Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 25, 2014 | Jun. 30, 2013 | |
Document and Entity Information | ' | ' | ' |
Entity Registrant Name | 'Coastway Bancorp, Inc. | ' | ' |
Entity Central Index Key | '0001585023 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Public Float | ' | ' | $0 |
Entity Common Stock, Shares Outstanding | ' | 4,949,179 | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Cash and cash equivalents: | ' | ' |
Cash and due from banks | $2,621 | $2,705 |
Interest-earning deposits | 48,898 | 4,315 |
Total cash and cash equivalents | 51,519 | 7,020 |
Federal Home Loan Bank stock, at cost | 2,694 | 3,036 |
Loans, net of allowance for loan losses of $ 1,656 and $1,569, respectively | 328,576 | 296,999 |
Loans held for sale | 8,648 | 13,642 |
Premises and equipment, net | 25,584 | 24,919 |
Accrued interest receivable | 1,094 | 1,048 |
Real estate held for investment | ' | 1,354 |
Real estate held for sale | 3,515 | ' |
Foreclosed real estate | 1,580 | 2,594 |
Bank-owned life insurance | 4,059 | ' |
Prepaid FDIC insurance assessment | ' | 336 |
Net deferred tax asset | 440 | ' |
Other assets | 4,969 | 3,674 |
Total assets | 432,678 | 354,622 |
Deposits: | ' | ' |
Interest-bearing | 266,165 | 250,185 |
Non-interest-bearing | 63,751 | 57,608 |
Total deposits | 329,916 | 307,793 |
Borrowed funds | 28,000 | 16,343 |
Stock subscriptions | 43,398 | ' |
Net deferred tax liability | ' | 68 |
Accrued expenses and other liabilities | 3,525 | 3,122 |
Total liabilities | 404,839 | 327,326 |
Commitments and contingencies (Notes 5 and 9) | ' | ' |
Retained earnings | 28,034 | 27,812 |
Accumulated other comprehensive loss | -195 | -516 |
Total retained earnings | 27,839 | 27,296 |
Total | $432,678 | $354,622 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Consolidated Balance Sheets | ' | ' | ' |
Loans, allowance for loan losses | $1,656 | $1,569 | $1,424 |
Consolidated_Statements_of_Net
Consolidated Statements of Net Income (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Interest income: | ' | ' |
Interest and fees on loans | $13,935 | $13,173 |
Other interest income | 22 | 34 |
Total interest income | 13,957 | 13,207 |
Interest expense: | ' | ' |
Interest on deposits | 2,499 | 2,505 |
Interest on borrowed funds | 131 | 145 |
Total interest expense | 2,630 | 2,650 |
Net interest income | 11,327 | 10,557 |
Provision for loan losses | 567 | 1,109 |
Net interest income, after provision for loan losses | 10,760 | 9,448 |
Non-interest income: | ' | ' |
Customer service fees | 3,032 | 2,972 |
Gain on sales of loans, net | 2,887 | 4,061 |
Bank-owned life insurance income | 59 | ' |
Other income | 179 | 142 |
Total non-interest income | 6,157 | 7,175 |
Non-interest expenses: | ' | ' |
Salary and employee benefits | 8,446 | 7,359 |
Occupancy and equipment | 2,362 | 1,977 |
Data processing | 1,512 | 1,401 |
Deposit servicing | 662 | 755 |
Professional fees | 525 | 699 |
FDIC insurance assessment | 375 | 292 |
Advertising | 294 | 578 |
Foreclosed real estate | 344 | 274 |
Impairment loss on real estate held for sale | 482 | ' |
Other general and administrative | 1,506 | 1,305 |
Total non-interest expenses | 16,508 | 14,640 |
Income before income taxes | 409 | 1,983 |
Income tax expense | 187 | 835 |
Net income | $222 | $1,148 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Consolidated Statements of Comprehensive Income | ' | ' |
Net income | $222 | $1,148 |
Defined benefit pension plan: | ' | ' |
Gains (losses) arising during the year | 375 | -19 |
Actuarial loss amortized through pension expense | 64 | 63 |
Tax effect | -118 | -18 |
Net-of-tax amount | 321 | 25 |
Comprehensive income | $543 | $1,173 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Retained Earnings (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Increase (Decrease) in Retained Earnings | ' | ' |
Balance | $27,296 | $26,123 |
Comprehensive income | 543 | 1,173 |
Balance | 27,839 | 27,296 |
Retained Earnings | ' | ' |
Increase (Decrease) in Retained Earnings | ' | ' |
Balance | 27,812 | 26,664 |
Comprehensive income | 222 | 1,148 |
Balance | 28,034 | 27,812 |
Accumulated Other Comprehensive Loss | ' | ' |
Increase (Decrease) in Retained Earnings | ' | ' |
Balance | -516 | -541 |
Comprehensive income | 321 | 25 |
Balance | ($195) | ($516) |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | ' | ' |
Net income | $222 | $1,148 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Provision for loan losses | 567 | 1,109 |
Loans originated for sale | -166,580 | -171,182 |
Loans sold | 170,672 | 172,224 |
Loss on loans held for sale transferred to portfolio | 28 | ' |
Gain on sale of portfolio loans sold | -159 | -574 |
Amortization of deferred loan costs | 532 | 485 |
Loss on foreclosed real estate | 231 | 126 |
Income from Bank-owned life insurance | -59 | ' |
Gain on sale of premises and equipment | -8 | ' |
Impairment loss on real estate held for sale | 482 | ' |
Depreciation and amortization expense | 959 | 798 |
Deferred income tax expense (benefit) | -626 | 526 |
Net change in: | ' | ' |
Accrued interest receivable | -46 | -5 |
Prepaid FDIC insurance assessment | 336 | 272 |
Other, net | -453 | -433 |
Net cash provided by operating activities | 6,098 | 4,494 |
Cash flows from investing activities: | ' | ' |
Proceeds from redemption of FHLB stock | 342 | 372 |
Purchase of Bank-owned life insurance | -4,000 | ' |
Loan (originations) principal payments, net | -36,503 | -38,033 |
Proceeds from portfolio loans sold | 4,590 | 8,357 |
Proceeds from sale of foreclosed real estate | 1,053 | 385 |
Purchases of premises and equipment, net | -4,259 | -4,332 |
Net cash used by investing activities | -38,777 | -33,251 |
Cash flows from financing activities: | ' | ' |
Net increase in deposits | 22,123 | 24,837 |
Net change in short-term borrowed funds | 13,000 | 7,000 |
Repayments of long-term borrowed funds | -1,343 | -1,426 |
Stock subscriptions received | 43,398 | ' |
Net cash provided by financing activities | 77,178 | 30,411 |
Net increase in cash and cash equivalents | 44,499 | 1,654 |
Cash and cash equivalents at beginning of period | 7,020 | 5,366 |
Cash and cash equivalents at end of period | 51,519 | 7,020 |
Supplemental cash flow information: | ' | ' |
Interest paid on deposits | 2,498 | 2,505 |
Interest paid on borrowed funds | 135 | 149 |
Income taxes paid | 602 | 652 |
Supplemental non-cash flow information | ' | ' |
Loans transferred to foreclosed real estate | 270 | 1,235 |
Loans held for sale transferred to portfolio loans | 874 | ' |
Real estate transferred from premises and equipment to real estate held for investment | ' | 1,354 |
Real estate transferred from real estate held for investment to real estate held for sale | 1,354 | ' |
Real estate transferred from premises and equipment to real estate held for sale | 2,643 | ' |
Change in other comprehensive income | $321 | $25 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2013 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' |
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Operations and Basis of Presentation | |
Coastway Bancorp, MHC (the "Company"), a state-chartered mutual holding company and its wholly-owned subsidiary, Coastway Bancorp, LLC ("Bancorp"), were formed on February 1, 2013. The Bancorp owned 100% of Coastway Community Bank (the "Bank"). The Bank provides a variety of financial services to individuals and small businesses throughout Rhode Island. Its primary deposit products are savings, demand, money market and term certificate accounts and its primary lending products are residential and commercial mortgage and business loans. The consolidated financial statements include the accounts of the Company, the Bancorp, and the Bank. All significant intercompany balances and transactions have been eliminated in consolidation. | |
Stock Conversion | |
On August 22, 2013, the Board of Directors of the Company, Bancorp and the Bank adopted the Plan of Conversion and Reorganization ("Conversion") to convert the Company from the mutual holding company form of organization to a stock holding company form of organization with a new Maryland-chartered stock corporation, Coastway Bancorp, Inc. ("Corporation"). | |
At December 31, 2013, stock subscriptions received aggregated $43.4 million and are included in liabilities in the accompanying consolidated balance sheets. Conversion costs are capitalized and will reduce the proceeds from the stock sold in the Conversion. At December 31, 2013, conversion costs amounting to $888,000 are included in other assets in the accompanying consolidated balance sheet. | |
On January 14, 2014, the Conversion was completed and Coastway Bancorp, Inc. became the parent holding company for Coastway Community Bank. A total of 4,827,125 shares of Corporation common stock were sold to depositors and to the general public, including those issued to the Corporation's tax-qualified employee benefit plans, at $10.00 per share through which the Corporation received net offering proceeds of approximately $46.4 million. Also, on January 14, 2014, the Corporation contributed $300,000 in cash and 122,054 shares of common stock to Coastway Cares Charitable Foundation II which together totaled 3.15% of the gross proceeds of the offering totaling $1.5 million which will be recorded as a component of non-interest expense in 2014. The total number of shares of common stock outstanding upon completion of the Conversion is 4,949,179 shares. | |
In connection with the Conversion, the Corporation implemented an employee stock ownership plan ("ESOP"), to provide eligible employees the opportunity to own corporation stock. This plan is a tax-qualified retirement plan for the benefit of all Company employees. 395,934 shares of the stock issued in the conversion were acquired by the ESOP, financed by a loan from the Corporation. The loan will be repaid principally from the Bank's contributions to the ESOP. The loan is payable annually over 25 years. Contributions are allocated to eligible participants on the basis of compensation, subject to federal tax law limits. The loan can be prepaid without penalty. | |
The ESOP loan is secured by the stock purchased, which are held in a suspense account for allocation among participants as the loan is repaid. Shares used as collateral to secure the loan will be released and available for allocation to eligible employees as the loan payments are made. | |
As part of the Conversion, Coastway Bancorp, Inc. established a liquidation account in an amount equal to the net worth of Coastway Bancorp, MHC as of the date of the latest consolidated balance sheet appearing in the final prospectus distributed in connection with the Conversion, or $27.5 million. The liquidation account will be maintained for the benefit of eligible account holders and supplemental eligible account holders who maintain their accounts at Coastway Community Bank after the Conversion. The liquidation account will be reduced annually to the extent that such account holders have reduced their qualifying deposits as of each anniversary date. Subsequent increases will not restore an account holder's interest in the liquidation account. In the event of a complete liquidation of the Corporation or the Bank, each eligible account holder will be entitled to receive balances for accounts then held. | |
Subsequent to the Conversion, the Corporation may not declare or pay dividends on, and may not repurchase, any of its shares of common stock if the effect thereof would cause stockholders' equity to be reduced below the liquidation account balance, applicable regulatory capital maintenance requirements, or if such declaration, payment or repurchase would otherwise violate regulatory requirements. | |
Use of Estimates | |
In preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses and the valuation of deferred tax assets. | |
Reclassification | |
Certain amounts in the prior period consolidated financial statements have been reclassified to conform to the 2013 presentation. | |
Cash and Cash Equivalents | |
Cash and cash equivalents include cash on hand, amounts due from banks and interest-earning deposits. Interest-earning deposits are carried at cost which approximates fair value and mature either daily or on demand. | |
Fair Value Hierarchy | |
The Bank groups its assets and liabilities measured at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value. | |
Level 1—Valuation is based on quoted prices in active markets for identical assets. Valuations are obtained from readily available pricing sources for market transactions involving identical assets. | |
Level 2—Valuation is based on observable inputs other than Level 1 prices, such as quoted prices for similar assets; 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. | |
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 or liabilities. Level 3 assets or liabilities include financial instruments whose value is determined using unobservable inputs to pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. | |
Transfers between levels, if any, are recognized at the end of a reporting period. | |
Federal Home Loan Bank Stock | |
The Bank, as a member of the Federal Home Loan Bank ("FHLB") system, is required to maintain an investment in capital stock of the FHLB. Based on the redemption provisions of the FHLB, the stock has no quoted market value and is carried at cost. At its discretion, the FHLB may declare dividends on the stock. The Bank reviews for impairment based on the ultimate recoverability of the cost basis in the FHLB stock. As of and December 31, 2013 and 2012, no impairment has been recognized. | |
Loans | |
The Bank's lending activities are conducted principally in Rhode Island. The Bank grants one-to-four family residential loans as well as commercial business, commercial real estate and consumer loans. Most loans granted by the Bank are collateralized by real estate. The ability and willingness of the one-to-four family residential and consumer borrowers to honor their repayment commitments is generally dependent on the level of economic activity within the borrowers' geographic area and real estate values. The ability and willingness of commercial loan borrowers to repay their loan commitments is generally dependent on the state of the real estate economic sector in the borrowers' geographic area and the general economy. | |
Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for charge-offs, the allowance for loan losses, and any deferred fees or costs on originated loans. 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. | |
For loan disclosures and the allowance for loan losses estimate, the Bank's loan portfolio includes residential 1-4 family real estate, home equity loans and lines of credit, commercial real estate, commercial business, commercial construction, Small Business Administration ("SBA") and consumer segments. | |
The accrual of interest on loans is discontinued at the time the loan is 90 days past due. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued, but not collected for loans that are placed on nonaccrual or charged off, is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. | |
The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. For impaired loans that are deemed collateral dependent, the recorded balance of the loan is reduced to fair value of the collateral net of estimated selling costs by charge off. | |
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 and specific components, as further described below. | |
General component | |
The general component of the allowance for loan losses is based on historical loss experience adjusted for qualitative factors stratified by loan segments. Management uses a ten year historical loss period to capture relevant loss data for each loan segment. This historical loss factor is adjusted for the following qualitative factors: levels/trends in delinquencies; charge off trends in the past three years; weighted average risk weightings; loan concentrations; management's assessment of internal factors; and management's assessment of external factors such as interest rates, real estate markets and local and national economic factors. There were no changes in the Bank's policies or methodology pertaining to the general component of the allowance for loan losses during the year ended December 31, 2013. Refer to Note 3 for additional information regarding the amounts attributable to historical loss and qualitative factors. | |
The qualitative factors are determined based on the various risk characteristics of each loan segment. Risk characteristics relevant to each portfolio segment are as follows: | |
One-to-four family residential real estate and home equity—Loans in these segments are collateralized by owner-occupied residential real estate and repayment is dependent on the credit quality of the individual borrower. The Bank generally has first liens on one-to-four family residential real estate loans and first or second liens on property securing home equity loans and equity lines-of-credit. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in these segments. | |
Commercial—Commercial loan segments include commercial real estate, commercial and industrial loans for businesses and construction financing for business/properties located principally in Rhode Island. For commercial real estate loans, the underlying cash flows generated by the properties are 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. Non-real estate commercial loans are made to businesses and are generally secured by assets of the business. Repayment is expected from the cash flows of the business. Commercial construction generally represent loans to finance construction of retail and office space. Commercial loans also include loans made under the SBA 504 program which is an economic development program which finances the expansion of small businesses. The Bank generally provides 50% of the projected costs, and the loan is secured by a first lien on the commercial property. The SBA does not provide a guarantee on loans made under the SBA 504 program. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality in this segment. Management monitors the cash flows of these loans. | |
SBA—Loans in this segment include commercial loans underwritten using SBA guidelines for the SBA's 7(a) program and include both guaranteed and unguaranteed loans. Under the SBA 7(a) Program, loans may qualify for guarantees up to 85% of principal and accrued interest. The Bank does not treat the SBA guarantee as a substitute for a borrower meeting reasonable credit standards. SBA guarantees are generally sought on loans that exhibit minimum capital levels, a short time in business, lower collateral coverage or maximum loan terms beyond the Bank's normal underwriting criteria. For a number of SBA loans, the Bank has sold portions of certain loans and retains the unguaranteed portion while continuing to service the entire loan. The guaranteed portion of SBA loans in the Bank's portfolio is not allocated a general reserve because the Bank has not experienced losses on such loans and management expects the guarantees will be effective, if necessary. | |
Consumer—This segment includes unsecured and vehicle loans and repayment is dependent on the credit quality of the individual borrower. | |
Specific component | |
The specific component relates to loans that are classified as impaired. Based on internal credit ratings, commercial and SBA loans are evaluated for impairment on a loan-by-loan basis. Impairment is measured by either the present value of expected future cash flows discounted at the loan's effective interest rate or the fair value of the collateral if the loan is collateral dependent. An allowance is established when the discounted cash flows or collateral value of the impaired loan is lower than the carrying value of that loan. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Bank does not separately identify individual consumer and performing residential real estate 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 Bank 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 Bank periodically may agree to modify the contractual terms of loans, such as a reduction in interest rate of the loan for some period of time, an extension of the maturity date or an extension of time to make payments with the delinquent payments added to the end of the loan term. 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. Loans on non-accrual status at the date of modification are initially classified as non-accrual troubled debt restructurings. TDRs may be returned to actual status after a period of satisfactory payment performance per the terms of the restructuring, generally six months of current payments. | |
Loans Held for Sale and Mortgage Banking Activities | |
Loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance by charges to income. One-to-four family residential loans are sold with servicing released. Gains and losses on loan sales are recorded in non-interest income as gains on sale of loans, net. Commitments to originate loans to be held for sale and forward loan sale commitments are derivatives and are recorded at fair value with changes in fair value included as a component of gains on sale of loans, net. | |
Premises and Equipment | |
Land is carried at cost. Buildings and equipment are carried at cost, less accumulated depreciation and amortization computed on the straight-line method over the estimated useful lives of the assets or the expected terms of the leases, if shorter. Expected terms include lease option periods to the extent that the exercise of such options is reasonably assured. | |
Real Estate Held for Investment | |
In 2012, the Bank reclassified the carrying value of undeveloped land acquired for a branch location in the amount of $1.4 million from premises and equipment to real estate held for investment. This asset did not meet held-for-sale criteria as management intended to lease the land and there was no immediate plan for sale. Upon transfer, the asset was evaluated for impairment and management determined that the asset was not impaired because future undiscounted cash flows of the expected rental payments and the salvage value of the land exceeded the carrying value at December 31, 2012. | |
Real Estate Held for Sale | |
Real estate held for sale is carried at the lower of cost or fair value, less cost to sell. Real estate is classified as held for sale when management has committed to a plan to sell the asset; the asset is available for immediate sale in its present condition; an active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated; the sale of the asset is probable, and transfer of the asset is expected to qualify for recognition of a sale within one year; the asset is being actively marketed for sale; and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. | |
On June 1, 2013, upon expiration of the letter of intent from the expected lessee, the Bank reclassified the $1.4 million carrying value of the undeveloped land classified as real estate held for investment at December 31, 2012 to real estate held for sale as management intends to sell the land and all of the above criteria have been met. | |
On June 1, 2013, the Bank reclassified land and building previously purchased for the potential relocation of the corporate headquarters with a carrying value of $2.6 million from premises and equipment to real estate held for sale as the Bank determined that the costs to improve the property for its intended use exceeded its initial expectations. | |
The Bank recorded a $482,000 impairment loss in non-interest expenses upon transfer of the aforementioned properties to real estate held for sale. | |
Foreclosed Real Estate | |
Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value, less cost to sell, at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less costs to sell. Revenue and expenses from operations, changes in the valuation allowance, gains or losses on sales and any direct write-downs are included in foreclosed real estate expenses. Foreclosed real estate consists of residential real estate properties. | |
Bank-owned Life Insurance | |
Bank-owned life insurance policies are reflected in the Consolidated Balance Sheets at cash surrender value. Changes in cash surrender value are reflected in non-interest income in the Consolidated Statements of Net Income and are not subject to income taxes. | |
Transfers of Financial Assets | |
Transfers of an entire financial asset, a group of entire financial assets, or a participating interest in an entire financial asset are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Bank, (2) the transferee obtains the right to pledge or exchange the transferred assets, and (3) the Bank does not maintain effective control over the transferred assets. | |
During the normal course of business, the Bank may transfer a portion of a financial asset, for example, a participation loan or the government guaranteed portion of a loan. In order to be eligible for sales treatment, the transfer of the portion of the loan must meet the criteria of a participating interest. If it does not meet the criteria of a participating interest, the transfer must be accounted for as a secured borrowing. In order to meet the criteria for a participating interest, all cash flows from the loan must be divided proportionately, the rights of each loan holder must have the same priority, the loan holders must have no recourse to the transferor other than standard representations and warranties and no loan holder has the right to pledge or exchange the entire loan. | |
Advertising Costs | |
Advertising costs are expensed as incurred. | |
Defined Benefit Plan | |
The compensation cost of an employee's pension benefit is recognized on the projected unit credit method over the employee's approximate service period. The aggregate cost method is utilized for funding purposes. | |
The Bank accounts for its defined benefit pension plan using an actuarial model that allocates pension costs over the service period of employees in the plan. The Bank accounts for the over-funded or under-funded status of its defined benefit plan as an asset or liability in its balance sheet and recognizes changes in the funded status in the year in which the changes occur through other comprehensive income/loss. | |
Income Taxes | |
Deferred income tax assets and liabilities are determined using the liability method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the book and tax basis of the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws. A valuation allowance is established against deferred tax assets when, based upon the available evidence including historical and projected taxable income, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company does not have any uncertain tax positions at December 31, 2013 and 2012 which require accrual or disclosure. The Company records interest and penalties as part of income tax expense, if applicable. | |
Comprehensive Income/Loss | |
Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities are reported as a separate component of the retained earnings section of the balance sheet, such items, along with net income, are components of comprehensive income/loss. The Bank measures the pension plan assets and pension obligations on an annual basis and recognizes in the financial statements an asset or liability for the plan's funded status. Accumulated other comprehensive loss represents the actuarial loss that will be amortized through pension expense, net of tax and amounted to $324,000 and $764,000, at December 31, 2013 and 2012, respectively net of related tax effects of $130,000 and $248,000, respectively. | |
Segments and Significant Group Concentrations of Credit Risk | |
Management evaluates the Bank's performance and allocates resources based on a single segment concept. Accordingly, there are no separately identified operating segments for which discrete financial information is available. The Bank does not derive revenues from or have assets located in foreign countries, nor does it derive revenue from any single customer that represents 10% or more of the Bank's total revenues. | |
Recent Accounting Pronouncements | |
As an "emerging growth company," as defined in Title 1 of the Jumpstart Our Business Startups (JOBS) Act, the Bank has elected to use the extended transition period to delay adoption of new or reissued accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. Accordingly, the consolidated financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards. As of December 31, 2013, there is no significant difference in the comparability of the financial statements as a result of this extended transition period. | |
In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-02, Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income. This update requires entities to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, entities are required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. This ASU is effective prospectively for public entities for reporting periods beginning after December 15, 2012 and for nonpublic entities for reporting periods beginning after December 15, 2013. Under the extended transition period for an emerging growth company, the Corporation will adopt this ASU on January 1, 2014. Management does not expect this ASU to have a material effect on the presentation of comprehensive income in the Corporation's consolidated financial statements. | |
RESTRICTIONS_ON_CASH_AND_AMOUN
RESTRICTIONS ON CASH AND AMOUNTS DUE FROM BANKS | 12 Months Ended |
Dec. 31, 2013 | |
RESTRICTIONS ON CASH AND AMOUNTS DUE FROM BANKS | ' |
RESTRICTIONS ON CASH AND AMOUNTS DUE FROM BANKS | ' |
2. RESTRICTIONS ON CASH AND AMOUNTS DUE FROM BANKS | |
The Bank is required to maintain average cash balances on hand or with the Federal Reserve Bank. At December 31, 2013 and 2012, the reserve balance amounted to $1.9 million and $1.8 million, respectively. | |
LOANS
LOANS | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||
LOANS | ' | |||||||||||||||||||||||||
LOANS | ' | |||||||||||||||||||||||||
3. LOANS | ||||||||||||||||||||||||||
A summary of the balances of loans follows: | ||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Residential real estate mortgage loans: | ||||||||||||||||||||||||||
1-4 family | 98,180 | $ | 78,633 | |||||||||||||||||||||||
Home equity loans and lines of credit | 83,334 | 83,154 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Total residential real estate mortgage loans | 181,514 | 161,787 | ||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||
Commercial real estate | 91,609 | 81,754 | ||||||||||||||||||||||||
Commercial business | 8,301 | 7,899 | ||||||||||||||||||||||||
Commercial construction | 7,099 | 3,302 | ||||||||||||||||||||||||
SBA | 38,004 | 39,628 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Total commercial loans | 145,013 | 132,583 | ||||||||||||||||||||||||
Consumer | 1,672 | 2,320 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Total loans | 328,199 | 296,690 | ||||||||||||||||||||||||
Allowance for loan losses | (1,656 | ) | (1,569 | ) | ||||||||||||||||||||||
Net deferred loan costs | 2,033 | 1,878 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Loans, net | $ | 328,576 | $ | 296,999 | ||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
| | | | | | | | |||||||||||||||||||
SBA loans carry a lower credit risk profile than standard commercial loans due to government guarantees inherent in SBA lending. Generally, loans with balances in excess of $150,000 have a 75% SBA guarantee, loans less than $150,000 have an 85% guarantee, and lines of credit have a 50% guarantee. Guaranteed portions of SBA loans total $27.3 million and $29.4 million at December 31, 2013 and 2012, respectively. | ||||||||||||||||||||||||||
Activity in the allowance for loan losses and allocation of the allowance to loan segments follows: | ||||||||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||||
Residential | Home | Commercial | Commercial | Commercial | SBA | Consumer | Total | |||||||||||||||||||
1-4 Family | Equity | Real Estate | Business | Construction | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||
Beginning balance | $ | 393 | $ | 674 | $ | 261 | $ | 25 | $ | 11 | $ | 185 | $ | 20 | $ | 1,569 | ||||||||||
Provisions (credit) for loan losses | 148 | 343 | 60 | 4 | 13 | 2 | (3 | ) | 567 | |||||||||||||||||
Loans charged-off | (94 | ) | (424 | ) | — | — | — | (33 | ) | (15 | ) | (566 | ) | |||||||||||||
Recoveries | 15 | 12 | — | — | — | 43 | 16 | 86 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance | $ | 462 | $ | 605 | $ | 321 | $ | 29 | $ | 24 | $ | 197 | $ | 18 | $ | 1,656 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
December 31, 2013 | ||||||||||||||||||||||||||
Allowance for impaired loans | $ | 94 | $ | 66 | $ | — | $ | — | $ | — | $ | 34 | $ | 7 | $ | 201 | ||||||||||
Allowance for non-impaired loans | 368 | 539 | 321 | 29 | 24 | 163 | 11 | 1,455 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total allowance for loan losses | $ | 462 | $ | 605 | $ | 321 | $ | 29 | $ | 24 | $ | 197 | $ | 18 | $ | 1,656 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired loans | $ | 6,499 | $ | 359 | $ | — | $ | — | $ | — | $ | 2,681 | $ | 33 | $ | 9,572 | ||||||||||
Non-impaired loans | 91,681 | 82,975 | 91,609 | 8,301 | 7,099 | 35,323 | 1,639 | 318,627 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans | $ | 98,180 | $ | 83,334 | $ | 91,609 | $ | 8,301 | $ | 7,099 | $ | 38,004 | $ | 1,672 | $ | 328,199 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Year Ended December 31, 2012 | ||||||||||||||||||||||||||
Residential | Home | Commercial | Commercial | Commercial | SBA | Consumer | Total | |||||||||||||||||||
1-4 Family | Equity | Real Estate | Business | Construction | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||
Beginning balance | $ | 531 | $ | 501 | $ | 214 | $ | 13 | $ | 1 | $ | 149 | $ | 15 | $ | 1,424 | ||||||||||
Provisions (credit) for loan losses | 7 | 872 | 47 | 12 | 10 | 114 | 47 | 1,109 | ||||||||||||||||||
Loans charged-off | (154 | ) | (707 | ) | — | — | — | (117 | ) | (58 | ) | (1,036 | ) | |||||||||||||
Recoveries | 9 | 8 | — | — | — | 39 | 16 | 72 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance | $ | 393 | $ | 674 | $ | 261 | $ | 25 | $ | 11 | $ | 185 | $ | 20 | $ | 1,569 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
The allowance allocated by segment is as follows: | ||||||||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||||||||
Residential | Home Equity | Commercial | Commercial | Commercial | SBA | Consumer | Total | |||||||||||||||||||
1-4 Family | Real Estate | Business | Construction | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Allowance for impaired loans | $ | 104 | $ | 132 | $ | — | $ | — | $ | — | $ | 19 | $ | 7 | $ | 262 | ||||||||||
Allowance for non-impaired loans | 289 | 542 | 261 | 25 | 11 | 166 | 13 | 1,307 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total allowance for loan losses | $ | 393 | $ | 674 | $ | 261 | $ | 25 | $ | 11 | $ | 185 | $ | 20 | $ | 1,569 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired loans | $ | 6,727 | $ | 1,006 | $ | — | $ | — | $ | — | $ | 2,074 | $ | 30 | $ | 9,837 | ||||||||||
Non-impaired loans | 71,906 | 82,148 | 81,754 | 7,899 | 3,302 | 37,554 | 2,290 | 286,853 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans | $ | 78,633 | $ | 83,154 | $ | 81,754 | $ | 7,899 | $ | 3,302 | $ | 39,628 | $ | 2,320 | $ | 296,690 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Of the $2.7 million and $2.1 million of impaired SBA loans at December 31, 2013 and 2012, respectively, guaranteed portions amounted to $2.3 million and $1.8 million, respectively. | ||||||||||||||||||||||||||
The following represents the amount of the total general allowance for loan losses presented by the amount attributable to the ten year historical loss experience and the amount attributable to qualitative factors as of the dates noted. The table excludes the amount of the specific allowance attributable to impaired loans. | ||||||||||||||||||||||||||
General | Qualitative | Total | ||||||||||||||||||||||||
Allowance | Factors | General | ||||||||||||||||||||||||
10 Year Loss | Allowance | |||||||||||||||||||||||||
History | ||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
December 31, 2013 | $ | 592 | $ | 863 | $ | 1,455 | ||||||||||||||||||||
Percent of general allowance | 41 | % | 59 | % | 100 | % | ||||||||||||||||||||
December 31, 2012 | $ | 508 | $ | 799 | $ | 1,307 | ||||||||||||||||||||
Percent of general allowance | 39 | % | 61 | % | 100 | % | ||||||||||||||||||||
The following discussion focuses on the loan segments where there has been the majority of the charge-off activity over the past three years. | ||||||||||||||||||||||||||
The general allowance on home equity loans and lines of credit has increased since December 31, 2010 to reflect increased recent trends in historical loss experience as compared to the Bank's ten-year loss history. During the year ended December 31, 2012, our home equity loan and lines of credit charge-offs increased as compared to 2011 due primarily to one large loan charge-off of $250,000. This $250,000 charge-off occurred as a result of a legal determination in 2012 that a parcel of land was not able to be bifurcated which negatively impacted the fair value of the collateral securing the loan. Based on the nature of this loss, the Bank did not believe that this elevated one year loss experience was indicative of a trend in the home equity loan and lines of credit portfolio. However, the Bank did increase both its historical loss experience, and its qualitative factors in 2012. The home equity qualitative adjustment was 27 basis points at December 31, 2011, increased to 44 basis points at December 31, 2012 and decreased to 38 basis points at December 31, 2013. The 17 basis point increase in the qualitative factor during 2012 was due to an increase in the Bank's three year loss experience. The 6 basis point decrease in the qualitative factor during 2013 was to offset the increase in the ten-year historical loss factor of 5 basis points, given the consistent three year historical loss experience and a 1 basis point decrease in the real estate market qualitative factor given improvement in real estate values. The loss trends in the home equity loan segment during the year ended December 31, 2013 remained relatively consistent with the trends in historical loss experience which occurred in 2010, 2011 and 2012, excluding the one large unusual charge-off in 2012. | ||||||||||||||||||||||||||
In 2011, the Bank experienced one large charge-off of $479,000 on a one- to four-family residential real estate loan that was transferred into foreclosed real estate. The ten year historical loss factor was 14 basis points at December 31, 2011. The Bank's loss experience on one- to four-family residential real estate loans has improved since 2011. During 2012 and 2013, the Bank's net charge-offs in this loan segment totaled $145,000 and $79,000 respectively, as compared to $820,000 in net charge-offs during 2011. Qualitative adjustments for one- to four-family residential real estate loans at December 31, 2013 amounted to 23 basis points as compared to 24 basis points at December 31, 2012. The qualitative adjustment decreased 25 basis points during 2012 to 24 basis points from 49 basis points at December 31, 2011 based on consideration of the improvement in historical losses during the year ended 2012; and in consideration of an increase in the ten year historical loss factor of 2 basis points during 2012. The qualitative adjustment decreased 1 basis point in 2013 given improvement in real estate values. | ||||||||||||||||||||||||||
The following is a summary of past due and non-accrual loans at December 31, 2013 and 2012: | ||||||||||||||||||||||||||
30 - 59 Days | 60 - 89 Days | 90 Days | Total | Past Due | Loans on | |||||||||||||||||||||
Past Due | Past Due | or more | Past Due | > 90 Days and | Non-accrual | |||||||||||||||||||||
Past Due | Still Accruing | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
Residential 1-4 family | $ | 925 | $ | 1,573 | $ | 1,035 | $ | 3,533 | $ | — | $ | 4,790 | ||||||||||||||
Home equity loans and lines of credit | 294 | — | 53 | 347 | — | 158 | ||||||||||||||||||||
Commercial real estate | — | — | — | — | — | — | ||||||||||||||||||||
Commercial business | — | — | — | — | — | — | ||||||||||||||||||||
Commercial construction | — | — | — | — | — | — | ||||||||||||||||||||
SBA | 1,131 | 81 | 977 | 2,189 | — | 1,508 | ||||||||||||||||||||
Consumer | 19 | — | — | 19 | — | 3 | ||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||||
Total | $ | 2,369 | $ | 1,654 | $ | 2,065 | $ | 6,088 | $ | — | $ | 6,459 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | | | | | | | |||||||
December 31, 2012 | ||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
Residential 1-4 family | $ | 1,721 | $ | 717 | $ | 2,652 | $ | 5,090 | $ | — | $ | 5,773 | ||||||||||||||
Home equity loans and lines of credit | 25 | 83 | 640 | 748 | — | 804 | ||||||||||||||||||||
Commercial real estate | — | — | — | — | — | — | ||||||||||||||||||||
Commercial | — | — | — | — | — | — | ||||||||||||||||||||
Commercial construction | — | — | — | — | — | — | ||||||||||||||||||||
SBA | 361 | — | 494 | 855 | — | 1,071 | ||||||||||||||||||||
Consumer | 42 | — | — | 42 | — | 13 | ||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||||
Total | $ | 2,149 | $ | 800 | $ | 3,786 | $ | 6,735 | $ | — | $ | 7,661 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | | | | | | | |||||||
The following is information pertaining to impaired loans: | ||||||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||||||||||||
Recorded | Unpaid | Related | Recorded | Unpaid | Related | |||||||||||||||||||||
Investment | Principal | Allowance | Investment | Principal | Allowance | |||||||||||||||||||||
Balance | Balance | |||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Impaired loans without a valuation allowance: | ||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
Residential 1-4 family | $ | 3,689 | $ | 3,850 | $ | — | $ | 3,256 | $ | 3,330 | $ | — | ||||||||||||||
Home equity loans and lines of credit | 104 | 281 | — | 322 | 490 | — | ||||||||||||||||||||
SBA | 1,764 | 1,838 | — | 1,624 | 1,750 | — | ||||||||||||||||||||
Consumer | 12 | 12 | — | — | — | — | ||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||||
Total | $ | 5,569 | $ | 5,981 | $ | — | $ | 5,202 | $ | 5,570 | $ | — | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | | | | | | | |||||||
Impaired loans with a valuation allowance: | ||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
Residential 1-4 family | $ | 2,810 | $ | 2,810 | $ | 94 | $ | 3,471 | $ | 3,471 | $ | 104 | ||||||||||||||
Home equity loans and lines of credit | 255 | 267 | 66 | 684 | 684 | 132 | ||||||||||||||||||||
SBA | 917 | 917 | 34 | 450 | 450 | 19 | ||||||||||||||||||||
Consumer | 20 | 20 | 7 | 30 | 30 | 7 | ||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||||
Total | $ | 4,002 | $ | 4,014 | $ | 201 | $ | 4,635 | $ | 4,635 | $ | 262 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | | | | | | | |||||||
Year ended | Year ended | |||||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||||||||||||
Average | Interest | Interest Income | Average | Interest | Interest Income | |||||||||||||||||||||
Recorded | Income | Recognized on | Recorded | Income | Recognized on | |||||||||||||||||||||
Investment | Recognized | Cash Basis | Investment | Recognized | Cash Basis | |||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
Residential 1-4 family | $ | 6,752 | $ | 229 | $ | 141 | $ | 6,053 | $ | 209 | $ | 120 | ||||||||||||||
Home equity loans and lines of credit | 623 | 36 | 26 | 848 | 25 | 18 | ||||||||||||||||||||
Commercial business | 23 | — | — | — | — | — | ||||||||||||||||||||
SBA | 2,297 | 81 | 19 | 2,139 | 104 | 45 | ||||||||||||||||||||
Consumer | 38 | 2 | 1 | 46 | — | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||||
Total | $ | 9,733 | $ | 348 | $ | 187 | $ | 9,086 | $ | 338 | $ | 183 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | | | | | | | |||||||
No additional funds are committed to be advanced in connection with impaired loans at December 31, 2013 and 2012. | ||||||||||||||||||||||||||
The following is a summary of troubled debt restructurings for the years ended December 31, 2013 and 2012: | ||||||||||||||||||||||||||
Number of | Pre-Modification | Post-Modification | ||||||||||||||||||||||||
Contracts | Outstanding | Outstanding | ||||||||||||||||||||||||
Recorded | Recorded | |||||||||||||||||||||||||
Investment | Investment | |||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||||
Residential 1-4 family | 9 | $ | 2,229 | $ | 2,229 | |||||||||||||||||||||
Home equity and lines of credit | 3 | 225 | 225 | |||||||||||||||||||||||
SBA | 3 | 307 | 307 | |||||||||||||||||||||||
Consumer | 2 | 13 | 13 | |||||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||||||||
Residential 1-4 family | 12 | $ | 3,409 | $ | 3,409 | |||||||||||||||||||||
Home equity and lines of credit | 3 | 228 | 228 | |||||||||||||||||||||||
SBA | 2 | 257 | 257 | |||||||||||||||||||||||
Consumer | 2 | 31 | 31 | |||||||||||||||||||||||
The terms for loan modifications are determined on a loan-by-loan basis. In connection with troubled debt restructurings, terms may be modified to fit the ability of the borrower to repay in line with their current financial status, which may include a temporary reduction in the interest rate to market rate or below, a change in the terms to grant principal or interest deferments, or movement of past due amounts to the back-end of the loan or refinancing. All deferred payments will be collected at the time of final repayment. For qualifying loans the Bank will permit multiple modifications to a loan if the borrower performs under the modified terms. During the year ended December 31, 2013, the Bank modified nine loans totaling $897,000 that were performing troubled debt restructured loans at the time of modification. During 2012, the Bank modified eight loans totaling $2.5 million that were performing troubled debt restructured loans at the time of modification. These loans are included in the table above and are reported as impaired loans at December 31, 2013 and 2012. Management performs a discounted cash flow calculation to determine the amount of the impairment reserve required on each of the troubled debt restructurings and must exercise judgment to determine the amounts and timing of cash flows. Any impairment reserve required is recorded through the provision for loan losses. TDRs are reported as non-accrual loans unless the loan qualified for accruing status at the time of the restructure, or the loan has performed according to the new contractual terms for at least six months. | ||||||||||||||||||||||||||
The following is a summary of troubled debt restructurings that defaulted in the first twelve months after restructure during the years ended December 31, 2013 and 2012: | ||||||||||||||||||||||||||
Number of | Recorded | |||||||||||||||||||||||||
Contracts | Investment | |||||||||||||||||||||||||
(Dollars | ||||||||||||||||||||||||||
in thousands) | ||||||||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||||
Residential 1-4 family | 7 | $ | 2,313 | |||||||||||||||||||||||
Home equity and lines of credit | 3 | 225 | ||||||||||||||||||||||||
SBA | 1 | 44 | ||||||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||||||||
Residential 1-4 family | 1 | $ | 310 | |||||||||||||||||||||||
SBA | 1 | 161 | ||||||||||||||||||||||||
Credit Quality Information | ||||||||||||||||||||||||||
Commercial and SBA loans are risk rated based on key factors such as management ability, financial condition, debt repayment ability, collateral, industry conditions and loan structure. Risk ratings 1 through 5 are considered "pass" rated, risk rating 5.5 is considered "watch list", risk rating 6 is considered "special mention", while risk ratings 7, 8 and 9 are considered "classified" ratings. | ||||||||||||||||||||||||||
Risk Rating 1—Excellent: loans to borrowers of the strongest financial condition, or loans to borrowers that are secured by cash collateral or highly liquid marketable securities with ample margin. Quality is unquestioned with no known credit deficiencies or technical exceptions. | ||||||||||||||||||||||||||
Risk Rating 2—Very Strong: high quality loans to businesses with solid and consistent financial condition with no major problems, but with less stature than credits with a risk rating of 1. The probability of serious financial deterioration is slight. | ||||||||||||||||||||||||||
Risk Rating 3—Strong: above average quality loans to businesses with solid and consistent financial condition that conform to most acceptable credit standards. The probability of serious financial deterioration is below average, although some vulnerability to changing economic conditions may be evidenced. | ||||||||||||||||||||||||||
Risk Rating 4—Good: average quality loans to businesses with sound financial condition that conform to most acceptable credit standards. The probability of serious financial deterioration is average, with vulnerability to changing economic conditions evidenced. | ||||||||||||||||||||||||||
Risk Rating 5—Satisfactory: loans that possess above average risk, but exhibit current factors that indicate debt repayment ability. Borrowers in this category currently exhibit satisfactory operations, but may be highly susceptible to economic downturns or events that can result in a significant impact on the borrower's ability to properly service debt. | ||||||||||||||||||||||||||
Risk rating 5.5—Watch List: loans in this category exhibit the characteristics associated with 5 risk-rated loans, but possess negative factors that warrant increased oversight yet do not warrant a negative risk rating. Factors may include short-term negative operating trends, temporary liquidity shortfalls, modest delinquency, missing or incomplete financial information, or negative balance sheet trends. | ||||||||||||||||||||||||||
Risk Rating 6—Special Mention: these loans have potential weaknesses and require management's close attention. If these weaknesses are not addressed, they may weaken the prospects for repayment at a future date. Special mention assets do not expose the institution to sufficient risk to warrant a classified rating. | ||||||||||||||||||||||||||
Risk Rating 7—Substandard: loans in this category are inadequately protected by the current financial condition and repayment ability of the borrower or pledged collateral, if any. These assets have a well-defined weakness(es) that jeopardizes the repayment of the debt in full, and are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. | ||||||||||||||||||||||||||
Risk Rating 8—Doubtful: loans have all the weaknesses of those classified substandard. In addition, it is highly unlikely that a doubtful asset can be collected or liquidated in full. The possibility of loss is extremely high. However, because of certain important and reasonably specific pending factors, which may work to strengthen the asset, its classification as a loss is deferred until the asset's status can be better determined. | ||||||||||||||||||||||||||
Risk Rating 9—Loss: loans classified as loss are considered uncollectible and of such little value that they are no longer considered bankable. This classification does not mean that the asset has no recovery or salvage value. However, it is not practical or desirable to defer writing off the asset even though partial recovery may occur in the future. | ||||||||||||||||||||||||||
On an annual basis, or more often if needed, the Bank formally reviews the ratings on commercial and SBA loans. On an annual basis, the Bank 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. Credit quality for residential real estate mortgage and consumer loans is determined by monitoring loan payment history and on-going communications with borrowers. | ||||||||||||||||||||||||||
The following table presents the Bank's commercial loans by risk rating. | ||||||||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||
Commercial | Commercial | Commercial | SBA | Total | ||||||||||||||||||||||
Real Estate | Business | Construction | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Loans rated 1 - 5 | $ | 88,578 | $ | 7,898 | $ | 5,926 | $ | 30,723 | $ | 133,125 | ||||||||||||||||
Loans rated 5.5 | 2,858 | 168 | — | 2,493 | 5,519 | |||||||||||||||||||||
Loans rated 6 | — | — | — | 1,007 | 1,007 | |||||||||||||||||||||
Loans rated 7 | 173 | 235 | 1,173 | 3,622 | 5,203 | |||||||||||||||||||||
Loans rated 8 | — | — | — | 159 | 159 | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | ||||||||||
$ | 91,609 | $ | 8,301 | $ | 7,099 | $ | 38,004 | $ | 145,013 | |||||||||||||||||
| | | | | | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | | | | | | ||||||||||
December 31, 2012 | ||||||||||||||||||||||||||
Commercial | Commercial | Commercial | SBA | Total | ||||||||||||||||||||||
Real Estate | Business | Construction | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Loans rated 1 - 5 | $ | 80,138 | $ | 7,234 | $ | 3,302 | $ | 29,401 | $ | 120,075 | ||||||||||||||||
Loans rated 5.5 | 1,616 | 176 | — | 4,204 | 5,996 | |||||||||||||||||||||
Loans rated 6 | — | — | — | 1,257 | 1,257 | |||||||||||||||||||||
Loans rated 7 | — | 489 | — | 4,766 | 5,255 | |||||||||||||||||||||
Loans rated 8 | — | — | — | — | — | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | ||||||||||
$ | 81,754 | $ | 7,899 | $ | 3,302 | $ | 39,628 | $ | 132,583 | |||||||||||||||||
| | | | | | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | | | | | | ||||||||||
LOAN_SERVICING
LOAN SERVICING | 12 Months Ended |
Dec. 31, 2013 | |
LOAN SERVICING | ' |
LOAN SERVICING | ' |
4. LOAN SERVICING | |
The Bank has transferred a portion of its originated commercial and SBA loans to participating lenders. The amounts transferred have been accounted for as sales and are therefore not included in the Bank's accompanying consolidated balance sheets. The Bank and participating lenders share ratably in cash flows and any gains or losses that may result from a borrower's lack of compliance with contractual terms of the loan. The Bank continues to service the loans on behalf of the participating lenders and, as such, collects cash payments from the borrowers, remits payments (net of servicing fees) to participating lenders and disburses required escrow funds to relevant parties. At December 31, 2013 and 2012, the Bank was servicing commercial loans for participants aggregating $7.7 million and $5.4 million, respectively. At December 31, 2013 and 2012, the Bank was servicing SBA loans for participants aggregating $20.2 million and $19.4 million, respectively. | |
PREMISES_AND_EQUIPMENT
PREMISES AND EQUIPMENT | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
PREMISES AND EQUIPMENT | ' | |||||||
PREMISES AND EQUIPMENT | ' | |||||||
5. PREMISES AND EQUIPMENT | ||||||||
A summary of the cost and accumulated depreciation and amortization of premises and equipment follows: | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Land | $ | 7,604 | $ | 8,729 | ||||
Buildings and improvements | 18,018 | 16,086 | ||||||
Furniture, fixtures and equipment | 5,204 | 5,079 | ||||||
Leasehold improvements | 111 | 387 | ||||||
Fixed assets in process | 1,399 | 1,552 | ||||||
| | | | | | | | |
32,336 | 31,833 | |||||||
Less accumulated depreciation and amortization | (6,752 | ) | (6,914 | ) | ||||
| | | | | | | | |
$ | 25,584 | $ | 24,919 | |||||
| | | | | | | | |
| | | | | | | | |
Depreciation and amortization expense amounted to $959,000 and $798,000 for the years ended December 31, 2013 and 2012, respectively. | ||||||||
Fixed assets in process at December 31, 2013 represent additional construction costs related to the new corporate headquarters building in excess of what had been agreed to in the Purchase and Sale Agreement (see note 9). Fixed assets in process at December 31, 2012 represents costs incurred relating to the construction of a branch location and placed in service in 2013. Construction commitments outstanding as of December 31, 2012 amounted to $1.1 million. There are no construction commitments at December 31, 2013. | ||||||||
The Bank leases certain facilities and equipment under long-term noncancelable lease commitments. Pursuant to terms of the lease agreements in effect at December 31, 2013, future minimum lease commitments are as follows (in thousands): | ||||||||
2014 | $ | 136 | ||||||
2015 | 136 | |||||||
2016 | 131 | |||||||
2017 | 125 | |||||||
2018 | 125 | |||||||
Thereafter | 1,792 | |||||||
| | | | | ||||
$ | 2,445 | |||||||
| | | | | ||||
| | | | | ||||
One lease has four options to renew for 5 year periods each. The cost of such rentals is not included above. Rent expense amounted to $186,000 and $97,000 for the years ended December 31, 2013 and 2012, respectively. | ||||||||
DEPOSITS
DEPOSITS | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
DEPOSITS | ' | |||||||||||||
DEPOSITS | ' | |||||||||||||
6. DEPOSITS | ||||||||||||||
A summary of deposit balances, by type, is as follows: | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||
Non-interest-bearing demand deposit accounts | $ | 63,751 | $ | 57,608 | ||||||||||
Savings accounts and interest-bearing DDA | 79,931 | 77,042 | ||||||||||||
Money market accounts | 59,210 | 51,570 | ||||||||||||
Club accounts | 1,614 | 1,197 | ||||||||||||
| | | | | | | | |||||||
Total non-certificate accounts | 204,506 | 187,417 | ||||||||||||
| | | | | | | | |||||||
Term certificates $100,000 or greater | 49,980 | 42,999 | ||||||||||||
Term certificates less than $100,000 | 75,430 | 77,377 | ||||||||||||
| | | | | | | | |||||||
Total certificate accounts | 125,410 | 120,376 | ||||||||||||
| | | | | | | | |||||||
Total deposits | $ | 329,916 | $ | 307,793 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
A summary of certificate accounts by maturity is as follows: | ||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||
Maturing Periods | Amount | Weighted | Amount | Weighted | ||||||||||
Average | Average | |||||||||||||
Rate | Rate | |||||||||||||
(Dollars in thousands) | ||||||||||||||
Within 1 year | $ | 43,868 | 0.89 | % | $ | 46,376 | 1.07 | % | ||||||
Within 2 years | 30,228 | 2.28 | 15,185 | 1.6 | ||||||||||
Within 3 years | 22,841 | 2.37 | 24,130 | 2.75 | ||||||||||
Within 4 years | 14,835 | 1.8 | 20,158 | 2.58 | ||||||||||
Within 5 years | 13,638 | 1.57 | 14,527 | 1.84 | ||||||||||
| | | | | | | | | | | | | | |
$ | 125,410 | 1.68 | % | $ | 120,376 | 1.82 | % | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
BORROWED_FUNDS
BORROWED FUNDS | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
BORROWED FUNDS. | ' | |||||||||||||
BORROWED FUNDS | ' | |||||||||||||
7. BORROWED FUNDS | ||||||||||||||
FHLB advances with an original maturity of less than one year amounted to $26 million and $13 million at December 31, 2013 and 2012, respectively, at a weighted average rate of 0.28% and 0.31%, respectively. | ||||||||||||||
Long-term FHLB advances consist of the following fixed-rate advances: | ||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||
Amount | Weighted | Amount | Weighted | |||||||||||
Average | Average | |||||||||||||
Rate | Rate | |||||||||||||
(Dollars in thousands) | ||||||||||||||
Non-amortizing advances maturing: | ||||||||||||||
2013 | $ | — | — | % | $ | 1,300 | 3.59 | % | ||||||
2014 | 700 | 3.84 | 700 | 3.84 | ||||||||||
2015 | 1,300 | 4.04 | 1,300 | 4.04 | ||||||||||
Amortizing advances maturing in 2013(1) | — | — | 43 | 3.07 | ||||||||||
| | | | | | | | | | | | | | |
Total FHLB advances | $ | 2,000 | 3.97 | % | $ | 3,343 | 3.81 | % | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
-1 | ||||||||||||||
Amortizing advances require monthly principal and interest payments. | ||||||||||||||
At December 31, 2013 and 2012, the Bank has a $6 million available line of credit with the FHLB. There were no amounts outstanding on this line of credit at December 31, 2013 or 2012. All borrowings from the FHLB are secured by a blanket lien on qualified collateral, defined principally as 75% of the carrying value of first mortgage loans on owner-occupied residential property. | ||||||||||||||
At December 31, 2013 and 2012, the Bank has an agreement with the Federal Reserve Bank of Boston for borrowings at the discount window for a maximum limit of $15 million. The terms of this agreement call for the pledging of certain loans as security for any and all obligations of the Bank under this agreement. At December 31, 2013 and 2012, there were no borrowings under this agreement. | ||||||||||||||
EMPLOYEE_BENEFITS
EMPLOYEE BENEFITS | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
EMPLOYEE BENEFITS | ' | |||||||
EMPLOYEE BENEFITS | ' | |||||||
8. EMPLOYEE BENEFITS | ||||||||
Defined Benefit Plan | ||||||||
The Bank has a noncontributory, defined benefit pension plan (the "Plan") that, prior to its curtailment, covered substantially all qualified full-time employees. In March 1993, the Bank's Board of Directors approved an amendment to the Plan, which froze employee pension benefits at the benefit amounts earned by employees as of April 15, 1993. The benefits were based upon years of service and the employees' compensation during the last five years of employment prior to the Plan's curtailment. | ||||||||
Information pertaining to the activity in the Plan is as follows: | ||||||||
Years ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Change in benefit obligation: | ||||||||
Benefit obligation at beginning of year | $ | 1,974 | $ | 1,834 | ||||
Interest cost | 79 | 80 | ||||||
Actuarial (gain) loss | (215 | ) | 105 | |||||
Benefits paid | (32 | ) | (45 | ) | ||||
| | | | | | | | |
Projected benefit obligation at end of year | 1,806 | 1,974 | ||||||
| | | | | | | | |
Change in plan assets: | ||||||||
Fair value of plan assets at beginning of year | 1,558 | 1,332 | ||||||
Actual return on plan assets | 271 | 182 | ||||||
Employer contribution | 71 | 89 | ||||||
Benefits paid | (32 | ) | (45 | ) | ||||
| | | | | | | | |
Fair value of plan assets at end of year | 1,868 | 1,558 | ||||||
| | | | | | | | |
Unfunded status and (prepaid) accrued pension benefit at end of year | $ | (62 | ) | $ | 416 | |||
| | | | | | | | |
| | | | | | | | |
Accumulated benefit obligation at end of year | $ | 1,806 | $ | 1,974 | ||||
| | | | | | | | |
| | | | | | | | |
At December 31, 2013 and 2012, the discount rate used to determine the benefit obligation was 4.95% and 4.05%, respectively. | ||||||||
The components of net periodic pension cost are as follows: | ||||||||
Years Ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Interest cost | $ | 79 | $ | 80 | ||||
Expected return on plan assets | (110 | ) | (95 | ) | ||||
Amortization of actuarial loss | 64 | 62 | ||||||
| | | | | | | | |
$ | 33 | $ | 47 | |||||
| | | | | | | | |
| | | | | | | | |
An actuarial loss of $18,000, included in accumulated other comprehensive loss at December 31, 2013, is expected to be recognized as a component of net periodic pension cost for the year ending December 31, 2014. | ||||||||
The assumptions used to determine net periodic pension cost are as follows: | ||||||||
Years Ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Discount rate | 4.05 | % | 4.4 | % | ||||
Expected return on plan assets | 7 | % | 7 | % | ||||
In general, the Bank has selected their assumptions with respect to the expected long-term rate of return based on prevailing yields on high quality fixed income investments increased by a premium for equity return expectations. | ||||||||
The plan assets are all measured at fair value in Level 1 because the values are based on quoted market prices in an active exchange market. The fair values of major categories of pension plan assets are summarized below: | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Equity securities: | ||||||||
Domestic mutual funds | $ | 766 | $ | 598 | ||||
Fixed income | 622 | 604 | ||||||
International mutual funds | 319 | 247 | ||||||
International exchange traded funds | 89 | 94 | ||||||
Cash and cash equivalents | 72 | 15 | ||||||
| | | | | | | | |
$ | 1,868 | $ | 1,558 | |||||
| | | | | | | | |
| | | | | | | | |
The Bank expects to contribute $78,000 to the plan during the year ended December 31, 2014. | ||||||||
Estimated future benefit payments, which reflect expected future service, as appropriate, that are expected to be paid follows: | ||||||||
Years Ending December 31, | Amount | |||||||
(In thousands) | ||||||||
2014 | $ | 30 | ||||||
2015 | 42 | |||||||
2016 | 48 | |||||||
2017 | 100 | |||||||
2018 | 251 | |||||||
Thereafter | 640 | |||||||
Deferred Compensation Supplemental Executive Retirement Plan | ||||||||
The Bank entered into a non-qualified deferred compensation supplemental executive retirement plan ("SERP") with a senior executive as of January 1, 2004, which was amended and restated as of January 1, 2011 and as of January 1, 2013. In 2011, the Bank contributed an initial amount of $62,000 and is required to make annual contributions of $72,000 each January 1 thereafter until January 1, 2023, so long as the executive remains employed by the Bank. Upon separation from service on or after age 67, the Bank shall pay the SERP benefit in 10 approximately equal annual installments staring on the first business day of January after separation from service. If the executive dies before all installments have been paid, the balance shall be paid in a cash lump sum to his beneficiary. If the executive separates from service before age 67 for reasons other than death, disability or cause, he shall be paid the vested portion of his SERP benefit in a lump sum no later than the first day of the second month after such separation from service. As of December 31, 2012, the executive was 60% vested in the SERP benefit. An additional 5% of his SERP benefit becomes vested as of each December 31 until it is 100% vested on December 31, 2020. If the executive employment is terminated for cause, he will forfeit all benefits under the SERP. To fund this plan, the Bank holds investment assets which are included in other assets at fair value with changes in fair value recorded through earnings. The plan participant has the right to provide the Board with investment directions for these investments. All earnings or losses on investments are the sole responsibility of the participant. The investments informally fund the SERP liability but remain assets of the Bank and are subject to the claims of general creditors of the Bank. The assets related to this Plan are $857,000 and $653,000 at December 31, 2013 and 2012, respectively. The liability for the benefit obligation is reported in accrued expenses and other liabilities in the amount of $857,000 and $653,000 at December 31, 2013 and 2012, respectively. Compensation expense related to this plan was $72,000 and $72,000 for the years ended December 31, 2013 and 2012, respectively. | ||||||||
401(k) Plan | ||||||||
The Bank has a defined contribution 401(k) Salary Deferral Plan (the "Plan") covering substantially all qualified employees. Under the provisions of the Plan, each qualified employee may contribute up to 15% of total compensation. The Bank matches 100% of up to 5% of the employee's contribution. In addition, the Bank contributes for each qualified employee an amount equal to 5% of gross compensation as a discretionary contribution. The Bank's contribution to the Plan was $647,000 and $603,000 for the years ended December 31, 2013 and 2012, respectively. | ||||||||
Incentive Compensation | ||||||||
The Bank does not have a formal incentive plan but on an annual basis the Board of Directors reviews Bank performance and may authorize incentive compensation at their discretion. Incentive compensation expense for the years ended December 31, 2013 and 2012 amounted to $208,000 and $186,000, respectively. | ||||||||
Supplemental Retirement Agreements | ||||||||
Effective July 1, 2013, the Bank entered into supplemental retirement agreements ("SERP") with six executive officers, which provide for payments upon attaining the retirement age specified in the agreements. The present value of these future payments is accrued over the remaining service term. Supplemental retirement benefits generally vest as they are accrued; however a termination of employment subsequent to a change in control will result in the vesting of all benefits that would have accrued to the officer's normal retirement date. SERP expense totaled $170,000 for the year ended December 31, 2013. | ||||||||
OFFBALANCE_SHEET_ACTIVITIES_AN
OFF-BALANCE SHEET ACTIVITIES AND DERIVATIVES | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
OFF-BALANCE SHEET ACTIVITIES AND DERIVATIVES | ' | |||||||||||
OFF-BALANCE SHEET ACTIVITIES AND DERIVATIVES | ' | |||||||||||
9. OFF-BALANCE SHEET ACTIVITIES AND DERIVATIVES | ||||||||||||
In the normal course of business, there are outstanding commitments and contingencies which are not reflected in the accompanying financial statements. | ||||||||||||
Loan Commitments | ||||||||||||
The Bank is a party to conditional commitments to lend funds in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit which include commercial lines of credit and home equity lines that involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheet. The Bank's exposure to credit loss is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments as it does for on-balance-sheet instruments. | ||||||||||||
The following financial instruments were outstanding whose contract amounts represent credit risk: | ||||||||||||
December 31, | ||||||||||||
2013 | 2012 | |||||||||||
(In thousands) | ||||||||||||
Commitments to grant loans | $ | 12,858 | $ | 9,945 | ||||||||
Commitments to originate loans to be sold | 7,150 | 11,317 | ||||||||||
Unfunded commitments under home equity lines of credit | 46,456 | 47,245 | ||||||||||
Unfunded commitments under commercial lines of credit | 11,315 | 8,972 | ||||||||||
Unfunded commitments under SBA lines of credit | 3,601 | 2,351 | ||||||||||
Unadvanced funds on construction loans | 3,812 | 2,045 | ||||||||||
The commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The commitments for lines-of-credit may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary by the Bank upon extension of credit is based upon management's credit evaluation of the counterparty. Collateral held generally consists of real estate. | ||||||||||||
Loans Sold with Recourse Obligations | ||||||||||||
The Bank sells certain loans on a servicing-released basis to investors pursuant to contracts which include limited recourse provisions whereby the Bank would be required to repurchase loans and/or refund premiums in the event a borrower defaults generally on any of the first four payments due. At December 31, 2013 and 2012, the premiums received on loans sold that were subject to refund provisions amounted to $1,266,000 and $1,783,000, respectively. The contracts also include repurchase obligation provisions for fraud or misrepresentation. The Bank has not been required to repurchase any loans or refund any premiums under these agreements. No liability has been recorded in the financial statements related to these recourse obligations. In November 2013, the Bank repurchased two performing loans totaling $426,000 due to an underwriting error and refunded the premium paid of $16,900 to the investor. | ||||||||||||
Interest Rate Risk Management—Derivative Instruments Not Designated As Hedging 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 sheets at fair value, with changes in fair value recorded in other non-interest income. | ||||||||||||
Derivative Loan Commitments | ||||||||||||
Mortgage loan commitments are considered derivative loan commitments if the loan that will result from exercise of the commitment will be held for sale upon funding. The Bank enters into commitments to fund residential mortgage loans at specified times in the future, with the intention that these loans will subsequently be sold in the secondary market. | ||||||||||||
Outstanding derivative loan commitments expose the Bank to the risk that the price of the loans arising from exercise of the loan commitment might decline from inception of the rate lock to funding of the loan due to increases in mortgage interest rates. If interest rates increase, the value of these loan commitments decreases. Conversely, if interest rates decrease, the value of these loan commitments increases. | ||||||||||||
Forward Loan Sale Commitments | ||||||||||||
To protect against the price risk inherent in derivative loan commitments, the Bank utilizes best efforts forward loan sale commitments to mitigate the risk of potential decreases in the values of loans that would result from the derivative loan commitments. | ||||||||||||
With a best efforts contract, the Bank 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 (e.g., on the same day the lender commits to lend funds to a potential borrower). Forward commitments to sell loans totaled $15.7 million and $24.7 million at December 31, 2013 and 2012, respectively. | ||||||||||||
The following table presents the fair values of derivative instruments in the consolidated balance sheets. | ||||||||||||
Assets | Liabilities | |||||||||||
Balance | Fair | Balance | Fair | |||||||||
Sheet | Value | Sheet | Value | |||||||||
Location | Location | |||||||||||
(In thousands) | ||||||||||||
December 31, 2013 | ||||||||||||
Derivative loan commitments | NA | $ | — | Other liabilities | $ | 4 | ||||||
Forward loan sale commitments | Other assets | 248 | NA | — | ||||||||
| | | | | | | | | | | | |
Total derivatives not designated as hedging instruments | $ | 248 | $ | 4 | ||||||||
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Assets | Liabilities | |||||||||||
Balance | Fair | Balance | Fair | |||||||||
Sheet | Value | Sheet | Value | |||||||||
Location | Location | |||||||||||
(In thousands) | ||||||||||||
December 31, 2012 | ||||||||||||
Derivative loan commitments | Other assets | $ | 154 | NA | $ | — | ||||||
Forward loan sale commitments | Other assets | 47 | NA | — | ||||||||
| | | | | | | | | | | | |
Total derivatives not designated as hedging instruments | $ | 201 | $ | — | ||||||||
| | | | | | | | | | | | |
| | | | | | | | | | | | |
The following table presents information pertaining to the gains and losses on Bank's derivative instruments not designated as hedging instruments: | ||||||||||||
Years Ended | ||||||||||||
Location of | December 31, | |||||||||||
Gain/(Loss) | 2013 | 2012 | ||||||||||
(In thousands) | ||||||||||||
Derivative loan commitments | Gain on sales of loans, net | $ | (382 | ) | $ | 281 | ||||||
Forward loan sale commitments | Gain on sales of loans, net | 201 | (209 | ) | ||||||||
| | | | | | | | | | |||
Total | $ | (181 | ) | $ | 72 | |||||||
| | | | | | | | | | |||
| | | | | | | | | | |||
Executive Employment Agreement | ||||||||||||
The Bank has entered into an Executive Employment Agreement with its President which automatically renews annually unless otherwise determined by the Board of Directors, and provides for, among other things, an annual base salary, participation in any and all employee benefit plans, and guaranteed employment. The agreement provides for continued payment of base salary and continued | ||||||||||||
Executive Employment Agreement (Concluded) | ||||||||||||
benefits for five years following termination of employment without cause or a change of control event. However, such employment may be terminated for cause, as defined, without incurring any continuing obligation. | ||||||||||||
Premises and Equipment | ||||||||||||
In June 2013, the Bank entered into a Purchase and Sale Agreement to purchase its new corporate headquarters for $8.8 million, which is currently under construction. The purchase is expected to close in the second calendar quarter of 2014, at which point the Bank will hold for sale and relocate from its current headquarters, which has a carrying value of $3.4 million at December 31, 2013. | ||||||||||||
Legal and Other Loss Contingencies | ||||||||||||
In October 2013, management was notified of a claim made related to a loan application management services contract pertaining to monthly user fees which had not been invoiced over the term of such contract. The company making the claim acquired the application provider in early 2013. The claim was for $178,000, covering a multi-year period of fees, though invoices and other communications from such company and/or its predecessor indicated balances due from the Bank, which did not include the fees in question, and represented all open invoices or all amounts past due. Based on the advice of legal counsel, management believes a loss is not probable at this time and the amount of reasonably possible loss or range of loss, if any, is not estimable. | ||||||||||||
Various legal claims also arise from time to time in the normal course of business which, in the opinion of management, will have no material effect on the consolidated financial statements at December 31, 2013 and 2012. | ||||||||||||
LOANS_TO_RELATED_PARTIES
LOANS TO RELATED PARTIES | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
LOANS TO RELATED PARTIES | ' | |||||||
LOANS TO RELATED PARTIES | ' | |||||||
10. LOANS TO RELATED PARTIES | ||||||||
Information pertaining to loans to directors, executive officers and their associates is as follows: | ||||||||
Years Ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Balance at beginning of year | $ | 2,096 | $ | 2,624 | ||||
Principal additions | 140 | 166 | ||||||
Principal payments | (962 | ) | (694 | ) | ||||
| | | | | | | | |
Balance at end of year | $ | 1,274 | $ | 2,096 | ||||
| | | | | | | | |
| | | | | | | | |
In the ordinary course of business, the Bank has granted loans to officers and directors at the same terms as those prevailing at the time of origination for comparable transactions with other customers, except for interest rates on loans originated in accordance with the Bank's Employee Loan Discount Program which allows rates to be reduced by 1% with a floor rate of 4%. | ||||||||
On January 30, 2013, the Bank modified a related party loan to an officer that resulted in an unsecured residential loan in the amount of $482,000. | ||||||||
INCOME_TAXES
INCOME TAXES | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
INCOME TAXES | ' | |||||||
INCOME TAXES | ' | |||||||
11. INCOME TAXES | ||||||||
Allocation of income taxes between current and deferred portions is as follows: | ||||||||
Years Ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Current tax expense: | ||||||||
Federal | $ | 606 | $ | 208 | ||||
State | 207 | 101 | ||||||
| | | | | | | | |
813 | 309 | |||||||
| | | | | | | | |
Deferred tax expense (benefit): | ||||||||
Federal | (477 | ) | 437 | |||||
State | (169 | ) | 89 | |||||
Change in valuation allowance | 20 | — | ||||||
| | | | | | | | |
(626 | ) | 526 | ||||||
| | | | | | | | |
Total income tax expense | $ | 187 | $ | 835 | ||||
| | | | | | | | |
| | | | | | | | |
The reasons for the differences between the statutory federal income tax expense and the actual tax expense are summarized as follows: | ||||||||
Years Ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Statutory tax expense at 34% | $ | 139 | $ | 674 | ||||
Increase (decrease) resulting from: | ||||||||
State taxes, net of federal tax benefit | 25 | 118 | ||||||
Change in valuation allowance | 20 | — | ||||||
Other, net | 3 | 43 | ||||||
| | | | | | | | |
$ | 187 | $ | 835 | |||||
| | | | | | | | |
| | | | | | | | |
The tax effects of each item that give rise to deferred taxes are as follows: | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Deferred tax assets: | ||||||||
Allowance for loan losses | $ | 661 | $ | 628 | ||||
Employee benefits | 499 | 302 | ||||||
Non-accrual income | 68 | 43 | ||||||
Defined benefit pension plan | 130 | 248 | ||||||
Charitable contribution carryforwards | 35 | 43 | ||||||
Organization costs | 140 | — | ||||||
| | | | | | | | |
Total deferred tax assets | 1,533 | 1,264 | ||||||
Valuation allowance | (20 | ) | — | |||||
| | | | | | | | |
Total deferred tax asset, net of valuation allowance | 1,513 | 1,264 | ||||||
| | | | | | | | |
Deferred tax liabilities: | ||||||||
Premises and equipment, net | (150 | ) | (368 | ) | ||||
Net deferred loan costs | (842 | ) | (750 | ) | ||||
Other, net | (81 | ) | (214 | ) | ||||
| | | | | | | | |
Total deferred tax liabilities | (1,073 | ) | (1,332 | ) | ||||
| | | | | | | | |
Deferred tax asset (liability), net | $ | 440 | $ | (68 | ) | |||
| | | | | | | | |
| | | | | | | | |
A summary of the change in deferred taxes is as follows: | ||||||||
Years Ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Balance at beginning of year | $ | (68 | ) | $ | 476 | |||
Deferred tax (expense) / benefit | 646 | (526 | ) | |||||
Change in valuation allowance | (20 | ) | — | |||||
Unrealized gain/loss pertaining to defined benefit pension plan | (118 | ) | (18 | ) | ||||
| | | | | | | | |
Balance at end of year | $ | 440 | $ | (68 | ) | |||
| | | | | | | | |
| | | | | | | | |
The Bank established a $20,000 valuation allowance during the year ended December 31, 2013 related to charitable contribution carryforwards. The Bank's income tax returns are subject to review and examination by federal and state taxing authorities. The Bank is currently open to audit under the applicable statutes of limitations by the Internal Revenue Service for the years ended December 31, 2010 through 2012. The years open to examination by state taxing authorities vary by jurisdiction; no years prior to 2010 are open. | ||||||||
MINIMUM_REGULATORY_CAPITAL_REQ
MINIMUM REGULATORY CAPITAL REQUIREMENTS | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
MINIMUM REGULATORY CAPITAL REQUIREMENTS | ' | |||||||||||||||||||
MINIMUM REGULATORY CAPITAL REQUIREMENTS | ' | |||||||||||||||||||
12. MINIMUM REGULATORY CAPITAL REQUIREMENTS | ||||||||||||||||||||
The Bank is subject to various regulatory capital requirements administered by the federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct adverse material effect on the Bank's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank's assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. | ||||||||||||||||||||
Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of total and Tier 1 capital (as defined) to risk-weighted assets (as defined) and of Tier 1 capital to average assets (as defined). Management believes, as of December 31, 2013 and 2012, that the Bank meet all capital adequacy requirements to which it is subject, other than as disclosed below. | ||||||||||||||||||||
As of December 31, 2013, the most recent notification from the Federal Deposit Insurance Corporation ("FDIC") categorized the Bank as adequately capitalized under the regulatory framework for prompt corrective action, because the Bank's total capital to risk weighted assets was 9.8% at December 31, 2013 as compared to the minimum ratio to be well capitalized of 10.0%. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the following table. On January 14, 2014, the Conversion was completed, for which the Bank received net proceeds of $23.2 million. As a result, at the end of the first quarter of 2014, the Bank anticipates that it will exceed the minimum amount to be well-capitalized. | ||||||||||||||||||||
The Bank's actual and minimum required capital amounts at December 31, 2013 and 2012 are as follows: | ||||||||||||||||||||
Actual | Minimum Capital | Minimum To Be | ||||||||||||||||||
Requirements | Well Capitalized | |||||||||||||||||||
Under Prompt | ||||||||||||||||||||
Corrective Action | ||||||||||||||||||||
Provisions | ||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
Total capital | $ | 29,667 | 9.8 | % | $ | 24,201 | 8 | % | $ | 30,252 | 10 | % | ||||||||
(to risk weighted assets) | ||||||||||||||||||||
Tier 1 capital | 28,011 | 9.3 | 12,101 | 4 | 18,151 | 6 | ||||||||||||||
(to risk weighted assets) | ||||||||||||||||||||
Tier 1 capital | 28,011 | 7.2 | 15,482 | 4 | 19,353 | 5 | ||||||||||||||
(to average assets) | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Total capital | $ | 29,341 | 10.7 | % | $ | 21,923 | 8 | % | $ | 27,404 | 10 | % | ||||||||
(to risk weighted assets) | ||||||||||||||||||||
Tier 1 capital | 27,772 | 10.1 | 10,962 | 4 | 16,442 | 6 | ||||||||||||||
(to risk weighted assets) | ||||||||||||||||||||
Tier 1 capital | 27,772 | 8.1 | 13,770 | 4 | 17,213 | 5 | ||||||||||||||
(to average assets) | ||||||||||||||||||||
The Bank's minimum capital requirement was 8.0% for Tier 1 capital ratios per order of the FDIC throughout the first three years of operation as a condition of the application to convert from a credit union to a mutual savings bank. This restriction was removed during the year ended December 31, 2012. | ||||||||||||||||||||
FAIR_VALUES_OF_ASSETS_AND_LIAB
FAIR VALUES OF ASSETS AND LIABILITIES | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
FAIR VALUES OF ASSETS AND LIABILITIES | ' | ||||||||||||||||
FAIR VALUES OF ASSETS AND LIABILITIES | ' | ||||||||||||||||
13. FAIR VALUES OF ASSETS AND LIABILITIES | |||||||||||||||||
Determination of Fair Value | |||||||||||||||||
The Bank uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The fair value of an asset or liability 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 Bank'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 an asset or liability. | |||||||||||||||||
The following methods and assumptions were used by the Bank in estimating fair value disclosures: | |||||||||||||||||
Cash and cash equivalents—The carrying amounts of cash and cash equivalents approximate fair values based on the short-term nature of the assets. | |||||||||||||||||
Federal Home Loan Bank stock—The carrying value of Federal Home Loan Bank stock is deemed to approximate fair value, based on the redemption provisions of the Federal Home Loan Bank. | |||||||||||||||||
Loans, net—For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. Fair values for other loans are estimated using discounted cash flow analyses, using market interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Fair values for non-performing loans are estimated using discounted cash flow analyses or underlying collateral values, where applicable. | |||||||||||||||||
Loans held for sale—Fair values of loans held for sale are based on prevailing market rates for loans with similar characteristics. | |||||||||||||||||
Deposits—The fair values of deposits with no stated maturity, such as demand deposits, savings, club and money market accounts, are equal to the amount payable on demand at the reporting date. Fair values for term certificates are estimated using a discounted cash flow calculation that applies market interest rates currently being offered for deposits of similar remaining maturities. | |||||||||||||||||
Borrowed funds—The fair values of the Bank's FHLB advances are estimated using discounted cash flow analyses based on the current incremental borrowing rates in the market for similar types of borrowing arrangements. | |||||||||||||||||
Accrued interest—The carrying amounts of accrued interest approximate fair value. | |||||||||||||||||
Off-balance sheet credit-related instruments—Fair values for off-balance-sheet, credit related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties' credit standing. | |||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||||||||||||||
At December 31, 2013 and 2012, there are no assets or liabilities measured at fair value on a recurring basis other than mortgage derivatives. See Note 9. | |||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis (Concluded) | |||||||||||||||||
Fair value changes in mortgage banking derivatives (interest rate lock commitments and commitments to sell fixed-rate residential mortgages) subsequent to inception are estimated using anticipated market prices based on pricing indications provided from syndicate banks and consideration of pull-through and fallout rates derived from the Bank's internal data and adjusted using management judgment. Mortgage banking derivatives include the non-refundable costs of originating the loan based on the Bank's internal cost analysis that is not observable. The fair value of the mortgage banking derivatives are considered to be Level 3 assets. | |||||||||||||||||
The following table shows significant unobservable inputs used in the recurring fair value measurements of Level 3 assets and liabilities: | |||||||||||||||||
Measurements | Fair Value | Valuation | Unobservable | Range | |||||||||||||
Technique | Inputs | ||||||||||||||||
(In thousands) | |||||||||||||||||
December 31, 2013 | |||||||||||||||||
Derivative loan commitments | $ | (4 | ) | Investor pricing | Pull-through rate | 82.5 - 100% | |||||||||||
Pricing spreads | 95.28 - 106.16% | ||||||||||||||||
Forward loan sale commitments | 248 | Investor pricing | Pricing spreads | 94.55 - 106.16% | |||||||||||||
December 31, 2012 | |||||||||||||||||
Derivative loan commitments | 154 | Investor pricing | Pull-through rate | 82.5 - 100% | |||||||||||||
Pricing spreads | 101.71 - 106.13% | ||||||||||||||||
Forward loan sale commitments | 47 | Investor pricing | Pricing spreads | 101.61 - 106.17% | |||||||||||||
The table below presents (in thousands), for the years ended December 31, 2013 and 2012, the changes in Level 3 assets and liabilities, consisting of derivative loan and forward sale commitments, that are measured on a recurring basis. There were no transfers between levels during the periods presented. | |||||||||||||||||
Balance at December 31, 2011 | $ | 357 | |||||||||||||||
Total realized and unrealized gains included in net income | 72 | ||||||||||||||||
Settlements and closed loans | (228 | ) | |||||||||||||||
| | | | | |||||||||||||
Balance at December 31, 2012 | 201 | ||||||||||||||||
Total realized and unrealized losses included in net income | (181 | ) | |||||||||||||||
Settlements and closed loans | 224 | ||||||||||||||||
| | | | | |||||||||||||
Balance at December 31, 2013 | $ | 244 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Total unrealized gains relating to instruments still held at December 31, 2012 | $ | 72 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Total unrealized losses relating to instruments still held at December 31, 2013 | $ | (181 | ) | ||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Assets Measured at Fair Value on a Non-recurring Basis | |||||||||||||||||
The Bank may also be required, from time to time, to measure certain other 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 accounting or write-downs of | |||||||||||||||||
Assets Measured at Fair Value on a Non-recurring Basis (Continued) | |||||||||||||||||
individual assets. The following table summarizes the fair value hierarchy used to determine each adjustment and the carrying value of the related individual assets as of December 31, 2013 and 2012. The losses represent the amount of write-downs during the year on assets held at year end. | |||||||||||||||||
December 31, 2013 | Year Ended | ||||||||||||||||
December 31, | |||||||||||||||||
2013 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total Losses | ||||||||||||||
(In thousands) | |||||||||||||||||
Foreclosed real estate | $ | — | $ | — | $ | 1,170 | $ | 180 | |||||||||
Impaired loans | 987 | 280 | |||||||||||||||
Real estate held for sale | — | — | 3,515 | 482 | |||||||||||||
| | | | | | | | | | | | | | ||||
$ | — | $ | — | $ | 5,672 | $ | 942 | ||||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
December 31, 2012 | Year Ended | ||||||||||||||||
December 31, | |||||||||||||||||
2012 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total Losses | ||||||||||||||
(In thousands) | |||||||||||||||||
Foreclosed real estate | $ | — | $ | — | $ | 2,594 | $ | 402 | |||||||||
Impaired loans | — | — | 2,254 | 320 | |||||||||||||
| | | | | | | | | | | | | | ||||
$ | — | $ | — | $ | 4,848 | $ | 722 | ||||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Losses applicable to impaired loans are estimated using the appraised value of the underlying collateral, discounted as necessary due to management's estimates of changes in market conditions. The loss is not recorded directly as an adjustment to current earnings or comprehensive income, but rather as a component in determining the overall adequacy of the allowance for loan losses. Adjustments to the estimated fair value of impaired loans may result in increases or decreases to the provision for loan losses. | |||||||||||||||||
Certain properties in foreclosed real estate and real estate held for sale were adjusted to fair value based on appraisals that utilize prices in observed transactions involving similar assets or estimated sales price less costs to sell. If necessary, these appraised values were adjusted by management to recognize unobservable inputs for specific characteristics of the properties. Losses during the year represent amounts charged off to the allowance for loan losses upon transfer and subsequent write-downs charged to earnings. | |||||||||||||||||
There are no liabilities measured at fair value on a non-recurring basis at December 31, 2013 or 2012. | |||||||||||||||||
Assets Measured at Fair Value on a Non-recurring Basis (Concluded) | |||||||||||||||||
The following table shows significant unobservable inputs used in the non-recurring fair value measurements of Level 3 assets: | |||||||||||||||||
Measurements | Fair Value | Valuation Technique | Unobservable Inputs | Range | |||||||||||||
(In thousands) | |||||||||||||||||
December 31, 2013 | |||||||||||||||||
Foreclosed real estate | $ | 1,170 | Discounted appraisals | Collateral discounts/selling costs | 5 - 30% | ||||||||||||
Impaired loans | 987 | Discounted appraisals | Collateral discounts/selling costs | 5 - 30% | |||||||||||||
Real estate held for sale | 3,515 | Appraisal of collateral | Selling costs | 5% | |||||||||||||
December 31, 2012 | |||||||||||||||||
Foreclosed real estate | $ | 2,594 | Discounted appraisals | Collateral discounts/selling costs | 5 - 30% | ||||||||||||
Impaired loans | 2,254 | Discounted appraisals | Collateral discounts/selling costs | 5 - 30% | |||||||||||||
Summary of Fair Values of Financial Instruments | |||||||||||||||||
The estimated fair values, and related carrying amounts, of the Bank's financial instruments are as follows. Certain financial instruments and all nonfinancial instruments are exempt from disclosure requirements. Accordingly, the aggregate fair value amounts presented herein may not necessarily represent the underlying fair value of the Bank. | |||||||||||||||||
The following tables present the carrying amount, estimated fair value and placement in the fair value hierarchy of the Bank's financial instruments as of December 31, 2013 and 2012. The tables exclude financial instruments for which the carrying value approximates fair value and derivatives. Financial assets for which the fair value approximates carrying value include cash and cash equivalents, FHLBB stock and accrued interest receivable. Financial liabilities for which the fair value approximates carrying value include non-maturity deposits and accrued interest payable. | |||||||||||||||||
December 31, 2013 | |||||||||||||||||
Fair Value Measurements | |||||||||||||||||
Carrying | Estimated | ||||||||||||||||
Amount | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||
(In thousands) | |||||||||||||||||
Financial assets: | |||||||||||||||||
Loans, net of allowance for loan losses | $ | 328,576 | $ | 327,618 | $ | — | $ | — | $ | 327,618 | |||||||
Loans held for sale | 8,648 | 8,690 | — | — | 8,690 | ||||||||||||
FHLB stock | 2,694 | 2,694 | — | — | 2,694 | ||||||||||||
Financial liabilities: | |||||||||||||||||
Certificates of deposit | 125,410 | 127,528 | — | 127,528 | — | ||||||||||||
Borrowed funds | 28,000 | 28,021 | — | 28,021 | — | ||||||||||||
December 31, 2012 | |||||||||||||||||
Fair Value Measurements | |||||||||||||||||
Carrying | Estimated | ||||||||||||||||
Amount | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||
(In thousands) | |||||||||||||||||
Financial assets: | |||||||||||||||||
Loans, net of allowance for loan losses | $ | 296,999 | $ | 305,797 | $ | — | $ | — | $ | 305,797 | |||||||
Loan held for sale | 13,642 | 13,870 | — | — | 13,870 | ||||||||||||
FHLB stock | 3,036 | 3,036 | — | — | 3,036 | ||||||||||||
Financial liabilities: | |||||||||||||||||
Certificates of deposit | 120,376 | 122,483 | — | 122,483 | — | ||||||||||||
Borrowed funds | 16,343 | 16,452 | — | 16,452 | — |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2013 | |
SUBSEQUENT EVENTS | ' |
SUBSEQUENT EVENTS | ' |
14. SUBSEQUENT EVENTS | |
The Bank entered into an Executive Change in Control Severance Plan ("Severance Plan") effective upon the closing of the conversion and stock offering in January 2014 (see note 1), with certain officers. The participants in the Severance Plan will be paid two times the participants' base salaries plus their highest bonus in the two calendar years immediately prior to termination, upon a change in control. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2013 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' |
Nature of Operations and Basis of Presentation | ' |
Nature of Operations and Basis of Presentation | |
Coastway Bancorp, MHC (the "Company"), a state-chartered mutual holding company and its wholly-owned subsidiary, Coastway Bancorp, LLC ("Bancorp"), were formed on February 1, 2013. The Bancorp owned 100% of Coastway Community Bank (the "Bank"). The Bank provides a variety of financial services to individuals and small businesses throughout Rhode Island. Its primary deposit products are savings, demand, money market and term certificate accounts and its primary lending products are residential and commercial mortgage and business loans. The consolidated financial statements include the accounts of the Company, the Bancorp, and the Bank. All significant intercompany balances and transactions have been eliminated in consolidation. | |
Stock Conversion | ' |
Stock Conversion | |
On August 22, 2013, the Board of Directors of the Company, Bancorp and the Bank adopted the Plan of Conversion and Reorganization ("Conversion") to convert the Company from the mutual holding company form of organization to a stock holding company form of organization with a new Maryland-chartered stock corporation, Coastway Bancorp, Inc. ("Corporation"). | |
At December 31, 2013, stock subscriptions received aggregated $43.4 million and are included in liabilities in the accompanying consolidated balance sheets. Conversion costs are capitalized and will reduce the proceeds from the stock sold in the Conversion. At December 31, 2013, conversion costs amounting to $888,000 are included in other assets in the accompanying consolidated balance sheet. | |
On January 14, 2014, the Conversion was completed and Coastway Bancorp, Inc. became the parent holding company for Coastway Community Bank. A total of 4,827,125 shares of Corporation common stock were sold to depositors and to the general public, including those issued to the Corporation's tax-qualified employee benefit plans, at $10.00 per share through which the Corporation received net offering proceeds of approximately $46.4 million. Also, on January 14, 2014, the Corporation contributed $300,000 in cash and 122,054 shares of common stock to Coastway Cares Charitable Foundation II which together totaled 3.15% of the gross proceeds of the offering totaling $1.5 million which will be recorded as a component of non-interest expense in 2014. The total number of shares of common stock outstanding upon completion of the Conversion is 4,949,179 shares. | |
In connection with the Conversion, the Corporation implemented an employee stock ownership plan ("ESOP"), to provide eligible employees the opportunity to own corporation stock. This plan is a tax-qualified retirement plan for the benefit of all Company employees. 395,934 shares of the stock issued in the conversion were acquired by the ESOP, financed by a loan from the Corporation. The loan will be repaid principally from the Bank's contributions to the ESOP. The loan is payable annually over 25 years. Contributions are allocated to eligible participants on the basis of compensation, subject to federal tax law limits. The loan can be prepaid without penalty. | |
The ESOP loan is secured by the stock purchased, which are held in a suspense account for allocation among participants as the loan is repaid. Shares used as collateral to secure the loan will be released and available for allocation to eligible employees as the loan payments are made. | |
As part of the Conversion, Coastway Bancorp, Inc. established a liquidation account in an amount equal to the net worth of Coastway Bancorp, MHC as of the date of the latest consolidated balance sheet appearing in the final prospectus distributed in connection with the Conversion, or $27.5 million. The liquidation account will be maintained for the benefit of eligible account holders and supplemental eligible account holders who maintain their accounts at Coastway Community Bank after the Conversion. The liquidation account will be reduced annually to the extent that such account holders have reduced their qualifying deposits as of each anniversary date. Subsequent increases will not restore an account holder's interest in the liquidation account. In the event of a complete liquidation of the Corporation or the Bank, each eligible account holder will be entitled to receive balances for accounts then held. | |
Subsequent to the Conversion, the Corporation may not declare or pay dividends on, and may not repurchase, any of its shares of common stock if the effect thereof would cause stockholders' equity to be reduced below the liquidation account balance, applicable regulatory capital maintenance requirements, or if such declaration, payment or repurchase would otherwise violate regulatory requirements. | |
Use of Estimates | ' |
Use of Estimates | |
In preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses and the valuation of deferred tax assets. | |
Reclassification | ' |
Reclassification | |
Certain amounts in the prior period consolidated financial statements have been reclassified to conform to the 2013 presentation. | |
Cash and Cash Equivalents | ' |
Cash and Cash Equivalents | |
Cash and cash equivalents include cash on hand, amounts due from banks and interest-earning deposits. Interest-earning deposits are carried at cost which approximates fair value and mature either daily or on demand. | |
Fair Value Hierarchy | ' |
Fair Value Hierarchy | |
The Bank groups its assets and liabilities measured at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value. | |
Level 1—Valuation is based on quoted prices in active markets for identical assets. Valuations are obtained from readily available pricing sources for market transactions involving identical assets. | |
Level 2—Valuation is based on observable inputs other than Level 1 prices, such as quoted prices for similar assets; 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. | |
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 or liabilities. Level 3 assets or liabilities include financial instruments whose value is determined using unobservable inputs to pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. | |
Transfers between levels, if any, are recognized at the end of a reporting period. | |
Federal Home Loan Bank Stock | ' |
Federal Home Loan Bank Stock | |
The Bank, as a member of the Federal Home Loan Bank ("FHLB") system, is required to maintain an investment in capital stock of the FHLB. Based on the redemption provisions of the FHLB, the stock has no quoted market value and is carried at cost. At its discretion, the FHLB may declare dividends on the stock. The Bank reviews for impairment based on the ultimate recoverability of the cost basis in the FHLB stock. As of and December 31, 2013 and 2012, no impairment has been recognized. | |
Loans | ' |
Loans | |
The Bank's lending activities are conducted principally in Rhode Island. The Bank grants one-to-four family residential loans as well as commercial business, commercial real estate and consumer loans. Most loans granted by the Bank are collateralized by real estate. The ability and willingness of the one-to-four family residential and consumer borrowers to honor their repayment commitments is generally dependent on the level of economic activity within the borrowers' geographic area and real estate values. The ability and willingness of commercial loan borrowers to repay their loan commitments is generally dependent on the state of the real estate economic sector in the borrowers' geographic area and the general economy. | |
Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for charge-offs, the allowance for loan losses, and any deferred fees or costs on originated loans. 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. | |
For loan disclosures and the allowance for loan losses estimate, the Bank's loan portfolio includes residential 1-4 family real estate, home equity loans and lines of credit, commercial real estate, commercial business, commercial construction, Small Business Administration ("SBA") and consumer segments. | |
The accrual of interest on loans is discontinued at the time the loan is 90 days past due. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued, but not collected for loans that are placed on nonaccrual or charged off, is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. | |
The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. For impaired loans that are deemed collateral dependent, the recorded balance of the loan is reduced to fair value of the collateral net of estimated selling costs by charge off. | |
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 and specific components, as further described below. | |
General component | |
The general component of the allowance for loan losses is based on historical loss experience adjusted for qualitative factors stratified by loan segments. Management uses a ten year historical loss period to capture relevant loss data for each loan segment. This historical loss factor is adjusted for the following qualitative factors: levels/trends in delinquencies; charge off trends in the past three years; weighted average risk weightings; loan concentrations; management's assessment of internal factors; and management's assessment of external factors such as interest rates, real estate markets and local and national economic factors. There were no changes in the Bank's policies or methodology pertaining to the general component of the allowance for loan losses during the year ended December 31, 2013. Refer to Note 3 for additional information regarding the amounts attributable to historical loss and qualitative factors. | |
The qualitative factors are determined based on the various risk characteristics of each loan segment. Risk characteristics relevant to each portfolio segment are as follows: | |
One-to-four family residential real estate and home equity—Loans in these segments are collateralized by owner-occupied residential real estate and repayment is dependent on the credit quality of the individual borrower. The Bank generally has first liens on one-to-four family residential real estate loans and first or second liens on property securing home equity loans and equity lines-of-credit. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in these segments. | |
Commercial—Commercial loan segments include commercial real estate, commercial and industrial loans for businesses and construction financing for business/properties located principally in Rhode Island. For commercial real estate loans, the underlying cash flows generated by the properties are 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. Non-real estate commercial loans are made to businesses and are generally secured by assets of the business. Repayment is expected from the cash flows of the business. Commercial construction generally represent loans to finance construction of retail and office space. Commercial loans also include loans made under the SBA 504 program which is an economic development program which finances the expansion of small businesses. The Bank generally provides 50% of the projected costs, and the loan is secured by a first lien on the commercial property. The SBA does not provide a guarantee on loans made under the SBA 504 program. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality in this segment. Management monitors the cash flows of these loans. | |
SBA—Loans in this segment include commercial loans underwritten using SBA guidelines for the SBA's 7(a) program and include both guaranteed and unguaranteed loans. Under the SBA 7(a) Program, loans may qualify for guarantees up to 85% of principal and accrued interest. The Bank does not treat the SBA guarantee as a substitute for a borrower meeting reasonable credit standards. SBA guarantees are generally sought on loans that exhibit minimum capital levels, a short time in business, lower collateral coverage or maximum loan terms beyond the Bank's normal underwriting criteria. For a number of SBA loans, the Bank has sold portions of certain loans and retains the unguaranteed portion while continuing to service the entire loan. The guaranteed portion of SBA loans in the Bank's portfolio is not allocated a general reserve because the Bank has not experienced losses on such loans and management expects the guarantees will be effective, if necessary. | |
Consumer—This segment includes unsecured and vehicle loans and repayment is dependent on the credit quality of the individual borrower. | |
Specific component | |
The specific component relates to loans that are classified as impaired. Based on internal credit ratings, commercial and SBA loans are evaluated for impairment on a loan-by-loan basis. Impairment is measured by either the present value of expected future cash flows discounted at the loan's effective interest rate or the fair value of the collateral if the loan is collateral dependent. An allowance is established when the discounted cash flows or collateral value of the impaired loan is lower than the carrying value of that loan. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Bank does not separately identify individual consumer and performing residential real estate 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 Bank 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 Bank periodically may agree to modify the contractual terms of loans, such as a reduction in interest rate of the loan for some period of time, an extension of the maturity date or an extension of time to make payments with the delinquent payments added to the end of the loan term. 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. Loans on non-accrual status at the date of modification are initially classified as non-accrual troubled debt restructurings. TDRs may be returned to actual status after a period of satisfactory payment performance per the terms of the restructuring, generally six months of current payments. | |
Loans Held for Sale and Mortgage Banking Activities | ' |
Loans Held for Sale and Mortgage Banking Activities | |
Loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance by charges to income. One-to-four family residential loans are sold with servicing released. Gains and losses on loan sales are recorded in non-interest income as gains on sale of loans, net. Commitments to originate loans to be held for sale and forward loan sale commitments are derivatives and are recorded at fair value with changes in fair value included as a component of gains on sale of loans, net. | |
Premises and Equipment | ' |
Premises and Equipment | |
Land is carried at cost. Buildings and equipment are carried at cost, less accumulated depreciation and amortization computed on the straight-line method over the estimated useful lives of the assets or the expected terms of the leases, if shorter. Expected terms include lease option periods to the extent that the exercise of such options is reasonably assured. | |
Real Estate Held for Investment | ' |
Real Estate Held for Investment | |
In 2012, the Bank reclassified the carrying value of undeveloped land acquired for a branch location in the amount of $1.4 million from premises and equipment to real estate held for investment. This asset did not meet held-for-sale criteria as management intended to lease the land and there was no immediate plan for sale. Upon transfer, the asset was evaluated for impairment and management determined that the asset was not impaired because future undiscounted cash flows of the expected rental payments and the salvage value of the land exceeded the carrying value at December 31, 2012. | |
Real Estate Held for Sale | ' |
Real Estate Held for Sale | |
Real estate held for sale is carried at the lower of cost or fair value, less cost to sell. Real estate is classified as held for sale when management has committed to a plan to sell the asset; the asset is available for immediate sale in its present condition; an active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated; the sale of the asset is probable, and transfer of the asset is expected to qualify for recognition of a sale within one year; the asset is being actively marketed for sale; and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. | |
On June 1, 2013, upon expiration of the letter of intent from the expected lessee, the Bank reclassified the $1.4 million carrying value of the undeveloped land classified as real estate held for investment at December 31, 2012 to real estate held for sale as management intends to sell the land and all of the above criteria have been met. | |
On June 1, 2013, the Bank reclassified land and building previously purchased for the potential relocation of the corporate headquarters with a carrying value of $2.6 million from premises and equipment to real estate held for sale as the Bank determined that the costs to improve the property for its intended use exceeded its initial expectations. | |
The Bank recorded a $482,000 impairment loss in non-interest expenses upon transfer of the aforementioned properties to real estate held for sale. | |
Foreclosed Real Estate | ' |
Foreclosed Real Estate | |
Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value, less cost to sell, at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less costs to sell. Revenue and expenses from operations, changes in the valuation allowance, gains or losses on sales and any direct write-downs are included in foreclosed real estate expenses. Foreclosed real estate consists of residential real estate properties. | |
Bank-owned Life Insurance | ' |
Bank-owned Life Insurance | |
Bank-owned life insurance policies are reflected in the Consolidated Balance Sheets at cash surrender value. Changes in cash surrender value are reflected in non-interest income in the Consolidated Statements of Net Income and are not subject to income taxes. | |
Transfers of Financial Assets | ' |
Transfers of Financial Assets | |
Transfers of an entire financial asset, a group of entire financial assets, or a participating interest in an entire financial asset are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Bank, (2) the transferee obtains the right to pledge or exchange the transferred assets, and (3) the Bank does not maintain effective control over the transferred assets. | |
During the normal course of business, the Bank may transfer a portion of a financial asset, for example, a participation loan or the government guaranteed portion of a loan. In order to be eligible for sales treatment, the transfer of the portion of the loan must meet the criteria of a participating interest. If it does not meet the criteria of a participating interest, the transfer must be accounted for as a secured borrowing. In order to meet the criteria for a participating interest, all cash flows from the loan must be divided proportionately, the rights of each loan holder must have the same priority, the loan holders must have no recourse to the transferor other than standard representations and warranties and no loan holder has the right to pledge or exchange the entire loan. | |
Advertising Costs | ' |
Advertising Costs | |
Advertising costs are expensed as incurred. | |
Defined Benefit Plan | ' |
Defined Benefit Plan | |
The compensation cost of an employee's pension benefit is recognized on the projected unit credit method over the employee's approximate service period. The aggregate cost method is utilized for funding purposes. | |
The Bank accounts for its defined benefit pension plan using an actuarial model that allocates pension costs over the service period of employees in the plan. The Bank accounts for the over-funded or under-funded status of its defined benefit plan as an asset or liability in its balance sheet and recognizes changes in the funded status in the year in which the changes occur through other comprehensive income/loss. | |
Income Taxes | ' |
Income Taxes | |
Deferred income tax assets and liabilities are determined using the liability method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the book and tax basis of the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws. A valuation allowance is established against deferred tax assets when, based upon the available evidence including historical and projected taxable income, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company does not have any uncertain tax positions at December 31, 2013 and 2012 which require accrual or disclosure. The Company records interest and penalties as part of income tax expense, if applicable. | |
Comprehensive Income/Loss | ' |
Comprehensive Income/Loss | |
Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities are reported as a separate component of the retained earnings section of the balance sheet, such items, along with net income, are components of comprehensive income/loss. The Bank measures the pension plan assets and pension obligations on an annual basis and recognizes in the financial statements an asset or liability for the plan's funded status. Accumulated other comprehensive loss represents the actuarial loss that will be amortized through pension expense, net of tax and amounted to $324,000 and $764,000, at December 31, 2013 and 2012, respectively net of related tax effects of $130,000 and $248,000, respectively. | |
Segments and Significant Group Concentrations of Credit Risk | ' |
Segments and Significant Group Concentrations of Credit Risk | |
Management evaluates the Bank's performance and allocates resources based on a single segment concept. Accordingly, there are no separately identified operating segments for which discrete financial information is available. The Bank does not derive revenues from or have assets located in foreign countries, nor does it derive revenue from any single customer that represents 10% or more of the Bank's total revenues. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
As an "emerging growth company," as defined in Title 1 of the Jumpstart Our Business Startups (JOBS) Act, the Bank has elected to use the extended transition period to delay adoption of new or reissued accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. Accordingly, the consolidated financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards. As of December 31, 2013, there is no significant difference in the comparability of the financial statements as a result of this extended transition period. | |
In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-02, Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income. This update requires entities to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, entities are required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. This ASU is effective prospectively for public entities for reporting periods beginning after December 15, 2012 and for nonpublic entities for reporting periods beginning after December 15, 2013. Under the extended transition period for an emerging growth company, the Corporation will adopt this ASU on January 1, 2014. Management does not expect this ASU to have a material effect on the presentation of comprehensive income in the Corporation's consolidated financial statements. | |
LOANS_Tables
LOANS (Tables) | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||
LOANS | ' | |||||||||||||||||||||||||
Summary of the balances of loans | ' | |||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Residential real estate mortgage loans: | ||||||||||||||||||||||||||
1-4 family | 98,180 | $ | 78,633 | |||||||||||||||||||||||
Home equity loans and lines of credit | 83,334 | 83,154 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Total residential real estate mortgage loans | 181,514 | 161,787 | ||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||
Commercial real estate | 91,609 | 81,754 | ||||||||||||||||||||||||
Commercial business | 8,301 | 7,899 | ||||||||||||||||||||||||
Commercial construction | 7,099 | 3,302 | ||||||||||||||||||||||||
SBA | 38,004 | 39,628 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Total commercial loans | 145,013 | 132,583 | ||||||||||||||||||||||||
Consumer | 1,672 | 2,320 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Total loans | 328,199 | 296,690 | ||||||||||||||||||||||||
Allowance for loan losses | (1,656 | ) | (1,569 | ) | ||||||||||||||||||||||
Net deferred loan costs | 2,033 | 1,878 | ||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Loans, net | $ | 328,576 | $ | 296,999 | ||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||
| | | | | | | | |||||||||||||||||||
Schedule of activity in the allowance for loan losses and allocation of the allowance to loan segments | ' | |||||||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||||
Residential | Home | Commercial | Commercial | Commercial | SBA | Consumer | Total | |||||||||||||||||||
1-4 Family | Equity | Real Estate | Business | Construction | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||
Beginning balance | $ | 393 | $ | 674 | $ | 261 | $ | 25 | $ | 11 | $ | 185 | $ | 20 | $ | 1,569 | ||||||||||
Provisions (credit) for loan losses | 148 | 343 | 60 | 4 | 13 | 2 | (3 | ) | 567 | |||||||||||||||||
Loans charged-off | (94 | ) | (424 | ) | — | — | — | (33 | ) | (15 | ) | (566 | ) | |||||||||||||
Recoveries | 15 | 12 | — | — | — | 43 | 16 | 86 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance | $ | 462 | $ | 605 | $ | 321 | $ | 29 | $ | 24 | $ | 197 | $ | 18 | $ | 1,656 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
December 31, 2013 | ||||||||||||||||||||||||||
Allowance for impaired loans | $ | 94 | $ | 66 | $ | — | $ | — | $ | — | $ | 34 | $ | 7 | $ | 201 | ||||||||||
Allowance for non-impaired loans | 368 | 539 | 321 | 29 | 24 | 163 | 11 | 1,455 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total allowance for loan losses | $ | 462 | $ | 605 | $ | 321 | $ | 29 | $ | 24 | $ | 197 | $ | 18 | $ | 1,656 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired loans | $ | 6,499 | $ | 359 | $ | — | $ | — | $ | — | $ | 2,681 | $ | 33 | $ | 9,572 | ||||||||||
Non-impaired loans | 91,681 | 82,975 | 91,609 | 8,301 | 7,099 | 35,323 | 1,639 | 318,627 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans | $ | 98,180 | $ | 83,334 | $ | 91,609 | $ | 8,301 | $ | 7,099 | $ | 38,004 | $ | 1,672 | $ | 328,199 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Year Ended December 31, 2012 | ||||||||||||||||||||||||||
Residential | Home | Commercial | Commercial | Commercial | SBA | Consumer | Total | |||||||||||||||||||
1-4 Family | Equity | Real Estate | Business | Construction | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||||||||
Beginning balance | $ | 531 | $ | 501 | $ | 214 | $ | 13 | $ | 1 | $ | 149 | $ | 15 | $ | 1,424 | ||||||||||
Provisions (credit) for loan losses | 7 | 872 | 47 | 12 | 10 | 114 | 47 | 1,109 | ||||||||||||||||||
Loans charged-off | (154 | ) | (707 | ) | — | — | — | (117 | ) | (58 | ) | (1,036 | ) | |||||||||||||
Recoveries | 9 | 8 | — | — | — | 39 | 16 | 72 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending balance | $ | 393 | $ | 674 | $ | 261 | $ | 25 | $ | 11 | $ | 185 | $ | 20 | $ | 1,569 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
The allowance allocated by segment is as follows: | ||||||||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||||||||
Residential | Home Equity | Commercial | Commercial | Commercial | SBA | Consumer | Total | |||||||||||||||||||
1-4 Family | Real Estate | Business | Construction | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Allowance for impaired loans | $ | 104 | $ | 132 | $ | — | $ | — | $ | — | $ | 19 | $ | 7 | $ | 262 | ||||||||||
Allowance for non-impaired loans | 289 | 542 | 261 | 25 | 11 | 166 | 13 | 1,307 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total allowance for loan losses | $ | 393 | $ | 674 | $ | 261 | $ | 25 | $ | 11 | $ | 185 | $ | 20 | $ | 1,569 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired loans | $ | 6,727 | $ | 1,006 | $ | — | $ | — | $ | — | $ | 2,074 | $ | 30 | $ | 9,837 | ||||||||||
Non-impaired loans | 71,906 | 82,148 | 81,754 | 7,899 | 3,302 | 37,554 | 2,290 | 286,853 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Total loans | $ | 78,633 | $ | 83,154 | $ | 81,754 | $ | 7,899 | $ | 3,302 | $ | 39,628 | $ | 2,320 | $ | 296,690 | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Schedule of the total general allowance for loan losses presented by the amount attributable to the ten year historical loss experience and qualitative factors | ' | |||||||||||||||||||||||||
General | Qualitative | Total | ||||||||||||||||||||||||
Allowance | Factors | General | ||||||||||||||||||||||||
10 Year Loss | Allowance | |||||||||||||||||||||||||
History | ||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
December 31, 2013 | $ | 592 | $ | 863 | $ | 1,455 | ||||||||||||||||||||
Percent of general allowance | 41 | % | 59 | % | 100 | % | ||||||||||||||||||||
December 31, 2012 | $ | 508 | $ | 799 | $ | 1,307 | ||||||||||||||||||||
Percent of general allowance | 39 | % | 61 | % | 100 | % | ||||||||||||||||||||
Summary of past due and non-accrual loans | ' | |||||||||||||||||||||||||
30 - 59 Days | 60 - 89 Days | 90 Days | Total | Past Due | Loans on | |||||||||||||||||||||
Past Due | Past Due | or more | Past Due | > 90 Days and | Non-accrual | |||||||||||||||||||||
Past Due | Still Accruing | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
Residential 1-4 family | $ | 925 | $ | 1,573 | $ | 1,035 | $ | 3,533 | $ | — | $ | 4,790 | ||||||||||||||
Home equity loans and lines of credit | 294 | — | 53 | 347 | — | 158 | ||||||||||||||||||||
Commercial real estate | — | — | — | — | — | — | ||||||||||||||||||||
Commercial business | — | — | — | — | — | — | ||||||||||||||||||||
Commercial construction | — | — | — | — | — | — | ||||||||||||||||||||
SBA | 1,131 | 81 | 977 | 2,189 | — | 1,508 | ||||||||||||||||||||
Consumer | 19 | — | — | 19 | — | 3 | ||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||||
Total | $ | 2,369 | $ | 1,654 | $ | 2,065 | $ | 6,088 | $ | — | $ | 6,459 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | | | | | | | |||||||
December 31, 2012 | ||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
Residential 1-4 family | $ | 1,721 | $ | 717 | $ | 2,652 | $ | 5,090 | $ | — | $ | 5,773 | ||||||||||||||
Home equity loans and lines of credit | 25 | 83 | 640 | 748 | — | 804 | ||||||||||||||||||||
Commercial real estate | — | — | — | — | — | — | ||||||||||||||||||||
Commercial | — | — | — | — | — | — | ||||||||||||||||||||
Commercial construction | — | — | — | — | — | — | ||||||||||||||||||||
SBA | 361 | — | 494 | 855 | — | 1,071 | ||||||||||||||||||||
Consumer | 42 | — | — | 42 | — | 13 | ||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||||
Total | $ | 2,149 | $ | 800 | $ | 3,786 | $ | 6,735 | $ | — | $ | 7,661 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | | | | | | | |||||||
Schedule of information pertaining to impaired loans | ' | |||||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||||||||||||
Recorded | Unpaid | Related | Recorded | Unpaid | Related | |||||||||||||||||||||
Investment | Principal | Allowance | Investment | Principal | Allowance | |||||||||||||||||||||
Balance | Balance | |||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Impaired loans without a valuation allowance: | ||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
Residential 1-4 family | $ | 3,689 | $ | 3,850 | $ | — | $ | 3,256 | $ | 3,330 | $ | — | ||||||||||||||
Home equity loans and lines of credit | 104 | 281 | — | 322 | 490 | — | ||||||||||||||||||||
SBA | 1,764 | 1,838 | — | 1,624 | 1,750 | — | ||||||||||||||||||||
Consumer | 12 | 12 | — | — | — | — | ||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||||
Total | $ | 5,569 | $ | 5,981 | $ | — | $ | 5,202 | $ | 5,570 | $ | — | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | | | | | | | |||||||
Impaired loans with a valuation allowance: | ||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
Residential 1-4 family | $ | 2,810 | $ | 2,810 | $ | 94 | $ | 3,471 | $ | 3,471 | $ | 104 | ||||||||||||||
Home equity loans and lines of credit | 255 | 267 | 66 | 684 | 684 | 132 | ||||||||||||||||||||
SBA | 917 | 917 | 34 | 450 | 450 | 19 | ||||||||||||||||||||
Consumer | 20 | 20 | 7 | 30 | 30 | 7 | ||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||||
Total | $ | 4,002 | $ | 4,014 | $ | 201 | $ | 4,635 | $ | 4,635 | $ | 262 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | | | | | | | |||||||
Year ended | Year ended | |||||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||||||||||||
Average | Interest | Interest Income | Average | Interest | Interest Income | |||||||||||||||||||||
Recorded | Income | Recognized on | Recorded | Income | Recognized on | |||||||||||||||||||||
Investment | Recognized | Cash Basis | Investment | Recognized | Cash Basis | |||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Residential real estate: | ||||||||||||||||||||||||||
Residential 1-4 family | $ | 6,752 | $ | 229 | $ | 141 | $ | 6,053 | $ | 209 | $ | 120 | ||||||||||||||
Home equity loans and lines of credit | 623 | 36 | 26 | 848 | 25 | 18 | ||||||||||||||||||||
Commercial business | 23 | — | — | — | — | — | ||||||||||||||||||||
SBA | 2,297 | 81 | 19 | 2,139 | 104 | 45 | ||||||||||||||||||||
Consumer | 38 | 2 | 1 | 46 | — | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||||
Total | $ | 9,733 | $ | 348 | $ | 187 | $ | 9,086 | $ | 338 | $ | 183 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | | | | | | | |||||||
Summary of troubled debt restructurings | ' | |||||||||||||||||||||||||
Number of | Pre-Modification | Post-Modification | ||||||||||||||||||||||||
Contracts | Outstanding | Outstanding | ||||||||||||||||||||||||
Recorded | Recorded | |||||||||||||||||||||||||
Investment | Investment | |||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||||
Residential 1-4 family | 9 | $ | 2,229 | $ | 2,229 | |||||||||||||||||||||
Home equity and lines of credit | 3 | 225 | 225 | |||||||||||||||||||||||
SBA | 3 | 307 | 307 | |||||||||||||||||||||||
Consumer | 2 | 13 | 13 | |||||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||||||||
Residential 1-4 family | 12 | $ | 3,409 | $ | 3,409 | |||||||||||||||||||||
Home equity and lines of credit | 3 | 228 | 228 | |||||||||||||||||||||||
SBA | 2 | 257 | 257 | |||||||||||||||||||||||
Consumer | 2 | 31 | 31 | |||||||||||||||||||||||
Summary of troubled debt restructurings that defaulted in the first twelve months after restructure | ' | |||||||||||||||||||||||||
Number of | Recorded | |||||||||||||||||||||||||
Contracts | Investment | |||||||||||||||||||||||||
(Dollars | ||||||||||||||||||||||||||
in thousands) | ||||||||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||||
Residential 1-4 family | 7 | $ | 2,313 | |||||||||||||||||||||||
Home equity and lines of credit | 3 | 225 | ||||||||||||||||||||||||
SBA | 1 | 44 | ||||||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||||||||
Residential 1-4 family | 1 | $ | 310 | |||||||||||||||||||||||
SBA | 1 | 161 | ||||||||||||||||||||||||
Schedule of the Bank's commercial loans by risk rating | ' | |||||||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||
Commercial | Commercial | Commercial | SBA | Total | ||||||||||||||||||||||
Real Estate | Business | Construction | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Loans rated 1 - 5 | $ | 88,578 | $ | 7,898 | $ | 5,926 | $ | 30,723 | $ | 133,125 | ||||||||||||||||
Loans rated 5.5 | 2,858 | 168 | — | 2,493 | 5,519 | |||||||||||||||||||||
Loans rated 6 | — | — | — | 1,007 | 1,007 | |||||||||||||||||||||
Loans rated 7 | 173 | 235 | 1,173 | 3,622 | 5,203 | |||||||||||||||||||||
Loans rated 8 | — | — | — | 159 | 159 | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | ||||||||||
$ | 91,609 | $ | 8,301 | $ | 7,099 | $ | 38,004 | $ | 145,013 | |||||||||||||||||
| | | | | | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | | | | | | ||||||||||
December 31, 2012 | ||||||||||||||||||||||||||
Commercial | Commercial | Commercial | SBA | Total | ||||||||||||||||||||||
Real Estate | Business | Construction | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Loans rated 1 - 5 | $ | 80,138 | $ | 7,234 | $ | 3,302 | $ | 29,401 | $ | 120,075 | ||||||||||||||||
Loans rated 5.5 | 1,616 | 176 | — | 4,204 | 5,996 | |||||||||||||||||||||
Loans rated 6 | — | — | — | 1,257 | 1,257 | |||||||||||||||||||||
Loans rated 7 | — | 489 | — | 4,766 | 5,255 | |||||||||||||||||||||
Loans rated 8 | — | — | — | — | — | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | ||||||||||
$ | 81,754 | $ | 7,899 | $ | 3,302 | $ | 39,628 | $ | 132,583 | |||||||||||||||||
| | | | | | | | | | | | | | | | | ||||||||||
| | | | | | | | | | | | | | | | | ||||||||||
PREMISES_AND_EQUIPMENT_Tables
PREMISES AND EQUIPMENT (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
PREMISES AND EQUIPMENT | ' | |||||||
Summary of the cost and accumulated depreciation and amortization of premises and equipment | ' | |||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Land | $ | 7,604 | $ | 8,729 | ||||
Buildings and improvements | 18,018 | 16,086 | ||||||
Furniture, fixtures and equipment | 5,204 | 5,079 | ||||||
Leasehold improvements | 111 | 387 | ||||||
Fixed assets in process | 1,399 | 1,552 | ||||||
| | | | | | | | |
32,336 | 31,833 | |||||||
Less accumulated depreciation and amortization | (6,752 | ) | (6,914 | ) | ||||
| | | | | | | | |
$ | 25,584 | $ | 24,919 | |||||
| | | | | | | | |
| | | | | | | | |
Schedule of future minimum lease commitments | ' | |||||||
Pursuant to terms of the lease agreements in effect at December 31, 2013, future minimum lease commitments are as follows (in thousands): | ||||||||
2014 | $ | 136 | ||||||
2015 | 136 | |||||||
2016 | 131 | |||||||
2017 | 125 | |||||||
2018 | 125 | |||||||
Thereafter | 1,792 | |||||||
| | | | | ||||
$ | 2,445 | |||||||
| | | | | ||||
| | | | | ||||
DEPOSITS_Tables
DEPOSITS (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
DEPOSITS | ' | |||||||||||||
Summary of deposit balances, by type | ' | |||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||
Non-interest-bearing demand deposit accounts | $ | 63,751 | $ | 57,608 | ||||||||||
Savings accounts and interest-bearing DDA | 79,931 | 77,042 | ||||||||||||
Money market accounts | 59,210 | 51,570 | ||||||||||||
Club accounts | 1,614 | 1,197 | ||||||||||||
| | | | | | | | |||||||
Total non-certificate accounts | 204,506 | 187,417 | ||||||||||||
| | | | | | | | |||||||
Term certificates $100,000 or greater | 49,980 | 42,999 | ||||||||||||
Term certificates less than $100,000 | 75,430 | 77,377 | ||||||||||||
| | | | | | | | |||||||
Total certificate accounts | 125,410 | 120,376 | ||||||||||||
| | | | | | | | |||||||
Total deposits | $ | 329,916 | $ | 307,793 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Summary of certificate accounts by maturity | ' | |||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||
Maturing Periods | Amount | Weighted | Amount | Weighted | ||||||||||
Average | Average | |||||||||||||
Rate | Rate | |||||||||||||
(Dollars in thousands) | ||||||||||||||
Within 1 year | $ | 43,868 | 0.89 | % | $ | 46,376 | 1.07 | % | ||||||
Within 2 years | 30,228 | 2.28 | 15,185 | 1.6 | ||||||||||
Within 3 years | 22,841 | 2.37 | 24,130 | 2.75 | ||||||||||
Within 4 years | 14,835 | 1.8 | 20,158 | 2.58 | ||||||||||
Within 5 years | 13,638 | 1.57 | 14,527 | 1.84 | ||||||||||
| | | | | | | | | | | | | | |
$ | 125,410 | 1.68 | % | $ | 120,376 | 1.82 | % | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
BORROWED_FUNDS_Tables
BORROWED FUNDS (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
BORROWED FUNDS. | ' | |||||||||||||
Schedule of Long-term FHLB advances | ' | |||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||
Amount | Weighted | Amount | Weighted | |||||||||||
Average | Average | |||||||||||||
Rate | Rate | |||||||||||||
(Dollars in thousands) | ||||||||||||||
Non-amortizing advances maturing: | ||||||||||||||
2013 | $ | — | — | % | $ | 1,300 | 3.59 | % | ||||||
2014 | 700 | 3.84 | 700 | 3.84 | ||||||||||
2015 | 1,300 | 4.04 | 1,300 | 4.04 | ||||||||||
Amortizing advances maturing in 2013(1) | — | — | 43 | 3.07 | ||||||||||
| | | | | | | | | | | | | | |
Total FHLB advances | $ | 2,000 | 3.97 | % | $ | 3,343 | 3.81 | % | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
-1 | ||||||||||||||
Amortizing advances require monthly principal and interest payments. | ||||||||||||||
EMPLOYEE_BENEFITS_Tables
EMPLOYEE BENEFITS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
EMPLOYEE BENEFITS | ' | |||||||
Schedule of change in benefit obligation | ' | |||||||
Years ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Change in benefit obligation: | ||||||||
Benefit obligation at beginning of year | $ | 1,974 | $ | 1,834 | ||||
Interest cost | 79 | 80 | ||||||
Actuarial (gain) loss | (215 | ) | 105 | |||||
Benefits paid | (32 | ) | (45 | ) | ||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Projected benefit obligation at end of year | 1,806 | 1,974 | ||||||
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | |
Schedule of change in plan assets | ' | |||||||
Years ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
| | | | | | | | |
Change in plan assets: | ||||||||
Fair value of plan assets at beginning of year | 1,558 | 1,332 | ||||||
Actual return on plan assets | 271 | 182 | ||||||
Employer contribution | 71 | 89 | ||||||
Benefits paid | (32 | ) | (45 | ) | ||||
| | | | | | | | |
Fair value of plan assets at end of year | 1,868 | 1,558 | ||||||
| | | | | | | | |
Unfunded status and (prepaid) accrued pension benefit at end of year | $ | (62 | ) | $ | 416 | |||
| | | | | | | | |
| | | | | | | | |
Accumulated benefit obligation at end of year | $ | 1,806 | $ | 1,974 | ||||
| | | | | | | | |
| | | | | | | | |
Schedule of components of net periodic pension cost | ' | |||||||
Years Ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Interest cost | $ | 79 | $ | 80 | ||||
Expected return on plan assets | (110 | ) | (95 | ) | ||||
Amortization of actuarial loss | 64 | 62 | ||||||
| | | | | | | | |
$ | 33 | $ | 47 | |||||
| | | | | | | | |
| | | | | | | | |
Schedule of assumptions used to determine net periodic pension cost | ' | |||||||
Years Ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Discount rate | 4.05 | % | 4.4 | % | ||||
Expected return on plan assets | 7 | % | 7 | % | ||||
Summary of the fair values of major categories of pension plan assets | ' | |||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Equity securities: | ||||||||
Domestic mutual funds | $ | 766 | $ | 598 | ||||
Fixed income | 622 | 604 | ||||||
International mutual funds | 319 | 247 | ||||||
International exchange traded funds | 89 | 94 | ||||||
Cash and cash equivalents | 72 | 15 | ||||||
| | | | | | | | |
$ | 1,868 | $ | 1,558 | |||||
| | | | | | | | |
| | | | | | | | |
Schedule of estimated future benefit payments | ' | |||||||
Years Ending December 31, | Amount | |||||||
(In thousands) | ||||||||
2014 | $ | 30 | ||||||
2015 | 42 | |||||||
2016 | 48 | |||||||
2017 | 100 | |||||||
2018 | 251 | |||||||
Thereafter | 640 |
OFFBALANCE_SHEET_ACTIVITIES_AN1
OFF-BALANCE SHEET ACTIVITIES AND DERIVATIVES (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
OFF-BALANCE SHEET ACTIVITIES AND DERIVATIVES | ' | |||||||||||
Schedule of financial instruments outstanding whose contract amounts represent credit risk | ' | |||||||||||
December 31, | ||||||||||||
2013 | 2012 | |||||||||||
(In thousands) | ||||||||||||
Commitments to grant loans | $ | 12,858 | $ | 9,945 | ||||||||
Commitments to originate loans to be sold | 7,150 | 11,317 | ||||||||||
Unfunded commitments under home equity lines of credit | 46,456 | 47,245 | ||||||||||
Unfunded commitments under commercial lines of credit | 11,315 | 8,972 | ||||||||||
Unfunded commitments under SBA lines of credit | 3,601 | 2,351 | ||||||||||
Unadvanced funds on construction loans | 3,812 | 2,045 | ||||||||||
Schedule of the fair values of derivative instruments in the consolidated balance sheets | ' | |||||||||||
Assets | Liabilities | |||||||||||
Balance | Fair | Balance | Fair | |||||||||
Sheet | Value | Sheet | Value | |||||||||
Location | Location | |||||||||||
(In thousands) | ||||||||||||
December 31, 2013 | ||||||||||||
Derivative loan commitments | NA | $ | — | Other liabilities | $ | 4 | ||||||
Forward loan sale commitments | Other assets | 248 | NA | — | ||||||||
| | | | | | | | | | | | |
Total derivatives not designated as hedging instruments | $ | 248 | $ | 4 | ||||||||
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Assets | Liabilities | |||||||||||
Balance | Fair | Balance | Fair | |||||||||
Sheet | Value | Sheet | Value | |||||||||
Location | Location | |||||||||||
(In thousands) | ||||||||||||
December 31, 2012 | ||||||||||||
Derivative loan commitments | Other assets | $ | 154 | NA | $ | — | ||||||
Forward loan sale commitments | Other assets | 47 | NA | — | ||||||||
| | | | | | | | | | | | |
Total derivatives not designated as hedging instruments | $ | 201 | $ | — | ||||||||
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Schedule of information pertaining to the gains and losses on Bank's derivative instruments not designated as hedging instruments | ' | |||||||||||
Years Ended | ||||||||||||
Location of | December 31, | |||||||||||
Gain/(Loss) | 2013 | 2012 | ||||||||||
(In thousands) | ||||||||||||
Derivative loan commitments | Gain on sales of loans, net | $ | (382 | ) | $ | 281 | ||||||
Forward loan sale commitments | Gain on sales of loans, net | 201 | (209 | ) | ||||||||
| | | | | | | | | | |||
Total | $ | (181 | ) | $ | 72 | |||||||
| | | | | | | | | | |||
| | | | | | | | | | |||
LOANS_TO_RELATED_PARTIES_Table
LOANS TO RELATED PARTIES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
LOANS TO RELATED PARTIES | ' | |||||||
Schedule of loans to directors, executive officers and their associates | ' | |||||||
Years Ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Balance at beginning of year | $ | 2,096 | $ | 2,624 | ||||
Principal additions | 140 | 166 | ||||||
Principal payments | (962 | ) | (694 | ) | ||||
| | | | | | | | |
Balance at end of year | $ | 1,274 | $ | 2,096 | ||||
| | | | | | | | |
| | | | | | | | |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
INCOME TAXES | ' | |||||||
Schedule of allocation of income taxes between current and deferred portions | ' | |||||||
Years Ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Current tax expense: | ||||||||
Federal | $ | 606 | $ | 208 | ||||
State | 207 | 101 | ||||||
| | | | | | | | |
813 | 309 | |||||||
| | | | | | | | |
Deferred tax expense (benefit): | ||||||||
Federal | (477 | ) | 437 | |||||
State | (169 | ) | 89 | |||||
Change in valuation allowance | 20 | — | ||||||
| | | | | | | | |
(626 | ) | 526 | ||||||
| | | | | | | | |
Total income tax expense | $ | 187 | $ | 835 | ||||
| | | | | | | | |
| | | | | | | | |
Summary of reasons for differences between the statutory federal income tax expense and the actual tax expense | ' | |||||||
Years Ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Statutory tax expense at 34% | $ | 139 | $ | 674 | ||||
Increase (decrease) resulting from: | ||||||||
State taxes, net of federal tax benefit | 25 | 118 | ||||||
Change in valuation allowance | 20 | — | ||||||
Other, net | 3 | 43 | ||||||
| | | | | | | | |
$ | 187 | $ | 835 | |||||
| | | | | | | | |
| | | | | | | | |
Schedule of deferred taxes | ' | |||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Deferred tax assets: | ||||||||
Allowance for loan losses | $ | 661 | $ | 628 | ||||
Employee benefits | 499 | 302 | ||||||
Non-accrual income | 68 | 43 | ||||||
Defined benefit pension plan | 130 | 248 | ||||||
Charitable contribution carryforwards | 35 | 43 | ||||||
Organization costs | 140 | — | ||||||
| | | | | | | | |
Total deferred tax assets | 1,533 | 1,264 | ||||||
Valuation allowance | (20 | ) | — | |||||
| | | | | | | | |
Total deferred tax asset, net of valuation allowance | 1,513 | 1,264 | ||||||
| | | | | | | | |
Deferred tax liabilities: | ||||||||
Premises and equipment, net | (150 | ) | (368 | ) | ||||
Net deferred loan costs | (842 | ) | (750 | ) | ||||
Other, net | (81 | ) | (214 | ) | ||||
| | | | | | | | |
Total deferred tax liabilities | (1,073 | ) | (1,332 | ) | ||||
| | | | | | | | |
Deferred tax asset (liability), net | $ | 440 | $ | (68 | ) | |||
| | | | | | | | |
| | | | | | | | |
Summary of change in deferred taxes | ' | |||||||
Years Ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Balance at beginning of year | $ | (68 | ) | $ | 476 | |||
Deferred tax (expense) / benefit | 646 | (526 | ) | |||||
Change in valuation allowance | (20 | ) | — | |||||
Unrealized gain/loss pertaining to defined benefit pension plan | (118 | ) | (18 | ) | ||||
| | | | | | | | |
Balance at end of year | $ | 440 | $ | (68 | ) | |||
| | | | | | | | |
| | | | | | | | |
MINIMUM_REGULATORY_CAPITAL_REQ1
MINIMUM REGULATORY CAPITAL REQUIREMENTS (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
MINIMUM REGULATORY CAPITAL REQUIREMENTS | ' | |||||||||||||||||||
Schedule of the Bank's actual and minimum required capital amounts | ' | |||||||||||||||||||
Actual | Minimum Capital | Minimum To Be | ||||||||||||||||||
Requirements | Well Capitalized | |||||||||||||||||||
Under Prompt | ||||||||||||||||||||
Corrective Action | ||||||||||||||||||||
Provisions | ||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
Total capital | $ | 29,667 | 9.8 | % | $ | 24,201 | 8 | % | $ | 30,252 | 10 | % | ||||||||
(to risk weighted assets) | ||||||||||||||||||||
Tier 1 capital | 28,011 | 9.3 | 12,101 | 4 | 18,151 | 6 | ||||||||||||||
(to risk weighted assets) | ||||||||||||||||||||
Tier 1 capital | 28,011 | 7.2 | 15,482 | 4 | 19,353 | 5 | ||||||||||||||
(to average assets) | ||||||||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Total capital | $ | 29,341 | 10.7 | % | $ | 21,923 | 8 | % | $ | 27,404 | 10 | % | ||||||||
(to risk weighted assets) | ||||||||||||||||||||
Tier 1 capital | 27,772 | 10.1 | 10,962 | 4 | 16,442 | 6 | ||||||||||||||
(to risk weighted assets) | ||||||||||||||||||||
Tier 1 capital | 27,772 | 8.1 | 13,770 | 4 | 17,213 | 5 | ||||||||||||||
(to average assets) | ||||||||||||||||||||
FAIR_VALUES_OF_ASSETS_AND_LIAB1
FAIR VALUES OF ASSETS AND LIABILITIES (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair values of assets and liabilities | ' | ||||||||||||||||
Schedule of change in Level 3 assets and liabilities, consisting of derivative loan and forward sale commitments, that are measured on a recurring basis | ' | ||||||||||||||||
The table below presents (in thousands), for the years ended December 31, 2013 and 2012, the changes in Level 3 assets and liabilities, consisting of derivative loan and forward sale commitments, that are measured on a recurring basis. There were no transfers between levels during the periods presented. | |||||||||||||||||
Balance at December 31, 2011 | $ | 357 | |||||||||||||||
Total realized and unrealized gains included in net income | 72 | ||||||||||||||||
Settlements and closed loans | (228 | ) | |||||||||||||||
| | | | | |||||||||||||
Balance at December 31, 2012 | 201 | ||||||||||||||||
Total realized and unrealized losses included in net income | (181 | ) | |||||||||||||||
Settlements and closed loans | 224 | ||||||||||||||||
| | | | | |||||||||||||
Balance at December 31, 2013 | $ | 244 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Total unrealized gains relating to instruments still held at December 31, 2012 | $ | 72 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Total unrealized losses relating to instruments still held at December 31, 2013 | $ | (181 | ) | ||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Summary of the fair value hierarchy used to determine each adjustment and the carrying value of the related individual assets | ' | ||||||||||||||||
December 31, 2013 | Year Ended | ||||||||||||||||
December 31, | |||||||||||||||||
2013 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total Losses | ||||||||||||||
(In thousands) | |||||||||||||||||
Foreclosed real estate | $ | — | $ | — | $ | 1,170 | $ | 180 | |||||||||
Impaired loans | 987 | 280 | |||||||||||||||
Real estate held for sale | — | — | 3,515 | 482 | |||||||||||||
| | | | | | | | | | | | | | ||||
$ | — | $ | — | $ | 5,672 | $ | 942 | ||||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
December 31, 2012 | Year Ended | ||||||||||||||||
December 31, | |||||||||||||||||
2012 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total Losses | ||||||||||||||
(In thousands) | |||||||||||||||||
Foreclosed real estate | $ | — | $ | — | $ | 2,594 | $ | 402 | |||||||||
Impaired loans | — | — | 2,254 | 320 | |||||||||||||
| | | | | | | | | | | | | | ||||
$ | — | $ | — | $ | 4,848 | $ | 722 | ||||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Summary of carrying amount, estimated fair value and placement in the fair value hierarchy of the Bank's financial instruments | ' | ||||||||||||||||
December 31, 2013 | |||||||||||||||||
Fair Value Measurements | |||||||||||||||||
Carrying | Estimated | ||||||||||||||||
Amount | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||
(In thousands) | |||||||||||||||||
Financial assets: | |||||||||||||||||
Loans, net of allowance for loan losses | $ | 328,576 | $ | 327,618 | $ | — | $ | — | $ | 327,618 | |||||||
Loans held for sale | 8,648 | 8,690 | — | — | 8,690 | ||||||||||||
FHLB stock | 2,694 | 2,694 | — | — | 2,694 | ||||||||||||
Financial liabilities: | |||||||||||||||||
Certificates of deposit | 125,410 | 127,528 | — | 127,528 | — | ||||||||||||
Borrowed funds | 28,000 | 28,021 | — | 28,021 | — | ||||||||||||
December 31, 2012 | |||||||||||||||||
Fair Value Measurements | |||||||||||||||||
Carrying | Estimated | ||||||||||||||||
Amount | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||
(In thousands) | |||||||||||||||||
Financial assets: | |||||||||||||||||
Loans, net of allowance for loan losses | $ | 296,999 | $ | 305,797 | $ | — | $ | — | $ | 305,797 | |||||||
Loan held for sale | 13,642 | 13,870 | — | — | 13,870 | ||||||||||||
FHLB stock | 3,036 | 3,036 | — | — | 3,036 | ||||||||||||
Financial liabilities: | |||||||||||||||||
Certificates of deposit | 120,376 | 122,483 | — | 122,483 | — | ||||||||||||
Borrowed funds | 16,343 | 16,452 | — | 16,452 | — | ||||||||||||
Recurring | ' | ||||||||||||||||
Fair values of assets and liabilities | ' | ||||||||||||||||
Schedule of significant unobservable inputs used in the fair value measurements of Level 3 assets and liabilities | ' | ||||||||||||||||
Measurements | Fair Value | Valuation | Unobservable | Range | |||||||||||||
Technique | Inputs | ||||||||||||||||
(In thousands) | |||||||||||||||||
December 31, 2013 | |||||||||||||||||
Derivative loan commitments | $ | (4 | ) | Investor pricing | Pull-through rate | 82.5 - 100% | |||||||||||
Pricing spreads | 95.28 - 106.16% | ||||||||||||||||
Forward loan sale commitments | 248 | Investor pricing | Pricing spreads | 94.55 - 106.16% | |||||||||||||
December 31, 2012 | |||||||||||||||||
Derivative loan commitments | 154 | Investor pricing | Pull-through rate | 82.5 - 100% | |||||||||||||
Pricing spreads | 101.71 - 106.13% | ||||||||||||||||
Forward loan sale commitments | 47 | Investor pricing | Pricing spreads | 101.61 - 106.17% | |||||||||||||
Non-recurring | ' | ||||||||||||||||
Fair values of assets and liabilities | ' | ||||||||||||||||
Schedule of significant unobservable inputs used in the fair value measurements of Level 3 assets and liabilities | ' | ||||||||||||||||
Measurements | Fair Value | Valuation Technique | Unobservable Inputs | Range | |||||||||||||
(In thousands) | |||||||||||||||||
December 31, 2013 | |||||||||||||||||
Foreclosed real estate | $ | 1,170 | Discounted appraisals | Collateral discounts/selling costs | 5 - 30% | ||||||||||||
Impaired loans | 987 | Discounted appraisals | Collateral discounts/selling costs | 5 - 30% | |||||||||||||
Real estate held for sale | 3,515 | Appraisal of collateral | Selling costs | 5% | |||||||||||||
December 31, 2012 | |||||||||||||||||
Foreclosed real estate | $ | 2,594 | Discounted appraisals | Collateral discounts/selling costs | 5 - 30% | ||||||||||||
Impaired loans | 2,254 | Discounted appraisals | Collateral discounts/selling costs | 5 - 30% |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||
Dec. 31, 2013 | Jan. 14, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
Plan of Conversion and Reorganization | Bank | Bank | Bancorp | ||
Bank | |||||
Summary Of Significant Accounting Policies | ' | ' | ' | ' | ' |
Ownership percentage | ' | ' | ' | ' | 100.00% |
Amount of stock subscriptions received | $43,398,000 | ' | ' | ' | ' |
Conversion costs | 888,000 | ' | ' | ' | ' |
Number of shares of common stock offering on a priority basis to qualifying depositors and to the general public, including those issued to tax qualified employee benefit plans | ' | 4,827,125 | ' | ' | ' |
Share price (in dollars per share) | ' | $10 | ' | ' | ' |
Net proceeds from common stock offering on a priority basis to qualifying depositors and to the general public, including those issued to tax qualified employee benefit plans | ' | 46,400,000 | ' | ' | ' |
Amount of cash contribution to Coastway Cares Charitable Foundation II | ' | 300,000 | ' | ' | ' |
Number of common stock shares contribution to Coastway Cares Charitable Foundation II | ' | 122,054 | ' | ' | ' |
Total contribution to Coastway Cares Charitable Foundation II as a percentage of gross proceeds of offering | ' | 3.15% | ' | ' | ' |
Gross proceeds of the offering | ' | 1,500,000 | ' | ' | ' |
Total number of shares of common stock outstanding upon completion of the Conversion | ' | 4,949,179 | ' | ' | ' |
Number of shares of stock issued in conversion that were acquired by ESOP | ' | 395,934 | ' | ' | ' |
Term of loan payable | ' | '25 years | ' | ' | ' |
Liquidation amount | ' | 27,500,000 | ' | ' | ' |
Federal Home Loan Bank Stock | ' | ' | ' | ' | ' |
Impairment | ' | ' | $0 | $0 | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) | 12 Months Ended |
Dec. 31, 2013 | |
Allowance for Loan Losses | ' |
Historical loss period used to capture relevant loss data for each loan segment | '10 years |
Period of charge off trends to be considered for adjustment to historical loss factor | '3 years |
Commercial loans | Commercial construction | ' |
Allowance for Loan Losses | ' |
Loans provided as a percentage of projected costs | 50.00% |
Commercial loans | SBA | Maximum | ' |
Allowance for Loan Losses | ' |
Percentage of principal and accrued interest that may qualify for guarantees | 85.00% |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) (USD $) | 12 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2012 | Jun. 01, 2013 | Dec. 31, 2012 | Jun. 01, 2013 | |
Reclassification of undeveloped land | Reclassification of undeveloped land | Reclassification of land and building | |||
Real estate | ' | ' | ' | ' | ' |
Premises and equipment, net | $25,584,000 | $24,919,000 | ' | ($1,354,000) | ($2,643,000) |
Real estate held for investment | ' | 1,354,000 | -1,354,000 | 1,354,000 | ' |
Real estate held for sale | 3,515,000 | ' | 1,354,000 | ' | 2,643,000 |
Period within which transfer of the asset is expected to qualify for recognition of sale | '1 year | ' | ' | ' | ' |
Impairment loss on real estate held for sale | 482,000 | ' | ' | ' | ' |
Actuarial loss amortized through pension expense, net of tax | 324,000 | 764,000 | ' | ' | ' |
Actuarial loss amortized through pension expense, tax effect | $130,000 | $248,000 | ' | ' | ' |
RESTRICTIONS_ON_CASH_AND_AMOUN1
RESTRICTIONS ON CASH AND AMOUNTS DUE FROM BANKS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
RESTRICTIONS ON CASH AND AMOUNTS DUE FROM BANKS | ' | ' |
Reserve balance | $1.90 | $1.80 |
LOANS_Details
LOANS (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Loans | ' | ' | ' |
Total loans | $328,199,000 | $296,690,000 | ' |
Allowance for loan losses | -1,656,000 | -1,569,000 | -1,424,000 |
Net deferred loan costs | 2,033,000 | 1,878,000 | ' |
Loans, net | 328,576,000 | 296,999,000 | ' |
Lines of credit | ' | ' | ' |
Loans | ' | ' | ' |
Guarantees (as a percent) | 50.00% | ' | ' |
1-4 family | ' | ' | ' |
Loans | ' | ' | ' |
Allowance for loan losses | -462,000 | -393,000 | -531,000 |
Home equity loans and lines of credit | ' | ' | ' |
Loans | ' | ' | ' |
Allowance for loan losses | -605,000 | -674,000 | -501,000 |
Commercial real estate | ' | ' | ' |
Loans | ' | ' | ' |
Allowance for loan losses | -321,000 | -261,000 | -214,000 |
Commercial business | ' | ' | ' |
Loans | ' | ' | ' |
Allowance for loan losses | -29,000 | -25,000 | -13,000 |
Commercial construction | ' | ' | ' |
Loans | ' | ' | ' |
Allowance for loan losses | -24,000 | -11,000 | -1,000 |
SBA | ' | ' | ' |
Loans | ' | ' | ' |
Allowance for loan losses | -197,000 | -185,000 | -149,000 |
Guaranteed portions | 27,300,000 | 29,400,000 | ' |
SBA | Loans in excess of $150,000 | ' | ' | ' |
Loans | ' | ' | ' |
Base amount for computation of guarantee percentage of loans | 150,000 | ' | ' |
Guarantees (as a percent) | 75.00% | ' | ' |
SBA | Loans less than $150,000 | ' | ' | ' |
Loans | ' | ' | ' |
Base amount for computation of guarantee percentage of loans | 150,000 | ' | ' |
Guarantees (as a percent) | 85.00% | ' | ' |
Consumer | ' | ' | ' |
Loans | ' | ' | ' |
Total loans | 1,672,000 | 2,320,000 | ' |
Allowance for loan losses | -18,000 | -20,000 | -15,000 |
Residential real estate mortgage loans | ' | ' | ' |
Loans | ' | ' | ' |
Total loans | 181,514,000 | 161,787,000 | ' |
Residential real estate mortgage loans | 1-4 family | ' | ' | ' |
Loans | ' | ' | ' |
Total loans | 98,180,000 | 78,633,000 | ' |
Residential real estate mortgage loans | Home equity loans and lines of credit | ' | ' | ' |
Loans | ' | ' | ' |
Total loans | 83,334,000 | 83,154,000 | ' |
Commercial loans | ' | ' | ' |
Loans | ' | ' | ' |
Total loans | 145,013,000 | 132,583,000 | ' |
Commercial loans | Commercial real estate | ' | ' | ' |
Loans | ' | ' | ' |
Total loans | 91,609,000 | 81,754,000 | ' |
Commercial loans | Commercial business | ' | ' | ' |
Loans | ' | ' | ' |
Total loans | 8,301,000 | 7,899,000 | ' |
Commercial loans | Commercial construction | ' | ' | ' |
Loans | ' | ' | ' |
Total loans | 7,099,000 | 3,302,000 | ' |
Commercial loans | SBA | ' | ' | ' |
Loans | ' | ' | ' |
Total loans | $38,004,000 | $39,628,000 | ' |
LOANS_Details_2
LOANS (Details 2) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Allowance for loan losses: | ' | ' |
Beginning balance | $1,569,000 | $1,424,000 |
Provisions (credit) for loan losses | 567,000 | 1,109,000 |
Loans charged-off | -566,000 | -1,036,000 |
Recoveries | 86,000 | 72,000 |
Ending balance | 1,656,000 | 1,569,000 |
Allowance for loan losses | ' | ' |
Allowance for impaired loans | 201,000 | 262,000 |
Allowance for non-impaired loans | 1,455,000 | 1,307,000 |
Total allowance for loan losses | 1,656,000 | 1,569,000 |
Loans | ' | ' |
Impaired loans | 9,572,000 | 9,837,000 |
Non-impaired loans | 318,627,000 | 286,853,000 |
Total Loans | 328,199,000 | 296,690,000 |
Consumer | ' | ' |
Allowance for loan losses: | ' | ' |
Beginning balance | 20,000 | 15,000 |
Provisions (credit) for loan losses | -3,000 | 47,000 |
Loans charged-off | -15,000 | -58,000 |
Recoveries | 16,000 | 16,000 |
Ending balance | 18,000 | 20,000 |
Allowance for loan losses | ' | ' |
Allowance for impaired loans | 7,000 | 7,000 |
Allowance for non-impaired loans | 11,000 | 13,000 |
Total allowance for loan losses | 18,000 | 20,000 |
Loans | ' | ' |
Impaired loans | 33,000 | 30,000 |
Non-impaired loans | 1,639,000 | 2,290,000 |
Total Loans | 1,672,000 | 2,320,000 |
Residential 1-4 family | ' | ' |
Allowance for loan losses: | ' | ' |
Beginning balance | 393,000 | 531,000 |
Provisions (credit) for loan losses | 148,000 | 7,000 |
Loans charged-off | -94,000 | -154,000 |
Recoveries | 15,000 | 9,000 |
Ending balance | 462,000 | 393,000 |
Allowance for loan losses | ' | ' |
Allowance for impaired loans | 94,000 | 104,000 |
Allowance for non-impaired loans | 368,000 | 289,000 |
Total allowance for loan losses | 462,000 | 393,000 |
Loans | ' | ' |
Impaired loans | 6,499,000 | 6,727,000 |
Non-impaired loans | 91,681,000 | 71,906,000 |
Total Loans | 98,180,000 | 78,633,000 |
Home Equity | ' | ' |
Allowance for loan losses: | ' | ' |
Beginning balance | 674,000 | 501,000 |
Provisions (credit) for loan losses | 343,000 | 872,000 |
Loans charged-off | -424,000 | -707,000 |
Recoveries | 12,000 | 8,000 |
Ending balance | 605,000 | 674,000 |
Allowance for loan losses | ' | ' |
Allowance for impaired loans | 66,000 | 132,000 |
Allowance for non-impaired loans | 539,000 | 542,000 |
Total allowance for loan losses | 605,000 | 674,000 |
Loans | ' | ' |
Impaired loans | 359,000 | 1,006,000 |
Non-impaired loans | 82,975,000 | 82,148,000 |
Total Loans | 83,334,000 | 83,154,000 |
Commercial Real Estate | ' | ' |
Allowance for loan losses: | ' | ' |
Beginning balance | 261,000 | 214,000 |
Provisions (credit) for loan losses | 60,000 | 47,000 |
Ending balance | 321,000 | 261,000 |
Allowance for loan losses | ' | ' |
Allowance for non-impaired loans | 321,000 | 261,000 |
Total allowance for loan losses | 321,000 | 261,000 |
Loans | ' | ' |
Non-impaired loans | 91,609,000 | 81,754,000 |
Total Loans | 91,609,000 | 81,754,000 |
Commercial Business | ' | ' |
Allowance for loan losses: | ' | ' |
Beginning balance | 25,000 | 13,000 |
Provisions (credit) for loan losses | 4,000 | 12,000 |
Ending balance | 29,000 | 25,000 |
Allowance for loan losses | ' | ' |
Allowance for non-impaired loans | 29,000 | 25,000 |
Total allowance for loan losses | 29,000 | 25,000 |
Loans | ' | ' |
Non-impaired loans | 8,301,000 | 7,899,000 |
Total Loans | 8,301,000 | 7,899,000 |
Commercial Construction | ' | ' |
Allowance for loan losses: | ' | ' |
Beginning balance | 11,000 | 1,000 |
Provisions (credit) for loan losses | 13,000 | 10,000 |
Ending balance | 24,000 | 11,000 |
Allowance for loan losses | ' | ' |
Allowance for non-impaired loans | 24,000 | 11,000 |
Total allowance for loan losses | 24,000 | 11,000 |
Loans | ' | ' |
Non-impaired loans | 7,099,000 | 3,302,000 |
Total Loans | 7,099,000 | 3,302,000 |
SBA | ' | ' |
Allowance for loan losses: | ' | ' |
Beginning balance | 185,000 | 149,000 |
Provisions (credit) for loan losses | 2,000 | 114,000 |
Loans charged-off | -33,000 | -117,000 |
Recoveries | 43,000 | 39,000 |
Ending balance | 197,000 | 185,000 |
Allowance for loan losses | ' | ' |
Allowance for impaired loans | 34,000 | 19,000 |
Allowance for non-impaired loans | 163,000 | 166,000 |
Total allowance for loan losses | 197,000 | 185,000 |
Loans | ' | ' |
Impaired loans | 2,681,000 | 2,074,000 |
Non-impaired loans | 35,323,000 | 37,554,000 |
Total Loans | 38,004,000 | 39,628,000 |
Guaranteed portions of impaired loans | $2,300,000 | $1,800,000 |
LOANS_Details_3
LOANS (Details 3) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2009 | |
LOANS | ' | ' | ' | ' |
Period of historical loss experience | '10 years | ' | '10 years | ' |
Major charge-off activity period | '3 years | ' | ' | ' |
General allowance for loan losses | ' | ' | ' | ' |
Total General Allowance | $1,455,000 | $1,307,000 | ' | ' |
Total general qualitative allowance factor (as a percent) | 100.00% | 100.00% | ' | ' |
Home equity loans and lines of credit | ' | ' | ' | ' |
General allowance for loan losses | ' | ' | ' | ' |
Total General Allowance | 539,000 | 542,000 | ' | ' |
Total charge-off | ' | 250,000 | ' | ' |
One-to four-family residential real estate loans | ' | ' | ' | ' |
General allowance for loan losses | ' | ' | ' | ' |
Total General Allowance | 368,000 | 289,000 | ' | ' |
Total charge-off | ' | ' | 479,000 | ' |
Net charge-offs | 79,000 | 145,000 | ' | ' |
Decrease in allowance (as a percent) | 0.01% | ' | ' | 0.32% |
General Allowance 10 Year Loss History | ' | ' | ' | ' |
General allowance for loan losses | ' | ' | ' | ' |
Total General Allowance | 592,000 | 508,000 | ' | ' |
Total general qualitative allowance factor (as a percent) | 41.00% | 39.00% | ' | ' |
General Allowance 10 Year Loss History | Home equity loans and lines of credit | ' | ' | ' | ' |
General allowance for loan losses | ' | ' | ' | ' |
Increase in ten year historical loss factor allowance (as a percent) | 0.05% | ' | ' | ' |
General Allowance 10 Year Loss History | One-to four-family residential real estate loans | ' | ' | ' | ' |
General allowance for loan losses | ' | ' | ' | ' |
Total general qualitative allowance factor (as a percent) | ' | ' | 0.14% | ' |
Increase in ten year historical loss factor allowance (as a percent) | ' | 0.02% | ' | ' |
Qualitative Factors | ' | ' | ' | ' |
General allowance for loan losses | ' | ' | ' | ' |
Total General Allowance | 863,000 | 799,000 | ' | ' |
Total general qualitative allowance factor (as a percent) | 59.00% | 61.00% | ' | ' |
Qualitative Factors | Home equity loans and lines of credit | ' | ' | ' | ' |
General allowance for loan losses | ' | ' | ' | ' |
Total general qualitative allowance factor (as a percent) | 0.38% | 0.44% | 0.27% | ' |
Increase in allowance (as a percent) | ' | 0.17% | ' | ' |
Decrease in qualitative allowance (as a percent) | 0.06% | ' | ' | ' |
Decrease in real estate market factor (as a percent) | 0.01% | ' | ' | ' |
Qualitative Factors | One-to four-family residential real estate loans | ' | ' | ' | ' |
General allowance for loan losses | ' | ' | ' | ' |
Total general qualitative allowance factor (as a percent) | 0.23% | 0.24% | 0.49% | ' |
Decrease in allowance (as a percent) | ' | 0.25% | ' | ' |
Three year loss experience | Home equity loans and lines of credit | ' | ' | ' | ' |
General allowance for loan losses | ' | ' | ' | ' |
Increase in allowance (as a percent) | ' | 0.17% | ' | ' |
Three year loss experience | One-to four-family residential real estate loans | ' | ' | ' | ' |
General allowance for loan losses | ' | ' | ' | ' |
Total charge-off | ' | ' | $820,000 | ' |
Increase in allowance (as a percent) | ' | ' | 0.14% | ' |
LOANS_Details_4
LOANS (Details 4) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Past due and non-accrual loans | ' | ' |
30-59 Days Past Due | $2,369 | $2,149 |
60-89 Days Past Due | 1,654 | 800 |
90 Days or More Past Due | 2,065 | 3,786 |
Total Past Due | 6,088 | 6,735 |
Loans on Non-accrual | 6,459 | 7,661 |
Consumer | ' | ' |
Past due and non-accrual loans | ' | ' |
30-59 Days Past Due | 19 | 42 |
Total Past Due | 19 | 42 |
Loans on Non-accrual | 3 | 13 |
Residential 1-4 family | ' | ' |
Past due and non-accrual loans | ' | ' |
30-59 Days Past Due | 925 | 1,721 |
60-89 Days Past Due | 1,573 | 717 |
90 Days or More Past Due | 1,035 | 2,652 |
Total Past Due | 3,533 | 5,090 |
Loans on Non-accrual | 4,790 | 5,773 |
Home equity loans and lines of credit | ' | ' |
Past due and non-accrual loans | ' | ' |
30-59 Days Past Due | 294 | 25 |
60-89 Days Past Due | ' | 83 |
90 Days or More Past Due | 53 | 640 |
Total Past Due | 347 | 748 |
Loans on Non-accrual | 158 | 804 |
SBA | ' | ' |
Past due and non-accrual loans | ' | ' |
30-59 Days Past Due | 1,131 | 361 |
60-89 Days Past Due | 81 | ' |
90 Days or More Past Due | 977 | 494 |
Total Past Due | 2,189 | 855 |
Loans on Non-accrual | $1,508 | $1,071 |
LOANS_Details_5
LOANS (Details 5) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Recorded Investment | ' | ' |
With no related allowance recorded | $5,569 | $5,202 |
With an allowance recorded | 4,002 | 4,635 |
Unpaid Principal Balance | ' | ' |
With no related allowance recorded | 5,981 | 5,570 |
With an allowance recorded | 4,014 | 4,635 |
Related Allowance | ' | ' |
With an allowance recorded | 201 | 262 |
Average Recorded Investment | 9,733 | 9,086 |
Interest income recognized | 348 | 338 |
Interest Income Recognized on Cash Basis | 187 | 183 |
Additional funds committed to be advanced for impaired loans | 0 | 0 |
Consumer | ' | ' |
Recorded Investment | ' | ' |
With no related allowance recorded | 12 | ' |
With an allowance recorded | 20 | 30 |
Unpaid Principal Balance | ' | ' |
With no related allowance recorded | 12 | ' |
With an allowance recorded | 20 | 30 |
Related Allowance | ' | ' |
With an allowance recorded | 7 | 7 |
Average Recorded Investment | 38 | 46 |
Interest income recognized | 2 | ' |
Interest Income Recognized on Cash Basis | 1 | ' |
Residential 1-4 family | ' | ' |
Recorded Investment | ' | ' |
With no related allowance recorded | 3,689 | 3,256 |
With an allowance recorded | 2,810 | 3,471 |
Unpaid Principal Balance | ' | ' |
With no related allowance recorded | 3,850 | 3,330 |
With an allowance recorded | 2,810 | 3,471 |
Related Allowance | ' | ' |
With an allowance recorded | 94 | 104 |
Average Recorded Investment | 6,752 | 6,053 |
Interest income recognized | 229 | 209 |
Interest Income Recognized on Cash Basis | 141 | 120 |
Home equity loans and lines of credit | ' | ' |
Recorded Investment | ' | ' |
With no related allowance recorded | 104 | 322 |
With an allowance recorded | 255 | 684 |
Unpaid Principal Balance | ' | ' |
With no related allowance recorded | 281 | 490 |
With an allowance recorded | 267 | 684 |
Related Allowance | ' | ' |
With an allowance recorded | 66 | 132 |
Average Recorded Investment | 623 | 848 |
Interest income recognized | 36 | 25 |
Interest Income Recognized on Cash Basis | 26 | 18 |
Commercial business | ' | ' |
Related Allowance | ' | ' |
Average Recorded Investment | 23 | ' |
SBA | ' | ' |
Recorded Investment | ' | ' |
With no related allowance recorded | 1,764 | 1,624 |
With an allowance recorded | 917 | 450 |
Unpaid Principal Balance | ' | ' |
With no related allowance recorded | 1,838 | 1,750 |
With an allowance recorded | 917 | 450 |
Related Allowance | ' | ' |
With an allowance recorded | 34 | 19 |
Average Recorded Investment | 2,297 | 2,139 |
Interest income recognized | 81 | 104 |
Interest Income Recognized on Cash Basis | $19 | $45 |
LOANS_Details_6
LOANS (Details 6) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
item | item | |
Troubled debt restructurings | ' | ' |
Period of performance of non-accrual loans after which loan qualify for accruing status | '6 months | ' |
Performing | ' | ' |
Troubled debt restructurings | ' | ' |
Number of Contracts | 9 | 8 |
Total troubled debt restructured loans | $897,000 | $2,500,000 |
Residential 1-4 family | ' | ' |
Troubled debt restructurings | ' | ' |
Number of Contracts | 9 | 12 |
Pre-Modification Outstanding Recorded Investment | 2,229,000 | 3,409,000 |
Post-Modification Outstanding Recorded Investment | 2,229,000 | 3,409,000 |
Troubled debt restructurings that subsequently defaulted within 12 months of restructuring | ' | ' |
Number of Contracts | 7 | 1 |
Recorded Investment | 2,313,000 | 310,000 |
Home equity loans and lines of credit | ' | ' |
Troubled debt restructurings | ' | ' |
Number of Contracts | 3 | 3 |
Pre-Modification Outstanding Recorded Investment | 225,000 | 228,000 |
Post-Modification Outstanding Recorded Investment | 225,000 | 228,000 |
Troubled debt restructurings that subsequently defaulted within 12 months of restructuring | ' | ' |
Number of Contracts | 3 | ' |
Recorded Investment | 225,000 | ' |
SBA | ' | ' |
Troubled debt restructurings | ' | ' |
Number of Contracts | 3 | 2 |
Pre-Modification Outstanding Recorded Investment | 307,000 | 257,000 |
Post-Modification Outstanding Recorded Investment | 307,000 | 257,000 |
Troubled debt restructurings that subsequently defaulted within 12 months of restructuring | ' | ' |
Number of Contracts | 1 | 1 |
Recorded Investment | 44,000 | 161,000 |
Consumer | ' | ' |
Troubled debt restructurings | ' | ' |
Number of Contracts | 2 | 2 |
Pre-Modification Outstanding Recorded Investment | 13,000 | 31,000 |
Post-Modification Outstanding Recorded Investment | $13,000 | $31,000 |
LOANS_Details_7
LOANS (Details 7) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Credit Quality Indicators | ' | ' |
Total loans | $328,199 | $296,690 |
Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 145,013 | 132,583 |
Commercial Real Estate | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 91,609 | 81,754 |
Commercial Business | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 8,301 | 7,899 |
Commercial Construction | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 7,099 | 3,302 |
SBA | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 38,004 | 39,628 |
Loans rated 1 -5 | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 133,125 | 120,075 |
Loans rated 1 -5 | Commercial Real Estate | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 88,578 | 80,138 |
Loans rated 1 -5 | Commercial Business | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 7,898 | 7,234 |
Loans rated 1 -5 | Commercial Construction | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 5,926 | 3,302 |
Loans rated 1 -5 | SBA | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 30,723 | 29,401 |
Loans rated 5.5 | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 5,519 | 5,996 |
Loans rated 5.5 | Commercial Real Estate | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 2,858 | 1,616 |
Loans rated 5.5 | Commercial Business | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 168 | 176 |
Loans rated 5.5 | SBA | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 2,493 | 4,204 |
Loans rated 6 | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 1,007 | 1,257 |
Loans rated 6 | SBA | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 1,007 | 1,257 |
Loans rated 7 | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 5,203 | 5,255 |
Loans rated 7 | Commercial Real Estate | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 173 | ' |
Loans rated 7 | Commercial Business | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 235 | 489 |
Loans rated 7 | Commercial Construction | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 1,173 | ' |
Loans rated 7 | SBA | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 3,622 | 4,766 |
Loans rated 8 | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | 159 | ' |
Loans rated 8 | SBA | Commercial loans | ' | ' |
Credit Quality Indicators | ' | ' |
Total loans | $159 | ' |
LOAN_SERVICING1
LOAN SERVICING (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Commercial loan | ' | ' |
Loan Servicing | ' | ' |
Aggregate amount of loans transferred to a participating lender and serviced by the company | $7.70 | $5.40 |
SBA loan | ' | ' |
Loan Servicing | ' | ' |
Aggregate amount of loans transferred to a participating lender and serviced by the company | $20.20 | $19.40 |
PREMISES_AND_EQUIPMENT_Details
PREMISES AND EQUIPMENT (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Premises and Equipment | ' | ' |
Premises and equipment, gross | $32,336,000 | $31,833,000 |
Less accumulated depreciation and amortization | -6,752,000 | -6,914,000 |
Premises and equipment, net | 25,584,000 | 24,919,000 |
Depreciation and amortization expense | 959,000 | 798,000 |
Land | ' | ' |
Premises and Equipment | ' | ' |
Premises and equipment, gross | 7,604,000 | 8,729,000 |
Buildings and improvements | ' | ' |
Premises and Equipment | ' | ' |
Premises and equipment, gross | 18,018,000 | 16,086,000 |
Furniture, fixtures and equipment | ' | ' |
Premises and Equipment | ' | ' |
Premises and equipment, gross | 5,204,000 | 5,079,000 |
Leasehold improvements | ' | ' |
Premises and Equipment | ' | ' |
Premises and equipment, gross | 111,000 | 387,000 |
Fixed assets in process | ' | ' |
Premises and Equipment | ' | ' |
Premises and equipment, gross | 1,399,000 | 1,552,000 |
Commitments outstanding | $0 | $1,100,000 |
PREMISES_AND_EQUIPMENT_Details1
PREMISES AND EQUIPMENT (Details 2) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
item | ||
Future minimum lease commitments | ' | ' |
2014 | $136,000 | ' |
2015 | 136,000 | ' |
2016 | 131,000 | ' |
2017 | 125,000 | ' |
2018 | 125,000 | ' |
Thereafter | 1,792,000 | ' |
Total | 2,445,000 | ' |
Premises and equipment | ' | ' |
Renewal term | '5 years | ' |
Number of options available for lease extensions | 4 | ' |
Rent expense | $186,000 | $97,000 |
DEPOSITS_Details
DEPOSITS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
DEPOSITS | ' | ' |
Non-interest-bearing demand deposit accounts | $63,751 | $57,608 |
Savings accounts and interest-bearing DDA | 79,931 | 77,042 |
Money market accounts | 59,210 | 51,570 |
Club accounts | 1,614 | 1,197 |
Total non-certificate accounts | 204,506 | 187,417 |
Term certificates $100,000 or greater | 49,980 | 42,999 |
Term certificates less than $100,000 | 75,430 | 77,377 |
Total certificate accounts | 125,410 | 120,376 |
Total deposits | 329,916 | 307,793 |
Amount | ' | ' |
Within 1 year | 43,868 | 46,376 |
Within 2 years | 30,228 | 15,185 |
Within 3 years | 22,841 | 24,130 |
Within 4 years | 14,835 | 20,158 |
Within 5 years | 13,638 | 14,527 |
Total certificate accounts | $125,410 | $120,376 |
Weighted Average Rate | ' | ' |
Within 1 year | 0.89% | 1.07% |
Within 2 years | 2.28% | 1.60% |
Within 3 years | 2.37% | 2.75% |
Within 4 years | 1.80% | 2.58% |
Within 5 years | 1.57% | 1.84% |
Total | 1.68% | 1.82% |
BORROWED_FUNDS_Details
BORROWED FUNDS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
BORROWED FUNDS. | ' | ' |
FHLB advances with original maturity of less than one year | $26,000,000 | $13,000,000 |
Weighted average rate (as a percent) | 0.28% | 0.31% |
Long-term FHLB advances, Amount | ' | ' |
Total FHLB advances | 2,000,000 | 3,343,000 |
Long-term FHLB advances, Weighted Average Rate | ' | ' |
Total FHLB advances (as a percent) | 3.97% | 3.81% |
Federal Reserve Bank of Boston | Discount window | ' | ' |
Additional disclosures | ' | ' |
Maximum borrowing limit | 15,000,000 | 15,000,000 |
Outstanding amount | 0 | 0 |
Lines of credit | ' | ' |
Additional disclosures | ' | ' |
Maximum borrowing capacity | 6,000,000 | 6,000,000 |
Outstanding amount | 0 | 0 |
Secured blanket lien on qualified collateral (as a percent) | 75.00% | ' |
Non-amortizing advances | ' | ' |
Long-term FHLB advances, Amount | ' | ' |
Year one | 700,000 | 1,300,000 |
Year two | 1,300,000 | 700,000 |
Year three | ' | 1,300,000 |
Long-term FHLB advances, Weighted Average Rate | ' | ' |
Year one (as a percent) | 3.84% | 3.59% |
Year two (as a percent) | 4.04% | 3.84% |
Year three (as a percent) | ' | 4.04% |
Amortizing advances maturing in 2013 | ' | ' |
Long-term FHLB advances, Amount | ' | ' |
Total FHLB advances | ' | $43,000 |
Long-term FHLB advances, Weighted Average Rate | ' | ' |
Total FHLB advances (as a percent) | ' | 3.07% |
EMPLOYEE_BENEFITS_Details
EMPLOYEE BENEFITS (Details) (Defined Benefit Plan, USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Defined Benefit Plan | ' | ' |
Employee benefits | ' | ' |
Number of years of employees' compensation prior to the Plan's curtailment on which benefits were based | '5 years | ' |
Change in benefit obligation: | ' | ' |
Benefit obligation at beginning of year | $1,974,000 | $1,834,000 |
Interest cost | 79,000 | 80,000 |
Actuarial (gain) loss | -215,000 | 105,000 |
Benefits paid | -32,000 | -45,000 |
Projected benefit obligation at end of year | 1,806,000 | 1,974,000 |
Change in plan assets: | ' | ' |
Fair value of plan assets at beginning of year | 1,558,000 | 1,332,000 |
Actual return on plan assets | 271,000 | 182,000 |
Employer contribution | 71,000 | 89,000 |
Benefits paid | -32,000 | -45,000 |
Fair value of plan assets at end of year | 1,868,000 | 1,558,000 |
Unfunded status and (prepaid) accrued pension benefit at end of year | -62,000 | 416,000 |
Accumulated benefit obligation at end of year | 1,806,000 | 1,974,000 |
Discount rate used to determine the benefit obligation (as a percent) | 4.95% | 4.05% |
Components of net periodic pension cost | ' | ' |
Interest cost | 79,000 | 80,000 |
Expected return on plan assets | -110,000 | -95,000 |
Amortization of actuarial loss | 64,000 | 62,000 |
Net periodic pension cost | 33,000 | 47,000 |
Amount of actuarial loss included in accumulated other comprehensive loss expected to be recognized as a component of net periodic pension cost for the year ending December 31, 2014 | $18,000 | ' |
Assumptions used to determine net periodic pension cost | ' | ' |
Discount rate (as a percent) | 4.05% | 4.40% |
Expected return on plan assets (as a percent) | 7.00% | 7.00% |
EMPLOYEE_BENEFITS_Details_2
EMPLOYEE BENEFITS (Details 2) (Defined Benefit Plan, USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Employee benefits | ' | ' | ' | ' |
Fair value of pension plan assets | ' | $1,868,000 | $1,558,000 | $1,332,000 |
Expected contribution to the plan | 78,000 | ' | ' | ' |
Estimated future benefit payments | ' | ' | ' | ' |
2014 | ' | 30,000 | ' | ' |
2015 | ' | 42,000 | ' | ' |
2016 | ' | 48,000 | ' | ' |
2017 | ' | 100,000 | ' | ' |
2018 | ' | 251,000 | ' | ' |
Thereafter | ' | 640,000 | ' | ' |
Level 1 | ' | ' | ' | ' |
Employee benefits | ' | ' | ' | ' |
Fair value of pension plan assets | ' | 1,868,000 | 1,558,000 | ' |
Level 1 | Domestic mutual funds | ' | ' | ' | ' |
Employee benefits | ' | ' | ' | ' |
Fair value of pension plan assets | ' | 766,000 | 598,000 | ' |
Level 1 | Fixed income | ' | ' | ' | ' |
Employee benefits | ' | ' | ' | ' |
Fair value of pension plan assets | ' | 622,000 | 604,000 | ' |
Level 1 | International mutual funds | ' | ' | ' | ' |
Employee benefits | ' | ' | ' | ' |
Fair value of pension plan assets | ' | 319,000 | 247,000 | ' |
Level 1 | International exchange traded funds | ' | ' | ' | ' |
Employee benefits | ' | ' | ' | ' |
Fair value of pension plan assets | ' | 89,000 | 94,000 | ' |
Level 1 | Cash and cash equivalents | ' | ' | ' | ' |
Employee benefits | ' | ' | ' | ' |
Fair value of pension plan assets | ' | $72,000 | $15,000 | ' |
EMPLOYEE_BENEFITS_Details_3
EMPLOYEE BENEFITS (Details 3) (Deferred Compensation Supplemental Executive Retirement Plan, USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
item | |||
Deferred Compensation Supplemental Executive Retirement Plan | ' | ' | ' |
Initial amount contributed | ' | ' | $62,000 |
Annual contributions each January 1 thereafter until January 1, 2023, so long as the executive remains employed | ' | ' | 72,000 |
Number of approximately equal annual installments for payment of benefit | 10 | ' | ' |
Assets related to the Plan | 857,000 | 653,000 | ' |
Liability for benefit obligation reported in accrued expenses and other liabilities | 857,000 | 653,000 | ' |
Compensation expense | $72,000 | $72,000 | ' |
Senior executive | ' | ' | ' |
Deferred Compensation Supplemental Executive Retirement Plan | ' | ' | ' |
Age of individual when benefits shall be payable in equal annual installments | 67 | ' | ' |
Threshold age of individual on separation from service when vested portion of benefits shall be payable in lump sum | 67 | ' | ' |
Cumulative vesting percentage | ' | 60.00% | ' |
Additional vesting percentage as of each December 31 until 100% vesting | 5.00% | ' | ' |
Threshold vesting percentage | 100.00% | ' | ' |
EMPLOYEE_BENEFITS_Details_4
EMPLOYEE BENEFITS (Details 4) (401(k) Plan, USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
401(k) Plan | ' | ' |
Maximum percentage of total compensation that each qualified employee may contribute | 15.00% | ' |
Matching contribution by employer (as a percent) | 100.00% | ' |
Percentage of gross compensation contributed by employer as a discretionary contribution | 5.00% | ' |
Amount of contribution | $647,000 | $603,000 |
Maximum | ' | ' |
401(k) Plan | ' | ' |
Percentage of employee's contribution for which the employer makes a matching contribution | 5.00% | ' |
EMPLOYEE_BENEFITS_Details_5
EMPLOYEE BENEFITS (Details 5) (USD $) | 12 Months Ended | 0 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jun. 30, 2013 | |
SERP | SERP | |||
Executive officers | ||||
item | ||||
Incentive Compensation | ' | ' | ' | ' |
Incentive compensation expense | $208,000 | $186,000 | ' | ' |
Employee benefits | ' | ' | ' | ' |
Number of employees with whom the entity entered into agreements | ' | ' | ' | 6 |
Expense | ' | ' | $170,000 | ' |
OFFBALANCE_SHEET_ACTIVITIES_AN2
OFF-BALANCE SHEET ACTIVITIES AND DERIVATIVES (Details) (USD $) | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
item | item | ||
Loans Sold with Recourse Obligations | ' | ' | ' |
Number of first due payments default which would require the Bank to repurchase loans and/or refund premiums | ' | 4 | ' |
Premiums on loans sold that were subject to refund provisions | ' | $1,266,000 | $1,783,000 |
Recourse obligations | ' | 0 | ' |
Number of performing loans repurchased due to underwriting error | 2 | ' | ' |
Amount of repurchased performing loans due to an underwriting error | 426,000 | ' | ' |
Amount of premium refunded of repurchased performing loans | 16,900 | ' | ' |
Commitments to grant loans | ' | ' | ' |
Loan Commitments | ' | ' | ' |
Outstanding financial instruments whose contract amounts represent credit risk | ' | 12,858,000 | 9,945,000 |
Commitments to originate loans to be sold | ' | ' | ' |
Loan Commitments | ' | ' | ' |
Outstanding financial instruments whose contract amounts represent credit risk | ' | 7,150,000 | 11,317,000 |
Unfunded commitments under home equity lines of credit | ' | ' | ' |
Loan Commitments | ' | ' | ' |
Outstanding financial instruments whose contract amounts represent credit risk | ' | 46,456,000 | 47,245,000 |
Unfunded commitments under commercial lines of credit | ' | ' | ' |
Loan Commitments | ' | ' | ' |
Outstanding financial instruments whose contract amounts represent credit risk | ' | 11,315,000 | 8,972,000 |
Unfunded commitments under SBA lines of credit | ' | ' | ' |
Loan Commitments | ' | ' | ' |
Outstanding financial instruments whose contract amounts represent credit risk | ' | 3,601,000 | 2,351,000 |
Unadvanced funds on construction loans | ' | ' | ' |
Loan Commitments | ' | ' | ' |
Outstanding financial instruments whose contract amounts represent credit risk | ' | $3,812,000 | $2,045,000 |
OFFBALANCE_SHEET_ACTIVITIES_AN3
OFF-BALANCE SHEET ACTIVITIES AND DERIVATIVES (Details 2) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Forward loan sale commitments | ' | ' |
Fair values of derivative instruments in the balance sheet | ' | ' |
Commitments to sell loans | $15,700,000 | $24,700,000 |
Not Designated As Hedging Instruments | ' | ' |
Fair values of derivative instruments in the balance sheet | ' | ' |
Assets, Fair Value | 248,000 | 201,000 |
Liabilities, Fair Value | 4,000 | ' |
Not Designated As Hedging Instruments | Derivative loan commitments | Other assets | ' | ' |
Fair values of derivative instruments in the balance sheet | ' | ' |
Assets, Fair Value | ' | 154,000 |
Not Designated As Hedging Instruments | Derivative loan commitments | Other liabilities | ' | ' |
Fair values of derivative instruments in the balance sheet | ' | ' |
Liabilities, Fair Value | 4,000 | ' |
Not Designated As Hedging Instruments | Forward loan sale commitments | Other assets | ' | ' |
Fair values of derivative instruments in the balance sheet | ' | ' |
Assets, Fair Value | $248,000 | $47,000 |
OFFBALANCE_SHEET_ACTIVITIES_AN4
OFF-BALANCE SHEET ACTIVITIES AND DERIVATIVES (Details 3) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Executive Employment Agreement | ' | ' |
Period of continued benefits following termination of employment under executive employment agreement | '5 years | ' |
Not Designated As Hedging Instruments | ' | ' |
Gains and losses on derivative instruments | ' | ' |
Gains (losses) on derivative instruments | ($181) | $72 |
Not Designated As Hedging Instruments | Derivative loan commitments | Gain on sales of loans, net | ' | ' |
Gains and losses on derivative instruments | ' | ' |
Gains (losses) on derivative instruments | -382 | 281 |
Not Designated As Hedging Instruments | Forward loan sale commitments | Gain on sales of loans, net | ' | ' |
Gains and losses on derivative instruments | ' | ' |
Gains (losses) on derivative instruments | $201 | ($209) |
OFFBALANCE_SHEET_ACTIVITIES_AN5
OFF-BALANCE SHEET ACTIVITIES AND DERIVATIVES (Details 4) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2013 | Dec. 31, 2013 |
New corporate headquarters currently under construction | Current headquarters | |||
Premises and Equipment | ' | ' | ' | ' |
Purchase price | ' | ' | $8,800,000 | ' |
Carrying value | $25,584,000 | $24,919,000 | ' | $3,400,000 |
OFFBALANCE_SHEET_ACTIVITIES_AN6
OFF-BALANCE SHEET ACTIVITIES AND DERIVATIVES (Details 5) (Loan application management services contract, USD $) | 1 Months Ended |
Oct. 31, 2013 | |
Loan application management services contract | ' |
Legal and Other Loss Contingencies | ' |
Claim amount | $178,000 |
LOANS_TO_RELATED_PARTIES_Detai
LOANS TO RELATED PARTIES (Details) (USD $) | 12 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Jan. 30, 2013 | |
Directors, executive officers and their associates | Directors, executive officers and their associates | Officers and directors | Officers and directors | Officer | |
Minimum | |||||
Loans to related parties | ' | ' | ' | ' | ' |
Balance at beginning of year | $2,096,000 | $2,624,000 | ' | ' | ' |
Principal additions | 140,000 | 166,000 | ' | ' | ' |
Principal payments | -962,000 | -694,000 | ' | ' | ' |
Balance at end of year | 1,274,000 | 2,096,000 | ' | ' | ' |
Additional disclosure | ' | ' | ' | ' | ' |
Percentage of reduction in interest rates on loans originated in accordance with the Bank's Employee Loan Discount Program (as a percent) | ' | ' | 1.00% | ' | ' |
Floor rate (as a percent) | ' | ' | ' | 4.00% | ' |
Unsecured residential loan | ' | ' | ' | ' | $482,000 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Current tax expense: | ' | ' |
Federal | $606 | $208 |
State | 207 | 101 |
Total | 813 | 309 |
Deferred tax expense (benefit): | ' | ' |
Federal | -477 | 437 |
State | -169 | 89 |
Change in valuation allowance | 20 | ' |
Total | -626 | 526 |
Total income tax expense | 187 | 835 |
Differences between the statutory federal income tax expense and the actual tax expense | ' | ' |
Statutory tax rate (as a percent) | 34.00% | 34.00% |
Statutory tax expense at 34% | 139 | 674 |
Increase (decrease) resulting from: | ' | ' |
State taxes, net of federal tax benefit | 25 | 118 |
Change in valuation allowance | 20 | ' |
Other, net | 3 | 43 |
Total income tax expense | $187 | $835 |
INCOME_TAXES_Details_2
INCOME TAXES (Details 2) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Deferred tax assets: | ' | ' |
Allowance for loan losses | $661 | $628 |
Employee benefits | 499 | 302 |
Non-accrual income | 68 | 43 |
Defined benefit pension plan | 130 | 248 |
Charitable contribution carryforwards | 35 | 43 |
Organization costs | 140 | ' |
Total deferred tax assets | 1,533 | 1,264 |
Valuation allowance | -20 | ' |
Total deferred tax asset, net of valuation allowance | 1,513 | 1,264 |
Deferred tax liabilities: | ' | ' |
Premises and equipment, net | -150 | -368 |
Net deferred loan costs | -842 | -750 |
Other, net | -81 | -214 |
Total deferred tax liabilities | -1,073 | -1,332 |
Deferred tax asset (liability), net | 440 | -68 |
Change in deferred taxes | ' | ' |
Balance at beginning of year | -68 | 476 |
Deferred tax (expense) / benefit | 646 | -526 |
Change in valuation allowance | 20 | ' |
Unrealized gain/loss pertaining to defined benefit pension plan | -118 | -18 |
Balance at end of year | $440 | ($68) |
MINIMUM_REGULATORY_CAPITAL_REQ2
MINIMUM REGULATORY CAPITAL REQUIREMENTS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jan. 14, 2014 |
In Millions, unless otherwise specified | Bank | Bank | ||
Plan of Conversion and Reorganization | ||||
Minimum Regulatory Capital Requirements | ' | ' | ' | ' |
Total capital to risk weighted assets (as a percent) | 9.80% | 10.70% | 9.80% | ' |
Minimum ratio to be well capitalized (as a percent) | 10.00% | 10.00% | 10.00% | ' |
Net proceeds received upon completion of Conversion | ' | ' | ' | $23.20 |
MINIMUM_REGULATORY_CAPITAL_REQ3
MINIMUM REGULATORY CAPITAL REQUIREMENTS (Details 2) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Total capital (to risk weighted assets) | ' | ' |
Actual Amount | $29,667 | $29,341 |
Actual Ratio (as a percent) | 9.80% | 10.70% |
Minimum Capital Requirements Amount | 24,201 | 21,923 |
Minimum Capital Requirements Ratio (as a percent) | 8.00% | 8.00% |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | 30,252 | 27,404 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 10.00% | 10.00% |
Tier 1 capital (to risk weighted assets) | ' | ' |
Actual Amount | 28,011 | 27,772 |
Actual Ratio (as a percent) | 9.30% | 10.10% |
Minimum Capital Requirements Amount | 12,101 | 10,962 |
Minimum Capital Requirements Ratio (as a percent) | 4.00% | 4.00% |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | 18,151 | 16,442 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 6.00% | 6.00% |
Tier 1 capital (to average assets) | ' | ' |
Actual Amount | 28,011 | 27,772 |
Actual Ratio (as a percent) | 7.20% | 8.10% |
Minimum Capital Requirements Amount | 15,482 | 13,770 |
Minimum Capital Requirements Ratio (as a percent) | 4.00% | 4.00% |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions Amount | $19,353 | $17,213 |
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent) | 5.00% | 5.00% |
Period of operation for which minimum capital requirement to be fulfilled per order of the FDIC | '3 years | ' |
FAIR_VALUES_OF_ASSETS_AND_LIAB2
FAIR VALUES OF ASSETS AND LIABILITIES (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
FAIR VALUES OF ASSETS AND LIABILITIES | ' | ' |
Assets measured at fair value on a recurring basis other than mortgage derivatives | 0 | 0 |
Liabilities measured at fair value on a recurring basis other than mortgage derivatives | 0 | 0 |
Recurring | Level 3 Inputs | Derivative loan commitments | ' | ' |
Significant unobservable inputs used in the non-recurring fair value measurements | ' | ' |
Fair Value, Assets | -4 | 154 |
Recurring | Level 3 Inputs | Derivative loan commitments | Investor pricing | Minimum | ' | ' |
Significant unobservable inputs used in the non-recurring fair value measurements | ' | ' |
Pull-through rate (as a percent) | 82.50% | 82.50% |
Pricing spreads (as a percent) | 95.28% | 101.71% |
Recurring | Level 3 Inputs | Derivative loan commitments | Investor pricing | Maximum | ' | ' |
Significant unobservable inputs used in the non-recurring fair value measurements | ' | ' |
Pull-through rate (as a percent) | 100.00% | 100.00% |
Pricing spreads (as a percent) | 106.16% | 106.13% |
Recurring | Level 3 Inputs | Forward loan sale commitments | ' | ' |
Significant unobservable inputs used in the non-recurring fair value measurements | ' | ' |
Fair Value, Assets | 248 | 47 |
Fair Value, Liabilities | 0 | ' |
Recurring | Level 3 Inputs | Forward loan sale commitments | Investor pricing | Minimum | ' | ' |
Significant unobservable inputs used in the non-recurring fair value measurements | ' | ' |
Pricing spreads (as a percent) | 94.55% | 101.61% |
Recurring | Level 3 Inputs | Forward loan sale commitments | Investor pricing | Maximum | ' | ' |
Significant unobservable inputs used in the non-recurring fair value measurements | ' | ' |
Pricing spreads (as a percent) | 106.16% | 106.17% |
FAIR_VALUES_OF_ASSETS_AND_LIAB3
FAIR VALUES OF ASSETS AND LIABILITIES (Details 2) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
FAIR VALUES OF ASSETS AND LIABILITIES | ' | ' |
Transfer of Level 3 assets and liabilities measured on recurring basis | $0 | ' |
Derivative Loan Commitments and Forward Loan Sale Commitments, change in Level 3 assets and liabilities that are measured on a recurring basis | ' | ' |
Balance at the beginning of the period | 201 | 357 |
Total realized and unrealized gains (losses) included in net income | -181 | 72 |
Settlements and closed loans | 224 | -228 |
Balance at the end of the period | 244 | 201 |
Derivative Loan Commitments and Forward Loan Sale Commitments, total unrealized gains (losses) relating to instruments still held at period end | ($181) | $72 |
FAIR_VALUES_OF_ASSETS_AND_LIAB4
FAIR VALUES OF ASSETS AND LIABILITIES (Details 3) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Assets Measured at Fair Value on a Non-recurring Basis | ' | ' |
Foreclosed real estate | $1,580,000 | $2,594,000 |
Real estate held for sale | 3,515,000 | ' |
Total Losses, Real estate held for sale | 482,000 | ' |
Non-recurring | ' | ' |
Assets Measured at Fair Value on a Non-recurring Basis | ' | ' |
Total Losses, Foreclosed real estate | 180,000 | 402,000 |
Total Losses, Impaired loans | 280,000 | 320,000 |
Total Losses, Real estate held for sale | 482,000 | ' |
Total Losses | 942,000 | 722,000 |
Liabilities measured at fair value | 0 | 0 |
Non-recurring | Level 3 | ' | ' |
Assets Measured at Fair Value on a Non-recurring Basis | ' | ' |
Foreclosed real estate | 1,170,000 | 2,594,000 |
Impaired loans | 987,000 | 2,254,000 |
Real estate held for sale | 3,515,000 | ' |
Total | $5,672,000 | $4,848,000 |
FAIR_VALUES_OF_ASSETS_AND_LIAB5
FAIR VALUES OF ASSETS AND LIABILITIES (Details 4) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Significant unobservable inputs used in the non-recurring fair value measurements | ' | ' |
Fair value, Real estate held for sale | 3,515 | ' |
Non-recurring | Level 3 Inputs | ' | ' |
Significant unobservable inputs used in the non-recurring fair value measurements | ' | ' |
Fair value, Impaired loans | 987 | 2,254 |
Fair value, Real estate held for sale | 3,515 | ' |
Non-recurring | Level 3 Inputs | Foreclosed real estate | Discounted appraisals | ' | ' |
Significant unobservable inputs used in the non-recurring fair value measurements | ' | ' |
Fair value, Foreclosed real estate | 1,170 | 2,594 |
Non-recurring | Level 3 Inputs | Foreclosed real estate | Discounted appraisals | Minimum | ' | ' |
Significant unobservable inputs used in the non-recurring fair value measurements | ' | ' |
Collateral discounts/selling costs (as a percent) | 5.00% | 5.00% |
Non-recurring | Level 3 Inputs | Foreclosed real estate | Discounted appraisals | Maximum | ' | ' |
Significant unobservable inputs used in the non-recurring fair value measurements | ' | ' |
Collateral discounts/selling costs (as a percent) | 30.00% | 30.00% |
Non-recurring | Level 3 Inputs | Impaired loans | Discounted appraisals | ' | ' |
Significant unobservable inputs used in the non-recurring fair value measurements | ' | ' |
Fair value, Impaired loans | 987 | 2,254 |
Non-recurring | Level 3 Inputs | Impaired loans | Discounted appraisals | Minimum | ' | ' |
Significant unobservable inputs used in the non-recurring fair value measurements | ' | ' |
Collateral discounts/selling costs (as a percent) | 5.00% | 5.00% |
Non-recurring | Level 3 Inputs | Impaired loans | Discounted appraisals | Maximum | ' | ' |
Significant unobservable inputs used in the non-recurring fair value measurements | ' | ' |
Collateral discounts/selling costs (as a percent) | 30.00% | 30.00% |
Non-recurring | Level 3 Inputs | Real estate held for sale | Discounted appraisals | ' | ' |
Significant unobservable inputs used in the non-recurring fair value measurements | ' | ' |
Fair value, Real estate held for sale | 3,515 | ' |
Collateral discounts/selling costs (as a percent) | 5.00% | ' |
FAIR_VALUES_OF_ASSETS_AND_LIAB6
FAIR VALUES OF ASSETS AND LIABILITIES (Details 5) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Financial assets: | ' | ' |
Loans net of allowance for loan losses | $328,576 | $296,999 |
Financial liabilities: | ' | ' |
Certificates of deposit | 125,410 | 120,376 |
Borrowed funds | 28,000 | 16,343 |
Level 2 | ' | ' |
Financial liabilities: | ' | ' |
Certificates of deposit | 127,528 | 122,483 |
Borrowed funds | 28,021 | 16,452 |
Level 3 | ' | ' |
Financial assets: | ' | ' |
Loans, net of allowance for loan losses | 327,618 | 305,797 |
Loans held for sale | 8,690 | 13,870 |
FHLB stock | 2,694 | 3,036 |
Carrying Amount | ' | ' |
Financial assets: | ' | ' |
Loans net of allowance for loan losses | 328,576 | 296,999 |
Loans, held for sale | 8,648 | 13,642 |
FHLB stock | 2,694 | 3,036 |
Financial liabilities: | ' | ' |
Certificates of deposit | 125,410 | 120,376 |
Borrowed funds | 28,000 | 16,343 |
Estimated Fair Value | ' | ' |
Financial assets: | ' | ' |
Loans, net of allowance for loan losses | 327,618 | 305,797 |
Loans held for sale | 8,690 | 13,870 |
FHLB stock | 2,694 | 3,036 |
Financial liabilities: | ' | ' |
Certificates of deposit | 127,528 | 122,483 |
Borrowed funds | $28,021 | $16,452 |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (Subsequent event) | 12 Months Ended |
Dec. 31, 2013 | |
item | |
Subsequent event | ' |
Subsequent events | ' |
Number of times base salary plus highest bonus will be paid immediately prior to termination of participants | 2 |
Period considered for payment of highest bonus immediately prior to termination of participants in the Severance Plan | '2 years |