Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 01, 2017 | Jun. 30, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | Coastway Bancorp, Inc. | ||
Entity Central Index Key | 1,585,023 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
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 | $ 53.4 | ||
Entity Common Stock, Shares Outstanding | 4,408,341 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Cash and cash equivalents: | ||
Cash and due from banks | $ 2,946 | $ 3,041 |
Interest-earning deposits | 41,712 | 15,281 |
Total cash and cash equivalents | 44,658 | 18,322 |
Certificates of deposit | 0 | 6,074 |
Federal Home Loan Bank stock, at cost | 6,184 | 5,283 |
Loans, net of allowance for loan losses of $2,493 and $2,194, respectively | 525,215 | 467,023 |
Loans held for sale, at fair value | 23,157 | 18,952 |
Premises and equipment, net | 31,426 | 31,407 |
Accrued interest receivable | 1,598 | 1,414 |
Real estate held for sale | 3,305 | |
Foreclosed real estate | 422 | 710 |
Bank-owned life insurance | 4,452 | 4,326 |
Net deferred tax asset | 925 | 815 |
Other assets | 6,154 | 7,506 |
Total assets | 644,191 | 565,137 |
Deposits: | ||
Interest-bearing | 340,352 | 277,559 |
Non-interest-bearing | 106,962 | 95,960 |
Total deposits | 447,314 | 373,519 |
Borrowed funds | 121,250 | 115,500 |
Accrued expenses and other liabilities | 7,055 | 5,196 |
Total liabilities | 575,619 | 494,215 |
Commitments and contingencies (Notes 6 and 10) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value; 20,000,000 shares authorized, none issued or outstanding | ||
Common stock, $0.01 par value; 50,000,000 shares authorized; 4,403,096 and 4,822,279 issued and outstanding at December 31, 2016 and 2015 | 44 | 48 |
Additional paid-in capital | 40,107 | 46,094 |
Retained earnings | 32,186 | 28,697 |
Unearned compensation - Employee Stock Ownership Plan (ESOP) | (3,485) | (3,643) |
Accumulated other comprehensive loss | (280) | (274) |
Total stockholders' equity | 68,572 | 70,922 |
Total liabilities and stockholders' equity | $ 644,191 | $ 565,137 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Consolidated Balance Sheets | ||
Loans, allowance for loan losses | $ 2,493 | $ 2,194 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 4,403,096 | 4,822,279 |
Common stock, shares outstanding | 4,403,096 | 4,822,279 |
Consolidated Statements of Net
Consolidated Statements of Net Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Interest income: | ||
Interest and fees on loans | $ 20,886 | $ 17,640 |
Other interest income | 339 | 187 |
Total interest income | 21,225 | 17,827 |
Interest expense: | ||
Interest on deposits | 2,110 | 2,038 |
Interest on borrowed funds | 676 | 189 |
Total interest expense | 2,786 | 2,227 |
Net interest income | 18,439 | 15,600 |
Provision for loan losses | 475 | 496 |
Net interest income, after provision for loan losses | 17,964 | 15,104 |
Non-interest income: | ||
Customer service fees | 3,284 | 3,113 |
Net gain on sales of loans and other mortgage banking income | 4,339 | 3,258 |
Bank-owned life insurance income | 126 | 135 |
Other income | 196 | 86 |
Total non-interest income | 7,945 | 6,592 |
Non-interest expenses: | ||
Salary and employee benefits | 10,934 | 9,636 |
Occupancy and equipment | 3,092 | 3,085 |
Data processing | 1,764 | 1,699 |
Deposit servicing | 989 | 762 |
Professional fees | 753 | 692 |
FDIC insurance assessment | 350 | 374 |
Advertising | 314 | 270 |
Impairment loss on real estate held for sale | 581 | |
Foreclosed real estate | 121 | 211 |
Other general and administrative | 1,822 | 1,605 |
Total non-interest expenses | 20,139 | 18,915 |
Income before income taxes | 5,770 | 2,781 |
Income tax expense | 2,281 | 1,153 |
Net income | $ 3,489 | $ 1,628 |
Weighted average common shares outstanding - basic | 4,241 | 4,529 |
Weighted average common shares outstanding - diluted | 4,245 | 4,529 |
Per share information: | ||
Basic earnings per common share | $ 0.82 | $ 0.36 |
Diluted earnings per common share | $ 0.82 | $ 0.36 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Statements of Comprehensive Income | ||
Net income | $ 3,489 | $ 1,628 |
Defined benefit pension plan: | ||
Losses (gains) arising during the year | (61) | 52 |
Actuarial gain amortized through salary and employee expense | 51 | 58 |
Tax effect | 4 | (44) |
Net-of-tax amount | (6) | 66 |
Total comprehensive income | $ 3,483 | $ 1,694 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Unearned Compensation-ESOP | Accumulated Other Comprehensive Loss | Total |
Balance at Dec. 31, 2014 | $ 49 | $ 47,527 | $ 27,069 | $ (3,801) | $ (340) | $ 70,504 |
Balance (in shares) at Dec. 31, 2014 | 4,949,179 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Comprehensive income | 1,628 | 66 | 1,694 | |||
Common stock repurchased | $ (1) | (1,454) | (1,455) | |||
Common stock repurchased (in shares) | (126,900) | |||||
ESOP shares allocated (15,837 shares in 2015 and 15,837 shares in 2016) | 21 | 158 | 179 | |||
Balance at Dec. 31, 2015 | $ 48 | 46,094 | 28,697 | (3,643) | (274) | $ 70,922 |
Balance (in shares) at Dec. 31, 2015 | 4,822,279 | 4,822,279 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Comprehensive income | 3,489 | (6) | $ 3,483 | |||
Common stock repurchased | $ (4) | (6,161) | (6,165) | |||
Common stock repurchased (in shares) | (458,228) | |||||
Restricted stock granted | 39,045 | |||||
Stock-based compensation | 126 | 126 | ||||
ESOP shares allocated (15,837 shares in 2015 and 15,837 shares in 2016) | 48 | 158 | 206 | |||
Balance at Dec. 31, 2016 | $ 44 | $ 40,107 | $ 32,186 | $ (3,485) | $ (280) | $ 68,572 |
Balance (in shares) at Dec. 31, 2016 | 4,403,096 | 4,403,096 |
Consolidated Statements of Cha7
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Statements of Changes in Stockholders' Equity | ||
ESOP shares allocated (in shares) | 15,837 | 15,837 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 3,489 | $ 1,628 |
Adjustments to reconcile net income to net cash Provided by (used in) operating activities: | ||
Provision for loan losses | 475 | 496 |
Loans originated for sale | (219,069) | (171,486) |
Loans sold | 218,991 | 166,102 |
Gain on sale of mortgage loans, net | (4,127) | (2,573) |
Gain on sale of portfolio loans | (328) | |
Amortization of deferred loan costs | 1,076 | 818 |
Loss on foreclosed real estate | 96 | 126 |
Income from Bank-owned life insurance | (126) | (135) |
Loss on real estate held for sale | 11 | |
Impairment loss on real estate held for sale | 581 | |
Depreciation and amortization expense | 1,326 | 1,277 |
Deferred income tax (benefit) expense | (106) | 255 |
ESOP expense | 206 | 179 |
Stock-based compensation | 126 | |
Net change in: | ||
Accrued interest receivable | (184) | (161) |
Other, net | 3,201 | 327 |
Net cash provided by (used in) operating activities | 5,385 | (2,894) |
Cash flows from investing activities: | ||
Purchase of and increase in certificates of deposit | (25) | (3,058) |
Maturities of certificates of deposit | 6,099 | |
Proceeds from redemption of FHLB stock | 1,576 | |
Purchase of FHLB stock | (2,477) | (2,076) |
Loan originations, net of principal payments | (42,569) | (32,008) |
Purchase of loans from third party originations | (17,807) | (57,383) |
Proceeds from portfolio loans sold | 4,492 | |
Proceeds from the sale of real estate held for sale | 3,294 | |
Proceeds from sale of foreclosed real estate, net | 825 | 1,248 |
Purchases of premises and equipment, net | (1,345) | (801) |
Net cash used in investing activities | (52,429) | (89,586) |
Cash flows from financing activities: | ||
Net increase in deposits | 73,795 | 29,975 |
Net change in short-term borrowed funds | 4,000 | 69,000 |
Increase in long-term borrowed funds | 1,750 | |
Repayments of long-term borrowed funds | (1,300) | |
Repurchase of common stock | (6,165) | (1,455) |
Net cash provided by financing activities | 73,380 | 96,220 |
Net increase in cash and cash equivalents | 26,336 | 3,740 |
Cash and cash equivalents at beginning of period | 18,322 | 14,582 |
Cash and cash equivalents at end of period | 44,658 | 18,322 |
Supplemental cash flow information: | ||
Interest paid on deposits | 2,110 | 2,038 |
Interest paid on borrowed funds | 660 | 177 |
Income taxes paid | 2,500 | 596 |
Supplemental non-cash information: | ||
Loans transferred to foreclosed real estate | $ 633 | 799 |
Real estate transferred from premises and equipment to real estate held for investment | $ 55 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
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, Inc., a Maryland chartered stock corporation ("Company" or "Corporation"), was formed to serve as the holding company for Coastway Community Bank. Coastway Community 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 at and for the years ended December 31, 2016 and 2015 include the accounts of the Corporation and the Bank. All significant intercompany balances and transactions have been eliminated in consolidation. Initial Public Offering ("IPO") On January 14, 2014, Coastway Bancorp, Inc. became the parent holding company for Coastway Community Bank concurrent with its initial public offering. 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 $46.3 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 $1.5 million or 3.15% of the gross proceeds of the offering, which was recorded as a component of non-interest expense in the first quarter of 2014. The total number of shares of common stock outstanding upon completion of the IPO was 4,949,179 shares. 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. The ESOP acquired 395,934 shares of the stock issued in the IPO which were financed by a loan from the Corporation. See Note 9. As part of the IPO, Coastway Bancorp, Inc. established a liquidation account in an amount equal to the net worth as of the date of the latest consolidated balance sheet appearing in the final prospectus distributed in connection with the IPO, 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 IPO. The liquidation account will be reduced annually to the extent that such account holders have reduced their qualifying deposits as of each fiscal year end. 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 IPO, 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 To prepare 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, the valuation of deferred tax assets and the valuation of loans held for sale, mortgage-banking derivatives and commitments to sell fixed-rate residential mortgages. Reclassification Certain amounts in the 2015 consolidated financial statements have been reclassified to conform to the 2016 presentation. Reclassifications had no effect on prior year net income or stockholders' equity. 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. 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, is carried at cost, and is classified as a restricted security. At its discretion, the FHLB may declare cash or stock dividends on the stock which are reported as income. The Bank reviews this investment for impairment based on the ultimate recoverability of the cost basis in the FHLB stock. During the years ended December 31, 2016 and 2015, no impairment has been recognized. Loans The Bank's lending activities are conducted principally in Rhode Island. Loans purchased from third party originators are generally collateralized by properties in New England, primarily in Massachusetts. 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. Individually purchased one- to four-family loans are generally purchased at a premium, which is amortized into income 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 by a charge-off to bring the loan balance to the fair value of the collateral net of estimated selling costs. 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 of the allowance for loan losses 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, 2016. 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 lines of credit. Home equity loans and lines of credit may be underwritten with a loan to value ratio up to 80%. 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 real estate 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 up to a maximum SBA guarantee of $3.75 million per borrower and related entities. 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. Guaranteed portions of SBA loans totaled $25.9 million and $24.8 million at December 31, 2016 and 2015, respectively. Consumer—This segment includes unsecured and vehicle loans and repayment is dependent on the credit quality of the individual borrower. Economic trends determined by unemployment rates and other key economic indications are closely correlated to the credit quality of these loans. Specific component of the allowance for loan losses The specific component relates to loans that are classified as impaired. 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 original 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 accrual status after a period of satisfactory payment performance per the terms of the restructuring, generally six months of current payments. Loans Held for Sale One- to four-family residential mortgage loans originated and intended for sale in the secondary market are carried at fair value. The fair value includes the servicing value of the loans as management sells all loans held for sale servicing released. Gains and losses on loans held for sale are recorded in non-interest income as net gains on sale of loans and other mortgage banking income in the income statement. Derivatives Commitments to fund certain mortgage loans (interest rate locks) to be sold in the secondary market and forward loan commitments for the future delivery of mortgage loans to third party investors, including To Be Announced securities ("TBAs") and mandatory forward commitments, are accounted for as free-standing derivatives. These mortgage banking related derivatives are not designated in hedge relationships and are accounted for at fair value, with changes in fair value recorded in net gains on sales of loans and other mortgage banking income on the income statement. 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 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. 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 in the Consolidated Statements of Net Income. Bank-owned Life Insurance Bank-owned life insurance policies on certain key executives are reflected in the Consolidated Balance Sheets at the amount that can be realized under the insurance contracts, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. 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. 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. Deferred Compensation Supplemental Executive Retirement Plan The Bank maintains a non-qualified deferred compensation supplemental executive retirement plan ("DCSERP") with a senior executive. The DCSERP allows the executive to invest all or a portion of the deferred compensation in Corporation stock, provided that such stock will only be settled in Corporation stock. A Rabbi Trust holds the assets invested on behalf of the DCSERP. The Bank is required to make annual contributions of $72,000 each January thereafter until January, 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 DCSERP benefit in 10 approximately equal annual installments starting 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, other than Corporation stock, which shall be paid in Corporation stock. 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 DCSERP benefit in a lump sum no later than the first day of the second month after such separation from service. As of December 31, 2016, the executive was 80% vested in the SERP benefit. An additional 5% of his DCSERP 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 has the right to provide the Board of Directors of the Bank with investment directions for these investments. All earnings or losses on investments are the sole responsibility of the participant. The investments informally fund the DCSERP liability but remain assets of the Bank and are subject to the claims of general creditors of the Bank. Supplemental Retirement Agreements The Bank has entered into supplemental retirement agreements ("SERP") with seven executive and senior officers, which provide for payments upon attaining the retirement age specified in the agreements, generally 65-67. 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. Other Retirement Plans Employee 401(K) expense represents the amount of matching contributions. Supplemental retirement expense allocates benefits over the remaining service term. Employee Stock Ownership Plan The cost of shares issued to the ESOP, but not yet allocated to participants, is shown as a reduction of stockholders' equity. Compensation expense is based on the market price of shares as they are committed to be released to participant accounts. Stock-based Compensation Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the common stock at the date of grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on the straight-line basis over the requisite service period for the entire award. 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, 2016 and 2015 which require accrual or disclosure. The Company records interest and penalties as part of income tax expense, if applicable. Earnings Per Common Share Basic earnings per share represents income available to common stockholders divided by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income (loss) that would result from the assumed issuance. Unallocated ESOP shares are not deemed outstanding for the earnings per share calculation. 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 stockholders' equity section of theconsolidated balance sheets, such items, along with net income/loss, are components of comprehensive income/loss. The Bank measures the pension plan assets and pension obligations on an annual basis and recognizes in the consolidated financial statements an asset or liability for the plan's funded status. Dividends The Company and the Bank are regulated enterprises and their abilities to pay dividends are subject to regulatory review and restrictions. Certain regulatory and statutory restrictions exist regarding dividends, loans, and advances from the Bank to the Compnay. The FDIC and the Federal Reserve have the authority to use their enforcement powers to prohibit dividend payments if, in their opinion, the payment of dividends would constitute an unsafe or unsound practice. 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. A significant portion of the Company's loan portfolio is concentrated among borrowers with collateral in Rhode Island and Massachusetts. The ability of residential real estate mortgage borrowers to honor their repayment commitments is generally dependent on the level of overall economic activity within the market area and real estate values. The ability of commercial borrowers to honor their repayment commitments is dependent on the general economy as well as the health of the real estate economic sector in the Bank's market area. 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. Recent Accounting Pronouncements As an "emerging growth company," as defined in Title 1 of the Jumpstart Our Business Startups (JOBS) Act, the Corporation 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, 2016, there is no significant difference in the comparability of the financial statements as a result of this extended transition period. In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers." The objective of this amendment is to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and IFRS. This update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are in the scope of other standards. In August 2015, the FASB issued ASU 2015-14 to defer for one year the effective date of the new revenue standard. The requirements are effective for annual periods and interim periods within fiscal years beginning after December 15, 2018. During 2016, the FASB issued further implementation guidance regarding revenue recognition. This additional guidance included clarification on certain principal versus agent considerations within the implementation of the guidance as well as clarification related to identifying performance obligations and licensing, assessing collectability, presenting sales taxes, measuring noncash consideration, and certain transition matters. The Corporation does not expect the adoption of this guidance will have a significant impact on the Corporation's consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10), which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The ASU requires equity instruments (except those accounted for under the equity method of accounting or that result in consolidations of the investee) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure an equity investment that does not have a readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions. For public business entities, the standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. For all other entities, including emerging growth companies, the standard is effective for fiscal years beginning after December 15, 2018 and interim periods within fiscal periods after December 15, 2019. We do not expect a significant impact upon adoption on January 1, 2019. In February 2016, the FASB issued ASU 2016-02, which will require organizations that lease assets—referred to as "lessees"—to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Under the new guidance, a lessee will be required to recognize right to use assets and lease liabilities for leases with lease terms of more than 12 months. However, unlike current Generally Accepted Accounting Principles (GAAP)—which requires only capital leases to be recognized on the balance sheet—the new ASU will require both types of leases to be recognized on the balance sheet. The accounting by organizations that own the assets leased by the lessee—also known as lessor accounting—will remain largely unchanged from current GAAP. However, the ASU contains some targeted improvements that are intended to align, where necessary, lessor accounting with the lessee accounting model. The ASU on leases will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other organizations, including emerging growth companies, the ASU on leases will take effect for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020. We are currently evaluating the impact of adoption of this standard, including identifying contracts that are, or contain, leases, as the lease identification guidance in the new standard is different than the current standard. On March 30, 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-09, which is intended to improve the |
RESTRICTIONS ON CASH AND AMOUNT
RESTRICTIONS ON CASH AND AMOUNTS DUE FROM BANKS | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016 and 2015, the reserve balance amounted to $1.9 million and $2.6 million, respectively. |
CERTIFICATES OF DEPOSIT
CERTIFICATES OF DEPOSIT | 12 Months Ended |
Dec. 31, 2016 | |
CERTIFICATES OF DEPOSIT | |
CERTIFICATES OF DEPOSIT | 3. CERTIFICATES OF DEPOSIT There were no certificates of deposit at December 31, 2016. At December 31, 2015, investments in certificates of deposit amounting to $3.0 million with an interest rate of 0.70% mature in December 2016 and $3.1 million with an interest rate of 0.65% mature in April 2016. Certificates of deposit are carried at cost which approximates fair value. |
LOANS
LOANS | 12 Months Ended |
Dec. 31, 2016 | |
LOANS | |
LOANS | 4. LOANS A summary of the balances of loans follows: December 31, 2016 2015 (In thousands) Residential real estate mortgage loans: 1 - 4 family $ $ Home equity loans and lines of credit ​ ​ ​ ​ ​ ​ ​ ​ Total residential real estate mortgage loans Commercial: Commercial real estate Commercial business Commercial construction SBA ​ ​ ​ ​ ​ ​ ​ ​ Total commercial loans Consumer ​ ​ ​ ​ ​ ​ ​ ​ Total loans Allowance for loan losses ) ) Net deferred loan costs ​ ​ ​ ​ ​ ​ ​ ​ Loans, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Guaranteed portions of SBA loans total $25.9 million and $24.8 million at December 31, 2016 and 2015, respectively. Residential 1 - 4 family loans of $243.4 million and $208.8 million at December 31, 2016 and 2015 included purchased loans totaling $67.5 million and $64.1 million, respectively. Loans totaling $17.6 million and $56.7 million were individually purchased during the years ended December 31, 2016 and 2015 from third parties at a cost of $17.8 million and $57.4 million. Activity in the allowance for loan losses and allocation of the allowance to loan segments follows: Year Ended December 31, 2016 Residential Home Commercial Commercial Commercial SBA Consumer Total (In thousands) Allowance for loan losses: Beginning balance $ $ $ $ $ $ $ $ Provisions (credit) for loan losses ) Loans charged-off ) ) — — — ) ) ) Recoveries — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ending balance $ $ $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2016 Residential Home Commercial Commercial Commercial SBA Consumer Total (In thousands) Allowance for impaired loans $ $ $ — $ — $ — $ — $ $ Allowance for non-impaired loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total allowance for loan losses $ $ $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Impaired loans $ $ $ $ — $ — $ $ $ Non-impaired loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans $ $ $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2015 Residential Home Commercial Commercial Commercial SBA Consumer Total (In thousands) Allowance for loan losses: Beginning balance $ $ $ $ $ $ $ $ Provisions (credit) for loan losses ) ) Loans charged-off ) ) — — — ) ) ) Recoveries — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ending balance $ $ $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The allowance allocated by segment is as follows: December 31, 2015 Residential Home Commercial Commercial Commercial SBA Consumer Total (In thousands) Allowance for impaired loans $ $ $ — $ — $ — $ — $ $ Allowance for non-impaired loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total allowance for loan losses $ $ $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Impaired loans $ $ $ $ — $ — $ $ $ Non-impaired loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans $ $ $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following is a summary of past due and non-accrual loans at December 31, 2016 and 2015: 30 - 59 Days 60 - 89 Days 90 Days or Total Past Due 90 Loans on (In thousands) December 31, 2016 Residential real estate: Residential 1 - 4 family $ $ $ $ $ — $ Home equity loans and lines of credit — Commercial real estate — — — Commercial business — — — — — — Commercial construction — — — — — — SBA — — Consumer — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2015 Residential real estate: Residential 1 - 4 family $ $ $ $ $ — $ Home equity loans and lines of credit — Commercial real estate — — — Commercial — — — — — — Commercial construction — — — — — — SBA — — — Consumer — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following is information pertaining to impaired loans: December 31, 2016 December 31, 2015 Recorded Unpaid Related Recorded Unpaid Related (Dollars in thousands) Impaired loans without a valuation allowance: Residential real estate: Residential 1 - 4 family $ $ $ — $ $ $ — Home equity loans and lines of credit — — Commercial real estate — — SBA — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ — $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Impaired loans with a valuation allowance: Residential real estate: Residential 1 - 4 family $ $ $ $ $ $ Home equity loans and lines of credit Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, 2016 Year ended December 31, 2015 Average Interest Interest Income Average Interest Interest Income (Dollars in thousands) Residential real estate: Residential 1 - 4 family $ $ $ $ $ $ Home equity loans and lines of credit Commercial real estate SBA Consumer — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ No additional funds are committed to be advanced in connection with impaired loans at December 31, 2016 and 2015. Of the $1.5 million and $2.0 million of impaired SBA loans at December 31, 2016 and 2015, respectively, guaranteed portions amounted to $1.2 million and $1.7 million, respectively. The following is a summary of troubled debt restructurings for the years ended December 31, 2016 and 2015: Number of Pre-Modification Post-Modification (In thousands) Year Ended December 31, 2016 Residential 1 - 4 family $ $ Home equity and lines of credit Commercial real estate SBA Year Ended December 31, 2015 Residential 1 - 4 family $ $ Home equity and lines of credit Commercial real estate SBA The troubled debt restructurings described above had a $19,000 and $2,300 impact to the allowance for loan losses and resulted in no charge offs and $11,000 in charge-offs for the years ended December 31, 2016 and 2015, respectively. Troubled debt restructurings totaled $10.9 million and $6.6 million of which $8.3 million and $3.5 million are on accrual at December 31, 2016 and 2015. TDRs of $366,000 had specific reserves of $53,000 at December 31, 2016 and TDRs of $1.2 million had specific reserves of $56,000 at December 31, 2015. 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, 2016, the Bank modified 4 loans totaling $4.1 million that were performing troubled debt restructured loans at the time of modification. During the year ended December 31, 2015, the Bank modified seven loans totaling $845,000 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, 2016 and 2015. 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, 2016 and 2015: Number of Recorded (In thousands) Year Ended December 31, 2016 Residential 1 - 4 family $ Home equity Year Ended December 31, 2015 Residential 1 - 4 family $ Home equity SBA The troubled debt restructurings above have specific reserves of $2,000 and $20,000 and resulted in no charge-offs and charge-offs of $16,000 during the years ended December 31, 2016 and 2015, respectively. 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 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. Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be pass-rated loans. On an annual basis, or more often if needed, the Bank formally reviews the ratings on commercial and SBA loans for loans over $250,000. 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, and are not risk graded. The following table presents the Bank's commercial loans by risk rating. December 31, 2016 Commercial Commercial Commercial SBA Total (In thousands) Pass $ $ $ $ $ Loans rated 6 — — Loans rated 7 — — Loans rated 8 — — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2015 Commercial Commercial Commercial SBA Total (In thousands) Pass $ $ $ $ $ Loans rated 6 — — Loans rated 7 — — Loans rated 8 — — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
LOAN SERVICING
LOAN SERVICING | 12 Months Ended |
Dec. 31, 2016 | |
LOAN SERVICING | |
LOAN SERVICING | 5. 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, 2016 and 2015, the Bank was servicing commercial loans for participants aggregating $3.0 million and $4.3 million, respectively. At December 31, 2016 and 2015, the Bank was servicing SBA loans for participants aggregating $12.3 million and $17.2 million, respectively. The Bank sold the guaranteed portion of SBA loans totaling $4.2 million during 2015 for a gain of $328,000. There were no sales of SBA loans in 2016. |
PREMISES AND EQUIPMENT
PREMISES AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2016 | |
PREMISES AND EQUIPMENT | |
PREMISES AND EQUIPMENT | 6. PREMISES AND EQUIPMENT A summary of the cost and accumulated depreciation and amortization of premises and equipment follows: December 31, 2016 2015 (In thousands) Land $ $ Buildings and improvements Furniture, fixtures and equipment Leasehold improvements ​ ​ ​ ​ ​ ​ ​ ​ Less accumulated depreciation and amortization ) ) ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization expense amounted to $1.3 million and $1.3 million for the years ended December 31, 2016 and 2015, respectively. 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, 2016, future minimum lease commitments are as follows (in thousands): 2017 $ 2018 2019 2020 2021 Thereafter — ​ ​ ​ ​ ​ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rent expense amounted to $205,000 and $173,000 for the years ended December 31, 2016 and 2015, respectively. |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2016 | |
DEPOSITS | |
DEPOSITS | 7. DEPOSITS A summary of deposit balances, by type, is as follows: December 31, 2016 2015 (In thousands) Non-interest-bearing demand deposit accounts $ $ Savings accounts and interest-bearing DDA Money market accounts Club accounts ​ ​ ​ ​ ​ ​ ​ ​ Total non-certificate accounts ​ ​ ​ ​ ​ ​ ​ ​ Term certificates $250,000 or greater Term certificates less than $250,000 ​ ​ ​ ​ ​ ​ ​ ​ Total certificate accounts ​ ​ ​ ​ ​ ​ ​ ​ Total deposits $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ A summary of certificate accounts by maturity is as follows: December 31, 2016 December 31, 2015 Maturing Periods Amount Weighted Amount Weighted (Dollars in thousands) Within 1 year $ % $ % Within 2 years Within 3 years Within 4 years Within 5 years ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ % $ % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
BORROWED FUNDS
BORROWED FUNDS | 12 Months Ended |
Dec. 31, 2016 | |
BORROWED FUNDS | |
BORROWED FUNDS | 8. BORROWED FUNDS FHLB advances with an original maturity of less than three months amounted to $119.5 million and $115.5 million at December 31, 2016 and 2015, respectively, at a weighted average rate of 0.74% and 0.44%, respectively. Long-term FHLB advances as of December 31, 2016 consist of one non-amortizing advance of $1.75 million maturing September 20, 2021 with 0% stated interest rate. The long-term advance was made under the FHLB's Jobs for New England Program. There were no long-term advances outstanding at December 31, 2015. At December 31, 2016 and 2015, 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, 2016 or 2015. 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, 65% of the carrying value of certain qualifying commercial real estate loans, and 49% of the carrying value of home equity lines of credit. At December 31, 2016 and 2015, the Bank has an agreement with the Federal Reserve Bank of Boston for borrowings at the discount window. 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, 2016 and 2015, there were no borrowings under this agreement. The Bank had $18.5 million of capacity based on collateral pledged to the Federal Reserve Bank of Boston at December 31, 2016. |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 12 Months Ended |
Dec. 31, 2016 | |
EMPLOYEE BENEFITS | |
EMPLOYEE BENEFITS | 9. 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 2016 2015 (In thousands) Change in benefit obligation: Benefit obligation at beginning of year $ $ Interest cost Actuarial (gain) loss ) Benefits paid ) ) ​ ​ ​ ​ ​ ​ ​ ​ Projected benefit obligation at end of year ​ ​ ​ ​ ​ ​ ​ ​ Change in plan assets: Fair value of plan assets at beginning of year Actual return on plan assets Employer contribution — Benefits paid ) ) ​ ​ ​ ​ ​ ​ ​ ​ Fair value of plan assets at end of year ​ ​ ​ ​ ​ ​ ​ ​ Unfunded status at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated benefit obligation at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2016 and 2015, the discount rate used to determine the benefit obligation was 4.15% and 4.34%, respectively. The components of net periodic pension cost are as follows: Years Ended 2016 2015 (In thousands) Interest cost $ $ Expected return on plan assets ) ) Amortization of actuarial loss Settlement cost — ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Certain participants elected to take lump sum payments which resulted in the settlement costs of $26,000 for the year ended December 31, 2015 noted above, since lump sum payments exceeded the sum of the interest and service costs components of the net periodic pension cost. There were no settlement costs during the year ended December 31, 2016. An actuarial loss of $52,000, included in accumulated other comprehensive loss at December 31, 2016, is expected to be recognized as a component of net periodic pension cost for the year ending December 31, 2017. The assumptions used to determine net periodic pension cost are as follows: Years Ended 2016 2015 Discount rate % % Expected return on plan assets % % 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. Accumulated other comprehensive loss represents the actuarial loss that will be amortized through salary and employee benefits expense, and amounted to $466,000 and $456,000, at December 31, 2016 and 2015, respectively. The related tax benefits of the actuarial loss as of December 31, 2016 and 2015 were $186,000 and $182,000, respectively. 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, 2016 2015 (In thousands) Equity securities: Domestic mutual funds $ $ Fixed income International mutual funds International exchange traded funds Cash and cash equivalents ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Bank expects to contribute $8,000 to the plan during the year ending December 31, 2017. Estimated future benefit payments are expected to be paid follows: Years Ending December 31, Amount (In thousands) 2017 2018 2019 2020 2021 Thereafter Deferred Compensation Supplemental Executive Retirement Plan The assets related to this DCSERP Plan are $1.1 million and $930,000 at December 31, 2016 and 2015, respectively. The liability for the benefit obligation is reported in accrued expenses and other liabilities in the amount of $1.1 million and $930,000 at December 31, 2016 and 2015, respectively. Additionally, the Rabbi Trust holds 8,900 shares of Corporation stock at December 31, 2016 and 2015 which is accounted for at its cost basis of $100,000, which is offset in stockholders' equity by the benefit obligation of $100,000. Rabbi Trust shares are considered outstanding shares for both basic and diluted earnings per share. Compensation expense related to this plan was $195,000 and ($59,000) for the years ended December 31, 2016 and 2015, respectively. The assets related to the Plan are all considered to be level I trading securities and consist of mutual fund and fixed income securities. 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 may contribute for each qualified employee an amount equal to 5% of gross compensation less amounts allocated to the ESOP as a discretionary contribution. The Bank's contribution to the Plan was $559,000 and $537,000 for the years ended December 31, 2016 and 2015, respectively. Incentive Compensation At December 31, 2015, the Bank did not have a formal incentive plan but on an annual basis the Board of Directors reviewed Bank performance and authorized bonus amounts at their discretion. Salary and employee benefits expense for the year ended December 31, 2015 includes $237,000 related to discretionary bonuses. On January 28, 2016, the Company and the Bank formally adopted an Annual Incentive Plan ("AIP"), effective January 1, 2016. Participants in the AIP are recommended by the CEO and approved by the Compensation Committee of the Board of Directors. Awards will be allocated based on specific performance goals, and unless the Compensation Committee deems otherwise, awards will not be paid, regardless of performance, if positive net income is not achieved. However, the Compensation Committee will have the ability to make discretionary bonuses to key performers if the AIP does not activate. Salary and benefits expense for the year ended December 31, 2016 includes $280,000 related to the AIP and $35,000 related to discretionary bonuses for other employees. Supplemental Retirement Agreements SERP expense totaled $767,000 and $603,000 for the years ended December 31, 2016 and 2015, respectively. The weighted average discount rate used to determine the SERP cost for the year ended December 31, 2016 was 3.36%. At December 31, 2016 and 2015, the accrued liability related to the SERP was $1.9 million and $1.2 million, respectively. Employee Stock Ownership Plan The Corporation maintains 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 Corporation employees. Contributions are allocated to eligible participants on the basis of compensation, subject to federal tax limits. The Corporation granted a loan to the ESOP for the purchase of shares of the Corporation's common stock at the Conversion date. As of December 31, 2016, the ESOP holds 395,219 shares, or 9% of the common stock outstanding on that date. The loan obtained by the ESOP from the Corporation to purchase common stock is payable annually over 25 years at the prime rate, as published in The Wall Street Journal, which is 3.50% per annum for the loan payment at December 31, 2016 and has adjusted to 3.75% in 2017. The loan is secured by the shares purchased, which are held in a suspense account for allocation among participants as the loan is repaid. Cash dividends if paid in the future on unallocated shares will be used to repay the outstanding debt of the ESOP then due. If the amount of dividends exceeds the outstanding debt of the ESOP, then, in the sole discretion of the Corporation, cash dividends may be allocated to active participants on a non-discriminatory basis, or be deemed to be general earnings of the ESOP. Shares used as collateral to secure the loan are released and available for allocation to eligible employees as the principal and interest on the loan is paid. Shares held by the ESOP include the following: December 31, Allocated Distributions/sales ) Committed to be allocated — Unallocated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The fair value of unallocated shares was approximately $5.5 million at December 31, 2016. Total compensation expense recognized in connection with the ESOP for the years ended December 31, 2016 and 2015 was $206,000 and $179,000. Executive Change in Control Severance Plan 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, if the participant is not offered a comparable employment position in a similar geographic location. |
OTHER STOCK-BASED COMPENSATION
OTHER STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2016 | |
OTHER STOCK-BASED COMPENSATION | |
OTHER STOCK-BASED COMPENSATION | 10. OTHER STOCK-BASED COMPENSATION Equity Incentive Plan On May 21, 2015, the Coastway Bancorp, Inc. stockholders approved the 2015 Equity Incentive Plan ("EIP"). Types of awards permitted by the EIP include stock options, restricted stock awards, restricted stock units, and performance awards. The number of shares available for issuance under the EIP was 692,885 at December 31, 2015. Stock options under the EIP will generally expire after ten years after the date of grant. Unless otherwise determined by the Compensation Committee, awards under the EIP (other than Performance Awards) shall be granted with a vesting rate not exceeding twenty percent per year, with the first installment vesting no earlier than one year after the date of grant. Upon an involuntary termination following a change in control, all stock options, restricted stock awards and units will become fully vested and performance awards will be deemed earned. There were no awards granted under the EIP during the year ended December 31, 2015. In February 2016, the Compensation Committee of the Board of Directors authorized the grant of 91,225 options at a strike price of $12.41 and 39,045 shares of restricted stock to directors and certain key senior executives. The options and the restricted stock both vest over a five year period, at a rate of 20% per year. The $12.41 fair value of the restricted stock is based on the closing price of the Company's common stock on the date of the grant. The holders of restricted stock participate fully in rewards of stock ownership of the Company, and dividend rights when vested. Restricted stock expense for the year ended December 31, 2016 was $85,000. At December 31, 2016, there was $400,000 of unrecognized salary and employee benefits cost related to restricted stock which is expected to be recognized over a period of 4.1 years. The grant-date fair value of stock options of $2.59 was estimated using the Black-Scholes Option-Pricing Model. Stock option expense for the year ended December 31, 2016 was $41,000. At December 31, 2016, there was $195,000 of unrecognized salary and employee benefits cost related to stock options which is expected to be recognized over a period of 4.1 years. The number of shares reserved for future issuance totaled 562,615 at December 31, 2016. The fair value of options granted was determined using the following weighted-average assumptions as of grant date. 2016 Risk-free interest rate % Expected term 8 years Expected stock price volatility % Dividend yield % A summary of the stock option activity in the EIP plan for 2016 follows: Shares Weighted Weighted Aggregate Outstanding at beginning of year — $ — — $ — Granted — Exercised — — — — Forfeited or expired — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fully vested and expected to vest $ $ There were no stock options exercisable as of December 31, 2016. There were no stock options granted at December 31, 2015. A summary of changes in nonvested restricted stock for the year follows: Nonvested Shares Shares Weighted-Average Nonvested at January 1, 2016 — $ — Granted Vested — — Forfeited — — ​ ​ ​ ​ ​ ​ ​ ​ Nonvested at December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
OFF-BALANCE SHEET ACTIVITIES AN
OFF-BALANCE SHEET ACTIVITIES AND MORTGAGE BANKING | 12 Months Ended |
Dec. 31, 2016 | |
OFF-BALANCE SHEET ACTIVITIES AND MORTGAGE BANKING | |
OFF-BALANCE SHEET ACTIVITIES AND MORTGAGE BANKING | 11. OFF-BALANCE SHEET ACTIVITIES AND MORTGAGE BANKING In the normal course of business, there are outstanding commitments and contingencies which are not reflected in the accompanying consolidated 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 and home equity lines of credit that involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets. 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, 2016 2015 (In thousands) Commitments to originate loans for portfolio $ $ Commitments to originate loans to be sold Commitments to purchase loans from third parties Unfunded commitments under home equity lines of credit Unfunded commitments under commercial lines of credit Unfunded commitments under SBA lines of credit Unfunded commitments under overdraft lines of credit Unadvanced funds on construction loans 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 or prepays generally on any of the first four payments due. At December 31, 2016 and 2015, the premiums received on loans sold that were subject to refund provisions amounted to $1.9 million and $1.3 million, respectively. The contracts also include repurchase obligation provisions for fraud or misrepresentation. The Bank repurchased $830,000 in loans and refunded premiums of $46,000 under these agreements during 2015. No loans were repurchased in 2016, and the Bank refunded $37,000 in premiums in 2016. No liability has been recorded in the consolidated financial statements related to these recourse obligations. Mortgage Banking At December 31, 2016, the Bank had $24.3 million of interest rate lock commitments to borrowers and loans held for sale of $23.2 million with $41.9 million of forward commitments for the future delivery of residential mortgage loans. Included in the forward commitments total are open TBAs with a notional amount of $15.3 million, mandatory delivery contracts with a notional amount of $7.4 million, and best efforts contracts with a notional amount of $19.3 million. The Bank has $8.5 million of closed hedge instruments that are not settled at December 31, 2016. At December 31, 2015, the Bank had $13.1 million of interest rate lock commitments to borrowers and loans held for sale of $19.0 million with $31.3 million of forward commitments for the future delivery of residential mortgage loans. Included in the forward commitments total are open TBAs with a notional amount of $4.0 million, mandatory delivery contracts with a notional amount of $2.8 million, and best efforts contracts with a notional amount of $24.5 million. The Bank has $4.8 million of closed hedge instruments that are not settled at December 31, 2015. The following table presents the fair values of derivative instruments and forward loan sale commitments in the consolidated balance sheets: Assets Liabilities Balance Fair Balance Fair (In thousands) December 31, 2016 Derivative loan commitments: Commitments hedged with best efforts Other assets $ N/A $ — Commitments hedged with TBA Other assets N/A — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivative commitments N/A — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Forward loan sale commitments Best efforts contracts hedging: Commitments N/A — Other liabilities Loans held for sale Other assets N/A — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total best efforts contracts Mandatory delivery contracts N/A — Other liabilities TBA securities N/A — Other liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total forward loan sale commitments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivative loan and forward loan sale commitments $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets Liabilities Balance Fair Balance Fair (In thousands) December 31, 2015 Derivative loan commitments: Commitments hedged with best efforts Other assets $ N/A $ — Commitments hedged with TBA Other assets N/A — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivative commitments N/A — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Forward loan sale commitments: Best efforts contracts hedging: Commitments N/A — Other liabilities Loans held for sale N/A — Other liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total best efforts contracts — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mandatory delivery contracts Other assets N/A — TBA securities N/A — Other liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total forward loan sale commitments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivative loan and forward loan sale commitments $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest Rate Risk Management—Derivative Instruments not Designated as Hedging Instruments The following table presents information pertaining to the gains and losses on Bank's derivative instruments and forward commitments to sell loans not designated as hedging instruments: Years Ended Location of 2016 2015 (In thousands) Derivative loan commitments—best efforts Net gain on sales of loans and other mortgage banking income $ $ Derivative loan commitments—TBA Net gain on sales of loans and other mortgage banking income Best efforts contracts Net gain on sales of loans and other mortgage banking income ) Mandatory delivery contracts Net gain on sales of loans and other mortgage banking income ) TBA securities Net gain on sales of loans and other mortgage banking income ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 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. Legal and Other Loss Contingencies 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 Bank's consolidated financial statements at December 31, 2016 and 2015. |
LOANS TO RELATED PARTIES
LOANS TO RELATED PARTIES | 12 Months Ended |
Dec. 31, 2016 | |
LOANS TO RELATED PARTIES | |
LOANS TO RELATED PARTIES | 12. LOANS TO RELATED PARTIES Information pertaining to loans to directors, executive officers and their associates is as follows: Years Ended 2016 2015 (In thousands) Balance at beginning of year $ $ Principal additions Principal payments ) ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
INCOME TAXES | |
INCOME TAXES | 13. INCOME TAXES Allocation of income taxes between current and deferred portions is as follows: Years Ended 2016 2015 (In thousands) Current tax expense: Federal $ $ State ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax (benefit) expense: Federal State ) ​ ​ ​ ​ ​ ​ ​ ​ ) ​ ​ ​ ​ ​ ​ ​ ​ Total income tax expense $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The reasons for the differences between the statutory federal income tax expense and the actual tax expense are summarized as follows: Years Ended 2016 2015 (In thousands) Statutory tax expense at 34% $ $ Increase (decrease) resulting from: State taxes, net of federal tax benefit Other, net ) ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The tax effects of each item that give rise to deferred taxes are as follows: December 31, 2016 2015 (In thousands) Deferred tax assets: Allowance for loan losses $ $ Employee benefits Non-accrual interest Defined benefit pension plan Charitable contribution carryforwards Organization costs Impairment on real estate held for sale — Other, net ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities: Premises and equipment, net ) ) Net deferred loan costs ) ) Mortgage derivatives ) ) Other, net ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax asset, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ A summary of the change in deferred taxes is as follows: Years Ended 2016 2015 (In thousands) Balance at beginning of year $ $ Deferred tax (expense) benefit ) Unrealized gain/loss pertaining to defined benefit pension plan ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Bank has a net deferred tax asset of $318,000 relating to charitable contribution carry forwards that must be utilized by the income tax year ending December 31, 2019. Charitable contributions are generally limited to a ten percent of taxable income deduction. At December 31, 2016 and 2015, the Bank has no ASC 740-10 unrecognized tax benefits. The Bank does not expect the total amount of the unrecognized tax benefits to significantly increase within the next twelve months. The Bank's income tax returns are subject to review and examination by federal and state taxing authorities. The Bank is subject to U.S. federal income tax as well as income tax in various state taxing jurisdictions. The Bank is no longer subject to examination by federal and state taxing authorities for years prior to the year ended December 31, 2013. |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2016 | |
EARNINGS PER COMMON SHARE | |
EARNINGS PER COMMON SHARE | 14. EARNINGS PER COMMON SHARE Basic earnings per share represents income available to common stockholders divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. There were 4,000 and no potentially dilutive common stock equivalents as of December 31, 2016 and 2015. Unallocated ESOP shares are not deemed outstanding for earnings per share calculations. The factors used in the earnings per share computation are as follows for the years ended December 31: 2016 2015 (in thousands) Net income applicable to common stock $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding Less: Average unallocated ESOP shares ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of common shares outstanding—basic Dilutive impact of stock options — — Dilutive impact of restricted stock — ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of common shares outstanding—diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share—basic $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share—diluted $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The incremental shares of common stock totaling 5,702 shares pertaining to outstanding stock options were not considered in computing diluted earnings per share for the year ended December 31, 2016 because they were anti-dilutive. There were no stock options granted for the year ended December 31, 2015 and as such, there was no impact on dilutive earnings per share. |
STOCK REPURCHASE PROGRAMS
STOCK REPURCHASE PROGRAMS | 12 Months Ended |
Dec. 31, 2016 | |
STOCK REPURCHASE PROGRAMS | |
STOCK REPURCHASE PROGRAMS | 15. STOCK REPURCHASE PROGRAMS In January 30, 2015, the Corporation authorized a program to repurchase, from time to time and as market and business conditions warrant, up to 247,459 shares of the Corporation's common stock. During the year ended December 31, 2016 and 2015, 120,559 shares and 126,900 shares were repurchased at a cost of $1.6 million and $1.5 million, respectively. Shares repurchased of 71,659 during the year ended December 31, 2016 were repurchased from one stockholder at a price of $13.00 per share. On May 19, 2016, the Corporation announced it had completed this first stock repurchase program. In May, 2016, the Corporation authorized a program to repurchase, from time to time and as business conditions warrant, up to 235,086 shares of the Corporation's common stock. During the year ended December 31, 2016, 235,086 shares were repurchased for a cost of $3.1 million. The 235,086 shares were repurchased from one stockholder at a price of $13.00 per share. On June 14, 2016, the Corporation announced it had completed this second stock repurchase program. In November, 2016, the Corporation authorized a program to repurchase, from time to time and as business conditions warrant, up to 223,331 shares of the Corporation's common stock. During the year ended December 31, 2016, 102,583 shares were repurchased under this third stock repurchase program. |
MINIMUM REGULATORY CAPITAL REQU
MINIMUM REGULATORY CAPITAL REQUIREMENTS | 12 Months Ended |
Dec. 31, 2016 | |
MINIMUM REGULATORY CAPITAL REQUIREMENTS | |
MINIMUM REGULATORY CAPITAL REQUIREMENTS | 16. 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. Federal regulations require FDIC-insured depository institutions to meet several minimum capital standards: a common equity Tier 1 capital to risk-based assets ratio of 4.5%, a Tier 1 capital to risk-based assets ratio of 6.0%, a total capital to risk-based assets of 8%, and a 4% Tier l capital to total assets leverage ratio. The existing capital requirements were effective January 1, 2015 and are the result of a final rule implementing regulatory amendments based on recommendations of the Basel Committee on Banking Supervision and certain requirements of the Dodd-Frank Act. In addition to establishing the minimum regulatory capital requirements, the regulations limit capital distributions and certain discretionary bonus payments to management if the institution does not hold a "capital conservation buffer" consisting of 2.5% of common equity Tier 1 capital to risk-weighted asset above the amount necessary to meet its minimum risk-based capital requirements. The capital conservation buffer requirement is being phased in beginning January 1, 2016 at 0.625% of risk-weighted assets and increasing each year until fully implemented at 2.5% on January 1, 2019. At December 31, 2016, the capital conservation buffer is 0.625% of risk-weighted assets. Management believes, as of December 31, 2016 and 2015, that the Bank meet all capital adequacy requirements to which it is subject. As of December 31, 2016, the most recent notification from the Federal Deposit Insurance Corporation ("FDIC") categorized the Bank as well-capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution's category. 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. The Bank's actual and minimum required capital amounts at December 31, 2016 and 2015 are as follows: Actual Minimum Capital Minimum Capital Minimum Capital (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio December 31, 2016 Total Capital (to risk weighed assets) $ % $ % $ % $ % Tier 1 Capital (to risk weighed assets) Common Equity Tier 1 (to risk weighed assets) Tier 1 Leverage Capital (to average assets) N/A N/A December 31, 2015 Total Capital (to risk weighed assets) $ % $ % N/A N/A $ % Tier 1 Capital (to risk weighed assets) N/A N/A Common Equity Tier 1 (to risk weighed assets) N/A N/A Tier 1 Leverage Capital (to average assets) N/A N/A On April 9, 2015, the Board of Governors of the Federal Reserve System issued the Final Rule to implement Public law 113-250 enacted on December 18, 2014 that updates the Small Bank Holding Company Policy Statement ("Policy Statement"), which became effective in May 2015. Pursuant to the Policy Statement, capital rules and reporting requirements will not apply to the small bank holding companies (defined as less than $1.0 billion in assets) which meet the following criteria: (1) not engaged in significant non-bank activities; (2) no significant off-balance sheet activities conducted through a non-bank subsidiary, and (3) no material amount of SEC registered debt or equity securities outstanding (other than trust preferred). The Bank is subject to the capital rules and reporting requirements, though the holding company is exempt. |
FAIR VALUES OF ASSETS AND LIABI
FAIR VALUES OF ASSETS AND LIABILITIES | 12 Months Ended |
Dec. 31, 2016 | |
FAIR VALUES OF ASSETS AND LIABILITIES | |
FAIR VALUES OF ASSETS AND LIABILITIES | 17. FAIR VALUES OF ASSETS AND LIABILITIES 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. 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. Certificates of Deposit —The carrying amount of certificates of deposit approximates fair value based on the short-term nature of the asset. 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. Accrued interest receivable —The carrying amounts of accrued interest receivable approximates fair value. 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 payable —The carrying amounts of accrued interest payable approximates 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. The estimates of fair value of financial instruments were based on information available at December 31, 2016 and 2015 and are not indicative of the fair value of those instruments as of the date of this report. These estimates do not include any premium or discount that could result from offering for sale at one time the Corporation's entire holdings of a particular instrument. The fair value of the Corporation's time deposit liabilities do not take into consideration the value of the Corporation's long-term relationships with depositors, which may have significant value. Because no active market exists for a portion of the Corporation's financial instruments, fair value estimates were based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Fair value estimates were based on existing on- and off-balance sheet financial instruments without an attempt to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments, including premises and equipment, foreclosed real estate, and real estate held for sale. Assets and Liabilities Measured at Fair Value on a Recurring Basis At December 31, 2016 and 2015, there are no assets or liabilities measured at fair value on a recurring basis other than loans held for sale, mortgage derivatives and forward commitments to sell loans. See Note 11. Fair value changes in mortgage banking derivatives 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. The fair value of the mortgage banking derivatives and forward commitments to sell using best efforts contracts 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 Asset Valuation Unobservable Range (In thousands) December 31, 2016 Derivative loan commitments $ Investor pricing Pull-through rate 75.1% - 100% Forward loan sale commitments: Best efforts contracts—hedging commitments ) Investor pricing Pull-through rate 82.5% - 100% Best efforts contracts—hedging loans held for sale Investor pricing Pull-through rate 82.5% - 100% December 31, 2015 Derivative loan commitments $ Investor pricing Pull-through rate 79.6% - 100% Forward loan sale commitments: Best efforts contracts—hedging commitments ) Investor pricing Pull-through rate 82.5% - 100% Best efforts contracts—hedging loans held for sale ) Investor pricing Pull-through rate 82.5% - 100% The table below presents (in thousands), for the years ended December 31, 2016 and 2015, 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. 2016 2015 Balance at beginning of year Gains (loss) arising during the period — Gains (loss) on new commitments during the period Reclassifications of realized gains on settled commitments ) ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 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, 2016 and 2015. The losses represent the amount of write-downs during the year on assets held at year end. December 31, 2016 Year Ended Level 1 Level 2 Level 3 Total Losses (In thousands) Foreclosed real estate $ — $ — $ $ — Impaired loans — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ — $ — $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2015 Year Ended Level 1 Level 2 Level 3 Total Losses (In thousands) Foreclosed real estate $ — $ — $ $ Impaired loans — — ) Real estate held for sale — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ — $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, less selling costs. 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. Impaired loans of $558,000, net of specific reserves of $23,000, resulted in a provision of $116,000 for December 31, 2016, and impaired loans of $1.2 million, net of specific reserves of $15,000, resulted in a credit provision of $47,000 for 2015. 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 from loans and subsequent write-downs charged to earnings. There are no liabilities measured at fair value on a non-recurring basis at December 31, 2016 or 2015. The following table shows significant unobservable inputs used in the non-recurring fair value measurements of Level 3 assets: Measurements Fair Value Valuation Unobservable Inputs Range (In thousands) December 31, 2016 Foreclosed real estate $ Discounted appraisals Collateral discounts 5 - 30% Impaired loans Discounted appraisals Collateral discounts 5 - 30% December 31, 2015 Foreclosed real estate $ Discounted appraisals Collateral discounts 5 - 30% Impaired loans Discounted appraisals Collateral discounts 5 - 30% As of December 31, 2016 and 2015, the aggregate fair value, contractual balance and gain or loss on loans held for sale, at fair value was as follows: 2016 2015 (in thousands) Aggregate fair value $ $ Contractual balance Gain The total amount of gains and losses from changes in fair value included in earnings for the year ended December 31, 2016 and 2015 for loans held for sale were $(241,000) and $684,000. Assets Measured at Fair Value on a Non-recurring Basis 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, 2016 and 2015. The tables exclude derivatives. December 31, 2016 Fair Value Measurements Carrying Estimated Level 1 Level 2 Level 3 (In thousands) Financial assets: Cash and cash equivalent $ $ $ $ — $ — Loans, net of allowance for loan losses — — Loans held for sale — — FHLB stock N/A N/A N/A N/A Accrued interest receivable — — Financial liabilities: Non-certificate accounts — — Certificate accounts — — Borrowed funds — — Accrued interest payable — — December 31, 2015 Fair Value Measurements Carrying Estimated Level 1 Level 2 Level 3 (In thousands) Financial assets: Cash and cash equivalents $ $ $ $ — $ — Certificates of deposit — — Loans, net of allowance for loan losses — — Loan held for sale — — FHLB stock N/A N/A N/A N/A Accrued interest receivable — — Financial liabilities: Non-certificate accounts — — Certificate accounts — — Borrowed funds — — Accrued interest payable — — |
PARENT COMPANY FINANCIAL STATEM
PARENT COMPANY FINANCIAL STATEMENTS | 12 Months Ended |
Dec. 31, 2016 | |
PARENT COMPANY FINANCIAL STATEMENTS | |
PARENT COMPANY FINANCIAL STATEMENTS | 18. PARENT COMPANY FINANCIAL STATEMENTS Condensed financial information relative to the Parent Company's balance sheets at December 31, 2016 and 2015 and the related statements of net income and loss and cash flows for the year ended December 31, 2016 and 2015 are presented below. The statement of stockholders' equity is not presented below as the parent company's stockholders' equity is that of the consolidated company. BALANCE SHEETS December 31 December 31 (in thousands) Assets Cash $ $ Certificates of Deposit — Investments in subsidiaries Note receivable from subsidiary Other assets ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and stockholders' equity Other liabilities $ $ Stockholders' equity ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' equity $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ STATEMENTS OF NET INCOME (LOSS) Year-ended Year-ended 2016 2015 (in thousands) Income Interest income $ $ Expenses Other expenses ​ ​ ​ ​ ​ ​ ​ ​ Loss before income tax benefit and equity in undistributed income of subsidiaries ) ) Income tax benefit ) ) ​ ​ ​ ​ ​ ​ ​ ​ Loss of parent company ) ) ​ ​ ​ ​ ​ ​ ​ ​ Equity in undistributed income of subsidiaries ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ STATEMENTS OF CASH FLOWS Year-ended Year-ended 2016 2015 (in thousands) Cash flows from operating activities: Net income $ $ Adjustments to reconcile net loss to cash used in operating activities Change in other assets ) Change in other liabilities ) Equity in undistributed income of subsidiaries ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) operating activities ) Cash flows used in investing activities: Purchase of and increase in certificates of deposit ) ) Maturities of certificates of deposit — Change in note receivable from subsidiary, net ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) investing activities ) Cash flows used in financing activities: Repurchase of common stock ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net cash used in financing activities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net decrease in cash and cash equivalents ) ) Cash and cash equivalents at the beginning of the year ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents at the end of the year $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
SUMMARY OF SIGNIFICANT ACCOUN27
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Operations and Basis of Presentation | Nature of Operations and Basis of Presentation Coastway Bancorp, Inc., a Maryland chartered stock corporation ("Company" or "Corporation"), was formed to serve as the holding company for Coastway Community Bank. Coastway Community 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 at and for the years ended December 31, 2016 and 2015 include the accounts of the Corporation and the Bank. All significant intercompany balances and transactions have been eliminated in consolidation. |
Initial Public Offering ("IPO") | Initial Public Offering ("IPO") On January 14, 2014, Coastway Bancorp, Inc. became the parent holding company for Coastway Community Bank concurrent with its initial public offering. 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 $46.3 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 $1.5 million or 3.15% of the gross proceeds of the offering, which was recorded as a component of non-interest expense in the first quarter of 2014. The total number of shares of common stock outstanding upon completion of the IPO was 4,949,179 shares. 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. The ESOP acquired 395,934 shares of the stock issued in the IPO which were financed by a loan from the Corporation. See Note 9. As part of the IPO, Coastway Bancorp, Inc. established a liquidation account in an amount equal to the net worth as of the date of the latest consolidated balance sheet appearing in the final prospectus distributed in connection with the IPO, 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 IPO. The liquidation account will be reduced annually to the extent that such account holders have reduced their qualifying deposits as of each fiscal year end. 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 IPO, 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 To prepare 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, the valuation of deferred tax assets and the valuation of loans held for sale, mortgage-banking derivatives and commitments to sell fixed-rate residential mortgages. |
Reclassification | Reclassification Certain amounts in the 2015 consolidated financial statements have been reclassified to conform to the 2016 presentation. Reclassifications had no effect on prior year net income or stockholders' equity. |
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. |
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, is carried at cost, and is classified as a restricted security. At its discretion, the FHLB may declare cash or stock dividends on the stock which are reported as income. The Bank reviews this investment for impairment based on the ultimate recoverability of the cost basis in the FHLB stock. During the years ended December 31, 2016 and 2015, no impairment has been recognized. |
Loans | Loans The Bank's lending activities are conducted principally in Rhode Island. Loans purchased from third party originators are generally collateralized by properties in New England, primarily in Massachusetts. 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. Individually purchased one- to four-family loans are generally purchased at a premium, which is amortized into income 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 by a charge-off to bring the loan balance to the fair value of the collateral net of estimated selling costs. 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 of the allowance for loan losses 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, 2016. 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 lines of credit. Home equity loans and lines of credit may be underwritten with a loan to value ratio up to 80%. 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 real estate 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 up to a maximum SBA guarantee of $3.75 million per borrower and related entities. 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. Guaranteed portions of SBA loans totaled $25.9 million and $24.8 million at December 31, 2016 and 2015, respectively. Consumer—This segment includes unsecured and vehicle loans and repayment is dependent on the credit quality of the individual borrower. Economic trends determined by unemployment rates and other key economic indications are closely correlated to the credit quality of these loans. Specific component of the allowance for loan losses The specific component relates to loans that are classified as impaired. 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 original 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 accrual status after a period of satisfactory payment performance per the terms of the restructuring, generally six months of current payments. |
Loans Held for Sale | Loans Held for Sale One- to four-family residential mortgage loans originated and intended for sale in the secondary market are carried at fair value. The fair value includes the servicing value of the loans as management sells all loans held for sale servicing released. Gains and losses on loans held for sale are recorded in non-interest income as net gains on sale of loans and other mortgage banking income in the income statement. |
Derivatives | Derivatives Commitments to fund certain mortgage loans (interest rate locks) to be sold in the secondary market and forward loan commitments for the future delivery of mortgage loans to third party investors, including To Be Announced securities ("TBAs") and mandatory forward commitments, are accounted for as free-standing derivatives. These mortgage banking related derivatives are not designated in hedge relationships and are accounted for at fair value, with changes in fair value recorded in net gains on sales of loans and other mortgage banking income on the income statement. |
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 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. |
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 in the Consolidated Statements of Net Income. |
Bank-owned Life Insurance | Bank-owned Life Insurance Bank-owned life insurance policies on certain key executives are reflected in the Consolidated Balance Sheets at the amount that can be realized under the insurance contracts, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. 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. |
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. |
Deferred Compensation Supplemental Executive Retirement Plan | Deferred Compensation Supplemental Executive Retirement Plan The Bank maintains a non-qualified deferred compensation supplemental executive retirement plan ("DCSERP") with a senior executive. The DCSERP allows the executive to invest all or a portion of the deferred compensation in Corporation stock, provided that such stock will only be settled in Corporation stock. A Rabbi Trust holds the assets invested on behalf of the DCSERP. The Bank is required to make annual contributions of $72,000 each January thereafter until January, 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 DCSERP benefit in 10 approximately equal annual installments starting 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, other than Corporation stock, which shall be paid in Corporation stock. 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 DCSERP benefit in a lump sum no later than the first day of the second month after such separation from service. As of December 31, 2016, the executive was 80% vested in the SERP benefit. An additional 5% of his DCSERP 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 has the right to provide the Board of Directors of the Bank with investment directions for these investments. All earnings or losses on investments are the sole responsibility of the participant. The investments informally fund the DCSERP liability but remain assets of the Bank and are subject to the claims of general creditors of the Bank. |
Supplemental Retirement Agreements | Supplemental Retirement Agreements The Bank has entered into supplemental retirement agreements ("SERP") with seven executive and senior officers, which provide for payments upon attaining the retirement age specified in the agreements, generally 65-67. 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. |
Other Retirement Plans | Other Retirement Plans Employee 401(K) expense represents the amount of matching contributions. Supplemental retirement expense allocates benefits over the remaining service term. |
Employee Stock Ownership Plan | Employee Stock Ownership Plan The cost of shares issued to the ESOP, but not yet allocated to participants, is shown as a reduction of stockholders' equity. Compensation expense is based on the market price of shares as they are committed to be released to participant accounts. |
Stock-based Compensation | Stock-based Compensation Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the common stock at the date of grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on the straight-line basis over the requisite service period for the entire award. |
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, 2016 and 2015 which require accrual or disclosure. The Company records interest and penalties as part of income tax expense, if applicable. |
Earnings Per Common Share | Earnings Per Common Share Basic earnings per share represents income available to common stockholders divided by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income (loss) that would result from the assumed issuance. Unallocated ESOP shares are not deemed outstanding for the earnings per share calculation. |
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 stockholders' equity section of theconsolidated balance sheets, such items, along with net income/loss, are components of comprehensive income/loss. The Bank measures the pension plan assets and pension obligations on an annual basis and recognizes in the consolidated financial statements an asset or liability for the plan's funded status. |
Dividends | Dividends The Company and the Bank are regulated enterprises and their abilities to pay dividends are subject to regulatory review and restrictions. Certain regulatory and statutory restrictions exist regarding dividends, loans, and advances from the Bank to the Compnay. The FDIC and the Federal Reserve have the authority to use their enforcement powers to prohibit dividend payments if, in their opinion, the payment of dividends would constitute an unsafe or unsound practice. |
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. A significant portion of the Company's loan portfolio is concentrated among borrowers with collateral in Rhode Island and Massachusetts. The ability of residential real estate mortgage borrowers to honor their repayment commitments is generally dependent on the level of overall economic activity within the market area and real estate values. The ability of commercial borrowers to honor their repayment commitments is dependent on the general economy as well as the health of the real estate economic sector in the Bank's market area. |
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. |
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 Corporation 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, 2016, there is no significant difference in the comparability of the financial statements as a result of this extended transition period. In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers." The objective of this amendment is to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and IFRS. This update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are in the scope of other standards. In August 2015, the FASB issued ASU 2015-14 to defer for one year the effective date of the new revenue standard. The requirements are effective for annual periods and interim periods within fiscal years beginning after December 15, 2018. During 2016, the FASB issued further implementation guidance regarding revenue recognition. This additional guidance included clarification on certain principal versus agent considerations within the implementation of the guidance as well as clarification related to identifying performance obligations and licensing, assessing collectability, presenting sales taxes, measuring noncash consideration, and certain transition matters. The Corporation does not expect the adoption of this guidance will have a significant impact on the Corporation's consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10), which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The ASU requires equity instruments (except those accounted for under the equity method of accounting or that result in consolidations of the investee) to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure an equity investment that does not have a readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions. For public business entities, the standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. For all other entities, including emerging growth companies, the standard is effective for fiscal years beginning after December 15, 2018 and interim periods within fiscal periods after December 15, 2019. We do not expect a significant impact upon adoption on January 1, 2019. In February 2016, the FASB issued ASU 2016-02, which will require organizations that lease assets—referred to as "lessees"—to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Under the new guidance, a lessee will be required to recognize right to use assets and lease liabilities for leases with lease terms of more than 12 months. However, unlike current Generally Accepted Accounting Principles (GAAP)—which requires only capital leases to be recognized on the balance sheet—the new ASU will require both types of leases to be recognized on the balance sheet. The accounting by organizations that own the assets leased by the lessee—also known as lessor accounting—will remain largely unchanged from current GAAP. However, the ASU contains some targeted improvements that are intended to align, where necessary, lessor accounting with the lessee accounting model. The ASU on leases will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other organizations, including emerging growth companies, the ASU on leases will take effect for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020. We are currently evaluating the impact of adoption of this standard, including identifying contracts that are, or contain, leases, as the lease identification guidance in the new standard is different than the current standard. On March 30, 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-09, which is intended to improve the accounting for employee share-based payments. The ASU affects all organizations that issue share-based payment awards to their employees. The ASU, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, simplifies several aspects of the accounting for share-based payment award transactions, including: • The income tax consequences • Classification of awards as either equity or liabilities, and • Classification on the statement of cash flows. For public companies, the amendments in this ASU are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For private companies and emerging growth companies, the amendments are effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted for any organization in any interim or annual period. This standard will be effective for the Corporation for the year ended December 31, 2018. We do not anticipate a material impact but added volatility in the effective tax rate will be created as a result of adopting this standard as share-based awards were first granted during the first quarter of 2016. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses , that will significantly change how banks measure and recognize credit impairment for many financial assets from an incurred loss methodology to a current expected credit loss model. The current expected credit loss model will require companies to immediately recognize an estimate of credit losses expected to occur over the remaining life of the financial assets that are in the scope of the standard. The FASB also made targeted amendments to the current impairment model for available-for-sale debt securities. The ASU is effective for public business entities that are SEC filers, for annual and interim periods in fiscal years beginning after December 15, 2019, and for other companies, including emerging growth companies, for interim and annual periods in fiscal years beginning after December 15, 2020. All entities may early adopt the standard for annual and interim periods in fiscal years after December 15, 2018. The standard will be effective for the Corporation on January 1, 2020. We are currently evaluating the impact of adoption of this standard, including different methodologies that may be employed to estimate credit losses, such as loss rate methods, component loss methods, and qualitative factors, as well as additional data gathering that will be needed to adopt the standard. The standard will add new disclosures related to factors that influenced management's estimate, including current expected credit losses, the changes in those factors, and reasons for the changes as well as the method applied to revert to historical credit loss experience. |
LOANS (Tables)
LOANS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
LOANS | |
Summary of loan balances | December 31, 2016 2015 (In thousands) Residential real estate mortgage loans: 1 - 4 family $ $ Home equity loans and lines of credit ​ ​ ​ ​ ​ ​ ​ ​ Total residential real estate mortgage loans Commercial: Commercial real estate Commercial business Commercial construction SBA ​ ​ ​ ​ ​ ​ ​ ​ Total commercial loans Consumer ​ ​ ​ ​ ​ ​ ​ ​ Total loans Allowance for loan losses ) ) Net deferred loan costs ​ ​ ​ ​ ​ ​ ​ ​ Loans, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of activity in the allowance for loan losses and allocation of the allowance to loan segments | Year Ended December 31, 2016 Residential Home Commercial Commercial Commercial SBA Consumer Total (In thousands) Allowance for loan losses: Beginning balance $ $ $ $ $ $ $ $ Provisions (credit) for loan losses ) Loans charged-off ) ) — — — ) ) ) Recoveries — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ending balance $ $ $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2016 Residential Home Commercial Commercial Commercial SBA Consumer Total (In thousands) Allowance for impaired loans $ $ $ — $ — $ — $ — $ $ Allowance for non-impaired loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total allowance for loan losses $ $ $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Impaired loans $ $ $ $ — $ — $ $ $ Non-impaired loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans $ $ $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2015 Residential Home Commercial Commercial Commercial SBA Consumer Total (In thousands) Allowance for loan losses: Beginning balance $ $ $ $ $ $ $ $ Provisions (credit) for loan losses ) ) Loans charged-off ) ) — — — ) ) ) Recoveries — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ending balance $ $ $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2015 Residential Home Commercial Commercial Commercial SBA Consumer Total (In thousands) Allowance for impaired loans $ $ $ — $ — $ — $ — $ $ Allowance for non-impaired loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total allowance for loan losses $ $ $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Impaired loans $ $ $ $ — $ — $ $ $ Non-impaired loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans $ $ $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of past due and non-accrual loans | 30 - 59 Days 60 - 89 Days 90 Days or Total Past Due 90 Loans on (In thousands) December 31, 2016 Residential real estate: Residential 1 - 4 family $ $ $ $ $ — $ Home equity loans and lines of credit — Commercial real estate — — — Commercial business — — — — — — Commercial construction — — — — — — SBA — — Consumer — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2015 Residential real estate: Residential 1 - 4 family $ $ $ $ $ — $ Home equity loans and lines of credit — Commercial real estate — — — Commercial — — — — — — Commercial construction — — — — — — SBA — — — Consumer — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of information pertaining to impaired loans | December 31, 2016 December 31, 2015 Recorded Unpaid Related Recorded Unpaid Related (Dollars in thousands) Impaired loans without a valuation allowance: Residential real estate: Residential 1 - 4 family $ $ $ — $ $ $ — Home equity loans and lines of credit — — Commercial real estate — — SBA — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ — $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Impaired loans with a valuation allowance: Residential real estate: Residential 1 - 4 family $ $ $ $ $ $ Home equity loans and lines of credit Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, 2016 Year ended December 31, 2015 Average Interest Interest Income Average Interest Interest Income (Dollars in thousands) Residential real estate: Residential 1 - 4 family $ $ $ $ $ $ Home equity loans and lines of credit Commercial real estate SBA Consumer — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of troubled debt restructurings | Number of Pre-Modification Post-Modification (In thousands) Year Ended December 31, 2016 Residential 1 - 4 family $ $ Home equity and lines of credit Commercial real estate SBA Year Ended December 31, 2015 Residential 1 - 4 family $ $ Home equity and lines of credit Commercial real estate SBA |
Schedule of troubled debt restructurings that subsequently defaulted within 12 months of restructuring | Number of Recorded (In thousands) Year Ended December 31, 2016 Residential 1 - 4 family $ Home equity Year Ended December 31, 2015 Residential 1 - 4 family $ Home equity SBA |
Schedule of the Bank's commercial loans by risk rating | December 31, 2016 Commercial Commercial Commercial SBA Total (In thousands) Pass $ $ $ $ $ Loans rated 6 — — Loans rated 7 — — Loans rated 8 — — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2015 Commercial Commercial Commercial SBA Total (In thousands) Pass $ $ $ $ $ Loans rated 6 — — Loans rated 7 — — Loans rated 8 — — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
PREMISES AND EQUIPMENT (Tables)
PREMISES AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
PREMISES AND EQUIPMENT | |
Summary of the cost and accumulated depreciation and amortization of premises and equipment | December 31, 2016 2015 (In thousands) Land $ $ Buildings and improvements Furniture, fixtures and equipment Leasehold improvements ​ ​ ​ ​ ​ ​ ​ ​ Less accumulated depreciation and amortization ) ) ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of future minimum lease commitments | Pursuant to terms of the lease agreements in effect at December 31, 2016, future minimum lease commitments are as follows (in thousands): 2017 $ 2018 2019 2020 2021 Thereafter — ​ ​ ​ ​ ​ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
DEPOSITS | |
Summary of deposit balances, by type | December 31, 2016 2015 (In thousands) Non-interest-bearing demand deposit accounts $ $ Savings accounts and interest-bearing DDA Money market accounts Club accounts ​ ​ ​ ​ ​ ​ ​ ​ Total non-certificate accounts ​ ​ ​ ​ ​ ​ ​ ​ Term certificates $250,000 or greater Term certificates less than $250,000 ​ ​ ​ ​ ​ ​ ​ ​ Total certificate accounts ​ ​ ​ ​ ​ ​ ​ ​ Total deposits $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of certificate accounts, by maturity | December 31, 2016 December 31, 2015 Maturing Periods Amount Weighted Amount Weighted (Dollars in thousands) Within 1 year $ % $ % Within 2 years Within 3 years Within 4 years Within 5 years ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ % $ % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
EMPLOYEE BENEFITS (Tables)
EMPLOYEE BENEFITS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
EMPLOYEE BENEFITS | |
Schedule of information pertaining to the activity in the Plan | Years ended 2016 2015 (In thousands) Change in benefit obligation: Benefit obligation at beginning of year $ $ Interest cost Actuarial (gain) loss ) Benefits paid ) ) ​ ​ ​ ​ ​ ​ ​ ​ Projected benefit obligation at end of year ​ ​ ​ ​ ​ ​ ​ ​ Change in plan assets: Fair value of plan assets at beginning of year Actual return on plan assets Employer contribution — Benefits paid ) ) ​ ​ ​ ​ ​ ​ ​ ​ Fair value of plan assets at end of year ​ ​ ​ ​ ​ ​ ​ ​ Unfunded status at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated benefit obligation at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of components of net periodic pension cost | Years Ended 2016 2015 (In thousands) Interest cost $ $ Expected return on plan assets ) ) Amortization of actuarial loss Settlement cost — ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of assumptions used to determine net periodic pension cost | Years Ended 2016 2015 Discount rate % % Expected return on plan assets % % |
Schedule of the fair values of major categories of pension plan assets | December 31, 2016 2015 (In thousands) Equity securities: Domestic mutual funds $ $ Fixed income International mutual funds International exchange traded funds Cash and cash equivalents ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of estimated future benefit payments | Years Ending December 31, Amount (In thousands) 2017 2018 2019 2020 2021 Thereafter |
Schedule of shares held by the ESOP | December 31, Allocated Distributions/sales ) Committed to be allocated — Unallocated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
OTHER STOCK-BASED COMPENSATION
OTHER STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
OTHER STOCK-BASED COMPENSATION | |
Schedule of assumptions used to determine fair value of options | 2016 Risk-free interest rate % Expected term 8 years Expected stock price volatility % Dividend yield % |
Summary of stock option activity | A summary of the stock option activity in the EIP plan for 2016 follows: Shares Weighted Weighted Aggregate Outstanding at beginning of year — $ — — $ — Granted — Exercised — — — — Forfeited or expired — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fully vested and expected to vest $ $ |
Summary of changes in nonvested restricted stock | Nonvested Shares Shares Weighted-Average Nonvested at January 1, 2016 — $ — Granted Vested — — Forfeited — — ​ ​ ​ ​ ​ ​ ​ ​ Nonvested at December 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
OFF-BALANCE SHEET ACTIVITIES 33
OFF-BALANCE SHEET ACTIVITIES AND MORTGAGE BANKING (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
OFF-BALANCE SHEET ACTIVITIES AND MORTGAGE BANKING | |
Schedule of financial instruments outstanding whose contract amounts represent credit risk | December 31, 2016 2015 (In thousands) Commitments to originate loans for portfolio $ $ Commitments to originate loans to be sold Commitments to purchase loans from third parties Unfunded commitments under home equity lines of credit Unfunded commitments under commercial lines of credit Unfunded commitments under SBA lines of credit Unfunded commitments under overdraft lines of credit Unadvanced funds on construction loans |
Schedule of the fair values of derivative loan commitments and forward loan sale commitments | Assets Liabilities Balance Fair Balance Fair (In thousands) December 31, 2016 Derivative loan commitments: Commitments hedged with best efforts Other assets $ N/A $ — Commitments hedged with TBA Other assets N/A — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivative commitments N/A — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Forward loan sale commitments Best efforts contracts hedging: Commitments N/A — Other liabilities Loans held for sale Other assets N/A — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total best efforts contracts Mandatory delivery contracts N/A — Other liabilities TBA securities N/A — Other liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total forward loan sale commitments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivative loan and forward loan sale commitments $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets Liabilities Balance Fair Balance Fair (In thousands) December 31, 2015 Derivative loan commitments: Commitments hedged with best efforts Other assets $ N/A $ — Commitments hedged with TBA Other assets N/A — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivative commitments N/A — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Forward loan sale commitments: Best efforts contracts hedging: Commitments N/A — Other liabilities Loans held for sale N/A — Other liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total best efforts contracts — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mandatory delivery contracts Other assets N/A — TBA securities N/A — Other liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total forward loan sale commitments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivative loan and forward loan sale commitments $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of gains and losses on derivative instruments and forward commitments to sell loans not designated as hedging instruments | Years Ended Location of 2016 2015 (In thousands) Derivative loan commitments—best efforts Net gain on sales of loans and other mortgage banking income $ $ Derivative loan commitments—TBA Net gain on sales of loans and other mortgage banking income Best efforts contracts Net gain on sales of loans and other mortgage banking income ) Mandatory delivery contracts Net gain on sales of loans and other mortgage banking income ) TBA securities Net gain on sales of loans and other mortgage banking income ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
LOANS TO RELATED PARTIES (Table
LOANS TO RELATED PARTIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
LOANS TO RELATED PARTIES | |
Schedule of loans to directors, executive officers, and their associates | Years Ended 2016 2015 (In thousands) Balance at beginning of year $ $ Principal additions Principal payments ) ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
INCOME TAXES | |
Schedule of current and deferred income taxes | Years Ended 2016 2015 (In thousands) Current tax expense: Federal $ $ State ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax (benefit) expense: Federal State ) ​ ​ ​ ​ ​ ​ ​ ​ ) ​ ​ ​ ​ ​ ​ ​ ​ Total income tax expense $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Reconciliation of difference between statutory federal income tax expense and the actual tax expense | Years Ended 2016 2015 (In thousands) Statutory tax expense at 34% $ $ Increase (decrease) resulting from: State taxes, net of federal tax benefit Other, net ) ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of deferred taxes | December 31, 2016 2015 (In thousands) Deferred tax assets: Allowance for loan losses $ $ Employee benefits Non-accrual interest Defined benefit pension plan Charitable contribution carryforwards Organization costs Impairment on real estate held for sale — Other, net ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities: Premises and equipment, net ) ) Net deferred loan costs ) ) Mortgage derivatives ) ) Other, net ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax asset, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of changes in deferred taxes | Years Ended 2016 2015 (In thousands) Balance at beginning of year $ $ Deferred tax (expense) benefit ) Unrealized gain/loss pertaining to defined benefit pension plan ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
EARNINGS PER COMMON SHARE | |
Schedule of earnings per share computation | 2016 2015 (in thousands) Net income applicable to common stock $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding Less: Average unallocated ESOP shares ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of common shares outstanding—basic Dilutive impact of stock options — — Dilutive impact of restricted stock — ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of common shares outstanding—diluted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share—basic $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share—diluted $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
MINIMUM REGULATORY CAPITAL RE37
MINIMUM REGULATORY CAPITAL REQUIREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
MINIMUM REGULATORY CAPITAL REQUIREMENTS | |
Schedule of the Bank's required minimum and actual capital amounts | Actual Minimum Capital Minimum Capital Minimum Capital (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio December 31, 2016 Total Capital (to risk weighed assets) $ % $ % $ % $ % Tier 1 Capital (to risk weighed assets) Common Equity Tier 1 (to risk weighed assets) Tier 1 Leverage Capital (to average assets) N/A N/A December 31, 2015 Total Capital (to risk weighed assets) $ % $ % N/A N/A $ % Tier 1 Capital (to risk weighed assets) N/A N/A Common Equity Tier 1 (to risk weighed assets) N/A N/A Tier 1 Leverage Capital (to average assets) N/A N/A |
FAIR VALUES OF ASSETS AND LIA38
FAIR VALUES OF ASSETS AND LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
FAIR VALUES OF ASSETS AND LIABILITIES | |
Schedule of changes in Level 3 assets and liabilities measured on a recurring basis | 2016 2015 Balance at beginning of year Gains (loss) arising during the period — Gains (loss) on new commitments during the period Reclassifications of realized gains on settled commitments ) ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at end of year $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of the fair value hierarchy used to determine each adjustment and the carrying value of the related individual assets | December 31, 2016 Year Ended Level 1 Level 2 Level 3 Total Losses (In thousands) Foreclosed real estate $ — $ — $ $ — Impaired loans — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ — $ — $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2015 Year Ended Level 1 Level 2 Level 3 Total Losses (In thousands) Foreclosed real estate $ — $ — $ $ Impaired loans — — ) Real estate held for sale — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ — $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of aggregate fair value, contractual balance and gain or loss under fair value option for loans held for sale | 2016 2015 (in thousands) Aggregate fair value $ $ Contractual balance Gain |
Summary of carrying values, estimated fair values and placement in the fair value hierarchy of the Corporation's financial instruments | December 31, 2016 Fair Value Measurements Carrying Estimated Level 1 Level 2 Level 3 (In thousands) Financial assets: Cash and cash equivalent $ $ $ $ — $ — Loans, net of allowance for loan losses — — Loans held for sale — — FHLB stock N/A N/A N/A N/A Accrued interest receivable — — Financial liabilities: Non-certificate accounts — — Certificate accounts — — Borrowed funds — — Accrued interest payable — — December 31, 2015 Fair Value Measurements Carrying Estimated Level 1 Level 2 Level 3 (In thousands) Financial assets: Cash and cash equivalents $ $ $ $ — $ — Certificates of deposit — — Loans, net of allowance for loan losses — — Loan held for sale — — FHLB stock N/A N/A N/A N/A Accrued interest receivable — — Financial liabilities: Non-certificate accounts — — Certificate accounts — — Borrowed funds — — Accrued interest payable — — |
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 Asset Valuation Unobservable Range (In thousands) December 31, 2016 Derivative loan commitments $ Investor pricing Pull-through rate 75.1% - 100% Forward loan sale commitments: Best efforts contracts—hedging commitments ) Investor pricing Pull-through rate 82.5% - 100% Best efforts contracts—hedging loans held for sale Investor pricing Pull-through rate 82.5% - 100% December 31, 2015 Derivative loan commitments $ Investor pricing Pull-through rate 79.6% - 100% Forward loan sale commitments: Best efforts contracts—hedging commitments ) Investor pricing Pull-through rate 82.5% - 100% Best efforts contracts—hedging loans held for sale ) Investor pricing Pull-through rate 82.5% - 100% |
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 Unobservable Inputs Range (In thousands) December 31, 2016 Foreclosed real estate $ Discounted appraisals Collateral discounts 5 - 30% Impaired loans Discounted appraisals Collateral discounts 5 - 30% December 31, 2015 Foreclosed real estate $ Discounted appraisals Collateral discounts 5 - 30% Impaired loans Discounted appraisals Collateral discounts 5 - 30% |
PARENT COMPANY FINANCIAL STAT39
PARENT COMPANY FINANCIAL STATEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
PARENT COMPANY FINANCIAL STATEMENTS | |
Schedule of Balance Sheets | BALANCE SHEETS December 31 December 31 (in thousands) Assets Cash $ $ Certificates of Deposit — Investments in subsidiaries Note receivable from subsidiary Other assets ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and stockholders' equity Other liabilities $ $ Stockholders' equity ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' equity $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of Net Income (Loss) | STATEMENTS OF NET INCOME (LOSS) Year-ended Year-ended 2016 2015 (in thousands) Income Interest income $ $ Expenses Other expenses ​ ​ ​ ​ ​ ​ ​ ​ Loss before income tax benefit and equity in undistributed income of subsidiaries ) ) Income tax benefit ) ) ​ ​ ​ ​ ​ ​ ​ ​ Loss of parent company ) ) ​ ​ ​ ​ ​ ​ ​ ​ Equity in undistributed income of subsidiaries ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of Cash Flows | STATEMENTS OF CASH FLOWS Year-ended Year-ended 2016 2015 (in thousands) Cash flows from operating activities: Net income $ $ Adjustments to reconcile net loss to cash used in operating activities Change in other assets ) Change in other liabilities ) Equity in undistributed income of subsidiaries ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) operating activities ) Cash flows used in investing activities: Purchase of and increase in certificates of deposit ) ) Maturities of certificates of deposit — Change in note receivable from subsidiary, net ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) investing activities ) Cash flows used in financing activities: Repurchase of common stock ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net cash used in financing activities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Net decrease in cash and cash equivalents ) ) Cash and cash equivalents at the beginning of the year ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents at the end of the year $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
SUMMARY OF SIGNIFICANT ACCOUN40
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - IPO and FHLB Stock (Details) - USD ($) | Jan. 14, 2014 | Dec. 31, 2016 | Dec. 31, 2015 |
Initial Public Offering ("IPO") | |||
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 | $ 46,300,000 | ||
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 | ||
Contribution to Coastway Cares Charitable Foundation II | $ 1,500,000 | ||
Total contribution to Coastway Cares Charitable Foundation II as a percentage of gross proceeds of offering | 3.15% | ||
Total number of shares of common stock outstanding upon completion of the IPO | 4,949,179 | ||
Number of shares of stock issued in the IPO that were acquired by ESOP | 395,934 | ||
Liquidation amount | $ 27,500,000 | ||
Federal Home Loan Bank Stock | |||
Impairment of FHLB stock | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN41
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Loans | ||
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 | |
Period of satisfactory payments to return loan from TDR to accrual status | 6 months | |
Home equity loans and lines of credit | ||
Loans | ||
Loan-to-value ratio | 80.00% | |
Commercial loans | ||
Loans | ||
Loans provided as a percentage of projected costs | 50.00% | |
Commercial loans | SBA | ||
Loans | ||
Guaranteed portions | $ 25,900 | $ 24,800 |
Commercial loans | SBA | Maximum | ||
Loans | ||
Percentage of principal and accrued interest that may qualify for guarantees | 85.00% | |
Amount of principal and accrued interest that may qualify for guarantees | $ 3,750 |
SUMMARY OF SIGNIFICANT ACCOUN42
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Real Estate (Details) | 12 Months Ended |
Dec. 31, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Period within which transfer of the asset is expected to qualify for recognition of sale | 1 year |
SUMMARY OF SIGNIFICANT ACCOUN43
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Supplemental Executive Retirement Plan (Details) - Supplemental Employee Retirement Plan | 12 Months Ended |
Dec. 31, 2016USD ($)ageitem | |
DCSERP | |
Supplemental Executive Retirement Plan | |
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 | item | 10 |
SERP | Minimum | |
Supplemental Executive Retirement Plan | |
Age of individual when benefits shall be payable in equal annual installments | 65 |
SERP | Maximum | |
Supplemental Executive Retirement Plan | |
Age of individual when benefits shall be payable in equal annual installments | 67 |
Executive Officers | DCSERP | |
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 | 80.00% |
Additional vesting percentage as of each December 31 until 100% vesting | 5.00% |
Threshold vesting percentage | 100.00% |
Executive Officers | SERP | |
Supplemental Executive Retirement Plan | |
Number of employees with whom the entity entered into agreements (in employees) | item | 7 |
RESTRICTIONS ON CASH AND AMOU44
RESTRICTIONS ON CASH AND AMOUNTS DUE FROM BANKS (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
RESTRICTIONS ON CASH AND AMOUNTS DUE FROM BANKS | ||
Reserve balance | $ 1.9 | $ 2.6 |
CERTIFICATES OF DEPOSIT (Detail
CERTIFICATES OF DEPOSIT (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2016 | |
Certificates of deposit | $ 6,074 | $ 0 |
December 2,016 | ||
Certificates of deposit | $ 3,000 | |
Certificate of deposit interest rate (as a percent) | 0.70% | |
April 2,016 | ||
Certificates of deposit | $ 3,100 | |
Certificate of deposit interest rate (as a percent) | 0.65% |
LOANS - Summary of Loan Balance
LOANS - Summary of Loan Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Loans | |||
Total loans | $ 523,873 | $ 465,556 | |
Allowance for loan losses | (2,493) | (2,194) | $ (1,942) |
Net deferred loan costs | 3,835 | 3,661 | |
Loans, net | 525,215 | 467,023 | |
Residential 1-4 family | |||
Loans | |||
Allowance for loan losses | (1,009) | (863) | (654) |
Home equity loans and lines of credit | |||
Loans | |||
Allowance for loan losses | (541) | (525) | (584) |
Commercial real estate | |||
Loans | |||
Allowance for loan losses | (596) | (503) | (400) |
Commercial business | |||
Loans | |||
Allowance for loan losses | (60) | (39) | (28) |
Commercial construction | |||
Loans | |||
Allowance for loan losses | (51) | (21) | (30) |
SBA | |||
Loans | |||
Allowance for loan losses | (228) | (234) | (236) |
Consumer | |||
Loans | |||
Total loans | 1,165 | 1,252 | |
Allowance for loan losses | (8) | (9) | $ (10) |
Residential real estate mortgage loans | |||
Loans | |||
Total loans | 319,560 | 285,658 | |
Residential real estate mortgage loans | Residential 1-4 family | |||
Loans | |||
Total loans | 243,385 | 208,777 | |
Current balance of the loans purchased | 67,500 | 64,100 | |
Loans purchased from third party originators during the year | 17,600 | 56,700 | |
Cost of loans purchased from third parties during the year | 17,800 | 57,400 | |
Residential real estate mortgage loans | Home equity loans and lines of credit | |||
Loans | |||
Total loans | 76,175 | 76,881 | |
Commercial loans | |||
Loans | |||
Total loans | 203,148 | 178,646 | |
Commercial loans | Commercial real estate | |||
Loans | |||
Total loans | 138,946 | 125,782 | |
Commercial loans | Commercial business | |||
Loans | |||
Total loans | 13,308 | 8,918 | |
Commercial loans | Commercial construction | |||
Loans | |||
Total loans | 10,946 | 4,729 | |
Commercial loans | SBA | |||
Loans | |||
Total loans | 39,948 | 39,217 | |
Guaranteed portions | $ 25,900 | $ 24,800 |
LOANS - Allowance for Loan Loss
LOANS - Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in the allowance for loan losses | ||||
Allowance at beginning of the period | $ 2,194 | $ 1,942 | ||
Provision (credit) for loan losses | 475 | 496 | ||
Loans charged-off | (216) | (300) | ||
Recoveries | 40 | 56 | ||
Allowance at the end of the period | 2,493 | 2,194 | ||
Allowance for loan losses | ||||
Allowance for impaired loans | $ 53 | $ 63 | ||
Allowance for non-impaired loans | 2,440 | 2,131 | ||
Total | 2,194 | 1,942 | 2,493 | 2,194 |
Loan balances | ||||
Impaired loans | 12,970 | 7,704 | ||
Non-impaired loans | 510,903 | 457,852 | ||
Total Loans | 523,873 | 465,556 | ||
Residential 1-4 family | ||||
Changes in the allowance for loan losses | ||||
Allowance at beginning of the period | 863 | 654 | ||
Provision (credit) for loan losses | 236 | 337 | ||
Loans charged-off | (95) | (139) | ||
Recoveries | 5 | 11 | ||
Allowance at the end of the period | 1,009 | 863 | ||
Allowance for loan losses | ||||
Allowance for impaired loans | 19 | 43 | ||
Allowance for non-impaired loans | 990 | 820 | ||
Total | 863 | 654 | 1,009 | 863 |
Loan balances | ||||
Impaired loans | 5,628 | 4,224 | ||
Non-impaired loans | 237,757 | 204,553 | ||
Total Loans | 243,385 | 208,777 | ||
Home equity loans and lines of credit | ||||
Changes in the allowance for loan losses | ||||
Allowance at beginning of the period | 525 | 584 | ||
Provision (credit) for loan losses | 83 | 53 | ||
Loans charged-off | (78) | (128) | ||
Recoveries | 11 | 16 | ||
Allowance at the end of the period | 541 | 525 | ||
Allowance for loan losses | ||||
Allowance for impaired loans | 31 | 17 | ||
Allowance for non-impaired loans | 510 | 508 | ||
Total | 525 | 584 | 541 | 525 |
Loan balances | ||||
Impaired loans | 1,349 | 1,055 | ||
Non-impaired loans | 74,826 | 75,826 | ||
Total Loans | 76,175 | 76,881 | ||
Commercial real estate | ||||
Changes in the allowance for loan losses | ||||
Allowance at beginning of the period | 503 | 400 | ||
Provision (credit) for loan losses | 93 | 103 | ||
Allowance at the end of the period | 596 | 503 | ||
Allowance for loan losses | ||||
Allowance for non-impaired loans | 596 | 503 | ||
Total | 503 | 400 | 596 | 503 |
Loan balances | ||||
Impaired loans | 4,487 | 398 | ||
Non-impaired loans | 134,459 | 125,384 | ||
Total Loans | 138,946 | 125,782 | ||
Commercial business | ||||
Changes in the allowance for loan losses | ||||
Allowance at beginning of the period | 39 | 28 | ||
Provision (credit) for loan losses | 21 | 11 | ||
Allowance at the end of the period | 60 | 39 | ||
Allowance for loan losses | ||||
Allowance for non-impaired loans | 60 | 39 | ||
Total | 39 | 28 | 60 | 39 |
Loan balances | ||||
Non-impaired loans | 13,308 | 8,918 | ||
Total Loans | 13,308 | 8,918 | ||
Commercial construction | ||||
Changes in the allowance for loan losses | ||||
Allowance at beginning of the period | 21 | 30 | ||
Provision (credit) for loan losses | 30 | (9) | ||
Allowance at the end of the period | 51 | 21 | ||
Allowance for loan losses | ||||
Allowance for non-impaired loans | 51 | 21 | ||
Total | 21 | 30 | 51 | 21 |
Loan balances | ||||
Non-impaired loans | 10,946 | 4,729 | ||
Total Loans | 10,946 | 4,729 | ||
SBA | ||||
Changes in the allowance for loan losses | ||||
Allowance at beginning of the period | 234 | 236 | ||
Provision (credit) for loan losses | 27 | 9 | ||
Loans charged-off | (42) | (27) | ||
Recoveries | 9 | 16 | ||
Allowance at the end of the period | 228 | 234 | ||
Allowance for loan losses | ||||
Allowance for non-impaired loans | 228 | 234 | ||
Total | 234 | 236 | 228 | 234 |
Loan balances | ||||
Impaired loans | 1,493 | 2,013 | ||
Non-impaired loans | 38,455 | 37,204 | ||
Total Loans | 39,948 | 39,217 | ||
Consumer | ||||
Changes in the allowance for loan losses | ||||
Allowance at beginning of the period | 9 | 10 | ||
Provision (credit) for loan losses | (15) | (8) | ||
Loans charged-off | (1) | (6) | ||
Recoveries | 15 | 13 | ||
Allowance at the end of the period | 8 | 9 | ||
Allowance for loan losses | ||||
Allowance for impaired loans | 3 | 3 | ||
Allowance for non-impaired loans | 5 | 6 | ||
Total | $ 9 | $ 10 | 8 | 9 |
Loan balances | ||||
Impaired loans | 13 | 14 | ||
Non-impaired loans | 1,152 | 1,238 | ||
Total Loans | $ 1,165 | $ 1,252 |
LOANS - Past Due and Non-Accrua
LOANS - Past Due and Non-Accrual Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Past Due Loans | ||
Total Past Due | $ 3,395 | $ 4,516 |
Loans on Non-accrual | 4,653 | 4,240 |
Residential 1-4 family | ||
Past Due Loans | ||
Total Past Due | 1,950 | 2,168 |
Loans on Non-accrual | 3,662 | 3,068 |
Home equity loans and lines of credit | ||
Past Due Loans | ||
Total Past Due | 1,147 | 1,519 |
Loans on Non-accrual | 735 | 466 |
Commercial real estate | ||
Past Due Loans | ||
Total Past Due | 130 | 239 |
Loans on Non-accrual | 238 | 239 |
SBA | ||
Past Due Loans | ||
Total Past Due | 166 | 467 |
Loans on Non-accrual | 18 | 467 |
Consumer | ||
Past Due Loans | ||
Total Past Due | 2 | 123 |
30 to 59 Days Past Due | ||
Past Due Loans | ||
Total Past Due | 736 | 2,529 |
30 to 59 Days Past Due | Residential 1-4 family | ||
Past Due Loans | ||
Total Past Due | 625 | 1,156 |
30 to 59 Days Past Due | Home equity loans and lines of credit | ||
Past Due Loans | ||
Total Past Due | 109 | 1,250 |
30 to 59 Days Past Due | Consumer | ||
Past Due Loans | ||
Total Past Due | 2 | 123 |
60 to 89 Days Past Due | ||
Past Due Loans | ||
Total Past Due | 1,282 | 881 |
60 to 89 Days Past Due | Residential 1-4 family | ||
Past Due Loans | ||
Total Past Due | 587 | 642 |
60 to 89 Days Past Due | Home equity loans and lines of credit | ||
Past Due Loans | ||
Total Past Due | 547 | 239 |
60 to 89 Days Past Due | SBA | ||
Past Due Loans | ||
Total Past Due | 148 | |
90 Days or more Past Due | ||
Past Due Loans | ||
Total Past Due | 1,377 | 1,106 |
90 Days or more Past Due | Residential 1-4 family | ||
Past Due Loans | ||
Total Past Due | 738 | 370 |
90 Days or more Past Due | Home equity loans and lines of credit | ||
Past Due Loans | ||
Total Past Due | 491 | 30 |
90 Days or more Past Due | Commercial real estate | ||
Past Due Loans | ||
Total Past Due | 130 | 239 |
90 Days or more Past Due | SBA | ||
Past Due Loans | ||
Total Past Due | $ 18 | $ 467 |
LOANS - Impaired Loans (Details
LOANS - Impaired Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Recorded investment in impaired loans and the related specific allowance allocated | ||
Recorded investment with no allowance | $ 12,604 | $ 6,532 |
Unpaid principal balance, with no related allowance recorded | 12,992 | 6,723 |
Recorded investment with allowance | 366 | 1,172 |
Unpaid principal balance, with an allowance recorded | 366 | 1,214 |
Allowance for impaired loans | 53 | 63 |
Average recorded investment | 10,147 | 8,447 |
Interest income recognized | 412 | 340 |
Interest Income Recognized on Cash Basis | 166 | 137 |
Impaired loans | 12,970 | 7,704 |
Residential 1-4 family | ||
Recorded investment in impaired loans and the related specific allowance allocated | ||
Recorded investment with no allowance | 5,493 | 3,287 |
Unpaid principal balance, with no related allowance recorded | 5,843 | 3,459 |
Recorded investment with allowance | 135 | 937 |
Unpaid principal balance, with an allowance recorded | 135 | 999 |
Allowance for impaired loans | 19 | 43 |
Average recorded investment | 5,197 | 5,482 |
Interest income recognized | 229 | 156 |
Interest Income Recognized on Cash Basis | 140 | 110 |
Impaired loans | 5,628 | 4,224 |
Home equity loans and lines of credit | ||
Recorded investment in impaired loans and the related specific allowance allocated | ||
Recorded investment with no allowance | 1,131 | 834 |
Unpaid principal balance, with no related allowance recorded | 1,151 | 834 |
Recorded investment with allowance | 218 | 221 |
Unpaid principal balance, with an allowance recorded | 218 | 201 |
Allowance for impaired loans | 31 | 17 |
Average recorded investment | 1,250 | 1,015 |
Interest income recognized | 52 | 49 |
Interest Income Recognized on Cash Basis | 23 | 18 |
Impaired loans | 1,349 | 1,055 |
Commercial real estate | ||
Recorded investment in impaired loans and the related specific allowance allocated | ||
Recorded investment with no allowance | 4,487 | 398 |
Unpaid principal balance, with no related allowance recorded | 4,487 | 398 |
Average recorded investment | 1,662 | 149 |
Interest income recognized | 14 | 7 |
Interest Income Recognized on Cash Basis | 2 | 7 |
Impaired loans | 4,487 | 398 |
SBA | ||
Recorded investment in impaired loans and the related specific allowance allocated | ||
Recorded investment with no allowance | 1,493 | 2,013 |
Unpaid principal balance, with no related allowance recorded | 1,511 | 2,032 |
Average recorded investment | 2,025 | 1,783 |
Interest income recognized | 117 | 128 |
Interest Income Recognized on Cash Basis | 1 | 2 |
Impaired loans | 1,493 | 2,013 |
Guaranteed portions of impaired loans | 1,200 | 1,700 |
Consumer | ||
Recorded investment in impaired loans and the related specific allowance allocated | ||
Recorded investment with allowance | 13 | 14 |
Unpaid principal balance, with an allowance recorded | 13 | 14 |
Allowance for impaired loans | 3 | 3 |
Average recorded investment | 13 | 18 |
Impaired loans | $ 13 | $ 14 |
LOANS - Troubled Debt Restructu
LOANS - Troubled Debt Restructuring (Details) | 12 Months Ended | |
Dec. 31, 2016USD ($)contract | Dec. 31, 2015USD ($)contract | |
Troubled Debt Restructurings (TDRs) | ||
Impact on allowance for loan losses | $ 19,000 | $ 2,300 |
Charge-offs, troubled debt restructurings | 0 | 0 |
Total TDR loans | 10,900,000 | 6,600,000 |
Troubled debt restructurings reserves | 53,000 | $ 56,000 |
Period of current payments after which loans are returned to accrual status after a period of satisfactory payment performance | 6 months | |
Accrual status | ||
Troubled Debt Restructurings (TDRs) | ||
Total TDR loans | 8,300,000 | $ 3,500,000 |
Default status | ||
Troubled Debt Restructurings (TDRs) | ||
Charge-offs, troubled debt restructurings | 0 | 16,000 |
TDR recorded investment reserves | $ 2,000 | $ 20,000 |
Loans Qualifying For Multiple Modifications | Accrual status | ||
Troubled Debt Restructurings (TDRs) | ||
Number of contracts restructured | contract | 4 | 7 |
Total TDR loans | $ 4,100,000 | $ 845,000 |
Residential 1-4 family | ||
Troubled Debt Restructurings (TDRs) | ||
Number of contracts restructured | contract | 2 | 3 |
Pre-modification outstanding recorded investment | $ 349,000 | $ 799,000 |
Post-modification outstanding recorded investment | $ 349,000 | $ 788,000 |
Residential 1-4 family | Default status | ||
Troubled debt restructurings that subsequently defaulted within 12 months of restructuring | ||
Number of TDR's that defaulted (in loans) | contract | 1 | 4 |
Recorded investment | $ 300,000 | $ 955,000 |
Home equity loans and lines of credit | ||
Troubled Debt Restructurings (TDRs) | ||
Number of contracts restructured | contract | 5 | 6 |
Pre-modification outstanding recorded investment | $ 351,000 | $ 368,000 |
Post-modification outstanding recorded investment | $ 351,000 | $ 368,000 |
Home equity loans and lines of credit | Default status | ||
Troubled debt restructurings that subsequently defaulted within 12 months of restructuring | ||
Number of TDR's that defaulted (in loans) | contract | 2 | 2 |
Recorded investment | $ 265,000 | $ 45,000 |
Commercial real estate | ||
Troubled Debt Restructurings (TDRs) | ||
Number of contracts restructured | contract | 2 | 2 |
Pre-modification outstanding recorded investment | $ 4,108,000 | $ 268,000 |
Post-modification outstanding recorded investment | $ 4,108,000 | $ 268,000 |
SBA | ||
Troubled Debt Restructurings (TDRs) | ||
Number of contracts restructured | contract | 1 | 2 |
Pre-modification outstanding recorded investment | $ 50,000 | $ 455,000 |
Post-modification outstanding recorded investment | $ 50,000 | $ 455,000 |
SBA | Default status | ||
Troubled debt restructurings that subsequently defaulted within 12 months of restructuring | ||
Number of TDR's that defaulted (in loans) | contract | 1 | |
Recorded investment | $ 9,000 |
LOANS - Credit Quality (Details
LOANS - Credit Quality (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Credit Quality Indicators | ||
Value of commercial and SBA loan considered for risk review | $ 250,000 | |
Total loans | 523,873,000 | $ 465,556,000 |
Commercial loans | ||
Credit Quality Indicators | ||
Total loans | 203,148,000 | 178,646,000 |
Commercial loans | Pass | ||
Credit Quality Indicators | ||
Total loans | 195,344,000 | 173,657,000 |
Commercial loans | Loans rated 6 | ||
Credit Quality Indicators | ||
Total loans | 2,004,000 | 1,325,000 |
Commercial loans | Loans rated 7 | ||
Credit Quality Indicators | ||
Total loans | 5,800,000 | 3,664,000 |
Commercial loans | Commercial real estate | ||
Credit Quality Indicators | ||
Total loans | 138,946,000 | 125,782,000 |
Commercial loans | Commercial real estate | Pass | ||
Credit Quality Indicators | ||
Total loans | 133,660,000 | 124,029,000 |
Commercial loans | Commercial real estate | Loans rated 6 | ||
Credit Quality Indicators | ||
Total loans | 667,000 | 75,000 |
Commercial loans | Commercial real estate | Loans rated 7 | ||
Credit Quality Indicators | ||
Total loans | 4,619,000 | 1,678,000 |
Commercial loans | Commercial business | ||
Credit Quality Indicators | ||
Total loans | 13,308,000 | 8,918,000 |
Commercial loans | Commercial business | Pass | ||
Credit Quality Indicators | ||
Total loans | 13,308,000 | 8,918,000 |
Commercial loans | Commercial construction | ||
Credit Quality Indicators | ||
Total loans | 10,946,000 | 4,729,000 |
Commercial loans | Commercial construction | Pass | ||
Credit Quality Indicators | ||
Total loans | 10,946,000 | 4,729,000 |
Commercial loans | SBA | ||
Credit Quality Indicators | ||
Total loans | 39,948,000 | 39,217,000 |
Commercial loans | SBA | Pass | ||
Credit Quality Indicators | ||
Total loans | 37,430,000 | 35,981,000 |
Commercial loans | SBA | Loans rated 6 | ||
Credit Quality Indicators | ||
Total loans | 1,337,000 | 1,250,000 |
Commercial loans | SBA | Loans rated 7 | ||
Credit Quality Indicators | ||
Total loans | $ 1,181,000 | $ 1,986,000 |
LOAN SERVICING (Details)
LOAN SERVICING (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2016 | |
Commercial business | ||
Loan Servicing | ||
Aggregate amount of loans transferred to a participating lender and serviced by the company | $ 4,300,000 | $ 3,000,000 |
SBA | ||
Loan Servicing | ||
Aggregate amount of loans transferred to a participating lender and serviced by the company | 17,200,000 | 12,300,000 |
Guaranteed portion of loans sold by the bank | 4,200,000 | $ 0 |
Gain on loans sold by the bank | $ 328,000 |
PREMISES AND EQUIPMENT - Summar
PREMISES AND EQUIPMENT - Summary of Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Premises and Equipment | ||
Premises and equipment, gross | $ 40,104 | $ 38,766 |
Less accumulated depreciation and amortization | (8,678) | (7,359) |
Premises and equipment, net | 31,426 | 31,407 |
Depreciation and amortization expense | 1,326 | 1,277 |
Land | ||
Premises and Equipment | ||
Premises and equipment, gross | 8,654 | 8,654 |
Buildings and improvements | ||
Premises and Equipment | ||
Premises and equipment, gross | 24,660 | 23,592 |
Furniture, fixtures and equipment | ||
Premises and Equipment | ||
Premises and equipment, gross | 6,582 | 6,312 |
Leasehold improvements | ||
Premises and Equipment | ||
Premises and equipment, gross | $ 208 | $ 208 |
PREMISES AND EQUIPMENT - Lease
PREMISES AND EQUIPMENT - Lease Commitments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Future minimum lease commitments | ||
2,017 | $ 207,000 | |
2,018 | 199,000 | |
2,019 | 16,000 | |
2,020 | 13,000 | |
2,021 | 7,000 | |
Total | 442,000 | |
Premises and equipment | ||
Rent expense | $ 205,000 | $ 173,000 |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
DEPOSITS | ||
Non-interest-bearing demand deposit accounts | $ 106,962 | $ 95,960 |
Savings accounts and interest-bearing DDA | 105,675 | 98,133 |
Money market accounts | 70,462 | 69,036 |
Club accounts | 1,331 | 1,352 |
Total non-certificate accounts | 284,430 | 264,481 |
Term certificates $250,000 or greater | 28,984 | 19,364 |
Term certificates less than $250,000 | 133,900 | 89,674 |
Total certificate accounts | 162,884 | 109,038 |
Total deposits | 447,314 | 373,519 |
Amount | ||
Within 1 year | 53,030 | 51,568 |
Within 2 years | 37,617 | 20,349 |
Within 3 years | 8,252 | 18,134 |
Within 4 years | 16,232 | 3,847 |
Within 5 years | 47,753 | 15,140 |
Total certificate accounts | $ 162,884 | $ 109,038 |
Weighted Average Rate | ||
Within 1 year | 1.04% | 1.29% |
Within 2 years | 1.32% | 1.43% |
Within 3 years | 1.36% | 1.40% |
Within 4 years | 1.80% | 1.32% |
Within 5 years | 2.06% | 1.79% |
Total | 1.50% | 1.41% |
BORROWED FUNDS (Details)
BORROWED FUNDS (Details) | 12 Months Ended | |
Dec. 31, 2016USD ($)loan | Dec. 31, 2015USD ($) | |
Borrowed Funds | ||
FHLB advances with an original maturity of less than three months | $ 119,500,000 | $ 115,500,000 |
Weighted average rate (as a percent) | 0.74% | 0.44% |
FHLB, number of non-amortizing long-term advances | loan | 1 | |
FHLB long-term advances outstanding | $ 1,750,000 | $ 0 |
FHLB, stated interest rate on long-term advance | 0 | |
FHLB Line of Credit | ||
Borrowed Funds | ||
FHLB, line of credit maximum amount available | 6,000,000 | 6,000,000 |
FHLB, line of credit amount outstanding | $ 0 | 0 |
FHLB Line of Credit | Residential Real Estate | ||
Borrowed Funds | ||
Lien on qualified collateral (as a percent) | 75.00% | |
FHLB Line of Credit | Commercial real estate | ||
Borrowed Funds | ||
Lien on qualified collateral (as a percent) | 65.00% | |
FHLB Line of Credit | Home equity loans and lines of credit | ||
Borrowed Funds | ||
Lien on qualified collateral (as a percent) | 49.00% | |
Federal Reserve Bank of Boston | ||
Borrowed Funds | ||
Borrowings at the discount window | $ 0 | $ 0 |
Collateral pledged to Federal Reserve Bank | $ 18,500,000 |
EMPLOYEE BENEFITS - Defined Ben
EMPLOYEE BENEFITS - Defined Benefit Plan (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Assumptions used to determine net periodic pension cost | ||
Actuarial loss that will be amortized through salary and employee benefit expense | $ 466,000 | $ 456,000 |
Actuarial loss, tax benefit | $ 186,000 | 182,000 |
Defined Benefit Pension 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 | $ 1,610,000 | 1,779,000 |
Interest cost | 69,000 | 70,000 |
Actuarial (gain) loss | 21,000 | (115,000) |
Benefits paid | (94,000) | (124,000) |
Projected benefit obligation at end of year | 1,606,000 | 1,610,000 |
Change in plan assets: | ||
Fair value of plan assets at beginning of year | 1,433,000 | 1,539,000 |
Actual return on plan assets | 61,000 | 18,000 |
Employer contribution | 20,000 | |
Benefits paid | (94,000) | (124,000) |
Fair value of plan assets at end of year | 1,420,000 | 1,433,000 |
Unfunded status at end of year | 186,000 | 177,000 |
Accumulated benefit obligation at end of year | $ 1,606,000 | $ 1,610,000 |
Discount rate used to determine the benefit obligation (as a percent) | 4.15% | 4.34% |
Components of net periodic pension cost | ||
Interest cost | $ 69,000 | $ 70,000 |
Expected return on plan assets | (99,000) | (106,000) |
Amortization of actuarial loss | 51,000 | 58,000 |
Settlement cost | 0 | 26,000 |
Net periodic pension cost | 21,000 | $ 48,000 |
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, 2017 | $ (52,000) | |
Assumptions used to determine net periodic pension cost | ||
Discount rate (as a percent) | 4.34% | 3.95% |
Expected return on plan assets (as a percent) | 7.00% | 7.00% |
EMPLOYEE BENEFITS - Plan Assets
EMPLOYEE BENEFITS - Plan Assets and Future Benefit Payments (Details) - Defined Benefit Pension Plan - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Employee benefits | |||
Fair value of pension plan assets | $ 1,420,000 | $ 1,433,000 | $ 1,539,000 |
Expected contribution to the plan in fiscal year 2016 | 8,000 | ||
Estimated future benefit payments | |||
2,017 | 60,000 | ||
2,018 | 223,000 | ||
2,019 | 66,000 | ||
2,020 | 77,000 | ||
2,021 | 86,000 | ||
Thereafter | 565,000 | ||
Level 1 | |||
Employee benefits | |||
Fair value of pension plan assets | 1,420,000 | 1,433,000 | |
Level 1 | Domestic mutual funds | |||
Employee benefits | |||
Fair value of pension plan assets | 664,000 | 653,000 | |
Level 1 | Fixed income | |||
Employee benefits | |||
Fair value of pension plan assets | 438,000 | 467,000 | |
Level 1 | International mutual funds | |||
Employee benefits | |||
Fair value of pension plan assets | 231,000 | 230,000 | |
Level 1 | International exchange traded funds | |||
Employee benefits | |||
Fair value of pension plan assets | 56,000 | 52,000 | |
Level 1 | Cash and cash equivalents | |||
Employee benefits | |||
Fair value of pension plan assets | $ 31,000 | $ 31,000 |
EMPLOYEE BENEFITS - Deferred Co
EMPLOYEE BENEFITS - Deferred Compensation Supplemental Executive Retirement Plan (Details) - Executive Officers - Supplemental Employee Retirement Plan - DCSERP - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Supplemental Executive Retirement Plan | ||
Assets related to the Rabbi Trust | $ 1,100,000 | $ 930,000 |
Liability for benefit obligation reported in accrued expenses and other liabilities | $ 1,100,000 | $ 930,000 |
Shares held in the Rabbi Trust (in shares) | 8,900 | 8,900 |
Value of shares held in the Rabbi Trust | $ 100,000 | $ 100,000 |
Benefit obligation | 100,000 | 100,000 |
Compensation expense | $ 195,000 | $ (59,000) |
EMPLOYEE BENEFITS - 401(k) Plan
EMPLOYEE BENEFITS - 401(k) Plan and Incentive Compensation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Incentive Compensation | ||
Discretionary Bonuses Expense | $ 35,000 | $ 237,000 |
Annual Incentive Plan | $ 280,000 | |
401(k) Plan | ||
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% | |
Amount of contribution | $ 559,000 | $ 537,000 |
401(k) Plan | Maximum | ||
401(k) Plan | ||
Percentage of employee's contribution for which the employer makes a matching contribution | 5.00% | |
Percentage of gross compensation contributed by employer as a discretionary contribution | 5.00% |
EMPLOYEE BENEFITS - Supplementa
EMPLOYEE BENEFITS - Supplemental Retirement Agreements (Details) - Supplemental Employee Retirement Plan - SERP - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Supplemental Retirement Agreements | ||
Compensation expense | $ 767,000 | $ 603,000 |
Discount rate (as a percent) | 3.36% | |
Liability for benefit obligation reported in accrued expenses and other liabilities | $ 1,900,000 | $ 1,200,000 |
EMPLOYEE BENEFITS - ESOP (Detai
EMPLOYEE BENEFITS - ESOP (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016USD ($)itemshares | Dec. 31, 2015USD ($) | |
Employee Stock Ownership Plan | |||
Percentage of common stock outstanding, held in ESOP (as a percent) | 9.00% | ||
Term of loan payable | 25 years | ||
Interest rate (as a percent) | 3.50% | ||
Fair value of unallocated shares | $ | $ 5,500,000 | ||
Compensation expense | $ | $ 206,000 | $ 179,000 | |
Shares held by the ESOP | |||
Allocated (in shares) | 47,512 | ||
Distributions/sales (in shares) | (715) | ||
Unallocated (in shares) | 348,422 | ||
Total (in shares) | 395,219 | ||
Change in Control Severance Plan | |||
Number of times base salary plus highest bonus will be paid immediately prior to termination of participants (in payments) | item | 2 | ||
Period considered for payment of highest bonus immediately prior to termination of participants in the Severance Plan | 2 years | ||
Forecast | |||
Employee Stock Ownership Plan | |||
Interest rate (as a percent) | 3.75% |
OTHER STOCK-BASED COMPENSATIO63
OTHER STOCK-BASED COMPENSATION - Summary of EIP (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Feb. 29, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity Incentive Plan | |||
Number of stock options granted (in shares) | 0 | ||
Share-based compensation expense | $ 126,000 | ||
2015 Equity Incentive Plan | |||
Equity Incentive Plan | |||
Number of shares available for issuance under the EIP | 692,885 | ||
Number of stock options granted (in shares) | 0 | ||
2015 Equity Incentive Plan | Maximum | |||
Equity Incentive Plan | |||
Vesting rate per year (as a percent) | 20.00% | ||
Vesting period after grant date | 1 year | ||
2015 Equity Incentive Plan | Options | |||
Equity Incentive Plan | |||
Expiration period after grant date | 10 years | ||
Number of stock options granted (in shares) | 91,225 | 0 | |
Share-based compensation expense | $ 41,000 | ||
Unrecognized salary and employee benefits cost | $ 195,000 | ||
Unrecognized salary and employee benefits cost, Recognition period | 4 years 1 month 6 days | ||
Grant-date fair value | $ 2.59 | ||
Number of shares reserved for future issuance | 562,615 | ||
2015 Equity Incentive Plan | Options | Directors and certain key senior executives | |||
Equity Incentive Plan | |||
Authorized grants (in shares) | 91,225 | ||
Exercise Price | $ 12.41 | ||
Vesting period after grant date | 5 years | ||
2015 Equity Incentive Plan | Restricted Stock | |||
Equity Incentive Plan | |||
Number of stock options granted (in shares) | 39,045 | ||
Share-based compensation expense | $ 85,000 | ||
Unrecognized salary and employee benefits cost | $ 400,000 | ||
Unrecognized salary and employee benefits cost, Recognition period | 4 years 1 month 6 days | ||
2015 Equity Incentive Plan | Restricted Stock | Directors and certain key senior executives | |||
Equity Incentive Plan | |||
Authorized grants (in shares) | 39,045 | ||
Exercise Price | $ 12.41 | ||
Vesting period after grant date | 5 years |
OTHER STOCK-BASED COMPENSATIO64
OTHER STOCK-BASED COMPENSATION - Options (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Stock option activity, shares | ||
Granted | 0 | |
2015 Equity Incentive Plan | ||
Stock option activity, shares | ||
Granted | 0 | |
2015 Equity Incentive Plan | Options | ||
Assumptions used to determine grant-date fair value of stock options | ||
Risk-free interest rate | 1.56% | |
Expected Term | 8 years | |
Expected stock price volatility | 13.52% | |
Dividend yield | 0.00% | |
Stock option activity, shares | ||
Granted | 91,225 | 0 |
Exercised | 0 | |
Outstanding at end of year | 91,225 | |
Fully vested and expected to vest | 91,225 | |
Stock option activity, weighted average exercise price | ||
Granted | $ 12.41 | |
Outstanding at end of year | 12.41 | |
Fully vested and expected to vest | $ 12.41 | |
Stock option activity, weighted average remaining contractual term | ||
Granted | 10 years | |
Outstanding at end of year | 9 years 1 month 6 days | |
Fully vested and expected to vest | 9 years 1 month 6 days | |
Stock option activity, aggregate intrinsic value | ||
Outstanding at end of year | $ 295,569 | |
Fully vested and expected to vest | $ 295,569 |
OTHER STOCK-BASED COMPENSATIO65
OTHER STOCK-BASED COMPENSATION - Restricted Stock (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Nonveseted restricted stock, shares | ||
Granted | 0 | |
2015 Equity Incentive Plan | ||
Nonveseted restricted stock, shares | ||
Granted | 0 | |
2015 Equity Incentive Plan | Restricted Stock | ||
Nonveseted restricted stock, shares | ||
Granted | 39,045 | |
Nonvested at December 31, 2016 | 39,045 | |
Nonveseted restricted stock, weighted-average grant date fair value | ||
Granted | $ 12.41 | |
Nonvested at December 31, 2016 | $ 12.41 |
OFF-BALANCE SHEET ACTIVITIES 66
OFF-BALANCE SHEET ACTIVITIES AND MORTGAGE BANKING - Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Commitments to originate loans for portfolio | ||
Loan Commitments | ||
Outstanding financial instruments whose contract amounts represent credit risk | $ 18,461 | $ 14,905 |
Commitments to originate loans to be sold | ||
Loan Commitments | ||
Outstanding financial instruments whose contract amounts represent credit risk | 24,161 | 13,142 |
Commitments to purchase loans from third parties | ||
Loan Commitments | ||
Outstanding financial instruments whose contract amounts represent credit risk | 4,236 | 5,988 |
Unfunded commitments under home equity lines of credit | ||
Loan Commitments | ||
Outstanding financial instruments whose contract amounts represent credit risk | 53,342 | 51,639 |
Unfunded commitments under commercial lines of credit | ||
Loan Commitments | ||
Outstanding financial instruments whose contract amounts represent credit risk | 14,730 | 11,542 |
Unfunded commitments under SBA lines of credit | ||
Loan Commitments | ||
Outstanding financial instruments whose contract amounts represent credit risk | 4,106 | 4,340 |
Unfunded commitments under overdraft lines of credit | ||
Loan Commitments | ||
Outstanding financial instruments whose contract amounts represent credit risk | 180 | 181 |
Unadvanced funds on construction loans | ||
Loan Commitments | ||
Outstanding financial instruments whose contract amounts represent credit risk | $ 5,735 | $ 7,225 |
OFF-BALANCE SHEET ACTIVITIES 67
OFF-BALANCE SHEET ACTIVITIES AND MORTGAGE BANKING - Loans Sold with Recourse Obligations (Details) | 12 Months Ended | |
Dec. 31, 2016USD ($)payment | Dec. 31, 2015USD ($) | |
Loans Sold with Recourse Obligations | ||
Number of first due payments default which would require the Bank to repurchase loans and/or refund premiums | payment | 4 | |
Premiums on loans sold that were subject to refund provisions | $ 1,900,000 | $ 1,300,000 |
Amount of repurchased loans | 0 | 830,000 |
Amount of premium refunded of repurchased loans | 37,000 | 46,000 |
Recourse loan liability | $ 0 | $ 0 |
OFF-BALANCE SHEET ACTIVITIES 68
OFF-BALANCE SHEET ACTIVITIES AND MORTGAGE BANKING - Mortgage Banking (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Mortgage Banking | ||
Loans held for sale, at fair value | $ 23,157 | $ 18,952 |
Closed hedge instruments not settled | 8,500 | 4,800 |
Assets, Fair Value | 643 | 220 |
Liabilities, Fair Value | 219 | 180 |
Derivative loan commitments | ||
Mortgage Banking | ||
Assets, Fair Value | 566 | 217 |
Commitments hedged with best efforts | Other assets | ||
Mortgage Banking | ||
Assets, Fair Value | 255 | 162 |
Commitments hedged with TBA | Other assets | ||
Mortgage Banking | ||
Assets, Fair Value | 311 | 55 |
Forward loan sale commitments | ||
Mortgage Banking | ||
Forward commitments | 41,900 | 31,300 |
Assets, Fair Value | 77 | 3 |
Liabilities, Fair Value | 219 | 180 |
TBA securities | ||
Mortgage Banking | ||
Forward commitments | 15,300 | 4,000 |
TBA securities | Other liabilities. | ||
Mortgage Banking | ||
Liabilities, Fair Value | 57 | 5 |
Mandatory Delivery Contracts | ||
Mortgage Banking | ||
Forward commitments | 7,400 | 2,800 |
Mandatory Delivery Contracts | Other assets | ||
Mortgage Banking | ||
Assets, Fair Value | 3 | |
Mandatory Delivery Contracts | Other liabilities. | ||
Mortgage Banking | ||
Liabilities, Fair Value | 37 | |
Best Efforts Contracts | ||
Mortgage Banking | ||
Forward commitments | 19,300 | 24,500 |
Assets, Fair Value | 77 | |
Liabilities, Fair Value | 125 | 175 |
Commitments | Other liabilities. | ||
Mortgage Banking | ||
Liabilities, Fair Value | 125 | 49 |
Loans held for sale | Other assets | ||
Mortgage Banking | ||
Assets, Fair Value | 77 | |
Loans held for sale | Other liabilities. | ||
Mortgage Banking | ||
Liabilities, Fair Value | 126 | |
Interest rate lock commitments | ||
Mortgage Banking | ||
Commitments to borrowers | $ 24,300 | $ 13,100 |
OFF-BALANCE SHEET ACTIVITIES 69
OFF-BALANCE SHEET ACTIVITIES AND MORTGAGE BANKING - Derivatives not Designated as Hedging Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Executive Employment Agreement | ||
Period of continued benefits following termination of employment under executive employment agreement | 5 years | |
Not Designated As Hedging Instruments | Net gain (loss) on sales of loans and other mortgage banking income | ||
Gains and losses on derivative instruments | ||
Gains (losses) on derivative instruments | $ 384 | $ 38 |
Not Designated As Hedging Instruments | Commitments hedged with best efforts | Net gain (loss) on sales of loans and other mortgage banking income | ||
Gains and losses on derivative instruments | ||
Gains (losses) on derivative instruments | 93 | 64 |
Not Designated As Hedging Instruments | Commitments hedged with TBA | Net gain (loss) on sales of loans and other mortgage banking income | ||
Gains and losses on derivative instruments | ||
Gains (losses) on derivative instruments | 256 | 55 |
Not Designated As Hedging Instruments | Best Efforts Contracts | Net gain (loss) on sales of loans and other mortgage banking income | ||
Gains and losses on derivative instruments | ||
Gains (losses) on derivative instruments | 127 | (79) |
Not Designated As Hedging Instruments | Mandatory Delivery Contracts | Net gain (loss) on sales of loans and other mortgage banking income | ||
Gains and losses on derivative instruments | ||
Gains (losses) on derivative instruments | (40) | 3 |
Not Designated As Hedging Instruments | TBA securities | Net gain (loss) on sales of loans and other mortgage banking income | ||
Gains and losses on derivative instruments | ||
Gains (losses) on derivative instruments | $ (52) | $ (5) |
LOANS TO RELATED PARTIES (Detai
LOANS TO RELATED PARTIES (Details) - Directors, executive officers and their associates - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Loans to related parties | ||
Balance at beginning of year | $ 1,082 | $ 1,307 |
Principal additions | 780 | 238 |
Principal payments | (467) | (463) |
Balance at end of year | $ 1,395 | $ 1,082 |
INCOME TAXES - Income Tax Expen
INCOME TAXES - Income Tax Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Current tax expense: | ||
Federal | $ 1,804 | $ 688 |
State | 583 | 210 |
Total | 2,387 | 898 |
Deferred tax (benefit) expense: | ||
Federal | 31 | 107 |
State | (137) | 148 |
Total | (106) | 255 |
Total income tax expense | $ 2,281 | $ 1,153 |
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% | $ 1,962 | $ 945 |
Increase (decrease) resulting from: | ||
State taxes, net of federal tax benefit | 294 | 236 |
Other, net | 25 | (28) |
Total income tax expense | $ 2,281 | $ 1,153 |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets/Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Deferred tax assets: | ||||
Allowance for loan losses | $ 994 | $ 877 | ||
Employee benefits | 1,409 | 969 | ||
Non-accrual interest | 61 | 100 | ||
Defined benefit pension plan | 186 | 182 | ||
Charitable contribution carryforwards | 318 | 542 | ||
Organization costs | 122 | 133 | ||
Impairment on real estate held for sale | 472 | |||
Other, net | 48 | 25 | ||
Total deferred tax assets | 3,138 | 3,300 | ||
Deferred tax liabilities: | ||||
Premises and equipment, net | (611) | (639) | ||
Net deferred loan costs | (1,288) | (1,536) | ||
Mortgage derivatives | (259) | (216) | ||
Other, net | (55) | (94) | ||
Total deferred tax liabilities | (2,213) | (2,485) | ||
Deferred tax asset, net | $ 815 | $ 1,114 | $ 925 | $ 815 |
Change in deferred taxes | ||||
Balance at beginning of year | 815 | 1,114 | ||
Deferred tax (expense) benefit | 106 | (255) | ||
Unrealized gain/loss pertaining to defined benefit pension plan | 4 | (44) | ||
Balance at end of year | $ 925 | $ 815 | ||
Charitable contribution limited percentage of taxable income deduction | 10.00% |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Common Share | ||
Potentially dilutive common stock (in shares) | 4,000 | 0 |
Net income applicable to common stock | $ 3,489 | $ 1,628 |
Weighted average common shares outstanding | 4,597,000 | 4,901,000 |
Less: Average unallocated ESOP shares | 356,000 | 372,000 |
Weighted average common shares outstanding - basic | 4,241,000 | 4,529,000 |
Dilutive impact of restricted stock | 4,000 | |
Weighted average number of common shares outstanding - diluted | 4,245,000 | 4,529,000 |
Earnings per share - basic | $ 0.82 | $ 0.36 |
Earnings per share - diluted | $ 0.82 | $ 0.36 |
Number of stock options granted (in shares) | 0 | |
Options | ||
Earnings Per Common Share | ||
Shares of common stock excluded from computing diluted earnings per share | 5,702 |
STOCK REPURCHASE PROGRAMS (Deta
STOCK REPURCHASE PROGRAMS (Details) | 12 Months Ended | ||||
Dec. 31, 2016USD ($)shareholder$ / sharesshares | Dec. 31, 2015USD ($)shares | Nov. 30, 2016shares | May 31, 2016shares | Jan. 30, 2015shares | |
Share Repurchase Plans | |||||
Common stock repurchased | $ | $ 6,165,000 | $ 1,455,000 | |||
Share Repurchase Program, 2015 | |||||
Share Repurchase Plans | |||||
Common stock authorized to repurchased under repurchase program (in shares) | 247,459 | ||||
Common stock repurchased (in shares) | 120,559 | 126,900 | |||
Common stock repurchased | $ | $ 1,600,000 | $ 1,500,000 | |||
Share Repurchase Program, May 2016 | |||||
Share Repurchase Plans | |||||
Common stock authorized to repurchased under repurchase program (in shares) | 235,086 | ||||
Common stock repurchased (in shares) | 235,086 | ||||
Common stock repurchased | $ | $ 3,100,000 | ||||
Share Repurchase Program, November 2016 | |||||
Share Repurchase Plans | |||||
Common stock authorized to repurchased under repurchase program (in shares) | 223,331 | ||||
Common stock repurchased (in shares) | 102,583 | ||||
Individual Stockholder | Share Repurchase Program, 2015 | |||||
Share Repurchase Plans | |||||
Common stock repurchased (in shares) | 71,659 | ||||
Number of stockholders | shareholder | 1 | ||||
Common stock repurchased per share (in dollars per share) | $ / shares | $ 13 | ||||
Individual Stockholder | Share Repurchase Program, May 2016 | |||||
Share Repurchase Plans | |||||
Common stock repurchased | $ | $ 235,086 | ||||
Number of stockholders | shareholder | 1 | ||||
Common stock repurchased per share (in dollars per share) | $ / shares | $ 13 |
MINIMUM REGULATORY CAPITAL RE75
MINIMUM REGULATORY CAPITAL REQUIREMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Jul. 31, 2013 |
MINIMUM REGULATORY CAPITAL REQUIREMENTS | |||
Capital conservation buffer (as a percent) | 0.625% | 2.50% | |
Total capital (to risk weighted assets) | |||
Actual Amount | $ 59,722 | $ 55,355 | |
Actual Ratio (as a percent) | 13.373% | 13.03% | |
Minimum Capital Requirements Amount | $ 35,728 | $ 33,993 | |
Minimum Capital Requirements Ratio (as a percent) | 8.00% | 8.00% | |
Minimum Capital Requirements Amount, Including Capital Buffer | $ 38,519 | ||
Minimum Capital Requirements Ratio, Including Capital Buffer (as a percent) | 8.625% | ||
Minimum To Be Well Capitalized | $ 44,660 | $ 42,491 | |
Minimum To Be Well Capitalized (as a percent) | 10.00% | 10.00% | |
Tier 1 capital (to risk weighted assets) | |||
Actual Amount | $ 57,229 | $ 53,161 | |
Actual Ratio (as a percent) | 12.814% | 12.51% | |
Minimum Capital Requirements Amount | $ 26,796 | $ 25,495 | |
Minimum Capital Requirements Ratio (as a percent) | 6.00% | 6.00% | |
Minimum Capital Requirements Amount, Including Capital Buffer | $ 29,587 | ||
Minimum Capital Requirements Ratio, Including Capital Buffer (as a percent) | 6.625% | ||
Minimum To Be Well Capitalized | $ 35,728 | $ 33,993 | |
Minimum To Be Well Capitalized (as a percent) | 8.00% | 8.00% | |
Common Equity Tier 1 (to risk weighted assets) | |||
Actual Amount | $ 57,229 | $ 53,161 | |
Actual Ratio (as a percent) | 12.814% | 12.51% | |
Minimum Capital for Capital Adequacy Purposes, Amount | $ 20,097 | $ 19,121 | |
Minimum Capital for Capital Adequacy Purposes, Ratio (as a percent) | 4.50% | 4.50% | |
Minimum Capital Requirements Amount, Including Capital Buffer | $ 22,888 | ||
Minimum Capital Requirements Ratio, Including Capital Buffer (as a percent) | 5.125% | ||
Minimum Capital to be Well Capitalized, Amount | $ 29,029 | $ 27,619 | |
Minimum Capital to be Well Capitalized, Ratio (as a percent) | 6.50% | 6.50% | |
Tier 1 leverage capital (to average assets) | |||
Actual Amount | $ 57,229 | $ 53,161 | |
Actual Ratio (as a percent) | 9.034% | 10.06% | |
Minimum Capital Requirements Amount | $ 25,339 | $ 24,148 | |
Minimum Capital Requirements Ratio (as a percent) | 4.00% | 4.00% | |
Minimum To Be Well Capitalized | $ 31,673 | $ 26,435 | |
Minimum To Be Well Capitalized (as a percent) | 5.00% | 5.00% |
FAIR VALUES OF ASSETS AND LIA76
FAIR VALUES OF ASSETS AND LIABILITIES - Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
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 |
Transfer of Level 3 assets and liabilities measured on recurring basis | 0 | 0 |
Change in Level 3 assets and liabilities measured on a recurring basis | ||
Balance at beginning of period | 42 | 2 |
Gain (losses) arising during the period | 7 | |
Gains (losses) on new commitments during the period | 518 | 42 |
Reclassifications of realized gains on settled commitments | (49) | (2) |
Balance at end of period | 518 | 42 |
Recurring | Level 3 | Derivative loan commitments | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative Asset, Fair Value | $ 566 | $ 217 |
Recurring | Level 3 | Derivative loan commitments | Investor pricing | Minimum | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Pull-through rate (as a percent) | 75.10% | 79.60% |
Recurring | Level 3 | Derivative loan commitments | Investor pricing | Maximum | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Pull-through rate (as a percent) | 100.00% | 100.00% |
Recurring | Level 3 | Hedging commitments | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative Liability, Fair Value | $ (125) | $ (49) |
Recurring | Level 3 | Hedging commitments | Investor pricing | Minimum | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Pull-through rate (as a percent) | 82.50% | 82.50% |
Recurring | Level 3 | Hedging commitments | Investor pricing | Maximum | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Pull-through rate (as a percent) | 100.00% | 100.00% |
Recurring | Level 3 | Hedging loans held for sale | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Derivative Asset, Fair Value | $ 77 | |
Derivative Liability, Fair Value | $ (126) | |
Recurring | Level 3 | Hedging loans held for sale | Investor pricing | Minimum | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Pull-through rate (as a percent) | 82.50% | 82.50% |
Recurring | Level 3 | Hedging loans held for sale | Investor pricing | Maximum | ||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||
Pull-through rate (as a percent) | 100.00% | 100.00% |
FAIR VALUES OF ASSETS AND LIA77
FAIR VALUES OF ASSETS AND LIABILITIES - Measured on a Nonrecurring Basis (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Assets Measured at Fair Value on a Non-recurring Basis | ||
Losses on real estate held for sale | $ 581,000 | |
Provisions (credit) | $ 475,000 | 496,000 |
Non-recurring | ||
Assets Measured at Fair Value on a Non-recurring Basis | ||
Losses on foreclosed real estate | 46,000 | |
Losses on impaired loans | 116,000 | (47,000) |
Losses on real estate held for sale | 581,000 | |
Losses on impairment of assets | 116,000 | 580,000 |
Liabilities measured at fair value | 0 | 0 |
Non-recurring | Impaired loans | ||
Assets Measured at Fair Value on a Non-recurring Basis | ||
Impaired loans, specific reserves | 23,000 | 15,000 |
Provisions (credit) | 116,000 | (47,000) |
Level 2 | Non-recurring | ||
Assets Measured at Fair Value on a Non-recurring Basis | ||
Real estate held for sale | 3,305,000 | |
Assets, Fair Value | 3,305,000 | |
Level 3 | Non-recurring | ||
Assets Measured at Fair Value on a Non-recurring Basis | ||
Foreclosed real estate | 422,000 | 710,000 |
Impaired loans | 558,000 | 1,176,000 |
Assets, Fair Value | 980,000 | 1,886,000 |
Level 3 | Non-recurring | Appraisal of collateral | ||
Assets Measured at Fair Value on a Non-recurring Basis | ||
Foreclosed real estate | 422,000 | 710,000 |
Impaired loans | $ 558,000 | $ 1,176,000 |
Level 3 | Non-recurring | Appraisal of collateral | Minimum | ||
Assets Measured at Fair Value on a Non-recurring Basis | ||
Collateral discounts (as a percent) | 5.00% | 5.00% |
Level 3 | Non-recurring | Appraisal of collateral | Maximum | ||
Assets Measured at Fair Value on a Non-recurring Basis | ||
Collateral discounts (as a percent) | 30.00% | 30.00% |
FAIR VALUES OF ASSETS AND LIA78
FAIR VALUES OF ASSETS AND LIABILITIES - Summary of Fair Values of Financial Instruments (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of Fair Values of Financial Instruments | |||
Aggregate fair value | $ 23,157,000 | $ 18,952,000 | |
Contractual balance | 22,714,000 | 18,268,000 | |
Gain | 443,000 | 684,000 | |
Amount of gains and losses from changes in fair value included in earnings for loans held for sale | (241,000) | 684,000 | |
Financial assets: | |||
Accrued interest receivable | 1,598,000 | 1,414,000 | |
Level 1 | |||
Financial assets: | |||
Cash and cash equivalent | 44,658,000 | ||
Financial liabilities: | |||
Non-certificate accounts | 284,430,000 | ||
Level 2 | |||
Financial assets: | |||
Loans held for sale | 23,157,000 | ||
Financial liabilities: | |||
Certificate accounts | 163,145,000 | ||
Borrowed funds | 121,053,000 | ||
Accrued interest payable | 40,000 | ||
Level 3 | |||
Financial assets: | |||
Loans, net of allowance for loan losses | 525,822,000 | ||
Accrued interest receivable | 1,598,000 | ||
Carrying Amount | |||
Financial assets: | |||
Cash and cash equivalent | 44,658,000 | 18,322,000 | |
Certificates of deposit | 6,074,000 | ||
Loans, net of allowance for loan losses | 525,215,000 | 467,023,000 | |
Loans held for sale | 23,157,000 | 18,952,000 | |
FHLB stock | 6,184,000 | 5,283,000 | |
Accrued interest receivable | 1,598,000 | 1,414,000 | |
Financial liabilities: | |||
Non-certificate accounts | 284,430,000 | 264,481,000 | |
Certificate accounts | 162,884,000 | 109,038,000 | |
Borrowed funds | 121,250,000 | 115,500,000 | |
Accrued interest payable | 40,000 | 24,000 | |
Fair Value | |||
Financial assets: | |||
Cash and cash equivalent | 44,658,000 | 18,322,000 | |
Certificates of deposit | 6,074,000 | ||
Loans, net of allowance for loan losses | 525,822,000 | 471,245,000 | |
Loans held for sale | 23,157,000 | 18,952,000 | |
Accrued interest receivable | 1,598,000 | 1,414,000 | |
Financial liabilities: | |||
Non-certificate accounts | 284,430,000 | 264,481,000 | |
Certificate accounts | 163,145,000 | 109,423,000 | |
Borrowed funds | 121,053,000 | 115,495,000 | |
Accrued interest payable | $ 40,000 | 24,000 | |
Fair Value | Level 1 | |||
Financial assets: | |||
Cash and cash equivalent | 18,322,000 | ||
Certificates of deposit | 6,074,000 | ||
Financial liabilities: | |||
Non-certificate accounts | 264,481,000 | ||
Fair Value | Level 2 | |||
Financial assets: | |||
Loans held for sale | 18,952,000 | ||
Financial liabilities: | |||
Certificate accounts | $ 109,423,000 | ||
Borrowed funds | 115,495,000 | ||
Accrued interest payable | 24,000 | ||
Fair Value | Level 3 | |||
Financial assets: | |||
Loans, net of allowance for loan losses | $ 471,245,000 | ||
Accrued interest receivable | $ 1,414,000 |
PARENT COMPANY FINANCIAL STAT79
PARENT COMPANY FINANCIAL STATEMENTS - Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Assets | |||
Certificates of Deposit | $ 0 | $ 6,074 | |
Other assets | 6,154 | 7,506 | |
Total assets | 644,191 | 565,137 | |
Liabilities and stockholders' equity | |||
Stockholders' equity | 68,572 | 70,922 | $ 70,504 |
Total liabilities and stockholders' equity | 644,191 | 565,137 | |
Parent Company | |||
Assets | |||
Cash | 7,632 | 7,650 | |
Certificates of Deposit | 6,074 | ||
Investments in subsidiaries | 57,288 | 53,471 | |
Note receivable from subsidiary | 3,633 | 3,741 | |
Other assets | 29 | 12 | |
Total assets | 68,582 | 70,948 | |
Liabilities and stockholders' equity | |||
Other liabilities | 10 | 26 | |
Stockholders' equity | 68,572 | 70,922 | |
Total liabilities and stockholders' equity | $ 68,582 | $ 70,948 |
PARENT COMPANY FINANCIAL STAT80
PARENT COMPANY FINANCIAL STATEMENTS - Statements of Net Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Expenses | ||
Loss before income taxes and equity in undistributed income (loss) of subsidiaries | $ 5,770 | $ 2,781 |
Income tax benefit | 2,281 | 1,153 |
Net income | 3,489 | 1,628 |
Parent Company | ||
Income | ||
Interest Income | 205 | 225 |
Expenses | ||
Other expenses | 208 | 229 |
Loss before income taxes and equity in undistributed income (loss) of subsidiaries | (3) | (4) |
Income tax benefit | (1) | (1) |
Loss of parent company | (2) | (3) |
Equity in undistributed income (loss) of subsidiaries | 3,491 | 1,631 |
Net income | $ 3,489 | $ 1,628 |
PARENT COMPANY FINANCIAL STAT81
PARENT COMPANY FINANCIAL STATEMENTS - Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 3,489 | $ 1,628 |
Adjustments to reconcile net loss to cash used in operating activities | ||
Change in other assets | 3,201 | 327 |
Net cash provided by (used in) operating activities | 5,385 | (2,894) |
Cash flows used in investing activities: | ||
Purchase of and increase in certificates of deposit | (25) | (3,058) |
Maturities of certificates of deposit | 6,099 | |
Net cash used in investing activities | (52,429) | (89,586) |
Cash flows used in financing activities: | ||
Repurchase of common stock | (6,165) | (1,455) |
Net cash provided by financing activities | 73,380 | 96,220 |
Net increase in cash and cash equivalents | 26,336 | 3,740 |
Cash and cash equivalents at beginning of period | 18,322 | 14,582 |
Cash and cash equivalents at end of period | 44,658 | 18,322 |
Parent Company | ||
Cash flows from operating activities: | ||
Net income | 3,489 | 1,628 |
Adjustments to reconcile net loss to cash used in operating activities | ||
Change in other assets | (17) | 225 |
Change in other liabilities | (16) | 25 |
Equity in undistributed income (loss) of subsidiaries | (3,491) | (1,631) |
Net cash provided by (used in) operating activities | (35) | 247 |
Cash flows used in investing activities: | ||
Purchase of and increase in certificates of deposit | (25) | (3,058) |
Maturities of certificates of deposit | 6,099 | |
Change in note receivable from subsidiary, net | 108 | 108 |
Net cash used in investing activities | 6,182 | (2,950) |
Cash flows used in financing activities: | ||
Repurchase of common stock | (6,165) | (1,455) |
Net cash provided by financing activities | (6,165) | (1,455) |
Net increase in cash and cash equivalents | (18) | (4,158) |
Cash and cash equivalents at beginning of period | 7,650 | 11,808 |
Cash and cash equivalents at end of period | $ 7,632 | $ 7,650 |