Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 15, 2018 | Jun. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | BANK OF SOUTH CAROLINA CORP | ||
Entity Central Index Key | 1,007,273 | ||
Document Type | 10-K | ||
Trading Symbol | BKSC | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 64,613,716 | ||
Entity Common Stock, Shares Outstanding | 4,990,879 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash and due from banks | $ 8,486,025 | $ 8,141,030 |
Interest-bearing deposits at the Federal Reserve Bank | 24,034,194 | 18,101,300 |
Investment securities available for sale (amortized cost of $140,606,807 and $120,942,615 in 2017 and 2016, respectively) | 139,250,250 | 119,978,944 |
Mortgage loans to be sold | 2,093,723 | 4,386,210 |
Loans | 270,180,640 | 260,576,115 |
Less: Allowance for loan losses | (3,875,398) | (3,851,617) |
Net loans | 266,305,242 | 256,724,498 |
Premises, equipment and leasehold improvements, net | 2,244,525 | 2,296,624 |
Other real estate owned | 435,479 | 521,943 |
Accrued interest receivable | 1,720,920 | 1,614,002 |
Other assets | 1,996,140 | 2,185,085 |
Total assets | 446,566,498 | 413,949,636 |
Deposits: | ||
Non-interest-bearing demand | 139,256,748 | 126,034,478 |
Interest-bearing demand | 108,967,196 | 96,260,589 |
Money market accounts | 77,833,728 | 77,307,662 |
Time deposits over $250,000 | 18,624,924 | 17,822,136 |
Other time deposits | 23,295,492 | 26,019,121 |
Other savings deposits | 34,910,212 | 29,078,865 |
Total deposits | 402,888,300 | 372,522,851 |
Accrued interest payable and other liabilities | 913,563 | 813,811 |
Total liabilities | 403,801,863 | 373,336,662 |
Commitments and contingencies Notes 6 and 11 | ||
Shareholders' equity | ||
Common stock-no par, 12,000,000 shares authorized; 5,230,675 and 5,197,535 shares issued at December 31, 2017 and 2016, respectively; 4,989,279 and 4,956,139 shares outstanding at December 31, 2017 and 2016, respectively | ||
Additional paid in capital | 37,236,566 | 36,824,022 |
Retained earnings | 8,471,780 | 6,643,476 |
Treasury stock: 241,396 shares at December 31, 2017 and 2016 | (2,247,415) | (2,247,415) |
Accumulated other comprehensive loss, net of income taxes | (696,296) | (607,109) |
Total shareholders' equity | 42,764,635 | 40,612,974 |
Total liabilities and shareholders' equity | $ 446,566,498 | $ 413,949,636 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Amorization cost for investment securities available for sale | $ 140,606,807 | $ 120,942,615 |
Common stock, authorized | 12,000,000 | 12,000,000 |
Common stock, issued | 5,230,675 | 5,197,535 |
Common stock, outstanding | 4,989,279 | 4,956,139 |
Treasury stock, shares | 241,396 | 241,396 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Interest and fee income | |||
Loans, including fees | $ 13,287,318 | $ 12,851,900 | $ 11,795,303 |
Taxable securities | 1,585,505 | 1,297,636 | 1,376,441 |
Tax-exempt securities | 1,026,513 | 1,007,438 | 1,012,638 |
Other | 269,811 | 138,623 | 45,566 |
Total interest and fee income | 16,169,147 | 15,295,597 | 14,229,948 |
Interest expense | |||
Deposits | 423,857 | 378,733 | 401,463 |
Short-term borrowings | 6 | 7 | 932 |
Total interest expense | 423,863 | 378,740 | 402,395 |
Net interest income | 15,745,284 | 14,916,857 | 13,827,553 |
Provision for loan losses | 55,000 | 570,000 | 192,500 |
Net interest income after provision for loan losses | 15,690,284 | 14,346,857 | 13,635,053 |
Other income | |||
Service charges and fees | 1,135,037 | 1,061,349 | 991,007 |
Mortgage banking income | 1,057,457 | 1,387,740 | 1,605,676 |
Gains on sales of securities | 45,820 | 380,904 | 423,832 |
Other non-interest income | 30,157 | 31,090 | 29,443 |
Total other income | 2,268,471 | 2,861,083 | 3,049,958 |
Other expense | |||
Salaries and employee benefits | 6,060,831 | 6,087,929 | 5,859,203 |
Net occupancy expense | 1,571,076 | 1,528,048 | 1,480,606 |
Other operating expenses | 2,517,737 | 2,639,776 | 2,168,382 |
Net other real estate owned expenses | 92,652 | 16,691 | 5,284 |
Total other expenses | 10,242,296 | 10,272,444 | 9,513,475 |
Income before income tax expense | 7,716,459 | 6,935,496 | 7,171,536 |
Income tax expense | 2,814,634 | 1,688,433 | 2,287,248 |
Net income | $ 4,901,825 | $ 5,247,063 | $ 4,884,288 |
Weighted average shares outstanding | |||
Basic (in shares) | 4,973,637 | 4,935,349 | 4,912,499 |
Diluted (in shares) | 5,058,352 | 5,054,114 | 5,067,085 |
Basic income per common share (in dollars per share) | $ 0.99 | $ 1.06 | $ 0.99 |
Diluted income per common share (in dollars per share) | $ 0.97 | $ 1.04 | $ 0.96 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 4,901,825 | $ 5,247,063 | $ 4,884,288 |
Other comprehensive loss: | |||
Unrealized (loss) gain on securities arising during the period | (347,066) | (2,158,236) | 26,255 |
Reclassification adjustment for securities gains realized in net income | (45,820) | (380,904) | (423,832) |
Other comprehensive loss, before tax | (392,886) | (2,539,140) | (397,577) |
Income tax effect related to items of other comprehensive loss | 116,007 | 939,482 | 147,104 |
Other comprehensive loss, after tax | (276,879) | (1,599,658) | (250,473) |
Total comprehensive income | $ 4,624,946 | $ 3,647,405 | $ 4,633,815 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | ADDITIONAL PAID IN CAPITAL [Member] | RETAINED EARNINGS [Member] | TREASURY STOCK [Member] | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [Member] | Total |
Beginning Balance at Dec. 31, 2014 | $ 28,779,108 | $ 8,640,291 | $ (1,902,439) | $ 1,243,022 | $ 36,759,982 |
Net income | 4,884,288 | 4,884,288 | |||
Other comprehensive income | (250,473) | (250,473) | |||
Exercise of stock options | 122,946 | 122,946 | |||
10% stock dividend | 7,360,703 | (7,020,505) | (344,976) | (4,778) | |
Stock-based compensation expense | 78,987 | 78,987 | |||
Cash dividends | (2,439,240) | (2,439,240) | |||
Ending balance at Dec. 31, 2015 | 36,341,744 | 4,064,834 | (2,247,415) | 992,549 | 39,151,712 |
Net income | 5,247,063 | 5,247,063 | |||
Other comprehensive income | (1,599,658) | (1,599,658) | |||
Exercise of stock options | 405,749 | 405,749 | |||
Stock-based compensation expense | 76,529 | 76,529 | |||
Cash dividends | (2,668,421) | (2,668,421) | |||
Ending balance at Dec. 31, 2016 | 36,824,022 | 6,643,476 | (2,247,415) | (607,109) | 40,612,974 |
Net income | 4,901,825 | 4,901,825 | |||
Other comprehensive income | (276,879) | (276,879) | |||
Exercise of stock options | 340,843 | 340,843 | |||
Stock-based compensation expense | 71,701 | 71,701 | |||
Reclassification of tax effects stranded in accumulated other comprehensive income by tax reform | (187,692) | 187,692 | |||
Cash dividends | (2,885,829) | (2,885,829) | |||
Ending balance at Dec. 31, 2017 | $ 37,236,566 | $ 8,471,780 | $ (2,247,415) | $ (696,296) | $ 42,764,635 |
CONSOLIDATED STATEMENTS OF SHA7
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Stockholders' Equity [Abstract] | |||
Common stock dividends, shares | 446,597 | ||
Treasury stock, shares | 21,945 | ||
Stock dividend per dollar amount | $ 15.72 | ||
Cash dividends | $ 0.58 | $ 0.54 | $ 0.52 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 4,901,825 | $ 5,247,063 | $ 4,884,288 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 193,298 | 189,188 | 196,827 |
Gain on sale of securities | (45,820) | (380,904) | (423,832) |
Loss on sale of other real estate | 1,477 | 13,450 | |
Valuation and other adjustments to other real estate owned | 86,464 | ||
Provision for loan losses | 55,000 | 570,000 | 192,500 |
Stock-based compensation expense | 71,701 | 76,529 | 78,987 |
Deferred income taxes | 276,362 | (750,254) | 4,748 |
Net amortization of unearned discounts on investment securities | 381,079 | 250,755 | 109,311 |
Origination of mortgage loans held for sale | (55,791,625) | (76,032,671) | (91,053,923) |
Proceeds from sale of mortgage loans held for sale | 58,084,112 | 77,466,700 | 92,558,765 |
(Increase) decrease in accrued interest receivable and other assets | (78,328) | (63,949) | 391,043 |
Increase (decrease) in accrued interest payable and other liabilities | 46,412 | (543,083) | 176,898 |
Net cash provided by operating activities | 8,181,957 | 6,042,824 | 7,115,612 |
Cash flows from investing activities: | |||
Proceeds from calls and maturities of investment securities available for sale | 4,713,870 | 9,630,804 | 2,315,000 |
Proceeds from sale of available for sale securities | 20,231,265 | 36,218,087 | 16,564,118 |
Purchase of investment securities available for sale | (44,944,586) | (48,239,241) | (25,389,485) |
Proceeds from sale of other real estate | 89,355 | 85,001 | |
Net increase in loans | (9,726,576) | (18,089,620) | (8,712,885) |
Purchase of premises, equipment and leasehold improvements, net | (141,199) | (196,584) | (133,632) |
Net cash used by investing activities | (29,777,871) | (20,591,553) | (15,356,884) |
Cash flows from financing activities: | |||
Net increase in deposit accounts | 30,365,449 | 13,804,239 | 36,299,585 |
Net decrease increase in short-term borrowings | (6,980,681) | ||
Dividends paid | (2,832,489) | (2,613,715) | (2,380,062) |
Stock options exercised | 340,843 | 405,749 | 122,946 |
Cash in lieu of fractional shares | (4,778) | ||
Net cash provided by financing activities | 27,873,803 | 11,596,273 | 27,057,010 |
Net increase (decrease) in cash and cash equivalents | 6,277,889 | (2,952,456) | 18,815,738 |
Cash and cash equivalents at beginning of year | 26,242,330 | 29,194,786 | 10,379,048 |
Cash and cash equivalents at end of year | 32,520,219 | 26,242,330 | 29,194,786 |
Cash paid during the year for: | |||
Interest | 379,302 | 400,531 | 419,004 |
Income taxes | 2,496,047 | 2,320,830 | 2,196,000 |
Supplemental disclosure for non-cash investing and financing activity: | |||
Change in unrealized gain (loss) on securities available for sale, net of income taxes | (276,879) | (1,599,658) | (250,473) |
Change in dividends payable | 53,340 | 54,706 | 59,178 |
Loans transferred to other real estate owned | 90,832 | $ 186,210 | |
Reclassification of tax effects stranded accumulated other comprehensive income due to tax reform | $ 187,692 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | 1. ORGANIZATION The Bank of South Carolina (the “Bank”) was organized on October 22, 1986 and opened for business as a state-chartered financial institution on February 26, 1987, in Charleston, South Carolina. The Bank was reorganized into a wholly-owned subsidiary of Bank of South Carolina Corporation (the “Company”), effective April 17, 1995. At the time of the reorganization, each outstanding share of the Bank was exchanged for two shares of Bank of South Carolina Corporation Stock. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Our accounting and reporting policies conform, in all material respects, to U.S. generally accepted accounting principles (“GAAP”), and to general practices within the banking industry. The following summarizes the more significant of these policies and practices. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, the Bank. In consolidation, all significant intercompany balances and transactions have been eliminated. References to “we,” “us,” “our,” “the Bank,” or “the Company” refer to the parent and its subsidiary that are consolidated for financial purposes. Accounting Estimates and Assumptions The preparation of the financial statements are in conformity with GAAP, which require management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ significantly from these estimates and assumptions. Material estimates generally susceptible to significant change are related to the determination of the allowance for loan losses, impaired loans, other real estate owned, deferred tax assets, the fair value of financial instruments and other-than-temporary impairment of investment securities. Reclassification: Certain amounts in the prior years’ financial statements have been reclassified to conform to the current year’s presentation. Such reclassifications have no effect on shareholders’ equity or the net income as previously reported. Subsequent Events: Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed as of the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Non recognized subsequent events are events that provide evidence about conditions that did not exist as of the date of the balance sheet but arose after that date. We have reviewed events occurring through the date the financial statements were available to be issued and no subsequent events occurred requiring accrual or disclosure. Cash and Cash Equivalents Cash and cash equivalents include working cash funds, due from banks, interest-bearing deposits at the Federal Reserve, items in process of collection and federal funds sold. All cash equivalents are readily convertible to cash and have maturities of less than 90 days. Depository institutions are required to maintain reserve and clearing balances at the Federal Reserve Bank. Vault cash satisfied our daily reserve requirement for the years ended December 31, 2017 and 2016, respectively. Interest-bearing Deposits at the Federal Reserve: Interest-bearing deposits at the Federal Reserve mature within one year and are carried at cost. Investment Securities We classify investments into three categories: (1) Held to Maturity - debt securities that we have the positive intent and ability to hold to maturity, which are reported at amortized cost, adjusted for the amortization of any related premiums or the accretion of any related discounts into interest income using a methodology which approximates a level yield of interest over the estimated remaining period until maturity; (2) Trading - debt and equity securities that are bought and held principally for the purpose of selling them in the near term, which are reported at fair value, with unrealized gains and losses included in earnings; and (3) Available for Sale - debt and equity securities that may be sold under certain conditions, which are reported at fair value, with unrealized gains and losses excluded from earnings and reported as a separate component of shareholders’ equity, net of income taxes. Unrealized losses on securities due to fluctuations in fair value are recognized when it is determined that an other than temporary decline in value has occurred. Realized gains or losses on the sale of investments are recognized on a specific identification, trade date basis. All securities were classified as available for sale for 2017 and 2016. Mortgage Loans to be Sold We originate fixed and variable rate residential mortgage loans on a service release basis in the secondary market. Loans closed but not yet settled with an investor are carried in our loans held for sale portfolio. Virtually all of these loans have commitments to be purchased by investors and the majority of these loans were locked in by price with the investors on the same day or shortly thereafter that the loan was locked in with our customers. Therefore, these loans present very little market risk. We usually deliver to, and receive funding from, the investor within 30 to 60 days. Commitments to sell these loans to the investor are considered derivative contracts and are sold to investors on a “best efforts” basis. We are not obligated to deliver a loan or pay a penalty if a loan is not delivered to the investor. Because of the short-term nature of these derivative contracts, the fair value of the mortgage loans held for sale in most cases is materially the same as the value of the loan amount at its origination . Mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated market value in the aggregate. Net unrealized losses are provided for in a valuation allowance by charges to operations as a component of mortgage banking income. Gains or losses on sales of loans are recognized when control over these assets are surrendered and are included in mortgage banking income in the consolidated statements of income. Loans and Allowance for Loan Losses Loans are carried at principal amounts outstanding. Loan origination fees, net of certain direct origination costs, are deferred and recognized over the weighted average life of the loan as an adjustment to yield. Interest income on all loans is recorded on an accrual basis. The accrual of interest and the amortization of net loan fees are generally discontinued on loans that 1) are maintained on a cash basis because of deterioration in the financial condition of the borrower; 2) the payment of full principal is not expected; or 3) the principal or interest has been in default for a period of 90 days or more. We define past due loans based on contractual payment and maturity dates. The accrual of interest is generally discontinued on loans that become 90 days past due as to principal or interest. The accrual of interest on some loans may continue even though they are 90 days past due if the loans are well secured or in the process of collection and management deems it appropriate. If non-accrual loans decrease their past due status to less than 30 days for a period of six to nine months, they are reviewed individually by management to determine if they should be returned to accrual status. When the ultimate collectability of an impaired loan’s principal is in doubt, wholly or partially, all cash receipts are applied to principal. Once the recorded principal balance has been reduced to zero, future cash receipts are applied to interest income, to the extent that any interest has been foregone. Further cash receipts are recorded as recoveries of any amounts previously charged off. When this doubt does not exist, cash receipts are applied under the contractual terms of the loan agreement first to interest income and then to principal. We account for impaired loans by requiring that all loans (greater than $50,000) where it is estimated that we will be unable to collect all amounts due according to the terms of the loan agreement be recorded at the loan’s fair value. Fair value may be determined based upon the present value of expected future cash flows discounted at the loan’s effective interest rate, or the fair value of the collateral less cost to sell, if the loan is collateral dependent. Additional accounting guidance allows us to use existing methods for recognizing interest income on an impaired loan. The guidance also requires additional disclosures about how we estimate interest income related to our impaired loans. A loan is also considered impaired if its terms are modified in a troubled debt restructuring (“TDR”). For this type of impaired loan, cash receipts are typically applied to principal and interest receivable in accordance with the terms of the restructured loan agreement. Interest income is recognized on these loans using the accrual method of accounting, provided they are performing in accordance with their restructured terms. The allowance for loan losses (the “allowance”) is our estimate of credit losses inherent in the loan portfolio. The allowance is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when we believe the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance is evaluated on a regular basis and is based upon our periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. We believe that the allowance is adequate to absorb inherent losses in the loan portfolio; however, there can be no assurance that loan losses in future periods will not exceed the current allowance amount or that future increases in the allowance will not be required. No assurance can be given that our ongoing evaluation of the loan portfolio, in light of changing economic conditions and other relevant circumstances, will not require significant future additions to the allowance, thus adversely affecting our operating results. The allowance is also subject to examination by regulatory agencies, which may consider such factors as the methodology used to determine adequacy and the size of the allowance relative to that of peer institutions and other adequacy tests. In addition, such regulatory agencies could require us to adjust our allowance based on information available at the time of the examination. The methodology used to determine the reserve for unfunded lending commitments, which is included in other liabilities, is inherently similar to the methodology used to determine the allowance adjusted for factors specific to binding commitments, including the probability of funding and historical loss ratio. Concentration of Credit Risk Our primary market consists of the counties of Berkeley, Charleston and Dorchester, South Carolina. As of December 31, 2017, the majority of the total loan portfolio, as well as a substantial portion of the commercial and real estate loan portfolios, were to borrowers within this region. No other areas of significant concentration of credit risk have been identified. Premises, Equipment and Leasehold Improvements and Depreciation Land is carried at cost. Buildings and equipment are stated at cost less accumulated depreciation. Depreciation is recorded using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes over the estimated useful lives of the assets ranging from 40 years for buildings and 3 to 15 years for equipment. Leasehold improvements are amortized over the shorter of the asset’s useful life or the remaining lease term, including renewal periods when reasonably assured. The cost of maintenance and repairs is charged to operating expense as incurred. Other Real Estate Owned Fair value is based upon independent market prices, appraised values of the collateral, or our estimation of the value of the collateral. Losses arising from an initial foreclosure are charged against the allowance for loan losses. Subsequent to foreclosure, other real estate owned (“OREO”) is recorded at the lower of cost or fair value, adjusted for net selling costs. Gains and losses on the sale of OREO and subsequent write-downs from periodic re-evaluation are charged to net other real estate owned expenses. Income Taxes We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Net deferred tax assets are included in other assets in the consolidated balance sheet. Accounting standards require the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. These standards also prescribe a recognition threshold and measurement of a tax position taken or expected to be taken in an enterprise’s tax return. We believe that we had no uncertain tax positions for the years ended December 31, 2017 and 2016. Stock-Based Compensation Compensation cost is recognized for stock options issued to employees, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options. Compensation cost is recognized over the required service period, generally defined as the vesting period (10 years). Income Per Common Share B asic income per share is computed by dividing net income by the weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares and potential common shares outstanding. Potential common shares consist of dilutive stock options determined using the treasury stock method and the average market price of common stock. Earnings per share are restated for all stock splits and stock dividends through the date of issuance of the financial statements. Segment Information The Company operates and manages itself within one retail banking segment and has, therefore, not provided segment disclosures. Interest Rate Lock Commitments and Forward Sale Contracts Commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans are accounted for as free-standing derivatives. The fair value of the interest rate lock is recorded at the time the commitment to fund the mortgage loan is executed and is adjusted for the expected exercise of the commitments before the loan is funded. In order to hedge the change in interest rates resulting from commitments to fund the loans, we enter into forward commitments for the future delivery of mortgage loans when the interest rate is locked. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest on the loan is locked. Changes in the fair values of these derivatives are included in income when they occur. As a result of the short-term nature of mortgage loans held for sale (derivative contract), our derivative instruments were considered to be immaterial as of December 31, 2017 and 2016. We had no embedded derivative instruments requiring hedge accounting treatment at December 31, 2017. We do not currently engage in hedging activities. Recent Accounting Pronouncements: The following is a summary of recent authoritative pronouncements that could impact the accounting, reporting and/or disclosure of financial information by the Company. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, Topic 606. In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10); Recognition and Measurement of Financial Instruments and Financial Liabilities. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), . In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share – Based Payment Accounting, In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow- Scope Improvements and Practical Expedients In June 2016, the FASB issued ASU 2016-13, Financial instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, In December 2016, the FASB issued ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business In February 2017, the FASB issued ASU 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets Revenue from Contracts with Customers In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization of Purchased Callable Debt Securities, In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on our financial position, results of operations or cash flows. |
INVESTMENT SECURITIES AVAILABLE
INVESTMENT SECURITIES AVAILABLE FOR SALE | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES AVAILABLE FOR SALE | 3. INVESTMENT SECURITIES AVAILABLE FOR SALE The amortized cost and fair value of investment securities available for sale are summarized as follows: DECEMBER 31, 2017 AMORTIZED GROSS GROSS ESTIMATED U.S. Treasury Notes $ 35,970,990 $ — $ (411,145 ) $ 35,559,845 Government-Sponsored Enterprises 64,444,315 — (887,811 ) 63,556,504 Municipal Securities 40,191,502 487,545 (545,146 ) 40,133,901 Total $ 140,606,807 $ 487,545 $ (1,844,102 ) $ 139,250,250 DECEMBER 31, 2016 AMORTIZED GROSS GROSS ESTIMATED U.S. Treasury Notes $ 24,148,295 $ 41,153 $ (250,385 ) $ 23,939,063 Government-Sponsored Enterprises 51,737,930 129,482 (833,321 ) 51,034,091 Municipal Securities 45,056,390 765,813 (816,413 ) 45,005,790 Total $ 120,942,615 $ 936,448 $ (1,900,119 ) $ 119,978,944 The amortized cost and estimated fair value of investment securities available for sale at December 31, 2017 and December 31, 2016, by contractual maturity are as follows: DECEMBER 31, 2017 DECEMBER 31, 2016 AMORTIZED ESTIMATED AMORTIZED ESTIMATED Due in one year or less $ 11,554,040 $ 11,546,968 $ 3,343,347 $ 3,350,205 Due in one year to five years 72,622,056 72,124,395 82,848,411 82,682,901 Due in five years to ten years 53,290,088 52,576,036 29,662,030 29,169,228 Due in ten years and over 3,140,623 3,002,851 5,088,827 4,776,610 Total $ 140,606,807 $ 139,250,250 $ 120,942,615 $ 119,978,944 Securities pledged to secure deposits and repurchase agreements at December 31, 2017 and 2016, had a carrying amount of $49,424,692 and $47,619,232, respectively. The tables below summarize gross unrealized losses on investment securities and the fair market value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2017 and 2016. We believe that all unrealized losses have resulted from temporary changes in the interest rate market and not as a result of credit deterioration. We do not intend to sell and it is not likely that we will be required to sell any of the securities referenced in the table below before recovery of their amortized cost. Less Than 12 Months 12 Months or Longer Total Gross Gross Gross Unrealized Unrealized Unrealized # Fair Value Loss # Fair Value Loss # Fair Value Loss December 31, 2017 Available for sale U.S. Treasury Notes 8 $ 35,559,845 $ (411,145 ) — $ — $ — 8 $ 35,559,845 $ (411,145 ) Government- Sponsored Enterprises 12 53,275,064 (462,174 ) 3 10,281,440 (425,637 ) 15 63,556,504 (887,811 ) Municipal Securities 20 7,815,221 (134,998 ) 29 11,056,185 (410,148 ) 49 18,871,406 (545,146 ) Total 40 $ 96,650,130 $ (1,008,317 ) 32 $ 21,337,625 $ (835,785 ) 72 $ 117,987,755 $ (1,844,102 ) December 31, 2016 Available for sale U.S. Treasury notes 4 $ 17,968,594 $ (250,385 ) — $ — $ — 4 $ 17,958,594 $ (250,385 ) Government-Sponsored Enterprises 8 30,136,720 (833,321 ) — — — 8 30,136,720 (833,321 ) Municipal Securities 54 22,606,430 (816,413 ) — — — 54 22,606,430 (816,413 ) Total 66 $ 70,711,744 $ (1,900,119 ) — $ — $ — 66 $ 70,711,744 $ (1,900,119 ) The table below shows the proceeds received from sales of securities available for sale and gross realized gains and losses. For the Year Ended December 31, 2017 2016 2015 Gross proceeds $ 20,231,265 $ 36,218,087 $ 16,564,118 Gross realized gains 154,692 384,963 423,832 Gross realized losses (108,872 ) (4,059 ) — The tax provision related to these gains was $15,578 and $140,934 for the year ended December 31, 2017 and 2016, respectively. |
LOANS AND ALLOWANCE FOR LOAN LO
LOANS AND ALLOWANCE FOR LOAN LOSSES | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
LOANS AND ALLOWANCE FOR LOAN LOSSSES | 4. LOANS AND ALLOWANCE FOR LOAN LOSSSES Major classifications of loans (net of deferred loan fees of $152,047 at December 31, 2017, and $136,446 at December 31, 2016) are as follows: December 31, 2017 2016 Commercial loans $ 51,723,237 $ 52,262,209 Commercial real estate: Construction 2,317,857 1,208,901 Other 140,186,324 122,968,126 Consumer: Real Estate 70,797,973 77,131,816 Other 5,155,249 7,005,063 Total loans 270,180,640 260,576,115 Allowance for loan losses (3,875,398 ) (3,851,617 ) Total loans, net $ 266,305,242 $ 256,724,498 We had $113.4 million and $101.2 million of loans pledged as collateral to secure funding with the Federal Reserve Bank (“FRB”) Discount Window at December 31, 2017 and 2016, respectively. Our portfolio grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled. Our internal credit risk grading system is based on experience with similarly graded loans, industry best practices, and regulatory guidance. Our portfolio is graded in its entirety. Our internally assigned grades pursuant to the Board-approved lending policy are as follows: ● Excellent ● Good ● Satisfactory ● Watch ● OAEM ● Substandard ● Doubtful ● Loss The following tables illustrate credit risks by category and internally assigned grades at December 31, 2017 and December 31, 2016. “Pass” includes loans internally graded as excellent, good and satisfactory. December 31, 2017 Commercial Commercial Commercial Consumer Consumer Other Total Pass $ 47,456,205 $ 1,936,335 $ 134,401,977 $ 68,570,298 $ 4,933,696 $ 257,298,511 Watch 2,403,978 381,522 3,605,621 1,934,802 185,746 8,511,669 OAEM — — 610,806 — — 610,806 Sub-Standard 1,863,054 — 1,567,920 292,873 35,807 3,759,654 Doubtful — — — — — — Loss — — — — — — Total $ 51,723,237 $ 2,317,857 $ 140,186,324 $ 70,797,973 $ 5,155,249 $ 270,180,640 December 31, 2016 Commercial Commercial Commercial Consumer Consumer Other Total Pass $ 48,289,944 $ 798,884 $ 116,490,396 $ 74,115,426 $ 6,728,367 $ 246,423,017 Watch 1,004,957 410,017 2,625,079 899,306 147,992 5,087,351 OAEM 1,666,048 — 995,549 630,957 28,939 3,321,493 Sub-Standard 1,301,260 — 2,857,102 1,486,127 99,765 5,744,254 Doubtful — — — — — — Loss — — — — — — Total $ 52,262,209 $ 1,208,901 $ 122,968,126 $ 77,131,816 $ 7,005,063 $ 260,576,115 The following tables include an aging analysis of the recorded investment of past-due financing receivable by class. December 31, 2017 30-59 60-89 Greater Total Current Total Loans Recorded Commercial $ 3,531 $ 192,846 $ — $ 196,377 $ 51,526,860 $ 51,723,237 $ — Commercial Real Estate Construction — — — — 2,317,857 2,317,857 — Commercial Real Estate Other — — 651,578 651,578 139,534,746 140,186,324 — Consumer Real Estate — — — — 70,797,973 70,797,973 — Consumer Other 10,302 — 34,107 44,409 5,110,840 5,155,249 34,107 Total $ 13,833 $ 192,846 $ 685,685 $ 892,364 $ 269,288,276 $ 270,180,640 $ 34,107 December 31, 2016 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Total Past Due Current Total Loans Receivable Recorded Investment ≥ 90 Days and Accruing Commercial $ 438,159 $ — $ — $ 438,159 $ 51,824,050 $ 52,262,209 $ — Commercial Real Estate Construction — — — — 1,208,901 1,208,901 — Commercial Real Estate Other 6,363 — 1,501,153 1,507,516 121,460,610 122,968,126 89,908 Consumer Real Estate 415,457 — — 415,457 76,716,359 77,131,816 — Consumer Other 56,784 — 33,322 90,106 6,914,957 7,005,063 33,322 Total $ 916,763 $ — $ 1,534,475 $ 2,451,238 $ 258,124,877 $ 260,576,115 $ 123,230 There were two loans 90 days or more past due and still accruing interest at December 31, 2017. There were two loans 90 days or more past due and still accruing interest at December 31, 2016. The following table summarizes the balances of non-accrual loans: Loans Receivable on Non-Accrual December 31, 2017 December 31, 2016 Commercial $ 41,651 $ 61,781 Commercial Real Estate Construction — — Commercial Real Estate Other 790,208 1,678,876 Consumer Real Estate — — Consumer Other — 964 Total $ 831,859 $ 1,741,621 The following tables set forth the changes in the allowance and an allocation of the allowance by loan category at December 31, 2017, December 31, 2016 and December 31, 2015. The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired. The general component covers non-impaired loans and is based on historical loss experience adjusted for current economic factors. December 31, 2017 Commercial Commercial Real Estate Construction Commercial Real Estate Other Consumer Real Estate Consumer Other Total Allowance for Loan Losses Beginning Balance $ 1,545,188 $ 51,469 $ 1,374,706 $ 726,391 $ 153,863 $ 3,851,617 Charge-offs — — (180,587 ) — (4,862 ) (185,449 ) Recoveries 6,000 — 87,030 60,000 1,200 154,230 Provisions (147,600 ) (27,831 ) 268,606 10,527 (48,702 ) 55,000 Ending Balance $ 1,403,588 $ 23,638 $ 1,549,755 $ 796,918 $ 101,499 $ 3,875,398 December 31, 2016 Commercial Commercial Real Estate Construction Commercial Real Estate Other Consumer Real Estate Consumer Other Total Allowance for Loan Losses Beginning Balance $ 896,854 $ 59,861 $ 1,345,094 $ 941,470 $ 174,548 $ 3,417,827 Charge-offs (33,046 ) — (78,300 ) (82,015 ) (14,934 ) (208,295 ) Recoveries — — 65,000 — 7,085 72,085 Provisions 681,380 (8,392 ) 42,912 (133,064 ) (12,836 ) 570,000 Ending Balance $ 1,545,188 $ 51,469 $ 1,374,706 $ 726,391 $ 153,863 $ 3,851,617 December 31, 2015 Commercial Commercial Real Estate Construction Commercial Real Estate Other Consumer Real Estate Consumer Other Total Allowance for Loan Losses Beginning Balance $ 1,211,130 $ 42,904 $ 1,112,387 $ 863,351 $ 105,076 $ 3,334,848 Charge-offs (99,737 ) — (55,252 ) (6,075 ) (40,007 ) (201,071 ) Recoveries 9,164 — 53,753 6,075 22,558 91,550 Provisions (223,703 ) 16,957 234,206 78,119 86,921 192,500 Ending Balance $ 896,854 $ 59,861 $ 1,345,094 $ 941,470 $ 174,548 $ 3,417,827 The following tables present, by portfolio segment and reserving methodology, the allocation of the allowance for loan losses and the gross investment in loans. December 31, 2017 Commercial Commercial Commercial Real Estate Consumer Consumer Other Total Allowance for Loan Losses Individually evaluated for impairment $ 832,571 $ — $ 99,523 $ 43,042 $ 34,107 $ 1,009,243 Collectively evaluated for impairment 571,017 23,638 1,450,232 753,876 67,392 2,866,155 Total Allowance for Losses $ 1,403,588 $ 23,638 $ 1,549,755 $ 796,918 $ 101,499 $ 3,875,398 Loans Receivable Individually evaluated for impairment $ 1,812,461 $ — $ 1,584,821 $ 292,873 $ 34,107 $ 3,724,262 Collectively evaluated for impairment 49,910,776 2,317,857 138,601,503 70,505,100 5,121,142 266,456,378 Total Loans Receivable $ 51,723,237 $ 2,317,857 $ 140,186,324 $ 70,797,973 $ 5,155,249 $ 270,180,640 December 31, 2016 Commercial Commercial Commercial Real Estate Consumer Consumer Other Total Allowance for Loan Losses Individually evaluated for impairment $ 1,051,219 $ — $ 324,587 $ 43,119 $ 89,047 $ 1,507,972 Collectively evaluated for impairment 493,969 51,469 1,050,119 683,272 64,816 2,343,645 Total Allowance for Losses $ 1,545,188 $ 51,469 $ 1,374,706 $ 726,391 $ 153,863 $ 3,851,617 Loans Receivable Individually evaluated for impairment $ 1,301,259 $ — $ 3,225,351 $ 1,286,127 $ 89,047 $ 5,901,784 Collectively evaluated for impairment 50,960,950 1,208,901 119,742,775 75,845,689 6,916,016 254,674,331 Total Loans Receivable $ 52,262,209 $ 1,208,901 $ 122,968,126 $ 77,131,816 $ 7,005,063 $ 260,576,115 As of December 31, 2017 and 2016, loans individually evaluated and considered impaired are presented in the following table. Impaired and Restructured Loans As of the year ended December 31, 2017 2016 Unpaid Recorded Related Unpaid Recorded Related With no related allowance recorded: Commercial $ 152,490 $ 152,490 $ — $ 250,040 $ 250,040 $ — Commercial Real Estate Construction — — — — — — Commercial Real Estate Other 1,058,601 1,058,601 — 2,174,770 2,174,770 — Consumer Real Estate 249,754 249,754 — 1,243,008 1,243,008 — Consumer Other — — — — — — $ 1,460,845 $ 1,460,845 $ — $ 3,667,818 $ 3,667,818 $ — With an allowance recorded: Commercial $ 1,659,971 $ 1,659,971 $ 832,571 $ 1,051,219 $ 1,051,219 $ 1,051,219 Commercial Real Estate Construction — — — — — — Commercial Real Estate Other 626,021 526,220 99,523 1,050,581 1,050,581 324,587 Consumer Real Estate 43,119 43,119 43,042 43,119 43,119 43,119 Consumer Other 34,107 34,107 34,107 89,047 89,047 89,047 $ 2,363,218 $ 2,263,417 $ 1,009,243 $ 2,233,966 $ 2,233,966 $ 1,507,972 Total Commercial $ 1,812,461 $ 1,812,461 $ 832,571 $ 1,301,259 $ 1,301,259 $ 1,051,219 Commercial Real Estate Construction — — — — — — Commercial Real Estate Other 1,684,622 1,584,821 99,523 3,225,351 3,225,351 324,587 Consumer Real Estate 292,873 292,873 43,042 1,286,127 1,286,127 43,119 Consumer Other 34,107 34,107 34,107 89,047 89,047 89,047 $ 3,824,063 $ 3,724,262 $ 1,009,243 $ 5,901,784 $ 5,901,784 $ 1,507,972 The following table presents average impaired loans and interest income recognized on those impaired loans, by class segment, for the periods indicated. For the year ended December 31, 2017 2016 2015 Average Interest Average Interest Average Interest With no related allowance recorded: Commercial $ 169,594 $ 9,700 $ 267,747 $ 12,282 $ 750,350 $ 43,853 Commercial Real Estate Construction — — — — — — Commercial Real Estate Other 1,062,516 43,755 2,267,288 81,582 2,500,204 128,352 Consumer Real Estate 249,754 12,649 1,242,515 22,111 450,117 17,035 Consumer Other — — — — 56,758 2,557 $ 1,481,864 $ 66,104 $ 3,777,550 $ 115,975 $ 3,757,429 $ 191,797 With an allowance recorded: Commercial $ 1,736,896 $ 103,758 $ 1,087,559 $ 49,985 $ 1,009,765 $ 49,166 Commercial Real Estate Construction — — — — — — Commercial Real Estate Other 627,070 8,148 1,047,685 16,138 1,066,896 48,945 Consumer Real Estate 41,938 1,752 43,155 1,514 811,014 32,362 Consumer Other 35,591 1,869 94,945 5,533 55,439 3,540 Total $ 2,441,495 $ 115,527 $ 2,273,344 $ 73,170 $ 2,943,114 $ 134,013 Commercial $ 1,906,490 $ 113,458 $ 1,355,306 $ 62,267 $ 1,760,115 $ 93,019 Commercial Real Estate Construction — — — — — — Commercial Real Estate Other 1,689,586 51,903 3,314,973 97,720 3,567,100 177,297 Consumer Real Estate 291,692 14,401 1,285,670 23,625 1,261,131 49,397 Consumer Other 35,591 1,869 94,945 5,533 112,197 6,097 $ 3,923,359 $ 181,631 $ 6,050,894 $ 189,145 $ 6,700,543 $ 325,810 In general, the modification or restructuring of a debt is considered a troubled debt restructuring (“TDR”) if we, for economic or legal reasons related to a borrower’s financial difficulties, grant a concession to the borrower that we would not otherwise consider. As of December 31, 2017, there was one TDR with a balance of $33,300, compared to two TDRs with a total balance of $378,392 as of December 31, 2016, and three TDRs with a total balance of $458,268 as of December 31, 2015. These TDRs were granted extended payment terms with no principal reduction. All TDRs were performing as agreed as of December 31, 2017 and 2016, respectively. No TDRs that were modified within the previous twelve months defaulted during the years ended December 31, 2017 and 2016. |
CONCENTRATIONS OF CREDIT RISK
CONCENTRATIONS OF CREDIT RISK | 12 Months Ended |
Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS OF CREDIT RISK | 5. CONCENTRATIONS OF CREDIT RISK We grant short to intermediate term commercial and consumer loans to customers throughout our primary market area of Charleston, Berkeley and Dorchester counties of South Carolina. Our primary market area is heavily dependent on tourism and medical and legal services. Although we have a diversified loan portfolio, a substantial portion of our debtors’ ability to honor their contracts is dependent upon the stability of the economic environment in their primary market. The majority of the loan portfolio is located in our immediate market area with a concentration in real estate related activities and offices, medical offices, and attorneys’ offices. Our loans were concentrated in the following categories. December 31, 2017 December 31, 2016 Commercial 19.14 % 20.06 % Commercial Real Estate Construction 0.86 % 0.46 % Commercial Real Estate Other 51.89 % 47.20 % Consumer Real Estate 26.20 % 29.59 % Consumer Other 1.91 % 2.69 % Total Loans 100.00 % 100.00 % |
PREMISES, EQUIPMENT AND LEASEHO
PREMISES, EQUIPMENT AND LEASEHOLD IMPROVEMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
PREMISES, EQUIPMENT AND LEASEHOLD IMPROVEMENTS | 6. Premises, Equipment and Leasehold Improvements Premises, equipment and leasehold improvements are summarized in the table below. December 31, 2017 2016 Bank buildings $ 1,824,613 $ 1,824,613 Land 838,075 838,075 Leasehold purchase 30,000 30,000 Lease improvements 690,212 690,212 Construction in process 11,754 11,754 Equipment 3,405,686 3,264,488 6,800,340 6,659,142 Accumulated depreciation (4,555,815 ) (4,362,518 ) Total $ 2,244,525 $ 2,296,624 Depreciation and amortization on our bank premises and equipment charged to operating expense totaled $193,298 in 2017, $189,188 in 2016, and $196,827 in 2015. We entered into agreements to lease parking and office facilities under non-cancellable operating lease agreements expiring on various dates through 2039. We may, at our option, extend the lease of our Summerville office at 100 North Main Street for two additional ten-year periods; and extend the land lease where our Mt. Pleasant office is located for five additional five-year periods. We rent office space at 1071 Morrison Drive, Charleston, South Carolina, from a related party, to house our Mortgage Department. Rent expense for this lease was $54,720, $51,690, and $50,184 for the years ended December 31, 2017, 2016, and 2015, respectively. This lease expires June 30, 2019. We own the land and improvements at our West Ashley office located at 2027 Sam Rittenberg Boulevard, Charleston, South Carolina. Management intends to exercise its option on the lease agreements. Lease payments below include the lease renewals. Minimum rental commitments for these leases as of December 31, 2017 are presented in the table below. 2018 $ 580,028 2019 594,713 2020 547,650 2021 552,922 2022 and thereafter 11,136,228 Total $ 13,411,541 Total rental expense was $612,717, $594,567, and $591,058 in 2017, 2016 and 2015, respectively. On January 28, 2014, we signed a lease to open a banking office located on Highway 78, North Charleston, South Carolina (copy of the lease incorporated as Exhibit 10.8 in the 2013 10-K and copy of the Assignment and Assumption of Lease incorporated as Exhibit 10.9, First Amendment to the Lease incorporated as Exhibit 10.10 and Second Amendment to the Lease incorporated as Exhibit 10.11 in the 2015 10-K). The original lease agreement was terminated but a new lease agreement was executed on July 31, 2017 for the same location (copy of lease incorporated as Exhibit 10.13 in the June 30, 2017 10Q). The building is expected to be completed in the future. Rental payments do not commence until we take control of our space. |
OTHER REAL ESTATE OWNED
OTHER REAL ESTATE OWNED | 12 Months Ended |
Dec. 31, 2017 | |
Real Estate Owned, Disclosure of Detailed Components [Abstract] | |
OTHER REAL ESTATE OWNED | 7. OTHER REAL ESTATE OWNED The following table summarizes the activity in other real estate owned at December 31, 2017 and December 31, 2016. December 31, 2017 December 31, 2016 Balance, beginning of year $ 521,943 $ 620,394 Additions-foreclosure 90,832 — Sales (90,832 ) (98,451 ) Write-downs (86,464 ) — Balance, end of year $ 435,479 $ 521,943 As of December 31, 2017, we had one property with a balance of $435,479 classified as OREO. Another property valued at $90,832 classified as OREO during 2017 was ultimately sold at a loss of $1,477. We had one property valued at $521,943 classified as OREO as of December 31, 2016. Another property valued at $98,451 classified as OREO during 2015 was ultimately sold at a loss of $13,450 during 2016. |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2017 | |
Deposits: | |
DEPOSITS | 8. DEPOSITS At December 31, 2017 and 2016, certificates of deposit of $250,000 or more totaled approximately $18,624,924 and $17,822,136, respectively. At December 31, 2017, the scheduled maturities of certificates of deposit are presented in the table below. 2018 $ 34,585,073 2019 5,891,415 2020 398,505 2021 577,407 2022 and thereafter 468,016 $ 41,920,416 At December 31, 2017, deposits with a deficit balance of $66,479 were re-classified as other loans, compared to $24,963 at December 31, 2016. |
SHORT-TERM BORROWINGS
SHORT-TERM BORROWINGS | 12 Months Ended |
Dec. 31, 2017 | |
Short-term Debt [Abstract] | |
SHORT-TERM BORROWINGS | 9. Short-Term Borrowings Securities sold under agreements to repurchase with customers mature on demand. At December 31, 2017 and 2016, there were no securities sold under agreements to repurchase. There was no amount outstanding at any month-end during 2017 and 2016. At December 31, 2017 and 2016, we had no outstanding federal funds purchased. We have a Borrower-In-Custody arrangement with the Federal Reserve. This arrangement permits the Company to retain possession of loans pledged as collateral to secure advances from the Federal Reserve Discount Window. Under this agreement, we may borrow up to $88.2 million. We established this arrangement as an additional source of liquidity. There have been no borrowings under this arrangement. At December 31, 2017 and 2016, the Bank had unused short-term lines of credit totaling approximately $23.0 million and $21.0 million, respectively (which are withdrawable at the lender’s option). |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 10. Income Taxes On December 22, 2017, the President of the United States signed into law the 2017 Tax Act. The 2017 Tax Act includes a number of changes to the existing U.S. tax laws that impact the Company, most notably a reduction in the U.S. corporate income tax rate from 34 percent to 21 percent for tax years beginning after December 31, 2017. The Company recognized the income tax effects of the 2017 Tax Act in its 2017 consolidated financial statements in accordance with Staff Accounting Bulletin No. 118, which provides SEC staff guidance for the application of ASC Topic 740, Income Taxes, Total income taxes for the years ended December 31, 2017, 2016 and 2015 are presented in the table below. For the year ended December 31, 2017 2016 2015 Income tax expense $ 2,814,634 $ 1,688,433 $ 2,287,248 Unrealized gains (losses) on securities available for sale presented in accumulated other comprehensive income (loss) (116,007 ) (939,482 ) (147,104 ) Total $ 2,698,627 $ 748,951 $ 2,140,144 Income tax expense was as follows: For the year ended December 31, 2017 2016 2015 Current income taxes Federal $ 2,538,272 $ 2,438,687 $ 2,102,154 State — — 224,083 Total current tax expense 2,538,272 2,438,687 2,326,237 Deferred income tax (benefit) expense 276,362 (750,254 ) (38,989 ) Total income tax expense $ 2,814,634 $ 1,688,433 $ 2,287,248 The differences between actual income tax expense and the amounts computed by applying the U.S. federal income tax rate of 34% to pretax income from continuing operations for the periods indicated are reconciled in the table below. For the year ended December 31, 2017 2016 2015 Computed “expected” tax expense $ 2,623,595 $ 2,358,069 $ 2,438,322 Increase (reduction) in income taxes resulting from: Tax rate change impact 666,674 — — Amortization of credit and gain 163,411 163,411 — Stock based compensation 24,378 26,012 26,856 Valuation allowance 16,952 4,314 11,093 Other (4,768 ) (203,854 ) 5,052 State income tax, net of federal benefit (329,412 ) (319,525 ) 147,895 Tax exempt interest income (346,196 ) (339,994 ) (341,970 ) $ 2,814,634 $ 1,688,433 $ 2,287,248 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2017 and 2016 are presented below. December 31, 2017 2016 Deferred tax assets: Allowance for loan losses $ 782,714 $ 1,248,551 State credit carryforward 488,052 236,536 Unrealized loss on securities available for sale 284,877 356,562 Passthrough income 70,603 — State net operating loss carryforward 67,253 50,301 Nonaccrual interest 19,209 — OREO 18,157 — Other 5,214 45,661 Total gross deferred tax assets 1,736,079 1,937,611 Valuation allowance (67,253 ) (50,301 ) Total gross deferred tax assets, net of valuation allowance 1,668,826 1,887,310 Deferred tax liabilities: Prepaid expenses (210 ) (2,779 ) Deferred loan fees (31,930 ) (46,392 ) Fixed assets, principally due to differences in depreciation (36,424 ) (52,236 ) Other (53,591 ) (78,877 ) Total gross deferred tax liabilities (122,155 ) (180,284 ) Net deferred tax assets $ 1,546,671 $ 1,707,026 In 2016, the Company invested in a South Carolina Rehabilitation Credit. The tax credit is included in deferred tax assets and is being amortized. Amortization expense recognized for the years ended December 31, 2017 and 2016 was $306,105 and $325,000, respectively, and is included in other operating expense on the statement of operations. There was a $67,253 valuation allowance for deferred tax assets at December 31, 2017 and $50,301 at December 31, 2016 associated with the Company’s state net operating loss. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible and prior to their expiration governed by the income tax code. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods during which the deferred income tax assets are expected to be deductible, management believes it is more likely than not the Company will realize the benefits of these deductible differences, net of the existing valuation allowance at December 31, 2017. The amount of the deferred income tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced. The Company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. Accordingly, the Company’s deferred tax assets and liabilities were remeasured to reflect the reduction in the U.S. corporate income tax rate from 34 percent to 21 percent, resulting in a $666,674 increase in income tax expense for the year ended December 31, 2017 and a corresponding $666,674 decrease in net deferred tax assets as of December 31, 2017. The Company has analyzed the tax positions taken or expected to be taken in its tax returns and concluded it has no liability related to uncertain tax positions in accordance with applicable regulations. Tax returns for 2014 and subsequent years are subject to examination by taxing authorities. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 11. Commitments and Contingencies We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit, interest rate, and liquidity risk. Our exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is essentially the same as that involved in extending loan facilities to customers. We use the same credit policies in making commitments and conditional obligations as we do for on-balance sheet instruments. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. If deemed necessary, the amount of collateral obtained upon extension of credit is based on our credit evaluation of the borrower. Collateral held varies, but may include accounts receivable, negotiable instruments, inventory, property, plant and equipment, and real estate. Commitments to extend credit, including unused lines of credit, amounted to $92,869,285 and $81,234,269 at December 31, 2017 and 2016, respectively. Standby letters of credit represent our obligation to a third party contingent upon the failure by our customer to perform under the terms of an underlying contract with the third party or obligates us to guarantee or stand as surety for the benefit of the third party. The underlying contract may entail either financial or nonfinancial obligations and may involve such things as the shipment of goods, performance of a contract, or repayment of an obligation. Under the terms of a standby letter, generally drafts will be drawn only when the underlying event fails to occur as intended. We can seek recovery of the amounts paid from the borrower. The majority of these standby letters of credit are unsecured. Commitments under standby letters of credit are usually for one year or less. At December 31, 2017 and 2016, we have recorded no liability for the current carrying amount of the obligation to perform as a guarantor; as such amounts are not considered material. The maximum potential amount of undiscounted future payments related to standby letters of credit at December 31, 2017 and 2016 was $1,219,644 and $793,992, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 12. RELATED PARTY TRANSACTIONS In the opinion of management, loans to our executive officers and directors are made on substantially the same terms, including interest rates and collateral, as those terms prevailing at the time for comparable loans with persons not related to the lender that do not involve more than the normal risk of collectability. There were no past due loans to our executive officers as of December 31, 2017 and 2016. The table below summarizes related party loans. December 31, 2017 2016 Balance at beginning of year $ 3,944,140 $ 6,523,137 New loans or advances 2,879,435 4,833,545 Repayments (2,253,795 ) (7,412,542 ) Balance at end of year $ 4,569,780 $ 3,944,140 At December 31, 2017 and 2016, total deposits held by related parties were $7,180,958 and $4,376,563, respectively. The Company also leased office space from a related party as discussed in the Premises, Equipment and Leasehold Improvements footnote. |
OTHER EXPENSE
OTHER EXPENSE | 12 Months Ended |
Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |
OTHER EXPENSE | 13. Other Expense The table below summarizes of the components of other operating expense. For the year ended December 31, 2017 2016 2015 Advertising and business development $ 10,844 $ 16,159 $ 16,662 Supplies 75,965 94,006 111,604 Telephone and postage 207,526 194,853 188,052 Insurance 44,613 42,192 42,504 Professional fees 454,882 431,424 423,319 Data processing services 585,497 594,550 518,788 State and FDIC insurance and fees 165,280 242,926 228,627 Courier service 82,907 96,823 95,877 Amortization of state tax credit 306,105 325,000 — Other 584,118 601,843 542,949 Total other expense $ 2,517,737 $ 2,639,776 $ 2,168,382 |
STOCK INCENTIVE PLAN
STOCK INCENTIVE PLAN | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK INCENTIVE PLAN | 14. Stock Incentive Plan We have a Stock Incentive Plan which was approved in 1998 with 180,000 (329,422 adjusted for three 10% stock dividends, a 10% stock distribution, and a 25% stock dividend) shares reserved and a Stock Incentive Plan which was approved in 2010 with 300,000 (330,000 adjusted for a 10% stock dividend) shares reserved. Under both Plans, options are periodically granted to employees at a price not less than the fair market value of the shares at the date of grant. Employees become 20% vested after five years and then vest 20% each year until fully vested. The right to exercise each such 20% of the options is cumulative and will not expire until the tenth anniversary of the date of the grant. All employees are eligible to participate in this plan if the Executive/Long-Range Committee, in its sole discretion, determines that such person has contributed or can be expected to contribute to our profits or growth. Option awards are generally granted with an exercise price equal to the market price of the Company’s common stock at the date of grant. The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of our common stock. The expected term of the options granted shall not exceed ten years from the date of grant (the amount of time options granted are expected to be outstanding). The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The fair value of options granted was determined using the following weighted-average assumptions as of grant date: 2017 2016 2015 Risk free interest rate 2.43 % 2.33 % 1.96 % 2.33 % Expected life (in years) 7.5 10 10 10 Expected stock price volatility 34.20 % 27.95 % 19.62 % 19.62 % Dividend yield 4.00 % 3.47 % 4.13 % 4.13 % There are currently options to purchase 1,600 shares outstanding and exercisable under the 1998 Omnibus Stock Incentive Plan with options to purchase 1,600 shares exercisable at December 31, 2017. This plan has expired, however, shares granted before the expiration date may still be exercised. The following table presents a summary of the activity under the 1998 and 2010 Omnibus Stock Incentive Plans for the years ended December 31. 2017 2016 2015 Shares Weighted Shares Weighted Shares Weighted Outstanding, January 1 140,905 $ 11.06 183,302 $ 10.81 176,181 $ 10.48 Granted 9,250 21.56 10,000 15.99 23,650 14.44 Expired — — — — — — Exercised (33,140 ) 10.28 (39,539 ) 10.26 (9,378 ) 13.11 Forfeited (11,300 ) 15.42 (12,858 ) 13.84 (7,151 ) 11.64 Outstanding, December 31 105,715 $ 11.87 140,905 $ 11.06 183,302 $ 10.81 Exercisable at year end 28,813 $ 9.74 12,620 $ 11.50 17,457 $ 12.95 Information has been retroactively adjusted for the 2015 10% stock dividend as applicable. The following table presents information pertaining to options outstanding at December 31, 2017. December 31, 2017 Exercise Number of Weighted Weighted Intrinsic Number of Weighted Intrinsic $ 9.47 51,890 3.50 $ 9.47 $ 530,554 20,756 $ 9.47 $ 212,221 $ 9.79 5,280 2.70 $ 9.79 $ 52,296 3,168 $ 9.79 $ 31,378 $ 10.10 7,645 4.60 $ 10.10 $ 73,351 1,529 $ 10.10 $ 14,670 $ 10.61 3,300 3.20 $ 10.61 $ 29,979 1,320 $ 10.61 $ 11,992 $ 10.91 2,200 4.90 $ 10.91 $ 19,326 440 $ 10.91 $ 3,865 $ 11.73 1,600 0.20 $ 11.73 $ 12,743 1,600 $ 11.73 $ 12,743 $ 13.49 4,950 6.60 $ 13.49 $ 30,713 — $ — $ — $ 13.64 2,200 5.90 $ 13.64 $ 13,320 — $ — $ — $ 14.35 12,925 7.50 $ 14.35 $ 69,079 — $ — $ — $ 14.98 3,300 7.60 $ 14.98 $ 15,558 — $ — $ — $ 15.99 5,000 8.30 $ 15.99 $ 18,523 — $ — $ — $ 20.90 2,500 9.90 $ 20.90 $ (3,014 ) — $ — $ — $ 21.80 3,750 21.80 $ 21.80 $ (7,895 ) — $ — $ — 106,540 9.90 $ 11.87 $ 854,533 28,813 $ 9.74 $ 286,869 All relevant information has been retroactively adjusted for the 2015 10% stock dividend. The total intrinsic value of options exercised during the years ended December 31, 2017, 2016, and 2015, were $311,836, $273,979, and $14,272, respectively. We recognized compensation cost for the years ended December 31, 2017, 2016 and 2015 in the amount of $71,701, $76,529, and $78,987, respectively, related to the granted options. As of December 31, 2017, there was a total of $284,123 in unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plan. The cost is expected to be recognized over a weighted average period of 2.81 years. |
EMPLOYEE STOCK OWNERSHIP PLAN A
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST | 12 Months Ended |
Dec. 31, 2017 | |
Employee Stock Ownership Plan And Trust | |
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST | 15. EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST We established an Employee Stock Ownership Plan (“ESOP”) effective January 1, 1989. Any employee of the Bank is eligible to become a participant in the ESOP upon reaching 21 years of age and credited with one-year of service (1,000 hours of service). The employee may enter the Plan on the January 1 st The Company recognizes expense when the contribution is approved by the Board of Directors. The total expenses amounted to $375,000 during the year ended December 31, 2017, $345,000 during the year ended December 31, 2016, and $315,000 for the year ended December 31, 2015. The plan currently owns 286,013 shares of common stock of Bank of South Carolina Corporation. A participant vests in the ESOP based upon the participant’s credited years of service. The vesting schedule is as follows: ● 1 Year of Service 0% Vested ● 2 Years of Service 25% Vested ● 3 Years of Service 50% Vested ● 4 Years of Service 75% Vested ● 5 Years of Service 100% Vested Periodically the Internal Revenue Service “IRS” requires a restatement of a qualified retirement plan to ensure that the plan document includes provisions required by legislative and regulatory changes made since the last restatement. There have been no substantive changes to the plan. The Board of Directors approved a restated plan, on January 26, 2012 (incorporated as Exhibit 10.5 in the 2011 10-K). The Plan was submitted to the IRS for approval and a determination letter was issued September 26, 2013, stating that the plan satisfies the requirements of Code Section 4975(e)(7). On January 26, 2017, the Board of Directors approved a restated plan (incorporated as Exhibit 10.6 in the 2016 10-K). The Plan was submitted to the IRS for approval and a determination letter was issued November 17, 2017, stating that the plan satisfies the requirements of Code Section 4975(e)(7). |
DIVIDENDS
DIVIDENDS | 12 Months Ended |
Dec. 31, 2017 | |
Dividends [Abstract] | |
DIVIDENDS | 16. DIVIDENDS The Bank’s ability to pay dividends to the Company is restricted by the laws and regulations of the State of South Carolina. Generally, these restrictions allow the Bank to pay dividends from current earnings without the prior written consent of the South Carolina Commissioner of Banking, if it received a satisfactory rating at its most recent examination. Cash dividends when declared, are paid by the Bank to the Company for distribution to shareholders of the Company. The Bank paid dividends of $2,685,000, $2,340,000, and $2,475,000 to the Company during the years ended December 31, 2017, 2016 and 2015, respectively. On August 27, 2015, the Company’s Board of Directors declared a ten percent stock dividend to our shareholders. The record date was September 8, 2015 and the distribution date was September 28, 2015. Earnings per share and average shares outstanding have been adjusted to reflect the stock dividend in our consolidated financial statements. |
INCOME PER COMMON SHARE
INCOME PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
INCOME PER COMMON SHARE | 17. Income Per Common Share Basic income per share is computed by dividing net income by the weighted-average number of common shares outstanding. Diluted income per share is computed by dividing net income by the weighted-average number of common shares and potential common shares outstanding. Potential common shares consist of dilutive stock options determined using the treasury stock method and the average market price of common stock. The following table is a summary of the reconciliation of average shares outstanding for the years ended December 31. 2017 2016 2015 Numerator: Net income $ 4,901,825 $ 5,247,063 $ 4,884,288 Denominator: Weighted average shares outstanding 4,973,637 4,935,349 4,912,499 Effect of dilutive shares 84,715 118,765 154,586 Weighted average shares outstanding-diluted 5,058,352 5,054,114 5,067,085 Earnings per share - basic $ 0.99 $ 1.06 $ 0.99 Earnings per share - diluted $ 0.97 $ 1.04 $ 0.96 |
REGULATORY CAPITAL REQUIREMENTS
REGULATORY CAPITAL REQUIREMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Regulatory Capital Requirements [Abstract] | |
REGULATORY CAPITAL REQUIREMENTS | 18. Regulatory Capital Requirements The Company and the Bank are subject to various capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company and the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the assets, liabilities, and certain off balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgements by the regulators about components, risk weightings, and other factors. Current quantitative measures established by regulation to ensure capital adequacy require that we maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital (as defined in the regulation) to risk-weighted assets (as defined) and to average assets. We believe that the Company and the Bank meet all capital adequacy requirements to which they were subject at December 31, 2017 and 2016. On July 2, 2013, the Federal Reserve Board approved the final rules implementing the Basel Committee on Banking Supervision’s (“BCBS”) capital guidelines for U.S. banks (“Basel III”). Following the actions by the Federal Reserve, the FDIC also approved regulatory capital requirements on July 9, 2013. The FDIC’s rule is identical in substance to the final rules issued by the Federal Reserve Bank. Basel III became effective on January 1, 2015. The purpose is to improve the quality and increase the quantity of capital for all banking organizations. The minimum requirements for the quantity and quality of capital were increased. The rule includes a new common equity Tier 1 capital to risk-weighted assets ratio of 4.50% and a common equity Tier 1 capital conservation buffer of 2.50% of risk-weighted assets. The rule also raises the minimum ratio of Tier 1 capital to risk-weighted assets from 4.00% to 6.00% and requires a minimum leverage ratio of 4.00%. In addition, the rule also implements strict eligibility criteria for regulatory capital instruments and improves the methodology for calculating risk-weighted assets to enhance risk sensitivity. All final rule requirements will be phased in over a multi-year schedule. The capital conservation buffer in effect for the year ended December 31, 2017 was 1.25%. At December 31, 2017, the Bank was categorized as “well capitalized” under Basel III. To be categorized as “well capitalized” the Bank must maintain minimum total risk based, Tier 1 risk based, common equity Tier 1 risk based capital and Tier 1 leverage ratios of 10.00%, 8.00%, 6.50% and 5.00%, respectively, and to be categorized as “adequately capitalized,” the Bank must maintain minimum total risk based, Tier 1 risk based, common equity Tier 1 risk based capital, and Tier 1 leverage ratios of 8.00%, 6.00%, 4.50%, and 4.00%, respectively. The following tables present the actual and required capital amounts and ratios for the Company and Bank at December 31, 2017 and 2016: December 31, 2017 Actual For Capital To Be Well ( in thousands Amount Ratio Amount Ratio Amount Ratio Total capital to risk-weighted assets: Company $ 47,986 15.97 % $ 23,213 8.00 % N/A N/A Bank $ 47,100 15.69 % $ 24,020 8.00 % $ 30,025 10.00 % Tier 1 capital to risk-weighted assets: Company $ 44,253 14.73 % $ 17,410 6.00 % N/A N/A Bank $ 43,344 14.44 % $ 18,015 6.00 % $ 24,020 8.00 % Tier 1 capital to average assets: Company $ 44,253 10.01 % $ 16,738 4.00 % N/A N/A Bank $ 43,344 9.82 % $ 17,661 4.00 % $ 22,077 5.00 % Common equity Tier 1 capital: Company $ 44,253 14.73 % $ 13,058 4.50 % N/A N/A Bank $ 43,344 14.44 % $ 13,511 4.50 % $ 19,516 6.50 % December 31, 2016 Actual For Capital To Be Well ( in thousands Amount Ratio Amount Ratio Amount Ratio Total capital to risk-weighted assets: Company $ 44,850 15.46 % $ 23,213 8.00 % N/A N/A Bank $ 44,544 15.36 % $ 23,207 8.00 % $ 29,009 10.00 % Tier 1 capital to risk-weighted assets: Company $ 41,220 14.21 % $ 17,410 6.00 % N/A N/A Bank $ 40,915 14.10 % $ 17,405 6.00 % $ 23,207 8.00 % Tier 1 capital to average assets: Company $ 41,220 9.85 % $ 16,738 4.00 % N/A N/A Bank $ 40,915 9.78 % $ 16,735 4.00 % $ 20,919 5.00 % Common equity Tier 1 capital: Company $ 41,220 14.21 % $ 13,058 4.50 % N/A N/A Bank $ 40,915 14.10 % $ 13,054 4.50 % $ 18,856 6.50 % |
Disclosures Regarding Fair Valu
Disclosures Regarding Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Disclosures Regarding Fair Value of Financial Instruments | 19. Disclosures Regarding Fair Value of Financial Instruments Fair value measurements apply whenever GAAP requires or permits assets or liabilities to be measured at fair value either on a recurring or nonrecurring basis. Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants at the measurement date. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities; it is not a forced transaction. GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs that market participants would use in pricing an asset or liability are developed based on market data we have obtained from independent sources. Unobservable inputs, which are developed based on the best information available in the circumstances, reflect our estimate of assumptions that market participants would use in pricing an asset or liability. The fair value hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The fair value hierarchy is broken down into three levels based on the reliability of inputs as follows: ● Level 1: valuation is based upon unadjusted quoted market prices for identical instruments traded in active markets. ● Level 2: valuation is based upon quoted market prices for similar instruments traded in active markets, quoted market prices for identical or similar instruments traded in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by market data. ● Level 3: valuation is derived from other valuation methodologies, including discounted cash flow models and similar techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in determining fair value. Fair value estimates are made at a specific point of time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale our entire holdings of a particular financial instrument. Because no active market exists for a significant portion of our financial instruments, fair value estimates are based on judgements regarding future expected loss experience, current economic conditions, current interest rates and prepayment trends, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgement and therefore cannot be determined with precision. Changes in any of these assumptions used in calculating fair value also would affect significantly the estimates. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of these estimates. The following paragraphs describe the valuation methodologies used for assets and liabilities recorded at fair value on a recurring basis: Investment Securities Available for Sale Investment securities are recorded at fair value on a recurring basis and are based upon quoted prices if available. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange such as the New York Stock Exchange, or by dealers or brokers in active over-the counter markets. Level 2 securities include mortgage backed securities issued by government sponsored entities, municipal bonds and corporate debt securities. Securities classified as Level 3 include asset-backed securities in less liquid markets. Derivative Instruments Derivative instruments include interest rate lock commitments and forward sale commitments. These instruments are valued based on the change in the value of the underlying loan between the commitment date and the end of the period. We classify these instruments as Level 3. The fair value of these commitments was not significant at December 31, 2017 or 2016. Assets and liabilities measured at fair value on a recurring basis at December 31, 2017 and December 31, 2016 are as follows: December 31, 2017 Quoted (Level 1) Significant (Level 2) Significant (Level 3) Total U.S. Treasury Notes $ 35,559,845 $ — $ — $ 35,559,845 Government Sponsored Enterprises — 63,556,504 — 63,556,504 Municipal Securities — 28,675,012 11,458,889 40,133,901 Total $ 35,559,845 $ 92,231,516 $ 11,458,889 $ 139,250,250 December 31, 2016 Quoted (Level 1) Significant (Level 2) Significant (Level 3) Total U.S. Treasury Notes $ 23,939,063 $ — $ — $ 23,939,063 Government Sponsored Enterprises — 51,034,091 — 51,034,091 Municipal Securities — 31,027,933 13,977,857 45,005,790 Total $ 23,939,063 $ 82,062,024 $ 13,977,857 $ 119,978,944 There were no liabilities recorded at fair value on a recurring basis as of December 31, 2017 or December 31, 2016. The following table reconciles the changes in assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2017 and 2016: December 31, 2017 2016 Beginning balance $ 13,977,857 $ 5,217,678 Total gains or (losses) (realized/unrealized) Included in earnings — — Included in other comprehensive income 137,751 (818,821 ) Purchases, issuances and settlements, net of maturities (2,656,719 ) 9,579,000 Transfers in and/or out of Level 3 — — Ending balance $ 11,458,889 $ 13,977,857 There were no transfers between fair value levels in 2017 or 2016. The following paragraphs describe the valuation methodologies used for assets and liabilities recorded at fair value on a nonrecurring basis: OREO Loans, secured by real estate, are adjusted to the lower of the recorded investment in the loan or the fair value of the real estate upon transfer to OREO. Subsequently, OREO is carried at the lower of carrying value or fair value. Fair value is based upon independent market prices, appraised values of the collateral or our estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price or a current appraisal, we record the asset as nonrecurring Level 2. When an appraised value is not available or we determine the fair value of the collateral is further impaired below the appraised value and there is no observable market price, we record the asset as nonrecurring Level 3. Impaired Loans Impaired loans are carried at the lower of recorded investment or fair value. The fair value of the collateral less estimated costs to sell is the most frequently used method. Typically, we review the most recent appraisal and if it is over 12 to 18 months old we may request a new third party appraisal. Depending on the particular circumstances surrounding the loan, including the location of the collateral, the date of the most recent appraisal and the value of the collateral relative to the recorded investment in the loan, we may order an independent appraisal immediately or, in some instances, may elect to perform an internal analysis. Specifically as an example, in situations where the collateral on a nonperforming commercial real estate loan is out of our primary market area, we would typically order an independent appraisal immediately, at the earlier of the date the loan becomes nonperforming or immediately following the determination that the loan is impaired. However, as a second example, on a nonperforming commercial real estate loan where we are familiar with the property and surrounding areas and where the original appraisal value far exceeds the recorded investment in the loan, we may perform an internal analysis whereby the previous appraisal value would be reviewed considering recent current conditions, and known recent sales or listings of similar properties in the area, and any other relevant economic trends. This analysis may result in the call for a new appraisal. These valuations are reviewed and updated on a quarterly basis. In accordance with ASC 820, Fair Value Measurement, Mortgage Loans to be Sold Mortgage loans to be sold carried at the lower of cost or market value. The fair values of mortgage loans to be sold are based on current market rates from investors within the secondary market for loans with similar characteristics. Carrying value approximates fair value. These loans are classified as Level 2. Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an on going basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The following tables present information about certain assets and liabilities measured at fair value on a nonrecurring basis at December 31, 2017, and 2016. December 31, 2017 Quoted Market Price in active markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Impaired loans $ — $ — $ 1,735,051 $ 1,735,051 Other real estate owned — — 435,479 435,479 Mortgage loans to be sold — 2,093,723 — 2,093,723 Total $ — $ 2,093,723 $ 2,170,530 $ 4,264,253 December 31, 2016 Quoted Market Price in active markets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Impaired loans $ — $ — $ 4,143,772 $ 4,143,772 Other real estate owned — — 521,943 521,943 Mortgage loans to be sold — 4,386,210 — 4,386,210 Total $ — $ 4,386,210 $ 4,665,715 $ 9,051,925 There were no liabilities measured at fair value on a nonrecurring basis as of December 31, 2017 or 2016. The following table provides information describing the unobservable inputs used in Level 3 fair value measurements at December 31, 2017: Inputs Valuation Technique Unobservable Input General Range of Inputs Impaired Loans Appraisal Value/ Comparison Sales/Other Estimates Appraisals and/or Sales of Comparable Properties Appraisals Discounted 10% to 20% for Sales Commissions and Other Holding Costs Other Real Estate Owned Appraisal Value/ Comparison Sales/Other Estimates Appraisals and/or Sales of Comparable Properties Appraisals Discounted 10% to 20% for Sales Commissions and Other Holding Costs Accounting standards require disclosure of fair value information for all of our assets and liabilities that are considered financial instruments, whether or not recognized on the balance sheet, for which it is practicable to estimate fair value. Under the accounting standard, fair value estimates are based on existing financial instruments without attempting to estimate the value of anticipated future business and the value of the assets and liabilities that are not financial instruments. Accordingly, the aggregate fair value amounts of existing financial instruments do not represent the underlying value of those instruments on our books. The following paragraphs describe the methods and assumptions we use in estimating the fair values of financial instruments: a. Cash and due from banks, interest-bearing deposits at the Federal Reserve Bank The carrying value approximates fair value. All mature within 90 days and do not present unanticipated credit concerns. b. Investment securities available for sale Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. c. Loans The carrying values of variable rate consumer and commercial loans and consumer and commercial loans with remaining maturities of three months or less, approximate fair value. The fair values of fixed rate consumer and commercial loans with maturities greater than three months are determined using a discounted cash flow analysis and assume the rate being offered on these types of loans at December 31, 2017 and December 31, 2016, approximate market. The carrying value of mortgage loans held for sale approximates fair value. For lines of credit, the carrying value approximates fair value. d. Deposits The estimated fair value of deposits with no stated maturity is equal to the carrying amount. The fair value of time deposits is estimated by discounting contractual cash flows, using interest rates currently being offered on the deposit products. e. Accrued interest receivable and payable Since these financial instruments will typically be received or paid within three months, the carrying amounts of such instruments are deemed a reasonable estimate of fair value. f. Loan commitments Estimates of the fair value of these off-balance sheet items are not made because of the short-term nature of these arrangements and the credit standing on the counterparties. The following tables present the carrying amount, fair value, and placement in the fair value hierarchy of our financial instruments as of December 31, 2017 and December 31, 2016. Fair Value Measurements at December 31, 2017 Carrying Amount Estimated Fair Value Level 1 Level 2 Level 3 Financial Assets: Cash and due from banks $ 8,486,025 $ 8,486,025 $ 8,486,025 $ — $ — Interest-bearing deposits at the Federal Reserve 24,034,194 24,034,194 24,034,194 — — Investment securities available for sale 139,250,250 139,250,250 35,559,845 92,231,516 11,458,889 Mortgage loans to be sold 2,093,723 2,093,723 — 2,093,723 — Net loans 266,305,242 265,277,204 — — 265,277,204 Accrued interest receivable 1,720,920 1,720,920 — 1,720,920 — Financial Liabilities: Demand deposits 360,967,884 360,967,884 — 360,967,884 — Time deposits 41,920,416 40,722,870 — 40,722,870 — Accrued interest payable 96,190 96,190 — 96,190 — Fair Value Measurements at December 31, 2016 Carrying Amount Estimated Fair Value Level 1 Level 2 Level 3 Financial Assets: Cash and due from banks $ 8,141,030 $ 8,141,030 $ 8,141,030 $ — $ — Interest-bearing deposits at the Federal Reserve 18,101,300 18,101,300 18,101,300 — — Investment securities available for sale 119,978,944 119,978,944 23,939,063 82,062,024 13,977,857 Mortgage loans to be sold 4,386,210 4,386,210 — 4,386,210 — Net loans 256,724,498 256,555,052 — — 256,555,052 Accrued interest receivable 1,614,002 1,614,002 — 1,614,002 — Financial Liabilities: Demand deposits 328,681,594 328,681,594 — 328,681,594 — Time deposits 43,841,257 43,856,383 — 43,856,383 — Accrued interest payable 51,629 51,629 — 51,629 — |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | 20. ACCUMULATED OTHER COMPREHENSIVE INCOME The following table summarizes the components of accumulated other comprehensive income (loss) and changes in those components as of and for the years ended December 31: Available for sale securities Balance December 31, 2014 $ 1,243,022 Change in net unrealized gains (losses) on securities available for sale 26,255 Reclassification adjustment for net securities gains included in net income (423,832 ) Income tax expense (benefit) 147,104 Balance December 31, 2015 992,549 Change in net unrealized gains (losses) on securities available for sale (2,158,236 ) Reclassification adjustment for net securities gains included in net income (380,904 ) Income tax expense 939,482 Balance December 31, 2016 (607,109 ) Change in net unrealized gains (losses) on securities available for sale (347,066 ) Reclassification adjustment for net securities gains included in net income (45,820 ) Income tax expense 116,007 Reclassification of tax effects stranded in other comprehensive income by tax reform 187,692 Balance December 31, 2017 $ (696,296 ) The following table shows the line items in the consolidated Statements of Income affected by amounts reclassified from accumulated other comprehensive income (loss): Year ended December 31, 2017 2016 2015 Gain on sale of investments, net $ 45,820 $ 380,904 $ 423,832 Tax effect (15,578 ) (140,934 ) — Total reclassification, net of tax $ 30,242 $ 239,970 $ 423,832 |
BANK OF SOUTH CAROLINA CORPORAT
BANK OF SOUTH CAROLINA CORPORATION - PARENT COMPANY | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
BANK OF SOUTH CAROLINA CORPORATION - PARENT COMPANY | 21. Bank of South Carolina Corporation - Parent Company The Company’s principal source of income is dividends from the Bank. Certain regulatory requirements restrict the amount of dividends which the Bank can pay to the Company. The Company’s principal asset is its investment in its Bank subsidiary. The Company’s condensed statements of financial condition as of December 31, 2017 and 2016, and the related condensed statements of income and cash flows for the years ended December 31, 2017, 2016 and 2015, are as follows: Condensed Statements of Financial Condition 2017 2016 Assets Cash $ 947,216 $ 922,595 Investment in wholly-owned bank subsidiary 42,437,503 40,308,166 Other assets 127,274 76,077 Total assets $ 43,511,993 $ 41,306,838 Liabilities and shareholders’equity Other liabilities 747,358 693,864 Shareholders’ equity 42,764,635 40,612,974 Total liabilities and shareholders’ equity $ 43,511,993 $ 41,306,838 Condensed Statements of Income 2017 2016 2015 Interest income $ 484 $ 571 $ 302 Net operating expenses (189,872 ) (177,612 ) (195,636 ) Dividends received from bank 2,685,000 2,340,000 2,475,000 Equity in undistributed earnings of subsidiary 2,406,213 3,084,104 2,604,622 Net income $ 4,901,825 $ 5,247,063 $ 4,884,288 Condensed Statements of Cash Flows 2017 2016 2015 Cash flows from operating activities: Net income $ 4,901,825 $ 5,247,063 $ 4,884,288 Stock-based compensation expense 71,701 76,529 78,987 Equity in undistributed earnings of subsidiary (2,406,213 ) (3,084,104 ) (2,604,622 ) Decrease (increase) in other assets (51,197 ) (55,923 ) 202,043 Increase in other liabilities 151 — — Net cash provided by operating activities 2,516,267 2,183,565 2,560,696 Cash flows from financing activities: Dividends paid (2,832,489 ) (2,613,715 ) (2,380,062 ) Cash in lieu of fractional shares — — (4,778 ) Stock options exercised 340,843 405,749 122,946 Net cash used by financing activities (2,491,646 ) (2,207,966 ) (2,261,894 ) Net increase (decrease) in cash 24,621 (24,401 ) 298,802 Cash at the beginning of the year 922,595 946,996 648,194 Cash at the end of the year $ 947,216 $ 922,595 $ 946,996 Supplemental disclosure for non-cash investing and financing activity Change in dividends payable $ 53,340 $ 54,706 $ 59,178 |
QUARTERLY RESULTS OF OPERATIONS
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | 22. Quarterly Results of Operations (unaudited) The tables below represent the quarterly results of operations for the years ended December 31, 2017 and 2016, respectively: 2017 Fourth Third Second First Total interest and fee income $ 4,327,409 $ 4,117,032 $ 3,933,285 $ 3,791,421 Total interest expense 109,934 110,625 106,522 96,782 Net interest income 4,217,475 4,006,407 3,826,763 3,694,639 Provision for loan losses 2,500 20,000 30,000 2,500 Net interest income after provision for loan losses 4,214,975 3,986,407 3,796,763 3,692,139 Other income 538,236 481,882 696,479 551,874 Other expense 2,696,005 2,484,538 2,590,123 2,471,630 Income before income tax expense 2,057,206 1,983,751 1,903,119 1,772,383 Income tax expense 1,208,507 543,098 516,734 546,295 Net income $ 848,699 $ 1,440,653 $ 1,386,385 $ 1,226,088 Basic income per common share $ 0.17 $ 0.29 $ 0.28 $ 0.25 Diluted income per common share $ 0.17 $ 0.29 $ 0.27 $ 0.24 2016 Fourth Third Second First Total interest and fee income $ 3,862,720 $ 4,030,143 $ 3,770,669 $ 3,632,065 Total interest expense 95,146 96,467 92,988 94,139 Net interest income 3,767,574 3,933,676 3,677,681 3,537,926 Provision for loan losses 175,000 210,000 140,000 45,000 Net interest income after provision for loan losses 3,592,574 3,723,676 3,537,681 3,492,926 Other income 638,896 686,586 729,572 806,029 Other expense 2,715,147 2,584,268 2,436,881 2,536,148 Income before income tax expense 1,516,323 1,825,994 1,830,372 1,762,807 Income tax expense 203,444 399,656 518,262 567,071 Net income $ 1,312,879 $ 1,426,338 $ 1,312,110 $ 1,195,736 Basic income per common share $ 0.27 $ 0.28 $ 0.27 $ 0.24 Diluted income per common share $ 0.26 $ 0.28 $ 0.26 $ 0.24 |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, the Bank. In consolidation, all significant intercompany balances and transactions have been eliminated. References to “we,” “us,” “our,” “the Bank,” or “the Company” refer to the parent and its subsidiary that are consolidated for financial purposes. |
Accounting Estimates and Assumptions | Accounting Estimates and Assumptions T he preparation of the financial statements are in conformity with GAAP, which require management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results could differ significantly from these estimates and assumptions. Material estimates generally susceptible to significant change are related to the determination of the allowance for loan losses, impaired loans, other real estate owned, deferred tax assets, the fair value of financial instruments and other-than-temporary impairment of investment securities. |
Reclassification | Reclassification: Certain amounts in the prior years’ financial statements have been reclassified to conform to the current year’s presentation. Such reclassifications have no effect on shareholders’ equity or the net income as previously reported. |
Subsequent Events | Subsequent Events: Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed as of the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Non recognized subsequent events are events that provide evidence about conditions that did not exist as of the date of the balance sheet but arose after that date. We have reviewed events occurring through the date the financial statements were available to be issued and no subsequent events occurred requiring accrual or disclosure. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include working cash funds, due from banks, interest-bearing deposits at the Federal Reserve, items in process of collection and federal funds sold. All cash equivalents are readily convertible to cash and have maturities of less than 90 days. Depository institutions are required to maintain reserve and clearing balances at the Federal Reserve Bank. Vault cash satisfied our daily reserve requirement for the years ended December 31, 2017 and 2016, respectively. |
Interest-bearing Deposits in Other Financial Institutions | Interest-bearing Deposits at the Federal Reserve: Interest-bearing deposits at the Federal Reserve mature within one year and are carried at cost. |
Investment Securities | Investment Securities We classify investments into three categories: (1) Held to Maturity - debt securities that we have the positive intent and ability to hold to maturity, which are reported at amortized cost, adjusted for the amortization of any related premiums or the accretion of any related discounts into interest income using a methodology which approximates a level yield of interest over the estimated remaining period until maturity; (2) Trading - debt and equity securities that are bought and held principally for the purpose of selling them in the near term, which are reported at fair value, with unrealized gains and losses included in earnings; and (3) Available for Sale - debt and equity securities that may be sold under certain conditions, which are reported at fair value, with unrealized gains and losses excluded from earnings and reported as a separate component of shareholders’ equity, net of income taxes. Unrealized losses on securities due to fluctuations in fair value are recognized when it is determined that an other than temporary decline in value has occurred. Realized gains or losses on the sale of investments are recognized on a specific identification, trade date basis. All securities were classified as available for sale for 2017 and 2016. |
Mortgage Loans to be Sold | Mortgage Loans to be Sold We originate fixed and variable rate residential mortgage loans on a service release basis in the secondary market. Loans closed but not yet settled with an investor are carried in our loans held for sale portfolio. Virtually all of these loans have commitments to be purchased by investors and the majority of these loans were locked in by price with the investors on the same day or shortly thereafter that the loan was locked in with our customers. Therefore, these loans present very little market risk. We usually deliver to, and receive funding from, the investor within 30 to 60 days. Commitments to sell these loans to the investor are considered derivative contracts and are sold to investors on a “best efforts” basis. We are not obligated to deliver a loan or pay a penalty if a loan is not delivered to the investor. Because of the short-term nature of these derivative contracts, the fair value of the mortgage loans held for sale in most cases is materially the same as the value of the loan amount at its origination . Mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated market value in the aggregate. Net unrealized losses are provided for in a valuation allowance by charges to operations as a component of mortgage banking income. Gains or losses on sales of loans are recognized when control over these assets are surrendered and are included in mortgage banking income in the consolidated statements of income. |
Loans and Allowance for Loan Losses | Loans and Allowance for Loan Losses L oans are carried at principal amounts outstanding. Loan origination fees, net of certain direct origination costs, are deferred and recognized over the weighted average life of the loan as an adjustment to yield. Interest income on all loans is recorded on an accrual basis. The accrual of interest and the amortization of net loan fees are generally discontinued on loans that 1) are maintained on a cash basis because of deterioration in the financial condition of the borrower; 2) the payment of full principal is not expected; or 3) the principal or interest has been in default for a period of 90 days or more. We define past due loans based on contractual payment and maturity dates. The accrual of interest is generally discontinued on loans that become 90 days past due as to principal or interest. The accrual of interest on some loans may continue even though they are 90 days past due if the loans are well secured or in the process of collection and management deems it appropriate. If non-accrual loans decrease their past due status to less than 30 days for a period of six to nine months, they are reviewed individually by management to determine if they should be returned to accrual status. When the ultimate collectability of an impaired loan’s principal is in doubt, wholly or partially, all cash receipts are applied to principal. Once the recorded principal balance has been reduced to zero, future cash receipts are applied to interest income, to the extent that any interest has been foregone. Further cash receipts are recorded as recoveries of any amounts previously charged off. When this doubt does not exist, cash receipts are applied under the contractual terms of the loan agreement first to interest income and then to principal. We account for impaired loans by requiring that all loans (greater than $50,000) where it is estimated that we will be unable to collect all amounts due according to the terms of the loan agreement be recorded at the loan’s fair value. Fair value may be determined based upon the present value of expected future cash flows discounted at the loan’s effective interest rate, or the fair value of the collateral less cost to sell, if the loan is collateral dependent. Additional accounting guidance allows us to use existing methods for recognizing interest income on an impaired loan. The guidance also requires additional disclosures about how we estimate interest income related to our impaired loans. A loan is also considered impaired if its terms are modified in a troubled debt restructuring (“TDR”). For this type of impaired loan, cash receipts are typically applied to principal and interest receivable in accordance with the terms of the restructured loan agreement. Interest income is recognized on these loans using the accrual method of accounting, provided they are performing in accordance with their restructured terms. The allowance for loan losses (the “allowance”) is our estimate of credit losses inherent in the loan portfolio. The allowance is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when we believe the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance is evaluated on a regular basis and is based upon our periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. We believe that the allowance is adequate to absorb inherent losses in the loan portfolio; however, there can be no assurance that loan losses in future periods will not exceed the current allowance amount or that future increases in the allowance will not be required. No assurance can be given that our ongoing evaluation of the loan portfolio, in light of changing economic conditions and other relevant circumstances, will not require significant future additions to the allowance, thus adversely affecting our operating results. The allowance is also subject to examination by regulatory agencies, which may consider such factors as the methodology used to determine adequacy and the size of the allowance relative to that of peer institutions and other adequacy tests. In addition, such regulatory agencies could require us to adjust our allowance based on information available at the time of the examination. The methodology used to determine the reserve for unfunded lending commitments, which is included in other liabilities, is inherently similar to the methodology used to determine the allowance adjusted for factors specific to binding commitments, including the probability of funding and historical loss ratio. |
Concentration of Credit Risk | Concentration of Credit Risk Our primary market consists of the counties of Berkeley, Charleston and Dorchester, South Carolina. As of December 31, 2017, the majority of the total loan portfolio, as well as a substantial portion of the commercial and real estate loan portfolios, were to borrowers within this region. No other areas of significant concentration of credit risk have been identified. |
Premises, Equipment and Leasehold Improvements and Depreciation | Premises, Equipment and Leasehold Improvements and Depreciation Land is carried at cost. Buildings and equipment are stated at cost less accumulated depreciation. Depreciation is recorded using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes over the estimated useful lives of the assets ranging from 40 years for buildings and 3 to 15 years for equipment. Leasehold improvements are amortized over the shorter of the asset’s useful life or the remaining lease term, including renewal periods when reasonably assured. The cost of maintenance and repairs is charged to operating expense as incurred. |
Other Real Estate Owned | Other Real Estate Owned F air value is based upon independent market prices, appraised values of the collateral, or our estimation of the value of the collateral. Losses arising from an initial foreclosure are charged against the allowance for loan losses. Subsequent to foreclosure, other real estate owned (“OREO”) is recorded at the lower of cost or fair value, adjusted for net selling costs. Gains and losses on the sale of OREO and subsequent write-downs from periodic re-evaluation are charged to net other real estate owned expenses. |
Income Taxes | Income Taxes We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Net deferred tax assets are included in other assets in the consolidated balance sheet. Accounting standards require the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. These standards also prescribe a recognition threshold and measurement of a tax position taken or expected to be taken in an enterprise’s tax return. We believe that we had no uncertain tax positions for the years ended December 31, 2017 and 2016. |
Stock-Based Compensation | Stock-Based Compensation Compensation cost is recognized for stock options issued to employees, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options. Compensation cost is recognized over the required service period, generally defined as the vesting period (10 years). |
Income Per Common Share | Income Per Common Share Basic income per share is computed by dividing net income by the weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares and potential common shares outstanding. Potential common shares consist of dilutive stock options determined using the treasury stock method and the average market price of common stock. Earnings per share are restated for all stock splits and stock dividends through the date of issuance of the financial statements. |
Segment Information | Segment Information The Company operates and manages itself within one retail banking segment and has, therefore, not provided segment disclosures. |
Interest Rate Lock Commitments and Forward Sale Contracts | Interest Rate Lock Commitments and Forward Sale Contracts Commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans are accounted for as free-standing derivatives. The fair value of the interest rate lock is recorded at the time the commitment to fund the mortgage loan is executed and is adjusted for the expected exercise of the commitments before the loan is funded. In order to hedge the change in interest rates resulting from commitments to fund the loans, we enter into forward commitments for the future delivery of mortgage loans when the interest rate is locked. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest on the loan is locked. Changes in the fair values of these derivatives are included in income when they occur. As a result of the short-term nature of mortgage loans held for sale (derivative contract), our derivative instruments were considered to be immaterial as of December 31, 2017 and 2016. We had no embedded derivative instruments requiring hedge accounting treatment at December 31, 2017. We do not currently engage in hedging activities. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements: The following is a summary of recent authoritative pronouncements that could impact the accounting, reporting and/or disclosure of financial information by the Company. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, Topic 606. In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10); Recognition and Measurement of Financial Instruments and Financial Liabilities. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), . In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share – Based Payment Accounting, In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow- Scope Improvements and Practical Expedients In June 2016, the FASB issued ASU 2016-13, Financial instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, In December 2016, the FASB issued ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business In February 2017, the FASB issued ASU 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets Revenue from Contracts with Customers In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization of Purchased Callable Debt Securities, In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on our financial position, results of operations or cash flows. |
INVESTMENT SECURITIES AVAILAB32
INVESTMENT SECURITIES AVAILABLE FOR SALE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of amortized cost and fair value of investment securities available for sale | The amortized cost and fair value of investment securities available for sale are summarized as follows: DECEMBER 31, 2017 AMORTIZED GROSS GROSS ESTIMATED U.S. Treasury Notes $ 35,970,990 $ — $ (411,145 ) $ 35,559,845 Government-Sponsored Enterprises 64,444,315 — (887,811 ) 63,556,504 Municipal Securities 40,191,502 487,545 (545,146 ) 40,133,901 Total $ 140,606,807 $ 487,545 $ (1,844,102 ) $ 139,250,250 DECEMBER 31, 2016 AMORTIZED GROSS GROSS ESTIMATED U.S. Treasury Notes $ 24,148,295 $ 41,153 $ (250,385 ) $ 23,939,063 Government-Sponsored Enterprises 51,737,930 129,482 (833,321 ) 51,034,091 Municipal Securities 45,056,390 765,813 (816,413 ) 45,005,790 Total $ 120,942,615 $ 936,448 $ (1,900,119 ) $ 119,978,944 |
Schedule of amortized cost and estimated fair value of investment securities available for sale by contractual maturity | The amortized cost and estimated fair value of investment securities available for sale at December 31, 2017 and December 31, 2016, by contractual maturity are as follows: DECEMBER 31, 2017 DECEMBER 31, 2016 AMORTIZED ESTIMATED AMORTIZED ESTIMATED Due in one year or less $ 11,554,040 $ 11,546,968 $ 3,343,347 $ 3,350,205 Due in one year to five years 72,622,056 72,124,395 82,848,411 82,682,901 Due in five years to ten years 53,290,088 52,576,036 29,662,030 29,169,228 Due in ten years and over 3,140,623 3,002,851 5,088,827 4,776,610 Total $ 140,606,807 $ 139,250,250 $ 120,942,615 $ 119,978,944 |
Schedule of investment securities gross unrealized losses on investment securities and the fair market value of the related securities | We do not intend to sell and it is not likely that we will be required to sell any of the securities referenced in the table below before recovery of their amortized cost. Less Than 12 Months 12 Months or Longer Total Gross Gross Gross Unrealized Unrealized Unrealized # Fair Value Loss # Fair Value Loss # Fair Value Loss December 31, 2017 Available for sale U.S. Treasury Notes 8 $ 35,559,845 $ (411,145 ) — $ — $ — 8 $ 35,559,845 $ (411,145 ) Government- Sponsored Enterprises 12 53,275,064 (462,174 ) 3 10,281,440 (425,637 ) 15 63,556,504 (887,811 ) Municipal Securities 20 7,815,221 (134,998 ) 29 11,056,185 (410,148 ) 49 18,871,406 (545,146 ) Total 40 $ 96,650,130 $ (1,008,317 ) 32 $ 21,337,625 $ (835,785 ) 72 $ 117,987,755 $ (1,844,102 ) December 31, 2016 Available for sale U.S. Treasury notes 4 $ 17,968,594 $ (250,385 ) — $ — $ — 4 $ 17,958,594 $ (250,385 ) Government-Sponsored Enterprises 8 30,136,720 (833,321 ) — — — 8 30,136,720 (833,321 ) Municipal Securities 54 22,606,430 (816,413 ) — — — 54 22,606,430 (816,413 ) Total 66 $ 70,711,744 $ (1,900,119 ) — $ — $ — 66 $ 70,711,744 $ (1,900,119 ) |
Schedule of proceeds from sales of securities available for sale and gross realized gains and losses | The table below shows the proceeds received from sales of securities available for sale and gross realized gains and losses. For the Year Ended December 31, 2017 2016 2015 Gross proceeds $ 20,231,265 $ 36,218,087 $ 16,564,118 Gross realized gains 154,692 384,963 423,832 Gross realized losses (108,872 ) (4,059 ) — |
LOANS AND ALLOWANCE FOR LOAN 33
LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Schedule of major classifications of loans | Major classifications of loans (net of deferred loan fees of $152,047 at December 31, 2017, and $136,446 at December 31, 2016) are as follows: December 31, 2017 2016 Commercial loans $ 51,723,237 $ 52,262,209 Commercial real estate: Construction 2,317,857 1,208,901 Other 140,186,324 122,968,126 Consumer: Real Estate 70,797,973 77,131,816 Other 5,155,249 7,005,063 Total loans 270,180,640 260,576,115 Allowance for loan losses (3,875,398 ) (3,851,617 ) Total loans, net $ 266,305,242 $ 256,724,498 |
Schedule of credit risks by category and internally assigned grades | The following tables illustrate credit risks by category and internally assigned grades at December 31, 2017 and December 31, 2016. “Pass” includes loans internally graded as excellent, good and satisfactory. December 31, 2017 Commercial Commercial Commercial Consumer Consumer Other Total Pass $ 47,456,205 $ 1,936,335 $ 134,401,977 $ 68,570,298 $ 4,933,696 $ 257,298,511 Watch 2,403,978 381,522 3,605,621 1,934,802 185,746 8,511,669 OAEM — — 610,806 — — 610,806 Sub-Standard 1,863,054 — 1,567,920 292,873 35,807 3,759,654 Doubtful — — — — — — Loss — — — — — — Total $ 51,723,237 $ 2,317,857 $ 140,186,324 $ 70,797,973 $ 5,155,249 $ 270,180,640 December 31, 2016 Commercial Commercial Commercial Consumer Consumer Other Total Pass $ 48,289,944 $ 798,884 $ 116,490,396 $ 74,115,426 $ 6,728,367 $ 246,423,017 Watch 1,004,957 410,017 2,625,079 899,306 147,992 5,087,351 OAEM 1,666,048 — 995,549 630,957 28,939 3,321,493 Sub-Standard 1,301,260 — 2,857,102 1,486,127 99,765 5,744,254 Doubtful — — — — — — Loss — — — — — — Total $ 52,262,209 $ 1,208,901 $ 122,968,126 $ 77,131,816 $ 7,005,063 $ 260,576,115 |
Schedule of aging analysis of the recorded investment of past-due loans by class | The following tables include an aging analysis of the recorded investment of past-due financing receivable by class. December 31, 2017 30-59 60-89 Greater Total Current Total Loans Recorded Commercial $ 3,531 $ 192,846 $ — $ 196,377 $ 51,526,860 $ 51,723,237 $ — Commercial Real Estate Construction — — — — 2,317,857 2,317,857 — Commercial Real Estate Other — — 651,578 651,578 139,534,746 140,186,324 — Consumer Real Estate — — — — 70,797,973 70,797,973 — Consumer Other 10,302 — 34,107 44,409 5,110,840 5,155,249 34,107 Total $ 13,833 $ 192,846 $ 685,685 $ 892,364 $ 269,288,276 $ 270,180,640 $ 34,107 December 31, 2016 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Total Past Due Current Total Loans Receivable Recorded Investment ≥ 90 Days and Accruing Commercial $ 438,159 $ — $ — $ 438,159 $ 51,824,050 $ 52,262,209 $ — Commercial Real Estate Construction — — — — 1,208,901 1,208,901 — Commercial Real Estate Other 6,363 — 1,501,153 1,507,516 121,460,610 122,968,126 89,908 Consumer Real Estate 415,457 — — 415,457 76,716,359 77,131,816 — Consumer Other 56,784 — 33,322 90,106 6,914,957 7,005,063 33,322 Total $ 916,763 $ — $ 1,534,475 $ 2,451,238 $ 258,124,877 $ 260,576,115 $ 123,230 |
Schedule of non-accrual loans | The following table summarizes the balances of non-accrual loans: Loans Receivable on Non-Accrual December 31, 2017 December 31, 2016 Commercial $ 41,651 $ 61,781 Commercial Real Estate Construction — — Commercial Real Estate Other 790,208 1,678,876 Consumer Real Estate — — Consumer Other — 964 Total $ 831,859 $ 1,741,621 |
Schedule of changes in the allowance and an allocation of the allowance by loan category | The following tables set forth the changes in the allowance and an allocation of the allowance by loan category at December 31, 2017, December 31, 2016 and December 31, 2015. December 31, 2017 Commercial Commercial Real Estate Construction Commercial Real Estate Other Consumer Real Estate Consumer Other Total Allowance for Loan Losses Beginning Balance $ 1,545,188 $ 51,469 $ 1,374,706 $ 726,391 $ 153,863 $ 3,851,617 Charge-offs — — (180,587 ) — (4,862 ) (185,449 ) Recoveries 6,000 — 87,030 60,000 1,200 154,230 Provisions (147,600 ) (27,831 ) 268,606 10,527 (48,702 ) 55,000 Ending Balance $ 1,403,588 $ 23,638 $ 1,549,755 $ 796,918 $ 101,499 $ 3,875,398 December 31, 2016 Commercial Commercial Real Estate Construction Commercial Real Estate Other Consumer Real Estate Consumer Other Total Allowance for Loan Losses Beginning Balance $ 896,854 $ 59,861 $ 1,345,094 $ 941,470 $ 174,548 $ 3,417,827 Charge-offs (33,046 ) — (78,300 ) (82,015 ) (14,934 ) (208,295 ) Recoveries — — 65,000 — 7,085 72,085 Provisions 681,380 (8,392 ) 42,912 (133,064 ) (12,836 ) 570,000 Ending Balance $ 1,545,188 $ 51,469 $ 1,374,706 $ 726,391 $ 153,863 $ 3,851,617 December 31, 2015 Commercial Commercial Real Estate Construction Commercial Real Estate Other Consumer Real Estate Consumer Other Total Allowance for Loan Losses Beginning Balance $ 1,211,130 $ 42,904 $ 1,112,387 $ 863,351 $ 105,076 $ 3,334,848 Charge-offs (99,737 ) — (55,252 ) (6,075 ) (40,007 ) (201,071 ) Recoveries 9,164 — 53,753 6,075 22,558 91,550 Provisions (223,703 ) 16,957 234,206 78,119 86,921 192,500 Ending Balance $ 896,854 $ 59,861 $ 1,345,094 $ 941,470 $ 174,548 $ 3,417,827 The following tables present, by portfolio segment and reserving methodology, the allocation of the allowance for loan losses and the gross investment in loans. December 31, 2017 Commercial Commercial Commercial Real Estate Consumer Consumer Other Total Allowance for Loan Losses Individually evaluated for impairment $ 832,571 $ — $ 99,523 $ 43,042 $ 34,107 $ 1,009,243 Collectively evaluated for impairment 571,017 23,638 1,450,232 753,876 67,392 2,866,155 Total Allowance for Losses $ 1,403,588 $ 23,638 $ 1,549,755 $ 796,918 $ 101,499 $ 3,875,398 Loans Receivable Individually evaluated for impairment $ 1,812,461 $ — $ 1,584,821 $ 292,873 $ 34,107 $ 3,724,262 Collectively evaluated for impairment 49,910,776 2,317,857 138,601,503 70,505,100 5,121,142 266,456,378 Total Loans Receivable $ 51,723,237 $ 2,317,857 $ 140,186,324 $ 70,797,973 $ 5,155,249 $ 270,180,640 December 31, 2016 Commercial Commercial Commercial Real Estate Consumer Consumer Other Total Allowance for Loan Losses Individually evaluated for impairment $ 1,051,219 $ — $ 324,587 $ 43,119 $ 89,047 $ 1,507,972 Collectively evaluated for impairment 493,969 51,469 1,050,119 683,272 64,816 2,343,645 Total Allowance for Losses $ 1,545,188 $ 51,469 $ 1,374,706 $ 726,391 $ 153,863 $ 3,851,617 Loans Receivable Individually evaluated for impairment $ 1,301,259 $ — $ 3,225,351 $ 1,286,127 $ 89,047 $ 5,901,784 Collectively evaluated for impairment 50,960,950 1,208,901 119,742,775 75,845,689 6,916,016 254,674,331 Total Loans Receivable $ 52,262,209 $ 1,208,901 $ 122,968,126 $ 77,131,816 $ 7,005,063 $ 260,576,115 |
Schedule of loans individually evaluated for impairment and related allowance for loan losses | As of December 31, 2017 and 2016, loans individually evaluated and considered impaired are presented in the following table. Impaired and Restructured Loans As of the year ended December 31, 2017 2016 Unpaid Principal Balance Recorded Investment Related Allowance Unpaid Principal Balance Recorded Investment Related Allowance With no related allowance recorded: Commercial $ 152,490 $ 152,490 $ — $ 250,040 $ 250,040 $ — Commercial Real Estate Construction — — — — — — Commercial Real Estate Other 1,058,601 1,058,601 — 2,174,770 2,174,770 — Consumer Real Estate 249,754 249,754 — 1,243,008 1,243,008 — Consumer Other — — — — — — $ 1,460,845 $ 1,460,845 $ — $ 3,667,818 $ 3,667,818 $ — With an allowance recorded: Commercial $ 1,659,971 $ 1,659,971 $ 832,571 $ 1,051,219 $ 1,051,219 $ 1,051,219 Commercial Real Estate Construction — — — — — — Commercial Real Estate Other 626,021 526,220 99,523 1,050,581 1,050,581 324,587 Consumer Real Estate 43,119 43,119 43,042 43,119 43,119 43,119 Consumer Other 34,107 34,107 34,107 89,047 89,047 89,047 $ 2,363,218 $ 2,263,417 $ 1,009,243 $ 2,233,966 $ 2,233,966 $ 1,507,972 Total Commercial $ 1,812,461 $ 1,812,461 $ 832,571 $ 1,301,259 $ 1,301,259 $ 1,051,219 Commercial Real Estate Construction — — — — — — Commercial Real Estate Other 1,684,622 1,584,821 99,523 3,225,351 3,225,351 324,587 Consumer Real Estate 292,873 292,873 43,042 1,286,127 1,286,127 43,119 Consumer Other 34,107 34,107 34,107 89,047 89,047 89,047 $ 3,824,063 $ 3,724,262 $ 1,009,243 $ 5,901,784 $ 5,901,784 $ 1,507,972 The following table presents average impaired loans and interest income recognized on those impaired loans, by class segment, for the periods indicated. For the year ended December 31, 2017 2016 2015 Average Interest Average Interest Average Interest With no related allowance recorded: Commercial $ 169,594 $ 9,700 $ 267,747 $ 12,282 $ 750,350 $ 43,853 Commercial Real Estate Construction — — — — — — Commercial Real Estate Other 1,062,516 43,755 2,267,288 81,582 2,500,204 128,352 Consumer Real Estate 249,754 12,649 1,242,515 22,111 450,117 17,035 Consumer Other — — — — 56,758 2,557 $ 1,481,864 $ 66,104 $ 3,777,550 $ 115,975 $ 3,757,429 $ 191,797 With an allowance recorded: Commercial $ 1,736,896 $ 103,758 $ 1,087,559 $ 49,985 $ 1,009,765 $ 49,166 Commercial Real Estate Construction — — — — — — Commercial Real Estate Other 627,070 8,148 1,047,685 16,138 1,066,896 48,945 Consumer Real Estate 41,938 1,752 43,155 1,514 811,014 32,362 Consumer Other 35,591 1,869 94,945 5,533 55,439 3,540 Total $ 2,441,495 $ 115,527 $ 2,273,344 $ 73,170 $ 2,943,114 $ 134,013 Commercial $ 1,906,490 $ 113,458 $ 1,355,306 $ 62,267 $ 1,760,115 $ 93,019 Commercial Real Estate Construction — — — — — — Commercial Real Estate Other 1,689,586 51,903 3,314,973 97,720 3,567,100 177,297 Consumer Real Estate 291,692 14,401 1,285,670 23,625 1,261,131 49,397 Consumer Other 35,591 1,869 94,945 5,533 112,197 6,097 $ 3,923,359 $ 181,631 $ 6,050,894 $ 189,145 $ 6,700,543 $ 325,810 |
CONCENTRATIONS OF CREDIT RISK (
CONCENTRATIONS OF CREDIT RISK (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
Schedule of loan concentration | Our loans were concentrated in the following categories. December 31, 2017 December 31, 2016 Commercial 19.14 % 20.06 % Commercial Real Estate Construction 0.86 % 0.46 % Commercial Real Estate Other 51.89 % 47.20 % Consumer Real Estate 26.20 % 29.59 % Consumer Other 1.91 % 2.69 % Total Loans 100.00 % 100.00 % |
PREMISES, EQUIPMENT AND LEASE35
PREMISES, EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of premises, equipment and leasehold improvements | Premises, equipment and leasehold improvements are summarized in the table below. December 31, 2017 2016 Bank buildings $ 1,824,613 $ 1,824,613 Land 838,075 838,075 Leasehold purchase 30,000 30,000 Lease improvements 690,212 690,212 Construction in process 11,754 11,754 Equipment 3,405,686 3,264,488 6,800,340 6,659,142 Accumulated depreciation (4,555,815 ) (4,362,518 ) Total $ 2,244,525 $ 2,296,624 |
Schedule of minimum rental commitments for leases | Minimum rental commitments for these leases as of December 31, 2017 are presented in the table below. 2018 $ 580,028 2019 594,713 2020 547,650 2021 552,922 2022 and thereafter 11,136,228 Total $ 13,411,541 |
OTHER REAL ESTATE OWNED (Tables
OTHER REAL ESTATE OWNED (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Real Estate Owned, Disclosure of Detailed Components [Abstract] | |
Schedule of activity in other real estate owned | The following table summarizes the activity in other real estate owned at December 31, 2017 and December 31, 2016. December 31, 2017 December 31, 2016 Balance, beginning of year $ 521,943 $ 620,394 Additions-foreclosure 90,832 — Sales (90,832 ) (98,451 ) Write-downs (86,464 ) — Balance, end of year $ 435,479 $ 521,943 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deposits: | |
Schedule of maturities of certificates of deposits | At December 31, 2017, the scheduled maturities of certificates of deposit are presented in the table below. 2018 $ 34,585,073 2019 5,891,415 2020 398,505 2021 577,407 2022 and thereafter 468,016 $ 41,920,416 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense | Total income taxes for the years ended December 31, 2017, 2016 and 2015 are presented in the table below. For the year ended December 31, 2017 2016 2015 Income tax expense $ 2,814,634 $ 1,688,433 $ 2,287,248 Unrealized gains (losses) on securities available for sale presented in accumulated other comprehensive income (loss) (116,007 ) (939,482 ) (147,104 ) Total $ 2,698,627 $ 748,951 $ 2,140,144 Income tax expense was as follows: For the year ended December 31, 2017 2016 2015 Current income taxes Federal $ 2,538,272 $ 2,438,687 $ 2,102,154 State — — 224,083 Total current tax expense 2,538,272 2,438,687 2,326,237 Deferred income tax (benefit) expense 276,362 (750,254 ) (38,989 ) Total income tax expense $ 2,814,634 $ 1,688,433 $ 2,287,248 |
Schedule of income tax reconciliation | The differences between actual income tax expense and the amounts computed by applying the U.S. federal income tax rate of 34% to pretax income from continuing operations for the periods indicated are reconciled in the table below. For the year ended December 31, 2017 2016 2015 Computed “expected” tax expense $ 2,623,595 $ 2,358,069 $ 2,438,322 Increase (reduction) in income taxes resulting from: Tax rate change impact 666,674 — — Amortization of credit and gain 163,411 163,411 — Stock based compensation 24,378 26,012 26,856 Valuation allowance 16,952 4,314 11,093 Other (4,768 ) (203,854 ) 5,052 State income tax, net of federal benefit (329,412 ) (319,525 ) 147,895 Tax exempt interest income (346,196 ) (339,994 ) (341,970 ) $ 2,814,634 $ 1,688,433 $ 2,287,248 |
Schedule of deferred tax assets and liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2017 and 2016 are presented below. December 31, 2017 2016 Deferred tax assets: Allowance for loan losses $ 782,714 $ 1,248,551 State credit carryforward 488,052 236,536 Unrealized loss on securities available for sale 284,877 356,562 Passthrough income 70,603 — State net operating loss carryforward 67,253 50,301 Nonaccrual interest 19,209 — OREO 18,157 — Other 5,214 45,661 Total gross deferred tax assets 1,736,079 1,937,611 Valuation allowance (67,253 ) (50,301 ) Total gross deferred tax assets, net of valuation allowance 1,668,826 1,887,310 Deferred tax liabilities: Prepaid expenses (210 ) (2,779 ) Deferred loan fees (31,930 ) (46,392 ) Fixed assets, principally due to differences in depreciation (36,424 ) (52,236 ) Other (53,591 ) (78,877 ) Total gross deferred tax liabilities (122,155 ) (180,284 ) Net deferred tax assets $ 1,546,671 $ 1,707,026 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of related party loans | The table below summarizes related party loans. December 31, 2017 2016 Balance at beginning of year $ 3,944,140 $ 6,523,137 New loans or advances 2,879,435 4,833,545 Repayments (2,253,795 ) (7,412,542 ) Balance at end of year $ 4,569,780 $ 3,944,140 |
OTHER EXPENSE (Tables)
OTHER EXPENSE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |
Schedule of other operating expenses | The table below summarizes of the components of other operating expense. For the year ended December 31, 2017 2016 2015 Advertising and business development $ 10,844 $ 16,159 $ 16,662 Supplies 75,965 94,006 111,604 Telephone and postage 207,526 194,853 188,052 Insurance 44,613 42,192 42,504 Professional fees 454,882 431,424 423,319 Data processing services 585,497 594,550 518,788 State and FDIC insurance and fees 165,280 242,926 228,627 Courier service 82,907 96,823 95,877 Amortization of state tax credit 306,105 325,000 — Other 584,118 601,843 542,949 Total other expense $ 2,517,737 $ 2,639,776 $ 2,168,382 |
STOCK INCENTIVE PLAN (Tables)
STOCK INCENTIVE PLAN (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of fair value weighted-average assumptions as of options | The fair value of options granted was determined using the following weighted-average assumptions as of grant date: 2017 2016 2015 Risk free interest rate 2.43 % 2.33 % 1.96 % 2.33 % Expected life (in years) 7.5 10 10 10 Expected stock price volatility 34.20 % 27.95 % 19.62 % 19.62 % Dividend yield 4.00 % 3.47 % 4.13 % 4.13 % |
Schedule of activity under stock incentive plan | The following table presents a summary of the activity under the 1998 and 2010 Omnibus Stock Incentive Plans for the years ended December 31. 2017 2016 2015 Shares Weighted Shares Weighted Shares Weighted Outstanding, January 1 140,905 $ 11.06 183,302 $ 10.81 176,181 $ 10.48 Granted 9,250 21.56 10,000 15.99 23,650 14.44 Expired — — — — — — Exercised (33,140 ) 10.28 (39,539 ) 10.26 (9,378 ) 13.11 Forfeited (11,300 ) 15.42 (12,858 ) 13.84 (7,151 ) 11.64 Outstanding, December 31 105,715 $ 11.87 140,905 $ 11.06 183,302 $ 10.81 Exercisable at year end 28,813 $ 9.74 12,620 $ 11.50 17,457 $ 12.95 |
Schedule of information pertaining to options outstanding | The following table presents information pertaining to options outstanding at December 31, 2017. December 31, 2017 Exercise Number of Weighted Weighted Intrinsic Number of Weighted Intrinsic $ 9.47 51,890 3.50 $ 9.47 $ 530,554 20,756 $ 9.47 $ 212,221 $ 9.79 5,280 2.70 $ 9.79 $ 52,296 3,168 $ 9.79 $ 31,378 $ 10.10 7,645 4.60 $ 10.10 $ 73,351 1,529 $ 10.10 $ 14,670 $ 10.61 3,300 3.20 $ 10.61 $ 29,979 1,320 $ 10.61 $ 11,992 $ 10.91 2,200 4.90 $ 10.91 $ 19,326 440 $ 10.91 $ 3,865 $ 11.73 1,600 0.20 $ 11.73 $ 12,743 1,600 $ 11.73 $ 12,743 $ 13.49 4,950 6.60 $ 13.49 $ 30,713 — $ — $ — $ 13.64 2,200 5.90 $ 13.64 $ 13,320 — $ — $ — $ 14.35 12,925 7.50 $ 14.35 $ 69,079 — $ — $ — $ 14.98 3,300 7.60 $ 14.98 $ 15,558 — $ — $ — $ 15.99 5,000 8.30 $ 15.99 $ 18,523 — $ — $ — $ 20.90 2,500 9.90 $ 20.90 $ (3,014 ) — $ — $ — $ 21.80 3,750 21.80 $ 21.80 $ (7,895 ) — $ — $ — 106,540 9.90 $ 11.87 $ 854,533 28,813 $ 9.74 $ 286,869 |
INCOME PER COMMON SHARE (Tables
INCOME PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of average shares outstanding | The following table is a summary of the reconciliation of average shares outstanding for the years ended December 31. 2017 2016 2015 Numerator: Net income $ 4,901,825 $ 5,247,063 $ 4,884,288 Denominator: Weighted average shares outstanding 4,973,637 4,935,349 4,912,499 Effect of dilutive shares 84,715 118,765 154,586 Weighted average shares outstanding-diluted 5,058,352 5,054,114 5,067,085 Earnings per share - basic $ 0.99 $ 1.06 $ 0.99 Earnings per share - diluted $ 0.97 $ 1.04 $ 0.96 |
REGULATORY CAPITAL REQUIREMEN43
REGULATORY CAPITAL REQUIREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Regulatory Capital Requirements [Abstract] | |
Schedule of Regulatory Capital Requirements | The following tables present the actual and required capital amounts and ratios for the Company and Bank at December 31, 2017 and 2016: December 31, 2017 Actual For Capital To Be Well ( in thousands Amount Ratio Amount Ratio Amount Ratio Total capital to risk-weighted assets: Company $ 47,986 15.97 % $ 23,213 8.00 % N/A N/A Bank $ 47,100 15.69 % $ 24,020 8.00 % $ 30,025 10.00 % Tier 1 capital to risk-weighted assets: Company $ 44,253 14.73 % $ 17,410 6.00 % N/A N/A Bank $ 43,344 14.44 % $ 18,015 6.00 % $ 24,020 8.00 % Tier 1 capital to average assets: Company $ 44,253 10.01 % $ 16,738 4.00 % N/A N/A Bank $ 43,344 9.82 % $ 17,661 4.00 % $ 22,077 5.00 % Common equity Tier 1 capital: Company $ 44,253 14.73 % $ 13,058 4.50 % N/A N/A Bank $ 43,344 14.44 % $ 13,511 4.50 % $ 19,516 6.50 % December 31, 2016 Actual For Capital To Be Well ( in thousands Amount Ratio Amount Ratio Amount Ratio Total capital to risk-weighted assets: Company $ 44,850 15.46 % $ 23,213 8.00 % N/A N/A Bank $ 44,544 15.36 % $ 23,207 8.00 % $ 29,009 10.00 % Tier 1 capital to risk-weighted assets: Company $ 41,220 14.21 % $ 17,410 6.00 % N/A N/A Bank $ 40,915 14.10 % $ 17,405 6.00 % $ 23,207 8.00 % Tier 1 capital to average assets: Company $ 41,220 9.85 % $ 16,738 4.00 % N/A N/A Bank $ 40,915 9.78 % $ 16,735 4.00 % $ 20,919 5.00 % Common equity Tier 1 capital: Company $ 41,220 14.21 % $ 13,058 4.50 % N/A N/A Bank $ 40,915 14.10 % $ 13,054 4.50 % $ 18,856 6.50 % |
Disclosures Regarding Fair Va44
Disclosures Regarding Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on a recurring basis | Assets and liabilities measured at fair value on a recurring basis at December 31, 2017 and December 31, 2016 are as follows: December 31, 2017 Quoted (Level 1) Significant (Level 2) Significant (Level 3) Total U.S. Treasury Notes $ 35,559,845 $ — $ — $ 35,559,845 Government Sponsored Enterprises — 63,556,504 — 63,556,504 Municipal Securities — 28,675,012 11,458,889 40,133,901 Total $ 35,559,845 $ 92,231,516 $ 11,458,889 $ 139,250,250 December 31, 2016 Quoted (Level 1) Significant (Level 2) Significant (Level 3) Total U.S. Treasury Notes $ 23,939,063 $ — $ — $ 23,939,063 Government Sponsored Enterprises — 51,034,091 — 51,034,091 Municipal Securities — 31,027,933 13,977,857 45,005,790 Total $ 23,939,063 $ 82,062,024 $ 13,977,857 $ 119,978,944 |
Schedule of changes in Level 3 instruments | The following table reconciles the changes in assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2017 and 2016: December 31, 2017 2016 Beginning balance $ 13,977,857 $ 5,217,678 Total gains or (losses) (realized/unrealized) Included in earnings — — Included in other comprehensive income 137,751 (818,821 ) Purchases, issuances and settlements, net of maturities (2,656,719 ) 9,579,000 Transfers in and/or out of Level 3 — — Ending balance $ 11,458,889 $ 13,977,857 |
Schedule of assets and liabilities measured at fair value measured on a nonrecurring basis | The following tables present information about certain assets and liabilities measured at fair value on a nonrecurring basis at December 31, 2017, and 2016. December 31, 2017 Quoted Market Price in active markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Impaired loans $ — $ — $ 1,735,051 $ 1,735,051 Other real estate owned — — 435,479 435,479 Mortgage loans to be sold — 2,093,723 — 2,093,723 Total $ — $ 2,093,723 $ 2,170,530 $ 4,264,253 December 31, 2016 Quoted Market Price in active markets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Impaired loans $ — $ — $ 4,143,772 $ 4,143,772 Other real estate owned — — 521,943 521,943 Mortgage loans to be sold — 4,386,210 — 4,386,210 Total $ — $ 4,386,210 $ 4,665,715 $ 9,051,925 |
Schedule of unobservable inputs used in Level 3 fair value measurement | The following table provides information describing the unobservable inputs used in Level 3 fair value measurements at December 31, 2017: Inputs Valuation Technique Unobservable Input General Range of Inputs Impaired Loans Appraisal Value/ Comparison Sales/Other Estimates Appraisals and/or Sales of Comparable Properties Appraisals Discounted 10% to 20% for Sales Commissions and Other Holding Costs Other Real Estate Owned Appraisal Value/ Comparison Sales/Other Estimates Appraisals and/or Sales of Comparable Properties Appraisals Discounted 10% to 20% for Sales Commissions and Other Holding Costs |
Schedule of carrying amount,estimated fair value and the financial hierarchy of entity's financial instruments | The following tables present the carrying amount, fair value, and placement in the fair value hierarchy of our financial instruments as of December 31, 2017 and December 31, 2016. Fair Value Measurements at December 31, 2017 Carrying Amount Estimated Fair Value Level 1 Level 2 Level 3 Financial Assets: Cash and due from banks $ 8,486,025 $ 8,486,025 $ 8,486,025 $ — $ — Interest-bearing deposits at the Federal Reserve 24,034,194 24,034,194 24,034,194 — — Investment securities available for sale 139,250,250 139,250,250 35,559,845 92,231,516 11,458,889 Mortgage loans to be sold 2,093,723 2,093,723 — 2,093,723 — Net loans 266,305,242 265,277,204 — — 265,277,204 Accrued interest receivable 1,720,920 1,720,920 — 1,720,920 — Financial Liabilities: Demand deposits 360,967,884 360,967,884 — 360,967,884 — Time deposits 41,920,416 40,722,870 — 40,722,870 — Accrued interest payable 96,190 96,190 — 96,190 — Fair Value Measurements at December 31, 2016 Carrying Amount Estimated Fair Value Level 1 Level 2 Level 3 Financial Assets: Cash and due from banks $ 8,141,030 $ 8,141,030 $ 8,141,030 $ — $ — Interest-bearing deposits at the Federal Reserve 18,101,300 18,101,300 18,101,300 — — Investment securities available for sale 119,978,944 119,978,944 23,939,063 82,062,024 13,977,857 Mortgage loans to be sold 4,386,210 4,386,210 — 4,386,210 — Net loans 256,724,498 256,555,052 — — 256,555,052 Accrued interest receivable 1,614,002 1,614,002 — 1,614,002 — Financial Liabilities: Demand deposits 328,681,594 328,681,594 — 328,681,594 — Time deposits 43,841,257 43,856,383 — 43,856,383 — Accrued interest payable 51,629 51,629 — 51,629 — |
ACCUMULATED OTHER COMPREHENSI45
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of reclassification in accumulated other comprehensive income | The following table summarizes the components of accumulated other comprehensive income (loss) and changes in those components as of and for the years ended December 31: Available for sale securities Balance December 31, 2014 $ 1,243,022 Change in net unrealized gains (losses) on securities available for sale 26,255 Reclassification adjustment for net securities gains included in net income (423,832 ) Income tax expense (benefit) 147,104 Balance December 31, 2015 992,549 Change in net unrealized gains (losses) on securities available for sale (2,158,236 ) Reclassification adjustment for net securities gains included in net income (380,904 ) Income tax expense 939,482 Balance December 31, 2016 (607,109 ) Change in net unrealized gains (losses) on securities available for sale (347,066 ) Reclassification adjustment for net securities gains included in net income (45,820 ) Income tax expense 116,007 Reclassification of tax effects stranded in other comprehensive income by tax reform 187,692 Balance December 31, 2017 $ (696,296 ) |
Schedule of amounts reclassified from accumulated other comprehensive income | The following table shows the line items in the consolidated Statements of Income affected by amounts reclassified from accumulated other comprehensive income (loss): Year ended December 31, 2017 2016 2015 Gain on sale of investments, net $ 45,820 $ 380,904 $ 423,832 Tax effect (15,578 ) (140,934 ) — Total reclassification, net of tax $ 30,242 $ 239,970 $ 423,832 |
BANK OF SOUTH CAROLINA CORPOR46
BANK OF SOUTH CAROLINA CORPORATION - PARENT COMPANY (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Schedule of condensed financial statements of parent company | The Company’s condensed statements of financial condition as of December 31, 2017 and 2016, and the related condensed statements of income and cash flows for the years ended December 31, 2017, 2016 and 2015, are as follows: Condensed Statements of Financial Condition 2017 2016 Assets Cash $ 947,216 $ 922,595 Investment in wholly-owned bank subsidiary 42,437,503 40,308,166 Other assets 127,274 76,077 Total assets $ 43,511,993 $ 41,306,838 Liabilities and shareholders’equity Other liabilities 747,358 693,864 Shareholders’ equity 42,764,635 40,612,974 Total liabilities and shareholders’ equity $ 43,511,993 $ 41,306,838 Condensed Statements of Income 2017 2016 2015 Interest income $ 484 $ 571 $ 302 Net operating expenses (189,872 ) (177,612 ) (195,636 ) Dividends received from bank 2,685,000 2,340,000 2,475,000 Equity in undistributed earnings of subsidiary 2,406,213 3,084,104 2,604,622 Net income $ 4,901,825 $ 5,247,063 $ 4,884,288 Condensed Statements of Cash Flows 2017 2016 2015 Cash flows from operating activities: Net income $ 4,901,825 $ 5,247,063 $ 4,884,288 Stock-based compensation expense 71,701 76,529 78,987 Equity in undistributed earnings of subsidiary (2,406,213 ) (3,084,104 ) (2,604,622 ) Decrease (increase) in other assets (51,197 ) (55,923 ) 202,043 Increase in other liabilities 151 — — Net cash provided by operating activities 2,516,267 2,183,565 2,560,696 Cash flows from financing activities: Dividends paid (2,832,489 ) (2,613,715 ) (2,380,062 ) Cash in lieu of fractional shares — — (4,778 ) Stock options exercised 340,843 405,749 122,946 Net cash used by financing activities (2,491,646 ) (2,207,966 ) (2,261,894 ) Net increase (decrease) in cash 24,621 (24,401 ) 298,802 Cash at the beginning of the year 922,595 946,996 648,194 Cash at the end of the year $ 947,216 $ 922,595 $ 946,996 Supplemental disclosure for non-cash investing and financing activity Change in dividends payable $ 53,340 $ 54,706 $ 59,178 |
QUARTERLY RESULTS OF OPERATIO47
QUARTERLY RESULTS OF OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly operating results | The tables below represent the quarterly results of operations for the years ended December 31, 2017 and 2016, respectively: 2017 Fourth Third Second First Total interest and fee income $ 4,327,409 $ 4,117,032 $ 3,933,285 $ 3,791,421 Total interest expense 109,934 110,625 106,522 96,782 Net interest income 4,217,475 4,006,407 3,826,763 3,694,639 Provision for loan losses 2,500 20,000 30,000 2,500 Net interest income after provision for loan losses 4,214,975 3,986,407 3,796,763 3,692,139 Other income 538,236 481,882 696,479 551,874 Other expense 2,696,005 2,484,538 2,590,123 2,471,630 Income before income tax expense 2,057,206 1,983,751 1,903,119 1,772,383 Income tax expense 1,208,507 543,098 516,734 546,295 Net income $ 848,699 $ 1,440,653 $ 1,386,385 $ 1,226,088 Basic income per common share $ 0.17 $ 0.29 $ 0.28 $ 0.25 Diluted income per common share $ 0.17 $ 0.29 $ 0.27 $ 0.24 2016 Fourth Third Second First Total interest and fee income $ 3,862,720 $ 4,030,143 $ 3,770,669 $ 3,632,065 Total interest expense 95,146 96,467 92,988 94,139 Net interest income 3,767,574 3,933,676 3,677,681 3,537,926 Provision for loan losses 175,000 210,000 140,000 45,000 Net interest income after provision for loan losses 3,592,574 3,723,676 3,537,681 3,492,926 Other income 638,896 686,586 729,572 806,029 Other expense 2,715,147 2,584,268 2,436,881 2,536,148 Income before income tax expense 1,516,323 1,825,994 1,830,372 1,762,807 Income tax expense 203,444 399,656 518,262 567,071 Net income $ 1,312,879 $ 1,426,338 $ 1,312,110 $ 1,195,736 Basic income per common share $ 0.27 $ 0.28 $ 0.27 $ 0.24 Diluted income per common share $ 0.26 $ 0.28 $ 0.26 $ 0.24 |
SUMMARY OF SIGNIFICANT ACCOUN48
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 12 Months Ended |
Dec. 31, 2017 | |
Equipment [Member] | Lower Range [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 3 years |
Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 15 years |
Bank Buildings [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 40 years |
INVESTMENT SECURITIES AVAILAB49
INVESTMENT SECURITIES AVAILABLE FOR SALE (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 140,606,807 | $ 120,942,615 |
Gross Unrealized Gains | 487,545 | 936,448 |
Gross Unrealized Losses | (1,844,102) | (1,900,119) |
Investment securities available for sale | 139,250,250 | 119,978,944 |
U.S. Treasury Notes [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 35,970,990 | 24,148,295 |
Gross Unrealized Gains | 41,153 | |
Gross Unrealized Losses | (411,145) | (250,385) |
Investment securities available for sale | 35,559,845 | 23,939,063 |
Government-Sponsored Enterprises [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 64,444,315 | 51,737,930 |
Gross Unrealized Gains | 129,482 | |
Gross Unrealized Losses | (887,811) | (833,321) |
Investment securities available for sale | 63,556,504 | 51,034,091 |
Municipal Securties [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 40,191,502 | 45,056,390 |
Gross Unrealized Gains | 487,545 | 765,813 |
Gross Unrealized Losses | (545,146) | (816,413) |
Investment securities available for sale | $ 40,133,901 | $ 45,005,790 |
INVESTMENT SECURITIES AVAILAB50
INVESTMENT SECURITIES AVAILABLE FOR SALE (Details 1) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Amortized Cost | ||
Due in one year or less | $ 11,554,040 | $ 3,343,347 |
Due in one year to five years | 72,622,056 | 82,848,411 |
Due in five years to ten years | 53,290,088 | 29,662,030 |
Due in ten years and over | 3,140,623 | 5,088,827 |
Total | 140,606,807 | 120,942,615 |
Estimated Fair Value | ||
Due in one year or less | 11,546,968 | 3,350,205 |
Due in one year to five years | 72,124,395 | 82,682,901 |
Due in five years to ten years | 52,576,036 | 29,169,228 |
Due in ten years and over | 3,002,851 | 4,776,610 |
Total | $ 139,250,250 | $ 119,978,944 |
INVESTMENT SECURITIES AVAILAB51
INVESTMENT SECURITIES AVAILABLE FOR SALE (Details 2) | 12 Months Ended | |
Dec. 31, 2017USD ($)Number | Dec. 31, 2016USD ($)Number | |
Less than 12 Months | ||
Number of positions | Number | 40 | 66 |
Fair Value | $ 96,650,130 | $ 70,711,744 |
Gross Unrealized Loss | $ (1,008,317) | $ (1,900,119) |
12 months or Longer | ||
Number of positions | Number | 32 | |
Fair value | $ 21,337,625 | |
Gross Unrealized Losses | $ (835,785) | |
Total | ||
Number of positions | Number | 72 | 66 |
Fair value | $ 117,987,755 | $ 70,711,744 |
Gross Unrealized Loss | $ (1,844,102) | $ (1,900,119) |
U.S. Treasury Notes [Member] | ||
Less than 12 Months | ||
Number of positions | Number | 8 | 4 |
Fair Value | $ 35,559,845 | $ 17,968,594 |
Gross Unrealized Loss | $ (411,145) | $ (250,385) |
Total | ||
Number of positions | Number | 8 | 4 |
Fair value | $ 35,559,845 | $ 17,968,594 |
Gross Unrealized Loss | $ (411,145) | $ (250,385) |
Government-Sponsored Enterprises [Member] | ||
Less than 12 Months | ||
Number of positions | Number | 12 | 8 |
Fair Value | $ 53,275,064 | $ 30,136,720 |
Gross Unrealized Loss | $ (462,174) | $ (833,321) |
12 months or Longer | ||
Number of positions | Number | 3 | |
Fair value | $ 10,281,440 | |
Gross Unrealized Losses | $ (425,637) | |
Total | ||
Number of positions | Number | 15 | 8 |
Fair value | $ 63,556,504 | $ 30,136,720 |
Gross Unrealized Loss | $ (887,811) | $ (833,321) |
Municipal Securties [Member] | ||
Less than 12 Months | ||
Number of positions | Number | 20 | 54 |
Fair Value | $ 7,815,221 | $ 22,606,430 |
Gross Unrealized Loss | $ (134,998) | $ (816,413) |
12 months or Longer | ||
Number of positions | Number | 29 | |
Fair value | $ 11,056,185 | |
Gross Unrealized Losses | $ (410,148) | |
Total | ||
Number of positions | Number | 49 | 54 |
Fair value | $ 18,871,406 | $ 22,606,430 |
Gross Unrealized Loss | $ (545,146) | $ (816,413) |
INVESTMENT SECURITIES AVAILAB52
INVESTMENT SECURITIES AVAILABLE FOR SALE (Details 3) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |||
Gross proceeds | $ 20,231,265 | $ 36,218,087 | $ 16,564,118 |
Gross realized gains | 154,692 | 384,963 | $ 423,832 |
Gross realized losses | $ (108,872) | $ (4,059) |
INVESTMENT SECURITIES AVAILAB53
INVESTMENT SECURITIES AVAILABLE FOR SALE (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | ||
Carrying amount of securities pledged to secure deposits and repurchase agreements | $ 49,424,692 | $ 47,619,232 |
Gross realized gains and losses on sale of investments, tax | $ 15,578 | $ 140,934 |
LOANS AND ALLOWANCE FOR LOAN 54
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Loans | $ 270,180,640 | $ 260,576,115 |
Allowance for loan losses | (3,875,398) | (3,851,617) |
Loans, net | 266,305,242 | 256,724,498 |
Commercial [Member] | ||
Loans | 51,723,237 | 52,262,209 |
Commercial Real Estate Construction [Member] | ||
Loans | 2,317,857 | 1,208,901 |
Commercial Real Estate Other [Member] | ||
Loans | 140,186,324 | 122,968,126 |
Consumer Real Estate [Member] | ||
Loans | 70,797,973 | 77,131,816 |
Consumer Other [Member] | ||
Loans | $ 5,155,249 | $ 7,005,063 |
LOANS AND ALLOWANCE FOR LOAN 55
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 1) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Credit risks by category and internally assigned grades | ||
Loans | $ 270,180,640 | $ 260,576,115 |
Pass [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 257,298,511 | 246,423,017 |
Watch [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 8,511,669 | 5,087,351 |
OAEM [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 610,806 | 3,321,493 |
Sub-Standard [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 3,759,654 | 5,744,254 |
Commercial [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 51,723,237 | 52,262,209 |
Commercial [Member] | Pass [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 47,456,205 | 48,289,944 |
Commercial [Member] | Watch [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 2,403,978 | 1,004,957 |
Commercial [Member] | OAEM [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 1,666,048 | |
Commercial [Member] | Sub-Standard [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 1,863,054 | 1,301,260 |
Commercial Real Estate Construction [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 2,317,857 | 1,208,901 |
Commercial Real Estate Construction [Member] | Pass [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 1,936,335 | 798,884 |
Commercial Real Estate Construction [Member] | Watch [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 381,522 | 410,017 |
Commercial Real Estate Other [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 140,186,324 | 122,968,126 |
Commercial Real Estate Other [Member] | Pass [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 134,401,977 | 116,490,396 |
Commercial Real Estate Other [Member] | Watch [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 3,605,621 | 2,625,079 |
Commercial Real Estate Other [Member] | OAEM [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 610,806 | 995,549 |
Commercial Real Estate Other [Member] | Sub-Standard [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 1,567,920 | 2,857,102 |
Consumer Real Estate [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 70,797,973 | 77,131,816 |
Consumer Real Estate [Member] | Pass [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 68,570,298 | 74,115,426 |
Consumer Real Estate [Member] | Watch [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 1,934,802 | 899,306 |
Consumer Real Estate [Member] | OAEM [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 630,957 | |
Consumer Real Estate [Member] | Sub-Standard [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 292,873 | 1,486,127 |
Consumer Other [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 5,155,249 | 7,005,063 |
Consumer Other [Member] | Pass [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 4,933,696 | 6,728,367 |
Consumer Other [Member] | Watch [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 185,746 | 147,992 |
Consumer Other [Member] | OAEM [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | 28,939 | |
Consumer Other [Member] | Sub-Standard [Member] | ||
Credit risks by category and internally assigned grades | ||
Loans | $ 35,807 | $ 99,765 |
LOANS AND ALLOWANCE FOR LOAN 56
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 2) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | $ 892,364 | $ 2,451,238 |
Current | 269,288,276 | 258,124,877 |
Total Loans Receivable | 270,180,640 | 260,576,115 |
Recorded Investment > 90 Days and Accuring Interest | 34,107 | 123,230 |
30-59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 13,833 | 916,763 |
Greater Than 90 Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 685,685 | 1,534,475 |
60-89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 192,846 | |
Commercial [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 196,377 | 438,159 |
Current | 51,526,860 | 51,824,050 |
Total Loans Receivable | 51,723,237 | 52,262,209 |
Commercial [Member] | 30-59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 3,531 | 438,159 |
Commercial [Member] | 60-89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 192,846 | |
Commercial Real Estate Construction [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Current | 2,317,857 | 1,208,901 |
Total Loans Receivable | 2,317,857 | 1,208,901 |
Commercial Real Estate Other [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 651,578 | 1,507,516 |
Current | 139,534,746 | 121,460,610 |
Total Loans Receivable | 140,186,324 | 122,968,126 |
Recorded Investment > 90 Days and Accuring Interest | 89,908 | |
Commercial Real Estate Other [Member] | 30-59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 6,363 | |
Commercial Real Estate Other [Member] | Greater Than 90 Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 651,578 | 1,501,153 |
Consumer Real Estate [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 415,457 | |
Current | 70,797,973 | 76,716,359 |
Total Loans Receivable | 70,797,973 | 77,131,816 |
Consumer Real Estate [Member] | 30-59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 415,457 | |
Consumer Other [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 44,409 | 90,106 |
Current | 5,110,840 | 6,914,957 |
Total Loans Receivable | 5,155,249 | 7,005,063 |
Recorded Investment > 90 Days and Accuring Interest | 34,107 | 33,322 |
Consumer Other [Member] | 30-59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 10,302 | 56,784 |
Consumer Other [Member] | Greater Than 90 Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | $ 34,107 | $ 33,322 |
LOANS AND ALLOWANCE FOR LOAN 57
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 3) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual loans receivable | $ 831,859 | $ 1,741,621 |
Commercial [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual loans receivable | 41,651 | 61,781 |
Commercial Real Estate Other [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual loans receivable | $ 790,208 | 1,678,876 |
Consumer Other [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Non-accrual loans receivable | $ 964 |
LOANS AND ALLOWANCE FOR LOAN 58
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 4) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | |
Activity in the allowance for loan losses by portfolio segment | |||||||||||||
Beginning Balance | $ 3,851,617 | $ 3,417,827 | $ 3,851,617 | $ 3,417,827 | $ 3,334,848 | ||||||||
Charge-offs | (185,449) | (208,295) | (201,071) | ||||||||||
Recoveries | 154,230 | 72,085 | 91,550 | ||||||||||
Provisions | $ 2,500 | $ 20,000 | $ 30,000 | 2,500 | $ 175,000 | $ 210,000 | $ 140,000 | 45,000 | 55,000 | 570,000 | 192,500 | ||
Ending Balance | 3,875,398 | 3,851,617 | 3,875,398 | 3,851,617 | 3,417,827 | ||||||||
Allowance for Loan Losses Ending Balances: | |||||||||||||
Individually evaluated for impairment | $ 1,009,243 | $ 1,507,972 | |||||||||||
Collectively evaluated for impairment | 2,866,155 | 2,343,645 | |||||||||||
Total Allowance for Losses | 3,875,398 | 3,851,617 | 3,851,617 | 3,417,827 | 3,875,398 | 3,851,617 | 3,417,827 | 3,875,398 | 3,851,617 | ||||
Loans Receivable: | |||||||||||||
Individually evaluated for impairment | 3,724,262 | 5,901,784 | |||||||||||
Collectively evaluated for impairment | 266,456,378 | 254,674,331 | |||||||||||
Total Loans Receivable | 270,180,640 | 260,576,115 | |||||||||||
Commercial [Member] | |||||||||||||
Activity in the allowance for loan losses by portfolio segment | |||||||||||||
Beginning Balance | 1,545,188 | 896,854 | 1,545,188 | 896,854 | 1,211,130 | ||||||||
Charge-offs | (33,046) | (99,737) | |||||||||||
Recoveries | 6,000 | 9,164 | |||||||||||
Provisions | (147,600) | 681,380 | (223,703) | ||||||||||
Ending Balance | 1,403,588 | 1,545,188 | 1,403,588 | 1,545,188 | 896,854 | ||||||||
Allowance for Loan Losses Ending Balances: | |||||||||||||
Individually evaluated for impairment | 832,571 | 1,051,219 | |||||||||||
Collectively evaluated for impairment | 571,017 | 493,969 | |||||||||||
Total Allowance for Losses | 1,403,588 | 1,545,188 | 1,545,188 | 896,854 | 1,403,588 | 1,545,188 | 896,854 | 1,403,588 | 1,545,188 | ||||
Loans Receivable: | |||||||||||||
Individually evaluated for impairment | 1,812,461 | 1,301,259 | |||||||||||
Collectively evaluated for impairment | 49,910,776 | 50,960,950 | |||||||||||
Total Loans Receivable | 51,723,237 | 52,262,209 | |||||||||||
Commercial Real Estate Construction [Member] | |||||||||||||
Activity in the allowance for loan losses by portfolio segment | |||||||||||||
Beginning Balance | 51,469 | 59,861 | 51,469 | 59,861 | 42,904 | ||||||||
Provisions | (27,831) | (8,392) | 16,957 | ||||||||||
Ending Balance | 23,638 | 51,469 | 23,638 | 51,469 | 59,861 | ||||||||
Allowance for Loan Losses Ending Balances: | |||||||||||||
Collectively evaluated for impairment | 23,638 | 51,469 | |||||||||||
Total Allowance for Losses | 23,638 | 51,469 | 51,469 | 59,861 | 23,638 | 51,469 | 59,861 | 23,638 | 51,469 | ||||
Loans Receivable: | |||||||||||||
Collectively evaluated for impairment | 2,317,857 | 1,208,901 | |||||||||||
Total Loans Receivable | 2,317,857 | 1,208,901 | |||||||||||
Commercial Real Estate Other [Member] | |||||||||||||
Activity in the allowance for loan losses by portfolio segment | |||||||||||||
Beginning Balance | 1,374,706 | 1,345,094 | 1,374,706 | 1,345,094 | 1,112,387 | ||||||||
Charge-offs | (180,587) | (78,300) | (55,252) | ||||||||||
Recoveries | 87,030 | 65,000 | 53,753 | ||||||||||
Provisions | 268,606 | 42,912 | 234,206 | ||||||||||
Ending Balance | 1,549,755 | 1,374,706 | 1,549,755 | 1,374,706 | 1,345,094 | ||||||||
Allowance for Loan Losses Ending Balances: | |||||||||||||
Individually evaluated for impairment | 99,523 | 324,587 | |||||||||||
Collectively evaluated for impairment | 1,450,232 | 1,050,119 | |||||||||||
Total Allowance for Losses | 1,549,755 | 1,374,706 | 1,374,706 | 1,345,094 | 1,549,755 | 1,374,706 | 1,345,094 | 1,549,755 | 1,374,706 | ||||
Loans Receivable: | |||||||||||||
Individually evaluated for impairment | 1,584,821 | 3,225,351 | |||||||||||
Collectively evaluated for impairment | 138,601,503 | 119,742,775 | |||||||||||
Total Loans Receivable | 140,186,324 | 122,968,126 | |||||||||||
Consumer Real Estate [Member] | |||||||||||||
Activity in the allowance for loan losses by portfolio segment | |||||||||||||
Beginning Balance | 726,391 | 941,470 | 726,391 | 941,470 | 863,351 | ||||||||
Charge-offs | (82,015) | (6,075) | |||||||||||
Recoveries | 60,000 | 6,075 | |||||||||||
Provisions | 10,527 | (133,064) | 78,119 | ||||||||||
Ending Balance | 796,918 | 726,391 | 796,918 | 726,391 | 941,470 | ||||||||
Allowance for Loan Losses Ending Balances: | |||||||||||||
Individually evaluated for impairment | 43,042 | 43,119 | |||||||||||
Collectively evaluated for impairment | 753,876 | 683,272 | |||||||||||
Total Allowance for Losses | 796,918 | 726,391 | 726,391 | 941,470 | 796,918 | 726,391 | 941,470 | 796,918 | 726,391 | ||||
Loans Receivable: | |||||||||||||
Individually evaluated for impairment | 292,873 | 1,286,127 | |||||||||||
Collectively evaluated for impairment | 70,505,100 | 75,845,689 | |||||||||||
Total Loans Receivable | 70,797,973 | 77,131,816 | |||||||||||
Consumer Other [Member] | |||||||||||||
Activity in the allowance for loan losses by portfolio segment | |||||||||||||
Beginning Balance | 153,863 | 174,548 | 153,863 | 174,548 | 105,076 | ||||||||
Charge-offs | (4,862) | (14,934) | (40,007) | ||||||||||
Recoveries | 1,200 | 7,085 | 22,558 | ||||||||||
Provisions | (48,702) | (12,836) | 86,921 | ||||||||||
Ending Balance | 101,499 | 153,863 | 101,499 | 153,863 | 174,548 | ||||||||
Allowance for Loan Losses Ending Balances: | |||||||||||||
Individually evaluated for impairment | 34,107 | 89,047 | |||||||||||
Collectively evaluated for impairment | 67,392 | 64,816 | |||||||||||
Total Allowance for Losses | $ 101,499 | $ 153,863 | $ 153,863 | $ 174,548 | $ 101,499 | $ 153,863 | $ 174,548 | 101,499 | 153,863 | ||||
Loans Receivable: | |||||||||||||
Individually evaluated for impairment | 34,107 | 89,047 | |||||||||||
Collectively evaluated for impairment | 5,121,142 | 6,916,016 | |||||||||||
Total Loans Receivable | $ 5,155,249 | $ 7,005,063 |
LOANS AND ALLOWANCE FOR LOAN 59
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 5) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Impaired and Restructured Loans with no related allowance recorded | |||
Unpaid Principal Balance With no related allowance recorded | $ 1,460,845 | $ 3,667,818 | |
Recorded Investment With no related allowance recorded | 1,460,845 | 3,667,818 | |
Average Recorded Investment With no related allowance recorded | 1,481,864 | 3,777,550 | $ 3,757,429 |
Interest Income Recognized With no related allowance recorded | 66,104 | 115,975 | 191,797 |
Impaired and Restructured Loans with an allowance recorded | |||
Unpaid Principal Balance With an allowance recorded | 2,363,218 | 2,233,966 | |
Recorded Investment With an allowance recorded | 2,263,417 | 2,233,966 | |
Related Allowance | 1,009,243 | 1,507,972 | |
Average Recorded Investment With an allowance recorded | 2,441,495 | 2,273,344 | 2,943,114 |
Interest Income Recognized With an allowance recorded | 115,527 | 73,170 | 134,013 |
Total of Impaired and Restructured Loans | |||
Unpaid Principal balance | 3,824,063 | 5,901,784 | |
Recorded Investment | 3,724,262 | 5,901,784 | |
Average Recorded Investment | 3,923,359 | 6,050,894 | 6,700,543 |
Interest Income Recognized | 181,631 | 189,145 | 325,810 |
Commercial [Member] | |||
Impaired and Restructured Loans with no related allowance recorded | |||
Unpaid Principal Balance With no related allowance recorded | 152,490 | 250,040 | |
Recorded Investment With no related allowance recorded | 152,490 | 250,040 | |
Average Recorded Investment With no related allowance recorded | 169,594 | 267,747 | 750,350 |
Interest Income Recognized With no related allowance recorded | 9,700 | 12,282 | 43,853 |
Impaired and Restructured Loans with an allowance recorded | |||
Unpaid Principal Balance With an allowance recorded | 1,659,971 | 1,051,219 | |
Recorded Investment With an allowance recorded | 1,659,971 | 1,051,219 | |
Related Allowance | 832,571 | 1,051,219 | |
Average Recorded Investment With an allowance recorded | 1,736,896 | 1,087,559 | 1,009,765 |
Interest Income Recognized With an allowance recorded | 103,758 | 49,985 | 49,166 |
Total of Impaired and Restructured Loans | |||
Unpaid Principal balance | 1,812,461 | 1,301,259 | |
Recorded Investment | 1,812,461 | 1,301,259 | |
Average Recorded Investment | 1,906,490 | 1,355,306 | 1,760,115 |
Interest Income Recognized | 113,458 | 62,267 | 93,019 |
Commercial Real Estate Other [Member] | |||
Impaired and Restructured Loans with no related allowance recorded | |||
Unpaid Principal Balance With no related allowance recorded | 1,058,601 | 2,174,770 | |
Recorded Investment With no related allowance recorded | 1,058,601 | 2,174,770 | |
Average Recorded Investment With no related allowance recorded | 1,062,516 | 2,267,288 | 2,500,204 |
Interest Income Recognized With no related allowance recorded | 43,755 | 81,582 | 128,352 |
Impaired and Restructured Loans with an allowance recorded | |||
Unpaid Principal Balance With an allowance recorded | 626,021 | 1,050,581 | |
Recorded Investment With an allowance recorded | 526,220 | 1,050,581 | |
Related Allowance | 99,523 | 324,587 | |
Average Recorded Investment With an allowance recorded | 627,070 | 1,047,685 | 1,066,896 |
Interest Income Recognized With an allowance recorded | 8,148 | 16,138 | 48,945 |
Total of Impaired and Restructured Loans | |||
Unpaid Principal balance | 1,684,622 | 3,225,351 | |
Recorded Investment | 1,584,821 | 3,225,351 | |
Average Recorded Investment | 1,689,586 | 3,314,973 | 3,567,100 |
Interest Income Recognized | 51,903 | 97,720 | 177,297 |
Consumer Real Estate [Member] | |||
Impaired and Restructured Loans with no related allowance recorded | |||
Unpaid Principal Balance With no related allowance recorded | 249,754 | 1,243,008 | |
Recorded Investment With no related allowance recorded | 249,754 | 1,243,008 | |
Average Recorded Investment With no related allowance recorded | 249,754 | 1,242,515 | 450,117 |
Interest Income Recognized With no related allowance recorded | 12,649 | 22,111 | 17,035 |
Impaired and Restructured Loans with an allowance recorded | |||
Unpaid Principal Balance With an allowance recorded | 43,119 | 43,119 | |
Recorded Investment With an allowance recorded | 43,119 | 43,119 | |
Related Allowance | 43,042 | 43,119 | |
Average Recorded Investment With an allowance recorded | 41,938 | 43,155 | 811,014 |
Interest Income Recognized With an allowance recorded | 1,752 | 1,514 | 32,362 |
Total of Impaired and Restructured Loans | |||
Unpaid Principal balance | 292,873 | 1,286,127 | |
Recorded Investment | 292,873 | 1,286,127 | |
Average Recorded Investment | 291,692 | 1,285,670 | 1,261,131 |
Interest Income Recognized | 14,401 | 23,625 | 49,397 |
Consumer Other [Member] | |||
Impaired and Restructured Loans with no related allowance recorded | |||
Average Recorded Investment With no related allowance recorded | 56,758 | ||
Interest Income Recognized With no related allowance recorded | 2,557 | ||
Impaired and Restructured Loans with an allowance recorded | |||
Unpaid Principal Balance With an allowance recorded | 34,107 | 89,047 | |
Recorded Investment With an allowance recorded | 34,107 | 89,047 | |
Related Allowance | 34,107 | 89,047 | |
Average Recorded Investment With an allowance recorded | 35,591 | 94,945 | 55,439 |
Interest Income Recognized With an allowance recorded | 1,869 | 5,533 | 3,540 |
Total of Impaired and Restructured Loans | |||
Unpaid Principal balance | 34,107 | 89,047 | |
Recorded Investment | 34,107 | 89,047 | |
Average Recorded Investment | 35,591 | 94,945 | 112,197 |
Interest Income Recognized | $ 1,869 | $ 5,533 | $ 6,097 |
LOANS AND ALLOWANCE FOR LOAN 60
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details Narrative) | Dec. 31, 2017USD ($)Number | Dec. 31, 2016USD ($)Number | Dec. 31, 2015USD ($) |
Receivables [Abstract] | |||
Deferred loan fees | $ 152,047 | $ 136,446 | |
Loans pledged as collateral to secure funding with the Federal Reserve Bank | $ 113,400,000 | $ 101,200,000 | |
Number of loans over 90 days past due and still accruing | Number | 2 | 2 | |
Restructured loans | $ 33,300 | $ 378,392 | $ 458,268 |
CONCENTRATIONS OF CREDIT RISK61
CONCENTRATIONS OF CREDIT RISK (Details) - Credit Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 100.00% | 100.00% |
Commercial [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 19.14% | 20.06% |
Commercial Real Estate Construction [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 0.86% | 0.46% |
Commercial Real Estate Other [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 51.89% | 47.20% |
Consumer Real Estate [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 26.20% | 29.59% |
Consumer Other [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of Credit Risk | 1.91% | 2.69% |
PREMISES, EQUIPMENT AND LEASE62
PREMISES, EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Premises, equipment and leasehold improvements, gross | $ 6,800,340 | $ 6,659,142 |
Accumulated depreciation | (4,555,815) | (4,362,518) |
Premises, equipment and leasehold improvements, net | 2,244,525 | 2,296,624 |
Bank Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises, equipment and leasehold improvements, gross | 1,824,613 | 1,824,613 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises, equipment and leasehold improvements, gross | 838,075 | 838,075 |
Leasehold Purchase [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises, equipment and leasehold improvements, gross | 30,000 | 30,000 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises, equipment and leasehold improvements, gross | 690,212 | 690,212 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises, equipment and leasehold improvements, gross | 11,754 | 11,754 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Premises, equipment and leasehold improvements, gross | $ 3,405,686 | $ 3,264,488 |
PREMISES, EQUIPMENT AND LEASE63
PREMISES, EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Details 1) | Dec. 31, 2017USD ($) |
Property, Plant and Equipment [Abstract] | |
2,018 | $ 580,028 |
2,019 | 594,713 |
2,020 | 547,650 |
2,021 | 552,922 |
2022 and thereafter | 11,136,228 |
Total | $ 13,411,541 |
PREMISES, EQUIPMENT AND LEASE64
PREMISES, EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization | $ 193,298 | $ 189,188 | $ 196,827 |
Rent expense | 54,720 | 51,690 | 50,184 |
Rental commitments expenses | $ 612,717 | $ 594,567 | $ 591,058 |
OTHER REAL ESTATE OWNED (Detail
OTHER REAL ESTATE OWNED (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of activity in other real estate owned: | ||
Balance, beginning of year | $ 521,943 | $ 620,394 |
Additions - foreclosure | 90,832 | |
Sales | (90,832) | (98,451) |
Write-downs | (86,464) | |
Balance, end of year | $ 435,479 | $ 521,943 |
OTHER REAL ESTATE OWNED (Deta66
OTHER REAL ESTATE OWNED (Details Narrative) | 12 Months Ended | |
Dec. 31, 2017USD ($)Number | Dec. 31, 2016USD ($)Number | |
Real Estate Owned, Disclosure of Detailed Components [Abstract] | ||
(Loss) gain on sale of other real estate | $ | $ (1,477) | $ (13,450) |
Number of properties | Number | 1 | 1 |
DEPOSITS (Details)
DEPOSITS (Details) | Dec. 31, 2017USD ($) |
Maturities of certificates of deposits | |
2,018 | $ 34,585,073 |
2,019 | 5,891,415 |
2,020 | 398,505 |
2,021 | 577,407 |
2022 and thereafter | 468,016 |
Certificates of deposit | $ 41,920,416 |
DEPOSITS (Details Narrative)
DEPOSITS (Details Narrative) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Deposits: | ||
Deposits with deficit balance reclassified as other loans | $ 66,479 | $ 24,963 |
Time deposits over $250,000 | $ 18,624,924 | $ 17,822,136 |
SHORT-TERM BORROWINGS (Details
SHORT-TERM BORROWINGS (Details Narrative) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Line of Credit Facility [Line Items] | ||
Unused balance of line of credit | $ 23,000,000 | $ 21,000,000 |
Federal Reserve Bank Advances [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of credit maximum borrowing capacity | $ 88,200,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||||||||
Income tax expense | $ 1,208,507 | $ 543,098 | $ 516,734 | $ 546,295 | $ 203,444 | $ 399,656 | $ 518,262 | $ 567,071 | $ 2,814,634 | $ 1,688,433 | $ 2,287,248 |
Unrealized gains (losses) on securities available for sale presented in accumulated other comprehensive income (loss) | (116,007) | (939,482) | (147,104) | ||||||||
Total | $ 2,698,627 | $ 748,951 | $ 2,140,144 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current income tax | |||||||||||
Federal | $ 2,538,272 | $ 2,438,687 | $ 2,102,154 | ||||||||
State | 224,083 | ||||||||||
Total current tax expense | 2,538,272 | 2,438,687 | 2,326,237 | ||||||||
Deferred income tax (benefit) expense | 276,362 | (750,254) | (38,989) | ||||||||
Total income tax expense | $ 1,208,507 | $ 543,098 | $ 516,734 | $ 546,295 | $ 203,444 | $ 399,656 | $ 518,262 | $ 567,071 | $ 2,814,634 | $ 1,688,433 | $ 2,287,248 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||||||||
Computed "expected" tax expense | $ 2,623,595 | $ 2,358,069 | $ 2,438,322 | ||||||||
Increase (reduction) in income taxes resulting from: | |||||||||||
Tax rate change impact | 666,674 | ||||||||||
Amortization of credit and gain | 163,411 | 163,411 | |||||||||
Stock based compensation | 24,378 | 26,012 | 26,856 | ||||||||
Valuation allowance | 16,952 | 4,314 | 11,093 | ||||||||
Other | (4,768) | (203,854) | 5,052 | ||||||||
State income tax, net of federal benefit | (329,412) | (319,525) | 147,895 | ||||||||
Tax exempt interest income | (346,196) | (339,994) | (341,970) | ||||||||
Income tax expense | $ 1,208,507 | $ 543,098 | $ 516,734 | $ 546,295 | $ 203,444 | $ 399,656 | $ 518,262 | $ 567,071 | $ 2,814,634 | $ 1,688,433 | $ 2,287,248 |
INCOME TAXES (Details 3)
INCOME TAXES (Details 3) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Allowance for loan losses | $ 782,714 | $ 1,248,551 |
State credit carryforward | 488,052 | 236,536 |
Unrealized loss on securities available for sale | 284,877 | 356,562 |
Passthrough income | 70,603 | |
State net operating loss carryforward | 67,253 | 50,301 |
Nonaccrual interest | 19,209 | |
OREO | 18,157 | |
Other | 5,214 | 45,661 |
Total gross deferred tax assets | 1,736,079 | 1,937,611 |
Valuation allowance | (67,253) | (50,301) |
Total gross deferred tax assets, net of valuation allowance | 1,668,826 | 1,887,310 |
Deferred tax liabilities: | ||
Prepaid expenses | (210) | (2,779) |
Deferred loan fees | (31,930) | (46,392) |
Fixed assets, principally due to differences in depreciation | (36,424) | (52,236) |
Other | (53,591) | (78,877) |
Total gross deferred tax liabilities | (122,155) | (180,284) |
Net deferred tax assets | $ 1,546,671 | $ 1,707,026 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
U.S. Federal statutory rate | 34.00% | ||
Amortization of state tax credit | $ 306,105 | $ 325,000 | |
Valuation allowance | 67,253 | 50,301 | |
Increase (decrease) in deferred tax assets from remeasurement | 666,674 | ||
Subsequent Fiscal Years [Member] | |||
U.S. Federal statutory rate | 21.00% | ||
State Net Operating Loss [Member] | |||
Valuation allowance | $ 67,253 | $ 50,301 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Standby letters of credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Undiscounted future payments related to standby letters of credit | $ 1,219,644 | $ 793,992 |
Commitments to extend credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments to extend credit | $ 92,869,285 | $ 81,234,269 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transactions [Abstract] | ||
Balance at beginning of year | $ 3,944,140 | $ 6,523,137 |
New loans or advances | 2,879,435 | 4,833,545 |
Repayments | (2,253,795) | (7,412,542) |
Balance at end of year | $ 4,569,780 | $ 3,944,140 |
RELATED PARTY TRANSACTIONS (D77
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Related Party Transactions [Abstract] | ||
Deposits held by related parties | $ 7,180,958 | $ 4,376,563 |
OTHER EXPENSE (Details)
OTHER EXPENSE (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Income and Expenses [Abstract] | |||
Advertising and business development | $ 10,844 | $ 16,159 | $ 16,662 |
Supplies | 75,965 | 94,006 | 111,604 |
Telephone and postage | 207,526 | 194,853 | 188,052 |
Insurance | 44,613 | 42,192 | 42,504 |
Professional fees | 454,882 | 431,424 | 423,319 |
Data processing services | 585,497 | 594,550 | 518,788 |
State and FDIC insurance and fees | 165,280 | 242,926 | 228,627 |
Courier service | 82,907 | 96,823 | 95,877 |
Amortization of state tax credit | 306,105 | 325,000 | |
Other | 584,118 | 601,843 | 542,949 |
Total other expense | $ 2,517,737 | $ 2,639,776 | $ 2,168,382 |
STOCK INCENTIVE PLAN (Details)
STOCK INCENTIVE PLAN (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Risk free interest rate | 2.43% | 2.33% | |
Expected life | 7 years 6 months | 10 years | 10 years |
Expected stock price volatility | 34.20% | 27.95% | 19.62% |
Dividend Yield | 4.00% | 3.47% | 4.13% |
Maximum [Member] | |||
Risk free interest rate | 2.33% | ||
Lower Range [Member] | |||
Risk free interest rate | 1.96% |
STOCK INCENTIVE PLAN (Details 1
STOCK INCENTIVE PLAN (Details 1) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Options | |||
Options outstanding, beginning | 140,905 | 183,302 | 176,181 |
Options granted | 9,250 | 10,000 | 23,650 |
Options exercised | (33,140) | (39,539) | (9,378) |
Options forfeited | (11,300) | (12,858) | (7,151) |
Options outstanding, ending | 105,715 | 140,905 | 183,302 |
Options exercisable | 28,813 | 12,620 | 17,457 |
Weighted Average Exercise Price | |||
Options outstanding, beginning | $ 11.06 | $ 10.81 | $ 10.48 |
Options granted | 21.56 | 15.99 | 14.44 |
Options forfeited | 10.28 | 10.26 | 13.11 |
Options exercised | 15.42 | 13.84 | 11.64 |
Options outstanding, ending | 11.87 | 11.06 | 10.81 |
Options exercisable | $ 9.74 | $ 11.50 | $ 12.95 |
STOCK INCENTIVE PLAN (Details 2
STOCK INCENTIVE PLAN (Details 2) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 11.87 | ||
Options outstanding, ending | 105,715 | ||
Options outstanding, weighted average remaining contractual life | 9 years 10 months 24 days | ||
Options exercisable, weighted average exercise price | $ 9.74 | $ 11.50 | $ 12.95 |
Options outstanding, intrinsic value | $ 854,533 | ||
Options exercisable | 28,813 | ||
Options exercisable, intrinsic value | $ 286,869 | ||
Exercise Price 1 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 9.47 | ||
Options outstanding, ending | 51,890 | ||
Options outstanding, weighted average remaining contractual life | 3 years 6 months | ||
Options exercisable, weighted average exercise price | $ 9.47 | ||
Options outstanding, intrinsic value | $ 530,554 | ||
Options exercisable | 20,756 | ||
Options exercisable, intrinsic value | $ 212,221 | ||
Exercise Price 2 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 9.79 | ||
Options outstanding, ending | 5,280 | ||
Options outstanding, weighted average remaining contractual life | 2 years 8 months 12 days | ||
Options exercisable, weighted average exercise price | $ 9.79 | ||
Options outstanding, intrinsic value | $ 52,296 | ||
Options exercisable | 3,168 | ||
Options exercisable, intrinsic value | $ 31,378 | ||
Exercise Price 3 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 10.10 | ||
Options outstanding, ending | 7,645 | ||
Options outstanding, weighted average remaining contractual life | 4 years 7 months 6 days | ||
Options exercisable, weighted average exercise price | $ 10.10 | ||
Options outstanding, intrinsic value | $ 73,351 | ||
Options exercisable | 1,529 | ||
Options exercisable, intrinsic value | $ 14,670 | ||
Exercise Price 4 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 10.61 | ||
Options outstanding, ending | 3,300 | ||
Options outstanding, weighted average remaining contractual life | 3 years 2 months 12 days | ||
Options exercisable, weighted average exercise price | $ 10.61 | ||
Options outstanding, intrinsic value | $ 29,979 | ||
Options exercisable | 1,320 | ||
Options exercisable, intrinsic value | $ 11,992 | ||
Exercise Price 5 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 10.91 | ||
Options outstanding, ending | 2,200 | ||
Options outstanding, weighted average remaining contractual life | 4 years 10 months 24 days | ||
Options exercisable, weighted average exercise price | $ 10.91 | ||
Options outstanding, intrinsic value | $ 19,326 | ||
Options exercisable | 440 | ||
Options exercisable, intrinsic value | $ 3,865 | ||
Exercise Price 6 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 11.73 | ||
Options outstanding, ending | 1,600 | ||
Options outstanding, weighted average remaining contractual life | 2 months 12 days | ||
Options exercisable, weighted average exercise price | $ 11.73 | ||
Options outstanding, intrinsic value | $ 12,743 | ||
Options exercisable | 1,600 | ||
Options exercisable, intrinsic value | $ 12,743 | ||
Exercise Price 7 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 13.49 | ||
Options outstanding, ending | 4,950 | ||
Options outstanding, weighted average remaining contractual life | 6 years 7 months 6 days | ||
Options exercisable, weighted average exercise price | $ 13.49 | ||
Options outstanding, intrinsic value | $ 30,713 | ||
Exercise Price 8 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 13.64 | ||
Options outstanding, ending | 2,200 | ||
Options outstanding, weighted average remaining contractual life | 5 years 10 months 24 days | ||
Options exercisable, weighted average exercise price | $ 13.64 | ||
Options outstanding, intrinsic value | $ 13,320 | ||
Exercise Price 9 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 14.35 | ||
Options outstanding, ending | 12,925 | ||
Options outstanding, weighted average remaining contractual life | 7 years 6 months | ||
Options exercisable, weighted average exercise price | $ 14.35 | ||
Options outstanding, intrinsic value | $ 69,079 | ||
Exercise Price 10 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 14.98 | ||
Options outstanding, ending | 3,300 | ||
Options outstanding, weighted average remaining contractual life | 7 years 7 months 6 days | ||
Options exercisable, weighted average exercise price | $ 14.98 | ||
Options outstanding, intrinsic value | $ 15,558 | ||
Exercise Price 11 Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 15.99 | ||
Options outstanding, ending | 5,000 | ||
Options outstanding, weighted average remaining contractual life | 8 years 3 months 18 days | ||
Options exercisable, weighted average exercise price | $ 15.99 | ||
Options outstanding, intrinsic value | $ 18,523 | ||
Exercise Price 12 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 20.90 | ||
Options outstanding, ending | 2,500 | ||
Options outstanding, weighted average remaining contractual life | 9 years 10 months 24 days | ||
Options exercisable, weighted average exercise price | $ 20.90 | ||
Options outstanding, intrinsic value | $ (3,014) | ||
Exercise Price 13 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options outstanding, ending | $ 21.80 | ||
Options outstanding, ending | 3,750 | ||
Options outstanding, weighted average remaining contractual life | 21 years 9 months 18 days | ||
Options exercisable, weighted average exercise price | $ 21.80 | ||
Options outstanding, intrinsic value | $ (7,895) |
STOCK INCENTIVE PLAN (Details N
STOCK INCENTIVE PLAN (Details Narrative) - USD ($) | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2010 | Dec. 31, 2014 | Dec. 31, 1998 | |
Distribution Made to Limited Liability Company (LLC) Member [Line Items] | ||||||
Dividend rate | 4.00% | 3.47% | 4.13% | |||
Total outstanding shares under plan | 105,715 | 140,905 | 183,302 | 176,181 | ||
Number of options exercisable under plan | 28,813 | 12,620 | 17,457 | |||
Intrinsic value of options exercised | $ 311,836 | $ 273,979 | $ 14,272 | |||
Stock-based compensation expense | 71,701 | $ 76,529 | $ 78,987 | |||
Unrecognized compensation cost | $ 284,123 | |||||
Period for unrecognized compensation cost to be recognized | 2 years 9 months 22 days | |||||
1998 Stock Incentive Plan [Member] | ||||||
Distribution Made to Limited Liability Company (LLC) Member [Line Items] | ||||||
Number of share authorized under stock incentive plan | 180,000 | |||||
Number of adjusted shares authorized | 329,422 | |||||
Total outstanding shares under plan | 1,600 | |||||
Number of options exercisable under plan | 1,600 | |||||
Stock dividends (percent) | 10.00% | |||||
Stock distribution (percent) | 25.00% | |||||
Stock dividend (percent) | 25.00% | |||||
2010 Stock Incentive Plan [Member] | ||||||
Distribution Made to Limited Liability Company (LLC) Member [Line Items] | ||||||
Number of share authorized under stock incentive plan | 300,000 | |||||
Number of adjusted shares authorized | 330,000 | |||||
Percent of options vesting in five years | 20.00% | |||||
Percentage of options vesting each following year | 20.00% | |||||
Stock dividends (percent) | 10.00% |
EMPLOYEE STOCK OWNERSHIP PLAN83
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2017USD ($)Numbershares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
ESOP Award, Tranche One [Member] | |||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||
Vesting rights by percent | 0.00% | ||
ESOP Award, Tranche Two [Member] | |||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||
Vesting rights by percent | 25.00% | ||
ESOP Award, Tranche Three [Member] | |||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||
Vesting rights by percent | 50.00% | ||
ESOP Award, Tranche Four [Member] | |||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||
Vesting rights by percent | 75.00% | ||
ESOP Award, Tranche Five [Member] | |||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||
Vesting rights by percent | 100.00% | ||
Employee Stock Ownership Plan (ESOP), Plan [Member] | |||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||
Stock-based compensation expense | $ | $ 375,000 | $ 345,000 | $ 315,000 |
Number of common shares the plan currently owns | shares | 286,013 | ||
Minimum age requirement | 21 | ||
Hours of service | 1,000 |
DIVIDENDS (Details Narrative)
DIVIDENDS (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Dividends [Abstract] | |||
Dividends paid to parent by subsidiaries | $ 2,685,000 | $ 2,340,000 | $ 2,475,000 |
INCOME PER COMMON SHARE (Detail
INCOME PER COMMON SHARE (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||||||||||
Net Income | $ 848,699 | $ 1,440,653 | $ 1,386,385 | $ 1,226,088 | $ 1,312,879 | $ 1,426,338 | $ 1,312,110 | $ 1,195,736 | $ 4,901,825 | $ 5,247,063 | $ 4,884,288 |
Weighted average shares outstanding - basic | 4,973,637 | 4,935,349 | 4,912,499 | ||||||||
Effect of dilutive shares | 84,715 | 118,765 | 154,586 | ||||||||
Weighted average shares outstanding - diluted | 5,058,352 | 5,054,114 | 5,067,085 | ||||||||
Earnings per share - basic | $ 0.17 | $ 0.29 | $ 0.28 | $ 0.25 | $ 0.27 | $ 0.28 | $ 0.27 | $ 0.24 | $ 0.99 | $ 1.06 | $ 0.99 |
Earnings per share - diluted | $ 0.17 | $ 0.29 | $ 0.27 | $ 0.24 | $ 0.26 | $ 0.28 | $ 0.26 | $ 0.24 | $ 0.97 | $ 1.04 | $ 0.96 |
REGULATORY CAPITAL REQUIREMEN86
REGULATORY CAPITAL REQUIREMENTS (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Total Capital to risk-weighted assets: | ||
Total Capital | $ 47,986,000 | $ 44,850,000 |
Total Capital (to risk-weighted assets) ratio | 15.97% | 15.46% |
Minimum amount of capital for adequacy purposes | $ 23,213,000 | $ 23,213,000 |
Minimum amount of capital for adequacy purposes, ratio | 8.00% | 8.00% |
Tier 1 capital to risk-weighted assets: | ||
Tier 1 Capital | $ 44,253,000 | $ 41,220,000 |
Tier 1 Capital (to risk-weighted assets) ratio | 14.73% | 14.21% |
Minimum amount of Tier 1 Capital for adequacy purposes | $ 17,410,000 | $ 17,410,000 |
Minimum amount of Tier 1 Capital for adequacy purposes, ratio | 6.00% | 6.00% |
Tier 1 capital to average assets: | ||
Tier 1 Capital | $ 44,253,000 | $ 41,220,000 |
Tier 1 Capital (to average assets) ratio | 10.01% | 9.85% |
Minimum amount of Tier 1 Capital for adequacy purposes | $ 16,738,000 | $ 16,738,000 |
Minimum amount of Tier 1 Capital for adequacy purposes, ratio | 4.00% | 4.00% |
Common equity Tier 1 capital: | ||
Tier 1 Capital | $ 44,253,000 | $ 41,220,000 |
Tier 1 Capital (to tangible assets) ratio | 14.73% | 14.21% |
Tier 1 Capital for adequacy purposes | $ 13,058,000 | $ 13,058,000 |
Tier 1 Capital for adequacy purposes, ratio | 4.50% | 4.50% |
Bank [Member] | ||
Total Capital to risk-weighted assets: | ||
Total Capital | $ 47,100,000 | $ 44,544,000 |
Total Capital (to risk-weighted assets) ratio | 15.69% | 15.36% |
Minimum amount of capital for adequacy purposes | $ 2,402,000 | $ 23,207,000 |
Minimum amount of capital for adequacy purposes, ratio | 8.00% | 8.00% |
Minimum Capital required to be well-capitalized | $ 30,025,000 | $ 29,009,000 |
Minimum Capital required to be well-capitalized, ratio | 10.00% | 10.00% |
Tier 1 capital to risk-weighted assets: | ||
Tier 1 Capital | $ 43,344,000 | $ 40,915,000 |
Tier 1 Capital (to risk-weighted assets) ratio | 14.44% | 14.10% |
Minimum amount of Tier 1 Capital for adequacy purposes | $ 18,015,000 | $ 17,405,000 |
Minimum amount of Tier 1 Capital for adequacy purposes, ratio | 6.00% | 6.00% |
Minimum Tier 1 Capital required to be well-capitalized | $ 24,020,000 | $ 23,207,000 |
Minimum Tier 1 Capital required to be well-capitalized, ratio | 8.00% | 8.00% |
Tier 1 capital to average assets: | ||
Tier 1 Capital | $ 43,344,000 | $ 40,915,000 |
Tier 1 Capital (to average assets) ratio | 9.82% | 9.78% |
Minimum amount of Tier 1 Capital for adequacy purposes | $ 17,661,000 | $ 16,735,000 |
Minimum amount of Tier 1 Capital for adequacy purposes, ratio | 4.00% | 4.00% |
Minimum Tier 1 Capital required to be well-capitalized | $ 22,077,000 | $ 20,919,000 |
Minimum Tier 1 Capital required to be well-capitalized, ratio | 5.00% | 5.00% |
Common equity Tier 1 capital: | ||
Tier 1 Capital | $ 43,344,000 | $ 40,915,000 |
Tier 1 Capital (to tangible assets) ratio | 14.44% | 14.10% |
Tier 1 Capital for adequacy purposes | $ 13,511,000 | $ 13,054,000 |
Tier 1 Capital for adequacy purposes, ratio | 4.50% | 4.50% |
Tier 1 Capital required to be well-capitalized | $ 19,516,000 | $ 18,856,000 |
Tier 1 Capital required to be well-capitalized, ratio | 6.50% | 6.50% |
REGULATORY CAPITAL REQUIREMEN87
REGULATORY CAPITAL REQUIREMENTS (Details Narrative) | Dec. 31, 2017 | Dec. 31, 2015 |
Regulatory Capital Requirements [Abstract] | ||
Common equity tier 1 capital conservation buffer (risk-weighted assets) | 1.25% | 2.50% |
Disclosures Regarding Fair Va88
Disclosures Regarding Fair Value of Financial Instruments (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Investment securities available for sale | $ 139,250,250 | $ 119,978,944 |
U.S. Treasury Notes [Member] | ||
Investment securities available for sale | 35,559,845 | 23,939,063 |
Government-Sponsored Enterprises [Member] | ||
Investment securities available for sale | 63,556,504 | 51,034,091 |
Municipal Securities [Member] | ||
Investment securities available for sale | 40,133,901 | 45,005,790 |
Quoted Prices in Active Markets (Level 1) [Member] | ||
Investment securities available for sale | 35,559,845 | 23,939,063 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Investment securities available for sale | 92,231,516 | 82,062,024 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Investment securities available for sale | 11,458,889 | 13,977,857 |
Recurring Basis [Member] | ||
Total fair value | 139,250,250 | 119,978,944 |
Recurring Basis [Member] | U.S. Treasury Notes [Member] | ||
Investment securities available for sale | 35,559,845 | 23,939,063 |
Recurring Basis [Member] | Government-Sponsored Enterprises [Member] | ||
Investment securities available for sale | 63,556,504 | 51,034,091 |
Recurring Basis [Member] | Municipal Securities [Member] | ||
Investment securities available for sale | 40,133,901 | 45,005,790 |
Recurring Basis [Member] | Quoted Prices in Active Markets (Level 1) [Member] | ||
Total fair value | 35,559,845 | 23,939,063 |
Recurring Basis [Member] | Quoted Prices in Active Markets (Level 1) [Member] | U.S. Treasury Notes [Member] | ||
Investment securities available for sale | 35,559,845 | 23,939,063 |
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Total fair value | 92,231,516 | 82,062,024 |
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Government-Sponsored Enterprises [Member] | ||
Investment securities available for sale | 63,556,504 | 51,034,091 |
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Municipal Securities [Member] | ||
Investment securities available for sale | 28,675,012 | 31,027,933 |
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Total fair value | 11,458,889 | 13,977,857 |
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Municipal Securities [Member] | ||
Investment securities available for sale | $ 11,458,889 | $ 13,977,857 |
Disclosures Regarding Fair Va89
Disclosures Regarding Fair Value of Financial Instruments (Details 1) - Significant Unobservable Inputs (Level 3) [Member] - Municipal Securities [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Beginning Balance | $ 13,977,857 | $ 5,217,678 |
Included in other comprehensive income | 137,751 | (818,821) |
Purchases, issuances and settlements, net of maturities | (2,656,719) | 9,579,000 |
Ending balance | $ 11,458,889 | $ 13,977,857 |
Disclosures Regarding Fair Va90
Disclosures Regarding Fair Value of Financial Instruments (Details 2) - Nonrecurring Basis [Member] - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Impaired loans fair value | $ 1,735,051 | $ 4,143,772 |
Other real estate owned fair value | 435,479 | 521,943 |
Mortgage loans to be sold | 2,093,723 | 4,386,210 |
Total fair value | 4,264,253 | 9,051,925 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Mortgage loans to be sold | 2,093,723 | 4,386,210 |
Total fair value | 2,093,723 | 4,386,210 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Impaired loans fair value | 1,735,051 | 4,143,772 |
Other real estate owned fair value | 435,479 | 521,943 |
Total fair value | $ 2,170,530 | $ 4,665,715 |
Disclosures Regarding Fair Va91
Disclosures Regarding Fair Value of Financial Instruments (Details 3) | 12 Months Ended |
Dec. 31, 2017 | |
Other Real Estate Owned [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Valuation technique | Appraisal Value/ Comparison Sales/Other Estimates |
Unobservable Input | Appraisals and/or Sales of Comparable Properties |
Description of general range of inputs | Appraisals Discounted 10% to 20% for Sales Commissions and Other Holding Costs |
Other Real Estate Owned [Member] | Appraisals and/or Sales [Member] | Lower Range [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Discount rate (in percent) | 10.00% |
Other Real Estate Owned [Member] | Appraisals and/or Sales [Member] | Maximum [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Discount rate (in percent) | 20.00% |
Impaired Loans [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Valuation technique | Appraisal Value/ Comparison Sales/Other Estimates |
Unobservable Input | Appraisals and/or Sales of Comparable Properties |
Description of general range of inputs | Appraisals Discounted 10% to 20% for Sales Commissions and Other Holding Costs |
Impaired Loans [Member] | Collateral Discounts [Member] | Lower Range [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Discount rate (in percent) | 10.00% |
Impaired Loans [Member] | Collateral Discounts [Member] | Maximum [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Discount rate (in percent) | 20.00% |
Disclosures Regarding Fair Va92
Disclosures Regarding Fair Value of Financial Instruments (Details 4) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Financial Assets: | ||
Investment securities available for sale | $ 139,250,250 | $ 119,978,944 |
Quoted Prices in Active Markets (Level 1) [Member] | ||
Financial Assets: | ||
Cash and due from banks | 8,486,025 | 8,141,030 |
Interest-bearing deposits at the Federal Reserve | 24,034,194 | 18,101,300 |
Investment securities available for sale | 35,559,845 | 23,939,063 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Financial Assets: | ||
Investment securities available for sale | 92,231,516 | 82,062,024 |
Mortgage loans to be sold | 2,093,723 | 4,386,210 |
Accrued interest receivable | 1,720,920 | 1,614,002 |
Financial Liabilities: | ||
Demand deposits | 360,967,884 | 328,681,594 |
Time deposits | 40,722,870 | 43,856,383 |
Accrued interest payable | 96,190 | 51,629 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Financial Assets: | ||
Investment securities available for sale | 11,458,889 | 13,977,857 |
Net loans | 265,277,204 | 256,555,052 |
Carrying Amount [Member] | ||
Financial Assets: | ||
Cash and due from banks | 8,486,025 | 8,141,030 |
Interest-bearing deposits at the Federal Reserve | 24,034,194 | 18,101,300 |
Investment securities available for sale | 139,250,250 | 119,978,944 |
Mortgage loans to be sold | 2,093,723 | 4,386,210 |
Net loans | 266,305,242 | 256,724,498 |
Accrued interest receivable | 1,720,920 | 1,614,002 |
Financial Liabilities: | ||
Demand deposits | 360,967,884 | 328,681,594 |
Time deposits | 41,920,416 | 43,841,257 |
Accrued interest payable | 96,190 | 51,629 |
Estimated Fair Value [Member] | ||
Financial Assets: | ||
Cash and due from banks | 8,486,025 | 8,141,030 |
Interest-bearing deposits at the Federal Reserve | 24,034,194 | 18,101,300 |
Investment securities available for sale | 139,250,250 | 119,978,944 |
Mortgage loans to be sold | 2,093,723 | 4,386,210 |
Net loans | 265,277,204 | 256,555,052 |
Accrued interest receivable | 1,720,920 | 1,614,002 |
Financial Liabilities: | ||
Demand deposits | 360,967,884 | 328,681,594 |
Time deposits | 40,722,870 | 43,856,383 |
Accrued interest payable | $ 96,190 | $ 51,629 |
ACCUMULATED OTHER COMPREHENSI93
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity [Abstract] | |||
Available for sale securities, beginning | $ (607,109) | $ 992,549 | $ 1,243,022 |
Change in net unrealized gains (losses) on securities available for sale | (347,066) | (2,158,236) | 26,255 |
Reclassification adjustment for net securities gains included in net income | (45,820) | (380,904) | (423,832) |
Income tax expense (benefit) | 116,007 | 939,482 | 147,104 |
Reclassification of tax effects stranded in other comprehensive income by tax reform | 187,692 | ||
Available for sale securities, ending | $ (696,296) | $ (607,109) | $ 992,549 |
ACCUMULATED OTHER COMPREHENSI94
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Gain on sale of investments, net | $ 45,820 | $ 380,904 | $ 423,832 | ||||||||
Income tax expense | $ (1,208,507) | $ (543,098) | $ (516,734) | $ (546,295) | $ (203,444) | $ (399,656) | $ (518,262) | $ (567,071) | (2,814,634) | (1,688,433) | (2,287,248) |
Reclassification out of Accumulated Other Comprehensive Income [Member] | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Gain on sale of investments, net | 45,820 | 380,904 | 423,832 | ||||||||
Income tax expense | (15,578) | (140,934) | |||||||||
Total reclassification, net of tax | $ 30,242 | $ 239,970 | $ 423,832 |
BANK OF SOUTH CAROLINA CORPOR95
BANK OF SOUTH CAROLINA CORPORATION - PARENT COMPANY (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Assets: | ||||
Other assets | $ 1,996,140 | $ 2,185,085 | ||
Total assets | 446,566,498 | 413,949,636 | ||
Liabilities and Shareholders' Equity: | ||||
Shareholders' equity | 42,764,635 | 40,612,974 | $ 39,151,712 | $ 36,759,982 |
Total liabilities and shareholders' equity | 446,566,498 | 413,949,636 | ||
Bank of South Carolina Corporation - Parent [Member] | ||||
Assets: | ||||
Cash | 947,216 | 922,595 | $ 946,996 | $ 648,194 |
Investment in wholly-owned subsidiary | 42,437,503 | 40,308,166 | ||
Other assets | 127,274 | 76,077 | ||
Total assets | 43,511,993 | 41,306,838 | ||
Liabilities and Shareholders' Equity: | ||||
Other liabilities | 747,358 | 693,864 | ||
Shareholders' equity | 42,764,635 | 40,612,974 | ||
Total liabilities and shareholders' equity | $ 43,511,993 | $ 41,306,838 |
BANK OF SOUTH CAROLINA CORPOR96
BANK OF SOUTH CAROLINA CORPORATION - PARENT COMPANY (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Condensed Statements of Operations | |||||||||||
Interest Income | $ 4,217,475 | $ 4,006,407 | $ 3,826,763 | $ 3,694,639 | $ 3,767,574 | $ 3,933,676 | $ 3,677,681 | $ 3,537,926 | $ 15,745,284 | $ 14,916,857 | $ 13,827,553 |
Net income | $ 848,699 | $ 1,440,653 | $ 1,386,385 | $ 1,226,088 | $ 1,312,879 | $ 1,426,338 | $ 1,312,110 | $ 1,195,736 | 4,901,825 | 5,247,063 | 4,884,288 |
Bank of South Carolina Corporation - Parent [Member] | |||||||||||
Condensed Statements of Operations | |||||||||||
Interest Income | 484 | 571 | 302 | ||||||||
Net operating expenses | (189,872) | (177,612) | (195,636) | ||||||||
Dividends received from bank | 2,685,000 | 2,340,000 | 2,475,000 | ||||||||
Equity in undistributed earnings of subsidiary | 2,406,213 | 3,084,104 | 2,604,622 | ||||||||
Net income | $ 4,901,825 | $ 5,247,063 | $ 4,884,288 |
BANK OF SOUTH CAROLINA CORPOR97
BANK OF SOUTH CAROLINA CORPORATION - PARENT COMPANY (Details 2) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||||||||||
Net income | $ 848,699 | $ 1,440,653 | $ 1,386,385 | $ 1,226,088 | $ 1,312,879 | $ 1,426,338 | $ 1,312,110 | $ 1,195,736 | $ 4,901,825 | $ 5,247,063 | $ 4,884,288 |
Stock-based compensation expense | 71,701 | 76,529 | 78,987 | ||||||||
Net cash provided by operating activities | 8,181,957 | 6,042,824 | 7,115,612 | ||||||||
Cash flows from financing activities: | |||||||||||
Dividends paid | (2,832,489) | (2,613,715) | (2,380,062) | ||||||||
Cash paid for fractional shares | (4,778) | ||||||||||
Stock options exercised | 340,843 | 405,749 | 122,946 | ||||||||
Net cash used by financing activities | 27,873,803 | 11,596,273 | 27,057,010 | ||||||||
Supplemental disclosure for non-cash investing and financing activity: | |||||||||||
Change in dividends payable | 53,340 | 54,706 | 59,178 | ||||||||
Bank of South Carolina Corporation - Parent [Member] | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | 4,901,825 | 5,247,063 | 4,884,288 | ||||||||
Stock-based compensation expense | 71,701 | 76,529 | 78,987 | ||||||||
Equity in undistributed earnings of subsidiary | (2,406,213) | (3,084,104) | (2,604,622) | ||||||||
Decrease (increase) in other assets | (51,197) | (55,923) | 202,043 | ||||||||
Increase in other liabilities | 151 | ||||||||||
Net cash provided by operating activities | 2,516,267 | 2,183,565 | 2,560,696 | ||||||||
Cash flows from financing activities: | |||||||||||
Dividends paid | (2,832,489) | (2,613,715) | (2,380,062) | ||||||||
Cash paid for fractional shares | (4,778) | ||||||||||
Stock options exercised | 340,843 | 405,749 | 122,946 | ||||||||
Net cash used by financing activities | (2,491,646) | (2,207,966) | (2,261,894) | ||||||||
Net increase (decrease) in cash | 24,621 | (24,401) | 298,802 | ||||||||
Cash at the beginning of the year | $ 922,595 | $ 946,996 | 922,595 | 946,996 | 648,194 | ||||||
Cash at the end of the year | $ 947,216 | $ 922,595 | 947,216 | 922,595 | 946,996 | ||||||
Supplemental disclosure for non-cash investing and financing activity: | |||||||||||
Change in dividends payable | $ 53,340 | $ 54,706 | $ 59,178 |
QUARTERLY RESULTS OF OPERATIO98
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total interest and fee income | $ 4,327,409 | $ 4,117,032 | $ 3,933,285 | $ 3,791,421 | $ 3,862,720 | $ 4,030,143 | $ 3,770,669 | $ 3,632,065 | $ 16,169,147 | $ 15,295,597 | $ 14,229,948 |
Total interest expense | 109,934 | 110,625 | 106,522 | 96,782 | 95,146 | 96,467 | 92,988 | 94,139 | 423,863 | 378,740 | 402,395 |
Net interest income | 4,217,475 | 4,006,407 | 3,826,763 | 3,694,639 | 3,767,574 | 3,933,676 | 3,677,681 | 3,537,926 | 15,745,284 | 14,916,857 | 13,827,553 |
Provision for loan losses | 2,500 | 20,000 | 30,000 | 2,500 | 175,000 | 210,000 | 140,000 | 45,000 | 55,000 | 570,000 | 192,500 |
Net interest income after provision for loan losses | 4,214,975 | 3,986,407 | 3,796,763 | 3,692,139 | 3,592,574 | 3,723,676 | 3,537,681 | 3,492,926 | 15,690,284 | 14,346,857 | 13,635,053 |
Other income | 538,236 | 481,882 | 696,479 | 551,874 | 638,896 | 686,586 | 729,572 | 806,029 | 2,268,471 | 2,861,083 | 3,049,958 |
Other expense | 2,696,005 | 2,484,538 | 2,590,123 | 2,471,630 | 2,715,147 | 2,584,268 | 2,436,881 | 2,536,148 | 10,242,296 | 10,272,444 | 9,513,475 |
Income before income tax expense | 2,057,206 | 1,983,751 | 1,903,119 | 1,772,383 | 1,516,323 | 1,825,994 | 1,830,372 | 1,762,807 | 7,716,459 | 6,935,496 | 7,171,536 |
Income tax expense | 1,208,507 | 543,098 | 516,734 | 546,295 | 203,444 | 399,656 | 518,262 | 567,071 | 2,814,634 | 1,688,433 | 2,287,248 |
Net income | $ 848,699 | $ 1,440,653 | $ 1,386,385 | $ 1,226,088 | $ 1,312,879 | $ 1,426,338 | $ 1,312,110 | $ 1,195,736 | $ 4,901,825 | $ 5,247,063 | $ 4,884,288 |
Basic income per common share | $ 0.17 | $ 0.29 | $ 0.28 | $ 0.25 | $ 0.27 | $ 0.28 | $ 0.27 | $ 0.24 | $ 0.99 | $ 1.06 | $ 0.99 |
Diluted income per common share | $ 0.17 | $ 0.29 | $ 0.27 | $ 0.24 | $ 0.26 | $ 0.28 | $ 0.26 | $ 0.24 | $ 0.97 | $ 1.04 | $ 0.96 |