Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Jun. 30, 2014 | Feb. 28, 2015 | |
Entity Information [Line Items] | |||
Entity Registrant Name | ROYAL BANCSHARES OF PENNSYLVANIA INC | ||
Entity Central Index Key | 922487 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $32,974,020 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Common Class A [Member] | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 27,816,866 | ||
Common Class B [Member] | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 1,931,692 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
ASSETS | ||
Cash and due from banks | $9,642,000 | $9,154,000 |
Interest bearing deposits | 21,148,000 | 7,690,000 |
Total cash and cash equivalents | 30,790,000 | 16,844,000 |
Investment securities available-for-sale (“AFSâ€), at fair value | 250,368,000 | 308,727,000 |
Other investment, at cost | 2,250,000 | 2,250,000 |
Federal Home Loan Bank ("FHLB") stock | 2,622,000 | 4,204,000 |
Loans and leases held for sale ("LHFS"), at lower of cost or fair value | 1,446,000 | |
Loans and leases ("LHFI") | 415,132,000 | 366,481,000 |
Less allowance for loan and lease losses | 11,708,000 | 13,671,000 |
Net loans and leases | 403,424,000 | 352,810,000 |
Bank owned life insurance | 15,636,000 | 15,124,000 |
Accrued interest receivable | 5,270,000 | 7,054,000 |
Other real estate owned ("OREO"), net | 9,779,000 | 9,617,000 |
Premises and equipment, net | 5,201,000 | 4,475,000 |
Other assets | 7,213,000 | 9,703,000 |
Total assets | 732,553,000 | 732,254,000 |
Deposits | ||
Non-interest bearing | 73,665,000 | 60,473,000 |
Interest bearing | 456,760,000 | 468,491,000 |
Total deposits | 530,425,000 | 528,964,000 |
Short-term borrowings | 10,000,000 | |
Long-term borrowings | 92,426,000 | 97,881,000 |
Subordinated debentures | 25,774,000 | 25,774,000 |
Accrued interest payable | 726,000 | 965,000 |
Other liabilities | 20,596,000 | 20,865,000 |
Total liabilities | 669,947,000 | 684,449,000 |
Royal Bancshares of Pennsylvania, Inc. equity: | ||
Preferred stock, Series A perpetual, $1,000 liquidation value, 500,000 shares authorized, 18,856 and 30,407 shares outstanding at December 31, 2014 and December 31, 2013, respectively | 18,856,000 | 29,950,000 |
Additional paid in capital | 110,697,000 | 127,299,000 |
Accumulated deficit | -115,864,000 | -120,396,000 |
Accumulated other comprehensive loss | -2,492,000 | -6,122,000 |
Treasury stock - at cost, shares of Class A, 398,365 and 453,077 at December 31, 2014 and December 31, 2013 | -5,571,000 | -6,336,000 |
Total Royal Bancshares of Pennsylvania, Inc. shareholders’ equity | 62,219,000 | 47,534,000 |
Noncontrolling interest | 387,000 | 271,000 |
Total equity | 62,606,000 | 47,805,000 |
Total liabilities and shareholders' equity | 732,553,000 | 732,254,000 |
Common Class A [Member] | ||
Royal Bancshares of Pennsylvania, Inc. equity: | ||
Common stock | 56,400,000 | 22,940,000 |
Common Class B [Member] | ||
Royal Bancshares of Pennsylvania, Inc. equity: | ||
Common stock | $193,000 | $199,000 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Royal Bancshares of Pennsylvania, Inc. equity: | ||
Preferred stock, liquidation value (in dollars per share) | $1,000 | $1,000 |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, shares outstanding (in shares) | 18,856 | 30,407 |
Common Class A [Member] | ||
Royal Bancshares of Pennsylvania, Inc. equity: | ||
Common stock, par value (in dollars per share) | $2 | $2 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, shares issued (in shares) | 28,200,269 | 11,469,940 |
Treasury stock, shares (in shares) | 398,365 | 453,077 |
Common Class B [Member] | ||
Royal Bancshares of Pennsylvania, Inc. equity: | ||
Common stock, par value (in dollars per share) | $0.10 | $0.10 |
Common stock, shares authorized (in shares) | 3,000,000 | 3,000,000 |
Common stock, shares issued (in shares) | 1,931,692 | 1,987,142 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Interest Income | ||
Loans and leases, including fees | $21,571,000 | $21,741,000 |
Investment securities AFS | 7,191,000 | 5,757,000 |
Deposits in banks | 22,000 | 26,000 |
Total Interest Income | 28,784,000 | 27,524,000 |
Interest Expense | ||
Deposits | 3,604,000 | 4,022,000 |
Short-term borrowings | 13,000 | 22,000 |
Long-term borrowings | 2,867,000 | 3,313,000 |
Total Interest Expense | 6,484,000 | 7,357,000 |
Net Interest Income | 22,300,000 | 20,167,000 |
Credit for loan and lease losses | -867,000 | -872,000 |
Net Interest Income after Credit for Loan and Lease Losses | 23,167,000 | 21,039,000 |
Non-interest Income | ||
Service charges and fees | 1,032,000 | 1,323,000 |
Net gains on sales of loans and leases | 232,000 | 686,000 |
Net gains on sales of other real estate owned | 743,000 | 1,427,000 |
Income from bank owned life insurance | 512,000 | 539,000 |
Gain on sale of premises and equipment | 107,000 | 2,524,000 |
Net gains on the sale of AFS investment securities | 377,000 | 158,000 |
Total other-than-temporary impairment on AFS investment securities | -41,000 | |
Other income | 573,000 | 207,000 |
Total Non-interest Income | 3,535,000 | 6,864,000 |
Non-interest Expense | ||
Employee salaries and benefits | 10,164,000 | 10,276,000 |
Loss contingency | -55,000 | 1,750,000 |
Occupancy and equipment | 2,651,000 | 2,281,000 |
Professional and legal fees | 2,198,000 | 2,954,000 |
OREO expenses and impairment | 959,000 | 2,785,000 |
Pennsylvania shares tax | 553,000 | 1,123,000 |
FDIC and state assessments | 1,017,000 | 1,038,000 |
Communications and data processing | 732,000 | 588,000 |
Directors' fees | 482,000 | 490,000 |
Marketing and advertising | 357,000 | 209,000 |
Insurance | 350,000 | 425,000 |
Loan collection expenses | 331,000 | 557,000 |
Impairment on loans held for sale | 153,000 | |
Restructuring charges | 361,000 | |
Other operating expenses | 2,125,000 | 1,340,000 |
Total Non-interest Expense | 21,864,000 | 26,330,000 |
Income Before Tax (Benefit) Expense | 4,838,000 | 1,573,000 |
Income Tax (Benefit) Expense | -654,000 | 42,000 |
Net Income | 5,492,000 | 1,531,000 |
Less Net Income (Loss) Attributable to Noncontrolling Interest | 382,000 | -578,000 |
Net Income Attributable to Royal Bancshares of Pennsylvania, Inc. | 5,110,000 | 2,109,000 |
Less Preferred Stock Series A Accumulated Dividend and Accretion | 2,078,000 | 2,075,000 |
Net Income Available to Common Shareholders | $3,032,000 | $34,000 |
Per Common Share Data | ||
Net Income - Basic and Diluted | $0.14 | $0 |
Statements_of_Consolidated_Com
Statements of Consolidated Comprehensive Income (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | ||
Statements of Consolidated Comprehensive Income - (unaudited) [Abstract] | ||||
Net income | $5,492 | $1,531 | ||
Unrealized gains (losses) on investment securities: | ||||
Unrealized holding gains (losses) arising during period, net of tax effect | 5,135 | -6,719 | ||
Less adjustment for impaired investments (1) | -27 | [1] | ||
Less reclassification adjustment for gains realized in net income (2) | 249 | [2] | 104 | [2] |
Unrealized gains (losses) on investment securities | 4,913 | -6,823 | ||
Unrecognized benefit obligation expense: | ||||
Actuarial gain (loss), net of tax | -1,314 | 627 | ||
Less reclassification adjustment for amortization (3) | -218 | [3] | -216 | [3] |
Unrecognized benefit obligation expense | -1,096 | 843 | ||
Unrealized loss on derivative instrument | -187 | |||
Other comprehensive income (loss) | 3,630 | -5,980 | ||
Comprehensive income (loss) | 9,122 | -4,449 | ||
Less net income (loss) attributable to noncontrolling interest | 382 | -578 | ||
Comprehensive income (loss) attributable to Royal Bancshares of Pennsylvania, Inc. | $8,740 | ($3,871) | ||
[1] | Amounts are included in total other-than-temporary impairment on AFS investment securities on the Consolidated Statements of Income in total non-interest income, net of a $14,000 tax benefit.Amounts are included in net gains on the sale of AFS investment securities on the Consolidated Statements of Income in total non-interest income, net of $128,000 in taxes. | |||
[2] | Amounts are included in net gains on the sale of AFS investment securities on the Consolidated Statements of Income in total non-interest income, net of $128,000 in taxes. | |||
[3] | Amounts are included in salaries and benefits on the Consolidated Statements of Income in non-interest expense. |
Statements_of_Consolidated_Com1
Statements of Consolidated Comprehensive Income (Parenthetical) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Statements of Consolidated Comprehensive Income - (unaudited) [Abstract] | ||
Adjustment for impaired investments, Taxes | $14 | |
Reclassification adjustment for gains realized in net income, Taxes | $128 | $54 |
Consolidated_Statement_of_Chan
Consolidated Statement of Changes in Shareholders' Equity (USD $) | Preferred Stock Series A | Common Stock | Common Stock | Additional Paid In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Treasury Stock | Noncontrolling Interest | Common Class A [Member] | Total |
USD ($) | Common Class A [Member] | Common Class B [Member] | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | ||
USD ($) | USD ($) | |||||||||
Balance at Dec. 31, 2012 | $29,396,000 | $22,863,000 | $202,000 | $126,287,000 | ($121,877,000) | ($142,000) | ($6,971,000) | $3,810,000 | $53,568,000 | |
Balance (in shares) at Dec. 31, 2012 | 11,432 | 2,020 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income (loss) | 2,109,000 | -578,000 | 1,531,000 | |||||||
Other comprehensive income, net of reclassifications and taxes | -5,980,000 | -5,980,000 | ||||||||
Purchase of subsidiary shares from noncontrolling interest | 1,559,000 | -2,409,000 | -850,000 | |||||||
Distributions to non controlling interests | -552,000 | -552,000 | ||||||||
Common stock conversion from Class B to Class A | 77,000 | -3,000 | -74,000 | |||||||
Common stock conversion from Class B to Class A (in shares) | 38 | -33 | ||||||||
Accretion of discount on preferred stock | 554,000 | -554,000 | ||||||||
Treasury shares issued for compensation | -569,000 | 635,000 | 66,000 | |||||||
Stock option expense | 22,000 | 22,000 | ||||||||
Balance at Dec. 31, 2013 | 29,950,000 | 22,940,000 | 199,000 | 127,299,000 | -120,396,000 | -6,122,000 | -6,336,000 | 271,000 | 47,805,000 | |
Balance (in shares) at Dec. 31, 2013 | 11,470 | 1,987 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income (loss) | 5,110,000 | 382,000 | 5,492,000 | |||||||
Other comprehensive income, net of reclassifications and taxes | 3,630,000 | 3,630,000 | ||||||||
Distributions to non controlling interests | -266,000 | -266,000 | ||||||||
Common stock conversion from Class B to Class A | 127,000 | -6,000 | -121,000 | |||||||
Common stock conversion from Class B to Class A (in shares) | 64 | -55 | ||||||||
Redemption of 11,551 shares of preferred stock | -11,551,000 | -2,392,000 | -13,943,000 | |||||||
Accretion of discount on preferred stock | 457,000 | -457,000 | ||||||||
Common shares issued | 33,333,000 | -13,333,000 | 20,000,000 | |||||||
Common stock issued (in shares) | 16,666 | |||||||||
Direct costs associated with stock issuance | -206,000 | -206,000 | ||||||||
Treasury shares issued for compensation | -660,000 | 765,000 | 105,000 | |||||||
Other adjustment to additional paid in capital | -28,000 | -28,000 | ||||||||
Stock option expense | 17,000 | 17,000 | ||||||||
Balance at Dec. 31, 2014 | $18,856,000 | $56,400,000 | $193,000 | $110,697,000 | ($115,864,000) | ($2,492,000) | ($5,571,000) | $387,000 | $62,606,000 | |
Balance (in shares) at Dec. 31, 2014 | 28,200 | 1,932 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Net Cash Provided by (Used in) Operating Activities, Continuing Operations [Abstract] | ||
Net income | $5,110,000 | $2,109,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 569,000 | 451,000 |
Stock compensation expense | 17,000 | 22,000 |
Credit for loan and lease losses | -867,000 | -872,000 |
Impairment charge for OREO | 524,000 | 1,517,000 |
Net amortization of AFS investment securities | 1,918,000 | 4,183,000 |
Net accretion on loans | -413,000 | -382,000 |
Net gains on sales of premises and equipment | -107,000 | -2,524,000 |
Net gains on sales of OREO | -743,000 | -1,427,000 |
Net gains on sales of investment securities | -377,000 | -158,000 |
Income from bank owned life insurance | -512,000 | -539,000 |
Other-than-temporary impairment on AFS investment securities | 41,000 | |
Impairment on loans held for sale | 153,000 | |
Changes in assets and liabilities: | ||
Decrease in accrued interest receivable | 1,784,000 | 3,202,000 |
Decrease in other assets | 2,490,000 | 1,502,000 |
Decrease in accrued interest payable | -239,000 | -2,795,000 |
Decrease in other liabilities | -269,000 | -2,238,000 |
Net cash provided by operating activities | 8,926,000 | 2,204,000 |
Cash flows from investing activities: | ||
Proceeds from maturities, calls and paydowns of AFS investment securities | 41,314,000 | 94,676,000 |
Proceeds from sales of AFS investment securities | 72,301,000 | 31,046,000 |
Purchase of AFS investment securities | -49,441,000 | -99,720,000 |
Redemption of Federal Home Loan Bank stock | 1,582,000 | 1,807,000 |
Proceeds from sales of loans and leases | 3,847,000 | 3,919,000 |
Gains on sales of loans and leases | -232,000 | -686,000 |
Net increase in loans | -57,702,000 | -34,408,000 |
Additions to OREO | -1,330,000 | |
Proceeds from the sales of premises and equipment | 303,000 | 3,267,000 |
Purchase of premises and equipment | -1,491,000 | -437,000 |
Proceeds from sales of OREO | 4,306,000 | 12,779,000 |
Net cash provided by investing activities | 13,457,000 | 12,243,000 |
Cash flows from financing activities: | ||
Increase in demand and NOW accounts | 14,332,000 | 3,397,000 |
Increase (decrease) in money market and savings accounts | 2,674,000 | -14,560,000 |
Decrease in certificates of deposit | -15,545,000 | -14,790,000 |
Repayments of short-term borrowings | -10,000,000 | |
Repayments of long-term borrowings | -5,455,000 | -50,452,000 |
Proceeds from short-term borrowings | 10,000,000 | |
Proceeds from long-term borrowings | 40,000,000 | |
Distributions to noncontrolling interest | -266,000 | |
Issuance of common stock, net | 20,000,000 | |
Payments of stock issuance costs | -206,000 | |
Redemption of preferred stock | -13,943,000 | |
Other financing activity | -28,000 | |
Net cash used in financing activities | -8,437,000 | -26,405,000 |
Net increase (decrease) in cash and cash equivalents | 13,946,000 | -11,958,000 |
Cash and cash equivalents at the beginning of the period | 16,844,000 | 28,802,000 |
Cash and cash equivalents at the end of the period | 30,790,000 | 16,844,000 |
Supplemental Disclosure | ||
Proceeds from income tax refunds | 654,000 | |
Interest paid | 6,723,000 | 10,152,000 |
Transfers to OREO | 2,919,000 | 9,051,000 |
Transfers to LHFS | 3,187,000 | |
Transfers to LHFI | $1,018,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2014 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | |
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
1. Basis of Financial Statement Presentation | |
Nature of Operations | |
Royal Bancshares of Pennsylvania, Inc. (the “Company”), through its wholly-owned subsidiary Royal Bank America (“Royal Bank”) offers a full range of banking services to individual and corporate customers primarily located in the Mid-Atlantic states. Royal Bank competes with other banking and financial institutions in certain markets, including financial institutions with resources substantially greater than its own. Commercial banks, savings banks, savings and loan associations, credit unions and brokerage firms actively compete for savings and time deposits and for various types of loans. Such institutions, as well as consumer finance and insurance companies, may be considered competitors of Royal Bank with respect to one or more of the services it renders. | |
Principles of Consolidation | |
The accompanying unaudited consolidated financial statements include the accounts of Royal Bancshares of Pennsylvania, Inc. (“Royal Bancshares” or the “Company”) and its wholly-owned subsidiaries, Royal Investments of Delaware, Inc., including Royal Investments of Delaware, Inc.’s wholly owned subsidiary, Royal Preferred, LLC, and Royal Bank America (“Royal Bank”), including Royal Bank’s subsidiaries, Royal Real Estate of Pennsylvania, Inc., Royal Investments America, LLC, RBA Property LLC, Narberth Property Acquisition LLC, Rio Marina LLC, and Royal Tax Lien Services, LLC (“RTL”). Royal Bank also has an 80% and 60% ownership interest in Crusader Servicing Corporation (“CSC”) and Royal Bank America Leasing, LP, respectively. Prior to December 31, 2013, Royal Bank’s ownership interest in CSC and RTL was 60%. Effective December 31, 2013, Royal Bank acquired the ownership interest of the former President of CSC and RTL. The two Delaware trusts, Royal Bancshares Capital Trust I and Royal Bancshares Capital Trust II are not consolidated per requirements under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, “Consolidation” (“ASC Topic 810”). These consolidated financial statements reflect the historical information of the Company. All significant intercompany transactions and balances have been eliminated in consolidation. | |
Use of Estimates | |
In preparing the consolidated financial statements in accordance with United States generally accepted accounting principles (“U.S. GAAP”), management is required to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. These estimates and assumptions are based on information available as of the date of the consolidated financial statements; therefore, actual results could differ from those estimates. | |
The principal estimates that are particularly susceptible to significant change in the near term relate to the allowance for loan and lease losses, the valuation of other real estate owned, the valuation of deferred tax assets, other-than-temporary impairment losses on investment securities, net periodic pension costs and the pension benefit obligation. In connection with the allowance for loan and lease losses estimate, management obtains independent appraisals for real estate collateral. However, future changes in real estate market conditions and the economy could affect the Company’s allowance for loan and lease losses. In addition, regulatory agencies, as an integral part of their examination process, periodically review the credit portfolio and the allowance. Such review may result in additional provisions based on their judgment of information available at the time of each examination. | |
Significant Concentration of Credit Risk | |
Credit risk is one of the Company’s most significant risks. It is critical for consistent profitability that the Company effectively manages credit risk. Most of the Company’s activities are with customers located within the Mid-Atlantic region of the country. “Note 3 – Investment Securities” to the Consolidated Financial Statements discusses the types of securities in which the Company invests. “Note 4 – Loans and Leases” to the Consolidated Financial Statements discusses the types of lending in which the Company engages. The Company does not have any portion of its business dependent on a single or limited number of customers, the loss of which would have a material adverse effect on its business. The Company has 87% of its investment portfolio in securities issued by government sponsored entities. The Company’s tax certificate and other real estate owned portfolios have a geographic concentration in the State of New Jersey. | |
No substantial portion of loans is concentrated within a single industry or group of related industries, except a significant majority of loans are secured by real estate. There are numerous risks associated with commercial and consumer lending that could impact the borrower’s ability to repay on a timely basis. They include, but are not limited to: the owner’s business expertise, changes in local, national, and in some cases international economies, competition, governmental regulation, and the general financial stability of the borrowing entity. The Company’s commercial real estate, commercial and industrial and construction and land development loans comprised 42%, 18% and 11%, respectively, of the loan portfolio. | |
The Company attempts to mitigate these risks through conservative underwriting policies and procedures which include an analysis of the borrower’s business and industry history, its financial position, as well as that of the business owner. The Company will also require the borrower to provide current financial information on the operation of the business periodically over the life of the loan. In addition, most commercial loans are secured by assets of the business or those of the business owner, which can be liquidated if the borrower defaults, along with the personal surety of the business owner. | |
U.S. GAAP RAP Difference | |
In connection with a prior bank regulatory examination, the Federal Deposit Insurance Company (“FDIC”) concluded, based upon its interpretation of the Consolidated Reports of Condition and Income (the “Call Report”) instructions and under regulatory accounting principles (“RAP”), that income from Royal Bank’s tax lien business should be recognized on a cash basis, not an accrual basis. Royal Bank’s current accrual method is in accordance with U.S. GAAP. Royal Bank disagrees with the FDIC’s conclusion and filed the Call Report for December 31, 2014 and the previous 17 quarters in accordance with U.S. GAAP. However, the change in the manner of revenue recognition for the tax lien business for regulatory accounting purposes affects Royal Bank’s and potentially the Company’s capital ratios as disclosed in “Note 2 - Regulatory Matters and Significant Risks And Uncertainties” and “Note 16 - Regulatory Capital Requirements” to the Consolidated Financial Statements. The resolution of this matter will be decided by additional joint regulatory agency guidance which includes the Federal Reserve Bank, the FDIC, and the Office of the Comptroller of the Currency (“OCC”). | |
Reclassifications | |
Certain items in the 2013 consolidated financial statements and accompanying notes have been reclassified to conform to the current year’s presentation format. There was no effect on net income or net loss for the periods presented herein as a result of the reclassification. | |
Cash and Cash Equivalents | |
For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, interest-bearing deposits and federal funds sold. Generally, federal funds are purchased and sold for one-day periods. | |
Investment Securities | |
Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates such designation as of each balance sheet date. Investments in debt securities that the Company has the positive intent and ability to hold to maturity are classified as held to maturity securities and reported at amortized cost. Debt and equity securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and reported at fair value, with unrealized holding gains and losses included in earnings. Debt and equity securities not classified as trading securities, nor as held to maturity securities, are classified as available for sale securities and reported at fair value, with unrealized holding gains or losses, net of deferred income taxes (when applicable), reported in the accumulated other comprehensive income (loss) (“AOCI”) component of shareholders’ equity. The Company did not hold trading securities nor had securities classified as held to maturity at December 31, 2014 and 2013. Discounts and premiums are accreted/amortized to income by use of the level-yield method. Gain or loss on sales of securities available for sale is based on the specific identification method. | |
The Company evaluates declines in the fair value of securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis. The term “other-than-temporary” is not intended to indicate that the decline is permanent, but indicates that the prospects for a near-term recovery of value is not necessarily favorable, or that there is a lack of evidence to support a realizable value equal to or greater than the carrying value of the investment. All investment securities are evaluated for OTTI under FASB ASC Topic 320, “Investments-Debt & Equity Securities” (“ASC Topic 320”). In determining whether OTTI exists, management considers numerous factors, including but not limited to: (1) the length of time and the extent to which the fair value is less than the amortized cost, (2) the Company’s intent to hold or sell the security, (3) the financial condition and results of the issuer including changes in capital, (4) the credit rating of the issuer, (5) analysts’ earnings estimate, (6) industry trends specific to the security, and (7) timing of debt maturity and status of debt payments. | |
Under ASC Topic 320, OTTI is considered to have occurred with respect to debt securities (1) if an entity intends to sell the security; (2) if it is more likely than not an entity will be required to sell the security before recovery of its amortized cost basis; or (3) the present value of the expected cash flows is not sufficient to recover the entire amortized cost basis. Once a decline in value for a debt security is determined to be other-than-temporary, the other-than-temporary impairment is separated into (a) the amount of the total OTTI related to a decrease in cash flows expected to be collected from the debt security (the credit loss) and (b) the amount of the total OTTI related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings. The amount of the total OTTI related to all other factors is recognized in other comprehensive income. In determining the Company’s intent not to sell and whether it is more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, management considers the following factors: current liquidity and availability of other non-pledged assets that permits the investment to be held for an extended period of time but not necessarily until maturity, capital planning, and any specific asset liability committee goals or guidelines related to the disposition of specific investments. | |
Other Investment | |
This investment includes the Solomon Hess SBA Loan Fund, which the Company invested in to partially satisfy its community reinvestment requirement. Shares in this fund are not publicly traded and therefore have no readily determinable fair market value. An investor can have their investment in the Fund redeemed for the balance of their capital account at any quarter end with a 60-day notice to the Fund. The investment in this Fund is recorded at cost. | |
Federal Home Loan Bank Stock | |
As a member of the Federal Home Loan Bank of Pittsburgh (“FHLB”), the Company is required to purchase and hold stock in the FHLB to satisfy membership and borrowing requirements. The stock can only be sold to the FHLB or to another member institution, and all sales of FHLB stock must be at par. As a result of these restrictions, there is no active market for the FHLB stock. As of December 31, 2014 and 2013, FHLB stock totaled $2.6 million and $4.2 million, respectively. | |
FHLB stock is held as a long-term investment and its value is determined based on the ultimate recoverability of the par value. The Company evaluates impairment quarterly. The decision of whether impairment exists is a matter of judgment that reflects management’s view of the FHLB’s long-term performance, which includes factors such as the following: (1) its operating performance, (2) the severity and duration of declines in the fair value of its net assets related to its capital stock amount, (3) its liquidity position, and (4) the impact of legislative and regulatory changes on the FHLB. Based on the capital adequacy and the liquidity position of the FHLB, management believes that the par value of its investment in FHLB stock will be realized. Accordingly, there is no other-than-temporary impairment related to the carrying amount of the Company’s FHLB stock as of December 31, 2014. | |
Loans Held for Sale | |
At December 31, 2014, the Company did not have any loans classified as loans held for sale (“LHFS”). Generally, loans are transferred from loans held for investment (“LHFI”) to LHFS at fair market value using expected net sales proceeds or collateral values when there is an intent to sell. Gains or losses on the sale of LHFS are recorded in non-interest income. Generally any subsequent credit losses on LHFS are recorded as a component of non-interest expense. At December 31, 2013, LHFS were comprised of three loans totaling $1.4 million. | |
Loans and Leases | |
The Company originates commercial and real estate loans, including construction and land development loans primarily in the greater Philadelphia metropolitan area as well as selected locations throughout the mid-Atlantic region. The Company also has participated with other financial institutions in selected construction and land development loans outside our geographic area. Loans and leases are classified as LHFI when management has the intent and ability to hold the loan or lease for the foreseeable future or until maturity or payoff. LHFI are stated at their outstanding unpaid principal balances, net of an allowance for loan and leases losses and any deferred fees or costs. The Company utilizes the effective yield interest method for recognizing interest income as required by ASC Subtopic 20, “Nonrefundable Fees and Other Costs” (“ASC Subtopic 20”) under FASB ASC Topic 310, “Receivables” (“ASC Topic 310”). ASC Subtopic 20 also guides our accounting for nonrefundable fees and costs associated with lending activities such as discounts, premiums, and loan origination fees. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the yield (interest income) of the related loans. The Company is generally amortizing these amounts over the contractual life of the loan. For loan modifications, any unamortized net fees or costs and any prepayment penalties from the original loan shall be recognized in interest income when the new loan is granted. | |
The Company has a concentration of credit risk in commercial real estate and construction and land development loans at December 31, 2014. The Company originates mainly small business, commercial real estate, middle market business and consumer loans. Additionally, after thorough due diligence, the Company has purchased small residential loan pools. A substantial portion of its debtors’ ability to honor their contracts is dependent upon the housing sector specifically and the economy in general. | |
The loans receivable portfolio is segmented into commercial loans, construction and development loans, residential loans, leases, tax certificates, and consumer loans. The commercial loan segment consists of the following classes: commercial real estate loans, multi-family real estate loans, and other commercial loans, which are also generally known as commercial and industrial loans or commercial business loans. The construction and development loan segment consists of the following classes: residential construction and commercial construction loans. Residential construction loans are made for the acquisition of and/or construction on a lot or lots on which a residential dwelling is to be built. Commercial construction loans are made for the purpose of acquiring, developing and/or constructing a commercial structure. The residential loan segment consists of the following classes: one- to four-family first lien residential mortgage loans, home equity lines of credit, and home equity loans. The Company classifies its leases as finance leases, in accordance with FASB ASC Topic 840, “Leases”. The difference between the Company’s gross investment in the lease and the cost or carrying amount of the leased property, if different, is recorded as unearned income, which is amortized to income over the lease term by the interest method. The tax certificate segment includes delinquent property tax certificates that have been acquired through public auctions in various jurisdictions. The tax certificates assume a lien position that is generally superior to any mortgage liens that are on the property and have certain foreclosure rights as defined by state law. The tax certificates are predominantly in New Jersey. The Company ceased acquiring new tax certificates in 2010. Consumer loans includes cash secured and unsecured loans and lines of credit. | |
For all classes of loans receivable, with the exception of tax certificates, the accrual of interest is discontinued on a loan when management believes that the borrower’s financial condition is such that collection of principal and interest is doubtful or when a loan becomes 90 days past due. When a loan is placed on non-accrual all unpaid interest is reversed from interest income. Interest payments received on impaired nonaccrual loans are normally applied against principal. Excess proceeds received over the principal amounts due on impaired non-accrual loans are recognized as income on a cash basis. The Company recognizes income under the accrual basis when the principal payments on the loans become current and the collateral on the loan is sufficient to cover the outstanding obligation to the Company. If these factors do not exist, the Company does not recognize income. Generally, loans are restored to accrual status when the loan is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months) and the ultimate collectibility of the total contractual principal and interest is no longer in doubt. The past due status of all classes of loans receivable is determined based on contractual due dates for loan payments. Tax certificates have no contractual maturity. Collection is dependent upon the tax payer’s redemption of the lien, which includes principal interest and fees. | |
A loan modification is deemed a troubled debt restructuring (“TDR”) when two conditions are met: 1) the borrower is experiencing financial difficulty and 2) a concession is made by the Company that would not otherwise be considered for a borrower with similar credit risk characteristics. All loans classified as TDRs are considered to be impaired. TDRs are returned to an accrual status when the loan is brought current, has performed in accordance with the contractual restructured terms for a reasonable period of time (generally six months) and the ultimate collectibility of the total contractual restructured principal and interest is no longer in doubt. The Company’s policy for TDRs is to recognize interest income on currently performing restructured loans under the accrual method. | |
The Company accounts for guarantees in accordance with FASB ASC Topic 460 “Guarantees” (“ASC Topic 460”). ASC Topic 460 requires a guarantor entity, at the inception of a guarantee covered by the measurement provisions of the interpretation, to record a liability for the fair value of the obligation undertaken in issuing the guarantee. The Company has financial and performance letters of credit. Financial letters of credit require the Company to make a payment if the customer’s condition deteriorates, as defined in agreements. Performance letters of credits require the Company to make payments if the customer fails to perform certain non-financial contractual obligations. | |
Allowance for Loan and Lease Losses | |
The Company’s loan and lease portfolio (the “credit portfolio”) is subject to varying degrees of credit risk. The allowance for loan and lease losses consists of the allowance for loan and lease losses (the “allowance”) and the reserve for unfunded lending commitments. The allowance represents management’s estimate of losses inherent in the loan and lease portfolio as of the statement of financial condition date and is recorded as a reduction to loans and leases. The reserve for unfunded lending commitments represents management’s estimate of losses inherent in the Company’s unfunded loan commitments and is recorded in other liabilities on the consolidated statement of financial condition. The allowance is increased by the provision for loan and lease losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance, and subsequent recoveries, if any, are credited to the allowance. All, or part, of the principal balance of loans receivable are charged off to the allowance as soon as it is determined that the repayment or collateral recovery of all, or part, of the principal balance is highly unlikely. The allowance represents an estimation made pursuant to FASB ASC Topic 450, “Contingencies” (“ASC Topic 450”) or FASB ASC Topic 310, “Receivables” (“ASC Topic 310”). The adequacy of the allowance is determined through evaluation of the credit portfolio, and involves consideration of a number of factors, as outlined below, to establish a prudent level. The Company considers that the determination of the allowance involves a higher degree of judgment and complexity than its other significant accounting policies. The Company’s systematic methodology for assessing the appropriateness of the allowance includes: (1) general reserves reflecting historical loss rates by loan type, (2) specific reserves for risk-rated credits based on probable losses on an individual or portfolio basis and (3) qualitative reserves based upon current economic conditions and other risk factors. | |
The loan portfolio is stratified into loan classifications that have similar risk characteristics. The general allowance is based upon historical loss rates using a three-year rolling average of the historical loss experienced within each loan segment. The qualitative factors used to adjust the historical loss experience address various risk characteristics of the Company’s loan and lease portfolio include evaluating: (1) trends in delinquencies and other non-performing loans, (2) changes in the risk profile related to large loans in the portfolio, (3) changes in the growth trends of categories of loans comprising the loan and lease portfolio, (4) concentrations of loans and leases to specific industry segments, (5) changes in economic conditions on both a local and national level, (6) quality of loan review and board oversight, (7) changes in lending policies and procedures, and (8) changes in lending staff. Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation. Adjustments to the factors are supported through documentation of changes in conditions in a report accompanying the allowance calculation. | |
The allowance calculation methodology includes further segregation of loan classes into risk rating categories. The borrower’s overall financial condition, repayment sources, guarantors and value of collateral, if appropriate, are evaluated annually for commercial and construction and development loans or when credit deficiencies arise, such as delinquent loan payments, for all loans. Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful and loss. Loans classified as special mention have potential weaknesses that deserve management’s close attention. If uncorrected, the potential weaknesses may result in deterioration of the repayment prospects. Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. They include loans that are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as doubtful have all the weaknesses inherent in loans classified substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as a loss are considered uncollectible and are charged to the allowance. Loans not classified as special mention, substandard, doubtful or loss are rated pass. | |
The specific reserves are determined utilizing standards required under ASC Topic 310. The Company identifies a loan as impaired when it is probable that interest and principal will not be collected according to the contractual terms of the loan agreement. Non-accrual loans and loans restructured under a TDR are evaluated for impairment on an individual basis considering all known relevant factors that may affect loan collectability such as the borrower’s overall financial condition, resources and payment record, support available from financial guarantors and the sufficiency of current collateral values (current appraisals or rent rolls for income producing properties), and risks inherent in different kinds of lending (such as source of repayment, quality of borrower and concentration of credit quality). Non-accrual loans that experience insignificant payment shortfalls generally are not classified as 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. | |
Impairment is measured on a loan by loan basis for commercial and industrial loans, commercial real estate loans and construction loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent. The estimated fair values of substantially all of the Company’s impaired loans are measured based on the estimated fair value of the loan’s collateral. The Company obtains third-party appraisals or real estate brokers’ opinions (“BPOs”) to establish the fair value of real estate collateral. Appraised values or BPOs are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value less estimated costs to sell the property. For commercial and industrial loans secured by non-real estate collateral, such as accounts receivable, inventory and equipment, estimated fair values are determined based on the borrower’s financial statements, inventory reports, accounts receivable aging or equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. A specific reserve is established for an impaired loan for the amount that the carrying value exceeds its estimated fair value. Once a loan is determined to be impaired it will be deducted from the portfolio balance and the net remaining balance of the portfolio will be used in the general and qualitative analysis. A specific reserve is established for an impaired loan for the amount that the carrying value exceeds its estimated fair value. | |
Based on management’s comprehensive analysis of the loan and lease portfolio, management believes the current level of the allowance is adequate at December 31, 2014. However, its determination requires significant judgment, and estimates of probable losses inherent in the credit portfolio can vary significantly from the amounts actually observed. While management uses the best information available to make allowance evaluations, adjustments to the allowance may be necessary based on changes in economic and other conditions or changes in accounting guidance. In addition, the FDIC, as an integral part of its examination processes, periodically reviews our allowance for loan and lease losses. The FDIC may require the recognition of adjustments to the allowance for loan and lease losses based on their judgment of information available to them at the time of their examinations. To the extent that actual outcomes differ from management’s estimates, additional provisions to the allowance for loan and lease losses may be required that would adversely impact earnings in future periods. | |
Other Real Estate Owned | |
Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less costs to sell at the date of foreclosure, establishing a new cost basis. Foreclosed real estate properties acquired through the tax certificate portfolio are transferred at the lower of cost or fair value principally due to uncertainty around the fair value of the foreclosed properties. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount recorded at acquisition date or fair value less costs to sell. Third-party appraisals or agreements of sale are utilized to determine fair value of the loan collateral while BPOs, agreements of sale, or in some cases, third-party appraisals are utilized to value properties from the tax certificate portfolio. Revenue and expenses from operations and changes in the valuation allowance are included in non-interest expenses. For fair value measurement, OREO is included in level 3 assets on a non-recurring basis. | |
Premises and Equipment | |
Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation, which is computed primarily using the modified accelerated cost recovery system (“MACRS”) over the estimated useful lives of the assets. Leasehold improvements are depreciated over the shorter of the estimated useful lives of the improvements or the terms of the related leases. Expected term includes lease options periods to the extent that the exercise of such options is reasonably assured. | |
Bank-Owned Life Insurance | |
Royal Bank has purchased life insurance policies on certain employees. These policies are reflected on the consolidated balance sheets at their cash surrender value, or the amount that can be realized. Income from these policies and changes in the cash surrender value are recorded in other income. | |
Advertising Costs | |
Advertising costs are expensed as incurred. The Company’s advertising costs were $357,000 and $209,000 for 2014 and 2013, respectively. | |
Benefit Plans | |
The Company has a noncontributory nonqualified, defined benefit pension plan covering certain eligible employees. The Plan provides retirement benefits under pension trust agreements. The benefits are based on years of service and the employee’s compensation during the highest three consecutive years during the last 10 years of employment. In accordance with ASC Topic 715, ”Compensation – Retirement Benefits” (“ASC Topic 715”), the Company recognizes the Plan’s over-funded or under-funded status as an asset or liability with an offsetting adjustment to AOCI. ASC Topic 715 requires the determination of the fair value of a plan’s assets at the company’s year-end and the recognition of actuarial gains and losses, prior service costs or credits, transition assets or obligations as a component of AOCI. These amounts were previously netted against the plan’s funded status in the Company’s consolidated Balance Sheet. These amounts will be subsequently recognized as components of net periodic benefit costs. Further, actuarial gains and losses that arise in subsequent periods that are not initially recognized as a component of net periodic benefit costs will be recognized as a component of AOCI. Those amounts will subsequently be recorded as component of net periodic benefit costs as they are amortized during future periods. Net pension expense consists of service costs and interest costs and are actually determined. The Company accrues pension costs as incurred. The Plan does not have assets and benefit payments are expected to be made from insurance policies owned by the Company. | |
The Company has a capital accumulation and salary reduction plan under Section 401(k) of the Internal Revenue Code of 1986, as amended. Under the plan, all employees are eligible to contribute up to the maximum allowed by Internal Revenue Service (“IRS”) regulation, with the Company matching 100% of any contribution between 1% and 5% subject to a $2,500 per employee annual limit. During 2014, the Company reinstated the 401(k) contribution and recorded a matching contribution expense of $147,000. For 2013, there was no matching contribution. | |
Stock Compensation | |
FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC Topic 718”) requires that the compensation cost relating to share-based payment transactions be recognized in consolidated financial statements. The costs are measured based on the fair value of the equity or liability instruments issued. ASC Topic 718 covers a wide range of share-based compensation arrangements including stock options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. The effect of ASC Topic 718 is to require entities to measure the cost of employee services received in exchange for stock options based on the grant-date fair value of the award, and to recognize the cost over the period the employee is required to provide services for the award. ASC Topic 718 permits entities to use any option-pricing model that meets the fair value objective in the Statement. The Company recorded compensation expense relating to stock options and restricted stock of $17,000 and $22,000 during 2014 and 2013, respectively. | |
At December 31, 2014, the Company had a director stock-based plan, an employee stock-based plan, and a long-term incentive compensation plan, which are more fully described in “Note 18 – Stock Compensation Plans” to the Consolidated Financial Statements. | |
Trust Preferred Securities | |
Royal Bancshares Capital Trust I/II (“Trusts”) issued mandatory redeemable preferred stock to investors and loaned the proceeds to the Company. The Trusts hold, as their sole asset, subordinated debentures issued by the Company in 2004. The Company does not consolidate the Trusts as ASC Topic 810 precludes consideration of the call option embedded in the preferred stock when determining if the Company has the right to a majority of the Trusts expected returns. The non-consolidation results in the investment in common stock of the Trusts to be included in other assets with a corresponding increase in outstanding debt of $774,000. In addition, the income accrued on the Company’s common stock investments is included in other income. Refer to “Note 10 – Borrowings and Subordinated Debentures” to the Consolidated Financial Statements for more information. | |
Derivatives and Hedging | |
In support of its asset liability management process, the Company will implement derivative hedging strategies with the intent of reducing interest rate risk and economic value of equity risk. The Company accounts for derivatives in accordance with FASB ASC Topic 815 “Derivatives and Hedging” (“ASC Topic 815”). The Company formally designates its derivatives as cash flow hedges and documents the strategy for entering into the transactions and the method of assessing ongoing effectiveness. Changes in the fair value of the derivative are recognized in other comprehensive income (loss) until the underlying forecasted transaction is recognized in earnings. The ineffective portion of a derivative’s change in fair value is recognized in earnings immediately. To determine fair value, the Company uses third party pricing models that incorporate assumptions about market conditions and risks that are current at the reporting date. The Company does not use derivative instruments for speculative purposes. | |
Derivative instruments qualify for hedge accounting treatment only if they are designated as such on the date on which the derivative contracted is entered and are expected to be, and are, effective in substantially reducing interest rate risk arising from the assets and liabilities identified as exposing the Company to risk. Those derivative financial instruments that do not meet the hedging criteria discussed below would be classified as undesignated derivatives and would be recorded at fair value with changes in fair value recorded in income. | |
Derivative hedge contracts must meet specific effectiveness tests (i.e., over time the change in their fair values due to the designated hedge risk must be within 80 to 125 percent of the opposite change in the fair values of the hedged assets or liabilities). Changes in fair value of the derivative financial instruments must be effective at offsetting changes in the fair value of the hedged items due to the designated hedge risk during the term of the hedge. | |
The Company formally assesses, both at the hedges’ inception, and on an on-going basis, whether derivatives used in hedging transactions have been highly effective in offsetting changes in cash flows of hedged items and whether those derivatives are expected to remain highly effective in subsequent periods. The Company discontinues hedge accounting when (a) it determines that a derivative is no longer effective in offsetting changes in cash flows of a hedged item; (b) the derivative expires or is sold, terminated or exercised; (c) probability exists that the forecasted transaction will no longer occur; or (d) management determines that designating the derivative as a hedging instrument is no longer appropriate. In all cases in which hedge accounting is discontinued and a derivative remains outstanding, the Company will carry the derivative at fair value in the consolidated financial statements, recognizing changes in fair value in current period income in the consolidated statement of income. Cash flows resulting from the derivative financial instruments that are accounted for as hedges of assets and liabilities are classified in the cash flow statement in the same category as the cash flows of the items being hedged. | |
Income Taxes | |
The Company accounts for income taxes in accordance with FASB ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes”, which includes guidance related to accounting for uncertainty in income taxes, which sets out a consistent framework to determine the appropriate level of tax reserves to maintain for uncertain tax positions. The Company had no material unrecognized tax benefits or accrued interest and penalties as of December 31, 2014 and 2013. The Company’s policy is to account for interest as a component of interest expense and penalties as a component of other expense. | |
The Company and its subsidiaries file a consolidated federal income tax return. Income taxes are allocated to the Company and its subsidiaries based on the contribution of their income or use of their loss in the consolidated return. Separate state income tax returns are filed by the Company and its subsidiaries. As of December 31, 2014, tax years 2011 through 2013 are subject to federal examination by the IRS and years 2010 through 2013 are subject to state examination by various state taxing authorities. Tax regulations are subject to interpretation of the related tax laws and regulations and require significant judgment to apply. | |
Federal and state income taxes have been provided on the basis of reported income or loss. The amounts reflected on the tax returns differ from these provisions due principally to temporary differences in the reporting of certain items for financial reporting and income tax reporting purposes. The tax effect of these temporary differences is accounted for as deferred taxes applicable to future periods. Deferred income tax expense or benefit is determined by recognizing deferred tax assets (“DTA”) and liabilities (“DTL”) for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. | |
In evaluating our ability to recover deferred tax assets, the Company considers all available positive and negative evidence, including past operating results and our forecast of future taxable income. In determining future taxable income, assumptions are made for the amount of taxable income, the reversal of temporary differences and the implementation of feasible and prudent tax planning strategies. While these estimates and judgments are inherently subjective, they are consistent with the plans and estimates management uses to manage the Company’s business. | |
The Company is required to establish a valuation allowance for deferred tax assets and record a charge to income or shareholders' equity if management determines, based on all available evidence at the time the determination is made, that it is more likely than not that some portion or all of the deferred tax assets will not be realized in future periods. At December 31, 2014, the DTA valuation allowance was $39.1 million compared to $37.2 million at December 31, 2013. In the future, the DTA valuation allowance may be reversed, depending on the Company’s financial position and results of operations in the future, among other factors, and, in such event, may be available to increase future net income. There can be no assurance, however, as to when the Company could be in a position to recapture the DTA valuation allowance. | |
The Company had no material unrecognized tax benefits (“UTB”) or accrued interest and penalties as of December 31, 2014. We do not expect the total amount of UTB to significantly increase in the next twelve months. We classify interest and penalties as an element of tax expense. We monitor changes in tax statutes and regulations to determine if significant changes will occur over the next 12 months. As of December 31, 2014 no significant changes to UTB are projected; however, tax audit examinations are possible. | |
Treasury Stock | |
Shares of common stock repurchased are recorded as treasury stock at cost. | |
Earnings (Losses) Per Share Information | |
Basic per share data excludes dilution and is computed by dividing income (loss) available to common shareholders by the weighted average common shares outstanding during the period. Diluted per share data takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock, using the treasury stock method. | |
The Class B shares of the Company may be converted to Class A shares at the rate of 1.15 to 1. | |
Comprehensive Income (Loss) | |
The Company reports comprehensive income (loss) in accordance with FASB ASC Topic 220, “Comprehensive Income” (“ASC Topic 220”), which requires the reporting of all changes in equity during the reporting period except investments from and distributions to shareholders. Net income (loss) is a component of comprehensive income (loss) with all other components referred to in the aggregate as other comprehensive income (loss). Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on available for sale investment securities, non-credit related losses on other-than-temporarily impaired investment securities, adjustment to net periodic pension cost, and adjustment to the value of swaps. | |
Fair Value of Financial Instruments | |
For information on the fair value of the Company’s financial instruments refer to “Note 21 - Fair Value of Financial Instruments” to the Consolidated Financial Statements. | |
Restrictions on Cash and Amounts Due From Banks | |
Royal Bank is required to maintain average balances on hand with the Federal Reserve Bank. At December 31, 2014 and 2013, these reserve balances amounted to $100,000. | |
2. Recent Accounting Pronouncements | |
In January 2014, FASB issued ASU No. 2014-04, Receivables (Topic 310): Troubled Debt Restructurings by Creditors (Subtopic 310-40) Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (“ASU 2014-04”). ASC Topic 310 includes guidance that states that a creditor should reclassify a collateralized mortgage loan such that the loan should be derecognized and the collateral asset recognized when it determines that there has been in substance a repossession or foreclosure by the creditor, that is, the creditor receives physical possession of the debtor’s assets regardless of whether formal foreclosure proceedings take place. However, the terms in substance a repossession or foreclosure and physical possession are not defined in the accounting literature and there is diversity about when a creditor should derecognize the loan receivable and recognize the real estate property. That diversity has been highlighted by recent extended foreclosure timelines and processes related to residential real estate properties. | |
The objectives in ASU 2014-04 are intended to reduce diversity in practice by clarifying when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan should be derecognized and the real estate property recognized. Holding foreclosed real estate property presents different operational and economic risk to creditors compared with holding an impaired loan. Therefore, consistency in the timing of loan derecognition and presentation of foreclosed real estate properties is of qualitative significance to users of the creditor’s financial statements. Additionally, the disclosure of the amount of foreclosed residential real estate properties and of the recorded investment in consumer mortgage loans secured by residential real estate properties that are in the process of foreclosure is expected to provide decision-useful information to many users of the creditor’s financial statements. The amendments in ASU 2014-04 are effective for public companies for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. An entity can elect to adopt the amendments in ASU 2014-04 using either a modified retrospective transition method or a prospective transition method. The adoption of ASU 2014-04 is not expected to have a significant impact on the Company’s consolidated financial statements. | |
In April 2014, FASB issued ASU No. 2014-08 Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). The amendments in ASU 2014-08 change the criteria for reporting discontinued operations for all public and nonpublic entities. Currently, a component of an entity that is a reportable segment, an operating segment, a reporting unit, a subsidiary, or an asset group is eligible for discontinued operations presentation. Once the amendments of ASU 2014-08 take effect, only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results will be reported as discontinued operations in the financial statements. The amendments also require new disclosures about discontinued operations and disposals of components of an entity that do not qualify for discontinued operations reporting. The amendments in ASU 2014-08 are effective for public companies for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. Early adoption is permitted but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance. The adoption of ASU 2014-08 is not expected to have a significant impact on the Company’s consolidated financial statements. | |
In May 2014, FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition. FASB and the International Financial Reporting Standards (“IFRS”) initiated a joint project to develop a common revenue standard for U.S. GAAP and IFRS. The core principle of the guidance in 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. The amendments in ASU 2014-09 are effective for public companies for annual periods, and interim periods within those annual periods, beginning after December 15, 2016. Early adoption is not permitted. The adoption of ASU 2014-09 is not expected to have a significant impact on the Company’s consolidated financial statements. | |
In June 2014, the FASB issued ASU No. 2014-12, Compensation – Stock Compensation (Topic 718) - Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (“ASU 2014-12”). The amendments in ASU 2014-12 require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation – Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. The amendments in ASU 2014-12 are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this ASU either: (a) prospectively to all awards granted or modified after the effective date; or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 is not expected to have a significant impact on the Company’s consolidated financial statements. | |
REGULATORY_MATTERS_AND_SIGNIFI
REGULATORY MATTERS AND SIGNIFICANT RISKS OR UNCERTAINTIES | 12 Months Ended |
Dec. 31, 2014 | |
Regulatory Matters and Significant Risks or Uncertainties [Abstract] | |
Regulatory Matters and Significant Risks or Uncertainties | Note 2.Regulatory Matters and Significant Risks or Uncertainties |
FDIC and Department of Banking Memorandum of Understanding | |
During the fourth quarter of 2011, Royal Bank entered into an informal agreement, known as a memorandum of understanding (“MOU”) with each of the Federal Deposit Insurance Corporation (“FDIC”) and the Pennsylvania Department of Banking and Securities (the “Department”). By letter dated February 3, 2015, the FDIC and the Department notified the Bank that, as a result of management meeting the requirements of the MOU, the MOU was terminated as of that date. | |
Federal Reserve Memorandum of Understanding | |
In March 2010, the Company agreed to enter into a written agreement (the “Federal Reserve Agreement”) with the Federal Reserve Bank of Philadelphia (the “Federal Reserve Bank”). In July 2013, the Board of Governors of the Federal Reserve System terminated the enforcement action under the Federal Reserve Agreement, and it was replaced with an informal non-public agreement, an MOU, with the Federal Reserve Bank, effective July 17, 2013. Included in this MOU are certain continued reporting requirements and a requirement that the Company receive the prior approval of the Federal Reserve Bank and the Director of Banking Supervision and Regulation of the Board of Governors of the Federal Reserve System prior to declaring or paying any dividends on the Company’s capital stock, making interest payments related to the Company’s outstanding trust preferred securities or subordinate securities, incurring or guaranteeing certain debt with an original maturity date greater than one year, and purchasing or redeeming any shares of stock. Please refer to “Dividend and Interest Restrictions” below for a discussion on the partial redemption of the Series A Preferred Stock. The MOU will remain in effect until stayed, modified, terminated or suspended in writing by the Federal Reserve Bank. | |
Dividend and Interest Restrictions | |
On August 13, 2009, the Company’s Board suspended the regular quarterly cash dividends on the 30,407 shares of Series A Preferred Stock and, accordingly, the Company is not permitted at this time to pay dividends on our Class A or Class B Common Stock. Additionally, under the terms of the Federal Reserve MOU, we are prohibited from redeeming the Series A Preferred Stock, which included participating in a TARP auction, or paying any dividends on shares of our stock without the prior written approval of the Reserve Bank and the Director of the Division of Banking Supervision and Regulation of the Board of Governors of the Federal Reserve System. | |
The Company received approval from the Federal Reserve Bank to bid up to $14.0 million, which was raised in a private placement, to purchase shares of the Series A Preferred Stock in an auction of such shares to be conducted by the United States Department of Treasury (“Treasury”). On June 20, 2014, Treasury announced that it had priced auctions of preferred stock of six institutions, including all of the 30,407 shares of the Series A Preferred Stock, issued by the Company to the Treasury in 2009. The Series A Preferred Stock was priced in the auction at $1,207.11 per share for all 30,407 shares of Series A Preferred Stock outstanding. As previously disclosed, the Company was a bidder in the auction and was allocated 11,551 shares of Series A Preferred Stock for repurchase at the clearing price of $1,207.11. Closing for the sale of the Series A Preferred Stock by Treasury, including the repurchase of 11,551 shares of Series A Preferred Stock by the Company, occurred on July 2, 2014. The dividend in arrears on the remaining 18,856 shares of Series A preferred stock is approximately $6.6 million. In the event the Company declared the preferred dividend in arrears the Company’s equity and capital ratios would be negatively affected; however, they would remain above the required minimum ratios. | |
Under the Federal Reserve MOU, the Company may not declare or pay any dividends on the Company’s capital stock or make interest payments related to the Company’s outstanding trust preferred securities or subordinate securities without the prior written approval of the Reserve Bank and the Director of the Division of Banking Supervision and Regulation of the Board of Governors of the Federal Reserve System. During the 2014, the Company received approval from the Federal Reserve Bank and paid all quarterly interest payments on the trust preferred securities. | |
INVESTMENT_SECURITIES
INVESTMENT SECURITIES | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||
Investment Securities [Abstract] | |||||||||||||||||||||||||||
Investment Securities | Note 3.Investment Securities | ||||||||||||||||||||||||||
The carrying value and fair value of investment securities available for sale (“AFS”) at December 31, 2014 and December 31, 2013 are as follows: | |||||||||||||||||||||||||||
As of December 31, 2014 | Included in OCI* | ||||||||||||||||||||||||||
Gross | Gross | ||||||||||||||||||||||||||
Amortized | unrealized | unrealized | |||||||||||||||||||||||||
(In thousands) | cost | gains | losses | Fair value | |||||||||||||||||||||||
U.S. government agencies | $ | 26,123 | $ | — | $ | -834 | $ | 25,289 | |||||||||||||||||||
Mortgage-backed securities-residential | 22,073 | 375 | -61 | 22,387 | |||||||||||||||||||||||
Collateralized mortgage obligations: | |||||||||||||||||||||||||||
Issued or guaranteed by U.S. government agencies | 167,711 | 2,350 | -1,084 | 168,977 | |||||||||||||||||||||||
Non-agency | 3,738 | 7 | -14 | 3,731 | |||||||||||||||||||||||
Corporate bonds | 15,617 | 144 | -34 | 15,727 | |||||||||||||||||||||||
Municipal bonds | 10,117 | 91 | -35 | 10,173 | |||||||||||||||||||||||
Other securities | 2,684 | 1,350 | — | 4,034 | |||||||||||||||||||||||
Common stocks | 33 | 17 | — | 50 | |||||||||||||||||||||||
Total available for sale | $ | 248,096 | $ | 4,334 | $ | -2,062 | $ | 250,368 | |||||||||||||||||||
As of December 31, 2013 | Included in OCL* | ||||||||||||||||||||||||||
Gross | Gross | ||||||||||||||||||||||||||
Amortized | unrealized | unrealized | |||||||||||||||||||||||||
(In thousands) | cost | gains | losses | Fair value | |||||||||||||||||||||||
U.S. government agencies | $ | 68,207 | $ | — | $ | -6,171 | $ | 62,036 | |||||||||||||||||||
Mortgage-backed securities-residential | 32,769 | 210 | -882 | 32,097 | |||||||||||||||||||||||
Collateralized mortgage obligations: | |||||||||||||||||||||||||||
Issued or guaranteed by U.S. government agencies | 188,194 | 2,887 | -1,978 | 189,103 | |||||||||||||||||||||||
Non-agency | 4,454 | 25 | — | 4,479 | |||||||||||||||||||||||
Corporate bonds | 9,669 | 25 | -256 | 9,438 | |||||||||||||||||||||||
Municipal bonds | 7,163 | — | -263 | 6,900 | |||||||||||||||||||||||
Other securities | 3,363 | 1,405 | -143 | 4,625 | |||||||||||||||||||||||
Common stocks | 33 | 16 | — | 49 | |||||||||||||||||||||||
Total available for sale | $ | 313,852 | $ | 4,568 | $ | -9,693 | $ | 308,727 | |||||||||||||||||||
* OCI: Other comprehensive income; OCL: Other comprehensive loss | |||||||||||||||||||||||||||
The amortized cost and fair value of investment securities at December 31, 2014, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. | |||||||||||||||||||||||||||
As of December 31, 2014 | |||||||||||||||||||||||||||
Amortized | |||||||||||||||||||||||||||
(In thousands) | cost | Fair value | |||||||||||||||||||||||||
Within 1 year | $ | — | $ | — | |||||||||||||||||||||||
After 1 but within 5 years | 17,429 | 17,329 | |||||||||||||||||||||||||
After 5 but within 10 years | 25,316 | 25,054 | |||||||||||||||||||||||||
After 10 years | 9,112 | 8,806 | |||||||||||||||||||||||||
Mortgage-backed securities-residential | 22,073 | 22,387 | |||||||||||||||||||||||||
Collateralized mortgage obligations: | |||||||||||||||||||||||||||
Issued or guaranteed by U.S. government agencies | 167,711 | 168,977 | |||||||||||||||||||||||||
Non-agency | 3,738 | 3,731 | |||||||||||||||||||||||||
Total available for sale debt securities | 245,379 | 246,284 | |||||||||||||||||||||||||
No contractual maturity | 2,717 | 4,084 | |||||||||||||||||||||||||
Total available for sale securities | $ | 248,096 | $ | 250,368 | |||||||||||||||||||||||
Proceeds from the sales of AFS investments during the year ended December 31, 2014 and 2013 were $72.3 and $31.0 million, respectively. The following table summarizes gross realized gains and losses on the sale of securities recognized in earnings in the periods indicated: | |||||||||||||||||||||||||||
For the year ended | |||||||||||||||||||||||||||
ended December 31, | |||||||||||||||||||||||||||
(In thousands) | 2014 | 2013 | |||||||||||||||||||||||||
Gross realized gains | $ | 1,327 | $ | 416 | |||||||||||||||||||||||
Gross realized losses | -950 | -258 | |||||||||||||||||||||||||
Net realized gains (losses) | $ | 377 | $ | 158 | |||||||||||||||||||||||
The Company recorded $41,000 in OTTI charges in 2014 related to one private equity investment. The Company did not record OTTI charges to earnings during 2013. There was no credit-related impairment losses on debt securities held at December 31, 2014 or December 31, 2013 for which a portion of OTTI was recognized in other comprehensive income. As of December 31, 2014, investment securities with a market value of $104.0 million were pledged as collateral for borrowings. | |||||||||||||||||||||||||||
The tables below indicate the length of time individual AFS securities have been in a continuous unrealized loss position at December 31, 2014 and December 31, 2013: | |||||||||||||||||||||||||||
31-Dec-14 | Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||||
Gross | Number | Gross | Number | Gross | Number | ||||||||||||||||||||||
unrealized | of | unrealized | of | unrealized | of | ||||||||||||||||||||||
(In thousands) | Fair value | losses | positions | Fair value | losses | positions | Fair value | losses | positions | ||||||||||||||||||
U.S. government agencies | $ | — | $ | — | — | $ | 25,289 | $ | -834 | 8 | $ | 25,289 | $ | -834 | 8 | ||||||||||||
Mortgage-backed securities-residential | — | — | — | 8,913 | -61 | 3 | 8,913 | -61 | 3 | ||||||||||||||||||
Collateralized mortgage obligations: | |||||||||||||||||||||||||||
Issued or guaranteed by U.S. government agencies | 36,757 | -204 | 12 | 38,798 | -880 | 12 | 75,555 | -1,084 | 24 | ||||||||||||||||||
Non-agency | 1,432 | -14 | 1 | — | — | — | 1,432 | -14 | 1 | ||||||||||||||||||
Corporate bonds | 8,054 | -25 | 5 | 991 | -9 | 1 | 9,045 | -34 | 6 | ||||||||||||||||||
Municipal bonds | 1,639 | -7 | 2 | 3,079 | -28 | 4 | 4,718 | -35 | 6 | ||||||||||||||||||
Total available for sale | $ | 47,882 | $ | -250 | 20 | $ | 77,070 | $ | -1,812 | 28 | $ | 124,952 | $ | -2,062 | 48 | ||||||||||||
31-Dec-13 | Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||||
Gross | Number | Gross | Number | Gross | Number | ||||||||||||||||||||||
unrealized | of | unrealized | of | unrealized | of | ||||||||||||||||||||||
(In thousands) | Fair value | losses | positions | Fair value | losses | positions | Fair value | losses | positions | ||||||||||||||||||
U.S. government agencies | $ | 48,919 | $ | -5,035 | 16 | $ | 12,267 | $ | -1,136 | 5 | $ | 61,186 | $ | -6,171 | 21 | ||||||||||||
Mortgage-backed securities-residential | 18,045 | -518 | 7 | 6,276 | -364 | 2 | 24,321 | -882 | 9 | ||||||||||||||||||
Collateralized mortgage obligations: | |||||||||||||||||||||||||||
Issued or guaranteed by U.S. government agencies | 67,240 | -1,446 | 21 | 9,974 | -532 | 3 | 77,214 | -1,978 | 24 | ||||||||||||||||||
Corporate bonds | 4,848 | -221 | 5 | 965 | -35 | 1 | 5,813 | -256 | 6 | ||||||||||||||||||
Municipal bonds | 3,019 | -102 | 5 | 3,881 | -161 | 4 | 6,900 | -263 | 9 | ||||||||||||||||||
Other securities | — | — | — | 301 | -143 | 2 | 301 | -143 | 2 | ||||||||||||||||||
Total available for sale | $ | 142,071 | $ | -7,322 | 54 | $ | 33,664 | $ | -2,371 | 17 | $ | 175,735 | $ | -9,693 | 71 | ||||||||||||
At December 31, 2014 investment securities were $250.4 million with a net unrealized gain of $2.3 million compared to $308.7 million with a net unrealized loss of $5.1 million at December 31, 2013. | |||||||||||||||||||||||||||
Common stocks: As of December 31, 2014, the Company had two common stocks of financial institutions with a total fair value of $50,000 and an unrealized gain of $17,000. | |||||||||||||||||||||||||||
For all debt security types discussed below the fair value is based on prices provided by brokers and safekeeping custodians. | |||||||||||||||||||||||||||
U.S. government-sponsored agencies (“U.S. Agency”): As of December 31, 2014, the Company had 8 U.S. Agency securities with a fair value of $25.3 million and gross unrealized losses of $834,000. All 8 bonds had been in an unrealized loss position for twelve months or longer at December 31, 2014. Management believes that the unrealized losses on these debt securities are a function of changes in investment spreads. Management expects to recover the entire amortized cost basis of these securities. The Company does not intend to sell these securities before recovery of their cost basis and has not determined that it is not more likely than not that it will be required to sell these securities before recovery of their cost basis. Therefore, management has determined that these securities are not other-than-temporarily impaired at December 31, 2014. | |||||||||||||||||||||||||||
Mortgage-backed securities issued by U.S. government agencies and U.S. government sponsored enterprises: As of December 31, 2014, the Company had three mortgage-backed securities with a fair value of $8.9 million and gross unrealized losses of $61,000. The three mortgage-backed securities had been in an unrealized loss position for twelve months or longer. The unrealized loss is attributable to a combination of factors, including relative changes in interest rates since the time of purchase. The contractual cash flows for these securities are guaranteed by U.S. government agencies and U.S. government-sponsored enterprises. Based on its assessment of these factors, management believes that the unrealized losses on these debt securities are a function of changes in investment spreads and interest rate movements and not as a result of changes in credit quality. Management expects to recover the entire amortized cost basis of these securities. The Company does not intend to sell these securities before recovery of their cost basis and has not determined that it is not more likely than not that it will be required to sell these securities before recovery of their cost basis. Therefore, management has determined that these securities are not other-than-temporarily impaired at December 31, 2014. | |||||||||||||||||||||||||||
U.S. government issued or sponsored collateralized mortgage obligations (“Agency CMOs”): As of December 31, 2014, the Company had 24 Agency CMOs with a fair value of $75.6 million and gross unrealized losses of $1.1 million. Twelve of the Agency CMOs had been in an unrealized loss position for twelve months or longer and the other 12 Agency CMOs have been in an unrealized loss position for less than twelve months. The unrealized loss is attributable to a combination of factors, including relative changes in interest rates since the time of purchase. The contractual cash flows for these securities are guaranteed by U.S. government agencies and U.S. government-sponsored enterprises. Based on its assessment of these factors, management believes that the unrealized losses on these debt securities are a function of changes in investment spreads and interest rate movements and not as a result of changes in credit quality. Management expects to recover the entire amortized cost basis of these securities. The Company does not intend to sell these securities before recovery of their cost basis and has not determined that it is not more likely than not that it will be required to sell these securities before recovery of their cost basis. Therefore, management has determined that these securities are not other-than-temporarily impaired at December 31, 2014. | |||||||||||||||||||||||||||
Non-agency collateralized mortgage obligations (“Non-agency CMOs”): As of December 31, 2014, the Company had one non-agency CMO with a fair value of $1.4 million and a gross unrealized loss of $14,000. The bond has been in an unrealized loss position for less than twelve months. The Company does not intend to sell this security before recovery of its cost basis, and it is not more likely than not that the Company be required to sell this security before recovery of its cost basis. Therefore, management has determined that this security is not other-than-temporarily impaired at December 31, 2014. | |||||||||||||||||||||||||||
Corporate bonds: As of December 31, 2014, the Company had six corporate bonds with a fair value of $9.0 million and gross unrealized losses of $34,000. One of the corporate bonds had been in an unrealized loss position for twelve months or longer and five bonds had been in an unrealized loss position for less than twelve months. These bonds were investment grade. The Company’s unrealized losses in investments in these corporate bonds represent interest rate risk and not credit risk of the underlying issuers. As previously mentioned management also considered (1) the length of time and the extent to which the fair value is less than the amortized cost, (2) the Company’s intent to hold or sell the security, (3) the financial condition and results of the issuer including changes in capital, (4) the credit rating of the issuer, (5) analysts’ earnings estimates, (6) industry trends specific to the security, and (7) timing of debt maturity and status of debt payments. Based on the analysis, there was no credit-related loss on the bonds. Because the Company does not intend to sell the corporate bonds and it is not more likely than not that the Company will be required to sell the bonds before recovery of their amortized cost basis, which may be maturity, the Company does not consider any of the six bonds to be other-than-temporarily impaired at December 31, 2014. | |||||||||||||||||||||||||||
Municipal bonds: As of December 31, 2014, the Company had six municipal bonds with a fair value $4.7 million and gross unrealized losses of $35,000. Two of the municipal bonds had been in an unrealized loss position for less than twelve months and four municipal bonds had been in an unrealized loss position for twelve months or longer. Because the Company does not intend to sell the bonds and it is not more likely than not that the Company will be required to sell the bond before recovery of its amortized cost basis, which may be maturity, the Company does not consider the bonds to be other-than-temporarily impaired at December 31, 2014. | |||||||||||||||||||||||||||
Other securities: As of December 31, 2014, the Company had six investments in private equity funds which were predominantly invested in real estate. In determining whether or not OTTI exists, the Company reviews the funds’ financials, asset values, and near-term projections. During 2014, an OTTI charge of $41,000 was recorded on one private equity investment. Management concluded that the impairment on this investment was other-than-temporary. | |||||||||||||||||||||||||||
The Company will continue to monitor these investments to determine if the discounted cash flow analysis, continued negative trends, market valuations or credit defaults result in impairment that is other than temporary. | |||||||||||||||||||||||||||
LOANS_AND_LEASES
LOANS AND LEASES | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Loans and Leases [Abstract] | |||||||||||||||||||||||||
Loans and Leases | Note 4.Loans and Leases | ||||||||||||||||||||||||
At December 31, 2014 and December 31, 2013, the Company’s LHFS were $0 and $1.4 million, respectively. LHFS at December 31, 2013 were comprised of three loans. The three loans that constituted the balance at December 31, 2013 were sold during the first quarter of 2014. During 2014, the Company transferred $3.2 million to LHFS from LHFI at fair value using expected net sales proceeds. For the year ended December 31, 2014, the Company received net proceeds of $3.8 million and recorded net gains of $232,000 as a result of loan sales. | |||||||||||||||||||||||||
Major classifications of LHFI are as follows: | |||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||
(In thousands) | 2014 | 2013 | |||||||||||||||||||||||
Commercial real estate | $ | 175,038 | $ | 148,293 | |||||||||||||||||||||
Construction and land development | 45,662 | 45,261 | |||||||||||||||||||||||
Commercial and industrial | 76,489 | 79,589 | |||||||||||||||||||||||
Multi-family | 13,823 | 11,737 | |||||||||||||||||||||||
Residential real estate | 42,992 | 25,535 | |||||||||||||||||||||||
Leases | 51,583 | 42,524 | |||||||||||||||||||||||
Tax certificates | 7,191 | 12,716 | |||||||||||||||||||||||
Consumer | 2,354 | 826 | |||||||||||||||||||||||
Total LHFI, net of unearned income | $ | 415,132 | $ | 366,481 | |||||||||||||||||||||
The Company uses a nine point grading risk classification system commonly used in the financial services industry as the credit quality indicator. The first four classifications are rated Pass. The riskier classifications include Pass-Watch, Special Mention, Substandard, Doubtful and Loss. The risk rating is related to the underlying credit quality and probability of default. These risk ratings are used in the calculation of the allowance for loan and lease losses. | |||||||||||||||||||||||||
· | Pass: includes credits that demonstrate a low probability of default; | ||||||||||||||||||||||||
· | Pass-watch: a warning classification which includes credits that are beginning to demonstrate above average risk through declining earnings, strained cash flows, increased leverage and/or weakening market fundamentals; | ||||||||||||||||||||||||
· | Special mention: includes credits that have potential weaknesses that if left uncorrected could weaken the credit or result in inadequate protection of the Company’s position at some future date. While potentially weak, credits in this classification are marginally acceptable and loss of principal or interest is not anticipated; | ||||||||||||||||||||||||
· | Substandard accrual: includes credits that exhibit a well-defined weakness which currently jeopardizes the repayment of debt and liquidation of collateral even though they are currently performing. These credits are characterized by the distinct possibility that the Company may incur a loss in the future if these weaknesses are not corrected; | ||||||||||||||||||||||||
· | Non-accrual (substandard non-accrual, doubtful, loss): includes credits that demonstrate serious problems to the point that it is probable that interest and principal will not be collected according to the contractual terms of the loan agreement. | ||||||||||||||||||||||||
All loans, at the time of presentation to the appropriate loan committee, are given an initial loan risk rating by the Chief Credit Officer (“CCO”). From time to time, and at the general direction of any of the various loan committees, the ratings may be changed based on the findings of that committee. Items considered in assigning ratings include the financial strength of the borrower and/or guarantors, the type of collateral, the collateral lien position, the type of loan and loan structure, any potential risk inherent in the specific loan type, higher than normal monitoring of the loan or any other factor deemed appropriate by any of the various committees for changing the rating of the loan. Any such change in rating is reflected in the minutes of that committee. | |||||||||||||||||||||||||
The following tables present risk ratings for each loan portfolio classification at December 31, 2014 and December 31, 2013, excluding LHFS. | |||||||||||||||||||||||||
As of December 31, 2014 | |||||||||||||||||||||||||
(In thousands) | Pass | Pass-Watch | Special Mention | Substandard | Non-accrual | Total | |||||||||||||||||||
Commercial real estate | $ | 140,045 | $ | 27,229 | $ | 2,512 | $ | 1,568 | $ | 3,684 | $ | 175,038 | |||||||||||||
Construction and land development | 12,861 | 32,165 | — | — | 636 | 45,662 | |||||||||||||||||||
Commercial and industrial | 60,500 | 8,527 | 1,608 | 3,337 | 2,517 | 76,489 | |||||||||||||||||||
Multi-family | 12,995 | 310 | 518 | — | — | 13,823 | |||||||||||||||||||
Residential real estate | 42,033 | — | — | — | 959 | 42,992 | |||||||||||||||||||
Leases | 51,113 | 152 | 1 | — | 317 | 51,583 | |||||||||||||||||||
Tax certificates | 5,491 | — | — | — | 1,700 | 7,191 | |||||||||||||||||||
Consumer | 2,194 | 160 | — | — | — | 2,354 | |||||||||||||||||||
Total LHFI, net of unearned income | $ | 327,232 | $ | 68,543 | $ | 4,639 | $ | 4,905 | $ | 9,813 | $ | 415,132 | |||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||||
(In thousands) | Pass | Pass-Watch | Special Mention | Substandard | Non-accrual | Total | |||||||||||||||||||
Commercial real estate | $ | 99,525 | $ | 32,267 | $ | 11,572 | $ | 2,604 | $ | 2,325 | $ | 148,293 | |||||||||||||
Construction and land development | 14,677 | 16,270 | 11,095 | 569 | 2,650 | 45,261 | |||||||||||||||||||
Commercial and industrial | 50,478 | 10,508 | 5,735 | 9,239 | 3,629 | 79,589 | |||||||||||||||||||
Multi-family | 10,792 | 410 | 535 | — | — | 11,737 | |||||||||||||||||||
Residential real estate | 24,903 | — | — | — | 632 | 25,535 | |||||||||||||||||||
Leases | 41,325 | 485 | 247 | — | 467 | 42,524 | |||||||||||||||||||
Tax certificates | 12,262 | — | — | — | 454 | 12,716 | |||||||||||||||||||
Consumer | 750 | 76 | — | — | — | 826 | |||||||||||||||||||
Total LHFI, net of unearned income | $ | 254,712 | $ | 60,016 | $ | 29,184 | $ | 12,412 | $ | 10,157 | $ | 366,481 | |||||||||||||
The following tables present an aging analysis of past due payments for each loan portfolio classification at December 31, 2014 and December 31, 2013, excluding LHFS. | |||||||||||||||||||||||||
As of December 31, 2014 | 30-59 Days | 60-89 Days | Accruing | ||||||||||||||||||||||
(In thousands) | Past Due | Past Due | 90+ Days | Non-accrual | Current | Total | |||||||||||||||||||
Commercial real estate | $ | 311 | $ | 533 | $ | — | $ | 3,684 | $ | 170,510 | $ | 175,038 | |||||||||||||
Construction and land development | — | — | — | 636 | 45,026 | 45,662 | |||||||||||||||||||
Commercial and industrial | 92 | 449 | — | 2,517 | 73,431 | 76,489 | |||||||||||||||||||
Multi-family | — | — | — | — | 13,823 | 13,823 | |||||||||||||||||||
Residential real estate | 165 | 162 | — | 959 | 41,706 | 42,992 | |||||||||||||||||||
Leases | 152 | 1 | — | 317 | 51,113 | 51,583 | |||||||||||||||||||
Tax certificates | — | — | — | 1,700 | 5,491 | 7,191 | |||||||||||||||||||
Consumer | — | — | — | — | 2,354 | 2,354 | |||||||||||||||||||
Total LHFI, net of unearned income | $ | 720 | $ | 1,145 | $ | — | $ | 9,813 | $ | 403,454 | $ | 415,132 | |||||||||||||
As of December 31, 2013 | 30-59 Days | 60-89 Days | Accruing | ||||||||||||||||||||||
(In thousands) | Past Due | Past Due | 90+ Days | Non-accrual | Current | Total | |||||||||||||||||||
Commercial real estate | $ | 996 | $ | — | $ | — | $ | 2,325 | $ | 144,972 | $ | 148,293 | |||||||||||||
Construction and land development | — | — | — | 2,650 | 42,611 | 45,261 | |||||||||||||||||||
Commercial and industrial | 115 | 49 | — | 3,629 | 75,796 | 79,589 | |||||||||||||||||||
Multi-family | — | — | — | — | 11,737 | 11,737 | |||||||||||||||||||
Residential real estate | 458 | 262 | — | 632 | 24,183 | 25,535 | |||||||||||||||||||
Leases | 485 | 247 | — | 467 | 41,325 | 42,524 | |||||||||||||||||||
Tax certificates | — | — | — | 454 | 12,262 | 12,716 | |||||||||||||||||||
Consumer | — | — | — | — | 826 | 826 | |||||||||||||||||||
Total LHFI, net of unearned income | $ | 2,054 | $ | 558 | $ | — | $ | 10,157 | $ | 353,712 | $ | 366,481 | |||||||||||||
The Company has originated loans to the officers and directors of the Company and to their associates. In accordance with Regulation O, related party loans are made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and do not involve more than normal risk of collectability. The aggregate dollar amount of these loans and commitments was $0 and $234,000 at December 31, 2014 and 2013. During 2014, there were no new related party loans. Total payments received on related party loans in 2014 were $100,000. Additionally, a $134,000 loan is no longer reported under Regulation O guidelines. | |||||||||||||||||||||||||
Total non-accrual LHFI at December 31, 2014 were $9.8 million compared to $10.2 million at December 31, 2013. If interest had accrued on these loans, such income would have been approximately $1.0 million and $1.7 million for the years ended December 31, 2014 and 2013, respectively. At December 31, 2014, the Company had no loans past due 90 days or more on which interest continues to accrue. | |||||||||||||||||||||||||
Impaired Loans | |||||||||||||||||||||||||
Total cash collected on impaired loans during the year ended December 31, 2014 and 2013 was $7.0 million and $16.1 million respectively, of which $6.4 million and $15.3 million was credited to the principal balance outstanding on such loans, respectively. | |||||||||||||||||||||||||
For the years ended | |||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||
(In thousands) | 2014 | 2013 | |||||||||||||||||||||||
Average investment in impaired loans and leases (1) | $ | 17,077 | $ | 24,714 | |||||||||||||||||||||
Interest income recognized on impaired loans and leases | $ | 377 | $ | 559 | |||||||||||||||||||||
Interest income recognized on a cash basis on impaired loans and leases | $ | 377 | $ | 27 | |||||||||||||||||||||
-1 | Includes LHFI and LHFS | ||||||||||||||||||||||||
Troubled Debt Restructurings | |||||||||||||||||||||||||
The following table details the Company’s TDRs that are on an accrual status and non-accrual status at December 31, 2014 and December 31, 2013. | |||||||||||||||||||||||||
As of December 31, 2014 | |||||||||||||||||||||||||
Non- | |||||||||||||||||||||||||
Number of | Accrual | Accrual | |||||||||||||||||||||||
(In thousands) | loans | Status | Status | Total TDRs | |||||||||||||||||||||
Commercial real estate | 2 | $ | 2,856 | $ | — | $ | 2,856 | ||||||||||||||||||
Construction and land development | 3 | 47 | 636 | 683 | |||||||||||||||||||||
Commercial and industrial | 6 | 3,670 | 1,448 | 5,118 | |||||||||||||||||||||
Residential real estate | 1 | — | 102 | 102 | |||||||||||||||||||||
Total | 12 | $ | 6,573 | $ | 2,186 | $ | 8,759 | ||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||||
Non- | |||||||||||||||||||||||||
Number of | Accrual | Accrual | |||||||||||||||||||||||
(In thousands) | loans | Status | Status | Total TDRs | |||||||||||||||||||||
Commercial real estate | 3 | $ | 3,847 | $ | — | $ | 3,847 | ||||||||||||||||||
Construction and land development | 4 | 1,257 | 479 | 1,736 | |||||||||||||||||||||
Commercial and industrial | 3 | 4,420 | 1,960 | 6,380 | |||||||||||||||||||||
Residential real estate | 2 | — | 121 | 121 | |||||||||||||||||||||
Total | 12 | $ | 9,524 | $ | 2,560 | $ | 12,084 | ||||||||||||||||||
At December 31, 2014, all of the TDRs were in compliance with their restructured terms. | |||||||||||||||||||||||||
The following tables present newly restructured loans that occurred during the years ended December 31, 2014 and 2013. | |||||||||||||||||||||||||
Modifications by type for the year ended December 31, 2014 | |||||||||||||||||||||||||
Pre- | Post- | ||||||||||||||||||||||||
Modification | Modification | ||||||||||||||||||||||||
Outstanding | Outstanding | ||||||||||||||||||||||||
Number of | Combination | Recorded | Recorded | ||||||||||||||||||||||
(Dollars in thousands) | loans | Rate | Term | Payment | of types | Total | Investment | Investment | |||||||||||||||||
Commercial and industrial | 3 | $ | — | $ | 232 | $ | — | $ | 27 | $ | 259 | $ | 261 | $ | 261 | ||||||||||
Total | 3 | $ | — | $ | 232 | $ | — | $ | 27 | $ | 259 | $ | 261 | $ | 261 | ||||||||||
Modifications by type for the year ended December 31, 2013 | |||||||||||||||||||||||||
Pre- | Post- | ||||||||||||||||||||||||
Modification | Modification | ||||||||||||||||||||||||
Outstanding | Outstanding | ||||||||||||||||||||||||
Number of | Combination | Recorded | Recorded | ||||||||||||||||||||||
(Dollars in thousands) | loans | Rate | Term | Payment | of types | Total | Investment | Investment | |||||||||||||||||
Commercial real estate | 2 | $ | — | $ | — | $ | — | $ | 3,705 | $ | 3,705 | $ | 3,761 | $ | 3,761 | ||||||||||
Commercial and industrial | 1 | — | — | — | 82 | 82 | 87 | 87 | |||||||||||||||||
Total | 3 | $ | — | $ | — | $ | — | $ | 3,787 | $ | 3,787 | $ | 3,848 | $ | 3,848 | ||||||||||
ALLOWANCE_FOR_LOAN_AND_LEASE_L
ALLOWANCE FOR LOAN AND LEASE LOSSES | 12 Months Ended | |||||||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||||||
Allowance for Loan and Lease Losses [Abstract] | ||||||||||||||||||||||||||||||||
Allowance for Loan and Lease Losses | Note 5.Allowance for Loan and Lease Losses | |||||||||||||||||||||||||||||||
The following tables present the detail of the allowance and the loan portfolio disaggregated by loan portfolio classification as of December 31, 2014 and December 31, 2013. | ||||||||||||||||||||||||||||||||
Allowance for Loan and Lease Losses and Loans Held for Investment | ||||||||||||||||||||||||||||||||
For the year ended December 31, 2014 | ||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||
Commercial | and land | Commercial | Multi- | Residential | Tax | |||||||||||||||||||||||||||
(In thousands) | real estate | development | and industrial | family | real estate | Leases | certificates | Consumer | Unallocated | Total | ||||||||||||||||||||||
Beginning balance | $ | 5,498 | $ | 2,316 | $ | 3,006 | $ | 402 | $ | 473 | $ | 1,223 | $ | 555 | $ | 15 | $ | 183 | $ | 13,671 | ||||||||||||
Charge-offs | -354 | -172 | -452 | — | — | -793 | -350 | — | — | -2,121 | ||||||||||||||||||||||
Recoveries | — | 940 | 27 | — | 15 | 42 | 1 | — | — | 1,025 | ||||||||||||||||||||||
(Credit) provision | -692 | -792 | -801 | -117 | 128 | 957 | 461 | 23 | -34 | -867 | ||||||||||||||||||||||
Ending balance | $ | 4,452 | $ | 2,292 | $ | 1,780 | $ | 285 | $ | 616 | $ | 1,429 | $ | 667 | $ | 38 | $ | 149 | $ | 11,708 | ||||||||||||
Ending balance: related to loans individually evaluated for impairment | $ | 200 | $ | — | $ | 301 | $ | — | $ | 28 | $ | 80 | $ | 432 | $ | — | $ | — | $ | 1,041 | ||||||||||||
Ending balance: related to loans collectively evaluated for impairment | $ | 4,252 | $ | 2,292 | $ | 1,479 | $ | 285 | $ | 588 | $ | 1,349 | $ | 235 | $ | 38 | $ | 149 | $ | 10,667 | ||||||||||||
LHFI | ||||||||||||||||||||||||||||||||
Ending balance | $ | 175,038 | $ | 45,662 | $ | 76,489 | $ | 13,823 | $ | 42,992 | $ | 51,583 | $ | 7,191 | $ | 2,354 | $ | — | $ | 415,132 | ||||||||||||
Ending balance: individually evaluated for impairment | $ | 6,795 | $ | 683 | $ | 5,846 | $ | — | $ | 959 | $ | 95 | $ | 1,700 | $ | — | $ | — | $ | 16,078 | ||||||||||||
Ending balance: collectively evaluated for impairment | $ | 168,243 | $ | 44,979 | $ | 70,643 | $ | 13,823 | $ | 42,033 | $ | 51,488 | $ | 5,491 | $ | 2,354 | $ | — | $ | 399,054 | ||||||||||||
Allowance for Loan and Lease Losses and Loans Held for Investment | ||||||||||||||||||||||||||||||||
For the year ended December 31, 2013 | ||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||
Commercial | and land | Commercial | Multi- | Residential | Tax | |||||||||||||||||||||||||||
(In thousands) | real estate | development | and industrial | family | real estate | Leases | certificates | Consumer | Unallocated | Total | ||||||||||||||||||||||
Beginning balance | $ | 8,750 | $ | 2,987 | $ | 1,924 | $ | 654 | $ | 1,098 | $ | 1,108 | $ | 472 | $ | 29 | $ | 239 | $ | 17,261 | ||||||||||||
Charge-offs | -1,684 | -820 | -383 | — | -46 | -382 | -578 | — | — | -3,893 | ||||||||||||||||||||||
Recoveries | 600 | 297 | 17 | — | 158 | 29 | 74 | — | — | 1,175 | ||||||||||||||||||||||
(Credit) provision | -2,168 | -148 | 1,448 | -252 | -737 | 468 | 587 | -14 | -56 | -872 | ||||||||||||||||||||||
Ending balance | $ | 5,498 | $ | 2,316 | $ | 3,006 | $ | 402 | $ | 473 | $ | 1,223 | $ | 555 | $ | 15 | $ | 183 | $ | 13,671 | ||||||||||||
Ending balance: related to loans individually evaluated for impairment | $ | 331 | $ | — | $ | 452 | $ | — | $ | 19 | $ | 60 | $ | 24 | $ | — | $ | — | $ | 886 | ||||||||||||
Ending balance: related to loans collectively evaluated for impairment | $ | 5,167 | $ | 2,316 | $ | 2,554 | $ | 402 | $ | 454 | $ | 1,163 | $ | 531 | $ | 15 | $ | 183 | $ | 12,785 | ||||||||||||
LHFI | ||||||||||||||||||||||||||||||||
Ending balance | $ | 148,293 | $ | 45,261 | $ | 79,589 | $ | 11,737 | $ | 25,535 | $ | 42,524 | $ | 12,716 | $ | 826 | $ | — | $ | 366,481 | ||||||||||||
Ending balance: individually evaluated for impairment | $ | 5,325 | $ | 3,907 | $ | 8,049 | $ | — | $ | 632 | $ | 139 | $ | 454 | $ | — | $ | — | $ | 18,506 | ||||||||||||
Ending balance: collectively evaluated for impairment | $ | 142,968 | $ | 41,354 | $ | 71,540 | $ | 11,737 | $ | 24,903 | $ | 42,385 | $ | 12,262 | $ | 826 | $ | — | $ | 347,975 | ||||||||||||
The following tables detail the LHFI that were evaluated for impairment by loan classification at December 31, 2014 and December 31, 2013. | ||||||||||||||||||||||||||||||||
At and for the December 31, 2014 | ||||||||||||||||||||||||||||||||
Unpaid | Average | Interest | ||||||||||||||||||||||||||||||
principal | Recorded | Related | recorded | income | ||||||||||||||||||||||||||||
(In thousands) | balance | investment | allowance | investment | recognized | |||||||||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||||||||||||||
Commercial real estate | $ | 6,632 | $ | 6,113 | $ | — | $ | 5,089 | $ | 98 | ||||||||||||||||||||||
Construction and land development | 894 | 683 | — | 2,233 | 71 | |||||||||||||||||||||||||||
Commercial and industrial | 5,358 | 5,118 | — | 5,786 | 208 | |||||||||||||||||||||||||||
Tax certificates | 1,120 | 890 | — | 867 | — | |||||||||||||||||||||||||||
Total: | $ | 14,004 | $ | 12,804 | $ | — | $ | 13,975 | $ | 377 | ||||||||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||||||||||||||
Commercial real estate | $ | 926 | $ | 682 | $ | 200 | $ | 529 | $ | — | ||||||||||||||||||||||
Construction and land development | — | — | — | 145 | — | |||||||||||||||||||||||||||
Commercial and industrial | 2,500 | 728 | 301 | 688 | — | |||||||||||||||||||||||||||
Residential real estate | 1,068 | 959 | 28 | 864 | — | |||||||||||||||||||||||||||
Leases | 95 | 95 | 80 | 108 | — | |||||||||||||||||||||||||||
Tax certificates | 4,835 | 810 | 432 | 145 | — | |||||||||||||||||||||||||||
Total: | $ | 9,424 | $ | 3,274 | $ | 1,041 | $ | 2,479 | $ | — | ||||||||||||||||||||||
At and for the year ended December 31, 2013 | ||||||||||||||||||||||||||||||||
Unpaid | Average | Interest | ||||||||||||||||||||||||||||||
principal | Recorded | Related | recorded | income | ||||||||||||||||||||||||||||
(In thousands) | balance | investment | allowance | investment | recognized | |||||||||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||||||||||||||
Commercial real estate | $ | 4,429 | $ | 4,158 | $ | — | $ | 7,956 | $ | 73 | ||||||||||||||||||||||
Construction and land development | 9,850 | 3,907 | — | 3,933 | 209 | |||||||||||||||||||||||||||
Commercial and industrial | 6,693 | 6,491 | — | 5,960 | 250 | |||||||||||||||||||||||||||
Residential real estate | — | — | — | 84 | 27 | |||||||||||||||||||||||||||
Tax certificates | 179 | 115 | — | 167 | — | |||||||||||||||||||||||||||
Total: | $ | 21,151 | $ | 14,671 | $ | — | $ | 18,100 | $ | 559 | ||||||||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||||||||||||||
Commercial real estate | $ | 1,435 | $ | 1,435 | $ | 331 | $ | 1,879 | $ | — | ||||||||||||||||||||||
Construction and land development | — | — | — | 381 | — | |||||||||||||||||||||||||||
Commercial and industrial | 2,592 | 1,290 | 452 | 2,456 | — | |||||||||||||||||||||||||||
Residential real estate | 827 | 631 | 19 | 492 | — | |||||||||||||||||||||||||||
Leases | 139 | 139 | 60 | 106 | — | |||||||||||||||||||||||||||
Tax certificates | 4,322 | 340 | 24 | 341 | — | |||||||||||||||||||||||||||
Total: | $ | 9,315 | $ | 3,835 | $ | 886 | $ | 5,655 | $ | — | ||||||||||||||||||||||
OTHER_REAL_ESTATE_OWNED
OTHER REAL ESTATE OWNED | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Other Real Estate Owned [Abstract] | |||||||||||
Other real estate owned | Note 6.Other Real Estate Owned | ||||||||||
At December 31, 2014, OREO is comprised of three real estate properties acquired through, or in lieu of foreclosure in settlement of loans and 79 real estate properties acquired through foreclosure related to tax liens. Set forth below are tables which detail the changes in OREO from December 31, 2013 to December 31, 2014 and December 31, 2012 to December 31, 2013. | |||||||||||
For the year ended December 31, 2014 | |||||||||||
(In thousands) | Loans | Tax Liens | Total | ||||||||
Beginning balance | $ | 1,725 | $ | 7,892 | $ | 9,617 | |||||
Net proceeds from sales | -1,336 | -2,970 | -4,306 | ||||||||
Net gains on sales | 59 | 684 | 743 | ||||||||
Transfers in | — | 2,919 | 2,919 | ||||||||
Cash additions | — | 1,330 | 1,330 | ||||||||
Impairment charge | -99 | -425 | -524 | ||||||||
Ending balance | $ | 349 | $ | 9,430 | $ | 9,779 | |||||
For the year ended December 31, 2013 | |||||||||||
(In thousands) | Loans | Tax Liens | Total | ||||||||
Beginning balance | $ | 11,365 | $ | 2,070 | $ | 13,435 | |||||
Net proceeds from sales | -8,869 | -3,910 | -12,779 | ||||||||
Net gain on sales | 228 | 1,199 | 1,427 | ||||||||
Transfers in | 100 | 8,951 | 9,051 | ||||||||
Impairment charge | -1,099 | -418 | -1,517 | ||||||||
Ending balance | $ | 1,725 | $ | 7,892 | $ | 9,617 | |||||
At December 31, 2014, OREO was comprised of $229,000 in land, $9.4 million in tax liens, and residential real estate, related to a condominium construction project in Minneapolis, Minnesota in which the Company is a participant with a fair value of $120,000. At December 31, 2014, OREO assets acquired through the tax lien portfolio were comprised of 79 properties and were primarily located in New Jersey. | |||||||||||
PREMISES_AND_EQUIPMENT
PREMISES AND EQUIPMENT | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
PREMISES AND EQUIPMENT [Abstract] | |||||||||
PREMISES AND EQUIPMENT | NOTE 7 - PREMISES AND EQUIPMENT | ||||||||
Premises and equipment are summarized as follows (in thousands): | |||||||||
As of December 31, | |||||||||
(In thousands) | Estimated Useful Lives | 2014 | 2013 | ||||||
Land | $ | 2,135 | $ | 2,200 | |||||
Buildings and leasehold improvements | 5 - 39 years | 6,160 | 6,225 | ||||||
Furniture, fixtures and equipment | 3 - 7 years | 7,694 | 7,006 | ||||||
15,989 | 15,431 | ||||||||
Less accumulated depreciation and amortization | -10,788 | -10,956 | |||||||
Premises and equipment, net | $ | 5,201 | $ | 4,475 | |||||
Depreciation and amortization expense related to premises and equipment was approximately $569,000 and $451,000, for the years ended 2014 and 2013, respectively. The increase in depreciation costs is primarily associated with the leasehold improvements and furniture and equipment costs associated with the four branch relocations and the co-location of all non-retail employees. | |||||||||
LEASE_COMMITMENTS
LEASE COMMITMENTS | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
LEASE COMMITMENTS [Abstract] | |||||
LEASE COMMITMENTS | NOTE 8 - LEASE COMMITMENTS | ||||
The Company leases various premises under operating lease agreements, which expire through 2024 and require minimum annual rentals. Some of these leases are cancelable. The approximate minimum rental commitments under the leases are as follows for the year ended December 31, 2014: | |||||
As of | |||||
(In thousands) | 31-Dec-14 | ||||
2015 | 1,145 | ||||
2016 | 1,143 | ||||
2017 | 1,132 | ||||
2018 | 1,115 | ||||
2019 | 635 | ||||
Thereafter | 2,049 | ||||
Total lease commitments | $ | 7,219 | |||
The leases contain options to extend for periods from one to ten years. The cost of such lease extensions is not included in the above table. Rental expense for all leases was approximately $890,000 and $785,000 for the years ended December 31, 2014 and 2013, respectively. | |||||
DEPOSITS
DEPOSITS | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Deposits [Abstract] | ||||||||
Deposits | Note 9.Deposits | |||||||
The Company’s deposit composition as of December 31, 2014 and December 31, 2013 is presented below: | ||||||||
December 31, | December 31, | |||||||
(In thousands) | 2014 | 2013 | ||||||
Demand | $ | 73,665 | $ | 60,473 | ||||
NOW | 46,515 | 45,375 | ||||||
Money Market | 166,224 | 164,678 | ||||||
Savings | 18,721 | 17,593 | ||||||
Time deposits (over $100) | 87,209 | 92,763 | ||||||
Time deposits (under $100) | 138,091 | 148,082 | ||||||
Total deposits | $ | 530,425 | $ | 528,964 | ||||
Maturities of time deposits for the next five years and thereafter are as follows: | ||||||||
As of | ||||||||
(In thousands) | 31-Dec-14 | |||||||
2015 | 127,060 | |||||||
2016 | 56,604 | |||||||
2017 | 16,281 | |||||||
2018 | 8,384 | |||||||
2019 | 3,624 | |||||||
Thereafter | 13,347 | |||||||
Total certificates of deposit | $ | 225,300 | ||||||
BORROWINGS_AND_SUBORDINATED_DE
BORROWINGS AND SUBORDINATED DEBENTURES | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Borrowings and Subordinated Debentures [Abstract] | ||||||||||||
Borrowings and Subordinated Debentures | Note 10.Borrowings and Subordinated Debentures | |||||||||||
1 | Advances from the Federal Home Loan Bank | |||||||||||
As of December 31, 2014, Royal Bank had $188.0 million of available borrowing capacity at the FHLB, which is based on qualifying collateral. Total advances from the FHLB were $55.0 million and had a weighted average rate of 1.36% at December 31, 2014 compared to $65.0 million and a weighted average rate of 1.19% at December 31, 2013. The average balance of advances with the FHLB was $59.4 million and $64.4 million for 2014 and 2013, respectively. The advances and the line of credit are collateralized by FHLB stock, government agencies and mortgage-backed securities. As of December 31, 2014, investment securities with a fair value of $40.2 million were pledged as collateral to the FHLB. | ||||||||||||
Presented below are the Company’s FHLB borrowings allocated by the year in which they mature with their corresponding weighted average rates: | ||||||||||||
As of | As of | |||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||
(Dollars in thousands) | Amount | Rate | Amount | Rate | ||||||||
Advances maturing in | ||||||||||||
2014 | $ | — | — | % | $ | 10,000 | 0.24 | % | ||||
2015 | 10,000 | 0.71 | % | 10,000 | 0.71 | % | ||||||
2016 | 10,000 | 1.11 | % | 10,000 | 1.11 | % | ||||||
2017 | 25,000 | 1.46 | % | 25,000 | 1.46 | % | ||||||
2018 | 10,000 | 2.01 | % | 10,000 | 2.01 | % | ||||||
Total FHLB borrowings | $ | 55,000 | $ | 65,000 | ||||||||
2 | Other borrowings | |||||||||||
The Company has a note payable with PNC Bank (“PNC”) at December 31, 2014 in the amount of $2.4 million compared to $2.9 million at December 31, 2013. The note’s maturity date is August 25, 2016. The interest rate is a variable rate equal to one month LIBOR + 15 basis points and adjusts monthly. The interest rate at December 31, 2014 was 0.31%. | ||||||||||||
At December 31, 2014, the Company had additional borrowings of $35.0 million from PNC which will mature on January 7, 2018, compared to $40.0 million at December 31, 2013. These borrowings have a weighted average interest rate of 3.65%. During the fourth quarter of 2014, the Company pre-paid $5.0 million in principal to reduce future interest expense and incurred a prepayment penalty of $402,000. The note payable and the borrowings are secured by government agencies and mortgage-backed securities. As of December 31, 2014, investment securities with a market value of $43.4 million were pledged as collateral to secure all $37.4 million in borrowings with PNC. | ||||||||||||
During 2014, Royal Bank secured an additional $10.0 million line of credit, of which $0 is outstanding at December 31, 2014, with a local financial institution. | ||||||||||||
3 | Subordinated debentures | |||||||||||
The Company has outstanding $25.0 million of Trust Preferred Securities issued through two Delaware trust affiliates, Royal Bancshares Capital Trust I (“Trust I”) and Royal Bancshares Capital Trust II (“Trust II”) (collectively, the “Trusts”). The Company issued an aggregate principal amount of $12.9 million of floating rate junior subordinated debt securities to Trust I and an aggregate principal amount of $12.9 million of fixed/floating rate junior subordinated debt securities to Trust II. Both debt securities bear an interest rate of 2.39% at December 31, 2014, and reset quarterly at 3-month LIBOR plus 2.15%. | ||||||||||||
Each of Trust I and Trust II issued an aggregate principal amount of $12.5 million of capital securities initially bearing fixed and/or fixed/floating interest rates corresponding to the debt securities held by each trust to an unaffiliated investment vehicle and an aggregate principal amount of $387,000 of common securities bearing fixed and/or fixed/floating interest rates corresponding to the debt securities held by each trust to the Company. The Company has fully and unconditionally guaranteed all of the obligations of the Trusts, including any distributions and payments on liquidation or redemption of the capital securities. | ||||||||||||
Under the Federal Reserve Agreement as described in “Note 2 — Regulatory Matters and Significant Risks or Uncertainties” to the Consolidated Financial Statements, the Company and its non-bank subsidiaries may not make any distributions of interest, principal, or other sums on subordinated debentures or trust preferred securities without the prior written approval of the Reserve Bank and the Director of the Division of Banking Supervision and Regulation of the Board of Governors of the Federal Reserve System. The Company received approval and paid all accumulated deferred interest in 2013 and the required interest payments in 2014. | ||||||||||||
DERIVATIVE_INSTRUMENTS_AND_HED
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITY | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITY | NOTE 11 – DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITY | ||||||||||
In 2014, the Company entered into a forward-starting interest rate swap agreement to hedge the risk of variability in its cash flows attributable to changes in the 3 month LIBOR rate. This particular hedging objective was to reduce the interest rate risk associated with its forecasted issuances of 3 month fixed rate debt arising from a rollover strategy. This derivative was used as part of the asset/liability management process, is linked to a specific liability, and has a high correlation between the contract and the underlying item being hedged, both at inception and throughout the hedge period. The derivative was designated as cash flow hedge with the change in fair value recorded as an adjustment through other comprehensive income (loss) until the underlying forecasted transactions occur, at which time the deferred gains and losses are recognized in earnings. The Company had no interest rate derivatives as of or during the year ended December 31, 2013. | |||||||||||
The effects of the derivative instrument on the Consolidated Financial Statements for December 31, 2014 was as follows: | |||||||||||
31-Dec-14 | |||||||||||
Notional | |||||||||||
Contract | Balance Sheet | Expiration | |||||||||
(In thousands) | Amount | Fair Value | Location | Date | |||||||
Derivatives designated as hedging instruments | |||||||||||
Interest rate swaps: | |||||||||||
Effective June 24, 2016 | $ | 15,000 | $ | -187 | Other liabilities | 24-Jun-21 | |||||
Total: | $ | 15,000 | $ | -187 | |||||||
For the year ended December 31, 2014 | |||||||||||
Amount of Loss | Location of Loss | Amount of Loss | |||||||||
Recognized | Recognized | Recognized | |||||||||
in OCI | in Income | in Income | |||||||||
on Derivatives | on Derivatives | on Derivatives | |||||||||
(In thousands) | (Effective Portion) | (Ineffective Portion) | (Ineffective Portion) | ||||||||
Derivatives designated as hedging instruments | |||||||||||
Interest rate swaps: | |||||||||||
Effective June 24, 2016 | $ | -187 | Not Applicable | $ | — | ||||||
Total: | $ | -187 | $ | — | |||||||
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
INCOME TAXES [Abstract] | |||||||
INCOME TAXES | NOTE 12 - INCOME TAXES | ||||||
The components of income tax (benefit) expense are stated below: | |||||||
For the years ended December 31, | |||||||
(In thousands) | 2014 | 2013 | |||||
Income tax (benefit) expense | |||||||
Current | $ | -654 | $ | 42 | |||
Deferred | — | - | |||||
Income tax (benefit) expense | $ | -654 | $ | 42 | |||
The difference between the income tax (benefit) expense and the amount computed by applying the statutory federal income tax rate of 34% in 2014 and 2013 is as follows: | |||||||
For the years ended December 31, | |||||||
(In thousands) | 2014 | 2013 | |||||
Computed tax expense at statutory rate | $ | 1,645 | $ | 731 | |||
Non-controlling interest | -186 | — | |||||
Tax-exempt income | - | -22 | |||||
Fines and penalties | 28 | - | |||||
Stock options expense | 71 | - | |||||
Nondeductible expense | 18 | 21 | |||||
Bank owned life insurance | -174 | -183 | |||||
Capital loss carryover-expired | 202 | - | |||||
Charitable contributions carryover-expired | 2 | - | |||||
Refunds-prior year amended tax return filings | -654 | - | |||||
Adjustment to prior year items | -3,584 | 1,933 | |||||
Increase (decrease) in valuation allowance | 1,978 | -2,438 | |||||
Income tax (benefit) expense | $ | -654 | $ | 42 | |||
Deferred tax assets and liabilities consist of the following: | |||||||
As of December 31, | |||||||
(In thousands) | 2014 | 2013 | |||||
Deferred tax assets | |||||||
Allowance for loan and lease losses | $ | 3,495 | $ | 4,648 | |||
Net operating loss carryforward | 23,801 | 18,908 | |||||
Asset valuation reserves | — | 34 | |||||
Escrow settlement reserves | — | 561 | |||||
Security writedowns | 1,855 | 2,193 | |||||
OREO writedowns | 465 | 1,490 | |||||
Investment in partnerships | 2,046 | 1,805 | |||||
Pension obligations | 5,249 | 4,926 | |||||
Unrealized losses on debt securities | — | 2,171 | |||||
Share-based compensation cost | 77 | 143 | |||||
Non-accrual interest | 287 | 134 | |||||
Capital loss carryovers | 1,739 | 2,892 | |||||
Charitable contribution carryovers | 16 | 14 | |||||
Employee bonuses | 91 | — | |||||
Accrued liabilities | 163 | — | |||||
Alternative minimum tax credit carryforward | 282 | — | |||||
Other | 149 | 77 | |||||
Total deferred tax assets before valuation allowance | 39,715 | 39,996 | |||||
Deferred tax liabilities | |||||||
Penalties on delinquent tax certificates | 72 | 39 | |||||
Unrealized gains on AFS debt securities | 308 | — | |||||
Unrealized gains on AFS equity securities | 434 | 429 | |||||
Prepaid deductions | 17 | 190 | |||||
Other | 55 | 8 | |||||
Total deferred tax liabilities | 886 | 666 | |||||
Less valuation allowance | -39,137 | -37,159 | |||||
Net deferred tax (liability) asset, included in other assets | $ | -308 | $ | 2,171 | |||
As of December 31, 2014 the Company had a federal net operating loss (“NOL”) carryforwards of approximately $60.1 million and state NOL carryforwards of $145.3 million which are available to be carried forward to future tax years. The federal loss carryforwards will begin to expire in 2029 and the state NOLs will begin to expire in 2027 if not fully utilized. | |||||||
The Company has approximately $4.0 million available to be utilized as of December 31, 2014 related to net operating loss carryovers from the acquisition of Knoblauch State Bank. The ability to utilize these carryovers will expire in 2015. The utilization of these losses is subject to limitation under Section 382 of the Internal Revenue Code. | |||||||
As of December 31, 2014, the Company has capital loss carryforwards of approximately $5.1 million and charitable contribution carryovers of $47,000 which will begin to expire as of December 31, 2015 if not utilized. The Company also has general business tax credit carryovers of $1,000 that will begin to expire as of December 31, 2030 if not utilized and AMT tax credits of $282,000 that has an indefinite life. | |||||||
The Company recognizes deferred tax assets and liabilities for the future tax consequences related to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for tax credits. The deferred tax assets/(liabilities), net of valuation allowances, totaled $(308,000) and $2.2 million at December 31, 2014 and 2013, respectively. Management evaluated the deferred tax assets for recoverability using a consistent approach which considers the relative impact of negative and positive evidence, including historical profitability and projections of future reversals of temporary differences and future taxable income. The Company is required to establish a valuation allowance for deferred tax assets and record a charge to income or shareholders' equity if management determines, based on available evidence at the time the determination is made, that it is more likely than not that some portion or all of the deferred tax assets will not be realized. In evaluating the need for a valuation allowance, the Company estimates future taxable income based on management approved business plans and ongoing tax planning strategies. This process involves significant management judgment about assumptions that are subject to change from period to period based on changes in tax laws or variances between projected operating performance, actual results and other factors. | |||||||
As of December 31, 2014, the Company was in a cumulative book loss position for the three-year period ended December 31, 2014. For purposes of establishing a deferred tax asset valuation allowance, this cumulative book loss position is considered significant objective evidence that the Company may not be able to realize some portion of the deferred tax assets in the future. | |||||||
As of December 31, 2014, and 2013, management concluded that it was more likely than not that the Company would not generate sufficient future taxable income to realize all of the deferred tax assets. Management’s conclusion was based on consideration of the relative weight of the available evidence and the uncertainty of future market conditions on results of operations. | |||||||
FINANCIAL_INSTRUMENTS_WITH_OFF
FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK AND CONCENTRATIONS OF CREDIT RISK | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Commitments, Contingencies, and Concentrations [Abstract] | ||||||||
Commitments, Contingencies, and Concentrations | Note 13.FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK AND CONCENTRATIONS OF CREDIT 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. Such financial instruments are recorded in the financial statements when they become payable. 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 non-performance by the other party to commitments to extend credit and standby letters of credit 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 contract amounts are as follows: | ||||||||
December 31, | December 31, | |||||||
(In thousands) | 2014 | 2013 | ||||||
Financial instruments whose contract amounts represent credit risk: | ||||||||
Open-end lines of credit | $ | 48,929 | $ | 21,182 | ||||
Commitments to extend credit | 6,430 | 200 | ||||||
Standby letters of credit and financial guarantees written | 371 | 2,679 | ||||||
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, and others are for staged construction, the total commitment amounts do not necessarily represent immediate cash requirements. | ||||||||
The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation. Collateral held varies but may include personal or commercial real estate, accounts receivable, inventory or equipment. | ||||||||
Standby letters of credit 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, including commercial paper, bond financing and similar transactions. Most guarantees extend for one year and expire in decreasing amounts through October 2015. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company holds personal or commercial real estate, accounts receivable, inventory or equipment as collateral supporting those commitments for which collateral is deemed necessary. The extent of collateral held for those commitments is approximately 75%. | ||||||||
LEGAL_CONTINGENCIES
LEGAL CONTINGENCIES | 12 Months Ended |
Dec. 31, 2014 | |
LEGAL CONTINGENCIES [Abstract] | |
LEGAL CONTINGENCIES | NOTE 14 – LEGAL CONTINGENCIES |
Royal Bank had a 60% equity interest in each of CSC and RTL. CSC and RTL acquired, through public auction, delinquent tax liens in various jurisdictions thereby assuming a superior lien position to most other lien holders, including mortgage lien holders. In 2012, the former President of CSC and RTL, CSC, RTL and the Company were named defendants, among others, in a Consolidated Master Class Action Complaint (the “Complaint”) filed in the U.S. District Court for the District of New Jersey (“Court”) on behalf of a proposed class of taxpayers who became delinquent in paying their municipal tax obligations. The Complaint alleged a conspiracy to rig bids in municipal tax lien auctions. | |
During 2013, the Company, Royal Bank, CSC, and RTL reached a settlement agreement with plaintiffs to settle the litigation for $1.65 million and other terms and conditions, including an opportunity for members of the proposed settlement class whose tax liens are currently held by CSC or RTL to redeem those liens for a one-time cash payment equaling 85% of the redemption amount by making such payment within 35 days of the date of written notice. The proposed settlement class does not include, and therefore the offer to redeem does not apply to, tax liens acquired at 0% interest or at a premium. The settlement is subject to Court approval after notice and a hearing. Members of the proposed settlement class will have an opportunity to object to the proposed settlement or opt-out. After adjusting for the noncontrolling interest, the Company’s 60% share of the loss contingency amounted to $990,000 on a pre-tax basis. | |
SHAREHOLDERS_EQUITY
SHAREHOLDERSb EQUITY | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Shareholders' Equity [Abstract] | ||||
Shareholders' Equity | Note 15.Shareholders’ Equity | |||
1 | Preferred Stock | |||
On February 20, 2009, as part of the Capital Purchase Program (“CPP”) established by the Treasury, the Company issued to Treasury 30,407 shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series A, without par value per share (the “Series A Preferred Stock”), and a liquidation preference of $1,000 per share. In conjunction with the purchase of the Series A Preferred Stock, Treasury received a warrant to purchase 1,104,370 shares of the Company’s Class A common stock. The aggregate purchase price for the Series A Preferred Stock and warrant was $30.4 million in cash. The Series A Preferred Stock qualifies as Tier 1 capital and originally paid cumulative dividends at a rate of 5% per annum. In February 2014, the cumulative dividend rate on the Series A Preferred Stock increased to 9% per annum. The Series A Preferred Stock may generally be redeemed by the Company at any time following consultation with its primary banking regulators. The warrant issued to Treasury has a 10-year term and is immediately exercisable upon its issuance, with an exercise price, subject to anti-dilution adjustments, equal to $4.13 per share of the common stock. As a result of the shareholders’ right offering described below, the number of warrants to purchase the Company’s Class A common stock adjusted to 1,368,040 and the warrant exercise price decreased to $3.33 per share of the common stock. | ||||
The Company received approval from the Federal Reserve Bank to bid up to $14.0 million, which was raised in a private placement, to purchase shares of the Series A Preferred Stock in an auction of such shares to be conducted by the Treasury. The auction closed on June 19, 2014. The Series A Preferred Stock was priced in the auction at $1,207.11 per share for all 30,407 shares of Series A Preferred Stock outstanding. The Company was allocated 11,551 shares of Series A Preferred Stock for repurchase at the clearing price of $1,207.11. Closing for the sale of the Series A Preferred Stock by the Treasury, including the repurchase of 11,551 shares of Series A Preferred Stock by the Company occurred, on July 2, 2014. As part of this redemption, the Company eliminated nearly $3.5 million in preferred dividend in arrears. | ||||
2 | Common Stock | |||
The Company’s Class A common stock trades on the NASDAQ Global Market under the symbol RBPAA. There is no market for the Company’s Class B common stock. The Class B shares may not be transferred in any manner except to the holder’s immediate family. Class B shares may be converted to Class A shares at the rate of 1.15 to 1. Shareholders are entitled to one vote for each Class A share and ten votes for each Class B share held. Holders of either class of common stock are entitled to conversion equivalent per share dividends when declared. | ||||
To fund the purchase of the Series A Preferred Stock, described above, the Company sold 11,666,667 shares of its Class A common stock in a private placement transaction at a price of $1.20 per share. Additionally, during the third quarter of 2014, the Company conducted a shareholder rights offering to existing shareholders to limit their ownership dilution from the sale of Class A common stock to the other investors in the private placement. The Company issued 4,999,896 shares and received gross proceeds of approximately $6.0 million. The private placement and the shareholders rights offering combined to increase tangible common equity by nearly $18.0 million. | ||||
3 | Payment of Dividends | |||
Under the Pennsylvania Business Corporation Law, the Company may pay dividends only if it is solvent and would not be rendered insolvent by the dividend payment. There are also restrictions set forth in the Pennsylvania Banking Code of 1965 (the “Code”) and in the Federal Deposit Insurance Act (“FDIA”) affecting the payment of dividends to the Company by Royal Bank. Under the Code, no dividends may be paid by a bank except from “accumulated net earnings” (generally retained earnings). In addition, dividends paid by Royal Bank to the Company would be prohibited if the effect thereof would cause Royal Bank’s capital to be reduced below applicable minimum capital requirements. | ||||
In 2009, the Company suspended the regular quarterly cash dividends on the Series A Preferred Stock. The Company’s Board took this action in consultation with the Federal Reserve Bank of Philadelphia as required by regulatory policy guidance. In February 2014, the preferred cumulative dividend rate prospectively increased to 9% per annum. As a result of the Company’s repurchase of 11,551 shares of Series A Preferred Stock, approximately $3.5 million of the Series A Preferred stock dividend in arrears was eliminated. As of December 31, 2014, the Series A Preferred stock dividend in arrears was approximately $6.6 million and has not been recognized in the consolidated financial statements. In the event the Company declared the preferred dividend the Company’s capital ratios would be negatively affected; however, they would remain above the required minimum ratios. Under the Federal Reserve MOU as described in “Note 2 — Regulatory Matters and Significant Risks or Uncertainties” to the Consolidated Financial Statements, the Company may not declare or pay any dividends without the prior written approval of the Reserve Bank and the Director of the Division of Banking Supervision and Regulation of the Board of Governors of the Federal Reserve System. | ||||
4. Change in Noncontrolling Interest | ||||
As mentioned in “Note 1 – Summary of Significant Accounting Policies” to the Consolidated Financial Statements, Royal Bank had a 60% ownership interest in CSC and RTL. Effective December 31, 2013, Royal Bank agreed to a $1.25 million cash settlement with the former President of CSC and RTL, in which Royal Bank acquired his 40% ownership interest in RTL for $850,000. The former President also relinquished his 20% ownership interest in CSC to Royal Bank. The combined value of the ownership interests was $2.6 million. The settlement resulted in a $1.5 million gain for Royal Bank which was recorded as an increase to Additional Paid in Capital within Stockholders Equity. As part of the cash settlement Royal Bank agreed to pay $400,000 for prior tax distributions. Additionally, the settlement agreement also provided for a possible tax payment upon completion of the 2013 Forms K-1. The additional tax payment of $28,000 was made in 2014. The Company does not anticipate future payments to the former President of CSC and RTL. Effective, December 31, 2013, Royal Bank is an 80% owner of CSC and 100% owner of RTL. | ||||
REGULATORY_CAPITAL_REQUIREMENT
REGULATORY CAPITAL REQUIREMENTS | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Regulatory Capital Requirements [Abstract] | |||||||||||||||||
Regulatory Capital Requirements | Note 16.Regulatory Capital Requirements | ||||||||||||||||
The Company and Royal Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s and Royal Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. As of December 31, 2014, the Company and Royal Bank met all capital adequacy requirements to which it is subject and Royal Bank met the criteria for a well-capitalized institution. | |||||||||||||||||
In connection with a prior bank regulatory examination, the FDIC concluded, based upon its interpretation of the Call Report instructions and under RAP, that income from Royal Bank’s tax lien business should be recognized on a cash basis, not an accrual basis. Royal Bank’s current accrual method is in accordance with U.S. GAAP. Royal Bank disagrees with the FDIC’s conclusion and filed the Call Report for December 31, 2014 and the previous 17 quarters in accordance with U.S. GAAP. The change in the method of revenue recognition for the tax lien business for regulatory accounting purposes affects Royal Bank’s and the Company’s capital ratios as shown below. The resolution of this matter will be decided by additional joint regulatory agency guidance which includes the Federal Reserve Bank, the FDIC, and the OCC. | |||||||||||||||||
The table below sets forth Royal Bank’s capital ratios under RAP based on the FDIC’s interpretation of the Call Report instructions: | |||||||||||||||||
Actual | For capital adequacy purposes | To be well capitalized under prompt corrective action provision | |||||||||||||||
(Dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||
Total capital (to risk-weighted assets) | |||||||||||||||||
At December 31, 2014 | $ | 78,582 | 15.89 | % | $ | 39,573 | 8.00 | % | $ | 49,466 | 10.00 | % | |||||
At December 31, 2013 | $ | 71,417 | 15.61 | % | $ | 36,590 | 8.00 | % | $ | 45,737 | 10.00 | % | |||||
Tier I capital (to risk-weighted assets) | |||||||||||||||||
At December 31, 2014 | $ | 72,330 | 14.62 | % | $ | 19,787 | 4.00 | % | $ | 29,680 | 6.00 | % | |||||
At December 31, 2013 | $ | 65,602 | 14.34 | % | $ | 18,295 | 4.00 | % | $ | 27,442 | 6.00 | % | |||||
Tier I capital (to average assets, leverage) | |||||||||||||||||
At December 31, 2014 | $ | 72,330 | 10.12 | % | $ | 28,585 | 4.00 | % | $ | 35,731 | 5.00 | % | |||||
At December 31, 2013 | $ | 65,602 | 9.13 | % | $ | 28,739 | 4.00 | % | $ | 35,924 | 5.00 | % | |||||
The tables below reflect the adjustments to the net income as well as the capital ratios for Royal Bank under U.S. GAAP: | |||||||||||||||||
For the year ended | For the year ended | ||||||||||||||||
(In thousands) | 31-Dec-14 | 31-Dec-13 | |||||||||||||||
RAP net income (loss) | $ | 1,924 | $ | -139 | |||||||||||||
Tax lien adjustment, net of noncontrolling interest | 3,170 | 2,844 | |||||||||||||||
U.S. GAAP net income | $ | 5,094 | $ | 2,705 | |||||||||||||
At December 31, 2014 | At December 31, 2013 | ||||||||||||||||
As reported | As adjusted | As reported | As adjusted | ||||||||||||||
under RAP | for U.S. GAAP | under RAP | for U.S. GAAP | ||||||||||||||
Total capital (to risk-weighted assets) | 15.89 | % | 16.44 | % | 15.61 | % | 16.49 | % | |||||||||
Tier I capital (to risk-weighted assets) | 14.62 | % | 15.17 | % | 14.34 | % | 15.22 | % | |||||||||
Tier I capital (to average assets, leverage) | 10.12 | % | 10.52 | % | 9.13 | % | 9.73 | % | |||||||||
The tables below reflect the Company’s capital ratios: | |||||||||||||||||
Actual | For capital adequacy purposes | To be well capitalized under prompt corrective action provision | |||||||||||||||
(Dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||
Total capital (to risk-weighted assets) | |||||||||||||||||
At December 31, 2014 | $ | 95,944 | 19.20 | % | $ | 39,986 | 8.00 | % | N/A | N/A | |||||||
At December 31, 2013 | $ | 84,384 | 18.09 | % | $ | 37,315 | 8.00 | % | N/A | N/A | |||||||
Tier I capital (to risk-weighted assets) | |||||||||||||||||
At December 31, 2014 | $ | 86,329 | 17.27 | % | $ | 19,993 | 4.00 | % | N/A | N/A | |||||||
At December 31, 2013 | $ | 71,432 | 15.31 | % | $ | 18,658 | 4.00 | % | N/A | N/A | |||||||
Tier I capital (to average assets, leverage) | |||||||||||||||||
At December 31, 2014 | $ | 86,329 | 11.88 | % | $ | 29,056 | 4.00 | % | N/A | N/A | |||||||
At December 31, 2013 | $ | 71,432 | 9.79 | % | $ | 29,178 | 4.00 | % | N/A | N/A | |||||||
The Company has filed the Consolidated Financial Statements for Bank Holding Companies-FR Y-9C (“FR Y-9C”) as of December 31, 2014 consistent with U.S. GAAP and the FR Y-9C instructions. In the event that a similar adjustment for RAP purposes would be required by the Federal Reserve on the holding company level, the adjusted ratios are shown in the table below. | |||||||||||||||||
For the year ended | For the year ended | ||||||||||||||||
(In thousands) | 31-Dec-14 | 31-Dec-13 | |||||||||||||||
U.S. GAAP net income | $ | 5,110 | $ | 2,109 | |||||||||||||
Tax lien adjustment, net of noncontrolling interest | -3,170 | -2,844 | |||||||||||||||
RAP net income (loss) | $ | 1,940 | $ | -735 | |||||||||||||
At December 31, 2014 | At December 31, 2013 | ||||||||||||||||
As reported under U.S. GAAP | As adjusted for RAP | As reported under U.S. GAAP | As adjusted for RAP | ||||||||||||||
Total capital (to risk-weighted assets) | 19.20 | % | 18.67 | % | 18.09 | % | 17.24 | % | |||||||||
Tier I capital (to risk-weighted assets) | 17.27 | % | 16.74 | % | 15.31 | % | 14.10 | % | |||||||||
Tier I capital (to average assets, leverage) | 11.88 | % | 11.49 | % | 9.79 | % | 8.98 | % | |||||||||
PENSION_PLANS
PENSION PLANS | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Pension Plan [Abstract] | ||||||||
Pension Plan | ||||||||
Note 17.Pension Plan | ||||||||
The following table sets forth the Company’s pension plan’s funded status and amounts recognized in the Company’s consolidated balance sheets: | ||||||||
For the years ended December 31, | ||||||||
(In thousands) | 2014 | 2013 | ||||||
Change in benefit obligation | ||||||||
Benefit obligation at beginning of year | $ | 14,488 | $ | 16,897 | ||||
Service cost | 64 | 81 | ||||||
Interest cost | 538 | 623 | ||||||
Benefits paid | -967 | -981 | ||||||
Actuarial (gain) loss | 1,315 | -2,132 | ||||||
Benefits obligation at end of year | $ | 15,438 | $ | 14,488 | ||||
Amounts recognized in accumulated other comprehensive income (loss) | ||||||||
Unrecognized prior service cost | 90 | 179 | ||||||
Unrecognized actuarial loss | 3,935 | 2,750 | ||||||
AOCI related to pension plan | $ | 4,025 | $ | 2,929 | ||||
The Company plans to fund the pension plan obligations through existing Company owned life insurance policies. The accumulated benefit obligation at December 31, 2014 and 2013 was $15.3 million and $14.5 million, respectively. | ||||||||
The table below reflects the assumptions used to determine the benefit obligations: | ||||||||
As of December 31, | ||||||||
2014 | 2013 | |||||||
Discount rate | 3.52 | % | 4.37 | % | ||||
Rate of compensation increase | 4.00 | % | 4.00 | % | ||||
The table below reflects the assumptions used to determine the net periodic pension cost: | ||||||||
As of December 31, | ||||||||
2014 | 2013 | |||||||
Discount rate | 3.52 | % | 4.37 | % | ||||
Rate of compensation increase | 4.00 | % | 4.00 | % | ||||
Net periodic defined benefit pension expense for the years ended December 31, 2014 and 2013 included the following components: | ||||||||
Year ended | ||||||||
December 31, | ||||||||
(In thousands) | 2014 | 2013 | ||||||
Service cost | $ | 64 | $ | 81 | ||||
Interest cost | 538 | 623 | ||||||
Amortization of prior service cost | 90 | 90 | ||||||
Amortization of actuarial loss | 128 | 238 | ||||||
Net periodic benefit cost | $ | 820 | $ | 1,032 | ||||
Benefit payments to be made from the Non-qualified Pension Plan are as follows: | ||||||||
As of December 31, 2014 | ||||||||
Non-Qualified | ||||||||
(In thousands) | Pension Plans | |||||||
2015 | $ | 977 | ||||||
2016 | 1,015 | |||||||
2017 | 1,015 | |||||||
2018 | 1,015 | |||||||
2019 | 1,028 | |||||||
Next five years thereafter | 5,728 | |||||||
Benefit payments are expected to be made from insurance policies owned by the Company. The cash surrender value for these policies was approximately $3.6 million and $3.4 million as of December 31, 2014 and 2013, respectively. | ||||||||
Defined Contribution Plan | ||||||||
The Company has a capital accumulation and salary reduction plan under Section 401(k) of the Internal Revenue Code of 1986, as amended. Under the plan, all employees are eligible to contribute up to the maximum allowed by IRS regulation, with the Company matching dollar for dollar of any contribution up to 5%, which is subject to a $2,500 per employee annual limit. During 2014, the Company reinstated the 401(k) matching contribution and recorded an expense of $148,000. For 2013, no matching contribution was made. | ||||||||
STOCK_COMPENSATION_PLANS
STOCK COMPENSATION PLANS | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
STOCK COMPENSATION PLANS [Abstract] | ||||||||||||||||
STOCK COMPENSATION PLANS | NOTE 18. STOCK COMPENSATION PLANS | |||||||||||||||
The Company recognized compensation expense for stock options in the amounts of $17,000 and $22,000 in 2014 and 2013, respectively. The Company granted 52,500 and 15,000 options to purchase common stock in 2014 and 2013, respectively. | ||||||||||||||||
1 | Outside Directors’ Stock Option Plan | |||||||||||||||
The Company had a non-qualified outside Directors’ Stock Option Plan (the “Directors’ Plan”) which expired in 2006. At December 31, 2014 all outstanding shares are fully vested (exercisable). The ability to grant new options under this plan has expired. | ||||||||||||||||
A summary of the Directors’ Plan activity is presented below: | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Weighted | Weighted | -1 | Weighted | |||||||||||||
Average | Average | Average | Average | |||||||||||||
Exercise | Remaining | Intrinsic | Exercise | |||||||||||||
Options | Price | Term (yrs) | Value | Options | Price | |||||||||||
Options outstanding at beginning of year | 25,670 | $ | 22.00 | 1.5 | 58,306 | $ | 21.15 | |||||||||
Forfeited | -4,756 | 21.81 | -24,286 | 21.24 | ||||||||||||
Expired | -8,190 | 22.38 | -8,350 | 18.27 | ||||||||||||
Options outstanding at the end of the year | 12,724 | $ | 21.83 | 0.9 | $ | — | 25,670 | $ | 22.00 | |||||||
Options exercisable at the end of the year | 12,724 | $ | 21.83 | 0.9 | $ | — | 25,670 | $ | 22.00 | |||||||
(1) The aggregate intrinsic value of a stock option in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had they exercised their options on December 31, 2014. The intrinsic value varies based on the changes in the market value in the Company’s stock. Because the exercise price exceeded the market value of the options, the average intrinsic value was $0 at December 31, 2014. | ||||||||||||||||
Information pertaining to options outstanding at December 31, 2014 is as follows: | ||||||||||||||||
Options outstanding and exercisable | ||||||||||||||||
Weighted | Weighted | |||||||||||||||
Average | Average | |||||||||||||||
Range of | Number | Exercise | Remaining | |||||||||||||
exercise prices | Outstanding | Price | Term (yrs) | |||||||||||||
$ | 21 | - | $ | 23.00 | 12,724 | $ | 21.83 | 0.9 | ||||||||
12,724 | $ | 21.83 | 0.9 | |||||||||||||
2. Employee Stock Option and Appreciation Right Plan | ||||||||||||||||
The Company had a Stock Option and Appreciation Right Plan (the “Plan”) which expired in 2006. At December 31, 2014 all outstanding shares are fully vested (exercisable). The ability to grant new options under this plan has expired. | ||||||||||||||||
A summary of the Plan activity is presented below: | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Weighted | Weighted | -1 | Weighted | |||||||||||||
Average | Average | Average | Average | |||||||||||||
Exercise | Remaining | Intrinsic | Exercise | |||||||||||||
Options | Price | Term (yrs) | Value | Options | Price | |||||||||||
Options outstanding at beginning of year | 82,780 | $ | 22.06 | 1.1 | 217,561 | $ | 21.50 | |||||||||
Forfeited | -13,309 | 21.89 | -119,137 | 21.53 | ||||||||||||
Expired | -33,859 | 22.38 | -15,644 | 18.27 | ||||||||||||
Options outstanding at the end of the year | 35,612 | $ | 21.82 | 1.0 | $ | — | 82,780 | $ | 22.06 | |||||||
Options exercisable at the end of the year | 35,612 | $ | 21.82 | 1.0 | $ | — | 82,780 | $ | 22.06 | |||||||
(1) The aggregate intrinsic value of a stock option in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had they exercised their options on December 31, 2014. The intrinsic value varies based on the changes in the market value in the Company’s stock. Because the exercise price exceeded the market value of the options, the average intrinsic value was $0 at December 31, 2014. | ||||||||||||||||
Information pertaining to options outstanding at December 31, 2014 is as follows: | ||||||||||||||||
Options outstanding and exercisable | ||||||||||||||||
Weighted | Weighted | |||||||||||||||
Average | Average | |||||||||||||||
Range of | Number | Exercise | Remaining | |||||||||||||
exercise prices | Outstanding | Price | Term (yrs) | |||||||||||||
$ | 21 | - | $ | 23.00 | 35,612 | $ | 21.82 | 1.0 | ||||||||
35,612 | $ | 21.82 | 1.0 | |||||||||||||
3 | Long-Term Incentive Plan | |||||||||||||||
The 2007 Long-Term Incentive Plan (“LTI Plan”) was approved by Shareholders at the May 16, 2007 Annual Meeting. The LTI Plan consists of both a restricted and an unrestricted stock option plan. All employees and non-employee directors of the Company and its designated subsidiaries are eligible participants. The LTI Plan includes one million shares of Class A common stock, subject to customary anti-dilution adjustments, or approximately 4.0% of the total outstanding shares of the Class A common stock. | ||||||||||||||||
As of December 31, 2014, 869,291 shares in the unrestricted plan are available for future grants. The option price is equal to the fair market value at the date of the grant. The employee options are exercisable based on the grant’s vesting schedule beginning one year after the date of grant and must be exercised within ten years of the grant date. Directors’ options are exercisable on the one year anniversary of the date of grant and must be exercised within ten years of the grant date. During 2014 and 2013, the Company recognized $17,000 and $22,000, respectively, in compensation expense for stock options. Approximately, $53,000 remained to be recognized in compensation expense over a weighted-average period of 2.0 years. | ||||||||||||||||
The following assumptions were used to estimate the fair value of the options granted during 2014 and 2013: | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Weighted average risk-free interest rate | 2.26 | % | 1.63 | % | ||||||||||||
Weighted average volatility | 85.29 | % | 94.00 | % | ||||||||||||
Expected dividend yield | — | % | — | % | ||||||||||||
Weighted average expected life | 5.0 years | 5.0 years | ||||||||||||||
A summary of the status of the unrestricted portion of the LTI Plan is presented below: | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Weighted | Weighted | -1 | Weighted | |||||||||||||
Average | Average | Average | Average | |||||||||||||
Exercise | Remaining | Intrinsic | Exercise | |||||||||||||
Options | Price | Term (yrs) | Value | Options | Price | |||||||||||
Options outstanding at beginning of year | 89,386 | $ | 7.95 | 4.9 | 86,226 | $ | 9.22 | |||||||||
Granted | 52,500 | 2.05 | 15,000 | 1.36 | ||||||||||||
Forfeited | -11,177 | 7.81 | -11,840 | 8.83 | ||||||||||||
Options outstanding at the end of the year | 130,709 | $ | 5.60 | 6.4 | $ | — | 89,386 | $ | 7.95 | |||||||
Options exercisable at the end of the year | 68,209 | $ | 8.94 | 3.7 | $ | — | 74,386 | $ | 9.28 | |||||||
Weighted-average fair value of options granted during the year | $ | 1.39 | $ | 0.98 | ||||||||||||
-1 | The aggregate intrinsic value of a stock option in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had they exercised their options on December 31, 2014. The intrinsic value varies based on the changes in the market value in the Company’s stock. Because the exercise price exceeded the market value of the options, the average intrinsic value was $0 at December 31, 2014. | |||||||||||||||
Information pertaining to options outstanding at December 31, 2014 is as follows: | ||||||||||||||||
Options issued and outstanding | ||||||||||||||||
Weighted | Weighted | |||||||||||||||
Average | Average | |||||||||||||||
Range of | Number | Exercise | Remaining | |||||||||||||
exercise prices | Outstanding | Price | Term (yrs) | |||||||||||||
$ | 1.00 | - | $ | 4.00 | 67,500 | $ | 1.90 | 9.3 | ||||||||
$ | 4.01 | - | $ | 10.00 | 42,750 | 4.50 | 3.8 | |||||||||
$ | 10.01 | - | $ | 23.00 | 20,459 | 20.08 | 2.6 | |||||||||
130,709 | $ | 5.60 | 6.4 | |||||||||||||
The following table provides detail for non-vested shares under the LTI Plan as of December 31, 2014: | ||||||||||||||||
Weighted | ||||||||||||||||
Average | ||||||||||||||||
Exercise | ||||||||||||||||
Options | Price | |||||||||||||||
Non-vested options December 31, 2013 | 15,000 | $ | 1.36 | |||||||||||||
Granted | 52,500 | 2.05 | ||||||||||||||
Vested | -5,000 | 1.36 | ||||||||||||||
Non-vested options December 31, 2014 | 62,500 | $ | 1.94 | |||||||||||||
Under the aforementioned LTI Plan, the Company is authorized to grant share-based incentive compensation awards for corporate performance to employees. These awards may be granted in form of shares of the Company’s common stock, performance-restricted restricted stock. The vesting of awards is contingent upon meeting certain return on asset and return on equity goals. The awards are not permitted to be transferred during the restricted time period from the date of the award and are subject to forfeiture to the extent that the performance restrictions are not satisfied. Awards are also forfeited if the employee terminates his or her service prior to the end of the restricted time period, unless such termination is in accordance with the Company’s mandatory retirement age. Vested awards are converted to shares of the Company’s common stock at the end of the restricted time period. The fair market value of each employee based award is estimated based on the fair market value of the Company’s common stock on the date of the grant and probable performance goals to be achieved and estimated forfeitures. If such goals are not met then no compensation cost would be recognized and any recognized compensation cost would be reversed. There were no shares of restricted stock outstanding at December 31, 2014. | ||||||||||||||||
EARNINGS_LOSS_PER_COMMON_SHARE
EARNINGS (LOSS) PER COMMON SHARE | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Income (Loss) Per Common Share [Abstract] | ||||||||||
Income (Loss) Per Common Share | Note 19. Earnings Per Common Share | |||||||||
The Company follows the provisions of FASB ASC Topic 260, “Earnings per Share” (“ASC Topic 260”). Basic earnings per share (“EPS”) excludes dilution and is computed by dividing income available to common shareholders by the weighted average common shares outstanding during the period. The Company has two classes of common stock currently outstanding. The classes are A and B, of which one share of Class B is convertible into 1.15 shares of Class A. Diluted EPS takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock using the treasury stock method. For the years ended December 31, 2014 and 2013, 170,239 and 197,836 options to purchase shares of common stock, respectively, were anti-dilutive in the computation of diluted EPS, as the exercise price exceeded average market price in each of those periods. Additionally warrants to purchase 1,368,040 shares of Class A common stock were also anti-dilutive. | ||||||||||
Basic and diluted EPS are calculated as follows: | ||||||||||
Year ended December 31, 2014 | ||||||||||
Income | Average shares | Per share | ||||||||
(In thousands, except for per share data) | (numerator) | (denominator) | Amount | |||||||
Basic EPS | ||||||||||
Income available to common shareholders | $ | 3,032 | 21,062 | $ | 0.14 | |||||
Diluted EPS | ||||||||||
Income available to common shareholders | $ | 3,032 | 21,070 | $ | 0.14 | |||||
Year ended December 31, 2013 | ||||||||||
Income | Average shares | Per share | ||||||||
(In thousands, except for per share data) | (numerator) | (denominator) | Amount | |||||||
Basic and Diluted EPS | ||||||||||
Loss available to common shareholders | $ | 34 | 13,279 | $ | 0.00 | |||||
COMPREHENSIVE_INCOME_LOSS
COMPREHENSIVE INCOME (LOSS) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Comprehensive Income (Loss) [Abstract] | |||||||||||
Comprehensive Income (Loss) Note [Text Block] | Note 20. Comprehensive Income (Loss) | ||||||||||
FASB ASC Topic 220, “Comprehensive Income” (“ASC Topic 220”), requires the reporting of all changes in equity during the reporting period except investments from and distributions to shareholders. Net income (loss) is a component of comprehensive income (loss) with all other components referred to in the aggregate as other comprehensive income. Unrealized gains and losses on AFS securities is an example of another comprehensive income (loss) component. | |||||||||||
Year ended December 31, 2014 | |||||||||||
Tax | |||||||||||
Before tax | expense | Net of tax | |||||||||
(In thousands) | amount | (benefit) | amount | ||||||||
Unrealized gains on investment securities: | |||||||||||
Unrealized holding gains arising during period | $ | 7,733 | $ | 2,598 | $ | 5,135 | |||||
Less adjustment for impaired investments | -41 | -14 | -27 | ||||||||
Less reclassification adjustment for gains | |||||||||||
realized in net income | 377 | 128 | 249 | ||||||||
Unrealized gains on investment securities | 7,397 | 2,484 | 4,913 | ||||||||
Unrecognized benefit obligation expense: | |||||||||||
Actuarial loss | -1,314 | — | -1,314 | ||||||||
Less reclassification adjustment for amortization | -218 | — | -218 | ||||||||
Unrecognized benefit obligation | -1,096 | — | -1,096 | ||||||||
Unrealized loss on derivative instrument | -187 | — | -187 | ||||||||
Other comprehensive income, net | $ | 6,114 | $ | 2,484 | $ | 3,630 | |||||
Year ended December 31, 2013 | |||||||||||
Tax | |||||||||||
Before tax | expense | Net of tax | |||||||||
(In thousands) | amount | (benefit) | amount | ||||||||
Unrealized losses on investment securities: | |||||||||||
Unrealized holding losses arising during period | $ | -10,291 | $ | -3,572 | $ | -6,719 | |||||
Less reclassification adjustment for gains | |||||||||||
realized in net loss | 158 | 54 | 104 | ||||||||
Unrealized losses on investment securities | -10,449 | -3,626 | -6,823 | ||||||||
Unrecognized benefit obligation expense: | |||||||||||
Actuarial gain | 950 | 323 | 627 | ||||||||
Less reclassification adjustment for amortization | -328 | -112 | -216 | ||||||||
Other comprehensive loss, net | $ | -9,171 | $ | -3,191 | $ | -5,980 | |||||
The other components of accumulated other comprehensive loss included in shareholders’ equity at December 31, 2014 and 2013 are as follows: | |||||||||||
0f | |||||||||||
As of December 31, | |||||||||||
(In thousands) | 2014 | 2013 | |||||||||
Unrecognized benefit obligation | $ | -4,025 | $ | -2,929 | |||||||
Unrealized gains (losses) on AFS investments | 1,720 | -3,193 | |||||||||
Unrealized loss on derivative instrument | -187 | - | |||||||||
Accumulated other comprehensive loss | $ | -2,492 | $ | -6,122 | |||||||
FAIR_VALUE_OF_FINANCIAL_INSTRU
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value of Financial Instruments [Abstract] | |||||||||||||||||
Fair Value of Financial Instruments | Note 21.Fair Value of Financial Instruments | ||||||||||||||||
Under FASB ASC Topic 820 “Fair Value Measurements and Disclosures” (“ASC Topic 820”), fair values are based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When available, management uses quoted market prices to determine fair value. If quoted prices are not available, fair value is based upon valuation techniques such as matrix pricing or other models that use, where possible, current market-based or independently sourced market parameters, such as interest rates. If observable market-based inputs are not available, the Company uses unobservable inputs to determine appropriate valuation adjustments using discounted cash flow methodologies. | |||||||||||||||||
Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective period end and have not been re-evaluated or updated for purposes of these financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each period-end. | |||||||||||||||||
ASC Topic 820 provides guidance for estimating fair value when the volume and level of activity for an asset or liability has significantly declined and for identifying circumstances when a transaction is not orderly. ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC Topic 820 are as follows: | |||||||||||||||||
Level 1: | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | ||||||||||||||||
Level 2: | Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability. Level 2 includes debt securities with quoted prices that are traded less frequently then exchange-traded instruments. Valuation techniques include matrix pricing which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices. | ||||||||||||||||
Level 3: | Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity). | ||||||||||||||||
A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company did not have transfers of financial instruments within the fair value hierarchy during the years ended December 31, 2014 and 2013. | |||||||||||||||||
Items Measured on a Recurring Basis | |||||||||||||||||
The Company’s available for sale investment securities are recorded at fair value on a recurring basis. | |||||||||||||||||
Fair value for Level 1 securities are determined by obtaining quoted market prices on nationally recognized securities exchanges. Level 1 securities include common stocks. | |||||||||||||||||
Level 2 securities include obligations of U.S. government-sponsored agencies and debt securities with quoted prices, which are traded less frequently than exchange-traded instruments, whose value is determined using matrix pricing with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. The prices were obtained from third party vendors. This category generally includes the Company’s mortgage-backed securities and CMOs issued by U.S. government and government-sponsored agencies, non-agency CMOs, and corporate and municipal bonds. Additionally, Level 2 includes derivative instruments whose valuations are based on observable market data. | |||||||||||||||||
Level 3 securities include investments in seven private equity funds which are predominantly invested in real estate. The value of the private equity funds are derived from the funds’ financials and K-1 filings. The Company also reviews the funds’ asset values and its near-term projections. | |||||||||||||||||
For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2014 and December 31, 2013 are as follows: | |||||||||||||||||
Fair Value Measurements Using: | |||||||||||||||||
Quoted Prices | |||||||||||||||||
in Active | Significant | ||||||||||||||||
Markets for | Other | Significant | |||||||||||||||
Identical | Observable | Unobservable | |||||||||||||||
As of December 31, 2014 | Assets | Inputs | Inputs | ||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||
Assets: | |||||||||||||||||
Investment securities available for sale | |||||||||||||||||
U.S. government agencies | $ | — | $ | 25,289 | $ | — | $ | 25,289 | |||||||||
Mortgage-backed securities-residential | — | 22,387 | — | 22,387 | |||||||||||||
Collateralized mortgage obligations: | |||||||||||||||||
Issued or guaranteed by U.S. government agencies | — | 168,977 | — | 168,977 | |||||||||||||
Non-agency | — | 3,731 | — | 3,731 | |||||||||||||
Corporate bonds | — | 15,727 | — | 15,727 | |||||||||||||
Municipal bonds | — | 10,173 | — | 10,173 | |||||||||||||
Other securities | — | — | 4,034 | 4,034 | |||||||||||||
Common stocks | 50 | — | — | 50 | |||||||||||||
Total investment securities available for sale | $ | 50 | $ | 246,284 | $ | 4,034 | $ | 250,368 | |||||||||
Liabilities: | |||||||||||||||||
Derivative instruments | |||||||||||||||||
Interest rate swaps | $ | — | $ | 187 | $ | — | $ | 187 | |||||||||
Fair Value Measurements Using: | |||||||||||||||||
Quoted Prices | |||||||||||||||||
in Active | Significant | ||||||||||||||||
Markets for | Other | Significant | |||||||||||||||
Identical | Observable | Unobservable | |||||||||||||||
As of December 31, 2013 | Assets | Inputs | Inputs | ||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||
Investment securities available for sale | |||||||||||||||||
U.S. government agencies | $ | — | $ | 62,036 | $ | — | $ | 62,036 | |||||||||
Mortgage-backed securities-residential | — | 32,097 | — | 32,097 | |||||||||||||
Collateralized mortgage obligations: | |||||||||||||||||
Issued or guaranteed by U.S. government agencies | — | 189,103 | — | 189,103 | |||||||||||||
Non-agency | — | 4,479 | — | 4,479 | |||||||||||||
Corporate bonds | — | 9,438 | — | 9,438 | |||||||||||||
Municipal bonds | — | 6,900 | — | 6,900 | |||||||||||||
Other securities | — | — | 4,625 | 4,625 | |||||||||||||
Common stocks | 49 | — | — | 49 | |||||||||||||
Total investment securities available for sale | $ | 49 | $ | 304,053 | $ | 4,625 | $ | 308,727 | |||||||||
The following tables present additional information about assets measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value for the year ended December 31, 2014 and 2013: | |||||||||||||||||
(In thousands) | Other securities | ||||||||||||||||
Investment Securities Available for Sale | 2014 | 2013 | |||||||||||||||
Beginning balance January 1, | $ | 4,625 | $ | 4,164 | |||||||||||||
Total gains/(losses) - (realized/unrealized): | |||||||||||||||||
Included in earnings | 255 | 94 | |||||||||||||||
Included in other comprehensive income | 88 | 850 | |||||||||||||||
Purchases | 14 | 70 | |||||||||||||||
Sales and calls | -948 | -553 | |||||||||||||||
Transfers in and/or out of Level 3 | — | — | |||||||||||||||
Ending balance December 31, | $ | 4,034 | $ | 4,625 | |||||||||||||
Items Measured on a Nonrecurring Basis | |||||||||||||||||
Non-accrual loans and TDRs are evaluated for impairment on an individual basis under FASB ASC Topic 310 “Receivables”. The impairment analysis includes current collateral values, known relevant factors that may affect loan collectability, and risks inherent in different kinds of lending. When the collateral value or discounted cash flows less costs to sell is less than the carrying value of the loan a specific reserve (valuation allowance) is established. Loans held for sale are carried at the lower of cost or fair value. OREO is carried at the lower of cost or fair value. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the real estate. Additionally, for collateral acquired from tax liens, fair value may be established using brokers opinions due to their lower carrying value. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements. | |||||||||||||||||
For financial assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2014 and December 31, 2013 are as follows: | |||||||||||||||||
Fair Value Measurements Using: | |||||||||||||||||
Quoted Prices | |||||||||||||||||
in Active | Significant | ||||||||||||||||
Markets for | Other | Significant | |||||||||||||||
Identical | Observable | Unobservable | |||||||||||||||
As of December 31, 2014 | Assets | Inputs | Inputs | ||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||
Assets | |||||||||||||||||
Impaired loans and leases | $ | — | $ | — | $ | 2,812 | $ | 2,812 | |||||||||
Other real estate owned | — | — | 3,418 | 3,418 | |||||||||||||
Fair Value Measurements Using: | |||||||||||||||||
Quoted Prices | |||||||||||||||||
in Active | Significant | ||||||||||||||||
Markets for | Other | Significant | |||||||||||||||
Identical | Observable | Unobservable | |||||||||||||||
As of December 31, 2013 | Assets | Inputs | Inputs | ||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||
Assets | |||||||||||||||||
Impaired loans and leases | $ | — | $ | — | $ | 4,073 | $ | 4,073 | |||||||||
Other real estate owned | — | — | 9,182 | 9,182 | |||||||||||||
Loans and leases held for sale | — | — | 1,446 | 1,446 | |||||||||||||
The following tables present additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine fair value at December 31, 2014 and December 31, 2013: | |||||||||||||||||
Qualitative Information about Level 3 Fair Value Measurements | |||||||||||||||||
As of December 31, 2014 | Valuation | Range | |||||||||||||||
(In thousands) | Fair Value | Techniques | Unobservable Input | (Weighted Average) | |||||||||||||
Impaired loans and leases | $ | 2,812 | Appraisal of | Appraisal adjustments | 0.0% | - | -20.00% | (-20.0%) | |||||||||
collateral (1) | Liquidation expenses | 0.0% | - | -24.00% | (-7.8%) | ||||||||||||
Other real estate owned | 3,418 | Appraisal of | Appraisal adjustments | 0.0% | - | -68.60% | (-14.5%) | ||||||||||
collateral (1) | Liquidation expenses | -14.70% | (-14.7%) | ||||||||||||||
Qualitative Information about Level 3 Fair Value Measurements | |||||||||||||||||
As of December 31, 2013 | Valuation | Range | |||||||||||||||
(In thousands) | Fair Value | Techniques | Unobservable Input | (Weighted Average) | |||||||||||||
Impaired loans and leases | $ | 4,073 | Appraisal of | Appraisal adjustments | 0.0% | - | -25.00% | (-2.0%) | |||||||||
collateral (1) | Liquidation expenses | 0.0% | - | -23.20% | (-6.7%) | ||||||||||||
Other real estate owned | 9,182 | Appraisal of | Appraisal adjustments | 0.0% | - | -62.50% | (-11.2%) | ||||||||||
collateral (1) | Liquidation expenses | -2.80% | - | -6.80% | (-5.0%) | ||||||||||||
Loans and leases held for sale | 1,446 | Appraisal of | Agreement of sale | 0.0% | |||||||||||||
collateral (1) | |||||||||||||||||
-1 | Appraisals may be adjusted for qualitative factors such as interior condition of the property and liquidation expenses. | ||||||||||||||||
The following methods and assumptions were used to estimate the fair values of the Company’s financial instruments at December 31, 2014 and December 31, 2013. The following information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Company’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful. The methodologies for estimating the fair value of financial instruments that are measured on a recurring or nonrecurring basis are discussed above. | |||||||||||||||||
Cash and cash equivalents (carried at cost): | |||||||||||||||||
The carrying amounts reported in the balance sheet for cash and short-term instruments approximate those assets’ fair values. | |||||||||||||||||
Securities: | |||||||||||||||||
Management uses quoted market prices to determine fair value of securities (level 1). If quoted prices are not available, fair value is based upon valuation techniques such as matrix pricing or other models that use, where possible, current market-based or independently sourced market parameters, such as interest rates (level 2). If observable market-based inputs are not available, the Company uses unobservable inputs to determine appropriate valuation adjustments by reviewing the private equities funds’ financials and K-1 filings (level 3). | |||||||||||||||||
Other Investment (carried at cost): | |||||||||||||||||
This investment includes the Solomon Hess SBA Loan Fund, which the Company invested in to partially satisfy its community reinvestment requirement. Shares in this fund are not publicly traded and therefore have no readily determinable fair market value. An investor can have their investment in the Fund redeemed for the balance of their capital account at any quarter end with 60 days notice to the Fund. The investment in this Fund is recorded at cost. The Company does not record this investment at fair value on a recurring basis, as this investment’s carrying amount approximates fair value. | |||||||||||||||||
Restricted investment in bank stock (carried at cost): | |||||||||||||||||
The carrying amount of restricted investment in bank stock approximates fair value, and considers the limited marketability of such securities. | |||||||||||||||||
Loans held for sale (carried at lower of cost or fair value): | |||||||||||||||||
The fair values of loans held for sale are based upon appraised values of the collateral less costs to sell, management’s estimation of the value of the collateral or expected net sales proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements. | |||||||||||||||||
Loans receivable (carried at cost): | |||||||||||||||||
The fair values of loans are estimated using discounted cash flow analyses, using market rates at the balance sheet date that reflect the credit and interest rate-risk inherent in the loans. Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal. Generally, for variable rate loans that re-price frequently and with no significant change in credit risk, fair values are based on carrying values. | |||||||||||||||||
Impaired loans (generally carried at fair value): | |||||||||||||||||
Impaired loans are accounted for under ASC Topic 310. Impaired loans are those in which the Company has measured impairment generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based on the expected proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements. | |||||||||||||||||
Accrued interest receivable and payable (carried at cost): | |||||||||||||||||
The carrying amount of accrued interest receivable and accrued interest payable approximates its fair value. | |||||||||||||||||
Deposit liabilities (carried at cost): | |||||||||||||||||
The fair values disclosed for demand deposits (e.g., interest and noninterest checking, passbook savings and money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits. | |||||||||||||||||
Short-term borrowings (carried at cost): | |||||||||||||||||
The carrying amounts of short-term borrowings approximate their fair values. | |||||||||||||||||
Long-term debt (carried at cost): | |||||||||||||||||
Fair values of FHLB advances and other long-term borrowings are estimated using discounted cash flow analysis, based on quoted prices for new FHLB advances with similar credit risk characteristics, terms and remaining maturity. These prices obtained from this active market represent a market value that is deemed to represent the transfer price if the liability were assumed by a third party. | |||||||||||||||||
Subordinated debt (carried at cost): | |||||||||||||||||
Fair values of junior subordinated debt are estimated using discounted cash flow analysis, based on market rates currently offered on such debt with similar credit risk characteristics, terms and remaining maturity. | |||||||||||||||||
Derivative instruments: | |||||||||||||||||
The Company has contracted with a third party vendor to provide periodic valuations for its interest rate derivatives to determine the fair value of its interest rate swaps. The vendor utilizes standard valuation methodologies applicable to interest rate derivatives such as discounted cash flow analysis and extensions of the Black-Scholes model. Such valuations are based upon readily observable market data and are therefore considered Level 2 valuations by the Company. | |||||||||||||||||
Off-balance sheet financial instruments (disclosed at cost): | |||||||||||||||||
Fair values for the Company’s off-balance sheet financial instruments (lending commitments and letters of credit) are based on fees currently charged in the market to enter into similar agreements, taking into account, the remaining terms of the agreements and the counterparties’ credit standing. They are not shown in the table because the amounts are immaterial. | |||||||||||||||||
The tables below indicate the fair value of the Company’s financial instruments at December 31, 2014 and December 31, 2013. | |||||||||||||||||
Fair Value Measurements | |||||||||||||||||
At December 31, 2014 | |||||||||||||||||
Quoted Prices | |||||||||||||||||
in Active | Significant | ||||||||||||||||
Markets for | Other | Significant | |||||||||||||||
Identical | Observable | Unobservable | |||||||||||||||
Carrying | Estimated | Assets | Inputs | Inputs | |||||||||||||
(In thousands) | amount | fair value | Level 1 | Level 2 | Level 3 | ||||||||||||
Financial Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 30,790 | $ | 30,790 | $ | 30,790 | $ | — | $ | — | |||||||
Investment securities available for sale | 250,368 | 250,368 | 50 | 246,284 | 4,034 | ||||||||||||
Other investment | 2,250 | 2,250 | — | — | 2,250 | ||||||||||||
Federal Home Loan Bank stock | 2,622 | 2,622 | — | — | 2,622 | ||||||||||||
Loans, net | 403,424 | 400,979 | — | — | 400,979 | ||||||||||||
Accrued interest receivable | 5,270 | 5,270 | — | 5,270 | — | ||||||||||||
Financial Liabilities: | |||||||||||||||||
Demand deposits | 73,665 | 73,665 | — | 73,665 | — | ||||||||||||
NOW and money markets | 212,739 | 212,739 | — | 212,739 | — | ||||||||||||
Savings | 18,721 | 18,721 | — | 18,721 | — | ||||||||||||
Time deposits | 225,300 | 223,788 | — | 223,788 | — | ||||||||||||
Long-term borrowings | 92,426 | 90,022 | — | 90,022 | — | ||||||||||||
Subordinated debt | 25,774 | 25,091 | — | 25,091 | — | ||||||||||||
Accrued interest payable | 726 | 726 | — | 726 | — | ||||||||||||
Derivative Instruments: | |||||||||||||||||
Interest rate swaps | 187 | 187 | — | 187 | — | ||||||||||||
Fair Value Measurements | |||||||||||||||||
At December 31, 2013 | |||||||||||||||||
Quoted Prices | |||||||||||||||||
in Active | Significant | ||||||||||||||||
Markets for | Other | Significant | |||||||||||||||
Identical | Observable | Unobservable | |||||||||||||||
Carrying | Estimated | Assets | Inputs | Inputs | |||||||||||||
(In thousands) | amount | fair value | Level 1 | Level 2 | Level 3 | ||||||||||||
Financial Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 16,844 | $ | 16,844 | $ | 16,844 | $ | — | $ | — | |||||||
Investment securities available for sale | 308,727 | 308,727 | 49 | 304,053 | 4,625 | ||||||||||||
Other investment | 2,250 | 2,250 | — | — | 2,250 | ||||||||||||
Federal Home Loan Bank stock | 4,204 | 4,204 | — | — | 4,204 | ||||||||||||
Loans held for sale | 1,446 | 1,446 | — | — | 1,446 | ||||||||||||
Loans, net | 352,810 | 349,336 | — | — | 349,336 | ||||||||||||
Accrued interest receivable | 7,054 | 7,054 | — | 7,054 | — | ||||||||||||
Financial Liabilities: | |||||||||||||||||
Demand deposits | 60,473 | 60,473 | — | 60,473 | — | ||||||||||||
NOW and money markets | 210,053 | 210,053 | — | 210,053 | — | ||||||||||||
Savings | 17,593 | 17,593 | — | 17,593 | — | ||||||||||||
Time deposits | 240,845 | 239,102 | — | 239,102 | — | ||||||||||||
Short-term borrowings | 10,000 | 10,000 | 10,000 | — | — | ||||||||||||
Long-term borrowings | 97,881 | 94,896 | — | 94,896 | — | ||||||||||||
Subordinated debt | 25,774 | 26,000 | — | 26,000 | — | ||||||||||||
Accrued interest payable | 965 | 965 | — | 965 | — | ||||||||||||
Limitations | |||||||||||||||||
The fair value estimates are made at a discrete point in time based on relevant market information and information about the financial instruments. Fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. | |||||||||||||||||
These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Further, the foregoing estimates may not reflect the actual amount that could be realized if all or substantially all of the financial instruments were offered for sale. This is due to the fact that no market exists for a sizable portion of the loan, deposit and off balance sheet instruments. | |||||||||||||||||
In addition, the fair value estimates are based on existing on-and-off balance sheet financial instruments without attempting to value anticipated future business and the value of assets and liabilities that are not considered financial instruments. Other significant assets that are not considered financial assets include premises and equipment. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates. | |||||||||||||||||
Finally, reasonable comparability between financial institutions may not be likely due to the wide range of permitted valuation techniques and numerous estimates which must be made given the absence of active secondary markets for many of the financial instruments. This lack of uniform valuation methodologies introduces a greater degree of subjectivity to these estimated fair values. | |||||||||||||||||
SEGMENT_INFORMATION
SEGMENT INFORMATION | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Segment Information [Abstract] | |||||||||||
Segment Information | Note 22.Segment Information | ||||||||||
FASB ASC Topic 280, “Segment Reporting” (“ASC Topic 280”) established standards for public business enterprises to report information about operating segments in their annual financial statements and requires that those enterprises report selected information about operating segments in subsequent interim financial reports issued to shareholders. It also established standards for related disclosure about products and services, geographic areas, and major customers. Operating segments are components of an enterprise, which are evaluated regularly by the chief operating decision makers in deciding how to allocate and assess resources and performance. The Company’s chief operating decision makers are the CEO and the CFO. The Company has identified its reportable operating segments as “Community Banking” and “Tax Liens”. | |||||||||||
Community banking | |||||||||||
The Company’s community banking segment which includes Royal Bank consists of commercial and retail banking and equipment leasing. The community banking business segment is managed as a single strategic unit which generates revenue from a variety of products and services provided by Royal Bank and Royal Bank Leasing. For example, commercial lending is dependent upon the ability of Royal Bank to fund cash needed to make loans with retail deposits and other borrowings and to manage interest rate and credit risk. | |||||||||||
Tax liens | |||||||||||
At December 31, 2014, Royal Bank’s tax liens segment includes its 80% and 100% ownership interest in CSC and RTL, respectively. Prior to December 31, 2013, Royal Bank’s ownership interest in CSC and RTL was 60%. The Company’s tax liens segment consisted of purchasing delinquent tax certificates from local municipalities at auction and then processing those liens to either encourage the property holder to pay off the lien, or to foreclose and sell the property. The tax liens segment earns income based on interest rates (determined at auction) and penalties assigned by the municipality along with gains on sale of foreclosed properties. CSC is liquidating its assets under an orderly, long term plan. RTL ceased acquiring tax certificates at public auctions in 2010. | |||||||||||
The following table presents selected financial information for reportable business segments for the years ended December 31, 2014 and 2013. | |||||||||||
Year ended December 31, 2014 | |||||||||||
Community | |||||||||||
(In thousands) | Banking | Tax Liens | Consolidated | ||||||||
Total assets | $ | 712,508 | $ | 20,045 | $ | 732,553 | |||||
Total deposits | $ | 530,425 | $ | — | $ | 530,425 | |||||
Interest income | $ | 27,484 | $ | 1,300 | $ | 28,784 | |||||
Interest expense | 5,401 | 1,083 | 6,484 | ||||||||
Net interest income | $ | 22,083 | $ | 217 | $ | 22,300 | |||||
(Credit) provision for loan and lease losses | -1,328 | 461 | -867 | ||||||||
Total non-interest income | 2,639 | 896 | 3,535 | ||||||||
Total non-interest expense | 19,785 | 2,079 | 21,864 | ||||||||
Income tax benefit | -654 | — | -654 | ||||||||
Net income (loss) | $ | 6,919 | $ | -1,427 | $ | 5,492 | |||||
Noncontrolling interest | $ | 548 | $ | -166 | $ | 382 | |||||
Net income (loss) attributable to Royal Bancshares | $ | 6,371 | $ | -1,261 | $ | 5,110 | |||||
Year ended December 31, 2013 | |||||||||||
Community | |||||||||||
(In thousands) | Banking | Tax Liens | Consolidated | ||||||||
Total assets | $ | 706,026 | $ | 26,228 | $ | 732,254 | |||||
Total deposits | $ | 528,964 | $ | — | $ | 528,964 | |||||
Interest income | $ | 25,097 | $ | 2,427 | $ | 27,524 | |||||
Interest expense | 5,899 | 1,458 | 7,357 | ||||||||
Net interest income | $ | 19,198 | $ | 969 | $ | 20,167 | |||||
(Credit) provision for loan and lease losses | -1,459 | 587 | -872 | ||||||||
Total non-interest income | 5,476 | 1,388 | 6,864 | ||||||||
Total non-interest expense | 21,959 | 4,371 | 26,330 | ||||||||
Income tax expense | 42 | — | 42 | ||||||||
Net income (loss) | $ | 4,132 | $ | -2,601 | $ | 1,531 | |||||
Noncontrolling interest | $ | 462 | $ | -1,040 | $ | -578 | |||||
Net income (loss) attributable to Royal Bancshares | $ | 3,670 | $ | -1,561 | $ | 2,109 | |||||
Interest income earned by the community banking segment related to the tax liens segment was approximately $1.1 million and $1.5 million for the year ended December 31, 2014 and 2013, respectively. | |||||||||||
CONDENSED_FINANCIAL_INFORMATIO
CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY [Abstract] | |||||||
CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY | NOTE 23. CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY | ||||||
Condensed financial information for the parent company only follows. | |||||||
CONDENSED BALANCE SHEETS | |||||||
As of December 31, | |||||||
(In thousands) | 2014 | 2013 | |||||
Assets | |||||||
Cash | $ | 6,260 | $ | 1,333 | |||
Investment in non-bank subsidiaries | 31,027 | 29,795 | |||||
Investment in Royal Bank | 50,834 | 42,165 | |||||
Other assets | 10 | 15 | |||||
Total assets | $ | 88,131 | $ | 73,308 | |||
Subordinated debentures | 25,774 | 25,774 | |||||
Other liabilities | 138 | — | |||||
Stockholders' equity | 62,219 | 47,534 | |||||
Total liabilities and stockholders' equity | $ | 88,131 | $ | 73,308 | |||
CONDENSED STATEMENTS OF INCOME | |||||||
For the years ended December 31, | |||||||
(In thousands) | 2014 | 2013 | |||||
Income | |||||||
Other income | $ | 19 | $ | 25 | |||
Total Income | 19 | 25 | |||||
Expenses | |||||||
Other expenses | 281 | 499 | |||||
Interest on subordinated debentures | 623 | 809 | |||||
Total Expenses | 904 | 1,308 | |||||
Loss before income taxes and equity in undistributed net loss | -885 | -1,283 | |||||
Equity in undistributed net income | 5,995 | 3,392 | |||||
Net income | $ | 5,110 | $ | 2,109 | |||
CONDENSED STATEMENTS OF CASH FLOWS | |||||||
For the years ended December 31, | |||||||
(In thousands) | 2014 | 2013 | |||||
Cash flows from operating activities | |||||||
Net income | $ | 5,110 | $ | 2,109 | |||
Adjustments to reconcile net income to net cash used in operating activities: | |||||||
Undistributed losses from subsidiaries | -5,995 | -3,392 | |||||
Interest on subordinated debentures | -623 | -2,419 | |||||
Net cash used in operating activities | -1,508 | -3,702 | |||||
Net cash provided by investing activities | — | — | |||||
Cash flows from financing activities | |||||||
Issuance of common stock | 19,794 | — | |||||
Redemption of preferred stock | -13,943 | — | |||||
Other, net | 584 | 296 | |||||
Net cash provided by financing activities | 6,435 | 296 | |||||
Net increase (decrease) in cash and cash equivalents | 4,927 | -3,406 | |||||
Cash and cash equivalents at beginning of period | 1,333 | 4,739 | |||||
Cash and cash equivalents at end of period | $ | 6,260 | $ | 1,333 | |||
SUMMARY_OF_QUARTERLY_RESULTS
SUMMARY OF QUARTERLY RESULTS | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
SUMMARY OF QUARTERLY RESULTS (UNAUDITED) [Abstract] | |||||||||||||
SUMMARY OF QUARTERLY RESULTS (UNAUDITED) | NOTE 24. SUMMARY OF QUARTERLY RESULTS (UNAUDITED) | ||||||||||||
The following summarizes the consolidated results of operations during 2014 and 2013, on a quarterly basis, for the Company: | |||||||||||||
For the year ended December 31, 2014 | |||||||||||||
(In thousands, except per share data) | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||
Interest income | $ | 7,233 | $ | 7,191 | $ | 7,209 | $ | 7,151 | |||||
Interest expense | 1,614 | 1,623 | 1,622 | 1,625 | |||||||||
Net interest income | 5,619 | 5,568 | 5,587 | 5,526 | |||||||||
Credit for loan and lease losses | -102 | -51 | -75 | -639 | |||||||||
Net interest income after provision | 5,721 | 5,619 | 5,662 | 6,165 | |||||||||
Other income | 743 | 1,204 | 816 | 772 | |||||||||
Other expenses | 6,136 | 5,375 | 5,031 | 5,322 | |||||||||
Income before income tax | 328 | 1,448 | 1,447 | 1,615 | |||||||||
Income tax benefit | -654 | - | - | - | |||||||||
Net income | $ | 982 | $ | 1,448 | $ | 1,447 | $ | 1,615 | |||||
Less net income attributable to noncontrolling interest | 171 | 25 | 69 | 117 | |||||||||
Net income attributable to Royal Bancshares of Pennsylvania, Inc. | $ | 811 | $ | 1,423 | $ | 1,378 | $ | 1,498 | |||||
Net income available to common shareholders | $ | 378 | $ | 1,271 | $ | 549 | $ | 834 | |||||
Net income per common share | |||||||||||||
Basic and diluted | $ | 0.01 | $ | 0.05 | $ | 0.04 | $ | 0.06 | |||||
The sum of the 2014 quarterly amounts for basic and diluted earnings per share do not equal the total earnings per share for 2014 due to 16.7 million shares of common stock issued in the third quarter of 2014. | |||||||||||||
For the year ended December 31, 2013 | |||||||||||||
(In thousands, except per share data) | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||
Interest income | $ | 7,069 | $ | 6,960 | $ | 6,743 | $ | 6,752 | |||||
Interest expense | 1,690 | 1,890 | 1,797 | 1,980 | |||||||||
Net interest income | 5,379 | 5,070 | 4,946 | 4,772 | |||||||||
(Credit) provision for loan and lease losses | -676 | 218 | -163 | -251 | |||||||||
Net interest income after provision | 6,055 | 4,852 | 5,109 | 5,023 | |||||||||
Other income | 2,558 | 1,937 | 961 | 1,408 | |||||||||
Other expenses | 6,333 | 6,290 | 7,567 | 6,140 | |||||||||
Income (loss) before income tax | 2,280 | 499 | -1,497 | 291 | |||||||||
Income tax expense | 42 | - | - | - | |||||||||
Net income (loss) | $ | 2,238 | $ | 499 | $ | -1,497 | $ | 291 | |||||
Less net (loss) income attributable to noncontrolling interest | -214 | 157 | -694 | 173 | |||||||||
Net income attributable to Royal Bancshares of Pennsylvania, Inc. | $ | 2,452 | $ | 342 | $ | -803 | $ | 118 | |||||
Net income (loss) available to common shareholders | $ | 1,930 | $ | -178 | $ | -1,321 | $ | -397 | |||||
Net income (loss) per common share | |||||||||||||
Basic and diluted | $ | 0.14 | $ | -0.01 | $ | -0.1 | $ | -0.03 | |||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Summary of Significant Accounting Policies [Abstract] | |
Principles of consolidation | Principles of Consolidation |
The accompanying unaudited consolidated financial statements include the accounts of Royal Bancshares of Pennsylvania, Inc. (“Royal Bancshares” or the “Company”) and its wholly-owned subsidiaries, Royal Investments of Delaware, Inc., including Royal Investments of Delaware, Inc.’s wholly owned subsidiary, Royal Preferred, LLC, and Royal Bank America (“Royal Bank”), including Royal Bank’s subsidiaries, Royal Real Estate of Pennsylvania, Inc., Royal Investments America, LLC, RBA Property LLC, Narberth Property Acquisition LLC, Rio Marina LLC, and Royal Tax Lien Services, LLC (“RTL”). Royal Bank also has an 80% and 60% ownership interest in Crusader Servicing Corporation (“CSC”) and Royal Bank America Leasing, LP, respectively. Prior to December 31, 2013, Royal Bank’s ownership interest in CSC and RTL was 60%. Effective December 31, 2013, Royal Bank acquired the ownership interest of the former President of CSC and RTL. The two Delaware trusts, Royal Bancshares Capital Trust I and Royal Bancshares Capital Trust II are not consolidated per requirements under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, “Consolidation” (“ASC Topic 810”). These consolidated financial statements reflect the historical information of the Company. All significant intercompany transactions and balances have been eliminated in consolidation. | |
Use of Estimates | Use of Estimates |
In preparing the consolidated financial statements in accordance with United States generally accepted accounting principles (“U.S. GAAP”), management is required to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. These estimates and assumptions are based on information available as of the date of the consolidated financial statements; therefore, actual results could differ from those estimates. | |
The principal estimates that are particularly susceptible to significant change in the near term relate to the allowance for loan and lease losses, the valuation of other real estate owned, the valuation of deferred tax assets, other-than-temporary impairment losses on investment securities, net periodic pension costs and the pension benefit obligation. In connection with the allowance for loan and lease losses estimate, management obtains independent appraisals for real estate collateral. However, future changes in real estate market conditions and the economy could affect the Company’s allowance for loan and lease losses. In addition, regulatory agencies, as an integral part of their examination process, periodically review the credit portfolio and the allowance. Such review may result in additional provisions based on their judgment of information available at the time of each examination. | |
Significant Concentration of Credit Risk | Significant Concentration of Credit Risk |
Credit risk is one of the Company’s most significant risks. It is critical for consistent profitability that the Company effectively manages credit risk. Most of the Company’s activities are with customers located within the Mid-Atlantic region of the country. “Note 3 – Investment Securities” to the Consolidated Financial Statements discusses the types of securities in which the Company invests. “Note 4 – Loans and Leases” to the Consolidated Financial Statements discusses the types of lending in which the Company engages. The Company does not have any portion of its business dependent on a single or limited number of customers, the loss of which would have a material adverse effect on its business. The Company has 87% of its investment portfolio in securities issued by government sponsored entities. The Company’s tax certificate and other real estate owned portfolios have a geographic concentration in the State of New Jersey. | |
No substantial portion of loans is concentrated within a single industry or group of related industries, except a significant majority of loans are secured by real estate. There are numerous risks associated with commercial and consumer lending that could impact the borrower’s ability to repay on a timely basis. They include, but are not limited to: the owner’s business expertise, changes in local, national, and in some cases international economies, competition, governmental regulation, and the general financial stability of the borrowing entity. The Company’s commercial real estate, commercial and industrial and construction and land development loans comprised 42%, 18% and 11%, respectively, of the loan portfolio. | |
The Company attempts to mitigate these risks through conservative underwriting policies and procedures which include an analysis of the borrower’s business and industry history, its financial position, as well as that of the business owner. The Company will also require the borrower to provide current financial information on the operation of the business periodically over the life of the loan. In addition, most commercial loans are secured by assets of the business or those of the business owner, which can be liquidated if the borrower defaults, along with the personal surety of the business owner. | |
U.S. GAAP RAP Difference | U.S. GAAP RAP Difference |
In connection with a prior bank regulatory examination, the Federal Deposit Insurance Company (“FDIC”) concluded, based upon its interpretation of the Consolidated Reports of Condition and Income (the “Call Report”) instructions and under regulatory accounting principles (“RAP”), that income from Royal Bank’s tax lien business should be recognized on a cash basis, not an accrual basis. Royal Bank’s current accrual method is in accordance with U.S. GAAP. Royal Bank disagrees with the FDIC’s conclusion and filed the Call Report for December 31, 2014 and the previous 17 quarters in accordance with U.S. GAAP. However, the change in the manner of revenue recognition for the tax lien business for regulatory accounting purposes affects Royal Bank’s and potentially the Company’s capital ratios as disclosed in “Note 2 - Regulatory Matters and Significant Risks And Uncertainties” and “Note 16 - Regulatory Capital Requirements” to the Consolidated Financial Statements. The resolution of this matter will be decided by additional joint regulatory agency guidance which includes the Federal Reserve Bank, the FDIC, and the Office of the Comptroller of the Currency (“OCC”). | |
Reclassifications | Reclassifications |
Certain items in the 2013 consolidated financial statements and accompanying notes have been reclassified to conform to the current year’s presentation format. There was no effect on net income or net loss for the periods presented herein as a result of the reclassification. | |
Cash and Cash Equivalents. | Cash and Cash Equivalents |
For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, interest-bearing deposits and federal funds sold. Generally, federal funds are purchased and sold for one-day periods. | |
Investment Securities | Investment Securities |
Management determines the appropriate classification of debt securities at the time of purchase and re-evaluates such designation as of each balance sheet date. Investments in debt securities that the Company has the positive intent and ability to hold to maturity are classified as held to maturity securities and reported at amortized cost. Debt and equity securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and reported at fair value, with unrealized holding gains and losses included in earnings. Debt and equity securities not classified as trading securities, nor as held to maturity securities, are classified as available for sale securities and reported at fair value, with unrealized holding gains or losses, net of deferred income taxes (when applicable), reported in the accumulated other comprehensive income (loss) (“AOCI”) component of shareholders’ equity. The Company did not hold trading securities nor had securities classified as held to maturity at December 31, 2014 and 2013. Discounts and premiums are accreted/amortized to income by use of the level-yield method. Gain or loss on sales of securities available for sale is based on the specific identification method. | |
The Company evaluates declines in the fair value of securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis. The term “other-than-temporary” is not intended to indicate that the decline is permanent, but indicates that the prospects for a near-term recovery of value is not necessarily favorable, or that there is a lack of evidence to support a realizable value equal to or greater than the carrying value of the investment. All investment securities are evaluated for OTTI under FASB ASC Topic 320, “Investments-Debt & Equity Securities” (“ASC Topic 320”). In determining whether OTTI exists, management considers numerous factors, including but not limited to: (1) the length of time and the extent to which the fair value is less than the amortized cost, (2) the Company’s intent to hold or sell the security, (3) the financial condition and results of the issuer including changes in capital, (4) the credit rating of the issuer, (5) analysts’ earnings estimate, (6) industry trends specific to the security, and (7) timing of debt maturity and status of debt payments. | |
Other Investment | Under ASC Topic 320, OTTI is considered to have occurred with respect to debt securities (1) if an entity intends to sell the security; (2) if it is more likely than not an entity will be required to sell the security before recovery of its amortized cost basis; or (3) the present value of the expected cash flows is not sufficient to recover the entire amortized cost basis. Once a decline in value for a debt security is determined to be other-than-temporary, the other-than-temporary impairment is separated into (a) the amount of the total OTTI related to a decrease in cash flows expected to be collected from the debt security (the credit loss) and (b) the amount of the total OTTI related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings. The amount of the total OTTI related to all other factors is recognized in other comprehensive income. In determining the Company’s intent not to sell and whether it is more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, management considers the following factors: current liquidity and availability of other non-pledged assets that permits the investment to be held for an extended period of time but not necessarily until maturity, capital planning, and any specific asset liability committee goals or guidelines related to the disposition of specific investments. |
Other Investment | |
This investment includes the Solomon Hess SBA Loan Fund, which the Company invested in to partially satisfy its community reinvestment requirement. Shares in this fund are not publicly traded and therefore have no readily determinable fair market value. An investor can have their investment in the Fund redeemed for the balance of their capital account at any quarter end with a 60-day notice to the Fund. The investment in this Fund is recorded at cost. | |
Federal Home Loan Bank Stock | Federal Home Loan Bank Stock |
As a member of the Federal Home Loan Bank of Pittsburgh (“FHLB”), the Company is required to purchase and hold stock in the FHLB to satisfy membership and borrowing requirements. The stock can only be sold to the FHLB or to another member institution, and all sales of FHLB stock must be at par. As a result of these restrictions, there is no active market for the FHLB stock. As of December 31, 2014 and 2013, FHLB stock totaled $2.6 million and $4.2 million, respectively. | |
FHLB stock is held as a long-term investment and its value is determined based on the ultimate recoverability of the par value. The Company evaluates impairment quarterly. The decision of whether impairment exists is a matter of judgment that reflects management’s view of the FHLB’s long-term performance, which includes factors such as the following: (1) its operating performance, (2) the severity and duration of declines in the fair value of its net assets related to its capital stock amount, (3) its liquidity position, and (4) the impact of legislative and regulatory changes on the FHLB. Based on the capital adequacy and the liquidity position of the FHLB, management believes that the par value of its investment in FHLB stock will be realized. Accordingly, there is no other-than-temporary impairment related to the carrying amount of the Company’s FHLB stock as of December 31, 2014. | |
Loans Held for sale | Loans Held for Sale |
At December 31, 2014, the Company did not have any loans classified as loans held for sale (“LHFS”). Generally, loans are transferred from loans held for investment (“LHFI”) to LHFS at fair market value using expected net sales proceeds or collateral values when there is an intent to sell. Gains or losses on the sale of LHFS are recorded in non-interest income. Generally any subsequent credit losses on LHFS are recorded as a component of non-interest expense. At December 31, 2013, LHFS were comprised of three loans totaling $1.4 million. | |
Loans and Leases | Loans and Leases |
The Company originates commercial and real estate loans, including construction and land development loans primarily in the greater Philadelphia metropolitan area as well as selected locations throughout the mid-Atlantic region. The Company also has participated with other financial institutions in selected construction and land development loans outside our geographic area. Loans and leases are classified as LHFI when management has the intent and ability to hold the loan or lease for the foreseeable future or until maturity or payoff. LHFI are stated at their outstanding unpaid principal balances, net of an allowance for loan and leases losses and any deferred fees or costs. The Company utilizes the effective yield interest method for recognizing interest income as required by ASC Subtopic 20, “Nonrefundable Fees and Other Costs” (“ASC Subtopic 20”) under FASB ASC Topic 310, “Receivables” (“ASC Topic 310”). ASC Subtopic 20 also guides our accounting for nonrefundable fees and costs associated with lending activities such as discounts, premiums, and loan origination fees. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the yield (interest income) of the related loans. The Company is generally amortizing these amounts over the contractual life of the loan. For loan modifications, any unamortized net fees or costs and any prepayment penalties from the original loan shall be recognized in interest income when the new loan is granted. | |
The Company has a concentration of credit risk in commercial real estate and construction and land development loans at December 31, 2014. The Company originates mainly small business, commercial real estate, middle market business and consumer loans. Additionally, after thorough due diligence, the Company has purchased small residential loan pools. A substantial portion of its debtors’ ability to honor their contracts is dependent upon the housing sector specifically and the economy in general. | |
The loans receivable portfolio is segmented into commercial loans, construction and development loans, residential loans, leases, tax certificates, and consumer loans. The commercial loan segment consists of the following classes: commercial real estate loans, multi-family real estate loans, and other commercial loans, which are also generally known as commercial and industrial loans or commercial business loans. The construction and development loan segment consists of the following classes: residential construction and commercial construction loans. Residential construction loans are made for the acquisition of and/or construction on a lot or lots on which a residential dwelling is to be built. Commercial construction loans are made for the purpose of acquiring, developing and/or constructing a commercial structure. The residential loan segment consists of the following classes: one- to four-family first lien residential mortgage loans, home equity lines of credit, and home equity loans. The Company classifies its leases as finance leases, in accordance with FASB ASC Topic 840, “Leases”. The difference between the Company’s gross investment in the lease and the cost or carrying amount of the leased property, if different, is recorded as unearned income, which is amortized to income over the lease term by the interest method. The tax certificate segment includes delinquent property tax certificates that have been acquired through public auctions in various jurisdictions. The tax certificates assume a lien position that is generally superior to any mortgage liens that are on the property and have certain foreclosure rights as defined by state law. The tax certificates are predominantly in New Jersey. The Company ceased acquiring new tax certificates in 2010. Consumer loans includes cash secured and unsecured loans and lines of credit. | |
For all classes of loans receivable, with the exception of tax certificates, the accrual of interest is discontinued on a loan when management believes that the borrower’s financial condition is such that collection of principal and interest is doubtful or when a loan becomes 90 days past due. When a loan is placed on non-accrual all unpaid interest is reversed from interest income. Interest payments received on impaired nonaccrual loans are normally applied against principal. Excess proceeds received over the principal amounts due on impaired non-accrual loans are recognized as income on a cash basis. The Company recognizes income under the accrual basis when the principal payments on the loans become current and the collateral on the loan is sufficient to cover the outstanding obligation to the Company. If these factors do not exist, the Company does not recognize income. Generally, loans are restored to accrual status when the loan is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months) and the ultimate collectibility of the total contractual principal and interest is no longer in doubt. The past due status of all classes of loans receivable is determined based on contractual due dates for loan payments. Tax certificates have no contractual maturity. Collection is dependent upon the tax payer’s redemption of the lien, which includes principal interest and fees. | |
A loan modification is deemed a troubled debt restructuring (“TDR”) when two conditions are met: 1) the borrower is experiencing financial difficulty and 2) a concession is made by the Company that would not otherwise be considered for a borrower with similar credit risk characteristics. All loans classified as TDRs are considered to be impaired. TDRs are returned to an accrual status when the loan is brought current, has performed in accordance with the contractual restructured terms for a reasonable period of time (generally six months) and the ultimate collectibility of the total contractual restructured principal and interest is no longer in doubt. The Company’s policy for TDRs is to recognize interest income on currently performing restructured loans under the accrual method. | |
The Company accounts for guarantees in accordance with FASB ASC Topic 460 “Guarantees” (“ASC Topic 460”). ASC Topic 460 requires a guarantor entity, at the inception of a guarantee covered by the measurement provisions of the interpretation, to record a liability for the fair value of the obligation undertaken in issuing the guarantee. The Company has financial and performance letters of credit. Financial letters of credit require the Company to make a payment if the customer’s condition deteriorates, as defined in agreements. Performance letters of credits require the Company to make payments if the customer fails to perform certain non-financial contractual obligations. | |
Allowance for Loan and Lease Losses | Allowance for Loan and Lease Losses |
The Company’s loan and lease portfolio (the “credit portfolio”) is subject to varying degrees of credit risk. The allowance for loan and lease losses consists of the allowance for loan and lease losses (the “allowance”) and the reserve for unfunded lending commitments. The allowance represents management’s estimate of losses inherent in the loan and lease portfolio as of the statement of financial condition date and is recorded as a reduction to loans and leases. The reserve for unfunded lending commitments represents management’s estimate of losses inherent in the Company’s unfunded loan commitments and is recorded in other liabilities on the consolidated statement of financial condition. The allowance is increased by the provision for loan and lease losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance, and subsequent recoveries, if any, are credited to the allowance. All, or part, of the principal balance of loans receivable are charged off to the allowance as soon as it is determined that the repayment or collateral recovery of all, or part, of the principal balance is highly unlikely. The allowance represents an estimation made pursuant to FASB ASC Topic 450, “Contingencies” (“ASC Topic 450”) or FASB ASC Topic 310, “Receivables” (“ASC Topic 310”). The adequacy of the allowance is determined through evaluation of the credit portfolio, and involves consideration of a number of factors, as outlined below, to establish a prudent level. The Company considers that the determination of the allowance involves a higher degree of judgment and complexity than its other significant accounting policies. The Company’s systematic methodology for assessing the appropriateness of the allowance includes: (1) general reserves reflecting historical loss rates by loan type, (2) specific reserves for risk-rated credits based on probable losses on an individual or portfolio basis and (3) qualitative reserves based upon current economic conditions and other risk factors. | |
The loan portfolio is stratified into loan classifications that have similar risk characteristics. The general allowance is based upon historical loss rates using a three-year rolling average of the historical loss experienced within each loan segment. The qualitative factors used to adjust the historical loss experience address various risk characteristics of the Company’s loan and lease portfolio include evaluating: (1) trends in delinquencies and other non-performing loans, (2) changes in the risk profile related to large loans in the portfolio, (3) changes in the growth trends of categories of loans comprising the loan and lease portfolio, (4) concentrations of loans and leases to specific industry segments, (5) changes in economic conditions on both a local and national level, (6) quality of loan review and board oversight, (7) changes in lending policies and procedures, and (8) changes in lending staff. Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation. Adjustments to the factors are supported through documentation of changes in conditions in a report accompanying the allowance calculation. | |
The allowance calculation methodology includes further segregation of loan classes into risk rating categories. The borrower’s overall financial condition, repayment sources, guarantors and value of collateral, if appropriate, are evaluated annually for commercial and construction and development loans or when credit deficiencies arise, such as delinquent loan payments, for all loans. Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful and loss. Loans classified as special mention have potential weaknesses that deserve management’s close attention. If uncorrected, the potential weaknesses may result in deterioration of the repayment prospects. Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. They include loans that are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as doubtful have all the weaknesses inherent in loans classified substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as a loss are considered uncollectible and are charged to the allowance. Loans not classified as special mention, substandard, doubtful or loss are rated pass. | |
The specific reserves are determined utilizing standards required under ASC Topic 310. The Company identifies a loan as impaired when it is probable that interest and principal will not be collected according to the contractual terms of the loan agreement. Non-accrual loans and loans restructured under a TDR are evaluated for impairment on an individual basis considering all known relevant factors that may affect loan collectability such as the borrower’s overall financial condition, resources and payment record, support available from financial guarantors and the sufficiency of current collateral values (current appraisals or rent rolls for income producing properties), and risks inherent in different kinds of lending (such as source of repayment, quality of borrower and concentration of credit quality). Non-accrual loans that experience insignificant payment shortfalls generally are not classified as 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. | |
Impairment is measured on a loan by loan basis for commercial and industrial loans, commercial real estate loans and construction loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent. The estimated fair values of substantially all of the Company’s impaired loans are measured based on the estimated fair value of the loan’s collateral. The Company obtains third-party appraisals or real estate brokers’ opinions (“BPOs”) to establish the fair value of real estate collateral. Appraised values or BPOs are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value less estimated costs to sell the property. For commercial and industrial loans secured by non-real estate collateral, such as accounts receivable, inventory and equipment, estimated fair values are determined based on the borrower’s financial statements, inventory reports, accounts receivable aging or equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. A specific reserve is established for an impaired loan for the amount that the carrying value exceeds its estimated fair value. Once a loan is determined to be impaired it will be deducted from the portfolio balance and the net remaining balance of the portfolio will be used in the general and qualitative analysis. A specific reserve is established for an impaired loan for the amount that the carrying value exceeds its estimated fair value. | |
Based on management’s comprehensive analysis of the loan and lease portfolio, management believes the current level of the allowance is adequate at December 31, 2014. However, its determination requires significant judgment, and estimates of probable losses inherent in the credit portfolio can vary significantly from the amounts actually observed. While management uses the best information available to make allowance evaluations, adjustments to the allowance may be necessary based on changes in economic and other conditions or changes in accounting guidance. In addition, the FDIC, as an integral part of its examination processes, periodically reviews our allowance for loan and lease losses. The FDIC may require the recognition of adjustments to the allowance for loan and lease losses based on their judgment of information available to them at the time of their examinations. To the extent that actual outcomes differ from management’s estimates, additional provisions to the allowance for loan and lease losses may be required that would adversely impact earnings in future periods. | |
Other Real Estate Owned | Other Real Estate Owned |
Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less costs to sell at the date of foreclosure, establishing a new cost basis. Foreclosed real estate properties acquired through the tax certificate portfolio are transferred at the lower of cost or fair value principally due to uncertainty around the fair value of the foreclosed properties. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount recorded at acquisition date or fair value less costs to sell. Third-party appraisals or agreements of sale are utilized to determine fair value of the loan collateral while BPOs, agreements of sale, or in some cases, third-party appraisals are utilized to value properties from the tax certificate portfolio. Revenue and expenses from operations and changes in the valuation allowance are included in non-interest expenses. For fair value measurement, OREO is included in level 3 assets on a non-recurring basis. | |
Premises and Equipment | Premises and Equipment |
Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation, which is computed primarily using the modified accelerated cost recovery system (“MACRS”) over the estimated useful lives of the assets. Leasehold improvements are depreciated over the shorter of the estimated useful lives of the improvements or the terms of the related leases. Expected term includes lease options periods to the extent that the exercise of such options is reasonably assured. | |
Bank-Owned Life Insurance | Bank-Owned Life Insurance |
Royal Bank has purchased life insurance policies on certain employees. These policies are reflected on the consolidated balance sheets at their cash surrender value, or the amount that can be realized. Income from these policies and changes in the cash surrender value are recorded in other income. | |
Advertising Costs | Advertising Costs |
Advertising costs are expensed as incurred. The Company’s advertising costs were $357,000 and $209,000 for 2014 and 2013, respectively. | |
Benefit Plans | Benefit Plans |
The Company has a noncontributory nonqualified, defined benefit pension plan covering certain eligible employees. The Plan provides retirement benefits under pension trust agreements. The benefits are based on years of service and the employee’s compensation during the highest three consecutive years during the last 10 years of employment. In accordance with ASC Topic 715, ”Compensation – Retirement Benefits” (“ASC Topic 715”), the Company recognizes the Plan’s over-funded or under-funded status as an asset or liability with an offsetting adjustment to AOCI. ASC Topic 715 requires the determination of the fair value of a plan’s assets at the company’s year-end and the recognition of actuarial gains and losses, prior service costs or credits, transition assets or obligations as a component of AOCI. These amounts were previously netted against the plan’s funded status in the Company’s consolidated Balance Sheet. These amounts will be subsequently recognized as components of net periodic benefit costs. Further, actuarial gains and losses that arise in subsequent periods that are not initially recognized as a component of net periodic benefit costs will be recognized as a component of AOCI. Those amounts will subsequently be recorded as component of net periodic benefit costs as they are amortized during future periods. Net pension expense consists of service costs and interest costs and are actually determined. The Company accrues pension costs as incurred. The Plan does not have assets and benefit payments are expected to be made from insurance policies owned by the Company. | |
The Company has a capital accumulation and salary reduction plan under Section 401(k) of the Internal Revenue Code of 1986, as amended. Under the plan, all employees are eligible to contribute up to the maximum allowed by Internal Revenue Service (“IRS”) regulation, with the Company matching 100% of any contribution between 1% and 5% subject to a $2,500 per employee annual limit. During 2014, the Company reinstated the 401(k) contribution and recorded a matching contribution expense of $147,000. For 2013, there was no matching contribution. | |
Stock Compensation | Stock Compensation |
FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC Topic 718”) requires that the compensation cost relating to share-based payment transactions be recognized in consolidated financial statements. The costs are measured based on the fair value of the equity or liability instruments issued. ASC Topic 718 covers a wide range of share-based compensation arrangements including stock options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. The effect of ASC Topic 718 is to require entities to measure the cost of employee services received in exchange for stock options based on the grant-date fair value of the award, and to recognize the cost over the period the employee is required to provide services for the award. ASC Topic 718 permits entities to use any option-pricing model that meets the fair value objective in the Statement. The Company recorded compensation expense relating to stock options and restricted stock of $17,000 and $22,000 during 2014 and 2013, respectively. | |
At December 31, 2014, the Company had a director stock-based plan, an employee stock-based plan, and a long-term incentive compensation plan, which are more fully described in “Note 18 – Stock Compensation Plans” to the Consolidated Financial Statements. | |
Trust Preferred Securities | Trust Preferred Securities |
Royal Bancshares Capital Trust I/II (“Trusts”) issued mandatory redeemable preferred stock to investors and loaned the proceeds to the Company. The Trusts hold, as their sole asset, subordinated debentures issued by the Company in 2004. The Company does not consolidate the Trusts as ASC Topic 810 precludes consideration of the call option embedded in the preferred stock when determining if the Company has the right to a majority of the Trusts expected returns. The non-consolidation results in the investment in common stock of the Trusts to be included in other assets with a corresponding increase in outstanding debt of $774,000. In addition, the income accrued on the Company’s common stock investments is included in other income. Refer to “Note 10 – Borrowings and Subordinated Debentures” to the Consolidated Financial Statements for more information. | |
Derivatives and Hedging | Derivatives and Hedging |
In support of its asset liability management process, the Company will implement derivative hedging strategies with the intent of reducing interest rate risk and economic value of equity risk. The Company accounts for derivatives in accordance with FASB ASC Topic 815 “Derivatives and Hedging” (“ASC Topic 815”). The Company formally designates its derivatives as cash flow hedges and documents the strategy for entering into the transactions and the method of assessing ongoing effectiveness. Changes in the fair value of the derivative are recognized in other comprehensive income (loss) until the underlying forecasted transaction is recognized in earnings. The ineffective portion of a derivative’s change in fair value is recognized in earnings immediately. To determine fair value, the Company uses third party pricing models that incorporate assumptions about market conditions and risks that are current at the reporting date. The Company does not use derivative instruments for speculative purposes. | |
Derivative instruments qualify for hedge accounting treatment only if they are designated as such on the date on which the derivative contracted is entered and are expected to be, and are, effective in substantially reducing interest rate risk arising from the assets and liabilities identified as exposing the Company to risk. Those derivative financial instruments that do not meet the hedging criteria discussed below would be classified as undesignated derivatives and would be recorded at fair value with changes in fair value recorded in income. | |
Derivative hedge contracts must meet specific effectiveness tests (i.e., over time the change in their fair values due to the designated hedge risk must be within 80 to 125 percent of the opposite change in the fair values of the hedged assets or liabilities). Changes in fair value of the derivative financial instruments must be effective at offsetting changes in the fair value of the hedged items due to the designated hedge risk during the term of the hedge. | |
The Company formally assesses, both at the hedges’ inception, and on an on-going basis, whether derivatives used in hedging transactions have been highly effective in offsetting changes in cash flows of hedged items and whether those derivatives are expected to remain highly effective in subsequent periods. The Company discontinues hedge accounting when (a) it determines that a derivative is no longer effective in offsetting changes in cash flows of a hedged item; (b) the derivative expires or is sold, terminated or exercised; (c) probability exists that the forecasted transaction will no longer occur; or (d) management determines that designating the derivative as a hedging instrument is no longer appropriate. In all cases in which hedge accounting is discontinued and a derivative remains outstanding, the Company will carry the derivative at fair value in the consolidated financial statements, recognizing changes in fair value in current period income in the consolidated statement of income. Cash flows resulting from the derivative financial instruments that are accounted for as hedges | |
Income Taxes | Income Taxes |
The Company accounts for income taxes in accordance with FASB ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes”, which includes guidance related to accounting for uncertainty in income taxes, which sets out a consistent framework to determine the appropriate level of tax reserves to maintain for uncertain tax positions. The Company had no material unrecognized tax benefits or accrued interest and penalties as of December 31, 2014 and 2013. The Company’s policy is to account for interest as a component of interest expense and penalties as a component of other expense. | |
The Company and its subsidiaries file a consolidated federal income tax return. Income taxes are allocated to the Company and its subsidiaries based on the contribution of their income or use of their loss in the consolidated return. Separate state income tax returns are filed by the Company and its subsidiaries. As of December 31, 2014, tax years 2011 through 2013 are subject to federal examination by the IRS and years 2010 through 2013 are subject to state examination by various state taxing authorities. Tax regulations are subject to interpretation of the related tax laws and regulations and require significant judgment to apply. | |
Federal and state income taxes have been provided on the basis of reported income or loss. The amounts reflected on the tax returns differ from these provisions due principally to temporary differences in the reporting of certain items for financial reporting and income tax reporting purposes. The tax effect of these temporary differences is accounted for as deferred taxes applicable to future periods. Deferred income tax expense or benefit is determined by recognizing deferred tax assets (“DTA”) and liabilities (“DTL”) for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. | |
In evaluating our ability to recover deferred tax assets, the Company considers all available positive and negative evidence, including past operating results and our forecast of future taxable income. In determining future taxable income, assumptions are made for the amount of taxable income, the reversal of temporary differences and the implementation of feasible and prudent tax planning strategies. While these estimates and judgments are inherently subjective, they are consistent with the plans and estimates management uses to manage the Company’s business. | |
The Company is required to establish a valuation allowance for deferred tax assets and record a charge to income or shareholders' equity if management determines, based on all available evidence at the time the determination is made, that it is more likely than not that some portion or all of the deferred tax assets will not be realized in future periods. At December 31, 2014, the DTA valuation allowance was $39.1 million compared to $37.2 million at December 31, 2013. In the future, the DTA valuation allowance may be reversed, depending on the Company’s financial position and results of operations in the future, among other factors, and, in such event, may be available to increase future net income. There can be no assurance, however, as to when the Company could be in a position to recapture the DTA valuation allowance. | |
The Company had no material unrecognized tax benefits (“UTB”) or accrued interest and penalties as of December 31, 2014. We do not expect the total amount of UTB to significantly increase in the next twelve months. We classify interest and penalties as an element of tax expense. We monitor changes in tax statutes and regulations to determine if significant changes will occur over the next 12 months. As of December 31, 2014 no significant changes to UTB are projected; however, tax audit examinations are possible. | |
Treasury Stock | Treasury Stock |
Shares of common stock repurchased are recorded as treasury stock at cost. | |
Earnings (Losses) Per Share Information | Earnings (Losses) Per Share Information |
Basic per share data excludes dilution and is computed by dividing income (loss) available to common shareholders by the weighted average common shares outstanding during the period. Diluted per share data takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock, using the treasury stock method. | |
The Class B shares of the Company may be converted to Class A shares at the rate of 1.15 to 1. | |
Comprehensive Income (Loss) | Comprehensive Income (Loss) |
The Company reports comprehensive income (loss) in accordance with FASB ASC Topic 220, “Comprehensive Income” (“ASC Topic 220”), which requires the reporting of all changes in equity during the reporting period except investments from and distributions to shareholders. Net income (loss) is a component of comprehensive income (loss) with all other components referred to in the aggregate as other comprehensive income (loss). Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on available for sale investment securities, non-credit related losses on other-than-temporarily impaired investment securities, adjustment to net periodic pension cost, and adjustment to the value of swaps. | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments |
For information on the fair value of the Company’s financial instruments refer to “Note 21 - Fair Value of Financial Instruments” to the Consolidated Financial Statements. | |
Restrictions on Cash and Amounts Due From Banks | Restrictions on Cash and Amounts Due From Banks |
Royal Bank is required to maintain average balances on hand with the Federal Reserve Bank. At December 31, 2014 and 2013, these reserve balances amounted to $100,000. | |
Recent Accounting Pronouncements | 2. Recent Accounting Pronouncements |
In January 2014, FASB issued ASU No. 2014-04, Receivables (Topic 310): Troubled Debt Restructurings by Creditors (Subtopic 310-40) Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (“ASU 2014-04”). ASC Topic 310 includes guidance that states that a creditor should reclassify a collateralized mortgage loan such that the loan should be derecognized and the collateral asset recognized when it determines that there has been in substance a repossession or foreclosure by the creditor, that is, the creditor receives physical possession of the debtor’s assets regardless of whether formal foreclosure proceedings take place. However, the terms in substance a repossession or foreclosure and physical possession are not defined in the accounting literature and there is diversity about when a creditor should derecognize the loan receivable and recognize the real estate property. That diversity has been highlighted by recent extended foreclosure timelines and processes related to residential real estate properties. | |
The objectives in ASU 2014-04 are intended to reduce diversity in practice by clarifying when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan should be derecognized and the real estate property recognized. Holding foreclosed real estate property presents different operational and economic risk to creditors compared with holding an impaired loan. Therefore, consistency in the timing of loan derecognition and presentation of foreclosed real estate properties is of qualitative significance to users of the creditor’s financial statements. Additionally, the disclosure of the amount of foreclosed residential real estate properties and of the recorded investment in consumer mortgage loans secured by residential real estate properties that are in the process of foreclosure is expected to provide decision-useful information to many users of the creditor’s financial statements. The amendments in ASU 2014-04 are effective for public companies for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. An entity can elect to adopt the amendments in ASU 2014-04 using either a modified retrospective transition method or a prospective transition method. The adoption of ASU 2014-04 is not expected to have a significant impact on the Company’s consolidated financial statements. | |
In April 2014, FASB issued ASU No. 2014-08 Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). The amendments in ASU 2014-08 change the criteria for reporting discontinued operations for all public and nonpublic entities. Currently, a component of an entity that is a reportable segment, an operating segment, a reporting unit, a subsidiary, or an asset group is eligible for discontinued operations presentation. Once the amendments of ASU 2014-08 take effect, only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results will be reported as discontinued operations in the financial statements. The amendments also require new disclosures about discontinued operations and disposals of components of an entity that do not qualify for discontinued operations reporting. The amendments in ASU 2014-08 are effective for public companies for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. Early adoption is permitted but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance. The adoption of ASU 2014-08 is not expected to have a significant impact on the Company’s consolidated financial statements. | |
In May 2014, FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition. FASB and the International Financial Reporting Standards (“IFRS”) initiated a joint project to develop a common revenue standard for U.S. GAAP and IFRS. The core principle of the guidance in 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. The amendments in ASU 2014-09 are effective for public companies for annual periods, and interim periods within those annual periods, beginning after December 15, 2016. Early adoption is not permitted. The adoption of ASU 2014-09 is not expected to have a significant impact on the Company’s consolidated financial statements. | |
In June 2014, the FASB issued ASU No. 2014-12, Compensation – Stock Compensation (Topic 718) - Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (“ASU 2014-12”). The amendments in ASU 2014-12 require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation – Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. The amendments in ASU 2014-12 are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this ASU either: (a) prospectively to all awards granted or modified after the effective date; or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 is not expected to have a significant impact on the Company’s consolidated financial statements. | |
INVESTMENT_SECURITIES_Tables
INVESTMENT SECURITIES (Tables) | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||
Investment Securities [Abstract] | |||||||||||||||||||||||||||
Amortized cost, gross unrealized gains and losses, and fair value of available-for-sale investment securities | |||||||||||||||||||||||||||
As of December 31, 2014 | Included in OCI* | ||||||||||||||||||||||||||
Gross | Gross | ||||||||||||||||||||||||||
Amortized | unrealized | unrealized | |||||||||||||||||||||||||
(In thousands) | cost | gains | losses | Fair value | |||||||||||||||||||||||
U.S. government agencies | $ | 26,123 | $ | — | $ | -834 | $ | 25,289 | |||||||||||||||||||
Mortgage-backed securities-residential | 22,073 | 375 | -61 | 22,387 | |||||||||||||||||||||||
Collateralized mortgage obligations: | |||||||||||||||||||||||||||
Issued or guaranteed by U.S. government agencies | 167,711 | 2,350 | -1,084 | 168,977 | |||||||||||||||||||||||
Non-agency | 3,738 | 7 | -14 | 3,731 | |||||||||||||||||||||||
Corporate bonds | 15,617 | 144 | -34 | 15,727 | |||||||||||||||||||||||
Municipal bonds | 10,117 | 91 | -35 | 10,173 | |||||||||||||||||||||||
Other securities | 2,684 | 1,350 | — | 4,034 | |||||||||||||||||||||||
Common stocks | 33 | 17 | — | 50 | |||||||||||||||||||||||
Total available for sale | $ | 248,096 | $ | 4,334 | $ | -2,062 | $ | 250,368 | |||||||||||||||||||
As of December 31, 2013 | Included in OCL* | ||||||||||||||||||||||||||
Gross | Gross | ||||||||||||||||||||||||||
Amortized | unrealized | unrealized | |||||||||||||||||||||||||
(In thousands) | cost | gains | losses | Fair value | |||||||||||||||||||||||
U.S. government agencies | $ | 68,207 | $ | — | $ | -6,171 | $ | 62,036 | |||||||||||||||||||
Mortgage-backed securities-residential | 32,769 | 210 | -882 | 32,097 | |||||||||||||||||||||||
Collateralized mortgage obligations: | |||||||||||||||||||||||||||
Issued or guaranteed by U.S. government agencies | 188,194 | 2,887 | -1,978 | 189,103 | |||||||||||||||||||||||
Non-agency | 4,454 | 25 | — | 4,479 | |||||||||||||||||||||||
Corporate bonds | 9,669 | 25 | -256 | 9,438 | |||||||||||||||||||||||
Municipal bonds | 7,163 | — | -263 | 6,900 | |||||||||||||||||||||||
Other securities | 3,363 | 1,405 | -143 | 4,625 | |||||||||||||||||||||||
Common stocks | 33 | 16 | — | 49 | |||||||||||||||||||||||
Total available for sale | $ | 313,852 | $ | 4,568 | $ | -9,693 | $ | 308,727 | |||||||||||||||||||
* OCI: Other comprehensive income; OCL: Other comprehensive loss | |||||||||||||||||||||||||||
Amortized cost and fair value of investment securities, by contractual maturity | |||||||||||||||||||||||||||
As of December 31, 2014 | |||||||||||||||||||||||||||
Amortized | |||||||||||||||||||||||||||
(In thousands) | cost | Fair value | |||||||||||||||||||||||||
Within 1 year | $ | — | $ | — | |||||||||||||||||||||||
After 1 but within 5 years | 17,429 | 17,329 | |||||||||||||||||||||||||
After 5 but within 10 years | 25,316 | 25,054 | |||||||||||||||||||||||||
After 10 years | 9,112 | 8,806 | |||||||||||||||||||||||||
Mortgage-backed securities-residential | 22,073 | 22,387 | |||||||||||||||||||||||||
Collateralized mortgage obligations: | |||||||||||||||||||||||||||
Issued or guaranteed by U.S. government agencies | 167,711 | 168,977 | |||||||||||||||||||||||||
Non-agency | 3,738 | 3,731 | |||||||||||||||||||||||||
Total available for sale debt securities | 245,379 | 246,284 | |||||||||||||||||||||||||
No contractual maturity | 2,717 | 4,084 | |||||||||||||||||||||||||
Total available for sale securities | $ | 248,096 | $ | 250,368 | |||||||||||||||||||||||
Gross realized gains and losses realized on sale of securities | |||||||||||||||||||||||||||
For the year ended | |||||||||||||||||||||||||||
ended December 31, | |||||||||||||||||||||||||||
(In thousands) | 2014 | 2013 | |||||||||||||||||||||||||
Gross realized gains | $ | 1,327 | $ | 416 | |||||||||||||||||||||||
Gross realized losses | -950 | -258 | |||||||||||||||||||||||||
Net realized gains (losses) | $ | 377 | $ | 158 | |||||||||||||||||||||||
Investment securities in a continuous unrealized loss position | |||||||||||||||||||||||||||
31-Dec-14 | Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||||
Gross | Number | Gross | Number | Gross | Number | ||||||||||||||||||||||
unrealized | of | unrealized | of | unrealized | of | ||||||||||||||||||||||
(In thousands) | Fair value | losses | positions | Fair value | losses | positions | Fair value | losses | positions | ||||||||||||||||||
U.S. government agencies | $ | — | $ | — | — | $ | 25,289 | $ | -834 | 8 | $ | 25,289 | $ | -834 | 8 | ||||||||||||
Mortgage-backed securities-residential | — | — | — | 8,913 | -61 | 3 | 8,913 | -61 | 3 | ||||||||||||||||||
Collateralized mortgage obligations: | |||||||||||||||||||||||||||
Issued or guaranteed by U.S. government agencies | 36,757 | -204 | 12 | 38,798 | -880 | 12 | 75,555 | -1,084 | 24 | ||||||||||||||||||
Non-agency | 1,432 | -14 | 1 | — | — | — | 1,432 | -14 | 1 | ||||||||||||||||||
Corporate bonds | 8,054 | -25 | 5 | 991 | -9 | 1 | 9,045 | -34 | 6 | ||||||||||||||||||
Municipal bonds | 1,639 | -7 | 2 | 3,079 | -28 | 4 | 4,718 | -35 | 6 | ||||||||||||||||||
Total available for sale | $ | 47,882 | $ | -250 | 20 | $ | 77,070 | $ | -1,812 | 28 | $ | 124,952 | $ | -2,062 | 48 | ||||||||||||
31-Dec-13 | Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||||
Gross | Number | Gross | Number | Gross | Number | ||||||||||||||||||||||
unrealized | of | unrealized | of | unrealized | of | ||||||||||||||||||||||
(In thousands) | Fair value | losses | positions | Fair value | losses | positions | Fair value | losses | positions | ||||||||||||||||||
U.S. government agencies | $ | 48,919 | $ | -5,035 | 16 | $ | 12,267 | $ | -1,136 | 5 | $ | 61,186 | $ | -6,171 | 21 | ||||||||||||
Mortgage-backed securities-residential | 18,045 | -518 | 7 | 6,276 | -364 | 2 | 24,321 | -882 | 9 | ||||||||||||||||||
Collateralized mortgage obligations: | |||||||||||||||||||||||||||
Issued or guaranteed by U.S. government agencies | 67,240 | -1,446 | 21 | 9,974 | -532 | 3 | 77,214 | -1,978 | 24 | ||||||||||||||||||
Corporate bonds | 4,848 | -221 | 5 | 965 | -35 | 1 | 5,813 | -256 | 6 | ||||||||||||||||||
Municipal bonds | 3,019 | -102 | 5 | 3,881 | -161 | 4 | 6,900 | -263 | 9 | ||||||||||||||||||
Other securities | — | — | — | 301 | -143 | 2 | 301 | -143 | 2 | ||||||||||||||||||
Total available for sale | $ | 142,071 | $ | -7,322 | 54 | $ | 33,664 | $ | -2,371 | 17 | $ | 175,735 | $ | -9,693 | 71 | ||||||||||||
LOANS_AND_LEASES_Tables
LOANS AND LEASES (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Loans and Leases [Abstract] | |||||||||||||||||||||||||
Major classifications of loans held for investment | |||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||
(In thousands) | 2014 | 2013 | |||||||||||||||||||||||
Commercial real estate | $ | 175,038 | $ | 148,293 | |||||||||||||||||||||
Construction and land development | 45,662 | 45,261 | |||||||||||||||||||||||
Commercial and industrial | 76,489 | 79,589 | |||||||||||||||||||||||
Multi-family | 13,823 | 11,737 | |||||||||||||||||||||||
Residential real estate | 42,992 | 25,535 | |||||||||||||||||||||||
Leases | 51,583 | 42,524 | |||||||||||||||||||||||
Tax certificates | 7,191 | 12,716 | |||||||||||||||||||||||
Consumer | 2,354 | 826 | |||||||||||||||||||||||
Total LHFI, net of unearned income | $ | 415,132 | $ | 366,481 | |||||||||||||||||||||
Risk ratings for loan portfolio segment | |||||||||||||||||||||||||
As of December 31, 2014 | |||||||||||||||||||||||||
(In thousands) | Pass | Pass-Watch | Special Mention | Substandard | Non-accrual | Total | |||||||||||||||||||
Commercial real estate | $ | 140,045 | $ | 27,229 | $ | 2,512 | $ | 1,568 | $ | 3,684 | $ | 175,038 | |||||||||||||
Construction and land development | 12,861 | 32,165 | — | — | 636 | 45,662 | |||||||||||||||||||
Commercial and industrial | 60,500 | 8,527 | 1,608 | 3,337 | 2,517 | 76,489 | |||||||||||||||||||
Multi-family | 12,995 | 310 | 518 | — | — | 13,823 | |||||||||||||||||||
Residential real estate | 42,033 | — | — | — | 959 | 42,992 | |||||||||||||||||||
Leases | 51,113 | 152 | 1 | — | 317 | 51,583 | |||||||||||||||||||
Tax certificates | 5,491 | — | — | — | 1,700 | 7,191 | |||||||||||||||||||
Consumer | 2,194 | 160 | — | — | — | 2,354 | |||||||||||||||||||
Total LHFI, net of unearned income | $ | 327,232 | $ | 68,543 | $ | 4,639 | $ | 4,905 | $ | 9,813 | $ | 415,132 | |||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||||
(In thousands) | Pass | Pass-Watch | Special Mention | Substandard | Non-accrual | Total | |||||||||||||||||||
Commercial real estate | $ | 99,525 | $ | 32,267 | $ | 11,572 | $ | 2,604 | $ | 2,325 | $ | 148,293 | |||||||||||||
Construction and land development | 14,677 | 16,270 | 11,095 | 569 | 2,650 | 45,261 | |||||||||||||||||||
Commercial and industrial | 50,478 | 10,508 | 5,735 | 9,239 | 3,629 | 79,589 | |||||||||||||||||||
Multi-family | 10,792 | 410 | 535 | — | — | 11,737 | |||||||||||||||||||
Residential real estate | 24,903 | — | — | — | 632 | 25,535 | |||||||||||||||||||
Leases | 41,325 | 485 | 247 | — | 467 | 42,524 | |||||||||||||||||||
Tax certificates | 12,262 | — | — | — | 454 | 12,716 | |||||||||||||||||||
Consumer | 750 | 76 | — | — | — | 826 | |||||||||||||||||||
Total LHFI, net of unearned income | $ | 254,712 | $ | 60,016 | $ | 29,184 | $ | 12,412 | $ | 10,157 | $ | 366,481 | |||||||||||||
Aging analysis of past due payments for loan portfolio segment | |||||||||||||||||||||||||
As of December 31, 2014 | 30-59 Days | 60-89 Days | Accruing | ||||||||||||||||||||||
(In thousands) | Past Due | Past Due | 90+ Days | Non-accrual | Current | Total | |||||||||||||||||||
Commercial real estate | $ | 311 | $ | 533 | $ | — | $ | 3,684 | $ | 170,510 | $ | 175,038 | |||||||||||||
Construction and land development | — | — | — | 636 | 45,026 | 45,662 | |||||||||||||||||||
Commercial and industrial | 92 | 449 | — | 2,517 | 73,431 | 76,489 | |||||||||||||||||||
Multi-family | — | — | — | — | 13,823 | 13,823 | |||||||||||||||||||
Residential real estate | 165 | 162 | — | 959 | 41,706 | 42,992 | |||||||||||||||||||
Leases | 152 | 1 | — | 317 | 51,113 | 51,583 | |||||||||||||||||||
Tax certificates | — | — | — | 1,700 | 5,491 | 7,191 | |||||||||||||||||||
Consumer | — | — | — | — | 2,354 | 2,354 | |||||||||||||||||||
Total LHFI, net of unearned income | $ | 720 | $ | 1,145 | $ | — | $ | 9,813 | $ | 403,454 | $ | 415,132 | |||||||||||||
As of December 31, 2013 | 30-59 Days | 60-89 Days | Accruing | ||||||||||||||||||||||
(In thousands) | Past Due | Past Due | 90+ Days | Non-accrual | Current | Total | |||||||||||||||||||
Commercial real estate | $ | 996 | $ | — | $ | — | $ | 2,325 | $ | 144,972 | $ | 148,293 | |||||||||||||
Construction and land development | — | — | — | 2,650 | 42,611 | 45,261 | |||||||||||||||||||
Commercial and industrial | 115 | 49 | — | 3,629 | 75,796 | 79,589 | |||||||||||||||||||
Multi-family | — | — | — | — | 11,737 | 11,737 | |||||||||||||||||||
Residential real estate | 458 | 262 | — | 632 | 24,183 | 25,535 | |||||||||||||||||||
Leases | 485 | 247 | — | 467 | 41,325 | 42,524 | |||||||||||||||||||
Tax certificates | — | — | — | 454 | 12,262 | 12,716 | |||||||||||||||||||
Consumer | — | — | — | — | 826 | 826 | |||||||||||||||||||
Total LHFI, net of unearned income | $ | 2,054 | $ | 558 | $ | — | $ | 10,157 | $ | 353,712 | $ | 366,481 | |||||||||||||
Information pertaining to impaired Loans | |||||||||||||||||||||||||
For the years ended | |||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||
(In thousands) | 2014 | 2013 | |||||||||||||||||||||||
Average investment in impaired loans and leases (1) | $ | 17,077 | $ | 24,714 | |||||||||||||||||||||
Interest income recognized on impaired loans and leases | $ | 377 | $ | 559 | |||||||||||||||||||||
Interest income recognized on a cash basis on impaired loans and leases | $ | 377 | $ | 27 | |||||||||||||||||||||
-1 | Includes LHFI and LHFS | ||||||||||||||||||||||||
Troubled debt restructurings that are on an accrual status and a non-accrual status | |||||||||||||||||||||||||
As of December 31, 2014 | |||||||||||||||||||||||||
Non- | |||||||||||||||||||||||||
Number of | Accrual | Accrual | |||||||||||||||||||||||
(In thousands) | loans | Status | Status | Total TDRs | |||||||||||||||||||||
Commercial real estate | 2 | $ | 2,856 | $ | — | $ | 2,856 | ||||||||||||||||||
Construction and land development | 3 | 47 | 636 | 683 | |||||||||||||||||||||
Commercial and industrial | 6 | 3,670 | 1,448 | 5,118 | |||||||||||||||||||||
Residential real estate | 1 | — | 102 | 102 | |||||||||||||||||||||
Total | 12 | $ | 6,573 | $ | 2,186 | $ | 8,759 | ||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||||
Non- | |||||||||||||||||||||||||
Number of | Accrual | Accrual | |||||||||||||||||||||||
(In thousands) | loans | Status | Status | Total TDRs | |||||||||||||||||||||
Commercial real estate | 3 | $ | 3,847 | $ | — | $ | 3,847 | ||||||||||||||||||
Construction and land development | 4 | 1,257 | 479 | 1,736 | |||||||||||||||||||||
Commercial and industrial | 3 | 4,420 | 1,960 | 6,380 | |||||||||||||||||||||
Residential real estate | 2 | — | 121 | 121 | |||||||||||||||||||||
Total | 12 | $ | 9,524 | $ | 2,560 | $ | 12,084 | ||||||||||||||||||
Newly restructured loans | . | ||||||||||||||||||||||||
Modifications by type for the year ended December 31, 2014 | |||||||||||||||||||||||||
Pre- | Post- | ||||||||||||||||||||||||
Modification | Modification | ||||||||||||||||||||||||
Outstanding | Outstanding | ||||||||||||||||||||||||
Number of | Combination | Recorded | Recorded | ||||||||||||||||||||||
(Dollars in thousands) | loans | Rate | Term | Payment | of types | Total | Investment | Investment | |||||||||||||||||
Commercial and industrial | 3 | $ | — | $ | 232 | $ | — | $ | 27 | $ | 259 | $ | 261 | $ | 261 | ||||||||||
Total | 3 | $ | — | $ | 232 | $ | — | $ | 27 | $ | 259 | $ | 261 | $ | 261 | ||||||||||
Modifications by type for the year ended December 31, 2013 | |||||||||||||||||||||||||
Pre- | Post- | ||||||||||||||||||||||||
Modification | Modification | ||||||||||||||||||||||||
Outstanding | Outstanding | ||||||||||||||||||||||||
Number of | Combination | Recorded | Recorded | ||||||||||||||||||||||
(Dollars in thousands) | loans | Rate | Term | Payment | of types | Total | Investment | Investment | |||||||||||||||||
Commercial real estate | 2 | $ | — | $ | — | $ | — | $ | 3,705 | $ | 3,705 | $ | 3,761 | $ | 3,761 | ||||||||||
Commercial and industrial | 1 | — | — | — | 82 | 82 | 87 | 87 | |||||||||||||||||
Total | 3 | $ | — | $ | — | $ | — | $ | 3,787 | $ | 3,787 | $ | 3,848 | $ | 3,848 | ||||||||||
ALLOWANCE_FOR_LOAN_AND_LEASE_L1
ALLOWANCE FOR LOAN AND LEASE LOSSES (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||||||
Allowance for Loan and Lease Losses [Abstract] | ||||||||||||||||||||||||||||||||
Detail of the allowance and loan portfolio disaggregated by loan portfolio segment | ||||||||||||||||||||||||||||||||
Allowance for Loan and Lease Losses and Loans Held for Investment | ||||||||||||||||||||||||||||||||
For the year ended December 31, 2014 | ||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||
Commercial | and land | Commercial | Multi- | Residential | Tax | |||||||||||||||||||||||||||
(In thousands) | real estate | development | and industrial | family | real estate | Leases | certificates | Consumer | Unallocated | Total | ||||||||||||||||||||||
Beginning balance | $ | 5,498 | $ | 2,316 | $ | 3,006 | $ | 402 | $ | 473 | $ | 1,223 | $ | 555 | $ | 15 | $ | 183 | $ | 13,671 | ||||||||||||
Charge-offs | -354 | -172 | -452 | — | — | -793 | -350 | — | — | -2,121 | ||||||||||||||||||||||
Recoveries | — | 940 | 27 | — | 15 | 42 | 1 | — | — | 1,025 | ||||||||||||||||||||||
(Credit) provision | -692 | -792 | -801 | -117 | 128 | 957 | 461 | 23 | -34 | -867 | ||||||||||||||||||||||
Ending balance | $ | 4,452 | $ | 2,292 | $ | 1,780 | $ | 285 | $ | 616 | $ | 1,429 | $ | 667 | $ | 38 | $ | 149 | $ | 11,708 | ||||||||||||
Ending balance: related to loans individually evaluated for impairment | $ | 200 | $ | — | $ | 301 | $ | — | $ | 28 | $ | 80 | $ | 432 | $ | — | $ | — | $ | 1,041 | ||||||||||||
Ending balance: related to loans collectively evaluated for impairment | $ | 4,252 | $ | 2,292 | $ | 1,479 | $ | 285 | $ | 588 | $ | 1,349 | $ | 235 | $ | 38 | $ | 149 | $ | 10,667 | ||||||||||||
LHFI | ||||||||||||||||||||||||||||||||
Ending balance | $ | 175,038 | $ | 45,662 | $ | 76,489 | $ | 13,823 | $ | 42,992 | $ | 51,583 | $ | 7,191 | $ | 2,354 | $ | — | $ | 415,132 | ||||||||||||
Ending balance: individually evaluated for impairment | $ | 6,795 | $ | 683 | $ | 5,846 | $ | — | $ | 959 | $ | 95 | $ | 1,700 | $ | — | $ | — | $ | 16,078 | ||||||||||||
Ending balance: collectively evaluated for impairment | $ | 168,243 | $ | 44,979 | $ | 70,643 | $ | 13,823 | $ | 42,033 | $ | 51,488 | $ | 5,491 | $ | 2,354 | $ | — | $ | 399,054 | ||||||||||||
Allowance for Loan and Lease Losses and Loans Held for Investment | ||||||||||||||||||||||||||||||||
For the year ended December 31, 2013 | ||||||||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||
Commercial | and land | Commercial | Multi- | Residential | Tax | |||||||||||||||||||||||||||
(In thousands) | real estate | development | and industrial | family | real estate | Leases | certificates | Consumer | Unallocated | Total | ||||||||||||||||||||||
Beginning balance | $ | 8,750 | $ | 2,987 | $ | 1,924 | $ | 654 | $ | 1,098 | $ | 1,108 | $ | 472 | $ | 29 | $ | 239 | $ | 17,261 | ||||||||||||
Charge-offs | -1,684 | -820 | -383 | — | -46 | -382 | -578 | — | — | -3,893 | ||||||||||||||||||||||
Recoveries | 600 | 297 | 17 | — | 158 | 29 | 74 | — | — | 1,175 | ||||||||||||||||||||||
(Credit) provision | -2,168 | -148 | 1,448 | -252 | -737 | 468 | 587 | -14 | -56 | -872 | ||||||||||||||||||||||
Ending balance | $ | 5,498 | $ | 2,316 | $ | 3,006 | $ | 402 | $ | 473 | $ | 1,223 | $ | 555 | $ | 15 | $ | 183 | $ | 13,671 | ||||||||||||
Ending balance: related to loans individually evaluated for impairment | $ | 331 | $ | — | $ | 452 | $ | — | $ | 19 | $ | 60 | $ | 24 | $ | — | $ | — | $ | 886 | ||||||||||||
Ending balance: related to loans collectively evaluated for impairment | $ | 5,167 | $ | 2,316 | $ | 2,554 | $ | 402 | $ | 454 | $ | 1,163 | $ | 531 | $ | 15 | $ | 183 | $ | 12,785 | ||||||||||||
LHFI | ||||||||||||||||||||||||||||||||
Ending balance | $ | 148,293 | $ | 45,261 | $ | 79,589 | $ | 11,737 | $ | 25,535 | $ | 42,524 | $ | 12,716 | $ | 826 | $ | — | $ | 366,481 | ||||||||||||
Ending balance: individually evaluated for impairment | $ | 5,325 | $ | 3,907 | $ | 8,049 | $ | — | $ | 632 | $ | 139 | $ | 454 | $ | — | $ | — | $ | 18,506 | ||||||||||||
Ending balance: collectively evaluated for impairment | $ | 142,968 | $ | 41,354 | $ | 71,540 | $ | 11,737 | $ | 24,903 | $ | 42,385 | $ | 12,262 | $ | 826 | $ | — | $ | 347,975 | ||||||||||||
Financing receivable evaluated for impairment by portfolio segment | The following tables detail the LHFI that were evaluated for impairment by loan classification at December 31, 2014 and December 31, 2013. | |||||||||||||||||||||||||||||||
At and for the December 31, 2014 | ||||||||||||||||||||||||||||||||
Unpaid | Average | Interest | ||||||||||||||||||||||||||||||
principal | Recorded | Related | recorded | income | ||||||||||||||||||||||||||||
(In thousands) | balance | investment | allowance | investment | recognized | |||||||||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||||||||||||||
Commercial real estate | $ | 6,632 | $ | 6,113 | $ | — | $ | 5,089 | $ | 98 | ||||||||||||||||||||||
Construction and land development | 894 | 683 | — | 2,233 | 71 | |||||||||||||||||||||||||||
Commercial and industrial | 5,358 | 5,118 | — | 5,786 | 208 | |||||||||||||||||||||||||||
Tax certificates | 1,120 | 890 | — | 867 | — | |||||||||||||||||||||||||||
Total: | $ | 14,004 | $ | 12,804 | $ | — | $ | 13,975 | $ | 377 | ||||||||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||||||||||||||
Commercial real estate | $ | 926 | $ | 682 | $ | 200 | $ | 529 | $ | — | ||||||||||||||||||||||
Construction and land development | — | — | — | 145 | — | |||||||||||||||||||||||||||
Commercial and industrial | 2,500 | 728 | 301 | 688 | — | |||||||||||||||||||||||||||
Residential real estate | 1,068 | 959 | 28 | 864 | — | |||||||||||||||||||||||||||
Leases | 95 | 95 | 80 | 108 | — | |||||||||||||||||||||||||||
Tax certificates | 4,835 | 810 | 432 | 145 | — | |||||||||||||||||||||||||||
Total: | $ | 9,424 | $ | 3,274 | $ | 1,041 | $ | 2,479 | $ | — | ||||||||||||||||||||||
At and for the year ended December 31, 2013 | ||||||||||||||||||||||||||||||||
Unpaid | Average | Interest | ||||||||||||||||||||||||||||||
principal | Recorded | Related | recorded | income | ||||||||||||||||||||||||||||
(In thousands) | balance | investment | allowance | investment | recognized | |||||||||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||||||||||||||
Commercial real estate | $ | 4,429 | $ | 4,158 | $ | — | $ | 7,956 | $ | 73 | ||||||||||||||||||||||
Construction and land development | 9,850 | 3,907 | — | 3,933 | 209 | |||||||||||||||||||||||||||
Commercial and industrial | 6,693 | 6,491 | — | 5,960 | 250 | |||||||||||||||||||||||||||
Residential real estate | — | — | — | 84 | 27 | |||||||||||||||||||||||||||
Tax certificates | 179 | 115 | — | 167 | — | |||||||||||||||||||||||||||
Total: | $ | 21,151 | $ | 14,671 | $ | — | $ | 18,100 | $ | 559 | ||||||||||||||||||||||
With an allowance recorded: | ||||||||||||||||||||||||||||||||
Commercial real estate | $ | 1,435 | $ | 1,435 | $ | 331 | $ | 1,879 | $ | — | ||||||||||||||||||||||
Construction and land development | — | — | — | 381 | — | |||||||||||||||||||||||||||
Commercial and industrial | 2,592 | 1,290 | 452 | 2,456 | — | |||||||||||||||||||||||||||
Residential real estate | 827 | 631 | 19 | 492 | — | |||||||||||||||||||||||||||
Leases | 139 | 139 | 60 | 106 | — | |||||||||||||||||||||||||||
Tax certificates | 4,322 | 340 | 24 | 341 | — | |||||||||||||||||||||||||||
Total: | $ | 9,315 | $ | 3,835 | $ | 886 | $ | 5,655 | $ | — | ||||||||||||||||||||||
OTHER_REAL_ESTATE_OWNED_Tables
OTHER REAL ESTATE OWNED (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Other Real Estate Owned [Abstract] | |||||||||||
Details of changes in other real estate owned | |||||||||||
For the year ended December 31, 2014 | |||||||||||
(In thousands) | Loans | Tax Liens | Total | ||||||||
Beginning balance | $ | 1,725 | $ | 7,892 | $ | 9,617 | |||||
Net proceeds from sales | -1,336 | -2,970 | -4,306 | ||||||||
Net gains on sales | 59 | 684 | 743 | ||||||||
Transfers in | — | 2,919 | 2,919 | ||||||||
Cash additions | — | 1,330 | 1,330 | ||||||||
Impairment charge | -99 | -425 | -524 | ||||||||
Ending balance | $ | 349 | $ | 9,430 | $ | 9,779 | |||||
For the year ended December 31, 2013 | |||||||||||
(In thousands) | Loans | Tax Liens | Total | ||||||||
Beginning balance | $ | 11,365 | $ | 2,070 | $ | 13,435 | |||||
Net proceeds from sales | -8,869 | -3,910 | -12,779 | ||||||||
Net gain on sales | 228 | 1,199 | 1,427 | ||||||||
Transfers in | 100 | 8,951 | 9,051 | ||||||||
Impairment charge | -1,099 | -418 | -1,517 | ||||||||
Ending balance | $ | 1,725 | $ | 7,892 | $ | 9,617 | |||||
PREMISES_AND_EQUIPMENT_Tables
PREMISES AND EQUIPMENT (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
PREMISES AND EQUIPMENT [Abstract] | |||||||||
Premises and Equipment | |||||||||
As of December 31, | |||||||||
(In thousands) | Estimated Useful Lives | 2014 | 2013 | ||||||
Land | $ | 2,135 | $ | 2,200 | |||||
Buildings and leasehold improvements | 5 - 39 years | 6,160 | 6,225 | ||||||
Furniture, fixtures and equipment | 3 - 7 years | 7,694 | 7,006 | ||||||
15,989 | 15,431 | ||||||||
Less accumulated depreciation and amortization | -10,788 | -10,956 | |||||||
Premises and equipment, net | $ | 5,201 | $ | 4,475 | |||||
LEASE_COMMITMENTS_Tables
LEASE COMMITMENTS (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
LEASE COMMITMENTS [Abstract] | |||||
Minimum rental commitments | |||||
As of | |||||
(In thousands) | 31-Dec-14 | ||||
2015 | 1,145 | ||||
2016 | 1,143 | ||||
2017 | 1,132 | ||||
2018 | 1,115 | ||||
2019 | 635 | ||||
Thereafter | 2,049 | ||||
Total lease commitments | $ | 7,219 | |||
DEPOSITS_Tables
DEPOSITS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Deposits [Abstract] | ||||||||
Deposits summary | ||||||||
December 31, | December 31, | |||||||
(In thousands) | 2014 | 2013 | ||||||
Demand | $ | 73,665 | $ | 60,473 | ||||
NOW | 46,515 | 45,375 | ||||||
Money Market | 166,224 | 164,678 | ||||||
Savings | 18,721 | 17,593 | ||||||
Time deposits (over $100) | 87,209 | 92,763 | ||||||
Time deposits (under $100) | 138,091 | 148,082 | ||||||
Total deposits | $ | 530,425 | $ | 528,964 | ||||
Maturities of time deposits for the next five years and thereafter | ||||||||
As of | ||||||||
(In thousands) | 31-Dec-14 | |||||||
2015 | 127,060 | |||||||
2016 | 56,604 | |||||||
2017 | 16,281 | |||||||
2018 | 8,384 | |||||||
2019 | 3,624 | |||||||
Thereafter | 13,347 | |||||||
Total certificates of deposit | $ | 225,300 | ||||||
BORROWINGS_AND_SUBORDINATED_DE1
BORROWINGS AND SUBORDINATED DEBENTURES (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Borrowings and Subordinated Debentures [Abstract] | ||||||||||||
FHLB borrowings allocated by the year in which they mature with their corresponding weighted average rates | ||||||||||||
As of | As of | |||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||
(Dollars in thousands) | Amount | Rate | Amount | Rate | ||||||||
Advances maturing in | ||||||||||||
2014 | $ | — | — | % | $ | 10,000 | 0.24 | % | ||||
2015 | 10,000 | 0.71 | % | 10,000 | 0.71 | % | ||||||
2016 | 10,000 | 1.11 | % | 10,000 | 1.11 | % | ||||||
2017 | 25,000 | 1.46 | % | 25,000 | 1.46 | % | ||||||
2018 | 10,000 | 2.01 | % | 10,000 | 2.01 | % | ||||||
Total FHLB borrowings | $ | 55,000 | $ | 65,000 | ||||||||
DERIVATIVE_INSTRUMENTS_AND_HED1
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITY (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||
Interest rate swap, designated as cash flow hedge, effects of derivative in balance sheet | |||||||||||
31-Dec-14 | |||||||||||
Notional | |||||||||||
Contract | Balance Sheet | Expiration | |||||||||
(In thousands) | Amount | Fair Value | Location | Date | |||||||
Derivatives designated as hedging instruments | |||||||||||
Interest rate swaps: | |||||||||||
Effective June 24, 2016 | $ | 15,000 | $ | -187 | Other liabilities | 24-Jun-21 | |||||
Total: | $ | 15,000 | $ | -187 | |||||||
Interest rate swap, designated as cash flow hedge, effects of derivative in OCI | |||||||||||
For the year ended December 31, 2014 | |||||||||||
Amount of Loss | Location of Loss | Amount of Loss | |||||||||
Recognized | Recognized | Recognized | |||||||||
in OCI | in Income | in Income | |||||||||
on Derivatives | on Derivatives | on Derivatives | |||||||||
(In thousands) | (Effective Portion) | (Ineffective Portion) | (Ineffective Portion) | ||||||||
Derivatives designated as hedging instruments | |||||||||||
Interest rate swaps: | |||||||||||
Effective June 24, 2016 | $ | -187 | Not Applicable | $ | — | ||||||
Total: | $ | -187 | $ | — | |||||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
INCOME TAXES [Abstract] | |||||||
Schedule of Components of Income Tax Expense | |||||||
For the years ended December 31, | |||||||
(In thousands) | 2014 | 2013 | |||||
Income tax (benefit) expense | |||||||
Current | $ | -654 | $ | 42 | |||
Deferred | — | - | |||||
Income tax (benefit) expense | $ | -654 | $ | 42 | |||
Statutory Federal Income Tax Rate Reconciliation | |||||||
For the years ended December 31, | |||||||
(In thousands) | 2014 | 2013 | |||||
Computed tax expense at statutory rate | $ | 1,645 | $ | 731 | |||
Non-controlling interest | -186 | — | |||||
Tax-exempt income | - | -22 | |||||
Fines and penalties | 28 | - | |||||
Stock options expense | 71 | - | |||||
Nondeductible expense | 18 | 21 | |||||
Bank owned life insurance | -174 | -183 | |||||
Capital loss carryover-expired | 202 | - | |||||
Charitable contributions carryover-expired | 2 | - | |||||
Refunds-prior year amended tax return filings | -654 | - | |||||
Adjustment to prior year items | -3,584 | 1,933 | |||||
Increase (decrease) in valuation allowance | 1,978 | -2,438 | |||||
Income tax (benefit) expense | $ | -654 | $ | 42 | |||
Deferred Tax Assets and Liabilities | |||||||
As of December 31, | |||||||
(In thousands) | 2014 | 2013 | |||||
Deferred tax assets | |||||||
Allowance for loan and lease losses | $ | 3,495 | $ | 4,648 | |||
Net operating loss carryforward | 23,801 | 18,908 | |||||
Asset valuation reserves | — | 34 | |||||
Escrow settlement reserves | — | 561 | |||||
Security writedowns | 1,855 | 2,193 | |||||
OREO writedowns | 465 | 1,490 | |||||
Investment in partnerships | 2,046 | 1,805 | |||||
Pension obligations | 5,249 | 4,926 | |||||
Unrealized losses on debt securities | — | 2,171 | |||||
Share-based compensation cost | 77 | 143 | |||||
Non-accrual interest | 287 | 134 | |||||
Capital loss carryovers | 1,739 | 2,892 | |||||
Charitable contribution carryovers | 16 | 14 | |||||
Employee bonuses | 91 | — | |||||
Accrued liabilities | 163 | — | |||||
Alternative minimum tax credit carryforward | 282 | — | |||||
Other | 149 | 77 | |||||
Total deferred tax assets before valuation allowance | 39,715 | 39,996 | |||||
Deferred tax liabilities | |||||||
Penalties on delinquent tax certificates | 72 | 39 | |||||
Unrealized gains on AFS debt securities | 308 | — | |||||
Unrealized gains on AFS equity securities | 434 | 429 | |||||
Prepaid deductions | 17 | 190 | |||||
Other | 55 | 8 | |||||
Total deferred tax liabilities | 886 | 666 | |||||
Less valuation allowance | -39,137 | -37,159 | |||||
Net deferred tax (liability) asset, included in other assets | $ | -308 | $ | 2,171 | |||
FINANCIAL_INSTRUMENTS_WITH_OFF1
FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK AND CONCENTRATIONS OF CREDIT RISK (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Commitments, Contingencies, and Concentrations [Abstract] | ||||||||
Contracts of financial instruments represent credit risk | ||||||||
December 31, | December 31, | |||||||
(In thousands) | 2014 | 2013 | ||||||
Financial instruments whose contract amounts represent credit risk: | ||||||||
Open-end lines of credit | $ | 48,929 | $ | 21,182 | ||||
Commitments to extend credit | 6,430 | 200 | ||||||
Standby letters of credit and financial guarantees written | 371 | 2,679 | ||||||
REGULATORY_CAPITAL_REQUIREMENT1
REGULATORY CAPITAL REQUIREMENTS (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Regulatory Capital Requirements [Abstract] | |||||||||||||||||
Royal Bank's capital ratios | |||||||||||||||||
Actual | For capital adequacy purposes | To be well capitalized under prompt corrective action provision | |||||||||||||||
(Dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||
Total capital (to risk-weighted assets) | |||||||||||||||||
At December 31, 2014 | $ | 78,582 | 15.89 | % | $ | 39,573 | 8.00 | % | $ | 49,466 | 10.00 | % | |||||
At December 31, 2013 | $ | 71,417 | 15.61 | % | $ | 36,590 | 8.00 | % | $ | 45,737 | 10.00 | % | |||||
Tier I capital (to risk-weighted assets) | |||||||||||||||||
At December 31, 2014 | $ | 72,330 | 14.62 | % | $ | 19,787 | 4.00 | % | $ | 29,680 | 6.00 | % | |||||
At December 31, 2013 | $ | 65,602 | 14.34 | % | $ | 18,295 | 4.00 | % | $ | 27,442 | 6.00 | % | |||||
Tier I capital (to average assets, leverage) | |||||||||||||||||
At December 31, 2014 | $ | 72,330 | 10.12 | % | $ | 28,585 | 4.00 | % | $ | 35,731 | 5.00 | % | |||||
At December 31, 2013 | $ | 65,602 | 9.13 | % | $ | 28,739 | 4.00 | % | $ | 35,924 | 5.00 | % | |||||
Adjustments to net loss as well as the capital ratios | The tables below reflect the adjustments to the net income as well as the capital ratios for Royal Bank under U.S. GAAP: | ||||||||||||||||
For the year ended | For the year ended | ||||||||||||||||
(In thousands) | 31-Dec-14 | 31-Dec-13 | |||||||||||||||
RAP net income (loss) | $ | 1,924 | $ | -139 | |||||||||||||
Tax lien adjustment, net of noncontrolling interest | 3,170 | 2,844 | |||||||||||||||
U.S. GAAP net income | $ | 5,094 | $ | 2,705 | |||||||||||||
At December 31, 2014 | At December 31, 2013 | ||||||||||||||||
As reported | As adjusted | As reported | As adjusted | ||||||||||||||
under RAP | for U.S. GAAP | under RAP | for U.S. GAAP | ||||||||||||||
Total capital (to risk-weighted assets) | 15.89 | % | 16.44 | % | 15.61 | % | 16.49 | % | |||||||||
Tier I capital (to risk-weighted assets) | 14.62 | % | 15.17 | % | 14.34 | % | 15.22 | % | |||||||||
Tier I capital (to average assets, leverage) | 10.12 | % | 10.52 | % | 9.13 | % | 9.73 | % | |||||||||
Company capital ratios | |||||||||||||||||
Actual | For capital adequacy purposes | To be well capitalized under prompt corrective action provision | |||||||||||||||
(Dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||
Total capital (to risk-weighted assets) | |||||||||||||||||
At December 31, 2014 | $ | 95,944 | 19.20 | % | $ | 39,986 | 8.00 | % | N/A | N/A | |||||||
At December 31, 2013 | $ | 84,384 | 18.09 | % | $ | 37,315 | 8.00 | % | N/A | N/A | |||||||
Tier I capital (to risk-weighted assets) | |||||||||||||||||
At December 31, 2014 | $ | 86,329 | 17.27 | % | $ | 19,993 | 4.00 | % | N/A | N/A | |||||||
At December 31, 2013 | $ | 71,432 | 15.31 | % | $ | 18,658 | 4.00 | % | N/A | N/A | |||||||
Tier I capital (to average assets, leverage) | |||||||||||||||||
At December 31, 2014 | $ | 86,329 | 11.88 | % | $ | 29,056 | 4.00 | % | N/A | N/A | |||||||
At December 31, 2013 | $ | 71,432 | 9.79 | % | $ | 29,178 | 4.00 | % | N/A | N/A | |||||||
Adjustment to Company's capital ratio under RAP | |||||||||||||||||
For the year ended | For the year ended | ||||||||||||||||
(In thousands) | 31-Dec-14 | 31-Dec-13 | |||||||||||||||
U.S. GAAP net income | $ | 5,110 | $ | 2,109 | |||||||||||||
Tax lien adjustment, net of noncontrolling interest | -3,170 | -2,844 | |||||||||||||||
RAP net income (loss) | $ | 1,940 | $ | -735 | |||||||||||||
At December 31, 2014 | At December 31, 2013 | ||||||||||||||||
As reported under U.S. GAAP | As adjusted for RAP | As reported under U.S. GAAP | As adjusted for RAP | ||||||||||||||
Total capital (to risk-weighted assets) | 19.20 | % | 18.67 | % | 18.09 | % | 17.24 | % | |||||||||
Tier I capital (to risk-weighted assets) | 17.27 | % | 16.74 | % | 15.31 | % | 14.10 | % | |||||||||
Tier I capital (to average assets, leverage) | 11.88 | % | 11.49 | % | 9.79 | % | 8.98 | % | |||||||||
PENSION_PLANS_Tables
PENSION PLANS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Pension Plan [Abstract] | ||||||||
Plan's Funded Status and Amounts Recognized in the consolidated Balance Sheets | ||||||||
For the years ended December 31, | ||||||||
(In thousands) | 2014 | 2013 | ||||||
Change in benefit obligation | ||||||||
Benefit obligation at beginning of year | $ | 14,488 | $ | 16,897 | ||||
Service cost | 64 | 81 | ||||||
Interest cost | 538 | 623 | ||||||
Benefits paid | -967 | -981 | ||||||
Actuarial (gain) loss | 1,315 | -2,132 | ||||||
Benefits obligation at end of year | $ | 15,438 | $ | 14,488 | ||||
Amounts recognized in accumulated other comprehensive income (loss) | ||||||||
Unrecognized prior service cost | 90 | 179 | ||||||
Unrecognized actuarial loss | 3,935 | 2,750 | ||||||
AOCI related to pension plan | $ | 4,025 | $ | 2,929 | ||||
Assumptions Used to Determine the Benefit Obligations and the Net Periodic Pension Cost | ||||||||
As of December 31, | ||||||||
2014 | 2013 | |||||||
Discount rate | 3.52 | % | 4.37 | % | ||||
Rate of compensation increase | 4.00 | % | 4.00 | % | ||||
The table below reflects the assumptions used to determine the net periodic pension cost: | ||||||||
As of December 31, | ||||||||
2014 | 2013 | |||||||
Discount rate | 3.52 | % | 4.37 | % | ||||
Rate of compensation increase | 4.00 | % | 4.00 | % | ||||
Schedule of Net Benefit Costs [Table Text Block] | ||||||||
Year ended | ||||||||
December 31, | ||||||||
(In thousands) | 2014 | 2013 | ||||||
Service cost | $ | 64 | $ | 81 | ||||
Interest cost | 538 | 623 | ||||||
Amortization of prior service cost | 90 | 90 | ||||||
Amortization of actuarial loss | 128 | 238 | ||||||
Net periodic benefit cost | $ | 820 | $ | 1,032 | ||||
Benefit Payments to be Made From the Non-qualified Pension Plan | ||||||||
As of December 31, 2014 | ||||||||
Non-Qualified | ||||||||
(In thousands) | Pension Plans | |||||||
2015 | $ | 977 | ||||||
2016 | 1,015 | |||||||
2017 | 1,015 | |||||||
2018 | 1,015 | |||||||
2019 | 1,028 | |||||||
Next five years thereafter | 5,728 | |||||||
STOCK_COMPENSATION_PLANS_Table
STOCK COMPENSATION PLANS (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Outside Director S Stock Option Plan [Member] | ||||||||||||||||
Share-based Payment Award [Line Items] | ||||||||||||||||
Summary of the Status of the Plan | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Weighted | Weighted | -1 | Weighted | |||||||||||||
Average | Average | Average | Average | |||||||||||||
Exercise | Remaining | Intrinsic | Exercise | |||||||||||||
Options | Price | Term (yrs) | Value | Options | Price | |||||||||||
Options outstanding at beginning of year | 25,670 | $ | 22.00 | 1.5 | 58,306 | $ | 21.15 | |||||||||
Forfeited | -4,756 | 21.81 | -24,286 | 21.24 | ||||||||||||
Expired | -8,190 | 22.38 | -8,350 | 18.27 | ||||||||||||
Options outstanding at the end of the year | 12,724 | $ | 21.83 | 0.9 | $ | — | 25,670 | $ | 22.00 | |||||||
Options exercisable at the end of the year | 12,724 | $ | 21.83 | 0.9 | $ | — | 25,670 | $ | 22.00 | |||||||
(1) The aggregate intrinsic value of a stock option in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had they exercised their options on December 31, 2014. The intrinsic value varies based on the changes in the market value in the Company’s stock. Because the exercise price exceeded the market value of the options, the average intrinsic value was $0 at December 31, 2014. | ||||||||||||||||
Information Pertaining to Options Outstanding | ||||||||||||||||
Information pertaining to options outstanding at December 31, 2014 is as follows: | ||||||||||||||||
Options outstanding and exercisable | ||||||||||||||||
Weighted | Weighted | |||||||||||||||
Average | Average | |||||||||||||||
Range of | Number | Exercise | Remaining | |||||||||||||
exercise prices | Outstanding | Price | Term (yrs) | |||||||||||||
$ | 21 | - | $ | 23.00 | 12,724 | $ | 21.83 | 0.9 | ||||||||
12,724 | $ | 21.83 | 0.9 | |||||||||||||
Employee Stock Option Plan And Appreciation Right Plan [Member] | ||||||||||||||||
Share-based Payment Award [Line Items] | ||||||||||||||||
Summary of the Status of the Plan | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Weighted | Weighted | -1 | Weighted | |||||||||||||
Average | Average | Average | Average | |||||||||||||
Exercise | Remaining | Intrinsic | Exercise | |||||||||||||
Options | Price | Term (yrs) | Value | Options | Price | |||||||||||
Options outstanding at beginning of year | 82,780 | $ | 22.06 | 1.1 | 217,561 | $ | 21.50 | |||||||||
Forfeited | -13,309 | 21.89 | -119,137 | 21.53 | ||||||||||||
Expired | -33,859 | 22.38 | -15,644 | 18.27 | ||||||||||||
Options outstanding at the end of the year | 35,612 | $ | 21.82 | 1.0 | $ | — | 82,780 | $ | 22.06 | |||||||
Options exercisable at the end of the year | 35,612 | $ | 21.82 | 1.0 | $ | — | 82,780 | $ | 22.06 | |||||||
(1) The aggregate intrinsic value of a stock option in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had they exercised their options on December 31, 2014. The intrinsic value varies based on the changes in the market value in the Company’s stock. Because the exercise price exceeded the market value of the options, the average intrinsic value was $0 at December 31, 2014. | ||||||||||||||||
Information Pertaining to Options Outstanding | Information pertaining to options outstanding at December 31, 2014 is as follows: | |||||||||||||||
Options outstanding and exercisable | ||||||||||||||||
Weighted | Weighted | |||||||||||||||
Average | Average | |||||||||||||||
Range of | Number | Exercise | Remaining | |||||||||||||
exercise prices | Outstanding | Price | Term (yrs) | |||||||||||||
$ | 21 | - | $ | 23.00 | 35,612 | $ | 21.82 | 1.0 | ||||||||
35,612 | $ | 21.82 | 1.0 | |||||||||||||
Long Term Incentive Plan [Member] | ||||||||||||||||
Share-based Payment Award [Line Items] | ||||||||||||||||
Summary of the Status of the Plan | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Weighted | Weighted | -1 | Weighted | |||||||||||||
Average | Average | Average | Average | |||||||||||||
Exercise | Remaining | Intrinsic | Exercise | |||||||||||||
Options | Price | Term (yrs) | Value | Options | Price | |||||||||||
Options outstanding at beginning of year | 89,386 | $ | 7.95 | 4.9 | 86,226 | $ | 9.22 | |||||||||
Granted | 52,500 | 2.05 | 15,000 | 1.36 | ||||||||||||
Forfeited | -11,177 | 7.81 | -11,840 | 8.83 | ||||||||||||
Options outstanding at the end of the year | 130,709 | $ | 5.60 | 6.4 | $ | — | 89,386 | $ | 7.95 | |||||||
Options exercisable at the end of the year | 68,209 | $ | 8.94 | 3.7 | $ | — | 74,386 | $ | 9.28 | |||||||
Weighted-average fair value of options granted during the year | $ | 1.39 | $ | 0.98 | ||||||||||||
-1 | The aggregate intrinsic value of a stock option in the table above represents the total pre-tax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had they exercised their options on December 31, 2014. The intrinsic value varies based on the changes in the market value in the Company’s stock. Because the exercise price exceeded the market value of the options, the average intrinsic value was $0 at December 31, 2014. | |||||||||||||||
Information Pertaining to Options Outstanding | Information pertaining to options outstanding at December 31, 2014 is as follows: | |||||||||||||||
Options issued and outstanding | ||||||||||||||||
Weighted | Weighted | |||||||||||||||
Average | Average | |||||||||||||||
Range of | Number | Exercise | Remaining | |||||||||||||
exercise prices | Outstanding | Price | Term (yrs) | |||||||||||||
$ | 1.00 | - | $ | 4.00 | 67,500 | $ | 1.90 | 9.3 | ||||||||
$ | 4.01 | - | $ | 10.00 | 42,750 | 4.50 | 3.8 | |||||||||
$ | 10.01 | - | $ | 23.00 | 20,459 | 20.08 | 2.6 | |||||||||
130,709 | $ | 5.60 | 6.4 | |||||||||||||
Detail for Non-vested Shares Under the Plans | ||||||||||||||||
Weighted | ||||||||||||||||
Average | ||||||||||||||||
Exercise | ||||||||||||||||
Options | Price | |||||||||||||||
Non-vested options December 31, 2013 | 15,000 | $ | 1.36 | |||||||||||||
Granted | 52,500 | 2.05 | ||||||||||||||
Vested | -5,000 | 1.36 | ||||||||||||||
Non-vested options December 31, 2014 | 62,500 | $ | 1.94 | |||||||||||||
Schedule of fair value of options granted | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Weighted average risk-free interest rate | 2.26 | % | 1.63 | % | ||||||||||||
Weighted average volatility | 85.29 | % | 94.00 | % | ||||||||||||
Expected dividend yield | — | % | — | % | ||||||||||||
Weighted average expected life | 5.0 years | 5.0 years | ||||||||||||||
EARNINGS_LOSS_PER_COMMON_SHARE1
EARNINGS (LOSS) PER COMMON SHARE (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Income (Loss) Per Common Share [Abstract] | ||||||||||
Schedule of computation of basic and diluted earning per share | ||||||||||
Year ended December 31, 2014 | ||||||||||
Income | Average shares | Per share | ||||||||
(In thousands, except for per share data) | (numerator) | (denominator) | Amount | |||||||
Basic EPS | ||||||||||
Income available to common shareholders | $ | 3,032 | 21,062 | $ | 0.14 | |||||
Diluted EPS | ||||||||||
Income available to common shareholders | $ | 3,032 | 21,070 | $ | 0.14 | |||||
Year ended December 31, 2013 | ||||||||||
Income | Average shares | Per share | ||||||||
(In thousands, except for per share data) | (numerator) | (denominator) | Amount | |||||||
Basic and Diluted EPS | ||||||||||
Loss available to common shareholders | $ | 34 | 13,279 | $ | 0.00 | |||||
COMPREHENSIVE_INCOME_LOSS_Tabl
COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Comprehensive Income (Loss) [Abstract] | |||||||||||
Comprehensive Income (Loss) [Abstract] | |||||||||||
Year ended December 31, 2014 | |||||||||||
Tax | |||||||||||
Before tax | expense | Net of tax | |||||||||
(In thousands) | amount | (benefit) | amount | ||||||||
Unrealized gains on investment securities: | |||||||||||
Unrealized holding gains arising during period | $ | 7,733 | $ | 2,598 | $ | 5,135 | |||||
Less adjustment for impaired investments | -41 | -14 | -27 | ||||||||
Less reclassification adjustment for gains | |||||||||||
realized in net income | 377 | 128 | 249 | ||||||||
Unrealized gains on investment securities | 7,397 | 2,484 | 4,913 | ||||||||
Unrecognized benefit obligation expense: | |||||||||||
Actuarial loss | -1,314 | — | -1,314 | ||||||||
Less reclassification adjustment for amortization | -218 | — | -218 | ||||||||
Unrecognized benefit obligation | -1,096 | — | -1,096 | ||||||||
Unrealized loss on derivative instrument | -187 | — | -187 | ||||||||
Other comprehensive income, net | $ | 6,114 | $ | 2,484 | $ | 3,630 | |||||
Year ended December 31, 2013 | |||||||||||
Tax | |||||||||||
Before tax | expense | Net of tax | |||||||||
(In thousands) | amount | (benefit) | amount | ||||||||
Unrealized losses on investment securities: | |||||||||||
Unrealized holding losses arising during period | $ | -10,291 | $ | -3,572 | $ | -6,719 | |||||
Less reclassification adjustment for gains | |||||||||||
realized in net loss | 158 | 54 | 104 | ||||||||
Unrealized losses on investment securities | -10,449 | -3,626 | -6,823 | ||||||||
Unrecognized benefit obligation expense: | |||||||||||
Actuarial gain | 950 | 323 | 627 | ||||||||
Less reclassification adjustment for amortization | -328 | -112 | -216 | ||||||||
Other comprehensive loss, net | $ | -9,171 | $ | -3,191 | $ | -5,980 | |||||
The other components of accumulated other comprehensive loss included in shareholders’ equity at December 31, 2014 and 2013 are as follows: | |||||||||||
0f | |||||||||||
As of December 31, | |||||||||||
(In thousands) | 2014 | 2013 | |||||||||
Unrecognized benefit obligation | $ | -4,025 | $ | -2,929 | |||||||
Unrealized gains (losses) on AFS investments | 1,720 | -3,193 | |||||||||
Unrealized loss on derivative instrument | -187 | - | |||||||||
Accumulated other comprehensive loss | $ | -2,492 | $ | -6,122 | |||||||
FAIR_VALUE_OF_FINANCIAL_INSTRU1
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value of Financial Instruments [Abstract] | |||||||||||||||||
Schedule of Financial Assets Measured at Fair Value on Recurring Basis | |||||||||||||||||
Fair Value Measurements Using: | |||||||||||||||||
Quoted Prices | |||||||||||||||||
in Active | Significant | ||||||||||||||||
Markets for | Other | Significant | |||||||||||||||
Identical | Observable | Unobservable | |||||||||||||||
As of December 31, 2014 | Assets | Inputs | Inputs | ||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||
Assets: | |||||||||||||||||
Investment securities available for sale | |||||||||||||||||
U.S. government agencies | $ | — | $ | 25,289 | $ | — | $ | 25,289 | |||||||||
Mortgage-backed securities-residential | — | 22,387 | — | 22,387 | |||||||||||||
Collateralized mortgage obligations: | |||||||||||||||||
Issued or guaranteed by U.S. government agencies | — | 168,977 | — | 168,977 | |||||||||||||
Non-agency | — | 3,731 | — | 3,731 | |||||||||||||
Corporate bonds | — | 15,727 | — | 15,727 | |||||||||||||
Municipal bonds | — | 10,173 | — | 10,173 | |||||||||||||
Other securities | — | — | 4,034 | 4,034 | |||||||||||||
Common stocks | 50 | — | — | 50 | |||||||||||||
Total investment securities available for sale | $ | 50 | $ | 246,284 | $ | 4,034 | $ | 250,368 | |||||||||
Liabilities: | |||||||||||||||||
Derivative instruments | |||||||||||||||||
Interest rate swaps | $ | — | $ | 187 | $ | — | $ | 187 | |||||||||
Fair Value Measurements Using: | |||||||||||||||||
Quoted Prices | |||||||||||||||||
in Active | Significant | ||||||||||||||||
Markets for | Other | Significant | |||||||||||||||
Identical | Observable | Unobservable | |||||||||||||||
As of December 31, 2013 | Assets | Inputs | Inputs | ||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||
Investment securities available for sale | |||||||||||||||||
U.S. government agencies | $ | — | $ | 62,036 | $ | — | $ | 62,036 | |||||||||
Mortgage-backed securities-residential | — | 32,097 | — | 32,097 | |||||||||||||
Collateralized mortgage obligations: | |||||||||||||||||
Issued or guaranteed by U.S. government agencies | — | 189,103 | — | 189,103 | |||||||||||||
Non-agency | — | 4,479 | — | 4,479 | |||||||||||||
Corporate bonds | — | 9,438 | — | 9,438 | |||||||||||||
Municipal bonds | — | 6,900 | — | 6,900 | |||||||||||||
Other securities | — | — | 4,625 | 4,625 | |||||||||||||
Common stocks | 49 | — | — | 49 | |||||||||||||
Total investment securities available for sale | $ | 49 | $ | 304,053 | $ | 4,625 | $ | 308,727 | |||||||||
Additional Information About Assets Measured at Fair Value on a Recurring Basis, Level 3 Inputs | |||||||||||||||||
(In thousands) | Other securities | ||||||||||||||||
Investment Securities Available for Sale | 2014 | 2013 | |||||||||||||||
Beginning balance January 1, | $ | 4,625 | $ | 4,164 | |||||||||||||
Total gains/(losses) - (realized/unrealized): | |||||||||||||||||
Included in earnings | 255 | 94 | |||||||||||||||
Included in other comprehensive income | 88 | 850 | |||||||||||||||
Purchases | 14 | 70 | |||||||||||||||
Sales and calls | -948 | -553 | |||||||||||||||
Transfers in and/or out of Level 3 | — | — | |||||||||||||||
Ending balance December 31, | $ | 4,034 | $ | 4,625 | |||||||||||||
Financial Assets Measured at Fair Value on Nonrecurring Basis | |||||||||||||||||
Fair Value Measurements Using: | |||||||||||||||||
Quoted Prices | |||||||||||||||||
in Active | Significant | ||||||||||||||||
Markets for | Other | Significant | |||||||||||||||
Identical | Observable | Unobservable | |||||||||||||||
As of December 31, 2014 | Assets | Inputs | Inputs | ||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||
Assets | |||||||||||||||||
Impaired loans and leases | $ | — | $ | — | $ | 2,812 | $ | 2,812 | |||||||||
Other real estate owned | — | — | 3,418 | 3,418 | |||||||||||||
Fair Value Measurements Using: | |||||||||||||||||
Quoted Prices | |||||||||||||||||
in Active | Significant | ||||||||||||||||
Markets for | Other | Significant | |||||||||||||||
Identical | Observable | Unobservable | |||||||||||||||
As of December 31, 2013 | Assets | Inputs | Inputs | ||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||
Assets | |||||||||||||||||
Impaired loans and leases | $ | — | $ | — | $ | 4,073 | $ | 4,073 | |||||||||
Other real estate owned | — | — | 9,182 | 9,182 | |||||||||||||
Loans and leases held for sale | — | — | 1,446 | 1,446 | |||||||||||||
Schedule of quantitative information about assets measured at fair value on nonrecurring basis | |||||||||||||||||
Qualitative Information about Level 3 Fair Value Measurements | |||||||||||||||||
As of December 31, 2014 | Valuation | Range | |||||||||||||||
(In thousands) | Fair Value | Techniques | Unobservable Input | (Weighted Average) | |||||||||||||
Impaired loans and leases | $ | 2,812 | Appraisal of | Appraisal adjustments | 0.0% | - | -20.00% | (-20.0%) | |||||||||
collateral (1) | Liquidation expenses | 0.0% | - | -24.00% | (-7.8%) | ||||||||||||
Other real estate owned | 3,418 | Appraisal of | Appraisal adjustments | 0.0% | - | -68.60% | (-14.5%) | ||||||||||
collateral (1) | Liquidation expenses | -14.70% | (-14.7%) | ||||||||||||||
Qualitative Information about Level 3 Fair Value Measurements | |||||||||||||||||
As of December 31, 2013 | Valuation | Range | |||||||||||||||
(In thousands) | Fair Value | Techniques | Unobservable Input | (Weighted Average) | |||||||||||||
Impaired loans and leases | $ | 4,073 | Appraisal of | Appraisal adjustments | 0.0% | - | -25.00% | (-2.0%) | |||||||||
collateral (1) | Liquidation expenses | 0.0% | - | -23.20% | (-6.7%) | ||||||||||||
Other real estate owned | 9,182 | Appraisal of | Appraisal adjustments | 0.0% | - | -62.50% | (-11.2%) | ||||||||||
collateral (1) | Liquidation expenses | -2.80% | - | -6.80% | (-5.0%) | ||||||||||||
Loans and leases held for sale | 1,446 | Appraisal of | Agreement of sale | 0.0% | |||||||||||||
collateral (1) | |||||||||||||||||
-1 | Appraisals may be adjusted for qualitative factors such as interior condition of the property and liquidation expenses. | ||||||||||||||||
Fair Value by Balance Sheet Grouping Instruments | |||||||||||||||||
Fair Value Measurements | |||||||||||||||||
At December 31, 2014 | |||||||||||||||||
Quoted Prices | |||||||||||||||||
in Active | Significant | ||||||||||||||||
Markets for | Other | Significant | |||||||||||||||
Identical | Observable | Unobservable | |||||||||||||||
Carrying | Estimated | Assets | Inputs | Inputs | |||||||||||||
(In thousands) | amount | fair value | Level 1 | Level 2 | Level 3 | ||||||||||||
Financial Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 30,790 | $ | 30,790 | $ | 30,790 | $ | — | $ | — | |||||||
Investment securities available for sale | 250,368 | 250,368 | 50 | 246,284 | 4,034 | ||||||||||||
Other investment | 2,250 | 2,250 | — | — | 2,250 | ||||||||||||
Federal Home Loan Bank stock | 2,622 | 2,622 | — | — | 2,622 | ||||||||||||
Loans, net | 403,424 | 400,979 | — | — | 400,979 | ||||||||||||
Accrued interest receivable | 5,270 | 5,270 | — | 5,270 | — | ||||||||||||
Financial Liabilities: | |||||||||||||||||
Demand deposits | 73,665 | 73,665 | — | 73,665 | — | ||||||||||||
NOW and money markets | 212,739 | 212,739 | — | 212,739 | — | ||||||||||||
Savings | 18,721 | 18,721 | — | 18,721 | — | ||||||||||||
Time deposits | 225,300 | 223,788 | — | 223,788 | — | ||||||||||||
Long-term borrowings | 92,426 | 90,022 | — | 90,022 | — | ||||||||||||
Subordinated debt | 25,774 | 25,091 | — | 25,091 | — | ||||||||||||
Accrued interest payable | 726 | 726 | — | 726 | — | ||||||||||||
Derivative Instruments: | |||||||||||||||||
Interest rate swaps | 187 | 187 | — | 187 | — | ||||||||||||
Fair Value Measurements | |||||||||||||||||
At December 31, 2013 | |||||||||||||||||
Quoted Prices | |||||||||||||||||
in Active | Significant | ||||||||||||||||
Markets for | Other | Significant | |||||||||||||||
Identical | Observable | Unobservable | |||||||||||||||
Carrying | Estimated | Assets | Inputs | Inputs | |||||||||||||
(In thousands) | amount | fair value | Level 1 | Level 2 | Level 3 | ||||||||||||
Financial Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 16,844 | $ | 16,844 | $ | 16,844 | $ | — | $ | — | |||||||
Investment securities available for sale | 308,727 | 308,727 | 49 | 304,053 | 4,625 | ||||||||||||
Other investment | 2,250 | 2,250 | — | — | 2,250 | ||||||||||||
Federal Home Loan Bank stock | 4,204 | 4,204 | — | — | 4,204 | ||||||||||||
Loans held for sale | 1,446 | 1,446 | — | — | 1,446 | ||||||||||||
Loans, net | 352,810 | 349,336 | — | — | 349,336 | ||||||||||||
Accrued interest receivable | 7,054 | 7,054 | — | 7,054 | — | ||||||||||||
Financial Liabilities: | |||||||||||||||||
Demand deposits | 60,473 | 60,473 | — | 60,473 | — | ||||||||||||
NOW and money markets | 210,053 | 210,053 | — | 210,053 | — | ||||||||||||
Savings | 17,593 | 17,593 | — | 17,593 | — | ||||||||||||
Time deposits | 240,845 | 239,102 | — | 239,102 | — | ||||||||||||
Short-term borrowings | 10,000 | 10,000 | 10,000 | — | — | ||||||||||||
Long-term borrowings | 97,881 | 94,896 | — | 94,896 | — | ||||||||||||
Subordinated debt | 25,774 | 26,000 | — | 26,000 | — | ||||||||||||
Accrued interest payable | 965 | 965 | — | 965 | — | ||||||||||||
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Segment Information [Abstract] | |||||||||||
Selected segment information and reconciliations to consolidated financial information | |||||||||||
Year ended December 31, 2014 | |||||||||||
Community | |||||||||||
(In thousands) | Banking | Tax Liens | Consolidated | ||||||||
Total assets | $ | 712,508 | $ | 20,045 | $ | 732,553 | |||||
Total deposits | $ | 530,425 | $ | — | $ | 530,425 | |||||
Interest income | $ | 27,484 | $ | 1,300 | $ | 28,784 | |||||
Interest expense | 5,401 | 1,083 | 6,484 | ||||||||
Net interest income | $ | 22,083 | $ | 217 | $ | 22,300 | |||||
(Credit) provision for loan and lease losses | -1,328 | 461 | -867 | ||||||||
Total non-interest income | 2,639 | 896 | 3,535 | ||||||||
Total non-interest expense | 19,785 | 2,079 | 21,864 | ||||||||
Income tax benefit | -654 | — | -654 | ||||||||
Net income (loss) | $ | 6,919 | $ | -1,427 | $ | 5,492 | |||||
Noncontrolling interest | $ | 548 | $ | -166 | $ | 382 | |||||
Net income (loss) attributable to Royal Bancshares | $ | 6,371 | $ | -1,261 | $ | 5,110 | |||||
Year ended December 31, 2013 | |||||||||||
Community | |||||||||||
(In thousands) | Banking | Tax Liens | Consolidated | ||||||||
Total assets | $ | 706,026 | $ | 26,228 | $ | 732,254 | |||||
Total deposits | $ | 528,964 | $ | — | $ | 528,964 | |||||
Interest income | $ | 25,097 | $ | 2,427 | $ | 27,524 | |||||
Interest expense | 5,899 | 1,458 | 7,357 | ||||||||
Net interest income | $ | 19,198 | $ | 969 | $ | 20,167 | |||||
(Credit) provision for loan and lease losses | -1,459 | 587 | -872 | ||||||||
Total non-interest income | 5,476 | 1,388 | 6,864 | ||||||||
Total non-interest expense | 21,959 | 4,371 | 26,330 | ||||||||
Income tax expense | 42 | — | 42 | ||||||||
Net income (loss) | $ | 4,132 | $ | -2,601 | $ | 1,531 | |||||
Noncontrolling interest | $ | 462 | $ | -1,040 | $ | -578 | |||||
Net income (loss) attributable to Royal Bancshares | $ | 3,670 | $ | -1,561 | $ | 2,109 | |||||
CONDENSED_FINANCIAL_INFORMATIO1
CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY [Abstract] | |||||||
CONDENSED BALANCE SHEETS | |||||||
As of December 31, | |||||||
(In thousands) | 2014 | 2013 | |||||
Assets | |||||||
Cash | $ | 6,260 | $ | 1,333 | |||
Investment in non-bank subsidiaries | 31,027 | 29,795 | |||||
Investment in Royal Bank | 50,834 | 42,165 | |||||
Other assets | 10 | 15 | |||||
Total assets | $ | 88,131 | $ | 73,308 | |||
Subordinated debentures | 25,774 | 25,774 | |||||
Other liabilities | 138 | — | |||||
Stockholders' equity | 62,219 | 47,534 | |||||
Total liabilities and stockholders' equity | $ | 88,131 | $ | 73,308 | |||
CONDENSED STATEMENTS OF OPERATIONS | |||||||
For the years ended December 31, | |||||||
(In thousands) | 2014 | 2013 | |||||
Income | |||||||
Other income | $ | 19 | $ | 25 | |||
Total Income | 19 | 25 | |||||
Expenses | |||||||
Other expenses | 281 | 499 | |||||
Interest on subordinated debentures | 623 | 809 | |||||
Total Expenses | 904 | 1,308 | |||||
Loss before income taxes and equity in undistributed net loss | -885 | -1,283 | |||||
Equity in undistributed net income | 5,995 | 3,392 | |||||
Net income | $ | 5,110 | $ | 2,109 | |||
CONDENSED STATEMENT OF CASH FLOWS | |||||||
For the years ended December 31, | |||||||
(In thousands) | 2014 | 2013 | |||||
Cash flows from operating activities | |||||||
Net income | $ | 5,110 | $ | 2,109 | |||
Adjustments to reconcile net income to net cash used in operating activities: | |||||||
Undistributed losses from subsidiaries | -5,995 | -3,392 | |||||
Interest on subordinated debentures | -623 | -2,419 | |||||
Net cash used in operating activities | -1,508 | -3,702 | |||||
Net cash provided by investing activities | — | — | |||||
Cash flows from financing activities | |||||||
Issuance of common stock | 19,794 | — | |||||
Redemption of preferred stock | -13,943 | — | |||||
Other, net | 584 | 296 | |||||
Net cash provided by financing activities | 6,435 | 296 | |||||
Net increase (decrease) in cash and cash equivalents | 4,927 | -3,406 | |||||
Cash and cash equivalents at beginning of period | 1,333 | 4,739 | |||||
Cash and cash equivalents at end of period | $ | 6,260 | $ | 1,333 | |||
SUMMARY_OF_QUARTERLY_RESULTS_U
SUMMARY OF QUARTERLY RESULTS (UNAUDITED) (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
SUMMARY OF QUARTERLY RESULTS (UNAUDITED) [Abstract] | |||||||||||||
Summary of the Consolidated Results of Operations on a Quarterly Basis | |||||||||||||
For the year ended December 31, 2014 | |||||||||||||
(In thousands, except per share data) | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||
Interest income | $ | 7,233 | $ | 7,191 | $ | 7,209 | $ | 7,151 | |||||
Interest expense | 1,614 | 1,623 | 1,622 | 1,625 | |||||||||
Net interest income | 5,619 | 5,568 | 5,587 | 5,526 | |||||||||
Credit for loan and lease losses | -102 | -51 | -75 | -639 | |||||||||
Net interest income after provision | 5,721 | 5,619 | 5,662 | 6,165 | |||||||||
Other income | 743 | 1,204 | 816 | 772 | |||||||||
Other expenses | 6,136 | 5,375 | 5,031 | 5,322 | |||||||||
Income before income tax | 328 | 1,448 | 1,447 | 1,615 | |||||||||
Income tax benefit | -654 | - | - | - | |||||||||
Net income | $ | 982 | $ | 1,448 | $ | 1,447 | $ | 1,615 | |||||
Less net income attributable to noncontrolling interest | 171 | 25 | 69 | 117 | |||||||||
Net income attributable to Royal Bancshares of Pennsylvania, Inc. | $ | 811 | $ | 1,423 | $ | 1,378 | $ | 1,498 | |||||
Net income available to common shareholders | $ | 378 | $ | 1,271 | $ | 549 | $ | 834 | |||||
Net income per common share | |||||||||||||
Basic and diluted | $ | 0.01 | $ | 0.05 | $ | 0.04 | $ | 0.06 | |||||
The sum of the 2014 quarterly amounts for basic and diluted earnings per share do not equal the total earnings per share for 2014 due to 16.7 million shares of common stock issued in the third quarter of 2014. | |||||||||||||
For the year ended December 31, 2013 | |||||||||||||
(In thousands, except per share data) | Fourth Quarter | Third Quarter | Second Quarter | First Quarter | |||||||||
Interest income | $ | 7,069 | $ | 6,960 | $ | 6,743 | $ | 6,752 | |||||
Interest expense | 1,690 | 1,890 | 1,797 | 1,980 | |||||||||
Net interest income | 5,379 | 5,070 | 4,946 | 4,772 | |||||||||
(Credit) provision for loan and lease losses | -676 | 218 | -163 | -251 | |||||||||
Net interest income after provision | 6,055 | 4,852 | 5,109 | 5,023 | |||||||||
Other income | 2,558 | 1,937 | 961 | 1,408 | |||||||||
Other expenses | 6,333 | 6,290 | 7,567 | 6,140 | |||||||||
Income (loss) before income tax | 2,280 | 499 | -1,497 | 291 | |||||||||
Income tax expense | 42 | - | - | - | |||||||||
Net income (loss) | $ | 2,238 | $ | 499 | $ | -1,497 | $ | 291 | |||||
Less net (loss) income attributable to noncontrolling interest | -214 | 157 | -694 | 173 | |||||||||
Net income attributable to Royal Bancshares of Pennsylvania, Inc. | $ | 2,452 | $ | 342 | $ | -803 | $ | 118 | |||||
Net income (loss) available to common shareholders | $ | 1,930 | $ | -178 | $ | -1,321 | $ | -397 | |||||
Net income (loss) per common share | |||||||||||||
Basic and diluted | $ | 0.14 | $ | -0.01 | $ | -0.1 | $ | -0.03 | |||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | Dec. 31, 2014 | Dec. 30, 2013 |
Royal Bank | Crusader Servicing Corporation | ||
Noncontrolling Interest [Line Items] | ||
Total percentage of ownership interest (in hundredths) | 80.00% | 60.00% |
Royal Bank | Royal Tax Lien | ||
Noncontrolling Interest [Line Items] | ||
Total percentage of ownership interest (in hundredths) | 100.00% | 60.00% |
Royal Bank | Royal Bank America Leasing LP | ||
Noncontrolling Interest [Line Items] | ||
Total percentage of ownership interest (in hundredths) | 60.00% | |
Royal Bancshares Capital Trust one and two [Member] | ||
Trust Preferred Securities [Abstract] | ||
Aggregate principal balance | 774,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) | 12 Months Ended |
Dec. 31, 2014 | |
Securities Issued By Government Sponsored Entities [Member] | Customer Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage (in hundredths) | 87.00% |
Sales Revenue, Product Line [Member] | Commercial Real Estate Loans [Member] | Product Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage (in hundredths) | 42.00% |
Sales Revenue, Product Line [Member] | Commercial and industrial [Member] | Product Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage (in hundredths) | 18.00% |
Sales Revenue, Product Line [Member] | Construction and Development Loans [Member] | Product Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage (in hundredths) | 11.00% |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
loan | ||
Summary of Significant Accounting Policies [Abstract] | ||
Other investments, notice period to redeem funds | 60 days | |
Statement [Line Items] | ||
Federal Home Loan Bank ("FHLB") stock | $2,622,000 | $4,204,000 |
Loans Held-for-sale [Abstract] | ||
Number of loans held for sale | 3 | |
Loans and leases held for sale ("LHFS") | 1,446,000 | |
Allowance for Loan and Lease Losses [Abstract] | ||
Rolling average period used to determine historical loss rates | 3 years | |
Advertising Cost [Abstract] | ||
Advertising Expense | 357,000 | 209,000 |
Benefit Plans [Abstract] | ||
Highest consecutive years of employee compensation used to compute benefit | 3 years | |
Years of employment used in benefit computation | 10 years | |
Employer matching contribution to employee's contributions between 1% and 5% (in hundredths) | 100.00% | |
Employee contribution matched by employer, lower range (in hundredths) | 1.00% | |
Employer matching contribution to employees contribution that are within the specified limit (in hundredths) | 5.00% | |
Maximum annual contribution per employee | 2,500 | |
Employer contribution to plan | 147,000 | 0 |
Stock Compensation [Abstract] | ||
Compensation expense | 17,000 | 22,000 |
Income Taxes [Abstract] | ||
Unrecognized Tax Benefits | 0 | |
Net income (loss) per common share [Abstract] | ||
Rate class B shares may be converted to class A shares | 1.15 to 1 | |
Restrictions on Cash and Amounts Due From Banks [Abstract] | ||
Average balances on hand with the Federal Reserve Bank | $100,000 | $100,000 |
Minimum | ||
Derivatives and Hedging Instruments [Abstract] | ||
Percentage of designated hedge risk | 80.00% | |
Maximum | ||
Derivatives and Hedging Instruments [Abstract] | ||
Percentage of designated hedge risk | 125.00% |
REGULATORY_MATTERS_AND_SIGNIFI1
REGULATORY MATTERS AND SIGNIFICANT RISKS OR UNCERTAINTIES - Dividend and Interest Restrictions (Details) (USD $) | 0 Months Ended | 12 Months Ended | |||
Jul. 02, 2014 | Jun. 20, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Feb. 20, 2009 | |
Class of Stock [Line Items] | |||||
Trust preferred securities with suspended interest payments | $25,774,000 | $25,774,000 | |||
Number of institutions under priced auction | 6 | ||||
Series A Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Series A Preferred stock on which quarterly dividend suspended | 30,407 | ||||
Preferred stock dividend in arrears | 6,600,000 | 6,600,000 | |||
Amount approved | $14,000,000 | ||||
Preferred stock, shares issued (in shares) | 30,407 | ||||
Auction price (in dollars per share) | $1,207.11 | ||||
Shares allocated for repurchase (in shares) | 11,551 |
INVESTMENT_SECURITIES_Details
INVESTMENT SECURITIES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | |
security | security | ||
Carrying value and fair value of available for sale investment securities [Abstract] | |||
Total available for sale securities | $248,096,000 | $313,852,000 | $248,096,000 |
Gross unrealized gains | 4,568,000 | 4,334,000 | |
Gross unrealized losses | -9,693,000 | ||
Investment securities available-for-sale (bAFSb), at fair value | 250,368,000 | 308,727,000 | 250,368,000 |
Amortized cost [Abstract] | |||
After 1 but within 5 years | 17,429,000 | ||
After 5 but within 10 years | 25,316,000 | ||
After 10 years | 9,112,000 | ||
Total available for sale debt securities | 245,379,000 | ||
No contractual maturity | 2,717,000 | ||
Total available for sale securities | 248,096,000 | 313,852,000 | 248,096,000 |
Fair value [Abstract] | |||
After 1 but within 5 years | 17,329,000 | ||
After 5 but within 10 years | 25,054,000 | ||
After 10 years | 8,806,000 | ||
Total available for sale debt securities | 246,284,000 | ||
No contractual maturity | 4,084,000 | ||
Fair value | 250,368,000 | 308,727,000 | 250,368,000 |
Proceeds from sales of AFS investment securities | 72,301,000 | 31,046,000 | |
Gross realized gains and losses on the sale of securities recognized in earnings [Abstract] | |||
Gross realized gains | 1,327,000 | 416,000 | |
Gross realized losses | -950,000 | -258,000 | |
Net realized gains | 377,000 | 158,000 | |
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net, Available-for-sale Securities | 41,000 | ||
Investment securities pledged as collateral | 104,000,000 | ||
Available for sale securities, continuous unrealized loss position [Abstract] | |||
Less than 12 months, Fair value | 47,882,000 | 142,071,000 | |
12 months or longer, Fair value | 77,070,000 | 33,664,000 | |
Total, Fair value | 124,952,000 | 175,735,000 | |
Less than 12 months, Gross unrealized losses | -250,000 | -7,322,000 | |
12 months or longer, Gross unrealized losses | -1,812,000 | -2,371,000 | |
Total, Gross unrealized losses | 2,062,000 | -9,693,000 | |
Less than 12 months, number of positions | 20 | 54 | |
12 months or longer, number of positions | 28 | 17 | |
Total , number of positions | 48 | 71 | |
Fair value | 250,368,000 | 308,727,000 | 250,368,000 |
Investment securities net unrealized gain (loss) | 2,300,000 | -5,100,000 | |
Number of securities in an unrealized loss position for less than twelve months | 20 | 54 | |
Number of securities in an unrealized loss position for more than twelve months | 28 | 17 | |
Credit related impairment losses on debt securities held for which a portion of OTTI was recognized in other comprehensive income [Roll Forward] | |||
Reductions for securities sold during the period (realized) | 0 | ||
U.S. Government Agencies [Member] | |||
Carrying value and fair value of available for sale investment securities [Abstract] | |||
Total available for sale securities | 26,123,000 | 68,207,000 | |
Gross unrealized losses | -834,000 | -6,171,000 | |
Investment securities available-for-sale (bAFSb), at fair value | 25,289,000 | 62,036,000 | |
Amortized cost [Abstract] | |||
Total available for sale securities | 26,123,000 | 68,207,000 | |
Fair value [Abstract] | |||
Fair value | 25,289,000 | 62,036,000 | |
Available for sale securities, continuous unrealized loss position [Abstract] | |||
Less than 12 months, Fair value | 48,919,000 | ||
12 months or longer, Fair value | 25,289,000 | 12,267,000 | |
Total, Fair value | 25,289,000 | 61,186,000 | |
Less than 12 months, Gross unrealized losses | -5,035,000 | ||
12 months or longer, Gross unrealized losses | -834,000 | -1,136,000 | |
Total, Gross unrealized losses | -834,000 | -6,171,000 | |
Less than 12 months, number of positions | 16 | ||
12 months or longer, number of positions | 8 | 5 | |
Total , number of positions | 8 | 21 | |
Fair value | 25,289,000 | 62,036,000 | |
Number of investment securities | 8 | ||
Number of securities in an unrealized loss position for less than twelve months | 16 | ||
Number of securities in an unrealized loss position for more than twelve months | 8 | 5 | |
Mortgage-backed Securities-residential [Member] | |||
Carrying value and fair value of available for sale investment securities [Abstract] | |||
Total available for sale securities | 22,073,000 | 32,769,000 | |
Gross unrealized gains | 375,000 | 210,000 | |
Gross unrealized losses | -61,000 | -882,000 | |
Investment securities available-for-sale (bAFSb), at fair value | 22,387,000 | 32,097,000 | |
Amortized cost [Abstract] | |||
No contractual maturity | 22,073,000 | ||
Total available for sale securities | 22,073,000 | 32,769,000 | |
Fair value [Abstract] | |||
No contractual maturity | 22,387,000 | ||
Fair value | 22,387,000 | 32,097,000 | |
Available for sale securities, continuous unrealized loss position [Abstract] | |||
Less than 12 months, Fair value | 18,045,000 | ||
12 months or longer, Fair value | 8,913,000 | 6,276,000 | |
Total, Fair value | 8,913,000 | 24,321,000 | |
Less than 12 months, Gross unrealized losses | -518,000 | ||
12 months or longer, Gross unrealized losses | -61,000 | -364,000 | |
Total, Gross unrealized losses | -61,000 | -882,000 | |
Less than 12 months, number of positions | 7 | ||
12 months or longer, number of positions | 3 | 2 | |
Total , number of positions | 3 | 9 | |
Fair value | 22,387,000 | 32,097,000 | |
Number of investment securities | 3 | ||
Number of securities in an unrealized loss position for less than twelve months | 7 | ||
Number of securities in an unrealized loss position for more than twelve months | 3 | 2 | |
Collateralized Mortgage Obligations, Issued or Guaranteed by U.S. Government Agencies [Member] | |||
Carrying value and fair value of available for sale investment securities [Abstract] | |||
Total available for sale securities | 167,711,000 | 188,194,000 | |
Gross unrealized gains | 2,350,000 | 2,887,000 | |
Gross unrealized losses | -1,084,000 | -1,978,000 | |
Investment securities available-for-sale (bAFSb), at fair value | 168,977,000 | 189,103,000 | |
Amortized cost [Abstract] | |||
No contractual maturity | 167,711,000 | ||
Total available for sale securities | 167,711,000 | 188,194,000 | |
Fair value [Abstract] | |||
No contractual maturity | 168,977,000 | ||
Fair value | 168,977,000 | 189,103,000 | |
Available for sale securities, continuous unrealized loss position [Abstract] | |||
Less than 12 months, Fair value | 36,757,000 | 67,240,000 | |
12 months or longer, Fair value | 38,798,000 | 9,974,000 | |
Total, Fair value | 75,555,000 | 77,214,000 | |
Less than 12 months, Gross unrealized losses | -204,000 | -1,446,000 | |
12 months or longer, Gross unrealized losses | -880,000 | -532,000 | |
Total, Gross unrealized losses | -1,084,000 | -1,978,000 | |
Less than 12 months, number of positions | 12 | 21 | |
12 months or longer, number of positions | 12 | 3 | |
Total , number of positions | 24 | 24 | |
Fair value | 168,977,000 | 189,103,000 | |
Number of investment securities | 24 | ||
Number of securities in an unrealized loss position for less than twelve months | 12 | 21 | |
Number of securities in an unrealized loss position for more than twelve months | 12 | 3 | |
Mortgage-backed Securities, Issued by Private Enterprises [Member] | |||
Carrying value and fair value of available for sale investment securities [Abstract] | |||
Total available for sale securities | 3,738,000 | 4,454,000 | |
Gross unrealized gains | 7,000 | 25,000 | |
Gross unrealized losses | -14,000 | ||
Investment securities available-for-sale (bAFSb), at fair value | 3,731,000 | 4,479,000 | |
Amortized cost [Abstract] | |||
Total available for sale debt securities | 3,738,000 | ||
Total available for sale securities | 3,738,000 | 4,454,000 | |
Fair value [Abstract] | |||
No contractual maturity | 3,731,000 | ||
Fair value | 3,731,000 | 4,479,000 | |
Available for sale securities, continuous unrealized loss position [Abstract] | |||
Less than 12 months, Fair value | 1,432,000 | ||
Total, Fair value | 1,432,000 | ||
Less than 12 months, Gross unrealized losses | -14,000 | ||
Total, Gross unrealized losses | -14,000 | ||
Less than 12 months, number of positions | 1 | ||
Total , number of positions | 1 | ||
Fair value | 3,731,000 | 4,479,000 | |
Number of securities in an unrealized loss position for less than twelve months | 1 | ||
Number of securities with unrealized gains | 1 | ||
Corporate Bonds [Member] | |||
Carrying value and fair value of available for sale investment securities [Abstract] | |||
Total available for sale securities | 15,617,000 | 9,669,000 | |
Gross unrealized gains | 144,000 | 25,000 | |
Gross unrealized losses | -34,000 | -256,000 | |
Investment securities available-for-sale (bAFSb), at fair value | 15,727,000 | 9,438,000 | |
Amortized cost [Abstract] | |||
Total available for sale securities | 15,617,000 | 9,669,000 | |
Fair value [Abstract] | |||
Fair value | 15,727,000 | 9,438,000 | |
Available for sale securities, continuous unrealized loss position [Abstract] | |||
Less than 12 months, Fair value | 8,054,000 | 4,848,000 | |
12 months or longer, Fair value | 991,000 | 965,000 | |
Total, Fair value | 9,045,000 | 5,813,000 | |
Less than 12 months, Gross unrealized losses | -25,000 | -221,000 | |
12 months or longer, Gross unrealized losses | -9,000 | -35,000 | |
Total, Gross unrealized losses | -34,000 | -256,000 | |
Less than 12 months, number of positions | 5 | 5 | |
12 months or longer, number of positions | 1 | 1 | |
Total , number of positions | 6 | 6 | |
Fair value | 15,727,000 | 9,438,000 | |
Number of investment securities | 6 | ||
Number of securities in an unrealized loss position for less than twelve months | 5 | 5 | |
Number of securities in an unrealized loss position for more than twelve months | 1 | 1 | |
Number of securities considered not to be other than temporarily impaired | 6 | ||
Municipal Bonds [Member] | |||
Carrying value and fair value of available for sale investment securities [Abstract] | |||
Total available for sale securities | 10,117,000 | 7,163,000 | |
Gross unrealized gains | 91,000 | ||
Gross unrealized losses | -35,000 | -263,000 | |
Investment securities available-for-sale (bAFSb), at fair value | 10,173,000 | 6,900,000 | |
Amortized cost [Abstract] | |||
Total available for sale securities | 10,117,000 | 7,163,000 | |
Fair value [Abstract] | |||
Fair value | 10,173,000 | 6,900,000 | |
Available for sale securities, continuous unrealized loss position [Abstract] | |||
Less than 12 months, Fair value | 1,639,000 | 3,019,000 | |
12 months or longer, Fair value | 3,079,000 | 3,881,000 | |
Total, Fair value | 4,718,000 | 6,900,000 | |
Less than 12 months, Gross unrealized losses | -7,000 | -102,000 | |
12 months or longer, Gross unrealized losses | -28,000 | -161,000 | |
Total, Gross unrealized losses | -35,000 | -263,000 | |
Less than 12 months, number of positions | 2 | 5 | |
12 months or longer, number of positions | 4 | 4 | |
Total , number of positions | 6 | 9 | |
Fair value | 10,173,000 | 6,900,000 | |
Number of investment securities | 6 | ||
Number of securities in an unrealized loss position for less than twelve months | 2 | 5 | |
Number of securities in an unrealized loss position for more than twelve months | 4 | 4 | |
Private Equity Funds [Member] | |||
Carrying value and fair value of available for sale investment securities [Abstract] | |||
Total available for sale securities | 2,684,000 | 3,363,000 | |
Gross unrealized gains | 1,350,000 | 1,405,000 | |
Gross unrealized losses | -143,000 | ||
Investment securities available-for-sale (bAFSb), at fair value | 4,034,000 | 4,625,000 | |
Amortized cost [Abstract] | |||
Total available for sale securities | 2,684,000 | 3,363,000 | |
Fair value [Abstract] | |||
Fair value | 4,034,000 | 4,625,000 | |
Available for sale securities, continuous unrealized loss position [Abstract] | |||
12 months or longer, Fair value | 301,000 | ||
Total, Fair value | 301,000 | ||
12 months or longer, Gross unrealized losses | -143,000 | ||
Total, Gross unrealized losses | -143,000 | ||
12 months or longer, number of positions | 2 | ||
Total , number of positions | 2 | ||
Fair value | 4,034,000 | 4,625,000 | |
Number of securities in an unrealized loss position for more than twelve months | 2 | ||
Number of securities invested in real estate funds | 6 | ||
Common Stock | |||
Carrying value and fair value of available for sale investment securities [Abstract] | |||
Total available for sale securities | 33,000 | 33,000 | |
Gross unrealized gains | 17,000 | 16,000 | |
Investment securities available-for-sale (bAFSb), at fair value | 50,000 | 49,000 | |
Amortized cost [Abstract] | |||
Total available for sale securities | 33,000 | 33,000 | |
Fair value [Abstract] | |||
Fair value | 50,000 | 49,000 | |
Available for sale securities, continuous unrealized loss position [Abstract] | |||
Fair value | $50,000 | $49,000 | |
Number of securities with unrealized gains | 2 |
LOANS_AND_LEASES_Major_classif
LOANS AND LEASES - Major classifications of LHFI (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Major classifications of loans held for investment [Abstract] | ||
Total LHFI, net of unearned income | $415,132,000 | $366,481,000 |
Loans and leases held for sale ("LHFS") | 1,446,000 | |
Amount of loans transferred from non-accrual LHFI to LHFS | 3,200,000 | |
Proceeds from sales of loans and leases | 3,847,000 | 3,919,000 |
Commercial real estate [Member] | ||
Major classifications of loans held for investment [Abstract] | ||
Total LHFI, net of unearned income | 175,038,000 | 148,293,000 |
Construction and land development [Member] | ||
Major classifications of loans held for investment [Abstract] | ||
Total LHFI, net of unearned income | 45,662,000 | 45,261,000 |
Commercial and industrial [Member] | ||
Major classifications of loans held for investment [Abstract] | ||
Total LHFI, net of unearned income | 76,489,000 | 79,589,000 |
Multi-family [Member] | ||
Major classifications of loans held for investment [Abstract] | ||
Total LHFI, net of unearned income | 13,823,000 | 11,737,000 |
Residential real estate [Member] | ||
Major classifications of loans held for investment [Abstract] | ||
Total LHFI, net of unearned income | 42,992,000 | 25,535,000 |
Leases [Member] | ||
Major classifications of loans held for investment [Abstract] | ||
Total LHFI, net of unearned income | 51,583,000 | 42,524,000 |
Tax certificates [Member] | ||
Major classifications of loans held for investment [Abstract] | ||
Total LHFI, net of unearned income | 7,191,000 | 12,716,000 |
Consumer [Member] | ||
Major classifications of loans held for investment [Abstract] | ||
Total LHFI, net of unearned income | $2,354,000 | $826,000 |
LOANS_AND_LEASES_Risk_Ratings_
LOANS AND LEASES - Risk Ratings for Each Loan Portfolio Segment (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | $415,132 | $366,481 |
Commercial real estate [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 175,038 | 148,293 |
Construction and land development [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 45,662 | 45,261 |
Commercial and industrial [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 76,489 | 79,589 |
Multi-family [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 13,823 | 11,737 |
Residential real estate [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 42,992 | 25,535 |
Leases [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 51,583 | 42,524 |
Tax certificates [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 7,191 | 12,716 |
Consumer [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 2,354 | 826 |
Pass [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 327,232 | 254,712 |
Pass [Member] | Commercial real estate [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 140,045 | 99,525 |
Pass [Member] | Construction and land development [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 12,861 | 14,677 |
Pass [Member] | Commercial and industrial [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 60,500 | 50,478 |
Pass [Member] | Multi-family [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 12,995 | 10,792 |
Pass [Member] | Residential real estate [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 42,033 | 24,903 |
Pass [Member] | Leases [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 51,113 | 41,325 |
Pass [Member] | Tax certificates [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 5,491 | 12,262 |
Pass [Member] | Consumer [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 2,194 | 750 |
Pass Watch [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 68,543 | 60,016 |
Pass Watch [Member] | Commercial real estate [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 27,229 | 32,267 |
Pass Watch [Member] | Construction and land development [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 32,165 | 16,270 |
Pass Watch [Member] | Commercial and industrial [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 8,527 | 10,508 |
Pass Watch [Member] | Multi-family [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 310 | 410 |
Pass Watch [Member] | Leases [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 152 | 485 |
Pass Watch [Member] | Consumer [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 160 | 76 |
Special Mention [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 4,639 | 29,184 |
Special Mention [Member] | Commercial real estate [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 2,512 | 11,572 |
Special Mention [Member] | Construction and land development [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 11,095 | |
Special Mention [Member] | Commercial and industrial [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 1,608 | 5,735 |
Special Mention [Member] | Multi-family [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 518 | 535 |
Special Mention [Member] | Leases [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 1 | 247 |
Substandard [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 4,905 | 12,412 |
Substandard [Member] | Commercial real estate [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 1,568 | 2,604 |
Substandard [Member] | Construction and land development [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 569 | |
Substandard [Member] | Commercial and industrial [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 3,337 | 9,239 |
Nonperforming Financing Receivable [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 9,813 | 10,157 |
Nonperforming Financing Receivable [Member] | Commercial real estate [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 3,684 | 2,325 |
Nonperforming Financing Receivable [Member] | Construction and land development [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 636 | 2,650 |
Nonperforming Financing Receivable [Member] | Commercial and industrial [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 2,517 | 3,629 |
Nonperforming Financing Receivable [Member] | Residential real estate [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 959 | 632 |
Nonperforming Financing Receivable [Member] | Leases [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | 317 | 467 |
Nonperforming Financing Receivable [Member] | Tax certificates [Member] | ||
Risk Ratings for Each Loan Portfolio Segment [Abstract] | ||
Total LHFI, net of unearned income | $1,700 | $454 |
LOANS_AND_LEASES_Aging_Analysi
LOANS AND LEASES - Aging Analysis of Past Due Payments for Each Loan Portfolio Segment (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Aging analysis of past due payments for each loan portfolio segment [Abstract] | ||
30-59 Days Past Due | $720,000 | $2,054,000 |
60-89 Days Past Due | 1,145,000 | 558,000 |
Non-accrual | 9,813,000 | 10,157,000 |
Current | 403,454,000 | 353,712,000 |
Total | 415,132,000 | 366,481,000 |
Interest income lost on non-accrual loans | 1,000,000 | 1,700,000 |
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | 0 | |
Commercial real estate [Member] | ||
Aging analysis of past due payments for each loan portfolio segment [Abstract] | ||
30-59 Days Past Due | 311,000 | 996,000 |
60-89 Days Past Due | 533,000 | |
Non-accrual | 3,684,000 | 2,325,000 |
Current | 170,510,000 | 144,972,000 |
Total | 175,038,000 | 148,293,000 |
Construction and land development [Member] | ||
Aging analysis of past due payments for each loan portfolio segment [Abstract] | ||
Non-accrual | 636,000 | 2,650,000 |
Current | 45,026,000 | 42,611,000 |
Total | 45,662,000 | 45,261,000 |
Commercial and industrial [Member] | ||
Aging analysis of past due payments for each loan portfolio segment [Abstract] | ||
30-59 Days Past Due | 92,000 | 115,000 |
60-89 Days Past Due | 449,000 | 49,000 |
Non-accrual | 2,517,000 | 3,629,000 |
Current | 73,431,000 | 75,796,000 |
Total | 76,489,000 | 79,589,000 |
Multi-family [Member] | ||
Aging analysis of past due payments for each loan portfolio segment [Abstract] | ||
Current | 13,823,000 | 11,737,000 |
Total | 13,823,000 | 11,737,000 |
Residential real estate [Member] | ||
Aging analysis of past due payments for each loan portfolio segment [Abstract] | ||
30-59 Days Past Due | 165,000 | 458,000 |
60-89 Days Past Due | 162,000 | 262,000 |
Non-accrual | 959,000 | 632,000 |
Current | 41,706,000 | 24,183,000 |
Total | 42,992,000 | 25,535,000 |
Leases [Member] | ||
Aging analysis of past due payments for each loan portfolio segment [Abstract] | ||
30-59 Days Past Due | 152,000 | 485,000 |
60-89 Days Past Due | 1,000 | 247,000 |
Non-accrual | 317,000 | 467,000 |
Current | 51,113,000 | 41,325,000 |
Total | 51,583,000 | 42,524,000 |
Tax certificates [Member] | ||
Aging analysis of past due payments for each loan portfolio segment [Abstract] | ||
Non-accrual | 1,700,000 | 454,000 |
Current | 5,491,000 | 12,262,000 |
Total | 7,191,000 | 12,716,000 |
Consumer [Member] | ||
Aging analysis of past due payments for each loan portfolio segment [Abstract] | ||
Current | 2,354,000 | 826,000 |
Total | $2,354,000 | $826,000 |
LOANS_AND_LEASES_Impaired_Loan
LOANS AND LEASES - Impaired Loans (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Impaired Loans [Abstract] | ||
Cash collected on non accrual and impaired loan | $7,000,000 | $16,100,000 |
Amount credited to principal balance outstanding | 6,400,000 | 15,300,000 |
Summary of impaired loans [Abstract] | ||
Impaired loans with a valuation allowance | 3,274,000 | 3,835,000 |
Impaired loans without a valuation allowance | 12,804,000 | 14,671,000 |
Valuation allowance related to impaired loans | 1,041,000 | 886,000 |
Average recorded investment [Abstract] | ||
Average investment in impaired loans and leases | 17,077,000 | 24,714,000 |
Interest income recognized on impaired loans and leases | 377,000 | 559,000 |
Interest income recognized on a cash basis on impaired loans and leases | $377,000 | $27,000 |
LOANS_AND_LEASES_Troubled_Debt
LOANS AND LEASES - Troubled Debt Restructuring (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
loan | loan | |
Financing Receivable, Modifications [Line Items] | ||
Number of loans | 12,000 | 12 |
Total TDRs | $8,759 | $12,084 |
Financing Receivable New Modifications for the Period [Abstract] | ||
Number of loans | 3 | 3 |
Term | 232 | |
Combination of types | 27 | 3,787 |
Total | 259 | 3,787 |
Pre-Modification Outstanding Recorded Investment | 261 | 3,848 |
Post-Modification Outstanding Recorded Investment | 261 | 3,848 |
Accrual Status [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Total TDRs | 6,573 | 9,524 |
Non Accrual Status [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Total TDRs | 2,186 | 2,560 |
Commercial real estate [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of loans | 2,000 | 3 |
Total TDRs | 2,856 | 3,847 |
Financing Receivable New Modifications for the Period [Abstract] | ||
Number of loans | 2 | |
Combination of types | 3,705 | |
Total | 3,705 | |
Pre-Modification Outstanding Recorded Investment | 3,761 | |
Post-Modification Outstanding Recorded Investment | 3,761 | |
Commercial real estate [Member] | Accrual Status [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Total TDRs | 2,856 | 3,847 |
Construction and land development [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of loans | 3,000 | 4 |
Total TDRs | 683 | 1,736 |
Construction and land development [Member] | Accrual Status [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Total TDRs | 47 | 1,257 |
Construction and land development [Member] | Non Accrual Status [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Total TDRs | 636 | 479 |
Commercial and industrial [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of loans | 6,000 | 3 |
Total TDRs | 5,118 | 6,380 |
Financing Receivable New Modifications for the Period [Abstract] | ||
Number of loans | 3 | 1 |
Term | 232 | |
Combination of types | 27 | 82 |
Total | 259 | 82 |
Pre-Modification Outstanding Recorded Investment | 261 | 87 |
Post-Modification Outstanding Recorded Investment | 261 | 87 |
Commercial and industrial [Member] | Accrual Status [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Total TDRs | 3,670 | 4,420 |
Commercial and industrial [Member] | Non Accrual Status [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Total TDRs | 1,448 | 1,960 |
Residential real estate [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Number of loans | 1,000 | 2 |
Total TDRs | 102 | 121 |
Residential real estate [Member] | Non Accrual Status [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Total TDRs | $102 | $121 |
ALLOWANCE_FOR_LOAN_AND_LEASE_L2
ALLOWANCE FOR LOAN AND LEASE LOSSES - Changes in Allowance for Loan and Lease Losses (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Allowance for Loan and Lease Losses [Roll Forward] | ||
Beginning balance | $13,671 | $17,261 |
Charge-offs | -2,121 | -3,893 |
Recoveries | 1,025 | 1,175 |
(Credit) provision | -867 | -872 |
Ending balance | 11,708 | 13,671 |
Ending balance: related to loans individually evaluated for impairment | 1,041 | 886 |
Ending balance: related to loans collectively evaluated for impairment | 10,667 | 12,785 |
LHFI [Abstract] | ||
Ending balance | 415,132 | 366,481 |
Ending balance: individually evaluated for impairment | 16,078 | 18,506 |
Ending balance: collectively evaluated for impairment | 399,054 | 347,975 |
Commercial real estate [Member] | ||
Allowance for Loan and Lease Losses [Roll Forward] | ||
Beginning balance | 5,498 | 8,750 |
Charge-offs | -354 | -1,684 |
Recoveries | 600 | |
(Credit) provision | -692 | -2,168 |
Ending balance | 4,452 | 5,498 |
Ending balance: related to loans individually evaluated for impairment | 200 | 331 |
Ending balance: related to loans collectively evaluated for impairment | 4,252 | 5,167 |
LHFI [Abstract] | ||
Ending balance | 175,038 | 148,293 |
Ending balance: individually evaluated for impairment | 6,795 | 5,325 |
Ending balance: collectively evaluated for impairment | 168,243 | 142,968 |
Construction and land development [Member] | ||
Allowance for Loan and Lease Losses [Roll Forward] | ||
Beginning balance | 2,316 | 2,987 |
Charge-offs | -172 | -820 |
Recoveries | 940 | 297 |
(Credit) provision | -792 | -148 |
Ending balance | 2,292 | 2,316 |
Ending balance: related to loans collectively evaluated for impairment | 2,292 | 2,316 |
LHFI [Abstract] | ||
Ending balance | 45,662 | 45,261 |
Ending balance: individually evaluated for impairment | 683 | 3,907 |
Ending balance: collectively evaluated for impairment | 44,979 | 41,354 |
Commercial and industrial [Member] | ||
Allowance for Loan and Lease Losses [Roll Forward] | ||
Beginning balance | 3,006 | 1,924 |
Charge-offs | -452 | -383 |
Recoveries | 27 | 17 |
(Credit) provision | -801 | 1,448 |
Ending balance | 1,780 | 3,006 |
Ending balance: related to loans individually evaluated for impairment | 301 | 452 |
Ending balance: related to loans collectively evaluated for impairment | 1,479 | 2,554 |
LHFI [Abstract] | ||
Ending balance | 76,489 | 79,589 |
Ending balance: individually evaluated for impairment | 5,846 | 8,049 |
Ending balance: collectively evaluated for impairment | 70,643 | 71,540 |
Multi-family [Member] | ||
Allowance for Loan and Lease Losses [Roll Forward] | ||
Beginning balance | 402 | 654 |
(Credit) provision | -117 | -252 |
Ending balance | 285 | 402 |
Ending balance: related to loans collectively evaluated for impairment | 285 | 402 |
LHFI [Abstract] | ||
Ending balance | 13,823 | 11,737 |
Ending balance: collectively evaluated for impairment | 13,823 | 11,737 |
Residential real estate [Member] | ||
Allowance for Loan and Lease Losses [Roll Forward] | ||
Beginning balance | 473 | 1,098 |
Charge-offs | -46 | |
Recoveries | 15 | 158 |
(Credit) provision | 128 | -737 |
Ending balance | 616 | 473 |
Ending balance: related to loans individually evaluated for impairment | 28 | 19 |
Ending balance: related to loans collectively evaluated for impairment | 588 | 454 |
LHFI [Abstract] | ||
Ending balance | 42,992 | 25,535 |
Ending balance: individually evaluated for impairment | 959 | 632 |
Ending balance: collectively evaluated for impairment | 42,033 | 24,903 |
Leases [Member] | ||
Allowance for Loan and Lease Losses [Roll Forward] | ||
Beginning balance | 1,223 | 1,108 |
Charge-offs | -793 | -382 |
Recoveries | 42 | 29 |
(Credit) provision | 957 | 468 |
Ending balance | 1,429 | 1,223 |
Ending balance: related to loans individually evaluated for impairment | 80 | 60 |
Ending balance: related to loans collectively evaluated for impairment | 1,349 | 1,163 |
LHFI [Abstract] | ||
Ending balance | 51,583 | 42,524 |
Ending balance: individually evaluated for impairment | 95 | 139 |
Ending balance: collectively evaluated for impairment | 51,488 | 42,385 |
Tax certificates [Member] | ||
Allowance for Loan and Lease Losses [Roll Forward] | ||
Beginning balance | 555 | 472 |
Charge-offs | -350 | -578 |
Recoveries | 1 | 74 |
(Credit) provision | 461 | 587 |
Ending balance | 667 | 555 |
Ending balance: related to loans individually evaluated for impairment | 432 | 24 |
Ending balance: related to loans collectively evaluated for impairment | 235 | 531 |
LHFI [Abstract] | ||
Ending balance | 7,191 | 12,716 |
Ending balance: individually evaluated for impairment | 1,700 | 454 |
Ending balance: collectively evaluated for impairment | 5,491 | 12,262 |
Consumer [Member] | ||
Allowance for Loan and Lease Losses [Roll Forward] | ||
Beginning balance | 15 | 29 |
(Credit) provision | 23 | -14 |
Ending balance | 38 | 15 |
Ending balance: related to loans collectively evaluated for impairment | 38 | 15 |
LHFI [Abstract] | ||
Ending balance | 2,354 | 826 |
Ending balance: collectively evaluated for impairment | 2,354 | 826 |
Unallocated [Member] | ||
Allowance for Loan and Lease Losses [Roll Forward] | ||
Beginning balance | 183 | 239 |
(Credit) provision | -34 | -56 |
Ending balance | 149 | 183 |
Ending balance: related to loans collectively evaluated for impairment | $149 | $183 |
ALLOWANCE_FOR_LOAN_AND_LEASE_L3
ALLOWANCE FOR LOAN AND LEASE LOSSES - Loans that were Evaluated for Impairment by Loan Segment (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Unpaid principal balance [Abstract] | ||
With no related allowance recorded | $14,004 | $21,151 |
With an allowance recorded | 9,424 | 9,315 |
Recorded investment [Abstract] | ||
With no related allowance recorded | 12,804 | 14,671 |
With an allowance recorded | 3,274 | 3,835 |
Related allowance [Abstract] | ||
Related allowance | 1,041 | 886 |
Average recorded investment [Abstract] | ||
With no related allowance recorded | 13,975 | 18,100 |
With an allowance recorded | 2,479 | 5,655 |
Interest income recognized [Abstract] | ||
With no related allowance recorded | 377 | 559 |
Commercial real estate [Member] | ||
Unpaid principal balance [Abstract] | ||
With no related allowance recorded | 6,632 | 4,429 |
With an allowance recorded | 926 | 1,435 |
Recorded investment [Abstract] | ||
With no related allowance recorded | 6,113 | 4,158 |
With an allowance recorded | 682 | 1,435 |
Related allowance [Abstract] | ||
Related allowance | 200 | 331 |
Average recorded investment [Abstract] | ||
With no related allowance recorded | 5,089 | 7,956 |
With an allowance recorded | 529 | 1,879 |
Interest income recognized [Abstract] | ||
With no related allowance recorded | 98 | 73 |
Construction and land development [Member] | ||
Unpaid principal balance [Abstract] | ||
With no related allowance recorded | 894 | 9,850 |
Recorded investment [Abstract] | ||
With no related allowance recorded | 683 | 3,907 |
Average recorded investment [Abstract] | ||
With no related allowance recorded | 2,233 | 3,933 |
With an allowance recorded | 145 | 381 |
Interest income recognized [Abstract] | ||
With no related allowance recorded | 71 | 209 |
Commercial and industrial [Member] | ||
Unpaid principal balance [Abstract] | ||
With no related allowance recorded | 5,358 | 6,693 |
With an allowance recorded | 2,500 | 2,592 |
Recorded investment [Abstract] | ||
With no related allowance recorded | 5,118 | 6,491 |
With an allowance recorded | 728 | 1,290 |
Related allowance [Abstract] | ||
Related allowance | 301 | 452 |
Average recorded investment [Abstract] | ||
With no related allowance recorded | 5,786 | 5,960 |
With an allowance recorded | 688 | 2,456 |
Interest income recognized [Abstract] | ||
With no related allowance recorded | 208 | 250 |
Residential real estate [Member] | ||
Unpaid principal balance [Abstract] | ||
With an allowance recorded | 1,068 | 827 |
Recorded investment [Abstract] | ||
With an allowance recorded | 959 | 631 |
Related allowance [Abstract] | ||
Related allowance | 28 | 19 |
Average recorded investment [Abstract] | ||
With no related allowance recorded | 84 | |
With an allowance recorded | 864 | 492 |
Interest income recognized [Abstract] | ||
With no related allowance recorded | 27 | |
Leases [Member] | ||
Unpaid principal balance [Abstract] | ||
With an allowance recorded | 95 | 139 |
Recorded investment [Abstract] | ||
With an allowance recorded | 95 | 139 |
Related allowance [Abstract] | ||
Related allowance | 80 | 60 |
Average recorded investment [Abstract] | ||
With an allowance recorded | 108 | 106 |
Tax certificates [Member] | ||
Unpaid principal balance [Abstract] | ||
With no related allowance recorded | 1,120 | 179 |
With an allowance recorded | 4,835 | 4,322 |
Recorded investment [Abstract] | ||
With no related allowance recorded | 890 | 115 |
With an allowance recorded | 810 | 340 |
Related allowance [Abstract] | ||
Related allowance | 432 | 24 |
Average recorded investment [Abstract] | ||
With no related allowance recorded | 867 | 167 |
With an allowance recorded | $145 | $341 |
ALLOWANCE_FOR_LOAN_AND_LEASE_L4
ALLOWANCE FOR LOAN AND LEASE LOSSES - Impaired LHFI - Average Recorded Investment and Interest Income (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Average recorded investment [Abstract] | ||
Average recorded investment | $17,077 | $24,714 |
Interest income recognized [Abstract] | ||
Interest income recognized | $377 | $27 |
OTHER_REAL_ESTATE_OWNED_Change
OTHER REAL ESTATE OWNED - Changes in OREO (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Foreclosed Property [Roll Forward] | ||
Beginning balance | $9,617,000 | $13,435,000 |
Net proceeds from sales | -4,306,000 | -12,779,000 |
Net gains (losses) on sales | 743,000 | 1,427,000 |
Transfers in | 2,919,000 | 9,051,000 |
Cash additions | 1,330,000 | |
Impairment charge | -524,000 | -1,517,000 |
Ending balance | 9,779,000 | 9,617,000 |
Loans [Member] | ||
Foreclosed Property [Roll Forward] | ||
Beginning balance | 1,725,000 | 11,365,000 |
Net proceeds from sales | -1,336,000 | -8,869,000 |
Net gains (losses) on sales | 59,000 | 228,000 |
Transfers in | 100,000 | |
Impairment charge | -99,000 | -1,099,000 |
Ending balance | 349,000 | 1,725,000 |
Tax Lien [Member] | ||
Foreclosed Property [Roll Forward] | ||
Beginning balance | 7,892,000 | 2,070,000 |
Net proceeds from sales | -2,970,000 | -3,910,000 |
Net gains (losses) on sales | 684,000 | 1,199,000 |
Transfers in | 2,919,000 | 8,951,000 |
Cash additions | 1,330,000 | |
Impairment charge | -425,000 | -418,000 |
Ending balance | $9,430,000 | $7,892,000 |
OTHER_REAL_ESTATE_OWNED_Compos
OTHER REAL ESTATE OWNED - Composition and Other Information (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Composition of OREO | |||
Other real estate owned (OREO) | $9,779,000 | $9,617,000 | $13,435,000 |
Proceeds from sale of collateral related to other real estate owned | 4,306,000 | 12,779,000 | |
Net gains on sales of other real estate owned | 743,000 | 1,427,000 | |
Impairment charge for OREO | 524,000 | 1,517,000 | |
Loans [Member] | |||
Composition of OREO | |||
Other real estate owned (OREO) | 349,000 | 1,725,000 | 11,365,000 |
Proceeds from sale of collateral related to other real estate owned | 1,336,000 | 8,869,000 | |
Net gains on sales of other real estate owned | 59,000 | 228,000 | |
Impairment charge for OREO | 99,000 | 1,099,000 | |
Number of Real Estate Properties | 3 | ||
Loans, Land [Member] | |||
Composition of OREO | |||
Other real estate owned (OREO) | 229,000 | ||
Loans, Residential Real Estate [Member] | |||
Composition of OREO | |||
Other real estate owned (OREO) | 120,000 | ||
Tax Lien [Member] | |||
Composition of OREO | |||
Other real estate owned (OREO) | 9,430,000 | 7,892,000 | 2,070,000 |
Proceeds from sale of collateral related to other real estate owned | 2,970,000 | 3,910,000 | |
Net gains on sales of other real estate owned | 684,000 | 1,199,000 | |
Impairment charge for OREO | $425,000 | $418,000 | |
Number of Real Estate Properties | 79 |
PREMISES_AND_EQUIPMENT_Details
PREMISES AND EQUIPMENT (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
item | ||
Premises and Equipment [Line Items] | ||
Premises and equipment | $15,989,000 | $15,431,000 |
Less accumulated depreciation and amortization | -10,788,000 | -10,956,000 |
Property, Plant and Equipment, Net, Total | 5,201,000 | 4,475,000 |
Depreciation and amortization expense | 569,000 | 451,000 |
Number of branches relocated | 4 | |
Land | ||
Premises and Equipment [Line Items] | ||
Premises and equipment | 2,135,000 | 2,200,000 |
Building And Building Improvements | ||
Premises and Equipment [Line Items] | ||
Premises and equipment | 6,160,000 | 6,225,000 |
Building And Building Improvements | Minimum | ||
Premises and Equipment [Line Items] | ||
Estimated Useful Lives | 5 years | |
Building And Building Improvements | Maximum | ||
Premises and Equipment [Line Items] | ||
Estimated Useful Lives | 39 years | |
Furniture And Fixtures And Equipment | ||
Premises and Equipment [Line Items] | ||
Premises and equipment | $7,694,000 | $7,006,000 |
Furniture And Fixtures And Equipment | Minimum | ||
Premises and Equipment [Line Items] | ||
Estimated Useful Lives | 3 years | |
Furniture And Fixtures And Equipment | Maximum | ||
Premises and Equipment [Line Items] | ||
Estimated Useful Lives | 7 years |
LEASE_COMMITMENTS_Details
LEASE COMMITMENTS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Minimum rental commitments under the leases | ||
2015 | $1,145,000 | |
2016 | 1,143,000 | |
2017 | 1,132,000 | |
2018 | 1,115,000 | |
2019 | 635,000 | |
Thereafter | 2,049,000 | |
Total lease commitments | 7,219,000 | |
Rent expense | $890,000 | $785,000 |
Option to extend lease period minimum | 1 year | |
Option to extend lease period maximum | 10 years | |
Maximum | ||
Minimum rental commitments under the leases | ||
Lease expiration date | 31-Dec-24 |
DEPOSITS_Details
DEPOSITS (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deposits [Abstract] | ||
Demand | $73,665 | $60,473 |
NOW | 46,515 | 45,375 |
Money Market | 166,224 | 164,678 |
Deposits, Savings Deposits | 18,721 | 17,593 |
Time deposits (over $100) | 87,209 | 92,763 |
Time deposits (under $100) | 138,091 | 148,082 |
Total deposits | 530,425 | 528,964 |
Maturities of time deposits for the next five years and thereafter [Abstract] | ||
2015 | 127,060 | |
2016 | 56,604 | |
2017 | 16,281 | |
2018 | 8,384 | |
2019 | 3,624 | |
Thereafter | 13,347 | |
Total certificates of deposits | $225,300 |
BORROWINGS_AND_SUBORDINATED_DE2
BORROWINGS AND SUBORDINATED DEBENTURES (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Advances from the Federal Home Loan Bank [Abstract] | ||
Line of credit with federal home loan bank, amount | $188,000,000 | |
Federal Home Loan Bank, advances, weighted average rate | 1.36% | 1.19% |
Federal Home Loan Bank, advances, activity for year, average balance of agreements outstanding | 59,400,000 | 64,400,000 |
Federal Home Loan Bank, advances, general debt obligations, disclosures, collateral pledged | 40,200,000 | |
Amount [Abstract] | ||
Advances maturing in 2014 | 10,000,000 | |
Advances maturing in 2015 | 10,000,000 | 10,000,000 |
Advances maturing in 2016 | 10,000,000 | 10,000,000 |
Advances maturing in 2017 | 25,000,000 | 25,000,000 |
Advances maturing in 2018 | 10,000,000 | 10,000,000 |
Total FHLB borrowings | 55,000,000 | 65,000,000 |
Rate [Abstract] | ||
Advances maturing in 2014 (as a percent) | 0.24% | |
Advances maturing in 2015 (as a percent) | 0.71% | 0.71% |
Advances maturing in 2016 (as a percent) | 1.11% | 1.11% |
Advances maturing in 2017 (as a percent) | 1.46% | 1.46% |
Advances maturing in 2018 (as a percent) | 2.01% | 2.01% |
Repayments of Long-term Debt | 5,455,000 | 50,452,000 |
Market value of investment securities pledged as collateral | 104,000,000 | |
Line of credit maximum borrowing capacity | 10,000,000 | |
Outstanding line of credit | 0 | |
Notes payable [Member] | ||
Rate [Abstract] | ||
Notes payable with PNC Bank, prepayment penalty | 402,000 | |
Repayments of Long-term Debt | 5,000,000 | |
Notes payable [Member] | Notes Payable To PNCBank Due August2016 Member | ||
Rate [Abstract] | ||
Notes payable with PNC Bank | 2,400,000 | 2,900,000 |
Description of variable rate basis on notes payable | one month LIBOR | |
Interest rate on notes payable (as a percent) | 0.31% | |
Notes payable [Member] | Notes PayableTo PNCBank Due January2018 Member | ||
Rate [Abstract] | ||
Notes payable with PNC Bank | 35,000,000 | 40,000,000 |
Weighted average interest rate on other borrowings from PNC Bank (as a percent) | 3.65% | |
Market value of investment securities pledged as collateral | $43,400,000 | |
Notes payable [Member] | London Interbank Offered Rate (LIBOR) [Member] | Notes Payable To PNCBank Due August2016 Member | ||
Rate [Abstract] | ||
Trust preferred securities basis spread on variable rate (as a percent) | 0.15% |
BORROWINGS_AND_SUBORDINATED_DE3
BORROWINGS AND SUBORDINATED DEBENTURES , Subordinated Debentures (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
trust | ||
Subordinated Debentures [Line Items] | ||
Junior subordinated debenture owed to unconsolidated subsidiary trust | $25,774,000 | $25,774,000 |
Number of Delaware trust affiliates | 2 | |
Aggregate principal amount, common securities | 20,000,000 | |
Royal Bancshares Capital Trust I [Member] | Common Stock | ||
Subordinated Debentures [Line Items] | ||
Aggregate principal amount, common securities | 387,000 | |
Royal Bancshares Capital Trust I [Member] | Trust Preferred Securities [Member] | ||
Subordinated Debentures [Line Items] | ||
Aggregate principal amount, capital securities | 12,500,000 | |
Trust I [Member] | ||
Subordinated Debentures [Line Items] | ||
Junior subordinated debenture owed to unconsolidated subsidiary trust | 12,900,000 | |
Interest rate on notes payable (as a percent) | 2.39% | |
Trust I [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Subordinated Debentures [Line Items] | ||
Description of variable rate basis on notes payable | 3-month LIBOR | |
Trust preferred securities basis spread on variable rate (as a percent) | 2.15% | |
Trust II [Member] | ||
Subordinated Debentures [Line Items] | ||
Junior subordinated debenture owed to unconsolidated subsidiary trust | $12,900,000 |
DERIVATIVE_INSTRUMENTS_AND_HED2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITY (Details) (Designated as Hedging Instrument [Member], USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Derivatives, Fair Value [Line Items] | |
Notional contract amount | $15,000 |
Derivative liabilities | -187 |
Interest Rate Swap [Member] | Other Liabilities [Member] | |
Derivatives, Fair Value [Line Items] | |
Notional contract amount | 15,000 |
Derivative liabilities | ($187) |
DERIVATIVE_INSTRUMENTS_AND_HED3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITY (Details 2) (Designated as Hedging Instrument [Member], USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Derivative Instruments, Gain (Loss) [Line Items] | |
Amount of Loss Recognized in OCI | ($187) |
Interest Rate Swap [Member] | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Amount of Loss Recognized in OCI | ($187) |
INCOME_TAXES_Components_of_Inc
INCOME TAXES - Components of Income Tax (Benefit) Expense (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Income tax (benefit) expense | ||||
Current | ($654) | $42 | ||
Income tax (benefit) expense | ($654) | $42 | ($654) | $42 |
INCOME_TAXES_Effective_Income_
INCOME TAXES - Effective Income Tax Rate Reconciliation (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
INCOME TAXES [Abstract] | ||||
Statutory federal income tax rate (in hundredths) | 34.00% | |||
Statutory federal income tax rate reconciliation [Abstract] | ||||
Computed tax benefit at statutory rate | $1,645 | $731 | ||
Non-controlling interest | -186 | |||
Tax-exempt income | -22 | |||
Fines and penalties | 28 | |||
Stock options expense | 71 | |||
Nondeductible expense | 18 | 21 | ||
Bank owned life insurance | -174 | -183 | ||
Capital loss carryover-expired | 202 | |||
Charitable contributions carryover-expired | 2 | |||
Refunds-prior year amended tax return filings | -654 | |||
Adjustment to prior year items | -3,584 | 1,933 | ||
Increase (decrease) in valuation allowance | 1,978 | -2,438 | ||
Income tax (benefit) expense | ($654) | $42 | ($654) | $42 |
INCOME_TAXES_Deferred_tax_asse
INCOME TAXES - Deferred tax assets and liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred tax assets [Abstract] | ||
Allowance for loan and lease losses | $3,495 | $4,648 |
Net operating loss carryforward | 23,801 | 18,908 |
Asset valuation reserves | 34 | |
Escrow settlement reserve | 561 | |
Security writedowns | 1,855 | 2,193 |
OREO writedowns | 465 | 1,490 |
Investment in partnerships | 2,046 | 1,805 |
Pension obligations | 5,249 | 4,926 |
Unrealized losses on debt securities | 2,171 | |
Share-based compensation cost | 77 | 143 |
Non-accrual interest | 287 | 134 |
Capital loss carryover | 1,739 | 2,892 |
Charitable contribution carryovers | 16 | 14 |
Employee bonuses | 91 | |
Accrued liabilities | 163 | |
Alternative minimum tax credit carryforward | 282 | |
Other | 149 | 77 |
Deferred tax assets before valuation allowance | 39,715 | 39,996 |
Deferred tax liabilities [Abstract] | ||
Penalties on delinquent tax certificates | 72 | 39 |
Unrealized gains on AFS debt securities | 308 | |
Unrealized gains on AFS equity securities | 434 | 429 |
Prepaid deductions | 17 | 190 |
Other | 55 | 8 |
Total deferred tax liabilities | 886 | 666 |
Less valuation allowance | -39,137 | -37,159 |
Net deferred tax assets, included in other assets | ($308) | $2,171 |
INCOME_TAXES_NOL_Carryforwards
INCOME TAXES - NOL Carryforwards (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Knoblauch State Bank Available To Be Utilized [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | $4,000,000 |
Operating loss carryforwards, expiration dates | 31-Dec-15 |
Capital Loss Carryforward [Member] | |
Operating Loss Carryforwards [Line Items] | |
Other tax carryforward, amount | 5,100,000 |
Capital Loss Carryforward [Member] | Minimum | |
Operating Loss Carryforwards [Line Items] | |
Other tax carryforward, expiration date | 31-Dec-15 |
Charitable Contribution Carryovers [Member] | |
Operating Loss Carryforwards [Line Items] | |
Other tax carryforward, amount | 47,000 |
General Business [Member] | |
Operating Loss Carryforwards [Line Items] | |
Tax Credit Carryforward, Amount | 1,000 |
General Business [Member] | Minimum | |
Operating Loss Carryforwards [Line Items] | |
Tax Credit Carryforward, Minimum Expiration Date | 31-Dec-30 |
AMT Tax Credit [Member] | |
Operating Loss Carryforwards [Line Items] | |
Tax Credit Carryforward, Amount | 282,000 |
Federal | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 60,100,000 |
Operating loss carryforwards, expiration dates | 31-Dec-29 |
State | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | $145,300,000 |
Operating loss carryforwards, expiration dates | 31-Dec-27 |
FINANCIAL_INSTRUMENTS_WITH_OFF2
FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK AND CONCENTRATIONS OF CREDIT RISK (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Percentage of collateral held on off balance sheet commitments (in hundredths) | 75.00% | |
Unused lines of Credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments whose contract amounts represent credit risk | $48,929 | $21,182 |
Commitments to Extend Credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments whose contract amounts represent credit risk | 6,430 | 200 |
Standby letters of credit and financial guarantees written [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments whose contract amounts represent credit risk | $371 | $2,679 |
Extension period for guarantees | one year | |
Guarantees expiry period | Oct-15 |
LEGAL_CONTINGENCIES_Details
LEGAL CONTINGENCIES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 30, 2013 | |
Loss Contingencies [Line Items] | |||
Loss contingency | ($55,000) | $1,750,000 | |
The "Complaint" | |||
Loss Contingencies [Line Items] | |||
Loss contingency | 1,650,000 | ||
Department of Justice fine in period attributable to parent | $990,000 | ||
Cash payment for liens specified as percentage of redemption amount (in hundredths) | 85.00% | ||
Payment period from date of written notice | 35 days | ||
Interest rate on tax liens acquired | 0.00% | ||
Crusader Servicing Corporation | Royal Bank | |||
Loss Contingencies [Line Items] | |||
Ownership interest (as a percent) | 80.00% | 60.00% | |
Royal Tax Lien Services [Member] | Royal Bank | |||
Loss Contingencies [Line Items] | |||
Ownership interest (as a percent) | 60.00% |
SHAREHOLDERS_EQUITY_Details
SHAREHOLDERSb EQUITY (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | |||||||
Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Feb. 20, 2009 | Jul. 02, 2014 | Jun. 20, 2014 | Jan. 31, 2014 | Jun. 19, 2014 | Feb. 28, 2014 | Dec. 30, 2013 | |
Preferred Stock [Abstract] | ||||||||||
Preferred stock, liquidation value (in dollars per share) | $1,000 | $1,000 | ||||||||
Preferred stock cumulative dividend rate percentage beginning February 2014 (as a percent) | 5.00% | |||||||||
Common Stock [Abstract] | ||||||||||
Common stock sold (in shares) | 16,700,000 | |||||||||
Proceeds from issuance of common stock | $20,000,000 | |||||||||
Increase in common equity | 18,000,000 | |||||||||
Noncontrolling Interest [Line Items] | ||||||||||
Payment to acquire additional ownership interest | 1,500,000 | |||||||||
Warrant To Purchase Class A Common Stock [Member] | ||||||||||
Preferred Stock [Abstract] | ||||||||||
Number of shares to be purchased by warrant (in shares) | 1,104,370 | |||||||||
Number of years for warrant issued to treasury | 10 years | |||||||||
Warrants, exercise price (in dollars per share) | $4.13 | |||||||||
Series A Preferred Stock [Member] | ||||||||||
Preferred Stock [Abstract] | ||||||||||
Preferred stock, shares issued (in shares) | 30,407 | |||||||||
Preferred stock, liquidation value (in dollars per share) | $1,000 | |||||||||
Preferred stock cumulative dividend rate percentage beginning February 2014 (as a percent) | 9.00% | |||||||||
Amount of approved purchase of preferred shares | 14,000,000 | |||||||||
Preferred stock dividend in arrears | 6,600,000 | 6,600,000 | ||||||||
Share price (in dollars per share) | $1,207.11 | |||||||||
Shares allocated for repurchase (in shares) | 11,551 | |||||||||
Common Class A [Member] | ||||||||||
Preferred Stock [Abstract] | ||||||||||
Share price (in dollars per share) | $1.20 | |||||||||
Common Stock [Abstract] | ||||||||||
Number of vote for class of shares held | 1 | |||||||||
Common stock sold (in shares) | 4,999,896 | 11,666,667 | ||||||||
Proceeds from issuance of common stock | 6,000,000 | |||||||||
Common Class B [Member] | ||||||||||
Common Stock [Abstract] | ||||||||||
ConvertibleStockConversionRatio | 1.15 | |||||||||
Number of vote for class of shares held | 10 | |||||||||
Crusader Servicing Corporation | ||||||||||
Noncontrolling Interest [Line Items] | ||||||||||
Payment settlement related to relinquished ownership interestThe cash outflow associated with the settlement related to relinquished ownership interest by the former President. | 1,250,000 | |||||||||
Royal Tax Lien | ||||||||||
Noncontrolling Interest [Line Items] | ||||||||||
Percentage of additional ownership interest acquired (in hundredths) | 40.00% | |||||||||
Payment for tax distribution related additional ownership interest | 400,000 | |||||||||
Additional tax payment | 28,000 | |||||||||
Payment to acquire additional ownership interest | 850,000 | |||||||||
Scenario, Adjustment [Member] | Warrant To Purchase Class A Common Stock [Member] | ||||||||||
Preferred Stock [Abstract] | ||||||||||
Number of shares to be purchased by warrant (in shares) | 1,368,040 | |||||||||
Warrants, exercise price (in dollars per share) | $3.33 | |||||||||
Crusader Servicing Corporation | Royal Bank | ||||||||||
Noncontrolling Interest [Line Items] | ||||||||||
Total percentage of ownership interest (in hundredths) | 80.00% | 60.00% | ||||||||
Crusader Servicing Corporation | Former President of CSC and RTL [Member] | ||||||||||
Noncontrolling Interest [Line Items] | ||||||||||
Ownership percenatge relinquished | 20.00% | |||||||||
Royal Tax Lien | Royal Bank | ||||||||||
Noncontrolling Interest [Line Items] | ||||||||||
Total percentage of ownership interest (in hundredths) | 100.00% | 60.00% | ||||||||
Crusader Servicing Corporation and Royal Tax Lien [Member] | Royal Bank | ||||||||||
Noncontrolling Interest [Line Items] | ||||||||||
Equity Method Investments | 2,600,000 | |||||||||
Capital Unit Preferred Stock And Warrant Member | ||||||||||
Preferred Stock [Abstract] | ||||||||||
Aggregate purchase price | $30,400,000 |
REGULATORY_CAPITAL_REQUIREMENT2
REGULATORY CAPITAL REQUIREMENTS (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Adjustments to net loss as well as the capital ratios [Abstract] | ||||||||||
Net income | $811 | $1,423 | $1,378 | $1,498 | $2,452 | $342 | ($803) | $118 | $5,110 | $2,109 |
Royal Bank | ||||||||||
Capital actual amount under regulations [Abstract] | ||||||||||
Total capital (to risk-weighted assets) | 78,582 | 71,417 | 78,582 | 71,417 | ||||||
Tier I capital (to risk-weighted assets) | 72,330 | 65,602 | 72,330 | 65,602 | ||||||
Tier I capital (to average assets, leverage) | 72,330 | 65,602 | 72,330 | 65,602 | ||||||
Actual Ratio Under RAP [Abstract] | ||||||||||
Total capital (to risk-weighted assets) (as a percent) | 15.89% | 15.61% | 15.89% | 15.61% | ||||||
Tier I capital (to risk-weighted assets) (in hundredths) | 14.62% | 14.34% | 14.62% | 14.34% | ||||||
Tier I capital (to average assets, leverage) (as a percent) | 10.12% | 9.13% | 10.12% | 9.13% | ||||||
For capital adequacy purposes, amount [Abstract] | ||||||||||
Total capital (to risk-weighted assets) | 39,573 | 36,590 | 39,573 | 36,590 | ||||||
Tier I capital (to risk-weighted assets) | 19,787 | 18,295 | 19,787 | 18,295 | ||||||
Tier I capital (to average assets, leverage) | 28,585 | 28,739 | 28,585 | 28,739 | ||||||
For capital adequacy purposes, ratio [Abstract] | ||||||||||
Total capital (to risk-weighted assets) (in hundredths) | 8.00% | 8.00% | 8.00% | 8.00% | ||||||
Tier I capital (to risk-weighted assets) (in hundredths) | 4.00% | 4.00% | 4.00% | 4.00% | ||||||
Tier I capital (to average assets, leverage) (in hundredths) | 4.00% | 4.00% | 4.00% | 4.00% | ||||||
To be well capitalized under prompt corrective action provision, amount [Abstract] | ||||||||||
Total capital (to risk-weighted assets) | 49,466 | 45,737 | 49,466 | 45,737 | ||||||
Tier I capital (to risk-weighted assets) | 29,680 | 27,442 | 29,680 | 27,442 | ||||||
Tier I capital (to average assets, leverage) | 35,731 | 35,924 | 35,731 | 35,924 | ||||||
To be well capitalized under prompt corrective action provision, ratio [Abstract] | ||||||||||
Total capital (to risk-weighted assets) (in hundredths) | 10.00% | 10.00% | 10.00% | 10.00% | ||||||
Tier I capital (to risk-weighted assets) (in hundredths) | 6.00% | 6.00% | 6.00% | 6.00% | ||||||
Tier I capital (to average assets, leverage) (in hundredths) | 5.00% | 5.00% | 5.00% | 5.00% | ||||||
Adjustments to net loss as well as the capital ratios [Abstract] | ||||||||||
RAP net loss | 1,924 | -139 | ||||||||
Tax lien adjustment, net of noncontrolling interest | 3,170 | 2,844 | ||||||||
Net income | 5,094 | 2,705 | ||||||||
Actual Ratio Under US GAAP [Abstract] | ||||||||||
Total capital (to risk-weighted assets) (in hundredths) | 16.44% | 16.49% | 16.44% | 16.49% | ||||||
Tier I capital (to risk-weighted assets) (in hundredths) | 15.17% | 15.22% | 15.17% | 15.22% | ||||||
Tier I capital (to average assets, leverage) (in hundredths) | 10.52% | 9.73% | 10.52% | 9.73% | ||||||
Ratios As Adjusted Under RAP [Abstract] | ||||||||||
Total capital (to risk-weighted assets) (in hundredths) | 15.89% | 15.61% | 15.89% | 15.61% | ||||||
Tier I capital (to risk-weighted assets) (in hundredths) | 14.62% | 14.34% | 14.62% | 14.34% | ||||||
Tier I capital (to average assets, leverage) (in hundredths) | 10.12% | 9.13% | 10.12% | 9.13% | ||||||
Royal Bancshares | ||||||||||
Capital actual amount under regulations [Abstract] | ||||||||||
Total capital (to risk-weighted assets) | 95,944 | 84,384 | 95,944 | 84,384 | ||||||
Tier I capital (to risk-weighted assets) | 86,329 | 71,432 | 86,329 | 71,432 | ||||||
Tier I capital (to average assets, leverage) | 86,329 | 71,432 | 86,329 | 71,432 | ||||||
Actual Ratio Under RAP [Abstract] | ||||||||||
Total capital (to risk-weighted assets) (as a percent) | 19.20% | 18.09% | 19.20% | 18.09% | ||||||
Tier I capital (to risk-weighted assets) (in hundredths) | 17.27% | 15.31% | 17.27% | 15.31% | ||||||
Tier I capital (to average assets, leverage) (as a percent) | 11.88% | 9.79% | 11.88% | 9.79% | ||||||
For capital adequacy purposes, amount [Abstract] | ||||||||||
Total capital (to risk-weighted assets) | 39,986 | 37,315 | 39,986 | 37,315 | ||||||
Tier I capital (to risk-weighted assets) | 19,993 | 18,658 | 19,993 | 18,658 | ||||||
Tier I capital (to average assets, leverage) | 29,056 | 29,178 | 29,056 | 29,178 | ||||||
For capital adequacy purposes, ratio [Abstract] | ||||||||||
Total capital (to risk-weighted assets) (in hundredths) | 8.00% | 8.00% | 8.00% | 8.00% | ||||||
Tier I capital (to risk-weighted assets) (in hundredths) | 4.00% | 4.00% | 4.00% | 4.00% | ||||||
Tier I capital (to average assets, leverage) (in hundredths) | 4.00% | 4.00% | 4.00% | 4.00% | ||||||
Adjustments to net loss as well as the capital ratios [Abstract] | ||||||||||
RAP net loss | 1,940 | -735 | ||||||||
Tax lien adjustment, net of noncontrolling interest | -3,170 | -2,844 | ||||||||
Net income | $5,110 | $2,109 | ||||||||
Actual Ratio Under US GAAP [Abstract] | ||||||||||
Total capital (to risk-weighted assets) (in hundredths) | 19.20% | 18.09% | 19.20% | 18.09% | ||||||
Tier I capital (to risk-weighted assets) (in hundredths) | 17.27% | 15.31% | 17.27% | 15.31% | ||||||
Tier I capital (to average assets, leverage) (in hundredths) | 11.88% | 9.79% | 11.88% | 9.79% | ||||||
Ratios As Adjusted Under RAP [Abstract] | ||||||||||
Total capital (to risk-weighted assets) (in hundredths) | 18.67% | 17.24% | 18.67% | 17.24% | ||||||
Tier I capital (to risk-weighted assets) (in hundredths) | 16.74% | 14.10% | 16.74% | 14.10% | ||||||
Tier I capital (to average assets, leverage) (in hundredths) | 11.49% | 8.98% | 11.49% | 8.98% |
PENSION_PLANS_Details
PENSION PLANS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Pension Plan [Abstract] | ||
Highest consecutive years of employee compensation used to compute benefit | 3 years | |
Years of employment used in benefit computation | 10 years | |
Defined Contribution Plan [Abstract] | ||
Employer matching contribution percent of employee contribution (in hundredths) | 5.00% | |
Maximum annual contribution per employee | $2,500 | |
Pension Plans Defined Benefit [Member] | ||
Change in Benefit Obligation [Roll Forward] | ||
Benefit obligation at beginning of year | 14,488,000 | 16,897,000 |
Service cost | 64,000 | 81,000 |
Interest cost | 538,000 | 623,000 |
Benefits paid | -967,000 | -981,000 |
Actuarial (gain) loss | 1,315,000 | -2,132,000 |
Benefit obligation at end of year | 15,438,000 | 14,488,000 |
Unrecognized prior service cost | 90,000 | 179,000 |
Unrecognized actuarial loss | 3,935,000 | 2,750,000 |
Total unrecognized cost | 4,025,000 | 2,929,000 |
Accumulated benefit obligation | 15,300,000 | 14,500,000 |
Assumptions Used to Determine the Benefit Obligations [Abstract] | ||
Discount rate (in hundredths) | 3.52% | 4.37% |
Rate of compensation increase (in hundredths) | 4.00% | 4.00% |
Assumptions Used to Determine the Net Periodic Pension Cost [Abstract] | ||
Discount rate (in hundredths) | 3.52% | 4.37% |
Rate of compensation increase (in hundredths) | 4.00% | 4.00% |
Net Pension Cost [Abstract] | ||
Service cost | 64,000 | 81,000 |
Interest cost | 538,000 | 623,000 |
Amortization of prior service cost | 90,000 | 90,000 |
Amortization of actuarial loss | 128,000 | 238,000 |
Net periodic benefit cost | 820,000 | 1,032,000 |
Benefit Payments to be Made From the Non-qualified Pension Plan [Abstract] | ||
2014 | 977,000 | |
2015 | 1,015,000 | |
2016 | 1,015,000 | |
2017 | 1,015,000 | |
2018 | 1,028,000 | |
Next five years thereafter | 5,728,000 | |
Cash surrender value of life insurance policies | 3,600,000 | 3,400,000 |
Defined Contribution Plan [Member] | ||
Defined Contribution Plan [Abstract] | ||
Employer matching contribution percent of employee contribution (in hundredths) | 5.00% | |
Maximum annual contribution per employee | 2,500 | |
Employer contribution to plan | $148,000 | $0 |
STOCK_COMPENSATION_PLANS_Detai
STOCK COMPENSATION PLANS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Payment Award [Line Items] | ||
Compensation expense | $17,000 | $22,000 |
Employee Stock Option Plan And Appreciation Right Plan [Member] | ||
Summary of the Status of the Plan [Roll Forward] | ||
Options outstanding at beginning of year (in shares) | 82,780 | 217,561 |
Forfeited (in shares) | -13,309 | -119,137 |
Expired (in shares) | -33,859 | -15,644 |
Options outstanding at end of the year (in shares) | 35,612 | 82,780 |
Options exercisable at end of the year (in shares) | 35,612 | 82,780 |
Weighted Average Exercise Price [Roll Forward] | ||
Options outstanding, weighted average exercise price at beginning of year (in dollars per share) | $22.06 | $21.50 |
Forfeited, weighted average exercise price (in dollars per share) | $21.89 | $21.53 |
Expired, weighted average exercise price (in dollars per share) | $22.38 | $18.27 |
Options outstanding, weighted average exercise price at the end of the year (in dollars per share) | $21.82 | $22.06 |
Options exercisable, weighted average exercise price at the end of the year (in dollars per share) | $21.82 | $22.06 |
Options, Additional Disclosures [Abstract] | ||
Options outstanding, weighted average remaining term at the end of the year | 1 year | 1 year 1 month 6 days |
Options exercisable, weighted average remaining term at the end of the year | 1 year | |
Options outstanding, average intrinsic value at the end of the year | 0 | |
Options exercisable, average intrinsic value at the end of the year | 0 | |
Director S Plan [Member] | Stock Options | ||
Summary of the Status of the Plan [Roll Forward] | ||
Options outstanding at beginning of year (in shares) | 25,670 | 58,306 |
Forfeited (in shares) | -4,756 | -24,286 |
Expired (in shares) | -8,190 | -8,350 |
Options outstanding at end of the year (in shares) | 12,724 | 25,670 |
Options exercisable at end of the year (in shares) | 12,724 | 25,670 |
Weighted Average Exercise Price [Roll Forward] | ||
Options outstanding, weighted average exercise price at beginning of year (in dollars per share) | $22 | $21.15 |
Forfeited, weighted average exercise price (in dollars per share) | $21.81 | $21.24 |
Expired, weighted average exercise price (in dollars per share) | $22.38 | $18.27 |
Options outstanding, weighted average exercise price at the end of the year (in dollars per share) | $21.83 | $22 |
Options exercisable, weighted average exercise price at the end of the year (in dollars per share) | $21.83 | $22 |
Options, Additional Disclosures [Abstract] | ||
Options outstanding, weighted average remaining term at the end of the year | 1 year 6 months | |
Options exercisable, weighted average remaining term at the end of the year | 10 months 24 days | |
Options outstanding, average intrinsic value at the end of the year | 0 | |
Options exercisable, average intrinsic value at the end of the year | 0 | |
Long Term Incentive Plan [Member] | ||
Share-based Payment Award [Line Items] | ||
Compensation expense | 17,000 | 22,000 |
Number of shares authorized | 1,000,000 | |
Number of shares from unrestricted plan granted (in shares) | 869,291 | |
Share options authorized as a percentage of total class A common stock. | 4.00% | |
Compensation expense remaining to be recognized | 53,000 | |
Weighted average period of expense to be recognized | 2 years | |
Summary of the Status of the Plan [Roll Forward] | ||
Granted (in shares) | 52,500 | 15,000 |
Weighted Average Exercise Price [Roll Forward] | ||
Weighted average fair value of options granted during the year (in dollars per share) | $2.05 | |
Significant assumptions used to estimate fair value | ||
Weighted average risk-free interest rate | 2.26% | 1.63% |
Weighted average volatility | 85.29% | 94.00% |
Weighted average expected life | 5 years | 5 years |
Detail for non-vested shares [Roll Forward] | ||
Non-vested options at beginning of year (in shares) | 15,000 | |
Granted (in shares) | 52,500 | 15,000 |
Vested (in shares) | -5,000 | |
Non-vested options at end of year (in shares) | 62,500 | 15,000 |
Non-vested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Non-vested options, weighted average exercise price at beginning of year (in dollars per share) | $1.36 | |
Granted, weighted average grant date fair value (in dollars per share) | $2.05 | |
Vested, weighted average exercise price at end of year (in dollars per share) | $1.36 | |
Non-vested options, weighted average exercise price at end of year (in dollars per share) | $1.94 | $1.36 |
Long Term Incentive Plan [Member] | Employees [Member] | Minimum | ||
Share-based Payment Award [Line Items] | ||
Period before options become exercisable | 1 year | |
Long Term Incentive Plan [Member] | Employees [Member] | Maximum | ||
Share-based Payment Award [Line Items] | ||
Award expiration period | 10 years | |
Long Term Incentive Plan [Member] | Director [Member] | Minimum | ||
Share-based Payment Award [Line Items] | ||
Award vesting period | 1 year | |
Long Term Incentive Plan [Member] | Director [Member] | Maximum | ||
Share-based Payment Award [Line Items] | ||
Award expiration period | 10 years | |
Long Term Incentive Plan [Member] | Unrestricted Portion [Member] | ||
Summary of the Status of the Plan [Roll Forward] | ||
Options outstanding at beginning of year (in shares) | 89,386 | 86,226 |
Granted (in shares) | 52,500 | 15,000 |
Forfeited (in shares) | -11,177 | -11,840 |
Options outstanding at end of the year (in shares) | 130,709 | 89,386 |
Options exercisable at end of the year (in shares) | 68,209 | 74,386 |
Weighted Average Exercise Price [Roll Forward] | ||
Options outstanding, weighted average exercise price at beginning of year (in dollars per share) | $7.95 | $9.22 |
Granted, weighted average exercise price (in dollars per share) | $2.05 | $1.36 |
Forfeited, weighted average exercise price (in dollars per share) | $7.81 | $8.83 |
Options outstanding, weighted average exercise price at the end of the year (in dollars per share) | $5.60 | $7.95 |
Options exercisable, weighted average exercise price at the end of the year (in dollars per share) | $8.94 | $9.28 |
Weighted average fair value of options granted during the year (in dollars per share) | $1.39 | $0.98 |
Options, Additional Disclosures [Abstract] | ||
Options outstanding, weighted average remaining term at the end of the year | 6 years 4 months 24 days | 4 years 10 months 24 days |
Options exercisable, weighted average remaining term at the end of the year | 3 years 8 months 12 days | |
Options outstanding, average intrinsic value at the end of the year | 0 | |
Options exercisable, average intrinsic value at the end of the year | $0 | |
Detail for non-vested shares [Roll Forward] | ||
Granted (in shares) | 52,500 | 15,000 |
Non-vested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Granted, weighted average grant date fair value (in dollars per share) | $1.39 | $0.98 |
STOCK_COMPENSATION_PLANS_Optio
STOCK COMPENSATION PLANS, Option Plan By Exercise Price Range (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Range One [Member] | |
Stock Option Plan, Exercise Price Range [Line Items] | |
Range of exercise prices, lower range limit (in dollars per share) | $1 |
Range Two [Member] | |
Stock Option Plan, Exercise Price Range [Line Items] | |
Range of exercise prices, lower range limit (in dollars per share) | $4.01 |
Range Three [Member] | |
Stock Option Plan, Exercise Price Range [Line Items] | |
Range of exercise prices, lower range limit (in dollars per share) | $10.01 |
Employee Stock Option Plan And Appreciation Right Plan [Member] | |
Stock Option Plan, Exercise Price Range [Line Items] | |
Options outstanding and exercisable (in shares) | 35,612 |
Options outstanding and exercisable, weighted average exercise price (in dollars per share) | $21.82 |
Options outstanding and exercisable, weighted average remaining term | 1 year |
Employee Stock Option Plan And Appreciation Right Plan [Member] | Range Two [Member] | |
Stock Option Plan, Exercise Price Range [Line Items] | |
Range of exercise prices, lower range limit (in dollars per share) | $21 |
Range of exercise prices, upper range limit (in dollars per share) | $23 |
Options outstanding and exercisable (in shares) | 35,612 |
Options outstanding and exercisable, weighted average exercise price (in dollars per share) | $21.82 |
Options outstanding and exercisable, weighted average remaining term | 1 year |
Director S Plan [Member] | |
Stock Option Plan, Exercise Price Range [Line Items] | |
Options outstanding and exercisable (in shares) | 12,724 |
Options outstanding and exercisable, weighted average exercise price (in dollars per share) | $21.83 |
Options outstanding and exercisable, weighted average remaining term | 10 months 24 days |
Director S Plan [Member] | Range Two [Member] | |
Stock Option Plan, Exercise Price Range [Line Items] | |
Range of exercise prices, lower range limit (in dollars per share) | $21 |
Range of exercise prices, upper range limit (in dollars per share) | $23 |
Options outstanding and exercisable (in shares) | 12,724 |
Options outstanding and exercisable, weighted average exercise price (in dollars per share) | $21.83 |
Options outstanding and exercisable, weighted average remaining term | 10 months 24 days |
Long Term Incentive Plan [Member] | Stock Options | |
Stock Option Plan, Exercise Price Range [Line Items] | |
Options outstanding and exercisable (in shares) | 130,709 |
Options outstanding and exercisable, weighted average exercise price (in dollars per share) | $5.60 |
Options outstanding and exercisable, weighted average remaining term | 6 years 4 months 24 days |
Long Term Incentive Plan [Member] | Stock Options | Range One [Member] | |
Stock Option Plan, Exercise Price Range [Line Items] | |
Range of exercise prices, upper range limit (in dollars per share) | $4 |
Options outstanding and exercisable (in shares) | 67,500 |
Options outstanding and exercisable, weighted average exercise price (in dollars per share) | $1.90 |
Options outstanding and exercisable, weighted average remaining term | 9 years 3 months 18 days |
Long Term Incentive Plan [Member] | Stock Options | Range Two [Member] | |
Stock Option Plan, Exercise Price Range [Line Items] | |
Range of exercise prices, upper range limit (in dollars per share) | $10 |
Options outstanding and exercisable (in shares) | 42,750 |
Options outstanding and exercisable, weighted average exercise price (in dollars per share) | $4.50 |
Options outstanding and exercisable, weighted average remaining term | 3 years 9 months 18 days |
Long Term Incentive Plan [Member] | Stock Options | Range Three [Member] | |
Stock Option Plan, Exercise Price Range [Line Items] | |
Range of exercise prices, upper range limit (in dollars per share) | $23 |
Options outstanding and exercisable (in shares) | 20,459 |
Options outstanding and exercisable, weighted average exercise price (in dollars per share) | $20.08 |
Options outstanding and exercisable, weighted average remaining term | 2 years 7 months 6 days |
EARNINGS_LOSS_PER_COMMON_SHARE2
EARNINGS (LOSS) PER COMMON SHARE (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
item | ||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||||
Number of classes of common stock outstanding | 2 | |||||||||
Earnings Per Share, Basic [Abstract] | ||||||||||
Income (loss) available to common shareholders (numerator) | $378 | $1,271 | $549 | $834 | $1,930 | ($178) | ($1,321) | ($397) | $3,032 | $34 |
Average shares (denominator) (in shares) | 21,062,000 | |||||||||
Per share Amount (in dollars per share) | $0.14 | |||||||||
Earnings Per Share, Diluted [Abstract] | ||||||||||
Income (loss) available to common shareholders (numerator) | 3,032 | |||||||||
Average shares (denominator) (in shares) | 21,070,000 | |||||||||
Per share Amount (in dollars per share) | $0.14 | |||||||||
Basic and Diluted EPS [Abstract] | ||||||||||
Income (loss) available to common shareholders (numerator) | $378 | $1,271 | $549 | $834 | $1,930 | ($178) | ($1,321) | ($397) | $3,032 | $34 |
Average shares (denominator) (in shares) | 13,279,000 | |||||||||
Per share Amount (in dollars per share) | $0.01 | $0.05 | $0.04 | $0.06 | $0.14 | ($0.01) | ($0.10) | ($0.03) | $0.14 | $0 |
Stock Options [Member] | ||||||||||
Basic and Diluted EPS [Abstract] | ||||||||||
Number of antidilutive common share (in shares) | 170,239 | 197,836 | ||||||||
Warrant To Purchase Class A Common Stock [Member] | ||||||||||
Basic and Diluted EPS [Abstract] | ||||||||||
Number of antidilutive common share (in shares) | 1,368,040 | |||||||||
Common Class B [Member] | ||||||||||
Basic and Diluted EPS [Abstract] | ||||||||||
Number of shares received after conversion, per share | 1.15 |
COMPREHENSIVE_INCOME_LOSS_Deta
COMPREHENSIVE INCOME (LOSS) (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | ||
Unrealized gains on investment securities [Abstract] | ||||
Unrealized holding gains arising during period, before tax | $7,733 | ($10,291) | ||
Less adjustment for impaired investments, before tax | -41 | |||
Less reclassification adjustment for gains realized in net income, before tax | 377 | 158 | ||
Unrealized gains on investment securities, before tax | 7,397 | -10,449 | ||
Unrecognized benefit obligation expense [Abstract] | ||||
Actuarial gain (loss), before tax | -1,314 | 950 | ||
Less reclassification adjustment for amortization, before tax | -218 | -328 | ||
Unrecognized benefit obligation | -1,096 | |||
Unrealized loss on derivative instrument, before tax | -187 | |||
Other comprehensive income net, before tax | 6,114 | -9,171 | ||
Unrealized gains on investment securities [Abstract] | ||||
Unrealized holding gains arising during period, tax | 2,598 | -3,572 | ||
Less adjustment for impaired investments, tax | -14 | |||
Less reclassification adjustment for gains realized in net income, tax | 128 | 54 | ||
Unrealized gains on investment securities, tax | 2,484 | -3,626 | ||
Unrecognized benefit obligation expense [Abstract] | ||||
Actuarial gain, tax | 323 | |||
Less reclassification adjustment for amortization, tax | -112 | |||
Other comprehensive income net, tax | 2,484 | -3,191 | ||
Unrealized gains on investment securities [Abstract] | ||||
Unrealized holding gains arising during period, net of tax | 5,135 | -6,719 | ||
Less adjustment for impaired investments (1) | -27 | [1] | ||
Less reclassification adjustment for gains realized in net income (2) | 249 | [2] | 104 | [2] |
Unrealized gains (losses) on investment securities | 4,913 | -6,823 | ||
Unrecognized benefit obligation expense [Abstract] | ||||
Actuarial gain (loss), net of tax | -1,314 | 627 | ||
Less reclassification adjustment for amortization (3) | -218 | [3] | -216 | [3] |
Unrecognized benefit obligation expense | -1,096 | 843 | ||
Unrealized loss on derivative instrument, net of tax | -187 | |||
Other comprehensive income (loss) | 3,630 | -5,980 | ||
Accumulated Other Comprehensive Income [Abstract] | ||||
Unrecognized benefit obligation | -4,025 | -2,929 | ||
Unrealized gains (losses) on AFS investments | 1,720 | -3,193 | ||
Unrealized loss on derivative instrument | -187 | |||
Accumulated other comprehensive loss | ($2,492) | ($6,122) | ||
[1] | Amounts are included in total other-than-temporary impairment on AFS investment securities on the Consolidated Statements of Income in total non-interest income, net of a $14,000 tax benefit.Amounts are included in net gains on the sale of AFS investment securities on the Consolidated Statements of Income in total non-interest income, net of $128,000 in taxes. | |||
[2] | Amounts are included in net gains on the sale of AFS investment securities on the Consolidated Statements of Income in total non-interest income, net of $128,000 in taxes. | |||
[3] | Amounts are included in salaries and benefits on the Consolidated Statements of Income in non-interest expense. |
FAIR_VALUE_OF_FINANCIAL_INSTRU2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) (USD $) | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | $250,368,000 | $250,368,000 | $308,727,000 |
U.S. Government Agencies [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 25,289,000 | 62,036,000 | |
Mortgage-backed Securities-residential [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 22,387,000 | 32,097,000 | |
Collateralized Mortgage Obligations, Issued or Guaranteed by U.S. Government Agencies [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 168,977,000 | 189,103,000 | |
Mortgage-backed Securities, Issued by Private Enterprises [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 3,731,000 | 4,479,000 | |
Corporate Bonds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 15,727,000 | 9,438,000 | |
Municipal Bonds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 10,173,000 | 6,900,000 | |
Private Equity Funds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 4,034,000 | 4,625,000 | |
Common Stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 50,000 | 49,000 | |
Recurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 250,368,000 | 308,727,000 | |
Recurring [Member] | Interest Rate Swap [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative liabilities | 187,000 | ||
Recurring [Member] | U.S. Government Agencies [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 25,289,000 | 62,036,000 | |
Recurring [Member] | Mortgage-backed Securities-residential [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 22,387,000 | 32,097,000 | |
Recurring [Member] | Collateralized Mortgage Obligations, Issued or Guaranteed by U.S. Government Agencies [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 168,977,000 | 189,103,000 | |
Recurring [Member] | Mortgage-backed Securities, Issued by Private Enterprises [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 3,731,000 | 4,479,000 | |
Recurring [Member] | Corporate Bonds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 15,727,000 | 9,438,000 | |
Recurring [Member] | Municipal Bonds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 10,173,000 | 6,900,000 | |
Recurring [Member] | Private Equity Funds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 4,034,000 | 4,625,000 | |
Recurring [Member] | Common Stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 50,000 | 49,000 | |
Quoted Prices in Active Markets for Identical Assets Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 50,000 | 49,000 | |
Quoted Prices in Active Markets for Identical Assets Level 1 [Member] | Recurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 50,000 | 49,000 | |
Quoted Prices in Active Markets for Identical Assets Level 1 [Member] | Recurring [Member] | Common Stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 50,000 | 49,000 | |
Significant Other Observable Inputs Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 246,284,000 | 304,053,000 | |
Significant Other Observable Inputs Level 2 [Member] | Interest Rate Swap [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative liabilities | 187,000 | ||
Significant Other Observable Inputs Level 2 [Member] | Recurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 246,284,000 | 304,053,000 | |
Significant Other Observable Inputs Level 2 [Member] | Recurring [Member] | Interest Rate Swap [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative liabilities | 187,000 | ||
Significant Other Observable Inputs Level 2 [Member] | Recurring [Member] | U.S. Government Agencies [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 25,289,000 | 62,036,000 | |
Significant Other Observable Inputs Level 2 [Member] | Recurring [Member] | Mortgage-backed Securities-residential [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 22,387,000 | 32,097,000 | |
Significant Other Observable Inputs Level 2 [Member] | Recurring [Member] | Collateralized Mortgage Obligations, Issued or Guaranteed by U.S. Government Agencies [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 168,977,000 | 189,103,000 | |
Significant Other Observable Inputs Level 2 [Member] | Recurring [Member] | Mortgage-backed Securities, Issued by Private Enterprises [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 3,731,000 | 4,479,000 | |
Significant Other Observable Inputs Level 2 [Member] | Recurring [Member] | Corporate Bonds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 15,727,000 | 9,438,000 | |
Significant Other Observable Inputs Level 2 [Member] | Recurring [Member] | Municipal Bonds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 10,173,000 | 6,900,000 | |
Significant Unobservable Inputs Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 4,034,000 | 4,625,000 | |
Significant Unobservable Inputs Level 3 [Member] | Recurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | 4,034,000 | 4,625,000 | |
Significant Unobservable Inputs Level 3 [Member] | Recurring [Member] | Private Equity Funds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment securities available for sale | $4,034,000 | $4,625,000 |
FAIR_VALUE_OF_FINANCIAL_INSTRU3
FAIR VALUE OF FINANCIAL INSTRUMENTS - Unobservable Input Reconciliation (Details) (Private Equity Funds [Member], USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Private Equity Funds [Member] | ||
Assets measured at fair value on recurring basis Level 3 inputs [Roll Forward] | ||
Beginning balance | $4,625 | $4,164 |
Fair Value Assets and Liabilities Measured on Recurring Basis Gain Loss Included in Earnings [Abstract] | ||
Included in earnings | 255 | 94 |
Included in other comprehensive income | 88 | 850 |
Purchases | 14 | 70 |
Sales and calls | -948 | -553 |
Ending balance | $4,034 | $4,625 |
FAIR_VALUE_OF_FINANCIAL_INSTRU4
FAIR VALUE OF FINANCIAL INSTRUMENTS - Measurement (Details) (USD $) | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |||
Significant Unobservable Inputs Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Loans and leases held for sale | $1,446 | ||
Nonrecurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impaired loans and leases | 4,073 | 2,812 | |
Other real estate owned | 9,182 | 3,418 | |
Loans and leases held for sale | 1,446 | ||
Nonrecurring [Member] | Significant Unobservable Inputs Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impaired loans and leases | 4,073 | 2,812 | |
Other real estate owned | 9,182 | 3,418 | |
Loans and leases held for sale | $1,446 |
FAIR_VALUE_OF_FINANCIAL_INSTRU5
FAIR VALUE OF FINANCIAL INSTRUMENTS - Quantitative Information (Details) (Appraisal of collateral valuation technique [Member], Significant Unobservable Inputs Level 3 [Member], USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Impaired loans and leases [Member] | ||
Additional quantitative information about assets measured at fair value on a nonrecurring basis [Abstract] | ||
Assets, Fair Value | $2,812 | $4,073 |
Other real estate owned [Member] | ||
Additional quantitative information about assets measured at fair value on a nonrecurring basis [Abstract] | ||
Assets, Fair Value | 3,418 | 9,182 |
Loans and leases held for sale [Member] | ||
Additional quantitative information about assets measured at fair value on a nonrecurring basis [Abstract] | ||
Assets, Fair Value | $1,446 | |
Minimum | Impaired loans and leases [Member] | ||
Additional quantitative information about assets measured at fair value on a nonrecurring basis [Abstract] | ||
Range (Weighted Average) of Appraisal adjustments (in hundredths) | 0.00% | 0.00% |
Range (Weighted Average) of Liquidation expenses (in hundredths | 0.00% | 0.00% |
Minimum | Other real estate owned [Member] | ||
Additional quantitative information about assets measured at fair value on a nonrecurring basis [Abstract] | ||
Range (Weighted Average) of Appraisal adjustments (in hundredths) | 0.00% | 0.00% |
Range (Weighted Average) of Liquidation expenses (in hundredths | -2.80% | |
Maximum | Impaired loans and leases [Member] | ||
Additional quantitative information about assets measured at fair value on a nonrecurring basis [Abstract] | ||
Range (Weighted Average) of Appraisal adjustments (in hundredths) | -20.00% | -25.00% |
Range (Weighted Average) of Liquidation expenses (in hundredths | -24.00% | -23.20% |
Maximum | Other real estate owned [Member] | ||
Additional quantitative information about assets measured at fair value on a nonrecurring basis [Abstract] | ||
Range (Weighted Average) of Appraisal adjustments (in hundredths) | -68.60% | -62.50% |
Range (Weighted Average) of Liquidation expenses (in hundredths | -14.70% | -6.80% |
Maximum | Loans and leases held for sale [Member] | ||
Additional quantitative information about assets measured at fair value on a nonrecurring basis [Abstract] | ||
Range (Weighted Average) of Liquidation expenses (in hundredths | 0.00% | |
Weighted Average [Member] | Impaired loans and leases [Member] | ||
Additional quantitative information about assets measured at fair value on a nonrecurring basis [Abstract] | ||
Range (Weighted Average) of Appraisal adjustments (in hundredths) | -20.00% | -2.00% |
Range (Weighted Average) of Liquidation expenses (in hundredths | -7.80% | -6.70% |
Weighted Average [Member] | Other real estate owned [Member] | ||
Additional quantitative information about assets measured at fair value on a nonrecurring basis [Abstract] | ||
Range (Weighted Average) of Appraisal adjustments (in hundredths) | -14.50% | -11.20% |
Range (Weighted Average) of Liquidation expenses (in hundredths | -14.70% | -5.00% |
FAIR_VALUE_OF_FINANCIAL_INSTRU6
FAIR VALUE OF FINANCIAL INSTRUMENTS - Balance Sheet Grouping (Details) (USD $) | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 |
Financial Assets [Abstract] | |||
Investment securities available-for-sale (bAFSb), at fair value | $250,368,000 | $250,368,000 | $308,727,000 |
Quoted Prices in Active Markets for Identical Assets Level 1 [Member] | |||
Financial Assets [Abstract] | |||
Cash and cash equivalents | 30,790,000 | 16,844,000 | |
Investment securities available-for-sale (bAFSb), at fair value | 50,000 | 49,000 | |
Financial Liabilities [Abstract] | |||
Short-term borrowings | 10,000,000 | ||
Significant Other Observable Inputs Level 2 [Member] | |||
Financial Assets [Abstract] | |||
Investment securities available-for-sale (bAFSb), at fair value | 246,284,000 | 304,053,000 | |
Accrued interest receivable | 5,270,000 | 7,054,000 | |
Financial Liabilities [Abstract] | |||
Demand deposits | 73,665,000 | 60,473,000 | |
NOW and money markets | 212,739,000 | 210,053,000 | |
Savings | 18,721,000 | 17,593,000 | |
Time deposits | 223,788,000 | 239,102,000 | |
Long-term borrowings | 90,022,000 | 94,896,000 | |
Subordinated debt | 25,091,000 | 26,000,000 | |
Accrued interest payable | 726,000 | 965,000 | |
Significant Unobservable Inputs Level 3 [Member] | |||
Financial Assets [Abstract] | |||
Investment securities available-for-sale (bAFSb), at fair value | 4,034,000 | 4,625,000 | |
Other investment | 2,250,000 | 2,250,000 | |
Federal Home Loan Bank stock | 2,622,000 | 4,204,000 | |
Loans held for sale | 1,446,000 | ||
Loans, net | 400,979,000 | 349,336,000 | |
Carrying Amount [Member] | |||
Financial Assets [Abstract] | |||
Cash and cash equivalents | 30,790,000 | 16,844,000 | |
Investment securities available-for-sale (bAFSb), at fair value | 250,368,000 | 308,727,000 | |
Other investment | 2,250,000 | 2,250,000 | |
Federal Home Loan Bank stock | 2,622,000 | 4,204,000 | |
Loans held for sale | 1,446,000 | ||
Loans, net | 403,424,000 | 352,810,000 | |
Accrued interest receivable | 5,270,000 | 7,054,000 | |
Financial Liabilities [Abstract] | |||
Demand deposits | 73,665,000 | 60,473,000 | |
NOW and money markets | 212,739,000 | 210,053,000 | |
Savings | 18,721,000 | 17,593,000 | |
Time deposits | 225,300,000 | 240,845,000 | |
Short-term borrowings | 10,000,000 | ||
Long-term borrowings | 92,426,000 | 97,881,000 | |
Subordinated debt | 25,774,000 | 25,774,000 | |
Accrued interest payable | 726,000 | 965,000 | |
Estimated Fair Value [Member] | |||
Financial Assets [Abstract] | |||
Cash and cash equivalents | 30,790,000 | 16,844,000 | |
Investment securities available-for-sale (bAFSb), at fair value | 250,368,000 | 308,727,000 | |
Other investment | 2,250,000 | 2,250,000 | |
Federal Home Loan Bank stock | 2,622,000 | 4,204,000 | |
Loans held for sale | 1,446,000 | ||
Loans, net | 400,979,000 | 349,336,000 | |
Accrued interest receivable | 5,270,000 | 7,054,000 | |
Financial Liabilities [Abstract] | |||
Demand deposits | 73,665,000 | 60,473,000 | |
NOW and money markets | 212,739,000 | 210,053,000 | |
Savings | 18,721,000 | 17,593,000 | |
Time deposits | 223,788,000 | 239,102,000 | |
Short-term borrowings | 10,000,000 | ||
Long-term borrowings | 90,022,000 | 94,896,000 | |
Subordinated debt | 25,091,000 | 26,000,000 | |
Accrued interest payable | 726,000 | 965,000 | |
Interest Rate Swap [Member] | Significant Other Observable Inputs Level 2 [Member] | |||
Financial Liabilities [Abstract] | |||
Derivative Liability | 187,000 | ||
Interest Rate Swap [Member] | Carrying Amount [Member] | |||
Financial Liabilities [Abstract] | |||
Derivative Liability | 187,000 | ||
Interest Rate Swap [Member] | Estimated Fair Value [Member] | |||
Financial Liabilities [Abstract] | |||
Derivative Liability | $187,000 |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 30, 2013 |
Selected Segment Information and Reconciliations to Consolidated Financial Information [Abstract] | |||||||||||
Total assets | $732,553 | $732,254 | $732,553 | $732,254 | |||||||
Total deposits | 530,425 | 528,964 | 530,425 | 528,964 | |||||||
Interest income | 7,233 | 7,191 | 7,209 | 7,151 | 7,069 | 6,960 | 6,743 | 6,752 | 28,784 | 27,524 | |
Interest expense | 1,614 | 1,623 | 1,622 | 1,625 | 1,690 | 1,890 | 1,797 | 1,980 | 6,484 | 7,357 | |
Net Interest Income | 5,619 | 5,568 | 5,587 | 5,526 | 5,379 | 5,070 | 4,946 | 4,772 | 22,300 | 20,167 | |
(Credit) provision for loan and lease losses | -102 | -51 | -75 | -639 | -676 | 218 | -163 | -251 | -867 | -872 | |
Total non-interest Income | 743 | 1,204 | 816 | 772 | 2,558 | 1,937 | 961 | 1,408 | 3,535 | 6,864 | |
Noninterest Expense | 6,136 | 5,375 | 5,031 | 5,322 | 6,333 | 6,290 | 7,567 | 6,140 | 21,864 | 26,330 | |
Income tax (benefit) expense | -654 | 42 | -654 | 42 | |||||||
Net Income | 982 | 1,448 | 1,447 | 1,615 | 2,238 | 499 | -1,497 | 291 | 5,492 | 1,531 | |
Noncontrolling interest | 171 | 25 | 69 | 117 | -214 | 157 | -694 | 173 | 382 | -578 | |
Net Income Attributable to Royal Bancshares of Pennsylvania, Inc. | 811 | 1,423 | 1,378 | 1,498 | 2,452 | 342 | -803 | 118 | 5,110 | 2,109 | |
Royal Bank | |||||||||||
Selected Segment Information and Reconciliations to Consolidated Financial Information [Abstract] | |||||||||||
Net Income Attributable to Royal Bancshares of Pennsylvania, Inc. | 5,094 | 2,705 | |||||||||
Royal Bank | Crusader Servicing Corporation | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Ownership interest (as a percent) | 80.00% | 80.00% | 60.00% | ||||||||
Royal Bank | Royal Tax Lien | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Ownership interest (as a percent) | 100.00% | 100.00% | 60.00% | ||||||||
Community Banking Segment [Member] | |||||||||||
Selected Segment Information and Reconciliations to Consolidated Financial Information [Abstract] | |||||||||||
Total assets | 712,508 | 706,026 | 712,508 | 706,026 | |||||||
Total deposits | 530,425 | 528,964 | 530,425 | 528,964 | |||||||
Interest income | 27,484 | 25,097 | |||||||||
Interest expense | 5,401 | 5,899 | |||||||||
Net Interest Income | 22,083 | 19,198 | |||||||||
(Credit) provision for loan and lease losses | -1,328 | -1,459 | |||||||||
Total non-interest Income | 2,639 | 5,476 | |||||||||
Noninterest Expense | 19,785 | 21,959 | |||||||||
Income tax (benefit) expense | -654 | 42 | |||||||||
Net Income | 6,919 | 4,132 | |||||||||
Noncontrolling interest | 548 | 462 | |||||||||
Net Income Attributable to Royal Bancshares of Pennsylvania, Inc. | 6,371 | 3,670 | |||||||||
Tax Lien Segment [Member] | |||||||||||
Selected Segment Information and Reconciliations to Consolidated Financial Information [Abstract] | |||||||||||
Total assets | 20,045 | 26,228 | 20,045 | 26,228 | |||||||
Interest income | 1,300 | 2,427 | |||||||||
Interest expense | 1,083 | 1,458 | |||||||||
Net Interest Income | 217 | 969 | |||||||||
(Credit) provision for loan and lease losses | 461 | 587 | |||||||||
Total non-interest Income | 896 | 1,388 | |||||||||
Noninterest Expense | 2,079 | 4,371 | |||||||||
Net Income | -1,427 | -2,601 | |||||||||
Noncontrolling interest | -166 | -1,040 | |||||||||
Net Income Attributable to Royal Bancshares of Pennsylvania, Inc. | -1,261 | -1,561 | |||||||||
Tax Lien Segment [Member] | Royal Bank | Crusader Servicing Corporation | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Ownership interest (as a percent) | 80.00% | 80.00% | 60.00% | ||||||||
Tax Lien Segment [Member] | Royal Bank | Royal Tax Lien | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Ownership interest (as a percent) | 100.00% | 100.00% | 60.00% | ||||||||
Intersegment Eliminations [Member] | |||||||||||
Selected Segment Information and Reconciliations to Consolidated Financial Information [Abstract] | |||||||||||
Interest income | $1,100 | $1,500 |
CONDENSED_FINANCIAL_INFORMATIO2
CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY - Balance Sheet (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
ASSETS | |||
Cash | $9,642 | $9,154 | |
Other assets | 7,213 | 9,703 | |
Total assets | 732,553 | 732,254 | |
LIABILITIES | |||
Other liabilities | 20,596 | 20,865 | |
Shareholders' equity | |||
Shareholder's equity | 62,606 | 47,805 | 53,568 |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Total liabilities and shareholders' equity | 732,553 | 732,254 | |
Royal Bancshares | |||
ASSETS | |||
Cash | 6,260 | 1,333 | |
Investments in non-bank subsidiaries | 31,027 | 29,795 | |
Investments in Royal Bank | 50,834 | 42,165 | |
Other assets | 10 | 15 | |
Total assets | 88,131 | 73,308 | |
LIABILITIES | |||
Subordinated debentures | 25,774 | 25,774 | |
Other liabilities | 138 | ||
Shareholders' equity | |||
Shareholder's equity | 62,219 | 47,534 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Total liabilities and shareholders' equity | $88,131 | $73,308 |
CONDENSED_FINANCIAL_INFORMATIO3
CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY - Income Statement (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Expenses | ||||||||||
Other expenses | $2,125 | $1,340 | ||||||||
Total Non-interest Expense | 6,136 | 5,375 | 5,031 | 5,322 | 6,333 | 6,290 | 7,567 | 6,140 | 21,864 | 26,330 |
Income before income tax | 328 | 1,448 | 1,447 | 1,615 | 2,280 | 499 | -1,497 | 291 | ||
Income Tax Expense (Benefit) | -654 | 42 | -654 | 42 | ||||||
Net income | 811 | 1,423 | 1,378 | 1,498 | 2,452 | 342 | -803 | 118 | 5,110 | 2,109 |
Royal Bancshares | ||||||||||
Income | ||||||||||
Other income | 19 | 25 | ||||||||
Total Income | 19 | 25 | ||||||||
Expenses | ||||||||||
Other expenses | 281 | 499 | ||||||||
Interest on subordinated debentures | 623 | 809 | ||||||||
Total Non-interest Expense | 904 | 1,308 | ||||||||
Income before income tax | -885 | -1,283 | ||||||||
Equity in undistributed net income (loss) | 5,995 | 3,392 | ||||||||
Net income | $5,110 | $2,109 |
CONDENSED_FINANCIAL_INFORMATIO4
CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY - Cash Flow Statement (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Cash flows from operating activities: | ||
Net income (loss) | $5,110 | $2,109 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Interest on subordinated debentures | -239 | -2,795 |
Cash flows from financing activities | ||
Issuance of common stock, net | 20,000 | |
Redemption of preferred stock | 13,943 | |
Other, net | -28 | |
Net increase (decrease) in cash and cash equivalents | 13,946 | -11,958 |
Cash and cash equivalents at the beginning of the period | 16,844 | 28,802 |
Cash and cash equivalents at the end of the period | 30,790 | 16,844 |
Royal Bancshares | ||
Cash flows from operating activities: | ||
Net income (loss) | 5,110 | 2,109 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Undistributed losses from subsidiaries | -5,995 | -3,392 |
Interest on subordinated debentures | -623 | -2,419 |
Net cash provided by operating activities | -1,508 | -3,702 |
Cash flows from financing activities | ||
Issuance of common stock, net | 19,794 | |
Redemption of preferred stock | -13,943 | |
Other, net | 584 | 296 |
Net cash used in financing activities | 6,435 | 296 |
Net increase (decrease) in cash and cash equivalents | 4,927 | -3,406 |
Cash and cash equivalents at the beginning of the period | 1,333 | 4,739 |
Cash and cash equivalents at the end of the period | $6,260 | $1,333 |
SUMMARY_OF_QUARTERLY_RESULTS_U1
SUMMARY OF QUARTERLY RESULTS (UNAUDITED) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Summary of the consolidated results of operations on a quarterly basis [Abstract] | ||||||||||
Interest income | $7,233 | $7,191 | $7,209 | $7,151 | $7,069 | $6,960 | $6,743 | $6,752 | $28,784 | $27,524 |
Interest expense | 1,614 | 1,623 | 1,622 | 1,625 | 1,690 | 1,890 | 1,797 | 1,980 | 6,484 | 7,357 |
Net Interest Income | 5,619 | 5,568 | 5,587 | 5,526 | 5,379 | 5,070 | 4,946 | 4,772 | 22,300 | 20,167 |
(Credit) provision for loan and lease losses | -102 | -51 | -75 | -639 | -676 | 218 | -163 | -251 | -867 | -872 |
Net Interest Income after Credit for Loan and Lease Losses | 5,721 | 5,619 | 5,662 | 6,165 | 6,055 | 4,852 | 5,109 | 5,023 | 23,167 | 21,039 |
Other income | 743 | 1,204 | 816 | 772 | 2,558 | 1,937 | 961 | 1,408 | 3,535 | 6,864 |
Other expenses | 6,136 | 5,375 | 5,031 | 5,322 | 6,333 | 6,290 | 7,567 | 6,140 | 21,864 | 26,330 |
Income before income tax | 328 | 1,448 | 1,447 | 1,615 | 2,280 | 499 | -1,497 | 291 | ||
Income tax (benefit) expense | -654 | 42 | -654 | 42 | ||||||
Net income (loss) | 982 | 1,448 | 1,447 | 1,615 | 2,238 | 499 | -1,497 | 291 | 5,492 | 1,531 |
Less net (loss) income attributable to noncontrolling interest | 171 | 25 | 69 | 117 | -214 | 157 | -694 | 173 | 382 | -578 |
Net income | 811 | 1,423 | 1,378 | 1,498 | 2,452 | 342 | -803 | 118 | 5,110 | 2,109 |
Net income (loss) available to common shareholders | 378 | 1,271 | 549 | 834 | 1,930 | -178 | -1,321 | -397 | 3,032 | 34 |
Net income (loss) per common share [Abstract] | ||||||||||
Basic and diluted (in dollars per share) | $0.01 | $0.05 | $0.04 | $0.06 | $0.14 | ($0.01) | ($0.10) | ($0.03) | $0.14 | $0 |
Earnings Per Share, Basic | $0.14 | |||||||||
Earnings Per Share, Diluted | $0.14 | |||||||||
Common stock issued (in shares) | 16,700,000 | |||||||||
Royal Bancshares | ||||||||||
Summary of the consolidated results of operations on a quarterly basis [Abstract] | ||||||||||
Other expenses | 904 | 1,308 | ||||||||
Income before income tax | -885 | -1,283 | ||||||||
Net income | $5,110 | $2,109 |