Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 23, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | CITIZENS FINANCIAL SERVICES INC | ||
Entity Central Index Key | 739,421 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 151,208,703 | ||
Entity Common Stock, Shares Outstanding | 3,323,997 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash and cash equivalents: | |||
Noninterest-bearing | $ 16,854 | $ 14,088 | |
Interest-bearing | 900 | 10,296 | |
Total cash and cash equivalents | 17,754 | 24,384 | |
Interest bearing time deposits with other banks | 6,955 | 7,696 | |
Available-for-sale securities | 314,017 | 359,737 | |
Loans held for sale | 1,827 | 603 | |
Loans (net of allowance for loan losses: 2016, $8,886; 2015, $7,106) | 790,725 | 687,925 | |
Premises and equipment, net | 17,030 | 17,263 | |
Accrued interest receivable | 4,089 | 4,211 | |
Goodwill | [1] | 21,089 | 21,089 |
Bank owned life insurance | 26,223 | 25,535 | |
Other intangibles | 2,096 | 2,437 | |
Unsettled security sales | 7,759 | 0 | |
Other assets | 13,454 | 12,104 | |
TOTAL ASSETS | 1,223,018 | 1,162,984 | |
Deposits: | |||
Noninterest-bearing | 147,425 | 150,960 | |
Interest-bearing | 858,078 | 837,071 | |
Total deposits | 1,005,503 | 988,031 | |
Borrowed funds | 79,662 | 41,631 | |
Accrued interest payable | 720 | 734 | |
Other liabilities | 13,865 | 12,828 | |
TOTAL LIABILITIES | 1,099,750 | 1,043,224 | |
STOCKHOLDERS' EQUITY: | |||
Preferred Stock $1.00 par value; authorized 3,000,000 shares 2016 and 2015; none issued in 2016 or 2015 | 0 | 0 | |
Common Stock $1.00 par value; authorized 15,000,000 shares 2016 and 2015; issued 3,704,375 and 3,671,751 shares in 2016 and 2015,respectively | 3,704 | 3,672 | |
Additional paid-in capital | 42,250 | 40,715 | |
Retained earnings | 91,278 | 85,790 | |
Accumulated other comprehensive loss | (1,392) | (236) | |
Treasury stock, at cost: 384,671 and 335,876 shares for 2016 and 2015, respectively | (12,572) | (10,181) | |
TOTAL STOCKHOLDERS' EQUITY | 123,268 | 119,760 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,223,018 | $ 1,162,984 | |
[1] | Excludes fully amortized intangible assets |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
ASSETS: | ||
Loans, allowance for loan losses | $ 8,886 | $ 7,106 |
STOCKHOLDERS' EQUITY: | ||
Preferred Stock , par value (in dollars per share) | $ 1 | $ 1 |
Preferred Stock , authorized (in shares) | 3,000,000 | 3,000,000 |
Preferred Stock , issued (in shares) | 0 | 0 |
Common Stock, par value (in dollars per share) | $ 1 | $ 1 |
Common Stock, authorized (in shares) | 15,000,000 | 15,000,000 |
Common Stock, issued (in shares) | 3,704,375 | 3,671,751 |
Treasury stock, shares (in shares) | 384,671 | 335,876 |
Consolidated Statement of Incom
Consolidated Statement of Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
INTEREST AND DIVIDEND INCOME: | |||
Interest and fees on loans | $ 35,844 | $ 29,039 | $ 28,324 |
Interest-bearing deposits with banks | 221 | 142 | 82 |
Investment securities: | |||
Taxable | 3,687 | 3,102 | 3,337 |
Nontaxable | 2,970 | 3,152 | 3,354 |
Dividends | 283 | 218 | 194 |
TOTAL INTEREST AND DIVIDEND INCOME | 43,005 | 35,653 | 35,291 |
INTEREST EXPENSE: | |||
Deposits | 4,247 | 4,113 | 4,347 |
Borrowed funds | 794 | 707 | 606 |
TOTAL INTEREST EXPENSE | 5,041 | 4,820 | 4,953 |
NET INTEREST INCOME | 37,964 | 30,833 | 30,338 |
Provision for loan losses | 1,520 | 480 | 585 |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 36,444 | 30,353 | 29,753 |
NON-INTEREST INCOME: | |||
Service charges | 4,461 | 4,126 | 4,297 |
Trust | 693 | 673 | 688 |
Brokerage and insurance | 766 | 720 | 567 |
Investment securities gains, net | 255 | 429 | 616 |
Gains on loans sold | 449 | 404 | 236 |
Earnings on bank owned life insurance | 688 | 628 | 507 |
Other | 587 | 443 | 445 |
TOTAL NON-INTEREST INCOME | 7,899 | 7,423 | 7,356 |
NON-INTEREST EXPENSES: | |||
Salaries and employee benefits | 16,410 | 12,504 | 11,505 |
Occupancy | 1,900 | 1,424 | 1,287 |
Furniture and equipment | 644 | 506 | 362 |
Professional fees | 1,094 | 846 | 820 |
Federal depository insurance | 572 | 464 | 461 |
Pennsylvania shares tax | 690 | 713 | 686 |
Amortization of intangibles | 327 | 0 | 0 |
Merger and acquisition | 0 | 1,103 | 237 |
ORE expenses | 389 | 969 | 299 |
Other | 6,645 | 4,900 | 4,508 |
TOTAL NON-INTEREST EXPENSES | 28,671 | 23,429 | 20,165 |
Income before provision for income taxes | 15,672 | 14,347 | 16,944 |
Provision for income taxes | 3,034 | 2,721 | 3,559 |
NET INCOME | $ 12,638 | $ 11,626 | $ 13,385 |
PER COMMON SHARE DATA: | |||
NET INCOME - BASIC (in dollars per share) | $ 3.78 | $ 3.79 | $ 4.36 |
NET INCOME - DILUTED (in dollars per share) | 3.78 | 3.79 | 4.36 |
CASH DIVIDENDS PER SHARE (in dollars per share) | $ 1.66 | $ 1.71 | $ 2.15 |
Number of shares used in computation - basic (in shares) | 3,341,933 | 3,063,906 | 3,070,922 |
Number of shares used in computation - diluted (in shares) | 3,343,489 | 3,065,266 | 3,072,217 |
Consolidated Statement of Inco5
Consolidated Statement of Income (Parenthetical) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2016 | |
Consolidated Statement of Income [Abstract] | ||
Stock dividend percentage | 1.00% | |
Dividend paid date | Jun. 30, 2016 |
Consolidated Statement in Compr
Consolidated Statement in Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Consolidated Statement of Changes in Comprehensive Income [Abstract] | |||
Net income | $ 12,638 | $ 11,626 | $ 13,385 |
Securities available for sale | |||
Unrealized holding gain (loss) during the period | (1,105) | (920) | 5,465 |
Income tax benefit | 375 | 314 | (1,857) |
Securities available for sale | (730) | (606) | 3,608 |
Reclassification adjustment for gains included in income | (255) | (429) | (616) |
Income tax benefit | 87 | 146 | 209 |
Reclassification | (168) | (283) | (407) |
Change in unrecognized pension costs | (391) | (172) | (1,832) |
Income tax benefit | 133 | 58 | 623 |
Pension costs | (258) | (114) | (1,209) |
Net other comprehensive income (loss) | (1,156) | (1,003) | 1,992 |
Comprehensive income | $ 11,482 | $ 10,623 | $ 15,377 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Treasury Stock [Member] | Total |
Balance at Dec. 31, 2013 | $ 3,306 | $ 23,562 | $ 74,325 | $ (1,225) | $ (7,912) | $ 92,056 |
Balance (in shares) at Dec. 31, 2013 | 3,305,517 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 13,385 | 13,385 | ||||
Net other comprehensive income (loss) | 1,992 | 1,992 | ||||
Stock dividend | $ 29 | 1,568 | (1,597) | 0 | ||
Stock dividend (in shares) | 29,719 | |||||
Purchase of treasury stock | (814) | (814) | ||||
Restricted stock, executive and Board of Director awards | (189) | 19 | (170) | |||
Restricted stock vesting | 200 | 200 | ||||
Cash dividend reinvestment paid from treasury stock | 9 | (480) | 471 | 0 | ||
Cash dividends | (6,121) | (6,121) | ||||
Balance at Dec. 31, 2014 | $ 3,335 | 25,150 | 79,512 | 767 | (8,236) | 100,528 |
Balance (in shares) at Dec. 31, 2014 | 3,335,236 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 11,626 | 11,626 | ||||
Net other comprehensive income (loss) | (1,003) | (1,003) | ||||
Stock issued for acquisition | $ 337 | 15,647 | 15,984 | |||
Stock issued for acquisition (in shares) | 336,515 | |||||
Purchase of treasury stock | (2,455) | (2,455) | ||||
Restricted stock, executive and Board of Director awards | (256) | 308 | 52 | |||
Restricted stock vesting | 179 | 179 | ||||
Forfeited restricted stock | 7 | (7) | 0 | |||
Cash dividend reinvestment paid from treasury stock | (12) | (197) | 209 | 0 | ||
Cash dividends | (5,151) | (5,151) | ||||
Balance at Dec. 31, 2015 | $ 3,672 | 40,715 | 85,790 | (236) | (10,181) | 119,760 |
Balance (in shares) at Dec. 31, 2015 | 3,671,751 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 12,638 | 12,638 | ||||
Net other comprehensive income (loss) | (1,156) | (1,156) | ||||
Stock dividend | $ 32 | 1,542 | (1,574) | 0 | ||
Stock dividend (in shares) | 32,624 | |||||
Purchase of treasury stock | (3,227) | (3,227) | ||||
Restricted stock, executive and Board of Director awards | (197) | 288 | 91 | |||
Restricted stock vesting | 184 | 184 | ||||
Reissuance of treasury stock for employee stock purchase plan | (1) | 60 | 59 | |||
Forfeited restricted stock | 4 | (4) | 0 | |||
Cash dividend reinvestment paid from treasury stock | 3 | (495) | 492 | 0 | ||
Cash dividends | (5,081) | (5,081) | ||||
Balance at Dec. 31, 2016 | $ 3,704 | $ 42,250 | $ 91,278 | $ (1,392) | $ (12,572) | $ 123,268 |
Balance (in shares) at Dec. 31, 2016 | 3,704,375 |
Consolidated Statement of Chan8
Consolidated Statement of Changes in Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Consolidated Statement of Changes in Stockholders' Equity [Abstract] | |||
Purchase of treasury stock (in shares) | 66,110 | 49,465 | 15,474 |
Cash dividends (in dollars per share) | $ 1.66 | $ 1.71 | $ 2.15 |
Dividend paid date | Jun. 30, 2016 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Cash Flows from Operating Activities: | |||||||
Net income | $ 3,171 | $ 2,460 | $ 12,638 | $ 11,626 | $ 13,385 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Provision for loan losses | 750 | 120 | 1,520 | 480 | 585 | ||
Depreciation and amortization | 320 | 464 | 472 | ||||
Amortization and accretion on investment securities | 2,302 | 2,057 | 2,133 | ||||
Deferred income taxes | 362 | (192) | 478 | ||||
Investment securities gains, net | (100) | 1 | (255) | (429) | (616) | ||
Earnings on bank owned life insurance | (688) | (628) | (507) | ||||
Stock awards | 284 | 179 | 200 | ||||
Originations of loans held for sale | (22,237) | (18,945) | (11,129) | ||||
Proceeds from sales of loans held for sale | 21,462 | 19,243 | 11,146 | ||||
Realized gains on loans sold | (449) | (404) | (236) | ||||
(Increase) decrease in accrued interest receivable | 122 | (285) | 84 | ||||
Decrease in accrued interest payable | (14) | (36) | (139) | ||||
Other, net | 827 | (319) | 322 | ||||
Net cash provided by operating activities | 16,194 | 12,811 | 16,178 | ||||
Available-for-sale securities: | |||||||
Proceeds from sales of available-for-sale securities | 22,372 | 30,464 | 28,989 | ||||
Proceeds from maturity and principal repayments of securities | 67,782 | 48,103 | 41,756 | ||||
Purchase of securities | (55,600) | (111,304) | (56,257) | ||||
Proceeds from redemption of Regulatory Stock | 1,556 | 4,476 | 4,706 | ||||
Purchase of Regulatory Stock | (3,403) | (3,879) | (2,815) | ||||
Net increase in loans | (103,915) | (25,981) | (15,331) | ||||
Purchase of interest bearing time deposits | 0 | (500) | (3,480) | ||||
Proceeds from matured interest bearing time deposits with other banks | 744 | 0 | 0 | ||||
Purchase of bank owned life insurance | 0 | 0 | (5,123) | ||||
Purchase of premises, equipment and software | (587) | (776) | (1,309) | ||||
Proceeds from sale of foreclosed assets held for sale | 973 | 565 | 647 | ||||
Acquisition, net of cash paid | 0 | 77,895 | 0 | ||||
Net cash (used in) provided by investing activities | (70,078) | 19,063 | (8,217) | ||||
Cash Flows from Financing Activities: | |||||||
Net (decrease) increase in deposits | 17,472 | (11,132) | 25,617 | ||||
Proceeds from long-term borrowings | 543 | 5,291 | 6,820 | ||||
Repayments of long-term borrowings | (534) | (700) | (4,200) | ||||
Net increase (decrease) in short-term borrowed funds | 38,022 | (4,759) | (27,753) | ||||
Purchase of treasury stock | (3,227) | (2,455) | (814) | ||||
Purchase of restricted stock | 0 | (7) | (170) | ||||
Reissuance of treasury stock to employee stock purchase plan | 59 | 0 | 0 | ||||
Dividends paid | (5,081) | (5,151) | (6,121) | ||||
Net cash provided by (used in) financing activities | 47,254 | (18,913) | (6,621) | ||||
Net (decrease) increase in cash and cash equivalents | (6,630) | 12,961 | 1,340 | ||||
Cash and Cash Equivalents at Beginning of Year | 24,384 | 11,423 | 10,083 | ||||
Cash and Cash Equivalents at End of Year | $ 24,384 | 17,754 | 24,384 | 17,754 | 24,384 | 11,423 | |
Supplemental Disclosures of Cash Flow Information: | |||||||
Interest paid | 5,055 | 4,841 | 5,092 | ||||
Income taxes paid | 2,475 | 3,375 | 2,835 | ||||
Non-cash activities: | |||||||
Stock dividend | 1,574 | 0 | 1,597 | ||||
Real estate acquired in settlement of loans | 599 | 323 | 1,095 | ||||
Real estate transferred from other assets | 0 | 0 | 549 | ||||
Investments sold and not settled included in other assets | 7,759 | 0 | 0 | ||||
Non-cash assets acquired | |||||||
Goodwill | [1] | 21,089 | 21,089 | 21,089 | 21,089 | 21,089 | |
First National Bank of Fredericksburg [Member] | |||||||
Cash Flows from Operating Activities: | |||||||
Net income | (22) | ||||||
Non-cash assets acquired | |||||||
Available-for-sale securities | 23,831 | 0 | 23,831 | 0 | 23,831 | 0 | |
Interest bearing time deposits with other banks | 1,236 | 0 | 1,236 | 0 | 1,236 | 0 | |
Loans | 115,211 | 0 | 115,211 | 0 | 115,211 | 0 | |
Premises and equipment | 4,743 | 0 | 4,743 | 0 | 4,743 | 0 | |
Accrued interest receivable | 282 | 0 | 282 | 0 | 282 | 0 | |
Bank-owned life insurance | 4,598 | 0 | 4,598 | 0 | 4,598 | 0 | |
Intangibles | 1,981 | 0 | 1,981 | 0 | 1,981 | 0 | |
Deferred tax asset | 2,979 | 0 | 2,979 | 0 | 2,979 | 0 | |
Other assets | 2,332 | 0 | 2,332 | 0 | 2,332 | 0 | |
Goodwill | 10,833 | 0 | 10,833 | 0 | 10,833 | 0 | |
Total Non-cash assets acquired | 168,026 | 0 | 168,026 | 0 | 168,026 | 0 | |
Liabilities assumed | |||||||
Noninterest-bearing deposits | 71,971 | 0 | 71,971 | 0 | 71,971 | 0 | |
Interest-bearing deposits | 153,259 | 0 | 153,259 | 0 | 153,259 | 0 | |
Accrued interest payable | 14 | 0 | 14 | 0 | 14 | 0 | |
Other liabilities | 4,693 | 0 | 4,693 | 0 | 4,693 | 0 | |
Total liabilities assumed | 229,937 | 0 | 229,937 | 0 | 229,937 | 0 | |
Net non-cash liabilities acquired | (61,911) | 0 | (61,911) | 0 | (61,911) | 0 | |
Cash and cash equivalents acquired | $ 83,514 | $ 0 | $ 83,514 | $ 0 | $ 83,514 | $ 0 | |
[1] | Excludes fully amortized intangible assets |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business and Organization Citizens Financial Services, Inc. (individually and collectively, the "Company") is headquartered in Mansfield, Pennsylvania, and provides a full range of banking and related services through its wholly owned subsidiary, First Citizens Community Bank (the "Bank"), and its wholly owned subsidiary, First Citizens Insurance Agency, Inc. On December 11, 2015, the Company completed its acquisition of The First National Bank of Fredericksburg (FNB). As of December 31, 2016, the Bank operates twenty five full-service banking branches in Potter, Tioga, Bradford, Clinton, Lebanon, Lancaster, Berks and Schuylkill counties, Pennsylvania and Allegany County, New York and one limited branch office in Union county, Pennsylvania. The Bank also provides trust services, including the administration of trusts and estates, retirement plans, and other employee benefit plans, along with a brokerage division that provides a comprehensive menu of investment services. The Bank serves individual and corporate customers and is subject to competition from other financial institutions and intermediaries with respect to these services. The Company and Bank are supervised by the Board of Governors of the Federal Reserve System, while the Bank is subject to additional regulation and supervision by the Pennsylvania Department of Banking. A summary of significant accounting and reporting policies applied in the presentation of the accompanying financial statements follows: Basis of Presentation The financial statements are consolidated to include the accounts of the Company and its subsidiary, First Citizens Community Bank, and its subsidiary, First Citizens Insurance Agency, Inc. These statements have been prepared in accordance with U.S. generally accepted accounting principles. All significant inter-company accounts and transactions have been eliminated in the consolidated financial statements. Use of Estimates In preparing the financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses for the period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change relate to determination of the allowance for loan losses and deferred tax assets and liabilities. Operating Segments An operating segment is defined as a component of an enterprise that engages in business activities that generates revenue and incurs expense, and the operating results of which are reviewed by the chief operating decision maker in the determination of resource allocation and performance. While the Company's chief decision makers monitor the revenue streams of the various Company's products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Consistent with our internal reporting, the Company's business activities are reported as one segment, which is community banking. Cash and Cash Equivalents Cash equivalents include cash on hand, deposits in banks and interest-earning deposits. Interest-earning deposits with original maturities of 90 days or less are considered cash equivalents. Net cash flows are reported for loans, deposits and short term borrowing transactions. Interest bearing time deposits with other banks are not included with cash and cash equivalents as the original maturities were greater than 90 days. Investment Securities Investment securities at the time of purchase are classified as one of the three following types: Held-to-Maturity Securities Trading Securities Available-for-Sale Securities The amortized cost of investment in debt securities is adjusted for amortization of premiums and accretion of discounts, computed by a method that results in a level yield. Gains and losses on the sale of investment securities are computed on the basis of specific identification of the adjusted cost of each security. Securities are periodically reviewed for other-than-temporary impairment. A decline in value that is considered to be other-than-temporary is recorded as a loss within non-interest income in the Consolidated Statement of Income. Common stock of the Federal Reserve Bank, Federal Home Loan Bank of Pittsburgh (FHLB) and correspondent banks represent ownership in institutions which are wholly owned by other financial institutions. These equity securities are accounted for at cost and are classified as other assets. The fair value of investments, except certain state and municipal securities, is based on bid prices published in financial newspapers or bid quotations received from securities dealers. The fair value of certain state and municipal securities is not readily available through market sources other than dealer quotations, so fair value is based on quoted market prices of similar instruments, adjusted for differences between the quoted instruments and the instruments being valued. Loans Held for Sale Certain newly originated fixed-rate residential mortgage loans are classified as held for sale, because it is management's intent to sell these residential mortgage loans. The residential mortgage loans held for sale are carried at the lower of aggregate cost or market value. Loans Interest on all loans is recognized on the accrual basis based upon the principal amount outstanding. The accrual of interest income on loans is discontinued when, in the opinion of management, doubt exists as to the ability to collect such interest. Payments received on non-accrual loans are applied to the outstanding principal balance or recorded as interest income, depending upon our assessment of our ultimate ability to collect principal and interest. Loans are returned to the accrual status when factors indicating doubtful collectability cease to exist. The Company recognizes nonrefundable loan origination fees and certain direct loan origination costs over the life of the related loan as an adjustment of loan yield using the interest method. Allowance for Loan Losses The allowance for loan losses represents the amount which management estimates is adequate to provide for probable losses inherent in its loan portfolio. The allowance method is used in providing for loan losses. Accordingly, all loan losses are charged to the allowance and all recoveries are credited to it. The allowance for loan losses is established through a provision for loan losses which is charged to operations. The provision is based upon management's periodic evaluation of individual loans, the overall risk characteristics of the various portfolio segments, past experience with losses, the impact of economic conditions on borrowers, and other relevant factors. The estimates used in determining the adequacy of the allowance for loan losses are particularly susceptible to significant change in the near term. Impaired loans are other commercial, other agricultural, municipal, agricultural real estate, commercial real estate loans and certain residential mortgages cross collateralized with commercial relationships for which it is probable that the Company will not be able to collect all amounts due according to the contractual terms of the loan agreement. The Company individually evaluates such loans for impairment and does not aggregate loans by major risk classifications. The definition of "impaired loans" is not the same as the definition of "non-accrual loans," although the two categories overlap. The Company may choose to place a loan on non-accrual status due to payment delinquency or uncertain collectability, while not classifying the loan as impaired if the loan is not a commercial, agricultural, municipal or commercial real estate loan. Factors considered by management in determining impairment include payment status and collateral value. The amount of impairment for these types of impaired loans is determined by the difference between the present value of the expected cash flows related to the loan, using the original interest rate, and its recorded value; or, as a practical expedient in the case of a collateral dependent loan, the difference between the fair value of the collateral and the recorded amount of the loans. Mortgage loans on one to four family properties and all consumer loans are large groups of smaller balance homogeneous loans and are measured for impairment collectively. Loans that experience insignificant payment delays, which is defined as 90 days or less, generally are not classified as impaired. Management determines the significance of payment delays 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 borrower's prior payment record, and the amount of shortfall in relation to the principal and interest owed. The Company allocates the allowance based on the factors described below, which conform to the Company's loan classification policy. In reviewing risk within the Bank's loan portfolio, management has determined there to be several different risk categories within the loan portfolio. The allowance for loan losses consists of amounts applicable to: (i) residential real estate loans; (ii) commercial real estate (iii) agricultural real estate loans; (iv) construction; (v) consumer loans; (vi) other commercial loans (vii) other agricultural loans and (viii) state and political subdivision loans. Factors considered in this process include general loan terms, collateral, and availability of historical data to support the analysis. Historical loss percentages for each risk category are calculated and used as the basis for calculating allowance allocations. Certain qualitative factors are evaluated to determine additional inherent risks in the loan portfolio, which are not necessarily reflected in the historical loss percentages. These factors are then added to the historical allocation percentage to get the adjusted factor to be applied to non classified loans. The following qualitative factors are analyzed: · Level of and trends in delinquencies, impaired/classified loans § Change in volume and severity of past due loans § Volume of non-accrual loans § Volume and severity of classified, adversely or graded loans · Level of and trends in charge-offs and recoveries · Trends in volume, terms and nature of the loan portfolio · Effects of any changes in risk selection and underwriting standards and any other changes in lending and recovery policies, procedures and practices · Changes in the quality of the Bank's loan review system · Experience, ability and depth of lending management and other relevant staff · National, state, regional and local economic trends and business conditions § General economic conditions § Unemployment rates § Inflation / CPI § Changes in values of underlying collateral for collateral-dependent loans · Industry conditions including the effects of external factors such as competition, legal, and regulatory requirements on the level of estimated credit losses. · Existence and effect of any credit concentrations, and changes in the level of such concentrations · Any change in the level of board oversight The Company analyzes its loan portfolio each quarter to determine the appropriateness of its allowance for loan losses. Loan Charge-off Policies Consumer loans are generally fully or partially charged down to the fair value of collateral securing the asset when the loan is 180 days past due for open-end loans or 120 days past due for closed-end loans unless the loan is well secured and in the process of collection. All other loans are generally charged down to the net realizable value when the loan is 90 days past due. Troubled Debt Restructurings In situations where, for economic or legal reasons related to a borrower's financial difficulties, management may grant a concession for other than an insignificant period of time to the borrower that would not otherwise be considered, the related loan is classified as a Troubled Debt Restructuring (TDR). Management strives to identify borrowers in financial difficulty early and work with them to modify more affordable terms before their loan reaches nonaccrual status. These modified terms may include rate reductions, principal forgiveness, payment forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. In cases where borrowers are granted new terms that provide for a reduction of either interest or principal, management measures any impairment on the restructuring as noted above for impaired loans. In addition to the allowance for the pooled portfolios, management has developed a separate allowance for loans that are identified as impaired through a TDR. TDRs are excluded from pooled loss forecasts and a separate reserve is provided under the accounting guidance for loan impairment. Purchased Credit Impaired Loans The Company purchased loans in connection with its acquisition of FNB in 2015, some of which showed evidence of credit deterioration as of the acquisition since origination. These purchased credit impaired (PCI) loans were recorded at the amount paid, such that there is no carryover of the seller's allowance for loan losses. After acquisition, losses are recognized by an increase in the allowance for loan losses. Over the life of the loan, expected cash flows continue to be estimated. If this subsequent estimated indicated that the present value of expected cash flows is less than the carrying amount, a charge to the allowance for loan loss is made through a provision. If the estimate indicates that the present value of the expected cash flows is greater than the carrying amount, it is recognized as part of future interest income. Such purchased credit impaired loans are accounted for individually, and the Company estimates the amount and timing of expected cash flows for each loan. The expected cash flows in excess of the amount paid is recorded as interest income over the remaining life of the loan (accretable yield). The excess of the loan's contractual principal and interest over expected cash flows is not amortized over the remaining life of the loan (nonaccretable difference). For loans purchased that did not show evidence of credit deterioration, the difference between the fair value of the loan at the acquisition date and the loan's face value is being amortized as a yield adjustment over the estimated remaining life of the loan using the effective interest method. Foreclosed Assets Held For Sale Foreclosed assets acquired in settlement of loans are carried at fair value, less estimated costs to sell. Prior to foreclosure, the value of the underlying loan is written down to fair market value of the real estate or other assets to be acquired by a charge to the allowance for loan losses, if necessary. Any subsequent write-downs are charged against operating expenses. Operating expenses of such properties, net of related income and losses on disposition, are included in other expenses and gains and losses are included in other non-interest income or other non-interest expense. Premises and Equipment Land is carried at cost. Premises and equipment are stated at cost, less accumulated depreciation. Depreciation expense is computed on straight line and accelerated methods over the estimated useful lives of the assets, which range from 3 to 15 years for furniture, fixtures and equipment and 5 to 40 years for building premises. Repair and maintenance expenditures which extend the useful life of an asset are capitalized and other repair expenditures are expensed as incurred. When premises or equipment are retired or sold, the remaining cost and accumulated depreciation are removed from the accounts and any gain or loss is credited to income or charged to expense, respectively. Intangible Assets Intangible assets include core deposit intangibles, covenants not to compete and mortgage servicing rights (MSRs). Core deposit intangibles are a measure of the value of consumer demand and savings deposits acquired in business combinations accounted for as purchases. Covenants not to compete are payments made to former employees as compensation for agreeing not to work for competitors. The core deposit intangibles are being amortized over 10 years using the sum-of-the-years digits method of amortization, while the covenant not to compete is being amortized over four years on a straight line basis. MSR's arose from the Company originating certain loans for the express purpose of selling such loans in the secondary market. The Company maintains all servicing rights for these loans. The loans held for sale are carried at lower of cost or market. Originated MSRs are recorded by allocating total costs incurred between the loan and servicing rights based on their relative fair values. MSRs are amortized in proportion to the estimated servicing income over the estimated life of the servicing portfolio and measured annually for impairment. The recoverability of the carrying value of intangible assets is evaluated on an ongoing basis, and permanent declines in value, if any, are charged to expense. Goodwill The Company utilizes a two-step process for testing the impairment of goodwill on at least an annual basis. This approach could cause more volatility in the Company's reported net income because impairment losses, if any, could occur irregularly and in varying amounts. The Company may also perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. Based on the fair value of the reporting unit, no impairment of goodwill was recognized in 2016, 2015 or 2014. Bank Owned Life Insurance The Company has purchased life insurance policies on certain employees. Prior to January 1, 2015 . Additionally, as a result of the acquisition of FNB, the Company acquired life insurance policies on former FNB employees and directors. The policies obtained as part of the acquisition provide a fixed dollar benefit to the former employee or director beneficiaries, whether or not the insured person is affiliated with the Company at the time of his or her death. Bank owned life insurance is recorded at its cash surrender value, or the amount that can be realized. Increases in the cash surrender value are recognized as other non-interest income. The obligation under an split-dollar benefit agreements to former employees and directors or their beneficiaries have been recognized as liabilities on the consolidated balance sheet. Income Taxes The Company and the Bank file a consolidated federal income tax return. Deferred tax assets and liabilities are computed based on the difference between the financial statement basis and income tax basis of assets and liabilities using the enacted marginal tax rates. Deferred income tax expenses or benefits are based on the changes in the net deferred tax asset or liability from period to period. Employee Benefit Plans The Company has noncontributory defined benefit pension plans covering employees hired before January 1, 2007 and employees acquired as part of the FNB acquisition. It is the Company's policy to fund pension costs on a current basis to the extent deductible under existing tax regulations. Such contributions are intended to provide not only for benefits attributed to service to date, but also for those expected to be earned in the future. The Company has a defined contribution, 401(k) plan covering eligible employees. The employee may also contribute to the plan on a voluntary basis, up to a maximum percentage allowable not to exceed the limits of Code Sections 401(k). Under the plan, the Company also makes contributions on behalf of eligible employees, which vest immediately. For employees hired after January 1, 2007, in lieu of the pension plan, an additional annual discretionary 401(k) plan contribution is made and is equal to a percentage of an employee's base compensation. The Company also has a profit-sharing plan for employees which provide tax-deferred salary savings to plan participants. The Company has a deferred compensation plan for directors who have elected to defer all or portions of their fees until their retirement or termination from service. The Company has a restricted stock plan which covers eligible employees and non-employee corporate directors. Under the plan, awards are granted based upon performance related requirements and are subject to certain vesting criteria. Compensation cost related to restricted stock is recognized based on the market price of the stock at the grant date over the vesting period. The Company has an employee stock purchase plan that allows employees to withhold money from their paychecks, which is then utilized to purchase shares of the Company's stock on either the open market or through treasury stock, if shares are unavailable on the open market. The Company maintains a non-qualified supplemental executive retirement plan ("SERP") for certain executives to compensate those executive participants in the Company's noncontributory defined benefit pension plan whose benefits are limited by compensation limitations under current tax law. The SERP is considered an unfunded plan for tax and ERISA purposes and all obligations arising under the SERP are payable from the general assets of the Company. Expenses under the SERP are recognized as earned over the expected years of service. Advertising Costs Advertising costs are generally expensed as incurred. Comprehensive Loss The Company is required to present comprehensive income in a full set of general purpose financial statements for all periods presented. Other comprehensive loss is comprised of unrealized holding gains (losses) on the available-for-sale securities portfolio and unrecognized pension costs. Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (a new revenue recognition standard). The Update's core principle is that a company will recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, this Update specifies the accounting for certain costs to obtain or fulfill a contract with a customer and expands disclosure requirements for revenue recognition. This Update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Because the guidance does not apply to revenue associated with financial instruments, including loans and securities, we do not expect new standard, or any of the amendments, to result in a material change from our current accounting for revenue because the majority of the Company's financial instruments are not within the scope of Topic 606. However, we do expect that the standard will result in new disclosure requirements, which are currently being evaluated. In August 2015, the FASB issued ASU 2015-14, Revenue from Contract with Customers Topic 606 In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805). In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . The standard requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. A short-term lease is defined as one in which (a) the lease term is 12 months or less and (b) there is not an option to purchase the underlying asset that the lessee is reasonably certain to exercise. For short-term leases, lessees may elect to recognize lease payments over the lease term on a straight-line basis. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020. The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application The Company is currently assessing the practical expedients it may elect at adoption, but does not anticipate the amendments will have a significant impact to the financial statements. Based on the Company's preliminary analysis of its current portfolio, the impact to the Company's balance sheet is estimated to result in less than a 1% increase in assets and liabilities. The Company also anticipates additional disclosures to be provided at adoption In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606). Revenue from Contracts with Customers (Topic 606), Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718) Share-Based Payment In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606). The amendments in this Update affect entities with transactions included within the scope of Topic 606, which includes entities that enter into contracts with customers to transfer goods or services in exchange for consideration. The amendments in this Update do not change the core principle for revenue recognition in Topic 606. Instead, the amendments provide (1) more detailed guidance in a few areas and (2) additional implementation guidance and examples based on feedback the FASB received from its stakeholders. The amendments are expected to reduce the degree of judgment necessary to comply with Topic 606, which the FASB expects will reduce the potential for diversity arising in practice and reduce the cost and complexity of applying the guidance. The amendments in this Update affect the guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606) , which is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by Update 2014-09). ASU 2015-14, Revenue from Contracts with Customers (Topic 606) : Deferral of the Effective Date , defers the effective date of Update 2014-09 by one year. The Company is currently evaluating the impact the adoption of the standard will have on the Company's consolidated financial position or results of operations. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), which changes the impairment model for most financial assets. This Update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the Update is that financial assets measured at amortized cost should 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 allowance for credit losses should reflect management's current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be effected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted for annual and interim periods beginning after December 15, 2018. With certain exceptions, transition to the new requirements will be through a cumulative effect adjustment to opening retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We expect to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, but cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810) In October 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) In December 2016, the FASB issued ASU 2016-19, Technical Corrections and Improvements In December 2016, the FASB issued ASU 2016-20 , Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers Guarantees In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business Treasury Stock The purchase of the Company'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 last-in-first-out basis. Cash Flows The Company utilizes the net reporting of cash receipts and cash payments for deposit, short-term borrowing and lending activities. The Company considers amounts due from banks and interest-bearing deposits in banks as cash equivalents. Trust Assets and Income Assets held by the Company in a fiduciary or agency capacity for its customers are not included in the consolidated financial statements since such items are not assets of the Company. In accordance with industry practice, fees are recorded on the cash basis and approximate the fees which would have been recognized on the accrual basis. Earnings Per Share The following table sets forth the computation of earnings per share. Earnings per share calculations give retroactive effect to stock dividends declared by the Company. 2016 2015 2014 Basic earnings per share computation: Net income applicable to common stock $ 12,638,000 $ 11,626,000 $ 13,385,000 Weighted average common shares outstanding 3,341,933 3,063,906 3,070,922 Earnings per share - basic $ 3.78 $ 3.79 $ 4.36 Diluted earnings per share computation: Net income applicable to common stock $ 12,638,000 $ 11,626,000 $ 13,385,000 Weighted average common shares outstanding for basic earnings per share 3,341,933 3,063,906 3,070,922 Add: Dilutive effects of restricted stock 1,556 1,360 1,295 Weighted average common shares outstanding for dilutive earnings per share 3,343,489 3,065,266 3,072,217 Earnings per share - dilutive $ 3.78 $ 3.79 $ 4.36 Nonvested shares of restricted stock totaling 3,087, 2,105 and 2,248 were outstanding during 2016, 2015 and 2014, respectively, but were not included in the computation of diluted earnings per common share because to do so would be anti-dilutive. These anti-dilutive shares had per share prices ranging from $46.69-$53.15, $50.15-$53.15 and $37.10-$50.50 for 2016, 2015 and 2014, respectively. Reclassification Certain of the prior year amounts have been reclassified to conform to the current year presentation. Such reclassifications had no effect on net income or stockholders' equity. |
RESTRICTIONS ON CASH AND DUE FR
RESTRICTIONS ON CASH AND DUE FROM BANKS | 12 Months Ended |
Dec. 31, 2016 | |
RESTRICTIONS ON CASH AND DUE FROM BANKS [Abstract] | |
RESTRICTIONS ON CASH AND DUE FROM BANKS | 2. RESTRICTIONS ON CASH AND DUE FROM BANKS The Bank is required to maintain reserves, in the form of cash balances with the Federal Reserve Bank, against its deposit liabilities. The amount of such reserves was $2,297,000 and $1,646,000 at December 31, 2016 and 2015, respectively. Non-retirement account deposits with one financial institution are insured up to $250,000. At times, the Company maintains cash and cash equivalents with other financial institutions in excess of the insured amount. |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 12 Months Ended |
Dec. 31, 2016 | |
INVESTMENT SECURITIES [Abstract] | |
INVESTMENT SECURITIES | 3. INVESTMENT SECURITIES The amortized cost, gross unrealized gains and losses, and fair value of investment securities at December 31, 2016 and 2015 were as follows (in thousands): Gross Gross Amortized Unrealized Unrealized Fair 2016 Cost Gains Losses Value Available-for-sale securities: U.S. Agency securities $ 170,276 $ 407 $ (269 ) $ 170,414 U.S. Treasuries 2,999 1 - 3,000 Obligations of state and political subdivisions 95,956 1,463 (493 ) 96,926 Corporate obligations 3,000 50 - 3,050 Mortgage-backed securities in government sponsored entities 37,987 88 (347 ) 37,728 Equity securities in financial institutions 1,821 1,078 - 2,899 Total available-for-sale securities $ 312,039 $ 3,087 $ (1,109 ) $ 314,017 2015 Available-for-sale securities: U.S. Agency securities $ 199,749 $ 369 $ (527 ) $ 199,591 U.S. Treasuries 10,103 - (21 ) 10,082 Obligations of state and political subdivisions 99,856 3,080 (73 ) 102,863 Corporate obligations 14,583 68 (86 ) 14,565 Mortgage-backed securities in government sponsored entities 30,107 186 (89 ) 30,204 Equity securities in financial institutions 2,001 436 (5 ) 2,432 Total available-for-sale securities $ 356,399 $ 4,139 $ (801 ) $ 359,737 The following table shows the Company's gross unrealized losses and fair value, aggregated by investment category and length of time, that the individual securities have been in a continuous unrealized loss position, at December 31, 2016 and 2015 (in thousands). As of December 31, 2016, the Company owned 88 securities whose fair value was less than their cost basis. Less than Twelve Months Twelve Months or Greater Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized 2016 Value Losses Value Losses Value Losses U.S. Agency securities $ 50,947 $ (269 ) $ - $ - $ 50,947 $ (269 ) Obligations of states and political subdivisions 28,398 (472 ) 767 (21 ) 29,165 (493 ) Mortgage-backed securities in government sponsored entities 26,717 (330 ) 753 (17 ) 27,470 (347 ) Total securities $ 106,062 $ (1,071 ) $ 1,520 $ (38 ) $ 107,582 $ (1,109 ) 2015 U.S. Agency securities $ 123,591 $ (527 ) $ - $ - $ 123,591 $ (527 ) U.S. Treasuries 10,082 (21 ) - - 10,082 (21 ) Obligations of states and political subdivisions 7,023 (57 ) 2,914 (16 ) 9,937 (73 ) Corporate obligations 5,822 (61 ) 2,138 (25 ) 7,960 (86 ) Mortgage-backed securities in government sponsored entities 9,830 (77 ) 227 (12 ) 10,057 (89 ) Equity securities in financial institutions 106 (5 ) - - 106 (5 ) Total securities $ 156,454 $ (748 ) $ 5,279 $ (53 ) $ 161,733 $ (801 ) As of December 31, 2016, the Company's investment securities portfolio contained unrealized losses on agency securities issued or backed by the full faith and credit of the United States government or are generally viewed as having the implied guarantee of the U.S. government, obligations of states and political subdivisions and mortgage backed securities in government sponsored entities. For fixed maturity investments For equity securities where the fair value has been significantly below cost for one year, the Company's policy is to recognize an impairment loss unless sufficient evidence is available that the decline is not other than temporary and a recovery period can be predicted. As of December 31, 2016 and 2015, the Company had concluded that any impairment of its investment securities portfolio outlined in the above table is not other than temporary and is the result of interest rate changes, sector credit rating changes, or company-specific rating changes that are not expected to result in the non-collection of principal and interest during the period. Proceeds from sales of securities available-for-sale during 2016, 2015 and, 2014 were $22,372,000, $30,464,000 and $28,989,000, respectively. The gross gains realized during 2016 consisted of $72,000, $27,000, $80,000 and $133,000 from the sales of four agency securities, two US treasury notes, four municipal securities and portions of three equity security positions, respectively. The gross losses realized during 2016 consisted of $22,000 and $35,000 from the sales of four agency securities and six corporate securities. The gross gains realized during 2015 consisted of $196,000, $69,000, $99,000 and $76,000 from the sales of five agency securities, five mortgage backed securities, seven municipal securities and an entire equity security position, respectively. The gross loss of $11,000 was realized from the sale of one US treasury security. The gross gains realized during 2014 consisted of $177,000, $197,000, $172,000 and $101,000 from the sales eight agency securities, seven mortgage backed securities, one municipal security and a portion of one equity security, respectively. The gross loss of $31,000 was realized from the sale of two US treasury securities. Gross gains and gross losses were realized as follows (in thousands): 2016 2015 2014 Gross gains $ 312 $ 440 $ 647 Gross losses (57 ) (11 ) (31 ) Net gains $ 255 $ 429 $ 616 Investment securities with an approximate carrying value of $206,322,000 and $203,769,000 at December 31, 2016 and 2015, respectively, were pledged to secure public funds and certain other deposits as provided by law and certain borrowing arrangements of the Company. 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. The amortized cost and fair value of debt securities at December 31, 2016, by contractual maturity are shown below (in thousands). Municipal securities that have been refunded and will therefore pay-off on the call date are reflected in the table below utilizing the call date as the date of repayment as payment is guaranteed on that day: Amortized Cost Fair Value Available-for-sale securities: Due in one year or less $ 44,331 $ 44,484 Due after one year through five years 155,199 156,177 Due after five years through ten years 38,363 38,305 Due after ten years 72,325 72,152 Total $ 310,218 $ 311,118 |
LOANS AND RELATED ALLOWANCE FOR
LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES | 12 Months Ended |
Dec. 31, 2016 | |
LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES [Abstract] | |
LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES | 4. LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES The Company grants commercial, industrial, agricultural, residential, and consumer loans primarily to customers throughout north central and south central Pennsylvania and southern New York. Although the Company has a diversified loan portfolio at December 31, 2016 and 2015, a substantial portion of its debtors' ability to honor their contracts is dependent on the economic conditions within these regions. The following table summarizes the primary segments of the loan portfolio, as well as how those segments are analyzed within the allowance for loan losses as of December 31, 2016 and 2015 (in thousands): 2016 Total Loans Individually evaluated for impairment Loans acquired with deteriorated credit quality Collectively evaluated for impairment Real estate loans: Residential $ 207,423 $ 957 $ 35 $ 206,431 Commercial 252,577 5,742 1,969 244,866 Agricultural 123,624 3,346 738 119,540 Construction 25,441 - - 25,441 Consumer 11,005 - 4 11,001 Other commercial loans 58,639 5,994 621 52,024 Other agricultural loans 23,388 1,654 - 21,734 State and political subdivision loans 97,514 - - 97,514 Total 799,611 17,693 3,367 778,551 Less: Allowance for loan losses 8,886 487 - 8,399 Net loans $ 790,725 $ 17,206 $ 3,367 $ 770,152 2015 Total Loans Individually evaluated for impairment Loans acquired with deteriorated credit quality Collectively evaluated for impairment Real estate loans: Residential $ 203,407 $ 304 $ 35 $ 203,068 Commercial 237,542 6,068 2,170 229,304 Agricultural 57,822 167 738 56,917 Construction 15,011 - - 15,011 Consumer 11,543 - 9 11,534 Other commercial loans 57,549 5,640 866 51,043 Other agricultural loans 13,657 105 13,552 State and political subdivision loans 98,500 - - 98,500 Total 695,031 12,284 3,818 678,929 Less: Allowance for loan losses 7,106 355 - 6,751 Net loans $ 687,925 $ 11,929 $ 3,818 $ 672,178 As of December 31, 2016 and 2015, net unamortized loan fees and costs of $732,000 and $1,170,000, respectively, were included in the carrying value of loans. Upon acquisition, the Company evaluated whether an acquired loan was within the scope of ASC 310-30, Receivables-Loans and Debt Securities Acquired with Deteriorated Credit Quality. Purchased credit-impaired ("PCI") loans are loans that have evidence of credit deterioration since origination and it is probable at the date of acquisition that the Company will not collect all contractually required principal and interest payments. The fair value of PCI loans, on the acquisition date, was determined, primarily based on the fair value of the loans' collateral. The carrying value of PCI loans was $3,367,000 and $3,818,000 at December 31, 2016 and December 31, 2015, respectively. The carrying value of the PCI loans was determined by projected discounted contractual cash flows. On the acquisition date, the unpaid principal balance for all PCI loans was $6,969,000 and the estimated fair value of the loans was $3,809,000. Total contractually required payments on these loans, including interest, at the acquisition date was $9,913,000. However, the Company's preliminary estimate of expected cash flows was $4,474,000. At such date, the Company established a credit risk related non-accretable discount (a discount representing amounts which are not expected to be collected from the customer nor liquidation of collateral) of $5,439,000 relating to these PCI loans, reflected in the recorded net fair value. Such amount is reflected as a non-accretable fair value adjustment to loans. The Company further estimated the timing and amount of expected cash flows and established an accretable discount of $665,000 on the acquisition date relating to these PCI loans. Changes in the amortizable yield for PCI loans were as follows for the years ended December 31, 2016 and 2015 (in thousands): December 31, 2016 December 31, 2015 Balance at beginning of period $ 637 $ 665 Accretion (349 ) (28 ) Reclassification of non-accretable discount 101 - Balance at end of period $ 389 $ 637 The following table presents additional information regarding PCI loans: (In Thousands) December 31, 2016 December 31, 2015 Outstanding balance $ 6,487 $ 6,950 Carrying amount 3,367 3,818 Real estate loans serviced for Freddie Mac, Fannie Mae and the FHLB, which are not included in the Consolidated Balance Sheet, totaled $135,404,000 and $133,210,000 at December 31, 2016 and 2015, respectively. Loans sold to Freddie Mac and Fannie Mae were sold without recourse and total $102,444,000 and $92,773,000 at December 31, 2016 and 2015, The segments of the Bank's loan portfolio are disaggregated into classes to a level that allows management to monitor risk and performance. Residential real estate mortgages consists of 15 to 30 year first mortgages on residential real estate, while residential real estate home equities are consumer purpose installment loans or lines of credit secured by a mortgage which is often a second lien on residential real estate with terms of 15 years or less. Commercial real estate are business purpose loans secured by a mortgage on commercial real estate. Agricultural real estate are loans secured by a mortgage on real estate used in agriculture production. Construction real estate are loans secured by residential or commercial real estate used during the construction phase of residential and commercial projects. Consumer loans are typically unsecured or primarily secured by collateral other than real estate and overdraft lines of credit connected with customer deposit accounts. Other commercial loans are loans for commercial purposes primarily secured by non-real estate collateral. Other agricultural loans are loans for agricultural purposes primarily secured by non real estate collateral. State and political subdivisions are loans for state and local municipalities for capital and operating expenses or tax free loans used to finance commercial development. Management considers other commercial loans, other agricultural loans, commercial and agricultural real estate loans and state and political subdivision loans which are 90 days or more past due to be impaired. C ertain residential mortgages, home equity and consumer loans that are cross collateralized with commercial relationships determined to be impaired may be classified as impaired as well. The following table includes the recorded investment and unpaid principal balances for impaired loans by class, with the associated allowance amount as of December 31, 2016 and 2015, if applicable (in thousands) Recorded Recorded Unpaid Investment Investment Total Principal With No With Recorded Related 2016 Balance Allowance Allowance Investment Allowance Real estate loans: Mortgages $ 953 $ 570 $ 330 $ 900 $ 22 Home Equity 57 - 57 57 10 Commercial 7,958 5,697 45 5,742 45 Agricultural 3,347 2,000 1,347 3,347 54 Other commercial loans 6,159 5,135 859 5,994 326 Other agricultural loans 1,653 1,629 24 1,653 30 Total $ 20,127 $ 15,031 $ 2,662 $ 17,693 $ 487 Recorded Recorded Unpaid Investment Investment Total Principal With No With Recorded Related 2015 Balance Allowance Allowance Investment Allowance Real estate loans: Mortgages $ 281 $ 114 $ 129 $ 243 $ 26 Home Equity 61 - 61 61 11 Commercial 8,654 5,843 225 6,068 62 Agricultural 167 167 - 167 - Other commercial loans 5,535 4,653 987 5,640 256 Other agricultural loans 105 105 - 105 - Total $ 14,803 $ 10,882 $ 1,402 $ 12,284 $ 355 The following table includes the average investment in impaired loans and the income recognized on impaired loans for 2016, 2015 and 2014 (in thousands): Interest Average Interest Income Recorded Income Recognized 2016 Investment Recognized Cash Basis Real estate loans: Mortgages $ 590 $ 13 $ - Home Equity 59 4 - Commercial 5,959 69 1 Agricultural 361 17 - Consumer - - - Other commercial loans 5,715 87 6 Other agricultural loans 190 11 - Total $ 12,874 $ 201 $ 7 2015 Real estate loans: Mortgages $ 240 $ 12 $ - Home Equity 88 4 - Commercial 5,683 63 5 Agricultural 56 2 - Consumer - - - Other commercial loans 2,700 98 6 Other agricultural loans 37 1 - Total $ 8,804 $ 180 $ 11 2014 Real estate loans: Mortgages $ 198 $ 9 $ - Home Equity 130 4 - Commercial 7,270 54 - Agricultural - - - Consumer 10 - - Other commercial loans 2,031 79 - Other agricultural loans - - - Total $ 9,639 $ 146 $ - Credit Quality Information For commercial real estate, agricultural real estate, construction, other commercial, other agricultural loans and state and political subdivision loans, management uses a nine point internal risk rating system to monitor the credit quality. · Pass (Grades 1-5) – These loans are to customers with credit quality ranging from an acceptable to very high quality and are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral. · Special Mention (Grade 6) – This loan grade is in accordance with regulatory guidance and includes loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected. · Substandard (Grade 7) – This loan grade is in accordance with regulatory guidance and includes loans that have a well-defined weakness based on objective evidence and are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. · Doubtful (Grade 8) – This loan grade is in accordance with regulatory guidance and includes loans that have all the weaknesses inherent in a substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances. · Loss (Grade 9) – This loan grade is in accordance with regulatory guidance and includes loans that are considered uncollectible, or of such value that continuance as an asset is not warranted. To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay the loan as agreed, the Bank's loan rating process includes several layers of internal and external oversight. The Company's loan officers are responsible for the timely and accurate risk rating of the loans in each of their portfolios at origination and on an ongoing basis under the supervision of management. All commercial and agricultural loans are reviewed annually to ensure the appropriateness of the loan grade. In addition, the Bank engages an external consultant on at least an annual basis. The external consultant is engaged to 1) review a minimum of 55% of the dollar volume of the commercial loan portfolio on an annual basis, 2) review new loans originated for over $1.0 million in the last years, 3) review a majority of borrowers with commitments greater than or equal to $1.0 million, 4) review selected loan relationships over $750,000 which are over 30 days past due, or classified Special Mention, Substandard, Doubtful, or Loss, and 5) such other loans which management or the consultant deems appropriate. The following tables represent credit exposures by internally assigned grades as of December 31, 2016 and 2015 (in thousands) Pass Special Mention Substandard Doubtful Loss Ending Balance 2016 Real estate loans: Commercial $ 225,185 $ 14,045 $ 13,347 $ - $ - $ 252,577 Agricultural 110,785 8,231 4,608 - - 123,624 Construction 25,441 - - - - 25,441 Other commercial loans 51,396 2,049 5,105 89 - 58,639 Other agricultural loans 20,178 1,733 1,477 - - 23,388 State and political subdivision loans 83,620 13,066 828 - - 97,514 Total $ 516,605 $ 39,124 $ 25,365 $ 89 $ - $ 581,183 2015 Real estate loans: Commercial $ 217,544 $ 4,150 $ 15,816 $ 32 $ - $ 237,542 Agricultural 53,695 2,865 1,262 - - 57,822 Construction 14,422 589 - - - 15,011 Other commercial loans 51,297 446 5,669 137 - 57,549 Other agricultural loans 13,318 234 105 - - 13,657 State and political subdivision loans 98,500 - - - - 98,500 Total $ 448,776 $ 8,284 $ 22,852 $ 169 $ - $ 480,081 For residential real estate mortgages, home equities and consumer loans, credit quality is monitored based on whether the loan is performing or non-performing, which is typically based on the aging status of the loan and payment activity, unless a specific action, such as bankruptcy, repossession, death or significant delay in payment occurs to raise awareness of a possible credit event. Non-performing loans include those loans that are considered nonaccrual, described in more detail below and all loans past due 90 or more days. The following table presents the recorded investment in those loan classes based on payment activity as of December 31, 2016 and 2015 ( in thousands) 2016 Performing Non-performing PCI Total Real estate loans: Mortgages $ 147,047 $ 1,648 $ 35 $ 148,730 Home Equity 58,438 255 - 58,693 Consumer 10,892 109 4 11,005 Total $ 216,377 $ 2,012 $ 39 $ 218,428 2015 Performing Non-performing PCI Total Real estate loans: Mortgages $ 139,734 $ 1,270 $ 35 $ 141,039 Home Equity 62,236 132 - 62,368 Consumer 11,470 64 9 11,543 Total $ 213,440 $ 1,466 $ 44 $ 214,950 Aging Analysis of Past Due Loans by Class Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The following table includes an aging analysis of the recorded investment of past due loans as of December 31, 2016 and 2015 (in thousands): 30-59 Days 60-89 Days 90 Days Total Past Total Financing 90 Days and 2016 Past Due Past Due Or Greater Due Current PCI Receivables Accruing Real estate loans: Mortgages $ 630 $ 36 $ 1,109 $ 1,775 $ 146,920 $ 35 $ 148,730 $ 173 Home Equity 384 49 209 642 58,051 - 58,693 160 Commercial 1,757 58 4,302 6,117 244,491 1,969 252,577 - Agricultural - - 1,145 1,145 121,741 738 123,624 - Construction - - - - 25,441 - 25,441 - Consumer 115 40 83 238 10,763 4 11,005 67 Other commercial loans 95 35 4,004 4,134 53,884 621 58,639 - Other agricultural loans 43 34 5 82 23,306 - 23,388 5 State and political subdivision loans - - - - 97,514 - 97,514 - Total $ 3,024 $ 252 $ 10,857 $ 14,133 $ 782,111 $ 3,367 $ 799,611 $ 405 Loans considered non-accrual $ 172 $ 105 $ 10,452 $ 10,729 $ 725 $ - $ 11,454 Loans still accruing 2,852 147 405 3,404 781,386 3,367 788,157 Total $ 3,024 $ 252 $ 10,857 $ 14,133 $ 782,111 $ 3,367 $ 799,611 30-59 Days 60-89 Days 90 Days Total Past Total Financing 90 Days and 2015 Past Due Past Due Or Greater Due Current PCI Receivables Accruing Real estate loans: Mortgages $ 487 $ 283 $ 687 $ 1,457 $ 139,547 $ 35 $ 141,039 $ 321 Home Equity 630 15 121 766 61,602 - 62,368 73 Commercial 824 57 4,139 5,020 230,352 2,170 237,542 60 Agricultural 177 167 - 344 56,740 738 57,822 - Construction - - - - 15,011 - 15,011 - Consumer 239 37 49 325 11,209 9 11,543 9 Other commercial loans 143 214 1,010 1,367 55,316 866 57,549 160 Other agricultural loans 9 - - 9 13,648 - 13,657 - State and political subdivision loans - - - - 98,500 - 98,500 - Total $ 2,509 $ 773 $ 6,006 $ 9,288 $ 681,925 $ 3,818 $ 695,031 $ 623 Loans considered non-accrual $ 54 $ 171 $ 5,383 $ 5,608 $ 923 $ - $ 6,531 Loans still accruing 2,455 602 623 3,680 681,002 3,818 688,500 Total $ 2,509 $ 773 $ 6,006 $ 9,288 $ 681,925 $ 3,818 $ 695,031 Nonaccrual Loans Loans are considered for nonaccrual status upon reaching 90 days delinquency, unless the loan is well secured and in the process of collection, although the Company may be receiving partial payments of interest and partial repayments of principal on such loans or if full payment of principal and interest is not expected. The following table reflects the loans on nonaccrual status as of December 31, 2016 and 2015, respectively. The balances are presented by class of loan (in thousands): 2016 2015 Real estate loans: Mortgages $ 1,475 $ 949 Home Equity 95 59 Commercial 4,445 4,422 Agricultural 1,340 34 Construction - - Consumer 42 55 Other commercial loans 4,057 1,012 Other agricultural loans - - State and political subdivision - - $ 11,454 $ 6,531 Interest income on loans would have increased by approximately $603,000, $463,000 and $527,000 during 2016, 2015 and 2014, respectively, if these loans had performed in accordance with their terms. Troubled Debt Restructurings (TDR) In situations where, for economic or legal reasons related to a borrower's financial difficulties, management may grant a concession for other than an insignificant period of time to the borrower that would not otherwise be considered, the related loan is classified as a TDR. Management strives to identify borrowers in financial difficulty early and work with them to modify more affordable terms before their loan reaches nonaccrual status. These modified terms may include rate reductions, principal forgiveness, payment forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. In cases where borrowers are granted new terms that provide for a reduction of either interest or principal, management measures any impairment on the restructuring by calculating the present value of the revised loan terms and comparing this balance to the Company's investment in the loan prior to the restructuring. As these loans are individually evaluated, they are excluded from pooled portfolios when calculating the allowance for loan and lease losses and a separate allocation within the allowance for loan and lease losses is provided. Management continually evaluates loans that are considered TDRs, including payment history under the modified loan terms, the borrower's ability to continue to repay the loan based on continued evaluation of their operating results and cash flows from operations. Based on this evaluation management would no longer consider a loan to be a TDR when the relevant facts support such a conclusion. As of December 31, 2016, 2015 and 2014, included within the allowance for loan losses are reserves of $29,000, $37,000 and $26,000, respectively, that are associated with loans modified as TDRs . Loan modifications that are considered TDRs completed during the years ended December 31, 2016, 2015 and 2014 were as follows (dollars in thousands): Number of contracts Pre-modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Interest Modification Term Modification Interest Modification Term Modification Interest Modification Term Modification Real estate loans: Commercial - 4 $ - $ 1,188 $ - $ 1,188 Agricultural - 5 - 1,956 - 1,956 Other commercial loans - 3 - 3,076 - 3,076 Other agricultural loans - 7 - 1,558 - 1,558 Total - 19 $ - $ 7,778 $ - $ 7,778 Real estate loans: Mortgages 1 1 $ 71 $ 19 $ 71 $ 19 Total 1 1 $ 71 $ 19 $ 71 $ 19 Real estate loans: Commercial - 2 $ - $ 153 $ - $ 153 Total - 2 $ - $ 153 $ - $ 153 Recidivism, or the borrower defaulting on its obligation pursuant to a modified loan, results in the loan once again becoming a non-accrual loan. Recidivism occurs at a notably higher rate than do defaults on new origination loans, so modified loans present a higher risk of loss than do new origination loans. The following table presents the recorded investment in loans that were modified as TDRs during each 12-month period prior to the current reporting periods, which begin January 1, 2016, 2015 and 2014, respectively, and that subsequently defaulted during these reporting periods (dollars in thousands): December 31, 2016 December 31, 2015 December 31, 2014 Number of contracts Recorded investment Number of contracts Recorded investment Number of contracts Recorded investment Real estate loans: Commercial - $ - - $ - 1 $ 50 Total recidivism - $ - - $ - 1 $ 50 Foreclosed Assets Held For Sale Foreclosed assets acquired in settlement of loans are carried at fair value, less estimated costs to sell, and are included in other assets on the Consolidated Balance Sheet. As of December 31, 2016 and 2015 included with other assets are $1,036,000 and $1,354,000, respectively, of foreclosed assets. As of December 31, 2016, included within the foreclosed assets is $217,000 of consumer residential mortgages that were foreclosed on or received via a deed in lieu transaction prior to the period end. As of December 31, 2016, the Company has initiated formal foreclosure proceedings on $1,239,000 of consumer residential mortgages, which have not yet been transferred into foreclosed assets. Allowance for Loan Losses The following tables roll forward the balance of the allowance for loan and lease losses for the years ended December 31, 2016, 2015 and 2014 and is segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of December 31, 2016, 2015 and 2014 (in thousands): Balance at December 31, 2015 Charge-offs Recoveries Provision Balance at December 31, 2016 Individually evaluated for impairment Collectively evaluated for impairment Real estate loans: Residential $ 905 $ (85 ) $ - $ 244 $ 1,064 $ 32 $ 1,032 Commercial 3,376 (100 ) 479 (166 ) 3,589 45 3,544 Agricultural 409 - - 1,085 1,494 54 1,440 Construction 24 - - 23 47 - 47 Consumer 102 (100 ) 88 32 122 - 122 Other commercial loans 1,183 (55 ) 33 166 1,327 326 1,001 Other agricultural loans 122 - - 190 312 30 282 State and political subdivision loans 593 - - 240 833 - 833 Unallocated 392 - - (294 ) 98 - 98 Total $ 7,106 $ (340 ) $ 600 $ 1,520 $ 8,886 $ 487 $ 8,399 Balance at December 31, 2014 Charge-offs Recoveries Provision Balance at December 31, 2015 Individually evaluated for impairment Collectively evaluated for impairment Real estate loans: Residential $ 878 $ (66 ) $ - $ 93 $ 905 $ 37 $ 868 Commercial 3,419 (84 ) 14 27 3,376 62 3,314 Agricultural 451 (42 ) 409 - 409 Construction 26 - - (2 ) 24 - 24 Consumer 84 (47 ) 33 32 102 - 102 Other commercial loans 1,007 (41 ) 2 215 1,183 256 927 Other agricultural loans 217 (95 ) 122 122 State and political - subdivision loans 545 - - 48 593 - 593 Unallocated 188 - - 204 392 - 392 Total $ 6,815 $ (238 ) $ 49 $ 480 $ 7,106 $ 355 $ 6,751 Balance at December 31, 2013 Charge-offs Recoveries Provision Balance at December 31, 2014 Individually evaluated for impairment Collectively evaluated for impairment Real estate loans: Residential $ 946 $ (97 ) $ - $ 29 $ 878 $ 25 $ 853 Commercial 3,983 (516 ) 15 (63 ) 3,419 72 3,347 Agricultural 575 (124 ) 451 451 Construction 50 - - (24 ) 26 - 26 Consumer 105 (47 ) 27 (1 ) 84 - 84 Other commercial loans 686 (250 ) - 571 1,007 1 1,006 Other agricultural loans 256 (39 ) 217 217 State and political - subdivision loans 330 - - 215 545 - 545 Unallocated 167 - - 21 188 - 188 Total $ 7,098 $ (910 ) $ 42 $ 585 $ 6,815 $ 98 $ 6,717 As discussed in Footnote 1, management evaluates various qualitative factors on a quarterly basis. The following are explanations for the changes in the allowance by portolio segments: 2016 Residential - There was an increase in the historical loss factor for residential loans when comparing 2015 and 2016. The specific reserve for residential loans decreased slightly between 2015 and 2016. The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans were increased for residential loans due to an increase in past due, non-accrual and classified loans. The qualitative factor for national, state, regional and local economic trends and business conditions was increased for residential loan categories due to an increase in the unemployment rates in the local economy during 2016. Commercial real estate– There was a decrease in the historical loss factor for commercial real estate loans when comparing 2015 and 2016. The specific reserve for commercial real estate loans decreased slightly between 2015 and 2016. The qualitative factor for national, state, regional and local economic trends and business conditions was increased for all commercial real estate loans due to an increase in the unemployment rates in the local economy during 2016. The qualitative factors for changes in quality of the institutions loan review system were increased for commercial real estate loans due to the addition of new staff and processes. Agricultural real estate – There was no change in the historical loss factor for agricultural real estate loans from 2015 to 2016. The specific reserve for agricultural real estate loans increased from 2015 to 2016. The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans was increased for agricultural real estate due to an increase in past due, non-accrual and classified loans. The qualitative factor for industry conditions, including the effects of external factors such as competition, legal, and regulatory requirements on the level of estimated credit losses, was increased for agricultural real estate due to the decrease in the price received for product sold and the increase in feed costs that has occurred in 2016, which negatively affected customer earnings. The qualitative factor for national, state, regional and local economic trends and business conditions was increased for agricultural real estate loans due to an increase in the unemployment rates in the local economy during 2016. The qualitative factors for changes in quality of the institutions loan review system were increased for agricultural real estate due to the addition of new staff and processes. The qualitative factors for trends in volume, terms and nature of the loan portfolio were increased for agricultural real estate loans due to growth in these loan categories. Other commercial - There was an increase in the historical loss factor for other commercial loans when comparing 2015 and 2016. The specific reserve for other commercial loans increased from 2015 to 2016. The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans was not increased due to the increase being caused by one relationship instead of a larger trend. The qualitative factor for national, state, regional and local economic trends and business conditions was increased for other commercial loans due to an increase in the unemployment rates in the local economy during 2016. The qualitative factors for changes in quality of the institutions loan review system were increased for other commercial due to the addition of new staff and processes. Other agricultural - There was no change in the historical loss factor for other agricultural loans from 2015 to 2016. The specific reserve for other agricultural loans increased from 2015 to 2016. The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans were increased for other agricultural loans due to an increase in past due, non-accrual and classified loans The qualitative factor for industry conditions, including the effects of external factors such as competition, legal, and regulatory requirements on the level of estimated credit losses, was increased for other agricultural loans due to the decrease in the price received for product sold and the increase in feed costs that has occurred in 2016, which negatively affected customer earnings. The qualitative factor for national, state, regional and local economic trends and business conditions was increased for other agricultural loan categories due to an increase in the unemployment rates in the local economy during 2016. The qualitative factors for changes in quality of the institutions loan review system were increased for other agricultural loans due to the addition of new staff and processes. The qualitative factors for trends in volume, terms and nature of the loan portfolio were increased for other agricultural loans due to growth in these loan categories. Municipal loans - There was no changes in the historical loss factor or specific reserve for municipal loans from 2015 to 2016. The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans were increased for municipal loans due to an increase in classified loans. The qualitative factor for national, state, regional and local economic trends and business conditions was increased for municipal loans due to an increase in the unemployment rates in the local economy during 2016. The qualitative factors for trends in volume, terms and nature of the loan portfolio were decreased for municipal loans due to this loan segment making up a smaller portion of the Bank's overall loan portfolio as we continue to grow commercial and agricultural loans. The qualitative factors for experience, ability, and depth of lending management was decreased for municipal loans due to employees gaining additional experience and the use of a third party in reviewing loan information. 2015 Residential - There was a decrease in the historical loss factor for residential loans when comparing 2014 and 2015. The specific reserve for residential loans increased slightly between 2014 and 2015. The qualitative factor for levels of and trends in charge-offs and recoveries was increased for residential real estate loans due to the increase in charge-offs compared to historical norms for the Company. The qualitative factors for changes in levels of and trends in delinquencies and impaired/classified loans was increased for residential mortgages due to increases in the amount of non-performing loans. The qualitative factor for national, state, regional and local economic trends and business conditions was increased for residential loan categories due to an increase in the unemployment rates in the local economy during 2015 and the reduction in natural gas exploration and extraction activity. Commercial real estate– There was an increase in the historical loss factor for commercial real estate loans when comparing 2014 and 2015. The specific reserve for commercial real estate loans decreased slightly between 2014 and 2015. The qualitative factor for national, state, regional and local economic trends and business conditions was increased for all commercial real estate loans due to an increase in the unemployment rates in the local economy during 2015 and the reduction in natural gas exploration and extraction activity. The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans were increased for commercial real estate loans due to an increase in the amount of loans classified as substandard. The qualitative factor for levels of and trends in charge-offs and recoveries was decreased for commercial real estate due to the decrease in charge-offs compared to the prior year as charge-offs returned to historical norms for the Bank. The qualitative factor for experience, ability and depth of lending management and other relevant staff was decreased for commercial real estate, due to the length of time employees involved throughout the loan process have been in their positions. Agricultural real estate – There were no changes in the historical loss factor and specifc reserve for agricultural real estate loans from 2014 to 2015. The qualitative factor for national, state, regional and local economic trends and business conditions was increased for all agricultural real estate loans due to an increase in the unemployment rates in the local economy during 2015 and the reduction in natural gas exploration and extraction activity. The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans were decreased for agricultural real estate to the decrease in the amount of loans classified as substandard, excluding loans acquired as part of the FNB acquisition. The qualitative factor for experience, ability and depth of lending management and other relevant staff was decreased for agricultural real estate, due to the length of time employees involved throughout the loan process have been in their positions. The qualitative factor for industry conditions, including the effects of external factors such as competition, legal, and regulatory requirements on the level of estimated credit losses, was increased for agricultural real estate due to the decrease in the price received for product sold and the increase in feed costs that has occurred in 2015, which negatively affected customer earnings. Other commercial - There was a decrease in the historical loss factor for other commercial loans when comparing 2014 and 2015. The specific reserve for other commercial loans increased from 2014 to 2015. The qualitative factor for national, state, regional and local economic trends and business conditions was increased for other commercial loans due to an increase in the unemployment rates in the local economy during 2015 and the reduction in |
PREMISES & EQUIPMENT
PREMISES & EQUIPMENT | 12 Months Ended |
Dec. 31, 2016 | |
PREMISES & EQUIPMENT [Abstract] | |
PREMISES & EQUIPMENT | 5. PREMISES & EQUIPMENT Premises and equipment at December 31, 2016 and 2015 are summarized as follows (in thousands): December 31, 2016 2015 Land $ 5,110 $ 5,110 Buildings 17,315 17,349 Furniture, fixtures and equipment 6,678 6,636 Construction in process 5 88 29,108 29,183 Less: accumulated depreciation 12,078 11,920 Premises and equipment, net $ 17,030 $ 17,263 Depreciation expense amounted to $763,000, $608,000 and $537,000 for 2016, 2015 and 2014, respectively. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 6. GOODWILL AND OTHER INTANGIBLE ASSETS The following table provides the gross carrying value and accumulated amortization of intangible assets as of December 31, 2016 and 2015 (in thousands): December 31, 2016 December 31, 2015 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value Amortized intangible assets (1): MSRs $ 1,471 $ (787 ) $ 684 $ 1,336 $ (638 ) $ 698 Core deposit intangibles 1,641 (320 ) 1,321 1,641 (25 ) 1,616 Covenant not to compete 125 (34 ) 91 125 (2 ) 123 Total amortized intangible assets $ 3,237 $ (1,141 ) $ 2,096 $ 3,102 $ (665 ) $ 2,437 Unamortized intangible assets: Goodwill $ 21,089 $ 21,089 (1) Excludes fully amortized intangible assets The following table provides the current year and estimated future amortization expense for the next five years of amortized intangible assets (in thousands). We based our projections of amortization expense shown below on existing asset balances at December 31, 2016. Future amortization expense may vary from these projections: MSRs Core deposit intangibles Covenant not to compete Total Year ended December 31, 2016 (actual) $ 173 $ 295 $ 32 $ 500 Estimate for year ended December 31, 2017 177 266 31 474 2018 143 236 30 409 2019 113 206 30 349 2020 87 177 - 264 2021 64 147 - 211 |
FEDERAL HOME LOAN BANK (FHLB) S
FEDERAL HOME LOAN BANK (FHLB) STOCK | 12 Months Ended |
Dec. 31, 2016 | |
FEDERAL HOME LOAN BANK (FHLB) STOCK [Abstract] | |
FEDERAL HOME LOAN BANK (FHLB) STOCK | 7. FEDERAL HOME LOAN BANK (FHLB) STOCK The Bank is a member of the FHLB of Pittsburgh and as such, is required to maintain a minimum investment in stock of the FHLB that varies with the level of advances outstanding with the FHLB. As of December 31, 2016 and 2015, the Bank held $4,542,000 and $2,800,000, respectively, of FHLB stock. |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2016 | |
DEPOSITS [Abstract] | |
DEPOSITS | 8. DEPOSITS The following table shows the breakdown of deposits as of December 31, 2016 and 2015, by deposit type (in thousands): 2016 2015 Non-interest-bearing deposits $ 147,425 $ 150,960 NOW accounts 305,862 279,655 Savings deposits 170,722 170,277 Money market deposit accounts 116,880 105,229 Certificates of deposit 264,614 281,910 Total $ 1,005,503 $ 988,031 Certificates of deposit of $250,000 or more amounted to $56,743,000 and $51,818,000 at December 31, 2016 and 2015, respectively. Following are maturities of certificates of deposit as of December 31, 2016 (in thousands): 2017 $ 128,641 2018 47,673 2019 35,722 2020 25,036 2021 22,587 Thereafter 4,955 Total certificates of deposit $ 264,614 |
BORROWED FUNDS AND REPURCHASE A
BORROWED FUNDS AND REPURCHASE AGREEMENTS | 12 Months Ended |
Dec. 31, 2016 | |
BORROWED FUNDS AND REPURCHASE AGREEMENTS [Abstract] | |
BORROWED FUNDS AND REPURCHASE AGREEMENTS | 9. BORROWED FUNDS AND REPURCHASE AGREEMENTS The following table shows the breakdown of borrowed funds as of December 31, 2016 and 2015, (dollars in thousands): Securities Sold Under Total Agreements to FHLB Federal Funds FRB Notes Term Borrowed Repurchase(a) Advances(b) Line (c) BIC Line (d) Payable(e) Loans(f) Funds 2016 Balance at December 31 $ 14,307 $ 41,330 $ - $ - $ 7,500 $ 16,525 $ 79,662 Highest balance at any month-end 16,132 45,125 - - 7,500 16,525 85,282 Average balance 15,057 7,917 2 3 7,500 16,525 47,004 Weighted average interest rate: Paid during the year 0.49 % 0.63 % 0.76 % 1.00 % 3.55 % 2.44 % 1.69 % As of year-end 0.67 % 0.74 % 0.00 % 0.00 % 3.79 % 2.44 % 1.36 % 2015 Balance at December 31 $ 16,008 $ 1,598 $ - $ - $ 7,500 $ 16,525 $ 41,631 Highest balance at any month-end 16,008 26,996 - - 7,500 20,569 71,073 Average balance 5,998 5,218 - - 7,500 17,984 36,700 Weighted average interest rate: Paid during the year 0.82 % 0.35 % 0.00 % 0.77 % 3.14 % 2.25 % 1.93 % As of year-end 0.45 % 0.43 % 0.00 % 0.00 % 3.33 % 2.40 % 1.74 % (a) We utilize securities sold under agreements to repurchase to facilitate the needs of our customers and to facilitate secured short-term funding needs. Securities sold under agreements to repurchase are stated at the amount of cash received in connection with the transaction. We monitor collateral levels on a continuous basis. We may be required to provide additional collateral based on the fair value of the underlying securities. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents. The collateral pledged on the repurchase agreements by the remaining contractual maturity of the repurchase agreements in the Consolidated Balance Sheets as of December 31 , 2016 December 31, 2015 Remaining Contractual Maturity of the Agreements Overnight and Up to Greater than 2016 Continuous 30 Days 30 - 90 Days 90 days Total Repurchase Agreements: U.S. agency securities $ 16,118 $ - $ - $ 2,059 $ 18,177 Total carrying value of collateral pledged $ 16,118 $ - $ - $ 2,059 $ 18,177 Total liability recognized for repurchase agreements $ 14,307 2015 Repurchase Agreements: U.S. agency securities $ 18,144 $ - $ - $ 2,049 $ 20,193 Total carrying value of collateral pledged $ 18,144 $ - $ - $ 2,049 $ 20,193 Total liability recognized for repurchase agreements $ 16,008 (b) FHLB Advances consist of an "Open RepoPlus" agreement with the FHLB of Pittsburgh. FHLB "Open RepoPlus" advances are short-term borrowings that bear interest based on the FHLB discount rate or Federal Funds rate, whichever is higher. The Company has a borrowing limit of $343,209,000, inclusive of any outstanding advances. FHLB advances are secured by a blanket security agreement that includes the Company's FHLB stock, as well as certain investment and mortgage-backed securities held in safekeeping at the FHLB and certain residential and commercial mortgage loans. (c) The federal funds line consists of an unsecured line from a third party bank at market rates. The Company has a borrowing limit of $10,000,000, inclusive of any outstanding balances. No specific collateral is required to be pledged for these borrowings. (d) The Federal Reserve Bank Borrower in Custody (FRB BIC) Line consists of a borrower in custody in agreement open in January 2010 with the Federal Reserve Bank of Philadelphia secured by municipal loans maintained in the Company's possession. As of December 31, 2016 and 2015, the Company has a borrowing limit of $4,360,000 and $7,949,000, respectively, inclusive of any outstanding advances. The approximate carrying value of the municipal loan collateral was $15,560,000 and $16,146,000 as of December 31, 2016 and 2015, respectively. (e) In December 2003, the Company formed a special purpose entity ("Entity") to issue $7,500,000 of floating rate obligated mandatory redeemable trust preferred securities as part of a pooled offering. The rate was determined quarterly and floated based on the 3 month LIBOR plus 2.80. The Entity may redeem them, in whole or in part, at face value after December 17, 2008, and on a quarterly basis thereafter. The Company borrowed the proceeds of the issuance from the Entity in December 2003 in the form of a $7,500,000 note payable. Debt issue costs of $75,000 have been capitalized and fully amortized as of December 31, 2008. Under current accounting rules, the Company's minority interest in the Entity was recorded at the initial investment amount and is included in the other assets section of the balance sheet. The Entity is not consolidated as part of the Company's consolidated financial statements. (f) December 31, December 31, Interest Rate Maturity 2016 2015 Fixed: 2.29 % October 2, 2017 2,000 2,000 2.72 % July 12, 2018 1,000 1,000 1.87 % February 4, 2019 2,000 2,000 2.61 % February 3, 2021 2,000 2,000 3.52 % July 12, 2021 2,000 2,000 2.37 % August 20, 2021 2,800 2,800 2.08 % January 6, 2022 4,725 4,725 Total term loans $ 16,525 $ 16,525 Following are maturities of borrowed funds as of December 31, 2016 (in thousands): 2017 $ 64,033 2018 1,000 2019 2,000 2020 570 2021 7,334 Thereafter 4,725 Total borrowed funds $ 79,662 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2016 | |
EMPLOYEE BENEFIT PLANS [Abstract] | |
EMPLOYEE BENEFIT PLANS | 10. EMPLOYEE BENEFIT PLANS Noncontributory Defined Benefit Pension Plan The Bank sponsors a trusteed, noncontributory defined benefit pension plan covering substantially all employees and officers hired prior to January 1, 2007. Additionally, the Bank assumed the noncontributory defined benefit pension plan of FNB when it was acquired during 2015. The FNB plan was frozen prior to the acquisition and therefore, no additional benefits will accrue for employees covered under that plan. These two plans are collectively referred to herein as "the Plans". The pension plans call for benefits to be paid to eligible employees at retirement based primarily upon years of service with the Bank and compensation rates during employment. Upon retirement or other termination of employment, employees can elect either an annuity benefit or a lump sum distribution of vested benefits in the pension plan. The Bank's funding policy is to make annual contributions, if needed, based upon the funding formula developed by the pension plans' actuary. For the years ended December 31, 2016, 2015 and 2014, contributions to the pension plans totaled $818,000, $400,000 and $300,000, respectively. In lieu of the pension plan, employees with a hire date of January 1, 2007 or later are eligible to receive, after meeting length of service requirements, an annual discretionary 401(k) plan contribution from the Bank equal to a percentage of an employee's base compensation. The contribution amount is placed in a separate account within the 401(k) plan and is subject to a vesting requirement. Contributions by the Company totaled $82,000, $61,000 and $46,000 for 2016, 2015 and 2014, respectively. The following table sets forth the obligation and funded status as of December 31 (in thousands): 2016 2015 Change in benefit obligation Benefit obligation at beginning of year $ 17,809 $ 11,777 Benefit obligation acquired as part of FNB acquisition - 6,377 Service cost 345 352 Interest cost 692 424 Actuarial (Gain) / Loss 439 (456 ) Benefits paid (682 ) (665 ) Benefit obligation at end of year 18,603 17,809 Change in plan assets Fair value of plan assets at beginning of year 14,786 11,039 Fair value of plan assets at acquisition - 4,053 Actual return (loss) on plan assets 864 (41 ) Employer contribution 818 400 Benefits paid (682 ) (665 ) Fair value of plan assets at end of year 15,786 14,786 Funded status $ (2,817 ) $ (3,023 ) Amounts not yet recognized as a component of net periodic pension cost as of December 31 (in thousands): Amounts recognized in accumulated other comprehensive loss consists of: 2016 2015 Net loss $ 4,263 $ 3,919 Prior service cost (175 ) (222 ) Total $ 4,088 $ 3,697 The accumulated benefit obligation for the defined benefit pension plan was $18,603,000 and $17,809,000 at December 31, 2016 and 2015, respectively. The components of net periodic benefit costs for the years ended December 31 are as follows (in thousands): 2016 2015 2014 Service cost $ 345 $ 352 $ 307 Interest cost 692 424 415 Return on plan assets (1,034 ) (791 ) (786 ) Net amortization and deferral 219 205 51 Net periodic benefit cost $ 222 $ 190 $ (13 ) The estimated net loss and prior service cost that will be amortized from accumulated other comprehensive loss into the net periodic benefit cost in 2017 is $286,000 and $(47,000), respectively. The weighted-average assumptions used to determine benefit obligations at December 31, 2016 and 2015 is summarized in the following table. The change in the discount rate is the primary driver of the actuarial loss that occurred in 2016 of $439,000. 2016 2015 Discount rate 3.78% 3.94% Rate of compensation increase 3.00% 3.00% The weighted-average assumptions used to determine net periodic benefit cost (income) for the year ended December 31: 2016 2015 2014 Discount rate 3.94% 3.61% 4.30% Expected long-term return on plan assets 7.00% 7.00% 7.50% Rate of compensation increase 3.00% 3.00% 3.00% The long-term rate of return on plan assets gives consideration to returns currently being earned on plan assets as well as future rates expected to be earned. The investment objective is to maximize total return consistent with the interests of the participants and beneficiaries, and prudent investment management. The allocation of the pension plan assets is determined on the basis of sound economic principles and is continually reviewed in light of changes in market conditions. Asset allocation favors equity securities, with a target allocation of 50-70%. The target allocation for debt securities is 30-50%. At December 31, 2016, the pension plan had a sufficient cash and money market position in order to re-allocate the equity portfolio for diversification purposes and reduce risk in the total portfolio. The following table sets forth by level, within the fair value hierarchy as defined in footnote 17, the Plan's assets at fair value as of December 31, 2016 and 2015 (in thousands): 2016 Level I Level II Level III Total Allocation Assets Cash and cash equivalents $ 863 $ - $ - $ 863 5.5 % Equity securities 5,404 - - 5,404 34.1 % Mutual funds and ETF's 5,235 - - 5,235 33.2 % Corporate bonds - 3,641 - 3,641 23.1 % Municipal bonds 107 107 0.7 % U.S. Agency securities - 536 - 536 3.4 % Total $ 11,502 $ 4,284 $ - $ 15,786 100.0 % 2015 Level I Level II Level III Total Allocation Assets Cash and cash equivalents $ 1,704 $ - $ - $ 1,704 11.5 % Equity securities 3,821 - - 3,821 25.8 % Mutual funds and ETF's 6,085 - - 6,085 41.3 % Corporate bonds - 3,019 - 3,019 20.4 % Municipal bonds 107 107 0.7 % U.S. Agency securities - 50 - 50 0.3 % Total $ 11,610 $ 3,176 $ - $ 14,786 100.0 % Equity securities include the Company's common stock in the amounts of $548,000 (3.5% of total plan assets) and $502,000 (3.4% of total plan assets) at December 31, 2016 and 2015, respectively. The Bank expects to contribute $520,000 to its pension plans in 2017. Expected future benefit payments that the Bank estimates from its pension plan are as follows (in thousands): 2017 $ 733 2018 591 2019 1,820 2020 1,549 2021 1,403 2022 - 2026 7,407 Defined Contribution Plan The Company sponsors a voluntary 401(k) savings plan which eligible employees can elect to contribute up to the maximum amount allowable not to exceed the limits of IRS Code Sections 401(k). Under the plan, the Company also makes required contributions on behalf of the eligible employees. The Company's contributions vest immediately. Contributions by the Company totaled $351,000, $285,000 and $267,000 for 2016, 2015 and 2014, respectively. Directors' Deferred Compensation Plan The Company's directors may elect to defer all or portions of their fees until their retirement or termination from service. Amounts deferred under the deferred compensation plan earn interest based upon the highest current rate offered to certificate of deposit customers. Amounts deferred under the deferred compensation plan are not guaranteed and represent a general liability of the Company. As of December 31, 2016 and 2015, an obligation of $940,000 and $958,000, respectively, was included in other liabilities for this plan in the Consolidated Balance Sheet. Amounts included in interest expense on the deferred amounts totaled $15,000, $22,000 and $20,000 for the years ended December 31, 2016, 2015 and 2014, respectively. Restricted Stock Plan The Company maintains a Restricted Stock Plan (the Plan) whereby employees and non-employee corporate directors are eligible to receive awards of restricted stock based upon performance related requirements. Awards granted under the Plan are in the form of the Company's common stock and maybe subject to certain vesting requirements including in the case of employees, continuous employment or service with the Company. In April of 2016, the Company's shareholders authorized a total of 150,000 shares of the Company's common stock to be made available under the Plan. As of December 31, 2016, 145,890 shares remain available to be issued under the Plan. The Plan assists the Company in attracting, retaining and motivating employees to make substantial contributions to the success of the Company and to increase the emphasis on the use of equity as a key component of compensation. The following table details the vesting, awarding and forfeiting of restricted shares during 2016: 2016 Weighted Average Shares Market Price Outstanding, beginning of year 8,269 $ 49.98 Granted 4,110 48.13 Forfeited (90 ) 49.26 Increase due to stock dividends - - Vested (3,818 ) 49.95 Outstanding, end of year 8,471 $ 49.10 Compensation cost related to restricted stock is recognized based on the market price of the stock at the grant date over the vesting period. Compensation expense related to restricted stock was $193,000, $172,000 and $157,000 for the years ended December 31, 2016, 2015 and 2014, respectively. Supplemental Executive Retirement Plan The Company maintains a non-qualified supplemental executive retirement plan ("SERP") for certain executives to compensate those executive participants in the Company's noncontributory defined benefit pension plan whose benefits are limited by compensation limitations under current tax law. At December 31, 2016 and 2015, an obligation of $1,460,000 and $1,339,000, respectively, was included in other liabilities for the SERP in the Consolidated Balance Sheet. Expenses related to the SERP totaled $121,000, $141,000 and $152,000 for the years ended December 31, 2016, 2015 and 2014. Salary Continuation Plan The Company maintains a salary continuation plan for certain employees acquired through the acquisition of the FNB. At December 31, 2016 and 2015 an obligation of $720,000 and $710,000, respectively, was included in other liabilities for this plan in the Consolidated Balance Sheet. Expenses related to the salary continuation plan totaled $62,000 for the year ended December 31, 2016. There were no expenses related to this plan during the years ended December 31, 2015 and 2014. Continuation of Life Insurance Plan The Company, as part of the acquisition of FNB, has promised a continuation of life insurance coverage to certain persons post-retirement. GAAP requires the recording of post-retirement costs and a liability equal to the present value of the cost of post-retirement insurance during the person's term of service. The estimated present value of future benefits to be paid totaled $569,000 and $574,000 at December 31, 2016 and 2015, respectively, which is included in other liabilities in the Consolidated Balance Sheet. There were no expenses related to this plan during the years ended December 31, 2016, 2015 and 2014. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | 11. INCOME TAXES The provision for income taxes consists of the following (in thousands): Year Ended December 31, 2016 2015 2014 Currently payable $ 2,672 $ 2,913 $ 3,081 Deferred tax liability (asset) 362 (192 ) 478 Provision for income taxes $ 3,034 $ 2,721 $ 3,559 The following temporary differences gave rise to the net deferred tax asset and liabilities at December 31, 2016 and 2015, respectively (in thousands): 2016 2015 Deferred tax assets: Allowance for loan losses $ 4,518 $ 4,238 Deferred compensation 757 772 Merger & acquisition costs 16 20 Allowance for losses on available-for-sale securities 250 436 Pension and other retirement obligation 1,454 1,483 Interest on non-accrual loans 1,259 1,001 Incentive plan accruals 421 362 Other real estate owned 152 136 Low income housing tax credits 94 63 NOL carry forward 709 950 AMT Credit Carryforward 8 152 Other 156 157 Total $ 9,794 $ 9,770 Deferred tax liabilities: Premises and equipment $ (998 ) $ (919 ) Investment securities accretion (189 ) (177 ) Loan fees and costs (369 ) (154 ) Goodwill and core deposit intangibles (3,573 ) (3,594 ) Mortgage servicing rights (233 ) (238 ) Unrealized gains on available-for-sale securities (673 ) (1,135 ) Other (17 ) (44 ) Total (6,052 ) (6,261 ) Deferred tax asset, net $ 3,742 $ 3,509 No valuation allowance was established at December 31, 2016 and 2015, due to the Company's ability to carryback to taxes paid in previous years and certain tax strategies, coupled with the anticipated future taxable income as evidenced by the Company's earnings potential. The total provision for income taxes is different from that computed at the statutory rates due to the following items (in thousands): Year Ended December 31, 2016 2015 2014 Provision at statutory rates on pre-tax income $ 5,328 $ 4,878 $ 5,761 Effect of tax-exempt income (1,943 ) (1,915 ) (1,865 ) Low income housing tax credits (198 ) (198 ) (198 ) Bank owned life insurance (234 ) (214 ) (172 ) Nondeductible interest 55 61 60 Nondeductible merger and acquisition expenses - 102 - Other items 26 7 (27 ) Provision for income taxes $ 3,034 $ 2,721 $ 3,559 Statutory tax rates 34 % 34 % 34 % Effective tax rates 19.4 % 19.0 % 21.0 % The Company prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. There is currently no liability for uncertain tax positions and no known unrecognized tax benefits. With limited exception, the Company's federal and state income tax returns for taxable years through 2012 have been closed for purposes of examination by the federal and state taxing authorities. Investments in Qualified Affordable Housing Projects As of December 31, 2016 and 2015, the Company was invested in four partnerships that provide affordable housing. The balance of the investments, which is included within other assets in the Consolidated Balance Sheet, was $700,000 and $959,000 as of December 31, 2016 and 2015, respectively. Investments purchased prior to January 1, 2015, are accounted for utilizing the effective yield method. As of December 31, 2016, the Company has $846,000 of tax credits remaining that will be recognized over six years. Tax credits of $198,000 were recognized as a reduction of tax expense during 2016 and 2015. Included within other expenses on the Consolidated Statement of Income was $259,000 of amortization of the investments in qualified affordable housing projects for 2016 and 2015. |
OTHER COMPREHENSIVE INCOME
OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Dec. 31, 2016 | |
OTHER COMPREHENSIVE INCOME [Abstract] | |
OTHER COMPREHENSIVE INCOME | 12. OTHER COMPREHENSIVE INCOME The components of accumulated other comprehensive loss, net of tax, as of December 31, were as follows (in thousands): 2016 2015 Net unrealized gain on securities available for sale $ 1,979 $ 3,339 Tax effect 673 1,135 Net -of-tax amount 1,306 2,204 Unrecognized pension costs (4,088 ) (3,697 ) Tax effect (1,390 ) (1,257 ) Net -of-tax amount (2,698 ) (2,440 ) Total accumulated other comprehensive loss $ (1,392 ) $ (236 ) The following tables present the changes in accumulated other comprehensive loss by component net of tax for the years ended December 31, 2016, 2015 and 2014 (in thousands): Unrealized gain (loss) on available for sale securities (a) Defined Benefit Pension Items (a) Total Balance as of December 31, 2013 $ (108 ) $ (1,117 ) $ (1,225 ) Other comprehensive income (loss) before reclassifications (net of tax) 3,608 (1,243 ) 2,365 Amounts reclassified from accumulated other comprehensive income (loss) (net of tax) (407 ) 34 (373 ) Net current period other comprehensive income (loss) 3,201 (1,209 ) 1,992 Balance as of December 31, 2014 $ 3,093 $ (2,326 ) $ 767 Balance as of December 31, 2014 $ 3,093 $ (2,326 ) $ 767 Other comprehensive loss before reclassifications (net of tax) (606 ) (249 ) (855 ) Amounts reclassified from accumulated other comprehensive income (loss) (net of tax) (283 ) 135 (148 ) Net current period other comprehensive loss (889 ) (114 ) (1,003 ) Balance as of December 31, 2015 $ 2,204 $ (2,440 ) $ (236 ) Balance as of December 31, 2015 $ 2,204 $ (2,440 ) $ (236 ) Other comprehensive loss before reclassifications (net of tax) (730 ) (403 ) (1,133 ) Amounts reclassified from accumulated other comprehensive loss (net of tax) (168 ) 145 (23 ) Net current period other comprehensive loss (898 ) (258 ) (1,156 ) Balance as of December 31, 2016 $ 1,306 $ (2,698 ) $ (1,392 ) (a) Amounts in parentheses indicate debits on the consolidated balance sheet. The following table presents the significant amounts reclassified out of each component of accumulated other comprehensive loss for the years ended December 31, 2016, 2015 and 2014: Details about accumulated other comprehensive loss Amount reclassified from accumulated comprehensive loss (a) Affected line item in the Consolidated Statement of Income December 31, 2016 2015 2014 Unrealized gains and losses on available for sale securities $ 255 $ 429 $ 616 Investment securities gains, net (87 ) (146 ) (209 ) Provision for income taxes $ 168 $ 283 $ 407 Net of tax Defined benefit pension items $ (219 ) $ (205 ) $ (51 ) Salaries and employee benefits 74 70 17 Provision for income taxes $ (145 ) $ (135 ) $ (34 ) Net of tax Total reclassifications $ 23 $ 148 $ 373 (a) Amounts in parentheses indicate debits. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2016 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | 13. RELATED PARTY TRANSACTIONS Certain executive officers and directors of the Company, or companies in which they have 10 percent or more beneficial ownership, were indebted to the Bank. Such loans were made in the ordinary course of business at the Bank's normal credit terms and do not present more than a normal risk of collection. A summary of loan activity for the years ended December 31, 2016 and 2015 with officers, directors, stockholders and associates of such persons is listed below (in thousands): Year Ended December 31, 2016 2015 Balance, beginning of year $ 5,343 $ 4,314 New loans 4,512 5,828 Repayments (4,285 ) (4,799 ) Balance, end of year $ 5,570 $ 5,343 |
REGULATORY MATTERS
REGULATORY MATTERS | 12 Months Ended |
Dec. 31, 2016 | |
REGULATORY MATTERS [Abstract] | |
REGULATORY MATTERS | 14. REGULATORY MATTERS Dividend Restrictions: The approval of the Federal Reserve Board is required for a bank to pay dividends up to the Company if the total of all dividends declared in any calendar year exceeds the Bank's net income (as defined) for that year combined with its retained net income for the preceding two calendar years. Under this formula, the Bank can declare dividends in 2017 without approval of the FRB or PDB of approximately $13,925,000, plus the Bank's 2017 year-to-date net income at the time of the dividend declaration. Loans: The Bank is subject to regulatory restrictions which limit its ability to loan funds to the Company. At December 31, 2016, the Bank's regulatory lending limit amounted to approximately $17,631,000. Regulatory Capital Requirements: Federal regulations require the Company and the Bank to maintain minimum amounts of capital. Specifically, each is required to maintain certain minimum dollar amounts and ratios of Total, Tier I and Common Equity Tier I capital to risk-weighted assets and of Tier I capital to average total assets. In addition to the capital requirements, the Federal Deposit Insurance Corporation Improvement Act (FDICIA) established five capital categories ranging from "well capitalized" to "critically under-capitalized." Should any institution fail to meet the requirements to be considered "adequately capitalized", it would become subject to a series of increasingly restrictive regulatory actions. As of December 31, 2016 and 2015, the FRB categorized the Company and the Bank as well capitalized, under the regulatory framework for prompt corrective action. To be categorized as a well capitalized financial institution, Total risk-based, Tier I risk-based, Common Equity Tier I risk based and Tier I leverage capital ratios must be at least 10%, 8%, 6.5% and 5%, respectively. The Company and Bank's computed risk‑based capital ratios are as follows as of December 31, 2016 and 2015 (dollars in thousands): Actual For Capital Adequacy Purposes To Be Well Capitalized Under Prompt Corrective Action Provisions 2016 Amount Ratio Amount Ratio Amount Ratio Total Capital (to Risk Weighted Assets): Company $ 121,717 14.93 % $ 65,217 8.00 % $ 81,522 10.00 % Bank $ 117,537 14.46 % $ 65,020 8.00 % $ 81,275 10.00 % Tier 1 Capital (to Risk Weighted Assets): Company $ 112,599 13.81 % $ 48,913 6.00 % $ 65,217 8.00 % Bank $ 108,419 13.34 % $ 48,765 6.00 % $ 65,020 8.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets): Company $ 105,099 12.89 % $ 36,685 4.50 % $ 52,989 6.50 % Bank $ 108,419 13.34 % $ 36,574 4.50 % $ 52,829 6.50 % Tier 1 Capital (to Average Assets): Company $ 112,599 9.46 % $ 47,586 4.00 % $ 59,483 5.00 % Bank $ 108,419 9.13 % $ 39,006 4.00 % $ 48,757 5.00 % 2015 Total Capital (to Risk Weighted Assets): Company $ 114,886 16.23 % $ 56,630 8.00 % $ 70,787 10.00 % Bank $ 108,232 15.34 % $ 56,443 8.00 % $ 70,554 10.00 % Tier 1 Capital (to Risk Weighted Assets): Company $ 107,612 15.20 % $ 42,472 6.00 % $ 56,630 8.00 % Bank $ 100,958 14.31 % $ 42,332 6.00 % $ 56,443 8.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets): Company $ 100,112 14.14 % $ 31,854 4.50 % $ 46,012 6.50 % Bank $ 100,958 14.31 % $ 31,749 4.50 % $ 45,860 6.50 % Tier 1 Capital (to Average Assets): Company $ 107,612 11.01 % $ 39,083 4.00 % $ 48,854 5.00 % Bank $ 100,958 10.35 % $ 39,006 4.00 % $ 48,757 5.00 % This annual report has not been reviewed, or confirmed for accuracy or relevance, by the Federal Deposit Insurance Corporation. |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2016 | |
COMMITMENTS AND CONTINGENT LIABILITIES [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | 15. COMMITMENTS AND CONTINGENT LIABILITIES The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate or liquidity risk in excess of the amount recognized in the consolidated balance sheet. Credit Extension Commitments The Company's exposure to credit loss from nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual amount of these instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Financial instruments, whose contract amounts represent credit risk at December 31, 2016 and 2015, are as follows (in thousands): 2016 2015 Commitments to extend credit $ 206,505 $ 143,134 Standby letters of credit 14,955 13,751 $ 221,460 $ 156,885 Commitments to extend credit are legally binding agreements to lend to customers. Commitments generally have fixed expiration dates or other termination clauses and may require payment of fees. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future liquidity requirements. The Company evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary by the Company on extension of credit is based on management's credit assessment of the counter party. Standby letters of credit are conditional commitments issued by the Company to guarantee a financial agreement between a customer and a third party. Performance letters of credit represent conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. These instruments are issued primarily to support bid or performance related contracts. The coverage period for these instruments is typically a one-year period with an annual renewal option subject to prior approval by management. Fees earned from the issuance of these letters are recognized during the coverage period. For secured letters of credit, the collateral is typically Bank deposit instruments or customer business assets. The Company also offers limited overdraft protection as a non-contractual courtesy which is available to demand deposit accounts in good standing for business, personal or household use. The non-contractual amount of financial instruments with off-balance sheet risk at December 31, 2016 was $9,124,000. The Company reserves the right to discontinue this service without prior notice. Litigation Matters The Company is subject to lawsuits and claims arising out of its business. There are no legal proceedings or claims currently pending or threatened other than those encountered during the normal course of business, which include various foreclosure proceedings. As a result of these proceedings, it is not unusual for customers to countersue the Bank, which are vigorously challenged by the Bank. |
OPERATING LEASES
OPERATING LEASES | 12 Months Ended |
Dec. 31, 2016 | |
OPERATING LEASES [Abstract] | |
OPERATING LEASES | 16. OPERATING LEASES The following schedule shows future minimum rental payments under operating leases with noncancellable terms in excess of one year as of December 31, 2016 ( in thousands): 2017 $ 251 2018 253 2019 259 2020 152 2021 104 Thereafter 241 Total $ 1,260 The Company's operating lease obligations represent short and long-term lease and rental payments for facilities. Total rental expense for all operating leases for the years ended December 31, 2016, 2015 and 2014 were $289,000, $175,000 and $171,000, respectively. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2016 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | 17. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company established a hierarchal disclosure framework associated with the level of pricing observability utilized in measuring assets and liabilities at fair value. The three broad levels defined by this hierarchy are as follows Level I: Quoted prices are available in active markets for identical assets or liabilities as of the reported date. Level II: Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities include items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed. Level III: Assets and liabilities that have little to no pricing observability as of the reported date. These items do not have two-way markets and are measured using management's best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. 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 below. In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality, the Company's creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. Our valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company's valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincides with the Company's monthly and/or quarterly valuation process. Financial Instruments Recorded at Fair Value on a Recurring Basis The fair values of securities available for sale are determined by quoted prices in active markets, when available, and classified as Level I. If quoted market prices are not available, the fair value is determined by a matrix pricing, which is a mathematical technique, widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities' relationship to other benchmark quoted securities and classified as Level II. The fair values consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond's terms and conditions, among other things. In cases where significant credit valuation adjustments are incorporated into the estimation of fair value, reported amounts are classified as Level III inputs. The following tables present the assets reported on the consolidated balance sheet at their fair value on a recurring basis as of December 31, 2016 and 2015 (in thousands) 2016 Level I Level II Level III Total Fair value measurements on a recurring basis: Securities available for sale: U.S. Agency securities $ - $ 170,414 $ - $ 170,414 U.S. Treasuries securities 3,000 - - 3,000 Obligations of state and political subdivisions - 96,926 - 96,926 Corporate obligations - 3,050 - 3,050 Mortgage-backed securities in government sponsored entities - 37,728 - 37,728 Equity securities in financial institutions 2,899 - - 2,899 2015 Level I Level II Level III Total Fair value measurements on a recurring basis: Securities available for sale: U.S. Agency securities $ - $ 199,591 $ - $ 199,591 U.S. Treasuries securities 10,082 - - 10,082 Obligations of state and political subdivisions - 102,863 - 102,863 Corporate obligations - 14,565 - 14,565 Mortgage-backed securities in government sponsored entities - 30,204 - 30,204 Equity securities in financial institutions 2,432 - - 2,432 Financial Instruments, Non-Financial Assets and Non-Financial Liabilities Recorded at Fair Value on a Nonrecurring Basis The Company may be required, from time to time, to measure certain financial assets, financial liabilities, non-financial assets and non-financial liabilities at fair value on a nonrecurring basis in accordance with U.S. generally accepted accounting principles. These include assets that are measured at the lower of cost or market value that were recognized at fair value below cost at the end of the period. Certain non-financial assets measured at fair value on a non-recurring basis include foreclosed assets (upon initial recognition or subsequent impairment), non-financial assets and non-financial liabilities measured at fair value in the second step of a goodwill impairment test, and intangible assets and other non-financial long-lived assets measured at fair value for impairment assessment. Non-financial assets measured at fair value on a non-recurring basis during 2016 and 2015 include certain foreclosed assets which, upon initial recognition, were remeasured and reported at fair value through a charge-off to the allowance for possible loan losses and certain foreclosed assets which, subsequent to their initial recognition, were remeasured at fair value through a write-down included in other non-interest expense. Assets measured at fair value on a nonrecurring basis as of December 31, 2016 and 2015 (in thousands) 2016 Level I Level II Level III Total Impaired Loans $ - $ - $ 2,033 $ 2,033 Other real estate owned - - 839 839 2015 Level I Level II Level III Total Impaired Loans $ - $ - $ 894 $ 894 Other real estate owned - - 1,197 1,197 · Impaired Loans - · Other Real Estate owned – OREO is carried at the lower of cost or fair value, which is measured at the date foreclosure. If the fair value of the collateral exceeds the carrying amount of the loan, no charge-off or adjustment is necessary, the loan is not considered to be carried at fair value, and is therefore not included in the table above. If the fair value of the collateral is less than the carrying amount of the loan, management will charge the loan down to its estimated realizable value. The fair value of OREO is based on the appraised value of the property, which is generally unadjusted by management and is based on comparable sales for similar properties in the same geographic region as the subject property, and is included in the above table as a Level II measurement. In some cases, management may adjust the appraised value due to the age of the appraisal, changes in market conditions, or observable deterioration of the property since the appraisal was completed. In these cases, the loans are categorized in the above table as Level III measurement since these adjustments are considered to be unobservable inputs. Income and expenses from operations and further declines in the fair value of the collateral subsequent to foreclosure are included in net expenses from OREO. The following table provides a listing of the significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques. Quantitative Information about Level 3 Fair Value Measurements 2016 Fair Value Valuation Technique(s) Unobservable input Range Weighted average Impaired Loans 2,033 Appraised Collateral Values Discount for time since appraisal 0-65% 28.98% Selling costs 5%-9% 7.56% Holding period 6 - 12 months 11 months Other real estate owned 839 Appraised Collateral Values Discount for time since appraisal 10-67% 25.45% 2015 Fair Value Valuation Technique(s) Unobservable input Range Weighted average Impaired Loans 894 Appraised Collateral Values Discount for time since appraisal 0-70% 46.50% Selling costs 4%-10% 7.75% Holding period 12 months 10 months Other real estate owned 1,197 Appraised Collateral Values Discount for time since appraisal 0-75% 25% The fair values of the Company's financial instruments are as follows (in thousands): Carrying December 31, 2016 Amount Fair Value Level I Level II Level III Financial assets: Cash and due from banks $ 17,754 $ 17,754 $ 17,754 $ - $ - Interest bearing time deposits with other banks 6,955 6,960 - - 6,960 Available-for-sale securities 314,017 314,017 5,899 308,118 - Loans held for sale 1,827 1,827 1,827 - - Net loans 790,725 797,184 - - 797,184 Bank owned life insurance 26,223 26,223 26,223 - - Regulatory stock 5,306 5,306 5,306 - - Accrued interest receivable 4,089 4,089 4,089 - - Financial liabilities: Deposits $ 1,005,503 $ 1,004,072 $ 740,889 $ - $ 263,183 Borrowed funds 79,662 77,425 41,330 - 36,095 Accrued interest payable 720 720 720 - - Carrying December 31, 2015 Amount Fair Value Level I Level II Level III Financial assets: Cash and due from banks $ 24,384 $ 24,384 $ 24,384 $ - $ - Interest bearing time deposits with other banks 7,696 7,705 - - 7,705 Available-for-sale securities 359,737 359,737 12,514 347,223 - Loans held for sale 603 603 603 Net loans 687,925 712,524 - - 712,524 Bank owned life insurance 25,535 25,535 25,535 - - Regulatory stock 3,459 3,459 3,459 - - Accrued interest receivable 4,211 4,211 4,211 - - Financial liabilities: Deposits $ 988,031 $ 987,542 $ 706,121 $ - $ 281,421 Borrowed funds 41,631 38,863 1,598 - 37,265 Accrued interest payable 734 734 734 - - Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company's financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions can significantly affect the estimates. Estimated fair values have been determined by the Company using historical data, as generally provided in the Company's regulatory reports, and an estimation methodology suitable for each category of financial instruments. The Company's fair value estimates, methods and assumptions are set forth below for the Company's other financial instruments. Cash and Cash Equivalents: The carrying amounts for cash and due from banks approximate fair value because they have original maturities of 90 days or less and do not present unanticipated credit concerns. Accrued Interest Receivable and Payable: The carrying amounts for accrued interest receivable and payable approximate fair value because they are generally received or paid in 90 days or less and do not present unanticipated credit concerns. Interest bearing time deposits with other banks: The fair value of interest bearing time deposits with other banks is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities. Available-For-Sale Securities: The fair values of available-for-sale securities are based on quoted market prices as of the balance sheet date. For certain instruments, fair value is estimated by obtaining quotes from independent dealers. Loans: Fair values are estimated for portfolios of loans with similar financial characteristics. The fair value of performing loans has been estimated by discounting expected future cash flows. The discount rate used in these calculations is derived from the Treasury yield curve adjusted for credit quality, operating expense and prepayment option price, and is calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk inherent in the loan. The estimate of maturity is based on the Company's historical experience with repayments for each loan classification, modified as required by an estimate of the effect of current economic and lending conditions. Fair value for significant nonperforming loans is based on recent external appraisals or estimated cash flows discounted using a rate commensurate with the risk associated with the estimated cash flows. Assumptions regarding credit risk, cash flows, and discount rates are judgmentally determined using available market information and specific borrower information. Bank Owned Life Insurance: The carrying value of bank owned life insurance approximates fair value based on applicable redemption provisions. Regulatory Stock: The carrying value of regulatory stock approximates fair value based on applicable redemption provisions. Deposits: The fair value of deposits with no stated maturity, such as noninterest-bearing demand deposits, savings and NOW accounts, and money market accounts, is equal to the amount payable on demand. The fair value of certificates of deposit is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities. The deposits' fair value estimates do not include the benefit that results from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market, commonly referred to as the core deposit intangible. Borrowed Funds: The fair value of borrowed funds is based on the discounted value of contractual cash flows. The discount rate is the rates available to the Company for borrowed funds with similar terms and remaining maturities. |
CONDENSED FINANCIAL INFORMATION
CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY | 12 Months Ended |
Dec. 31, 2016 | |
CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY [Abstract] | |
CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY | 18. CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY The following is condensed financial information for Citizens Financial Services, Inc.: CITIZENS FINANCIAL SERVICES, INC. CONDENSED BALANCE SHEET December 31, (in thousands) 2016 2015 Assets: Cash $ 2,245 $ 4,593 Available-for-sale securities 2,735 2,332 Investment in subsidiary: First Citizens Community Bank 125,973 120,370 Other assets 564 557 Total assets $ 131,517 $ 127,852 Liabilities: Other liabilities $ 749 $ 592 Borrowed funds 7,500 7,500 Total liabilities 8,249 8,092 Stockholders' equity 123,268 119,760 Total liabilities and stockholders' equity $ 131,517 $ 127,852 CITIZENS FINANCIAL SERVICES, INC. CONDENSED STATEMENT OF INCOME Year Ended December 31, (in thousands) 2016 2015 2014 Dividends from: Bank subsidiary $ 5,842 $ 5,582 $ 14,332 Available-for-sale securities 92 71 56 Total income 5,934 5,653 14,388 Realized securities gains 31 76 - Expenses 463 892 555 Income before equity in undistributed earnings of subsidiary 5,502 4,837 13,833 Equity in undistributed earnings - First Citizens Community Bank 7,136 6,789 (448 ) Net income $ 12,638 $ 11,626 $ 13,385 Comprehensive income $ 11,482 $ 10,623 $ 15,377 CITIZENS FINANCIAL SERVICES, INC. STATEMENT OF CASH FLOWS Year Ended December 31, (in thousands) 2016 2015 2014 Cash flows from operating activities: Net income $ 12,638 $ 11,626 $ 13,385 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed earnings of subsidiaries (7,136 ) (6,789 ) 448 Investment securities gains (31 ) (76 ) - Other, net 289 322 174 Net cash provided by operating activities 5,760 5,083 14,007 Cash flows from investing activities: Purchases of available-for-sale securities (1 ) (901 ) (602 ) Proceeds from the sale of available-for-sale securities 201 113 - Net cash provided by (used in) investing activities 200 (788 ) (602 ) Cash flows from financing activities: Cash dividends paid (5,081 ) (5,151 ) (6,121 ) Purchase of treasury stock (3,227 ) (2,455 ) (814 ) Purchase of restricted stock - (7 ) (170 ) Net cash used in financing activities (8,308 ) (7,613 ) (7,105 ) Net decrease in cash (2,348 ) (3,318 ) 6,300 Cash at beginning of year 4,593 7,911 1,611 Cash at end of year $ 2,245 $ 4,593 $ 7,911 |
CONSOLIDATED CONDENSED QUARTERL
CONSOLIDATED CONDENSED QUARTERLY DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2016 | |
CONSOLIDATED CONDENSED QUARTERLY DATA (UNAUDITED) [Abstract] | |
CONSOLIDATED CONDENSED QUARTERLY DATA (UNAUDITED) | 19. CONSOLIDATED CONDENSED QUARTERLY DATA (UNAUDITED) The following table presents summarized quarterly financial data for 2016 and 2015: (in thousands, except share data) Three Months Ended, 2016 Mar 31 June 30 Sep 30 Dec 31 Interest income $ 10,462 $ 10,426 $ 10,948 $ 11,169 Interest expense 1,257 1,255 1,236 1,293 Net interest income 9,205 9,171 9,712 9,876 Provision for loan losses 135 135 500 750 Non-interest income 1,889 1,855 1,908 1,992 Investment securities gains, net 27 128 - 100 Non-interest expenses 6,912 7,301 7,200 7,258 Income before provision for income taxes 4,074 3,718 3,920 3,960 Provision for income taxes 791 687 767 789 Net income $ 3,283 $ 3,031 $ 3,153 $ 3,171 Earnings Per Share Basic $ 0.98 $ 0.91 $ 0.94 $ 0.95 Earnings Per Share Diluted $ 0.98 $ 0.91 $ 0.94 $ 0.95 Three Months Ended, 2015 Mar 31 June 30 Sep 30 Dec 31 Interest income $ 8,771 $ 8,768 $ 8,863 $ 9,251 Interest expense 1,184 1,207 1,218 1,211 Net interest income 7,587 7,561 7,645 8,040 Provision for loan losses 120 120 120 120 Non-interest income 1,602 1,780 1,736 1,876 Investment securities gains, net 126 175 129 (1 ) Non-interest expenses 5,335 5,428 5,852 6,814 Income before provision for income taxes 3,860 3,968 3,538 2,981 Provision for income taxes 740 779 681 521 Net income $ 3,120 $ 3,189 $ 2,857 $ 2,460 Earnings Per Share Basic $ 1.02 $ 1.04 $ 0.94 $ 0.79 Earnings Per Share Diluted $ 1.02 $ 1.04 $ 0.94 $ 0.79 |
ACQUISITION OF FNB
ACQUISITION OF FNB | 12 Months Ended |
Dec. 31, 2016 | |
ACQUISITION OF FNB [Abstract] | |
ACQUISITION OF FNB | 20. ACQUISITION OF FNB In the second quarter of 2015, the Company announced the signing of a definitive merger agreement to acquire 100% of the outstanding equity interest of FNB for $630 per share in cash and stock. FNB was a Pennsylvania bank that conducted its business from a main office in Lebanon County, Pennsylvania with four branches in Lebanon County, two branches in Schuylkill County, Pennsylvania, and one Branch in Berks County, Pennsylvania. The transaction closed on December 11, 2015, with FNB having been merged into First Citizens Community Bank, with First Citizens Community Bank as the surviving entity. The acquisition established the Company's presence in the Lebanon, Berks and Schuylkill Counties, Pennsylvania markets. Under the terms of the merger agreement, the Company acquired all of the outstanding shares of FNB for a total purchase price of approximately $21,603,000. As a result of the acquisition, the Company issued 336,515 common shares and $5.6 million in cash to the former shareholders of FNB. The shares were issued with a value of $47.50 per share, which was based on the close price of the Company's stock on December 11, 2015. The acquired assets and assumed liabilities were measured at estimated fair values. Management made significant estimates and exercised significant judgment in accounting for the acquisition. Management measured loan fair values based on loan file reviews, appraised collateral values, expected cash flows, and historical loss factors of FNB. Real estate acquired through foreclosure was primarily valued based on appraised collateral values. The Company also recorded an identifiable intangible asset representing the core deposit base of FNB based on management's evaluation of the cost of such deposits relative to alternative funding sources. The Company also recorded an identifiable intangible asset representing a covenant not-to-compete with the former President of FNB. Management used significant estimates including the average lives of depository accounts, future interest rate levels, and the cost of servicing various depository products. Management used market quotations to determine the fair value of investment securities. The business combination resulted in the acquisition of loans with and without evidence of credit quality deterioration. FNB's loans were deemed to have credit impairment at the acquisition date if the Company did not expect to receive all contractually required cash flows due to concerns about credit quality. Such loans were fair valued and the difference between contractually required payments at the acquisition date and cash flows expected to be collected was recorded as a non-accretable difference. At the acquisition date, the Company recorded $3,809,000 of purchased credit-impaired loans. The method of measuring carrying value of purchased loans differs from loans originated by the Company (originated loans), and as such, the Company identifies purchased loans and purchased loans with a credit quality discount and originated loans at amortized cost. FNB's loans without evidence of credit deterioration were fair valued by discounting both expected principal and interest cash flows using an observable discount rate for similar instruments that a market participant would consider in determining fair value. Additionally, consideration was given to management's best estimates of default rates and pre-payment speeds. The following table summarizes the purchase of FNB as of December 11, 2015: (In Thousands, Except Per Share Data) Purchase Price Consideration in Common Stock Citizens Financial Services, Inc. shares issued 336,515 Value assigned to Citizens Financial Services, Inc. common share $ 47.50 Purchase price assigned to FNB common shares exchanged for Citizens Financial Services, Inc. $ 15,984 Purchase Price Consideration - Cash for Common Stock Purchase price assigned to The First National Bank of Fredericksburg common shares exchanged for cash 5,619 Total Purchase Price 21,603 Net Assets Acquired: The First National Bank of Fredericksburg shareholders' equity $ 12,298 Adjustments to reflect assets acquired at fair value: Loans Interest rate 31 General credit (1,362 ) Specific credit - non-amortizing (2,495 ) Specific credit - amortizing (665 ) Core deposit intangible 1,641 Covenant not to compete 125 Premises and equipment 1,203 Leased premises contracts (359 ) Other assets (358 ) Deferred tax assets 785 Adjustments to reflect liabilities acquired at fair value: Time deposits (74 ) 10,770 Goodwill resulting from merger $ 10,833 The following condensed statement reflects the amounts recognized as of the acquisition date for each major class of asset acquired and liability assumed: (In Thousands) Total purchase price $ 21,603 Assets (liabilities) acquired: Cash and cash equivalents $ 83,514 Interest bearing time deposits with other banks 1,236 Securities available for sale 23,831 Loans 115,211 Premises and equipment, net 4,743 Accrued interest receivable 282 Bank-owned life insurance 4,598 Intangibles 1,981 Deferred tax asset 2,979 Other assets 2,332 Time deposits (42,675 ) Deposits other than time deposits (182,555 ) Accrued interest payable (14 ) Other liabilities (4,693 ) 10,770 Goodwill resulting from the FNB merger $ 10,833 The Company recorded goodwill and other intangibles associated with the purchase of FNB totaling $12,814,000. Goodwill is not amortized, but is periodically evaluated for impairment. The Company did not recognize any impairment from December 11, 2015 to December 31, 2016. None of the goodwill acquired is expected to be deductible for tax purposes. Identifiable intangibles are amortized to their estimated residual values over the expected useful lives. Such lives are also periodically reassessed to determine if any amortization period adjustments are required. For the period from December 11, 2015 to December 31, 2016, no such adjustments were recorded. The identifiable intangible assets consist of a core deposit intangible, covenant not to compete intangible and MSRs which are being amortized on an accelerated basis over the useful life of such assets. See footnote 6 for additional information on the identifiable intangible assets. Amounts recognized separately from the acquisition include primarily legal fees, investment banking fees, system conversion costs, severance costs and contract termination costs. These costs were included in merger and acquisition expenses within non-interest expenses on the Consolidated Statement of Income and amounted to approximately $1,103,000 for the year ended December 31, 2015. Results of operations for FNB prior to the acquisition date are not included in the Consolidated Statement of Income for the year ended December 31, 2015. Due to the significant amount of fair value adjustments, historical results of FNB are not relevant to the Company's results of operations. Therefore, no pro forma information is presented. The following table presents financial information regarding the former FNB operations included in our Consolidated Statement of Income from the date of acquisition through December 31, 2015 under the column "Actual from Acquisition Date through December 31, 2015". In addition, the following table presents unaudited pro forma information as if the acquisition of FNB had occurred on January 1, 2014 under the "Pro Forma" columns. The table below has been prepared for comparative purposes only and is not necessarily indicative of the actual results that would have been attained had the acquisition occurred as of the beginning of the periods presented, nor is it indicative of future results. Furthermore, the unaudited proforma information does not reflect management's estimate of any revenue-enhancing opportunities nor anticipated cost savings as a result of the integration and consolidation of the acquisition. Merger and acquisition integration costs and amortization of fair value adjustments are included in the numbers below. Pro Formas Actual from Acquisition Date Through December 31, 2015 Twelve Months Ended December 31, (In Thousands, Except Per Share Data) 2016 2015 2014 Net interest income $ 401 $ 35,837 $ 37,736 $ 37,634 Non-interest income 21 7,899 8,576 8,184 Net income (22 ) 12,073 8,640 14,019 Pro forma earnings per share: Basic $ 3.61 $ 2.57 $ 4.15 Diluted $ 3.61 $ 2.57 $ 4.15 |
SUMMARY OF SIGNIFICANT ACCOUN30
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Basis of Presentation | Basis of Presentation The financial statements are consolidated to include the accounts of the Company and its subsidiary, First Citizens Community Bank, and its subsidiary, First Citizens Insurance Agency, Inc. These statements have been prepared in accordance with U.S. generally accepted accounting principles. All significant inter-company accounts and transactions have been eliminated in the consolidated financial statements. |
Use of Estimates | Use of Estimates In preparing the financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses for the period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change relate to determination of the allowance for loan losses and deferred tax assets and liabilities. |
Operating Segments | Cash and Cash Equivalents Cash equivalents include cash on hand, deposits in banks and interest-earning deposits. Interest-earning deposits with original maturities of 90 days or less are considered cash equivalents. Net cash flows are reported for loans, deposits and short term borrowing transactions. Interest bearing time deposits with other banks are not included with cash and cash equivalents as the original maturities were greater than 90 days. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents include cash on hand, deposits in banks and interest-earning deposits. Interest-earning deposits with original maturities of 90 days or less are considered cash equivalents. Net cash flows are reported for loans, deposits and short term borrowing transactions. Interest bearing time deposits with other banks are not included with cash and cash equivalents as the original maturities were greater than 90 days. |
Investment Securities | Investment Securities Investment securities at the time of purchase are classified as one of the three following types: Held-to-Maturity Securities Trading Securities Available-for-Sale Securities The amortized cost of investment in debt securities is adjusted for amortization of premiums and accretion of discounts, computed by a method that results in a level yield. Gains and losses on the sale of investment securities are computed on the basis of specific identification of the adjusted cost of each security. Securities are periodically reviewed for other-than-temporary impairment. A decline in value that is considered to be other-than-temporary is recorded as a loss within non-interest income in the Consolidated Statement of Income. Common stock of the Federal Reserve Bank, Federal Home Loan Bank of Pittsburgh (FHLB) and correspondent banks represent ownership in institutions which are wholly owned by other financial institutions. These equity securities are accounted for at cost and are classified as other assets. The fair value of investments, except certain state and municipal securities, is based on bid prices published in financial newspapers or bid quotations received from securities dealers. The fair value of certain state and municipal securities is not readily available through market sources other than dealer quotations, so fair value is based on quoted market prices of similar instruments, adjusted for differences between the quoted instruments and the instruments being valued. |
Loans Held for Sale | Loans Held for Sale Certain newly originated fixed-rate residential mortgage loans are classified as held for sale, because it is management's intent to sell these residential mortgage loans. The residential mortgage loans held for sale are carried at the lower of aggregate cost or market value. |
Loans | Loans Interest on all loans is recognized on the accrual basis based upon the principal amount outstanding. The accrual of interest income on loans is discontinued when, in the opinion of management, doubt exists as to the ability to collect such interest. Payments received on non-accrual loans are applied to the outstanding principal balance or recorded as interest income, depending upon our assessment of our ultimate ability to collect principal and interest. Loans are returned to the accrual status when factors indicating doubtful collectability cease to exist. The Company recognizes nonrefundable loan origination fees and certain direct loan origination costs over the life of the related loan as an adjustment of loan yield using the interest method. |
Allowance for Loan Losses | Allowance for Loan Losses The allowance for loan losses represents the amount which management estimates is adequate to provide for probable losses inherent in its loan portfolio. The allowance method is used in providing for loan losses. Accordingly, all loan losses are charged to the allowance and all recoveries are credited to it. The allowance for loan losses is established through a provision for loan losses which is charged to operations. The provision is based upon management's periodic evaluation of individual loans, the overall risk characteristics of the various portfolio segments, past experience with losses, the impact of economic conditions on borrowers, and other relevant factors. The estimates used in determining the adequacy of the allowance for loan losses are particularly susceptible to significant change in the near term. Impaired loans are other commercial, other agricultural, municipal, agricultural real estate, commercial real estate loans and certain residential mortgages cross collateralized with commercial relationships for which it is probable that the Company will not be able to collect all amounts due according to the contractual terms of the loan agreement. The Company individually evaluates such loans for impairment and does not aggregate loans by major risk classifications. The definition of "impaired loans" is not the same as the definition of "non-accrual loans," although the two categories overlap. The Company may choose to place a loan on non-accrual status due to payment delinquency or uncertain collectability, while not classifying the loan as impaired if the loan is not a commercial, agricultural, municipal or commercial real estate loan. Factors considered by management in determining impairment include payment status and collateral value. The amount of impairment for these types of impaired loans is determined by the difference between the present value of the expected cash flows related to the loan, using the original interest rate, and its recorded value; or, as a practical expedient in the case of a collateral dependent loan, the difference between the fair value of the collateral and the recorded amount of the loans. Mortgage loans on one to four family properties and all consumer loans are large groups of smaller balance homogeneous loans and are measured for impairment collectively. Loans that experience insignificant payment delays, which is defined as 90 days or less, generally are not classified as impaired. Management determines the significance of payment delays 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 borrower's prior payment record, and the amount of shortfall in relation to the principal and interest owed. The Company allocates the allowance based on the factors described below, which conform to the Company's loan classification policy. In reviewing risk within the Bank's loan portfolio, management has determined there to be several different risk categories within the loan portfolio. The allowance for loan losses consists of amounts applicable to: (i) residential real estate loans; (ii) commercial real estate (iii) agricultural real estate loans; (iv) construction; (v) consumer loans; (vi) other commercial loans (vii) other agricultural loans and (viii) state and political subdivision loans. Factors considered in this process include general loan terms, collateral, and availability of historical data to support the analysis. Historical loss percentages for each risk category are calculated and used as the basis for calculating allowance allocations. Certain qualitative factors are evaluated to determine additional inherent risks in the loan portfolio, which are not necessarily reflected in the historical loss percentages. These factors are then added to the historical allocation percentage to get the adjusted factor to be applied to non classified loans. The following qualitative factors are analyzed: · Level of and trends in delinquencies, impaired/classified loans § Change in volume and severity of past due loans § Volume of non-accrual loans § Volume and severity of classified, adversely or graded loans · Level of and trends in charge-offs and recoveries · Trends in volume, terms and nature of the loan portfolio · Effects of any changes in risk selection and underwriting standards and any other changes in lending and recovery policies, procedures and practices · Changes in the quality of the Bank's loan review system · Experience, ability and depth of lending management and other relevant staff · National, state, regional and local economic trends and business conditions § General economic conditions § Unemployment rates § Inflation / CPI § Changes in values of underlying collateral for collateral-dependent loans · Industry conditions including the effects of external factors such as competition, legal, and regulatory requirements on the level of estimated credit losses. · Existence and effect of any credit concentrations, and changes in the level of such concentrations · Any change in the level of board oversight The Company analyzes its loan portfolio each quarter to determine the appropriateness of its allowance for loan losses. |
Loan Charge-off Policies | Loan Charge-off Policies Consumer loans are generally fully or partially charged down to the fair value of collateral securing the asset when the loan is 180 days past due for open-end loans or 120 days past due for closed-end loans unless the loan is well secured and in the process of collection. All other loans are generally charged down to the net realizable value when the loan is 90 days past due. |
Troubled Debt Restructurings | Troubled Debt Restructurings In situations where, for economic or legal reasons related to a borrower's financial difficulties, management may grant a concession for other than an insignificant period of time to the borrower that would not otherwise be considered, the related loan is classified as a Troubled Debt Restructuring (TDR). Management strives to identify borrowers in financial difficulty early and work with them to modify more affordable terms before their loan reaches nonaccrual status. These modified terms may include rate reductions, principal forgiveness, payment forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. In cases where borrowers are granted new terms that provide for a reduction of either interest or principal, management measures any impairment on the restructuring as noted above for impaired loans. In addition to the allowance for the pooled portfolios, management has developed a separate allowance for loans that are identified as impaired through a TDR. TDRs are excluded from pooled loss forecasts and a separate reserve is provided under the accounting guidance for loan impairment. |
Purchased Credit Impaired Loans | Purchased Credit Impaired Loans The Company purchased loans in connection with its acquisition of FNB in 2015, some of which showed evidence of credit deterioration as of the acquisition since origination. These purchased credit impaired (PCI) loans were recorded at the amount paid, such that there is no carryover of the seller's allowance for loan losses. After acquisition, losses are recognized by an increase in the allowance for loan losses. Over the life of the loan, expected cash flows continue to be estimated. If this subsequent estimated indicated that the present value of expected cash flows is less than the carrying amount, a charge to the allowance for loan loss is made through a provision. If the estimate indicates that the present value of the expected cash flows is greater than the carrying amount, it is recognized as part of future interest income. Such purchased credit impaired loans are accounted for individually, and the Company estimates the amount and timing of expected cash flows for each loan. The expected cash flows in excess of the amount paid is recorded as interest income over the remaining life of the loan (accretable yield). The excess of the loan's contractual principal and interest over expected cash flows is not amortized over the remaining life of the loan (nonaccretable difference). For loans purchased that did not show evidence of credit deterioration, the difference between the fair value of the loan at the acquisition date and the loan's face value is being amortized as a yield adjustment over the estimated remaining life of the loan using the effective interest method. |
Foreclosed Assets Held For Sale | Foreclosed Assets Held For Sale Foreclosed assets acquired in settlement of loans are carried at fair value, less estimated costs to sell. Prior to foreclosure, the value of the underlying loan is written down to fair market value of the real estate or other assets to be acquired by a charge to the allowance for loan losses, if necessary. Any subsequent write-downs are charged against operating expenses. Operating expenses of such properties, net of related income and losses on disposition, are included in other expenses and gains and losses are included in other non-interest income or other non-interest expense. |
Premises and Equipment | Premises and Equipment Land is carried at cost. Premises and equipment are stated at cost, less accumulated depreciation. Depreciation expense is computed on straight line and accelerated methods over the estimated useful lives of the assets, which range from 3 to 15 years for furniture, fixtures and equipment and 5 to 40 years for building premises. Repair and maintenance expenditures which extend the useful life of an asset are capitalized and other repair expenditures are expensed as incurred. When premises or equipment are retired or sold, the remaining cost and accumulated depreciation are removed from the accounts and any gain or loss is credited to income or charged to expense, respectively. |
Intangible Assets | Intangible Assets Intangible assets include core deposit intangibles, covenants not to compete and mortgage servicing rights (MSRs). Core deposit intangibles are a measure of the value of consumer demand and savings deposits acquired in business combinations accounted for as purchases. Covenants not to compete are payments made to former employees as compensation for agreeing not to work for competitors. The core deposit intangibles are being amortized over 10 years using the sum-of-the-years digits method of amortization, while the covenant not to compete is being amortized over four years on a straight line basis. MSR's arose from the Company originating certain loans for the express purpose of selling such loans in the secondary market. The Company maintains all servicing rights for these loans. The loans held for sale are carried at lower of cost or market. Originated MSRs are recorded by allocating total costs incurred between the loan and servicing rights based on their relative fair values. MSRs are amortized in proportion to the estimated servicing income over the estimated life of the servicing portfolio and measured annually for impairment. The recoverability of the carrying value of intangible assets is evaluated on an ongoing basis, and permanent declines in value, if any, are charged to expense. |
Goodwill | Goodwill The Company utilizes a two-step process for testing the impairment of goodwill on at least an annual basis. This approach could cause more volatility in the Company's reported net income because impairment losses, if any, could occur irregularly and in varying amounts. The Company may also perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. Based on the fair value of the reporting unit, no impairment of goodwill was recognized in 2016, 2015 or 2014. |
Bank Owned Life Insurance | Bank Owned Life Insurance The Company has purchased life insurance policies on certain employees. Prior to January 1, 2015 . Additionally, as a result of the acquisition of FNB, the Company acquired life insurance policies on former FNB employees and directors. The policies obtained as part of the acquisition provide a fixed dollar benefit to the former employee or director beneficiaries, whether or not the insured person is affiliated with the Company at the time of his or her death. Bank owned life insurance is recorded at its cash surrender value, or the amount that can be realized. Increases in the cash surrender value are recognized as other non-interest income. The obligation under an split-dollar benefit agreements to former employees and directors or their beneficiaries have been recognized as liabilities on the consolidated balance sheet. |
Income Taxes | Income Taxes The Company and the Bank file a consolidated federal income tax return. Deferred tax assets and liabilities are computed based on the difference between the financial statement basis and income tax basis of assets and liabilities using the enacted marginal tax rates. Deferred income tax expenses or benefits are based on the changes in the net deferred tax asset or liability from period to period. |
Employee Benefit Plans | Employee Benefit Plans The Company has noncontributory defined benefit pension plans covering employees hired before January 1, 2007 and employees acquired as part of the FNB acquisition. It is the Company's policy to fund pension costs on a current basis to the extent deductible under existing tax regulations. Such contributions are intended to provide not only for benefits attributed to service to date, but also for those expected to be earned in the future. The Company has a defined contribution, 401(k) plan covering eligible employees. The employee may also contribute to the plan on a voluntary basis, up to a maximum percentage allowable not to exceed the limits of Code Sections 401(k). Under the plan, the Company also makes contributions on behalf of eligible employees, which vest immediately. For employees hired after January 1, 2007, in lieu of the pension plan, an additional annual discretionary 401(k) plan contribution is made and is equal to a percentage of an employee's base compensation. The Company also has a profit-sharing plan for employees which provide tax-deferred salary savings to plan participants. The Company has a deferred compensation plan for directors who have elected to defer all or portions of their fees until their retirement or termination from service. The Company has a restricted stock plan which covers eligible employees and non-employee corporate directors. Under the plan, awards are granted based upon performance related requirements and are subject to certain vesting criteria. Compensation cost related to restricted stock is recognized based on the market price of the stock at the grant date over the vesting period. The Company has an employee stock purchase plan that allows employees to withhold money from their paychecks, which is then utilized to purchase shares of the Company's stock on either the open market or through treasury stock, if shares are unavailable on the open market. The Company maintains a non-qualified supplemental executive retirement plan ("SERP") for certain executives to compensate those executive participants in the Company's noncontributory defined benefit pension plan whose benefits are limited by compensation limitations under current tax law. The SERP is considered an unfunded plan for tax and ERISA purposes and all obligations arising under the SERP are payable from the general assets of the Company. Expenses under the SERP are recognized as earned over the expected years of service. |
Advertising Costs | Advertising Costs Advertising costs are generally expensed as incurred. |
Comprehensive Loss | Comprehensive Loss The Company is required to present comprehensive income in a full set of general purpose financial statements for all periods presented. Other comprehensive loss is comprised of unrealized holding gains (losses) on the available-for-sale securities portfolio and unrecognized pension costs. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (a new revenue recognition standard). The Update's core principle is that a company will recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, this Update specifies the accounting for certain costs to obtain or fulfill a contract with a customer and expands disclosure requirements for revenue recognition. This Update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Because the guidance does not apply to revenue associated with financial instruments, including loans and securities, we do not expect new standard, or any of the amendments, to result in a material change from our current accounting for revenue because the majority of the Company's financial instruments are not within the scope of Topic 606. However, we do expect that the standard will result in new disclosure requirements, which are currently being evaluated. In August 2015, the FASB issued ASU 2015-14, Revenue from Contract with Customers Topic 606 In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805). In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . The standard requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. A short-term lease is defined as one in which (a) the lease term is 12 months or less and (b) there is not an option to purchase the underlying asset that the lessee is reasonably certain to exercise. For short-term leases, lessees may elect to recognize lease payments over the lease term on a straight-line basis. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020. The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application The Company is currently assessing the practical expedients it may elect at adoption, but does not anticipate the amendments will have a significant impact to the financial statements. Based on the Company's preliminary analysis of its current portfolio, the impact to the Company's balance sheet is estimated to result in less than a 1% increase in assets and liabilities. The Company also anticipates additional disclosures to be provided at adoption In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606). Revenue from Contracts with Customers (Topic 606), Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718) Share-Based Payment In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606). The amendments in this Update affect entities with transactions included within the scope of Topic 606, which includes entities that enter into contracts with customers to transfer goods or services in exchange for consideration. The amendments in this Update do not change the core principle for revenue recognition in Topic 606. Instead, the amendments provide (1) more detailed guidance in a few areas and (2) additional implementation guidance and examples based on feedback the FASB received from its stakeholders. The amendments are expected to reduce the degree of judgment necessary to comply with Topic 606, which the FASB expects will reduce the potential for diversity arising in practice and reduce the cost and complexity of applying the guidance. The amendments in this Update affect the guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606) , which is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by Update 2014-09). ASU 2015-14, Revenue from Contracts with Customers (Topic 606) : Deferral of the Effective Date , defers the effective date of Update 2014-09 by one year. The Company is currently evaluating the impact the adoption of the standard will have on the Company's consolidated financial position or results of operations. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), which changes the impairment model for most financial assets. This Update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the Update is that financial assets measured at amortized cost should 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 allowance for credit losses should reflect management's current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be effected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted for annual and interim periods beginning after December 15, 2018. With certain exceptions, transition to the new requirements will be through a cumulative effect adjustment to opening retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We expect to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, but cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810) In October 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) In December 2016, the FASB issued ASU 2016-19, Technical Corrections and Improvements In December 2016, the FASB issued ASU 2016-20 , Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers Guarantees In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business |
Treasury Stock | Treasury Stock The purchase of the Company'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 last-in-first-out basis. |
Cash Flows | Cash Flows The Company utilizes the net reporting of cash receipts and cash payments for deposit, short-term borrowing and lending activities. The Company considers amounts due from banks and interest-bearing deposits in banks as cash equivalents. |
Trust Assets and Income | Trust Assets and Income Assets held by the Company in a fiduciary or agency capacity for its customers are not included in the consolidated financial statements since such items are not assets of the Company. In accordance with industry practice, fees are recorded on the cash basis and approximate the fees which would have been recognized on the accrual basis. |
Earnings Per Share | Earnings Per Share The following table sets forth the computation of earnings per share. Earnings per share calculations give retroactive effect to stock dividends declared by the Company. 2016 2015 2014 Basic earnings per share computation: Net income applicable to common stock $ 12,638,000 $ 11,626,000 $ 13,385,000 Weighted average common shares outstanding 3,341,933 3,063,906 3,070,922 Earnings per share - basic $ 3.78 $ 3.79 $ 4.36 Diluted earnings per share computation: Net income applicable to common stock $ 12,638,000 $ 11,626,000 $ 13,385,000 Weighted average common shares outstanding for basic earnings per share 3,341,933 3,063,906 3,070,922 Add: Dilutive effects of restricted stock 1,556 1,360 1,295 Weighted average common shares outstanding for dilutive earnings per share 3,343,489 3,065,266 3,072,217 Earnings per share - dilutive $ 3.78 $ 3.79 $ 4.36 Nonvested shares of restricted stock totaling 3,087, 2,105 and 2,248 were outstanding during 2016, 2015 and 2014, respectively, but were not included in the computation of diluted earnings per common share because to do so would be anti-dilutive. These anti-dilutive shares had per share prices ranging from $46.69-$53.15, $50.15-$53.15 and $37.10-$50.50 for 2016, 2015 and 2014, respectively. |
Reclassification | Reclassification Certain of the prior year amounts have been reclassified to conform to the current year presentation. Such reclassifications had no effect on net income or stockholders' equity. |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Computation of earnings per share | The following table sets forth the computation of earnings per share. Earnings per share calculations give retroactive effect to stock dividends declared by the Company. 2016 2015 2014 Basic earnings per share computation: Net income applicable to common stock $ 12,638,000 $ 11,626,000 $ 13,385,000 Weighted average common shares outstanding 3,341,933 3,063,906 3,070,922 Earnings per share - basic $ 3.78 $ 3.79 $ 4.36 Diluted earnings per share computation: Net income applicable to common stock $ 12,638,000 $ 11,626,000 $ 13,385,000 Weighted average common shares outstanding for basic earnings per share 3,341,933 3,063,906 3,070,922 Add: Dilutive effects of restricted stock 1,556 1,360 1,295 Weighted average common shares outstanding for dilutive earnings per share 3,343,489 3,065,266 3,072,217 Earnings per share - dilutive $ 3.78 $ 3.79 $ 4.36 |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
INVESTMENT SECURITIES [Abstract] | |
Summary of amortized cost and fair value of investment securities | The amortized cost, gross unrealized gains and losses, and fair value of investment securities at December 31, 2016 and 2015 were as follows (in thousands): Gross Gross Amortized Unrealized Unrealized Fair 2016 Cost Gains Losses Value Available-for-sale securities: U.S. Agency securities $ 170,276 $ 407 $ (269 ) $ 170,414 U.S. Treasuries 2,999 1 - 3,000 Obligations of state and political subdivisions 95,956 1,463 (493 ) 96,926 Corporate obligations 3,000 50 - 3,050 Mortgage-backed securities in government sponsored entities 37,987 88 (347 ) 37,728 Equity securities in financial institutions 1,821 1,078 - 2,899 Total available-for-sale securities $ 312,039 $ 3,087 $ (1,109 ) $ 314,017 2015 Available-for-sale securities: U.S. Agency securities $ 199,749 $ 369 $ (527 ) $ 199,591 U.S. Treasuries 10,103 - (21 ) 10,082 Obligations of state and political subdivisions 99,856 3,080 (73 ) 102,863 Corporate obligations 14,583 68 (86 ) 14,565 Mortgage-backed securities in government sponsored entities 30,107 186 (89 ) 30,204 Equity securities in financial institutions 2,001 436 (5 ) 2,432 Total available-for-sale securities $ 356,399 $ 4,139 $ (801 ) $ 359,737 |
Unrealized losses and fair value of investments | The following table shows the Company's gross unrealized losses and fair value, aggregated by investment category and length of time, that the individual securities have been in a continuous unrealized loss position, at December 31, 2016 and 2015 (in thousands). As of December 31, 2016, the Company owned 88 securities whose fair value was less than their cost basis. Less than Twelve Months Twelve Months or Greater Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized 2016 Value Losses Value Losses Value Losses U.S. Agency securities $ 50,947 $ (269 ) $ - $ - $ 50,947 $ (269 ) Obligations of states and political subdivisions 28,398 (472 ) 767 (21 ) 29,165 (493 ) Mortgage-backed securities in government sponsored entities 26,717 (330 ) 753 (17 ) 27,470 (347 ) Total securities $ 106,062 $ (1,071 ) $ 1,520 $ (38 ) $ 107,582 $ (1,109 ) 2015 U.S. Agency securities $ 123,591 $ (527 ) $ - $ - $ 123,591 $ (527 ) U.S. Treasuries 10,082 (21 ) - - 10,082 (21 ) Obligations of states and political subdivisions 7,023 (57 ) 2,914 (16 ) 9,937 (73 ) Corporate obligations 5,822 (61 ) 2,138 (25 ) 7,960 (86 ) Mortgage-backed securities in government sponsored entities 9,830 (77 ) 227 (12 ) 10,057 (89 ) Equity securities in financial institutions 106 (5 ) - - 106 (5 ) Total securities $ 156,454 $ (748 ) $ 5,279 $ (53 ) $ 161,733 $ (801 ) |
Gross gains and losses on available-for-sale securities | Gross gains and gross losses were realized as follows (in thousands): 2016 2015 2014 Gross gains $ 312 $ 440 $ 647 Gross losses (57 ) (11 ) (31 ) Net gains $ 255 $ 429 $ 616 |
Summary of amortized cost and fair value of debt securities by contractual maturity | The amortized cost and fair value of debt securities at December 31, 2016, by contractual maturity are shown below (in thousands). Municipal securities that have been refunded and will therefore pay-off on the call date are reflected in the table below utilizing the call date as the date of repayment as payment is guaranteed on that day: Amortized Cost Fair Value Available-for-sale securities: Due in one year or less $ 44,331 $ 44,484 Due after one year through five years 155,199 156,177 Due after five years through ten years 38,363 38,305 Due after ten years 72,325 72,152 Total $ 310,218 $ 311,118 |
LOANS AND RELATED ALLOWANCE F33
LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES [Abstract] | |
Summary of loan portfolio and allowance for loan losses | The following table summarizes the primary segments of the loan portfolio, as well as how those segments are analyzed within the allowance for loan losses as of December 31, 2016 and 2015 (in thousands): 2016 Total Loans Individually evaluated for impairment Loans acquired with deteriorated credit quality Collectively evaluated for impairment Real estate loans: Residential $ 207,423 $ 957 $ 35 $ 206,431 Commercial 252,577 5,742 1,969 244,866 Agricultural 123,624 3,346 738 119,540 Construction 25,441 - - 25,441 Consumer 11,005 - 4 11,001 Other commercial loans 58,639 5,994 621 52,024 Other agricultural loans 23,388 1,654 - 21,734 State and political subdivision loans 97,514 - - 97,514 Total 799,611 17,693 3,367 778,551 Less: Allowance for loan losses 8,886 487 - 8,399 Net loans $ 790,725 $ 17,206 $ 3,367 $ 770,152 2015 Total Loans Individually evaluated for impairment Loans acquired with deteriorated credit quality Collectively evaluated for impairment Real estate loans: Residential $ 203,407 $ 304 $ 35 $ 203,068 Commercial 237,542 6,068 2,170 229,304 Agricultural 57,822 167 738 56,917 Construction 15,011 - - 15,011 Consumer 11,543 - 9 11,534 Other commercial loans 57,549 5,640 866 51,043 Other agricultural loans 13,657 105 13,552 State and political subdivision loans 98,500 - - 98,500 Total 695,031 12,284 3,818 678,929 Less: Allowance for loan losses 7,106 355 - 6,751 Net loans $ 687,925 $ 11,929 $ 3,818 $ 672,178 |
Accretable yield for purchased credit impaired loans | Changes in the amortizable yield for PCI loans were as follows for the years ended December 31, 2016 and 2015 (in thousands): December 31, 2016 December 31, 2015 Balance at beginning of period $ 637 $ 665 Accretion (349 ) (28 ) Reclassification of non-accretable discount 101 - Balance at end of period $ 389 $ 637 |
Loans acquired with specific evidence of deterioration in credit quality | The following table presents additional information regarding PCI loans: (In Thousands) December 31, 2016 December 31, 2015 Outstanding balance $ 6,487 $ 6,950 Carrying amount 3,367 3,818 |
Impaired financing receivables with associated allowance amount | The following table includes the recorded investment and unpaid principal balances for impaired loans by class, with the associated allowance amount as of December 31, 2016 and 2015, if applicable (in thousands) Recorded Recorded Unpaid Investment Investment Total Principal With No With Recorded Related 2016 Balance Allowance Allowance Investment Allowance Real estate loans: Mortgages $ 953 $ 570 $ 330 $ 900 $ 22 Home Equity 57 - 57 57 10 Commercial 7,958 5,697 45 5,742 45 Agricultural 3,347 2,000 1,347 3,347 54 Other commercial loans 6,159 5,135 859 5,994 326 Other agricultural loans 1,653 1,629 24 1,653 30 Total $ 20,127 $ 15,031 $ 2,662 $ 17,693 $ 487 Recorded Recorded Unpaid Investment Investment Total Principal With No With Recorded Related 2015 Balance Allowance Allowance Investment Allowance Real estate loans: Mortgages $ 281 $ 114 $ 129 $ 243 $ 26 Home Equity 61 - 61 61 11 Commercial 8,654 5,843 225 6,068 62 Agricultural 167 167 - 167 - Other commercial loans 5,535 4,653 987 5,640 256 Other agricultural loans 105 105 - 105 - Total $ 14,803 $ 10,882 $ 1,402 $ 12,284 $ 355 The following table includes the average investment in impaired loans and the income recognized on impaired loans for 2016, 2015 and 2014 (in thousands): Interest Average Interest Income Recorded Income Recognized 2016 Investment Recognized Cash Basis Real estate loans: Mortgages $ 590 $ 13 $ - Home Equity 59 4 - Commercial 5,959 69 1 Agricultural 361 17 - Consumer - - - Other commercial loans 5,715 87 6 Other agricultural loans 190 11 - Total $ 12,874 $ 201 $ 7 2015 Real estate loans: Mortgages $ 240 $ 12 $ - Home Equity 88 4 - Commercial 5,683 63 5 Agricultural 56 2 - Consumer - - - Other commercial loans 2,700 98 6 Other agricultural loans 37 1 - Total $ 8,804 $ 180 $ 11 2014 Real estate loans: Mortgages $ 198 $ 9 $ - Home Equity 130 4 - Commercial 7,270 54 - Agricultural - - - Consumer 10 - - Other commercial loans 2,031 79 - Other agricultural loans - - - Total $ 9,639 $ 146 $ - |
Summary of financing receivable credit exposures by internally assigned grades | The following tables represent credit exposures by internally assigned grades as of December 31, 2016 and 2015 (in thousands) Pass Special Mention Substandard Doubtful Loss Ending Balance 2016 Real estate loans: Commercial $ 225,185 $ 14,045 $ 13,347 $ - $ - $ 252,577 Agricultural 110,785 8,231 4,608 - - 123,624 Construction 25,441 - - - - 25,441 Other commercial loans 51,396 2,049 5,105 89 - 58,639 Other agricultural loans 20,178 1,733 1,477 - - 23,388 State and political subdivision loans 83,620 13,066 828 - - 97,514 Total $ 516,605 $ 39,124 $ 25,365 $ 89 $ - $ 581,183 2015 Real estate loans: Commercial $ 217,544 $ 4,150 $ 15,816 $ 32 $ - $ 237,542 Agricultural 53,695 2,865 1,262 - - 57,822 Construction 14,422 589 - - - 15,011 Other commercial loans 51,297 446 5,669 137 - 57,549 Other agricultural loans 13,318 234 105 - - 13,657 State and political subdivision loans 98,500 - - - - 98,500 Total $ 448,776 $ 8,284 $ 22,852 $ 169 $ - $ 480,081 For residential real estate mortgages, home equities and consumer loans, credit quality is monitored based on whether the loan is performing or non-performing, which is typically based on the aging status of the loan and payment activity, unless a specific action, such as bankruptcy, repossession, death or significant delay in payment occurs to raise awareness of a possible credit event. Non-performing loans include those loans that are considered nonaccrual, described in more detail below and all loans past due 90 or more days. The following table presents the recorded investment in those loan classes based on payment activity as of December 31, 2016 and 2015 ( in thousands) 2016 Performing Non-performing PCI Total Real estate loans: Mortgages $ 147,047 $ 1,648 $ 35 $ 148,730 Home Equity 58,438 255 - 58,693 Consumer 10,892 109 4 11,005 Total $ 216,377 $ 2,012 $ 39 $ 218,428 2015 Performing Non-performing PCI Total Real estate loans: Mortgages $ 139,734 $ 1,270 $ 35 $ 141,039 Home Equity 62,236 132 - 62,368 Consumer 11,470 64 9 11,543 Total $ 213,440 $ 1,466 $ 44 $ 214,950 |
Age analysis of past due financing receivables | The following table includes an aging analysis of the recorded investment of past due loans as of December 31, 2016 and 2015 (in thousands): 30-59 Days 60-89 Days 90 Days Total Past Total Financing 90 Days and 2016 Past Due Past Due Or Greater Due Current PCI Receivables Accruing Real estate loans: Mortgages $ 630 $ 36 $ 1,109 $ 1,775 $ 146,920 $ 35 $ 148,730 $ 173 Home Equity 384 49 209 642 58,051 - 58,693 160 Commercial 1,757 58 4,302 6,117 244,491 1,969 252,577 - Agricultural - - 1,145 1,145 121,741 738 123,624 - Construction - - - - 25,441 - 25,441 - Consumer 115 40 83 238 10,763 4 11,005 67 Other commercial loans 95 35 4,004 4,134 53,884 621 58,639 - Other agricultural loans 43 34 5 82 23,306 - 23,388 5 State and political subdivision loans - - - - 97,514 - 97,514 - Total $ 3,024 $ 252 $ 10,857 $ 14,133 $ 782,111 $ 3,367 $ 799,611 $ 405 Loans considered non-accrual $ 172 $ 105 $ 10,452 $ 10,729 $ 725 $ - $ 11,454 Loans still accruing 2,852 147 405 3,404 781,386 3,367 788,157 Total $ 3,024 $ 252 $ 10,857 $ 14,133 $ 782,111 $ 3,367 $ 799,611 30-59 Days 60-89 Days 90 Days Total Past Total Financing 90 Days and 2015 Past Due Past Due Or Greater Due Current PCI Receivables Accruing Real estate loans: Mortgages $ 487 $ 283 $ 687 $ 1,457 $ 139,547 $ 35 $ 141,039 $ 321 Home Equity 630 15 121 766 61,602 - 62,368 73 Commercial 824 57 4,139 5,020 230,352 2,170 237,542 60 Agricultural 177 167 - 344 56,740 738 57,822 - Construction - - - - 15,011 - 15,011 - Consumer 239 37 49 325 11,209 9 11,543 9 Other commercial loans 143 214 1,010 1,367 55,316 866 57,549 160 Other agricultural loans 9 - - 9 13,648 - 13,657 - State and political subdivision loans - - - - 98,500 - 98,500 - Total $ 2,509 $ 773 $ 6,006 $ 9,288 $ 681,925 $ 3,818 $ 695,031 $ 623 Loans considered non-accrual $ 54 $ 171 $ 5,383 $ 5,608 $ 923 $ - $ 6,531 Loans still accruing 2,455 602 623 3,680 681,002 3,818 688,500 Total $ 2,509 $ 773 $ 6,006 $ 9,288 $ 681,925 $ 3,818 $ 695,031 |
Summary of financing receivables on nonaccrual status | The following table reflects the loans on nonaccrual status as of December 31, 2016 and 2015, respectively. The balances are presented by class of loan (in thousands): 2016 2015 Real estate loans: Mortgages $ 1,475 $ 949 Home Equity 95 59 Commercial 4,445 4,422 Agricultural 1,340 34 Construction - - Consumer 42 55 Other commercial loans 4,057 1,012 Other agricultural loans - - State and political subdivision - - $ 11,454 $ 6,531 |
Summary of troubled debt restructurings on financing receivables | Loan modifications that are considered TDRs completed during the years ended December 31, 2016, 2015 and 2014 were as follows (dollars in thousands): Number of contracts Pre-modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Interest Modification Term Modification Interest Modification Term Modification Interest Modification Term Modification Real estate loans: Commercial - 4 $ - $ 1,188 $ - $ 1,188 Agricultural - 5 - 1,956 - 1,956 Other commercial loans - 3 - 3,076 - 3,076 Other agricultural loans - 7 - 1,558 - 1,558 Total - 19 $ - $ 7,778 $ - $ 7,778 Real estate loans: Mortgages 1 1 $ 71 $ 19 $ 71 $ 19 Total 1 1 $ 71 $ 19 $ 71 $ 19 Real estate loans: Commercial - 2 $ - $ 153 $ - $ 153 Total - 2 $ - $ 153 $ - $ 153 Recidivism, or the borrower defaulting on its obligation pursuant to a modified loan, results in the loan once again becoming a non-accrual loan. Recidivism occurs at a notably higher rate than do defaults on new origination loans, so modified loans present a higher risk of loss than do new origination loans. The following table presents the recorded investment in loans that were modified as TDRs during each 12-month period prior to the current reporting periods, which begin January 1, 2016, 2015 and 2014, respectively, and that subsequently defaulted during these reporting periods (dollars in thousands): December 31, 2016 December 31, 2015 December 31, 2014 Number of contracts Recorded investment Number of contracts Recorded investment Number of contracts Recorded investment Real estate loans: Commercial - $ - - $ - 1 $ 50 Total recidivism - $ - - $ - 1 $ 50 |
Roll forward of allowance for loan losses by portfolio segment | The following tables roll forward the balance of the allowance for loan and lease losses for the years ended December 31, 2016, 2015 and 2014 and is segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of December 31, 2016, 2015 and 2014 (in thousands): Balance at December 31, 2015 Charge-offs Recoveries Provision Balance at December 31, 2016 Individually evaluated for impairment Collectively evaluated for impairment Real estate loans: Residential $ 905 $ (85 ) $ - $ 244 $ 1,064 $ 32 $ 1,032 Commercial 3,376 (100 ) 479 (166 ) 3,589 45 3,544 Agricultural 409 - - 1,085 1,494 54 1,440 Construction 24 - - 23 47 - 47 Consumer 102 (100 ) 88 32 122 - 122 Other commercial loans 1,183 (55 ) 33 166 1,327 326 1,001 Other agricultural loans 122 - - 190 312 30 282 State and political subdivision loans 593 - - 240 833 - 833 Unallocated 392 - - (294 ) 98 - 98 Total $ 7,106 $ (340 ) $ 600 $ 1,520 $ 8,886 $ 487 $ 8,399 Balance at December 31, 2014 Charge-offs Recoveries Provision Balance at December 31, 2015 Individually evaluated for impairment Collectively evaluated for impairment Real estate loans: Residential $ 878 $ (66 ) $ - $ 93 $ 905 $ 37 $ 868 Commercial 3,419 (84 ) 14 27 3,376 62 3,314 Agricultural 451 (42 ) 409 - 409 Construction 26 - - (2 ) 24 - 24 Consumer 84 (47 ) 33 32 102 - 102 Other commercial loans 1,007 (41 ) 2 215 1,183 256 927 Other agricultural loans 217 (95 ) 122 122 State and political - subdivision loans 545 - - 48 593 - 593 Unallocated 188 - - 204 392 - 392 Total $ 6,815 $ (238 ) $ 49 $ 480 $ 7,106 $ 355 $ 6,751 Balance at December 31, 2013 Charge-offs Recoveries Provision Balance at December 31, 2014 Individually evaluated for impairment Collectively evaluated for impairment Real estate loans: Residential $ 946 $ (97 ) $ - $ 29 $ 878 $ 25 $ 853 Commercial 3,983 (516 ) 15 (63 ) 3,419 72 3,347 Agricultural 575 (124 ) 451 451 Construction 50 - - (24 ) 26 - 26 Consumer 105 (47 ) 27 (1 ) 84 - 84 Other commercial loans 686 (250 ) - 571 1,007 1 1,006 Other agricultural loans 256 (39 ) 217 217 State and political - subdivision loans 330 - - 215 545 - 545 Unallocated 167 - - 21 188 - 188 Total $ 7,098 $ (910 ) $ 42 $ 585 $ 6,815 $ 98 $ 6,717 |
PREMISES & EQUIPMENT (Tables)
PREMISES & EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
PREMISES & EQUIPMENT [Abstract] | |
Summary of premises and equipment | Premises and equipment at December 31, 2016 and 2015 are summarized as follows (in thousands): December 31, 2016 2015 Land $ 5,110 $ 5,110 Buildings 17,315 17,349 Furniture, fixtures and equipment 6,678 6,636 Construction in process 5 88 29,108 29,183 Less: accumulated depreciation 12,078 11,920 Premises and equipment, net $ 17,030 $ 17,263 |
GOODWILL AND OTHER INTANGIBLE35
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | |
Schedule of gross carrying value and accumulated amortization of intangible assets | The following table provides the gross carrying value and accumulated amortization of intangible assets as of December 31, 2016 and 2015 (in thousands): December 31, 2016 December 31, 2015 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value Amortized intangible assets (1): MSRs $ 1,471 $ (787 ) $ 684 $ 1,336 $ (638 ) $ 698 Core deposit intangibles 1,641 (320 ) 1,321 1,641 (25 ) 1,616 Covenant not to compete 125 (34 ) 91 125 (2 ) 123 Total amortized intangible assets $ 3,237 $ (1,141 ) $ 2,096 $ 3,102 $ (665 ) $ 2,437 Unamortized intangible assets: Goodwill $ 21,089 $ 21,089 (1) Excludes fully amortized intangible assets |
Schedule of future amortization expense for amortized intangible assets | The following table provides the current year and estimated future amortization expense for the next five years of amortized intangible assets (in thousands). We based our projections of amortization expense shown below on existing asset balances at December 31, 2016. Future amortization expense may vary from these projections: MSRs Core deposit intangibles Covenant not to compete Total Year ended December 31, 2016 (actual) $ 173 $ 295 $ 32 $ 500 Estimate for year ended December 31, 2017 177 266 31 474 2018 143 236 30 409 2019 113 206 30 349 2020 87 177 - 264 2021 64 147 - 211 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
DEPOSITS [Abstract] | |
Summary of deposits | The following table shows the breakdown of deposits as of December 31, 2016 and 2015, by deposit type (in thousands): 2016 2015 Non-interest-bearing deposits $ 147,425 $ 150,960 NOW accounts 305,862 279,655 Savings deposits 170,722 170,277 Money market deposit accounts 116,880 105,229 Certificates of deposit 264,614 281,910 Total $ 1,005,503 $ 988,031 |
Maturities of certificates of deposit | Following are maturities of certificates of deposit as of December 31, 2016 (in thousands): 2017 $ 128,641 2018 47,673 2019 35,722 2020 25,036 2021 22,587 Thereafter 4,955 Total certificates of deposit $ 264,614 |
BORROWED FUNDS AND REPURCHASE37
BORROWED FUNDS AND REPURCHASE AGREEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
BORROWED FUNDS AND REPURCHASE AGREEMENTS [Abstract] | |
Borrowed funds | The following table shows the breakdown of borrowed funds as of December 31, 2016 and 2015, (dollars in thousands): Securities Sold Under Total Agreements to FHLB Federal Funds FRB Notes Term Borrowed Repurchase(a) Advances(b) Line (c) BIC Line (d) Payable(e) Loans(f) Funds 2016 Balance at December 31 $ 14,307 $ 41,330 $ - $ - $ 7,500 $ 16,525 $ 79,662 Highest balance at any month-end 16,132 45,125 - - 7,500 16,525 85,282 Average balance 15,057 7,917 2 3 7,500 16,525 47,004 Weighted average interest rate: Paid during the year 0.49 % 0.63 % 0.76 % 1.00 % 3.55 % 2.44 % 1.69 % As of year-end 0.67 % 0.74 % 0.00 % 0.00 % 3.79 % 2.44 % 1.36 % 2015 Balance at December 31 $ 16,008 $ 1,598 $ - $ - $ 7,500 $ 16,525 $ 41,631 Highest balance at any month-end 16,008 26,996 - - 7,500 20,569 71,073 Average balance 5,998 5,218 - - 7,500 17,984 36,700 Weighted average interest rate: Paid during the year 0.82 % 0.35 % 0.00 % 0.77 % 3.14 % 2.25 % 1.93 % As of year-end 0.45 % 0.43 % 0.00 % 0.00 % 3.33 % 2.40 % 1.74 % (a) We utilize securities sold under agreements to repurchase to facilitate the needs of our customers and to facilitate secured short-term funding needs. Securities sold under agreements to repurchase are stated at the amount of cash received in connection with the transaction. We monitor collateral levels on a continuous basis. We may be required to provide additional collateral based on the fair value of the underlying securities. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents. (b) FHLB Advances consist of an "Open RepoPlus" agreement with the FHLB of Pittsburgh. FHLB "Open RepoPlus" advances are short-term borrowings that bear interest based on the FHLB discount rate or Federal Funds rate, whichever is higher. The Company has a borrowing limit of $343,209,000, inclusive of any outstanding advances. FHLB advances are secured by a blanket security agreement that includes the Company's FHLB stock, as well as certain investment and mortgage-backed securities held in safekeeping at the FHLB and certain residential and commercial mortgage loans. (c) The federal funds line consists of an unsecured line from a third party bank at market rates. The Company has a borrowing limit of $10,000,000, inclusive of any outstanding balances. No specific collateral is required to be pledged for these borrowings. (d) The Federal Reserve Bank Borrower in Custody (FRB BIC) Line consists of a borrower in custody in agreement open in January 2010 with the Federal Reserve Bank of Philadelphia secured by municipal loans maintained in the Company's possession. As of December 31, 2016 and 2015, the Company has a borrowing limit of $4,360,000 and $7,949,000, respectively, inclusive of any outstanding advances. The approximate carrying value of the municipal loan collateral was $15,560,000 and $16,146,000 as of December 31, 2016 and 2015, respectively. (e) In December 2003, the Company formed a special purpose entity ("Entity") to issue $7,500,000 of floating rate obligated mandatory redeemable trust preferred securities as part of a pooled offering. The rate was determined quarterly and floated based on the 3 month LIBOR plus 2.80. The Entity may redeem them, in whole or in part, at face value after December 17, 2008, and on a quarterly basis thereafter. The Company borrowed the proceeds of the issuance from the Entity in December 2003 in the form of a $7,500,000 note payable. Debt issue costs of $75,000 have been capitalized and fully amortized as of December 31, 2008. Under current accounting rules, the Company's minority interest in the Entity was recorded at the initial investment amount and is included in the other assets section of the balance sheet. The Entity is not consolidated as part of the Company's consolidated financial statements. (f) |
Remaining contractual maturity of the repurchase agreements | The collateral pledged on the repurchase agreements by the remaining contractual maturity of the repurchase agreements in the Consolidated Balance Sheets as of December 31 , 2016 December 31, 2015 Remaining Contractual Maturity of the Agreements Overnight and Up to Greater than 2016 Continuous 30 Days 30 - 90 Days 90 days Total Repurchase Agreements: U.S. agency securities $ 16,118 $ - $ - $ 2,059 $ 18,177 Total carrying value of collateral pledged $ 16,118 $ - $ - $ 2,059 $ 18,177 Total liability recognized for repurchase agreements $ 14,307 2015 Repurchase Agreements: U.S. agency securities $ 18,144 $ - $ - $ 2,049 $ 20,193 Total carrying value of collateral pledged $ 18,144 $ - $ - $ 2,049 $ 20,193 Total liability recognized for repurchase agreements $ 16,008 |
Federal Home Loan Bank loans by branch | Term Loans consist of separate loans with the FHLB of Pittsburgh as follows (in thousands): December 31, December 31, Interest Rate Maturity 2016 2015 Fixed: 2.29 % October 2, 2017 2,000 2,000 2.72 % July 12, 2018 1,000 1,000 1.87 % February 4, 2019 2,000 2,000 2.61 % February 3, 2021 2,000 2,000 3.52 % July 12, 2021 2,000 2,000 2.37 % August 20, 2021 2,800 2,800 2.08 % January 6, 2022 4,725 4,725 Total term loans $ 16,525 $ 16,525 |
Maturities of borrowed funds | Following are maturities of borrowed funds as of December 31, 2016 (in thousands): 2017 $ 64,033 2018 1,000 2019 2,000 2020 570 2021 7,334 Thereafter 4,725 Total borrowed funds $ 79,662 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
EMPLOYEE BENEFIT PLANS [Abstract] | |
Obligation and net funded status | The following table sets forth the obligation and funded status as of December 31 (in thousands): 2016 2015 Change in benefit obligation Benefit obligation at beginning of year $ 17,809 $ 11,777 Benefit obligation acquired as part of FNB acquisition - 6,377 Service cost 345 352 Interest cost 692 424 Actuarial (Gain) / Loss 439 (456 ) Benefits paid (682 ) (665 ) Benefit obligation at end of year 18,603 17,809 Change in plan assets Fair value of plan assets at beginning of year 14,786 11,039 Fair value of plan assets at acquisition - 4,053 Actual return (loss) on plan assets 864 (41 ) Employer contribution 818 400 Benefits paid (682 ) (665 ) Fair value of plan assets at end of year 15,786 14,786 Funded status $ (2,817 ) $ (3,023 ) Amounts not yet recognized as a component of net periodic pension cost as of December 31 (in thousands): Amounts recognized in accumulated other comprehensive loss consists of: 2016 2015 Net loss $ 4,263 $ 3,919 Prior service cost (175 ) (222 ) Total $ 4,088 $ 3,697 |
Components of net periodic benefit costs | The components of net periodic benefit costs for the years ended December 31 are as follows (in thousands): 2016 2015 2014 Service cost $ 345 $ 352 $ 307 Interest cost 692 424 415 Return on plan assets (1,034 ) (791 ) (786 ) Net amortization and deferral 219 205 51 Net periodic benefit cost $ 222 $ 190 $ (13 ) |
Weighted-average assumptions used to determine benefit obligations and net periodic benefit cost (income) | The weighted-average assumptions used to determine benefit obligations at December 31, 2016 and 2015 is summarized in the following table. The change in the discount rate is the primary driver of the actuarial loss that occurred in 2016 of $439,000. 2016 2015 Discount rate 3.78% 3.94% Rate of compensation increase 3.00% 3.00% The weighted-average assumptions used to determine net periodic benefit cost (income) for the year ended December 31: 2016 2015 2014 Discount rate 3.94% 3.61% 4.30% Expected long-term return on plan assets 7.00% 7.00% 7.50% Rate of compensation increase 3.00% 3.00% 3.00% |
Fair value of plan assets | The following table sets forth by level, within the fair value hierarchy as defined in footnote 17, the Plan's assets at fair value as of December 31, 2016 and 2015 (in thousands): 2016 Level I Level II Level III Total Allocation Assets Cash and cash equivalents $ 863 $ - $ - $ 863 5.5 % Equity securities 5,404 - - 5,404 34.1 % Mutual funds and ETF's 5,235 - - 5,235 33.2 % Corporate bonds - 3,641 - 3,641 23.1 % Municipal bonds 107 107 0.7 % U.S. Agency securities - 536 - 536 3.4 % Total $ 11,502 $ 4,284 $ - $ 15,786 100.0 % 2015 Level I Level II Level III Total Allocation Assets Cash and cash equivalents $ 1,704 $ - $ - $ 1,704 11.5 % Equity securities 3,821 - - 3,821 25.8 % Mutual funds and ETF's 6,085 - - 6,085 41.3 % Corporate bonds - 3,019 - 3,019 20.4 % Municipal bonds 107 107 0.7 % U.S. Agency securities - 50 - 50 0.3 % Total $ 11,610 $ 3,176 $ - $ 14,786 100.0 % |
Expected future benefit payments | The Bank expects to contribute $520,000 to its pension plans in 2017. Expected future benefit payments that the Bank estimates from its pension plan are as follows (in thousands): 2017 $ 733 2018 591 2019 1,820 2020 1,549 2021 1,403 2022 - 2026 7,407 |
Schedule of vesting, awarding and forfeiting of restricted shares | The following table details the vesting, awarding and forfeiting of restricted shares during 2016: 2016 Weighted Average Shares Market Price Outstanding, beginning of year 8,269 $ 49.98 Granted 4,110 48.13 Forfeited (90 ) 49.26 Increase due to stock dividends - - Vested (3,818 ) 49.95 Outstanding, end of year 8,471 $ 49.10 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
INCOME TAXES [Abstract] | |
Provision for income taxes (benefit) | The provision for income taxes consists of the following (in thousands): Year Ended December 31, 2016 2015 2014 Currently payable $ 2,672 $ 2,913 $ 3,081 Deferred tax liability (asset) 362 (192 ) 478 Provision for income taxes $ 3,034 $ 2,721 $ 3,559 |
Deferred tax assets | The following temporary differences gave rise to the net deferred tax asset and liabilities at December 31, 2016 and 2015, respectively (in thousands): 2016 2015 Deferred tax assets: Allowance for loan losses $ 4,518 $ 4,238 Deferred compensation 757 772 Merger & acquisition costs 16 20 Allowance for losses on available-for-sale securities 250 436 Pension and other retirement obligation 1,454 1,483 Interest on non-accrual loans 1,259 1,001 Incentive plan accruals 421 362 Other real estate owned 152 136 Low income housing tax credits 94 63 NOL carry forward 709 950 AMT Credit Carryforward 8 152 Other 156 157 Total $ 9,794 $ 9,770 Deferred tax liabilities: Premises and equipment $ (998 ) $ (919 ) Investment securities accretion (189 ) (177 ) Loan fees and costs (369 ) (154 ) Goodwill and core deposit intangibles (3,573 ) (3,594 ) Mortgage servicing rights (233 ) (238 ) Unrealized gains on available-for-sale securities (673 ) (1,135 ) Other (17 ) (44 ) Total (6,052 ) (6,261 ) Deferred tax asset, net $ 3,742 $ 3,509 |
Reconciliation of statutory tax rates to effective tax rates | The total provision for income taxes is different from that computed at the statutory rates due to the following items (in thousands): Year Ended December 31, 2016 2015 2014 Provision at statutory rates on pre-tax income $ 5,328 $ 4,878 $ 5,761 Effect of tax-exempt income (1,943 ) (1,915 ) (1,865 ) Low income housing tax credits (198 ) (198 ) (198 ) Bank owned life insurance (234 ) (214 ) (172 ) Nondeductible interest 55 61 60 Nondeductible merger and acquisition expenses - 102 - Other items 26 7 (27 ) Provision for income taxes $ 3,034 $ 2,721 $ 3,559 Statutory tax rates 34 % 34 % 34 % Effective tax rates 19.4 % 19.0 % 21.0 % |
OTHER COMPREHENSIVE INCOME (Tab
OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
OTHER COMPREHENSIVE INCOME [Abstract] | |
Components of accumulated other comprehensive loss, net of tax | The components of accumulated other comprehensive loss, net of tax, as of December 31, were as follows (in thousands): 2016 2015 Net unrealized gain on securities available for sale $ 1,979 $ 3,339 Tax effect 673 1,135 Net -of-tax amount 1,306 2,204 Unrecognized pension costs (4,088 ) (3,697 ) Tax effect (1,390 ) (1,257 ) Net -of-tax amount (2,698 ) (2,440 ) Total accumulated other comprehensive loss $ (1,392 ) $ (236 ) |
Schedule of the significant amounts reclassified out of each component of accumulated other comprehensive income | The following tables present the changes in accumulated other comprehensive loss by component net of tax for the years ended December 31, 2016, 2015 and 2014 (in thousands): Unrealized gain (loss) on available for sale securities (a) Defined Benefit Pension Items (a) Total Balance as of December 31, 2013 $ (108 ) $ (1,117 ) $ (1,225 ) Other comprehensive income (loss) before reclassifications (net of tax) 3,608 (1,243 ) 2,365 Amounts reclassified from accumulated other comprehensive income (loss) (net of tax) (407 ) 34 (373 ) Net current period other comprehensive income (loss) 3,201 (1,209 ) 1,992 Balance as of December 31, 2014 $ 3,093 $ (2,326 ) $ 767 Balance as of December 31, 2014 $ 3,093 $ (2,326 ) $ 767 Other comprehensive loss before reclassifications (net of tax) (606 ) (249 ) (855 ) Amounts reclassified from accumulated other comprehensive income (loss) (net of tax) (283 ) 135 (148 ) Net current period other comprehensive loss (889 ) (114 ) (1,003 ) Balance as of December 31, 2015 $ 2,204 $ (2,440 ) $ (236 ) Balance as of December 31, 2015 $ 2,204 $ (2,440 ) $ (236 ) Other comprehensive loss before reclassifications (net of tax) (730 ) (403 ) (1,133 ) Amounts reclassified from accumulated other comprehensive loss (net of tax) (168 ) 145 (23 ) Net current period other comprehensive loss (898 ) (258 ) (1,156 ) Balance as of December 31, 2016 $ 1,306 $ (2,698 ) $ (1,392 ) (a) Amounts in parentheses indicate debits on the consolidated balance sheet. The following table presents the significant amounts reclassified out of each component of accumulated other comprehensive loss for the years ended December 31, 2016, 2015 and 2014: Details about accumulated other comprehensive loss Amount reclassified from accumulated comprehensive loss (a) Affected line item in the Consolidated Statement of Income December 31, 2016 2015 2014 Unrealized gains and losses on available for sale securities $ 255 $ 429 $ 616 Investment securities gains, net (87 ) (146 ) (209 ) Provision for income taxes $ 168 $ 283 $ 407 Net of tax Defined benefit pension items $ (219 ) $ (205 ) $ (51 ) Salaries and employee benefits 74 70 17 Provision for income taxes $ (145 ) $ (135 ) $ (34 ) Net of tax Total reclassifications $ 23 $ 148 $ 373 (a) Amounts in parentheses indicate debits. |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
Summary of loan activity with officers, directors, stockholders and associates | A summary of loan activity for the years ended December 31, 2016 and 2015 with officers, directors, stockholders and associates of such persons is listed below (in thousands): Year Ended December 31, 2016 2015 Balance, beginning of year $ 5,343 $ 4,314 New loans 4,512 5,828 Repayments (4,285 ) (4,799 ) Balance, end of year $ 5,570 $ 5,343 |
REGULATORY MATTERS (Tables)
REGULATORY MATTERS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
REGULATORY MATTERS [Abstract] | |
Capital ratios under banking regulations | The Company and Bank's computed risk‑based capital ratios are as follows as of December 31, 2016 and 2015 (dollars in thousands): Actual For Capital Adequacy Purposes To Be Well Capitalized Under Prompt Corrective Action Provisions 2016 Amount Ratio Amount Ratio Amount Ratio Total Capital (to Risk Weighted Assets): Company $ 121,717 14.93 % $ 65,217 8.00 % $ 81,522 10.00 % Bank $ 117,537 14.46 % $ 65,020 8.00 % $ 81,275 10.00 % Tier 1 Capital (to Risk Weighted Assets): Company $ 112,599 13.81 % $ 48,913 6.00 % $ 65,217 8.00 % Bank $ 108,419 13.34 % $ 48,765 6.00 % $ 65,020 8.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets): Company $ 105,099 12.89 % $ 36,685 4.50 % $ 52,989 6.50 % Bank $ 108,419 13.34 % $ 36,574 4.50 % $ 52,829 6.50 % Tier 1 Capital (to Average Assets): Company $ 112,599 9.46 % $ 47,586 4.00 % $ 59,483 5.00 % Bank $ 108,419 9.13 % $ 39,006 4.00 % $ 48,757 5.00 % 2015 Total Capital (to Risk Weighted Assets): Company $ 114,886 16.23 % $ 56,630 8.00 % $ 70,787 10.00 % Bank $ 108,232 15.34 % $ 56,443 8.00 % $ 70,554 10.00 % Tier 1 Capital (to Risk Weighted Assets): Company $ 107,612 15.20 % $ 42,472 6.00 % $ 56,630 8.00 % Bank $ 100,958 14.31 % $ 42,332 6.00 % $ 56,443 8.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets): Company $ 100,112 14.14 % $ 31,854 4.50 % $ 46,012 6.50 % Bank $ 100,958 14.31 % $ 31,749 4.50 % $ 45,860 6.50 % Tier 1 Capital (to Average Assets): Company $ 107,612 11.01 % $ 39,083 4.00 % $ 48,854 5.00 % Bank $ 100,958 10.35 % $ 39,006 4.00 % $ 48,757 5.00 % |
COMMITMENTS AND CONTINGENT LI43
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
COMMITMENTS AND CONTINGENT LIABILITIES [Abstract] | |
Financial instruments whose contract amounts represent credit risk | Financial instruments, whose contract amounts represent credit risk at December 31, 2016 and 2015, are as follows (in thousands): 2016 2015 Commitments to extend credit $ 206,505 $ 143,134 Standby letters of credit 14,955 13,751 $ 221,460 $ 156,885 |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
OPERATING LEASES [Abstract] | |
Future minimum rental payments under operating leases | The following schedule shows future minimum rental payments under operating leases with noncancellable terms in excess of one year as of December 31, 2016 ( in thousands): 2017 $ 251 2018 253 2019 259 2020 152 2021 104 Thereafter 241 Total $ 1,260 |
FAIR VALUE OF FINANCIAL INSTR45
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | |
Summary of assets measured at fair value on a recurring basis | The following tables present the assets reported on the consolidated balance sheet at their fair value on a recurring basis as of December 31, 2016 and 2015 (in thousands) 2016 Level I Level II Level III Total Fair value measurements on a recurring basis: Securities available for sale: U.S. Agency securities $ - $ 170,414 $ - $ 170,414 U.S. Treasuries securities 3,000 - - 3,000 Obligations of state and political subdivisions - 96,926 - 96,926 Corporate obligations - 3,050 - 3,050 Mortgage-backed securities in government sponsored entities - 37,728 - 37,728 Equity securities in financial institutions 2,899 - - 2,899 2015 Level I Level II Level III Total Fair value measurements on a recurring basis: Securities available for sale: U.S. Agency securities $ - $ 199,591 $ - $ 199,591 U.S. Treasuries securities 10,082 - - 10,082 Obligations of state and political subdivisions - 102,863 - 102,863 Corporate obligations - 14,565 - 14,565 Mortgage-backed securities in government sponsored entities - 30,204 - 30,204 Equity securities in financial institutions 2,432 - - 2,432 |
Summary of assets measured at fair value on non-recurring basis | Assets measured at fair value on a nonrecurring basis as of December 31, 2016 and 2015 (in thousands) 2016 Level I Level II Level III Total Impaired Loans $ - $ - $ 2,033 $ 2,033 Other real estate owned - - 839 839 2015 Level I Level II Level III Total Impaired Loans $ - $ - $ 894 $ 894 Other real estate owned - - 1,197 1,197 |
Significant unobservable inputs used in fair value measurement process | The following table provides a listing of the significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques. Quantitative Information about Level 3 Fair Value Measurements 2016 Fair Value Valuation Technique(s) Unobservable input Range Weighted average Impaired Loans 2,033 Appraised Collateral Values Discount for time since appraisal 0-65% 28.98% Selling costs 5%-9% 7.56% Holding period 6 - 12 months 11 months Other real estate owned 839 Appraised Collateral Values Discount for time since appraisal 10-67% 25.45% 2015 Fair Value Valuation Technique(s) Unobservable input Range Weighted average Impaired Loans 894 Appraised Collateral Values Discount for time since appraisal 0-70% 46.50% Selling costs 4%-10% 7.75% Holding period 12 months 10 months Other real estate owned 1,197 Appraised Collateral Values Discount for time since appraisal 0-75% 25% |
Fair value of financial instruments | The fair values of the Company's financial instruments are as follows (in thousands): Carrying December 31, 2016 Amount Fair Value Level I Level II Level III Financial assets: Cash and due from banks $ 17,754 $ 17,754 $ 17,754 $ - $ - Interest bearing time deposits with other banks 6,955 6,960 - - 6,960 Available-for-sale securities 314,017 314,017 5,899 308,118 - Loans held for sale 1,827 1,827 1,827 - - Net loans 790,725 797,184 - - 797,184 Bank owned life insurance 26,223 26,223 26,223 - - Regulatory stock 5,306 5,306 5,306 - - Accrued interest receivable 4,089 4,089 4,089 - - Financial liabilities: Deposits $ 1,005,503 $ 1,004,072 $ 740,889 $ - $ 263,183 Borrowed funds 79,662 77,425 41,330 - 36,095 Accrued interest payable 720 720 720 - - Carrying December 31, 2015 Amount Fair Value Level I Level II Level III Financial assets: Cash and due from banks $ 24,384 $ 24,384 $ 24,384 $ - $ - Interest bearing time deposits with other banks 7,696 7,705 - - 7,705 Available-for-sale securities 359,737 359,737 12,514 347,223 - Loans held for sale 603 603 603 Net loans 687,925 712,524 - - 712,524 Bank owned life insurance 25,535 25,535 25,535 - - Regulatory stock 3,459 3,459 3,459 - - Accrued interest receivable 4,211 4,211 4,211 - - Financial liabilities: Deposits $ 988,031 $ 987,542 $ 706,121 $ - $ 281,421 Borrowed funds 41,631 38,863 1,598 - 37,265 Accrued interest payable 734 734 734 - - |
CONDENSED FINANCIAL INFORMATI46
CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY [Abstract] | |
Condensed financial information | The following is condensed financial information for Citizens Financial Services, Inc.: CITIZENS FINANCIAL SERVICES, INC. CONDENSED BALANCE SHEET December 31, (in thousands) 2016 2015 Assets: Cash $ 2,245 $ 4,593 Available-for-sale securities 2,735 2,332 Investment in subsidiary: First Citizens Community Bank 125,973 120,370 Other assets 564 557 Total assets $ 131,517 $ 127,852 Liabilities: Other liabilities $ 749 $ 592 Borrowed funds 7,500 7,500 Total liabilities 8,249 8,092 Stockholders' equity 123,268 119,760 Total liabilities and stockholders' equity $ 131,517 $ 127,852 CITIZENS FINANCIAL SERVICES, INC. CONDENSED STATEMENT OF INCOME Year Ended December 31, (in thousands) 2016 2015 2014 Dividends from: Bank subsidiary $ 5,842 $ 5,582 $ 14,332 Available-for-sale securities 92 71 56 Total income 5,934 5,653 14,388 Realized securities gains 31 76 - Expenses 463 892 555 Income before equity in undistributed earnings of subsidiary 5,502 4,837 13,833 Equity in undistributed earnings - First Citizens Community Bank 7,136 6,789 (448 ) Net income $ 12,638 $ 11,626 $ 13,385 Comprehensive income $ 11,482 $ 10,623 $ 15,377 CITIZENS FINANCIAL SERVICES, INC. STATEMENT OF CASH FLOWS Year Ended December 31, (in thousands) 2016 2015 2014 Cash flows from operating activities: Net income $ 12,638 $ 11,626 $ 13,385 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed earnings of subsidiaries (7,136 ) (6,789 ) 448 Investment securities gains (31 ) (76 ) - Other, net 289 322 174 Net cash provided by operating activities 5,760 5,083 14,007 Cash flows from investing activities: Purchases of available-for-sale securities (1 ) (901 ) (602 ) Proceeds from the sale of available-for-sale securities 201 113 - Net cash provided by (used in) investing activities 200 (788 ) (602 ) Cash flows from financing activities: Cash dividends paid (5,081 ) (5,151 ) (6,121 ) Purchase of treasury stock (3,227 ) (2,455 ) (814 ) Purchase of restricted stock - (7 ) (170 ) Net cash used in financing activities (8,308 ) (7,613 ) (7,105 ) Net decrease in cash (2,348 ) (3,318 ) 6,300 Cash at beginning of year 4,593 7,911 1,611 Cash at end of year $ 2,245 $ 4,593 $ 7,911 |
CONSOLIDATED CONDENSED QUARTE47
CONSOLIDATED CONDENSED QUARTERLY DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
CONSOLIDATED CONDENSED QUARTERLY DATA (UNAUDITED) [Abstract] | |
Consolidated condensed quarterly data | The following table presents summarized quarterly financial data for 2016 and 2015: (in thousands, except share data) Three Months Ended, 2016 Mar 31 June 30 Sep 30 Dec 31 Interest income $ 10,462 $ 10,426 $ 10,948 $ 11,169 Interest expense 1,257 1,255 1,236 1,293 Net interest income 9,205 9,171 9,712 9,876 Provision for loan losses 135 135 500 750 Non-interest income 1,889 1,855 1,908 1,992 Investment securities gains, net 27 128 - 100 Non-interest expenses 6,912 7,301 7,200 7,258 Income before provision for income taxes 4,074 3,718 3,920 3,960 Provision for income taxes 791 687 767 789 Net income $ 3,283 $ 3,031 $ 3,153 $ 3,171 Earnings Per Share Basic $ 0.98 $ 0.91 $ 0.94 $ 0.95 Earnings Per Share Diluted $ 0.98 $ 0.91 $ 0.94 $ 0.95 Three Months Ended, 2015 Mar 31 June 30 Sep 30 Dec 31 Interest income $ 8,771 $ 8,768 $ 8,863 $ 9,251 Interest expense 1,184 1,207 1,218 1,211 Net interest income 7,587 7,561 7,645 8,040 Provision for loan losses 120 120 120 120 Non-interest income 1,602 1,780 1,736 1,876 Investment securities gains, net 126 175 129 (1 ) Non-interest expenses 5,335 5,428 5,852 6,814 Income before provision for income taxes 3,860 3,968 3,538 2,981 Provision for income taxes 740 779 681 521 Net income $ 3,120 $ 3,189 $ 2,857 $ 2,460 Earnings Per Share Basic $ 1.02 $ 1.04 $ 0.94 $ 0.79 Earnings Per Share Diluted $ 1.02 $ 1.04 $ 0.94 $ 0.79 |
ACQUISITION OF FNB (Tables)
ACQUISITION OF FNB (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Acquisition [Line Items] | |
Summarizes the purchase of FNB | The following table summarizes the purchase of FNB as of December 11, 2015: (In Thousands, Except Per Share Data) Purchase Price Consideration in Common Stock Citizens Financial Services, Inc. shares issued 336,515 Value assigned to Citizens Financial Services, Inc. common share $ 47.50 Purchase price assigned to FNB common shares exchanged for Citizens Financial Services, Inc. $ 15,984 Purchase Price Consideration - Cash for Common Stock Purchase price assigned to The First National Bank of Fredericksburg common shares exchanged for cash 5,619 Total Purchase Price 21,603 Net Assets Acquired: The First National Bank of Fredericksburg shareholders' equity $ 12,298 Adjustments to reflect assets acquired at fair value: Loans Interest rate 31 General credit (1,362 ) Specific credit - non-amortizing (2,495 ) Specific credit - amortizing (665 ) Core deposit intangible 1,641 Covenant not to compete 125 Premises and equipment 1,203 Leased premises contracts (359 ) Other assets (358 ) Deferred tax assets 785 Adjustments to reflect liabilities acquired at fair value: Time deposits (74 ) 10,770 Goodwill resulting from merger $ 10,833 |
Schedule of asset acquired and liability assumed | The following condensed statement reflects the amounts recognized as of the acquisition date for each major class of asset acquired and liability assumed: (In Thousands) Total purchase price $ 21,603 Assets (liabilities) acquired: Cash and cash equivalents $ 83,514 Interest bearing time deposits with other banks 1,236 Securities available for sale 23,831 Loans 115,211 Premises and equipment, net 4,743 Accrued interest receivable 282 Bank-owned life insurance 4,598 Intangibles 1,981 Deferred tax asset 2,979 Other assets 2,332 Time deposits (42,675 ) Deposits other than time deposits (182,555 ) Accrued interest payable (14 ) Other liabilities (4,693 ) 10,770 Goodwill resulting from the FNB merger $ 10,833 |
Summary of integration costs and amortization of fair value adjustments | Merger and acquisition integration costs and amortization of fair value adjustments are included in the numbers below. Pro Formas Actual from Acquisition Date Through December 31, 2015 Twelve Months Ended December 31, (In Thousands, Except Per Share Data) 2016 2015 2014 Net interest income $ 401 $ 35,837 $ 37,736 $ 37,634 Non-interest income 21 7,899 8,576 8,184 Net income (22 ) 12,073 8,640 14,019 Pro forma earnings per share: Basic $ 3.61 $ 2.57 $ 4.15 Diluted $ 3.61 $ 2.57 $ 4.15 |
SUMMARY OF SIGNIFICANT ACCOUN49
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016USD ($)Security$ / shares | Sep. 30, 2016USD ($)$ / shares | Jun. 30, 2016USD ($)$ / shares | Mar. 31, 2016USD ($)$ / shares | Dec. 31, 2015USD ($)$ / shares | Sep. 30, 2015USD ($)$ / shares | Jun. 30, 2015USD ($)$ / shares | Mar. 31, 2015USD ($)$ / shares | Dec. 31, 2016USD ($)BranchesSegmentSecurity$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | |
Business and Organization [Abstract] | |||||||||||
Number of full service banking offices | Branches | 25 | ||||||||||
Operating Segments [Abstract] | |||||||||||
Number of operating segments | Segment | 1 | ||||||||||
Cash and Cash Equivalents [Abstract] | |||||||||||
Interest earning deposits maturity, Maximum for inclusion as cash equivalents | 90 days | ||||||||||
Investment Securities [Abstract] | |||||||||||
Number of classifications of investment securities | Security | 3 | 3 | |||||||||
Held-to-maturity securities | $ | $ 0 | $ 0 | $ 0 | $ 0 | |||||||
Trading securities | $ | 0 | 0 | $ 0 | 0 | |||||||
Number of years significantly below cost to recognize an impairment | 1 year | ||||||||||
Allowance for Loan Losses [Abstract] | |||||||||||
Number of days past for loan to be considered impaired, Maximum | 90 days | ||||||||||
Goodwill [Abstract] | |||||||||||
Goodwill impairment loss | $ | $ 0 | 0 | $ 0 | ||||||||
Bank Owned Life Insurance [Abstract] | |||||||||||
Benefit in excess of the cash surrender value | 50.00% | ||||||||||
Basic earnings per share computation [Abstract] | |||||||||||
Net income applicable to common stock | $ | $ 3,171 | $ 3,153 | $ 3,031 | $ 3,283 | $ 2,460 | $ 2,857 | $ 3,189 | $ 3,120 | $ 12,638 | $ 11,626 | $ 13,385 |
Weighted average common shares outstanding (in shares) | shares | 3,341,933 | 3,063,906 | 3,070,922 | ||||||||
Earnings per share - basic (in dollars per share) | $ / shares | $ 0.95 | $ 0.94 | $ 0.91 | $ 0.98 | $ 0.79 | $ 0.94 | $ 1.04 | $ 1.02 | $ 3.78 | $ 3.79 | $ 4.36 |
Diluted earnings per share computation [Abstract] | |||||||||||
Net income applicable to common stock | $ | $ 3,171 | $ 3,153 | $ 3,031 | $ 3,283 | $ 2,460 | $ 2,857 | $ 3,189 | $ 3,120 | $ 12,638 | $ 11,626 | $ 13,385 |
Weighted average common shares outstanding for basic earnings per share (in shares) | shares | 3,341,933 | 3,063,906 | 3,070,922 | ||||||||
Add: Dilutive effects of restricted stock (in shares) | shares | 1,556 | 1,360 | 1,295 | ||||||||
Weighted average common shares outstanding for dilutive earnings per share (in shares) | shares | 3,343,489 | 3,065,266 | 3,072,217 | ||||||||
Earnings per share - dilutive (in dollars per share) | $ / shares | $ 0.95 | $ 0.94 | $ 0.91 | $ 0.98 | $ 0.79 | $ 0.94 | $ 1.04 | $ 1.02 | $ 3.78 | $ 3.79 | $ 4.36 |
Minimum [Member] | |||||||||||
Allowance for Loan Losses [Abstract] | |||||||||||
Number of days past for loan to be considered impaired, Maximum | 90 days | ||||||||||
Furniture, Fixtures and Equipment [Member] | Minimum [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Useful life | 3 years | ||||||||||
Furniture, Fixtures and Equipment [Member] | Maximum [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Useful life | 15 years | ||||||||||
Building Premises [Member] | Minimum [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Useful life | 5 years | ||||||||||
Building Premises [Member] | Maximum [Member] | |||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||
Useful life | 40 years | ||||||||||
Core Deposits [Member] | |||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||
Useful Life | 10 years | ||||||||||
Noncompete Agreements [Member] | |||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||
Useful Life | 4 years | ||||||||||
Restricted Stock [Member] | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Antidilutive restricted stock excluded from net income per share calculations (in shares) | shares | 3,087 | 2,105 | 2,248 | ||||||||
Restricted Stock [Member] | Minimum [Member] | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Antidilutive stock share price range (in dollars per share) | $ / shares | $ 53.15 | $ 53.15 | $ 50.50 | ||||||||
Restricted Stock [Member] | Maximum [Member] | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Antidilutive stock share price range (in dollars per share) | $ / shares | $ 46.69 | $ 50.15 | $ 37.10 |
RESTRICTIONS ON CASH AND DUE 50
RESTRICTIONS ON CASH AND DUE FROM BANKS (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
RESTRICTIONS ON CASH AND DUE FROM BANKS [Abstract] | ||
Cash reserves at the Federal Reserve Bank | $ 2,297 | $ 1,646 |
Cash FDIC insured amount, maximum | $ 250 |
INVESTMENT SECURITIES (Details)
INVESTMENT SECURITIES (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)Security | Dec. 31, 2015USD ($)Security | Dec. 31, 2014USD ($)Security | |
Available for Sale Securities Amortized Cost, Gross Unrealized Gains or Losses and Fair Value [Abstract] | |||
Amortized Cost | $ 312,039 | $ 356,399 | |
Gross Unrealized Gains | 3,087 | 4,139 | |
Gross Unrealized Losses | (1,109) | (801) | |
Fair Value | $ 314,017 | 359,737 | |
Number of securities owned with fair value less than cost | Security | 88 | ||
Available-For-Sale Securities, Fair Value and Gross Unrealized Losses [Abstract] | |||
Less than Twelve Months, Fair Value | $ 106,062 | 156,454 | |
Twelve Months or Greater, Fair Value | 1,520 | 5,279 | |
Total, Fair Value | 107,582 | 161,733 | |
Less than Twelve Months, Gross Unrealized Losses | (1,071) | (748) | |
Twelve Months or Greater, Gross Unrealized Losses | (38) | (53) | |
Total, Gross Unrealized Losses | (1,109) | (801) | |
Proceeds from sale of securities available-for-sale | 22,372 | 30,464 | $ 28,989 |
Realized investment gains (losses) [Abstract] | |||
Gross gains | 312 | 440 | 647 |
Gross losses | (57) | (11) | (31) |
Net gains | 255 | 429 | 616 |
Investment securities pledged as collateral | 206,322 | 203,769 | |
Available-for-Sale Debt Securities, Amortized Cost [Abstract] | |||
Due in one year or less | 44,331 | ||
Due after one year through five years | 155,199 | ||
Due after five years through ten years | 38,363 | ||
Due after ten years | 72,325 | ||
Total | 310,218 | ||
Available-for-Sale Debt Securities, Fair Value [Abstract] | |||
Due in one year or less | 44,484 | ||
Due after one year through five years | 156,177 | ||
Due after five years through ten years | 38,305 | ||
Due after ten years | 72,152 | ||
Total | $ 311,118 | ||
Minimum [Member] | |||
Available-For-Sale Securities, Fair Value and Gross Unrealized Losses [Abstract] | |||
Duration securities impaired | 1 year | ||
U.S. Agency Securities [Member] | |||
Available for Sale Securities Amortized Cost, Gross Unrealized Gains or Losses and Fair Value [Abstract] | |||
Amortized Cost | $ 170,276 | 199,749 | |
Gross Unrealized Gains | 407 | 369 | |
Gross Unrealized Losses | (269) | (527) | |
Fair Value | 170,414 | 199,591 | |
Available-For-Sale Securities, Fair Value and Gross Unrealized Losses [Abstract] | |||
Less than Twelve Months, Fair Value | 50,947 | 123,591 | |
Twelve Months or Greater, Fair Value | 0 | 0 | |
Total, Fair Value | 50,947 | 123,591 | |
Less than Twelve Months, Gross Unrealized Losses | (269) | (527) | |
Twelve Months or Greater, Gross Unrealized Losses | 0 | 0 | |
Total, Gross Unrealized Losses | (269) | (527) | |
Realized investment gains (losses) [Abstract] | |||
Gross gains | 72 | $ 196 | $ 177 |
Gross losses | $ 22 | ||
Available-for-sale securities sold at a gross gain | Security | 4 | 5 | 8 |
Available-for-sale securities sold at a gross loss | Security | 4 | ||
U.S. Treasuries [Member] | |||
Available for Sale Securities Amortized Cost, Gross Unrealized Gains or Losses and Fair Value [Abstract] | |||
Amortized Cost | $ 2,999 | $ 10,103 | |
Gross Unrealized Gains | 1 | 0 | |
Gross Unrealized Losses | 0 | (21) | |
Fair Value | 3,000 | 10,082 | |
Available-For-Sale Securities, Fair Value and Gross Unrealized Losses [Abstract] | |||
Less than Twelve Months, Fair Value | 10,082 | ||
Twelve Months or Greater, Fair Value | 0 | ||
Total, Fair Value | 10,082 | ||
Less than Twelve Months, Gross Unrealized Losses | (21) | ||
Twelve Months or Greater, Gross Unrealized Losses | 0 | ||
Total, Gross Unrealized Losses | (21) | ||
Realized investment gains (losses) [Abstract] | |||
Gross gains | $ 27 | ||
Gross losses | $ 11 | $ 31 | |
Available-for-sale securities sold at a gross gain | Security | 2 | 1 | |
Available-for-sale securities sold at a gross loss | Security | 2 | ||
Obligations of State and Political Subdivisions [Member] | |||
Available for Sale Securities Amortized Cost, Gross Unrealized Gains or Losses and Fair Value [Abstract] | |||
Amortized Cost | $ 95,956 | $ 99,856 | |
Gross Unrealized Gains | 1,463 | 3,080 | |
Gross Unrealized Losses | (493) | (73) | |
Fair Value | 96,926 | 102,863 | |
Available-For-Sale Securities, Fair Value and Gross Unrealized Losses [Abstract] | |||
Less than Twelve Months, Fair Value | 28,398 | 7,023 | |
Twelve Months or Greater, Fair Value | 767 | 2,914 | |
Total, Fair Value | 29,165 | 9,937 | |
Less than Twelve Months, Gross Unrealized Losses | (472) | (57) | |
Twelve Months or Greater, Gross Unrealized Losses | (21) | (16) | |
Total, Gross Unrealized Losses | (493) | (73) | |
Realized investment gains (losses) [Abstract] | |||
Gross gains | $ 80 | $ 99 | $ 172 |
Available-for-sale securities sold at a gross gain | Security | 4 | 7 | 1 |
Corporate Obligations [Member] | |||
Available for Sale Securities Amortized Cost, Gross Unrealized Gains or Losses and Fair Value [Abstract] | |||
Amortized Cost | $ 3,000 | $ 14,583 | |
Gross Unrealized Gains | 50 | 68 | |
Gross Unrealized Losses | 0 | (86) | |
Fair Value | 3,050 | 14,565 | |
Available-For-Sale Securities, Fair Value and Gross Unrealized Losses [Abstract] | |||
Less than Twelve Months, Fair Value | 5,822 | ||
Twelve Months or Greater, Fair Value | 2,138 | ||
Total, Fair Value | 7,960 | ||
Less than Twelve Months, Gross Unrealized Losses | (61) | ||
Twelve Months or Greater, Gross Unrealized Losses | (25) | ||
Total, Gross Unrealized Losses | (86) | ||
Realized investment gains (losses) [Abstract] | |||
Gross losses | $ 35 | ||
Available-for-sale securities sold at a gross loss | Security | 6 | ||
Mortgage-backed Securities in Government Sponsored Entities [Member] | |||
Available for Sale Securities Amortized Cost, Gross Unrealized Gains or Losses and Fair Value [Abstract] | |||
Amortized Cost | $ 37,987 | 30,107 | |
Gross Unrealized Gains | 88 | 186 | |
Gross Unrealized Losses | (347) | (89) | |
Fair Value | 37,728 | 30,204 | |
Available-For-Sale Securities, Fair Value and Gross Unrealized Losses [Abstract] | |||
Less than Twelve Months, Fair Value | 26,717 | 9,830 | |
Twelve Months or Greater, Fair Value | 753 | 227 | |
Total, Fair Value | 27,470 | 10,057 | |
Less than Twelve Months, Gross Unrealized Losses | (330) | (77) | |
Twelve Months or Greater, Gross Unrealized Losses | (17) | (12) | |
Total, Gross Unrealized Losses | (347) | (89) | |
Realized investment gains (losses) [Abstract] | |||
Gross gains | $ 69 | $ 197 | |
Available-for-sale securities sold at a gross gain | Security | 5 | 7 | |
Equity Securities in Financial Institutions [Member] | |||
Available for Sale Securities Amortized Cost, Gross Unrealized Gains or Losses and Fair Value [Abstract] | |||
Amortized Cost | 1,821 | $ 2,001 | |
Gross Unrealized Gains | 1,078 | 436 | |
Gross Unrealized Losses | 0 | (5) | |
Fair Value | 2,899 | 2,432 | |
Available-For-Sale Securities, Fair Value and Gross Unrealized Losses [Abstract] | |||
Less than Twelve Months, Fair Value | 106 | ||
Twelve Months or Greater, Fair Value | 0 | ||
Total, Fair Value | 106 | ||
Less than Twelve Months, Gross Unrealized Losses | (5) | ||
Twelve Months or Greater, Gross Unrealized Losses | 0 | ||
Total, Gross Unrealized Losses | (5) | ||
Realized investment gains (losses) [Abstract] | |||
Gross gains | $ 133 | $ 76 | $ 101 |
Available-for-sale securities sold at a gross gain | Security | 3 | 1 | 1 |
LOANS AND RELATED ALLOWANCE F52
LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 11, 2015 | Dec. 31, 2014 | |
Segments of loan portfolio and allowance for loan losses [Abstract] | |||||||||||||||
Total financing receivables | $ 799,611 | $ 695,031 | |||||||||||||
Individually evaluated for impairment | 17,693 | 12,284 | |||||||||||||
Loans acquired with deteriorated credit quality | 3,367 | 3,818 | |||||||||||||
Collectively evaluated for impairment | 778,551 | 678,929 | |||||||||||||
Less: Allowance for loan losses | 8,886 | 7,106 | |||||||||||||
Allowance for loan losses related to individually evaluated for impairment | 487 | 355 | |||||||||||||
Allowance for loan losses related to loans acquired with deteriorated credit quality | 0 | 0 | |||||||||||||
Allowance for loan losses related to collectively evaluated for impairment | 8,399 | 6,751 | |||||||||||||
Net loans | 790,725 | 687,925 | |||||||||||||
Net loans, individually evaluated for impairment | 17,206 | 11,929 | |||||||||||||
Net loans, loans acquired with deteriorated credit quality | 3,367 | 3,818 | |||||||||||||
Net loans, collectively evaluated for impairment | 770,152 | 672,178 | |||||||||||||
Real estate loans serviced for Freddie Mac and Fannie Mae | 135,404 | 133,210 | |||||||||||||
Real estate loans sold to Freddie Mac and Fannie Mae without recourse | $ 102,444 | $ 92,773 | |||||||||||||
Portfolio balance under MPF | 32,960 | 40,437 | |||||||||||||
First-loss position for MPF maintained by FHLB | 120 | ||||||||||||||
Credit enhancement for MPF by FHLB | $ 985 | ||||||||||||||
Net unamortized loan fees and costs | 732 | 1,170 | |||||||||||||
Number of days past for loan to be considered impaired, Minimum | 90 days | ||||||||||||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||||||||||||
Balance at beginning of period | $ 7,106 | $ 6,815 | $ 7,106 | 6,815 | $ 7,098 | ||||||||||
Charge-offs | (340) | (238) | (910) | ||||||||||||
Recoveries | 600 | 49 | 42 | ||||||||||||
Provision | $ 750 | $ 500 | $ 135 | 135 | $ 120 | $ 120 | $ 120 | 120 | 1,520 | 480 | 585 | ||||
Balance at end of period | 8,886 | 7,106 | $ 8,886 | 7,106 | 6,815 | ||||||||||
Individually evaluated for impairment | 487 | 355 | $ 98 | ||||||||||||
Collectively evaluated for impairment | 8,399 | 6,751 | 6,717 | ||||||||||||
Minimum [Member] | |||||||||||||||
Segments of loan portfolio and allowance for loan losses [Abstract] | |||||||||||||||
Number of days past for loan to be considered impaired, Minimum | 90 days | ||||||||||||||
First Mortgage [Member] | Minimum [Member] | |||||||||||||||
Segments of loan portfolio and allowance for loan losses [Abstract] | |||||||||||||||
Period of mortgage on real estate | 15 years | ||||||||||||||
First Mortgage [Member] | Maximum [Member] | |||||||||||||||
Segments of loan portfolio and allowance for loan losses [Abstract] | |||||||||||||||
Period of mortgage on real estate | 30 years | ||||||||||||||
Second Mortgage [Member] | Maximum [Member] | |||||||||||||||
Segments of loan portfolio and allowance for loan losses [Abstract] | |||||||||||||||
Period of mortgage on real estate | 15 years | ||||||||||||||
Commercial [Member] | |||||||||||||||
Segments of loan portfolio and allowance for loan losses [Abstract] | |||||||||||||||
Total financing receivables | 252,577 | 237,542 | |||||||||||||
Individually evaluated for impairment | 5,742 | 6,068 | |||||||||||||
Loans acquired with deteriorated credit quality | 1,969 | 2,170 | |||||||||||||
Collectively evaluated for impairment | 244,866 | 229,304 | |||||||||||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||||||||||||
Balance at beginning of period | 3,376 | 3,419 | $ 3,376 | 3,419 | 3,983 | ||||||||||
Charge-offs | (100) | (84) | (516) | ||||||||||||
Recoveries | 479 | 14 | 15 | ||||||||||||
Provision | (166) | 27 | (63) | ||||||||||||
Balance at end of period | 3,589 | 3,376 | 3,589 | 3,376 | 3,419 | ||||||||||
Individually evaluated for impairment | 45 | 62 | 72 | ||||||||||||
Collectively evaluated for impairment | 3,544 | 3,314 | 3,347 | ||||||||||||
Agricultural [Member] | |||||||||||||||
Segments of loan portfolio and allowance for loan losses [Abstract] | |||||||||||||||
Total financing receivables | 123,624 | 57,822 | |||||||||||||
Individually evaluated for impairment | 3,346 | 167 | |||||||||||||
Loans acquired with deteriorated credit quality | 738 | 738 | |||||||||||||
Collectively evaluated for impairment | 119,540 | 56,917 | |||||||||||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||||||||||||
Balance at beginning of period | 409 | 451 | 409 | 451 | 575 | ||||||||||
Charge-offs | 0 | ||||||||||||||
Recoveries | 0 | ||||||||||||||
Provision | 1,085 | (42) | (124) | ||||||||||||
Balance at end of period | 1,494 | 409 | 1,494 | 409 | 451 | ||||||||||
Individually evaluated for impairment | 54 | 0 | |||||||||||||
Collectively evaluated for impairment | 1,440 | 409 | 451 | ||||||||||||
Residential Real Estate Loans [Member] | |||||||||||||||
Segments of loan portfolio and allowance for loan losses [Abstract] | |||||||||||||||
Total financing receivables | 207,423 | 203,407 | |||||||||||||
Individually evaluated for impairment | 957 | 304 | |||||||||||||
Loans acquired with deteriorated credit quality | 35 | 35 | |||||||||||||
Collectively evaluated for impairment | 206,431 | 203,068 | |||||||||||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||||||||||||
Balance at beginning of period | 905 | 878 | 905 | 878 | 946 | ||||||||||
Charge-offs | (85) | (66) | (97) | ||||||||||||
Recoveries | 0 | 0 | 0 | ||||||||||||
Provision | 244 | 93 | 29 | ||||||||||||
Balance at end of period | 1,064 | 905 | 1,064 | 905 | 878 | ||||||||||
Individually evaluated for impairment | 32 | 37 | 25 | ||||||||||||
Collectively evaluated for impairment | 1,032 | 868 | 853 | ||||||||||||
Construction [Member] | |||||||||||||||
Segments of loan portfolio and allowance for loan losses [Abstract] | |||||||||||||||
Total financing receivables | 25,441 | 15,011 | |||||||||||||
Individually evaluated for impairment | 0 | 0 | |||||||||||||
Loans acquired with deteriorated credit quality | 0 | 0 | |||||||||||||
Collectively evaluated for impairment | 25,441 | 15,011 | |||||||||||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||||||||||||
Balance at beginning of period | 24 | 26 | 24 | 26 | 50 | ||||||||||
Charge-offs | 0 | 0 | 0 | ||||||||||||
Recoveries | 0 | 0 | 0 | ||||||||||||
Provision | 23 | (2) | (24) | ||||||||||||
Balance at end of period | 47 | 24 | 47 | 24 | 26 | ||||||||||
Individually evaluated for impairment | 0 | 0 | 0 | ||||||||||||
Collectively evaluated for impairment | 47 | 24 | 26 | ||||||||||||
Consumer [Member] | |||||||||||||||
Segments of loan portfolio and allowance for loan losses [Abstract] | |||||||||||||||
Total financing receivables | 11,005 | 11,543 | |||||||||||||
Individually evaluated for impairment | 0 | 0 | |||||||||||||
Loans acquired with deteriorated credit quality | 4 | 9 | |||||||||||||
Collectively evaluated for impairment | 11,001 | 11,534 | |||||||||||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||||||||||||
Balance at beginning of period | 102 | 84 | 102 | 84 | 105 | ||||||||||
Charge-offs | (100) | (47) | (47) | ||||||||||||
Recoveries | 88 | 33 | 27 | ||||||||||||
Provision | 32 | 32 | (1) | ||||||||||||
Balance at end of period | 122 | 102 | 122 | 102 | 84 | ||||||||||
Individually evaluated for impairment | 0 | 0 | 0 | ||||||||||||
Collectively evaluated for impairment | 122 | 102 | 84 | ||||||||||||
Other Commercial Loans [Member] | |||||||||||||||
Segments of loan portfolio and allowance for loan losses [Abstract] | |||||||||||||||
Total financing receivables | 58,639 | 57,549 | |||||||||||||
Individually evaluated for impairment | 5,994 | 5,640 | |||||||||||||
Loans acquired with deteriorated credit quality | 621 | 866 | |||||||||||||
Collectively evaluated for impairment | 52,024 | 51,043 | |||||||||||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||||||||||||
Balance at beginning of period | 1,183 | 1,007 | 1,183 | 1,007 | 686 | ||||||||||
Charge-offs | (55) | (41) | (250) | ||||||||||||
Recoveries | 33 | 2 | 0 | ||||||||||||
Provision | 166 | 215 | 571 | ||||||||||||
Balance at end of period | 1,327 | 1,183 | 1,327 | 1,183 | 1,007 | ||||||||||
Individually evaluated for impairment | 326 | 256 | 1 | ||||||||||||
Collectively evaluated for impairment | 1,001 | 927 | 1,006 | ||||||||||||
Other Agricultural Loans [Member] | |||||||||||||||
Segments of loan portfolio and allowance for loan losses [Abstract] | |||||||||||||||
Total financing receivables | 23,388 | 13,657 | |||||||||||||
Individually evaluated for impairment | 1,654 | 105 | |||||||||||||
Loans acquired with deteriorated credit quality | 0 | ||||||||||||||
Collectively evaluated for impairment | 21,734 | 13,552 | |||||||||||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||||||||||||
Balance at beginning of period | 122 | 217 | 122 | 217 | 256 | ||||||||||
Charge-offs | 0 | ||||||||||||||
Recoveries | 0 | ||||||||||||||
Provision | 190 | (95) | (39) | ||||||||||||
Balance at end of period | 312 | 122 | 312 | 122 | 217 | ||||||||||
Individually evaluated for impairment | 30 | ||||||||||||||
Collectively evaluated for impairment | 282 | 122 | 217 | ||||||||||||
State and Political Subdivision Loans [Member] | |||||||||||||||
Segments of loan portfolio and allowance for loan losses [Abstract] | |||||||||||||||
Total financing receivables | 97,514 | 98,500 | |||||||||||||
Individually evaluated for impairment | 0 | 0 | |||||||||||||
Loans acquired with deteriorated credit quality | 0 | 0 | |||||||||||||
Collectively evaluated for impairment | 97,514 | 98,500 | |||||||||||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||||||||||||
Balance at beginning of period | 593 | 545 | 593 | 545 | 330 | ||||||||||
Charge-offs | 0 | 0 | 0 | ||||||||||||
Recoveries | 0 | 0 | 0 | ||||||||||||
Provision | 240 | 48 | 215 | ||||||||||||
Balance at end of period | 833 | 593 | 833 | 593 | 545 | ||||||||||
Individually evaluated for impairment | 0 | 0 | 0 | ||||||||||||
Collectively evaluated for impairment | 833 | 593 | 545 | ||||||||||||
Unallocated [Member] | |||||||||||||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||||||||||||
Balance at beginning of period | 392 | 188 | 392 | 188 | 167 | ||||||||||
Charge-offs | 0 | 0 | 0 | ||||||||||||
Recoveries | 0 | 0 | 0 | ||||||||||||
Provision | (294) | 204 | 21 | ||||||||||||
Balance at end of period | 98 | 392 | 98 | 392 | 188 | ||||||||||
Individually evaluated for impairment | 0 | 0 | 0 | ||||||||||||
Collectively evaluated for impairment | 98 | 392 | 188 | ||||||||||||
First National Bank of Fredericksburg [Member] | |||||||||||||||
Components of the purchase accounting adjustments related to the purchased impaired loans in FNB Acquisition [Abstract] | |||||||||||||||
Estimated fair value | $ 3,809 | ||||||||||||||
Contractually required principal and interest at acquisition | 9,913 | ||||||||||||||
Expected cash flows | 4,474 | ||||||||||||||
Non-accretable discount | 5,439 | ||||||||||||||
Accretable discount | 389 | 637 | 637 | 665 | 637 | 665 | 665 | 389 | 637 | 665 | $ 665 | ||||
Changes in the accretable yield for purchased credit-impaired loans [Roll Forward] | |||||||||||||||
Balance at beginning of period | $ 637 | $ 665 | 637 | 665 | |||||||||||
Accretion | (349) | (28) | |||||||||||||
Reclassification of non-accretable discount | 101 | 0 | |||||||||||||
Balance at end of period | $ 389 | $ 637 | $ 389 | $ 637 | $ 665 | ||||||||||
Loans acquired with specific evidence of deterioration in credit quality [Abstract] | |||||||||||||||
Outstanding balance | 6,487 | 6,950 | $ 6,969 | ||||||||||||
Carrying amount | $ 3,367 | $ 3,818 |
LOANS AND RELATED ALLOWANCE F53
LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES IMPAIRED FINANCING RECEIVABLE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Impaired Financing Receivable [Abstract] | |||
Unpaid Principal Balance | $ 20,127 | $ 14,803 | |
Recorded Investment With No Allowance | 15,031 | 10,882 | |
Recorded Investment With Allowance | 2,662 | 1,402 | |
Total Recorded Investment | 17,693 | 12,284 | |
Related Allowance | 487 | 355 | |
Average Recorded Investment | 12,874 | 8,804 | $ 9,639 |
Interest Income Recognized | 201 | 180 | 146 |
Interest Income Recognized Cash Basis | 7 | 11 | 0 |
Real Estate Loans [Member] | Mortgages [Member] | |||
Impaired Financing Receivable [Abstract] | |||
Unpaid Principal Balance | 953 | 281 | |
Recorded Investment With No Allowance | 570 | 114 | |
Recorded Investment With Allowance | 330 | 129 | |
Total Recorded Investment | 900 | 243 | |
Related Allowance | 22 | 26 | |
Average Recorded Investment | 590 | 240 | 198 |
Interest Income Recognized | 13 | 12 | 9 |
Interest Income Recognized Cash Basis | 0 | 0 | 0 |
Real Estate Loans [Member] | Home Equity [Member] | |||
Impaired Financing Receivable [Abstract] | |||
Unpaid Principal Balance | 57 | 61 | |
Recorded Investment With No Allowance | 0 | 0 | |
Recorded Investment With Allowance | 57 | 61 | |
Total Recorded Investment | 57 | 61 | |
Related Allowance | 10 | 11 | |
Average Recorded Investment | 59 | 88 | 130 |
Interest Income Recognized | 4 | 4 | 4 |
Interest Income Recognized Cash Basis | 0 | 0 | 0 |
Real Estate Loans [Member] | Commercial [Member] | |||
Impaired Financing Receivable [Abstract] | |||
Unpaid Principal Balance | 7,958 | 8,654 | |
Recorded Investment With No Allowance | 5,697 | 5,843 | |
Recorded Investment With Allowance | 45 | 225 | |
Total Recorded Investment | 5,742 | 6,068 | |
Related Allowance | 45 | 62 | |
Average Recorded Investment | 5,959 | 5,683 | 7,270 |
Interest Income Recognized | 69 | 63 | 54 |
Interest Income Recognized Cash Basis | 1 | 5 | 0 |
Real Estate Loans [Member] | Agricultural [Member] | |||
Impaired Financing Receivable [Abstract] | |||
Unpaid Principal Balance | 3,347 | 167 | |
Recorded Investment With No Allowance | 2,000 | 167 | |
Recorded Investment With Allowance | 1,347 | 0 | |
Total Recorded Investment | 3,347 | 167 | |
Related Allowance | 54 | 0 | |
Average Recorded Investment | 361 | 56 | 0 |
Interest Income Recognized | 17 | 2 | 0 |
Interest Income Recognized Cash Basis | 0 | 0 | 0 |
Consumer [Member] | |||
Impaired Financing Receivable [Abstract] | |||
Average Recorded Investment | 0 | 0 | 10 |
Interest Income Recognized | 0 | 0 | 0 |
Interest Income Recognized Cash Basis | 0 | 0 | 0 |
Other Commercial Loans [Member] | |||
Impaired Financing Receivable [Abstract] | |||
Unpaid Principal Balance | 6,159 | 5,535 | |
Recorded Investment With No Allowance | 5,135 | 4,653 | |
Recorded Investment With Allowance | 859 | 987 | |
Total Recorded Investment | 5,994 | 5,640 | |
Related Allowance | 326 | 256 | |
Average Recorded Investment | 5,715 | 2,700 | 2,031 |
Interest Income Recognized | 87 | 98 | 79 |
Interest Income Recognized Cash Basis | 6 | 6 | 0 |
Other Agricultural Loans [Member] | |||
Impaired Financing Receivable [Abstract] | |||
Unpaid Principal Balance | 1,653 | 105 | |
Recorded Investment With No Allowance | 1,629 | 105 | |
Recorded Investment With Allowance | 24 | 0 | |
Total Recorded Investment | 1,653 | 105 | |
Related Allowance | 30 | 0 | |
Average Recorded Investment | 190 | 37 | 0 |
Interest Income Recognized | 11 | 1 | 0 |
Interest Income Recognized Cash Basis | $ 0 | $ 0 | $ 0 |
LOANS AND RELATED ALLOWANCE F54
LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES CREDIT QUALITY INDICATOR (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Financing Receivable by credit exposure [Abstract] | ||
Total | $ 218,428 | $ 214,950 |
Minimum [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Percentage of dollar volume of commercial loan portfolio to be reviewed | 55.00% | |
Amount over which all new loans to be reviewed | $ 1,000 | |
Amount over which all relationships to be reviewed | 1,000 | |
Amount which is 30 days past due to be reviewed for all aggregate loan relationships | 750 | |
Real Estate Loans [Member] | Commercial [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 252,577 | 237,542 |
Real Estate Loans [Member] | Agricultural [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 123,624 | 57,822 |
Real Estate Loans [Member] | Home Equity [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 58,693 | 62,368 |
Real Estate Loans [Member] | Mortgages [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 148,730 | 141,039 |
Real Estate Loans [Member] | Construction [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 25,441 | 15,011 |
Consumer [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 11,005 | 11,543 |
Other Commercial Loans [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 58,639 | 57,549 |
Other Agricultural Loans [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 23,388 | 13,657 |
State and Political Subdivision Loans [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 97,514 | 98,500 |
Pass [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 516,605 | 448,776 |
Pass [Member] | Real Estate Loans [Member] | Commercial [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 225,185 | 217,544 |
Pass [Member] | Real Estate Loans [Member] | Agricultural [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 110,785 | 53,695 |
Pass [Member] | Real Estate Loans [Member] | Construction [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 25,441 | 14,422 |
Pass [Member] | Other Commercial Loans [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 51,396 | 51,297 |
Pass [Member] | Other Agricultural Loans [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 20,178 | 13,318 |
Pass [Member] | State and Political Subdivision Loans [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 83,620 | 98,500 |
Special Mention [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 39,124 | 8,284 |
Special Mention [Member] | Real Estate Loans [Member] | Commercial [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 14,045 | 4,150 |
Special Mention [Member] | Real Estate Loans [Member] | Agricultural [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 8,231 | 2,865 |
Special Mention [Member] | Real Estate Loans [Member] | Construction [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 0 | 589 |
Special Mention [Member] | Other Commercial Loans [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 2,049 | 446 |
Special Mention [Member] | Other Agricultural Loans [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 1,733 | 234 |
Special Mention [Member] | State and Political Subdivision Loans [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 13,066 | 0 |
Substandard [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 25,365 | 22,852 |
Substandard [Member] | Real Estate Loans [Member] | Commercial [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 13,347 | 15,816 |
Substandard [Member] | Real Estate Loans [Member] | Agricultural [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 4,608 | 1,262 |
Substandard [Member] | Real Estate Loans [Member] | Construction [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 0 | 0 |
Substandard [Member] | Other Commercial Loans [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 5,105 | 5,669 |
Substandard [Member] | Other Agricultural Loans [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 1,477 | 105 |
Substandard [Member] | State and Political Subdivision Loans [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 828 | 0 |
Doubtful [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 89 | 169 |
Doubtful [Member] | Real Estate Loans [Member] | Commercial [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 0 | 32 |
Doubtful [Member] | Real Estate Loans [Member] | Agricultural [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 0 | 0 |
Doubtful [Member] | Real Estate Loans [Member] | Construction [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 0 | 0 |
Doubtful [Member] | Other Commercial Loans [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 89 | 137 |
Doubtful [Member] | Other Agricultural Loans [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 0 | 0 |
Doubtful [Member] | State and Political Subdivision Loans [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 0 | 0 |
Loss [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 0 | 0 |
Loss [Member] | Real Estate Loans [Member] | Commercial [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 0 | 0 |
Loss [Member] | Real Estate Loans [Member] | Agricultural [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 0 | 0 |
Loss [Member] | Real Estate Loans [Member] | Construction [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 0 | 0 |
Loss [Member] | Other Commercial Loans [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 0 | 0 |
Loss [Member] | Other Agricultural Loans [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 0 | 0 |
Loss [Member] | State and Political Subdivision Loans [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 0 | 0 |
Internally Assigned Grade [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 581,183 | 480,081 |
Performing [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 216,377 | 213,440 |
Performing [Member] | Real Estate Loans [Member] | Home Equity [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 58,438 | 62,236 |
Performing [Member] | Real Estate Loans [Member] | Mortgages [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 147,047 | 139,734 |
Performing [Member] | Consumer [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 10,892 | 11,470 |
Nonperforming [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 2,012 | 1,466 |
Nonperforming [Member] | Real Estate Loans [Member] | Home Equity [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 255 | 132 |
Nonperforming [Member] | Real Estate Loans [Member] | Mortgages [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 1,648 | 1,270 |
Nonperforming [Member] | Consumer [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 109 | 64 |
PCI [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 39 | 44 |
PCI [Member] | Real Estate Loans [Member] | Home Equity [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 0 | 0 |
PCI [Member] | Real Estate Loans [Member] | Mortgages [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | 35 | 35 |
PCI [Member] | Consumer [Member] | ||
Financing Receivable by credit exposure [Abstract] | ||
Total | $ 4 | $ 9 |
LOANS AND RELATED ALLOWANCE F55
LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES PAST DUE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Recorded investment of past due [Abstract] | |||
Total Past Due | $ 14,133 | $ 9,288 | |
Current | 782,111 | 681,925 | |
PCI | 3,367 | 3,818 | |
Total financing receivables | 799,611 | 695,031 | |
90 Days and Accruing | 405 | 623 | |
Financing receivables on nonaccrual status [Abstract] | |||
Total Past Due And Non-accrual | 10,729 | 5,608 | |
Current And Non-accrual | 725 | 923 | |
PCI Loans considered non accrual | 0 | 0 | |
Financing receivable nonaccrual status | 11,454 | 6,531 | |
Foregone interest income | 603 | 463 | $ 527 |
Financing receivables on accrual status [Abstract] | |||
Total Past Due And Still Accruing | 3,404 | 3,680 | |
Current And Still Accruing | 781,386 | 681,002 | |
PCI Loans still accruing | 3,367 | 3,818 | |
Total Financing Receivables And Still Accruing | $ 788,157 | 688,500 | |
Minimum [Member] | |||
Financing receivables on nonaccrual status [Abstract] | |||
Period of past due after which loans considered as non accrual | 90 days | ||
30 to 59 Days Past Due [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | $ 3,024 | 2,509 | |
Financing receivables on nonaccrual status [Abstract] | |||
Total Past Due And Non-accrual | 172 | 54 | |
Financing receivables on accrual status [Abstract] | |||
Total Past Due And Still Accruing | 2,852 | 2,455 | |
60 to 89 Days Past Due [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 252 | 773 | |
Financing receivables on nonaccrual status [Abstract] | |||
Total Past Due And Non-accrual | 105 | 171 | |
Financing receivables on accrual status [Abstract] | |||
Total Past Due And Still Accruing | 147 | 602 | |
90 Days Or Greater [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 10,857 | 6,006 | |
Financing receivables on nonaccrual status [Abstract] | |||
Total Past Due And Non-accrual | 10,452 | 5,383 | |
Financing receivables on accrual status [Abstract] | |||
Total Past Due And Still Accruing | 405 | 623 | |
Commercial [Member] | |||
Recorded investment of past due [Abstract] | |||
Total financing receivables | 252,577 | 237,542 | |
Agricultural [Member] | |||
Recorded investment of past due [Abstract] | |||
Total financing receivables | 123,624 | 57,822 | |
Consumer [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 238 | 325 | |
Current | 10,763 | 11,209 | |
PCI | 4 | 9 | |
Total financing receivables | 11,005 | 11,543 | |
90 Days and Accruing | 67 | 9 | |
Financing receivables on nonaccrual status [Abstract] | |||
Financing receivable nonaccrual status | 42 | 55 | |
Consumer [Member] | 30 to 59 Days Past Due [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 115 | 239 | |
Consumer [Member] | 60 to 89 Days Past Due [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 40 | 37 | |
Consumer [Member] | 90 Days Or Greater [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 83 | 49 | |
Other Commercial Loans [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 4,134 | 1,367 | |
Current | 53,884 | 55,316 | |
PCI | 621 | 866 | |
Total financing receivables | 58,639 | 57,549 | |
90 Days and Accruing | 0 | 160 | |
Financing receivables on nonaccrual status [Abstract] | |||
Financing receivable nonaccrual status | 4,057 | 1,012 | |
Other Commercial Loans [Member] | 30 to 59 Days Past Due [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 95 | 143 | |
Other Commercial Loans [Member] | 60 to 89 Days Past Due [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 35 | 214 | |
Other Commercial Loans [Member] | 90 Days Or Greater [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 4,004 | 1,010 | |
Other Agricultural Loans [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 82 | 9 | |
Current | 23,306 | 13,648 | |
PCI | 0 | 0 | |
Total financing receivables | 23,388 | 13,657 | |
90 Days and Accruing | 5 | 0 | |
Financing receivables on nonaccrual status [Abstract] | |||
Financing receivable nonaccrual status | 0 | 0 | |
Other Agricultural Loans [Member] | 30 to 59 Days Past Due [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 43 | 9 | |
Other Agricultural Loans [Member] | 60 to 89 Days Past Due [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 34 | 0 | |
Other Agricultural Loans [Member] | 90 Days Or Greater [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 5 | 0 | |
State and Political Subdivision Loans [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 0 | 0 | |
Current | 97,514 | 98,500 | |
PCI | 0 | 0 | |
Total financing receivables | 97,514 | 98,500 | |
90 Days and Accruing | 0 | 0 | |
Financing receivables on nonaccrual status [Abstract] | |||
Financing receivable nonaccrual status | 0 | 0 | |
State and Political Subdivision Loans [Member] | 30 to 59 Days Past Due [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 0 | 0 | |
State and Political Subdivision Loans [Member] | 60 to 89 Days Past Due [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 0 | 0 | |
State and Political Subdivision Loans [Member] | 90 Days Or Greater [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 0 | 0 | |
Real Estate Loans [Member] | Mortgages [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 1,775 | 1,457 | |
Current | 146,920 | 139,547 | |
PCI | 35 | 35 | |
Total financing receivables | 148,730 | 141,039 | |
90 Days and Accruing | 173 | 321 | |
Financing receivables on nonaccrual status [Abstract] | |||
Financing receivable nonaccrual status | 1,475 | 949 | |
Real Estate Loans [Member] | Mortgages [Member] | 30 to 59 Days Past Due [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 630 | 487 | |
Real Estate Loans [Member] | Mortgages [Member] | 60 to 89 Days Past Due [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 36 | 283 | |
Real Estate Loans [Member] | Mortgages [Member] | 90 Days Or Greater [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 1,109 | 687 | |
Real Estate Loans [Member] | Home Equity [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 642 | 766 | |
Current | 58,051 | 61,602 | |
PCI | 0 | 0 | |
Total financing receivables | 58,693 | 62,368 | |
90 Days and Accruing | 160 | 73 | |
Financing receivables on nonaccrual status [Abstract] | |||
Financing receivable nonaccrual status | 95 | 59 | |
Real Estate Loans [Member] | Home Equity [Member] | 30 to 59 Days Past Due [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 384 | 630 | |
Real Estate Loans [Member] | Home Equity [Member] | 60 to 89 Days Past Due [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 49 | 15 | |
Real Estate Loans [Member] | Home Equity [Member] | 90 Days Or Greater [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 209 | 121 | |
Real Estate Loans [Member] | Commercial [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 6,117 | 5,020 | |
Current | 244,491 | 230,352 | |
PCI | 1,969 | 2,170 | |
Total financing receivables | 252,577 | 237,542 | |
90 Days and Accruing | 0 | 60 | |
Financing receivables on nonaccrual status [Abstract] | |||
Financing receivable nonaccrual status | 4,445 | 4,422 | |
Real Estate Loans [Member] | Commercial [Member] | 30 to 59 Days Past Due [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 1,757 | 824 | |
Real Estate Loans [Member] | Commercial [Member] | 60 to 89 Days Past Due [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 58 | 57 | |
Real Estate Loans [Member] | Commercial [Member] | 90 Days Or Greater [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 4,302 | 4,139 | |
Real Estate Loans [Member] | Agricultural [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 1,145 | 344 | |
Current | 121,741 | 56,740 | |
PCI | 738 | 738 | |
Total financing receivables | 123,624 | 57,822 | |
90 Days and Accruing | 0 | 0 | |
Financing receivables on nonaccrual status [Abstract] | |||
Financing receivable nonaccrual status | 1,340 | 34 | |
Real Estate Loans [Member] | Agricultural [Member] | 30 to 59 Days Past Due [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 0 | 177 | |
Real Estate Loans [Member] | Agricultural [Member] | 60 to 89 Days Past Due [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 0 | 167 | |
Real Estate Loans [Member] | Agricultural [Member] | 90 Days Or Greater [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 1,145 | 0 | |
Real Estate Loans [Member] | Construction [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 0 | 0 | |
Current | 25,441 | 15,011 | |
PCI | 0 | 0 | |
Total financing receivables | 25,441 | 15,011 | |
90 Days and Accruing | 0 | 0 | |
Financing receivables on nonaccrual status [Abstract] | |||
Financing receivable nonaccrual status | 0 | 0 | |
Real Estate Loans [Member] | Construction [Member] | 30 to 59 Days Past Due [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 0 | 0 | |
Real Estate Loans [Member] | Construction [Member] | 60 to 89 Days Past Due [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | 0 | 0 | |
Real Estate Loans [Member] | Construction [Member] | 90 Days Or Greater [Member] | |||
Recorded investment of past due [Abstract] | |||
Total Past Due | $ 0 | $ 0 |
LOANS AND RELATED ALLOWANCE F56
LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES TDR (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)Contract | Dec. 31, 2015USD ($)Contract | Dec. 31, 2014USD ($)Contract | |
LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES [Abstract] | |||
Reserves of allowance for loan losses | $ 29 | $ 37 | $ 26 |
Recidivism receivables [Abstract] | |||
Number of contract, subsequently defaults | Contract | 0 | 0 | 1 |
Total recidivism, Recorded investment | $ 0 | $ 0 | $ 50 |
Foreclosed assets held for sale [Abstract] | |||
Foreclosed assets held for sale | $ 1,036 | $ 1,354 | |
Interest Modification [Member] | |||
Financing receivable modifications [Abstract] | |||
Number of contracts | Contract | 0 | 1 | 0 |
Pre-modification Outstanding Recorded Investment | $ 0 | $ 71 | $ 0 |
Post-Modification Outstanding Recorded Investment | $ 0 | $ 71 | $ 0 |
Term Modification [Member] | |||
Financing receivable modifications [Abstract] | |||
Number of contracts | Contract | 19 | 1 | 2 |
Pre-modification Outstanding Recorded Investment | $ 7,778 | $ 19 | $ 153 |
Post-Modification Outstanding Recorded Investment | $ 7,778 | $ 19 | $ 153 |
Real Estate Loans [Member] | Mortgages [Member] | Interest Modification [Member] | |||
Financing receivable modifications [Abstract] | |||
Number of contracts | Contract | 1 | ||
Pre-modification Outstanding Recorded Investment | $ 71 | ||
Post-Modification Outstanding Recorded Investment | $ 71 | ||
Real Estate Loans [Member] | Mortgages [Member] | Term Modification [Member] | |||
Financing receivable modifications [Abstract] | |||
Number of contracts | Contract | 1 | ||
Pre-modification Outstanding Recorded Investment | $ 19 | ||
Post-Modification Outstanding Recorded Investment | $ 19 | ||
Real Estate Loans [Member] | Commercial [Member] | |||
Recidivism receivables [Abstract] | |||
Number of contract, subsequently defaults | Contract | 0 | 0 | 1 |
Total recidivism, Recorded investment | $ 0 | $ 0 | $ 50 |
Real Estate Loans [Member] | Commercial [Member] | Interest Modification [Member] | |||
Financing receivable modifications [Abstract] | |||
Number of contracts | Contract | 0 | 0 | |
Pre-modification Outstanding Recorded Investment | $ 0 | $ 0 | |
Post-Modification Outstanding Recorded Investment | $ 0 | $ 0 | |
Real Estate Loans [Member] | Commercial [Member] | Term Modification [Member] | |||
Financing receivable modifications [Abstract] | |||
Number of contracts | Contract | 4 | 2 | |
Pre-modification Outstanding Recorded Investment | $ 1,188 | $ 153 | |
Post-Modification Outstanding Recorded Investment | $ 1,188 | $ 153 | |
Real Estate Loans [Member] | Agricultural [Member] | Interest Modification [Member] | |||
Financing receivable modifications [Abstract] | |||
Number of contracts | Contract | 0 | ||
Pre-modification Outstanding Recorded Investment | $ 0 | ||
Post-Modification Outstanding Recorded Investment | $ 0 | ||
Real Estate Loans [Member] | Agricultural [Member] | Term Modification [Member] | |||
Financing receivable modifications [Abstract] | |||
Number of contracts | Contract | 5 | ||
Pre-modification Outstanding Recorded Investment | $ 1,956 | ||
Post-Modification Outstanding Recorded Investment | $ 1,956 | ||
Other Commercial Loans [Member] | Interest Modification [Member] | |||
Financing receivable modifications [Abstract] | |||
Number of contracts | Contract | 0 | ||
Pre-modification Outstanding Recorded Investment | $ 0 | ||
Post-Modification Outstanding Recorded Investment | $ 0 | ||
Other Commercial Loans [Member] | Term Modification [Member] | |||
Financing receivable modifications [Abstract] | |||
Number of contracts | Contract | 3 | ||
Pre-modification Outstanding Recorded Investment | $ 3,076 | ||
Post-Modification Outstanding Recorded Investment | $ 3,076 | ||
Other Agricultural Loans [Member] | Interest Modification [Member] | |||
Financing receivable modifications [Abstract] | |||
Number of contracts | Contract | 0 | ||
Pre-modification Outstanding Recorded Investment | $ 0 | ||
Post-Modification Outstanding Recorded Investment | $ 0 | ||
Other Agricultural Loans [Member] | Term Modification [Member] | |||
Financing receivable modifications [Abstract] | |||
Number of contracts | Contract | 7 | ||
Pre-modification Outstanding Recorded Investment | $ 1,558 | ||
Post-Modification Outstanding Recorded Investment | 1,558 | ||
Consumer Residential Mortgages [Member] | |||
Foreclosed assets held for sale [Abstract] | |||
Foreclosed assets held for sale | $ 217 | ||
Formal foreclosure proceedings on potential foreclosure assets | $ 1,239 |
PREMISES & EQUIPMENT (Details)
PREMISES & EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Premises and equipment, gross | $ 29,108 | $ 29,183 | |
Less: accumulated depreciation | 12,078 | 11,920 | |
Premises and equipment, net | 17,030 | 17,263 | |
Depreciation expense | 763 | 608 | $ 537 |
Land [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Premises and equipment, gross | 5,110 | 5,110 | |
Buildings [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Premises and equipment, gross | 17,315 | 17,349 | |
Furniture, Fixtures and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Premises and equipment, gross | 6,678 | 6,636 | |
Construction in Process [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Premises and equipment, gross | $ 5 | $ 88 |
GOODWILL AND OTHER INTANGIBLE58
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Amortizing intangible assets [Abstract] | |||
Gross carrying value | [1] | $ 3,237 | $ 3,102 |
Accumulated amortization | [1] | (1,141) | (665) |
Net carrying value | [1] | 2,096 | 2,437 |
Non-amortized intangible assets [Abstract] | |||
Goodwill | [1] | 21,089 | 21,089 |
Actual and Estimated Future Amortization Expense [Abstract] | |||
Amortization expense | 500 | ||
Estimated Amortization Expense [Abstract] | |||
2,017 | 474 | ||
2,018 | 409 | ||
2,019 | 349 | ||
2,020 | 264 | ||
2,021 | 211 | ||
Mortgage Servicing Rights [Member] | |||
Amortizing intangible assets [Abstract] | |||
Gross carrying value | [1] | 1,471 | 1,336 |
Accumulated amortization | [1] | (787) | (638) |
Net carrying value | [1] | 684 | 698 |
Actual and Estimated Future Amortization Expense [Abstract] | |||
Amortization expense | 173 | ||
Estimated Amortization Expense [Abstract] | |||
2,017 | 177 | ||
2,018 | 143 | ||
2,019 | 113 | ||
2,020 | 87 | ||
2,021 | 64 | ||
Core Deposit Intangibles [Member] | |||
Amortizing intangible assets [Abstract] | |||
Gross carrying value | [1] | 1,641 | 1,641 |
Accumulated amortization | [1] | (320) | (25) |
Net carrying value | [1] | 1,321 | 1,616 |
Actual and Estimated Future Amortization Expense [Abstract] | |||
Amortization expense | 295 | ||
Estimated Amortization Expense [Abstract] | |||
2,017 | 266 | ||
2,018 | 236 | ||
2,019 | 206 | ||
2,020 | 177 | ||
2,021 | 147 | ||
Covenant not to Compete [Member] | |||
Amortizing intangible assets [Abstract] | |||
Gross carrying value | [1] | 125 | 125 |
Accumulated amortization | [1] | (34) | (2) |
Net carrying value | [1] | 91 | $ 123 |
Actual and Estimated Future Amortization Expense [Abstract] | |||
Amortization expense | 32 | ||
Estimated Amortization Expense [Abstract] | |||
2,017 | 31 | ||
2,018 | 30 | ||
2,019 | 30 | ||
2,020 | 0 | ||
2,021 | $ 0 | ||
[1] | Excludes fully amortized intangible assets |
FEDERAL HOME LOAN BANK (FHLB)59
FEDERAL HOME LOAN BANK (FHLB) STOCK (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
FEDERAL HOME LOAN BANK (FHLB) STOCK [Abstract] | ||
Federal home loan bank stock | $ 4,542,000 | $ 2,800,000 |
FHLB Stock, at par value (in dollars per share) | $ 100 |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
DEPOSITS [Abstract] | ||
Non-interest-bearing deposits | $ 147,425,000 | $ 150,960,000 |
NOW accounts | 305,862,000 | 279,655,000 |
Savings deposits | 170,722,000 | 170,277,000 |
Money market deposit accounts | 116,880,000 | 105,229,000 |
Certificates of deposit | 264,614,000 | 281,910,000 |
Total deposits | 1,005,503,000 | 988,031,000 |
Certificates of deposit of $250,000 or more [Abstract] | ||
Certificates of deposit of $250,000 or more | 56,743,000 | $ 51,818,000 |
Maturities of certificates of deposit [Abstract] | ||
2,017 | 128,641,000 | |
2,018 | 47,673,000 | |
2,019 | 35,722,000 | |
2,020 | 25,036,000 | |
2,021 | 22,587,000 | |
Thereafter | 4,955,000 | |
Total certificates of deposit | $ 264,614,000 |
BORROWED FUNDS AND REPURCHASE61
BORROWED FUNDS AND REPURCHASE AGREEMENTS, Breakdown of Borrowed Funds (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Debt Instrument [Line Items] | |||
Borrowed funds | $ 79,662 | $ 41,631 | |
Highest balance at any month-end | 85,282 | 71,073 | |
Average balance | $ 47,004 | $ 36,700 | |
Weighted average interest rate paid during the year | 1.69% | 1.93% | |
Weighted average interest rate as of year end | 1.36% | 1.74% | |
Securities Sold Under Agreements to Repurchase [Member] | |||
Debt Instrument [Line Items] | |||
Borrowed funds | [1] | $ 14,307 | $ 16,008 |
Highest balance at any month-end | [1] | 16,132 | 16,008 |
Average balance | [1] | $ 15,057 | $ 5,998 |
Weighted average interest rate paid during the year | [1] | 0.49% | 0.82% |
Weighted average interest rate as of year end | [1] | 0.67% | 0.45% |
FHLB Advances [Member] | |||
Debt Instrument [Line Items] | |||
Borrowed funds | [2] | $ 41,330 | $ 1,598 |
Federal Home Loan Bank, advances, highest balance at any month-end | [2] | 45,125 | 26,996 |
Federal Home Loan Bank, advances, average balance | [2] | $ 7,917 | $ 5,218 |
Federal Home Loan Bank, advances, weighted average interest rate paid during the year | [2] | 0.63% | 0.35% |
Federal Home Loan Bank, advances, weighted average interest rate as of year-end | [2] | 0.74% | 0.43% |
Federal Funds Line [Member] | |||
Debt Instrument [Line Items] | |||
Borrowed funds | [3] | $ 0 | $ 0 |
Highest balance at any month-end | [3] | 0 | 0 |
Average balance | [3] | $ 2 | $ 0 |
Weighted average interest rate paid during the year | [3] | 0.76% | 0.00% |
Weighted average interest rate as of year end | [3] | 0.00% | 0.00% |
FRB BIC Line [Member] | |||
Debt Instrument [Line Items] | |||
Borrowed funds | [4] | $ 0 | $ 0 |
Highest balance at any month-end | [4] | 0 | 0 |
Average balance | [4] | $ 3 | $ 0 |
Weighted average interest rate paid during the year | [4] | 1.00% | 0.77% |
Weighted average interest rate as of year end | [4] | 0.00% | 0.00% |
Notes Payable [Member] | |||
Debt Instrument [Line Items] | |||
Borrowed funds | [5] | $ 7,500 | $ 7,500 |
Highest balance at any month-end | [5] | 7,500 | 7,500 |
Average balance | [5] | $ 7,500 | $ 7,500 |
Weighted average interest rate paid during the year | [5] | 3.55% | 3.14% |
Weighted average interest rate as of year end | [5] | 3.79% | 3.33% |
Term Loans [Member] | |||
Debt Instrument [Line Items] | |||
Borrowed funds | [6] | $ 16,525 | $ 16,525 |
Highest balance at any month-end | [6] | 16,525 | 20,569 |
Average balance | [6] | $ 16,525 | $ 17,984 |
Weighted average interest rate paid during the year | [6] | 2.44% | 2.25% |
Weighted average interest rate as of year end | [6] | 2.44% | 2.40% |
[1] | We utilize securities sold under agreements to repurchase to facilitate the needs of our customers and to facilitate secured short-term funding needs. Securities sold under agreements to repurchase are stated at the amount of cash received in connection with the transaction. We monitor collateral levels on a continuous basis. We may be required to provide additional collateral based on the fair value of the underlying securities. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents. The collateral pledged on the repurchase agreements by the remaining contractual maturity of the repurchase agreements in the Consolidated Balance Sheets as of December 31, 2016 and December 31, 2015 is presented in the following tables. | ||
[2] | FHLB Advances consist of an "Open RepoPlus" agreement with the FHLB of Pittsburgh. FHLB "Open RepoPlus" advances are short-term borrowings that bear interest based on the FHLB discount rate or Federal Funds rate, whichever is higher. The Company has a borrowing limit of $343,209,000, inclusive of any outstanding advances. FHLB advances are secured by a blanket security agreement that includes the Company's FHLB stock, as well as certain investment and mortgage-backed securities held in safekeeping at the FHLB and certain residential and commercial mortgage loans. | ||
[3] | The federal funds line consists of an unsecured line from a third party bank at market rates. The Company has a borrowing limit of $10,000,000, inclusive of any outstanding balances. No specific collateral is required to be pledged for these borrowings. | ||
[4] | The Federal Reserve Bank Borrower in Custody (FRB BIC) Line consists of a borrower in custody in agreement open in January 2010 with the Federal Reserve Bank of Philadelphia secured by municipal loans maintained in the Company's possession. As of December 31, 2016 and 2015, the Company has a borrowing limit of $4,360,000 and $7,949,000, respectively, inclusive of any outstanding advances. The approximate carrying value of the municipal loan collateral was $15,560,000 and $16,146,000 as of December 31, 2016 and 2015, respectively. | ||
[5] | In December 2003, the Company formed a special purpose entity ("Entity") to issue $7,500,000 of floating rate obligated mandatory redeemable trust preferred securities as part of a pooled offering. The rate was determined quarterly and floated based on the 3 month LIBOR plus 2.80. The Entity may redeem them, in whole or in part, at face value after December 17, 2008, and on a quarterly basis thereafter. The Company borrowed the proceeds of the issuance from the Entity in December 2003 in the form of a $7,500,000 note payable. Debt issue costs of $75,000 have been capitalized and fully amortized as of December 31, 2008. Under current accounting rules, the Company's minority interest in the Entity was recorded at the initial investment amount and is included in the other assets section of the balance sheet. The Entity is not consolidated as part of the Company's consolidated financial statements. | ||
[6] | (f) Term Loans consist of separate loans with the FHLB of Pittsburgh as follows (in thousands): December 31, December 31, Interest Rate Maturity 2015 2014 Fixed: 2.29% October 2, 2017 2,000 2,000 2.72% July 12, 2018 1,000 1,000 1.87% February 4, 2019 2,000 2,000 2.61% February 3, 2021 2,000 2,000 3.52% July 12, 2021 2,000 2,000 2.37% August 20, 2021 2,800 2,800 2.08% January 6, 2022 4,725 4,725 Total term loans $ 16,525 $ 16,525 |
BORROWED FUNDS AND REPURCHASE62
BORROWED FUNDS AND REPURCHASE AGREEMENTS, Collateral Pledged on the Repurchase Agreements by Contractual Maturity (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2008 | Dec. 31, 2003 | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||||
Total carrying value of collateral pledged | $ 18,177,000 | $ 20,193,000 | |||
Total liability recognized for repurchase agreements | 14,307,000 | 16,008,000 | |||
Debt Instrument [Line Items] | |||||
Borrowed funds | 79,662,000 | 41,631,000 | |||
U.S. Agency Securities [Member] | |||||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||||
Total carrying value of collateral pledged | 18,177,000 | 20,193,000 | |||
Overnight and Continuous [Member] | |||||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||||
Total carrying value of collateral pledged | 16,118,000 | 18,144,000 | |||
Overnight and Continuous [Member] | U.S. Agency Securities [Member] | |||||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||||
Total carrying value of collateral pledged | 16,118,000 | 18,144,000 | |||
Up to 30 Days [Member] | |||||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||||
Total carrying value of collateral pledged | 0 | 0 | |||
Up to 30 Days [Member] | U.S. Agency Securities [Member] | |||||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||||
Total carrying value of collateral pledged | 0 | 0 | |||
30 - 90 Days [Member] | |||||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||||
Total carrying value of collateral pledged | 0 | 0 | |||
30 - 90 Days [Member] | U.S. Agency Securities [Member] | |||||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||||
Total carrying value of collateral pledged | 0 | 0 | |||
Greater than 90 Days [Member] | |||||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||||
Total carrying value of collateral pledged | 2,059,000 | 2,049,000 | |||
Greater than 90 Days [Member] | U.S. Agency Securities [Member] | |||||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | |||||
Total carrying value of collateral pledged | 2,059,000 | 2,049,000 | |||
Securities Sold Under Agreements to Repurchase [Member] | |||||
Debt Instrument [Line Items] | |||||
Borrowed funds | [1] | 14,307,000 | 16,008,000 | ||
FHLB Advances [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing limit | 343,209,000 | ||||
Borrowed funds | [2] | 41,330,000 | 1,598,000 | ||
Federal Funds Line [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing limit | 10,000,000 | ||||
Borrowed funds | [3] | 0 | 0 | ||
FRB BIC Line [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing limit | 4,360,000 | 7,949,000 | |||
Carrying value of securities pledged as collateral | 15,560,000 | 16,146,000 | |||
Borrowed funds | [4] | 0 | 0 | ||
Notes Payable [Member] | |||||
Debt Instrument [Line Items] | |||||
Face amount of debt | $ 7,500,000 | ||||
Variable rate basis | 3 month LIBOR | ||||
Basis spread on variable rate | 2.80% | ||||
Notional amount of derivative liability | $ 7,500,000 | ||||
Unamortized debt issuance costs | $ 75,000 | ||||
Borrowed funds | [5] | $ 7,500,000 | 7,500,000 | ||
Term Loans [Member] | |||||
Debt Instrument [Line Items] | |||||
Borrowed funds | [6] | $ 16,525,000 | 16,525,000 | ||
Term Loans [Member] | October 2, 2017 [Member] | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 2.29% | ||||
Maturity date | Oct. 2, 2017 | ||||
Borrowed funds | $ 2,000,000 | 2,000,000 | |||
Term Loans [Member] | July 12, 2018 [Member] | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 2.72% | ||||
Maturity date | Jul. 12, 2018 | ||||
Borrowed funds | $ 1,000,000 | 1,000,000 | |||
Term Loans [Member] | February 4, 2019 [Member] | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 1.87% | ||||
Maturity date | Feb. 4, 2019 | ||||
Borrowed funds | $ 2,000,000 | 2,000,000 | |||
Term Loans [Member] | February 3, 2021 [Member] | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 2.61% | ||||
Maturity date | Feb. 3, 2021 | ||||
Borrowed funds | $ 2,000,000 | 2,000,000 | |||
Term Loans [Member] | July 12, 2021 [Member] | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 3.52% | ||||
Maturity date | Jul. 12, 2021 | ||||
Borrowed funds | $ 2,000,000 | 2,000,000 | |||
Term Loans [Member] | August 20, 2021 [Member] | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 2.37% | ||||
Maturity date | Aug. 20, 2021 | ||||
Borrowed funds | $ 2,800,000 | 2,800,000 | |||
Term Loans [Member] | January 6, 2022 [Member] | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 2.08% | ||||
Maturity date | Jan. 6, 2022 | ||||
Borrowed funds | $ 4,725,000 | $ 4,725,000 | |||
[1] | We utilize securities sold under agreements to repurchase to facilitate the needs of our customers and to facilitate secured short-term funding needs. Securities sold under agreements to repurchase are stated at the amount of cash received in connection with the transaction. We monitor collateral levels on a continuous basis. We may be required to provide additional collateral based on the fair value of the underlying securities. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents. The collateral pledged on the repurchase agreements by the remaining contractual maturity of the repurchase agreements in the Consolidated Balance Sheets as of December 31, 2016 and December 31, 2015 is presented in the following tables. | ||||
[2] | FHLB Advances consist of an "Open RepoPlus" agreement with the FHLB of Pittsburgh. FHLB "Open RepoPlus" advances are short-term borrowings that bear interest based on the FHLB discount rate or Federal Funds rate, whichever is higher. The Company has a borrowing limit of $343,209,000, inclusive of any outstanding advances. FHLB advances are secured by a blanket security agreement that includes the Company's FHLB stock, as well as certain investment and mortgage-backed securities held in safekeeping at the FHLB and certain residential and commercial mortgage loans. | ||||
[3] | The federal funds line consists of an unsecured line from a third party bank at market rates. The Company has a borrowing limit of $10,000,000, inclusive of any outstanding balances. No specific collateral is required to be pledged for these borrowings. | ||||
[4] | The Federal Reserve Bank Borrower in Custody (FRB BIC) Line consists of a borrower in custody in agreement open in January 2010 with the Federal Reserve Bank of Philadelphia secured by municipal loans maintained in the Company's possession. As of December 31, 2016 and 2015, the Company has a borrowing limit of $4,360,000 and $7,949,000, respectively, inclusive of any outstanding advances. The approximate carrying value of the municipal loan collateral was $15,560,000 and $16,146,000 as of December 31, 2016 and 2015, respectively. | ||||
[5] | In December 2003, the Company formed a special purpose entity ("Entity") to issue $7,500,000 of floating rate obligated mandatory redeemable trust preferred securities as part of a pooled offering. The rate was determined quarterly and floated based on the 3 month LIBOR plus 2.80. The Entity may redeem them, in whole or in part, at face value after December 17, 2008, and on a quarterly basis thereafter. The Company borrowed the proceeds of the issuance from the Entity in December 2003 in the form of a $7,500,000 note payable. Debt issue costs of $75,000 have been capitalized and fully amortized as of December 31, 2008. Under current accounting rules, the Company's minority interest in the Entity was recorded at the initial investment amount and is included in the other assets section of the balance sheet. The Entity is not consolidated as part of the Company's consolidated financial statements. | ||||
[6] | (f) Term Loans consist of separate loans with the FHLB of Pittsburgh as follows (in thousands): December 31, December 31, Interest Rate Maturity 2015 2014 Fixed: 2.29% October 2, 2017 2,000 2,000 2.72% July 12, 2018 1,000 1,000 1.87% February 4, 2019 2,000 2,000 2.61% February 3, 2021 2,000 2,000 3.52% July 12, 2021 2,000 2,000 2.37% August 20, 2021 2,800 2,800 2.08% January 6, 2022 4,725 4,725 Total term loans $ 16,525 $ 16,525 |
BORROWED FUNDS AND REPURCHASE63
BORROWED FUNDS AND REPURCHASE AGREEMENTS, Maturities of Borrowed Funds (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Maturities of borrowed funds [Abstract] | ||
2,017 | $ 64,033 | |
2,018 | 1,000 | |
2,019 | 2,000 | |
2,020 | 570 | |
2,021 | 7,334 | |
Thereafter | 4,725 | |
Total borrowed funds | $ 79,662 | $ 41,631 |
EMPLOYEE BENEFIT PLANS, Noncont
EMPLOYEE BENEFIT PLANS, Noncontributory Defined Benefit Pension Plan (Details) | 12 Months Ended | ||
Dec. 31, 2016USD ($)Plan | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
EMPLOYEE BENEFIT PLANS [Abstract] | |||
Number of plans | Plan | 2 | ||
Employer discretionary contribution to 401 (k) plan | $ 82,000 | $ 61,000 | $ 46,000 |
Amounts recognized in accumulated other comprehensive loss consists of [Abstract] | |||
Total | (258,000) | (114,000) | (1,209,000) |
Pension Plan [Member] | |||
Change in benefit obligation [Roll Forward] | |||
Benefit obligation at beginning of year | 17,809,000 | 11,777,000 | |
Benefit obligation acquired as part of FNB acquisition | 0 | 6,377,000 | |
Service cost | 345,000 | 352,000 | 307,000 |
Interest cost | 692,000 | 424,000 | 415,000 |
Actuarial (Gain) / Loss | 439,000 | (456,000) | |
Benefits paid | (682,000) | (665,000) | |
Benefit obligation at end of year | 18,603,000 | 17,809,000 | 11,777,000 |
Change in plan assets [Roll Forward] | |||
Fair value of plan assets at beginning of year | 14,786,000 | 11,039,000 | |
Fair value of plan assets at acquisition | 0 | 4,053,000 | |
Actual return (loss) on plan assets | 864,000 | (41,000) | |
Employer contributions | 818,000 | 400,000 | 300,000 |
Benefits paid | (682,000) | (665,000) | |
Fair value of plan assets at end of year | 15,786,000 | 14,786,000 | 11,039,000 |
Funded status | (2,817,000) | (3,023,000) | |
Amounts recognized in accumulated other comprehensive loss consists of [Abstract] | |||
Net loss | 4,263,000 | 3,919,000 | |
Prior service cost | (175,000) | (222,000) | |
Total | 4,088,000 | 3,697,000 | |
Components of net periodic benefit cost [Abstract] | |||
Service cost | 345,000 | 352,000 | 307,000 |
Interest cost | 692,000 | 424,000 | 415,000 |
Return on plan assets | (1,034,000) | (791,000) | (786,000) |
Net amortization and deferral | 219,000 | 205,000 | 51,000 |
Net periodic benefit cost | 222,000 | $ 190,000 | $ (13,000) |
Amounts that will be amortized from accumulated other comprehensive loss into the net periodic benefit cost in 2017, related to estimated net loss | 286,000 | ||
Amounts that will be amortized from accumulated other comprehensive loss into the net periodic benefit cost in 2017 related to prior service cost (benefit) | $ (47,000) | ||
Weighted-average assumptions used to determine benefit obligations [Abstract] | |||
Discount rate | 3.78% | 3.94% | |
Rate of compensation increase | 3.00% | 3.00% | |
Weighted-average assumptions used to determine net periodic benefit cost (income) [Abstract] | |||
Discount rate | 3.94% | 3.61% | 4.30% |
Expected long-term return on plan assets | 7.00% | 7.00% | 7.50% |
Rate of compensation increase | 3.00% | 3.00% | 3.00% |
EMPLOYEE BENEFIT PLANS, Nonco65
EMPLOYEE BENEFIT PLANS, Noncontributory Defined Benefit Pension Plan Fair Value of Plan Assets (Details) - Pension Plan [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | $ 15,786,000 | $ 14,786,000 |
Allocation | 100.00% | 100.00% |
Expected employer contribution to pension plan | $ 520,000 | |
Expected future benefit payments [Abstract] | ||
2,017 | 733,000 | |
2,018 | 591,000 | |
2,019 | 1,820,000 | |
2,020 | 1,549,000 | |
2,021 | 1,403,000 | |
2022 - 2026 | 7,407,000 | |
Level I [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | 11,502,000 | $ 11,610,000 |
Level II [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | 4,284,000 | 3,176,000 |
Level III [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | 0 | 0 |
Cash and Cash Equivalents [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | $ 863,000 | $ 1,704,000 |
Allocation | 5.50% | 11.50% |
Cash and Cash Equivalents [Member] | Level I [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | $ 863,000 | $ 1,704,000 |
Cash and Cash Equivalents [Member] | Level II [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | 0 | 0 |
Cash and Cash Equivalents [Member] | Level III [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | $ 0 | 0 |
Equity Securities [Member] | ||
Target Allocations of Assets [Abstract] | ||
Target plan asset allocations range minimum | 50.00% | |
Target plan asset allocations range maximum | 70.00% | |
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | $ 5,404,000 | $ 3,821,000 |
Allocation | 34.10% | 25.80% |
Equity Securities [Member] | Level I [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | $ 5,404,000 | $ 3,821,000 |
Equity Securities [Member] | Level II [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | 0 | 0 |
Equity Securities [Member] | Level III [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | 0 | 0 |
Mutual Funds and ETF's [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | $ 5,235,000 | $ 6,085,000 |
Allocation | 33.20% | 41.30% |
Mutual Funds and ETF's [Member] | Level I [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | $ 5,235,000 | $ 6,085,000 |
Mutual Funds and ETF's [Member] | Level II [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | 0 | 0 |
Mutual Funds and ETF's [Member] | Level III [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | $ 0 | 0 |
Corporate Bonds [Member] | ||
Target Allocations of Assets [Abstract] | ||
Target plan asset allocations range minimum | 30.00% | |
Target plan asset allocations range maximum | 50.00% | |
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | $ 3,641,000 | $ 3,019,000 |
Allocation | 23.10% | 20.40% |
Corporate Bonds [Member] | Level I [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | $ 0 | $ 0 |
Corporate Bonds [Member] | Level II [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | 3,641,000 | 3,019,000 |
Corporate Bonds [Member] | Level III [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | 0 | 0 |
Municipal Bonds [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | $ 107,000 | $ 107,000 |
Allocation | 0.70% | 0.70% |
Municipal Bonds [Member] | Level II [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | $ 107,000 | $ 107,000 |
U.S. Agency Securities [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | $ 536,000 | $ 50,000 |
Allocation | 3.40% | 0.30% |
U.S. Agency Securities [Member] | Level I [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | $ 0 | $ 0 |
U.S. Agency Securities [Member] | Level II [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | 536,000 | 50,000 |
U.S. Agency Securities [Member] | Level III [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | 0 | 0 |
Common Stock [Member] | ||
Plan assets at fair value [Abstract] | ||
Fair value of plan assets | $ 548,000 | $ 502,000 |
Allocation | 3.50% | 3.40% |
EMPLOYEE BENEFIT PLANS, Defined
EMPLOYEE BENEFIT PLANS, Defined Contribution Plan (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
EMPLOYEE BENEFIT PLANS [Abstract] | |||
Employer contribution to 401 (k) defined contribution plan | $ 351,000 | $ 285,000 | $ 267,000 |
EMPLOYEE BENEFIT PLANS, Directo
EMPLOYEE BENEFIT PLANS, Directors' Deferred Compensation Plan (Details) - Director [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Deferred compensation liability | $ 940,000 | $ 958,000 | |
Deferred interest expense | $ 15,000 | $ 22,000 | $ 20,000 |
EMPLOYEE BENEFIT PLANS, Restric
EMPLOYEE BENEFIT PLANS, Restricted Stock Plan (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Additional General Disclosures [Abstract] | |||
Share-based compensation expense | $ 284,000 | $ 179,000 | $ 200,000 |
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (in shares) | 150,000 | ||
Number of shares available for grant (in shares) | 145,890 | ||
Shares [Roll Forward] | |||
Outstanding, beginning of year (in shares) | 8,269 | ||
Granted (in shares) | 4,110 | ||
Forfeited (in shares) | (90) | ||
Increase due to stock dividends (in shares) | 0 | ||
Vested (in shares) | (3,818) | ||
Outstanding, end of year (in shares) | 8,471 | 8,269 | |
Weighted Average Market Price [Roll Forward] | |||
Outstanding, beginning of year (in dollars per share) | $ 49.98 | ||
Granted (in dollars per share) | 48.13 | $ 49.02 | $ 52.82 |
Forfeited (in dollars per share) | 49.26 | ||
Increase due to stock dividends (in dollars per share) | 0 | ||
Vested (in dollars per share) | 49.95 | ||
Outstanding, end of year (in dollars per share) | $ 49.10 | $ 49.98 | |
Additional General Disclosures [Abstract] | |||
Share-based compensation expense | $ 193,000 | $ 172,000 | $ 157,000 |
Compensation cost related to nonvested awards that has not yet recognized | $ 416,000 | ||
Period over which compensation cost is expected to be recognized | 3 years |
EMPLOYEE BENEFIT PLANS, Other P
EMPLOYEE BENEFIT PLANS, Other Plans (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Supplemental Executive Retirement Plans [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Obligation included in other liabilities | $ 1,460,000 | $ 1,339,000 | |
Cost recognized | 121,000 | 141,000 | $ 152,000 |
Salary Continuation Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Obligation included in other liabilities | 720,000 | 710,000 | |
Cost recognized | 62,000 | 0 | 0 |
Continuation of Life Insurance Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Obligation included in other liabilities | 569,000 | 574,000 | |
Cost recognized | $ 0 | $ 0 | $ 0 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($)Partnership | Dec. 31, 2015USD ($)Partnership | Dec. 31, 2014USD ($) | |
Provision for income taxes [Abstract] | |||||||||||
Currently payable | $ 2,672,000 | $ 2,913,000 | $ 3,081,000 | ||||||||
Deferred tax liability (asset) | 362,000 | (192,000) | 478,000 | ||||||||
Provision for income taxes | $ 789,000 | $ 767,000 | $ 687,000 | $ 791,000 | $ 521,000 | $ 681,000 | $ 779,000 | $ 740,000 | 3,034,000 | 2,721,000 | 3,559,000 |
Deferred tax assets [Abstract] | |||||||||||
Allowance for loan losses | 4,518,000 | 4,238,000 | 4,518,000 | 4,238,000 | |||||||
Deferred compensation | 757,000 | 772,000 | 757,000 | 772,000 | |||||||
Merger & acquisition costs | 16,000 | 20,000 | 16,000 | 20,000 | |||||||
Allowance for losses on available-for-sale securities | 250,000 | 436,000 | 250,000 | 436,000 | |||||||
Pensions and other retirement obligation | 1,454,000 | 1,483,000 | 1,454,000 | 1,483,000 | |||||||
Interest on non-accrual loans | 1,259,000 | 1,001,000 | 1,259,000 | 1,001,000 | |||||||
Incentive plan accruals | 421,000 | 362,000 | 421,000 | 362,000 | |||||||
Other real estate owned | 152,000 | 136,000 | 152,000 | 136,000 | |||||||
Low income housing tax credits | 94,000 | 63,000 | 94,000 | 63,000 | |||||||
NOL carry forward | 709,000 | 950,000 | 709,000 | 950,000 | |||||||
AMT Credit Carryforward | 8,000 | 152,000 | 8,000 | 152,000 | |||||||
Other | 156,000 | 157,000 | 156,000 | 157,000 | |||||||
Total | 9,794,000 | 9,770,000 | 9,794,000 | 9,770,000 | |||||||
Deferred tax liabilities [Abstract] | |||||||||||
Premises and equipment | (998,000) | (919,000) | (998,000) | (919,000) | |||||||
Investment securities accretion | (189,000) | (177,000) | (189,000) | (177,000) | |||||||
Loan fees and costs | (369,000) | (154,000) | (369,000) | (154,000) | |||||||
Goodwill and core deposit intangibles | (3,573,000) | (3,594,000) | (3,573,000) | (3,594,000) | |||||||
Mortgage servicing rights | (233,000) | (238,000) | (233,000) | (238,000) | |||||||
Unrealized gains on available-for-sale securities | (673,000) | (1,135,000) | (673,000) | (1,135,000) | |||||||
Other | (17,000) | (44,000) | (17,000) | (44,000) | |||||||
Total | (6,052,000) | (6,261,000) | (6,052,000) | (6,261,000) | |||||||
Deferred tax asset, net | 3,742,000 | 3,509,000 | 3,742,000 | 3,509,000 | |||||||
Valuation allowance | 0 | 0 | 0 | 0 | |||||||
Total provision for income taxes reconciliation [Abstract] | |||||||||||
Provision at statutory rates on pre-tax income | 5,328,000 | 4,878,000 | 5,761,000 | ||||||||
Effect of tax-exempt income | (1,943,000) | (1,915,000) | (1,865,000) | ||||||||
Low income housing tax credits | (198,000) | (198,000) | (198,000) | ||||||||
Bank owned life insurance | (234,000) | (214,000) | (172,000) | ||||||||
Nondeductible interest | 55,000 | 61,000 | 60,000 | ||||||||
Nondeductible merger and acquisition expenses | 0 | 102,000 | 0 | ||||||||
Other items | 26,000 | 7,000 | (27,000) | ||||||||
Provision for income taxes | 789,000 | $ 767,000 | $ 687,000 | $ 791,000 | 521,000 | $ 681,000 | $ 779,000 | $ 740,000 | $ 3,034,000 | $ 2,721,000 | $ 3,559,000 |
Statutory tax rates | 34.00% | 34.00% | 34.00% | ||||||||
Effective tax rates | 19.40% | 19.00% | 21.00% | ||||||||
Minimum percentages of tax position liable to be realized upon ultimate settlement | 50.00% | ||||||||||
Liability for uncertain tax positions | 0 | 0 | $ 0 | $ 0 | |||||||
Unrecognized tax benefits | 0 | 0 | $ 0 | $ 0 | |||||||
Number of investments in Partnerships | Partnership | 4 | 4 | |||||||||
Investment amount in partnerships | 700,000 | $ 959,000 | $ 700,000 | $ 959,000 | |||||||
Tax Credit Carryforward [Line Items] | |||||||||||
Investment tax credits | $ 846,000 | 846,000 | |||||||||
Amortization of investments in qualified affordable housing projects | $ 259,000 | ||||||||||
Investment Tax Credit Carryforward [Member] | |||||||||||
Tax Credit Carryforward [Line Items] | |||||||||||
Tax credits recognition period | 6 years | ||||||||||
Tax credits recognized as reduction of tax expense amount | $ 198,000 |
OTHER COMPREHENSIVE INCOME (Det
OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Components of accumulated other comprehensive income (loss), net of tax [Abstract] | ||||
Net unrealized gain on securities available for sale | $ 1,979 | $ 3,339 | ||
Tax effect | 673 | 1,135 | ||
Net -of-tax amount | 1,306 | 2,204 | ||
Unrecognized pension costs | (4,088) | (3,697) | ||
Tax effect | (1,390) | (1,257) | ||
Net -of-tax amount | (2,698) | (2,440) | ||
Total accumulated other comprehensive loss | (1,392) | (236) | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance | 119,760 | 100,528 | $ 92,056 | |
Other comprehensive income before reclassifications (net of tax) | (1,133) | (855) | 2,365 | |
Amounts reclassified from accumulated other comprehensive income (loss) (net of tax) | (23) | (148) | (373) | |
Net other comprehensive income (loss) | (1,156) | (1,003) | 1,992 | |
Balance | 123,268 | 119,760 | 100,528 | |
Accumulated Other Comprehensive Income (Loss) [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance | (236) | 767 | (1,225) | |
Net other comprehensive income (loss) | (1,156) | (1,003) | 1,992 | |
Balance | (1,392) | (236) | 767 | |
Unrealized Gains (Loss) on Available For Sale Securities [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance | [1] | 2,204 | 3,093 | (108) |
Other comprehensive income before reclassifications (net of tax) | [1] | (730) | (606) | 3,608 |
Amounts reclassified from accumulated other comprehensive income (loss) (net of tax) | [1] | (168) | (283) | (407) |
Net other comprehensive income (loss) | [1] | (898) | (889) | 3,201 |
Balance | [1] | 1,306 | 2,204 | 3,093 |
Defined Benefit Pension Items [Member] | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Balance | [1] | (2,440) | (2,326) | (1,117) |
Other comprehensive income before reclassifications (net of tax) | [1] | (403) | (249) | (1,243) |
Amounts reclassified from accumulated other comprehensive income (loss) (net of tax) | [1] | 145 | 135 | 34 |
Net other comprehensive income (loss) | [1] | (258) | (114) | (1,209) |
Balance | [1] | $ (2,698) | $ (2,440) | $ (2,326) |
[1] | Amounts in parentheses indicate debits on the consolidated balance sheet. |
OTHER COMPREHENSIVE INCOME, REC
OTHER COMPREHENSIVE INCOME, RECLASSIFICATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Investment securities gains, net | $ 100 | $ 0 | $ 128 | $ 27 | $ (1) | $ 129 | $ 175 | $ 126 | $ 255 | $ 429 | $ 616 | |
Salaries and employee benefits | (16,410) | (12,504) | (11,505) | |||||||||
Provision for income taxes | (789) | (767) | (687) | (791) | (521) | (681) | (779) | (740) | (3,034) | (2,721) | (3,559) | |
NET INCOME | $ 3,171 | $ 3,153 | $ 3,031 | $ 3,283 | $ 2,460 | $ 2,857 | $ 3,189 | $ 3,120 | 12,638 | 11,626 | 13,385 | |
Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
NET INCOME | [1] | 23 | 148 | 373 | ||||||||
Unrealized Gains and Losses on Available For Sale Securities [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Investment securities gains, net | [1] | 255 | 429 | 616 | ||||||||
Provision for income taxes | [1] | (87) | (146) | (209) | ||||||||
NET INCOME | [1] | 168 | 283 | 407 | ||||||||
Defined Benefit Pension Items [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Salaries and employee benefits | [1] | (219) | (205) | (51) | ||||||||
Provision for income taxes | [1] | 74 | 70 | 17 | ||||||||
NET INCOME | [1] | $ (145) | $ (135) | $ (34) | ||||||||
[1] | Amounts in parentheses indicate debits. |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Officers, Directors, Stockholders and Associates [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Loans to Related Parties [Roll Forward] | ||
Balance, beginning of year | $ 5,343 | $ 4,314 |
New loans | 4,512 | 5,828 |
Repayments | (4,285) | (4,799) |
Balance, end of year | $ 5,570 | $ 5,343 |
REGULATORY MATTERS (Details)
REGULATORY MATTERS (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($)Category | Dec. 31, 2015USD ($) | |
Dividend Restrictions [Abstract] | ||
Number of preceding years retained net income used for restrictions on dividend declaration | 2 years | |
Dividends that can be declared without the approval of the Comptroller of the Currency | $ 13,925 | |
Loans [Abstract] | ||
Regulatory lending limit | $ 17,631 | |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Number of capital categories | Category | 5 | |
Bank [Member] | ||
Actual Amount [Abstract] | ||
Total capital (to risk-weighted assets) | $ 117,537 | $ 108,232 |
Tier 1 capital (to risk-weighted assets) | 108,419 | 100,958 |
Common equity tier 1 capital (to risk weighted assets) | 108,419 | 100,958 |
Tier 1 capital (to average assets) | $ 108,419 | $ 100,958 |
Actual Ratio [Abstract] | ||
Total capital (to risk-weighted assets) | 14.46% | 15.34% |
Tier 1 capital (to risk-weighted assets) | 13.34% | 14.31% |
Common equity Tier 1 capital (to risk weighted assets) | 13.34% | 14.31% |
Tier 1 capital (to average assets) | 9.13% | 10.35% |
For Capital Adequacy Purposes Amount [Abstract] | ||
Total capital (to risk-weighted assets) | $ 65,020 | $ 56,443 |
Tier 1 capital (to risk-weighted assets) | 48,765 | 42,332 |
Common equity Tier 1 capital (to risk weighted assets) | 36,574 | 31,749 |
Tier 1 capital (to average assets) | $ 39,006 | $ 39,006 |
For Capital Adequacy Purposes Ratio [Abstract] | ||
Total capital (to risk-weighted assets) | 8.00% | 8.00% |
Tier 1 capital (to risk-weighted assets) | 6.00% | 6.00% |
Common equity Tier 1 capital (to risk weighted assets) | 4.50% | 4.50% |
Tier 1 capital (to average assets) | 4.00% | 4.00% |
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount [Abstract] | ||
Total capital (to risk-weighted assets) | $ 81,275 | $ 70,554 |
Tier 1 capital (to risk-weighted assets) | 65,020 | 56,443 |
Common equity Tier 1 capital (to risk weighted assets) | 52,829 | 45,860 |
Tier 1 capital (to average assets) | $ 48,757 | $ 48,757 |
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio [Abstract] | ||
Total capital (to risk-weighted assets) | 10.00% | 10.00% |
Tier 1 capital (to risk-weighted assets) | 8.00% | 8.00% |
Common equity Tier 1 capital (to risk weighted assets) | 6.50% | 6.50% |
Tier 1 capital (to average assets) | 5.00% | 5.00% |
Company [Member] | ||
Actual Amount [Abstract] | ||
Total capital (to risk-weighted assets) | $ 121,717 | $ 114,886 |
Tier 1 capital (to risk-weighted assets) | 112,599 | 107,612 |
Common equity tier 1 capital (to risk weighted assets) | 105,099 | 100,112 |
Tier 1 capital (to average assets) | $ 112,599 | $ 107,612 |
Actual Ratio [Abstract] | ||
Total capital (to risk-weighted assets) | 14.93% | 16.23% |
Tier 1 capital (to risk-weighted assets) | 13.81% | 15.20% |
Common equity Tier 1 capital (to risk weighted assets) | 12.89% | 14.14% |
Tier 1 capital (to average assets) | 9.46% | 11.01% |
For Capital Adequacy Purposes Amount [Abstract] | ||
Total capital (to risk-weighted assets) | $ 65,217 | $ 56,630 |
Tier 1 capital (to risk-weighted assets) | 48,913 | 42,472 |
Common equity Tier 1 capital (to risk weighted assets) | 36,685 | 31,854 |
Tier 1 capital (to average assets) | $ 47,586 | $ 39,083 |
For Capital Adequacy Purposes Ratio [Abstract] | ||
Total capital (to risk-weighted assets) | 8.00% | 8.00% |
Tier 1 capital (to risk-weighted assets) | 6.00% | 6.00% |
Common equity Tier 1 capital (to risk weighted assets) | 4.50% | 4.50% |
Tier 1 capital (to average assets) | 4.00% | 4.00% |
To Be Well Capitalized Under Prompt Corrective Action Provisions Amount [Abstract] | ||
Total capital (to risk-weighted assets) | $ 81,522 | $ 70,787 |
Tier 1 capital (to risk-weighted assets) | 65,217 | 56,630 |
Common equity Tier 1 capital (to risk weighted assets) | 52,989 | 46,012 |
Tier 1 capital (to average assets) | $ 59,483 | $ 48,854 |
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio [Abstract] | ||
Total capital (to risk-weighted assets) | 10.00% | 10.00% |
Tier 1 capital (to risk-weighted assets) | 8.00% | 8.00% |
Common equity Tier 1 capital (to risk weighted assets) | 6.50% | 6.50% |
Tier 1 capital (to average assets) | 5.00% | 5.00% |
COMMITMENTS AND CONTINGENT LI75
COMMITMENTS AND CONTINGENT LIABILITIES (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($)Claim | Dec. 31, 2015USD ($) | |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Contractual obligation | $ 221,460 | $ 156,885 |
Coverage period for instruments | 1 year | |
Non-contractual obligation | $ 9,124 | |
Number of claims pending | Claim | 0 | |
Commitments to Extend Credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Contractual obligation | $ 206,505 | 143,134 |
Standby Letter of Credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Contractual obligation | $ 14,955 | $ 13,751 |
OPERATING LEASES (Details)
OPERATING LEASES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Future minimum rental payments under operating leases [Abstract] | |||
2,017 | $ 251 | ||
2,018 | 253 | ||
2,019 | 259 | ||
2,020 | 152 | ||
2,021 | 104 | ||
Thereafter | 241 | ||
Total | 1,260 | ||
Total rental expense | $ 289 | $ 175 | $ 171 |
FAIR VALUE OF FINANCIAL INSTR77
FAIR VALUE OF FINANCIAL INSTRUMENTS, Measured On A Recurring And Nonrecurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Recurring [Member] | ||
Securities available for sale [Abstract] | ||
U.S. agency securities | $ 170,414 | $ 199,591 |
U.S. treasuries securities | 3,000 | 10,082 |
Obligations of state and political subdivisions | 96,926 | 102,863 |
Corporate obligations | 3,050 | 14,565 |
Mortgage-backed securities in government sponsored entities | 37,728 | 30,204 |
Equity securities in financial institutions | 2,899 | 2,432 |
Recurring [Member] | Level I [Member] | ||
Securities available for sale [Abstract] | ||
U.S. agency securities | 0 | 0 |
U.S. treasuries securities | 3,000 | 10,082 |
Obligations of state and political subdivisions | 0 | 0 |
Corporate obligations | 0 | 0 |
Mortgage-backed securities in government sponsored entities | 0 | 0 |
Equity securities in financial institutions | 2,899 | 2,432 |
Recurring [Member] | Level II [Member] | ||
Securities available for sale [Abstract] | ||
U.S. agency securities | 170,414 | 199,591 |
U.S. treasuries securities | 0 | 0 |
Obligations of state and political subdivisions | 96,926 | 102,863 |
Corporate obligations | 3,050 | 14,565 |
Mortgage-backed securities in government sponsored entities | 37,728 | 30,204 |
Equity securities in financial institutions | 0 | 0 |
Recurring [Member] | Level III [Member] | ||
Securities available for sale [Abstract] | ||
U.S. agency securities | 0 | 0 |
U.S. treasuries securities | 0 | 0 |
Obligations of state and political subdivisions | 0 | 0 |
Corporate obligations | 0 | 0 |
Mortgage-backed securities in government sponsored entities | 0 | 0 |
Equity securities in financial institutions | 0 | 0 |
Nonrecurring [Member] | ||
Fair value assets and liabilities measured on non-recurring basis [Abstract] | ||
Impaired Loans | 2,033 | 894 |
Other real estate owned | 839 | 1,197 |
Nonrecurring [Member] | Level I [Member] | ||
Fair value assets and liabilities measured on non-recurring basis [Abstract] | ||
Impaired Loans | 0 | 0 |
Other real estate owned | 0 | 0 |
Nonrecurring [Member] | Level II [Member] | ||
Fair value assets and liabilities measured on non-recurring basis [Abstract] | ||
Impaired Loans | 0 | 0 |
Other real estate owned | 0 | 0 |
Nonrecurring [Member] | Level III [Member] | ||
Fair value assets and liabilities measured on non-recurring basis [Abstract] | ||
Impaired Loans | 2,033 | 894 |
Other real estate owned | $ 839 | $ 1,197 |
FAIR VALUE OF FINANCIAL INSTR78
FAIR VALUE OF FINANCIAL INSTRUMENTS, Quantitative Information (Details) - Appraised Collateral Values [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Impaired Loans [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value | $ 2,033 | $ 894 |
Valuation Technique(s) | Appraised Collateral Values | Appraised Collateral Values |
Holding period | 12 months | |
Impaired Loans [Member] | Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount for time since appraisal | 0.00% | 0.00% |
Selling costs | 5.00% | 4.00% |
Holding period | 6 months | |
Impaired Loans [Member] | Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount for time since appraisal | 65.00% | 70.00% |
Selling costs | 9.00% | 10.00% |
Holding period | 12 months | |
Impaired Loans [Member] | Weighted Average [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount for time since appraisal | 28.98% | 46.50% |
Selling costs | 7.56% | 7.75% |
Holding period | 11 months | 10 months |
Other Real Estate Owned [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value | $ 839 | $ 1,197 |
Valuation Technique(s) | Appraised Collateral Values | Appraised Collateral Values |
Other Real Estate Owned [Member] | Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount for time since appraisal | 10.00% | 0.00% |
Other Real Estate Owned [Member] | Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount for time since appraisal | 67.00% | 75.00% |
Other Real Estate Owned [Member] | Weighted Average [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount for time since appraisal | 25.45% | 25.00% |
FAIR VALUE OF FINANCIAL INSTR79
FAIR VALUE OF FINANCIAL INSTRUMENTS, By Balance Sheet Grouping (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Financial Assets [Abstract] | ||
Interest bearing time deposits with other banks | $ 6,955 | $ 7,696 |
Available-for-sale securities | $ 314,017 | 359,737 |
Financial Liabilities [Abstract] | ||
Consideration period for recognition of cash and due from banks | 90 days | |
Consideration period for recognition of accrued interest receivable and payable | 90 days | |
Level I [Member] | ||
Financial Assets [Abstract] | ||
Cash and due from banks | $ 17,754 | 24,384 |
Interest bearing time deposits with other banks | 0 | 0 |
Available-for-sale securities | 5,899 | 12,514 |
Loans held for sale | 1,827 | 603 |
Net loans | 0 | 0 |
Bank owned life insurance | 26,223 | 25,535 |
Regulatory stock | 5,306 | 3,459 |
Accrued interest receivable | 4,089 | 4,211 |
Financial Liabilities [Abstract] | ||
Deposits | 740,889 | 706,121 |
Borrowed funds | 41,330 | 1,598 |
Accrued interest payable | 720 | 734 |
Level II [Member] | ||
Financial Assets [Abstract] | ||
Cash and due from banks | 0 | 0 |
Interest bearing time deposits with other banks | 0 | 0 |
Available-for-sale securities | 308,118 | 347,223 |
Loans held for sale | 0 | |
Net loans | 0 | 0 |
Bank owned life insurance | 0 | 0 |
Regulatory stock | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Financial Liabilities [Abstract] | ||
Deposits | 0 | 0 |
Borrowed funds | 0 | 0 |
Accrued interest payable | 0 | 0 |
Level III [Member] | ||
Financial Assets [Abstract] | ||
Cash and due from banks | 0 | 0 |
Interest bearing time deposits with other banks | 6,960 | 7,705 |
Available-for-sale securities | 0 | 0 |
Loans held for sale | 0 | |
Net loans | 797,184 | 712,524 |
Bank owned life insurance | 0 | 0 |
Regulatory stock | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Financial Liabilities [Abstract] | ||
Deposits | 263,183 | 281,421 |
Borrowed funds | 36,095 | 37,265 |
Accrued interest payable | 0 | 0 |
Carrying Amount [Member] | ||
Financial Assets [Abstract] | ||
Cash and due from banks | 17,754 | 24,384 |
Interest bearing time deposits with other banks | 6,955 | 7,696 |
Available-for-sale securities | 314,017 | 359,737 |
Loans held for sale | 1,827 | 603 |
Net loans | 790,725 | 687,925 |
Bank owned life insurance | 26,223 | 25,535 |
Regulatory stock | 5,306 | 3,459 |
Accrued interest receivable | 4,089 | 4,211 |
Financial Liabilities [Abstract] | ||
Deposits | 1,005,503 | 988,031 |
Borrowed funds | 79,662 | 41,631 |
Accrued interest payable | 720 | 734 |
Fair Value [Member] | ||
Financial Assets [Abstract] | ||
Cash and due from banks | 17,754 | 24,384 |
Interest bearing time deposits with other banks | 6,960 | 7,705 |
Available-for-sale securities | 314,017 | 359,737 |
Loans held for sale | 1,827 | 603 |
Net loans | 797,184 | 712,524 |
Bank owned life insurance | 26,223 | 25,535 |
Regulatory stock | 5,306 | 3,459 |
Accrued interest receivable | 4,089 | 4,211 |
Financial Liabilities [Abstract] | ||
Deposits | 1,004,072 | 987,542 |
Borrowed funds | 77,425 | 38,863 |
Accrued interest payable | $ 720 | $ 734 |
CONDENSED FINANCIAL INFORMATI80
CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Assets [Abstract] | ||||||||||||
Cash | $ 16,854 | $ 14,088 | $ 16,854 | $ 14,088 | ||||||||
Available-for-sale securities | 314,017 | 359,737 | 314,017 | 359,737 | ||||||||
Investment in subsidiary [Abstract] | ||||||||||||
Other assets | 13,454 | 12,104 | 13,454 | 12,104 | ||||||||
TOTAL ASSETS | 1,223,018 | 1,162,984 | 1,223,018 | 1,162,984 | ||||||||
Liabilities [Abstract] | ||||||||||||
Other liabilities | 13,865 | 12,828 | 13,865 | 12,828 | ||||||||
Borrowed funds | 79,662 | 41,631 | 79,662 | 41,631 | ||||||||
TOTAL LIABILITIES | 1,099,750 | 1,043,224 | 1,099,750 | 1,043,224 | ||||||||
Stockholders' equity | 123,268 | 119,760 | 123,268 | 119,760 | $ 100,528 | $ 92,056 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 1,223,018 | 1,162,984 | 1,223,018 | 1,162,984 | ||||||||
Dividends from [Abstract] | ||||||||||||
TOTAL INTEREST AND DIVIDEND INCOME | 11,169 | $ 10,948 | $ 10,426 | $ 10,462 | 9,251 | $ 8,863 | $ 8,768 | $ 8,771 | 43,005 | 35,653 | 35,291 | |
Realized securities gains | 100 | 0 | 128 | 27 | (1) | 129 | 175 | 126 | 255 | 429 | 616 | |
Expenses | 6,645 | 4,900 | 4,508 | |||||||||
NET INCOME | 3,171 | 3,153 | 3,031 | 3,283 | 2,460 | 2,857 | 3,189 | 3,120 | 12,638 | 11,626 | 13,385 | |
Comprehensive income | 11,482 | 10,623 | 15,377 | |||||||||
Cash flows from operating activities [Abstract] | ||||||||||||
Net income | 3,171 | 3,153 | 3,031 | 3,283 | 2,460 | 2,857 | 3,189 | 3,120 | 12,638 | 11,626 | 13,385 | |
Adjustments to reconcile net income to net cash provided by operating activities [Abstract] | ||||||||||||
Investment securities gains | (100) | $ 0 | $ (128) | (27) | 1 | $ (129) | $ (175) | (126) | (255) | (429) | (616) | |
Other, net | 827 | (319) | 322 | |||||||||
Net cash provided by operating activities | 16,194 | 12,811 | 16,178 | |||||||||
Cash flows from investing activities [Abstract] | ||||||||||||
Purchases of available-for-sale securities | (55,600) | (111,304) | (56,257) | |||||||||
Proceeds from the sale of available-for-sale securities | 22,372 | 30,464 | 28,989 | |||||||||
Net cash (used in) provided by investing activities | (70,078) | 19,063 | (8,217) | |||||||||
Cash flows from financing activities [Abstract] | ||||||||||||
Cash dividends paid | (5,081) | (5,151) | (6,121) | |||||||||
Purchase of treasury stock | (3,227) | (2,455) | (814) | |||||||||
Purchase of restricted stock | 0 | (7) | (170) | |||||||||
Net cash provided by (used in) financing activities | 47,254 | (18,913) | (6,621) | |||||||||
Net (decrease) increase in cash and cash equivalents | (6,630) | 12,961 | 1,340 | |||||||||
Cash and Cash Equivalents at Beginning of Year | 24,384 | 11,423 | 24,384 | 11,423 | 10,083 | |||||||
Cash and Cash Equivalents at End of Year | 17,754 | 24,384 | 17,754 | 24,384 | 11,423 | |||||||
Company [Member] | ||||||||||||
Assets [Abstract] | ||||||||||||
Cash | 2,245 | 4,593 | 2,245 | 4,593 | ||||||||
Available-for-sale securities | 2,735 | 2,332 | 2,735 | 2,332 | ||||||||
Investment in subsidiary [Abstract] | ||||||||||||
First Citizens Community Bank | 125,973 | 120,370 | 125,973 | 120,370 | ||||||||
Other assets | 564 | 557 | 564 | 557 | ||||||||
TOTAL ASSETS | 131,517 | 127,852 | 131,517 | 127,852 | ||||||||
Liabilities [Abstract] | ||||||||||||
Other liabilities | 749 | 592 | 749 | 592 | ||||||||
Borrowed funds | 7,500 | 7,500 | 7,500 | 7,500 | ||||||||
TOTAL LIABILITIES | 8,249 | 8,092 | 8,249 | 8,092 | ||||||||
Stockholders' equity | 123,268 | 119,760 | 123,268 | 119,760 | ||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 131,517 | 127,852 | 131,517 | 127,852 | ||||||||
Dividends from [Abstract] | ||||||||||||
Bank subsidiary | 5,842 | 5,582 | 14,332 | |||||||||
Available-for-sale securities | 92 | 71 | 56 | |||||||||
TOTAL INTEREST AND DIVIDEND INCOME | 5,934 | 5,653 | 14,388 | |||||||||
Realized securities gains | 31 | 76 | 0 | |||||||||
Expenses | 463 | 892 | 555 | |||||||||
Income before equity in undistributed earnings of subsidiary | 5,502 | 4,837 | 13,833 | |||||||||
Equity in undistributed earnings - First Citizens Community Bank | 7,136 | 6,789 | (448) | |||||||||
NET INCOME | 12,638 | 11,626 | 13,385 | |||||||||
Comprehensive income | 11,482 | 10,623 | 15,377 | |||||||||
Cash flows from operating activities [Abstract] | ||||||||||||
Net income | 12,638 | 11,626 | 13,385 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities [Abstract] | ||||||||||||
Equity in undistributed earnings of subsidiaries | (7,136) | (6,789) | 448 | |||||||||
Investment securities gains | (31) | (76) | 0 | |||||||||
Other, net | 289 | 322 | 174 | |||||||||
Net cash provided by operating activities | 5,760 | 5,083 | 14,007 | |||||||||
Cash flows from investing activities [Abstract] | ||||||||||||
Purchases of available-for-sale securities | (1) | (901) | (602) | |||||||||
Proceeds from the sale of available-for-sale securities | 201 | 113 | 0 | |||||||||
Net cash (used in) provided by investing activities | 200 | (788) | (602) | |||||||||
Cash flows from financing activities [Abstract] | ||||||||||||
Cash dividends paid | (5,081) | (5,151) | (6,121) | |||||||||
Purchase of treasury stock | (3,227) | (2,455) | (814) | |||||||||
Purchase of restricted stock | 0 | (7) | (170) | |||||||||
Net cash provided by (used in) financing activities | (8,308) | (7,613) | (7,105) | |||||||||
Net (decrease) increase in cash and cash equivalents | (2,348) | (3,318) | 6,300 | |||||||||
Cash and Cash Equivalents at Beginning of Year | $ 4,593 | $ 7,911 | 4,593 | 7,911 | 1,611 | |||||||
Cash and Cash Equivalents at End of Year | $ 2,245 | $ 4,593 | $ 2,245 | $ 4,593 | $ 7,911 |
CONSOLIDATED CONDENSED QUARTE81
CONSOLIDATED CONDENSED QUARTERLY DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
CONSOLIDATED CONDENSED QUARTERLY DATA (UNAUDITED) [Abstract] | |||||||||||
Interest income | $ 11,169 | $ 10,948 | $ 10,426 | $ 10,462 | $ 9,251 | $ 8,863 | $ 8,768 | $ 8,771 | $ 43,005 | $ 35,653 | $ 35,291 |
Interest expense | 1,293 | 1,236 | 1,255 | 1,257 | 1,211 | 1,218 | 1,207 | 1,184 | 5,041 | 4,820 | 4,953 |
NET INTEREST INCOME | 9,876 | 9,712 | 9,171 | 9,205 | 8,040 | 7,645 | 7,561 | 7,587 | 37,964 | 30,833 | 30,338 |
Provision for loan losses | 750 | 500 | 135 | 135 | 120 | 120 | 120 | 120 | 1,520 | 480 | 585 |
Non-interest income | 1,992 | 1,908 | 1,855 | 1,889 | 1,876 | 1,736 | 1,780 | 1,602 | 7,899 | 7,423 | 7,356 |
Investment securities gains, net | 100 | 0 | 128 | 27 | (1) | 129 | 175 | 126 | 255 | 429 | 616 |
Non-interest expenses | 7,258 | 7,200 | 7,301 | 6,912 | 6,814 | 5,852 | 5,428 | 5,335 | 28,671 | 23,429 | 20,165 |
Income before provision for income taxes | 3,960 | 3,920 | 3,718 | 4,074 | 2,981 | 3,538 | 3,968 | 3,860 | 15,672 | 14,347 | 16,944 |
Provision for income taxes | 789 | 767 | 687 | 791 | 521 | 681 | 779 | 740 | 3,034 | 2,721 | 3,559 |
NET INCOME | $ 3,171 | $ 3,153 | $ 3,031 | $ 3,283 | $ 2,460 | $ 2,857 | $ 3,189 | $ 3,120 | $ 12,638 | $ 11,626 | $ 13,385 |
Earnings Per Share Basic (in dollars per share) | $ 0.95 | $ 0.94 | $ 0.91 | $ 0.98 | $ 0.79 | $ 0.94 | $ 1.04 | $ 1.02 | $ 3.78 | $ 3.79 | $ 4.36 |
Earnings Per Share Diluted (in dollars per share) | $ 0.95 | $ 0.94 | $ 0.91 | $ 0.98 | $ 0.79 | $ 0.94 | $ 1.04 | $ 1.02 | $ 3.78 | $ 3.79 | $ 4.36 |
ACQUISITION OF FNB (Details)
ACQUISITION OF FNB (Details) $ / shares in Units, shares in Thousands, $ in Thousands | Dec. 11, 2015USD ($)$ / sharesshares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Jun. 30, 2015Branches$ / shares | |
Adjustments to reflect liabilities acquired at fair value: [Abstract] | ||||||
Goodwill resulting from merger | [1] | $ 21,089 | $ 21,089 | |||
Merger and acquisition | 0 | 1,103 | $ 237 | |||
Assets (liabilities) acquired [Abstract] | ||||||
Goodwill resulting from the FNB merger | [1] | 21,089 | 21,089 | |||
First National Bank of Fredericksburg [Member] | ||||||
Summarizes the purchase of FNB [Abstract] | ||||||
Merger agreement per share in cash and stock (in dollars per share) | $ / shares | $ 630 | |||||
Ownership percentage | 100.00% | |||||
Business acquisition credit impaired loans purchased | $ 3,809 | |||||
Purchase Price Consideration - Cash for Common Stock [Abstract] | ||||||
Purchase price assigned to The First National Bank of Fredericksburg common shares exchanged for cash | 5,619 | |||||
Total Purchase Price | 21,603 | |||||
Net Assets Acquired [Abstract] | ||||||
The First National Bank of Fredericksburg shareholders' equity | 12,298 | |||||
Loans [Abstract] | ||||||
Interest rate | 31 | |||||
General credit | (1,362) | |||||
Specific credit - non-amortizing | (2,495) | |||||
Specific credit - amortizing | (665) | |||||
Core deposit intangible | 1,641 | |||||
Covenant not to compete | 125 | |||||
Premises and equipment | 1,203 | |||||
Leased premises contracts | (359) | |||||
Other assets | (358) | |||||
Deferred tax assets | 785 | |||||
Adjustments to reflect liabilities acquired at fair value: [Abstract] | ||||||
Time deposits | (74) | |||||
Acquired and liabilities assumed, net | 10,770 | |||||
Goodwill resulting from merger | 10,833 | 0 | 10,833 | 0 | ||
Goodwill and other intangibles | 12,814 | |||||
Merger and acquisition | 1,103 | |||||
Asset acquired and liability assumed [Abstract] | ||||||
Total Purchase Price | 21,603 | |||||
Assets (liabilities) acquired [Abstract] | ||||||
Cash and cash equivalents | 83,514 | 0 | 83,514 | 0 | ||
Interest bearing time deposits with other banks | 1,236 | 0 | 1,236 | 0 | ||
Securities available for sale | 23,831 | 0 | 23,831 | 0 | ||
Loans | 115,211 | 0 | 115,211 | 0 | ||
Premises and equipment, net | 4,743 | 0 | 4,743 | 0 | ||
Accrued interest receivable | 282 | 0 | 282 | 0 | ||
Bank-owned life insurance | 4,598 | 0 | 4,598 | 0 | ||
Intangibles | 1,981 | 0 | 1,981 | 0 | ||
Deferred tax asset | 2,979 | 0 | 2,979 | 0 | ||
Other assets | 2,332 | 0 | 2,332 | 0 | ||
Time deposits | (42,675) | |||||
Deposits other than time deposits | (182,555) | |||||
Accrued interest payable | (14) | 0 | (14) | 0 | ||
Other liabilities | (4,693) | 0 | (4,693) | 0 | ||
Acquired and liabilities assumed, net | 10,770 | |||||
Goodwill resulting from the FNB merger | $ 10,833 | $ 0 | $ 10,833 | $ 0 | ||
First National Bank of Fredericksburg [Member] | Lebanon County [Member] | ||||||
Summarizes the purchase of FNB [Abstract] | ||||||
Number of Branches | Branches | 4 | |||||
First National Bank of Fredericksburg [Member] | Schuylkill County [Member] | ||||||
Summarizes the purchase of FNB [Abstract] | ||||||
Number of Branches | Branches | 2 | |||||
First National Bank of Fredericksburg [Member] | Berks County [Member] | ||||||
Summarizes the purchase of FNB [Abstract] | ||||||
Number of Branches | Branches | 1 | |||||
First National Bank of Fredericksburg [Member] | Common Stock [Member] | ||||||
Purchase Price Consideration in Common Stock [Abstract] | ||||||
Citizens Financial Services, Inc. shares issued (in shares) | shares | 336,515 | |||||
Value assigned to Citizens Financial Services, Inc. common share (in dollars per share) | $ / shares | $ 47.5 | |||||
Purchase price assigned to FNB common shares exchanged for Citizens Financial Services, Inc. | $ 15,984 | |||||
[1] | Excludes fully amortized intangible assets |
ACQUISITION OF FNB, Pro Forma I
ACQUISITION OF FNB, Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Integration costs and amortization of fair value [Abstract] | ||||||||||||
Net interest income | $ 9,876 | $ 9,712 | $ 9,171 | $ 9,205 | $ 8,040 | $ 7,645 | $ 7,561 | $ 7,587 | $ 37,964 | $ 30,833 | $ 30,338 | |
Non-interest income | 1,992 | 1,908 | 1,855 | 1,889 | 1,876 | 1,736 | 1,780 | 1,602 | 7,899 | 7,423 | 7,356 | |
Net income | $ 3,171 | $ 3,153 | $ 3,031 | $ 3,283 | $ 2,460 | $ 2,857 | $ 3,189 | $ 3,120 | 12,638 | 11,626 | 13,385 | |
First National Bank of Fredericksburg [Member] | ||||||||||||
Integration costs and amortization of fair value [Abstract] | ||||||||||||
Net interest income | $ 401 | |||||||||||
Non-interest income | 21 | |||||||||||
Net income | $ (22) | |||||||||||
Proforma net interest income | 35,837 | 37,736 | 37,634 | |||||||||
Proforma non-interest income | 7,899 | 8,576 | 8,184 | |||||||||
Proforma net income | $ 12,073 | $ 8,640 | $ 14,019 | |||||||||
Pro forma earnings per share [Abstract] | ||||||||||||
Basic (in dollars per share) | $ 3.61 | $ 2.57 | $ 4.15 | |||||||||
Diluted (in dollars per share) | $ 3.61 | $ 2.57 | $ 4.15 |