Vermont |
03-0284070 |
(State of Incorporation) |
(IRS Employer Identification Number) |
| |
4811 US Route 5, Derby, Vermont |
05829 |
(Address of Principal Executive Offices) |
(zip code) |
|
|
Registrant's Telephone Number: (802) 334-7915 |
Large accelerated filer ( ) |
Accelerated filer ( ) |
Non-accelerated filer ( ) (Do not check if a smaller reporting company) |
Smaller reporting company ( X ) |
FORM 10-Q | ||
Index |
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Page |
PART I |
FINANCIAL INFORMATION |
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Item 1 |
Financial Statements |
3 |
Item 2 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
31 |
Item 3 |
Quantitative and Qualitative Disclosures About Market Risk |
53 |
Item 4 |
Controls and Procedures |
53 |
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|
|
PART II |
OTHER INFORMATION |
|
|
|
|
Item 1 |
Legal Proceedings |
53 |
Item 1A |
Risk Factors |
54 |
Item 2 |
Unregistered Sales of Equity Securities and Use of Proceeds |
59 |
Item 6 |
Exhibits |
59 |
|
Signatures |
60 |
Community Bancorp. and Subsidiary |
June 30, |
December 31, |
June 30, |
Consolidated Balance Sheets |
2016 |
2015 |
2015 |
|
(Unaudited) |
|
(Unaudited) |
Assets |
|
|
|
Cash and due from banks |
$20,573,382 |
$9,479,353 |
$11,233,651 |
Federal funds sold and overnight deposits |
3,760,906 |
19,372,537 |
8,220,300 |
Total cash and cash equivalents |
24,334,288 |
28,851,890 |
19,453,951 |
Securities held-to-maturity (fair value $34,682,000 at 06/30/16, |
|
|
|
$44,143,000 at 12/31/15 and $26,055,000 at 06/30/15) |
34,013,002 |
43,354,419 |
25,738,769 |
Securities available-for-sale |
28,079,675 |
26,470,400 |
31,204,034 |
Restricted equity securities, at cost |
2,610,050 |
2,441,650 |
3,332,450 |
Loans held-for-sale |
581,250 |
1,199,400 |
360,225 |
Loans |
471,567,355 |
458,119,429 |
459,482,050 |
Allowance for loan losses |
(5,077,420) |
(5,011,878) |
(5,095,212) |
Deferred net loan costs |
320,298 |
316,491 |
307,235 |
Net loans |
466,810,233 |
453,424,042 |
454,694,073 |
Bank premises and equipment, net |
10,996,815 |
11,460,207 |
11,702,753 |
Accrued interest receivable |
1,557,749 |
1,633,213 |
1,577,886 |
Bank owned life insurance (BOLI) |
4,572,871 |
4,520,486 |
4,466,781 |
Core deposit intangible |
409,036 |
545,386 |
681,731 |
Goodwill |
11,574,269 |
11,574,269 |
11,574,269 |
Other real estate owned (OREO) |
409,000 |
262,000 |
1,122,500 |
Other assets |
10,259,495 |
10,397,347 |
10,589,228 |
Total assets |
$596,207,733 |
$596,134,709 |
$576,498,650 |
Liabilities and Shareholders' Equity |
|
|
|
Liabilities |
|
|
|
Deposits: |
|
|
|
Demand, non-interest bearing |
$95,419,388 |
$93,525,762 |
$84,396,417 |
Interest-bearing transaction accounts |
106,925,038 |
130,735,094 |
111,758,309 |
Money market funds |
70,354,509 |
81,930,888 |
71,676,688 |
Savings |
86,733,253 |
81,731,290 |
81,578,169 |
Time deposits, $250,000 and over |
14,764,902 |
9,431,437 |
9,348,319 |
Other time deposits |
94,786,066 |
98,131,091 |
96,309,427 |
Total deposits |
468,983,156 |
495,485,562 |
455,067,329 |
Federal funds purchased and other borrowed funds |
30,350,000 |
10,000,000 |
30,000,000 |
Repurchase agreements |
26,837,466 |
22,073,238 |
24,403,315 |
Capital lease obligations |
515,256 |
558,365 |
599,772 |
Junior subordinated debentures |
12,887,000 |
12,887,000 |
12,887,000 |
Accrued interest and other liabilities |
3,680,616 |
3,715,888 |
3,500,041 |
Total liabilities |
543,253,494 |
544,720,053 |
526,457,457 |
Shareholders' Equity |
|
|
|
Preferred stock, 1,000,000 shares authorized, 25 shares issued |
|
|
|
and outstanding ($100,000 liquidation value) |
2,500,000 |
2,500,000 |
2,500,000 |
Common stock - $2.50 par value; 15,000,000 shares authorized, |
|
|
|
5,236,891 shares issued at 06/30/16, 5,204,517 shares issued |
|
|
|
at 12/31/15 and 5,176,128 shares issued at 06/30/15 |
13,092,228 |
13,011,293 |
12,940,320 |
Additional paid-in capital |
30,449,175 |
30,089,438 |
29,748,084 |
Retained earnings |
9,302,122 |
8,482,096 |
7,475,708 |
Accumulated other comprehensive income (loss) |
233,491 |
(45,394) |
(142) |
Less: treasury stock, at cost; 210,101 shares at 06/30/16, |
|
|
|
12/31/15 and 06/30/15 |
(2,622,777) |
(2,622,777) |
(2,622,777) |
Total shareholders' equity |
52,954,239 |
51,414,656 |
50,041,193 |
Total liabilities and shareholders' equity |
$596,207,733 |
$596,134,709 |
$576,498,650 |
|
|
|
|
Book value per common share outstanding |
$10.04 |
$9.79 |
$9.57 |
Community Bancorp. and Subsidiary |
Three Months Ended June 30, | |
Consolidated Statements of Income |
2016 |
2015 |
(Unaudited) |
|
|
Interest income |
|
|
Interest and fees on loans |
$5,478,997 |
$5,346,764 |
Interest on debt securities |
|
|
Taxable |
128,197 |
102,608 |
Tax-exempt |
322,150 |
276,254 |
Dividends |
29,334 |
23,788 |
Interest on federal funds sold and overnight deposits |
4,700 |
1,770 |
Total interest income |
5,963,378 |
5,751,184 |
|
|
|
Interest expense |
|
|
Interest on deposits |
508,701 |
529,181 |
Interest on federal funds purchased and other borrowed funds |
34,245 |
23,535 |
Interest on repurchase agreements |
19,314 |
17,933 |
Interest on junior subordinated debentures |
114,735 |
101,655 |
Total interest expense |
676,995 |
672,304 |
|
|
|
Net interest income |
5,286,383 |
5,078,880 |
Provision for loan losses |
150,000 |
150,000 |
Net interest income after provision for loan losses |
5,136,383 |
4,928,880 |
|
|
|
Non-interest income |
|
|
Service fees |
655,540 |
642,981 |
Income from sold loans |
231,297 |
247,565 |
Other income from loans |
210,703 |
186,433 |
Net realized gain on sale of securities available-for-sale |
0 |
2,723 |
Other income |
221,159 |
224,779 |
Total non-interest income |
1,318,699 |
1,304,481 |
|
|
|
Non-interest expense |
|
|
Salaries and wages |
1,725,000 |
1,683,200 |
Employee benefits |
685,082 |
672,527 |
Occupancy expenses, net |
606,358 |
609,365 |
Other expenses |
1,658,740 |
1,814,748 |
Total non-interest expense |
4,675,180 |
4,779,840 |
|
|
|
Income before income taxes |
1,779,902 |
1,453,521 |
Income tax expense |
484,703 |
375,817 |
Net income |
$1,295,199 |
$1,077,704 |
|
|
|
Earnings per common share |
$0.25 |
$0.21 |
Weighted average number of common shares |
|
|
used in computing earnings per share |
5,016,097 |
4,954,879 |
Dividends declared per common share |
$0.16 |
$0.16 |
Community Bancorp. and Subsidiary |
Six Months Ended June 30, | |
Consolidated Statements of Income |
2016 |
2015 |
(Unaudited) |
|
|
Interest income |
|
|
Interest and fees on loans |
$10,849,421 |
$10,811,025 |
Interest on debt securities |
|
|
Taxable |
255,646 |
207,647 |
Tax-exempt |
602,247 |
547,380 |
Dividends |
58,713 |
47,671 |
Interest on federal funds sold and overnight deposits |
15,606 |
4,260 |
Total interest income |
11,781,633 |
11,617,983 |
|
|
|
Interest expense |
|
|
Interest on deposits |
1,025,295 |
1,121,638 |
Interest on federal funds purchased and other borrowed funds |
53,403 |
38,276 |
Interest on repurchase agreements |
37,305 |
37,570 |
Interest on junior subordinated debentures |
224,254 |
202,333 |
Total interest expense |
1,340,257 |
1,399,817 |
|
|
|
Net interest income |
10,441,376 |
10,218,166 |
Provision for loan losses |
250,000 |
300,000 |
Net interest income after provision for loan losses |
10,191,376 |
9,918,166 |
|
|
|
Non-interest income |
|
|
Service fees |
1,273,219 |
1,274,418 |
Income from sold loans |
452,491 |
448,240 |
Other income from loans |
406,591 |
320,632 |
Net realized gain on sale of securities available-for-sale |
0 |
2,723 |
Other income |
424,249 |
471,253 |
Total non-interest income |
2,556,550 |
2,517,266 |
|
|
|
Non-interest expense |
|
|
Salaries and wages |
3,450,000 |
3,338,352 |
Employee benefits |
1,370,164 |
1,336,680 |
Occupancy expenses, net |
1,252,104 |
1,299,667 |
Other expenses |
3,285,204 |
3,501,869 |
Total non-interest expense |
9,357,472 |
9,476,568 |
|
|
|
Income before income taxes |
3,390,454 |
2,958,864 |
Income tax expense |
925,761 |
771,320 |
Net income |
$2,464,693 |
$2,187,544 |
|
|
|
Earnings per common share |
$0.48 |
$0.43 |
Weighted average number of common shares |
|
|
used in computing earnings per share |
5,008,121 |
4,946,734 |
Dividends declared per common share |
$0.32 |
$0.32 |
Community Bancorp. and Subsidiary |
|
|
Consolidated Statements of Comprehensive Income |
|
|
(Unaudited) |
Three Months Ended June 30, | |
|
2016 |
2015 |
|
|
|
Net income |
$1,295,199 |
$1,077,704 |
|
|
|
Other comprehensive income (loss), net of tax: |
|
|
Unrealized holding gain (loss) on available-for-sale securities |
|
|
arising during the period |
87,670 |
(189,219) |
Reclassification adjustment for gain realized in income |
0 |
(2,723) |
Unrealized gain (loss) during the year |
87,670 |
(191,942) |
Tax effect |
(29,808) |
65,260 |
Other comprehensive income (loss), net of tax |
57,862 |
(126,682) |
Total comprehensive income |
$1,353,061 |
$951,022 |
|
|
|
|
Six Months Ended June 30,
| |
|
2016 |
2015 |
|
|
|
Net income |
$2,464,693 |
$2,187,544 |
|
|
|
Other comprehensive income, net of tax: |
|
|
Unrealized holding gain on available-for-sale securities |
|
|
arising during the period |
422,553 |
13,785 |
Reclassification adjustment for gain realized in income |
0 |
(2,723) |
Unrealized gain during the year |
422,553 |
11,062 |
Tax effect |
(143,668) |
(3,761) |
Other comprehensive income, net of tax |
278,885 |
7,301 |
Total comprehensive income |
$2,743,578 |
$2,194,845 |
Community Bancorp. and Subsidiary |
|
|
Consolidated Statements of Cash Flows |
|
|
(Unaudited) |
Six Months Ended June 30, | |
|
2016 |
2015 |
|
|
|
Cash Flows from Operating Activities: |
|
|
Net income |
$2,464,693 |
$2,187,544 |
Adjustments to reconcile net income to net cash provided by |
|
|
operating activities: |
|
|
Depreciation and amortization, bank premises and equipment |
514,925 |
487,192 |
Provision for loan losses |
250,000 |
300,000 |
Deferred income tax |
(182,039) |
(147,121) |
Gain on sale of securities available-for-sale |
0 |
(2,723) |
Gain on sale of loans |
(212,500) |
(194,924) |
Loss (gain) on sale of OREO |
4,965 |
(51) |
Income from Trust LLC |
(183,581) |
(175,191) |
Amortization of bond premium, net |
65,277 |
95,186 |
Write down of OREO |
26,000 |
45,320 |
Proceeds from sales of loans held for sale |
11,538,775 |
11,515,834 |
Originations of loans held for sale |
(10,708,125) |
(11,654,885) |
Increase (decrease) in taxes payable |
164,820 |
(1,225) |
Decrease in interest receivable |
75,464 |
120,562 |
Decrease in mortgage servicing rights |
28,931 |
13,547 |
Increase in other assets |
(126,928) |
(391,951) |
Increase in cash surrender value of BOLI |
(52,385) |
(53,207) |
Amortization of core deposit intangible |
136,350 |
136,350 |
Amortization of limited partnerships |
292,980 |
282,666 |
Increase in unamortized loan costs |
(3,807) |
(3,841) |
Increase (decrease) in interest payable |
8,020 |
(16,375) |
Decrease in accrued expenses |
(49,844) |
(69,111) |
Increase (decrease) in other liabilities |
4,964 |
(17,813) |
Net cash provided by operating activities |
4,056,955 |
2,455,783 |
|
|
|
Cash Flows from Investing Activities: |
|
|
Investments - held-to-maturity |
|
|
Maturities and pay downs |
22,584,457 |
21,967,164 |
Purchases |
(13,243,040) |
(5,894,988) |
Investments - available-for-sale |
|
|
Maturities, calls, pay downs and sales |
3,954,848 |
9,659,289 |
Purchases |
(5,206,847) |
(7,997,830) |
Purchases of restricted equity securities |
(168,400) |
0 |
Increase in limited partnership contributions payable |
0 |
975,000 |
Investments in limited partnerships |
0 |
(975,500) |
Increase in loans, net |
(14,070,392) |
(11,925,533) |
Capital expenditures for bank premises and equipment |
(51,533) |
(700,995) |
Proceeds from sales of OREO |
217,143 |
141,051 |
Recoveries of loans charged off |
42,900 |
67,276 |
Net cash (used in) provided by investing activities |
(5,940,864) |
5,314,934 |
|
2016 |
2015 |
|
|
|
Cash Flows from Financing Activities: |
|
|
Net decrease in demand and interest-bearing transaction accounts |
(21,916,430) |
(17,992,615) |
Net decrease in money market and savings accounts |
(6,574,416) |
(12,594,989) |
Net increase (decrease) in time deposits |
1,988,440 |
(7,364,530) |
Net increase (decrease) in repurchase agreements |
4,764,228 |
(4,139,646) |
Net increase in short-term borrowings |
20,000,000 |
30,000,000 |
Proceeds from long-term borrowings |
350,000 |
0 |
Decrease in capital lease obligations |
(43,109) |
(39,772) |
Dividends paid on preferred stock |
(43,750) |
(40,625) |
Dividends paid on common stock |
(1,158,656) |
(1,106,763) |
Net cash used in financing activities |
(2,633,693) |
(13,278,940) |
|
|
|
Net decrease in cash and cash equivalents |
(4,517,602) |
(5,508,223) |
Cash and cash equivalents: |
|
|
Beginning |
28,851,890 |
24,962,174 |
Ending |
$24,334,288 |
$19,453,951 |
|
|
|
Supplemental Schedule of Cash Paid During the Period: |
|
|
Interest |
$1,332,237 |
$1,416,192 |
|
|
|
Income taxes, net of refunds |
$650,000 |
$637,000 |
|
|
|
Supplemental Schedule of Noncash Investing and Financing Activities: |
|
|
Change in unrealized gain on securities available-for-sale |
$422,553 |
$11,062 |
|
|
|
Loans transferred to OREO |
$395,108 |
$70,500 |
|
|
|
|
|
|
Common Shares Dividends Paid: |
|
|
Dividends declared |
$1,600,917 |
$1,581,145 |
Increase in dividends payable attributable to dividends declared |
(1,589) |
(1,466) |
Dividends reinvested |
(440,672) |
(472,916) |
|
$1,158,656 |
$1,106,763 |
|
Three Months Ended June 30, | |
|
2016 |
2015 |
|
|
|
Net income, as reported |
$1,295,199 |
$1,077,704 |
Less: dividends to preferred shareholders |
21,875 |
20,312 |
Net income available to common shareholders |
$1,273,324 |
$1,057,392 |
Weighted average number of common shares |
|
|
used in calculating earnings per share |
5,016,097 |
4,954,879 |
Earnings per common share |
$0.25 |
$0.21 |
|
Six Months Ended June 30, | |
|
2016 |
2015 |
|
|
|
Net income, as reported |
$2,464,693 |
$2,187,544 |
Less: dividends to preferred shareholders |
43,750 |
40,625 |
Net income available to common shareholders |
$2,420,943 |
$2,146,919 |
Weighted average number of common shares |
|
|
used in calculating earnings per share |
5,008,121 |
4,946,734 |
Earnings per common share |
$0.48 |
$0.43 |
|
|
Gross |
Gross |
|
|
Amortized |
Unrealized |
Unrealized |
Fair |
Securities AFS |
Cost |
Gains |
Losses |
Value |
|
|
|
|
|
June 30, 2016 |
|
|
|
|
U.S. Government sponsored enterprise (GSE) debt securities |
$11,752,750 |
$138,140 |
$0 |
$11,890,890 |
Agency mortgage-backed securities (Agency MBS) |
13,000,152 |
166,905 |
15,410 |
13,151,647 |
Other investments |
2,973,000 |
64,138 |
0 |
3,037,138 |
|
$27,725,902 |
$369,183 |
$15,410 |
$28,079,675 |
|
|
|
|
|
December 31, 2015 |
|
|
|
|
U.S. GSE debt securities |
$12,832,059 |
$22,523 |
$22,139 |
$12,832,443 |
Agency MBS |
10,734,121 |
0 |
69,637 |
10,664,484 |
Other investments |
2,973,000 |
5,046 |
4,573 |
2,973,473 |
|
$26,539,180 |
$27,569 |
$96,349 |
$26,470,400 |
|
|
|
|
|
June 30, 2015 |
|
|
|
|
U.S. GSE debt securities |
$14,862,842 |
$59,687 |
$14,425 |
$14,908,104 |
U.S. Government securities |
2,991,281 |
11,688 |
0 |
3,002,969 |
Agency MBS |
11,614,125 |
356 |
54,708 |
11,559,773 |
Other investments |
1,736,000 |
904 |
3,716 |
1,733,188 |
|
$31,204,248 |
$72,635 |
$72,849 |
$31,204,034 |
|
|
Gross |
Gross |
|
|
Amortized |
Unrealized |
Unrealized |
Fair |
Securities HTM |
Cost |
Gains |
Losses |
Value* |
|
|
|
|
|
June 30, 2016 |
|
|
|
|
States and political subdivisions |
$34,013,002 |
$668,998 |
$0 |
$34,682,000 |
|
|
|
|
|
December 31, 2015 |
|
|
|
|
States and political subdivisions |
$43,354,419 |
$788,581 |
$0 |
$44,143,000 |
|
|
|
|
|
June 30, 2015 |
|
|
|
|
States and political subdivisions |
$25,738,769 |
$316,231 |
$0 |
$26,055,000 |
|
Amortized |
Fair |
|
Cost |
Value |
June 30, 2016 |
|
|
Due in one year or less |
$1,000,000 |
$1,003,413 |
Due from one to five years |
12,480,750 |
12,674,932 |
Due from five to ten years |
1,245,000 |
1,249,683 |
Agency MBS |
13,000,152 |
13,151,647 |
|
$27,725,902 |
$28,079,675 |
|
|
|
December 31, 2015 |
|
|
Due in one year or less |
$3,077,544 |
$3,086,317 |
Due from one to five years |
12,482,515 |
12,474,599 |
Due from five to ten years |
245,000 |
245,000 |
Agency MBS |
10,734,121 |
10,664,484 |
|
$26,539,180 |
$26,470,400 |
|
|
|
June 30, 2015 |
|
|
Due in one year or less |
$5,115,547 |
$5,133,829 |
Due from one to five years |
14,474,576 |
14,510,432 |
Agency MBS |
11,614,125 |
11,559,773 |
|
$31,204,248 |
$31,204,034 |
|
Amortized |
Fair |
|
Cost |
Value* |
June 30, 2016 |
|
|
Due in one year or less |
$11,824,312 |
$11,824,000 |
Due from one to five years |
4,152,445 |
4,320,000 |
Due from five to ten years |
3,466,701 |
3,634,000 |
Due after ten years |
14,569,544 |
14,904,000 |
|
$34,013,002 |
$34,682,000 |
|
|
|
December 31, 2015 |
|
|
Due in one year or less |
$27,731,133 |
$27,731,000 |
Due from one to five years |
4,015,553 |
4,213,000 |
Due from five to ten years |
3,149,531 |
3,347,000 |
Due after ten years |
8,458,202 |
8,852,000 |
|
$43,354,419 |
$44,143,000 |
|
|
|
June 30, 2015 |
|
|
Due in one year or less |
$12,851,025 |
$12,851,000 |
Due from one to five years |
4,101,928 |
4,181,000 |
Due from five to ten years |
2,166,612 |
2,246,000 |
Due after ten years |
6,619,204 |
6,777,000 |
|
$25,738,769 |
$26,055,000 |
|
Less than 12 months |
12 months or more |
Total | |||
|
Fair |
Unrealized |
Fair |
Unrealized |
Fair |
Unrealized |
|
Value |
Loss |
Value |
Loss |
Value |
Loss |
June 30, 2016 |
|
|
|
|
|
|
Agency MBS |
$1,548,890 |
$15,410 |
$0 |
$0 |
$1,548,890 |
$15,410 |
|
|
|
|
|
|
|
December 31, 2015 |
|
|
|
|
|
|
U.S. GSE debt securities |
$6,243,373 |
$22,139 |
$0 |
$0 |
$6,243,373 |
$22,139 |
Agency MBS |
10,664,484 |
69,637 |
0 |
0 |
10,664,484 |
69,637 |
Other investments |
1,483,427 |
4,573 |
0 |
0 |
1,483,427 |
4,573 |
|
$18,391,284 |
$96,349 |
$0 |
$0 |
$18,391,284 |
$96,349 |
|
|
|
|
|
|
|
June 30, 2015 |
|
|
|
|
|
|
U.S. GSE debt securities |
$4,235,402 |
$9,709 |
$995,284 |
$4,716 |
$5,230,686 |
$14,425 |
Agency MBS |
10,702,696 |
54,708 |
0 |
0 |
10,702,696 |
54,708 |
Other investments |
1,236,283 |
3,716 |
0 |
0 |
1,236,283 |
3,716 |
|
$16,174,381 |
$68,133 |
$995,284 |
$4,716 |
$17,169,665 |
$72,849 |
|
June 30, |
December 31, |
June 30, |
|
2016 |
2015 |
2015 |
|
|
|
|
Commercial & industrial |
$72,878,438 |
$65,191,124 |
$73,561,125 |
Commercial real estate |
185,950,674 |
178,206,542 |
172,565,221 |
Residential real estate - 1st lien |
161,361,864 |
162,760,273 |
162,109,916 |
Residential real estate - Junior (Jr) lien |
44,078,168 |
44,720,266 |
43,816,552 |
Consumer |
7,298,211 |
7,241,224 |
7,429,236 |
|
471,567,355 |
458,119,429 |
459,482,050 |
Deduct (add): |
|
|
|
Allowance for loan losses |
5,077,420 |
5,011,878 |
5,095,212 |
Deferred net loan costs |
(320,298) |
(316,491) |
(307,235) |
|
4,757,122 |
4,695,387 |
4,787,977 |
Net Loans |
$466,810,233 |
$453,424,042 |
$454,694,073 |
|
|
|
|
|
|
|
90 Days or |
|
|
90 Days |
Total |
|
|
Non-Accrual |
More |
June 30, 2016 |
30-89 Days |
or More |
Past Due |
Current |
Total Loans |
Loans |
and Accruing |
|
|
|
|
|
|
|
|
Commercial & industrial |
$62,073 |
$120,111 |
$182,184 |
$72,696,254 |
$72,878,438 |
$256,456 |
$120,111 |
Commercial real estate |
793,208 |
432,638 |
1,225,846 |
184,724,828 |
185,950,674 |
966,071 |
406,451 |
Residential real estate |
|
|
|
|
|
|
|
- 1st lien |
1,432,806 |
905,157 |
2,337,963 |
159,023,901 |
161,361,864 |
1,467,171 |
694,007 |
- Jr lien |
212,319 |
0 |
212,319 |
43,865,849 |
44,078,168 |
377,911 |
0 |
Consumer |
83,668 |
0 |
83,668 |
7,214,543 |
7,298,211 |
0 |
0 |
Total |
$2,584,074 |
$1,457,906 |
$4,041,980 |
$467,525,375 |
$471,567,355 |
$3,067,609 |
$1,220,569 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90 Days or |
|
|
90 Days |
Total |
|
|
Non-Accrual |
More |
December 31, 2015 |
30-89 Days |
or More |
Past Due |
Current |
Total Loans |
Loans |
and Accruing |
|
|
|
|
|
|
|
|
Commercial & industrial |
$224,997 |
$168,244 |
$393,241 |
$64,797,883 |
$65,191,124 |
$441,103 |
$13,556 |
Commercial real estate |
888,994 |
560,439 |
1,449,433 |
176,757,109 |
178,206,542 |
2,400,757 |
45,356 |
Residential real estate |
|
|
|
|
|
|
|
- 1st lien |
2,875,768 |
1,408,551 |
4,284,319 |
158,475,954 |
162,760,273 |
2,009,079 |
801,241 |
- Jr lien |
521,373 |
63,031 |
584,404 |
44,135,862 |
44,720,266 |
386,132 |
63,031 |
Consumer |
83,343 |
0 |
83,343 |
7,157,881 |
7,241,224 |
0 |
0 |
Total |
$4,594,475 |
$2,200,265 |
$6,794,740 |
$451,324,689 |
$458,119,429 |
$5,237,071 |
$923,184 |
|
|
|
|
|
|
|
90 Days or |
|
|
90 Days |
Total |
|
|
Non-Accrual |
More |
June 30, 2015 |
30-89 Days
|
or More |
Past Due |
Current |
Total Loans |
Loans |
and Accruing |
|
|
|
|
|
|
|
|
Commercial & industrial |
$177,758 |
$174,184 |
$351,942 |
$73,209,183 |
$73,561,125 |
$767,235 |
$0 |
Commercial real estate |
740,547 |
239,619 |
980,166 |
171,585,055 |
172,565,221 |
1,909,917 |
5,313 |
Residential real estate |
|
|
|
|
|
|
|
- 1st lien |
2,222,425 |
828,694 |
3,051,119 |
159,058,797 |
162,109,916 |
1,927,300 |
528,211 |
- Jr lien |
346,444 |
82,021 |
428,465 |
43,388,087 |
43,816,552 |
311,571 |
82,021 |
Consumer |
38,159 |
8,987 |
47,146 |
7,382,090 |
7,429,236 |
0 |
8,987 |
Total |
$3,525,333 |
$1,333,505 |
$4,858,838 |
$454,623,212 |
$459,482,050 |
$4,916,023 |
$624,532 |
As of or for the three months ended June 30, 2016 | |||||||
|
|
|
Residential |
Residential |
|
|
|
|
Commercial |
Commercial |
Real Estate |
Real Estate |
|
|
|
|
& Industrial |
Real Estate |
1st Lien |
Jr Lien |
Consumer |
Unallocated |
Total |
Allowance for loan losses | |||||||
Beginning balance |
$730,375 |
$2,295,303 |
$1,338,927 |
$423,025 |
$58,456 |
$263,402 |
$5,109,488 |
Charge-offs |
0 |
0 |
(192,237) |
0 |
(7,298) |
0 |
(199,535) |
Recoveries |
1,180 |
0 |
5,374 |
60 |
10,853 |
0 |
17,467 |
Provision (credit) |
93,687 |
21,663 |
142,208 |
(9,003) |
18,549 |
(117,104) |
150,000 |
Ending balance |
$825,242 |
$2,316,966 |
$1,294,272 |
$414,082 |
$80,560 |
$146,298 |
$5,077,420 |
As of or for the six months ended June 30, 2016 | |||||||
|
|
|
Residential |
Residential |
|
|
|
|
Commercial |
Commercial |
Real Estate |
Real Estate |
|
|
|
|
& Industrial |
Real Estate |
1st Lien |
Jr Lien |
Consumer |
Unallocated |
Total |
Allowance for loan losses | |||||||
Beginning balance |
$712,902 |
$2,152,678 |
$1,368,028 |
$422,822 |
$75,689 |
$279,759 |
$5,011,878 |
Charge-offs |
(10,836) |
0 |
(192,549) |
0 |
(23,973) |
0 |
(227,358) |
Recoveries |
20,475 |
0 |
5,686 |
120 |
16,619 |
0 |
42,900 |
Provision (credit) |
102,701 |
164,288 |
113,107 |
(8,860) |
12,225 |
(133,461) |
250,000 |
Ending balance |
$825,242 |
$2,316,966 |
$1,294,272 |
$414,082 |
$80,560 |
$146,298 |
$5,077,420 |
|
|
|
|
|
|
|
|
Allowance for loan losses | |||||||
Evaluated for impairment |
|
|
|
|
|
|
|
Individually |
$0 |
$0 |
$59,900 |
$121,500 |
$0 |
$0 |
$181,400 |
Collectively |
825,242 |
2,316,966 |
1,234,372 |
292,582 |
80,560 |
146,298 |
4,896,020 |
Total |
$825,242 |
$2,316,966 |
$1,294,272 |
$414,082 |
$80,560 |
$146,298 |
$5,077,420 |
| |||||||
Loans evaluated for impairment |
|
|
|
|
|
|
|
Individually |
$191,919 |
$895,626 |
$1,990,686 |
$373,028 |
$0 |
|
$3,451,259 |
Collectively |
72,686,519 |
185,055,048 |
159,371,178 |
43,705,140 |
7,298,211 |
|
468,116,096 |
Total |
$72,878,438 |
$185,950,674 |
$161,361,864 |
$44,078,168 |
$7,298,211 |
|
$471,567,355 |
As of or for the year ended December 31, 2015 | |||||||
|
|
|
Residential |
Residential |
|
|
|
|
Commercial |
Commercial |
Real Estate |
Real Estate |
|
|
|
|
& Industrial |
Real Estate |
1st Lien |
Jr Lien |
Consumer |
Unallocated |
Total |
Allowance for loan losses | |||||||
Beginning balance |
$646,719 |
$2,311,936 |
$1,270,766 |
$321,099 |
$118,819 |
$236,535 |
$4,905,874 |
Charge-offs |
(200,900) |
(14,783) |
(150,947) |
(66,104) |
(69,632) |
0 |
(502,366) |
Recoveries |
59,264 |
0 |
6,042 |
240 |
32,824 |
0 |
98,370 |
Provision (credit) |
207,819 |
(144,475) |
242,167 |
167,587 |
(6,322) |
43,224 |
510,000 |
Ending balance |
$712,902 |
$2,152,678 |
$1,368,028 |
$422,822 |
$75,689 |
$279,759 |
$5,011,878 |
|
|
|
|
|
|
|
|
Allowance for loan losses | |||||||
Evaluated for impairment |
|
|
|
|
|
|
|
Individually |
$0 |
$0 |
$25,100 |
$114,600 |
$0 |
$0 |
$139,700 |
Collectively |
712,902 |
2,152,678 |
1,342,928 |
308,222 |
75,689 |
279,759 |
4,872,178 |
Total |
$712,902 |
$2,152,678 |
$1,368,028 |
$422,822 |
$75,689 |
$279,759 |
$5,011,878 |
| |||||||
Loans evaluated for impairment |
|
|
|
|
|
|
|
Individually |
$286,436 |
$2,551,748 |
$1,419,808 |
$234,004 |
$0 |
|
$4,491,996 |
Collectively |
64,904,688 |
175,654,794 |
161,340,465 |
44,486,262 |
7,241,224 |
|
453,627,433 |
Total |
$65,191,124 |
$178,206,542 |
$162,760,273 |
$44,720,266 |
$7,241,224 |
|
$458,119,429 |
As of or for the three months ended June 30, 2015 | |||||||
|
|
|
Residential |
Residential |
|
|
|
|
Commercial |
Commercial |
Real Estate |
Real Estate |
|
|
|
|
& Industrial |
Real Estate |
1st Lien |
Jr Lien |
Consumer |
Unallocated |
Total |
Allowance for loan losses | |||||||
Beginning balance |
$ 750,491 |
$ 2,325,111 |
$ 1,322,017 |
$ 321,407 |
$ 86,084 |
$ 197,939 |
$ 5,003,049 |
Charge-offs |
0 |
0 |
(78,700 ) |
0 |
(22,816 ) |
0 |
(101,516 ) |
Recoveries |
37,306 |
0 |
0 |
60 |
6,313 |
0 |
43,679 |
Provision (credit) |
93,297 |
(340,552 ) |
115,187 |
30,658 |
(5,768 ) |
257,178 |
150,000 |
Ending balance |
$ 881,094 |
$ 1,984,559 |
$ 1,358,504 |
$ 352,125 |
$ 63,813 |
$ 455,117 |
$ 5,095,212 |
As of or for the six months ended June 30, 2015 |
|
|
|
|
|
|
|
|
|
|
Residential |
Residential |
|
|
|
|
Commercial |
Commercial |
Real Estate |
Real Estate |
|
|
|
|
& Industrial |
Real Estate |
1st Lien |
Jr Lien |
Consumer |
Unallocated |
Total |
Allowance for loan losses | |||||||
Beginning balance |
$ 646,719 |
$ 2,311,936 |
$ 1,270,766 |
$ 321,099 |
$ 118,819 |
$ 236,535 |
$ 4,905,874 |
Charge-offs |
(35,059 ) |
0 |
(94,575 ) |
(20,199 ) |
(28,105 ) |
0 |
(177,938 ) |
Recoveries |
42,913 |
0 |
6,042 |
120 |
18,201 |
0 |
67,276 |
Provision (credit) |
226,521 |
(327,377 ) |
176,271 |
51,105 |
(45,102 ) |
218,582 |
300,000 |
Ending balance |
$ 881,094 |
$ 1,984,559 |
$ 1,358,504 |
$ 352,125 |
$ 63,813 |
$ 455,117 |
$ 5,095,212 |
|
|
|
|
|
|
|
|
Allowance for loan losses | |||||||
Evaluated for impairment |
|
|
|
|
|
|
|
Individually |
$ 70,000 |
$ 0 |
$ 71,800 |
$ 47,500 |
$ 0 |
$ 0 |
$ 189,300 |
Collectively |
811,094 |
1,984,559 |
1,286,704 |
304,625 |
63,813 |
455,117 |
4,905,912 |
Total |
$ 881,094 |
$ 1,984,559 |
$ 1,358,504 |
$ 352,125 |
$ 63,813 |
$ 455,117 |
$ 5,095,212 |
| |||||||
Loans evaluated for impairment | |||||||
Individually |
$ 594,176 |
$ 1,845,751 |
$ 1,345,820 |
$ 238,623 |
$ 0 |
|
$ 4,024,370 |
Collectively |
72,966,949 |
170,719,470 |
160,764,096 |
43,577,929 |
7,429,236 |
|
455,457,680 |
Total |
$ 73,561,125 |
$ 172,565,221 |
$ 162,109,916 |
$ 43,816,552 |
$ 7,429,236 |
|
$ 459,482,050 |
|
As of June 30, 2016 |
|
| ||
|
|
Unpaid |
|
Average |
Average |
|
Recorded |
Principal |
Related |
Recorded |
Recorded |
|
Investment |
Balance |
Allowance |
Investment(1) |
Investment(2) |
|
|
|
|
|
|
With an allowance recorded |
|
|
|
|
|
Residential real estate - 1st lien |
$ 871,603 |
$ 1,027,861 |
$ 59,900 |
$ 435,802 |
$ 209,078 |
Residential real estate - Jr lien |
293,587 |
348,757 |
121,500 |
262,589 |
151,836 |
|
1,165,190 |
1,376,618 |
181,400 |
698,391 |
360,914 |
|
|
|
|
|
|
With no related allowance recorded |
|
|
|
|
|
Commercial & industrial |
191,919 |
263,839 |
|
198,137 |
136,542 |
Commercial real estate |
895,626 |
953,181 |
|
901,468 |
870,937 |
Residential real estate - 1st lien |
1,119,083 |
1,319,907 |
|
918,378 |
616,555 |
Residential real estate - Jr lien |
79,441 |
87,675 |
|
39,721 |
15,888 |
|
2,286,069 |
2,624,602 |
|
2,057,704 |
1,639,922 |
|
|
|
|
|
|
Total |
$ 3,451,259 |
$ 4,001,220 |
$ 181,400 |
$ 2,756,095 |
$ 2,000,836 |
|
|
|
|
|
|
(1) For the three months ended June 30, 2016 | |||||
(2) For the six months ended June 30, 2016 |
|
As of December 31, 2015 |
2015 | ||
|
|
Unpaid |
|
Average |
|
Recorded |
Principal |
Related |
Recorded |
|
Investment |
Balance |
Allowance |
Investment |
|
|
|
|
|
With an allowance recorded |
|
|
|
|
Commercial & industrial |
$ 0 |
$ 0 |
$ 0 |
$ 37,359 |
Commercial real estate |
0 |
0 |
0 |
40,902 |
Residential real estate - 1st lien |
173,788 |
182,251 |
25,100 |
228,273 |
Residential real estate - Jr lien |
234,004 |
284,227 |
114,600 |
155,207 |
|
407,792 |
466,478 |
139,700 |
461,741 |
|
|
|
|
|
With no related allowance recorded |
|
|
|
|
Commercial & industrial |
286,436 |
366,387 |
|
446,817 |
Commercial real estate |
2,551,748 |
2,776,729 |
|
2,151,713 |
Residential real estate - 1st lien |
1,246,020 |
1,460,402 |
|
973,572 |
Residential real estate - Jr lien |
0 |
0 |
|
113,964 |
|
4,084,204 |
4,603,518 |
|
3,686,066 |
|
|
|
|
|
Total |
$ 4,491,996 |
$ 5,069,996 |
$ 139,700 |
$ 4,147,807 |
|
As of June 30, 2015 |
|
| ||
|
|
Unpaid |
|
Average |
Average |
|
Recorded |
Principal |
Related |
Recorded |
Recorded |
|
Investment |
Balance |
Allowance |
Investment(1) |
Investment(2) |
|
|
|
|
|
|
With an allowance recorded |
|
|
|
|
|
Commercial & industrial |
$ 91,940 |
$ 94,826 |
$ 70,000 |
$ 93,398 |
$ 37,359 |
Commercial real estate |
0 |
0 |
0 |
0 |
40,902 |
Residential real estate - 1st lien |
249,989 |
284,200 |
71,800 |
302,937 |
144,196 |
Residential real estate - Jr lien |
238,623 |
284,202 |
47,500 |
152,865 |
61,146 |
|
$ 580,552 |
$ 663,228 |
$ 189,300 |
$ 549,200 |
$ 283,603 |
|
|
|
|
|
|
With no related allowance recorded |
|
|
|
|
|
Commercial & industrial |
$ 502,236 |
$ 560,173 |
|
$ 555,057 |
$ 300,144 |
Commercial real estate |
1,845,751 |
1,856,008 |
|
1,976,769 |
1,136,004 |
Residential real estate - 1st lien |
1,095,831 |
1,470,050 |
|
780,255 |
433,329 |
Residential real estate - Jr lien |
0 |
0 |
|
120,465 |
113,964 |
|
$ 3,443,818 |
$ 3,886,231 |
|
$ 3,432,546 |
$ 1,983,441 |
|
|
|
|
|
|
|
|
|
|
|
|
Total |
$ 4,024,370 |
$ 4,549,459 |
$ 189,300 |
$ 3,981,746 |
$ 2,267,044 |
| |||||
(1) For the three months ended June 30, 2015 | |||||
(2) For the six months ended June 30, 2015 |
As of June 30, 2016 | ||||||
|
|
|
Residential |
Residential |
|
|
|
Commercial |
Commercial |
Real Estate |
Real Estate |
|
|
|
& Industrial |
Real Estate |
1st Lien |
Jr Lien |
Consumer |
Total |
|
|
|
|
|
|
|
Group A |
$ 70,175,375 |
$ 173,220,709 |
$ 158,425,776 |
$ 43,400,606 |
$ 7,298,211 |
$ 452,520,677 |
Group B |
1,764,165 |
4,318,817 |
587,586 |
156,846 |
0 |
6,827,414 |
Group C |
938,898 |
8,411,148 |
2,348,502 |
520,716 |
0 |
12,219,264 |
Total |
$ 72,878,438 |
$ 185,950,674 |
$ 161,361,864 |
$ 44,078,168 |
$ 7,298,211 |
$ 471,567,355 |
As of December 31, 2015 |
|
|
|
|
|
|
|
|
|
Residential |
Residential |
|
|
|
Commercial |
Commercial |
Real Estate |
Real Estate |
|
|
|
& Industrial |
Real Estate |
1st Lien |
Jr Lien |
Consumer |
Total |
|
|
|
|
|
|
|
Group A |
$ 59,764,081 |
$ 168,326,527 |
$ 158,834,849 |
$ 44,041,594 |
$ 7,241,224 |
$ 438,208,275 |
Group B |
4,724,729 |
4,529,493 |
599,516 |
212,508 |
0 |
10,066,246 |
Group C |
702,314 |
5,350,522 |
3,325,908 |
466,164 |
0 |
9,844,908 |
Total |
$ 65,191,124 |
$ 178,206,542 |
$ 162,760,273 |
$ 44,720,266 |
$ 7,241,224 |
$ 458,119,429 |
As of June 30, 2015 | ||||||
|
|
|
Residential |
Residential |
|
|
|
Commercial |
Commercial |
Real Estate |
Real Estate |
|
|
|
& Industrial |
Real Estate |
1st Lien |
Jr Lien |
Consumer |
Total |
|
|
|
|
|
|
|
Group A |
$ 70,152,385 |
$ 162,191,020 |
$ 158,224,270 |
$ 43,196,452 |
$ 7,420,249 |
$ 441,184,376 |
Group B |
2,451,677 |
4,819,930 |
231,391 |
228,892 |
0 |
7,731,890 |
Group C |
957,063 |
5,554,271 |
3,654,255 |
391,208 |
8,987 |
10,565,784 |
Total |
$ 73,561,125 |
$ 172,565,221 |
$ 162,109,916 |
$ 43,816,552 |
$ 7,429,236 |
$ 459,482,050 |
|
Three months ended June 30, 2016 |
Six months ended June 30, 2016 | ||||
|
|
Pre- |
Post- |
|
Pre- |
Post- |
|
|
Modification |
Modification |
|
Modification |
Modification |
|
|
Outstanding |
Outstanding |
|
Outstanding |
Outstanding |
|
Number of |
Recorded |
Recorded |
Number of |
Recorded |
Recorded |
|
Contracts |
Investment |
Investment |
Contracts |
Investment |
Investment |
|
|
|
|
|
|
|
Residential real estate |
|
|
|
|
|
|
- 1st lien |
0 |
$ 0 |
$ 0 |
5 |
$ 395,236 |
$ 412,923 |
- Jr lien |
1 |
52,558 |
54,637 |
2 |
62,819 |
64,977 |
Total |
1 |
$ 52,558 |
$ 54,637 |
7 |
$ 458,055 |
$ 477,900 |
|
Year ended December 31, 2015 | ||
|
|
Pre- |
Post- |
|
|
Modification |
Modification |
|
|
Outstanding |
Outstanding |
|
Number of |
Recorded |
Recorded |
|
Contracts |
Investment |
Investment |
|
|
|
|
Commercial & industrial |
2 |
$ 199,134 |
$ 204,142 |
Commercial real estate |
3 |
581,431 |
616,438 |
Residential real estate |
|
|
|
- 1st lien |
12 |
1,229,100 |
1,303,228 |
- Jr lien |
2 |
117,746 |
121,672 |
Total |
19 |
$ 2,127,411 |
$ 2,245,480 |
|
Three months ended June 30, 2015 |
Six months ended June 30, 2015 | ||||
|
|
Pre- |
Post- |
|
Pre- |
Post- |
|
|
Modification |
Modification |
|
Modification |
Modification |
|
|
Outstanding |
Outstanding |
|
Outstanding |
Outstanding |
|
Number of |
Recorded |
Recorded |
Number of |
Recorded |
Recorded |
|
Contracts |
Investment |
Investment |
Contracts |
Investment |
Investment |
|
|
|
|
|
|
|
Commercial & industrial |
3 |
$ 198,999 |
$ 198,829 |
3 |
$ 198,999 |
$ 198,829 |
Residential real estate |
|
|
|
|
|
|
- 1st lien |
3 |
618,317 |
660,196 |
8 |
962,646 |
1,021,102 |
- Jr lien |
0 |
0 |
0 |
2 |
117,745 |
121,672 |
Total |
6 |
$ 817,316 |
$ 859,025 |
13 |
$ 1,279,390 |
$ 1,341,603 |
Twelve months ended June 30, 2016 |
| |
|
Number of |
Recorded |
|
Contracts |
Investment |
Commercial |
1 |
$ 71,808 |
Commercial real estate |
2 |
373,767 |
Residential real estate - 1st lien |
1 |
58,792 |
Total |
4 |
$ 504,367 |
Year ended December 31, 2015 |
| |
|
Number of |
Recorded |
|
Contracts |
Investment |
|
|
|
Commercial real estate |
1 |
$ 149,514 |
Residential real estate - 1st lien |
4 |
286,803 |
Residential real estate - Jr lien |
1 |
69,828 |
Total |
6 |
$ 506,145 |
Twelve months ended June 30, 2015 |
|
|
|
Number of |
Recorded |
|
Contracts |
Investment |
|
|
|
Commercial |
1 |
$ 82,336 |
Residential real estate - 1st lien |
3 |
258,568 |
Total |
4 |
$ 340,904 |
2016 |
$ 136,345 |
2017 |
272,691 |
Total remaining core deposit intangible |
$ 409,036 |
June 30, 2016 |
Level 2 |
Assets: (market approach) |
|
U.S. GSE debt securities |
$ 11,890,890 |
Agency MBS |
13,151,647 |
Other investments |
3,037,138 |
Total |
$ 28,079,675 |
December 31, 2015 |
Level 2 |
Assets: (market approach) |
|
U.S. GSE debt securities |
$ 12,832,443 |
Agency MBS |
10,664,484 |
Other investments |
2,973,473 |
Total |
$ 26,470,400 |
June 30, 2015 |
Level 1 |
Level 2 |
Assets: (market approach) |
|
|
U.S. GSE debt securities |
$ 0 |
$ 14,908,104 |
U.S. Government securities |
3,002,969 |
0 |
Agency MBS |
0 |
11,559,773 |
Other investments |
0 |
1,733,188 |
Total |
$ 3,002,969 |
$ 28,201,065 |
June 30, 2016 |
Level 2 |
Assets: (market approach) |
|
Residential mortgage servicing rights |
$ 1,264,148 |
Impaired loans, net of related allowance |
983,790 |
OREO |
409,000 |
|
|
December 31, 2015 |
|
Assets: (market approach) |
|
Residential mortgage servicing rights |
$ 1,293,079 |
Impaired loans, net of related allowance |
268,092 |
OREO |
262,000 |
|
|
June 30, 2015 |
|
Assets: (market approach) |
|
Residential mortgage servicing rights |
$ 1,298,418 |
Impaired loans, net of related allowance |
391,252 |
OREO |
1,122,500 |
June 30, 2016 |
|
Fair |
Fair |
Fair |
Fair |
|
Carrying |
Value |
Value |
Value |
Value |
|
Amount |
Level 1 |
Level 2 |
Level 3 |
Total |
|
(Dollars in Thousands) | ||||
Financial assets: |
|
|
|
|
|
Cash and cash equivalents |
$ 24,334 |
$ 24,334 |
$ 0 |
$ 0 |
$ 24,334 |
Securities held-to-maturity |
34,013 |
0 |
34,682 |
0 |
34,682 |
Securities available-for-sale |
28,080 |
0 |
28,080 |
0 |
28,080 |
Restricted equity securities |
2,610 |
0 |
2,610 |
0 |
2,610 |
Loans and loans held-for-sale |
|
|
|
|
|
Commercial & industrial |
72,030 |
0 |
192 |
73,096 |
73,288 |
Commercial real estate |
183,577 |
0 |
896 |
188,112 |
189,008 |
Residential real estate - 1st lien |
160,599 |
0 |
1,931 |
162,930 |
164,860 |
Residential real estate - Jr lien |
43,650 |
0 |
252 |
44,080 |
44,333 |
Consumer |
7,215 |
0 |
0 |
7,533 |
7,533 |
Mortgage servicing rights |
1,264 |
0 |
1,333 |
0 |
1,333 |
Accrued interest receivable |
1,558 |
0 |
1,558 |
0 |
1,558 |
|
|
|
|
|
|
Financial liabilities: |
|
|
|
|
|
Deposits |
|
|
|
|
|
Other deposits |
448,752 |
0 |
449,061 |
0 |
449,061 |
Brokered deposits |
20,231 |
0 |
20,237 |
0 |
20,237 |
Federal funds purchased and short-term borrowings |
30,000 |
0 |
30,000 |
0 |
30,000 |
Long-term borrowings |
350 |
0 |
328 |
0 |
328 |
Repurchase agreements |
26,837 |
0 |
26,837 |
0 |
26,837 |
Capital lease obligations |
515 |
0 |
515 |
0 |
515 |
Subordinated debentures |
12,887 |
0 |
12,853 |
0 |
12,853 |
Accrued interest payable |
61 |
0 |
61 |
0 |
61 |
December 31, 2015 |
|
Fair |
Fair |
Fair |
Fair |
|
Carrying |
Value |
Value |
Value |
Value |
|
Amount |
Level 1 |
Level 2 |
Level 3 |
Total |
|
(Dollars in Thousands) | ||||
Financial assets: |
|
|
|
|
|
Cash and cash equivalents |
$ 28,852 |
$ 28,852 |
$ 0 |
$ 0 |
$ 28,852 |
Securities held-to-maturity |
43,354 |
0 |
44,143 |
0 |
44,143 |
Securities available-for-sale |
26,470 |
0 |
26,470 |
0 |
26,470 |
Restricted equity securities |
2,442 |
0 |
2,442 |
0 |
2,442 |
Loans and loans held-for-sale |
|
|
|
|
|
Commercial & industrial |
64,438 |
0 |
286 |
65,399 |
65,685 |
Commercial real estate |
175,945 |
0 |
2,552 |
178,502 |
181,054 |
Residential real estate - 1st lien |
162,492 |
0 |
1,395 |
164,959 |
166,354 |
Residential real estate - Jr lien |
44,270 |
0 |
119 |
44,939 |
45,058 |
Consumer |
7,161 |
0 |
0 |
7,482 |
7,482 |
Mortgage servicing rights |
1,293 |
0 |
1,497 |
0 |
1,497 |
Accrued interest receivable |
1,633 |
0 |
1,633 |
0 |
1,633 |
Financial liabilities: |
|
|
|
|
|
Deposits |
|
|
|
|
|
Other deposits |
467,851 |
0 |
467,514 |
0 |
467,514 |
Brokered deposits |
27,635 |
0 |
27,640 |
0 |
27,640 |
Federal funds purchased and short-term borrowings |
10,000 |
0 |
10,000 |
0 |
10,000 |
Repurchase agreements |
22,073 |
0 |
22,073 |
0 |
22,073 |
Capital lease obligations |
558 |
0 |
558 |
0 |
558 |
Subordinated debentures |
12,887 |
0 |
12,851 |
0 |
12,851 |
Accrued interest payable |
53 |
0 |
53 |
0 |
53 |
June 30, 2015 |
|
Fair |
Fair |
Fair |
Fair |
|
Carrying |
Value |
Value |
Value |
Value |
|
Amount |
Level 1 |
Level 2 |
Level 3 |
Total |
|
(Dollars in Thousands) | ||||
Financial assets: |
|
|
|
|
|
Cash and cash equivalents |
$ 19,454 |
$ 19,454 |
$ 0 |
$ 0 |
$ 19,454 |
Securities held-to-maturity |
25,739 |
0 |
26,055 |
0 |
26,055 |
Securities available-for-sale |
31,204 |
3,003 |
28,201 |
0 |
31,204 |
Restricted equity securities |
3,332 |
0 |
3,332 |
0 |
3,332 |
Loans and loans held-for-sale |
|
|
|
|
|
Commercial & industrial |
72,607 |
0 |
524 |
73,638 |
74,162 |
Commercial real estate |
170,410 |
0 |
1,846 |
174,080 |
175,926 |
Residential real estate - 1st lien |
160,951 |
0 |
1,274 |
164,014 |
165,288 |
Residential real estate - Jr lien |
43,421 |
0 |
191 |
44,160 |
44,351 |
Consumer |
7,358 |
0 |
0 |
7,695 |
7,695 |
Mortgage servicing rights |
1,298 |
0 |
1,496 |
0 |
1,496 |
Accrued interest receivable |
1,578 |
0 |
1,578 |
0 |
1,578 |
|
|
|
|
|
|
Financial liabilities: |
|
|
|
|
|
Deposits |
|
|
|
|
|
Other deposits |
432,657 |
0 |
432,533 |
0 |
432,533 |
Brokered deposits |
22,410 |
0 |
22,426 |
0 |
22,426 |
Federal funds purchased and short-term borrowings |
30,000 |
0 |
30,000 |
0 |
30,000 |
Repurchase agreements |
24,403 |
0 |
24,403 |
0 |
24,403 |
Capital lease obligations |
600 |
0 |
600 |
0 |
600 |
Subordinated debentures |
12,887 |
0 |
12,856 |
0 |
12,856 |
Accrued interest payable |
47 |
0 |
47 |
0 |
47 |
|
Six Months Ended |
Year Ended |
Six Months Ended |
|
June 30, 2016 |
December 31, 2015 |
June 30, 2015 |
|
|
|
|
Balance at beginning of year |
$ 1,293,079 |
$ 1,311,965 |
$ 1,311,965 |
Mortgage servicing rights capitalized |
98,054 |
230,818 |
112,687 |
Mortgage servicing rights amortized |
(134,499 ) |
(257,921 ) |
(128,791 ) |
Change in valuation allowance |
7,514 |
8,217 |
2,557 |
Balance at end of period |
$ 1,264,148 |
$ 1,293,079 |
$ 1,298,418 |
|
Three Months Ended June 30, | |
|
2016 |
2015 |
Return on Average Assets |
0.87 % |
0.74 % |
Return on Average Equity |
9.87 % |
8.60 % |
|
Six Months Ended June 30, | |
|
2016 |
2015 |
Return on Average Assets |
0.84 % |
0.76 % |
Return on Average Equity |
9.46 % |
8.84 % |
SELECTED FINANCIAL DATA (Unaudited) | |||
|
| ||
|
June 30, |
December 31, |
June 30, |
|
2016 |
2015 |
2015 |
Balance Sheet Data |
|
|
|
Net loans |
$ 466,810,233 |
$ 453,424,042 |
$ 454,694,073 |
Total assets |
596,207,733 |
596,134,709 |
576,498,650 |
Total deposits |
468,983,156 |
495,485,562 |
455,067,329 |
Borrowed funds |
30,350,000 |
10,000,000 |
30,000,000 |
Total liabilities |
543,253,494 |
544,720,053 |
526,457,457 |
Total shareholders' equity |
52,954,239 |
51,414,656 |
50,041,193 |
|
Six Months Ended June 30, | |
|
2016 |
2015 |
Operating Data |
|
|
Total interest income |
$ 11,781,633 |
$ 11,617,983 |
Total interest expense |
1,340,257 |
1,399,817 |
Net interest income |
10,441,376 |
10,218,166 |
|
|
|
Provision for loan losses |
250,000 |
300,000 |
Net interest income after provision for loan losses |
10,191,376 |
9,918,166 |
|
|
|
Non-interest income |
2,556,550 |
2,517,266 |
Non-interest expense |
9,357,472 |
9,476,568 |
Income before income taxes |
3,390,454 |
2,958,864 |
Applicable income tax expense(1) |
925,761 |
771,320 |
|
|
|
Net Income |
$ 2,464,693 |
$ 2,187,544 |
|
|
|
Per Common Share Data |
|
|
Earnings per common share (2) |
$ 0.48 |
$ 0.43 |
Dividends declared per common share |
$ 0.32 |
$ 0.32 |
Book value per common share outstanding, period end |
$ 10.04 |
$ 9.57 |
Weighted average number of common shares outstanding |
5,008,121 |
4,946,734 |
Number of common shares outstanding, period end |
5,026,790 |
4,966,027 |
|
|
|
(1) Applicable income tax expense assumes a 34% tax rate. |
|
|
(2) Computed based on the weighted average number of common shares outstanding during the periods presented. |
|
Three Months Ended June 30, | |
|
2016 |
2015 |
|
|
|
Net interest income as presented |
$ 5,286,383 |
$ 5,078,880 |
Effect of tax-exempt income |
165,956 |
142,313 |
Net interest income, tax equivalent |
$ 5,452,339 |
$ 5,221,193 |
|
Six Months Ended June 30, | |
|
2016 |
2015 |
|
|
|
Net interest income as presented |
$ 10,441,376 |
$ 10,218,166 |
Effect of tax-exempt income |
310,248 |
281,984 |
Net interest income, tax equivalent |
$ 10,751,624 |
$ 10,500,150 |
|
Three Months Ended June 30, | |||||
|
|
2016 |
|
|
2015 |
|
|
|
|
Average |
|
|
Average |
|
Average |
Income/ |
Rate/ |
Average |
Income/ |
Rate/ |
|
Balance |
Expense |
Yield |
Balance |
Expense |
Yield |
Interest-Earning Assets |
|
|
|
|
|
|
Loans (1) |
$ 464,865,518 |
$ 5,478,997 |
4.74 % |
$ 455,618,414 |
$ 5,346,764 |
4.71 % |
Taxable investment securities |
26,946,237 |
128,197 |
1.91 % |
31,166,027 |
102,608 |
1.32 % |
Tax-exempt investment securities |
51,697,883 |
488,106 |
3.80 % |
43,458,469 |
418,567 |
3.86 % |
Sweep and interest-earning accounts |
4,027,584 |
4,700 |
0.47 % |
2,521,651 |
1,770 |
0.28 % |
Other investments (2) |
2,542,707 |
29,334 |
4.64 % |
3,719,450 |
23,788 |
2.57 % |
Total |
$ 550,079,929 |
$ 6,129,334 |
4.48 % |
$ 536,484,011 |
$ 5,893,497 |
4.41 % |
|
|
|
|
|
|
|
Interest-Bearing Liabilities |
|
|
|
|
|
|
Interest-bearing transaction accounts |
$ 110,404,866 |
$ 50,133 |
0.18 % |
$ 112,569,304 |
$ 53,844 |
0.19 % |
Money market accounts |
85,507,052 |
211,138 |
0.99 % |
87,385,306 |
221,765 |
1.02 % |
Savings deposits |
85,898,605 |
26,410 |
0.12 % |
80,726,280 |
24,414 |
0.12 % |
Time deposits |
108,754,441 |
221,020 |
0.82 % |
107,895,810 |
229,158 |
0.85 % |
Federal funds purchased and |
|
|
|
|
|
|
other borrowed funds |
17,496,525 |
23,578 |
0.54 % |
17,293,077 |
11,182 |
0.26 % |
Repurchase agreements |
26,355,146 |
19,314 |
0.29 % |
25,538,488 |
17,933 |
0.28 % |
Capital lease obligations |
522,626 |
10,667 |
8.16 % |
606,498 |
12,353 |
8.15 % |
Junior subordinated debentures |
12,887,000 |
114,735 |
3.58 % |
12,887,000 |
101,655 |
3.16 % |
Total |
$ 447,826,261 |
$ 676,995 |
0.61 % |
$ 444,901,763 |
$ 672,304 |
0.61 % |
|
|
|
|
|
|
|
Net interest income |
|
$ 5,452,339 |
|
|
$ 5,221,193 |
|
Net interest spread (3) |
|
|
3.87 % |
|
|
3.80 % |
Net interest margin (4) |
|
|
3.99 % |
|
|
3.90 % |
|
|
|
|
|
|
|
(1) Included in gross loans are non-accrual loans with an average balance of $3,179,107 and $5,058,480 for the three months ended June 30, 2016 | ||||||
and 2015, respectively. Loans are stated before deduction of unearned discount and allowance for loan losses, less loans held-for-sale. | ||||||
(2) Included in other investments is the Company’s FHLBB Stock with an average balance of $1,567,557 and $2,744,300 for the three months | ||||||
ended June 30, 2016 and 2015, respectively, and dividend payout rates of approximately 3.63% and 1.74%, respectively, per quarter. | ||||||
(3) Net interest spread is the difference between the average yield on average interest-earning assets and the average rate paid on average interest- | ||||||
bearing liabilities. | ||||||
(4) Net interest margin is net interest income divided by average earning assets. |
|
Six Months Ended June 30, | |||||
|
|
2016 |
|
|
2015 |
|
|
|
|
Average |
|
|
Average |
|
Average |
Income/ |
Rate/ |
Average |
Income/ |
Rate/ |
|
Balance |
Expense |
Yield |
Balance |
Expense |
Yield |
Interest-Earning Assets |
|
|
|
|
|
|
Loans (1) |
$ 459,842,951 |
$ 10,849,421 |
4.74 % |
$ 453,180,622 |
$ 10,811,025 |
4.81 % |
Taxable investment securities |
29,081,460 |
255,646 |
1.77 % |
31,758,150 |
207,647 |
1.32 % |
Tax-exempt investment securities |
48,243,249 |
912,495 |
3.80 % |
43,123,366 |
829,364 |
3.88 % |
Sweep and interest-earning accounts |
6,557,888 |
15,606 |
0.48 % |
3,207,206 |
4,260 |
0.27 % |
Other investments (2) |
2,559,163 |
58,713 |
4.61 % |
3,719,450 |
47,671 |
2.58 % |
Total |
$ 546,284,711 |
$ 12,091,881 |
4.45 % |
$ 534,988,794 |
$ 11,899,967 |
4.49 % |
|
|
|
|
|
|
|
Interest-Bearing Liabilities |
|
|
|
|
|
|
Interest-bearing transaction accounts |
$ 112,926,874 |
$ 103,833 |
0.18 % |
$ 114,728,976 |
$ 111,859 |
0.20 % |
Money market accounts |
86,581,602 |
428,606 |
1.00 % |
89,645,735 |
446,545 |
1.00 % |
Savings deposits |
84,449,518 |
52,009 |
0.12 % |
79,084,511 |
47,751 |
0.12 % |
Time deposits |
108,910,228 |
440,847 |
0.81 % |
109,957,225 |
515,483 |
0.95 % |
Federal funds purchased and |
|
|
|
|
|
|
other borrowed funds |
12,113,153 |
31,634 |
0.53 % |
10,000,442 |
13,171 |
0.27 % |
Repurchase agreements |
25,396,197 |
37,305 |
0.30 % |
26,906,269 |
37,570 |
0.28 % |
Capital lease obligations |
533,515 |
21,769 |
8.16 % |
616,527 |
25,105 |
8.14 % |
Junior subordinated debentures |
12,887,000 |
224,254 |
3.50 % |
12,887,000 |
202,333 |
3.17 % |
Total |
$ 443,798,087 |
$ 1,340,257 |
0.61 % |
$ 443,826,685 |
$ 1,399,817 |
0.64 % |
|
|
|
|
|
|
|
Net interest income |
|
$ 10,751,624 |
|
|
$ 10,500,150 |
|
Net interest spread (3) |
|
|
3.84 % |
|
|
3.85 % |
Net interest margin (4) |
|
|
3.96 % |
|
|
3.96 % |
Changes in Interest Income and Interest Expense | ||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, | ||||
|
Variance |
Variance |
|
Variance |
Variance |
|
|
Due to |
Due to |
Total |
Due to |
Due to |
Total |
|
Rate (1) |
Volume (1) |
Variance |
Rate (1) |
Volume (1) |
Variance |
Average Interest-Earning Assets |
|
|
|
|
|
|
Loans |
$ 23,647 |
$ 108,586 |
$ 132,233 |
$ (120,516 ) |
$ 158,912 |
$ 38,396 |
Taxable investment securities |
45,628 |
(20,039 ) |
25,589 |
71,558 |
(23,559 ) |
47,999 |
Tax-exempt investment securities |
(9,754 ) |
79,293 |
69,539 |
(15,378 ) |
98,509 |
83,131 |
Sweep and interest-earning accounts |
1,879 |
1,051 |
2,930 |
6,860 |
4,486 |
11,346 |
Other investments |
19,122 |
(13,576 ) |
5,546 |
37,640 |
(26,598 ) |
11,042 |
Total |
$ 80,522 |
$ 155,315 |
$ 235,837 |
$ (19,836 ) |
$ 211,750 |
$ 191,914 |
|
|
|
|
|
|
|
Average Interest-Bearing Liabilities |
|
|
|
|
|
|
Interest-bearing transaction accounts |
$ (2,742 ) |
$ (969 ) |
$ (3,711 ) |
$ (6,413 ) |
$ (1,613 ) |
$ (8,026 ) |
Money market accounts |
(6,004 ) |
(4,623 ) |
(10,627 ) |
(2,702 ) |
(15,237 ) |
(17,939 ) |
Savings deposits |
449 |
1,547 |
1,996 |
1,065 |
3,193 |
4,258 |
Time deposits |
(9,958 ) |
1,820 |
(8,138 ) |
(70,419 ) |
(4,217 ) |
(74,636 ) |
Federal funds purchased and |
|
|
|
|
|
|
other borrowed funds |
12,264 |
132 |
12,396 |
15,634 |
2,829 |
18,463 |
Repurchase agreements |
811 |
570 |
1,381 |
1,988 |
(2,253 ) |
(265 ) |
Capital lease obligations |
16 |
(1,702 ) |
(1,686 ) |
32 |
(3,368 ) |
(3,336 ) |
Junior subordinated debentures |
13,080 |
0 |
13,080 |
21,921 |
0 |
21,921 |
Total |
$ 7,916 |
$ (3,225 ) |
$ 4,691 |
$ (38,894 ) |
$ (20,666 ) |
$ (59,560 ) |
|
|
|
|
|
|
|
Changes in net interest income |
$ 72,606 |
$ 158,540 |
$ 231,146 |
$ 19,058 |
$ 232,416 |
$ 251,474 |
(1) Items which have shown a year-to-year increase in volume have variances allocated as follows: |
Variance due to rate = Change in rate x new volume |
Variance due to volume = Change in volume x old rate |
Items which have shown a year-to-year decrease in volume have variances allocated as follows: |
Variance due to rate = Change in rate x old volume |
Variances due to volume = Change in volume x new rate |
|
Three Months Ended |
|
|
Six Months Ended |
|
| ||
|
June 30, |
Change |
June 30, |
Change | ||||
|
2016 |
2015 |
$ |
% |
2016 |
2015 |
$ |
% |
|
|
|
|
|
|
|
|
|
Service fees |
$ 655,540 |
$ 642,981 |
$ 12,559 |
1.95 % |
$ 1,273,219 |
$ 1,274,418 |
$ (1,199 ) |
-0.09 % |
Income from sold loans |
231,297 |
247,565 |
(16,268 ) |
-6.57 % |
452,491 |
448,240 |
4,251 |
0.95 % |
Other income from loans |
210,703 |
186,433 |
24,270 |
13.02 % |
406,591 |
320,632 |
85,959 |
26.81 % |
Net realized gain (loss) on sale of |
|
|
|
|
|
|
|
|
securities available-for-sale |
0 |
2,723 |
(2,723 ) |
-100.00 % |
0 |
2,723 |
(2,723 ) |
-100.00 % |
Income from CFSG Partners |
101,002 |
81,345 |
19,657 |
24.16 % |
183,581 |
175,191 |
8,390 |
4.79 % |
Rental income on OREO properties |
0 |
1,101 |
(1,101 ) |
-100.00 % |
0 |
36,521 |
(36,521 ) |
-100.00 % |
Exchange income |
24,000 |
23,000 |
1,000 |
4.35 % |
51,500 |
38,500 |
13,000 |
33.77 % |
SERP fair value adjustment |
7,935 |
(10,442 ) |
18,377 |
175.99 % |
14,406 |
529 |
13,877 |
2,623.25 % |
Other income |
88,222 |
129,775 |
(41,553 ) |
-32.02 % |
174,762 |
220,512 |
(45,750 ) |
-20.75 % |
Total non-interest income |
$ 1,318,699 |
$ 1,304,481 |
$ 14,218 |
1.09 % |
$ 2,556,550 |
$ 2,517,266 |
$ 39,284 |
1.56 % |
|
|
|
Six Months Ended |
| ||||
|
June 30, |
Change |
June 30, |
Change | ||||
|
2016 |
2015 |
$ |
% |
2016 |
2015 |
$ |
% |
|
|
|
|
|
|
|
|
|
Salaries and wages |
$ 1,725,000 |
$ 1,683,200 |
$ 41,800 |
2.48 % |
$ 3,450,000 |
$ 3,338,352 |
$ 111,648 |
3.34 % |
Employee benefits |
685,082 |
672,527 |
12,555 |
1.87 % |
1,370,164 |
1,336,680 |
33,484 |
2.51 % |
Occupancy expenses, net |
606,358 |
609,365 |
(3,007 ) |
-0.49 % |
1,252,104 |
1,299,667 |
(47,563 ) |
-3.66 % |
Other expenses |
|
|
|
|
|
|
|
|
Computer outsourcing |
125,280 |
124,302 |
978 |
0.79 % |
247,975 |
242,869 |
5,106 |
2.10 % |
Service contracts - administrative |
96,217 |
57,915 |
38,302 |
66.13 % |
185,916 |
155,667 |
30,249 |
19.43 % |
Telephone expense |
77,692 |
78,572 |
(880 ) |
-1.12 % |
154,117 |
159,713 |
(5,596 ) |
-3.50 % |
Collection & non-accruing loan |
|
|
|
|
|
|
|
|
expense |
10,000 |
41,005 |
(31,005 ) |
-75.61 % |
38,000 |
53,005 |
(15,005 ) |
-28.31 % |
OREO expense |
36,463 |
67,320 |
(30,857 ) |
-45.84 % |
31,969 |
80,286 |
(48,317 ) |
-60.18 % |
ATM fees |
89,091 |
95,375 |
(6,284 ) |
-6.59 % |
183,311 |
182,778 |
533 |
0.29 % |
State deposit tax |
134,799 |
137,905 |
(3,106 ) |
-2.25 % |
275,010 |
275,695 |
(685 ) |
-0.25 % |
Other miscellaneous expenses |
1,089,198 |
1,212,354 |
(123,156 ) |
-10.16 % |
2,168,906 |
2,351,856 |
(182,950 ) |
-7.78 % |
Total non-interest expense |
$ 4,675,180 |
$ 4,779,840 |
$ (104,660 ) |
-2.19 % |
$ 9,357,472 |
$ 9,476,568 |
$ (119,096 ) |
-1.26 % |
|
June 30, 2016 |
December 31, 2015 |
June 30, 2015 | |||
Assets |
|
|
|
|
|
|
Loans |
$ 471,567,355 |
79.09 % |
$ 458,119,429 |
76.85 % |
$ 459,482,050 |
79.70 % |
Securities available-for-sale |
28,079,675 |
4.71 % |
26,470,400 |
4.44 % |
31,204,034 |
5.41 % |
Securities held-to-maturity |
34,013,002 |
5.70 % |
43,354,419 |
7.27 % |
25,738,769 |
4.46 % |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Demand deposits |
95,419,388 |
16.00 % |
93,525,762 |
15.69 % |
84,396,417 |
14.64 % |
Interest-bearing transaction accounts |
106,925,038 |
17.93 % |
130,735,094 |
21.93 % |
111,758,309 |
19.39 % |
Money market accounts |
70,354,509 |
11.80 % |
81,930,888 |
13.74 % |
71,676,688 |
12.43 % |
Savings deposits |
86,733,253 |
14.55 % |
81,731,290 |
13.71 % |
81,578,169 |
14.15 % |
Time deposits |
$ 109,550,968 |
18.37 % |
$ 107,562,528 |
18.04 % |
$ 105,657,746 |
18.33 % |
Short-term advances |
30,000,000 |
5.03 % |
10,000,000 |
1.68 % |
30,000,000 |
5.20 % |
Long-term advances |
350,000 |
0.06 % |
0 |
0.00 % |
0 |
0.00 % |
Rate Change |
Percent Change in NII |
|
|
Down 100 basis points |
-1.10 % |
Up 200 basis points |
4.80 % |
|
June 30, 2016 |
December 31, 2015 |
June 30, 2015 | |||
|
|
|
|
|
|
|
Commercial & industrial |
$ 72,878,438 |
15.45 % |
$ 65,191,124 |
14.23 % |
$ 73,561,125 |
16.01 % |
Commercial real estate |
185,950,674 |
39.43 % |
178,206,542 |
38.90 % |
172,565,221 |
37.56 % |
1 - 4 family residential - 1st lien |
161,361,864 |
34.22 % |
162,760,273 |
35.53 % |
162,109,916 |
35.28 % |
1 - 4 family residential - Jr lien |
44,078,168 |
9.35 % |
44,720,266 |
9.76 % |
43,816,552 |
9.53 % |
Consumer |
7,298,211 |
1.55 % |
7,241,224 |
1.58 % |
7,429,236 |
1.62 % |
Total loans |
471,567,355 |
100.00 % |
458,119,429 |
100.00 % |
459,482,050 |
100.00 % |
Deduct (add): |
|
|
|
|
|
|
Allowance for loan losses |
5,077,420 |
|
5,011,878 |
|
5,095,212 |
|
Deferred net loan costs |
(320,298 ) |
|
(316,491 ) |
|
(307,235 ) |
|
|
4,757,122 |
|
4,695,387 |
|
4,787,977 |
|
Net loans |
$ 466,810,233 |
|
$ 453,424,042 |
|
$ 454,694,073 |
|
|
June 30, 2016 |
December 31, 2015 |
June 30, 2015 | |||
|
|
|
|
|
|
|
Loans past due 90 days or more |
|
|
|
|
|
|
and still accruing |
|
|
|
|
|
|
Commercial & industrial |
$ 96,659 |
2.07 % |
$ 13,556 |
0.21 % |
$ 0 |
0.00 % |
Commercial real estate |
406,451 |
8.70 % |
45,356 |
0.71 % |
5,313 |
0.08 % |
Residential real estate - 1st lien |
694,007 |
14.85 % |
801,241 |
12.48 % |
528,211 |
7.93 % |
Residential real estate - Jr lien |
0 |
0.00 % |
63,031 |
0.98 % |
82,021 |
1.23 % |
Consumer |
0 |
0.00 % |
0 |
0.00 % |
8,987 |
0.13 % |
Total |
1,197,117 |
25.62 % |
923,184 |
14.38 % |
624,532 |
9.37 % |
|
|
|
|
|
|
|
Non-accrual loans (1) |
|
|
|
|
|
|
Commercial & industrial |
256,456 |
5.49 % |
441,103 |
6.87 % |
767,235 |
11.51 % |
Commercial real estate |
966,071 |
20.67 % |
2,400,757 |
37.38 % |
1,909,917 |
28.66 % |
Residential real estate - 1st lien |
1,467,171 |
31.39 % |
2,009,079 |
31.28 % |
1,927,300 |
28.93 % |
Residential real estate - Jr lien |
377,911 |
8.09 % |
386,132 |
6.01 % |
311,571 |
4.68 % |
Total |
3,067,609 |
65.64 % |
5,237,071 |
81.54 % |
4,916,023 |
73.78 % |
|
|
|
|
|
|
|
Other real estate owned |
409,000 |
8.75 % |
262,000 |
4.08 % |
1,122,500 |
16.85 % |
|
|
|
|
|
|
|
Total |
$ 4,673,726 |
100.01 % |
$ 6,422,255 |
100.00 % |
$ 6,663,055 |
100.00 % |
|
June 30, 2016 |
December 31, 2015 |
June 30, 2015 | |||
|
Number of |
Principal |
Number of |
Principal |
Number of |
Principal |
|
Loans |
Balance |
Loans |
Balance |
Loans |
Balance |
Commercial |
3 |
$ 191,919 |
4 |
$ 298,115 |
5 |
$ 265,798 |
Commercial real estate |
2 |
373,767 |
5 |
1,414,380 |
3 |
1,126,639 |
Residential real estate - 1st lien |
10 |
684,636 |
11 |
967,324 |
6 |
463,435 |
Residential real estate - Jr lien |
1 |
52,130 |
1 |
55,633 |
1 |
47,357 |
Total |
16 |
$ 1,302,452 |
21 |
$ 2,735,452 |
15 |
$ 1,903,229 |
|
June 30, 2016 |
December 31, 2015 |
June 30, 2015 | |||
|
Number of |
Principal |
Number of |
Principal |
Number of |
Principal |
|
Loans |
Balance |
Loans |
Balance |
Loans |
Balance |
Commercial |
2 |
$ 35,340 |
0 |
$ 0 |
0 |
$ 0 |
Commercial real estate |
5 |
1,391,990 |
2 |
429,170 |
1 |
227,865 |
Residential real estate - 1st lien |
27 |
2,558,079 |
21 |
1,958,699 |
19 |
1,670,261 |
Residential real estate - Jr lien |
3 |
132,822 |
1 |
69,828 |
1 |
70,507 |
Total |
37 |
$ 4,118,231 |
24 |
$ 2,457,697 |
21 |
$ 1,968,633 |
|
As of or Six Months Ended June 30, | |
|
2016 |
2015 |
|
|
|
Loans outstanding, end of period |
$ 471,567,355 |
$ 459,482,050 |
Average loans outstanding during period |
$ 459,842,951 |
$ 453,180,622 |
Non-accruing loans, end of period |
$ 3,067,609 |
$ 4,916,023 |
Non-accruing loans, net of government guarantees |
$ 2,918,268 |
$ 4,003,897 |
|
|
|
Allowance, beginning of period |
$ 5,011,878 |
$ 4,905,874 |
Loans charged off(1): |
|
|
Commercial & industrial |
(10,836 ) |
(35,059 ) |
Residential real estate - 1st lien |
(192,549 ) |
(94,575 ) |
Residential real estate - Jr lien |
0 |
(20,199 ) |
Consumer loans |
(23,973 ) |
(28,105 ) |
Total loans charged off |
(227,358 ) |
(177,938 ) |
Recoveries(1): |
|
|
Commercial & industrial |
20,475 |
42,913 |
Residential real estate - 1st lien |
5,686 |
6,042 |
Residential real estate - Jr lien |
120 |
120 |
Consumer loans |
16,619 |
18,201 |
Total recoveries |
42,900 |
67,276 |
Net loans charged off |
(184,458 ) |
(110,662 ) |
Provision charged to income |
250,000 |
300,000 |
Allowance, end of period |
$ 5,077,420 |
$ 5,095,212 |
|
|
|
Net charge offs to average loans outstanding |
0.040 % |
0.024 % |
Provision charged to income as a percent of average loans |
0.054 % |
0.066 % |
Allowance to average loans outstanding |
1.104 % |
1.124 % |
Allowance to non-accruing loans |
165.517 % |
103.645 % |
Allowance to non-accruing loans net of government guarantees |
173.987 % |
127.256 % |
|
Contract or Notional Amount | |
|
June 30, 2016 |
December 31, 2015 |
|
|
|
Unused portions of home equity lines of credit |
$ 25,837,620 |
$ 25,074,972 |
Residential construction lines of credit |
1,985,870 |
3,658,037 |
Commercial real estate and other construction lines of credit |
17,829,936 |
15,586,595 |
Commercial and industrial commitments |
35,718,772 |
46,197,882 |
Other commitments to extend credit |
40,042,635 |
19,991,513 |
Standby letters of credit and commercial letters of credit |
1,733,488 |
1,859,059 |
Recourse on sale of credit card portfolio |
273,555 |
262,625 |
MPF credit enhancement obligation, net of liability recorded |
716,519 |
1,051,601 |
|
June 30, |
December 31, |
June 30, |
|
2016 |
2015 |
2015 |
Long-Term Advances |
|
|
|
FHLBB term advance, 0.00%, due February 26, 2021(1) |
$ 350,000 |
$ 0 |
$ 0 |
|
|
|
|
Short-Term Advances |
|
|
|
FHLBB term advances, 0.65%, 0.48% and 0.24% fixed rate, due August |
|
|
|
10, 2016, February 26, 2016 and July 31, 2015, respectively |
5,000,000 |
10,000,000 |
10,000,000 |
FHLBB term advances, 0.54% and 0.24% fixed rate, due August 24, |
|
|
|
2016 and August 28, 2015, respectively |
10,000,000 |
0 |
10,000,000 |
FHLBB term advances, 0.54% and 0.24% fixed rate, due August 26, |
|
|
|
2016 and September 30, 2015, respectively |
15,000,000 |
0 |
10,000,000 |
|
30,000,000 |
10,000,000 |
30,000,000 |
|
|
|
|
Total Advances |
$ 30,350,000 |
$ 10,000,000 |
$ 30,000,000 |
Balance at December 31, 2015 (book value $9.79 per common share) |
$ 51,414,656 |
Net income |
2,464,693 |
Issuance of stock through the Dividend Reinvestment Plan |
440,672 |
Dividends declared on common stock |
(1,600,917 ) |
Dividends declared on preferred stock |
(43,750 ) |
Unrealized gain on available-for-sale securities during the period, net of tax |
278,885 |
Balance at June 30, 2016 (book value $10.04 per common share) |
$ 52,954,239 |
|
|
|
|
|
Minimum | |
|
|
|
Minimum |
To Be Well | ||
|
|
|
For Capital |
Capitalized Under | ||
|
|
|
Adequacy |
Prompt Corrective | ||
|
Actual |
Purposes: |
Action Provisions(1): | |||
|
Amount |
Ratio |
Amount |
Ratio |
Amount |
Ratio |
|
(Dollars in Thousands) | |||||
June 30, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital |
|
|
|
|
|
|
(to risk-weighted assets) |
|
|
|
|
|
|
Company |
$ 53,805 |
12.12 % |
$ 19,975 |
4.50 % |
N/A |
N/A |
Bank |
$ 53,049 |
11.96 % |
$ 19,952 |
4.50 % |
$ 28,819 |
6.50 % |
|
|
|
|
|
|
|
Tier 1 capital (to risk-weighted assets) |
|
|
|
|
|
|
Company |
$ 53,805 |
12.12 % |
$ 26,633 |
6.00 % |
N/A |
N/A |
Bank |
$ 53,049 |
11.96 % |
$ 26,603 |
6.00 % |
|
$ 8.00 % |
|
|
|
|
|
|
|
Total capital (to risk-weighted assets) |
|
|
|
|
|
|
Company |
$ 58,926 |
13.28 % |
$ 35,511 |
8.00 % |
N/A |
N/A |
Bank |
$ 58,170 |
13.12 % |
$ 35,470 |
8.00 % |
$ 44,295 |
10.00 % |
|
|
|
|
|
|
|
Tier 1 capital (to average assets) |
|
|
|
|
|
|
Company |
$ 53,805 |
9.19 % |
$ 23,410 |
4.00 % |
N/A |
N/A |
Bank |
$ 53,049 |
9.07 % |
$ 23,392 |
4.00 % |
$ 29,240 |
5.00 % |
|
|
|
|
|
|
|
December 31, 2015: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital |
|
|
|
|
|
|
Company |
$ 52,555 |
12.38 % |
$ 19,100 |
4.50 % |
N/A |
N/A |
Bank |
$ 52,000 |
12.27 % |
$ 19,072 |
4.50 % |
$ 27,549 |
6.50 % |
|
|
|
|
|
|
|
Tier 1 capital (to risk-weighted assets) |
|
|
|
|
|
|
Company |
$ 52,555 |
12.38 % |
$ 25,467 |
6.00 % |
N/A |
N/A |
Bank |
$ 52,000 |
12.27 % |
$ 25,430 |
6.00 % |
$ 33,906 |
8.00 % |
|
|
|
|
|
|
|
Total capital (to risk-weighted assets) |
|
|
|
|
|
|
Company |
$ 57,610 |
13.57 % |
$ 33,956 |
8.00 % |
N/A |
N/A |
Bank |
$ 57,056 |
13.46 % |
$ 33,906 |
8.00 % |
$ 42,383 |
10.00 % |
|
|
|
|
|
|
|
Tier 1 capital (to average assets) |
|
|
|
|
|
|
Company |
$ 52,555 |
9.01 % |
$ 23,324 |
4.00 % |
N/A |
N/A |
Bank |
$ 52,000 |
8.93 % |
$ 23,301 |
4.00 % |
$ 29,126 |
5.00 % |
|
|
|
|
Maximum Number of |
|
|
|
Total Number of |
Shares That May Yet |
|
Total Number |
Average |
Shares Purchased |
Be Purchased Under |
|
of Shares |
Price Paid |
as Part of Publicly |
the Plan at the End |
For the period: |
Purchased(1)(2) |
Per Share |
Announced Plan |
of the Period |
|
|
|
|
|
April 1 - April 30 |
7,000 |
$ 13.90 |
N/A |
N/A |
May 1 - May 30 |
4,134 |
14.00 |
N/A |
N/A |
June 1 - June 30 |
700 |
14.00 |
N/A |
N/A |
Total |
11,834 |
$ 13.94 |
N/A |
N/A |
DATED: August 11, 2016 |
/s/ Stephen P. Marsh |
|
|
Stephen P. Marsh, Board Chair |
|
|
& Chief Executive Officer |
|
|
(Principal Executive Officer) |
|
|
|
|
DATED: August 11, 2016 |
/s/ Louise M. Bonvechio |
|
|
Louise M. Bonvechio, Treasurer |
|
|
(Principal Financial Officer) |
|
1. |
I have reviewed this quarterly report on Form 10-Q of Community Bancorp.; | |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
(c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
(d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;
and |
5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): | |
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
|
Community Bancorp. |
|
|
|
|
August 11, 2016 |
By: /s/ Stephen P. Marsh |
|
|
Name: Stephen P. Marsh, |
|
|
Title: Board Chair & Chief Executive Officer |
|
|
(Principal Executive Officer) |
|
1. |
I have reviewed this quarterly report on Form 10-Q of Community Bancorp.; | |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
(c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
(d) |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;
and |
5. |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): | |
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
|
Community Bancorp. |
|
|
|
|
August 11, 2016 |
By: /s/ Louise M. Bonvechio |
|
|
Name: Louise M. Bonvechio |
|
|
Title: Treasurer |
|
|
(Principal Financial Officer) |
|
|
Community Bancorp. |
|
|
|
|
August 11, 2016 |
By: /s/ Stephen P. Marsh |
|
|
Name: Stephen P. Marsh, |
|
|
Title: Board Chair & Chief Executive Officer |
|
|
(Principal Executive Officer) |
|
|
Community Bancorp. |
|
|
|
|
August 11, 2016 |
By: /s/ Louise M. Bonvechio |
|
|
Name: Louise M. Bonvechio |
|
|
Title: Treasurer |
|
|
(Principal Financial Officer) |
|
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Aug. 01, 2016 |
|
Document And Entity Information | ||
Entity Registrant Name | Community Bancorp /VT | |
Entity Central Index Key | 0000718413 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer | No | |
Is Entity a Voluntary Filer | No | |
Is Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 5,026,914 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2016 |
Consolidated Balance Sheets (Parenthetical) - USD ($) |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
---|---|---|---|
Assets | |||
Securities held-to-maturity, fair value | $ 34,682,000 | $ 44,143,000 | $ 26,055,000 |
Shareholder's Equity | |||
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 25 | 25 | 25 |
Preferred stock, shares outstanding (in shares) | 25 | 25 | 25 |
Preferred stock liquidation value | $ 100,000 | $ 100,000 | $ 100,000 |
Common stock par value (in dollars per share) | $ 2.50 | $ 2.50 | $ 2.50 |
Common stock, shares authorized (in shares) | 15,000,000 | 15,000,000 | 15,000,000 |
Common stock, shares issued (in shares) | 5,236,891 | 5,204,517 | 5,176,128 |
Treasury stock (in shares) | 210,101 | 210,101 | 210,101 |
Consolidated Statements of Income (Unaudited) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Interest income | ||||
Interest and fees on loans | $ 5,478,997 | $ 5,346,764 | $ 10,849,421 | $ 10,811,025 |
Interest on debt securities | ||||
Taxable | 128,197 | 102,608 | 255,646 | 207,647 |
Tax-exempt | 322,150 | 276,254 | 602,247 | 547,380 |
Dividends | 29,334 | 23,788 | 58,713 | 47,671 |
Interest on federal funds sold and overnight deposits | 4,700 | 1,770 | 15,606 | 4,260 |
Total interest income | 5,963,378 | 5,751,184 | 11,781,633 | 11,617,983 |
Interest expense | ||||
Interest on deposits | 508,701 | 529,181 | 1,025,295 | 1,121,638 |
Interest on federal funds purchased and other borrowed funds | 34,245 | 23,535 | 53,403 | 38,276 |
Interest on repurchase agreements | 19,314 | 17,933 | 37,305 | 37,570 |
Interest on junior subordinated debentures | 114,735 | 101,655 | 224,254 | 202,333 |
Total interest expense | 676,995 | 672,304 | 1,340,257 | 1,399,817 |
Net interest income | 5,286,383 | 5,078,880 | 10,441,376 | 10,218,166 |
Provision for loan losses | 150,000 | 150,000 | 250,000 | 300,000 |
Net interest income after provision for loan losses | 5,136,383 | 4,928,880 | 10,191,376 | 9,918,166 |
Non-interest income | ||||
Service fees | 655,540 | 642,981 | 1,273,219 | 1,274,418 |
Income from sold loans | 231,297 | 247,565 | 452,491 | 448,240 |
Other income from loans | 210,703 | 186,433 | 406,591 | 320,632 |
Net realized gain on sale of securities available-for-sale | 0 | 2,723 | 0 | 2,723 |
Other income | 221,159 | 224,779 | 424,249 | 471,253 |
Total non-interest income | 1,318,699 | 1,304,481 | 2,556,550 | 2,517,266 |
Non-interest expense | ||||
Salaries and wages | 1,725,000 | 1,683,200 | 3,450,000 | 3,338,352 |
Employee benefits | 685,082 | 672,527 | 1,370,164 | 1,336,680 |
Occupancy expenses, net | 606,358 | 609,365 | 1,252,104 | 1,299,667 |
Other expenses | 1,658,740 | 1,814,748 | 3,285,204 | 3,501,869 |
Total non-interest expense | 4,675,180 | 4,779,840 | 9,357,472 | 9,476,568 |
Income before income taxes | 1,779,902 | 1,453,521 | 3,390,454 | 2,958,864 |
Income tax expense | 484,703 | 375,817 | 925,761 | 771,320 |
Net income | $ 1,295,199 | $ 1,077,704 | $ 2,464,693 | $ 2,187,544 |
Earnings per common share | $ 0.25 | $ 0.21 | $ 0.48 | $ 0.43 |
Weighted average number of common shares used in computing earnings per share | 5,016,097 | 4,954,879 | 5,008,121 | 4,946,734 |
Dividends declared per common share | $ 0.16 | $ 0.16 | $ 0.32 | $ 0.32 |
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 1,295,199 | $ 1,077,704 | $ 2,464,693 | $ 2,187,544 |
Other comprehensive income (loss), net of tax: | ||||
Unrealized holding gain (loss) on available-for-sale securities arising during the period | 87,670 | (189,219) | 422,553 | 13,785 |
Reclassification adjustment for gain realized in income | 0 | (2,723) | 0 | (2,723) |
Unrealized gain (loss) during the year | 87,670 | (191,942) | 422,553 | 11,062 |
Tax effect | (29,808) | 65,260 | (143,668) | (3,761) |
Other comprehensive income (loss), net of tax | 57,862 | (126,682) | 278,885 | 7,301 |
Total comprehensive income | $ 1,353,061 | $ 951,022 | $ 2,743,578 | $ 2,194,845 |
1. Basis of Presentation and Consolidation |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Note 1. Basis of Presentation and Consolidation | The interim consolidated financial statements of Community Bancorp. and Subsidiary are unaudited. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all adjustments necessary for the fair presentation of the financial condition and results of operations of the Company contained herein have been made. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2015 contained in the Company's Annual Report on Form 10-K. The results of operations for the interim period are not necessarily indicative of the results of operations to be expected for the full annual period ending December 31, 2016, or for any other interim period.
Certain amounts in the 2015 unaudited consolidated income statements have been reclassified to conform to the 2016 presentation. Reclassifications had no effect on prior period net income or shareholders equity. |
2. Recent Accounting Developments |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Note 2. Recent Accounting Developments | In January 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-01, Financial InstrumentsOverall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance changes how entities account for equity investments that do not result in consolidation and are not accounted for under the equity method of accounting. This guidance also changes certain disclosure requirements and other aspects of current accounting principles generally accepted in the United States of America (US GAAP). Public businesses must use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within the fiscal year. The Company is currently evaluating the impact of the adoption of the ASU on its consolidated financial statements.
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The ASU was issued to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The ASU is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early application of the amendments in the ASU is permitted for all entities. The Company is currently evaluating the impact of the adoption of the ASU on its consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13, Financial InstrumentsCredit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Under the new guidance, which will replace the existing incurred loss model for recognizing credit losses, banks and other lending institutions will be required to recognize the full amount of expected credit losses. The new guidance, which is referred to as the current expected credit loss model, requires that expected credit losses for financial assets held at the reporting date that are accounted for at amortized cost be measured and recognized based on historical experience and current and reasonably supportable forecasted conditions to reflect the full amount of expected credit losses. A modified version of these requirements also applies to debt securities classified as available for sale. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within such years. The Company is evaluating the potential impact of the ASU on its consolidated financial statements. |
3. Earnings per Common Share |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 3. Earnings per Common Share | Earnings per common share amounts are computed based on the weighted average number of shares of common stock issued during the period (retroactively adjusted for stock splits and stock dividends, if any), including Dividend Reinvestment Plan shares issuable upon reinvestment of dividends declared, and reduced for shares held in treasury.
The following tables illustrate the calculation of earnings per common share for the periods presented, as adjusted for the cash dividends declared on the preferred stock:
|
4. Investment Securities |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Investment Securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 4. Investment Securities | Securities available-for-sale (AFS) and held-to-maturity (HTM) as of the balance sheet dates consisted of the following:
*Method used to determine fair value of HTM securities rounds values to nearest thousand.
U.S. GSE debt securities, Agency MBS securities and certificates of deposit (CDs) held for investment with a book value of $27,725,902 and a fair value of $28,079,675 collateralized repurchase agreements at June 30, 2016. These repurchase agreements mature daily.
The scheduled maturities of debt securities AFS were as follows:
Because the actual maturities of Agency MBS usually differ from their contractual maturities due to the right of borrowers to prepay the underlying mortgage loans, usually without penalty, those securities are not presented in the table by contractual maturity date.
The scheduled maturities of debt securities HTM were as follows:
*Method used to determine fair value of HTM securities rounds values to nearest thousand.
There were no debt securities HTM in an unrealized loss position as of the balance sheet dates. Debt securities AFS with unrealized losses as of the balance sheet dates are presented in the table below.
Debt securities in the table above consisted of three Agency MBS securities at June 30, 2016, six U.S. GSE debt securities, twelve Agency MBS and six CDs held for investment at December 31, 2015, and five U.S. GSE debt securities, eleven Agency MBS securities and five CDs at June 30, 2015. The unrealized losses for all periods presented were principally attributable to changes in prevailing interest rates for similar types of securities and not deterioration in the creditworthiness of the issuer.
Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market conditions, or adverse developments relating to the issuer, warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than the carrying value, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment for a period of time sufficient to allow for any anticipated recovery in fair value. In analyzing an issuer's financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies or other adverse developments in the status of the securities have occurred, and the results of reviews of the issuer's financial condition. As of June 30, 2016, there were no declines in the fair value of any of the securities reflected in the table above that were deemed by management to be other than temporary. |
5. Loans, Allowance for Loan Losses and Credit Quality |
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Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 5. Loans, Allowance for Loan Losses and Credit Quality | The composition of net loans as of the balance sheet dates was as follows:
The following is an age analysis of past due loans (including non-accrual), by portfolio segment:
For all loan segments, loans over 30 days past due are considered delinquent.
As of June 30, 2016, there were three residential mortgage loans in process of foreclosure totaling $84,458, compared to five residential mortgage loans totaling $400,905 as of December 31, 2015, and four residential mortgages loans totaling $403,526 as of June 30, 2015.
Allowance for loan losses
The allowance for loan losses is established through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is probable. Subsequent recoveries, if any, are credited to the allowance.
Unsecured loans, primarily consumer loans, are charged off when they become uncollectible and no later than 120 days past due. Unsecured loans to customers who subsequently file bankruptcy are charged off within 30 days of receipt of the notification of filing or by the end of the month in which the loans become 120 days past due, whichever occurs first. For secured loans, both residential and commercial, the potential loss on impaired loans is carried as a loan loss reserve specific allocation; the loss portion is charged off when collection of the full loan appears unlikely. The unsecured portion of a real estate loan is that portion of the loan exceeding the "fair value" of the collateral less the estimated cost to sell. Value of the collateral is determined in accordance with the Companys appraisal policy. The unsecured portion of an impaired real estate secured loan is charged off by the end of the month in which the loan becomes 180 days past due.
As described below, the allowance consists of general, specific and unallocated components. However, the entire allowance is available to absorb losses in the loan portfolio, regardless of specific, general and unallocated components considered in determining the amount of the allowance.
General component
The general component of the allowance for loan losses is based on historical loss experience, adjusted for qualitative factors and stratified by the following loan segments: commercial and industrial, commercial real estate, residential real estate first (1st) lien, residential real estate junior (Jr) lienand consumer loans. The Company does not disaggregate its portfolio segments further into classes. Loss ratios are calculated by loan segment for one year, two year, three year, four year and five year look back periods. The highest loss ratio among these look-back periods is then applied against the respective segment. Management uses an average of historical losses based on a time frame appropriate to capture relevant loss data for each loan segment. This historical loss factor is adjusted for the following qualitative factors: levels of and trends in delinquencies and non-performing loans, levels of and trends in loan risk groups, trends in volumes and terms of loans, effects of any changes in loan related policies, experience, ability and the depth of management, documentation and credit data exception levels, national and local economic trends, external factors such as competition and regulation and lastly, concentrations of credit risk in a variety of areas, including portfolio product mix, the level of loans to individual borrowers and their related interests, loans to industry segments, and the geographic distribution of commercial real estate loans. This evaluation is inherently subjective as it requires estimates that are susceptible to revision as more information becomes available.
The qualitative factors are determined based on the various risk characteristics of each loan segment. The Company has policies, procedures and internal controls that management believes are commensurate with the risk profile of each of these segments. Major risk characteristics relevant to each portfolio segment are as follows:
Commercial& Industrial Loans in this segment include commercial and industrial loans and to a lesser extent loans to finance agricultural production. Commercial loans are made to businesses and are generally secured by assets of the business, including trade assets and equipment. While not the primary collateral, in many cases these loans may also be secured by the real estate of the business. Repayment is expected from the cash flows of the business. A weakened economy, soft consumer spending, unfavorable foreign trade conditions and the rising cost of labor or raw materials are examples of issues that can impact the credit quality in this segment.
Commercial Real Estate Loans in this segment are principally made to businesses and are generally secured by either owner-occupied, or non-owner occupied commercial real estate. A relatively small portion of this segment includes farm loans secured by farm land and buildings. As with commercial and industrial loans, repayment of owner-occupied commercial real estate loans is expected from the cash flows of the business and the segment would be impacted by the same risk factors as commercial and industrial loans. The non-owner occupied commercial real estate portion includes both residential and commercial construction loans, vacant land and real estate development loans, multi-family dwelling loans and commercial rental property loans. Repayment of construction loans is expected from permanent financing takeout; the Company generally requires a commitment or eligibility for the take-out financing prior to construction loan origination. Real estate development loans are generally repaid from the sale of the subject real property as the project progresses. Construction and development lending entail additional risks, including the project exceeding budget, not being constructed according to plans, not receiving permits, or the pre-leasing or occupancy rate not meeting expectations. Repayment of multi-family loans and commercial rental property loans is expected from the cash flow generated by rental payments received from the individuals or businesses occupying the real estate. Commercial real estate loans are impacted by factors such as competitive market forces, vacancy rates, cap rates, net operating incomes, lease renewals and overall economic demand. In addition, loans in the recreational and tourism sector can be affected by weather conditions, such as unseasonably low winter snowfalls. Commercial real estate lending also carries a higher degree of environmental risk than other real estate lending.
Residential Real Estate - 1st Lien All loans in this segment are collateralized by first mortgages on 1 4 familyowner-occupied residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, has an impact on the credit quality of this segment.
Residential Real Estate Jr Lien All loans in this segment are collateralized by junior lien mortgages on 1 4 family residential real estate and repayment is primarily dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, has an impact on the credit quality of this segment.
Consumer Loans in this segment are made to individuals for consumer and household purposes. This segment includes both loans secured by automobiles and other consumer goods, as well as loans that are unsecured. This segment also includes overdrafts, which are extensions of credit made to both individuals and businesses to cover temporary shortages in their deposit accounts and are generally unsecured. The Company maintains policies restricting the size and term of these extensions of credit. The overall health of the economy, including unemployment rates, has an impact on the credit quality of this segment.
Specific component
The specific component of the allowance for loan losses relates to loans that are impaired. Impaired loans are loan(s) to a borrower that in the aggregate are greater than $100,000 and that are in non-accrual status or are troubled debt restructurings (TDR) regardless of amount. A specific allowance is established for an impaired loan when its estimated impaired basis is less than the carrying value of the loan. For all loan segments, except consumer loans, a loan is considered impaired when, based on current information and events, in managements estimation it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant or temporary payment delays and payment shortfalls generally are not classified as impaired. Management evaluates 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 and frequency of the delay, the reasons for the delay, the borrowers 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, by either the present value of expected future cash flows discounted at the loans effective interest rate, the loans obtainable market price, or the fair value of the collateral if the loan is collateral dependent.
Impaired loans also include troubled loans that are restructured. A TDR occurs when the Company, for economic or legal reasons related to the borrowers financial difficulties, grants a concession to the borrower that would otherwise not be granted. TDRs may include the transfer of assets to the Company in partial satisfaction of a troubled loan, a modification of a loans terms, or a combination of the two.
Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer loans for impairment evaluation, unless such loans are subject to a restructuring agreement.
Unallocated component
An unallocated component of the allowance for loan losses is maintained to cover uncertainties that could affect managements estimate of probable losses. The unallocated component reflects managements estimate of the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. While unallocated reserves have increased year over year, they are considered by management to be appropriate in light of the Companys continued growth strategy and shift in the portfolio from residential loans to commercial and commercial real estate loans and the risk associated with the relatively new, unseasoned loans in those portfolios.
The tables below summarize changes in the allowance for loan losses and select loan information, by portfolio segment, for the periods indicated.
Impaired loans, by portfolio segment, were as follows:
(1) For the three months ended June 30, 2015 (2) For the six months ended June 30, 2015
Interest income recognized on impaired loans was immaterial for all periods presented.
For all loan segments, the accrual of interest is discontinued when a loan is specifically determined to be impaired or when the loan is delinquent 90 days and management believes, after considering collection efforts and other factors, that the borrower's financial condition is such that collection of interest is considered by management to be doubtful. Any unpaid interest previously accrued on those loans is reversed from income. Interest income is generally not recognized on specific impaired loans unless the likelihood of further loss is considered by management to be remote. Interest payments received on impaired loans are generally applied as a reduction of the loan principal balance. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are considered by management to be reasonably assured.
Credit Quality Grouping
In developing the allowance for loan losses, management uses credit quality grouping to help evaluate trends in credit quality. The Company groups credit risk into Groups A, B and C. The manner the Company utilizes to assign risk grouping is driven by loan purpose. Commercial purpose loans are individually risk graded while the retail portion of the portfolio is generally grouped by delinquency pool.
Group A loans - Acceptable Risk are loans that are expected to perform as agreed under their respective terms. Such loans carry a normal level of risk that does not require management attention beyond that warranted by the loan or loan relationship characteristics, such as loan size or relationship size. Group A loans include commercial purpose loans that are individually risk rated and retail loans that are rated by pool. Group A retail loans include both performing consumer and residential real estate loans. Residential real estate loans are loans to individuals secured by 1-4 family homes, including first mortgages, home equity and home improvement loans. Loan balances fully secured by deposit accounts or that are fully guaranteed by the Federal Government are considered acceptable risk.
Group B loans Management Involved - are loans that require greater attention than the acceptable loans in Group A. Characteristics of such loans may include, but are not limited to, borrowers that are experiencing negative operating trends such as reduced sales or margins, borrowers that have exposure to adverse market conditions such as increased competition or regulatory burden, or borrowers that have had unexpected or adverse changes in management. These loans have a greater likelihood of migrating to an unacceptable risk level if these characteristics are left unchecked. Group B is limited to commercial purpose loans that are individually risk rated.
Group C loans Unacceptable Risk are loans that have distinct shortcomings that require a greater degree of management attention. Examples of these shortcomings include a borrower's inadequate capacity to service debt, poor operating performance, or insolvency. These loans are more likely to result in repayment through collateral liquidation. Group C loans range from those that are likely to sustain some loss if the shortcomings are not corrected, to those for which loss is imminent and non-accrual treatment is warranted. Group C loans include individually rated commercial purpose loans and retail loans adversely rated in accordance with the Federal Financial Institutions Examination Councils Uniform Retail Credit Classification Policy. Group C retail loans include 1-4 family residential real estate loans and home equity loans past due 90 days or more with loan-to-value ratios greater than 60%, home equity loans 90 days or more past due where the bank does not hold first mortgage, irrespective of loan-to-value, loans in bankruptcy where repayment is likely but not yet established, and lastly consumer loans that are 90 days or more past due.
Commercial purpose loan ratings are assigned by the commercial account officer; for larger and more complex commercial loans, the credit rating is a collaborative assignment by the lender and the credit analyst. The credit risk rating is based on the borrower's expected performance, i.e., the likelihood that the borrower will be able to service its obligations in accordance with the loan terms. Credit risk ratings are meant to measure risk versus simply record history. Assessment of expected future payment performance requires consideration of numerous factors. While past performance is part of the overall evaluation, expected performance is based on an analysis of the borrower's financial strength, and historical and projected factors such as size and financing alternatives, capacity and cash flow, balance sheet and income statement trends, the quality and timeliness of financial reporting, and the quality of the borrowers management. Other factors influencing the credit risk rating to a lesser degree include collateral coverage and control, guarantor strength and commitment, documentation, structure and covenants and industry conditions. There are uncertainties inherent in this process.
Credit risk ratings are dynamic and require updating whenever relevant information is received. The risk ratings of larger or more complex loans, and Group B and C rated loans, are assessed at the time of their respective annual reviews, during quarterly updates, in action plans or at any other time that relevant information warrants update. Lenders are required to make immediate disclosure to the Chief Credit Officer of any known increase in loan risk, even if considered temporary in nature.
The risk ratings within the loan portfolio, by segment, as of the balance sheet dates were as follows:
Modifications of Loans and TDRs
A loan is classified as a TDR if, for economic or legal reasons related to a borrowers financial difficulties, the Company grants a concession to the borrower that it would not otherwise consider.
The Company is deemed to have granted such a concession if it has modified a troubled loan in any of the following ways:
An insignificant delay or insignificant shortfall in the amount of payments typically would not require the loan to be accounted for as a TDR. However, pursuant to regulatory guidance, any payment delay longer than three months is generally not considered insignificant. Managements assessment of whether a concession has been granted also takes into account payments expected to be received from third parties, including third-party guarantors, provided that the third party has the ability to perform on the guarantee.
The Companys TDRs are principally a result of extending loan repayment terms to relieve cash flow difficulties. The Company has only, on a limited basis, reduced interest rates for borrowers below the current market rate for the borrower. The Company has not forgiven principal or reduced accrued interest within the terms of original restructurings, nor has it converted variable rate terms to fixed rate terms. However, the Company evaluates each TDR situation on its own merits and does not foreclose the granting of any particular type of concession.
New TDRs, by portfolio segment, during the periods presented were as follows:
The TDRs for which there was a payment default during the twelve month periods presented were as follows:
TDRs are treated as other impaired loans and carry individual specific reserves with respect to the calculation of the allowance for loan losses. These loans are categorized as non-performing, may be past due, and are generally adversely risk rated. The TDRs that have defaulted under their restructured terms are generally in collection status and their reserve is typically calculated using the fair value of collateral method. At June 30, 2016, the specific allocation related to TDRs was approximately $68,500 compared to $25,100 at December 31, 2015 and $104,600 at June 30, 2015.
As of the balance sheet dates, the Company was not contractually committed to lend additional funds to debtors with impaired or non-accrual loans. The Company is contractually committed to lend on one Small Business Administration (SBA) guaranteed line of credit to a borrower whose lending relationship was previously restructured, but was no longer considered impaired for disclosure purposes. |
6. Transactions with Related Parties |
6 Months Ended |
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Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Note 6. Transactions with Related Parties | Certain Related Party Loans
Some of the incumbent directors, nominees and executive officers of the Company, and some of the corporations and firms with which these individuals are associated, are customers of the Bank in the ordinary course of business, or have loans outstanding from the Bank (referred to in this discussion as related party loans), and it is anticipated that they will continue to be customers of and indebted to the Bank in the future. All such related party loans were made in the ordinary course of business, and were made on substantially the same terms, including interest rates and collateral, as those prevailing at the same time for comparable Bank transactions with unaffiliated persons, although directors were generally allowed the lowest interest rate given to others on comparable loans. Except as disclosed in the following paragraph, none of such related party loans represent more than the normal risk of collectability or present other unfavorable features.
As previously reported, the Bank has loans to two related commercial enterprises in which one of the Companys Directors is a 35% non-controlling equity owner. The aggregate outstanding balance of principal and accrued interest for these loans as of June 30, 2016 was $3,324,950. The loans are cross-collateralized, with collateral consisting primarily of real estate and equipment, and are also cross-guaranteed by the two borrower entities. The loans are further secured by guaranties of the two principals of the borrower entities. As of June 30, 2016, the loans were considered by management to be potential problem loans and the Bank has subsequently declared the two borrower entities to be in default under their loan agreements. Unless the defaults are timely cured to the Banks satisfaction, it will proceed with collection of the two loans in accordance with its normal collection practices. The Bank believes that the value of thecollateral exceeds the aggregate amount of the indebtedness and does not expect to incur a loss on the loans, although liquidation of the collateral may take longer than originally anticipated. |
7. Goodwill and Other Intangible Assets |
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Jun. 30, 2016 | ||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||
Note 7. Goodwill and Other Intangible Assets | As a result of the merger with LyndonBank on December 31, 2007, the Company recorded goodwill amounting to $11,574,269. The goodwill is not amortizable and is not deductible for tax purposes.
The Company also recorded $4,161,000 of acquired identified intangible assets representing the core deposit intangible which is subject to amortization as a non-interest expense over a ten year period. The accumulated amortization expense was $3,751,964 and $3,479,269 as of June 30, 2016 and 2015, respectively.
Amortization expense for the core deposit intangible for the first six months of 2016 and 2015 was $136,350. As of June 30, 2016, the remaining annual amortization expense related to the core deposit intangible, absent any impairment, is expected to be as follows:
Management evaluates goodwill for impairment annually and the core deposit intangible for impairment if conditions warrant. As of the date of the most recent evaluation (December 31, 2015), management concluded that no impairment existed in either category. |
8. Fair Value |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 8. Fair Value | Certain assets and liabilities are recorded at fair value to provide additional insight into the Companys quality of earnings. The fair values of some of these assets and liabilities are measured on a recurring basis while others are measured on a non-recurring basis, with the determination based upon applicable existing accounting pronouncements. For example, securities available-for-sale are recorded at fair value on a recurring basis. Other assets, such as mortgage servicing rights, loans held-for-sale, impaired loans, and OREO are recorded at fair value on a non-recurring basis using the lower of cost or market methodology to determine impairment of individual assets. The Company groups assets and liabilities which are recorded at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. The level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement (with Level 1 considered highest and Level 3 considered lowest). A brief description of each level follows.
Level 1 Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include debt and equity securities and derivative contracts that are traded in an active exchange market, as well as U.S. Treasury, other U.S. Government debt securities that are highly liquid and are actively traded in over-the-counter markets.
Level 2 Observable inputs other than Level 1 prices such as quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes mortgage servicing rights, impaired loans and OREO.
Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.
The following methods and assumptions were used by the Company in estimating its fair value measurements and disclosures:
Cash and cash equivalents: The carrying amounts reported in the balance sheet for cash and cash equivalents approximate their fair values. As such, the Company classifies these financial instruments as Level 1.
Securities available-for-sale and held-to-maturity:Fair value measurement is based upon quoted prices for similar assets, if available. If quoted prices are not available, fair values are measured using matrix pricing models, or other model-based valuation techniques requiring observable inputs other than quoted prices such as yield curves, prepayment speeds and default rates. Level 1 securities would include U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets. Level 2 securities include federal agency securities and securities of local municipalities.
Restricted equity securities: Restricted equity securities are comprised of Federal Reserve Bank of Boston (FRBB) stock and Federal Home Loan Bank of Boston (FHLBB) stock. These securities are carried at cost, which is believed to approximate fair value, based on the redemption provisions of the FRBB and the FHLBB. The stock is nonmarketable, and redeemable at par value, subject to certain conditions. As such the Company classifies these securities as Level 2.
Loans and loans held-for-sale: For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying amounts. The fair values for other loans (for example, fixed rate residential, commercial real estate, and rental property mortgage loans, and commercial and industrial loans) are estimated using discounted cash flow analyses, based on interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Loan fair value estimates include judgments regarding future expected loss experience and risk characteristics. Loan impairment is deemed to exist when full repayment of principal and interest according to the contractual terms of the loan is no longer probable. Impaired loans are reported based on one of three measures: the present value of expected future cash flows discounted at the loans effective interest rate; the loans observable market price; or the fair value of the collateral if the loan is collateral dependent. If the fair value is less than an impaired loans recorded investment, an impairment loss is recognized as part of the allowance for loan losses. Accordingly, certain impaired loans may be subject to measurement at fair value on a non-recurring basis. Management has estimated the fair values of these assets using Level 2 inputs, such as the fair value of collateral based on independent third-party appraisals for collateral-dependent loans. All other loans are valued using Level 3 inputs.
The fair value of loans held-for-sale is based upon an actual purchase and sale agreement between the Company and an independent market participant. The sale is executed within a reasonable period following quarter end at the stated fair value.
Mortgage servicing rights: Mortgage servicing rights represent the value associated with servicing residential mortgage loans. Servicing assets and servicing liabilities are reported using the amortization method and compared to fair value for impairment. In evaluating the carrying values of mortgage servicing rights, the Company obtains third party valuations based on loan level data including note rate, and the type and term of the underlying loans. As such, the Company classifies mortgage servicing rights as non-recurring Level 2.
OREO: Real estate acquired through or in lieu of foreclosure and bank properties no longer used as bank premises are initially recorded at fair value. The fair value of OREO is based on property appraisals and an analysis of similar properties currently available. As such, the Company records OREO as non-recurring Level 2.
Deposits, federal funds purchased and borrowed funds: The fair values disclosed for demand deposits (for example, checking accounts, savings accounts and repurchase agreements) are, by definition, equal to the amount payable on demand at the reporting date (that is, their carrying amounts). The fair values for certificates of deposit and borrowed funds are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates and indebtedness to a schedule of aggregated contractual maturities on such time deposits and indebtedness. As such the Company classifies deposits, federal funds purchased and borrowed funds as Level 2.
Capital lease obligations: Fair value is determined using a discounted cash flow calculation using current rates. Based on current rates, carrying value approximates fair value. As such the Company classifies these obligations as Level 2.
Junior subordinated debentures: Fair value is estimated using current rates for debentures of similar maturity. As such the Company classifies these instruments as Level 2.
Accrued interest: The carrying amounts of accrued interest approximate their fair values. Due to their short-term nature the Company classifies accrued interest as Level 2.
Off-balance-sheet credit related instruments: Commitments to extend credit are evaluated and fair value is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present credit-worthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates.
FASB Accounting Standards Codification Topic 825, Financial Instruments, requires disclosures of fair value information about financial instruments, whether or not recognized in the balance sheet, if the fair values can be reasonably determined. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Companys various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques using observable inputs when available. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Topic 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.
Assets and Liabilities Recorded at Fair Value on a Recurring Basis
Assets measured at fair value on a recurring basis and reflected in the consolidated balance sheets at the dates presented, segregated by fair value hierarchy, are summarized below:
There were no transfers of assets between Levels during any of the periods presented. There were no Level 1 assets or liabilities measured on a recurring basis as of June 30, 2016 or December 31, 2015, and there were no Level 3 assets or liabilities measured on a recurring basis as of any of the balance sheet dates presented.
Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis
The following table includes assets measured at fair value on a non-recurring basis that have had a fair value adjustment since their initial recognition. Impaired loans measured at fair value only include impaired loans with a related specific allowance for loan losses and are presented net of specific allowances as disclosed in Note 5.
Assets measured at fair value on a non-recurring basis and reflected in the consolidated balance sheets at the dates presented, segregated by fair value hierarchy, are summarized below:
There were no Level 1 or Level 3 assets or liabilities measured on a non-recurring basis as of the balance sheet dates presented.
The estimated fair values of commitments to extend credit and letters of credit were immaterial as of the dates presented in the tables below. The estimated fair values of the Company's financial instruments were as follows:
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9. Loan Servicing |
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Note 9. Loan Servicing | The following table shows the changes in the carrying amount of the mortgage servicing rights, included in other assets in the consolidated balance sheets, for the periods indicated:
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10. Legal Proceedings |
6 Months Ended |
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Jun. 30, 2016 | |
Legal Proceedings | |
Note 10. Legal Proceedings | In the normal course of business, the Company and its subsidiary are involved in litigation that is considered incidental to their business. Management does not expect that any such litigation will be material to the Company's consolidated financial condition or results of operations. |
11. Subsequent Event |
6 Months Ended |
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Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Note 11. Subsequent Event | The Company has evaluated events and transactions through the date that the financial statements were issued for potential recognition or disclosure in these financial statements, as required by U.S. GAAP. On June 9, 2016, the Company declared a cash dividend of $0.16 per common share payable August 1, 2016 to shareholders of record as of July 15, 2016. This dividend, amounting to $801,734, was accrued at June 30, 2016. |
1. Basis of Presentation and Consolidation (Policies) |
6 Months Ended |
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Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Consolidation | The interim consolidated financial statements of Community Bancorp. and Subsidiary are unaudited. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all adjustments necessary for the fair presentation of the financial condition and results of operations of the Company contained herein have been made. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2015 contained in the Company's Annual Report on Form 10-K. The results of operations for the interim period are not necessarily indicative of the results of operations to be expected for the full annual period ending December 31, 2016, or for any other interim period.
Certain amounts in the 2015 unaudited consolidated income statements have been reclassified to conform to the 2016 presentation. Reclassifications had no effect on prior period net income or shareholders equity. |
Recent Accounting Developments | In January 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-01, Financial InstrumentsOverall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance changes how entities account for equity investments that do not result in consolidation and are not accounted for under the equity method of accounting. This guidance also changes certain disclosure requirements and other aspects of current accounting principles generally accepted in the United States of America (US GAAP). Public businesses must use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within the fiscal year. The Company is currently evaluating the impact of the adoption of the ASU on its consolidated financial statements.
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The ASU was issued to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The ASU is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early application of the amendments in the ASU is permitted for all entities. The Company is currently evaluating the impact of the adoption of the ASU on its consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13, Financial InstrumentsCredit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Under the new guidance, which will replace the existing incurred loss model for recognizing credit losses, banks and other lending institutions will be required to recognize the full amount of expected credit losses. The new guidance, which is referred to as the current expected credit loss model, requires that expected credit losses for financial assets held at the reporting date that are accounted for at amortized cost be measured and recognized based on historical experience and current and reasonably supportable forecasted conditions to reflect the full amount of expected credit losses. A modified version of these requirements also applies to debt securities classified as available for sale. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within such years. The Company is evaluating the potential impact of the ASU on its consolidated financial statements. |
3. Earnings per Common Share (Tables) |
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Schedule Of Earnings Per Share |
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4. Investment Securities (Tables) |
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Schedule Of Available For Sale Securities |
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Schedule Of Held to Maturity Securities |
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Schedule of Maturities of Debt Securities Available for Sale |
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Schedule Of Maturities of Debt Securities Held to Maturity |
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Schedule Of Unrealized Loss |
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5. Loans, Allowance for Loan Losses and Credit Quality (Tables) |
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Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Composition of net loans |
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Past due loans by segment |
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Changes in the allowance for loan losses |
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Impaired loans by segment |
(1) For the three months ended June 30, 2015 (2) For the six months ended June 30, 2015 |
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Risk ratings |
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Loans modified as TDRs |
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TDRs payment default |
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7. Goodwill and Other Intangible Assets (Tables) |
6 Months Ended | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | ||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||
Schedule of Future Amortization Expense |
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8. Fair Value (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Fair Value Assets and Liabilities On Recurring Basis |
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Schedule of Fair Value Assets and Liabilities Non-recurring Basis |
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Schedule Of Estimated Fair Values Of Financial Instruments |
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9. Loan Servicing (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers and Servicing of Financial Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Mortgage Servicing Rights |
|
3. Earnings per Common Share (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Earnings Per Share [Abstract] | ||||
Net income, as reported | $ 1,295,199 | $ 1,077,704 | $ 2,464,693 | $ 2,187,544 |
Less: dividends to preferred shareholders | 21,875 | 20,312 | 43,750 | 40,625 |
Net income available to common shareholders | $ 1,273,324 | $ 1,057,392 | $ 2,420,943 | $ 2,146,919 |
Weighted average number of common shares used in calculating earnings per share | 5,016,097 | 4,954,879 | 5,008,121 | 4,946,734 |
Earnings per common share | $ 0.25 | $ 0.21 | $ 0.48 | $ 0.43 |
4. Investment Securities (Details 1) - USD ($) |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
|
Held-to-Maturity Securities | |||
Fair Value - Held-to-Maturity | $ 34,682,000 | $ 26,055,000 | $ 44,143,000 |
States and political subdivisions [Member] | |||
Held-to-Maturity Securities | |||
Amortized Cost - Held-to-Maturity | 34,013,002 | 25,738,769 | 43,354,419 |
Gross Unrealized Gains - Held-to-Maturity | 668,998 | 316,231 | 788,581 |
Gross Unrealized Losses - Held-to-Maturity | 0 | 0 | 0 |
Fair Value - Held-to-Maturity | $ 34,682,000 | $ 26,055,000 | $ 44,143,000 |
4. Investment Securities (Details 2) - USD ($) |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
---|---|---|---|
Available for sale Securities | |||
Amortized Cost | |||
Due in one year or less, Amortized Cost | $ 1,000,000 | $ 3,077,544 | $ 5,115,547 |
Due from one to five years, Amortized Cost | 12,480,750 | 12,482,515 | 14,474,576 |
Due from five to ten years | 1,245,000 | 245,000 | |
Agency MBS | 13,000,152 | 10,734,121 | 11,614,125 |
Amortization Cost of Debt | 27,725,902 | 26,539,180 | 31,204,248 |
Fair Value | |||
Due in one year or less, fair value | 1,003,413 | 3,086,317 | 5,133,829 |
Due from one to five years, fair value | 12,674,932 | 12,474,599 | 14,510,432 |
Due from five to ten years, fair value | 1,249,683 | 245,000 | |
Agency MBS* | 13,151,647 | 10,664,484 | 11,559,773 |
Fair value of debt | 28,079,675 | 26,470,400 | 31,204,034 |
Held to maturity Securities | |||
Amortized Cost | |||
Due in one year or less, Amortized Cost | 11,824,312 | 27,731,133 | 12,851,025 |
Due from one to five years, Amortized Cost | 4,152,445 | 4,015,553 | 4,101,928 |
Due from five to ten years, Amortized Cost | 3,466,701 | 3,149,531 | 2,166,612 |
Due after ten years, Amortized Cost | 14,569,544 | 8,458,202 | 6,619,204 |
Amortization Cost of Debt | 34,013,002 | 43,354,419 | 25,738,769 |
Fair Value | |||
Due in one year or less, fair value | 11,824,000 | 27,731,000 | 12,851,000 |
Due from one to five years, fair value | 4,320,000 | 4,213,000 | 4,181,000 |
Due from five to ten years, fair value | 3,634,000 | 3,347,000 | 2,246,000 |
Due after ten years, fair value | 14,904,000 | 8,852,000 | 6,777,000 |
Fair value of debt | $ 34,682,000 | $ 44,143,000 | $ 26,055,000 |
4. Investment Securities (Details Narrative) |
Jun. 30, 2016
USD ($)
integer
|
Dec. 31, 2015
integer
|
Jun. 30, 2015
integer
|
---|---|---|---|
Investment with a book value | $ | $ 27,725,902 | ||
Investment with a fair value | $ | $ 28,079,675 | ||
CD Member | |||
Number of securities | 6 | 5 | |
Agency mortgage-backed securities (Agency MBS) | |||
Number of securities | 3 | 12 | 11 |
U.S. GSE debt securities | |||
Number of securities | 6 | 5 |
5. Loans, Allowance for Loan Losses and Credit Quality (Details) - USD ($) |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
---|---|---|---|---|---|---|
Loans and Leases Receivable Disclosure [Abstract] | ||||||
Commercial & industrial | $ 72,878,438 | $ 65,191,124 | $ 73,561,125 | |||
Commercial real estate | 185,950,674 | 178,206,542 | 172,565,221 | |||
Residential real estate - 1st lien | 161,361,864 | 162,760,273 | 162,109,916 | |||
Residential real estate -Junior (Jr) lien | 44,078,168 | 44,720,266 | 43,816,552 | |||
Consumer | 7,298,211 | 7,241,224 | 7,429,236 | |||
Gross Loans | 471,567,355 | 458,119,429 | 459,482,050 | |||
Deduct (add): | ||||||
Allowance for loan losses | 5,077,420 | $ 5,109,488 | 5,011,878 | 5,095,212 | $ 5,003,049 | $ 4,905,874 |
Deferred net loan costs | (320,298) | (316,491) | (307,235) | |||
Total Adjustments | 4,757,122 | 4,695,387 | 4,787,977 | |||
Net loans | $ 466,810,233 | $ 453,424,042 | $ 454,694,073 |
5. Loans, Allowance for Loan Losses and Credit Quality (Details 1) - USD ($) |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
---|---|---|---|
30-89 Days | $ 2,584,074 | $ 4,594,475 | $ 3,525,333 |
90 Days or more | 1,457,906 | 2,200,265 | 1,333,505 |
Total Past Due | 4,041,980 | 6,794,740 | 4,858,838 |
Current | 467,525,375 | 451,324,689 | 454,623,212 |
Total Loans | 471,567,355 | 458,119,429 | 459,482,050 |
Non-Accrual Loans | 3,067,609 | 5,237,071 | 4,916,023 |
90 Days or More and Accruing | 1,220,569 | 923,184 | 624,532 |
Commercial and industrial | |||
30-89 Days | 62,073 | 224,997 | 177,758 |
90 Days or more | 120,111 | 168,244 | 174,184 |
Total Past Due | 182,184 | 393,241 | 351,942 |
Current | 72,696,254 | 64,797,883 | 73,209,183 |
Total Loans | 72,878,438 | 65,191,124 | 73,561,125 |
Non-Accrual Loans | 256,456 | 441,103 | 767,235 |
90 Days or More and Accruing | 120,111 | 13,556 | 0 |
Commercial Real Estate | |||
30-89 Days | 793,208 | 888,994 | 740,547 |
90 Days or more | 432,638 | 560,439 | 239,619 |
Total Past Due | 1,225,846 | 1,449,433 | 980,166 |
Current | 184,724,828 | 176,757,109 | 171,585,055 |
Total Loans | 185,950,674 | 178,206,542 | 172,565,221 |
Non-Accrual Loans | 966,071 | 2,400,757 | 1,909,917 |
90 Days or More and Accruing | 406,451 | 45,356 | 5,313 |
Residential real estate - 1st lien | |||
30-89 Days | 1,432,806 | 2,875,768 | 2,222,425 |
90 Days or more | 905,157 | 1,408,551 | 828,694 |
Total Past Due | 2,337,963 | 4,284,319 | 3,051,119 |
Current | 159,023,901 | 158,475,954 | 159,058,797 |
Total Loans | 161,361,864 | 162,760,273 | 162,109,916 |
Non-Accrual Loans | 1,467,171 | 2,009,079 | 1,927,300 |
90 Days or More and Accruing | 694,007 | 801,241 | 528,211 |
Residential real estate - Jr lien | |||
30-89 Days | 212,319 | 521,373 | 346,444 |
90 Days or more | 0 | 63,031 | 82,021 |
Total Past Due | 212,319 | 584,404 | 428,465 |
Current | 43,865,849 | 44,135,862 | 43,388,087 |
Total Loans | 44,078,168 | 44,720,266 | 43,816,552 |
Non-Accrual Loans | 377,911 | 386,132 | 311,571 |
90 Days or More and Accruing | 0 | 63,031 | 82,021 |
Consumer | |||
30-89 Days | 83,668 | 83,343 | 38,159 |
90 Days or more | 0 | 0 | 8,987 |
Total Past Due | 83,668 | 83,343 | 47,146 |
Current | 7,214,543 | 7,157,881 | 7,382,090 |
Total Loans | 7,298,211 | 7,241,224 | 7,429,236 |
Non-Accrual Loans | 0 | 0 | 0 |
90 Days or More and Accruing | $ 0 | $ 0 | $ 8,987 |
5. Loans, Allowance for Loan Losses and Credit Quality (Details 2) - USD ($) |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
|
Allowance for loan losses, Beginning balance | $ 5,109,488 | $ 5,003,049 | $ 5,011,878 | $ 4,905,874 | $ 4,905,874 |
Charge-offs | (199,535) | (101,516) | (227,358) | (177,938) | (502,366) |
Recoveries | 17,467 | 43,679 | 42,900 | 67,276 | 98,370 |
Provisions (credit) | 150,000 | 150,000 | 250,000 | 300,000 | 510,000 |
Allowance for loan losses, Ending balance | 5,077,420 | 5,095,212 | 5,077,420 | 5,095,212 | 5,011,878 |
Allowance for loan losses evaluated for impairment, Individually | 181,400 | 189,300 | 181,400 | 189,300 | 139,700 |
Allowance for loan losses evaluated for impairment, Collectively | 4,896,020 | 4,905,912 | 4,896,020 | 4,905,912 | 4,872,178 |
Allowance for loan losses | 5,077,420 | 5,095,212 | 5,077,420 | 5,095,212 | 5,011,878 |
Loans evaluated for impairment, Individually | 3,451,259 | 4,024,370 | 3,451,259 | 4,024,370 | 4,491,996 |
Loans evaluated for impairment, Collectively | 468,116,096 | 455,457,680 | 468,116,096 | 455,457,680 | 453,627,433 |
Total Loans | 471,567,355 | 459,482,050 | 471,567,355 | 459,482,050 | 458,119,429 |
Commercial and industrial | |||||
Allowance for loan losses, Beginning balance | 730,375 | 750,491 | 712,902 | 646,719 | 646,719 |
Charge-offs | 0 | 0 | (10,836) | (35,059) | (200,900) |
Recoveries | 1,180 | 37,306 | 20,475 | 42,913 | 59,264 |
Provisions (credit) | 93,687 | 93,297 | 102,701 | 226,521 | 207,819 |
Allowance for loan losses, Ending balance | 825,242 | 881,094 | 825,242 | 881,094 | 712,902 |
Allowance for loan losses evaluated for impairment, Individually | 0 | 70,000 | 0 | 70,000 | 0 |
Allowance for loan losses evaluated for impairment, Collectively | 825,242 | 811,094 | 825,242 | 811,094 | 712,902 |
Allowance for loan losses | 825,242 | 881,094 | 825,242 | 881,094 | 712,902 |
Loans evaluated for impairment, Individually | 191,919 | 594,176 | 191,919 | 594,176 | 286,436 |
Loans evaluated for impairment, Collectively | 72,686,519 | 72,966,949 | 72,686,519 | 72,966,949 | 64,904,688 |
Total Loans | 72,878,438 | 73,561,125 | 72,878,438 | 73,561,125 | 65,191,124 |
Commercial Real Estate | |||||
Allowance for loan losses, Beginning balance | 2,295,303 | 2,325,111 | 2,152,678 | 2,311,936 | 2,311,936 |
Charge-offs | 0 | 0 | 0 | 0 | (14,783) |
Recoveries | 0 | 0 | 0 | 0 | 0 |
Provisions (credit) | 21,663 | (340,552) | 164,288 | (327,377) | (144,475) |
Allowance for loan losses, Ending balance | 2,316,966 | 1,984,559 | 2,316,966 | 1,984,559 | 2,152,678 |
Allowance for loan losses evaluated for impairment, Individually | 0 | 0 | 0 | 0 | 0 |
Allowance for loan losses evaluated for impairment, Collectively | 2,316,966 | 1,984,559 | 2,316,966 | 1,984,559 | 2,152,678 |
Allowance for loan losses | 2,316,966 | 1,984,559 | 2,316,966 | 1,984,559 | 2,152,678 |
Loans evaluated for impairment, Individually | 895,626 | 1,845,751 | 895,626 | 1,845,751 | 2,551,748 |
Loans evaluated for impairment, Collectively | 185,055,048 | 170,719,470 | 185,055,048 | 170,719,470 | 175,654,794 |
Total Loans | 185,950,674 | 172,565,221 | 185,950,674 | 172,565,221 | 178,206,542 |
Residential Real Estate - 1st Lien | |||||
Allowance for loan losses, Beginning balance | 1,338,927 | 1,322,017 | 1,368,028 | 1,270,766 | 1,270,766 |
Charge-offs | (192,237) | (78,700) | (192,549) | (94,575) | (150,947) |
Recoveries | 5,374 | 0 | 5,686 | 6,042 | 6,042 |
Provisions (credit) | 142,208 | 115,187 | 113,107 | 176,271 | 242,167 |
Allowance for loan losses, Ending balance | 1,294,272 | 1,358,504 | 1,294,272 | 1,358,504 | 1,368,028 |
Allowance for loan losses evaluated for impairment, Individually | 59,900 | 71,800 | 59,900 | 71,800 | 25,100 |
Allowance for loan losses evaluated for impairment, Collectively | 1,234,372 | 1,286,704 | 1,234,372 | 1,286,704 | 1,342,928 |
Allowance for loan losses | 1,294,272 | 1,358,504 | 1,294,272 | 1,358,504 | 1,368,028 |
Loans evaluated for impairment, Individually | 1,990,686 | 1,345,820 | 1,990,686 | 1,345,820 | 1,419,808 |
Loans evaluated for impairment, Collectively | 159,371,178 | 160,764,096 | 159,371,178 | 160,764,096 | 161,340,465 |
Total Loans | 161,361,864 | 162,109,916 | 161,361,864 | 162,109,916 | 162,760,273 |
Residential Real Estate Jr Lien | |||||
Allowance for loan losses, Beginning balance | 423,025 | 321,407 | 422,822 | 321,099 | 321,099 |
Charge-offs | 0 | 0 | 0 | (20,199) | (66,104) |
Recoveries | 60 | 60 | 120 | 120 | 240 |
Provisions (credit) | (9,003) | 30,658 | (8,860) | 51,105 | 167,587 |
Allowance for loan losses, Ending balance | 414,082 | 352,125 | 414,082 | 352,125 | 422,822 |
Allowance for loan losses evaluated for impairment, Individually | 121,500 | 47,500 | 121,500 | 47,500 | 114,600 |
Allowance for loan losses evaluated for impairment, Collectively | 292,582 | 304,625 | 292,582 | 304,625 | 308,222 |
Allowance for loan losses | 414,082 | 352,125 | 414,082 | 352,125 | 422,822 |
Loans evaluated for impairment, Individually | 373,028 | 238,623 | 373,028 | 238,623 | 234,004 |
Loans evaluated for impairment, Collectively | 43,705,140 | 43,577,929 | 43,705,140 | 43,577,929 | 44,486,262 |
Total Loans | 44,078,168 | 43,816,552 | 44,078,168 | 43,816,552 | 44,720,266 |
Consumer | |||||
Allowance for loan losses, Beginning balance | 58,456 | 86,084 | 75,689 | 118,819 | 118,819 |
Charge-offs | (7,298) | (22,816) | (23,973) | (28,105) | (69,632) |
Recoveries | 10,853 | 6,313 | 16,619 | 18,201 | 32,824 |
Provisions (credit) | 18,549 | (5,768) | 12,225 | (45,102) | (6,322) |
Allowance for loan losses, Ending balance | 80,560 | 63,813 | 80,560 | 63,813 | 75,689 |
Allowance for loan losses evaluated for impairment, Individually | 0 | 0 | 0 | 0 | 0 |
Allowance for loan losses evaluated for impairment, Collectively | 80,560 | 63,813 | 80,560 | 63,813 | 75,689 |
Allowance for loan losses | 80,560 | 63,813 | 80,560 | 63,813 | 75,689 |
Loans evaluated for impairment, Individually | 0 | 0 | 0 | 0 | 0 |
Loans evaluated for impairment, Collectively | 7,298,211 | 7,429,236 | 7,298,211 | 7,429,236 | 7,241,224 |
Total Loans | 7,298,211 | 7,429,236 | 7,298,211 | 7,429,236 | 7,241,224 |
Unallocated | |||||
Allowance for loan losses, Beginning balance | 263,402 | 197,939 | 279,759 | 236,535 | 236,535 |
Charge-offs | 0 | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 | 0 |
Provisions (credit) | (117,104) | 257,178 | (133,461) | 218,582 | 43,224 |
Allowance for loan losses, Ending balance | 146,298 | 455,117 | 146,298 | 455,117 | 279,759 |
Allowance for loan losses evaluated for impairment, Individually | 0 | 0 | 0 | 0 | 0 |
Allowance for loan losses evaluated for impairment, Collectively | 146,298 | 455,117 | 146,298 | 455,117 | 279,759 |
Allowance for loan losses | $ 146,298 | $ 455,117 | $ 146,298 | $ 455,117 | $ 279,759 |
5. Loans, Allowance for Loan Losses and Credit Quality (Details 4) - USD ($) |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
---|---|---|---|
Group A | $ 452,520,677 | $ 438,208,275 | $ 441,184,376 |
Group B | 6,827,414 | 10,066,246 | 7,731,890 |
Group C | 12,219,264 | 9,844,908 | 10,565,784 |
Total Loans | 471,567,355 | 458,119,429 | 459,482,050 |
Commercial and industrial | |||
Group A | 70,175,375 | 59,764,081 | 70,152,385 |
Group B | 1,764,165 | 4,724,729 | 2,451,677 |
Group C | 938,898 | 702,314 | 957,063 |
Total Loans | 72,878,438 | 65,191,124 | 73,561,125 |
Commercial Real Estate | |||
Group A | 173,220,709 | 168,326,527 | 162,191,020 |
Group B | 4,318,817 | 4,529,493 | 4,819,930 |
Group C | 8,411,148 | 5,350,522 | 5,554,271 |
Total Loans | 185,950,674 | 178,206,542 | 172,565,221 |
Residential real estate - 1st lien | |||
Group A | 158,425,776 | 158,834,849 | 158,224,270 |
Group B | 587,586 | 599,516 | 231,391 |
Group C | 2,348,502 | 3,325,908 | 3,654,255 |
Total Loans | 161,361,864 | 162,760,273 | 162,109,916 |
Residential real estate - Jr lien | |||
Group A | 43,400,606 | 44,041,594 | 43,196,452 |
Group B | 156,846 | 212,508 | 228,892 |
Group C | 520,716 | 466,164 | 391,208 |
Total Loans | 44,078,168 | 44,720,266 | 43,816,552 |
Consumer | |||
Group A | 7,298,211 | 7,241,224 | 7,420,249 |
Group B | 0 | 0 | 0 |
Group C | 0 | 0 | 8,987 |
Total Loans | $ 7,298,211 | $ 7,241,224 | $ 7,429,236 |
5. Loans, Allowance for Loan Losses and Credit Quality (Details 6) |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2016
USD ($)
integer
|
Jun. 30, 2015
USD ($)
integer
|
Dec. 31, 2015
USD ($)
integer
|
|
Number of Contracts | integer | 4 | 4 | 6 |
Recorded Investment | $ | $ 504,367 | $ 340,904 | $ 506,145 |
Commercial | |||
Number of Contracts | integer | 1 | 1 | |
Recorded Investment | $ | $ 71,808 | $ 82,336 | |
Commercial Real Estate | |||
Number of Contracts | integer | 2 | 1 | |
Recorded Investment | $ | $ 373,767 | $ 149,514 | |
Residential Real Estate - 1st Lien | |||
Number of Contracts | integer | 1 | 3 | 4 |
Recorded Investment | $ | $ 58,792 | $ 258,568 | $ 286,803 |
Residential Real Estate Jr Lien | |||
Number of Contracts | integer | 1 | ||
Recorded Investment | $ | $ 69,828 |
5. Loans, Allowance for Loan Losses and Credit Quality (Details Narrative) - USD ($) |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
---|---|---|---|
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |||
Allowance related to TDRs | $ 68,500 | $ 25,100 | $ 104,600 |
Residential mortgage loans in process of foreclosure | $ 84,458 | $ 400,905 | $ 403,526 |
7. Goodwill and Other Intangible Assets (Details) |
Jun. 30, 2016
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2016 | $ 136,345 |
2017 | 272,691 |
Total remaining core deposit intangible | $ 409,036 |
7. Goodwill and Other Intangible Assets (Details Narrative) - USD ($) |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Accumulated amortization expense | $ 3,751,964 | $ 3,479,269 |
Amortization expense for the core deposit intangible | $ 136,350 | $ 136,350 |
8. Fair Value (Details) - USD ($) |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
---|---|---|---|
Fair Value Level 2 | |||
Assets: (market approach) | |||
U.S. GSE debt securities | $ 11,890,890 | $ 12,832,443 | $ 14,908,104 |
U.S. Government securities | 0 | ||
Agency MBS | 13,151,647 | 10,664,484 | 11,559,773 |
Other investments | 3,037,138 | 2,973,473 | 1,733,188 |
Total | $ 28,079,675 | $ 26,470,400 | 28,201,065 |
Fair Value Level 1 | |||
Assets: (market approach) | |||
U.S. GSE debt securities | 0 | ||
U.S. Government securities | 3,002,969 | ||
Agency MBS | 0 | ||
Other investments | 0 | ||
Total | $ 3,002,969 |
8. Fair Value (Details 1) - Fair Value Level 2 - USD ($) |
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 30, 2015 |
---|---|---|---|
Assets: (market approach) | |||
Residential mortgage servicing rights | $ 1,264,148 | $ 1,293,079 | $ 1,298,418 |
Impaired loans, net of related allowance | 983,790 | 268,092 | 391,252 |
OREO | $ 409,000 | $ 262,000 | $ 1,122,500 |
9. Loan Servicing (Details) - USD ($) |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2015 |
|
Transfers and Servicing of Financial Assets [Abstract] | |||
Balance at beginning of year | $ 1,293,079 | $ 1,311,965 | $ 1,311,965 |
Mortgage servicing rights capitalized | 98,054 | 112,687 | 230,818 |
Mortgage servicing rights amortized | (134,499) | (128,791) | (257,921) |
Change in valuation allowance | 7,514 | 2,557 | 8,217 |
Balance at end of period | $ 1,264,148 | $ 1,298,418 | $ 1,293,079 |
11. Subsequent Event (Details) |
Jun. 30, 2016
USD ($)
|
---|---|
Subsequent Event [Member] | |
Dividend accrued | $ 801,734 |
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