Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 28, 2019 | Jun. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | ORRSTOWN FINANCIAL SERVICES INC | ||
Entity Central Index Key | 0000826154 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | ORRF | ||
Amendment Flag | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding (in shares) | 9,481,969 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 207.4 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and due from banks | $ 26,156 | $ 21,734 |
Interest-bearing deposits with banks | 45,664 | 8,073 |
Federal funds sold | 16,995 | 0 |
Cash and cash equivalents | 88,815 | 29,807 |
Restricted investments in bank stocks | 10,842 | 9,997 |
Securities available for sale | 465,844 | 415,308 |
Loans held for sale | 3,340 | 6,089 |
Loans | 1,247,657 | 1,010,012 |
Less: Allowance for loan losses | (14,014) | (12,796) |
Net loans | 1,233,643 | 997,216 |
Premises and equipment, net | 38,201 | 34,809 |
Cash surrender value of life insurance | 41,327 | 33,570 |
Goodwill | 12,592 | 719 |
Other intangible assets, net | 3,910 | 356 |
Accrued interest receivable | 5,927 | 5,048 |
Other assets | 29,947 | 25,930 |
Total assets | 1,934,388 | 1,558,849 |
Deposits: | ||
Deposits: | 204,843 | 162,343 |
Interest-bearing | 1,353,913 | 1,057,172 |
Total deposits | 1,558,756 | 1,219,515 |
Short-term borrowings | 64,069 | 93,576 |
Long-term debt | 83,450 | 83,815 |
Subordinated Debt | 31,859 | 0 |
Accrued interest and other liabilities | 22,821 | 17,178 |
Total liabilities | 1,760,955 | 1,414,084 |
Shareholders’ Equity | ||
Preferred stock, $1.25 par value per share; 500,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, no par value | 491 | 435 |
Additional paid—in capital | 151,678 | 125,458 |
Retained earnings | 24,472 | 16,042 |
Accumulated other comprehensive income (loss) | (2,972) | 2,845 |
Treasury stock—common, 9,031 and 817 shares, at cost | (236) | (15) |
Total shareholders’ equity | 173,433 | 144,765 |
Total liabilities and shareholders’ equity | $ 1,934,388 | $ 1,558,849 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 1.25 | $ 1.25 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, no par value | $ 0 | $ 0 |
Common stock, stated value (in dollars per share) | $ 0.05205 | $ 0.05205 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 9,439,255 | 8,347,856 |
Common stock, shares outstanding | 9,430,224 | 8,347,039 |
Treasury stock, shares | 9,031 | 817 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Interest income | |||
Loans | $ 49,802 | $ 40,185 | $ 33,916 |
Investment securities- taxable | 10,858 | 7,478 | 6,012 |
Investment securities - tax-exempt | 3,850 | 3,134 | 1,826 |
Short term investments | 327 | 218 | 208 |
Total interest income | 64,837 | 51,015 | 41,962 |
Interest expense | |||
Deposits | 10,185 | 6,134 | 4,811 |
Short-term borrowings | 1,577 | 784 | 187 |
Long-term debt | 1,632 | 726 | 419 |
Subordinated notes | 73 | 0 | 0 |
Total interest expense | 13,467 | 7,644 | 5,417 |
Net interest income | 51,370 | 43,371 | 36,545 |
Provision for loan losses | 800 | 1,000 | 250 |
Net interest income after provision for loan losses | 50,570 | 42,371 | 36,295 |
Noninterest income | |||
Service charges on deposit accounts | 6,054 | 5,675 | 5,445 |
Other service charges, commissions and fees | 1,737 | 1,008 | 994 |
Trust and investment management income | 6,576 | 6,400 | 5,091 |
Brokerage income | 2,035 | 1,896 | 1,933 |
Mortgage banking activities | 2,663 | 2,919 | 3,412 |
Income from life insurance | 1,463 | 1,109 | 1,099 |
Other income | 320 | 190 | 345 |
Investment securities gains | 1,006 | 1,190 | 1,420 |
Total noninterest income | 21,854 | 20,387 | 19,739 |
Noninterest expenses | |||
Salaries and employee benefits | 32,524 | 30,145 | 26,370 |
Occupancy | 3,084 | 2,806 | 2,491 |
Furniture and equipment | 4,079 | 3,434 | 3,335 |
Data processing | 2,674 | 2,271 | 2,378 |
Telephone and communication | 753 | 647 | 740 |
Automated teller and interchange fees | 806 | 767 | 748 |
Advertising and bank promotions | 1,592 | 1,600 | 1,717 |
FDIC insurance | 681 | 606 | 775 |
Legal fees | 413 | 802 | 850 |
Other professional services | 1,434 | 1,571 | 1,332 |
Directors' compensation | 984 | 996 | 969 |
Real estate owned | 97 | 69 | 239 |
Taxes other than income | 1,012 | 866 | 767 |
Intangible asset amortization | 286 | 102 | 99 |
Regulatory settlement | 0 | 0 | 1,000 |
Merger related | 3,197 | 0 | 0 |
Other operating expenses | 4,363 | 3,648 | 4,330 |
Total noninterest expenses | 57,979 | 50,330 | 48,140 |
Income before income tax expense | 14,445 | 12,428 | 7,894 |
Income tax expense | 1,640 | 4,338 | 1,266 |
Net income | $ 12,805 | $ 8,090 | $ 6,628 |
Per share information: | |||
Basic earnings per share (in dollars per share) | $ 1.53 | $ 1 | $ 0.82 |
Diluted earnings per share (in dollars per share) | 1.50 | 0.98 | 0.81 |
Dividends per share (in dollars per share) | $ 0.51 | $ 0.42 | $ 0.35 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 12,805 | $ 8,090 | $ 6,628 |
Other comprehensive income (loss), net of tax: | |||
Unrealized holding gains (losses) on securities available for sale arising during the period | (6,359) | 6,557 | (2,190) |
Reclassification adjustment for gains realized in net income | (1,006) | (1,190) | (1,420) |
Net unrealized gains (losses) | (7,365) | 5,367 | (3,610) |
Tax effect | 1,548 | (1,586) | 1,246 |
Total other comprehensive income (loss), net of tax and reclassification adjustments | (5,817) | 3,781 | (2,364) |
Total comprehensive income | $ 6,988 | $ 11,871 | $ 4,264 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Beginning balance at Dec. 31, 2015 | $ 133,061 | $ 435 | $ 124,317 | $ 7,939 | $ 1,199 | $ (829) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 6,628 | 0 | 0 | 6,628 | 0 | 0 |
Total other comprehensive income (loss), net of taxes | (2,364) | 0 | 0 | 0 | (2,364) | 0 |
Cash dividends | (2,898) | 0 | 0 | (2,898) | 0 | 0 |
Share-based compensation plans: | ||||||
Issuance of stock, including compensation expense | 1,063 | 2 | 618 | 0 | 0 | 443 |
Acquisition of treasury stock | (631) | 0 | 0 | 0 | 0 | (631) |
Ending balance at Dec. 31, 2016 | 134,859 | 437 | 124,935 | 11,669 | (1,165) | (1,017) |
Increase (Decrease) in Stockholders' Equity | ||||||
Reclassification of disproportionate tax effects from accumulated other comprehensive income (loss) to retained earnings | 0 | |||||
Net income | 8,090 | 0 | 0 | 8,090 | 0 | 0 |
Total other comprehensive income (loss), net of taxes | 3,781 | 0 | 0 | 0 | 3,781 | 0 |
Cash dividends | (3,488) | 0 | 0 | (3,488) | 0 | 0 |
Share-based compensation plans: | ||||||
Issuance of stock, including compensation expense | 1,523 | (2) | 523 | 0 | 0 | 1,002 |
Ending balance at Dec. 31, 2017 | 144,765 | 435 | 125,458 | 16,042 | 2,845 | (15) |
Increase (Decrease) in Stockholders' Equity | ||||||
Reclassification of disproportionate tax effects from accumulated other comprehensive income (loss) to retained earnings | 0 | 0 | 0 | (229) | 229 | 0 |
Issuance of common shares to acquire Mercersburg Financial Corporation | 24,998 | |||||
Net income | 12,805 | 0 | 0 | 12,805 | 0 | 0 |
Total other comprehensive income (loss), net of taxes | (5,817) | 0 | 0 | 0 | (5,817) | 0 |
Cash dividends | (4,375) | 0 | 0 | (4,375) | 0 | 0 |
Share-based compensation plans: | ||||||
Issuance of stock, including compensation expense | 1,002 | 1 | 1,222 | 0 | 0 | (221) |
Ending balance at Dec. 31, 2018 | 173,433 | 491 | $ 151,678 | 24,472 | (2,972) | (236) |
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common shares to acquire Mercersburg Financial Corporation | $ 25,053 | $ 55 | $ 0 | $ 0 | $ 0 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends per share (in usd per share) | $ 0.51 | $ 0.42 | $ 0.35 |
Shares of common stock issued for acquisition (in shares) | 1,052,635 | 0 | 0 |
Issuance of stock including compensation expense (in shares) | 38,764 | 4,421 | 22,956 |
Issuance of stock, compensation expense | $ 1,483 | $ 1,386 | $ 958 |
Issuance of treasury stock, shares | 8,214 | 56,885 | 25,834 |
Issuance of stock through dividend reinvestment plan (in shares) | 0 | 0 | 0 |
Acquisition of treasury stock (in shares) | 0 | 0 | 35,648 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities | |||
Net income | $ 12,805 | $ 8,090 | $ 6,628 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Net premium amortization (discount accretion) | 1,406 | 4,034 | 5,295 |
Depreciation and amortization expense | 3,642 | 3,265 | 2,951 |
Provision for loan losses | 800 | 1,000 | 250 |
Share-based compensation | 1,493 | 1,386 | 958 |
Gain on sales of loans originated for sale | (2,144) | (2,447) | (2,998) |
Mortgage loans originated for sale | (90,305) | (104,512) | (108,632) |
Proceeds from sales of loans originated for sale | 94,727 | 103,131 | 114,139 |
Gain on sale of portfolio loans | (291) | (32) | 0 |
Net gain on disposal of OREO | (108) | (18) | (182) |
Writedown of OREO | 24 | 4 | 183 |
Net (gain) loss on disposal of premises and equipment | 12 | (18) | 147 |
Deferred income taxes | 543 | 3,078 | (232) |
Investment securities gains | (1,006) | (1,190) | (1,420) |
Income from life insurance | (1,463) | (1,109) | (1,099) |
Increase in accrued interest receivable | (879) | (376) | (827) |
Increase in accrued interest payable and other liabilities | 2,696 | 2,012 | 561 |
Other, net | 535 | 52 | (135) |
Net cash provided by operating activities | 22,487 | 16,350 | 15,587 |
Cash flows from investing activities | |||
Proceeds from sale of AFS securities | 156,364 | 162,320 | 64,742 |
Maturities, repayments and calls of AFS securities | 18,373 | 28,768 | 30,192 |
Purchases of AFS securities | (226,014) | (203,719) | (108,448) |
Net cash and cash equivalents received from acquisition | 12,407 | 0 | 0 |
Net (purchases) redemptions of restricted investments in bank stocks | (592) | (2,027) | 750 |
Net increase in loans | (99,828) | (130,791) | (108,509) |
Proceeds from sales of portfolio loans | 3,589 | 2,195 | 5,100 |
Purchases of bank premises and equipment | (4,791) | (2,653) | (13,369) |
Proceeds from disposal of OREO | 1,413 | 541 | 1,090 |
Purchases of bank owned life insurance | (900) | (600) | 0 |
Death benefit proceeds from life insurance contracts | 576 | 0 | 0 |
Other | 7 | 74 | (439) |
Net cash used in investing activities | (139,396) | (145,892) | (128,891) |
Cash flows from financing activities | |||
Net increase in deposits | 178,798 | 67,063 | 120,285 |
Net increase (decrease) in borrowings with original maturities less than 90 days | (14,507) | (34,288) | 18,708 |
Proceeds from other short-term borrowings | 25,000 | 70,000 | 0 |
Payments on other short-term borrowings | (40,000) | (30,000) | (20,000) |
Proceeds from long-term debt | 0 | 80,000 | 0 |
Payments on long-term debt | (365) | (20,348) | (332) |
Proceeds from subordinated notes, net of issuance costs | 31,857 | 0 | 0 |
Dividends paid | (4,375) | (3,488) | (2,898) |
Acquisition of treasury stock | 0 | 0 | (631) |
Treasury shares repurchased for employee taxes associated with restricted stock vesting | (651) | 0 | 0 |
Proceeds from issuance of stock for option exercises and employee stock purchase plan | 160 | 137 | 105 |
Net cash provided by financing activities | 175,917 | 129,076 | 115,237 |
Net increase (decrease) in cash and cash equivalents | 59,008 | (466) | 1,933 |
Cash and cash equivalents at beginning of year | 29,807 | 30,273 | 28,340 |
Cash and cash equivalents at end of year | 88,815 | 29,807 | 30,273 |
Supplemental disclosure of cash flow information [Abstract] | |||
Interest | 12,930 | 7,586 | 5,346 |
Income taxes | 60 | 1,638 | 1,300 |
Supplemental schedule of noncash investing and financing Activities [Abstract] | |||
Other real estate acquired in settlement of loans | 539 | 1,007 | 688 |
Premises And Equipment Transferred To Held For Sale | $ 1,003 | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES See the Glossary of Defined Terms at the beginning of this Report for terms used throughout the consolidated financial statements and related notes of this Form 10-K. Nature of Operations – Orrstown Financial Services, Inc. and subsidiaries is a financial holding company that operates Orrstown Bank, a commercial bank with banking and financial advisory offices in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry and York Counties, Pennsylvania, and in Washington County, Maryland and Wheatland Advisors, Inc., a registered investment advisor non-bank subsidiary, headquartered in Lancaster County, Pennsylvania. The Company operates in the community banking segment and engages in lending activities, including commercial, residential, commercial mortgages, construction, municipal, and various forms of consumer lending, and deposit services, including checking, savings, time, and money market deposits. The Company also provides fiduciary services, investment advisory, insurance and brokerage services. The Company and the Bank are subject to regulation by certain federal and state agencies and undergo periodic examinations by such regulatory authorities. Basis of Presentation – The accompanying consolidated financial statements include the accounts of Orrstown Financial Services, Inc. and its wholly owned subsidiaries, the Bank and Wheatland. The accounting and reporting policies of the Company conform to GAAP and, where applicable, to accounting and reporting guidelines prescribed by bank regulatory authorities. All significant intercompany transactions and accounts have been eliminated. Certain reclassifications have been made to prior year amounts to conform with current year classifications. In October 2018, the Company acquired Mercersburg Financial Corporation and its wholly-owned subsidiary, First Community Bank of Mercersburg. The results of operations and assets acquired and liabilities assumed are included only from the date of acquisition. The comparability of the results of operations for the year ended December 31, 2018, to 2017 and 2016 have been impacted by the acquisition. The Company's management has evaluated all activity of the Company and concluded that subsequent events are properly reflected in the Company's consolidated financial statements and notes as required by GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change include the determination of the ALL and those used in valuation methodologies in areas with no observable market, such as loans, deposits, borrowings, goodwill, core deposit and other intangible assets, other assets and liabilities obtained or assumed in business combinations. Concentration of Credit Risk – The Company grants commercial, residential, construction, municipal, and various forms of consumer lending to customers primarily in its market area of Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry and York Counties, Pennsylvania, and in Washington County, Maryland. Therefore the Company's exposure to credit risk is significantly affected by changes in the economy in those areas. Although the Company maintains a diversified loan portfolio, a significant portion of its customers’ ability to honor their contracts is dependent upon economic sectors for commercial real estate, including office space, retail strip centers, sales finance, sub-dividers and developers, and multi-family, hospitality, and residential building operators. Management evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if collateral is deemed necessary by the Company upon the extension of credit, is based on management’s credit evaluation of the customer. Collateral held varies, but generally includes real estate and equipment. The types of securities the Company invests in are included in Note 3, Securities Available for Sale, and the types of lending the Company engages in are included in Note 4, Loans and Allowance for Loan Losses. Cash and Cash Equivalents – Cash and cash equivalents include cash, balances due from banks, federal funds sold and interest-bearing deposits due on demand, all of which have original maturities of 90 days or less. Net cash flows are reported for customer loan and deposit transactions, loans held for sale, redemption (purchases) of restricted investments in bank stocks, and short-term borrowings. Cash and cash equivalents include amounts that the Company is required to maintain on hand or on deposit at the Federal Reserve Bank to meet certain regulatory reserve balance requirements. At December 31, 2018 and 2017, the Company had reserve requirements of $10,983,000 and $1,395,000. Balances with correspondent banks may, at times, exceed federally insured limits. The Company considers this to be a normal business risk and reviews correspondent banks' financial condition on a quarterly basis. Restricted Investments in Bank Stocks – Restricted investments in bank stocks consist of Federal Reserve Bank of Philadelphia stock, FHLB of Pittsburgh stock and Atlantic Community Bankers Bank stock. Federal law requires a member institution of the district Federal Reserve Bank and FHLB to hold stock according to predetermined formulas. Atlantic Community Bankers Bank requires its correspondent banking institutions to hold stock as a condition of membership. The restricted investment in bank stocks is carried at cost. Quarterly, management evaluates the bank stocks for impairment based on assessment of the ultimate recoverability of cost rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of cost is influenced by criteria such as operating performance, liquidity, funding and capital positions, stock repurchase history, dividend history, and impact of legislative and regulatory changes. Securities – The Company typically classifies debt securities as available for sale on the date of purchase. At December 31, 2018 and 2017 the Company had no held to maturity or trading securities. AFS securities are reported at fair value. Interest income and dividends are recognized in interest income on an accrual basis. Purchase premiums and discounts on debt securities are amortized to interest income using the interest method over the terms of the securities and approximate the level yield method. Changes in unrealized gains and losses, net of related deferred taxes, for AFS securities are recorded in AOCI. Realized gains and losses on securities are recorded on the trade date using the specific identification method and are included in noninterest income. AFS securities include investments that management intends to use as part of its asset/liability management strategy. Securities may be sold in response to changes in interest rates, changes in prepayment rates and other factors. The Company does not have the intent to sell any of its AFS securities that are in an unrealized loss position and it is more likely than not that the Company will not be required to sell these securities before recovery of their amortized cost. Management evaluates securities for OTTI on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components: OTTI related to other factors, which is recognized in OCI, and the remaining OTTI, which is recognized in earnings. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. The Company’s securities are exposed to various risks, such as interest rate risk, market risk, and credit risk. Due to the level of risk associated with certain investments and the level of uncertainty related to changes in the value of investments, it is at least reasonably possible that changes in risks in the near term would materially affect investment assets reported in the consolidated financial statements. Loans Held for Sale – Loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or fair value. Gains and losses on loan sales (sales proceeds minus carrying value) are recorded in noninterest income. Loans – Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are reported at their outstanding unpaid principal balances adjusted for charge-offs, the ALL, and any deferred fees or costs on originated loans. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and amortized as a yield adjustment over the respective term of the loan. For purchased loans that are not deemed impaired at the acquisition date, premiums and discounts are amortized or accreted as adjustments to interest income using the effective yield method. For all classes of loans, the accrual of interest income on loans, including impaired loans, ceases when principal or interest is past due 90 days or more or immediately if, in the opinion of management, full collection is unlikely. Interest will continue to accrue on loans past due 90 days or more if the collateral is adequate to cover principal and interest, and the loan is in the process of collection. Interest accrued, but not collected, at the date of placement on nonaccrual status, is reversed and charged against current interest income, unless fully collateralized. Subsequent payments received are either applied to the outstanding principal balance or recorded as interest income, depending upon management’s assessment of the ultimate collectability of principal. Loans are returned to accrual status, for all loan classes, when all the principal and interest amounts contractually due are brought current, the loan has performed in accordance with the contractual terms of the note for a reasonable period of time, generally six months, and the ultimate collectability of the total contractual principal and interest is reasonably assured. Past due status is based on contractual terms of the loan. Loans, the terms of which are modified, are classified as TDRs if a concession was granted in connection with the modification, for legal or economic reasons, related to the debtor’s financial difficulties. Concessions granted under a TDR typically involve a temporary deferral of scheduled loan payments, an extension of a loan’s stated maturity date, a temporary reduction in interest rates, or granting of an interest rate below market rates given the risk of the transaction. If a modification occurs while the loan is on accruing status, it will continue to accrue interest under the modified terms. Nonaccrual TDRs may be restored to accrual status if scheduled principal and interest payments, under the modified terms, are current for six months after modification, and the borrower continues to demonstrate its ability to meet the modified terms. TDRs are evaluated individually for impairment on a quarterly basis including monitoring of performance according to their modified terms. Allowance for Loan Losses – The ALL is evaluated on at least a quarterly basis, as losses are estimated to be probable and incurred, and, if deemed necessary, is increased through a provision for loan losses charged to earnings. Loan losses are charged against the ALL when management determines that all or a portion of the loan is uncollectible. Recoveries on previously charged-off loans are credited to the ALL when received. The ALL is allocated to loan portfolio classes on a quarterly basis, but the entire balance is available to cover losses from any of the portfolio classes when those losses are confirmed. Management uses internal policies and bank regulatory guidance in periodically evaluating loans for collectability and incorporates historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. See Note 4, Loans and Allowance for Loan Losses, for additional information. Acquired Loans - Loans acquired in connection with business combinations are recorded at fair value with no carryover of any allowance for loan losses. Fair value of the loans involves estimating the amount and timing of principal and interest cash flows expected to be collected on the loans and discounting those cash flows at a market rate of interest. The excess of cash flows expected at acquisition over the estimated fair value is referred to as the accretable discount and is recognized into interest income over the remaining life of the loan. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the nonaccretable discount. These loans are accounted for under the Accounting Standard Codification (“ASC”) 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. The nonaccretable discount includes estimated future credit losses expected to be incurred over the life of the loan. Subsequent decreases in expected cash flows will require us to evaluate the need for an addition to the allowance for loan losses. Subsequent improvement in expected cash flows will result in the reversal of a corresponding amount of the nonaccretable discount, which we will then reclassify as accretable discount to be recognized into interest income over the remaining life of the loan. Loans acquired through business combinations that do meet the specific criteria of ASC 310-30 are individually evaluated each period to analyze expected cash flows. To the extent that the expected cash flows of a loan have decreased due to credit deterioration, we establish an allowance. Loans acquired through business combinations that do not meet the specific criteria of ASC 310-30 are accounted for under ASC 310-20. These loans are initially recorded at fair value, and include credit and interest rate marks associated with acquisition accounting adjustments. Purchase premiums or discounts are subsequently amortized as an adjustment to yield over the estimated contractual lives of the loans. There is no allowance for loan losses established at the acquisition date for acquired performing loans. An allowance for loan losses is recorded for any credit deterioration in these loans subsequent to acquisition. Acquired loans that met the criteria for impaired or nonaccrual of interest prior to the acquisition may be considered performing upon acquisition, regardless of whether the customer is contractually delinquent if we expect to fully collect the new carrying value (i.e., fair value) of the loans. As such, we may no longer consider the loan to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable discount. In addition, charge-offs on such loans would be first applied to the nonaccretable difference portion of the fair value adjustment. Loan Commitments and Related Financial Instruments – Financial instruments include off-balance sheet credit commitments issued to meet customer financing needs, such as commitments to make loans and commercial letters of credit. These financial instruments are recorded when they are funded. The face amount represents the exposure to loss, before considering customer collateral or ability to repay. The Company maintains a reserve for probable losses on off-balance sheet commitments which is included in Other Liabilities. Loans Serviced – The Bank administers secondary market mortgage programs available through the FHLB and the Federal National Mortgage Association and offers residential mortgage products and services to customers. The Bank originates single-family residential mortgage loans for immediate sale in the secondary market and retains the servicing of those loans. At December 31, 2018 and 2017, the balance of loans serviced for others totaled $360,322,000 and $334,802,000. Transfers of Financial Assets – Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Cash Surrender Value of Life Insurance – The Company has purchased life insurance policies on certain employees. Life insurance is recorded at the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. Premises and Equipment – Buildings, improvements, equipment, furniture and fixtures are carried at cost less accumulated depreciation and amortization. Land is carried at cost. Depreciation and amortization has been provided generally on the straight-line method and is computed over the estimated useful lives of the various assets as follows: buildings and improvements, including leasehold improvements – 10 to 40 years; and furniture and equipment – 3 to 15 years. Leasehold improvements are amortized over the shorter of the lease term or the indicated life. Repairs and maintenance are charged to operations as incurred, while major additions and improvements are capitalized. Gain or loss on retirement or disposal of individual assets is recorded as income or expense in the period of retirement or disposal. Goodwill and Other Intangible Assets – Goodwill is calculated as the purchase premium, if any, after adjusting for the fair value of net assets acquired in purchase transactions. Goodwill is not amortized but is reviewed for potential impairment on at least an annual basis, with testing between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit. Other intangible assets represent purchased assets that can be distinguished from goodwill because of contractual or other legal rights. The Company’s other intangible assets have finite lives and are amortized on either an accelerated amortization method or straight line basis over their estimated lives, generally 10 years for deposit premiums and 10 to 15 years for other customer relationship intangibles. Mortgage Servicing Rights – The estimated fair value of MSRs related to loans sold and serviced by the Company is recorded as an asset upon the sale of such loans. MSRs are amortized as a reduction to servicing income over the estimated lives of the underlying loans. MSRs are evaluated periodically for impairment by comparing the carrying amount to estimated fair value. Fair value is determined periodically through a discounted cash flows valuation performed by a third party. Significant inputs to the valuation include expected servicing income, net of expense, the discount rate and the expected life of the underlying loans. To the extent the amortized cost of the MSRs exceeds their estimated fair values, a valuation allowance is established for such impairment through a charge against servicing income on the consolidated statements of income. If the Company determines, based on subsequent valuations, that the impairment no longer exists or is reduced, the valuation allowance is reduced through a credit to earnings. MSRs totaled $3,180,000 and $2,897,000 at December 31, 2018 and December 31, 2017, and are included in Other Assets. Foreclosed Real Estate – Real estate acquired through foreclosure or other means is initially recorded at the fair value of the related real estate collateral at the transfer date less estimated selling costs, and subsequently at the lower of its carrying value or fair value less estimated costs to sell. Fair value is determined based on an independent third party appraisal of the property or, when appropriate, a recent sales offer. Costs to maintain such real estate are expensed as incurred. Costs that significantly improve the value of the properties are capitalized. Real estate acquired through foreclosure or other means totaled $1,133,000 and $961,000 at December 31, 2018 and 2017 and is included in Other Assets. Investments in Real Estate Partnerships – The Company has a 99% limited partner interest in several real estate partnerships in central Pennsylvania. These investments are affordable housing projects, which entitle the Company to tax deductions and credits that expire through 2025. The Company accounts for its investments in affordable housing projects under the proportional amortization method when the criteria are met, which is limited to one investment at December 31, 2018. Other investments are accounted for under the equity method of accounting. The investment in these real estate partnerships, included in Other Assets, totaled $3,872,000 and $4,416,000 at December 31, 2018 and 2017, of which $1,562,000 and $1,776,000 are accounted for under the proportional amortization method. Equity method losses totaled $331,000, $277,000 and $350,000 for the years ended December 31, 2018, 2017 and 2016 and are included in other noninterest income. Proportional amortization method losses totaled $214,000, $217,000 and $191,000 for the years ended December 31, 2018, 2017 and 2016 and are included in income tax expense. During 2018, 2017 and 2016, the Company recognized federal tax credits from these projects totaling $578,000, $1,010,000 and $736,000, which are included in income tax expense. Advertising – The Company expenses advertising as incurred. Advertising expense totaled $418,000, $631,000 and $763,000 for the years ended December 31, 2018, 2017 and 2016. Repurchase Agreements – The Company enters into agreements under which it sells securities subject to an obligation to repurchase the same or similar securities which are included in short-term borrowings. Under these agreements, the Company may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Company to repurchase the assets. As a result, these repurchase agreements are accounted for as collateralized financing arrangements (i.e., secured borrowings) and not as a sale and subsequent repurchase of securities. The obligation to repurchase the securities is reflected as a liability in the Company’s consolidated balance sheets, while the securities underlying the repurchase agreements remaining are reflected in AFS securities. The repurchase obligation and underlying securities are not offset or netted as the Company does not enter into reverse repurchase agreements. The right of setoff for a repurchase agreement resembles a secured borrowing, whereby the collateral would be used to settle the fair value of the repurchase agreement should the Company be in default (e.g., fail to make an interest payment to the counterparty). For the repurchase agreements, the collateral is held by the Company in a segregated custodial account under a third party agreement. Repurchase agreements are secured by GSE MBSs and mature overnight. Share Compensation Plans – The Company has share compensation plans that cover employees and non-employee directors. Compensation expense relating to share-based payment transactions is measured based on the grant date fair value of the share award, including a Black-Scholes model for stock options. Compensation expense for all share awards is calculated and recognized over the employees’ or non-employee directors' service period, generally defined as the vesting period. Income Taxes – Income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of enacted tax law to taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more likely than not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more likely than not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment. Deferred tax assets are reduced by a valuation allowance when, based on the weight of available evidence, it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company recognizes interest and penalties, if any, on income taxes as a component of income tax expense. 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. Treasury Stock – Common stock shares repurchased are recorded as treasury stock at cost. Earnings Per Share – Basic earnings per share represents income available to common stockholders divided by the weighted average number of common shares outstanding during the period. Restricted stock awards are included in weighted average common shares outstanding as they are earned. Diluted earnings per share includes additional common shares that would have been outstanding if dilutive potential common shares had been issued. Potential common shares that may be issued by the Company relate solely to outstanding stock options and restricted stock awards and are determined using the treasury stock method. Treasury shares are not deemed outstanding for earnings per share calculations. Comprehensive Income – Comprehensive income consists of net income and OCI. OCI is limited to unrealized gains (losses) on securities available for sale for all years presented. Unrealized gains (losses) on securities available for sale, net of tax, was the sole component of AOCI at December 31, 2018 and 2017. Fair Value – Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in the Fair Value note to the consolidated financial statements. Fair value estimates involve uncertainties and matters of significant judgment. Changes in assumptions or in market conditions could significantly affect the estimates. Segment Reporting – The Company operates in one significant segment – Community Banking. The Company’s non-community banking activities, principally related to Wheatland, are insignificant to the consolidated financial statements. Recent Accounting Pronouncements - ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The update implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On January 1, 2018, the Company adopted ASU 2014-09 and all subsequent amendments (collectively “ASC 606”). The majority of the Company's revenue comes from interest income, including loans and securities, that are outside the scope of ASC 606. The Company's services that fall within the scope of ASC 606 are presented within noninterest income on the consolidated statements of income and are recognized as revenue as the Company satisfies its obligation to the customer. Services within the scope of ASC 606 include service charges on deposit accounts, income from fiduciary investment management and brokerage activities and interchange fees from service charges on ATM and debit card transactions. ASC 606 did not result in a change to the accounting for any in-scope revenue streams; as such, no cumulative effect adjustment was recorded. ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The update enhances the reporting model for financial instruments to provide users of financial statements with more decision-useful information by updating certain aspects of recognition, measurement, presentation and disclosure of financial instruments. Among other changes, the update requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, and clarifies that entities should evaluate the need for a valuation allowance on a deferred tax asset related to available for sale securities in combination with the entities' other deferred tax assets. For public companies, this update was effective for interim and annual periods beginning after December 15, 2017. Our adoption of ASU 2016-01 on January 1, 2018, did not have a material effect on our consolidated financial condition or results of operations. Upon adoption, the fair value of the Company’s loan portfolio is now presented using an exit price method. Also, the Company is no longer required to disclose the methodologies used for estimating fair value of financial assets and liabilities that are not measured at fair value on a recurring or nonrecurring basis. The remaining requirements of this update did not have a material impact on the Company’s consolidated financial statements. ASU 2016-02, Leases (Topic 842). The guidance in the update supersedes the requirements in ASC Topic 840, Leases. The guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for leases with terms of more than 12 months. For public companies, this update will be effective for interim and annual periods beginning after December 15, 2018. In July 2018, the FASB issued ASU No. 2018-11, Targeted Improvements, which amends ASC 842, Leases to provide for an adoption option that will not require earlier periods to be restated at the adoption date. The Company currently leases land and space for certain branch offices under operating leases that will result in recognition of lease assets and lease liabilities on the consolidated balance sheets under the updates. The Company adopted this guidance effective January 1, 2019 and recorded a right-of-use asset of approximately $7,000,000 and lease |
MERGERS AND ACQUISITIONS
MERGERS AND ACQUISITIONS | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
MERGERS AND ACQUISITIONS | MERGERS AND ACQUISITIONS Mercersburg Financial Corporation On October 1, 2018, we acquired 100% of the outstanding common shares of Mercersburg Financial Corporation and its wholly-owned subsidiary, First Community Bank of Mercersburg, headquartered in Mercersburg, Pennsylvania. We acquired Mercersburg to further expand our operations in Franklin County, Pennsylvania. Pursuant to the merger agreement, we issued 1,052,635 shares of our common stock and paid $4,866,000 in cash for all outstanding shares of Mercersburg stock. In accordance with the merger agreement, each outstanding share of Mercersburg common stock was converted into 1.5291 shares of the Company's common stock and $40.00 in cash. Based on our $23.80 closing stock price on Friday, September 28, 2018, the consideration paid to acquire Mercersburg totaled $29,919,000. The fair value of assets acquired, excluding goodwill, totaled $181,430,000, including loans totaling $141,103,000 and investment securities available for sale totaling $7,352,000. The fair value of liabilities assumed totaled $163,384,000, including deposits totaling $160,433,000. Goodwill represents consideration transferred in excess of the fair value of the net assets acquired. At December 31, 2018, the Company recognized $11,873,000 in initial goodwill associated with the Mercersburg acquisition. The goodwill resulting from the acquisition represents the value expected from the expansion of our market in south central Pennsylvania and the enhancement of our operations through customer synergies and efficiencies, thereby providing enhanced customer service. Goodwill acquired in the Mercersburg acquisition is not deductible for tax purposes. The Mercersburg acquisition was accounted for using the acquisition method of accounting and, accordingly, purchased assets, including identifiable intangible assets, and assumed liabilities were recorded at their respective acquisition date fair values. The fair value measurements of assets acquired and liabilities assumed are subject to refinement for up to one year after the closing date of the acquisition as additional information relative to closing date fair values become available. The Company continues to finalize the fair values of loans and, as a result, the fair value adjustment is preliminary and may change as information becomes available. The following table summarizes the consideration paid for Mercersburg and the estimated fair values of the assets acquired and liabilities assumed recognized at the acquisition date: (Dollars in thousands) Fair value of consideration transferred: Cash $ 4,866 Common stock issued 25,053 Total consideration transferred $ 29,919 Estimated fair values of assets acquired and (liabilities) assumed: Cash and cash equivalents $ 17,273 Securities available for sale 7,352 Loans 141,103 Premises and equipment 2,232 Core deposit intangible 3,840 Goodwill 11,873 Cash surrender value of life insurance 6,252 Deferred tax asset, net 1,323 Other assets 2,055 Deposits (160,433) Other liabilities (2,951) $ 29,919 The determination of estimated fair values of the acquired loans required the Company to make certain estimates about discount rates, future expected cash flows, market conditions and other future events that are highly subjective in nature. Based on such factors as past due status, nonaccrual status, bankruptcy status, and credit risk ratings, the acquired loans were divided into loans with evidence of credit quality deterioration, which are accounted for under ASC 310-30 (purchased credit impaired), and loans that do not meet this criteria, which are accounted for under ASC 310-20 (purchased non-impaired). Expected cash flows, both principal and interest, were estimated based on key assumptions covering such factors as prepayments, default rates and severity of loss given default. These assumptions were developed using both Mercersburg's historical experience and the portfolio characteristics as of the acquisition date as well as available market research. The fair value estimates for acquired loans were based on the amount and timing of expected principal, interest and other cash flows, including expected prepayments, discounted at prevailing market interest rates applicable to the types of acquired loans, which we considered to be level 3 fair value measurements. Deposit liabilities assumed in the Mercersburg acquisition were segregated into two categories: time-deposits (i.e., deposit accounts with a stated maturity) and demand deposits, both using level 2 fair value measurements. In determining fair value of time deposits, the Company discounted the contractual cash flows of the deposit accounts using prevailing market interest rates for time deposit accounts of similar type and duration. For demand deposits, the acquisition date outstanding balance of the assumed demand deposit accounts approximates fair value. Acquisition date fair values for securities available for sale were determined using Level 1 or Level 2 inputs consistent with the methods discussed further in “Note 18 - Fair Value.” The remaining acquisition date fair values represent either Level 2 fair value measurements or Level 3 fair value measurements (premises and equipment and core deposit intangible). We recognized a core deposit intangible of $3,840,000, which will be amortized using an accelerated method over a 10-year amortization period, consistent with expected future cash flows. Loans acquired with Mercersburg were measured at fair value at the acquisition date with no carryover of any ALL. Loans were segregated into those loans considered to be performing and those considered PCI. The following table presents performing and PCI loans acquired, by loan class, at October 1, 2018. (in thousands) Performing PCI Total Commercial real estate: Owner-occupied $ 10,336 $ 1,800 $ 12,136 Non-owner occupied 4,405 672 5,077 Multi-family 3,005 722 3,727 Acquisition and development: 1-4 family residential construction 878 0 878 Commercial and land development 2,044 269 2,313 Commercial and industrial 22,433 5,696 28,129 Municipal 1,862 0 1,862 Residential mortgage: First lien 75,034 3,103 78,137 Home-equity - term 2,258 23 2,281 Home equity - lines of credit 3,144 0 3,144 Installment and other loans 3,233 186 3,419 Total loans acquired $ 128,632 $ 12,471 $ 141,103 The following table presents the fair value adjustments made to the amortized cost basis of loans acquired at October 1, 2018. (in thousands) Gross amortized cost basis at acquisition $ 149,162 Market rate adjustment (3,464) Credit fair value adjustment on non-credit impaired loans (1,400) Credit fair value adjustment on impaired loans (3,195) Estimated fair value of acquired loans $ 141,103 The market rate adjustment represents the movement in market interest rates, irrespective of credit adjustments, compared to the contractual rates of the acquired loans. The credit adjustment made on non-PCI loans represents the changes in credit quality of the underlying borrowers from loan inception to the acquisition date. The credit adjustment on PCI loans is derived in accordance with ASC 310-30 and represents the portion of the loan balance that has been deemed uncollectible based on our expectations of future cash flows for each respective loan. The following table provides information about acquired PCI loans at October 1, 2018. (in thousands) Contractually required principal and interest at acquisition $ 21,587 Contractual cash flows not expected to be collected (nonaccretable discount) (6,873) Expected cash flows at acquisition 14,714 Interest component of expected cash flows (accretable discount) (2,243) Estimated fair value of acquired PCI loans $ 12,471 Unaudited pro forma net income for the years ended December 31, 2018 and 2017 would have totaled $15,717,000 and $8,929,000, respectively, and revenues would have totaled $92,996,000 and $79,659,000 for the same years, respectively, had the Mercersburg acquisition occurred January 1, 2017. Merger related costs totaling $3,197,000 have been excluded from the unaudited pro forma net income for 2018. Hamilton Bancorp, Inc. On October 23, 2018, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Hamilton Bancorp, Inc., a Maryland corporation ("Hamilton") and the holding company for Hamilton Bank, based in Towson, Maryland. At December 31, 2018, Hamilton reported $496,254,000 in assets, $369,457,000 in loans, $384,171,000 in deposits and 3,416,414 common shares outstanding. The Merger Agreement provides that, subject to the terms and conditions thereof, Hamilton will merge with and into the Company, with the Company as the surviving corporation, and that Hamilton Bank will merge with and into Orrstown Bank, with Orrstown Bank as the surviving bank. The merger is expected to close in the second quarter of 2019, subject to receipt of regulatory approvals, the approval of Hamilton's shareholders, and the satisfaction of other customary closing conditions. The acquisition will introduce the Company's operations into the Greater Baltimore area of Maryland. Pursuant to the Merger Agreement, for each share of Hamilton common stock outstanding as of the effective date, the Company will issue $4.10 in cash, without interest, and 0.54 shares of of the Company's common stock, no par value per share. The cash consideration is subject to reduction based on potential losses, write-downs, or reserves related to certain identified loans. In connection with the Mercersburg and Hamilton acquisitions, we incurred merger related expenses totaling $3,197,000 for the year ended December 31, 2018, which are included in noninterest expenses. The expenses consisted primarily of $1,502,000 of investment banking, legal and consulting fees; $1,065,000 of information systems expense, including canceling of contracts; and $630,000 of other expenses. |
SECURITIES AVAILABLE FOR SALE
SECURITIES AVAILABLE FOR SALE | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
SECURITIES AVAILABLE FOR SALE | SECURITIES AVAILABLE FOR SALE At December 31, 2018 and 2017 all investment securities were classified as AFS. The following table summarizes amortized cost and fair value of AFS securities, and the corresponding amounts of gross unrealized gains and losses recognized in AOCI, at December 31, 2018 and 2017. (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2018 States and political subdivisions $ 144,596 $ 1,919 $ 1,511 $ 145,004 GSE residential CMOs 110,421 332 2,689 108,064 Private label residential CMOs 144 0 1 143 Private label commercial CMOs 75,911 55 921 75,045 Asset-backed and other 138,535 126 1,073 137,588 Totals $ 469,607 $ 2,432 $ 6,195 $ 465,844 December 31, 2017 States and political subdivisions $ 153,803 $ 6,133 $ 478 $ 159,458 GSE residential MBSs 48,600 930 0 49,530 GSE residential CMOs 113,658 296 2,835 111,119 Private label residential CMOs 999 4 0 1,003 Private label commercial CMOs 7,809 0 156 7,653 Asset-backed and other 86,837 133 425 86,545 Totals $ 411,706 $ 7,496 $ 3,894 $ 415,308 The following table summarizes AFS securities with unrealized losses at December 31, 2018 and 2017, aggregated by major security type and length of time in a continuous unrealized loss position. Less Than 12 Months 12 Months or More Total (Dollars in thousands) # of Securities Fair Value Unrealized Losses # of Securities Fair Value Unrealized Losses # of Securities Fair Value Unrealized Losses December 31, 2018 States and political subdivisions 27 $ 46,585 $ 662 6 $ 23,036 $ 849 33 $ 69,621 $ 1,511 GSE residential CMOs 1 18,037 122 7 46,168 2,567 8 64,205 2,689 Private label residential CMOs 1 143 1 0 0 0 1 143 1 Private label commercial CMOs 11 56,499 712 2 6,349 209 13 62,848 921 Asset-backed and other 6 78,900 859 3 10,808 214 9 89,708 1,073 Totals 46 $ 200,164 $ 2,356 18 $ 86,361 $ 3,839 64 $ 286,525 $ 6,195 December 31, 2017 States and political subdivisions 7 $ 24,577 $ 473 1 $ 5,585 $ 5 8 $ 30,162 $ 478 GSE residential CMOs 4 25,155 914 5 37,459 1,921 9 62,614 2,835 Private label commercial CMOs 2 7,653 156 0 0 0 2 7,653 156 Asset-backed and other 6 60,006 425 0 0 0 6 60,006 425 Totals 19 $ 117,391 $ 1,968 6 $ 43,044 $ 1,926 25 $ 160,435 $ 3,894 State and Political Subdivisions. The unrealized losses presented in the table above have been caused by a widening of spreads and/or a rise in interest rates from the time these securities were purchased. Management considers the investment rating, the state of the issuer of the security and other credit support in determining whether the security is OTTI. Because the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell them before recovery of their amortized cost basis, which may be maturity, the Company does not consider these securities to be OTTI at December 31, 2018 or at December 31, 2017. GSE Residential CMOs . The unrealized losses presented in the table above have been caused by a widening of spreads and/or a rise in interest rates from the time these securities were purchased. The contractual terms of these securities do not permit the issuer to settle the securities at a price less than its par value basis. Because the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell them before recovery of their amortized cost basis, which may be maturity, the Company does not consider these securities to be OTTI at December 31, 2018 or at December 31, 2017. Private Label Residential CMOs, Private Label Commercial CMOs and Asset-backed and Other. The unrealized losses presented in the table above have been caused by a widening of spreads and/or a rise in interest rates from the time the securities were purchased. Because the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell them before recovery of their amortized cost basis, which may be maturity, the Company does not consider these securities to be OTTI at December 31, 2018 or at December 31, 2017. The following table summarizes amortized cost and fair value of AFS securities by contractual maturity at December 31, 2018. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately. Available for Sale (Dollars in thousands) Amortized Cost Fair Value Due in one year or less $ 799 $ 800 Due after one year through five years 2,531 2,542 Due after five years through ten years 37,168 37,229 Due after ten years 104,098 104,433 CMOs 186,476 183,252 Asset-backed and other 138,535 137,588 $ 469,607 $ 465,844 The following table summarizes proceeds from sales of AFS securities and gross gains and gross losses for the years ended December 31. (Dollars in thousands) 2018 2017 2016 Proceeds from sale of AFS securities $ 156,364 $ 162,320 $ 64,742 Gross gains 1,681 1,477 1,468 Gross losses 675 287 48 AFS securities with a fair value of $164,233,000 and $319,907,000 at December 31, 2018 and December 31, 2017 were pledged to secure public funds and for other purposes as required or permitted by law. |
LOANS AND ALLOWANCE FOR LOAN LO
LOANS AND ALLOWANCE FOR LOAN LOSSES | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
LOANS AND ALLOWANCE FOR LOAN LOSSES | LOANS AND ALLOWANCE FOR LOAN LOSSES The Company’s loan portfolio is grouped into classes to allow management to monitor the performance by the borrower and to monitor the yield on the portfolio. Consistent with ASU 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Loan Losses, the segments are further broken down into classes to allow for differing risk characteristics within a segment. The risks associated with lending activities differ among the various loan classes and are subject to the impact of changes in interest rates, market conditions of collateral securing the loans, and general economic conditions. All of these factors may adversely impact both the borrower’s ability to repay its loans and associated collateral. The Company has various types of commercial real estate loans, which have differing levels of credit risk. Owner occupied commercial real estate loans are generally dependent upon the successful operation of the borrower’s business, with the cash flows generated from the business being the primary source of repayment of the loan. If the business suffers a downturn in sales or profitability, the borrower’s ability to repay the loan could be in jeopardy. Non-owner occupied and multi-family commercial real estate loans and non-owner occupied residential loans present a different credit risk to the Company than owner occupied commercial real estate loans, as the repayment of the loan is dependent upon the borrower’s ability to generate a sufficient level of occupancy to produce rental income that exceeds debt service requirements and operating expenses. Lower occupancy or lease rates may result in a reduction in cash flows, which hinders the ability of the borrower to meet debt service requirements, and may result in lower collateral values. The Company generally recognizes that greater risk is inherent in these credit relationships as compared to owner occupied loans mentioned above. Acquisition and development loans consist of 1-4 family residential construction and commercial and land development loans. The risk of loss on these loans is largely dependent on the Company’s ability to assess the property’s value at the completion of the project, which should exceed the property’s construction costs. During the construction phase, a number of factors could potentially negatively impact the collateral value, including cost overruns, delays in completing the project, competition, and real estate market conditions which may change based on the supply of similar properties in the area. In the event the collateral value at the completion of the project is not sufficient to cover the outstanding loan balance, the Company must rely upon other repayment sources, including, if any, the guarantors of the project or other collateral securing the loan. Commercial and industrial loans include advances to local and regional businesses for general commercial purposes and include permanent and short-term working capital, machinery and equipment financing, and may be either in the form of lines of credit or term loans. Although commercial and industrial loans may be unsecured to our highest-rated borrowers, the majority of these loans are secured by the borrower’s accounts receivable, inventory and machinery and equipment. In a significant number of these loans, the collateral also includes the business real estate or the business owner’s personal real estate or assets. Commercial and industrial loans present credit exposure to the Company, as they are more susceptible to risk of loss during a downturn in the economy as borrowers may have greater difficulty in meeting their debt service requirements and the value of the collateral may decline. The Company attempts to mitigate this risk through its underwriting standards, including evaluating the creditworthiness of the borrower and, to the extent available, credit ratings on the business. Additionally, monitoring of the loans through annual renewals and meetings with the borrowers are typical. However, these procedures cannot eliminate the risk of loss associated with commercial and industrial lending. Municipal loans consist of extensions of credit to municipalities and school districts within the Company’s market area. These loans generally present a lower risk than commercial and industrial loans, as they are generally secured by the municipality’s full taxing authority, by revenue obligations, or by its ability to raise assessments on its customers for a specific utility. The Company originates loans to its retail customers, including fixed-rate and adjustable first lien mortgage loans with the underlying 1-4 family owner occupied residential property securing the loan. The Company’s risk exposure is minimized in these types of loans through the evaluation of the creditworthiness of the borrower, including credit scores and debt-to-income ratios, and underwriting standards which limit the loan-to-value ratio to generally no more than 80% upon loan origination, unless the borrower obtains private mortgage insurance. Home equity loans, including term loans and lines of credit, present a slightly higher risk to the Company than 1-4 family first liens, as these loans can be first or second liens on 1-4 family owner occupied residential property, but can have loan-to-value ratios of no greater than 90% of the value of the real estate taken as collateral. The creditworthiness of the borrower is considered including credit scores and debt-to-income ratios. Installment and other loans’ credit risk are mitigated through prudent underwriting standards, including evaluation of the creditworthiness of the borrower through credit scores and debt-to-income ratios and, if secured, the collateral value of the assets. These loans can be unsecured or secured by assets the value of which may depreciate quickly or may fluctuate, and may present a greater risk to the Company than 1-4 family residential loans. The following table presents the loan portfolio by segment and class, excluding residential LHFS, at December 31, 2018 and December 31, 2017. (Dollars in thousands) 2018 2017 Commercial real estate: Owner-occupied $ 129,650 $ 116,811 Non-owner occupied 252,794 244,491 Multi-family 78,933 53,634 Non-owner occupied residential 100,367 77,980 Acquisition and development: 1-4 family residential construction 7,385 11,730 Commercial and land development 42,051 19,251 Commercial and industrial 160,964 115,663 Municipal 50,982 42,065 Residential mortgage: First lien 235,296 162,509 Home equity – term 12,208 11,784 Home equity – lines of credit 143,616 132,192 Installment and other loans 33,411 21,902 Total Loans (1) $ 1,247,657 $ 1,010,012 (1) Includes $135,009,000 of acquired loans at December 31, 2018. In order to monitor ongoing risk associated with its loan portfolio and specific loans within the segments, management uses an internal grading system. The first several rating categories, representing the lowest risk to the Bank, are combined and given a “Pass” rating. Management generally follows regulatory definitions in assigning criticized ratings to loans, including "Special Mention," "Substandard," "Doubtful" or "Loss." The Special Mention category includes loans that have potential weaknesses that may, if not monitored or corrected, weaken the asset or inadequately protect the Bank's position at some future date. These assets pose elevated risk, but their weakness does not yet justify a more severe, or classified rating. Substandard loans are classified as they have a well-defined weakness, or weaknesses that jeopardize liquidation of the debt. These loans are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Substandard loans include loans that management has determined not to be impaired, as well as loans considered to be impaired. A Doubtful loan has a high probability of total or substantial loss, but because of specific pending events that may strengthen the asset, its classification as Loss is deferred. Loss loans are considered uncollectible, as the borrowers are often in bankruptcy, have suspended debt repayments, or have ceased business operations. Once a loan is classified as Loss, there is little prospect of collecting the loan’s principal or interest and it is charged-off. The Company has a loan review policy and program which is designed to identify and monitor risk in the lending function. The ERM Committee, comprised of executive officers and loan department personnel, is charged with the oversight of overall credit quality and risk exposure of the Company's loan portfolio. This includes the monitoring of the lending activities of all Company personnel with respect to underwriting and processing new loans and the timely follow-up and corrective action for loans showing signs of deterioration in quality. A loan review program provides the Company with an independent review of the commercial loan portfolio on an ongoing basis. Generally, consumer and residential mortgage loans are included in the Pass categories unless a specific action, such as extended delinquencies, bankruptcy, repossession or death of the borrower occurs, which heightens awareness as to a possible credit event. Internal loan reviews are completed annually on all commercial relationships with a committed loan balance in excess of $500,000, which includes confirmation of risk rating by an independent credit officer. In addition, all relationships greater than $250,000 rated Substandard, Doubtful or Loss are reviewed quarterly and corresponding risk ratings are reaffirmed by the Company's Problem Loan Committee, with subsequent reporting to the ERM Committee. The following summarizes the Company’s loan portfolio ratings based on its internal risk rating system at December 31, 2018 and 2017: (Dollars in thousands) Pass Special Mention Non-Impaired Substandard Impaired - Substandard Doubtful PCI Loans Total December 31, 2018 Commercial real estate: Owner-occupied $ 121,903 $ 3,024 $ 987 $ 1,880 $ 0 $ 1,856 $ 129,650 Non-owner occupied 242,136 10,008 0 0 0 650 252,794 Multi-family 71,482 5,886 717 131 0 717 78,933 Non-owner occupied residential 98,125 736 1,197 309 0 0 100,367 Acquisition and development: 1-4 family residential construction 7,385 0 0 0 0 0 7,385 Commercial and land development 41,251 25 583 0 0 192 42,051 Commercial and industrial 150,286 2,278 2,940 286 0 5,174 160,964 Municipal 50,982 0 0 0 0 0 50,982 Residential mortgage: First lien 229,436 0 0 2,877 0 2,983 235,296 Home equity – term 12,170 0 0 16 0 22 12,208 Home equity – lines of credit 142,638 165 15 798 0 0 143,616 Installment and other loans 33,229 15 1 0 0 166 33,411 $ 1,201,023 $ 22,137 $ 6,440 $ 6,297 $ 0 $ 11,760 $ 1,247,657 December 31, 2017 Commercial real estate: Owner-occupied $ 113,240 $ 413 $ 1,921 $ 1,237 $ 0 $ 0 $ 116,811 Non-owner occupied 235,919 0 4,507 4,065 0 0 244,491 Multi-family 48,603 4,113 753 165 0 0 53,634 Non-owner occupied residential 76,373 142 1,084 381 0 0 77,980 Acquisition and development: 1-4 family residential construction 11,238 0 0 492 0 0 11,730 Commercial and land development 18,635 5 611 0 0 0 19,251 Commercial and industrial 113,162 2,151 0 350 0 0 115,663 Municipal 42,065 0 0 0 0 0 42,065 Residential mortgage: First lien 158,673 0 0 3,836 0 0 162,509 Home equity – term 11,762 0 0 22 0 0 11,784 Home equity – lines of credit 131,585 80 60 467 0 0 132,192 Installment and other loans 21,891 0 0 11 0 0 21,902 $ 983,146 $ 6,904 $ 8,936 $ 11,026 $ 0 $ 0 $ 1,010,012 For commercial real estate, acquisition and development, and commercial and industrial loans, a loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Generally, loans that are more than 90 days past due are deemed impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed to determine if the loan should be placed on nonaccrual status. Nonaccrual loans in the commercial and commercial real estate portfolios and any TDRs are, by definition, deemed to be impaired. Impairment is measured on a loan-by-loan basis for commercial, construction and restructured loans by either the present value of the expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent. A loan is collateral dependent if the repayment of the loan is expected to be provided solely by the underlying collateral. For loans that are deemed to be impaired for extended periods of time, periodic updates on fair values are obtained, which may include updated appraisals. Updated fair values are incorporated into the impairment analysis in the next reporting period. Loan charge-offs, which may include partial charge-offs, are taken on an impaired loan that is collateral dependent if the loan’s carrying balance exceeds its collateral’s appraised value, the loan has been identified as uncollectible, and it is deemed to be a confirmed loss. Typically, impaired loans with a charge-off or partial charge-off will continue to be considered impaired, unless the note is split into two, and management expects the performing note to continue to perform and is adequately secured. The second, or non-performing note, would be charged-off. Generally, an impaired loan with a partial charge-off may continue to have an impairment reserve on it after the partial charge-off, if factors warrant. At December 31, 2018 and 2017, nearly all of the Company’s impaired loans’ extent of impairment were measured based on the estimated fair value of the collateral securing the loan, except for TDRs. By definition, TDRs are considered impaired. All restructured loans’ impairment were determined based on discounted cash flows for those loans classified as TDRs and still accruing interest. For real estate loans, collateral generally consists of commercial real estate, but in the case of commercial and industrial loans, it could also consist of accounts receivable, inventory, equipment or other business assets. Commercial and industrial loans may also have real estate collateral. Updated appraisals are generally required every 18 months for classified commercial loans in excess of $250,000. The “as is" value provided in the appraisal is often used as the fair value of the collateral in determining impairment, unless circumstances, such as subsequent improvements, approvals, or other circumstances dictate that another value provided by the appraiser is more appropriate. Generally, impaired commercial loans secured by real estate, other than performing TDRs, are measured at fair value using certified real estate appraisals that had been completed within the last 18 months. Appraised values are discounted for estimated costs to sell the property and other selling considerations to arrive at the property’s fair value. In those situations in which it is determined an updated appraisal is not required for loans individually evaluated for impairment, fair values are based on one or a combination of approaches. In those situations in which a combination of approaches is considered, the factor that carries the most consideration will be the one management believes is warranted. The approaches are: • Original appraisal – if the original appraisal provides a strong loan-to-value ratio (generally 70% or lower) and, after consideration of market conditions and knowledge of the property and area, it is determined by the Credit Administration staff that there has not been a significant deterioration in the collateral value, the original certified appraised value may be used. Discounts as deemed appropriate for selling costs are factored into the appraised value in arriving at fair value. • Discounted cash flows – in limited cases, discounted cash flows may be used on projects in which the collateral is liquidated to reduce the borrowings outstanding, and is used to validate collateral values derived from other approaches. Collateral on certain impaired loans is not limited to real estate, and may consist of accounts receivable, inventory, equipment or other business assets. Estimated fair values are determined based on borrowers’ financial statements, inventory ledgers, accounts receivable agings or appraisals from individuals with knowledge in the business. Stated balances are generally discounted for the age of the financial information or the quality of the assets. In determining fair value, liquidation discounts are applied to this collateral based on existing loan evaluation policies. The Company distinguishes Substandard loans on both an impaired and nonimpaired basis, as it places less emphasis on a loan’s classification, and increased reliance on whether the loan was performing in accordance with the contractual terms. A Substandard classification does not automatically meet the definition of impaired. Loss potential, while existing in the aggregate amount of Substandard loans, does not have to exist in individual extensions of credit classified Substandard. As a result, the Company’s methodology includes an evaluation of certain accruing commercial real estate, acquisition and development, and commercial and industrial loans rated Substandard to be collectively, as opposed to individually, evaluated for impairment. Although the Company believes these loans meet the definition of Substandard, they are generally performing and management has concluded that it is likely we will be able to collect the scheduled payments of principal and interest when due according to the contractual terms of the loan agreement. Larger groups of smaller balance homogeneous loans are collectively evaluated for impairment. Generally, the Company does not separately identify individual consumer and residential loans for impairment disclosures, unless such loans are the subject of a restructuring agreement due to financial difficulties of the borrower. The following table, which excludes PCI loans, summarizes impaired loans by segment and class, segregated by those for which a specific allowance was required and those for which a specific allowance was not required at December 31, 2018 and 2017. The recorded investment in loans excludes accrued interest receivable due to insignificance. Related allowances established generally pertain to those loans in which loan forbearance agreements were in the process of being negotiated or updated appraisals were pending, and any partial charge-off will be recorded when final information is received. Impaired Loans with a Specific Allowance Impaired Loans with No Specific Allowance (Dollars in thousands) Recorded Investment (Book Balance) Unpaid Principal Balance (Legal Balance) Related Allowance Recorded Investment (Book Balance) Unpaid Principal Balance (Legal Balance) December 31, 2018 Commercial real estate: Owner-occupied $ 0 $ 0 $ 0 $ 1,880 $ 2,576 Multi-family 0 0 0 131 336 Non-owner occupied residential 0 0 0 309 632 Commercial and industrial 0 0 0 286 457 Residential mortgage: First lien 743 743 38 2,134 2,727 Home equity—term 0 0 0 16 23 Home equity—lines of credit 0 0 0 798 1,081 $ 743 $ 743 $ 38 $ 5,554 $ 7,832 December 31, 2017 Commercial real estate: Owner-occupied $ 0 $ 0 $ 0 $ 1,237 $ 2,479 Non-owner occupied 0 0 0 4,065 4,856 Multi-family 0 0 0 165 352 Non-owner occupied residential 0 0 0 381 669 Acquisition and development: 1-4 family residential construction 0 0 0 492 492 Commercial and industrial 0 0 0 350 495 Residential mortgage: First lien 872 872 42 2,964 3,706 Home equity—term 0 0 0 22 27 Home equity—lines of credit 0 0 0 467 628 Installment and other loans 9 9 9 2 33 $ 881 $ 881 $ 51 $ 10,145 $ 13,737 The following table, which excludes PCI loans, summarizes the average recorded investment in impaired loans and related recognized interest income for the years ended December 31, 2018, 2017 and 2016. 2018 2017 2016 (Dollars in thousands) Average Impaired Balance Interest Income Recognized Average Impaired Balance Interest Income Recognized Average Impaired Balance Interest Income Recognized Commercial real estate: Owner-occupied $ 1,495 $ 2 $ 1,000 $ 6 $ 1,758 $ 0 Non-owner occupied 1,842 0 392 0 6,831 0 Multi-family 148 0 182 0 216 0 Non-owner occupied residential 346 0 418 0 645 0 Acquisition and development: 1-4 family residential construction 181 0 154 0 0 0 Commercial and land development 1 0 0 0 3 0 Commercial and industrial 322 0 413 0 575 0 Residential mortgage: First lien 3,234 59 4,012 58 4,525 33 Home equity – term 19 0 61 0 98 0 Home equity – lines of credit 657 2 488 2 455 0 Installment and other loans 4 0 10 0 12 0 $ 8,249 $ 63 $ 7,130 $ 66 $ 15,118 $ 33 The following table presents impaired loans that are TDRs, with the recorded investment at December 31, 2018 and December 31, 2017. 2018 2017 (Dollars in thousands) Number of Contracts Recorded Investment Number of Contracts Recorded Investment Accruing: Commercial real estate: Owner-occupied 1 $ 39 1 $ 52 Residential mortgage: First lien 11 1,069 11 1,102 Home equity - lines of credit 1 24 1 29 13 1,132 13 1,183 Nonaccruing: Commercial real estate: Owner-occupied 1 37 1 57 Residential mortgage: First lien 8 658 8 715 Installment and other loans 0 0 1 3 9 695 10 775 22 $ 1,827 23 $ 1,958 There were no restructured loans for the years ended December 31, 2018, 2017, and 2016 that were modified as TDRs within the previous 12 months which were in payment default. The following table presents the number of loans modified, and their pre-modification and post-modification investment balances for the years ended December 31, 2017, and 2016. There were no loans modified during 2018. (Dollars in thousands) Number of Contracts Pre- Modification Investment Balance Post- Modification Investment Balance December 31, 2017 Commercial real estate: Owner occupied 2 $ 119 $ 119 December 31, 2016 Commercial real estate: Non-owner occupied 1 $ 6,095 $ 6,095 Residential mortgage: First lien 2 265 265 Home equity - lines of credit 1 34 34 4 $ 6,394 $ 6,394 The loans presented in the table above were considered TDRs a result of the Company agreeing to below market interest rates given the risk of the transaction; allowing the loan to remain on interest only status; or a reduction in interest rates, in order to give the borrowers an opportunity to improve their cash flows. For TDRs in default of their modified terms, impairment is generally determined on a collateral dependent approach, except for accruing residential mortgage TDRs, which are generally on the discounted cash flow approach. Certain loans modified during a period may no longer be outstanding at the end of the period if the loan was paid off. No additional commitments have been made to borrowers whose loans are considered TDRs. Management further monitors the performance and credit quality of the loan portfolio by analyzing the length of time a portfolio is past due, by aggregating loans based on its delinquencies. The following table presents the classes of the loan portfolio summarized by aging categories of performing loans and nonaccrual loans at December 31, 2018 and 2017. Days Past Due Current 30-59 60-89 90+ (still accruing) Total Past Due Non- Accrual Total Loans December 31, 2018 Commercial real estate: Owner-occupied $ 125,887 $ 66 $ 0 $ 0 $ 66 $ 1,841 $ 127,794 Non-owner occupied 252,144 0 0 0 0 0 252,144 Multi-family 78,085 0 0 0 0 131 78,216 Non-owner occupied residential 99,803 226 29 0 255 309 100,367 Acquisition and development: 1-4 family residential construction 7,385 0 0 0 0 0 7,385 Commercial and land development 41,822 37 0 0 37 0 41,859 Commercial and industrial 154,988 411 105 0 516 286 155,790 Municipal 50,982 0 0 0 0 0 50,982 Residential mortgage: First lien 228,179 1,592 734 0 2,326 1,808 232,313 Home equity – term 11,487 678 5 0 683 16 12,186 Home equity – lines of credit 142,394 420 28 0 448 774 143,616 Installment and other loans 33,135 66 44 0 110 0 33,245 Subtotal 1,226,291 3,496 945 0 4,441 5,165 1,235,897 Loans acquired with credit deterioration: Commercial real estate: Owner-occupied 1,784 0 72 0 72 0 1,856 Non-owner occupied 650 0 0 0 0 0 650 Multi-family 717 0 0 0 0 0 717 Acquisition and development: Commercial and land development 192 0 0 0 0 0 192 Commercial and industrial 4,943 231 0 0 231 0 5,174 Residential mortgage: First lien 2,506 382 42 53 477 0 2,983 Home equity – term 17 5 0 0 5 0 22 Installment and other loans 149 13 0 4 17 0 166 Subtotal 10,958 631 114 57 802 0 11,760 $ 1,237,249 $ 4,127 $ 1,059 $ 57 $ 5,243 $ 5,165 $ 1,247,657 Days Past Due Current 30-59 60-89 90+ (still accruing) Total Past Due Non- Accrual Total Loans December 31, 2017 Commercial real estate: Owner-occupied $ 115,605 $ 4 $ 17 $ 0 $ 21 $ 1,185 $ 116,811 Non-owner occupied 240,426 0 0 0 0 4,065 244,491 Multi-family 53,469 0 0 0 0 165 53,634 Non-owner occupied residential 77,454 145 0 0 145 381 77,980 Acquisition and development: 1-4 family residential construction 11,238 0 0 0 0 492 11,730 Commercial and land development 19,226 25 0 0 25 0 19,251 Commercial and industrial 115,312 1 0 0 1 350 115,663 Municipal 42,065 0 0 0 0 0 42,065 Residential mortgage: First lien 155,387 3,333 1,055 0 4,388 2,734 162,509 Home equity – term 11,753 9 0 0 9 22 11,784 Home equity – lines of credit 131,208 474 72 0 546 438 132,192 Installment and other loans 21,749 141 1 0 142 11 21,902 $ 994,892 $ 4,132 $ 1,145 $ 0 $ 5,277 $ 9,843 $ 1,010,012 The Company maintains its ALL at a level management believes adequate for probable incurred credit losses. The ALL is established and maintained through a provision for loan losses charged to earnings. Quarterly, management assesses the adequacy of the ALL utilizing a defined methodology which considers specific credit evaluation of impaired loans as discussed above, past loan loss historical experience, and qualitative factors. Management believes its approach properly addresses relevant accounting guidance for loans individually identified as impaired and for loans collectively evaluated for impairment, and other bank regulatory guidance. In connection with its quarterly evaluation of the adequacy of the ALL, management reviews its methodology to determine if it properly addresses the current risk in the loan portfolio. For each loan class, general allowances based on quantitative factors, principally historical loss trends, are provided for loans that are collectively evaluated for impairment. An adjustment to historical loss factors may be incorporated for delinquency and other potential risk not elsewhere defined within the ALL methodology. In addition to this quantitative analysis, adjustments to the ALL requirements are allocated on loans collectively evaluated for impairment based on additional qualitative factors, including: Nature and Volume of Loans – including loan growth in the current and subsequent quarters based on the Company’s targeted growth and strategic plan, coupled with the types of loans booked based on risk management and credit culture; the number of exceptions to loan policy; and supervisory loan to value exceptions. Concentrations of Credit and Changes within Credit Concentrations – including the composition of the Company’s overall portfolio makeup and management's evaluation related to concentration risk management and the inherent risk associated with the concentrations identified. Underwriting Standards and Recovery Practices – including changes to underwriting standards and perceived impact on anticipated losses; trends in the number of exceptions to loan policy; supervisory loan to value exceptions; and administration of loan recovery practices. Delinquency Trends – including delinquency percentages noted in the portfolio relative to economic conditions; severity of the delinquencies; and whether the ratios are trending upwards or downwards. Classified Loans Trends – including internal loan ratings of the portfolio; severity of the ratings; whether the loan segment’s ratings show a more favorable or less favorable trend; and underlying market conditions and impact on the collateral values securing the loans. Experience, Ability and Depth of Management/Lending staff – including the years’ experience of senior and middle management and the lending staff; turnover of the staff; and instances of repeat criticisms of ratings. Quality of Loan Review – including the years of experience of the loan review staff; in-house versus outsourced provider of review; turnover of staff and the perceived quality of their work in relation to other external information. National and Local Economic Conditions – including trends in the consumer price index, unemployment rates, the housing price index, housing statistics compared to the prior year, bankruptcy rates, regulatory and legal environment risks and competition. The following table presents activity in the ALL for the years ended December 31, 2018, 2017 and 2016. Commercial Consumer (Dollars in thousands) Commercial Real Estate Acquisition and Development Commercial and Industrial Municipal Total Residential Mortgage Installment and Other Total Unallocated Total December 31, 2018 Balance, beginning of year $ 6,763 $ 417 $ 1,446 $ 84 $ 8,710 $ 3,400 $ 211 $ 3,611 $ 475 $ 12,796 Provision for loan losses (442) 396 209 14 177 363 165 528 95 800 Charge-offs (17) (7) 0 0 (24) (148) (292) (440) 0 (464) Recoveries 572 11 1 0 584 138 160 298 0 882 Balance, end of year $ 6,876 $ 817 $ 1,656 $ 98 $ 9,447 $ 3,753 $ 244 $ 3,997 $ 570 $ 14,014 December 31, 2017 Balance, beginning of year $ 7,530 $ 580 $ 1,074 $ 54 $ 9,238 $ 2,979 $ 144 $ 3,123 $ 414 $ 12,775 Provision for loan losses 38 (167) 333 30 234 531 174 705 61 1,000 Charge-offs (835) 0 (85) 0 (920) (180) (166) (346) 0 (1,266) Recoveries 30 4 124 0 158 70 59 129 0 287 Balance, end of year $ 6,763 $ 417 $ 1,446 $ 84 $ 8,710 $ 3,400 $ 211 $ 3,611 $ 475 $ 12,796 December 31, 2016 Balance, beginning of year $ 7,883 $ 850 $ 1,012 $ 58 $ 9,803 $ 2,870 $ 121 $ 2,991 $ 774 $ 13,568 Provision for loan losses 107 (270) 129 (4) (38) 532 116 648 (360) 250 Charge-offs (872) 0 (79) 0 (951) (577) (194) (771) 0 (1,722) Recoveries 412 0 12 0 424 154 101 255 0 679 Balance, end of year $ 7,530 $ 580 $ 1,074 $ 54 $ 9,238 $ 2,979 $ 144 $ 3,123 $ 414 $ 12,775 The following table summarizes the ending loan balances individually evaluated for impairment based upon loan segment, as well as the related ALL loss allocation for each at December 31, 2018 and 2017. PCI loans are excluded from loans individually evaluated for impairment. Commercial Consumer (Dollars in thousands) Commercial Real Estate Acquisition and Development Commercial and Industrial Municipal Total Residential Mortgage Installment and Other Total Unallocated Total December 31, 2018 Loans allocated by: Individually evaluated for impairment $ 2,320 $ 0 $ 286 $ 0 $ 2,606 $ 3,691 $ 0 $ 3,691 $ 0 $ 6,297 Collectively evaluated for impairment 559,424 49,436 160,678 50,982 820,520 387,429 33,411 420,840 0 1,241,360 $ 561,744 $ 49,436 $ 160,964 $ 50,982 $ 823,126 $ 391,120 $ 33,411 $ 424,531 $ 0 $ 1,247,657 Allowance for loan losses allocated by: Individually evaluated for impairment $ 0 $ 0 $ 0 $ 0 $ 0 $ 38 $ 0 $ 38 $ 0 $ 38 Collectively evaluated for impairment 6,876 817 1,656 98 9,447 3,715 244 3,959 570 13,976 $ 6,876 $ 817 $ 1,656 $ 98 $ 9,447 $ 3,753 $ 244 $ 3,997 $ 570 $ 14,014 December 31, 2017 Loans allocated by: Individually evaluated for impairment $ 5,848 $ 492 $ 350 $ 0 $ 6,690 $ 4,325 $ 11 $ 4,336 $ 0 $ 11,026 Collectively evaluated for impairment 487,068 30,489 115,313 42,065 674,935 302,160 21,891 324,051 0 998,986 $ 492,916 $ 30,981 $ 115,663 $ 42,065 $ 681,625 $ 306,485 $ 21,902 $ 328,387 $ 0 $ 1,010,012 Allowance for loan losses allocated by: Individually evaluated for impairment $ 0 $ 0 $ 0 $ 0 $ 0 $ 42 $ 9 $ 51 $ 0 $ 51 Collectively evaluated for impairm |
PREMISES AND EQUIPMENT
PREMISES AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PREMISES AND EQUIPMENT | PREMISES AND EQUIPMENT The following table summarizes premises and equipment at December 31. (Dollars in thousands) 2018 2017 Land $ 7,825 $ 7,664 Buildings and improvements 31,987 31,154 Leasehold improvements 3,926 2,482 Furniture and equipment 22,998 22,023 Construction in progress 1,946 89 68,682 63,412 Less accumulated depreciation and amortization 30,481 28,603 $ 38,201 $ 34,809 Depreciation expense totaled $2,609,000, $2,650,000, and $2,311,000 for the years ended December 31, 2018, 2017 and 2016. During 2016, $5,600,000 of premises and equipment, predominantly furniture and equipment, was identified as retired from active use. The Company recorded a loss of $147,000 in connection with this retirement. At December 31, 2018, bank premises with an estimated fair value of $1,003,000, which were acquired in the Mercersburg acquisition, are designated by management as held for sale and included in other assets on the consolidated balance sheets. The branch locations were closed on February 1, 2019. The Company leases land and building space associated with certain branch offices, remote automated teller machines, and certain equipment under operating lease agreements which expire at various times through 2027. Rent expense charged to operations in connection with these leases totaled $781,000, $639,000 and $601,000 for the years ended December 31, 2018, 2017 and 2016. The following table summarizes minimum rental commitments for years ending December 31 under operating leases with maturities in excess of one year at December 31, 2018. (Dollars in thousands) 2019 $ 782 2020 757 2021 578 2022 470 2023 425 Thereafter 4,948 $ 7,960 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS The following table presents presents changes in goodwill for years ended December 31. (Dollars in thousands) 2018 2017 2016 Balance, beginning of year $ 719 $ 719 $ 0 Acquired goodwill 11,873 0 719 Balance, end of year $ 12,592 $ 719 $ 719 The following table presents changes in other intangible assets for years ended December 31. (Dollars in thousands) 2018 2017 2016 Balance, beginning of year $ 356 $ 458 $ 207 Acquired CDI 3,840 0 0 Acquired other customer relationship intangibles 0 0 350 Amortization expense (286) (102) (99) Balance, end of year $ 3,910 $ 356 $ 458 The following table presents the components of other identifiable intangible assets at December 31. 2018 2017 (Dollars in thousands) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Amortized intangible assets: Core deposit intangibles $ 3,840 $ 190 $ 0 $ 0 Other customer relationship intangibles 931 671 937 581 Total $ 4,771 $ 861 $ 937 $ 581 The following table presents estimated aggregate amortization expense for years ending December 31. (Dollars in thousands) 2019 $ 788 2020 687 2021 598 2022 513 2023 429 Thereafter 895 $ 3,910 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company files income tax returns in the U.S. federal jurisdiction, the Commonwealth of Pennsylvania and the State of Maryland. The Company is no longer subject to tax examination by tax authorities for years before 2015. The following table summarizes income tax expense for years ended December 31. (Dollars in thousands) 2018 2017 2016 Current expense $ 1,097 $ 1,260 $ 1,498 Deferred expense (benefit) 543 443 (232) Expense due to enactment of federal tax reform legislation 0 2,635 0 Income tax expense $ 1,640 $ 4,338 $ 1,266 The following table reconciles the Company's effective income tax rate to its statutory federal rate for years ended December 31. 2018 2017 2016 Statutory federal tax rate 21.0 % 34.0 % 34.0 % Increase (decrease) resulting from: Tax exempt interest income (7.7) % (13.0) % (16.0) % Income from life insurance (1.7) % (2.4) % (4.7) % Disallowed interest expense 0.8 % 1.0 % 1.0 % Low-income housing credits and related expense (2.5) % (4.6) % (7.2) % Merger related 0.6 % 0.0 % 0.0 % Expense due to enactment of federal tax reform legislation 0.0 % 21.2 % 0.0 % Regulatory settlement 0.0 % 0.0 % 4.3 % Change in statutory federal tax rate 0.0 % 0.0 % 2.3 % Other 0.9 % (1.3) % 2.3 % Effective income tax rate 11.4 % 34.9 % 16.0 % Income tax expense includes $211,000, $405,000 and $483,000 related to net security gains for the years ended December 31, 2018, 2017, and 2016. Effective January 1, 2016, the Company changed its statutory federal tax rate from 35% to 34% to reflect its assessment that it will not be in the higher tax bracket. As a result, income tax expense for 2016 increased $185,000 due to the application of the new rate to existing deferred balances. On December 22, 2017, federal tax reform legislation, commonly referred to as the Tax Cuts and Jobs Act of 2017 (the "Tax Act"), was enacted. Among other things, the Tax Act reduced the Company's statutory federal tax rate from 34% to 21% effective January 1, 2018. As a result, we were required to remeasure, through income tax expense, certain deferred tax assets and liabilities using the enacted rate at which we expect them to be recovered or settled. The remeasurement of our net deferred tax asset resulted in additional federal deferred tax expense of $2,635,000, which is included in total tax expense for 2017. Also on December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 ("SAB 118"), which provided guidance on accounting for the tax effects of the Tax Act. SAB 118 provided for a measurement period that should not extend beyond one year from the Tax Act's enactment date for companies to complete the accounting under ASC 740, Income Taxes. In remeasuring our net deferred tax asset, we estimated the income in 2017 for our limited partnership investments in affordable housing real estate partnerships and interest income on nonperforming loans. Adjustment between our estimates and the actual amounts determined during the measurement period did not have a material impact to our consolidated financial statements. The Company's deferred tax asset related to low-income housing credit carryforwards was not impacted by the change in statutory tax rate, as it is treated as payments on future federal income taxes due and not subject to remeasurement. However, the Tax Act did change alternative minimum tax credit carryforwards to be refundable credits. To reflect this change, the Company reclassed its alternative minimum tax credit carryforwards, totaling $5,343,000 at December 31, 2017, from deferred tax assets to other assets in the consolidated balance sheets. There were no penalties or interest related to income taxes recorded in the income statement for the years ended December 31, 2018, 2017 and 2016 and no amounts accrued for penalties as of December 31, 2018 and 2017. The following table summarizes the Company's deferred tax assets and liabilities at December 31. (Dollars in thousands) 2018 2017 Deferred tax assets: Allowance for loan losses $ 3,143 $ 2,919 Deferred compensation 723 355 Retirement and salary continuation plans 1,416 1,301 Share-based compensation 742 597 Off-balance sheet reserves 219 207 Nonaccrual loan interest 537 258 Net unrealized losses on securities available for sale 791 0 Purchase accounting adjustments 1,795 39 Bonus accrual 470 25 Low-income housing credit carryforward 641 2,313 Other 321 390 Total deferred tax assets 10,798 8,404 Deferred tax liabilities: Depreciation 458 488 Net unrealized gains on securities available for sale 0 757 Mortgage servicing rights 590 536 Purchase accounting adjustments 1,021 251 Other 150 122 Total deferred tax liabilities 2,219 2,154 Net deferred tax asset, included in Other Assets $ 8,579 $ 6,250 At December 31, 2018, the Company has low-income housing credit carryforwards that expire through 2038. A deferred tax asset is recognized for these carryforwards because the benefit is more likely than not to be realized. |
RETIREMENT PLANS
RETIREMENT PLANS | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
RETIREMENT PLANS | RETIREMENT PLANS The Company maintains a 401(k) profit-sharing plan for employees who meet the plan's eligibility requirements. Substantially all of the Company’s employees are covered by the plan, which contains limited match or safe harbor provisions. Employer contributions to the plan are based on the performance of the Company and are at the discretion of the Board of Directors. Employer contribution expense totaled $479,000, $432,000 and $334,000 for the years ended December 31, 2018, 2017, and 2016. The Company has deferred compensation agreements with certain present and former directors, whereby a director or his beneficiaries will receive a monthly retirement benefit beginning at age 65. The arrangement is funded by an amount of life insurance on the participating director, which is calculated to meet the Company’s obligations under the compensation agreement. The cash value of the life insurance policies is an unrestricted asset of the Company. The estimated present value of future benefits to be paid totaled $82,000 and $94,000 at December 31, 2018 and 2017. Expense for this plan totaled $9,000, $11,000 and $12,000 for the years ended December 31, 2018, 2017, and 2016. The Company also has supplemental discretionary deferred compensation plans for directors and executive officers. The plans are funded annually with director fees and salary reductions which are either placed in a trust account invested by the Bank’s OFA division or recognized as a liability. The trust account balance totaled $1,692,000 and $1,571,000 at December 31, 2018 and 2017 and is offset by other liabilities in the same amount. Expense for these plans totaled $61,000, $10,000 and $15,000, for the years ended December 31, 2018, 2017, and 2016. In addition, the Company has two supplemental retirement and salary continuation plans for directors and executive officers. These plans are funded with single premium life insurance on the plan participants. The cash value of the life insurance policies is an unrestricted asset of the Company. The estimated present value of future benefits to be paid totaled $8,548,000 and $6,109,000 at December 31, 2018 and 2017. Expense for these plans totaled $872,000, $739,000 and $727,000, for the years ended December 31, 2018, 2017, and 2016. The Company has promised a continuation of life insurance coverage to certain persons post-retirement. The estimated present value of future benefits to be paid totaled $1,457,000 and $937,000 at December 31, 2018 and 2017. Expense for this plan totaled $126,000, $77,000 and $61,000 for the years ended December 31, 2018, 2017, and 2016. Life insurance policy cash values and trust account balances, and estimated present values of future benefits and deferred compensation liabilities, noted above are included in other assets and other liabilities, respectively, on the consolidated balance sheets. |
SHARE-BASED COMPENSATION PLANS
SHARE-BASED COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION PLANS | SHARE-BASED COMPENSATION PLANS The Company maintains share-based compensation plans under the shareholder-approved 2011 Plan. The purpose of the share-based compensation plans is to provide officers, employees, and non-employee members of the Board of Directors of the Company with additional incentive to further the success of the Company. At the 2018 Annual Meeting of Shareholders on May 1, 2018, the Company's shareholders approved an increase in the number of shares available for issuance to 881,920 shares and extended the term of the 2011 Plan to May 31, 2028, subject to any future extensions. At December 31, 2018, 881,920 shares of the common stock of the Company were reserved to be issued and 533,852 shares were available to be issued. The 2011 Plan incentive awards may consist of grants of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, deferred stock units and performance shares. All employees of the Company and its present or future subsidiaries, and members of the Board of Directors of the Company or any subsidiary of the Company, are eligible to participate in the 2011 Plan. The 2011 Plan allows for the Compensation Committee of the Board of Directors to determine the type of incentive to be awarded, its term, manner of exercise, vesting of awards and restrictions on shares. Generally, awards are nonqualified under the IRC, unless the awards are deemed to be incentive awards to employees at the Compensation Committee’s discretion. The following table presents a summary of nonvested restricted shares activity for 2018. Shares Weighted Average Grant Date Fair Value Nonvested shares, beginning of year 268,411 $ 18.18 Granted 85,817 25.63 Forfeited (37,392) 18.72 Vested (41,424) 18.84 Nonvested shares, end of year 275,412 $ 20.33 The following table presents restricted shares compensation expense, with tax benefit information, and fair value of shares vested at December 31. (Dollars in thousands) 2018 2017 2016 Restricted share award expense $ 1,479 $ 1,369 $ 941 Restricted share award tax benefit 374 465 320 Fair value of shares vested 1,074 303 237 At December 31, 2018 and 2017, unrecognized compensation expense related to the share awards totaled $2,115,000, and $2,035,000. The unrecognized compensation expense at December 31, 2018 is expected to be recognized over a weighted-average period of 1.6 years. The following table presents a summary of outstanding stock options activity for 2018. Shares Weighted Average Exercise Price Outstanding, beginning of year 59,583 $ 25.89 Forfeited (2,235) 28.02 Expired (15,214) 30.11 Exercised (1,150) 21.14 Options outstanding and exercisable, end of year 40,984 $ 24.34 The exercise price of each option equals the market price of the Company’s stock on the grant date. An option’s maximum term is ten years. All options are fully vested upon issuance. The following table presents information pertaining to options outstanding and exercisable at December 31, 2018. Range of Exercise Prices Number Outstanding and Exercisable Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price $21.14 - $24.99 31,519 1.40 $ 21.51 $25.00 - $34.99 2,792 1.25 25.76 $35.00 - $37.59 6,673 0.56 37.10 $21.14 - $37.59 40,984 1.25 $ 24.34 Outstanding and exercisable options had an intrinsic value of $0 at December 31, 2018 and $127,000 at December 31, 2017. The Company maintains an employee stock purchase plan to provide employees of the Company an opportunity to purchase Company common stock. Eligible employees may purchase shares in an amount that does not exceed 10% of their annual salary at the lower of 95% of the fair market value of the shares on the semi-annual offering date, or related purchase date. The Company reserved 350,000 shares of its common stock to be issued under the employee stock purchase plan. At December 31, 2018, 173,465 shares were available to be issued. The following table presents information for the employee stock purchase plan for years ended December 31. (Dollars in thousands except share information) 2018 2017 2016 Shares purchased 5,907 6,632 6,334 Weighted average price of shares purchased $ 23.04 $ 20.57 $ 16.64 Compensation expense recognized 14 17 17 Tax benefits 3 6 6 The Company issues new shares or treasury shares, depending on market conditions, in its share-based compensation plans. |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2018 | |
Banking and Thrift [Abstract] | |
DEPOSITS | DEPOSITS The following table summarizes deposits by type at December 31. 2018 2017 (Dollars in thousands) Noninterest-bearing $ 204,843 $ 162,343 NOW and money market 856,520 687,936 Savings 113,515 95,148 Time ($250,000 or less) 343,551 252,200 Time (over $250,000) 40,327 21,888 Total $ 1,558,756 $ 1,219,515 The following table summarizes scheduled maturities of time deposits for years ending December 31. (Dollars in thousands) 2019 $ 259,909 2020 97,008 2021 14,486 2022 8,603 2023 2,941 Thereafter 931 $ 383,878 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Directors and executive officers of the Company, including their immediate families and companies in which they have a direct or indirect material interest, are considered to be related parties. In the ordinary course of business, the Company engages in various related party transactions, including extending credit and bank service transactions. The Company relies on the directors and executive officers for the identification of their associates. Federal banking regulations require that any extensions of credit to insiders and their related interests not be offered on terms more favorable than would be offered to non-related borrowers of similar creditworthiness. The following table presents the aggregate activity in loans to related parties during 2018. (Dollars in thousands) Balance, beginning of year $ 673 New loans 1,080 Repayments (728) Director and officer relationship changes 16 Balance, end of year $ 1,041 None of these loans are past due, on nonaccrual status or have been restructured to provide a reduction or deferral of interest or principal because of deterioration in the financial position of the borrower. There were no loans to a related party that were considered classified loans at December 31, 2018 or 2017. The Company accepts deposits from related parties, which totaled $3,536,000 and $3,723,000 at December 31, 2018 and 2017, on the same terms, including interest rates, as those prevailing at the time for comparable transactions with non-related parties. |
SHORT-TERM BORROWINGS
SHORT-TERM BORROWINGS | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
SHORT-TERM BORROWINGS | SHORT-TERM BORROWINGS The Company has short-term borrowing capability, including short-term borrowings from the FHLB, federal funds purchased and the FRB discount window. The following table summarizes the use of these short-term borrowings at and for the years ended December 31. (Dollars in thousands) 2018 2017 2016 Balance at year-end $ 55,000 $ 50,000 $ 52,000 Weighted average interest rate at year-end 2.76 % 1.21 % 0.76 % Average balance during the year $ 71,457 $ 54,610 $ 17,841 Average interest rate during the year 2.09 % 1.08 % 0.61 % Maximum month-end balance during the year $ 103,000 $ 72,000 $ 52,000 The Company enters into borrowing arrangements with certain of its deposit customers by agreements to repurchase ("repurchase agreements") under which the Company pledges investment securities owned and under its control as collateral against the borrowing arrangement, which generally matures within one day from the transaction date. The Company is required to hold U.S. Treasury, U.S. Agency or U.S. GSE securities as underlying securities for repurchase agreements. The following table provides additional details for repurchase agreements at and for the years ended December 31. (Dollars in thousands) 2018 2017 2016 Balance at year-end $ 9,069 $ 43,576 $ 35,864 Weighted average interest rate at year-end 1.22 % 0.56 % 0.20 % Average balance during the year $ 9,715 $ 43,205 $ 38,546 Average interest rate during the year 0.82 % 0.45 % 0.20 % Maximum month-end balance during the year $ 14,591 $ 55,270 $ 52,693 Fair value of securities underlying the agreements at year-end 17,942 53,485 56,201 |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT The following table presents components of the Company’s long-term debt at December 31. Amount Weighted Average rate (Dollars in thousands) 2018 2017 2018 2017 FHLB fixed rate advances maturing: 2019 $ 40,000 $ 40,000 1.86 % 1.86 % 2020 40,350 40,350 1.76 % 1.76 % 80,350 80,350 1.81 % 1.81 % FHLB amortizing advance requiring monthly principal and interest payments, maturing: 2025 3,100 3,465 4.74 % 4.74 % Total FHLB Advances $ 83,450 $ 83,815 1.92 % 1.93 % Except for amortizing advances, interest only is paid on a quarterly basis. The following table summarizes the aggregate amount of future principal payments required on these borrowings at December 31, 2018: Years Ending December 31, (Dollars in thousands) 2019 $ 40,382 2020 40,751 2021 421 2022 441 2023 462 Thereafter 993 $ 83,450 The Bank is a member of the FHLB of Pittsburgh and has available the FHLB program of overnight and term advances. Under terms of a blanket collateral agreement for advances, lines and letters of credit from the FHLB, collateral for all outstanding advances, lines and letters of credit consisted of 1-4 family mortgage loans and other real estate secured loans totaling $554,306,000 at December 31, 2018. The Bank had additional availability of $330,306,000 at the FHLB on December 31, 2018 based on its qualifying collateral, net of short-term borrowings and long-term debt detailed above, deposit letters of credit totaling $84,000,000 and non-deposit letters of credit totaling $1,550,000 at December 31, 2018. |
SUBORDINATED DEBENTURES
SUBORDINATED DEBENTURES | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
SUBORDINATED DEBENTURES | SUBORDINATED NOTESThe Company has unsecured subordinated notes payable, which mature December 30, 2028. At December 31, 2018, subordinated notes payable outstanding totaled $31,859,000, which qualified for Tier 2 capital. The notes are recorded net of remaining debt issuance costs totaling $641,000 at December 31, 2018, which are amortized over a 10 year period on an effective yield basis. The subordinated notes have a fixed interest rate of 6.0% through December 30, 2023, which then converts to a variable rate of three-month LIBOR for the applicable interest period plus 3.16% through maturity. The Company may, at its option, redeem the notes, in whole or in part, on any interest payment date on or after December 30, 2023, and at any time upon the occurrence of certain events. There are no debt covenants on the subordinated notes payable. |
SHAREHOLDERS_ EQUITY AND REGULA
SHAREHOLDERS’ EQUITY AND REGULATORY CAPITAL | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
SHAREHOLDERS’ EQUITY AND REGULATORY CAPITAL | SHAREHOLDERS’ EQUITY AND REGULATORY CAPITAL The Company maintains a stockholder dividend reinvestment and stock purchase plan. Under the plan, shareholders may purchase additional shares of the Company’s common stock at the prevailing market prices with reinvestment dividends and voluntary cash payments. The Company reserved 1,045,000 shares of its common stock to be issued under the dividend reinvestment and stock purchase plan. At December 31, 2018, approximately 665,000 shares were available to be issued under the plan. Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Under the Basel Committee on Banking Supervision's capital guidelines for U.S. Banks ("Basel III rules"), an entity must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The required capital conservation buffer was 1.25% for 2017, 1.875% for 2018 and is 2.50% for 2019 under phase-in rules. The Company and the Bank have elected not to include net unrealized gain or loss on available for sale securities in computing regulatory capital. Effective with the third quarter of 2018, the FRB raised the consolidated asset limit to be considered a small bank holding company from $1,000,000,000 to $3,000,000,000, and a company with assets under the revised limits is not subject to the FRB consolidated capital rules. A company with consolidated assets under the revised limit may continue to file reports that include capital amounts and ratios. The Company has elected to continue to file those reports. Management believes, at December 31, 2018 and 2017, that the Company and the Bank met all capital adequacy requirements to which they are subject. Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At December 31, 2018, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Bank's classification. The following table presents capital amounts and ratios at December 31, 2018 and December 31, 2017. Actual For Capital Adequacy Purposes (includes applicable capital conservation buffer) To Be Well Capitalized Under Prompt Corrective Action Regulations (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio December 31, 2018 Total Capital to risk weighted assets Consolidated $ 206,988 15.6 % $ 131,393 9.875 % n/a n/a Bank 177,892 13.4 % 131,286 9.875 % $ 132,948 10.0 % Tier 1 Capital to risk weighted assets Consolidated 160,117 12.0 % 104,782 7.875 % n/a n/a Bank 162,880 12.3 % 104,696 7.875 % 106,358 8.0 % Common Tier 1 (CET1) to risk weighted assets Consolidated 160,117 12.0 % 84,823 6.375 % n/a n/a Bank 162,880 12.3 % 84,754 6.375 % 86,416 6.5 % Tier 1 Capital to average assets Consolidated 160,117 8.4 % 76,089 4.0 % n/a n/a Bank 162,880 8.6 % 76,113 4.0 % 95,142 5.0 % December 31, 2017 Total Capital to risk weighted assets Consolidated $ 152,386 13.3 % $ 106,040 9.250 % n/a n/a Bank 148,997 13.0 % 105,747 9.250 % $ 114,321 10.0 % Tier 1 Capital to risk weighted assets Consolidated 138,774 12.1 % 83,112 7.250 % n/a n/a Bank 135,385 11.8 % 82,883 7.250 % 91,457 8.0 % Common Tier 1 (CET1) to risk weighted assets Consolidated 138,774 12.1 % 65,917 5.750 % n/a n/a Bank 135,385 11.8 % 65,734 5.750 % 74,308 6.5 % Tier 1 Capital to average assets Consolidated 138,774 8.9 % 62,042 4.0 % n/a n/a Bank 135,385 8.7 % 62,066 4.0 % 77,582 5.0 % In September 2015, the Board of Directors of the Company authorized a share repurchase program under which the Company may repurchase up to 5% of the Company's outstanding shares of common stock, or approximately 416,000 shares, in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended. When and if appropriate, repurchases may be made in open market or privately negotiated transactions, depending on market conditions, regulatory requirements and other corporate considerations, as determined by management. Share repurchases may not occur and may be discontinued at any time. At December 31, 2018, 82,725 shares had been repurchased under the program at a total cost of $1,438,000, or $17.38 per share. On January 23, 2019, the Board declared a cash dividend of $0.15 per common share, which was paid on February 11, 2019. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table presents earnings per share for years ended December 31. (In thousands, except per share data) 2018 2017 2016 Net income $ 12,805 $ 8,090 $ 6,628 Weighted average shares outstanding - basic 8,360 8,070 8,059 Dilutive effect of share-based compensation 177 156 86 Weighted average shares outstanding - diluted 8,537 8,226 8,145 Per share information: Basic earnings per share $ 1.53 $ 1.00 $ 0.82 Diluted earnings per share 1.50 0.98 0.81 Average outstanding stock options of 21,000, 42,000 and 90,000 for the years ended December 31, 2018, 2017 and 2016 were not included in the computation of earnings per share because the effect was antidilutive, due to the exercise price exceeding the average market price. The dilutive effect of share-based compensation in each year above relates principally to restricted stock awards. |
FINANCIAL INSTRUMENTS WITH OFF-
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK | FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets. The contract amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit and financial guarantees written is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. The following table presents these contract, or notional, amounts at December 31. (Dollars in thousands) 2018 2017 Commitments to fund: Home equity lines of credit $ 160,971 $ 139,281 1-4 family residential construction loans 13,002 11,420 Commercial real estate, construction and land development loans 31,133 44,592 Commercial, industrial and other loans 147,518 145,394 Standby letters of credit 13,909 12,273 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s credit-worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the customer. Collateral varies but may include accounts receivable, inventory, equipment, residential real estate, and income-producing commercial properties. Standby letters of credit and financial guarantees written are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. The Company holds collateral supporting those commitments when deemed necessary by management. The liability, at December 31, 2018 and 2017, for guarantees under standby letters of credit issued was not material. The Company maintains a reserve, based on historical loss experience of the related loan class, for off-balance sheet credit exposures that currently are not funded, in other liabilities. This reserve totaled $998,000 and $816,000 at December 31, 2018 and 2017. The following table presents the net amount expensed for this off-balance sheet credit exposures reserve for years ended December 31. (Dollars in thousands) 2018 2017 2016 Off-balance sheet credit exposures expense $ 182 $ 32 $ 312 |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Certain financial instruments and all non-financial instruments are excluded from disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market participant assumptions based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are: Level 1 – quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access at the measurement date. Level 2 – significant other observable inputs other than Level 1 prices such as prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 – at least one significant unobservable input that reflects a company's own assumptions about the assumptions that market participants would use in pricing an asset or liability. In instances in which multiple levels of inputs are used to measure fair value, hierarchy classification is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The Company used the following methods and significant assumptions to estimate fair value for instruments measured on a recurring basis: Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include highly liquid government bonds, mortgage products and exchange traded equities. If quoted market prices are not available, securities are classified within Level 2 and fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flow. Level 2 securities include U.S. agency securities, mortgage-backed securities, obligations of states and political subdivisions and certain corporate, asset backed and other securities. In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within Level 3 of the valuation hierarchy. All of the Company’s securities are classified as available for sale. The Company had no fair value liabilities measured on a recurring basis at December 31, 2018 or 2017. The following table summarizes assets measured at fair value on a recurring basis at December 31. AFS Securities (Dollars in Thousands) Level 1 Level 2 Level 3 Total Fair Value Measurements December 31, 2018 States and political subdivisions $ 0 $ 145,004 $ 0 $ 145,004 GSE residential CMOs 0 108,064 0 108,064 Private label residential CMOs 0 143 0 143 Private label commercial CMOs 0 67,836 7,209 75,045 Asset-backed and other 0 137,588 0 137,588 Totals $ 0 $ 458,635 $ 7,209 $ 465,844 December 31, 2017 States and political subdivisions $ 0 $ 159,458 $ 0 $ 159,458 GSE residential MBSs 0 49,530 0 49,530 GSE residential CMOs 0 111,119 0 111,119 Private label residential CMOs 0 1,003 0 1,003 Private label commercial CMOs 0 7,653 0 7,653 Asset-backed and other 0 86,545 0 86,545 Totals $ 0 $ 415,308 $ 0 $ 415,308 During 2018, we purchased one private label commercial CMO that was measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at December 31, 2018. Fair value for this investment at December 31, 2018 totaled $7,209,000. The investment was purchased at $7,213,000, premium amortization expense totaling $41,000 was included in earnings in 2018 and an unrealized gain of $37,000 was recognized in other comprehensive income in 2018. The Level 3 valuation is based on a non-executable broker quote, which is considered a significant unobservable input. Such quotes are updated as available and may remain constant for a period of time for certain broker-quoted securities that do not move with the market or that are not interest rate sensitive as a result of their structure or overall attributes. Certain financial assets are measured at fair value on a nonrecurring basis. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or write-downs of individual assets. The Company used the following methods and significant assumptions to estimate fair value for these financial assets. Impaired Loans Loans are designated as impaired when, in the judgment of management and based on current information and events, it is probable that all amounts due, according to the contractual terms of the loan agreement, will not be collected. The measurement of loss associated with impaired loans for all loan classes can be based on either the observable market price of the loan, the fair value of the collateral, or discounted cash flows based on a market rate of interest for performing TDRs. For collateral-dependent loans, fair value is measured based on the value of the collateral securing the loan, less estimated costs to sell. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. The value of the real estate collateral is determined utilizing an income or market valuation approach based on an appraisal conducted by an independent, licensed appraiser outside of the Company using observable market data (Level 2). However, if the collateral is a house or building in the process of construction, or if management adjusts the appraisal value, then the fair value is considered Level 3. The value of business equipment is based upon an outside appraisal, if deemed significant, or the net book value on the applicable business’ financial statements if not considered significant using observable market data. Likewise, values for inventory and accounts receivable collateral are based on financial statement balances or aging reports (Level 3). Impaired loans with an allocation to the ALL are measured at fair value on a nonrecurring basis. Any fair value adjustments are recorded in the period incurred as provision for loan losses on the consolidated statements of income. Specific allocations to the ALL or partial charge-offs totaled $928,000 and $2,266,000 at December 31, 2018 and 2017. Changes in the fair value of impaired loans for those still held at December 31 considered in the determination as to the provision for loan losses, totaled $146,000, $867,000 and $268,000 for the years ended December 31, 2018, 2017, and 2016. Foreclosed Real Estate OREO property acquired through foreclosure is initially recorded at the fair value of the property at the transfer date less estimated selling cost. Subsequently, OREO is carried at the lower of its carrying value or the fair value less estimated selling cost. Fair value is usually determined based upon an independent third-party appraisal of the property or occasionally upon a recent sales offer. There were no specific charges to value OREO at the lower of cost or fair value on properties held at December 31, 2018 and 2017. Changes in the fair value of foreclosed real estate for those still held at December 31 charged to OREO totaled $0, $0, and $43,000 for the years ending December 31, 2018, 2017, and 2016. The following table summarizes assets measured at fair value on a nonrecurring basis at December 31. (Dollars in thousands) Level 1 Level 2 Level 3 Total Fair Value Measurements December 31, 2018 Impaired loans Commercial real estate: Owner-occupied $ 0 $ 0 $ 1,087 $ 1,087 Multi-family 0 0 131 131 Non-owner occupied residential 0 0 278 278 Commercial and industrial 0 0 25 25 Residential mortgage: First lien 0 0 1,121 1,121 Home equity - lines of credit 0 0 409 409 Total impaired loans $ 0 $ 0 $ 3,051 $ 3,051 December 31, 2017 Impaired loans Commercial real estate: Owner-occupied $ 0 $ 0 $ 430 $ 430 Non-owner occupied 0 0 4,066 4,066 Multi-family 0 0 165 165 Non-owner occupied residential 0 0 344 344 Commercial and industrial 0 0 53 53 Residential mortgage: First lien 0 0 1,951 1,951 Home equity - lines of credit 0 0 161 161 Installment and other loans 0 0 3 3 Total impaired loans $ 0 $ 0 $ 7,173 $ 7,173 The following table presents additional qualitative information about assets measured on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine fair value. Fair Value Estimate Valuation Techniques Unobservable Input Range December 31, 2018 Impaired loans $ 3,051 Appraisal of collateral Management adjustments on appraisals for property type and recent activity 5% - 75% discount - Management adjustments for liquidation expenses 6% - 20% discount December 31, 2017 Impaired loans $ 7,173 Appraisal of collateral Management adjustments on appraisals for property type and recent activity 7% - 75% discount - Management adjustments for liquidation expenses 0% - 20% discount Fair values of financial instruments GAAP requires disclosure of the fair value of financial assets and liabilities, including those that are not measured and reported at fair value on a recurring or nonrecurring basis. The following table presents the carrying amounts and estimated fair values of financial assets and liabilities at December 31. (Dollars in thousands) Carrying Amount Fair Value Level 1 Level 2 Level 3 December 31, 2018 Financial Assets Cash and due from banks $ 26,156 $ 26,156 $ 26,156 $ 0 $ 0 Interest-bearing deposits with banks 45,664 45,664 45,664 0 0 Federal funds sold 16,995 16,995 16,995 0 0 Restricted investments in bank stock 10,842 n/a n/a n/a n/a AFS securities 465,844 465,844 0 458,635 7,209 Loans held for sale 3,340 3,413 0 3,413 0 Loans, net of allowance for loan losses 1,233,643 1,229,645 0 0 1,229,645 Accrued interest receivable 5,927 5,927 0 2,853 3,074 Financial Liabilities Deposits 1,558,756 1,555,912 0 1,555,912 0 Short-term borrowings 64,069 64,069 0 64,069 0 Long-term debt 83,450 82,951 0 82,951 0 Subordinated notes 31,859 31,256 0 31,256 0 Accrued interest payable 1,301 1,301 0 1,301 0 Off-balance sheet instruments 0 0 0 0 0 December 31, 2017 Financial Assets Cash and due from banks $ 21,734 $ 21,734 $ 21,734 $ 0 $ 0 Interest-bearing deposits with banks 8,073 8,073 8,073 0 0 Restricted investments in bank stock 9,997 n/a n/a n/a n/a AFS securities 415,308 415,308 0 415,308 0 Loans held for sale 6,089 6,272 0 6,272 0 Loans, net of allowance for loan losses 997,216 994,617 0 0 994,617 Accrued interest receivable 5,048 5,048 0 2,580 2,468 Financial Liabilities Deposits 1,219,515 1,213,288 0 1,213,288 0 Short-term borrowings 93,576 93,576 0 93,576 0 Long-term debt 83,815 83,949 0 83,949 0 Accrued interest payable 495 495 0 495 0 Off-balance sheet instruments 0 0 0 0 0 The methods used to estimate the fair value of financial instruments at December 31, 2017 did not necessarily represent an exit price. In accordance with our adoption of ASU 2016-01, the methods utilized to measure the fair value of financial instruments at December 31, 2018 represents an approximation of exit price, however, an actual exit price may differ. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE FROM CONTRACTS WITH CUSTOMERS All of the Company's revenue from contracts with customers within the scope of ASC 606 is recognized within noninterest income on the consolidated statements of income. Consistent with ASC 606, noninterest income covered by this guidance is recognized as services are transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those services. Service Charges on Deposit Accounts - The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customer's request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer's account balance. Interchange Income - The Company earns interchange fees from debit/credit cardholder transactions conducted through the MasterCard payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. Interchange income is presented net of cardholder rewards. Wealth Management and Investment Advisory Income (Gross) - The Company earns wealth management and investment brokerage fees from its contracts with trust and wealth management customers to manage assets for investment, and/or to transact on their accounts. These fees are primarily earned over time as the Company provides the contracted services and are generally assessed based on a tiered scale of the market value of assets under management. Fees that are transaction based, including trade execution services, are recognized at the point in time that the transaction is executed, i.e., the trade date. Other related services provided included financial planning services and the fees the Company earns, which are based on a fixed fee schedule, are recognized when the services are rendered. Services are generally billed in arrears and a receivable is recorded until fees are paid. Investment Brokerage Income (Net) - The Company earns fees from investment management and brokerage services provided to its customers through a third-party service provider. The Company receives commissions from the third-party service provider and recognizes income on a weekly basis based upon customer activity. Because the Company acts as an agent in arranging the relationship between the customer and the third-party service provider and does not control the services rendered to the customers, investment brokerage income is presented net of related costs. Gains/Losses on Sales of OREO - The Company records a gain or loss on the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. If the Company finances the sale of OREO to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain (loss) on sale if a significant financing component is present. At December 31, 2018 and December 31, 2017, the Company had receivables from customers totaling $640,000 and $682,000. The following table presents our noninterest income disaggregated by revenue source for the years ended December 31. (Dollars in thousands) 2018 2017 2016 Noninterest income Service charges on deposits $ 3,578 $ 3,392 $ 3,285 Trust and investment management income 6,576 6,400 5,091 Brokerage income 2,035 1,896 1,933 Merchant and bankcard fees (interchange income) 2,821 2,618 2,563 Revenue from contracts with customers 15,010 14,306 12,872 Other service charges 1,392 673 591 Mortgage banking activities 2,663 2,919 3,412 Income from life insurance 1,463 1,109 1,099 Other income 320 190 345 Investment securities gains 1,006 1,190 1,420 Total noninterest income $ 21,854 $ 20,387 $ 19,739 |
ORRSTOWN FINANCIAL SERVICES, IN
ORRSTOWN FINANCIAL SERVICES, INC. (PARENT COMPANY ONLY) CONDENSED FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
ORRSTOWN FINANCIAL SERVICES, INC. (PARENT COMPANY ONLY) CONDENSED FINANCIAL INFORMATION | ORRSTOWN FINANCIAL SERVICES, INC. (PARENT COMPANY ONLY) CONDENSED FINANCIAL INFORMATION Condensed Balance Sheets December 31, (Dollars in thousands) 2018 2017 Assets Cash in Orrstown Bank $ 28,596 $ 703 Deposits with other banks 0 214 Total cash 28,596 917 Investment in Orrstown Bank 175,299 140,429 Other assets 2,057 4,067 Total assets $ 205,952 $ 145,413 Liabilities Subordinated notes $ 31,859 $ 0 Accrued interest and other liabilities 660 648 Total liabilities 32,519 648 Shareholders’ Equity Common stock 491 435 Additional paid-in capital 151,678 125,458 Retained earnings 24,472 16,042 Accumulated other comprehensive income (loss) (2,972) 2,845 Treasury stock (236) (15) Total shareholders’ equity 173,433 144,765 Total liabilities and shareholders’ equity $ 205,952 $ 145,413 Condensed Statements of Income For the Years Ended December 31, (Dollars in thousands) 2018 2017 2016 Income Dividends from bank subsidiary $ 4,450 $ 0 $ 2,200 Interest income from bank subsidiary 7 15 38 Other income 102 61 62 Total income 4,559 76 2,300 Expenses Interest on short-term borrowings 57 0 0 Interest on subordinated notes 73 0 0 Total interest expense 130 0 0 Share-based compensation 205 247 216 Management fee to Bank 1,042 501 504 Merger related expenses 1,545 0 0 Other expenses 656 1,116 2,152 Total expenses 3,578 1,864 2,872 Income (loss) before income tax benefit and equity in undistributed income of subsidiaries 981 (1,788) (572) Income tax benefit (735) (596) (606) Income (loss) before equity in undistributed income of subsidiaries 1,716 (1,192) 34 Equity in undistributed income of subsidiaries 11,089 9,282 6,594 Net income $ 12,805 $ 8,090 $ 6,628 Condensed Statements of Cash Flows For the Years Ended December 31, (Dollars in thousands) 2018 2017 2016 Cash flows from operating activities: Net income $ 12,805 $ 8,090 $ 6,628 Adjustments to reconcile net income to cash provided by (used in) operating activities: Amortization 3 0 0 Deferred income taxes 22 16 4 Equity in undistributed income of subsidiaries (11,089) (9,282) (6,594) Share-based compensation 205 247 216 Net change in other liabilities 12 (35) (6) Net change in other assets 2,039 (377) (849) Net cash provided by (used in) operating activities 3,997 (1,341) (601) Cash flows from investing activities: Capital contributed to subsidiaries 0 (6,100) 0 Net cash paid for acquisitions (4,597) 0 0 Other, net 0 0 (500) Net cash used in investing activities (4,597) (6,100) (500) Cash flows from financing activities: Dividends paid (4,375) (3,488) (2,898) Proceeds from issuance of subordinated notes, net of costs 31,857 0 0 Proceeds from issuance of common stock 1,448 1,276 847 Payments to repurchase common stock (651) 0 (631) Net cash provided by (used in) financing activities 28,279 (2,212) (2,682) Net increase (decrease) in cash 27,679 (9,653) (3,783) Cash, beginning 917 10,570 14,353 Cash, ending $ 28,596 $ 917 $ 10,570 |
CONTINGENCIES
CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES The nature of the Company’s business generates a certain amount of litigation involving matters arising out of the ordinary course of business. Except as described below, in the opinion of management, there are no legal proceedings that might have a material effect on the results of operations, liquidity, or the financial position of the Company at this time. On May 25, 2012, SEPTA filed a putative class action complaint in the U.S. District Court for the Middle District of Pennsylvania against the Company, the Bank and certain current and former directors and executive officers (collectively, the “Defendants”). The complaint alleges, among other things, that (i) in connection with the Company’s Registration Statement on Form S-3 dated February 23, 2010 and its Prospectus Supplement dated March 23, 2010, and (ii) during the purported class period of March 24, 2010 through October 27, 2011, the Company issued materially false and misleading statements regarding the Company’s lending practices and financial results, including misleading statements concerning the stringent nature of the Bank’s credit practices and underwriting standards, the quality of its loan portfolio, and the intended use of the proceeds from the Company’s March 2010 public offering of common stock. The complaint asserts claims under Sections 11, 12(a) and 15 of the Securities Act of 1933, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and seeks class certification, unspecified money damages, interest, costs, fees and equitable or injunctive relief. Under the Private Securities Litigation Reform Act of 1995 (“PSLRA”), motions for appointment of Lead Plaintiff in this case were due by July 24, 2012. SEPTA was the sole movant and the Court appointed SEPTA Lead Plaintiff on August 20, 2012. Pursuant to the PSLRA and the Court’s September 27, 2012 Order, SEPTA was given until October 26, 2012 to file an amended complaint and the Defendants until December 7, 2012 to file a motion to dismiss the amended complaint. SEPTA’s opposition to the Defendant’s motion to dismiss was originally due January 11, 2013. Under the PSLRA, discovery and all other proceedings in the case were stayed pending the Court’s ruling on the motion to dismiss. The September 27, 2012 Order specified that if the motion to dismiss were denied, the Court would schedule a conference to address discovery and the filing of a motion for class certification. On October 26, 2012, SEPTA filed an unopposed motion for enlargement of time to file its amended complaint in order to permit the parties and new defendants to be named in the amended complaint time to discuss plaintiff’s claims and defendants’ defenses. On October 26, 2012, the Court granted SEPTA’s motion, mooting its September 27, 2012 scheduling Order, and requiring SEPTA to file its amended complaint on or before January 16, 2013 or otherwise advise the Court of circumstances that require a further enlargement of time. On January 14, 2013, the Court granted SEPTA’s second unopposed motion for enlargement of time to file an amended complaint on or before March 22, 2013. On March 4, 2013, SEPTA filed an amended complaint. The amended complaint expands the list of defendants in the action to include the Company’s independent registered public accounting firm and the underwriters of the Company’s March 2010 public offering of common stock. In addition, among other things, the amended complaint extends the purported 1934 Exchange Act class period from March 15, 2010 through April 5, 2012. Pursuant to the Court’s March 28, 2013 Second Scheduling Order, on May 28, 2013, all defendants filed their motions to dismiss the amended complaint, and on July 22, 2013, SEPTA filed its “omnibus” opposition to all of the defendants’ motions to dismiss. On August 23, 2013, all defendants filed reply briefs in further support of their motions to dismiss. On December 5, 2013, the Court ordered oral argument on the Orrstown Defendants’ motion to dismiss the amended complaint to be heard on February 7, 2014. Oral argument on the pending motions to dismiss SEPTA’s amended complaint was held on April 29, 2014. The Second Scheduling Order stayed all discovery in the case pending the outcome of the motions to dismiss, and informed the parties that, if required, a telephonic conference to address discovery and the filing of SEPTA’s motion for class certification would be scheduled after the Court’s ruling on the motions to dismiss. On April 10, 2015, pursuant to Court order, all parties filed supplemental briefs addressing the impact of the U.S. Supreme Court’s March 24, 2015 decision in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund on defendants’ motions to dismiss the amended complaint. On June 22, 2015, in a 96-page Memorandum, the Court dismissed without prejudice SEPTA’s amended complaint against all defendants, finding that SEPTA failed to state a claim under either the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. The Court ordered that, within 30 days, SEPTA either seek leave to amend its amended complaint, accompanied by the proposed amendment, or file a notice of its intention to stand on the amended complaint. On July 22, 2015, SEPTA filed a motion for leave to amend under Local Rule 15.1, and attached a copy of its proposed second amended complaint to its motion. Many of the allegations of the proposed second amended complaint are essentially the same or similar to the allegations of the dismissed amended complaint. The proposed second amended complaint also alleges that the Orrstown Defendants did not publicly disclose certain alleged failures of internal controls over loan underwriting, risk management, and financial reporting during the period 2009 to 2012, in violation of the federal securities laws. On February 8, 2016, the Court granted SEPTA’s motion for leave to amend and SEPTA filed its second amended complaint that same day. On February 25, 2016, the Court issued a scheduling Order directing: all defendants to file any motions to dismiss by March 18, 2016; SEPTA to file an omnibus opposition to defendants’ motions to dismiss by April 8, 2016; and all defendants to file reply briefs in support of their motions to dismiss by April 22, 2016. Defendants timely filed their motions to dismiss the second amended complaint and the parties filed their briefs in accordance with the Court-ordered schedule, above. The February 25, 2016 Order stays all discovery and other deadlines in the case (including the filing of SEPTA’s motion for class certification) pending the outcome of the motions to dismiss. The allegations of SEPTA’s second amended complaint disclosed the existence of a confidential, non-public, fact-finding inquiry regarding the Company being conducted by the SEC. As disclosed in the Company’s Form 8-K filed on September 27, 2016, on that date the Company entered into a settlement agreement with the SEC resolving the investigation of accounting and related matters at the Company for the periods ended June 30, 2010, to December 31, 2011. As part of the settlement of the SEC’s administrative proceedings and pursuant to the cease-and-desist order, without admitting or denying the SEC’s findings, the Company, its Chief Executive Officer, its former Chief Financial Officer, its former Executive Vice President and Chief Credit Officer, and its Chief Accounting Officer, agreed to pay civil money penalties to the SEC. The Company agreed to pay a civil money penalty of $1,000,000. The Company had previously established a reserve for that amount which was expensed in the second fiscal quarter of 2016. In the settlement agreement with the SEC, the Company also agreed to cease and desist from committing or causing any violations and any future violations of Securities Act Sections 17(a)(2) and 17(a)(3) and Exchange Act Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B), and Rules 12b-20, 13a-1 and 13a-13 promulgated thereunder. On September 27, 2016, the Orrstown Defendants filed with the Court a Notice of Subsequent Event in Further Support of their Motion to Dismiss the Second Amended Complaint, regarding the settlement with the SEC. The Notice attached a copy of the SEC’s cease-and-desist order and briefly described what the Company believed were the most salient terms of the neither -admit-nor-deny settlement. On September 29, 2016, SEPTA filed a Response to the Notice, in which SEPTA argued that the settlement with the SEC did not support dismissal of the second amended complaint. On December 7, 2016, the Court issued an Order and Memorandum granting in part and denying in part defendants’ motions to dismiss SEPTA’s second amended complaint. The Court granted the motions to dismiss the Securities Act claims against all defendants, and granted the motions to dismiss the Exchange Act Section 10(b) and Rule 10b-5 claims against all defendants except Orrstown Financial Services, Inc., Orrstown Bank, Thomas R. Quinn, Jr., Bradley S. Everly, and Jeffrey W. Embly. The Court also denied the motions to dismiss the Exchange Act Section 20(a) claims against Quinn, Everly, and Embly. On January 31, 2017, the Court entered a Case Management Order establishing the schedule for the litigation and, on August 15, 2017, it entered a revised Order that, among other things, set the following deadlines: all fact discovery closes on March 1, 2018, and SEPTA’s motion for class certification is due the same day; expert merits discovery closes May 30, 2018; summary judgment motions are due by June 26, 2018; the mandatory pretrial and settlement conference is set for December 11, 2018; and trial is scheduled to begin on January 7, 2019. On December 15, 2017, the Orrstown Defendants and SEPTA exchanged expert reports in opposition to and in support of class certification, respectively. On January 15, 2018, the parties exchanged expert rebuttal reports. SEPTA’s motion for class certification was due March 1, 2018, with the Orrstown Defendants’ opposition due April 2, 2018, and SEPTA’s reply due April 23, 2018. On February 9, 2018, SEPTA filed a Status Report and Request for a Telephonic Status Conference asking the Court to convene a conference to discuss the status of discovery in the case and possible revisions to the case schedule. On February 12, 2018, the Orrstown Defendants filed their status report to provide the Court with a summary of document discovery in the case to date. On February 27, 2018, SEPTA filed an unopposed motion for a continuance of the existing case deadlines pending a status conference with the Court or the issuance of a revised case schedule. On February 28, 2018, the Court issued an Order continuing all case management deadlines until further order of the Court. On March 27, 2018, the Court held a telephonic status conference with the parties to discuss outstanding discovery issues and case deadlines. On May 2, 2018, the parties filed a joint status report. On May 10, 2018, the Court held a follow-up telephonic status conference at which the parties reported on the progress of discovery to date. On August 9, 2018, SEPTA filed a motion to compel the production of Confidential Supervisory Information (CSI) of non-parties the Board of Governors of the Federal Reserve System (FRB) and the Pennsylvania Department of Banking and Securities, in the possession of Orrstown and third parties. On August 23, 2018, the Orrstown Defendants filed a response to the motion to compel. On August 30, 2018, the FRB filed an unopposed motion to intervene in the Action for the purpose of opposing SEPTA’s motion to compel, and on September 27, 2018, the FRB filed its brief in opposition to SEPTA’s motion. On October 11, 2018, SEPTA filed its reply brief in support of its motion to compel. On February 12, 2019, the Court denied SEPTA’s motion to compel the production of CSI on the ground that SEPTA had failed to exhaust its administrative remedies. Party and non-party document discovery in the case continues. To date, SEPTA has taken two non-party depositions. The Company believes that the allegations of SEPTA’s second amended complaint are without merit and intends to defend itself vigorously against those claims. It is not possible at this time to estimate reasonably possible losses, or even a range of reasonably possible losses, in connection with the litigation. The Company incurred indemnification costs totaling $645,000 for the year ended December 31, 2017, with several professional service providers in connection with the SEPTA litigation. Indemnification costs incurred in 2018 were not material. These costs are included in legal fees in the consolidated statements of income. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations – Orrstown Financial Services, Inc. and subsidiaries is a financial holding company that operates Orrstown Bank, a commercial bank with banking and financial advisory offices in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry and York Counties, Pennsylvania, and in Washington County, Maryland and Wheatland Advisors, Inc., a registered investment advisor non-bank subsidiary, headquartered in Lancaster County, Pennsylvania. The Company operates in the community banking segment and engages in lending activities, including commercial, residential, commercial mortgages, construction, municipal, and various forms of consumer lending, and deposit services, including checking, savings, time, and money market deposits. The Company also provides fiduciary services, investment advisory, insurance and brokerage services. The Company and the Bank are subject to regulation by certain federal and state agencies and undergo periodic examinations by such regulatory authorities. |
Basis of Presentation | Basis of Presentation – The accompanying consolidated financial statements include the accounts of Orrstown Financial Services, Inc. and its wholly owned subsidiaries, the Bank and Wheatland. The accounting and reporting policies of the Company conform to GAAP and, where applicable, to accounting and reporting guidelines prescribed by bank regulatory authorities. All significant intercompany transactions and accounts have been eliminated. Certain reclassifications have been made to prior year amounts to conform with current year classifications. In October 2018, the Company acquired Mercersburg Financial Corporation and its wholly-owned subsidiary, First Community Bank of Mercersburg. The results of operations and assets acquired and liabilities assumed are included only from the date of acquisition. The comparability of the results of operations for the year ended December 31, 2018, to 2017 and 2016 have been impacted by the acquisition. The Company's management has evaluated all activity of the Company and concluded that subsequent events are properly reflected in the Company's consolidated financial statements and notes as required by GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change include the determination of the ALL and those used in valuation methodologies in areas with no observable market, such as loans, deposits, borrowings, goodwill, core deposit and other intangible assets, other assets and liabilities obtained or assumed in business combinations. |
Concentration of Credit Risk | Concentration of Credit Risk – The Company grants commercial, residential, construction, municipal, and various forms of consumer lending to customers primarily in its market area of Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry and York Counties, Pennsylvania, and in Washington County, Maryland. Therefore the Company's exposure to credit risk is significantly affected by changes in the economy in those areas. Although the Company maintains a diversified loan portfolio, a significant portion of its customers’ ability to honor their contracts is dependent upon economic sectors for commercial real estate, including office space, retail strip centers, sales finance, sub-dividers and developers, and multi-family, hospitality, and residential building operators. Management evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if collateral is deemed necessary by the Company upon the extension of credit, is based on management’s credit evaluation of the customer. Collateral held varies, but generally includes real estate and equipment. The types of securities the Company invests in are included in Note 3, Securities Available for Sale, and the types of lending the Company engages in are included in Note 4, Loans and Allowance for Loan Losses. |
Cash and Cash Equivalents | Cash and Cash Equivalents – Cash and cash equivalents include cash, balances due from banks, federal funds sold and interest-bearing deposits due on demand, all of which have original maturities of 90 days or less. Net cash flows are reported for customer loan and deposit transactions, loans held for sale, redemption (purchases) of restricted investments in bank stocks, and short-term borrowings. Cash and cash equivalents include amounts that the Company is required to maintain on hand or on deposit at the Federal Reserve Bank to meet certain regulatory reserve balance requirements. At December 31, 2018 and 2017, the Company had reserve requirements of $10,983,000 and $1,395,000. Balances with correspondent banks may, at times, exceed federally insured limits. The Company considers this to be a normal business risk and reviews correspondent banks' financial condition on a quarterly basis. |
Restricted Investments in Bank Stocks | Restricted Investments in Bank Stocks – Restricted investments in bank stocks consist of Federal Reserve Bank of Philadelphia stock, FHLB of Pittsburgh stock and Atlantic Community Bankers Bank stock. Federal law requires a member institution of the district Federal Reserve Bank and FHLB to hold stock according to predetermined formulas. Atlantic Community Bankers Bank requires its correspondent banking institutions to hold stock as a condition of membership. The restricted investment in bank stocks is carried at cost. Quarterly, management evaluates the bank stocks for impairment based on assessment of the ultimate recoverability of cost rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of cost is influenced by criteria such as operating performance, liquidity, funding and capital positions, stock repurchase history, dividend history, and impact of legislative and regulatory changes. |
Securities | Securities – The Company typically classifies debt securities as available for sale on the date of purchase. At December 31, 2018 and 2017 the Company had no held to maturity or trading securities. AFS securities are reported at fair value. Interest income and dividends are recognized in interest income on an accrual basis. Purchase premiums and discounts on debt securities are amortized to interest income using the interest method over the terms of the securities and approximate the level yield method. Changes in unrealized gains and losses, net of related deferred taxes, for AFS securities are recorded in AOCI. Realized gains and losses on securities are recorded on the trade date using the specific identification method and are included in noninterest income. AFS securities include investments that management intends to use as part of its asset/liability management strategy. Securities may be sold in response to changes in interest rates, changes in prepayment rates and other factors. The Company does not have the intent to sell any of its AFS securities that are in an unrealized loss position and it is more likely than not that the Company will not be required to sell these securities before recovery of their amortized cost. Management evaluates securities for OTTI on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components: OTTI related to other factors, which is recognized in OCI, and the remaining OTTI, which is recognized in earnings. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. The Company’s securities are exposed to various risks, such as interest rate risk, market risk, and credit risk. Due to the level of risk associated with certain investments and the level of uncertainty related to changes in the value of investments, it is at least reasonably possible that changes in risks in the near term would materially affect investment assets reported in the consolidated financial statements. |
Loans Held for Sale | Loans Held for Sale – Loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or fair value. Gains and losses on loan sales (sales proceeds minus carrying value) are recorded in noninterest income. |
Loans | Loans – Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are reported at their outstanding unpaid principal balances adjusted for charge-offs, the ALL, and any deferred fees or costs on originated loans. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and amortized as a yield adjustment over the respective term of the loan. For purchased loans that are not deemed impaired at the acquisition date, premiums and discounts are amortized or accreted as adjustments to interest income using the effective yield method. For all classes of loans, the accrual of interest income on loans, including impaired loans, ceases when principal or interest is past due 90 days or more or immediately if, in the opinion of management, full collection is unlikely. Interest will continue to accrue on loans past due 90 days or more if the collateral is adequate to cover principal and interest, and the loan is in the process of collection. Interest accrued, but not collected, at the date of placement on nonaccrual status, is reversed and charged against current interest income, unless fully collateralized. Subsequent payments received are either applied to the outstanding principal balance or recorded as interest income, depending upon management’s assessment of the ultimate collectability of principal. Loans are returned to accrual status, for all loan classes, when all the principal and interest amounts contractually due are brought current, the loan has performed in accordance with the contractual terms of the note for a reasonable period of time, generally six months, and the ultimate collectability of the total contractual principal and interest is reasonably assured. Past due status is based on contractual terms of the loan. Loans, the terms of which are modified, are classified as TDRs if a concession was granted in connection with the modification, for legal or economic reasons, related to the debtor’s financial difficulties. Concessions granted under a TDR typically involve a temporary deferral of scheduled loan payments, an extension of a loan’s stated maturity date, a temporary reduction in interest rates, or granting of an interest rate below market rates given the risk of the transaction. If a modification occurs while the loan is on accruing status, it will continue to accrue interest under the modified terms. Nonaccrual TDRs may be restored to accrual status if scheduled principal and interest payments, under the modified terms, are current for six months after modification, and the borrower continues to demonstrate its ability to meet the modified terms. TDRs are evaluated individually for impairment on a quarterly basis including monitoring of performance according to their modified terms. Allowance for Loan Losses – The ALL is evaluated on at least a quarterly basis, as losses are estimated to be probable and incurred, and, if deemed necessary, is increased through a provision for loan losses charged to earnings. Loan losses are charged against the ALL when management determines that all or a portion of the loan is uncollectible. Recoveries on previously charged-off loans are credited to the ALL when received. The ALL is allocated to loan portfolio classes on a quarterly basis, but the entire balance is available to cover losses from any of the portfolio classes when those losses are confirmed. Management uses internal policies and bank regulatory guidance in periodically evaluating loans for collectability and incorporates historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. See Note 4, Loans and Allowance for Loan Losses, for additional information. Acquired Loans - Loans acquired in connection with business combinations are recorded at fair value with no carryover of any allowance for loan losses. Fair value of the loans involves estimating the amount and timing of principal and interest cash flows expected to be collected on the loans and discounting those cash flows at a market rate of interest. The excess of cash flows expected at acquisition over the estimated fair value is referred to as the accretable discount and is recognized into interest income over the remaining life of the loan. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the nonaccretable discount. These loans are accounted for under the Accounting Standard Codification (“ASC”) 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. The nonaccretable discount includes estimated future credit losses expected to be incurred over the life of the loan. Subsequent decreases in expected cash flows will require us to evaluate the need for an addition to the allowance for loan losses. Subsequent improvement in expected cash flows will result in the reversal of a corresponding amount of the nonaccretable discount, which we will then reclassify as accretable discount to be recognized into interest income over the remaining life of the loan. Loans acquired through business combinations that do meet the specific criteria of ASC 310-30 are individually evaluated each period to analyze expected cash flows. To the extent that the expected cash flows of a loan have decreased due to credit deterioration, we establish an allowance. Loans acquired through business combinations that do not meet the specific criteria of ASC 310-30 are accounted for under ASC 310-20. These loans are initially recorded at fair value, and include credit and interest rate marks associated with acquisition accounting adjustments. Purchase premiums or discounts are subsequently amortized as an adjustment to yield over the estimated contractual lives of the loans. There is no allowance for loan losses established at the acquisition date for acquired performing loans. An allowance for loan losses is recorded for any credit deterioration in these loans subsequent to acquisition. Acquired loans that met the criteria for impaired or nonaccrual of interest prior to the acquisition may be considered performing upon acquisition, regardless of whether the customer is contractually delinquent if we expect to fully collect the new carrying value (i.e., fair value) of the loans. As such, we may no longer consider the loan to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable discount. In addition, charge-offs on such loans would be first applied to the nonaccretable difference portion of the fair value adjustment. |
Loan Commitments and Related Financial Instruments | Loan Commitments and Related Financial Instruments – Financial instruments include off-balance sheet credit commitments issued to meet customer financing needs, such as commitments to make loans and commercial letters of credit. These financial instruments are recorded when they are funded. The face amount represents the exposure to loss, before considering customer collateral or ability to repay. The Company maintains a reserve for probable losses on off-balance sheet commitments which is included in Other Liabilities. |
Loans Serviced | Loans Serviced – The Bank administers secondary market mortgage programs available through the FHLB and the Federal National Mortgage Association and offers residential mortgage products and services to customers. The Bank originates single-family residential mortgage loans for immediate sale in the secondary market and retains the servicing of those loans. |
Transfers of Financial Assets | Transfers of Financial Assets – Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. |
Cash Surrender Value of Life Insurance | Cash Surrender Value of Life Insurance – The Company has purchased life insurance policies on certain employees. Life insurance is recorded at the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. |
Premises and Equipment | Premises and Equipment – Buildings, improvements, equipment, furniture and fixtures are carried at cost less accumulated depreciation and amortization. Land is carried at cost. Depreciation and amortization has been provided generally on the straight-line method and is computed over the estimated useful lives of the various assets as follows: buildings and improvements, including leasehold improvements – 10 to 40 years; and furniture and equipment – 3 to 15 years. Leasehold improvements are amortized over the shorter of the lease term or the indicated life. Repairs and maintenance are charged to operations as incurred, while major additions and improvements are capitalized. Gain or loss on retirement or disposal of individual assets is recorded as income or expense in the period of retirement or disposal. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets – Goodwill is calculated as the purchase premium, if any, after adjusting for the fair value of net assets acquired in purchase transactions. Goodwill is not amortized but is reviewed for potential impairment on at least an annual basis, with testing between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit. Other intangible assets represent purchased assets that can be distinguished from goodwill because of contractual or other legal rights. The Company’s other intangible assets have finite lives and are amortized on either an accelerated amortization method or straight line basis over their estimated lives, generally 10 years for deposit premiums and 10 to 15 years for other customer relationship intangibles. |
Mortgage Servicing Rights | Mortgage Servicing Rights – The estimated fair value of MSRs related to loans sold and serviced by the Company is recorded as an asset upon the sale of such loans. MSRs are amortized as a reduction to servicing income over the estimated lives of the underlying loans. MSRs are evaluated periodically for impairment by comparing the carrying amount to estimated fair value. Fair value is determined periodically through a discounted cash flows valuation performed by a third party. Significant inputs to the valuation include expected servicing income, net of expense, the discount rate and the expected life of the underlying loans. To the extent the amortized cost of the MSRs exceeds their estimated fair values, a valuation allowance is established for such impairment through a charge against servicing income on the consolidated statements of income. If the Company determines, based on subsequent valuations, that the impairment no longer exists or is reduced, the valuation allowance is reduced through a credit to earnings. |
Foreclosed Real Estate | Foreclosed Real Estate – Real estate acquired through foreclosure or other means is initially recorded at the fair value of the related real estate collateral at the transfer date less estimated selling costs, and subsequently at the lower of its carrying value or fair value less estimated costs to sell. Fair value is determined based on an independent third party appraisal of the property or, when appropriate, a recent sales offer. Costs to maintain such real estate are expensed as incurred. Costs that significantly improve the value of the properties are capitalized. Real estate acquired through f |
Investments in Real Estate Partnerships | Investments in Real Estate Partnerships – The Company has a 99% limited partner interest in several real estate partnerships in central Pennsylvania. These investments are affordable housing projects, which entitle the Company to tax deductions and credits that expire through 2025. The Company accounts for its investments in affordable housing projects under the proportional amortization method when the criteria are met, which is limited to one investment at December 31, 2018. Other investments are accounted for under the equity method of accounting. |
Advertising | Advertising – The Company expenses advertising as incurred. |
Repurchase Agreements | Repurchase Agreements – The Company enters into agreements under which it sells securities subject to an obligation to repurchase the same or similar securities which are included in short-term borrowings. Under these agreements, the Company may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Company to repurchase the assets. As a result, these repurchase agreements are accounted for as collateralized financing arrangements (i.e., secured borrowings) and not as a sale and subsequent repurchase of securities. The obligation to repurchase the securities is reflected as a liability in the Company’s consolidated balance sheets, while the securities underlying the repurchase agreements remaining are reflected in AFS securities. The repurchase obligation and underlying securities are not offset or netted as the Company does not enter into reverse repurchase agreements. The right of setoff for a repurchase agreement resembles a secured borrowing, whereby the collateral would be used to settle the fair value of the repurchase agreement should the Company be in default (e.g., fail to make an interest payment to the counterparty). For the repurchase agreements, the collateral is held by the Company in a segregated custodial account under a third party agreement. Repurchase agreements are secured by GSE MBSs and mature overnight. |
Share Compensation Plans | Share Compensation Plans – The Company has share compensation plans that cover employees and non-employee directors. Compensation expense relating to share-based payment transactions is measured based on the grant date fair value of the share award, including a Black-Scholes model for stock options. Compensation expense for all share awards is calculated and recognized over the employees’ or non-employee directors' service period, generally defined as the vesting period. |
Income Taxes | Income Taxes – Income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of enacted tax law to taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more likely than not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more likely than not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment. Deferred tax assets are reduced by a valuation allowance when, based on the weight of available evidence, it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company recognizes interest and penalties, if any, on income taxes as a component of income tax expense. |
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. |
Treasury Stock | Treasury Stock – Common stock shares repurchased are recorded as treasury stock at cost. |
Earnings Per Share | Earnings Per Share – Basic earnings per share represents income available to common stockholders divided by the weighted average number of common shares outstanding during the period. Restricted stock awards are included in weighted average common shares outstanding as they are earned. Diluted earnings per share includes additional common shares that would have been outstanding if dilutive potential common shares had been issued. Potential common shares that may be issued by the Company relate solely to outstanding stock options and restricted stock awards and are determined using the treasury stock method. Treasury shares are not deemed outstanding for earnings per share calculations. |
Comprehensive Income | Comprehensive Income – Comprehensive income consists of net income and OCI. OCI is limited to unrealized gains (losses) on securities available for sale for all years presented. Unrealized gains (losses) on securities available for sale, net of tax, was the sole component of AOCI |
Fair Value | Fair Value – Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in the Fair Value note to the consolidated financial statements. Fair value estimates involve uncertainties and matters of significant judgment. Changes in assumptions or in market conditions could significantly affect the estimates. |
Segment Reporting | Segment Reporting – The Company operates in one significant segment – Community Banking. The Company’s non-community banking activities, principally related to Wheatland, are insignificant to the consolidated financial statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements - ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The update implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On January 1, 2018, the Company adopted ASU 2014-09 and all subsequent amendments (collectively “ASC 606”). The majority of the Company's revenue comes from interest income, including loans and securities, that are outside the scope of ASC 606. The Company's services that fall within the scope of ASC 606 are presented within noninterest income on the consolidated statements of income and are recognized as revenue as the Company satisfies its obligation to the customer. Services within the scope of ASC 606 include service charges on deposit accounts, income from fiduciary investment management and brokerage activities and interchange fees from service charges on ATM and debit card transactions. ASC 606 did not result in a change to the accounting for any in-scope revenue streams; as such, no cumulative effect adjustment was recorded. ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The update enhances the reporting model for financial instruments to provide users of financial statements with more decision-useful information by updating certain aspects of recognition, measurement, presentation and disclosure of financial instruments. Among other changes, the update requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, and clarifies that entities should evaluate the need for a valuation allowance on a deferred tax asset related to available for sale securities in combination with the entities' other deferred tax assets. For public companies, this update was effective for interim and annual periods beginning after December 15, 2017. Our adoption of ASU 2016-01 on January 1, 2018, did not have a material effect on our consolidated financial condition or results of operations. Upon adoption, the fair value of the Company’s loan portfolio is now presented using an exit price method. Also, the Company is no longer required to disclose the methodologies used for estimating fair value of financial assets and liabilities that are not measured at fair value on a recurring or nonrecurring basis. The remaining requirements of this update did not have a material impact on the Company’s consolidated financial statements. ASU 2016-02, Leases (Topic 842). The guidance in the update supersedes the requirements in ASC Topic 840, Leases. The guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for leases with terms of more than 12 months. For public companies, this update will be effective for interim and annual periods beginning after December 15, 2018. In July 2018, the FASB issued ASU No. 2018-11, Targeted Improvements, which amends ASC 842, Leases to provide for an adoption option that will not require earlier periods to be restated at the adoption date. The Company currently leases land and space for certain branch offices under operating leases that will result in recognition of lease assets and lease liabilities on the consolidated balance sheets under the updates. The Company adopted this guidance effective January 1, 2019 and recorded a right-of-use asset of approximately $7,000,000 and lease liability of approximately $8,500,000. ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net carrying value at the amount expected to be collected on the financial assets. Under the updates, the income statement will reflect the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount of financial assets. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. The allowance for credit losses for purchased financial assets with a more-than-insignificant amount of credit deterioration since origination that are measured at amortized cost basis is determined in a similar manner to other financial assets measured at amortized cost basis; however, the initial allowance for credit losses is added to the purchase price rather than being reported as a credit loss expense. Only subsequent changes in the allowance for credit losses are recorded as a credit loss expense for these assets. Off-balance-sheet arrangements such as commitments to extend credit, guarantees, and standby letters of credit that are not considered derivatives under ASC 815 and are not unconditionally cancellable are also within the scope of this update. Credit losses relating to available for sale debt securities should be recorded through an allowance for credit losses. For public companies, the update is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. All entities may adopt the amendments in this update earlier as of fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. An entity will apply the amendments in this update on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company does not plan to early adopt this standard, but is working through implementation. In that regard, the Company has formed a cross-functional working group, under the direction of the Chief Financial Officer and the Chief Risk Officer. The working group is comprised of individuals from various functional areas including credit, risk management, finance and information technology. Our implementation plan includes, but is not not limited to, an assessment of processes, portfolio segmentation, model development, system requirements and the identification of data and resource needs.We are currently evaluating various loss estimation models. While we currently cannot reasonably estimate the impact of adopting this standard, we expect the impact will be influenced by the composition, characteristics and quality of our loan and securities portfolios, as well as the general economic conditions and forecasts at the adoption date. ASU 2016-15, Statement of Cash Flows (Topic 230) - Restricted Cash. The update requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. On January 1, 2018, the Company adopted ASU 2016-18 with no material impact on our consolidated financial condition or results of operations. ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The update simplifies how all entities assess goodwill for impairment by eliminating Step 2 from the goodwill impairment test. As amended, the goodwill impairment test will consist of one step comparing the fair value of a reporting unit with its carrying amount. An entity should recognize a goodwill impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. ASU 2017-04 will be effective for the Company on January 1, 2020, with earlier adoption permitted, and is not expected to have a material impact on the Company's consolidated financial statements. ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20). The update shortens the amortization period of certain callable debt securities held at a premium to the earliest call date unless applicable guidance related to certain pools of securities is applied to consider estimated prepayments. Under prior guidance, entities were generally required to amortize premiums on individual, non-pooled callable debt securities as a yield adjustment over the contractual life of the security. ASU 2017-08 does not change the accounting for callable debt securities held at a discount. On January 1, 2019, we adopted ASU 2016-18 with no material impact on our consolidated financial condition or results of operations. ASU 2017-09, Compensation - Stock Compensation (Topic 718). The update clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if all of the following are the same immediately before and after the change: (i) the award's fair value, (ii) the award's vesting conditions and (iii) the award's classification as an equity or liability instrument. On January 1, 2018, the Company adopted ASU 2017-09 with no material impact on our consolidated financial condition or results of operations. ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The update allowed entities to reclassify from AOCI to retained earnings the 'stranded' tax effects of accounting for income tax rate changes on items accounted for in AOCI which were impacted by tax reform enacted in December 2017. The impact of tax rate changes is recorded in income and items accounted for in AOCI could be left with such a stranded tax effect that could have those items appear to not reflect the appropriate tax rate. The FASB's changes are intended to improve the usefulness of information reported to financial statement users. The changes are effective for years beginning after December 31, 2018, with early adoption permitted. We elected to adopt the changes in December 2017. The amount transferred from AOCI to retained earnings totaled $229,000 and represented the impact of the Tax Law rate change to 21% at the date of enactment for the unrealized gains and losses on securities accounted for in AOCI. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement and should present a reconciliation of the beginning balance to the ending balance for each period for which a statement of comprehensive income is presented. The disclosure requirements amendment will be effective for the Company with its first interim reporting filing in 2019. The Company expects these changes will result in additional disclosures for the consolidated statement of changes in stockholders' equity. |
MERGERS AND ACQUISITIONS (Table
MERGERS AND ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Summary of Consideration Paid and Assets Acquired and Liabilities Assumed | The following table summarizes the consideration paid for Mercersburg and the estimated fair values of the assets acquired and liabilities assumed recognized at the acquisition date: (Dollars in thousands) Fair value of consideration transferred: Cash $ 4,866 Common stock issued 25,053 Total consideration transferred $ 29,919 Estimated fair values of assets acquired and (liabilities) assumed: Cash and cash equivalents $ 17,273 Securities available for sale 7,352 Loans 141,103 Premises and equipment 2,232 Core deposit intangible 3,840 Goodwill 11,873 Cash surrender value of life insurance 6,252 Deferred tax asset, net 1,323 Other assets 2,055 Deposits (160,433) Other liabilities (2,951) $ 29,919 |
Schedule Of Loans Acquired In Business Combination | The following table presents performing and PCI loans acquired, by loan class, at October 1, 2018. (in thousands) Performing PCI Total Commercial real estate: Owner-occupied $ 10,336 $ 1,800 $ 12,136 Non-owner occupied 4,405 672 5,077 Multi-family 3,005 722 3,727 Acquisition and development: 1-4 family residential construction 878 0 878 Commercial and land development 2,044 269 2,313 Commercial and industrial 22,433 5,696 28,129 Municipal 1,862 0 1,862 Residential mortgage: First lien 75,034 3,103 78,137 Home-equity - term 2,258 23 2,281 Home equity - lines of credit 3,144 0 3,144 Installment and other loans 3,233 186 3,419 Total loans acquired $ 128,632 $ 12,471 $ 141,103 |
Schedule Of Fair Value Adjustments Made To Amortized Cost Basis Loans | The following table presents the fair value adjustments made to the amortized cost basis of loans acquired at October 1, 2018. (in thousands) Gross amortized cost basis at acquisition $ 149,162 Market rate adjustment (3,464) Credit fair value adjustment on non-credit impaired loans (1,400) Credit fair value adjustment on impaired loans (3,195) Estimated fair value of acquired loans $ 141,103 |
Schedule Of Information About Purchased Credit Impaired Loans | The following table provides information about acquired PCI loans at October 1, 2018. (in thousands) Contractually required principal and interest at acquisition $ 21,587 Contractual cash flows not expected to be collected (nonaccretable discount) (6,873) Expected cash flows at acquisition 14,714 Interest component of expected cash flows (accretable discount) (2,243) Estimated fair value of acquired PCI loans $ 12,471 |
SECURITIES AVAILABLE FOR SALE (
SECURITIES AVAILABLE FOR SALE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Amortized Cost and Fair Value and Corresponding Amounts of Gross Unrealized Gains and Losses | The following table summarizes amortized cost and fair value of AFS securities, and the corresponding amounts of gross unrealized gains and losses recognized in AOCI, at December 31, 2018 and 2017. (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2018 States and political subdivisions $ 144,596 $ 1,919 $ 1,511 $ 145,004 GSE residential CMOs 110,421 332 2,689 108,064 Private label residential CMOs 144 0 1 143 Private label commercial CMOs 75,911 55 921 75,045 Asset-backed and other 138,535 126 1,073 137,588 Totals $ 469,607 $ 2,432 $ 6,195 $ 465,844 December 31, 2017 States and political subdivisions $ 153,803 $ 6,133 $ 478 $ 159,458 GSE residential MBSs 48,600 930 0 49,530 GSE residential CMOs 113,658 296 2,835 111,119 Private label residential CMOs 999 4 0 1,003 Private label commercial CMOs 7,809 0 156 7,653 Asset-backed and other 86,837 133 425 86,545 Totals $ 411,706 $ 7,496 $ 3,894 $ 415,308 |
Summary of Securities Available For Sale With Unrealized Losses | The following table summarizes AFS securities with unrealized losses at December 31, 2018 and 2017, aggregated by major security type and length of time in a continuous unrealized loss position. Less Than 12 Months 12 Months or More Total (Dollars in thousands) # of Securities Fair Value Unrealized Losses # of Securities Fair Value Unrealized Losses # of Securities Fair Value Unrealized Losses December 31, 2018 States and political subdivisions 27 $ 46,585 $ 662 6 $ 23,036 $ 849 33 $ 69,621 $ 1,511 GSE residential CMOs 1 18,037 122 7 46,168 2,567 8 64,205 2,689 Private label residential CMOs 1 143 1 0 0 0 1 143 1 Private label commercial CMOs 11 56,499 712 2 6,349 209 13 62,848 921 Asset-backed and other 6 78,900 859 3 10,808 214 9 89,708 1,073 Totals 46 $ 200,164 $ 2,356 18 $ 86,361 $ 3,839 64 $ 286,525 $ 6,195 December 31, 2017 States and political subdivisions 7 $ 24,577 $ 473 1 $ 5,585 $ 5 8 $ 30,162 $ 478 GSE residential CMOs 4 25,155 914 5 37,459 1,921 9 62,614 2,835 Private label commercial CMOs 2 7,653 156 0 0 0 2 7,653 156 Asset-backed and other 6 60,006 425 0 0 0 6 60,006 425 Totals 19 $ 117,391 $ 1,968 6 $ 43,044 $ 1,926 25 $ 160,435 $ 3,894 |
Summary of Amortized Cost and Fair Value by Contractual Maturity | The following table summarizes amortized cost and fair value of AFS securities by contractual maturity at December 31, 2018. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately. Available for Sale (Dollars in thousands) Amortized Cost Fair Value Due in one year or less $ 799 $ 800 Due after one year through five years 2,531 2,542 Due after five years through ten years 37,168 37,229 Due after ten years 104,098 104,433 CMOs 186,476 183,252 Asset-backed and other 138,535 137,588 $ 469,607 $ 465,844 |
Summary of Proceeds from Sale of Available for Sale Securities | The following table summarizes proceeds from sales of AFS securities and gross gains and gross losses for the years ended December 31. (Dollars in thousands) 2018 2017 2016 Proceeds from sale of AFS securities $ 156,364 $ 162,320 $ 64,742 Gross gains 1,681 1,477 1,468 Gross losses 675 287 48 |
LOANS AND ALLOWANCE FOR LOAN _2
LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Summary of Loan Portfolio, Excluding Residential Loans Held for Sale | The following table presents the loan portfolio by segment and class, excluding residential LHFS, at December 31, 2018 and December 31, 2017. (Dollars in thousands) 2018 2017 Commercial real estate: Owner-occupied $ 129,650 $ 116,811 Non-owner occupied 252,794 244,491 Multi-family 78,933 53,634 Non-owner occupied residential 100,367 77,980 Acquisition and development: 1-4 family residential construction 7,385 11,730 Commercial and land development 42,051 19,251 Commercial and industrial 160,964 115,663 Municipal 50,982 42,065 Residential mortgage: First lien 235,296 162,509 Home equity – term 12,208 11,784 Home equity – lines of credit 143,616 132,192 Installment and other loans 33,411 21,902 Total Loans (1) $ 1,247,657 $ 1,010,012 (1) Includes $135,009,000 of acquired loans at December 31, 2018. |
Summary of Ratings Based On Internal Risk Rating System | The following summarizes the Company’s loan portfolio ratings based on its internal risk rating system at December 31, 2018 and 2017: (Dollars in thousands) Pass Special Mention Non-Impaired Substandard Impaired - Substandard Doubtful PCI Loans Total December 31, 2018 Commercial real estate: Owner-occupied $ 121,903 $ 3,024 $ 987 $ 1,880 $ 0 $ 1,856 $ 129,650 Non-owner occupied 242,136 10,008 0 0 0 650 252,794 Multi-family 71,482 5,886 717 131 0 717 78,933 Non-owner occupied residential 98,125 736 1,197 309 0 0 100,367 Acquisition and development: 1-4 family residential construction 7,385 0 0 0 0 0 7,385 Commercial and land development 41,251 25 583 0 0 192 42,051 Commercial and industrial 150,286 2,278 2,940 286 0 5,174 160,964 Municipal 50,982 0 0 0 0 0 50,982 Residential mortgage: First lien 229,436 0 0 2,877 0 2,983 235,296 Home equity – term 12,170 0 0 16 0 22 12,208 Home equity – lines of credit 142,638 165 15 798 0 0 143,616 Installment and other loans 33,229 15 1 0 0 166 33,411 $ 1,201,023 $ 22,137 $ 6,440 $ 6,297 $ 0 $ 11,760 $ 1,247,657 December 31, 2017 Commercial real estate: Owner-occupied $ 113,240 $ 413 $ 1,921 $ 1,237 $ 0 $ 0 $ 116,811 Non-owner occupied 235,919 0 4,507 4,065 0 0 244,491 Multi-family 48,603 4,113 753 165 0 0 53,634 Non-owner occupied residential 76,373 142 1,084 381 0 0 77,980 Acquisition and development: 1-4 family residential construction 11,238 0 0 492 0 0 11,730 Commercial and land development 18,635 5 611 0 0 0 19,251 Commercial and industrial 113,162 2,151 0 350 0 0 115,663 Municipal 42,065 0 0 0 0 0 42,065 Residential mortgage: First lien 158,673 0 0 3,836 0 0 162,509 Home equity – term 11,762 0 0 22 0 0 11,784 Home equity – lines of credit 131,585 80 60 467 0 0 132,192 Installment and other loans 21,891 0 0 11 0 0 21,902 $ 983,146 $ 6,904 $ 8,936 $ 11,026 $ 0 $ 0 $ 1,010,012 |
Summary of Impaired Loans by Class | The following table, which excludes PCI loans, summarizes impaired loans by segment and class, segregated by those for which a specific allowance was required and those for which a specific allowance was not required at December 31, 2018 and 2017. The recorded investment in loans excludes accrued interest receivable due to insignificance. Related allowances established generally pertain to those loans in which loan forbearance agreements were in the process of being negotiated or updated appraisals were pending, and any partial charge-off will be recorded when final information is received. Impaired Loans with a Specific Allowance Impaired Loans with No Specific Allowance (Dollars in thousands) Recorded Investment (Book Balance) Unpaid Principal Balance (Legal Balance) Related Allowance Recorded Investment (Book Balance) Unpaid Principal Balance (Legal Balance) December 31, 2018 Commercial real estate: Owner-occupied $ 0 $ 0 $ 0 $ 1,880 $ 2,576 Multi-family 0 0 0 131 336 Non-owner occupied residential 0 0 0 309 632 Commercial and industrial 0 0 0 286 457 Residential mortgage: First lien 743 743 38 2,134 2,727 Home equity—term 0 0 0 16 23 Home equity—lines of credit 0 0 0 798 1,081 $ 743 $ 743 $ 38 $ 5,554 $ 7,832 December 31, 2017 Commercial real estate: Owner-occupied $ 0 $ 0 $ 0 $ 1,237 $ 2,479 Non-owner occupied 0 0 0 4,065 4,856 Multi-family 0 0 0 165 352 Non-owner occupied residential 0 0 0 381 669 Acquisition and development: 1-4 family residential construction 0 0 0 492 492 Commercial and industrial 0 0 0 350 495 Residential mortgage: First lien 872 872 42 2,964 3,706 Home equity—term 0 0 0 22 27 Home equity—lines of credit 0 0 0 467 628 Installment and other loans 9 9 9 2 33 $ 881 $ 881 $ 51 $ 10,145 $ 13,737 |
Summary of Average Recorded Investment in Impaired Loans and Related Interest Income | The following table, which excludes PCI loans, summarizes the average recorded investment in impaired loans and related recognized interest income for the years ended December 31, 2018, 2017 and 2016. 2018 2017 2016 (Dollars in thousands) Average Impaired Balance Interest Income Recognized Average Impaired Balance Interest Income Recognized Average Impaired Balance Interest Income Recognized Commercial real estate: Owner-occupied $ 1,495 $ 2 $ 1,000 $ 6 $ 1,758 $ 0 Non-owner occupied 1,842 0 392 0 6,831 0 Multi-family 148 0 182 0 216 0 Non-owner occupied residential 346 0 418 0 645 0 Acquisition and development: 1-4 family residential construction 181 0 154 0 0 0 Commercial and land development 1 0 0 0 3 0 Commercial and industrial 322 0 413 0 575 0 Residential mortgage: First lien 3,234 59 4,012 58 4,525 33 Home equity – term 19 0 61 0 98 0 Home equity – lines of credit 657 2 488 2 455 0 Installment and other loans 4 0 10 0 12 0 $ 8,249 $ 63 $ 7,130 $ 66 $ 15,118 $ 33 |
Schedule of Impaired Loans That Are TDRs | The following table presents impaired loans that are TDRs, with the recorded investment at December 31, 2018 and December 31, 2017. 2018 2017 (Dollars in thousands) Number of Contracts Recorded Investment Number of Contracts Recorded Investment Accruing: Commercial real estate: Owner-occupied 1 $ 39 1 $ 52 Residential mortgage: First lien 11 1,069 11 1,102 Home equity - lines of credit 1 24 1 29 13 1,132 13 1,183 Nonaccruing: Commercial real estate: Owner-occupied 1 37 1 57 Residential mortgage: First lien 8 658 8 715 Installment and other loans 0 0 1 3 9 695 10 775 22 $ 1,827 23 $ 1,958 |
Schedule of Number of Loans Modified | The following table presents the number of loans modified, and their pre-modification and post-modification investment balances for the years ended December 31, 2017, and 2016. There were no loans modified during 2018. (Dollars in thousands) Number of Contracts Pre- Modification Investment Balance Post- Modification Investment Balance December 31, 2017 Commercial real estate: Owner occupied 2 $ 119 $ 119 December 31, 2016 Commercial real estate: Non-owner occupied 1 $ 6,095 $ 6,095 Residential mortgage: First lien 2 265 265 Home equity - lines of credit 1 34 34 4 $ 6,394 $ 6,394 |
Schedule of Classes of Loan Portfolio Summarized by Aging Categories | The following table presents the classes of the loan portfolio summarized by aging categories of performing loans and nonaccrual loans at December 31, 2018 and 2017. Days Past Due Current 30-59 60-89 90+ (still accruing) Total Past Due Non- Accrual Total Loans December 31, 2018 Commercial real estate: Owner-occupied $ 125,887 $ 66 $ 0 $ 0 $ 66 $ 1,841 $ 127,794 Non-owner occupied 252,144 0 0 0 0 0 252,144 Multi-family 78,085 0 0 0 0 131 78,216 Non-owner occupied residential 99,803 226 29 0 255 309 100,367 Acquisition and development: 1-4 family residential construction 7,385 0 0 0 0 0 7,385 Commercial and land development 41,822 37 0 0 37 0 41,859 Commercial and industrial 154,988 411 105 0 516 286 155,790 Municipal 50,982 0 0 0 0 0 50,982 Residential mortgage: First lien 228,179 1,592 734 0 2,326 1,808 232,313 Home equity – term 11,487 678 5 0 683 16 12,186 Home equity – lines of credit 142,394 420 28 0 448 774 143,616 Installment and other loans 33,135 66 44 0 110 0 33,245 Subtotal 1,226,291 3,496 945 0 4,441 5,165 1,235,897 Loans acquired with credit deterioration: Commercial real estate: Owner-occupied 1,784 0 72 0 72 0 1,856 Non-owner occupied 650 0 0 0 0 0 650 Multi-family 717 0 0 0 0 0 717 Acquisition and development: Commercial and land development 192 0 0 0 0 0 192 Commercial and industrial 4,943 231 0 0 231 0 5,174 Residential mortgage: First lien 2,506 382 42 53 477 0 2,983 Home equity – term 17 5 0 0 5 0 22 Installment and other loans 149 13 0 4 17 0 166 Subtotal 10,958 631 114 57 802 0 11,760 $ 1,237,249 $ 4,127 $ 1,059 $ 57 $ 5,243 $ 5,165 $ 1,247,657 Days Past Due Current 30-59 60-89 90+ (still accruing) Total Past Due Non- Accrual Total Loans December 31, 2017 Commercial real estate: Owner-occupied $ 115,605 $ 4 $ 17 $ 0 $ 21 $ 1,185 $ 116,811 Non-owner occupied 240,426 0 0 0 0 4,065 244,491 Multi-family 53,469 0 0 0 0 165 53,634 Non-owner occupied residential 77,454 145 0 0 145 381 77,980 Acquisition and development: 1-4 family residential construction 11,238 0 0 0 0 492 11,730 Commercial and land development 19,226 25 0 0 25 0 19,251 Commercial and industrial 115,312 1 0 0 1 350 115,663 Municipal 42,065 0 0 0 0 0 42,065 Residential mortgage: First lien 155,387 3,333 1,055 0 4,388 2,734 162,509 Home equity – term 11,753 9 0 0 9 22 11,784 Home equity – lines of credit 131,208 474 72 0 546 438 132,192 Installment and other loans 21,749 141 1 0 142 11 21,902 $ 994,892 $ 4,132 $ 1,145 $ 0 $ 5,277 $ 9,843 $ 1,010,012 |
Schedule of Activity in Allowance for Loan Losses | The following table presents activity in the ALL for the years ended December 31, 2018, 2017 and 2016. Commercial Consumer (Dollars in thousands) Commercial Real Estate Acquisition and Development Commercial and Industrial Municipal Total Residential Mortgage Installment and Other Total Unallocated Total December 31, 2018 Balance, beginning of year $ 6,763 $ 417 $ 1,446 $ 84 $ 8,710 $ 3,400 $ 211 $ 3,611 $ 475 $ 12,796 Provision for loan losses (442) 396 209 14 177 363 165 528 95 800 Charge-offs (17) (7) 0 0 (24) (148) (292) (440) 0 (464) Recoveries 572 11 1 0 584 138 160 298 0 882 Balance, end of year $ 6,876 $ 817 $ 1,656 $ 98 $ 9,447 $ 3,753 $ 244 $ 3,997 $ 570 $ 14,014 December 31, 2017 Balance, beginning of year $ 7,530 $ 580 $ 1,074 $ 54 $ 9,238 $ 2,979 $ 144 $ 3,123 $ 414 $ 12,775 Provision for loan losses 38 (167) 333 30 234 531 174 705 61 1,000 Charge-offs (835) 0 (85) 0 (920) (180) (166) (346) 0 (1,266) Recoveries 30 4 124 0 158 70 59 129 0 287 Balance, end of year $ 6,763 $ 417 $ 1,446 $ 84 $ 8,710 $ 3,400 $ 211 $ 3,611 $ 475 $ 12,796 December 31, 2016 Balance, beginning of year $ 7,883 $ 850 $ 1,012 $ 58 $ 9,803 $ 2,870 $ 121 $ 2,991 $ 774 $ 13,568 Provision for loan losses 107 (270) 129 (4) (38) 532 116 648 (360) 250 Charge-offs (872) 0 (79) 0 (951) (577) (194) (771) 0 (1,722) Recoveries 412 0 12 0 424 154 101 255 0 679 Balance, end of year $ 7,530 $ 580 $ 1,074 $ 54 $ 9,238 $ 2,979 $ 144 $ 3,123 $ 414 $ 12,775 |
Summary of Ending Loan Balance Individually Evaluated for Impairment | The following table summarizes the ending loan balances individually evaluated for impairment based upon loan segment, as well as the related ALL loss allocation for each at December 31, 2018 and 2017. PCI loans are excluded from loans individually evaluated for impairment. Commercial Consumer (Dollars in thousands) Commercial Real Estate Acquisition and Development Commercial and Industrial Municipal Total Residential Mortgage Installment and Other Total Unallocated Total December 31, 2018 Loans allocated by: Individually evaluated for impairment $ 2,320 $ 0 $ 286 $ 0 $ 2,606 $ 3,691 $ 0 $ 3,691 $ 0 $ 6,297 Collectively evaluated for impairment 559,424 49,436 160,678 50,982 820,520 387,429 33,411 420,840 0 1,241,360 $ 561,744 $ 49,436 $ 160,964 $ 50,982 $ 823,126 $ 391,120 $ 33,411 $ 424,531 $ 0 $ 1,247,657 Allowance for loan losses allocated by: Individually evaluated for impairment $ 0 $ 0 $ 0 $ 0 $ 0 $ 38 $ 0 $ 38 $ 0 $ 38 Collectively evaluated for impairment 6,876 817 1,656 98 9,447 3,715 244 3,959 570 13,976 $ 6,876 $ 817 $ 1,656 $ 98 $ 9,447 $ 3,753 $ 244 $ 3,997 $ 570 $ 14,014 December 31, 2017 Loans allocated by: Individually evaluated for impairment $ 5,848 $ 492 $ 350 $ 0 $ 6,690 $ 4,325 $ 11 $ 4,336 $ 0 $ 11,026 Collectively evaluated for impairment 487,068 30,489 115,313 42,065 674,935 302,160 21,891 324,051 0 998,986 $ 492,916 $ 30,981 $ 115,663 $ 42,065 $ 681,625 $ 306,485 $ 21,902 $ 328,387 $ 0 $ 1,010,012 Allowance for loan losses allocated by: Individually evaluated for impairment $ 0 $ 0 $ 0 $ 0 $ 0 $ 42 $ 9 $ 51 $ 0 $ 51 Collectively evaluated for impairment 6,763 417 1,446 84 8,710 3,358 202 3,560 475 12,745 $ 6,763 $ 417 $ 1,446 $ 84 $ 8,710 $ 3,400 $ 211 $ 3,611 $ 475 $ 12,796 |
Schedule of Activity for the Accretable Yield of Purchased Impaired Loans | The following table provides activity for the accretable yield of purchased impaired loans for the year ended December 31, 2018. (Dollars in thousands) Accretable yield, beginning of year $ 0 New loans purchased 2,243 Accretion of income (178) Accretable yield, end of year $ 2,065 |
PREMISES AND EQUIPMENT (Tables)
PREMISES AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Summary of Premises and Equipment | The following table summarizes premises and equipment at December 31. (Dollars in thousands) 2018 2017 Land $ 7,825 $ 7,664 Buildings and improvements 31,987 31,154 Leasehold improvements 3,926 2,482 Furniture and equipment 22,998 22,023 Construction in progress 1,946 89 68,682 63,412 Less accumulated depreciation and amortization 30,481 28,603 $ 38,201 $ 34,809 |
Schedule of Minimum Rental Commitments | The following table summarizes minimum rental commitments for years ending December 31 under operating leases with maturities in excess of one year at December 31, 2018. (Dollars in thousands) 2019 $ 782 2020 757 2021 578 2022 470 2023 425 Thereafter 4,948 $ 7,960 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Change in Goodwill | The following table presents presents changes in goodwill for years ended December 31. (Dollars in thousands) 2018 2017 2016 Balance, beginning of year $ 719 $ 719 $ 0 Acquired goodwill 11,873 0 719 Balance, end of year $ 12,592 $ 719 $ 719 |
Schedule of Changes in Other Intangible Assets | The following table presents changes in other intangible assets for years ended December 31. (Dollars in thousands) 2018 2017 2016 Balance, beginning of year $ 356 $ 458 $ 207 Acquired CDI 3,840 0 0 Acquired other customer relationship intangibles 0 0 350 Amortization expense (286) (102) (99) Balance, end of year $ 3,910 $ 356 $ 458 |
Schedule of Components of Other Identifiable Intangible Assets | The following table presents the components of other identifiable intangible assets at December 31. 2018 2017 (Dollars in thousands) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Amortized intangible assets: Core deposit intangibles $ 3,840 $ 190 $ 0 $ 0 Other customer relationship intangibles 931 671 937 581 Total $ 4,771 $ 861 $ 937 $ 581 |
Schedule of Estimated Amortization Expense | The following table presents estimated aggregate amortization expense for years ending December 31. (Dollars in thousands) 2019 $ 788 2020 687 2021 598 2022 513 2023 429 Thereafter 895 $ 3,910 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Tax Expense | The following table summarizes income tax expense for years ended December 31. (Dollars in thousands) 2018 2017 2016 Current expense $ 1,097 $ 1,260 $ 1,498 Deferred expense (benefit) 543 443 (232) Expense due to enactment of federal tax reform legislation 0 2,635 0 Income tax expense $ 1,640 $ 4,338 $ 1,266 |
Reconciliation of Effective Income Tax Rate to Statutory Federal Rate | The following table reconciles the Company's effective income tax rate to its statutory federal rate for years ended December 31. 2018 2017 2016 Statutory federal tax rate 21.0 % 34.0 % 34.0 % Increase (decrease) resulting from: Tax exempt interest income (7.7) % (13.0) % (16.0) % Income from life insurance (1.7) % (2.4) % (4.7) % Disallowed interest expense 0.8 % 1.0 % 1.0 % Low-income housing credits and related expense (2.5) % (4.6) % (7.2) % Merger related 0.6 % 0.0 % 0.0 % Expense due to enactment of federal tax reform legislation 0.0 % 21.2 % 0.0 % Regulatory settlement 0.0 % 0.0 % 4.3 % Change in statutory federal tax rate 0.0 % 0.0 % 2.3 % Other 0.9 % (1.3) % 2.3 % Effective income tax rate 11.4 % 34.9 % 16.0 % |
Summary of Deferred Tax Assets and Liabilities | The following table summarizes the Company's deferred tax assets and liabilities at December 31. (Dollars in thousands) 2018 2017 Deferred tax assets: Allowance for loan losses $ 3,143 $ 2,919 Deferred compensation 723 355 Retirement and salary continuation plans 1,416 1,301 Share-based compensation 742 597 Off-balance sheet reserves 219 207 Nonaccrual loan interest 537 258 Net unrealized losses on securities available for sale 791 0 Purchase accounting adjustments 1,795 39 Bonus accrual 470 25 Low-income housing credit carryforward 641 2,313 Other 321 390 Total deferred tax assets 10,798 8,404 Deferred tax liabilities: Depreciation 458 488 Net unrealized gains on securities available for sale 0 757 Mortgage servicing rights 590 536 Purchase accounting adjustments 1,021 251 Other 150 122 Total deferred tax liabilities 2,219 2,154 Net deferred tax asset, included in Other Assets $ 8,579 $ 6,250 |
SHARE-BASED COMPENSATION PLANS
SHARE-BASED COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Nonvested Restricted Shares Activity | The following table presents a summary of nonvested restricted shares activity for 2018. Shares Weighted Average Grant Date Fair Value Nonvested shares, beginning of year 268,411 $ 18.18 Granted 85,817 25.63 Forfeited (37,392) 18.72 Vested (41,424) 18.84 Nonvested shares, end of year 275,412 $ 20.33 |
Schedule of Restricted Shares Compensation Expense | The following table presents restricted shares compensation expense, with tax benefit information, and fair value of shares vested at December 31. (Dollars in thousands) 2018 2017 2016 Restricted share award expense $ 1,479 $ 1,369 $ 941 Restricted share award tax benefit 374 465 320 Fair value of shares vested 1,074 303 237 |
Summary of Outstanding Stock Options Activity | The following table presents a summary of outstanding stock options activity for 2018. Shares Weighted Average Exercise Price Outstanding, beginning of year 59,583 $ 25.89 Forfeited (2,235) 28.02 Expired (15,214) 30.11 Exercised (1,150) 21.14 Options outstanding and exercisable, end of year 40,984 $ 24.34 |
Schedule of Information Pertaining to Options Outstanding and Exercisable | The following table presents information pertaining to options outstanding and exercisable at December 31, 2018. Range of Exercise Prices Number Outstanding and Exercisable Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price $21.14 - $24.99 31,519 1.40 $ 21.51 $25.00 - $34.99 2,792 1.25 25.76 $35.00 - $37.59 6,673 0.56 37.10 $21.14 - $37.59 40,984 1.25 $ 24.34 |
Employee Stock Ownership Plan | The following table presents information for the employee stock purchase plan for years ended December 31. (Dollars in thousands except share information) 2018 2017 2016 Shares purchased 5,907 6,632 6,334 Weighted average price of shares purchased $ 23.04 $ 20.57 $ 16.64 Compensation expense recognized 14 17 17 Tax benefits 3 6 6 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Banking and Thrift [Abstract] | |
Summary of Composition of Deposits | The following table summarizes deposits by type at December 31. 2018 2017 (Dollars in thousands) Noninterest-bearing $ 204,843 $ 162,343 NOW and money market 856,520 687,936 Savings 113,515 95,148 Time ($250,000 or less) 343,551 252,200 Time (over $250,000) 40,327 21,888 Total $ 1,558,756 $ 1,219,515 |
Scheduled Maturities of Time Deposits | The following table summarizes scheduled maturities of time deposits for years ending December 31. (Dollars in thousands) 2019 $ 259,909 2020 97,008 2021 14,486 2022 8,603 2023 2,941 Thereafter 931 $ 383,878 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Activity in Loans to Related Parties | The following table presents the aggregate activity in loans to related parties during 2018. (Dollars in thousands) Balance, beginning of year $ 673 New loans 1,080 Repayments (728) Director and officer relationship changes 16 Balance, end of year $ 1,041 |
SHORT-TERM BORROWINGS (Tables)
SHORT-TERM BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Summary of the Use of Short-Term Borrowings | The following table summarizes the use of these short-term borrowings at and for the years ended December 31. (Dollars in thousands) 2018 2017 2016 Balance at year-end $ 55,000 $ 50,000 $ 52,000 Weighted average interest rate at year-end 2.76 % 1.21 % 0.76 % Average balance during the year $ 71,457 $ 54,610 $ 17,841 Average interest rate during the year 2.09 % 1.08 % 0.61 % Maximum month-end balance during the year $ 103,000 $ 72,000 $ 52,000 |
Summary of the Use of Securities Sold Under Agreements to Repurchase | The following table provides additional details for repurchase agreements at and for the years ended December 31. (Dollars in thousands) 2018 2017 2016 Balance at year-end $ 9,069 $ 43,576 $ 35,864 Weighted average interest rate at year-end 1.22 % 0.56 % 0.20 % Average balance during the year $ 9,715 $ 43,205 $ 38,546 Average interest rate during the year 0.82 % 0.45 % 0.20 % Maximum month-end balance during the year $ 14,591 $ 55,270 $ 52,693 Fair value of securities underlying the agreements at year-end 17,942 53,485 56,201 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | The following table presents components of the Company’s long-term debt at December 31. Amount Weighted Average rate (Dollars in thousands) 2018 2017 2018 2017 FHLB fixed rate advances maturing: 2019 $ 40,000 $ 40,000 1.86 % 1.86 % 2020 40,350 40,350 1.76 % 1.76 % 80,350 80,350 1.81 % 1.81 % FHLB amortizing advance requiring monthly principal and interest payments, maturing: 2025 3,100 3,465 4.74 % 4.74 % Total FHLB Advances $ 83,450 $ 83,815 1.92 % 1.93 % |
Summary of Future Principal Payments Required | The following table summarizes the aggregate amount of future principal payments required on these borrowings at December 31, 2018: Years Ending December 31, (Dollars in thousands) 2019 $ 40,382 2020 40,751 2021 421 2022 441 2023 462 Thereafter 993 $ 83,450 |
SHAREHOLDERS_ EQUITY AND REGU_2
SHAREHOLDERS’ EQUITY AND REGULATORY CAPITAL (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Actual and Required Capital Amounts and Ratios | The following table presents capital amounts and ratios at December 31, 2018 and December 31, 2017. Actual For Capital Adequacy Purposes (includes applicable capital conservation buffer) To Be Well Capitalized Under Prompt Corrective Action Regulations (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio December 31, 2018 Total Capital to risk weighted assets Consolidated $ 206,988 15.6 % $ 131,393 9.875 % n/a n/a Bank 177,892 13.4 % 131,286 9.875 % $ 132,948 10.0 % Tier 1 Capital to risk weighted assets Consolidated 160,117 12.0 % 104,782 7.875 % n/a n/a Bank 162,880 12.3 % 104,696 7.875 % 106,358 8.0 % Common Tier 1 (CET1) to risk weighted assets Consolidated 160,117 12.0 % 84,823 6.375 % n/a n/a Bank 162,880 12.3 % 84,754 6.375 % 86,416 6.5 % Tier 1 Capital to average assets Consolidated 160,117 8.4 % 76,089 4.0 % n/a n/a Bank 162,880 8.6 % 76,113 4.0 % 95,142 5.0 % December 31, 2017 Total Capital to risk weighted assets Consolidated $ 152,386 13.3 % $ 106,040 9.250 % n/a n/a Bank 148,997 13.0 % 105,747 9.250 % $ 114,321 10.0 % Tier 1 Capital to risk weighted assets Consolidated 138,774 12.1 % 83,112 7.250 % n/a n/a Bank 135,385 11.8 % 82,883 7.250 % 91,457 8.0 % Common Tier 1 (CET1) to risk weighted assets Consolidated 138,774 12.1 % 65,917 5.750 % n/a n/a Bank 135,385 11.8 % 65,734 5.750 % 74,308 6.5 % Tier 1 Capital to average assets Consolidated 138,774 8.9 % 62,042 4.0 % n/a n/a Bank 135,385 8.7 % 62,066 4.0 % 77,582 5.0 % |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following table presents earnings per share for years ended December 31. (In thousands, except per share data) 2018 2017 2016 Net income $ 12,805 $ 8,090 $ 6,628 Weighted average shares outstanding - basic 8,360 8,070 8,059 Dilutive effect of share-based compensation 177 156 86 Weighted average shares outstanding - diluted 8,537 8,226 8,145 Per share information: Basic earnings per share $ 1.53 $ 1.00 $ 0.82 Diluted earnings per share 1.50 0.98 0.81 |
FINANCIAL INSTRUMENTS WITH OF_2
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Commitments and Conditional Obligations | The following table presents these contract, or notional, amounts at December 31. (Dollars in thousands) 2018 2017 Commitments to fund: Home equity lines of credit $ 160,971 $ 139,281 1-4 family residential construction loans 13,002 11,420 Commercial real estate, construction and land development loans 31,133 44,592 Commercial, industrial and other loans 147,518 145,394 Standby letters of credit 13,909 12,273 |
Schedule of Net Amount Expensed (Recovered) For This Off- Balance Sheet Credit Exposures Reserve | The following table presents the net amount expensed for this off-balance sheet credit exposures reserve for years ended December 31. (Dollars in thousands) 2018 2017 2016 Off-balance sheet credit exposures expense $ 182 $ 32 $ 312 |
Schedule of MPF Program Recourse Loss Expense | The following table presents the net amounts expensed (recovered) for years ended December 31. (Dollars in thousands) 2018 2017 2016 MPF program recourse loss expense (recovery) $ (135) $ 25 $ 18 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary of Assets Measured at Fair Value on a Recurring Basis | The following table summarizes assets measured at fair value on a recurring basis at December 31. AFS Securities (Dollars in Thousands) Level 1 Level 2 Level 3 Total Fair Value Measurements December 31, 2018 States and political subdivisions $ 0 $ 145,004 $ 0 $ 145,004 GSE residential CMOs 0 108,064 0 108,064 Private label residential CMOs 0 143 0 143 Private label commercial CMOs 0 67,836 7,209 75,045 Asset-backed and other 0 137,588 0 137,588 Totals $ 0 $ 458,635 $ 7,209 $ 465,844 December 31, 2017 States and political subdivisions $ 0 $ 159,458 $ 0 $ 159,458 GSE residential MBSs 0 49,530 0 49,530 GSE residential CMOs 0 111,119 0 111,119 Private label residential CMOs 0 1,003 0 1,003 Private label commercial CMOs 0 7,653 0 7,653 Asset-backed and other 0 86,545 0 86,545 Totals $ 0 $ 415,308 $ 0 $ 415,308 |
Summary of Assets Measured at Fair Value on Nonrecurring Basis | The following table summarizes assets measured at fair value on a nonrecurring basis at December 31. (Dollars in thousands) Level 1 Level 2 Level 3 Total Fair Value Measurements December 31, 2018 Impaired loans Commercial real estate: Owner-occupied $ 0 $ 0 $ 1,087 $ 1,087 Multi-family 0 0 131 131 Non-owner occupied residential 0 0 278 278 Commercial and industrial 0 0 25 25 Residential mortgage: First lien 0 0 1,121 1,121 Home equity - lines of credit 0 0 409 409 Total impaired loans $ 0 $ 0 $ 3,051 $ 3,051 December 31, 2017 Impaired loans Commercial real estate: Owner-occupied $ 0 $ 0 $ 430 $ 430 Non-owner occupied 0 0 4,066 4,066 Multi-family 0 0 165 165 Non-owner occupied residential 0 0 344 344 Commercial and industrial 0 0 53 53 Residential mortgage: First lien 0 0 1,951 1,951 Home equity - lines of credit 0 0 161 161 Installment and other loans 0 0 3 3 Total impaired loans $ 0 $ 0 $ 7,173 $ 7,173 |
Schedule of Additional Qualitative Information | The following table presents additional qualitative information about assets measured on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine fair value. Fair Value Estimate Valuation Techniques Unobservable Input Range December 31, 2018 Impaired loans $ 3,051 Appraisal of collateral Management adjustments on appraisals for property type and recent activity 5% - 75% discount - Management adjustments for liquidation expenses 6% - 20% discount December 31, 2017 Impaired loans $ 7,173 Appraisal of collateral Management adjustments on appraisals for property type and recent activity 7% - 75% discount - Management adjustments for liquidation expenses 0% - 20% discount |
Schedule of Estimated Fair Values of Financial Instruments | The following table presents the carrying amounts and estimated fair values of financial assets and liabilities at December 31. (Dollars in thousands) Carrying Amount Fair Value Level 1 Level 2 Level 3 December 31, 2018 Financial Assets Cash and due from banks $ 26,156 $ 26,156 $ 26,156 $ 0 $ 0 Interest-bearing deposits with banks 45,664 45,664 45,664 0 0 Federal funds sold 16,995 16,995 16,995 0 0 Restricted investments in bank stock 10,842 n/a n/a n/a n/a AFS securities 465,844 465,844 0 458,635 7,209 Loans held for sale 3,340 3,413 0 3,413 0 Loans, net of allowance for loan losses 1,233,643 1,229,645 0 0 1,229,645 Accrued interest receivable 5,927 5,927 0 2,853 3,074 Financial Liabilities Deposits 1,558,756 1,555,912 0 1,555,912 0 Short-term borrowings 64,069 64,069 0 64,069 0 Long-term debt 83,450 82,951 0 82,951 0 Subordinated notes 31,859 31,256 0 31,256 0 Accrued interest payable 1,301 1,301 0 1,301 0 Off-balance sheet instruments 0 0 0 0 0 December 31, 2017 Financial Assets Cash and due from banks $ 21,734 $ 21,734 $ 21,734 $ 0 $ 0 Interest-bearing deposits with banks 8,073 8,073 8,073 0 0 Restricted investments in bank stock 9,997 n/a n/a n/a n/a AFS securities 415,308 415,308 0 415,308 0 Loans held for sale 6,089 6,272 0 6,272 0 Loans, net of allowance for loan losses 997,216 994,617 0 0 994,617 Accrued interest receivable 5,048 5,048 0 2,580 2,468 Financial Liabilities Deposits 1,219,515 1,213,288 0 1,213,288 0 Short-term borrowings 93,576 93,576 0 93,576 0 Long-term debt 83,815 83,949 0 83,949 0 Accrued interest payable 495 495 0 495 0 Off-balance sheet instruments 0 0 0 0 0 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Noninterest Income Disaggregated by Revenue Source | The following table presents our noninterest income disaggregated by revenue source for the years ended December 31. (Dollars in thousands) 2018 2017 2016 Noninterest income Service charges on deposits $ 3,578 $ 3,392 $ 3,285 Trust and investment management income 6,576 6,400 5,091 Brokerage income 2,035 1,896 1,933 Merchant and bankcard fees (interchange income) 2,821 2,618 2,563 Revenue from contracts with customers 15,010 14,306 12,872 Other service charges 1,392 673 591 Mortgage banking activities 2,663 2,919 3,412 Income from life insurance 1,463 1,109 1,099 Other income 320 190 345 Investment securities gains 1,006 1,190 1,420 Total noninterest income $ 21,854 $ 20,387 $ 19,739 |
ORRSTOWN FINANCIAL SERVICES, _2
ORRSTOWN FINANCIAL SERVICES, INC. (PARENT COMPANY ONLY) CONDENSED FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Balance Sheets | Condensed Balance Sheets December 31, (Dollars in thousands) 2018 2017 Assets Cash in Orrstown Bank $ 28,596 $ 703 Deposits with other banks 0 214 Total cash 28,596 917 Investment in Orrstown Bank 175,299 140,429 Other assets 2,057 4,067 Total assets $ 205,952 $ 145,413 Liabilities Subordinated notes $ 31,859 $ 0 Accrued interest and other liabilities 660 648 Total liabilities 32,519 648 Shareholders’ Equity Common stock 491 435 Additional paid-in capital 151,678 125,458 Retained earnings 24,472 16,042 Accumulated other comprehensive income (loss) (2,972) 2,845 Treasury stock (236) (15) Total shareholders’ equity 173,433 144,765 Total liabilities and shareholders’ equity $ 205,952 $ 145,413 |
Condensed Statements of Income | Condensed Statements of Income For the Years Ended December 31, (Dollars in thousands) 2018 2017 2016 Income Dividends from bank subsidiary $ 4,450 $ 0 $ 2,200 Interest income from bank subsidiary 7 15 38 Other income 102 61 62 Total income 4,559 76 2,300 Expenses Interest on short-term borrowings 57 0 0 Interest on subordinated notes 73 0 0 Total interest expense 130 0 0 Share-based compensation 205 247 216 Management fee to Bank 1,042 501 504 Merger related expenses 1,545 0 0 Other expenses 656 1,116 2,152 Total expenses 3,578 1,864 2,872 Income (loss) before income tax benefit and equity in undistributed income of subsidiaries 981 (1,788) (572) Income tax benefit (735) (596) (606) Income (loss) before equity in undistributed income of subsidiaries 1,716 (1,192) 34 Equity in undistributed income of subsidiaries 11,089 9,282 6,594 Net income $ 12,805 $ 8,090 $ 6,628 |
Condensed Statements of Cash Flows | Condensed Statements of Cash Flows For the Years Ended December 31, (Dollars in thousands) 2018 2017 2016 Cash flows from operating activities: Net income $ 12,805 $ 8,090 $ 6,628 Adjustments to reconcile net income to cash provided by (used in) operating activities: Amortization 3 0 0 Deferred income taxes 22 16 4 Equity in undistributed income of subsidiaries (11,089) (9,282) (6,594) Share-based compensation 205 247 216 Net change in other liabilities 12 (35) (6) Net change in other assets 2,039 (377) (849) Net cash provided by (used in) operating activities 3,997 (1,341) (601) Cash flows from investing activities: Capital contributed to subsidiaries 0 (6,100) 0 Net cash paid for acquisitions (4,597) 0 0 Other, net 0 0 (500) Net cash used in investing activities (4,597) (6,100) (500) Cash flows from financing activities: Dividends paid (4,375) (3,488) (2,898) Proceeds from issuance of subordinated notes, net of costs 31,857 0 0 Proceeds from issuance of common stock 1,448 1,276 847 Payments to repurchase common stock (651) 0 (631) Net cash provided by (used in) financing activities 28,279 (2,212) (2,682) Net increase (decrease) in cash 27,679 (9,653) (3,783) Cash, beginning 917 10,570 14,353 Cash, ending $ 28,596 $ 917 $ 10,570 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- CASH (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Text Block [Abstract] | ||
Average balances | $ 10,983 | $ 1,395 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Loans (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Maturity of interest bearing deposits | 90 days |
Evaluation period to return non accrual TDRs to accrual status | 6 months |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Loans Serviced (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Balance of loans serviced for others | $ 360,322 | $ 334,802 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Premises and Equipment (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Buildings and improvements, including leasehold improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Buildings and improvements, including leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 40 years |
Furniture and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Furniture and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 15 years |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill and Other Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Deposit premiums | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated life | 10 years |
Minimum | Customer lists | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated life | 10 years |
Maximum | Customer lists | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated life | 15 years |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Mortgage Servicing Rights (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Balance of mortgage servicing rights | $ 3,180 | $ 2,897 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Foreclosed Real Estate (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Foreclosed real estate | $ 1,133 | $ 961 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Investments in Real Estate Partnerships (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015investment | |
Accounting Policies [Abstract] | ||||
Limited partner interest (as a percent) | 99.00% | |||
Number of investments accounted for under the proportional amortization method | investment | 1 | |||
Recorded investment in real estate partnerships | $ 3,872 | $ 4,416 | ||
Investments accounted for under proportional amortization method | 1,562 | 1,776 | ||
Losses accounted for under the equity method | 331 | 277 | $ 350 | |
Losses on investments accounted for under proportional amortization method | 214 | 217 | 191 | |
Federal tax credits | $ 578 | $ 1,010 | $ 736 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advertising (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||
Advertising expense | $ 418 | $ 631 | $ 763 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Segment Reporting (Details) | 12 Months Ended |
Dec. 31, 2017segment | |
Accounting Policies [Abstract] | |
Number of significant segments | 1 |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Dec. 31, 2017 |
Retained Earnings Adjustments [Line Items] | ||
Reclassification from accumulated other comprehensive income to retained earnings tax effect | $ 0 | |
Retained Earnings | ||
Retained Earnings Adjustments [Line Items] | ||
Reclassification from accumulated other comprehensive income to retained earnings tax effect | (229) | |
Accumulated Other Comprehensive Income (Loss) | ||
Retained Earnings Adjustments [Line Items] | ||
Reclassification from accumulated other comprehensive income to retained earnings tax effect | $ 229 | |
Subsequent Event | ASU 2016-02 | ||
Retained Earnings Adjustments [Line Items] | ||
Right-of-use asset | $ 7,000 | |
Lease liability | $ 8,500 |
MERGERS AND ACQUISITIONS - Narr
MERGERS AND ACQUISITIONS - Narrative (Details) $ / shares in Units, $ in Thousands | Oct. 23, 2018$ / shares | Oct. 01, 2018USD ($)$ / sharesshares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($) |
Business Acquisition [Line Items] | ||||||
Shares of common stock issued for acquisition (in shares) | shares | 1,052,635 | 0 | 0 | |||
Goodwill | $ 12,592 | $ 719 | $ 719 | $ 0 | ||
Unaudited pro forma net income | 15,717 | 8,929 | ||||
Pro forma revenue | 92,996 | 79,659 | ||||
Merger related expenses | 3,197 | 0 | $ 0 | |||
Assets | 1,934,388 | 1,558,849 | ||||
Loans | 1,233,643 | 997,216 | ||||
Deposits | 1,558,756 | $ 1,219,515 | ||||
Other Expenses | ||||||
Business Acquisition [Line Items] | ||||||
Merger related expenses | 630 | |||||
Information Systems | ||||||
Business Acquisition [Line Items] | ||||||
Merger related expenses | 1,065 | |||||
Investment Banking | ||||||
Business Acquisition [Line Items] | ||||||
Merger related expenses | 1,502 | |||||
Core Deposit Intangibles | ||||||
Business Acquisition [Line Items] | ||||||
Amortization Period | 10 years | |||||
Mercersburg Financial Corporation | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of interests acquired | 100.00% | |||||
Cash paid | $ 4,866 | |||||
Cash paid per acquiree shares (in usd per share) | $ / shares | $ 40 | |||||
Total Consideration Transferred | $ 29,919 | |||||
Total assets acquired | 181,430 | |||||
Loans acquired | 141,103 | |||||
Securities available for sale | 7,352 | |||||
Total liabilities assumed | 163,384 | |||||
Deposits | 160,433 | |||||
Goodwill | 11,873 | |||||
Core deposit intangibles | $ 3,840 | |||||
Mercersburg Financial Corporation | Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Closing stock price per share (in shares) | $ / shares | $ 23.80 | |||||
Mercersburg Financial Corporation | Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Shares of common stock issued for acquisition (in shares) | shares | 1,052,635 | |||||
Common stock for each share converted (in shares) | shares | 1.5291 | |||||
Hamilton Bancorp Inc. | Hamilton Bancorp Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Assets | 496,254 | |||||
Loans | 369,457 | |||||
Deposits | $ 384,171 | |||||
Shares, Outstanding | shares | 3,416,414 | |||||
Hamilton Bancorp Inc. | Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Cash paid per acquiree shares (in usd per share) | $ / shares | $ 4.10 | |||||
Acquisition stock exchange ratio | 0.54 |
MERGERS AND ACQUISITIONS - Summ
MERGERS AND ACQUISITIONS - Summary of Consideration Paid and Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Oct. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Estimated Fair Value Assets Acquired, and (Liabilities) Assumed | |||||
Goodwill | $ 12,592 | $ 719 | $ 719 | $ 0 | |
Mercersburg Financial Corporation | |||||
Consideration | |||||
Cash | $ 4,866 | ||||
Common stock issued | 25,053 | ||||
Total Consideration Transferred | 29,919 | ||||
Estimated Fair Value Assets Acquired, and (Liabilities) Assumed | |||||
Cash and cash equivalents | 17,273 | ||||
Securities available for sale | 7,352 | ||||
Loans | 141,103 | ||||
Premises and Equipment | 2,232 | ||||
Core deposit intangibles | 3,840 | ||||
Goodwill | 11,873 | ||||
Cash surrender value of life insurance | 6,252 | ||||
Deferred tax assets, net | 1,323 | ||||
Other Assets | 2,055 | ||||
Deposits | (160,433) | ||||
Other liabilities | (2,951) | ||||
Total identifiable net assets | $ 29,919 |
MERGERS AND ACQUISITIONS - Sche
MERGERS AND ACQUISITIONS - Schedule of Loans Acquired in Business Combination (Details) $ in Thousands | Oct. 01, 2018USD ($) |
Business Acquisition [Line Items] | |
Performing loans | $ 128,632 |
PCI Loans | 12,471 |
Total loans | 141,103 |
Commercial Real Estate | Owner-occupied | |
Business Acquisition [Line Items] | |
Performing loans | 10,336 |
PCI Loans | 1,800 |
Total loans | 12,136 |
Commercial Real Estate | Non-owner occupied | |
Business Acquisition [Line Items] | |
Performing loans | 4,405 |
PCI Loans | 672 |
Total loans | 5,077 |
Commercial Real Estate | Multi-family | |
Business Acquisition [Line Items] | |
Performing loans | 3,005 |
PCI Loans | 722 |
Total loans | 3,727 |
Acquisition and development | 1-4 family residential construction | |
Business Acquisition [Line Items] | |
Performing loans | 878 |
PCI Loans | 0 |
Total loans | 878 |
Acquisition and development | Commercial and land development | |
Business Acquisition [Line Items] | |
Performing loans | 2,044 |
PCI Loans | 269 |
Total loans | 2,313 |
Commercial and industrial | |
Business Acquisition [Line Items] | |
Performing loans | 22,433 |
PCI Loans | 5,696 |
Total loans | 28,129 |
Municipal | |
Business Acquisition [Line Items] | |
Performing loans | 1,862 |
PCI Loans | 0 |
Total loans | 1,862 |
Residential mortgage | First lien | |
Business Acquisition [Line Items] | |
Performing loans | 75,034 |
PCI Loans | 3,103 |
Total loans | 78,137 |
Residential mortgage | Home equity – term | |
Business Acquisition [Line Items] | |
Performing loans | 2,258 |
PCI Loans | 23 |
Total loans | 2,281 |
Residential mortgage | Home equity lines of credit | |
Business Acquisition [Line Items] | |
Performing loans | 3,144 |
PCI Loans | 0 |
Total loans | 3,144 |
Installment and other loans | |
Business Acquisition [Line Items] | |
Performing loans | 3,233 |
PCI Loans | 186 |
Total loans | $ 3,419 |
MERGERS AND ACQUISITIONS - Sc_2
MERGERS AND ACQUISITIONS - Schedule of Fair Value Adjustments Made to the Amortized Cost Basis of Loans (Details) - Mercersburg Financial Corporation $ in Thousands | Oct. 01, 2018USD ($) |
Business Acquisition [Line Items] | |
Gross amortized cost basis at acquisition | $ 149,162 |
Market rate adjustment | (3,464) |
Credit fair value adjustment on non-credit impaired loans | (1,400) |
Credit fair value adjustment on impaired loans | (3,195) |
Estimated fair value of acquired loans | $ 141,103 |
MERGERS AND ACQUISITIONS - Info
MERGERS AND ACQUISITIONS - Information About Acquired PCI Loans (Details) - Mercersburg Financial Corporation $ in Thousands | Oct. 01, 2018USD ($) |
Business Acquisition [Line Items] | |
Contractually required principal and interest at acquisition | $ 21,587 |
Contractual cash flows not expected to be collected (nonaccretable discount) | (6,873) |
Expected cash flows at acquisition | 14,714 |
Interest component of expected cash flows (accretable discount) | (2,243) |
Estimated Fair value of acquired PCI loans | $ 12,471 |
SECURITIES AVAILABLE FOR SALE -
SECURITIES AVAILABLE FOR SALE - Summary of Amortized Cost and Fair Value and Corresponding Amounts of Gross Unrealized Gains and Losses (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 469,607 | $ 411,706 |
Gross Unrealized Gains | 2,432 | 7,496 |
Gross Unrealized Losses | 6,195 | 3,894 |
Fair Value | 465,844 | 415,308 |
States and political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 144,596 | 153,803 |
Gross Unrealized Gains | 1,919 | 6,133 |
Gross Unrealized Losses | 1,511 | 478 |
Fair Value | 145,004 | 159,458 |
GSE residential MBSs | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 48,600 | |
Gross Unrealized Gains | 930 | |
Gross Unrealized Losses | 0 | |
Fair Value | 49,530 | |
GSE residential CMOs | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 110,421 | 113,658 |
Gross Unrealized Gains | 332 | 296 |
Gross Unrealized Losses | 2,689 | 2,835 |
Fair Value | 108,064 | 111,119 |
Private label residential CMOs | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 144 | 999 |
Gross Unrealized Gains | 0 | 4 |
Gross Unrealized Losses | 1 | 0 |
Fair Value | 143 | 1,003 |
Private label commercial CMOs | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 75,911 | 7,809 |
Gross Unrealized Gains | 55 | 0 |
Gross Unrealized Losses | 921 | 156 |
Fair Value | 75,045 | 7,653 |
Asset-backed and other | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 138,535 | 86,837 |
Gross Unrealized Gains | 126 | 133 |
Gross Unrealized Losses | 1,073 | 425 |
Fair Value | $ 137,588 | $ 86,545 |
SECURITIES AVAILABLE FOR SALE_2
SECURITIES AVAILABLE FOR SALE - Summary of Securities Available For Sale With Unrealized Losses (Detail) $ in Thousands | Dec. 31, 2018USD ($)security | Dec. 31, 2017USD ($)security |
Number of Securities | ||
Less Than 12 Months | security | 46 | 19 |
12 Months or More | security | 18 | 6 |
Total | security | 64 | 25 |
Fair Value | ||
Less Than 12 Months | $ 200,164 | $ 117,391 |
12 Months or More | 86,361 | 43,044 |
Total | 286,525 | 160,435 |
Unrealized Losses | ||
Less Than 12 Months | 2,356 | 1,968 |
12 Months or More | 3,839 | 1,926 |
Total | $ 6,195 | $ 3,894 |
States and political subdivisions | ||
Number of Securities | ||
Less Than 12 Months | security | 27 | 7 |
12 Months or More | security | 6 | 1 |
Total | security | 33 | 8 |
Fair Value | ||
Less Than 12 Months | $ 46,585 | $ 24,577 |
12 Months or More | 23,036 | 5,585 |
Total | 69,621 | 30,162 |
Unrealized Losses | ||
Less Than 12 Months | 662 | 473 |
12 Months or More | 849 | 5 |
Total | $ 1,511 | $ 478 |
GSE residential CMOs | ||
Number of Securities | ||
Less Than 12 Months | security | 1 | 4 |
12 Months or More | security | 7 | 5 |
Total | security | 8 | 9 |
Fair Value | ||
Less Than 12 Months | $ 18,037 | $ 25,155 |
12 Months or More | 46,168 | 37,459 |
Total | 64,205 | 62,614 |
Unrealized Losses | ||
Less Than 12 Months | 122 | 914 |
12 Months or More | 2,567 | 1,921 |
Total | $ 2,689 | $ 2,835 |
Private label residential CMOs | ||
Number of Securities | ||
Less Than 12 Months | security | 1 | |
12 Months or More | security | 0 | |
Total | security | 1 | |
Fair Value | ||
Less Than 12 Months | $ 143 | |
12 Months or More | 0 | |
Total | 143 | |
Unrealized Losses | ||
Less Than 12 Months | 1 | |
12 Months or More | 0 | |
Total | $ 1 | |
Private label commercial CMOs | ||
Number of Securities | ||
Less Than 12 Months | security | 11 | 2 |
12 Months or More | security | 2 | 0 |
Total | security | 13 | 2 |
Fair Value | ||
Less Than 12 Months | $ 56,499 | $ 7,653 |
12 Months or More | 6,349 | 0 |
Total | 62,848 | 7,653 |
Unrealized Losses | ||
Less Than 12 Months | 712 | 156 |
12 Months or More | 209 | 0 |
Total | $ 921 | $ 156 |
Asset-backed and other | ||
Number of Securities | ||
Less Than 12 Months | security | 6 | 6 |
12 Months or More | security | 3 | 0 |
Total | security | 9 | 6 |
Fair Value | ||
Less Than 12 Months | $ 78,900 | $ 60,006 |
12 Months or More | 10,808 | 0 |
Total | 89,708 | 60,006 |
Unrealized Losses | ||
Less Than 12 Months | 859 | 425 |
12 Months or More | 214 | 0 |
Total | $ 1,073 | $ 425 |
SECURITIES AVAILABLE FOR SALE_3
SECURITIES AVAILABLE FOR SALE - Summary of Amortized Cost and Fair Value by Contractual Maturity (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Amortized Cost | |
Due in one year or less | $ 799 |
Due after one year through five years | 2,531 |
Due after five years through ten years | 37,168 |
Due after ten years | 104,098 |
CMOs | 186,476 |
Asset-backed and other | 138,535 |
Totals | 469,607 |
Fair Value | |
Due in one year or less | 800 |
Due after one year through five years | 2,542 |
Due after five years through ten years | 37,229 |
Due after ten years | 104,433 |
CMOs | 183,252 |
Asset-backed and other | 137,588 |
Totals | $ 465,844 |
SECURITIES AVAILABLE FOR SALE_4
SECURITIES AVAILABLE FOR SALE - Summary of Proceeds from Sale of Available for Sale Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |||
Proceeds from sale of AFS securities | $ 156,364 | $ 162,320 | $ 64,742 |
Gross gains | 1,681 | 1,477 | 1,468 |
Gross losses | $ 675 | $ 287 | $ 48 |
SECURITIES AVAILABLE FOR SALE_5
SECURITIES AVAILABLE FOR SALE - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Collateral Pledged | ||
Debt Securities, Available-for-sale [Line Items] | ||
AFS securities pledged to secure public funds | $ 164,233 | $ 319,907 |
LOANS AND ALLOWANCE FOR LOAN _3
LOANS AND ALLOWANCE FOR LOAN LOSSES - Narrative (Detail) | 12 Months Ended |
Dec. 31, 2018USD ($)note | |
Receivables [Abstract] | |
Maximum percentage of loan-to-value ratio upon loan origination (no more than) | 80.00% |
Maximum percentage of loan-to-value ratios of the value of the real estate taken as collateral (no greater than) | 90.00% |
Amount of loan on which reviews have been made annually | $ 500,000 |
Amount of loan on which reviews require approval | $ 250,000 |
Period past due when loans are deemed impaired | 90 days |
Number of notes split | note | 2 |
Appraisals, required period interval | 18 months |
Minimum amount on which annual updated appraisals for criticized loans are required | $ 250,000 |
Percentage of strong loan-to-value (or lower) | 70.00% |
LOANS AND ALLOWANCE FOR LOAN _4
LOANS AND ALLOWANCE FOR LOAN LOSSES - Summary of Loan Portfolio, Excluding Residential Loans Held for Sale (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | $ 1,247,657 | $ 1,010,012 |
Acquired loans | 135,009 | |
Commercial Real Estate | Owner-occupied | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 129,650 | 116,811 |
Commercial Real Estate | Non-owner occupied | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 252,794 | 244,491 |
Commercial Real Estate | Multi-family | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 78,933 | 53,634 |
Commercial Real Estate | Non-owner occupied residential | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 100,367 | 77,980 |
Acquisition and development | 1-4 family residential construction | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 7,385 | 11,730 |
Acquisition and development | Commercial and land development | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 42,051 | 19,251 |
Commercial and industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 160,964 | 115,663 |
Municipal | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 50,982 | 42,065 |
Residential mortgage | First lien | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 235,296 | 162,509 |
Residential mortgage | Home equity – term | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 12,208 | 11,784 |
Residential mortgage | Home equity lines of credit | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | 143,616 | 132,192 |
Installment and other loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total Loans | $ 33,411 | $ 21,902 |
LOANS AND ALLOWANCE FOR LOAN _5
LOANS AND ALLOWANCE FOR LOAN LOSSES - Summary of Loan Portfolio Ratings Based On Internal Risk Rating System (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | $ 1,247,657 | $ 1,010,012 |
Domestic | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,247,657 | |
Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,201,023 | 983,146 |
Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 22,137 | 6,904 |
Non-Impaired Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 6,440 | 8,936 |
Impaired - Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 6,297 | 11,026 |
Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
PCI Loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 11,760 | 0 |
Commercial Real Estate | Owner-occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 129,650 | 116,811 |
Commercial Real Estate | Owner-occupied | Domestic | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 129,650 | |
Commercial Real Estate | Non-owner occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 252,794 | 244,491 |
Commercial Real Estate | Non-owner occupied | Domestic | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 252,794 | |
Commercial Real Estate | Multi-family | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 78,933 | 53,634 |
Commercial Real Estate | Multi-family | Domestic | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 78,933 | |
Commercial Real Estate | Non-owner occupied residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 100,367 | 77,980 |
Commercial Real Estate | Non-owner occupied residential | Domestic | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 100,367 | |
Commercial Real Estate | Pass | Owner-occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 121,903 | 113,240 |
Commercial Real Estate | Pass | Non-owner occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 242,136 | 235,919 |
Commercial Real Estate | Pass | Multi-family | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 71,482 | 48,603 |
Commercial Real Estate | Pass | Non-owner occupied residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 98,125 | 76,373 |
Commercial Real Estate | Special Mention | Owner-occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 3,024 | 413 |
Commercial Real Estate | Special Mention | Non-owner occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 10,008 | 0 |
Commercial Real Estate | Special Mention | Multi-family | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 5,886 | 4,113 |
Commercial Real Estate | Special Mention | Non-owner occupied residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 736 | 142 |
Commercial Real Estate | Non-Impaired Substandard | Owner-occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 987 | 1,921 |
Commercial Real Estate | Non-Impaired Substandard | Non-owner occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 4,507 |
Commercial Real Estate | Non-Impaired Substandard | Multi-family | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 717 | 753 |
Commercial Real Estate | Non-Impaired Substandard | Non-owner occupied residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,197 | 1,084 |
Commercial Real Estate | Impaired - Substandard | Owner-occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,880 | 1,237 |
Commercial Real Estate | Impaired - Substandard | Non-owner occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 4,065 |
Commercial Real Estate | Impaired - Substandard | Multi-family | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 131 | 165 |
Commercial Real Estate | Impaired - Substandard | Non-owner occupied residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 309 | 381 |
Commercial Real Estate | Doubtful | Owner-occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Commercial Real Estate | Doubtful | Non-owner occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Commercial Real Estate | Doubtful | Multi-family | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Commercial Real Estate | Doubtful | Non-owner occupied residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Commercial Real Estate | PCI Loans | Owner-occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,856 | 0 |
Commercial Real Estate | PCI Loans | Non-owner occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 650 | 0 |
Commercial Real Estate | PCI Loans | Multi-family | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 717 | 0 |
Commercial Real Estate | PCI Loans | Non-owner occupied residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Acquisition and development | 1-4 family residential construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 7,385 | 11,730 |
Acquisition and development | 1-4 family residential construction | Domestic | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 7,385 | |
Acquisition and development | Commercial and land development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 42,051 | 19,251 |
Acquisition and development | Commercial and land development | Domestic | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 42,051 | |
Acquisition and development | Pass | 1-4 family residential construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 7,385 | 11,238 |
Acquisition and development | Pass | Commercial and land development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 41,251 | 18,635 |
Acquisition and development | Special Mention | 1-4 family residential construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Acquisition and development | Special Mention | Commercial and land development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 25 | 5 |
Acquisition and development | Non-Impaired Substandard | 1-4 family residential construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Acquisition and development | Non-Impaired Substandard | Commercial and land development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 583 | 611 |
Acquisition and development | Impaired - Substandard | 1-4 family residential construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 492 |
Acquisition and development | Impaired - Substandard | Commercial and land development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Acquisition and development | Doubtful | 1-4 family residential construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Acquisition and development | Doubtful | Commercial and land development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Acquisition and development | PCI Loans | 1-4 family residential construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Acquisition and development | PCI Loans | Commercial and land development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 192 | 0 |
Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 160,964 | 115,663 |
Commercial and industrial | Domestic | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 160,964 | |
Commercial and industrial | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 150,286 | 113,162 |
Commercial and industrial | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 2,278 | 2,151 |
Commercial and industrial | Non-Impaired Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 2,940 | 0 |
Commercial and industrial | Impaired - Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 286 | 350 |
Commercial and industrial | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Commercial and industrial | PCI Loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 5,174 | 0 |
Municipal | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 50,982 | 42,065 |
Municipal | Domestic | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 50,982 | |
Municipal | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 50,982 | 42,065 |
Municipal | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Municipal | Non-Impaired Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Municipal | Impaired - Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Municipal | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Municipal | PCI Loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | First lien | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 235,296 | 162,509 |
Residential mortgage | First lien | Domestic | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 235,296 | |
Residential mortgage | Home equity – term | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 12,208 | 11,784 |
Residential mortgage | Home equity – term | Domestic | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 12,208 | |
Residential mortgage | Home equity lines of credit | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 143,616 | 132,192 |
Residential mortgage | Home equity lines of credit | Domestic | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 143,616 | |
Residential mortgage | Pass | First lien | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 229,436 | 158,673 |
Residential mortgage | Pass | Home equity – term | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 12,170 | 11,762 |
Residential mortgage | Pass | Home equity lines of credit | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 142,638 | 131,585 |
Residential mortgage | Special Mention | First lien | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | Special Mention | Home equity – term | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | Special Mention | Home equity lines of credit | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 165 | 80 |
Residential mortgage | Non-Impaired Substandard | First lien | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | Non-Impaired Substandard | Home equity – term | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | Non-Impaired Substandard | Home equity lines of credit | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 15 | 60 |
Residential mortgage | Impaired - Substandard | First lien | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 2,877 | 3,836 |
Residential mortgage | Impaired - Substandard | Home equity – term | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 16 | 22 |
Residential mortgage | Impaired - Substandard | Home equity lines of credit | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 798 | 467 |
Residential mortgage | Doubtful | First lien | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | Doubtful | Home equity – term | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | Doubtful | Home equity lines of credit | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Residential mortgage | PCI Loans | First lien | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 2,983 | 0 |
Residential mortgage | PCI Loans | Home equity – term | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 22 | 0 |
Residential mortgage | PCI Loans | Home equity lines of credit | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Installment and other loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 33,411 | 21,902 |
Installment and other loans | Domestic | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 33,411 | |
Installment and other loans | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 33,229 | 21,891 |
Installment and other loans | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 15 | 0 |
Installment and other loans | Non-Impaired Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1 | 0 |
Installment and other loans | Impaired - Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 11 |
Installment and other loans | Doubtful | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Installment and other loans | PCI Loans | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | $ 166 | $ 0 |
LOANS AND ALLOWANCE FOR LOAN _6
LOANS AND ALLOWANCE FOR LOAN LOSSES - Summary of Impaired Loans by Class (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Recorded Investment (Book Balance) | ||
Impaired Loans with a Specific Allowance | $ 743 | $ 881 |
Impaired Loans with No Specific Allowance | 5,554 | 10,145 |
Unpaid Principal Balance (Legal Balance) | ||
Impaired Loans with a Specific Allowance | 743 | 881 |
Impaired Loans with No Specific Allowance | 7,832 | 13,737 |
Related Allowance | 38 | 51 |
Commercial Real Estate | Owner-occupied | ||
Recorded Investment (Book Balance) | ||
Impaired Loans with a Specific Allowance | 0 | 0 |
Impaired Loans with No Specific Allowance | 1,880 | 1,237 |
Unpaid Principal Balance (Legal Balance) | ||
Impaired Loans with a Specific Allowance | 0 | 0 |
Impaired Loans with No Specific Allowance | 2,576 | 2,479 |
Related Allowance | 0 | 0 |
Commercial Real Estate | Non-owner occupied | ||
Recorded Investment (Book Balance) | ||
Impaired Loans with a Specific Allowance | 0 | |
Impaired Loans with No Specific Allowance | 4,065 | |
Unpaid Principal Balance (Legal Balance) | ||
Impaired Loans with a Specific Allowance | 0 | |
Impaired Loans with No Specific Allowance | 4,856 | |
Related Allowance | 0 | |
Commercial Real Estate | Multi-family | ||
Recorded Investment (Book Balance) | ||
Impaired Loans with a Specific Allowance | 0 | 0 |
Impaired Loans with No Specific Allowance | 131 | 165 |
Unpaid Principal Balance (Legal Balance) | ||
Impaired Loans with a Specific Allowance | 0 | 0 |
Impaired Loans with No Specific Allowance | 336 | 352 |
Related Allowance | 0 | 0 |
Commercial Real Estate | Non-owner occupied residential | ||
Recorded Investment (Book Balance) | ||
Impaired Loans with a Specific Allowance | 0 | 0 |
Impaired Loans with No Specific Allowance | 309 | 381 |
Unpaid Principal Balance (Legal Balance) | ||
Impaired Loans with a Specific Allowance | 0 | 0 |
Impaired Loans with No Specific Allowance | 632 | 669 |
Related Allowance | 0 | 0 |
Acquisition and development | 1-4 family residential construction | ||
Recorded Investment (Book Balance) | ||
Impaired Loans with a Specific Allowance | 0 | |
Impaired Loans with No Specific Allowance | 492 | |
Unpaid Principal Balance (Legal Balance) | ||
Impaired Loans with a Specific Allowance | 0 | |
Impaired Loans with No Specific Allowance | 492 | |
Related Allowance | 0 | |
Commercial and industrial | ||
Recorded Investment (Book Balance) | ||
Impaired Loans with a Specific Allowance | 0 | 0 |
Impaired Loans with No Specific Allowance | 286 | 350 |
Unpaid Principal Balance (Legal Balance) | ||
Impaired Loans with a Specific Allowance | 0 | 0 |
Impaired Loans with No Specific Allowance | 457 | 495 |
Related Allowance | 0 | 0 |
Residential mortgage | First lien | ||
Recorded Investment (Book Balance) | ||
Impaired Loans with a Specific Allowance | 743 | 872 |
Impaired Loans with No Specific Allowance | 2,134 | 2,964 |
Unpaid Principal Balance (Legal Balance) | ||
Impaired Loans with a Specific Allowance | 743 | 872 |
Impaired Loans with No Specific Allowance | 2,727 | 3,706 |
Related Allowance | 38 | 42 |
Residential mortgage | Home equity – term | ||
Recorded Investment (Book Balance) | ||
Impaired Loans with a Specific Allowance | 0 | 0 |
Impaired Loans with No Specific Allowance | 16 | 22 |
Unpaid Principal Balance (Legal Balance) | ||
Impaired Loans with a Specific Allowance | 0 | 0 |
Impaired Loans with No Specific Allowance | 23 | 27 |
Related Allowance | 0 | 0 |
Residential mortgage | Home equity lines of credit | ||
Recorded Investment (Book Balance) | ||
Impaired Loans with a Specific Allowance | 0 | 0 |
Impaired Loans with No Specific Allowance | 798 | 467 |
Unpaid Principal Balance (Legal Balance) | ||
Impaired Loans with a Specific Allowance | 0 | 0 |
Impaired Loans with No Specific Allowance | 1,081 | 628 |
Related Allowance | $ 0 | 0 |
Installment and other loans | ||
Recorded Investment (Book Balance) | ||
Impaired Loans with a Specific Allowance | 9 | |
Impaired Loans with No Specific Allowance | 2 | |
Unpaid Principal Balance (Legal Balance) | ||
Impaired Loans with a Specific Allowance | 9 | |
Impaired Loans with No Specific Allowance | 33 | |
Related Allowance | $ 9 |
LOANS AND ALLOWANCE FOR LOAN _7
LOANS AND ALLOWANCE FOR LOAN LOSSES - Summary of Average Recorded Investment in Impaired Loans and Related Interest Income (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Financing Receivable, Impaired [Line Items] | |||
Average Impaired Balance | $ 8,249 | $ 7,130 | $ 15,118 |
Interest Income Recognized | 63 | 66 | 33 |
Commercial Real Estate | Owner-occupied | |||
Financing Receivable, Impaired [Line Items] | |||
Average Impaired Balance | 1,495 | 1,000 | 1,758 |
Interest Income Recognized | 2 | 6 | 0 |
Commercial Real Estate | Non-owner occupied | |||
Financing Receivable, Impaired [Line Items] | |||
Average Impaired Balance | 1,842 | 392 | 6,831 |
Interest Income Recognized | 0 | 0 | 0 |
Commercial Real Estate | Multi-family | |||
Financing Receivable, Impaired [Line Items] | |||
Average Impaired Balance | 148 | 182 | 216 |
Interest Income Recognized | 0 | 0 | 0 |
Commercial Real Estate | Non-owner occupied residential | |||
Financing Receivable, Impaired [Line Items] | |||
Average Impaired Balance | 346 | 418 | 645 |
Interest Income Recognized | 0 | 0 | 0 |
Acquisition and development | 1-4 family residential construction | |||
Financing Receivable, Impaired [Line Items] | |||
Average Impaired Balance | 181 | 154 | 0 |
Interest Income Recognized | 0 | 0 | 0 |
Acquisition and development | Commercial and land development | |||
Financing Receivable, Impaired [Line Items] | |||
Average Impaired Balance | 1 | 0 | 3 |
Interest Income Recognized | 0 | 0 | 0 |
Commercial and industrial | |||
Financing Receivable, Impaired [Line Items] | |||
Average Impaired Balance | 322 | 413 | 575 |
Interest Income Recognized | 0 | 0 | 0 |
Residential mortgage | First lien | |||
Financing Receivable, Impaired [Line Items] | |||
Average Impaired Balance | 3,234 | 4,012 | 4,525 |
Interest Income Recognized | 59 | 58 | 33 |
Residential mortgage | Home equity – term | |||
Financing Receivable, Impaired [Line Items] | |||
Average Impaired Balance | 19 | 61 | 98 |
Interest Income Recognized | 0 | 0 | 0 |
Residential mortgage | Home equity lines of credit | |||
Financing Receivable, Impaired [Line Items] | |||
Average Impaired Balance | 657 | 488 | 455 |
Interest Income Recognized | 2 | 2 | 0 |
Installment and other loans | |||
Financing Receivable, Impaired [Line Items] | |||
Average Impaired Balance | 4 | 10 | 12 |
Interest Income Recognized | $ 0 | $ 0 | $ 0 |
LOANS AND ALLOWANCE FOR LOAN _8
LOANS AND ALLOWANCE FOR LOAN LOSSES - Schedule of Impaired Loans That Are TDRs (Detail) $ in Thousands | Dec. 31, 2018USD ($)contract | Dec. 31, 2017USD ($)contract |
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | contract | 22 | 23 |
Recorded Investment | $ | $ 1,827 | $ 1,958 |
Accruing | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | contract | 13 | 13 |
Recorded Investment | $ | $ 1,132 | $ 1,183 |
Accruing | Commercial Real Estate | Owner-occupied | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | contract | 1 | 1 |
Recorded Investment | $ | $ 39 | $ 52 |
Accruing | Residential mortgage | First lien | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | contract | 11 | 11 |
Recorded Investment | $ | $ 1,069 | $ 1,102 |
Accruing | Residential mortgage | Home equity - lines of credit | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | contract | 1 | 1 |
Recorded Investment | $ | $ 24 | $ 29 |
Nonaccruing | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | contract | 9 | 10 |
Recorded Investment | $ | $ 695 | $ 775 |
Nonaccruing | Commercial Real Estate | Owner-occupied | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | contract | 1 | 1 |
Recorded Investment | $ | $ 37 | $ 57 |
Nonaccruing | Residential mortgage | First lien | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | contract | 8 | 8 |
Recorded Investment | $ | $ 658 | $ 715 |
Nonaccruing | Installment and other loans | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | contract | 0 | 1 |
Recorded Investment | $ | $ 0 | $ 3 |
LOANS AND ALLOWANCE FOR LOAN _9
LOANS AND ALLOWANCE FOR LOAN LOSSES - Schedule of Number of Loans Modified (Detail) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)contract | Dec. 31, 2016USD ($)contract | |
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | contract | 4 | |
Pre- Modification Investment Balance | $ 6,394 | |
Post- Modification Investment Balance | $ 6,394 | |
Commercial Real Estate | Owner-occupied | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | contract | 2 | |
Pre- Modification Investment Balance | $ 119 | |
Post- Modification Investment Balance | $ 119 | |
Commercial Real Estate | Non-owner occupied | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | contract | 1 | |
Pre- Modification Investment Balance | $ 6,095 | |
Post- Modification Investment Balance | $ 6,095 | |
Residential mortgage | First lien | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | contract | 2 | |
Pre- Modification Investment Balance | $ 265 | |
Post- Modification Investment Balance | $ 265 | |
Residential mortgage | Home equity - lines of credit | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | contract | 1 | |
Pre- Modification Investment Balance | $ 34 | |
Post- Modification Investment Balance | $ 34 |
LOANS AND ALLOWANCE FOR LOAN_10
LOANS AND ALLOWANCE FOR LOAN LOSSES - Schedule of Classes of Loan Portfolio Summarized by Aging Categories (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | $ 994,892 | |
Past Due | $ 1,592 | 5,277 |
90 (still accruing) | 0 | |
Non- Accrual | 9,843 | |
Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 10,958 | |
Past Due | 802 | |
90 (still accruing) | 57 | |
Non- Accrual | 0 | |
Total Loans | 11,760 | |
Financing Receivables, 30 to 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 4,132 | |
Financing Receivables, 30 to 59 Days Past Due | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 631 | |
Financing Receivables, 60 to 89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 1,145 | |
Financing Receivables, 60 to 89 Days Past Due | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 114 | |
Commercial Real Estate | Owner-occupied | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 125,887 | 115,605 |
Past Due | 66 | 21 |
90 (still accruing) | 0 | 0 |
Non- Accrual | 1,841 | 1,185 |
Total Loans | 127,794 | |
Commercial Real Estate | Owner-occupied | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 1,784 | |
Past Due | 72 | |
90 (still accruing) | 0 | |
Non- Accrual | 0 | |
Total Loans | 1,856 | |
Commercial Real Estate | Non-owner occupied | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 252,144 | 240,426 |
Past Due | 0 | 0 |
90 (still accruing) | 0 | 0 |
Non- Accrual | 0 | 4,065 |
Total Loans | 252,144 | |
Commercial Real Estate | Non-owner occupied | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 650 | |
Past Due | 0 | |
90 (still accruing) | 0 | |
Non- Accrual | 0 | |
Total Loans | 650 | |
Commercial Real Estate | Multi-family | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 78,085 | 53,469 |
Past Due | 0 | 0 |
90 (still accruing) | 0 | 0 |
Non- Accrual | 131 | 165 |
Total Loans | 78,216 | |
Commercial Real Estate | Multi-family | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 717 | |
Past Due | 0 | |
90 (still accruing) | 0 | |
Non- Accrual | 0 | |
Total Loans | 717 | |
Commercial Real Estate | Non-owner occupied residential | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 99,803 | 77,454 |
Past Due | 255 | 145 |
90 (still accruing) | 0 | 0 |
Non- Accrual | 309 | 381 |
Total Loans | 100,367 | |
Commercial Real Estate | Financing Receivables, 30 to 59 Days Past Due | Owner-occupied | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 66 | 4 |
Commercial Real Estate | Financing Receivables, 30 to 59 Days Past Due | Owner-occupied | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | |
Commercial Real Estate | Financing Receivables, 30 to 59 Days Past Due | Non-owner occupied | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | 0 |
Commercial Real Estate | Financing Receivables, 30 to 59 Days Past Due | Non-owner occupied | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | |
Commercial Real Estate | Financing Receivables, 30 to 59 Days Past Due | Multi-family | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | 0 |
Commercial Real Estate | Financing Receivables, 30 to 59 Days Past Due | Multi-family | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | |
Commercial Real Estate | Financing Receivables, 30 to 59 Days Past Due | Non-owner occupied residential | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 226 | 145 |
Commercial Real Estate | Financing Receivables, 60 to 89 Days Past Due | Owner-occupied | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | 17 |
Commercial Real Estate | Financing Receivables, 60 to 89 Days Past Due | Owner-occupied | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 72 | |
Commercial Real Estate | Financing Receivables, 60 to 89 Days Past Due | Non-owner occupied | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | 0 |
Commercial Real Estate | Financing Receivables, 60 to 89 Days Past Due | Non-owner occupied | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | |
Commercial Real Estate | Financing Receivables, 60 to 89 Days Past Due | Multi-family | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | 0 |
Commercial Real Estate | Financing Receivables, 60 to 89 Days Past Due | Multi-family | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | |
Commercial Real Estate | Financing Receivables, 60 to 89 Days Past Due | Non-owner occupied residential | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 29 | 0 |
Acquisition and development | 1-4 family residential construction | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 7,385 | 11,238 |
Past Due | 0 | 0 |
90 (still accruing) | 0 | 0 |
Non- Accrual | 0 | 492 |
Total Loans | 7,385 | |
Acquisition and development | Commercial and land development | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 41,822 | 19,226 |
Past Due | 37 | 25 |
90 (still accruing) | 0 | 0 |
Non- Accrual | 0 | 0 |
Total Loans | 41,859 | |
Acquisition and development | Commercial and land development | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 192 | |
Past Due | 0 | |
90 (still accruing) | 0 | |
Non- Accrual | 0 | |
Total Loans | 192 | |
Acquisition and development | Financing Receivables, 30 to 59 Days Past Due | 1-4 family residential construction | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | 0 |
Acquisition and development | Financing Receivables, 30 to 59 Days Past Due | Commercial and land development | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 37 | 25 |
Acquisition and development | Financing Receivables, 30 to 59 Days Past Due | Commercial and land development | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | |
Acquisition and development | Financing Receivables, 60 to 89 Days Past Due | 1-4 family residential construction | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | 0 |
Acquisition and development | Financing Receivables, 60 to 89 Days Past Due | Commercial and land development | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | 0 |
Acquisition and development | Financing Receivables, 60 to 89 Days Past Due | Commercial and land development | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | |
Commercial and industrial | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 154,988 | 115,312 |
Past Due | 516 | 1 |
90 (still accruing) | 0 | 0 |
Non- Accrual | 286 | 350 |
Total Loans | 155,790 | |
Commercial and industrial | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 4,943 | |
Past Due | 231 | |
90 (still accruing) | 0 | |
Non- Accrual | 0 | |
Total Loans | 5,174 | |
Commercial and industrial | Financing Receivables, 30 to 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 411 | 1 |
Commercial and industrial | Financing Receivables, 30 to 59 Days Past Due | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 231 | |
Commercial and industrial | Financing Receivables, 60 to 89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 105 | 0 |
Commercial and industrial | Financing Receivables, 60 to 89 Days Past Due | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | |
Municipal | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 50,982 | 42,065 |
Past Due | 0 | 0 |
90 (still accruing) | 0 | 0 |
Non- Accrual | 0 | 0 |
Total Loans | 50,982 | |
Municipal | Financing Receivables, 30 to 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | 0 |
Municipal | Financing Receivables, 60 to 89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | 0 |
Residential mortgage | First lien | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 228,179 | 155,387 |
Past Due | 2,326 | 4,388 |
90 (still accruing) | 0 | 0 |
Non- Accrual | 1,808 | 2,734 |
Total Loans | 232,313 | |
Residential mortgage | First lien | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 2,506 | |
Past Due | 477 | |
90 (still accruing) | 53 | |
Non- Accrual | 0 | |
Total Loans | 2,983 | |
Residential mortgage | Home equity – term | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 11,487 | 11,753 |
Past Due | 683 | 9 |
90 (still accruing) | 0 | 0 |
Non- Accrual | 16 | 22 |
Total Loans | 12,186 | |
Residential mortgage | Home equity – term | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 17 | |
Past Due | 5 | |
90 (still accruing) | 0 | |
Non- Accrual | 0 | |
Total Loans | 22 | |
Residential mortgage | Home equity lines of credit | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 142,394 | 131,208 |
Past Due | 448 | 546 |
90 (still accruing) | 0 | 0 |
Non- Accrual | 774 | 438 |
Total Loans | 143,616 | |
Residential mortgage | Financing Receivables, 30 to 59 Days Past Due | First lien | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 1,592 | 3,333 |
Residential mortgage | Financing Receivables, 30 to 59 Days Past Due | First lien | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 382 | |
Residential mortgage | Financing Receivables, 30 to 59 Days Past Due | Home equity – term | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 678 | 9 |
Residential mortgage | Financing Receivables, 30 to 59 Days Past Due | Home equity – term | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 5 | |
Residential mortgage | Financing Receivables, 30 to 59 Days Past Due | Home equity lines of credit | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 420 | 474 |
Residential mortgage | Financing Receivables, 60 to 89 Days Past Due | First lien | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 734 | 1,055 |
Residential mortgage | Financing Receivables, 60 to 89 Days Past Due | First lien | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 42 | |
Residential mortgage | Financing Receivables, 60 to 89 Days Past Due | Home equity – term | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 5 | 0 |
Residential mortgage | Financing Receivables, 60 to 89 Days Past Due | Home equity – term | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | |
Residential mortgage | Financing Receivables, 60 to 89 Days Past Due | Home equity lines of credit | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 28 | 72 |
Installment and other loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 33,135 | 21,749 |
Past Due | 110 | 142 |
90 (still accruing) | 0 | 0 |
Non- Accrual | 0 | 11 |
Total Loans | 33,245 | |
Installment and other loans | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 149 | |
Past Due | 17 | |
90 (still accruing) | 4 | |
Non- Accrual | 0 | |
Total Loans | 166 | |
Installment and other loans | Financing Receivables, 30 to 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 66 | 141 |
Installment and other loans | Financing Receivables, 30 to 59 Days Past Due | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 13 | |
Installment and other loans | Financing Receivables, 60 to 89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 44 | $ 1 |
Installment and other loans | Financing Receivables, 60 to 89 Days Past Due | Loans acquired with credit deterioration | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 0 | |
Loans Excluding Acquired PCI | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 1,226,291 | |
Past Due | 4,441 | |
90 (still accruing) | 0 | |
Non- Accrual | 5,165 | |
Total Loans | 1,235,897 | |
Loans Excluding Acquired PCI | Financing Receivables, 30 to 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 3,496 | |
Loans Excluding Acquired PCI | Financing Receivables, 60 to 89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 945 | |
Total Portfolio Loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 1,237,249 | |
Past Due | 5,243 | |
90 (still accruing) | 57 | |
Non- Accrual | 5,165 | |
Total Loans | 1,247,657 | |
Total Portfolio Loans | Financing Receivables, 30 to 59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | 4,127 | |
Total Portfolio Loans | Financing Receivables, 60 to 89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Past Due | $ 1,059 |
LOANS AND ALLOWANCE FOR LOAN_11
LOANS AND ALLOWANCE FOR LOAN LOSSES - Schedule of Activity in Allowance for Loan Losses (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Activity in allowance for loan losses | |||
Balance, beginning of year | $ 12,796 | $ 12,775 | $ 13,568 |
Provision for loan losses | 800 | 1,000 | 250 |
Charge-offs | (464) | (1,266) | (1,722) |
Recoveries | 882 | 287 | 679 |
Balance, end of year | 14,014 | 12,796 | 12,775 |
Unallocated | |||
Activity in allowance for loan losses | |||
Balance, beginning of year | 475 | 414 | 774 |
Provision for loan losses | 95 | 61 | (360) |
Charge-offs | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 |
Balance, end of year | 570 | 475 | 414 |
Commercial | |||
Activity in allowance for loan losses | |||
Balance, beginning of year | 8,710 | 9,238 | 9,803 |
Provision for loan losses | 177 | 234 | (38) |
Charge-offs | (24) | (920) | (951) |
Recoveries | 584 | 158 | 424 |
Balance, end of year | 9,447 | 8,710 | 9,238 |
Commercial | Commercial Real Estate | |||
Activity in allowance for loan losses | |||
Balance, beginning of year | 6,763 | 7,530 | 7,883 |
Provision for loan losses | (442) | 38 | 107 |
Charge-offs | (17) | (835) | (872) |
Recoveries | 572 | 30 | 412 |
Balance, end of year | 6,876 | 6,763 | 7,530 |
Commercial | Acquisition and Development | |||
Activity in allowance for loan losses | |||
Balance, beginning of year | 417 | 580 | 850 |
Provision for loan losses | 396 | (167) | (270) |
Charge-offs | (7) | 0 | 0 |
Recoveries | 11 | 4 | 0 |
Balance, end of year | 817 | 417 | 580 |
Commercial | Commercial and Industrial | |||
Activity in allowance for loan losses | |||
Balance, beginning of year | 1,446 | 1,074 | 1,012 |
Provision for loan losses | 209 | 333 | 129 |
Charge-offs | 0 | (85) | (79) |
Recoveries | 1 | 124 | 12 |
Balance, end of year | 1,656 | 1,446 | 1,074 |
Commercial | Municipal | |||
Activity in allowance for loan losses | |||
Balance, beginning of year | 84 | 54 | 58 |
Provision for loan losses | 14 | 30 | (4) |
Charge-offs | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 |
Balance, end of year | 98 | 84 | 54 |
Consumer | |||
Activity in allowance for loan losses | |||
Balance, beginning of year | 3,611 | 3,123 | 2,991 |
Provision for loan losses | 528 | 705 | 648 |
Charge-offs | (440) | (346) | (771) |
Recoveries | 298 | 129 | 255 |
Balance, end of year | 3,997 | 3,611 | 3,123 |
Consumer | Residential Mortgage | |||
Activity in allowance for loan losses | |||
Balance, beginning of year | 3,400 | 2,979 | 2,870 |
Provision for loan losses | 363 | 531 | 532 |
Charge-offs | (148) | (180) | (577) |
Recoveries | 138 | 70 | 154 |
Balance, end of year | 3,753 | 3,400 | 2,979 |
Consumer | Installment and Other | |||
Activity in allowance for loan losses | |||
Balance, beginning of year | 211 | 144 | 121 |
Provision for loan losses | 165 | 174 | 116 |
Charge-offs | (292) | (166) | (194) |
Recoveries | 160 | 59 | 101 |
Balance, end of year | $ 244 | $ 211 | $ 144 |
LOANS AND ALLOWANCE FOR LOAN_12
LOANS AND ALLOWANCE FOR LOAN LOSSES - Summary of Ending Loan Balance Individually Evaluated for Impairment (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Loans allocated by: | ||||
Individually evaluated for impairment | $ 6,297 | $ 11,026 | ||
Collectively evaluated for impairment | 1,241,360 | 998,986 | ||
Total Loans | 1,247,657 | 1,010,012 | ||
Allowance for loan losses allocated by: | ||||
Individually evaluated for impairment | 38 | 51 | ||
Collectively evaluated for impairment | 13,976 | 12,745 | ||
Allowance for loan losses, Total | 14,014 | 12,796 | $ 12,775 | $ 13,568 |
Commercial | ||||
Loans allocated by: | ||||
Individually evaluated for impairment | 2,606 | 6,690 | ||
Collectively evaluated for impairment | 820,520 | 674,935 | ||
Total Loans | 823,126 | 681,625 | ||
Allowance for loan losses allocated by: | ||||
Individually evaluated for impairment | 0 | 0 | ||
Collectively evaluated for impairment | 9,447 | 8,710 | ||
Allowance for loan losses, Total | 9,447 | 8,710 | ||
Consumer | ||||
Loans allocated by: | ||||
Individually evaluated for impairment | 3,691 | 4,336 | ||
Collectively evaluated for impairment | 420,840 | 324,051 | ||
Total Loans | 424,531 | 328,387 | ||
Allowance for loan losses allocated by: | ||||
Individually evaluated for impairment | 38 | 51 | ||
Collectively evaluated for impairment | 3,959 | 3,560 | ||
Allowance for loan losses, Total | 3,997 | 3,611 | ||
Unallocated | ||||
Loans allocated by: | ||||
Individually evaluated for impairment | 0 | 0 | ||
Collectively evaluated for impairment | 0 | 0 | ||
Total Loans | 0 | 0 | ||
Allowance for loan losses allocated by: | ||||
Individually evaluated for impairment | 0 | 0 | ||
Collectively evaluated for impairment | 570 | 475 | ||
Allowance for loan losses, Total | 570 | 475 | ||
Commercial Real Estate | Commercial | ||||
Loans allocated by: | ||||
Individually evaluated for impairment | 2,320 | 5,848 | ||
Collectively evaluated for impairment | 559,424 | 487,068 | ||
Total Loans | 561,744 | 492,916 | ||
Allowance for loan losses allocated by: | ||||
Individually evaluated for impairment | 0 | 0 | ||
Collectively evaluated for impairment | 6,876 | 6,763 | ||
Allowance for loan losses, Total | 6,876 | 6,763 | ||
Acquisition and Development | Commercial | ||||
Loans allocated by: | ||||
Individually evaluated for impairment | 0 | 492 | ||
Collectively evaluated for impairment | 49,436 | 30,489 | ||
Total Loans | 49,436 | 30,981 | ||
Allowance for loan losses allocated by: | ||||
Individually evaluated for impairment | 0 | 0 | ||
Collectively evaluated for impairment | 817 | 417 | ||
Allowance for loan losses, Total | 817 | 417 | ||
Commercial and Industrial | ||||
Loans allocated by: | ||||
Total Loans | 160,964 | 115,663 | ||
Commercial and Industrial | Commercial | ||||
Loans allocated by: | ||||
Individually evaluated for impairment | 286 | 350 | ||
Collectively evaluated for impairment | 160,678 | 115,313 | ||
Total Loans | 160,964 | 115,663 | ||
Allowance for loan losses allocated by: | ||||
Individually evaluated for impairment | 0 | 0 | ||
Collectively evaluated for impairment | 1,656 | 1,446 | ||
Allowance for loan losses, Total | 1,656 | 1,446 | ||
Municipal | ||||
Loans allocated by: | ||||
Total Loans | 50,982 | 42,065 | ||
Municipal | Commercial | ||||
Loans allocated by: | ||||
Individually evaluated for impairment | 0 | 0 | ||
Collectively evaluated for impairment | 50,982 | 42,065 | ||
Total Loans | 50,982 | 42,065 | ||
Allowance for loan losses allocated by: | ||||
Individually evaluated for impairment | 0 | 0 | ||
Collectively evaluated for impairment | 98 | 84 | ||
Allowance for loan losses, Total | 98 | 84 | ||
Residential Mortgage | Consumer | ||||
Loans allocated by: | ||||
Individually evaluated for impairment | 3,691 | 4,325 | ||
Collectively evaluated for impairment | 387,429 | 302,160 | ||
Total Loans | 391,120 | 306,485 | ||
Allowance for loan losses allocated by: | ||||
Individually evaluated for impairment | 38 | 42 | ||
Collectively evaluated for impairment | 3,715 | 3,358 | ||
Allowance for loan losses, Total | 3,753 | 3,400 | ||
Installment and other loans | ||||
Loans allocated by: | ||||
Total Loans | 33,411 | 21,902 | ||
Installment and other loans | Consumer | ||||
Loans allocated by: | ||||
Individually evaluated for impairment | 0 | 11 | ||
Collectively evaluated for impairment | 33,411 | 21,891 | ||
Total Loans | 33,411 | 21,902 | ||
Allowance for loan losses allocated by: | ||||
Individually evaluated for impairment | 0 | 9 | ||
Collectively evaluated for impairment | 244 | 202 | ||
Allowance for loan losses, Total | $ 244 | $ 211 |
LOANS AND ALLOWANCE FOR LOAN_13
LOANS AND ALLOWANCE FOR LOAN LOSSES - Schedule of Accretable Yield of Purchased Impaired Loans (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Receivables [Abstract] | |
Accretable yield, Beginning of period | $ 0 |
New loans purchased | 2,243 |
Accretion of income | (178) |
Accretable yield, End of period | $ 2,065 |
PREMISES AND EQUIPMENT - Summar
PREMISES AND EQUIPMENT - Summary of Premises and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Bank premises and equipment, gross | $ 68,682 | $ 63,412 |
Less accumulated depreciation and amortization | 30,481 | 28,603 |
Bank premises and equipment, net | 38,201 | 34,809 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Bank premises and equipment, gross | 7,825 | 7,664 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Bank premises and equipment, gross | 31,987 | 31,154 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Bank premises and equipment, gross | 3,926 | 2,482 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Bank premises and equipment, gross | 22,998 | 22,023 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Bank premises and equipment, gross | $ 1,946 | $ 89 |
PREMISES AND EQUIPMENT - Narrat
PREMISES AND EQUIPMENT - Narrative (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 2,609 | $ 2,650 | $ 2,311 |
Rent expense | 781 | $ 639 | 601 |
Furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Premises and equipment retired from active use | 5,600 | ||
Loss in connection with retirement of premises and equipment | $ 147 | ||
Mercersburg Financial Corporation | Disposal Group, Held-for-sale, Not Discontinued Operations | |||
Property, Plant and Equipment [Line Items] | |||
Estimated fair value of bank premises acquired | $ 1,003 |
PREMISES AND EQUIPMENT - Schedu
PREMISES AND EQUIPMENT - Schedule of Minimum Rental Commitments (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Property, Plant and Equipment [Abstract] | |
2019 | $ 782 |
2020 | 757 |
2021 | 578 |
2022 | 470 |
2023 | 425 |
Thereafter | 4,948 |
Total | $ 7,960 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Schedule of Change in Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Roll Forward] | |||
Goodwill, Beginning Balance | $ 719 | $ 719 | $ 0 |
Acquired goodwill | 11,873 | 0 | 719 |
Goodwill, Ending Balance | $ 12,592 | $ 719 | $ 719 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Schedule of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Finite-Lived Intangible Assets, Net, Beginning Balance | $ 356 | $ 458 | $ 207 |
Amortization expense | (286) | (102) | (99) |
Finite-Lived Intangible Assets, Net, Ending Balance | 3,910 | 356 | 458 |
Core Deposit Intangibles | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Finite-lived Intangible Assets Acquired | 3,840 | 0 | 0 |
Other Customer Relationships Intangibles | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Finite-lived Intangible Assets Acquired | $ 0 | $ 0 | $ 350 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Component of Other Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Core deposit intangibles | $ 3,840 | |
Other customer relationship intangibles | 931 | |
Total Gross Carrying Amount | 4,771 | $ 937 |
Accumulated Amortization | 861 | 581 |
Core Deposit Intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Core deposit intangibles | 0 | |
Accumulated Amortization | 190 | 0 |
Other Customer Relationships Intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other customer relationship intangibles | 937 | |
Accumulated Amortization | $ 671 | $ 581 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Schedule of Estimated amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||
2019 | $ 788 | |||
2020 | 687 | |||
2021 | 598 | |||
2022 | 513 | |||
2023 | 429 | |||
Thereafter | 895 | |||
Total | $ 3,910 | $ 356 | $ 458 | $ 207 |
INCOME TAXES - Summary of Incom
INCOME TAXES - Summary of Income Tax Expense (Benefit) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Current expense | $ 1,097 | $ 1,260 | $ 1,498 |
Deferred expense (benefit) | 543 | 443 | (232) |
Expense due to enactment of federal tax reform legislation | 0 | 2,635 | 0 |
Income tax expense | $ 1,640 | $ 4,338 | $ 1,266 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Effective Income Tax Rate to Statutory Federal Rate (Detail) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Statutory federal tax rate | 21.00% | 34.00% | 34.00% | 35.00% |
Increase (decrease) resulting from: | ||||
Tax exempt interest income | (7.70%) | (13.00%) | (16.00%) | |
Earnings from life insurance | (1.70%) | (2.40%) | (4.70%) | |
Disallowed interest expense | 0.80% | 1.00% | 1.00% | |
Low-income housing credits and related expense | (2.50%) | (4.60%) | (7.20%) | |
Merger related | 0.60% | 0.00% | 0.00% | |
Expense due to enactment of federal tax reform legislation | 0.00% | 21.20% | 0.00% | |
Regulatory settlement | 0.00% | 0.00% | 4.30% | |
Change in statutory federal tax rate | 0.00% | 0.00% | 2.30% | |
Other | 0.90% | (1.30%) | 2.30% | |
Effective income tax rate | 11.40% | 34.90% | 16.00% |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Detail) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense related to net security gains | $ 211,000 | $ 405,000 | $ 483,000 | |
Statutory federal tax rate | 21.00% | 34.00% | 34.00% | 35.00% |
Increase in income tax expense due to application of new rate | $ 185,000 | |||
Tax Cuts And Jobs Act Of 2017,change in tax rate, deferred tax asset, provisional deferred income tax expense | $ 2,635,000 | |||
Reclass to other assets from deferred tax assets | 5,343,000 | |||
Income tax penalties or interest | $ 0 | 0 | $ 0 | |
Accrued penalties | $ 0 | $ 0 |
INCOME TAXES - Summary of Defer
INCOME TAXES - Summary of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Allowance for loan losses | $ 3,143 | $ 2,919 |
Deferred compensation | 723 | 355 |
Retirement and salary continuation plans | 1,416 | 1,301 |
Share-based compensation | 742 | 597 |
Off-balance sheet reserves | 219 | 207 |
Nonaccrual loan interest | 537 | 258 |
Net unrealized losses on securities available for sale | 791 | 0 |
Purchase accounting adjustments | 1,795 | 39 |
Bonus accrual | 470 | 25 |
Low-income housing credit carryforward | 641 | 2,313 |
Other | 321 | 390 |
Total deferred tax assets | 10,798 | 8,404 |
Deferred tax liabilities: | ||
Depreciation | 458 | 488 |
Net unrealized gains on securities available for sale | 0 | 757 |
Mortgage servicing rights | 590 | 536 |
Purchase accounting adjustments | 1,021 | 251 |
Other | 150 | 122 |
Total deferred tax liabilities | 2,219 | 2,154 |
Net deferred tax asset, included in Other Assets | $ 8,579 | $ 6,250 |
RETIREMENT PLANS (Detail)
RETIREMENT PLANS (Detail) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)plan | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contribution expense | $ 479 | $ 432 | $ 334 |
Deferred compensation arrangement | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Age at which a director or his beneficiaries will receive a monthly retirement benefit | 65 years | ||
Plan expense | $ 9 | 11 | 12 |
Estimated present value of future benefits to be paid | 82 | 94 | |
Supplemental discretionary deferred compensation plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan expense | 61 | 10 | 15 |
Trust account balance | 1,692 | 1,571 | |
Supplemental retirement and salary continuation plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan expense | $ 872 | 739 | 727 |
Number of supplemental retirement and salary continuation plans | plan | 2 | ||
Estimated present value of future benefits to be paid | $ 8,548 | 6,109 | |
Life insurance coverage post-retirement | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan expense | 126 | 77 | $ 61 |
Estimated present value of future benefits to be paid | $ 1,457 | $ 937 |
SHARE-BASED COMPENSATION PLAN_2
SHARE-BASED COMPENSATION PLANS - Narrative (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2016 | Dec. 31, 2017 | |
2011 Incentive Stock Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares of common stock reserved to be issued | 881,920 | ||
Number of shares available to be issued | 533,852 | ||
2011 Incentive Stock Plan | Restricted stock awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation expense related to restricted stock awards | $ 2,115 | $ 2,035 | |
Weighted-average recognition period | 1 year 7 months 6 days | ||
2011 Incentive Stock Plan | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum term of options | 10 years | ||
Intrinsic value of outstanding and exercisable options | $ 0 | $ 127 | |
Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares of common stock reserved to be issued | 350,000 | ||
Number of shares available to be issued | 173,465 | ||
Maximum shares employees may purchase as a percent of their annual salary | 10.00% | ||
Percentage of value of the shares on the semi-annual offering | 95.00% |
SHARE-BASED COMPENSATION PLAN_3
SHARE-BASED COMPENSATION PLANS - Summary of Nonvested Restricted Shares Activity (Details) - 2011 Incentive Stock Plan - Restricted stock awards | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Shares | |
Nonvested shares, beginning of year (in shares) | shares | 268,411 |
Granted (in shares) | shares | 85,817 |
Forfeited (in shares) | shares | (37,392) |
Vested (in shares) | shares | (41,424) |
Nonvested shares, at end of year (in shares) | shares | 275,412 |
Weighted Average Grant Date Fair Value | |
Nonvested shares, beginning of year (in dollars per share) | $ / shares | $ 18.18 |
Granted (in dollars per share) | $ / shares | 25.63 |
Forfeited (in dollars per share) | $ / shares | 18.72 |
Vested (in dollars per share) | $ / shares | 18.84 |
Nonvested shares, at end of year (in dollars per share) | $ / shares | $ 20.33 |
SHARE-BASED COMPENSATION PLAN_4
SHARE-BASED COMPENSATION PLANS - Schedule of Restricted Shares Compensation Expense (Details) - 2011 Incentive Stock Plan - Restricted stock awards - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted share award expense | $ 1,479 | $ 1,369 | $ 941 |
Restricted share award tax benefit | 374 | 465 | 320 |
Fair value of shares vested | $ 1,074 | $ 303 | $ 237 |
SHARE-BASED COMPENSATION PLAN_5
SHARE-BASED COMPENSATION PLANS - Summary of Outstanding Stock Options Activity (Detail) - 2011 Incentive Stock Plan - Employee Stock Option | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Shares | |
Outstanding at beginning of year (in shares) | shares | 59,583 |
Forfeited (in shares) | shares | (2,235) |
Expired (in shares) | shares | (15,214) |
Exercised (in shares) | shares | (1,150) |
Options outstanding and exercisable, at year end (in shares) | shares | 40,984 |
Weighted Average Exercise Price | |
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 25.89 |
Forfeited (in dollars per share) | $ / shares | 28.02 |
Expired (in dollars per share) | $ / shares | 30.11 |
Exercised (in shares) | $ / shares | 21.14 |
Options outstanding and exercisable, at year end (in dollars per share) | $ / shares | $ 24.34 |
SHARE-BASED COMPENSATION PLAN_6
SHARE-BASED COMPENSATION PLANS - Schedule of Information Pertaining to Options Outstanding and Exercisable (Detail) - 2011 Incentive Stock Plan - Employee Stock Option | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
$21.14 - $24.99 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Exercise Prices, Minimum (in usd per share) | $ 21.14 |
Range of Exercise Prices, Maximum (in usd per share) | $ 24.99 |
Number Outstanding and Exercisable (in shares) | shares | 31,519 |
Weighted Average Remaining Contractual Life (Years) | 1 year 4 months 24 days |
Weighted Average Exercise Price (in dollars per share) | $ 21.51 |
$25.00 - $34.99 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Exercise Prices, Minimum (in usd per share) | 25 |
Range of Exercise Prices, Maximum (in usd per share) | $ 34.99 |
Number Outstanding and Exercisable (in shares) | shares | 2,792 |
Weighted Average Remaining Contractual Life (Years) | 1 year 3 months |
Weighted Average Exercise Price (in dollars per share) | $ 25.76 |
$35.00 - $37.59 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Exercise Prices, Minimum (in usd per share) | 35 |
Range of Exercise Prices, Maximum (in usd per share) | $ 37.59 |
Number Outstanding and Exercisable (in shares) | shares | 6,673 |
Weighted Average Remaining Contractual Life (Years) | 6 months 21 days |
Weighted Average Exercise Price (in dollars per share) | $ 37.10 |
$21.14 - $37.59 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Exercise Prices, Minimum (in usd per share) | 21.14 |
Range of Exercise Prices, Maximum (in usd per share) | $ 37.59 |
Number Outstanding and Exercisable (in shares) | shares | 40,984 |
Weighted Average Remaining Contractual Life (Years) | 1 year 3 months |
Weighted Average Exercise Price (in dollars per share) | $ 24.34 |
SHARE-BASED COMPENSATION PLAN_7
SHARE-BASED COMPENSATION PLANS - Schedule of Employee Stock Purchase Plan Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||
Shares purchased | 8,214 | 56,885 | 25,834 |
Employee Stock Purchase Plan | |||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||
Shares purchased | 5,907 | 6,632 | 6,334 |
Weighted average price of shares purchased (in dollars per share) | $ 23.04 | $ 20.57 | $ 16.64 |
Compensation expense recognized | $ 14 | $ 17 | $ 17 |
Tax benefits | $ 3 | $ 6 | $ 6 |
DEPOSITS - Summary of Compositi
DEPOSITS - Summary of Composition of Deposits (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Banking and Thrift [Abstract] | ||
Noninterest-bearing | $ 204,843 | $ 162,343 |
NOW and money market | 856,520 | 687,936 |
Savings | 113,515 | 95,148 |
Time ($250,000 or less) | 343,551 | 252,200 |
Time (over $250,000) | 40,327 | |
Total deposits | $ 1,558,756 | $ 1,219,515 |
DEPOSITS - Scheduled Maturities
DEPOSITS - Scheduled Maturities of Time Deposits (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Banking and Thrift [Abstract] | |
2019 | $ 259,909 |
2020 | 97,008 |
2021 | 14,486 |
2022 | 8,603 |
2023 | 2,941 |
Thereafter | 931 |
Total | $ 383,878 |
DEPOSITS - Narrative (Detail)
DEPOSITS - Narrative (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Cash and Cash Equivalents [Line Items] | ||
Brokered time deposits | $ 126,556 | $ 96,368 |
Bank Time Deposits | ||
Cash and Cash Equivalents [Line Items] | ||
Time deposits that meet or exceed the FDIC limit | $ 40,327 | $ 21,888 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transactions [Abstract] | ||
Balance, beginning of year | $ 673 | |
New loans | 1,080 | |
Repayments | (728) | |
Director and officer relationship changes | 16 | |
Balance, end of year | 1,041 | |
Deposits of officers and directors | $ 3,536 | $ 3,723 |
SHORT-TERM BORROWINGS - Summary
SHORT-TERM BORROWINGS - Summary of the Use of Short-Term Borrowings (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |||
Balance at year-end | $ 55,000 | $ 50,000 | $ 52,000 |
Weighted average interest rate at year-end | 2.76% | 1.21% | 0.76% |
Average balance during the year | $ 71,457 | $ 54,610 | $ 17,841 |
Average interest rate during the year | 2.09% | 1.08% | 0.61% |
Maximum month-end balance during the year | $ 103,000 | $ 72,000 | $ 52,000 |
SHORT-TERM BORROWINGS - Summa_2
SHORT-TERM BORROWINGS - Summary of the Use of Securities Sold Under Agreements to Repurchase (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |||
Balance at year-end | $ 9,069 | $ 43,576 | $ 35,864 |
Weighted average interest rate at year-end | 1.22% | 0.56% | 0.20% |
Average balance during the year | $ 9,715 | $ 43,205 | $ 38,546 |
Average interest rate during the year | 0.82% | 0.45% | 0.20% |
Maximum month-end balance during the year | $ 14,591 | $ 55,270 | $ 52,693 |
Fair value of securities underlying the agreements at year-end | $ 17,942 | $ 53,485 | $ 56,201 |
LONG-TERM DEBT - Schedule of Lo
LONG-TERM DEBT - Schedule of Long-Term Debt (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Amount | ||
Total FHLB Advances | $ 83,450 | $ 83,815 |
Weighted Average rate | ||
Total | 1.92% | 1.93% |
FHLB fixed rate advances maturing | ||
Amount | ||
2019 | $ 40,000 | $ 40,000 |
2020 | 40,350 | 40,350 |
Total Fixed Rate Advances | $ 80,350 | $ 80,350 |
Weighted Average rate | ||
2019 | 1.86% | 1.86% |
2020 | 1.76% | 1.76% |
Total | 1.81% | 1.81% |
FHLB amortizing advance requiring monthly principal and interest payments, maturing | ||
Amount | ||
2025 | $ 3,100 | $ 3,465 |
Weighted Average rate | ||
2025 | 4.74% | 4.74% |
LONG-TERM DEBT - Summary of Fut
LONG-TERM DEBT - Summary of Future Principal Payments Required (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
2019 | $ 40,382 | |
2020 | 40,751 | |
2021 | 421 | |
2022 | 441 | |
2023 | 462 | |
Thereafter | 993 | |
Total | $ 83,450 | $ 83,815 |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Detail) | Dec. 31, 2018USD ($)bank | Dec. 31, 2017USD ($)bank |
Debt Instrument [Line Items] | ||
Collateral for all outstanding loans | $ 554,306,000 | |
Additional availability at the FHLB based on qualifying collateral | 330,306,000 | |
Letters of credit | 84,000,000 | |
Letters of credit non-deposit | $ 1,550,000 | |
Number of correspondent banks | bank | 2 | 2 |
Available unsecured lines of credit | $ 30,000,000 | |
Borrowings under lines of credit | 0 | $ 0 |
Prime rate | ||
Debt Instrument [Line Items] | ||
Unsecured line of credit | $ 5,000,000 |
SUBORDINATED DEBENTURES (Detail
SUBORDINATED DEBENTURES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Long-term debt | $ 83,450 | $ 83,815 |
Debt issuance costs | $ 641 | |
Debt issuance cost amortization period | 10 years | |
Notes Payable | Subordinated Notes matures 2028 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 31,859 | |
Fixed interest rate, percentage | 6.00% | |
LIBOR | Notes Payable | Subordinated Notes matures 2028 | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3.16% |
SHAREHOLDERS_ EQUITY AND REGU_3
SHAREHOLDERS’ EQUITY AND REGULATORY CAPITAL - Narrative (Detail) - USD ($) $ / shares in Units, $ in Thousands | Oct. 17, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2015 |
Class of Stock [Line Items] | |||||
Common stock reserved to be issued under dividend reinvestment and stock purchase plan (in shares) | 1,045,000 | ||||
Shares available to be issued under the plan (in shares) | 665,000 | ||||
Outstanding shares of common stock authorized to be repurchased (in shares) | 416,000 | ||||
Shares repurchased under the program (in shares) | 82,725 | ||||
Total cost of shares repurchased under the program | $ 1,438 | ||||
Shares repurchased under the program, price per share (in dollars per share) | $ 17.38 | ||||
Cash dividend declared by the Board (in dollars per share) | $ 0.15 | $ 0.51 | $ 0.42 | $ 0.35 | |
Amount available for dividend distribution | $ 20,490 | ||||
Maximum amount available to loan nonbank affiliates | $ 17,789 | ||||
Maximum | |||||
Class of Stock [Line Items] | |||||
Outstanding shares of common stock authorized to be repurchased (as a percent) | 5.00% |
SHAREHOLDERS_ EQUITY AND REGU_4
SHAREHOLDERS’ EQUITY AND REGULATORY CAPITAL - Schedule of Actual and Required Capital Amounts and Ratios (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Consolidated | ||
Total Capital to risk weighted assets | ||
Actual, Amount | $ 206,988 | $ 152,386 |
Actual, Ratio | 15.60% | 13.30% |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 131,393 | $ 106,040 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 9.875% | 9.25% |
Tier 1 Capital to risk weighted assets | ||
Actual, Amount | $ 160,117 | $ 138,774 |
Actual, Ratio | 12.00% | 12.10% |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 104,782 | $ 83,112 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 7.875% | 7.25% |
Common Tier 1 (CET1) to risk weighted assets | ||
Actual, Amount | $ 160,117 | $ 138,774 |
Actual, Ratio | 12.00% | 12.10% |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 84,823 | $ 65,917 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 6.375% | 5.75% |
Tier 1 Capital to average assets | ||
Actual, Amount | $ 160,117 | $ 138,774 |
Actual, Ratio | 8.40% | 8.90% |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 76,089 | $ 62,042 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 4.00% | 4.00% |
Bank | ||
Total Capital to risk weighted assets | ||
Actual, Amount | $ 177,892 | $ 148,997 |
Actual, Ratio | 13.40% | 13.00% |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 131,286 | $ 105,747 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 9.875% | 9.25% |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 132,948 | $ 114,321 |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 10.00% | 10.00% |
Tier 1 Capital to risk weighted assets | ||
Actual, Amount | $ 162,880 | $ 135,385 |
Actual, Ratio | 12.30% | 11.80% |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 104,696 | $ 82,883 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 7.875% | 7.25% |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 106,358 | $ 91,457 |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 8.00% | 8.00% |
Common Tier 1 (CET1) to risk weighted assets | ||
Actual, Amount | $ 162,880 | $ 135,385 |
Actual, Ratio | 12.30% | 11.80% |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 84,754 | $ 65,734 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 6.375% | 5.75% |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 86,416 | $ 74,308 |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 6.50% | 6.50% |
Tier 1 Capital to average assets | ||
Actual, Amount | $ 162,880 | $ 135,385 |
Actual, Ratio | 8.60% | 8.70% |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Amount | $ 76,113 | $ 62,066 |
For Capital Adequacy Purposes (includes applicable capital conservation buffer), Ratio | 4.00% | 4.00% |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Amount | $ 95,142 | $ 77,582 |
To Be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 5.00% | 5.00% |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||
Net income | $ 12,805 | $ 8,090 | $ 6,628 |
Weighted average shares outstanding - basic (in shares) | 8,360 | 8,070 | 8,059 |
Dilutive effect of share-based compensation (in shares) | 177 | 156 | 86 |
Weighted average shares outstanding - diluted (in shares) | 8,537 | 8,226 | 8,145 |
Per share information: | |||
Basic earnings per share (in dollars per share) | $ 1.53 | $ 1 | $ 0.82 |
Diluted earnings per share (in dollars per share) | $ 1.50 | $ 0.98 | $ 0.81 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Detail) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Average outstanding stock options not included in computation of earnings per share (in shares) | 21 | 42 | 90 |
FINANCIAL INSTRUMENTS WITH OF_3
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK - Schedule of Commitments and Conditional Obligations (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Home equity lines of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Contract or Notional Amount | $ 160,971 | $ 139,281 |
1-4 family residential construction loans | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Contract or Notional Amount | 13,002 | 11,420 |
Commercial real estate, construction and land development loans | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Contract or Notional Amount | 31,133 | 44,592 |
Commercial, industrial and other loans | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Contract or Notional Amount | 147,518 | 145,394 |
Standby letters of credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Contract or Notional Amount | $ 13,909 | $ 12,273 |
FINANCIAL INSTRUMENTS WITH OF_4
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK - Narrative (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Disclosures [Abstract] | ||
Reserve in other liabilities | $ 998 | $ 816 |
MPF Program | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total outstanding balance of loans sold under the MPF Program | 30,149 | 31,977 |
Limited recourse back on loans | $ 1,186 | $ 1,135 |
FINANCIAL INSTRUMENTS WITH OF_5
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK - Schedule of Net Amount Expensed (Recovered) Through Noninterest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |||
Off-balance sheet credit exposures expense | $ 182 | $ 32 | $ 312 |
FINANCIAL INSTRUMENTS WITH OF_6
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK - Schedule of MPF Program Recourse (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
MPF Program | |||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |||
MPF program recourse loss expense (recovery) | $ (135) | $ 25 | $ 18 |
FAIR VALUE - Narrative (Detail)
FAIR VALUE - Narrative (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of investment | $ 465,844,000 | $ 415,308,000 | |
Purchase of investment | 226,014,000 | 203,719,000 | $ 108,448,000 |
Specific charges to value the real estate owned | 0 | 0 | |
Change in fair value of foreclosed real estate | 0 | 0 | 43,000 |
Impaired loans | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Changes in fair value of impaired loans and foreclosed real estate | 146,000 | 867,000 | $ 268,000 |
Fair Value, Measurements, Recurring | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value liabilities | 0 | ||
Fair value of investment | 465,844,000 | 415,308,000 | |
Fair Value, Measurements, Nonrecurring | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Allowance for loan losses or partial charge-offs | 928,000 | 2,266,000 | |
Private label commercial CMOs | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of investment | 7,209,000 | ||
Purchase of investment | 7,213,000 | ||
Premium amortization | 41,000 | ||
Unrealized gain | 37,000 | ||
Private label commercial CMOs | Fair Value, Measurements, Recurring | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of investment | $ 75,045,000 | $ 7,653,000 |
FAIR VALUE - Summary of Assets
FAIR VALUE - Summary of Assets Measured at Fair Value on a Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 465,844 | $ 415,308 |
States and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 145,004 | 159,458 |
GSE residential CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 108,064 | 111,119 |
GSE residential MBSs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 49,530 | |
Private label residential CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 143 | 1,003 |
Private label commercial CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 7,209 | |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 465,844 | 415,308 |
Fair Value, Measurements, Recurring | States and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 145,004 | 159,458 |
Fair Value, Measurements, Recurring | GSE residential CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 108,064 | 111,119 |
Fair Value, Measurements, Recurring | GSE residential MBSs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 49,530 | |
Fair Value, Measurements, Recurring | Private label residential CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 143 | 1,003 |
Fair Value, Measurements, Recurring | Private label commercial CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 75,045 | 7,653 |
Fair Value, Measurements, Recurring | Asset-backed and other | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 137,588 | 86,545 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | States and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | GSE residential CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | GSE residential MBSs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Private label residential CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Private label commercial CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Asset-backed and other | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 458,635 | 415,308 |
Fair Value, Measurements, Recurring | Level 2 | States and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 145,004 | 159,458 |
Fair Value, Measurements, Recurring | Level 2 | GSE residential CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 108,064 | 111,119 |
Fair Value, Measurements, Recurring | Level 2 | GSE residential MBSs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 49,530 | |
Fair Value, Measurements, Recurring | Level 2 | Private label residential CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 143 | 1,003 |
Fair Value, Measurements, Recurring | Level 2 | Private label commercial CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 67,836 | 7,653 |
Fair Value, Measurements, Recurring | Level 2 | Asset-backed and other | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 137,588 | 86,545 |
Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 7,209 | 0 |
Fair Value, Measurements, Recurring | Level 3 | States and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | GSE residential CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | GSE residential MBSs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | |
Fair Value, Measurements, Recurring | Level 3 | Private label residential CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Private label commercial CMOs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 7,209 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Asset-backed and other | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 0 | $ 0 |
FAIR VALUE - Summary of Asset_2
FAIR VALUE - Summary of Assets Measured at Fair Value on Nonrecurring Basis (Detail) - Fair Value, Measurements, Nonrecurring - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | $ 3,051 | $ 7,173 |
Commercial Real Estate | Owner-occupied | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 1,087 | 430 |
Commercial Real Estate | Non-owner occupied | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 4,066 | |
Commercial Real Estate | Multi-family | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 131 | 165 |
Commercial Real Estate | Non-owner occupied residential | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 278 | 344 |
Commercial and industrial | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 25 | 53 |
Residential mortgage | First lien | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 1,121 | 1,951 |
Residential mortgage | Home equity lines of credit | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 409 | 161 |
Installment and other loans | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 3 | |
Level 1 | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 0 | 0 |
Level 1 | Commercial Real Estate | Owner-occupied | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 0 | 0 |
Level 1 | Commercial Real Estate | Non-owner occupied | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 0 | |
Level 1 | Commercial Real Estate | Multi-family | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 0 | 0 |
Level 1 | Commercial Real Estate | Non-owner occupied residential | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 0 | 0 |
Level 1 | Commercial and industrial | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 0 | 0 |
Level 1 | Residential mortgage | First lien | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 0 | 0 |
Level 1 | Residential mortgage | Home equity lines of credit | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 0 | 0 |
Level 1 | Installment and other loans | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 0 | |
Level 2 | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 0 | 0 |
Level 2 | Commercial Real Estate | Owner-occupied | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 0 | 0 |
Level 2 | Commercial Real Estate | Non-owner occupied | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 0 | |
Level 2 | Commercial Real Estate | Multi-family | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 0 | 0 |
Level 2 | Commercial Real Estate | Non-owner occupied residential | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 0 | 0 |
Level 2 | Commercial and industrial | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 0 | 0 |
Level 2 | Residential mortgage | First lien | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 0 | 0 |
Level 2 | Residential mortgage | Home equity lines of credit | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 0 | 0 |
Level 2 | Installment and other loans | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 0 | |
Level 3 | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 3,051 | 7,173 |
Level 3 | Commercial Real Estate | Owner-occupied | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 1,087 | 430 |
Level 3 | Commercial Real Estate | Non-owner occupied | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 4,066 | |
Level 3 | Commercial Real Estate | Multi-family | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 131 | 165 |
Level 3 | Commercial Real Estate | Non-owner occupied residential | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 278 | 344 |
Level 3 | Commercial and industrial | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 25 | 53 |
Level 3 | Residential mortgage | First lien | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | 1,121 | 1,951 |
Level 3 | Residential mortgage | Home equity lines of credit | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | $ 409 | 161 |
Level 3 | Installment and other loans | ||
Summary of assets measured at fair value on a nonrecurring basis | ||
Impaired Loans | $ 3 |
FAIR VALUE - Schedule of Additi
FAIR VALUE - Schedule of Additional Qualitative Information (Detail) - Fair Value, Measurements, Nonrecurring - Impaired loans $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Appraisal of Collateral | ||
Fair Value Inputs and Valuation Techniques [Line Items] | ||
Fair Value Estimate | $ 3,051 | $ 7,173 |
Minimum | ||
Fair Value Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0 | |
Minimum | Appraisal of Collateral | ||
Fair Value Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0.07 | |
Maximum | ||
Fair Value Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0.20 | |
Maximum | Appraisal of Collateral | ||
Fair Value Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0.75 | |
Measurement Input, Discount Rate | Minimum | ||
Fair Value Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0.06 | |
Measurement Input, Discount Rate | Minimum | Appraisal of Collateral | ||
Fair Value Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0.05 | |
Measurement Input, Discount Rate | Maximum | ||
Fair Value Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0.20 | |
Measurement Input, Discount Rate | Maximum | Appraisal of Collateral | ||
Fair Value Inputs and Valuation Techniques [Line Items] | ||
Asset, measurement input (percent) | 0.75 |
FAIR VALUE - Schedule of Estima
FAIR VALUE - Schedule of Estimated Fair Values of Financial Instruments (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financial Assets | ||
Interest-bearing deposits with banks | $ 45,664 | $ 8,073 |
Federal funds sold | 16,995 | 0 |
Restricted investments in bank stock | 10,842 | 9,997 |
Carrying Amount | ||
Financial Assets | ||
Cash and due from banks | 26,156 | 21,734 |
Interest-bearing deposits with banks | 45,664 | 8,073 |
Federal funds sold | 16,995 | |
Restricted investments in bank stock | 10,842 | 9,997 |
Securities available for sale | 465,844 | 415,308 |
Loans held for sale | 3,340 | 6,089 |
Loans, net of allowance for loan losses | 1,233,643 | 997,216 |
Accrued interest receivable | 5,927 | 5,048 |
Financial Liabilities | ||
Deposits | 1,558,756 | 1,219,515 |
Short-term borrowings | 64,069 | 93,576 |
Long-term debt | 83,450 | 83,815 |
Subordinated notes | 31,859 | |
Accrued interest payable | 1,301 | 495 |
Off-balance sheet instruments | 0 | 0 |
Fair Value | Fair Value | ||
Financial Assets | ||
Cash and due from banks | 26,156 | 21,734 |
Interest-bearing deposits with banks | 45,664 | 8,073 |
Federal funds sold | 16,995 | |
Securities available for sale | 465,844 | 415,308 |
Loans held for sale | 3,413 | 6,272 |
Loans, net of allowance for loan losses | 1,229,645 | 994,617 |
Accrued interest receivable | 5,927 | 5,048 |
Financial Liabilities | ||
Deposits | 1,555,912 | 1,213,288 |
Short-term borrowings | 64,069 | 93,576 |
Long-term debt | 82,951 | 83,949 |
Subordinated notes | 31,256 | |
Accrued interest payable | 1,301 | 495 |
Off-balance sheet instruments | 0 | 0 |
Fair Value | Level 1 | ||
Financial Assets | ||
Cash and due from banks | 26,156 | 21,734 |
Interest-bearing deposits with banks | 45,664 | 8,073 |
Federal funds sold | 16,995 | |
Securities available for sale | 0 | 0 |
Loans held for sale | 0 | 0 |
Loans, net of allowance for loan losses | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Financial Liabilities | ||
Deposits | 0 | 0 |
Short-term borrowings | 0 | 0 |
Long-term debt | 0 | 0 |
Subordinated notes | 0 | |
Accrued interest payable | 0 | 0 |
Off-balance sheet instruments | 0 | 0 |
Fair Value | Level 2 | ||
Financial Assets | ||
Cash and due from banks | 0 | 0 |
Interest-bearing deposits with banks | 0 | 0 |
Federal funds sold | 0 | |
Securities available for sale | 458,635 | 415,308 |
Loans held for sale | 3,413 | 6,272 |
Loans, net of allowance for loan losses | 0 | 0 |
Accrued interest receivable | 2,853 | 2,580 |
Financial Liabilities | ||
Deposits | 1,555,912 | 1,213,288 |
Short-term borrowings | 64,069 | 93,576 |
Long-term debt | 82,951 | 83,949 |
Subordinated notes | 31,256 | |
Accrued interest payable | 1,301 | 495 |
Off-balance sheet instruments | 0 | 0 |
Fair Value | Level 3 | ||
Financial Assets | ||
Cash and due from banks | 0 | 0 |
Interest-bearing deposits with banks | 0 | 0 |
Federal funds sold | 0 | |
Securities available for sale | 7,209 | 0 |
Loans held for sale | 0 | 0 |
Loans, net of allowance for loan losses | 1,229,645 | 994,617 |
Accrued interest receivable | 3,074 | 2,468 |
Financial Liabilities | ||
Deposits | 0 | 0 |
Short-term borrowings | 0 | 0 |
Long-term debt | 0 | 0 |
Subordinated notes | 0 | |
Accrued interest payable | 0 | 0 |
Off-balance sheet instruments | $ 0 | $ 0 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||
Receivables from customers | $ 640 | $ 682 | |
Other service charges | 1,392 | 673 | $ 591 |
Mortgage banking activities | 2,663 | 2,919 | 3,412 |
Income from life insurance | 1,463 | 1,109 | 1,099 |
Other income | 320 | 190 | 345 |
Investment securities gains | 1,006 | 1,190 | 1,420 |
Total noninterest income | 21,854 | 20,387 | 19,739 |
Service charges on deposits | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer | 3,578 | 3,392 | 3,285 |
Trust and investment management income | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer | 6,576 | 6,400 | 5,091 |
Brokerage income | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer | 2,035 | 1,896 | 1,933 |
Merchant and bankcard fees (interchange income) | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer | 2,821 | 2,618 | 2,563 |
Noninterest income | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer | $ 15,010 | $ 14,306 | $ 12,872 |
ORRSTOWN FINANCIAL SERVICES, _3
ORRSTOWN FINANCIAL SERVICES, INC. (PARENT COMPANY ONLY) CONDENSED FINANCIAL INFORMATION - Condensed Balance Sheets (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||||
Cash in Orrstown Bank | $ 26,156 | $ 21,734 | ||
Deposits with other banks | 45,664 | 8,073 | ||
Cash and cash equivalents | 88,815 | 29,807 | $ 30,273 | $ 28,340 |
Other assets | 29,947 | 25,930 | ||
Total assets | 1,934,388 | 1,558,849 | ||
Subordinated Debt | 31,859 | 0 | ||
Accrued interest and other liabilities | 22,821 | 17,178 | ||
Total liabilities | 1,760,955 | 1,414,084 | ||
Shareholders’ Equity | ||||
Common stock | 491 | 435 | ||
Additional paid-in capital | 151,678 | 125,458 | ||
Retained earnings | 24,472 | 16,042 | ||
Accumulated other comprehensive income (loss) | (2,972) | 2,845 | ||
Treasury stock | (236) | (15) | ||
Total shareholders’ equity | 173,433 | 144,765 | 134,859 | 133,061 |
Total liabilities and shareholders’ equity | 1,934,388 | 1,558,849 | ||
Consolidated | ||||
Assets | ||||
Cash in Orrstown Bank | 28,596 | 703 | ||
Deposits with other banks | 0 | 214 | ||
Cash and cash equivalents | 28,596 | 917 | $ 10,570 | $ 14,353 |
Investment in Orrstown Bank | 175,299 | 140,429 | ||
Other assets | 2,057 | 4,067 | ||
Total assets | 205,952 | 145,413 | ||
Subordinated Debt | 31,859 | 0 | ||
Accrued interest and other liabilities | 660 | 648 | ||
Total liabilities | 32,519 | 648 | ||
Shareholders’ Equity | ||||
Common stock | 491 | 435 | ||
Additional paid-in capital | 151,678 | 125,458 | ||
Retained earnings | 24,472 | 16,042 | ||
Accumulated other comprehensive income (loss) | (2,972) | 2,845 | ||
Treasury stock | (236) | (15) | ||
Total shareholders’ equity | 173,433 | 144,765 | ||
Total liabilities and shareholders’ equity | $ 205,952 | $ 145,413 |
ORRSTOWN FINANCIAL SERVICES, _4
ORRSTOWN FINANCIAL SERVICES, INC. (PARENT COMPANY ONLY) CONDENSED FINANCIAL INFORMATION - Condensed Statements of Income (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income | |||
Other income | $ 320 | $ 190 | $ 345 |
Expenses | |||
Interest on short-term borrowings | 1,577 | 784 | 187 |
Interest on subordinated notes | 73 | 0 | 0 |
Total interest expense | 13,467 | 7,644 | 5,417 |
Share-based compensation | 1,493 | 1,386 | 958 |
Merger related | 3,197 | 0 | 0 |
Income tax benefit | 1,640 | 4,338 | 1,266 |
Net income | 12,805 | 8,090 | 6,628 |
Consolidated | |||
Income | |||
Dividends from subsidiaries | 4,450 | 0 | 2,200 |
Interest income subsidiary from bank subsidiary | 7 | 15 | 38 |
Other income | 102 | 61 | 62 |
Total income | 4,559 | 76 | 2,300 |
Expenses | |||
Interest on short-term borrowings | 57 | 0 | 0 |
Interest on subordinated notes | 73 | 0 | 0 |
Total interest expense | 130 | 0 | 0 |
Share-based compensation | 205 | 247 | 216 |
Management fee to Bank | 1,042 | 501 | 504 |
Merger related | 1,545 | 0 | 0 |
Other expenses | 656 | 1,116 | 2,152 |
Total expenses | 3,578 | 1,864 | 2,872 |
Income (loss) before income tax benefit and equity in undistributed income of subsidiaries | 981 | (1,788) | (572) |
Income tax benefit | (735) | (596) | (606) |
Income (loss) before equity in undistributed income of subsidiaries | 1,716 | (1,192) | 34 |
Equity in undistributed income of subsidiaries | 11,089 | 9,282 | 6,594 |
Net income | $ 12,805 | $ 8,090 | $ 6,628 |
ORRSTOWN FINANCIAL SERVICES, _5
ORRSTOWN FINANCIAL SERVICES, INC. (PARENT COMPANY ONLY) CONDENSED FINANCIAL INFORMATION - Condensed Statements of Cash Flows (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net income | $ 12,805 | $ 8,090 | $ 6,628 |
Adjustments to reconcile net income to cash provided by (used in) operating activities: | |||
Deferred income taxes | 543 | 3,078 | (232) |
Share-based compensation | 1,493 | 1,386 | 958 |
Net change in other assets | 535 | 52 | (135) |
Net cash provided by operating activities | 22,487 | 16,350 | 15,587 |
Cash flows from investing activities: | |||
Other, net | 7 | 74 | (439) |
Net cash used in investing activities | (139,396) | (145,892) | (128,891) |
Cash flows from financing activities: | |||
Dividends paid | (4,375) | (3,488) | (2,898) |
Payments to repurchase common stock | 0 | 0 | (631) |
Net cash provided by financing activities | 175,917 | 129,076 | 115,237 |
Net increase (decrease) in cash and cash equivalents | 59,008 | (466) | 1,933 |
Cash and cash equivalents at beginning of year | 29,807 | 30,273 | 28,340 |
Cash and cash equivalents at end of year | 88,815 | 29,807 | 30,273 |
Consolidated | |||
Cash flows from operating activities: | |||
Net income | 12,805 | 8,090 | 6,628 |
Adjustments to reconcile net income to cash provided by (used in) operating activities: | |||
Amortization | 3 | 0 | 0 |
Deferred income taxes | 22 | 16 | 4 |
Equity in undistributed income of subsidiaries | (11,089) | (9,282) | (6,594) |
Share-based compensation | 205 | 247 | 216 |
Net change in other liabilities | 12 | (35) | (6) |
Net change in other assets | 2,039 | (377) | (849) |
Net cash provided by operating activities | 3,997 | (1,341) | (601) |
Cash flows from investing activities: | |||
Capital contributed to subsidiaries | 0 | (6,100) | 0 |
Net cash paid for acquisitions | (4,597) | 0 | 0 |
Other, net | 0 | 0 | (500) |
Net cash used in investing activities | (4,597) | (6,100) | (500) |
Cash flows from financing activities: | |||
Dividends paid | (4,375) | (3,488) | (2,898) |
Proceeds from issuance of subordinated notes, net of costs | 31,857 | 0 | 0 |
Proceeds from issuance of common stock | 1,448 | 1,276 | 847 |
Payments to repurchase common stock | (651) | 0 | (631) |
Net cash provided by financing activities | 28,279 | (2,212) | (2,682) |
Net increase (decrease) in cash and cash equivalents | 27,679 | (9,653) | (3,783) |
Cash and cash equivalents at beginning of year | 917 | 10,570 | 14,353 |
Cash and cash equivalents at end of year | $ 28,596 | $ 917 | $ 10,570 |
CONTINGENCIES (Detail)
CONTINGENCIES (Detail) $ in Thousands | Jun. 22, 2015 | Jun. 30, 2016USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017claim |
Commitments and Contingencies Disclosure [Abstract] | ||||
Number of legal proceedings that might have a material effect on the results of operations | claim | 0 | |||
Period to amend complaint or file notice | 30 days | |||
Civil money penalty | $ 1,000 | |||
Pending Litigation | SEPTA Second Amended Complaint | ||||
Loss Contingencies [Line Items] | ||||
Indemnification costs | $ 645 |