PAGE
|
||
Part I
|
FINANCIAL INFORMATION
|
|
Item 1.
|
Financial Statements (unaudited):
|
|
Consolidated Balance Sheet as of June 30,2016 and December 31, 2015
|
1
|
|
Consolidated Statement of Income for the Three and Six Months Ended June 30, 2016 and 2015
|
2
|
|
Consolidated Statement of Comprehensive Income for the Three and Six Months ended June 30, 2016 and 2015
|
3
|
|
Consolidated Statement of Cash Flows for the Six Months ended June 30, 2016 and 2015
|
4
|
|
Notes to Consolidated Financial Statements
|
5-34
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
35-57
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
57
|
Item 4.
|
Controls and Procedures
|
57
|
Part II
|
OTHER INFORMATION
|
|
Item 1.
|
Legal Proceedings
|
57
|
Item 1A.
|
Risk Factors
|
58
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
58
|
Item 3.
|
Defaults Upon Senior Securities
|
58
|
Item 4.
|
Mine Safety Disclosures
|
58
|
Item 5.
|
Other Information
|
58
|
Item 6.
|
Exhibits
|
58-59
|
Signatures
|
60
|
CITIZENS FINANCIAL SERVICES, INC.
|
||||||||
CONSOLIDATED BALANCE SHEET
|
||||||||
(UNAUDITED)
|
||||||||
|
||||||||
|
June 30
|
December 31
|
||||||
(in thousands except share data)
|
2016
|
2015
|
||||||
ASSETS:
|
||||||||
Cash and due from banks:
|
||||||||
Noninterest-bearing
|
$
|
14,908
|
$
|
14,088
|
||||
Interest-bearing
|
11,914
|
10,296
|
||||||
Total cash and cash equivalents
|
26,822
|
24,384
|
||||||
Interest bearing time deposits with other banks
|
6,954
|
7,696
|
||||||
Available-for-sale securities
|
360,944
|
359,737
|
||||||
Loans held for sale
|
1,304
|
603
|
||||||
Loans (net of allowance for loan losses:
|
||||||||
2016, $7,359 and 2015, $7,106)
|
701,756
|
687,925
|
||||||
Premises and equipment
|
17,239
|
17,263
|
||||||
Accrued interest receivable
|
4,176
|
4,211
|
||||||
Goodwill
|
21,089
|
21,089
|
||||||
Bank owned life insurance
|
25,877
|
25,535
|
||||||
Other intangibles
|
2,183
|
2,437
|
||||||
Other assets
|
11,174
|
12,104
|
||||||
|
||||||||
TOTAL ASSETS
|
$
|
1,179,518
|
$
|
1,162,984
|
||||
|
||||||||
LIABILITIES:
|
||||||||
Deposits:
|
||||||||
Noninterest-bearing
|
$
|
142,327
|
$
|
150,960
|
||||
Interest-bearing
|
861,155
|
837,071
|
||||||
Total deposits
|
1,003,482
|
988,031
|
||||||
Borrowed funds
|
38,786
|
41,631
|
||||||
Accrued interest payable
|
644
|
734
|
||||||
Other liabilities
|
12,150
|
12,828
|
||||||
TOTAL LIABILITIES
|
1,055,062
|
1,043,224
|
||||||
STOCKHOLDERS' EQUITY:
|
||||||||
Preferred Stock
|
||||||||
$1.00 par value; authorized 3,000,000 shares June 30, 2016 and December 31, 2015;
|
||||||||
none issued in 2016 or 2015
|
-
|
-
|
||||||
Common stock
|
||||||||
$1.00 par value; authorized 15,000,000 shares; issued 3,704,375 at June 30, 2016 and
|
||||||||
3,671,751 at December 31, 2015
|
3,704
|
3,672
|
||||||
Additional paid-in capital
|
42,241
|
40,715
|
||||||
Retained earnings
|
87,753
|
85,790
|
||||||
Accumulated other comprehensive income (loss)
|
2,042
|
(236
|
)
|
|||||
Treasury stock, at cost: 358,921 shares at June 30, 2016
|
||||||||
and 335,876 shares at December 31, 2015
|
(11,284
|
)
|
(10,181
|
)
|
||||
TOTAL STOCKHOLDERS' EQUITY
|
124,456
|
119,760
|
||||||
TOTAL LIABILITIES AND
|
||||||||
STOCKHOLDERS' EQUITY
|
$
|
1,179,518
|
$
|
1,162,984
|
||||
|
||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
|
CITIZENS FINANCIAL SERVICES, INC.
|
||||||||||||||||
CONSOLIDATED STATEMENT OF INCOME
|
||||||||||||||||
(UNAUDITED)
|
||||||||||||||||
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
(in thousands, except share and per share data)
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
INTEREST INCOME:
|
||||||||||||||||
Interest and fees on loans
|
$
|
8,587
|
$
|
7,129
|
$
|
17,183
|
$
|
14,168
|
||||||||
Interest-bearing deposits with banks
|
64
|
39
|
135
|
70
|
||||||||||||
Investment securities:
|
||||||||||||||||
` Taxable
|
959
|
765
|
1,903
|
1,519
|
||||||||||||
Nontaxable
|
755
|
801
|
1,526
|
1,649
|
||||||||||||
Dividends
|
61
|
34
|
141
|
133
|
||||||||||||
TOTAL INTEREST INCOME
|
10,426
|
8,768
|
20,888
|
17,539
|
||||||||||||
INTEREST EXPENSE:
|
||||||||||||||||
Deposits
|
1,072
|
1,035
|
2,146
|
2,044
|
||||||||||||
Borrowed funds
|
183
|
172
|
366
|
347
|
||||||||||||
TOTAL INTEREST EXPENSE
|
1,255
|
1,207
|
2,512
|
2,391
|
||||||||||||
NET INTEREST INCOME
|
9,171
|
7,561
|
18,376
|
15,148
|
||||||||||||
Provision for loan losses
|
135
|
120
|
270
|
240
|
||||||||||||
NET INTEREST INCOME AFTER
|
||||||||||||||||
PROVISION FOR LOAN LOSSES
|
9,036
|
7,441
|
18,106
|
14,908
|
||||||||||||
NON-INTEREST INCOME:
|
||||||||||||||||
Service charges
|
1,128
|
1,028
|
2,230
|
2,004
|
||||||||||||
Trust
|
182
|
180
|
378
|
374
|
||||||||||||
Brokerage and insurance
|
158
|
255
|
367
|
382
|
||||||||||||
Gains on loans sold
|
70
|
60
|
116
|
98
|
||||||||||||
Investment securities gains, net
|
128
|
175
|
155
|
301
|
||||||||||||
Earnings on bank owned life insurance
|
172
|
154
|
342
|
306
|
||||||||||||
Other
|
145
|
103
|
311
|
218
|
||||||||||||
TOTAL NON-INTEREST INCOME
|
1,983
|
1,955
|
3,899
|
3,683
|
||||||||||||
NON-INTEREST EXPENSES:
|
||||||||||||||||
Salaries and employee benefits
|
3,900
|
2,993
|
7,782
|
6,049
|
||||||||||||
Occupancy
|
455
|
348
|
900
|
717
|
||||||||||||
Furniture and equipment
|
171
|
87
|
328
|
215
|
||||||||||||
Professional fees
|
266
|
180
|
553
|
412
|
||||||||||||
FDIC insurance
|
160
|
116
|
317
|
232
|
||||||||||||
Pennsylvania shares tax
|
240
|
200
|
390
|
401
|
||||||||||||
Amortization of other intangibles
|
82
|
-
|
164
|
-
|
||||||||||||
ORE expenses
|
212
|
357
|
305
|
358
|
||||||||||||
Other
|
1,815
|
1,147
|
3,474
|
2,379
|
||||||||||||
TOTAL NON-INTEREST EXPENSES
|
7,301
|
5,428
|
14,213
|
10,763
|
||||||||||||
Income before provision for income taxes
|
3,718
|
3,968
|
7,792
|
7,828
|
||||||||||||
Provision for income taxes
|
687
|
779
|
1,478
|
1,519
|
||||||||||||
NET INCOME
|
$
|
3,031
|
$
|
3,189
|
$
|
6,314
|
$
|
6,309
|
||||||||
PER COMMON SHARE DATA:
|
||||||||||||||||
Net Income - Basic
|
$
|
0.91
|
$
|
1.04
|
$
|
1.88
|
$
|
2.06
|
||||||||
Net Income - Diluted
|
$
|
0.91
|
$
|
1.04
|
$
|
1.88
|
$
|
2.06
|
||||||||
Cash Dividends Paid
|
$
|
0.419
|
$
|
0.402
|
$
|
0.829
|
$
|
0.802
|
||||||||
|
||||||||||||||||
Number of shares used in computation - basic
|
3,343,254
|
3,052,285
|
3,349,913
|
3,055,569
|
||||||||||||
Number of shares used in computation - diluted
|
3,343,663
|
3,053,349
|
3,350,118
|
3,056,103
|
||||||||||||
|
||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
|
CITIZENS FINANCIAL SERVICES, INC.
|
||||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENT OF
|
||||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME
|
`
|
|||||||||||||||||||||||||||||||
(UNAUDITED)
|
||||||||||||||||||||||||||||||||
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||||||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||||||||||||||||||
(in thousands)
|
2016
|
2015
|
2016
|
2015
|
||||||||||||||||||||||||||||
Net income
|
$
|
3,031
|
$
|
3,189
|
$
|
6,314
|
$
|
6,309
|
||||||||||||||||||||||||
Other comprehensive income (loss):
|
||||||||||||||||||||||||||||||||
Unrealized gains on available for sale securities
|
1,794
|
(2,049
|
)
|
3,489
|
(704
|
)
|
||||||||||||||||||||||||||
Income tax effect
|
(610
|
)
|
698
|
(1,188
|
)
|
240
|
||||||||||||||||||||||||||
Change in unrecognized pension cost
|
60
|
54
|
121
|
102
|
||||||||||||||||||||||||||||
Income tax effect
|
(21
|
)
|
(19
|
)
|
(42
|
)
|
(35
|
)
|
||||||||||||||||||||||||
Less: Reclassification adjustment for investment
|
||||||||||||||||||||||||||||||||
security gains included in net income
|
(128
|
)
|
(175
|
)
|
(155
|
)
|
(301
|
)
|
||||||||||||||||||||||||
Income tax effect
|
44
|
59
|
53
|
102
|
||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax
|
1,139
|
(1,432
|
)
|
2,278
|
(596
|
)
|
||||||||||||||||||||||||||
Comprehensive income
|
$
|
4,170
|
$
|
1,757
|
$
|
8,592
|
$
|
5,713
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
|
CITIZENS FINANCIAL SERVICES, INC.
|
||||||||
CONSOLIDATED STATEMENT OF CASH FLOWS
|
||||||||
(UNAUDITED)
|
Six Months Ended
|
|||||||
|
June 30,
|
|||||||
(in thousands)
|
2016
|
2015
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income
|
$
|
6,314
|
$
|
6,309
|
||||
Adjustments to reconcile net income to net
|
||||||||
cash provided by operating activities:
|
||||||||
Provision for loan losses
|
270
|
240
|
||||||
Provision for off-balance sheet items
|
30
|
-
|
||||||
Depreciation and amortization
|
175
|
236
|
||||||
Amortization and accretion of investment securities
|
1,148
|
992
|
||||||
Deferred income taxes
|
81
|
112
|
||||||
Investment securities gains, net
|
(155
|
)
|
(301
|
)
|
||||
Earnings on bank owned life insurance
|
(342
|
)
|
(306
|
)
|
||||
Originations of loans held for sale
|
(8,580
|
)
|
(7,479
|
)
|
||||
Proceeds from sales of loans held for sale
|
7,995
|
6,922
|
||||||
Realized gains on loans sold
|
(116
|
)
|
(98
|
)
|
||||
Increase in accrued interest receivable
|
35
|
60
|
||||||
Decrease in accrued interest payable
|
(90
|
)
|
(81
|
)
|
||||
Other, net
|
(519
|
)
|
(1,158
|
)
|
||||
Net cash provided by operating activities
|
6,246
|
5,448
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Available-for-sale securities:
|
||||||||
Proceeds from sales
|
12,077
|
18,393
|
||||||
Proceeds from maturity and principal repayments
|
21,561
|
31,163
|
||||||
Purchase of securities
|
(32,507
|
)
|
(49,579
|
)
|
||||
Proceeds from matured interest bearing time deposits with other banks
|
744
|
-
|
||||||
Proceeds from redemption of regulatory stock
|
184
|
1,513
|
||||||
Purchase of regulatory stock
|
(132
|
)
|
(1,342
|
)
|
||||
Net increase in loans
|
(14,135
|
)
|
(17,792
|
)
|
||||
Purchase of premises and equipment
|
(398
|
)
|
(514
|
)
|
||||
Proceeds from sale of foreclosed assets held for sale
|
374
|
100
|
||||||
Net cash used in investing activities
|
(12,232
|
)
|
(18,058
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Net increase in deposits
|
15,451
|
17,954
|
||||||
Proceeds from long-term borrowings
|
539
|
5,286
|
||||||
Repayments of long-term borrowings
|
(534
|
)
|
(551
|
)
|
||||
Net increase in short-term borrowed funds
|
(2,850
|
)
|
(7,340
|
)
|
||||
Purchase of treasury and restricted stock
|
(1,482
|
)
|
(997
|
)
|
||||
Dividends paid
|
(2,700
|
)
|
(2,253
|
)
|
||||
Net cash provided by financing activities
|
8,424
|
12,099
|
||||||
Net (decrease) increase in cash and cash equivalents
|
2,438
|
(511
|
)
|
|||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
24,384
|
11,423
|
||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
26,822
|
$
|
10,912
|
||||
|
||||||||
Supplemental Disclosures of Cash Flow Information:
|
||||||||
Interest paid
|
$
|
2,602
|
$
|
2,472
|
||||
Income taxes paid
|
$
|
1,400
|
$
|
2,025
|
||||
Loans transferred to foreclosed property
|
$
|
519
|
$
|
241
|
||||
Investments purchased and not settled
|
$
|
-
|
$
|
319
|
||||
|
||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
|
Three months ended
|
Six months ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Net income applicable to common stock
|
$
|
3,031,000
|
$
|
3,189,000
|
$
|
6,314,000
|
$
|
6,309,000
|
||||||||
|
||||||||||||||||
Basic earnings per share computation
|
||||||||||||||||
Weighted average common shares outstanding
|
3,343,254
|
3,052,285
|
3,349,913
|
3,055,569
|
||||||||||||
Earnings per share - basic
|
$
|
0.91
|
$
|
1.04
|
$
|
1.88
|
$
|
2.06
|
||||||||
|
||||||||||||||||
Diluted earnings per share computation
|
||||||||||||||||
Weighted average common shares outstanding for basic earnings per share
|
3,343,254
|
3,052,285
|
3,349,913
|
3,055,569
|
||||||||||||
Add: Dilutive effects of restricted stock
|
409
|
1,064
|
205
|
534
|
||||||||||||
Weighted average common shares outstanding for dilutive earnings per share
|
3,343,663
|
3,053,349
|
3,350,118
|
3,056,103
|
||||||||||||
Earnings per share - diluted
|
$
|
0.91
|
$
|
1.04
|
$
|
1.88
|
$
|
2.06
|
Gross
|
Gross
|
|||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
June 30, 2016
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Available-for-sale securities:
|
||||||||||||||||
U.S. agency securities
|
$
|
203,461
|
$
|
2,359
|
$
|
(1
|
)
|
$
|
205,819
|
|||||||
U.S. treasury securities
|
5,046
|
7
|
-
|
5,053
|
||||||||||||
Obligations of state and
|
||||||||||||||||
political subdivisions
|
101,144
|
3,338
|
(10
|
)
|
104,472
|
|||||||||||
Corporate obligations
|
11,430
|
50
|
-
|
11,480
|
||||||||||||
Mortgage-backed securities in
|
||||||||||||||||
government sponsored entities
|
31,190
|
456
|
(40
|
)
|
31,606
|
|||||||||||
Equity securities in financial
|
||||||||||||||||
Institutions
|
2,001
|
518
|
(5
|
)
|
2,514
|
|||||||||||
Total available-for-sale securities
|
$
|
354,272
|
$
|
6,728
|
$
|
(56
|
)
|
$
|
360,944
|
|||||||
December 31, 2015
|
||||||||||||||||
Available-for-sale securities:
|
||||||||||||||||
U.S. agency securities
|
$
|
199,749
|
$
|
369
|
$
|
(527
|
)
|
$
|
199,591
|
|||||||
U.S. treasury securities
|
10,103
|
-
|
(21
|
)
|
10,082
|
|||||||||||
Obligations of state and
|
||||||||||||||||
political subdivisions
|
99,856
|
3,080
|
(73
|
)
|
102,863
|
|||||||||||
Corporate obligations
|
14,583
|
68
|
(86
|
)
|
14,565
|
|||||||||||
Mortgage-backed securities in
|
||||||||||||||||
government sponsored entities
|
30,107
|
186
|
(89
|
)
|
30,204
|
|||||||||||
Equity securities in financial institutions
|
2,001
|
436
|
(5
|
)
|
2,432
|
|||||||||||
Total available-for-sale securities
|
$
|
356,399
|
$
|
4,139
|
$
|
(801
|
)
|
$
|
359,737
|
June 30, 2016
|
Less than Twelve Months
|
Twelve Months or Greater
|
Total
|
|||||||||||||||||||||
Gross
|
Gross
|
Gross
|
||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
|
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
||||||||||||||||||
U.S. agency securities
|
$
|
8,509
|
$
|
(1
|
)
|
$
|
-
|
$
|
-
|
$
|
8,509
|
$
|
(1
|
)
|
||||||||||
Obligations of state and
|
||||||||||||||||||||||||
political subdivisions
|
4,342
|
(9
|
)
|
503
|
(1
|
)
|
4,845
|
(10
|
)
|
|||||||||||||||
Mortgage-backed securities in
|
||||||||||||||||||||||||
government sponsored entities
|
3,716
|
(22
|
)
|
1,987
|
(18
|
)
|
5,703
|
(40
|
)
|
|||||||||||||||
Equity securities in financial institutions
|
111
|
(5
|
)
|
-
|
-
|
111
|
(5
|
)
|
||||||||||||||||
Total securities
|
$
|
16,678
|
$
|
(37
|
)
|
$
|
2,490
|
$
|
(19
|
)
|
$
|
19,168
|
$
|
(56
|
)
|
|||||||||
December 31, 2015
|
||||||||||||||||||||||||
U.S. agency securities
|
$
|
123,591
|
$
|
(527
|
)
|
$
|
-
|
$
|
-
|
$
|
123,591
|
$
|
(527
|
)
|
||||||||||
U.S. treasury securities
|
10,082
|
(21
|
)
|
-
|
-
|
10,082
|
(21
|
)
|
||||||||||||||||
Obligations of states and
|
||||||||||||||||||||||||
political subdivisions
|
7,023
|
(57
|
)
|
2,914
|
(16
|
)
|
9,937
|
(73
|
)
|
|||||||||||||||
Corporate obligations
|
5,822
|
(61
|
)
|
2,138
|
(25
|
)
|
7,960
|
(86
|
)
|
|||||||||||||||
Mortgage-backed securities in
|
||||||||||||||||||||||||
government sponsored entities
|
9,830
|
(77
|
)
|
227
|
(12
|
)
|
10,057
|
(89
|
)
|
|||||||||||||||
Equity securities in financial institutions
|
106
|
(5
|
)
|
-
|
-
|
106
|
(5
|
)
|
||||||||||||||||
Total securities
|
$
|
156,454
|
$
|
(748
|
)
|
$
|
5,279
|
$
|
(53
|
)
|
$
|
161,733
|
$
|
(801
|
)
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
Gross gains
|
$
|
128
|
$
|
175
|
$
|
155
|
$
|
312
|
||||||||
Gross losses
|
-
|
-
|
-
|
(11
|
)
|
|||||||||||
Net gains
|
$
|
128
|
$
|
175
|
$
|
155
|
$
|
301
|
Amortized
|
||||||||
|
Cost
|
Fair Value
|
||||||
Available-for-sale debt securities:
|
||||||||
Due in one year or less
|
$
|
41,555
|
$
|
41,758
|
||||
Due after one year through five years
|
190,450
|
193,673
|
||||||
Due after five years through ten years
|
41,023
|
42,092
|
||||||
Due after ten years
|
79,243
|
80,907
|
||||||
Total
|
$
|
352,271
|
$
|
358,430
|
June 30, 2016
|
Total Loans
|
Individually
evaluated for impairment
|
Loans acquired
with deteriorated
credit quality
|
Collectively
evaluated for impairment
|
||||||||||||
Real estate loans:
|
||||||||||||||||
Residential
|
$
|
203,980
|
$
|
518
|
$
|
34
|
$
|
203,428
|
||||||||
Commercial and agricultural
|
309,287
|
6,404
|
2,753
|
300,130
|
||||||||||||
Construction
|
10,481
|
-
|
-
|
10,481
|
||||||||||||
Consumer
|
11,439
|
-
|
6
|
11,433
|
||||||||||||
Other commercial and agricultural loans
|
74,089
|
5,682
|
876
|
67,531
|
||||||||||||
State and political subdivision loans
|
99,839
|
-
|
-
|
99,839
|
||||||||||||
Total
|
709,115
|
12,604
|
3,669
|
692,842
|
||||||||||||
Allowance for loan losses
|
7,359
|
587
|
-
|
6,772
|
||||||||||||
Net loans
|
$
|
701,756
|
$
|
12,017
|
$
|
3,669
|
$
|
686,070
|
December 31, 2015
|
Total Loans
|
Individually
evaluated for
impairment
|
Loans acquired
with deteriorated
credit quality
|
Collectively
evaluated for
impairment
|
||||||||||||
Real estate loans:
|
||||||||||||||||
Residential
|
$
|
203,407
|
$
|
304
|
$
|
35
|
$
|
203,068
|
||||||||
Commercial and agricultural
|
295,364
|
6,235
|
2,908
|
286,221
|
||||||||||||
Construction
|
15,011
|
-
|
-
|
15,011
|
||||||||||||
Consumer
|
11,543
|
-
|
9
|
11,534
|
||||||||||||
Other commercial and agricultural loans
|
71,206
|
5,745
|
866
|
64,595
|
||||||||||||
State and political subdivision loans
|
98,500
|
-
|
-
|
98,500
|
||||||||||||
Total
|
695,031
|
12,284
|
3,818
|
678,929
|
||||||||||||
Allowance for loan losses
|
7,106
|
355
|
-
|
6,751
|
||||||||||||
Net loans
|
$
|
687,925
|
$
|
11,929
|
$
|
3,818
|
$
|
672,178
|
|
Three Months Ended
|
Six Months
Ended
|
||||||
Balance at beginning of period
|
$
|
551
|
$
|
637
|
||||
Accretion
|
(87
|
)
|
(173
|
)
|
||||
Balance at end of period
|
$
|
464
|
$
|
464
|
June 30, 2016
|
December 31, 2015
|
|||||||
Outstanding balance
|
$
|
6,616
|
$
|
6,950
|
||||
Carrying amount
|
3,669
|
3,818
|
|
Recorded
|
Recorded
|
||||||||||||||||||
|
Unpaid
|
Investment
|
Investment
|
Total
|
||||||||||||||||
|
Principal
|
With No
|
With
|
Recorded
|
Related
|
|||||||||||||||
June 30, 2016
|
Balance
|
Allowance
|
Allowance
|
Investment
|
Allowance
|
|||||||||||||||
Real estate loans:
|
||||||||||||||||||||
Mortgages
|
$
|
502
|
$
|
114
|
$
|
345
|
$
|
459
|
$
|
35
|
||||||||||
Home Equity
|
59
|
-
|
59
|
59
|
11
|
|||||||||||||||
Commercial
|
8,888
|
5,944
|
295
|
6,239
|
126
|
|||||||||||||||
Agricultural
|
165
|
165
|
-
|
165
|
-
|
|||||||||||||||
Construction
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Consumer
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Other commercial loans
|
5,717
|
4,547
|
1,031
|
5,578
|
415
|
|||||||||||||||
Other agricultural loans
|
104
|
104
|
-
|
104
|
-
|
|||||||||||||||
State and political subdivision loans
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Total
|
$
|
15,435
|
$
|
10,874
|
$
|
1,730
|
$
|
12,604
|
$
|
587
|
||||||||||
|
||||||||||||||||||||
December 31, 2015
|
||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||
Mortgages
|
$
|
281
|
$
|
114
|
$
|
129
|
$
|
243
|
$
|
26
|
||||||||||
Home Equity
|
61
|
-
|
61
|
61
|
11
|
|||||||||||||||
Commercial
|
8,654
|
5,843
|
225
|
6,068
|
62
|
|||||||||||||||
Agricultural
|
167
|
167
|
-
|
167
|
-
|
|||||||||||||||
Construction
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Consumer
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Other commercial loans
|
5,535
|
4,653
|
987
|
5,640
|
256
|
|||||||||||||||
Other agricultural loans
|
105
|
105
|
-
|
105
|
-
|
|||||||||||||||
State and political subdivision loans
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Total
|
$
|
14,803
|
$
|
10,882
|
$
|
1,402
|
$
|
12,284
|
$
|
355
|
|
For the Six Months ended
|
|||||||||||||||||||||||
|
June 30, 2016
|
June 30, 2015
|
||||||||||||||||||||||
|
Interest
|
Interest
|
||||||||||||||||||||||
|
Average
|
Interest
|
Income
|
Average
|
Interest
|
Income
|
||||||||||||||||||
|
Recorded
|
Income
|
Recognized
|
Recorded
|
Income
|
Recognized
|
||||||||||||||||||
|
Investment
|
Recognized
|
Cash Basis
|
Investment
|
Recognized
|
Cash Basis
|
||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||
Mortgages
|
$
|
425
|
$
|
9
|
$
|
-
|
$
|
224
|
$
|
4
|
$
|
5
|
||||||||||||
Home Equity
|
60
|
2
|
-
|
114
|
2
|
-
|
||||||||||||||||||
Commercial
|
6,142
|
52
|
-
|
5,862
|
32
|
-
|
||||||||||||||||||
Agricultural
|
165
|
5
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Construction
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Consumer
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Other commercial loans
|
5,942
|
134
|
3
|
2,678
|
49
|
3
|
||||||||||||||||||
Other agricultural loans
|
104
|
3
|
-
|
-
|
-
|
-
|
||||||||||||||||||
State and political
|
||||||||||||||||||||||||
subdivision loans
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Total
|
$
|
12,838
|
$
|
205
|
$
|
3
|
$
|
8,878
|
$
|
87
|
$
|
8
|
||||||||||||
|
||||||||||||||||||||||||
|
For the Three Months Ended
|
|||||||||||||||||||||||
|
June 30, 2016
|
June 30, 2015
|
||||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||
Mortgages
|
$
|
460
|
$
|
5
|
$
|
-
|
$
|
259
|
$
|
2
|
$
|
5
|
||||||||||||
Home Equity
|
59
|
1
|
-
|
103
|
1
|
-
|
||||||||||||||||||
Commercial
|
6,158
|
26
|
-
|
5,700
|
19
|
-
|
||||||||||||||||||
Agricultural
|
165
|
3
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Construction
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Consumer
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Other commercial loans
|
5,933
|
68
|
2
|
2,629
|
24
|
2
|
||||||||||||||||||
Other agricultural loans
|
104
|
2
|
-
|
-
|
-
|
-
|
||||||||||||||||||
State and political
|
||||||||||||||||||||||||
subdivision loans
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Total
|
$
|
12,879
|
$
|
105
|
$
|
2
|
$
|
8,691
|
$
|
46
|
$
|
7
|
·
|
Pass (Grades 1-5) – These loans are to customers with credit quality ranging from an acceptable to very high quality and are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral.
|
·
|
Special Mention (Grade 6) – This loan grade is in accordance with regulatory guidance and includes loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected.
|
·
|
Substandard (Grade 7) – This loan grade is in accordance with regulatory guidance and includes loans that have a well-defined weakness based on objective evidence and be characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.
|
·
|
Doubtful (Grade 8) – This loan grade is in accordance with regulatory guidance and includes loans that have all the weaknesses inherent in a substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.
|
·
|
Loss (Grade 9) – This loan grade is in accordance with regulatory guidance and includes loans that are considered uncollectible, or of such value that continuance as an asset is not warranted.
|
June 30, 2016
|
Pass
|
Special Mention
|
Substandard
|
Doubtful
|
Loss
|
Ending Balance
|
||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||
Commercial
|
$
|
228,452
|
$
|
3,619
|
$
|
14,796
|
$
|
28
|
$
|
-
|
$
|
246,895
|
||||||||||||
Agricultural
|
53,701
|
5,951
|
2,740
|
-
|
-
|
62,392
|
||||||||||||||||||
Construction
|
10,481
|
-
|
-
|
-
|
-
|
10,481
|
||||||||||||||||||
Other commercial loans
|
48,344
|
2,148
|
5,061
|
133
|
-
|
55,686
|
||||||||||||||||||
Other agricultural loans
|
14,454
|
2,320
|
1,629
|
-
|
-
|
18,403
|
||||||||||||||||||
State and political
|
||||||||||||||||||||||||
subdivision loans
|
91,639
|
8,200
|
-
|
-
|
-
|
99,839
|
||||||||||||||||||
Total
|
$
|
447,071
|
$
|
22,238
|
$
|
24,226
|
$
|
161
|
$
|
-
|
$
|
493,696
|
||||||||||||
|
||||||||||||||||||||||||
December 31, 2015
|
||||||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||
Commercial
|
$
|
217,544
|
$
|
4,150
|
$
|
15,816
|
$
|
32
|
$
|
-
|
$
|
237,542
|
||||||||||||
Agricultural
|
53,695
|
2,865
|
1,262
|
-
|
-
|
57,822
|
||||||||||||||||||
Construction
|
14,422
|
589
|
-
|
-
|
-
|
15,011
|
||||||||||||||||||
Other commercial loans
|
51,297
|
446
|
5,669
|
137
|
-
|
57,549
|
||||||||||||||||||
Other agricultural loans
|
13,318
|
234
|
105
|
-
|
-
|
13,657
|
||||||||||||||||||
State and political
|
||||||||||||||||||||||||
subdivision loans
|
98,500
|
-
|
-
|
-
|
-
|
98,500
|
||||||||||||||||||
Total
|
$
|
448,776
|
$
|
8,284
|
$
|
22,852
|
$
|
169
|
$
|
-
|
$
|
480,081
|
June 30, 2016
|
Performing
|
Non-performing
|
PCI
|
Total
|
||||||||||||
Real estate loans:
|
||||||||||||||||
Mortgages
|
$
|
142,633
|
$
|
1,474
|
$
|
34
|
$
|
144,141
|
||||||||
Home Equity
|
59,709
|
130
|
-
|
59,839
|
||||||||||||
Consumer
|
11,385
|
48
|
6
|
11,439
|
||||||||||||
Total
|
$
|
213,727
|
$
|
1,652
|
$
|
40
|
$
|
215,419
|
December 31, 2015
|
Performing
|
Non-performing
|
PCI
|
Total
|
||||||||||||
Real estate loans:
|
||||||||||||||||
Mortgages
|
$
|
139,734
|
$
|
1,270
|
$
|
35
|
$
|
141,039
|
||||||||
Home Equity
|
62,236
|
132
|
-
|
$
|
62,368
|
|||||||||||
Consumer
|
11,470
|
64
|
9
|
$
|
11,543
|
|||||||||||
Total
|
$
|
213,440
|
$
|
1,466
|
$
|
44
|
$
|
214,950
|
|
Total
|
90 Days or
|
||||||||||||||||||||||||||||||
|
30-59 Days
|
60-89 Days
|
90 Days
|
Total Past
|
Financing
|
Greater and
|
||||||||||||||||||||||||||
June 30, 2016
|
Past Due
|
Past Due
|
Or Greater
|
Due
|
Current
|
PCI
|
Receivables
|
Accruing
|
||||||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||||||||||
Mortgages
|
$
|
1,564
|
$
|
25
|
$
|
704
|
$
|
2,293
|
$
|
141,814
|
$
|
34
|
$
|
144,141
|
$
|
195
|
||||||||||||||||
Home Equity
|
478
|
74
|
77
|
629
|
59,210
|
-
|
59,839
|
24
|
||||||||||||||||||||||||
Commercial
|
1,257
|
958
|
4,147
|
6,362
|
238,517
|
2,016
|
246,895
|
461
|
||||||||||||||||||||||||
Agricultural
|
166
|
58
|
165
|
389
|
61,266
|
737
|
62,392
|
165
|
||||||||||||||||||||||||
Construction
|
-
|
-
|
-
|
-
|
10,481
|
-
|
10,481
|
-
|
||||||||||||||||||||||||
Consumer
|
210
|
39
|
48
|
297
|
11,136
|
6
|
11,439
|
9
|
||||||||||||||||||||||||
Other commercial loans
|
15
|
3,062
|
1,012
|
4,089
|
50,721
|
876
|
55,686
|
146
|
||||||||||||||||||||||||
Other agricultural loans
|
66
|
91
|
104
|
261
|
18,142
|
-
|
18,403
|
104
|
||||||||||||||||||||||||
State and political
|
||||||||||||||||||||||||||||||||
subdivision loans
|
-
|
-
|
-
|
-
|
99,839
|
-
|
99,839
|
-
|
||||||||||||||||||||||||
Total
|
$
|
3,756
|
$
|
4,307
|
$
|
6,257
|
$
|
14,320
|
$
|
691,126
|
$
|
3,669
|
$
|
709,115
|
$
|
1,104
|
||||||||||||||||
|
||||||||||||||||||||||||||||||||
Loans considered non-accrual
|
$
|
373
|
$
|
3,759
|
$
|
5,153
|
$
|
9,285
|
$
|
921
|
$
|
-
|
$
|
10,206
|
||||||||||||||||||
Loans still accruing
|
3,383
|
548
|
1,104
|
5,035
|
690,205
|
3,669
|
698,909
|
|||||||||||||||||||||||||
Total
|
$
|
3,756
|
$
|
4,307
|
$
|
6,257
|
$
|
14,320
|
$
|
691,126
|
$
|
3,669
|
$
|
709,115
|
||||||||||||||||||
|
||||||||||||||||||||||||||||||||
|
Total
|
90 Days or
|
||||||||||||||||||||||||||||||
|
30-59 Days
|
60-89 Days
|
90 Days
|
Total Past
|
Financing
|
Greater and
|
||||||||||||||||||||||||||
December 31, 2015
|
Past Due
|
Past Due
|
Or Greater
|
Due
|
Current
|
PCI
|
Receivables
|
Accruing
|
||||||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||||||||||
Mortgages
|
$
|
487
|
$
|
283
|
$
|
687
|
$
|
1,457
|
$
|
139,547
|
$
|
35
|
$
|
141,039
|
$
|
321
|
||||||||||||||||
Home Equity
|
630
|
15
|
121
|
766
|
61,602
|
-
|
62,368
|
73
|
||||||||||||||||||||||||
Commercial
|
824
|
57
|
4,139
|
5,020
|
230,352
|
2,170
|
237,542
|
60
|
||||||||||||||||||||||||
Agricultural
|
177
|
167
|
-
|
344
|
56,740
|
738
|
57,822
|
-
|
||||||||||||||||||||||||
Construction
|
-
|
-
|
-
|
-
|
15,011
|
-
|
15,011
|
-
|
||||||||||||||||||||||||
Consumer
|
239
|
37
|
49
|
325
|
11,209
|
9
|
11,543
|
9
|
||||||||||||||||||||||||
Other commercial loans
|
143
|
214
|
1,010
|
1,367
|
55,316
|
866
|
57,549
|
160
|
||||||||||||||||||||||||
Other agricultural loans
|
9
|
-
|
-
|
9
|
13,648
|
-
|
13,657
|
-
|
||||||||||||||||||||||||
State and political
|
||||||||||||||||||||||||||||||||
subdivision loans
|
-
|
-
|
-
|
-
|
98,500
|
-
|
98,500
|
-
|
||||||||||||||||||||||||
Total
|
$
|
2,509
|
$
|
773
|
$
|
6,006
|
$
|
9,288
|
$
|
681,925
|
$
|
3,818
|
$
|
695,031
|
$
|
623
|
||||||||||||||||
|
||||||||||||||||||||||||||||||||
Loans considered non-accrual
|
$
|
54
|
$
|
171
|
$
|
5,383
|
$
|
5,608
|
$
|
923
|
$
|
-
|
$
|
6,531
|
||||||||||||||||||
Loans still accruing
|
2,455
|
602
|
623
|
3,680
|
681,002
|
3,818
|
688,500
|
|||||||||||||||||||||||||
Total
|
$
|
2,509
|
$
|
773
|
$
|
6,006
|
$
|
9,288
|
$
|
681,925
|
$
|
3,818
|
$
|
695,031
|
|
June 30, 2016
|
December 31, 2015
|
||||||
Real estate loans:
|
||||||||
Mortgages
|
$
|
1,279
|
$
|
949
|
||||
Home Equity
|
106
|
59
|
||||||
Commercial
|
4,711
|
4,422
|
||||||
Agricultural
|
29
|
34
|
||||||
Consumer
|
39
|
55
|
||||||
Other commercial loans
|
4,042
|
1,012
|
||||||
|
$
|
10,206
|
$
|
6,531
|
|
For the Three Months Ended June 30, 2016
|
|||||||||||||||||||||||
|
Number of contracts
|
Pre-modification Outstanding
Recorded Investment
|
Post-Modification Outstanding
Recorded Investment
|
|||||||||||||||||||||
|
Interest
Modification
|
Term
Modification
|
Interest
Modification
|
Term
Modification
|
Interest
Modification
|
Term
Modification
|
||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||
Commercial
|
-
|
3
|
$
|
-
|
$
|
438
|
$
|
-
|
$
|
438
|
||||||||||||||
Total
|
-
|
3
|
$
|
-
|
$
|
438
|
$
|
-
|
$
|
438
|
|
For the Six Months Ended June 30, 2016
|
|||||||||||||||||||||||
|
Number of contracts
|
Pre-modification Outstanding
Recorded Investment
|
Post-Modification Outstanding
Recorded Investment
|
|||||||||||||||||||||
|
Interest
Modification
|
Term
Modification
|
Interest
Modification
|
Term
Modification
|
Interest
Modification
|
Term
Modification
|
||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||
Commercial
|
-
|
3
|
$
|
-
|
$
|
438
|
$
|
-
|
$
|
438
|
||||||||||||||
Total
|
-
|
3
|
$
|
-
|
$
|
438
|
$
|
-
|
$
|
438
|
|
For the Three Months Ended June 30, 2015
|
|||||||||||||||||||||||
|
Number of contracts
|
Pre-modification Outstanding
Recorded Investment
|
Post-Modification Outstanding
Recorded Investment
|
|||||||||||||||||||||
|
Interest
Modification
|
Term
Modification
|
Interest
Modification
|
Term
Modification
|
Interest
Modification
|
Term
Modification
|
||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||
Mortgages
|
-
|
1
|
$
|
-
|
$
|
19
|
$
|
-
|
$
|
19
|
||||||||||||||
Total
|
-
|
1
|
$
|
-
|
$
|
19
|
$
|
-
|
$
|
19
|
|
For the Six Months Ended June 30, 2015
|
|||||||||||||||||||||||
|
Number of contracts
|
Pre-modification Outstanding
Recorded Investment
|
Post-Modification Outstanding
Recorded Investment
|
|||||||||||||||||||||
|
Interest
Modification
|
Term
Modification
|
Interest
Modification
|
Term
Modification
|
Interest
Modification
|
Term
Modification
|
||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||
Mortgages
|
1
|
1
|
$
|
71
|
$
|
19
|
$
|
71
|
$
|
19
|
||||||||||||||
Total
|
1
|
1
|
$
|
71
|
$
|
19
|
$
|
71
|
$
|
19
|
|
June 30, 2016
|
December 31, 2015
|
||||||||||||||||||||||
|
Individually
evaluated for impairment
|
Collectively
evaluated for impairment
|
Total
|
Individually
evaluated for
impairment
|
Collectively
evaluated for
impairment
|
Total
|
||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||
Residential
|
$
|
46
|
$
|
944
|
$
|
990
|
$
|
37
|
$
|
868
|
$
|
905
|
||||||||||||
Commercial and agricultural
|
126
|
3,793
|
3,919
|
62
|
3,723
|
3,785
|
||||||||||||||||||
Construction
|
-
|
18
|
18
|
-
|
24
|
24
|
||||||||||||||||||
Consumer
|
-
|
104
|
104
|
-
|
102
|
102
|
||||||||||||||||||
Other commercial and agricultural loans
|
415
|
1,149
|
1,564
|
256
|
1,049
|
1,305
|
||||||||||||||||||
State and political
|
||||||||||||||||||||||||
subdivision loans
|
-
|
764
|
764
|
-
|
593
|
593
|
||||||||||||||||||
Unallocated
|
-
|
-
|
-
|
-
|
392
|
392
|
||||||||||||||||||
Total
|
$
|
587
|
$
|
6,772
|
$
|
7,359
|
$
|
355
|
$
|
6,751
|
$
|
7,106
|
|
Balance at
March 31, 2016
|
Charge-offs
|
Recoveries
|
Provision
|
Balance at
June 30, 2016
|
|||||||||||||||
Real estate loans:
|
||||||||||||||||||||
Residential
|
$
|
966
|
$
|
(43
|
)
|
$
|
-
|
$
|
67
|
$
|
990
|
|||||||||
Commercial and agricultural
|
3,938
|
-
|
4
|
(23
|
)
|
3,919
|
||||||||||||||
Construction
|
14
|
-
|
-
|
4
|
18
|
|||||||||||||||
Consumer
|
96
|
(23
|
)
|
29
|
2
|
104
|
||||||||||||||
Other commercial and agricultural loans
|
1,347
|
(18
|
)
|
-
|
235
|
1,564
|
||||||||||||||
State and political
|
-
|
|||||||||||||||||||
subdivision loans
|
666
|
-
|
-
|
98
|
764
|
|||||||||||||||
Unallocated
|
248
|
-
|
-
|
(248
|
)
|
-
|
||||||||||||||
Total
|
$
|
7,275
|
$
|
(84
|
)
|
$
|
33
|
$
|
135
|
$
|
7,359
|
|||||||||
|
||||||||||||||||||||
|
Balance at
December 31, 2015
|
Charge-offs
|
Recoveries
|
Provision
|
Balance at
June 30, 2016
|
|||||||||||||||
Real estate loans:
|
||||||||||||||||||||
Residential
|
$
|
905
|
$
|
(43
|
)
|
$
|
-
|
$
|
128
|
$
|
990
|
|||||||||
Commercial and agricultural
|
3,785
|
-
|
8
|
126
|
3,919
|
|||||||||||||||
Construction
|
24
|
-
|
-
|
(6
|
)
|
18
|
||||||||||||||
Consumer
|
102
|
(38
|
)
|
68
|
(28
|
)
|
104
|
|||||||||||||
Other commercial and agricultural loans
|
1,305
|
(18
|
)
|
6
|
271
|
1,564
|
||||||||||||||
State and political
|
-
|
|||||||||||||||||||
subdivision loans
|
593
|
-
|
-
|
171
|
764
|
|||||||||||||||
Unallocated
|
392
|
-
|
-
|
(392
|
)
|
-
|
||||||||||||||
Total
|
$
|
7,106
|
$
|
(99
|
)
|
$
|
82
|
$
|
270
|
$
|
7,359
|
|||||||||
|
|
Balance at
March 31, 2015
|
Charge-offs
|
Recoveries
|
Provision
|
Balance at
June 30, 2015
|
|||||||||||||||
Real estate loans:
|
||||||||||||||||||||
Residential
|
$
|
923
|
$
|
(17
|
)
|
$
|
-
|
$
|
25
|
$
|
931
|
|||||||||
Commercial and agricultural
|
3,699
|
(56
|
)
|
3
|
33
|
3,679
|
||||||||||||||
Construction
|
11
|
-
|
-
|
3
|
14
|
|||||||||||||||
Consumer
|
82
|
(17
|
)
|
4
|
20
|
89
|
||||||||||||||
Other commercial and agricultural loans
|
1,286
|
-
|
-
|
216
|
1,502
|
|||||||||||||||
State and political
|
-
|
|||||||||||||||||||
subdivision loans
|
572
|
-
|
-
|
(4
|
)
|
568
|
||||||||||||||
Unallocated
|
349
|
-
|
-
|
(173
|
)
|
176
|
||||||||||||||
Total
|
$
|
6,922
|
$
|
(90
|
)
|
$
|
7
|
$
|
120
|
$
|
6,959
|
|||||||||
|
||||||||||||||||||||
|
Balance at
December 31, 2014
|
Charge-offs
|
Recoveries
|
Provision
|
Balance at
June 30, 2015
|
|||||||||||||||
Real estate loans:
|
||||||||||||||||||||
Residential
|
$
|
878
|
$
|
(34
|
)
|
$
|
-
|
$
|
87
|
$
|
931
|
|||||||||
Commercial and agricultural
|
3,870
|
(56
|
)
|
7
|
(142
|
)
|
3,679
|
|||||||||||||
Construction
|
26
|
-
|
-
|
(12
|
)
|
14
|
||||||||||||||
Consumer
|
84
|
(24
|
)
|
12
|
17
|
89
|
||||||||||||||
Other commercial and agricultural loans
|
1,224
|
(1
|
)
|
-
|
279
|
1,502
|
||||||||||||||
State and political
|
-
|
|||||||||||||||||||
subdivision loans
|
545
|
-
|
-
|
23
|
568
|
|||||||||||||||
Unallocated
|
188
|
-
|
-
|
(12
|
)
|
176
|
||||||||||||||
Total
|
$
|
6,815
|
$
|
(115
|
)
|
$
|
19
|
$
|
240
|
$
|
6,959
|
·
|
Level of and trends in delinquencies and impaired/classified loans
|
§
|
Change in volume and severity of past due loans
|
§
|
Volume of non-accrual loans
|
§
|
Volume and severity of classified, adversely or graded loans;
|
·
|
Level of and trends in charge-offs and recoveries;
|
·
|
Trends in volume, terms and nature of the loan portfolio;
|
·
|
Effects of any changes in risk selection and underwriting standards and any other changes in lending and recovery policies, procedures and practices;
|
·
|
Changes in the quality of the Company's loan review system;
|
·
|
Experience, ability and depth of lending management and other relevant staff;
|
·
|
National, state, regional and local economic trends and business conditions
|
§
|
General economic conditions
|
§
|
Unemployment rates
|
§
|
Inflation rate/ Consumer Price Index
|
§
|
Changes in values of underlying collateral for collateral-dependent loans;
|
·
|
Industry conditions including the effects of external factors such as competition, legal, and regulatory requirements on the level of estimated credit losses;
|
·
|
Existence and effect of any credit concentrations, and changes in the level of such concentrations; and
|
·
|
Any change in the level of board oversight.
|
·
|
The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans were increased for residential, consumer and agricultural related loans due to an increase in past due, non-accrual and classified loans.
|
·
|
The qualitative factor for industry conditions, including the effects of external factors such as competition, legal, and regulatory requirements on the level of estimated credit losses was increased for agricultural related loans due to the decrease in the price received for product sold and the increase in feed costs that has occurred in 2016, which negatively affected customer earnings.
|
·
|
The qualitative factor for national, state, regional and local economic trends and business conditions was increased for all loan categories due to an increase in the unemployment rates in the local economy during the first six months of 2016.
|
·
|
The qualitative factor for national, state, regional and local economic trends and business conditions was increased for all loan categories due to an increase in the unemployment rates in the local economy during the quarter.
|
·
|
The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans were increased for agricultural related loans due to an increase in past due, non-accrual and classified loans.
|
·
|
The qualitative factor for national, state, regional and local economic trends and business conditions was increased for all loan categories due to an increase in the unemployment rates in the local economy during the first six months of 2015.
|
·
|
The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans were decreased for commercial and agricultural real estate due to the decrease in the amount of loans classified as substandard.
|
·
|
The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans were increased for other commercial and agricultural loans due to an increase in the amount of loans classified as substandard.
|
·
|
The qualitative factor for levels of and trends in charge-offs and recoveries was decreased for commercial and agricultural real estate and other commercial and agricultural loans due to the decrease in charge-offs compared to the prior year as charge-offs returned to historical levels for the Bank.
|
·
|
The qualitative factor for experience, ability and depth of lending management and other relevant staff was decreased for commercial real estate, agricultural real estate, other commercial and other agricultural loans due to the length of time employees involved throughout the loan process have been in their positions.
|
·
|
The qualitative factor for industry conditions, including the effects of external factors such as competition, legal, and regulatory requirements on the level of estimated credit losses was increased for commercial and agricultural related loans due to the decrease in the price received for product sold and the increase in feed costs that has occurred in 2015, which negatively affected customer earnings.
|
·
|
The qualitative factor for levels of and trends in charge-offs and recoveries was increased for residential real estate loans due to the increase in charge-offs compared to historical norms for the Company.
|
·
|
The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans was increased for residential mortgages due to increases in the amount of delinquent loans.
|
·
|
The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans were decreased for commercial and agricultural real estate due to the decrease in the amount of loans classified as substandard.
|
·
|
The qualitative factors for changes in levels of and trends in delinquencies, impaired/classified loans were increased for other commercial and agricultural loans due to an increase in the amount of loans classified as substandard.
|
·
|
The qualitative factor for levels of and trends in charge-offs and recoveries was decreased for commercial and agricultural real estate and other commercial and agricultural loans due to the decrease in charge-offs compared to the prior year as charge-offs returned to historical levels for the Bank.
|
·
|
The qualitative factor for experience, ability and depth of lending management and other relevant staff was decreased for all commercial real estate, agricultural real estate, other commercial and other agricultural loans due to the length of time employees involved throughout the loan process have been in their positions.
|
|
June 30, 2016
|
December 31, 2015
|
||||||||||||||||||||||
|
Gross
carrying
value
|
Accumulated amortization
|
Net
carrying
value
|
Gross
carrying
value
|
Accumulated
amortization
|
Net
carrying
value
|
||||||||||||||||||
Amortized intangible assets (1):
|
||||||||||||||||||||||||
MSRs
|
$
|
1,336
|
$
|
(728
|
)
|
$
|
608
|
$
|
1,336
|
$
|
(638
|
)
|
$
|
698
|
||||||||||
Core deposit intangibles
|
1,641
|
(173
|
)
|
1,468
|
1,641
|
(25
|
)
|
1,616
|
||||||||||||||||
Covenant not to compete
|
125
|
(18
|
)
|
107
|
125
|
(2
|
)
|
123
|
||||||||||||||||
Total amortized intangible assets
|
$
|
3,102
|
$
|
(919
|
)
|
$
|
2,183
|
$
|
3,102
|
$
|
(665
|
)
|
$
|
2,437
|
||||||||||
Unamortized intangible assets:
|
||||||||||||||||||||||||
Goodwill
|
$
|
21,089
|
$
|
21,089
|
||||||||||||||||||||
(1) Excludes fully amortized intangible assets
|
|
MSRs
|
Core deposit intangibles
|
Covenant not to compete
|
Total
|
||||||||||||
Six months ended June 30, 2016 (actual)
|
$
|
90
|
$
|
148
|
$
|
16
|
$
|
254
|
||||||||
Three months ended June 30, 2016 (actual)
|
$
|
44
|
$
|
74
|
$
|
8
|
$
|
126
|
||||||||
Estimate for year ended December 31,
|
||||||||||||||||
Remaining 2016
|
83
|
148
|
15
|
246
|
||||||||||||
2017
|
142
|
266
|
31
|
439
|
||||||||||||
2018
|
113
|
236
|
31
|
380
|
||||||||||||
2019
|
88
|
206
|
30
|
324
|
||||||||||||
2020
|
66
|
177
|
-
|
243
|
Remaining Contractual Maturity of the Agreements
|
||||||||||||||||||||
Overnight and
|
Up to
|
Greater than
|
||||||||||||||||||
June 30, 2016
|
Continuous
|
30 Days
|
30 - 90 Days
|
90 days
|
Total
|
|||||||||||||||
Repurchase Agreements:
|
||||||||||||||||||||
U.S. agency securities
|
$
|
18,024
|
$
|
-
|
$
|
-
|
$
|
2,129
|
$
|
20,153
|
||||||||||
Total carrying value of collateral pledged
|
$
|
18,024
|
$
|
-
|
$
|
-
|
$
|
2,129
|
$
|
20,153
|
||||||||||
Total liability recognized for repurchase agreements
|
$
|
14,761
|
||||||||||||||||||
Remaining Contractual Maturity of the Agreements
|
||||||||||||||||||||
Overnight and
|
Up to
|
Greater than
|
||||||||||||||||||
December 31, 2015
|
Continuous
|
30 Days
|
30 - 90 Days
|
90 days
|
Total
|
|||||||||||||||
Repurchase Agreements:
|
||||||||||||||||||||
U.S. agency securities
|
$
|
18,144
|
$
|
-
|
$
|
-
|
$
|
2,049
|
$
|
20,193
|
||||||||||
Total carrying value of collateral pledged
|
$
|
18,144
|
$
|
-
|
$
|
-
|
$
|
2,049
|
$
|
20,193
|
||||||||||
Total liability recognized for repurchase agreements
|
$
|
16,008
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
Service cost
|
$
|
89
|
$
|
78
|
$
|
179
|
$
|
132
|
||||||||
Interest cost
|
173
|
90
|
345
|
153
|
||||||||||||
Expected return on plan assets
|
(260
|
)
|
(172
|
)
|
(520
|
)
|
(290
|
)
|
||||||||
Net amortization and deferral
|
60
|
45
|
121
|
76
|
||||||||||||
Net periodic benefit cost
|
$
|
62
|
$
|
41
|
$
|
125
|
$
|
71
|
|
Three months
|
Six months
|
||||||||||||||
|
Weighted
|
Weighted
|
||||||||||||||
|
Unvested
|
Average
|
Unvested
|
Average
|
||||||||||||
|
Shares
|
Market Price
|
Shares
|
Market Price
|
||||||||||||
Outstanding, beginning of period
|
8,111
|
$
|
49.96
|
8,269
|
$
|
49.98
|
||||||||||
Granted
|
3,650
|
47.81
|
3,650
|
47.81
|
||||||||||||
Forfeited
|
-
|
-
|
-
|
-
|
||||||||||||
Vested
|
(3,158
|
)
|
50.41
|
(3,316
|
)
|
(50.45
|
)
|
|||||||||
Outstanding, end of period
|
8,603
|
$
|
48.88
|
8,603
|
$
|
48.88
|
|
Three months ended June 30, 2016
|
|||||||||||
|
Unrealized gain
(loss) on available
for sale securities (a)
|
Defined Benefit Pension Items (a)
|
Total
|
|||||||||
Balance as of March 31, 2016
|
$
|
3,303
|
$
|
(2,400
|
)
|
$
|
903
|
|||||
Other comprehensive income before reclassifications (net of tax)
|
1,184
|
-
|
1,184
|
|||||||||
Amounts reclassified from accumulated other
|
||||||||||||
comprehensive income (loss) (net of tax)
|
(84
|
)
|
39
|
(45
|
)
|
|||||||
Net current period other comprehensive income
|
1,100
|
39
|
1,139
|
|||||||||
Balance as of June 30, 2016
|
$
|
4,403
|
$
|
(2,361
|
)
|
$
|
2,042
|
|||||
|
||||||||||||
|
Six months ended June 30, 2016
|
|||||||||||
Balance as of December 31, 2015
|
$
|
2,204
|
$
|
(2,440
|
)
|
$
|
(236
|
)
|
||||
Other comprehensive income before reclassifications (net of tax)
|
2,301
|
-
|
2,301
|
|||||||||
Amounts reclassified from accumulated other
|
||||||||||||
comprehensive income (loss) (net of tax)
|
(102
|
)
|
79
|
(23
|
)
|
|||||||
Net current period other comprehensive income
|
2,199
|
79
|
2,278
|
|||||||||
Balance as of June 30, 2016
|
$
|
4,403
|
$
|
(2,361
|
)
|
$
|
2,042
|
|||||
|
||||||||||||
|
Three months ended June 30, 2015
|
|||||||||||
Balance as of March 31, 2015
|
$
|
3,897
|
$
|
(2,294
|
)
|
$
|
1,603
|
|||||
Other comprehensive income (loss) before reclassifications (net of tax)
|
(1,351
|
)
|
-
|
(1,351
|
)
|
|||||||
Amounts reclassified from accumulated other
|
||||||||||||
comprehensive income (loss) (net of tax)
|
(116
|
)
|
35
|
(81
|
)
|
|||||||
Net current period other comprehensive income (loss)
|
(1,467
|
)
|
35
|
(1,432
|
)
|
|||||||
Balance as of June 30, 2015
|
$
|
2,430
|
$
|
(2,259
|
)
|
$
|
171
|
|||||
|
||||||||||||
|
Six months ended June 30, 2015
|
|||||||||||
Balance as of December 31, 2014
|
$
|
3,093
|
$
|
(2,326
|
)
|
$
|
767
|
|||||
Other comprehensive income (loss) before reclassifications (net of tax)
|
(464
|
)
|
-
|
(464
|
)
|
|||||||
Amounts reclassified from accumulated other
|
||||||||||||
comprehensive income (loss) (net of tax)
|
(199
|
)
|
67
|
(132
|
)
|
|||||||
Net current period other comprehensive income (loss)
|
(663
|
)
|
67
|
(596
|
)
|
|||||||
Balance as of June 30, 2015
|
$
|
2,430
|
$
|
(2,259
|
)
|
$
|
171
|
|||||
(a) Amounts in parentheses indicate debits to the Consolidated Balance Sheet
|
Details about accumulated other comprehensive income (loss)
|
Amount reclassified from accumulated comprehensive income (loss) (a)
|
Affected line item in the statement where net Income is presented
|
|||||||
|
Three Months Ended June 30,
|
|
|||||||
|
2016
|
2015
|
|
||||||
Unrealized gains and losses on available for sale securities
|
|
||||||||
|
$
|
128
|
$
|
175
|
Investment securities gains, net
|
||||
|
(44
|
)
|
(59
|
)
|
Provision for income taxes
|
||||
|
$
|
84
|
$
|
116
|
Net of tax
|
||||
|
|
||||||||
Defined benefit pension items
|
|
||||||||
|
$
|
(60
|
)
|
$
|
(54
|
)
|
Salaries and employee benefits
|
||
|
21
|
19
|
Provision for income taxes
|
||||||
|
$
|
(39
|
)
|
$
|
(35
|
)
|
Net of tax
|
||
|
|
||||||||
Total reclassifications
|
$
|
45
|
$
|
81
|
|
||||
|
|
||||||||
|
Six Months Ended June 30,
|
|
|||||||
|
2016
|
2015
|
|
||||||
Unrealized gains and losses on available for sale securities
|
|
||||||||
|
$
|
155
|
$
|
301
|
Investment securities gains, net
|
||||
|
(53
|
)
|
(102
|
)
|
Provision for income taxes
|
||||
|
$
|
102
|
$
|
199
|
Net of tax
|
||||
|
|
||||||||
Defined benefit pension items
|
|
||||||||
|
$
|
(121
|
)
|
$
|
(102
|
)
|
Salaries and employee benefits
|
||
|
42
|
35
|
Provision for income taxes
|
||||||
|
$
|
(79
|
)
|
$
|
(67
|
)
|
Net of tax
|
||
|
|
||||||||
Total reclassifications
|
$
|
23
|
$
|
132
|
|
||||
|
|
||||||||
(a) Amounts in parentheses indicate expenses and other amounts indicate income on the Consolidated Statement of Income
|
Level I:
|
Quoted prices are available in active markets for identical assets or liabilities as of the reported date.
|
Level II:
|
Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities include items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed.
|
|
|
Level III:
|
Assets and liabilities that have little to no pricing observability as of the reported date. These items do not have two-way markets and are measured using management's best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.
|
June 30, 2016
|
Level I
|
Level II
|
Level III
|
Total
|
||||||||||||
Fair value measurements on a recurring basis:
|
||||||||||||||||
Assets
|
||||||||||||||||
Securities available for sale:
|
||||||||||||||||
U.S. Agency securities
|
$
|
-
|
$
|
205,819
|
$
|
-
|
$
|
205,819
|
||||||||
U.S. Treasury securities
|
5,053
|
-
|
-
|
5,053
|
||||||||||||
Obligations of state and
|
||||||||||||||||
political subdivisions
|
-
|
104,472
|
-
|
104,472
|
||||||||||||
Corporate obligations
|
-
|
11,480
|
-
|
11,480
|
||||||||||||
Mortgage-backed securities in
|
||||||||||||||||
government sponsored entities
|
-
|
31,606
|
-
|
31,606
|
||||||||||||
Equity securities in financial institutions
|
2,514
|
-
|
-
|
2,514
|
||||||||||||
|
||||||||||||||||
December 31, 2015
|
||||||||||||||||
Fair value measurements on a recurring basis:
|
||||||||||||||||
Securities available for sale:
|
||||||||||||||||
U.S. Agency securities
|
$
|
-
|
$
|
199,591
|
$
|
-
|
$
|
199,591
|
||||||||
U.S. Treasuries securities
|
10,082
|
-
|
-
|
10,082
|
||||||||||||
Obligations of state and
|
||||||||||||||||
political subdivisions
|
-
|
102,863
|
-
|
102,863
|
||||||||||||
Corporate obligations
|
-
|
14,565
|
-
|
14,565
|
||||||||||||
Mortgage-backed securities in
|
||||||||||||||||
government sponsored entities
|
-
|
30,204
|
-
|
30,204
|
||||||||||||
Equity securities in financial institutions
|
2,432
|
-
|
-
|
2,432
|
June 30, 2016
|
Level I
|
Level II
|
Level III
|
Total
|
||||||||||||
Impaired Loans
|
$
|
-
|
$
|
-
|
$
|
989
|
$
|
989
|
||||||||
Other real estate owned
|
-
|
-
|
1,007
|
1,007
|
||||||||||||
|
||||||||||||||||
December 31, 2015
|
||||||||||||||||
Impaired Loans
|
$
|
-
|
$
|
-
|
$
|
894
|
$
|
894
|
||||||||
Other real estate owned
|
-
|
-
|
1,197
|
1,197
|
·
|
Impaired Loans - The Company has measured impairment on impaired loans generally based on the fair value of the loan's collateral. Fair value is generally determined based upon independent third-party appraisals of the properties. In some cases, management may adjust the appraised value due to the age of the appraisal, changes in market conditions, or observable deterioration of the property since the appraisal was completed. Additionally, management makes estimates about expected costs to sell the property which are also included in the net realizable value. If the fair value of the collateral dependent loan is less than the carrying amount of the loan a specific reserve for the loan is made in the allowance for loan losses or a charge-off is taken to reduce the loan to the fair value of the collateral (less estimated selling costs) and the loan is included in the table above as a Level III measurement. If the fair value of the collateral exceeds the carrying amount of the loan, then the loan is not included in the table above as it is not current being carried at its fair value. The fair values above excluded estimated selling costs of $126,000 and $91,000 at June 30, 2016 and December 31, 2015, respectively.
|
·
|
Other Real Estate owned – OREO is carried at the lower of cost or fair value, which is measured at the date foreclosure. If the fair value of the collateral exceeds the carrying amount of the loan, no charge-off or adjustment is necessary, the loan is not considered to be carried at fair value, and is therefore not included in the table above. If the fair value of the collateral is less than the carrying amount of the loan, management will charge the loan down to its estimated realizable value. The fair value of OREO is based on the appraised value of the property, which is generally unadjusted by management and is based on comparable sales for similar properties in the same geographic region as the subject property, and is included in the above table as a Level II measurement. In some cases, management may adjust the appraised value due to the age of the appraisal, changes in market conditions, or observable deterioration of the property since the appraisal was completed. In these cases, the loans are categorized in the above table as Level III measurement since these adjustments are considered to be unobservable inputs. Income and expenses from operations and further declines in the fair value of the collateral subsequent to foreclosure are included in net expenses from OREO.
|
Quantitative Information about Level 3 Fair Value Measurements
|
||||||||||||||
June 30, 2016
|
Fair Value
|
Valuation Technique(s)
|
Unobservable input
|
Range
|
Weighted average
|
|||||||||
Impaired Loans
|
$
|
989
|
Appraised Collateral Values
|
Discount to appraised value
|
0-75
|
%
|
36.64
|
%
|
||||||
|
|
Selling costs
|
5%-10
|
%
|
8.18
|
%
|
||||||||
|
|
Holding period
|
0 - 12 months
|
10 months
|
||||||||||
|
|
|
||||||||||||
Other real estate owned
|
1,007
|
Appraised Collateral Values
|
Discount to appraised value
|
0-37
|
%
|
24.70
|
%
|
|||||||
|
|
|
||||||||||||
December 31, 2015
|
Fair Value
|
Valuation Technique(s)
|
Unobservable input
|
Range
|
||||||||||
Impaired Loans
|
894
|
Appraised Collateral Values
|
Discount to appraised value
|
0-70
|
%
|
46.50
|
%
|
|||||||
|
|
Selling costs
|
4%-10
|
%
|
7.75
|
%
|
||||||||
|
|
Holding period
|
0 - 12 months
|
10 months
|
||||||||||
|
|
|
||||||||||||
Other real estate owned
|
1,197
|
Appraised Collateral Values
|
Discount to appraised value
|
0-75
|
%
|
25
|
%
|
|
Carrying
|
|||||||||||||||||||
June 30, 2016
|
Amount
|
Fair Value
|
Level I
|
Level II
|
Level III
|
|||||||||||||||
Financial assets:
|
||||||||||||||||||||
Cash and due from banks
|
$
|
26,822
|
$
|
26,822
|
$
|
26,822
|
$
|
-
|
$
|
-
|
||||||||||
Interest bearing time deposits with other banks
|
6,954
|
6,961
|
-
|
-
|
6,961
|
|||||||||||||||
Available-for-sale securities
|
360,944
|
360,944
|
7,567
|
353,377
|
||||||||||||||||
Loans held for sale
|
1,304
|
1,304
|
1,304
|
|||||||||||||||||
Net loans
|
701,756
|
726,584
|
-
|
-
|
726,584
|
|||||||||||||||
Bank owned life insurance
|
25,877
|
25,877
|
25,877
|
-
|
-
|
|||||||||||||||
Regulatory stock
|
3,407
|
3,407
|
3,407
|
-
|
-
|
|||||||||||||||
Accrued interest receivable
|
4,176
|
4,176
|
4,176
|
-
|
-
|
|||||||||||||||
|
||||||||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
$
|
1,003,482
|
$
|
1,005,158
|
$
|
734,593
|
$
|
-
|
$
|
270,565
|
||||||||||
Borrowed funds
|
38,786
|
37,240
|
-
|
-
|
37,240
|
|||||||||||||||
Accrued interest payable
|
644
|
644
|
644
|
-
|
-
|
|||||||||||||||
|
||||||||||||||||||||
|
Carrying
|
|||||||||||||||||||
December 31, 2015
|
Amount
|
Fair Value
|
Level I
|
Level II
|
Level III
|
|||||||||||||||
Financial assets:
|
||||||||||||||||||||
Cash and due from banks
|
$
|
24,384
|
$
|
24,384
|
$
|
24,384
|
$
|
-
|
$
|
-
|
||||||||||
Interest bearing time deposits with other banks
|
7,696
|
7,705
|
-
|
-
|
7,705
|
|||||||||||||||
Available-for-sale securities
|
359,737
|
359,737
|
12,514
|
347,223
|
-
|
|||||||||||||||
Loans held for sale
|
603
|
603
|
603
|
|||||||||||||||||
Net loans
|
687,925
|
712,524
|
-
|
-
|
712,524
|
|||||||||||||||
Bank owned life insurance
|
25,535
|
25,535
|
25,535
|
-
|
-
|
|||||||||||||||
Regulatory stock
|
3,459
|
3,459
|
3,459
|
-
|
-
|
|||||||||||||||
Accrued interest receivable
|
4,211
|
4,211
|
4,211
|
-
|
-
|
|||||||||||||||
|
||||||||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits
|
$
|
988,031
|
$
|
987,542
|
$
|
706,121
|
$
|
-
|
$
|
281,421
|
||||||||||
Borrowed funds
|
41,631
|
38,863
|
1,598
|
-
|
37,265
|
|||||||||||||||
Accrued interest payable
|
734
|
734
|
734
|
-
|
·
|
Interest rates could change more rapidly or more significantly than we expect.
|
·
|
The economy could change significantly in an unexpected way, which would cause the demand for new loans and the ability of borrowers to repay outstanding loans to change in ways that our models do not anticipate.
|
·
|
The financial markets could suffer a significant disruption, which may have a negative effect on our financial condition and that of our borrowers, and on our ability to raise money by issuing new securities.
|
·
|
It could take us longer than we anticipate to implement strategic initiatives designed to increase revenues or manage expenses, or we may be unable to implement those initiatives at all.
|
·
|
We may not be able to successfully integrate businesses we acquire or be able to fully realize the expected financial and other benefits from acquisitions.
|
·
|
Acquisitions and dispositions of assets could affect us in ways that management has not anticipated.
|
·
|
We may become subject to new legal obligations or the resolution of litigation may have a negative effect on our financial condition or operating results.
|
·
|
We may become subject to new and unanticipated accounting, tax, or regulatory practices or requirements.
|
·
|
We could experience greater loan delinquencies than anticipated, adversely affecting our earnings and financial condition. We could also experience greater losses than expected due to the ever increasing volume of information theft and fraudulent scams impacting our customers and the banking industry.
|
·
|
We could lose the services of some or all of our key personnel, which would negatively impact our business because of their business development skills, financial expertise, lending experience, technical expertise and market area knowledge.
|
·
|
The agricultural economy is subject to extreme swings in both the costs of resources and the prices received from the sale of products, which could negatively impact our customers.
|
·
|
Delays in passing a budget by the Commonwealth of Pennsylvania could impact our asset values, liquidity and profitability.
|
·
|
Companies providing support services related to the exploration and drilling of the natural gas reserves in our market area may be affected by federal, state and local laws and regulations such as restrictions on production, permitting, changes in taxes and environmental protection, which could negatively impact our customers and, as a result, negatively impact our loan and deposit volume and loan quality. Additionally, the activities of the companies providing support services related to the exploration and drilling of the natural gas reserves may be dependent on the market price of natural gas. As a result, decreases in the market price of natural gas could also negatively impact these companies, our customers.
|
|
Analysis of Average Balances and Interest Rates (1)
|
|||||||||||||||||||||||
|
Six Months Ended
|
|||||||||||||||||||||||
|
June 30, 2016
|
June 30, 2015
|
||||||||||||||||||||||
|
Average
|
Average
|
Average
|
Average
|
||||||||||||||||||||
|
Balance (1)
|
Interest
|
Rate
|
Balance (1)
|
Interest
|
Rate
|
||||||||||||||||||
(dollars in thousands)
|
$
|
$
|
%
|
$
|
$
|
%
|
||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
Short-term investments:
|
||||||||||||||||||||||||
Interest-bearing deposits at banks
|
32,770
|
65
|
0.40
|
14,331
|
12
|
0.17
|
||||||||||||||||||
Total short-term investments
|
32,770
|
65
|
0.40
|
14,331
|
12
|
0.17
|
||||||||||||||||||
Interest bearing time deposits at banks
|
7,513
|
70
|
1.89
|
5,960
|
58
|
1.97
|
||||||||||||||||||
Investment securities:
|
||||||||||||||||||||||||
Taxable
|
263,302
|
2,044
|
1.55
|
195,079
|
1,652
|
1.69
|
||||||||||||||||||
Tax-exempt (3)
|
100,766
|
2,313
|
4.59
|
99,925
|
2,498
|
5.00
|
||||||||||||||||||
Total investment securities
|
364,068
|
4,357
|
2.39
|
295,004
|
4,150
|
2.81
|
||||||||||||||||||
Loans:
|
||||||||||||||||||||||||
Residential mortgage loans
|
202,813
|
5,337
|
5.29
|
183,827
|
5,057
|
5.55
|
||||||||||||||||||
Construction
|
11,247
|
286
|
5.12
|
6,313
|
160
|
5.11
|
||||||||||||||||||
Commercial & agricultural loans
|
371,026
|
9,627
|
5.22
|
280,823
|
7,377
|
5.30
|
||||||||||||||||||
Loans to state & political subdivisions
|
103,707
|
2,201
|
4.27
|
83,055
|
1,853
|
4.50
|
||||||||||||||||||
Other loans
|
11,103
|
449
|
8.13
|
8,120
|
322
|
8.00
|
||||||||||||||||||
Loans, net of discount (2)(3)(4)
|
699,896
|
17,900
|
5.14
|
562,138
|
14,769
|
5.30
|
||||||||||||||||||
Total interest-earning assets
|
1,104,247
|
22,392
|
4.08
|
877,433
|
18,989
|
4.36
|
||||||||||||||||||
Cash and due from banks
|
7,352
|
3,933
|
||||||||||||||||||||||
Bank premises and equipment
|
17,264
|
12,579
|
||||||||||||||||||||||
Other assets
|
57,268
|
35,788
|
||||||||||||||||||||||
Total non-interest earning assets
|
81,884
|
52,300
|
||||||||||||||||||||||
Total assets
|
1,186,131
|
929,733
|
||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
NOW accounts
|
303,297
|
468
|
0.31
|
231,106
|
407
|
0.36
|
||||||||||||||||||
Savings accounts
|
174,141
|
93
|
0.11
|
112,734
|
67
|
0.12
|
||||||||||||||||||
Money market accounts
|
114,478
|
257
|
0.45
|
94,474
|
219
|
0.47
|
||||||||||||||||||
Certificates of deposit
|
275,925
|
1,328
|
0.97
|
249,866
|
1,351
|
1.09
|
||||||||||||||||||
Total interest-bearing deposits
|
867,841
|
2,146
|
0.50
|
688,180
|
2,044
|
0.60
|
||||||||||||||||||
Other borrowed funds
|
39,500
|
366
|
1.86
|
33,603
|
347
|
2.08
|
||||||||||||||||||
Total interest-bearing liabilities
|
907,341
|
2,512
|
0.56
|
721,783
|
2,391
|
0.67
|
||||||||||||||||||
Demand deposits
|
144,198
|
97,498
|
||||||||||||||||||||||
Other liabilities
|
12,487
|
8,813
|
||||||||||||||||||||||
Total non-interest-bearing liabilities
|
156,685
|
106,311
|
||||||||||||||||||||||
Stockholders' equity
|
122,105
|
101,639
|
||||||||||||||||||||||
Total liabilities & stockholders' equity
|
1,186,131
|
929,733
|
||||||||||||||||||||||
Net interest income
|
19,880
|
16,598
|
||||||||||||||||||||||
Net interest spread (5)
|
3.52
|
%
|
3.69
|
%
|
||||||||||||||||||||
Net interest income as a percentage
|
||||||||||||||||||||||||
of average interest-earning assets
|
3.62
|
%
|
3.81
|
%
|
||||||||||||||||||||
Ratio of interest-earning assets
|
||||||||||||||||||||||||
to interest-bearing liabilities
|
122
|
%
|
122
|
%
|
||||||||||||||||||||
|
||||||||||||||||||||||||
(1) Averages are based on daily averages.
|
||||||||||||||||||||||||
(2) Includes loan origination and commitment fees.
|
||||||||||||||||||||||||
(3) Tax exempt interest revenue is shown on a tax equivalent basis for proper comparison using
|
||||||||||||||||||||||||
a statutory federal income tax rate of 34%.
|
||||||||||||||||||||||||
(4) Income on non-accrual loans is accounted for on a cash basis, and the loan balances are included in interest-earning assets.
|
||||||||||||||||||||||||
(5) Interest rate spread represents the difference between the average rate earned on interest-earning assets
|
||||||||||||||||||||||||
and the average rate paid on interest-bearing liabilities.
|
|
Analysis of Average Balances and Interest Rates (1)
|
|||||||||||||||||||||||
|
Three Months Ended
|
|||||||||||||||||||||||
|
June 30, 2016
|
June 30, 2015
|
||||||||||||||||||||||
|
Average
|
Average
|
Average
|
Average
|
||||||||||||||||||||
|
Balance (1)
|
Interest
|
Rate
|
Balance (1)
|
Interest
|
Rate
|
||||||||||||||||||
(dollars in thousands)
|
$
|
$
|
%
|
$
|
$
|
%
|
||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
Short-term investments:
|
||||||||||||||||||||||||
Interest-bearing deposits at banks
|
31,880
|
30
|
0.38
|
19,879
|
10
|
0.19
|
||||||||||||||||||
Total short-term investments
|
31,880
|
30
|
0.38
|
19,879
|
10
|
0.19
|
||||||||||||||||||
Interest bearing time deposits at banks
|
7,332
|
34
|
1.85
|
5,960
|
29
|
1.97
|
||||||||||||||||||
Investment securities:
|
||||||||||||||||||||||||
Taxable
|
258,197
|
1,020
|
1.58
|
188,736
|
799
|
1.69
|
||||||||||||||||||
Tax-exempt (3)
|
101,428
|
1,144
|
4.51
|
97,443
|
1,212
|
4.98
|
||||||||||||||||||
Total investment securities
|
359,625
|
2,164
|
2.41
|
286,179
|
2,011
|
2.87
|
||||||||||||||||||
Loans:
|
||||||||||||||||||||||||
Residential mortgage loans
|
203,091
|
2,665
|
5.28
|
183,251
|
2,519
|
5.51
|
||||||||||||||||||
Construction
|
9,198
|
121
|
5.29
|
6,912
|
89
|
5.15
|
||||||||||||||||||
Commercial & farm loans
|
376,795
|
4,865
|
5.19
|
285,580
|
3,730
|
5.24
|
||||||||||||||||||
Loans to state & political subdivisions
|
101,348
|
1,058
|
4.20
|
84,776
|
936
|
4.43
|
||||||||||||||||||
Other loans
|
10,975
|
220
|
8.07
|
8,064
|
160
|
7.94
|
||||||||||||||||||
Loans, net of discount (2)(3)(4)
|
701,407
|
8,929
|
5.12
|
568,583
|
7,434
|
5.24
|
||||||||||||||||||
Total interest-earning assets
|
1,100,244
|
11,157
|
4.08
|
880,601
|
9,484
|
4.32
|
||||||||||||||||||
Cash and due from banks
|
7,530
|
3,988
|
||||||||||||||||||||||
Bank premises and equipment
|
17,236
|
12,611
|
||||||||||||||||||||||
Other assets
|
64,904
|
41,736
|
||||||||||||||||||||||
Total non-interest earning assets
|
89,670
|
58,335
|
||||||||||||||||||||||
Total assets
|
1,189,914
|
938,936
|
||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
NOW accounts
|
310,640
|
243
|
0.31
|
236,864
|
209
|
0.35
|
||||||||||||||||||
Savings accounts
|
173,176
|
46
|
0.11
|
114,764
|
35
|
0.12
|
||||||||||||||||||
Money market accounts
|
113,373
|
126
|
0.45
|
94,609
|
109
|
0.46
|
||||||||||||||||||
Certificates of deposit
|
272,809
|
657
|
0.97
|
250,091
|
682
|
1.09
|
||||||||||||||||||
Total interest-bearing deposits
|
869,998
|
1,072
|
0.50
|
696,328
|
1,035
|
0.60
|
||||||||||||||||||
Other borrowed funds
|
39,369
|
183
|
1.87
|
30,849
|
172
|
2.24
|
||||||||||||||||||
Total interest-bearing liabilities
|
909,367
|
1,255
|
0.55
|
727,177
|
1,207
|
0.67
|
||||||||||||||||||
Demand deposits
|
145,164
|
100,865
|
||||||||||||||||||||||
Other liabilities
|
12,642
|
8,441
|
||||||||||||||||||||||
Total non-interest-bearing liabilities
|
157,806
|
109,306
|
||||||||||||||||||||||
Stockholders' equity
|
122,741
|
102,453
|
||||||||||||||||||||||
Total liabilities & stockholders' equity
|
1,189,914
|
938,936
|
||||||||||||||||||||||
Net interest income
|
9,902
|
8,277
|
||||||||||||||||||||||
Net interest spread (5)
|
3.53
|
%
|
3.65
|
%
|
||||||||||||||||||||
Net interest income as a percentage
|
||||||||||||||||||||||||
of average interest-earning assets
|
3.62
|
%
|
3.77
|
%
|
||||||||||||||||||||
Ratio of interest-earning assets
|
||||||||||||||||||||||||
to interest-bearing liabilities
|
121
|
%
|
121
|
%
|
||||||||||||||||||||
|
||||||||||||||||||||||||
(1) Averages are based on daily averages.
|
||||||||||||||||||||||||
(2) Includes loan origination and commitment fees.
|
||||||||||||||||||||||||
(3) Tax exempt interest revenue is shown on a tax equivalent basis for proper comparison using
|
||||||||||||||||||||||||
a statutory federal income tax rate of 34%.
|
||||||||||||||||||||||||
(4) Income on non-accrual loans is accounted for on a cash basis, and the loan balances are included in interest-earning assets.
|
||||||||||||||||||||||||
(5) Interest rate spread represents the difference between the average rate earned on interest-earning assets
|
||||||||||||||||||||||||
and the average rate paid on interest-bearing liabilities.
|
|
For the Three Months
|
For the Six Months
|
||||||||||||||
|
Ended June 30,
|
Ended June 30,
|
||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
Interest and dividend income from investment securities
|
||||||||||||||||
and interest bearing deposits at banks (non-tax adjusted)
|
$
|
1,839
|
$
|
1,639
|
$
|
3,705
|
$
|
3,371
|
||||||||
Tax equivalent adjustment
|
389
|
411
|
787
|
849
|
||||||||||||
Interest and dividend income from investment securities
|
||||||||||||||||
and interest bearing deposits at banks (tax equivalent basis)
|
$
|
2,228
|
$
|
2,050
|
$
|
4,492
|
$
|
4,220
|
||||||||
|
||||||||||||||||
Interest and fees on loans (non-tax adjusted)
|
$
|
8,587
|
$
|
7,129
|
$
|
17,183
|
$
|
14,168
|
||||||||
Tax equivalent adjustment
|
342
|
305
|
717
|
601
|
||||||||||||
Interest and fees on loans (tax equivalent basis)
|
$
|
8,929
|
$
|
7,434
|
$
|
17,900
|
$
|
14,769
|
||||||||
|
||||||||||||||||
Total interest income
|
$
|
10,426
|
$
|
8,768
|
$
|
20,888
|
$
|
17,539
|
||||||||
Total interest expense
|
1,255
|
1,207
|
2,512
|
2,391
|
||||||||||||
Net interest income
|
9,171
|
7,561
|
18,376
|
15,148
|
||||||||||||
Total tax equivalent adjustment
|
731
|
716
|
1,504
|
1,450
|
||||||||||||
Net interest income (tax equivalent basis)
|
$
|
9,902
|
$
|
8,277
|
$
|
19,880
|
$
|
16,598
|
|
Three months ended June 30, 2016 vs. 2015 (1)
|
Six months ended June 30, 2016 vs. 2015 (1)
|
||||||||||||||||||||||
|
Change in
|
Change
|
Total
|
Change in
|
Change
|
Total
|
||||||||||||||||||
|
Volume
|
in Rate
|
Change
|
Volume
|
in Rate
|
Change
|
||||||||||||||||||
Interest Income:
|
||||||||||||||||||||||||
Short-term investments:
|
||||||||||||||||||||||||
Interest-bearing deposits at banks
|
$
|
7
|
$
|
13
|
$
|
20
|
$
|
26
|
$
|
27
|
$
|
53
|
||||||||||||
Interest bearing time deposits at banks
|
7
|
(2
|
)
|
5
|
14
|
(2
|
)
|
12
|
||||||||||||||||
Investment securities:
|
||||||||||||||||||||||||
Taxable
|
270
|
(49
|
)
|
221
|
515
|
(123
|
)
|
392
|
||||||||||||||||
Tax-exempt
|
53
|
(121
|
)
|
(68
|
)
|
21
|
(206
|
)
|
(185
|
)
|
||||||||||||||
Total investments
|
323
|
(170
|
)
|
153
|
536
|
(329
|
)
|
207
|
||||||||||||||||
Loans:
|
||||||||||||||||||||||||
Residential mortgage loans
|
246
|
(100
|
)
|
146
|
494
|
(214
|
)
|
280
|
||||||||||||||||
Construction
|
29
|
3
|
32
|
125
|
1
|
126
|
||||||||||||||||||
Commercial & agricultural loans
|
1,167
|
(32
|
)
|
1,135
|
2,360
|
(110
|
)
|
2,250
|
||||||||||||||||
Loans to state & political subdivisions
|
167
|
(45
|
)
|
122
|
437
|
(89
|
)
|
348
|
||||||||||||||||
Other loans
|
57
|
3
|
60
|
121
|
6
|
127
|
||||||||||||||||||
Total loans, net of discount
|
1,666
|
(171
|
)
|
1,495
|
3,537
|
(406
|
)
|
3,131
|
||||||||||||||||
Total Interest Income
|
2,003
|
(330
|
)
|
1,673
|
4,113
|
(710
|
)
|
3,403
|
||||||||||||||||
Interest Expense:
|
||||||||||||||||||||||||
Interest-bearing deposits:
|
||||||||||||||||||||||||
NOW accounts
|
53
|
(19
|
)
|
34
|
102
|
(41
|
)
|
61
|
||||||||||||||||
Savings accounts
|
15
|
(4
|
)
|
11
|
32
|
(6
|
)
|
26
|
||||||||||||||||
Money Market accounts
|
20
|
(3
|
)
|
17
|
45
|
(7
|
)
|
38
|
||||||||||||||||
Certificates of deposit
|
86
|
(111
|
)
|
(25
|
)
|
350
|
(373
|
)
|
(23
|
)
|
||||||||||||||
Total interest-bearing deposits
|
174
|
(137
|
)
|
37
|
529
|
(427
|
)
|
102
|
||||||||||||||||
Other borrowed funds
|
28
|
(17
|
)
|
11
|
46
|
(27
|
)
|
19
|
||||||||||||||||
Total interest expense
|
202
|
(154
|
)
|
48
|
575
|
(454
|
)
|
121
|
||||||||||||||||
Net interest income
|
$
|
1,801
|
$
|
(176
|
)
|
$
|
1,625
|
$
|
3,538
|
$
|
(256
|
)
|
$
|
3,282
|
||||||||||
|
||||||||||||||||||||||||
(1) The portion of the total change attributable to both volume and rate changes, which can not be separated, has been allocated proportionally to the change due to volume and the change due to rate prior to allocation.
|
·
|
The average balance of taxable securities increased by $68.2 million which resulted in an increase in investment income of $515,000. The increase in the average balance of taxable securities was due to the acquisition of FNB and purchases made to utilize some of the excess liquidity acquired as part of the acquisition. The yield on taxable securities decreased 14 basis points from 1.69% to 1.55% as a result of purchases made in this low rate environment, which included securities acquired as part of the FNB acquisition.
|
·
|
The yield on tax-exempt securities decreased 41 basis points from 5.00% to 4.59%, which corresponds to a decrease in interest income of $206,000. The yield decrease was due to the amount of purchases we made in the current low interest rate environment. For a discussion of the Company's current investment strategy, see the "Financial Condition – Investments". Offsetting this decrease in yield, the average balance of tax-exempt securities increased $841,000 resulting in an increase in investment income of $21,000.
|
·
|
The average balance of commercial and agricultural loans increased $90.2 million from a year ago. This had a positive impact of $2,360,000 on total interest income due to volume, which was offset by a decrease of $110,000 due to rate, as the yield earned decreased from 5.30% to 5.22% due to the continued low rate environment and the assets acquired as part of the FNB acquisition, which have a lower yield than our historical portfolio.
|
·
|
The average balance of state and political subdivision loans increased $20.7 million from a year ago as a result of the FNB acquisition. This had a positive impact of $437,000 on total interest income due to volume. Offsetting this increase, the yield decreased 23 basis points to 4.27%, which decreased loan interest income $89,000.
|
·
|
Interest income on residential mortgage loans increased $280,000. The average balance of residential loans increased $19.0 million from a year ago due to the FNB acquisition. This resulted in an increase in loan interest income of $494,000. Offsetting the increase, the yield earned on residential loans decreased 26 basis points compared to 2015, which corresponds to a decrease in interest income of $214,000.
|
·
|
The average balance of interest bearing deposits increased $179.7 million from June 30, 2015 to June 30, 2016. Increases were experienced in NOW accounts of $72.2 million, savings accounts of $61.4 million, money market accounts of $20.0 million and certificates of deposit of $26.1 million. The cumulative effect of these increases was an increase in interest expense of $529,000, which was primarily driven by the FNB acquisition. (see also "Financial Condition – Deposits").
|
·
|
There was a decrease in the average rate on certificates of deposit from 1.09% to 0.97% resulting in a decrease in interest expense of $373,000.
|
·
|
Total investment income increased by $153,000 compared to same period last year. The primary cause of the increase was an increase of $69.5 million in the average outstanding balance of taxable securities, which equates to an increase of $270,000. Offsetting this increase, there was a 47 point decrease in rate on tax exempt investments from 4.98% to 4.51%, which equates to a $121,000 decrease in income.
|
·
|
Total loan interest income increased $1,495,000 compared to the same period last year. This was primarily due to an increase in volume of $132.8 million, which corresponds to a $1,666,000 increase in interest income. This was offset by a decrease in rate of 12 points from 5.24% to 5.12%, which corresponds to a decrease in loan interest income of $171,000.
|
|
Six months ended June 30,
|
Change
|
||||||||||||||
|
2016
|
2015
|
Amount
|
%
|
||||||||||||
Service charges
|
$
|
2,230
|
$
|
2,004
|
$
|
226
|
11.3
|
|||||||||
Trust
|
378
|
374
|
4
|
1.1
|
||||||||||||
Brokerage and insurance
|
367
|
382
|
(15
|
)
|
(3.9
|
)
|
||||||||||
Gains on loans sold
|
116
|
98
|
18
|
18.4
|
||||||||||||
Investment securities gains, net
|
155
|
301
|
(146
|
)
|
(48.5
|
)
|
||||||||||
Earnings on bank owned life insurance
|
342
|
306
|
36
|
11.8
|
||||||||||||
Other
|
311
|
218
|
93
|
42.7
|
||||||||||||
Total
|
$
|
3,899
|
$
|
3,683
|
$
|
216
|
5.9
|
|
Three months ended June 30,
|
Change
|
||||||||||||||
|
2016
|
2015
|
Amount
|
%
|
||||||||||||
Service charges
|
$
|
1,128
|
$
|
1,028
|
$
|
100
|
9.7
|
|||||||||
Trust
|
182
|
180
|
2
|
1.1
|
||||||||||||
Brokerage and insurance
|
158
|
255
|
(97
|
)
|
(38.0
|
)
|
||||||||||
Gains on loans sold
|
70
|
60
|
10
|
16.7
|
||||||||||||
Investment securities gains, net
|
128
|
175
|
(47
|
)
|
(26.9
|
)
|
||||||||||
Earnings on bank owned life insurance
|
172
|
154
|
18
|
11.7
|
||||||||||||
Other
|
145
|
103
|
42
|
40.8
|
||||||||||||
Total
|
$
|
1,983
|
$
|
1,955
|
$
|
28
|
1.4
|
Six months ended
|
||||||||||||||||
|
June 30,
|
Change
|
||||||||||||||
|
2016
|
2015
|
Amount
|
%
|
||||||||||||
Salaries and employee benefits
|
$
|
7,782
|
$
|
6,049
|
$
|
1,733
|
28.6
|
|||||||||
Occupancy
|
900
|
717
|
183
|
25.5
|
||||||||||||
Furniture and equipment
|
328
|
215
|
113
|
52.6
|
||||||||||||
Professional fees
|
553
|
412
|
141
|
34.2
|
||||||||||||
FDIC insurance
|
317
|
232
|
85
|
36.6
|
||||||||||||
Pennsylvania shares tax
|
390
|
401
|
(11
|
)
|
(2.7
|
)
|
||||||||||
Amortization of intangibles
|
164
|
-
|
164
|
NA
|
||||||||||||
ORE expenses
|
305
|
358
|
(53
|
)
|
(14.8
|
)
|
||||||||||
Other
|
3,474
|
2,379
|
1,095
|
46.0
|
||||||||||||
Total
|
$
|
14,213
|
$
|
10,763
|
$
|
3,450
|
32.1
|
Three months ended
|
||||||||||||||||
|
June 30,
|
Change
|
||||||||||||||
|
2016
|
2015
|
Amount
|
%
|
||||||||||||
Salaries and employee benefits
|
$
|
3,900
|
$
|
2,993
|
$
|
907
|
30.3
|
|||||||||
Occupancy
|
455
|
348
|
107
|
30.7
|
||||||||||||
Furniture and equipment
|
171
|
87
|
84
|
96.6
|
||||||||||||
Professional fees
|
266
|
180
|
86
|
47.8
|
||||||||||||
FDIC insurance
|
160
|
116
|
44
|
37.9
|
||||||||||||
Pennsylvania shares tax
|
240
|
200
|
40
|
|
20.0
|
|
||||||||||
Amortization of intangibles
|
82
|
-
|
82
|
NA
|
||||||||||||
ORE expenses
|
212
|
357
|
(145
|
)
|
(40.6
|
)
|
||||||||||
Other
|
1,815
|
1,147
|
668
|
58.2
|
||||||||||||
Total
|
$
|
7,301
|
$
|
5,428
|
$
|
1,873
|
34.5
|
June 30, 2016
|
December 31, 2015
|
|||||||||||||||
|
Amount
|
%
|
Amount
|
%
|
||||||||||||
Available-for-sale:
|
||||||||||||||||
U. S. Agency securities
|
$
|
205,819
|
57.0
|
$
|
199,591
|
55.5
|
||||||||||
U. S. Treasury notes
|
5,053
|
1.4
|
10,082
|
2.8
|
||||||||||||
Obligations of state & political
|
||||||||||||||||
subdivisions
|
104,472
|
28.9
|
102,863
|
28.6
|
||||||||||||
Corporate obligations
|
11,480
|
3.2
|
14,565
|
4.0
|
||||||||||||
Mortgage-backed securities in
|
||||||||||||||||
government sponsored entities
|
31,606
|
8.8
|
30,204
|
8.4
|
||||||||||||
Equity securities in financial
|
||||||||||||||||
institutions
|
2,514
|
0.7
|
2,432
|
0.7
|
||||||||||||
Total
|
$
|
360,944
|
100.0
|
$
|
359,737
|
100.0
|
||||||||||
June 30, 2016/
|
||||||||||||||||
December 31, 2015
|
||||||||||||||||
Change
|
||||||||||||||||
|
Amount
|
%
|
||||||||||||||
Available-for-sale:
|
||||||||||||||||
U. S. Agency securities
|
$
|
6,228
|
3.1
|
|||||||||||||
U. S. Treasury notes
|
(5,029
|
)
|
(49.9
|
)
|
||||||||||||
Obligations of state & political
|
||||||||||||||||
subdivisions
|
1,609
|
1.6
|
||||||||||||||
Corporate obligations
|
(3,085
|
)
|
(21.2
|
)
|
||||||||||||
Mortgage-backed securities in
|
||||||||||||||||
government sponsored entities
|
1,402
|
4.6
|
||||||||||||||
Equity securities in financial
|
||||||||||||||||
institutions
|
82
|
3.4
|
||||||||||||||
Total
|
$
|
1,207
|
0.3
|
|
June 30,
|
December 31,
|
||||||||||||||
|
2016
|
2015
|
||||||||||||||
|
Amount
|
%
|
Amount
|
%
|
||||||||||||
Real estate:
|
||||||||||||||||
Residential
|
$
|
203,980
|
28.8
|
$
|
203,407
|
29.3
|
||||||||||
Commercial
|
246,895
|
34.8
|
237,542
|
34.2
|
||||||||||||
Agricultural
|
62,392
|
8.8
|
57,822
|
8.3
|
||||||||||||
Construction
|
10,481
|
1.5
|
15,011
|
2.2
|
||||||||||||
Consumer
|
11,439
|
1.6
|
11,543
|
1.7
|
||||||||||||
Other commercial and agricultural loans
|
74,089
|
10.4
|
71,206
|
10.2
|
||||||||||||
State & political subdivision loans
|
99,839
|
14.1
|
98,500
|
14.1
|
||||||||||||
Total loans
|
709,115
|
100.0
|
695,031
|
100.0
|
||||||||||||
Less allowance for loan losses
|
7,359
|
7,106
|
||||||||||||||
Net loans
|
$
|
701,756
|
$
|
687,925
|
||||||||||||
|
||||||||||||||||
|
June 30, 2016/
|
|||||||||||||||
|
December 31, 2015
|
|||||||||||||||
|
Change
|
|||||||||||||||
|
Amount
|
%
|
||||||||||||||
Real estate:
|
||||||||||||||||
Residential
|
$
|
573
|
0.3
|
|||||||||||||
Commercial
|
9,353
|
3.9
|
||||||||||||||
Agricultural
|
4,570
|
7.9
|
||||||||||||||
Construction
|
(4,530
|
)
|
(30.2
|
)
|
||||||||||||
Consumer
|
(104
|
)
|
(0.9
|
)
|
||||||||||||
Other commercial and agricultural loans
|
2,883
|
4.0
|
||||||||||||||
State & political subdivision loans
|
1,339
|
1.4
|
||||||||||||||
Total loans
|
$
|
14,084
|
2.0
|
|
June 30,
|
December 31,
|
||||||||||||||||||
|
2016
|
2015
|
2014
|
2013
|
2012
|
|||||||||||||||
Balance
|
||||||||||||||||||||
at beginning of period
|
$
|
7,106
|
$
|
6,815
|
$
|
7,098
|
$
|
6,784
|
$
|
6,487
|
||||||||||
Charge-offs:
|
||||||||||||||||||||
Real estate:
|
||||||||||||||||||||
Residential
|
43
|
66
|
97
|
17
|
95
|
|||||||||||||||
Commercial
|
-
|
84
|
516
|
62
|
2
|
|||||||||||||||
Agricultural
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Consumer
|
38
|
47
|
47
|
54
|
54
|
|||||||||||||||
Other commercial and agricultural loans
|
18
|
41
|
250
|
1
|
21
|
|||||||||||||||
Total loans charged-off
|
99
|
238
|
910
|
134
|
172
|
|||||||||||||||
Recoveries:
|
||||||||||||||||||||
Real estate:
|
||||||||||||||||||||
Residential
|
-
|
-
|
-
|
5
|
-
|
|||||||||||||||
Commercial
|
8
|
14
|
15
|
5
|
9
|
|||||||||||||||
Agricultural
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Consumer
|
68
|
33
|
27
|
33
|
33
|
|||||||||||||||
Other commercial and agricultural loans
|
6
|
2
|
-
|
-
|
7
|
|||||||||||||||
Total loans recovered
|
82
|
49
|
42
|
43
|
49
|
|||||||||||||||
|
||||||||||||||||||||
Net loans charged-off
|
17
|
189
|
868
|
91
|
123
|
|||||||||||||||
Provision charged to expense
|
270
|
480
|
585
|
405
|
420
|
|||||||||||||||
Balance at end of year
|
$
|
7,359
|
$
|
7,106
|
$
|
6,815
|
$
|
7,098
|
$
|
6,784
|
||||||||||
|
||||||||||||||||||||
Loans outstanding at end of period
|
$
|
709,115
|
$
|
695,031
|
$
|
554,105
|
$
|
540,612
|
$
|
502,463
|
||||||||||
Average loans outstanding, net
|
$
|
699,896
|
$
|
577,992
|
$
|
540,541
|
$
|
516,748
|
$
|
496,822
|
||||||||||
Non-performing assets:
|
||||||||||||||||||||
Non-accruing loans
|
$
|
10,206
|
$
|
6,531
|
$
|
6,599
|
$
|
8,097
|
$
|
8,067
|
||||||||||
Accrual loans - 90 days or more past due
|
1,104
|
623
|
836
|
697
|
506
|
|||||||||||||||
Total non-performing loans
|
$
|
11,310
|
$
|
7,154
|
$
|
7,435
|
$
|
8,794
|
$
|
8,573
|
||||||||||
Foreclosed assets held for sale
|
1,558
|
1,354
|
1,792
|
1,360
|
616
|
|||||||||||||||
Total non-performing assets
|
$
|
12,868
|
$
|
8,508
|
$
|
9,227
|
$
|
10,154
|
$
|
9,189
|
||||||||||
|
||||||||||||||||||||
Annualized net charge-offs to average loans
|
0.00
|
%
|
0.03
|
%
|
0.16
|
%
|
0.02
|
%
|
0.02
|
%
|
||||||||||
Allowance to total loans
|
1.04
|
%
|
1.02
|
%
|
1.23
|
%
|
1.31
|
%
|
1.35
|
%
|
||||||||||
Allowance to total non-performing loans
|
65.07
|
%
|
99.33
|
%
|
91.66
|
%
|
80.71
|
%
|
79.13
|
%
|
||||||||||
Non-performing loans as a percent of loans
|
||||||||||||||||||||
net of unearned income
|
1.59
|
%
|
1.03
|
%
|
1.34
|
%
|
1.63
|
%
|
1.71
|
%
|
||||||||||
Non-performing assets as a percent of loans
|
||||||||||||||||||||
net of unearned income
|
1.81
|
%
|
1.22
|
%
|
1.67
|
%
|
1.88
|
%
|
1.83
|
%
|
|
June 30,
|
December 31
|
||||||||||||||||||||||||||||||||||||||
|
2016
|
2015
|
2014
|
2013
|
2012
|
|||||||||||||||||||||||||||||||||||
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
||||||||||||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||||||||||||||||||
Residential
|
$
|
990
|
28.8
|
$
|
905
|
29.3
|
$
|
878
|
33.5
|
$
|
946
|
34.6
|
$
|
875
|
35.4
|
|||||||||||||||||||||||||
Commercial, agricultural
|
3,919
|
43.6
|
3,785
|
42.5
|
3,870
|
38.9
|
4,558
|
39.8
|
4,437
|
38.8
|
||||||||||||||||||||||||||||||
Construction
|
18
|
1.5
|
24
|
2.2
|
26
|
1.1
|
50
|
1.7
|
38
|
2.4
|
||||||||||||||||||||||||||||||
Consumer
|
104
|
1.6
|
102
|
1.7
|
84
|
1.5
|
105
|
1.7
|
119
|
2.1
|
||||||||||||||||||||||||||||||
Other commercial and agricultural loans
|
1,564
|
10.4
|
1,305
|
10.2
|
1,224
|
10.6
|
942
|
10.0
|
728
|
9.5
|
||||||||||||||||||||||||||||||
State & political subdivision loans
|
764
|
14.1
|
593
|
14.1
|
545
|
14.4
|
330
|
12.2
|
271
|
11.8
|
||||||||||||||||||||||||||||||
Unallocated
|
-
|
N/
|
A
|
392
|
N/
|
A
|
188
|
N/
|
A
|
167
|
N/
|
A
|
316
|
N/
|
A
|
|||||||||||||||||||||||||
Total allowance for loan losses
|
$
|
7,359
|
100.0
|
$
|
7,106
|
100.0
|
$
|
6,815
|
100.0
|
$
|
7,098
|
100.0
|
$
|
6,784
|
100.0
|
|
June 30, 2016
|
December 31, 2015
|
||||||||||||||||||||||||||||||
|
Non-Performing Loans
|
Non-Performing Loans
|
||||||||||||||||||||||||||||||
|
30 - 89 Days
|
30 - 89 Days
|
||||||||||||||||||||||||||||||
|
Past Due
|
90 Days Past
|
Non-
|
Total Non-
|
Past Due
|
90 Days Past
|
Non-
|
Total Non-
|
||||||||||||||||||||||||
(in thousands)
|
Accruing
|
Due Accruing
|
accrual
|
Performing
|
Accruing
|
Due Accruing
|
accrual
|
Performing
|
||||||||||||||||||||||||
Real estate:
|
||||||||||||||||||||||||||||||||
Residential
|
$
|
1,817
|
$
|
219
|
$
|
1,385
|
$
|
1,604
|
$
|
1,273
|
$
|
394
|
$
|
1,008
|
$
|
1,402
|
||||||||||||||||
Commercial
|
1,402
|
461
|
4,711
|
5,172
|
859
|
60
|
4,422
|
4,482
|
||||||||||||||||||||||||
Agricultural
|
251
|
165
|
29
|
194
|
344
|
-
|
34
|
34
|
||||||||||||||||||||||||
Construction
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Consumer
|
243
|
9
|
39
|
48
|
262
|
9
|
55
|
64
|
||||||||||||||||||||||||
Other commercial and
|
||||||||||||||||||||||||||||||||
agricultural loans
|
218
|
250
|
4,042
|
4,292
|
319
|
160
|
1,012
|
1,172
|
||||||||||||||||||||||||
Total nonperforming loans
|
$
|
3,931
|
$
|
1,104
|
$
|
10,206
|
$
|
11,310
|
$
|
3,057
|
$
|
623
|
$
|
6,531
|
$
|
7,154
|
|
Change in Non-Performing Loans June 30, 2016/
|
|||||||
|
December 31, 2015
|
|||||||
(in thousands)
|
Amount
|
%
|
||||||
Real estate:
|
||||||||
Residential
|
$
|
202
|
14.4
|
|||||
Commercial
|
690
|
15.4
|
||||||
Agricultural
|
160
|
470.6
|
||||||
Construction
|
-
|
N/
|
A
|
|||||
Consumer
|
(16
|
)
|
(25.0
|
)
|
||||
Other commercial and
|
||||||||
agricultural loans
|
3,120
|
266.2
|
||||||
Total nonperforming loans
|
$
|
4,156
|
58.1
|
·
|
A commercial customer with a total loan relationship of $3.7 million secured by undeveloped land, stone quarries and equipment was on non-accrual status as of June 30, 2016. The slowdown in the exploration for natural gas has significantly impacted the cash flows of the customer, who provided excavation services and stone for pad construction related to these activities. Management reviewed the collateral and determined that no specific reserve was required as of June 30, 2016.
|
·
|
A commercial customer with a total loan relationship of $3.1 million secured by approximately 160 residential properties was on non-accrual status as of June 30, 2016. In the first quarter of 2011, the Company and borrower entered into a forbearance agreement to restructure the debt. In July of 2013, the customer filed for bankruptcy under Chapter 11 and a Trustee was appointed in January of 2014. In 2015, the Trustee decreased the loan payments below what was agreed to in the forbearance agreement. This decrease is currently being litigated in bankruptcy court. As a result of the decrease, the relationship has become more than 90 days past due. In the second quarter of 2016, the Company began the process of appraising the underlying collateral. As of June 30, 2016, approximately 75% of the appraisals ordered have been received. The appraisals received have indicated a slight decrease in collateral values compared to the appraisals ordered for the loan origination, however, the loan is still considered well secured on a loan to value basis. We continue to monitor the bankruptcy proceedings to identify potential changes in the customer's operations and the impact these would have on the loan payments for our loans to the customer and the underlying collateral that supports these loans. As of June 30, 2016, there is no specific reserve for this relationship.
|
·
|
A commercial customer with a relationship of approximately $435,000 after a charge-off of $463,000 during the second quarter of 2014, secured by real estate was on non-accrual status as of June 30, 2016. The current economic conditions have significantly impacted the cash flows from the customer's activities. Management reviewed the collateral and in the second quarter of 2014 charged-off of a portion of the balance associated with this customer, which was based on the appraised value of collateral and as a result there is no specific reserve as of June 30, 2016. The customer is currently working with another financial institution to refinance the loan, which is expected to close in the third quarter of 2016.
|
·
|
A commercial customer with a relationship of approximately $420,000 secured by vacant real estate and accounts receivable was on non-accrual status as of June 30, 2016. The slowdown in the exploration for natural gas has significantly impacted the cash flows of the customer, who provided trucking services related to these activities. Management reviewed the collateral and determined that a specific reserve of $197,000 was required as of June 30, 2016.
|
·
|
Two loan relationships comprises 60.6% of the non-performing loan balance, whose debt is well collateralized as of June 30, 2016.
|
·
|
Net and gross charge-offs have returned to their low historical rate of .03% in 2015 and have remained low in 2016.
|
·
|
Real estate values in the Bank's primary market areas have only decreased slightly with the decrease in the market price for natural gas.
|
|
June 30,
|
December 31,
|
||||||||||||||
|
2016
|
2015
|
||||||||||||||
|
Amount
|
%
|
Amount
|
%
|
||||||||||||
Non-interest-bearing deposits
|
$
|
142,327
|
14.2
|
$
|
150,960
|
15.3
|
||||||||||
NOW accounts
|
299,130
|
29.8
|
279,655
|
28.3
|
||||||||||||
Savings deposits
|
169,990
|
16.9
|
170,277
|
17.2
|
||||||||||||
Money market deposit accounts
|
123,146
|
12.3
|
105,229
|
10.7
|
||||||||||||
Certificates of deposit
|
268,889
|
26.8
|
281,910
|
28.5
|
||||||||||||
Total
|
$
|
1,003,482
|
100.0
|
$
|
988,031
|
100.0
|
|
June 30, 2016/
|
|||||||
|
December 31, 2015
|
|||||||
|
Change
|
|||||||
|
Amount
|
%
|
||||||
Non-interest-bearing deposits
|
$
|
(8,633
|
)
|
(5.7
|
)
|
|||
NOW accounts
|
19,475
|
7.0
|
||||||
Savings deposits
|
(287
|
)
|
(0.2
|
)
|
||||
Money market deposit accounts
|
17,917
|
17.0
|
||||||
Certificates of deposit
|
(13,021
|
)
|
(4.6
|
)
|
||||
Total
|
$
|
15,451
|
1.6
|
|
Actual
|
For Capital Adequacy Purposes
|
To Be Well Capitalized
Under Prompt Corrective
Action Provisions
|
|||||||||||||||||||||
June 30, 2016
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
Total Capital (to Risk Weighted Assets):
|
||||||||||||||||||||||||
Company
|
$
|
117,683
|
16.16
|
%
|
$
|
58,248
|
8.00
|
%
|
$
|
72,810
|
10.00
|
%
|
||||||||||||
Bank
|
$
|
112,026
|
15.43
|
%
|
$
|
58,077
|
8.00
|
%
|
$
|
72,596
|
10.00
|
%
|
||||||||||||
|
||||||||||||||||||||||||
Tier 1 Capital (to Risk Weighted Assets):
|
||||||||||||||||||||||||
Company
|
$
|
109,928
|
15.10
|
%
|
$
|
43,686
|
6.00
|
%
|
$
|
58,248
|
8.00
|
%
|
||||||||||||
Bank
|
$
|
104,450
|
14.39
|
%
|
$
|
43,558
|
6.00
|
%
|
$
|
58,077
|
8.00
|
%
|
||||||||||||
|
||||||||||||||||||||||||
Common Equity Tier 1 Capital (to Risk Weighted Assets):
|
||||||||||||||||||||||||
Company
|
$
|
102,428
|
14.07
|
%
|
$
|
32,765
|
4.50
|
%
|
$
|
47,327
|
6.50
|
%
|
||||||||||||
Bank
|
$
|
104,450
|
14.39
|
%
|
$
|
32,668
|
4.50
|
%
|
$
|
47,188
|
6.50
|
%
|
||||||||||||
|
||||||||||||||||||||||||
Tier 1 Capital (to Average Assets):
|
||||||||||||||||||||||||
Company
|
$
|
109,928
|
9.40
|
%
|
$
|
46,793
|
4.00
|
%
|
$
|
58,491
|
5.00
|
%
|
||||||||||||
Bank
|
$
|
104,450
|
8.95
|
%
|
$
|
46,691
|
4.00
|
%
|
$
|
58,364
|
5.00
|
%
|
|
Actual
|
For Capital Adequacy Purposes
|
To Be Well Capitalized Under Prompt Corrective
Action Provisions
|
|||||||||||||||||||||
December 31, 2015
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
Total Capital (to Risk Weighted Assets):
|
||||||||||||||||||||||||
Company
|
$
|
114,886
|
16.23
|
%
|
$
|
56,630
|
8.00
|
%
|
$
|
70,787
|
10.00
|
%
|
||||||||||||
Bank
|
$
|
108,232
|
15.34
|
%
|
$
|
56,443
|
8.00
|
%
|
$
|
70,554
|
10.00
|
%
|
||||||||||||
|
||||||||||||||||||||||||
Tier 1 Capital (to Risk Weighted Assets):
|
||||||||||||||||||||||||
Company
|
$
|
107,612
|
15.20
|
%
|
$
|
42,472
|
6.00
|
%
|
$
|
56,630
|
8.00
|
%
|
||||||||||||
Bank
|
$
|
100,958
|
14.31
|
%
|
$
|
42,332
|
6.00
|
%
|
$
|
56,443
|
8.00
|
%
|
||||||||||||
|
||||||||||||||||||||||||
Common Equity Tier 1 Capital (to Risk Weighted Assets):
|
||||||||||||||||||||||||
Company
|
$
|
100,112
|
14.14
|
%
|
$
|
31,854
|
4.50
|
%
|
$
|
46,012
|
6.50
|
%
|
||||||||||||
Bank
|
$
|
100,958
|
14.31
|
%
|
$
|
31,749
|
4.50
|
%
|
$
|
45,860
|
6.50
|
%
|
||||||||||||
|
||||||||||||||||||||||||
Tier 1 Capital (to Average Assets):
|
||||||||||||||||||||||||
Company
|
$
|
107,612
|
11.01
|
%
|
$
|
39,083
|
4.00
|
%
|
$
|
48,854
|
5.00
|
%
|
||||||||||||
Bank
|
$
|
100,958
|
10.35
|
%
|
$
|
39,006
|
4.00
|
%
|
$
|
48,757
|
5.00
|
%
|
|
June 30, 2016
|
December 31, 2015
|
||||||
Commitments to extend credit
|
$
|
186,943
|
$
|
143,134
|
||||
Standby letters of credit
|
13,884
|
13,751
|
||||||
|
$
|
200,827
|
$
|
156,885
|
|
Change In
|
% Change In
|
||||||||||
|
Prospective One-Year
|
Prospective
|
Prospective
|
|||||||||
Changes in Rates
|
Net Interest Income
|
Net Interest Income
|
Net Interest Income
|
|||||||||
|
||||||||||||
-100 Shock
|
$
|
35,090
|
$
|
(757
|
)
|
(2.11
|
)
|
|||||
Base
|
35,847
|
-
|
-
|
|||||||||
+100 Shock
|
35,293
|
(554
|
)
|
(1.55
|
)
|
|||||||
+200 Shock
|
34,816
|
(1,031
|
)
|
(2.88
|
)
|
|||||||
+300 Shock
|
34,157
|
(1,690
|
)
|
(4.71
|
)
|
|||||||
+400 Shock
|
33,400
|
(2,447
|
)
|
(6.83
|
)
|
ISSUER PURCHASES OF EQUITY SECURITIES
|
||||||||||||||||
|
||||||||||||||||
Period
|
Total Number of Shares (or units Purchased)
|
Average Price Paid per Share (or Unit)
|
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans of Programs
|
Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (1)
|
||||||||||||
4/1/16 to 4/30/16
|
29
|
$
|
47.00
|
29
|
155,610
|
|||||||||||
5/1/16 to 5/31/16
|
7,271
|
$
|
47.78
|
7,271
|
148,339
|
|||||||||||
6/1/16 to 6/30/16
|
5,717
|
$
|
47.65
|
5,717
|
142,622
|
|||||||||||
Total
|
13,017
|
$
|
47.72
|
13,017
|
142,622
|
(1)
|
On October 20, 2015, the Company announced that the Board of Directors authorized the Company to repurchase up to an additional 150,000 shares. The repurchases will be conducted through open-market purchases or privately negotiated transactions and will be made from time to time depending on market conditions and other factors. No time limit was placed on the duration of the share repurchase program. Any repurchased shares will be held as treasury stock and will be available for general corporate purposes.
|
3.1
|
Articles of Incorporation of Citizens Financial Services, Inc., as amended (1)
|
||
3.2
|
Bylaws of Citizens Financial Services, Inc.(2)
|
||
4.1
|
Form of Common Stock Certificate.(3)
|
||
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
||
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
32.1
|
Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
|
||
101 **
|
The following materials from the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2016, formatted in XBRL (Extensible Business Reporting Language): (i) The Consolidated Balance Sheet (unaudited), (ii) the Consolidated Statement of Income (unaudited), (iii) the Consolidated Statement of Comprehensive Income (unaudited), (iv) the Consolidated Statement of Cash Flows (unaudited) and (v) related notes (unaudited).
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Citizens Financial Services, Inc. | |||
August 4, 2016
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By:
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/s/ Randall E. Black | |
Randall E. Black | |||
President and Chief Executive Officer
(Principal Executive Officer)
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|||
August 4, 2016
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By:
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/s/ Mickey L. Jones | |
Mickey L. Jones | |||
Chief Financial Officer
(Principal Accounting Officer)
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|||
August 4, 2016
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By:
|
/s/ Randall E. Black | |
Randall E. Black | |||
President and Chief Executive Officer
(Principal Executive Officer)
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|||
August 4, 2016
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By:
|
/s/ Mickey L. Jones | |
Mickey L. Jones | |||
Chief Financial Officer
(Principal Accounting Officer)
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|||
1.
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The Report fully complies with the requirements of section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods covered in the Report.
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|||
August 4, 2016
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By:
|
/s/ Randall E. Black | |
Randall E. Black | |||
President and Chief Executive Officer
(Principal Executive Officer)
|
|||
August 4, 2016
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By:
|
/s/ Mickey L. Jones | |
Mickey L. Jones | |||
Chief Financial Officer
(Principal Accounting Officer)
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|||
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jul. 26, 2016 |
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Document and Entity Information [Abstract] | ||
Entity Registrant Name | CITIZENS FINANCIAL SERVICES INC | |
Entity Central Index Key | 0000739421 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 3,349,753 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2016 |
CONSOLIDATED BALANCE SHEET (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
ASSETS: | ||
Loans, allowance for loan losses | $ 7,359 | $ 7,106 |
STOCKHOLDERS' EQUITY: | ||
Preferred Stock, par value (in dollars per share) | $ 1.00 | $ 1.00 |
Preferred Stock, authorized (in shares) | 3,000,000 | 3,000,000 |
Preferred Stock, issued (in shares) | 0 | 0 |
Common Stock, par value (in dollars per share) | $ 1.00 | $ 1.00 |
Common Stock, authorized (in shares) | 15,000,000 | 15,000,000 |
Common Stock, issued (in shares) | 3,704,375 | 3,671,751 |
Treasury stock, shares (in shares) | 358,921 | 335,876 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED) [Abstract] | ||||
Net income | $ 3,031 | $ 3,189 | $ 6,314 | $ 6,309 |
Other comprehensive income (loss): | ||||
Unrealized gains on available for sale securities | 1,794 | (2,049) | 3,489 | (704) |
Income tax effect | (610) | 698 | (1,188) | 240 |
Change in unrecognized pension cost | 60 | 54 | 121 | 102 |
Income tax effect | (21) | (19) | (42) | (35) |
Less: Reclassification adjustment for investment security gains included in net income | (128) | (175) | (155) | (301) |
Income tax effect | 44 | 59 | 53 | 102 |
Other comprehensive income (loss), net of tax | 1,139 | (1,432) | 2,278 | (596) |
Comprehensive income | $ 4,170 | $ 1,757 | $ 8,592 | $ 5,713 |
Basis of Presentation |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note 1 - Basis of Presentation Citizens Financial Services, Inc. (individually and collectively with its direct and indirect subsidiaries, the "Company") is a Pennsylvania corporation organized as the holding company of its wholly owned subsidiary, First Citizens Community Bank (the "Bank"), and the Bank's wholly owned subsidiary, First Citizens Insurance Agency, Inc. ("First Citizens Insurance"). On December 11, 2015, the Company completed its acquisition of The First National Bank of Fredericksburg (FNB) by merging FNB into the Bank. The accompanying consolidated financial statements have been prepared pursuant to rules and regulations of the Securities and Exchange Commission ("SEC") and in conformity with U.S. generally accepted accounting principles. Because this report is based on an interim period, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. Certain of the prior year amounts have been reclassified to conform with the current year presentation. Such reclassifications had no effect on net income or stockholders' equity. All material inter‑company balances and transactions have been eliminated in consolidation. In the opinion of management of the Company, the accompanying interim financial statements at June 30, 2016 and for the periods ended June 30, 2016 and 2015 include all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the financial condition and the results of operations for the periods. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. The financial performance reported for the Company for the six month period ended June 30, 2016 is not necessarily indicative of the results to be expected for the full year. This information should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2015. |
Earnings per Share |
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Earnings per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share | Note 2 - Earnings per Share The following table sets forth the computation of earnings per share. Earnings per share calculations give retroactive effect to stock dividends declared by the Company.
For the three months ended June 30, 2016 and 2015, there were 4,521 and 3,287 shares, respectively, related to the restricted stock plan that were excluded from the diluted earnings per share calculations since they were anti-dilutive. These anti-dilutive shares had prices ranging from $46.69-$53.15 for the three month period ended June 30, 2016 and prices ranging from $44.50-$53.15 for the three month period ended June 30, 2015. For the six months ended June 30, 2016 and 2015, 4,521 and 3,287 shares, respectively, related to the restricted stock plan were excluded from the diluted earnings per share calculations since they were anti-dilutive. These anti-dilutive shares had prices ranging from $46.69-$53.15 for the six month period ended June 30, 2016 and prices ranging from $44.50-$53.15 for the six month period ended June 30, 2015. |
Income Tax Expense |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Income Tax Expense [Abstract] | |
Income Tax Expense | Note 3 - Income Tax Expense Income tax expense is less than the amount calculated using the statutory tax rate, primarily as a result of tax-exempt income earned from state and municipal securities and loans and investments in affordable housing tax credits. Investments in Qualified Affordable Housing Projects As of June 30, 2016 and December 31, 2015, the Company was invested in four partnerships that provide affordable housing. The balance of the investments, which is included within other assets in the Consolidated Balance Sheet, was $829,000 and $959,000 as of June 30, 2016 and December 31, 2015, respectively. Investments purchased prior to January 1, 2015, are accounted for utilizing the effective yield method. As of June 30, 2016, the Company has $945,000 of tax credits remaining that will be recognized over 6.4 years. Tax credits of $49,000 were recognized as a reduction of tax expense during the three months ended June 30, 2016 and 2015. Tax credits of $99,000 were recognized as a reduction of tax expense during the six months ended June 30, 2016 and 2015. |
Investments |
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Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Note 4 – Investments The amortized cost, gross unrealized gains and losses, and fair value of investment securities at June 30, 2016 and December 31, 2015 were as follows (in thousands):
The following table shows the Company's gross unrealized losses and fair value of the Company's investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time, which individual securities have been in a continuous unrealized loss position, at June 30, 2016 and December 31, 2015 (in thousands). As of June 30, 2016, the Company owned 17 securities whose fair value was less than their cost basis.
As of June 30, 2016, the Company's investment securities portfolio contained unrealized losses on agency securities issued or backed by the full faith and credit of the United States government or are generally viewed as having the implied guarantee of the U.S. government, obligations of states and political subdivisions, mortgage backed securities issued by government sponsored entities, and equity securities in financial institutions. For fixed maturity investments management considers whether the present value of cash flows expected to be collected are less than the security's amortized cost basis (the difference defined as the credit loss), the magnitude and duration of the decline, the reasons underlying the decline and the Company's intent to sell the security or whether it is more likely than not that the Company would be required to sell the security before its anticipated recovery in market value, to determine whether the loss in value is other than temporary. Once a decline in value is determined to be other than temporary, if the Company does not intend to sell the security, and it is more likely than not that it will not be required to sell the security before recovery of the security's amortized cost basis, the charge to earnings is limited to the amount of credit loss. Any remaining difference between fair value and amortized cost (the difference defined as the non-credit portion) is recognized in other comprehensive income, net of applicable taxes. Otherwise, the entire difference between fair value and amortized cost is charged to earnings. For equity securities where the fair value has been significantly below cost for one year, the Company's policy is to recognize an impairment loss unless sufficient evidence is available that the decline is not other than temporary and a recovery period can be predicted. The Company has concluded that any impairment of its investment securities portfolio outlined in the above table is not other than temporary and is the result of interest rate changes, sector credit rating changes, or issuer-specific rating changes that are not expected to result in the non-collection of principal and interest during the period. Proceeds from sales of securities available-for-sale for the six months ended June 30, 2016 and 2015 were $12,077,000 and $18,393,000, respectively. For the three months ended June 30, 2016 and 2015, there were sales of $7,057,000 and $3,770,000, respectively, of available-for-sale securities. The gross gains and losses were as follows (in thousands):
Investment securities with an approximate carrying value of $221.9 million and $203.8 million at June 30, 2016 and December 31, 2015, respectively, were pledged to secure public funds and certain other deposits. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The amortized cost and fair value of debt securities at June 30, 2016, by contractual maturity, are shown below (in thousands):
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Loans |
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Loans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | Note 5 – Loans The Company grants loans primarily to customers throughout north central, central and south central Pennsylvania and the southern tier New York. Although the Company had a diversified loan portfolio at June 30, 2016 and December 31, 2015, a substantial portion of its debtors' ability to honor their contracts is dependent on the economic conditions within these regions. The following table summarizes the primary segments of the loan portfolio and how those segments are analyzed within the allowance for loan losses as of June 30, 2016 and December 31, 2015 (in thousands):
Purchased loans acquired in the FNB acquisition were recorded at fair value on their purchase date without a carryover of the related allowance for loan losses. Upon acquisition, the Company evaluated whether an acquired loan was within the scope of ASC 310-30, Receivables-Loans and Debt Securities Acquired with Deteriorated Credit Quality. Purchased credit-impaired loans are loans that have evidence of credit deterioration since origination and it is probable at the date of acquisition that the Company will not collect all contractually required principal and interest payments. There were no material increases or decreases in the expected cash flows of these loans between December 11, 2015 (the "acquisition date") and June 30, 2016. The fair value of purchased credit-impaired loans, on the acquisition date, was determined, primarily based on the fair value of loan collateral. The carrying value of purchased loans acquired with deteriorated credit quality was $3,669,000 and $3,818,000 at June 30, 2016 and December 31, 2015, respectively. On the acquisition date, the preliminary estimate of the unpaid principal balance for all loans evidencing credit impairment acquired in the FNB acquisition was $6,969,000 and the estimated fair value of the loans was $3,809,000. Total contractually required payments on these loans, including interest, at the acquisition date was $9,913,000. However, the Company's preliminary estimate of expected cash flows was $4,474,000. At such date, the Company established a credit risk related non-accretable discount (a discount representing amounts which are not expected to be collected from the customer nor liquidation of collateral) of $5,439,000 relating to these impaired loans, reflected in the recorded net fair value. Such amount is reflected as a non-accretable fair value adjustment to loans. The Company further estimated the timing and amount of expected cash flows in excess of the estimated fair value and established an accretable discount of $665,000 on the acquisition date relating to these impaired loans. The carrying value of the loans acquired in the FNB acquisition with specific evidence of deterioration in credit quality was determined by projected discounted contractual cash flows. Changes in the accretable yield for purchased credit-impaired loans were as follows for the three and six months ended June 30, 2016 (in thousands):
The following table presents additional information regarding loans acquired with specific evidence of deterioration in credit quality under ASC 310-30 (in thousands):
The segments of the Company's loan portfolio are disaggregated into classes to a level that allows management to monitor risk and performance. Residential real estate mortgages consist primarily of 15 to 30 year first mortgages on residential real estate, while residential real estate home equity loans are consumer purpose installment loans or lines of credit with terms of 15 years or less secured by a mortgage which is often a second lien on residential real estate. Commercial real estate loans are business purpose loans secured by a mortgage on commercial real estate. Agricultural real estate loans are loans secured by a mortgage on real estate used in agriculture production. Construction real estate loans are loans secured by residential or commercial real estate used during the construction phase of residential and commercial projects. Consumer loans are typically unsecured or primarily secured by assets other than real estate and overdraft lines of credit are typically secured by customer deposit accounts. Other commercial loans are loans for commercial purposes primarily secured by non-real estate collateral. Other agricultural loans are loans for agricultural purposes primarily secured by non-real estate collateral. State and political subdivision loans are loans to state and local municipalities for capital and operating expenses or tax free loans used to finance commercial development. Management considers commercial loans, other agricultural loans, state and political subdivision loans, commercial real estate loans and agricultural real estate loans which are 90 days or more past due to be impaired. Management will also consider a loan impaired based on other factors it becomes aware of, including the customer's results of operations and cash flows or if the loan is modified in a troubled debt restructuring. In addition, certain residential mortgages, home equity and consumer loans that are cross collateralized with commercial relationships that are determined to be impaired may also be classified as impaired. Impaired loans are analyzed to determine if it is probable that all amounts will not be collected according to the contractual terms of the loan agreement. If management determines that the value of the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allocation of the allowance for loan losses or a charge-off to the allowance for loan losses. The following table includes the recorded investment and unpaid principal balances for impaired financing receivables by class, with the associated allowance amount, if applicable (in thousands):
The following tables includes the average balance of impaired financing receivables by class and the income recognized on impaired loans for the three and six month periods ended June 30, 2016 and 2015(in thousands):
Credit Quality Information For commercial real estate, agricultural real estate, construction, other commercial, other agricultural and state and political subdivision loans, management uses a nine grade internal risk rating system to monitor credit quality. The first five categories are considered not criticized and are aggregated as "Pass" rated. The criticized rating categories utilized by management generally follow bank regulatory definitions. The definitions of each rating are defined below:
To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay the loan as agreed, the Company's loan rating process includes several layers of internal and external oversight. The Company's loan officers are responsible for the timely and accurate risk rating of the loans in each of their portfolios at origination and on an ongoing basis under the supervision of management. All commercial and agricultural loans are reviewed annually to ensure the appropriateness of the loan grade. In addition, the Company engages an external consultant on at least an annual basis to 1) review a minimum of 55% of the dollar volume of the commercial loan portfolio on an annual basis, 2) review new loans originated for over $1.0 million in the last year, 3) review a majority of borrowers with commitments greater than or equal to $1.0 million, 4) review selected loan relationships over $750,000 which are over 30 days past due or classified Special Mention, Substandard, Doubtful, or Loss, and 5) such other loans which management or the consultant deems appropriate. The following tables represent credit exposures by internally assigned grades as of June 30, 2016 and December 31, 2015 (in thousands):
For residential real estate mortgages, home equity and consumer loans, credit quality is monitored based on whether the loan is performing or non-performing, which is typically based on the aging status of the loan and payment activity, unless a specific action, such as bankruptcy, repossession, death or significant delay in payment occurs to raise awareness of a possible credit event. Non-performing loans include those loans that are considered nonaccrual, described in more detail below, and all loans past due 90 or more days and still accruing. The following table presents the recorded investment in those loan classes based on payment activity as of June 30, 2016 and December 31, 2015 (in thousands):
Aging Analysis of Past Due Financing Receivables Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The following table includes an aging analysis of the recorded investment of past due financing receivables as of June 30, 2016 and December 31, 2015 (in thousands):
Nonaccrual Loans Loans are considered for non-accrual status upon reaching 90 days delinquency, although the Company may be receiving partial payments of interest and partial repayments of principal on such loans or if full payment of principal and interest is not expected. Additionally, if management is made aware of other information including bankruptcy, repossession, death, or legal proceedings, the loan may be placed on non-accrual status. If a loan is 90 days or more past due and is well secured and in the process of collection, it may still be considered accruing. The following table reflects the financing receivables on non-accrual status as of June 30, 2016 and December 31, 2015, respectively. The balances are presented by class of financing receivable (in thousands):
Troubled Debt Restructurings In situations where, for economic or legal reasons related to a borrower's financial difficulties, management may grant a concession for other than an insignificant period of time to the borrower that would not otherwise be considered, the related loan is classified as a Troubled Debt Restructuring (TDR). Management strives to identify borrowers in financial difficulty early and work with them to structure more affordable terms before their loan reaches nonaccrual status. These restructured terms may include rate reductions, principal forgiveness, payment forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. In cases where borrowers are granted new terms that provide for a reduction of interest or principal, or both, management measures any impairment on the restructuring by calculating the present value of the revised loan terms and comparing this balance to the Company's investment in the loan prior to the restructuring. As these loans are individually evaluated, they are excluded from pooled portfolios when calculating the allowance for loan and lease losses and a separate allocation within the allowance for loan and lease losses is provided. Management continually evaluates loans that are considered TDRs, including payment history under the modified loan terms, the borrower's ability to continue to repay the loan based on continued evaluation of their operating results and cash flows from operations. Based on this evaluation management would no longer consider a loan to be a TDR when the relevant facts support such a conclusion. As of June 30, 2016 and December 31, 2015, included within the allowance for loan losses are reserves of $33,000 and $37,000 respectively, that are associated with loans modified as TDRs. Loan modifications that are considered TDRs completed during the three and six months ended June 30, 2016 and 2015 were as follows (dollars in thousands):
Recidivism, or the borrower defaulting on its obligation pursuant to a modified loan, results in the loan once again becoming a non-accrual loan. Recidivism occurs at a notably higher rate than do defaults on new origination loans, so modified loans present a higher risk of loss than do new origination loans. There were no loans that were modified as TDRs during each 12-month period prior to the current reporting periods, which begin January 1, 2016 and 2015 (six month periods) and April 1, 2016 and 2015 (3 month periods), respectively, that subsequently defaulted during these reporting periods. Allowance for Loan Losses The following table segregates the allowance for loan losses (ALLL) into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of June 30, 2016 and December 31, 2015, respectively (in thousands):
The following tables roll forward the balance of the ALLL by portfolio segment for the three and six month periods ended June 30, 2016 and 2015, respectively (in thousands):
The Company allocates the ALLL based on the factors described below, which conform to the Company's loan classification policy and credit quality measurements. In reviewing risk within the Company's loan portfolio, management has determined there to be several different risk categories within the loan portfolio. The ALLL consists of amounts applicable to: (i) residential real estate loans; (ii) residential real estate home equity loans; (iii) commercial real estate loans; (iv) agricultural real estate loans; (v) real estate construction loans; (vi) other commercial and agricultural loans; (vii) consumer loans; (viii) other agricultural loans and (ix) state and political subdivision loans. Factors considered in this process include general loan terms, collateral, and availability of historical data to support the analysis. Historical loss percentages are calculated and used as the basis for calculating allowance allocations. Certain qualitative factors are evaluated to determine additional inherent risks in the loan portfolio, which are not necessarily reflected in the historical loss percentages. These factors are then added to the historical allocation percentage to get the adjusted factor to be applied to non-classified loans. The following qualitative factors are analyzed:
The Company analyzes its loan portfolio each quarter to determine the adequacy of its ALLL. Loans determined to be TDRs are impaired and for purposes of estimating the ALLL must be individually evaluated for impairment. In calculating the impairment, the Company calculates the present value utilizing an analysis of discounted cash flows. If the present value calculated is below the recorded investment of the loan, impairment is recognized by a charge to the provision for loan and lease losses and a credit to the ALLL. We continually review the model utilized in calculating the required ALLL. The following qualitative factors experienced changes during the first six months of 2016:
The following qualitative factors experienced changes during the three months ended June 30, 2016:
The following qualitative factors experienced changes during the first six months of 2015:
The following qualitative factors experienced changes during the three months ended June 30, 2015:
The primary factor that resulted in negative provision for commercial and agricultural loans for the six month period ended June 30, 2015 was the reduction in the amount of special mention and substandard loans since December 31, 2014. Foreclosed Assets Held For Sale Foreclosed assets acquired in settlement of loans are carried at fair value, less estimated costs to sell, and are included in other assets on the Consolidated Balance Sheet. As of June 30, 2016 and December 31, 2015 included with other assets are $1,558,000 and $1,354,000, respectively, of foreclosed assets. As of June 30, 2016, included within the foreclosed assets is $453,000 of consumer residential mortgages that were foreclosed on or received via a deed in lieu transaction prior to the period end. As of June 30, 2016, the Company has initiated formal foreclosure proceedings on $1,424,000 of consumer residential mortgages, which have not yet been transferred into foreclosed assets. |
Goodwill and Other Intangible Assets |
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Goodwill and Other Intangible Assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Note 6 – Goodwill and Other Intangible Assets The following table provides the gross carrying value and accumulated amortization of intangible assets as of June 30, 2016 and December 31, 2015 (in thousands):
The following table provides the current year and estimated future amortization expense for amortized intangible assets. We based our projections of amortization expense shown below on existing asset balances at June 30, 2016. Future amortization expense may vary from these projections (in thousands):
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Federal Home Loan Bank Stock |
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Jun. 30, 2016 | |
Federal Home Loan Bank Stock [Abstract] | |
Federal Home Loan Bank Stock | Note 7 – Federal Home Loan Bank Stock The Bank is a member of the FHLB of Pittsburgh and, as such, is required to maintain a minimum investment in stock of the FHLB that varies with the level of advances outstanding with the FHLB. As of June 30, 2016 and December 31, 2015, the Bank's investment in FHLB stock was $2,643,000 and $2,800,000, respectively. The stock does not have a readily determinable fair value and, as such, is classified as restricted stock, carried at cost and evaluated by management. The stock's value is determined by the ultimate recoverability of the par value rather than by recognizing temporary declines. The determination of whether the par value will ultimately be recovered is influenced by criteria such as the following: (a) a significant decline in net assets of the FHLB as compared to the capital stock amount and the length of time this situation has persisted (b) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance (c) the impact of legislative and regulatory changes on the customer base of the FHLB and (d) the liquidity position of the FHLB. Management evaluated the stock and concluded that the stock was not impaired for the periods presented herein. Management considered that the FHLB's regulatory capital ratios have improved, liquidity appears adequate, new shares of FHLB stock continue to exchange hands at the $100 par value and the FHLB has repurchased shares of excess capital stock from its members and has paid a quarterly cash dividend. |
Repurchase Agreements |
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Repurchase Agreements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase Agreements | Note 8 – Repurchase Agreements We utilize securities sold under agreements to repurchase to facilitate the needs of our customers and to facilitate secured short-term funding needs. Securities sold under agreements to repurchase are stated at the amount of cash received in connection with the transaction. We monitor collateral levels on a continuous basis. We may be required to provide additional collateral based on the fair value of the underlying securities. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents. The value of the collateral segmented by the remaining contractual maturity of the repurchase agreements in the Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015 is presented in the following tables (in thousands):
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Employee Benefit Plans |
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Employee Benefit Plans [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | Note 9 - Employee Benefit Plans For additional detailed disclosure on the Company's pension and employee benefits plans, please refer to Note 11 of the Company's Consolidated Financial Statements included in the 2015 Annual Report on Form 10-K. Noncontributory Defined Benefit Pension Plan The Bank sponsors a noncontributory defined benefit pension plan ("Pension Plan") covering substantially all employees and officers that were hired prior to January 1, 2007. Additionally, the Bank assumed the noncontributory defined benefit pension plan of FNB when it was acquired during 2015. The FNB plan was frozen prior to the acquisition and therefore, no additional benefits will accrue for employees covered under that plan. These two plans are collectively referred to herein as "the Plans." The Bank's funding policy is to make annual contributions, if needed, based upon the funding formula developed by the plans' actuary. Any employee with a hire date of January 1, 2007 or later is not eligible to participate in the Pension Plan. In lieu of the Pension Plan, employees with a hire date of January 1, 2007 or later are eligible to receive, after meeting certain length of service requirements, an annual discretionary 401(k) plan contribution from the Bank equal to a percentage of an employee's base compensation. The contribution amount, if any, is placed in a separate account within the 401(k) plan and is subject to a vesting requirement. For employees who are eligible to participate in the Pension Plan, the Pension Plan requires benefits to be paid to eligible employees based primarily upon age and compensation rates during employment. Upon retirement or other termination of employment, employees can elect either an annuity benefit or a lump sum distribution of vested benefits in the Pension Plan. The following sets forth the components of net periodic benefit costs of the Pension Plan for the three and six months ended June 30, 2016 and 2015, respectively (in thousands):
The Company expects to contribute $700,000 to the Pension Plans in 2016. Defined Contribution Plan The Company sponsors a voluntary 401(k) savings plan which eligible employees can elect to contribute up to the maximum amount allowable not to exceed the limits of IRS Code Sections 401(k). Under the plan, the Company also makes required contributions on behalf of the eligible employees. The Company's contributions vest immediately. Contributions by the Company totaled $180,000 and $155,000 for the six months ended June 30, 2016 and 2015, respectively. For the three months ended June 30, 2016 and 2015, contributions by the Company totaled $97,000 and $93,000, respectively. Directors' Deferred Compensation Plan The Company's directors may elect to defer all or portions of their fees until their retirement or termination from service. Amounts deferred under the plan earn interest based upon the highest current rate offered to certificate of deposit customers. Amounts deferred under the plan are not guaranteed and represent a general liability of the Company. At June 30, 2016 and December 31, 2015, an obligation of $929,000 and $958,000, respectively, was included in other liabilities for this plan in the Consolidated Balance Sheet. Amounts included in interest expense on the deferred amounts totaled $4,000 and $5,000 for each of the three months ended June 30, 2016 and 2015, respectively. For the six months ended June 30, 2016 and 2015, amounts included in interest expense on the deferred amounts totaled $8,000 and $12,000, respectively. Restricted Stock Plan The Company maintains a Restricted Stock Plan (the "Plan") whereby employees and non-employee corporate directors are eligible to receive awards of restricted stock based upon performance related requirements. Awards granted under the Plan are in the form of the Company's common stock and are subject to certain vesting requirements including continuous employment or service with the Company. A total of 150,000 shares of the Company's common stock have been authorized under the Plan. As of June 30, 2016, 146,350 shares remain available to be issued under the Plan. The Plan assists the Company in attracting, retaining and motivating employees to make substantial contributions to the success of the Company and to increase the emphasis on the use of equity as a key component of compensation. The following table details the vesting, awarding and forfeiting of restricted shares during the three and six month periods ended June 30, 2016:
Compensation cost related to restricted stock is recognized, based on the market price of the stock at the grant date, over the vesting period. Compensation expense related to restricted stock was $92,000 and $85,000 for the six months ended June 30, 2016 and 2015, respectively. For the three months ended June 30, 2016 and 2015, compensation expense totaled $45,000 and $43,000, respectively. At June 30, 2016 the total compensation cost related to nonvested awards that has not yet been recognized was $421,000, which is expected to be recognized over the next 2.75 years. Supplemental Executive Retirement Plan The Company maintains a non-qualified supplemental executive retirement plan ("SERP") for certain executives to compensate those executive participants in the Company's noncontributory defined benefit pension plan whose benefits are limited by compensation limitations under current tax law. At June 30, 2016 and December 31, 2015, an obligation of $1,400,000 and $1,339,000, respectively, was included in other liabilities for this plan in the Consolidated Balance Sheet. Expenses related to this plan totaled $61,000 and $71,000 for the six months ended June 30, 2016 and 2015, respectively. For the three months ended June 30, 2016 and 2015, expenses totaled $31,000 and $36,000, respectively. Salary Continuation Plan The Company maintains a salary continuation plan for certain employees acquired through the acquisition of the FNB. At June 30, 2016 and December 31 2015, an obligation of $716,000 and $710,000 was included in other liabilities for this plan in the Consolidated Balance Sheet. Expenses related to this plan totaled $16,000 for the three months ended June 30, 2016. For the six months ended June 30, 2016, expenses related to this plan totaled $32,000. Continuation of Life Insurance Plan The Company, as part of the acquisition of FNB, has promised a continuation of certain split-dollar life insurance policies that provide coverage to certain persons post-retirement. U.S. generally accepted accounting principles require the recording of post-retirement costs and a liability equal to the present value of the cost of post-retirement insurance during the person's term of service. The estimated present value of future benefits to be paid totaled $574,000 at both June 30, 2016 and December 31, 2015, which is included in other liabilities in the Consolidated Balance Sheet. |
Accumulated Comprehensive Income |
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Accumulated Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Comprehensive Income | Note 9 – Accumulated Comprehensive Income The following tables present the changes in accumulated other comprehensive income by component net of tax for the three and six months ended June 30, 2016 and 2015 (in thousands):
The following table presents the significant amounts reclassified out of each component of accumulated other comprehensive income for the three and six months ended June 30, 2016 and 2015 (in thousands):
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Fair Value Measurements |
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Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Note 10 – Fair Value Measurements The Company has established a hierarchal disclosure framework associated with the level of pricing observability utilized in measuring assets and liabilities at fair value. The three broad levels defined by this hierarchy are as follows:
A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality, the Company's creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. Our valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes the Company's valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincides with the Company's monthly and/or quarterly valuation process. Financial Instruments Recorded at Fair Value on a Recurring Basis The fair values of securities available for sale are determined by quoted prices in active markets, when available, and classified as Level I. If quoted market prices are not available, the fair value is determined by a matrix pricing, which is a mathematical technique, widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities' relationship to other benchmark quoted securities and classified as Level II. The fair values consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond's terms and conditions, among other things. The following tables present the assets and liabilities reported on the Consolidated Balance Sheet at their fair value on a recurring basis as of June 30, 2016 and December 31, 2015 by level within the fair value hierarchy (in thousands). Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
Financial Instruments, Non-Financial Assets and Non-Financial Liabilities Recorded at Fair Value on a Nonrecurring Basis The Company may be required, from time to time, to measure certain financial assets, financial liabilities, non-financial assets and non-financial liabilities at fair value on a nonrecurring basis in accordance with U.S. generally accepted accounting principles. These include assets that are measured at the lower of cost or market value that were recognized at fair value below cost at the end of the period. Certain non-financial assets measured at fair value on a non-recurring basis include foreclosed assets (upon initial recognition or subsequent impairment), non-financial assets and non-financial liabilities measured at fair value in the second step of a goodwill impairment test, and intangible assets and other non-financial long-lived assets measured at fair value for impairment assessment. Non-financial assets measured at fair value on a non-recurring basis during 2016 and 2015 include certain foreclosed assets which, upon initial recognition, were remeasured and reported at fair value through a charge-off to the allowance for possible loan losses and certain foreclosed assets which, subsequent to their initial recognition, were remeasured at fair value through a write-down included in other non-interest expense. Assets measured at fair value on a nonrecurring basis as of June 30, 2016 and December 31, 2015 are included in the table below (in thousands):
The following table provides a listing of the significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques (dollars in thousands).
The fair values of the Company's financial instruments are as follows (in thousands):
Fair value is determined based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company's financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions can significantly affect the estimates. Fair values have been determined by the Company using historical data, as generally provided in the Company's regulatory reports, and an estimation methodology suitable for each category of financial instruments. The Company's fair value estimates, methods and assumptions are set forth below for the Company's other financial instruments. Cash and Cash Equivalents: The carrying amounts for cash and cash equivalents approximate fair value because they have original maturities of 90 days or less and do not present unanticipated credit concerns. Accrued Interest Receivable and Payable: The carrying amounts for accrued interest receivable and payable approximate fair value because they are generally received or paid in 90 days or less and do not present unanticipated credit concerns. Interest bearing time deposits with other banks: The fair value of interest bearing time deposits with other banks is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities. Available-For-Sale Securities: The fair values of securities available for sale are determined by quoted prices in active markets, when available, and classified as Level I. If quoted market prices are not available, the fair value is determined by a matrix pricing, which is a mathematical technique, widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities' relationship to other benchmark quoted securities and classified as Level II. The fair values consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond's terms and conditions, among other things. Loans held for sale: The carrying amount for loans held for sale approximates fair value as the loans are only held for less than a week from origination. Loans: Fair values are estimated for portfolios of loans with similar financial characteristics. The fair value of performing loans has been estimated by discounting expected future cash flows. The discount rate used in these calculations is derived from the Treasury yield curve adjusted for credit quality, operating expense and prepayment option price, and is calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk inherent in the loan. The estimate of maturity is based on the Company's historical experience with repayments for each loan classification, modified as required by an estimate of the effect of current economic and lending conditions. Bank Owned Life Insurance: The carrying value of bank owned life insurance approximates fair value based on applicable redemption provisions. Regulatory Stock: The carrying value of regulatory stock approximates fair value based on applicable redemption provisions. Deposits: The fair value of deposits with no stated maturity, such as noninterest-bearing demand deposits, savings and NOW accounts, and money market accounts, is equal to the amount payable on demand. The fair value of certificates of deposit is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities. The deposits' fair value estimates do not include the benefit that results from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market, commonly referred to as the core deposit intangible. Borrowed Funds: Rates available to the Company for borrowed funds with similar terms and remaining maturities are used to estimate the fair value of borrowed funds. |
Recent Accounting Pronouncements |
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Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | Note 11 – Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (a new revenue recognition standard). The Update's core principle is that a company will recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, this update specifies the accounting for certain costs to obtain or fulfill a contract with a customer and expands disclosure requirements for revenue recognition. This Update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is evaluating the effect of adopting this new accounting Update. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements -Going Concern (Subtopic 205-40). The amendments in this Update provide guidance in accounting principles generally accepted in the United States of America about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. This Update is not expected to have a significant impact on the Company's financial statements. In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810). The amendments in this Update affect reporting entities that are required to evaluate whether they should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. Specifically, the amendments (1) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities; (2) eliminate the presumption that a general partner should consolidate a limited partnership; (3) affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships; (4) provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The amendments in this Update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2016, and for interim periods within fiscal years beginning after December 15, 2017. This Update is not expected to have a significant impact on the Company's financial statements. In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30), as part of its initiative to reduce complexity in accounting standards. To simplify presentation of debt issuance costs, the amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016. An entity should apply the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. This Update is not expected to have a significant impact on the Company's financial statements. In June 2015, the FASB issued ASU 2015-10, Technical Corrections and Improvements. The amendments in this Update represent changes to clarify the Codification, correct unintended application of guidance, or make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. Transition guidance varies based on the amendments in this Update. The amendments in this Update that require transition guidance are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. All other amendments will be effective upon the issuance of this Update. This Update is not expected to have a significant impact on the Company's financial statements. In August 2015, the FASB issued ASU 2015-14, Revenue from Contract with Customers (Topic 606). The amendments in this Update defer the effective date of ASU 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. All other entities should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. The Company is evaluating the effect of adopting this new accounting Update. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805). The amendments in this Update require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in this Update require that the acquirer record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendments in this Update require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. The Company is currently evaluating the impact the adoption of the standard will have on the Company's financial position or results of operations. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this Update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this Update apply to all entities that present a classified statement of financial position. For public business entities, the amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For all other entities, the amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The amendments in this Update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. This Update is not expected to have a significant impact on the Company's financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This Update applies to all entities that hold financial assets or owe financial liabilities and is intended to provide more useful information on the recognition, measurement, presentation, and disclosure of financial instruments. Among other things, this Update (a) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (b) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (c) eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities; (d) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (e) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (f) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (g) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and (h) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity's other deferred tax assets. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. For all other entities including not-for-profit entities and employee benefit plans within the scope of Topics 960 through 965 on plan accounting, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. All entities that are not public business entities may adopt the amendments in this Update earlier as of the fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the impact the adoption of the standard will have on the Company's financial position or results of operations. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The standard requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. A short-term lease is defined as one in which: (a) the lease term is 12 months or less, and (b) there is not an option to purchase the underlying asset that the lessee is reasonably certain to exercise. For short-term leases, lessees may elect to recognize lease payments over the lease term on a straight-line basis. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020. The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact the adoption of the standard will have on the Company's financial position or results of operations. In March 2016, the FASB issued ASU 2016-04, Liabilities – Extinguishments of Liabilities (Subtopic 405-20). The standard provides that liabilities related to the sale of prepaid stored-value products within the scope of this Update are financial liabilities. The amendments in the Update provide a narrow scope exception to the guidance in Subtopic 405-20 to require that breakage for those liabilities be accounted for consistent with the breakage guidance in Topic 606. The amendments in this Update are effective for public business entities, certain not-for-profit entities, and certain employee benefit plans for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Earlier application is permitted, including adoption in an interim period. This Update is not expected to have a significant impact on the Company's financial statements. In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging (Topic 815). The amendments in this Update apply to all reporting entities for which there is a change in the counterparty to a derivative instrument that has been designated as a heading instrument under Topic 815. The standards in this Update clarify that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not, in and of itself, require designation of that hedging relationship provided that all other hedge accounting criteria continue to be met. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018. An entity has an option to apply the amendments in this Update on either a prospective basis or a modified retrospective basis. Early adoption is permitted, including adoption in an interim period. This Update is not expected to have a significant impact on the Company's financial statements. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815). The amendments apply to all entities that are issuers of or investors in debt instruments (or hybrid financial instruments that are determined to have a debt host) with embedded call (put) options. The amendments in this update clarify the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt host. An entity performing the assessment under the amendments in this Update is required to assess the embedded call (put) options solely in accordance with the four-step decision sequence. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. For entities other than public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact the adoption of the standard will have on the Company's financial position or results of operations. In March 2016, the FASB issued ASU 2016-07, Investments – Equity Method and Joint Ventures (Topic 323). The Update affects all entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence. The amendments in this Update eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor's previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. The amendments in this Update require that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Earlier application is permitted. This Update is not expected to have a significant impact on the Company's financial statements. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606). The amendments in this Update affect entities with transactions included within the scope of Topic 606, which includes entities that enter into contracts with customers to transfer goods or services (that are an output of the entity's ordinary activities) in exchange for consideration. The amendments in this update do not change the core principle of the guidance in Topic 606; they simply clarify the implementation guidance on principal versus agent considerations. The amendments in this Update are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. The amendments in this Update affect the guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements of Update 2014-09. ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. The Company is currently evaluating the impact the adoption of the standard will have on the Company's financial position or results of operations. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718). The amendments in this Update affect all entities that issue share-based payment awards to their employees. The standards in this Update provide simplification for several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as with equity or liabilities, and classification on the statement of cash flows. Some of the areas for simplification apply only to nonpublic entities. In addition to those simplifications, the amendments eliminate the guidance in Topic 718 that was indefinitely deferred shortly after the issuance of FASB Statement No. 123 (revised 2004), Share-Based Payment. This should not result in a change in practice because the guidance that is being superseded was never effective. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted for any entity in any interim or annual period. The Company is currently evaluating the impact the adoption of the standard will have on the Company's financial position or results of operations. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606). The amendments in this Update affect entities with transactions included within the scope of Topic 606, which includes entities that enter into contracts with customers to transfer goods or services in exchange for consideration. The amendments in this Update do not change the core principle for revenue recognition in Topic 606. Instead, the amendments provide (1) more detailed guidance in a few areas and (2) additional implementation guidance and examples based on feedback the FASB received from its stakeholders. The amendments are expected to reduce the degree of judgment necessary to comply with Topic 606, which the FASB expects will reduce the potential for diversity arising in practice and reduce the cost and complexity of applying the guidance. The amendments in this Update affect the guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by Update 2014-09). ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. The Company is currently evaluating the impact the adoption of the standard will have on the Company's financial position or results of operations. In May 2016, the FASB issued ASU 2016-11, Revenue Recognition (Topic 605) and Derivative and Hedging (Topic 815), which rescinds SEC paragraphs pursuant to two SEC Staff Announcements at the March 3, 2016, Emerging Issues Task Force meeting. This Update did not have a significant impact on the Company's financial statements In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606), which among other things clarifies the objective of the collectability criterion in Topic 606, as well as certain narrow aspects of Topic 606. The amendments in this Update affect the guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements for Topic 606 (and any other Topic amended by Update 2014-09). ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. This Update is not expected to have a significant impact on the Company's financial statements In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), which changes the impairment model for most financial assets. This ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the ASU is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management's current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be effected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted for annual and interim periods beginning after December 15, 2018. With certain exceptions, transition to the new requirements will be through a cumulative effect adjustment to opening retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company is currently evaluating the impact the adoption of the standard will have on the Company's financial position or results of operations. |
Earnings per Share (Tables) |
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Computation of earnings per share | Note 2 - Earnings per Share The following table sets forth the computation of earnings per share. Earnings per share calculations give retroactive effect to stock dividends declared by the Company.
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Investments (Tables) |
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Investments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of amortized cost, gross unrealized gains and losses, and fair value of investment securities | The amortized cost, gross unrealized gains and losses, and fair value of investment securities at June 30, 2016 and December 31, 2015 were as follows (in thousands):
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Unrealized losses and fair value of investments | The following table shows the Company's gross unrealized losses and fair value of the Company's investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time, which individual securities have been in a continuous unrealized loss position, at June 30, 2016 and December 31, 2015 (in thousands). As of June 30, 2016, the Company owned 17 securities whose fair value was less than their cost basis.
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Gross gains and losses on available-for-sale securities | The gross gains and losses were as follows (in thousands):
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Summary of amortized cost and fair value of debt securities by contractual maturity | The amortized cost and fair value of debt securities at June 30, 2016, by contractual maturity, are shown below (in thousands):
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Loans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of loan portfolio and allowance for loan losses | The following table summarizes the primary segments of the loan portfolio and how those segments are analyzed within the allowance for loan losses as of June 30, 2016 and December 31, 2015 (in thousands):
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Accretable yield for purchased credit impaired loans | Changes in the accretable yield for purchased credit-impaired loans were as follows for the three and six months ended June 30, 2016 (in thousands):
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Loans acquired with specific evidence of deterioration in credit quality | The following table presents additional information regarding loans acquired with specific evidence of deterioration in credit quality under ASC 310-30 (in thousands):
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Impaired financing receivables with associated allowance amount | The following table includes the recorded investment and unpaid principal balances for impaired financing receivables by class, with the associated allowance amount, if applicable (in thousands):
The following tables includes the average balance of impaired financing receivables by class and the income recognized on impaired loans for the three and six month periods ended June 30, 2016 and 2015(in thousands):
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Summary of financing receivable credit exposures by internally assigned grades | The following tables represent credit exposures by internally assigned grades as of June 30, 2016 and December 31, 2015 (in thousands):
For residential real estate mortgages, home equity and consumer loans, credit quality is monitored based on whether the loan is performing or non-performing, which is typically based on the aging status of the loan and payment activity, unless a specific action, such as bankruptcy, repossession, death or significant delay in payment occurs to raise awareness of a possible credit event. Non-performing loans include those loans that are considered nonaccrual, described in more detail below, and all loans past due 90 or more days and still accruing. The following table presents the recorded investment in those loan classes based on payment activity as of June 30, 2016 and December 31, 2015 (in thousands):
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Aging analysis of past due financing receivables | The following table includes an aging analysis of the recorded investment of past due financing receivables as of June 30, 2016 and December 31, 2015 (in thousands):
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Summary of financing receivables on nonaccrual status | The following table reflects the financing receivables on non-accrual status as of June 30, 2016 and December 31, 2015, respectively. The balances are presented by class of financing receivable (in thousands):
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Summary of troubled debt restructurings on financing receivables | Loan modifications that are considered TDRs completed during the three and six months ended June 30, 2016 and 2015 were as follows (dollars in thousands):
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Allowance for loan losses by impairment method | The following table segregates the allowance for loan losses (ALLL) into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of June 30, 2016 and December 31, 2015, respectively (in thousands):
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Roll forward of allowance for loan losses by portfolio segment | The following tables roll forward the balance of the ALLL by portfolio segment for the three and six month periods ended June 30, 2016 and 2015, respectively (in thousands):
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Goodwill and Other Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of gross carrying value and accumulated amortization of intangible assets | The following table provides the gross carrying value and accumulated amortization of intangible assets as of June 30, 2016 and December 31, 2015 (in thousands):
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Schedule of future amortization expense for amortized intangible assets | The following table provides the current year and estimated future amortization expense for amortized intangible assets. We based our projections of amortization expense shown below on existing asset balances at June 30, 2016. Future amortization expense may vary from these projections (in thousands):
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Repurchase Agreements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase Agreements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Remaining contractual maturity of the repurchase agreements | The value of the collateral segmented by the remaining contractual maturity of the repurchase agreements in the Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015 is presented in the following tables (in thousands):
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Employee Benefit Plans (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of net periodic benefit costs | The following sets forth the components of net periodic benefit costs of the Pension Plan for the three and six months ended June 30, 2016 and 2015, respectively (in thousands):
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Schedule of restricted stock activity | The following table details the vesting, awarding and forfeiting of restricted shares during the three and six month periods ended June 30, 2016:
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Accumulated Comprehensive Income (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the significant amounts reclassified out of each component of accumulated other comprehensive income | The following tables present the changes in accumulated other comprehensive income by component net of tax for the three and six months ended June 30, 2016 and 2015 (in thousands):
The following table presents the significant amounts reclassified out of each component of accumulated other comprehensive income for the three and six months ended June 30, 2016 and 2015 (in thousands):
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Fair Value Measurements (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of assets measured at fair value on a recurring basis | The following tables present the assets and liabilities reported on the Consolidated Balance Sheet at their fair value on a recurring basis as of June 30, 2016 and December 31, 2015 by level within the fair value hierarchy (in thousands). Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
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Summary of assets measured at fair value on non-recurring basis | Assets measured at fair value on a nonrecurring basis as of June 30, 2016 and December 31, 2015 are included in the table below (in thousands):
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Significant unobservable inputs used in fair value measurement process | The following table provides a listing of the significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques (dollars in thousands).
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Fair value of financial instruments | The fair values of the Company's financial instruments are as follows (in thousands):
|
Income Tax Expense (Details) |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2016
USD ($)
|
Jun. 30, 2015
USD ($)
|
Jun. 30, 2016
USD ($)
Partnership
|
Jun. 30, 2015
USD ($)
|
Dec. 31, 2015
USD ($)
Partnership
|
|
Income Tax Expense [Abstract] | |||||
Investments in number of partnerships | Partnership | 4 | 4 | |||
Investment amount in partnerships | $ 829,000 | $ 829,000 | $ 959,000 | ||
Investment Tax Credit Carryforward [Member] | |||||
Tax Credit Carryforward [Line Items] | |||||
Investment tax credits | 945,000 | $ 945,000 | |||
Tax credits recognition period | 6 years 4 months 24 days | ||||
Tax credits recognized as reduction of tax expense amount | $ 49,000 | $ 49,000 | $ 99,000 | $ 99,000 |
Federal Home Loan Bank Stock (Details) - USD ($) |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Federal Home Loan Bank Stock [Abstract] | ||
Federal home loan bank stock | $ 2,643,000 | $ 2,800,000 |
FHLB Stock, at par value (in dollars per share) | $ 100 |
Repurchase Agreements (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total carrying value of collateral pledged | $ 20,153 | $ 20,193 |
Total liability recognized for repurchase agreements | 14,761 | 16,008 |
U.S. Agency Securities [Member] | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total carrying value of collateral pledged | 20,153 | 20,193 |
Overnight and Continuous [Member] | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total carrying value of collateral pledged | 18,024 | 18,144 |
Overnight and Continuous [Member] | U.S. Agency Securities [Member] | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total carrying value of collateral pledged | 18,024 | 18,144 |
Up to 30 Days [Member] | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total carrying value of collateral pledged | 0 | 0 |
Up to 30 Days [Member] | U.S. Agency Securities [Member] | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total carrying value of collateral pledged | 0 | 0 |
30 - 90 Days [Member] | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total carrying value of collateral pledged | 0 | 0 |
30 - 90 Days [Member] | U.S. Agency Securities [Member] | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total carrying value of collateral pledged | 0 | 0 |
Greater than 90 Days [Member] | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total carrying value of collateral pledged | 2,129 | 2,049 |
Greater than 90 Days [Member] | U.S. Agency Securities [Member] | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total carrying value of collateral pledged | $ 2,129 | $ 2,049 |
Employee Benefit Plans (Details) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2016
USD ($)
$ / shares
shares
|
Jun. 30, 2015
USD ($)
|
Jun. 30, 2016
USD ($)
Plan
$ / shares
shares
|
Jun. 30, 2015
USD ($)
|
Dec. 31, 2015
USD ($)
|
|
Employee Benefit Plans [Abstract] | |||||
Number of plans | Plan | 2 | ||||
Defined Contribution Plan [Abstract] | |||||
Employer contribution to 401 (k) defined contribution plan | $ 97,000 | $ 93,000 | $ 180,000 | $ 155,000 | |
Directors [Member] | |||||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||||
Deferred compensation liability | 929,000 | 929,000 | $ 958,000 | ||
Deferred interest expense | 4,000 | 5,000 | 8,000 | 12,000 | |
Pension Plan [Member] | |||||
Components of net periodic benefit cost [Abstract] | |||||
Service cost | 89,000 | 78,000 | 179,000 | 132,000 | |
Interest cost | 173,000 | 90,000 | 345,000 | 153,000 | |
Expected return on plan assets | (260,000) | (172,000) | (520,000) | (290,000) | |
Net amortization and deferral | 60,000 | 45,000 | 121,000 | 76,000 | |
Net periodic benefit cost | 62,000 | 41,000 | 125,000 | 71,000 | |
Defined Benefit Plans Other Disclosure [Abstract] | |||||
Employer contribution to pension plan | 700,000 | ||||
Supplemental Executive Retirement Plans [Member] | |||||
Defined Benefit Plans Other Disclosure [Abstract] | |||||
Obligation included in other liabilities | 1,400,000 | 1,400,000 | 1,339,000 | ||
Cost recognized | 31,000 | 36,000 | 61,000 | 71,000 | |
Continuation of Life Insurance Plan [Member] | |||||
Defined Benefit Plans Other Disclosure [Abstract] | |||||
Obligation included in other liabilities | 574,000 | 574,000 | 574,000 | ||
Salary Continuation Plan [Member] | |||||
Defined Benefit Plans Other Disclosure [Abstract] | |||||
Obligation included in other liabilities | 716,000 | 716,000 | $ 710,000 | ||
Cost recognized | $ 16,000 | $ 32,000 | |||
Restricted Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized (in shares) | shares | 150,000 | 150,000 | |||
Number of shares available for grant (in shares) | shares | 146,350 | 146,350 | |||
Restricted stock activity [Roll Forward] | |||||
Outstanding, beginning of period (in shares) | shares | 8,111 | 8,269 | |||
Granted (in shares) | shares | 3,650 | 3,650 | |||
Forfeited (in shares) | shares | 0 | 0 | |||
Vested (in shares) | shares | (3,158) | (3,316) | |||
Outstanding, end of period (in shares) | shares | 8,603 | 8,603 | |||
Weighted average market price [Roll Forward] | |||||
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 49.96 | $ 49.98 | |||
Granted (in dollars per share) | $ / shares | 47.81 | 47.81 | |||
Forfeited (in dollars per share) | $ / shares | 0 | 0 | |||
Vested (in dollars per share) | $ / shares | 50.41 | (50.45) | |||
Outstanding, end of period (in dollars per share) | $ / shares | $ 48.88 | $ 48.88 | |||
Additional General Disclosures [Abstract] | |||||
Share-based compensation expense | $ 45,000 | $ 43,000 | $ 92,000 | $ 85,000 | |
Compensation cost related to nonvested awards that has not yet been recognized | $ 421,000 | $ 421,000 | |||
Period over which compensation cost is expected to be recognized | 2 years 9 months |
Accumulated Comprehensive Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||
Beginning Balance | $ 119,760 | ||||||
Other comprehensive income (loss) before reclassifications (net of tax) | $ 1,184 | $ (1,351) | 2,301 | $ (464) | |||
Amounts reclassified from accumulated other comprehensive income (loss) (net of tax) | (45) | (81) | (23) | (132) | |||
Other comprehensive income (loss), net of tax | 1,139 | (1,432) | 2,278 | (596) | |||
Ending Balance | 124,456 | 124,456 | |||||
Accumulated Other Comprehensive Income [Member] | |||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||
Beginning Balance | 903 | 1,603 | (236) | 767 | |||
Ending Balance | 2,042 | 171 | 2,042 | 171 | |||
Unrealized Gains (Loss) on Available for Sale Securities [Member] | |||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||
Beginning Balance | [1] | 3,303 | 3,897 | 2,204 | 3,093 | ||
Other comprehensive income (loss) before reclassifications (net of tax) | [1] | 1,184 | (1,351) | 2,301 | (464) | ||
Amounts reclassified from accumulated other comprehensive income (loss) (net of tax) | [1] | (84) | (116) | (102) | (199) | ||
Other comprehensive income (loss), net of tax | [1] | 1,100 | (1,467) | 2,199 | (663) | ||
Ending Balance | [1] | 4,403 | 2,430 | 4,403 | 2,430 | ||
Defined Benefit Pension Items [Member] | |||||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||||
Beginning Balance | [1] | (2,400) | (2,294) | (2,440) | (2,326) | ||
Other comprehensive income (loss) before reclassifications (net of tax) | [1] | 0 | 0 | 0 | 0 | ||
Amounts reclassified from accumulated other comprehensive income (loss) (net of tax) | [1] | 39 | 35 | 79 | 67 | ||
Other comprehensive income (loss), net of tax | [1] | 39 | 35 | 79 | 67 | ||
Ending Balance | [1] | $ (2,361) | $ (2,259) | $ (2,361) | $ (2,259) | ||
|
Accumulated Comprehensive Income, Reclassification (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||
Investment securities gains, net | $ 128 | $ 175 | $ 155 | $ 301 | |||
Provision for income taxes | (687) | (779) | (1,478) | (1,519) | |||
Salaries and employee benefits | (3,900) | (2,993) | (7,782) | (6,049) | |||
NET INCOME | 3,031 | 3,189 | 6,314 | 6,309 | |||
Reclassification out of Accumulated Other Comprehensive Income [Member] | |||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||
NET INCOME | [1] | 45 | 81 | 23 | 132 | ||
Unrealized Gains (Loss) on Available for Sale Securities [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||
Investment securities gains, net | [1] | 128 | 175 | 155 | 301 | ||
Provision for income taxes | [1] | (44) | (59) | (53) | (102) | ||
NET INCOME | [1] | 84 | 116 | 102 | 199 | ||
Defined Benefit Pension Items [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||
Provision for income taxes | [1] | 21 | 19 | 42 | 35 | ||
Salaries and employee benefits | [1] | (60) | (54) | (121) | (102) | ||
NET INCOME | [1] | $ (39) | $ (35) | $ (79) | $ (67) | ||
|
Fair Value Measurements, Measured On A Recurring And Nonrecurring Basis (Details) - USD ($) |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Fair value assets and liabilities measured on non-recurring basis [Abstract] | ||
Impaired loans, estimated selling cost | $ 126,000 | $ 91,000 |
Recurring [Member] | ||
Securities available for sale [Abstract] | ||
U.S. Agency securities | 205,819,000 | 199,591,000 |
U.S. Treasuries securities | 5,053,000 | 10,082,000 |
Obligations of state and political subdivisions | 104,472,000 | 102,863,000 |
Corporate obligations | 11,480,000 | 14,565,000 |
Mortgage-backed securities in government sponsored entities | 31,606,000 | 30,204,000 |
Equity securities in financial institutions | 2,514,000 | 2,432,000 |
Recurring [Member] | Level I [Member] | ||
Securities available for sale [Abstract] | ||
U.S. Agency securities | 0 | 0 |
U.S. Treasuries securities | 5,053,000 | 10,082,000 |
Obligations of state and political subdivisions | 0 | 0 |
Corporate obligations | 0 | 0 |
Mortgage-backed securities in government sponsored entities | 0 | 0 |
Equity securities in financial institutions | 2,514,000 | 2,432,000 |
Recurring [Member] | Level II [Member] | ||
Securities available for sale [Abstract] | ||
U.S. Agency securities | 205,819,000 | 199,591,000 |
U.S. Treasuries securities | 0 | 0 |
Obligations of state and political subdivisions | 104,472,000 | 102,863,000 |
Corporate obligations | 11,480,000 | 14,565,000 |
Mortgage-backed securities in government sponsored entities | 31,606,000 | 30,204,000 |
Equity securities in financial institutions | 0 | 0 |
Recurring [Member] | Level III [Member] | ||
Securities available for sale [Abstract] | ||
U.S. Agency securities | 0 | 0 |
U.S. Treasuries securities | 0 | 0 |
Obligations of state and political subdivisions | 0 | 0 |
Corporate obligations | 0 | 0 |
Mortgage-backed securities in government sponsored entities | 0 | 0 |
Equity securities in financial institutions | 0 | 0 |
Nonrecurring [Member] | ||
Fair value assets and liabilities measured on non-recurring basis [Abstract] | ||
Impaired Loans | 989,000 | 894,000 |
Other real estate owned | 1,007,000 | 1,197,000 |
Nonrecurring [Member] | Level I [Member] | ||
Fair value assets and liabilities measured on non-recurring basis [Abstract] | ||
Impaired Loans | 0 | 0 |
Other real estate owned | 0 | 0 |
Nonrecurring [Member] | Level II [Member] | ||
Fair value assets and liabilities measured on non-recurring basis [Abstract] | ||
Impaired Loans | 0 | 0 |
Other real estate owned | 0 | 0 |
Nonrecurring [Member] | Level III [Member] | ||
Fair value assets and liabilities measured on non-recurring basis [Abstract] | ||
Impaired Loans | 989,000 | 894,000 |
Other real estate owned | $ 1,007,000 | $ 1,197,000 |
Fair Value Measurements, Quantitative Information (Details) - Appraised Collateral Values [Member] - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Impaired Loans [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value | $ 989 | $ 894 |
Valuation Technique(s) | Appraised Collateral Values | Appraised Collateral Values |
Impaired Loans [Member] | Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount to appraised value | 0.00% | 0.00% |
Selling costs | 5.00% | 4.00% |
Holding period | 0 months | 0 months |
Impaired Loans [Member] | Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount to appraised value | 75.00% | 70.00% |
Selling costs | 10.00% | 10.00% |
Holding period | 12 months | 12 months |
Impaired Loans [Member] | Weighted Average [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount to appraised value | 36.64% | 46.50% |
Selling costs | 8.18% | 7.75% |
Holding period | 10 months | 10 months |
Other Real Estate Owned [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value | $ 1,007 | $ 1,197 |
Valuation Technique(s) | Appraised Collateral Values | Appraised Collateral Values |
Other Real Estate Owned [Member] | Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount to appraised value | 0.00% | 0.00% |
Other Real Estate Owned [Member] | Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount to appraised value | 37.00% | 75.00% |
Other Real Estate Owned [Member] | Weighted Average [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount to appraised value | 24.70% | 25.00% |
Fair Value Measurements, By Balance Sheet Grouping (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Financial assets [Abstract] | ||
Interest bearing time deposits with other banks | $ 6,954 | $ 7,696 |
Available-for-sale securities | $ 360,944 | 359,737 |
Financial liabilities [Abstract] | ||
Consideration period for recognition of cash and due from banks | 90 days | |
Consideration period for recognition of accrued interest receivable and payable | 90 days | |
Level I [Member] | ||
Financial assets [Abstract] | ||
Cash and due from banks | $ 26,822 | 24,384 |
Interest bearing time deposits with other banks | 0 | 0 |
Available-for-sale securities | 7,567 | 12,514 |
Loans held for sale | 1,304 | 603 |
Net loans | 0 | 0 |
Bank owned life insurance | 25,877 | 25,535 |
Regulatory stock | 3,407 | 3,459 |
Accrued interest receivable | 4,176 | 4,211 |
Financial liabilities [Abstract] | ||
Deposits | 734,593 | 706,121 |
Borrowed funds | 0 | 1,598 |
Accrued interest payable | 644 | 734 |
Level II [Member] | ||
Financial assets [Abstract] | ||
Cash and due from banks | 0 | 0 |
Interest bearing time deposits with other banks | 0 | 0 |
Available-for-sale securities | 353,377 | 347,223 |
Net loans | 0 | 0 |
Bank owned life insurance | 0 | 0 |
Regulatory stock | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Financial liabilities [Abstract] | ||
Deposits | 0 | 0 |
Borrowed funds | 0 | 0 |
Accrued interest payable | 0 | 0 |
Level III [Member] | ||
Financial assets [Abstract] | ||
Cash and due from banks | 0 | 0 |
Interest bearing time deposits with other banks | 6,961 | 7,705 |
Available-for-sale securities | 0 | |
Net loans | 726,584 | 712,524 |
Bank owned life insurance | 0 | 0 |
Regulatory stock | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Financial liabilities [Abstract] | ||
Deposits | 270,565 | 281,421 |
Borrowed funds | 37,240 | 37,265 |
Accrued interest payable | 0 | |
Carrying Amount [Member] | ||
Financial assets [Abstract] | ||
Cash and due from banks | 26,822 | 24,384 |
Interest bearing time deposits with other banks | 6,954 | 7,696 |
Available-for-sale securities | 360,944 | 359,737 |
Loans held for sale | 1,304 | 603 |
Net loans | 701,756 | 687,925 |
Bank owned life insurance | 25,877 | 25,535 |
Regulatory stock | 3,407 | 3,459 |
Accrued interest receivable | 4,176 | 4,211 |
Financial liabilities [Abstract] | ||
Deposits | 1,003,482 | 988,031 |
Borrowed funds | 38,786 | 41,631 |
Accrued interest payable | 644 | 734 |
Fair Value [Member] | ||
Financial assets [Abstract] | ||
Cash and due from banks | 26,822 | 24,384 |
Interest bearing time deposits with other banks | 6,961 | 7,705 |
Available-for-sale securities | 360,944 | 359,737 |
Loans held for sale | 1,304 | 603 |
Net loans | 726,584 | 712,524 |
Bank owned life insurance | 25,877 | 25,535 |
Regulatory stock | 3,407 | 3,459 |
Accrued interest receivable | 4,176 | 4,211 |
Financial liabilities [Abstract] | ||
Deposits | 1,005,158 | 987,542 |
Borrowed funds | 37,240 | 38,863 |
Accrued interest payable | $ 644 | $ 734 |
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