Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 17, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | COMMUNITY BANCORP/VT | ||
Entity Central Index Key | 0000718413 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Dec. 31, 2020 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 | ||
Entity Common Stock Shares Outstanding | 5,316,160 | ||
Entity Public Float | $ 65,684,788 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 000-16435 | ||
Entity Incorporation State Country Code | VT | ||
Entity Tax Identification Number | 03-0284070 | ||
Entity Address Address Line 1 | 4811 US Route 5 | ||
Entity Address City Or Town | Derby | ||
Entity Address State Or Province | VT | ||
Entity Address Postal Zip Code | 05829 | ||
City Area Code | 334-7915 | ||
Local Phone Number | 802 | ||
Security 12g Title | Common Stock - $2.50 par value per share | ||
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and due from banks | $ 10,850,787 | $ 10,263,535 |
Federal funds sold and overnight deposits | 104,199,133 | 38,298,677 |
Total cash and cash equivalents | 115,049,920 | 48,562,212 |
Securities available-for-sale | 60,705,178 | 45,966,750 |
Restricted equity securities, at cost | 1,446,550 | 1,431,850 |
Loans held-for-sale | 130,400 | 0 |
Loans | 709,355,330 | 606,988,937 |
Allowance for loan losses | (7,208,485) | (5,926,491) |
Deferred net loan (fees) costs | (1,195,741) | 362,415 |
Net loans | 700,951,104 | 601,424,861 |
Bank premises and equipment, net | 10,209,869 | 10,959,403 |
Accrued interest receivable | 2,987,977 | 2,336,553 |
Bank owned life insurance | 4,988,236 | 4,903,012 |
Goodwill | 11,574,269 | 11,574,269 |
Other real estate owned | 0 | 966,738 |
Other assets | 10,189,781 | 9,829,671 |
Total assets | 918,233,284 | 737,955,319 |
Deposits: | ||
Demand, non-interest bearing | 185,954,976 | 125,089,403 |
Interest-bearing transaction accounts | 242,902,715 | 185,102,333 |
Money market funds | 115,546,064 | 91,463,661 |
Savings | 124,555,124 | 97,167,652 |
Time deposits, $250,000 and over | 16,488,963 | 14,565,559 |
Other time deposits | 96,842,998 | 101,632,760 |
Total deposits | 782,290,840 | 615,021,368 |
Borrowed funds | 2,800,000 | 2,650,000 |
Repurchase agreements | 38,727,312 | 33,189,848 |
Junior subordinated debentures | 12,887,000 | 12,887,000 |
Accrued interest and other liabilities | 4,239,419 | 5,312,424 |
Total liabilities | 840,944,571 | 669,060,640 |
Shareholders' Equity | ||
Preferred stock, 1,000,000 shares authorized, 15 shares issued and outstanding at December 31, 2020 and 2019 ($100,000 liquidation value, per share) | 1,500,000 | 1,500,000 |
Common stock - $2.50 par value; 15,000,000 shares authorized, 5,527,380 and 5,449,857 shares issued at December 31, 2020 and 2019, respectively (including 18,128 and 16,267 shares issued February 1, 2021 and 2020, respectively) | 13,818,450 | 13,624,643 |
Additional paid-in capital | 34,309,646 | 33,464,381 |
Retained earnings | 29,368,046 | 22,667,949 |
Accumulated other comprehensive income | 915,348 | 260,483 |
Less: treasury stock, at cost; 210,101 shares at December 31, 2020 and 2019 | (2,622,777) | (2,622,777) |
Total shareholders' equity | 77,288,713 | 68,894,679 |
Total liabilities and shareholders' equity | $ 918,233,284 | $ 737,955,319 |
Book value per common share outstanding | $ 14.25 | $ 12.86 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Feb. 01, 2021 | Dec. 31, 2020 | Feb. 01, 2020 | Dec. 31, 2019 |
Shareholder's Equity | ||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | ||
Preferred stock, shares issued | 15 | 15 | ||
Preferred stock, shares outstanding | 15 | 15 | ||
Preferred stock, liquidation value | $ 100,000 | $ 100,000 | ||
Common stock par value (in dollars per share) | $ 2.50 | $ 2.5 | ||
Common stock, shares authorized (in shares) | 15,000,000 | 15,000,000 | ||
Common stock, shares issued (in shares) | 18,128 | 5,527,380 | 16,267 | 5,449,857 |
Treasury stock (in shares) | 210,101 | 210,101 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Interest income | ||
Interest and fees on loans | $ 31,609,216 | $ 29,883,352 |
Interest on taxable debt securities | 1,030,761 | 1,089,201 |
Dividends | 81,942 | 100,609 |
Interest on federal funds sold and overnight deposits | 340,375 | 685,646 |
Total interest income | 33,062,294 | 31,758,808 |
Interest expense | ||
Interest on deposits | 4,095,985 | 5,124,651 |
Interest on borrowed funds | 19,261 | 24,550 |
Interest on repurchase agreements | 254,774 | 299,347 |
Interest on junior subordinated debentures | 476,666 | 694,573 |
Total interest expense | 4,846,686 | 6,143,121 |
Net interest income | 28,215,608 | 25,615,687 |
Provision for loan losses | 1,589,000 | 1,066,167 |
Net interest income after provision for loan losses | 26,626,608 | 24,549,520 |
Non-interest income | ||
Service fees | 3,137,956 | 3,313,833 |
Income from sold loans | 1,469,863 | 706,306 |
Other income from loans | 1,054,562 | 904,156 |
Net realized gain (loss) on sale of securities AFS | 39,086 | (26,490) |
Other income | 1,070,257 | 1,048,261 |
Total non-interest income | 6,771,724 | 5,946,066 |
Non-interest expense | ||
Salaries and wages | 7,597,745 | 7,271,722 |
Employee benefits | 3,084,435 | 3,118,631 |
Occupancy expenses, net | 2,672,720 | 2,605,995 |
Other expenses | 7,036,841 | 6,884,932 |
Total non-interest expense | 20,391,741 | 19,881,280 |
Income before income taxes | 13,006,591 | 10,614,306 |
Income tax expense | 2,248,089 | 1,789,860 |
Net income | $ 10,758,502 | $ 8,824,446 |
Earnings per common share | $ 2.03 | $ 1.68 |
Weighted average number of common shares used in computing earnings per share | 5,274,785 | 5,204,768 |
Dividends declared per common share | $ 0.76 | $ 0.76 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Consolidated Statements of Comprehensive Income | ||
Net income | $ 10,758,502 | $ 8,824,446 |
Other comprehensive income, net of tax: | ||
Unrealized holding gain on securities AFS arising during the period | 868,030 | 1,122,961 |
Reclassification adjustment for (gain) loss realized in income | (39,086) | 26,490 |
Unrealized gain during the period | 828,944 | 1,149,451 |
Tax effect | (174,079) | (241,384) |
Other comprehensive income, net of tax | 654,865 | 908,067 |
Total comprehensive income | $ 11,413,367 | $ 9,732,513 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) | Total | Common Stock | Preferred Stock | Additional Paid-In Capital | Retained Earnings | Accumulated other comprehensive (loss) income | Treasury Stock |
Balance, shares at Dec. 31, 2018 | 5,382,103 | 20 | |||||
Balance, amount at Dec. 31, 2018 | $ 62,603,711 | $ 13,455,258 | $ 2,000,000 | $ 32,536,532 | $ 17,882,282 | $ (647,584) | $ (2,622,777) |
Net income | 8,824,446 | 0 | 0 | 0 | 8,824,446 | 0 | 0 |
Other comprehensive income | 908,067 | 0 | 0 | 0 | 0 | 908,067 | 0 |
Total comprehensive income | 9,732,513 | 0 | 0 | 0 | 0 | 0 | 0 |
Cash dividends declared - common stock | (3,951,279) | 0 | 0 | 0 | (3,951,279) | 0 | 0 |
Cash dividends declared - preferred stock | (87,500) | $ 0 | $ 0 | 0 | (87,500) | 0 | 0 |
Issuance of common stock, shares | 67,754 | 0 | |||||
Issuance of common stock, amount | 1,097,234 | $ 169,385 | $ 0 | 927,849 | 0 | 0 | 0 |
Redemption of preferred stock, shares | 0 | (5) | |||||
Redemption of preferred stock, amount | (500,000) | $ 0 | $ (500,000) | 0 | 0 | 0 | 0 |
Balance, shares at Dec. 31, 2019 | 5,449,857 | 15 | |||||
Balance, amount at Dec. 31, 2019 | 68,894,679 | $ 13,624,643 | $ 1,500,000 | 33,464,381 | 22,667,949 | 260,483 | (2,622,777) |
Net income | 10,758,502 | 0 | 0 | 0 | 10,758,502 | 0 | 0 |
Other comprehensive income | 654,865 | 0 | 0 | 0 | 0 | 654,865 | 0 |
Total comprehensive income | 11,413,367 | 0 | 0 | 0 | 0 | 0 | 0 |
Cash dividends declared - common stock | (4,004,030) | 0 | 0 | 0 | (4,004,030) | 0 | 0 |
Cash dividends declared - preferred stock | (54,375) | $ 0 | $ 0 | 0 | (54,375) | 0 | 0 |
Issuance of common stock, shares | 77,523 | 0 | |||||
Issuance of common stock, amount | 1,039,072 | $ 193,807 | $ 0 | 845,265 | 0 | 0 | 0 |
Balance, shares at Dec. 31, 2020 | 5,527,380 | 15 | |||||
Balance, amount at Dec. 31, 2020 | $ 77,288,713 | $ 13,818,450 | $ 1,500,000 | $ 34,309,646 | $ 29,368,046 | $ 915,348 | $ (2,622,777) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash Flows from Operating Activities: | ||
Net income | $ 10,758,502 | $ 8,824,446 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization, bank premises and equipment | 894,687 | 930,035 |
Provision for loan losses | 1,589,000 | 1,066,167 |
Deferred income tax | (270,427) | 96,236 |
Net realized (gain) loss on sale of securities AFS | (39,086) | 26,490 |
Gain on sale of loans | (1,027,175) | (290,116) |
Loss on sale of bank premises and equipment | 174,470 | 30,797 |
(Gain) loss on sale of OREO | (55,602) | 817 |
Income from CFS Partners | (684,891) | (588,696) |
Amortization of bond premium, net | 92,662 | 120,295 |
Write down of OREO | 0 | 95,008 |
Proceeds from sales of loans held for sale | 37,899,464 | 14,098,560 |
Originations of loans held for sale | (37,002,689) | (13,808,444) |
Increase in taxes payable | 61,285 | 522 |
Increase in interest receivable | (651,424) | (35,712) |
Decrease in mortgage servicing rights | 17,431 | 65,371 |
Decrease in right-of-use assets | 132,778 | 236,395 |
Decrease in operating lease liabilities | (202,782) | (227,606) |
Decrease in other assets | 5,728 | 335,167 |
Increase in cash surrender value of BOLI | (85,224) | (88,913) |
Amortization of limited partnerships | 336,686 | 312,106 |
Change in net deferred loan fees and costs | 1,558,156 | 1,199 |
(Decrease) increase in interest payable | (53,109) | 26,204 |
Increase in accrued expenses | 174,154 | 66,100 |
Decrease in other liabilities | (38,377) | (45,772) |
Net cash provided by operating activities | 13,584,217 | 11,246,656 |
Investments - AFS | ||
Maturities, calls, pay downs and sales | 22,804,241 | 19,998,076 |
Purchases | (36,767,300) | (25,595,329) |
Proceeds from redemption of restricted equity securities | 522,400 | 493,600 |
Purchases of restricted equity securities | (537,100) | (176,000) |
(Decrease) increase in limited partnership contributions payable | (909,000) | 184,000 |
Investments in limited liability entities | 0 | (811,000) |
Increase in loans, net | (102,746,364) | (30,365,217) |
Capital expenditures net of proceeds from sales of bank premises and equipment | (452,402) | (952,396) |
Proceeds from sales of OREO | 1,022,340 | 105,561 |
Recoveries of loans charged off | 72,965 | 117,842 |
Net cash used in investing activities | (116,990,220) | (37,000,863) |
Cash Flows from Financing Activities: | ||
Net increase in demand and interest-bearing transaction accounts | 118,665,955 | 9,945,514 |
Net increase in money market and savings accounts | 51,469,875 | 10,239,753 |
Net decrease in time deposits | (2,866,358) | (13,980,464) |
Net increase in repurchase agreements | 5,537,464 | 2,668,283 |
Proceeds from long-term borrowings | 150,000 | 1,100,000 |
Decrease in finance lease obligations | (61,665) | (166,924) |
Redemption of preferred stock | 0 | (500,000) |
Dividends paid on preferred stock | (54,375) | (87,500) |
Dividends paid on common stock | (2,947,185) | (2,837,058) |
Net cash provided by financing activities | 169,893,711 | 6,381,604 |
Net increase (decrease) in cash and cash equivalents | 66,487,708 | (19,372,603) |
Cash and cash equivalents: | ||
Beginning | 48,562,212 | 67,934,815 |
Ending | 115,049,920 | 48,562,212 |
Supplemental Schedule of Cash Paid During the Period: | ||
Interest | 4,899,795 | 6,116,917 |
Income taxes, net of refunds | 2,120,542 | 1,381,000 |
Supplemental Schedule of Noncash Investing and Financing Activities: | ||
Change in unrealized gain on securities AFS | 828,944 | 1,149,451 |
Loans transferred to OREO | 0 | 966,738 |
Common Shares Dividends Paid: | ||
Dividends declared | 4,004,030 | 3,951,279 |
Increase in dividends payable attributable to dividends declared | (17,773) | (16,987) |
Dividends reinvested | (1,039,072) | (1,097,234) |
Total common shares dividend paid | $ 2,947,185 | $ 2,837,058 |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Significant Accounting Policies | |
Note 1. Significant Accounting Policies | Note 1. Significant Accounting Policies The accounting policies of Community Bancorp. and Subsidiary (the Company) are in conformity, in all material respects, with U.S. generally accepted accounting principles (US GAAP) and general practices within the banking industry. The following is a description of the Company’s significant accounting policies. Basis of presentation and consolidation In addition to the definitions provided elsewhere in this Annual Report, the definitions, acronyms and abbreviations identified below are used throughout this Annual Report, including these “Notes to Consolidated Financial Statements” and the section labeled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” immediately following. These definitions are intended to aid the reader and provide a reference page when reviewing this Annual Report. ABS: Asset backed security FHA: Federal Housing Administration ACBB: Atlantic Community Bankers Bank FHLBB: Federal Home Loan Bank of Boston ACBI: Atlantic Community Bancshares, Inc. FHLMC : Federal Home Loan Mortgage Corporation ACH: Automated Clearing House FICO: Financing Corporation AFS: Available-for-sale FLA: First Loss Account Agency MBS: MBS issued by a US government agency FOMC: Federal Open Market Committee or GSE FRB: Federal Reserve Board ALCO: Asset Liability Committee FRBB: Federal Reserve Bank of Boston ALL: Allowance for loan losses GAAP: Generally Accepted Accounting Principles AML: Anti-money laundering laws in the United States AOCI: Accumulated other comprehensive income GSE: Government sponsored enterprise ASC: Accounting Standards Codification HMDA: Home Mortgage Disclosure Act ASU: Accounting Standards Update HTM: Held-to-maturity ATMs: Automatic teller machines ICS: Insured Cash Sweeps of the Promontory ATS: Automatic transfer service Interfinancial Network Bancorp: Community Bancorp. IRS: Internal Revenue Service Bank: Community National Bank JNE: Jobs for New England BHG: Bankers Healthcare Group Jr: Junior BIC: Borrower-in-Custody LIBOR: London Interbank Offered Rate Board: Board of Directors LLC: Limited liability corporation BOLI: Bank owned life insurance MBS: Mortgage-backed security bp or bps: Basis point(s) MPF: Mortgage Partnership Finance BSA: Bank Secrecy Act MSAs Metropolitan Statistical Areas CBLR: Community Bank Leverage Ratio MSRs: Mortgage servicing rights CARES ACT: Coronavirus Aid Relief and Economic NII: Net interest income Security Act OAS: Other amortizing security CDARS: Certificate of Deposit Accounts Registry OCI: Other comprehensive income (loss) Service of the Promontory Interfinancial OFAC: Office of Foreign Asset Control Network OREO: Other real estate owned CDs: Certificates of deposit OTTI: Other-than-temporary impairment CDI: Core deposit intangible PMI: Private mortgage insurance CECL: Current Expected Credit Loss PPP: Paycheck Protection Program CEO: Credit Enhancement Obligation PPPLF: Paycheck Protection Program Liquidity CFPB: Consumer Financial Protection Bureau Facility CFSG: Community Financial Services Group, LLC QM(s): Qualified Mortgage(s) CFS Partners: Community Financial Services Partners, RD: USDA Rural Development LLC RESPA: Real Estate Settlement Procedures Act Company: Community Bancorp. and Subsidiary SBA: U.S. Small Business Administration COVID-19: Coronavirus Disease 2019 SEC: U.S. Securities and Exchange Commission CRA: Community Reinvestment Act SERP: Supplemental Employee Retirement Plan CRE: Commercial Real Estate SOX: Sarbanes-Oxley Act of 2002 DDA or DDAs: Demand Deposit Account(s) TDR: Troubled-debt restructuring DIF: Deposit Insurance Fund TILA: Truth in Lending Act DTC: Depository Trust Company USDA: U.S. Department of Agriculture DRIP: Dividend Reinvestment Plan VA: U.S. Veterans Administration Exchange Act: Securities Exchange Act of 1934 VIE: Variable interest entities FASB: Financial Accounting Standards Board 2017 Tax Act: Tax Cut and Jobs Act of 2017 FDIA: Federal Deposit Insurance Act 2018 Economic Growth, Regulatory Relief and FDIC: Federal Deposit Insurance Corporation Regulatory Consumer Protection Act of 2018 FDICIA: Federal Deposit Insurance Company Relief Act: Improvement Act of 1991 The consolidated financial statements include the accounts of the Bancorp. and its wholly-owned subsidiary, the Bank. All significant intercompany accounts and transactions have been eliminated. The Company is considered a “smaller reporting company” under the disclosure rules of the SEC. Accordingly, the Company has elected to provide its audited consolidated statements of income, comprehensive income, cash flows and changes in shareholders’ equity for a two year, rather than a three year, period, and intends to provide smaller reporting company scaled disclosures where management deems it appropriate. Beginning with its periodic reports filed in 2018, the Company was considered an accelerated filer under the financial reporting rules of the SEC. However, these reporting rules were amended in 2020, causing the Company to be considered a non-accelerated file beginning with this annual report. FASB ASC Topic 810, “Consolidation”, in part, addresses limited purpose trusts formed to issue trust preferred securities. It also establishes the criteria used to identify VIE, and to determine whether or not to consolidate a VIE. In general, ASC Topic 810 provides that the enterprise with the controlling financial interest, known as the primary beneficiary, consolidates the VIE. In 2007, the Company formed CMTV Statutory Trust I for the purposes of issuing trust preferred securities to unaffiliated parties and investing the proceeds from the issuance thereof and the common securities of the trust in junior subordinated debentures issued by the Company. The Company is not the primary beneficiary of CMTV Statutory Trust I; accordingly, the trust is not consolidated with the Company for financial reporting purposes. CMTV Statutory Trust I is considered an affiliate of the Company (see Note 13). Nature of operations The Company provides a variety of deposit and lending services to individuals, municipalities, and business customers through its branches, ATMs and telephone, mobile and internet banking capabilities in northern and central Vermont, which is primarily a small business and agricultural area. The Company’s primary deposit products are checking and savings accounts and certificates of deposit. Its primary lending products are commercial, real estate, municipal and consumer loans. Concentration of risk The Company’s operations are affected by various risk factors, including interest rate risk, credit risk, and risk from geographic concentration of its deposit taking and lending activities. Management attempts to manage interest rate risk through various asset/liability management techniques designed to match maturities and repricing of assets and liabilities. Loan policies and administration are designed to provide assurance that loans will only be granted to creditworthy borrowers, although credit losses are expected to occur because of subjective factors inherent in management’s estimate of credit risk and factors beyond the control of the Company. While the Company has a diversified loan portfolio by loan type, most of its lending activities are conducted within the geographic area where its banking offices are located. As a result, the Company and its borrowers may be especially vulnerable to the consequences of changes in the local economy in northern and central Vermont. In addition, a substantial portion of the Company’s loans are secured by real estate, which is susceptible to a decline in value, especially during times of adverse economic conditions. Use of estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions involve inherent uncertainties. Accordingly, actual results could differ from those estimates and those differences could be material. Material estimates that are particularly susceptible to significant change include those relating to the determination of the ALL and the valuation of OREO. In connection with evaluating loans for impairment or assigning the carrying value of OREO, management generally obtains independent evaluations or appraisals for significant properties. While the ALL and the carrying value of OREO are determined using management’s best estimate of probable loan and OREO losses, respectively, as of the balance sheet date, the ultimate collection of a substantial portion of the Company’s loan portfolio and the recovery of a substantial portion of the fair value of OREO are susceptible to uncertainties and changes in a number of factors, especially local real estate market conditions. The amount of the change that is reasonably possible cannot be estimated. While management uses available information to recognize losses on loans and OREO, future additions to the allowance or write-downs of OREO may be necessary based on changes in local economic conditions or other relevant factors. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for losses on loans and the carrying value of OREO. Such agencies may require the Company to recognize additions to the allowance or write-downs of OREO based on their judgment about information available to them at the time of their examination. MSRs associated with loans originated and sold in the secondary market, where servicing is retained, are capitalized and included in Other assets in the consolidated balance sheets. MSRs are amortized against non-interest income in proportion to, and over the period of, estimated future net servicing income of the underlying loans. The value of capitalized servicing rights represents the present estimated value of the future servicing fees arising from the right to service loans for third parties. The carrying value of the MSRs is periodically reviewed for impairment based on management’s estimate of fair value as compared to amortized cost, and impairment, if any, is recognized through a valuation allowance and is recorded as a write down. Critical accounting policies for MSRs relate to the initial valuation and subsequent impairment tests. The methodology used to determine the valuation of MSRs requires the development and use of estimates, including anticipated principal amortization and prepayments. Events that may significantly affect the estimates used are changes in interest rates and the payment performance of the underlying loans. Management uses a third party consultant to assist in estimating the fair value of the Company’s MSRs. Management evaluates securities for OTTI on at least a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. Consideration is given to various factors, including the length of time and the extent to which the fair value has been less than cost; the nature of the issuer and its financial condition and near-term prospects; and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. The evaluation of these factors is a subjective process and involves estimates and assumptions about matters that are inherently uncertain. Should actual factors and conditions differ materially from those used by management, the actual realization of gains or losses on investment securities could differ materially from the amounts recorded in the financial statements. Accounting for a business combination that was completed prior to 2009 requires the application of the purchase method of accounting. Under the purchase method, the Company was required to record the assets and liabilities acquired through the LyndonBank merger in 2007 at fair market value, with the excess of the purchase price over the fair value of the net assets recorded as goodwill and evaluated annually for impairment. Management uses various assumptions in evaluating goodwill for impairment. Management utilizes numerous techniques to estimate the carrying value of various other assets held by the Company, including, but not limited to, bank premises and equipment and deferred taxes. The assumptions considered in making these estimates are based on historical experience and on various other factors that are believed by management to be reasonable under the circumstances. Management acknowledges that the use of different estimates or assumptions could produce different estimates of carrying values. Presentation of cash flows For purposes of presentation in the consolidated statements of cash flows, cash and cash equivalents includes cash on hand, amounts due from banks (including cash items in process of clearing), federal funds sold (generally purchased and sold for one day periods) and overnight deposits. Investment securities Debt securities the Company has purchased with the possible intent to sell before maturity are classified as AFS, and are carried at fair value, with unrealized gains and losses, net of tax and reclassification adjustments, reflected as a net amount in the shareholders’ equity section of the consolidated balance sheets and in the statements of changes in shareholders’ equity. Investment securities transactions are accounted for on a trade date basis. The specific identification method is used to determine realized gains and losses on sales of debt securities AFS. Premiums and discounts are recognized in interest income using the interest method over the period to maturity or call date. As of the balance sheet dates, the Company did not hold any securities purchased for the purpose of selling in the near term and classified as trading or any securities purchased with the positive intent and ability to hold to maturity and classified as HTM. For individual debt securities that the Company does not intend to sell and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, the other-than-temporary decline in the fair value of the debt security related to (1) credit loss is recognized in earnings and (2) other factors is recognized in other comprehensive income or loss. Credit loss is deemed to exist if the present value of expected future cash flows using the interest rates at acquisition is less than the amortized cost basis of the debt security. For individual debt securities where the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost, the OTTI is recognized in earnings equal to the entire difference between the security’s cost basis and its fair value at the balance sheet date. Other investments From time to time, the Company acquires partnership interests in limited partnerships for low income housing projects. New investments in limited partnerships are amortized using the proportional amortization method. All investments made before January 1, 2015 are amortized using the effective yield method. The Company has a one-third ownership interest in CFS Partners, which in turn owns 100% of CFSG, a non-depository trust company (see Note 10). The Company’s investment in CFS Partners is accounted for under the equity method of accounting. Restricted equity securities The Company holds certain restricted equity securities acquired for non-investment purposes, and required as a matter of law or as a condition to the receipt of certain financial products and services. These securities are carried at cost. As a member of the FRBB, the Company is required to invest in FRBB stock in an amount equal to 6% of the Bank’s capital stock and surplus. As a member of the FHLBB, the Company is required to invest in $100 par value stock of the FHLBB in an amount that approximates 1% of unpaid principal balances on qualifying loans, plus an additional amount to satisfy an activity based requirement. The stock is nonmarketable and redeemable at par value, subject to the FHLBB’s right to temporarily suspend such redemptions. Members are subject to capital calls in some circumstances to ensure compliance with the FHLBB’s capital plan. In order to access correspondent banking services from the ACBB,the Company is required to invest in a minimum of 20 shares of the common stock of ACBB’s parent company, ACBI. Loans held-for-sale Loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance by charges to income. Loans Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are reported at their outstanding principal balance, adjusted for any charge-offs, the ALL, loan premiums or discounts for acquired loans and any unearned fees or costs on originated loans. Loan interest income is accrued daily on the outstanding balances. For all loan segments, the accrual of interest is discontinued when a loan is specifically determined to be impaired or when the loan is delinquent 90 days and management believes, after considering collection efforts and other factors, that the borrower’s financial condition is such that collection of interest is doubtful. Any unpaid interest previously accrued on those loans is reversed from income. Interest income is generally not recognized on specific impaired loans unless the likelihood of further loss is considered by management to be remote. Interest payments received on non-accrual loans are generally applied as a reduction of the loan principal balance. Loans are returned to accrual status when principal and interest payments are brought current and the customer has demonstrated the intent and ability to make future payments on a timely basis. Loans are written down or charged off when collection of principal is considered doubtful. Loan origination and commitment fees and certain direct loan origination costs are deferred and the net amount is amortized as an adjustment of the related loan’s yield. The Company generally amortizes these amounts over the contractual life of the loans. Loan premiums and discounts on loans acquired in the merger with LyndonBank were amortized as an adjustment to yield on loans. At December 31, 2019, the remainder of these premiums and discounts were fully amortized. Allowance for loan losses The ALL is established through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes that future payments of a loan balance are unlikely. Subsequent recoveries, if any, are credited to the allowance. Unsecured loans, primarily consumer loans, are charged off when they become uncollectible and no later than 120 days past due. Unsecured loans to customers who subsequently file bankruptcy are charged off within 30 days of receipt of the notification of filing or by the end of the month in which the loans become 120 days past due, whichever occurs first. For secured loans, both residential and commercial, the potential loss on impaired loans is carried as a loan loss reserve specific allocation; the loss portion is charged off when collection of the full loan appears unlikely. The unsecured portion of a real estate loan is that portion of the loan exceeding the “fair value” of the collateral less the estimated cost to sell. Value of the collateral is determined in accordance with the Company’s appraisal policy. The unsecured portion of an impaired real estate secured loan is charged off by the end of the month in which the loan becomes 180 days past due. As described below, the allowance consists of general, specific and unallocated components. However, the entire allowance is available to absorb losses in the loan portfolio, regardless of specific, general and unallocated components considered in determining the amount of the allowance. General component The general component of the ALL is based on historical loss experience and various qualitative factors and is stratified by the following loan segments: commercial and industrial, CRE, municipal, residential real estate 1st lien, residential real estate Jr lien and consumer loans. The Company does not disaggregate its portfolio segments further into classes. Loss ratios are calculated by loan segment using appropriate look back periods. Management uses an average of historical losses based on a time frame appropriate to capture relevant loss data for each loan segment in the current economic climate. During periods of economic stability, a relatively longer period (e.g., five years) may be appropriate. During periods of significant expansion or contraction, the Company may appropriately shorten the historical time period. Due primarily to the effects of COVID-19, beginning in the second quarter of 2020, the Company shortened its look back period from five years to one year. Qualitative factors include the levels of and trends in delinquencies and non-performing loans, levels of and trends in loan risk groups, trends in volumes and terms of loans, effects of any changes in loan related policies, experience, ability and the depth of management, documentation and credit data exception levels, national and local economic trends, external factors such as competition and regulation and lastly, concentrations of credit risk in a variety of areas, including portfolio product mix, the level of loans to individual borrowers and their related interests, loans to industry segments, and the geographic distribution of CRE loans. This evaluation is inherently subjective as it requires estimates that are susceptible to revision as more information becomes available. The qualitative factors are determined based on the various risk characteristics of each loan segment. During the third quarter of 2020, the Company adjusted its ALL analysis to begin applying qualitative factors to municipal loans and certain purchased commercial loans, for which the Company does not have any historical loss data. Of the third quarter 2020 provision for loan losses of $362,499, $106,821was attributable to this change. The Company has policies, procedures and internal controls that management believes are commensurate with the risk profile of each of these segments. Major risk characteristics relevant to each portfolio segment are as follows: Commercial & Industrial - Commercial Real Estate - Municipal - Residential Real Estate - 1 st Residential Real Estate - Jr Lien - Consumer - Specific component The specific component of the ALL relates to loans that are impaired. Impaired loans are loans to a borrower that in the aggregate are greater than $100,000 and that are in non-accrual status or are TDRs regardless of amount. A specific allowance is established for an impaired loan when its estimated fair value or net present value of future cash flows is less than the carrying value of the loan. For all loan segments, except consumer loans, a loan is considered impaired when, based on current information and events, in management’s estimation it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant or temporary payment delays and payment shortfalls generally are not classified as impaired. Management evaluates 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 and frequency 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. Impairment is measured on a loan by loan basis, by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent. Impaired loans also include troubled loans that are restructured. A TDR occurs when the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower that would otherwise not be granted. TDRs may include the transfer of assets to the Company in partial satisfaction of a troubled loan, a modification of a loan’s terms, or a combination of the two. As described in Note 3, under March 2020 guidance from the federal banking agencies and concurrence by the FASB, certain short-term loan accommodations made in good faith for borrowers experiencing financial difficulties due to the COVID-19 health emergency are not considered TDRs. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer loans for impairment evaluation, unless such loans are subject to a restructuring agreement. Unallocated component An unallocated component of the ALL is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component reflects management’s estimate of the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. Bank premises and equipment Bank premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed principally by the straight-line method over the estimated useful lives of the assets. The cost of assets sold or otherwise disposed of, and the related accumulated depreciation, are eliminated from the accounts and the resulting gains or losses are reflected in the consolidated statements of income. Maintenance and repairs are charged to current expense as incurred and the cost of major renewals and betterments is capitalized. Other real estate owned Real estate properties acquired through or in lieu of loan foreclosure or properties no longer used for bank operations are initially recorded at fair value less estimated selling cost at the date of acquisition, foreclosure or transfer. Fair value is determined, as appropriate, either by obtaining a current appraisal or evaluation prepared by an independent, qualified appraiser, by obtaining a broker’s market value analysis, and finally, if the Company has limited exposure and limited risk of loss, by the opinion of management as supported by an inspection of the property and its most recent tax valuation. During periods of declining market values, the Company will generally obtain a new appraisal or evaluation. Any write-down based on the asset’s fair value at the date of acquisition or institution of foreclosure is charged to the ALL. After acquisition through or in lieu of foreclosure, these assets are carried at the lower of their new cost basis or fair value. Costs of significant property improvements are capitalized, whereas costs relating to holding the property are expensed as incurred. Appraisals by an independent, qualified appraiser are performed periodically on properties that management deems significant, or evaluations may be performed by management or a qualified third party on OREO properties in the portfolio that are deemed less significant or less vulnerable to market conditions. Subsequent write-downs are recorded as a charge to other expense. Gains or losses on the sale of such properties are included in income when the properties are sold. Intangible assets Intangible assets include the excess of the purchase price over the fair value of net assets acquired (goodwill) in the Company’s 2007 acquisition of LyndonBank. Goodwill is not amortizable and is reviewed for impairment annually, or more frequently as events or circumstances warrant. Income taxes The Company recognizes income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are established for the temporary differences between the accounting bases and the tax bases of the Company’s assets and liabilities at enacted tax rates expected to be in effect when the amounts related to such temporary differences are realized or settled. Adjustments to the Company’s deferred tax assets are recognized as deferred income tax expense or benefit based on management’s judgments relating to the outcome of such asset. Mortgage servicing Servicing assets are recognized as separate assets when rights are acquired through purchase or retained upon the sale of loans. Capitalized servicing rights are reported in Other assets and initially recorded at fair value, and are amortized against non-interest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. Servicing rights are periodically evaluated for impairment, based upon the estimated fair value of the rights as compared to amortized cost. Impairment is determined by stratifying the rights by predominant characteristics, such as interest rates and terms. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Impairment is recognized through a valuation allowance and is recorded as amortization of Other assets, to the extent that estimated fair value is less than the capitalized amount at the valuation date. Subsequent improvement, if any, in the estimated fair value of impaired MSRs is reflected in a positive valuation adjustment and is recognized in other income up to (but not in excess of) the amount of the prior impairment. Pension costs Pension costs are charged to salaries and employee benefits expense and accrued over the active service period. Advertising costs The Company expenses advertising costs as incurred. Comprehensive income US GAAP generally requires recognized revenue, expenses, gains and losses to be included in net income. Certain changes in assets and liabilities, such as the after-tax effect of unrealized gains and losses on available-for-sale securities, are not reflected in the consolidated statement of income, but the cumulative effect of such items from period-to-period is reflected as a separate component of the shareholders’ equity section of the consolidated balance sheet (accumulated other comprehensive income or loss). Other comprehensive income or loss, along with net income, comprises the Company’s total comprehensive income. Preferred stock In December, 2007 the Company issued25shares of fixed-to-floating rate non-cumulative perpetual preferred stock, without par value and having a liquidation preference of $100,000per share. There were 15 shares of preferred stock outstanding as of December 31, 2020 and 2019. Under the terms of the preferred stock, the Company pays non-cumulative cash dividends quarterly, when, as and if declared by the Board. Dividends are payable at a variable dividend rate equal to the Wall Street Journal Prime Rate in effect on the first business day of each quarterly dividend period. A variable rate of 5.50% was in effect for the dividend payments due in each of the first three quarters of 2019, followed by a decrease to a rate of 5.00% for the dividend payment in the fourth quarter of 2019. The rate decreased to 4.75% for the dividend paid in the first quarter of 2020, followed by two decreases with a rate of 3.25% in effect for the last three quarters of 2020, as well as the first quarter of 2021. Partial redemptions of the Company’s preferred stock began in 2018, and are at the discretion of management and voted on by the Board. The Company redeemed five shares of preferred stock on March 31, 2019 at a redemption price of $500,000plus accrued dividends. The Company chose to not redeem any additional preferred shares during 2020, but may consider further redemptions in future periods. Earnings per common share Earnings per common share amounts are computed based on net income, net of dividends to preferred shareholders, and on the weighted average nu |
Risks and Uncertainties
Risks and Uncertainties | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties | |
Note 2. Risks and Uncertainties | Note 2. Risks and Uncertainties On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 as a global pandemic, and on March 13, 2020 President Trump declared the pandemic to be a national emergency. The COVID-19 pandemic has adversely affected, and may continue to adversely affect, economic activity globally, nationally and locally. Government actions taken to help mitigate the spread of COVID-19 include restrictions on travel, quarantines in certain areas, and forced closures for certain types of public places and businesses. COVID-19 and actions taken to mitigate the spread of it have had and are expected to continue to have an adverse impact on financial markets and the economy, including the local economy in the Company’s Vermont and New Hampshire markets, with adverse effects on business and consumer confidence generally, and on the Company’s customers, and their employees, suppliers, vendors and processors. Forced closures of businesses have resulted in sharp increases in unemployment. In addition, due to the COVID-19 pandemic, market interest rates have declined significantly, with the 10-year Treasury bond falling below 1.00 percent on March 3, 2020 for the first time. On March 3, 2020, the FOMC reduced the targeted federal funds interest rate range by 50 bps to a range of 1.00% to 1.25%. This range was further reduced to a range of 0 percent to 0.25% on March 16, 2020. On April 29, 2020, the FOMC indicated that the federal funds target rate range will remain unchanged until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals. The FOMC reiterated that position throughout the remainder of 2020. These reductions in interest rates and other effects of the COVID-19 pandemic adversely affect the Company’s business, financial condition and results of operations and may continue to do so in future periods. It is unknown how long the adverse economic conditions associated with the COVID-19 pandemic will last and what the complete financial effect will be to the Company. Due to the inherent economic and other uncertainties related to the COVID-19 pandemic, it is reasonably possible that estimates made in the Company’s consolidated financial statements could be materially and adversely impacted in the near term as a result of the pandemic, including expected credit losses on loan receivables. |
Recent Accounting Developments
Recent Accounting Developments | 12 Months Ended |
Dec. 31, 2020 | |
Recent Accounting Developments | |
Note 3. Recent Accounting Developments | Note 3. Recent Accounting Developments In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In January 2017, the FASB issued ASU No. 2017-04, Intangibles Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement In March and April, 2020, federal banking regulators issued interagency guidance on accounting for loan modifications in light of the economic impact of the COVID-19 pandemic. The guidance interprets current accounting standards and indicates that a lender can conclude that a borrower is not experiencing financial difficulty if short-term (that is, six months or less) modifications are made in response to COVID-19, such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant, provided that the loan is less than 30 days past due at the time a modification program is implemented. The banking agencies confirmed with the staff of the FASB that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not TDRs under ASC No. 310-40, Receivables - Troubled Debt Restructurings by Creditors |
Investment Securities
Investment Securities | 12 Months Ended |
Dec. 31, 2020 | |
Investment Securities | |
Note 4. Investment Securities | Note 4. Investment Securities Debt securities AFS consist of the following: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value December 31, 2020 U.S. GSE debt securities $ 8,007,142 $ 165,934 $ 3,245 $ 8,169,831 Agency MBS 40,861,370 547,930 30,951 41,378,349 ABS and OAS 2,508,997 160,999 0 2,669,996 Other investments 8,169,000 318,002 0 8,487,002 Total $ 59,546,509 $ 1,192,865 $ 34,196 $ 60,705,178 December 31, 2019 U.S. GSE debt securities $ 18,002,549 $ 99,743 $ 40,672 $ 18,061,620 Agency MBS 16,169,819 86,874 51,318 16,205,375 ABS and OAS 2,799,657 55,418 2,166 2,852,909 Other investments 8,665,000 181,846 0 8,846,846 Total $ 45,637,025 $ 423,881 $ 94,156 $ 45,966,750 Investments pledged as collateral for larger dollar repurchase agreement accounts and for other purposes as required or permitted by law consisted of U.S. GSE debt securities, Agency MBS, ABS and OAS, and CDs. These repurchase agreements mature daily. These investments as of the balance sheet dates were as follows: Amortized Fair Cost Value December 31, 2020 $ 59,546,509 $ 60,705,178 December 31, 2019 45,637,025 45,966,750 Proceeds from sales of debt securities AFS were $884,137in 2020 and $6,553,118in 2019 with gains of $39,086and $1,570, respectively, and losses of $0 and $28,060, respectively. The carrying amount and estimated fair value of securities by contractual maturity are shown below. Expected maturities will differ from contractual maturities because issuers may call or prepay obligations with or without call or prepayment penalties, pursuant to contractual terms. Because the actual maturities of Agency MBS usually differ from their contractual maturities due to the right of borrowers to prepay the underlying mortgage loans, usually without penalty, those securities are not presented in the following table by contractual maturity date. The scheduled maturities of debt securities AFS at December 31, 2020 were as follows: Amortized Fair Cost Value Due in one year or less $ 2,227,000 $ 2,247,603 Due from one to five years 5,942,000 6,239,399 Due from five to ten years 9,511,476 9,801,921 Due after ten years 1,004,663 1,037,906 Agency MBS 40,861,370 41,378,349 Total $ 59,546,509 $ 60,705,178 Debt securities with unrealized losses as of the balance sheet dates are presented in the tables below. Less than 12 months 12 months or more Totals Fair Unrealized Fair Unrealized Number of Fair Unrealized Value Loss Value Loss Securities Value Loss December 31, 2020 U.S. GSE debt securities $ 1,999,234 $ 3,245 $ 0 $ 0 2 $ 1,999,234 $ 3,245 Agency MBS 2,076,167 19,845 520,546 11,106 6 2,596,713 30,951 ABS and OAS 0 0 0 0 0 0 0 Other investments 0 0 0 0 0 0 0 Total $ 4,075,401 $ 23,090 $ 520,546 $ 11,106 8 $ 4,595,947 $ 34,196 December 31, 2019 U.S. GSE debt securities $ 7,964,192 $ 40,672 $ 0 $ 0 7 $ 7,964,192 $ 40,672 Agency MBS 5,273,683 24,648 2,920,091 26,670 13 8,193,774 51,318 ABS and OAS 1,000,490 2,166 0 0 1 1,000,490 2,166 Other investments 0 0 0 0 0 0 0 Total $ 14,238,365 $ 67,486 $ 2,920,091 $ 26,670 21 $ 17,158,456 $ 94,156 Management evaluates securities for OTTI at least on a quarterly basis, and more frequently when economic or market conditions, or adverse developments relating to the issuer, warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. As the Company has the ability to hold its debt securities until maturity, or for the foreseeable future if classified as AFS, and it is more likely than not that the Company will not have to sell such securities before recovery of their cost basis, no declines in such securities were deemed to be other-than-temporary as of the balance sheet dates presented. The Bank is a member of the FHLBB. The FHLBB is a cooperatively owned wholesale bank for housing and finance in the six New England States. Its mission is to support the residential mortgage and community-development lending activities of its members, which include over 450 financial institutions across New England. The Company obtains much of its wholesale funding from the FHLBB. As a requirement of membership in the FHLBB, the Bank must own a minimum required amount of FHLBB stock, calculated periodically based primarily on the Bank’s level of borrowings from the FHLBB. As a result of the Bank’s level of borrowings during 2020 and 2019, the Bank was required to purchase additional FHLBB stock in aggregate totaling $537,100 and $176,000, respectively. As a member of the FHLBB, the Company is also subject to future capital calls by the FHLBB in order to maintain compliance with its capital plan. During 2020 and 2019, FHLBB exercised capital call options with redemptions totaling $522,400and $493,600, respectively, on the Company’s portfolio of FHLBB stock. As of December 31, 2020 and 2019, the Company’s investment in FHLBB stock was $768,400and $753,700, respectively. The Company periodically evaluates its investment in FHLBB stock for impairment based on, among other factors, the capital adequacy of the FHLBB and its overall financial condition. No impairment losses have been recorded through December 31, 2020. The Company’s investment in FRBB Stock was $588,150at December 31, 2020 and 2019. In 2018, the Company purchased 20 shares of common stock in ACBI at a purchase price of $90,000, for the purpose of obtaining access to correspondent banking services from ABCI’s subsidiary, ACBB. These shares are subject to contractual resale restrictions and considered by management to be restricted and are recorded in the balance sheet at cost amounting to $90,000at December 31, 2020 and 2019. |
Loans, Allowance for Loan Losse
Loans, Allowance for Loan Losses and Credit Quality | 12 Months Ended |
Dec. 31, 2020 | |
Loans, Allowance for Loan Losses and Credit Quality | |
Note 5. Loans, Allowance for Loan Losses and Credit Quality | Note 5. Loans, Allowance for Loan Losses and Credit Quality The composition of net loans as of the balance sheet dates was as follows: December 31, December 31, 2020 2019 Commercial & industrial $ 161,067,501 $ 98,930,831 Commercial real estate 280,544,550 246,282,726 Municipal 54,807,367 55,817,206 Residential real estate - 1st lien 170,507,263 158,337,296 Residential real estate - Jr lien 38,147,659 43,230,873 Consumer 4,280,990 4,390,005 Total loans 709,355,330 606,988,937 Deduct (add): ALL 7,208,485 5,926,491 Deferred net loan fees (costs) 1,195,741 (362,415 ) Net loans $ 700,951,104 $ 601,424,861 The following is an age analysis of loans (including non-accrual), as of the balance sheet dates, by portfolio segment: 90 Days Total Non- Accrual 90 Days or More and December 31, 2020 30-89 Days or More Past Due Current Total Loans Loans Accruing Commercial & industrial $ 119,413 $ 0 $ 119,413 $ 160,948,088 $ 161,067,501 $ 434,196 $ 0 Commercial real estate 127,343 567,957 695,300 279,849,250 280,544,550 1,875,942 0 Municipal 0 0 0 54,807,367 54,807,367 0 0 Residential real estate 1st lien 1,872,439 828,344 2,700,783 167,806,480 170,507,263 2,173,315 390,288 Jr lien 18,322 180,711 199,033 37,948,626 38,147,659 191,311 98,889 Consumer 14,388 0 14,388 4,266,602 4,280,990 0 0 Totals $ 2,151,905 $ 1,577,012 $ 3,728,917 $ 705,626,413 $ 709,355,330 $ 4,674,764 $ 489,177 90 Days Total Non- Accrual 90 Days or More and December 31, 2019 30-89 Days or More Past Due Current Total Loans Loans Accruing Commercial & industrial $ 68,532 $ 44,503 $ 113,035 $ 98,817,796 $ 98,930,831 $ 480,083 $ 0 Commercial real estate 1,690,307 151,723 1,842,030 244,440,696 246,282,726 1,600,827 0 Municipal 0 0 0 55,817,206 55,817,206 0 0 Residential real estate 1st lien 3,871,045 1,217,098 5,088,143 153,249,153 158,337,296 2,112,267 530,046 Jr lien 331,416 147,976 479,392 42,751,481 43,230,873 240,753 112,386 Consumer 49,607 0 49,607 4,340,398 4,390,005 0 0 Totals $ 6,010,907 $ 1,561,300 $ 7,572,207 $ 599,416,730 $ 606,988,937 $ 4,433,930 $ 642,432 For all loan segments, loans over 30 days past due are considered delinquent. As of the balance sheet dates presented, residential mortgage loans in process of foreclosure consisted of the following: Number of loans Balance December 31, 2020 6 $ 312,807 December 31, 2019 9 495,943 As of December 31, 2020, a foreclosure moratorium first decreed in April, 2020 by the State of Vermont due to the COVID-19 emergency remained in effect. The following summarizes changes in the ALL and select loan information, by portfolio segment: As of or for the year ended December 31, 2020 Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate Municipal 1st Lien Jr Lien Consumer Unallocated Total ALL beginning balance $ 836,766 $ 3,181,646 $ 0 $ 1,388,564 $ 289,684 $ 51,793 $ 178,038 $ 5,926,491 Charge-offs (39,148 ) (34,200 ) 0 (203,623 ) (28,673 ) (74,327 ) 0 (379,971 ) Recoveries 1,087 20,000 0 12,856 5,809 33,213 0 72,965 Provision (credit) 43,842 686,707 82,211 537,507 (31,924 ) 49,782 220,875 1,589,000 ALL ending balance $ 842,547 $ 3,854,153 $ 82,211 $ 1,735,304 $ 234,896 $ 60,461 $ 398,913 $ 7,208,485 ALL evaluated for impairment Individually $ 0 $ 0 $ 0 $ 108,474 $ 307 $ 0 $ 0 $ 108,781 Collectively 842,547 3,854,153 82,211 1,626,830 234,589 60,461 398,913 7,099,704 Total $ 842,547 $ 3,854,153 $ 82,211 $ 1,735,304 $ 234,896 $ 60,461 $ 398,913 $ 7,208,485 Loans evaluated for impairment Individually $ 414,266 $ 1,943,723 $ 0 $ 4,657,050 $ 135,053 $ 0 $ 7,150,092 Collectively 160,653,235 278,600,827 54,807,367 165,850,213 38,012,606 4,280,990 702,205,238 Total $ 161,067,501 $ 280,544,550 $ 54,807,367 $ 170,507,263 $ 38,147,659 $ 4,280,990 $ 709,355,330 As of or for the year ended December 31, 2019 Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate Municipal 1st Lien Jr Lien Consumer Unallocated Total ALL beginning balance $ 697,469 $ 3,019,868 $ 0 $ 1,421,494 $ 273,445 $ 56,787 $ 133,478 $ 5,602,541 Charge-offs (175,815 ) (116,186 ) 0 (242,244 ) (222,999 ) (102,815 ) 0 860,059 ) Recoveries 10,768 50,388 0 15,776 2,200 38,710 0 117,842 Provision 304,344 227,576 0 193,538 237,038 59,111 44,560 1,066,167 ALL ending balance $ 836,766 $ 3,181,646 $ 0 $ 1,388,564 $ 289,684 $ 51,793 $ 178,038 $ 5,926,491 ALL evaluated for impairment Individually $ 0 $ 0 $ 0 $ 103,836 $ 712 $ 0 $ 0 $ 104,548 Collectively 836,766 3,181,646 0 1,284,728 288,972 51,793 178,038 5,821,943 Total $ 836,766 $ 3,181,646 $ 0 $ 1,388,564 $ 289,684 $ 51,793 $ 178,038 $ 5,926,491 Loans evaluated for impairment Individually $ 420,933 $ 1,699,238 $ 0 $ 4,471,902 $ 156,073 $ 0 $ 6,748,146 Collectively 98,509,898 244,583,488 55,817,206 153,865,394 43,074,800 4,390,005 600,240,791 Total $ 98,930,831 $ 246,282,726 $ 55,817,206 $ 158,337,296 $ 43,230,873 $ 4,390,005 $ 606,988,937 Impaired loans as of the balance sheet dates, by portfolio segment were as follows: As of December 31, 2020 Unpaid Average Interest Recorded Principal Related Recorded Income Investment(1) Balance Allowance Investment(1)(2) Recognized(2) Related allowance recorded Residential real estate 1st lien $ 900,581 $ 950,063 $ 108,474 $ 889,262 $ 72,713 Jr lien 4,777 4,775 307 5,416 541 Total with related allowance 905,358 954,838 108,781 894,678 73,254 No related allowance recorded Commercial & industrial 414,266 471,405 397,136 6,396 Commercial real estate 1,944,013 2,394,284 1,746,430 14,139 Residential real estate 1st lien 3,788,965 4,607,848 3,878,829 230,838 Jr lien 130,279 169,720 163,750 4,524 Total with no related allowance 6,277,523 7,643,257 6,186,145 255,897 Total impaired loans $ 7,182,881 $ 8,598,095 $ 108,781 $ 7,080,823 $ 329,151 1) Recorded investment in impaired loans in the table above includes accrued interest receivable and deferred net loan costs of $32,789. 2) For the year ended December 31, 2020. As of December 31, 2019 Unpaid Average Interest Recorded Principal Related Recorded Income Investment(1) Balance Allowance Investment(1)(2) Recognized(2) Related allowance recorded Commercial & industrial $ 0 $ 0 $ 0 $ 32,466 $ 0 Commercial real estate 0 0 0 97,720 0 Residential real estate 1st lien 878,439 902,000 103,836 982,158 86,039 Jr lien 6,121 6,101 712 6,869 648 Total with related allowance 884,560 908,101 104,548 1,119,213 86,687 No related allowance recorded Commercial & industrial 420,933 445,509 307,208 6,396 Commercial real estate 1,699,772 2,031,764 1,812,836 21,591 Residential real estate 1st lien 3,614,960 4,273,884 3,778,822 212,883 Jr lien 149,972 157,754 224,938 4,524 Total with no related allowance 5,885,637 6,908,911 6,123,804 245,394 Total impaired loans $ 6,770,197 $ 7,817,012 $ 104,548 $ 7,243,017 $ 332,081 1) Recorded investment in impaired loans in the table above includes accrued interest receivable and deferred net loan costs of $22,051. 2) For the year ended December 31, 2019. Credit Quality Grouping In developing the ALL, management uses credit quality groupings to help evaluate trends in credit quality. The Company groups credit risk into Groups A, B and C. The manner the Company utilizes to assign risk grouping is driven by loan purpose. Commercial purpose loans are individually risk graded while the retail portion of the portfolio is generally grouped by delinquency pool. Group A loans - Acceptable Risk Group B loans - Management Involved Group C loans - Unacceptable Risk Commercial purpose loan ratings are assigned by the commercial account officer; for larger and more complex commercial loans, the credit rating is a collaborative assignment by the lender and the credit analyst. The credit risk rating is based on the borrower’s expected performance, i.e., the likelihood that the borrower will be able to service its obligations in accordance with the loan terms. Credit risk ratings are meant to measure risk versus simply record history. Assessment of expected future payment performance requires consideration of numerous factors. While past performance is part of the overall evaluation, expected performance is based on an analysis of the borrower’s financial strength, and historical and projected factors such as size and financing alternatives, capacity and cash flow, balance sheet and income statement trends, the quality and timeliness of financial reporting, and the quality of the borrower’s management. Other factors influencing the credit risk rating to a lesser degree include collateral coverage and control, guarantor strength and commitment, documentation, structure and covenants and industry conditions. There are uncertainties inherent in this process. Credit risk ratings are dynamic and require updating whenever relevant information is received. Risk ratings are assessed on an ongoing basis and at various points, including at delinquency or at the time of other adverse events. For larger, more complex or adversely rated loans, risk ratings are also assessed at the time of annual or periodic review. Lenders are required to make immediate disclosure to the Senior Credit Officer of any known increase in loan risk, even if considered temporary in nature. The risk ratings within the loan portfolio, by segment, as of the balance sheet dates were as follows: As of December 31, 2020 Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate Municipal 1st Lien Jr Lien Consumer Total Group A $ 156,748,590 $ 261,932,833 $ 54,807,367 $ 167,478,918 $ 37,850,056 $ 4,280,990 $ 683,098,754 Group B 998,641 12,784,078 0 0 0 0 13,782,719 Group C 3,320,270 5,827,639 0 3,028,345 297,603 0 12,473,857 Total $ 161,067,501 $ 280,544,550 $ 54,807,367 $ 170,507,263 $ 38,147,659 $ 4,280,990 $ 709,355,330 As of December 31, 2019 Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate Municipal 1st Lien Jr Lien Consumer Total Group A $ 93,774,871 $ 233,702,063 $ 55,817,206 $ 154,770,678 $ 42,725,543 $ 4,390,005 $ 585,180,366 Group B 3,295,223 4,517,811 0 0 0 0 7,813,034 Group C 1,860,737 8,062,852 0 3,566,618 505,330 0 13,995,537 Total $ 98,930,831 $ 246,282,726 $ 55,817,206 $ 158,337,296 $ 43,230,873 $ 4,390,005 $ 606,988,937 Modifications of Loans and TDRs A loan is classified as a TDR if, for economic or legal reasons related to a borrower’s financial difficulties, the Company grants a concession to the borrower that it would not otherwise consider. The Company is deemed to have granted such a concession if it has modified a troubled loan in any of the following ways: · Reduced accrued interest; · Reduced the original contractual interest rate to a rate that is below the current market rate for the borrower; · Converted a variable-rate loan to a fixed-rate loan; · Extended the term of the loan beyond an insignificant delay; · Deferred or forgiven principal in an amount greater than three months of payments; or · Performed a refinancing and deferred or forgiven principal on the original loan. · Capitalized protective advance to pay delinquent real estate taxes. · Capitalized delinquent accrued interest. An insignificant delay or insignificant shortfall in the amount of payments typically would not require the loan to be accounted for as a TDR. However, pursuant to regulatory guidance, any payment delay longer than three months is generally not considered insignificant. Management’s assessment of whether a concession has been granted also takes into account payments expected to be received from third parties, including third-party guarantors, provided that the third party has the ability to perform on the guarantee. The Company’s TDRs are principally a result of extending loan repayment terms to relieve cash flow difficulties. The Company has only, on a limited basis, reduced interest rates for borrowers below the current market rate for the borrower. The Company has not forgiven principal or reduced accrued interest within the terms of original restructurings, nor has it converted variable rate terms to fixed rate terms. However, the Company evaluates each TDR situation on its own merits and does not foreclose the granting of any particular type of concession. The Company has adopted the TDR guidance issued by the federal banking agencies in March and April 2020 regarding the treatment of certain short-term loan modifications relating to the COVID-19 pandemic (See Note 3). Under this guidance, qualifying concessions and modifications are not considered TDRs. As of December 31, 2020, the Company had granted short term loan concessions and/or modifications within the terms of this guidance to 514 borrowers, with respect to loans having an aggregate principal amount of $119.8 million. These loans may bear a higher risk of default in future periods. New TDRs, by portfolio segment, for the periods presented were as follows: Year ended December 31, 2020 Pre- Post- Modification Modification Outstanding Outstanding Number of Recorded Recorded Contracts Investment Investment Residential real estate 1st lien 6 $ 591,826 $ 687,751 Year ended December 31, 2019 Pre- Post- Modification Modification Outstanding Outstanding Number of Recorded Recorded Contracts Investment Investment Commercial & industrial 6 $ 371,358 $ 372,259 Commercial real estate 1 19,266 21,628 Residential real estate 1st lien 6 755,476 798,800 Jr lien 1 55,557 57,415 14 $ 1,201,657 $ 1,250,102 The TDRs for which there was a payment default during the twelve month periods presented were as follows: Year ended December 31, 2020 Number of Recorded Contracts Investment Residential real estate - 1st lien 1 $ 165,168 Year ended December 31, 2019 Number of Recorded Contracts Investment Commercial & industrial 2 $ 27,818 Residential real estate - 1st lien 1 227,907 Residential real estate - Jr lien 1 55,010 4 $ 310,735 TDRs are treated as other impaired loans and carry individual specific reserves with respect to the calculation of the ALL. These loans are categorized as non-performing, may be past due, and are generally adversely risk rated. The TDRs that have defaulted under their restructured terms are generally in collection status and their reserve is typically calculated using the fair value of collateral method. The specific allowances related to TDRs as of the balance sheet dates presented were as follows: 2020 2019 Specific allowance $ 108,781 $ 104,548 As of the balance sheet dates, the Company evaluates whether it is contractually committed to lend additional funds to debtors with impaired, non-accrual or modified loans. The Company is contractually committed to lend under one SBA guaranteed line of credit to a borrower whose lending relationship was previously restructured. |
Loan Servicing
Loan Servicing | 12 Months Ended |
Dec. 31, 2020 | |
Loan Servicing | |
Note 6. Loan Servicing | Note 6. Loan Servicing Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of mortgage loans serviced for others were $164,610,868 and $167,673,467 at December 31, 2020 and 2019, respectively. Net gain realized on the sale of loans was $1,027,175 and $290,116 for the years ended December 31, 2020 and 2019, respectively. The following table summarizes changes in MSRs for the years ended December 31, 2020 2019 Balance at beginning of year $ 939,577 $ 1,004,948 MSRs capitalized 292,654 114,580 MSRs amortized (256,435 ) (179,951 ) Change in valuation allowance (53,650 ) 0 Balance at end of year $ 922,146 $ 939,577 |
Bank Premises and Equipment
Bank Premises and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Bank Premises and Equipment | |
Note 7. Bank Premises and Equipment | Note 7. Bank Premises and Equipment The major classes of bank premises and equipment and accumulated depreciation and amortization at December 31 were as follows: 2020 2019 Buildings and improvements $ 10,421,580 $ 10,575,514 Land and land improvements 2,663,549 2,650,671 Furniture and equipment 5,307,533 6,848,263 Leasehold improvements 824,605 1,161,073 Finance lease 588,347 588,347 Operating leases 1,417,859 1,490,779 Other prepaid assets 181,627 159,914 21,405,100 23,474,561 Less accumulated depreciation and amortization (11,195,231 ) (12,515,158 ) Net bank premises and equipment $ 10,209,869 $ 10,959,403 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Note 8. Leases | Note 8. Leases The Company adopted ASU No. 2016-02 (Leases) on January 1, 2019 with no required adjustment to prior periods presented or cumulative-effect adjustment to retained earnings. The Company has operating and finance leases for some of its bank premises, with remaining lease terms of one year to seven years. Some of the operating leases have options to renew, which are reflected in the seven years. The Company’s operating lease right-of-use assets and finance lease assets are included in “Bank premises and equipment, net” in the consolidated balance sheet and operating lease liabilities and finance lease liabilities are included in other liabilities in the consolidated balance sheet. The components of lease expense for the periods presented were as follows: Years Ended December 31, 2020 2019 Operating lease cost $ 259,954 $ 255,475 Finance lease cost: Amortization of right-of-use assets $ 38,667 $ 70,667 Interest on lease liabilities 5,396 16,705 Variable rent expense 33,940 33,940 Total finance lease cost $ 78,003 $ 121,312 Total rental expense not associated with operating lease costs above amounted to $15,872 and $16,601 for the years ended December 31, 2020 and 2019, respectively. Supplemental information related to leases as of the balance sheet dates was as follows: December 31, 2020 2019 Operating Leases Operating lease right-of-use assets $ 1,048,686 $ 1,254,384 Operating lease liabilities $ 1,060,391 $ 1,263,173 Finance Leases Finance lease right-of-use assets $ 85,680 $ 124,347 Finance lease liabilities $ 38,159 $ 99,823 December 31, 2020 2019 Weighted Average Remaining Lease Term Operating Leases 4.0 Years 4.4 Years Finance Leases 0.5 Years 1.5 Years Weighted Average Discount Rate Operating Leases 1.28 % 1.28 % Finance Leases 7.50 % 7.50 % Operating lease obligations The Company is obligated under non-cancelable operating leases for bank premises expiring in various years through 2026, with options to renew. Minimum future rental payments for these leases with original terms in excess of one year as of December 31, 2020 for each of the next five years and in aggregate are: 2021 $ 210,350 2022 216,180 2023 223,432 2024 199,648 2025 154,659 Subsequent to 2025 99,165 Total $ 1,103,434 Finance lease obligations The following is a schedule by years of future minimum lease payments under capital leases, together with the present value of the net minimum lease payments as of December 31, 2020: 2021 $ 39,119 Less amount representing interest (960 ) Present value of net minimum lease payments $ 38,159 A reconciliation of the undiscounted cash flows in the maturity analysis above and the lease liability recognized in the consolidated balance sheet as of December 31, 2020, is shown below: Operating Leases Finance Leases Undiscounted cash flows $ 1,103,434 $ 39,119 Discount effect of cash flows (43,043 ) (960 ) Lease liabilities $ 1,060,391 $ 38,159 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill | |
Note 9. Goodwill | Note 9. Goodwill As a result of the acquisition of LyndonBank on December 31, 2007, the Company recorded goodwill amounting to $11,574,269. The goodwill is not amortizable and is not deductible for tax purposes. Management evaluated goodwill for impairment at December 31, 2020 and 2019 and concluded that no impairment existed as of such dates. |
Other Investments
Other Investments | 12 Months Ended |
Dec. 31, 2020 | |
Other Investments | |
Note 10. Other Investments | Note 10. Other Investments The Company purchases, from time to time, interests in various limited partnerships established to acquire, own and rent residential housing for low and moderate income residents of northeastern and central Vermont. The tax credits from these investments were $433,970 and $415,099 for the years ended December 31, 2020 and 2019, respectively. Expenses related to amortization of the investments in the limited partnerships are recognized as a component of income tax expense, and were $336,686 and $312,106 for 2020 and 2019, respectively. The carrying values of the limited partnership investments were $2,425,721 and $2,762,406 at December 31, 2020 and 2019, respectively, and are included in Other assets. The Bank has a one-third ownership interest in a non-depository trust company, CFSG, based in Newport, Vermont, which is held indirectly through CFS Partners, a Vermont LLC that owns 100% of the LLC equity interests of CFSG. The Bank accounts for its investment in CFS Partners under the equity method of accounting. The Company’s investment in CFS Partners, included in Other assets, amounted to $4,220,418 and $3,535,527 as of December 31, 2020 and 2019, respectively. The Company recognized income of $684,891 and $588,696 for 2020 and 2019, respectively, through CFS Partners from the operations of CFSG. |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2020 | |
Deposits | |
Note 11. Deposits | Note 11. Deposits The following is a maturity distribution of time deposits at December 31, 2020: 2021 $ 74,922,873 2022 16,406,502 2023 7,116,526 2024 11,344,797 2025 3,541,263 Total $ 113,331,961 Total deposits in excess of the FDIC insurance level amounted to $268,444,165 as of December 31, 2020. |
Borrowed Funds
Borrowed Funds | 12 Months Ended |
Dec. 31, 2020 | |
Borrowed Funds | |
Note 12. Borrowed Funds | Note 12. Borrowed Funds Outstanding advances for the Company as of the balance sheet dates presented were as follows: 2020 2019 Long-Term Advances(1) FHLBB term advance, 0.00%, due January 07, 2021 $ 150,000 $ 0 FHLBB term advance, 0.00%, due February 26, 2021 350,000 350,000 FHLBB term advance, 0.00%, due November 22, 2021 1,000,000 1,000,000 FHLBB term advance, 0.00%, due September 22, 2023 200,000 200,000 FHLBB term advance, 0.00%, due November 12, 2025 300,000 300,000 FHLBB term advance, 0.00%, due November 13, 2028 800,000 800,000 $ 2,800,000 $ 2,650,000 1) The FHLBB is providing a subsidy, funded by the FHLBB’s earnings, to write down interest rates to zero percent on JNE advances that finance qualifying loans to small businesses. JNE advances must support small business in New England that create and/or retain jobs, or otherwise contribute to overall economic development activities. Borrowings from the FHLBB are secured by a blanket lien on qualified collateral consisting primarily of loans with first mortgages secured by 1-4 family residential properties, as well as certain qualifying CRE loans. Qualified collateral for these borrowings totaled $132,667,958 and $135,672,471 as of December 31, 2020 and 2019, respectively, and the Company’s gross potential borrowing capacity under this arrangement was $93,052,713 and $97,358,249, respectively, before reduction for outstanding advances and collateral pledges. Under a separate agreement with the FHLBB, the Company has the authority to collateralize public unit deposits, up to its available borrowing capacity, with letters of credit issued by the FHLBB. At December 31, 2020, $23,475,000 in FHLBB letters of credit was utilized as collateral for these deposits compared to $14,425,000 at December 31, 2019. Total fees paid by the Company in connection with issuance of these letters of credit were $46,748 for 2020 and $41,069 for 2019. The Company also maintained a $500,000 IDEAL Way Line of Credit with the FHLBB at December 31, 2020 and 2019, with no outstanding advances under this line at either year-end date. Interest on these borrowings is at a rate determined daily by the FHLBB and payable monthly. The Company also has a line of credit with the FRBB, which is intended to be used as a contingency funding source. For this BIC arrangement, the Company pledged eligible commercial and industrial loans, CRE loans not pledged to FHLBB and home equity loans, resulting in an available line of $50,378,933 and $56,896,877 as of December 31, 2020 and 2019, respectively. Credit advances in the FRBB lending program are overnight advances with interest chargeable at the primary credit rate (generally referred to as the discount rate), which was 25 basis points as of December 31, 2020. As of December 31, 2020 and 2019, the Company had no outstanding advances against this line. The Company has unsecured lines of credit with three correspondent banks, with aggregate available borrowing capacity totaling $25,500,000 at December 31, 2020 and 2019. The Company had no outstanding advances against these lines for the periods presented. |
Junior Subordinated Debentures
Junior Subordinated Debentures | 12 Months Ended |
Dec. 31, 2020 | |
Junior Subordinated Debentures | |
Note 13. Junior Subordinated Debentures | Note 13. Junior Subordinated Debentures As of December 31, 2020 and 2019, the Company had outstanding $12,887,000 principal amount of Junior Subordinated Debentures due in 2037 (the Debentures). The Debentures bear a floating rate equal to the 3-month LIBOR plus 2.85%. During 2020, the floating rate averaged 3.65% per quarter compared to an average rate of 5.33% per quarter for 2019. The Debentures mature on December 15, 2037 and are subordinated and junior in right of payment to all senior indebtedness of the Company, as defined in the Indenture dated as of October 31, 2007 between the Company and Wilmington Trust Company, as Trustee. The Debentures first became redeemable, in whole or in part, by the Company on December 15, 2012. Interest paid on the Debentures for 2020 and 2019 was $476,666 and $694,573, respectively, and is deductible for tax purposes. The Debentures were issued and sold to CMTV Statutory Trust I (the Trust). The Trust is a special purpose trust funded by a capital contribution of $387,000 from the Company, in exchange for 100% of the Trust’s common equity. The Trust was formed for the purpose of issuing corporation-obligated mandatorily redeemable Capital Securities (Capital Securities) in the principal amount of $12.5 million to third-party investors and using the proceeds from the sale of such Capital Securities and the Company’s initial capital contribution to purchase the Debentures. The Debentures are the sole asset of the Trust. Distributions on the Capital Securities issued by the Trust are payable quarterly at a rate per annum equal to the interest rate being earned by the Trust on the Debentures. The Capital Securities are subject to mandatory redemption, in whole or in part, upon repayment of the Debentures. The Company has entered into an agreement which, taken collectively, fully and unconditionally guarantees the payments on the Capital Securities, subject to the terms of the guarantee. The Debentures are currently includable in the Company’s Tier 1 capital up to 25% of core capital elements (see Note 23). |
Repurchase Agreements
Repurchase Agreements | 12 Months Ended |
Dec. 31, 2020 | |
Repurchase Agreements | |
Note 14. Repurchase Agreements | Note 14. Repurchase Agreements Securities sold under agreements to repurchase mature daily and consisted of the following: As of or for the year ended December 31, 2020 2019 Period end balance $ 38,727,312 $ 33,189,848 Average balance 29,687,950 33,545,527 Highest month-end balance 38,727,312 38,868,833 Weighted average interest rate 0.86 % 0.89 % Pledged investment (1) Amortized cost 59,546,509 45,637,025 Fair value 60,705,178 45,966,750 1) U.S. GSE securities, Agency MBS, ABS and OAS, and CDs were pledged as collateral for the periods presented. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Note 15. Income Taxes | Note 15. Income Taxes The Company prepares its income tax return on a consolidated basis. Income taxes are allocated to members of the consolidated group based on taxable income. The components of the Provision for income taxes for the years ended December 31 were as follows: 2020 2019 Currently paid or payable $ 2,518,516 $ 1,693,624 Deferred (benefit) expense (270,427 ) 96,236 Total income tax expense (1) $ 2,248,089 $ 1,789,860 1) Due to an increase of loan activity in 2019 in the state of New Hampshire, the Company is now subject to sales tax nexus on the income generated from this loan activity. Estimated tax payments of $3,000 and $10,000 was made to the state of New Hampshire during 2020 and 2019, respectively, in anticipation of tax due for the respective tax years. Total income tax expense differed from the amounts computed at the statutory federal income tax rate of 21% primarily due to the following for the years ended December 31: 2020 2019 Computed expense at statutory rates $ 2,731,384 $ 2,236,904 Tax exempt interest and BOLI (309,102 ) (306,073 ) Disallowed interest 12,917 15,798 Partnership rehabilitation and tax credits (433,970 ) (415,099 ) Low income housing investment amortization expense 265,982 246,564 Other (19,122 ) 11,766 $ 2,248,089 $ 1,789,860 The deferred income tax (benefit) expense consisted of the following items for the years ended December 31: 2020 2019 Depreciation $ 10,368 $ 126,734 Mortgage servicing rights (3,661 ) (13,728 ) Deferred compensation 3,722 3,701 Bad debts (269,219 ) (68,029 ) Limited partnership amortization (39,430 ) 60,588 Investment in CFSG Partners 13,408 (3,323 ) Loan fair value 0 (6,171 ) Prepaid expenses 11,072 (10,741 ) Other 3,313 7,205 Change in deferred tax (benefit) expense $ (270,427) $ 96,236 Listed below are the significant components of the net deferred tax asset at December 31: 2020 2019 Components of the deferred tax asset: Bad debts $ 1,513,782 $ 1,244,563 Deferred compensation 9,176 12,898 Contingent liability - MPF program 17,838 17,838 Finance lease 7,101 11,930 Other 20,814 16,346 Total deferred tax asset 1,568,711 1,303,575 Components of the deferred tax liability: Depreciation 394,564 384,197 Limited partnerships 37,565 76,995 Mortgage servicing rights 193,650 197,311 Unrealized gain on debt securities AFS 243,321 69,242 Investment in CFS Partners 84,462 71,054 Operating lease 3,178 226 Prepaid expenses 79,810 68,738 Total deferred tax liability 1,036,550 867,763 Net deferred tax asset $ 532,161 $ 435,812 US GAAP provides for the recognition and measurement of deductible temporary differences (including general valuation allowances) to the extent that it is more likely than not that the deferred tax asset will be realized. The net deferred tax asset is included in Other assets in the consolidated balance sheets. ASC Topic 740, Income Taxes |
401(k) and Profit-Sharing Plan
401(k) and Profit-Sharing Plan | 12 Months Ended |
Dec. 31, 2020 | |
401(k) and Profit-Sharing Plan | |
Note 16. 401(k) and Profit-Sharing Plan | Note 16. 401(k) and Profit-Sharing Plan The Company has a defined contribution plan covering all employees who meet certain age and service requirements. The pension expense was $648,405 and $624,000 for 2020 and 2019, respectively. These amounts represent discretionary matching contributions of a portion of the voluntary employee salary deferrals under the 401(k) plan and discretionary profit-sharing contributions under the plan. |
Deferred Compensation and Suppl
Deferred Compensation and Supplemental Employee Retirement Plans | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Compensation and Supplemental Employee Retirement Plans | |
Note 17. Deferred Compensation and Supplemental Employee Retirement Plans | Note 17. Deferred Compensation and Supplemental Employee Retirement Plans The Company maintains a directors’ deferred compensation plan and, prior to 2005, maintained a retirement plan for its directors. Participants are general unsecured creditors of the Company with respect to these benefits. The benefits accrued under these plans were $43,694 and $61,421 at December 31, 2020 and 2019, respectively. Expenses associated with these plans were $274 and $376 for the years ended December 31, 2020 and 2019, respectively. |
Financial Instruments with Off-
Financial Instruments with Off-Balance-Sheet Risk | 12 Months Ended |
Dec. 31, 2020 | |
Financial Instruments with Off-Balance-Sheet Risk | |
Note 18. Financial Instruments with Off-Balance-Sheet Risk | Note 18. Financial Instruments with Off-Balance-Sheet Risk The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments include commitments to extend credit, standby letters of credit and financial guarantees, commitments to sell loans and risk-sharing commitments on certain sold loans. Such instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheet. The contract or notional amounts of those instruments reflect the maximum extent of involvement the Company has in particular classes of financial instruments. The Company’s maximum exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit and financial guarantees written is represented by the contractual notional amount of those instruments. The Company applies the same credit policies and underwriting criteria in making commitments and conditional obligations as it does for on-balance-sheet instruments. The Company generally requires collateral or other security to support financial instruments with credit risk. At December 31, the following off-balance-sheet financial instruments representing credit risk were outstanding: Contract or Notional Amount 2020 2019 Unused portions of home equity lines of credit $ 35,217,177 $ 32,784,105 Residential and commercial construction lines of credit 14,843,617 12,364,436 Commercial real estate commitments 32,888,666 24,377,588 Commercial and industrial commitments 57,848,075 47,659,341 Other commitments to extend credit 42,140,295 64,469,012 Standby letters of credit and commercial letters of credit 1,585,000 1,375,500 Recourse on sale of credit card portfolio 327,855 254,430 MPF credit enhancement obligation, net (See Note 19) 552,158 552,158 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future funding requirements. At December 31, 2020 and 2019, the Company had binding loan commitments to sell residential mortgages at fixed rates totaling $1,280,400 and $1,643,200, respectively. The recourse provision under the terms of the sale of the Company’s credit card portfolio in 2007 is based on total lines, not balances outstanding. Based on historical losses, the Company does not expect any significant losses from this commitment. The Company evaluates each customer’s credit-worthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary by the Company upon extension of credit, or a commitment to extend credit, is based on management’s credit evaluation of the counter-party. Collateral or other security held varies but may include real estate, accounts receivable, inventory, property, plant and equipment, and income-producing commercial properties. Standby letters of credit and financial guarantees written are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support private borrowing arrangements. The credit risk involved in issuing letters of credit or providing reimbursement guarantees for the benefit of the Company’s commercial customers is essentially the same as that involved in extending loans to customers. The fair value of standby letters of credit and reimbursement guarantees on letters of credit has not been included in the balance sheets as the fair value is immaterial. In connection with its 2007 trust preferred securities financing, the Company guaranteed the payment obligations under the $12,500,000 of capital securities of its subsidiary, the Trust. The source of funds for payments by the Trust on its capital trust securities is payments made by the Company on its debentures issued to the Trust. The Company’s obligation under those debentures is fully reflected in the Company’s consolidated balance sheet, in the gross amount of $12,887,000 as of the dates presented, of which $12,500,000 represents external financing through the issuance to investors of capital securities by the Trust (see Note 13). |
Contingent Liability
Contingent Liability | 12 Months Ended |
Dec. 31, 2020 | |
Contingent Liability | |
Note 19. Contingent Liability | Note 19. Contingent Liability The Company sells first lien 1-4 family residential mortgage loans under the MPF program with the FHLBB. Under this program the Company shares in the credit risk of each mortgage loan, while receiving fee income in return. The Company is responsible for a CEO based on the credit quality of these loans. FHLBB funds a FLA based on the Company’s outstanding MPF mortgage balances. This creates a laddered approach to sharing in any losses. In the event of default, homeowner’s equity and private mortgage insurance, if any, are the first sources of repayment; the FHLBB’s FLA funds are then utilized, followed by the participant’s CEO, with the balance of losses absorbed by FHLBB. These loans must meet specific underwriting standards of the FHLBB. As of December 31, 2020 and 2019, the Company had $28,137,890 and $33,990,463, respectively, in loans sold through the MPF program and on which the Company had a CEO. As of December 31, 2020 and 2019, the notional amount of the maximum CEO related to this program was $637,102, and the accrued contingent liability for this CEO was $84,944. The contingent liability is calculated by management based on the methodology used in calculating the ALL, adjusted to reflect the risk sharing arrangements with the FHLBB. |
Legal Proceedings
Legal Proceedings | 12 Months Ended |
Dec. 31, 2020 | |
Legal Proceedings | |
Note 20. Legal Proceedings | Note 20. Legal Proceedings In the normal course of business, the Company is involved in various claims and legal proceedings. In the opinion of the Company’s management, any liabilities resulting from such proceedings are not expected to be material to the Company’s consolidated financial condition or results of operations. |
Transactions with Related Parti
Transactions with Related Parties | 12 Months Ended |
Dec. 31, 2020 | |
Transactions with Related Parties | |
Note 21. Transactions with Related Parties | Note 21. Transactions with Related Parties Aggregate loan transactions of the Company with directors, principal officers, their immediate families and affiliated companies in which they are principal owners (commonly referred to as related parties) as of December 31 were as follows: 2020 2019 Balance, beginning of year $ 9,127,542 $ 6,730,842 Loans - new Directors 9,769,951 0 New loans to existing Principal Officers/Directors 3,330,226 4,491,524 Repayment (5,453,184 ) (2,094,824 ) Balance, end of year $ 16,774,535 $ 9,127,542 Total funds of related parties on deposit with the Company were $14,251,646 and $8,942,886 at December 31, 2020 and 2019, respectively. The Company utilizes the services of CFSG as an investment advisor for the Company’s 401(k) plan. The Human Resources committee of the Board of Directors is the Trustee of the plan, and CFSG provides investment advice for the plan. CFSG also acts as custodian of the retirement funds and makes investments on behalf of the plan and its participants. The Company pays monthly management fees to CFSG for its services to the 401(k) plan amounting to $48,780 and $57,209, respectively, for the years ended December 31, 2020 and 2019. |
Restrictions on Cash and Due Fr
Restrictions on Cash and Due From Banks | 12 Months Ended |
Dec. 31, 2020 | |
Restrictions on Cash and Due From Banks | |
Note 22. Restrictions on Cash and Due From Banks | Note 22. Restrictions on Cash and Due From Banks In the ordinary course of business, the Company may, from time to time, maintain amounts due from correspondent banks that exceed federally insured limits. However, no losses have occurred in these accounts and the Company believes it is not exposed to any significant risk with respect to such accounts. The Company was required to maintain contracted balances with a correspondent bank of $30,000 at December 31, 2020 and 2019. |
Regulatory Capital Requirements
Regulatory Capital Requirements | 12 Months Ended |
Dec. 31, 2020 | |
Regulatory Capital Requirements | |
Note 23. Regulatory Capital Requirements | Note 23. Regulatory Capital Requirements The Company (on a consolidated basis) and the Bank are subject to various regulatory capital requirements administered by the federal 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 material effect on the Company’s and the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance-sheet items, as calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Additional prompt corrective action capital requirements are applicable to banks, but not to bank holding companies. Under current banking rules governing required regulatory capital, the Company and the Bank are required to maintain minimum amounts and ratios (set forth in the table on the following page) of Common equity tier 1, Tier 1 and Total capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined). The Company’s non-cumulative Series A preferred stock ($1.5 million liquidation preference in 2020 and 2019) is includable without limitation in its Common equity tier 1 and Tier 1 capital. The Company is allowed to include in Common equity tier 1 and Tier 1 capital an amount of trust preferred securities equal to no more than 25% of the sum of all core capital elements, which is generally defined as shareholders’ equity, less certain intangibles, including goodwill, net of any related deferred income tax liability, with the balance includable in Tier 2 capital. Management believes that, as of December 31, 2020, the Company and the Bank met all capital adequacy requirements to which they were subject. Under the 2018 Regulatory Relief Act, these capital requirements have been simplified for qualifying community banks and bank holding companies. In September 2019, the OCC and the other federal bank regulators approved a final joint rule that permits a qualifying community banking organization to opt in to a simplified regulatory capital framework. A qualifying institution that elects to utilize the simplified framework must maintain a CBLR in excess of 9%, and will thereby be deemed to have satisfied the generally applicable risk-based and other leverage capital requirements and (if applicable) the FDIC’s prompt corrective action framework. In order to utilize the CBLR framework, in addition to maintaining a CBLR of over 9%, a community banking organization must have less than $10 billion in total consolidated assets and must meet certain other criteria such as limitations on the amount of off-balance sheet exposures and on trading assets and liabilities. The CBLR is calculated by dividing tangible equity capital by average total consolidated assets. The final rule became effective on January 1, 2020 for capital calculations as of March 31, 2020 and thereafter. Beginning in 2016, an additional capital conservation buffer was added to the minimum requirements for capital adequacy purposes, subject to a three year phase-in period. The capital conservation buffer was fully phased-in on January 1, 2019 at 2.5% of risk-weighted assets. A banking organization with a conservation buffer of less than 2.5% is subject to limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers. The Company and the Bank were fully compliant as of the periods presented in the table below. Pursuant to the CARES Act, the federal banking agencies adopted an interim rule temporarily lowering the CBLR benchmark to in excess of 8%, rather than 9%, with a phased increase of the CBLR back to the 9% level by the end of 2021. The Company and Bank continued to qualify to utilize the CBLR framework as of December 31, 2020, but have not elected to do so. As of December 31, 2020, the Bank was considered well capitalized under the regulatory capital framework for Prompt Corrective Action and the Company exceeded currently applicable consolidated regulatory guidelines for capital adequacy. While we believe that the Company has sufficient capital to withstand an extended economic downturn in the wake of the COVID-19 pandemic, our regulatory capital ratios could be adversely impacted by future credit losses and other operational impacts related to COVID-19. The following table shows the regulatory capital ratios for the Company and the Bank as of December 31: Minimum Minimum Minimum For Capital To Be Well For Capital Adequacy Purposes Capitalized Under Adequacy with Conservation Prompt Corrective Actual Purposes: Buffer(1): Action Provisions(2): Amount Ratio Amount Ratio Amount Ratio Amount Ratio (Dollars in Thousands) December 31, 2020 Common equity tier 1 capital (to risk-weighted assets) Company $ 77,594 14.15 % $ 24,680 4.50 % $ 38,391 7.00 % N/A N/A Bank $ 77,017 14.06 % $ 24,654 4.50 % $ 38,351 7.00 % $ 35,611 6.50 % Tier 1 capital (to risk-weighted assets) Company $ 77,594 14.15 % $ 32,907 6.00 % $ 46,618 8.50 % N/A N/A Bank $ 77,017 14.06 % $ 32,872 6.00 % $ 46,569 8.50 % $ 43,829 8.00 % Total capital (to risk-weighted assets) Company $ 84,455 15.40 % $ 43,876 8.00 % $ 57,587 10.50 % N/A N/A Bank $ 83,871 15.31 % $ 43,829 8.00 % $ 57,526 10.50 % $ 54,787 10.00 % Tier 1 capital (to average assets) Company $ 77,594 8.80 % $ 35,273 4.00 % N/A N/A N/A N/A Bank $ 77,017 8.74 % $ 35,252 4.00 % N/A N/A $ 44,065 5.00 % December 31, 2019: Common equity tier 1 capital (to risk-weighted assets) Company $ 69,947 13.48 % $ 23,352 4.50 % $ 36,325 7.00 % N/A N/A Bank $ 69,330 13.38 % $ 23,325 4.50 % $ 36,283 7.00 % $ 33,691 6.50 % Tier 1 capital (to risk-weighted assets) Company $ 69,947 13.48 % $ 31,135 6.00 % $ 44,108 8.50 % N/A N/A Bank $ 69,330 13.38 % $ 31,099 6.00 % $ 44,057 8.50 % $ 41,466 8.00 % Total capital (to risk-weighted assets) Company $ 75,943 14.63 % $ 41,514 8.00 % $ 54,487 10.50 % N/A N/A Bank $ 75,326 14.53 % $ 41,466 8.00 % $ 54,424 10.50 % $ 51,832 10.00 % Tier 1 capital (to average assets) Company $ 69,947 9.57 % $ 29,223 4.00 % N/A N/A N/A N/A Bank $ 69,330 9.50 % $ 29,201 4.00 % N/A N/A $ 36,501 5.00 % 1) Conservation Buffer is calculated based on risk-weighted assets and does not apply to calculations of average assets. 2) Applicable to banks, but not bank holding companies. The Company’s ability to pay dividends to its shareholders is largely dependent on the Bank’s ability to pay dividends to the Company. The Bank is restricted by law as to the amount of dividends that can be paid. Dividends declared by national banks that exceed net income for the current and preceding two years must be approved by the Bank’s primary banking regulator, the Office of the Comptroller of the Currency. Regardless of formal regulatory restrictions, the Bank may not pay dividends that would result in its capital levels being reduced below the minimum requirements shown above. |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value | |
Note 24. Fair Value | Note 24. Fair Value Certain assets and liabilities are recorded at fair value to provide additional insight into the Company’s quality of earnings. The fair values of some of these assets and liabilities are measured on a recurring basis while others are measured on a non-recurring basis, with the determination based upon applicable existing accounting pronouncements. For example, securities available-for-sale are recorded at fair value on a recurring basis. Other assets, such as MSRs, loans held-for-sale, impaired loans, and OREO are recorded at fair value on a non-recurring basis using the lower of cost or market methodology to determine impairment of individual assets. The Company groups assets and liabilities which are recorded at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. The level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement (with Level 1 considered highest and Level 3 considered lowest). A brief description of each level follows. Level 1 Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market, as well as U.S. Treasury, other U.S. Government debt securities that are highly liquid and are actively traded in over-the-counter markets. Level 2 Observable inputs other than Level 1 prices such as quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes MSRs, collateral-dependent impaired loans and OREO. Level 3 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 and liabilities include financial instruments whose value is determined using 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. The following methods and assumptions were used by the Company in estimating its fair value measurements: Debt Securities AFS: Impaired loans: Loans held-for-sale: MSRs: OREO: Assets Recorded at Fair Value on a Recurring Basis Assets measured at fair value on a recurring basis and reflected in the consolidated balance sheets at December 31, segregated by fair value hierarchy, are summarized below: Level 2 2020 2019 Assets: (market approach) U.S. GSE debt securities $ 8,169,831 $ 18,061,620 Agency MBS 41,378,349 16,205,375 ABS and OAS 2,669,996 2,852,909 Other investments 8,487,002 8,846,846 Total $ 60,705,178 $ 45,966,750 There were no Level 1 or Level 3 assets or liabilities measured on a recurring basis as of the balance sheet dates presented, nor were there any transfers of assets between Levels during either 2020 or 2019. Assets Recorded at Fair Value on a Non-Recurring Basis The following table includes assets measured at fair value on a non-recurring basis that have had a fair value adjustment since their initial recognition. Impaired loans measured at fair value only include impaired loans with a partial write-down or with a related specific ALL and are presented net of the specific allowances as disclosed in Note 5. Assets measured at fair value on a non-recurring basis and reflected in the consolidated balance sheets at December 31, segregated by fair value hierarchy, are summarized below: Level 2 2020 2019 Assets: (market approach) Impaired loans, net of related allowance $ 323,645 $ 0 Loans held-for-sale 130,400 0 MSRs (1) 922,146 939,577 OREO 0 966,738 1) Represents MSRs at lower of cost or fair value, including MSRs deemed to be impaired and for which a valuation allowance was established to carry at fair value at December 31, 2020 and 2019. There were no Level 1 or Level 3 assets or liabilities measured on a non-recurring basis as of the balance sheet dates presented, nor were there any transfers of assets between Levels during either 2020 or 2019. FASB ASC Topic 825, “Financial Instruments”, requires disclosures of fair value information about financial instruments, whether or not recognized in the balance sheet, if the fair values can be reasonably determined. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques using observable inputs when available. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Topic 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. The carrying amounts and estimated fair values of the Company’s financial instruments were as follows: December 31, 2020 Fair Fair Fair Fair Carrying Value Value Value Value Amount Level 1 Level 2 Level 3 Total (Dollars in Thousands) Financial assets: Cash and cash equivalents $ 115,050 $ 115,050 $ 0 $ 0 $ 115,050 Debt securities AFS 60,705 0 60,705 0 60,705 Restricted equity securities 1,447 0 1,447 0 1,447 Loans and loans held-for-sale, net of ALL Commercial & industrial 158,601 0 0 160,371 160,371 Commercial real estate 276,476 0 208 279,281 279,489 Municipal 54,694 0 0 55,601 55,601 Residential real estate - 1st lien 169,201 0 116 170,385 170,501 Residential real estate - Jr lien 37,892 0 0 37,991 37,991 Consumer 4,218 0 0 4,238 4,238 MSRs (1) 922 0 922 0 922 Accrued interest receivable 2,988 0 2,988 0 2,988 Financial liabilities: Deposits Other deposits 778,085 0 779,824 0 779,824 Brokered deposits 4,206 0 4,208 0 4,208 Long-term borrowings 2,800 0 2,724 0 2,724 Repurchase agreements 38,727 0 38,727 0 38,727 Operating lease obligations 1,060 0 1,060 0 1,060 Finance lease obligations 38 0 38 0 38 Subordinated debentures 12,887 0 12,876 0 12,876 Accrued interest payable 86 0 86 0 86 1) Reported fair value represents all MSRs for loans serviced by the Company at December 31, 2020, regardless of carrying amount. December 31, 2019 Fair Fair Fair Fair Carrying Value Value Value Value Amount Level 1 Level 2 Level 3 Total (Dollars in Thousands) Financial assets: Cash and cash equivalents $ 48,562 $ 48,562 $ 0 $ 0 $ 48,562 Debt securities AFS 45,967 0 45,967 0 45,967 Restricted equity securities 1,432 0 1,432 0 1,432 Loans and loans held-for-sale, net of ALL Commercial & industrial 98,062 0 0 97,356 97,356 Commercial real estate 243,022 0 0 242,735 242,735 Municipal 55,817 0 0 55,867 55,867 Residential real estate - 1st lien 156,897 0 0 156,520 156,520 Residential real estate - Jr lien 42,927 0 0 42,950 42,950 Consumer 4,337 0 0 4,306 4,306 MSRs (1) 940 0 1,250 0 1,250 Accrued interest receivable 2,337 0 2,337 0 2,337 Financial liabilities: Deposits Other deposits 603,872 0 604,267 0 604,267 Brokered deposits 11,149 0 11,153 0 11,153 Long-term borrowings 2,650 0 2,427 0 2,427 Repurchase agreements 33,190 0 33,190 0 33,190 Operating lease obligations 1,263 0 1,263 0 1,263 Finance lease obligations 100 0 100 0 100 Subordinated debentures 12,887 0 12,831 0 12,831 Accrued interest payable 139 0 139 0 139 1) Reported fair value represents all MSRs for loans serviced by the Company at December 31, 2019, regardless of carrying amount. The estimated fair values of commitments to extend credit, letters of credit and financial guarantees for the benefit of customers were immaterial at December 31, 2020 and 2019. |
Condensed Financial Information
Condensed Financial Information Parent Company Only | 12 Months Ended |
Dec. 31, 2020 | |
Condensed Financial Information Parent Company Only | |
Note 25. Condensed Financial Information (Parent Company Only) | Note 25. Condensed Financial Information (Parent Company Only) The following condensed financial statements are for Community Bancorp. (Parent Company Only), and should be read in conjunction with the consolidated financial statements of the Company. Community Bancorp. (Parent Company Only) December 31, December 31, Balance Sheets 2020 2019 Assets Cash $ 750,371 $ 744,687 Investment in subsidiary - Community National Bank 89,598,666 81,164,447 Investment in Capital Trust 387,000 387,000 Income taxes receivable 184,973 213,071 Total assets $ 90,921,010 $ 82,509,205 Liabilities and Shareholders’ Equity Liabilities Junior subordinated debentures $ 12,887,000 $ 12,887,000 Dividends payable 745,297 727,526 Total liabilities 13,632,297 13,614,526 Shareholders’ Equity Preferred stock, 1,000,000 shares authorized, 15 shares issued and outstanding at December 31, 2020 and 2019 ($100,000 liquidation value, per share) 1,500,000 1,500,000 Common stock - $2.50 par value; 15,000,000 shares authorized, 5,527,380 and 5,449,857 shares issued at December 31, 2020 and 2019, respectively (including 18,128 and 16,267 shares issued February 1, 2021 and 2020, respectively) 13,818,450 13,624,643 Additional paid-in capital 34,309,646 33,464,381 Retained earnings 29,368,046 22,667,949 Accumulated other comprehensive income 915,348 260,483 Less: treasury stock, at cost; 210,101 shares at December 31, 2020 and 2019 (2,622,777 ) (2,622,777 ) Total shareholders’ equity 77,288,713 68,894,679 Total liabilities and shareholders’ equity $ 90,921,010 $ 82,509,205 The investment in the subsidiary bank is carried under the equity method of accounting. The investment and cash, which is on deposit with the Bank, have been eliminated in consolidation. Community Bancorp. (Parent Company Only) Years Ended December 31, Condensed Statements of Income 2020 2019 Income Bank subsidiary distributions $ 3,675,000 $ 4,256,000 Dividends on Capital Trust 14,314 20,858 Total income 3,689,314 4,276,858 Expense Interest on junior subordinated debentures 476,666 694,573 Administrative and other 418,474 340,904 Total expense 895,140 1,035,477 Income before applicable income tax benefit and equity in undistributed net income of subsidiary 2,794,174 3,241,381 Income tax benefit 184,973 213,071 Income before equity in undistributed net income of subsidiary 2,979,147 3,454,452 Equity in undistributed net income of subsidiary 7,779,355 5,369,994 Net income $ 10,758,502 $ 8,824,446 Community Bancorp. (Parent Company Only) Years Ended December 31, Condensed Statements of Cash Flows 2020 2019 Cash Flows from Operating Activities Net income $ 10,758,502 $ 8,824,446 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed net income of subsidiary (7,779,355 ) (5,369,994 ) (Increase) decrease in income taxes receivable 28,097 (5,827 ) Net cash provided by operating activities 3,007,244 3,448,625 Cash Flows from Financing Activities Redemption of preferred stock 0 (500,000 ) Dividends paid on preferred stock (54,375 ) (87,500 ) Dividends paid on common stock (2,947,185 ) (2,837,058 ) Net cash used in financing activities (3,001,560 ) (3,424,558 ) Net increase in cash 5,684 24,067 Cash Beginning 744,687 720,620 Ending $ 750,371 $ 744,687 Cash Received for Income Taxes $ 213,071 $ 207,244 Cash Paid for Interest $ 476,666 $ 694,573 Dividends paid: Dividends declared $ 4,004,030 $ 3,951,279 Increase in dividends payable attributable to dividends declared (17,773 ) (16,987 ) Dividends reinvested (1,039,072 ) (1,097,234 ) $ 2,947,185 $ 2,837,058 |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Data (Unaudited) | |
Note 26. Quarterly Financial Data (Unaudited) | Note 26. Quarterly Financial Data (Unaudited) A summary of financial data for the four quarters of 2020 and 2019 is presented below: 2020 March 31, June 30, September 30, December 31, Interest income $ 7,772,152 $ 8,191,442 $ 8,086,866 $ 9,011,834 Interest expense 1,476,393 1,206,909 1,050,780 1,112,604 Provision for loan losses 376,503 307,499 362,499 542,499 Non-interest income 1,353,707 1,762,102 1,941,295 1,714,620 Non-interest expense 5,093,219 4,987,453 5,104,717 5,206,352 Net income 1,861,239 2,842,311 2,880,443 3,174,509 Earnings per common share 0.35 0.54 0.54 0.60 2019 March 31, June 30, September 30, December 31, Interest income $ 7,698,368 $ 8,262,422 $ 7,906,454 $ 7,891,564 Interest expense 1,538,540 1,546,953 1,509,033 1,548,595 Provision for loan losses 212,503 141,666 412,499 299,499 Non-interest income 1,318,700 1,434,138 1,597,332 1,595,896 Non-interest expense 5,155,924 5,079,060 4,863,716 4,782,580 Net income 1,771,905 2,419,298 2,261,943 2,371,300 Earnings per common share 0.34 0.46 0.43 0.45 |
Other Income and Other Expenses
Other Income and Other Expenses | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Other Expenses | |
Note 27. Other Income and Other Expenses | Note 27. Other Income and Other Expenses The components of other income and other expenses which are in excess of one percent of total revenues in either of the two years disclosed are as follows: 2020 2019 Income Income from investment in CFS Partners $ 684,891 $ 588,696 Expenses Outsourcing expense $ 473,426 $ 428,668 Service contracts - administration 506,144 539,510 Marketing 425,000 450,533 State deposit tax 704,047 669,502 ATM fees 486,590 434,270 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events | |
Note 28. Subsequent Events | Note 28. Subsequent Events Declaration of Cash Dividend On December 9, 2020, the Company declared a cash dividend of $0.19 per share payable February 1, 2021 to shareholders of record as of January 15, 2021. On March 17, 2021, the Company declared a cash dividend of $0.22 per share payable May 1, 2021 to shareholders of record as of April 15, 2021. These dividends have been recorded as of each declaration date, including shares issuable under the DRIP. For purposes of accrual or disclosure in these financial statements, the Company has evaluated subsequent events through the date of issuance of these financial statements. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Significant Accounting Policies | |
Basis of presentation and consolidation | In addition to the definitions provided elsewhere in this Annual Report, the definitions, acronyms and abbreviations identified below are used throughout this Annual Report, including these “Notes to Consolidated Financial Statements” and the section labeled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” immediately following. These definitions are intended to aid the reader and provide a reference page when reviewing this Annual Report. ABS: Asset backed security FHA: Federal Housing Administration ACBB: Atlantic Community Bankers Bank FHLBB: Federal Home Loan Bank of Boston ACBI: Atlantic Community Bancshares, Inc. FHLMC : Federal Home Loan Mortgage Corporation ACH: Automated Clearing House FICO: Financing Corporation AFS: Available-for-sale FLA: First Loss Account Agency MBS: MBS issued by a US government agency FOMC: Federal Open Market Committee or GSE FRB: Federal Reserve Board ALCO: Asset Liability Committee FRBB: Federal Reserve Bank of Boston ALL: Allowance for loan losses GAAP: Generally Accepted Accounting Principles AML: Anti-money laundering laws in the United States AOCI: Accumulated other comprehensive income GSE: Government sponsored enterprise ASC: Accounting Standards Codification HMDA: Home Mortgage Disclosure Act ASU: Accounting Standards Update HTM: Held-to-maturity ATMs: Automatic teller machines ICS: Insured Cash Sweeps of the Promontory ATS: Automatic transfer service Interfinancial Network Bancorp: Community Bancorp. IRS: Internal Revenue Service Bank: Community National Bank JNE: Jobs for New England BHG: Bankers Healthcare Group Jr: Junior BIC: Borrower-in-Custody LIBOR: London Interbank Offered Rate Board: Board of Directors LLC: Limited liability corporation BOLI: Bank owned life insurance MBS: Mortgage-backed security bp or bps: Basis point(s) MPF: Mortgage Partnership Finance BSA: Bank Secrecy Act MSAs Metropolitan Statistical Areas CBLR: Community Bank Leverage Ratio MSRs: Mortgage servicing rights CARES ACT: Coronavirus Aid Relief and Economic NII: Net interest income Security Act OAS: Other amortizing security CDARS: Certificate of Deposit Accounts Registry OCI: Other comprehensive income (loss) Service of the Promontory Interfinancial OFAC: Office of Foreign Asset Control Network OREO: Other real estate owned CDs: Certificates of deposit OTTI: Other-than-temporary impairment CDI: Core deposit intangible PMI: Private mortgage insurance CECL: Current Expected Credit Loss PPP: Paycheck Protection Program CEO: Credit Enhancement Obligation PPPLF: Paycheck Protection Program Liquidity CFPB: Consumer Financial Protection Bureau Facility CFSG: Community Financial Services Group, LLC QM(s): Qualified Mortgage(s) CFS Partners: Community Financial Services Partners, RD: USDA Rural Development LLC RESPA: Real Estate Settlement Procedures Act Company: Community Bancorp. and Subsidiary SBA: U.S. Small Business Administration COVID-19: Coronavirus Disease 2019 SEC: U.S. Securities and Exchange Commission CRA: Community Reinvestment Act SERP: Supplemental Employee Retirement Plan CRE: Commercial Real Estate SOX: Sarbanes-Oxley Act of 2002 DDA or DDAs: Demand Deposit Account(s) TDR: Troubled-debt restructuring DIF: Deposit Insurance Fund TILA: Truth in Lending Act DTC: Depository Trust Company USDA: U.S. Department of Agriculture DRIP: Dividend Reinvestment Plan VA: U.S. Veterans Administration Exchange Act: Securities Exchange Act of 1934 VIE: Variable interest entities FASB: Financial Accounting Standards Board 2017 Tax Act: Tax Cut and Jobs Act of 2017 FDIA: Federal Deposit Insurance Act 2018 Economic Growth, Regulatory Relief and FDIC: Federal Deposit Insurance Corporation Regulatory Consumer Protection Act of 2018 FDICIA: Federal Deposit Insurance Company Relief Act: Improvement Act of 1991 The consolidated financial statements include the accounts of the Bancorp. and its wholly-owned subsidiary, the Bank. All significant intercompany accounts and transactions have been eliminated. The Company is considered a “smaller reporting company” under the disclosure rules of the SEC. Accordingly, the Company has elected to provide its audited consolidated statements of income, comprehensive income, cash flows and changes in shareholders’ equity for a two year, rather than a three year, period, and intends to provide smaller reporting company scaled disclosures where management deems it appropriate. Beginning with its periodic reports filed in 2018, the Company was considered an accelerated filer under the financial reporting rules of the SEC. However, these reporting rules were amended in 2020, causing the Company to be considered a non-accelerated file beginning with this annual report. FASB ASC Topic 810, “Consolidation”, in part, addresses limited purpose trusts formed to issue trust preferred securities. It also establishes the criteria used to identify VIE, and to determine whether or not to consolidate a VIE. In general, ASC Topic 810 provides that the enterprise with the controlling financial interest, known as the primary beneficiary, consolidates the VIE. In 2007, the Company formed CMTV Statutory Trust I for the purposes of issuing trust preferred securities to unaffiliated parties and investing the proceeds from the issuance thereof and the common securities of the trust in junior subordinated debentures issued by the Company. The Company is not the primary beneficiary of CMTV Statutory Trust I; accordingly, the trust is not consolidated with the Company for financial reporting purposes. CMTV Statutory Trust I is considered an affiliate of the Company (see Note 13). |
Nature of operations | The Company provides a variety of deposit and lending services to individuals, municipalities, and business customers through its branches, ATMs and telephone, mobile and internet banking capabilities in northern and central Vermont, which is primarily a small business and agricultural area. The Company’s primary deposit products are checking and savings accounts and certificates of deposit. Its primary lending products are commercial, real estate, municipal and consumer loans. |
Concentration of risk | The Company’s operations are affected by various risk factors, including interest rate risk, credit risk, and risk from geographic concentration of its deposit taking and lending activities. Management attempts to manage interest rate risk through various asset/liability management techniques designed to match maturities and repricing of assets and liabilities. Loan policies and administration are designed to provide assurance that loans will only be granted to creditworthy borrowers, although credit losses are expected to occur because of subjective factors inherent in management’s estimate of credit risk and factors beyond the control of the Company. While the Company has a diversified loan portfolio by loan type, most of its lending activities are conducted within the geographic area where its banking offices are located. As a result, the Company and its borrowers may be especially vulnerable to the consequences of changes in the local economy in northern and central Vermont. In addition, a substantial portion of the Company’s loans are secured by real estate, which is susceptible to a decline in value, especially during times of adverse economic conditions. |
Use of estimates | The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions involve inherent uncertainties. Accordingly, actual results could differ from those estimates and those differences could be material. Material estimates that are particularly susceptible to significant change include those relating to the determination of the ALL and the valuation of OREO. In connection with evaluating loans for impairment or assigning the carrying value of OREO, management generally obtains independent evaluations or appraisals for significant properties. While the ALL and the carrying value of OREO are determined using management’s best estimate of probable loan and OREO losses, respectively, as of the balance sheet date, the ultimate collection of a substantial portion of the Company’s loan portfolio and the recovery of a substantial portion of the fair value of OREO are susceptible to uncertainties and changes in a number of factors, especially local real estate market conditions. The amount of the change that is reasonably possible cannot be estimated. While management uses available information to recognize losses on loans and OREO, future additions to the allowance or write-downs of OREO may be necessary based on changes in local economic conditions or other relevant factors. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for losses on loans and the carrying value of OREO. Such agencies may require the Company to recognize additions to the allowance or write-downs of OREO based on their judgment about information available to them at the time of their examination. MSRs associated with loans originated and sold in the secondary market, where servicing is retained, are capitalized and included in Other assets in the consolidated balance sheets. MSRs are amortized against non-interest income in proportion to, and over the period of, estimated future net servicing income of the underlying loans. The value of capitalized servicing rights represents the present estimated value of the future servicing fees arising from the right to service loans for third parties. The carrying value of the MSRs is periodically reviewed for impairment based on management’s estimate of fair value as compared to amortized cost, and impairment, if any, is recognized through a valuation allowance and is recorded as a write down. Critical accounting policies for MSRs relate to the initial valuation and subsequent impairment tests. The methodology used to determine the valuation of MSRs requires the development and use of estimates, including anticipated principal amortization and prepayments. Events that may significantly affect the estimates used are changes in interest rates and the payment performance of the underlying loans. Management uses a third party consultant to assist in estimating the fair value of the Company’s MSRs. Management evaluates securities for OTTI on at least a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. Consideration is given to various factors, including the length of time and the extent to which the fair value has been less than cost; the nature of the issuer and its financial condition and near-term prospects; and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. The evaluation of these factors is a subjective process and involves estimates and assumptions about matters that are inherently uncertain. Should actual factors and conditions differ materially from those used by management, the actual realization of gains or losses on investment securities could differ materially from the amounts recorded in the financial statements. Accounting for a business combination that was completed prior to 2009 requires the application of the purchase method of accounting. Under the purchase method, the Company was required to record the assets and liabilities acquired through the LyndonBank merger in 2007 at fair market value, with the excess of the purchase price over the fair value of the net assets recorded as goodwill and evaluated annually for impairment. Management uses various assumptions in evaluating goodwill for impairment. Management utilizes numerous techniques to estimate the carrying value of various other assets held by the Company, including, but not limited to, bank premises and equipment and deferred taxes. The assumptions considered in making these estimates are based on historical experience and on various other factors that are believed by management to be reasonable under the circumstances. Management acknowledges that the use of different estimates or assumptions could produce different estimates of carrying values. |
Presentation of cash flows | For purposes of presentation in the consolidated statements of cash flows, cash and cash equivalents includes cash on hand, amounts due from banks (including cash items in process of clearing), federal funds sold (generally purchased and sold for one day periods) and overnight deposits. |
Investment securities | Debt securities the Company has purchased with the possible intent to sell before maturity are classified as AFS, and are carried at fair value, with unrealized gains and losses, net of tax and reclassification adjustments, reflected as a net amount in the shareholders’ equity section of the consolidated balance sheets and in the statements of changes in shareholders’ equity. Investment securities transactions are accounted for on a trade date basis. The specific identification method is used to determine realized gains and losses on sales of debt securities AFS. Premiums and discounts are recognized in interest income using the interest method over the period to maturity or call date. As of the balance sheet dates, the Company did not hold any securities purchased for the purpose of selling in the near term and classified as trading or any securities purchased with the positive intent and ability to hold to maturity and classified as HTM. For individual debt securities that the Company does not intend to sell and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, the other-than-temporary decline in the fair value of the debt security related to (1) credit loss is recognized in earnings and (2) other factors is recognized in other comprehensive income or loss. Credit loss is deemed to exist if the present value of expected future cash flows using the interest rates at acquisition is less than the amortized cost basis of the debt security. For individual debt securities where the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost, the OTTI is recognized in earnings equal to the entire difference between the security’s cost basis and its fair value at the balance sheet date. |
Other investments | From time to time, the Company acquires partnership interests in limited partnerships for low income housing projects. New investments in limited partnerships are amortized using the proportional amortization method. All investments made before January 1, 2015 are amortized using the effective yield method. The Company has a one-third ownership interest in CFS Partners, which in turn owns 100% of CFSG, a non-depository trust company (see Note 10). The Company’s investment in CFS Partners is accounted for under the equity method of accounting. |
Restricted equity securities | The Company holds certain restricted equity securities acquired for non-investment purposes, and required as a matter of law or as a condition to the receipt of certain financial products and services. These securities are carried at cost. As a member of the FRBB, the Company is required to invest in FRBB stock in an amount equal to 6% of the Bank’s capital stock and surplus. As a member of the FHLBB, the Company is required to invest in $100 par value stock of the FHLBB in an amount that approximates 1% of unpaid principal balances on qualifying loans, plus an additional amount to satisfy an activity based requirement. The stock is nonmarketable and redeemable at par value, subject to the FHLBB’s right to temporarily suspend such redemptions. Members are subject to capital calls in some circumstances to ensure compliance with the FHLBB’s capital plan. In order to access correspondent banking services from the ACBB,the Company is required to invest in a minimum of 20 shares of the common stock of ACBB’s parent company, ACBI. |
Loans held-for-sale | Loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance by charges to income. |
Loans | Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are reported at their outstanding principal balance, adjusted for any charge-offs, the ALL, loan premiums or discounts for acquired loans and any unearned fees or costs on originated loans. Loan interest income is accrued daily on the outstanding balances. For all loan segments, the accrual of interest is discontinued when a loan is specifically determined to be impaired or when the loan is delinquent 90 days and management believes, after considering collection efforts and other factors, that the borrower’s financial condition is such that collection of interest is doubtful. Any unpaid interest previously accrued on those loans is reversed from income. Interest income is generally not recognized on specific impaired loans unless the likelihood of further loss is considered by management to be remote. Interest payments received on non-accrual loans are generally applied as a reduction of the loan principal balance. Loans are returned to accrual status when principal and interest payments are brought current and the customer has demonstrated the intent and ability to make future payments on a timely basis. Loans are written down or charged off when collection of principal is considered doubtful. Loan origination and commitment fees and certain direct loan origination costs are deferred and the net amount is amortized as an adjustment of the related loan’s yield. The Company generally amortizes these amounts over the contractual life of the loans. Loan premiums and discounts on loans acquired in the merger with LyndonBank were amortized as an adjustment to yield on loans. At December 31, 2019, the remainder of these premiums and discounts were fully amortized. Allowance for loan losses The ALL is established through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes that future payments of a loan balance are unlikely. Subsequent recoveries, if any, are credited to the allowance. Unsecured loans, primarily consumer loans, are charged off when they become uncollectible and no later than 120 days past due. Unsecured loans to customers who subsequently file bankruptcy are charged off within 30 days of receipt of the notification of filing or by the end of the month in which the loans become 120 days past due, whichever occurs first. For secured loans, both residential and commercial, the potential loss on impaired loans is carried as a loan loss reserve specific allocation; the loss portion is charged off when collection of the full loan appears unlikely. The unsecured portion of a real estate loan is that portion of the loan exceeding the “fair value” of the collateral less the estimated cost to sell. Value of the collateral is determined in accordance with the Company’s appraisal policy. The unsecured portion of an impaired real estate secured loan is charged off by the end of the month in which the loan becomes 180 days past due. As described below, the allowance consists of general, specific and unallocated components. However, the entire allowance is available to absorb losses in the loan portfolio, regardless of specific, general and unallocated components considered in determining the amount of the allowance. General component The general component of the ALL is based on historical loss experience and various qualitative factors and is stratified by the following loan segments: commercial and industrial, CRE, municipal, residential real estate 1st lien, residential real estate Jr lien and consumer loans. The Company does not disaggregate its portfolio segments further into classes. Loss ratios are calculated by loan segment using appropriate look back periods. Management uses an average of historical losses based on a time frame appropriate to capture relevant loss data for each loan segment in the current economic climate. During periods of economic stability, a relatively longer period (e.g., five years) may be appropriate. During periods of significant expansion or contraction, the Company may appropriately shorten the historical time period. Due primarily to the effects of COVID-19, beginning in the second quarter of 2020, the Company shortened its look back period from five years to one year. Qualitative factors include the levels of and trends in delinquencies and non-performing loans, levels of and trends in loan risk groups, trends in volumes and terms of loans, effects of any changes in loan related policies, experience, ability and the depth of management, documentation and credit data exception levels, national and local economic trends, external factors such as competition and regulation and lastly, concentrations of credit risk in a variety of areas, including portfolio product mix, the level of loans to individual borrowers and their related interests, loans to industry segments, and the geographic distribution of CRE loans. This evaluation is inherently subjective as it requires estimates that are susceptible to revision as more information becomes available. The qualitative factors are determined based on the various risk characteristics of each loan segment. During the third quarter of 2020, the Company adjusted its ALL analysis to begin applying qualitative factors to municipal loans and certain purchased commercial loans, for which the Company does not have any historical loss data. Of the third quarter 2020 provision for loan losses of $362,499, $106,821was attributable to this change. The Company has policies, procedures and internal controls that management believes are commensurate with the risk profile of each of these segments. Major risk characteristics relevant to each portfolio segment are as follows: Commercial & Industrial - Commercial Real Estate - Municipal - Residential Real Estate - 1 st Residential Real Estate - Jr Lien - Consumer - Specific component The specific component of the ALL relates to loans that are impaired. Impaired loans are loans to a borrower that in the aggregate are greater than $100,000 and that are in non-accrual status or are TDRs regardless of amount. A specific allowance is established for an impaired loan when its estimated fair value or net present value of future cash flows is less than the carrying value of the loan. For all loan segments, except consumer loans, a loan is considered impaired when, based on current information and events, in management’s estimation it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant or temporary payment delays and payment shortfalls generally are not classified as impaired. Management evaluates 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 and frequency 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. Impairment is measured on a loan by loan basis, by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent. Impaired loans also include troubled loans that are restructured. A TDR occurs when the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower that would otherwise not be granted. TDRs may include the transfer of assets to the Company in partial satisfaction of a troubled loan, a modification of a loan’s terms, or a combination of the two. As described in Note 3, under March 2020 guidance from the federal banking agencies and concurrence by the FASB, certain short-term loan accommodations made in good faith for borrowers experiencing financial difficulties due to the COVID-19 health emergency are not considered TDRs. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer loans for impairment evaluation, unless such loans are subject to a restructuring agreement. Unallocated component An unallocated component of the ALL is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component reflects management’s estimate of the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. |
Bank premises and equipment | Bank premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed principally by the straight-line method over the estimated useful lives of the assets. The cost of assets sold or otherwise disposed of, and the related accumulated depreciation, are eliminated from the accounts and the resulting gains or losses are reflected in the consolidated statements of income. Maintenance and repairs are charged to current expense as incurred and the cost of major renewals and betterments is capitalized. |
Other real estate owned | Real estate properties acquired through or in lieu of loan foreclosure or properties no longer used for bank operations are initially recorded at fair value less estimated selling cost at the date of acquisition, foreclosure or transfer. Fair value is determined, as appropriate, either by obtaining a current appraisal or evaluation prepared by an independent, qualified appraiser, by obtaining a broker’s market value analysis, and finally, if the Company has limited exposure and limited risk of loss, by the opinion of management as supported by an inspection of the property and its most recent tax valuation. During periods of declining market values, the Company will generally obtain a new appraisal or evaluation. Any write-down based on the asset’s fair value at the date of acquisition or institution of foreclosure is charged to the ALL. After acquisition through or in lieu of foreclosure, these assets are carried at the lower of their new cost basis or fair value. Costs of significant property improvements are capitalized, whereas costs relating to holding the property are expensed as incurred. Appraisals by an independent, qualified appraiser are performed periodically on properties that management deems significant, or evaluations may be performed by management or a qualified third party on OREO properties in the portfolio that are deemed less significant or less vulnerable to market conditions. Subsequent write-downs are recorded as a charge to other expense. Gains or losses on the sale of such properties are included in income when the properties are sold. |
Intangible assets | Intangible assets include the excess of the purchase price over the fair value of net assets acquired (goodwill) in the Company’s 2007 acquisition of LyndonBank. Goodwill is not amortizable and is reviewed for impairment annually, or more frequently as events or circumstances warrant. |
Income taxes | The Company recognizes income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are established for the temporary differences between the accounting bases and the tax bases of the Company’s assets and liabilities at enacted tax rates expected to be in effect when the amounts related to such temporary differences are realized or settled. Adjustments to the Company’s deferred tax assets are recognized as deferred income tax expense or benefit based on management’s judgments relating to the outcome of such asset. |
Mortgage servicing | Servicing assets are recognized as separate assets when rights are acquired through purchase or retained upon the sale of loans. Capitalized servicing rights are reported in Other assets and initially recorded at fair value, and are amortized against non-interest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. Servicing rights are periodically evaluated for impairment, based upon the estimated fair value of the rights as compared to amortized cost. Impairment is determined by stratifying the rights by predominant characteristics, such as interest rates and terms. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Impairment is recognized through a valuation allowance and is recorded as amortization of Other assets, to the extent that estimated fair value is less than the capitalized amount at the valuation date. Subsequent improvement, if any, in the estimated fair value of impaired MSRs is reflected in a positive valuation adjustment and is recognized in other income up to (but not in excess of) the amount of the prior impairment. |
Pension costs | Pension costs are charged to salaries and employee benefits expense and accrued over the active service period. |
Advertising costs | The Company expenses advertising costs as incurred. |
Comprehensive income | US GAAP generally requires recognized revenue, expenses, gains and losses to be included in net income. Certain changes in assets and liabilities, such as the after-tax effect of unrealized gains and losses on available-for-sale securities, are not reflected in the consolidated statement of income, but the cumulative effect of such items from period-to-period is reflected as a separate component of the shareholders’ equity section of the consolidated balance sheet (accumulated other comprehensive income or loss). Other comprehensive income or loss, along with net income, comprises the Company’s total comprehensive income. |
Preferred stock | In December, 2007 the Company issued25shares of fixed-to-floating rate non-cumulative perpetual preferred stock, without par value and having a liquidation preference of $100,000per share. There were 15 shares of preferred stock outstanding as of December 31, 2020 and 2019. Under the terms of the preferred stock, the Company pays non-cumulative cash dividends quarterly, when, as and if declared by the Board. Dividends are payable at a variable dividend rate equal to the Wall Street Journal Prime Rate in effect on the first business day of each quarterly dividend period. A variable rate of 5.50% was in effect for the dividend payments due in each of the first three quarters of 2019, followed by a decrease to a rate of 5.00% for the dividend payment in the fourth quarter of 2019. The rate decreased to 4.75% for the dividend paid in the first quarter of 2020, followed by two decreases with a rate of 3.25% in effect for the last three quarters of 2020, as well as the first quarter of 2021. Partial redemptions of the Company’s preferred stock began in 2018, and are at the discretion of management and voted on by the Board. The Company redeemed five shares of preferred stock on March 31, 2019 at a redemption price of $500,000plus accrued dividends. The Company chose to not redeem any additional preferred shares during 2020, but may consider further redemptions in future periods. |
Earnings per common share | Earnings per common share amounts are computed based on net income, net of dividends to preferred shareholders, and on the weighted average number of shares of common stock issued during the period, including DRIP shares issuable upon reinvestment of dividends (retroactively adjusted for stock splits and stock dividends, if any) and reduced for shares held in treasury. The following table illustrates the calculation of earnings per common share for the periods presented, as adjusted for the cash dividends declared on the preferred stock: Years Ended December 31, 2020 2019 Net income, as reported $ 10,758,502 $ 8,824,446 Less: dividends to preferred shareholders 54,375 87,500 Net income available to common shareholders $ 10,704,127 $ 8,736,946 Weighted average number of common shares used in calculating earnings per share 5,274,785 5,204,768 Earnings per common share $ 2.03 $ 1.68 |
Off-balance-sheet financial instruments | In the ordinary course of business, the Company is a party to off-balance-sheet financial instruments consisting of commitments to extend credit, commercial and municipal letters of credit, standby letters of credit, and risk-sharing commitments on residential mortgage loans sold through the FHLBB’s MPF program. Such financial instruments are recorded in the consolidated financial statements when they are funded (see Note 18). |
Transfers of financial assets | Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Significant Accounting Policies | |
Schedule of Earnings per common share | Years Ended December 31, 2020 2019 Net income, as reported $ 10,758,502 $ 8,824,446 Less: dividends to preferred shareholders 54,375 87,500 Net income available to common shareholders $ 10,704,127 $ 8,736,946 Weighted average number of common shares used in calculating earnings per share 5,274,785 5,204,768 Earnings per common share $ 2.03 $ 1.68 |
Investment Securities (Tables)
Investment Securities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investment Securities | |
Schedule of available for debt securities | Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value December 31, 2020 U.S. GSE debt securities $ 8,007,142 $ 165,934 $ 3,245 $ 8,169,831 Agency MBS 40,861,370 547,930 30,951 41,378,349 ABS and OAS 2,508,997 160,999 0 2,669,996 Other investments 8,169,000 318,002 0 8,487,002 Total $ 59,546,509 $ 1,192,865 $ 34,196 $ 60,705,178 December 31, 2019 U.S. GSE debt securities $ 18,002,549 $ 99,743 $ 40,672 $ 18,061,620 Agency MBS 16,169,819 86,874 51,318 16,205,375 ABS and OAS 2,799,657 55,418 2,166 2,852,909 Other investments 8,665,000 181,846 0 8,846,846 Total $ 45,637,025 $ 423,881 $ 94,156 $ 45,966,750 |
Schedule of investments pledged for collateral | Amortized Fair Cost Value December 31, 2020 $ 59,546,509 $ 60,705,178 December 31, 2019 45,637,025 45,966,750 |
Schedule of maturities of debt securities available for sale | Amortized Fair Cost Value Due in one year or less $ 2,227,000 $ 2,247,603 Due from one to five years 5,942,000 6,239,399 Due from five to ten years 9,511,476 9,801,921 Due after ten years 1,004,663 1,037,906 Agency MBS 40,861,370 41,378,349 Total $ 59,546,509 $ 60,705,178 |
Schedule of unrealized loss | Less than 12 months 12 months or more Totals Fair Unrealized Fair Unrealized Number of Fair Unrealized Value Loss Value Loss Securities Value Loss December 31, 2020 U.S. GSE debt securities $ 1,999,234 $ 3,245 $ 0 $ 0 2 $ 1,999,234 $ 3,245 Agency MBS 2,076,167 19,845 520,546 11,106 6 2,596,713 30,951 ABS and OAS 0 0 0 0 0 0 0 Other investments 0 0 0 0 0 0 0 Total $ 4,075,401 $ 23,090 $ 520,546 $ 11,106 8 $ 4,595,947 $ 34,196 December 31, 2019 U.S. GSE debt securities $ 7,964,192 $ 40,672 $ 0 $ 0 7 $ 7,964,192 $ 40,672 Agency MBS 5,273,683 24,648 2,920,091 26,670 13 8,193,774 51,318 ABS and OAS 1,000,490 2,166 0 0 1 1,000,490 2,166 Other investments 0 0 0 0 0 0 0 Total $ 14,238,365 $ 67,486 $ 2,920,091 $ 26,670 21 $ 17,158,456 $ 94,156 |
Loans Allowance for Loan Losses
Loans Allowance for Loan Losses and Credit Quality (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Loans, Allowance for Loan Losses and Credit Quality | |
Schedule of composition of net loans | December 31, December 31, 2020 2019 Commercial & industrial $ 161,067,501 $ 98,930,831 Commercial real estate 280,544,550 246,282,726 Municipal 54,807,367 55,817,206 Residential real estate - 1st lien 170,507,263 158,337,296 Residential real estate - Jr lien 38,147,659 43,230,873 Consumer 4,280,990 4,390,005 Total loans 709,355,330 606,988,937 Deduct (add): ALL 7,208,485 5,926,491 Deferred net loan fees (costs) 1,195,741 (362,415 ) Net loans $ 700,951,104 $ 601,424,861 |
Schedule of past due loans by segment | 90 Days Total Non- Accrual 90 Days or More and December 31, 2020 30-89 Days or More Past Due Current Total Loans Loans Accruing Commercial & industrial $ 119,413 $ 0 $ 119,413 $ 160,948,088 $ 161,067,501 $ 434,196 $ 0 Commercial real estate 127,343 567,957 695,300 279,849,250 280,544,550 1,875,942 0 Municipal 0 0 0 54,807,367 54,807,367 0 0 Residential real estate 1st lien 1,872,439 828,344 2,700,783 167,806,480 170,507,263 2,173,315 390,288 Jr lien 18,322 180,711 199,033 37,948,626 38,147,659 191,311 98,889 Consumer 14,388 0 14,388 4,266,602 4,280,990 0 0 Totals $ 2,151,905 $ 1,577,012 $ 3,728,917 $ 705,626,413 $ 709,355,330 $ 4,674,764 $ 489,177 90 Days Total Non- Accrual 90 Days or More and December 31, 2019 30-89 Days or More Past Due Current Total Loans Loans Accruing Commercial & industrial $ 68,532 $ 44,503 $ 113,035 $ 98,817,796 $ 98,930,831 $ 480,083 $ 0 Commercial real estate 1,690,307 151,723 1,842,030 244,440,696 246,282,726 1,600,827 0 Municipal 0 0 0 55,817,206 55,817,206 0 0 Residential real estate 1st lien 3,871,045 1,217,098 5,088,143 153,249,153 158,337,296 2,112,267 530,046 Jr lien 331,416 147,976 479,392 42,751,481 43,230,873 240,753 112,386 Consumer 49,607 0 49,607 4,340,398 4,390,005 0 0 Totals $ 6,010,907 $ 1,561,300 $ 7,572,207 $ 599,416,730 $ 606,988,937 $ 4,433,930 $ 642,432 |
Residential mortgage loans in process of foreclosure | Number of loans Balance December 31, 2020 6 $ 312,807 December 31, 2019 9 495,943 |
Changes in the allowance for loan losses | Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate Municipal 1st Lien Jr Lien Consumer Unallocated Total ALL beginning balance $ 836,766 $ 3,181,646 $ 0 $ 1,388,564 $ 289,684 $ 51,793 $ 178,038 $ 5,926,491 Charge-offs (39,148 ) (34,200 ) 0 (203,623 ) (28,673 ) (74,327 ) 0 (379,971 ) Recoveries 1,087 20,000 0 12,856 5,809 33,213 0 72,965 Provision (credit) 43,842 686,707 82,211 537,507 (31,924 ) 49,782 220,875 1,589,000 ALL ending balance $ 842,547 $ 3,854,153 $ 82,211 $ 1,735,304 $ 234,896 $ 60,461 $ 398,913 $ 7,208,485 ALL evaluated for impairment Individually $ 0 $ 0 $ 0 $ 108,474 $ 307 $ 0 $ 0 $ 108,781 Collectively 842,547 3,854,153 82,211 1,626,830 234,589 60,461 398,913 7,099,704 Total $ 842,547 $ 3,854,153 $ 82,211 $ 1,735,304 $ 234,896 $ 60,461 $ 398,913 $ 7,208,485 Loans evaluated for impairment Individually $ 414,266 $ 1,943,723 $ 0 $ 4,657,050 $ 135,053 $ 0 $ 7,150,092 Collectively 160,653,235 278,600,827 54,807,367 165,850,213 38,012,606 4,280,990 702,205,238 Total $ 161,067,501 $ 280,544,550 $ 54,807,367 $ 170,507,263 $ 38,147,659 $ 4,280,990 $ 709,355,330 Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate Municipal 1st Lien Jr Lien Consumer Unallocated Total ALL beginning balance $ 697,469 $ 3,019,868 $ 0 $ 1,421,494 $ 273,445 $ 56,787 $ 133,478 $ 5,602,541 Charge-offs (175,815 ) (116,186 ) 0 (242,244 ) (222,999 ) (102,815 ) 0 860,059 ) Recoveries 10,768 50,388 0 15,776 2,200 38,710 0 117,842 Provision 304,344 227,576 0 193,538 237,038 59,111 44,560 1,066,167 ALL ending balance $ 836,766 $ 3,181,646 $ 0 $ 1,388,564 $ 289,684 $ 51,793 $ 178,038 $ 5,926,491 ALL evaluated for impairment Individually $ 0 $ 0 $ 0 $ 103,836 $ 712 $ 0 $ 0 $ 104,548 Collectively 836,766 3,181,646 0 1,284,728 288,972 51,793 178,038 5,821,943 Total $ 836,766 $ 3,181,646 $ 0 $ 1,388,564 $ 289,684 $ 51,793 $ 178,038 $ 5,926,491 Loans evaluated for impairment Individually $ 420,933 $ 1,699,238 $ 0 $ 4,471,902 $ 156,073 $ 0 $ 6,748,146 Collectively 98,509,898 244,583,488 55,817,206 153,865,394 43,074,800 4,390,005 600,240,791 Total $ 98,930,831 $ 246,282,726 $ 55,817,206 $ 158,337,296 $ 43,230,873 $ 4,390,005 $ 606,988,937 |
Impaired loans by segment | As of December 31, 2020 Unpaid Average Interest Recorded Principal Related Recorded Income Investment(1) Balance Allowance Investment(1)(2) Recognized(2) Related allowance recorded Residential real estate 1st lien $ 900,581 $ 950,063 $ 108,474 $ 889,262 $ 72,713 Jr lien 4,777 4,775 307 5,416 541 Total with related allowance 905,358 954,838 108,781 894,678 73,254 No related allowance recorded Commercial & industrial 414,266 471,405 397,136 6,396 Commercial real estate 1,944,013 2,394,284 1,746,430 14,139 Residential real estate 1st lien 3,788,965 4,607,848 3,878,829 230,838 Jr lien 130,279 169,720 163,750 4,524 Total with no related allowance 6,277,523 7,643,257 6,186,145 255,897 Total impaired loans $ 7,182,881 $ 8,598,095 $ 108,781 $ 7,080,823 $ 329,151 As of December 31, 2019 Unpaid Average Interest Recorded Principal Related Recorded Income Investment(1) Balance Allowance Investment(1)(2) Recognized(2) Related allowance recorded Commercial & industrial $ 0 $ 0 $ 0 $ 32,466 $ 0 Commercial real estate 0 0 0 97,720 0 Residential real estate 1st lien 878,439 902,000 103,836 982,158 86,039 Jr lien 6,121 6,101 712 6,869 648 Total with related allowance 884,560 908,101 104,548 1,119,213 86,687 No related allowance recorded Commercial & industrial 420,933 445,509 307,208 6,396 Commercial real estate 1,699,772 2,031,764 1,812,836 21,591 Residential real estate 1st lien 3,614,960 4,273,884 3,778,822 212,883 Jr lien 149,972 157,754 224,938 4,524 Total with no related allowance 5,885,637 6,908,911 6,123,804 245,394 Total impaired loans $ 6,770,197 $ 7,817,012 $ 104,548 $ 7,243,017 $ 332,081 |
Risk ratings portfolio | Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate Municipal 1st Lien Jr Lien Consumer Total Group A $ 156,748,590 $ 261,932,833 $ 54,807,367 $ 167,478,918 $ 37,850,056 $ 4,280,990 $ 683,098,754 Group B 998,641 12,784,078 0 0 0 0 13,782,719 Group C 3,320,270 5,827,639 0 3,028,345 297,603 0 12,473,857 Total $ 161,067,501 $ 280,544,550 $ 54,807,367 $ 170,507,263 $ 38,147,659 $ 4,280,990 $ 709,355,330 As of December 31, 2019 Residential Residential Commercial Commercial Real Estate Real Estate & Industrial Real Estate Municipal 1st Lien Jr Lien Consumer Total Group A $ 93,774,871 $ 233,702,063 $ 55,817,206 $ 154,770,678 $ 42,725,543 $ 4,390,005 $ 585,180,366 Group B 3,295,223 4,517,811 0 0 0 0 7,813,034 Group C 1,860,737 8,062,852 0 3,566,618 505,330 0 13,995,537 Total $ 98,930,831 $ 246,282,726 $ 55,817,206 $ 158,337,296 $ 43,230,873 $ 4,390,005 $ 606,988,937 |
Loans modified as TDRs | Year ended December 31, 2020 Pre- Post- Modification Modification Outstanding Outstanding Number of Recorded Recorded Contracts Investment Investment Residential real estate 1st lien 6 $ 591,826 $ 687,751 Year ended December 31, 2019 Pre- Post- Modification Modification Outstanding Outstanding Number of Recorded Recorded Contracts Investment Investment Commercial & industrial 6 $ 371,358 $ 372,259 Commercial real estate 1 19,266 21,628 Residential real estate 1st lien 6 755,476 798,800 Jr lien 1 55,557 57,415 14 $ 1,201,657 $ 1,250,102 |
TDRs payment default | Year ended December 31, 2020 Number of Recorded Contracts Investment Residential real estate - 1st lien 1 $ 165,168 Year ended December 31, 2019 Number of Recorded Contracts Investment Commercial & industrial 2 $ 27,818 Residential real estate - 1st lien 1 227,907 Residential real estate - Jr lien 1 55,010 4 $ 310,735 |
Specific allowances | 2020 2019 Specific allowance $ 108,781 $ 104,548 |
Loan Servicing (Tables)
Loan Servicing (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Transactions with Related Parties | |
Schedule of mortgage servicing rights | 2020 2019 Balance at beginning of year $ 939,577 $ 1,004,948 MSRs capitalized 292,654 114,580 MSRs amortized (256,435 ) (179,951 ) Change in valuation allowance (53,650 ) 0 Balance at end of year $ 922,146 $ 939,577 |
Bank Premises and Equipment (Ta
Bank Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Bank Premises and Equipment | |
Schedule of bank premises and equipment and accumulated depreciation and amortization | 2020 2019 Buildings and improvements $ 10,421,580 $ 10,575,514 Land and land improvements 2,663,549 2,650,671 Furniture and equipment 5,307,533 6,848,263 Leasehold improvements 824,605 1,161,073 Finance lease 588,347 588,347 Operating leases 1,417,859 1,490,779 Other prepaid assets 181,627 159,914 21,405,100 23,474,561 Less accumulated depreciation and amortization (11,195,231 ) (12,515,158 ) Net bank premises and equipment $ 10,209,869 $ 10,959,403 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Schedule of Operating lease cost | Years Ended December 31, 2020 2019 Operating lease cost $ 259,954 $ 255,475 Finance lease cost: Amortization of right-of-use assets $ 38,667 $ 70,667 Interest on lease liabilities 5,396 16,705 Variable rent expense 33,940 33,940 Total finance lease cost $ 78,003 $ 121,312 |
Schedule of Operating lease right-of-use assets | December 31, 2020 2019 Operating Leases Operating lease right-of-use assets $ 1,048,686 $ 1,254,384 Operating lease liabilities $ 1,060,391 $ 1,263,173 Finance Leases Finance lease right-of-use assets $ 85,680 $ 124,347 Finance lease liabilities $ 38,159 $ 99,823 December 31, 2020 2019 Weighted Average Remaining Lease Term Operating Leases 4.0 Years 4.4 Years Finance Leases 0.5 Years 1.5 Years Weighted Average Discount Rate Operating Leases 1.28 % 1.28 % Finance Leases 7.50 % 7.50 % |
schedule of Operating lease obligations | 2021 $ 210,350 2022 216,180 2023 223,432 2024 199,648 2025 154,659 Subsequent to 2025 99,165 Total $ 1,103,434 |
Schedule of Finance lease obligations | 2021 $ 39,119 Less amount representing interest (960 ) Present value of net minimum lease payments $ 38,159 |
Schedule of undiscounted cash flows in the maturity analysis | Operating Leases Finance Leases Undiscounted cash flows $ 1,103,434 $ 39,119 Discount effect of cash flows (43,043 ) (960 ) Lease liabilities $ 1,060,391 $ 38,159 |
Deposits (Table)
Deposits (Table) | 12 Months Ended |
Dec. 31, 2020 | |
Deposits | |
Schedule of maturity distribution of time deposits | 2021 $ 74,922,873 2022 16,406,502 2023 7,116,526 2024 11,344,797 2025 3,541,263 Total $ 113,331,961 |
Borrowed Funds (Tables)
Borrowed Funds (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Borrowed Funds | |
Schedule of Long-Term Advances | 2020 2019 Long-Term Advances(1) FHLBB term advance, 0.00%, due January 07, 2021 $ 150,000 $ 0 FHLBB term advance, 0.00%, due February 26, 2021 350,000 350,000 FHLBB term advance, 0.00%, due November 22, 2021 1,000,000 1,000,000 FHLBB term advance, 0.00%, due September 22, 2023 200,000 200,000 FHLBB term advance, 0.00%, due November 12, 2025 300,000 300,000 FHLBB term advance, 0.00%, due November 13, 2028 800,000 800,000 $ 2,800,000 $ 2,650,000 |
Repurchase Agreements (Tables)
Repurchase Agreements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Repurchase Agreements | |
schedule of Securities sold | December 31, 2020 2019 Period end balance $ 38,727,312 $ 33,189,848 Average balance 29,687,950 33,545,527 Highest month-end balance 38,727,312 38,868,833 Weighted average interest rate 0.86 % 0.89 % Pledged investment (1) Amortized cost 59,546,509 45,637,025 Fair value 60,705,178 45,966,750 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Schedule of Provision for income taxes | 2020 2019 Currently paid or payable $ 2,518,516 $ 1,693,624 Deferred (benefit) expense (270,427 ) 96,236 Total income tax expense (1) $ 2,248,089 $ 1,789,860 |
Schedule of federal income tax | 2020 2019 Computed expense at statutory rates $ 2,731,384 $ 2,236,904 Tax exempt interest and BOLI (309,102 ) (306,073 ) Disallowed interest 12,917 15,798 Partnership rehabilitation and tax credits (433,970 ) (415,099 ) Low income housing investment amortization expense 265,982 246,564 Other (19,122 ) 11,766 $ 2,248,089 $ 1,789,860 |
Schedule of deferred income tax (benefit) expense | 2020 2019 Depreciation $ 10,368 $ 126,734 Mortgage servicing rights (3,661 ) (13,728 ) Deferred compensation 3,722 3,701 Bad debts (269,219 ) (68,029 ) Limited partnership amortization (39,430 ) 60,588 Investment in CFSG Partners 13,408 (3,323 ) Loan fair value 0 (6,171 ) Prepaid expenses 11,072 (10,741 ) Other 3,313 7,205 Change in deferred tax (benefit) expense $ (270,427) $ 96,236 |
Schedule of significant components of the net deferred tax asset | 2020 2019 Components of the deferred tax asset: Bad debts $ 1,513,782 $ 1,244,563 Deferred compensation 9,176 12,898 Contingent liability - MPF program 17,838 17,838 Finance lease 7,101 11,930 Other 20,814 16,346 Total deferred tax asset 1,568,711 1,303,575 Components of the deferred tax liability: Depreciation 394,564 384,197 Limited partnerships 37,565 76,995 Mortgage servicing rights 193,650 197,311 Unrealized gain on debt securities AFS 243,321 69,242 Investment in CFS Partners 84,462 71,054 Operating lease 3,178 226 Prepaid expenses 79,810 68,738 Total deferred tax liability 1,036,550 867,763 Net deferred tax asset $ 532,161 $ 435,812 |
Financial Instruments with Of_2
Financial Instruments with Off-Balance-Sheet Risk (Table) | 12 Months Ended |
Dec. 31, 2020 | |
Financial Instruments with Off-Balance-Sheet Risk (Table) | |
Financial Instruments with Off-Balance-Sheet Risk | Contract or Notional Amount 2020 2019 Unused portions of home equity lines of credit $ 35,217,177 $ 32,784,105 Residential and commercial construction lines of credit 14,843,617 12,364,436 Commercial real estate commitments 32,888,666 24,377,588 Commercial and industrial commitments 57,848,075 47,659,341 Other commitments to extend credit 42,140,295 64,469,012 Standby letters of credit and commercial letters of credit 1,585,000 1,375,500 Recourse on sale of credit card portfolio 327,855 254,430 MPF credit enhancement obligation, net (See Note 19) 552,158 552,158 |
Transactions with Related Par_2
Transactions with Related Parties (Table) | 12 Months Ended |
Dec. 31, 2020 | |
Transactions with Related Parties | |
Schedule of Aggregate loan transactions | 2020 2019 Balance, beginning of year $ 9,127,542 $ 6,730,842 Loans - new Directors 9,769,951 0 New loans to existing Principal Officers/Directors 3,330,226 4,491,524 Repayment (5,453,184 ) (2,094,824 ) Balance, end of year $ 16,774,535 $ 9,127,542 |
Regulatory Capital Requiremen_2
Regulatory Capital Requirements (Table) | 12 Months Ended |
Dec. 31, 2020 | |
Regulatory Capital Requirements | |
Schedule of regulatory capital ratios | Minimum Minimum Minimum For Capital To Be Well For Capital Adequacy Purposes Capitalized Under Adequacy with Conservation Prompt Corrective Actual Purposes: Buffer(1): Action Provisions(2): Amount Ratio Amount Ratio Amount Ratio Amount Ratio (Dollars in Thousands) December 31, 2020 Common equity tier 1 capital (to risk-weighted assets) Company $ 77,594 14.15 % $ 24,680 4.50 % $ 38,391 7.00 % N/A N/A Bank $ 77,017 14.06 % $ 24,654 4.50 % $ 38,351 7.00 % $ 35,611 6.50 % Tier 1 capital (to risk-weighted assets) Company $ 77,594 14.15 % $ 32,907 6.00 % $ 46,618 8.50 % N/A N/A Bank $ 77,017 14.06 % $ 32,872 6.00 % $ 46,569 8.50 % $ 43,829 8.00 % Total capital (to risk-weighted assets) Company $ 84,455 15.40 % $ 43,876 8.00 % $ 57,587 10.50 % N/A N/A Bank $ 83,871 15.31 % $ 43,829 8.00 % $ 57,526 10.50 % $ 54,787 10.00 % Tier 1 capital (to average assets) Company $ 77,594 8.80 % $ 35,273 4.00 % N/A N/A N/A N/A Bank $ 77,017 8.74 % $ 35,252 4.00 % N/A N/A $ 44,065 5.00 % December 31, 2019: Common equity tier 1 capital (to risk-weighted assets) Company $ 69,947 13.48 % $ 23,352 4.50 % $ 36,325 7.00 % N/A N/A Bank $ 69,330 13.38 % $ 23,325 4.50 % $ 36,283 7.00 % $ 33,691 6.50 % Tier 1 capital (to risk-weighted assets) Company $ 69,947 13.48 % $ 31,135 6.00 % $ 44,108 8.50 % N/A N/A Bank $ 69,330 13.38 % $ 31,099 6.00 % $ 44,057 8.50 % $ 41,466 8.00 % Total capital (to risk-weighted assets) Company $ 75,943 14.63 % $ 41,514 8.00 % $ 54,487 10.50 % N/A N/A Bank $ 75,326 14.53 % $ 41,466 8.00 % $ 54,424 10.50 % $ 51,832 10.00 % Tier 1 capital (to average assets) Company $ 69,947 9.57 % $ 29,223 4.00 % N/A N/A N/A N/A Bank $ 69,330 9.50 % $ 29,201 4.00 % N/A N/A $ 36,501 5.00 % |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value | |
Schedule of fair value assets and liabilities on recurring basis | Level 2 2020 2019 Assets: (market approach) U.S. GSE debt securities $ 8,169,831 $ 18,061,620 Agency MBS 41,378,349 16,205,375 ABS and OAS 2,669,996 2,852,909 Other investments 8,487,002 8,846,846 Total $ 60,705,178 $ 45,966,750 |
Schedule of fair value assets and liabilities non-recurring basis | Level 2 2020 2019 Assets: (market approach) Impaired loans, net of related allowance $ 323,645 $ 0 Loans held-for-sale 130,400 0 MSRs (1) 922,146 939,577 OREO 0 966,738 |
Schedule of estimated fair values of financial instruments | December 31, 2020 Fair Fair Fair Fair Carrying Value Value Value Value Amount Level 1 Level 2 Level 3 Total (Dollars in Thousands) Financial assets: Cash and cash equivalents $ 115,050 $ 115,050 $ 0 $ 0 $ 115,050 Debt securities AFS 60,705 0 60,705 0 60,705 Restricted equity securities 1,447 0 1,447 0 1,447 Loans and loans held-for-sale, net of ALL Commercial & industrial 158,601 0 0 160,371 160,371 Commercial real estate 276,476 0 208 279,281 279,489 Municipal 54,694 0 0 55,601 55,601 Residential real estate - 1st lien 169,201 0 116 170,385 170,501 Residential real estate - Jr lien 37,892 0 0 37,991 37,991 Consumer 4,218 0 0 4,238 4,238 MSRs (1) 922 0 922 0 922 Accrued interest receivable 2,988 0 2,988 0 2,988 Financial liabilities: Deposits Other deposits 778,085 0 779,824 0 779,824 Brokered deposits 4,206 0 4,208 0 4,208 Long-term borrowings 2,800 0 2,724 0 2,724 Repurchase agreements 38,727 0 38,727 0 38,727 Operating lease obligations 1,060 0 1,060 0 1,060 Finance lease obligations 38 0 38 0 38 Subordinated debentures 12,887 0 12,876 0 12,876 Accrued interest payable 86 0 86 0 86 December 31, 2019 Fair Fair Fair Fair Carrying Value Value Value Value Amount Level 1 Level 2 Level 3 Total (Dollars in Thousands) Financial assets: Cash and cash equivalents $ 48,562 $ 48,562 $ 0 $ 0 $ 48,562 Debt securities AFS 45,967 0 45,967 0 45,967 Restricted equity securities 1,432 0 1,432 0 1,432 Loans and loans held-for-sale, net of ALL Commercial & industrial 98,062 0 0 97,356 97,356 Commercial real estate 243,022 0 0 242,735 242,735 Municipal 55,817 0 0 55,867 55,867 Residential real estate - 1st lien 156,897 0 0 156,520 156,520 Residential real estate - Jr lien 42,927 0 0 42,950 42,950 Consumer 4,337 0 0 4,306 4,306 MSRs (1) 940 0 1,250 0 1,250 Accrued interest receivable 2,337 0 2,337 0 2,337 Financial liabilities: Deposits Other deposits 603,872 0 604,267 0 604,267 Brokered deposits 11,149 0 11,153 0 11,153 Long-term borrowings 2,650 0 2,427 0 2,427 Repurchase agreements 33,190 0 33,190 0 33,190 Operating lease obligations 1,263 0 1,263 0 1,263 Finance lease obligations 100 0 100 0 100 Subordinated debentures 12,887 0 12,831 0 12,831 Accrued interest payable 139 0 139 0 139 |
Condensed Financial Informati_2
Condensed Financial Information Parent Company Only (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Condensed Financial Information Parent Company Only | |
Schedule of Condensed Balance Sheets | Community Bancorp. (Parent Company Only) December 31, December 31, Balance Sheets 2020 2019 Assets Cash $ 750,371 $ 744,687 Investment in subsidiary - Community National Bank 89,598,666 81,164,447 Investment in Capital Trust 387,000 387,000 Income taxes receivable 184,973 213,071 Total assets $ 90,921,010 $ 82,509,205 Liabilities and Shareholders’ Equity Liabilities Junior subordinated debentures $ 12,887,000 $ 12,887,000 Dividends payable 745,297 727,526 Total liabilities 13,632,297 13,614,526 Shareholders’ Equity Preferred stock, 1,000,000 shares authorized, 15 shares issued and outstanding at December 31, 2020 and 2019 ($100,000 liquidation value, per share) 1,500,000 1,500,000 Common stock - $2.50 par value; 15,000,000 shares authorized, 5,527,380 and 5,449,857 shares issued at December 31, 2020 and 2019, respectively (including 18,128 and 16,267 shares issued February 1, 2021 and 2020, respectively) 13,818,450 13,624,643 Additional paid-in capital 34,309,646 33,464,381 Retained earnings 29,368,046 22,667,949 Accumulated other comprehensive income 915,348 260,483 Less: treasury stock, at cost; 210,101 shares at December 31, 2020 and 2019 (2,622,777 ) (2,622,777 ) Total shareholders’ equity 77,288,713 68,894,679 Total liabilities and shareholders’ equity $ 90,921,010 $ 82,509,205 |
Schedule of Condensed Statements of Income | Community Bancorp. (Parent Company Only) Years Ended December 31, Condensed Statements of Income 2020 2019 Income Bank subsidiary distributions $ 3,675,000 $ 4,256,000 Dividends on Capital Trust 14,314 20,858 Total income 3,689,314 4,276,858 Expense Interest on junior subordinated debentures 476,666 694,573 Administrative and other 418,474 340,904 Total expense 895,140 1,035,477 Income before applicable income tax benefit and equity in undistributed net income of subsidiary 2,794,174 3,241,381 Income tax benefit 184,973 213,071 Income before equity in undistributed net income of subsidiary 2,979,147 3,454,452 Equity in undistributed net income of subsidiary 7,779,355 5,369,994 Net income $ 10,758,502 $ 8,824,446 |
Schedule of Condensed Statements of Cash Flows | Community Bancorp. (Parent Company Only) Years Ended December 31, Condensed Statements of Cash Flows 2020 2019 Cash Flows from Operating Activities Net income $ 10,758,502 $ 8,824,446 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed net income of subsidiary (7,779,355 ) (5,369,994 ) (Increase) decrease in income taxes receivable 28,097 (5,827 ) Net cash provided by operating activities 3,007,244 3,448,625 Cash Flows from Financing Activities Redemption of preferred stock 0 (500,000 ) Dividends paid on preferred stock (54,375 ) (87,500 ) Dividends paid on common stock (2,947,185 ) (2,837,058 ) Net cash used in financing activities (3,001,560 ) (3,424,558 ) Net increase in cash 5,684 24,067 Cash Beginning 744,687 720,620 Ending $ 750,371 $ 744,687 Cash Received for Income Taxes $ 213,071 $ 207,244 Cash Paid for Interest $ 476,666 $ 694,573 Dividends paid: Dividends declared $ 4,004,030 $ 3,951,279 Increase in dividends payable attributable to dividends declared (17,773 ) (16,987 ) Dividends reinvested (1,039,072 ) (1,097,234 ) $ 2,947,185 $ 2,837,058 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Data (Unaudited) | |
Schedule of summary of financial data | 2020 March 31, June 30, September 30, December 31, Interest income $ 7,772,152 $ 8,191,442 $ 8,086,866 $ 9,011,834 Interest expense 1,476,393 1,206,909 1,050,780 1,112,604 Provision for loan losses 376,503 307,499 362,499 542,499 Non-interest income 1,353,707 1,762,102 1,941,295 1,714,620 Non-interest expense 5,093,219 4,987,453 5,104,717 5,206,352 Net income 1,861,239 2,842,311 2,880,443 3,174,509 Earnings per common share 0.35 0.54 0.54 0.60 2019 March 31, June 30, September 30, December 31, Interest income $ 7,698,368 $ 8,262,422 $ 7,906,454 $ 7,891,564 Interest expense 1,538,540 1,546,953 1,509,033 1,548,595 Provision for loan losses 212,503 141,666 412,499 299,499 Non-interest income 1,318,700 1,434,138 1,597,332 1,595,896 Non-interest expense 5,155,924 5,079,060 4,863,716 4,782,580 Net income 1,771,905 2,419,298 2,261,943 2,371,300 Earnings per common share 0.34 0.46 0.43 0.45 |
Other Income and Other Expens_2
Other Income and Other Expenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Other Expenses | |
Schedule of other income and other expenses | 2020 2019 Income Income from investment in CFS Partners $ 684,891 $ 588,696 Expenses Outsourcing expense $ 473,426 $ 428,668 Service contracts - administration 506,144 539,510 Marketing 425,000 450,533 State deposit tax 704,047 669,502 ATM fees 486,590 434,270 |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Significant Accounting Policies | ||||||||||
Net income | $ 3,174,509 | $ 2,880,443 | $ 2,842,311 | $ 1,861,239 | $ 2,371,300 | $ 2,261,943 | $ 2,419,298 | $ 1,771,905 | $ 10,758,502 | $ 8,824,446 |
Less: dividends to preferred shareholders | 54,375 | 87,500 | ||||||||
Net income available to common shareholders | $ 10,704,127 | $ 8,736,946 | ||||||||
Weighted average number of common shares used in computing earnings per share | 5,274,785 | 5,204,768 | ||||||||
Earnings per common share | $ 0.60 | $ 0.54 | $ 0.54 | $ 0.35 | $ 0.45 | $ 0.43 | $ 0.46 | $ 0.34 | $ 2.03 | $ 1.68 |
Significant Accounting Polici_5
Significant Accounting Policies (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2007 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Allowance for loan losses description | Unsecured loans to customers who subsequently file bankruptcy are charged off within 30 days of receipt of the notification of filing or by the end of the month in which the loans become 120 days past due, whichever occurs first | ||||||||||
Unsecured portion description | The unsecured portion of an impaired real estate secured loan is charged off by the end of the month in which the loan becomes 180 days past due | ||||||||||
Impaired loans description | Impaired loans are loans to a borrower that in the aggregate are greater than $100,000 and that are in non-accrual status or are TDRs regardless of amount | ||||||||||
Preferred stock, shares issued | 15 | 15 | 15 | 15 | |||||||
Preferred stock, shares outstanding | 15 | 15 | 15 | 15 | |||||||
Preferred stock, liquidation value | $ 100,000 | $ 100,000 | $ 100,000 | $ 100,000 | |||||||
Perpetual preferred stock issued | 25 | ||||||||||
Variable rate description | A variable rate of 5.50% was in effect for the dividend payments due in each of the first three quarters of 2019, followed by a decrease to a rate of 5.00% for the dividend payment in the fourth quarter of 2019. The rate decreased to 4.75% for the dividend paid in the first quarter of 2020, followed by two decreases with a rate of 3.25% in effect for the last three quarters of 2020, as well as the first quarter of 2021. | ||||||||||
Accrued dividends | $ 500,000 | ||||||||||
Provision for loan losses | $ 542,499 | $ 362,499 | $ 307,499 | $ 376,503 | $ 299,499 | $ 412,499 | $ 141,666 | $ 212,503 | $ 1,589,000 | $ 1,066,167 | |
Stock par value | $ 2.50 | $ 2.5 | $ 2.50 | $ 2.5 | |||||||
FHLBB [Member] | |||||||||||
Stock par value | $ 100 | $ 100 | |||||||||
CFSG [Member] | |||||||||||
Ownership interest | 100.00% | 100.00% | |||||||||
ACBB [Member] | |||||||||||
Description of minimum invest | the Company is required to invest in a minimum of 20 shares of the common stock of ACBB’s parent company, | ||||||||||
Loan Segment [Member] | |||||||||||
Provision for loan losses | $ 362,499 | $ 106,821 |
Investment Securities (Details)
Investment Securities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Amortized cost | $ 59,546,509 | $ 45,637,025 |
Gross unrealized gains | 1,192,865 | 423,881 |
Gross unrealized losses | 34,196 | 94,156 |
Fair value | 60,705,178 | 45,966,750 |
Other investments [Member] | ||
Amortized cost | 8,169,000 | 8,665,000 |
Gross unrealized gains | 318,002 | 181,846 |
Gross unrealized losses | 0 | 0 |
Fair value | 8,487,002 | 8,846,846 |
Agency mortgage-backed securities (Agency MBS) [Member] | ||
Amortized cost | 40,861,370 | 16,169,819 |
Gross unrealized gains | 547,930 | 86,874 |
Gross unrealized losses | 30,951 | 51,318 |
Fair value | 41,378,349 | 16,205,375 |
ABS and OAS [Member] | ||
Amortized cost | 2,508,997 | 2,799,657 |
Gross unrealized gains | 160,999 | 55,418 |
Gross unrealized losses | 0 | 2,166 |
Fair value | 2,669,996 | 2,852,909 |
U.S. GSE debt securities [Member] | ||
Amortized cost | 8,007,142 | 18,002,549 |
Gross unrealized gains | 165,934 | 99,743 |
Gross unrealized losses | 3,245 | 40,672 |
Fair value | $ 8,169,831 | $ 18,061,620 |
Investment Securities (Details
Investment Securities (Details 1) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Investment Securities (Details) | ||
Amortized cost | $ 59,546,509 | $ 45,637,025 |
Fair value | $ 60,705,178 | $ 45,966,750 |
Investment Securities (Detail_2
Investment Securities (Details 2) - Available for sale Securities [Member] | Dec. 31, 2020USD ($) |
Due in one year or less | $ 2,227,000 |
Due from one to five years | 5,942,000 |
Due from five to ten years | 9,511,476 |
Due after ten years | 1,004,663 |
Agency MBS | 40,861,370 |
Total | 59,546,509 |
Due in one year or less, Fair value | 2,247,603 |
Due from one to five years, Fair value | 6,239,399 |
Due from five to ten years, Fair value | 9,801,921 |
Due after ten years, Fair value | 1,037,906 |
Agency MBS, Fair value | 41,378,349 |
Total, fair value | $ 60,705,178 |
Investment Securities (Detail_3
Investment Securities (Details 3) | 12 Months Ended | |
Dec. 31, 2020USD ($)integer | Dec. 31, 2019USD ($)integer | |
Fair value less than 12 months | $ 4,075,401 | $ 14,238,365 |
Unrealized loss less than 12 months | 23,090 | 67,486 |
Unrealized loss 12 months or more | 11,106 | 26,670 |
Fair value 12 months or more | $ 520,546 | $ 2,920,091 |
Number of securities | integer | 8 | 21 |
Fair value | $ 4,595,947 | $ 17,158,456 |
Unrealized loss | 34,196 | 94,156 |
Other investments [Member] | ||
Fair value less than 12 months | 0 | 0 |
Unrealized loss less than 12 months | 0 | 0 |
Unrealized loss 12 months or more | 0 | 0 |
Fair value 12 months or more | $ 0 | $ 0 |
Number of securities | integer | 0 | 0 |
Fair value | $ 0 | $ 0 |
Unrealized loss | 0 | 0 |
U.S. GSE debt securities [Member] | ||
Fair value less than 12 months | 1,999,234 | 7,964,192 |
Unrealized loss less than 12 months | 3,245 | 40,672 |
Unrealized loss 12 months or more | 0 | 0 |
Fair value 12 months or more | $ 0 | $ 0 |
Number of securities | integer | 2 | 7 |
Fair value | $ 1,999,234 | $ 7,964,192 |
Unrealized loss | 3,245 | 40,672 |
Agency mortgage-backed securities (Agency MBS) [Member] | ||
Fair value less than 12 months | 2,076,167 | 5,273,683 |
Unrealized loss less than 12 months | 19,845 | 24,648 |
Unrealized loss 12 months or more | 11,106 | 26,670 |
Fair value 12 months or more | $ 520,546 | $ 2,920,091 |
Number of securities | integer | 6 | 13 |
Fair value | $ 2,596,713 | $ 8,193,774 |
Unrealized loss | 30,951 | 51,318 |
ABS and OAS [Member] | ||
Fair value less than 12 months | 0 | 1,000,490 |
Unrealized loss less than 12 months | 0 | 2,166 |
Unrealized loss 12 months or more | 0 | 0 |
Fair value 12 months or more | $ 0 | $ 0 |
Number of securities | integer | 0 | 1 |
Fair value | $ 0 | $ 1,000,490 |
Unrealized loss | $ 0 | $ 2,166 |
Investment Securities (Detail_4
Investment Securities (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($)integer | |
Proceeds from sales of debt securities | $ 884,137 | $ 6,553,118 | |
Net realized gain on sale of securities | 39,086 | 1,570 | |
Purchases of restricted equity securities | (537,100) | (176,000) | |
Proceeds from redemption of restricted equity securities | 522,400 | 493,600 | |
Net realized loss on sale of securities AFS | 0 | 28,060 | |
Restricted equity securities, at cost | 1,446,550 | 1,431,850 | |
ACBB [Member] | |||
Restricted equity securities, at cost | 90,000 | 90,000 | |
Numbers of shares purchased | integer | 20 | ||
Purchase price of shares | $ 90,000 | ||
FHLBB [Member] | |||
Purchases of restricted equity securities | (537,100) | (176,000) | |
Investment | 768,400 | 753,700 | |
FRBB [Member] | |||
Investment | $ 588,150 | $ 588,150 |
Loans Allowance for Loan Loss_2
Loans Allowance for Loan Losses and Credit Quality (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Loans, Allowance for Loan Losses and Credit Quality | ||
Commercial & industrial | $ 161,067,501 | $ 98,930,831 |
Commercial real estate | 280,544,550 | 246,282,726 |
Municipal | 54,807,367 | 55,817,206 |
Residential real estate - 1st lien | 170,507,263 | 158,337,296 |
Residential real estate - Jr lien | 38,147,659 | 43,230,873 |
Consumer | 4,280,990 | 4,390,005 |
Total loans | 709,355,330 | 606,988,937 |
Deduct (add): | ||
ALL | 7,208,485 | 5,926,491 |
Deferred net loan fees (costs) | 1,195,741 | (362,415) |
Net loans | $ 700,951,104 | $ 601,424,861 |
Loans Allowance for Loan Loss_3
Loans Allowance for Loan Losses and Credit Quality (Details 1) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
30-89 days | $ 2,151,905 | $ 6,010,907 |
90 days or more | 1,577,012 | 1,561,300 |
Total past due | 3,728,917 | 7,572,207 |
Current | 705,626,413 | 599,416,730 |
Total loans | 709,355,330 | 606,988,937 |
Non-accrual loans | 4,674,764 | 4,433,930 |
90 days or more and accruing | 489,177 | 642,432 |
Commercial Real Estate [Member] | ||
30-89 days | 127,343 | 1,690,307 |
90 days or more | 567,957 | 151,723 |
Total past due | 695,300 | 1,842,030 |
Current | 279,849,250 | 244,440,696 |
Total loans | 280,544,550 | 246,282,726 |
Non-accrual loans | 1,875,942 | 1,600,827 |
90 days or more and accruing | 0 | 0 |
Residential real estate - 1st lien [Member] | ||
30-89 days | 1,872,439 | 3,871,045 |
90 days or more | 828,344 | 1,217,098 |
Total past due | 2,700,783 | 5,088,143 |
Current | 167,806,480 | 153,249,153 |
Total loans | 170,507,263 | 158,337,296 |
Non-accrual loans | 2,173,315 | 2,112,267 |
90 days or more and accruing | 390,288 | 530,046 |
Commercial and industrial [Member] | ||
30-89 days | 119,413 | 68,532 |
90 days or more | 0 | 44,503 |
Total past due | 119,413 | 113,035 |
Current | 160,948,088 | 98,817,796 |
Total loans | 161,067,501 | 98,930,831 |
Non-accrual loans | 434,196 | 480,083 |
90 days or more and accruing | 0 | 0 |
Municipal [Member] | ||
30-89 days | 0 | 0 |
90 days or more | 0 | 0 |
Total past due | 0 | 0 |
Current | 54,807,367 | 55,817,206 |
Total loans | 54,807,367 | 55,817,206 |
Non-accrual loans | 0 | 0 |
90 days or more and accruing | 0 | 0 |
Residential real estate - Jr lien [Member] | ||
30-89 days | 18,322 | 331,416 |
90 days or more | 180,711 | 147,976 |
Total past due | 199,033 | 479,392 |
Current | 37,948,626 | 42,751,481 |
Total loans | 38,147,659 | 43,230,873 |
Non-accrual loans | 191,311 | 240,753 |
90 days or more and accruing | 98,889 | 112,386 |
Consumer [Member] | ||
30-89 days | 14,388 | 49,607 |
90 days or more | 0 | 0 |
Total past due | 14,388 | 49,607 |
Current | 4,266,602 | 4,340,398 |
Total loans | 4,280,990 | 4,390,005 |
Non-accrual loans | 0 | 0 |
90 days or more and accruing | $ 0 | $ 0 |
Loans Allowance for Loan Loss_4
Loans Allowance for Loan Losses and Credit Quality (Details 2) | Dec. 31, 2020USD ($)integer | Dec. 31, 2019USD ($)integer |
Loans, Allowance for Loan Losses and Credit Quality | ||
Residential mortgage loans in process of foreclosure, number of loans | integer | 6 | 9 |
Residential mortgage loans in process of foreclosure, current balance | $ | $ 312,807 | $ 495,943 |
Loans Allowance for Loan Loss_5
Loans Allowance for Loan Losses and Credit Quality (Details 3) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Allowance for loan losses, beginning balance | $ 5,926,491 | $ 5,602,541 |
Charge-offs | (379,971) | (860,059) |
Recoveries | 72,965 | 117,842 |
Provisions (credit) | 1,589,000 | 1,066,167 |
Allowance for loan losses, ending balance | 7,208,485 | 5,926,491 |
Allowance for loan losses evaluated for impairment, individually | 108,781 | 104,548 |
Allowance for loan losses evaluated for impairment, collectively | 7,099,704 | 5,821,943 |
Total ALL evaluted for impairment | 7,208,485 | 5,926,491 |
Total, Loans evaluted for impairment | 709,355,330 | 606,988,937 |
Loans evaluated for impairment, individually | 7,150,092 | 6,748,146 |
Loans evaluated for impairment, collectively | 702,205,238 | 600,240,791 |
Residential Real Estate Jr Lien | ||
Allowance for loan losses, beginning balance | 289,684 | 273,445 |
Charge-offs | (28,673) | (222,999) |
Recoveries | 5,809 | 2,200 |
Provisions (credit) | (31,924) | 237,038 |
Allowance for loan losses, ending balance | 234,896 | 289,684 |
Allowance for loan losses evaluated for impairment, individually | 307 | 712 |
Allowance for loan losses evaluated for impairment, collectively | 234,589 | 288,972 |
Total ALL evaluted for impairment | 234,896 | 289,684 |
Total, Loans evaluted for impairment | 38,147,659 | 43,230,873 |
Loans evaluated for impairment, individually | 135,053 | 156,073 |
Loans evaluated for impairment, collectively | 38,012,606 | 43,074,800 |
Municipal [Member] | ||
Allowance for loan losses, beginning balance | 0 | 0 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provisions (credit) | 82,211 | 0 |
Allowance for loan losses, ending balance | 82,211 | 0 |
Allowance for loan losses evaluated for impairment, individually | 0 | 0 |
Allowance for loan losses evaluated for impairment, collectively | 82,211 | 0 |
Total ALL evaluted for impairment | 82,211 | 0 |
Total, Loans evaluted for impairment | 54,807,367 | 55,817,206 |
Loans evaluated for impairment, individually | 0 | 0 |
Loans evaluated for impairment, collectively | 54,807,367 | 55,817,206 |
Residential Real Estate - 1st Lien [Member] | ||
Allowance for loan losses, beginning balance | 1,388,564 | 1,421,494 |
Charge-offs | (203,623) | (242,244) |
Recoveries | 12,856 | 15,776 |
Provisions (credit) | 537,507 | 193,538 |
Allowance for loan losses, ending balance | 1,735,304 | 1,388,564 |
Allowance for loan losses evaluated for impairment, individually | 108,474 | 103,836 |
Allowance for loan losses evaluated for impairment, collectively | 1,626,830 | 1,284,728 |
Total ALL evaluted for impairment | 1,735,304 | 1,388,564 |
Total, Loans evaluted for impairment | 170,507,263 | 158,337,296 |
Loans evaluated for impairment, individually | 4,657,050 | 4,471,902 |
Loans evaluated for impairment, collectively | 165,850,213 | 153,865,394 |
Commercial and Industrial [Member] | ||
Allowance for loan losses, beginning balance | 836,766 | 697,469 |
Charge-offs | (39,148) | (175,815) |
Recoveries | 1,087 | 10,768 |
Provisions (credit) | 43,842 | 304,344 |
Allowance for loan losses, ending balance | 842,547 | 836,766 |
Allowance for loan losses evaluated for impairment, individually | 0 | 0 |
Allowance for loan losses evaluated for impairment, collectively | 842,547 | 836,766 |
Total ALL evaluted for impairment | 842,547 | 836,766 |
Total, Loans evaluted for impairment | 161,067,501 | 98,930,831 |
Loans evaluated for impairment, individually | 414,266 | 420,933 |
Loans evaluated for impairment, collectively | 160,653,235 | 98,509,898 |
Commercial Real Estate [Member] | ||
Allowance for loan losses, beginning balance | 3,181,646 | 3,019,868 |
Charge-offs | (34,200) | (116,186) |
Recoveries | 20,000 | 50,388 |
Provisions (credit) | 686,707 | 227,576 |
Allowance for loan losses, ending balance | 3,854,153 | 3,181,646 |
Allowance for loan losses evaluated for impairment, individually | 0 | 0 |
Allowance for loan losses evaluated for impairment, collectively | 3,854,153 | 3,181,646 |
Total ALL evaluted for impairment | 3,854,153 | 3,181,646 |
Total, Loans evaluted for impairment | 280,544,550 | 246,282,726 |
Loans evaluated for impairment, individually | 1,943,723 | 1,699,238 |
Loans evaluated for impairment, collectively | 278,600,827 | 244,583,488 |
Consumer [Member] | ||
Allowance for loan losses, beginning balance | 51,793 | 56,787 |
Charge-offs | (74,327) | (102,815) |
Recoveries | 33,213 | 38,710 |
Provisions (credit) | 49,782 | 59,111 |
Allowance for loan losses, ending balance | 60,461 | 51,793 |
Allowance for loan losses evaluated for impairment, individually | 0 | 0 |
Allowance for loan losses evaluated for impairment, collectively | 60,461 | 51,793 |
Total ALL evaluted for impairment | 60,461 | 51,793 |
Total, Loans evaluted for impairment | 4,280,990 | 4,390,005 |
Loans evaluated for impairment, individually | 0 | 0 |
Loans evaluated for impairment, collectively | 4,280,990 | 4,390,005 |
Unallocated [Member] | ||
Allowance for loan losses, beginning balance | 178,038 | 133,478 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provisions (credit) | 220,875 | 44,560 |
Allowance for loan losses, ending balance | 398,913 | 178,038 |
Allowance for loan losses evaluated for impairment, individually | 0 | 0 |
Allowance for loan losses evaluated for impairment, collectively | 398,913 | 178,038 |
Total ALL evaluted for impairment | $ 398,913 | $ 178,038 |
Loans Allowance for Loan Loss_6
Loans Allowance for Loan Losses and Credit Quality (Details 4) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Recorded investment allowance recorded | $ 7,182,881 | $ 6,770,197 |
Unpaid principal balance allowance recorded | 8,598,095 | 7,817,012 |
Related allowance with an allowance recorded | 108,781 | 104,548 |
Interest income recognized | 329,151 | 332,081 |
Average recorded investment allowance recorded | 7,080,823 | 7,243,017 |
Total Related Allowance | ||
Recorded investment with an allowance recorded | 905,358 | 884,560 |
Unpaid principal balance with an allowance recorded | 954,838 | 908,101 |
Related allowance with an allowance recorded | 108,781 | 104,548 |
Average recorded investment with an allowance recorded | 894,678 | 1,119,213 |
Interest income recognized with an allowance recorded | 73,254 | 86,687 |
Total No Related Allowance | ||
Recorded investment with no related allowance recorded | 6,277,523 | 5,885,637 |
Unpaid principal balance with no related allowance recorded | 7,643,257 | 6,908,911 |
Interest income recognized with no related allowance recorded | 255,897 | 245,394 |
Average recorded investment with no related allowance recorded | 6,186,145 | 6,123,804 |
Commercial and industrial [Member] | ||
Recorded investment with an allowance recorded | 0 | |
Unpaid principal balance with an allowance recorded | 0 | |
Related allowance with an allowance recorded | 0 | |
Recorded investment with no related allowance recorded | 414,266 | 420,933 |
Unpaid principal balance with no related allowance recorded | 471,405 | 445,509 |
Average recorded investment with an allowance recorded | 32,466 | |
Interest income recognized with an allowance recorded | 0 | |
Interest income recognized with no related allowance recorded | 6,396 | 6,396 |
Average recorded investment with no related allowance recorded | 397,136 | 307,208 |
Residential real estate - Jr lien [Member] | ||
Recorded investment with an allowance recorded | 4,777 | 6,121 |
Unpaid principal balance with an allowance recorded | 4,775 | 6,101 |
Related allowance with an allowance recorded | 307 | 712 |
Recorded investment with no related allowance recorded | 130,279 | 149,972 |
Unpaid principal balance with no related allowance recorded | 169,720 | 157,754 |
Average recorded investment with an allowance recorded | 5,416 | 6,869 |
Interest income recognized with an allowance recorded | 541 | 648 |
Interest income recognized with no related allowance recorded | 4,524 | 4,524 |
Average recorded investment with no related allowance recorded | 163,750 | 224,938 |
Commercial Real Estate [Member] | ||
Recorded investment with an allowance recorded | 0 | |
Unpaid principal balance with an allowance recorded | 0 | |
Related allowance with an allowance recorded | 0 | |
Recorded investment with no related allowance recorded | 1,944,013 | 1,699,772 |
Unpaid principal balance with no related allowance recorded | 2,394,284 | 2,031,764 |
Average recorded investment with an allowance recorded | 97,720 | |
Interest income recognized with an allowance recorded | 0 | |
Interest income recognized with no related allowance recorded | 14,139 | 21,591 |
Average recorded investment with no related allowance recorded | 1,746,430 | 1,812,836 |
Residential real estate - 1st lien [Member] | ||
Recorded investment with an allowance recorded | 900,581 | 878,439 |
Unpaid principal balance with an allowance recorded | 950,063 | 902,000 |
Related allowance with an allowance recorded | 108,474 | 103,836 |
Recorded investment with no related allowance recorded | 3,788,965 | 3,614,960 |
Unpaid principal balance with no related allowance recorded | 4,607,848 | 4,273,884 |
Average recorded investment with an allowance recorded | 889,262 | 982,158 |
Interest income recognized with an allowance recorded | 72,713 | 86,039 |
Interest income recognized with no related allowance recorded | 230,838 | 212,883 |
Average recorded investment with no related allowance recorded | $ 3,878,829 | $ 3,778,822 |
Loans Allowance for Loan Loss_7
Loans Allowance for Loan Losses and Credit Quality (Details 5) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Group B | $ 13,782,719 | $ 7,813,034 |
Group A | 683,098,754 | 585,180,366 |
Total loans | 709,355,330 | 606,988,937 |
Group C | 12,473,857 | 13,995,537 |
Commercial Real Estate [Member] | ||
Group B | 12,784,078 | 4,517,811 |
Group A | 261,932,833 | 233,702,063 |
Total loans | 280,544,550 | 246,282,726 |
Group C | 5,827,639 | 8,062,852 |
Residential real estate - 1st lien [Member] | ||
Group B | 0 | 0 |
Group A | 167,478,918 | 154,770,678 |
Total loans | 170,507,263 | 158,337,296 |
Group C | 3,028,345 | 3,566,618 |
Commercial and industrial [Member] | ||
Group B | 998,641 | 3,295,223 |
Group A | 156,748,590 | 93,774,871 |
Total loans | 161,067,501 | 98,930,831 |
Group C | 3,320,270 | 1,860,737 |
Municipal [Member] | ||
Group B | 0 | 0 |
Group A | 54,807,367 | 55,817,206 |
Total loans | 54,807,367 | 55,817,206 |
Group C | 0 | 0 |
Residential real estate - Jr lien [Member] | ||
Group B | 0 | 0 |
Group A | 37,850,056 | 42,725,543 |
Total loans | 38,147,659 | 43,230,873 |
Group C | 297,603 | 505,330 |
Consumer [Member] | ||
Group B | 0 | 0 |
Group A | 4,280,990 | 4,390,005 |
Total loans | 4,280,990 | 4,390,005 |
Group C | $ 0 | $ 0 |
Loans Allowance for Loan Loss_8
Loans Allowance for Loan Losses and Credit Quality (Details 6) | 12 Months Ended | |
Dec. 31, 2020USD ($)integer | Dec. 31, 2019USD ($)integer | |
Number of contracts modified as TDRs | integer | 6 | 14 |
Pre-Modification outstanding recorded investment | $ 591,826 | $ 1,201,657 |
Post-Modification outstanding recorded investment | $ 687,751 | $ 1,250,102 |
Commercial and industrial [Member] | ||
Number of contracts modified as TDRs | integer | 6 | |
Pre-Modification outstanding recorded investment | $ 371,358 | |
Post-Modification outstanding recorded investment | $ 372,259 | |
Residential real estate - Jr lien [Member] | ||
Number of contracts modified as TDRs | integer | 1 | |
Pre-Modification outstanding recorded investment | $ 55,557 | |
Post-Modification outstanding recorded investment | $ 57,415 | |
Commercial Real Estate [Member] | ||
Number of contracts modified as TDRs | integer | 1 | |
Pre-Modification outstanding recorded investment | $ 19,266 | |
Post-Modification outstanding recorded investment | $ 21,628 | |
Residential real estate - 1st lien [Member] | ||
Number of contracts modified as TDRs | integer | 6 | 6 |
Pre-Modification outstanding recorded investment | $ 591,826 | $ 755,476 |
Post-Modification outstanding recorded investment | $ 687,751 | $ 798,800 |
Loans Allowance for Loan Loss_9
Loans Allowance for Loan Losses and Credit Quality (Details 7) | 12 Months Ended | |
Sep. 30, 2020USD ($)integer | Dec. 31, 2019USD ($)integer | |
Number of contracts | integer | 1 | 4 |
Recorded investment | $ | $ 165,168 | $ 310,735 |
Residential Real Estate Jr Lien | ||
Number of contracts | integer | 1 | |
Recorded investment | $ | $ 55,010 | |
Commercial & industrial [Member] | ||
Number of contracts | integer | 2 | |
Recorded investment | $ | $ 27,818 | |
Residential real estate - 1st lien [Member] | ||
Number of contracts | integer | 1 | 1 |
Recorded investment | $ | $ 165,168 | $ 227,907 |
Loans Allowance for Loan Los_10
Loans Allowance for Loan Losses and Credit Quality (Details 8) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Loans, Allowance for Loan Losses and Credit Quality | ||
Specific allocation | $ 108,781 | $ 104,548 |
Loans Allowance for Loan Los_11
Loans Allowance for Loan Losses and Credit Quality (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Loans, Allowance for Loan Losses and Credit Quality | ||
Accrued interest receivable and deferred net loan costs | $ 32,789 | $ 22,051 |
Modified loans related to covid-19 | $ 119,800,000 |
Loan Servicing (Details)
Loan Servicing (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Loan Servicing | ||
Balance at beginning of year | $ 939,577 | $ 1,004,948 |
Mortgage servicing rights capitalized | 292,654 | 114,580 |
Mortgage servicing rights amortized | (256,435) | (179,951) |
Change in valuation allowance | (53,650) | 0 |
Balance at end of period | $ 922,146 | $ 939,577 |
Loan Servicing (Details Narrati
Loan Servicing (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Loan Servicing | ||
Unpaid principal balances of mortgage loans serviced for others | $ 4,610,868 | $ 167,673,467 |
Net gain realized on the sale of loans | $ 1,027,175 | $ 290,116 |
Bank Premises and Equipment (De
Bank Premises and Equipment (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Bank Premises and Equipment | ||
Buildings and improvements | $ 10,421,580 | $ 10,575,514 |
Land and land improvements | 2,663,549 | 2,650,671 |
Furniture and equipment | 5,307,533 | 6,848,263 |
Leasehold improvements | 824,605 | 1,161,073 |
Finance lease | 588,347 | 588,347 |
Operating leases | 1,417,859 | 1,490,779 |
Other prepaid assets | 181,627 | 159,914 |
Bank premises and equipment, gross | 21,405,100 | 23,474,561 |
Less accumulated depreciation and amortization | (11,195,231) | (12,515,158) |
Bank premises and equipment, net | $ 10,209,869 | $ 10,959,403 |
Leases (Details)
Leases (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases | ||
Operating lease cost | $ 259,954 | $ 255,475 |
Amortization of right-of-use assets | 38,667 | 70,667 |
Interest on lease liabilities | 5,396 | 16,705 |
Variable rent expense | 33,940 | 33,940 |
Finance lease cost | $ 78,003 | $ 121,312 |
Leases (Details 1)
Leases (Details 1) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Operating Leases | ||
Operating lease right-of-use assets | $ 1,048,686 | $ 1,254,384 |
Operating lease liabilities | 1,060,391 | 1,263,173 |
Finance Leases | ||
Finance lease right-of-use assets | 85,680 | 124,347 |
Finance lease liabilities | $ 38,159 | $ 99,823 |
Leases (Details 2)
Leases (Details 2) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases | ||
Weighted average remaining lease term - operating leases | 4 years | 4 years 4 months 24 days |
Weighted average remaining lease term - finance leases | 6 months | 1 year 6 months |
Weighted average discount rate - operating leases | 1.28% | 1.28% |
Weighted average discount rate - finance leases | 7.50% | 7.50% |
Leases (Details 3)
Leases (Details 3) | Dec. 31, 2020USD ($) |
Operating Leases | |
2021 | $ 210,350 |
2022 | 216,180 |
2023 | 223,432 |
2024 | 199,648 |
2025 | 154,659 |
Subsequent to 2025 | 99,165 |
Total | $ 1,103,434 |
Leases (Details 4)
Leases (Details 4) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Finance Leases | ||
2020 | $ 39,119 | |
Less amount representing interest | (960) | |
Present value of net minimum lease payments | $ 38,159 | $ 99,823 |
Leases (Details 5)
Leases (Details 5) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases | ||
Operating lease undiscounted cash flows | $ 1,103,434 | |
Operating lease discount effect of cash flows | (43,043) | |
Operating lease liabilities | 1,060,391 | $ 1,263,173 |
Finance lease undiscounted cash flows | 39,119 | |
Finance lease discount effect of cash flows | (960) | |
Finance lease liabilities | $ 38,159 | $ 99,823 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases | ||
Rent expense excluded operating lease cost | $ 15,872 | $ 16,601 |
Goodwill (Details Narrative)
Goodwill (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2017 |
Goodwill | $ 11,574,269 | $ 11,574,269 | |
LyndonBank [Member] | |||
Goodwill | $ 11,574,269 |
Other Investments (Details Narr
Other Investments (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Amortization expense | $ 336,686 | $ 2,106 |
Carrying Value Limited Partnerships Investment | 2,425,721 | 2,762,406 |
LimitedPartnership | ||
Tax Credits | 433,970 | 415,099 |
CFS | ||
Investment in other assets | 4,220,418 | 3,535,527 |
Income | $ 684,891 | $ 588,696 |
Deposits (Details)
Deposits (Details) | Dec. 31, 2020USD ($) |
Deposits (Details) | |
2021 | $ 74,922,873 |
2022 | 16,406,502 |
2023 | 7,116,526 |
2024 | 11,344,797 |
2025 | 3,541,263 |
Total | $ 113,331,961 |
Deposits (Details Narrative)
Deposits (Details Narrative) | Dec. 31, 2020USD ($) |
Deposits (Details) | |
FDIC insurance amount | $ 268,444,165 |
Borrowed Funds (Details)
Borrowed Funds (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Long-term advances | $ 2,800,000 | $ 2,650,000 |
FHLBB term advance One | ||
Long-term advances | 150,000 | 0 |
FHLBB term advance Two | ||
Long-term advances | 350,000 | 350,000 |
FHLBB term advance Three | ||
Long-term advances | 1,000,000 | 1,000,000 |
FHLBB term advance Four | ||
Long-term advances | 200,000 | 200,000 |
FHLBB term advance Five | ||
Long-term advances | 300,000 | 300,000 |
FHLBB term advance Six | ||
Long-term advances | $ 800,000 | $ 800,000 |
Borrowed Funds (Details Narrati
Borrowed Funds (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Line of credit with correspondent bank | $ 25,500,000 | $ 25,500,000 |
FHLBB [Member] | ||
Line of credit with correspondent bank | 500,000 | 500,000 |
Qualified collateral borrowing | 132,667,958 | 135,672,471 |
Potential borrowing capacity | 93,052,713 | 97,358,249 |
Letters of credit collateral deposits | 23,475,000 | 14,425,000 |
Fees paid for issuance of letters of credit | 46,748 | 41,069 |
FRBB [Member] | ||
Potential borrowing capacity | $ 50,378,933 | $ 56,896,877 |
Junior Subordinated Debentures
Junior Subordinated Debentures (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Junior Subordinated Debentures | ||
Junior subordinated debentures | $ 12,887,000 | $ 12,887,000 |
Floating rate | 3.65% | 5.33% |
Debt maturity date | Dec. 15, 2037 | |
Interest paid on the debentures | $ 476,666 | $ 694,573 |
Capital contributions | 387,000 | |
Capital securities, principal amount | $ 12,500,000 |
Repurchase Agreements (Details)
Repurchase Agreements (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Repurchase Agreements (Details) | ||
Period end balance | $ 38,727,312 | $ 33,189,848 |
Average balance | 29,687,950 | 33,545,527 |
Highest month-end balance | $ 38,727,312 | $ 38,868,833 |
Weighted average interest rate | 0.86% | 0.89% |
Amortized cost - Pledged investments | $ 59,546,509 | $ 45,637,025 |
Fair Value - Pledged investments | $ 60,705,178 | $ 45,966,750 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes | ||
Currently paid or payable | $ 2,518,516 | $ 1,693,624 |
Deferred (benefit) expense | (270,427) | 96,236 |
Total income tax expense | $ 2,248,089 | $ 1,789,860 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes | ||
Computed expense at statutory rates | $ 2,731,384 | $ 2,236,904 |
Tax exempt interest and BOLI | (309,102) | (306,073) |
Disallowed interest | 12,917 | 15,798 |
Partnership rehabilitation and tax credits | (433,970) | (415,099) |
Low income housing investment amortization expense | 265,982 | 246,564 |
Other | (19,122) | 11,766 |
Income tax expense | $ 2,248,089 | $ 1,789,860 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred tax (benefit) expense | $ (270,427) | $ 96,236 |
Deferred Income Tax Charges [Member] | ||
Depreciation | 10,368 | 126,734 |
Mortgage servicing rights | (3,661) | (13,728) |
Deferred compensation | 3,722 | 3,701 |
Bad debts | (269,219) | (68,029) |
Limited partnership amortization | (39,430) | 60,588 |
Investment in CFS Partners | 13,408 | (3,323) |
Loan fair value | 0 | (6,171) |
Prepaid expenses | 11,072 | (10,741) |
Other | 3,313 | 7,205 |
Deferred tax (benefit) expense | $ (270,427) | $ 96,236 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Components of the deferred tax asset: | ||
Bad debts | $ 1,513,782 | $ 1,244,563 |
Deferred compensation | 9,176 | 12,898 |
Contingent liability - MPF program | 17,838 | 17,838 |
Finance lease | 7,101 | 11,930 |
Other | 20,814 | 16,346 |
Total deferred tax asset | 1,568,711 | 1,303,575 |
Components of the deferred tax liability: | ||
Depreciation | 394,564 | 384,197 |
Limited partnerships | 37,565 | 76,995 |
Mortgage servicing rights | 193,650 | 197,311 |
Unrealized gain on debt securities AFS | 243,321 | 69,242 |
Investment in CFS Partners | 84,462 | 71,054 |
Operating lease | 3,178 | 226 |
Prepaid expenses | 79,810 | 68,738 |
Total deferred tax liability | 1,036,550 | 867,763 |
Net deferred tax asset | $ 532,161 | $ 435,812 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes | ||
Estimated tax payments | $ 3,000 | $ 10,000 |
401(k) and ProfitSharing Plan (
401(k) and ProfitSharing Plan (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
401(k) and Profit-Sharing Plan | ||
Pension expense | $ 648,405 | $ 624,000 |
Deferred Compensation and Sup_2
Deferred Compensation and Supplemental Employee Retirement Plans (Details Narrative) - Directors Deferred Compensation Plan - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Benefits accrued with the plan | $ 43,694 | $ 61,421 |
Expenses associated with the plan | $ 274 | $ 376 |
Financial Instruments with Of_3
Financial Instruments with Off-Balance-Sheet Risk (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Financial Instruments with Off-Balance-Sheet Risk | ||
Unused portions of home equity lines of credit | $ 35,217,177 | $ 32,784,105 |
Residential and commercial construction lines of credit | 14,843,617 | 12,364,436 |
Commercial real estate commitments | 32,888,666 | 24,377,588 |
Commercial and industrial commitments | 57,848,075 | 47,659,341 |
Other commitments to extend credit | 42,140,295 | 64,469,012 |
Standby letters of credit and commercial letters of credit | 1,585,000 | 1,375,500 |
Recourse on sale of credit card portfolio | 327,855 | 254,430 |
MPF credit enhancement obligation, net (See Note 16) | $ 552,158 | $ 552,158 |
Financial Instruments with Of_4
Financial Instruments with Off-Balance-Sheet Risk (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Financial Instruments with Off-Balance-Sheet Risk | ||
Binding loan commitments total amount | $ 1,280,400 | $ 1,643,200 |
Junior subordinated debentures | 12,887,000 | 12,887,000 |
Payment obligations | 12,500,000 | |
External financing | $ 12,500,000 | $ 12,500,000 |
Contingent Liability (Details N
Contingent Liability (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Contingent Liability | ||
Loans sold through the MPF program | $ 28,137,890 | $ 33,990,463 |
Notional amount of the maximum CEO | 637,102 | 637,102 |
Accrued contingent liability | $ 84,944 | $ 84,944 |
Transactions with Related Par_3
Transactions with Related Parties (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Transactions with Related Parties | ||
Balance, beginning of year | $ 9,127,542 | $ 6,730,842 |
Loans - New Directors | 9,769,951 | 0 |
New loans to existing Principal Officers/Directors | 3,330,226 | 4,491,524 |
Repayment | (5,453,184) | (2,094,824) |
Balance, end of year | $ 16,774,535 | $ 9,127,542 |
Transactions with Related Par_4
Transactions with Related Parties (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Transactions with Related Parties | ||
Total deposits with related parties | $ 14,251,646 | $ 8,942,886 |
Amount paid to CFSG | $ 48,780 | $ 57,209 |
Restrictions on Cash and Due _2
Restrictions on Cash and Due From Banks (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Restrictions on Cash and Due From Banks | ||
Contracted balances with other correspondent banks | $ 30,000 | $ 30,000 |
Regulatory Capital Requiremen_3
Regulatory Capital Requirements (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Company [Member] | ||
Common equity tier 1 capital to risk-weighted assets amount | $ 77,594,000 | $ 69,947,000 |
Common equity tier 1 capital to risk-weighted assets ratio | 14.15% | 13.48% |
Tier I capital to risk-weighted assets amount | $ 77,594,000 | $ 69,947,000 |
Tier I capital to risk-weighted assets ratio | 14.15% | 13.48% |
Total capital to risk-weighted assets amount | $ 84,455,000 | $ 75,943,000 |
Total capital to risk-weighted assets ratio | 15.40% | 14.63% |
Tier I capital to average assets amount | $ 77,594,000 | $ 69,947,000 |
Tier I capital to average assets ratio | 8.80% | 9.57% |
Common equity tier 1 capital to risk-weighted assets Minimum for capital adequacy purposes amount | $ 24,680,000 | $ 23,352,000 |
Common equity tier 1 capital to risk-weighted assets Minimum for capital adequacy purposes ratio | 4.50% | 4.50% |
Tier I capital to risk-weighted assets Minimum for capital adequacy purposes amount | $ 32,907,000 | $ 31,135,000 |
Tier I capital to risk-weighted assets minimum for capital adequacy purposes ratio | 6.00% | 6.00% |
Tier I capital to risk-weighted assets minimum to be well capitalized under prompt corrective action amount | $ 43,876,000 | $ 41,514,000 |
Total capital to risk-weighted assets Minimum for capital adequacy purposes ratio | 8.00% | 8.00% |
Tier I capital to average assets Minimum for capital adequacy purposes amount | $ 35,273,000 | $ 29,223,000 |
Tier I capital to average assets minimum for capital adequacy purposes ratio | 4.00% | 4.00% |
Common equity tier 1 capital to risk-weighted assets minimum to be well capitalized under prompt corrective action provisions ratio | 0.00% | 0.00% |
Tier 1 capital to risk-weighted assets minimum to be well capitalized under prompt corrective action provisions ratio | 0.00% | 0.00% |
Total capital to risk-weighted assets minimum to be well capitalized under prompt corrective action provisions ratio | 0.00% | 0.00% |
Tier I capital to average assets minimum to be well capitalized under prompt corrective action provisions ratio | 0.00% | 0.00% |
Common equity tier 1 capital to risk-weighted assets minimum for capital adequacy purposes with conservation buffer amount | $ 38,391,000 | $ 36,325,000 |
Common equity tier 1 capital to risk-weighted assets minimum for capital adequacy purposes with conservation buffer ratio | 7.00% | 7.00% |
Tier 1 capital to risk-weighted assets minimum for capital adequacy purposes with conservation buffer amount | $ 46,618,000 | $ 44,108,000 |
Tier 1 capital to risk-weighted assets minimum for capital adequacy purposes with conservation buffer ratio | 8.50% | 8.50% |
Total capital to risk-weighted assets minimum for capital adequacy purposes with conservation buffer amount | $ 57,587,000 | $ 54,487,000 |
Total capital to risk-weighted assets minimum for capital adequacy purposes with conservation buffer ratio | 10.50% | 10.50% |
Tier 1 capital to average assets minimum for capital adequacy purposes with conservation buffer ratio | 0.00% | 0.00% |
Bank [Member] | ||
Common equity tier 1 capital to risk-weighted assets amount | $ 77,017,000 | $ 69,330,000 |
Common equity tier 1 capital to risk-weighted assets ratio | 14.06% | 13.38% |
Tier I capital to risk-weighted assets amount | $ 77,017,000 | $ 69,330,000 |
Tier I capital to risk-weighted assets ratio | 14.06% | 13.38% |
Total capital to risk-weighted assets amount | $ 83,871,000 | $ 75,326,000 |
Total capital to risk-weighted assets ratio | 15.31% | 14.53% |
Tier I capital to average assets amount | $ 77,017,000 | $ 69,330,000 |
Tier I capital to average assets ratio | 8.74% | 9.50% |
Common equity tier 1 capital to risk-weighted assets Minimum for capital adequacy purposes amount | $ 24,654,000 | $ 23,325,000 |
Common equity tier 1 capital to risk-weighted assets Minimum for capital adequacy purposes ratio | 4.50% | 4.50% |
Tier I capital to risk-weighted assets Minimum for capital adequacy purposes amount | $ 32,872,000 | $ 31,099,000 |
Tier I capital to risk-weighted assets minimum for capital adequacy purposes ratio | 6.00% | 6.00% |
Tier I capital to risk-weighted assets minimum to be well capitalized under prompt corrective action amount | $ 43,829,000 | $ 41,466,000 |
Total capital to risk-weighted assets Minimum for capital adequacy purposes ratio | 8.00% | 8.00% |
Tier I capital to average assets Minimum for capital adequacy purposes amount | $ 35,252,000 | $ 29,201,000 |
Tier I capital to average assets minimum for capital adequacy purposes ratio | 4.00% | 4.00% |
Common equity tier 1 capital to risk-weighted assets minimum to be well capitalized under prompt corrective action provisions amount | $ 35,611,000 | $ 33,691,000 |
Common equity tier 1 capital to risk-weighted assets minimum to be well capitalized under prompt corrective action provisions ratio | 6.50% | 6.50% |
Tier 1 capital to risk-weighted assets minimum to be well capitalized under prompt corrective action provisions amount | $ 43,829,000 | $ 41,466,000 |
Tier 1 capital to risk-weighted assets minimum to be well capitalized under prompt corrective action provisions ratio | 8.00% | 8.00% |
Total capital to risk-weighted assets minimum to be well capitalized under prompt corrective action provisions ratio | 10.00% | 10.00% |
Total capital to risk-weighted assets minimum to be well capitalized under prompt corrective action provisions amount | $ 54,787,000 | $ 51,832,000 |
Tier I capital to average assets minimum to be well capitalized under prompt corrective action provisions amount | $ 44,065,000 | $ 36,501,000 |
Tier I capital to average assets minimum to be well capitalized under prompt corrective action provisions ratio | 5.00% | 5.00% |
Common equity tier 1 capital to risk-weighted assets minimum for capital adequacy purposes with conservation buffer amount | $ 38,351,000 | $ 36,283,000 |
Common equity tier 1 capital to risk-weighted assets minimum for capital adequacy purposes with conservation buffer ratio | 7.00% | 7.00% |
Tier 1 capital to risk-weighted assets minimum for capital adequacy purposes with conservation buffer amount | $ 46,569,000 | $ 44,057,000 |
Tier 1 capital to risk-weighted assets minimum for capital adequacy purposes with conservation buffer ratio | 8.50% | 8.50% |
Total capital to risk-weighted assets minimum for capital adequacy purposes with conservation buffer amount | $ 57,526,000 | $ 54,424,000 |
Total capital to risk-weighted assets minimum for capital adequacy purposes with conservation buffer ratio | 10.50% | 10.50% |
Tier 1 capital to average assets minimum for capital adequacy purposes with conservation buffer amount | $ 0 | $ 0 |
Tier 1 capital to average assets minimum for capital adequacy purposes with conservation buffer ratio | 0.00% | 0.00% |
Regulatory Capital Requiremen_4
Regulatory Capital Requirements (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Consolidated assets, total | $ 10,000,000,000 | |
Preferred securities ratio | 25.00% | |
Conservation buffer | 2.50% | |
Preferred stock, liquidation value | $ 100,000 | $ 100,000 |
Bank [Member] | ||
Conservation buffer | 2.50% | |
Non-Cumulative Series A Preferred Stock [Member] | ||
Preferred stock, liquidation value | $ 1,500,000 | $ 1,500,000 |
Fair Value (Details)
Fair Value (Details) - Fair Value Level 2 - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Assets: (market approach) | ||
Assets recorded at fair value on a recurring basis | $ 60,705,178 | $ 45,966,750 |
Other investments [Member] | ||
Assets: (market approach) | ||
Assets recorded at fair value on a recurring basis | 8,487,002 | 8,846,846 |
U.S. GSE debt securities | ||
Assets: (market approach) | ||
Assets recorded at fair value on a recurring basis | 8,169,831 | 18,061,620 |
Agency MBS | ||
Assets: (market approach) | ||
Assets recorded at fair value on a recurring basis | 41,378,349 | 16,205,375 |
ABS and OAS | ||
Assets: (market approach) | ||
Assets recorded at fair value on a recurring basis | $ 2,669,996 | $ 2,852,909 |
Fair Value (Details 1)
Fair Value (Details 1) - Fair Value Level 2 - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Assets: (market approach) | ||
Impaired loans, net of related allowance | $ 323,645 | $ 0 |
Loans held-for-sale | 130,400 | 0 |
MSRs | 922,146 | 939,577 |
OREO | $ 0 | $ 966,738 |
Fair Value (Details 2)
Fair Value (Details 2) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Carrying Amount | ||
Financial assets: (in thousands) | ||
Cash and cash equivalents | $ 115,050 | $ 48,562 |
Debt securities AFS | 60,705 | 45,967 |
Restricted equity securities | 1,447 | 1,432 |
Commercial & industrial | 158,601 | 98,062 |
Commercial real estate | 276,476 | 243,022 |
Municipal | 54,694 | 55,817 |
Residential real estate - 1st lien | 169,201 | 156,897 |
Residential real estate - Jr lien | 37,892 | 42,927 |
Consumer | 4,218 | 4,337 |
MSRs (1) | 922 | 940 |
Accrued interest receivable | 2,988 | 2,337 |
Other deposits | 778,085 | 603,872 |
Brokered deposits | 4,206 | 11,149 |
Long-term borrowings | 2,800 | 2,650 |
Repurchase agreements | 38,727 | 33,190 |
Operating lease obligations | 1,060 | 1,263 |
Finance lease obligations | 38 | 100 |
Subordinated debentures | 12,887 | 12,887 |
Accrued interest payable | 86 | 139 |
Fair Value | ||
Financial assets: (in thousands) | ||
Cash and cash equivalents | 115,050 | 48,562 |
Debt securities AFS | 60,705 | 45,967 |
Restricted equity securities | 1,447 | 1,432 |
Commercial & industrial | 160,371 | 97,356 |
Commercial real estate | 279,489 | 242,735 |
Municipal | 55,601 | 55,867 |
Residential real estate - 1st lien | 170,501 | 156,520 |
Residential real estate - Jr lien | 37,991 | 42,950 |
Consumer | 4,238 | 4,306 |
MSRs (1) | 922 | 1,250 |
Accrued interest receivable | 2,988 | 2,337 |
Other deposits | 779,824 | 604,267 |
Brokered deposits | 4,208 | 11,153 |
Long-term borrowings | 2,724 | 2,427 |
Repurchase agreements | 38,727 | 33,190 |
Operating lease obligations | 1,060 | 1,263 |
Finance lease obligations | 38 | 100 |
Subordinated debentures | 12,876 | 12,831 |
Accrued interest payable | 86 | 139 |
Fair Value Level 2 | ||
Financial assets: (in thousands) | ||
Cash and cash equivalents | 0 | 0 |
Debt securities AFS | 60,705 | 45,967 |
Restricted equity securities | 1,447 | 1,432 |
Commercial & industrial | 0 | 0 |
Commercial real estate | 208 | 0 |
Municipal | 0 | 0 |
Residential real estate - 1st lien | 116 | 0 |
Residential real estate - Jr lien | 0 | 0 |
Consumer | 0 | 0 |
MSRs (1) | 922 | 1,250 |
Accrued interest receivable | 2,988 | 2,337 |
Other deposits | 779,824 | 604,267 |
Brokered deposits | 4,208 | 11,153 |
Long-term borrowings | 2,724 | 2,427 |
Repurchase agreements | 38,727 | 33,190 |
Operating lease obligations | 1,060 | 1,263 |
Finance lease obligations | 38 | 100 |
Subordinated debentures | 12,876 | 12,831 |
Accrued interest payable | 86 | 139 |
Fair Value Level 1 | ||
Financial assets: (in thousands) | ||
Cash and cash equivalents | 115,050 | 48,562 |
Debt securities AFS | 0 | 0 |
Restricted equity securities | 0 | 0 |
Commercial & industrial | 0 | 0 |
Commercial real estate | 0 | 0 |
Municipal | 0 | 0 |
Residential real estate - 1st lien | 0 | 0 |
Residential real estate - Jr lien | 0 | 0 |
Consumer | 0 | 0 |
MSRs (1) | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Other deposits | 0 | 0 |
Brokered deposits | 0 | 0 |
Long-term borrowings | 0 | 0 |
Repurchase agreements | 0 | 0 |
Operating lease obligations | 0 | 0 |
Finance lease obligations | 0 | 0 |
Subordinated debentures | 0 | 0 |
Accrued interest payable | 0 | 0 |
Fair Value Level 3 | ||
Financial assets: (in thousands) | ||
Cash and cash equivalents | 0 | 0 |
Debt securities AFS | 0 | 0 |
Restricted equity securities | 0 | 0 |
Commercial & industrial | 160,371 | 97,356 |
Commercial real estate | 279,281 | 242,735 |
Municipal | 55,601 | 55,867 |
Residential real estate - 1st lien | 170,385 | 156,520 |
Residential real estate - Jr lien | 37,991 | 42,950 |
Consumer | 4,238 | 4,306 |
MSRs (1) | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Other deposits | 0 | 0 |
Brokered deposits | 0 | 0 |
Long-term borrowings | 0 | 0 |
Repurchase agreements | 0 | 0 |
Operating lease obligations | 0 | 0 |
Finance lease obligations | 0 | 0 |
Subordinated debentures | 0 | 0 |
Accrued interest payable | $ 0 | $ 0 |
Condensed Financial Informati_3
Condensed Financial Information Parent Company Only (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | |||
Total assets | $ 918,233,284 | $ 737,955,319 | |
Liabilities | |||
Junior subordinated debentures | 12,887,000 | 12,887,000 | |
Total liabilities | 840,944,571 | 669,060,640 | |
Shareholders' Equity | |||
Preferred stock, 1,000,000 shares authorized, 15 shares issued and outstanding at December 31, 2020 and 2019 ($100,000 liquidation value, per share) | 1,500,000 | 1,500,000 | |
Common stock - $2.50 par value; 15,000,000 shares authorized, 5,527,380 and 5,449,857 shares issued at December 31, 2020 and 2019, respectively (including 18,128 and 16,267 shares issued February 1, 2021 and 2020, respectively) | 13,818,450 | 13,624,643 | |
Additional paid-in capital | 34,309,646 | 33,464,381 | |
Retained earnings | 29,368,046 | 22,667,949 | |
Accumulated other comprehensive loss | 915,348 | 260,483 | |
Less: treasury stock, at cost; 210,101 shares at December 31, 2020 and 2019 | 2,622,777 | 2,622,777 | |
Total shareholders' equity | 77,288,713 | 68,894,679 | $ 62,603,711 |
Total liabilities and shareholders' equity | 918,233,284 | 737,955,319 | |
Parent Company [Member] | |||
Assets | |||
Cash | 750,371 | 744,687 | $ 720,620 |
Investment in subsidiary - Community National Bank | 89,598,666 | 81,164,447 | |
Investment in Capital Trust | 387,000 | 387,000 | |
Income taxes receivable | 184,973 | 213,071 | |
Total assets | 90,921,010 | 82,509,205 | |
Liabilities | |||
Junior subordinated debentures | 12,887,000 | 12,887,000 | |
Dividends payable | 745,297 | 727,526 | |
Total liabilities | 13,632,297 | 13,614,526 | |
Shareholders' Equity | |||
Preferred stock, 1,000,000 shares authorized, 15 shares issued and outstanding at December 31, 2020 and 2019 ($100,000 liquidation value, per share) | 1,500,000 | 1,500,000 | |
Common stock - $2.50 par value; 15,000,000 shares authorized, 5,527,380 and 5,449,857 shares issued at December 31, 2020 and 2019, respectively (including 18,128 and 16,267 shares issued February 1, 2021 and 2020, respectively) | 13,818,450 | 13,624,643 | |
Additional paid-in capital | 34,309,646 | 33,464,381 | |
Retained earnings | 29,368,046 | 22,667,949 | |
Accumulated other comprehensive loss | 915,348 | 260,483 | |
Less: treasury stock, at cost; 210,101 shares at December 31, 2020 and 2019 | (2,622,777) | (2,622,777) | |
Total shareholders' equity | 77,288,713 | 68,894,679 | |
Total liabilities and shareholders' equity | $ 90,921,010 | $ 82,509,205 |
Condensed Financial Informati_4
Condensed Financial Information Parent Company Only (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Expense | ||||||||||
Interest on junior subordinated debentures | $ 476,666 | $ 694,573 | ||||||||
Income tax expense | 2,248,089 | 1,789,860 | ||||||||
Net income | $ 3,174,509 | $ 2,880,443 | $ 2,842,311 | $ 1,861,239 | $ 2,371,300 | $ 2,261,943 | $ 2,419,298 | $ 1,771,905 | 10,758,502 | 8,824,446 |
Parent Company [Member] | ||||||||||
Income | ||||||||||
Bank subsidiary distributions | 3,675,000 | 4,256,000 | ||||||||
Dividends on Capital Trust | 14,314 | 20,858 | ||||||||
Total income | 3,689,314 | 4,276,858 | ||||||||
Expense | ||||||||||
Interest on junior subordinated debentures | 476,666 | 694,573 | ||||||||
Administrative and other | 418,474 | 340,904 | ||||||||
Total expense | 895,140 | 1,035,477 | ||||||||
Income before applicable income tax benefit and equity in undistributed net income of subsidiary | 2,794,174 | 3,241,381 | ||||||||
Income tax expense | 184,973 | 213,071 | ||||||||
Income before equity in undistributed net income of subsidiary | 2,979,147 | 3,454,452 | ||||||||
Equity in undistributed net income of subsidiary | 7,779,355 | 5,369,994 | ||||||||
Net income | $ 10,758,502 | $ 8,824,446 |
Condensed Financial Informati_5
Condensed Financial Information Parent Company Only (Details 2) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash Flows from Operating Activities | ||||||||||
Net income | $ 3,174,509 | $ 2,880,443 | $ 2,842,311 | $ 1,861,239 | $ 2,371,300 | $ 2,261,943 | $ 2,419,298 | $ 1,771,905 | $ 10,758,502 | $ 8,824,446 |
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||
Net cash provided by operating activities | 13,584,217 | 11,246,656 | ||||||||
Cash Flows from Financing Activities | ||||||||||
Redemption of preferred stock | 0 | (500,000) | ||||||||
Dividends paid on preferred stock | 54,375 | 87,500 | ||||||||
Dividends paid on common stock | 2,947,185 | 2,837,058 | ||||||||
Net cash provided by financing activities | 169,893,711 | 6,381,604 | ||||||||
Net (decrease) increase in cash and cash equivalents | 66,487,708 | (19,372,603) | ||||||||
Cash Paid for Interest | 4,899,795 | 6,116,917 | ||||||||
Dividends paid: | ||||||||||
Dividends declared | 4,004,030 | 3,951,279 | ||||||||
Dividends reinvested | (1,039,072) | (1,097,234) | ||||||||
Parent Company [Member] | ||||||||||
Cash Flows from Operating Activities | ||||||||||
Net income | 10,758,502 | 8,824,446 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||
Equity in undistributed net income of subsidiary | (7,779,355) | (5,369,994) | ||||||||
(Increase) decrease in income taxes receivable | 28,097 | (5,827) | ||||||||
Net cash provided by operating activities | 3,007,244 | 3,448,625 | ||||||||
Cash Flows from Financing Activities | ||||||||||
Redemption of preferred stock | 0 | (500,000) | ||||||||
Dividends paid on preferred stock | (54,375) | (87,500) | ||||||||
Dividends paid on common stock | (2,947,185) | (2,837,058) | ||||||||
Net cash provided by financing activities | (3,001,560) | (3,424,558) | ||||||||
Net (decrease) increase in cash and cash equivalents | 5,684 | 24,067 | ||||||||
Cash Beginning | $ 744,687 | $ 720,620 | 744,687 | 720,620 | ||||||
Cash Ending | $ 750,371 | $ 744,687 | 750,371 | 744,687 | ||||||
Cash Received for Income Taxes | 213,071 | 207,244 | ||||||||
Cash Paid for Interest | 476,666 | 694,573 | ||||||||
Dividends paid: | ||||||||||
Dividends declared | 4,004,030 | 3,951,279 | ||||||||
Increase in dividends payable attributable to dividends declared | (17,773) | (16,987) | ||||||||
Dividends reinvested | (1,039,072) | (1,097,234) | ||||||||
Total common shares dividends paid | $ 2,947,185 | $ 2,837,058 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Quarterly Financial Data (Unaudited) | ||||||||||
Interest income | $ 9,011,834 | $ 8,086,866 | $ 8,191,442 | $ 7,772,152 | $ 7,891,564 | $ 7,906,454 | $ 8,262,422 | $ 7,698,368 | $ 33,062,294 | $ 31,758,808 |
Interest expense | 1,112,604 | 1,050,780 | 1,206,909 | 1,476,393 | 1,548,595 | 1,509,033 | 1,546,953 | 1,538,540 | 4,846,686 | 6,143,121 |
Provision for loan losses | 542,499 | 362,499 | 307,499 | 376,503 | 299,499 | 412,499 | 141,666 | 212,503 | 1,589,000 | 1,066,167 |
Non-interest income | 1,714,620 | 1,941,295 | 1,762,102 | 1,353,707 | 1,595,896 | 1,597,332 | 1,434,138 | 1,318,700 | 6,771,724 | 5,946,066 |
Non-interest expense | 5,206,352 | 5,104,717 | 4,987,453 | 5,093,219 | 4,782,580 | 4,863,716 | 5,079,060 | 5,155,924 | 20,391,741 | 19,881,280 |
Net income | $ 3,174,509 | $ 2,880,443 | $ 2,842,311 | $ 1,861,239 | $ 2,371,300 | $ 2,261,943 | $ 2,419,298 | $ 1,771,905 | $ 10,758,502 | $ 8,824,446 |
Earnings per common share | $ 0.60 | $ 0.54 | $ 0.54 | $ 0.35 | $ 0.45 | $ 0.43 | $ 0.46 | $ 0.34 | $ 2.03 | $ 1.68 |
Other Income and Other Expens_3
Other Income and Other Expenses (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income | ||
Income from investment in CFS Partners | $ 684,891 | $ 588,696 |
Expenses | ||
Outsourcing expense | 473,426 | 428,668 |
Service contracts - administration | 506,144 | 539,510 |
Marketing | 425,000 | 450,533 |
State deposit tax | 704,047 | 669,502 |
ATM fees | $ 486,590 | $ 434,270 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - $ / shares | 1 Months Ended | 12 Months Ended | ||
Mar. 17, 2021 | Dec. 09, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Dividends declared per common share | $ 0.19 | $ 0.76 | $ 0.76 | |
Subsequent Event [Member] | ||||
Dividends declared per common share | $ 0.22 |