UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A AMENDMENT NO. 1
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☑ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2020 | |
OR | |
☐ | 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 001-34893
STANDARD AVB FINANCIAL CORP.
(Exact Name of Registrant as Specified in its Charter)
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Maryland | 27-3100949 | ||||
(State or Other Jurisdiction of | | (I.R.S. Employer | |||
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2640 Monroeville Boulevard | | | 15146 | ||
(Address of Principal Executive Offices) | | (Zip Code) |
(412) 856-0363
(Telephone Number, including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | |||
Common Stock, par value $0.01 per share | | STND | | The NASDAQ Stock Market, LLC |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐◻ No ☑
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐◻ No ☑
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 ☑þ No ☐
Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑þ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large" large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer | Accelerated filer | Non-accelerated filer | Smaller reporting company | ||||||||
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Emerging growth company ☐ | | | |
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. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control and financial reporting under Section 404(b) of the Sarbanes-Oxley Act (12 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its annual report. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
As of March 1, 2019,April 27, 2021, there were issued and outstanding 4,819,9194,773,716 shares of the Registrant’s Common Stock.
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, computed by reference to the last sales price on June 30, 2018April 27, 2021 was $145.1$157.1 million.
EXPLANATORY NOTE
This Amendment No. 1 to the Annual Report on Form 10-KFor The Year Ended
(this “Amendment”) amends the Annual Report on Form 10-K for the fiscal year ended December 31, 2018Table2020 originally filed on March 31, 2021 (the “Original Filing”) by Standard AVB Financial Corp., a Maryland corporation (“Standard” or the “Company”). Standard is filing this Amendment to present the information required by Part III of Contents
On September 25, 2020 the Company and Dollar Mutual Bancorp (“Dollar”) announced they had entered into a definitive agreement under which Dollar will acquire the Company. The transaction was approved by the Company’s stockholders on January 19, 2021 and is expected to close in the first half of 2021. If the transaction closes within this anticipated timeframe, the Company does not anticipate holding an annual meeting of stockholders prior to closing.
Except as described above, no other changes have been made to the Original Filing. The Company has not updated the disclosures contained therein to reflect any events which occurred at a date subsequent to the filing of the Original Filing.
TABLE OF CONTENTS
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 11 | ||||||||
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Certain Relationships and Related Transactions, and Director Independence | 13 | ||||||||
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PART I
Item 10. Directors, Executive Officers and Corporate Governance
The Board of Directors currently consists of twelve (12) members and is divided into three classes, with one class of directors elected each year.
The biographies of each of the useboard members below contain information regarding the person’s business experience and the experiences, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee and the Board of words suchDirectors to determine that the person should serve as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect,” “will,” “may” and wordsa director. The principal occupation during the past five years of similar meaning. These forward-looking statements include, but are not limited to:
Directors
The following directors of Standard have terms ending in the NASDAQ market place underyear ending December 31, 2021:
Andrew W. Hasley, CPA, MBA, has been President and CEO of Standard Bank since July 1, 2020, and has been a director of Standard and the symbol “STND.”
Thomas J. Rennie, CPA, MSB, CGMA, has been a director of Standard and the Bank since 2008. Mr. Rennie is required to acquire and hold shares of capital stock in the Federal Home Loan Bank. As of December 31, 2018, the Bank was in compliance with this requirement.
R. Craig Thomasmeyer has been a director of Standard and the Bank since 2017. Previously, Mr. Thomasmeyer served as a director of Allegheny Valley Bancorp and Allegheny Valley Bank from 2004 through 2017. Mr. Thomasmeyer is the Executive Vice President of Miller Information Systems (“MIS”), a Pittsburgh-based telecommunications contractor and services provider. Prior to joining MIS in 1992, Mr. Thomasmeyer worked at Davenport, Marvin, Joyce & Co., CPAs located in North Carolina. He also serves as a Trustee of Butler Health Systems and Chair of the Audit Committee. As a certified public accountant, he served their base of local clients in the audit and special accounting needs fields. With his experience, Mr. Thomasmeyer provides the Board of Directors with valuable expertise in dealing with accounting principles and financial reporting rules and regulations, promulgated byevaluating financial results, and generally overseeing the Federal Reservefinancial reporting process of corporations. Mr. Thomasmeyer’s experience and knowledge make him a skilled advisor and a valuable contributor to our Board thereunder, the Company may only engage in or own companies that engage in activities deemed by the Federal Reserve Board to be so closely related to the business of banking or managing or controlling banks as to beDirectors.
Timothy K. Zimmerman is Chief Operating Officer and a proper incident thereto,director of Standard and the holding company must obtain permission fromBank since 2020. He was formerly the Federal Reserve Board prior to engaging in most new business activities. A bank holding company that meets certain criteria may become a “financial holding company” and thereby engage in a broader rangeChief Executive Officer of financial activities, including insurance underwriting and investment banking. The Company has not elected to become a financial holding company.
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He was President and regulation by the Federal Reserve Board.
The following directors of Standard have terms ending in the year ending December 31, 2022:
Terence L. Graft has been a director of Standard and recognize the expected credit losses as allowances for loan losses. This will change the current method of providing allowances for loan losses that are probable, which may require
John M. Lally, CPA, MBA, CVA, has been a director of Standard and the Bank since 2017. He previously served as a director of Allegheny Valley Bancorp and Allegheny Valley Bank from 2009 to 2017. Mr. Lally is a founding partner of Lally & Co., LLC, a Pittsburgh-based certified public accounting and business advisory firm. Mr. Lally has been an owner/partner in the CPA practice since its founding in 1983. Mr. Lally is a 1977 graduate of Saint Vincent College in Latrobe, Pennsylvania, and obtained his MBA from The George Washington University in Washington, D.C., in 1978. He successfully passed the Uniform CPA Exam in 1981, the Certified Financial Planner examinations in 1986, and the Certified Valuation Analyst examination in 2001. Mr. Lally brings valued practical and technical experience as well as strong business community relationships to our board and the committees on which he serves.
David C. Mathews has been a director of Standard and the Bank since 2006. Mr. Mathews served as the Business Development Coordinator of the Bank from January 2006 until his retirement in February 2019. Prior to joining the Bank, Mr. Mathews served as the President and Chief Executive Officer of Hoblitzell National Bank (“HNB”) from 1998 until HNB was acquired by the Bank in January 2006. Mr. Mathews has 34 years of experience in banking. Mr. Mathews is a past board member of the Western Maryland Health System Hospital and the Western Maryland Health System Foundation, and is also a past member of the Frostburg State Business Advisory Board of Directors and The Greater Cumberland Committee. He is a former board member of the YMCA of Cumberland. Mr. Mathews contributes his extensive experience with commercial lending and business development and general management expertise to the Board of Directors.
Ronald J. Mock, CPA has been a director of Standard and the Bank since 2017. Mr. Mock previously served as a director of Allegheny Valley Bancorp and Allegheny Valley Bank from 2009 to 2017. Mr. Mock is the President of Mock Bosco & Associates, P.C., a regional public accounting firm, and CEO of Independent Controller Services, Inc. Throughout his 30-year career, Mr. Mock has provided audit and tax services to a variety of private, publicly held, and foreign-owned companies in the manufacturing, professional services, real estate, and construction industries. Before owning his own firm, he was employed by Deloitte & Touche in Pittsburgh, an international accounting and consulting
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firm, where he was a Manager in the Audit Department. Mr. Mock is a member of the American and Pennsylvania Institutes of Certified Public Accountants. He formerly served as Chairman of the SMC Business Council, a regional business trade association, and is a former member of the Association’s Audit Committee. Mr. Mock’s professional experience, inquisitive nature, strong ties to the communities served by the Bank, and integrity all provide valuable resources to the board.
Dale A. Walker has been a director of Standard and the Bank since 1999. Mr. Walker is a certified public accountant and is the owner of Dale A. Walker, CPA, an accounting firm in Mount Pleasant, Pennsylvania. He is a member of the American and Pennsylvania Institutes of Certified Public Accountants, a director and Treasurer of Penn Laurel Holdings, a real estate investment company, past Director of the Mount Pleasant Free Public Library, past Chairman of the Board of Excela Health, a not-for-profit health care system in western Pennsylvania, past Treasurer of Mount Pleasant Business District Authority and Mount Pleasant Parking Authority, Elder at Reunion Presbyterian Church and a past president and member of the Mount Pleasant Rotary. Mr. Walker contributes his accounting experience and knowledge of the local business community to the Board of Directors.
The following directors of Standard have terms ending in the year ending December 31, 2023:
William T. Ferri has been a director of Standard and the Bank since 2007. Mr. Ferri is a pharmacist and the owner of Ferri Pharmacy located in Murrysville, Pennsylvania. He is also the Chief Executive Officer of Ferri Enterprises, a property development and management company, and the President of Ferri Supermarkets, Inc. He is Director-Secretary of Value Drug Company, a pharmacy wholesale co-op distributor in Altoona, PA, and is also a member of the Pennsylvania Pharmacists Association, the National Association of Retail Pharmacists, the Murrysville Community Economic Development Corporation, the Westmoreland Chamber of Commerce and the Murrysville Business Association. Mr. Ferri contributes his experience owning a local business and his knowledge of the local business community to the Board of Directors.
Paul A. Iurlano has been a director of Standard and the Bank since 2017. Mr. Iurlano was previously a director of Allegheny Valley Bancorp and Allegheny Valley Bank from 2004 to 2017. Mr. Iurlano was Chief Facilities Officer of the Roman Catholic Diocese of Pittsburgh and Legal Counsel for the two years following the closingDiocesan Office for Facilities Management. In that position, Mr. Iurlano was involved in all aspects of the mergeracquisition, development and
Gregory J. Saxon has been a director of Standard and the Bank since 2017. Mr. Saxon previously served as a director of Allegheny Valley Bancorp from 2002 through 2017 and Allegheny Valley Bank from 2001 to 2017. He also served as Chairman of Allegheny Valley Bancorp and Allegheny Valley Bank from 2006 to 2017. Mr. Saxon retired in 2020 as President of Conco Services, Corp., a privately held manufacturing and energy services company. Previously, Mr. Saxon served as Vice President of Manufacturing at Conco, while filling a second position as President of Global Heat Exchanger Services Co., a manufacturing and petrochemical services company affiliated with Conco Services, Corp. He had served as a member of the Board of Directors for all Conco companies from 1990 to 2020. Presently, Mr. Saxon is the three years thereafter,President of Momentum Ventures, LLC, a newly established company that services the combined company will paymotor freight industry. Mr. Saxon graduated from Robert Morris College with a quarterly cash dividendBachelor of Science degree in an amount no less than $0.221 per shareMarketing. He has also participated in additional Executive Educational Programs at Wharton, University of Pennsylvania, for additional education at both the Executive and Directorship levels. Mr. Saxon’s wide range of business experience, leadership qualities, and ongoing interaction with the local Pittsburgh business community make him a valuable contributor to the Board of Directors.
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Executive Officers Who Are Not Directors
The principal occupation during the past five years afterof each of our executive officers, is set forth below. All executive officers have held their present positions for at least five years unless otherwise stated.
John P. Kline, age 56, is Executive Vice President and Chief Lending Officer of Standard and the effective time of the merger, provided that sufficient funds are legally available, and that the CompanyBank. Mr. Kline joined Standard and the Bank remain “well-capitalized” in accordance with applicable regulatory guidelines.
Susan A. Parente, CPA, age 58, is Executive Vice President and Chief Financial Officer of Standard and the Company’s primary source of dividends. As a state-chartered bank,Bank. Ms. Parente joined the Bank is subject to regulatory restrictions onin 1998 as Controller and in 2000 was appointed Assistant Treasurer. In 2008, she earned the paymentofficer designation of Vice President and amountsassumed direction of dividends under the Pennsylvania Banking Code.
Christian M. Chelli, age 52, is Senior Vice President and Chief Credit Officer of Standard and the Bank. Mr. Chelli was hired by Allegheny Valley Bancorp in 2008 as Vice President, Commercial Lending Officer, and in 2010 served as Senior Vice President, Senior Commercial Lending Officer. In 2013, Mr. Chelli served as Allegheny Valley Bancorp’s Senior Vice President, Chief Credit Officer. Mr. Chelli has over 30 years of experience in the financial condition, capital expendituresservices industry concentrating in the areas of commercial credit and otherpolicy administration, commercial and industrial lending, commercial real estate lending, financial statement and cash flow requirements. Thereanalysis and overall business risk assessment. Mr. Chelli currently serves as a Board Member of the Financial Industries Network, a Board Member of the RMA Pittsburgh Chapter and a PA Loan Committee Member of the Empire State CDC: Pursuit.
Susan M. DeLuca, age 64, is no assurance thatSenior Vice President and Chief Risk Officer of Standard and the Company’s subsidiaries will be able to payBank. In her forty-year career with Allegheny Valley Bank, she held numerous management positions including a member of the dividends contemplated bysenior management team for twenty-two years. In addition, she served as Corporate Secretary for Allegheny Valley Bancorp and Allegheny Valley Bank for twenty-six years and as a Director of Allegheny Valley Bancorp for nineteen years. Mrs. DeLuca served as a past Board member of the merger agreement or other dividendsPittsburgh Chapter of the American Institute of Banking. Mrs. DeLuca oversees general bank compliance and overall risk management initiatives.
Sheila D. Crystaloski, CISM, age 58, is Senior Vice President and Chief Technology Officer of Standard and the Bank. Ms. Crystaloski previously served as Director of Technology for Standard Financial and the Bank since 1998. In 2000 she earned the officer designation of Assistant Vice President. In 2006 she earned the officer designation of Vice President. Ms. Crystaloski has over 33 years in the future or thattechnology field and over 25 years in banking technology. Prior to joining the Company will generate adequate cash flowBank, Ms. Crystaloski worked as Senior Systems Analyst and Assistant Vice President for Commercial National Bank, Latrobe from 1991 to pay dividends in the future. The Company’s failure1998. Prior experience includes Computer Operator and Network Specialist for Latrobe Area Hospital from 1984 to pay dividends on common stock could have1991. Ms. Crystaloski is a material adverse effect on the market priceCertified Information Security Manager, a member of the common stock.
Corporate Governance and Code of Ethics and Business Conduct
Standard is committed to ensure compliance withmaintaining sound corporate governance principles and accounting requirements.
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The Board has adopted a code of confidence in security measures, reputational damage, reimbursement or other compensatory costs, and additional compliance costs. In addition, any of the matters described above could adversely impact the Company’s results of operations and financial condition.
Plan | | | Number of securities to be issued upon exercise of outstanding options, warrants, and rights | | | Weighted average exercise price | | | Number of securities available for future issuance under equity compensation plans | | |||||||||
Equity compensation plans approved by stockholders(1) | | | | | 217,080 | | | | | $ | 16.50 | | | | | | 101,144 | | |
Equity compensation plans approved by stockholders(2) | | | | | 49,615 | | | | | $ | 19.82 | | | | | | 77,135 | | |
Equity compensation plans not approved by stockholders | | | | | — | | | | | | — | | | | | | — | | |
| | | At December 31, | | |||||||||||||||||||||
| | | 2018 | | | 2017 | | ||||||||||||||||||
| | | Amortized Cost | | | Fair Value | | | Amortized Cost | | | Fair Value | | ||||||||||||
Municipal obligations | | | | $ | 53,546 | | | | | $ | 53,698 | | | | | $ | 49,988 | | | | | $ | 50,777 | | |
U.S. government and agency obligations | | | | | 8,368 | | | | | | 8,270 | | | | | | 8,334 | | | | | | 8,340 | | |
Corporate bonds | | | | | 4,226 | | | | | | 4,201 | | | | | | 2,276 | | | | | | 2,272 | | |
Mortgage-backed securities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Ginnie Mae pass-through certificates | | | | | 19,213 | | | | | | 18,890 | | | | | | 17,416 | | | | | | 17,291 | | |
Fannie Mae pass-through certificates | | | | | 13,952 | | | | | | 13,620 | | | | | | 16,078 | | | | | | 16,145 | | |
Freddie Mac pass-through certificates | | | | | 12,662 | | | | | | 12,410 | | | | | | 12,510 | | | | | | 12,537 | | |
Private pass-through certificates | | | | | 25,064 | | | | | | 24,715 | | | | | | 14,603 | | | | | | 14,498 | | |
Collateralized mortgage obligations | | | | | 12,328 | | | | | | 12,159 | | | | | | 7,277 | | | | | | 7,159 | | |
Equity securities | | | | | 2,686 | | | | | | 2,725 | | | | | | 3,647 | | | | | | 4,170 | | |
Total securities | | | | $ | 152,045 | | | | | $ | 150,688 | | | | | $ | 132,129 | | | | | $ | 133,189 | | |
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| | | Due 1 Year or Less | | | Due 1 – 5 Years | | | Due 5 – 10 Years | | | Due Over 10 Years | | | Total Securities | | |||||||||||||||||||||||||||||||||||||||||||||
| | | Amortized Cost | | | Weighted Average Yield | | | Amortized Cost | | | Weighted Average Yield | | | Amortized Cost | | | Weighted Average Yield | | | Amortized Cost | | | Weighted Average Yield | | | Amortized Cost | | | Weighted Average Yield | | ||||||||||||||||||||||||||||||
Municipal obligations | | | | $ | — | | | | | | — | | | | | $ | 6,658 | | | | | | 3.54% | | | | | $ | 22,384 | | | | | | 2.79% | | | | | $ | 24,504 | | | | | | 2.87% | | | | | $ | 53,546 | | | | | | 2.92% | | |
U.S. government and agency obligations | | | | | — | | | | | | — | | | | | | 7,428 | | | | | | 2.16% | | | | | | 940 | | | | | | 2.92% | | | | | | — | | | | | | — | | | | | | 8,368 | | | | | | 2.25% | | |
Corporate bonds | | | | | 1,758 | | | | | | 1.61% | | | | | | 1,472 | | | | | | 3.66% | | | | | | 996 | | | | | | 3.98% | | | | | | — | | | | | | — | | | | | | 4,226 | | | | | | 2.88% | | |
Mortgage-backed securities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ginnie Mae pass through certificates | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 19,213 | | | | | | 2.36% | | | | | | 19,213 | | | | | | 2.36% | | |
Fannie Mae pass through certificates | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,914 | | | | | | 2.88% | | | | | | 12,038 | | | | | | 2.33% | | | | | | 13,952 | | | | | | 2.41% | | |
Freddie Mac pass through certificates | | | | | — | | | | | | — | | | | | | 32 | | | | | | 2.66% | | | | | | 385 | | | | | | 2.46% | | | | | | 12,245 | | | | | | 2.67% | | | | | | 12,662 | | | | | | 2.66% | | |
Collateralized mortgage obligations | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 12,328 | | | | | | 2.77% | | | | | | 12,328 | | | | | | 2.77% | | |
Private pass through certificates | | | | | — | | | | | | — | | | | | | 920 | | | | | | 3.27% | | | | | | 4,450 | | | | | | 3.05% | | | | | | 19,694 | | | | | | 2.99% | | | | | | 25,064 | | | | | | 3.01% | | |
Equity securities | | | | | 2,686 | | | | | | 3.17% | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,686 | | | | | | 3.17% | | |
Total | | | | $ | 4,444 | | | | | | 2.55% | | | | | $ | 16,510 | | | | | | 2.91% | | | | | $ | 31,069 | | | | | | 2.87% | | | | | $ | 100,022 | | | | | | 2.69% | | | | | $ | 152,045 | | | | | | 2.75% | | |
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| | | December 31, | | | September 30, | | ||||||||||||||||||||||||
| | | 2018 | | | 2017 | | | 2016 | | | 2016 | | | 2015 | | |||||||||||||||
One-to-four family residential and construction | | | | $ | 253,913 | | | | | $ | 261,715 | | | | | $ | 174,740 | | | | | $ | 167,512 | | | | | $ | 148,694 | | |
Commercial real estate | | | | | 308,775 | | | | | | 300,997 | | | | | | 116,691 | | | | | | 119,879 | | | | | | 114,203 | | |
Home equity loans and lines of credit | | | | | 123,373 | | | | | | 130,915 | | | | | | 77,913 | | | | | | 79,157 | | | | | | 82,254 | | |
Commercial business | | | | | 46,196 | | | | | | 56,122 | | | | | | 15,505 | | | | | | 14,779 | | | | | | 12,035 | | |
Other | | | | | 1,139 | | | | | | 1,413 | | | | | | 520 | | | | | | 553 | | | | | | 824 | | |
Total loans | | | | $ | 733,396 | | | | | $ | 751,162 | | | | | $ | 385,369 | | | | | $ | 381,880 | | | | | $ | 358,010 | | |
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| | | December 31, 2018 | | |||||||||||||||
| | | Due Under 1 Year | | | Due 1 – 5 Years | | | Due Over 5 Years | | |||||||||
One-to-four family residential and construction | | | | $ | 187 | | | | | $ | 4,835 | | | | | $ | 248,891 | | |
Commercial real estate | | | | | 23,221 | | | | | | 31,629 | | | | | | 253,925 | | |
Home equity loans and lines of credit | | | | | 6,251 | | | | | | 10,334 | | | | | | 106,788 | | |
Commercial business | | | | | 13,998 | | | | | | 11,471 | | | | | | 20,727 | | |
Other | | | | | 904 | | | | | | 160 | | | | | | 75 | | |
Total loans | | | | $ | 44,561 | | | | | $ | 58,429 | | | | | $ | 630,406 | | |
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| | | December 31, 2018 | | |||||||||||||||
| | | Due Under 1 Year | | | Due 1 – 5 Years | | | Due Over 5 Years | | |||||||||
Interest Rates: | | | | | | | | | | | | | | | | | | | |
Fixed | | | | $ | 44,205 | | | | | $ | 49,461 | | | | | $ | 346,492 | | |
Adjustable | | | | | 356 | | | | | | 8,968 | | | | | | 283,914 | | |
Total loans | | | | $ | 44,561 | | | | | $ | 58,429 | | | | | $ | 630,406 | | |
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| | | Year Ended December 31, 2018 | | | Year Ended December 31, 2017 | |||||||||||||||||
| | | Average Balance | | | Yield/ Rate | | | Average Balance | | | Yield/ Rate | |||||||||||
Savings accounts | | | | $ | 150,461 | | | | | | 0.14% | | | | | $ | 141,912 | | | | | | 0.13% |
Certificates of deposit | | | | | 228,006 | | | | | | 1.93% | | | | | | 195,821 | | | | | | 1.47% |
Money market accounts | | | | | 96,427 | | | | | | 0.54% | | | | | | 81,135 | | | | | | 0.31% |
Demand and NOW accounts | | | | | 99,376 | | | | | | 0.23% | | | | | | 86,543 | | | | | | 0.17% |
Total deposits | | | | $ | 574,270 | | | | | | 0.86% | | | | | $ | 505,411 | | | | | | 0.69% |
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| | | December 31 2018 | | |||
Three months or less | | | | $ | 14,665 | | |
Over three to six months | | | | | 10,976 | | |
Over six to twelve months | | | | | 13,001 | | |
Over twelve months | | | | | 69,425 | | |
Total | | | | $ | 108,067 | | |
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| | | December 31 | | |||||||||
| | | 2018 | | | 2017 | | ||||||
Balance | | | | $ | 4,524 | | | | | $ | 27,021 | | |
Average balance outstanding during the period | | | | | 12,696 | | | | | | 38,565 | | |
Maximum amount outstanding at any month-end | | | | | 51,500 | | | | | | 72,926 | | |
Weighted average interest rate at period end | | | | | 2.64% | | | | | | 1.54% | | |
Average interest rate during the period | | | | | 1.79 | | | | | | 1.22 | | |
| | | For the Year Ended December 31, | | |||||||||||||||||||||||||||||||||
| | | 2018 | | | 2017 | | ||||||||||||||||||||||||||||||
| | | Average Outstanding Balance | | | Interest | | | Yield/ Rate | | | Average Outstanding Balance | | | Interest | | | Yield/ Rate | | ||||||||||||||||||
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans | | | | $ | 740,370 | | | | | $ | 32,033 | | | | | | 4.25% | | | | | $ | 650,600 | | | | | $ | 26,948 | | | | | | 4.14% | | |
Investment and mortgage-backed securities | | | | | 145,995 | | | | | | 3,850 | | | | | | 2.55% | | | | | | 123,864 | | | | | | 3,091 | | | | | | 2.50% | | |
FHLB stock | | | | | 8,542 | | | | | | 590 | | | | | | 6.91% | | | | | | 7,218 | | | | | | 384 | | | | | | 5.32% | | |
Interest-earning deposits | | | | | 19,692 | | | | | | 322 | | | | | | 1.64% | | | | | | 13,845 | | | | | | 133 | | | | | | 0.96% | | |
Total interest-earning assets | | | | | 914,599 | | | | | | 36,795 | | | | | | 3.95% | | | | | | 795,527 | | | | | | 30,556 | | | | | | 3.84% | | |
Noninterest-earning assets | | | | | 63,921 | | | | | | | | | | | | | | | | | | 56,765 | | | | | | | | | | | | | | |
Total assets | | | | $ | 978,520 | | | | | | | | | | | | | | | | | $ | 852,292 | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Savings accounts | | | | $ | 150,461 | | | | | | 205 | | | | | | 0.14% | | | | | | 141,912 | | | | | | 185 | | | | | | 0.13% | | |
Certificates of deposit | | | | | 228,006 | | | | | | 4,008 | | | | | | 1.93% | | | | | | 195,821 | | | | | | 2,880 | | | | | | 1.47% | | |
Money market accounts | | | | | 96,427 | | | | | | 522 | | | | | | 0.54% | | | | | | 81,135 | | | | | | 255 | | | | | | 0.31% | | |
Demand and NOW accounts | | | | | 99,376 | | | | | | 226 | | | | | | 0.23% | | | | | | 86,543 | | | | | | 151 | | | | | | 0.17% | | |
Total interest-bearing deposits | | | | | 574,270 | | | | | | 4,961 | | | | | | 0.86% | | | | | | 505,411 | | | | | | 3,471 | | | | | | 0.69% | | |
Federal Home Loan Bank borrowings | | | | | 126,295 | | | | | | 2,482 | | | | | | 1.98% | | | | | | 104,604 | | | | | | 1,601 | | | | | | 1.53% | | |
Securities sold under agreements to repurchase | | | | | 4,782 | | | | | | 11 | | | | | | 0.23% | | | | | | 4,532 | | | | | | 4 | | | | | | 0.09% | | |
Total interest-bearing liabilities | | | | | 705,347 | | | | | | 7,454 | | | | | | 1.05% | | | | | | 614,547 | | | | | | 5,076 | | | | | | 0.83% | | |
Noninterest-bearing deposits | | | | | 135,320 | | | | | | | | | | | | | | | | | | 116,461 | | | | | | | | | | | | | | |
Noninterest-bearing liabilities | | | | | 3,443 | | | | | | | | | | | | | | | | | | 4,007 | | | | | | | | | | | | | | |
Total liabilities | | | | | 844,110 | | | | | | | | | | | | | | | | | | 735,015 | | | | | | | | | | | | | | |
Stockholders’ equity | | | | | 134,410 | | | | | | | | | | | | | | | | | | 117,277 | | | | | | | | | | | | | | |
Total liabilities and stockholders’ equity | | | | $ | 978,520 | | | | | | | | | | | | | | | | | $ | 852,292 | | | | | | | | | | | | | | |
Net interest income | | | | | | | | | | $ | 29,341 | | | | | | | | | | | | | | | | | $ | 25,480 | | | | | | | | |
Net interest rate spread(1) | | | | | | | | | | | | | | | | | 2.90% | | | | | | | | | | | | | | | | | | 3.01% | | |
Net interest-earning assets(2) | | | | $ | 209,252 | | | | | | | | | | | | | | | | | $ | 180,980 | | | | | | | | | | | | | | |
Net interest margin(3) | | | | | | | | | | | | | | | | | 3.21% | | | | | | | | | | | | | | | | | | 3.20% | | |
Average interest-earning assets to interest-bearing liabilities | | | | | 129.67% | | | | | | | | | | | | | | | | | | 129.45% | | | | | | | | | | | | | | |
Audit Committee
The Audit Committee consists of Directors Walker, who serves as Chairman, Ferri, Graft, Lally, Mock, Rennie and Saxon. Each member of the years ended December 31, 2018 and December 31, 2017 (dollars in thousands). The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately, based on the changes due to rate and the changes due to volume.
| | | Year Ended December 31, 2018 vs. Year Ended December 31, 2017 | | |||||||||||||||
| | | Increase (decrease) due to | | |||||||||||||||
| | | Volume | | | Rate | | | Total | | |||||||||
Interest-earning assets: | | | | | | | | | | | | | | | | | | | |
Loans receivable | | | | $ | 3,844 | | | | | $ | 1,241 | | | | | $ | 5,085 | | |
Investment and mortgage-backed securities | | | | | 576 | | | | | | 183 | | | | | | 759 | | |
FHLB stock | | | | | 83 | | | | | | 123 | | | | | | 206 | | |
Interest-earning deposits | | | | | 71 | | | | | | 118 | | | | | | 189 | | |
Total interest-earning assets | | | | | 4,574 | | | | | | 1,665 | | | | | | 6,239 | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | |
Savings accounts | | | | | 11 | | | | | | 9 | | | | | | 20 | | |
Certificates of deposit | | | | | 516 | | | | | | 612 | | | | | | 1,128 | | |
Money market accounts | | | | | 55 | | | | | | 212 | | | | | | 267 | | |
Demand and NOW accounts | | | | | 25 | | | | | | 50 | | | | | | 75 | | |
Federal Home Loan Bank borrowings | | | | | 372 | | | | | | 509 | | | | | | 881 | | |
Securities sold under agreements to repurchase | | | | | — | | | | | | 7 | | | | | | 7 | | |
Total interest-bearing liabilities | | | | | 979 | | | | | | 1,399 | | | | | | 2,378 | | |
Change in net interest income | | | | $ | 3,595 | | | | | $ | 266 | | | | | $ | 3,861 | | |
|
| | | December 31, | | | September 30, | | ||||||||||||||||||||||||
| | | 2018 | | | 2017 | | | 2016 | | | 2016 | | | 2015 | | |||||||||||||||
Non-accrual loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to-four family residential and construction | | | | $ | 1,727 | | | | | $ | 1,899 | | | | | $ | 544 | | | | | $ | 516 | | | | | $ | 574 | | |
Commercial real estate | | | | | 661 | | | | | | 756 | | | | | | 100 | | | | | | 100 | | | | | | — | | |
Home equity loans and lines of credit | | | | | 258 | | | | | | 244 | | | | | | 101 | | | | | | 73 | | | | | | 96 | | |
Commercial business | | | | | 62 | | | | | | 5 | | | | | | — | | | | | | — | | | | | | — | | |
Other | | | | | 19 | | | | | | 3 | | | | | | 8 | | | | | | — | | | | | | 5 | | |
Total nonaccrual loans | | | | | 2,727 | | | | | | 2,907 | | | | | | 753 | | | | | | 689 | | | | | | 675 | | |
Loans past due 90 days and still accruing | | | | | 3 | | | | | | 19 | | | | | | — | | | | | | — | | | | | | — | | |
Total non-performing loans | | | | | 2,730 | | | | | | 2,926 | | | | | | 753 | | | | | | 689 | | | | | | 675 | | |
Foreclosed real estate | | | | | 486 | | | | | | 419 | | | | | | 251 | | | | | | 281 | | | | | | 357 | | |
Total non-performing assets | | | | $ | 3,216 | | | | | $ | 3,345 | | | | | $ | 1,004 | | | | | $ | 970 | | | | | $ | 1,032 | | |
Ratios: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-accrual loans to total loans | | | | | 0.37% | | | | | | 0.39% | | | | | | 0.20% | | | | | | 0.18% | | | | | | 0.19% | | |
Non-performing loans to total loans | | | | | 0.37% | | | | | | 0.39% | | | | | | 0.20% | | | | | | 0.18% | | | | | | 0.19% | | |
Non-performing assets to total assets | | | | | 0.33% | | | | | | 0.34% | | | | | | 0.21% | | | | | | 0.20% | | | | | | 0.22% | | |
Allowance for loan losses to non-performing loans | | | | | 161.68% | | | | | | 141.05% | | | | | | 509.56% | | | | | | 551.52% | | | | | | 574.67% | | |
| | | December 31, 2018 | | |||
Classified assets: | | | | | | | |
Substandard | | | | $ | 2,829 | | |
Doubtful | | | | | — | | |
Loss | | | | | — | | |
Total classified assets | | | | | 2,829 | | |
Special mention | | | | | 5,145 | | |
Total criticized assets | | | | $ | 7,974 | | |
|
| | | For the Year Ended December 31, | | | For the Year Ended September 30, | | ||||||||||||||||||||||||
| | | 2018 | | | 2017 | | | 2016 | | | 2016 | | | 2015 | | |||||||||||||||
Balance at beginning of year | | | | $ | 4,127 | | | | | $ | 3,837 | | | | | $ | 3,800 | | | | | $ | 3,879 | | | | | $ | 3,919 | | |
Provision charged to operating expenses | | | | | 572 | | | | | | 517 | | | | | | 40 | | | | | | 105 | | | | | | — | | |
Recoveries of loans previously charged-off: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to-four family residential and construction | | | | | 69 | | | | | | 28 | | | | | | — | | | | | | 8 | | | | | | 74 | | |
Commercial real estate | | | | | 2 | | | | | | 1 | | | | | | 1 | | | | | | 7 | | | | | | 6 | | |
Home equity loans and lines of credit | | | | | 11 | | | | | | — | | | | | | — | | | | | | 9 | | | | | | 9 | | |
Commercial business | | | | | 5 | | | | | | 3 | | | | | | — | | | | | | 18 | | | | | | 190 | | |
Other | | | | | — | | | | | | 7 | | | | | | — | | | | | | 7 | | | | | | — | | |
Total recoveries | | | | | 87 | | | | | | 39 | | | | | | 1 | | | | | | 49 | | | | | | 279 | | |
Loans charged-off: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to-four family residential and construction | | | | | — | | | | | | (185) | | | | | | — | | | | | | (70) | | | | | | (162) | | |
Commercial real estate | | | | | (80) | | | | | | — | | | | | | — | | | | | | (93) | | | | | | (9) | | |
Home equity loans and lines of credit | | | | | — | | | | | | (51) | | | | | | — | | | | | | (4) | | | | | | (70) | | |
Commercial business | | | | | (244) | | | | | | (1) | | | | | | — | | | | | | (43) | | | | | | (54) | | |
Other | | | | | (48) | | | | | | (29) | | | | | | (4) | | | | | | (23) | | | | | | (24) | | |
Total charge-offs | | | | | (372) | | | | | | (266) | | | | | | (4) | | | | | | (233) | | | | | | (319) | | |
Net charge-offs | | | | | (285) | | | | | | (227) | | | | | | (3) | | | | | | (184) | | | | | | (40) | | |
Balance at end of year | | | | $ | 4,414 | | | | | $ | 4,127 | | | | | $ | 3,837 | | | | | $ | 3,800 | | | | | $ | 3,879 | | |
Net charge-offs to average loans outstanding | | | | | 0.04% | | | | | | 0.03% | | | | | | 0.00% | | | | | | 0.05% | | | | | | 0.01% | | |
Allowance for loan losses to total loans at year-end | | | | | 0.60% | | | | | | 0.55% | | | | | | 1.00% | | | | | | 1.00% | | | | | | 1.10% | | |
| | | December 31, 2018 | | | December 31, 2017 | | | December 31, 2016 | | | September 30, 2016 | | | September 30, 2015 | | |||||||||||||||||||||||||||||||||||||||||||||
| | | Amount | | | Percent of Loans in Each Category to Total | | | Amount | | | Percent of Loans in Each Category to Total | | | Amount | | | Percent of Loans in Each Category to Total | | | Amount | | | Percent of Loans in Each Category to Total | | | Amount | | | Percent of Loans in Each Category to Total | | ||||||||||||||||||||||||||||||
One-to-four family residential and construction | | | | $ | 1,051 | | | | | | 34.6% | | | | | $ | 1,384 | | | | | | 34.8% | | | | | $ | 1,280 | | | | | | 45.4% | | | | | $ | 1,250 | | | | | | 43.9% | | | | | $ | 1,122 | | | | | | 40.5% | | |
Commercial real estate | | | | | 2,761 | | | | | | 42.1% | | | | | | 2,003 | | | | | | 40.1% | | | | | | 1,787 | | | | | | 30.3% | | | | | | 1,786 | | | | | | 31.4% | | | | | | 1,867 | | | | | | 32.5% | | |
Home equity loans and lines of credit | | | | | 312 | | | | | | 16.8% | | | | | | 400 | | | | | | 17.4% | | | | | | 547 | | | | | | 20.2% | | | | | | 547 | | | | | | 20.7% | | | | | | 457 | | | | | | 23.4% | | |
Commercial business | | | | | 286 | | | | | | 6.3% | | | | | | 333 | | | | | | 7.5% | | | | | | 211 | | | | | | 4.0% | | | | | | 211 | | | | | | 3.9% | | | | | | 411 | | | | | | 3.4% | | |
Other | | | | | 4 | | | | | | 0.2% | | | | | | 7 | | | | | | 0.2% | | | | | | 12 | | | | | | 0.1% | | | | | | 6 | | | | | | 0.1% | | | | | | 22 | | | | | | 0.2% | | |
Total | | | | $ | 4,414 | | | | | | 100.0% | | | | | $ | 4,127 | | | | | | 100.0% | | | | | $ | 3,837 | | | | | | 100.0% | | | | | $ | 3,800 | | | | | | 100.0% | | | | | $ | 3,879 | | | | | | 100.0% | | |
|
| | | Net Portfolio Value(2) | | | Net Interest Income | | ||||||||||||||||||||||||||||||
| | | | | | | | | Estimated Increase (Decrease) | | | | | | | | | Estimated Increase (Decrease) | | ||||||||||||||||||
Change in Interest Rates (basis points) | | | Estimated NPV(1) | | | Amount | | | Percent | | | Estimated Net Interest Income(3) | | | Amount | | | Percent | | ||||||||||||||||||
December 31, 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
+300 | | | | $ | 139,694 | | | | | $ | (21,212) | | | | | | (13.18)% | | | | | $ | 29,269 | | | | | $ | (182) | | | | | | (0.62)% | | |
+200 | | | | $ | 149,914 | | | | | $ | (10,992) | | | | | | (6.83)% | | | | | $ | 29,540 | | | | | $ | 89 | | | | | | 0.30% | | |
+100 | | | | $ | 158,986 | | | | | $ | (1,920) | | | | | | (1.19)% | | | | | $ | 29,715 | | | | | $ | 264 | | | | | | 0.89% | | |
0 | | | | $ | 160,906 | | | | | $ | — | | | | | | —% | | | | | $ | 29,451 | | | | | $ | — | | | | | | —% | | |
-100 | | | | $ | 149,662 | | | | | $ | (11,244) | | | | | | (6.99)% | | | | | $ | 27,935 | | | | | $ | (1,516) | | | | | | (5.15)% | | |
Item 11. Executive Compensation
Compensation
The following table sets forth, for the fiscal years ended December 31, 2020 and 2019, certain information as to the total compensation paid to Mr. Hasley, who serves as President and Chief Executive Officer of the Company, and our two other most highly compensated executive officers.
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Summary Compensation Table | ||||||||||||||||||||
Name and principal | | | | | | | | Stock | | Option | | Non-equity incentive | | All other | | | ||||||||
position | | Year | | Salary | | Bonus | | Awards(1) | | Awards | | plan compensation (2) | | compensation (3) | | Total | ||||||||
Andrew J. Hasley(4) | | 2020 | | $ | 339,000 | | $ | — | | $ | — | | $ | — | | $ | 144,850 | | $ | 51,367 | | $ | 535,217 | |
President and Chief Executive Officer | | 2019 | | $ | 299,000 | | $ | — | | $ | — | | $ | — | | $ | 63,866 | | $ | 72,058 | | $ | 434,924 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Timothy K. Zimmerman(4) | | 2020 | | $ | 347,500 | | $ | — | | $ | — | | $ | — | | $ | 148,250 | | $ | 48,481 | | $ | 544,231 | |
Senior Executive Vice President and Chief Operating Officer | | 2019 | | $ | 360,000 | | $ | — | | $ | — | | $ | — | | $ | 94,500 | | $ | 92,376 | | $ | 546,876 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Susan A. Parente | | 2020 | | $ | 212,000 | | $ | — | | $ | — | | $ | — | | $ | 84,800 | | $ | 26,856 | | $ | 323,656 | |
Executive Vice President and Chief Financial Officer | | 2019 | | $ | 198,000 | | $ | — | | $ | 22,275 | | $ | — | | $ | 37,165 | | $ | 24,942 | | $ | 282,382 |
(1) | For 2019, the amount shown reflects a restricted stock award grant of 851 shares as determined under the Executive Incentive Plan. For 2019 the amount shown represent the aggregate grant date fair value for the restricted stock awards granted during the year indicated, computed in accordance with FASB ASC Topic 718. The assumptions used to determine the value of restricted stock awards are described in note 13 of the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. |
(2) | Amounts in this column reflect a bonus paid under the Company’s Executive Incentive Plan. |
(3) | For 2020, the amounts in this column reflect what the Company paid for, or reimbursed, the applicable named executive officer for the various benefits and perquisites received. A break-down of the various elements of compensation in this column is set forth in the table provided below. |
| ||||||||||||||||||||||||||||||||||||||||||||||
Name | | | Year | | | Auto | | | | | ESOP | | | Employer | | | SERP | | | Total All | ||||||||||||||||||||||||||
Mr. Hasley | | | | | 2020 | | | $ | | 9,600 | | $ | | 15,445 | | $ | | 9,372 | | $ | | 16,950 | | $ | | 51,367 | ||||||||||||||||||||
Mr. Zimmerman | | | | | 2020 | | | | $ | | 7,584 | | | $ | | 15,471 | | | $ | | 8,051 | | | $ | | 17,375 | | | $ | | 48,481 | |||||||||||||||
Ms. Parente | | | | | 2020 | | | | $ | | — | | | $ | | 15,456 | | | $ | | 11,400 | | | $ | | — | | | $ | | 26,856 |
(4) | As provided in the merger agreement between the Company and Allegheny Valley Bancorp, Inc., Mr. Hasley became President and Chief Executive Officer of the Company and the Bank effective as of July 1, 2020. Prior to that time, Mr. Hasley was the President of the Company and the Bank and Mr. Zimmerman was the Chief Executive Officer of the Company and the Bank. |
5
Benefit Plans and Agreements
Employment Agreements. Andrew W. Hasley, Timothy K. Zimmerman and Susan A. Parente (referred to collectively below as the “executives” or individually as the “executive”) are parties to employment agreements, effective as of January 25, 2018, with Standard and the PCAOB.Bank. Such agreements for Messrs. Hasley and Zimmerman were amended on April 30, 2020. Standard’s continued success depends to a significant degree on the skills and competence of these executives and the employment agreements are intended to ensure that Standard maintains a stable management base. The employment agreements contain substantially similar terms except for the individual’s title and base salary.
The employment agreements provide for a three-year term and the term renews daily, unless the Board of Directors or executive elects not to extend the term. If the Board of Directors or executive elects not to extend the term of the agreement, the term will become fixed and will end on the third anniversary of the date of the non-renewal. The current base salaries are $370,000 for Mr. Hasley, $325,000 for Mr. Zimmerman and $218,360 for Ms. Parente.
Upon termination of an executive’s employment for cause, as defined in each of the agreements, the executive will receive no further compensation or benefits under the agreement. If Standard terminates the executive for reasons other than for cause or if the executive terminates voluntarily under specified circumstances that constitute a good reason (as defined in the agreements), the executive will receive an amount equal to two times the sum of the executive’s highest annual base salary plus the average of the bonuses earned in the two fiscal years immediately preceding the year of termination of employment, payable in a lump sum on the thirtieth day following the date of termination. Standard, or its successor, will also continue to provide the executive with continued medical, vision and dental coverage, at no cost to the executive, for the remaining term of the agreement but not to exceed eighteen (18) months, and if the remaining term is more than eighteen (18) months, the executive will receive a cash payment equal to the cost of such coverage for the months remaining in the term of the agreement. In order to receive the severance payment and insurance benefits, the executive must execute a release agreement.
In the event of a change in control, followed within eighteen (18) months by the executive’s termination for a reason other than for cause or if the executive terminates voluntarily under specified circumstances that constitute a good reason (as defined in the agreements), the executive will receive an amount equal to three times the sum of the executive’s highest annual base salary plus the average of the bonuses earned in the two fiscal years immediately preceding the year of termination of employment, payable in a lump sum within ten (10) days following the date of termination. Standard, or its successor, will also continue to provide the executive with continued medical, vision and dental coverage for eighteen (18) months, and the executive will receive a lump sum cash payment equal to the cost of such monthly insurance premiums for eighteen (18) months.
Assuming the executives had been terminated in connection with a change in control on December 31, 2020, Mr. Hasley, Mr. Zimmerman and Ms. Parente would have received aggregate severance payments of approximately $1,444,000, $1,628,000 and $840,000, respectively, and if the executives had been terminated in connection with a change in control on April 19, 2021, the most recent practicable date before the printing of this Amendment, Mr. Hasley, Mr. Zimmerman and Ms. Parente would have received aggregate severance payments of approximately $1,506,000, $1,595,000 and $871,000, respectively. The agreements also provide for benefits upon the occurrence of an executive’s death or disability.
Offer Letter and Cancellation Agreements. Standard Bank will become a separate wholly-owned subsidiary of Dollar upon the consummation of the merger. Therefore, simultaneously with the signing of the merger agreement, and effective as of the date of the merger, Standard Bank entered into an offer letter with each of Andrew W. Hasley, Timothy K. Zimmerman and Susan A. Parente which sets forth the terms of their employment with Dollar’s wholly-owned subsidiary, Standard Bank. In addition, the three executives each entered into cancellation agreements with Standard Bank which will be effective as of, and contingent upon the closing of the merger. The cancellation agreements provide for payments to Messrs. Hasley and Zimmerman and Ms. Parente of $1,505,919, $1,594,689 and $852,360, respectively, in connection with the cancellation of their existing employment agreements with Standard and Standard Bank. The amounts payable for the cancellation of the executives’ employment agreements may be reduced, to the extent necessary, so that the sum of the cancellation consideration and any other “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (“Section 280G”) that are payable to or
6
with respect to the executive and contingent upon a “change in control” within the meaning of Section 280G do not exceed three times the executive’s “base amount” within the meaning of Section 280G.
In addition, under the offer letters, each of Messrs. Hasley and Zimmerman and Ms. Parente have been offered positions with Standard Bank following the effective time of the merger. Mr. Hasley has been offered the position of President of Standard Bank, with a base salary of $345,000; Mr. Zimmerman has been offered the position of Senior Vice President and Chief Operating Officer of Standard Bank, with a base salary of $250,000; and Ms. Parente has been offered the position of Senior Vice President and Chief Financial Officer of Standard Bank, with a base salary of $212,000 (or, if higher, her base salary as in effect on the effective date of the merger). Under the offer letters, if an executive’s employment is involuntarily terminated by Standard Bank prior to the first anniversary of the Effective Date for any reason other than for cause as defined in the agreement, then, subject to the executive signing a release of claims, the executive will be entitled to a lump sum severance payment equal to the base salary the executive would have received for the remainder of the 12-month period ending on the first anniversary of the effective date of the merger. Assuming the executives’ employment is terminated immediately following the effective time of the merger, the executive would be entitled to a lump sum severance payment equivalent to the base salary the executive would have received through the 12-month period ending on the first anniversary of the effective date of the merger of $345,000 (for Mr. Hasley), $250,000 (for Mr. Zimmerman) and $212,000 (for Ms. Parente).
In addition, if the executives’ employment is involuntarily terminated by Standard Bank prior to the third anniversary of the effective date of the merger for reasons other than cause as defined in the offer letter and cancellation agreements, then, subject to the executive’s signing of a release of claims, the executive will receive a lump sum severance payment equal to the product of (a) the total monthly premium for medical, vision, and dental coverage (including any employer contributions to a health savings account) for the executive and any dependents covered at termination, and (b) the number of full months remaining in the 36-month period beginning on the effective time of the merger. Assuming the executives’ employment is terminated immediately following the effective time of the merger, the lump sum severance payments equivalent to each executives’ estimated aggregate monthly health coverage premiums for 36 months are estimated to be $55,620 (for Mr. Hasley), $39,780 (for Mr. Zimmerman) and $55,440 (for Ms. Parente).
The offer letters for Messrs. Zimmerman and Hasley, as well as Ms. Parente also contain employment and post-employment restrictive covenants. While employed with Standard Bank and for 18 months following termination of employment for any reason, the executives are prohibited, without written consent of Standard Bank, to solicit employees and customers of Standard Bank, Dollar or any subsidiaries or affiliates of Dollar (the “Bank Group”). In addition, while employed by Standard Bank, solely for the period thereafter, if any, with respect to which severance is being paid in accordance with the standardsrespective offer letters, the executives will not, without the written consent of Standard Bank, directly or indirectly perform services for any financial services entity that competes with the business of the PCAOB. Those standards require that we planBank Group and perform the audithas headquarters or offices within twenty-five (25) miles of Pittsburgh, Pennsylvania.
Change in Control Agreements. John P. Kline, Christian M. Chelli, Sheila D. Crystaloski and Susan M. DeLuca (referred to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
In the event of a change in control, over financial reportingfollowed by the executive’s termination of employment for a reason other than for cause or if the executive terminates voluntarily under specified circumstances that constitute a good reason (as defined in the agreements), the executive will receive an amount equal to two times the sum of the executive’s annual base salary as of December 31, 2018, based on criteria established in Internal Control — Integrated Framework, issuedthe date of termination of employment plus two times the highest bonus earned by the Committeeexecutive in the three calendar years immediately preceding the year of Sponsoring Organizationstermination of employment, payable in a lump sum within ten (10) days following the date of termination. Standard, or its successor, will also continue to pay the executive’s medical, vision and dental coverage for eighteen (18) months.
Assuming an effective time of the Treadway Commissionmerger of January 1, 2021, the executives with change in 2013. In our opinion,control agreements would be entitled to cash severance estimated as follows, assuming an applicable termination of employment occurred
7
immediately following the Company maintained,merger: $571,380 (for Mr. Kline), $532,000 (for Mr. Chelli), $400,400 (for Ms. Crystaloski), and $309,400 (for Ms. DeLuca).
Supplemental Executive Retirement Agreements.The Bank entered into a supplemental executive retirement agreement with each of Messrs. Hasley and Zimmerman in all material respects, effective internal control over financial reporting as of December 31, 2018, based2018. Such agreements for Messrs. Hasley and Zimmerman were amended on criteria established in Internal Control — Integrated Framework, issued byJune 30, 2020. The supplemental executive retirement agreements replace the Committee of Sponsoring Organizationsprior long term incentive for Messrs. Hasley and Zimmerman, which was the multi-year portion of the Treadway Commission in 2013.
Pursuant to the agreements, commencing as of December 31, 2018, and 2017, andon each subsequent December 31, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for eachBank will credit the executive’s account balance with an amount equal to five percent (5.0%) of the three yearsexecutive’s base salary and, in addition, may make a discretionary contribution that is targeted to be fifteen percent (15%) of the period endedexecutive’s base salary. Contributions will be made only if the executive is employed with the Bank on the date of such contribution. The account balance will be credited with interest as of each December 31 2018,at a rate equal to the average of the CompanyMoody’s Aaa Corporate Bond Index over the prior one-year period. For Mr. Hasley only, the Bank will not be obligated to make any contributions, other than interest crediting, on and our report dated March 18, 2019, expressed an unqualified opinion.
| | | December 31 | | |||||||||
| | | 2018 | | | 2017 | | ||||||
ASSETS | | | | | | | | | | | | | |
Cash on hand and due from banks | | | | $ | 3,371 | | | | | $ | 3,523 | | |
Interest-earning deposits in other institutions | | | | | 12,836 | | | | | | 12,742 | | |
Cash and Cash Equivalents | | | | | 16,207 | | | | | | 16,265 | | |
Investment securities available for sale, at fair value | | | | | 66,169 | | | | | | 65,559 | | |
Equity securities, at fair value | | | | | 2,725 | | | | | | — | | |
Mortgage-backed securities available for sale, at fair value | | | | | 81,794 | | | | | | 67,630 | | |
Certificate of deposit | | | | | 249 | | | | | | 749 | | |
Federal Home Loan Bank stock, at cost | | | | | 7,827 | | | | | | 9,468 | | |
Loans receivable, net of allowance for loan losses of $4,414 and $4,127 | | | | | 728,982 | | | | | | 747,035 | | |
Foreclosed real estate | | | | | 486 | | | | | | 419 | | |
Office properties and equipment, net | | | | | 7,794 | | | | | | 8,191 | | |
Bank-owned life insurance | | | | | 22,572 | | | | | | 22,040 | | |
Goodwill | | | | | 25,836 | | | | | | 25,836 | | |
Core deposit intangible | | | | | 2,508 | | | | | | 3,344 | | |
Accrued interest receivable and other assets | | | | | 8,647 | | | | | | 6,064 | | |
TOTAL ASSETS | | | | $ | 971,796 | | | | | $ | 972,600 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | |
Liabilities | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | |
Demand, savings and club accounts | | | | $ | 471,177 | | | | | $ | 482,902 | | |
Time Deposits | | | | | 246,697 | | | | | | 211,944 | | |
Total Deposits | | | | | 717,874 | | | | | | 694,846 | | |
Federal Home Loan Bank short-term borrowings | | | | | 4,524 | | | | | | 27,021 | | |
Federal Home Loan Bank advances | | | | | 104,963 | | | | | | 107,652 | | |
Securities sold under agreements to repurchase | | | | | 2,137 | | | | | | 4,240 | | |
Advance deposits by borrowers for taxes and insurance | | | | | 45 | | | | | | 782 | | |
Accrued interest payable and other liabilities | | | | | 4,363 | | | | | | 4,087 | | |
TOTAL LIABILITIES | | | | | 833,906 | | | | | | 838,628 | | |
Stockholders’ Equity | | | | | | | | | | | | | |
Preferred stock, $0.01 par value per share, 10,000,000 shares authorized, none issued | | | | | — | | | | | | — | | |
Common stock, $0.01 par value per share, 40,000,000 shares authorized, 4,812,991 and 4,790,687 shares outstanding, respectively | | | | | 48 | | | | | | 48 | | |
Additional paid-in-capital | | | | | 75,571 | | | | | | 75,063 | | |
Retained earnings | | | | | 65,301 | | | | | | 60,172 | | |
Unearned Employee Stock Ownership Plan (ESOP) shares | | | | | (1,686) | | | | | | (1,839) | | |
Accumulated other comprehensive (loss) income | | | | | (1,344) | | | | | | 528 | | |
TOTAL STOCKHOLDERS’ EQUITY | | | | | 137,890 | | | | | | 133,972 | | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | $ | 971,796 | | | | | $ | 972,600 | | |
|
| | | Years Ended December 31 | | |||||||||
| | | 2018 | | | 2017 | | ||||||
Interest and Dividend Income | | | | | | | | | | | | | |
Loans, including fees | | | | $ | 32,033 | | | | | $ | 26,948 | | |
Mortgage-backed securities | | | | | 1,999 | | | | | | 1,257 | | |
Investments: | | | | | | | | | | | | | |
Taxable | | | | | 420 | | | | | | 518 | | |
Tax-exempt | | | | | 1,431 | | | | | | 1,316 | | |
Federal Home Loan Bank stock | | | | | 590 | | | | | | 384 | | |
Interest-earning deposits and federal funds sold | | | | | 322 | | | | | | 133 | | |
Total Interest and Dividend Income | | | | | 36,795 | | | | | | 30,556 | | |
Interest Expense | | | | | | | | | | | | | |
Deposits | | | | | 4,961 | | | | | | 3,471 | | |
Federal Home Loan Bank short-term borrowings | | | | | 227 | | | | | | 470 | | |
Federal Home Loan Bank advances | | | | | 2,255 | | | | | | 1,131 | | |
Securities sold under agreements to repurchase | | | | | 11 | | | | | | 4 | | |
Total Interest Expense | | | | | 7,454 | | | | | | 5,076 | | |
Net Interest Income | | | | | 29,341 | | | | | | 25,480 | | |
Provision for Loan Losses | | | | | 572 | | | | | | 517 | | |
Net Interest Income after Provision for Loan Losses | | | | | 28,769 | | | | | | 24,963 | | |
Noninterest Income | | | | | | | | | | | | | |
Service charges | | | | | 2,970 | | | | | | 2,569 | | |
Earnings on bank-owned life insurance | | | | | 533 | | | | | | 510 | | |
Net losses on sales of securities | | | | | (17) | | | | | | (323) | | |
Net gains on sales of equities | | | | | 394 | | | | | | — | | |
Net equity securities fair value adjustment losses | | | | | (484) | | | | | | — | | |
Net loan sale gains | | | | | 71 | | | | | | 197 | | |
Investment management fees | | | | | 644 | | | | | | 412 | | |
Other income | | | | | 236 | | | | | | 178 | | |
Total Noninterest Income | | | | | 4,347 | | | | | | 3,543 | | |
Noninterest Expenses | | | | | | | | | | | | | |
Compensation and employee benefits | | | | | 12,451 | | | | | | 10,403 | | |
Data processing | | | | | 644 | | | | | | 612 | | |
Premises and occupancy costs | | | | | 2,637 | | | | | | 2,182 | | |
Automatic teller machine expense | | | | | 512 | | | | | | 439 | | |
Federal deposit insurance | | | | | 293 | | | | | | 279 | | |
Core deposit amortization | | | | | 836 | | | | | | 772 | | |
Merger related expenses | | | | | — | | | | | | 3,089 | | |
Other operating expenses | | | | | 4,694 | | | | | | 3,943 | | |
Total Noninterest Expenses | | | | | 22,067 | | | | | | 21,719 | | |
Income before Income Tax Expense | | | | | 11,049 | | | | | | 6,787 | | |
Income Tax Expense | | | | | | | | | | | | | |
Federal | | | | | 1,713 | | | | | | 2,106 | | |
State | | | | | 535 | | | | | | 356 | | |
Total Income Tax Expense | | | | | 2,248 | | | | | | 2,462 | | |
Net Income | | | | $ | 8,801 | | | | | $ | 4,325 | | |
Earnings Per Share: | | | | | | | | | | | | | |
Basic earnings per common share | | | | $ | 1.90 | | | | | $ | 1.08 | | |
Diluted earnings per common share | | | | $ | 1.88 | | | | | $ | 1.05 | | |
Cash dividends paid per common share | | | | $ | 0.88 | | | | | $ | 0.77 | | |
Basic weighted average shares outstanding | | | | | 4,634,003 | | | | | | 4,021,942 | | |
Diluted weighted average shares outstanding | | | | | 4,685,044 | | | | | | 4,127,318 | | |
|
| | | Years Ended December 31 | | |||||||||
| | | 2018 | | | 2017 | | ||||||
Net Income | | | | $ | 8,801 | | | | | $ | 4,325 | | |
Other comprehensive (loss) income: | | | | | | | | | | | | | |
Change in unrealized (loss) gain on securities available for sale | | | | | (1,949) | | | | | | 788 | | |
Tax effect | | | | | 409 | | | | | | (269) | | |
Reclassification adjustment for security losses realized in income | | | | | 17 | | | | | | 323 | | |
Tax effect | | | | | (4) | | | | | | (111) | | |
Change in pension obligation for defined benefit plan | | | | | 90 | | | | | | 733 | | |
Tax effect | | | | | (19) | | | | | | (249) | | |
Total other comprehensive (loss) income | | | | | (1,456) | | | | | | 1,215 | | |
Total Comprehensive Income | | | | $ | 7,345 | | | | | $ | 5,540 | | |
|
| | | Common Stock | | | Additional Paid-In Capital | | | Retained Earnings | | | Unearned ESOP Shares | | | Accumulated Other Comprehensive Income (Loss) | | | Total Stockholders’ Equity | | ||||||||||||||||||
Balance, December 31, 2016 | | | | $ | 26 | | | | | $ | 16,626 | | | | | $ | 59,107 | | | | | $ | (1,992) | | | | | $ | (777) | | | | | $ | 72,990 | | |
Net income | | | | | — | | | | | | — | | | | | | 4,325 | | | | | | — | | | | | | — | | | | | | 4,325 | | |
Other comprehensive income | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,215 | | | | | | 1,215 | | |
Reclassification of certain income tax effects from accumulated other comprehensive income | | | | | — | | | | | | — | | | | | | (90) | | | | | | — | | | | | | 90 | | | | | | — | | |
Stock repurchases (5,454 shares) | | | | | — | | | | | | (161) | | | | | | — | | | | | | — | | | | | | — | | | | | | (161) | | |
Cash dividends ($0.77 per share) | | | | | — | | | | | | — | | | | | | (3,312) | | | | | | — | | | | | | — | | | | | | (3,312) | | |
Stock options exercised (18,895 shares) | | | | | — | | | | | | 311 | | | | | | — | | | | | | — | | | | | | — | | | | | | 311 | | |
Excess tax benefits from stock based compensation | | | | | — | | | | | | (142) | | | | | | 142 | | | | | | — | | | | | | — | | | | | | — | | |
Compensation expense on stock awards | | | | | — | | | | | | 529 | | | | | | — | | | | | | — | | | | | | — | | | | | | 529 | | |
Compensation expense on ESOP | | | | | — | | | | | | 250 | | | | | | — | | | | | | 153 | | | | | | — | | | | | | 403 | | |
Merger consideration (2,168,097 shares) | | | | | 22 | | | | | | 57,650 | | | | | | — | | | | | | — | | | | | | — | | | | | | 57,672 | | |
Balance, December 31, 2017 | | | | $ | 48 | | | | | $ | 75,063 | | | | | $ | 60,172 | | | | | $ | (1,839) | | | | | $ | 528 | | | | | $ | 133,972 | | |
Net income | | | | | — | | | | | | — | | | | | | 8,801 | | | | | | — | | | | | | — | | | | | | 8,801 | | |
Other comprehensive loss | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,456) | | | | | | (1,456) | | |
Change in accouting principle for adoption of ASU 2016-01 | | | | | — | | | | | | — | | | | | | 416 | | | | | | — | | | | | | (416) | | | | | | — | | |
Stock repurchases (13,482 shares) | | | | | — | | | | | | (428) | | | | | | — | | | | | | — | | | | | | — | | | | | | (428) | | |
Cash dividends ($0.88 per share) | | | | | — | | | | | | — | | | | | | (4,088) | | | | | | — | | | | | | — | | | | | | (4,088) | | |
Stock options exercised (35,536 shares) | | | | | — | | | | | | 648 | | | | | | — | | | | | | — | | | | | | — | | | | | | 648 | | |
Compensation expense on stock awards | | | | | — | | | | | | 1 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1 | | |
Compensation expense on ESOP | | | | | — | | | | | | 287 | | | | | | — | | | | | | 153 | | | | | | — | | | | | | 440 | | |
Balance, December 31, 2018 | | | | $ | 48 | | | | | $ | 75,571 | | | | | $ | 65,301 | | | | | $ | (1,686) | | | | | $ | (1,344) | | | | | $ | 137,890 | | |
|
| | | Years Ended December 31 | | |||||||||
| | | 2018 | | | 2017 | | ||||||
Cash Flows From Operating Activities | | | | | | | | | | | | | |
Net income | | | | $ | 8,801 | | | | | $ | 4,325 | | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | | | | | |
Depreciation and amortization | | | | | 1,352 | | | | | | 929 | | |
Provision for loan losses | | | | | 572 | | | | | | 517 | | |
Amortization of core deposit intangible | | | | | 836 | | | | | | 772 | | |
Net loss on sale of securities available for sale | | | | | 17 | | | | | | 323 | | |
Net gain on sale of equity securities | | | | | (394) | | | | | | — | | |
Origination of loans held for sale | | | | | (5,552) | | | | | | (8,063) | | |
Proceeds from sale of loans held for sale | | | | | 5,623 | | | | | | 8,260 | | |
Net equity securities fair value adjustment losses | | | | | 484 | | | | | | — | | |
Net loan sale gains | | | | | (71) | | | | | | (197) | | |
Compensation expense on ESOP | | | | | 440 | | | | | | 403 | | |
Compensation expense on stock awards | | | | | 1 | | | | | | 529 | | |
Deferred income taxes | | | | | (288) | | | | | | 646 | | |
Increase in accrued interest receivable | | | | | (166) | | | | | | (357) | | |
Earnings on bank-owned life insurance | | | | | (533) | | | | | | (510) | | |
Increase in accrued interest payable | | | | | 161 | | | | | | 187 | | |
Other, net | | | | | 1,350 | | | | | | 1,144 | | |
Net Cash Provided by Operating Activities | | | | | 12,633 | | | | | | 8,908 | | |
Cash Flows Used In Investing Activities | | | | | | | | | | | | | |
Net decrease (increase) in loans | | | | | 14,077 | | | | | | (54,638) | | |
Purchases of investment securities | | | | | (11,699) | | | | | | (10,117) | | |
Purchases of equity securities | | | | | (546) | | | | | | — | | |
Purchases of mortgage-backed securities | | | | | (27,985) | | | | | | (36,768) | | |
Proceeds from maturities of certificates of deposits | | | | | 500 | | | | | | — | | |
Proceeds from maturities/principal repayments/calls of investment securities | | | | | 1,335 | | | | | | 8,920 | | |
Proceeds from maturities/principal repayments/calls of mortgage-backed securities | | | | | 12,046 | | | | | | 8,850 | | |
Proceeds from sales of investment securities | | | | | 4,830 | | | | | | 27,123 | | |
Proceeds from sales of equity securities | | | | | 1,900 | | | | | | — | | |
Proceeds from sales of mortgage-backed securities | | | | | — | | | | | | 25,853 | | |
Purchase of Federal Home Loan Bank stock | | | | | (3,532) | | | | | | (6,405) | | |
Redemption of Federal Home Loan Bank stock | | | | | 5,173 | | | | | | 4,847 | | |
Proceeds from sales of foreclosed real estate | | | | | 450 | | | | | | 181 | | |
Net purchases of office properties and equipment | | | | | (374) | | | | | | (1,206) | | |
Cash and cash equivalents acquired | | | | | — | | | | | | 9,611 | | |
Net Cash Used in Investing Activities | | | | | (3,825) | | | | | | (23,749) | | |
Cash Flows From Financing Activities | | | | | | | | | | | | | |
Net decrease in demand, savings and club accounts | | | | | (11,725) | | | | | | (5,250) | | |
Net increase in certificate accounts | | | | | 34,753 | | | | | | 3,965 | | |
Net (decrease) increase in securities sold under agreements to repurchase | | | | | (2,103) | | | | | | 1,898 | | |
Repayments of Federal Home Loan Bank short-term borrowings | | | | | (165,491) | | | | | | (239,737) | | |
Proceeds from Federal Home Loan Bank short-term borrowing | | | | | 142,994 | | | | | | 202,134 | | |
Repayments of Federal Home Loan Bank advances | | | | | (35,689) | | | | | | (15,651) | | |
Proceeds from Federal Home Loan Bank advances | | | | | 33,000 | | | | | | 75,635 | | |
Net (decrease) increase in advance deposits by borrowers for taxes and insurance | | | | | (737) | | | | | | 754 | | |
Exercise of stock options | | | | | 648 | | | | | | 311 | | |
Dividends paid | | | | | (4,088) | | | | | | (3,312) | | |
Stock repurchases | | | | | (428) | | | | | | (161) | | |
Net Cash Provided (Used) by Financing Activities | | | | | (8,866) | | | | | | 20,586 | | |
Net Increase (Decrease) in Cash and Cash Equivalents | | | | | (58) | | | | | | 5,745 | | |
Cash and Cash Equivalents – Beginning | | | | | 16,265 | | | | | | 10,520 | | |
Cash and Cash Equivalents – Ending | | | | $ | 16,207 | | | | | $ | 16,265 | | |
|
| | | Years Ended December 31 | | |||||||||
| | | 2018 | | | 2017 | | ||||||
Supplementary Cash Flows Information | | | | | | | | | | | | | |
Interest paid | | | | $ | 7,293 | | | | | $ | 4,889 | | |
Income taxes paid | | | | $ | 1,594 | | | | | $ | 1,411 | | |
Supplementary Schedule of Noncash Investing and Financing Activities | | | | | | | | | | | | | |
Foreclosed real estate acquired in settlement of loans | | | | $ | 486 | | | | | $ | 419 | | |
Loan participation payoffs not settled | | | | $ | 3,000 | | | | | $ | — | | |
Merger with Allegheny Valley Bancorp. Inc. | | | | ||||||||||
Non-cash assets acquired | | | | | | | | | | | | | |
Investment securities available for sale | | | | | | | | | | $ | 95,919 | | |
Federal Home Loan Bank stock | | | | | | | | | | | 4,739 | | |
Loans receivable, net of allowance for loan losses | | | | | | | | | | | 311,736 | | |
Office properties and equipment, net | | | | | | | | | | | 4,434 | | |
Accrued interest receivable | | | | | | | | | | | 1,144 | | |
Bank owned life insurance | | | | | | | | | | | 6,486 | | |
Core deposit intangible | | | | | | | | | | | 4,116 | | |
Other assets | | | | | | | | | | | 2,742 | | |
Goodwill | | | | | | | | | | | 17,216 | | |
| | | | | | | | | | | 448,532 | | |
Liabilities assumed | | | | | | | | | | | | | |
Certificate accounts | | | | | | | | | | | (70,422) | | |
Deposits other than certificate accounts | | | | | | | | | | | (263,522) | | |
Federal Home Loan Bank short-term borrowings | | | | | | | | | | | (64,624) | | |
Accrued interest payable | | | | | | | | | | | (615) | | |
Other liabilities | | | | | | | | | | | (1,288) | | |
| | | | | | | | | | | (400,471) | | |
Net Non Cash Assets Acquired | | | | | | | | | | $ | 48,061 | | |
Cash and cash equivalents acquired | | | | | | | | | | $ | 9,611 | | |
|
For Mr. Hasley, the account balance is subject to a five-year vesting schedule, with 20% of the outstanding shares of common stock of the Bank.
For Mr. Hasley, upon a benefit totermination of employment, the financial statements by more accurately aligningaccount balance will be paid in fifteen substantially equal annual installments, and in the impactsevent of Mr. Hasley’s death, the items carried in accumulated other comprehensive income with the associated tax effect. The adoption resultedaccount balance will be paid in a one-time cumulative effect adjustmentlump sum to his beneficiary. For Mr. Zimmerman, upon a termination of $90,000 between retained earnings and accumulated other comprehensive income onemployment or death, the Consolidated Statement of Financial Condition for December 31, 2017. The adjustment had no impact on net income for the year ended December 31, 2017.
| | | Years Ended December 31 | | |||||||||
| | | 2018 | | | 2017 | | ||||||
Net income available to common stockholders | | | | $ | 8,801 | | | | | $ | 4,325 | | |
Basic EPS: | | | | | | | | | | | | | |
Weighted average shares outstanding | | | | | 4,634,003 | | | | | | 4,021,942 | | |
Basic EPS | | | | $ | 1.90 | | | | | $ | 1.08 | | |
Diluted EPS: | | | | | | | | | | | | | |
Weighted average shares outstanding | | | | | 4,634,003 | | | | | | 4,021,942 | | |
Diluted effect of common stock equivalents | | | | | 51,041 | | | | | | 105,376 | | |
Total diluted weighted average shares outstanding | | | | | 4,685,044 | | | | | | 4,127,318 | | |
Diluted EPS | | | | $ | 1.88 | | | | | $ | 1.05 | | |
Equity Incentive Plans. Standard Financial Condition in accordance with (a) above. Additionally, in accordance with (e) above, the Company measured the fair value of its loan portfolio as of December 31, 2018 using an exit price notion (See Note 15 Fair Value of Assets and Liabilities).
| | | Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | | ||||||||||||
December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government and agency obligations due: | | | | | | | | | | | | | | | | | | | | | | | | | |
Beyond 1 year but within 5 years | | | | $ | 7,428 | | | | | $ | — | | | | | $ | (81) | | | | | $ | 7,347 | | |
Beyond 5 year but within 10 years | | | | | 940 | | | | | | — | �� | | | | | (17) | | | | | | 923 | | |
Corporate bonds due: | | | | | | | | | | | | | | | | | | | | | | | | | |
1 year or less | | | | | 1,758 | | | | | | — | | | | | | (15) | | | | | | 1,743 | | |
Beyond 1 year but within 5 years | | | | | 1,472 | | | | | | 2 | | | | | | (10) | | | | | | 1,464 | | |
Beyond 5 years but within 10 years | | | | | 996 | | | | | | — | | | | | | (2) | | | | | | 994 | | |
Municipal obligations due: | | | | | | | | | | | | | | | | | | | | | | | | | |
Beyond 1 year but within 5 years | | | | | 6,658 | | | | | | 298 | | | | | | — | | | | | | 6,956 | | |
Beyond 5 years but within 10 years | | | | | 22,384 | | | | | | 132 | | | | | | (81) | | | | | | 22,435 | | |
Beyond 10 years | | | | | 24,504 | | | | | | 82 | | | | | | (279) | | | | | | 24,307 | | |
| | | | $ | 66,140 | | | | | $ | 514 | | | | | $ | (485) | | | | | $ | 66,169 | | |
December 31, 2017: | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government and agency obligations due: | | | | | | | | | | | | | | | | | | | | | | | | | |
Beyond 1 year but within 5 years | | | | $ | 7,400 | | | | | $ | 4 | | | | | $ | (8) | | | | | $ | 7,396 | | |
Beyond 5 year but within 10 years | | | | | 934 | | | | | | 10 | | | | | | — | | | | | | 944 | | |
Corporate bonds due: | | | | | | | | | | | | | | | | | | | | | | | | | |
Beyond 1 year but within 5 years | | | | | 2,276 | | | | | | 14 | | | | | | (18) | | | | | | 2,272 | | |
Municipal obligations due: | | | | | | | | | | | | | | | | | | | | | | | | | |
Beyond 1 year but within 5 years | | | | | 8,702 | | | | | | 441 | | | | | | — | | | | | | 9,143 | | |
Beyond 5 years but within 10 years | | | | | 25,803 | | | | | | 339 | | | | | | (21) | | | | | | 26,121 | | |
Beyond 10 years | | | | | 15,483 | | | | | | 129 | | | | | | (99) | | | | | | 15,513 | | |
Equity securities | | | | | 3,647 | | | | | | 557 | | | | | | (34) | | | | | | 4,170 | | |
| | | | $ | 64,245 | | | | | $ | 1,494 | | | | | $ | (180) | | | | | $ | 65,559 | | |
|
| | | Less than 12 Months | | | 12 Months or More | | | Total | | |||||||||||||||||||||||||||
| | | Fair Value | | | Gross Unrealized Losses | | | Fair Value | | | Gross Unrealized Losses | | | Fair Value | | | Gross Unrealized Losses | | ||||||||||||||||||
December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government and agency obligations | | | | $ | — | | | | | $ | — | | | | | $ | 8,270 | | | | | | (98) | | | | | $ | 8,270 | | | | | $ | (98) | | |
Corporate bonds | | | | | 1,490 | | | | | | (12) | | | | | | 1,743 | | | | | | (15) | | | | | | 3,233 | | | | | | (27) | | |
Municipal obligations | | | | | 10,049 | | | | | | (55) | | | | | | 11,730 | | | | | | (305) | | | | | | 21,779 | | | | | | (360) | | |
Total | | | | $ | 11,539 | | | | | $ | (67) | | | | | $ | 21,743 | | | | | $ | (418) | | | | | $ | 33,282 | | | | | $ | (485) | | |
December 31, 2017: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government and agency obligations | | | | $ | 5,924 | | | | | $ | (8) | | | | | $ | — | | | | | $ | — | | | | | $ | 5,924 | | | | | $ | (8) | | |
Corporate bonds | | | | | 751 | | | | | | (3) | | | | | | 1,001 | | | | | | (15) | | | | | | 1,752 | | | | | | (18) | | |
Municipal obligations | | | | | 4,911 | | | | | | (19) | | | | | | 4,491 | | | | | | (101) | | | | | | 9,402 | | | | | | (120) | | |
Equity securities | | | | | 857 | | | | | | (34) | | | | | | — | | | | | | — | | | | | | 857 | | | | | | (34) | | |
Total | | | | $ | 12,443 | | | | | $ | (64) | | | | | $ | 5,492 | | | | | $ | (116) | | | | | $ | 17,935 | | | | | $ | (180) | | |
|
| | | Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | | ||||||||||||
December 31, 2018: | | | ��� | | | | | | | | | | | | | | | | | | | | | | |
Government pass-throughs: | | | | | | | | | | | | | | | | | | | | | | | | | |
Ginnie Mae | | | | $ | 19,213 | | | | | $ | 1 | | | | | $ | (324) | | | | | $ | 18,890 | | |
Fannie Mae | | | | | 13,952 | | | | | | 7 | | | | | | (339) | | | | | | 13,620 | | |
Freddie Mac | | | | | 12,662 | | | | | | — | | | | | | (252) | | | | | | 12,410 | | |
Private pass-throughs | | | | | 25,064 | | | | | | — | | | | | | (349) | | | | | | 24,715 | | |
Collateralized mortgage obligations | | | | | 12,328 | | | | | | 11 | | | | | | (180) | | | | | | 12,159 | | |
| | | | $ | 83,219 | | | | | $ | 19 | | | | | $ | (1,444) | | | | | $ | 81,794 | | |
December 31, 2017: | | | | | | | | | | | | | | | | | | | | | | | | | |
Government pass-throughs: | | | | | | | | | | | | | | | | | | | | | | | | | |
Ginnie Mae | | | | $ | 17,416 | | | | | $ | 6 | | | | | $ | (131) | | | | | $ | 17,291 | | |
Fannie Mae | | | | | 16,078 | | | | | | 75 | | | | | | (8) | | | | | | 16,145 | | |
Freddie Mac | | | | | 12,510 | | | | | | 41 | | | | | | (14) | | | | | | 12,537 | | |
Private pass-throughs | | | | | 14,603 | | | | | | 8 | | | | | | (113) | | | | | | 14,498 | | |
Collateralized mortgage obligations | | | | | 7,277 | | | | | | — | | | | | | (118) | | | | | | 7,159 | | |
| | | | $ | 67,884 | | | | | $ | 130 | | | | | $ | (384) | | | | | $ | 67,630 | | |
|
| | | Less than 12 Months | | | 12 Months or More | | | Total | | |||||||||||||||||||||||||||
| | | Fair Value | | | Gross Unrealized Losses | | | Fair Value | | | Gross Unrealized Losses | | | Fair | | | Gross Unrealized Losses | | ||||||||||||||||||
December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Government pass-throughs: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ginnie Mae | | | | $ | 4,850 | | | | | $ | (26) | | | | | $ | 13,794 | | | | | $ | (298) | | | | | $ | 18,644 | | | | | $ | (324) | | |
Fannie Mae | | | | | 403 | | | | | | (2) | | | | | | 12,152 | | | | | | (337) | | | | | | 12,555 | | | | | | (339) | | |
Freddie Mac | | | | | 680 | | | | | | (24) | | | | | | 11,699 | | | | | | (228) | | | | | | 12,379 | | | | | | (252) | | |
Private pass-throughs | | | | | 14,436 | | | | | | (134) | | | | | | 9,359 | | | | | | (215) | | | | | | 23,795 | | | | | | (349) | | |
Collateralized mortgage obligations | | | | | 4,091 | | | | | | (40) | | | | | | 6,048 | | | | | | (140) | | | | | | 10,139 | | | | | | (180) | | |
Total | | | | $ | 24,460 | | | | | $ | (226) | | | | | $ | 53,052 | | | | | $ | (1,218) | | | | | $ | 77,512 | | | | | $ | (1,444) | | |
|
| | | Less than 12 Months | | | 12 Months or More | | | Total | | |||||||||||||||||||||||||||
| | | Fair Value | | | Gross Unrealized Losses | | | Fair Value | | | Gross Unrealized Losses | | | Fair | | | Gross Unrealized Losses | | ||||||||||||||||||
December 31, 2017: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Government pass-throughs: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ginnie Mae | | | | $ | 12,231 | | | | | $ | (87) | | | | | $ | 2,591 | | | | | $ | (44) | | | | | $ | 14,822 | | | | | $ | (131) | | |
Fannie Mae | | | | | 3,227 | | | | | | (8) | | | | | | — | | | | | | — | | | | | | 3,227 | | | | | | (8) | | |
Freddie Mac | | | | | 5,949 | | | | | | (14) | | | | | | — | | | | | | — | | | | | | 5,949 | | | | | | (14) | | |
Private pass-throughs | | | | | 12,559 | | | | | | (113) | | | | | | — | | | | | | — | | | | | | 12,559 | | | | | | (113) | | |
Collateralized mortgage obligations | | | | | 5,968 | | | | | | (79) | | | | | | 1,191 | | | | | | (39) | | | | | | 7,159 | | | | | | (118) | | |
Total | | | | $ | 39,934 | | | | | $ | (301) | | | | | $ | 3,782 | | | | | $ | (83) | | | | | $ | 43,716 | | | | | $ | (384) | | |
|
| | | Real Estate Loans | | | | | | | | | | | | | | | | | | | | |||||||||||||||
| | | One-to-four- family Residential and Construction | | | Commercial Real Estate | | | Home Equity Loans and Lines of Credit | | | Commercial Business | | | Other Loans | | | Total | | ||||||||||||||||||
December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Collectively evaluated for impairment | | | | $ | 253,913 | | | | | $ | 308,775 | | | | | $ | 123,373 | | | | | $ | 46,196 | | | | | $ | 1,139 | | | | | $ | 733,396 | | |
Individually evaluated for impairment | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total loans before allowance for loan losses | | | | $ | 253,913 | | | | | $ | 308,775 | | | | | $ | 123,373 | | | | | $ | 46,196 | | | | | $ | 1,139 | | | | | $ | 733,396 | | |
December 31, 2017: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Collectively evaluated for impairment | | | | $ | 261,715 | | | | | $ | 300,702 | | | | | $ | 130,915 | | | | | $ | 56,122 | | | | | $ | 1,413 | | | | | $ | 750,867 | | |
Individually evaluated for impairment | | | | | — | | | | | | 295 | | | | | | — | | | | | | — | | | | | | — | | | | | | 295 | | |
Total loans before allowance for loan losses | | | | $ | 261,715 | | | | | $ | 300,997 | | | | | $ | 130,915 | | | | | $ | 56,122 | | | | | $ | 1,413 | | | | | $ | 751,162 | | |
|
| Contractually required principal and interest | | | | $ | 2,467 | | |
| Non-accretable discount | | | | | (2,467) | | |
| Expected cash flows | | | | | — | | |
| Accretable discount | | | | | — | | |
| Estimated fair value | | | | $ | — | | |
|
| | | Impaired Loans With Allowance | | | Impaired Loans Without Allowance | | | Total Impaired Loans | | |||||||||||||||||||||
| | | Recorded Investment | | | Related Allowance | | | Recorded Investment | | | Recorded Investment | | | Unpaid Principal Balance | | |||||||||||||||
December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Total impaired loans | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
December 31, 2017: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate | | | | $ | — | | | | | $ | — | | | | | $ | 295 | | | | | $ | 295 | | | | | $ | 295 | | |
Total impaired loans | | | | $ | — | | | | | $ | — | | | | | $ | 295 | | | | | $ | 295 | | | | | $ | 295 | | |
|
| | | Years Ended December 31 | | |||||||||
| | | 2018 | | | 2017 | | ||||||
Average investment in impaired loans: | | | | | | | | | | | | | |
Commercial real estate | | | | $ | 236 | | | | | $ | 861 | | |
| | | | $ | 236 | | | | | $ | 861 | | |
Interest income recognized on impaired loans | | | | $ | — | | | | | $ | — | | |
| | | Pass | | | Special Mention | | | Substandard | | | Doubtful | | | Total | | |||||||||||||||
December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to-four-family residential and construction | | | | $ | 252,186 | | | | | $ | — | | | | | $ | 1,727 | | | | | $ | — | | | | | $ | 253,913 | | |
Commercial real estate | | | | | 303,161 | | | | | | 4,851 | | | | | | 763 | | | | | | — | | | | | | 308,775 | | |
Home equity loans and lines of credit | | | | | 123,053 | | | | | | 62 | | | | | | 258 | | | | | | — | | | | | | 123,373 | | |
Commercial business loans | | | | | 45,902 | | | | | | 232 | | | | | | 62 | | | | | | — | | | | | | 46,196 | | |
Other loans | | | | | 1,120 | | | | | | — | | | | | | 19 | | | | | | — | | | | | | 1,139 | | |
Total | | | | $ | 725,422 | | | | | $ | 5,145 | | | | | $ | 2,829 | | | | | $ | — | | | | | $ | 733,396 | | |
December 31, 2017: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to-four-family residential and construction | | | | $ | 259,463 | | | | | $ | 211 | | | | | $ | 2,041 | | | | | $ | — | | | | | $ | 261,715 | | |
Commercial real estate | | | | | 295,164 | | | | | | 5,077 | | | | | | 756 | | | | | | — | | | | | | 300,997 | | |
Home equity loans and lines of credit | | | | | 130,763 | | | | | | — | | | | | | 152 | | | | | | — | | | | | | 130,915 | | |
Commercial business loans | | | | | 55,878 | | | | | | 239 | | | | | | 5 | | | | | | — | | | | | | 56,122 | | |
Other loans | | | | | 1,411 | | | | | | — | | | | | | 2 | | | | | | — | | | | | | 1,413 | | |
Total | | | | $ | 742,679 | | | | | $ | 5,527 | | | | | $ | 2,956 | | | | | $ | — | | | | | $ | 751,162 | | |
|
| | | Current | | | 30 – 59 Days Past Due | | | 60 – 89 Days Past Due | | | Non-Accrual | | | 90 Days Past Due & Accruing | | | Total Loans | | ||||||||||||||||||
December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to-four-family residential and construction | | | | $ | 250,691 | | | | | $ | 1,341 | | | | | $ | 154 | | | | | $ | 1,727 | | | | | $ | — | | | | | $ | 253,913 | | |
Commercial real estate | | | | | 307,740 | | | | | | 374 | | | | | | — | | | | | | 661 | | | | | | — | | | | | | 308,775 | | |
Home equity loans and lines of credit | | | | | 122,929 | | | | | | 163 | | | | | | 23 | | | | | | 258 | | | | | | — | | | | | | 123,373 | | |
Commercial business loans | | | | | 45,434 | | | | | | 690 | | | | | | 10 | | | | | | 62 | | | | | | — | | | | | | 46,196 | | |
Other loans | | | | | 1,111 | | | | | | 3 | | | | | | 3 | | | | | | 19 | | | | | | 3 | | | | | | 1,139 | | |
Total | | | | $ | 727,905 | | | | | $ | 2,571 | | | | | $ | 190 | | | | | $ | 2,727 | | | | | $ | 3 | | | | | $ | 733,396 | | |
|
| | | Current | | | 30 – 59 Days Past Due | | | 60 – 89 Days Past Due | | | Non-Accrual | | | 90 Days Past Due & Accruing | | | Total Loans | | ||||||||||||||||||
December 31, 2017: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
One-to-four-family residential and construction | | | | $ | 258,202 | | | | | $ | 1,342 | | | | | $ | 272 | | | | | $ | 1,899 | | | | | $ | — | | | | | $ | 261,715 | | |
Commercial real estate | | | | | 299,888 | | | | | | 338 | | | | | | 15 | | | | | | 756 | | | | | | — | | | | | | 300,997 | | |
Home equity loans and lines of credit | | | | | 130,383 | | | | | | 122 | | | | | | 166 | | | | | | 244 | | | | | | — | | | | | | 130,915 | | |
Commercial business loans | | | | | 56,034 | | | | | | 83 | | | | | | — | | | | | | 5 | | | | | | — | | | | | | 56,122 | | |
Other loans | | | | | 1,376 | | | | | | 14 | | | | | | 1 | | | | | | 3 | | | | | | 19 | | | | | | 1,413 | | |
Total | | | | $ | 745,883 | | | | | $ | 1,899 | | | | | $ | 454 | | | | | $ | 2,907 | | | | | $ | 19 | | | | | $ | 751,162 | | |
|
| | | Real Estate Loans | | | | | | | | | | | | | | | | | | | | |||||||||||||||
| | | One-to-four- family Residential and Construction | | | Commercial Real Estate | | | Home Equity Loans and Lines of Credit | | | Commercial Business | | | Other Loans | | | Total | | ||||||||||||||||||
Balance at December 31, 2017 | | | | $ | 1,384 | | | | | $ | 2,003 | | | | | $ | 400 | | | | | $ | 333 | | | | | $ | 7 | | | | | $ | 4,127 | | |
Charge-offs | | | | | — | | | | | | (80) | | | | | | — | | | | | | (244) | | | | | | (48) | | | | | | (372) | | |
Recoveries | | | | | 69 | | | | | | 2 | | | | | | 11 | | | | | | 5 | | | | | | — | | | | | | 87 | | |
Provision | | | | | (402) | | | | | | 836 | | | | | | (99) | | | | | | 192 | | | | | | 45 | | | | | | 572 | | |
Balance December 31, 2018 | | | | $ | 1,051 | | | | | $ | 2,761 | | | | | $ | 312 | | | | | $ | 286 | | | | | $ | 4 | | | | | $ | 4,414 | | |
Balance at December 31, 2016 | | | | $ | 1,280 | | | | | $ | 1,787 | | | | | $ | 547 | | | | | $ | 211 | | | | | $ | 12 | | | | | $ | 3,837 | | |
Charge-offs | | | | | (185) | | | | | | — | | | | | | (51) | | | | | | (1) | | | | | | (29) | | | | | | (266) | | |
Recoveries | | | | | 28 | | | | | | 1 | | | | | | — | | | | | | 3 | | | | | | 7 | | | | | | 39 | | |
Provision | | | | | 261 | | | | | | 215 | | | | | | (96) | | | | | | 120 | | | | | | 17 | | | | | | 517 | | |
Balance December 31, 2017 | | | | $ | 1,384 | | | | | $ | 2,003 | | | | | $ | 400 | | | | | $ | 333 | | | | | $ | 7 | | | | | $ | 4,127 | | |
|
| | | Real Estate Loans | | | | | | | | | | | | | | | | | | | | |||||||||||||||
| | | One-to-four- family Residential and Construction | | | Commercial Real Estate | | | Home Equity Loans and Lines of Credit | | | Commercial Business | | | Other Loans | | | Total | | ||||||||||||||||||
Evaluated for Impairment: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Collectively | | | | | 1,051 | | | | | | 2,761 | | | | | | 312 | | | | | | 286 | | | | | | 4 | | | | | | 4,414 | | |
Balance at December 31, 2018 | | | | $ | 1,051 | | | | | $ | 2,761 | | | | | $ | 312 | | | | | $ | 286 | | | | | $ | 4 | | | | | $ | 4,414 | | |
Evaluated for Impairment: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Collectively | | | | | 1,384 | | | | | | 2,003 | | | | | | 400 | | | | | | 333 | | | | | | 7 | | | | | | 4,127 | | |
Balance at December 31, 2017 | | | | $ | 1,384 | | | | | $ | 2,003 | | | | | $ | 400 | | | | | $ | 333 | | | | | $ | 7 | | | | | $ | 4,127 | | |
|
| | | December 31 | | |||||||||
| | | 2018 | | | 2017 | | ||||||
Land and land improvements | | | | $ | 3,152 | | | | | $ | 3,152 | | |
Buildings and building improvements | | | | | 10,475 | | | | | | 10,433 | | |
Leasehold improvements | | | | | 871 | | | | | | 862 | | |
Furnitures, fixtures, and equipment | | | | | 4,678 | | | | | | 4,607 | | |
| | | | $ | 19,176 | | | | | $ | 19,054 | | |
Less accumulated depreciation | | | | | (11,447) | | | | | | (10,877) | | |
Plus projects in progress | | | | | 65 | | | | | | 14 | | |
Premises and equipment, net | | | | $ | 7,794 | | | | | $ | 8,191 | | |
|
| Years Ending December 31: | | | | | | | |
| 2019 | | | | $ | 407 | | |
| 2020 | | | | | 278 | | |
| 2021 | | | | | 30 | | |
| Total | | | | $ | 715 | | |
|
| | | December 31 | | |||||||||
| | | 2018 | | | 2017 | | ||||||
Noninterest-bearing demand | | | | $ | 135,708 | | | | | $ | 135,786 | | |
Interest-bearing demand | | | | | 100,163 | | | | | | 96,987 | | |
Savings | | | | | 147,695 | | | | | | 150,762 | | |
Money market | | | | | 87,611 | | | | | | 99,367 | | |
Time deposits | | | | | 246,697 | | | | | | 211,944 | | |
Total deposits | | | | $ | 717,874 | | | | | $ | 694,846 | | |
|
| One year or less | | | | $ | 86,458 | | |
| Over one through two years | | | | | 76,313 | | |
| Over two through three years | | | | | 29,167 | | |
| Over three through four years | | | | | 14,011 | | |
| Over four through five years | | | | | 31,283 | | |
| Over five years | | | | | 9,465 | | |
| Total | | | | $ | 246,697 | | |
|
| Three months or less | | | | $ | 14,665 | | |
| Over three to six months | | | | | 10,976 | | |
| Over six to twelve months | | | | | 13,001 | | |
| Over twelve months | | | | | 69,425 | | |
| Total | | | | $ | 108,067 | | |
|
| | | December 31 | | |||||||||
| | | 2018 | | | 2017 | | ||||||
Balance | | | | $ | 4,524 | | | | | $ | 27,021 | | |
Average balance outstanding during the period | | | | | 12,696 | | | | | | 38,565 | | |
Maximum amount outstanding at any month-end | | | | | 51,500 | | | | | | 72,926 | | |
Weighted average interest rate at period end | | | | | 2.64% | | | | | | 1.54% | | |
Average interest rate during the period | | | | | 1.79 | | | | | | 1.22 | | |
| | | | | | | | | December 31 | | |||||||||
Stated Maturity | | | Interest Rate | | | 2018 | | | 2017 | | |||||||||
June 11, 2018 | | | | | 0.92 | | | | | $ | — | | | | | $ | 750 | | |
June 22, 2018 | | | | | 1.26 | | | | | | — | | | | | | 1,805 | | |
November 13, 2018 | | | | | 1.65 | | | | | | — | | | | | | 3,000 | | |
January 22, 2019 | | | | | 1.25 | | | | | | 125 | | | | | | 1,608 | | |
June 24, 2019 | | | | | 1.63 | | | | | | 1,805 | | | | | | 1,805 | | |
September 11, 2019 | | | | | 1.59 | | | | | | 6,438 | | | | | | 14,904 | | |
November 12, 2019 | | | | | 1.91 | | | | | | 3,151 | | | | | | 3,151 | | |
January 8, 2020 | | | | | 1.70 | | | | | | 5,794 | | | | | | 5,794 | | |
March 20, 2020 | | | | | 2.51 | | | | | | 6,309 | | | | | | — | | |
July 29, 2020 | | | | | 1.91 | | | | | | 1,822 | | | | | | 1,822 | | |
August 17, 2020 | | | | | 1.63 | | | | | | 5,635 | | | | | | 5,635 | | |
September 8, 2020 | | | | | 1.69 | | | | | | 9,726 | | | | | | 15,157 | | |
December 9, 2020 | | | | | 1.92 | | | | | | 3,500 | | | | | | 3,500 | | |
January 26, 2021 | | | | | 1.94 | | | | | | 4,000 | | | | | | 4,000 | | |
February 22, 2021 | | | | | 1.95 | | | | | | 3,365 | | | | | | 3,365 | | |
March 8, 2021 | | | | | 2.54 | | | | | | 7,639 | | | | | | — | | |
August 18, 2021 | | | | | 1.80 | | | | | | 2,289 | | | | | | 3,119 | | |
September 8, 2021 | | | | | 1.77 | | | | | | 11,469 | | | | | | 15,503 | | |
November 15, 2021 | | | | | 3.23 | | | | | | 3,000 | | | | | | — | | |
September 8, 2022 | | | | | 1.86 | | | | | | 7,587 | | | | | | 9,522 | | |
December 9, 2022 | | | | | 2.26 | | | | | | 3,212 | | | | | | 3,212 | | |
December 29, 2022 | | | | | 2.45 | | | | | | 8,097 | | | | | | 10,000 | | |
May 30, 2023 | | | | | 2.93 | | | | | | 10,000 | | | | | | — | | |
| | | | | | | | | | $ | 104,963 | | | | | $ | 107,652 | | |
|
| | | Remaining Contractual Maturity of the Agreements | | |||||||||||||||||||||||||||
| | | Overnight and Continuous | | | Up to 30 Days | | | 30 – 90 Days | | | Greater than 90 Days | | | Total | | |||||||||||||||
December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government obligations | | | | $ | 6,031 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 6,031 | | |
Municipal obligations | | | | | 4,824 | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,824 | | |
Total collateral pledged | | | | $ | 10,855 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 10,855 | | |
Gross amount of recognized liabilities for securities sold under agreements to repurchase | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 2,137 | | |
Amounts related to agreements not included in offsetting disclosures above | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 8,718 | | |
December 31, 2017: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government obligations | | | | $ | 1,643 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 1,643 | | |
Municipal obligations | | | | | 5,727 | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,727 | | |
Total collateral pledged | | | | $ | 7,370 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 7,370 | | |
Gross amount of recognized liabilities for securities sold under agreements to repurchase | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 4,240 | | |
Amounts related to agreements not included in offsetting disclosures above | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 3,130 | | |
|
| | | December 31 | | |||||||||
| | | 2018 | | | 2017 | | ||||||
Balance | | | | $ | 2,137 | | | | | $ | 4,240 | | |
Average balance outstanding during the period | | | | | 4,782 | | | | | | 3,373 | | |
Maximum amount outstanding at any month-end | | | | | 8,251 | | | | | | 6,274 | | |
Weighted average interest rate at period end | | | | | 0.19% | | | | | | 0.12% | | |
Average interest rate during the period | | | | | 0.23 | | | | | | 0.12 | | |
| | | Years Ended December 31 | | |||||||||
| | | 2018 | | | 2017 | | ||||||
Federal: | | | | | | | | | | | | | |
Current | | | | $ | 2,001 | | | | | $ | 1,460 | | |
Deferred | | | | | (288) | | | | | | 259 | | |
Change in corporate tax rate | | | | | — | | | | | | 387 | | |
| | | | $ | 1,713 | | | | | $ | 2,106 | | |
State, current | | | | $ | 535 | | | | | $ | 356 | | |
|
| | | December 31 | | |||||||||||||||||||||
| | | 2018 | | | 2017 | | ||||||||||||||||||
| | | Amount | | | % of Pre-tax Income | | | Amount | | | % of Pre-tax Income | | ||||||||||||
Expected federal tax rate | | | | $ | 2,321 | | | | | | 21.0% | | | | | $ | 2,307 | | | | | | 34.0% | | |
State taxes, net of federal tax benefit | | | | | 421 | | | | | | 3.8 | | | | | | 235 | | | | | | 3.5 | | |
Nontaxable interest income | | | | | (377) | | | | | | (3.4) | | | | | | (403) | | | | | | (5.9) | | |
Bank-owned life insurance | | | | | (112) | | | | | | (1.0) | | | | | | (173) | | | | | | (2.6) | | |
Merger expenses | | | | | — | | | | | | — | | | | | | 35 | | | | | | 0.5 | | |
Change in corporate tax rate | | | | | — | | | | | | — | | | | | | 387 | | | | | | 5.7 | | |
Other items, net | | | | | (5) | | | | | | (0.1) | | | | | | 74 | | | | | | 1.1 | | |
Effective Tax Rate | | | | $ | 2,248 | | | | | | 20.3% | | | | | $ | 2,462 | | | | | | 36.3% | | |
|
| | | December 31 | | |||||||||
| | | 2018 | | | 2017 | | ||||||
Deferred Tax Assets: | | | | | | | | | | | | | |
Allowance for loan losses | | | | $ | 927 | | | | | $ | 867 | | |
Employee benefits | | | | | 290 | | | | | | 195 | | |
Impairment reserves | | | | | 11 | | | | | | 17 | | |
Purchase accounting | | | | | — | | | | | | 70 | | |
Net unrealized losses on securities | | | | | 195 | | | | | | — | | |
Capital loss carryforward | | | | | 19 | | | | | | — | | |
Other, net | | | | | 148 | | | | | | 120 | | |
Total Deferred Tax Assets | | | | | 1,590 | | | | | | 1,269 | | |
Deferred Tax Liabilities: | | | | | | | | | | | | | |
Net unrealized gains on securities | | | | | — | | | | | | (223) | | |
Premises and equipment | | | | | (214) | | | | | | (292) | | |
Purchase accounting | | | | | (14) | | | | | | — | | |
Other, net | | | | | (46) | | | | | | (121) | | |
Total Deferred Tax Liabilities | | | | | (274) | | | | | | (636) | | |
Net Deferred Tax Assets | | | | $ | 1,316 | | | | | $ | 633 | | |
|
| | | December 31, 2018 | | |||||||||||||||||||||
| | | Bank | | | Company | | ||||||||||||||||||
| | | Amount | | | Ratio | | | Amount | | | Ratio | | ||||||||||||
Total capital (to risk weighted assets) | | | | | | | | | | | | | | | | | | | | | | | | | |
Actual | | | | $ | 111,857 | | | | | | 16.85% | | | | | $ | 115,390 | | | | | | 17.38% | | |
For capital adequacy purposes | | | | | 53,108 | | | | | | 8.00 | | | | | | 53,127 | | | | | | 8.00 | | |
To be well capitalized | | | | | 66,384 | | | | | | 10.00 | | | | | | 66,409 | | | | | | 10.00 | | |
Common equity tier I (to risk weighted assets) | | | | | | | | | | | | | | | | | | | | | | | | | |
Actual | | | | $ | 107,451 | | | | | | 16.19% | | | | | $ | 110,981 | | | | | | 16.71% | | |
For capital adequacy purposes | | | | | 29,873 | | | | | | 4.50 | | | | | | 29,884 | | | | | | 4.50 | | |
To be well capitalized | | | | | 43,150 | | | | | | 6.50 | | | | | | 43,166 | | | | | | 6.50 | | |
Tier I capital (to risk weighted assets) | | | | | | | | | | | | | | | | | | | | | | | | | |
Actual | | | | $ | 107,451 | | | | | | 16.19% | | | | | $ | 110,981 | | | | | | 16.71% | | |
For capital adequacy purposes | | | | | 39,831 | | | | | | 6.00 | | | | | | 39,845 | | | | | | 6.00 | | |
To be well capitalized | | | | | 53,108 | | | | | | 8.00 | | | | | | 53,127 | | | | | | 8.00 | | |
Tier I capital (to average assets) | | | | | | | | | | | | | | | | | | | | | | | | | |
Actual | | | | $ | 107,451 | | | | | | 11.33% | | | | | $ | 110,981 | | | | | | 11.71% | | |
For capital adequacy purposes | | | | | 37,947 | | | | | | 4.00 | | | | | | 37,921 | | | | | | 4.00 | | |
To be well capitalized | | | | | 47,434 | | | | | | 5.00 | | | | | | 47,401 | | | | | | 5.00 | | |
| | | December 31, 2017 | | |||||||||||||||||||||
| | | Bank | | | Company | | ||||||||||||||||||
| | | Amount | | | Ratio | | | Amount | | | Ratio | | ||||||||||||
Total capital (to risk weighted assets) | | | | | | | | | | | | | | | | | | | | | | | | | |
Actual | | | | $ | 104,414 | | | | | | 15.78% | | | | | $ | 109,553 | | | | | | 16.53% | | |
For capital adequacy purposes | | | | | 52,947 | | | | | | 8.00 | | | | | | 53,024 | | | | | | 8.00 | | |
To be well capitalized | | | | | 66,184 | | | | | | 10.00 | | | | | | 66,280 | | | | | | 10.00 | | |
Common equity tier I (to risk weighted assets) | | | | | | | | | | | | | | | | | | | | | | | | | |
Actual | | | | $ | 100,265 | | | | | | 15.15% | | | | | $ | 105,191 | | | | | | 15.87% | | |
For capital adequacy purposes | | | | | 29,783 | | | | | | 4.50 | | | | | | 29,826 | | | | | | 4.50 | | |
To be well capitalized | | | | | 43,020 | | | | | | 6.50 | | | | | | 43,082 | | | | | | 6.50 | | |
Tier I capital (to risk weighted assets) | | | | | | | | | | | | | | | | | | | | | | | | | |
Actual | | | | $ | 100,265 | | | | | | 15.15% | | | | | $ | 105,191 | | | | | | 15.87% | | |
For capital adequacy purposes | | | | | 39,711 | | | | | | 6.00 | | | | | | 39,768 | | | | | | 6.00 | | |
To be well capitalized | | | | | 52,947 | | | | | | 8.00 | | | | | | 53,024 | | | | | | 8.00 | | |
Tier I capital (to average assets) | | | | | | | | | | | | | | | | | | | | | | | | | |
Actual | | | | $ | 100,265 | | | | | | 10.55% | | | | | $ | 105,191 | | | | | | 11.01% | | |
For capital adequacy purposes | | | | | 38,030 | | | | | | 4.00 | | | | | | 38,221 | | | | | | 4.00 | | |
To be well capitalized | | | | | 47,538 | | | | | | 5.00 | | | | | | 47,776 | | | | | | 5.00 | | |
The 2012Equity Incentive Plan authorizes the grantingissuance of optionsup to purchase486,943 shares of the Company’sStandard common stock which may be nonqualifiedpursuant to grants of restricted stock options orawards, incentive stock options and restrictednon-qualified stock which is subject to vesting conditions and other restrictions. The 2012 Plan reserved an aggregateoptions; provided, however, that the maximum number of 486,943 shares of which 347,817stock that may be issued in connection withdelivered pursuant to the exercise of stock options is 347,817 (all of which may be granted as incentive stock options) and 139,126the maximum number of shares of stock that may be issued as restricted stock.
The remaining acquiredEquity Incentive Plan (the “2011 Plan”) provides for the granting of incentive stock options (as defined in section 422 of the Internal Revenue Code), nonstatutory stock options, restricted stock, and stock appreciation rights to eligible employees and directors. The 2011 Plan had an original term of ten years and it is administered by the Boardmembers of DirectorsStandard’s Compensation Committee. The Compensation Committee has the authority and discretion to select the persons who will receive awards; establish the terms and conditions relating to each award; adopt rules and regulations relating to the Equity Incentive Plan; and interpret the Equity Incentive Plan. The Equity Incentive Plan also permits the Compensation Committee to delegate all or a committee designatedany portion of its responsibilities and powers.
8
On April 7, 2017, stock options granted under the 2011 Plan automatically became stock options for common stock of Standard, subject to an adjustment for the exchange ratio, and all outstanding grants became fully vested.
Tax-Qualified Benefit Plans
401(k) Plan. The Bank maintains the Standard Bank, PaSB 401(k) Plan, administered by the Board. On September 28, 2018, 250 sharesPentegra Retirement Services, which provides benefits to substantially all of restricted stock were awarded outStandard’s employees (the “401(k) Plan”). Employees of the 2011 Plan. The award vests over two yearsBank who are 18 or older and the related compensation expense will be recognized straight line over the vesting period.
| | | Options | | | Weighted Average Exercise Price | | | Weighted Average Remaining Contractual Term | | |||||||||
Outstanding at December 31, 2016 | | | | | 248,075 | | | | | $ | 16.50 | | | | | | 5.56 | | |
Granted | | | | | — | | | | | | — | | | | |||||
Merger related options | | | | | 73,051 | | | | | | 19.61 | | | | | | | | |
Exercised | | | | | (18,895) | | | | | | 16.50 | | | | |||||
Forfeited | | | | | — | | | | | | — | | | | | | | | |
Outstanding at December 31, 2017 | | | | | 302,231 | | | | | $ | 17.25 | | | | | | 4.11 | | |
Granted | | | | | — | | | | | | — | | | | |||||
Exercised | | | | | (35,536) | | | | | | 18.25 | | | | |||||
Forfeited | | | | | — | | | | | | — | | | | | | | | |
Outstanding at December 31, 2018 | | | | | 266,695 | | | | | $ | 17.12 | | | | | | 3.32 | | |
Exercisable at December 31, 2017 | | | | | 302,231 | | | | | $ | 17.25 | | | | | | | | |
Exercisable at December 31, 2018 | | | | | 266,695 | | | | | $ | 17.12 | | | | | | | | |
| | | Number of Restricted Shares | | | Weighted Average Grant Date Price Per Share | | ||||||
Non-vested shares at December 31, 2016 | | | | | 19,860 | | | | | $ | 16.50 | | |
Granted | | | | | 2,424 | | | | | | 29.60 | | |
Vested | | | | | (22,284) | | | | | | 17.92 | | |
Forfeited | | | | | — | | | | | | — | | |
Non-vested shares at December 31, 2017 | | | | | — | | | | | $ | — | | |
Granted | | | | | 250 | | | | | | 31.10 | | |
Vested | | | | | — | | | | | | — | | |
Forfeited | | | | | — | | | | | | — | | |
Non-vested shares at December 31, 2018 | | | | | 250 | | | | | $ | 31.10 | | |
|
Defined Benefit Pension Plan. The ESOP’s sources of repayment of the loan can include dividends, if any, on the unallocated stock held by the ESOP and discretionary contributions from the Company to the ESOP and earnings thereon.
| | | December 31 | | |||||||||
| | | 2018 | | | 2017 | | ||||||
Change in projected benefit obligation: | | | | | | | | | | | | | |
Benefit obligation at beginning of year | | | | $ | 4,168 | | | | | $ | 4,780 | | |
Interest cost | | | | | 131 | | | | | | 175 | | |
Settlement loss (gain) | | | | | 11 | | | | | | (28) | | |
Actuarial gain | | | | | (312) | | | | | | (133) | | |
Benefits paid | | | | | (36) | | | | | | (30) | | |
Settlement payments | | | | | (525) | | | | | | (596) | | |
Projected benefit obligation at end of year | | | | | 3,437 | | | | | | 4,168 | | |
Change in plan assets: | | | | | | | | | | | | | |
Fair value of plan assets at beginning of year | | | | | 3,564 | | | | | | 3,683 | | |
Actual return on plan assets | | | | | (99) | | | | | | 497 | | |
Employer contribution | | | | | — | | | | | | 15 | | |
Benefits paid | | | | | (36) | | | | | | (30) | | |
Administrative expenses | | | | | (21) | | | | | | (5) | | |
Settlement payments | | | | | (525) | | | | | | (596) | | |
Fair value of plan assets at end of year | | | | | 2,883 | | | | | | 3,564 | | |
Funded status | | | | $ | (554) | | | | | $ | (604) | | |
Amounts recognized in accumulated other comprehensive income (loss) consist of: | | | | | | | | | | | | | |
Unrecognized actuarial loss | | | | $ | (400) | | | | | $ | (397) | | |
Total | | | | $ | (400) | | | | | $ | (397) | | |
|
Employee Stock Ownership Plan. The Bank adopted an ESOP for eligible employees in 2010. Eligible employees commenced participation in the ESOP on the later of October 6, 2010 or upon the first entry date commencing on or after the eligible employee’s completion of 1,000 hours of service during a continuous 12-month period and $4.2 million at December 31, 2018the attainment of age 21.
The ESOP trustee purchased, on behalf of the ESOP, 178,254 shares of Standard (previously Standard Financial Corp.) common stock issued in the offering and December 31, 2017, respectively.
The trustee holds the shares purchased by the ESOP in an unallocated suspense account, and shares are released from the suspense account on a pro-rata basis as the Bank repays the loan. The trustee will allocate the shares released among participants on the basis of each participant’s proportional share of compensation relative to all participants. Participants will become 100% vested upon the completion of six years ended December 31, 2018of service. Participants who were employed by the Bank immediately prior to the offering received credit for vesting purposes for years of service prior to adoption of the ESOP. Participants also will become fully vested automatically upon normal retirement, death or disability, a change in control, or termination of the ESOP. Generally, participants receive distributions from the ESOP upon separation from service.
The ESOP permits participants to direct the trustee as to how to vote the shares of common stock allocated to their accounts. The trustee votes unallocated shares and December 31, 2017 areallocated shares for which participants do not provide instructions on any matter in the same ratio as follows (dollars in thousands):
| | | Years Ended December 31 | | |||||||||
| | | 2018 | | | 2017 | | ||||||
Interest Cost | | | | $ | 131 | | | | | $ | 175 | | |
Expected return on plan assets | | | | | (162) | | | | | | (200) | | |
Amortization of net loss | | | | | 10 | | | | | | 96 | | |
Settlement obligation | | | | | 61 | | | | | | 72 | | |
Net periodic pension cost | | | | $ | 40 | | | | | $ | 143 | | |
|
Under applicable accounting requirements, the Bank records a compensation expense for the Years Ended December 31, 2018 and December 31, 2017
| | | December 31 | | |||||||||
| | | 2018 | | | 2017 | | ||||||
Net loss | | | | $ | 9 | | | | | $ | 10 | | |
Total | | | | $ | 9 | | | | | $ | 10 | | |
|
| | | December 31 | | |||||||||
| | | 2018 | | | 2017 | | ||||||
Discount rate | | | | | 4.00% | | | | | | 3.40% | | |
| | | December 31 | | |||||||||
| | | 2018 | | | 2017 | | ||||||
Discount rate | | | | | 4.00% | | | | | | 3.40% | | |
| | | December 31 | | |||||||||
Asset Category | | | 2018 | | | 2017 | | ||||||
Cash and Cash Equivalents | | | | | 2.89% | | | | | | 0.28% | | |
Equity Mutual Funds | | | | | 37.88 | | | | | | 71.13 | | |
Bond Mutual Funds | | | | | 59.23 | | | | | | 28.59 | | |
Total | | | | | 100.00% | | | | | | 100.00% | | |
|
| | | Level I | | | Level II | | | Level III | | | Total | | ||||||||||||
December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and Cash Equivalents | | | | $ | 83 | | | | | $ | — | | | | | $ | — | | | | | $ | 83 | | |
Domestic Stock Funds | | | | | 896 | | | | | | — | | | | | | — | | | | | | 896 | | |
International Stock Funds | | | | | 196 | | | | | | — | | | | | | — | | | | | | 196 | | |
Domestic Bond Funds | | | | | 1,708 | | | | | | — | | | | | | — | | | | | | 1,708 | | |
Total assets at fair value | | | | $ | 2,883 | | | | | $ | — | | | | | $ | — | | | | | $ | 2,883 | | |
December 31, 2017: | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and Cash Equivalents | | | | $ | 10 | | | | | $ | — | | | | | $ | — | | | | | $ | 10 | | |
Domestic Stock Funds | | | | | 2,040 | | | | | | — | | | | | | — | | | | | | 2,040 | | |
International Stock Funds | | | | | 495 | | | | | | — | | | | | | — | | | | | | 495 | | |
Domestic Bond Funds | | | | | 929 | | | | | | — | | | | | | — | | | | | | 929 | | |
International Bond Funds | | | | | 90 | | | | | | — | | | | | | — | | | | | | 90 | | |
Total assets at fair value | | | | $ | 3,564 | | | | | $ | — | | | | | $ | — | | | | | $ | 3,564 | | |
|
Year Ended December 31, | | | Plan Benefits | | |||
2019 | | | | $ | 674 | | |
2020 | | | | | 195 | | |
2021 | | | | | 146 | | |
2022 | | | | | 152 | | |
2023 | | | | | 141 | | |
2024 – 2028 | | | | | 848 | | |
Total | | | | $ | 2,156 | | |
|
| | | December 31 | | |||||||||
| | | 2018 | | | 2017 | | ||||||
One-to-four family and construction: | | | | | | | | | | | | | |
Loan commitments | | | | $ | 872 | | | | | $ | 510 | | |
Undisbursed home equity lines of credit | | | | | 34,485 | | | | | | 30,335 | | |
Undisbursed funds – construction loans in process | | | | | 6,129 | | | | | | 7,109 | | |
Commerical loan commitments | | | | | 67,240 | | | | | | 52,749 | | |
Standby letters of credit | | | | | 4,202 | | | | | | 1,961 | | |
Other | | | | | 24,251 | | | | | | 24,037 | | |
Total | | | | $ | 137,179 | | | | | $ | 116,701 | | |
|
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | | ||||||||||||||
December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Investment securities available for sale: | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
U.S. government and agency obligations | | | | $ | — | | | | | $ | 8,270 | | | | | $ | — | | | | | $ | 8,270 | | | | ||
Corporate bonds | | | | | — | | | | | | 4,201 | | | | | | — | | | | | | 4,201 | | | | ||
Municipal obligations | | | | | — | | | | | | 53,698 | | | | | | — | | | | | | 53,698 | | | | ||
Total investment securities available for sale | | | | | — | | | | | | 66,169 | | | | | | — | | | | | | 66,169 | | | | ||
Equity securities | | | | | 2,725 | | | | | | — | | | | | | — | | | | | | 2,725 | | | | ||
Mortgage-backed securities available for sale | | | | | — | | | | | | 81,794 | | | | | | — | | | | | | 81,794 | | | | ||
Total recurring fair value measurements | | | | $ | 2,725 | | | | | $ | 147,963 | | | | | $ | — | | | | | $ | 150,688 | | | | ||
December 31, 2017: | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
Investment securities available for sale: | | | | | | | | | | | | | | | | | | | | | | | | | | | ||
U.S. government and agency obligations | | | | $ | — | | | | | $ | 8,340 | | | | | $ | — | | | | | $ | 8,340 | | | | ||
Corporate bonds | | | | | — | | | | | | 2,272 | | | | | | — | | | | | | 2,272 | | | | ||
Municipal obligations | | | | | — | | | | | | 50,777 | | | | | | — | | | | | | 50,777 | | | | ||
Equity securities | | | | | 4,170 | | | | | | — | | | | | | — | | | | | | 4,170 | | | | ||
Total investment securities available for sale | | | | | 4,170 | | | | | | 61,389 | | | | | | — | | | | | | 65,559 | | | | ||
Mortgage-backed securities available for sale | | | | | — | | | | | | 67,630 | | | | | | — | | | | | | 67,630 | | | | ||
Total recurring fair value measurements | | | | $ | 4,170 | | | | | $ | 129,019 | | | | | $ | — | | | | | $ | 133,189 | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||||||||||||
December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | |
Foreclosed real estate | | | | $ | — | | | | | $ | — | | | | | $ | 486 | | | | | $ | 486 | | |
Total nonrecurring fair value measurements | | | | $ | — | | | | | $ | — | | | | | $ | 486 | | | | | $ | 486 | | |
December 31, 2017: | | | | | | | | | | | | | | | | | | | | | | | | | |
Foreclosed real estate | | | | $ | — | | | | | $ | — | | | | | $ | 419 | | | | | $ | 419 | | |
Impaired loans | | | | | — | | | | | | — | | | | | | 295 | | | | | | 295 | | |
Total nonrecurring fair value measurements | | | | $ | — | | | | | $ | — | | | | | $ | 714 | | | | | $ | 714 | | |
|
| | | | | | | | | | | | | | | Quantitative Information about Level 3 Fair Value Measurements | | ||||||
| | | December 31 | | | Valuation Techniques | | | Unobservable Input | | | Range (Weighted Average) | | |||||||||
| | | 2018 | | | 2017 | | |||||||||||||||
Foreclosed real estate | | | | $ | 486 | | | | | $ | 419 | | | | Appraisal of collateral(1) | | | Appraisal adjustments(2) | | | 0% to 30% (17%) | |
| | | | | | | | | | | | | | | Liquidation expenses(2) | | | | | | 0% to 15% (11%) | |
Impaired loans | | | | $ | — | | | | | $ | 295 | | | | Fair value of collateral(1),(3) | | | Appraisal adjustments(2) | | | 0% to 20% (20%) | |
| | | | | | | | | | | | | | | Liquidation expenses(2) | | | | | | 0% to 10% (6%) | |
| | | Carrying Value | | | Estimated Fair Value | | | Level 1 | | | Level 2 | | | Level 3 | | |||||||||||||||
December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Financial Instruments – Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash on hand and due from banks(1) | | | | $ | 3,371 | | | | | $ | 3,371 | | | | | $ | 3,371 | | | | | $ | — | | | | | $ | — | | |
Interest-earning deposits in other institutions(1) | | | | | 12,836 | | | | | | 12,836 | | | | | | 12,836 | | | | | | — | | | | | | — | | |
Certificate of deposit(1) | | | | | 249 | | | | | | 249 | | | | | | 249 | | | | | | — | | | | | | — | | |
Investment securities(2) | | | | | 66,169 | | | | | | 66,169 | | | | | | | | | | | | 66,169 | | | | | | — | | |
Equity Securities(3) | | | | | 2,725 | | | | | | 2,725 | | | | | | 2,725 | | | | | | | | | | | | | | |
Mortgage-backed securities(2) | | | | | 81,794 | | | | | | 81,794 | | | | | | — | | | | | | 81,794 | | | | | | — | | |
Federal Home Loan Bank stock(1) | | | | | 7,827 | | | | | | 7,827 | | | | | | 7,827 | | | | | | — | | | | | | — | | |
Loans receivable(1)(4) | | | | | 728,982 | | | | | | 717,491 | | | | | | — | | | | | | — | | | | | | 717,491 | | |
Bank-owned life insurance(1) | | | | | 22,572 | | | | | | 22,572 | | | | | | 22,572 | | | | | | — | | | | | | — | | |
Accrued interest receivable(1) | | | | | 2,823 | | | | | | 2,823 | | | | | | 2,823 | | | | | | — | | | | | | — | | |
Financial Instruments – Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Demand, savings and club accounts(1) | | | | $ | 471,177 | | | | | $ | 471,177 | | | | | $ | 471,177 | | | | | $ | — | | | | | $ | — | | |
Certificate deposit accounts(1) | | | | | 246,697 | | | | | | 245,740 | | | | | | — | | | | | | — | | | | | | 245,740 | | |
Federal Home Loan Bank short-term borrowings(1) | | | | | 4,524 | | | | | | 4,524 | | | | | | 4,524 | | | | | | — | | | | | | — | | |
Federal Home Loan Bank advances(1) | | | | | 104,963 | | | | | | 104,345 | | | | | | — | | | | | | — | | | | | | 104,345 | | |
Securities sold under agreements to repurchase(1) | | | | | 2,137 | | | | | | 2,137 | | | | | | 2,137 | | | | | | — | | | | | | — | | |
Accrued interest payable(1) | | | | | 1,154 | | | | | | 1,154 | | | | | | 1,154 | | | | | | — | | | | | | — | | |
December 31, 2017: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Financial Instruments – Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash on hand and due from banks | | | | $ | 3,523 | | | | | $ | 3,523 | | | | | $ | 3,523 | | | | | $ | — | | | | | $ | — | | |
Interest-earning deposits in other institutions | | | | | 12,742 | | | | | | 12,742 | | | | | | 12,742 | | | | | | — | | | | | | — | | |
Certificate of deposit | | | | | 749 | | | | | | 749 | | | | | | 749 | | | | | | — | | | | | | — | | |
Investment securities | | | | | 65,559 | | | | | | 65,559 | | | | | | 4,170 | | | | | | 61,389 | | | | | | — | | |
Mortgage-backed securities | | | | | 67,630 | | | | | | 67,630 | | | | | | — | | | | | | 67,630 | | | | | | — | | |
Federal Home Loan Bank stock | | | | | 9,468 | | | | | | 9,468 | | | | | | 9,468 | | | | | | — | | | | | | — | | |
Loans receivable | | | | | 747,035 | | | | | | 747,371 | | | | | | — | | | | | | — | | | | | | 747,371 | | |
Bank-owned life insurance | | | | | 22,040 | | | | | | 22,040 | | | | | | 22,040 | | | | | | — | | | | | | — | | |
Accrued interest receivable | | | | | 2,657 | | | | | | 2,657 | | | | | | 2,657 | | | | | | — | | | | | | — | | |
Financial Instruments – Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Demand, savings and club accounts | | | | $ | 482,902 | | | | | $ | 482,902 | | | | | $ | 482,902 | | | | | $ | — | | | | | $ | — | | |
Certificate deposit accounts | | | | | 211,944 | | | | | | 211,454 | | | | | | — | | | | | | — | | | | | | 211,454 | | |
Federal Home Loan Bank short-term borrowings | | | | | 27,021 | | | | | | 27,021 | | | | | | 27,021 | | | | | | — | | | | | | — | | |
Federal Home Loan Bank advances | | | | | 107,652 | | | | | | 107,223 | | | | | | — | | | | | | — | | | | | | 107,223 | | |
Securities sold under agreements to repurchase | | | | | 4,240 | | | | | | 4,240 | | | | | | 4,240 | | | | | | — | | | | | | — | | |
Accrued interest payable | | | | | 993 | | | | | | 993 | | | | | | 993 | | | | | | — | | | | | | — | | |
9
Statement of Financial Condition (Dollars in thousands) | | | December 31 | | |||||||||
| 2018 | | | 2017 | | ||||||||
Assets | | | | | | | | | | | | | |
Cash | | | | $ | 1,421 | | | | | $ | 980 | | |
Interest-earning deposits with other institutions | | | | | 47 | | | | | | 473 | | |
Cash and cash equivalents | | | | | 1,468 | | | | | | 1,453 | | |
Equity securities | | | | | 1,022 | | | | | | 2,451 | | |
Accrued interest receivable and other assets | | | | | 1,047 | | | | | | 1,208 | | |
Investment in subsidiary | | | | | 134,451 | | | | | | 128,904 | | |
Total Assets | | | | $ | 137,988 | | | | | $ | 134,016 | | |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | | |
Accrued interest payable and other liabilities | | | | $ | 98 | | | | | $ | 44 | | |
Stockholders’ equity | | | | | 137,890 | | | | | | 133,972 | | |
Total Liabilities and Stockholders’ Equity | | | | $ | 137,988 | | | | | $ | 134,016 | | |
|
Statement of Operations (Dollars in thousands) | | | Years Ended December 31 | | |||||||||
| 2018 | | | 2017 | | ||||||||
Income | | | | | | | | | | | | | |
Dividends from subsidiary | | | | $ | 2,000 | | | | | $ | 2,000 | | |
Interest income | | | | | 62 | | | | | | 60 | | |
Gain (loss) on sale of investments | | | | | 394 | | | | | | (56) | | |
Net equity securities fair value adjustment losses | | | | | (468) | | | | | | — | | |
Other income | | | | | — | | | | | | 1 | | |
Total Income | | | | | 1,988 | | | | | | 2,005 | | |
Operating expenses | | | | | 259 | | | | | | 499 | | |
Total Expense | | | | | 259 | | | | | | 499 | | |
Income before taxes | | | | | 1,729 | | | | | | 1,506 | | |
Credit for income taxes | | | | | (70) | | | | | | (304) | | |
Income before equity in undistributed net income of subsidiaries | | | | | 1,799 | | | | | | 1,810 | | |
Equity in undistributed income of Standard Bank | | | | | 7,002 | | | | | | 2,515 | | |
| | | | $ | 8,801 | | | | | $ | 4,325 | | |
|
The compensation expense resulting from the release of the common stock from the suspense account and allocation to Consolidated Financial Statementsforplan participants result in a corresponding reduction in the Years Ended December 31, 2018 and December 31, 2017
Statement of Cash Flows (Dollars in thousands) | | | Years Ended December 31 | | |||||||||
| 2018 | | | 2017 | | ||||||||
Net income | | | | $ | 8,801 | | | | | $ | 4,325 | | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | | | | | |
Net (gain) loss on sale of equity securities | | | | | (394) | | | | | | 56 | | |
Net equity securities fair value adjustment losses | | | | | 468 | | | | | | — | | |
Net change in other assets and liabilities | | | | | 215 | | | | | | (103) | | |
Equity in undistributed income of subsidiaries | | | | | (7,002) | | | | | | (2,515) | | |
Net cash provided by operating activities | | | | | 2,088 | | | | | | 1,763 | | |
Investing Activities: | | | | | | | | | | | | | |
Proceeds from sale of equtiy securities | | | | | 1,900 | | | | | | 601 | | |
Purchases of equity securities | | | | | (546) | | | | | | (318) | | |
Cash and cash equialents acquired | | | | | — | | | | | | 408 | | |
Capital contribution to subsidiaries | | | | | — | | | | | | (57,672) | | |
Net cash (used for) provided by investing activities | | | | | 1,354 | | | | | | (56,981) | | |
Financing activities: | | | | | | | | | | | | | |
Proceeds from exercise of stock options | | | | | 648 | | | | | | 311 | | |
Proceeds from stock issuance related to merger | | | | | — | | | | | | 57,672 | | |
Stock compensation expense | | | | | 1 | | | | | | 529 | | |
ESOP expense | | | | | 440 | | | | | | 403 | | |
Stock repurchases | | | | | (428) | | | | | | (161) | | |
Dividends paid | | | | | (4,088) | | | | | | (3,312) | | |
Net cash provided by (used for) financing activities | | | | | (3,427) | | | | | | 55,442 | | |
Net change in cash and cash equivalents | | | | | 15 | | | | | | 224 | | |
Cash and cash equivalents at the beginning of the year | | | | | 1,453 | | | | | | 1,229 | | |
Cash and cash equivalents at the end of the year | | | | $ | 1,468 | | | | | $ | 1,453 | | |
|
At least five business days prior to Consolidated Financial Statementsfor the Years Ended December 31, 2018 and December 31, 2017
| | | Unrealized Gains on Available for Sale Securities | | | Unrecognized Pension Costs | | | Total | | |||||||||
Balance as of December 31, 2016 | | | | $ | (32) | | | | | $ | (745) | | | | | $ | (777) | | |
Other comprehensive income before reclassification | | | | | 519 | | | | | | 373 | | | | | | 892 | | |
Amount reclassified from accumulated other comprehensive income | | | | | 212 | | | | | | 111 | | | | | | 323 | | |
Total other comprehensive income | | | | | 731 | | | | | | 484 | | | | | | 1,215 | | |
Reclassification of certain income tax effects from accumulated other comprehensive income | | | | | 141 | | | | | | (51) | | | | | | 90 | | |
Balance as of December 31, 2017 | | | | $ | 840 | | | | | $ | (312) | | | | | $ | 528 | | |
Other comprehensive income before reclassification | | | | | (1,540) | | | | | | 15 | | | | | | (1,525) | | |
Amount reclassified from accumulated other comprehensive loss | | | | | 13 | | | | | | 56 | | | | | | 69 | | |
Total other comprehensive (loss) income | | | | | (1,527) | | | | | | 71 | | | | | | (1,456) | | |
Change in accounting principle for adoption of ASU 2016-01 | | | | | (416) | | | | | | — | | | | | | (416) | | |
Balance as of December 31, 2018 | | | | $ | (1,103) | | | | | $ | (241) | | | | | $ | (1,344) | | |
|
| | | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | | | Affected Line on the Consolidated Statements of Income | | |||
December 31, 2018: | | | | | | | | | | |
Unrealized losses on available for sale securities | | | | $ | 17 | | | | Net losses on sales of securities | |
| | | | | (4) | | | | Income tax expense | |
| | | | | 13 | | | | Net of tax | |
Amortization of defined benefit items: Actuarial loss | | | | | 10 | | | | Other operating expenses | |
Distribution settlement | | | | | 61 | | | | Other operating expenses | |
| | | | | (15) | | | | Income tax expense | |
| | | | | 56 | | | | Net of tax | |
Total reclassification for the period | | | | $ | 69 | | | | Net income | |
December 31, 2017: | | | | | | | | | | |
Unrealized losses on available for sale securities | | | | $ | 323 | | | | Net losses on sales of securities | |
| | | | | (111) | | | | Income tax expense | |
| | | | | 212 | | | | Net of tax | |
Amortization of defined benefit items: Actuarial gains | | | | | 96 | | | | Other operating expenses | |
Distribution settlement | | | | | 72 | | | | Other operating expenses | |
| | | | | (57) | | | | Income tax expense | |
| | | | | 111 | | | | Net of tax | |
Total reclassification for the period | | | | $ | 323 | | | | Net income | |
|
| | | Year Ended December 31, | | |||||||||
| | | 2018 | | | 2017 | | ||||||
Noninterest income | | | | | | | | | | | | | |
In scope of Topic 606: | | | | | | | | | | | | | |
Service charges on deposit accounts | | | | $ | 2,900 | | | | | $ | 2,510 | | |
Investment management fees | | | | | 644 | | | | | | 412 | | |
Noninterest income (in-scope of Topic 606) | | | | | 3,544 | | | | | | 2,922 | | |
Noninterest income (out-of-scope of Topic 606) | | | | | 803 | | | | | | 621 | | |
Total noninterest income | | | | $ | 4,347 | | | | | $ | 3,543 | | |
|
Directors’ Compensation
Director Fees. During the Company did not expect to receive all contractually required payments at the acquisition date. At the acquisition date, the Company recorded $2.5 million of purchased credit impaired loans. These loans were reserved at 100% given the unlikelihood of collection of the principal and interest on the loans.
| Purchase Price Consideration in Common Stock | | | | | | | | | | | | | |
| AVLY common shares settled for stock | | | | | 1,040,924 | | | | | | | | |
| Exchange Ratio | | | | | 2.083 | | | | | | | | |
| Standard AVB Financial Corp. shares issued | | | | | 2,168,097 | | | | | | | | |
| Value assigned to Standard AVB Financial common share | | | | $ | 26.60 | | | | | | | | |
| Purchase price per share | | | | $ | 55.41 | | | | | | | | |
| Purchase price assigned AVLY common shares exchanged for Standard AVB Financial Corp. | | | | | | | | | | $ | 57,672 | | |
| Net Assets Acquired: | | | | | | | | | | | | | |
| AVLY shareholders’ equity | | | | | 48,398 | | | | | | | | |
| AVLY Goodwill | | | | | (8,144) | | | | | | | | |
| Total tangible equity | | | | | 40,254 | | | | | | | | |
| Adjustments to reflect assets acquired at fair value: | | | | | | | | | | | | | |
| Loans | | | | | | | | | | | | | |
| Interest rate | | | | | (861) | | | | | | | | |
| General Credit | | | | | (3,851) | | | | | | | | |
| Specific Credit-non amortizing | | | | | (2,467) | | | | | | | | |
| Elimination of existing loan ALLL | | | | | 3,886 | | | | | | | | |
| Certificates of Deposit Yield Premium | | | | | (902) | | | | | | | | |
| Core Deposit Intangible | | | | | 4,116 | | | | | | | | |
| Fixed assets | | | | | 384 | | | | | | | | |
| Deferred Tax Asset | | | | | (103) | | | | | | | | |
| | | | | | | | | | | | 40,456 | | |
| Goodwill resulting from the merger | | | | | | | | | | $ | 17,216 | | |
| Total Purchase Price | | | | | | | | | | $ | 57,672 | | |
| Net Assets Acquired: | | | | | | | | | | | | | |
| Cash | | | | | 9,611 | | | | | | | | |
| Securities available for sale | | | | | 95,919 | | | | | | | | |
| Loan | | | | | 311,736 | | | | | | | | |
| Premises | | | | | 4,434 | | | | | | | | |
| Accrued Interest receivable | | | | | 1,144 | | | | | | | | |
| Bank-owned life insurance | | | | | 6,486 | | | | | | | | |
| Deferred tax assets | | | | | — | | | | | | | | |
| Core deposit intangible | | | | | 4,116 | | | | | | | | |
| Other assets | | | | | 7,481 | | | | | | | | |
| Time deposits | | | | | (70,422) | | | | | | | | |
| Deposits other than time deposits | | | | | (263,522) | | | | | | | | |
| Borrowings | | | | | (64,624) | | | | | | | | |
| Accrued interest payable and other liabilities | | | | | (1,903) | | | | | | | | |
| | | | | | | | | | | | 40,456 | | |
| Goodwill resulting from the AVLY merger | | | | | | | | | | $ | 17,216 | | |
| 2019 | | | | | 628 | | |
| 2020 | | | | | 472 | | |
| 2021 | | | | | 352 | | |
| 2022 | | | | | 325 | | |
| 2023 | | | | | 325 | | |
| 2024 | | | | | 325 | | |
| 2025 | | | | | 81 | | |
| | | | | $ | 2,508 | | |
|
The following table sets forth the Chief Executive Officer, the President and the Executive Vice President and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934). Based on that evaluation, the Company’s management, including the Chief Executive Officer, the President and the Executive Vice President and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2018.
| | Fees earned or | | | Stock | | | Option | | | Non-equity | | | Nonqualified | | | All other | | | Total | | ||||||||||||||||||||||||
Terence L. Graft | | | | | 42,000 | | | | | | 8,476 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 50,476 | | | ||
John M. Lally | | | | | 32,000 | | | | | | 8,476 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 40,476 | | | ||
David C. Mathews | | | | | 32,000 | | | | | | 8,476 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 40,476 | | | ||
Ronald J. Mock | | | | | 32,000 | | | | | | 8,476 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 40,476 | | | ||
Dale A. Walker | | | | | 36,000 | | | | | | 8,476 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 44,476 | | | ||
Jennifer H. Lunden (1) | | | | | 30,000 | | | | | | 8,476 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 38,476 | | | ||
William T. Ferri | | | | | 30,000 | | | | | | 8,476 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 38,476 | | | ||
Paul A. Iurlano | | | | | 30,000 | | | | | | 8,476 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 38,476 | | | ||
Gregory J. Saxon | | | | | 37,200 | | | | | | 8,476 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 45,676 | | | ||
Thomas J. Rennie | | | | | 30,000 | | | | | | 8,476 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 38,476 | | | ||
R. Craig Thomasmeyer | | | | | 32,000 | | | | | | 8,476 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 40,476 | | |
(1) Jennifer H. Lunden resigned from the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15-d15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.Board of Directors effective January 8, 2021.
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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Principal Holders
Persons and groups who beneficially own in excess of certain owners and management is incorporated herein by reference fromfive percent of the Company’s Proxy Statement, specificallycommon stock are required to file certain reports with the sections captioned “Voting Securities and Principal Holders Thereof”Exchange Commission regarding such beneficial ownership. The following table sets forth, as of March 31, 2021, certain information as to the shares of the Company’s common stock owned by persons who beneficially own more than five percent of the Company’s outstanding shares of common stock. We know of no persons, except as listed below, who beneficially owned more than five percent of the outstanding shares of the Company’s common stock as of March 31, 2021. For purposes of the following table and “Proposal 1 — Electionthe table included under the heading “Management,” in accordance with Rule 13d-3 under the Securities Exchange Act of Directors — Director Compensation”1934, as amended, a person is deemed to be the beneficial owner of any shares of common stock (i) over which he or she has, or shares, directly or indirectly, voting or investment power or (ii) as to which he or she has the right to acquire beneficial ownership at any time within 60 days after March 31, 2021.
Name and Address of Beneficial Owner | | | Number of Shares Owned and | | | Percent of Shares of | | ||||||
Standard Bank, PaSB Employee Stock Ownership Plan | | | | | 243,731(2) | | | | | | 5.1% | | |
(1) | Based on 4,773,716 shares of Standard common stock outstanding as of March 31, 2021. |
(2) Based on information contained in a Schedule 13G/A filed with the U.S. Securities and “Summary Compensation Table”.Exchange Commission on February 16, 2021.
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The following table sets forth information about the shares of Standard common stock owned by each director, each named executive officer identified in the summary compensation table and all directors and executive officers as a group, as of March 31, 2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name(1) | | | Positions | | | Age(2) | | | Director | | | Current | | | Shares of | | | Percent | |||||||||||||||
DIRECTORS | |||||||||||||||||||||||||||||||||
William T. Ferri | | | Director | | | | | 76 | | | | | | 2007 | | | | | | 2020 | | | | | | 45,160(6) | | | | | | * | |
Paul A. Iurlano | | | Director | | | | | 66 | | | | | | 2004 | | | | | | 2020 | | | | | | 28,162(7) | | | | | | * | |
Gregory J. Saxon | | | Vice Chairman of the Board | | | | | 56 | | | | | | 2002 | | | | | | 2020 | | | | | | 17,824(8) | | | | | | * | |
Andrew W. Hasley | | | Chief Executive Officer, President and Director | | | | | 57 | | | | | | 2006 | | | | | | 2021 | | | | | | 49,636(8) | | | | | | 1.04% | |
Thomas J. Rennie | | | Director | | | | | 71 | | | | | | 2008 | | | | | | 2021 | | | | | | 29,421(9) | | | | | | * | |
R. Craig Thomasmeyer | | | Director | | | | | 56 | | | | | | 2004 | | | | | | 2021 | | | | | | 32,068(10) | | | | | | * | |
Timothy K. Zimmerman | | | Senior Executive Vice President, Chief Operating Officer and Director | | | | | 70 | | | | | | 1993 | | | | | | 2021 | | | | | | 82,570(11) | | | | | | 1.73% | |
Terence L. Graft | | | Chairman of the Board | | | | | 71 | | | | | | 1991 | | | | | | 2022 | | | | | | 50,371(12) | | | | | | 1.06% | |
John M. Lally | | | Director | | | | | 65 | | | | | | 2009 | | | | | | 2022 | | | | | | 32,793 | | | | | | * | |
David C. Mathews | | | Director | | | | | 66 | | | | | | 2006 | | | | | | 2022 | | | | | | 60,517(13) | | | | | | 1.27% | |
Ronald J. Mock | | | Director | | | | | 64 | | | | | | 2009 | | | | | | 2022 | | | | | | 17,126 | | | | | | * | |
Dale A. Walker | | | Director | | | | | 71 | | | | | | 1999 | | | | | | 2022 | | | | | | 34,600(14) | | | | | | * | |
| |||||||||||||||||||||||||||||||||
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS | |||||||||||||||||||||||||||||||||
Susan A. Parente | | | Executive Vice President – Chief Financial Officer | | | | | 58 | | | | | | — | | | | | | — | | | | | | 18,430(15) | | | | | | * | |
John P. Kline | | | Executive Vice President – Chief Lending Officer | | | | | 56 | | | | | | — | | | | | | — | | | | | | 1,483(16) | | | | | | * | |
Susan M. DeLuca | | | Senior Vice President – Chief Risk Officer | | | | | 64 | | | | | | — | | | | | | — | | | | | | 9,836(17) | | | | | | * | |
Christian M. Chelli | | | Senior Vice President – Chief Credit Officer | | | | | 52 | | | | | | — | | | | | | — | | | | | | 7,427(18) | | | | | | * | |
Sheila D. Crystaloski | | | Senior Vice President – Chief Technology Officer | | | | | 58 | | | | | | — | | | | | | — | | | | | | 24,320(19) | | | | | | * | |
All directors and executive officers as a group (18 persons) | | | | | | | | | | | | | | | | | | | | | | | | | | 529,405 | | | | | | 11.09% | |
*Less than 1%.
(1) The mailing address for each person listed is 2640 Monroeville Boulevard, Monroeville, Pennsylvania 15146.
(2) As of March 31, 2021.
(3) | Reflects initial election to the Board of Directors of Standard Financial Corp. or Allegheny Valley Bancorp, Inc., as applicable. On April 7, 2017, Allegheny Valley Bancorp, Inc. merged into Standard Financial Corp., with the resulting entity renamed Standard AVB Financial Corp. |
(4) | In accordance with Rule 13d-3 under the Securities Exchange Act of 1934, a person is deemed to be the beneficial owner for purposes of this table, of any shares of common stock if he has shared voting or investment power with respect to such security, or has a right to acquire beneficial ownership at any time within 60 days from the date as of which beneficial ownership is being determined. As used herein, “voting power” is the power to vote or direct the voting of shares and “investment power” is the power to dispose or direct the disposition of shares, and includes all shares held directly as well as |
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by spouses and minor children, in trust and other indirect ownership, over which shares the named individuals effectively exercise sole or shared voting or investment power.
(5) Based on 4,773,716 shares outstanding as of March 31, 2021.
(6) Includes 4,147 shares held in an IRA for the benefit of Mr. Ferri’s spouse.
(7) | Includes 8,982 shares held in an IRA for the benefit of Mr. Iurlano, 263 shares held by Mr. Iurlano’s spouse and 1,728 held in an IRA for the benefit of Mr. Iurlano’s spouse. |
(8) Includes 2,036 shares held in the ESOP for the benefit of Mr. Hasley.
(9) | Includes 7,995 exercisable stock options, 5,000 shares held in an IRA for the benefit of Mr. Rennie, 100 shares held by Mr. Rennie as custodian for two children and 2,000 shares held by Mr. Rennie as custodian for his grandchildren. |
(10) | Includes 6,011 shares held by Mr. Thomasmeyer’s spouse, 4,376 shares held in a trust for the benefit of Mr. Thomasmeyer’s spouse, 1,940 held in an IRA for the benefit of Mr. Thomasmeyer’s spouse, 3,037 shares held by Mr. Thomasmeyer as custodian for his child and 955 shares held by Mr. Thomasmeyer’s child. |
(11) | Includes 24,034 shares held in the 401(k) Plan for the benefit of Mr. Zimmerman, 8,324 shares held in the ESOP for the benefit of Mr. Zimmerman and 5,000 shares held in an SEP for the benefit of Mr. Zimmerman’s spouse. |
(12) Includes 26,550 shares held in an IRA for the benefit of Mr. Graft.
(13) | Includes 25,248 shares held in an IRA for the benefit of Mr. Mathews, and 7,971 shares held in an IRA for the benefit of Mr. Mathews’ spouse. |
(14) | Includes 2,393 shares held in an IRA for the benefit of Mr. Walker’s spouse and 2,286 shares held in an IRA for the benefit of Mr. Walker. |
(15) | Includes 4,606 shares held in the ESOP for the benefit of Ms. Parente and 2,539 shares held in the 401(k) Plan for the benefit of Ms. Parente. |
(16) Includes 573 shares held in the ESOP for the benefit of Mr. Kline.
(17) | Includes 1,083 shares held in an IRA for the benefit of Ms. DeLuca and 952 shares held in the ESOP for the benefit of Ms. DeLuca. |
(18) Includes 1,297 shares held in an IRA for the benefit of Mr. Chelli and 1,490 shares held in the ESOP for the benefit of Mr. Chelli.
(19) | Includes3,663 shares held in the ESOP for the benefit of Ms. Crystaloski and 11,091 shares held in the 401(k) Plan for the benefit of Ms. Crystaloski. |
Item 13. Certain Relationships and Related Transactions, and Director Independence
Director Independence
The Board has determined that, except directors Andrew W. Hasley, Timothy K. Zimmerman and transactionsDavid C. Mathews, each member of the Board is incorporated herein by reference froman “independent director” within the meaning of the NASDAQ corporate governance listing standards and the Company’s Proxy Statement, specificallycorporate governance policies. Messrs. Hasley and Zimmerman are not independent because they are employees of Standard and the section captioned “TransactionsBank. Mr. Mathews retired from full time employment with the Bank on February 27, 2019 and Mr. Mathews is not independent because of his prior employment with the Bank. There were no transactions that the Board of Directors needed to review that are not required to be reported that would bear in the determination of the independence of the directors.
Transactions with Certain Related Persons.”Persons
Loans and Extensions of Credit. The Sarbanes-Oxley Act of 2002 generally prohibits us from making loans to our executive officers and directors, but it contains a specific exemption from such prohibition for loans made by the Bank to our executive officers and directors in compliance with federal banking regulations. Federal regulations require that all loans or extensions of credit to executive officers and directors of insured institutions must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and must not involve more than the normal risk of repayment or present other unfavorable features. Standard Bank is therefore prohibited from making any loans or extensions of credit to executive officers and directors at different rates or terms than those offered to the general public, except for loans made to executive officers under a benefit program maintained by Standard Bank that is generally available to all other employees and that does not give preference to any executive officer over any other employee.
In addition, loans made to a director or executive officer must be approved in advance by a majority of the disinterested members of the Board of Directors. The aggregate amount of our total potential loan exposure to our officers and directors and their related entities was $1,661,946 at December 31, 2020. As of December 31, 2020, these loans were performing according to their original terms.
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Set forth below is certain information as to loans made by the Bank to certain of its directors and executive officers, or their affiliates, pursuant to the loan program disclosed above, whose aggregate indebtedness to the Bank exceeded $120,000 at any time since January 1, 2020. Unless otherwise indicated all of the loans are secured loans and all loans designated as residential loans are secured by the borrower’s principal place of residence.
Name of Individual | | | Loan Type | | | Date | | | Original | | | Highest Balance | | | Balance on | | | Interest | | |||||||||||||||
Gregory Saxon | | | Commercial Mortgage | | | | | 9/06/2007 | | | | | | 320,000 | | | | | | 140,625 | | | | | | 124,514 | | | | | | 7.00% | | |
Gregory Saxon | | | Commercial Mortgage | | | | | 8/23/2016 | | | | | | 309,120 | | | | | | 271,527 | | | | | | 259,379 | | | | | | 3.50% | | |
Gregory Saxon | | | Commercial Mortgage | | | | | 6/15/2007 | | | | | | 160,000 | | | | | | 25,999 | | | | | | — | | | | | | 3.85% | | |
Gregory Saxon | | | Flexline | | | | | 1/13/2005 | | | | | | 2,500 | | | | | | — | | | | | | — | | | | | | 11.00% | | |
Ronald Mock | | | Home Equity LOC | | | | | 6/30/2016 | | | | | | 100,000 | | | | | | 82,623 | | | | | | — | | | | | | 4.25% | | |
Ronald Mock | | | Home Equity | | | | | 6/30/2016 | | | | | | 69,026 | | | | | | 22,761 | | | | | | 8,485 | | | | | | 2.39% | | |
Pursuant to the Company’s Policy and Procedures for Approval of Related Person Transactions, the Audit Committee periodically reviews, no less frequently than twice a year, a summary of the Company’s transactions in excess of $25,000 with directors and executive officers of the Company and with firms that employ directors, as well as any other related person transactions, for the purpose of recommending to the disinterested members of the Board of Directors that the transactions are fair, reasonable and within Company policy and should be ratified and approved. For the 2019 fiscal year, the Company was not engaged in any transactions with related persons of a type or in such amount that was required to be disclosed pursuant to applicable Securities and Exchange Commission rules and regulations, except as described above.
Also, in accordance with banking regulations, the Board of Directors reviews all loans made to a director or executive officer in an amount that, when aggregated with the amount of all other loans to such person and their related interests, exceeds $500,000 and such loan must be approved in advance by a majority of the disinterested members of the Board of Directors. Additionally, pursuant to the Company’s Code of Ethics and Business Conduct, all executive officers and directors of the Company must disclose any existing or emerging conflicts of interest to the Company’s Chief Executive Officer. Such potential conflicts of interest include, but are not limited to, the following: (i) the Company conducting business with or competing against an organization in which a family member of an executive officer or director has an ownership or employment interest and (ii) the ownership of more than 1% of the outstanding securities or 5% of total assets of any business entity that does business with or is in competition with the Company.
Procedures Governing Related Persons Transactions
The Company maintains a Policy and Procedures Governing Related Person Transactions, which is a written set of procedures for the review and approval of transactions involving related persons. Under these procedures, related persons consist of directors, director nominees, executive officers, persons or entities known to us to be the beneficial owner of more than 5% of any outstanding class of the voting securities of the Company or immediate family members or certain affiliated entities of any of the foregoing persons.
Transactions covered by the procedures consist of any financial transaction, arrangement or relationship or series of similar transactions, arrangements or relationships, in which:
• | the aggregate amount involved will or may be expected to exceed $25,000 in any calendar year; |
• | the Company is, will, or may be expected to be a participant; and |
• | any related person has or will have a direct or indirect material interest. |
• | The procedures exclude certain transactions, including: |
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• | any compensation paid to an executive officer of the Company if the Compensation Committee of the Board approved (or recommended that the Board approve) such compensation; |
• | any compensation paid to a director of the Company if the Board or an authorized committee of the Board of Directors approved such compensation; and |
• | any transaction with a related person involving consumer and investor financial products and services proved in the ordinary course of the Company’s business and on substantially the same terms as those prevailing at the time for comparable services provided to persons unrelated to the Company, or to the Company’s employees on a broad basis (and, in the case of loans, in compliance with the Sarbanes-Oxley Act of 2002). |
Related person transactions will be reviewed by the Audit Committee. In connection with its review, the Audit Committee will consider all relevant factors, including:
• | whether the terms of the proposed transaction are at least as favorable to the Company as those that might be achieved with an unaffiliated third party; |
• | the size of the transaction and the amount of consideration payable to the related person; |
• | the nature of the interest of the related person; |
• | whether the transaction may involve a conflict of interest as defined in the Company’s Code of Ethics and Business Conduct; and |
• | whether the transaction involves the provision of goods and services to the Company that are available and from unaffiliated third parties. |
For each periodic review of related persons transactions, the Audit Committee will determine if the transactions were fair, reasonable, and within Company policy and will recommend to the disinterested members of the Board of Directors that they should be ratified and approved or make such other recommendation to the Board of Directors as the Audit Committee deems appropriate. If any transaction recommended for ratification and approval by the Audit Committee is not ratified and approved by the Board of Directors, the Secretary of the Audit Committee will provide a report to the Audit Committee setting forth information about the Board’s actions.
Item 14. Principal Accountant Fees and Services
Set forth below is certain information concerning principal accountantaggregate fees for professional services rendered by S.R. Snodgrass, P.C. (“Snodgrass”) during fiscal years 2020 and 2019.
Audit Fees. The aggregate fees billed to the Company by Snodgrass for professional services rendered for the audit of the Company’s annual consolidated financial statements, review of the consolidated financial statements included in the Company’s annual report on Form 10-K and services is incorporated hereinthat are normally provided by reference fromSnodgrass in connection with statutory and regulatory filings and engagements were $109,249 and $137,885 during fiscal 2020 and 2019, respectively.
Audit Related Fees. The aggregate fees billed to the Company by Snodgrass for assurance and related services rendered that are reasonably related to the performance of the audit of and review of the consolidated financial statements and that are not already reported in “Audit Fees” above, were $16,508 and $16,375 during fiscal 2020 and 2019, respectively. These services were primarily related to the audits of the Company’s Proxy Statement, specificallyemployee benefit plans.
Tax Fees. The aggregate fees billed to the section captioned “Proposal 2 — RatificationCompany by Snodgrass for professional services rendered for tax compliance were $14,950 and $14,710 during fiscal 2020 and 2019, respectively.
Other Fees. There were no aggregate fees billed to the Company by Snodgrass for other professional services rendered during fiscal 2020 and 2019, respectively.
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Policy on Audit Committee Pre-Approval of AppointmentAudit and Non-Audit Services of Independent Registered Public Accounting Firm.”Accountants
The Audit Committee’s policy is to pre-approve all audit and non-audit services provided by the independent registered public accountants. These services may include audit services, audit-related services, tax services and other services. Pre-approval is provided for up to one year, and any pre-approval is detailed as to the particular service or category of services and is subject to a specific budget. The Audit Committee has delegated pre-approval authority to its Chair when necessary, with subsequent reporting to the Audit Committee. The independent registered public accountants and management are required to report to the Audit Committee quarterly regarding the extent of services provided by the independent registered public accountants in accordance with this pre-approval policy, and the fees for the services performed to date.
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PART IV
(a)(3) Exhibits
iXBRL Taxonomy Label Linkbase | |||||
101.PRE | iXBRL Taxonomy Presentation Linkbase | ||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)* |
*Previously included with the Company’s Annual Report on Form 8-K10-K, as filed with the Securities and Exchange Commission on April 12, 2017.March 31, 2021.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the CompanyRegistrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Standard AVB Financial Corp. | ||||||||
Date: April 29, 2021 | By: | /s/ Andrew W. Hasley | ||||||
Andrew W. Hasley | ||||||||
President and | ||||||||
( | ||||||||
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