Document and Entity Information
Document and Entity Information - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 28, 2019 | Jun. 30, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | CHOICEONE FINANCIAL SERVICES INC | ||
Entity Central Index Key | 0000803164 | ||
Document Type | 10-K | ||
Trading Symbol | COFS | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Smaller Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 87,200,000 | ||
Share price | $ 26.25 | ||
Entity Common Stock, Shares Outstanding | 3,617,629 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and due from banks | $ 19,690 | $ 36,837 |
Equity securities at fair value (Note 2) | 2,847 | |
Securities available for sale (Note 2) | 166,602 | 155,591 |
Federal Home Loan Bank stock | 1,994 | 1,994 |
Federal Reserve Bank stock | 1,573 | 1,573 |
Loans held for sale | 831 | 1,721 |
Loans to other financial institutions | 20,644 | 6,802 |
Loans (Note 3) | 409,073 | 398,785 |
Allowance for loan losses (Note 3) | (4,673) | (4,577) |
Loans, net | 404,400 | 394,208 |
Premises and equipment, net (Note 5) | 15,879 | 12,855 |
Other real estate owned, net (Note 7) | 102 | 106 |
Cash value of life insurance policies | 14,899 | 14,514 |
Goodwill (Note 6) | 13,728 | 13,728 |
Other assets | 7,355 | 6,615 |
Total assets | 670,544 | 646,544 |
Liabilities | ||
Deposits - noninterest-bearing (Note 8) | 153,542 | 151,462 |
Deposits - interest-bearing (Note 8) | 423,473 | 388,391 |
Total deposits | 577,015 | 539,853 |
Federal funds purchased | 4,800 | |
Repurchase agreements (Note 9) | 7,148 | |
Advances from Federal Home Loan Bank (Note 10) | 5,233 | 20,268 |
Other liabilities (Notes 11 and 13) | 3,019 | 2,725 |
Total liabilities | 590,067 | 569,994 |
Shareholders' Equity (Note 20) | ||
Preferred stock; shares authorized: 100,000; shares outstanding: none | ||
Common stock and paid-in capital, no par value; shares authorized: 7,000,000; shares outstanding: 3,616,483 in 2018 and 3,448,569 in 2017 (Note 14) | 54,523 | 50,290 |
Retained earnings | 26,686 | 26,023 |
Accumulated other comprehensive income (loss), net | (732) | 237 |
Total shareholders' equity | 80,477 | 76,550 |
Total liabilities and shareholders' equity | $ 670,544 | $ 646,544 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, authorized | 100,000 | 100,000 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, authorized | 7,000,000 | 7,000,000 |
Common stock, outstanding | 3,616,483 | 3,448,569 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Interest income | ||||||
Loans, including fees | $ 20,033 | $ 17,964 | $ 16,507 | |||
Securities: | ||||||
Taxable | 2,896 | 2,556 | 2,334 | |||
Tax exempt | 1,465 | 1,419 | 1,450 | |||
Other | 131 | 102 | 21 | |||
Total interest income | 24,525 | 22,041 | 20,312 | |||
Interest expense | ||||||
Deposits | 2,175 | 1,189 | 790 | |||
Advances from Federal Home Loan Bank | 235 | 276 | 171 | |||
Other | 51 | 13 | 8 | |||
Total interest expense | 2,461 | 1,478 | 969 | |||
Net interest income | 22,064 | 20,563 | 19,343 | |||
Provision for loan losses (Note 3) | 35 | 485 | ||||
Net interest income after provision for loan losses | 22,029 | 20,078 | 19,343 | |||
Noninterest income | ||||||
Customer service charges | 4,525 | 4,135 | 4,056 | |||
Insurance and investment commissions | 335 | 826 | 1,009 | |||
Gains on sales of loans (Note 4) | 1,003 | 1,265 | 1,748 | |||
Net gains/(losses) on sales of securities (Note 2) | 34 | (280) | 312 | |||
Net gains/(losses) on sales and write-downs of other assets (Note 7) | 83 | 26 | (41) | |||
Earnings on life insurance policies | 385 | 398 | 356 | |||
Change in market value of equity securities | 71 | |||||
Gain on sale of investment book of business | 908 | |||||
Other | 484 | 533 | 441 | |||
Total noninterest income | 6,920 | 7,811 | 7,881 | |||
Noninterest expense | ||||||
Salaries and benefits (Notes 13 and 14) | 10,997 | 10,249 | 9,982 | |||
Occupancy and equipment (Note 5) | 2,722 | 2,896 | 2,588 | |||
Data processing | 2,205 | 2,279 | 2,273 | |||
Professional fees | 1,349 | 1,166 | 935 | |||
Supplies and postage | 408 | 399 | 385 | |||
Advertising and promotional | 308 | 298 | 222 | |||
Intangible amortization (Note 6) | 379 | |||||
FDIC insurance | 185 | 200 | 238 | |||
Other | 2,287 | 1,847 | 1,970 | |||
Total noninterest expense | 20,461 | 19,334 | 18,972 | |||
Income before income tax | 8,488 | 8,555 | 8,252 | |||
Income tax expense (Note 11) | 1,155 | 2,387 | 2,162 | |||
Net income | $ 7,333 | $ 6,168 | $ 6,090 | |||
Basic earnings per share (Note 15) (in dollars per share) | $ 2.03 | $ 1.70 | $ 1.68 | |||
Diluted earnings per share (Note 15) (in dollars per share) | 2.02 | 1.70 | 1.68 | |||
Dividends declared per share (in dollars per share) | [1] | $ 0.71 | $ 0.64 | [2] | $ 0.62 | [2] |
[1] | Adjusted for 5% stock dividend issued on May 31, 2018. | |||||
[2] | Adjusted for 5% stock dividend issued on May 31, 2017. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 7,333 | $ 6,168 | $ 6,090 |
Other comprehensive income: | |||
Changes in net unrealized gains (losses) on investment securities available for sale, net of tax expense (benefit) of $(196), $324, and $(812) for the years ended December 31, 2018, 2017, and 2016, respectively | (737) | 628 | (1,573) |
Reclassification adjustment for realized gain on sale of investment securities available for sale included in net income, net of tax expense (benefit) of $(7), $95, and $(106) for the years ended December 31, 2018, 2017, and 2016, respectively | (27) | 185 | (206) |
Change in adjustment for postretirement benefits, net of tax expense (benefit) of $10, $(9), and $(12) for the years ended December 31, 2018, 2017, and 2016, respectively | 39 | (17) | (22) |
Other comprehensive income (loss), net of tax | (725) | 796 | (1,801) |
Comprehensive income | $ 6,608 | $ 6,964 | $ 4,289 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Unrealized holding gains on available for sale securities, tax expense (benefit) | $ (196) | $ 324 | $ (812) |
Reclassification adjustment for gain recognized in net income, tax expense (benefit) | (7) | 95 | (106) |
Change in adjustment for pension and other postretirement benefits, tax benefit (expense) | $ 10 | $ (9) | $ (12) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock and Paid in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income/(Loss), Net [Member] | Total | |||
Balance, beginning at Dec. 31, 2015 | $ 46,501 | $ 22,138 | $ 1,203 | $ 69,842 | |||
Balance, beginning (in shares) at Dec. 31, 2015 | 3,295,228 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 6,090 | 6,090 | |||||
Other comprehensive income | (1,801) | (1,801) | |||||
Shares issued | $ 173 | 173 | |||||
Shares issued (in shares) | 8,460 | ||||||
Shares repurchased | $ (794) | (794) | |||||
Shares repurchased (in shares) | (35,000) | ||||||
Change in ESOP repurchase obligation | $ 127 | 127 | |||||
Effect of employee stock purchases | 13 | 13 | |||||
Stock-based compensation expense | $ 279 | 279 | |||||
Stock-based compensation expense (in shares) | 9,256 | ||||||
Cash dividends declared | [1],[2] | (2,231) | (2,231) | ||||
Balance, ending at Dec. 31, 2016 | $ 46,299 | 25,997 | (598) | 71,698 | |||
Balance, ending (in shares) at Dec. 31, 2016 | 3,277,944 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 6,168 | 6,168 | |||||
Other comprehensive income | 796 | 796 | |||||
Shares issued | $ 149 | 149 | |||||
Shares issued (in shares) | 8,776 | ||||||
Shares repurchased | $ (203) | (203) | |||||
Shares repurchased (in shares) | (8,800) | ||||||
Effect of employee stock purchases | $ 13 | 13 | |||||
Stock-based compensation expense | 240 | 240 | |||||
Stock options exercised | [3] | $ 13 | 13 | ||||
Stock options exercised (in shares) | [3] | 1,463 | |||||
Restricted stock units issued (in shares) | 5,197 | ||||||
Stock dividend declared | $ 3,779 | (3,786) | (7) | ||||
Stock dividend declared (in shares) | 163,989 | ||||||
Effect of tax law change on other comprehensive income | (39) | 39 | |||||
Cash dividends declared | [1],[2] | (2,317) | (2,317) | ||||
Balance, ending at Dec. 31, 2017 | $ 50,290 | 26,023 | 237 | $ 76,550 | |||
Balance, ending (in shares) at Dec. 31, 2017 | 3,448,569 | 3,448,569 | |||||
Adoption effect of ASU 2016-01 at Dec. 31, 2017 | 244 | [4] | (244) | [4] | $ 244 | ||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 7,333 | 7,333 | |||||
Other comprehensive income | (725) | (725) | |||||
Shares issued | $ 126 | 126 | |||||
Shares issued (in shares) | 7,904 | ||||||
Shares repurchased | $ (523) | (523) | |||||
Shares repurchased (in shares) | (20,628) | ||||||
Effect of employee stock purchases | $ 13 | 13 | |||||
Stock-based compensation expense | $ 282 | 282 | |||||
Stock options exercised (in shares) | [3] | 1,241 | |||||
Restricted stock units issued (in shares) | 7,303 | ||||||
Stock dividend declared | $ 4,335 | (4,342) | (7) | ||||
Stock dividend declared (in shares) | 172,094 | ||||||
Cash dividends declared | [2] | (2,572) | (2,572) | ||||
Balance, ending at Dec. 31, 2018 | $ 54,523 | $ 26,686 | $ (732) | $ 80,477 | |||
Balance, ending (in shares) at Dec. 31, 2018 | 3,616,483 | 3,616,483 | |||||
[1] | Adjusted for 5% stock dividend issued on May 31, 2017. | ||||||
[2] | Adjusted for 5% stock dividend issued on May 31, 2018. | ||||||
[3] | The amount shown includes the number of shares issued in cashless transactions where some taxes are netted on a portion of the exercises. | ||||||
[4] | ASU 2016-01 is further addressed in Note 1 to the financial statements. |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 1 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | ||
Stock dividend issued | 5.00% | 5.00% |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net income | $ 7,333 | $ 6,168 | $ 6,090 |
Adjustments to reconcile net income to net cash from operating activities: | |||
Provision for loan losses | 35 | 485 | |
Depreciation | 1,183 | 1,389 | 1,078 |
Amortization | 893 | 1,061 | 1,531 |
Compensation expense on employee and director stock purchases, stock options, and restricted stock units | 344 | 317 | 380 |
Net (gains)/losses on sales of securities | (34) | 280 | (312) |
Net change in market value of equity securities | (71) | ||
Gains on sales of loans | (1,003) | (1,265) | (1,748) |
Loans originated for sale | (33,555) | (43,171) | (53,591) |
Proceeds from loan sales | 34,872 | 42,883 | 57,830 |
Earnings on bank-owned life insurance | (385) | (398) | (356) |
(Gains)/losses on sales of other real estate owned | (79) | (18) | 8 |
Proceeds from sales of other real estate owned | 515 | 663 | 247 |
Deferred federal income tax (benefit)/expense | 209 | 62 | (82) |
Net change in: | |||
Other assets | (875) | 417 | (1,952) |
Other liabilities | 573 | (783) | 1,804 |
Net cash from operating activities | 9,955 | 8,090 | 10,927 |
Cash flows from investing activities: | |||
Sales of securities available for sale | 2,725 | 57,628 | 15,317 |
Maturities, prepayments and calls of securities available for sale | 13,443 | 17,572 | 36,705 |
Purchases of securities available for sale | (31,450) | (56,123) | (69,526) |
Purchases or calls of FHLB stock | (380) | ||
Purchase of bank-owned life insurance policies | (1,500) | ||
Loan originations and payments, net | (24,366) | (35,723) | (20,274) |
Additions to premises and equipment | (4,207) | (1,656) | (1,819) |
Net cash used in investing activities | (43,855) | (18,302) | (41,477) |
Cash flows from financing activities: | |||
Net change in deposits | 37,162 | 27,467 | 37,690 |
Net change in repurchase agreements | (7,148) | (765) | (1,547) |
Net change in fed funds purchased | 4,800 | ||
Proceeds from Federal Home Loan Bank advances | 128,500 | 212,500 | 311,017 |
Payments on Federal Home Loan Bank advances | (143,535) | (204,533) | (310,048) |
Issuance of common stock | 77 | 98 | 85 |
Repurchase of common stock | (523) | (203) | (794) |
Cash dividends and fractional shares from stock dividend | (2,580) | (2,324) | (2,231) |
Net cash from financing activities | 16,753 | 32,240 | 34,172 |
Net change in cash and cash equivalents | (17,147) | 22,028 | 3,622 |
Beginning cash and cash equivalents | 36,837 | 14,809 | 11,187 |
Ending cash and cash equivalents | 19,690 | 36,837 | 14,809 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 2,300 | 1,465 | 984 |
Cash paid for income taxes | 850 | 2,120 | 1,760 |
Loans transferred to other real estate owned | $ 432 | $ 314 | $ 661 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1 – Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include ChoiceOne Financial Services, Inc., its wholly-owned subsidiary, ChoiceOne Bank (the “Bank”), and ChoiceOne Bank’s wholly-owned subsidiary, ChoiceOne Insurance Agencies, Inc. (together referred to as “ChoiceOne”). Intercompany transactions and balances have been eliminated in consolidation. Nature of Operations The Bank is a full-service community bank that offers commercial, consumer, and real estate loans as well as traditional demand, savings and time deposits to both commercial and consumer clients in Kent, Muskegon, Newaygo, and Ottawa counties in Michigan. Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and real estate. Commercial loans are expected to be repaid from the cash flows from operations of businesses. Real estate loans are collateralized by either residential or commercial real estate. The Insurance Agency is a wholly-owned subsidiary of the Bank. The Insurance Agency sells insurance policies such as life and health for both commercial and consumer clients. The Insurance Agency also offers alternative investment products such as annuities and mutual funds through a registered broker. Together, the Bank and the Insurance Agency account for substantially all of ChoiceOne’s assets, revenues and operating income. Use of Estimates To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, ChoiceOne’s management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided. Actual results may differ from these estimates. Estimates associated with securities available for sale, the allowance for loan losses, other real estate owned, loan servicing rights, goodwill, and fair values of certain financial instruments are particularly susceptible to change. Cash and Cash Equivalents Cash and cash equivalents are defined to include cash on hand, demand deposits with other banks, and federal funds sold. Cash flows are reported on a net basis for customer loan and deposit transactions, deposits with other financial institutions, and short-term borrowings with original terms of 90 days or less. Securities Debt securities are classified as available for sale because they might be sold before maturity. Debt securities classified as available for sale are carried at fair value, with unrealized holding gains and losses reported separately in the accumulated other comprehensive income or loss section of shareholders’ equity, net of tax effect. Restricted investments in Federal Reserve Bank stock and Federal Home Loan Bank stock are carried at cost. Equity securities consist of investments in preferred stock and investments in common stock of other financial institutions. Effective January 1, 2018, equity securities are reported at their fair value with changes in market value flowing through net income. Prior to 2018, equity securities were accounted for in a manner similar to available for sale debt securities. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized using the level-yield method without anticipating prepayments. Gains or losses on sales are recorded on the trade date based on the amortized cost of the security sold. Management evaluates securities for other-than-temporary impairment (“OTTI”) on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. The evaluation of securities includes consideration given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, whether the market decline was affected by macroeconomic conditions and whether ChoiceOne has the intent to sell the security or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis. In analyzing an issuer’s financial condition, management may consider whether the securities are issued by the federal government or its agencies, or U.S. Government sponsored enterprises, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time. When OTTI occurs, the amount of the OTTI recognized in earnings depends on whether ChoiceOne intends to sell the security or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis. If ChoiceOne intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment. If a security is determined to be other-than-temporarily impaired, but ChoiceOne does not intend to sell the security, only the credit portion of the estimated loss is recognized in earnings, with the other portion of the loss recognized in other comprehensive income. Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of unearned interest, deferred loan fees and costs, and an allowance for loan losses. Loans held for sale are reported at the lower of cost or market, on an aggregate basis. Interest income on loans is reported on the interest method and includes amortization of net deferred loan fees and costs over the estimated loan term. Interest on loans is accrued based upon the principal balance outstanding. The accrual of interest is discontinued at the time at which loans are 90 days past due unless the loan is secured by sufficient collateral and is in the process of collection. Past due status is based on the contractual terms of the loan. Loans are placed into nonaccrual status or charged off at an earlier date if collection of principal or interest is considered doubtful. Interest accrued but not received is reversed against interest income when the loans are placed into nonaccrual status. Interest received on such loans is applied to principal until qualifying for return to accrual. Loans are returned to accrual basis when all the principal and interest amounts contractually due are brought current and future payment is reasonably assured. Loans to Other Financial Institutions Loans to other financial institutions are made for the purpose of providing a warehouse line of credit to facilitate funding of residential mortgage loan originations at other financial institutions. The loans are short-term in nature and are designed to provide funding for the time period between the loan origination and its subsequent sale in the secondary market. Loans to other financial institutions earn a share of interest income, determined by the contract, from when the loan is funded to when the loan is sold on the secondary market. Similar to loans held for sale, these loans are excluded from the allowance for loan losses as the risk of default is minimal during the short time period held. Allowance for Loan Losses The allowance for loan losses is a valuation allowance for probable incurred credit losses. The allowance for loan losses is increased by the provision for loan losses and decreased by loans charged off less any recoveries of charged off loans. Management estimates the allowance for loan losses balance required based on past loan loss experience, the nature and volume of the loan portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance for loan losses may be made for specific loans, but the entire allowance for loan losses is available for any loan that, in management’s judgment, should be charged off. Loan losses are charged against the allowance for loan losses when management believes that collection of a loan balance is not possible. The allowance for loan losses consists of general and specific components. The general component covers non-classified loans and is based on historical loss experience adjusted for current factors. The specific component relates to loans that are individually classified as impaired or loans otherwise classified as substandard or doubtful. A loan is impaired when full payment under the loan terms is not expected. Troubled debt restructuring of loans is undertaken to improve the likelihood that the loan will be repaid in full under the modified terms in accordance with a reasonable repayment schedule. All modified loans are evaluated to determine whether the loans should be reported as Troubled Debt Restructurings (TDR). A loan is a TDR when the Bank, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower by modifying a loan. To make this determination, the Bank must determine whether (a) the borrower is experiencing financial difficulties and (b) the Bank granted the borrower a concession. This determination requires consideration of all facts and circumstances surrounding the modification. An overall general decline in the economy or some deterioration in a borrower’s financial condition does not automatically mean the borrower is experiencing financial difficulties. Commercial loans are evaluated for impairment on an individual loan basis. If a loan is considered impaired or if a loan has been classified as a TDR, a portion of the allowance for loan losses is allocated to the loan so that it is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Large groups of smaller-balance homogeneous loans such as consumer and residential real estate mortgage loans are collectively evaluated for impairment and, accordingly, they are not separately identified for impairment disclosures. Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation. Land is carried at cost. Land improvements are depreciated using the straight-line method with useful lives ranging from 7 to 15 years. Building and related components are depreciated using the straight-line method with useful lives ranging from 5 to 39 years. Leasehold improvements are depreciated over the shorter of the estimated life or the lease term. Furniture and equipment are depreciated using the straight-line method with useful lives ranging from 3 to 7 years. Fixed assets are periodically reviewed for impairment. If impaired, the assets are recorded at fair value. Other Real Estate Owned Real estate properties acquired in the collection of a loan are initially recorded at the lower of the Bank’s basis in the loans or fair value at acquisition establishing a new cost basis. Any reduction to fair value from the carrying value of the related loan is accounted for as a loan loss. After acquisition, a valuation allowance reduces the reported amount to the lower of the initial amount or fair value less costs to sell. Expenses to repair or maintain properties are included within other noninterest expenses. Gains and losses upon disposition and changes in the valuation allowance are reported net within noninterest income. Bank Owned Life Insurance Bank owned life insurance policies are stated at the current cash surrender value of the policy, or the policy death proceeds less any obligation to provide a death benefit to an insured’s beneficiaries if that value is less than the cash surrender value. Increases in the asset value are recorded as earnings in other income. Loan Servicing Rights Loan servicing rights represent the allocated value of servicing rights on loans sold with servicing retained. Servicing rights are expensed in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on the fair value of the rights, using groupings of the underlying loans as to interest rates and then, secondarily, as to geographic and prepayment characteristics. Servicing rights are initially recorded at estimated fair value and fair value is determined using prices for similar assets with similar characteristics when available or based upon discounted cash flows using market-based assumptions. Any impairment of a grouping is reported as a valuation allowance. Goodwill Goodwill results from business acquisitions and represents the excess of the purchase price over the fair value of the acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment will be recognized in the period identified. Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit issued to meet financing needs of customers. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. Employee Benefit Plans ChoiceOne’s 401(k) plan allows participants to make contributions to their individual accounts under the plan in amounts up to the IRS maximum. Employer matching contributions from ChoiceOne to its 401(k) plan are discretionary. ChoiceOne also allows retired employees to participate in its health insurance plan. Employees who have attained age 55 and completed at least ten years of service to ChoiceOne are eligible to participate as a retiree until they are eligible for Medicare. These post-retirement benefits are accrued during the years in which the employee provides service. Income Taxes Income tax expense is the sum of the current year income tax due and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. Earnings Per Share Basic earnings per common share (“EPS”) is based on weighted-average common shares outstanding. Diluted EPS assumes issue of any dilutive potential common shares issuable under stock options or restricted stock units granted. Comprehensive Income Comprehensive income consists of net income and other comprehensive income or loss. Other comprehensive income or loss includes unrealized gains and losses on securities available for sale and changes in the funded status of post-retirement plans, net of tax, which are also recognized as a separate component of shareholders’ equity. Accumulated other comprehensive income was as follows: (Dollars in thousands) Years ended December 31, 2018 2017 Unrealized gain (loss) on available for sale securities $ (1,108 ) $ 169 Unrecognized gains on post-retirement benefits 181 132 Tax effect 195 (64 ) Accumulated other comprehensive income (loss) $ (732 ) $ 237 Loss Contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe that there are any such matters that may have a material effect on the financial statements as of December 31, 2018. Cash Restrictions Cash on hand or on deposit with the Federal Reserve Bank of $781,000 and $810,000 was required to meet regulatory reserve and clearing requirements at December 31, 2018 and 2017, respectively. The balance in excess of the amount required was interest-bearing as of December 31, 2018 and December 31, 2017. Stock-Based Compensation The Company values share-based stock option awards granted using the Black-Scholes option-pricing model. The Company recognizes compensation expense for its awards on a straight-line basis over the requisite service period for the entire award (straight-line attribution method), ensuring that the amount of compensation cost recognized at any date at least equals the portion of the grant-date fair value of the award that is vested at that time. Compensation costs related to stock options granted are disclosed in Note 14. ChoiceOne has granted restricted stock units to a select group of employees under the Stock Incentive Plan of 2012. Restricted stock units vest in three annual installments on each of the next three anniversaries of the grant date. Certain additional vesting provisions apply. Each unit, once vested, is settled by delivery of one share of ChoiceOne common stock. Dividend Restrictions Banking regulations require the maintenance of certain capital levels and may limit the amount of dividends that may be paid by the Bank to ChoiceOne (see Note 20). Fair Value of Financial Instruments Fair values of financial instruments are estimated using relevant market information and other assumptions, which are more fully documented in Note 18 to the consolidated financial statements. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. Operating Segments While ChoiceOne’s management monitors the revenue streams of various products and services for the Bank and Insurance Agency, operations and financial performance are evaluated on a company-wide basis. Accordingly, all of the financial service operations are considered by management to be aggregated into one reportable operating segment. Recent Accounting Pronouncements The Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606) The FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities The FASB issued ASU 2016-02, Leases The FASB issued ASU No. 2016-13 , Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments The FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. This ASU improves the effectiveness of disclosures in the notes to financial statements by facilitating clear communication of the information required by generally accepted accounting principles that is most important to users of each entity’s financial statements. The objective of improving the effectiveness will include the development of a framework that promotes consistent decisions by FASB about disclosure requirements and the appropriate exercise of discretion by reporting entities. This ASU is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019. Management is currently evaluating the impact of this new ASU on its consolidated financial statements. Reclassifications |
Securities
Securities | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Securities | Note 2 – Securities The fair value of equity securities and the related gross unrealized gains and losses recognized in noninterest income at December 31 were as follows: 2018 Gross Gross (Dollars in thousands) Amortized Unrealized Unrealized Fair Cost Gains Losses Value Equity securities $ 2,502 459 (114 ) 2,847 The fair value of securities available for sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) at December 31 were as follows: 2018 Gross Gross (Dollars in thousands) Amortized Unrealized Unrealized Fair Cost Gains Losses Value U.S. Government and federal agency $ 34,079 $ 1 $ (551 ) $ 33,529 U.S. Treasury notes and bonds 1,992 — (45 ) 1,947 State and municipal 104,317 544 (933 ) 103,928 Mortgage-backed 21,654 126 (205 ) 21,575 Corporate 5,147 1 (46 ) 5,102 Trust preferred securities 500 — — 500 Asset-backed securities 21 — — 21 Total $ 167,710 $ 672 $ (1,780 ) $ 166,602 2017 Gross Gross (Dollars in thousands) Amortized Unrealized Unrealized Fair Cost Gains Losses Value U.S. Government and federal agency $ 35,518 $ — $ (392 ) $ 35,126 U.S. Treasury notes and bonds 1,991 — (31 ) 1,960 State and municipal 99,609 910 (471 ) 100,048 Mortgage-backed 9,943 8 (131 ) 9,820 Corporate 5,184 2 (35 ) 5,151 Equity securities 2,583 309 — 2,892 Trust preferred securities 500 — — 500 Asset-backed securities 95 — (1 ) 94 Total $ 155,423 $ 1,229 $ (1,061 ) $ 155,591 Information regarding sales of equity securities and securities available for sale for the year ended December 31 follows: (Dollars in thousands) 2018 2017 2016 Proceeds from sales of securities $ 2,725 $ 57,628 $ 15,317 Gross realized gains 42 184 312 Gross realized losses 8 464 — Contractual maturities of equity securities and securities available for sale at December 31, 2018 were as follows: (Dollars in thousands) Amortized Fair Cost Value Due within one year $ 30,224 $ 30,390 Due after one year through five years 69,299 68,809 Due after five years through ten years 44,108 43,895 Due after ten years 2,425 1,933 Total debt securities 146,056 145,027 Mortgage-backed securities 21,654 21,575 Equity securities 2,502 2,847 Total $ 170,212 $ 169,449 Various securities were pledged as collateral for securities sold under agreements to repurchase and participation in a program that provided Community Reinvestment Act credits. The carrying amount of securities pledged as collateral at December 31 was as follows: (Dollars in thousands) 2018 2017 Securities pledged for securities sold under agreements to repurchase $ — $ 9,902 Security pledged for Community Reinvestment Act credits 257 262 Total $ 257 $ 10,164 The fair value of securities pledged to secure repurchase agreements may decline, and the Company may be required to provide additional collateral. The Company manages this risk by pledging securities with fair values in excess of the repurchase liability. Securities with unrealized losses at year-end 2018 and 2017, aggregated by investment category and length of time the individual securities have been in an unrealized loss position, were as follows: 2018 Less than 12 months More than 12 months Total (Dollars in thousands) Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses U.S. Government and federal agency $ — $ — $ 31,499 $ (551 ) $ 31,499 $ (551 ) U.S. Treasury notes and bonds — — 1,947 (45 ) 1,947 (45 ) State and municipal 9,726 (36 ) 56,763 (897 ) 66,489 (933 ) Mortgage-backed 5,384 (28 ) 7,443 (177 ) 12,827 (205 ) Corporate — — 4,604 (46 ) 4,604 (46 ) Equity securities 886 (114 ) — — 886 (114 ) Total temporarily impaired $ 15,996 $ (178 ) $ 102,256 $ (1,716 ) $ 118,252 $ (1,894 ) 2017 Less than 12 months More than 12 months Total (Dollars in thousands) Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses U.S. Government and federal agency $ 20,297 $ (190 ) $ 9,798 $ (202 ) $ 30,095 $ (392 ) U.S. Treasury notes and bonds 1,960 (31 ) — — 1,960 (31 ) State and municipal 38,887 (319 ) 6,889 (152 ) 45,776 (471 ) Mortgage-backed 8,481 (104 ) 838 (27 ) 9,319 (131 ) Corporate 2,471 (17 ) 687 (18 ) 3,158 (35 ) Asset-backed securities — — 94 (1 ) 94 (1 ) Total temporarily impaired $ 72,096 $ (661 ) $ 18,306 $ (400 ) $ 90,402 $ (1,061 ) ChoiceOne evaluates all securities on a quarterly basis to determine whether unrealized losses are temporary or other than temporary. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of ChoiceOne to retain its investment in the issue for a period of time sufficient to allow for any anticipated recovery in fair value of amortized cost basis. Management believed that unrealized losses as of December 31, 2018 were temporary in nature and were caused primarily by changes in interest rates, increased credit spreads, and reduced market liquidity and were not caused by the credit status of the issuer. No other than temporary impairments were recorded in 2018 or 2017. Following is information regarding unrealized gains and losses on equity securities for the year ending December 31, 2018: 2018 New gains and losses recognized during the period $ 71 Less: Net gains and losses recognized during the period on securities sold 9 Unrealized gains and losses recognized during the reporting period on securities still held at the reporting date $ 62 No presentation is necessary for years prior to 2018 due to implementation of ASU 2016-01 effective January 1, 2018. At December 31, 2018, there were 210 securities with an unrealized loss, compared to 154 securities with an unrealized loss as of December 31, 2017. |
Loans and Allowance for Loan Lo
Loans and Allowance for Loan Losses | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Loans and Allowance for Loan Losses | Note 3 – Loans and Allowance for Loan Losses The Bank’s loan portfolio as of December 31 was as follows: (Dollars in thousands) 2018 2017 Agricultural $ 49,109 $ 48,464 Commercial and industrial 91,406 104,386 Consumer 24,382 24,513 Real estate - commercial 139,453 123,487 Real estate - construction 8,843 6,613 Real estate - residential 95,880 91,322 Loans, gross 409,073 398,785 Allowance for loan losses (4,673 ) (4,577 ) Loans, net $ 404,400 $ 394,208 ChoiceOne manages its credit risk through the use of its loan policy and its loan approval process and by monitoring of loan credit performance. The loan approval process for commercial loans involves individual and group approval authorities. Individual authority levels are based on the experience of the lender. Group authority approval levels can consist of an internal loan committee that includes the Bank’s President or Senior Lender and other loan officers for loans that exceed individual approval levels, or a loan committee of the Board of Directors for larger commercial loans. Most consumer loans are approved by individual loan officers based on standardized underwriting criteria, with larger consumer loans subject to approval by the internal loan committee. Ongoing credit review of commercial loans is the responsibility of the loan officers. ChoiceOne’s internal credit committee meets at least monthly and reviews loans with payment issues and loans with a risk rating of 5, 6, or 7. Risk ratings of commercial loans are reviewed periodically and adjusted if needed. ChoiceOne’s consumer loan portfolio is primarily monitored on an exception basis. Loans where payments are past due are turned over to the Bank’s collection department, which works with the borrower to bring payments current or take other actions when necessary. In addition to internal reviews of credit performance, ChoiceOne contracts with a third party for independent loan review that monitors the loan approval process and the credit quality of the loan portfolio. Activity in the allowance for loan losses and balances in the loan portfolio was as follows: (Dollars in thousands) Commercial Commercial Construction Residential Agricultural and Industrial Consumer Real Estate Real Estate Real Estate Unallocated Total 2018 Allowance for Loan Losses Beginning balance $ 506 $ 1,001 $ 262 $ 1,761 $ 35 $ 726 $ 286 $ 4,577 Charge-offs — (58 ) (282 ) — — (25 ) — (365 ) Recoveries 33 107 112 61 — 113 — 426 Provision (58 ) (158 ) 162 104 3 (277 ) 259 35 Ending balance $ 481 $ 892 $ 254 $ 1,926 $ 38 $ 537 $ 545 $ 4,673 Individually evaluated for impairment $ 94 $ 3 $ 13 $ 20 $ — $ 167 $ — $ 297 Collectively evaluated for impairment $ 387 $ 889 $ 241 $ 1,906 $ 38 $ 370 $ 545 $ 4,376 Loans Individually evaluated for impairment $ 578 $ 21 $ 90 $ 623 $ — $ 2,712 $ 4,024 Collectively evaluated for impairment 48,531 91,385 24,292 138,830 8,843 93,168 405,049 Ending balance $ 49,109 $ 91,406 $ 24,382 $ 139,453 $ 8,843 $ 95,880 $ 409,073 (Dollars in thousands) Commercial Commercial Construction Residential Agricultural and Industrial Consumer Real Estate Real Estate Real Estate Unallocated Total 2017 Allowance for Loan Losses Beginning balance $ 433 $ 688 $ 305 $ 1,438 $ 62 $ 1,013 $ 338 $ 4,277 Charge-offs — (439 ) (253 ) — — (43 ) — (735 ) Recoveries — 21 169 258 40 62 — 550 Provision 73 731 41 65 (67 ) (306 ) (52 ) 485 Ending balance $ 506 $ 1,001 $ 262 $ 1,761 $ 35 $ 726 $ 286 $ 4,577 Individually evaluated for impairment $ — $ 26 $ 3 $ 49 $ — $ 224 $ — $ 302 Collectively evaluated for impairment $ 506 $ 975 $ 259 $ 1,712 $ 35 $ 502 $ 286 $ 4,275 Loans Individually evaluated for impairment $ 423 $ 124 $ 36 $ 778 $ — $ 2,779 $ 4,140 Collectively evaluated for impairment 48,041 104,262 24,477 122,709 6,613 88,543 394,645 Ending balance $ 48,464 $ 104,386 $ 24,513 $ 123,487 $ 6,613 $ 91,322 $ 398,785 (Dollars in thousands) Commercial Commercial Construction Residential Agricultural and Industrial Consumer Real Estate Real Estate Real Estate Unallocated Total 2016 Allowance for Loan Losses Beginning balance $ 420 $ 586 $ 297 $ 1,030 $ 46 $ 1,388 $ 427 $ 4,194 Charge-offs — (37 ) (218 ) — — (102 ) — (357 ) Recoveries — 31 149 89 — 171 — 440 Provision 13 108 77 319 16 (444 ) (89 ) — Ending balance $ 433 $ 688 $ 305 $ 1,438 $ 62 $ 1,013 $ 338 $ 4,277 Individually evaluated for impairment $ 3 $ 11 $ 2 $ 91 $ — $ 296 $ — $ 403 Collectively evaluated for impairment $ 430 $ 677 $ 303 $ 1,347 $ 62 $ 717 $ 338 $ 3,874 Loans Individually evaluated for impairment $ 526 $ 301 $ 28 $ 1,073 $ — $ 2,983 $ 4,911 Collectively evaluated for impairment 44,088 95,787 21,568 109,689 6,153 86,804 364,089 Ending balance $ 44,614 $ 96,088 $ 21,596 $ 110,762 $ 6,153 $ 89,787 $ 369,000 The process to monitor the credit quality of ChoiceOne’s loan portfolio includes tracking (1) the risk ratings of business loans, (2) the level of classified business loans, and (3) delinquent and nonperforming consumer loans. Business loans are risk rated on a scale of 1 to 8. A description of the characteristics of the ratings follows: Risk ratings 1 and 2: These loans are considered pass credits. They exhibit good to exceptional credit risk and demonstrate the ability to repay the loan from normal business operations. Risk rating 3: These loans are considered pass credits. They exhibit acceptable credit risk and demonstrate the ability to repay the loan from normal business operations. Risk rating 4: These loans are considered watch credits. They have potential developing weaknesses that, if not corrected, may cause deterioration in the ability of the borrower to repay the loan. While a loss is possible for a loan with this rating, it is not anticipated. Risk rating 5: These loans are considered special mention credits. Loans in this risk rating are considered to be inadequately protected by the net worth and debt service coverage of the borrower or of any pledged collateral. These loans have well defined weaknesses that may jeopardize the borrower’s ability to repay the loan. If the weaknesses are not corrected, loss of principal and interest could be probable. Risk rating 6: These loans are considered substandard credits. These loans have well defined weaknesses, the severity of which makes collection of principal and interest in full questionable. Loans in this category may be placed on nonaccrual status. Risk rating 7: These loans are considered doubtful credits. Some loss of principal and interest has been determined to be probable. The estimate of the amount of loss could be affected by factors such as the borrower’s ability to provide additional capital or collateral. Loans in this category are on nonaccrual status. No loans are classified as risk rating 7 and the category has been omitted from the table below. Risk rating 8: These loans are considered loss credits. They are considered uncollectible and will be charged off against the allowance for loan losses. No loans are classified as risk rating 8 and the category has been omitted from the table below. Information regarding the Bank’s credit exposure as of December 31 was as follows: Corporate Credit Exposure - Credit Risk Profile By Creditworthiness Category (Dollars in thousands) Agricultural Commercial and Industrial Commercial Real Estate 2018 2017 2018 2017 2018 2017 Risk ratings 1 and 2 $ 15,300 $ 14,813 $ 11,972 $ 13,491 $ 7,962 $ 8,227 Risk rating 3 23,938 22,721 50,266 63,366 89,173 78,868 Risk rating 4 9,082 10,199 23,961 26,943 36,193 33,429 Risk rating 5 211 308 5,204 491 4,850 1,533 Risk rating 6 578 423 3 95 1,275 1,430 $ 49,109 $ 48,464 $ 91,406 $ 104,386 $ 139,453 $ 123,487 Consumer Credit Exposure - Credit Risk Profile Based On Payment Activity (Dollars in thousands) Consumer Construction Real Estate Residential Real Estate 2018 2017 2018 2017 2018 2017 Performing $ 24,320 $ 24,497 $ 8,843 $ 6,613 $ 94,925 $ 90,629 Nonperforming — 1 — — — 257 Nonaccrual 62 15 — — 955 436 $ 24,382 $ 24,513 $ 8,843 $ 6,613 $ 95,880 $ 91,322 Included within the loan categories above were loans in the process of foreclosure. As of December 31, 2018 and 2017, loans in the process of foreclosure totaled $156,000 and $131,000, respectively. Loans are classified as performing when they are current as to principal and interest payments or are past due on payments less than 90 days. Loans are classified as nonperforming when they are past due 90 days or more as to principal and interest payments or are considered a troubled debt restructuring. The following schedule provides information on loans that were considered troubled debt restructurings (“TDRs”) that were modified during the twelve months ended December 31, 2018 and December 31, 2017. The Bank may agree to modify the terms of a loan in order to improve the Bank’s ability to collect amounts due. These modifications may include reduction of the interest rate, extension of the loan term, or in some cases, reduction of the principal balance. December 31, 2018 December 31, 2017 Pre- Post- Pre- Post- Modification Modification Modification Modification Outstanding Outstanding Outstanding Outstanding (Dollars in thousands) Number of Recorded Recorded Number of Recorded Recorded Loans Investment Investment Loans Investment Investment Residential real estate — $ — $ — 3 $ 296 $ 296 The pre-modification and post-modification outstanding recorded investment represents amounts as of the date of loan modification. If a difference exists between the pre-modification and post-modification outstanding recorded investment, it represents impairment recognized through the provision for loan losses computed based on a loan’s post-modification present value of expected future cash flows discounted at the loan’s original effective interest rate. If no difference exists, a loss is not expected to be incurred based on an assessment of the borrower’s expected cash flows. As of December 31, 2018 and December 31, 2017 there were no instances of a borrower who was past due with respect to principal and/or interest for 30 days or more during the twelve months ended December 31, 2018 and December 31, 2017 that had been modified during the 12-month period prior to the default. Loans modified in a TDR may already be on nonaccrual status and partial charge-offs have in some cases already been taken against the outstanding loan balance. As a result, loans modified in a TDR for the Bank may have the financial effect of increasing the specific allowance associated with the loan. The allowance for impaired loans that have been modified in a TDR is measured based on the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent or on the present value of expected future cash flows discounted at the loan’s effective interest rate. Management exercises significant judgment in developing these estimates. At December 31, 2018 the Corporation had no commitments to lend additional funds to the related debtors whose terms have been modified in a TDR. Impaired loans by loan category as of December 31 were as follows: Unpaid Average Interest (Dollars in thousands) Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized 2018 With no related allowance recorded Agricultural $ 185 $ 185 $ — $ 291 $ — Commercial and industrial — — — 29 2 Consumer 1 1 — 2 8 Construction real estate — — — 54 — Commercial real estate 74 109 — 78 30 Residential real estate 250 261 — 177 114 Subtotal 510 556 — 631 154 With an allowance recorded Agricultural 393 440 94 161 13 Commercial and industrial 21 21 3 296 — Consumer 88 88 13 59 — Construction real estate — — — — — Commercial real estate 550 609 20 692 — Residential real estate 2,462 2,494 167 2,523 6 Subtotal 3,514 3,652 297 3,731 19 Total Agricultural 578 625 94 452 13 Commercial and industrial 21 21 3 325 2 Consumer 90 90 13 61 8 Construction real estate — — — 54 — Commercial real estate 623 718 20 770 30 Residential real estate 2,712 2,755 167 2,700 120 Total $ 4,024 $ 4,209 $ 297 $ 4,362 $ 173 Unpaid Average Interest (Dollars in thousands) Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized 2017 With no related allowance recorded Agricultural $ 423 $ 455 $ — $ 322 $ — Commercial and industrial — — — 103 — Consumer — — — — — Commercial real estate 127 258 — 110 — Residential real estate 115 126 — 106 4 Subtotal 665 839 — 641 4 With an allowance recorded Agricultural — — — 121 — Commercial and industrial 124 124 26 177 1 Consumer 36 36 3 33 1 Commercial real estate 651 734 49 826 34 Residential real estate 2,664 2,690 224 2,522 110 Subtotal 3,475 3,584 302 3,679 146 Total Agricultural 423 455 — 443 — Commercial and industrial 124 124 26 280 1 Consumer 36 36 3 33 1 Commercial real estate 778 992 49 936 34 Residential real estate 2,779 2,816 224 2,628 114 Total $ 4,140 $ 4,423 $ 302 $ 4,320 $ 150 Unpaid Average Interest (Dollars in thousands) Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized 2016 With no related allowance recorded Agricultural $ 482 $ 485 $ — $ 220 $ 13 Commercial and industrial 206 207 — 91 3 Consumer — — — 1 — Commercial real estate 342 939 — 925 2 Residential real estate 301 292 — 167 5 Subtotal 1,331 1,923 — 1,404 23 With an allowance recorded Agricultural 44 44 3 72 3 Commercial and industrial 95 95 11 218 — Consumer 28 28 2 24 2 Commercial real estate 731 804 91 1,281 33 Residential real estate 2,682 2,711 296 2,672 108 Subtotal 3,580 3,682 403 4,267 146 Total Agricultural 526 529 3 292 16 Commercial and industrial 301 302 11 309 3 Consumer 28 28 2 25 2 Commercial real estate 1,073 1,743 91 2,206 35 Residential real estate 2,983 3,003 296 2,839 113 Total $ 4,911 $ 5,605 $ 403 $ 5,671 $ 169 An aging analysis of loans by loan category as of December 31 follows: Loans Loans Loans Past Due Loans Past Due Past Due Greater 90 Days Past (Dollars in thousands) 30 to 59 60 to 89 Than 90 Loans Not Total Due and Days (1) Days (1) Days (1) Total (1) Past Due Loans Accruing 2018 Agricultural $ — $ — $ — $ — $ 49,109 $ 49,109 $ — Commercial and industrial 5 — — 5 91,401 91,406 — Consumer 149 40 11 200 24,182 24,382 — Commercial real estate — — 73 73 139,380 139,453 — Construction real estate — — — — 8,843 8,843 — Residential real estate 1,493 486 648 2,627 93,253 95,880 — $ 1,647 $ 526 $ 732 $ 2,905 $ 406,168 $ 409,073 $ — 2017 Agricultural $ — $ — $ 83 $ 83 $ 48,381 $ 48,464 $ — Commercial and industrial 20 — — 20 104,366 104,386 — Consumer 142 38 1 181 24,332 24,513 — Commercial real estate 95 58 69 222 123,265 123,487 — Construction real estate — — — — 6,613 6,613 — Residential real estate 585 272 296 1,153 90,169 91,322 258 $ 842 $ 368 $ 449 $ 1,659 $ 397,126 $ 398,785 $ 258 (1) Includes nonaccrual loans. Nonaccrual loans by loan category as of December 31 as follows: (Dollars in thousands) 2018 2017 Agricultural $ 393 $ 423 Commercial and industrial — — Consumer 62 15 Commercial real estate 123 222 Construction real estate — — Residential real estate 954 436 $ 1,532 $ 1,096 |
Mortgage Banking
Mortgage Banking | 12 Months Ended |
Dec. 31, 2018 | |
Mortgage Banking [Abstract] | |
Mortgage Banking | Note 4 – Mortgage Banking Activity in secondary market loans during the year was as follows: (Dollars in thousands) 2018 2017 2016 Loans originated for resale, net of principal payments $ 33,555 $ 43,171 $ 53,591 Proceeds from loan sales 34,872 42,883 57,830 Net gains on sales of loans held for sale 1,003 1,265 1,748 Loan servicing fees, net of amortization 91 155 159 Net gains on sales of loans held for sale include capitalization of loan servicing rights. Loans serviced for others are not reported as assets in the accompanying consolidated balance sheets. The unpaid principal balances of these loans were $134.6 million and $122.5 million at December 31, 2018 and 2017, respectively. The Bank maintains custodial escrow balances in connection with these serviced loans; however, such escrows were immaterial at December 31, 2018 and 2017. Activity for loan servicing rights (included in other assets) was as follows: (Dollars in thousands) 2018 2017 2016 Balance, beginning of year $ 908 $ 697 $ 378 Capitalized 441 443 491 Amortization (300 ) (232 ) (172 ) Balance, end of year $ 1,049 $ 908 $ 697 The fair value of loan servicing rights was $1,700,000 and $1,402,000 as of December 31, 2018 and 2017, respectively. Consequently, a valuation allowance was not necessary at year-end 2018 or 2017. The fair value of servicing rights at December 31, 2018 was determined using a discount rate of 6.92% and prepayment speeds ranging from 7% to 13%. The fair value of servicing rights at December 31, 2017 was determined using a discount rate of 6.29% and prepayment speeds ranging from 7% to 14%. |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Premises and Equipment | Note 5 – Premises and Equipment As of December 31, premises and equipment consisted of the following: (Dollars in thousands) 2018 2017 Land and land improvements $ 5,318 $ 5,560 Leasehold improvements 38 38 Buildings 16,251 13,290 Furniture and equipment 7,357 5,932 Total cost 28,964 24,820 Accumulated depreciation (13,085 ) (11,965 ) Premises and equipment, net $ 15,879 $ 12,855 Depreciation expense was $1,183,000, $1,389,000, and $1,078,000 for 2018, 2017 and 2016, respectively. The Bank leases certain branch properties and automated-teller machine locations in its normal course of business. Rent expense totaled $108,000, $99,000, and $99,000 for 2018, 2017 and 2016, respectively. Rent commitments under non-cancelable operating leases were as follows, before considering renewal options that generally are present (dollars in thousands): 2019 $ 119 2020 122 2021 124 2022 127 2023 129 Thereafter 318 Total $ 939 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note 6 - Goodwill and Intangible Assets Goodwill There were no changes in the goodwill balance in 2018 or 2017. ChoiceOne evaluates goodwill annually for impairment. Accounting pronouncements allow a company to first perform a qualitative assessment for goodwill prior to a quantitative assessment (Step 1 assessment). If the results of the qualitative assessment indicate that it is more likely than not that goodwill is impaired, then a quantitative assessment must be performed. If not, there is no further assessment required. ChoiceOne engaged an outside consulting firm to assist management in performing its annual evaluation of goodwill for impairment during 2016. The following steps were used in the valuation: determination of the reporting unit, determination of the appropriate standard of value, determination of the appropriate level of value, calculation of fair value, and comparison of the fair value computed to the equity carrying value. It was determined that the relevant reporting unit to be valued was ChoiceOne Bank. The standard of value used in the valuation was fair value as determined by generally accepted accounting principles. The appropriate level of value was determined to be the controlling interest level. The appraisal methodology used to calculate the fair value included the income approach, which was a discounted cash flow value based on projected earnings capacity. The income approach used a discount rate of 11.50%, a growth assumption of 5.0% for assets, and an assumption of cost savings of 20% of noninterest expense as a result of synergies and cost reductions from a change in control. The appraisal methodology also included the market approach, which was based on price-to-earnings multiples, price-to-tangible book value ratios, and core deposit premiums for selected bank sale transactions. The asset approach was also an approach that was reviewed, but it was not used in determining the fair value since it did not render a control level indication of value. The results from the valuation approaches were used to calculate an estimate of the fair value of ChoiceOne’s equity, which was compared to the carrying value of equity to determine whether the Step 1 test under generally accepted accounting principles that govern the valuation of goodwill was passed. The goodwill analysis determined that the fair value of ChoiceOne’s equity exceeded the carrying value by 31%. Based on this assessment, management believed that there was no indication of goodwill impairment in 2016. Based on the third-party valuation in 2016, and the qualitative analysis performed in 2017 and 2018, no impairment of goodwill was deemed to exist as of December 31, 2018. Acquired Intangible Assets A core deposit intangible and other intangible assets were being amortized on a straight-line basis over ten years. Intangible assets were reviewed for impairment on a quarterly basis. These intangible assets were fully amortized as of the end of 2016 and had no carrying value on the balance sheet during 2017 or 2018. Aggregate amortization expense was $0 in 2018 and 2017 and $379,000 in 2016. |
Other Real Estate Owned
Other Real Estate Owned | 12 Months Ended |
Dec. 31, 2018 | |
Other Real Estate [Abstract] | |
Other Real Estate Owned | Note 7 – Other Real Estate Owned Other real estate owned represents residential and commercial properties primarily owned as a result of loan collection activities and is reported net of a valuation allowance. Activity within other real estate owned was as follows: (Dollars in thousands) 2018 2017 2016 Balance, beginning of year $ 106 $ 437 $ 31 Transfers from loans 432 314 661 Proceeds from sales (515 ) (663 ) (247 ) Gains/(losses) on sales 79 18 (8 ) Balance, end of year $ 102 $ 106 $ 437 Included in the balances above were residential real estate mortgage loans of $102,000, $106,000, and $291,000 as of December 31, 2018, 2017, and 2016, respectively, and $146,000 of commercial real estate loans as of December 31, 2016. |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2018 | |
Deposits [Abstract] | |
Deposits | Note 8 – Deposits Deposit balances as of December 31 consisted of the following: (Dollars in thousands) 2018 2017 Noninterest-bearing demand deposits $ 153,542 $ 151,462 Interest-bearing demand deposits 135,425 126,363 Money market deposits 86,720 94,178 Savings deposits 75,615 75,080 Local certificates of deposit 91,343 82,598 Brokered certificates of deposit 34,370 10,172 Total deposits $ 577,015 $ 539,853 Scheduled maturities of certificates of deposit at December 31, 2018 were as follows: (Dollars in thousands) 2019 $ 99,281 2020 15,010 2021 4,222 2022 7,163 2023 37 Total $ 125,713 The Bank had certificates of deposit issued in denominations of $250,000 or greater totaling $39.3 million and $29.8 million at December 31, 2018 and 2017, respectively. The Bank held $34.4 million in brokered certificates of deposit at December 31, 2018, compared to $10.2 million at December 31, 2017. In addition, the Bank had $2.1 million and $2.0 million of certificates of deposit as of December 31, 2018, and December 31, 2017, respectively, that had been issued through the Certificate of Deposit Account Registry Service (CDARS). Although certificates of deposit issued through CDARS are issued to local customers, this type of deposit was classified as brokered deposits for regulatory purposes as of December 31, 2017. As a result of the Economic Growth, Regulatory Relief, and Consumer Protection Act which became law in May 2018, reciprocal brokered deposits were no longer considered brokered deposits as of December 31, 2018. |
Repurchase Agreements
Repurchase Agreements | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Repurchase Agreements [Abstract] | |
Repurchase Agreements | Note 9 – Repurchase Agreements Securities sold under agreements to repurchase are advances to the Bank by customers or another bank. These agreements are direct obligations of the Bank and are secured by securities held in safekeeping at a correspondent bank. Repurchase agreements with Bank customers mature daily. Information regarding repurchase agreements follows: (Dollars in thousands) 2018 2017 Outstanding balance at December 31 $ — $ 7,148 Average interest rate at December 31 — % 0.05 % Average balance during the year $ 1,412 $ 4,958 Average interest rate during the year 0.05 % 0.05 % Maximum month end balance during the year $ 7,148 $ 8,440 |
Federal Home Loan Bank Advances
Federal Home Loan Bank Advances | 12 Months Ended |
Dec. 31, 2018 | |
Advances from Federal Home Loan Banks [Abstract] | |
Federal Home Loan Bank Advances | Note 10 – Federal Home Loan Bank Advances At December 31, advances from the FHLB were as follows: (Dollars in thousands) 2018 2017 Maturity of November 2024 with fixed interest rate of 3.98% $ 233 $ 268 Maturity of March 2019 with fixed interest rate of 2.57% 5,000 — Maturities ranging from January 2018 to April 2018, fixed interest rates ranging from 1.25% to 1.39%, with a weighted average of 1.32% — 20,000 Total advances outstanding at year-end $ 5,233 $ 20,268 Fees are charged on fixed rate advances that are paid prior to maturity. No fixed rate advances were paid prior to maturity in 2018 or 2017. Advances were secured by agricultural loans and residential real estate loans with a carrying value of approximately $96.8 million and $95.1 million at December 31, 2018 and December 31, 2017, respectively. Based on this collateral, the Bank was eligible to borrow an additional $45.5 million at year-end 2018. The scheduled maturities of advances from the FHLB at December 31, 2018 were as follows: (Dollars in thousands) 2019 $ 5,036 2020 37 2021 38 2022 40 2023 42 Thereafter 40 Total $ 5,233 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11 – Income Taxes Information as of December 31 and for the year follows: (Dollars in thousands) 2018 2017 2016 Provision for Income Taxes Current federal income tax expense $ 946 $ 2,325 $ 2,244 Deferred federal income tax expense/(benefit) 209 62 (82 ) Income tax expense $ 1,155 $ 2,387 $ 2,162 Reconciliation of Income Tax Provision to Statutory Rate Income tax computed at statutory federal rate of 21% in 2018 and 34% in 2017 and 2016 $ 1,783 $ 2,909 $ 2,806 Tax exempt interest income (309 ) (486 ) (496 ) Tax exempt earnings on bank-owned life insurance (81 ) (135 ) (121 ) Low income housing tax credits (154 ) (85 ) (45 ) Deferred tax adjustment related to reduction in U.S. federal statutory income income tax rate — 206 — Other items (84 ) (22 ) 18 Income tax expense $ 1,155 $ 2,387 $ 2,162 Effective income tax rate 14 % 28 % 26 % (Dollars in thousands) Components of Deferred Tax Assets and Liabilities 2018 2017 Deferred tax assets: Allowance for loan losses $ 981 $ 961 Unrealized losses on securities available for sale 233 — Deferred compensation 102 125 Stock compensation 22 55 Loan costs/fees deferred 66 45 Other 72 123 Total deferred tax assets 1,476 1,309 Deferred tax liabilities: Depreciation 797 644 Loan servicing rights 220 191 Unrealized gains on securities available for sale — 35 Other 88 106 Total deferred tax liabilities 1,105 976 Net deferred tax asset $ 371 $ 333 On December 22, 2017, H.R. 1, commonly known as the Tax Cuts and Jobs Act (the “Tax Act”), was signed into law. The Tax Act reduced the corporate income tax rate to 21% effective January 1, 2018 and changed certain other provisions. Accounting guidance required the Company to remeasure its deferred tax assets and liabilities as of the date of the Tax Act’s enactment using the new effective tax rate. The effect of the remeasurement is recognized in income tax expense in the year of enactment. The Company recorded $206,000 in additional income tax expense in 2017 as a result of the remeasurement of its net deferred tax asset. Concurrent with the enactment of the Tax Act, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 (“SAB 118”), which allows companies to recognize the cumulative impact of the income tax effects triggered by the enactment of the Tax Act over a period of up to twelve months in the reporting period in which the adjustment is identified. The Company applied SAB 118 and continued to refine measurement of its deferred tax asset balance during the preparation of its 2017 tax return and review of additional information throughout 2018. No significant adjustments were made to the preliminary calculations. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 12 – Related Party Transactions Loans to executive officers, directors and their affiliates were as follows at December 31: (Dollars in thousands) 2018 2017 Balance, beginning of year $ 6,477 $ 12,906 New loans 3,029 2,909 Repayments (3,835 ) (3,043 ) Effect of changes in related parties (328 ) (6,295 ) Balance, end of year $ 5,343 $ 6,477 Deposits from executive officers, directors and their affiliates were $6.3 million and $8.1 million at December 31, 2018 and 2017, respectively. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Note 13 – Employee Benefit Plans 401(k) Plan The 401(k) plan allows employees to contribute to their individual accounts under the plan amounts up to the IRS maximum. Matching company contributions to the plan are discretionary. Expense for matching company contributions under the plan was $207,000, $189,000, and $180,000 in 2018, 2017, and 2016, respectively. Employee Stock Ownership Plan Through December 31, 2015, employees participated in an Employee Stock Ownership Plan (“ESOP”). ChoiceOne could make discretionary contributions to the ESOP. Shares of ChoiceOne common stock were allocated to participants based on relative compensation earned and compensation expense was recorded when allocated. Dividends on allocated shares increased the participant accounts. Participants became fully vested upon completing six years of qualifying service. Participants received the shares at the end of employment. A participant could require stock received to be repurchased by ChoiceOne at any time. ChoiceOne did not contribute to the ESOP nor was any expense recorded in 2018, 2017, and 2016. Effective January 1, 2016, ChoiceOne terminated the ESOP and transferred shares held by the ESOP to the 401(k) plan and ChoiceOne no longer has a mandatory obligation to repurchase shares from the 401(k) plan. Post-retirement Benefits Plan ChoiceOne maintains an unfunded post-retirement health care plan, which permits employees (and their dependents) the ability to participate upon retirement from ChoiceOne. ChoiceOne does not pay any portion of the health care premiums charged to its retired participants. A liability has been accrued for the obligation under this plan. ChoiceOne incurred negative post-retirement benefit expense of $12,000, $14,000, and $18,000 in 2018, 2017, and 2016, respectively. The post-retirement obligation liability was $98,000 as of December 31, 2018 and $160,000 as of December 31, 2017. Deferred Compensation Plans A deferred director compensation plan covers former directors, which was acquired by ChoiceOne in 2006. Under the plan, ChoiceOne pays each former director the amount of director fees deferred plus interest at rates ranging from 5.50% to 5.84% over various periods as elected by each director. A liability has been accrued for the obligation under this plan. ChoiceOne incurred deferred compensation plan expense of $5,000, $7,000, and $7,000 in 2018, 2017, and 2016, respectively. The deferred compensation liability was $65,000 as of December 31, 2018 and $103,000 as of December 31, 2017. A supplemental executive retirement plan covers four former executive officers. Under the plan, ChoiceOne pays these individuals a specific amount of compensation over a 15-year period commencing upon early retirement age (as defined in the plan) or normal retirement age (as defined in the plan). A liability has been accrued for the obligation under this plan. The effective interest rate used for the accrual for the retirement liability is based on long-term interest rates. ChoiceOne incurred deferred compensation plan expense of $6,000, $12,000, and $19,000 in 2018, 2017, and 2016, respectively. Liabilities related to the supplemental executive retirement plan of $420,000 and $492,000 were outstanding as of December 31, 2018 and December 31, 2017, respectively. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Based Compensation | Note 14 - Stock Based Compensation Options to buy stock have been granted to key employees to provide them with additional equity interests in ChoiceOne. Compensation expense in connection with stock options granted was $38,000 in 2018, $49,000 in 2017, and $71,000 in 2016. The Stock Incentive Plan of 2012 was approved by the Company’s shareholders at the Annual Meeting held on April 25, 2012. The Stock Incentive Plan of 2012, as amended effective May 23, 2018, provides for the issuance of up to 200,000 shares of common stock. At December 31, 2018, there were 95,771 shares available for future grants. A summary of stock options activity was as follows: Shares Weighted Options outstanding at January 1, 2018 47,250 $ 22.32 Options granted prior to stock dividend — — Options exercised prior to stock dividend — — Options forfeited or expired prior to stock dividend — — Options outstanding prior to stock dividend 47,250 $ 22.32 Options outstanding after 5% stock dividend* 49,613 $ 21.26 Options exercised after stock dividend (6,484 ) 21.08 Options granted after stock dividend 15,000 25.65 Options outstanding at December 31, 2018 58,129 $ 22.41 Options exercisable at December 31, 2018 38,612 $ 21.52 * The 2018 balance was adjusted for the 5% stock dividend paid on May 31, 2018. The exercise prices for options outstanding and exercisable at the end of 2018 ranged from $20.86 to $25.65 per share. The weighted average remaining contractual life of options outstanding and exercisable at the end of 2018 was approximately 6.4 years. The intrinsic value of all outstanding in-the-money stock options and exercisable in-the-money stock options was $106,000 and $31,000 respectively, at December 31, 2018. The aggregate intrinsic values of outstanding and exercisable options at December 31, 2018 were calculated based on the closing market price of the Company’s common stock on December 31, 2018 of $25.00 per share less the exercise price. Information pertaining to options outstanding at December 31, 2018 was as follows: Exercise price of stock options: Number of Number of options Average $25.65 15,000 3,750 9.42 $20.86 15,707 7,440 8.68 $21.13 27,422 27,422 5.31 The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model. ChoiceOne uses historical data to estimate the volatility of the market price of ChoiceOne stock and employee terminations within the valuation model. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. As of December 31, 2018, there was $43,000 in unrecognized compensation expense related to stock options issued in 2017 and 2018. The fair value of stock options granted during 2018 was $63,000, which was determined using the following weighted-average assumptions as of the grant date. Risk-free interest rate 2.89 % Expected option life 5.75 years Expected stock price volatility 20.79 % Dividend yield 3.04 % Fair value of options granted $ 4.17 ChoiceOne has granted restricted stock units to a select group of employees under the Stock Incentive Plan of 2012. Restricted stock units vest in three annual installments on each of the next three anniversaries of the grant date. Certain additional vesting provisions apply. Each restricted stock unit, once vested, is settled by delivery of one share of ChoiceOne common stock. ChoiceOne recognized compensation expense of $244,000, $191,000, and $207,000 in 2018, 2017, and 2016, respectively, in connection with restricted stock units for current participants during these years. A summary of the activity for RSU’s during the year ended December 31, 2018 is presented below: Outstanding Stock Awards Shares Weighted Average Outstanding at January 1, 2018 18,060 $ 23.14 Granted 10,900 26.00 Vested (9,536 ) 23.15 Impact of stock dividend paid May 31, 2018 1,016 24.71 Outstanding at December 31, 2018 20,440 24.74 At December 31, 2018, there were 20,440 restricted stock units outstanding with an approximate stock value of $511,000 based on ChoiceOne’s December 31, 2018 stock price. At December 31, 2017, there were 18,060 restricted stock units outstanding with an approximate stock value of $430,000 based on ChoiceOne’s December 31, 2017 stock price. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 15 - Earnings Per Share (Dollars in thousands, except share data) 2018 2017 2016 Basic Net income $ 7,333 $ 6,168 $ 6,090 Weighted average common shares outstanding 3,614,302 3,621,216 3,624,037 Basic earnings per common shares $ 2.03 $ 1.70 $ 1.68 Diluted Net income $ 7,333 $ 6,168 $ 6,090 Weighted average common shares outstanding 3,614,302 3,621,216 3,624,037 Plus dilutive stock options and restricted stock units 13,825 8,465 5,482 Weighted average common shares outstanding and potentially dilutive shares 3,628,127 3,629,681 3,629,519 Diluted earnings per common share $ 2.02 $ 1.70 $ 1.68 Per share amounts have been adjusted for the 5% stock dividends paid on May 31, 2017 and May 31, 2018. Stock options considered anti-dilutive to earnings per share were 15,000, 0, and 30,000 as of December 31, 2018, December 31, 2017, and December 31, 2016, respectively. This calculation is based on the average stock price during the year. |
Condensed Financial Statements
Condensed Financial Statements of Parent Company | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Financial Statements of Parent Company | Note 16 – Condensed Financial Statements of Parent Company Condensed Balance Sheets (Dollars in thousands) December 31, 2018 2017 Assets Cash $ 1,400 $ 1,249 Equity securities at fair value 1,960 — Securities available for sale 1,692 3,607 Other assets 122 188 Investment in ChoiceOne Bank 75,313 71,570 Total assets $ 80,487 $ 76,614 Liabilities Other liabilities $ 10 $ 64 Total liabilities 10 64 Shareholders’ equity 80,477 76,550 Total liabilities and shareholders’ equity $ 80,487 $ 76,614 Condensed Statements of Income (Dollars in thousands) Years Ended December 31, 2018 2017 2016 Interest and dividends from ChoiceOne Bank $ 2,800 $ 3,042 $ 3,161 Interest and dividends from other securities 47 55 52 Gains on sales of securities 9 1 — Change in market value of equity securities 184 — — Total income 3,040 3,098 3,213 Other expenses 144 123 133 Income before income tax and equity in undistributed net income of subsidiary 2,896 2,975 3,080 Income tax (expense)/benefit (14 ) 73 39 Income before equity in undistributed net income of subsidiary 2,882 3,048 3,119 Equity in undistributed net income of subsidiary 4,451 3,120 2,971 Net income $ 7,333 $ 6,168 $ 6,090 Condensed Statements of Cash Flows (Dollars in thousands) Years Ended December 31, 2018 2017 2016 Cash flows from operating activities: Net income $ 7,333 $ 6,168 $ 6,090 Adjustments to reconcile net income to net cash from operating activities: Equity in undistributed net income of subsidiary (4,451 ) (3,120 ) (2,971 ) Amortization 18 19 20 Compensation expense on employee and director stock purchases, stock options, and restricted stock units 331 304 367 Net gain on sale of securities (9 ) (1 ) — Change in market value of equity securities (184 ) — — Changes in other assets 66 (37 ) (68 ) Changes in other liabilities (19 ) (39 ) (1 ) Net cash from operating activities 3,085 3,294 3,437 Cash flows from investing activities: Sales of securities 91 334 — Purchases of securities — (466 ) (1,126 ) Net cash from investing activities 91 (132 ) (1,126 ) Cash flows from financing activities: Issuance of common stock 77 98 85 Repurchase of common stock (523 ) (203 ) (794 ) Cash dividends paid (2,579 ) (2,324 ) (2,231 ) Net cash from financing activities (3,025 ) (2,429 ) (2,940 ) Net change in cash 151 733 (629 ) Beginning cash 1,249 516 1,145 Ending cash $ 1,400 $ 1,249 $ 516 |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments | Note 17 – Financial Instruments Financial instruments as of the dates indicated were as follows: (Dollars in thousands) Carrying Estimated Quoted Prices Significant Significant December 31, 2018 Assets Cash and due from banks $ 19,690 $ 19,690 $ 19,690 $ — $ — Equity securities at fair value 2,847 2,847 1,961 — 886 Securities available for sale 166,602 166,602 — 158,104 8,498 Federal Home Loan Bank and Federal Reserve Bank stock 3,567 3,567 — 3,567 — Loans held for sale 831 856 — 856 — Loans to other financial institutions 20,644 20,644 — 20,644 — Loans, net 404,400 399,091 — — 399,091 Accrued interest receivable 2,267 2,267 — 2,267 — Liabilities Noninterest-bearing deposits 153,542 153,542 — 153,542 — Interest-bearing deposits 423,473 422,381 — 422,381 — Federal funds purchased 4,800 4,800 — 4,800 — Federal Home Loan Bank advances 5,233 5,241 — 5,241 — Accrued interest payable 210 210 — 210 — December 31, 2017 Assets Cash and due from banks $ 36,837 $ 36,837 $ 36,837 $ — $ — Securities available for sale 155,591 155,591 1,892 140,301 13,398 Federal Home Loan Bank and Federal Reserve Bank stock 3,567 3,567 — 3,567 — Loans held for sale 1,721 1,773 — 1,773 — Loans to other financial institutions 6,802 6,802 — 6,802 — Loans, net 394,208 394,819 — — 394,819 Accrued interest receivable 2,146 2,146 — 2,146 — Liabilities Noninterest-bearing deposits 151,462 151,462 — 151,462 — Interest-bearing deposits 388,391 387,343 — 387,343 — Repurchase agreements 7,148 7,148 — 7,148 — Federal Home Loan Bank advances 20,268 20,271 — 20,271 — Accrued interest payable 49 49 — 49 — The estimated fair values approximate the carrying amounts for all financial instruments except those described later in this paragraph. The methodology for determining the estimated fair value for securities available for sale is described in Note 18. The estimated fair value for loans in 2017 was based on the rates charged at December 31 for new loans with similar maturities, applied until the loan is assumed to reprice or be paid. In 2018, the estimated fair value of loans follows the guidance in ASU 2016-01 which prescribes an “exit price” approach, which incorporates discounts for credit, liquidity, and marketability. The allowance for loan losses is considered to be a reasonable estimate of discount for credit quality concerns. The estimated fair value of deposits is based on comparing the average rate paid on deposits compared to the three month Libor rate which is assumed to be the replacement value of these deposits. At December 31, 2018, all average rates were lower than the three month Libor rate causing fair values to be higher than carrying amounts. The estimated fair values for time deposits and FHLB advances are based on the rates paid at December 31 for new deposits or FHLB advances, applied until maturity. The estimated fair values for other financial instruments and off-balance sheet loan commitments are considered nominal. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 18 – Fair Value Measurements The following tables present information about the Bank’s assets and liabilities measured at fair value on a recurring basis at December 31, 2018 and December 31, 2017, and the valuation techniques used by the Bank to determine those fair values. In general, fair values determined by Level 1 inputs use quoted prices in active markets for identical assets or liabilities that the Bank has the ability to access. Fair values determined by Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset or liability. In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The Bank’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability. There were no liabilities measured at fair value as of December 31, 2017 or December 31, 2018. Disclosures concerning assets measured at fair value are as follows: Assets Measured at Fair Value on a Recurring Basis Quoted Prices In Active Significant Markets for Other Significant Identical Observable Unobservable (Dollars in thousands) Assets Inputs Inputs Balance at (Level 1) (Level 2) (Level 3) Date Indicated Equity Securities Held at Fair Value - December 31, 2018 Equity securities $ 1,961 $ — $ 886 $ 2,847 Investment Securities, Available for Sale - December 31, 2018 U. S. Government and federal agency $ — $ 33,529 $ — $ 33,529 U. S. Treasury notes and bonds — 1,947 — 1,947 State and municipal — 95,930 7,998 103,928 Mortgage-backed — 21,575 — 21,575 Corporate — 5,102 — 5,102 Trust preferred securities — — 500 500 Asset backed securities — 21 — 21 Total $ — $ 158,104 $ 8,498 $ 166,602 Investment Securities, Available for Sale - December 31, 2017 U. S. Government and federal agency $ — $ 35,126 $ — $ 35,126 U. S. Treasury notes and bonds — 1,960 — 1,960 State and municipal — 88,150 11,898 100,048 Mortgage-backed — 9,820 — 9,820 Corporate — 5,151 — 5,151 Equity securities 1,892 — 1,000 2,892 Trust preferred securities — — 500 500 Asset backed securities — 94 — 94 Total $ 1,892 $ 140,301 $ 13,398 $ 155,591 Securities classified as available for sale are generally reported at fair value utilizing Level 2 inputs. ChoiceOne’s external investment advisor obtained fair value measurements from an independent pricing service that uses matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). The fair value measurements considered observable data that may include dealer quotes, market spreads, cash flows and the bonds’ terms and conditions, among other things. Securities classified in Level 2 included U.S. Government and federal agency securities, U.S. Treasury notes and bonds, state and municipal securities, mortgage-backed securities, corporate bonds, foreign debt, and asset backed securities. The Company classified certain equity securities, state and municipal securities, and trust preferred securities as Level 3. Based on the lack of observable market data, estimated fair values were based on the observable data available and reasonable unobservable market data. Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis (Dollars in thousands) 2018 2017 Equity Securities Held at Fair Value Balance, January 1 $ — $ — Reclassification due to implementation of ASU 2016-01 1,000 — Total realized and unrealized gains included in noninterest income (114 ) — Total unrealized gains/(losses) included in other comprehensive income — — Net purchases, sales, calls, and maturities — — Net transfers into Level 3 — — Balance, December 31 $ 886 $ — Investment Securities, Available for Sale Balance, January 1 $ 13,398 $ 15,103 Reclassification due to implementation of ASU 2016-01 (1,000 ) — Total realized and unrealized gains included in income — — Total unrealized gains/(losses) included in other comprehensive income (186 ) 196 Net purchases, sales, calls, and maturities (3,714 ) (1,901 ) Net transfers into Level 3 — — Balance, December 31 $ 8,498 $ 13,398 Of the Level 3 assets that were still held by the Bank at December 31, 2018, the net unrealized loss for the twelve months ended December 31, 2018 was $300,000 compared to a $196,000 unrealized gain as of December 31, 2017, which is recognized in noninterest income or other comprehensive income in the consolidated balance sheets and income statements. Amounts recognized in noninterest income relate to changes in equity securities based on ASU 2016-01, which was implemented by ChoiceOne effective January 1, 2018. A total of $224,000 and $3.2 million of Level 3 securities were purchased in 2018 and 2017, respectively. Both observable and unobservable inputs may be used to determine the fair value of positions classified as Level 3 assets and liabilities. As a result, the unrealized gains and losses for these assets and liabilities presented in the tables above may include changes in fair value that were attributable to both observable and unobservable inputs. Available for sale investment securities categorized as Level 3 assets consist of bonds issued by local municipalities and a trust-preferred security. The Bank estimates the fair value of these assets based on the present value of expected future cash flows using management’s best estimate of key assumptions, including forecasted interest yield and payment rates, credit quality and a discount rate commensurate with the current market and other risks involved. The Bank also has assets that under certain conditions are subject to measurement at fair value on a non-recurring basis. These assets are not normally measured at fair value, but can be subject to fair value adjustments in certain circumstances, such as impairment. Disclosures concerning assets measured at fair value on a non-recurring basis are as follows: Assets Measured at Fair Value on a Non-recurring Basis Quoted Prices In Active Significant Markets for Other Significant Balances at Identical Observable Unobservable (Dollars in thousands) Dates Assets Inputs Inputs Indicated (Level 1) (Level 2) (Level 3) Impaired Loans December 31, 2018 $ 4,024 $ — $ — $ 4,024 December 31, 2017 $ 4,140 $ — $ — $ 4,140 Other Real Estate December 31, 2018 $ 102 $ — $ — $ 102 December 31, 2017 $ 106 $ — $ — $ 106 Impaired loans categorized as Level 3 assets consist of non-homogeneous loans that are considered impaired. The Bank estimates the fair value of the loans based on the present value of expected future cash flows using management’s best estimate of key assumptions. These assumptions include future payment ability, timing of payment streams, and estimated realizable values of available collateral (typically based on outside appraisals). The changes in fair value consisted of charge-downs of impaired loans that were posted to the allowance for loan losses and write-downs of other real estate owned that were posted to a valuation account. The fair value of other real estate owned was based on appraisals or other reviews of property values, adjusted for estimated costs to sell. |
Off-Balance Sheet Activities
Off-Balance Sheet Activities | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Off-Balance Sheet Activities | Note 19 – Off-Balance Sheet Activities Some financial instruments, such as loan commitments, credit lines, letters of credit, and overdraft protection, are issued to meet customers’ financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment. The contractual amount of financial instruments with off-balance sheet risk was as follows at December 31: 2018 2017 Fixed Variable Fixed Variable (Dollars in thousands) Rate Rate Rate Rate Unused lines of credit and letters of credit $ 20,036 $ 103,978 $ 9,033 $ 104,257 Commitments to fund loans (at market rates) 20,997 1,421 8,633 1,225 Commitments to fund loans are generally made for periods of 180 days or less. The fixed rate loan commitments have interest rates ranging from 3.25% to 8.00% and maturities ranging from 1 years to 30 years. |
Regulatory Capital
Regulatory Capital | 12 Months Ended |
Dec. 31, 2018 | |
Banking and Thrift [Abstract] | |
Regulatory Capital | Note 20 – Regulatory Capital ChoiceOne and the Bank are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. The prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. Depending upon the capital category to which an institution is assigned, the regulators’ corrective powers include: prohibiting the acceptance of brokered deposits; requiring the submission of a capital restoration plan; placing limits on asset growth and restrictions on activities; requiring the institution to issue additional capital stock (including additional voting stock) or to be acquired; restricting transactions with affiliates; restricting the interest rate the institution may pay on deposits; ordering a new election of directors of the institution; requiring that senior executive officers or directors be dismissed; prohibiting the institution from accepting deposits from correspondent banks; requiring the institution to divest certain subsidiaries; prohibiting the payment of principal or interest on subordinated debt; and ultimately, appointing a receiver for the institution. At year-end 2018 and 2017, the Bank was categorized as well capitalized under the regulatory framework for prompt corrective action. Actual capital levels and minimum required levels for ChoiceOne and the Bank were as follows: Minimum Required to be Well Minimum Required Capitalized Under for Capital Prompt Corrective (Dollars in thousands) Actual Adequacy Purposes Action Regulations Amount Ratio Amount Ratio Amount Ratio December 31, 2018 ChoiceOne Financial Services Inc. Total capital (to risk weighted assets) $ 72,148 13.8 % $ 41,811 8.0 % N/A N/A Common equity Tier 1 capital (to risk weighted assets) 67,481 12.9 23,519 4.5 N/A N/A Tier 1 capital (to risk weighted assets) 67,481 12.9 31,359 6.0 N/A N/A Tier 1 capital (to average assets) 67,481 10.5 25,658 4.0 N/A N/A ChoiceOne Bank Total capital (to risk weighted assets) $ 66,976 12.9 % $ 41,599 8.0 % $ 51,999 10.0 % Common equity Tier 1 capital (to risk weighted assets) 62,309 12.0 23,399 4.5 33,799 6.5 Tier 1 capital (to risk weighted assets) 62,309 12.0 31,199 6.0 41,599 8.0 Tier 1 capital (to average assets) 62,309 9.8 25,512 4.0 31,890 5.0 December 31, 2017 ChoiceOne Financial Services Inc. Total capital (to risk weighted assets) $ 67,155 13.9 % $ 38,761 8.0 % N/A N/A Common equity Tier 1 capital (to risk weighted assets) 62,584 12.9 21,803 4.5 N/A N/A Tier 1 capital (to risk weighted assets) 62,584 12.9 29,071 6.0 N/A N/A Tier 1 capital (to average assets) 62,584 9.9 25,301 4.0 N/A N/A ChoiceOne Bank Total capital (to risk weighted assets) $ 62,393 12.9 % $ 38,555 8.0 % $ 48,194 10.0 % Common equity Tier 1 capital (to risk weighted assets) 57,822 12.0 21,687 4.5 31,326 6.5 Tier 1 capital (to risk weighted assets) 57,822 12.0 28,917 6.0 38,555 8.0 Tier 1 capital (to average assets) 57,822 9.2 25,156 4.0 31,445 5.0 Banking regulations limit capital distributions by state-chartered banks. Generally, capital distributions are limited to undistributed net income for the current and prior two years. At December 31, 2018, approximately $10.5 million was available for ChoiceOne Bank to pay dividends to ChoiceOne. ChoiceOne’s ability to pay dividends to shareholders is dependent on the payment of dividends from the Bank, which is restricted by state law and regulations. On July 3, 2013, the FDIC Board of Directors approved the Regulatory Capital Interim Final Rule, implementing Basel III. This rule redefines Tier 1 capital as two components (Common Equity Tier 1 and Additional Tier 1), creates a new capital ratio (Common Equity Tier 1 Risk-based Capital Ratio) and implements a capital conservation buffer. It also revises the prompt corrective action thresholds and makes changes to risk weights for certain assets and off-balance-sheet exposures. Banks were required to transition into the new rule beginning on January 1, 2015. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Note 21 – Quarterly Financial Data (Unaudited) Net Earnings Per Share (Dollars in thousands, except per share data) Interest Interest Net Fully Income Income Income Basic Diluted 2018 First Quarter $ 5,722 $ 5,330 $ 1,658 $ 0.46 $ 0.46 Second Quarter 6,141 5,595 1,833 0.51 0.51 Third Quarter 6,212 5,522 2,014 0.55 0.55 Fourth Quarter 6,450 5,617 1,828 0.51 0.50 2017 First Quarter $ 5,161 $ 4,855 $ 1,446 $ 0.40 $ 0.40 Second Quarter 5,425 5,077 1,635 0.45 0.45 Third Quarter 5,624 5,238 1,720 0.48 0.48 Fourth Quarter 5,831 5,393 1,367 0.37 0.37 Per share amounts have been adjusted for 5% stock dividends paid on May 31, 2017 and May 31, 2018. The increase that occurred during 2017 and 2018 in interest income and net interest income was due to growth in earning assets and a widening of ChoiceOne’s net interest spread resulting from rising general market interest rates. Higher net income in 2018 compared to 2017 was primarily due to the lower corporate income tax rate in effect during 2018. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include ChoiceOne Financial Services, Inc., its wholly-owned subsidiary, ChoiceOne Bank (the “Bank”), and ChoiceOne Bank’s wholly-owned subsidiary, ChoiceOne Insurance Agencies, Inc. (together referred to as “ChoiceOne”). Intercompany transactions and balances have been eliminated in consolidation. |
Nature of Operations | Nature of Operations The Bank is a full-service community bank that offers commercial, consumer, and real estate loans as well as traditional demand, savings and time deposits to both commercial and consumer clients in Kent, Muskegon, Newaygo, and Ottawa counties in Michigan. Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and real estate. Commercial loans are expected to be repaid from the cash flows from operations of businesses. Real estate loans are collateralized by either residential or commercial real estate. The Insurance Agency is a wholly-owned subsidiary of the Bank. The Insurance Agency sells insurance policies such as life and health for both commercial and consumer clients. The Insurance Agency also offers alternative investment products such as annuities and mutual funds through a registered broker. Together, the Bank and the Insurance Agency account for substantially all of ChoiceOne’s assets, revenues and operating income. |
Use of Estimates | Use of Estimates To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, ChoiceOne’s management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided. Actual results may differ from these estimates. Estimates associated with securities available for sale, the allowance for loan losses, other real estate owned, loan servicing rights, goodwill, and fair values of certain financial instruments are particularly susceptible to change. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents are defined to include cash on hand, demand deposits with other banks, and federal funds sold. Cash flows are reported on a net basis for customer loan and deposit transactions, deposits with other financial institutions, and short-term borrowings with original terms of 90 days or less. |
Securities | Securities Debt securities are classified as available for sale because they might be sold before maturity. Debt securities classified as available for sale are carried at fair value, with unrealized holding gains and losses reported separately in the accumulated other comprehensive income or loss section of shareholders’ equity, net of tax effect. Restricted investments in Federal Reserve Bank stock and Federal Home Loan Bank stock are carried at cost. Equity securities consist of investments in preferred stock and investments in common stock of other financial institutions. Effective January 1, 2018, equity securities are reported at their fair value with changes in market value flowing through net income. Prior to 2018, equity securities were accounted for in a manner similar to available for sale debt securities. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized using the level-yield method without anticipating prepayments. Gains or losses on sales are recorded on the trade date based on the amortized cost of the security sold. Management evaluates securities for other-than-temporary impairment (“OTTI”) on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. The evaluation of securities includes consideration given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, whether the market decline was affected by macroeconomic conditions and whether ChoiceOne has the intent to sell the security or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis. In analyzing an issuer’s financial condition, management may consider whether the securities are issued by the federal government or its agencies, or U.S. Government sponsored enterprises, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time. When OTTI occurs, the amount of the OTTI recognized in earnings depends on whether ChoiceOne intends to sell the security or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis. If ChoiceOne intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment. If a security is determined to be other-than-temporarily impaired, but ChoiceOne does not intend to sell the security, only the credit portion of the estimated loss is recognized in earnings, with the other portion of the loss recognized in other comprehensive income. |
Loans | Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of unearned interest, deferred loan fees and costs, and an allowance for loan losses. Loans held for sale are reported at the lower of cost or market, on an aggregate basis. Interest income on loans is reported on the interest method and includes amortization of net deferred loan fees and costs over the estimated loan term. Interest on loans is accrued based upon the principal balance outstanding. The accrual of interest is discontinued at the time at which loans are 90 days past due unless the loan is secured by sufficient collateral and is in the process of collection. Past due status is based on the contractual terms of the loan. Loans are placed into nonaccrual status or charged off at an earlier date if collection of principal or interest is considered doubtful. Interest accrued but not received is reversed against interest income when the loans are placed into nonaccrual status. Interest received on such loans is applied to principal until qualifying for return to accrual. Loans are returned to accrual basis when all the principal and interest amounts contractually due are brought current and future payment is reasonably assured. |
Loans to Other Financial Institutions | Loans to Other Financial Institutions Loans to other financial institutions are made for the purpose of providing a warehouse line of credit to facilitate funding of residential mortgage loan originations at other financial institutions. The loans are short-term in nature and are designed to provide funding for the time period between the loan origination and its subsequent sale in the secondary market. Loans to other financial institutions earn a share of interest income, determined by the contract, from when the loan is funded to when the loan is sold on the secondary market. Similar to loans held for sale, these loans are excluded from the allowance for loan losses as the risk of default is minimal during the short time period held. |
Allowance for Loan Losses | Allowance for Loan Losses The allowance for loan losses is a valuation allowance for probable incurred credit losses. The allowance for loan losses is increased by the provision for loan losses and decreased by loans charged off less any recoveries of charged off loans. Management estimates the allowance for loan losses balance required based on past loan loss experience, the nature and volume of the loan portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance for loan losses may be made for specific loans, but the entire allowance for loan losses is available for any loan that, in management’s judgment, should be charged off. Loan losses are charged against the allowance for loan losses when management believes that collection of a loan balance is not possible. The allowance for loan losses consists of general and specific components. The general component covers non-classified loans and is based on historical loss experience adjusted for current factors. The specific component relates to loans that are individually classified as impaired or loans otherwise classified as substandard or doubtful. A loan is impaired when full payment under the loan terms is not expected. Troubled debt restructuring of loans is undertaken to improve the likelihood that the loan will be repaid in full under the modified terms in accordance with a reasonable repayment schedule. All modified loans are evaluated to determine whether the loans should be reported as Troubled Debt Restructurings (TDR). A loan is a TDR when the Bank, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower by modifying a loan. To make this determination, the Bank must determine whether (a) the borrower is experiencing financial difficulties and (b) the Bank granted the borrower a concession. This determination requires consideration of all facts and circumstances surrounding the modification. An overall general decline in the economy or some deterioration in a borrower’s financial condition does not automatically mean the borrower is experiencing financial difficulties. Commercial loans are evaluated for impairment on an individual loan basis. If a loan is considered impaired or if a loan has been classified as a TDR, a portion of the allowance for loan losses is allocated to the loan so that it is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Large groups of smaller-balance homogeneous loans such as consumer and residential real estate mortgage loans are collectively evaluated for impairment and, accordingly, they are not separately identified for impairment disclosures. |
Premises and Equipment | Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation. Land is carried at cost. Land improvements are depreciated using the straight-line method with useful lives ranging from 7 to 15 years. Building and related components are depreciated using the straight-line method with useful lives ranging from 5 to 39 years. Leasehold improvements are depreciated over the shorter of the estimated life or the lease term. Furniture and equipment are depreciated using the straight-line method with useful lives ranging from 3 to 7 years. Fixed assets are periodically reviewed for impairment. If impaired, the assets are recorded at fair value. |
Other Real Estate Owned | Other Real Estate Owned Real estate properties acquired in the collection of a loan are initially recorded at the lower of the Bank’s basis in the loans or fair value at acquisition establishing a new cost basis. Any reduction to fair value from the carrying value of the related loan is accounted for as a loan loss. After acquisition, a valuation allowance reduces the reported amount to the lower of the initial amount or fair value less costs to sell. Expenses to repair or maintain properties are included within other noninterest expenses. Gains and losses upon disposition and changes in the valuation allowance are reported net within noninterest income. |
Bank Owned Life Insurance | Bank Owned Life Insurance Bank owned life insurance policies are stated at the current cash surrender value of the policy, or the policy death proceeds less any obligation to provide a death benefit to an insured’s beneficiaries if that value is less than the cash surrender value. Increases in the asset value are recorded as earnings in other income. |
Loan Servicing Rights | Loan Servicing Rights Loan servicing rights represent the allocated value of servicing rights on loans sold with servicing retained. Servicing rights are expensed in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on the fair value of the rights, using groupings of the underlying loans as to interest rates and then, secondarily, as to geographic and prepayment characteristics. Servicing rights are initially recorded at estimated fair value and fair value is determined using prices for similar assets with similar characteristics when available or based upon discounted cash flows using market-based assumptions. Any impairment of a grouping is reported as a valuation allowance. |
Goodwill | Goodwill Goodwill results from business acquisitions and represents the excess of the purchase price over the fair value of the acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment will be recognized in the period identified. |
Loan Commitments and Related Financial Instruments | Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit issued to meet financing needs of customers. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. |
Employee Benefit Plans | Employee Benefit Plans ChoiceOne’s 401(k) plan allows participants to make contributions to their individual accounts under the plan in amounts up to the IRS maximum. Employer matching contributions from ChoiceOne to its 401(k) plan are discretionary. ChoiceOne also allows retired employees to participate in its health insurance plan. Employees who have attained age 55 and completed at least ten years of service to ChoiceOne are eligible to participate as a retiree until they are eligible for Medicare. These post-retirement benefits are accrued during the years in which the employee provides service. |
Income Taxes | Income Taxes Income tax expense is the sum of the current year income tax due and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. |
Earnings per share | Earnings Per Share Basic earnings per common share (“EPS”) is based on weighted-average common shares outstanding. Diluted EPS assumes issue of any dilutive potential common shares issuable under stock options or restricted stock units granted. |
Comprehensive Income | Comprehensive Income Comprehensive income consists of net income and other comprehensive income or loss. Other comprehensive income or loss includes unrealized gains and losses on securities available for sale and changes in the funded status of post-retirement plans, net of tax, which are also recognized as a separate component of shareholders’ equity. Accumulated other comprehensive income was as follows: (Dollars in thousands) Years ended December 31, 2018 2017 Unrealized gain (loss) on available for sale securities $ (1,108 ) $ 169 Unrecognized gains on post-retirement benefits 181 132 Tax effect 195 (64 ) Accumulated other comprehensive income (loss) $ (732 ) $ 237 |
Loss Contingencies | Loss Contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe that there are any such matters that may have a material effect on the financial statements as of December 31, 2018. |
Cash Restrictions | Cash Restrictions Cash on hand or on deposit with the Federal Reserve Bank of $781,000 and $810,000 was required to meet regulatory reserve and clearing requirements at December 31, 2018 and 2017, respectively. The balance in excess of the amount required was interest-bearing as of December 31, 2018 and December 31, 2017. |
Stock-Based Compensation | Stock-Based Compensation The Company values share-based stock option awards granted using the Black-Scholes option-pricing model. The Company recognizes compensation expense for its awards on a straight-line basis over the requisite service period for the entire award (straight-line attribution method), ensuring that the amount of compensation cost recognized at any date at least equals the portion of the grant-date fair value of the award that is vested at that time. Compensation costs related to stock options granted are disclosed in Note 14. ChoiceOne has granted restricted stock units to a select group of employees under the Stock Incentive Plan of 2012. Restricted stock units vest in three annual installments on each of the next three anniversaries of the grant date. Certain additional vesting provisions apply. Each unit, once vested, is settled by delivery of one share of ChoiceOne common stock. |
Dividend Restrictions | Dividend Restrictions Banking regulations require the maintenance of certain capital levels and may limit the amount of dividends that may be paid by the Bank to ChoiceOne (see Note 20). |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair values of financial instruments are estimated using relevant market information and other assumptions, which are more fully documented in Note 18 to the consolidated financial statements. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. |
Operating Segments | Operating Segments While ChoiceOne’s management monitors the revenue streams of various products and services for the Bank and Insurance Agency, operations and financial performance are evaluated on a company-wide basis. Accordingly, all of the financial service operations are considered by management to be aggregated into one reportable operating segment. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606) The FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities The FASB issued ASU 2016-02, Leases The FASB issued ASU No. 2016-13 , Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments The FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. This ASU improves the effectiveness of disclosures in the notes to financial statements by facilitating clear communication of the information required by generally accepted accounting principles that is most important to users of each entity’s financial statements. The objective of improving the effectiveness will include the development of a framework that promotes consistent decisions by FASB about disclosure requirements and the appropriate exercise of discretion by reporting entities. This ASU is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019. Management is currently evaluating the impact of this new ASU on its consolidated financial statements. |
Reclassifications | Reclassifications |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of accumulated other comprehensive income | Accumulated other comprehensive income was as follows: (Dollars in thousands) Years ended December 31, 2018 2017 Unrealized gain (loss) on available for sale securities $ (1,108 ) $ 169 Unrecognized gains on post-retirement benefits 181 132 Tax effect 195 (64 ) Accumulated other comprehensive income (loss) $ (732 ) $ 237 |
Securities (Tables)
Securities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of fair value of securities | The fair value of equity securities and the related gross unrealized gains and losses recognized in noninterest income at December 31 were as follows: 2018 Gross Gross (Dollars in thousands) Amortized Unrealized Unrealized Fair Cost Gains Losses Value Equity securities $ 2,502 459 (114 ) 2,847 |
Schedule of fair value of securities available for sale | The fair value of securities available for sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) at December 31 were as follows: 2018 Gross Gross (Dollars in thousands) Amortized Unrealized Unrealized Fair Cost Gains Losses Value U.S. Government and federal agency $ 34,079 $ 1 $ (551 ) $ 33,529 U.S. Treasury notes and bonds 1,992 — (45 ) 1,947 State and municipal 104,317 544 (933 ) 103,928 Mortgage-backed 21,654 126 (205 ) 21,575 Corporate 5,147 1 (46 ) 5,102 Trust preferred securities 500 — — 500 Asset-backed securities 21 — — 21 Total $ 167,710 $ 672 $ (1,780 ) $ 166,602 2017 Gross Gross (Dollars in thousands) Amortized Unrealized Unrealized Fair Cost Gains Losses Value U.S. Government and federal agency $ 35,518 $ — $ (392 ) $ 35,126 U.S. Treasury notes and bonds 1,991 — (31 ) 1,960 State and municipal 99,609 910 (471 ) 100,048 Mortgage-backed 9,943 8 (131 ) 9,820 Corporate 5,184 2 (35 ) 5,151 Equity securities 2,583 309 — 2,892 Trust preferred securities 500 — — 500 Asset-backed securities 95 — (1 ) 94 Total $ 155,423 $ 1,229 $ (1,061 ) $ 155,591 |
Schedule of sales of equity securities and securities available for sale | Information regarding sales of equity securities and securities available for sale for the year ended December 31 follows: (Dollars in thousands) 2018 2017 2016 Proceeds from sales of securities $ 2,725 $ 57,628 $ 15,317 Gross realized gains 42 184 312 Gross realized losses 8 464 — |
Schedule of contractual maturities of equity securities and securities available for sale | Contractual maturities of equity securities and securities available for sale at December 31, 2018 were as follows: (Dollars in thousands) Amortized Fair Cost Value Due within one year $ 30,224 $ 30,390 Due after one year through five years 69,299 68,809 Due after five years through ten years 44,108 43,895 Due after ten years 2,425 1,933 Total debt securities 146,056 145,027 Mortgage-backed securities 21,654 21,575 Equity securities 2,502 2,847 Total $ 170,212 $ 169,449 |
Schedule of securities pledged as collateral | The carrying amount of securities pledged as collateral at December 31 was as follows: (Dollars in thousands) 2018 2017 Securities pledged for securities sold under agreements to repurchase $ — $ 9,902 Security pledged for Community Reinvestment Act credits 257 262 Total $ 257 $ 10,164 |
Schedule of securities in a continuous unrealized loss position | Securities with unrealized losses at year-end 2018 and 2017, aggregated by investment category and length of time the individual securities have been in an unrealized loss position, were as follows: 2018 Less than 12 months More than 12 months Total (Dollars in thousands) Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses U.S. Government and federal agency $ — $ — $ 31,499 $ (551 ) $ 31,499 $ (551 ) U.S. Treasury notes and bonds — — 1,947 (45 ) 1,947 (45 ) State and municipal 9,726 (36 ) 56,763 (897 ) 66,489 (933 ) Mortgage-backed 5,384 (28 ) 7,443 (177 ) 12,827 (205 ) Corporate — — 4,604 (46 ) 4,604 (46 ) Equity securities 886 (114 ) — — 886 (114 ) Total temporarily impaired $ 15,996 $ (178 ) $ 102,256 $ (1,716 ) $ 118,252 $ (1,894 ) 2017 Less than 12 months More than 12 months Total (Dollars in thousands) Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses U.S. Government and federal agency $ 20,297 $ (190 ) $ 9,798 $ (202 ) $ 30,095 $ (392 ) U.S. Treasury notes and bonds 1,960 (31 ) — — 1,960 (31 ) State and municipal 38,887 (319 ) 6,889 (152 ) 45,776 (471 ) Mortgage-backed 8,481 (104 ) 838 (27 ) 9,319 (131 ) Corporate 2,471 (17 ) 687 (18 ) 3,158 (35 ) Asset-backed securities — — 94 (1 ) 94 (1 ) Total temporarily impaired $ 72,096 $ (661 ) $ 18,306 $ (400 ) $ 90,402 $ (1,061 ) |
Schedule of unrealized gains and losses on equity securities | Following is information regarding unrealized gains and losses on equity securities for the year ending December 31, 2018: 2018 New gains and losses recognized during the period $ 71 Less: Net gains and losses recognized during the period on securities sold 9 Unrealized gains and losses recognized during the reporting period on securities still held at the reporting date $ 62 |
Loans and Allowance for Loan _2
Loans and Allowance for Loan Losses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of loan portfolio | The Bank’s loan portfolio as of December 31 was as follows: (Dollars in thousands) 2018 2017 Agricultural $ 49,109 $ 48,464 Commercial and industrial 91,406 104,386 Consumer 24,382 24,513 Real estate - commercial 139,453 123,487 Real estate - construction 8,843 6,613 Real estate - residential 95,880 91,322 Loans, gross 409,073 398,785 Allowance for loan losses (4,673 ) (4,577 ) Loans, net $ 404,400 $ 394,208 |
Schedule of activity in the allowance for loan losses and balances in the loan portfolio | Activity in the allowance for loan losses and balances in the loan portfolio was as follows: (Dollars in thousands) Commercial Commercial Construction Residential Agricultural and Industrial Consumer Real Estate Real Estate Real Estate Unallocated Total 2018 Allowance for Loan Losses Beginning balance $ 506 $ 1,001 $ 262 $ 1,761 $ 35 $ 726 $ 286 $ 4,577 Charge-offs — (58 ) (282 ) — — (25 ) — (365 ) Recoveries 33 107 112 61 — 113 — 426 Provision (58 ) (158 ) 162 104 3 (277 ) 259 35 Ending balance $ 481 $ 892 $ 254 $ 1,926 $ 38 $ 537 $ 545 $ 4,673 Individually evaluated for impairment $ 94 $ 3 $ 13 $ 20 $ — $ 167 $ — $ 297 Collectively evaluated for impairment $ 387 $ 889 $ 241 $ 1,906 $ 38 $ 370 $ 545 $ 4,376 Loans Individually evaluated for impairment $ 578 $ 21 $ 90 $ 623 $ — $ 2,712 $ 4,024 Collectively evaluated for impairment 48,531 91,385 24,292 138,830 8,843 93,168 405,049 Ending balance $ 49,109 $ 91,406 $ 24,382 $ 139,453 $ 8,843 $ 95,880 $ 409,073 (Dollars in thousands) Commercial Commercial Construction Residential Agricultural and Industrial Consumer Real Estate Real Estate Real Estate Unallocated Total 2017 Allowance for Loan Losses Beginning balance $ 433 $ 688 $ 305 $ 1,438 $ 62 $ 1,013 $ 338 $ 4,277 Charge-offs — (439 ) (253 ) — — (43 ) — (735 ) Recoveries — 21 169 258 40 62 — 550 Provision 73 731 41 65 (67 ) (306 ) (52 ) 485 Ending balance $ 506 $ 1,001 $ 262 $ 1,761 $ 35 $ 726 $ 286 $ 4,577 Individually evaluated for impairment $ — $ 26 $ 3 $ 49 $ — $ 224 $ — $ 302 Collectively evaluated for impairment $ 506 $ 975 $ 259 $ 1,712 $ 35 $ 502 $ 286 $ 4,275 Loans Individually evaluated for impairment $ 423 $ 124 $ 36 $ 778 $ — $ 2,779 $ 4,140 Collectively evaluated for impairment 48,041 104,262 24,477 122,709 6,613 88,543 394,645 Ending balance $ 48,464 $ 104,386 $ 24,513 $ 123,487 $ 6,613 $ 91,322 $ 398,785 (Dollars in thousands) Commercial Commercial Construction Residential Agricultural and Industrial Consumer Real Estate Real Estate Real Estate Unallocated Total 2016 Allowance for Loan Losses Beginning balance $ 420 $ 586 $ 297 $ 1,030 $ 46 $ 1,388 $ 427 $ 4,194 Charge-offs — (37 ) (218 ) — — (102 ) — (357 ) Recoveries — 31 149 89 — 171 — 440 Provision 13 108 77 319 16 (444 ) (89 ) — Ending balance $ 433 $ 688 $ 305 $ 1,438 $ 62 $ 1,013 $ 338 $ 4,277 Individually evaluated for impairment $ 3 $ 11 $ 2 $ 91 $ — $ 296 $ — $ 403 Collectively evaluated for impairment $ 430 $ 677 $ 303 $ 1,347 $ 62 $ 717 $ 338 $ 3,874 Loans Individually evaluated for impairment $ 526 $ 301 $ 28 $ 1,073 $ — $ 2,983 $ 4,911 Collectively evaluated for impairment 44,088 95,787 21,568 109,689 6,153 86,804 364,089 Ending balance $ 44,614 $ 96,088 $ 21,596 $ 110,762 $ 6,153 $ 89,787 $ 369,000 |
Schedule of the bank's credit exposure | Corporate Credit Exposure - Credit Risk Profile By Creditworthiness Category (Dollars in thousands) Agricultural Commercial and Industrial Commercial Real Estate 2018 2017 2018 2017 2018 2017 Risk ratings 1 and 2 $ 15,300 $ 14,813 $ 11,972 $ 13,491 $ 7,962 $ 8,227 Risk rating 3 23,938 22,721 50,266 63,366 89,173 78,868 Risk rating 4 9,082 10,199 23,961 26,943 36,193 33,429 Risk rating 5 211 308 5,204 491 4,850 1,533 Risk rating 6 578 423 3 95 1,275 1,430 $ 49,109 $ 48,464 $ 91,406 $ 104,386 $ 139,453 $ 123,487 Consumer Credit Exposure - Credit Risk Profile Based On Payment Activity (Dollars in thousands) Consumer Construction Real Estate Residential Real Estate 2018 2017 2018 2017 2018 2017 Performing $ 24,320 $ 24,497 $ 8,843 $ 6,613 $ 94,925 $ 90,629 Nonperforming — 1 — — — 257 Nonaccrual 62 15 — — 955 436 $ 24,382 $ 24,513 $ 8,843 $ 6,613 $ 95,880 $ 91,322 |
Schedule of troubled debt restructurings | The following schedule provides information on loans that were considered troubled debt restructurings (“TDRs”) that were modified during the twelve months ended December 31, 2018 and December 31, 2017. December 31, 2018 December 31, 2017 Pre- Post- Pre- Post- Modification Modification Modification Modification Outstanding Outstanding Outstanding Outstanding (Dollars in thousands) Number of Recorded Recorded Number of Recorded Recorded Loans Investment Investment Loans Investment Investment Residential real estate — $ — $ — 3 $ 296 $ 296 |
Schedule of impaired loans | Impaired loans by loan category as of December 31 were as follows: Unpaid Average Interest (Dollars in thousands) Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized 2018 With no related allowance recorded Agricultural $ 185 $ 185 $ — $ 291 $ — Commercial and industrial — — — 29 2 Consumer 1 1 — 2 8 Construction real estate — — — 54 — Commercial real estate 74 109 — 78 30 Residential real estate 250 261 — 177 114 Subtotal 510 556 — 631 154 With an allowance recorded Agricultural 393 440 94 161 13 Commercial and industrial 21 21 3 296 — Consumer 88 88 13 59 — Construction real estate — — — — — Commercial real estate 550 609 20 692 — Residential real estate 2,462 2,494 167 2,523 6 Subtotal 3,514 3,652 297 3,731 19 Total Agricultural 578 625 94 452 13 Commercial and industrial 21 21 3 325 2 Consumer 90 90 13 61 8 Construction real estate — — — 54 — Commercial real estate 623 718 20 770 30 Residential real estate 2,712 2,755 167 2,700 120 Total $ 4,024 $ 4,209 $ 297 $ 4,362 $ 173 Unpaid Average Interest (Dollars in thousands) Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized 2017 With no related allowance recorded Agricultural $ 423 $ 455 $ — $ 322 $ — Commercial and industrial — — — 103 — Consumer — — — — — Commercial real estate 127 258 — 110 — Residential real estate 115 126 — 106 4 Subtotal 665 839 — 641 4 With an allowance recorded Agricultural — — — 121 — Commercial and industrial 124 124 26 177 1 Consumer 36 36 3 33 1 Commercial real estate 651 734 49 826 34 Residential real estate 2,664 2,690 224 2,522 110 Subtotal 3,475 3,584 302 3,679 146 Total Agricultural 423 455 — 443 — Commercial and industrial 124 124 26 280 1 Consumer 36 36 3 33 1 Commercial real estate 778 992 49 936 34 Residential real estate 2,779 2,816 224 2,628 114 Total $ 4,140 $ 4,423 $ 302 $ 4,320 $ 150 Unpaid Average Interest (Dollars in thousands) Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized 2016 With no related allowance recorded Agricultural $ 482 $ 485 $ — $ 220 $ 13 Commercial and industrial 206 207 — 91 3 Consumer — — — 1 — Commercial real estate 342 939 — 925 2 Residential real estate 301 292 — 167 5 Subtotal 1,331 1,923 — 1,404 23 With an allowance recorded Agricultural 44 44 3 72 3 Commercial and industrial 95 95 11 218 — Consumer 28 28 2 24 2 Commercial real estate 731 804 91 1,281 33 Residential real estate 2,682 2,711 296 2,672 108 Subtotal 3,580 3,682 403 4,267 146 Total Agricultural 526 529 3 292 16 Commercial and industrial 301 302 11 309 3 Consumer 28 28 2 25 2 Commercial real estate 1,073 1,743 91 2,206 35 Residential real estate 2,983 3,003 296 2,839 113 Total $ 4,911 $ 5,605 $ 403 $ 5,671 $ 169 |
Schedule of aging analysis of loans by loan category | An aging analysis of loans by loan category as of December 31 follows: Loans Loans Loans Past Due Loans Past Due Past Due Greater 90 Days Past (Dollars in thousands) 30 to 59 60 to 89 Than 90 Loans Not Total Due and Days (1) Days (1) Days (1) Total (1) Past Due Loans Accruing 2018 Agricultural $ — $ — $ — $ — $ 49,109 $ 49,109 $ — Commercial and industrial 5 — — 5 91,401 91,406 — Consumer 149 40 11 200 24,182 24,382 — Commercial real estate — — 73 73 139,380 139,453 — Construction real estate — — — — 8,843 8,843 — Residential real estate 1,493 486 648 2,627 93,253 95,880 — $ 1,647 $ 526 $ 732 $ 2,905 $ 406,168 $ 409,073 $ — 2017 Agricultural $ — $ — $ 83 $ 83 $ 48,381 $ 48,464 $ — Commercial and industrial 20 — — 20 104,366 104,386 — Consumer 142 38 1 181 24,332 24,513 — Commercial real estate 95 58 69 222 123,265 123,487 — Construction real estate — — — — 6,613 6,613 — Residential real estate 585 272 296 1,153 90,169 91,322 258 $ 842 $ 368 $ 449 $ 1,659 $ 397,126 $ 398,785 $ 258 (1) Includes nonaccrual loans. |
Schedule of nonaccrual loans by loan category | Nonaccrual loans by loan category as of December 31 as follows: (Dollars in thousands) 2018 2017 Agricultural $ 393 $ 423 Commercial and industrial — — Consumer 62 15 Commercial real estate 123 222 Construction real estate — — Residential real estate 954 436 $ 1,532 $ 1,096 |
Mortgage Banking (Tables)
Mortgage Banking (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Mortgage Banking [Abstract] | |
Schedule of activity in secondary market loans | Activity in secondary market loans during the year was as follows: (Dollars in thousands) 2018 2017 2016 Loans originated for resale, net of principal payments $ 33,555 $ 43,171 $ 53,591 Proceeds from loan sales 34,872 42,883 57,830 Net gains on sales of loans held for sale 1,003 1,265 1,748 Loan servicing fees, net of amortization 91 155 159 |
Schedule of activity for loan servicing rights (included in other assets) | Activity for loan servicing rights (included in other assets) was as follows: (Dollars in thousands) 2018 2017 2016 Balance, beginning of year $ 908 $ 697 $ 378 Capitalized 441 443 491 Amortization (300 ) (232 ) (172 ) Balance, end of year $ 1,049 $ 908 $ 697 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of premises and equipment | Note 5 – Premises and Equipment As of December 31, premises and equipment consisted of the following: (Dollars in thousands) 2018 2017 Land and land improvements $ 5,318 $ 5,560 Leasehold improvements 38 38 Buildings 16,251 13,290 Furniture and equipment 7,357 5,932 Total cost 28,964 24,820 Accumulated depreciation (13,085 ) (11,965 ) Premises and equipment, net $ 15,879 $ 12,855 |
Schedule of rent commitments under non-cancelable operating leases | Rent commitments under non-cancelable operating leases were as follows, before considering renewal options that generally are present (dollars in thousands): 2019 $ 119 2020 122 2021 124 2022 127 2023 129 Thereafter 318 Total $ 939 |
Other Real Estate Owned (Tables
Other Real Estate Owned (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Real Estate [Abstract] | |
Schedule of other real estate owned | Activity within other real estate owned was as follows: (Dollars in thousands) 2018 2017 2016 Balance, beginning of year $ 106 $ 437 $ 31 Transfers from loans 432 314 661 Proceeds from sales (515 ) (663 ) (247 ) Gains/(losses) on sales 79 18 (8 ) Balance, end of year $ 102 $ 106 $ 437 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deposits [Abstract] | |
Schedule of deposits outstanding | Deposit balances as of December 31 consisted of the following: (Dollars in thousands) 2018 2017 Noninterest-bearing demand deposits $ 153,542 $ 151,462 Interest-bearing demand deposits 135,425 126,363 Money market deposits 86,720 94,178 Savings deposits 75,615 75,080 Local certificates of deposit 91,343 82,598 Brokered certificates of deposit 34,370 10,172 Total deposits $ 577,015 $ 539,853 |
Schedule of maturities of time deposits | Scheduled maturities of certificates of deposit at December 31, 2018 were as follows: (Dollars in thousands) 2019 $ 99,281 2020 15,010 2021 4,222 2022 7,163 2023 37 Total $ 125,713 |
Repurchase Agreements (Tables)
Repurchase Agreements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Repurchase Agreements [Abstract] | |
Schedule of securities sold under repurchase agreements | (Dollars in thousands) 2018 2017 Outstanding balance at December 31 $ — $ 7,148 Average interest rate at December 31 — % 0.05 % Average balance during the year $ 1,412 $ 4,958 Average interest rate during the year 0.05 % 0.05 % Maximum month end balance during the year $ 7,148 $ 8,440 |
Federal Home Loan Bank Advanc_2
Federal Home Loan Bank Advances (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Advances from Federal Home Loan Banks [Abstract] | |
Schedule of outstanding advances from the Federal Home Loan Bank | At December 31, advances from the FHLB were as follows: (Dollars in thousands) 2018 2017 Maturity of November 2024 with fixed interest rate of 3.98% $ 233 $ 268 Maturity of March 2019 with fixed interest rate of 2.57% 5,000 — Maturities ranging from January 2018 to April 2018, fixed interest rates ranging from 1.25% to 1.39%, with a weighted average of 1.32% — 20,000 Total advances outstanding at year-end $ 5,233 $ 20,268 |
Schedule of maturities of FHLB Advances | The scheduled maturities of advances from the FHLB at December 31, 2018 were as follows: (Dollars in thousands) 2019 $ 5,036 2020 37 2021 38 2022 40 2023 42 Thereafter 40 Total $ 5,233 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Reconciliation of Income Tax Expense | Information as of December 31 and for the year follows: (Dollars in thousands) 2018 2017 2016 Provision for Income Taxes Current federal income tax expense $ 946 $ 2,325 $ 2,244 Deferred federal income tax expense/(benefit) 209 62 (82 ) Income tax expense $ 1,155 $ 2,387 $ 2,162 Reconciliation of Income Tax Provision to Statutory Rate Income tax computed at statutory federal rate of 21% in 2018 and 34% in 2017 and 2016 $ 1,783 $ 2,909 $ 2,806 Tax exempt interest income (309 ) (486 ) (496 ) Tax exempt earnings on bank-owned life insurance (81 ) (135 ) (121 ) Low income housing tax credits (154 ) (85 ) (45 ) Deferred tax adjustment related to reduction in U.S. federal statutory income income tax rate — 206 — Other items (84 ) (22 ) 18 Income tax expense $ 1,155 $ 2,387 $ 2,162 Effective income tax rate 14 % 28 % 26 % |
Schedule of deferred tax assets and liabilities | (Dollars in thousands) Components of Deferred Tax Assets and Liabilities 2018 2017 Deferred tax assets: Allowance for loan losses $ 981 $ 961 Unrealized losses on securities available for sale 233 — Deferred compensation 102 125 Stock compensation 22 55 Loan costs/fees deferred 66 45 Other 72 123 Total deferred tax assets 1,476 1,309 Deferred tax liabilities: Depreciation 797 644 Loan servicing rights 220 191 Unrealized gains on securities available for sale — 35 Other 88 106 Total deferred tax liabilities 1,105 976 Net deferred tax asset $ 371 $ 333 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of related party loans | Loans to executive officers, directors and their affiliates were as follows at December 31: (Dollars in thousands) 2018 2017 Balance, beginning of year $ 6,477 $ 12,906 New loans 3,029 2,909 Repayments (3,835 ) (3,043 ) Effect of changes in related parties (328 ) (6,295 ) Balance, end of year $ 5,343 $ 6,477 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock option activity | A summary of stock options activity was as follows: Shares Weighted Options outstanding at January 1, 2018 47,250 $ 22.32 Options granted prior to stock dividend — — Options exercised prior to stock dividend — — Options forfeited or expired prior to stock dividend — — Options outstanding prior to stock dividend 47,250 $ 22.32 Options outstanding after 5% stock dividend* 49,613 $ 21.26 Options exercised after stock dividend (6,484 ) 21.08 Options granted after stock dividend 15,000 25.65 Options outstanding at December 31, 2018 58,129 $ 22.41 Options exercisable at December 31, 2018 38,612 $ 21.52 * The 2018 balance was adjusted for the 5% stock dividend paid on May 31, 2018. |
Schedule of outstanding stock options | Information pertaining to options outstanding at December 31, 2018 was as follows: Exercise price of stock options: Number of Number of options Average $25.65 15,000 3,750 9.42 $20.86 15,707 7,440 8.68 $21.13 27,422 27,422 5.31 |
Schedule of weighted-average assumptions as of the grant date | The fair value of stock options granted during 2018 was $63,000, which was determined using the following weighted-average assumptions as of the grant date. Risk-free interest rate 2.89 % Expected option life 5.75 years Expected stock price volatility 20.79 % Dividend yield 3.04 % Fair value of options granted $ 4.17 |
Schedule of activity for RSUs | A summary of the activity for RSU’s during the year ended December 31, 2018 is presented below: Outstanding Stock Awards Shares Weighted Average Outstanding at January 1, 2018 18,060 $ 23.14 Granted 10,900 26.00 Vested (9,536 ) 23.15 Impact of stock dividend paid May 31, 2018 1,016 24.71 Outstanding at December 31, 2018 20,440 24.74 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share | (Dollars in thousands, except share data) 2018 2017 2016 Basic Net income $ 7,333 $ 6,168 $ 6,090 Weighted average common shares outstanding 3,614,302 3,621,216 3,624,037 Basic earnings per common shares $ 2.03 $ 1.70 $ 1.68 Diluted Net income $ 7,333 $ 6,168 $ 6,090 Weighted average common shares outstanding 3,614,302 3,621,216 3,624,037 Plus dilutive stock options and restricted stock units 13,825 8,465 5,482 Weighted average common shares outstanding and potentially dilutive shares 3,628,127 3,629,681 3,629,519 Diluted earnings per common share $ 2.02 $ 1.70 $ 1.68 |
Condensed Financial Statement_2
Condensed Financial Statements of Parent Company (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of condensed balance sheets | Condensed Balance Sheets (Dollars in thousands) December 31, 2018 2017 Assets Cash $ 1,400 $ 1,249 Equity securities at fair value 1,960 — Securities available for sale 1,692 3,607 Other assets 122 188 Investment in ChoiceOne Bank 75,313 71,570 Total assets $ 80,487 $ 76,614 Liabilities Other liabilities $ 10 $ 64 Total liabilities 10 64 Shareholders’ equity 80,477 76,550 Total liabilities and shareholders’ equity $ 80,487 $ 76,614 |
Schedule of condensed statements of income | Condensed Statements of Income (Dollars in thousands) Years Ended December 31, 2018 2017 2016 Interest and dividends from ChoiceOne Bank $ 2,800 $ 3,042 $ 3,161 Interest and dividends from other securities 47 55 52 Gains on sales of securities 9 1 — Change in market value of equity securities 184 — — Total income 3,040 3,098 3,213 Other expenses 144 123 133 Income before income tax and equity in undistributed net income of subsidiary 2,896 2,975 3,080 Income tax (expense)/benefit (14 ) 73 39 Income before equity in undistributed net income of subsidiary 2,882 3,048 3,119 Equity in undistributed net income of subsidiary 4,451 3,120 2,971 Net income $ 7,333 $ 6,168 $ 6,090 |
Schedule of condensed statements of cash flows | Condensed Statements of Cash Flows (Dollars in thousands) Years Ended December 31, 2018 2017 2016 Cash flows from operating activities: Net income $ 7,333 $ 6,168 $ 6,090 Adjustments to reconcile net income to net cash from operating activities: Equity in undistributed net income of subsidiary (4,451 ) (3,120 ) (2,971 ) Amortization 18 19 20 Compensation expense on employee and director stock purchases, stock options, and restricted stock units 331 304 367 Net gain on sale of securities (9 ) (1 ) — Change in market value of equity securities (184 ) — — Changes in other assets 66 (37 ) (68 ) Changes in other liabilities (19 ) (39 ) (1 ) Net cash from operating activities 3,085 3,294 3,437 Cash flows from investing activities: Sales of securities 91 334 — Purchases of securities — (466 ) (1,126 ) Net cash from investing activities 91 (132 ) (1,126 ) Cash flows from financing activities: Issuance of common stock 77 98 85 Repurchase of common stock (523 ) (203 ) (794 ) Cash dividends paid (2,579 ) (2,324 ) (2,231 ) Net cash from financing activities (3,025 ) (2,429 ) (2,940 ) Net change in cash 151 733 (629 ) Beginning cash 1,249 516 1,145 Ending cash $ 1,400 $ 1,249 $ 516 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, All Other Investments [Abstract] | |
Schedule of carrying value and fair value of financial assets and liabilities | Financial instruments as of the dates indicated were as follows: (Dollars in thousands) Carrying Estimated Quoted Prices Significant Significant December 31, 2018 Assets Cash and due from banks $ 19,690 $ 19,690 $ 19,690 $ — $ — Equity securities at fair value 2,847 2,847 1,961 — 886 Securities available for sale 166,602 166,602 — 158,104 8,498 Federal Home Loan Bank and Federal Reserve Bank stock 3,567 3,567 — 3,567 — Loans held for sale 831 856 — 856 — Loans to other financial institutions 20,644 20,644 — 20,644 — Loans, net 404,400 399,091 — — 399,091 Accrued interest receivable 2,267 2,267 — 2,267 — Liabilities Noninterest-bearing deposits 153,542 153,542 — 153,542 — Interest-bearing deposits 423,473 422,381 — 422,381 — Federal funds purchased 4,800 4,800 — 4,800 — Federal Home Loan Bank advances 5,233 5,241 — 5,241 — Accrued interest payable 210 210 — 210 — December 31, 2017 Assets Cash and due from banks $ 36,837 $ 36,837 $ 36,837 $ — $ — Securities available for sale 155,591 155,591 1,892 140,301 13,398 Federal Home Loan Bank and Federal Reserve Bank stock 3,567 3,567 — 3,567 — Loans held for sale 1,721 1,773 — 1,773 — Loans to other financial institutions 6,802 6,802 — 6,802 — Loans, net 394,208 394,819 — — 394,819 Accrued interest receivable 2,146 2,146 — 2,146 — Liabilities Noninterest-bearing deposits 151,462 151,462 — 151,462 — Interest-bearing deposits 388,391 387,343 — 387,343 — Repurchase agreements 7,148 7,148 — 7,148 — Federal Home Loan Bank advances 20,268 20,271 — 20,271 — Accrued interest payable 49 49 — 49 — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets measured at fair value on a recurring basis | Assets Measured at Fair Value on a Recurring Basis Quoted Prices In Active Significant Markets for Other Significant Identical Observable Unobservable (Dollars in thousands) Assets Inputs Inputs Balance at (Level 1) (Level 2) (Level 3) Date Indicated Equity Securities Held at Fair Value - December 31, 2018 Equity securities $ 1,961 $ — $ 886 $ 2,847 Investment Securities, Available for Sale - December 31, 2018 U. S. Government and federal agency $ — $ 33,529 $ — $ 33,529 U. S. Treasury notes and bonds — 1,947 — 1,947 State and municipal — 95,930 7,998 103,928 Mortgage-backed — 21,575 — 21,575 Corporate — 5,102 — 5,102 Trust preferred securities — — 500 500 Asset backed securities — 21 — 21 Total $ — $ 158,104 $ 8,498 $ 166,602 Investment Securities, Available for Sale - December 31, 2017 U. S. Government and federal agency $ — $ 35,126 $ — $ 35,126 U. S. Treasury notes and bonds — 1,960 — 1,960 State and municipal — 88,150 11,898 100,048 Mortgage-backed — 9,820 — 9,820 Corporate — 5,151 — 5,151 Equity securities 1,892 — 1,000 2,892 Trust preferred securities — — 500 500 Asset backed securities — 94 — 94 Total $ 1,892 $ 140,301 $ 13,398 $ 155,591 |
Schedule of changes in Level 3 assets measured at fair value on a recurring basis | Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis (Dollars in thousands) 2018 2017 Equity Securities Held at Fair Value Balance, January 1 $ — $ — Reclassification due to implementation of ASU 2016-01 1,000 — Total realized and unrealized gains included in noninterest income (114 ) — Total unrealized gains/(losses) included in other comprehensive income — — Net purchases, sales, calls, and maturities — — Net transfers into Level 3 — — Balance, December 31 $ 886 $ — Investment Securities, Available for Sale Balance, January 1 $ 13,398 $ 15,103 Reclassification due to implementation of ASU 2016-01 (1,000 ) — Total realized and unrealized gains included in income — — Total unrealized gains/(losses) included in other comprehensive income (186 ) 196 Net purchases, sales, calls, and maturities (3,714 ) (1,901 ) Net transfers into Level 3 — — Balance, December 31 $ 8,498 $ 13,398 |
Schedule of assets measured at fair value on a nonrecurring basis | Assets Measured at Fair Value on a Non-recurring Basis Quoted Prices In Active Significant Markets for Other Significant Balances at Identical Observable Unobservable (Dollars in thousands) Dates Assets Inputs Inputs Indicated (Level 1) (Level 2) (Level 3) Impaired Loans December 31, 2018 $ 4,024 $ — $ — $ 4,024 December 31, 2017 $ 4,140 $ — $ — $ 4,140 Other Real Estate December 31, 2018 $ 102 $ — $ — $ 102 December 31, 2017 $ 106 $ — $ — $ 106 |
Off-Balance Sheet Activities (T
Off-Balance Sheet Activities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Schedule of contractual amount of financial instruments with off-balance sheet risk | The contractual amount of financial instruments with off-balance sheet risk was as follows at December 31: 2018 2017 Fixed Variable Fixed Variable (Dollars in thousands) Rate Rate Rate Rate Unused lines of credit and letters of credit $ 20,036 $ 103,978 $ 9,033 $ 104,257 Commitments to fund loans (at market rates) 20,997 1,421 8,633 1,225 |
Regulatory Capital (Tables)
Regulatory Capital (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Banking and Thrift [Abstract] | |
Schedule of actual capital and minimum required levels | Actual capital levels and minimum required levels for ChoiceOne and the Bank were as follows: Minimum Required to be Well Minimum Required Capitalized Under for Capital Prompt Corrective (Dollars in thousands) Actual Adequacy Purposes Action Regulations Amount Ratio Amount Ratio Amount Ratio December 31, 2018 ChoiceOne Financial Services Inc. Total capital (to risk weighted assets) $ 72,148 13.8 % $ 41,811 8.0 % N/A N/A Common equity Tier 1 capital (to risk weighted assets) 67,481 12.9 23,519 4.5 N/A N/A Tier 1 capital (to risk weighted assets) 67,481 12.9 31,359 6.0 N/A N/A Tier 1 capital (to average assets) 67,481 10.5 25,658 4.0 N/A N/A ChoiceOne Bank Total capital (to risk weighted assets) $ 66,976 12.9 % $ 41,599 8.0 % $ 51,999 10.0 % Common equity Tier 1 capital (to risk weighted assets) 62,309 12.0 23,399 4.5 33,799 6.5 Tier 1 capital (to risk weighted assets) 62,309 12.0 31,199 6.0 41,599 8.0 Tier 1 capital (to average assets) 62,309 9.8 25,512 4.0 31,890 5.0 December 31, 2017 ChoiceOne Financial Services Inc. Total capital (to risk weighted assets) $ 67,155 13.9 % $ 38,761 8.0 % N/A N/A Common equity Tier 1 capital (to risk weighted assets) 62,584 12.9 21,803 4.5 N/A N/A Tier 1 capital (to risk weighted assets) 62,584 12.9 29,071 6.0 N/A N/A Tier 1 capital (to average assets) 62,584 9.9 25,301 4.0 N/A N/A ChoiceOne Bank Total capital (to risk weighted assets) $ 62,393 12.9 % $ 38,555 8.0 % $ 48,194 10.0 % Common equity Tier 1 capital (to risk weighted assets) 57,822 12.0 21,687 4.5 31,326 6.5 Tier 1 capital (to risk weighted assets) 57,822 12.0 28,917 6.0 38,555 8.0 Tier 1 capital (to average assets) 57,822 9.2 25,156 4.0 31,445 5.0 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial data (unaudited) | Net Earnings Per Share (Dollars in thousands, except per share data) Interest Interest Net Fully Income Income Income Basic Diluted 2018 First Quarter $ 5,722 $ 5,330 $ 1,658 $ 0.46 $ 0.46 Second Quarter 6,141 5,595 1,833 0.51 0.51 Third Quarter 6,212 5,522 2,014 0.55 0.55 Fourth Quarter 6,450 5,617 1,828 0.51 0.50 2017 First Quarter $ 5,161 $ 4,855 $ 1,446 $ 0.40 $ 0.40 Second Quarter 5,425 5,077 1,635 0.45 0.45 Third Quarter 5,624 5,238 1,720 0.48 0.48 Fourth Quarter 5,831 5,393 1,367 0.37 0.37 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Unrealized gain (loss) on available for sale securities | $ (1,108) | $ 169 |
Unrecognized gains on post-retirement benefits | 181 | 132 |
Tax effect | 195 | (64) |
Accumulated other comprehensive income (loss) | $ (732) | $ 237 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Cash on deposit with Federal Reserve Bank | $ 781 | $ 810 | |
Adoption effect of ASU 2016-01 | 244 | ||
Retained Earnings [Member] | |||
Adoption effect of ASU 2016-01 | [1] | $ 244 | |
Land improvements [Member] | Lower Range [Member] | |||
Useful lives | 7 years | ||
Land improvements [Member] | Upper Range [Member] | |||
Useful lives | 15 years | ||
Building [Member] | Lower Range [Member] | |||
Useful lives | 5 years | ||
Building [Member] | Upper Range [Member] | |||
Useful lives | 39 years | ||
Furniture and Fixtures [Member] | Lower Range [Member] | |||
Useful lives | 3 years | ||
Furniture and Fixtures [Member] | Upper Range [Member] | |||
Useful lives | 7 years | ||
[1] | ASU 2016-01 is further addressed in Note 1 to the financial statements. |
Securities (Details)
Securities (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Investments, Debt and Equity Securities [Abstract] | |
Amortized Cost | $ 2,502 |
Gross Unrealized Gains | 459 |
Gross Unrealized Losses | (114) |
Fair Value | $ 2,847 |
Securities (Details 1)
Securities (Details 1) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 167,710 | $ 155,423 |
Gross Unrealized Gains | 672 | 1,229 |
Gross Unrealized Losses | (1,780) | (1,061) |
Fair Value | 166,602 | 155,591 |
U.S. Government and Federal Agency [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 34,079 | 35,518 |
Gross Unrealized Gains | 1 | |
Gross Unrealized Losses | (551) | (392) |
Fair Value | 33,529 | 35,126 |
U.S. Treasury Notes and Bonds [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,992 | 1,991 |
Gross Unrealized Losses | (45) | (31) |
Fair Value | 1,947 | 1,960 |
State and Municipal [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 104,317 | 99,609 |
Gross Unrealized Gains | 544 | 910 |
Gross Unrealized Losses | (933) | (471) |
Fair Value | 103,928 | 100,048 |
Mortgage-backed [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 21,654 | 9,943 |
Gross Unrealized Gains | 126 | 8 |
Gross Unrealized Losses | (205) | (131) |
Fair Value | 21,575 | 9,820 |
Corporate [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 5,147 | 5,184 |
Gross Unrealized Gains | 1 | 2 |
Gross Unrealized Losses | (46) | (35) |
Fair Value | 5,102 | 5,151 |
Trust Preferred Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 500 | 500 |
Fair Value | 500 | 500 |
Asset-backed Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 21 | 95 |
Gross Unrealized Losses | (1) | |
Fair Value | 21 | 94 |
Equity Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 2,502 | 2,583 |
Gross Unrealized Gains | 309 | |
Fair Value | $ 2,847 | $ 2,892 |
Securities (Details 2)
Securities (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |||
Proceeds from sales of securities | $ 2,725 | $ 57,628 | $ 15,317 |
Gross realized gains | 42 | 184 | 312 |
Gross realized losses | $ 8 | $ 464 | $ 0 |
Securities (Details 3)
Securities (Details 3) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Amortized Cost | ||
Due within one year | $ 30,224 | |
Due after one year through five years | 69,299 | |
Due after five years through ten years | 44,108 | |
Due after ten years | 2,425 | |
Total debt securities | 146,056 | |
Total | 167,710 | $ 155,423 |
Fair Value | ||
Due within one year | 30,390 | |
Due after one year through five years | 68,809 | |
Due after five years through ten years | 43,895 | |
Due after ten years | 1,933 | |
Total debt securities | 145,027 | |
Total | 166,602 | 155,591 |
Mortgage-backed [Member] | ||
Amortized Cost | ||
Total | 21,654 | 9,943 |
Fair Value | ||
Total | 21,575 | 9,820 |
Equity Securities [Member] | ||
Amortized Cost | ||
Total | 2,502 | 2,583 |
Fair Value | ||
Total | $ 2,847 | $ 2,892 |
Securities (Details 4)
Securities (Details 4) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Investments, Debt and Equity Securities [Abstract] | ||
Securities pledged for securities sold under agreements to repurchase | $ 9,902 | |
Security pledged for Community Reinvestment Act credits | $ 257 | 262 |
Total | $ 257 | $ 10,164 |
Securities (Details 5)
Securities (Details 5) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Securities with unrealized loss position | ||
Less than 12 months, Fair Value | $ 15,996 | $ 72,096 |
Less than 12 months, Unrealized Losses | (178) | (661) |
More than 12 months, Fair Value | 102,256 | 18,306 |
More than 12 months, Unrealized Losses | (1,716) | (400) |
Total, Fair Value | 118,252 | 90,402 |
Total, Unrealized Losses | (1,894) | (1,061) |
U.S. Government and Federal Agency [Member] | ||
Securities with unrealized loss position | ||
Less than 12 months, Fair Value | 20,297 | |
Less than 12 months, Unrealized Losses | (190) | |
More than 12 months, Fair Value | 31,499 | 9,798 |
More than 12 months, Unrealized Losses | (551) | (202) |
Total, Fair Value | 31,499 | 30,095 |
Total, Unrealized Losses | (551) | (392) |
U.S. Treasury Notes and Bonds [Member] | ||
Securities with unrealized loss position | ||
Less than 12 months, Fair Value | 1,960 | |
Less than 12 months, Unrealized Losses | (31) | |
More than 12 months, Fair Value | 1,947 | |
More than 12 months, Unrealized Losses | (45) | |
Total, Fair Value | 1,947 | 1,960 |
Total, Unrealized Losses | (45) | (31) |
State and Municipal [Member] | ||
Securities with unrealized loss position | ||
Less than 12 months, Fair Value | 9,726 | 38,887 |
Less than 12 months, Unrealized Losses | (36) | (319) |
More than 12 months, Fair Value | 56,763 | 6,889 |
More than 12 months, Unrealized Losses | (897) | (152) |
Total, Fair Value | 66,489 | 45,776 |
Total, Unrealized Losses | (933) | (471) |
Mortgage-backed [Member] | ||
Securities with unrealized loss position | ||
Less than 12 months, Fair Value | 5,384 | 8,481 |
Less than 12 months, Unrealized Losses | (28) | (104) |
More than 12 months, Fair Value | 7,443 | 838 |
More than 12 months, Unrealized Losses | (177) | (27) |
Total, Fair Value | 12,827 | 9,319 |
Total, Unrealized Losses | (205) | (131) |
Corporate [Member] | ||
Securities with unrealized loss position | ||
Less than 12 months, Fair Value | 2,471 | |
Less than 12 months, Unrealized Losses | (17) | |
More than 12 months, Fair Value | 4,604 | 687 |
More than 12 months, Unrealized Losses | (46) | (18) |
Total, Fair Value | 4,604 | 3,158 |
Total, Unrealized Losses | (46) | (35) |
Equity Securities [Member] | ||
Securities with unrealized loss position | ||
Less than 12 months, Fair Value | 886 | |
Less than 12 months, Unrealized Losses | (114) | |
Total, Fair Value | 886 | |
Total, Unrealized Losses | $ (114) | |
Asset-backed Securities [Member] | ||
Securities with unrealized loss position | ||
More than 12 months, Fair Value | 94 | |
More than 12 months, Unrealized Losses | (1) | |
Total, Fair Value | 94 | |
Total, Unrealized Losses | $ (1) |
Securities (Details 6)
Securities (Details 6) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Investments, Debt and Equity Securities [Abstract] | |
New gains and losses recognized during the period | $ 71 |
Less: Net gains and losses recognized during the period on securities sold | 9 |
Unrealized gains and losses recognized during the reporting period on securities still held at the reporting date | $ 62 |
Securities (Details Narrative)
Securities (Details Narrative) - Number | Dec. 31, 2018 | Dec. 31, 2017 |
Investments, Debt and Equity Securities [Abstract] | ||
Number of securities with an unrealized loss positions | 210 | 154 |
Loans and Allowance for Loan _3
Loans and Allowance for Loan Losses (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Loans | $ 409,073 | $ 398,785 | $ 369,000 | |
Allowance for loan losses | (4,673) | (4,577) | (4,277) | $ (4,194) |
Loans, net | 404,400 | 394,208 | ||
Agricultural [Member] | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Loans | 49,109 | 48,464 | 44,614 | |
Allowance for loan losses | (481) | (506) | (433) | (420) |
Commercial and Industrial [Member] | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Loans | 91,406 | 104,386 | 96,088 | |
Allowance for loan losses | (892) | (1,001) | (688) | (586) |
Consumer [Member] | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Loans | 24,382 | 24,513 | 21,596 | |
Allowance for loan losses | (254) | (262) | (305) | (297) |
Commercial Real Estate [Member] | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Loans | 139,453 | 123,487 | 110,762 | |
Allowance for loan losses | (1,926) | (1,761) | (1,438) | (1,030) |
Construction Real Estate [Member] | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Loans | 8,843 | 6,613 | 6,153 | |
Allowance for loan losses | (38) | (35) | (62) | (46) |
Residential Real Estate [Member] | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Loans | 95,880 | 91,322 | 89,787 | |
Allowance for loan losses | $ (537) | $ (726) | $ (1,013) | $ (1,388) |
Loans and Allowance for Loan _4
Loans and Allowance for Loan Losses (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for Loan Losses | |||
Beginning balance | $ 4,577 | $ 4,277 | $ 4,194 |
Charge-offs | (365) | (735) | (357) |
Recoveries | 426 | 550 | 440 |
Provision | 35 | 485 | |
Ending balance | 4,673 | 4,577 | 4,277 |
Individually evaluated for impairment | 297 | 302 | 403 |
Collectively evaluated for impairment | 4,376 | 4,275 | 3,874 |
Loans | |||
Individually evaluated for impairment | 4,024 | 4,140 | 4,911 |
Collectively evaluated for impairment | 405,049 | 394,645 | 364,089 |
Ending balance | 409,073 | 398,785 | 369,000 |
Agricultural [Member] | |||
Allowance for Loan Losses | |||
Beginning balance | 506 | 433 | 420 |
Recoveries | 33 | ||
Provision | (58) | 73 | 13 |
Ending balance | 481 | 506 | 433 |
Individually evaluated for impairment | 94 | 3 | |
Collectively evaluated for impairment | 387 | 506 | 430 |
Loans | |||
Individually evaluated for impairment | 578 | 423 | 526 |
Collectively evaluated for impairment | 48,531 | 48,041 | 44,088 |
Ending balance | 49,109 | 48,464 | 44,614 |
Commercial and Industrial [Member] | |||
Allowance for Loan Losses | |||
Beginning balance | 1,001 | 688 | 586 |
Charge-offs | (58) | (439) | (37) |
Recoveries | 107 | 21 | 31 |
Provision | (158) | 731 | 108 |
Ending balance | 892 | 1,001 | 688 |
Individually evaluated for impairment | 3 | 26 | 11 |
Collectively evaluated for impairment | 889 | 975 | 677 |
Loans | |||
Individually evaluated for impairment | 21 | 124 | 301 |
Collectively evaluated for impairment | 91,385 | 104,262 | 95,787 |
Ending balance | 91,406 | 104,386 | 96,088 |
Consumer [Member] | |||
Allowance for Loan Losses | |||
Beginning balance | 262 | 305 | 297 |
Charge-offs | (282) | (253) | (218) |
Recoveries | 112 | 169 | 149 |
Provision | 162 | 41 | 77 |
Ending balance | 254 | 262 | 305 |
Individually evaluated for impairment | 13 | 3 | 2 |
Collectively evaluated for impairment | 241 | 259 | 303 |
Loans | |||
Individually evaluated for impairment | 90 | 36 | 28 |
Collectively evaluated for impairment | 24,292 | 24,477 | 21,568 |
Ending balance | 24,382 | 24,513 | 21,596 |
Commercial Real Estate [Member] | |||
Allowance for Loan Losses | |||
Beginning balance | 1,761 | 1,438 | 1,030 |
Recoveries | 61 | 258 | 89 |
Provision | 104 | 65 | 319 |
Ending balance | 1,926 | 1,761 | 1,438 |
Individually evaluated for impairment | 20 | 49 | 91 |
Collectively evaluated for impairment | 1,906 | 1,712 | 1,347 |
Loans | |||
Individually evaluated for impairment | 623 | 778 | 1,073 |
Collectively evaluated for impairment | 138,830 | 122,709 | 109,689 |
Ending balance | 139,453 | 123,487 | 110,762 |
Construction Real Estate [Member] | |||
Allowance for Loan Losses | |||
Beginning balance | 35 | 62 | 46 |
Recoveries | 40 | ||
Provision | 3 | (67) | 16 |
Ending balance | 38 | 35 | 62 |
Collectively evaluated for impairment | 38 | 35 | 62 |
Loans | |||
Collectively evaluated for impairment | 8,843 | 6,613 | 6,153 |
Ending balance | 8,843 | 6,613 | 6,153 |
Residential Real Estate [Member] | |||
Allowance for Loan Losses | |||
Beginning balance | 726 | 1,013 | 1,388 |
Charge-offs | (25) | (43) | (102) |
Recoveries | 113 | 62 | 171 |
Provision | (277) | (306) | (444) |
Ending balance | 537 | 726 | 1,013 |
Individually evaluated for impairment | 167 | 224 | 296 |
Collectively evaluated for impairment | 370 | 502 | 717 |
Loans | |||
Individually evaluated for impairment | 2,712 | 2,779 | 2,983 |
Collectively evaluated for impairment | 93,168 | 88,543 | 86,804 |
Ending balance | 95,880 | 91,322 | 89,787 |
Unallocated [Member] | |||
Allowance for Loan Losses | |||
Beginning balance | 286 | 338 | 427 |
Provision | 259 | (52) | (89) |
Ending balance | 545 | 286 | 338 |
Collectively evaluated for impairment | $ 545 | $ 286 | $ 338 |
Loans and Allowance for Loan _5
Loans and Allowance for Loan Losses (Details 2) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | $ 409,073 | $ 398,785 | $ 369,000 |
Nonaccrual past due loans | 1,532 | 1,096 | |
Agricultural [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 49,109 | 48,464 | 44,614 |
Nonaccrual past due loans | 393 | 423 | |
Agricultural [Member] | Risk ratings 1 and 2 [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 15,300 | 14,813 | |
Agricultural [Member] | Risk rating 3 [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 23,938 | 22,721 | |
Agricultural [Member] | Risk rating 4 [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 9,082 | 10,199 | |
Agricultural [Member] | Risk rating 5 [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 211 | 308 | |
Agricultural [Member] | Risk rating 6 [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 578 | 423 | |
Commercial and Industrial [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 91,406 | 104,386 | 96,088 |
Commercial and Industrial [Member] | Risk ratings 1 and 2 [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 11,972 | 13,491 | |
Commercial and Industrial [Member] | Risk rating 3 [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 50,266 | 63,366 | |
Commercial and Industrial [Member] | Risk rating 4 [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 23,961 | 26,943 | |
Commercial and Industrial [Member] | Risk rating 5 [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 5,204 | 491 | |
Commercial and Industrial [Member] | Risk rating 6 [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 3 | 95 | |
Commercial Real Estate [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 139,453 | 123,487 | 110,762 |
Nonaccrual past due loans | 123 | 222 | |
Commercial Real Estate [Member] | Risk ratings 1 and 2 [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 7,962 | 8,227 | |
Commercial Real Estate [Member] | Risk rating 3 [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 89,173 | 78,868 | |
Commercial Real Estate [Member] | Risk rating 4 [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 36,193 | 33,429 | |
Commercial Real Estate [Member] | Risk rating 5 [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 4,850 | 1,533 | |
Commercial Real Estate [Member] | Risk rating 6 [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 1,275 | 1,430 | |
Consumer [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 24,382 | 24,513 | 21,596 |
Nonaccrual past due loans | 62 | 15 | |
Consumer [Member] | Performing [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 24,320 | 24,497 | |
Consumer [Member] | Nonperforming [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 1 | ||
Construction Real Estate [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 8,843 | 6,613 | 6,153 |
Construction Real Estate [Member] | Performing [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 8,843 | 6,613 | |
Residential Real Estate [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | 95,880 | 91,322 | $ 89,787 |
Nonaccrual past due loans | 955 | 436 | |
Residential Real Estate [Member] | Performing [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | $ 94,925 | 90,629 | |
Residential Real Estate [Member] | Nonperforming [Member] | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Risk rated loans | $ 257 |
Loans and Allowance for Loan _6
Loans and Allowance for Loan Losses (Details 3) - Residential Real Estate [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)Number | |
Financing Receivable, Modifications [Line Items] | |
Number of Loans | Number | 3 |
Pre-Modification Outstanding Recorded Investment | $ 296 |
Post Modification Oustanding Recorded Investment | $ 296 |
Loans and Allowance for Loan _7
Loans and Allowance for Loan Losses (Details 4) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Impaired and Restructured Loans with or without related allowance recorded | |||
Recorded Investment with no related allowance recorded | $ 510 | $ 665 | $ 1,331 |
Unpaid Principal Balance with no related allowance recorded | 556 | 839 | 1,923 |
Average Recorded Investment with no related allowance recorded | 631 | 641 | 1,404 |
Interest Income Recognized with no related allowance recorded | 154 | 4 | 23 |
Impaired Loans with a related allowance recorded | |||
Recorded Investment with an allowance recorded | 3,514 | 3,475 | 3,580 |
Unpaid Principal Balance with an allowance recorded | 3,652 | 3,584 | 3,682 |
Related Allowance | 297 | 302 | 403 |
Average Recorded Investment with an allowance recorded | 3,731 | 3,679 | 4,267 |
Interest Income Recognized with an allowance recorded | 19 | 146 | 146 |
Impaired Loans | |||
Recorded Investment | 4,024 | 4,140 | 4,911 |
Unpaid Principal Balance | 4,209 | 4,423 | 5,605 |
Related Allowance | 297 | 302 | 403 |
Average Recorded Investment | 4,362 | 4,320 | 5,671 |
Interest Income Recognized | 173 | 150 | 169 |
Agricultural [Member] | |||
Impaired and Restructured Loans with or without related allowance recorded | |||
Recorded Investment with no related allowance recorded | 185 | 423 | 482 |
Unpaid Principal Balance with no related allowance recorded | 185 | 455 | 485 |
Average Recorded Investment with no related allowance recorded | 291 | 322 | 220 |
Interest Income Recognized with no related allowance recorded | 13 | ||
Impaired Loans with a related allowance recorded | |||
Recorded Investment with an allowance recorded | 393 | 44 | |
Unpaid Principal Balance with an allowance recorded | 440 | 44 | |
Related Allowance | 94 | 3 | |
Average Recorded Investment with an allowance recorded | 161 | 121 | 72 |
Interest Income Recognized with an allowance recorded | 13 | 3 | |
Impaired Loans | |||
Recorded Investment | 578 | 423 | 526 |
Unpaid Principal Balance | 625 | 455 | 529 |
Related Allowance | 94 | 3 | |
Average Recorded Investment | 452 | 443 | 292 |
Interest Income Recognized | 13 | 16 | |
Commercial and Industrial [Member] | |||
Impaired and Restructured Loans with or without related allowance recorded | |||
Recorded Investment with no related allowance recorded | 206 | ||
Unpaid Principal Balance with no related allowance recorded | 207 | ||
Average Recorded Investment with no related allowance recorded | 29 | 103 | 91 |
Interest Income Recognized with no related allowance recorded | 2 | 3 | |
Impaired Loans with a related allowance recorded | |||
Recorded Investment with an allowance recorded | 21 | 124 | 95 |
Unpaid Principal Balance with an allowance recorded | 21 | 124 | 95 |
Related Allowance | 3 | 26 | 11 |
Average Recorded Investment with an allowance recorded | 296 | 177 | 218 |
Interest Income Recognized with an allowance recorded | 1 | ||
Impaired Loans | |||
Recorded Investment | 21 | 124 | 301 |
Unpaid Principal Balance | 21 | 124 | 302 |
Related Allowance | 3 | 26 | 11 |
Average Recorded Investment | 325 | 280 | 309 |
Interest Income Recognized | 2 | 1 | 3 |
Consumer [Member] | |||
Impaired and Restructured Loans with or without related allowance recorded | |||
Recorded Investment with no related allowance recorded | 1 | ||
Unpaid Principal Balance with no related allowance recorded | 1 | ||
Average Recorded Investment with no related allowance recorded | 2 | 1 | |
Interest Income Recognized with no related allowance recorded | 8 | ||
Impaired Loans with a related allowance recorded | |||
Recorded Investment with an allowance recorded | 88 | 36 | 28 |
Unpaid Principal Balance with an allowance recorded | 88 | 36 | 28 |
Related Allowance | 13 | 3 | 2 |
Average Recorded Investment with an allowance recorded | 59 | 33 | 24 |
Interest Income Recognized with an allowance recorded | 1 | 2 | |
Impaired Loans | |||
Recorded Investment | 90 | 36 | 28 |
Unpaid Principal Balance | 90 | 36 | 28 |
Related Allowance | 13 | 3 | 2 |
Average Recorded Investment | 61 | 33 | 25 |
Interest Income Recognized | 8 | 1 | 2 |
Construction Real Estate [Member] | |||
Impaired and Restructured Loans with or without related allowance recorded | |||
Average Recorded Investment with no related allowance recorded | 54 | ||
Impaired Loans | |||
Average Recorded Investment | 54 | ||
Commercial Real Estate [Member] | |||
Impaired and Restructured Loans with or without related allowance recorded | |||
Recorded Investment with no related allowance recorded | 74 | 127 | 342 |
Unpaid Principal Balance with no related allowance recorded | 109 | 258 | 939 |
Average Recorded Investment with no related allowance recorded | 78 | 110 | 925 |
Interest Income Recognized with no related allowance recorded | 30 | 2 | |
Impaired Loans with a related allowance recorded | |||
Recorded Investment with an allowance recorded | 550 | 651 | 731 |
Unpaid Principal Balance with an allowance recorded | 609 | 734 | 804 |
Related Allowance | 20 | 49 | 91 |
Average Recorded Investment with an allowance recorded | 692 | 826 | 1,281 |
Interest Income Recognized with an allowance recorded | 34 | 33 | |
Impaired Loans | |||
Recorded Investment | 623 | 778 | 1,073 |
Unpaid Principal Balance | 718 | 992 | 1,743 |
Related Allowance | 20 | 49 | 91 |
Average Recorded Investment | 770 | 936 | 2,206 |
Interest Income Recognized | 30 | 34 | 35 |
Residential Real Estate [Member] | |||
Impaired and Restructured Loans with or without related allowance recorded | |||
Recorded Investment with no related allowance recorded | 250 | 115 | 301 |
Unpaid Principal Balance with no related allowance recorded | 261 | 126 | 292 |
Average Recorded Investment with no related allowance recorded | 177 | 106 | 167 |
Interest Income Recognized with no related allowance recorded | 114 | 4 | 5 |
Impaired Loans with a related allowance recorded | |||
Recorded Investment with an allowance recorded | 2,462 | 2,664 | 2,682 |
Unpaid Principal Balance with an allowance recorded | 2,494 | 2,690 | 2,711 |
Related Allowance | 167 | 224 | 296 |
Average Recorded Investment with an allowance recorded | 2,523 | 2,522 | 2,672 |
Interest Income Recognized with an allowance recorded | 6 | 110 | 108 |
Impaired Loans | |||
Recorded Investment | 2,712 | 2,779 | 2,983 |
Unpaid Principal Balance | 2,755 | 2,816 | 3,003 |
Related Allowance | 167 | 224 | 296 |
Average Recorded Investment | 2,700 | 2,628 | 2,839 |
Interest Income Recognized | $ 120 | $ 114 | $ 113 |
Loans and Allowance for Loan _8
Loans and Allowance for Loan Losses (Details 5) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due Total | [1] | $ 2,905 | $ 1,659 | |
Loans Not Past Due | 406,168 | 397,126 | ||
Loans | 409,073 | 398,785 | $ 369,000 | |
Loans 90 Days Past Due and Accruing | 258 | |||
30 to 59 Days [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due Total | [1] | 1,647 | 842 | |
60 to 89 Days [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due Total | [1] | 526 | 368 | |
Greater Than 90 Days [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due Total | [1] | 732 | 449 | |
Agricultural [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due Total | [1] | 83 | ||
Loans Not Past Due | 49,109 | 48,381 | ||
Loans | 49,109 | 48,464 | 44,614 | |
Agricultural [Member] | Greater Than 90 Days [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due Total | [1] | 83 | ||
Commercial and Industrial [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due Total | [1] | 5 | 20 | |
Loans Not Past Due | 91,401 | 104,366 | ||
Loans | 91,406 | 104,386 | 96,088 | |
Commercial and Industrial [Member] | 30 to 59 Days [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due Total | [1] | 5 | 20 | |
Consumer [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due Total | [1] | 200 | 181 | |
Loans Not Past Due | 24,182 | 24,332 | ||
Loans | 24,382 | 24,513 | 21,596 | |
Consumer [Member] | 30 to 59 Days [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due Total | [1] | 149 | 142 | |
Consumer [Member] | 60 to 89 Days [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due Total | [1] | 40 | 38 | |
Consumer [Member] | Greater Than 90 Days [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due Total | [1] | 11 | 1 | |
Commercial Real Estate [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due Total | [1] | 73 | 222 | |
Loans Not Past Due | 139,380 | 123,265 | ||
Loans | 139,453 | 123,487 | 110,762 | |
Commercial Real Estate [Member] | 30 to 59 Days [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due Total | [1] | 95 | ||
Commercial Real Estate [Member] | 60 to 89 Days [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due Total | [1] | 58 | ||
Commercial Real Estate [Member] | Greater Than 90 Days [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due Total | [1] | 73 | 69 | |
Construction Real Estate [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Loans Not Past Due | 8,843 | 6,613 | ||
Loans | 8,843 | 6,613 | 6,153 | |
Residential Real Estate [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due Total | [1] | 2,627 | 1,153 | |
Loans Not Past Due | 93,253 | 90,169 | ||
Loans | 95,880 | 91,322 | $ 89,787 | |
Loans 90 Days Past Due and Accruing | 258 | |||
Residential Real Estate [Member] | 30 to 59 Days [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due Total | [1] | 1,493 | 585 | |
Residential Real Estate [Member] | 60 to 89 Days [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due Total | [1] | 486 | 272 | |
Residential Real Estate [Member] | Greater Than 90 Days [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due Total | [1] | $ 648 | $ 296 | |
[1] | Includes nonaccrual loans. |
Loans and Allowance for Loan _9
Loans and Allowance for Loan Losses (Details 6) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual loans | $ 1,532 | $ 1,096 |
Agricultural [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual loans | 393 | 423 |
Consumer [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual loans | 62 | 15 |
Commercial Real Estate [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual loans | 123 | 222 |
Residential Real Estate [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Nonaccrual loans | $ 955 | $ 436 |
Loans and Allowance for Loan_10
Loans and Allowance for Loan Losses (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||
Total loans in the process of foreclosure | $ 156 | $ 131 |
Mortgage Banking (Details)
Mortgage Banking (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Mortgage Banking [Abstract] | |||
Loans originated for resale, net of principal payments | $ 33,555 | $ 43,171 | $ 53,591 |
Proceeds from loan sales | 34,872 | 42,883 | 57,830 |
Net gains on sales of loans held for sale | 1,003 | 1,265 | 1,748 |
Loan servicing fees, net of amortization | $ 91 | $ 155 | $ 159 |
Mortgage Banking (Details 1)
Mortgage Banking (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Servicing Asset at Amortized Cost, Balance | |||
Balance, beginning of year | $ 908 | $ 697 | $ 378 |
Capitalized | 441 | 443 | 491 |
Amortization | (300) | (232) | (172) |
Balance, end of year | $ 1,049 | $ 908 | $ 697 |
Mortgage Banking (Details Narra
Mortgage Banking (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Mortgage loans serviced for others | $ 134,600 | $ 122,500 |
Fair value of loan servicing rights | $ 1,700 | $ 1,402 |
Discount Rate | 6.92% | 6.29% |
Lower Range [Member] | ||
Prepayment Speed | 7.00% | 7.00% |
Upper Range [Member] | ||
Prepayment Speed | 13.00% | 14.00% |
Premises and Equipment (Details
Premises and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Premises and equipment, gross | $ 28,964 | $ 24,820 |
Accumulated depreciation | (13,085) | (11,965) |
Premises and equipment, net | 15,879 | 12,855 |
Land and Land Improvements [Member] | ||
Premises and equipment, gross | 5,318 | 5,560 |
Leasehold Improvements [Member] | ||
Premises and equipment, gross | 38 | 38 |
Buildings [Member] | ||
Premises and equipment, gross | 16,251 | 13,290 |
Furniture And Equipment [Member] | ||
Premises and equipment, gross | $ 7,357 | $ 5,932 |
Premises and Equipment (Detai_2
Premises and Equipment (Details 1) $ in Thousands | Dec. 31, 2018USD ($) |
Rental committments under operating leases for the fiscal year ended: | |
2019 | $ 119 |
2020 | 122 |
2021 | 124 |
2022 | 127 |
2023 | 129 |
Thereafter | 318 |
Total | $ 939 |
Premises and Equipment (Detai_3
Premises and Equipment (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 1,183 | $ 1,389 | $ 1,078 |
Rent expense | $ 108 | $ 99 | $ 99 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2016 | |
Intangible asset amortization | $ 379 | |
Percentage excess goodwill fair value over carrying amount | 31.00% | |
Description of valuation assumption | The income approach used a discount rate of 11.50%, a growth assumption of 5.0% for assets, and an assumption of cost savings of 20% of noninterest expense as a result of synergies and cost reductions from a change in control. | |
Other Intangible Assets [Member] | ||
Amortization period | 10 years | |
Core Deposit Intangible [Member] | ||
Amortization period | 10 years |
Other Real Estate Owned (Detail
Other Real Estate Owned (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Real Estate [Abstract] | |||
Balance, beginning of year | $ 106 | $ 437 | $ 31 |
Transfers from loans | 432 | 314 | 661 |
Proceeds from sales | (515) | (663) | (247) |
Gains/(losses) on sales | 79 | 18 | (8) |
Balance, end of year | $ 102 | $ 106 | $ 437 |
Other Real Estate Owned (Deta_2
Other Real Estate Owned (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Other Real Estate [Abstract] | |||
Residential real estate mortgage loans | $ 102 | $ 106 | $ 291 |
Commercial real estate loans | $ 146 |
Deposits (Details)
Deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deposits [Abstract] | ||
Noninterest-bearing demand deposits | $ 153,542 | $ 151,462 |
Interest-bearing demand deposits | 135,425 | 126,363 |
Money market deposits | 86,720 | 94,178 |
Savings deposits | 75,615 | 75,080 |
Local certificates of deposit | 91,343 | 82,598 |
Brokered certificates of deposit | 34,370 | 10,172 |
Total deposits | $ 577,015 | $ 539,853 |
Deposits (Details 1)
Deposits (Details 1) $ in Thousands | Dec. 31, 2018USD ($) |
Maturities of deposits during the year ending December 31, | |
2019 | $ 99,281 |
2020 | 15,010 |
2021 | 4,222 |
2022 | 7,163 |
2023 | 37 |
Total | $ 125,713 |
Deposits (Details Narrative)
Deposits (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deposits [Abstract] | ||
Certificates of deposit $250,000 or greater | $ 39,300 | $ 29,800 |
Brokered certificates of deposit | 34,370 | 10,172 |
Certificates of Deposit issued through CDARS | $ 2,100 | $ 2,000 |
Repurchase Agreements (Details)
Repurchase Agreements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of Repurchase Agreements [Abstract] | ||
Outstanding balance at December 31 | $ 7,148 | |
Average interest rate at December 31 | 0.05% | |
Average balance during the year | $ 1,412 | $ 4,958 |
Average interest rate during the year | 0.05% | 0.05% |
Maximum month end balance during the year | $ 7,148 | $ 8,440 |
Federal Home Loan Bank Advanc_3
Federal Home Loan Bank Advances (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Advances from Federal Home Loan Bank | $ 5,233 | $ 20,268 |
Short Term Federal Home Loan Bank Advances [Member] | ||
Advances from Federal Home Loan Bank | $ 20,000 | |
Maturity date, lower range | 2018-01 | |
Maturity date, upper range | 2018-04 | |
Short Term Federal Home Loan Bank Advances [Member] | Lower Range [Member] | ||
Interest rate, range | 1.25% | |
Short Term Federal Home Loan Bank Advances [Member] | Upper Range [Member] | ||
Interest rate, range | 1.39% | |
Short Term Federal Home Loan Bank Advances [Member] | Weighted Average [Member] | ||
Interest rate, range | 1.32% | |
Long Term Federal Home Loan Bank Advances [Member] | ||
Advances from Federal Home Loan Bank | $ 233 | $ 268 |
Interest rate, range | 3.98% | |
Maturity date, lower range | 2024-11 | |
Long Term Federal Home Loan Bank Advances [Member] | ||
Advances from Federal Home Loan Bank | $ 5,000 | |
Interest rate, range | 2.57% | |
Maturity date, lower range | 2019-03 |
Federal Home Loan Bank Advanc_4
Federal Home Loan Bank Advances (Details 1) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Scheduled maturities of advances from the FHLB for the year ending December 31, | ||
2019 | $ 5,036 | |
2020 | 37 | |
2021 | 38 | |
2022 | 40 | |
2023 | 42 | |
Thereafter | 40 | |
Total | $ 5,233 | $ 20,268 |
Federal Home Loan Bank Advanc_5
Federal Home Loan Bank Advances (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Amount of additional funds available to borrow from Federal Home Loan Bank based upon collateral | $ 45,500 | |
Agricultural and Residential Real Estate [Member] | ||
Loans pledged for advance from the Federal Home Loan Bank | $ 96,800 | $ 95,100 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Provision for Income Taxes | |||
Current federal income tax expense | $ 946 | $ 2,325 | $ 2,244 |
Deferred federal income tax expense/(benefit) | 209 | 62 | (82) |
Income tax expense | $ 1,155 | $ 2,387 | $ 2,162 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Income Tax Provision to Statutory Rate | |||
Income tax computed at statutory federal rate | $ 1,783 | $ 2,909 | $ 2,806 |
Tax exempt interest income | (309) | (486) | (496) |
Tax exempt earnings on bank-owned life insurance | (81) | (135) | (121) |
Low income housing tax credits | (154) | (85) | (45) |
Deferred tax adjustment related to reduction in U.S. federal statutory income income tax rate | 206 | ||
Other items | (84) | (22) | 18 |
Income tax expense | $ 1,155 | $ 2,387 | $ 2,162 |
Effective income tax rate | 14.00% | 28.00% | 26.00% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Allowance for loan losses | $ 981 | $ 961 |
Unrealized losses on securities available for sale | 233 | |
Deferred compensation | 102 | 125 |
Stock compensation | 22 | 55 |
Loan costs/fees deferred | 66 | 45 |
Other | 72 | 123 |
Total deferred tax assets | 1,476 | 1,309 |
Deferred tax liabilities: | ||
Depreciation | 797 | 644 |
Loan servicing rights | 220 | 191 |
Unrealized gains on securities available for sale | 35 | |
Other | 88 | 106 |
Total deferred tax liabilities | 1,105 | 976 |
Net deferred tax asset | $ 371 | $ 333 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal tax rate | 21.00% | 34.00% | 34.00% |
Additional income tax expense | $ 206 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Loans Receivable to related parties [Roll Forward] | ||
Balance, beginning of year | $ 6,477 | $ 12,906 |
New loans | 3,029 | 2,909 |
Repayments | (3,835) | (3,043) |
Effect of changes in related parties | (328) | (6,295) |
Balance, end of year | $ 5,343 | $ 6,477 |
Related Party Transactions (D_2
Related Party Transactions (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Related Party Transactions [Abstract] | ||
Related party deposit liabilities | $ 6,300 | $ 8,100 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Matching contributions to 401(k) plan cost | $ 207 | $ 189 | $ 180 |
Post-retirement Benefits Plan [Member] | |||
Benefit expense | 12 | 14 | 18 |
Benefit obligation | 98 | 160 | |
Deferred Compensation Plans - Directors [Member] | |||
Benefit expense | 5 | 7 | 7 |
Benefit obligation | $ 65 | 103 | |
Description of benefit plan | A deferred director compensation plan covers former directors, which was acquired by ChoiceOne in 2006. Under the plan, ChoiceOne pays each former director the amount of director fees deferred plus interest at rates ranging from 5.50% to 5.84% over various periods as elected by each director. | ||
Deferred Compensation Plans - Directors [Member] | Lower Range [Member] | |||
Interest rate on deferred director fees | 5.50% | ||
Deferred Compensation Plans - Directors [Member] | Upper Range [Member] | |||
Interest rate on deferred director fees | 5.84% | ||
Deferred Compensation Plans - Executive Officers [Member] | |||
Benefit expense | $ 6 | 12 | $ 19 |
Benefit obligation | $ 420 | $ 492 | |
Description of benefit plan | A supplemental executive retirement plan covers four former executive officers. Under the plan, ChoiceOne pays these individuals a specific amount of compensation over a 15-year period commencing upon early retirement age (as defined in the plan) or normal retirement age (as defined in the plan). |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - Stock Options [Member] $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)$ / sharesshares | ||
Number of options: | ||
Number of Options outstanding, beginning | shares | 47,250 | |
Options outstanding prior to stock dividend | shares | 47,250 | |
Options outstanding after 5% stock dividend | shares | 49,613 | [1] |
Options exercised after stock dividend | shares | (6,484) | |
Options granted after stock dividend | $ | $ 15,000 | |
Number of Options outstanding, ending | shares | 58,129 | |
Number of Options exercisable | shares | 38,612 | |
Weighted Average Exercise Price: | ||
Weighted Average Exercise Price of Options outstanding, beginning | $ 22.32 | |
Options outstanding prior to stock dividend | 22.32 | |
Options outstanding after 5% stock dividend | 21.26 | [1] |
Options exercised after stock dividend | 21.08 | |
Options granted after stock dividend | 25.65 | |
Weighted Average Exercise Price of Options outstanding, ending | 22.41 | |
Weighted Average Exercise Price of Options exercisable | $ 21.52 | |
[1] | The 2018 balance was adjusted for the 5% stock dividend paid on May 31, 2018. |
Stock Based Compensation (Det_2
Stock Based Compensation (Details 1) | 12 Months Ended |
Dec. 31, 2018shares | |
Exercise Price $25.65 [Member] | |
Number of Options outstanding, ending | 15,000 |
Number of Options exercisable | 3,750 |
Weighted average remaining contractual life of options outstanding and exercisable | 9 years 5 months 1 day |
Exercise Price $20.86 [Member] | |
Number of Options outstanding, ending | 15,707 |
Number of Options exercisable | 7,440 |
Weighted average remaining contractual life of options outstanding and exercisable | 8 years 8 months 5 days |
Exercise Price $21.13 [Member] | |
Number of Options outstanding, ending | 27,422 |
Number of Options exercisable | 27,422 |
Weighted average remaining contractual life of options outstanding and exercisable | 5 years 3 months 22 days |
Stock Based Compensation (Det_3
Stock Based Compensation (Details 2) - Stock Options [Member] | 12 Months Ended |
Dec. 31, 2018$ / shares | |
Risk-free interest rate | 2.89% |
Expected option life | 5 years 9 months |
Expected stock price volatility | 20.79% |
Dividend yield | 3.04% |
Fair value of options granted per share | $ 4.17 |
Stock Based Compensation (Det_4
Stock Based Compensation (Details 3) - Restricted Stock Units [Member] | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Outstanding Stock Awards Shares | |
Balance, beginning of year shares | shares | 18,060 |
Granted | shares | 10,900 |
Vested | shares | (9,536) |
Impact of stock dividend | shares | 1,016 |
Balance, end of year shares | shares | 20,440 |
Weighted Average Grant Date Fair Value Per Share | |
Balance, beginning of year | $ / shares | $ 23.14 |
Granted | $ / shares | 26 |
Vested | $ / shares | 23.15 |
Impact of stock dividend | $ / shares | 24.71 |
Balance, end of year | $ / shares | $ 24.74 |
Stock Based Compensation (Det_5
Stock Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2018 | |
Stock-based compensation expense | $ 344 | $ 317 | $ 380 | |
Authorized number of awards | 200,000 | |||
Shares available for future grants | 95,771 | |||
Share price | $ 26.25 | |||
Intrinsic value outstanding | $ 63 | |||
Upper Range [Member] | ||||
Weighted Average Exercise Price of Options outstanding, ending | $ 25.65 | |||
Lower Range [Member] | ||||
Weighted Average Exercise Price of Options outstanding, ending | $ 20.86 | |||
Stock Options [Member] | ||||
Stock-based compensation expense | $ 38 | $ 49 | 71 | |
Weighted Average Exercise Price of Options outstanding, ending | $ 22.41 | $ 22.32 | ||
Share price | $ 25 | |||
Weighted average remaining contractual life of options outstanding and exercisable | 6 years 4 months 25 days | |||
Intrinsic value outstanding | $ 106 | |||
Intrinsic value exercisable | 31 | |||
Unrecognized compensation expense | 43 | |||
Restricted Stock Units [Member] | ||||
Stock-based compensation expense | $ 244 | $ 191 | $ 207 | |
Numbers units outstanding | 20,440 | 18,060 | ||
Units outstanding, value | $ 511 | $ 430 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Basic | |||||||||||
Net income | $ 7,333 | $ 6,168 | $ 6,090 | ||||||||
Weighted average common shares outstanding | 3,614,302 | 3,621,216 | 3,624,037 | ||||||||
Basic earnings per common shares | $ 0.51 | $ 0.55 | $ 0.51 | $ 0.46 | $ 0.37 | $ 0.48 | $ 0.45 | $ 0.40 | $ 2.03 | $ 1.70 | $ 1.68 |
Diluted | |||||||||||
Net income | $ 7,333 | $ 6,168 | $ 6,090 | ||||||||
Weighted average common shares outstanding | 3,614,302 | 3,621,216 | 3,624,037 | ||||||||
Plus dilutive stock options and restricted stock units | 13,825 | 8,465 | 5,482 | ||||||||
Weighted average common shares outstanding and potentially dilutive shares | 3,628,127 | 3,629,681 | 3,629,519 | ||||||||
Diluted earnings per common share | $ 0.50 | $ 0.55 | $ 0.51 | $ 0.46 | $ 0.37 | $ 0.48 | $ 0.45 | $ 0.40 | $ 2.02 | $ 1.70 | $ 1.68 |
Earnings Per Share (Details Nar
Earnings Per Share (Details Narrative) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||
Dilutive stock options excluded in calculation of earnings per share | 15,000 | 0 | 30,000 |
Dividend rate | 5.00% |
Condensed Financial Statement_3
Condensed Financial Statements of Parent Company (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||||
Securities available for sale (Note 2) | $ 166,602 | $ 155,591 | ||
Other assets | 7,355 | 6,615 | ||
Total assets | 670,544 | 646,544 | ||
Liabilities | ||||
Other liabilities | 3,019 | 2,725 | ||
Total liabilities | 590,067 | 569,994 | ||
Shareholders' equity | 80,477 | 76,550 | $ 71,698 | $ 69,842 |
Total liabilities and shareholders' equity | 670,544 | 646,544 | ||
Parent Company [Member] | ||||
Assets | ||||
Cash | 1,400 | 1,249 | $ 516 | $ 1,145 |
Equity securities at fair value | 1,960 | |||
Securities available for sale (Note 2) | 1,692 | 3,607 | ||
Other assets | 122 | 188 | ||
Investment in ChoiceOne Bank | 75,313 | 71,570 | ||
Total assets | 80,487 | 76,614 | ||
Liabilities | ||||
Other liabilities | 10 | 64 | ||
Total liabilities | 10 | 64 | ||
Shareholders' equity | 80,477 | 76,550 | ||
Total liabilities and shareholders' equity | $ 80,487 | $ 76,614 |
Condensed Financial Statement_4
Condensed Financial Statements of Parent Company (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Gains on sales of securities | $ 34 | $ (280) | $ 312 | ||||||||
Change in market value of equity securities | 71 | ||||||||||
Income tax (expense)/benefit | (1,155) | (2,387) | (2,162) | ||||||||
Net income | $ 1,828 | $ 2,014 | $ 1,833 | $ 1,658 | $ 1,367 | $ 1,720 | $ 1,635 | $ 1,446 | 7,333 | 6,168 | 6,090 |
Parent Company [Member] | |||||||||||
Interest and dividends from ChoiceOne Bank | 2,800 | 3,042 | 3,161 | ||||||||
Interest and dividends from other securities | 47 | 55 | 52 | ||||||||
Gains on sales of securities | 9 | 1 | |||||||||
Change in market value of equity securities | 184 | ||||||||||
Total income | 3,040 | 3,098 | 3,213 | ||||||||
Other expenses | 144 | 123 | 133 | ||||||||
Income before income tax and equity in undistributed net income of subsidiary | 2,896 | 2,975 | 3,080 | ||||||||
Income tax (expense)/benefit | (14) | 73 | 39 | ||||||||
Income before equity in undistributed net income of subsidiary | 2,882 | 3,048 | 3,119 | ||||||||
Equity in undistributed net income of subsidiary | 4,451 | 3,120 | 2,971 | ||||||||
Net income | $ 7,333 | $ 6,168 | $ 6,090 |
Condensed Financial Statement_5
Condensed Financial Statements of Parent Company (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||||||||||
Net income | $ 1,828 | $ 2,014 | $ 1,833 | $ 1,658 | $ 1,367 | $ 1,720 | $ 1,635 | $ 1,446 | $ 7,333 | $ 6,168 | $ 6,090 |
Adjustments to reconcile net income to net cash from operating activities: | |||||||||||
Amortization | 893 | 1,061 | 1,531 | ||||||||
Net gain on sale of securities | (34) | 280 | (312) | ||||||||
Change in market value of equity securities | (71) | ||||||||||
Changes in other assets | (875) | 417 | (1,952) | ||||||||
Changes in other liabilities | 573 | (783) | 1,804 | ||||||||
Net cash from operating activities | 9,955 | 8,090 | 10,927 | ||||||||
Cash flows from investing activities: | |||||||||||
Sales of securities | 2,725 | 57,628 | 15,317 | ||||||||
Purchases of securities | (31,450) | (56,123) | (69,526) | ||||||||
Net cash used in investing activities | (43,855) | (18,302) | (41,477) | ||||||||
Cash flows from financing activities: | |||||||||||
Issuance of common stock | 77 | 98 | 85 | ||||||||
Repurchase of common stock | (523) | (203) | (794) | ||||||||
Cash dividends paid | (2,580) | (2,324) | (2,231) | ||||||||
Net cash from financing activities | 16,753 | 32,240 | 34,172 | ||||||||
Net change in cash | (17,147) | 22,028 | 3,622 | ||||||||
Parent Company [Member] | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | 7,333 | 6,168 | 6,090 | ||||||||
Adjustments to reconcile net income to net cash from operating activities: | |||||||||||
Equity in undistributed net income of subsidiary | (4,451) | (3,120) | (2,971) | ||||||||
Amortization | 18 | 19 | 20 | ||||||||
Compensation expense on employee and director stock purchases, stock options, and restricted stock units | 331 | 304 | 367 | ||||||||
Net gain on sale of securities | (9) | (1) | |||||||||
Change in market value of equity securities | (184) | ||||||||||
Changes in other assets | 66 | (37) | (68) | ||||||||
Changes in other liabilities | (19) | (39) | (1) | ||||||||
Net cash from operating activities | 3,085 | 3,294 | 3,437 | ||||||||
Cash flows from investing activities: | |||||||||||
Sales of securities | 91 | 334 | |||||||||
Purchases of securities | (466) | (1,126) | |||||||||
Net cash used in investing activities | 91 | (132) | (1,126) | ||||||||
Cash flows from financing activities: | |||||||||||
Issuance of common stock | 77 | 98 | 85 | ||||||||
Repurchase of common stock | (523) | (203) | (794) | ||||||||
Cash dividends paid | (2,579) | (2,324) | (2,231) | ||||||||
Net cash from financing activities | (3,025) | (2,429) | (2,940) | ||||||||
Net change in cash | 151 | 733 | (629) | ||||||||
Beginning cash | $ 1,249 | $ 516 | 1,249 | 516 | 1,145 | ||||||
Ending cash | $ 1,400 | $ 1,249 | $ 1,400 | $ 1,249 | $ 516 |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Equity securities at fair value | $ 2,847 | |
Securities available for sale (Note 2) | 166,602 | $ 155,591 |
Loans to other financial institutions | 20,644 | 6,802 |
Liabilities | ||
Noninterest-bearing deposits | 153,542 | 151,462 |
Interest-bearing deposits | 423,473 | 388,391 |
Federal funds purchased | 4,800 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets | ||
Cash and due from banks | 19,690 | 36,837 |
Equity securities at fair value | 1,961 | |
Securities available for sale (Note 2) | 1,892 | |
Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Securities available for sale (Note 2) | 158,104 | 140,301 |
Federal Home Loan Bank and Federal Reserve Bank stock | 3,567 | 3,567 |
Loans held for sale | 856 | 1,773 |
Loans to other financial institutions | 20,644 | 6,802 |
Accrued interest receivable | 2,267 | 2,146 |
Liabilities | ||
Noninterest-bearing deposits | 153,542 | 151,462 |
Interest-bearing deposits | 422,381 | 387,343 |
Federal funds purchased | 4,800 | |
Repurchase agreements | 7,148 | |
Federal Home Loan Bank advances | 5,241 | 20,271 |
Accrued interest payable | 210 | 49 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Assets | ||
Equity securities at fair value | 886 | |
Securities available for sale (Note 2) | 8,498 | 13,398 |
Loans, net | 399,091 | 394,819 |
Carrying Amount [Member] | ||
Assets | ||
Cash and due from banks | 19,690 | 36,837 |
Equity securities at fair value | 2,847 | |
Securities available for sale (Note 2) | 166,602 | 155,591 |
Federal Home Loan Bank and Federal Reserve Bank stock | 3,567 | 3,567 |
Loans held for sale | 831 | 1,721 |
Loans to other financial institutions | 20,644 | 6,802 |
Loans, net | 404,400 | 394,208 |
Accrued interest receivable | 2,267 | 2,146 |
Liabilities | ||
Noninterest-bearing deposits | 153,542 | 151,462 |
Interest-bearing deposits | 423,473 | 388,391 |
Federal funds purchased | 4,800 | |
Repurchase agreements | 7,148 | |
Federal Home Loan Bank advances | 5,233 | 20,268 |
Accrued interest payable | 210 | 49 |
Estimated Fair Value [Member] | ||
Assets | ||
Cash and due from banks | 19,690 | 36,837 |
Equity securities at fair value | 2,847 | |
Securities available for sale (Note 2) | 166,602 | 155,591 |
Federal Home Loan Bank and Federal Reserve Bank stock | 3,567 | 3,567 |
Loans held for sale | 856 | 1,773 |
Loans to other financial institutions | 20,644 | 6,802 |
Loans, net | 399,091 | 394,819 |
Accrued interest receivable | 2,267 | 2,146 |
Liabilities | ||
Noninterest-bearing deposits | 153,542 | 151,462 |
Interest-bearing deposits | 422,381 | 387,343 |
Federal funds purchased | 4,800 | |
Repurchase agreements | 7,148 | |
Federal Home Loan Bank advances | 5,241 | 20,271 |
Accrued interest payable | $ 210 | $ 49 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | $ 166,602 | $ 155,591 |
U.S. Government and Federal Agency [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 33,529 | 35,126 |
U.S. Treasury Notes and Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 1,947 | 1,960 |
Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 2,847 | 2,892 |
State and Municipal [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 103,928 | 100,048 |
Mortgage-backed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 21,575 | 9,820 |
Corporate [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 5,102 | 5,151 |
Asset-backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 21 | 94 |
Trust Preferred Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 500 | 500 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 158,104 | 140,301 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 1,892 | |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 8,498 | 13,398 |
Fair Value Measured - Recurring Basis [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 166,602 | 155,591 |
Fair Value Measured - Recurring Basis [Member] | U.S. Government and Federal Agency [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 33,529 | 35,126 |
Fair Value Measured - Recurring Basis [Member] | U.S. Treasury Notes and Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 1,947 | 1,960 |
Fair Value Measured - Recurring Basis [Member] | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity Securities Held at Fair Value | 2,847 | |
Securities available for sale (Note 2) | 2,892 | |
Fair Value Measured - Recurring Basis [Member] | State and Municipal [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 103,928 | 100,048 |
Fair Value Measured - Recurring Basis [Member] | Mortgage-backed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 21,575 | 9,820 |
Fair Value Measured - Recurring Basis [Member] | Corporate [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 5,102 | 5,151 |
Fair Value Measured - Recurring Basis [Member] | Asset-backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 21 | 94 |
Fair Value Measured - Recurring Basis [Member] | Trust Preferred Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 500 | 500 |
Fair Value Measured - Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 158,104 | 140,301 |
Fair Value Measured - Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | U.S. Government and Federal Agency [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 33,529 | 35,126 |
Fair Value Measured - Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | U.S. Treasury Notes and Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 1,947 | 1,960 |
Fair Value Measured - Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | State and Municipal [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 95,930 | 88,150 |
Fair Value Measured - Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Mortgage-backed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 21,575 | 9,820 |
Fair Value Measured - Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Corporate [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 5,102 | 5,151 |
Fair Value Measured - Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Asset-backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 21 | 94 |
Fair Value Measured - Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 1,892 | |
Fair Value Measured - Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity Securities Held at Fair Value | 1,961 | |
Securities available for sale (Note 2) | 1,892 | |
Fair Value Measured - Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 8,498 | 13,398 |
Fair Value Measured - Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity Securities Held at Fair Value | 886 | |
Securities available for sale (Note 2) | 1,000 | |
Fair Value Measured - Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | State and Municipal [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 7,998 | 11,898 |
Fair Value Measured - Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Trust Preferred Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | $ 500 | $ 500 |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Changes in Level 3 Investment Securities, Available for Sale Measured at Fair Value on a Recurring Basis | ||
Total unrealized gains/(losses) included in other comprehensive income | $ (300) | $ 196 |
Fair Value Measured - Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Equity Securities Held at Fair Value [Member] | ||
Changes in Level 3 Investment Securities, Available for Sale Measured at Fair Value on a Recurring Basis | ||
Reclassification due to implementation of ASU 2016-01 | 1,000 | |
Total realized and unrealized gains included in noninterest income | (114) | |
Balance at the end of year | 886 | |
Fair Value Measured - Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Investment Securities Available For Sale [Member] | ||
Changes in Level 3 Investment Securities, Available for Sale Measured at Fair Value on a Recurring Basis | ||
Balance at the beginning of year | 13,398 | 15,103 |
Reclassification due to implementation of ASU 2016-01 | (1,000) | |
Total unrealized gains/(losses) included in other comprehensive income | (186) | 196 |
Net purchases, sales, calls, and maturities | (3,714) | (1,901) |
Balance at the end of year | $ 8,498 | $ 13,398 |
Fair Value Measurements (Deta_3
Fair Value Measurements (Details 2) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other real estate owned, net | $ 102 | $ 106 | $ 437 | $ 31 |
Fair Value - Non-Recurring Basis [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impaired Loans | 4,024 | 4,140 | ||
Other real estate owned, net | 102 | 106 | ||
Fair Value - Non-Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impaired Loans | 4,024 | 4,140 | ||
Other real estate owned, net | $ 102 | $ 106 |
Fair Value Measurements (Deta_4
Fair Value Measurements (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | ||
Total unrealized gains (losses) included in other comprehensive income | $ (300) | $ 196 |
Level 3 securities purchased during period | $ 224 | $ 3,200 |
Off-Balance Sheet Activities (D
Off-Balance Sheet Activities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | ||
Unused lines of credit and letters of credit - fixed rate | $ 20,036 | $ 9,033 |
Unused lines of credit and letters of credit - variable rate | 103,978 | 104,257 |
Commitments to fund loans (at market rates) - fixed rate | 20,997 | 8,663 |
Commitments to fund loans (at market rates) - variable rate | $ 1,421 | $ 1,225 |
Off-Balance Sheet Activities _2
Off-Balance Sheet Activities (Details Narrative) | 12 Months Ended |
Dec. 31, 2018 | |
Lower Range [Member] | |
Interest rate of commitments | 3.25% |
Term of commitments | 1 year |
Upper Range [Member] | |
Interest rate of commitments | 8.00% |
Term of commitments | 30 years |
Regulatory Capital (Details)
Regulatory Capital (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Parent Company [Member] | ||
Total Capital | ||
Total Capital | $ 72,148 | $ 67,155 |
Total Capital (to risk-weighted assets) ratio | 13.80% | 13.90% |
Minimum amount of capital for adequacy purposes | $ 41,811 | $ 38,761 |
Minimum amount of capital for adequacy purposes, ratio | 8.00% | 8.00% |
Common equity Tier 1 capital (to risk weighted assets) | ||
Common equity Capital | $ 67,481 | $ 62,584 |
Common equity Capital ratio | 12.90% | 12.90% |
Minimum amount of Common equity Capital for adequacy purposes | $ 23,519 | $ 21,803 |
Minimum amount of Common equity Capital for adequacy purposes, ratio | 4.50% | 4.50% |
Tier 1 Capital (to risk-weighted assets) | ||
Tier 1 Capital | $ 67,481 | $ 62,584 |
Tier 1 Capital (to risk-weighted assets) ratio | 12.90% | 12.90% |
Minimum amount of Tier 1 Capital for adequacy purposes | $ 31,359 | $ 29,071 |
Minimum amount of Tier 1 Capital for adequacy purposes, ratio | 6.00% | 6.00% |
Tier 1 Leverage Capital (to average assets) | ||
Tier 1 Capital | $ 67,481 | $ 62,584 |
Tier 1 Capital (to average assets) ratio | 10.50% | 9.90% |
Minimum amount of Tier 1 Capital for adequacy purposes | $ 25,658 | $ 25,301 |
Minimum amount of Tier 1 Capital for adequacy purposes, ratio | 4.00% | 4.00% |
ChoiceOne Bank [Member] | ||
Total Capital | ||
Total Capital | $ 66,976 | $ 62,393 |
Total Capital (to risk-weighted assets) ratio | 12.90% | 12.90% |
Minimum amount of capital for adequacy purposes | $ 41,599 | $ 38,555 |
Minimum amount of capital for adequacy purposes, ratio | 8.00% | 8.00% |
Minimum Capital required to be well-capitalized | $ 51,999 | $ 48,194 |
Minimum Capital required to be well-capitalized, ratio | 10.00% | 10.00% |
Common equity Tier 1 capital (to risk weighted assets) | ||
Common equity Capital | $ 62,309 | $ 57,822 |
Common equity Capital ratio | 12.00% | 12.00% |
Minimum amount of Common equity Capital for adequacy purposes | $ 23,399 | $ 21,687 |
Minimum amount of Common equity Capital for adequacy purposes, ratio | 4.50% | 4.50% |
Minimum Common equity Capital required to be well-capitalized | $ 33,799 | $ 31,326 |
Minimum Common equity Capital required to be well-capitalized, ratio | 6.50% | 6.50% |
Tier 1 Capital (to risk-weighted assets) | ||
Tier 1 Capital | $ 62,309 | $ 57,822 |
Tier 1 Capital (to risk-weighted assets) ratio | 12.00% | 12.00% |
Minimum amount of Tier 1 Capital for adequacy purposes | $ 31,199 | $ 28,917 |
Minimum amount of Tier 1 Capital for adequacy purposes, ratio | 6.00% | 6.00% |
Minimum Tier 1 Capital required to be well-capitalized | $ 41,599 | $ 38,555 |
Minimum Tier 1 Capital required to be well-capitalized, ratio | 8.00% | 8.00% |
Tier 1 Leverage Capital (to average assets) | ||
Tier 1 Capital | $ 62,309 | $ 57,822 |
Tier 1 Capital (to average assets) ratio | 9.80% | 9.20% |
Minimum amount of Tier 1 Capital for adequacy purposes | $ 25,512 | $ 25,156 |
Minimum amount of Tier 1 Capital for adequacy purposes, ratio | 4.00% | 4.00% |
Minimum Tier 1 Capital required to be well-capitalized | $ 31,890 | $ 31,445 |
Minimum Tier 1 Capital required to be well-capitalized, ratio | 5.00% | 5.00% |
Regulatory Capital (Details Nar
Regulatory Capital (Details Narrative) $ in Thousands | Dec. 31, 2018USD ($) |
Banking and Thrift [Abstract] | |
Amount of undistributed net income available for dividends | $ 10,500 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Interest income | $ 6,450 | $ 6,212 | $ 6,141 | $ 5,722 | $ 5,831 | $ 5,624 | $ 5,425 | $ 5,161 | $ 24,525 | $ 22,041 | $ 20,312 |
Net interest income | 5,617 | 5,522 | 5,595 | 5,330 | 5,393 | 5,238 | 5,077 | 4,855 | 22,064 | 20,563 | 19,343 |
Net income | $ 1,828 | $ 2,014 | $ 1,833 | $ 1,658 | $ 1,367 | $ 1,720 | $ 1,635 | $ 1,446 | $ 7,333 | $ 6,168 | $ 6,090 |
Basic earnings per common share | $ 0.51 | $ 0.55 | $ 0.51 | $ 0.46 | $ 0.37 | $ 0.48 | $ 0.45 | $ 0.40 | $ 2.03 | $ 1.70 | $ 1.68 |
Fully diluted earnings per common share | $ 0.50 | $ 0.55 | $ 0.51 | $ 0.46 | $ 0.37 | $ 0.48 | $ 0.45 | $ 0.40 | $ 2.02 | $ 1.70 | $ 1.68 |
Quarterly Financial Data (Una_4
Quarterly Financial Data (Unaudited) (Details Narrative) | 1 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | ||
Stock dividend paid | 5.00% | 5.00% |