Document and Entity Information
Document and Entity Information - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 28, 2020 | Jun. 30, 2019 | |
Cover [Abstract] | |||
Entity Registrant Name | CHOICEONE FINANCIAL SERVICES INC | ||
Entity Central Index Key | 0000803164 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 000-19202 | ||
Entity Incorporation, State or Country Code | MI | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Smaller Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 99,700 | ||
Share price | $ 26.25 | ||
Entity Common Stock, Shares Outstanding | 7,248,492 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and due from banks | $ 59,308 | $ 19,690 |
Time deposits in other financial institutions | 250 | |
Cash and cash equivalents | 59,558 | 19,690 |
Equity securities at fair value (Note 2) | 2,851 | 2,847 |
Securities available for sale (Note 2) | 339,579 | 166,602 |
Federal Home Loan Bank stock | 3,524 | 1,994 |
Federal Reserve Bank stock | 2,934 | 1,573 |
Loans held for sale | 3,095 | 831 |
Loans to other financial institutions | 51,048 | 20,644 |
Loans (Note 3) | 802,048 | 409,073 |
Allowance for loan losses (Note 3) | (4,057) | (4,673) |
Loans, net | 797,991 | 404,400 |
Premises and equipment, net (Note 5) | 24,265 | 15,879 |
Other real estate owned, net (Note 7) | 929 | 102 |
Cash value of life insurance policies | 31,979 | 14,899 |
Goodwill (Note 6) | 52,870 | 13,728 |
Core deposit intangible (Note 6) | 6,006 | |
Other assets | 9,499 | 7,355 |
Total assets | 1,386,128 | 670,544 |
Liabilities | ||
Deposits - noninterest-bearing (Note 8) | 287,460 | 153,542 |
Deposits - interest-bearing (Note 8) | 867,142 | 423,473 |
Total deposits | 1,154,602 | 577,015 |
Federal funds purchased | 4,800 | |
Advances from Federal Home Loan Bank (Note 10) | 33,198 | 5,233 |
Other liabilities (Notes 11 and 13) | 6,189 | 3,019 |
Total liabilities | 1,193,989 | 590,067 |
Shareholders' Equity (Note 20) | ||
Preferred stock; shares authorized: 100,000; shares outstanding: none | ||
Common stock and paid-in capital, no par value; shares authorized: 12,000,000; shares outstanding: 7,245,088 in 2019 and 3,616,483 in 2018 (Note 14) | 162,610 | 54,523 |
Retained earnings | 28,051 | 26,686 |
Accumulated other comprehensive income (loss), net | 1,478 | (732) |
Total shareholders' equity | 192,139 | 80,477 |
Total liabilities and shareholders' equity | $ 1,386,128 | $ 670,544 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
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 | 12,000,000 | 12,000,000 |
Common stock, outstanding | 7,245,088 | 3,616,483 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Interest income | |||
Loans, including fees | $ 26,777 | $ 20,033 | $ 17,964 |
Securities: | |||
Taxable | 3,956 | 2,896 | 2,556 |
Tax exempt | 1,472 | 1,465 | 1,419 |
Other | 268 | 131 | 102 |
Total interest income | 32,473 | 24,525 | 22,041 |
Interest expense | |||
Deposits | 4,188 | 2,175 | 1,189 |
Advances from Federal Home Loan Bank | 455 | 235 | 276 |
Other | 57 | 51 | 13 |
Total interest expense | 4,700 | 2,461 | 1,478 |
Net interest income | 27,773 | 22,064 | 20,563 |
Provision for loan losses (Note 3) | 35 | 485 | |
Net interest income after provision for loan losses | 27,773 | 22,029 | 20,078 |
Noninterest income | |||
Customer service charges | 5,277 | 4,525 | 4,135 |
Insurance and investment commissions | 310 | 335 | 826 |
Gains on sales of loans (Note 4) | 1,951 | 1,003 | 1,265 |
Net gains/(losses) on sales of securities (Note 2) | 22 | 34 | (280) |
Net gains on sales and write-downs of other assets (Note 7) | 55 | 83 | 26 |
Earnings on life insurance policies | 773 | 385 | 398 |
Change in market value of equity securities | 71 | ||
Gain on sale of investment book of business | 908 | ||
Other | 780 | 484 | 533 |
Total noninterest income | 9,168 | 6,920 | 7,811 |
Noninterest expense | |||
Salaries and benefits (Notes 13 and 14) | 14,401 | 10,997 | 10,249 |
Occupancy and equipment (Note 5) | 3,557 | 2,722 | 2,896 |
Data processing | 3,210 | 2,205 | 2,279 |
Professional fees | 3,112 | 1,349 | 1,166 |
Supplies and postage | 407 | 408 | 399 |
Advertising and promotional | 528 | 308 | 298 |
Intangible amortization (Note 6) | 353 | ||
FDIC insurance | 45 | 185 | 200 |
Other | 2,863 | 2,287 | 1,847 |
Total noninterest expense | 28,476 | 20,461 | 19,334 |
Income before income tax | 8,465 | 8,488 | 8,555 |
Income tax expense (Note 11) | 1,294 | 1,155 | 2,387 |
Net income | $ 7,171 | $ 7,333 | $ 6,168 |
Basic earnings per share (Note 15) (in dollars per share) | $ 1.58 | $ 2.03 | $ 1.70 |
Diluted earnings per share (Note 15) (in dollars per share) | 1.58 | 2.02 | 1.70 |
Dividends declared per share (in dollars per share) | $ 1.40 | $ 0.71 | $ 0.64 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 7,171 | $ 7,333 | $ 6,168 |
Other comprehensive income (loss): | |||
Changes in net unrealized gains (losses) on investment securities available for sale, net of tax expense (benefit) of $583, $(196), and $324 for the years ended December 31, 2019, 2018, and 2017, respectively | 2,246 | (737) | 628 |
Reclassification adjustment for realized gain on sale of investment securities available for sale included in net income, net of tax expense (benefit) of $5, $7, and $(95) for the years ended December 31, 2019, 2018, and 2017, respectively | (18) | (27) | 185 |
Change in adjustment for postretirement benefits, net of tax expense (benefit) of $(5), $10, and $(9) for the years ended December 31, 2019, 2018, and 2017, respectively | (18) | 39 | (17) |
Other comprehensive income (loss), net of tax | 2,210 | (725) | 796 |
Comprehensive income | $ 9,381 | $ 6,608 | $ 6,964 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Unrealized holding gains on available for sale securities, tax expense (benefit) | $ 583 | $ (196) | $ 324 |
Reclassification adjustment for gain recognized in net income, tax expense (benefit) | 5 | 7 | (95) |
Adjustment for postretirement benefits, tax expense (benefit) | $ (5) | $ 10 | $ (9) |
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, 2016 | $ 46,299 | $ 25,997 | $ (598) | $ 71,698 | |
Balance, beginning (in shares) at Dec. 31, 2016 | 3,277,944 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 6,168 | 6,168 | |||
Other comprehensive income (loss) | 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 and issued | [1] | $ 13 | 13 | ||
Stock options exercised and issued (in shares) | [1] | 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 | [2],[3] | (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 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 7,333 | 7,333 | |||
Other comprehensive income (loss) | (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 and issued (in shares) | [1] | 1,241 | |||
Restricted stock units issued (in shares) | 7,303 | ||||
Adoption effect of ASU 2016-01 | [4] | 244 | (244) | ||
Stock dividend declared | $ 4,335 | (4,342) | (7) | ||
Stock dividend declared (in shares) | 172,094 | ||||
Cash dividends declared | [2],[3] | (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 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 7,171 | $ 7,171 | |||
Other comprehensive income (loss) | 2,210 | 2,210 | |||
Shares issued | $ 25 | 25 | |||
Shares issued (in shares) | 8,118 | ||||
Shares repurchased | $ (67) | (67) | |||
Shares repurchased (in shares) | (2,228) | ||||
Effect of employee stock purchases | $ 14 | 14 | |||
Stock-based compensation expense | 398 | 398 | |||
Stock options exercised and issued | [1] | $ 78 | 78 | ||
Stock options exercised and issued (in shares) | [1] | 3,913 | |||
Restricted stock units issued (in shares) | 14,930 | ||||
Merger with County Bank Corp, net of issuance costs | $ 107,639 | 107,639 | |||
Merger with County Bank Corp, net of issuance costs (in shares) | 3,603,872 | ||||
Cash dividends declared | (5,806) | (5,806) | |||
Balance, ending at Dec. 31, 2019 | $ 162,610 | $ 28,051 | $ 1,478 | $ 192,139 | |
Balance, ending (in shares) at Dec. 31, 2019 | 7,245,088 | 7,245,088 | |||
[1] | The amount shown represents the number of shares issued in cashless transactions where some taxes are netted on a portion of the exercises. | ||||
[2] | Adjusted for 5% stock dividend issued on May 31, 2017. | ||||
[3] | Adjusted for 5% stock dividend issued on May 31, 2018. | ||||
[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 | May 31, 2018 | May 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Stockholders' Equity [Abstract] | |||||
Cash dividend declared, per share | $ 1.40 | $ 0.71 | $ 0.64 | ||
Stock dividend issued | 5.00% | 5.00% | 5.00% | 5.00% |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net income | $ 7,171 | $ 7,333 | $ 6,168 |
Adjustments to reconcile net income to net cash from operating activities: | |||
Provision for loan losses | 35 | 485 | |
Depreciation | 1,610 | 1,183 | 1,389 |
Amortization | 1,517 | 893 | 1,061 |
Compensation expense on employee and director stock purchases, stock options, and restricted stock units | 373 | 344 | 317 |
Net (gains)/losses on sales of securities | (22) | (34) | 280 |
Net change in market value of equity securities | (71) | ||
Gains on sales of loans | (1,951) | (1,003) | (1,265) |
Loans originated for sale | (63,920) | (33,555) | (43,171) |
Proceeds from loan sales | 62,763 | 34,872 | 42,883 |
Earnings on bank-owned life insurance | (485) | (385) | (398) |
Proceeds from BOLI policy | 605 | ||
Earnings on death benefit from bank-owned life insurance | (288) | ||
(Gains)/losses on sales of other real estate owned | (54) | (79) | (18) |
Proceeds from sales of other real estate owned | 938 | 515 | 663 |
Deferred federal income tax (benefit)/expense | 310 | 209 | 62 |
Net change in: | |||
Other assets | 2,128 | (875) | 417 |
Other liabilities | (1,493) | 573 | (783) |
Net cash from operating activities | 9,202 | 9,955 | 8,090 |
Cash flows from investing activities: | |||
Sales of securities available for sale | 178,450 | 2,634 | 57,595 |
Sales of equity securities | 463 | 91 | 33 |
Maturities, prepayments and calls of securities available for sale | 47,816 | 13,443 | 17,572 |
Purchases of securities available for sale | (209,763) | (31,450) | (56,123) |
Purchases or calls of FHLB stock | (1) | ||
Loan originations and payments, net | (485) | (24,366) | (35,723) |
Additions to premises and equipment | (766) | (4,207) | (1,656) |
Cash received from merger with County Bank Corp | 20,638 | ||
Net cash from investing activities | 36,352 | (43,855) | (18,302) |
Cash flows from financing activities: | |||
Net change in deposits | 3,986 | 37,162 | 27,467 |
Net change in repurchase agreements | (7,148) | (765) | |
Net change in fed funds purchased | (8,600) | 4,800 | |
Proceeds from Federal Home Loan Bank advances | 115,000 | 128,500 | 212,500 |
Payments on Federal Home Loan Bank advances | (110,035) | (143,535) | (204,533) |
Issuance of common stock | 142 | 77 | 98 |
Repurchase of common stock | (67) | (523) | (203) |
Cash dividends and fractional shares from stock dividend and merger | (5,815) | (2,580) | (2,324) |
Cash related to equity issuance for merger | (297) | ||
Net cash from financing activities | (5,686) | 16,753 | 32,240 |
Net change in cash and cash equivalents | 39,868 | (17,147) | 22,028 |
Beginning cash and cash equivalents | 19,690 | 36,837 | 14,809 |
Ending cash and cash equivalents | 59,558 | 19,690 | 36,837 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 4,500 | 2,300 | 1,465 |
Cash paid for income taxes | 1,035 | 850 | 2,120 |
Loans transferred to other real estate owned | $ 347 | $ 432 | $ 314 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
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. (“ChoiceOne”), its wholly-owned subsidiaries, ChoiceOne Bank and Lakestone Bank & Trust (together referred to as the “Banks”), ChoiceOne Bank’s wholly-owned subsidiary, ChoiceOne Insurance Agencies, Inc. (the “Insurance Agency”) and Lakestone’s wholly-owned subsidiary, Lakestone Financial Services, Inc. (“Lakestone Financial”). Intercompany transactions and balances have been eliminated in consolidation. Merger with County On October 1, 2019, ChoiceOne completed the merger of County Bank Corp (“County”) with and into ChoiceOne with ChoiceOne surviving the merger. Accordingly, the reported consolidated financial condition and operating results as of and for the year ended December 31, 2019 include the impact of the merger, which was effective as of October 1, 2019. For additional details regarding the merger with County, see Note 21 (Business Combination) below. Nature of Operations The Banks are full-service community banks that offer commercial, consumer, and real estate loans as well as traditional demand, savings and time deposits to both commercial and consumer clients within ChoiceOne Bank’s primary market areas in Kent, Muskegon, Newaygo, and Ottawa counties in western Michigan and Lakestone Bank’s primary market areas in Lapeer, Macomb, and St. Clair counties in southeastern 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 ChoiceOne 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. Lakestone Financial is a wholly-owned subsidiary of Lakestone, which earns revenues through the sale of annuities and other third party investment products. Together, the Banks and the Insurance Agency and Lakestone Financial 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, remaining purchase accounting adjustments, 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. No allowance for loan loss is recorded for loans acquired in a business combination unless losses are incurred subsequent to the acquisition date. Acquired loans are considered purchased credit impaired (“PCI”) if as of the acquisition date, management determines the loan has evidence of deterioration in credit quality since origination and it is probable at acquisition the Company will be unable to collect all contractually required payments. The discount related to credit quality for PCI loans is recorded as an adjustment to the loan balance as of the acquisition date and is not accreted into income. Management subsequently estimates expected cash flows on an individual loan basis. If the present value of expected cash flows is less than a loan’s carrying amount, an allowance for loan loss is recorded through the provision for loan losses. If the present value of expected cash flows is greater than the carrying amount, the excess may be reclassified to an accretable difference and recognized into income over the loan’s remaining life. For non-PCI loans, the difference between acquisition date fair value and expected cash flows is accreted into income over a pool’s expected life using the level yield method. Loans to Other Financial Institutions Allowance for Loan Losses 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 one of the Banks, 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 Banks 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 Banks’ 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 and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized but tested for impairment at least annually or more frequently if events and circumstances exists that indicate that a goodwill impairment test should be performed. 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. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. Earnings Per Share Basic earnings per common share (“EPS”) is based on weighted-average common shares outstanding. Diluted EPS assumes issuance 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) As of December 31, 2019 2018 Unrealized gain (loss) on available for sale securities $ 1,713 $ (1,108 ) Unrecognized gains on post-retirement benefits 158 181 Tax effect (393 ) 195 Accumulated other comprehensive income (loss) $ 1,478 $ (732 ) 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, 2019. Cash Restrictions Cash on hand or on deposit with the Federal Reserve Bank of $13,231,000 and $781,000 was required to meet regulatory reserve and clearing requirements for the Banks at December 31, 2019 and 2018, respectively. The balance in excess of the amount required was interest-bearing as of December 31, 2019 and December 31, 2018. 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. 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 Banks 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 Banks, Insurance Agency, and Lakestone Financial, 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 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, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Securities | Note 2 – Securities The fair value of equity securities and the related gross unrealized gains recognized in noninterest income at December 31 were as follows: 2019 Gross Gross (Dollars in thousands) Amortized Unrealized Unrealized Fair Cost Gains Losses Value Equity securities $ 2,426 $ 425 $ — $ 2,851 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: 2019 Gross Gross (Dollars in thousands) Amortized Unrealized Unrealized Fair Cost Gains Losses Value U.S. Government and federal agency $ 17,231 $ 23 $ (39 ) $ 17,215 U.S. Treasury notes and bonds 1,994 14 — 2,008 State and municipal 172,487 2,694 (1,257 ) 173,924 Mortgage-backed 142,504 585 (329 ) 142,760 Corporate 2,649 24 (1 ) 2,672 Trust preferred securities 1,000 — — 1,000 Total $ 337,865 $ 3,340 $ (1,626 ) $ 339,579 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 Information regarding sales of equity securities and securities available for sale for the year ended December 31 follows: (Dollars in thousands) 2019 2018 2017 Proceeds from sales of securities $ 178,913 $ 2,634 $ 57,595 Gross realized gains 22 42 184 Gross realized losses — 8 464 Contractual maturities of equity securities and securities available for sale at December 31, 2019 were as follows: (Dollars in thousands) Amortized Fair Cost Value Due within one year $ 26,742 $ 26,849 Due after one year through five years 55,484 56,527 Due after five years through ten years 69,356 70,526 Due after ten years 43,779 42,917 Total debt securities 195,361 196,819 Mortgage-backed securities 142,504 142,760 Equity securities 2,426 2,851 Total $ 340,291 $ 342,430 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) 2019 2018 Securities pledged for securities sold under agreements to repurchase $ 252 $ 257 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 2019 and 2018, aggregated by investment category and length of time the individual securities have been in an unrealized loss position, were as follows: 2019 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 $ 7,175 $ (39 ) $ — $ — $ 7,175 $ (39 ) U.S. Treasury notes and bonds — — — — — — State and municipal 75,099 (1,256 ) 252 (1 ) 75,351 (1,257 ) Mortgage-backed 109,652 (327 ) 373 (2 ) 110,025 (329 ) Corporate — — 300 (1 ) 300 (1 ) Total temporarily impaired $ 191,926 $ (1,622 ) $ 925 $ (4 ) $ 192,851 $ (1,626 ) 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 ) Total temporarily impaired $ 15,110 $ (64 ) $ 102,256 $ (1,716 ) $ 117,366 $ (1,780 ) 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, 2019 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 2019 or 2018. Following is information regarding unrealized gains and losses on equity securities for the years ending December 31: 2019 2018 New gains and losses recognized during the period $ — $ 71 Less: Net gains and losses recognized during the period on securities sold (5 ) 9 Unrealized gains and losses recognized during the reporting period on securities $ 5 $ 62 At December 31, 2019, there were 63 securities with an unrealized loss, compared to 210 securities with an unrealized loss as of December 31, 2018. |
Loans and Allowance for Loan Lo
Loans and Allowance for Loan Losses | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Loans and Allowance for Loan Losses | Note 3 – Loans and Allowance for Loan Losses The Banks’ loan portfolio as of December 31 was as follows: (Dollars in thousands) 2019 2018 Agricultural $ 57,339 $ 49,109 Commercial and industrial 148,083 91,406 Consumer 38,854 24,382 Real estate - commercial 326,379 139,453 Real estate - construction 13,411 8,843 Real estate - residential 217,982 95,880 Loans, gross 802,048 409,073 Allowance for loan losses (4,057 ) (4,673 ) Loans, net $ 797,991 $ 404,400 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 applicable 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 applicable 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. The table below details the acquisition balances of the County Bank Corp acquired portfolio and the acquisition fair value adjustments at acquisition date: (Dollars in thousands) Acquired Acquired Acquired Impaired Non-impaired Total Loans acquired - contractual payments $ 7,729 $ 387,394 $ 395,123 Nonaccretable difference (2,928 ) — (2,928 ) Expected cash flows 4,801 387,394 392,195 Accretable yield (185 ) (1,656 ) (1,841 ) Carrying balance at acquisition date $ 4,616 $ 385,738 $ 390,354 The table below presents a roll-forward of the accretable yield on acquired loans for the year end December 31, 2019: (Dollars in thousands) Acquired Acquired Acquired Impaired Non-impaired Total Balance, January 1, 2019 $ — $ — $ — Merger with County Bank Corp on October 1, 2019 185 1,656 1,841 Accretion — (75 ) (75 ) Reclassification from nonaccretable difference — — — Balance, December 31, 2019 $ 185 $ 1,581 $ 1,766 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 2019 Allowance for Loan Losses Beginning balance $ 481 $ 892 $ 254 $ 1,926 $ 38 $ 537 $ 545 $ 4,673 Charge-offs — (83 ) (292 ) (589 ) — (25 ) — (989 ) Recoveries 65 22 136 26 — 124 — 373 Provision (75 ) (176 ) 172 300 38 4 (263 ) — Ending balance $ 471 $ 655 $ 270 $ 1,663 $ 76 $ 640 $ 282 $ 4,057 Individually evaluated for impairment $ 103 $ — $ 4 $ 13 $ — $ 235 $ — $ 355 Collectively evaluated for impairment $ 368 $ 655 $ 266 $ 1,650 $ 76 $ 405 $ 282 $ 3,702 Loans Individually evaluated for impairment $ 924 $ 259 $ 17 $ 2,288 $ — $ 2,434 $ 5,922 Collectively evaluated for impairment 56,415 141,583 38,524 323,358 13,411 215,106 788,397 Acquired with deteriorated credit quality — 6,241 313 733 — 442 7,729 Ending balance $ 57,339 $ 148,083 $ 38,854 $ 326,379 $ 13,411 $ 217,982 $ 802,048 (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 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 Banks’ 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 2019 2018 2019 2018 2019 2018 Risk ratings 1 and 2 $ 14,173 $ 15,300 $ 14,920 $ 11,972 $ 11,051 $ 7,962 Risk rating 3 27,163 23,938 105,656 50,266 271,120 89,173 Risk rating 4 14,530 9,082 26,152 23,961 39,934 36,193 Risk rating 5 1,094 211 1,081 5,204 1,332 4,850 Risk rating 6 379 578 274 3 2,942 1,275 $ 57,339 $ 49,109 $ 148,083 $ 91,406 $ 326,379 $ 139,453 Consumer Credit Exposure - Credit Risk Profile Based On Payment Activity (Dollars in thousands) Consumer Construction Real Estate Residential Real Estate 2019 2018 2019 2018 2019 2018 Performing $ 38,838 $ 24,320 $ 13,411 $ 8,843 $ 216,651 $ 94,925 Nonperforming — — — — — — Nonaccrual 16 62 — — 1,331 955 $ 38,854 $ 24,382 $ 13,411 $ 8,843 $ 217,982 $ 95,880 Included within the loan categories above were loans in the process of foreclosure. As of December 31, 2019 and 2018, loans in the process of foreclosure totaled $173,000 and $156,000, 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. There were no loans that were considered troubled debt restructurings (“TDRs”) that were modified during the twelve months ended December 31, 2019 and December 31, 2018. The Banks may agree to modify the terms of a loan in order to improve the Banks’ 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. As of December 31, 2019 and December 31, 2018 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, 2019 and December 31, 2018 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 Banks 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, 2019 the Banks 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 2019 With no related allowance recorded Agricultural $ 545 $ 545 $ — $ 146 $ 10 Commercial and industrial 259 340 — 104 9 Consumer — — — — — Construction real estate — — — — — Commercial real estate 1,882 2,471 — 782 30 Residential real estate 42 42 — 133 4 Subtotal 2,728 3,398 — 1,165 53 With an allowance recorded Agricultural 379 439 103 388 — Commercial and industrial — — — 86 1 Consumer 17 18 4 48 — Construction real estate — — — — — Commercial real estate 406 406 13 975 32 Residential real estate 2,392 2,460 235 2,486 83 Subtotal 3,194 3,323 355 3,983 116 Total Agricultural 924 984 103 534 10 Commercial and industrial 259 340 — 190 10 Consumer 17 18 4 48 — Construction real estate — — — — — Commercial real estate 2,288 2,877 13 1,757 62 Residential real estate 2,434 2,502 235 2,619 87 Total $ 5,922 $ 6,721 $ 355 $ 5,148 $ 169 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 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 2019 Agricultural $ — $ 68 $ — $ 68 $ 57,271 $ 57,339 $ — Commercial and industrial 542 15 259 816 147,267 148,083 — Consumer 121 19 11 151 38,703 38,854 — Commercial real estate — — 1,882 1,882 324,497 326,379 — Construction real estate — — — — 13,411 13,411 — Residential real estate 2,466 582 393 3,441 214,541 217,982 — $ 3,129 $ 684 $ 2,545 $ 6,358 $ 795,690 $ 802,048 $ — 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 $ — (1) Includes nonaccrual loans Nonaccrual loans by loan category as of December 31 as follows: (Dollars in thousands) 2019 2018 Agricultural $ 379 $ 393 Commercial and industrial 776 — Consumer 16 62 Commercial real estate 2,185 123 Construction real estate — — Residential real estate 1,331 954 $ 4,687 $ 1,532 |
Mortgage Banking
Mortgage Banking | 12 Months Ended |
Dec. 31, 2019 | |
Mortgage Banking [Abstract] | |
Mortgage Banking | Note 4 – Mortgage Banking Activity in secondary market loans during the year was as follows: (Dollars in thousands) 2019 2018 2017 Loans originated for resale, net of principal payments $ 63,920 $ 33,555 $ 43,171 Proceeds from loan sales 62,763 34,872 42,883 Net gains on sales of loans held for sale 1,951 1,003 1,265 Loan servicing fees, net of amortization 82 91 155 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 $242.0 million and $134.6 million at December 31, 2019 and 2018, respectively. The Banks maintain custodial escrow balances in connection with these serviced loans; however, such escrows were immaterial at December 31, 2019 and 2018. Activity for loan servicing rights (included in other assets) was as follows: (Dollars in thousands) 2019 2018 2017 Balance, beginning of year $ 1,049 $ 908 $ 697 Capitalized 822 441 443 Amortization (453 ) (300 ) (232 ) Acquired from merger with County Bank Corp 713 — — Balance, end of year $ 2,131 $ 1,049 $ 908 The fair value of loan servicing rights was $2,304,000 and $1,700,000 as of December 31, 2019 and 2018, respectively. Consequently, a valuation allowance was not necessary at year-end 2019 or 2018. The fair value of ChoiceOne Bank’s servicing rights at December 31, 2019 was determined using a discount rate of 5.51% and prepayment speeds ranging from 11% to 18%. The fair value of Lakestone Bank & Trust’s servicing rights at December 31, 2019 was determined using a discount rate of 8.65% and prepayment speeds ranging from 11% to 13%. 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%. |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
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) 2019 2018 Land and land improvements $ 7,576 $ 5,318 Leasehold improvements 38 38 Buildings 20,251 16,251 Furniture and equipment 11,078 7,357 Total cost 38,943 28,964 Accumulated depreciation (14,678 ) (13,085 ) Premises and equipment, net $ 24,265 $ 15,879 Depreciation expense was $1,610,000, $1,183,000, and $1,389,000 for 2019, 2018 and 2017, respectively. The Banks lease certain branch properties and automated-teller machine locations in their normal course of business. Rent expense totaled $72,000, $108,000, and $99,000 for 2019, 2018 and 2017, respectively. The associated right of use assets are included in the applicable categories of fixed assets in the above table and the net book value of such assets approximates the operating lease liability. Rent commitments under non-cancelable operating leases were as follows, before considering renewal options that generally are present (dollars in thousands): 2020 $ 138 2021 139 2022 120 2023 75 2024 28 Thereafter 14 Total undiscounted cash flows 514 Less discount 27 Total operating lease liabilities $ 487 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note 6 - Goodwill and Intangible Assets Goodwill The change in the balance for goodwill was as follows: (Dollars in thousands) 2019 2018 January 1 $ 13,728 $ 13,728 Acquired goodwill from merger with County 39,142 — December 31 $ 52,870 $ 13,728 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. The Company previously acquired Valley Ridge Financial Corp. in 2006 and County in 2019, which resulted in the recognition of goodwill of $13.7 million and $39.1 million, respectively. Management concluded no impairment of goodwill existed as of the reporting date. Acquired Intangible Assets Information for acquired intangible assets at December 31, 2019 follows: Gross Carrying Accumulated (Dollars in thousands) Amount Amortization Core deposit intangible $ 6,359 $ 353 The core deposit intangible is being amortized on a sum-of-the-years digits basis over ten years. Amortization expense was $353,000 in 2019. The estimated amortization expense for the next five years ending December 31 is as follows: 2020 $ 1,369 2021 1,192 2022 1,016 2023 839 2024 662 Thereafter 928 Total $ 6,006 |
Other Real Estate Owned
Other Real Estate Owned | 12 Months Ended |
Dec. 31, 2019 | |
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) 2019 2018 2017 Balance, beginning of year $ 102 $ 106 $ 437 Transfers from loans 347 432 314 Acquisition from County Bank Corp 1,364 — — Proceeds from sales (938 ) (515 ) (663 ) Gains/(losses) on sales 54 79 18 Balance, end of year $ 929 $ 102 $ 106 Included in the balances above were residential real estate mortgage loans of $175,000, $102,000, and $106,000 as of December 31, 2019, 2018, and 2017, respectively, and $754,000 of commercial real estate loans as of December 31, 2019. |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2019 | |
Deposits [Abstract] | |
Deposits | Note 8 – Deposits Deposit balances as of December 31 consisted of the following: (Dollars in thousands) 2019 2018 Noninterest-bearing demand deposits $ 287,460 $ 153,542 Interest-bearing demand deposits 236,154 135,425 Money market deposits 263,666 86,720 Savings deposits 206,050 75,615 Local certificates of deposit 158,985 91,343 Brokered certificates of deposit 2,287 34,370 Total deposits $ 1,154,602 $ 577,015 Scheduled maturities of certificates of deposit at December 31, 2019 were as follows: (Dollars in thousands) 2020 $ 121,653 2021 19,378 2022 9,661 2023 6,984 2024 3,539 Thereafter 57 Total $ 161,272 The Banks had certificates of deposit issued in denominations of $250,000 or greater totaling $68.3 million and $39.3 million at December 31, 2019 and 2018, respectively. The Banks held $2.3 million in brokered certificates of deposit at December 31, 2019, compared to $34.4 million at December 31, 2018. In addition, the Banks had $7.1 million and $2.1 million of certificates of deposit as of December 31, 2019, and December 31, 2018, respectively, that had been issued through the Certificate of Deposit Account Registry Service (CDARS). As a result of the Economic Growth, Regulatory Relief, and Consumer Protection Act which became law in May 2018, reciprocal brokered deposits are no longer considered brokered deposits as of December 31, 2018 and December 31, 2019. |
Repurchase Agreements
Repurchase Agreements | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of Repurchase Agreements [Abstract] | |
Repurchase Agreements | Note 9 – Repurchase Agreements Securities sold under agreements to repurchase are advances to the Banks by customers or another bank. These agreements are direct obligations of the Banks and are secured by securities held in safekeeping at a correspondent bank. Repurchase agreements with the Banks’ customers mature daily. Information regarding repurchase agreements follows: (Dollars in thousands) 2019 2018 Outstanding balance at December 31 $ — $ — Average interest rate at December 31 — % — % Average balance during the year $ — $ 1,412 Average interest rate during the year — % 0.05 % Maximum month end balance during the year $ — $ 7,148 |
Federal Home Loan Bank Advances
Federal Home Loan Bank Advances | 12 Months Ended |
Dec. 31, 2019 | |
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) 2019 2018 Maturity of November 2024 with fixed interest rate of 3.98% $ 198 $ 233 Maturity of April 2020 with floating interest rate of 1.99% 10,000 — Maturity of May 2020 with fixed interest rate of 2.16% 23,000 — Maturity of March 2019 with fixed interest rate of 2.57% — 5,000 Total advances outstanding at year-end $ 33,198 $ 5,233 Fees are charged on fixed rate advances that are paid prior to maturity. No fixed rate advances were paid prior to maturity in 2019 or 2018. Advances were secured by agricultural loans, commercial real estate loans, and residential real estate loans with a carrying value of approximately $200.1 million and $96.8 million at December 31, 2019 and December 31, 2018, respectively. Based on this collateral, the Banks were eligible to borrow an additional $78.6 million at year-end 2019. The scheduled maturities of advances from the FHLB at December 31, 2019 were as follows: (Dollars in thousands) 2020 $ 33,037 2021 39 2022 40 2023 42 2024 40 Total $ 33,198 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11 – Income Taxes Information as of December 31 and for the year follows: (Dollars in thousands) 2019 2018 2017 Provision for Income Taxes Current federal income tax expense $ 984 $ 946 $ 2,325 Deferred federal income tax expense/(benefit) 310 209 62 Income tax expense $ 1,294 $ 1,155 $ 2,387 Reconciliation of Income Tax Provision to Statutory Rate Income tax computed at statutory federal rate of 21% in 2019 and 2018 and 34% in 2017 $ 1,778 $ 1,783 $ 2,909 Tax exempt interest income (320 ) (309 ) (486 ) Tax exempt earnings on bank-owned life insurance (162 ) (81 ) (135 ) Tax credits (218 ) (154 ) (85 ) Deferred tax adjustment related to reduction in U.S. federal statutory income income tax rate — — 206 Nondeductible merger expenses 164 — — Other items 52 (84 ) (22 ) Income tax expense $ 1,294 $ 1,155 $ 2,387 Effective income tax rate 15 % 14 % 28 % (Dollars in thousands) Components of Deferred Tax Assets and Liabilities 2019 2018 Deferred tax assets: Purchase accounting adjustments from merger with County $ 1,129 $ — Allowance for loan losses 585 981 Alternative minimum tax credit carryforward 301 — Unrealized losses on securities available for sale — 233 Deferred compensation 169 102 Other 198 160 Total deferred tax assets 2,382 1,476 Deferred tax liabilities: Purchase accounting adjustments from merger with County 1,285 — Depreciation 778 797 Loan servicing rights 447 220 Unrealized gains on securities available for sale 360 — Other 235 88 Total deferred tax liabilities 3,105 1,105 Net deferred tax (liability) asset $ (723 ) $ 371 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. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
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) 2019 2018 Balance, beginning of year $ 5,343 $ 6,477 New loans 2,988 3,029 Repayments (3,372 ) (3,835 ) Effect of changes in related parties (4,664 ) (328 ) Loans acquired from merger with County Bank Corp 10,268 — Balance, end of year $ 10,563 $ 5,343 Deposits from executive officers, directors and their affiliates were $9.0 million and $6.3 million at December 31, 2019 and 2018, respectively. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
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 $233,000, $207,000, and $189,000 in 2019, 2018, and 2017, respectively. 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 realized a recovery of post-retirement benefit expense of $14,000, $12,000, and $14,000 in 2019, 2018, and 2017, respectively. The post-retirement obligation liability was $107,000 as of December 31, 2019 and $98,000 as of December 31, 2018. Deferred Compensation Plans A deferred director compensation plan covers former directors of Valley Ridge Financial Corp., 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 $3,000, $5,000, and $7,000 in 2019, 2018, and 2017, respectively. The deferred compensation liability was $33,000 as of December 31, 2019 and $65,000 as of December 31, 2018. A supplemental executive retirement plan covers four former executive officers of Valley Ridge Financial Corp. 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 $26,000, $6,000, and $12,000 in 2019, 2018, and 2017, respectively. Liabilities related to the supplemental executive retirement plan of $368,000 and $420,000 were outstanding as of December 31, 2019 and December 31, 2018, respectively. A supplemental executive retirement plan covers one former executive officer and one current executive officer of Lakestone Bank& Trust. Under the plan, the individuals would be paid a specific amount of compensation over a 15-year period commencing upon early or normal retirement age (as defined in the plan). A liability has been accrued for the obligation under this plan. The liability related to this plan was $337,000 as of December 31, 2019. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [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 $53,000 in 2019, $38,000 in 2018, and $49,000 in 2017. 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, 2019, there were 100,971 shares available for future grants. A summary of stock options activity during the year ended December 31, 2019 was as follows: Weighted average exercise Shares price Options outstanding at January 1, 2019 58,129 $ 22.41 Options granted 13,500 27.25 Options exercised (12,381 ) 21.64 Options forfeited or expired (1,500 ) 27.25 Options outstanding, end of year 57,748 $ 23.39 Options exercisable at December 31, 2019 45,748 $ 22.38 The exercise prices for options outstanding and exercisable at the end of 2019 ranged from $20.86 to $27.25 per share. The weighted average remaining contractual life of options outstanding and exercisable at the end of 2019 was approximately 6.6 years. The intrinsic value of all outstanding in-the-money stock options and exercisable in-the-money stock options was $495,000 and $438,000 respectively, at December 31, 2019. The aggregate intrinsic values of outstanding and exercisable options at December 31, 2019 were calculated based on the closing market price of the Company’s common stock on December 31, 2019 of $31.96 per share less the exercise price. Information pertaining to options outstanding at December 31, 2019 was as follows: Exercise price of stock options: Number of Number of Average $27.25 12,000 — 9.47 $25.65 12,000 12,000 8.54 $20.86 12,404 12,404 7.39 $21.13 15,986 15,986 6.05 $22.31 5,358 5,358 2.04 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, 2019, there was $34,000 in unrecognized compensation expense related to stock options issued in 2019. The fair value of stock options granted during 2019 was $49,000, which was determined using the following weighted-average assumptions as of the grant date. Risk-free interest rate 0.48% Expected option life 6.50 years Expected stock price volatility 21.00% Dividend yield 2.65% Fair value of options granted $ 3.64 ChoiceOne has granted restricted stock units to a select group of employees under the Stock Incentive Plan of 2012. Beginning with the awards granted in April 2019, restricted stock units vest on the three year anniversary 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 $349,000, $244,000, and $191,000 in 2019, 2018, and 2017, 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, 2019 is presented below: Outstanding Stock Awards Shares Weighted Average Grant Date Fair Value Per Share Outstanding at January 1, 2019 20,440 $ 24.74 Granted 9,900 27.25 Vested (20,440 ) 24.74 Forfeited (900 ) 27.25 Outstanding at December 31, 2019 9,000 $ 27.25 At December 31, 2019, there were 9,000 restricted stock units outstanding with an approximate stock value of $288,000 based on ChoiceOne’s December 31, 2019 stock price. 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. As a result of the merger with County, all unvested stock awards granted prior to December 31, 2018 vested upon completion of the merger. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 15 – Earnings Per Share (Dollars in thousands, except share data) 2019 2018 2017 Basic Net income $ 7,171 $ 7,333 $ 6,168 Weighted average common shares outstanding 4,528,786 3,614,302 3,621,216 Basic earnings per common shares $ 1.58 $ 2.03 $ 1.70 Diluted Net income $ 7,171 $ 7,333 $ 6,168 Weighted average common shares outstanding 4,528,786 3,614,302 3,621,216 Plus dilutive stock options and restricted stock units 10,489 13,825 8,465 Weighted average common shares outstanding and potentially dilutive shares 4,539,275 3,628,127 3,629,682 Diluted earnings per common share $ 1.58 $ 2.02 $ 1.70 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 0, 15,000, and 0 as of December 31, 2019, December 31, 2018, and December 31, 2017, 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, 2019 | |
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, 2019 2018 Assets Cash $ 991 $ 1,400 Equity securities at fair value 1,840 1,960 Securities available for sale 959 1,692 Other assets 468 122 Investment in Bank subsidiaries 189,578 75,313 Total assets $ 193,836 $ 80,487 Liabilities Other liabilities $ 1,697 $ 10 Total liabilities 1,697 10 Shareholders’ equity 192,139 80,477 Total liabilities and shareholders’ equity $ 193,836 $ 80,487 Condensed Statements of Income (Dollars in thousands) Years Ended December 31, 2019 2018 2017 Interest and dividends from ChoiceOne Bank $ 4,011 $ 2,800 $ 3,042 Interest and dividends from other securities 50 47 55 Gains on sales of securities 8 9 1 Change in market value of equity securities (114 ) 184 — Total income 3,955 3,040 3,098 Other expenses 2,348 144 123 Income before income tax and equity in undistributed net income of subsidiaries 1,607 2,896 2,975 Income tax (expense)/benefit 261 (14 ) 73 Income before equity in undistributed net income of subsidiaries 1,868 2,882 3,048 Equity in undistributed net income of subsidiaries 5,303 4,451 3,120 Net income $ 7,171 $ 7,333 $ 6,168 Condensed Statements of Cash Flows (Dollars in thousands) Years Ended December 31, 2019 2018 2017 Cash flows from operating activities: Net income $ 7,171 $ 7,333 $ 6,168 Adjustments to reconcile net income to net cash from operating activities: Equity in undistributed net income of subsidiaries (5,303 ) (4,451 ) (3,120 ) Amortization 14 18 19 Compensation expense on employee and director stock purchases, stock options, and restricted stock units 359 331 304 Net gain on sale of securities (8 ) (9 ) (1 ) Change in market value of equity securities 114 (184 ) — Changes in other assets (344 ) 66 (37 ) Changes in other liabilities 1,485 (19 ) (39 ) Net cash from operating activities 3,488 3,085 3,294 Cash flows from investing activities: Sales of securities 1,102 91 334 Purchases of securities — — (466 ) Cash acquired from merger with County Bank Corp 1,038 — — Net cash from investing activities 2,140 91 (132 ) Cash flows from financing activities: Issuance of common stock 142 77 98 Repurchase of common stock (67 ) (523 ) (203 ) Cash used as part of equity issuance for merger (297 ) — — Cash dividends and fractional shares from stock dividend and merger (5,815 ) (2,579 ) (2,324 ) Net cash from financing activities (6,037 ) (3,025 ) (2,429 ) Net change in cash (409 ) 151 733 Beginning cash 1,400 1,249 516 Ending cash $ 991 $ 1,400 $ 1,249 |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments | Note 17 – Financial Instruments Financial instruments as of the dates indicated were as follows: Quoted Prices In Active Significant Markets for Other Significant Identical Observable Unobservable (Dollars in thousands) Carrying Estimated Assets Inputs Inputs Amount Fair Value (Level 1) (Level 2) (Level 3) December 31, 2019 Assets Cash and cash equivalents $ 59,558 $ 59,558 $ 59,558 $ — $ — Equity securities at fair value 2,851 2,851 1,379 — 1,472 Securities available for sale 339,579 339,579 — 327,212 12,367 Federal Home Loan Bank and Federal Reserve Bank stock 6,458 6,458 — 6,458 — Loans held for sale 3,095 3,134 — 3,134 — Loans to other financial institutions 51,048 51,048 — 51,048 — Loans, net 797,991 793,270 — — 793,270 Accrued interest receivable 3,965 3,965 — 3,965 — Liabilities Noninterest-bearing deposits 287,460 287,460 — 287,460 — Interest-bearing deposits 867,142 867,154 — 867,154 — Federal Home Loan Bank advances 33,198 33,243 — 33,243 — Accrued interest payable 411 411 — 411 — 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 — 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 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 loans also included the mark to market adjustments related to the Company’s merger with County. 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. 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, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 18 – Fair Value Measurements The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis at December 31, 2019 and December 31, 2018, and the valuation techniques used by the Company 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 Company 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 Company’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, 2018 or December 31, 2019. 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, 2019 Equity securities $ 1,379 $ — $ 1,472 $ 2,851 Investment Securities, Available for Sale - U. S. Government and federal agency $ — $ 17,215 $ — $ 17,215 U. S. Treasury notes and bonds — 2,008 — 2,008 State and municipal — 162,557 11,367 173,924 Mortgage-backed — 142,760 — 142,760 Corporate — 2,672 — 2,672 Trust preferred securities — — 1,000 1,000 Total $ — $ 327,212 $ 12,367 $ 339,579 Equity Securities Held at Fair Value - December 31, 2018 Equity securities $ 1,961 $ — $ 886 $ 2,847 Investment Securities, Available for Sale - 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 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, and asset backed securities. The Company classified certain state and municipal securities and corporate bonds, and equity 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) 2019 2018 Equity Securities Held at Fair Value Balance, January 1 $ 886 $ — Reclassification due to implementation of ASU 2016-01 — 1,000 Total realized and unrealized gains included in noninterest income 114 (114 ) Net purchases, sales, calls, and maturities — — Net transfers into Level 3 — — Acquired from merger with County Bank Corp 472 — Balance, December 31 $ 1,472 $ 886 Investment Securities, Available for Sale Balance, January 1 $ 8,498 $ 13,398 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 210 (186 ) Net purchases, sales, calls, and maturities 1,375 (3,714 ) Net transfers into Level 3 — — Acquired from merger with County Bank Corp 2,284 — Balance, December 31 $ 12,367 $ 8,498 Of the Level 3 assets that were still held by the Company at December 31, 2019, the net unrealized gain for the twelve months ended December 31, 2019 was $324,000, compared to a $300,000 unrealized loss for the twelve months ended December 31, 2018, 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 $2,091,000 and $224,000 of Level 3 securities were purchased in 2019 and 2018, respectively. In addition, Level 3 securities totaling $2,756,000 were obtained from the merger with County. 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 Company 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 Company 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, 2019 $ 5,922 $ — $ — $ 5,922 December 31, 2018 $ 4,024 $ — $ — $ 4,024 Other Real Estate December 31, 2019 $ 929 $ — $ — $ 929 December 31, 2018 $ 102 $ — $ — $ 102 Impaired loans categorized as Level 3 assets consist of non-homogeneous loans that are considered impaired. The Company 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, 2019 | |
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: 2019 2018 Fixed Variable Fixed Variable (Dollars in thousands) Rate Rate Rate Rate Unused lines of credit and letters of credit $ 38,064 $ 177,447 $ 20,036 $ 103,978 Commitments to fund loans (at market rates) $ 18,216 $ 4,580 $ 20,997 $ 1,421 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 7.50% and maturities ranging from 1 year to 30 years. |
Regulatory Capital
Regulatory Capital | 12 Months Ended |
Dec. 31, 2019 | |
Regulatory Capital | |
Regulatory Capital | Note 20 – Regulatory Capital ChoiceOne and the Banks 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 2019 and 2018, the Banks were categorized as well capitalized under the regulatory framework for prompt corrective action. Actual capital levels and minimum required levels for ChoiceOne and the Banks 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, 2019 ChoiceOne Financial Services Inc. Total capital (to risk weighted assets) $ 135,836 14.2 % $ 76,288 8.0 % N/A N/A Common equity Tier 1 capital (to risk weighted assets) 131,785 13.8 42,912 4.5 N/A N/A Tier 1 capital (to risk weighted assets) 131,785 13.8 57,216 6.0 N/A N/A Tier 1 capital (to average assets) 131,785 9.6 54,646 4.0 N/A N/A ChoiceOne Bank Total capital (to risk weighted assets) $ 69,412 13.2 % $ 42,039 8.0 % $ 52,549 10.0 % Common equity Tier 1 capital (to risk weighted assets) 65,362 12.4 23,647 4.5 34,157 6.5 Tier 1 capital (to risk weighted assets) 65,362 12.4 31,530 6.0 42,039 8.0 Tier 1 capital (to average assets) 65,362 10.0 26,179 4.0 32,724 5.0 Lakestone Bank & Trust Total capital (to risk weighted assets) $ 63,885 15.0 % $ 34,056 8.0 % $ 42,570 10.0 % Common equity Tier 1 capital (to risk weighted assets) 63,885 15.0 19,156 4.5 27,670 6.5 Tier 1 capital (to risk weighted assets) 63,885 15.0 25,542 6.0 34,056 8.0 Tier 1 capital (to average assets) 63,885 9.0 28,338 4.0 35,423 5.0 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 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, 2019, approximately $12.9 million was available for the Banks to pay dividends to ChoiceOne. ChoiceOne’s ability to pay dividends to shareholders is dependent on the payment of dividends from the Banks, which is restricted by state law and regulations. |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Business Combination | Note 21 – Business Combination ChoiceOne completed the merger of County Bank Corp (“County”) with and into ChoiceOne on October 1, 2019. County had 14 branch offices and one loan production office as of the date of the merger. Total assets of County as of October 1, 2019 were $673 million, including total loans of $424 million. Deposits garnered in the merger, the majority of which are core deposits, totaled $574 million. The results of operations as a result of the merger have been included in ChoiceOne’s results since the effective date of the merger. As consideration in the merger, ChoiceOne issued 3,603,872 shares of ChoiceOne common stock, which was net of 299 fractional shares not issued, with an approximate value of $108 million. ChoiceOne recorded a preliminary deposit based intangible of $6.4 million and goodwill of $39.1 million. While ChoiceOne believes the majority of the business combination and purchase accounting activity is complete, it is expected there will be minor adjustments in the normal course within the allotted GAAP adjustment period. Purchase accounting activity still being analyzed primarily includes certain tax implications. Acquisition costs related to the merger amounted to $2.1 million, of which $1.8 million was expensed and $297,000 was netted with stock issuance costs. The transaction created $39.1 million of goodwill, none of which is deductible for tax purposes. As the transaction happened on October 1, 2019, only earnings related to the period from October 1, 2019 through December 31, 2019 were included in ChoiceOne Financial Services income for the year ended December 31, 2019. These County earnings amounted to $2.3 million for the year ended December 31, 2019. The table below highlights the allocation of purchase price for the merger with County (dollars in thousands): Purchase Price: Consideration $ 107,945 Net assets acquired: Cash and cash equivalents 20,638 Equity securities at fair value 474 Securities available for sale 187,230 Federal Home Loan Bank and Federal Reserve Bank stock 2,903 Loans to other financial institutions 33,481 Originated loans 390,354 Premises and equipment 9,271 Other real estate owned 1,364 Deposit based intangible 6,359 Bank owned life insurance 16,912 Other assets 4,002 Total assets 672,988 Non-interest bearing deposits 124,113 Interest bearing deposits 449,488 Total deposits 573,601 Federal funds purchased 3,800 Advances from Federal Home Loan Bank 23,000 Other liabilities 3,784 Total liabilities 604,185 Net assets acquired 68,803 Goodwill $ 39,142 The following table provides the unaudited pro forma information for the results of operations for the twelve months ended December 31, 2019, 2018 and 2017, as if the merger with County had occurred on January 1. Dollars are shown in thousands, except for per share data. These adjustments reflect the impact of certain purchase accounting fair value measurements, primarily on the loan and deposit portfolios of County. In addition, merger-related costs are excluded from the amounts below, for comparative purposes. Further operating cost savings are expected along with additional business synergies as a result of the merger which are not presented in the pro forma amounts. These unaudited pro forma results are presented for illustrative purposes only and are not intended to represent or be indicative of the actual results of operations of the combined banking organization that would have been achieved had the merger occurred at the beginning of the period, nor are they intended to represent or be indicative of the future results of the Company. (Dollars in thousands, except per share data) 2019 2018 2017 Net interest income $ 44,440 $ 42,974 $ 40,178 Noninterest income 13,289 12,151 13,364 Noninterest expense 42,611 38,501 37,361 Net income 13,487 14,251 11,513 Net income per diluted share 1.86 1.97 1.63 In most instances, determining the fair value of the acquired assets and assumed liabilities required ChoiceOne to estimate the cash flows expected to result from those assets and liabilities and to discount those cash flows at appropriate rates of interest. The most significant of those determinations is related to the valuation of acquired loans. For such loans, the excess cash flows expected at the effective time of the merger over the estimated fair value is recognized as interest income over the remaining lives of the loans. The difference between contractually required payments at the effective time of the merger and the cash flows expected to be collected at the effective time of the merger reflects the impact of estimated credit losses, interest rate changes, and other factors, such as prepayments. In accordance with the applicable accounting guidance for business combinations, there was no carry-over of the County’s previously established allowance for loan losses. The Merger with County was effective on October 1, 2019. The combined company will have the opportunity to deploy existing low-cost funding into strategic markets across Michigan. County appears to be a cultural fit with very similar values regarding community involvement and development that ChoiceOne has fostered over its history. County also has an attractive core deposit base expected to provide support for future expansion. On January 6, 2020, ChoiceOne entered into an Agreement and Plan of Merger with Community Shores Bank Corp (“Community Shores”), the holding company for Community Shores Bank. Completion of the acquisition is subject to receipt of shareholder approval from Community Shores shareholders, receipt of regulatory approval, and the satisfaction of other customary closing conditions. Management expects the merger to become effective in the second half of 2020. As of December 31, 2019, Community Shores had total assets of approximately $204 million, total loans of approximately $156 million, and total deposits of approximately $184 million. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Note 22 – Quarterly Financial Data (Unaudited) Net Earnings Per Share (Dollars in thousands, except per share data) Interest Interest Net Fully Income Income Income Basic Diluted 2019 First Quarter $ 6,477 $ 5,496 $ 1,637 $ 0.45 $ 0.45 Second Quarter 6,554 5,501 1,486 0.41 0.41 Third Quarter 6,561 5,570 1,021 0.28 0.28 Fourth Quarter 12,881 11,206 3,027 0.44 0.44 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 Per share amounts have been adjusted for the 5% stock dividend paid on May 31, 2018. The growth in interest income and net interest income in the first three quarters of 2019 was primarily due to growth in earning assets, which was partially offset by a tightening of ChoiceOne’s net interest spread. The increase in the fourth quarter of 2019 resulted primarily from the merger with County. The increase that occurred during 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. Net income in 2019 was lower than the prior year primarily as a result of merger-related expenses incurred in 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include ChoiceOne Financial Services, Inc. (“ChoiceOne”), its wholly-owned subsidiaries, ChoiceOne Bank and Lakestone Bank & Trust (together referred to as the “Banks”), ChoiceOne Bank’s wholly-owned subsidiary, ChoiceOne Insurance Agencies, Inc. (the “Insurance Agency”) and Lakestone’s wholly-owned subsidiary, Lakestone Financial Services, Inc. (“Lakestone Financial”). Intercompany transactions and balances have been eliminated in consolidation. |
Merger with County | Merger with County On October 1, 2019, ChoiceOne completed the merger of County Bank Corp (“County”) with and into ChoiceOne with ChoiceOne surviving the merger. Accordingly, the reported consolidated financial condition and operating results as of and for the year ended December 31, 2019 include the impact of the merger, which was effective as of October 1, 2019. For additional details regarding the merger with County, see Note 21 (Business Combination) below. |
Nature of Operations | Nature of Operations The Banks are full-service community banks that offer commercial, consumer, and real estate loans as well as traditional demand, savings and time deposits to both commercial and consumer clients within ChoiceOne Bank’s primary market areas in Kent, Muskegon, Newaygo, and Ottawa counties in western Michigan and Lakestone Bank’s primary market areas in Lapeer, Macomb, and St. Clair counties in southeastern 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 ChoiceOne 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. Lakestone Financial is a wholly-owned subsidiary of Lakestone, which earns revenues through the sale of annuities and other third party investment products. Together, the Banks and the Insurance Agency and Lakestone Financial 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, remaining purchase accounting adjustments, 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. No allowance for loan loss is recorded for loans acquired in a business combination unless losses are incurred subsequent to the acquisition date. Acquired loans are considered purchased credit impaired (“PCI”) if as of the acquisition date, management determines the loan has evidence of deterioration in credit quality since origination and it is probable at acquisition the Company will be unable to collect all contractually required payments. The discount related to credit quality for PCI loans is recorded as an adjustment to the loan balance as of the acquisition date and is not accreted into income. Management subsequently estimates expected cash flows on an individual loan basis. If the present value of expected cash flows is less than a loan’s carrying amount, an allowance for loan loss is recorded through the provision for loan losses. If the present value of expected cash flows is greater than the carrying amount, the excess may be reclassified to an accretable difference and recognized into income over the loan’s remaining life. For non-PCI loans, the difference between acquisition date fair value and expected cash flows is accreted into income over a pool’s expected life using the level yield method. |
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 one of the Banks, 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 Banks 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 Banks’ 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 and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized but tested for impairment at least annually or more frequently if events and circumstances exists that indicate that a goodwill impairment test should be performed. |
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. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. |
Earnings Per Share | Earnings Per Share Basic earnings per common share (“EPS”) is based on weighted-average common shares outstanding. Diluted EPS assumes issuance 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) As of December 31, 2019 2018 Unrealized gain (loss) on available for sale securities $ 1,713 $ (1,108 ) Unrecognized gains on post-retirement benefits 158 181 Tax effect (393 ) 195 Accumulated other comprehensive income (loss) $ 1,478 $ (732 ) |
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, 2019. |
Cash Restrictions | Cash Restrictions Cash on hand or on deposit with the Federal Reserve Bank of $13,231,000 and $781,000 was required to meet regulatory reserve and clearing requirements for the Banks at December 31, 2019 and 2018, respectively. The balance in excess of the amount required was interest-bearing as of December 31, 2019 and December 31, 2018. |
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. 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 Banks 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 Banks, Insurance Agency, and Lakestone Financial, 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 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, 2019 | |
Accounting Policies [Abstract] | |
Schedule of accumulated other comprehensive income | Accumulated other comprehensive income was as follows: (Dollars in thousands) As of December 31, 2019 2018 Unrealized gain (loss) on available for sale securities $ 1,713 $ (1,108 ) Unrecognized gains on post-retirement benefits 158 181 Tax effect (393 ) 195 Accumulated other comprehensive income (loss) $ 1,478 $ (732 ) |
Securities (Tables)
Securities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of fair value of securities | The fair value of equity securities and the related gross unrealized gains recognized in noninterest income at December 31 were as follows: 2019 Gross Gross (Dollars in thousands) Amortized Unrealized Unrealized Fair Cost Gains Losses Value Equity securities $ 2,426 $ 425 $ — $ 2,851 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: 2019 Gross Gross (Dollars in thousands) Amortized Unrealized Unrealized Fair Cost Gains Losses Value U.S. Government and federal agency $ 17,231 $ 23 $ (39 ) $ 17,215 U.S. Treasury notes and bonds 1,994 14 — 2,008 State and municipal 172,487 2,694 (1,257 ) 173,924 Mortgage-backed 142,504 585 (329 ) 142,760 Corporate 2,649 24 (1 ) 2,672 Trust preferred securities 1,000 — — 1,000 Total $ 337,865 $ 3,340 $ (1,626 ) $ 339,579 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 |
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) 2019 2018 2017 Proceeds from sales of securities $ 178,913 $ 2,634 $ 57,595 Gross realized gains 22 42 184 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, 2019 were as follows: (Dollars in thousands) Amortized Fair Cost Value Due within one year $ 26,742 $ 26,849 Due after one year through five years 55,484 56,527 Due after five years through ten years 69,356 70,526 Due after ten years 43,779 42,917 Total debt securities 195,361 196,819 Mortgage-backed securities 142,504 142,760 Equity securities 2,426 2,851 Total $ 340,291 $ 342,430 |
Schedule of securities pledged as collateral | The carrying amount of securities pledged as collateral at December 31 was as follows: (Dollars in thousands) 2019 2018 Securities pledged for securities sold under agreements to repurchase $ 252 $ 257 |
Schedule of securities in a continuous unrealized loss position | Securities with unrealized losses at year-end 2019 and 2018, aggregated by investment category and length of time the individual securities have been in an unrealized loss position, were as follows: 2019 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 $ 7,175 $ (39 ) $ — $ — $ 7,175 $ (39 ) U.S. Treasury notes and bonds — — — — — — State and municipal 75,099 (1,256 ) 252 (1 ) 75,351 (1,257 ) Mortgage-backed 109,652 (327 ) 373 (2 ) 110,025 (329 ) Corporate — — 300 (1 ) 300 (1 ) Total temporarily impaired $ 191,926 $ (1,622 ) $ 925 $ (4 ) $ 192,851 $ (1,626 ) 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 ) Total temporarily impaired $ 15,110 $ (64 ) $ 102,256 $ (1,716 ) $ 117,366 $ (1,780 ) |
Schedule of unrealized gains and losses on equity securities | Following is information regarding unrealized gains and losses on equity securities for the years ending December 31: 2019 2018 New gains and losses recognized during the period $ — $ 71 Less: Net gains and losses recognized during the period on securities sold (5 ) 9 Unrealized gains and losses recognized during the reporting period on securities $ 5 $ 62 |
Loans and Allowance for Loan _2
Loans and Allowance for Loan Losses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Schedule of loan portfolio | The Banks’ loan portfolio as of December 31 was as follows: (Dollars in thousands) 2019 2018 Agricultural $ 57,339 $ 49,109 Commercial and industrial 148,083 91,406 Consumer 38,854 24,382 Real estate - commercial 326,379 139,453 Real estate - construction 13,411 8,843 Real estate - residential 217,982 95,880 Loans, gross 802,048 409,073 Allowance for loan losses (4,057 ) (4,673 ) Loans, net $ 797,991 $ 404,400 |
Schedule of acquisition fair value adjustments | The table below details the acquisition balances of the County Bank Corp acquired portfolio and the acquisition fair value adjustments at acquisition date: (Dollars in thousands) Acquired Acquired Acquired Impaired Non-impaired Total Loans acquired - contractual payments $ 7,729 $ 387,394 $ 395,123 Nonaccretable difference (2,928 ) — (2,928 ) Expected cash flows 4,801 387,394 392,195 Accretable yield (185 ) (1,656 ) (1,841 ) Carrying balance at acquisition date $ 4,616 $ 385,738 $ 390,354 The table below presents a roll-forward of the accretable yield on acquired loans for the year end December 31, 2019: (Dollars in thousands) Acquired Acquired Acquired Impaired Non-impaired Total Balance, January 1, 2019 $ — $ — $ — Merger with County Bank Corp on October 1, 2019 185 1,656 1,841 Accretion — (75 ) (75 ) Reclassification from nonaccretable difference — — — Balance, December 31, 2019 $ 185 $ 1,581 $ 1,766 |
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 2019 Allowance for Loan Losses Beginning balance $ 481 $ 892 $ 254 $ 1,926 $ 38 $ 537 $ 545 $ 4,673 Charge-offs — (83 ) (292 ) (589 ) — (25 ) — (989 ) Recoveries 65 22 136 26 — 124 — 373 Provision (75 ) (176 ) 172 300 38 4 (263 ) — Ending balance $ 471 $ 655 $ 270 $ 1,663 $ 76 $ 640 $ 282 $ 4,057 Individually evaluated for impairment $ 103 $ — $ 4 $ 13 $ — $ 235 $ — $ 355 Collectively evaluated for impairment $ 368 $ 655 $ 266 $ 1,650 $ 76 $ 405 $ 282 $ 3,702 Loans Individually evaluated for impairment $ 924 $ 259 $ 17 $ 2,288 $ — $ 2,434 $ 5,922 Collectively evaluated for impairment 56,415 141,583 38,524 323,358 13,411 215,106 788,397 Acquired with deteriorated credit quality — 6,241 313 733 — 442 7,729 Ending balance $ 57,339 $ 148,083 $ 38,854 $ 326,379 $ 13,411 $ 217,982 $ 802,048 (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 |
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 2019 2018 2019 2018 2019 2018 Risk ratings 1 and 2 $ 14,173 $ 15,300 $ 14,920 $ 11,972 $ 11,051 $ 7,962 Risk rating 3 27,163 23,938 105,656 50,266 271,120 89,173 Risk rating 4 14,530 9,082 26,152 23,961 39,934 36,193 Risk rating 5 1,094 211 1,081 5,204 1,332 4,850 Risk rating 6 379 578 274 3 2,942 1,275 $ 57,339 $ 49,109 $ 148,083 $ 91,406 $ 326,379 $ 139,453 Consumer Credit Exposure - Credit Risk Profile Based On Payment Activity (Dollars in thousands) Consumer Construction Real Estate Residential Real Estate 2019 2018 2019 2018 2019 2018 Performing $ 38,838 $ 24,320 $ 13,411 $ 8,843 $ 216,651 $ 94,925 Nonperforming — — — — — — Nonaccrual 16 62 — — 1,331 955 $ 38,854 $ 24,382 $ 13,411 $ 8,843 $ 217,982 $ 95,880 |
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 2019 With no related allowance recorded Agricultural $ 545 $ 545 $ — $ 146 $ 10 Commercial and industrial 259 340 — 104 9 Consumer — — — — — Construction real estate — — — — — Commercial real estate 1,882 2,471 — 782 30 Residential real estate 42 42 — 133 4 Subtotal 2,728 3,398 — 1,165 53 With an allowance recorded Agricultural 379 439 103 388 — Commercial and industrial — — — 86 1 Consumer 17 18 4 48 — Construction real estate — — — — — Commercial real estate 406 406 13 975 32 Residential real estate 2,392 2,460 235 2,486 83 Subtotal 3,194 3,323 355 3,983 116 Total Agricultural 924 984 103 534 10 Commercial and industrial 259 340 — 190 10 Consumer 17 18 4 48 — Construction real estate — — — — — Commercial real estate 2,288 2,877 13 1,757 62 Residential real estate 2,434 2,502 235 2,619 87 Total $ 5,922 $ 6,721 $ 355 $ 5,148 $ 169 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 |
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 2019 Agricultural $ — $ 68 $ — $ 68 $ 57,271 $ 57,339 $ — Commercial and industrial 542 15 259 816 147,267 148,083 — Consumer 121 19 11 151 38,703 38,854 — Commercial real estate — — 1,882 1,882 324,497 326,379 — Construction real estate — — — — 13,411 13,411 — Residential real estate 2,466 582 393 3,441 214,541 217,982 — $ 3,129 $ 684 $ 2,545 $ 6,358 $ 795,690 $ 802,048 $ — 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 $ — (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) 2019 2018 Agricultural $ 379 $ 393 Commercial and industrial 776 — Consumer 16 62 Commercial real estate 2,185 123 Construction real estate — — Residential real estate 1,331 954 $ 4,687 $ 1,532 |
Mortgage Banking (Tables)
Mortgage Banking (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Mortgage Banking [Abstract] | |
Schedule of activity in secondary market loans | Activity in secondary market loans during the year was as follows: (Dollars in thousands) 2019 2018 2017 Loans originated for resale, net of principal payments $ 63,920 $ 33,555 $ 43,171 Proceeds from loan sales 62,763 34,872 42,883 Net gains on sales of loans held for sale 1,951 1,003 1,265 Loan servicing fees, net of amortization 82 91 155 |
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) 2019 2018 2017 Balance, beginning of year $ 1,049 $ 908 $ 697 Capitalized 822 441 443 Amortization (453 ) (300 ) (232 ) Acquired from merger with County Bank Corp 713 — — Balance, end of year $ 2,131 $ 1,049 $ 908 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of premises and equipment | As of December 31, premises and equipment consisted of the following: (Dollars in thousands) 2019 2018 Land and land improvements $ 7,576 $ 5,318 Leasehold improvements 38 38 Buildings 20,251 16,251 Furniture and equipment 11,078 7,357 Total cost 38,943 28,964 Accumulated depreciation (14,678 ) (13,085 ) Premises and equipment, net $ 24,265 $ 15,879 |
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): 2020 $ 138 2021 139 2022 120 2023 75 2024 28 Thereafter 14 Total undiscounted cash flows 514 Less discount 27 Total operating lease liabilities $ 487 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The change in the balance for goodwill was as follows: (Dollars in thousands) 2019 2018 January 1 $ 13,728 $ 13,728 Acquired goodwill from merger with County 39,142 — December 31 $ 52,870 $ 13,728 |
Schedule of acquired intangible assets | Information for acquired intangible assets at December 31, 2019 follows: Gross Carrying Accumulated (Dollars in thousands) Amount Amortization Core deposit intangible $ 6,359 $ 353 |
Schedule of estimated amortization expense | The estimated amortization expense for the next five years ending December 31 is as follows: 2020 $ 1,369 2021 1,192 2022 1,016 2023 839 2024 662 Thereafter 928 Total $ 6,006 |
Other Real Estate Owned (Tables
Other Real Estate Owned (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Real Estate [Abstract] | |
Schedule of other real estate owned | Activity within other real estate owned was as follows: (Dollars in thousands) 2019 2018 2017 Balance, beginning of year $ 102 $ 106 $ 437 Transfers from loans 347 432 314 Acquisition from County Bank Corp 1,364 — — Proceeds from sales (938 ) (515 ) (663 ) Gains/(losses) on sales 54 79 18 Balance, end of year $ 929 $ 102 $ 106 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Deposits [Abstract] | |
Schedule of deposits outstanding | Deposit balances as of December 31 consisted of the following: (Dollars in thousands) 2019 2018 Noninterest-bearing demand deposits $ 287,460 $ 153,542 Interest-bearing demand deposits 236,154 135,425 Money market deposits 263,666 86,720 Savings deposits 206,050 75,615 Local certificates of deposit 158,985 91,343 Brokered certificates of deposit 2,287 34,370 Total deposits $ 1,154,602 $ 577,015 |
Schedule of maturities of time deposits | Scheduled maturities of certificates of deposit at December 31, 2019 were as follows: (Dollars in thousands) 2020 $ 121,653 2021 19,378 2022 9,661 2023 6,984 2024 3,539 Thereafter 57 Total $ 161,272 |
Repurchase Agreements (Tables)
Repurchase Agreements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of Repurchase Agreements [Abstract] | |
Schedule of securities sold under repurchase agreements | Information regarding repurchase agreements follows: (Dollars in thousands) 2019 2018 Outstanding balance at December 31 $ — $ — Average interest rate at December 31 — % — % Average balance during the year $ — $ 1,412 Average interest rate during the year — % 0.05 % Maximum month end balance during the year $ — $ 7,148 |
Federal Home Loan Bank Advanc_2
Federal Home Loan Bank Advances (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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) 2019 2018 Maturity of November 2024 with fixed interest rate of 3.98% $ 198 $ 233 Maturity of April 2020 with floating interest rate of 1.99% 10,000 — Maturity of May 2020 with fixed interest rate of 2.16% 23,000 — Maturity of March 2019 with fixed interest rate of 2.57% — 5,000 Total advances outstanding at year-end $ 33,198 $ 5,233 |
Schedule of maturities of FHLB Advances | The scheduled maturities of advances from the FHLB at December 31, 2019 were as follows: (Dollars in thousands) 2020 $ 33,037 2021 39 2022 40 2023 42 2024 40 Total $ 33,198 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation of income tax expense | Information as of December 31 and for the year follows: (Dollars in thousands) 2019 2018 2017 Provision for Income Taxes Current federal income tax expense $ 984 $ 946 $ 2,325 Deferred federal income tax expense/(benefit) 310 209 62 Income tax expense $ 1,294 $ 1,155 $ 2,387 Reconciliation of Income Tax Provision to Statutory Rate Income tax computed at statutory federal rate of 21% in 2019 and 2018 and 34% in 2017 $ 1,778 $ 1,783 $ 2,909 Tax exempt interest income (320 ) (309 ) (486 ) Tax exempt earnings on bank-owned life insurance (162 ) (81 ) (135 ) Tax credits (218 ) (154 ) (85 ) Deferred tax adjustment related to reduction in U.S. federal statutory income income tax rate — — 206 Nondeductible merger expenses 164 — — Other items 52 (84 ) (22 ) Income tax expense $ 1,294 $ 1,155 $ 2,387 Effective income tax rate 15 % 14 % 28 % |
Schedule of deferred tax assets and liabilities | (Dollars in thousands) Components of Deferred Tax Assets and Liabilities 2019 2018 Deferred tax assets: Purchase accounting adjustments from merger with County $ 1,129 $ — Allowance for loan losses 585 981 Alternative minimum tax credit carryforward 301 — Unrealized losses on securities available for sale — 233 Deferred compensation 169 102 Other 198 160 Total deferred tax assets 2,382 1,476 Deferred tax liabilities: Purchase accounting adjustments from merger with County 1,285 — Depreciation 778 797 Loan servicing rights 447 220 Unrealized gains on securities available for sale 360 — Other 235 88 Total deferred tax liabilities 3,105 1,105 Net deferred tax (liability) asset $ (723 ) $ 371 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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) 2019 2018 Balance, beginning of year $ 5,343 $ 6,477 New loans 2,988 3,029 Repayments (3,372 ) (3,835 ) Effect of changes in related parties (4,664 ) (328 ) Loans acquired from merger with County Bank Corp 10,268 — Balance, end of year $ 10,563 $ 5,343 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock option activity | A summary of stock options activity during the year ended December 31, 2019 was as follows: Weighted average exercise Shares price Options outstanding at January 1, 2019 58,129 $ 22.41 Options granted 13,500 27.25 Options exercised (12,381 ) 21.64 Options forfeited or expired (1,500 ) 27.25 Options outstanding, end of year 57,748 $ 23.39 Options exercisable at December 31, 2019 45,748 $ 22.38 |
Schedule of outstanding stock options | Information pertaining to options outstanding at December 31, 2019 was as follows: Exercise price of stock options: Number of Number of Average $27.25 12,000 — 9.47 $25.65 12,000 12,000 8.54 $20.86 12,404 12,404 7.39 $21.13 15,986 15,986 6.05 $22.31 5,358 5,358 2.04 |
Schedule of weighted-average assumptions as of the grant date | The fair value of stock options granted during 2019 was $49,000, which was determined using the following weighted-average assumptions as of the grant date. Risk-free interest rate 0.48% Expected option life 6.50 years Expected stock price volatility 21.00% Dividend yield 2.65% Fair value of options granted $ 3.64 |
Schedule of activity for RSUs | A summary of the activity for RSU’s during the year ended December 31, 2019 is presented below: Outstanding Stock Awards Shares Weighted Average Grant Date Fair Value Per Share Outstanding at January 1, 2019 20,440 $ 24.74 Granted 9,900 27.25 Vested (20,440 ) 24.74 Forfeited (900 ) 27.25 Outstanding at December 31, 2019 9,000 $ 27.25 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share | (Dollars in thousands, except share data) 2019 2018 2017 Basic Net income $ 7,171 $ 7,333 $ 6,168 Weighted average common shares outstanding 4,528,786 3,614,302 3,621,216 Basic earnings per common shares $ 1.58 $ 2.03 $ 1.70 Diluted Net income $ 7,171 $ 7,333 $ 6,168 Weighted average common shares outstanding 4,528,786 3,614,302 3,621,216 Plus dilutive stock options and restricted stock units 10,489 13,825 8,465 Weighted average common shares outstanding and potentially dilutive shares 4,539,275 3,628,127 3,629,682 Diluted earnings per common share $ 1.58 $ 2.02 $ 1.70 |
Condensed Financial Statement_2
Condensed Financial Statements of Parent Company (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of condensed balance sheets | Condensed Balance Sheets (Dollars in thousands) December 31, 2019 2018 Assets Cash $ 991 $ 1,400 Equity securities at fair value 1,840 1,960 Securities available for sale 959 1,692 Other assets 468 122 Investment in Bank subsidiaries 189,578 75,313 Total assets $ 193,836 $ 80,487 Liabilities Other liabilities $ 1,697 $ 10 Total liabilities 1,697 10 Shareholders’ equity 192,139 80,477 Total liabilities and shareholders’ equity $ 193,836 $ 80,487 |
Schedule of condensed statements of income | Condensed Statements of Income (Dollars in thousands) Years Ended December 31, 2019 2018 2017 Interest and dividends from ChoiceOne Bank $ 4,011 $ 2,800 $ 3,042 Interest and dividends from other securities 50 47 55 Gains on sales of securities 8 9 1 Change in market value of equity securities (114 ) 184 — Total income 3,955 3,040 3,098 Other expenses 2,348 144 123 Income before income tax and equity in undistributed net income of subsidiaries 1,607 2,896 2,975 Income tax (expense)/benefit 261 (14 ) 73 Income before equity in undistributed net income of subsidiaries 1,868 2,882 3,048 Equity in undistributed net income of subsidiaries 5,303 4,451 3,120 Net income $ 7,171 $ 7,333 $ 6,168 |
Schedule of condensed statements of cash flows | Condensed Statements of Cash Flows (Dollars in thousands) Years Ended December 31, 2019 2018 2017 Cash flows from operating activities: Net income $ 7,171 $ 7,333 $ 6,168 Adjustments to reconcile net income to net cash from operating activities: Equity in undistributed net income of subsidiaries (5,303 ) (4,451 ) (3,120 ) Amortization 14 18 19 Compensation expense on employee and director stock purchases, stock options, and restricted stock units 359 331 304 Net gain on sale of securities (8 ) (9 ) (1 ) Change in market value of equity securities 114 (184 ) — Changes in other assets (344 ) 66 (37 ) Changes in other liabilities 1,485 (19 ) (39 ) Net cash from operating activities 3,488 3,085 3,294 Cash flows from investing activities: Sales of securities 1,102 91 334 Purchases of securities — — (466 ) Cash acquired from merger with County Bank Corp 1,038 — — Net cash from investing activities 2,140 91 (132 ) Cash flows from financing activities: Issuance of common stock 142 77 98 Repurchase of common stock (67 ) (523 ) (203 ) Cash used as part of equity issuance for merger (297 ) — — Cash dividends and fractional shares from stock dividend and merger (5,815 ) (2,579 ) (2,324 ) Net cash from financing activities (6,037 ) (3,025 ) (2,429 ) Net change in cash (409 ) 151 733 Beginning cash 1,400 1,249 516 Ending cash $ 991 $ 1,400 $ 1,249 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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: Quoted Prices In Active Significant Markets for Other Significant Identical Observable Unobservable (Dollars in thousands) Carrying Estimated Assets Inputs Inputs Amount Fair Value (Level 1) (Level 2) (Level 3) December 31, 2019 Assets Cash and cash equivalents $ 59,558 $ 59,558 $ 59,558 $ — $ — Equity securities at fair value 2,851 2,851 1,379 — 1,472 Securities available for sale 339,579 339,579 — 327,212 12,367 Federal Home Loan Bank and Federal Reserve Bank stock 6,458 6,458 — 6,458 — Loans held for sale 3,095 3,134 — 3,134 — Loans to other financial institutions 51,048 51,048 — 51,048 — Loans, net 797,991 793,270 — — 793,270 Accrued interest receivable 3,965 3,965 — 3,965 — Liabilities Noninterest-bearing deposits 287,460 287,460 — 287,460 — Interest-bearing deposits 867,142 867,154 — 867,154 — Federal Home Loan Bank advances 33,198 33,243 — 33,243 — Accrued interest payable 411 411 — 411 — 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 — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 Equity securities $ 1,379 $ — $ 1,472 $ 2,851 Investment Securities, Available for Sale - U. S. Government and federal agency $ — $ 17,215 $ — $ 17,215 U. S. Treasury notes and bonds — 2,008 — 2,008 State and municipal — 162,557 11,367 173,924 Mortgage-backed — 142,760 — 142,760 Corporate — 2,672 — 2,672 Trust preferred securities — — 1,000 1,000 Total $ — $ 327,212 $ 12,367 $ 339,579 Equity Securities Held at Fair Value - December 31, 2018 Equity securities $ 1,961 $ — $ 886 $ 2,847 Investment Securities, Available for Sale - 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 |
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) 2019 2018 Equity Securities Held at Fair Value Balance, January 1 $ 886 $ — Reclassification due to implementation of ASU 2016-01 — 1,000 Total realized and unrealized gains included in noninterest income 114 (114 ) Net purchases, sales, calls, and maturities — — Net transfers into Level 3 — — Acquired from merger with County Bank Corp 472 — Balance, December 31 $ 1,472 $ 886 Investment Securities, Available for Sale Balance, January 1 $ 8,498 $ 13,398 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 210 (186 ) Net purchases, sales, calls, and maturities 1,375 (3,714 ) Net transfers into Level 3 — — Acquired from merger with County Bank Corp 2,284 — Balance, December 31 $ 12,367 $ 8,498 |
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, 2019 $ 5,922 $ — $ — $ 5,922 December 31, 2018 $ 4,024 $ — $ — $ 4,024 Other Real Estate December 31, 2019 $ 929 $ — $ — $ 929 December 31, 2018 $ 102 $ — $ — $ 102 |
Off-Balance Sheet Activities (T
Off-Balance Sheet Activities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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: 2019 2018 Fixed Variable Fixed Variable (Dollars in thousands) Rate Rate Rate Rate Unused lines of credit and letters of credit $ 38,064 $ 177,447 $ 20,036 $ 103,978 Commitments to fund loans (at market rates) $ 18,216 $ 4,580 $ 20,997 $ 1,421 |
Regulatory Capital (Tables)
Regulatory Capital (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Regulatory Capital | |
Schedule of actual capital and minimum required levels | Actual capital levels and minimum required levels for ChoiceOne and the Banks 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, 2019 ChoiceOne Financial Services Inc. Total capital (to risk weighted assets) $ 135,836 14.2 % $ 76,288 8.0 % N/A N/A Common equity Tier 1 capital (to risk weighted assets) 131,785 13.8 42,912 4.5 N/A N/A Tier 1 capital (to risk weighted assets) 131,785 13.8 57,216 6.0 N/A N/A Tier 1 capital (to average assets) 131,785 9.6 54,646 4.0 N/A N/A ChoiceOne Bank Total capital (to risk weighted assets) $ 69,412 13.2 % $ 42,039 8.0 % $ 52,549 10.0 % Common equity Tier 1 capital (to risk weighted assets) 65,362 12.4 23,647 4.5 34,157 6.5 Tier 1 capital (to risk weighted assets) 65,362 12.4 31,530 6.0 42,039 8.0 Tier 1 capital (to average assets) 65,362 10.0 26,179 4.0 32,724 5.0 Lakestone Bank & Trust Total capital (to risk weighted assets) $ 63,885 15.0 % $ 34,056 8.0 % $ 42,570 10.0 % Common equity Tier 1 capital (to risk weighted assets) 63,885 15.0 19,156 4.5 27,670 6.5 Tier 1 capital (to risk weighted assets) 63,885 15.0 25,542 6.0 34,056 8.0 Tier 1 capital (to average assets) 63,885 9.0 28,338 4.0 35,423 5.0 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 |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combination, Goodwill [Abstract] | |
Schedule of merger with county | The table below highlights the allocation of purchase price for the merger with County (dollars in thousands): Purchase Price: Consideration $ 107,945 Net assets acquired: Cash and cash equivalents 20,638 Equity securities at fair value 474 Securities available for sale 187,230 Federal Home Loan Bank and Federal Reserve Bank stock 2,903 Loans to other financial institutions 33,481 Originated loans 390,354 Premises and equipment 9,271 Other real estate owned 1,364 Deposit based intangible 6,359 Bank owned life insurance 16,912 Other assets 4,002 Total assets 672,988 Non-interest bearing deposits 124,113 Interest bearing deposits 449,488 Total deposits 573,601 Federal funds purchased 3,800 Advances from Federal Home Loan Bank 23,000 Other liabilities 3,784 Total liabilities 604,185 Net assets acquired 68,803 Goodwill $ 39,142 |
Schedule of indicative of the future results of the company | These unaudited pro forma results are presented for illustrative purposes only and are not intended to represent or be indicative of the actual results of operations of the combined banking organization that would have been achieved had the merger occurred at the beginning of the period, nor are they intended to represent or be indicative of the future results of the Company. (Dollars in thousands, except per share data) 2019 2018 2017 Net interest income $ 44,440 $ 42,974 $ 40,178 Noninterest income 13,289 12,151 13,364 Noninterest expense 42,611 38,501 37,361 Net income 13,487 14,251 11,513 Net income per diluted share 1.86 1.97 1.63 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 2019 First Quarter $ 6,477 $ 5,496 $ 1,637 $ 0.45 $ 0.45 Second Quarter 6,554 5,501 1,486 0.41 0.41 Third Quarter 6,561 5,570 1,021 0.28 0.28 Fourth Quarter 12,881 11,206 3,027 0.44 0.44 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 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Unrealized gain (loss) on available for sale securities | $ 1,713 | $ (1,108) |
Unrecognized gains on post-retirement benefits | 158 | 181 |
Tax effect | (393) | 195 |
Accumulated other comprehensive income (loss) | $ 1,478 | $ (732) |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Cash on deposit with Federal Reserve Bank | $ 13,231 | $ 781 | |
Retained Earnings [Member] | |||
Adoption effect of ASU 2016-01 | [1] | 244 | |
Retained Earnings [Member] | Accounting Standards Update 201601 [Member] | |||
Adoption effect of ASU 2016-01 | $ 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) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | ||
Amortized Cost | $ 2,426 | $ 2,502 |
Gross Unrealized Gains | 425 | 459 |
Gross Unrealized Losses | (114) | |
Fair Value | $ 2,851 | $ 2,847 |
Securities (Details 1)
Securities (Details 1) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 337,865 | $ 167,710 |
Gross Unrealized Gains | 3,340 | 672 |
Gross Unrealized Losses | (1,626) | (1,780) |
Fair Value | 339,579 | 166,602 |
U.S. Government and Federal Agency [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 17,231 | 34,079 |
Gross Unrealized Gains | 23 | 1 |
Gross Unrealized Losses | (39) | (551) |
Fair Value | 17,215 | 33,529 |
U.S. Treasury Notes and Bonds [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,994 | 1,992 |
Gross Unrealized Gains | 14 | |
Gross Unrealized Losses | (45) | |
Fair Value | 2,008 | 1,947 |
State and Municipal [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 172,487 | 104,317 |
Gross Unrealized Gains | 2,694 | 544 |
Gross Unrealized Losses | (1,257) | (933) |
Fair Value | 173,924 | 103,928 |
Mortgage-backed [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 142,504 | 21,654 |
Gross Unrealized Gains | 585 | 126 |
Gross Unrealized Losses | (329) | (205) |
Fair Value | 142,760 | 21,575 |
Corporate [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 2,649 | 5,147 |
Gross Unrealized Gains | 24 | 1 |
Gross Unrealized Losses | (1) | (46) |
Fair Value | 2,672 | 5,102 |
Trust Preferred Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,000 | 500 |
Fair Value | 1,000 | 500 |
Asset-backed Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 21 | |
Fair Value | $ 21 | |
Equity Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 2,426 | |
Fair Value | $ 2,851 |
Securities (Details 2)
Securities (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |||
Proceeds from sales of securities | $ 178,913 | $ 2,634 | $ 57,595 |
Gross realized gains | $ 22 | 42 | 184 |
Gross realized losses | $ 8 | $ 464 |
Securities (Details 3)
Securities (Details 3) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Amortized Cost | ||
Due within one year | $ 26,742 | |
Due after one year through five years | 55,484 | |
Due after five years through ten years | 69,356 | |
Due after ten years | 43,779 | |
Total debt securities | 195,361 | |
Total | 337,865 | $ 167,710 |
Fair Value | ||
Due within one year | 26,849 | |
Due after one year through five years | 56,527 | |
Due after five years through ten years | 70,526 | |
Due after ten years | 42,917 | |
Total debt securities | 196,819 | |
Total | 339,579 | 166,602 |
Mortgage-backed [Member] | ||
Amortized Cost | ||
Total | 142,504 | 21,654 |
Fair Value | ||
Total | 142,760 | $ 21,575 |
Equity Securities [Member] | ||
Amortized Cost | ||
Total | 2,426 | |
Fair Value | ||
Total | $ 2,851 |
Securities (Details 4)
Securities (Details 4) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Investments, Debt and Equity Securities [Abstract] | ||
Securities pledged for securities sold under agreements to repurchase | $ 252 | $ 257 |
Securities (Details 5)
Securities (Details 5) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Securities with unrealized loss position | ||
Less than 12 months, Fair Value | $ 191,926 | $ 15,110 |
Less than 12 months, Unrealized Losses | (1,622) | (64) |
More than 12 months, Fair Value | 925 | 102,256 |
More than 12 months, Unrealized Losses | (4) | (1,716) |
Total, Fair Value | 192,851 | 117,366 |
Total, Unrealized Losses | (1,626) | (1,780) |
U.S. Government and Federal Agency [Member] | ||
Securities with unrealized loss position | ||
Less than 12 months, Fair Value | 7,175 | |
Less than 12 months, Unrealized Losses | (39) | |
More than 12 months, Fair Value | 31,499 | |
More than 12 months, Unrealized Losses | (551) | |
Total, Fair Value | 7,175 | 31,499 |
Total, Unrealized Losses | (39) | (551) |
State and Municipal [Member] | ||
Securities with unrealized loss position | ||
Less than 12 months, Fair Value | 75,099 | 9,726 |
Less than 12 months, Unrealized Losses | (1,256) | (36) |
More than 12 months, Fair Value | 252 | 56,763 |
More than 12 months, Unrealized Losses | (1) | (897) |
Total, Fair Value | 75,351 | 66,489 |
Total, Unrealized Losses | (1,257) | (933) |
Mortgage-backed [Member] | ||
Securities with unrealized loss position | ||
Less than 12 months, Fair Value | 109,652 | 5,384 |
Less than 12 months, Unrealized Losses | (327) | (28) |
More than 12 months, Fair Value | 373 | 7,443 |
More than 12 months, Unrealized Losses | (2) | (177) |
Total, Fair Value | 110,025 | 12,827 |
Total, Unrealized Losses | (329) | (205) |
Corporate [Member] | ||
Securities with unrealized loss position | ||
More than 12 months, Fair Value | 300 | 4,604 |
More than 12 months, Unrealized Losses | (1) | (46) |
Total, Fair Value | 300 | 4,604 |
Total, Unrealized Losses | $ (1) | (46) |
U.S. Treasury Notes and Bonds [Member] | ||
Securities with unrealized loss position | ||
More than 12 months, Fair Value | 1,947 | |
More than 12 months, Unrealized Losses | (45) | |
Total, Fair Value | 1,947 | |
Total, Unrealized Losses | $ (45) |
Securities (Details 6)
Securities (Details 6) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
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 | $ (5) | 9 |
Unrealized gains and losses recognized during the reporting period on securities still held at the reporting date | $ 5 | $ 62 |
Securities (Details Narrative)
Securities (Details Narrative) - Number | Dec. 31, 2019 | Dec. 31, 2018 |
Investments, Debt and Equity Securities [Abstract] | ||
Number of securities with an unrealized loss positions | 63 | 210 |
Loans and Allowance for Loan _3
Loans and Allowance for Loan Losses (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Loans (Note 3) | $ 802,048 | $ 409,073 | $ 398,785 | |
Allowance for loan losses | 4,057 | 4,673 | 4,577 | $ 4,277 |
Loans, net | 797,991 | 404,400 | ||
Agricultural [Member] | ||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Loans (Note 3) | 57,339 | 49,109 | 48,464 | |
Allowance for loan losses | 471 | 481 | 506 | 433 |
Commercial and Industrial [Member] | ||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Loans (Note 3) | 148,083 | 91,406 | 104,386 | |
Allowance for loan losses | 655 | 892 | 1,001 | 688 |
Consumer [Member] | ||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Loans (Note 3) | 38,854 | 24,382 | 24,513 | |
Allowance for loan losses | 270 | 254 | 262 | 305 |
Commercial Real Estate [Member] | ||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Loans (Note 3) | 326,379 | 139,453 | 123,487 | |
Allowance for loan losses | 1,663 | 1,926 | 1,761 | 1,438 |
Construction Real Estate [Member] | ||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Loans (Note 3) | 13,411 | 8,843 | 6,613 | |
Allowance for loan losses | 76 | 38 | 35 | 62 |
Residential Real Estate [Member] | ||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Loans (Note 3) | 217,982 | 95,880 | 91,322 | |
Allowance for loan losses | $ 640 | $ 537 | $ 726 | $ 1,013 |
Loans and Allowance for Loan _4
Loans and Allowance for Loan Losses (Details 1) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Carrying balance at acquisition date | $ 802,048 | $ 409,073 | $ 398,785 |
County Bank Corp ("County") [Member] | |||
Loans acquired - contractual payments | 395,123 | ||
Nonaccretable difference | 2,928 | ||
Expected cash flows | 392,195 | ||
Accretable yield | 1,841 | ||
Carrying balance at acquisition date | 390,354 | ||
Acquired Impaired [Member] | County Bank Corp ("County") [Member] | |||
Loans acquired - contractual payments | 7,729 | ||
Nonaccretable difference | 2,928 | ||
Expected cash flows | 4,801 | ||
Accretable yield | 185 | ||
Carrying balance at acquisition date | 4,616 | ||
Acquired Non-Impaired [Member] | County Bank Corp ("County") [Member] | |||
Loans acquired - contractual payments | 387,394 | ||
Expected cash flows | 387,394 | ||
Accretable yield | 1,656 | ||
Carrying balance at acquisition date | $ 385,738 |
Loans and Allowance for Loan _5
Loans and Allowance for Loan Losses (Details 2) - County Bank Corp ("County") [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Merger with County Bank Corp on October 1, 2019 | $ 1,841 |
Accretion | (75) |
Ending balance | 1,766 |
Acquired Impaired [Member] | |
Merger with County Bank Corp on October 1, 2019 | 185 |
Ending balance | 185 |
Acquired Non-Impaired [Member] | |
Merger with County Bank Corp on October 1, 2019 | 1,656 |
Accretion | (75) |
Ending balance | $ 1,581 |
Loans and Allowance for Loan _6
Loans and Allowance for Loan Losses (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for Loan Losses | |||
Beginning balance | $ 4,673 | $ 4,577 | $ 4,277 |
Charge-offs | (989) | (365) | (735) |
Recoveries | 373 | 426 | 550 |
Provision | 35 | 485 | |
Ending balance | 4,057 | 4,673 | 4,577 |
Individually evaluated for impairment | 355 | 297 | 302 |
Collectively evaluated for impairment | 3,702 | 4,376 | 4,275 |
Loans | |||
Individually evaluated for impairment | 5,922 | 4,024 | 4,140 |
Collectively evaluated for impairment | 788,397 | 405,049 | 394,645 |
Acquired with deteriorated credit quality | 7,729 | ||
Ending balance | 802,048 | 409,073 | 398,785 |
Agricultural [Member] | |||
Allowance for Loan Losses | |||
Beginning balance | 481 | 506 | 433 |
Recoveries | 65 | 33 | |
Provision | (75) | (58) | 73 |
Ending balance | 471 | 481 | 506 |
Individually evaluated for impairment | 103 | 94 | |
Collectively evaluated for impairment | 368 | 387 | 506 |
Loans | |||
Individually evaluated for impairment | 924 | 578 | 423 |
Collectively evaluated for impairment | 56,415 | 48,531 | 48,041 |
Ending balance | 57,339 | 49,109 | 48,464 |
Commercial and Industrial [Member] | |||
Allowance for Loan Losses | |||
Beginning balance | 892 | 1,001 | 688 |
Charge-offs | (83) | (58) | (439) |
Recoveries | 22 | 107 | 21 |
Provision | (176) | (158) | 731 |
Ending balance | 655 | 892 | 1,001 |
Individually evaluated for impairment | 3 | 26 | |
Collectively evaluated for impairment | 655 | 889 | 975 |
Loans | |||
Individually evaluated for impairment | 259 | 21 | 124 |
Collectively evaluated for impairment | 141,583 | 91,385 | 104,262 |
Acquired with deteriorated credit quality | 6,241 | ||
Ending balance | 148,083 | 91,406 | 104,386 |
Consumer [Member] | |||
Allowance for Loan Losses | |||
Beginning balance | 254 | 262 | 305 |
Charge-offs | (292) | (282) | (253) |
Recoveries | 136 | 112 | 169 |
Provision | 172 | 162 | 41 |
Ending balance | 270 | 254 | 262 |
Individually evaluated for impairment | 4 | 13 | 3 |
Collectively evaluated for impairment | 266 | 241 | 259 |
Loans | |||
Individually evaluated for impairment | 17 | 90 | 36 |
Collectively evaluated for impairment | 38,524 | 24,292 | 24,477 |
Acquired with deteriorated credit quality | 313 | ||
Ending balance | 38,854 | 24,382 | 24,513 |
Commercial Real Estate [Member] | |||
Allowance for Loan Losses | |||
Beginning balance | 1,926 | 1,761 | 1,438 |
Charge-offs | (589) | ||
Recoveries | 26 | 61 | 258 |
Provision | 300 | 104 | 65 |
Ending balance | 1,663 | 1,926 | 1,761 |
Individually evaluated for impairment | 13 | 20 | 49 |
Collectively evaluated for impairment | 1,650 | 1,906 | 1,712 |
Loans | |||
Individually evaluated for impairment | 2,288 | 623 | 778 |
Collectively evaluated for impairment | 323,358 | 138,830 | 122,709 |
Acquired with deteriorated credit quality | 733 | ||
Ending balance | 326,379 | 139,453 | 123,487 |
Construction Real Estate [Member] | |||
Allowance for Loan Losses | |||
Beginning balance | 38 | 35 | 62 |
Recoveries | 40 | ||
Provision | 38 | 3 | (67) |
Ending balance | 76 | 38 | 35 |
Collectively evaluated for impairment | 76 | 38 | 35 |
Loans | |||
Collectively evaluated for impairment | 13,411 | 8,843 | 6,613 |
Ending balance | 13,411 | 8,843 | 6,613 |
Residential Real Estate [Member] | |||
Allowance for Loan Losses | |||
Beginning balance | 537 | 726 | 1,013 |
Charge-offs | (25) | (25) | (43) |
Recoveries | 124 | 113 | 62 |
Provision | 4 | (277) | (306) |
Ending balance | 640 | 537 | 726 |
Individually evaluated for impairment | 235 | 167 | 224 |
Collectively evaluated for impairment | 405 | 370 | 502 |
Loans | |||
Individually evaluated for impairment | 2,434 | 2,712 | 2,779 |
Collectively evaluated for impairment | 215,106 | 93,168 | 88,543 |
Acquired with deteriorated credit quality | 442 | ||
Ending balance | 217,982 | 95,880 | 91,322 |
Unallocated [Member] | |||
Allowance for Loan Losses | |||
Beginning balance | 545 | 286 | 338 |
Provision | (263) | 259 | (52) |
Ending balance | 282 | 545 | 286 |
Collectively evaluated for impairment | $ 282 | $ 545 | $ 286 |
Loans and Allowance for Loan _7
Loans and Allowance for Loan Losses (Details 4) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | $ 802,048 | $ 409,073 | $ 398,785 |
Agricultural [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 57,339 | 49,109 | 48,464 |
Agricultural [Member] | Risk ratings 1 and 2 [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 14,173 | 15,300 | |
Agricultural [Member] | Risk rating 3 [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 27,163 | 23,938 | |
Agricultural [Member] | Risk rating 4 [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 14,530 | 9,082 | |
Agricultural [Member] | Risk rating 5 [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 1,094 | 211 | |
Agricultural [Member] | Risk rating 6 [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 379 | 578 | |
Commercial and Industrial [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 148,083 | 91,406 | 104,386 |
Commercial and Industrial [Member] | Risk ratings 1 and 2 [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 14,920 | 11,972 | |
Commercial and Industrial [Member] | Risk rating 3 [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 105,656 | 50,266 | |
Commercial and Industrial [Member] | Risk rating 4 [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 26,152 | 23,961 | |
Commercial and Industrial [Member] | Risk rating 5 [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 1,081 | 5,204 | |
Commercial and Industrial [Member] | Risk rating 6 [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 274 | 3 | |
Commercial Real Estate [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 326,379 | 139,453 | 123,487 |
Commercial Real Estate [Member] | Risk ratings 1 and 2 [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 11,051 | 7,962 | |
Commercial Real Estate [Member] | Risk rating 3 [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 271,120 | 89,173 | |
Commercial Real Estate [Member] | Risk rating 4 [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 39,934 | 36,193 | |
Commercial Real Estate [Member] | Risk rating 5 [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 1,332 | 4,850 | |
Commercial Real Estate [Member] | Risk rating 6 [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 2,942 | 1,275 | |
Consumer [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 38,854 | 24,382 | 24,513 |
Consumer [Member] | Performing [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 38,838 | 24,320 | |
Consumer [Member] | Nonaccrual [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 16 | 62 | |
Construction Real Estate [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 13,411 | 8,843 | 6,613 |
Construction Real Estate [Member] | Performing [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 13,411 | 8,843 | |
Residential Real Estate [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 217,982 | 95,880 | $ 91,322 |
Residential Real Estate [Member] | Performing [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | 216,651 | 94,925 | |
Residential Real Estate [Member] | Nonaccrual [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loans (Note 3) | $ 1,331 | $ 955 |
Loans and Allowance for Loan _8
Loans and Allowance for Loan Losses (Details 5) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Impaired and Restructured Loans with or without related allowance recorded | |||
Recorded Investment with no related allowance recorded | $ 2,728 | $ 510 | $ 665 |
Unpaid Principal Balance with no related allowance recorded | 3,398 | 556 | 839 |
Average Recorded Investment with no related allowance recorded | 1,165 | 631 | 641 |
Interest Income Recognized with no related allowance recorded | 53 | 154 | 4 |
Impaired Loans with a related allowance recorded | |||
Recorded Investment with an allowance recorded | 3,194 | 3,514 | 3,475 |
Unpaid Principal Balance with an allowance recorded | 3,323 | 3,652 | 3,584 |
Related Allowance | 355 | 297 | 302 |
Average Recorded Investment with an allowance recorded | 3,983 | 3,731 | 3,679 |
Interest Income Recognized with an allowance recorded | 116 | 19 | 146 |
Impaired Loans | |||
Recorded Investment | 5,922 | 4,024 | 4,140 |
Unpaid Principal Balance | 6,721 | 4,209 | 4,423 |
Related Allowance | 355 | 297 | 302 |
Average Recorded Investment | 5,148 | 4,362 | 4,320 |
Interest Income Recognized | 169 | 173 | 150 |
Agricultural [Member] | |||
Impaired and Restructured Loans with or without related allowance recorded | |||
Recorded Investment with no related allowance recorded | 545 | 185 | 423 |
Unpaid Principal Balance with no related allowance recorded | 545 | 185 | 455 |
Average Recorded Investment with no related allowance recorded | 146 | 291 | 322 |
Interest Income Recognized with no related allowance recorded | 10 | ||
Impaired Loans with a related allowance recorded | |||
Recorded Investment with an allowance recorded | 379 | 393 | |
Unpaid Principal Balance with an allowance recorded | 439 | 440 | |
Related Allowance | 103 | 94 | |
Average Recorded Investment with an allowance recorded | 388 | 161 | 121 |
Interest Income Recognized with an allowance recorded | 13 | ||
Impaired Loans | |||
Recorded Investment | 924 | 578 | 423 |
Unpaid Principal Balance | 984 | 625 | 455 |
Related Allowance | 103 | 94 | |
Average Recorded Investment | 534 | 452 | 443 |
Interest Income Recognized | 10 | 13 | |
Commercial and Industrial [Member] | |||
Impaired and Restructured Loans with or without related allowance recorded | |||
Recorded Investment with no related allowance recorded | 259 | ||
Unpaid Principal Balance with no related allowance recorded | 340 | ||
Average Recorded Investment with no related allowance recorded | 104 | 29 | 103 |
Interest Income Recognized with no related allowance recorded | 9 | 2 | |
Impaired Loans with a related allowance recorded | |||
Recorded Investment with an allowance recorded | 21 | 124 | |
Unpaid Principal Balance with an allowance recorded | 21 | 124 | |
Related Allowance | 3 | 26 | |
Average Recorded Investment with an allowance recorded | 86 | 296 | 177 |
Interest Income Recognized with an allowance recorded | 1 | 1 | |
Impaired Loans | |||
Recorded Investment | 259 | 21 | 124 |
Unpaid Principal Balance | 340 | 21 | 124 |
Related Allowance | 3 | 26 | |
Average Recorded Investment | 190 | 325 | 280 |
Interest Income Recognized | 10 | 2 | 1 |
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 | ||
Interest Income Recognized with no related allowance recorded | 8 | ||
Impaired Loans with a related allowance recorded | |||
Recorded Investment with an allowance recorded | 17 | 88 | 36 |
Unpaid Principal Balance with an allowance recorded | 18 | 88 | 36 |
Related Allowance | 4 | 13 | 3 |
Average Recorded Investment with an allowance recorded | 48 | 59 | 33 |
Interest Income Recognized with an allowance recorded | 1 | ||
Impaired Loans | |||
Recorded Investment | 17 | 90 | 36 |
Unpaid Principal Balance | 18 | 90 | 36 |
Related Allowance | 4 | 13 | 3 |
Average Recorded Investment | 48 | 61 | 33 |
Interest Income Recognized | 8 | 1 | |
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 | 1,882 | 74 | 127 |
Unpaid Principal Balance with no related allowance recorded | 2,471 | 109 | 258 |
Average Recorded Investment with no related allowance recorded | 782 | 78 | 110 |
Interest Income Recognized with no related allowance recorded | 30 | 30 | |
Impaired Loans with a related allowance recorded | |||
Recorded Investment with an allowance recorded | 406 | 550 | 651 |
Unpaid Principal Balance with an allowance recorded | 406 | 609 | 734 |
Related Allowance | 13 | 20 | 49 |
Average Recorded Investment with an allowance recorded | 975 | 692 | 826 |
Interest Income Recognized with an allowance recorded | 32 | 34 | |
Impaired Loans | |||
Recorded Investment | 2,288 | 623 | 778 |
Unpaid Principal Balance | 2,877 | 718 | 992 |
Related Allowance | 13 | 20 | 49 |
Average Recorded Investment | 1,757 | 770 | 936 |
Interest Income Recognized | 62 | 30 | 34 |
Residential Real Estate [Member] | |||
Impaired and Restructured Loans with or without related allowance recorded | |||
Recorded Investment with no related allowance recorded | 42 | 250 | 115 |
Unpaid Principal Balance with no related allowance recorded | 42 | 261 | 126 |
Average Recorded Investment with no related allowance recorded | 133 | 177 | 106 |
Interest Income Recognized with no related allowance recorded | 4 | 114 | 4 |
Impaired Loans with a related allowance recorded | |||
Recorded Investment with an allowance recorded | 2,392 | 2,462 | 2,664 |
Unpaid Principal Balance with an allowance recorded | 2,460 | 2,494 | 2,690 |
Related Allowance | 235 | 167 | 224 |
Average Recorded Investment with an allowance recorded | 2,486 | 2,523 | 2,522 |
Interest Income Recognized with an allowance recorded | 83 | 6 | 110 |
Impaired Loans | |||
Recorded Investment | 2,434 | 2,712 | 2,779 |
Unpaid Principal Balance | 2,502 | 2,755 | 2,816 |
Related Allowance | 235 | 167 | 224 |
Average Recorded Investment | 2,619 | 2,700 | 2,628 |
Interest Income Recognized | $ 87 | $ 120 | $ 114 |
Loans and Allowance for Loan _9
Loans and Allowance for Loan Losses (Details 6) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Financing Receivable, Past Due [Line Items] | ||||
Past Due Total | [1] | $ 6,358 | $ 2,905 | |
Loans Not Past Due | 795,690 | 406,168 | ||
Loans (Note 3) | 802,048 | 409,073 | $ 398,785 | |
30 to 59 Days [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Past Due Total | [1] | 3,129 | 1,647 | |
60 to 89 Days [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Past Due Total | [1] | 684 | 526 | |
Greater Than 90 Days [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Past Due Total | [1] | 2,545 | 732 | |
Agricultural [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Past Due Total | [1] | 68 | ||
Loans Not Past Due | 57,271 | 49,109 | ||
Loans (Note 3) | 57,339 | 49,109 | 48,464 | |
Agricultural [Member] | 60 to 89 Days [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Past Due Total | [1] | 68 | ||
Commercial and Industrial [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Past Due Total | [1] | 816 | 5 | |
Loans Not Past Due | 147,267 | 91,401 | ||
Loans (Note 3) | 148,083 | 91,406 | 104,386 | |
Commercial and Industrial [Member] | 30 to 59 Days [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Past Due Total | [1] | 542 | 5 | |
Commercial and Industrial [Member] | 60 to 89 Days [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Past Due Total | [1] | 15 | ||
Commercial and Industrial [Member] | Greater Than 90 Days [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Past Due Total | [1] | 259 | ||
Consumer [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Past Due Total | [1] | 151 | 200 | |
Loans Not Past Due | 38,703 | 24,182 | ||
Loans (Note 3) | 38,854 | 24,382 | 24,513 | |
Consumer [Member] | 30 to 59 Days [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Past Due Total | [1] | 121 | 149 | |
Consumer [Member] | 60 to 89 Days [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Past Due Total | [1] | 19 | 40 | |
Consumer [Member] | Greater Than 90 Days [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Past Due Total | [1] | 11 | 11 | |
Commercial Real Estate [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Past Due Total | [1] | 1,882 | 73 | |
Loans Not Past Due | 324,497 | 139,380 | ||
Loans (Note 3) | 326,379 | 139,453 | 123,487 | |
Commercial Real Estate [Member] | Greater Than 90 Days [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Past Due Total | [1] | 1,882 | 73 | |
Construction Real Estate [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loans Not Past Due | 13,411 | 8,843 | ||
Loans (Note 3) | 13,411 | 8,843 | 6,613 | |
Residential Real Estate [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Past Due Total | [1] | 3,441 | 2,627 | |
Loans Not Past Due | 214,541 | 93,253 | ||
Loans (Note 3) | 217,982 | 95,880 | $ 91,322 | |
Residential Real Estate [Member] | 30 to 59 Days [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Past Due Total | [1] | 2,466 | 1,493 | |
Residential Real Estate [Member] | 60 to 89 Days [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Past Due Total | [1] | 582 | 486 | |
Residential Real Estate [Member] | Greater Than 90 Days [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Past Due Total | [1] | $ 393 | $ 648 | |
[1] | Includes nonaccrual loans. |
Loans and Allowance for Loan_10
Loans and Allowance for Loan Losses (Details 7) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans | $ 4,687 | $ 1,532 |
Agricultural [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans | 379 | 393 |
Commercial and Industrial [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans | 776 | |
Consumer [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans | 16 | 62 |
Commercial Real Estate [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans | 2,185 | 123 |
Residential Real Estate [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans | $ 1,331 | $ 955 |
Loans and Allowance for Loan_11
Loans and Allowance for Loan Losses (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Total loans in the process of foreclosure | $ 173 | $ 156 |
Mortgage Banking (Details)
Mortgage Banking (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Mortgage Banking [Abstract] | |||
Loans originated for resale, net of principal payments | $ 63,920 | $ 33,555 | $ 43,171 |
Proceeds from loan sales | 62,763 | 34,872 | 42,883 |
Net gains on sales of loans held for sale | 1,951 | 1,003 | 1,265 |
Loan servicing fees, net of amortization | $ 82 | $ 91 | $ 155 |
Mortgage Banking (Details 1)
Mortgage Banking (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Servicing Asset at Amortized Cost, Balance | |||
Balance, beginning of year | $ 1,049 | $ 908 | $ 697 |
Capitalized | 822 | 441 | 443 |
Amortization | (453) | (300) | (232) |
Acquired from merger with County Bank Corp | 713 | ||
Balance, end of year | $ 2,131 | $ 1,049 | $ 908 |
Mortgage Banking (Details Narra
Mortgage Banking (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Mortgage loans serviced for others | $ 242,000 | $ 134,600 |
Fair value of loan servicing rights | $ 2,304 | $ 1,700 |
Discount Rate | 5.51% | 6.92% |
Lakestone Bank & Trust [Member] | ||
Discount Rate | 8.65% | |
Lower Range [Member] | ||
Prepayment Speed | 11.00% | 7.00% |
Lower Range [Member] | Lakestone Bank & Trust [Member] | ||
Prepayment Speed | 11.00% | |
Upper Range [Member] | ||
Prepayment Speed | 18.00% | 13.00% |
Upper Range [Member] | Lakestone Bank & Trust [Member] | ||
Prepayment Speed | 13.00% |
Premises and Equipment (Details
Premises and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Premises and equipment, gross | $ 38,943 | $ 28,964 |
Accumulated depreciation | (14,678) | (13,085) |
Premises and equipment, net | 24,265 | 15,879 |
Land and Land Improvements [Member] | ||
Premises and equipment, gross | 7,576 | 5,318 |
Leasehold Improvements [Member] | ||
Premises and equipment, gross | 38 | 38 |
Buildings [Member] | ||
Premises and equipment, gross | 20,251 | 16,251 |
Furniture And Equipment [Member] | ||
Premises and equipment, gross | $ 11,078 | $ 7,357 |
Premises and Equipment (Detai_2
Premises and Equipment (Details 1) $ in Thousands | Dec. 31, 2019USD ($) |
Rental committments under operating leases for the fiscal year ended: | |
2020 | $ 138 |
2021 | 139 |
2022 | 120 |
2023 | 75 |
2024 | 28 |
Thereafter | 14 |
Total undiscounted cash flows | 514 |
Less discount | 27 |
Total operating lease liabilities | $ 487 |
Premises and Equipment (Detai_3
Premises and Equipment (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 1,610 | $ 1,183 | $ 1,389 |
Rent expense | $ 72 | $ 108 | $ 99 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
January 1 | $ 13,728 | $ 13,728 |
Acquired goodwill from merger with County | 39,142 | |
December 31 | $ 52,870 | $ 13,728 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Oct. 02, 2019 | |
Accumulated Amortization | $ 353 | |
Core Deposit Intangible [Member] | ||
Accumulated Amortization | 353 | |
County Bank Corp ("County") [Member] | ||
Gross Carrying Amount | $ 6,359 | |
County Bank Corp ("County") [Member] | Core Deposit Intangible [Member] | ||
Gross Carrying Amount | 6,359 | |
Accumulated Amortization | $ 353 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Details 2) - County Bank Corp ("County") [Member] - Core Deposit Intangible [Member] $ in Thousands | Dec. 31, 2019USD ($) |
2020 | $ 1,369 |
2021 | 1,192 |
2022 | 1,016 |
2023 | 839 |
2024 | 662 |
Thereafter | 928 |
Total | $ 6,006 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Intangible asset amortization | $ 353 | ||
Goodwill from acquisition | 52,870 | $ 13,728 | $ 13,728 |
Core Deposit Intangible [Member] | |||
Intangible asset amortization | $ 353 | ||
Amortization period | 10 years | ||
Valley Ridge Financial Corp., [Member] | |||
Goodwill from acquisition | $ 13,700 | ||
Lakestone Bank & Trust [Member] | |||
Goodwill from acquisition | $ 39,100 |
Other Real Estate Owned (Detail
Other Real Estate Owned (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other Real Estate [Abstract] | |||
Balance, beginning of year | $ 102 | $ 106 | $ 437 |
Transfers from loans | 347 | 432 | 314 |
Acquisition from County Bank Corp | 1,364 | ||
Proceeds from sales | (938) | (515) | (663) |
Gains/(losses) on sales | 54 | 79 | 18 |
Balance, end of year | $ 929 | $ 102 | $ 106 |
Other Real Estate Owned (Deta_2
Other Real Estate Owned (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Other Real Estate [Abstract] | |||
Residential real estate mortgage loans | $ 175 | $ 102 | $ 106 |
Commercial real estate loans | $ 754 |
Deposits (Details)
Deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deposits [Abstract] | ||
Noninterest-bearing demand deposits | $ 287,460 | $ 153,542 |
Interest-bearing demand deposits | 236,154 | 135,425 |
Money market deposits | 263,666 | 86,720 |
Savings deposits | 206,050 | 75,615 |
Local certificates of deposit | 158,985 | 91,343 |
Brokered certificates of deposit | 2,287 | 34,370 |
Total deposits | $ 1,154,602 | $ 577,015 |
Deposits (Details 1)
Deposits (Details 1) $ in Thousands | Dec. 31, 2019USD ($) |
Maturities of deposits during the year ending December 31, | |
2020 | $ 121,653 |
2021 | 19,378 |
2022 | 9,661 |
2023 | 6,984 |
2024 | 3,539 |
Thereafter | 57 |
Total | $ 161,272 |
Deposits (Details Narrative)
Deposits (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deposits [Abstract] | ||
Certificates of deposit $250,000 or greater | $ 68,300 | $ 39,300 |
Brokered certificates of deposit | 2,300 | 34,400 |
Certificates of Deposit issued through CDARS | $ 7,100 | $ 2,100 |
Repurchase Agreements (Details)
Repurchase Agreements (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Disclosure of Repurchase Agreements [Abstract] | |
Average balance during the year | $ 1,412 |
Average interest rate during the year | 0.05% |
Maximum month end balance during the year | $ 7,148 |
Federal Home Loan Bank Advanc_3
Federal Home Loan Bank Advances (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Total advances outstanding at year-end | $ 33,198 | $ 5,233 |
Federal Home Loan Bank Advances Matured on November 2024 [Member] | ||
Total advances outstanding at year-end | $ 198 | 233 |
Interest rate | 3.98% | |
Federal Home Loan Bank Advances Matured on April 2020 [Member] | ||
Total advances outstanding at year-end | $ 10,000 | |
Interest rate | 1.99% | |
Federal Home Loan Bank Advances Matured on May 2020 [Member] | ||
Total advances outstanding at year-end | $ 23,000 | |
Interest rate | 2.16% | |
Federal Home Loan Bank Advances Matured on March 2019 [Member] | ||
Total advances outstanding at year-end | $ 5,000 | |
Interest rate | 2.57% |
Federal Home Loan Bank Advanc_4
Federal Home Loan Bank Advances (Details 1) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Scheduled maturities of advances from the FHLB | ||
2020 | $ 33,037 | |
2021 | 39 | |
2022 | 40 | |
2023 | 42 | |
2024 | 40 | |
Total | $ 33,198 | $ 5,233 |
Federal Home Loan Bank Advanc_5
Federal Home Loan Bank Advances (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Amount of additional funds available to borrow from Federal Home Loan Bank based upon collateral | $ 78,600 | |
Agricultural and Residential Real Estate [Member] | ||
Loans pledged for advance from the Federal Home Loan Bank | $ 200,100 | $ 96,800 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Provision for Income Taxes | |||
Current federal income tax expense | $ 984 | $ 946 | $ 2,325 |
Deferred federal income tax expense/(benefit) | 310 | 209 | 62 |
Income tax expense | $ 1,294 | $ 1,155 | $ 2,387 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Income Tax Provision to Statutory Rate | |||
Income tax computed at statutory federal rate | $ 1,778 | $ 1,783 | $ 2,909 |
Tax exempt interest income | (320) | (309) | (486) |
Tax exempt earnings on bank-owned life insurance | (162) | (81) | (135) |
Tax credits | (218) | (154) | (85) |
Deferred tax adjustment related to reduction in U.S. federal statutory income income tax rate | 206 | ||
Nondeductible merger expenses | 164 | ||
Other items | 52 | (84) | (22) |
Income tax expense | $ 1,294 | $ 1,155 | $ 2,387 |
Effective income tax rate | 15.00% | 14.00% | 28.00% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Purchase accounting adjustments from merger with County | $ 1,129 | |
Allowance for loan losses | 585 | $ 981 |
Alternative minimum tax credit carryforward | 301 | |
Unrealized losses on securities available for sale | 233 | |
Deferred compensation | 169 | 102 |
Other | 198 | 160 |
Total deferred tax assets | 2,382 | 1,476 |
Deferred tax liabilities: | ||
Purchase accounting adjustments from merger with County | 1,285 | |
Depreciation | 778 | 797 |
Loan servicing rights | 447 | 220 |
Unrealized gains on securities available for sale | 360 | |
Other | 235 | 88 |
Total deferred tax liabilities | 3,105 | 1,105 |
Net deferred tax (liability) | $ (723) | |
Net deferred tax asset | $ 371 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal tax rate | 21.00% | 21.00% | 34.00% |
Additional income tax expense | $ 206 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Loans Receivable to related parties [Roll Forward] | ||
Balance, beginning of year | $ 5,343 | $ 6,477 |
New loans | 2,988 | 3,029 |
Repayments | (3,372) | (3,835) |
Effect of changes in related parties | (4,664) | (328) |
Loans acquired from merger with County Bank Corp | 10,268 | |
Balance, end of year | $ 10,563 | $ 5,343 |
Related Party Transactions (D_2
Related Party Transactions (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Related Party Transactions [Abstract] | ||
Related party deposit liabilities | $ 9,000 | $ 6,300 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Matching contributions to 401(k) plan cost | $ 233 | $ 207 | $ 189 |
Post-retirement Benefits Plan [Member] | |||
Benefit expense | 14 | 12 | 14 |
Benefit obligation | 107 | 98 | |
Deferred Compensation Plans - Directors [Member] | |||
Benefit expense | 3 | 5 | 7 |
Benefit obligation | $ 33 | 65 | |
Description of benefit plan | A deferred director compensation plan covers former directors of Valley Ridge Financial Corp., 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 | $ 26 | 6 | $ 12 |
Benefit obligation | $ 368 | $ 420 | |
Description of benefit plan | A supplemental executive retirement plan covers four former executive officers of Valley Ridge Financial Corp. 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). | ||
Deferred Compensation Plans - Executive Officers [Member] | Lakestone Bank & Trust [Member] | |||
Benefit obligation | $ 337 | ||
Description of benefit plan | A supplemental executive retirement plan covers one former executive officer and one current executive officer of Lakestone Bank & Trust. Under the plan, the individuals would be paid a specific amount of compensation over a 15-year period commencing upon early or normal retirement age (as defined in the plan). |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - Stock Options [Member] | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Number of options: | |
Number of Options outstanding, beginning | shares | 58,129 |
Options granted | shares | 13,500 |
Options exercised | shares | (12,381) |
Options forfeited or expired | shares | (1,500) |
Number of Options outstanding, ending | shares | 57,748 |
Number of Options exercisable | shares | 45,748 |
Weighted Average Exercise Price: | |
Weighted Average Exercise Price of Options outstanding, beginning | $ / shares | $ 22.41 |
Options granted | $ / shares | 27.25 |
Options exercised | $ / shares | 21.64 |
Options forfeited or expired | $ / shares | 27.25 |
Weighted Average Exercise Price of Options outstanding, ending | $ / shares | 23.39 |
Weighted Average Exercise Price of Options exercisable | $ / shares | $ 22.38 |
Stock Based Compensation (Det_2
Stock Based Compensation (Details 1) | 12 Months Ended |
Dec. 31, 2019shares | |
Exercise Price $27.25 [Member] | |
Number of Options outstanding, ending | 12,000 |
Weighted average remaining contractual life of options outstanding and exercisable | 9 years 5 months 19 days |
Exercise Price $25.65 [Member] | |
Number of Options outstanding, ending | 12,000 |
Number of Options exercisable | 12,000 |
Weighted average remaining contractual life of options outstanding and exercisable | 8 years 6 months 14 days |
Exercise Price $20.86 [Member] | |
Number of Options outstanding, ending | 12,404 |
Number of Options exercisable | 12,404 |
Weighted average remaining contractual life of options outstanding and exercisable | 7 years 4 months 20 days |
Exercise Price $21.13 [Member] | |
Number of Options outstanding, ending | 15,986 |
Number of Options exercisable | 15,986 |
Weighted average remaining contractual life of options outstanding and exercisable | 6 years 18 days |
Exercise Price $22.31 [Member] | |
Number of Options outstanding, ending | 5,358 |
Number of Options exercisable | 5,358 |
Weighted average remaining contractual life of options outstanding and exercisable | 2 years 14 days |
Stock Based Compensation (Det_3
Stock Based Compensation (Details 2) - Stock Options [Member] | 12 Months Ended |
Dec. 31, 2019$ / shares | |
Risk-free interest rate | 0.48% |
Expected option life | 6 years 6 months |
Expected stock price volatility | 21.00% |
Dividend yield | 2.65% |
Fair value of options granted per share | $ 3.64 |
Stock Based Compensation (Det_4
Stock Based Compensation (Details 3) - Restricted Stock Units [Member] | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Outstanding Stock Awards Shares | |
Balance, beginning of year shares | shares | 20,440 |
Granted | shares | 9,900 |
Vested | shares | (20,440) |
Forfeited | shares | (900) |
Balance, end of year shares | shares | 9,000 |
Weighted Average Grant Date Fair Value Per Share | |
Balance, beginning of year | $ / shares | $ 24.74 |
Granted | $ / shares | 27.25 |
Vested | $ / shares | 24.74 |
Forfeited | $ / shares | 27.25 |
Balance, end of year | $ / shares | $ 27.25 |
Stock Based Compensation (Det_5
Stock Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2019 | |
Stock-based compensation expense | $ 373 | $ 344 | $ 317 | |
Authorized number of awards | 200,000 | |||
Shares available for future grants | 100,971 | |||
Share price | $ 26.25 | |||
Upper Range [Member] | ||||
Weighted Average Exercise Price of Options outstanding, ending | $ 27.25 | |||
Lower Range [Member] | ||||
Weighted Average Exercise Price of Options outstanding, ending | $ 20.86 | |||
Stock Options [Member] | ||||
Stock-based compensation expense | $ 53 | $ 38 | 49 | |
Weighted Average Exercise Price of Options outstanding, ending | $ 23.39 | $ 22.41 | ||
Share price | $ 31.96 | |||
Weighted average remaining contractual life of options outstanding and exercisable | 6 years 7 months 6 days | |||
Intrinsic value outstanding | $ 495 | |||
Intrinsic value exercisable | 438 | |||
Unrecognized compensation expense | 34 | |||
Restricted Stock Units [Member] | ||||
Stock-based compensation expense | $ 349 | $ 244 | $ 191 | |
Numbers units outstanding | 9,000 | 20,440 | ||
Units outstanding, value | $ 288 | $ 511 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Basic | |||||||||||
Net income | $ 7,171 | $ 7,333 | $ 6,168 | ||||||||
Weighted average common shares outstanding | 4,528,786 | 3,614,302 | 3,621,216 | ||||||||
Basic earnings per common shares | $ 0.44 | $ 0.28 | $ 0.41 | $ 0.45 | $ 0.51 | $ 0.55 | $ 0.51 | $ 0.46 | $ 1.58 | $ 2.03 | $ 1.70 |
Diluted | |||||||||||
Net income | $ 7,171 | $ 7,333 | $ 6,168 | ||||||||
Weighted average common shares outstanding | 4,528,786 | 3,614,302 | 3,621,216 | ||||||||
Plus dilutive stock options and restricted stock units | 10,489 | 13,825 | 8,465 | ||||||||
Weighted average common shares outstanding and potentially dilutive shares | 4,539,275 | 3,628,127 | 3,629,682 | ||||||||
Diluted earnings per common share | $ 0.44 | $ 0.28 | $ 0.41 | $ 0.45 | $ 0.50 | $ 0.55 | $ 0.51 | $ 0.46 | $ 1.58 | $ 2.02 | $ 1.70 |
Earnings Per Share (Details Nar
Earnings Per Share (Details Narrative) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||
Dilutive stock options excluded in calculation of earnings per share | 0 | 15,000 | 0 |
Dividend rate | 5.00% |
Condensed Financial Statement_3
Condensed Financial Statements of Parent Company (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||||
Securities available for sale (Note 2) | $ 339,579 | $ 166,602 | ||
Other assets | 9,499 | 7,355 | ||
Total assets | 1,386,128 | 670,544 | ||
Liabilities | ||||
Other liabilities | 6,189 | 3,019 | ||
Total liabilities | 1,193,989 | 590,067 | ||
Shareholders' equity | 192,139 | 80,477 | $ 76,550 | $ 71,698 |
Total liabilities and shareholders' equity | 1,386,128 | 670,544 | ||
Parent Company [Member] | ||||
Assets | ||||
Cash | 991 | 1,400 | $ 1,249 | $ 516 |
Equity securities at fair value | 1,840 | 1,960 | ||
Securities available for sale (Note 2) | 959 | 1,692 | ||
Other assets | 468 | 122 | ||
Investment in Bank subsidiaries | 189,578 | 75,313 | ||
Total assets | 193,836 | 80,487 | ||
Liabilities | ||||
Other liabilities | 1,697 | 10 | ||
Total liabilities | 1,697 | 10 | ||
Shareholders' equity | 192,139 | 80,477 | ||
Total liabilities and shareholders' equity | $ 193,836 | $ 80,487 |
Condensed Financial Statement_4
Condensed Financial Statements of Parent Company (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Gains on sales of securities | $ 22 | $ 34 | $ (280) | ||||||||
Change in market value of equity securities | 71 | ||||||||||
Income tax (expense)/benefit | (1,294) | (1,155) | (2,387) | ||||||||
Net income | $ 3,027 | $ 1,021 | $ 1,486 | $ 1,637 | $ 1,828 | $ 2,014 | $ 1,833 | $ 1,658 | 7,171 | 7,333 | 6,168 |
Parent Company [Member] | |||||||||||
Interest and dividends from ChoiceOne Bank | 4,011 | 2,800 | 3,042 | ||||||||
Interest and dividends from other securities | 50 | 47 | 55 | ||||||||
Gains on sales of securities | 8 | 9 | 1 | ||||||||
Change in market value of equity securities | (114) | 184 | |||||||||
Total income | 3,955 | 3,040 | 3,098 | ||||||||
Other expenses | 2,348 | 144 | 123 | ||||||||
Income before income tax and equity in undistributed net income of subsidiaries | 1,607 | 2,896 | 2,975 | ||||||||
Income tax (expense)/benefit | 261 | (14) | 73 | ||||||||
Income before equity in undistributed net income of subsidiaries | 1,868 | 2,882 | 3,048 | ||||||||
Equity in undistributed net income of subsidiaries | 5,303 | 4,451 | 3,120 | ||||||||
Net income | $ 7,171 | $ 7,333 | $ 6,168 |
Condensed Financial Statement_5
Condensed Financial Statements of Parent Company (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||||||||||
Net income | $ 3,027 | $ 1,021 | $ 1,486 | $ 1,637 | $ 1,828 | $ 2,014 | $ 1,833 | $ 1,658 | $ 7,171 | $ 7,333 | $ 6,168 |
Adjustments to reconcile net income to net cash from operating activities: | |||||||||||
Amortization | 1,517 | 893 | 1,061 | ||||||||
Net gain on sale of securities | (22) | (34) | 280 | ||||||||
Change in market value of equity securities | (71) | ||||||||||
Changes in other assets | 2,128 | (875) | 417 | ||||||||
Changes in other liabilities | (1,493) | 573 | (783) | ||||||||
Net cash from operating activities | 9,202 | 9,955 | 8,090 | ||||||||
Cash flows from investing activities: | |||||||||||
Sales of securities | 178,450 | 2,634 | 57,595 | ||||||||
Purchases of securities | (209,763) | (31,450) | (56,123) | ||||||||
Cash acquired from merger with County Bank Corp | 1,364 | ||||||||||
Net cash from investing activities | 36,352 | (43,855) | (18,302) | ||||||||
Cash flows from financing activities: | |||||||||||
Issuance of common stock | 142 | 77 | 98 | ||||||||
Repurchase of common stock | (67) | (523) | (203) | ||||||||
Cash dividends and fractional shares from stock dividend and merger | (5,815) | (2,580) | (2,324) | ||||||||
Net cash from financing activities | (5,686) | 16,753 | 32,240 | ||||||||
Parent Company [Member] | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | 7,171 | 7,333 | 6,168 | ||||||||
Adjustments to reconcile net income to net cash from operating activities: | |||||||||||
Equity in undistributed net income of subsidiaries | (5,303) | (4,451) | (3,120) | ||||||||
Amortization | 14 | 18 | 19 | ||||||||
Compensation expense on employee and director stock purchases, stock options, and restricted stock units | 359 | 331 | 304 | ||||||||
Net gain on sale of securities | (8) | (9) | (1) | ||||||||
Change in market value of equity securities | 114 | (184) | |||||||||
Changes in other assets | (344) | 66 | (37) | ||||||||
Changes in other liabilities | 1,485 | (19) | (39) | ||||||||
Net cash from operating activities | 3,488 | 3,085 | 3,294 | ||||||||
Cash flows from investing activities: | |||||||||||
Sales of securities | 1,102 | 91 | 334 | ||||||||
Purchases of securities | (466) | ||||||||||
Cash acquired from merger with County Bank Corp | 1,038 | ||||||||||
Net cash from investing activities | 2,140 | 91 | (132) | ||||||||
Cash flows from financing activities: | |||||||||||
Issuance of common stock | 142 | 77 | 98 | ||||||||
Repurchase of common stock | (67) | (523) | (203) | ||||||||
Cash used as part of equity issuance for merger | (297) | ||||||||||
Cash dividends and fractional shares from stock dividend and merger | (5,815) | (2,579) | (2,324) | ||||||||
Net cash from financing activities | (6,037) | (3,025) | (2,429) | ||||||||
Net change in cash | (409) | 151 | 733 | ||||||||
Beginning cash | $ 1,400 | $ 1,249 | 1,400 | 1,249 | 516 | ||||||
Ending cash | $ 991 | $ 1,400 | $ 991 | $ 1,400 | $ 1,249 |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Equity securities at fair value | $ 2,851 | $ 2,847 |
Securities available for sale (Note 2) | 339,579 | 166,602 |
Loans to other financial institutions | 51,048 | 20,644 |
Liabilities | ||
Noninterest-bearing deposits | 287,460 | 153,542 |
Interest-bearing deposits | 867,142 | 423,473 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets | ||
Cash and due from banks | 59,558 | 19,690 |
Equity securities at fair value | 1,379 | 1,961 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Securities available for sale (Note 2) | 327,212 | 158,104 |
Federal Home Loan Bank and Federal Reserve Bank stock | 6,458 | 3,567 |
Loans held for sale | 3,134 | 856 |
Loans to other financial institutions | 51,048 | 20,644 |
Accrued interest receivable | 3,965 | 2,267 |
Liabilities | ||
Noninterest-bearing deposits | 287,460 | 153,542 |
Interest-bearing deposits | 867,154 | 422,381 |
Federal funds purchased | 4,800 | |
Federal Home Loan Bank advances | 33,243 | 5,241 |
Accrued interest payable | 411 | 210 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Assets | ||
Equity securities at fair value | 1,472 | 886 |
Securities available for sale (Note 2) | 12,367 | 8,498 |
Loans, net | 793,270 | 399,091 |
Carrying Amount [Member] | ||
Assets | ||
Cash and due from banks | 59,558 | 19,690 |
Equity securities at fair value | 2,851 | 2,847 |
Securities available for sale (Note 2) | 339,579 | 166,602 |
Federal Home Loan Bank and Federal Reserve Bank stock | 6,458 | 3,567 |
Loans held for sale | 3,095 | 831 |
Loans to other financial institutions | 51,048 | 20,644 |
Loans, net | 797,991 | 404,400 |
Accrued interest receivable | 3,965 | 2,267 |
Liabilities | ||
Noninterest-bearing deposits | 287,460 | 153,542 |
Interest-bearing deposits | 867,142 | 423,473 |
Federal funds purchased | 4,800 | |
Federal Home Loan Bank advances | 33,198 | 5,233 |
Accrued interest payable | 411 | 210 |
Estimated Fair Value [Member] | ||
Assets | ||
Cash and due from banks | 59,558 | 19,690 |
Equity securities at fair value | 2,851 | 2,847 |
Securities available for sale (Note 2) | 339,579 | 166,602 |
Federal Home Loan Bank and Federal Reserve Bank stock | 6,458 | 3,567 |
Loans held for sale | 3,134 | 856 |
Loans to other financial institutions | 51,048 | 20,644 |
Loans, net | 793,270 | 399,091 |
Accrued interest receivable | 3,965 | 2,267 |
Liabilities | ||
Noninterest-bearing deposits | 287,460 | 153,542 |
Interest-bearing deposits | 867,154 | 422,381 |
Federal funds purchased | 4,800 | |
Federal Home Loan Bank advances | 33,243 | 5,241 |
Accrued interest payable | $ 411 | $ 210 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities at fair value | $ 2,851 | $ 2,847 |
Securities available for sale (Note 2) | 339,579 | 166,602 |
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) | 17,215 | 33,529 |
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) | 2,008 | 1,947 |
Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 2,851 | |
State and Municipal [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 173,924 | 103,928 |
Mortgage-backed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 142,760 | 21,575 |
Corporate [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 2,672 | 5,102 |
Trust Preferred Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 1,000 | 500 |
Asset-backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale (Note 2) | 21 | |
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) | 327,212 | 158,104 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities at fair value | 1,379 | 1,961 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities at fair value | 1,472 | 886 |
Securities available for sale (Note 2) | 12,367 | 8,498 |
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) | 339,579 | 166,602 |
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) | 17,215 | 33,529 |
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) | 2,008 | 1,947 |
Fair Value Measured - Recurring Basis [Member] | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities at fair value | 2,851 | |
Securities available for sale (Note 2) | 2,847 | |
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) | 173,924 | 103,928 |
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) | 142,760 | 21,575 |
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) | 2,672 | 5,102 |
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) | 1,000 | 500 |
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 | |
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) | 327,212 | 158,104 |
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) | 17,215 | 33,529 |
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) | 2,008 | 1,947 |
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) | 162,557 | 95,930 |
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) | 142,760 | 21,575 |
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) | 2,672 | 5,102 |
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 | |
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 at fair value | 1,379 | 1,961 |
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) | 12,367 | 8,498 |
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 at fair value | 1,472 | 886 |
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) | 11,367 | 7,998 |
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) | $ 1,000 | $ 500 |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
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 | $ 324 | $ (300) |
Net purchases, sales, calls, and maturities | 2,756 | |
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 | ||
Balance at the beginning of year | 886 | |
Reclassification due to implementation of ASU 2016-01 | 1,000 | |
Total realized and unrealized gains included in noninterest income | 114 | (114) |
Acquired from merger with County Bank Corp | 472 | |
Balance at the end of year | 1,472 | 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 | 8,498 | 13,398 |
Reclassification due to implementation of ASU 2016-01 | (1,000) | |
Total unrealized gains/(losses) included in other comprehensive income | 210 | (186) |
Net purchases, sales, calls, and maturities | 1,375 | (3,714) |
Acquired from merger with County Bank Corp | 2,284 | |
Balance at the end of year | $ 12,367 | $ 8,498 |
Fair Value Measurements (Deta_3
Fair Value Measurements (Details 2) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other real estate owned, net | $ 929 | $ 102 | $ 106 | $ 437 |
Fair Value - Non-Recurring Basis [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impaired Loans | 5,922 | 4,024 | ||
Other real estate owned, net | 929 | 102 | ||
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 | 5,922 | 4,024 | ||
Other real estate owned, net | $ 929 | $ 102 |
Fair Value Measurements (Deta_4
Fair Value Measurements (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | ||
Total unrealized gains (losses) included in other comprehensive income | $ 324 | $ (300) |
Level 3 securities purchased during period | 2,091 | $ 224 |
Level 3 securities totaling | $ 2,756 |
Off-Balance Sheet Activities (D
Off-Balance Sheet Activities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | ||
Unused lines of credit and letters of credit - fixed rate | $ 38,064 | $ 20,036 |
Unused lines of credit and letters of credit - variable rate | 177,447 | 103,978 |
Commitments to fund loans (at market rates) - fixed rate | 18,216 | 20,997 |
Commitments to fund loans (at market rates) - variable rate | $ 4,580 | $ 1,421 |
Off-Balance Sheet Activities _2
Off-Balance Sheet Activities (Details Narrative) | 12 Months Ended |
Dec. 31, 2019 | |
Lower Range [Member] | |
Interest rate of commitments | 3.25% |
Term of commitments | 1 year |
Upper Range [Member] | |
Interest rate of commitments | 7.50% |
Term of commitments | 30 years |
Regulatory Capital (Details)
Regulatory Capital (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Parent Company [Member] | ||
Total Capital | ||
Total Capital | $ 135,836 | $ 72,148 |
Total Capital (to risk-weighted assets) ratio | 14.20% | 13.80% |
Minimum amount of capital for adequacy purposes | $ 76,288 | $ 41,811 |
Minimum amount of capital for adequacy purposes, ratio | 8.00% | 8.00% |
Common equity Tier 1 capital (to risk weighted assets) | ||
Common equity Capital | $ 131,785 | $ 67,481 |
Common equity Capital ratio | 13.80% | 12.90% |
Minimum amount of Common equity Capital for adequacy purposes | $ 42,912 | $ 23,519 |
Minimum amount of Common equity Capital for adequacy purposes, ratio | 4.50% | 4.50% |
Tier 1 Capital (to risk-weighted assets) | ||
Tier 1 Capital | $ 131,785 | $ 67,481 |
Tier 1 Capital (to risk-weighted assets) ratio | 13.80% | 12.90% |
Minimum amount of Tier 1 Capital for adequacy purposes | $ 57,216 | $ 31,359 |
Minimum amount of Tier 1 Capital for adequacy purposes, ratio | 6.00% | 6.00% |
Tier 1 Leverage Capital (to average assets) | ||
Tier 1 Capital | $ 131,785 | $ 67,481 |
Tier 1 Capital (to average assets) ratio | 9.60% | 10.50% |
Minimum amount of Tier 1 Capital for adequacy purposes | $ 54,646 | $ 25,658 |
Minimum amount of Tier 1 Capital for adequacy purposes, ratio | 4.00% | 4.00% |
ChoiceOne Bank [Member] | ||
Total Capital | ||
Total Capital | $ 69,412 | $ 66,976 |
Total Capital (to risk-weighted assets) ratio | 13.20% | 12.90% |
Minimum amount of capital for adequacy purposes | $ 42,039 | $ 41,599 |
Minimum amount of capital for adequacy purposes, ratio | 8.00% | 8.00% |
Minimum Capital required to be well-capitalized | $ 52,549 | $ 51,999 |
Minimum Capital required to be well-capitalized, ratio | 10.00% | 10.00% |
Common equity Tier 1 capital (to risk weighted assets) | ||
Common equity Capital | $ 65,362 | $ 62,309 |
Common equity Capital ratio | 12.40% | 12.00% |
Minimum amount of Common equity Capital for adequacy purposes | $ 23,647 | $ 23,399 |
Minimum amount of Common equity Capital for adequacy purposes, ratio | 4.50% | 4.50% |
Minimum Common equity Capital required to be well-capitalized | $ 34,157 | $ 33,799 |
Minimum Common equity Capital required to be well-capitalized, ratio | 6.50% | 6.50% |
Tier 1 Capital (to risk-weighted assets) | ||
Tier 1 Capital | $ 65,362 | $ 62,309 |
Tier 1 Capital (to risk-weighted assets) ratio | 12.40% | 12.00% |
Minimum amount of Tier 1 Capital for adequacy purposes | $ 31,530 | $ 31,199 |
Minimum amount of Tier 1 Capital for adequacy purposes, ratio | 6.00% | 6.00% |
Minimum Tier 1 Capital required to be well-capitalized | $ 42,039 | $ 41,599 |
Minimum Tier 1 Capital required to be well-capitalized, ratio | 8.00% | 8.00% |
Tier 1 Leverage Capital (to average assets) | ||
Tier 1 Capital | $ 65,362 | $ 62,309 |
Tier 1 Capital (to average assets) ratio | 10.00% | 9.80% |
Minimum amount of Tier 1 Capital for adequacy purposes | $ 26,179 | $ 25,512 |
Minimum amount of Tier 1 Capital for adequacy purposes, ratio | 4.00% | 4.00% |
Minimum Tier 1 Capital required to be well-capitalized | $ 32,724 | $ 31,890 |
Minimum Tier 1 Capital required to be well-capitalized, ratio | 5.00% | 5.00% |
Lakestone Bank & Trust [Member] | ||
Total Capital | ||
Total Capital | $ 63,885 | |
Total Capital (to risk-weighted assets) ratio | 15.00% | |
Minimum amount of capital for adequacy purposes | $ 34,056 | |
Minimum amount of capital for adequacy purposes, ratio | 8.00% | |
Minimum Capital required to be well-capitalized | $ 42,570 | |
Minimum Capital required to be well-capitalized, ratio | 10.00% | |
Common equity Tier 1 capital (to risk weighted assets) | ||
Common equity Capital | $ 63,885 | |
Common equity Capital ratio | 15.00% | |
Minimum amount of Common equity Capital for adequacy purposes | $ 19,156 | |
Minimum amount of Common equity Capital for adequacy purposes, ratio | 4.50% | |
Minimum Common equity Capital required to be well-capitalized | $ 27,670 | |
Minimum Common equity Capital required to be well-capitalized, ratio | 6.50% | |
Tier 1 Capital (to risk-weighted assets) | ||
Tier 1 Capital | $ 63,885 | |
Tier 1 Capital (to risk-weighted assets) ratio | 15.00% | |
Minimum amount of Tier 1 Capital for adequacy purposes | $ 25,542 | |
Minimum amount of Tier 1 Capital for adequacy purposes, ratio | 6.00% | |
Minimum Tier 1 Capital required to be well-capitalized | $ 34,056 | |
Minimum Tier 1 Capital required to be well-capitalized, ratio | 8.00% | |
Tier 1 Leverage Capital (to average assets) | ||
Tier 1 Capital | $ 63,885 | |
Tier 1 Capital (to average assets) ratio | 9.00% | |
Minimum amount of Tier 1 Capital for adequacy purposes | $ 28,338 | |
Minimum amount of Tier 1 Capital for adequacy purposes, ratio | 4.00% | |
Minimum Tier 1 Capital required to be well-capitalized | $ 35,423 | |
Minimum Tier 1 Capital required to be well-capitalized, ratio | 5.00% |
Regulatory Capital (Details Nar
Regulatory Capital (Details Narrative) $ in Thousands | Dec. 31, 2019USD ($) |
Regulatory Capital | |
Amount of undistributed net income available for dividends | $ 12,900 |
Business Combination (Details)
Business Combination (Details) - USD ($) $ in Thousands | Oct. 02, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Net assets acquired: | ||||
Goodwill | $ 52,870 | $ 13,728 | $ 13,728 | |
County Bank Corp ("County") [Member] | ||||
Purchase Price: | ||||
Consideration | $ 107,945 | |||
Net assets acquired: | ||||
Cash and cash equivalents | 20,638 | |||
Equity securities at fair value | 474 | |||
Securities available for sale | 187,230 | |||
Federal Home Loan Bank and Federal Reserve Bank stock | 2,903 | |||
Loans to other financial institutions | 33,481 | |||
Originated loans | 390,354 | |||
Premises and equipment | 9,271 | |||
Other real estate owned | 1,364 | |||
Deposit based intangible | 6,359 | |||
Bank owned life insurance | 16,912 | |||
Other assets | 4,002 | |||
Total assets | 672,988 | |||
Non-interest bearing deposits | 124,113 | |||
Interest bearing deposits | 449,488 | |||
Total deposits | 573,601 | |||
Federal funds purchased | 3,800 | |||
Advances from Federal Home Loan Bank | 23,000 | |||
Other liabilities | 3,784 | |||
Total liabilities | 604,185 | |||
Net assets acquired | 68,803 | |||
Goodwill | $ 39,142 |
Business Combination (Details 1
Business Combination (Details 1) - County Bank Corp ("County") [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net interest income | $ 44,440 | $ 42,974 | $ 40,178 |
Noninterest income | 13,289 | 12,151 | 13,364 |
Noninterest expense | 42,611 | 38,501 | 37,361 |
Net income | $ 13,487 | $ 14,251 | $ 11,513 |
Net income per diluted share | $ 1.86 | $ 1.97 | $ 1.63 |
Business Combination (Details N
Business Combination (Details Narrative) - USD ($) $ in Thousands | Oct. 02, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Stock issued during acquisitions, value | $ 107,639 | |||
Goodwill | 52,870 | $ 13,728 | $ 13,728 | |
County Bank Corp ("County") [Member] | ||||
Description of acquired entity | 14 branch offices and one loan production office | |||
Total assets | $ 672,988 | |||
Total loans | 424,000 | |||
Total deposits | 573,601 | |||
Total liabilities | 604,185 | |||
Goodwill | 39,142 | |||
Acquisition costs related to merger | 2,100 | |||
Acquisition costs merger amounted expensed | 1,800 | |||
Acquisition costs netted with stock issuance costs | $ 297 | |||
Earnings | 2,300 | |||
County Bank Corp ("County") [Member] | Common Stock [Member] | ||||
Stock issued during acquisitions, shares | 3,603,872 | |||
Stock issued during acquisitions, value | $ 108,000 | |||
County Bank Corp ("County") [Member] | Fractional Stock [Member] | ||||
Stock issued during acquisitions, shares | 299 | |||
Community Shores Bank Corp ("Community Shores") [Member] | ||||
Total assets | 204,000 | |||
Total loans | 156,000 | |||
Total deposits | $ 184,000 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Interest Income | $ 12,881 | $ 6,561 | $ 6,554 | $ 6,477 | $ 6,450 | $ 6,212 | $ 6,141 | $ 5,722 | $ 32,473 | $ 24,525 | $ 22,041 |
Net Interest Income | 11,206 | 5,570 | 5,501 | 5,496 | 5,617 | 5,522 | 5,595 | 5,330 | 27,773 | 22,064 | 20,563 |
Net Income | $ 3,027 | $ 1,021 | $ 1,486 | $ 1,637 | $ 1,828 | $ 2,014 | $ 1,833 | $ 1,658 | $ 7,171 | $ 7,333 | $ 6,168 |
Basic Earnings Per Share | $ 0.44 | $ 0.28 | $ 0.41 | $ 0.45 | $ 0.51 | $ 0.55 | $ 0.51 | $ 0.46 | $ 1.58 | $ 2.03 | $ 1.70 |
Fully Diluted Earnings Per Share | $ 0.44 | $ 0.28 | $ 0.41 | $ 0.45 | $ 0.50 | $ 0.55 | $ 0.51 | $ 0.46 | $ 1.58 | $ 2.02 | $ 1.70 |
Quarterly Financial Data (Una_4
Quarterly Financial Data (Unaudited) (Details Narrative) | May 31, 2018 |
Quarterly Financial Information Disclosure [Abstract] | |
Stock dividend paid | 5.00% |