10-Q 1 bhb03311810q.htm 10-Q 3.31.18 Document

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2018
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                    to                  
Commission File Number: 001-13349
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BAR HARBOR BANKSHARES
(Exact name of registrant as specified in its charter) 
Maine
 
01-0393663
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
 
 
PO Box 400
 
 
82 Main Street, Bar Harbor, ME
 
04609-0400
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (207) 288-3314
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ý  No   
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý  No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.  See the definition of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, or "emerging growth company" in Rule 12b-2 of the Exchange Act.  (Check one)
Large Accelerated Filer o        Accelerated Filer ý       Non-Accelerated Filer o      Smaller Reporting Company o        Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes o  No ý
The Registrant had 15,486,087 shares of common stock, par value $2.00 per share, outstanding as of May 4, 2018.
 



BAR HARBOR BANKSHARES AND SUBSIDIARIES
FORM 10-Q
 
INDEX 
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

2





3


PART I

ITEM 1.     CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

BAR HARBOR BANKSHARES AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
 
(in thousands, except share data)
 
March 31, 2018
 
December 31, 2017
 
Assets
 
 

 
 

 
Cash and due from banks
 
$
35,088

 
$
34,262

 
Interest-bearing deposit with the Federal Reserve Bank
 
12,725

 
56,423

 
Total cash and cash equivalents
 
47,813

 
90,685

 
Securities available for sale, at fair value
 
718,559

 
717,242

 
Federal Home Loan Bank stock
 
38,105

 
38,105

 
Total securities
 
756,664

 
755,347

 
Commercial real estate
 
824,721

 
826,746

 
Commercial and industrial
 
387,205

 
379,423

 
Residential real estate
 
1,132,977

 
1,155,682

 
Consumer
 
119,516

 
123,762

 
Total loans
 
2,464,419

 
2,485,613

 
Less: Allowance for loan losses
 
(12,679
)
 
(12,325
)
 
Net loans
 
2,451,740

 
2,473,288

 
Premises and equipment, net
 
48,464

 
47,708

 
Other real estate owned
 
216

 
122

 
Goodwill
 
100,085

 
100,085

 
Other intangible assets
 
8,152

 
8,383

 
Cash surrender value of bank-owned life insurance
 
58,433

 
57,997

 
Deferred tax assets, net
 
9,627

 
7,180

 
Other assets
 
29,793

 
24,389

 
Total assets
 
$
3,510,987

 
$
3,565,184

 
 
 
 
 
 
 
Liabilities
 
 

 
 

 
Demand and other non-interest bearing deposits
 
$
342,192

 
$
349,055

 
NOW deposits
 
448,992

 
466,610

 
Savings deposits
 
361,591

 
364,799

 
Money market deposits
 
303,777

 
305,275

 
Time deposits
 
884,848

 
866,346

 
Total deposits
 
2,341,400

 
2,352,085

 
Senior borrowings
 
742,198

 
786,688

 
Subordinated borrowings
 
43,018

 
43,033

 
Total borrowings
 
785,216

 
829,721

 
Other liabilities
 
32,214

 
28,737

 
Total liabilities
 
3,158,830

 
3,210,543

 
(continued)
 
 
Shareholders’ equity
 
 

 
 

 
Capital stock, par value $2.00; authorized 20,000,000 shares; issued 16,428,388 and 16,428,388 shares at March 31, 2018 and December 31, 2017, respectively
 
32,857

 
32,857

 
Additional paid-in capital
 
186,969

 
186,702

 
Retained earnings
 
150,701

 
144,977

 
Accumulated other comprehensive loss
 
(13,156
)
 
(4,554
)
 
Less: cost of 969,352 and 985,532 shares of treasury stock at March 31, 2018 and December 31, 2017, respectively
 
(5,214
)
 
(5,341
)
 
Total shareholders’ equity
 
352,157

 
354,641

 
Total liabilities and shareholders’ equity
 
$
3,510,987

 
$
3,565,184


The accompanying notes are an integral part of these consolidated financial statements.

4


BAR HARBOR BANKSHARES AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
 
 
Three Months Ended March 31,
(in thousands, except per share data)
 
2018
 
2017
Interest and dividend income
 
 
 
 
Loans
 
$
25,126

 
$
21,194

Securities and other
 
5,651

 
4,991

Total interest and dividend income
 
30,777

 
26,185

Interest expense
 
 

 
 

Deposits
 
3,985

 
2,210

Borrowings
 
3,634

 
2,603

Total interest expense
 
7,619

 
4,813

Net interest income
 
23,158

 
21,372

Provision for loan losses
 
795

 
795

Net interest income after provision for loan losses
 
22,363

 
20,577

Non-interest income
 
 

 
 

Trust and investment management fee income
 
2,962

 
2,864

Insurance brokerage service income
 

 
364

Customer service fees
 
2,224

 
1,773

Bank-owned life insurance income
 
446

 
399

Other income
 
606

 
546

Total non-interest income
 
6,238

 
5,946

Non-interest expense
 
 

 
 

Salaries and employee benefits
 
10,989

 
10,321

Occupancy and equipment
 
3,073

 
2,666

Loss on premises and equipment, net
 

 
95

Outside services
 
560

 
597

Professional services
 
433

 
440

Communication
 
180

 
368

Amortization of intangible assets
 
207

 
180

Acquisition, conversion and other expenses
 
335

 
3,112

Other expenses
 
3,075

 
3,052

Total non-interest expense
 
18,852

 
20,831

 
 
 
 
 
Income before income taxes
 
9,749

 
5,692

Income tax expense
 
1,937

 
1,481

Net income
 
$
7,812

 
$
4,211

 
 
 
 
 
Earnings per share:
 
 

 
 

Basic
 
$
0.51

 
$
0.29

Diluted
 
$
0.50

 
$
0.29

 
 
 
 
 
Weighted average common shares outstanding:
 
 
 
 
Basic
 
15,448

 
14,471

Diluted
 
15,553

 
14,591


The accompanying notes are an integral part of these consolidated financial statements.

5


BAR HARBOR BANKSHARES AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 
 
 
Three Months Ended March 31,
(in thousands)
 
2018
 
2017
Net income
 
$
7,812

 
$
4,211

Other comprehensive income (loss), before tax:
 
 

 
 

Changes in unrealized loss on securities available-for-sale
 
(10,702
)
 
1,095

Changes in unrealized loss on derivative hedges
 
654

 
(338
)
Changes in unrealized loss on pension
 
41

 
34

Income taxes related to other comprehensive income (loss):
 
 

 
 

Changes in unrealized loss on securities available-for-sale
 
2,550

 
(327
)
Changes in unrealized loss on derivative hedges
 
(155
)
 
198

Changes in unrealized loss on pension
 
(10
)
 
2

Total other comprehensive (loss) income
 
(7,622
)
 
664

Total comprehensive income
 
$
190

 
$
4,875


The accompanying notes are an integral part of these consolidated financial statements.


6


BAR HARBOR BANKSHARES AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(in thousands)
 
Common stock amount
 
Additional paid-in capital
 
Retained earnings
 
Accumulated other comprehensive income
 
Treasury stock
 
Total
Balance at December 31, 2016
 
$
13,577

 
$
23,027

 
$
130,489

 
$
(4,326
)
 
$
(6,027
)
 
$
156,740

 
 
 
 
 
 
 
 
 
 
 
 
 
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 

 

 
4,211

 

 

 
4,211

Other comprehensive loss
 

 

 

 
664

 

 
664

Total comprehensive income
 

 

 
4,211

 
664

 

 
4,875

Cash dividends declared ($0.19 per share)
 

 

 
(2,870
)
 

 

 
(2,870
)
Acquisition of Lake Sunapee Bank Group
 
8,328

 
173,591

 

 

 

 
181,919

Net issuance (23,288) to employee stock plans, including related tax effects
 

 
130

 

 

 
199

 
329

Three-for-two stock split
 
10,952

 
(10,952
)
 
(16
)
 

 

 
(16
)
Recognition of stock based compensation
 

 
71

 

 

 

 
71

Balance at March 31, 2017
 
$
32,857

 
$
185,867

 
$
131,814

 
$
(3,662
)
 
$
(5,828
)
 
$
341,048

 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2017
 
$
32,857

 
$
186,702

 
$
144,977

 
$
(4,554
)
 
$
(5,341
)
 
$
354,641

 
 
 
 
 
 
 
 
 
 
 
 
 
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 

 

 
7,812

 

 

 
7,812

Other comprehensive loss
 

 

 

 
(7,622
)
 

 
(7,622
)
Total comprehensive income
 

 

 
7,812

 
(7,622
)
 

 
190

Cash dividends declared ($0.56 per share)
 

 

 
(2,884
)
 

 

 
(2,884
)
Net issuance (16,180 shares) to employee stock plans, including related tax effects
 

 
(112
)
 

 

 
127

 
15

Modified retrospective basis adoption of Revenue Recognition Accounting Codification Standard 606
 

 

 
(184
)
 

 

 
(184
)
Reclassification of the income tax effects of the Tax Cuts and Jobs Act from accumulated other comprehensive income for adoption of ASU 2018-02
 

 

 
980

 
(980
)
 

 

Recognition of stock based compensation
 

 
379

 

 

 

 
379

Balance at March 31, 2018
 
$
32,857

 
$
186,969

 
$
150,701

 
$
(13,156
)
 
$
(5,214
)
 
$
352,157


The accompanying notes are an integral part of these consolidated financial statements.


7


BAR HARBOR BANKSHARES AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS 
 
 
Three Months Ended March 31,
(in thousands)
 
2018
 
2017
Cash flows from operating activities:
 
 

 
 

Net income
 
$
7,812

 
$
4,211

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Provision for loan losses
 
795

 
795

Net amortization of securities
 
1,059

 
1,235

Deferred tax benefit
 

 
(237
)
Change in unamortized net loan costs and premiums
 
368

 
(29
)
Premises and equipment depreciation and amortization expense
 
841

 
838

Stock-based compensation expense
 
379

 
71

Accretion of purchase accounting entries, net
 
(704
)
 
(606
)
Amortization of other intangibles
 
207

 
180

Income from cash surrender value of bank-owned life insurance policies
 
(446
)
 
(399
)
Loss on premises and equipment, net
 

 
95

Net change in other
 
(1,444
)
 
(5,152
)
Net cash provided by operating activities
 
8,867

 
1,002

 
 
 
 
 
Cash flows from investing activities:
 
 

 
 

Proceeds from maturities, calls and prepayments of securities available for sale
 
23,350

 
30,208

Purchases of securities available for sale
 
(36,428
)
 
(81,574
)
Net change in loans
 
21,033

 
(16,388
)
Purchase of loans
 

 
(18,621
)
Purchase of Federal Home Loan Bank stock
 

 
(5,624
)
Purchase of premises and equipment, net
 
(1,595
)
 
(1,652
)
Acquisitions, net of cash (paid) acquired
 

 
39,537

Proceeds from sale of other real estate
 

 
81

Net cash provided by/(used in) investing activities
 
6,360

 
(54,033
)
 
 
 
 
 
Cash flows from financing activities:
 
 

 
 

Net decrease in deposits
 
(10,740
)
 
(26,495
)
Net change in short-term advances from the Federal Home Loan Bank
 
(50,511
)
 
141,555

Net change in long term advances from the Federal Home Loan Bank
 
6,021

 
(18,513
)
Net change in securities sold repurchase agreements
 

 
(7,372
)
Exercise of stock options
 
15

 
313

Common stock cash dividends paid
 
(2,884
)
 
(2,870
)
Net cash (used in)/provided by financing activities
 
(58,099
)
 
86,618

 
 
 
 
 
Net change in cash and cash equivalents
 
(42,872
)
 
33,587

Cash and cash equivalents at beginning of year
 
90,685

 
8,439

Cash and cash equivalents at end of year
 
$
47,813

 
$
42,026

 
 
 
 
 
 
 
Three Months Ended March 31,
(in thousands)
 
2018
 
2017
Supplemental cash flow information:
 
 

 
 

Interest paid
 
$
7,740

 
$
4,795

Income taxes paid, net
 
45

 
296

 
 
 
 
 
Acquisition of non-cash assets and liabilities:
 
 
 
 
Assets acquired
 

 
1,454,076

Liabilities assumed
 

 
1,406,672

 
 
 
 
 
Other non-cash changes:
 
 
 
 
Real estate owned acquired in settlement of loans
 
94

 
32


The accompanying notes are an integral part of these consolidated financial statements.


8


BAR HARBOR BANKSHARES AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

NOTE 1.          BASIS OF PRESENTATION

The consolidated financial statements (the “financial statements”) of Bar Harbor Bankshares and its subsidiaries (the “Company” or “Bar Harbor”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Bar Harbor Bankshares is a Maine Financial Institution Holding Company for the purposes of the laws of the state of Maine, and as such is subject to the jurisdiction of the Superintendent of the Maine Bureau of Financial Institutions. These financial statements include the accounts of the Company, its wholly-owned subsidiary Bar Harbor Bank & Trust (the "Bank") and the Bank’s consolidated subsidiaries. The results of operations of companies or assets acquired are included only from the dates of acquisition. All material wholly-owned and majority-owned subsidiaries are consolidated unless GAAP requires otherwise.

In addition, these interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X, and accordingly, certain information and footnote disclosures normally included in financial statements prepared according to GAAP have been omitted.

The results for any interim period are not necessarily indicative of results for the full year. These consolidated financial statements should be read in conjunction with the audited financial statements and note disclosures for the Company's Annual Report on Form 10-K for the year ended December 31, 2017 previously filed with the Securities and Exchange Commission (the "SEC").  In management's opinion, all adjustments necessary for a fair statement are reflected in the interim periods presented.

Reclassifications: Whenever necessary, amounts in the prior years’ financial statements are reclassified to conform to current presentation.  The reclassifications had no impact on net income in the Company’s consolidated income statement.  

Tax Cuts and Jobs Act

Public law No. 115-97, known as the Tax Cuts and Jobs Act (the "Tax Act"), enacted on December 22, 2017, reduced the U.S. federal corporate tax rate from 35% to 21% effective January 1, 2018. Also on December 22, 2017, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 ("SAB 118"), which provides guidance on accounting for tax effects of the Tax Act. SAB 118 provides a measurement period of up to one year from the enactment date to complete the accounting. Any adjustments during this measurement period will be included in net earnings from continuing operations as an adjustment to income tax expense in the reporting period when such adjustments are determined. Based on the information available and current interpretation of the rules, the Company estimated the impact of the reduction in the corporate tax rate and remeasurement of certain deferred tax assets and liabilities. The provisional amount recorded in the fourth quarter of 2017 related to the remeasurement of the Company's deferred tax balance resulted in additional income tax expense of $4.0 million. The final impact of the Tax Act may differ from these estimates as a result of changes in management's interpretations and assumptions, as well as new guidance issued by the Internal Revenue Service.


9


Recent Accounting Pronouncements

The following table provides a brief description of recent accounting standards updates (ASU") that could have a material impact to the Company’s consolidated financial statements upon adoption:
Standard
Description
Required Date of Adoption
Effect on financial statements
Standards Adopted in 2018
ASU 2014-09, Revenue from Contracts with Customers
This ASU supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry topics of the Codification. The core principle of the ASU is an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU may be adopted either retrospectively or on a modified retrospective basis.
January 1, 2018
The Company adopted this ASU as of January 1, 2018, upon completion of an analysis to identify all revenue streams within the scope of this accounting guidance. After reviewing the related contracts as prescribed by the five steps within this ASU, one contract resulted in recognition of a $241,000 liability with a $184,000 impact to retained earnings net of tax. The remaining changes had no material impact on the consolidated financial statements. See below for more detail and transitional disclosures.
ASU 2015-14, Deferral of the Effective Date
ASU 2016-08, Principal versus Agent Considerations
ASU 2016-10, Identifying Performance Obligations and Licensing
ASU 2016-12, Narrow-Scope Improvements and Practical Expedience
ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers
ASU 2016-01, Recognition and Measurement of Financial Assets and Liabilities
This ASU amends ASC Topic 825, Financial Instruments-Overall, and addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Among other minor amendments applicable to the Company, the main provisions require investments in equity securities to be measured at fair value with changes in fair value recognized through net income unless they qualify for a practicability exception (excludes investments accounted for under the equity method of accounting or those that result in consolidation of the investee). Except for disclosure requirements that will be adopted prospectively, the ASU must be adopted on a modified retrospective basis.
January 1, 2018
The Company adopted this ASU as of January 1, 2018, although it did not have any equity securities that would be in scope of this ASU. However, the Company is subject to the exit notion pricing required in fair value disclosures and after calculating the fair value, the Company had no material impact to its consolidated financial statements.
ASU-2018-03, Technical Corrections and Improvements to Financial Instruments
ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments
This ASU amends Topic 230, Statement of Cash Flows, and provides clarification with respect to classification within the statement of cash flows where current guidance is unclear or silent. The ASU should be adopted retrospectively. If it is impractical to apply the guidance retrospectively for an issue, the amendments related to the issue would be applied prospectively.
January 1, 2018
The adoption of this ASU did not have a material impact on the Company's consolidated financial statements.
ASU 2017-07, Compensation- Retirement Benefits
This ASU amends Topic 715, Retirement Benefits, and provides more prescriptive guidance around the presentation of net period pension and postretirement benefit cost in the income statement. The amendment requires the service cost component be disaggregated from other components of net periodic benefit cost in the income statement.
January 1, 2018
The adoption of this ASU did not have a material impact on the Company's consolidated financial statements.
Early adoption is permitted.

10


Standard
Description
Required Date of Adoption
Effect on financial statements
Standards Adopted in 2018 (continued)
ASU 2017-09, Stock Compensation: Scope of Modification Accounting
This ASU amends Topic 718, Compensation- Stock Compensation, and clarifies when modification accounting should be applied to changes in terms or conditions of share-based payment awards. The amendments narrow the scope of modification accounting by clarifying that modification accounting should be applied to awards if the change affects the fair value, vesting conditions, or classification of the award. The amendments do not impact current disclosure requirements for modifications, regardless of whether modification accounting is required under the new guidance.
January 1, 2018
The adoption of this ASU did not have a material impact on the Company's consolidated financial statements.
ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
The ASU amends Topic 220, Income Statement-Reporting Comprehensive Income, and is intended to help organizations reclassify certain stranded income tax effects in accumulated other comprehensive income resulting from the recently enacted Tax Reform. The guidance allows entities to reclassify stranded tax effects in accumulated other comprehensive income to retained earnings.
January 1, 2019
The Company adopted this ASU as of March 31, 2018. The effect of the reclassification resulted in an increase to retained earnings and a decrease to accumulated other comprehensive income of $980,000 with zero net effect on total stockholders' equity.
ASU 2018-05, Income Taxes (Topic 740) SEC Amendments
Early adoption is permitted.
Standard
Description
Required Date of Adoption
Effect on financial statements
Standards Not Yet Adopted
ASU 2016-02, Leases
This ASU creates ASU Topic 842, Leases, and supersedes Topic 840, Leases. The new guidance requires lessees to record a right-of-use asset and a corresponding liability equal to the present value of future rental payments on their balance sheets for all leases with a term greater than one year. There are not significant changes to lessor accounting; however, there are certain improvements made to align lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. This guidance expands both quantitative and qualitative required disclosures. This ASU should be adopted on a modified retrospective basis.
January 1, 2019
The Company is currently evaluating its operating lease arrangement under this ASU. Early indications suggest the Company will need to recognize right-of-use assets and lease liabilities for most of its operating lease commitments.
ASU 2018-01, Leases (Topic 842) Land Easement Practical Expedient for Transition to Topic 842

11


Standard
Description
Required Date of Adoption
Effect on financial statements
Standards Not Yet Adopted (continued)
ASU 2016-13, Measurement of Credit Losses on Financial Instruments
This ASU amends Topic 326, Financial Instruments- Credit Losses to replace the current incurred loss accounting model with a current expected credit loss approach (CECL) for financial instruments measured at amortized cost and other commitments to extend credit. The amendments require entities to consider all available relevant information when estimating current expected credit losses, including details about past events, current conditions, and reasonable and supportable forecasts. The resulting allowance for credit losses is to reflect the portion of the amortized cost basis that the entity does not expect to collect. The amendments also eliminate the current accounting model for purchased credit impaired loans and debt securities. Additional quantitative and qualitative disclosures are required upon adoption.
January 1, 2020
Adoption of this ASU is expected to primarily change how the Company estimates credit losses with the application of the expected credit loss model. In addition, the Company expects the ASU to change the presentation of credit losses for AFS debt securities through an allowance method rather than as a direct write-off. The Company is in the process of evaluating loan loss estimation models to comply with the guidance under this ASU, which may result in a higher credit loss estimate.
While the CECL model does not apply to available for sale debt securities, the ASU does require entities to record an allowance when recognizing credit losses for AFS securities, rather than reduce the amortized cost of the securities by direct write-offs.
The ASU should be adopted on a modified retrospective basis. Entities that have loans accounted for under ASC 310-30 at the time of adoption should prospectively apply the guidance in this amendment for purchase credit deteriorated assets.
ASU 2017-04, Simplifying the Test for Goodwill Impairment
This ASU amends Topic 350, Intangibles-Goodwill and Other, and eliminates Step 2 from the goodwill impairment test.
January 1, 2020
Adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.
Early adoption is permitted.
ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities
This ASU amends ASC 815, Derivatives and Hedging to (1) improve the transparency and understandability of information conveyed to financial statement users about an entity's risk management activities by better aligning the entity's financial reporting for hedging relationships with those risk management activities and (2) reduce the complexity of and simplify the application of hedge accounting by preparers.
January 1, 2019
Adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

TRANSITIONAL DISCLOSURES FOR RECENTLY ADOPTED ACCOUNTING PROUNOUNCEMENTS

Adoption of "ASC 606", Revenue from Contracts with Customers

The Company completed its overall assessment of revenue streams and review of related contracts potentially affected by the adoption, including trust and investment management fees, financial services fees, interchange fees, customer deposit fees, and other customer service fees. Based on this assessment, the Company concluded that Accounting Standards Codification ("ASC") 606 did not materially change the method in which the Company currently recognizes revenue for these revenue streams. The Company also completed its evaluation of certain costs related to these revenue streams to determine whether such costs should be presented as expenses or contra-revenue (i.e., gross vs. net). Based on its evaluation, the Company determined the classification of certain debit and credit card related costs should change (i.e., costs previously recorded as expense is now recorded as contra-revenue, and vice versa). These classification changes resulted in immaterial changes to both revenue and expense. These changes did not have a material effect to non-interest income or expense. Additionally, the Company reviewed deferred revenue from benefits received under various incentive contracts. The Company noted one contract was significantly impacted by the adoption, which the related financial impact and details are reflected in the tables below.

12


The Company adopted ASC 606 on January 1, 2018, using the modified retrospective method for all contracts not completed as of the date of adoption. For contracts that were modified before the effective date, the Company reflected the aggregate effect of all modifications when identifying performance obligations and allocating transaction price in accordance with practical expedient in paragraph ASC 606-10-65-1-(f)-(3), which did not have a material effect on the cumulative impact of adopting ASC 606. The reported results for 2018 reflect the application of ASC 606 guidance while the reported results for 2017 were prepared under the guidance of ASC 605, Revenue Recognition (ASC 605).

The adoption effected the Company's accounting for deferred revenue related to an upfront incentive received in connection with a co-branding agreement. The incentive, which was previously amortized over the life of the contract is now constrained by a termination penalty based on future customer transaction volume. As a result, the remaining deferred liability was re-established to its original value, which increased deferred tax assets by $57 thousand and reduced retained earnings by $184 thousand. Operating results during the first quarter were not effected.

Financial Statement Impact

The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption were as follows:
 (in thousands)
 
Balance at December 31, 2017
 
Adjustments due to Topic 606
 
Balance at January 1, 2018
Balance Sheet
 
 
 
 
 
 
Other Assets
 
$
24,389

 
$
57

 
$
24,446

Other Liabilities
 
28,737

 
241

 
28,978

Retained Earnings
 
144,977

 
(184
)
 
144,793


The impact of the adoption on our consolidated March 31, 2018 balance sheet was as follows:
 (in thousands)
 
As Reported
 
Balances Without Adoption of ASC 606
 
Effect of Change
Higher / (Lower)
Balance Sheet
 
 
 
 
 
 
Other Assets
 
$
29,793

 
$
29,736

 
$
57

Other Liabilities
 
32,214

 
28,694

 
254

Retained Earnings
 
150,701

 
150,885

 
(184
)

Disaggregation of Revenue

The following table disaggregates the Company’s revenue by major business line and timing of transfer of products or services:
 
 
Three Months Ended March 31, 
 (in thousands)
 
2018
Major Products/Service Lines 
 
 
Trust management fees
 
$
2,741

Financial services fees
 
221

Interchange fees
 
1,024

Customer deposit fees
 
979

Other customer service fees
 
221

 Total
 
$
5,186



13


 
 
Three Months Ended March 31, 
 (in thousands)
 
2018
Timing of Revenue Recognition
 
 
Products and services transferred at a point in time
 
$
2,351

Products and services transferred over time
 
2,835

Total
 
$
5,186


Trust Management Fees
The trust management business generates revenue through a range of fiduciary services including trust and estate administration, wealth advisory, and investment management to individuals, businesses, not-for-profit organizations, and municipalities. Revenue from these services are generally recognized over time and is typically based on a time elapsed measure of progress. Certain fees, such as bill paying fees, distribution fees, real estate sale fees, and supplemental tax service fees, are recorded as revenue at a point in time upon the completion of the service.

Financial Services Fees
Bar Harbor Financial Services is a branch office of Infinex, an independent registered broker dealer offering securities and insurance products not affiliated with the Company or its subsidiaries. The Company has a revenue sharing agreement with Infinex for any financial service fee income generated. Financial services fees are recognized at a point in time upon the completion of monthly service requirements.

Interchange Fees
The Company earns interchange fees from transaction fees that merchants pay whenever a customer uses a debit card to make a purchase from their store. The fees are paid to the card-issuing bank to cover handling costs, fraud, bad debt costs and the risk involved in approving the payment. Interchange fees are generally recognized as revenue at a point in time upon the completion of a debit card transaction.

Customer Deposit Fees
The Customer Deposit business offers a variety of deposit accounts with a range of interest rates, fee schedules and other terms, which are designed to meet the customer's financial needs. Additional depositor related services provided to customers include ATM, bank-by-phone, internet banking, internet bill pay, mobile banking, and other cash management services which include remote deposit capture, ACH origination, and wire transfers. These customer deposit fees are generally recognized by the Company at a point in time upon the completion of the service.

Other Customer Service Fees
The Company has certain incentive and referral fee arrangements with independent third parties in which fees are earned for new account activity, product sales, or transaction volume generated for the respective third parties. The Company also earns a percentage of the fees generated from third party credit card plans promoted through the Bank. Revenue from these incentive and referral fee arrangements are recognized over time using the right to invoice measure of progress.

Transaction Price Allocated to Future Performance Obligations

ASC 606 requires the Company to disclose the aggregate amount of transaction price allocated to performance obligations that have not yet been satisfied as of March 31, 2018. The guidance provides certain practical expedients which limit this requirement and, therefore, the Company does not disclose the value of unsatisfied performance obligations for: (1) contracts with an original expected length of one year or less, (2) contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed or (3) variable consideration allocated entirely to a wholly unsatisfied performance obligation for which consideration is allocated in accordance with paragraph 606-10-32-40. All revenue accounted for under the scope of ASC 606 meets one of these three criteria.


14


Contract Balances from Contracts with Customers

The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers.
 (in thousands)
 
Balance at March 31, 2018
 
Balance at December 31, 2017
Balances from contracts with customers only: 
 
 
 
 
Other Assets
 
$
4,175

 
$
972

Other Liabilities
 
3,774

 
342


The timing of revenue recognition, billings and cash collections results in receivables, contract assets and contract liabilities on the consolidated balance sheets. For most customer contracts, fees are deducted directly from customer accounts and, therefore, there is no associated impact on the accounts receivable balance. For certain types of service contracts, the Company has an unconditional right to consideration under the service contract and an accounts receivable balance is recorded for services completed. When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met.

Costs to Obtain and Fulfill a Contract
The Company currently expenses contract costs for processing and administrative fees for debit card transactions. The Company also expenses custody fees and transactional costs associated with securities transactions as well as third party tax preparation fees. Due to the period being less than one year, the Company will apply the practical expedient in paragraph 340-40-25-4, whereby the Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets the Company otherwise would have recognized is one year or less.

15


NOTE 2.    SECURITIES AVAILABLE FOR SALE

The following is a summary of securities available for sale:
(in thousands)
 
Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Fair Value
March 31, 2018
 
 

 
 

 
 

 
 

Securities available for sale
 
 

 
 

 
 

 
 

Debt securities:
 
 

 
 

 
 

 
 

Obligations of US Government sponsored enterprises
 
$
6,982

 
$
1

 
$
6

 
$
6,977

Mortgage-backed securities:
 
 
 
 
 
 
 


  US Government-sponsored enterprises
 
459,601

 
838

 
11,264

 
449,175

  US Government agency
 
92,286

 
275

 
2,165

 
90,396

  Private label
 
484

 
137

 
5

 
616

Obligations of states and political subdivisions thereof
 
136,244

 
1,079

 
2,046

 
135,277

Corporate bonds
 
36,405

 
161

 
448

 
36,118

Total securities available for sale
 
$
732,002

 
$
2,491

 
$
15,934

 
$
718,559

 
 
 
 
 
 
 
 
 
December 31, 2017
 
 

 
 

 
 

 
 

Securities available for sale
 
 

 
 

 
 

 
 

Debt securities:
 
 

 
 

 
 

 
 

Obligations of US Government sponsored enterprises
 
$
6,967

 
$
5

 
$

 
$
6,972

Mortgage-backed securities:
 
 
 
 
 
 
 
 
  US Government-sponsored enterprises
 
447,081

 
1,738

 
5,816

 
443,003

  US Government agency
 
96,357

 
413

 
1,174

 
95,596

  Private label
 
529

 
150

 
5

 
674

Obligations of states and political subdivisions thereof
 
138,522

 
2,407

 
729

 
140,200

Corporate bonds
 
30,527

 
323

 
53

 
30,797

Total securities available for sale
 
$
719,983

 
$
5,036

 
$
7,777

 
$
717,242


The amortized cost and estimated fair value of available for sale (“AFS”) securities segregated by contractual maturity at March 31, 2018 are presented below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Mortgage-backed securities are shown in total, as their maturities are highly variable.
 
 
Available for sale
(in thousands)
 
Amortized Cost
 
Fair Value
Within 1 year
 
$
7,012

 
$
7,007

Over 1 year to 5 years
 
15,718

 
15,521

Over 5 years to 10 years
 
46,614

 
46,574

Over 10 years
 
110,287

 
109,270

Total bonds and obligations
 
179,631

 
178,372

Mortgage-backed securities
 
552,371

 
540,187

Total securities available for sale
 
$
732,002

 
$
718,559



16


Securities with unrealized losses, segregated by the duration of their continuous unrealized loss positions, are summarized as follows:
 
 
Less Than Twelve Months
 
Over Twelve Months
 
Total
(In thousands)
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
March 31, 2018
 
 

 
 

 
 

 
 

 
 

 
 

Securities available for sale
 
 

 
 

 
 

 
 

 
 

 
 

Debt securities:
 
 

 
 

 
 

 
 

 
 

 
 

Obligations of US Government sponsored enterprises
 
$
6

 
$
3,978

 
$

 
$

 
$
6

 
$
3,978

Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 


  US Government-sponsored enterprises
 
5,388

 
267,678

 
5,876

 
117,825

 
11,264

 
385,503

  US Government agency
 
1,168

 
49,816

 
997

 
28,727

 
2,165

 
78,543

  Private label
 

 
1

 
5

 
56

 
5

 
57

Obligations of states and political subdivisions thereof
 
475

 
39,618

 
1,571

 
26,759

 
2,046

 
66,377

Corporate bonds
 
448

 
25,549

 

 

 
448

 
25,549

Total securities available for sale
 
$
7,485

 
$
386,640

 
$
8,449

 
$
173,367

 
$
15,934

 
$
560,007

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
 
 

 
 

 
 

 
 

 
 

 
 

Securities available for sale
 
 

 
 

 
 

 
 

 
 

 
 

Debt securities:
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
  US Government-sponsored enterprises
 
$
1,895

 
$
189,486

 
$
3,921

 
$
117,156

 
$
5,816

 
$
306,642

  US Government agency
 
559

 
45,221

 
615

 
30,155

 
1,174

 
75,376

  Private label
 

 
8

 
5

 
130

 
5

 
138

Obligations of states and political subdivisions thereof
 
58

 
8,298

 
671

 
27,727

 
729

 
36,025

Corporate bonds
 
53

 
8,943

 

 

 
53

 
8,943

Total securities available for sale
 
$
2,565

 
$
251,956

 
$
5,212

 
$
175,168

 
$
7,777

 
$
427,124


Securities Impairment: As a part of the Company’s ongoing security monitoring process, the Company identifies securities in an unrealized loss position that could potentially be other-than-temporarily impaired.  For the three months ended March 31, 2018 and 2017 the Company did not record any other-than-temporary impairment (“OTTI”) losses.
 
Three Months Ended March 31,
 
2018
 
2017
Estimated credit losses as of prior year end
$
1,697

 
$
1,697

Reductions for securities paid off during the period

 

Estimated credit losses at end of the period
$
1,697

 
$
1,697


For securities with unrealized losses, the following information was considered in determining that the impairments were not other-than-temporary:

The Company expects to recover its amortized cost basis on all debt securities in its AFS portfolio. Furthermore, the Company does not intend to sell nor does it anticipate that it will be required to sell any of its securities in an unrealized loss position as of March 31, 2018, prior to this recovery. The Company’s ability and intent to hold these securities until recovery is supported by the Company’s strong capital and liquidity positions as well as its historically low portfolio turnover.

17


The following summarizes, by investment security type, the basis for the conclusion for the debt securities in an unrealized loss position within the Company’s AFS were not other-than-temporarily impaired at March 31, 2018:

Obligations of US Government-sponsored enterprises
At March 31, 2018, 1 out of the total 2 securities in the Company’s portfolios of AFS US Government sponsored enterprises were in unrealized loss positions. Aggregate unrealized losses represented 0.1% of the amortized cost of securities in unrealized loss positions.The Federal National Mortgage Association (“FNMA”) and Federal Home Loan Mortgage Corporation (“FHLMC”) guarantee the contractual cash flows of all of the Company’s US government-sponsored enterprises. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. All securities are performing.

US Government-sponsored enterprises
At March 31, 2018, 455 out of the total 781 securities in the Company’s portfolios of AFS US Government sponsored enterprises were in unrealized loss positions. Aggregate unrealized losses represented 2.8% of the amortized cost of securities in unrealized loss positions.The FNMA and FHLMC guarantee the contractual cash flows of all of the Company’s US government-sponsored enterprises. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. All securities are performing.

US Government agency
At March 31, 2018, 117 out of the total 203 securities in the Company’s portfolios of AFS US Government agency securities were in unrealized loss positions. Aggregate unrealized losses represented 2.7% of the amortized cost of securities in unrealized loss positions. The Government National Mortgage Association (“GNMA”) guarantees the contractual cash flows of all of the Company’s US Government agency securities. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. All securities are performing.

Private label
At March 31, 2018, 6 of the total 26 securities in the Company’s portfolio of AFS private-label mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 7.9% of the amortized cost of securities in unrealized loss positions. Based upon the foregoing considerations, and the expectation that the Company will receive all of the future contractual cash flows related to the amortized cost on these securities, the Company does not consider there to be any additional other-than-temporary impairment with respect to these securities.

Obligations of states and political subdivisions thereof
At March 31, 2018, 122 of the total 262 securities in the Company’s portfolio of AFS municipal bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 3.0% of the amortized cost of securities in unrealized loss positions. The Company continually monitors the municipal bond sector of the market carefully and periodically evaluates the appropriate level of exposure to the market. At this time, the Company feels the bonds in this portfolio carry minimal risk of default and the Company is appropriately compensated for the risk. There were no material underlying credit downgrades during the quarter. All securities are performing.

Corporate bonds
At March 31, 2018, 9 out of the total 16 securities in the Company’s portfolio of AFS corporate bonds were in an unrealized loss position. The aggregate unrealized loss represents 1.7% of the amortized cost of bonds in unrealized loss positions. The Company reviews the financial strength of all of these bonds and has concluded that the amortized cost remains supported by the expected future cash flows of these securities.



18


Visa Class B Common Shares
The Company was a member of the Visa USA payment network and was issued Class B shares in connection with the Visa Reorganization and the Visa Inc. initial public offering in March 2008. The Visa Class B shares are transferable only under limited circumstances until they can be converted into shares of the publicly traded class of Visa stock. This conversion cannot happen until the settlement of certain litigation, which is indemnified by Visa members. Since its initial public offering, Visa has funded a litigation reserve based upon a change in the conversion ratio of Visa Class B shares into Visa Class A shares. At its discretion, Visa may continue to increase the conversion rate in connection with any settlements in excess of amounts then in escrow for that purpose and reduce the conversion rate to the extent it adds any funds to the escrow in the future. Based on the existing transfer restriction and the uncertainty of the litigation, the Company has recorded its Visa Class B shares on its statements of condition at zero value for all reporting periods since 2008. At March 31, 2018, the Company owned 11,623 of Visa Class B shares with a then current conversion ratio to Visa Class A shares of 1.648 (or 19,158 Visa Class A shares). Upon termination of the existing transfer restriction and settlement of the litigation, and to the extent the Company continues to own such Visa Class B shares in the future, the Company expects to record its Visa Class B shares at fair value.


19


NOTE 3.    LOANS

The Company’s loan portfolio is comprised of the following segments: commercial real estate, commercial and industrial, residential real estate, and consumer loans. Commercial real estate loans includes commercial construction and land development and other commercial real estate loans. Commercial and industrial loans includes loans to commercial businesses, agricultural, and tax exempt loans. Residential real estate loans consists of mortgages for 1-4 family housing. Consumer loans include home equity loans and other installment lending.

The Company’s lending activities are principally conducted in Maine, New Hampshire, and Vermont.

Total loans include business activity loans and acquired loans. Acquired loans are those loans acquired from Lake Sunapee Bank Group. The following is a summary of total loans:
 
 
March 31, 2018
 
December 31, 2017
(in thousands)
 
Business
Activities  Loans
 
Acquired
Loans
 
Total
 
Business
Activities  Loans
 
Acquired
Loans
 
Total
Commercial Real Estate:
 
 

 
 

 
 

 
 

 
 

 
 

Construction and land development
 
$
31,073

 
$
14,800

 
$
45,873

 
$
28,892

 
$
16,781

 
$
45,673

Other commercial real estate
 
512,093

 
266,755

 
778,848

 
505,119

 
275,954

 
781,073

Total Commercial Real Estate
 
543,166

 
281,555

 
824,721

 
534,011

 
292,735

 
826,746

 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and Industrial:
 
 

 
 

 
 

 
 

 
 

 
 

Other Commercial
 
210,304

 
65,198

 
275,502

 
198,051

 
68,069

 
266,120

Agricultural
 
26,309

 

 
26,309

 
27,588

 

 
27,588

Tax exempt
 
43,092

 
42,302

 
85,394

 
42,365

 
43,350

 
85,715

Total Commercial and Industrial
 
279,705

 
107,500

 
387,205

 
268,004

 
111,419

 
379,423

 
 
 
 
 
 
 
 
 
 
 
 
 
Total Commercial Loans
 
822,871

 
389,055

 
1,211,926

 
802,015

 
404,154

 
1,206,169

 
 
 
 
 
 
 
 
 
 
 
 
 
Residential Real Estate:
 
 

 
 

 
 

 
 

 
 

 
 

Residential mortgages
 
588,465

 
544,512

 
1,132,977

 
591,411

 
564,271

 
1,155,682

Total Residential Real Estate
 
588,465

 
544,512

 
1,132,977

 
591,411

 
564,271

 
1,155,682

 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer:
 
 

 
 
 
 

 
 

 
 

 
 

Home equity
 
52,100

 
57,766

 
109,866

 
51,376

 
62,217

 
113,593

Other consumer
 
7,580

 
2,070

 
9,650

 
7,828

 
2,341

 
10,169

Total Consumer
 
59,680

 
59,836

 
119,516

 
59,204

 
64,558

 
123,762

 
 
 
 
 
 
 
 
 
 
 
 
 
Total Loans
 
$
1,471,016

 
$
993,403

 
$
2,464,419

 
$
1,452,630

 
$
1,032,983

 
$
2,485,613


The carrying amount of the acquired loans at March 31, 2018 totaled $993.4 million. A subset of these loans was determined to have evidence of credit deterioration at acquisition date, which is accounted for in accordance with ASC 310-30. These purchased credit-impaired loans presently maintain a carrying value of $12.1 million (and a note balance of $16.6 million). These loans are evaluated for impairment through the periodic reforecasting of expected cash flows. Acquired loans considered not impaired at acquisition date had a carrying amount of $981.3 million as of March 31, 2018.




20


The following table summarizes activity in the accretable yield for the acquired loan portfolio that falls under the purview of ASC 310-30, Accounting for Certain Loans or Debt Securities Acquired in a Transfer:
 
 
Three Months Ended March 31,
(in thousands)
 
2018
 
2017
Balance at beginning of period
 
$
3,509

 
$

Acquisitions
 

 
3,398

Reclassification from nonaccretable difference for loans with improved cash flows
 
199

 

Changes in expected cash flows that do not affect the nonaccretable difference
 

 

Reclassification to troubled debt restructurings
 

 

Accretion
 
(361
)
 
(204
)
Balance at end of period
 
$
3,347

 
$
3,194


The following is a summary of past due loans at March 31, 2018 and December 31, 2017:

Business Activities Loans
(in thousands)
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
90 Days or Greater Past Due
 
Total Past
Due
 
Current
 
Total Loans
 
Past Due >
90 days and
Accruing
March 31, 2018
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial Real Estate:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Construction and land development
 
$

 
$
2

 
$
566

 
$
568

 
$
30,505

 
$
31,073

 
$

Other commercial real estate
 
1,008

 
158

 
6,656

 
7,822

 
504,271

 
512,093

 

Total Commercial Real Estate
 
1,008

 
160

 
7,222

 
8,390

 
534,776

 
543,166

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and Industrial:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Commercial
 
829

 
12

 
506

 
1,347

 
208,957

 
210,304

 

Agricultural
 
39

 
88

 
101

 
228

 
26,081

 
26,309

 
2

Tax exempt
 

 

 

 

 
43,092

 
43,092

 

Total Commercial and Industrial
 
868

 
100

 
607

 
1,575

 
278,130

 
279,705

 
2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Commercial Loans
 
1,876

 
260

 
7,829

 
9,965

 
812,906

 
822,871

 
2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential Real Estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgages
 
624

 
810

 
3,772

 
5,206

 
583,259

 
588,465

 

Total Residential Real Estate
 
624

 
810

 
3,772

 
5,206

 
583,259

 
588,465

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity
 
174

 
28

 
349

 
551

 
51,549

 
52,100

 

Other consumer
 
132

 
2

 

 
134

 
7,446

 
7,580

 

Total Consumer
 
306

 
30

 
349

 
685

 
58,995

 
59,680

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 

Total Loans
 
$
2,806

 
$
1,100

 
$
11,950

 
$
15,856

 
$
1,455,160

 
$
1,471,016

 
$
2




21


Business Activities Loans
(in thousands)
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
90 Days or Greater Past Due
 
Total Past
Due
 
Current
 
Total Loans
 
Past Due >
90 days and
Accruing
December 31, 2017
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Commercial Real Estate:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Construction and land development
 
$

 
$

 
$
637

 
$
637

 
$
28,255

 
$
28,892

 
$

Other commercial real estate
 
965

 
1,659

 
5,065

 
7,689

 
497,430

 
505,119

 
119

Total Commercial Real Estate
 
965

 
1,659

 
5,702

 
8,326

 
525,685

 
534,011

 
119

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and Industrial:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Commercial