Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 02, 2019 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | CORTLAND BANCORP INC | |
Entity Central Index Key | 0000774569 | |
Document Type | 10-Q | |
Trading Symbol | CLDB | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 4,384,075 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and due from banks | $ 7,605 | $ 11,333 |
Interest-earning deposits | 12,381 | 8,359 |
Total cash and cash equivalents | 19,986 | 19,692 |
Investment securities available-for-sale (Note 3) | 136,372 | 136,923 |
Regulatory stock (Note 3) | 2,581 | 2,581 |
Loans held for sale | 2,321 | 1,040 |
Total loans (Note 4) | 482,313 | 514,392 |
Less allowance for loan losses (Note 4) | (4,340) | (4,198) |
Net loans | 477,973 | 510,194 |
Premises and equipment | 10,526 | 10,202 |
Bank-owned life insurance | 15,439 | 15,711 |
Other assets | 20,298 | 18,323 |
Total assets | 685,496 | 714,666 |
LIABILITIES | ||
Noninterest-bearing deposits | 128,641 | 136,886 |
Interest-bearing deposits | 442,935 | 467,533 |
Total deposits | 571,576 | 604,419 |
Securities sold under agreements to repurchase (Note 13) | 1,638 | 2,206 |
Federal Home Loan Bank advances - short term | 9,000 | 12,000 |
Federal Home Loan Bank advances - long term | 18,000 | 16,000 |
Subordinated debt (Note 7) | 5,155 | 5,155 |
Other liabilities | 11,808 | 9,968 |
Total liabilities | 617,177 | 649,748 |
SHAREHOLDERS’ EQUITY | ||
Common stock - $5.00 stated value - authorized 20,000,000 shares; issued 4,728,267 shares in 2019 and 2018; outstanding shares, 4,352,394 in 2019 and 4,349,624 in 2018 | 23,641 | 23,641 |
Additional paid-in capital | 20,982 | 20,984 |
Retained earnings | 32,498 | 31,089 |
Accumulated other comprehensive loss (Note 10) | (1,778) | (3,656) |
Treasury stock, at cost, 375,873 shares in 2019 and 378,643 in 2018 | (7,024) | (7,140) |
Total shareholders’ equity | 68,319 | 64,918 |
Total liabilities and shareholders’ equity | $ 685,496 | $ 714,666 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (Unaudited) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, stated value | $ 5 | $ 5 |
Common stock, shares issued | 4,728,267 | 4,728,267 |
Common stock, shares outstanding | 4,352,394 | 4,349,624 |
Treasury stock, shares | 375,873 | 378,643 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
INTEREST AND DIVIDEND INCOME | ||
Interest and fees on loans | $ 6,583 | $ 5,588 |
Interest and dividends on investment securities: | ||
Taxable interest | 560 | 492 |
Nontaxable interest | 353 | 429 |
Dividends | 36 | 34 |
Other interest income | 58 | 28 |
Total interest and dividend income | 7,590 | 6,571 |
INTEREST EXPENSE | ||
Deposits | 1,161 | 789 |
Securities sold under agreements to repurchase | 1 | 1 |
Federal Home Loan Bank advances - short term | 69 | 91 |
Federal Home Loan Bank advances - long term | 81 | 58 |
Subordinated debt | 54 | 40 |
Total interest expense | 1,366 | 979 |
Net interest income | 6,224 | 5,592 |
PROVISION FOR LOAN LOSSES | 175 | 500 |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 6,049 | 5,092 |
NON-INTEREST INCOME | ||
Fees for customer services | 524 | 555 |
Investment securities available-for-sale gains, net | 20 | |
Mortgage banking gains, net | 337 | 238 |
Earnings on bank-owned life insurance | 131 | 77 |
Other non-interest income | 212 | 122 |
Total non-interest income | 1,204 | 1,012 |
NON-INTEREST EXPENSES | ||
Salaries and employee benefits | 2,744 | 2,450 |
Occupancy and equipment | 573 | 597 |
State and local taxes | 128 | 125 |
FDIC insurance | 38 | 44 |
Professional fees | 206 | 189 |
Advertising and marketing | 95 | 74 |
Data processing fees | 60 | 63 |
Other operating expenses | 908 | 784 |
Total non-interest expenses | 4,752 | 4,326 |
INCOME BEFORE FEDERAL INCOME TAX EXPENSE | 2,501 | 1,778 |
Federal income tax expense | 396 | 241 |
NET INCOME | $ 2,105 | $ 1,537 |
EARNINGS PER SHARE BASIC AND DILUTED | $ 0.49 | $ 0.35 |
CASH DIVIDENDS DECLARED PER SHARE | $ 0.16 | $ 0.11 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income | $ 2,105 | $ 1,537 |
Securities available for sale: | ||
Unrealized holding gains (losses) on available-for-sale securities | 2,369 | (2,964) |
Tax effect | (498) | 623 |
Reclassification adjustment for net gains realized in net income | (20) | |
Tax effect | 4 | |
Total securities available-for-sale | 1,871 | (2,357) |
Change in post-retirement obligations | 7 | (8) |
Total other comprehensive income (loss) | 1,878 | (2,365) |
Total comprehensive income (loss) | $ 3,983 | $ (828) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock |
Beginning balance at Dec. 31, 2017 | $ 61,630 | $ 23,641 | $ 20,928 | $ 24,403 | $ (1,825) | $ (5,517) |
Net income | 1,537 | 1,537 | ||||
Other comprehensive income (loss) | (2,365) | (2,365) | ||||
Cash dividend declared | (486) | (486) | ||||
Treasury shares purchased (10,488 shares) | (223) | (223) | ||||
Equity compensation | 34 | (35) | 69 | |||
Ending balance at Mar. 31, 2018 | 60,127 | 23,641 | 20,893 | 25,454 | (4,190) | (5,671) |
Beginning balance at Dec. 31, 2018 | 64,918 | 23,641 | 20,984 | 31,089 | (3,656) | (7,140) |
Net income | 2,105 | 2,105 | ||||
Other comprehensive income (loss) | 1,878 | 1,878 | ||||
Cash dividend declared | (696) | (696) | ||||
Treasury shares reissued (2,770 shares) | 60 | 11 | 49 | |||
Equity compensation | 54 | (13) | 67 | |||
Ending balance at Mar. 31, 2019 | $ 68,319 | $ 23,641 | $ 20,982 | $ 32,498 | $ (1,778) | $ (7,024) |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) (Unaudited) | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Statement Consolidated Statements Of Changes In Shareholders Equity Parenthetical Unaudited [Abstract] | |
Cash dividend declared per share | $ / shares | $ 0.16 |
Treasury shares reissued shares | shares | 2,770 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net cash flow from operating activities | ||
Net cash flow from operating activities | $ 1,049 | $ 4,100 |
Cash flow from investing activities | ||
Purchases of available-for-sale securities | (5,885) | |
Proceeds from sale of available-for-sale securities | 19,841 | |
Proceeds from call, maturity and principal payments on available-for-sale securities | 2,591 | 3,352 |
Net decrease in loans made to customers | 32,046 | 34,382 |
Proceeds from bank-owned life insurance | 403 | |
Contributions to partnership funds | (221) | (278) |
Purchases of premises and equipment | (527) | (462) |
Net cash flow from investing activities | 34,292 | 50,950 |
Cash deficit from financing activities | ||
Net decrease in deposit accounts | (32,843) | (31,312) |
Net change in securities sold under agreements to repurchase | (568) | (616) |
Net change in Federal Home Loan Bank advances - short term | (3,000) | (14,000) |
Repayments of Federal Home Loan Bank advances - long term | (2,000) | (4,000) |
Proceeds from Federal Home Loan Bank advances - long term | 4,000 | 4,000 |
Dividends paid | (696) | (486) |
Treasury shares reissued (purchased) | 60 | (223) |
Net cash deficit from financing activities | (35,047) | (46,637) |
Net change in cash and cash equivalents | 294 | 8,413 |
Cash and cash equivalents | ||
Beginning of period | 19,692 | 19,125 |
End of period | 19,986 | 27,538 |
Cash paid during the period for: | ||
Interest | $ 1,254 | $ 978 |
Basis of Presentation and Recla
Basis of Presentation and Reclassifications | 3 Months Ended |
Mar. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation and Reclassifications | The accompanying unaudited consolidated financial statements of Cortland Bancorp (the Company) and the Cortland Savings and Banking Company (the Bank) have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. These interim unaudited consolidated financial statements should be read in conjunction with our annual audited financial statements as of December 31, 2018, included in our Form 10-K for the year ended December 31, 2018, filed with the United States Securities and Exchange Commission. The accompanying Consolidated Balance Sheets at December 31, 2018 have been derived from the audited Consolidated Balance Sheets but do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. |
Authoritative Accounting Guidan
Authoritative Accounting Guidance | 3 Months Ended |
Mar. 31, 2019 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Authoritative Accounting Guidance | 2.) Authoritative Accounting Guidance: In February 2016, the FASB issued ASU (Accounting Standard Update) 2016-02, Leases (Topic 842) Leases (Topic 842) – Targeted Improvements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments 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 March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20). The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beg For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments in this Update on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. This Update did not have a significant impact on the Company’s financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 850) should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the amendments in this Update. The amended presentation and disclosure guidance is required only prospectively. This Update did not have a significant impact on the Company’s financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718) In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes the Disclosure Requirements for Fair Value Measurements In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40). In October 2018, the FASB issued ASU 2018-16 , Derivatives and Hedging (Topic 815) In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842): Codification Improvements, effective date is for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. This Update is not expected to have a significant impact on the Company’s financial statements. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, w |
Investment Securities
Investment Securities | 3 Months Ended |
Mar. 31, 2019 | |
Investments Debt And Equity Securities [Abstract] | |
Investment Securities | 3.) Investment Securities: Investments in debt securities are classified as held-to-maturity, available-for-sale or trading. Securities classified as held-to-maturity are those that management has the positive intent and ability to hold to maturity. Securities classified as available-for-sale are those that could be sold for liquidity, investment management, or similar reasons, even though management has no present intentions to do so. Securities classified as trading are those that management has bought principally for the purpose of selling in the near term. The Company currently has no securities classified as held-to-maturity or trading. Available-for-sale securities are carried at fair value with unrealized gains and losses recorded as a separate component of shareholders’ equity, net of tax. Realized gains or losses on dispositions are based on net proceeds and the adjusted carrying amount of securities sold, using the specific identification method. Interest income includes amortization of purchase premium or discount and is amortized on the level-yield method without anticipating payments, except for U.S. Government mortgage-backed and related securities where twelve months of historical prepayments are taken into consideration. The regulatory stock is carried at cost (its redeemable value) and the Company is required to hold such investments as a condition of membership in order to transact business with the Federal Home Loan Bank (FHLB) of Cincinnati and the Federal Reserve Bank (FRB). The stock is bought from and sold to the correspondent institutions based upon its par value. The stock cannot be traded or sold in any market and as such is classified as restricted stock, carried at cost (its redeemable value) and evaluated by management. The stock’s value is determined by the ultimate recoverability of the par value rather than by recognizing temporary declines. The determination of whether the par value will ultimately be recovered is influenced by criteria such as the following: (a) the significance of the decline in net assets of the FHLB and FRB as compared to the capital stock amount and the length of time this situation has persisted, (b) commitments by the FHLB and FRB to make payments required by law or regulation and the level of such payments in relation to the operating performance, (c) the impact of legislative and regulatory changes on the customer base of the FHLB and FRB and (d) the liquidity position of the FHLB and FRB. The Company does not consider these investments to be other-than-temporarily impaired at March 31, 2019. Securities are evaluated periodically to determine whether a decline in value is other-than-temporary. Management utilizes criteria such as the magnitude and duration of the decline, along with the reasons underlying the decline, to determine whether the loss in value is other-than-temporary. The term “other-than-temporary” is not intended to indicate that the decline in value is permanent but indicates that the prospect for a near-term recovery of value is not necessarily favorable and that there is a lack of evidence to support a realizable value equal to or greater than the carrying value of the investment. Unrealized losses on available-for-sale investments have not been recognized into income. However, once a decline in value is determined to be other-than-temporary, the credit related other-than-temporary impairment (OTTI) is recognized in earnings while the non-credit related OTTI on securities not expected to be sold is recognized in other comprehensive income (loss). The following table is a summary of investment securities available-for-sale and regulatory stock: (Amounts in thousands) March 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Government agencies and corporations $ 9,246 $ 63 $ 82 $ 9,227 Obligations of states and political subdivisions 53,085 237 440 52,882 U.S. Government-sponsored mortgage-backed securities 57,147 7 1,764 55,390 U.S. Government-sponsored collateralized mortgage obligations 11,660 58 128 11,590 U.S. Government-guaranteed small business administration pools 7,531 — 248 7,283 Total investment securities available-for-sale $ 138,669 $ 365 $ 2,662 $ 136,372 Federal Home Loan Bank (FHLB) stock $ 2,355 $ — $ — $ 2,355 Federal Reserve Bank (FRB) stock 226 — — 226 Total regulatory stock $ 2,581 $ — $ — $ 2,581 (Amounts in thousands) December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Government agencies and corporations $ 9,242 $ 11 $ 251 $ 9,002 Obligations of states and political subdivisions 53,187 26 1,555 51,658 U.S. Government-sponsored mortgage-backed securities 59,070 — 2,483 56,587 U.S. Government-sponsored collateralized mortgage obligations 12,112 41 177 11,976 U.S. Government-guaranteed small business administration pools 7,978 — 278 7,700 Total investment securities available-for-sale $ 141,589 $ 78 $ 4,744 $ 136,923 Federal Home Loan Bank (FHLB) stock $ 2,355 $ — $ — $ 2,355 Federal Reserve Bank (FRB) stock 226 — — 226 Total regulatory stock $ 2,581 $ — $ — $ 2,581 The amortized cost and fair value of debt securities at March 31, 2019, by contractual maturity, are shown below. Actual maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. (Amounts in thousands) Amortized Cost Fair Value Due in one year or less $ — $ — Due after one year through five years 482 488 Due after five years through ten years 12,158 12,065 Due after ten years 57,222 56,839 Total 69,862 69,392 U.S. Government-sponsored mortgage-backed and related securities 68,807 66,980 Total investment securities available-for-sale $ 138,669 $ 136,372 The table below sets forth the proceeds and gains or losses realized on available for sale securities sold or called for the periods presented: (Amounts in thousands) Three Months Ended March 31, 2019 2018 Proceeds on securities sold $ — $ 19,841 Gross realized gains — 123 Gross realized losses — 103 Investment securities with a carrying value of approximately $58.9 million at March 31, 2019 and $55.1 million at December 31, 2018 were pledged to secure deposits and for other purposes. The remaining securities provide an adequate level of liquidity. The following is a summary of the fair value of available-for-sale securities with unrealized losses and an aging of those unrealized losses at March 31, 2019: (Amounts in thousands) Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Government agencies and corporations $ — $ — $ 3,264 $ 82 $ 3,264 $ 82 Obligations of states and political subdivisions — — 27,998 440 27,998 440 U.S. Government-sponsored mortgage-backed securities — — 53,774 1,764 53,774 1,764 U.S. Government-sponsored collateralized mortgage obligations 1,844 2 5,197 126 7,041 128 U.S. Government-guaranteed small business administration pools — — 7,283 248 7,283 248 Total $ 1,844 $ 2 $ 97,516 $ 2,660 $ 99,360 $ 2,662 The above table comprises 92 investment securities where the fair value is less than the related amortized cost. The following is a summary of the fair value of available-for-sale securities with unrealized losses and an aging of those unrealized losses at December 31, 2018: (Amounts in thousands) Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Government agencies and corporations $ 3,280 $ 6 $ 2,755 $ 245 $ 6,035 $ 251 Obligations of states and political subdivisions 23,616 567 24,607 988 48,223 1,555 U.S. Government-sponsored mortgage-backed securities 1,598 18 54,989 2,465 56,587 2,483 U.S. Government-sponsored collateralized mortgage obligations — — 5,350 177 5,350 177 U.S. Government-guaranteed small business administration pools — — 7,700 278 7,700 278 Total $ 28,494 $ 591 $ 95,401 $ 4,153 $ 123,895 $ 4,744 The above table comprises 121 investment securities where the fair value is less than the related amortized cost. The unrealized losses at March 31, 2019 on the Company’s investments were caused by changes in market rates and related spreads. It is expected that the securities would not be settled at less than the amortized cost of the Company’s investment because the decline in fair value is attributable to changes in interest rates and relative spreads and not credit quality. Also, the Company does not intend to sell those investments and it is not more-likely-than-not that the Company will be required to sell the investments before recovery of its amortized cost basis less any current period credit loss. The Company does not consider these investments to be other-than-temporarily impaired at March 31, 2019. |
Loans and Allowance for Loan Lo
Loans and Allowance for Loan Losses | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Loans and Allowance for Loan Losses | 4.) Loans and Allowance for Loan Losses: The Company, through the Bank, grants residential, consumer and commercial loans to customers located primarily in Northeastern Ohio and Western Pennsylvania. The following represents the composition of the loan portfolio for the period ending: (Amounts in thousands) March 31, 2019 December 31, 2018 Balance % Balance % Commercial $ 71,462 14.8 $ 112,440 21.9 Commercial real estate 313,229 65.0 303,804 59.0 Residential real estate 69,650 14.4 69,845 13.6 Consumer - home equity 24,761 5.1 25,076 4.9 Consumer - other 3,211 0.7 3,227 0.6 Total loans $ 482,313 $ 514,392 Management has an established methodology to determine the adequacy of the allowance for loan losses that assesses the risks and losses inherent in the loan portfolio. For purposes of determining the allowance for loan losses, the Company has segmented loans in the portfolio by product type. Loans are segmented into the following pools: commercial loans, commercial real estate loans, residential real estate loans and consumer loans. The pools of commercial real estate loans and commercial loans are also broken down further by industry sectors when analyzing the related pools. Using the largest concentrations as the qualifier, these industry sectors include non-residential buildings; skilled nursing and nursing care; residential real estate lessors, agents and managers; hotel and motels, and trucking. The Company also sub-segments the consumer loan portfolio into the following two classes: home equity loans and other consumer loans. Historical loss percentages for each risk category are calculated and used as the basis for calculating allowance allocations. These historical loss percentages are calculated over multiple periods for all portfolio segments. Management evaluates these results and utilizes the most reflective period in the calculation. Certain qualitative factors are then added to the historical allocation percentage to get the adjusted factor. These factors include, but are not limited to, the following: Factor Considered: Risk Trend: Levels of and trends in charge-offs, classifications and non-accruals Stable Trends in volume and terms Stable Changes in lending policies and procedures Stable Experience, depth and ability of management, including loan review function Stable Economic trends, including valuation of underlying collateral Stable Concentrations of credit Decreasing The following factors are analyzed and applied to loans internally graded with higher credit risk in addition to the above factors for non-classified loans: Factor Considered: Risk Trend: Levels and trends in classification Stable Declining trends in financial performance Stable Structure and lack of performance measures Stable Migration between risk categories Stable The provision charged to operations can be allocated to a loan classification either as a positive or negative value as a result of any material changes to: net charge-offs or recovery which influence the historical allocation percentage, qualitative risk factors or loan balances. The following is an analysis of changes in the allowance for loan losses for the periods ended: (Amounts in thousands) March 31, 2019 Commercial Commercial real estate Residential real estate Consumer - home equity Consumer - other Total Balance at beginning of period $ 1,232 $ 2,414 $ 314 $ 115 $ 123 $ 4,198 Loan charge-offs — — (29 ) — (58 ) (87 ) Recoveries 28 — — — 26 54 Net loan recoveries (charge-offs) 28 — (29 ) — (32 ) (33 ) Provision charged to operations 318 (213 ) 35 (1 ) 36 175 Balance at end of period $ 1,578 $ 2,201 $ 320 $ 114 $ 127 $ 4,340 (Amounts in thousands) March 31, 2018 Commercial Commercial real estate Residential real estate Consumer - home equity Consumer - other Total Balance at beginning of period $ 1,591 $ 2,702 $ 117 $ 70 $ 98 $ 4,578 Loan charge-offs (1,163 ) — — — (50 ) (1,213 ) Recoveries — — — 3 16 19 Net loan recoveries (charge-offs) (1,163 ) — — 3 (34 ) (1,194 ) Provision charged to operations 906 (412 ) (24 ) (6 ) 36 500 Balance at end of period $ 1,334 $ 2,290 $ 93 $ 67 $ 100 $ 3,884 The total allowance reflects management’s estimate of loan losses inherent in the loan portfolio at the consolidated balance sheet date. The following tables present a full breakdown by portfolio classification of the allowance for loan losses and the recorded investment in loans at March 31, 2019 and December 31, 2018: (Amounts in thousands) March 31, 2019 Commercial Commercial real estate Residential real estate Consumer - home equity Consumer - other Total Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 579 $ — $ — $ — $ — $ 579 Collectively evaluated for impairment 999 2,201 320 114 127 3,761 Total ending allowance balance $ 1,578 $ 2,201 $ 320 $ 114 $ 127 $ 4,340 Loan Portfolio: Individually evaluated for impairment $ 5,225 $ 3,220 $ — $ — $ — $ 8,445 Collectively evaluated for impairment 66,237 310,009 69,650 24,761 3,211 473,868 Total ending loans balance $ 71,462 $ 313,229 $ 69,650 $ 24,761 $ 3,211 $ 482,313 (Amounts in thousands) December 31, 2018 Commercial Commercial real estate Residential real estate Consumer - home equity Consumer - other Total Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ — $ — $ — $ — $ — $ — Collectively evaluated for impairment 1,232 2,414 314 115 123 4,198 Total ending allowance balance $ 1,232 $ 2,414 $ 314 $ 115 $ 123 $ 4,198 Loan Portfolio: Individually evaluated for impairment $ 5,364 $ 4,340 $ — $ — $ — $ 9,704 Collectively evaluated for impairment 107,076 299,464 69,845 25,076 3,227 504,688 Total ending loans balance $ 112,440 $ 303,804 $ 69,845 $ 25,076 $ 3,227 $ 514,392 The decrease in commercial loan balances from year-end was due in part to 60-day or less term commercial loans for a total of $40.9 million that closed in December 2018 and were fully secured by segregated deposit accounts with the Bank. The loans matured in the first quarter of 2019. The commercial charge-off in 2018 related to loans that were restructured with no principal forgiveness with a new borrowing relationship, but with a substantial concession in interest rate. The below market rate triggered recognition of a charge-off equivalent to the difference in present value of loan payments discounted at the market rate of interest. The charged off amount of $1.1 million is recorded as a loan discount. As loan payments are made, interest will be recognized at the market rate versus the negotiated rate via the amortization of the discount over the various lives of the loans. There was $625,000 in specific reserve previously allocated to these loans at December 31, 2017. The decrease in the provision for commercial real estate loans is due mainly to a decrease in the concentration of credit factor. The recent segmentation of the commercial real estate loan portfolio into its five largest concentrations has resulted in lower allocations to those segments. The residential real estate, consumer-home equity and other household provisions remained fairly constant. The amount of net charge-offs also impacts the provision charged to operations for any category of loans. Charge-offs affect the historical rate applied to each category, and the amount needed to replenish the amount charged-off, which impacted home equity and consumer loans as well as commercial real estate loans. The following tables represent credit exposures by internally assigned grades for March 31, 2019 and December 31, 2018. The grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled or at all. The Company’s internal credit risk grading system is based on experiences with similarly graded loans. The Company’s internally assigned grades are as follows: • Pass – loans which are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral. Within this category, there are grades of exceptional, quality, acceptable and pass monitor. • Special Mention – loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected. • Substandard – 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 – loans classified as doubtful have all the weaknesses inherent in a substandard asset but with the severity which makes collection in full highly questionable and improbable, based on existing circumstances. • Loss – loans classified as a loss are considered uncollectible, or of such value that continuance as an asset is not warranted. This rating does not mean that the assets have no recovery or salvage value but rather that the assets should be charged off now, even though partial or full recovery may be possible in the future. The following table is a summary of credit quality indicators by internally assigned grades as of March 31, 2019 and December 31, 2018: (Amounts in thousands) Commercial Commercial real estate March 31, 2019 Pass $ 53,379 $ 283,801 Special Mention 7,445 25,211 Substandard 10,638 4,217 Doubtful — — Ending Balance $ 71,462 $ 313,229 (Amounts in thousands) Commercial Commercial real estate December 31, 2018 Pass $ 94,316 $ 271,370 Special Mention 6,914 25,199 Substandard 11,210 7,235 Doubtful — — Ending Balance $ 112,440 $ 303,804 The Company evaluates the classification of consumer, home equity and residential loans primarily on a pooled basis. If the Company becomes aware that adverse or distressed conditions exist that may affect a particular loan, the loan is downgraded following the above definitions of special mention and substandard. Nonaccrual loans in these categories are evaluated for charge off or charge down, and the remaining balance has the same allowance factor as pooled loans. The following table is a summary of consumer credit exposure as of March 31, 2019 and December 31, 2018: (Amounts in thousands) Residential real estate Consumer Consumer - other March 31, 2019 Performing $ 69,442 $ 24,634 $ 3,211 Nonperforming 208 127 — Total $ 69,650 $ 24,761 $ 3,211 (Amounts in thousands) Residential real estate Consumer Consumer - other December 31, 2018 Performing $ 69,535 $ 24,956 $ 3,227 Nonperforming 310 120 — Total $ 69,845 $ 25,076 $ 3,227 Loans are considered to be nonperforming when they become 90 days past due or on nonaccrual status, though the Company may be receiving partial payments of interest and partial repayments of principal on such loans. When a loan is placed in non-accrual status, previously accrued but unpaid interest is deducted from interest income. Loans in foreclosure are considered nonperforming. The following table is a summary of classes of loans on non-accrual status as of March 31, 2019 and December 31, 2018: (Amounts in thousands) March 31, 2019 December 31, 2018 Commercial $ 1,222 $ 1,291 Commercial real estate 501 512 Residential real estate 208 310 Consumer: Consumer - home equity 127 120 Consumer - other — — Total $ 2,058 $ 2,233 Troubled Debt Restructuring Nonperforming loans also include certain loans that have been modified in troubled debt restructurings (TDRs) where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Company’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months. There were no loans modified as TDR’s during the period ended March 31, 2019. The following presents, by class, information related to loans modified in a TDR during the period ending March 31, 2018. (Dollar amounts in thousands) Three Months Ended March 31, 2018 Number of contracts Pre-modification recorded investment Post-modification recorded investment Increase in the allowance Commercial 7 $ 5,373 $ 4,210 $ — Commercial real estate — — — — Total restructured loans 7 $ 5,373 $ 4,210 $ — Subsequently defaulted — — The seven commercial loans were all to one new borrowing relationship. The loans were restructured with no principal forgiveness, but with a substantial concession in interest rate. The below market rate triggered recognition of a charge-off equivalent to the difference in present value of loan payments discounted at the market rate of interest. The charged off amount of $1.1 million is recorded as loan discount. As loan payments are made, interest will be recognized at the market rate versus the negotiated rate via the amortization of the discount over the various lives of the loans. The following table is an aging analysis of the recorded investment of past due loans as of March 31, 2019 and December 31, 2018: (Amounts in thousands) 30-59 Days Past Due 60-89 Days Past Due 90 Days Or Greater Total Current Total Loans Recorded Investment 90 Days and Accruing March 31, 2019 Commercial $ — $ 485 $ 223 $ 708 $ 70,754 $ 71,462 $ — Commercial real estate — 158 164 322 312,907 313,229 — Residential real estate 477 — 192 669 68,981 69,650 — Consumer: Consumer - home equity — — 127 127 24,634 24,761 — Consumer - other 11 — — 11 3,200 3,211 — Total $ 488 $ 643 $ 706 $ 1,837 $ 480,476 $ 482,313 $ — (Amounts in thousands) 30-59 Days Past Due 60-89 Days Past Due 90 Days Or Greater Total Current Total Loans Recorded Investment 90 Days and Accruing December 31, 2018 Commercial $ 14 $ — $ 1,291 $ 1,305 $ 111,135 $ 112,440 $ — Commercial real estate — — 167 167 303,637 303,804 — Residential real estate 36 182 257 475 69,370 69,845 — Consumer: Consumer - home equity — 141 25 166 24,910 25,076 — Consumer - other 17 — — 17 3,210 3,227 — Total $ 67 $ 323 $ 1,740 $ 2,130 $ 512,262 $ 514,392 $ — An impaired loan is a loan on which, based on current information and events, it is probable that a creditor will be unable to collect all amounts due (including both interest and principal) according to the contractual terms of the loan agreement. However, an insignificant delay or insignificant shortfall in amount of payments on a loan does not indicate that the loan is impaired. When a loan is determined to be impaired, impairment should be measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate. However, as a practical expedient, the Company will measure impairment based on a loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent. The following are the criteria for selecting individual loans / relationships for impairment analysis. Non-homogenous loans which meet the criteria below are evaluated quarterly. • All borrowers whose loans are classified doubtful by examiners and internal loan review • All loans on non-accrual status • Any loan in foreclosure • Any loan with a specific allowance • Any loan determined to be collateral dependent for repayment • Loans classified as troubled debt restructuring Commercial loans and commercial real estate loans evaluated for impairment are excluded from the general pool of loans in the ALLL calculation regardless if a specific reserve was determined. If management determines that the value of the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance. The following table presents the recorded investment and unpaid principal balances for impaired loans, excluding homogenous loans for which impaired analyses are not necessarily performed, with the associated allowance amount, if applicable, at March 31, 2019 and December 31, 2018. Also presented are the average recorded investments in the impaired balances and interest income recognized after impairment for the three months ended March 31, 2019 and 2018. (Amounts in thousands) Recorded Investment Unpaid Principal Balance Related Allowance March 31, 2019 With no related allowance recorded: Commercial $ 4,226 $ 5,239 $ — Commercial real estate 3,220 3,220 — With an allowance recorded: Commercial 999 999 579 Commercial real estate — — — Total: Commercial $ 5,225 $ 6,238 $ 579 Commercial real estate $ 3,220 $ 3,220 $ — (Amounts in thousands) Recorded Investment Unpaid Principal Balance Related Allowance December 31, 2018 With no related allowance recorded: Commercial $ 5,364 $ 6,411 $ — Commercial real estate 4,340 4,340 — With an allowance recorded: Commercial — — — Commercial real estate — — — Total: Commercial $ 5,364 $ 6,411 $ — Commercial real estate $ 4,340 $ 4,340 $ — (Amounts in thousands) Three Months Ended Average Recorded Investment Interest Income Recognized March 31, 2019 With no related allowance recorded: Commercial $ 4,952 $ 148 Commercial real estate 3,203 63 With an allowance recorded: Commercial 333 — Commercial real estate — — Total: Commercial $ 5,285 $ 148 Commercial real estate $ 3,203 $ 63 (Amounts in thousands) Three Months Ended Average Recorded Investment Interest Income Recognized March 31, 2018 With no related allowance recorded: Commercial $ 1,467 $ 3 Commercial real estate 4,540 108 With an allowance recorded: Commercial 3,643 46 Commercial real estate — — Total: Commercial $ 5,110 $ 49 Commercial real estate $ 4,540 $ 108 |
Legal Proceedings
Legal Proceedings | 3 Months Ended |
Mar. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Legal Proceedings | 5.) Legal Proceedings: The Company is involved in legal actions arising in the ordinary course of business. In the opinion of management, the outcomes from these matters, either individually or in the aggregate, are not expected to have any material effect on the Company. |
Earnings Per Share and Capital
Earnings Per Share and Capital Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share and Capital Transactions | Earnings per share is computed by dividing net income available to common shareholders by the weighted average number of shares of common outstanding stock, net of any treasury shares, during the period. Diluted earnings per share is calculated by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding, net of any treasury shares, after consideration of the potential dilutive effect of common stock equivalents, based upon the treasury stock method using an average market price for the period. The common stock equivalents are comprised of the restricted share awards. Three Months Ended March 31, 2019 2018 Net income (amounts in thousands) $ 2,105 $ 1,537 Weighted average common shares outstanding 4,326,734 4,393,449 Net effect of dilutive common share equivalents 9,507 8,327 Adjusted average shares outstanding-dilutive 4,336,241 4,401,776 Basic earnings per share $ 0.49 $ 0.35 Diluted earnings per share $ 0.49 $ 0.35 |
Subordinated Debt
Subordinated Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Subordinated Debt | 7.) Subordinated Debt: In July 2007, a trust formed by the Company issued $5.0 million of floating rate trust preferred securities as part of a pooled offering of such securities due December 2037. The Company owns all $155,000 of the common securities issued by the trust. The securities bear interest at the 3-month LIBOR rate plus 1.45%. The rates at March 31, 2019 and December 31, 2018 were 4.06% and 4.24%, respectively. The Company issued subordinated debentures to the trust in exchange for the proceeds of the trust preferred offering. The debentures represent the sole assets of this trust. The Company may redeem the subordinated debentures, in whole or in part, at par. The trust is not consolidated with the Company’s financial statements. Accordingly, the Company does not report the securities issued by the trust as liabilities, but instead reports as liabilities the subordinated debentures issued by the Company and held by the trust. The subordinated debentures qualify as Tier 1 capital for regulatory purposes in determining and evaluating the Company’s capital adequacy. |
Commitments
Commitments | 3 Months Ended |
Mar. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments | 8.) Commitments: The Bank 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, standby letters of credit and financial guarantees. Such instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized on the Consolidated Balance Sheets. The contract or notional amounts on those instruments reflect the extent of involvement the Company has in particular classes of financial instruments. In the event of nonperformance by the other party, the Company’s exposure to credit loss on these financial instruments is represented by the contract or notional amount of the instrument. The Company uses the same credit policies in making commitments and conditional obligations as it does for instruments recorded on the balance sheet. The amount and nature of collateral obtained, if any, is based on management’s credit evaluation. The following table is a summary of such contractual commitments: (Amounts in thousands) March 31, 2019 December 31, 2018 Commitments to extend credit: Fixed rate $ 32,489 $ 31,225 Variable rate 78,739 74,050 Standby letters of credit 3,560 3,455 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Generally, these financial arrangements have fixed expiration dates or other termination clauses and may require payment of a fee. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash 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 upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment and income-producing commercial properties. The increase in commitments is in line with the Company’s increased focus on commercial and industrial lending, and specifically lines of credit. The Company also offers limited overdraft protection as a non-contractual courtesy which is available to businesses as well as individually/jointly owned accounts in good standing for personal or household use. The Company reserves the right to discontinue this service without prior notice. The following table is a summary of overdraft protection for the periods indicated: (Amounts in thousands) March 31, 2019 December 31, 2018 Overdraft protection available on depositors' accounts $ 8,542 $ 8,708 Balance of overdrafts included in loans 71 116 Average daily balance of overdrafts 119 104 Average daily balance of overdrafts as a percentage of available 1.39 % 1.19 % Customer Derivatives - Interest Rate Swaps/Floors – The Company enters into interest rate swaps that allow our commercial loan customers to effectively convert a variable-rate commercial loan agreement to a fixed-rate commercial loan agreement. Under these agreements, the Company enters into a variable-rate loan agreement with a customer in addition to an interest rate swap agreement, which serves to effectively swap the customer’s variable-rate into a fixed-rate. The Company then enters into a corresponding swap agreement with a third party in order to economically hedge its exposure through the customer agreement. The interest rate swaps with both the customers and third party are not designated as hedges under FASB ASC 815 and are marked to market through earnings. As the interest rate swaps are structured to offset each other, changes to the underlying benchmark interest rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by FASB ASC 820. There was no effect on earnings in any periods presented. At March 31, 2019, based on the contract values, the Company had one U.S. Government-sponsored mortgage-backed security pledged for collateral on its interest rate swaps with the third party financial institution at a fair value of $1.6 million, compared to December 31, 2018 where the Company had one U.S. Government-sponsored mortgage-backed security pledged for collateral on its interest rate swaps with the third party financial institution at a fair value of $1.4 million. Summary information regarding these derivatives is presented below: (Amounts in thousands) Notional Amount Fair Value March 31, 2019 December 31, 2018 Interest Rate Paid Interest Rate Received March 31, 2019 December 31, 2018 Customer interest rate swap Maturing in 2020 $ 2,385 $ 2,410 1 Mo. Libor + Margin Fixed $ (19 ) $ (30 ) Maturing in 2025 4,838 4,930 1 Mo. Libor + Margin Fixed 33 (28 ) Maturing in 2026 1,915 1,946 1 Mo. Libor + Margin Fixed (34 ) (64 ) Maturing in 2027 13,683 13,790 1 Mo. Libor + Margin Fixed 207 (54 ) Maturing in 2028 6,314 6,395 1 Mo. Libor + Margin Fixed 379 268 Total $ 29,135 $ 29,471 $ 566 $ 92 Third party interest rate swap Maturing in 2020 $ 2,385 $ 2,410 Fixed 1 Mo. Libor + Margin $ 19 $ 30 Maturing in 2025 4,838 4,930 Fixed 1 Mo. Libor + Margin (33 ) 28 Maturing in 2026 1,915 1,946 Fixed 1 Mo. Libor + Margin 34 64 Maturing in 2027 13,683 13,790 Fixed 1 Mo. Libor + Margin (207 ) 54 Maturing in 2028 6,314 6,395 Fixed 1 Mo. Libor + Margin (379 ) (268 ) Total $ 29,135 $ 29,471 $ (566 ) $ (92 ) The following table presents the fair values of derivative instruments in the balance sheet: (Amounts in thousands) Assets Liabilities Balance Sheet Location Fair Value Balance Sheet Location Fair Value March 31, 2019 Interest rate derivatives Other assets $ 566 Other liabilities $ 566 December 31, 2018 Interest rate derivatives Other assets $ 92 Other liabilities $ 92 |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities | 9.) Fair Value of Assets and Liabilities: Measurements The Company groups assets and liabilities recorded at fair value into three levels based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement (with level 1 considered highest and level 3 considered lowest). A brief description of each level follows: Level 1: Quoted prices are available in active markets for identical assets or liabilities as of the reported date. Level 2: 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 which trade less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed. Level 3: 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 inputs into the determination of fair value require significant management judgment or estimation. The following table presents the assets reported on the consolidated balance sheets, on a recurring basis, at their fair value as of March 31, 2019 and December 31, 2018 by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. (Amounts in thousands) Fair Value Measurements at March 31, 2019 Using Description March 31, 2019 Level 1 Level 2 Level 3 ASSETS U.S. Government agencies and corporations $ 9,227 $ — $ 9,227 $ — Obligations of states and political subdivisions 52,882 — 52,882 — U.S. Government-sponsored mortgage-backed securities 55,390 — 55,390 — U.S. Government-sponsored collateralized mortgage obligations 11,590 — 11,590 — U.S. Government-guaranteed small business administration pools 7,283 — 7,283 — Loans held for sale 2,321 2,321 — — Interest rate derivatives 566 — 566 — LIABILITIES Interest rate derivatives $ 566 $ — $ 566 $ — (Amounts in thousands) Fair Value Measurements at December 31, 2018 Using Description December 31, 2018 Level 1 Level 2 Level 3 ASSETS U.S. Government agencies and corporations $ 9,002 $ — $ 9,002 $ — Obligations of states and political subdivisions 51,658 — 51,658 — U.S. Government-sponsored mortgage-backed securities 56,587 — 56,587 — U.S. Government-sponsored collateralized mortgage obligations 11,976 — 11,976 — U.S. Government-guaranteed small business administration pools 7,700 — 7,700 — Loans held for sale 1,040 1,040 — — Interest rate derivatives 92 — 92 — LIABILITIES Interest rate derivatives $ 92 $ — $ 92 $ — The following tables present the changes in the Level 3 fair value category for the three months ended March 31, 2019 and 2018. The Company classifies financial instruments in Level 3 of the fair-value hierarchy when there is reliance on at least one significant unobservable input to the valuation model. In addition to these unobservable inputs, the valuation models for Level 3 financial instruments typically also rely on a number of inputs that are readily observable either directly or indirectly. (Amounts in thousands) Three Months Ended March 31, 2019 2018 Trust preferred securities Trust preferred securities Beginning balance $ — $ 895 Net realized/unrealized losses included in: Noninterest income — — Other comprehensive income (loss) — 195 Discount accretion (premium amortization) — — Sales — — Purchases, issuance, and settlements — — Ending balance $ — $ 1,090 Losses included in net income for the period relating to assets held at period end $ — $ — The Company conducts OTTI analyses on a quarterly basis. The initial indication of other-than-temporary impairment for both debt and equity securities is a decline in the fair value below the amount recorded for an investment. A decline in value that is considered to be other-than-temporary is recorded as a loss within non-interest income in the consolidated statements of income. In determining whether an impairment is other than temporary, the Company considers a number of factors, including, but not limited to, the length of time and extent to which the market value has been less than cost, recent events specific to the issuer, including investment downgrades by rating agencies and economic conditions of its industry, and a determination that the Company does not intend to sell those investments and it is not more-likely-than-not that the Company will be required to sell the investments before recovery of its amortized cost basis less any current period credit loss. Among the factors that are considered in determining the Company’s intent and ability is a review of its capital adequacy, interest rate risk position and liquidity. The Company also considers the issuer’s financial condition, capital strength and near-term prospects. In addition, for debt securities the Company considers the cause of the price decline (general level of interest rates and industry- and issuer-specific factors), current ability to make future payments in a timely manner and the issuer’s ability to service debt, the assessment of a security’s ability to recover any decline in market value, the ability of the issuer to meet contractual obligations and the Company’s intent and ability to retain the security. All of the foregoing require considerable judgment. Trust Preferred Securities Trust preferred securities, which are accounted for under FASB ASC Topic 325 Investments Other The following table details the one debt security with other-than-temporary impairment, its credit ratings at March 31, 2018 and the related losses recognized in earnings: (Amounts in thousands) Moody’s/Fitch Rating Amount of OTTI related to credit loss at January 1, 2018 Additions in QTD March 31, 2018 Amount of OTTI related to credit loss at March 31, 2018 Trapeza IX B-1 Caa2/CC $ 140 $ — $ 140 Total $ 140 $ — $ 140 The market for trust preferred securities at March 31, 2018 was not active and markets for similar securities are also not active. The inactivity was evidenced first by a significant widening of the bid-ask spread in the brokered markets in which trust preferred securities trade and then by a significant decrease in the volume of trades relative to historical levels. The new issue market is also inactive as new issuance is essentially nonexistent. There are currently very few market participants who are willing and/or able to transact for these securities. The pooled market value for these securities remains very depressed relative to historical levels. Although there has been marked improvement in the credit spread premium in the corporate bond space, little improvement has been noted in the market for trust preferred securities. Given conditions in the debt markets and the absence of observable transactions in the secondary and the new issue markets, the Company determined the following: • The few observable transactions and market quotations that are available are not reliable for purposes of determining fair value; • An income valuation approach technique (present value technique) that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs will be equally or more representative of fair value than the market approach valuation technique used at measurement dates prior to 2008; and • The trust preferred securities will be classified within Level 3 of the fair value hierarchy because the Company determined that significant judgments are required to determine fair value at the measurement date. The Company enlisted the aid of an independent third party to perform the trust preferred security valuations. The approach to determining fair value involved the following process: 1. Estimate the credit quality of the collateral using average probability of default values for each issuer (adjusted for rating levels). 2. Consider the potential for correlation among issuers within the same industry for default probabilities (e.g. banks with other banks). 3. Forecast the cash flows for the underlying collateral and apply to each trust preferred security tranche to determine the resulting distribution among the securities, including prepayment and cures. 4. Discount the expected cash flows to calculate the present value of the security. Financial Instruments The Company discloses fair value information about financial instruments, whether or not recognized in the Consolidated Balance Sheets, for which it is practicable to estimate the value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other estimation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Such techniques and assumptions, as they apply to individual categories of the financial instruments, are as follows: Investment securities available-for-sale– Fair values of securities are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable securities. Loans held for sale – Loans held for sale consist of residential mortgage loans originated for sale. Loans held for sale are recorded at fair value based on what the secondary markets have offered on best efforts commitments. Interest rate derivatives – The fair value is based on settlement values adjusted for credit risks associated with the counter parties and the Company and observable market interest rate curves. In addition, other assets and liabilities of the Company that are not defined as financial instruments are not included in the disclosures, such as property and equipment. Also, non-financial instruments typically not recognized in financial statements nevertheless may have value but are not included in the above disclosures. These include, among other items, the estimated earning power of core deposit accounts, the trained work force, customer goodwill and similar items. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. The carrying amounts and fair values of the Company’s financial instruments are as follows: (Amounts in thousands) March 31, 2019 Carrying Amount Level 1 Level 2 Level 3 Fair Value ASSETS: Cash and cash equivalents $ 19,986 $ 19,986 $ — $ — $ 19,986 Investment securities available-for-sale 136,372 — 136,372 — 136,372 Loans held for sale 2,321 2,321 — — 2,321 Loans 477,973 — — 482,589 482,589 Bank-owned life insurance 15,439 15,439 — — 15,439 Accrued interest receivable 2,346 2,346 — — 2,346 Interest rate derivatives 566 — 566 — 566 LIABILITIES: Demand, savings and money market deposits $ 432,653 $ 432,653 $ — $ — $ 432,653 Time deposits 138,923 — — 139,953 139,953 Securities sold under agreements to repurchase 1,638 1,638 — — 1,638 Federal Home Loan Bank advances - short term 9,000 — — 8,991 8,991 Federal Home Loan Bank advances - long term 18,000 — — 17,941 17,941 Subordinated debt 5,155 — — 4,692 4,692 Accrued interest payable 483 483 — — 483 Interest rate derivatives 566 — 566 — 566 (Amounts in thousands) December 31, 2018 Carrying Amount Level 1 Level 2 Level 3 Fair Value ASSETS: Cash and cash equivalents $ 19,692 $ 19,692 $ — $ — $ 19,692 Investment securities available-for-sale 136,923 — 136,923 — 136,923 Loans held for sale 1,040 1,040 — — 1,040 Loans 510,194 — — 513,103 513,103 Bank-owned life insurance 15,711 15,711 — — 15,711 Accrued interest receivable 2,255 2,255 — — 2,255 Interest rate derivatives 92 — 92 — 92 LIABILITIES: Demand, savings and money market deposits $ 483,054 $ 483,054 $ — $ — $ 483,054 Time deposits 121,365 — — 122,295 122,295 Short term borrowings 2,206 2,206 — — 2,206 Federal Home Loan Bank advances - short term 12,000 — — 11,987 11,987 Federal Home Loan Bank advances - long term 16,000 — — 15,880 15,880 Subordinated debt 5,155 — — 4,620 4,620 Accrued interest payable 371 371 — — 371 Interest rate derivatives 92 — 92 — 92 The following table presents quantitative information about the Level 3 significant inputs for assets and liabilities measured at fair value on a recurring and nonrecurring basis at March, 31 2019. There were no such Level 3 measurements at 12/31/18. (Amounts in thousands) Fair value at March 31, 2019 Valuation Technique Significant Unobservable Input Range of Inputs Impaired loans $ 420 Appraisal of Collateral Appraisal Adjustments (76)% Liquidation Expenses (10)% |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | 10.) Accumulated Other Comprehensive Loss: The following table presents the changes in accumulated other comprehensive loss by component net of tax for the three months ended March 31, 2019 and 2018: (Amounts in thousands) Three Months Ended March 31, 2019 2018 Unrealized gains (losses) on available- for-sale securities (a) Change in pension and postretirement obligations (a) Unrealized losses on available- for-sale securities (a) Change in pension and postretirement obligations (a) Beginning balance $ (3,686 ) $ 30 $ (1,787 ) $ (38 ) Other comprehensive income (loss) before reclassification 1,871 7 (2,341 ) (8 ) Amount reclassified from accumulated other comprehensive loss — — (16 ) — Total other comprehensive income (loss) 1,871 7 (2,357 ) (8 ) Ending balance $ (1,815 ) $ 37 $ (4,144 ) $ (46 ) (a) All amounts are net of tax. Amounts in parentheses indicate debits. The following table presents significant amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three months ended March 31, 2019 and 2018: (Amounts in thousands) Three Months Ended March 31, 2019 2018 Amount reclassified from accumulated other comprehensive income (a) Amount reclassified from accumulated other comprehensive loss (a) Affected line item in the statement where net income is presented Details about other comprehensive income or loss: Unrealized gains on available- for-sale securities $ — $ 20 Investment securities available-for-sale gains, net — (4 ) Federal income tax expense $ — $ 16 (a) Amounts in parentheses indicate debits to net income. |
Post-Retirement Obligations
Post-Retirement Obligations | 3 Months Ended |
Mar. 31, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
Post-Retirement Obligations | 11.) Post-Retirement Obligations: The Company accrues for the monthly benefit expense of post-retirement cost of insurance for split dollar life insurance coverage. The following table presents the changes in the accumulated liability: (Amounts in thousands) Three Months Ended March 31, 2019 2018 Beginning balance $ 831 $ 876 Expense recorded (1 ) 6 Other comprehensive loss (income) recorded (7 ) 8 Ending balance $ 823 $ 890 |
Stock Repurchase Program
Stock Repurchase Program | 3 Months Ended |
Mar. 31, 2019 | |
Stock Repurchase Program [Abstract] | |
Stock Repurchase Program | 12.) Stock Repurchase Program: On January 23, 2018, the Company’s Board of Directors approved a new program which allowed the Company to repurchase up to 100,000 shares, or approximately 2.3% of the 4,420,136 shares outstanding at January 23, 2018, of the Company’s outstanding common stock. On May 22, 2018 the Company’s Board of Directors approved an increase in the number of shares authorized for repurchase under the January 23, 2018 plan by 200,000 shares bringing the total to 300,000 shares authorized. Both of these programs terminated on December 31, 2018. The Company purchased 80,944 shares under this program. On December 18, 2018, the Company’s Board of Directors approved a new program which allows the Company to repurchase up to 300,000 shares, or approximately 6.9% of the 4,349,624 outstanding shares of common stock at December 18, 2018. This program will terminate on December 31, 2019, or upon purchase of 300,000 shares if earlier or at any time without prior notice. To date, no shares have been repurchased under this program. Repurchased shares are designated as treasury shares, available for general corporate purposes, including possible use in connection with the Company’s dividend reinvestment program, employee benefit plans, acquisitions or other distributions. Based on the value of the Company’s stock on March 31, 2019, the remaining authorization to repurchase the stock for the program is approximately $7.1 million. |
Securities Sold Under Agreement
Securities Sold Under Agreements to Repurchase | 3 Months Ended |
Mar. 31, 2019 | |
Securities Sold Under Agreements To Repurchase [Abstract] | |
Securities Sold Under Agreements to Repurchase | 13.) Securities Sold Under Agreements to Repurchase: The following table provides additional detail regarding repurchase agreements: (Amounts in thousands) Repurchase Agreements (Sweep) Accounted for as Secured Borrowings At March 31, 2019 At December 31, 2018 Remaining Contractual Maturity of the Agreements Overnight and Continuous Overnight and Continuous Repurchase agreements: U.S. Government-sponsored mortgage-backed securities $ 3,058 $ 3,066 Total collateral carrying value $ 3,058 $ 3,066 Total repurchase agreements $ 1,638 $ 2,206 |
Equity Compensation
Equity Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Equity Compensation | 14.) Equity Compensation: During 2015, the Company, created the 2015 Omnibus Equity Plan and The Director Equity Plan. The Omnibus Equity Plan permits the award of up to 340,000 shares to the Company’s employees to promote the long-term financial success of the Company, increasing shareholder value by providing employees the opportunity to acquire an ownership interest in the Company and enabling the Company and its related entities to attract and retain the services of those upon whom the successful conduct of business depends. In the first three months of 2019, no shares were granted to employees under the plan, and no shares were granted under the plan in the first three months of 2018. The Company is expensing the grant date fair value of all share-based compensation over the requisite vesting periods on a prorated straight-line basis. In the first three months of 2019 and 2018 compensation expense of $54,000 and $34,000, respectively, was recorded in the Consolidated Statements of Income. As of March 31, 2019, there was $256,000 of total unrecognized compensation expense related to the non-vested shares granted under the Plan. Shares awarded under this plan vest in equal thirds on the first three anniversaries of the award date if the employee remains employed with Cortland Bancorp. The remaining cost is expected to be recognized over a weighted average period of 14.0 months. Granted shares are awarded upon meeting achievement of performance objectives derived from one or more of the performance criteria. The main metrics used for the periods presented were three-year earnings per share growth and three-year total shareholder return ranked versus a peer group. The Director Equity Plan permits the award of up to 113,000 shares to nonemployee directors to promote the long-term financial success of the Company, increasing shareholder value by enabling the Company and its related entities to attract and retain the services of those directors upon whom the successful conduct of business depends. There were no Board approved shares granted in the first three months of 2019, and there were no Board approved shares granted under the plan in the first three months of 2018. In the first three months of 2019, there was no expense recorded in the Consolidated Statements of Income, and there was no expense recorded in the first three months of 2018. The following is the activity under the two plans during the three months ended March 31, 2019: Shares Weighted Average Grant Date Fair Value Nonvested at January 1, 2019 23,591 $ 19.67 Granted — — Vested (3,794 ) 18.25 Forfeited — — Nonvested at March 31, 2019 19,797 $ 19.94 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | 15.) Leases: Operating leases in which we are the lessee are recorded as operating lease Right of Use (“ROU”) assets and operating lease liabilities, included in other assets and other liabilities, respectively, on our consolidated balance sheets. We do not currently have any significant finance leases in which we are the lessee. Operating lease ROU assets represent our right to use an underlying asset during the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. We elected to adopt the transition method, which uses a modified retrospective transition approach. ROU assets and operating lease liabilities are recognized as of the date of adoption based on the present value of the remaining lease payments using a discount rate that represents our incremental borrowing rate at the date of initial application. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded in occupancy and equipment expense in the consolidated statements of income and other comprehensive income. Our leases relate primarily to office space and bank branches with remaining lease terms of generally 5 to 10 years. Certain lease arrangements contain extension options which typically range from 5 to 15 years at the then fair market rental rates. As these extension options are generally considered reasonably certain of exercise, they are included in the lease term. As of March 31, 2019, operating lease ROU assets and liabilities were $2.0 million. At March 31, 2019, we recognized $67,000 in operating lease cost, $62,000 is operating cash flows from operating leases and $5,000 in non-cash expense amortization of the ROU asset and the implicit interest. The following table summarizes other information related to our operating leases: March 31, 2019 Weighted-average remaining lease term-operating leases in years 15.72 Weighted-average discount rate - operating leases 3.06 % The following table presents aggregate lease maturities and obligations as of March 31, 2019: (Amounts in thousands) March 31, 2019 2019 $ 186 2020 231 2021 154 2022 154 2023 156 2024 and thereafter 1,641 Total lease payments 2,522 Less: interest 507 Present value of lease liabilities $ 2,015 |
Authoritative Accounting Guid_2
Authoritative Accounting Guidance (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Authoritative Accounting Guidance | 2.) Authoritative Accounting Guidance: In February 2016, the FASB issued ASU (Accounting Standard Update) 2016-02, Leases (Topic 842) Leases (Topic 842) – Targeted Improvements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments 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 March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20). The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beg For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments in this Update on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. This Update did not have a significant impact on the Company’s financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 850) should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the amendments in this Update. The amended presentation and disclosure guidance is required only prospectively. This Update did not have a significant impact on the Company’s financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718) In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes the Disclosure Requirements for Fair Value Measurements In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40). In October 2018, the FASB issued ASU 2018-16 , Derivatives and Hedging (Topic 815) In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842): Codification Improvements, effective date is for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. This Update is not expected to have a significant impact on the Company’s financial statements. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, w |
Investment Securities (Tables)
Investment Securities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments Debt And Equity Securities [Abstract] | |
Summary of Investment Securities Available-for-Sale and Regulatory Stock | The following table is a summary of investment securities available-for-sale and regulatory stock: (Amounts in thousands) March 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Government agencies and corporations $ 9,246 $ 63 $ 82 $ 9,227 Obligations of states and political subdivisions 53,085 237 440 52,882 U.S. Government-sponsored mortgage-backed securities 57,147 7 1,764 55,390 U.S. Government-sponsored collateralized mortgage obligations 11,660 58 128 11,590 U.S. Government-guaranteed small business administration pools 7,531 — 248 7,283 Total investment securities available-for-sale $ 138,669 $ 365 $ 2,662 $ 136,372 Federal Home Loan Bank (FHLB) stock $ 2,355 $ — $ — $ 2,355 Federal Reserve Bank (FRB) stock 226 — — 226 Total regulatory stock $ 2,581 $ — $ — $ 2,581 (Amounts in thousands) December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. Government agencies and corporations $ 9,242 $ 11 $ 251 $ 9,002 Obligations of states and political subdivisions 53,187 26 1,555 51,658 U.S. Government-sponsored mortgage-backed securities 59,070 — 2,483 56,587 U.S. Government-sponsored collateralized mortgage obligations 12,112 41 177 11,976 U.S. Government-guaranteed small business administration pools 7,978 — 278 7,700 Total investment securities available-for-sale $ 141,589 $ 78 $ 4,744 $ 136,923 Federal Home Loan Bank (FHLB) stock $ 2,355 $ — $ — $ 2,355 Federal Reserve Bank (FRB) stock 226 — — 226 Total regulatory stock $ 2,581 $ — $ — $ 2,581 |
Amortized Cost and Fair Value of Debt Securities by Contractual Maturity | The amortized cost and fair value of debt securities at March 31, 2019, by contractual maturity, are shown below. Actual maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. (Amounts in thousands) Amortized Cost Fair Value Due in one year or less $ — $ — Due after one year through five years 482 488 Due after five years through ten years 12,158 12,065 Due after ten years 57,222 56,839 Total 69,862 69,392 U.S. Government-sponsored mortgage-backed and related securities 68,807 66,980 Total investment securities available-for-sale $ 138,669 $ 136,372 |
Proceeds and Gains or Losses Realized on Available for Sale Securities Sold or Called | The table below sets forth the proceeds and gains or losses realized on available for sale securities sold or called for the periods presented: (Amounts in thousands) Three Months Ended March 31, 2019 2018 Proceeds on securities sold $ — $ 19,841 Gross realized gains — 123 Gross realized losses — 103 |
Fair Value of Securities with Unrealized Losses and an Aging of those Unrealized Losses | The following is a summary of the fair value of available-for-sale securities with unrealized losses and an aging of those unrealized losses at March 31, 2019: (Amounts in thousands) Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Government agencies and corporations $ — $ — $ 3,264 $ 82 $ 3,264 $ 82 Obligations of states and political subdivisions — — 27,998 440 27,998 440 U.S. Government-sponsored mortgage-backed securities — — 53,774 1,764 53,774 1,764 U.S. Government-sponsored collateralized mortgage obligations 1,844 2 5,197 126 7,041 128 U.S. Government-guaranteed small business administration pools — — 7,283 248 7,283 248 Total $ 1,844 $ 2 $ 97,516 $ 2,660 $ 99,360 $ 2,662 The above table comprises 92 investment securities where the fair value is less than the related amortized cost. The following is a summary of the fair value of available-for-sale securities with unrealized losses and an aging of those unrealized losses at December 31, 2018: (Amounts in thousands) Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Government agencies and corporations $ 3,280 $ 6 $ 2,755 $ 245 $ 6,035 $ 251 Obligations of states and political subdivisions 23,616 567 24,607 988 48,223 1,555 U.S. Government-sponsored mortgage-backed securities 1,598 18 54,989 2,465 56,587 2,483 U.S. Government-sponsored collateralized mortgage obligations — — 5,350 177 5,350 177 U.S. Government-guaranteed small business administration pools — — 7,700 278 7,700 278 Total $ 28,494 $ 591 $ 95,401 $ 4,153 $ 123,895 $ 4,744 |
Loans and Allowance for Loan _2
Loans and Allowance for Loan Losses (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Composition of the Loan Portfolio | The following represents the composition of the loan portfolio for the period ending: (Amounts in thousands) March 31, 2019 December 31, 2018 Balance % Balance % Commercial $ 71,462 14.8 $ 112,440 21.9 Commercial real estate 313,229 65.0 303,804 59.0 Residential real estate 69,650 14.4 69,845 13.6 Consumer - home equity 24,761 5.1 25,076 4.9 Consumer - other 3,211 0.7 3,227 0.6 Total loans $ 482,313 $ 514,392 |
Certain Qualitative Factors Considered in Measuring Risk Trends | These factors include, but are not limited to, the following: Factor Considered: Risk Trend: Levels of and trends in charge-offs, classifications and non-accruals Stable Trends in volume and terms Stable Changes in lending policies and procedures Stable Experience, depth and ability of management, including loan review function Stable Economic trends, including valuation of underlying collateral Stable Concentrations of credit Decreasing |
Factors Analyzed and Applied to Loans Internally Graded with Higher Credit Risk | The following factors are analyzed and applied to loans internally graded with higher credit risk in addition to the above factors for non-classified loans: Factor Considered: Risk Trend: Levels and trends in classification Stable Declining trends in financial performance Stable Structure and lack of performance measures Stable Migration between risk categories Stable |
Analysis of Changes in the Allowance for Loan Losses | The following is an analysis of changes in the allowance for loan losses for the periods ended: (Amounts in thousands) March 31, 2019 Commercial Commercial real estate Residential real estate Consumer - home equity Consumer - other Total Balance at beginning of period $ 1,232 $ 2,414 $ 314 $ 115 $ 123 $ 4,198 Loan charge-offs — — (29 ) — (58 ) (87 ) Recoveries 28 — — — 26 54 Net loan recoveries (charge-offs) 28 — (29 ) — (32 ) (33 ) Provision charged to operations 318 (213 ) 35 (1 ) 36 175 Balance at end of period $ 1,578 $ 2,201 $ 320 $ 114 $ 127 $ 4,340 (Amounts in thousands) March 31, 2018 Commercial Commercial real estate Residential real estate Consumer - home equity Consumer - other Total Balance at beginning of period $ 1,591 $ 2,702 $ 117 $ 70 $ 98 $ 4,578 Loan charge-offs (1,163 ) — — — (50 ) (1,213 ) Recoveries — — — 3 16 19 Net loan recoveries (charge-offs) (1,163 ) — — 3 (34 ) (1,194 ) Provision charged to operations 906 (412 ) (24 ) (6 ) 36 500 Balance at end of period $ 1,334 $ 2,290 $ 93 $ 67 $ 100 $ 3,884 |
Allowance for Loan Losses and the Recorded Investment in Loans | The following tables present a full breakdown by portfolio classification of the allowance for loan losses and the recorded investment in loans at March 31, 2019 and December 31, 2018: (Amounts in thousands) March 31, 2019 Commercial Commercial real estate Residential real estate Consumer - home equity Consumer - other Total Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 579 $ — $ — $ — $ — $ 579 Collectively evaluated for impairment 999 2,201 320 114 127 3,761 Total ending allowance balance $ 1,578 $ 2,201 $ 320 $ 114 $ 127 $ 4,340 Loan Portfolio: Individually evaluated for impairment $ 5,225 $ 3,220 $ — $ — $ — $ 8,445 Collectively evaluated for impairment 66,237 310,009 69,650 24,761 3,211 473,868 Total ending loans balance $ 71,462 $ 313,229 $ 69,650 $ 24,761 $ 3,211 $ 482,313 (Amounts in thousands) December 31, 2018 Commercial Commercial real estate Residential real estate Consumer - home equity Consumer - other Total Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ — $ — $ — $ — $ — $ — Collectively evaluated for impairment 1,232 2,414 314 115 123 4,198 Total ending allowance balance $ 1,232 $ 2,414 $ 314 $ 115 $ 123 $ 4,198 Loan Portfolio: Individually evaluated for impairment $ 5,364 $ 4,340 $ — $ — $ — $ 9,704 Collectively evaluated for impairment 107,076 299,464 69,845 25,076 3,227 504,688 Total ending loans balance $ 112,440 $ 303,804 $ 69,845 $ 25,076 $ 3,227 $ 514,392 |
Summary of Credit Quality Indicators by Internally Assigned Grades | The following table is a summary of credit quality indicators by internally assigned grades as of March 31, 2019 and December 31, 2018: (Amounts in thousands) Commercial Commercial real estate March 31, 2019 Pass $ 53,379 $ 283,801 Special Mention 7,445 25,211 Substandard 10,638 4,217 Doubtful — — Ending Balance $ 71,462 $ 313,229 (Amounts in thousands) Commercial Commercial real estate December 31, 2018 Pass $ 94,316 $ 271,370 Special Mention 6,914 25,199 Substandard 11,210 7,235 Doubtful — — Ending Balance $ 112,440 $ 303,804 |
Summary of Consumer Credit Exposure | The following table is a summary of consumer credit exposure as of March 31, 2019 and December 31, 2018: (Amounts in thousands) Residential real estate Consumer Consumer - other March 31, 2019 Performing $ 69,442 $ 24,634 $ 3,211 Nonperforming 208 127 — Total $ 69,650 $ 24,761 $ 3,211 (Amounts in thousands) Residential real estate Consumer Consumer - other December 31, 2018 Performing $ 69,535 $ 24,956 $ 3,227 Nonperforming 310 120 — Total $ 69,845 $ 25,076 $ 3,227 |
Summary of Classes of Loans on Non-Accrual Status | The following table is a summary of classes of loans on non-accrual status as of March 31, 2019 and December 31, 2018: (Amounts in thousands) March 31, 2019 December 31, 2018 Commercial $ 1,222 $ 1,291 Commercial real estate 501 512 Residential real estate 208 310 Consumer: Consumer - home equity 127 120 Consumer - other — — Total $ 2,058 $ 2,233 |
Information Related to Loans Modified in a TDR | The following presents, by class, information related to loans modified in a TDR during the period ending March 31, 2018. (Dollar amounts in thousands) Three Months Ended March 31, 2018 Number of contracts Pre-modification recorded investment Post-modification recorded investment Increase in the allowance Commercial 7 $ 5,373 $ 4,210 $ — Commercial real estate — — — — Total restructured loans 7 $ 5,373 $ 4,210 $ — Subsequently defaulted — — |
Aging Analysis of the Recorded Investment of Past Due Loans | The following table is an aging analysis of the recorded investment of past due loans as of March 31, 2019 and December 31, 2018: (Amounts in thousands) 30-59 Days Past Due 60-89 Days Past Due 90 Days Or Greater Total Current Total Loans Recorded Investment 90 Days and Accruing March 31, 2019 Commercial $ — $ 485 $ 223 $ 708 $ 70,754 $ 71,462 $ — Commercial real estate — 158 164 322 312,907 313,229 — Residential real estate 477 — 192 669 68,981 69,650 — Consumer: Consumer - home equity — — 127 127 24,634 24,761 — Consumer - other 11 — — 11 3,200 3,211 — Total $ 488 $ 643 $ 706 $ 1,837 $ 480,476 $ 482,313 $ — (Amounts in thousands) 30-59 Days Past Due 60-89 Days Past Due 90 Days Or Greater Total Current Total Loans Recorded Investment 90 Days and Accruing December 31, 2018 Commercial $ 14 $ — $ 1,291 $ 1,305 $ 111,135 $ 112,440 $ — Commercial real estate — — 167 167 303,637 303,804 — Residential real estate 36 182 257 475 69,370 69,845 — Consumer: Consumer - home equity — 141 25 166 24,910 25,076 — Consumer - other 17 — — 17 3,210 3,227 — Total $ 67 $ 323 $ 1,740 $ 2,130 $ 512,262 $ 514,392 $ — |
Recorded Investment, Unpaid Principal Balances, Average Recorded Investments and Interest Recognized on Impaired Loans, Excluding Homogenous Loans for Which Impaired Analyses are Not Necessarily Performed | The following table presents the recorded investment and unpaid principal balances for impaired loans, excluding homogenous loans for which impaired analyses are not necessarily performed, with the associated allowance amount, if applicable, at March 31, 2019 and December 31, 2018. Also presented are the average recorded investments in the impaired balances and interest income recognized after impairment for the three months ended March 31, 2019 and 2018. (Amounts in thousands) Recorded Investment Unpaid Principal Balance Related Allowance March 31, 2019 With no related allowance recorded: Commercial $ 4,226 $ 5,239 $ — Commercial real estate 3,220 3,220 — With an allowance recorded: Commercial 999 999 579 Commercial real estate — — — Total: Commercial $ 5,225 $ 6,238 $ 579 Commercial real estate $ 3,220 $ 3,220 $ — (Amounts in thousands) Recorded Investment Unpaid Principal Balance Related Allowance December 31, 2018 With no related allowance recorded: Commercial $ 5,364 $ 6,411 $ — Commercial real estate 4,340 4,340 — With an allowance recorded: Commercial — — — Commercial real estate — — — Total: Commercial $ 5,364 $ 6,411 $ — Commercial real estate $ 4,340 $ 4,340 $ — (Amounts in thousands) Three Months Ended Average Recorded Investment Interest Income Recognized March 31, 2019 With no related allowance recorded: Commercial $ 4,952 $ 148 Commercial real estate 3,203 63 With an allowance recorded: Commercial 333 — Commercial real estate — — Total: Commercial $ 5,285 $ 148 Commercial real estate $ 3,203 $ 63 (Amounts in thousands) Three Months Ended Average Recorded Investment Interest Income Recognized March 31, 2018 With no related allowance recorded: Commercial $ 1,467 $ 3 Commercial real estate 4,540 108 With an allowance recorded: Commercial 3,643 46 Commercial real estate — — Total: Commercial $ 5,110 $ 49 Commercial real estate $ 4,540 $ 108 |
Earnings Per Share and Capita_2
Earnings Per Share and Capital Transactions (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Basic Earnings Per Common Share | Earnings per share is computed by dividing net income available to common shareholders by the weighted average number of shares of common outstanding stock, net of any treasury shares, during the period. Diluted earnings per share is calculated by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding, net of any treasury shares, after consideration of the potential dilutive effect of common stock equivalents, based upon the treasury stock method using an average market price for the period. The common stock equivalents are comprised of the restricted share awards. Three Months Ended March 31, 2019 2018 Net income (amounts in thousands) $ 2,105 $ 1,537 Weighted average common shares outstanding 4,326,734 4,393,449 Net effect of dilutive common share equivalents 9,507 8,327 Adjusted average shares outstanding-dilutive 4,336,241 4,401,776 Basic earnings per share $ 0.49 $ 0.35 Diluted earnings per share $ 0.49 $ 0.35 |
Commitments (Tables)
Commitments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Summary of Contractual Commitments | The following table is a summary of such contractual commitments: (Amounts in thousands) March 31, 2019 December 31, 2018 Commitments to extend credit: Fixed rate $ 32,489 $ 31,225 Variable rate 78,739 74,050 Standby letters of credit 3,560 3,455 |
Summary of Overdraft Protection | The following table is a summary of overdraft protection for the periods indicated: (Amounts in thousands) March 31, 2019 December 31, 2018 Overdraft protection available on depositors' accounts $ 8,542 $ 8,708 Balance of overdrafts included in loans 71 116 Average daily balance of overdrafts 119 104 Average daily balance of overdrafts as a percentage of available 1.39 % 1.19 % |
Summary of Information Regarding Derivatives | Summary information regarding these derivatives is presented below: (Amounts in thousands) Notional Amount Fair Value March 31, 2019 December 31, 2018 Interest Rate Paid Interest Rate Received March 31, 2019 December 31, 2018 Customer interest rate swap Maturing in 2020 $ 2,385 $ 2,410 1 Mo. Libor + Margin Fixed $ (19 ) $ (30 ) Maturing in 2025 4,838 4,930 1 Mo. Libor + Margin Fixed 33 (28 ) Maturing in 2026 1,915 1,946 1 Mo. Libor + Margin Fixed (34 ) (64 ) Maturing in 2027 13,683 13,790 1 Mo. Libor + Margin Fixed 207 (54 ) Maturing in 2028 6,314 6,395 1 Mo. Libor + Margin Fixed 379 268 Total $ 29,135 $ 29,471 $ 566 $ 92 Third party interest rate swap Maturing in 2020 $ 2,385 $ 2,410 Fixed 1 Mo. Libor + Margin $ 19 $ 30 Maturing in 2025 4,838 4,930 Fixed 1 Mo. Libor + Margin (33 ) 28 Maturing in 2026 1,915 1,946 Fixed 1 Mo. Libor + Margin 34 64 Maturing in 2027 13,683 13,790 Fixed 1 Mo. Libor + Margin (207 ) 54 Maturing in 2028 6,314 6,395 Fixed 1 Mo. Libor + Margin (379 ) (268 ) Total $ 29,135 $ 29,471 $ (566 ) $ (92 ) |
Schedule of Fair Values of Derivative Instruments | The following table presents the fair values of derivative instruments in the balance sheet: (Amounts in thousands) Assets Liabilities Balance Sheet Location Fair Value Balance Sheet Location Fair Value March 31, 2019 Interest rate derivatives Other assets $ 566 Other liabilities $ 566 December 31, 2018 Interest rate derivatives Other assets $ 92 Other liabilities $ 92 |
Fair Value of Assets and Liab_2
Fair Value of Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Assets Reported on Consolidated Balance Sheets on a Recurring Basis at their Fair Value | The following table presents the assets reported on the consolidated balance sheets, on a recurring basis, at their fair value as of March 31, 2019 and December 31, 2018 by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. (Amounts in thousands) Fair Value Measurements at March 31, 2019 Using Description March 31, 2019 Level 1 Level 2 Level 3 ASSETS U.S. Government agencies and corporations $ 9,227 $ — $ 9,227 $ — Obligations of states and political subdivisions 52,882 — 52,882 — U.S. Government-sponsored mortgage-backed securities 55,390 — 55,390 — U.S. Government-sponsored collateralized mortgage obligations 11,590 — 11,590 — U.S. Government-guaranteed small business administration pools 7,283 — 7,283 — Loans held for sale 2,321 2,321 — — Interest rate derivatives 566 — 566 — LIABILITIES Interest rate derivatives $ 566 $ — $ 566 $ — (Amounts in thousands) Fair Value Measurements at December 31, 2018 Using Description December 31, 2018 Level 1 Level 2 Level 3 ASSETS U.S. Government agencies and corporations $ 9,002 $ — $ 9,002 $ — Obligations of states and political subdivisions 51,658 — 51,658 — U.S. Government-sponsored mortgage-backed securities 56,587 — 56,587 — U.S. Government-sponsored collateralized mortgage obligations 11,976 — 11,976 — U.S. Government-guaranteed small business administration pools 7,700 — 7,700 — Loans held for sale 1,040 1,040 — — Interest rate derivatives 92 — 92 — LIABILITIES Interest rate derivatives $ 92 $ — $ 92 $ — |
Changes in the Level 3 Fair Value Category | The following tables present the changes in the Level 3 fair value category for the three months ended March 31, 2019 and 2018. The Company classifies financial instruments in Level 3 of the fair-value hierarchy when there is reliance on at least one significant unobservable input to the valuation model. In addition to these unobservable inputs, the valuation models for Level 3 financial instruments typically also rely on a number of inputs that are readily observable either directly or indirectly. (Amounts in thousands) Three Months Ended March 31, 2019 2018 Trust preferred securities Trust preferred securities Beginning balance $ — $ 895 Net realized/unrealized losses included in: Noninterest income — — Other comprehensive income (loss) — 195 Discount accretion (premium amortization) — — Sales — — Purchases, issuance, and settlements — — Ending balance $ — $ 1,090 Losses included in net income for the period relating to assets held at period end $ — $ — |
Trust Preferred Security with OTTI, its Credit Rating at Period End and Related Losses Recognized in Earnings | The following table details the one debt security with other-than-temporary impairment, its credit ratings at March 31, 2018 and the related losses recognized in earnings: (Amounts in thousands) Moody’s/Fitch Rating Amount of OTTI related to credit loss at January 1, 2018 Additions in QTD March 31, 2018 Amount of OTTI related to credit loss at March 31, 2018 Trapeza IX B-1 Caa2/CC $ 140 $ — $ 140 Total $ 140 $ — $ 140 |
Carrying Amounts and Fair Values of the Company's Financial Instruments | The carrying amounts and fair values of the Company’s financial instruments are as follows: (Amounts in thousands) March 31, 2019 Carrying Amount Level 1 Level 2 Level 3 Fair Value ASSETS: Cash and cash equivalents $ 19,986 $ 19,986 $ — $ — $ 19,986 Investment securities available-for-sale 136,372 — 136,372 — 136,372 Loans held for sale 2,321 2,321 — — 2,321 Loans 477,973 — — 482,589 482,589 Bank-owned life insurance 15,439 15,439 — — 15,439 Accrued interest receivable 2,346 2,346 — — 2,346 Interest rate derivatives 566 — 566 — 566 LIABILITIES: Demand, savings and money market deposits $ 432,653 $ 432,653 $ — $ — $ 432,653 Time deposits 138,923 — — 139,953 139,953 Securities sold under agreements to repurchase 1,638 1,638 — — 1,638 Federal Home Loan Bank advances - short term 9,000 — — 8,991 8,991 Federal Home Loan Bank advances - long term 18,000 — — 17,941 17,941 Subordinated debt 5,155 — — 4,692 4,692 Accrued interest payable 483 483 — — 483 Interest rate derivatives 566 — 566 — 566 (Amounts in thousands) December 31, 2018 Carrying Amount Level 1 Level 2 Level 3 Fair Value ASSETS: Cash and cash equivalents $ 19,692 $ 19,692 $ — $ — $ 19,692 Investment securities available-for-sale 136,923 — 136,923 — 136,923 Loans held for sale 1,040 1,040 — — 1,040 Loans 510,194 — — 513,103 513,103 Bank-owned life insurance 15,711 15,711 — — 15,711 Accrued interest receivable 2,255 2,255 — — 2,255 Interest rate derivatives 92 — 92 — 92 LIABILITIES: Demand, savings and money market deposits $ 483,054 $ 483,054 $ — $ — $ 483,054 Time deposits 121,365 — — 122,295 122,295 Short term borrowings 2,206 2,206 — — 2,206 Federal Home Loan Bank advances - short term 12,000 — — 11,987 11,987 Federal Home Loan Bank advances - long term 16,000 — — 15,880 15,880 Subordinated debt 5,155 — — 4,620 4,620 Accrued interest payable 371 371 — — 371 Interest rate derivatives 92 — 92 — 92 |
Significant Unobservable Inputs for Assets and Liabilities Measured at Fair Value on a Recurring and Nonrecurring Basis | The following table presents quantitative information about the Level 3 significant inputs for assets and liabilities measured at fair value on a recurring and nonrecurring basis at March, 31 2019. There were no such Level 3 measurements at 12/31/18. (Amounts in thousands) Fair value at March 31, 2019 Valuation Technique Significant Unobservable Input Range of Inputs Impaired loans $ 420 Appraisal of Collateral Appraisal Adjustments (76)% Liquidation Expenses (10)% |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Loss | The following table presents the changes in accumulated other comprehensive loss by component net of tax for the three months ended March 31, 2019 and 2018: (Amounts in thousands) Three Months Ended March 31, 2019 2018 Unrealized gains (losses) on available- for-sale securities (a) Change in pension and postretirement obligations (a) Unrealized losses on available- for-sale securities (a) Change in pension and postretirement obligations (a) Beginning balance $ (3,686 ) $ 30 $ (1,787 ) $ (38 ) Other comprehensive income (loss) before reclassification 1,871 7 (2,341 ) (8 ) Amount reclassified from accumulated other comprehensive loss — — (16 ) — Total other comprehensive income (loss) 1,871 7 (2,357 ) (8 ) Ending balance $ (1,815 ) $ 37 $ (4,144 ) $ (46 ) (a) All amounts are net of tax. Amounts in parentheses indicate debits. |
Schedule of Reclassifications out of Each Component of Accumulated Other Comprehensive Income (Loss) | The following table presents significant amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three months ended March 31, 2019 and 2018: (Amounts in thousands) Three Months Ended March 31, 2019 2018 Amount reclassified from accumulated other comprehensive income (a) Amount reclassified from accumulated other comprehensive loss (a) Affected line item in the statement where net income is presented Details about other comprehensive income or loss: Unrealized gains on available- for-sale securities $ — $ 20 Investment securities available-for-sale gains, net — (4 ) Federal income tax expense $ — $ 16 (a) Amounts in parentheses indicate debits to net income. |
Post-Retirement Obligations (Ta
Post-Retirement Obligations (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
Changes in Accumulated Liability | The following table presents the changes in the accumulated liability: (Amounts in thousands) Three Months Ended March 31, 2019 2018 Beginning balance $ 831 $ 876 Expense recorded (1 ) 6 Other comprehensive loss (income) recorded (7 ) 8 Ending balance $ 823 $ 890 |
Securities Sold Under Agreeme_2
Securities Sold Under Agreements to Repurchase (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Additional Detail Regarding Repurchase Agreements | The following table provides additional detail regarding repurchase agreements: (Amounts in thousands) Repurchase Agreements (Sweep) Accounted for as Secured Borrowings At March 31, 2019 At December 31, 2018 Remaining Contractual Maturity of the Agreements Overnight and Continuous Overnight and Continuous Repurchase agreements: U.S. Government-sponsored mortgage-backed securities $ 3,058 $ 3,066 Total collateral carrying value $ 3,058 $ 3,066 Total repurchase agreements $ 1,638 $ 2,206 |
Equity Compensation (Tables)
Equity Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Nonvested Restricted Stock Units Activity | The following is the activity under the two plans during the three months ended March 31, 2019: Shares Weighted Average Grant Date Fair Value Nonvested at January 1, 2019 23,591 $ 19.67 Granted — — Vested (3,794 ) 18.25 Forfeited — — Nonvested at March 31, 2019 19,797 $ 19.94 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Summary of Other Information Related To Operating Leases | The following table summarizes other information related to our operating leases: March 31, 2019 Weighted-average remaining lease term-operating leases in years 15.72 Weighted-average discount rate - operating leases 3.06 % |
Schedule of Aggregate Lease Maturities And Obligations | The following table presents aggregate lease maturities and obligations as of March 31, 2019: (Amounts in thousands) March 31, 2019 2019 $ 186 2020 231 2021 154 2022 154 2023 156 2024 and thereafter 1,641 Total lease payments 2,522 Less: interest 507 Present value of lease liabilities $ 2,015 |
Authoritative Accounting Guid_3
Authoritative Accounting Guidance (Details Textual) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Operating lease right-of-use asset | $ 2,000 | |
Operating lease liability | $ 2,015 | |
ASU 2016-02 | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Operating lease right-of-use asset | $ 2,100 | |
Operating lease liability | $ 2,100 |
Investment Securities (Details)
Investment Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Summary of investment securities | ||
Available-for-sale Securities and Regulatory Stock, Amortized Cost | $ 138,669 | $ 141,589 |
Available-for-sale Securities and Regulatory Stock, Gross Unrealized Gains | 365 | 78 |
Available-for-sale Securities and Regulatory Stock, Gross Unrealized Losses | 2,662 | 4,744 |
Available-for-sale securities and Regulatory Stock, Fair Value | 136,372 | 136,923 |
U.S. Government agencies and corporations | ||
Summary of investment securities | ||
Available-for-sale Securities and Regulatory Stock, Amortized Cost | 9,246 | 9,242 |
Available-for-sale Securities and Regulatory Stock, Gross Unrealized Gains | 63 | 11 |
Available-for-sale Securities and Regulatory Stock, Gross Unrealized Losses | 82 | 251 |
Available-for-sale securities and Regulatory Stock, Fair Value | 9,227 | 9,002 |
Obligations of states and political subdivisions | ||
Summary of investment securities | ||
Available-for-sale Securities and Regulatory Stock, Amortized Cost | 53,085 | 53,187 |
Available-for-sale Securities and Regulatory Stock, Gross Unrealized Gains | 237 | 26 |
Available-for-sale Securities and Regulatory Stock, Gross Unrealized Losses | 440 | 1,555 |
Available-for-sale securities and Regulatory Stock, Fair Value | 52,882 | 51,658 |
U.S. Government-sponsored mortgage-backed securities | ||
Summary of investment securities | ||
Available-for-sale Securities and Regulatory Stock, Amortized Cost | 57,147 | 59,070 |
Available-for-sale Securities and Regulatory Stock, Gross Unrealized Gains | 7 | |
Available-for-sale Securities and Regulatory Stock, Gross Unrealized Losses | 1,764 | 2,483 |
Available-for-sale securities and Regulatory Stock, Fair Value | 55,390 | 56,587 |
U.S. Government-sponsored collateralized mortgage obligations | ||
Summary of investment securities | ||
Available-for-sale Securities and Regulatory Stock, Amortized Cost | 11,660 | 12,112 |
Available-for-sale Securities and Regulatory Stock, Gross Unrealized Gains | 58 | 41 |
Available-for-sale Securities and Regulatory Stock, Gross Unrealized Losses | 128 | 177 |
Available-for-sale securities and Regulatory Stock, Fair Value | 11,590 | 11,976 |
U.S. Government-guaranteed small business administration pools | ||
Summary of investment securities | ||
Available-for-sale Securities and Regulatory Stock, Amortized Cost | 7,531 | 7,978 |
Available-for-sale Securities and Regulatory Stock, Gross Unrealized Losses | 248 | 278 |
Available-for-sale securities and Regulatory Stock, Fair Value | 7,283 | 7,700 |
Federal Home Loan Bank (FHLB) stock | ||
Summary of investment securities | ||
Available-for-sale Securities and Regulatory Stock, Amortized Cost | 2,355 | 2,355 |
Available-for-sale securities and Regulatory Stock, Fair Value | 2,355 | 2,355 |
Federal Reserve Bank (FRB) stock | ||
Summary of investment securities | ||
Available-for-sale Securities and Regulatory Stock, Amortized Cost | 226 | 226 |
Available-for-sale securities and Regulatory Stock, Fair Value | 226 | 226 |
Total regulatory stock | ||
Summary of investment securities | ||
Available-for-sale Securities and Regulatory Stock, Amortized Cost | 2,581 | 2,581 |
Available-for-sale securities and Regulatory Stock, Fair Value | $ 2,581 | $ 2,581 |
Investment Securities (Details
Investment Securities (Details 1) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Amortized cost and fair value of debt securities by contractual maturity | ||
Amortized Cost, Due after one year through five years | $ 482 | |
Amortized Cost, Due after five years through ten years | 12,158 | |
Amortized Cost, Due after ten years | 57,222 | |
Amortized Cost, Total | 69,862 | |
Total investment securities available for sale, Amortized Cost | 138,669 | $ 141,589 |
Fair Value, Due after one year through five years | 488 | |
Fair Value, Due after five years through ten years | 12,065 | |
Fair Value, Due after ten years | 56,839 | |
Fair Value, Total | 69,392 | |
Total investment securities available for sale, Fair Value | 136,372 | $ 136,923 |
U.S. Government-sponsored mortgage-backed and related securities | ||
Amortized cost and fair value of debt securities by contractual maturity | ||
Total investment securities available for sale, Amortized Cost | 68,807 | |
Total investment securities available for sale, Fair Value | $ 66,980 |
Investment Securities (Detail_2
Investment Securities (Details 2) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Proceeds, gains and losses realized on securities sold or called | |
Proceeds on securities sold | $ 19,841 |
Gross realized gains | 123 |
Gross realized losses | $ 103 |
Investment Securities (Detail_3
Investment Securities (Details Textual) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019USD ($)Security | Dec. 31, 2018USD ($)Security | |
Investments Debt And Equity Securities [Abstract] | ||
Carrying value of investment securities for pledge | $ | $ 58.9 | $ 55.1 |
Investment securities with fair value less than amortized cost | Security | 92 | 121 |
Investment Securities (Detail_4
Investment Securities (Details 3) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value | ||
Fair Value, Less than 12 Months | $ 1,844 | $ 28,494 |
Fair Value, 12 Months or More | 97,516 | 95,401 |
Fair Value, Total | 99,360 | 123,895 |
Unrealized Losses | ||
Unrealized Losses, Less than 12 Months | 2 | 591 |
Unrealized Losses, 12 Months or More | 2,660 | 4,153 |
Unrealized Losses, Total | 2,662 | 4,744 |
U.S. Government agencies and corporations | ||
Fair Value | ||
Fair Value, Less than 12 Months | 3,280 | |
Fair Value, 12 Months or More | 3,264 | 2,755 |
Fair Value, Total | 3,264 | 6,035 |
Unrealized Losses | ||
Unrealized Losses, Less than 12 Months | 6 | |
Unrealized Losses, 12 Months or More | 82 | 245 |
Unrealized Losses, Total | 82 | 251 |
Obligations of states and political subdivisions | ||
Fair Value | ||
Fair Value, Less than 12 Months | 23,616 | |
Fair Value, 12 Months or More | 27,998 | 24,607 |
Fair Value, Total | 27,998 | 48,223 |
Unrealized Losses | ||
Unrealized Losses, Less than 12 Months | 567 | |
Unrealized Losses, 12 Months or More | 440 | 988 |
Unrealized Losses, Total | 440 | 1,555 |
U.S. Government-sponsored mortgage-backed securities | ||
Fair Value | ||
Fair Value, Less than 12 Months | 1,598 | |
Fair Value, 12 Months or More | 53,774 | 54,989 |
Fair Value, Total | 53,774 | 56,587 |
Unrealized Losses | ||
Unrealized Losses, Less than 12 Months | 18 | |
Unrealized Losses, 12 Months or More | 1,764 | 2,465 |
Unrealized Losses, Total | 1,764 | 2,483 |
U.S. Government-sponsored collateralized mortgage obligations | ||
Fair Value | ||
Fair Value, Less than 12 Months | 1,844 | |
Fair Value, 12 Months or More | 5,197 | 5,350 |
Fair Value, Total | 7,041 | 5,350 |
Unrealized Losses | ||
Unrealized Losses, Less than 12 Months | 2 | |
Unrealized Losses, 12 Months or More | 126 | 177 |
Unrealized Losses, Total | 128 | 177 |
U.S. Government-guaranteed small business administration pools | ||
Fair Value | ||
Fair Value, 12 Months or More | 7,283 | 7,700 |
Fair Value, Total | 7,283 | 7,700 |
Unrealized Losses | ||
Unrealized Losses, 12 Months or More | 248 | 278 |
Unrealized Losses, Total | $ 248 | $ 278 |
Loans and Allowance for Loan _3
Loans and Allowance for Loan Losses (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Composition of the loan portfolio | ||
Total loans | $ 482,313 | $ 514,392 |
Commercial | ||
Composition of the loan portfolio | ||
Total loans | $ 71,462 | $ 112,440 |
Percentage of loans | 14.80% | 21.90% |
Commercial real estate | ||
Composition of the loan portfolio | ||
Total loans | $ 313,229 | $ 303,804 |
Percentage of loans | 65.00% | 59.00% |
Residential real estate | ||
Composition of the loan portfolio | ||
Total loans | $ 69,650 | $ 69,845 |
Percentage of loans | 14.40% | 13.60% |
Consumer | Home equity | ||
Composition of the loan portfolio | ||
Total loans | $ 24,761 | $ 25,076 |
Percentage of loans | 5.10% | 4.90% |
Consumer | Other | ||
Composition of the loan portfolio | ||
Total loans | $ 3,211 | $ 3,227 |
Percentage of loans | 0.70% | 0.60% |
Loans and Allowance for Loan _4
Loans and Allowance for Loan Losses (Details 1) | 3 Months Ended |
Mar. 31, 2019 | |
Factor Considered: | |
Levels of and trends in charge-offs, classifications and non-accruals | Stable |
Trends in volume and terms | Stable |
Changes in lending policies and procedures | Stable |
Experience, depth and ability of management, including loan review function | Stable |
Economic trends, including valuation of underlying collateral | Stable |
Concentrations of credit | Decreasing |
Loans and Allowance for Loan _5
Loans and Allowance for Loan Losses (Details 2) | 3 Months Ended |
Mar. 31, 2019 | |
Factor Considered: | |
Levels and trends in classification | Stable |
Declining trends in financial performance | Stable |
Structure and lack of performance measures | Stable |
Migration between risk categories | Stable |
Loans and Allowance for Loan _6
Loans and Allowance for Loan Losses (Details 3) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Analysis of changes in the allowance for loan losses | ||
Balance at beginning of period | $ 4,198 | $ 4,578 |
Loan charge-offs | (87) | (1,213) |
Recoveries | 54 | 19 |
Net loan recoveries (charge-offs) | (33) | (1,194) |
Provision charged to operations | 175 | 500 |
Balance at end of period | 4,340 | 3,884 |
Commercial | ||
Analysis of changes in the allowance for loan losses | ||
Balance at beginning of period | 1,232 | 1,591 |
Loan charge-offs | (1,163) | |
Recoveries | 28 | |
Net loan recoveries (charge-offs) | 28 | (1,163) |
Provision charged to operations | 318 | 906 |
Balance at end of period | 1,578 | 1,334 |
Commercial real estate | ||
Analysis of changes in the allowance for loan losses | ||
Balance at beginning of period | 2,414 | 2,702 |
Provision charged to operations | (213) | (412) |
Balance at end of period | 2,201 | 2,290 |
Residential real estate | ||
Analysis of changes in the allowance for loan losses | ||
Balance at beginning of period | 314 | 117 |
Loan charge-offs | (29) | |
Net loan recoveries (charge-offs) | (29) | |
Provision charged to operations | 35 | (24) |
Balance at end of period | 320 | 93 |
Consumer | Home equity | ||
Analysis of changes in the allowance for loan losses | ||
Balance at beginning of period | 115 | 70 |
Recoveries | 3 | |
Net loan recoveries (charge-offs) | 3 | |
Provision charged to operations | (1) | (6) |
Balance at end of period | 114 | 67 |
Consumer | Other | ||
Analysis of changes in the allowance for loan losses | ||
Balance at beginning of period | 123 | 98 |
Loan charge-offs | (58) | (50) |
Recoveries | 26 | 16 |
Net loan recoveries (charge-offs) | (32) | (34) |
Provision charged to operations | 36 | 36 |
Balance at end of period | $ 127 | $ 100 |
Loans and Allowance for Loan _7
Loans and Allowance for Loan Losses (Details 4) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Ending allowance balance attributable to loans: | ||||
Individually evaluated for impairment | $ 579 | |||
Collectively evaluated for impairment | 3,761 | $ 4,198 | ||
Total ending allowance balance | 4,340 | 4,198 | $ 3,884 | $ 4,578 |
Loan Portfolio: | ||||
Individually evaluated for impairment | 8,445 | 9,704 | ||
Collectively evaluated for impairment | 473,868 | 504,688 | ||
Total ending loans balance | 482,313 | 514,392 | ||
Commercial | ||||
Ending allowance balance attributable to loans: | ||||
Individually evaluated for impairment | 579 | |||
Collectively evaluated for impairment | 999 | 1,232 | ||
Total ending allowance balance | 1,578 | 1,232 | 1,334 | 1,591 |
Loan Portfolio: | ||||
Individually evaluated for impairment | 5,225 | 5,364 | ||
Collectively evaluated for impairment | 66,237 | 107,076 | ||
Total ending loans balance | 71,462 | 112,440 | ||
Commercial real estate | ||||
Ending allowance balance attributable to loans: | ||||
Collectively evaluated for impairment | 2,201 | 2,414 | ||
Total ending allowance balance | 2,201 | 2,414 | 2,290 | 2,702 |
Loan Portfolio: | ||||
Individually evaluated for impairment | 3,220 | 4,340 | ||
Collectively evaluated for impairment | 310,009 | 299,464 | ||
Total ending loans balance | 313,229 | 303,804 | ||
Residential real estate | ||||
Ending allowance balance attributable to loans: | ||||
Collectively evaluated for impairment | 320 | 314 | ||
Total ending allowance balance | 320 | 314 | 93 | 117 |
Loan Portfolio: | ||||
Collectively evaluated for impairment | 69,650 | 69,845 | ||
Total ending loans balance | 69,650 | 69,845 | ||
Consumer | Home equity | ||||
Ending allowance balance attributable to loans: | ||||
Collectively evaluated for impairment | 114 | 115 | ||
Total ending allowance balance | 114 | 115 | 67 | 70 |
Loan Portfolio: | ||||
Collectively evaluated for impairment | 24,761 | 25,076 | ||
Total ending loans balance | 24,761 | 25,076 | ||
Consumer | Other | ||||
Ending allowance balance attributable to loans: | ||||
Collectively evaluated for impairment | 127 | 123 | ||
Total ending allowance balance | 127 | 123 | $ 100 | $ 98 |
Loan Portfolio: | ||||
Collectively evaluated for impairment | 3,211 | 3,227 | ||
Total ending loans balance | $ 3,211 | $ 3,227 |
Loans and Allowance for Loan _8
Loans and Allowance for Loan Losses (Details Textual) | 3 Months Ended | ||
Mar. 31, 2019USD ($)LoanBorrower | Mar. 31, 2018Contract | Dec. 31, 2017USD ($) | |
Accounts Notes And Loans Receivable [Line Items] | |||
Reserve previously allocated to loans | $ 625,000 | ||
Period after which loans considered nonperforming | 90 days | ||
Number of loans modified as TDRs | 0 | 7 | |
Number of commercial loan borrowers | Borrower | 1 | ||
Commercial | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Decrease in commercial loan balances | $ 40,900,000 | ||
Financing receivables, maturity | First quarter of 2018 | ||
Charge off amount recorded as loan discount | $ 1,100,000 | ||
Number of loans modified as TDRs | Contract | 7 |
Loans and Allowance for Loan _9
Loans and Allowance for Loan Losses (Details 5) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Summary of credit quality indicators by internally assigned grade | ||
Total loans | $ 482,313 | $ 514,392 |
Commercial | ||
Summary of credit quality indicators by internally assigned grade | ||
Total loans | 71,462 | 112,440 |
Commercial | Pass | ||
Summary of credit quality indicators by internally assigned grade | ||
Total loans | 53,379 | 94,316 |
Commercial | Special Mention | ||
Summary of credit quality indicators by internally assigned grade | ||
Total loans | 7,445 | 6,914 |
Commercial | Substandard | ||
Summary of credit quality indicators by internally assigned grade | ||
Total loans | 10,638 | 11,210 |
Commercial real estate | ||
Summary of credit quality indicators by internally assigned grade | ||
Total loans | 313,229 | 303,804 |
Commercial real estate | Pass | ||
Summary of credit quality indicators by internally assigned grade | ||
Total loans | 283,801 | 271,370 |
Commercial real estate | Special Mention | ||
Summary of credit quality indicators by internally assigned grade | ||
Total loans | 25,211 | 25,199 |
Commercial real estate | Substandard | ||
Summary of credit quality indicators by internally assigned grade | ||
Total loans | $ 4,217 | $ 7,235 |
Loans and Allowance for Loan_10
Loans and Allowance for Loan Losses (Details 6) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Summary of consumer credit exposure | ||
Total loans | $ 482,313 | $ 514,392 |
Residential real estate | ||
Summary of consumer credit exposure | ||
Total loans | 69,650 | 69,845 |
Consumer | Home equity | ||
Summary of consumer credit exposure | ||
Total loans | 24,761 | 25,076 |
Consumer | Other | ||
Summary of consumer credit exposure | ||
Total loans | 3,211 | 3,227 |
Performing | Residential real estate | ||
Summary of consumer credit exposure | ||
Total loans | 69,442 | 69,535 |
Performing | Consumer | Home equity | ||
Summary of consumer credit exposure | ||
Total loans | 24,634 | 24,956 |
Performing | Consumer | Other | ||
Summary of consumer credit exposure | ||
Total loans | 3,211 | 3,227 |
Nonperforming | Residential real estate | ||
Summary of consumer credit exposure | ||
Total loans | 208 | 310 |
Nonperforming | Consumer | Home equity | ||
Summary of consumer credit exposure | ||
Total loans | $ 127 | $ 120 |
Loans and Allowance for Loan_11
Loans and Allowance for Loan Losses (Details 7) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Summary of classes of loans on non-accrual status | ||
Total | $ 2,058 | $ 2,233 |
Commercial | ||
Summary of classes of loans on non-accrual status | ||
Total | 1,222 | 1,291 |
Commercial real estate | ||
Summary of classes of loans on non-accrual status | ||
Total | 501 | 512 |
Residential real estate | ||
Summary of classes of loans on non-accrual status | ||
Total | 208 | 310 |
Consumer | Home equity | ||
Summary of classes of loans on non-accrual status | ||
Total | $ 127 | $ 120 |
Loans and Allowance for Loan_12
Loans and Allowance for Loan Losses (Details 8) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019Loan | Mar. 31, 2018USD ($)Contract | |
Information related to loans modified in a TDR | ||
Number of contracts | 0 | 7 |
Pre-modification recorded investment | $ 5,373 | |
Post-modification recorded investment | $ 4,210 | |
Commercial | ||
Information related to loans modified in a TDR | ||
Number of contracts | Contract | 7 | |
Pre-modification recorded investment | $ 5,373 | |
Post-modification recorded investment | $ 4,210 |
Loans and Allowance for Loan_13
Loans and Allowance for Loan Losses (Details 9) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Aging analysis of the recorded investment of past due loans | ||
Total Past Due | $ 1,837 | $ 2,130 |
Current | 480,476 | 512,262 |
Total ending loans balance | 482,313 | 514,392 |
30-59 Days Past Due | ||
Aging analysis of the recorded investment of past due loans | ||
Total Past Due | 488 | 67 |
60-89 Days Past Due | ||
Aging analysis of the recorded investment of past due loans | ||
Total Past Due | 643 | 323 |
90 Days Or Greater | ||
Aging analysis of the recorded investment of past due loans | ||
Total Past Due | 706 | 1,740 |
Commercial | ||
Aging analysis of the recorded investment of past due loans | ||
Total Past Due | 708 | 1,305 |
Current | 70,754 | 111,135 |
Total ending loans balance | 71,462 | 112,440 |
Commercial | 30-59 Days Past Due | ||
Aging analysis of the recorded investment of past due loans | ||
Total Past Due | 14 | |
Commercial | 60-89 Days Past Due | ||
Aging analysis of the recorded investment of past due loans | ||
Total Past Due | 485 | |
Commercial | 90 Days Or Greater | ||
Aging analysis of the recorded investment of past due loans | ||
Total Past Due | 223 | 1,291 |
Commercial real estate | ||
Aging analysis of the recorded investment of past due loans | ||
Total Past Due | 322 | 167 |
Current | 312,907 | 303,637 |
Total ending loans balance | 313,229 | 303,804 |
Commercial real estate | 60-89 Days Past Due | ||
Aging analysis of the recorded investment of past due loans | ||
Total Past Due | 158 | |
Commercial real estate | 90 Days Or Greater | ||
Aging analysis of the recorded investment of past due loans | ||
Total Past Due | 164 | 167 |
Residential real estate | ||
Aging analysis of the recorded investment of past due loans | ||
Total Past Due | 669 | 475 |
Current | 68,981 | 69,370 |
Total ending loans balance | 69,650 | 69,845 |
Residential real estate | 30-59 Days Past Due | ||
Aging analysis of the recorded investment of past due loans | ||
Total Past Due | 477 | 36 |
Residential real estate | 60-89 Days Past Due | ||
Aging analysis of the recorded investment of past due loans | ||
Total Past Due | 182 | |
Residential real estate | 90 Days Or Greater | ||
Aging analysis of the recorded investment of past due loans | ||
Total Past Due | 192 | 257 |
Consumer | Home equity | ||
Aging analysis of the recorded investment of past due loans | ||
Total Past Due | 127 | 166 |
Current | 24,634 | 24,910 |
Total ending loans balance | 24,761 | 25,076 |
Consumer | Home equity | 60-89 Days Past Due | ||
Aging analysis of the recorded investment of past due loans | ||
Total Past Due | 141 | |
Consumer | Home equity | 90 Days Or Greater | ||
Aging analysis of the recorded investment of past due loans | ||
Total Past Due | 127 | 25 |
Consumer | Other | ||
Aging analysis of the recorded investment of past due loans | ||
Total Past Due | 11 | 17 |
Current | 3,200 | 3,210 |
Total ending loans balance | 3,211 | 3,227 |
Consumer | Other | 30-59 Days Past Due | ||
Aging analysis of the recorded investment of past due loans | ||
Total Past Due | $ 11 | $ 17 |
Loans and Allowance for Loan_14
Loans and Allowance for Loan Losses (Details 10) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Commercial | |||
Loans evaluated for impairment by loan segment | |||
Recorded Investment, With no related allowance recorded | $ 4,226 | $ 5,364 | |
Recorded Investment, With related allowance recorded | 999 | ||
Recorded Investment, Total | 5,225 | 5,364 | |
Unpaid Principal Balance, with no related allowance | 5,239 | 6,411 | |
Unpaid Principal Balance, with related allowance | 999 | ||
Unpaid Principal Balance, Total | 6,238 | 6,411 | |
Related Allowance, with related allowance | 579 | ||
Related Allowance, Total | 579 | ||
Average Recorded Investment, with no related allowance recorded | 4,952 | $ 1,467 | |
Average Recorded Investment, with related allowance recorded | 333 | 3,643 | |
Average Recorded Investment, Total | 5,285 | 5,110 | |
Interest Income Recognized, with no related allowance | 148 | 3 | |
Interest Income Recognized, with related allowance | 46 | ||
Interest Income Recognized, Total | 148 | 49 | |
Commercial real estate | |||
Loans evaluated for impairment by loan segment | |||
Recorded Investment, With no related allowance recorded | 3,220 | 4,340 | |
Recorded Investment, Total | 3,220 | 4,340 | |
Unpaid Principal Balance, with no related allowance | 3,220 | 4,340 | |
Unpaid Principal Balance, Total | 3,220 | $ 4,340 | |
Average Recorded Investment, with no related allowance recorded | 3,203 | 4,540 | |
Average Recorded Investment, Total | 3,203 | 4,540 | |
Interest Income Recognized, with no related allowance | 63 | 108 | |
Interest Income Recognized, Total | $ 63 | $ 108 |
Earnings Per Share and Capita_3
Earnings Per Share and Capital Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Computation of basic earnings per common share | ||
Net income | $ 2,105 | $ 1,537 |
Weighted average common shares outstanding | 4,326,734 | 4,393,449 |
Net effect of dilutive common share equivalents | 9,507 | 8,327 |
Adjusted average shares outstanding-dilutive | 4,336,241 | 4,401,776 |
Basic earnings per share | $ 0.49 | $ 0.35 |
Diluted earnings per share | $ 0.49 | $ 0.35 |
Subordinated Debt (Details Text
Subordinated Debt (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | |
Jul. 31, 2007 | Mar. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | |||
Floating rate trust preferred securities issued | $ 5,000,000 | ||
Maturity date of floating rate trust preferred securities | 2037-12 | ||
Investment in common securities issued by trust | $ 155,000 | ||
Subordinated Debt | |||
Debt Instrument [Line Items] | |||
Interest rate description | 3-month LIBOR rate plus 1.45% | ||
LIBOR Rate Points | 1.45% | ||
Interest rate | 4.06% | 4.24% |
Commitments (Details)
Commitments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Commitments to extend credit: | ||
Fixed rate | $ 32,489 | $ 31,225 |
Variable rate | 78,739 | 74,050 |
Standby letters of credit | $ 3,560 | $ 3,455 |
Commitments (Details 1)
Commitments (Details 1) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Summary of overdraft protection | ||
Overdraft protection available on depositors' accounts | $ 8,542 | $ 8,708 |
Balance of overdrafts included in loans | 71 | 116 |
Average daily balance of overdrafts | $ 119 | $ 104 |
Average daily balance of overdrafts as a percentage of available | 1.39% | 1.19% |
Commitments (Details Textual)
Commitments (Details Textual) - Third party interest rate swap $ in Millions | Mar. 31, 2019USD ($)Security | Dec. 31, 2018USD ($)Security |
Commitments (Textual) [Abstract] | ||
Security pledged for collateral | $ | $ 1.6 | $ 1.4 |
U.S. Government-sponsored mortgage-backed securities | ||
Commitments (Textual) [Abstract] | ||
Number of security owned and pledged as collateral | Security | 1 | 1 |
Commitments (Details 2)
Commitments (Details 2) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Customer interest rate swap, Maturing in 2020 | ||
Derivative [Line Items] | ||
Maturity | 2020 | |
Notional Amount | $ 2,385,000 | $ 2,410,000 |
Interest Rate Paid | 1 Mo. Libor + Margin | |
Interest Rate Received | Fixed | |
Fair Value | $ (19,000) | (30,000) |
Customer interest rate swap, Maturing in 2025 | ||
Derivative [Line Items] | ||
Maturity | 2025 | |
Notional Amount | $ 4,838,000 | 4,930,000 |
Interest Rate Paid | 1 Mo. Libor + Margin | |
Interest Rate Received | Fixed | |
Fair Value | $ 33,000 | (28,000) |
Customer interest rate swap, Maturing in 2026 | ||
Derivative [Line Items] | ||
Maturity | 2026 | |
Notional Amount | $ 1,915,000 | 1,946,000 |
Interest Rate Paid | 1 Mo. Libor + Margin | |
Interest Rate Received | Fixed | |
Fair Value | $ (34,000) | (64,000) |
Customer interest rate swap, Maturing in 2027 | ||
Derivative [Line Items] | ||
Maturity | 2027 | |
Notional Amount | $ 13,683,000 | 13,790,000 |
Interest Rate Paid | 1 Mo. Libor + Margin | |
Interest Rate Received | Fixed | |
Fair Value | $ 207,000 | (54,000) |
Customer interest rate swap, Maturing in 2028 | ||
Derivative [Line Items] | ||
Maturity | 2028 | |
Notional Amount | $ 6,314,000 | 6,395,000 |
Interest Rate Paid | 1 Mo. Libor + Margin | |
Interest Rate Received | Fixed | |
Fair Value | $ 379,000 | 268,000 |
Customer interest rate swap | ||
Derivative [Line Items] | ||
Notional Amount | 29,135,000 | 29,471,000 |
Fair Value | $ 566,000 | 92,000 |
Third party interest rate swap, Maturing in 2020 | ||
Derivative [Line Items] | ||
Maturity | 2020 | |
Notional Amount | $ 2,385,000 | 2,410,000 |
Interest Rate Paid | Fixed | |
Interest Rate Received | 1 Mo. Libor + Margin | |
Fair Value | $ 19,000 | 30,000 |
Third party interest rate swap, Maturing in 2025 | ||
Derivative [Line Items] | ||
Maturity | 2025 | |
Notional Amount | $ 4,838,000 | 4,930,000 |
Interest Rate Paid | Fixed | |
Interest Rate Received | 1 Mo. Libor + Margin | |
Fair Value | $ (33,000) | 28,000 |
Third party interest rate swap, Maturing in 2026 | ||
Derivative [Line Items] | ||
Maturity | 2026 | |
Notional Amount | $ 1,915,000 | 1,946,000 |
Interest Rate Paid | Fixed | |
Interest Rate Received | 1 Mo. Libor + Margin | |
Fair Value | $ 34,000 | 64,000 |
Third party interest rate swap, Maturing in 2027 | ||
Derivative [Line Items] | ||
Maturity | 2027 | |
Notional Amount | $ 13,683,000 | 13,790,000 |
Interest Rate Paid | Fixed | |
Interest Rate Received | 1 Mo. Libor + Margin | |
Fair Value | $ (207,000) | 54,000 |
Third party interest rate swap, Maturing in 2028 | ||
Derivative [Line Items] | ||
Maturity | 2028 | |
Notional Amount | $ 6,314,000 | 6,395,000 |
Interest Rate Paid | Fixed | |
Interest Rate Received | 1 Mo. Libor + Margin | |
Fair Value | $ (379,000) | (268,000) |
Third party interest rate swap | ||
Derivative [Line Items] | ||
Notional Amount | 29,135,000 | 29,471,000 |
Fair Value | $ (566,000) | $ (92,000) |
Commitments (Details 3)
Commitments (Details 3) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Derivatives Fair Value [Line Items] | ||
Assets, Fair Value | $ 566 | $ 92 |
Liabilities, Fair Value | 566 | 92 |
Other assets | ||
Derivatives Fair Value [Line Items] | ||
Assets, Fair Value | 566 | 92 |
Other liabilities | ||
Derivatives Fair Value [Line Items] | ||
Liabilities, Fair Value | $ 566 | $ 92 |
Fair Value of Assets and Liab_3
Fair Value of Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Investment securities available-for-sale, fair value | $ 136,372 | $ 136,923 |
Loans held for sale | 2,321 | 1,040 |
Interest rate derivatives | 566 | 92 |
LIABILITIES | ||
Liabilities, Fair Value | 566 | 92 |
Level 2 | ||
ASSETS | ||
Investment securities available-for-sale, fair value | 136,372 | 136,923 |
Interest rate derivatives | 566 | 92 |
LIABILITIES | ||
Liabilities, Fair Value | 566 | 92 |
Fair Value, Measurements, Recurring | ||
ASSETS | ||
Loans held for sale | 2,321 | 1,040 |
Interest rate derivatives | 566 | 92 |
LIABILITIES | ||
Liabilities, Fair Value | 566 | 92 |
Fair Value, Measurements, Recurring | Level 1 | ||
ASSETS | ||
Loans held for sale | 2,321 | 1,040 |
Fair Value, Measurements, Recurring | Level 2 | ||
ASSETS | ||
Interest rate derivatives | 566 | 92 |
LIABILITIES | ||
Liabilities, Fair Value | 566 | 92 |
Fair Value, Measurements, Recurring | U.S. Government agencies and corporations | ||
ASSETS | ||
Investment securities available-for-sale, fair value | 9,227 | 9,002 |
Fair Value, Measurements, Recurring | U.S. Government agencies and corporations | Level 2 | ||
ASSETS | ||
Investment securities available-for-sale, fair value | 9,227 | 9,002 |
Fair Value, Measurements, Recurring | Obligations of states and political subdivisions | ||
ASSETS | ||
Investment securities available-for-sale, fair value | 52,882 | 51,658 |
Fair Value, Measurements, Recurring | Obligations of states and political subdivisions | Level 2 | ||
ASSETS | ||
Investment securities available-for-sale, fair value | 52,882 | 51,658 |
Fair Value, Measurements, Recurring | U.S. Government-sponsored mortgage-backed securities | ||
ASSETS | ||
Investment securities available-for-sale, fair value | 55,390 | 56,587 |
Fair Value, Measurements, Recurring | U.S. Government-sponsored mortgage-backed securities | Level 2 | ||
ASSETS | ||
Investment securities available-for-sale, fair value | 55,390 | 56,587 |
Fair Value, Measurements, Recurring | U.S. Government-sponsored collateralized mortgage obligations | ||
ASSETS | ||
Investment securities available-for-sale, fair value | 11,590 | 11,976 |
Fair Value, Measurements, Recurring | U.S. Government-sponsored collateralized mortgage obligations | Level 2 | ||
ASSETS | ||
Investment securities available-for-sale, fair value | 11,590 | 11,976 |
Fair Value, Measurements, Recurring | U.S. Government-guaranteed small business administration pools | ||
ASSETS | ||
Investment securities available-for-sale, fair value | 7,283 | 7,700 |
Fair Value, Measurements, Recurring | U.S. Government-guaranteed small business administration pools | Level 2 | ||
ASSETS | ||
Investment securities available-for-sale, fair value | $ 7,283 | $ 7,700 |
Fair Value of Assets and Liab_4
Fair Value of Assets and Liabilities (Details 1) - Trust preferred securities $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Changes in the Level 3 fair value category | |
Beginning balance | $ 895 |
Net realized/unrealized losses included in: | |
Other comprehensive income (loss) | 195 |
Ending balance | $ 1,090 |
Fair Value of Assets and Liab_5
Fair Value of Assets and Liabilities (Details Textual) | 3 Months Ended |
Mar. 31, 2018Security | |
Fair Value Disclosures [Abstract] | |
Number of debt securities with other-than-temporary impairment | 1 |
Fair Value of Assets and Liab_6
Fair Value of Assets and Liabilities (Details 3) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Losses recognized in earnings for trust preferred securities held | ||
Beginning balance, Amount of OTTI related to credit loss | $ 140 | $ 140 |
Additions in QTD | 0 | |
Ending balance, Amount of OTTI related to credit loss | 140 | |
Trapeza IX B-1 | Moodys Caa2 Rating | Fitch CC Rating | ||
Losses recognized in earnings for trust preferred securities held | ||
Beginning balance, Amount of OTTI related to credit loss | 140 | $ 140 |
Additions in QTD | 0 | |
Ending balance, Amount of OTTI related to credit loss | $ 140 |
Fair Value of Assets and Liab_7
Fair Value of Assets and Liabilities (Details 5) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||||
Cash and cash equivalents, carrying value | $ 19,986 | $ 19,692 | $ 27,538 | $ 19,125 |
Investment securities available-for-sale, carrying value | 136,372 | 136,923 | ||
Loans held for sale | 2,321 | 1,040 | ||
Loans, carrying value | 477,973 | 510,194 | ||
Bank-owned life insurance | 15,439 | 15,711 | ||
Accrued interest receivable, carrying value | 2,346 | 2,255 | ||
Interest rate derivative assets, carrying value | 566 | 92 | ||
LIABILITIES | ||||
Demand, savings and money market deposits, carrying value | 432,653 | 483,054 | ||
Time deposits, carrying value | 138,923 | 121,365 | ||
Securities sold under agreements to repurchase | 1,638 | 2,206 | ||
Short term borrowings | 2,206 | |||
Federal Home Loan Bank advances - short term | 9,000 | 12,000 | ||
Federal Home Loan Bank advances - long term | 18,000 | 16,000 | ||
Subordinated debt, carrying value | 5,155 | 5,155 | ||
Accrued interest payable, carrying value | 483 | 371 | ||
Interest rate derivative liabilities, carrying value | 566 | 92 | ||
ASSETS: | ||||
Cash and cash equivalents, fair value | 19,986 | 19,692 | ||
Investment securities available-for-sale, fair value | 136,372 | 136,923 | ||
Loans held for sale, fair value | 2,321 | 1,040 | ||
Loans, fair value | 482,589 | 513,103 | ||
Bank-owned life insurance, fair value | 15,439 | 15,711 | ||
Accrued interest receivable, fair value | 2,346 | 2,255 | ||
Interest rate derivative assets, fair value | 566 | 92 | ||
LIABILITIES: | ||||
Demand, savings and money market deposits, fair value | 432,653 | 483,054 | ||
Time deposits, fair value | 139,953 | 122,295 | ||
Securities sold under agreements to repurchase, fair value | 1,638 | |||
Short-term borrowings, fair value | 2,206 | |||
Federal Home Loan Bank advances - short term, fair value | 8,991 | 11,987 | ||
Federal Home Loan Bank advances - long term, fair value | 17,941 | 15,880 | ||
Subordinated debt, fair value | 4,692 | 4,620 | ||
Accrued interest payable, fair value | 483 | 371 | ||
Interest rate derivative liabilities, fair value | 566 | 92 | ||
Level 1 | ||||
ASSETS: | ||||
Cash and cash equivalents, fair value | 19,986 | 19,692 | ||
Loans held for sale, fair value | 2,321 | 1,040 | ||
Bank-owned life insurance, fair value | 15,439 | 15,711 | ||
Accrued interest receivable, fair value | 2,346 | 2,255 | ||
LIABILITIES: | ||||
Demand, savings and money market deposits, fair value | 432,653 | 483,054 | ||
Securities sold under agreements to repurchase, fair value | 1,638 | |||
Short-term borrowings, fair value | 2,206 | |||
Accrued interest payable, fair value | 483 | 371 | ||
Level 2 | ||||
ASSETS: | ||||
Investment securities available-for-sale, fair value | 136,372 | 136,923 | ||
Interest rate derivative assets, fair value | 566 | 92 | ||
LIABILITIES: | ||||
Interest rate derivative liabilities, fair value | 566 | 92 | ||
Level 3 | ||||
ASSETS: | ||||
Loans, fair value | 482,589 | 513,103 | ||
LIABILITIES: | ||||
Time deposits, fair value | 139,953 | 122,295 | ||
Federal Home Loan Bank advances - short term, fair value | 8,991 | 11,987 | ||
Federal Home Loan Bank advances - long term, fair value | 17,941 | 15,880 | ||
Subordinated debt, fair value | $ 4,692 | $ 4,620 |
Fair Value of Assets and Liab_8
Fair Value of Assets and Liabilities (Details 6) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Significant unobservable inputs for assets and liabilities measured at fair value on a recurring and nonrecurring basis | ||
Investment securities available-for-sale, fair value | $ 136,372 | $ 136,923 |
Impaired Loans | ||
Significant unobservable inputs for assets and liabilities measured at fair value on a recurring and nonrecurring basis | ||
Fair value input appraisal adjustments | (76.00%) | |
Fair value inputs liquidation expenses | (10.00%) | |
Impaired Loans | Appraisal Of Collateral | ||
Significant unobservable inputs for assets and liabilities measured at fair value on a recurring and nonrecurring basis | ||
Investment securities available-for-sale, fair value | $ 420 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Beginning balance | $ 64,918 | $ 61,630 | |
Total other comprehensive income (loss) | 1,878 | (2,365) | |
Ending balance | 68,319 | 60,127 | |
Accumulated Net Unrealized Investment Gain (Loss) | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Beginning balance | [1] | (3,686) | (1,787) |
Other comprehensive income (loss) before reclassification | [1] | 1,871 | (2,341) |
Amount reclassified from accumulated other comprehensive loss | [1] | (16) | |
Total other comprehensive income (loss) | [1] | 1,871 | (2,357) |
Ending balance | [1] | (1,815) | (4,144) |
Accumulated Defined Benefit Plans Adjustment | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Beginning balance | [1] | 30 | (38) |
Other comprehensive income (loss) before reclassification | [1] | 7 | (8) |
Total other comprehensive income (loss) | [1] | 7 | (8) |
Ending balance | [1] | $ 37 | $ (46) |
[1] | All amounts are net of tax. Amounts in parentheses indicate debits. |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss (Details 1) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Unrealized gains on available-for-sale securities | |||
Federal income tax expense | $ (396) | $ (241) | |
NET INCOME | $ 2,105 | 1,537 | |
Reclassification out of Accumulated Other Comprehensive Income (Loss) | Accumulated Net Unrealized Investment Gain (Loss) | |||
Unrealized gains on available-for-sale securities | |||
Investment securities available-for-sale gains, net | [1] | 20 | |
Federal income tax expense | [1] | (4) | |
NET INCOME | [1] | $ 16 | |
[1] | Amounts in parentheses indicate debits to net income. |
Post-Retirement Obligations (De
Post-Retirement Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | ||
Beginning balance | $ 831 | $ 876 |
Expense recorded | (1) | 6 |
Other comprehensive loss (income) recorded | (7) | 8 |
Ending balance | $ 823 | $ 890 |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details Textual) - USD ($) | Dec. 18, 2018 | Jan. 23, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | May 22, 2018 |
Equity Class Of Treasury Stock [Line Items] | ||||||
Common stock, shares outstanding | 4,352,394 | 4,349,624 | ||||
Stock repurchase program, shares repurchased | 10,488 | |||||
Stock Repurchase Program on January 23, 2018 | ||||||
Equity Class Of Treasury Stock [Line Items] | ||||||
Shares authorized to be repurchased | 300,000 | |||||
Percentage of shares authorized to be repurchased to common stock outstanding | 2.30% | |||||
Common stock, shares outstanding | 4,420,136 | |||||
Stock repurchase program, remaining authorized amount | $ 7,100,000 | |||||
Stock repurchase program expiration date | Dec. 31, 2018 | |||||
Stock repurchase program, shares repurchased | 80,944 | |||||
Increase in number of shares authorized to be repurchased | 200,000 | |||||
Stock Repurchase Program on January 23, 2018 | Maximum | ||||||
Equity Class Of Treasury Stock [Line Items] | ||||||
Shares authorized to be repurchased | 100,000 | |||||
Stock Repurchase Program on December 18,2018 | ||||||
Equity Class Of Treasury Stock [Line Items] | ||||||
Percentage of shares authorized to be repurchased to common stock outstanding | 6.90% | |||||
Common stock, shares outstanding | 4,349,624 | |||||
Stock repurchase program expiration date | Dec. 31, 2019 | |||||
Stock repurchase program, shares repurchased | 0 | |||||
Stock Repurchase Program on December 18,2018 | Maximum | ||||||
Equity Class Of Treasury Stock [Line Items] | ||||||
Shares authorized to be repurchased | 300,000 |
Securities Sold Under Agreeme_3
Securities Sold Under Agreements to Repurchase (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Securities Sold Under Agreements To Repurchase [Line Items] | ||
Total repurchase agreements | $ 1,638 | $ 2,206 |
Repurchase Agreements | ||
Securities Sold Under Agreements To Repurchase [Line Items] | ||
Total collateral carrying value | 3,058 | 3,066 |
Repurchase Agreements | U.S. Government-sponsored mortgage-backed securities | ||
Securities Sold Under Agreements To Repurchase [Line Items] | ||
Total collateral carrying value | $ 3,058 | $ 3,066 |
Equity Compensation (Details Te
Equity Compensation (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Omnibus Equity Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of shares authorized | 340,000 | |
Equity compensation expense recorded | $ 54,000 | $ 34,000 |
Unrecognized compensation expense | $ 256,000 | |
Unrecognized compensation expense, expected to be recognized | 14 months | |
Shares awarded under the plan, vesting description | Shares awarded under this plan vest in equal thirds on the first three anniversaries of the award date if the employee remains employed with Cortland Bancorp. | |
Award vesting period | 3 years | |
Omnibus Equity Plan | Restricted Stock Units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares granted under the plan | 0 | 0 |
Director Equity Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Equity compensation expense recorded | $ 0 | $ 0 |
Director Equity Plan | Restricted Stock Units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of shares authorized | 113,000 | |
Shares granted under the plan | 0 | 0 |
Equity Compensation (Details)
Equity Compensation (Details) - Omnibus Equity and Director Equity Plan - Restricted Stock Units | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Units, Nonvested, beginning balance | shares | 23,591 |
Units, Vested | shares | (3,794) |
Units, Nonvested, ending balance | shares | 19,797 |
Price at Grant Date, Nonvested, beginning balance | $ / shares | $ 19.67 |
Price at Grant Date, Vested | $ / shares | 18.25 |
Price at Grant Date, Nonvested, ending balance | $ / shares | $ 19.94 |
Leases (Details Textual)
Leases (Details Textual) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lessee Lease Description [Line Items] | |
Operating lease, existence of option to extend | true |
Operating lease right-of-use asset | $ 2,000,000 |
Operating lease liability | 2,015,000 |
Operating lease cost | 67,000 |
Operating cash flows from operating leases | 62,000 |
Non-cash expense amortization of right of use asset and implicit interest | $ 5,000 |
Minimum | |
Lessee Lease Description [Line Items] | |
Operating lease remaining lease term | 5 years |
Operating lease option to extend term | 5 years |
Maximum | |
Lessee Lease Description [Line Items] | |
Operating lease remaining lease term | 10 years |
Operating lease option to extend term | 15 years |
Leases - (Details)
Leases - (Details) | Mar. 31, 2019 |
Leases [Abstract] | |
Weighted-average remaining lease term-operating leases in years | 15 years 8 months 19 days |
Weighted-average discount rate - operating leases | 3.06% |
Leases - (Details 1)
Leases - (Details 1) $ in Thousands | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
2019 | $ 186 |
2020 | 231 |
2021 | 154 |
2022 | 154 |
2023 | 156 |
2024 and thereafter | 1,641 |
Total lease payments | 2,522 |
Less: interest | 507 |
Present value of lease liabilities | $ 2,015 |