Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 02, 2020 | Jun. 30, 2019 | |
Document And Entity Information | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | FIRST KEYSTONE CORP | ||
Entity Central Index Key | 0000737875 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 122,197,930 | ||
Trading Symbol | FKYS | ||
Entity Common Stock, Shares Outstanding | 5,816,894 | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and due from banks | $ 10,251 | $ 9,822 |
Interest-bearing deposits in other banks | 473 | 1,128 |
Total cash and cash equivalents | 10,724 | 10,950 |
Time deposits with other banks | 247 | 1,482 |
Debt securities available-for-sale, at fair value | 277,928 | 316,054 |
Marketable equity securities, at fair value | 1,933 | 1,560 |
Restricted investment in bank stocks, at cost | 4,224 | 8,681 |
Loans | 645,440 | 606,027 |
Loans held for sale | 2,292 | 365 |
Allowance for loan losses | (7,005) | (6,745) |
Net loans | 640,727 | 599,647 |
Premises and equipment, net | 19,387 | 19,946 |
Operating lease right-of-use assets | 1,470 | 0 |
Accrued interest receivable | 3,405 | 4,041 |
Cash surrender value of bank owned life insurance | 23,583 | 22,963 |
Investments in low-income housing partnerships | 1,828 | 2,096 |
Goodwill | 19,133 | 19,133 |
Foreclosed assets held for resale | 119 | 1,163 |
Deferred income taxes | 0 | 1,469 |
Other assets | 2,518 | 2,815 |
TOTAL ASSETS | 1,007,226 | 1,012,000 |
LIABILITIES | ||
Non-interest bearing | 134,648 | 126,361 |
Interest bearing | 626,980 | 545,192 |
Total deposits | 761,628 | 671,553 |
Short-term borrowings | 54,663 | 174,445 |
Long-term borrowings | 55,000 | 45,000 |
Operating lease liabilities | 1,663 | 0 |
Accrued interest payable | 606 | 785 |
Deferred income taxes | 438 | 0 |
Other liabilities | 4,476 | 3,461 |
TOTAL LIABILITIES | 878,474 | 895,244 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value $2.00 per share; authorized 1,000,000 shares as of December 31, 2019 and 2018; issued 0 in 2019 and 2018 | ||
Common stock, par value $2.00 per share; authorized 20,000,000 shares as of December 31, 2019 and 2018; issued 6,048,506 as of December 31, 2019 and 5,996,322 as of December 31, 2018; outstanding 5,816,894 as of December 31, 2019 and 5,764,710 as of December 31, 2018 | 12,097 | 11,993 |
Surplus | 38,365 | 37,255 |
Retained earnings | 79,778 | 75,798 |
Accumulated other comprehensive income (loss) | 4,221 | (2,581) |
Treasury stock, at cost, 231,612 shares at December 31, 2019 and 2018 | (5,709) | (5,709) |
TOTAL STOCKHOLDERS' EQUITY | 128,752 | 116,756 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,007,226 | $ 1,012,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 2 | $ 2 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 2 | $ 2 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 6,048,506 | 5,996,322 |
Common stock, shares outstanding | 5,816,894 | 5,764,710 |
Treasury stock, shares | 231,612 | 231,612 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
INTEREST INCOME | ||
Interest and fees on loans | $ 29,445 | $ 25,886 |
Interest and dividend income on securities: | ||
Taxable | 5,288 | 4,585 |
Tax-exempt | 3,211 | 4,576 |
Dividends | 49 | 47 |
Dividend income on restricted investment in bank stocks | 496 | 443 |
Interest on interest-bearing deposits in other banks | 38 | 36 |
Total interest income | 38,527 | 35,573 |
INTEREST EXPENSE | ||
Interest on deposits | 6,650 | 5,193 |
Interest on short-term borrowings | 2,655 | 2,277 |
Interest on long-term borrowings | 938 | 1,150 |
Total interest expense | 10,243 | 8,620 |
Net interest income | 28,284 | 26,953 |
Provision for loan losses | 450 | 200 |
Net interest income after provision for loan losses | 27,834 | 26,753 |
NON-INTEREST INCOME | ||
Trust department | 971 | 943 |
Service charges and fees | 2,224 | 2,059 |
Bank owned life insurance income | 620 | 609 |
ATM fees and debit card income | 1,650 | 1,567 |
Gains on sales of mortgage loans | 277 | 188 |
Net securities gains (losses) | 911 | (65) |
Other | 276 | 261 |
Total non-interest income | 6,929 | 5,562 |
NON-INTEREST EXPENSE | ||
Salaries and employee benefits | 12,457 | 11,770 |
Occupancy, net | 1,819 | 1,741 |
Furniture and equipment | 574 | 598 |
Computer expense | 1,115 | 1,017 |
Professional services | 932 | 1,051 |
Pennsylvania shares tax | 766 | 780 |
FDIC insurance | 137 | 311 |
ATM and debit card fees | 892 | 806 |
Data processing fees | 1,111 | 1,032 |
Foreclosed assets held for resale | 295 | 148 |
Advertising | 613 | 507 |
Other | 2,711 | 2,884 |
Total non-interest expense | 23,422 | 22,645 |
Income before income tax expense | 11,341 | 9,670 |
Income tax expense | 1,114 | 459 |
NET INCOME | $ 10,227 | $ 9,211 |
Net income per share: | ||
Basic | $ 1.77 | $ 1.60 |
Diluted | 1.77 | 1.60 |
Dividends per share | $ 1.08 | $ 1.08 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net Income | $ 10,227 | $ 9,211 | |
Other comprehensive income (loss): | |||
Unrealized net holding gains (losses) on debt securities available-for-sale arising during the period, net of income taxes | 7,228 | (4,127) | |
Less reclassification adjustment for net gains included in net income, net of income taxes | [1],[2] | (426) | (6) |
Total other comprehensive income (loss) | 6,802 | (4,133) | |
Total Comprehensive Income | $ 17,029 | $ 5,078 | |
[1] | Gross amounts are included in net securities gains (losses) on the consolidated statements of income in non-interest income. | ||
[2] | Income tax amounts are included in income tax expense on the consolidated statements of income. |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax | $ 1,921 | $ (1,097) |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax | $ (112) | $ (1) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Surplus [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Treasury Stock [Member] | Total | |
Balance at Dec. 31, 2017 | $ 11,902 | $ 36,193 | $ 72,507 | $ 1,826 | $ (5,709) | $ 116,719 | |
Balance (in shares) at Dec. 31, 2017 | 5,950,951 | ||||||
Net Income | $ 0 | 0 | 9,211 | 0 | 0 | 9,211 | |
Other comprehensive income (loss), net of taxes | 0 | 0 | 0 | (4,133) | 0 | (4,133) | |
Issuance of common stock under dividend reinvestment plan | $ 91 | 1,062 | 0 | 0 | 0 | 1,153 | |
Issuance of common stock under dividend reinvestment plan (in shares) | 45,371 | ||||||
Impact of adoption of accounting standards | [1] | $ 0 | 0 | 274 | (274) | 0 | 0 |
Dividends - $1.08 per share | 0 | 0 | (6,194) | 0 | 0 | (6,194) | |
Balance at Dec. 31, 2018 | $ 11,993 | 37,255 | 75,798 | (2,581) | (5,709) | 116,756 | |
Balance (in shares) at Dec. 31, 2018 | 5,996,322 | ||||||
Net Income | $ 0 | 0 | 10,227 | 0 | 0 | 10,227 | |
Other comprehensive income (loss), net of taxes | 0 | 0 | 0 | 6,802 | 0 | 6,802 | |
Issuance of common stock under dividend reinvestment plan | $ 104 | 1,110 | 0 | 0 | 0 | 1,214 | |
Issuance of common stock under dividend reinvestment plan (in shares) | 52,184 | ||||||
Dividends - $1.08 per share | $ 0 | 0 | (6,247) | 0 | 0 | (6,247) | |
Balance at Dec. 31, 2019 | $ 12,097 | $ 38,365 | $ 79,778 | $ 4,221 | $ (5,709) | $ 128,752 | |
Balance (in shares) at Dec. 31, 2019 | 6,048,506 | ||||||
[1] | Represents the impact of adopting Accounting Standard Updates (“ASU”) 2018-02 and ASU 2016-01 effective January 1, 2018. |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY | ||
Cash dividends, per share | $ 1.08 | $ 1.08 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 10,227 | $ 9,211 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for loan losses | 450 | 200 |
Depreciation and amortization | 781 | 1,056 |
Net premium amortization on securities | 2,624 | 3,343 |
Deferred income tax expense | 100 | 566 |
Gains on sales of mortgage loans | (277) | (188) |
Proceeds from sales of mortgage loans originated for resale | 10,783 | 8,948 |
Originations of mortgage loans originated for resale | (12,447) | (8,926) |
Net securities (gains) losses | (911) | 65 |
Net losses on sales of foreclosed real estate held for resale, including write-downs | 264 | 162 |
Decrease in accrued interest receivable | 636 | 196 |
Earnings on investment in bank owned life insurance | (620) | (609) |
Net losses (gains) on disposals of premises and equipment | 4 | (10) |
Increase in other assets | (916) | (81) |
Amortization of investment in low-income housing partnerships | 353 | 530 |
(Decrease) increase in accrued interest payable | (179) | 295 |
Increase (decrease) in other liabilities | 1,667 | (17) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 12,539 | 14,741 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from sales of debt securities available-for-sale | 106,623 | 44,122 |
Proceeds from maturities and redemptions of debt securities available-for-sale | 26,772 | 22,058 |
Purchases of debt securities available-for-sale | (87,735) | (42,216) |
Net decrease in time deposits with other banks | 1,235 | 0 |
Net change in restricted investment in bank stocks | 4,457 | (4,623) |
Net increase in loans | (39,504) | (48,203) |
Purchases of premises and equipment | (557) | (446) |
Purchase of investment in low-income housing partnerships | (85) | 0 |
Proceeds from sales of foreclosed assets held for resale | 780 | 263 |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 11,986 | (29,045) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net increase (decrease) in deposits | 90,075 | (106,593) |
Net (decrease) increase in short-term borrowings | (119,782) | 148,149 |
Proceeds from long-term borrowings | 30,000 | 3,000 |
Repayment of long-term borrowings | (20,000) | (23,000) |
Common stock issued | 1,203 | 1,153 |
Dividends paid | (6,247) | (6,194) |
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (24,751) | 16,515 |
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (226) | 2,211 |
CASH AND CASH EQUIVALENTS, BEGINNING | 10,950 | 8,739 |
CASH AND CASH EQUIVALENTS, ENDING | 10,724 | 10,950 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Interest paid | 10,422 | 8,325 |
Income taxes paid | 1,149 | 672 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES | ||
Purchased securities settling after year end | 1,011 | 0 |
Loans transferred to foreclosed assets held for resale | 0 | 517 |
Loans transferred from held for sale portfolio | 0 | (611) |
Common stock subscription receivable | 11 | 0 |
Right-of-use assets obtained in exchange for lease liabilities | $ 1,586 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of First Keystone Corporation and Subsidiary (the “Corporation”) are in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and conform to common practices within the banking industry. The more significant accounting policies follow: Principles of Consolidation The consolidated financial statements include the accounts of First Keystone Corporation and its wholly-owned subsidiary, First Keystone Community Bank (the “Bank”). All significant inter-company balances and transactions have been eliminated in consolidation. Nature of Operations The Corporation, headquartered in Berwick, Pennsylvania, provides a full range of banking, trust and related services through its wholly-owned Bank subsidiary and is subject to competition from other financial institutions in connection with these services. The Bank serves a customer base which includes individuals, businesses, governments, and public and institutional customers primarily located in the Northeast Region of Pennsylvania. The Bank has 18 full service offices, one loan production office, and 20 Automated Teller Machines (“ATM”) located in Columbia, Luzerne, Montour, Monroe, and Northampton counties. The Corporation and its subsidiary must also adhere to certain federal and state banking laws and regulations and are subject to periodic examinations made by various state and federal agencies. Segment Reporting The Corporation’s subsidiary acts as an independent community financial services provider, and offers traditional banking and related financial services to individual, business, government, and public and institutional customers. Through its branch and ATM network, the Bank offers a full array of commercial and retail financial services, including the taking of time, savings and demand deposits; the making of commercial, consumer and mortgage loans; and the providing of other financial services. The Bank also performs personal, corporate, pension and fiduciary services through its Trust Department. Management does not separately allocate expenses, including the cost of funding loan demand, between the commercial, retail, trust and mortgage banking operations of the Corporation. As such, discrete financial information is not available and segment reporting would not be meaningful. Significant Concentrations of Credit Risk The majority of the Corporation’s activities involve customers located primarily in Columbia, Luzerne, Montour, Monroe, Northampton, and Lehigh counties in Pennsylvania. The types of securities in which the Corporation invests are presented in Note 3 – Securities. Credit risk as it relates to investment activities is moderated through the monitoring of ratings and geographic concentrations residing in the portfolio and the observance of minimum rating levels in the investment policy. Note 4 – Loans and Allowance for Loan Losses summarizes the types of lending in which the Corporation engages. The inherent risks associated with lending activities are mitigated by adhering to conservative underwriting practices and policies, as well as portfolio diversification and thorough monitoring of the loan portfolio. It is management’s opinion that the investment and loan portfolios were well balanced at December 31, 2019, to the extent necessary to avoid any significant concentrations of credit risk. Use of Estimates The preparation of these consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America, 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 these consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant changes include the determination of other-than-temporary impairment on securities and the determination of the allowance for loan losses. Subsequent Events The Corporation has evaluated events and transactions occurring subsequent to the consolidated balance sheet date of December 31, 2019, for items that should potentially be recognized or disclosed in the consolidated financial statements. The evaluation was conducted through the date these consolidated financial statements were issued. On February 25, 2020, the Board of Directors declared a dividend of $0.27 per share for the first quarter of 2020. The dividend is payable on March 31, 2020 to shareholders of record as of March 12, 2020. Cash and Cash Equivalents For purposes of reporting consolidated cash flows, cash and cash equivalents include cash on hand and due from banks, interest-bearing deposits in other banks, and federal funds sold. The Corporation considers cash classified as interest-bearing deposits with other banks as a cash equivalent since they are represented by cash accounts essentially on a demand basis and mature within one year. Federal funds are also included as a cash equivalent because they are generally purchased and sold for one-day periods. Time Deposits with Other Banks Time deposits with other banks consist of fully insured certificates of deposit in other banks with maturity dates between one and five years. Securities The Corporation classifies its securities as either “Held-to-Maturity” or “Available-for-Sale” at the time of purchase. Securities are accounted for on a trade date basis. Debt securities are classified as Held-to-Maturity when the Corporation has the ability and positive intent to hold the securities to maturity. Securities classified as Held-to-Maturity are carried at cost adjusted for amortization of premium and accretion of discount to maturity. Debt securities not classified as Held-to-Maturity are included in the Available-for-Sale category and are carried at fair value. The amount of any unrealized gain or loss, net of the effect of deferred income taxes, is reported as accumulated other comprehensive income (AOCI) in the consolidated balance sheets and consolidated statements of changes in stockholders’ equity. Management’s decision to sell Available-for-Sale securities is based on changes in economic conditions controlling the sources and applications of funds, terms, availability of and yield of alternative investments, interest rate risk and the need for liquidity. The cost of debt securities classified as Held-to-Maturity or Available-for-Sale is adjusted for amortization of premiums to the earliest call date and accretion of discounts to expected maturity. Such amortization and accretion, as well as interest and dividends, are included in interest and dividend income on investment securities. Realized gains and losses are included in net investment securities gains and losses. The cost of investment securities sold, redeemed or matured is based on the specific identification method. Beginning January 1, 2018, upon adoption of ASU 2016‑01, equity securities with readily determinable fair values are stated at fair value with realized and unrealized gains and losses reported in income. For periods prior to January 1, 2018, equity securities were classified as Available-for-Sale and stated at fair value with unrealized gains and losses reported as a separate component of AOCI, net of tax. Equity securities without readily determinable fair values are recorded at cost less impairment, if any. Management evaluates securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. Securities classified as Available-for-Sale or Held-to-Maturity are generally evaluated for OTTI under FASB ASC 320, Investments - Debt and Equity Securities . In determining OTTI under the FASB ASC 320 model, management considers many factors, including (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, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the entity has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time. When other-than-temporary impairment occurs on debt securities, the amount of the other-than-temporary impairment recognized in earnings depends on whether an entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss. If an entity intends to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, the other-than-temporary impairment shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If an entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis less any current-period loss, the other-than-temporary impairment shall be separated into the amount representing the credit loss and the amount related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss is determined based on the present value of cash flows expected to be collected, and the realized loss is recognized as impairment charges on securities on the consolidated statements of income. The amount of the total other-than-temporary impairment related to the other factors shall be recognized in other comprehensive income (loss), net of applicable taxes. The previous amortized cost basis less the other-than-temporary impairment recognized in earnings becomes the new amortized cost basis of the investment. The fair market value of the equity securities tends to fluctuate with the overall equity markets as well as the trends specific to each institution. The equity securities portfolio is reviewed in a similar manner as that of the debt securities with greater emphasis placed on the length of time the market value has been less than the carrying value and the financial sector outlook. The Corporation also reviews dividend payment activities, levels of non-performing assets and loan loss reserves. The starting point for the equity analysis is the length and severity of market value decline. The realized loss is recognized as impairment charges on securities on the consolidated statements of income. The previous cost basis less the other-than-temporary impairment recognized in earnings becomes the new cost basis of the investment. Restricted Investment in Bank Stocks The Bank owns restricted stock investments in the Federal Home Loan Bank of Pittsburgh (“FHLB-Pittsburgh”) and Atlantic Community Bankers Bank (“ACBB”). These investments do not have a readily determinable fair value because their ownership is restricted and they can be sold back only to the FHLB-Pittsburgh, ACBB or to another member institution. Therefore, these investments are carried at cost. At December 31, 2019, the Corporation held $4,189,000 in stock of FHLB-Pittsburgh and $35,000 in stock of ACBB. At December 31, 2018, the Corporation held $8,646,000 in stock of FHLB-Pittsburgh and $35,000 in stock of ACBB. Management evaluates the restricted investment in bank stocks for impairment on an annual basis. Management’s determination of whether these investments are impaired is based on management’s assessment of the ultimate recoverability of the cost of these investments rather than by recognizing temporary declines in value. The following factors were evaluated to determine the ultimate recoverability of the cost of the Corporation’s restricted investment in bank stocks; (i) the significance of the decline in net assets of the correspondent bank as compared to the capital stock amount for the correspondent bank and the length of time this situation has persisted; (ii) commitments by the correspondent bank to make payments required by law or regulation and the level of such payments in relation to the operating performance of the correspondent bank; (iii) the impact of legislative and regulatory changes on the institutions and, accordingly, on the customer base of the correspondent bank; and (iv) the liquidity position of the correspondent bank. Based on the analysis of these factors, management determined that no impairment charge was necessary related to the restricted investment in bank stocks during 2019 or 2018. Loans Net loans are stated at their outstanding recorded investment, net of deferred fees and costs, unearned income and the allowance for loan losses. Interest on loans is recognized as income over the term of each loan, generally, by the accrual method. Loan origination fees and certain direct loan origination costs have been deferred with the net amount amortized using the straight line method or the interest method over the contractual life of the related loans as an interest yield adjustment. Residential mortgage loans held for sale are carried at the lower of cost or market on an aggregate basis determined by independent pricing from appropriate federal or state agency investors. These loans are sold without recourse. Loans held for sale amounted to $2,292,000 at December 31, 2019 and $365,000 at December 31, 2018. As an addition to the commercial loans receivable portfolio, the Corporation may purchase the guaranteed portion of loans secured by the U.S. Government. The originating bank retains the unguaranteed portion of the loan. The loans are sponsored by one of the various government agencies including the U.S. Small Business Administration (SBA), United States Department of Agriculture (USDA), and the Farm Service Agency (FSA). Government Guaranteed Loans ("GGLs") carry no credit risk due to an unconditional and irrevocable guarantee on all principal and accrued interest, which is supported by the full faith and credit of the U.S. Government. As of December 31, 2019, the Corporation's balance of GGLs amounted to $6,150,000, compared to December 31, 2018, when the Corporation did not hold any GGLs in its loans receivable portfolio. The loans receivable portfolio is segmented into commercial, residential and consumer loans. Commercial loans consist of the following classes: Commercial and Industrial and Commercial Real Estate. Commercial and Industrial Lending The Corporation originates commercial and industrial loans primarily to businesses located in its primary market area and surrounding areas. These loans are used for various business purposes, which include short-term loans and lines of credit to finance machinery and equipment, inventory and accounts receivable. Generally, the maximum term for loans extended on machinery and equipment is based on the projected useful life of such machinery and equipment. Most business lines of credit are written on demand and are reviewed annually. Commercial and industrial loans are generally secured with short-term assets; however, in many cases, additional collateral such as real estate is provided as additional security for the loan. Loan-to-value maximum thresholds have been established by the Corporation and are specific to the type of collateral. Collateral values may be determined using invoices, inventory reports, accounts receivable aging reports, business financial statements, collateral appraisals, etc. Commercial and industrial loans are typically supported by personal guarantees of the borrower. In underwriting commercial and industrial loans, an analysis is performed to evaluate the borrower’s character and capacity to repay the loan, the adequacy of the borrower’s capital and collateral, as well as the conditions affecting the borrower. Evaluation of the borrower’s past, present and future cash flows is also an important aspect of the Corporation’s analysis of the borrower’s ability to repay. Commercial and industrial loans generally present a higher level of risk than other types of loans due primarily to the effect of general economic conditions. Commercial and industrial loans are typically made on the basis of the borrower’s ability to make repayment from cash flows from the borrower’s primary business activities. As a result, the availability of funds for the repayment of commercial and industrial loans is dependent on the success of the business itself, which in turn, is likely to be dependent upon the general economic environment. Commercial Real Estate Lending The Corporation engages in commercial real estate lending in its primary market area and surrounding areas. The Corporation’s commercial real estate portfolio is secured primarily by commercial retail space, commercial office buildings, residential housing and hotels. Generally, commercial real estate loans have terms that do not exceed twenty years, have loan-to-value ratios of up to eighty percent of the value of the collateral property, and are typically supported by personal guarantees of the borrowers. In underwriting these loans, the Corporation performs a thorough analysis of the financial condition of the borrower, the borrower’s credit history, and the reliability and predictability of the cash flow generated by the property securing the loan. The value of the property is determined by either independent appraisers or internal evaluations by Bank officers. Commercial real estate loans generally present a higher level of risk than residential real estate secured loans. Repayment of loans secured by commercial real estate is typically dependent upon the successful operation of the related real estate project and/or the effect of the general economic conditions on income producing properties. Residential Real Estate Lending (Including Home Equity) The Corporation’s residential real estate portfolio is comprised of one-to-four family residential mortgage loan originations, home equity term loans and home equity lines of credit. These loans are generated by the Corporation’s marketing efforts, its present customers, walk-in customers and referrals. These loans originate primarily within or with customers from the Corporation’s market area. The Corporation’s one-to-four family residential mortgage originations are secured primarily by properties located in its primary market area and surrounding areas. The Corporation offers fixed-rate mortgage loans with terms up to a maximum of thirty years for both permanent structures and those under construction. Loans with terms of thirty years are normally held for sale and sold without recourse; most of the residential mortgages held in the Corporation’s residential real estate portfolio have maximum terms of twenty years. Generally, the majority of the Corporation’s residential mortgage loans originate with a loan-to-value of eighty percent or less, or those with primary mortgage insurance at ninety-five percent or less. Home equity term loans are secured by the borrower’s primary residence and typically have a maximum loan-to-value of eighty percent and a maximum term of fifteen years. In general, home equity lines of credit are secured by the borrower’s primary residence with a maximum loan-to-value of eighty percent and a maximum term of twenty years. In underwriting one-to-four family residential mortgage loans, the Corporation evaluates the borrower’s ability to make monthly payments, the borrower’s repayment history and the value of the property securing the loan. The ability and willingness to repay is assessed based upon the borrower’s employment history, current financial conditions and credit background. A majority of the properties securing residential real estate loans made by the Corporation are appraised by independent appraisers. The Corporation generally requires mortgage loan borrowers to obtain an attorney’s title opinion or title insurance and fire and property insurance, including flood insurance, if applicable. Residential mortgage loans, home equity term loans and home equity lines of credit generally present a lower level of risk than consumer loans because they are secured by the borrower’s primary residence. Risk is increased when the Corporation is in a subordinate position, especially to another lender, for the loan collateral. Consumer Lending The Corporation offers a variety of secured and unsecured consumer loans, including vehicle loans, stock loans and loans secured by financial institution deposits. These loans originate primarily within or with customers from the market area. Consumer loan terms vary according to the type and value of collateral and creditworthiness of the borrower. In underwriting personal loans, a thorough analysis is performed regarding the borrower’s willingness and financial ability to repay the loan as agreed. The ability and willingness to repay is assessed based upon the borrower’s employment history, current financial condition and credit background. Consumer loans may entail greater credit risk than residential real estate loans, particularly in the case of personal loans which are unsecured or are secured by rapidly depreciable assets, such as automobiles or recreational equipment. In such cases, repossessed collateral for a defaulted personal loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation. In addition, personal loan collections are dependent on the borrower’s continuing financial stability and therefore, are more likely to be affected by adverse personal circumstances. Furthermore, the application of various federal and state laws, including bankruptcy and insolvency laws, may limit the amount which can be recovered on such loans. Delinquent Loans Generally, a loan is considered to be past-due when scheduled loan payments are in arrears 10 days or more. Delinquent notices are generated automatically when a loan is 10 or 15 days past-due, depending on loan type. Collection efforts continue on past-due loans that have not been brought current, when it is believed that some chance exists for improvement in the status of the loan. Past-due loans are continually evaluated with the determination for charge-off being made when no reasonable chance remains that the status of the loan can be improved. Commercial and Industrial and Commercial Real Estate loans are charged off in whole or in part when they become sufficiently delinquent based upon the terms of the underlying loan contract and when a collateral deficiency exists. Because all or part of the contractual cash flows are not expected to be collected, the loan is considered to be impaired, and the Bank estimates the impairment based on its analysis of the cash flows or collateral estimated at fair value less cost to sell. Should a Government Guaranteed Loan default, demand is made to the originating bank for repurchase of the loan. If the originating bank does not repurchase the loan, demand for repurchase is then made to the appropriate government agency which has provided the guarantee for the loan. Residential Real Estate and Consumer loans are charged off when they become sufficiently delinquent based upon the terms of the underlying loan contract and when the value of the underlying collateral is not sufficient to support the loan balance and a loss is expected. At that time, the amount of estimated collateral deficiency, if any, is charged off for loans secured by collateral, and all other loans are charged off in full. Loans with collateral are charged down to the estimated fair value of the collateral less cost to sell. Existing loans in which the borrower has declared bankruptcy are considered on a case by case basis to determine whether repayment is likely to occur (eg. reaffirmation by the borrower with demonstrated repayment ability). Otherwise, loans are charged off in full or written down to the estimated fair value of collateral less cost to sell. Generally, a loan is classified as non-accrual and the accrual of interest on such a loan is discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest, even though the loan may currently be performing. A loan may remain on accrual status if it is well secured (or supported by a strong guarantee) and in the process of collection. When a loan is placed on non-accrual status, unpaid interest credited to income in the current year is reversed and unpaid interest accrued in prior years is charged against interest income. Certain non-accrual loans may continue to perform; that is, payments are still being received. Generally, the payments are applied to principal. These loans remain under constant scrutiny, and if performance continues, interest income may be recorded on a cash basis based on management’s judgment as to collectability of principal. Allowance for Loan Losses The allowance for loan losses is established through provisions for loan losses charged against income. Loans deemed to be uncollectible are charged against the allowance for loan losses and subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is maintained at a level estimated by management to be adequate to absorb potential loan losses. Management’s periodic evaluation of the adequacy of the allowance for loan losses is based on the Corporation’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay (including the timing of future payments), the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions, and other relevant factors. This evaluation is inherently subjective as it requires material estimates including the amounts and timing of future cash flows expected to be received on impaired loans that may be susceptible to significant change. The allowance consists of specific, general and unallocated components. The specific component relates to loans that are individually classified as impaired. Select loans are not aggregated for collective impairment evaluation, as such; all loans are subject to individual impairment evaluation should the facts and circumstances pertinent to a particular loan suggest that such evaluation is necessary. Factors considered by management in determining impairment include payment status and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. If a loan is impaired, a portion of the allowance may be allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from collateral. Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered to be a collateral dependent loan, the loan may be reported, net, at the fair value of the collateral. For troubled debt restructurings that subsequently default, the Corporation determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses. The general component covers all other loans not identified as impaired (aside from Government Guaranteed Loans, which do not require an allowance) and is based on historical losses and qualitative factors. The historical loss component of the allowance is determined by losses recognized by portfolio segment over a time period that management has determined represents the current credit cycle. Qualitative factors impacting each portfolio segment may include: delinquency trends, loan volume trends, Bank policy changes, management processes and oversight, economic trends (including change in consumer and business disposable incomes, unemployment and under-employment levels, and other conditions), concentrations by industry or product, internal and external loan review processes, collateral value and market conditions, and external factors including regulatory issues and competition. Government Guaranteed Loans do not require an associated allowance for loan losses due to the underlying irrevocable and unconditional guarantee, which is supported by the full faith and credit of the U.S. Government. Should a GGL default, the loan will be repurchased by the originating bank or the appropriate government agency that has provided the guarantee for the loan. The unallocated component of the allowance is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. A reserve for unfunded lending commitments is provided for possible credit losses on off-balance sheet credit exposures. The reserve for unfunded lending commitments represents management’s estimate of losses inherent in its unfunded loan commitments and, if necessary, is recorded in other liabilities on the consolidated balance sheets. As of December 31, 2019 and 2018 the amount of the reserve for unfunded lending commitments was $125,000 and $117,000, respectively. The Corporation is subject to periodic examination by its federal and state examiners, and may be required by such regulators to recognize additions to the allowance for loan losses based on their assessment of credit information available to them at the time of their examinations. A loan is considered impaired when, based on current information and events, it is probable that the Corporation will be unable to collect all amounts due according to the contractual terms of the original loan agreement. Under current accounting standards, the allowance for loan losses related to impaired loans is based on discounted cash flows using the loan’s effective interest rate at inception or the fair value of the collateral for certain collateral dependent loans. The restructuring of a loan is considered a “troubled debt restructuring” if both the following conditions are met: (i) the borrower is experiencing financial difficulties, and (ii) the Corporation has granted a concession. The most common concessions granted include one or more modifications to the terms of the debt, such as (a) a reduction in the interest rate for the remaining life of the debt, (b) an extension of the maturity date at an interest rate lower than the current market rate for new debt with similar risk, (c) a temporary period of interest-only payments, and (d) a reduction in the contractual payment amount for either a short period or remaining term of the loan. A less common concession is the forgiveness of a portion of the principal. The determination of whether a borrower is experiencing financial difficulties takes into account not only the current financial condition of the borrower, but also the potential financial condition of the borrower were a concession not granted. Similarly, the determination of whether a concession has been granted is very subjective in nature. For example, simply extending the term of a loan at its original interest rate or even at a higher interest rate could be interpreted as a concession unless the borrower could readily obtain similar credit terms from a different lender. Loans modified in a troubled debt restructuring are considered impaired and may or may not be placed on non-accrual status until the Corporation determines the future collection of principa |
RESTRICTED CASH BALANCES
RESTRICTED CASH BALANCES | 12 Months Ended |
Dec. 31, 2019 | |
RESTRICTED CASH BALANCES | |
RESTRICTED CASH BALANCES | NOTE 2 — RESTRICTED CASH BALANCES The Bank is required to maintain certain average reserve balances as established by the Federal Reserve Bank. The amount of those reserve balances for the reserve computation period which included December 31, 2019 and 2018, was $1,352,000 and $1,178,000, respectively, which was satisfied through the restriction of vault cash. In addition, the Bank maintains a clearing balance at the Federal Reserve Bank to offset daily cash management activities and specific charges for services. At December 31, 2019 and 2018, the amount of this balance was $463,000 and $1,118,000, respectively. |
SECURITIES
SECURITIES | 12 Months Ended |
Dec. 31, 2019 | |
SECURITIES | |
SECURITIES | NOTE 3 — SECURITIES The amortized cost, related estimated fair value, and unrealized gains and losses for debt securities classified as “available-for-sale” were as follows at December 31, 2019 and 2018: Debt Securities Available-for-Sale Gross Gross (Dollars in thousands) Amortized Unrealized Unrealized Fair December 31, 2019: Cost Gains Losses Value U.S. Treasury securities $ 2,852 $ 3 $ ― $ 2,855 Obligations of U.S. Government Corporations and Agencies: Mortgage-backed 77,131 539 (387) 77,283 Other 10,381 4 (88) 10,297 Other mortgage backed securities 11,145 3 (10) 11,138 Obligations of state and political subdivisions 114,934 5,490 (48) 120,376 Asset backed securities 37,596 115 (175) 37,536 Corporate debt securities 18,546 182 (285) 18,443 Total $ 272,585 $ 6,336 $ (993) $ 277,928 Debt Securities Available-for-Sale Gross Gross (Dollars in thousands) Amortized Unrealized Unrealized Fair December 31, 2018: Cost Gains Losses Value U.S. Treasury securities $ 5,307 $ — $ (12) $ 5,295 Obligations of U.S. Government Corporations and Agencies: Mortgage-backed 66,300 105 (1,529) 64,876 Other 18,706 21 (484) 18,243 Other mortgage backed securities 4,767 — (18) 4,749 Obligations of state and political subdivisions 182,621 1,678 (2,021) 182,278 Asset backed securities 14,323 47 — 14,370 Corporate debt securities 27,297 24 (1,078) 26,243 Total $ 319,321 $ 1,875 $ (5,142) $ 316,054 Debt securities available-for-sale with an aggregate fair value of $201,468,000 at December 31, 2019 and $149,993,000 at December 31, 2018, were pledged to secure public funds, trust funds, securities sold under agreements to repurchase and the Federal Discount Window aggregating $143,546,000 at December 31, 2019 and $112,528,000 at December 31, 2018. The amortized cost and fair value of securities, by contractual maturity, are shown below at December 31, 2019. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Available-for-Sale Amortized (Dollars in thousands) Cost Fair Value 1 year or less $ 3,853 $ 3,863 Over 1 year through 5 years 36,653 36,933 Over 5 years through 10 years 45,794 46,653 Over 10 years 98,009 102,058 Mortgage-backed securities 88,276 88,421 Total $ 272,585 $ 277,928 There were no aggregate securities with a single issuer (excluding the U.S. Government and U.S. Government Agencies and Corporations) which exceeded ten percent of consolidated stockholders’ equity at December 31, 2019. The quality rating of the obligations of state and political subdivisions are generally investment grade, as rated by Moody’s, Standard and Poor’s or Fitch. The typical exceptions are local issues which are not rated, but are secured by the full faith and credit obligations of the communities that issued these securities. Proceeds from sales of investments in debt securities available-for-sale during 2019 and 2018 were $106,623,000 and $44,122,000, respectively. Gross gains realized on these sales were $947,000 and $122,000, respectively. Gross losses on these sales were $409,000 and $115,000, respectively. There were no impairment losses realized on debt securities available-for-sale during 2019 or 2018. At December 31, 2019 and 2018, the Corporation had $1,933,000 and $1,560,000, respectively, in equity securities recorded at fair value. Prior to January 1, 2018, equity securities were stated at fair value with unrealized gains and losses reported as a separate component of accumulated other comprehensive income (AOCI), net of tax. At December 31, 2017, net unrealized gains, net of tax, of $634,000 had been recognized in AOCI. On January 1, 2018, these unrealized gains and losses were reclassified out of AOCI and into retained earnings with subsequent changes in fair value being recognized in net income. The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during 2019 and 2018: (Dollars in thousands) December 31, 2019 December 31, 2018 Net gains and (losses) recognized during the period on equity securities $ 373 $ (72) Less: Net gains and (losses) recognized during the period on equity securities sold during the period — — Net gains and (losses) recognized during the reporting period on equity securities still held at the reporting date $ 373 $ (72) The Corporation and its investment advisors monitor the entire portfolio at least quarterly with particular attention given to securities in a continuous loss position of at least ten percent for over twelve months. Based on the factors described above, management did not consider any securities to be other-than-temporarily impaired at December 31, 2019 and 2018. The summary below shows the gross unrealized losses and fair value of the Corporation’s debt securities, aggregated by investment category, of which individual securities have been in a continuous unrealized loss position for less than 12 months or 12 months or more as of December 31, 2019 and 2018: Less Than 12 Months 12 Months or More Total December 31, 2019 Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) Value Loss Value Loss Value Loss Available-for-Sale: U.S. Treasury securities $ — $ — $ — $ — $ — $ — Obligations of U.S. Government Corporations and Agencies: Mortgage-backed 39,085 (221) 12,650 (166) 51,735 (387) Other 4,382 (24) 4,594 (64) 8,976 (88) Other mortgage backed debt securities 4,056 (10) — — 4,056 (10) Obligations of state and political subdivisions 1,993 (15) 1,081 (33) 3,074 (48) Asset backed securities 19,236 (175) — — 19,236 (175) Corporate debt securities 3,484 (16) 7,231 (269) 10,715 (285) Total $ 72,236 $ (461) $ 25,556 $ (532) $ 97,792 $ (993) Less Than 12 Months 12 Months or More Total December 31, 2018 Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) Value Loss Value Loss Value Loss Available-for-Sale: U.S. Treasury securities $ 5,295 $ (12) $ — $ — $ 5,295 $ (12) Obligations of U.S. Government Corporations and Agencies: Mortgage-backed 3,690 (17) 55,443 (1,512) 59,133 (1,529) Other 7,553 (66) 7,067 (418) 14,620 (484) Other mortgage backed debt securities 4,749 (18) — — 4,749 (18) Obligations of state and political subdivisions 14,453 (75) 66,583 (1,946) 81,036 (2,021) Asset backed securities — — — — — — Corporate debt securities 1,823 (29) 19,477 (1,049) 21,300 (1,078) Total $ 37,563 $ (217) $ 148,570 $ (4,925) $ 186,133 $ (5,142) The Corporation invests in various forms of agency debt including mortgage backed securities and callable debt. The mortgage backed securities are issued by FHLMC (“Federal Home Loan Mortgage Corporation”), FNMA (“Federal National Mortgage Association”) or GNMA (“Government National Mortgage Association”). The municipal securities consist of general obligations and revenue bonds. The fair market value of the above securities is influenced by market interest rates, prepayment speeds on mortgage securities, bid-offer spreads in the market place and credit premiums for various types of agency debt. These factors change continuously and therefore the market value of these securities may be higher or lower than the Corporation’s carrying value at any measurement date. Management does not believe any of their 23 debt securities with a less than one year unrealized loss position, or any of their 15 debt securities with a one year or greater unrealized loss position, as of December 31, 2019, represent an other-than-temporary impairment, as these unrealized losses relate principally to changes in interest rates subsequent to the acquisition of the specific securities. The Corporation expects to collect all principal and interest payments defined under the original terms as all contracted payments on securities in the portfolio are current as of December 31, 2020. |
LOANS AND ALLOWANCE FOR LOAN LO
LOANS AND ALLOWANCE FOR LOAN LOSSES | 12 Months Ended |
Dec. 31, 2019 | |
LOANS AND ALLOWANCE FOR LOAN LOSSES | |
LOANS AND ALLOWANCE FOR LOAN LOSSES | NOTE 4 — LOANS AND ALLOWANCE FOR LOAN LOSSES The following table presents the classes of the loan portfolio summarized by risk rating as of December 31, 2019 and 2018: Commercial and Industrial Commercial Real Estate (Dollars in thousands) 2019 2018 2019 2018 Grade: 1-6 Pass $ 84,999 $ 90,835 $ 382,510 $ 329,126 7 Special Mention 2 6 944 5,249 8 Substandard 1,068 1,219 11,590 13,403 9 Doubtful — — ― — Add (deduct): Unearned discount and — — ― — Net deferred loan fees and costs 643 160 757 698 Total loans $ 86,712 $ 92,220 $ 395,801 $ 348,476 Residential Real Estate Including Home Equity Consumer 2019 2018 2019 2018 Grade: 1-6 Pass $ 158,301 $ 158,755 $ 5,662 $ 5,854 7 Special Mention 117 121 83 1 8 Substandard 1,048 941 35 9 9 Doubtful — — — — Add (deduct): Unearned discount and — — — — Net deferred loan fees and costs (116) (76) 89 91 Total loans $ 159,350 $ 159,741 $ 5,869 $ 5,955 Total Loans 2019 2018 Grade: 1-6 Pass $ 631,472 $ 584,570 7 Special Mention 1,146 5,377 8 Substandard 13,741 15,572 9 Doubtful — — Add (deduct): Unearned discount and — — Net deferred loan fees and costs 1,373 873 Total loans $ 647,732 $ 606,392 Commercial and Industrial and Commercial Real Estate include loans categorized as tax-free in the amounts of $17,848,000 and $2,007,000 at December 31, 2019 and $24,161,000 and $2,164,000 at December 31, 2018. Commercial and Industrial loans also included $6,150,000 of Government Guaranteed Loans as of December 31, 2019. The Corporation did not hold any GGLs in its loan receivable portfolio as of December 31, 2018. Loans held for sale amounted to $2,292,000 at December 31, 2019 and $365,000 at December 31, 2018. The activity in the allowance for loan losses, by loan class, is summarized below for the years indicated. Commercial Commercial Residential (Dollars in thousands) and Industrial Real Estate Real Estate Consumer Unallocated Total 2019 Allowance for Loan Losses: Beginning balance $ 724 $ 3,700 $ 1,650 $ 117 $ 554 $ 6,745 Charge-offs ― (64) (69) (71) — (204) Recoveries 6 ― 2 6 — 14 Provision (96) 480 82 62 (78) 450 Ending Balance $ 634 $ 4,116 $ 1,665 $ 114 $ 476 $ 7,005 Ending balance: individually evaluated for impairment $ — $ 1 $ — $ — $ — $ 1 Ending balance: collectively evaluated for impairment $ 634 $ 4,115 $ 1,665 $ 114 $ 476 $ 7,004 Loans Receivable: Ending Balance $ 86,712 $ 395,801 $ 159,350 $ 5,869 $ — $ 647,732 Ending balance: individually evaluated for impairment $ 1,084 $ 11,158 $ 712 $ — $ — $ 12,954 Ending balance: collectively evaluated for impairment $ 85,628 $ 384,643 $ 158,638 $ 5,869 $ — $ 634,778 Commercial Commercial Residential (Dollars in thousands) and Industrial Real Estate Real Estate Consumer Unallocated Total 2018 Allowance for Loan Losses: Beginning balance $ 949 $ 4,067 $ 1,656 $ 111 $ 704 $ 7,487 Charge-offs (18) (783) (181) (57) — (1,039) Recoveries 31 60 — 6 — 97 Provision (238) 356 175 57 (150) 200 Ending Balance $ 724 $ 3,700 $ 1,650 $ 117 $ 554 $ 6,745 Ending balance: individually evaluated for impairment $ — $ 1 $ — $ — $ — $ 1 Ending balance: collectively evaluated for impairment $ 724 $ 3,699 $ 1,650 $ 117 $ 554 $ 6,744 Loans Receivable: Ending Balance $ 92,220 $ 348,476 $ 159,741 $ 5,955 $ — $ 606,392 Ending balance: individually evaluated for impairment $ 1,126 $ 15,890 $ 577 $ — $ — $ 17,593 Ending balance: collectively evaluated for impairment $ 91,094 $ 332,586 $ 159,164 $ 5,955 $ — $ 588,799 Of the $119,000 in foreclosed assets held for resale at December 31, 2019, $38,000 was represented by land, and $81,000 was represented by commercial real estate. All foreclosed assets were held as the result of obtaining physical possession. Of the $1,163,000 in foreclosed assets held for resale at December 31, 2018, $268,000 was represented by residential real estate, $39,000 was represented by land, and $856,000 was represented by commercial real estate. Consumer mortgage loans secured by residential real estate for which the Corporation has entered into formal foreclosure proceedings but for which physical possession of the property has yet to be obtained amounted to $617,000 at December 31, 2019 and $718,000 at December 31, 2018. These balances were not included in foreclosed assets held for resale at December 31, 2019 and 2018. From time to time, the Corporation may agree to modify the contractual terms of a borrower’s loan. In cases where the modifications represent a concession to a borrower experiencing financial difficulty, the modification is considered a troubled debt restructuring (“TDR”). The outstanding recorded investment of loans categorized as TDRs as of December 31, 2019 and December 31, 2018 was $8,678,000 and $13,777,000, respectively. The decrease in TDRs at December 31, 2019 is mainly attributable to one large loan to a real estate developer specializing in commercial office space that carried a value of $4,296,000 and was modified as a TDR during the fourth quarter of 2018; the loan was subsequently paid off during the year ended December 31, 2019. There were no unfunded commitments on TDRs at December 31, 2019 and 2018. During the year ended December 31, 2019, no loans were modified as TDRs, compared to the year ended December 31, 2018 when eleven loans with a combined post modification balance of $5,627,000 were modified as TDRs. The loan modifications for the year ended December 31, 2018 consisted of one interest rate modification, three term modifications beyond the original stated term and seven payment modifications. The following table presents the outstanding recorded investment of TDRs at the dates indicated: (Dollars in thousands) December 31, December 31, 2019 2018 Non-accrual TDRs $ 112 $ 80 Accruing TDRs 8,566 13,697 Total $ 8,678 $ 13,777 At December 31, 2019, six Commercial Real Estate loans classified as TDRs with a combined recorded investment of $464,000 were not in compliance with the terms of their restructure, compared to December 31, 2018 when eight Commercial Real Estate loans classified as TDRs with a combined recorded investment of $499,000 and one Commercial and Industrial loan classified as a TDR with a recorded investment of $6,000 were not in compliance with the terms of their restructure. No loans were modified as TDRs within the twelve months preceding December 31, 2019, as compared to the year ended December 31, 2018 when four Commercial Real Estate loans totaling $163,000 that were modified as TDRs within the twelve months preceding December 31, 2018 had experienced payment defaults. The following table presents information regarding the loan modifications categorized as TDRs during the year ended December 31, 2018. No loans were modified as TDRs during the year ended December 31, 2019. (Dollars in thousands) Year Ended December 31, 2018 Pre-Modification Post-Modification Year-End Number Outstanding Recorded Outstanding Recorded Recorded of Contracts Investment Investment Investment Commercial and Industrial 3 $ 751 $ 751 $ 771 Commercial Real Estate 7 4,833 4,850 4,688 Residential Real Estate 1 26 26 25 Total 11 $ 5,610 $ 5,627 $ 5,484 The following table provides detail regarding the types of loan modifications made for loans categorized as TDRs during the year ended December 31, 2018 with the total number of each type of modification performed. No loans were modified as TDRs during the year ended December 31, 2019. Year Ended December 31, 2018 Rate Term Payment Number Modification Modification Modification Modified Commercial and Industrial — — 3 3 Commercial Real Estate 1 2 4 7 Residential Real Estate — 1 — 1 Total 1 3 7 11 The recorded investment, unpaid principal balance, and the related allowance of the Corporation’s impaired loans are summarized below at December 31, 2019 and 2018. (Dollars in thousands) December 31, 2019 December 31, 2018 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance With no related allowance recorded: Commercial and Industrial $ 1,084 $ 1,084 $ — $ 1,126 $ 1,126 $ — Commercial Real Estate 11,130 14,147 — 15,807 20,107 — Residential Real Estate 712 822 — 577 619 — With an allowance recorded: Commercial and Industrial ― ― — — — — Commercial Real Estate 28 28 1 83 83 1 Residential Real Estate ― ― — — — — Total $ 12,954 $ 16,081 $ 1 $ 17,593 $ 21,935 $ 1 Total consists of: Commercial and Industrial $ 1,084 $ 1,084 $ — $ 1,126 $ 1,126 $ — Commercial Real Estate $ 11,158 $ 14,175 $ 1 $ 15,890 $ 20,190 $ 1 Residential Real Estate $ 712 $ 822 $ — $ 577 $ 619 $ — At December 31, 2019 and 2018, $8,678,000 and $13,777,000 of loans classified as TDRs were included in impaired loans both with a total allocated allowance of $1,000, respectively. The recorded investment represents the loan balance reflected on the consolidated balance sheets net of any charge-offs. The unpaid balance is equal to the gross amount due on the loan. The average recorded investment and interest income recognized for the Corporation’s impaired loans are summarized below for the years ended December 31, 2019 and 2018. (Dollars in thousands) For the Year Ended For the Year Ended December 31, 2019 December 31, 2018 Average Interest Average Interest Recorded Income Recorded Income Investment Recognized Investment Recognized With no related allowance recorded: Commercial and Industrial $ 1,106 $ 53 $ 1,157 $ 53 Commercial Real Estate 12,426 435 11,575 623 Residential Real Estate 614 7 794 11 With an allowance recorded: Commercial and Industrial — — — — Commercial Real Estate 69 3 662 3 Residential Real Estate 13 ― 138 — Total $ 14,228 $ 498 $ 14,326 $ 690 Total consists of: Commercial and Industrial $ 1,106 $ 53 $ 1,157 $ 53 Commercial Real Estate $ 12,495 $ 438 $ 12,237 $ 626 Residential Real Estate $ 627 $ 7 $ 932 $ 11 Of the $498,000 and $690,000 in interest income recognized on impaired loans for the years ended December 31, 2019 and 2018, respectively, $5,000 and $9,000 in interest income was recognized with respect to non-accrual loans. Total non-performing assets (which includes loans receivable on non-accrual status, foreclosed assets held for resale and loans past-due 90 days or more and still accruing interest) as of December 31, 2019 and 2018 were as follows: (Dollars in thousands) December 31, December 31, 2019 2018 Commercial Real Estate $ 3,697 $ 3,402 Residential Real Estate 691 494 Total non-accrual loans 4,388 3,896 Foreclosed assets held for resale 119 1,163 Loans past-due 90 days or more and still accruing interest 100 341 Total non-performing assets $ 4,607 $ 5,400 If interest on non-accrual loans had been accrued at original contract rates, interest income would have increased by $996,000 in 2019 and $784,000 in 2018. The following tables present the classes of the loan portfolio summarized by the past-due status at December 31, 2019 and 2018: (Dollars in thousands) 90 Days Or Greater Past Due 90 Days and Still 30-59 Days 60-89 Days or Greater Total Total Accruing Past Due Past Due Past Due Past Due Current Loans Interest December 31, 2019: Commercial and Industrial $ ― $ 26 $ — $ 26 $ 86,686 $ 86,712 $ — Commercial Real Estate 880 957 3,502 5,339 390,462 395,801 ― Residential Real Estate 1,118 506 613 2,237 157,113 159,350 100 Consumer 24 5 — 29 5,840 5,869 — Total $ 2,022 $ 1,494 $ 4,115 $ 7,631 $ 640,101 $ 647,732 $ 100 (Dollars in thousands) 90 Days Or Greater Past Due 90 Days and Still 30-59 Days 60-89 Days or Greater Total Total Accruing Past Due Past Due Past Due Past Due Current Loans Interest December 31, 2018: Commercial and Industrial $ 16 $ 24 $ 6 $ 46 $ 92,174 $ 92,220 $ 6 Commercial Real Estate 2,183 523 3,583 6,289 342,187 348,476 252 Residential Real Estate 1,890 421 457 2,768 156,973 159,741 83 Consumer 12 — — 12 5,943 5,955 — Total $ 4,101 $ 968 $ 4,046 $ 9,115 $ 597,277 $ 606,392 $ 341 At December 31, 2019 and 2018, commitments to lend additional funds with respect to impaired loans consisted of one irrevocable letter of credit in the amount of $1,249,000 that was associated with a loan to a developer of a residential sub-division. |
PREMISES AND EQUIPMENT
PREMISES AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2019 | |
PREMISES AND EQUIPMENT | |
PREMISES AND EQUIPMENT | NOTE 5 — PREMISES AND EQUIPMENT Premises and equipment at December 31, 2019 and 2018 is as follows: (Dollars in thousands) Estimated Useful Life (in years) 2019 2018 Land N/A $ 3,744 $ 3,744 Buildings 5-40 20,746 20,639 Leasehold improvements 1-20 184 174 Equipment 3-25 8,242 8,283 32,916 32,840 Less: Accumulated depreciation 13,529 12,894 Total $ 19,387 $ 19,946 Depreciation amounted to $1,112,000 for 2019 and $1,141,000 for 2018. |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2019 | |
DEPOSITS | |
DEPOSITS | NOTE 6 — DEPOSITS Major classifications of deposits at December 31, 2019 and 2018 consisted of: (Dollars in thousands) 2019 2018 Non-interest bearing demand $ 134,648 $ 126,361 Interest bearing demand 218,847 180,328 Savings 173,069 167,572 Time certificates of deposits less than $250,000 210,916 172,550 Time certificates of deposits $250,000 or greater 23,006 23,597 Other time 1,142 1,145 Total deposits $ 761,628 $ 671,553 The following is a schedule reflecting classification and remaining maturities of time deposits at December 31, 2019: ( Dollars in thousands) Year Ending 2020 $ 114,598 2021 34,566 2022 40,420 2023 23,451 2024 21,900 Thereafter 129 $ 235,064 |
SHORT-TERM BORROWINGS
SHORT-TERM BORROWINGS | 12 Months Ended |
Dec. 31, 2019 | |
SHORT-TERM BORROWINGS | |
SHORT-TERM BORROWINGS | NOTE 7 — SHORT-TERM BORROWINGS Short-term borrowings include federal funds purchased, securities sold under agreements to repurchase, Federal Discount Window, and Federal Home Loan Bank (“FHLB”) advances, which generally represent overnight or less than 30 ‑day borrowings. Short-term borrowings and weighted-average interest rates at and for the years ended December 31, 2019 and 2018 are as follows: (Dollars in thousands) 2019 2018 Average Average Amount Rate Amount Rate Federal funds purchased $ — 2.01 % $ — 2.19 % Securities sold under agreements to repurchase 14,042 1.03 % 12,957 0.56 % Federal Discount Window — 2.92 % — 2.19 % Federal Home Loan Bank 40,621 2.59 % 161,488 2.28 % $ 54,663 2.37 % $ 174,445 2.04 % At December 31, 2019, the maximum borrowing capacity of federal funds purchased and the Federal Discount Window was $15,000,000 and $4,805,000, respectively. Please refer to Note 8 ― Long-Term Borrowings for the Corporation’s maximum borrowing capacity at FHLB. Securities Sold Under Agreements to Repurchase (“Repurchase Agreements”) The Corporation enters into agreements under which it sells securities subject to an obligation to repurchase the same or similar securities. Under these arrangements, the Corporation may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Corporation to repurchase the assets. As a result, these repurchase agreements are accounted for as collateralized financing agreements (i.e., secured borrowings) and not as a sale and subsequent repurchase of securities. The obligation to repurchase the securities is reflected as a liability on the Corporation’s consolidated balance sheets, while the securities underlying the repurchase agreements remain in the respective investment securities asset accounts. In other words, there is not offsetting or netting of the investment securities assets with the repurchase agreement liabilities. In addition, as the Corporation does not enter into reverse repurchase agreements, there is no such offsetting to be done with the repurchase agreements. The right of setoff for a repurchase agreement resembles a secured borrowing, whereby the collateral would be used to settle the fair value of the repurchase agreement should the Corporation be in default (e.g., fails to make an interest payment to the counterparty). The collateral is held by a correspondent bank in the counterparty’s custodial account. The counterparty has the right to sell or repledge the investment securities. The following table presents the short-term borrowings subject to an enforceable master netting arrangement or repurchase agreements as of December 31, 2019 and 2018. (Dollars in thousands) Gross Net Amounts Amounts of Liabilities Offset Presented Gross in the in the Amounts of Consolidated Consolidated Cash Recognized Balance Balance Financial Collateral Net Liabilities Sheet Sheet Instruments Pledge Amount December 31, 2019 Repurchase agreements (a) $ 14,042 $ — $ 14,042 $ (14,042) $ — $ — December 31, 2018 Repurchase agreements (a) $ 12,957 $ — $ 12,957 $ (12,957) $ — $ — (a) As of December 31, 2019 and 2018, the fair value of securities pledged in connection with repurchase agreements was $22,413,000 and $16,970,000, respectively. The following table presents the remaining contractual maturity of the master netting arrangement or repurchase agreements as of December 31, 2019. (Dollars in thousands) Remaining Contractual Maturity of the Agreements Overnight Greater and Up to 30 -90 than Continuous 30 days Days 90 Days Total Repurchase agreements and repurchase-to-maturity transactions: U.S. Treasury and/or agency securities $ 14,042 $ — $ — $ — $ 14,042 Total $ 14,042 $ — $ — $ — $ 14,042 |
LONG-TERM BORROWINGS
LONG-TERM BORROWINGS | 12 Months Ended |
Dec. 31, 2019 | |
LONG-TERM BORROWINGS | |
LONG-TERM BORROWINGS | NOTE 8 — LONG-TERM BORROWINGS Long-term borrowings are comprised of advances from FHLB. Under terms of a blanket agreement, collateral for the FHLB loans is certain qualifying assets of the Corporation’s banking subsidiary. The qualifying assets are real estate mortgages and certain investment securities. A schedule of long-term borrowings by maturity as of December 31, 2019 and 2018 follows: (Dollars in thousands) 2019 2018 Due 2019, 1.79% to 2.11% $ ― $ 20,000 Due 2020, 1.62% to 1.95% 10,000 10,000 Due 2021, 1.42% to 1.58% 10,000 10,000 Due 2022 , 2.34% 10,000 ― Due 2023, 2.96% 3,000 3,000 Due 2024, 1.68% 20,000 ― Due 2028, 5.14% 2,000 2,000 $ 55,000 $ 45,000 The Corporation’s long-term borrowings consist of notes at fixed interest rates. Upon any default, under the terms of a master agreement, FHLB may declare all indebtedness of the Corporation immediately due. In addition, FHLB shall not be required to fund advances under any outstanding commitments. At December 31, 2019, the Corporation’s maximum borrowing capacity at FHLB, which takes into account FHLB long-term notes and FHLB short-term borrowings, was $353,426,000. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
INCOME TAXES | NOTE 9 — INCOME TAXES The current and deferred components of the income tax expense consisted of the following: (Dollars in thousands) 2019 2018 Federal Current $ 1,014 $ (107) Deferred 100 566 Income tax expense $ 1,114 $ 459 The following is a reconciliation between the income tax expense and the amount of income taxes which would have been provided at the statutory rate of 21%: (Dollars in thousands) 2019 2018 Amount Rate Amount Rate Federal income tax at statutory rate $ 2,384 21.0 % $ 2,031 21.0 % Tax-exempt income (727) (6.4) (1,043) (10.8) Low-income housing credits (405) (3.6) (405) (4.2) Bank owned life insurance income (130) (1.1) (128) (1.3) Other (8) (0.1) 4 — Income tax expense and rate $ 1,114 9.8 % $ 459 4.7 % The components of the net deferred tax (liability) asset at December 31, 2019 and 2018 are as follows: (Dollars in thousands) 2019 2018 Deferred Tax Assets: Allowance for loan losses $ 1,471 $ 1,417 Provision for unfunded commitments 26 25 Deferred compensation 230 241 Contributions 1 1 Accrued rent expense — 22 Operating lease liabilities 349 — Loan purchase accounting 14 31 Limited partnership investments 242 66 Alternative minimum tax credits ― 7 Net unrealized losses on debt securities available-for-sale ― 686 Impairment loss on securities 4 4 Writedowns on OREO properties 3 34 Capital and net operating loss carry forwards 70 70 Valuation allowance related to state net operating losses (70) (70) Total 2,340 2,534 Deferred Tax Liabilities: Net unrealized gains on debt securities available-for-sale 1,122 — Loan fees and costs 288 183 Net unrealized gains on marketable equity securities 345 237 Operating lease right-of-use assets 322 — Accumulated depreciation 363 311 Accretion 32 35 Mortgage servicing rights 49 42 Intangibles 257 257 Total 2,778 1,065 Net Deferred Tax (Liability) Asset $ (438) $ 1,469 A valuation allowance for deferred tax assets was recorded in the amount of $70,000 at December 31, 2019 and 2018. The valuation allowance relates to state net operating loss carryforwards for which realizability is uncertain. At December 31, 2019 and 2018, the Corporation had state net operating loss carryforwards, net of a valuation allowance, of $0, which are available to offset future state taxable income, and expire at various dates through 2039. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible and tax planning strategies, management believes it is more likely than not that the Corporation will realize the benefits of these deferred tax assets, net of any valuation allowance at December 31, 2019. The Corporation did not have any uncertain tax positions at December 31, 2019 and 2018. The Corporation and its subsidiary file a consolidated federal income tax return. The Corporation is no longer subject to examination by Federal or State taxing authorities for the years before 2016. |
EMPLOYEE BENEFIT PLANS AND DEFE
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION AGREEMENTS | 12 Months Ended |
Dec. 31, 2019 | |
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION AGREEMENTS | |
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION AGREEMENTS | NOTE 10 — EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION AGREEMENTS The Corporation maintains a 401k Plan which has a combined tax qualified savings feature and profit sharing feature for the benefit of its employees. Effective January 1, 2014, the plan became a Safe Harbor Plan. Under the savings feature, the Corporation makes safe harbor matching contributions of 100% of the first 3% of compensation an employee contributes to the Plan and 50% of the next 2% of compensation an employee contributes to the Plan. The safe harbor matching contributions amounted to $309,000 and $296,000 in 2019 and 2018, respectively. Under the profit sharing feature, contributions, at the discretion of the Board of Directors, are funded currently and amounted to $329,000 and $304,000 in 2019 and 2018, respectively. The Corporation also has non-qualified deferred compensation agreements with one of its current officers and five retired officers. These agreements are essentially unsecured promises by the Corporation to make monthly payments to the officers over fifteen or twenty year periods. Payments begin based upon specific criteria — generally, when the officer retires. To account for the cost of payments yet to be made in the future, the Corporation recognizes an accrued liability in years prior to when payments begin based on the present value of those future payments. The Corporation’s accrued liability for these deferred compensation agreements, reported in other liabilities on the consolidated balance sheets, as of December 31, 2019 and 2018, was $1,056,000 and $1,109,000, respectively. The related expense for these agreements, reported in salaries and employee benefits on the consolidated statements of income, amounted to $73,000 and $(229,000) in 2019 and 2018, respectively. In 2018, there was a $(305,000) plan expense reversal associated with the resignation of a previously covered officer. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 11 — COMMITMENTS AND CONTINGENCIES The Corporation’s banking subsidiary currently leases three branch banking facilities and one parcel of land under operating leases. At December 31, 2019, right-of-use assets and lease liabilities were recorded related to these operating leases totaling $1,470,000 and $1,663,000, respectively. Further options to extend or terminate the lease are not applicable for any of the four leases. No significant assumptions or judgements were made in determining whether a contract contained a lease or in the consideration of lease versus non-lease components. None of the leases contained an implicit rate; therefore, our incremental borrowing rate was used for each of the leases. The Bank recognized total operating lease costs for the year ended December 31, 2019 of $257,000. Cash payments totaled $156,000. Rent expense for the year ended December 31, 2018 was $170,000. The following table displays the weighted-average term and discount rates for operating leases outstanding as of December 31, 2019. Operating Weighted-average term (years) 25.63 Weighted-average discount rate 3.85 % A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liability is as follows: (Dollars in thousands) December 31, 2019 Minimum Lease Payments due: Within one year $ 148 After one but within two years 106 After two but within three years 86 After three but within four years 68 After four but within five years 68 After five years 2,326 Total undiscounted cash flows 2,802 Discount on cash flows (1,139) Total lease liability $ 1,663 In the normal course of business, there are various pending legal actions and proceedings that are not reflected in the consolidated financial statements. Management does not believe the outcome of these actions and proceedings will have a material effect on the consolidated financial position of the Corporation. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2019 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 12 — RELATED PARTY TRANSACTIONS Certain directors, executive officers and immediate family members of First Keystone Corporation and its subsidiary, and companies in which they are principal owners (i.e., at least 10% ownership), were indebted to the Corporation at December 31, 2019 and 2018. The loans do not involve more than the normal risk of collectability nor present other unfavorable features. A summary of the activity on the related party loans consists of the following: (Dollars in thousands) 2019 2018 Balance at January 1 $ 19,948 $ 10,997 Additions 4,139 13,642 Deductions (7,847) (4,691) Balance at December 31, $ 16,240 $ 19,948 The summary of activity on the related party loans represent funds drawn and outstanding at the date of the consolidated financial statements. Commitments by the Bank to related parties on lines of credit and letters of credit for 2019 and 2018, presented an additional off-balance sheet risk to the extent of undisbursed funds in the amounts of $5,810,000 and $4,958,000 respectively, on the above loans. Deposits from certain officers, directors and immediate family members and/or their related companies held by the Bank amounted to $21,140,000 and $18,696,000 at December 31, 2019 and 2018, respectively. |
REGULATORY MATTERS
REGULATORY MATTERS | 12 Months Ended |
Dec. 31, 2019 | |
REGULATORY MATTERS | |
REGULATORY MATTERS | NOTE 13 — REGULATORY MATTERS Under Pennsylvania banking law, the Bank is subject to certain restrictions on the amount of dividends that it may declare without prior regulatory approval. At December 31, 2019, $9,506,000 of retained earnings were available for dividends without prior regulatory approval, subject to the regulatory capital requirements discussed below. Regulations also limit the amount of loans and advances from the Bank to the Corporation to 10% of consolidated net assets. The Corporation is 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 Corporation’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Corporation must meet specific capital guidelines that involve quantitative measures of the Corporation’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Corporation’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Management believes, as of December 31, 2019 and 2018, that the Corporation and the Bank met all capital adequacy requirements to which they are subject. On July 2, 2013, the Board of Governors of the Federal Reserve System finalized its rule implementing the Basel III regulatory capital framework, which the FDIC adopted on July 9, 2013. Under the rule, minimum requirements increased both the quantity and quality of capital held by banking organizations. Consistent with the Basel III framework, the rule included a new minimum ratio of common equity tier 1 capital to risk-weighted assets of 4.5 percent, and a common equity tier 1 conservation buffer of 2.5 percent of risk-weighted assets, that applies to all supervised financial institutions, which is to be phased in over a three year period beginning January 1, 2016, with the full 2.5 percent required as of January 1, 2019. The rule also raised the minimum ratio of tier 1 capital to risk-weighted assets from 4 percent to 6 percent, and includes a minimum leverage ratio of 4 percent for all banking organizations. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of total capital, tier I capital and common equity tier 1 capital (as defined in the regulations) to risk weighted assets (as defined), and of tier I capital (as defined) to average assets (as defined). As of December 31, 2019 the most recent notification from the Federal Deposit Insurance Corporation categorized the Bank as Well Capitalized under the regulatory framework for prompt corrective action. To be categorized as Well Capitalized, the Bank must maintain minimum total risk-based, tier I risk-based, common equity tier 1 risk-based and tier I leverage ratios as set forth in the table. There are no conditions or events since the notification that management believes have changed the Bank’s category. (Dollars in thousands) Minimum To Be Well Capital Capitalized For Capital Adequacy Under Prompt Adequacy with Capital Corrective Actual Purposes Buffer Action Provisions Amount Ratio Amount Ratio Amount Ratio Amount Ratio As of December 31, 2019: Total Capital (to Risk-Weighted Assets) $ 100,193 14.53 % $ 55,168 8.00 % $ 72,409 10.50 % $ 68,961 10.00 % Tier I Capital (to Risk-Weighted Assets) $ 93,063 13.50 % $ 41,376 6.00 % $ 58,617 8.50 % $ 55,168 8.00 % Common Equity Tier 1 Capital (to Risk-Weighted Assets) $ 93,063 13.50 % $ 31,032 4.50 % $ 48,272 7.00 % $ 44,824 6.50 % Tier I Capital (to Average Assets) $ 93,063 9.42 % $ 39,531 4.00 % $ 39,531 4.00 % $ 49,414 5.00 % (Dollars in thousands) Minimum To Be Well Capital Capitalized For Capital Adequacy Under Prompt Adequacy with Capital Corrective Actual Purposes Buffer Action Provisions Amount Ratio Amount Ratio Amount Ratio Amount Ratio As of December 31, 2018: Total Capital (to Risk-Weighted Assets) $ 96,065 13.87 % $ 55,395 8.00 % $ 68,378 9.88 % $ 69,243 10.00 % Tier I Capital (to Risk-Weighted Assets) $ 89,203 12.88 % $ 41,546 6.00 % $ 54,529 7.88 % $ 55,395 8.00 % Common Equity Tier 1 Capital (to Risk-Weighted Assets) $ 89,203 12.88 % $ 31,160 4.50 % $ 44,143 6.38 % $ 45,008 6.50 % Tier I Capital (to Average Assets) $ 89,203 9.01 % $ 39,616 4.00 % $ 39,616 4.00 % $ 49,521 5.00 % The capital conservation buffer phase-in began January 1, 2016. The capital conservation buffer increased from 1.875% in 2018 to 2.50% in 2019. The Corporation’s capital ratios are not materially different from those of the Bank. |
FINANCIAL INSTRUMENTS WITH OFF-
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK | 12 Months Ended |
Dec. 31, 2019 | |
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK | |
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK | NOTE 14 — FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK Financial Instruments with Off-Balance Sheet Risk The Corporation 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. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets. The contract or notional amounts of those instruments reflect the extent of involvement the Corporation has in particular classes of financial instruments. The Corporation does not engage in trading activities with respect to any of its financial instruments with off-balance sheet risk. The Corporation’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments. The Corporation uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. The Corporation may require collateral or other security to support financial instruments with off-balance sheet credit risk. The contract or notional amounts at December 31, 2019 and 2018 were as follows: (Dollars in thousands) 2019 2018 Financial instruments whose contract amounts represent credit risk: Commitments to extend credit $ 122,082 $ 107,126 Financial standby letters of credit $ 335 $ 331 Performance standby letters of credit $ 3,230 $ 3,107 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 that may require payment of a fee. Since some of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Corporation evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Corporation upon extension of credit, is based on management’s credit evaluation of the borrower. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, owner-occupied income-producing commercial properties, and residential real estate. Standby letters of credit are conditional commitments issued by the Corporation to guarantee payment to a third party when a customer either fails to repay an obligation or fails to perform some non-financial obligation. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Corporation may hold collateral (similar to the items held as collateral for commitments to extend credit) to support standby letters of credit for which collateral is deemed necessary. Financial Instruments with Concentrations of Credit Risk The Corporation originates primarily commercial and residential real estate loans to customers in northeastern Pennsylvania. The ability of the majority of the Corporation’s customers to honor their contractual loan obligations is dependent on the economy and real estate market in this area. At December 31, 2019, the Corporation had $555,151,000 in loans secured by real estate, which represented 85.7% of total loans. The real estate loan portfolio is largely secured by lessors of residential buildings and dwellings, lessors of non-residential buildings, and lessors of hotels/motels. As of December 31, 2019 and 2018, management is of the opinion that there were no concentrations exceeding 10% of total loans with regard to loans to borrowers who were engaged in similar activities that were similarly impacted by economic or other conditions. As all financial instruments are subject to some level of credit risk, the Corporation requires collateral and/or guarantees for all loans. Collateral may include, but is not limited to property, plant, and equipment, commercial and/or residential real estate property, land, and pledge of securities. In the event of a borrower’s default, the collateral supporting the loan may be seized in order to recoup losses associated with the loan. The Corporation also establishes an allowance for loan losses that constitutes the amount available to absorb losses within the loan portfolio that may exist due to deficiencies in collateral values. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2019 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE 15 — STOCKHOLDERS’ EQUITY The Corporation also offers to its shareholders a Dividend Reinvestment and Stock Purchase Plan. Participation in this plan by shareholders began in 2001. The plan provides First Keystone shareholders a convenient and economical way to purchase additional shares of common stock by reinvesting dividends. A plan participant can elect full dividend reinvestment or partial dividend reinvestment provided at least 25 shares are enrolled in the plan. In addition, plan participants may make additional voluntary cash purchases of common stock under the plan of not less than $100 per calendar quarter or more than $2,500 in any calendar quarter. Shares transferred under this Dividend Reinvestment and Stock Purchase Plan were 52,184 in 2019 and 45,371 in 2018. Remaining shares authorized in the plan were 524,864 as of December 31, 2019. Shares of First Keystone common stock are purchased for the plan either in the open market by an independent broker on behalf of the plan, directly from First Keystone as original issue shares, or through negotiated transactions. A combination of the previous methods could also occur. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2019 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 16 — FAIR VALUE MEASUREMENTS Fair value measurement and disclosure guidance defines fair value as the price that would be received to sell the asset or transfer the liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. This guidance provides additional information on determining when the volume and level of activity for the asset or liability has significantly decreased. The guidance also includes information on identifying circumstances when a transaction may not be considered orderly. Fair value measurement and disclosure guidance provides a list of factors that a reporting entity should evaluate to determine whether there has been a significant decrease in the volume and level of activity for the asset or liability in relation to normal market activity for the asset or liability. When the reporting entity concludes there has been a significant decrease in the volume and level of activity for the asset or liability, further analysis of the information from that market is needed and significant adjustments to the related prices may be necessary to estimate fair value in accordance with the fair value measurement and disclosure guidance. This guidance clarifies that when there has been a significant decrease in the volume and level of activity for the asset or liability, some transactions may not be orderly. In those situations, the entity must evaluate the weight of the evidence to determine whether the transaction is orderly. The guidance provides a list of circumstances that may indicate that a transaction is not orderly. A transaction price that is not associated with an orderly transaction is given little, if any, weight when estimating fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own belief about the assumptions market participants would use in pricing the asset or liability based upon the best information available in the circumstances. Fair value measurement and disclosure guidance establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: Level 1 Inputs : Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 Inputs : Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability; Level 3 Inputs: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth as follows. Financial Assets Measured at Fair Value on a Recurring Basis At December 31, 2019 and 2018, securities measured at fair value on a recurring basis and the valuation methods used are as follows: (Dollars in thousands) December 31, 2019 Level 1 Level 2 Level 3 Total Debt Securities Available-for-Sale: U.S. Treasury securities $ — $ 2,855 $ — $ 2,855 Obligations of U.S. Government Corporations and Agencies: Mortgaged-backed — 77,283 — 77,283 Other — 10,297 — 10,297 Other mortgage backed debt securities — 11,138 — 11,138 Obligations of state and political subdivisions — 120,376 — 120,376 Asset backed securities — 37,536 — 37,536 Corporate debt securities — 18,443 — 18,443 Total debt securities available-for-sale — 277,928 — 277,928 Marketable equity securities 1,933 — — 1,933 Total recurring fair value measurements $ 1,933 $ 277,928 $ — $ 279,861 (Dollars in thousands) December 31, 2018 Level 1 Level 2 Level 3 Total Debt Securities Available-for-Sale: U.S. Treasury securities $ — $ 5,295 $ — $ 5,295 Obligations of U.S. Government Corporations and Agencies: Mortgaged-backed — 64,876 — 64,876 Other — 18,243 — 18,243 Other mortgage backed debt securities — 4,749 — 4,749 Obligations of state and political subdivisions — 182,278 — 182,278 Asset backed securities — 14,370 — 14,370 Corporate debt securities — 26,243 — 26,243 Total debt securities available-for-sale — 316,054 — 316,054 Marketable equity securities 1,560 — — 1,560 Total recurring fair value measurements $ 1,560 $ 316,054 $ — $ 317,614 The estimated fair values of equity securities classified as Level 1 are derived from quoted market prices in active markets; these assets consist mainly of stocks held in other banks. The estimated fair values of all debt securities classified as Level 2 are obtained from nationally-recognized third-party pricing agencies. The estimated fair values are derived primarily from cash flow models, which include assumptions for interest rates, credit losses, and prepayment speeds. The significant inputs utilized in the cash flow models are based on market data obtained from sources independent of the Corporation (observable inputs), and are therefore classified as Level 2 within the fair value hierarchy. The Corporation does not have any Level 3 inputs for securities. There were no transfers between Level 1 and Level 2 during 2019 and 2018. Financial Assets Measured at Fair Value on a Nonrecurring Basis At December 31, 2019 and 2018, impaired loans measured at fair value on a nonrecurring basis and the valuation methods used are as follows: (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets at December 31, 2019 Impaired loans: Commercial Real Estate $ — $ — $ 6,218 $ 6,218 Residential Real Estate — — 221 221 Total impaired loans $ — $ — $ 6,439 $ 6,439 (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets at December 31, 2018 Impaired loans: Commercial Real Estate $ — $ — $ 6,400 $ 6,400 Residential Real Estate — — 81 81 Total impaired loans $ — $ — $ 6,481 $ 6,481 The Bank’s impaired loan valuation procedure for any loans greater than $250,000 requires an appraisal to be obtained and reviewed annually at year end. A quarterly collateral evaluation is performed which may include a site visit, property pictures and discussions with realtors and other similar business professionals to ascertain current values. For impaired loans less than $250,000 upon classification and annually at year end, the Bank completes a Certificate of Inspection, which includes an onsite inspection, insured values, tax assessed values, recent sales comparisons and a review of the previous evaluations. These assets are included as Level 3 fair values, based upon the lowest level that is significant to the fair value measurements. The fair value consists of the impaired loan balances less the valuation allowance and/or charge-offs. There were no transfers between valuation levels in 2019 and 2018. Nonfinancial Assets Measured at Fair Value on a Nonrecurring Basis At December 31, 2019 and 2018, foreclosed assets held for resale measured at fair value on a nonrecurring basis and the valuation methods used are as follows: (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets at December 31, 2019 Foreclosed assets held for resale: Commercial Real Estate $ — $ — $ 81 $ 81 Total foreclosed assets held for resale $ — $ — $ 81 $ 81 (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets at December 31, 2018 Foreclosed assets held for resale: Commercial Real Estate $ — $ — $ 856 $ 856 Total foreclosed assets held for resale $ — $ — $ 856 $ 856 The Corporation’s foreclosed asset valuation procedure requires an appraisal, which considers the sales prices of similar properties in the proximate vicinity, to be completed periodically with the exception of those cases in which the Bank has obtained a sales agreement. These assets are included as Level 3 fair values, based upon the lowest level that is significant to the fair value measurements. There were no transfers between valuation levels in 2019 and 2018. The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Corporation has utilized Level 3 inputs to determine the fair value: (Dollars in thousands) Quantitative Information about Level 3 Fair Value Measurements Fair Value Weighted December 31, 2019 Estimate Valuation Technique Unobservable Input Range Average Impaired loans $ 3,419 Appraisal of collateral 1,3 Appraisal adjustments 2 (10%) – (77%) (17%) Impaired loans $ 3,020 Discounted cash flow Discount rate (7%) – (8%) (7%) Foreclosed assets held for resale $ 81 Appraisal of collateral 1,3 Appraisal adjustments 2 (35%) – (35%) (35%) December 31, 2018 Impaired loans $ 3,346 Appraisal of collateral 1,3 Appraisal adjustments 2 (15%) – (82%) (18%) Impaired loans $ 3,135 Discounted cash flow Discount rate (6%) – (7%) (7%) Foreclosed assets held for resale $ 856 Appraisal of collateral 1,3 Appraisal adjustments 2 (16%) – (35%) (18%) 1 Fair value is generally determined through independent appraisals of the underlying collateral, as defined by Bank regulators. 2 Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses. The typical range of appraisal adjustments are presented as a percent of the appraisal value. 3 Includes qualitative adjustments by management and estimated liquidation expenses. Fair Value of Financial Instruments The estimated fair values, and related carrying amounts, of the Corporation’s financial instruments that are not recorded at fair value are as follows: Carrying Fair Value Measurements at December 31, 2019 (Dollars in thousands) Amount Level 1 Level 2 Level 3 Total FINANCIAL ASSETS: Cash and due from banks $ 10,251 $ 10,251 $ — $ — $ 10,251 Interest-bearing deposits in other banks 473 — 473 — 473 Time deposits with other banks 247 — 250 — 250 Restricted investment in bank stocks 4,224 — 4,224 — 4,224 Net loans 640,727 — — 655,301 655,301 Mortgage servicing rights 283 — — 283 283 Accrued interest receivable 3,405 — 3,405 — 3,405 FINANCIAL LIABILITIES: Demand, savings and other deposits 526,564 — 526,564 — 526,564 Time deposits — 235,134 — 235,134 Short-term borrowings 54,663 — 54,655 — 54,655 Long-term borrowings 55,000 — 55,809 — 55,809 Accrued interest payable 606 — 606 — 606 OFF-BALANCE SHEET FINANCIAL INSTRUMENTS — — — — — Carrying Fair Value Measurements at December 31, 2018 (Dollars in thousands) Amount Level 1 Level 2 Level 3 Total FINANCIAL ASSETS: Cash and due from banks $ 9,822 $ 9,822 $ — $ — $ 9,822 Interest-bearing deposits in other banks 1,128 — 1,128 — 1,128 Time deposits with other banks 1,482 — 1,469 — 1,469 Restricted investment in bank stocks 8,681 — 8,681 — 8,681 Net loans 599,647 — — 597,525 597,525 Mortgage servicing rights 316 — — 316 316 Accrued interest receivable 4,041 — 4,041 — 4,041 FINANCIAL LIABILITIES: Demand, savings and other deposits 474,261 — 474,261 — 474,261 Time deposits 197,292 — 195,136 — 195,136 Short-term borrowings 174,445 — 174,491 — 174,491 Long-term borrowings 45,000 — 45,077 — 45,077 Accrued interest payable 785 — 785 — 785 OFF-BALANCE SHEET FINANCIAL INSTRUMENTS — — — — — |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Dec. 31, 2019 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | NOTE 17 — REVENUE RECOGNITION As of January 1, 2018, the Corporation adopted ASU 2014‑09 Revenue from Contracts with Customers - Topic 606 and all subsequent ASUs that modified ASC 606. The Corporation has elected to apply the ASU and all related ASUs using the modified retrospective implementation method. The implementation of the guidance had no material impact on the measurement or recognition of revenue of prior periods, however, additional disclosures have been added in accordance with the ASU. The main types of revenue contracts included in non-interest income within the Consolidated Statements of Income which are subject to ASC 606 are as follows: Deposits related fees and service charges Service charges and fees on deposits, which are included as liabilities in the consolidated balance sheets, consist of fees related to monthly fees for various retail and business checking accounts, automated teller machine (“ATM”) fees (charged for withdrawals by our deposit customers from other bank ATMs) and insufficient funds fees (“NSF”) (which are charged when customers overdraw their accounts beyond available funds). All deposit liabilities are considered to have one-day terms and therefore related fees are recognized in income at the time when the services are provided to the customers. The Corporation elected to adopt practical expedient related to incremental costs of obtaining deposit contracts. As such, any costs associated with acquiring the deposits, except for certificate of deposits (“CDs”) with maturities in excess of one year, are recognized as an expense within the non-interest expense in the consolidated statements of income when incurred as the amortization period of the deposit liabilities that otherwise would have been recognized is one year or less. Wealth/Asset/Trust Management Fees Wealth management services are delivered to individuals, corporations and retirement funds located primarily within our geographic markets. The Trust Department of the Corporation conducts the wealth management operations, which provides a broad range of personal and corporate fiduciary services, including the administration of estates. Assets held in a fiduciary capacity by the Trust Department are not assets of the Corporation and, therefore, are not included in our Consolidated Financial Statements. Wealth management fees, which are contractually agreed with each customer, are earned each month and recognized on a cash basis based on average fair value of the trust assets under management. The services provided under such a contract are considered a single performance obligation under ASC 606 because they embody a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. Wealth management fees charged by the Trust Department follow a tiered structure based on the type and size of the assets under management. Wealth management fees are included within non-interest income in the consolidated statements of income. As of December 31, 2019 and December 31, 2018, the fair value of trust assets under management was $111,160,000 and $105,917,000, respectively. The costs of acquiring asset management customers are incremental and recognized within the non-interest expense of the consolidated statements of income. Interchange Fees and Surcharges Interchange fees are related to the acceptance and settlement of debit card transactions, both point-of-sale and ATM, to cover operating costs and risks associated with the approval and settlement of the transactions. Interchange fees vary by type of transaction and each merchant sector. Net income recognized from interchange fees is included in non-interest income on the consolidated statements of income. A surcharge is assessed for use of the Corporation’s ATMs by non-customers. All interchange fees and surcharges are recognized as received on a daily basis for the prior business day’s transactions. All expenses related to the settlement of debit card transactions (both point-of-sale and ATM) are recognized on a monthly basis and included in non-interest expense on the consolidated statements of income. |
PARENT COMPANY FINANCIAL INFORM
PARENT COMPANY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
PARENT COMPANY FINANCIAL INFORMATION | |
PARENT COMPANY FINANCIAL INFORMATION | NOTE 18 — PARENT COMPANY FINANCIAL INFORMATION Condensed financial information for First Keystone Corporation (parent company only) was as follows: BALANCE SHEETS December 31, (Dollars in thousands) 2019 2018 ASSETS Cash $ 10,993 $ 9,988 Investment in banking subsidiary 116,417 105,755 Marketable equity securities 1,933 1,560 Prepaid expenses and other assets 137 232 TOTAL ASSETS $ 129,480 $ 117,535 LIABILITIES Advances from banking subsidiary $ 381 $ 536 Accrued expenses and other liabilities 347 243 TOTAL LIABILITIES 728 779 STOCKHOLDERS’ EQUITY Common stock 12,097 11,993 Surplus 38,365 37,255 Retained earnings 79,778 75,798 Accumulated other comprehensive income (loss) 4,221 (2,581) Treasury stock, at cost (5,709) (5,709) TOTAL STOCKHOLDERS’ EQUITY 128,752 116,756 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 129,480 $ 117,535 STATEMENTS OF INCOME Years Ended December 31, (Dollars in thousands) 2019 2018 INCOME Dividends from subsidiary bank $ 6,102 $ 6,102 Net securities gains (losses) 373 (72) Other income 81 76 TOTAL INCOME 6,556 6,106 OPERATING EXPENSES 125 176 6,431 5,930 INCOME TAX EXPENSE (BENEFIT) 63 (41) 6,368 5,971 EQUITY IN UNDISTRIBUTED EARNINGS OF BANKING SUBSIDIARY 3,859 3,240 NET INCOME $ 10,227 $ 9,211 STATEMENTS OF COMPREHENSIVE INCOME Years Ended December 31, (Dollars in thousands) 2019 2018 Net Income $ 10,227 $ 9,211 Other comprehensive income (loss): Equity in other comprehensive income (loss) of banking subsidiary 6,802 (4,133) Total other comprehensive income (loss) 6,802 (4,133) Total Comprehensive Income $ 17,029 $ 5,078 STATEMENTS OF CASH FLOWS Years Ended December 31, (Dollars in thousands) 2019 2018 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 10,227 $ 9,211 Adjustments to reconcile net income to net cash provided by operating activities: (Gains) losses on securities (373) 72 Deferred income tax expense 104 5 Equity in undistributed earnings of banking subsidiary (3,859) (3,240) Decrease (increase) in prepaid/accrued expenses and other assets/liabilities 105 (214) (Decrease) increase in advances from banking subsidiary (155) 211 NET CASH PROVIDED BY OPERATING ACTIVITIES 6,049 6,045 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 1,203 1,153 Dividends paid (6,247) (6,194) NET CASH USED IN FINANCING ACTIVITIES (5,044) (5,041) INCREASE IN CASH AND CASH EQUIVALENTS 1,005 1,004 CASH AND CASH EQUIVALENTS, BEGINNING 9,988 8,984 CASH AND CASH EQUIVALENTS, ENDING $ 10,993 $ 9,988 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of First Keystone Corporation and its wholly-owned subsidiary, First Keystone Community Bank (the “Bank”). All significant inter-company balances and transactions have been eliminated in consolidation. |
Nature of Operations | Nature of Operations The Corporation, headquartered in Berwick, Pennsylvania, provides a full range of banking, trust and related services through its wholly-owned Bank subsidiary and is subject to competition from other financial institutions in connection with these services. The Bank serves a customer base which includes individuals, businesses, governments, and public and institutional customers primarily located in the Northeast Region of Pennsylvania. The Bank has 18 full service offices, one loan production office, and 20 Automated Teller Machines (“ATM”) located in Columbia, Luzerne, Montour, Monroe, and Northampton counties. The Corporation and its subsidiary must also adhere to certain federal and state banking laws and regulations and are subject to periodic examinations made by various state and federal agencies. |
Segment Reporting | Segment Reporting The Corporation’s subsidiary acts as an independent community financial services provider, and offers traditional banking and related financial services to individual, business, government, and public and institutional customers. Through its branch and ATM network, the Bank offers a full array of commercial and retail financial services, including the taking of time, savings and demand deposits; the making of commercial, consumer and mortgage loans; and the providing of other financial services. The Bank also performs personal, corporate, pension and fiduciary services through its Trust Department. Management does not separately allocate expenses, including the cost of funding loan demand, between the commercial, retail, trust and mortgage banking operations of the Corporation. As such, discrete financial information is not available and segment reporting would not be meaningful. |
Significant Concentrations of Credit Risk | Significant Concentrations of Credit Risk The majority of the Corporation’s activities involve customers located primarily in Columbia, Luzerne, Montour, Monroe, Northampton, and Lehigh counties in Pennsylvania. The types of securities in which the Corporation invests are presented in Note 3 – Securities. Credit risk as it relates to investment activities is moderated through the monitoring of ratings and geographic concentrations residing in the portfolio and the observance of minimum rating levels in the investment policy. Note 4 – Loans and Allowance for Loan Losses summarizes the types of lending in which the Corporation engages. The inherent risks associated with lending activities are mitigated by adhering to conservative underwriting practices and policies, as well as portfolio diversification and thorough monitoring of the loan portfolio. It is management’s opinion that the investment and loan portfolios were well balanced at December 31, 2019, to the extent necessary to avoid any significant concentrations of credit risk. |
Use of Estimates | Use of Estimates The preparation of these consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America, 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 these consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant changes include the determination of other-than-temporary impairment on securities and the determination of the allowance for loan losses. |
Subsequent Events | Subsequent Events The Corporation has evaluated events and transactions occurring subsequent to the consolidated balance sheet date of December 31, 2019, for items that should potentially be recognized or disclosed in the consolidated financial statements. The evaluation was conducted through the date these consolidated financial statements were issued. On February 25, 2020, the Board of Directors declared a dividend of $0.27 per share for the first quarter of 2020. The dividend is payable on March 31, 2020 to shareholders of record as of March 12, 2020. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of reporting consolidated cash flows, cash and cash equivalents include cash on hand and due from banks, interest-bearing deposits in other banks, and federal funds sold. The Corporation considers cash classified as interest-bearing deposits with other banks as a cash equivalent since they are represented by cash accounts essentially on a demand basis and mature within one year. Federal funds are also included as a cash equivalent because they are generally purchased and sold for one-day periods. |
Time Deposits with Other Banks | Time Deposits with Other Banks Time deposits with other banks consist of fully insured certificates of deposit in other banks with maturity dates between one and five years. |
Securities | Securities The Corporation classifies its securities as either “Held-to-Maturity” or “Available-for-Sale” at the time of purchase. Securities are accounted for on a trade date basis. Debt securities are classified as Held-to-Maturity when the Corporation has the ability and positive intent to hold the securities to maturity. Securities classified as Held-to-Maturity are carried at cost adjusted for amortization of premium and accretion of discount to maturity. Debt securities not classified as Held-to-Maturity are included in the Available-for-Sale category and are carried at fair value. The amount of any unrealized gain or loss, net of the effect of deferred income taxes, is reported as accumulated other comprehensive income (AOCI) in the consolidated balance sheets and consolidated statements of changes in stockholders’ equity. Management’s decision to sell Available-for-Sale securities is based on changes in economic conditions controlling the sources and applications of funds, terms, availability of and yield of alternative investments, interest rate risk and the need for liquidity. The cost of debt securities classified as Held-to-Maturity or Available-for-Sale is adjusted for amortization of premiums to the earliest call date and accretion of discounts to expected maturity. Such amortization and accretion, as well as interest and dividends, are included in interest and dividend income on investment securities. Realized gains and losses are included in net investment securities gains and losses. The cost of investment securities sold, redeemed or matured is based on the specific identification method. Beginning January 1, 2018, upon adoption of ASU 2016‑01, equity securities with readily determinable fair values are stated at fair value with realized and unrealized gains and losses reported in income. For periods prior to January 1, 2018, equity securities were classified as Available-for-Sale and stated at fair value with unrealized gains and losses reported as a separate component of AOCI, net of tax. Equity securities without readily determinable fair values are recorded at cost less impairment, if any. Management evaluates securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. Securities classified as Available-for-Sale or Held-to-Maturity are generally evaluated for OTTI under FASB ASC 320, Investments - Debt and Equity Securities . In determining OTTI under the FASB ASC 320 model, management considers many factors, including (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, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the entity has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time. When other-than-temporary impairment occurs on debt securities, the amount of the other-than-temporary impairment recognized in earnings depends on whether an entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss. If an entity intends to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, the other-than-temporary impairment shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If an entity does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis less any current-period loss, the other-than-temporary impairment shall be separated into the amount representing the credit loss and the amount related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss is determined based on the present value of cash flows expected to be collected, and the realized loss is recognized as impairment charges on securities on the consolidated statements of income. The amount of the total other-than-temporary impairment related to the other factors shall be recognized in other comprehensive income (loss), net of applicable taxes. The previous amortized cost basis less the other-than-temporary impairment recognized in earnings becomes the new amortized cost basis of the investment. The fair market value of the equity securities tends to fluctuate with the overall equity markets as well as the trends specific to each institution. The equity securities portfolio is reviewed in a similar manner as that of the debt securities with greater emphasis placed on the length of time the market value has been less than the carrying value and the financial sector outlook. The Corporation also reviews dividend payment activities, levels of non-performing assets and loan loss reserves. The starting point for the equity analysis is the length and severity of market value decline. The realized loss is recognized as impairment charges on securities on the consolidated statements of income. The previous cost basis less the other-than-temporary impairment recognized in earnings becomes the new cost basis of the investment. |
Restricted Investment in Bank Stocks | Restricted Investment in Bank Stocks The Bank owns restricted stock investments in the Federal Home Loan Bank of Pittsburgh (“FHLB-Pittsburgh”) and Atlantic Community Bankers Bank (“ACBB”). These investments do not have a readily determinable fair value because their ownership is restricted and they can be sold back only to the FHLB-Pittsburgh, ACBB or to another member institution. Therefore, these investments are carried at cost. At December 31, 2019, the Corporation held $4,189,000 in stock of FHLB-Pittsburgh and $35,000 in stock of ACBB. At December 31, 2018, the Corporation held $8,646,000 in stock of FHLB-Pittsburgh and $35,000 in stock of ACBB. Management evaluates the restricted investment in bank stocks for impairment on an annual basis. Management’s determination of whether these investments are impaired is based on management’s assessment of the ultimate recoverability of the cost of these investments rather than by recognizing temporary declines in value. The following factors were evaluated to determine the ultimate recoverability of the cost of the Corporation’s restricted investment in bank stocks; (i) the significance of the decline in net assets of the correspondent bank as compared to the capital stock amount for the correspondent bank and the length of time this situation has persisted; (ii) commitments by the correspondent bank to make payments required by law or regulation and the level of such payments in relation to the operating performance of the correspondent bank; (iii) the impact of legislative and regulatory changes on the institutions and, accordingly, on the customer base of the correspondent bank; and (iv) the liquidity position of the correspondent bank. Based on the analysis of these factors, management determined that no impairment charge was necessary related to the restricted investment in bank stocks during 2019 or 2018. |
Loans | Loans Net loans are stated at their outstanding recorded investment, net of deferred fees and costs, unearned income and the allowance for loan losses. Interest on loans is recognized as income over the term of each loan, generally, by the accrual method. Loan origination fees and certain direct loan origination costs have been deferred with the net amount amortized using the straight line method or the interest method over the contractual life of the related loans as an interest yield adjustment. Residential mortgage loans held for sale are carried at the lower of cost or market on an aggregate basis determined by independent pricing from appropriate federal or state agency investors. These loans are sold without recourse. Loans held for sale amounted to $2,292,000 at December 31, 2019 and $365,000 at December 31, 2018. As an addition to the commercial loans receivable portfolio, the Corporation may purchase the guaranteed portion of loans secured by the U.S. Government. The originating bank retains the unguaranteed portion of the loan. The loans are sponsored by one of the various government agencies including the U.S. Small Business Administration (SBA), United States Department of Agriculture (USDA), and the Farm Service Agency (FSA). Government Guaranteed Loans ("GGLs") carry no credit risk due to an unconditional and irrevocable guarantee on all principal and accrued interest, which is supported by the full faith and credit of the U.S. Government. As of December 31, 2019, the Corporation's balance of GGLs amounted to $6,150,000, compared to December 31, 2018, when the Corporation did not hold any GGLs in its loans receivable portfolio. The loans receivable portfolio is segmented into commercial, residential and consumer loans. Commercial loans consist of the following classes: Commercial and Industrial and Commercial Real Estate. Commercial and Industrial Lending The Corporation originates commercial and industrial loans primarily to businesses located in its primary market area and surrounding areas. These loans are used for various business purposes, which include short-term loans and lines of credit to finance machinery and equipment, inventory and accounts receivable. Generally, the maximum term for loans extended on machinery and equipment is based on the projected useful life of such machinery and equipment. Most business lines of credit are written on demand and are reviewed annually. Commercial and industrial loans are generally secured with short-term assets; however, in many cases, additional collateral such as real estate is provided as additional security for the loan. Loan-to-value maximum thresholds have been established by the Corporation and are specific to the type of collateral. Collateral values may be determined using invoices, inventory reports, accounts receivable aging reports, business financial statements, collateral appraisals, etc. Commercial and industrial loans are typically supported by personal guarantees of the borrower. In underwriting commercial and industrial loans, an analysis is performed to evaluate the borrower’s character and capacity to repay the loan, the adequacy of the borrower’s capital and collateral, as well as the conditions affecting the borrower. Evaluation of the borrower’s past, present and future cash flows is also an important aspect of the Corporation’s analysis of the borrower’s ability to repay. Commercial and industrial loans generally present a higher level of risk than other types of loans due primarily to the effect of general economic conditions. Commercial and industrial loans are typically made on the basis of the borrower’s ability to make repayment from cash flows from the borrower’s primary business activities. As a result, the availability of funds for the repayment of commercial and industrial loans is dependent on the success of the business itself, which in turn, is likely to be dependent upon the general economic environment. Commercial Real Estate Lending The Corporation engages in commercial real estate lending in its primary market area and surrounding areas. The Corporation’s commercial real estate portfolio is secured primarily by commercial retail space, commercial office buildings, residential housing and hotels. Generally, commercial real estate loans have terms that do not exceed twenty years, have loan-to-value ratios of up to eighty percent of the value of the collateral property, and are typically supported by personal guarantees of the borrowers. In underwriting these loans, the Corporation performs a thorough analysis of the financial condition of the borrower, the borrower’s credit history, and the reliability and predictability of the cash flow generated by the property securing the loan. The value of the property is determined by either independent appraisers or internal evaluations by Bank officers. Commercial real estate loans generally present a higher level of risk than residential real estate secured loans. Repayment of loans secured by commercial real estate is typically dependent upon the successful operation of the related real estate project and/or the effect of the general economic conditions on income producing properties. Residential Real Estate Lending (Including Home Equity) The Corporation’s residential real estate portfolio is comprised of one-to-four family residential mortgage loan originations, home equity term loans and home equity lines of credit. These loans are generated by the Corporation’s marketing efforts, its present customers, walk-in customers and referrals. These loans originate primarily within or with customers from the Corporation’s market area. The Corporation’s one-to-four family residential mortgage originations are secured primarily by properties located in its primary market area and surrounding areas. The Corporation offers fixed-rate mortgage loans with terms up to a maximum of thirty years for both permanent structures and those under construction. Loans with terms of thirty years are normally held for sale and sold without recourse; most of the residential mortgages held in the Corporation’s residential real estate portfolio have maximum terms of twenty years. Generally, the majority of the Corporation’s residential mortgage loans originate with a loan-to-value of eighty percent or less, or those with primary mortgage insurance at ninety-five percent or less. Home equity term loans are secured by the borrower’s primary residence and typically have a maximum loan-to-value of eighty percent and a maximum term of fifteen years. In general, home equity lines of credit are secured by the borrower’s primary residence with a maximum loan-to-value of eighty percent and a maximum term of twenty years. In underwriting one-to-four family residential mortgage loans, the Corporation evaluates the borrower’s ability to make monthly payments, the borrower’s repayment history and the value of the property securing the loan. The ability and willingness to repay is assessed based upon the borrower’s employment history, current financial conditions and credit background. A majority of the properties securing residential real estate loans made by the Corporation are appraised by independent appraisers. The Corporation generally requires mortgage loan borrowers to obtain an attorney’s title opinion or title insurance and fire and property insurance, including flood insurance, if applicable. Residential mortgage loans, home equity term loans and home equity lines of credit generally present a lower level of risk than consumer loans because they are secured by the borrower’s primary residence. Risk is increased when the Corporation is in a subordinate position, especially to another lender, for the loan collateral. Consumer Lending The Corporation offers a variety of secured and unsecured consumer loans, including vehicle loans, stock loans and loans secured by financial institution deposits. These loans originate primarily within or with customers from the market area. Consumer loan terms vary according to the type and value of collateral and creditworthiness of the borrower. In underwriting personal loans, a thorough analysis is performed regarding the borrower’s willingness and financial ability to repay the loan as agreed. The ability and willingness to repay is assessed based upon the borrower’s employment history, current financial condition and credit background. Consumer loans may entail greater credit risk than residential real estate loans, particularly in the case of personal loans which are unsecured or are secured by rapidly depreciable assets, such as automobiles or recreational equipment. In such cases, repossessed collateral for a defaulted personal loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation. In addition, personal loan collections are dependent on the borrower’s continuing financial stability and therefore, are more likely to be affected by adverse personal circumstances. Furthermore, the application of various federal and state laws, including bankruptcy and insolvency laws, may limit the amount which can be recovered on such loans. |
Delinquent Loans | Delinquent Loans Generally, a loan is considered to be past-due when scheduled loan payments are in arrears 10 days or more. Delinquent notices are generated automatically when a loan is 10 or 15 days past-due, depending on loan type. Collection efforts continue on past-due loans that have not been brought current, when it is believed that some chance exists for improvement in the status of the loan. Past-due loans are continually evaluated with the determination for charge-off being made when no reasonable chance remains that the status of the loan can be improved. Commercial and Industrial and Commercial Real Estate loans are charged off in whole or in part when they become sufficiently delinquent based upon the terms of the underlying loan contract and when a collateral deficiency exists. Because all or part of the contractual cash flows are not expected to be collected, the loan is considered to be impaired, and the Bank estimates the impairment based on its analysis of the cash flows or collateral estimated at fair value less cost to sell. Should a Government Guaranteed Loan default, demand is made to the originating bank for repurchase of the loan. If the originating bank does not repurchase the loan, demand for repurchase is then made to the appropriate government agency which has provided the guarantee for the loan. Residential Real Estate and Consumer loans are charged off when they become sufficiently delinquent based upon the terms of the underlying loan contract and when the value of the underlying collateral is not sufficient to support the loan balance and a loss is expected. At that time, the amount of estimated collateral deficiency, if any, is charged off for loans secured by collateral, and all other loans are charged off in full. Loans with collateral are charged down to the estimated fair value of the collateral less cost to sell. Existing loans in which the borrower has declared bankruptcy are considered on a case by case basis to determine whether repayment is likely to occur (eg. reaffirmation by the borrower with demonstrated repayment ability). Otherwise, loans are charged off in full or written down to the estimated fair value of collateral less cost to sell. Generally, a loan is classified as non-accrual and the accrual of interest on such a loan is discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest, even though the loan may currently be performing. A loan may remain on accrual status if it is well secured (or supported by a strong guarantee) and in the process of collection. When a loan is placed on non-accrual status, unpaid interest credited to income in the current year is reversed and unpaid interest accrued in prior years is charged against interest income. Certain non-accrual loans may continue to perform; that is, payments are still being received. Generally, the payments are applied to principal. These loans remain under constant scrutiny, and if performance continues, interest income may be recorded on a cash basis based on management’s judgment as to collectability of principal. |
Allowance for Loan Losses | Allowance for Loan Losses The allowance for loan losses is established through provisions for loan losses charged against income. Loans deemed to be uncollectible are charged against the allowance for loan losses and subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is maintained at a level estimated by management to be adequate to absorb potential loan losses. Management’s periodic evaluation of the adequacy of the allowance for loan losses is based on the Corporation’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay (including the timing of future payments), the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions, and other relevant factors. This evaluation is inherently subjective as it requires material estimates including the amounts and timing of future cash flows expected to be received on impaired loans that may be susceptible to significant change. The allowance consists of specific, general and unallocated components. The specific component relates to loans that are individually classified as impaired. Select loans are not aggregated for collective impairment evaluation, as such; all loans are subject to individual impairment evaluation should the facts and circumstances pertinent to a particular loan suggest that such evaluation is necessary. Factors considered by management in determining impairment include payment status and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. If a loan is impaired, a portion of the allowance may be allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from collateral. Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered to be a collateral dependent loan, the loan may be reported, net, at the fair value of the collateral. For troubled debt restructurings that subsequently default, the Corporation determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses. The general component covers all other loans not identified as impaired (aside from Government Guaranteed Loans, which do not require an allowance) and is based on historical losses and qualitative factors. The historical loss component of the allowance is determined by losses recognized by portfolio segment over a time period that management has determined represents the current credit cycle. Qualitative factors impacting each portfolio segment may include: delinquency trends, loan volume trends, Bank policy changes, management processes and oversight, economic trends (including change in consumer and business disposable incomes, unemployment and under-employment levels, and other conditions), concentrations by industry or product, internal and external loan review processes, collateral value and market conditions, and external factors including regulatory issues and competition. Government Guaranteed Loans do not require an associated allowance for loan losses due to the underlying irrevocable and unconditional guarantee, which is supported by the full faith and credit of the U.S. Government. Should a GGL default, the loan will be repurchased by the originating bank or the appropriate government agency that has provided the guarantee for the loan. The unallocated component of the allowance is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. A reserve for unfunded lending commitments is provided for possible credit losses on off-balance sheet credit exposures. The reserve for unfunded lending commitments represents management’s estimate of losses inherent in its unfunded loan commitments and, if necessary, is recorded in other liabilities on the consolidated balance sheets. As of December 31, 2019 and 2018 the amount of the reserve for unfunded lending commitments was $125,000 and $117,000, respectively. The Corporation is subject to periodic examination by its federal and state examiners, and may be required by such regulators to recognize additions to the allowance for loan losses based on their assessment of credit information available to them at the time of their examinations. A loan is considered impaired when, based on current information and events, it is probable that the Corporation will be unable to collect all amounts due according to the contractual terms of the original loan agreement. Under current accounting standards, the allowance for loan losses related to impaired loans is based on discounted cash flows using the loan’s effective interest rate at inception or the fair value of the collateral for certain collateral dependent loans. The restructuring of a loan is considered a “troubled debt restructuring” if both the following conditions are met: (i) the borrower is experiencing financial difficulties, and (ii) the Corporation has granted a concession. The most common concessions granted include one or more modifications to the terms of the debt, such as (a) a reduction in the interest rate for the remaining life of the debt, (b) an extension of the maturity date at an interest rate lower than the current market rate for new debt with similar risk, (c) a temporary period of interest-only payments, and (d) a reduction in the contractual payment amount for either a short period or remaining term of the loan. A less common concession is the forgiveness of a portion of the principal. The determination of whether a borrower is experiencing financial difficulties takes into account not only the current financial condition of the borrower, but also the potential financial condition of the borrower were a concession not granted. Similarly, the determination of whether a concession has been granted is very subjective in nature. For example, simply extending the term of a loan at its original interest rate or even at a higher interest rate could be interpreted as a concession unless the borrower could readily obtain similar credit terms from a different lender. Loans modified in a troubled debt restructuring are considered impaired and may or may not be placed on non-accrual status until the Corporation determines the future collection of principal and interest is reasonably assured, which generally requires that the borrower demonstrates a period of performance according to the restructured terms of six months. The Corporation utilizes a risk grading matrix as a tool for managing credit risk in the loan portfolio and assigns an asset quality rating (risk grade) to all Commercial and Industrial, Commercial Real Estate, Residential Real Estate and Consumer borrowings. An asset quality rating is assigned using the guidance provided in the Corporation’s loan policy. Primary responsibility for assigning the asset quality rating rests with the credit department. The asset quality rating is validated periodically by both an internal and external loan review process. The commercial loan grading system focuses on a borrower’s financial strength and performance, experience and depth of management, primary and secondary sources of repayment, the nature of the business and the outlook for the particular industry. Primary emphasis is placed on financial condition and trends. The grade also reflects current economic and industry conditions; as well as other variables such as liquidity, cash flow, revenue/earnings trends, management strengths or weaknesses, quality of financial information, and credit history. The loan grading system for Residential Real Estate and Consumer loans focuses on the borrower’s credit score and credit history, debt-to-income ratio and income sources, collateral position and loan-to-value ratio. Risk grade characteristics are as follows: Risk Grade 1 – MINIMAL RISK through Risk Grade 6 – MANAGEMENT ATTENTION (Pass Grade Categories) Risk is evaluated via examination of several attributes including but not limited to financial trends, strengths and weaknesses, likelihood of repayment when considering both cash flow and collateral, sources of repayment, leverage position, management expertise, and repayment history. At the low-risk end of the rating scale, a risk grade of 1 - Minimal Risk is the grade reserved for loans with exceptional credit fundamentals and virtually no risk of default or loss. Loan grades then progress through escalating ratings of 2 through 6 based upon risk. Risk Grade 2 - Modest Risk are loans with sufficient cash flows; Risk Grade 3 - Average Risk are loans with key balance sheet ratios slightly above the borrower’s peers; Risk Grade 4 - Acceptable Risk are loans with key balance sheet ratios usually near the borrower’s peers, but one or more ratios may be higher; and Risk Grade 5 – Marginally Acceptable are loans with strained cash flow, increasing leverage and/or weakening markets. Risk Grade 6 - Management Attention are loans with weaknesses resulting from declining performance trends and the borrower’s cash flows may be temporarily strained. Loans in this category are performing according to terms, but present some type of potential concern. Risk Grade 7 − SPECIAL MENTION (Non-Pass Category) Generally, these loans or assets are currently protected, but are “potentially weak.” They constitute an undue and unwarranted credit risk but not to the point of justifying a classification of substandard. Assets in this category are currently protected but have potential weakness which may, if not checked or corrected, weaken the asset or inadequately protect the Corporation’s credit position at some future date. No loss of principal or interest is envisioned; however, they constitute an undue credit risk that may be minor but is unwarranted in light of the circumstances surrounding a specific asset. Risk is increasing beyond that at which the loan originally would have been granted. Historically, cash flows are inconsistent; financial trends show some deterioration. Liquidity and leverage are above industry averages. Financial information could be incomplete or inadequate. A Special Mention asset has potential weaknesses that deserve management’s close attention. Risk Grade 8 − SUBSTANDARD (Non-Pass Category) Generally, these assets are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have “well-defined” weaknesses that jeopardize the full liquidation of the debt. These loans are characterized by the distinct possibility that the Corporation will sustain some loss if the aggregate amount of substandard assets is not fully covered by the liquidation of the collateral used as security. Substandard loans have a high probability of payment default and require more intensive supervision by Corporation management. Risk Grade 9 − DOUBTFUL (Non-Pass Category) Generally, loans graded doubtful have all the weaknesses inherent in a substandard loan with the added factor that the weaknesses are pronounced to a point whereby the basis of current information, conditions, and values, collection or liquidation in full is deemed to be highly improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors that may work to strengthen the asset, its classification is deferred until, for example, a proposed merger, acquisition, liquidation procedure, capital injection, perfection of liens on additional collateral and/or refinancing plan is completed. Loans are graded doubtful if they contain weaknesses so serious that collection or liquidation in full is questionable. |
Premises and Equipment | Premises and Equipment Premises, improvements, and equipment are stated at cost less accumulated depreciation computed principally utilizing the straight-line method over the estimated useful lives of the assets. Long-lived assets are reviewed for impairment whenever events or changes in business circumstances indicate that the carrying value may not be recovered. Maintenance and minor repairs are charged to operations as incurred. The cost and accumulated depreciation of the premises and equipment retired or sold are eliminated from the property accounts at the time of retirement or sale, and the resulting gain or loss is reflected in current operations. |
Mortgage Servicing Rights | Mortgage Servicing Rights The Corporation originates and sells real estate loans to investors in the secondary mortgage market. After the sale, the Corporation may retain the right to service these loans. The mortgage loans sold and serviced for others are not included in the consolidated balance sheets. The unpaid principal balances of mortgage loans serviced for others were $94,998,000 and $97,201,000 at December 31, 2019 and 2018, respectively. When originated mortgage loans are sold and servicing is retained, a servicing asset is capitalized based on relative fair value at the date of the sale. Servicing assets are amortized as an offset to other fees in proportion to, and over the period of, estimated net servicing income. The servicing asset is included in other assets in the consolidated balance sheets and amounted to $283,000 at December 31, 2019 and $316,000 at December 31, 2018. The amount of servicing income earned was $241,000 and $247,000 at December 31, 2019 and 2018, respectively. Amortization recognized in relation to mortgage servicing rights was $112,000 and $129,000 at December 31, 2019 and 2018, respectively. Both income and amortization are included in service charges and fees on the consolidated statements of income. Gains or losses on sales of mortgage loans are recognized based on the differences between the selling price and the carrying value of the related mortgage loans sold. |
Bank Owned Life Insurance | Bank Owned Life Insurance The cash surrender value of bank owned life insurance is carried as an asset, and changes in cash surrender value are recorded as non-interest income. The Corporation entered into agreements to provide post-retirement benefits to two retired employees in the form of life insurance payable to the employee’s beneficiaries upon their death through endorsement split dollar life insurance arrangements. The Corporation’s accrued liabilities for this benefit agreement as of December 31, 2019 and 2018 was $38,000 and $40,000, respectively. The related expense for this benefit agreement amounted to $(2,000) and $(1,000) for the years ended December 31, 2019 and 2018, respectively. |
Investments in Low-Income Housing Partnerships | Investments in Low-Income Housing Partnerships The Corporation is a limited partner in real estate ventures that own and operate affordable residential low-income housing apartment buildings for elderly and mentally challenged adult residents. The investments are accounted for under the cost method. Under the cost method, the Corporation recognizes tax credits as they are allocated and amortizes the initial cost of the investment over the period that the tax credits are allocated to the Corporation. The amount of tax credits allocated to the Corporation were $405,000 in 2019 and 2018, and the amortization of the investments in the limited partnerships were $353,000 and $530,000 in 2019 and 2018, respectively. During 2015, the Corporation became a limited partner in a real estate venture with an initial investment of $590,000, additional capital contributions of $1,430,000 made in 2016 and 2017 and a final capital contribution of $85,000 made in 2019. The construction was completed and the property was occupied in 2017. |
Goodwill | Goodwill Goodwill resulted from the acquisition of the Pocono Community Bank in November 2007 and of certain fixed and operating assets acquired and deposit liabilities assumed of the branch of another financial institution in Danville, Pennsylvania, in January 2004. Such goodwill represents the excess cost of the acquired assets relative to the assets fair value at the dates of acquisition. During the first quarter of 2008, $152,000 of liabilities related to the Pocono acquisition were recorded as a purchase accounting adjustment resulting in an increase in the excess purchase price. The amount was comprised of the finalization of severance agreements and contract terminations related to the acquisition. In accordance with current accounting standards, goodwill is not amortized. Management performs an annual evaluation for impairment. Any impairment of goodwill results in a charge to income. The Corporation periodically assesses whether events or changes in circumstances indicate that the carrying amounts of goodwill and other intangible assets may be impaired. Goodwill is evaluated for impairment at the reporting unit level and an impairment loss is recorded to the extent that the carrying amount of goodwill exceeds its implied fair value. The Corporation has evaluated the goodwill included in its consolidated balance sheet at December 31, 2019, and has determined there was no impairment as of that date. In addition, the Corporation did not identify any impairment in 2018. No assurance can be given that future impairment tests will not result in a charge to earnings. |
Foreclosed Assets Held for Resale | Foreclosed Assets Held for Resale Real estate properties acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less cost to sell on the date of foreclosure, establishing a new cost basis. After foreclosure, valuations are periodically performed and if fair value less cost to sell declines subsequent to foreclosure, a valuation allowance is recorded through expense. Revenues derived from and costs to maintain the assets and subsequent gains and losses on sales are included in non-interest expense on the consolidated statements of income. |
Income Taxes | Income Taxes The Corporation accounts for income taxes in accordance with income tax accounting guidance FASB ASC Topic 740, Income Taxes. Current income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Corporation determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are reduced by a valuation allowance if, based on the weight of the evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Corporation accounts for uncertain tax positions if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more-likely-than-not means a likelihood of more than 50%; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment. The Corporation recognizes interest and penalties on income taxes, if any, as a component of income tax expense. |
Earnings Per Share | Earnings Per Share Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Corporation. At December 31, 2019 and 2018, there were no potential common shares outstanding. The following table sets forth the computation of basic and diluted earnings per share. Year Ended December 31, (In thousands, except earnings per share) 2019 2018 Net income $ 10,227 $ 9,211 Weighted-average common shares outstanding 5,784 5,737 Basic and diluted earnings per share $ 1.77 $ 1.60 |
Treasury Stock | Treasury Stock The purchase of the Corporation’s common stock is recorded at cost. At the date of subsequent reissue, the treasury stock account is reduced by the cost of such stock on a first-in-first-out basis. |
Trust Assets And Revenues | Trust Assets and Revenues Property held by the Corporation in a fiduciary or agency capacity for its customers is not included in the accompanying consolidated financial statements since such items are not assets of the Corporation. Assets held in Trust were $111,160,000 and $105,917,000 at December 31, 2019 and 2018, respectively. Trust Department income is generally recognized on a cash basis and is not materially different than if it were reported on an accrual basis. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) The Corporation is required to present accumulated other comprehensive income (loss) in a full set of general-purpose financial statements for all periods presented. Accumulated other comprehensive income (loss) is comprised of net unrealized holding gains (losses) on the debt securities available-for-sale portfolio. The Corporation has elected to report these effects on the consolidated statements of comprehensive income. |
Advertising Costs | Advertising Costs It is the Corporation’s policy to expense advertising costs in the period in which they are incurred. |
Recent Accounting Standards Updates ("ASU") - Adopted: | Recent Accounting Standards Updates (“ASU”) – Adopted: Except as disclosed below, there were no new accounting pronouncements affecting the Corporation during the year ended December 31, 2019 that were not already adopted by the Corporation in previous periods. Recently adopted ASUs: On January 1, 2019, the Corporation adopted ASU 2016-02, Leases (Topic 842), and all subsequent amendments to the ASU, which required that lease assets and liabilities arising from operating leases be recognized on the balance sheet. As part of the adoption of ASU 2016-02, the Corporation elected to adopt a practical expedient for all underlying assets not to separate nonlease components from lease components and instead to account for each separate component as a single lease component. The Corporation also elected to adopt the transition relief provisions from ASU 2018-11, Leases (Topic 842) –Targeted Improvements , and recorded the impact of adoption as of January 1, 2019, without restating any prior-year amounts or disclosures. Adoption of ASU 2016-02 resulted in the recognition of right-of-use assets and lease liabilities for operating leases of $1,465,000 and $1,556,000, respectively, on its consolidated balance sheet as of January 1, 2019, with no adjustment to stockholders’ equity and no material impact to its consolidated statements of income. As of December 31, 2019, the Corporation has recorded right-of-use assets and lease liabilities for operating leases of $1,470,000 and $1,663,000, respectively, on its consolidated balance sheet. In March 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-08, Receivables- Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities . The ASU shortens the amortization period for certain callable debt securities held at a premium, and requires that the premiums be amortized to the earliest call date. ASU 2017-08 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2018. The Corporation was already accounting for callable debt securities in this manner, and the adoption of this standard had no material impact on the consolidated financial statements and related disclosures. Pending ASUs: In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments. ASU No. 2016-13 requires financial assets measured at amortized cost to be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2019. In November 2019, the FASB issued ASU 2019-10, Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), to delay the effective date for smaller reporting companies to fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. While the Corporation (a smaller reporting company) is currently evaluating the provisions of ASU 2016-13 to determine the potential impact of the new standard will have on the Corporation’s consolidated financial statements, it has taken steps to prepare for the implementation when it becomes effective, such as: forming an internal committee, gathering pertinent data, consulting with outside professionals, subscribing to a new software system, and running existing and new methodologies concurrently through the period of implementation. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350) : Simplifying the Test for Goodwill Impairment. The ASU simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Instead, under the amendments, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value with its carrying amount. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount when measuring the goodwill impairment loss, if applicable. The update also eliminated the requirements for zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. The amendments are effective for public business entities for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The adoption of this update is not expected to have a material impact on the Corporation’s consolidated financial position or results of operations. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to Disclosure Requirements for Fair Value Measurement . The amendments in this Update removed required disclosures regarding as follows: 1. The amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, 2. The policy for timing of transfers between levels, 3. The valuation processes for Level 3 fair value measurements, and 4. The Update modified the disclosure requirements on fair value measurements in Topic 820: a) The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and b) The range and weighted average significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years beginning after December 15, 2019. The Corporation is assessing the impact that this guidance will have on its consolidated financial statements and related disclosures. |
Transfer of Financial Assets | Transfer of Financial Assets Transfers of financial assets are accounted for as sales when control over assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Corporation, (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 Corporation does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. |
Off-Balance Sheet Financial Instruments | Off-Balance Sheet Financial Instruments In the ordinary course of business, the Corporation has entered into off-balance sheet financial instruments consisting of commitments to extend credit and letters of credit. Such financial instruments are recorded in the consolidated balance sheets when they are funded. |
Reclassifications | Reclassifications Certain amounts previously reported have been reclassified, when necessary, to conform with presentations used in the 2019 consolidated financial statements. Such reclassifications have no effect on the Corporation’s net income. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted earnings per share. Year Ended December 31, (In thousands, except earnings per share) 2019 2018 Net income $ 10,227 $ 9,211 Weighted-average common shares outstanding 5,784 5,737 Basic and diluted earnings per share $ 1.77 $ 1.60 |
SECURITIES (Tables)
SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SECURITIES | |
Schedule of amortized cost, related estimated fair value, and unrealized gains and losses for debt securities classified as "Available-For-Sale" | The amortized cost, related estimated fair value, and unrealized gains and losses for debt securities classified as “available-for-sale” were as follows at December 31, 2019 and 2018: Debt Securities Available-for-Sale Gross Gross (Dollars in thousands) Amortized Unrealized Unrealized Fair December 31, 2019: Cost Gains Losses Value U.S. Treasury securities $ 2,852 $ 3 $ ― $ 2,855 Obligations of U.S. Government Corporations and Agencies: Mortgage-backed 77,131 539 (387) 77,283 Other 10,381 4 (88) 10,297 Other mortgage backed securities 11,145 3 (10) 11,138 Obligations of state and political subdivisions 114,934 5,490 (48) 120,376 Asset backed securities 37,596 115 (175) 37,536 Corporate debt securities 18,546 182 (285) 18,443 Total $ 272,585 $ 6,336 $ (993) $ 277,928 Debt Securities Available-for-Sale Gross Gross (Dollars in thousands) Amortized Unrealized Unrealized Fair December 31, 2018: Cost Gains Losses Value U.S. Treasury securities $ 5,307 $ — $ (12) $ 5,295 Obligations of U.S. Government Corporations and Agencies: Mortgage-backed 66,300 105 (1,529) 64,876 Other 18,706 21 (484) 18,243 Other mortgage backed securities 4,767 — (18) 4,749 Obligations of state and political subdivisions 182,621 1,678 (2,021) 182,278 Asset backed securities 14,323 47 — 14,370 Corporate debt securities 27,297 24 (1,078) 26,243 Total $ 319,321 $ 1,875 $ (5,142) $ 316,054 |
Schedule of amortized cost and estimated fair value of debt securities, by contractual maturity | The amortized cost and fair value of securities, by contractual maturity, are shown below at December 31, 2019. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Available-for-Sale Amortized (Dollars in thousands) Cost Fair Value 1 year or less $ 3,853 $ 3,863 Over 1 year through 5 years 36,653 36,933 Over 5 years through 10 years 45,794 46,653 Over 10 years 98,009 102,058 Mortgage-backed securities 88,276 88,421 Total $ 272,585 $ 277,928 |
Schedule of unrealized and realized gains and losses recognized in net income on equity securities | The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during 2019 and 2018: (Dollars in thousands) December 31, 2019 December 31, 2018 Net gains and (losses) recognized during the period on equity securities $ 373 $ (72) Less: Net gains and (losses) recognized during the period on equity securities sold during the period — — Net gains and (losses) recognized during the reporting period on equity securities still held at the reporting date $ 373 $ (72) |
Schedule of gross unrealized losses and fair value of the corporation's debt securities | The summary below shows the gross unrealized losses and fair value of the Corporation’s debt securities, aggregated by investment category, of which individual securities have been in a continuous unrealized loss position for less than 12 months or 12 months or more as of December 31, 2019 and 2018: Less Than 12 Months 12 Months or More Total December 31, 2019 Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) Value Loss Value Loss Value Loss Available-for-Sale: U.S. Treasury securities $ — $ — $ — $ — $ — $ — Obligations of U.S. Government Corporations and Agencies: Mortgage-backed 39,085 (221) 12,650 (166) 51,735 (387) Other 4,382 (24) 4,594 (64) 8,976 (88) Other mortgage backed debt securities 4,056 (10) — — 4,056 (10) Obligations of state and political subdivisions 1,993 (15) 1,081 (33) 3,074 (48) Asset backed securities 19,236 (175) — — 19,236 (175) Corporate debt securities 3,484 (16) 7,231 (269) 10,715 (285) Total $ 72,236 $ (461) $ 25,556 $ (532) $ 97,792 $ (993) Less Than 12 Months 12 Months or More Total December 31, 2018 Fair Unrealized Fair Unrealized Fair Unrealized (Dollars in thousands) Value Loss Value Loss Value Loss Available-for-Sale: U.S. Treasury securities $ 5,295 $ (12) $ — $ — $ 5,295 $ (12) Obligations of U.S. Government Corporations and Agencies: Mortgage-backed 3,690 (17) 55,443 (1,512) 59,133 (1,529) Other 7,553 (66) 7,067 (418) 14,620 (484) Other mortgage backed debt securities 4,749 (18) — — 4,749 (18) Obligations of state and political subdivisions 14,453 (75) 66,583 (1,946) 81,036 (2,021) Asset backed securities — — — — — — Corporate debt securities 1,823 (29) 19,477 (1,049) 21,300 (1,078) Total $ 37,563 $ (217) $ 148,570 $ (4,925) $ 186,133 $ (5,142) |
LOANS AND ALLOWANCE FOR LOAN _2
LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
LOANS AND ALLOWANCE FOR LOAN LOSSES | |
Schedule of classes of the loan portfolio summarized by risk rating | The following table presents the classes of the loan portfolio summarized by risk rating as of December 31, 2019 and 2018: Commercial and Industrial Commercial Real Estate (Dollars in thousands) 2019 2018 2019 2018 Grade: 1-6 Pass $ 84,999 $ 90,835 $ 382,510 $ 329,126 7 Special Mention 2 6 944 5,249 8 Substandard 1,068 1,219 11,590 13,403 9 Doubtful — — ― — Add (deduct): Unearned discount and — — ― — Net deferred loan fees and costs 643 160 757 698 Total loans $ 86,712 $ 92,220 $ 395,801 $ 348,476 Residential Real Estate Including Home Equity Consumer 2019 2018 2019 2018 Grade: 1-6 Pass $ 158,301 $ 158,755 $ 5,662 $ 5,854 7 Special Mention 117 121 83 1 8 Substandard 1,048 941 35 9 9 Doubtful — — — — Add (deduct): Unearned discount and — — — — Net deferred loan fees and costs (116) (76) 89 91 Total loans $ 159,350 $ 159,741 $ 5,869 $ 5,955 Total Loans 2019 2018 Grade: 1-6 Pass $ 631,472 $ 584,570 7 Special Mention 1,146 5,377 8 Substandard 13,741 15,572 9 Doubtful — — Add (deduct): Unearned discount and — — Net deferred loan fees and costs 1,373 873 Total loans $ 647,732 $ 606,392 |
Schedule of the allowance for loan losses, by loan class | The activity in the allowance for loan losses, by loan class, is summarized below for the years indicated. Commercial Commercial Residential (Dollars in thousands) and Industrial Real Estate Real Estate Consumer Unallocated Total 2019 Allowance for Loan Losses: Beginning balance $ 724 $ 3,700 $ 1,650 $ 117 $ 554 $ 6,745 Charge-offs ― (64) (69) (71) — (204) Recoveries 6 ― 2 6 — 14 Provision (96) 480 82 62 (78) 450 Ending Balance $ 634 $ 4,116 $ 1,665 $ 114 $ 476 $ 7,005 Ending balance: individually evaluated for impairment $ — $ 1 $ — $ — $ — $ 1 Ending balance: collectively evaluated for impairment $ 634 $ 4,115 $ 1,665 $ 114 $ 476 $ 7,004 Loans Receivable: Ending Balance $ 86,712 $ 395,801 $ 159,350 $ 5,869 $ — $ 647,732 Ending balance: individually evaluated for impairment $ 1,084 $ 11,158 $ 712 $ — $ — $ 12,954 Ending balance: collectively evaluated for impairment $ 85,628 $ 384,643 $ 158,638 $ 5,869 $ — $ 634,778 Commercial Commercial Residential (Dollars in thousands) and Industrial Real Estate Real Estate Consumer Unallocated Total 2018 Allowance for Loan Losses: Beginning balance $ 949 $ 4,067 $ 1,656 $ 111 $ 704 $ 7,487 Charge-offs (18) (783) (181) (57) — (1,039) Recoveries 31 60 — 6 — 97 Provision (238) 356 175 57 (150) 200 Ending Balance $ 724 $ 3,700 $ 1,650 $ 117 $ 554 $ 6,745 Ending balance: individually evaluated for impairment $ — $ 1 $ — $ — $ — $ 1 Ending balance: collectively evaluated for impairment $ 724 $ 3,699 $ 1,650 $ 117 $ 554 $ 6,744 Loans Receivable: Ending Balance $ 92,220 $ 348,476 $ 159,741 $ 5,955 $ — $ 606,392 Ending balance: individually evaluated for impairment $ 1,126 $ 15,890 $ 577 $ — $ — $ 17,593 Ending balance: collectively evaluated for impairment $ 91,094 $ 332,586 $ 159,164 $ 5,955 $ — $ 588,799 |
Schedule of the outstanding recorded investment of TDRs | The following table presents the outstanding recorded investment of TDRs at the dates indicated: (Dollars in thousands) December 31, December 31, 2019 2018 Non-accrual TDRs $ 112 $ 80 Accruing TDRs 8,566 13,697 Total $ 8,678 $ 13,777 |
Schedule of the loan modifications categorized as TDRs | The following table presents information regarding the loan modifications categorized as TDRs during the year ended December 31, 2018. No loans were modified as TDRs during the year ended December 31, 2019. (Dollars in thousands) Year Ended December 31, 2018 Pre-Modification Post-Modification Year-End Number Outstanding Recorded Outstanding Recorded Recorded of Contracts Investment Investment Investment Commercial and Industrial 3 $ 751 $ 751 $ 771 Commercial Real Estate 7 4,833 4,850 4,688 Residential Real Estate 1 26 26 25 Total 11 $ 5,610 $ 5,627 $ 5,484 |
Schedule of loan modifications made for loans categorized as TDRs | The following table provides detail regarding the types of loan modifications made for loans categorized as TDRs during the year ended December 31, 2018 with the total number of each type of modification performed. No loans were modified as TDRs during the year ended December 31, 2019. Year Ended December 31, 2018 Rate Term Payment Number Modification Modification Modification Modified Commercial and Industrial — — 3 3 Commercial Real Estate 1 2 4 7 Residential Real Estate — 1 — 1 Total 1 3 7 11 |
Schedule of recorded investment, unpaid principal balance, related allowance, average recorded investment, and interest income recognized with respect to the Corporation's impaired loans | The recorded investment, unpaid principal balance, and the related allowance of the Corporation’s impaired loans are summarized below at December 31, 2019 and 2018. (Dollars in thousands) December 31, 2019 December 31, 2018 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance With no related allowance recorded: Commercial and Industrial $ 1,084 $ 1,084 $ — $ 1,126 $ 1,126 $ — Commercial Real Estate 11,130 14,147 — 15,807 20,107 — Residential Real Estate 712 822 — 577 619 — With an allowance recorded: Commercial and Industrial ― ― — — — — Commercial Real Estate 28 28 1 83 83 1 Residential Real Estate ― ― — — — — Total $ 12,954 $ 16,081 $ 1 $ 17,593 $ 21,935 $ 1 Total consists of: Commercial and Industrial $ 1,084 $ 1,084 $ — $ 1,126 $ 1,126 $ — Commercial Real Estate $ 11,158 $ 14,175 $ 1 $ 15,890 $ 20,190 $ 1 Residential Real Estate $ 712 $ 822 $ — $ 577 $ 619 $ — At December 31, 2019 and 2018, $8,678,000 and $13,777,000 of loans classified as TDRs were included in impaired loans both with a total allocated allowance of $1,000, respectively. The recorded investment represents the loan balance reflected on the consolidated balance sheets net of any charge-offs. The unpaid balance is equal to the gross amount due on the loan. The average recorded investment and interest income recognized for the Corporation’s impaired loans are summarized below for the years ended December 31, 2019 and 2018. (Dollars in thousands) For the Year Ended For the Year Ended December 31, 2019 December 31, 2018 Average Interest Average Interest Recorded Income Recorded Income Investment Recognized Investment Recognized With no related allowance recorded: Commercial and Industrial $ 1,106 $ 53 $ 1,157 $ 53 Commercial Real Estate 12,426 435 11,575 623 Residential Real Estate 614 7 794 11 With an allowance recorded: Commercial and Industrial — — — — Commercial Real Estate 69 3 662 3 Residential Real Estate 13 ― 138 — Total $ 14,228 $ 498 $ 14,326 $ 690 Total consists of: Commercial and Industrial $ 1,106 $ 53 $ 1,157 $ 53 Commercial Real Estate $ 12,495 $ 438 $ 12,237 $ 626 Residential Real Estate $ 627 $ 7 $ 932 $ 11 Of the $498,000 and $690,000 in interest income recognized on impaired loans for the years ended December 31, 2019 and 2018, respectively, $5,000 and $9,000 in interest income was recognized with respect to non-accrual loans. |
Schedule of total non-performing assets | Total non-performing assets (which includes loans receivable on non-accrual status, foreclosed assets held for resale and loans past-due 90 days or more and still accruing interest) as of December 31, 2019 and 2018 were as follows: (Dollars in thousands) December 31, December 31, 2019 2018 Commercial Real Estate $ 3,697 $ 3,402 Residential Real Estate 691 494 Total non-accrual loans 4,388 3,896 Foreclosed assets held for resale 119 1,163 Loans past-due 90 days or more and still accruing interest 100 341 Total non-performing assets $ 4,607 $ 5,400 |
Schedule of classes of the loan portfolio by past-due status | The following tables present the classes of the loan portfolio summarized by the past-due status at December 31, 2019 and 2018: (Dollars in thousands) 90 Days Or Greater Past Due 90 Days and Still 30-59 Days 60-89 Days or Greater Total Total Accruing Past Due Past Due Past Due Past Due Current Loans Interest December 31, 2019: Commercial and Industrial $ ― $ 26 $ — $ 26 $ 86,686 $ 86,712 $ — Commercial Real Estate 880 957 3,502 5,339 390,462 395,801 ― Residential Real Estate 1,118 506 613 2,237 157,113 159,350 100 Consumer 24 5 — 29 5,840 5,869 — Total $ 2,022 $ 1,494 $ 4,115 $ 7,631 $ 640,101 $ 647,732 $ 100 (Dollars in thousands) 90 Days Or Greater Past Due 90 Days and Still 30-59 Days 60-89 Days or Greater Total Total Accruing Past Due Past Due Past Due Past Due Current Loans Interest December 31, 2018: Commercial and Industrial $ 16 $ 24 $ 6 $ 46 $ 92,174 $ 92,220 $ 6 Commercial Real Estate 2,183 523 3,583 6,289 342,187 348,476 252 Residential Real Estate 1,890 421 457 2,768 156,973 159,741 83 Consumer 12 — — 12 5,943 5,955 — Total $ 4,101 $ 968 $ 4,046 $ 9,115 $ 597,277 $ 606,392 $ 341 |
PREMISES AND EQUIPMENT (Tables)
PREMISES AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
PREMISES AND EQUIPMENT | |
Schedule of Premises and equipment | Premises and equipment at December 31, 2019 and 2018 is as follows: (Dollars in thousands) Estimated Useful Life (in years) 2019 2018 Land N/A $ 3,744 $ 3,744 Buildings 5-40 20,746 20,639 Leasehold improvements 1-20 184 174 Equipment 3-25 8,242 8,283 32,916 32,840 Less: Accumulated depreciation 13,529 12,894 Total $ 19,387 $ 19,946 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
DEPOSITS | |
Schedule of major classifications of deposits | Major classifications of deposits at December 31, 2019 and 2018 consisted of: (Dollars in thousands) 2019 2018 Non-interest bearing demand $ 134,648 $ 126,361 Interest bearing demand 218,847 180,328 Savings 173,069 167,572 Time certificates of deposits less than $250,000 210,916 172,550 Time certificates of deposits $250,000 or greater 23,006 23,597 Other time 1,142 1,145 Total deposits $ 761,628 $ 671,553 |
Schedule of classification and remaining maturities of time deposits | The following is a schedule reflecting classification and remaining maturities of time deposits at December 31, 2019: ( Dollars in thousands) Year Ending 2020 $ 114,598 2021 34,566 2022 40,420 2023 23,451 2024 21,900 Thereafter 129 $ 235,064 |
SHORT-TERM BORROWINGS (Tables)
SHORT-TERM BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SHORT-TERM BORROWINGS | |
Schedule of Short-term borrowings and weighted-average interest rates | Short-term borrowings and weighted-average interest rates at and for the years ended December 31, 2019 and 2018 are as follows: (Dollars in thousands) 2019 2018 Average Average Amount Rate Amount Rate Federal funds purchased $ — 2.01 % $ — 2.19 % Securities sold under agreements to repurchase 14,042 1.03 % 12,957 0.56 % Federal Discount Window — 2.92 % — 2.19 % Federal Home Loan Bank 40,621 2.59 % 161,488 2.28 % $ 54,663 2.37 % $ 174,445 2.04 % |
Schedule of short-term borrowings subject to an enforceable master netting arrangement or repurchase agreements | The following table presents the short-term borrowings subject to an enforceable master netting arrangement or repurchase agreements as of December 31, 2019 and 2018. (Dollars in thousands) Gross Net Amounts Amounts of Liabilities Offset Presented Gross in the in the Amounts of Consolidated Consolidated Cash Recognized Balance Balance Financial Collateral Net Liabilities Sheet Sheet Instruments Pledge Amount December 31, 2019 Repurchase agreements (a) $ 14,042 $ — $ 14,042 $ (14,042) $ — $ — December 31, 2018 Repurchase agreements (a) $ 12,957 $ — $ 12,957 $ (12,957) $ — $ — (a) As of December 31, 2019 and 2018, the fair value of securities pledged in connection with repurchase agreements was $22,413,000 and $16,970,000, respectively. |
Schedule of the remaining contractual maturity of the master netting arrangement or repurchase agreements | The following table presents the remaining contractual maturity of the master netting arrangement or repurchase agreements as of December 31, 2019. (Dollars in thousands) Remaining Contractual Maturity of the Agreements Overnight Greater and Up to 30 -90 than Continuous 30 days Days 90 Days Total Repurchase agreements and repurchase-to-maturity transactions: U.S. Treasury and/or agency securities $ 14,042 $ — $ — $ — $ 14,042 Total $ 14,042 $ — $ — $ — $ 14,042 |
LONG-TERM BORROWINGS (Tables)
LONG-TERM BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
LONG-TERM BORROWINGS | |
Schedule of long-term borrowings by maturity | A schedule of long-term borrowings by maturity as of December 31, 2019 and 2018 follows: (Dollars in thousands) 2019 2018 Due 2019, 1.79% to 2.11% $ ― $ 20,000 Due 2020, 1.62% to 1.95% 10,000 10,000 Due 2021, 1.42% to 1.58% 10,000 10,000 Due 2022 , 2.34% 10,000 ― Due 2023, 2.96% 3,000 3,000 Due 2024, 1.68% 20,000 ― Due 2028, 5.14% 2,000 2,000 $ 55,000 $ 45,000 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
Schedule of current and deferred components of the income tax expense | The current and deferred components of the income tax expense consisted of the following: (Dollars in thousands) 2019 2018 Federal Current $ 1,014 $ (107) Deferred 100 566 Income tax expense $ 1,114 $ 459 |
Schedule of reconciliation between the income tax expense and the amount of income taxes | The following is a reconciliation between the income tax expense and the amount of income taxes which would have been provided at the statutory rate of 21%: (Dollars in thousands) 2019 2018 Amount Rate Amount Rate Federal income tax at statutory rate $ 2,384 21.0 % $ 2,031 21.0 % Tax-exempt income (727) (6.4) (1,043) (10.8) Low-income housing credits (405) (3.6) (405) (4.2) Bank owned life insurance income (130) (1.1) (128) (1.3) Other (8) (0.1) 4 — Income tax expense and rate $ 1,114 9.8 % $ 459 4.7 % |
Schedule of components of the net deferred tax asset and liabilities | The components of the net deferred tax (liability) asset at December 31, 2019 and 2018 are as follows: (Dollars in thousands) 2019 2018 Deferred Tax Assets: Allowance for loan losses $ 1,471 $ 1,417 Provision for unfunded commitments 26 25 Deferred compensation 230 241 Contributions 1 1 Accrued rent expense — 22 Operating lease liabilities 349 — Loan purchase accounting 14 31 Limited partnership investments 242 66 Alternative minimum tax credits ― 7 Net unrealized losses on debt securities available-for-sale ― 686 Impairment loss on securities 4 4 Writedowns on OREO properties 3 34 Capital and net operating loss carry forwards 70 70 Valuation allowance related to state net operating losses (70) (70) Total 2,340 2,534 Deferred Tax Liabilities: Net unrealized gains on debt securities available-for-sale 1,122 — Loan fees and costs 288 183 Net unrealized gains on marketable equity securities 345 237 Operating lease right-of-use assets 322 — Accumulated depreciation 363 311 Accretion 32 35 Mortgage servicing rights 49 42 Intangibles 257 257 Total 2,778 1,065 Net Deferred Tax (Liability) Asset $ (438) $ 1,469 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of weighted-average term and discount rates for operating leases | The following table displays the weighted-average term and discount rates for operating leases outstanding as of December 31, 2019. Operating Weighted-average term (years) 25.63 Weighted-average discount rate 3.85 % |
Schedule of maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows | A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liability is as follows: (Dollars in thousands) December 31, 2019 Minimum Lease Payments due: Within one year $ 148 After one but within two years 106 After two but within three years 86 After three but within four years 68 After four but within five years 68 After five years 2,326 Total undiscounted cash flows 2,802 Discount on cash flows (1,139) Total lease liability $ 1,663 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
RELATED PARTY TRANSACTIONS | |
Schedule of of the activity on the related party loans | A summary of the activity on the related party loans consists of the following: (Dollars in thousands) 2019 2018 Balance at January 1 $ 19,948 $ 10,997 Additions 4,139 13,642 Deductions (7,847) (4,691) Balance at December 31, $ 16,240 $ 19,948 |
REGULATORY MATTERS (Tables)
REGULATORY MATTERS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
REGULATORY MATTERS | |
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | As of December 31, 2019 the most recent notification from the Federal Deposit Insurance Corporation categorized the Bank as Well Capitalized under the regulatory framework for prompt corrective action. To be categorized as Well Capitalized, the Bank must maintain minimum total risk-based, tier I risk-based, common equity tier 1 risk-based and tier I leverage ratios as set forth in the table. There are no conditions or events since the notification that management believes have changed the Bank’s category. (Dollars in thousands) Minimum To Be Well Capital Capitalized For Capital Adequacy Under Prompt Adequacy with Capital Corrective Actual Purposes Buffer Action Provisions Amount Ratio Amount Ratio Amount Ratio Amount Ratio As of December 31, 2019: Total Capital (to Risk-Weighted Assets) $ 100,193 14.53 % $ 55,168 8.00 % $ 72,409 10.50 % $ 68,961 10.00 % Tier I Capital (to Risk-Weighted Assets) $ 93,063 13.50 % $ 41,376 6.00 % $ 58,617 8.50 % $ 55,168 8.00 % Common Equity Tier 1 Capital (to Risk-Weighted Assets) $ 93,063 13.50 % $ 31,032 4.50 % $ 48,272 7.00 % $ 44,824 6.50 % Tier I Capital (to Average Assets) $ 93,063 9.42 % $ 39,531 4.00 % $ 39,531 4.00 % $ 49,414 5.00 % (Dollars in thousands) Minimum To Be Well Capital Capitalized For Capital Adequacy Under Prompt Adequacy with Capital Corrective Actual Purposes Buffer Action Provisions Amount Ratio Amount Ratio Amount Ratio Amount Ratio As of December 31, 2018: Total Capital (to Risk-Weighted Assets) $ 96,065 13.87 % $ 55,395 8.00 % $ 68,378 9.88 % $ 69,243 10.00 % Tier I Capital (to Risk-Weighted Assets) $ 89,203 12.88 % $ 41,546 6.00 % $ 54,529 7.88 % $ 55,395 8.00 % Common Equity Tier 1 Capital (to Risk-Weighted Assets) $ 89,203 12.88 % $ 31,160 4.50 % $ 44,143 6.38 % $ 45,008 6.50 % Tier I Capital (to Average Assets) $ 89,203 9.01 % $ 39,616 4.00 % $ 39,616 4.00 % $ 49,521 5.00 % |
FINANCIAL INSTRUMENTS WITH OF_2
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK | |
Schedule of Financial instruments whose contract amounts representing credit risk | The contract or notional amounts at December 31, 2019 and 2018 were as follows: (Dollars in thousands) 2019 2018 Financial instruments whose contract amounts represent credit risk: Commitments to extend credit $ 122,082 $ 107,126 Financial standby letters of credit $ 335 $ 331 Performance standby letters of credit $ 3,230 $ 3,107 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
FAIR VALUE MEASUREMENTS | |
Schedule of securities measured at fair value on a recurring basis | At December 31, 2019 and 2018, securities measured at fair value on a recurring basis and the valuation methods used are as follows: (Dollars in thousands) December 31, 2019 Level 1 Level 2 Level 3 Total Debt Securities Available-for-Sale: U.S. Treasury securities $ — $ 2,855 $ — $ 2,855 Obligations of U.S. Government Corporations and Agencies: Mortgaged-backed — 77,283 — 77,283 Other — 10,297 — 10,297 Other mortgage backed debt securities — 11,138 — 11,138 Obligations of state and political subdivisions — 120,376 — 120,376 Asset backed securities — 37,536 — 37,536 Corporate debt securities — 18,443 — 18,443 Total debt securities available-for-sale — 277,928 — 277,928 Marketable equity securities 1,933 — — 1,933 Total recurring fair value measurements $ 1,933 $ 277,928 $ — $ 279,861 (Dollars in thousands) December 31, 2018 Level 1 Level 2 Level 3 Total Debt Securities Available-for-Sale: U.S. Treasury securities $ — $ 5,295 $ — $ 5,295 Obligations of U.S. Government Corporations and Agencies: Mortgaged-backed — 64,876 — 64,876 Other — 18,243 — 18,243 Other mortgage backed debt securities — 4,749 — 4,749 Obligations of state and political subdivisions — 182,278 — 182,278 Asset backed securities — 14,370 — 14,370 Corporate debt securities — 26,243 — 26,243 Total debt securities available-for-sale — 316,054 — 316,054 Marketable equity securities 1,560 — — 1,560 Total recurring fair value measurements $ 1,560 $ 316,054 $ — $ 317,614 |
Schedule of impaired loans measured at fair value on a nonrecurring basis | At December 31, 2019 and 2018, impaired loans measured at fair value on a nonrecurring basis and the valuation methods used are as follows: (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets at December 31, 2019 Impaired loans: Commercial Real Estate $ — $ — $ 6,218 $ 6,218 Residential Real Estate — — 221 221 Total impaired loans $ — $ — $ 6,439 $ 6,439 (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets at December 31, 2018 Impaired loans: Commercial Real Estate $ — $ — $ 6,400 $ 6,400 Residential Real Estate — — 81 81 Total impaired loans $ — $ — $ 6,481 $ 6,481 |
Schedule of foreclosed assets held for resale measured at fair value on a nonrecurring basis | At December 31, 2019 and 2018, foreclosed assets held for resale measured at fair value on a nonrecurring basis and the valuation methods used are as follows: (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets at December 31, 2019 Foreclosed assets held for resale: Commercial Real Estate $ — $ — $ 81 $ 81 Total foreclosed assets held for resale $ — $ — $ 81 $ 81 (Dollars in thousands) Level 1 Level 2 Level 3 Total Assets at December 31, 2018 Foreclosed assets held for resale: Commercial Real Estate $ — $ — $ 856 $ 856 Total foreclosed assets held for resale $ — $ — $ 856 $ 856 |
Schedule of fair value measurement inputs and valuation techniques | The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Corporation has utilized Level 3 inputs to determine the fair value: (Dollars in thousands) Quantitative Information about Level 3 Fair Value Measurements Fair Value Weighted December 31, 2019 Estimate Valuation Technique Unobservable Input Range Average Impaired loans $ 3,419 Appraisal of collateral 1,3 Appraisal adjustments 2 (10%) – (77%) (17%) Impaired loans $ 3,020 Discounted cash flow Discount rate (7%) – (8%) (7%) Foreclosed assets held for resale $ 81 Appraisal of collateral 1,3 Appraisal adjustments 2 (35%) – (35%) (35%) December 31, 2018 Impaired loans $ 3,346 Appraisal of collateral 1,3 Appraisal adjustments 2 (15%) – (82%) (18%) Impaired loans $ 3,135 Discounted cash flow Discount rate (6%) – (7%) (7%) Foreclosed assets held for resale $ 856 Appraisal of collateral 1,3 Appraisal adjustments 2 (16%) – (35%) (18%) 1 Fair value is generally determined through independent appraisals of the underlying collateral, as defined by Bank regulators. 2 Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses. The typical range of appraisal adjustments are presented as a percent of the appraisal value. 3 Includes qualitative adjustments by management and estimated liquidation expenses. |
Schedule of fair value of financial instruments, including financial assets and financial liabilities | The estimated fair values, and related carrying amounts, of the Corporation’s financial instruments that are not recorded at fair value are as follows: Carrying Fair Value Measurements at December 31, 2019 (Dollars in thousands) Amount Level 1 Level 2 Level 3 Total FINANCIAL ASSETS: Cash and due from banks $ 10,251 $ 10,251 $ — $ — $ 10,251 Interest-bearing deposits in other banks 473 — 473 — 473 Time deposits with other banks 247 — 250 — 250 Restricted investment in bank stocks 4,224 — 4,224 — 4,224 Net loans 640,727 — — 655,301 655,301 Mortgage servicing rights 283 — — 283 283 Accrued interest receivable 3,405 — 3,405 — 3,405 FINANCIAL LIABILITIES: Demand, savings and other deposits 526,564 — 526,564 — 526,564 Time deposits — 235,134 — 235,134 Short-term borrowings 54,663 — 54,655 — 54,655 Long-term borrowings 55,000 — 55,809 — 55,809 Accrued interest payable 606 — 606 — 606 OFF-BALANCE SHEET FINANCIAL INSTRUMENTS — — — — — Carrying Fair Value Measurements at December 31, 2018 (Dollars in thousands) Amount Level 1 Level 2 Level 3 Total FINANCIAL ASSETS: Cash and due from banks $ 9,822 $ 9,822 $ — $ — $ 9,822 Interest-bearing deposits in other banks 1,128 — 1,128 — 1,128 Time deposits with other banks 1,482 — 1,469 — 1,469 Restricted investment in bank stocks 8,681 — 8,681 — 8,681 Net loans 599,647 — — 597,525 597,525 Mortgage servicing rights 316 — — 316 316 Accrued interest receivable 4,041 — 4,041 — 4,041 FINANCIAL LIABILITIES: Demand, savings and other deposits 474,261 — 474,261 — 474,261 Time deposits 197,292 — 195,136 — 195,136 Short-term borrowings 174,445 — 174,491 — 174,491 Long-term borrowings 45,000 — 45,077 — 45,077 Accrued interest payable 785 — 785 — 785 OFF-BALANCE SHEET FINANCIAL INSTRUMENTS — — — — — |
PARENT COMPANY FINANCIAL INFO_2
PARENT COMPANY FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
PARENT COMPANY FINANCIAL INFORMATION | |
Condensed Balance Sheet [Table Text Block] | BALANCE SHEETS December 31, (Dollars in thousands) 2019 2018 ASSETS Cash $ 10,993 $ 9,988 Investment in banking subsidiary 116,417 105,755 Marketable equity securities 1,933 1,560 Prepaid expenses and other assets 137 232 TOTAL ASSETS $ 129,480 $ 117,535 LIABILITIES Advances from banking subsidiary $ 381 $ 536 Accrued expenses and other liabilities 347 243 TOTAL LIABILITIES 728 779 STOCKHOLDERS’ EQUITY Common stock 12,097 11,993 Surplus 38,365 37,255 Retained earnings 79,778 75,798 Accumulated other comprehensive income (loss) 4,221 (2,581) Treasury stock, at cost (5,709) (5,709) TOTAL STOCKHOLDERS’ EQUITY 128,752 116,756 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 129,480 $ 117,535 |
Condensed Income Statement [Table Text Block] | STATEMENTS OF INCOME Years Ended December 31, (Dollars in thousands) 2019 2018 INCOME Dividends from subsidiary bank $ 6,102 $ 6,102 Net securities gains (losses) 373 (72) Other income 81 76 TOTAL INCOME 6,556 6,106 OPERATING EXPENSES 125 176 6,431 5,930 INCOME TAX EXPENSE (BENEFIT) 63 (41) 6,368 5,971 EQUITY IN UNDISTRIBUTED EARNINGS OF BANKING SUBSIDIARY 3,859 3,240 NET INCOME $ 10,227 $ 9,211 |
Condensed Statement of Comprehensive Income [Table Text Block] | STATEMENTS OF COMPREHENSIVE INCOME Years Ended December 31, (Dollars in thousands) 2019 2018 Net Income $ 10,227 $ 9,211 Other comprehensive income (loss): Equity in other comprehensive income (loss) of banking subsidiary 6,802 (4,133) Total other comprehensive income (loss) 6,802 (4,133) Total Comprehensive Income $ 17,029 $ 5,078 |
Condensed Cash Flow Statement [Table Text Block] | STATEMENTS OF CASH FLOWS Years Ended December 31, (Dollars in thousands) 2019 2018 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 10,227 $ 9,211 Adjustments to reconcile net income to net cash provided by operating activities: (Gains) losses on securities (373) 72 Deferred income tax expense 104 5 Equity in undistributed earnings of banking subsidiary (3,859) (3,240) Decrease (increase) in prepaid/accrued expenses and other assets/liabilities 105 (214) (Decrease) increase in advances from banking subsidiary (155) 211 NET CASH PROVIDED BY OPERATING ACTIVITIES 6,049 6,045 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 1,203 1,153 Dividends paid (6,247) (6,194) NET CASH USED IN FINANCING ACTIVITIES (5,044) (5,041) INCREASE IN CASH AND CASH EQUIVALENTS 1,005 1,004 CASH AND CASH EQUIVALENTS, BEGINNING 9,988 8,984 CASH AND CASH EQUIVALENTS, ENDING $ 10,993 $ 9,988 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of basic and diluted earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Net income | $ 10,227 | $ 9,211 |
Weighted-average common shares outstanding | 5,784 | 5,737 |
Basic and diluted earnings per share | $ 1.77 | $ 1.60 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) | 3 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2008USD ($) | Dec. 31, 2019USD ($)itemshares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Feb. 25, 2020$ / shares | Jan. 01, 2019USD ($) | |
Tax Credits On Investments In Low Income Housing Partnerships | $ 405,000 | $ 405,000 | ||||||
Amortization Of Investments In Limited Partnerships | $ 353,000 | 530,000 | ||||||
Loan Payments Delinquency Period Beyond Which Loans Considered Past Due | 10 days | |||||||
Loan Payments Delinquency Period Beyond Which Loans Considered Non Accrual | 90 days | |||||||
Assets Held-in-trust | $ 111,160,000 | 105,917,000 | ||||||
Loans Receivable Held-for-sale, Amount | 2,292,000 | 365,000 | ||||||
Payments to Acquire Real Estate Held-for-investment | 85,000 | 0 | $ 1,430,000 | $ 1,430,000 | $ 590,000 | |||
Servicing Asset at Fair Value, Amount | 283,000 | 316,000 | ||||||
Operating Lease, Right-of-Use Asset | 1,470,000 | 0 | ||||||
Operating Lease, Liability | $ 1,663,000 | $ 0 | ||||||
Loan Payments, Delinquency Period, at which time Delinquency Notice is Automatically Generated | 10 or 15 days | |||||||
Number of common stock shares outstanding potential | shares | 0 | 0 | ||||||
Mortgage Loan Service [Member] | ||||||||
Loans Serviced For Others | $ 94,998,000 | $ 97,201,000 | ||||||
Servicing Asset at Fair Value, Amount | 283,000 | 316,000 | ||||||
Fees and Commissions, Mortgage Banking and Servicing | 241,000 | 247,000 | ||||||
Amortization of Mortgage Servicing Rights (MSRs) | 112,000 | 129,000 | ||||||
Accounting Standards Update 2016-02 [Member] | ||||||||
Operating Lease, Right-of-Use Asset | $ 1,465,000 | |||||||
Operating Lease, Liability | $ 1,556,000 | |||||||
Subsequent Event [Member] | ||||||||
Dividends Payable, Amount Per Share | $ / shares | $ 0.27 | |||||||
Commercial and Industrial [Member] | ||||||||
Government Guaranteed Loans | $ 6,150,000 | |||||||
Commercial Real Estate Loans [Member] | Maximum [Member] | ||||||||
Term of Loan Offering | 20 years | |||||||
Maximum Loan to Value Ratio | eighty percent | |||||||
Residential Mortgage Loans [Member] | Maximum [Member] | Held for Investment [Member] | ||||||||
Term of Loan Offering | 20 years | |||||||
Maximum Loan to Value Ratio | eighty percent | |||||||
Residential Mortgage Loans [Member] | Maximum [Member] | Originated For Resale [Member] | ||||||||
Term of Loan Offering | 30 years | |||||||
Maximum Loan to Value Ratio | eighty percent | |||||||
Residential Mortgage Loans [Member] | Primary Mortgage Insurance [Member] | Maximum [Member] | Held for Investment [Member] | ||||||||
Term of Loan Offering | 20 years | |||||||
Maximum Loan to Value Ratio | ninety-five percent | |||||||
Residential Portfolio Segment [Member] | Line of Credit [Member] | Maximum [Member] | ||||||||
Term of Loan Offering | 20 years | |||||||
Maximum Loan to Value Ratio | eighty percent | |||||||
Residential Portfolio Segment [Member] | Home Equity Term Loans [Member] | Maximum [Member] | ||||||||
Term of Loan Offering | 15 years | |||||||
Maximum Loan to Value Ratio | eighty percent | |||||||
Reserve for Off-balance Sheet Activities [Member] | ||||||||
Valuation Allowances and Reserves, Balance, Ending Balance | $ 125,000 | 117,000 | ||||||
Bank Owned Life Insurance [Member] | ||||||||
Deferred Compensation Arrangement with Individual, Recorded Liability | 38,000 | 40,000 | ||||||
Deferred Compensation Arrangement with Individual, Compensation Expense | (2,000) | (1,000) | ||||||
Pocono Community Bank [Member] | ||||||||
Goodwill, Purchase Accounting Adjustments | $ 152,000 | |||||||
Federal Home Loan Bank of Pittsburgh [Member] | ||||||||
Available-for-sale Securities, Restricted | 4,189,000 | 8,646,000 | ||||||
Atlantic Central Bankers Bank [Member] | ||||||||
Available-for-sale Securities, Restricted | $ 35,000 | $ 35,000 | ||||||
Full Service Offices [Member] | ||||||||
Number of Stores | 18 | |||||||
Loan Production Office [Member] | ||||||||
Number of Stores | item | 1 | |||||||
Automated Teller [Member] | ||||||||
Number of Stores | 20 |
RESTRICTED CASH BALANCES (Detai
RESTRICTED CASH BALANCES (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
RESTRICTED CASH BALANCES | ||
Cash Segregated under Other Regulations | $ 1,352,000 | $ 1,178,000 |
Deposits with Other Federal Home Loan Banks | $ 463,000 | $ 1,118,000 |
SECURITIES (Details)
SECURITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Available-for-Sale Securities | ||
Total | $ 272,585 | $ 319,321 |
Gross Unrealized Gains | 6,336 | 1,875 |
Gross Unrealized Losses | (993) | (5,142) |
Total | 277,928 | 316,054 |
Other mortgage backed debt securities [Member] | ||
Available-for-Sale Securities | ||
Total | 11,145 | 4,767 |
Gross Unrealized Gains | 3 | 0 |
Gross Unrealized Losses | (10) | (18) |
Total | 11,138 | 4,749 |
U.S. Treasury Securities [Member] | ||
Available-for-Sale Securities | ||
Total | 2,852 | 5,307 |
Gross Unrealized Gains | 3 | 0 |
Gross Unrealized Losses | 0 | (12) |
Total | 2,855 | 5,295 |
Obligations of U.S. Government Corporations and Agencies Mortgage-backed [Member] | ||
Available-for-Sale Securities | ||
Total | 77,131 | 66,300 |
Gross Unrealized Gains | 539 | 105 |
Gross Unrealized Losses | (387) | (1,529) |
Total | 77,283 | 64,876 |
Obligations of US Government Corporations and Agencies Other [Member] | ||
Available-for-Sale Securities | ||
Total | 10,381 | 18,706 |
Gross Unrealized Gains | 4 | 21 |
Gross Unrealized Losses | (88) | (484) |
Total | 10,297 | 18,243 |
Obligations of state and political subdivisions [Member] | ||
Available-for-Sale Securities | ||
Total | 114,934 | 182,621 |
Gross Unrealized Gains | 5,490 | 1,678 |
Gross Unrealized Losses | (48) | (2,021) |
Total | 120,376 | 182,278 |
Asset-backed Securities [Member] | ||
Available-for-Sale Securities | ||
Total | 37,596 | 14,323 |
Gross Unrealized Gains | 115 | 47 |
Gross Unrealized Losses | (175) | 0 |
Total | 37,536 | 14,370 |
Corporate debt securities [Member] | ||
Available-for-Sale Securities | ||
Total | 18,546 | 27,297 |
Gross Unrealized Gains | 182 | 24 |
Gross Unrealized Losses | (285) | (1,078) |
Total | $ 18,443 | $ 26,243 |
SECURITIES - Amortized cost and
SECURITIES - Amortized cost and fair value of debt securities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Available-For-Sale - Amortized cost | ||
Within 1 Year | $ 3,853 | |
1 - 5 Years | 36,653 | |
5 - 10 Years | 45,794 | |
After 10 Years | 98,009 | |
Total | 272,585 | $ 319,321 |
Available-For-Sale - Estimated fair value | ||
Within 1 Year | 3,863 | |
1 - 5 Years | 36,933 | |
5 - 10 Years | 46,653 | |
After 10 Years | 102,058 | |
Total | 277,928 | $ 316,054 |
Mortgage backed securities [Member] | ||
Available-For-Sale - Amortized cost | ||
Total | 88,276 | |
Available-For-Sale - Estimated fair value | ||
Total | $ 88,421 |
SECURITIES - Unrealized and rea
SECURITIES - Unrealized and realized gains (losses) (Details) - Available-for-sale Securities [Member] - Marketable Equity Securities - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Net gains and (losses) recognized during the period on equity securities | $ 373 | $ (72) |
Less: Net gains and (losses) recognized during the period on equity securities sold during the period | 0 | 0 |
Net gains and (losses) recognized during the reporting period on equity securities still held at the reporting date | $ 373 | $ (72) |
SECURITIES - Continuous unreali
SECURITIES - Continuous unrealized loss position (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Less Than 12 Months | ||
Fair Value | $ 72,236 | $ 37,563 |
Unrealized Loss | (461) | (217) |
12 Months or More | ||
Fair Value | 25,556 | 148,570 |
Unrealized Loss | (532) | (4,925) |
Total | ||
Fair Value | 97,792 | 186,133 |
Unrealized Loss | (993) | (5,142) |
Other mortgage backed debt securities [Member] | ||
Less Than 12 Months | ||
Fair Value | 4,056 | 4,749 |
Unrealized Loss | (10) | (18) |
12 Months or More | ||
Fair Value | 0 | 0 |
Unrealized Loss | 0 | 0 |
Total | ||
Fair Value | 4,056 | 4,749 |
Unrealized Loss | (10) | (18) |
U.S. Treasury Securities [Member] | ||
Less Than 12 Months | ||
Fair Value | 0 | 5,295 |
Unrealized Loss | 0 | (12) |
12 Months or More | ||
Fair Value | 0 | 0 |
Unrealized Loss | 0 | 0 |
Total | ||
Fair Value | 0 | 5,295 |
Unrealized Loss | 0 | (12) |
Obligations of U.S. Government Corporations and Agencies Mortgage-backed [Member] | ||
Less Than 12 Months | ||
Fair Value | 39,085 | 3,690 |
Unrealized Loss | (221) | (17) |
12 Months or More | ||
Fair Value | 12,650 | 55,443 |
Unrealized Loss | (166) | (1,512) |
Total | ||
Fair Value | 51,735 | 59,133 |
Unrealized Loss | (387) | (1,529) |
Other Obligations of U.S. Government Corporations and Agencies [Member] | ||
Less Than 12 Months | ||
Fair Value | 4,382 | 7,553 |
Unrealized Loss | (24) | (66) |
12 Months or More | ||
Fair Value | 4,594 | 7,067 |
Unrealized Loss | (64) | (418) |
Total | ||
Fair Value | 8,976 | 14,620 |
Unrealized Loss | (88) | (484) |
Obligations of state and political subdivisions [Member] | ||
Less Than 12 Months | ||
Fair Value | 1,993 | 14,453 |
Unrealized Loss | (15) | (75) |
12 Months or More | ||
Fair Value | 1,081 | 66,583 |
Unrealized Loss | (33) | (1,946) |
Total | ||
Fair Value | 3,074 | 81,036 |
Unrealized Loss | (48) | (2,021) |
Asset-backed Securities [Member] | ||
Less Than 12 Months | ||
Fair Value | 19,236 | 0 |
Unrealized Loss | (175) | 0 |
12 Months or More | ||
Fair Value | 0 | 0 |
Unrealized Loss | 0 | 0 |
Total | ||
Fair Value | 19,236 | 0 |
Unrealized Loss | (175) | 0 |
Corporate debt securities [Member] | ||
Less Than 12 Months | ||
Fair Value | 3,484 | 1,823 |
Unrealized Loss | (16) | (29) |
12 Months or More | ||
Fair Value | 7,231 | 19,477 |
Unrealized Loss | (269) | (1,049) |
Total | ||
Fair Value | 10,715 | 21,300 |
Unrealized Loss | $ (285) | $ (1,078) |
SECURITIES - Additional Informa
SECURITIES - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Available-for-sale Securities Pledged as Collateral | $ 201,468,000 | $ 149,993,000 | |
Carrying Value Of Public Funds, Trust Funds, Securities Sold Under Agreements To Repurchase, FHLB Advances, And Other Balances | 143,546,000 | 112,528,000 | |
Proceeds from Sale of Debt Securities, Available-for-sale | 106,623,000 | 44,122,000 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ 4,221,000 | (2,581,000) | |
Available For Sale Securities In Unrealized Loss Positions Qualitative Disclosure Number Of Positions Less Than Or Equal To One Year | item | 23 | ||
Available For Sale Securities In Unrealized Loss Positions Qualitative Disclosure Number Of Positions Greater Than One Year | item | 15 | ||
Gain on debt securities | $ 947,000 | 122,000 | |
Loss on debt securities | 409,000 | 115,000 | |
Marketable Equity Securities | |||
Available-for-sale Securities | $ 1,933,000 | $ 1,560,000 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ 634,000 |
LOANS AND ALLOWANCE FOR LOAN _3
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Financing Receivable, Recorded Investment [Line Items] | ||
Add (deduct): Unearned discount | $ 0 | $ 0 |
Net deferred loan fees and costs | 1,373 | 873 |
Total loans | 647,732 | 606,392 |
Pass [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 631,472 | 584,570 |
Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,146 | 5,377 |
Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 13,741 | 15,572 |
Doubtful [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Commercial and Industrial [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Add (deduct): Unearned discount | 0 | 0 |
Net deferred loan fees and costs | 643 | 160 |
Total loans | 86,712 | 92,220 |
Commercial and Industrial [Member] | Pass [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 84,999 | 90,835 |
Commercial and Industrial [Member] | Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 2 | 6 |
Commercial and Industrial [Member] | Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,068 | 1,219 |
Commercial and Industrial [Member] | Doubtful [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Commercial Real Estate [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Add (deduct): Unearned discount | 0 | 0 |
Net deferred loan fees and costs | 757 | 698 |
Total loans | 395,801 | 348,476 |
Commercial Real Estate [Member] | Pass [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 382,510 | 329,126 |
Commercial Real Estate [Member] | Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 944 | 5,249 |
Commercial Real Estate [Member] | Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 11,590 | 13,403 |
Commercial Real Estate [Member] | Doubtful [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Residential Portfolio Segment [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Add (deduct): Unearned discount | 0 | 0 |
Net deferred loan fees and costs | (116) | (76) |
Total loans | 159,350 | 159,741 |
Residential Portfolio Segment [Member] | Pass [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 158,301 | 158,755 |
Residential Portfolio Segment [Member] | Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 117 | 121 |
Residential Portfolio Segment [Member] | Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,048 | 941 |
Residential Portfolio Segment [Member] | Doubtful [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Consumer [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Add (deduct): Unearned discount | 0 | 0 |
Net deferred loan fees and costs | 89 | 91 |
Total loans | 5,869 | 5,955 |
Consumer [Member] | Pass [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 5,662 | 5,854 |
Consumer [Member] | Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 83 | 1 |
Consumer [Member] | Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 35 | 9 |
Consumer [Member] | Doubtful [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | $ 0 | $ 0 |
LOANS AND ALLOWANCE FOR LOAN _4
LOANS AND ALLOWANCE FOR LOAN LOSSES - Activity in allowance for loan losses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Beginning balance | $ 6,745 | $ 7,487 |
Charge-offs | (204) | (1,039) |
Recoveries | 14 | 97 |
Provision | 450 | 200 |
Ending Balance | 7,005 | 6,745 |
Ending balance: individually evaluated for impairment | 1 | 1 |
Ending balance: collectively evaluated for impairment | 7,004 | 6,744 |
Ending Balance | 647,732 | 606,392 |
Ending balance: individually evaluated for impairment | 12,954 | 17,593 |
Ending balance: collectively evaluated for impairment | 634,778 | 588,799 |
Commercial and Industrial [Member] | ||
Beginning balance | 724 | 949 |
Charge-offs | 0 | (18) |
Recoveries | 6 | 31 |
Provision | (96) | (238) |
Ending Balance | 634 | 724 |
Ending balance: individually evaluated for impairment | 0 | 0 |
Ending balance: collectively evaluated for impairment | 634 | 724 |
Ending Balance | 86,712 | 92,220 |
Ending balance: individually evaluated for impairment | 1,084 | 1,126 |
Ending balance: collectively evaluated for impairment | 85,628 | 91,094 |
Commercial Real Estate [Member] | ||
Beginning balance | 3,700 | 4,067 |
Charge-offs | (64) | (783) |
Recoveries | 0 | 60 |
Provision | 480 | 356 |
Ending Balance | 4,116 | 3,700 |
Ending balance: individually evaluated for impairment | 1 | 1 |
Ending balance: collectively evaluated for impairment | 4,115 | 3,699 |
Ending Balance | 395,801 | 348,476 |
Ending balance: individually evaluated for impairment | 11,158 | 15,890 |
Ending balance: collectively evaluated for impairment | 384,643 | 332,586 |
Residential Portfolio Segment [Member] | ||
Beginning balance | 1,650 | 1,656 |
Charge-offs | (69) | (181) |
Recoveries | 2 | 0 |
Provision | 82 | 175 |
Ending Balance | 1,665 | 1,650 |
Ending balance: individually evaluated for impairment | 0 | 0 |
Ending balance: collectively evaluated for impairment | 1,665 | 1,650 |
Ending Balance | 159,350 | 159,741 |
Ending balance: individually evaluated for impairment | 712 | 577 |
Ending balance: collectively evaluated for impairment | 158,638 | 159,164 |
Consumer [Member] | ||
Beginning balance | 117 | 111 |
Charge-offs | (71) | (57) |
Recoveries | 6 | 6 |
Provision | 62 | 57 |
Ending Balance | 114 | 117 |
Ending balance: individually evaluated for impairment | 0 | 0 |
Ending balance: collectively evaluated for impairment | 114 | 117 |
Ending Balance | 5,869 | 5,955 |
Ending balance: individually evaluated for impairment | 0 | 0 |
Ending balance: collectively evaluated for impairment | 5,869 | 5,955 |
Unallocated Financing Receivables [Member] | ||
Beginning balance | 554 | 704 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision | (78) | (150) |
Ending Balance | 476 | 554 |
Ending balance: individually evaluated for impairment | 0 | 0 |
Ending balance: collectively evaluated for impairment | 476 | 554 |
Ending Balance | 0 | 0 |
Ending balance: individually evaluated for impairment | 0 | 0 |
Ending balance: collectively evaluated for impairment | $ 0 | $ 0 |
LOANS AND ALLOWANCE FOR LOAN _5
LOANS AND ALLOWANCE FOR LOAN LOSSES - Outstanding recorded investment of TDRs (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Financing Receivable, Modifications, Recorded Investment | $ 8,678 | $ 13,777 |
Non-accrual TDRs [Member] | ||
Financing Receivable, Modifications, Recorded Investment | 112 | 80 |
Accruing TDRs [Member] | ||
Financing Receivable, Modifications, Recorded Investment | $ 8,566 | $ 13,697 |
LOANS AND ALLOWANCE FOR LOAN _6
LOANS AND ALLOWANCE FOR LOAN LOSSES - Loan modifications categorized as TDRs (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($)item | |
Financing Receivable, Modifications, Number of Contracts | item | 11 |
Financing Receivable, Modifications, Pre-Modification Outstanding Recorded Investment | $ 5,610 |
Financing Receivable, Modifications, Post-Modification Outstanding Recorded Investment | 5,627 |
Financing Receivable, Modifications, Year-End Recorded Investment | $ 5,484 |
Residential Real Estate [Member] | |
Financing Receivable, Modifications, Number of Contracts | item | 1 |
Financing Receivable, Modifications, Pre-Modification Outstanding Recorded Investment | $ 26 |
Financing Receivable, Modifications, Post-Modification Outstanding Recorded Investment | 26 |
Financing Receivable, Modifications, Year-End Recorded Investment | $ 25 |
Commercial and Industrial [Member] | |
Financing Receivable, Modifications, Number of Contracts | item | 3 |
Financing Receivable, Modifications, Pre-Modification Outstanding Recorded Investment | $ 751 |
Financing Receivable, Modifications, Post-Modification Outstanding Recorded Investment | 751 |
Financing Receivable, Modifications, Year-End Recorded Investment | $ 771 |
Commercial Real Estate [Member] | |
Financing Receivable, Modifications, Number of Contracts | item | 7 |
Financing Receivable, Modifications, Pre-Modification Outstanding Recorded Investment | $ 4,833 |
Financing Receivable, Modifications, Post-Modification Outstanding Recorded Investment | 4,850 |
Financing Receivable, Modifications, Year-End Recorded Investment | $ 4,688 |
LOANS AND ALLOWANCE FOR LOAN _7
LOANS AND ALLOWANCE FOR LOAN LOSSES - Types of loan modifications (Details) | 12 Months Ended |
Dec. 31, 2018item | |
Financing Receivable, Modifications, Number of Contracts | 11 |
Interest Rate Modification [Member] | |
Financing Receivable, Modifications, Number of Contracts | 1 |
Loan Term Modification [Member] | |
Financing Receivable, Modifications, Number of Contracts | 3 |
Payment Modification [Member] | |
Financing Receivable, Modifications, Number of Contracts | 7 |
Commercial and Industrial [Member] | |
Financing Receivable, Modifications, Number of Contracts | 3 |
Commercial and Industrial [Member] | Interest Rate Modification [Member] | |
Financing Receivable, Modifications, Number of Contracts | 0 |
Commercial and Industrial [Member] | Loan Term Modification [Member] | |
Financing Receivable, Modifications, Number of Contracts | 0 |
Commercial and Industrial [Member] | Payment Modification [Member] | |
Financing Receivable, Modifications, Number of Contracts | 3 |
Commercial Real Estate [Member] | |
Financing Receivable, Modifications, Number of Contracts | 7 |
Commercial Real Estate [Member] | Interest Rate Modification [Member] | |
Financing Receivable, Modifications, Number of Contracts | 1 |
Commercial Real Estate [Member] | Loan Term Modification [Member] | |
Financing Receivable, Modifications, Number of Contracts | 2 |
Commercial Real Estate [Member] | Payment Modification [Member] | |
Financing Receivable, Modifications, Number of Contracts | 4 |
Residential Real Estate [Member] | |
Financing Receivable, Modifications, Number of Contracts | 1 |
Residential Real Estate [Member] | Interest Rate Modification [Member] | |
Financing Receivable, Modifications, Number of Contracts | 0 |
Residential Real Estate [Member] | Loan Term Modification [Member] | |
Financing Receivable, Modifications, Number of Contracts | 1 |
Residential Real Estate [Member] | Payment Modification [Member] | |
Financing Receivable, Modifications, Number of Contracts | 0 |
LOANS AND ALLOWANCE FOR LOAN _8
LOANS AND ALLOWANCE FOR LOAN LOSSES - Impaired loans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Recorded Investment | ||
Total | $ 12,954 | $ 17,593 |
Unpaid Principal Balance | ||
Total | 16,081 | 21,935 |
Related Allowance | ||
Total | 1 | 1 |
Average Recorded Investment | ||
Total | 14,228 | 14,326 |
Interest Income Recognized | ||
Total | 498 | 690 |
Commercial and Industrial [Member] | ||
Recorded Investment | ||
With no related allowance recorded | 1,084 | 1,126 |
With an allowance recorded | 0 | 0 |
Total | 1,084 | 1,126 |
Unpaid Principal Balance | ||
With no related allowance recorded | 1,084 | 1,126 |
With an allowance recorded | 0 | 0 |
Total | 1,084 | 1,126 |
Related Allowance | ||
With no related allowance recorded | 0 | 0 |
With an allowance recorded | 0 | 0 |
Total | 0 | 0 |
Average Recorded Investment | ||
With no related allowance recorded | 1,106 | 1,157 |
With an allowance recorded | 0 | 0 |
Total | 1,106 | 1,157 |
Interest Income Recognized | ||
With no related allowance recorded | 53 | 53 |
With an allowance recorded | 0 | 0 |
Total | 53 | 53 |
Commercial Real Estate [Member] | ||
Recorded Investment | ||
With no related allowance recorded | 11,130 | 15,807 |
With an allowance recorded | 28 | 83 |
Total | 11,158 | 15,890 |
Unpaid Principal Balance | ||
With no related allowance recorded | 14,147 | 20,107 |
With an allowance recorded | 28 | 83 |
Total | 14,175 | 20,190 |
Related Allowance | ||
With no related allowance recorded | 0 | 0 |
With an allowance recorded | 1 | 1 |
Total | 1 | 1 |
Average Recorded Investment | ||
With no related allowance recorded | 12,426 | 11,575 |
With an allowance recorded | 69 | 662 |
Total | 12,495 | 12,237 |
Interest Income Recognized | ||
With no related allowance recorded | 435 | 623 |
With an allowance recorded | 3 | 3 |
Total | 438 | 626 |
Residential Portfolio Segment [Member] | ||
Recorded Investment | ||
With no related allowance recorded | 712 | 577 |
With an allowance recorded | 0 | 0 |
Total | 712 | 577 |
Unpaid Principal Balance | ||
With no related allowance recorded | 822 | 619 |
With an allowance recorded | 0 | 0 |
Total | 822 | 619 |
Related Allowance | ||
With no related allowance recorded | 0 | 0 |
With an allowance recorded | 0 | 0 |
Total | 0 | 0 |
Average Recorded Investment | ||
With no related allowance recorded | 614 | 794 |
With an allowance recorded | 13 | 138 |
Total | 627 | 932 |
Interest Income Recognized | ||
With no related allowance recorded | 7 | 11 |
With an allowance recorded | 0 | 0 |
Total | $ 7 | $ 11 |
LOANS AND ALLOWANCE FOR LOAN _9
LOANS AND ALLOWANCE FOR LOAN LOSSES - Non-performing assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Total non-accrual loans | $ 4,388 | $ 3,896 |
Foreclosed assets held for resale | 119 | 1,163 |
Loans past-due 90 days or more and still accruing interest | 100 | 341 |
Total non-performing assets | 4,607 | 5,400 |
Commercial Real Estate [Member] | ||
Total non-accrual loans | 3,697 | 3,402 |
Loans past-due 90 days or more and still accruing interest | 0 | 252 |
Residential Portfolio Segment [Member] | ||
Total non-accrual loans | 691 | 494 |
Loans past-due 90 days or more and still accruing interest | $ 100 | $ 83 |
LOANS AND ALLOWANCE FOR LOAN_10
LOANS AND ALLOWANCE FOR LOAN LOSSES - Past due (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Total Past Due | $ 7,631 | $ 9,115 |
Current | 640,101 | 597,277 |
Total Loans | 647,732 | 606,392 |
90 Days or Greater Past Due and Still Accruing Interest | 100 | 341 |
Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Total Past Due | 2,022 | 4,101 |
Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Total Past Due | 1,494 | 968 |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Total Past Due | 4,115 | 4,046 |
Commercial and Industrial [Member] | ||
Total Past Due | 26 | 46 |
Current | 86,686 | 92,174 |
Total Loans | 86,712 | 92,220 |
90 Days or Greater Past Due and Still Accruing Interest | 0 | 6 |
Commercial and Industrial [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Total Past Due | 0 | 16 |
Commercial and Industrial [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Total Past Due | 26 | 24 |
Commercial and Industrial [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Total Past Due | 0 | 6 |
Commercial Real Estate [Member] | ||
Total Past Due | 5,339 | 6,289 |
Current | 390,462 | 342,187 |
Total Loans | 395,801 | 348,476 |
90 Days or Greater Past Due and Still Accruing Interest | 0 | 252 |
Commercial Real Estate [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Total Past Due | 880 | 2,183 |
Commercial Real Estate [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Total Past Due | 957 | 523 |
Commercial Real Estate [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Total Past Due | 3,502 | 3,583 |
Residential Portfolio Segment [Member] | ||
Total Past Due | 2,237 | 2,768 |
Current | 157,113 | 156,973 |
Total Loans | 159,350 | 159,741 |
90 Days or Greater Past Due and Still Accruing Interest | 100 | 83 |
Residential Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Total Past Due | 1,118 | 1,890 |
Residential Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Total Past Due | 506 | 421 |
Residential Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Total Past Due | 613 | 457 |
Consumer [Member] | ||
Total Past Due | 29 | 12 |
Current | 5,840 | 5,943 |
Total Loans | 5,869 | 5,955 |
90 Days or Greater Past Due and Still Accruing Interest | 0 | 0 |
Consumer [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Total Past Due | 24 | 12 |
Consumer [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Total Past Due | 5 | 0 |
Consumer [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Total Past Due | $ 0 | $ 0 |
LOANS AND ALLOWANCE FOR LOAN_11
LOANS AND ALLOWANCE FOR LOAN LOSSES - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Loans Receivable Held-for-sale, Amount | $ 2,292,000 | $ 365,000 |
Impaired Financing Receivable Related Allowance Attributable to TDR | 1,000 | 1,000 |
Impaired Financing Receivable, Interest Income, Accrual Method | 498,000 | 690,000 |
Impaired Financing Receivable Interest Income Non-accrual Method | 5,000 | 9,000 |
Foreclosed Assets Held For Resale | 119,000 | 1,163,000 |
Financing Receivable, Modifications, Recorded Investment | 8,678,000 | 13,777,000 |
Financing Receivable, Modifications, Post-Modification Recorded Investment | 5,627,000 | |
Interest on non-accrual loans, Estimate of accrual amount | 996,000 | 784,000 |
Foreclosed Assets Held for Resale Represented by Land | 38,000 | 39,000 |
Foreclosed Assets Held for Resale Represented by Commercial Real Estate | 81,000 | 856,000 |
Foreclosed Assets Held for Resale Represented by Residential Real Estate | 268,000 | |
Commercial Real Estate [Member] | ||
Financing Receivable Modification Not In Compliance Of Terms | 464,000 | 499,000 |
Residential Real Estate [Member] | ||
Financing Receivable, Modifications, Post-Modification Recorded Investment | 26,000 | |
TDRs [Member] | ||
Financing Receivable, Modifications, Unfunded Commitments | 0 | 0 |
Commercial and Industrial [Member] | ||
Tax free loans | 17,848,000 | 24,161,000 |
Government Guaranteed Loans | 6,150,000 | |
Impaired Financing Receivable, Interest Income, Accrual Method | 53,000 | 53,000 |
Financing Receivable Modification Not In Compliance Of Terms | 6,000 | |
Financing Receivable, Modifications, Post-Modification Recorded Investment | 751,000 | |
Residential Portfolio Segment [Member] | ||
Consumer Mortgage Loans Secured by Residential Real Estate in Process of Foreclosure | 617,000 | 718,000 |
Impaired Financing Receivable, Interest Income, Accrual Method | 7,000 | 11,000 |
Irrevocable Letter of credit [Member] | ||
Loans and Leases Receivable, Impaired, Commitment to Lend | 1,249,000 | 1,249,000 |
Loan to Real Estate Developer Specializing in Commercial Office Space [Member] | TDRs [Member] | ||
Financing Receivable Modifications Year End Recorded Investment | 4,296,000 | |
Commercial Real Estate [Member] | ||
Tax free loans | 2,007,000 | 2,164,000 |
Impaired Financing Receivable, Interest Income, Accrual Method | $ 438,000 | 626,000 |
Financing Receivable, Modifications, Post-Modification Recorded Investment | 4,850,000 | |
Commercial Real Estate [Member] | TDRs [Member] | ||
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $ 163,000 |
PREMISES AND EQUIPMENT (Details
PREMISES AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Cost | $ 32,916 | $ 32,840 |
Less: Accumulated depreciation | 13,529 | 12,894 |
Property, Plant and Equipment, Net, Total | 19,387 | 19,946 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 3,744 | 3,744 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | $ 20,746 | $ 20,639 |
Building [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 5 years | 5 years |
Building [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 40 years | 40 years |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | $ 184 | $ 174 |
Leasehold Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 1 year | 1 year |
Leasehold Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 20 years | 20 years |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | $ 8,242 | $ 8,283 |
Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | 3 years |
Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 25 years | 25 years |
PREMISES AND EQUIPMENT - Additi
PREMISES AND EQUIPMENT - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
PREMISES AND EQUIPMENT | ||
Depreciation expense | $ 1,112,000 | $ 1,141,000 |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
DEPOSITS | ||
Non-interest bearing demand | $ 134,648 | $ 126,361 |
Interest bearing demand | 218,847 | 180,328 |
Savings | 173,069 | 167,572 |
Time certificates of deposits less than $250,000 | 210,916 | 172,550 |
Time certificates of deposits $250,000 or greater | 23,006 | 23,597 |
Other time deposits | 1,142 | 1,145 |
Total deposits | $ 761,628 | $ 671,553 |
DEPOSITS - Summary of classific
DEPOSITS - Summary of classification and remaining maturities of time deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
DEPOSITS | ||
2020 | $ 114,598 | |
2021 | 34,566 | |
2022 | 40,420 | |
2023 | 23,451 | |
2024 | 21,900 | |
Thereafter | 129 | |
Time deposits | $ 235,064 | $ 197,292 |
SHORT-TERM BORROWINGS (Details)
SHORT-TERM BORROWINGS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Short-term Debt [Line Items] | ||
Short-term borrowings, Amount | $ 54,663 | $ 174,445 |
Short-term borrowings, Average Rate | 2.37% | 2.04% |
Federal Funds Purchased [Member] | ||
Short-term Debt [Line Items] | ||
Short-term borrowings, Amount | $ 0 | $ 0 |
Short-term borrowings, Average Rate | 2.01% | 2.19% |
Securities Sold under Agreements to Repurchase [Member] | ||
Short-term Debt [Line Items] | ||
Short-term borrowings, Amount | $ 14,042 | $ 12,957 |
Short-term borrowings, Average Rate | 1.03% | 0.56% |
Federal Discount Window [Member] | ||
Short-term Debt [Line Items] | ||
Short-term borrowings, Amount | $ 0 | $ 0 |
Short-term borrowings, Average Rate | 2.92% | 2.19% |
Federal Home Loan Bank [Member] | ||
Short-term Debt [Line Items] | ||
Short-term borrowings, Amount | $ 40,621 | $ 161,488 |
Short-term borrowings, Average Rate | 2.59% | 2.28% |
SHORT-TERM BORROWINGS - Summary
SHORT-TERM BORROWINGS - Summary of short-term borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | |
Repurchase agreements | |||
Gross Amounts of Recognized Liabilities | [1] | $ 14,042 | $ 12,957 |
Gross Amounts Offset in the Consolidated Balance Sheet | [1] | 0 | 0 |
Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | [1] | 14,042 | 12,957 |
Financial Instruments | [1] | (14,042) | (12,957) |
Cash Collateral Pledge | [1] | 0 | 0 |
Net Amount | [1] | $ 0 | $ 0 |
[1] | As of December 31, 2019 and 2018, the fair value of securities pledged in connection with repurchase agreements was $22,413,000 and $16,970,000, respectively |
SHORT-TERM BORROWINGS - Remaini
SHORT-TERM BORROWINGS - Remaining contractual maturity of repurchase agreements (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | $ 14,042 |
U.S. Treasury Securities [Member] | |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | 14,042 |
Overnight and Continuous [Member] | |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | 14,042 |
Overnight and Continuous [Member] | U.S. Treasury Securities [Member] | |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | 14,042 |
Upto 30 Days [Member] | |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | 0 |
Upto 30 Days [Member] | U.S. Treasury Securities [Member] | |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | 0 |
30 to 90 Days [Member] | |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | 0 |
30 to 90 Days [Member] | U.S. Treasury Securities [Member] | |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | 0 |
Greater than 90 Days [Member] | |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | 0 |
Greater than 90 Days [Member] | U.S. Treasury Securities [Member] | |
Repurchase agreements and repurchase-to-maturity transactions: | |
Remaining Contractual Maturity of the Agreements | $ 0 |
SHORT-TERM BORROWINGS - Additio
SHORT-TERM BORROWINGS - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Short-term Debt [Line Items] | ||
Fair value of securities pledged | $ 22,413,000 | $ 16,970,000 |
Federal Funds Purchased [Member] | ||
Short-term Debt [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 15,000,000 | |
Federal Discount Window [Member] | ||
Short-term Debt [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 4,805,000 | |
Maximum [Member] | ||
Short-term Debt [Line Items] | ||
Federal funds purchased, securities sold under agreements to repurchase and Federal Home Loan Bank advances, maturity | 30 days |
LONG-TERM BORROWINGS (Details)
LONG-TERM BORROWINGS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
BORROWINGS | ||
Due 2019, 1.79% to 2.11% | $ 20,000 | |
Due 2020, 1.62% to 1.95% | $ 10,000 | 10,000 |
Due 2021, 1.42% to 1.58% | 10,000 | 10,000 |
Due 2022 , 2.34% | 10,000 | 0 |
Due 2023, 2.96% | 3,000 | 3,000 |
Due 2024, 1.68% | 20,000 | 0 |
Due 2028, 5.14% | 2,000 | 2,000 |
Long-term Debt and Capital Lease Obligations | $ 55,000 | $ 45,000 |
LONG-TERM BORROWINGS (Details)
LONG-TERM BORROWINGS (Details) (Parenthetical) | Dec. 31, 2019 |
Due 2019, 1.79% to 2.11% [Member] | Minimum [Member] | |
Debt Instrument, Interest Rate, Stated Percentage | 1.79% |
Due 2019, 1.79% to 2.11% [Member] | Maximum [Member] | |
Debt Instrument, Interest Rate, Stated Percentage | 2.11% |
Due 2020, 1.62% to 1.95% [Member] | Minimum [Member] | |
Debt Instrument, Interest Rate, Stated Percentage | 1.62% |
Due 2020, 1.62% to 1.95% [Member] | Maximum [Member] | |
Debt Instrument, Interest Rate, Stated Percentage | 1.95% |
Due 2021, 1.42% to 1.58% [Member] | Minimum [Member] | |
Debt Instrument, Interest Rate, Stated Percentage | 1.42% |
Due 2021, 1.42% to 1.58% [Member] | Maximum [Member] | |
Debt Instrument, Interest Rate, Stated Percentage | 1.58% |
Due 2022, 2.34% [Member] | |
Debt Instrument, Interest Rate, Stated Percentage | 2.34% |
Due 2023, 2.96%[Member] | |
Debt Instrument, Interest Rate, Stated Percentage | 2.96% |
Due 2024, 1.68% [Member] | |
Debt Instrument, Interest Rate, Stated Percentage | 1.68% |
Due 2028, 5.14% [Member] | |
Debt Instrument, Interest Rate, Stated Percentage | 5.14% |
LONG-TERM BORROWINGS - Addition
LONG-TERM BORROWINGS - Additional Information (Details) | Dec. 31, 2019USD ($) |
BORROWINGS | |
Federal Home Loan Bank, Advances, General Debt Obligations, Maximum Amount Available | $ 353,426,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Federal | ||
Current | $ 1,014 | $ (107) |
Deferred | 100 | 566 |
Income tax expense | $ 1,114 | $ 459 |
INCOME TAXES - Summary of recon
INCOME TAXES - Summary of reconciliation between the income tax expense and the amount of income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Amount | ||
Federal income tax at statutory rate | $ 2,384 | $ 2,031 |
Tax-exempt income | (727) | (1,043) |
Low-income housing credits | (405) | (405) |
Bank owned life insurance income | (130) | (128) |
Other | (8) | 4 |
Income tax expense and rate | $ 1,114 | $ 459 |
Rate | ||
Federal income tax at statutory rate | 21.00% | 21.00% |
Tax-exempt income | (6.40%) | (10.80%) |
Low-income housing credits | (3.60%) | (4.20%) |
Bank owned life insurance income | (1.10%) | (1.30%) |
Other | (0.10%) | |
Income tax expense and rate | 9.80% | 4.70% |
INCOME TAXES - Summary of compo
INCOME TAXES - Summary of components of the net deferred tax asset and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred Tax Assets: | ||
Allowance for loan losses | $ 1,471 | $ 1,417 |
Provision for unfunded commitments | 26 | 25 |
Deferred compensation | 230 | 241 |
Contributions | 1 | 1 |
Accrued rent expense | 0 | 22 |
Operating lease liabilities | 349 | 0 |
Loan purchase accounting | 14 | 31 |
Limited partnership investments | 242 | 66 |
Alternative minimum tax credits | 0 | 7 |
Net unrealized losses on debt securities available-for-sale | 0 | 686 |
Impairment loss on securities | 4 | 4 |
Writedowns on OREO properties | 3 | 34 |
Capital and net operating loss carry forwards | 70 | 70 |
Valuation allowance related to state net operating losses | (70) | (70) |
Total | 2,340 | 2,534 |
Deferred Tax Liabilities: | ||
Net unrealized gains on debt securities available-for-sale | 1,122 | 0 |
Loan fees and costs | 288 | 183 |
Net unrealized gains on marketable equity securities | 345 | 237 |
Operating lease right-of-use assets | 322 | 0 |
Accumulated depreciation | 363 | 311 |
Accretion | 32 | 35 |
Mortgage servicing rights | 49 | 42 |
Intangibles | 257 | 257 |
Total | 2,778 | 1,065 |
Net Deferred Tax (Liability) Asset | $ 1,469 | |
Net Deferred Tax (Liability) Asset | $ (438) |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
INCOME TAXES | ||
Deferred Tax Assets, Valuation Allowance | $ 70,000 | $ 70,000 |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local, Net | $ 0 | |
State Net Operating Loss Carryforwards Offset Future State Taxable Income Expiration Term | 2039 |
EMPLOYEE BENEFIT PLANS AND DE_2
EMPLOYEE BENEFIT PLANS AND DEFERRED COMPENSATION AGREEMENTS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||
Description of Defined Contribution Pension and Other Postretirement Plans | Under the savings feature, the Corporation makes safe harbor matching contributions of 100% of the first 3% of compensation an employee contributes to the Plan and 50% of the next 2% of compensation an employee contributes to the Plan | |
Safe Harbor Matching Contributions Plan [Member] | ||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 309,000 | $ 296,000 |
Profit Sharing Feature Contributions [Member] | ||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||
Defined Contribution Plan, Employer Discretionary Contribution Amount | 329,000 | 304,000 |
Officers [Member] | ||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||
Deferred Compensation Arrangement with Individual, Recorded Liability | 1,056,000 | 1,109,000 |
Deferred Compensation Arrangement with Individual, Compensation Expense | $ 73,000 | (229,000) |
Resigned Officer [Member] | ||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | ||
Deferred Compensation Arrangement with Individual, Compensation Expense | $ (305,000) |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Weighted average term and discount rates (Details) | Dec. 31, 2019 |
COMMITMENTS AND CONTINGENCIES | |
Weighted-average term (years) | 25 years 7 months 17 days |
Weighted-average discount rate | 3.85% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Maturity analysis of operating lease liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
COMMITMENTS AND CONTINGENCIES | ||
Within one year | $ 148 | |
After one but within two years | 106 | |
After two but within three years | 86 | |
After three but within four years | 68 | |
After four but within five years | 68 | |
After five years | 2,326 | |
Total undiscounted cash flows | 2,802 | |
Discount on cash flows | (1,139) | |
Total lease liability | $ 1,663 | $ 0 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2019USD ($)lease | Dec. 31, 2018USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Operating Lease, Right-of-Use Asset | $ 1,470,000 | $ 0 |
Operating Lease, Liability | 1,663,000 | 0 |
Operating Lease, Cost | 257,000 | |
Operating Lease, Payments | $ 156,000 | |
Operating Leases, Rent Expense, Net | $ 170,000 | |
Banking Facilities [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Number of Operating Leases | lease | 3 | |
Land [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Number of Operating Leases | lease | 1 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
RELATED PARTY TRANSACTIONS | ||
Balance at January 1 | $ 19,948 | $ 10,997 |
Additions | 4,139 | 13,642 |
Deductions | (7,847) | (4,691) |
Balance at December 31 | $ 16,240 | $ 19,948 |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional information (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Related Party Transaction [Line Items] | ||
Related Party Deposit Liabilities | $ 21,140,000 | $ 18,696,000 |
Management [Member] | ||
Related Party Transaction [Line Items] | ||
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability | $ 5,810,000 | $ 4,958,000 |
REGULATORY MATTERS (Details)
REGULATORY MATTERS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Total Capital (to Risk-Weighted Assets) | ||
Actual | $ 100,193 | $ 96,065 |
For capital adequacy purposes | 55,168 | 55,395 |
To be well capitalized under prompt corrective action provisions | 68,961 | 69,243 |
Minimum capital adequacy with capital buffer | $ 72,409 | $ 68,378 |
Total - Actual | 14.53% | 13.87% |
For capital adequacy purposes | 8.00% | 8.00% |
Total - To be well capitalized under prompt corrective action provisions | 10.00% | 10.00% |
Total - Minimum capital adequacy with capital buffer | 10.50% | 9.88% |
Tier 1 Capital (to Risk-Weighted Assets) | ||
Actual | $ 93,063 | $ 89,203 |
For capital adequacy purposes | 41,376 | 41,546 |
To be well capitalized under prompt corrective action provisions | 55,168 | 55,395 |
Minimum capital adequacy with capital buffer | $ 58,617 | $ 54,529 |
Tier 1 - Actual | 13.50% | 12.88% |
Tier 1 - For capital adequacy purposes | 6.00% | 6.00% |
Tier 1 - To be well capitalized under prompt corrective action provisions | 8.00% | 8.00% |
Tier 1 - Minimum capital adequacy with capital buffer | 8.50% | 7.88% |
Common Equity Tier 1 Capital (to Risk-Weighted Assets) | ||
Actual | $ 93,063 | $ 89,203 |
For capital adequacy purposes | 31,032 | 31,160 |
To be well capitalized under prompt corrective action provisions | 44,824 | 45,008 |
Minimum Capital Adequacy With Capital Buffer | $ 48,272 | $ 44,143 |
Common Equity Tier 1 - Actual | 13.50% | 12.88% |
Common Equity Tier 1 - For Capital Adequacy Purposes | 4.50% | 4.50% |
Common Equity Tier 1 - To be well capitalized under prompt corrective action provisions | 6.50% | 6.50% |
Common Equity Tier 1 - Minimum Capital Adequacy With Capital Buffer | 7.00% | 6.38% |
Tier 1 Capital (to Average Assets) | ||
Actual | $ 93,063 | $ 89,203 |
For capital adequacy purposes | 39,531 | 39,616 |
Minimum capital adequacy with capital buffer | 39,531 | 39,616 |
To be well capitalized under prompt corrective action provisions | $ 49,414 | $ 49,521 |
Actual | 9.42% | 9.01% |
Tier 1 - For capital adequacy purposes | 4.00% | 4.00% |
Tier 1 - Minimum capital adequacy with capital buffer | 4.00% | 4.00% |
To be well capitalized under prompt corrective action provisions | 5.00% | 5.00% |
REGULATORY MATTERS - Additional
REGULATORY MATTERS - Additional information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Jul. 02, 2013 | |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |||
Amount Available for Dividend Distribution without Affecting Capital Adequacy Requirements | $ 9,506,000 | ||
Tier One Risk Based Capital to Risk Weighted Assets | 13.50% | 12.88% | |
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets | 6.00% | 6.00% | |
Tier One Leverage Capital to Average Assets | 9.42% | 9.01% | |
Common Equity Tier 1 Conservation Buffer Percentage | 2.50% | ||
Loans And Advances From Bank To Corporation Percentage Limit Of Consolidated Net Assets | 10.00% | ||
Capital Conservation Buffer Rate | 2.50% | 1.875% | |
Minimum [Member] | |||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |||
Tier One Risk Based Capital to Risk Weighted Assets | 4.50% | ||
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets | 6.00% | ||
Tier One Leverage Capital to Average Assets | 4.00% |
FINANCIAL INSTRUMENTS WITH OF_3
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Commitments to Extend Credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Concentration Risk, Credit Risk, Financial Instrument, Off-Balance Sheet Risk | $ 122,082 | $ 107,126 |
Financial Standby Letter of Credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Concentration Risk, Credit Risk, Financial Instrument, Off-Balance Sheet Risk | 335 | 331 |
Performance Standby Letters of Credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Concentration Risk, Credit Risk, Financial Instrument, Off-Balance Sheet Risk | $ 3,230 | $ 3,107 |
FINANCIAL INSTRUMENTS WITH OF_4
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK - Additional Information (Details) - Credit Concentration Risk [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Loans Receivable, Secure by Commercial and Residential Real Estate | $ 555,151,000 | |
Loans Receivable, Percentage of Loans Secure by Commercial and Residential Real Estate | 85.70% | |
Concentration Risk, Percentage | 10.00% | 10.00% |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share Purchase And Dividend Reinvestment Plan Shares Transferred And Held | 52,184 | 45,371 |
Share Purchase And Dividend Reinvestment Plan Number Of Shares Authorized | 524,864 | |
Share Based Compensation Arrangement By Share Based Payment Award Minimum Number Of Qualifying Shares | 25 | |
Minimum [Member] | ||
Share Purchase And Dividend Reinvestment Plan Quarterly Voluntary Investment | $ 100 | |
Maximum [Member] | ||
Share Purchase And Dividend Reinvestment Plan Quarterly Voluntary Investment | $ 2,500 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | $ 277,928 | $ 316,054 |
Marketable equity securities | 1,933 | 1,560 |
Asset-backed Securities [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 37,536 | 14,370 |
Corporate debt securities [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 18,443 | 26,243 |
Fair Value, Measurements, Recurring [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 277,928 | 316,054 |
Total recurring fair value measurements | 279,861 | 317,614 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | |
Total recurring fair value measurements | 1,933 | 1,560 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 277,928 | 316,054 |
Total recurring fair value measurements | 277,928 | 316,054 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | |
Total recurring fair value measurements | 0 | |
Fair Value, Measurements, Recurring [Member] | U.S. Treasury Securities [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 2,855 | 5,295 |
Fair Value, Measurements, Recurring [Member] | U.S. Treasury Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | |
Fair Value, Measurements, Recurring [Member] | U.S. Treasury Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 2,855 | 5,295 |
Fair Value, Measurements, Recurring [Member] | U.S. Treasury Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | |
Fair Value, Measurements, Recurring [Member] | Other Obligations of U.S. Government Corporations and Agencies [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 10,297 | 18,243 |
Fair Value, Measurements, Recurring [Member] | Other Obligations of U.S. Government Corporations and Agencies [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | |
Fair Value, Measurements, Recurring [Member] | Other Obligations of U.S. Government Corporations and Agencies [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 10,297 | 18,243 |
Fair Value, Measurements, Recurring [Member] | Other Obligations of U.S. Government Corporations and Agencies [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | |
Fair Value, Measurements, Recurring [Member] | Mortgage Backed Obligations Of US Government Corporations And Agencies [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 77,283 | 64,876 |
Fair Value, Measurements, Recurring [Member] | Mortgage Backed Obligations Of US Government Corporations And Agencies [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | |
Fair Value, Measurements, Recurring [Member] | Mortgage Backed Obligations Of US Government Corporations And Agencies [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 77,283 | 64,876 |
Fair Value, Measurements, Recurring [Member] | Mortgage Backed Obligations Of US Government Corporations And Agencies [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | |
Fair Value, Measurements, Recurring [Member] | Obligations of state and political subdivisions [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 120,376 | 182,278 |
Fair Value, Measurements, Recurring [Member] | Obligations of state and political subdivisions [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | |
Fair Value, Measurements, Recurring [Member] | Obligations of state and political subdivisions [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 120,376 | 182,278 |
Fair Value, Measurements, Recurring [Member] | Obligations of state and political subdivisions [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | |
Fair Value, Measurements, Recurring [Member] | Asset-backed Securities [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 37,536 | 14,370 |
Fair Value, Measurements, Recurring [Member] | Asset-backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | |
Fair Value, Measurements, Recurring [Member] | Asset-backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 37,536 | 14,370 |
Fair Value, Measurements, Recurring [Member] | Asset-backed Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | |
Fair Value, Measurements, Recurring [Member] | Corporate debt securities [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 18,443 | 26,243 |
Fair Value, Measurements, Recurring [Member] | Corporate debt securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | |
Fair Value, Measurements, Recurring [Member] | Corporate debt securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 18,443 | 26,243 |
Fair Value, Measurements, Recurring [Member] | Corporate debt securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | |
Fair Value, Measurements, Recurring [Member] | Marketable Equity Securities | ||
Available-for-Sale Securities: | ||
Marketable equity securities | 1,933 | 1,560 |
Fair Value, Measurements, Recurring [Member] | Marketable Equity Securities | Fair Value, Inputs, Level 1 [Member] | ||
Available-for-Sale Securities: | ||
Marketable equity securities | 1,933 | 1,560 |
Fair Value, Measurements, Recurring [Member] | Marketable Equity Securities | Fair Value, Inputs, Level 2 [Member] | ||
Available-for-Sale Securities: | ||
Marketable equity securities | 0 | |
Fair Value, Measurements, Recurring [Member] | Marketable Equity Securities | Fair Value, Inputs, Level 3 [Member] | ||
Available-for-Sale Securities: | ||
Marketable equity securities | 0 | |
Fair Value, Measurements, Recurring [Member] | Other mortgage backed debt securities [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 11,138 | 4,749 |
Fair Value, Measurements, Recurring [Member] | Other mortgage backed debt securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | 0 | |
Fair Value, Measurements, Recurring [Member] | Other mortgage backed debt securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | $ 11,138 | 4,749 |
Fair Value, Measurements, Recurring [Member] | Other mortgage backed debt securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Available-for-Sale Securities: | ||
Debt Securities Available-for-Sale: | $ 0 |
FAIR VALUE MEASUREMENTS - Impai
FAIR VALUE MEASUREMENTS - Impaired loans measured at FV (Details) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | $ 6,439 | $ 6,481 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 0 | |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 0 | |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 6,439 | 6,481 |
Commercial Real Estate [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 6,218 | 6,400 |
Commercial Real Estate [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 0 | |
Commercial Real Estate [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 0 | |
Commercial Real Estate [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 6,218 | 6,400 |
Residential Real Estate [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 221 | 81 |
Residential Real Estate [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 0 | |
Residential Real Estate [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 0 | |
Residential Real Estate [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | $ 221 | $ 81 |
FAIR VALUE MEASUREMENTS - Nonfi
FAIR VALUE MEASUREMENTS - Nonfinancial assets measured at FV (Details) - Fair Value, Measurements, Nonrecurring [Member] - Foreclosed assets held for resale [Member] - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure | $ 81 | $ 856 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure | 0 | |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure | 0 | |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure | 81 | 856 |
Commercial Real Estate [Member] | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure | 81 | 856 |
Commercial Real Estate [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure | 0 | |
Commercial Real Estate [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure | 0 | |
Commercial Real Estate [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, Fair Value Disclosure | $ 81 | $ 856 |
FAIR VALUE MEASUREMENTS - Quant
FAIR VALUE MEASUREMENTS - Quantitative information about Level 3 FV measurements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Impaired Loans Receivable [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Fair Value Estimate | $ 3,419 | $ 3,346 | |
Impaired Loans Receivable [Member] | Fair Value, Inputs, Level 3 [Member] | Appraisal of Collateral [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Valuation Technique | [1],[2] | Appraisal of collateral | Appraisal of collateral |
Unobservable Input | [3] | Appraisal adjustments | Appraisal adjustments |
Impaired Loans Receivable [Member] | Minimum [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Fair Values Inputs Comparability Adjustments | (10.00%) | (15.00%) | |
Impaired Loans Receivable [Member] | Maximum [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Fair Values Inputs Comparability Adjustments | (77.00%) | (82.00%) | |
Impaired Loans Receivable [Member] | Weighted Average [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Fair Values Inputs Comparability Adjustments | (17.00%) | (18.00%) | |
Impaired Loans Receivable, Discounted Cash Flow [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Fair Value Estimate | $ 3,020 | $ 3,135 | |
Valuation Technique | Discounted cash flow | Discounted cash flow | |
Unobservable Input | Discount rate | Discount rate | |
Impaired Loans Receivable, Discounted Cash Flow [Member] | Minimum [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Fair Values Inputs Comparability Adjustments | (7.00%) | (6.00%) | |
Impaired Loans Receivable, Discounted Cash Flow [Member] | Maximum [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Fair Values Inputs Comparability Adjustments | (8.00%) | (7.00%) | |
Impaired Loans Receivable, Discounted Cash Flow [Member] | Weighted Average [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Fair Values Inputs Comparability Adjustments | (7.00%) | (7.00%) | |
Foreclosed assets held for resale [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Fair Value Estimate | $ 81 | $ 856 | |
Foreclosed assets held for resale [Member] | Fair Value, Inputs, Level 3 [Member] | Appraisal of Collateral [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Valuation Technique | [1],[2] | Appraisal of collateral | Appraisal of collateral |
Unobservable Input | [3] | Appraisal adjustments | Appraisal adjustments |
Foreclosed assets held for resale [Member] | Minimum [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Fair Values Inputs Comparability Adjustments | (35.00%) | (16.00%) | |
Foreclosed assets held for resale [Member] | Maximum [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Fair Values Inputs Comparability Adjustments | (35.00%) | (35.00%) | |
Foreclosed assets held for resale [Member] | Weighted Average [Member] | |||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |||
Fair Values Inputs Comparability Adjustments | (35.00%) | (18.00%) | |
[1] | Fair value is generally determined through independent appraisals of the underlying collateral, as defined by Bank regulators | ||
[2] | Includes qualitative adjustments by management and estimated liquidation expenses. | ||
[3] | Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses. The typical range of appraisal adjustments are presented as a percent of the appraisal value. |
FAIR VALUE MEASUREMENTS - FV of
FAIR VALUE MEASUREMENTS - FV of Financial instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
FINANCIAL ASSETS: (Carrying Amount) | ||
Cash and due from banks | $ 10,251 | $ 9,822 |
Interest-bearing deposits in other banks | 473 | 1,128 |
Time deposits with other banks | 247 | 1,482 |
Restricted investment in bank stocks, at cost | 4,224 | 8,681 |
Net loans | 640,727 | 599,647 |
Mortgage servicing rights | 283 | 316 |
Accrued interest receivable | 3,405 | 4,041 |
FINANCIAL LIABILITIES: (Carrying Amount) | ||
Demand, savings and other deposits | 526,564 | 474,261 |
Time deposits | 235,064 | 197,292 |
Short-term borrowings | 54,663 | 174,445 |
Long-term borrowings | 55,000 | 45,000 |
Accrued interest payable | 606 | 785 |
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS (Carrying Amount) | 0 | |
FINANCIAL ASSETS: (Fair Value) | ||
Cash and due from banks | 10,251 | 9,822 |
Interest-bearing deposits in other banks | 473 | 1,128 |
Time deposits with other banks | 250 | 1,469 |
Restricted investment in bank stocks | 4,224 | 8,681 |
Net loans | 655,301 | 597,525 |
Mortgage servicing rights | 283 | 316 |
Accrued interest receivable | 3,405 | 4,041 |
FINANCIAL LIABILITIES: (Fair Value) | ||
Core deposits | 526,564 | 474,261 |
Time deposits | 235,134 | 195,136 |
Short-term borrowings | 54,655 | 174,491 |
Long-term borrowings | 55,809 | 45,077 |
Accrued interest payable | 606 | 785 |
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS (Fair Value) | 0 | |
Fair Value, Inputs, Level 1 [Member] | ||
FINANCIAL ASSETS: (Fair Value) | ||
Cash and due from banks | 10,251 | 9,822 |
Interest-bearing deposits in other banks | 0 | |
Time deposits with other banks | 0 | |
Restricted investment in bank stocks | 0 | |
Net loans | 0 | |
Mortgage servicing rights | 0 | |
Accrued interest receivable | 0 | |
FINANCIAL LIABILITIES: (Fair Value) | ||
Core deposits | 0 | |
Time deposits | 0 | |
Short-term borrowings | 0 | |
Long-term borrowings | 0 | |
Accrued interest payable | 0 | |
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS (Fair Value) | 0 | |
Fair Value, Inputs, Level 2 [Member] | ||
FINANCIAL ASSETS: (Fair Value) | ||
Cash and due from banks | 0 | |
Interest-bearing deposits in other banks | 473 | 1,128 |
Time deposits with other banks | 250 | 1,469 |
Restricted investment in bank stocks | 4,224 | 8,681 |
Net loans | 0 | |
Mortgage servicing rights | 0 | |
Accrued interest receivable | 3,405 | 4,041 |
FINANCIAL LIABILITIES: (Fair Value) | ||
Core deposits | 526,564 | 474,261 |
Time deposits | 235,134 | 195,136 |
Short-term borrowings | 54,655 | 174,491 |
Long-term borrowings | 55,809 | 45,077 |
Accrued interest payable | 606 | 785 |
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS (Fair Value) | 0 | |
Fair Value, Inputs, Level 3 [Member] | ||
FINANCIAL ASSETS: (Fair Value) | ||
Cash and due from banks | 0 | |
Interest-bearing deposits in other banks | 0 | |
Time deposits with other banks | 0 | |
Restricted investment in bank stocks | 0 | |
Net loans | 655,301 | 597,525 |
Mortgage servicing rights | $ 283 | 316 |
Accrued interest receivable | 0 | |
FINANCIAL LIABILITIES: (Fair Value) | ||
Core deposits | 0 | |
Time deposits | 0 | |
Short-term borrowings | 0 | |
Long-term borrowings | 0 | |
Accrued interest payable | 0 | |
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS (Fair Value) | $ 0 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Details) | Dec. 31, 2019USD ($) |
FAIR VALUE MEASUREMENTS | |
Minimum impaired loan balance that requires an appraisal to be obtained and reviewed annually for impaired loan valuation procedure | $ 250,000 |
Maximum impaired loan balance for which the bank completes a Certificate of Inspection | $ 250,000 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
REVENUE RECOGNITION | ||
Trust Assets, Fair Value Disclosure | $ 111,160,000 | $ 105,917,000 |
PARENT COMPANY FINANCIAL INFO_3
PARENT COMPANY FINANCIAL INFORMATION (BALANCE SHEETS) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
ASSETS | |||
Investment in banking subsidiary | $ 1,828 | $ 2,096 | |
Marketable equity securities, at fair value | 1,933 | 1,560 | |
TOTAL ASSETS | 1,007,226 | 1,012,000 | |
LIABILITIES | |||
TOTAL LIABILITIES | 878,474 | 895,244 | |
STOCKHOLDERS' EQUITY | |||
Common stock, par value $2.00 per share; authorized 20,000,000 shares as of December 31, 2019 and 2018; issued 6,048,506 as of December 31, 2019 and 5,996,322 as of December 31, 2018; outstanding 5,816,894 as of December 31, 2019 and 5,764,710 as of December 31, 2018 | 12,097 | 11,993 | |
Surplus | 38,365 | 37,255 | |
Retained earnings | 79,778 | 75,798 | |
Accumulated other comprehensive income (loss) | 4,221 | (2,581) | |
Treasury stock, at cost | (5,709) | (5,709) | |
TOTAL STOCKHOLDERS' EQUITY | 128,752 | 116,756 | $ 116,719 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 1,007,226 | 1,012,000 | |
Parent Company [Member] | Reportable Legal Entities [Member] | |||
ASSETS | |||
Cash | 10,993 | 9,988 | |
Investment in banking subsidiary | 116,417 | 105,755 | |
Marketable equity securities, at fair value | 1,933 | 1,560 | |
Prepaid expenses and other assets | 137 | 232 | |
TOTAL ASSETS | 129,480 | 117,535 | |
LIABILITIES | |||
Advances from banking subsidiary | 381 | 536 | |
Accrued expenses and other liabilities | 347 | 243 | |
TOTAL LIABILITIES | 728 | 779 | |
STOCKHOLDERS' EQUITY | |||
Common stock, par value $2.00 per share; authorized 20,000,000 shares as of December 31, 2019 and 2018; issued 6,048,506 as of December 31, 2019 and 5,996,322 as of December 31, 2018; outstanding 5,816,894 as of December 31, 2019 and 5,764,710 as of December 31, 2018 | 12,097 | 11,993 | |
Surplus | 38,365 | 37,255 | |
Retained earnings | 79,778 | 75,798 | |
Accumulated other comprehensive income (loss) | 4,221 | (2,581) | |
Treasury stock, at cost | (5,709) | (5,709) | |
TOTAL STOCKHOLDERS' EQUITY | 128,752 | 116,756 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 129,480 | $ 117,535 |
PARENT COMPANY FINANCIAL INFO_4
PARENT COMPANY FINANCIAL INFORMATION (STATEMENTS OF INCOME) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
INCOME | ||
Income before income tax expense | $ 11,341 | $ 9,670 |
INCOME TAX EXPENSE (BENEFIT) | 1,114 | 459 |
NET INCOME | 10,227 | 9,211 |
Reportable Legal Entities [Member] | Parent Company [Member] | ||
INCOME | ||
Dividends from subsidiary bank | 6,102 | 6,102 |
Net securities gains (losses) | 373 | (72) |
Other income | 81 | 76 |
TOTAL INCOME | 6,556 | 6,106 |
OPERATING EXPENSES | 125 | 176 |
Income before income tax expense | 6,431 | 5,930 |
INCOME TAX EXPENSE (BENEFIT) | 63 | (41) |
Income Before Equity in Undistributed Net Income of Subsidiary | 6,368 | 5,971 |
EQUITY IN UNDISTRIBUTED EARNINGS OF BANKING SUBSIDIARY | 3,859 | 3,240 |
NET INCOME | $ 10,227 | $ 9,211 |
PARENT COMPANY FINANCIAL INFO_5
PARENT COMPANY FINANCIAL INFORMATION (STATEMENTS OF COMPREHENSIVE INCOME) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Condensed Financial Statements, Captions [Line Items] | ||
Net Income | $ 10,227 | $ 9,211 |
Other comprehensive (loss) income: | ||
Total other comprehensive income (loss) | 6,802 | (4,133) |
Total Comprehensive Income | 17,029 | 5,078 |
Reportable Legal Entities [Member] | Parent Company [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net Income | 10,227 | 9,211 |
Other comprehensive (loss) income: | ||
Equity in other comprehensive (loss) income of banking subsidiary | 6,802 | (4,133) |
Total other comprehensive income (loss) | 6,802 | (4,133) |
Total Comprehensive Income | $ 17,029 | $ 5,078 |
PARENT COMPANY FINANCIAL INFO_6
PARENT COMPANY FINANCIAL INFORMATION (STATEMENTS OF CASH FLOWS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 10,227 | $ 9,211 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Deferred income tax expense (benefit) | 100 | 566 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 12,539 | 14,741 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock | 1,203 | 1,153 |
Dividends paid | (6,247) | (6,194) |
NET CASH USED IN FINANCING ACTIVITIES | (24,751) | 16,515 |
CASH AND CASH EQUIVALENTS, BEGINNING | 10,950 | 8,739 |
CASH AND CASH EQUIVALENTS, ENDING | 10,724 | 10,950 |
Reportable Legal Entities [Member] | Parent Company [Member] | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | 10,227 | 9,211 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
(Gains) losses on securities | (373) | 72 |
Deferred income tax expense (benefit) | 104 | 5 |
Equity in undistributed earnings of banking subsidiary | (3,859) | (3,240) |
Decrease (increase) in prepaid/accrued expenses and other assets/liabilities | 105 | (214) |
(Decrease) increase in advances from banking subsidiary | (155) | 211 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 6,049 | 6,045 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock | 1,203 | 1,153 |
Dividends paid | (6,247) | (6,194) |
NET CASH USED IN FINANCING ACTIVITIES | (5,044) | (5,041) |
INCREASE IN CASH AND CASH EQUIVALENTS | 1,005 | 1,004 |
CASH AND CASH EQUIVALENTS, BEGINNING | 9,988 | 8,984 |
CASH AND CASH EQUIVALENTS, ENDING | $ 10,993 | $ 9,988 |