIR VALUES OF FINANCIAL INSTRUMENTS | |
FAIR VALUES OF FINANCIAL INSTRUMENTS | NOTE 8 – FAIR VALUES OF FINANCIAL INSTRUMENTS Fair value hierarchy The Company groups its assets measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Level 1 – Valuation is based on quoted market prices in active exchange markets for identical assets and liabilities. Valuations are obtained from readily available pricing sources. Level 2 – Valuation is based on observable inputs other than Level 1 prices, such as quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities. Valuations are obtained from readily available pricing sources. Level 3 – Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. Level 3 assets include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as those for which the determination of fair value requires significant management judgment or estimation. Transfers between levels are recognized at the end of a reporting period, if applicable. Determination of fair value The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances there are no quoted market prices for the Company’s various assets and liabilities. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the assets and liabilities. Assets and liabilities measured at fair value on a recurring basis Assets and liabilities measured at fair value on a recurring basis at March 31, 2020 and December 31, 2019 are summarized below. Total Level 1 Level 2 Level 3 Fair Value (In thousands) March 31, 2020 Assets Securities available for sale $ — $ 22,841 $ 1,528 $ 24,369 Interest rate swap agreements — 10,181 — 10,181 Forward loan sale commitments — — 34 34 $ — $ 33,022 $ 1,562 $ 34,584 Liabilities Interest rate swap agreements $ — $ 10,181 $ — $ 10,181 Derivative loan commitments — — 9 9 $ — $ 10,181 $ 9 $ 10,190 December 31, 2019 Assets Securities available for sale $ — $ 28,293 $ 1,522 $ 29,815 Interest rate swap agreements — 3,472 — 3,472 $ — $ 31,765 $ 1,522 $ 33,287 Liabilities Derivative loan commitments $ — $ — $ 1 $ 1 Forward loan sale commitments — — 4 4 Interest rate swap agreements — 3,472 — 3,472 $ — $ 3,472 $ 5 $ 3,477 Fair value measurements for securities available for sale are obtained from a third-party pricing service and are not adjusted by management. All securities are measured at fair value in Level 2 based on valuation models that consider standard input factors such as observable market data, benchmark yields, interest rate volatilities, broker/dealer quotes, credit spreads and new issue data. The fair values of interest rate swap agreements are based on a valuation model that uses primarily observable inputs, such as benchmark yield curves and interest rates and also the value associated with the counterparty risk. Credit risk adjustments consider factors such as the likelihood of default by the Company and its counterparties, its net exposure and remaining contractual life. The fair value of forward loan sale commitments and derivative loan commitments are based on fair values of the underlying mortgage loans, including servicing values as applicable. The fair value of derivative loan commitments also considers the probability of such commitments being exercised. Assets measured at fair value on a non-recurring basis The Company may also be required, from time to time, to measure certain other financial assets at fair value on a non-recurring basis in accordance with generally accepted accounting principles. These adjustments to fair value usually result from application of lower-of-cost-or-market (“LOCOM”) accounting or write-downs of individual assets. Fair values for loans held for sale are based on commitments in effect from investors or prevailing market rates. March 31, 2020 December 31, 2019 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (In thousands) Loans held for sale $ — $ — $ 2,089 $ — $ — $ 3,354 There were no liabilities measured at fair value on a non-recurring basis at March 31, 2020 and December 31, 2019. Summary of fair values of financial instruments The estimated fair values and related carrying amounts of the Company’s financial instruments are outlined in the table below. Certain financial instruments and all nonfinancial instruments are excluded from disclosure requirements. Accordingly, the aggregate fair value amounts presented herein may not necessarily represent the underlying fair value of the Company. Fair Value Carrying Amount Level 1 Level 2 Level 3 Total (In thousands) March 31, 2020 Financial assets: Cash and cash equivalents $ 34,926 $ 34,926 $ — $ — $ 34,926 Certificates of deposit 100 100 — — 100 Securities available for sale 24,369 — 22,841 1,528 24,369 FHLB stock 6,202 — — 6,202 6,202 Loans held for sale 2,089 — — 2,089 2,089 Loans, net 855,527 — — 857,026 857,026 Accrued interest receivable 2,595 — — 2,595 2,595 Interest rate swap agreements 10,181 — 10,181 — 10,181 Forward loan sale commitments 34 — — 34 34 Financial liabilities: Deposits $ 735,026 $ — $ — $ 736,809 $ 736,809 Short-term borrowings 45,000 — 45,000 — 45,000 Long-term debt 72,859 — 74,716 — 74,716 Subordinated debt 9,868 — — 9,812 9,812 Accrued interest payable 506 — — 506 506 Interest rate swap agreements 10,181 — 10,181 — 10,181 Derivative loan commitments 9 — — 9 9 December 31, 2019 Financial assets: Cash and cash equivalents $ 42,094 $ 42,094 $ — $ — $ 42,094 Certificates of deposit 100 100 — — 100 Securities available for sale 29,815 — 28,293 1,522 29,815 FHLB stock 4,906 — — 4,906 4,906 Loans held for sale 3,354 — — 3,354 3,354 Loans, net 834,460 — — 839,084 839,084 Accrued interest receivable 2,525 — — 2,525 2,525 Interest rate swap agreements — — Financial liabilities: Deposits $ 752,467 $ — $ — $ 752,699 $ 752,699 Short-term borrowings 20,000 — 20,000 — 20,000 Long-term debt 74,196 — 75,256 — 75,256 Subordinated debt 9,861 — — 9,788 9,788 Interest rate swap agreements 3,472 — 3,472 — 3,472 Accrued interest payable 692 — — 692 692 Derivative loan commitments 1 — — 1 1 Forward loan sale commitments 4 — — 4 4 |
EMPLOYEE STOCK OWNERSHIP PLAN
EMPLOYEE STOCK OWNERSHIP PLAN | 3 Months Ended |
Mar. 31, 2020 | |
EMPLOYEE STOCK OWNERSHIP PLAN | |
EMPLOYEE STOCK OWNERSHIP PLAN | NOTE 9 – EMPLOYEE STOCK OWNERSHIP PLAN The Bank maintains an Employee Stock Ownership Plan (the “ESOP”) to provide eligible employees the opportunity to own Company stock. This plan is a tax-qualified retirement plan for the benefit of all Company employees. Contributions are allocated to eligible participants on the basis of compensation, subject to federal tax limits. The Company granted a loan to the ESOP to purchase shares of the Company’s common stock on the closing date of the Company’s mutual-to-stock conversion in 2012. As of March 31, 2020, the ESOP held 174,852 shares or 6.7% of the common stock outstanding on that date. The loan is payable annually over 15 years at the rate of 3.25% per annum. The loan can be prepaid without penalty. Loan payments are expected to be funded by cash contributions from the Bank. The loan is secured by the shares purchased, which are held in a suspense account for allocation among participants as the loan is repaid. Cash dividends paid on allocated shares are reinvested into shares to participants and cash dividends paid on unallocated shares will be used to repay the outstanding debt of the ESOP. Shares used as collateral to secure the loan are released and available for allocation to eligible employees as the principal and interest on the loan is paid. Shares held by the ESOP at March 31, 2020 include the following: Allocated 84,984 Committed to be allocated 3,209 Unallocated 86,659 174,852 The fair value of unallocated shares was $2.4 million at March 31, 2020. Total compensation expense recognized in connection with the ESOP for the three months ended March 31, 2020 and 2019 was $121 thousand and $96 thousand, respectively. |
EQUITY INCENTIVE PLANS
EQUITY INCENTIVE PLANS | 3 Months Ended |
Mar. 31, 2020 | |
EQUITY INCENTIVE PLANS | |
EQUITY INCENTIVE PLANS | NOTE 10 – EQUITY INCENTIVE PLANS Under the Company’s 2016 Equity Incentive Plan, the Company may grant restricted stock awards to its employees and directors for up to 75,000 shares of its common stock. A restricted stock award (the “award”) is a grant of shares of Company common stock for no consideration, subject to a vesting schedule or the satisfaction of market conditions or performance criteria. Awarded shares are held in reserve for each grantee by the Company’s transfer agent, and will be issued from previously authorized but unissued shares upon vesting. The fair value of the stock awards, based on the market price at the grant date, will be recognized over the five-year vesting period. At March 31, 2020,there remain 20,550 shares available to award under the Plan. Under the Company’s 2012 Equity Incentive Plan the Company granted stock options to its employees and directors in the form of incentive stock options and non-qualified stock options totaling 231,894 shares of its common stock. The exercise price of each stock option was not less than the fair market value of the Company’s common stock on the date of grant, and the maximum term of each option is 10 years from the date of each award. The vesting period was five years from the date of grant, with vesting at 20% per year. Under the 2012 Equity Incentive Plan, the Company also granted stock awards to management, employees and directors. Awarded shares are held in reserve for each grantee by the Company’s transfer agent, and were issued from previously authorized but unissued shares upon vesting. The fair value of the stock awards, based on the market price at the grant date, is recognized over the five-year vesting period. The Company’s 2012 Equity Incentive Plan was terminated upon approval of the 2016 Equity Incentive Plan. Stock Options A summary of option activity under the 2012 Equity Incentive Plan for the three months ended March 31, 2020 is presented below: Outstanding Weighted Average Weighted Remaining Aggregate Average Contractual Intrinsic Shares Exercise Price Term Value (In thousands) (In years) (In thousands) Balance at January 1, 2020 124 $ 16.09 Exercised (10) 15.35 Balance at March 31, 2020 114 $ 15.82 $ 1,324 Exercisable at March 31, 2020 112 $ 15.78 $ 1,337 Non-vested Weighted Average Grant Date Shares Fair Value (In thousands) Balance at January 1, 2020 1 $ 19.14 Balance at March 31, 2020 1 $ 19.14 For the three months ended March 31, 2020 and 2019, compensation expense applicable to the stock options was $1 thousand and $7 thousand, respectively. There was no recognized tax benefit related to this expense for the period ended March 31, 2020 and March 31, 2019, respectively. Unrecognized compensation expense for non-vested stock options totaled $3 thousand as of March 31, 2020, which will be recognized over the remaining weighted average vesting period of 0.5 years. Stock Awards There were no restricted stock awards granted for the three months ended March 31, 2020. The following table presents the activity in non-vested stock awards under the equity incentive plans for the three months ended March 31, 2020: Number of Grant-date Shares Fair Value (In thousands) Balance at January 1, 2020 28 $ 23.97 Restricted shares vested (6) 28.25 Balance at March 31, 2020 22 $ 26.48 For the three months ended March 31, 2019, there were 11,500 restricted stock awards granted with a weighted average grant date fair value of $28.25 For the three months ended March 31, 2020 and 2019, compensation expense applicable to the stock awards was $60 thousand and $95 thousand, respectively, and the recognized tax benefit related to this expense was $17 thousand and $27 thousand, respectively. Unrecognized compensation expense for non-vested restricted stock totaled $484 thousand as of March 31, 2020, which will be recognized over the remaining weighted average vesting period of 2.24 years. |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 3 Months Ended |
Mar. 31, 2020 | |
EARNINGS PER COMMON SHARE | |
EARNINGS PER COMMON SHARE | NOTE 11 – EARNINGS PER COMMON SHARE Basic earnings per share represents net income available to common stockholders divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Unallocated ESOP shares are not deemed outstanding for earnings per share calculations. Under the Company’s 2012 and 2016 Equity Incentive Plans, stock awards contain non-forfeitable dividend rights. Accordingly, these shares are considered outstanding for computation of basic earnings per share. Potential common shares that may be issued by the Company relate to outstanding stock options and are determined using the treasury stock method. Three Months Ended March 31, 2020 2019 (In thousands) Net income applicable to common stock $ 1,541 $ 1,302 Average number of common shares issued 2,599 2,532 Less: Average unallocated ESOP shares (88) (101) Average number of common shares outstanding used to calculate basic earnings per common share 2,511 2,431 Effect of dilutive stock options 77 93 Average number of common shares outstanding used to calculate diluted earnings per share 2,588 2,524 Earnings per common share: Basic $ 0.61 $ 0.54 Diluted $ 0.60 $ 0.52 There were no anti-dilutive options that would have been excluded from the computations of diluted earnings per share for the three months ended March 31, 2020 and 2019. Anti-dilutive shares are common stock equivalents with exercise prices in excess of the strike price of the Company’s stock for the periods presented. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2020 | |
LEASES | |
LEASES | NOTE 12 – LEASES Effective January 1, 2019, operating leases are included in operating lease right-of-use (“ROU”) asset and liabilities in our consolidated balance sheet. These operating leases provide the physical facilities for our sales and service locations, administration and operations offices, and ATMs. The Company recorded an increase in assets of $7.8 million and an increase in liabilities of $7.8 million on the Consolidated Balance Sheets as a result of recognizing the right-of-use assets and lease liabilities. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities were recognized at the accounting adoption date based on the present value of lease payments over the remaining lease term. As the Company’s leases do not provide an implicit rate, the Company used the Federal Home Loan Bank borrowing rates that best align with the lease term in determining the present value of lease payments. The Company’s lease terms may include options to extend or terminate the lease, which we include when it is reasonably certain that we will exercise that option. For operating leases, the lease expense is recognized on a straight-line basis over the lease term. The operating lease expense for the three months ended March 31, 2020 was $464 thousand. The table below summarizes other information related to our operating leases as of March 31, 2020: Cash flows from operating leases, in thousands, year to date 2020 $ 459 Weighted average remaining lease term, in years Weighted average discount rate 3.13 % The table below summarizes the maturity of the operating lease liabilities as of March 31, 2020: (In thousands) 2020 $ 1,400 2021 1,714 2022 1,417 2023 1,340 2024 1,136 Thereafter 1,309 Total lease payments 8,316 Less imputed interest (738) Present value of lease liabilities $ 7,578 |
LOAN POLICIES (Policies)
LOAN POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
LOAN POLICIES | |
Allowance for loan losses | Allowance for loan losses The allowance for loan losses is established through a provision for loan losses charged to earnings as losses are estimated to occur. Loan losses are charged against the allowance when management believes the uncollectibility of the loan balance is confirmed. Subsequent recoveries are credited to the allowance. The allowance for loan losses is evaluated on a regular basis by management. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The allowance consists of general, allocated and unallocated components. General component The general component is based on the following loan segments: residential real estate, commercial real estate, construction, commercial, home equity lines of credit and other consumer. Management considers a rolling average of historical losses for each segment based on a time frame appropriate to capture relevant loss data for each loan segment, generally three and 10 years. This historical loss factor is adjusted for the following qualitative factors: levels/trends in delinquencies; trends in volume, concentrations and terms of loans; level of collateral protection; effects of changes in risk selection and underwriting standards; experience/ability/depth of lending management and staff; and national and local economic trends and conditions. There were no significant changes to the Company’s policies or methodology pertaining to the general component of the allowance during 2020 or 2019. The qualitative factor adjustments are determined based on the various risk characteristics of each loan segment. Risk characteristics relevant to each portfolio segment are as follows: Residential real estate – The Company generally does not originate loans with a loan-to-value ratio greater than 80 percent and does not originate subprime loans. Most loans in this segment are collateralized by one-to-four family residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality of this segment. Commercial real estate – Loans in this segment are primarily income-producing properties in the Company’s primary market areas in eastern Massachusetts. The underlying cash flows generated by the properties may be adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which, in turn, will have an effect on the credit quality in this segment. Management typically obtains rent rolls annually and continually monitors the cash flows of these loans. Construction – Loans in this segment include speculative construction loans primarily on residential properties for which payment is derived from the sale of the property. Credit risk is affected by cost overruns, time to sell at an adequate price, and market conditions. Residential construction loans in this segment also include loans to build one-to-four family owner-occupied properties which are subject to the same credit quality factors as residential real estate. Commercial – Loans in this segment are made to businesses and are generally secured by assets of the business. Repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality in this segment. Home equity lines of credit – Loans in this segment are collateralized by one-to-four family residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment. Other consumer – Loans in this segment are generally unsecured and repayment is dependent on the credit quality of the individual borrower. Allocated component The allocated component relates to loans that are classified as impaired. Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the fair value of the loan or, if the loan is collateral dependent, by the fair value of the collateral less estimated costs to sell. An allowance is established when the discounted cash flows or collateral value of the impaired loan are lower than the carrying value of that loan. Large groups of smaller-balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify performing individual residential and consumer loans for impairment disclosures, unless such loans are subject to a troubled debt restructuring agreement. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due, according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. The Company periodically may agree to modify the contractual terms of loans. When a loan is modified and a concession is made to a borrower experiencing financial difficulty, the modification is considered a troubled debt restructuring ("TDR"). All TDRs are initially classified as impaired. Unallocated component An unallocated component is maintained to cover additional uncertainties in management’s estimation of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating allocated and general reserves in the portfolio. |
COMPREHENSIVE INCOME (Tables)
COMPREHENSIVE INCOME (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
COMPREHENSIVE INCOME | |
Schedule of accumulated other comprehensive income (loss) | The components of accumulated other comprehensive income (loss) and related tax effects are as follows: March 31, December 31, 2020 2019 (In thousands) Unrealized holding gains (losses) on securities available for sale $ 644 $ 696 Tax effect (152) (166) Net-of tax amount $ 492 $ 530 |
SECURITIES AVAILABLE FOR SALE (
SECURITIES AVAILABLE FOR SALE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
SECURITIES AVAILABLE FOR SALE | |
Available-for-sale securities | The amortized cost and fair value of securities available for sale, with gross unrealized gains and losses, follows: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) March 31, 2020 Residential mortgage-backed securities: Government National Mortgage Association $ 2,694 $ 88 $ (44) $ 2,738 Government-sponsored enterprises 1,181 20 (4) 1,197 SBA and other asset-backed securities 3,805 138 (25) 3,918 State and municipal bonds 7,433 355 — 7,788 Government-sponsored enterprise obligations 1,864 40 — 1,904 Corporate bonds 6,748 113 (37) 6,824 $ 23,725 $ 754 $ (110) $ 24,369 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) December 31, 2019 Residential mortgage-backed securities: Government National Mortgage Association $ 2,770 $ 61 $ (16) $ 2,815 Government-sponsored enterprises 2,224 51 (9) 2,266 SBA and other asset-backed securities 4,082 112 (2) 4,192 State and municipal bonds 7,446 375 — 7,821 Government-sponsored enterprise obligations 4,000 — (6) 3,994 Corporate bonds 8,597 139 (9) 8,727 $ 29,119 $ 738 $ (42) $ 29,815 |
Schedule of investments classified by contractual maturity date | The amortized cost and fair value of debt securities by contractual maturity at March 31, 2020 are as follows: Amortized Fair Cost Value (In thousands) Within 1 year $ — $ — After 1 year to 5 years 6,654 6,723 After 5 years to 10 years 7,019 7,316 After 10 years 2,372 2,477 16,045 16,516 Mortgage- and asset-backed securities 7,680 7,853 $ 23,725 $ 24,369 |
Available-for-sale securities, continuous unrealized loss position, fair value | 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: Less Than Twelve Months Over Twelve Months Gross Gross Unrealized Fair Unrealized Fair Losses Value Losses Value (In thousands) March 31, 2020 Residential mortgage-backed securities: Government National Mortgage Association $ — $ — $ (44) $ 876 Government-sponsored enterprises (4) 359 — — SBA and other asset-backed securities (5) 856 (20) 259 Corporate bonds (3) 997 (34) 974 $ (12) $ 2,212 $ (98) $ 2,109 Less Than Twelve Months Over Twelve Months Gross Gross Unrealized Fair Unrealized Fair Losses Value Losses Value (In thousands) December 31, 2019 Residential mortgage-backed securities: Government National Mortgage Association $ — $ — $ (16) $ 908 Government-sponsored enterprises — — (9) 342 SBA and other asset-backed securities — — (2) 290 Government-sponsored enterprise obligations (6) 2,994 — — Corporate bonds — — (9) 1,000 $ (6) $ 2,994 $ (36) $ 2,540 |
LOANS AND ALLOWANCE FOR LOAN _2
LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
LOANS AND ALLOWANCE FOR LOAN LOSSES | |
Summary of the ending balances of loans | A summary of the ending balances of loans is as follows: March 31, December 31, 2020 2019 (In thousands) Real estate loans: Residential – fixed $ 89,954 $ 77,679 Residential – variable 311,826 310,646 Commercial 180,393 181,928 Construction 139,265 138,007 721,438 708,260 Commercial loans: Secured 100,276 92,347 Unsecured 4,818 4,934 105,094 97,281 Consumer loans: Home equity lines of credit 37,456 36,693 Other 126 171 37,582 36,864 Total loans 864,114 842,405 Net deferred originations costs (379) (292) Total loans, net of deferred fees 863,735 842,113 Less: Allowance for loan losses (8,208) (7,653) Loans, net $ 855,527 $ 834,460 |
Summary of changes in the allowance for loan losses by portfolio segment | The following table summarizes the changes in the allowance for loan losses by portfolio segment for the three months ended March 31, 2020 and 2019: Residential Commercial Home Other Real Estate Real Estate Construction Commercial Equity Consumer Unallocated Total (In thousands) Three Months Ended March 31, 2020 Allowance at December 31, 2019 $ 2,100 $ 1,626 $ 1,823 $ 1,864 $ 235 $ 4 $ 1 $ 7,653 Provision (credit) for loan losses 239 162 266 (147) 27 (1) 9 555 Allowance at March 31, 2020 $ 2,339 $ 1,788 $ 2,089 $ 1,717 $ 262 $ 3 $ 10 $ 8,208 Three Months Ended March 31, 2019 Allowance at December 31, 2018 $ 2,216 $ 1,602 $ 1,462 $ 1,124 $ 257 $ 3 $ 74 $ 6,738 Provision (credit) for loan losses (14) (241) 347 157 5 — (14) 240 Allowance at March 31, 2019 $ 2,202 $ 1,361 $ 1,809 $ 1,281 $ 262 $ 3 $ 60 $ 6,978 |
Schedule of information pertaining to the allowance for loan losses | Further information pertaining to the allowance for loan losses is as follows: Residential Commercial Home Other Real Estate Real Estate Construction Commercial Equity Consumer Unallocated Total (In thousands) March 31, 2020 Allowance related to impaired loans $ — $ — $ — $ — $ — $ — $ — $ — Allowance related to non-impaired loans 2,339 1,788 2,089 1,717 262 3 10 8,208 Total allowance $ 2,339 $ 1,788 $ 2,089 $ 1,717 $ 262 $ 3 $ 10 $ 8,208 Impaired loan balances $ 715 $ 548 $ — $ 553 $ 500 $ — $ — $ 2,316 Non-impaired loan balances 401,065 179,845 139,265 104,541 36,956 126 — 861,798 Total loans $ 401,780 $ 180,393 $ 139,265 $ 105,094 $ 37,456 $ 126 $ — $ 864,114 December 31, 2019 Allowance related to impaired loans $ — $ — $ — $ 350 $ — $ — $ — $ 350 Allowance related to non-impaired loans 2,100 1,626 1,823 1,514 235 4 1 7,303 Total allowance $ 2,100 $ 1,626 $ 1,823 $ 1,864 $ 235 $ 4 $ 1 $ 7,653 Impaired loan balances $ 721 $ 2,565 $ — $ 1,993 $ 500 $ — $ — $ 5,779 Non-impaired loan balances 387,604 179,363 138,007 95,288 36,193 171 — 836,626 Total loans $ 388,325 $ 181,928 $ 138,007 $ 97,281 $ 36,693 $ 171 $ — $ 842,405 |
Summary of past due and non-accrual loans | The following is a summary of past due and non-accrual loans at March 31, 2020 and December 31, 2019: Past Due 90 30‑59 Past Due 90 Days or More Days 60‑89 Days Days or Total and Still Non-accrual Past Due Past Due More Past Due Accruing Loans (In thousands) March 31, 2020 Residential real estate $ 532 $ — $ — $ 532 $ — $ 558 Commercial real estate 3,434 — 548 3,982 — 548 Home equity lines of credit 118 — 500 618 — 500 Total $ 4,084 $ — $ 1,048 $ 5,132 $ — $ 1,606 December 31, 2019 Residential real estate $ — $ — $ — $ — $ — $ 562 Commercial real estate — — 548 548 — 548 Commercial loans — — — — — 883 Home equity lines of credit — — 500 500 — 500 Total $ — $ — $ 1,048 $ 1,048 $ — $ 2,493 |
Summary of impaired loans | The following is a summary of impaired loans: March 31, 2020 December 31, 2019 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance (In thousands) Impaired loans without a valuation allowance: Residential real estate $ 715 $ 732 $ — $ 721 $ 738 $ — Commercial real estate 548 674 — 2,565 2,691 — Commercial loans 553 553 — 1,110 1,110 — Home equity lines of credit 500 500 — 500 500 — Total 2,316 2,459 — 4,896 5,039 — Impaired loans with a valuation allowance: Commercial loans — — — 883 883 350 Total impaired loans $ 2,316 $ 2,459 $ — $ 5,779 $ 5,922 $ 350 |
Schedule of information pertaining to impaired loans | Further information pertaining to impaired loans follows: Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Interest Interest Average Interest Income Average Interest Income Recorded Income Recognized Recorded Income Recognized Investment Recognized on Cash Basis Investment Recognized on Cash Basis (In thousands) Residential real estate $ 718 $ 9 $ 6 $ 744 $ 6 $ 4 Commercial real estate 1,053 8 — 2,809 33 8 Commercial loans 1,386 27 15 — — — Home equity lines of credit 500 — — — — — Total $ 3,657 $ 44 $ 21 $ 3,553 $ 39 $ 12 |
Schedule of Company's loans by risk rating | The following table presents the Company’s loans by risk rating: March 31, 2020 December 31, 2019 Commercial Commercial Real Estate Construction Commercial Total Real Estate Construction Commercial Total (In thousands) Loans rated 1‑4 $ 178,979 $ 139,265 $ 104,541 $ 422,785 $ 178,488 $ 138,007 $ 95,287 $ 411,782 Loans rated 5 866 — — 866 875 — — 875 Loans rated 6 — — 553 553 2,017 — 1,994 4,011 Loans rated 7 548 — — 548 548 — — 548 Total $ 180,393 $ 139,265 $ 105,094 $ 424,752 $ 181,928 $ 138,007 $ 97,281 $ 417,216 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
DERIVATIVE INSTRUMENTS | |
Schedule of summary of the interest rate swaps | A summary of the interest rate swaps is as follows: With commercial With third-party loan borrowers financial institutions March 31, December 31, March 31, December 31, 2020 2019 2020 2019 (dollars in thousands) Notional amount $ 88,152 $ 71,941 $ 88,152 $ 71,941 Receive (pay) fixed rate weighted average 4.25 % 4.43 % (4.25) % (4.43) % Receive (pay) variable rate weighted average (3.01) % (3.79) % 3.01 % 3.79 % Weighted average remaining years 12.6 years 11.0 years 12.6 years 11.0 years Unrealized fair value gain (loss) $ 10,181 $ 3,472 $ (10,181) $ (3,472) |
FAIR VALUES OF FINANCIAL INST_2
FAIR VALUES OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
FAIR VALUES OF FINANCIAL INSTRUMENTS | |
Schedule of fair value, assets and liabilities measured on recurring basis | Assets and liabilities measured at fair value on a recurring basis at March 31, 2020 and December 31, 2019 are summarized below. Total Level 1 Level 2 Level 3 Fair Value (In thousands) March 31, 2020 Assets Securities available for sale $ — $ 22,841 $ 1,528 $ 24,369 Interest rate swap agreements — 10,181 — 10,181 Forward loan sale commitments — — 34 34 $ — $ 33,022 $ 1,562 $ 34,584 Liabilities Interest rate swap agreements $ — $ 10,181 $ — $ 10,181 Derivative loan commitments — — 9 9 $ — $ 10,181 $ 9 $ 10,190 December 31, 2019 Assets Securities available for sale $ — $ 28,293 $ 1,522 $ 29,815 Interest rate swap agreements — 3,472 — 3,472 $ — $ 31,765 $ 1,522 $ 33,287 Liabilities Derivative loan commitments $ — $ — $ 1 $ 1 Forward loan sale commitments — — 4 4 Interest rate swap agreements — 3,472 — 3,472 $ — $ 3,472 $ 5 $ 3,477 |
Schedule of fair value measurements, nonrecurring | March 31, 2020 December 31, 2019 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (In thousands) Loans held for sale $ — $ — $ 2,089 $ — $ — $ 3,354 |
Schedule of fair value, by balance sheet grouping | The estimated fair values and related carrying amounts of the Company’s financial instruments are outlined in the table below. Certain financial instruments and all nonfinancial instruments are excluded from disclosure requirements. Accordingly, the aggregate fair value amounts presented herein may not necessarily represent the underlying fair value of the Company. Fair Value Carrying Amount Level 1 Level 2 Level 3 Total (In thousands) March 31, 2020 Financial assets: Cash and cash equivalents $ 34,926 $ 34,926 $ — $ — $ 34,926 Certificates of deposit 100 100 — — 100 Securities available for sale 24,369 — 22,841 1,528 24,369 FHLB stock 6,202 — — 6,202 6,202 Loans held for sale 2,089 — — 2,089 2,089 Loans, net 855,527 — — 857,026 857,026 Accrued interest receivable 2,595 — — 2,595 2,595 Interest rate swap agreements 10,181 — 10,181 — 10,181 Forward loan sale commitments 34 — — 34 34 Financial liabilities: Deposits $ 735,026 $ — $ — $ 736,809 $ 736,809 Short-term borrowings 45,000 — 45,000 — 45,000 Long-term debt 72,859 — 74,716 — 74,716 Subordinated debt 9,868 — — 9,812 9,812 Accrued interest payable 506 — — 506 506 Interest rate swap agreements 10,181 — 10,181 — 10,181 Derivative loan commitments 9 — — 9 9 December 31, 2019 Financial assets: Cash and cash equivalents $ 42,094 $ 42,094 $ — $ — $ 42,094 Certificates of deposit 100 100 — — 100 Securities available for sale 29,815 — 28,293 1,522 29,815 FHLB stock 4,906 — — 4,906 4,906 Loans held for sale 3,354 — — 3,354 3,354 Loans, net 834,460 — — 839,084 839,084 Accrued interest receivable 2,525 — — 2,525 2,525 Interest rate swap agreements — — Financial liabilities: Deposits $ 752,467 $ — $ — $ 752,699 $ 752,699 Short-term borrowings 20,000 — 20,000 — 20,000 Long-term debt 74,196 — 75,256 — 75,256 Subordinated debt 9,861 — — 9,788 9,788 Interest rate swap agreements 3,472 — 3,472 — 3,472 Accrued interest payable 692 — — 692 692 Derivative loan commitments 1 — — 1 1 Forward loan sale commitments 4 — — 4 4 |
EMPLOYEE STOCK OWNERSHIP PLAN (
EMPLOYEE STOCK OWNERSHIP PLAN (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
EMPLOYEE STOCK OWNERSHIP PLAN | |
Schedule of shares held by ESOP | Shares held by the ESOP at March 31, 2020 include the following: Allocated 84,984 Committed to be allocated 3,209 Unallocated 86,659 174,852 |
EQUITY INCENTIVE PLANS (Tables)
EQUITY INCENTIVE PLANS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
EQUITY INCENTIVE PLANS | |
Schedule of Share-based Compensation, Stock Options, Activity | A summary of option activity under the 2012 Equity Incentive Plan for the three months ended March 31, 2020 is presented below: Outstanding Weighted Average Weighted Remaining Aggregate Average Contractual Intrinsic Shares Exercise Price Term Value (In thousands) (In years) (In thousands) Balance at January 1, 2020 124 $ 16.09 Exercised (10) 15.35 Balance at March 31, 2020 114 $ 15.82 $ 1,324 Exercisable at March 31, 2020 112 $ 15.78 $ 1,337 Non-vested Weighted Average Grant Date Shares Fair Value (In thousands) Balance at January 1, 2020 1 $ 19.14 Balance at March 31, 2020 1 $ 19.14 |
Schedule of Nonvested Share Activity | The following table presents the activity in non-vested stock awards under the equity incentive plans for the three months ended March 31, 2020: Number of Grant-date Shares Fair Value (In thousands) Balance at January 1, 2020 28 $ 23.97 Restricted shares vested (6) 28.25 Balance at March 31, 2020 22 $ 26.48 |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
EARNINGS PER COMMON SHARE | |
Schedule of earnings per share, basic and diluted | Three Months Ended March 31, 2020 2019 (In thousands) Net income applicable to common stock $ 1,541 $ 1,302 Average number of common shares issued 2,599 2,532 Less: Average unallocated ESOP shares (88) (101) Average number of common shares outstanding used to calculate basic earnings per common share 2,511 2,431 Effect of dilutive stock options 77 93 Average number of common shares outstanding used to calculate diluted earnings per share 2,588 2,524 Earnings per common share: Basic $ 0.61 $ 0.54 Diluted $ 0.60 $ 0.52 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
LEASES | |
Summary of other information related to our operating leases | The table below summarizes other information related to our operating leases as of March 31, 2020: Cash flows from operating leases, in thousands, year to date 2020 $ 459 Weighted average remaining lease term, in years Weighted average discount rate 3.13 % |
Summary of maturity of the operating lease liabilities | The table below summarizes the maturity of the operating lease liabilities as of March 31, 2020: (In thousands) 2020 $ 1,400 2021 1,714 2022 1,417 2023 1,340 2024 1,136 Thereafter 1,309 Total lease payments 8,316 Less imputed interest (738) Present value of lease liabilities $ 7,578 |
BASIS OF PRESENTATION AND CON_2
BASIS OF PRESENTATION AND CONSOLIDATION (Details) | Dec. 05, 2019shares |
BASIS OF PRESENTATION AND CONSOLIDATION | |
Merger Agreement, Shares Of Common Stock To Be Received For Each Share Of Entity's Common Stock | 0.580 |
LOAN POLICIES (Details)
LOAN POLICIES (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Maximum [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Time Period To Capture Relevant Loan Loss Data | 10 years |
Residential real estate [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Loan To Value Ratio | 80.00% |
COMPREHENSIVE INCOME (Details)
COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
COMPREHENSIVE INCOME | ||
Unrealized holding gains (losses) on securities available for sale | $ 644 | $ 696 |
Tax effect | (152) | (166) |
Net-of tax amount | $ 492 | $ 530 |
SECURITIES AVAILABLE FOR SALE_2
SECURITIES AVAILABLE FOR SALE (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 23,725 | $ 29,119 |
Gross Unrealized Gains | 754 | 738 |
Gross Unrealized Losses | (110) | (42) |
Fair Value | 24,369 | 29,815 |
SBA and other asset-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 3,805 | 4,082 |
Gross Unrealized Gains | 138 | 112 |
Gross Unrealized Losses | (25) | (2) |
Fair Value | 3,918 | 4,192 |
State and municipal bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 7,433 | 7,446 |
Gross Unrealized Gains | 355 | 375 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 7,788 | 7,821 |
Government-sponsored enterprise obligations [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,864 | 4,000 |
Gross Unrealized Gains | 40 | 0 |
Gross Unrealized Losses | 0 | (6) |
Fair Value | 1,904 | 3,994 |
Corporate bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 6,748 | 8,597 |
Gross Unrealized Gains | 113 | 139 |
Gross Unrealized Losses | (37) | (9) |
Fair Value | 6,824 | 8,727 |
Residential mortgage-backed securities [Member] | Government National Mortgage Association [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 2,694 | 2,770 |
Gross Unrealized Gains | 88 | 61 |
Gross Unrealized Losses | (44) | (16) |
Fair Value | 2,738 | 2,815 |
Residential mortgage-backed securities [Member] | Government-sponsored enterprises [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,181 | 2,224 |
Gross Unrealized Gains | 20 | 51 |
Gross Unrealized Losses | (4) | (9) |
Fair Value | $ 1,197 | $ 2,266 |
SECURITIES AVAILABLE FOR SALE -
SECURITIES AVAILABLE FOR SALE - Schedule of debt securities by contractual maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Available-for-sale Securities, Debt Maturities, Amortized Cost | ||
Within 1 year | $ 0 | |
After 1 year to 5 years | 6,654 | |
After 5 years to 10 years | 7,019 | |
After 10 years | 2,372 | |
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Amortized Cost Basis, Total | 16,045 | |
Mortgage- and asset-backed securities | 7,680 | |
Available-for-sale Debt Securities, Amortized Cost Basis, Total | 23,725 | $ 29,119 |
Available-for-sale Securities, Debt Maturities, Fair Value | ||
Within 1 year | 0 | |
After 1 year to 5 years | 6,723 | |
After 5 years to 10 years | 7,316 | |
After 10 years | 2,477 | |
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Fair Value Total | 16,516 | |
Mortgage- and asset-backed securities | 7,853 | |
Available-for-sale Securities, Debt Securities, Fair Value Total | $ 24,369 | $ 29,815 |
SECURITIES AVAILABLE FOR SALE_3
SECURITIES AVAILABLE FOR SALE - Information pertaining to investment category (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than Twelve Months Gross Unrealized Losses | $ (12) | $ (6) |
Less Than Twelve Months Fair Value | 2,212 | 2,994 |
Over Twelve Months Gross Unrealized Losses | (98) | (36) |
Over Twelve Months Fair Value | 2,109 | 2,540 |
SBA and other asset-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than Twelve Months Gross Unrealized Losses | (5) | 0 |
Less Than Twelve Months Fair Value | 856 | 0 |
Over Twelve Months Gross Unrealized Losses | (20) | (2) |
Over Twelve Months Fair Value | 259 | 290 |
Government-sponsored enterprise obligations [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than Twelve Months Gross Unrealized Losses | (3) | (6) |
Less Than Twelve Months Fair Value | 997 | 2,994 |
Over Twelve Months Gross Unrealized Losses | (34) | 0 |
Over Twelve Months Fair Value | 974 | 0 |
Corporate bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than Twelve Months Gross Unrealized Losses | 0 | |
Less Than Twelve Months Fair Value | 0 | |
Over Twelve Months Gross Unrealized Losses | (9) | |
Over Twelve Months Fair Value | 1,000 | |
Residential mortgage-backed securities [Member] | Government National Mortgage Association [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than Twelve Months Gross Unrealized Losses | 0 | 0 |
Less Than Twelve Months Fair Value | 0 | 0 |
Over Twelve Months Gross Unrealized Losses | (44) | (16) |
Over Twelve Months Fair Value | 876 | 908 |
Residential mortgage-backed securities [Member] | Government-sponsored enterprises [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than Twelve Months Gross Unrealized Losses | (4) | 0 |
Less Than Twelve Months Fair Value | 359 | 0 |
Over Twelve Months Gross Unrealized Losses | 0 | (9) |
Over Twelve Months Fair Value | $ 0 | $ 342 |
SECURITIES AVAILABLE FOR SALE_4
SECURITIES AVAILABLE FOR SALE - Additional informaton (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
SECURITIES AVAILABLE FOR SALE | ||
Proceeds from sales of available-for-sale securities | $ 0 | $ 0 |
Unrealized Losses Debt Securities Aggregate Depreciation Percentage | 2.50% |
LOANS AND ALLOWANCE FOR LOAN _3
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Total loans | $ 864,114 | $ 842,405 |
Net deferred origination costs | (379) | (292) |
Total loans, net of deferred fees | 863,735 | 842,113 |
Less: Allowance for loan losses | (8,208) | (7,653) |
Loans, net | 855,527 | 834,460 |
Commercial loan [Member] | ||
Total loans | 105,094 | 97,281 |
Consumer loan [Member] | ||
Total loans | 37,582 | 36,864 |
Commercial real estate [Member] | ||
Total loans | 180,393 | 181,928 |
Construction [Member] | ||
Total loans | 139,265 | 138,007 |
Secured [Member] | Commercial loan [Member] | ||
Total loans | 100,276 | 92,347 |
Unsecured [Member] | Commercial loan [Member] | ||
Total loans | 4,818 | 4,934 |
Home equity lines of credit [Member] | ||
Total loans | 37,456 | 36,693 |
Home equity lines of credit [Member] | Consumer loan [Member] | ||
Total loans | 37,456 | 36,693 |
Other Consumer [Member] | ||
Total loans | 126 | 171 |
Other Consumer [Member] | Consumer loan [Member] | ||
Total loans | 126 | 171 |
Real estate loans [Member] | ||
Total loans | 721,438 | 708,260 |
Real estate loans [Member] | Residential - fixed [Member] | ||
Total loans | 89,954 | 77,679 |
Real estate loans [Member] | Residential - variable [Member] | ||
Total loans | 311,826 | 310,646 |
Real estate loans [Member] | Commercial real estate [Member] | ||
Total loans | 180,393 | 181,928 |
Real estate loans [Member] | Construction [Member] | ||
Total loans | $ 139,265 | $ 138,007 |
LOANS AND ALLOWANCE FOR LOAN _4
LOANS AND ALLOWANCE FOR LOAN LOSSES - Changes in the allowance for loan losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Allowance Beginning Balance | $ 7,653 | $ 6,738 |
Provision (credit) for loan losses | 555 | 240 |
Allowance Ending Balance | 8,208 | 6,978 |
Commercial loan [Member] | ||
Allowance Beginning Balance | 1,864 | 1,124 |
Provision (credit) for loan losses | (147) | 157 |
Allowance Ending Balance | 1,717 | 1,281 |
Residential real estate [Member] | ||
Allowance Beginning Balance | 2,100 | 2,216 |
Provision (credit) for loan losses | 239 | (14) |
Allowance Ending Balance | 2,339 | 2,202 |
Commercial real estate [Member] | ||
Allowance Beginning Balance | 1,626 | 1,602 |
Provision (credit) for loan losses | 162 | (241) |
Allowance Ending Balance | 1,788 | 1,361 |
Construction [Member] | ||
Allowance Beginning Balance | 1,823 | 1,462 |
Provision (credit) for loan losses | 266 | 347 |
Allowance Ending Balance | 2,089 | 1,809 |
Home equity lines of credit [Member] | ||
Allowance Beginning Balance | 235 | 257 |
Provision (credit) for loan losses | 27 | 5 |
Allowance Ending Balance | 262 | 262 |
Other Consumer [Member] | ||
Allowance Beginning Balance | 4 | 3 |
Provision (credit) for loan losses | (1) | |
Allowance Ending Balance | 3 | 3 |
Unallocated [Member] | ||
Allowance Beginning Balance | 1 | 74 |
Provision (credit) for loan losses | 9 | (14) |
Allowance Ending Balance | $ 10 | $ 60 |
LOANS AND ALLOWANCE FOR LOAN _5
LOANS AND ALLOWANCE FOR LOAN LOSSES - Allowance for Credit Losses on Financing Receivables (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Allowance related to impaired loans | $ 350 | |||
Allowance related to non-impaired loans | $ 8,208 | 7,303 | ||
Total allowance | 8,208 | 7,653 | $ 6,978 | $ 6,738 |
Impaired loan balances | 2,316 | 5,779 | ||
Non-impaired loan balances | 861,798 | 836,626 | ||
Total loans | 864,114 | 842,405 | ||
Commercial loan [Member] | ||||
Allowance related to impaired loans | 350 | |||
Allowance related to non-impaired loans | 1,717 | 1,514 | ||
Total allowance | 1,717 | 1,864 | 1,281 | 1,124 |
Impaired loan balances | 553 | 1,993 | ||
Non-impaired loan balances | 104,541 | 95,288 | ||
Total loans | 105,094 | 97,281 | ||
Residential real estate [Member] | ||||
Allowance related to non-impaired loans | 2,339 | 2,100 | ||
Total allowance | 2,339 | 2,100 | 2,202 | 2,216 |
Impaired loan balances | 715 | 721 | ||
Non-impaired loan balances | 401,065 | 387,604 | ||
Total loans | 401,780 | 388,325 | ||
Commercial real estate [Member] | ||||
Allowance related to non-impaired loans | 1,788 | 1,626 | ||
Total allowance | 1,788 | 1,626 | 1,361 | 1,602 |
Impaired loan balances | 548 | 2,565 | ||
Non-impaired loan balances | 179,845 | 179,363 | ||
Total loans | 180,393 | 181,928 | ||
Construction [Member] | ||||
Allowance related to non-impaired loans | 2,089 | 1,823 | ||
Total allowance | 2,089 | 1,823 | 1,809 | 1,462 |
Non-impaired loan balances | 139,265 | 138,007 | ||
Total loans | 139,265 | 138,007 | ||
Home equity lines of credit [Member] | ||||
Allowance related to non-impaired loans | 262 | 235 | ||
Total allowance | 262 | 235 | 262 | 257 |
Impaired loan balances | 500 | 500 | ||
Non-impaired loan balances | 36,956 | 36,193 | ||
Total loans | 37,456 | 36,693 | ||
Other Consumer [Member] | ||||
Allowance related to non-impaired loans | 3 | 4 | ||
Total allowance | 3 | 4 | 3 | 3 |
Non-impaired loan balances | 126 | 171 | ||
Total loans | 126 | 171 | ||
Unallocated [Member] | ||||
Allowance related to non-impaired loans | 10 | 1 | ||
Total allowance | $ 10 | $ 1 | $ 60 | $ 74 |
LOANS AND ALLOWANCE FOR LOAN _6
LOANS AND ALLOWANCE FOR LOAN LOSSES - Summary of past due and non-accrual loans (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Total Past Due | $ 5,132 | $ 1,048 |
Non-accrual Loans | 1,606 | 2,493 |
Commercial loan [Member] | ||
Non-accrual Loans | 883 | |
Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Total Past Due | 4,084 | |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Total Past Due | 1,048 | 1,048 |
Residential real estate [Member] | ||
Total Past Due | 532 | |
Non-accrual Loans | 558 | 562 |
Residential real estate [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Total Past Due | 532 | |
Commercial real estate [Member] | ||
Total Past Due | 3,982 | 548 |
Non-accrual Loans | 548 | 548 |
Commercial real estate [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Total Past Due | 3,434 | |
Commercial real estate [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Total Past Due | 548 | 548 |
Home equity lines of credit [Member] | ||
Total Past Due | 500 | |
Non-accrual Loans | 500 | |
Home equity lines of credit [Member] | Consumer loan [Member] | ||
Total Past Due | 618 | |
Non-accrual Loans | 500 | |
Home equity lines of credit [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | Consumer loan [Member] | ||
Total Past Due | 118 | |
Home equity lines of credit [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Total Past Due | $ 500 | |
Home equity lines of credit [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Consumer loan [Member] | ||
Total Past Due | $ 500 |
LOANS AND ALLOWANCE FOR LOAN _7
LOANS AND ALLOWANCE FOR LOAN LOSSES - Impaired financing receivables (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Impaired loans Recorded Investment, Without a Valuation Allowance | $ 2,316 | $ 4,896 |
Impaired loans Unpaid Principal Balance, Without a Valuation Allowance | 2,459 | 5,039 |
Impaired loans Related allowance , Without a Valuation allowance | 350 | |
Total impaired loans Recorded Investment | 2,316 | 5,779 |
Total impaired loans Unpaid Principal Balance | 2,459 | 5,922 |
Commercial loan [Member] | ||
Impaired loans Recorded Investment, Without a Valuation Allowance | 553 | 1,110 |
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 883 | |
Impaired Financing Receivable, with Related Allowance, Unpaid Principal Balance | 883 | |
Impaired loans Related allowance , Without a Valuation allowance | 350 | |
Residential real estate [Member] | ||
Impaired loans Recorded Investment, Without a Valuation Allowance | 715 | 721 |
Impaired loans Unpaid Principal Balance, Without a Valuation Allowance | 732 | 738 |
Commercial real estate [Member] | ||
Impaired loans Recorded Investment, Without a Valuation Allowance | 548 | 2,565 |
Impaired loans Unpaid Principal Balance, Without a Valuation Allowance | 674 | 2,691 |
Home equity lines of credit [Member] | ||
Impaired loans Recorded Investment, Without a Valuation Allowance | 500 | 500 |
Impaired loans Unpaid Principal Balance, Without a Valuation Allowance | $ 500 | $ 500 |
LOANS AND ALLOWANCE FOR LOAN _8
LOANS AND ALLOWANCE FOR LOAN LOSSES - Impaired financing receivables by class of loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Average Recorded Investment | $ 3,657 | $ 3,553 |
Interest Income Recognized | 44 | 39 |
Interest Income Recognized on Cash Basis | 21 | 12 |
Residential real estate [Member] | ||
Average Recorded Investment | 718 | 744 |
Interest Income Recognized | 9 | 6 |
Interest Income Recognized on Cash Basis | 6 | 4 |
Commercial real estate [Member] | ||
Average Recorded Investment | 1,053 | 2,809 |
Interest Income Recognized | 8 | 33 |
Interest Income Recognized on Cash Basis | $ 8 | |
Commercial loan [Member] | ||
Average Recorded Investment | 1,386 | |
Interest Income Recognized | 27 | |
Interest Income Recognized on Cash Basis | 15 | |
Consumer loan [Member] | Home equity lines of credit [Member] | ||
Average Recorded Investment | $ 500 |
LOANS AND ALLOWANCE FOR LOAN _9
LOANS AND ALLOWANCE FOR LOAN LOSSES - Credit quality information (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Loans | $ 424,752 | $ 417,216 |
Loans rated 1-4 [Member] | ||
Loans | 422,785 | 411,782 |
Loans rated 5 [Member] | ||
Loans | 866 | 875 |
Loans rated 6 [Member] | ||
Loans | 553 | 4,011 |
Loans rated 7 [Member] | ||
Loans | 548 | 548 |
Commercial real estate [Member] | ||
Loans | 180,393 | 181,928 |
Commercial real estate [Member] | Loans rated 1-4 [Member] | ||
Loans | 178,979 | 178,488 |
Commercial real estate [Member] | Loans rated 5 [Member] | ||
Loans | 866 | 875 |
Commercial real estate [Member] | Loans rated 6 [Member] | ||
Loans | 2,017 | |
Commercial real estate [Member] | Loans rated 7 [Member] | ||
Loans | 548 | 548 |
Construction [Member] | ||
Loans | 139,265 | 138,007 |
Construction [Member] | Loans rated 1-4 [Member] | ||
Loans | 139,265 | 138,007 |
Commercial loan [Member] | ||
Loans | 105,094 | 97,281 |
Commercial loan [Member] | Loans rated 1-4 [Member] | ||
Loans | 104,541 | 95,287 |
Commercial loan [Member] | Loans rated 6 [Member] | ||
Loans | $ 553 | $ 1,994 |
LOANS AND ALLOWANCE FOR LOAN_10
LOANS AND ALLOWANCE FOR LOAN LOSSES - Additional information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Loans and Leases Receivable, Gross | $ 864,114 | $ 842,405 |
Commercial loan [Member] | ||
Loans and Leases Receivable, Gross | 105,094 | $ 97,281 |
Loan rated 9 [Member] | Maximum [Member] | Commercial loan [Member] | ||
Loans and Leases Receivable, Gross | $ 25 | |
Credit Rating Eleven [Member] | Maximum [Member] | ||
Period After Credit Rating Assignment | 60 days |
DERIVATIVE INSTRUMENTS - Summar
DERIVATIVE INSTRUMENTS - Summary of the interest rate swaps (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Commercial Borrower [Member] | ||
Notional amount | $ 88,152 | $ 71,941 |
Receive(pay) fixed rate (weighted average) | 4.25% | 4.43% |
Receive (pay) variable rate (weighted average) | (3.01%) | (3.79%) |
Weighted average remaining years | 12 years 7 months 6 days | 11 years |
Unrealized fair value gain (loss) | $ 10,181 | $ 3,472 |
Third Party Financial Institutions [Member] | ||
Notional amount | $ 88,152 | $ 71,941 |
Receive(pay) fixed rate (weighted average) | (4.25%) | (4.43%) |
Receive (pay) variable rate (weighted average) | 3.01% | 3.79% |
Weighted average remaining years | 12 years 7 months 6 days | 11 years |
Unrealized fair value gain (loss) | $ (10,181) | $ (3,472) |
DERIVATIVE INSTRUMENTS - Additi
DERIVATIVE INSTRUMENTS - Additional information (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Derivative [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | $ 34 | |
Interest Rate Swap [Member] | ||
Derivative [Line Items] | ||
Loans Pledged as Collateral | 11,700 | |
Not Designated as Hedging Instrument [Member] | Other Liabilities [Member] | ||
Derivative [Line Items] | ||
Derivative Liability, Notional Amount | 320 | $ 350 |
Derivative Asset, Fair Value, Gross Liability | 9 | 1 |
Not Designated as Hedging Instrument [Member] | Other Assets [Member] | ||
Derivative [Line Items] | ||
Derivative Asset, Fair Value, Gross Liability | 34 | 4 |
Derivative Asset, Notional Amount | $ 2,500 | $ 3,700 |
FAIR VALUES OF FINANCIAL INST_3
FAIR VALUES OF FINANCIAL INSTRUMENTS (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 34,584 | $ 33,287 |
Total liabilities | 10,190 | 3,477 |
Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 10,181 | 3,472 |
Total liabilities | 10,181 | 3,472 |
Forward loan sale commitments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 34 | |
Total liabilities | 4 | |
Securities available for sale | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 24,369 | 29,815 |
Derivative loan commitments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 9 | 1 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 33,022 | 31,765 |
Total liabilities | 10,181 | 3,472 |
Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 10,181 | 3,472 |
Total liabilities | 10,181 | 3,472 |
Fair Value, Inputs, Level 2 [Member] | Securities available for sale | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 22,841 | 28,293 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 1,562 | 1,522 |
Total liabilities | 9 | 5 |
Fair Value, Inputs, Level 3 [Member] | Forward loan sale commitments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 34 | |
Total liabilities | 4 | |
Fair Value, Inputs, Level 3 [Member] | Securities available for sale | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 1,528 | 1,522 |
Fair Value, Inputs, Level 3 [Member] | Derivative loan commitments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | $ 9 | $ 1 |
FAIR VALUES OF FINANCIAL INST_4
FAIR VALUES OF FINANCIAL INSTRUMENTS - Assets and liabilities measured at fair value on a non-recurring basis (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | $ 2,089 | $ 3,354 |
Non-recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities measured at fair value | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | $ 2,089 | $ 3,354 |
FAIR VALUES OF FINANCIAL INST_5
FAIR VALUES OF FINANCIAL INSTRUMENTS - Fair values of financial instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Financial assets: | ||
Cash and cash equivalents | $ 34,926 | $ 42,094 |
Certificates of deposit | 100 | 100 |
Securities available for sale | 24,369 | 29,815 |
FHLB stock | 6,202 | 4,906 |
Loans held for sale | 2,089 | 3,354 |
Loans, net | 857,026 | 839,084 |
Accrued interest receivable | 2,595 | 2,525 |
Interest rate swap agreements | 10,181 | 3,472 |
Forward loan sale commitments | 34 | |
Financial liabilities: | ||
Deposits | 736,809 | 752,699 |
Short-term borrowings | 45,000 | 20,000 |
Long-term debt | 74,716 | 75,256 |
Subordinated debt | 9,812 | 9,788 |
Accrued interest payable | 506 | 692 |
Interest rate swap agreements | 10,181 | 3,472 |
Derivative loan commitments | 9 | 1 |
Forward loan sale commitments | 4 | |
Fair Value, Inputs, Level 1 [Member] | ||
Financial assets: | ||
Cash and cash equivalents | 34,926 | 42,094 |
Certificates of deposit | 100 | 100 |
Fair Value, Inputs, Level 2 [Member] | ||
Financial assets: | ||
Securities available for sale | 22,841 | 28,293 |
Interest rate swap agreements | 10,181 | 3,472 |
Financial liabilities: | ||
Short-term borrowings | 45,000 | 20,000 |
Long-term debt | 74,716 | 75,256 |
Interest rate swap agreements | 10,181 | 3,472 |
Fair Value, Inputs, Level 3 [Member] | ||
Financial assets: | ||
Securities available for sale | 1,528 | 1,522 |
FHLB stock | 6,202 | 4,906 |
Loans held for sale | 2,089 | 3,354 |
Loans, net | 857,026 | 839,084 |
Accrued interest receivable | 2,595 | 2,525 |
Forward loan sale commitments | 34 | |
Financial liabilities: | ||
Deposits | 736,809 | 752,699 |
Subordinated debt | 9,812 | 9,788 |
Accrued interest payable | 506 | 692 |
Derivative loan commitments | 9 | 1 |
Forward loan sale commitments | 4 | |
Reported Value Measurement [Member] | ||
Financial assets: | ||
Cash and cash equivalents | 34,926 | 42,094 |
Certificates of deposit | 100 | 100 |
Securities available for sale | 24,369 | 29,815 |
FHLB stock | 6,202 | 4,906 |
Loans held for sale | 2,089 | 3,354 |
Loans, net | 855,527 | 834,460 |
Accrued interest receivable | 2,595 | 2,525 |
Interest rate swap agreements | 10,181 | 3,472 |
Forward loan sale commitments | 34 | |
Financial liabilities: | ||
Deposits | 735,026 | 752,467 |
Short-term borrowings | 45,000 | 20,000 |
Long-term debt | 72,859 | 74,196 |
Subordinated debt | 9,868 | 9,861 |
Accrued interest payable | 506 | 692 |
Interest rate swap agreements | 10,181 | 3,472 |
Derivative loan commitments | $ 9 | 1 |
Forward loan sale commitments | $ 4 |
EMPLOYEE STOCK OWNERSHIP PLAN -
EMPLOYEE STOCK OWNERSHIP PLAN - Shares held by ESOP (Details) | Mar. 31, 2020shares |
EMPLOYEE STOCK OWNERSHIP PLAN | |
Allocated | 84,984 |
Committed to be allocated | 3,209 |
Unallocated | 86,659 |
Total | 174,852 |
EMPLOYEE STOCK OWNERSHIP PLAN_2
EMPLOYEE STOCK OWNERSHIP PLAN - Additional information (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
EMPLOYEE STOCK OWNERSHIP PLAN | |||
Employee Stock Ownership Plan (ESOP), Shares in ESOP | 174,852 | 174,852 | |
Employee Stock Ownership Plan ESOP Percent Of Shares Authorized To Be Purchased | 6.70% | ||
Employee Stock Ownership Plan ESOP Debt Structure Direct Loan Term | 15 years | ||
Employee Stock Ownership Plan ESOP Debt Structure Direct Loan Interest Rate | 3.25% | ||
Employee Stock Ownership Plan ESOP Cost Of Committed To Be Released Shares | $ 2,400 | ||
Employee Stock Ownership Plan (ESOP), Compensation Expense | $ 121 | $ 96 |
EQUITY INCENTIVE PLANS - Summar
EQUITY INCENTIVE PLANS - Summary of option activity (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($)$ / sharesshares | |
Shares, Non-vested | |
Outstanding at beginning of period | shares | 1 |
Outstanding at end of period | shares | 1 |
Weighted Average Grant Date Fair value, Non-vested | |
Outstanding at beginning of period | $ / shares | $ 19.14 |
Outstanding at end of period | $ / shares | $ 19.14 |
Employee Stock Option [Member] | |
Shares | |
Outstanding at beginning of period | shares | 124,000 |
Exercised | shares | (10,000) |
Outstanding at end of period | shares | 114,000 |
Options exercisable at end of period | shares | 112,000 |
Weighted Average Exercise Price | |
Outstanding at beginning of period | $ / shares | $ 16.09 |
Exercised | $ / shares | 15.35 |
Outstanding at end of period | $ / shares | 15.82 |
Options exercisable at end of period | $ / shares | $ 15.78 |
Weighted Average Remaining Contractual Term | |
Outstanding at end of period | 2 years 9 months 7 days |
Options exercisable at end of period | 2 years 8 months 23 days |
Aggregate intrinsic value | |
Outstanding | $ | $ 1,324 |
Options exercisable at end of period | $ | $ 1,337 |
EQUITY INCENTIVE PLANS - Non-ve
EQUITY INCENTIVE PLANS - Non-vested awards (Details) | 3 Months Ended | |
Mar. 31, 2020$ / sharesshares | Mar. 31, 2019$ / sharesshares | |
Number of Shares | ||
Outstanding at beginning of period | 1 | |
Outstanding at end of period | 1 | |
Grant-date Fair Value | ||
Outstanding at beginning of period | $ / shares | $ 19.14 | |
Outstanding at end of period | $ / shares | $ 19.14 | |
Restricted Stock [Member] | ||
Number of Shares | ||
Outstanding at beginning of period | 28,000 | |
Restricted shares vested | (6,000) | |
Outstanding at end of period | 22 | |
Restricted shares granted | 11,500 | |
Grant-date Fair Value | ||
Outstanding at beginning of period | $ / shares | $ 23.97 | |
Restricted shares vested | 28.25 | |
Outstanding at end of period | $ / shares | $ 26.48 | |
Restricted shares granted | $ / shares | $ 28.25 |
EQUITY INCENTIVE PLANS - Additi
EQUITY INCENTIVE PLANS - Additional information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Restricted Stock [Member] | ||
Unrecognized compensation expense for non-vested stock options | $ 484 | |
Unrecognized compensation expense, recognition period | 2 years 2 months 27 days | |
Compensation expense for stock award plan | $ 60 | $ 95 |
Recognize tax Benefit | 17 | 27 |
Employee Stock Option [Member] | ||
Unrecognized compensation expense for non-vested stock options | $ 3 | |
Unrecognized compensation expense, recognition period | 6 months | |
Recognize tax Benefit | $ 0 | 0 |
Share base compensation expenses applicable to stock option plan | $ 1 | $ 7 |
2012 Equity Incentive Plan [Member] | ||
Equity Incentive Plan, options granted | 231,894 | |
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | |
Vesting period (in years) | 5 years | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 20.00% | |
2016 Equity Incentive Plan [Member] | ||
Equity Incentive Plan, options granted | 75,000 | |
Vesting period (in years) | 5 years | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 20,550 |
EARNINGS PER COMMON SHARE (Deta
EARNINGS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
EARNINGS PER COMMON SHARE | ||
Net income applicable to common stock | $ 1,541 | $ 1,302 |
Average number of common shares issued | 2,599,000 | 2,532,000 |
Less: Average unallocated ESOP shares | (88,000) | (101,000) |
Average number of common shares outstanding used to calculate basic earnings per common share | 2,510,907 | 2,431,324 |
Effect of dilutive stock options | 77,000 | 93,000 |
Average number of common shares outstanding used to calculate diluted earnings per share | 2,587,643 | 2,523,907 |
Earnings per common share: | ||
Basic | $ 0.61 | $ 0.54 |
Diluted | $ 0.60 | $ 0.52 |
LEASES - Other information rela
LEASES - Other information related to our operating leases (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
LEASES | |
Cash flows from operating leases, in thousands, year to date 2020 | $ 459 |
Weighted average remaining lease term -operating leases, in years | 5 years 2 months 12 days |
Weighted average discount rate-operating leases | 3.13% |
LEASES - Maturity of the operat
LEASES - Maturity of the operating lease liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
LEASES | ||
2020 | $ 1,400 | |
2021 | 1,714 | |
2022 | 1,417 | |
2023 | 1,340 | |
2024 | 1,136 | |
Thereafter | 1,309 | |
Operating Leases, Future Minimum Payments Due, Total | 8,316 | |
Less imputed interest | (738) | |
Present value of lease liabilities | $ 7,578 | $ 6,543 |
LEASES - Additional information
LEASES - Additional information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Jan. 01, 2019 | |
Operating lease, right-of-use asset | $ 7,489 | $ 6,473 | |
Operating lease, liability | 7,578 | $ 6,543 | |
Operating Lease, Expense | $ 464 | ||
Restatement adjustment [Member] | ASU 2016-02 [Member] | |||
Operating lease, right-of-use asset | $ 7,800 | ||
Operating lease, liability | $ 7,800 |