Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 26, 2018 | Jun. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | AMERICAN RIVER BANKSHARES | ||
Entity Central Index Key | 1,108,236 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | Yes | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 88,881,000 | ||
Entity Common Stock, Shares Outstanding | 6,050,924 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash and due from banks | $ 38,467 | $ 27,589 |
Interest-bearing deposits in banks | 1,746 | 999 |
Investment securities (Note 5): | ||
Available-for-sale, at fair value | 262,322 | 254,020 |
Held-to-maturity, at amortized cost; fair value of $404 in 2017 and $521 in 2016 | 378 | 483 |
Loans and leases, less allowance for loan and lease losses of $4,478 in 2017 and $4,822 in 2016 (Notes 6, 7, 12 and 17) | 308,713 | 324,086 |
Premises and equipment, net (Note 8) | 1,158 | 1,362 |
Federal Home Loan Bank of San Francisco stock | 3,932 | 3,779 |
Other real estate owned, net | 961 | 1,348 |
Goodwill (Note 4) | 16,321 | 16,321 |
Bank-owned life insurance (Note 16) | 15,122 | 14,805 |
Accrued interest receivable and other assets (Notes 11 and 16) | 6,502 | 6,658 |
Total Assets | 655,622 | 651,450 |
Deposits: | ||
Noninterest-bearing | 215,528 | 201,113 |
Interest-bearing (Note 9) | 340,552 | 343,693 |
Total deposits | 556,080 | 544,806 |
Short-term borrowings (Note 10) | 3,500 | 3,500 |
Long-term borrowings (Note 10) | 12,000 | 12,000 |
Accrued interest payable and other liabilities (Note 16) | 7,121 | 7,294 |
Total liabilities | 578,701 | 567,600 |
Commitments and contingencies (Note 12) | ||
Shareholders' equity (Notes 13 and 14): | ||
Common stock - no par value; 20,000,000 shares authorized; issued and outstanding – 6,132,362 shares in 2017 and 6,661,726 shares in 2016 | 34,463 | 42,484 |
Retained earnings | 42,779 | 40,822 |
Accumulated other comprehensive (loss) income, net of taxes (Note 5) | (321) | 544 |
Total shareholders' equity | 76,921 | 83,850 |
Total liabilities and shareholders' euity | $ 655,622 | $ 651,450 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||
Fair value of held-to-maturity | $ 404 | $ 521 |
Allowance for loan and lease losses (in dollars) | $ 4,478 | $ 4,822 |
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 6,132,362 | 6,661,726 |
Common stock, shares outstanding | 6,132,362 | 6,661,726 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Interest and fees on loans and leases: | |||
Taxable | $ 13,947 | $ 14,008 | $ 13,566 |
Exempt from Federal income taxes | 499 | 723 | 345 |
Interest on deposits in banks | 13 | 7 | 5 |
Interest and dividends on investment securities: | |||
Taxable | 5,300 | 5,769 | 6,292 |
Exempt from Federal income taxes | 655 | 646 | 760 |
Total interest income | 20,414 | 21,153 | 20,968 |
Interest expense: | |||
Interest on deposits (Note 9) | 855 | 730 | 817 |
Interest on borrowings | 206 | 180 | 144 |
Total interest expense | 1,061 | 910 | 961 |
Net interest income | 19,353 | 20,243 | 20,007 |
Provision for loan and lease losses (Note 7) | 450 | (1,344) | 0 |
Net interest income after provision for loan and lease losses | 18,903 | 21,587 | 20,007 |
Noninterest income: | |||
Service charges | 465 | 502 | 498 |
Gain on sale and call of investment securities (Note 5) | 161 | 314 | 251 |
Income from other real estate owned properties | 0 | 279 | 335 |
Other income (Note 15) | 970 | 950 | 931 |
Total noninterest income | 1,596 | 2,045 | 2,015 |
Noninterest expense: | |||
Salaries and employee benefits (Notes 6 and 16) | 8,920 | 8,435 | 8,528 |
Other real estate expense | 44 | 246 | 322 |
Occupancy (Notes 8, 12 and 17) | 1,053 | 1,175 | 1,183 |
Furniture and equipment (Notes 8 and 12) | 586 | 652 | 690 |
Regulatory assessments | 280 | 328 | 395 |
Other expense (Notes 4 and 15) | 3,166 | 3,000 | 2,962 |
Total noninterest expense | 14,049 | 13,836 | 14,080 |
Income before provision for income taxes | 6,450 | 9,796 | 7,942 |
Provision for income taxes (Note 11) | 3,252 | 3,392 | 2,674 |
Net income | $ 3,198 | $ 6,404 | $ 5,268 |
Basic earnings per share (Note 13) | $ 0.50 | $ 0.95 | $ 0.70 |
Diluted earnings per share (Note 13) | 0.50 | 0.94 | 0.70 |
Cash dividends per share of issued and outstanding common stock | $ 0.20 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 3,198 | $ 6,404 | $ 5,268 |
Other comprehensive income: | |||
Decrease in net unrealized gains on investment securities | (1,211) | (2,274) | (1,863) |
Deferred tax benefit | 491 | 905 | 745 |
Decrease in net unrealized gains on investment securities, net of tax | (720) | (1,369) | (1,118) |
Reclassification adjustment for realized gains included in net income | (161) | (314) | (251) |
Tax effect | 64 | 124 | 101 |
Realized gains, net of tax | (97) | (190) | (150) |
Total other comprehensive (loss) | (817) | (1,559) | (1,268) |
Comprehensive income | $ 2,381 | $ 4,845 | $ 4,000 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Net of Taxes) | Total |
Beginning Balance, Shares at Dec. 31, 2014 | 8,089,615 | |||
Beginning Balance, Amount at Dec. 31, 2014 | $ 57,126 | $ 29,150 | $ 3,371 | $ 89,647 |
Net income | 5,268 | 5,268 | ||
Other comprehensive income, net of tax: | ||||
Net change in unrealized gains on available-for-sale investment securities (Note 5) | (1,268) | (1,268) | ||
Net restricted stock award activity and related compensation expense, Shares | 45,023 | |||
Net restricted stock award activity and related compensation expense, Amount | $ 236 | 236 | ||
Retirement of common stock (Note 13), Shares | (790,989) | |||
Retirement of common stock (Note 13), Amount | $ (7,843) | (7,843) | ||
Stock option compensation expense | $ 35 | 35 | ||
Ending Balance, Shares at Dec. 31, 2015 | 7,343,649 | |||
Ending Balance, Amount at Dec. 31, 2015 | $ 49,554 | 34,418 | 2,103 | 86,075 |
Net income | 6,404 | 6,404 | ||
Other comprehensive income, net of tax: | ||||
Net change in unrealized gains on available-for-sale investment securities (Note 5) | (1,559) | (1,559) | ||
Net restricted stock award activity and related compensation expense, Shares | 33,474 | |||
Net restricted stock award activity and related compensation expense, Amount | $ 291 | 291 | ||
Retirement of common stock (Note 13), Shares | (716,897) | |||
Retirement of common stock (Note 13), Amount | $ (7,414) | (7,414) | ||
Stock options exercised, Shares | 1,500 | |||
Stock options exercised, Amount | $ 13 | 13 | ||
Stock option compensation expense | 40 | 40 | ||
Ending Balance, Shares at Dec. 31, 2016 | 6,661,726 | |||
Ending Balance, Amount at Dec. 31, 2016 | $ 42,484 | 40,822 | 544 | 83,850 |
Net income | 3,198 | 3,198 | ||
Disproportionate tax effect resulting from H.R.1 Tax Act (Note 2) | 48 | (48) | ||
Other comprehensive income, net of tax: | ||||
Net restricted stock award activity and related compensation expense, Shares | 3,486 | |||
Net restricted stock award activity and related compensation expense, Amount | $ 248 | 4 | 252 | |
Retirement of common stock (Note 13), Shares | (574,748) | |||
Retirement of common stock (Note 13), Amount | $ (8,641) | (8,641) | ||
Stock options exercised, Shares | 41,898 | |||
Stock options exercised, Amount | $ 351 | 351 | ||
Stock option compensation expense | $ 0 | 21 | 0 | |
Ending Balance, Shares at Dec. 31, 2017 | 6,132,362 | |||
Ending Balance, Amount at Dec. 31, 2017 | $ 34,463 | $ 42,779 | $ (321) | $ 76,921 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 3,198 | $ 6,404 | $ 5,268 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision for loan and lease losses | 450 | (1,344) | 0 |
(Decrease) increase in deferred loan and lease origination fees, net | (20) | 1 | (66) |
Depreciation and amortization | 333 | 420 | 430 |
Amortization of investment security premiums and discounts, net | 3,246 | 2,940 | 3,160 |
Gain on sale and call of investment securities | (161) | (314) | (251) |
Increase in cash surrender value of life insurance policies | (317) | (322) | (316) |
Deferred income tax expense (benefit) | 1,247 | (283) | 473 |
Stock-based compensation expense | 273 | 331 | 271 |
(Gain) loss on sale or write-down of other real estate owned | (8) | 118 | 70 |
Fair value adjustment to acquired other real estate owned | 0 | (239) | 0 |
(Increase) decrease in accrued interest receivable and other assets | (537) | 1,734 | (723) |
(Decrease) increase in accrued interest payable and other liabilities | (173) | 419 | 461 |
Net cash provided by operating activities | 7,531 | 9,865 | 8,777 |
Cash flows from investing activities: | |||
Proceeds from the sale of available-for-sale investment securities | 31,289 | 12,655 | 23,764 |
Proceeds from called available-for-sale investment securities | 145 | 1,550 | 0 |
Proceeds from matured available-for-sale investment securities | 1,930 | 1,100 | 175 |
Purchases of available-for-sale investment securities | (89,273) | (47,292) | (62,958) |
Proceeds from principal repayments for available-for-sale mortgage-backed securities | 43,150 | 46,570 | 49,242 |
Proceeds from principal repayments for held-to-maturity mortgage-backed securities | 105 | 140 | 239 |
Net (increase) decrease in interest-bearing deposits in banks | (747) | (249) | 250 |
Net decrease (increase) in loans and leases | 14,944 | (33,064) | (30,979) |
Net proceeds from sale of other real estate owned | 395 | 1,747 | 1,153 |
Capitalized additions to other real estate | 0 | 0 | (127) |
Purchases of equipment | (129) | (375) | (319) |
Net increase in FHLB stock | (153) | 0 | (93) |
Net cash used in investing activities | 1,656 | (17,218) | (19,653) |
Cash flows from financing activities: | |||
Net increase in demand, interest-bearing and savings deposits | 14,552 | 15,728 | 23,114 |
Net decrease in time deposits | (3,278) | (1,612) | (3,117) |
Cash paid to repurchase common stock | (8,641) | (7,414) | (7,843) |
Proceeds from exercised options | 351 | 13 | 0 |
Increase in long-term borrowings | 0 | 4,500 | 0 |
Cash dividends paid | (1,293) | 0 | 0 |
Net cash provided by financing activities | 1,691 | 11,215 | 12,154 |
Increase in cash and cash equivalents | 10,878 | 3,862 | 1,278 |
Cash and cash equivalents at beginning of year | 27,589 | 23,727 | 22,449 |
Cash and cash equivalents at end of year | 38,467 | 27,589 | 23,727 |
Cash paid during the year for: | |||
Interest expense | 1,058 | 908 | 961 |
Income taxes | 2,375 | 2,790 | 2,495 |
Non-cash investing activities: | |||
Real estate acquired through foreclosure or deed in lieu of foreclosure | 0 | 1,109 | 0 |
Loans resulting from sale of other real estate owned | $ 0 | $ 1,686 | $ 0 |
1. THE BUSINESS OF THE COMPANY
1. THE BUSINESS OF THE COMPANY | 12 Months Ended |
Dec. 31, 2017 | |
Nature Of Operations [Abstract] | |
THE BUSINESS OF THE COMPANY | American River Bankshares (the “Company”) was incorporated under the laws of the State of California in 1995 under the name of American River Holdings and changed its name in 2004 to American River Bankshares. As a bank holding company, the Company is authorized to engage in the activities permitted under the Bank Holding Company Act of 1956, as amended, and regulations thereunder. As a community oriented regional bank holding company, the principal communities served are located in Sacramento, Placer, Yolo, El Dorado, Amador, and Sonoma counties. The Company owns 100% of the issued and outstanding common shares of its banking subsidiary, American River Bank (“ARB” or the “Bank”). ARB was incorporated in 1983. ARB accepts checking and savings deposits, offers money market deposit accounts and certificates of deposit, makes secured and unsecured commercial, secured real estate, and other installment and term loans and offers other customary banking services. ARB operates four full-service banking offices in Sacramento County, one full-service banking office in Placer County, two full-service banking offices in Sonoma County, and three full-service banking offices in Amador County. The Company also owns one inactive subsidiary, American River Financial. ARB does not offer trust services or international banking services and does not plan to do so in the near future. The deposits of ARB are insured by the Federal Deposit Insurance Corporation (the “FDIC”) up to applicable legal limits. |
2. SUMMARY OF SIGNIFICANT ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | General The accounting and reporting policies of the Company and its subsidiaries conform to accounting principles generally accepted in the United States of America and prevailing practices within the financial services industry. Reclassifications Certain reclassifications have been made to prior years’ balances to conform to classifications used in 2017. Reclassifications did not affect prior year net income or shareholders’ equity. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and accounts among the Company and its subsidiaries have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Cash and Cash Equivalents For the purpose of the statement of cash flows, cash and due from banks and Federal funds sold are considered to be cash equivalents. Generally, Federal funds are sold for one-day periods. Interest-Bearing Deposits in Banks Interest-bearing deposits in banks mature within one year and are carried at cost. Investment Securities Investments are classified into the following categories: · Available-for-sale securities, reported at fair value, with unrealized gains and losses excluded from earnings and reported, net of taxes, as accumulated other comprehensive income (loss) within shareholders’ equity. · Held-to-maturity securities, which management has the positive intent and ability to hold to maturity, reported at amortized cost. Management determines the appropriate classification of its investments at the time of purchase and may only change the classification in certain limited circumstances. All transfers between categories are accounted for at fair value. There were no transfers during the years ended December 31, 2017 and 2016. Gains or losses on the sale of investment securities are computed on the specific identification method. Interest earned on investment securities is reported in interest income, net of applicable adjustments for accretion of discounts and amortization of premiums. An investment security is impaired when its carrying value is greater than its fair value. Investment securities that are impaired are evaluated on at least a quarterly basis and more frequently when economic or market conditions warrant such an evaluation to determine whether a decline in their value is other than temporary. Management utilizes criteria such as the magnitude and duration of the decline and the intent and ability of the Company to retain its investment in the securities for a period of time sufficient to allow for an anticipated recovery in fair value, in addition to the reasons underlying the decline, to determine whether the loss in value is other than temporary. The term “other than temporary” is not intended to indicate that the decline is permanent, but indicates that the prospects for a near-term recovery of value is not necessarily favorable, or that there is a lack of evidence to support a realizable value equal to or greater than the carrying value of the investment. For debt securities, once a decline in value is determined to be other than temporary and management does not intend to sell the security or it is more likely than not that management will not be required to sell the security before recovery, only the portion of the impairment loss representing credit exposure is recognized as a charge to earnings, with the balance recognized as a charge to other comprehensive income. If management intends to sell the security or it is more likely than not that management will be required to sell the security before recovering its forecasted cost, the entire impairment loss is recognized as a charge to earnings. For equity securities, the entire amount of impairment is recognized through earnings. Federal Home Loan Bank Stock Investments in Federal Home Loan Bank of San Francisco (the “FHLB”) stock are carried at cost and are redeemable at par with certain restrictions. Investments in FHLB stock are necessary to participate in FHLB programs. Loans and Leases Loans and leases that management has both the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal amounts outstanding, adjusted for unearned income, deferred loan origination fees and costs, purchase premiums and discounts, write-downs and the allowance for loan and lease losses. Loan and lease origination fees, net of certain deferred origination costs, and purchase premiums and discounts are recognized as an adjustment to the yield of the related loans and leases. For all classes of loans and leases, the accrual of interest is discontinued when, in the opinion of management, there is an indication that the borrower may be unable to meet payment requirements within an acceptable time frame relative to the terms stated in the loan agreement. Upon such discontinuance, all unpaid accrued interest is reversed against current income unless the loan or lease is well secured and in the process of collection. Interest received on nonaccrual loans and leases is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, loans and leases are restored to accrual status when the obligation is brought current and has performed in accordance with the contractual terms for a reasonable period of time and the ultimate collectability of the total contractual principal and interest is no longer in doubt. Direct financing leases are carried net of unearned income. Income from leases is recognized by a method that approximates a level yield on the outstanding net investment in the lease. Loan Sales and Servicing Included in the loan and lease portfolio are Small Business Administration (“SBA”) loans and Farm Service Agency guaranteed loans that may be sold in the secondary market. At the time the loan is sold, the related right to service the loan is either retained, with the Company earning future servicing income, or released in exchange for a one-time servicing-released premium. Loans subsequently transferred to the loan portfolio are transferred at the lower of cost or fair value at the date of transfer. Any difference between the carrying amount of the loan and its outstanding principal balance is recognized as an adjustment to yield by the interest method. There were no loans held for sale at December 31, 2017 and 2016. SBA and Farm Service Agency loans with unpaid balances of $138,000 and $170,000 were being serviced for others as of December 31, 2017 and 2016, respectively. The Company also serviced loans that are participated with other financial institutions totaling $7,941,000 and $7,740,000 as of December 31, 2017 and 2016, respectively. Servicing rights acquired through 1) a purchase or 2) the origination of loans which are sold or securitized with servicing rights retained are recognized as separate assets or liabilities. Servicing assets or liabilities are initially recorded at fair value and are subsequently amortized in proportion to and over the period of the related net servicing income or expense. Servicing assets are periodically evaluated for impairment. Servicing assets were not considered material for disclosure purposes at December 31, 2017 and 2016. Allowance for Loan and Lease Losses The allowance for loan and lease losses is an estimate of probable credit losses inherent in the Company’s credit portfolio that have been incurred as of the balance-sheet date. The allowance is established through a provision for loan and lease losses which is charged to expense. Additions to the allowance are expected to maintain the adequacy of the total allowance after credit losses and loan growth. Credit exposures determined to be uncollectible are charged against the allowance. Cash received on previously charged off amounts is typically recorded as a recovery to the allowance. The overall allowance consists of two primary components, specific reserves related to impaired credits and general reserves for inherent probable losses related to credits that are not impaired. For all classes of the portfolio, a loan or lease is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the original agreement. Factors considered by management in determining impairment include payment status, and the probability of collecting scheduled principle and interest payments when due. Impaired loans are individually evaluated to determine the extent of impairment, if any, except for smaller-balance loans that are collectively evaluated for credit risk. When a loan or lease is impaired, the Company measures impairment based on the present value of expected future cash flows discounted at the credit’s original interest rate, the credit’s observable market price, or the fair value of the collateral if the credit is collateral dependent. A loan or lease is collateral dependent if the repayment of the credit is expected to be provided solely by the sale or operation of the underlying collateral. For all portfolio segments, a restructuring of a debt constitutes a troubled debt restructuring (“TDR”) if the Company grants a concession to the borrower for economic or legal reasons related to the borrower’s financial difficulties that it would not otherwise consider. Restructured workout loans typically present an elevated level of credit risk as the borrowers are not able to perform according to the original contractual terms. Loans or leases that are reported as TDRs are considered impaired and measured for impairment as described above. For all portfolio segments, the determination of the general reserve for loans and leases that are not impaired is based on estimates made by management, to include, but not limited to, consideration of historical losses by portfolio segment, internal asset classifications, and qualitative factors to include economic trends in the Company’s service areas, industry experience and trends, geographic concentrations, estimated collateral values, the Company’s underwriting policies, the character of the credit portfolio, and probable losses inherent in the portfolio taken as a whole. The Company determines a separate allowance for each portfolio segment. These portfolio segments include commercial, real estate construction (including land and development loans), residential real estate, multi-family real estate, commercial real estate, leases, agriculture, and consumer loans. The allowance for loan and lease losses attributable to each portfolio segment, which includes both impaired credits and credits that are not impaired, is combined to determine the Company’s overall allowance, which is included as a component of loans and leases on the consolidated balance sheet and available for all loss exposures. The Company assigns a risk rating to all loans and periodically performs detailed reviews of all such loans over a certain threshold to identify credit risks and to assess the overall collectability of the portfolio. These risk ratings are also subject to examination by independent specialists engaged by the Company and the Company’s regulators. During the internal reviews, management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which borrowers operate and the fair values of collateral securing these loans. These credit quality indicators are used to assign a risk rating to each individual credit. The risk ratings can be grouped into six major categories, defined as follows: Pass Watch Special Mention Substandard Doubtful Loss The general reserve component of the allowance for loan and lease losses also consists of reserve factors that are based on management’s assessment of the following for each portfolio segment: (1) inherent credit risk, (2) historical losses and (3) other qualitative factors. These reserve factors are inherently subjective and are driven by the repayment risk associated with each portfolio segment described below. Real Estate- Commercial Real Estate- Construction Real Estate- Multi-family Real Estate- Residential Commercial Lease Financing Receivable – Agricultural Consumer Although management believes the allowance to be adequate, ultimate losses may vary from its estimates. At least quarterly, the Board of Directors reviews the adequacy of the allowance, including consideration of the relative risks in the portfolio, current economic conditions and other factors. If the Board of Directors and management determine that changes are warranted based on those reviews, the allowance is adjusted. In addition, the Company’s primary regulators, the FDIC and the California Department of Business Oversight, as an integral part of their examination process, review the adequacy of the allowance. These regulatory agencies may require additions to the allowance based on their judgment about information available at the time of their examinations. Allowance for Credit Losses on Off-Balance-Sheet Credit Exposures The Company also maintains a separate allowance for off-balance-sheet commitments. Management estimates probable incurred losses using historical data and utilization assumptions. The allowance for off-balance-sheet commitments is included in accrued interest payable and other liabilities on the consolidated balance sheet. Other Real Estate Owned (OREO) Other real estate owned includes real estate acquired in full or partial settlement of loan obligations. When property is acquired, any excess of the recorded investment in the loan balance and accrued interest income over the estimated fair market value of the property less estimated selling costs is charged against the allowance for loan and lease losses. Any excess of the fair value over the loan balance less estimated selling costs is recorded as noninterest income-other income. A valuation allowance for losses on other real estate may be maintained to provide for temporary declines in value. The valuation allowance is established through a provision for losses on other real estate which is included in other expenses. Subsequent gains or losses on sales or write-downs resulting from permanent impairments are recorded in other income or expense as incurred Premises and Equipment Premises and equipment are carried at cost less accumulated depreciation. Land is not depreciated. Depreciation is determined using the straight-line method over the estimated useful lives of the related assets. The useful life of the building and improvements is forty years. The useful lives of furniture, fixtures and equipment are estimated to be three to ten years. Leasehold improvements are amortized over the life of the asset or the term of the related lease, whichever is shorter. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation or amortization are removed from the accounts, and any resulting gain or loss is recognized in income for the period. The cost of maintenance and repairs is charged to expense as incurred. Impairment of long-lived assets is evaluated by management based upon an event or changes in circumstances surrounding the underlying assets which indicate long-lived assets may be impaired. Goodwill and Intangible Assets Business combinations involving the Company’s acquisition of equity interests or net assets of another enterprise or the assumption of net liabilities in an acquisition of branches constituting a business may give rise to goodwill. Goodwill represents the excess of the cost of an acquired entity over the net of the amounts assigned to assets acquired and liabilities assumed. The value of goodwill is ultimately derived from the Company’s ability to generate net earnings after the acquisition and is not deductible for tax purposes. A decline in net earnings could be indicative of a decline in the fair value of goodwill and result in impairment. For that reason, goodwill is assessed for impairment at least annually. Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value. At December 31, 2017, the Company had one reporting unit and that reporting unit had positive equity and the Company elected to perform a qualitative assessment to determine if it was more likely than not that the fair value of the reporting unit exceeded its carrying value, including goodwill. The qualitative assessment indicated that it was more likely than not that the fair value of the reporting unit exceeded its carrying value, resulting in no impairment. Bank-Owned Life Insurance The Company has purchased life insurance policies on certain key executives. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. Income Taxes The Company files its income taxes on a consolidated basis with its subsidiaries. The allocation of income tax expense represents each entity’s proportionate share of the consolidated provision for income taxes. The Company accounts for income taxes using the balance sheet method, under which deferred tax assets and liabilities are recognized for the tax consequences of temporary differences between the reported amounts of assets and liabilities and their tax bases. The deferred provision for income taxes is the result of the net change in the deferred tax asset and deferred tax liability balances during the year. This amount combined with the current taxes payable or refundable, results in the income tax expense for the current year. On the consolidated balance sheet, net deferred tax assets are included in accrued interest receivable and other assets. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. On December 22, 2017, President Trump signed into law “H.R.1” commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). During 2017, the Company recorded an income tax expense adjustment of $1,220,000 related to the Tax Act. The adjustment relates to revaluing the Company’s net deferred tax assets using the new lower corporate federal income tax rate of 21% which becomes effective January 1, 2018, a reduction from the Company’s 2017 rate of 34%. The realization of deferred income tax assets is assessed and a valuation allowance is recorded if it is “more likely than not” that all or a portion of the deferred tax assets will not be realized. “More likely than not” is defined as greater than a 50% chance. All available evidence, both positive and negative is considered to determine whether, based on the weight of that evidence, a valuation allowance is needed. Based upon the Company’s analysis of available evidence, the Company determined that it is “more likely than not” that all of the deferred income tax assets as of December 31, 2017 and 2016 will be fully realized and therefore no valuation allowance was recorded. The Company uses a comprehensive model for recognizing, measuring, presenting and disclosing in the financial statements tax positions taken or expected to be taken on a tax return. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Interest expense and penalties associated with unrecognized tax benefits, if any, are classified as income tax expense in the consolidated statement of income. Comprehensive Income Comprehensive income is reported in addition to net income for all periods presented. Comprehensive income consists of net income and other comprehensive income. Unrealized gains and losses on the Company’s available-for-sale investment securities are included in other comprehensive income (loss), adjusted for realized gains or losses included in net income, net of tax. Total comprehensive income and the components of accumulated other comprehensive income (loss) are presented in the consolidated statements of comprehensive income. Earnings Per Share Basic earnings per share (“EPS”), which excludes dilution, is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock, such as stock options or restricted stock, result in the issuance of common stock that share in the earnings of the Company. The treasury stock method has been applied to determine the dilutive effect of stock options and restricted stock in computing diluted EPS. Earnings and dividends per share are restated for all stock splits and stock dividends through the date of issuance of the consolidated financial statements. There were no stock splits or stock dividends in 2017, 2016 or 2015. Stock-Based Compensation At December 31, 2017, the Company had two stock-based compensation plans, which are described more fully in Note 13. Compensation expense recorded in 2017, 2016, and 2015 totaled $273,000, $331,000 and $270,000, respectively. Compensation expense is recognized over the vesting period on a straight line accounting basis. The fair value of each option award is estimated on the date of grant using a Black-Scholes-Merton based option valuation model that uses the assumptions noted in the following table. Because Black-Scholes-Merton based option valuation models incorporate ranges of assumptions for inputs, those ranges are disclosed. Expected volatilities are based on historical volatility of the Company’s stock and other factors. The Company uses historical data to estimate the dividend yield, option life and forfeiture rate within the valuation model. The expected option life represents the period of time that options granted are expected to be outstanding. The risk-free rate for the period representing the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Operating Segments While the chief decision-makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Operating segments are aggregated into one as operating results for all segments are similar. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment. Recently Issued Financial Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) and the International Accounting Standards Board (the “IASB”) jointly issued a comprehensive new revenue recognition standard that will supersede nearly all existing revenue recognition guidance under GAAP and International Financial Reporting Standards (“IFRS”). Previous revenue recognition guidance in GAAP consisted of broad revenue recognition concepts together with numerous revenue requirements for particular industries or transactions, which sometimes resulted in different accounting for economically similar transactions. In contrast, IFRS provided limited revenue recognition guidance and, consequently, could be difficult to apply to complex transactions. Accordingly, the FASB and the IASB initiated a joint project to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and IFRS that would: (1) remove inconsistencies and weaknesses in revenue requirements; (2) provide a more robust framework for addressing revenue issues; (3) improve comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets; (4) provide more useful information to users of financial statements through improved disclosure requirements; and (5) simplify the preparation of financial statements by reducing the number of requirements to which an entity must refer. To meet those objectives, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers.” “Revenue from Contracts with Customers - Deferral of the Effective Date” “Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” “Identifying Performance Obligations and Licensing,” “Narrow-Scope Improvements and Practical Expedients,” “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.” In January 2016, the FASB issued ASU No. 2016-01, “ Recognition and Measurement of Financial Assets and Financial Liabilities. In February 2016, the FASB issued ASU No. 2016-02, “ Leases. . In March 2016, the FASB issued ASU No. 2016-09, “ Improvements to Employee Share-Based Payment Accounting. In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments.” In March of 2017, the FASB issued ASU No. 2017-08, “Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” This guidance shortens the amortization period for premiums on certain callable debt securities to the earliest call date (with an explicit, noncontingent call feature that is callable at a fixed price and on a preset dates), rather than contractual maturity date as currently required under GAAP. ASU 2017-08 does not impact instruments without preset call dates such as mortgage-backed securities. For instruments with contingent call features, once the contingency is resolved and the security is callable at a fixed price and preset date, the security is within the scope of ASU 2017-08. ASU 2017-08 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, and early adoption is permitted. Accordingly, effective January of 2017, the Company early adopted ASU 2017-08 and the adoption was immaterial to the Company’s financial position, results of operations or cash flows. In February 2018, the FASB issued ASU No. 2018-02, “ Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . Under ASU 2018-02, entities are allowed, but not required, to reclassify from Accumulated Other Comprehensive Income (“AOCI”) to retained earnings stranded tax effects resulting from the new federal corporate income tax rate . The reclassification could include other stranded tax effects that relate to the TCJA but do not directly relate to the change in the federal rate, e.g. e.g. |
3. FAIR VALUE MEASUREMENTS
3. FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring and nonrecurring basis as of December 31, 2017 and December 31, 2016. They indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Estimated fair values are disclosed for financial instruments for which it is practicable to estimate fair value. These estimates are made at a specific point in time based on relevant market data and information about the financial instruments. These estimates do not reflect any premium or discount that could result from offering the Company’s entire holdings of a particular financial instrument for sale at one time, nor do they attempt to estimate the value of anticipated future business related to the instruments. In addition, the tax ramifications related to the realization of unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of these estimates. The carrying amounts and estimated fair values of the Company’s financial instruments are as follows (dollars in thousands): Carrying Fair Value Measurements Using: December 31, 2017 Amount Level 1 Level 2 Level 3 Total Financial assets: Cash and due from banks $ 38,467 $ 38,467 $ — $ — $ 38,467 Interest-bearing deposits in banks 1,746 — 1,750 — 1,750 Available-for-sale securities 262,322 66 262,256 — 262,322 Held-to-maturity securities 378 — 404 — 404 FHLB stock 3,932 N/A N/A N/A N/A Loans and leases, net 308,713 — — 317,900 317,900 Accrued interest receivable 1,956 — 1,124 832 1,956 Financial liabilities: Deposits: Noninterest-bearing $ 215,528 $ 215,528 $ — $ — $ 215,528 Savings 66,130 66,130 — — 66,130 Money market 130,032 130,032 — — 130,032 NOW accounts 64,709 64,709 — — 64,709 Time Deposits 79,681 — 79,614 — 79,614 Short-term borrowings 3,500 3,500 — — 3,500 Long-term borrowings 12,000 — 11,978 — 11,978 Accrued interest payable 65 — 65 — 65 Carrying Fair Value Measurements Using: December 31, 2016 Amount Level 1 Level 2 Level 3 Total Financial assets: Cash and due from banks $ 27,589 $ 27,589 $ — $ — $ 27,589 Interest-bearing deposits in banks 999 — 999 — 999 Available-for-sale securities 254,020 60 253,960 — 254,020 Held-to-maturity securities 483 — 521 — 521 FHLB stock 3,779 N/A N/A N/A N/A Loans and leases, net 324,086 — — 329,110 329,110 Accrued interest receivable 1,824 — 937 887 1,824 Financial liabilities: Deposits: Noninterest-bearing $ 201,113 $ 201,113 $ — $ — $ 201,113 Savings 64,740 64,740 — — 64,740 Money market 131,342 131,342 — — 131,342 NOW accounts 64,652 64,652 — — 64,652 Time Deposits 82,959 — 83,720 — 83,720 Short-term borrowings 3,500 3,500 — — 3,500 Long-term borrowings 12,000 — 12,110 — 12,110 Accrued interest payable 62 — 62 — 62 Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the fair values presented. The following methods and assumptions were used by the Company to estimate the fair values of its financial instruments at December 31, 2017 and December 31, 2016: Cash and due from banks Interest-bearing deposits in banks Investment securities FHLB stock Loans and leases Deposits Short-term and long-term borrowings Accrued interest receivable and payable Off-balance sheet instruments Assets and liabilities measured at fair value on a recurring and non-recurring basis are presented in the following table: (Dollars in thousands) Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Total Gains December 31, 2017 Fair Value (Level 1) (Level 2) (Level 3) (Losses) Assets and liabilities measured on a recurring basis: Available-for-sale securities: U.S. Government Agencies and Sponsored Agencies $ 232,869 $ — $ 232,869 $ — $ — Corporate Debt Securities 6,626 — 6,626 — — Obligations of states and political subdivisions 22,715 — 22,715 — — Corporate stock 112 66 46 — — Total recurring $ 262,322 $ 66 $ 262,256 $ — $ — Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Total Gains December 31, 2017 Fair Value (Level 1) (Level 2) (Level 3) (Losses) Assets and liabilities measured on a nonrecurring basis: Impaired loans: Commercial $ 1,598 $ — $ — $ 1,598 $ (1,073 ) Real estate: Commercial 178 — — 178 — Residential 329 — — 329 — Other real estate owned: Land 961 — — 961 — Total nonrecurring $ 3,066 $ — $ — $ 3,066 $ (1,073 ) (Dollars in thousands) Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Total Gains December 31, 2016 Fair Value (Level 1) (Level 2) (Level 3) (Losses) Assets and liabilities measured on a recurring basis: Available-for-sale securities: U.S. Government Agencies and Sponsored Agencies $ 229,785 $ — $ 229,785 $ — $ — Corporate Debt Securities 1,519 — 1,519 — — Obligations of states and political subdivisions 22,612 — 22,612 — — Corporate stock 104 60 44 — — Total recurring $ 254,020 $ 60 $ 253,960 $ — $ — Assets and liabilities measured on a nonrecurring basis: Impaired loans: Real estate: Commercial $ 3,535 $ — $ — $ 3,535 $ — Residential 334 — — 334 — Other real estate owned: Commercial 386 — — 386 (25 ) Land 961 — — 961 173 Total nonrecurring $ 5,216 $ — $ — $ 5,216 $ 148 U.S. Government Agencies and Sponsored Agencies consist predominately of residential mortgage-backed securities. There were no transfers between Levels 1 and 2 during the years ended December 31, 2017 or December 31, 2016. The following methods were used to estimate the fair value of each class of financial instrument above: Available-for-sale securities – Impaired loans Other real estate owned |
4. GOODWILL AND OTHER INTANGIBL
4. GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | At December 31, 2017 and 2016, goodwill totaled $16,321,000. Goodwill is evaluated annually for impairment under the provisions of the codification Topic 350, Goodwill and Other Intangibles. At December 31, 2017 and 2016, the Company did not have other intangible assets. |
5. INVESTMENT SECURITIES
5. INVESTMENT SECURITIES | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES | The amortized cost and estimated fair value of investment securities at December 31, 2017 and 2016 consisted of the following (dollars in thousands): Available-for-Sale 2017 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 233,956 $ 1,184 $ (2,271 ) $ 232,869 Obligations of states and political subdivisions 22,281 528 (94 ) 22,715 Corporate Debt Securities 6,490 160 (24 ) 6,626 Equity securities: Corporate stock 51 61 — 112 $ 262,778 $ 1,933 $ (2,389 ) $ 262,322 2016 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 229,118 $ 2,150 $ (1,483 ) $ 229,785 Obligations of states and political subdivisions 22,436 559 (383 ) 22,612 Corporate Debt Securities 1,501 18 — 1,519 Equity securities: Corporate stock 49 55 — 104 $ 253,104 $ 2,782 $ (1,866 ) $ 254,020 U.S. Government Agencies and U.S. Government-sponsored Agencies consist predominately of residential mortgage-backed securities. Net unrealized losses on available-for-sale investment securities totaling $456,000 were recorded, net of $135,000 in tax liabilities, as accumulated other comprehensive income within shareholders’ equity at December 31, 2017. Proceeds and gross realized gains from the sale and call of available-for-sale investment securities for the year ended December 31, 2017 totaled $31,434,000 and $161,000, respectively. There were no transfers of available-for-sale investment securities during the year ended December 31, 2017. Net unrealized gains on available-for-sale investment securities totaling $916,000 were recorded, net of $372,000 in tax liabilities, as accumulated other comprehensive income within shareholders’ equity at December 31, 2016. Proceeds and gross realized gains from the sale, impairment and call of available-for-sale investment securities for the year ended December 31, 2016 totaled $14,205,000 and $314,000, respectively. There were no transfers of available-for-sale investment securities during the year ended December 31, 2016. Proceeds and gross realized gains from the sale, impairment and call of available-for-sale investment securities for the year ended December 31, 2016 totaled $23,764,000 and $251,000, respectively. Held-to-Maturity 2017 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 378 $ 26 $ — $ 404 2016 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 483 $ 38 $ — $ 521 There were no sales or transfers of held-to-maturity investment securities for the years ended December 31, 2017, 2016 and 2015. The amortized cost and estimated fair value of investment securities at December 31, 2017 by contractual maturity are shown below (dollars in thousands). Available-for-Sale Held-to-Maturity Estimated Estimated Amortized Fair Amortized Fair Cost Value Cost Value Within one year $ — $ — After one year through five years 5,449 5,487 After five years through ten years 18,092 18,547 After ten years 5,230 5,307 28,771 29,341 Investment securities not due at a single maturity date: U.S. Government Agencies and Sponsored Agencies 233,956 232,869 $ 378 $ 404 Corporate stock 51 112 — — $ 262,778 $ 262,322 $ 378 $ 404 Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to call or prepay obligations with or without call or prepayment penalties. Investment securities with amortized costs totaling $55,834,000 and $44,552,000 and estimated fair values totaling $56,021,000 and $44,944,000 were pledged to secure State Treasury funds on deposit, public agency and bankruptcy trustee deposits and borrowing arrangements (see Note 10) at December 31, 2017 and 2016, respectively. Investment securities with unrealized losses at December 31, 2017 and 2016 are summarized and classified according to the duration of the loss period as follows (dollars in thousands): 2017 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Available-for-Sale Debt securities: U.S. Government Agencies and Sponsored Agencies $ 119,455 $ (1,148 ) $ 49,258 $ (1,123 ) $ 168,713 $ (2,271 ) Obligations of states and political subdivisions 1,130 (9 ) 4,654 (85 ) 5,784 (94 ) Corporate bonds 1,967 (24 ) — — 1,967 (24 ) $ 122,552 $ (1,181 ) $ 53,912 $ (1,208 ) $ 176,464 $ (2,389 ) 2016 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Available-for-Sale Debt securities: U.S. Government Agencies and Sponsored Agencies $ 111,870 $ (1,415 ) $ 5,010 $ (68 ) $ 116,880 $ (1,483 ) Obligations of states and political subdivisions 8,319 (383 ) — — 8,319 (383 ) $ 120,189 $ (1,798 ) $ 5,010 $ (68 ) $ 125,199 $ (1,866 ) At December 31, 2017, the Company held 217 securities of which 64 were in a loss position for less than twelve months and 35 were in a loss position for twelve months or more. These 35 securities consisted of mortgage-backed and municipal securities. The unrealized loss on the Company’s investments in securities is primarily driven by interest rates. Because the decline in market value is attributable to a change in interest rates and not credit quality, and because the Company has the ability and intent to hold these investments until recovery of fair value, which may be maturity, management does not consider these investments to be other-than-temporarily impaired. |
6. LOANS AND LEASES
6. LOANS AND LEASES | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
LOANS AND LEASES | Outstanding loans and leases are summarized as follows (dollars in thousands): December 31, 2017 2016 Real estate – commercial $ 185,452 $ 191,129 Real estate – construction 5,863 9,180 Real estate – multi-family 78,025 73,373 Real estate – residential 15,813 15,718 Commercial 25,377 35,374 Lease financing receivable 205 404 Agriculture 1,713 2,302 Consumer 945 1,650 313,393 329,130 Deferred loan and lease origination fees, net (202 ) (222 ) Allowance for loan and lease losses (4,478 ) (4,822 ) $ 308,713 $ 324,086 Certain loans are pledged as collateral for available borrowings with the FHLB and the Federal Reserve Bank of San Francisco (the “FRB”). Pledged loans totaled $209,889,000 and $190,181,000 at December 31, 2017 and 2016, respectively (see Note 10). The components of the Company’s lease financing receivable are summarized as follows (dollars in thousands): December 31, 2017 2016 Future lease payments receivable $ 211 $ 422 Residual interests — — Unearned income (6 ) (18 ) Net lease financing receivable $ 205 $ 404 Future lease payments receivable are as follows (dollars in thousands): Year Ending December 31, 2018 $ 178 2019 33 Total lease payments receivable $ 211 Salaries and employee benefits totaling $177,000, $289,000 and $257,000 have been deferred as loan and lease origination costs for the years ended December 31, 2017, 2016 and 2015, respectively. |
7. ALLOWANCE FOR LOAN AND LEASE
7. ALLOWANCE FOR LOAN AND LEASE LOSSES | 12 Months Ended |
Dec. 31, 2017 | |
Allowance For Loans And Lease Losses [Abstract] | |
ALLOWANCE FOR LOAN AND LEASE LOSSES | The following tables show the activity in the allowance for loan and lease losses for the years ended December 31, 2017, 2016 and 2015 and the allocation of the allowance for loan and lease losses as of December 31, 2017, 2016 and 2015 by portfolio segment and by impairment methodology (dollars in thousands): December 31, 2017 Real Estate Other Commercial Commercial Multi- Family Construction Residential Leases Agriculture Consumer Unallocated Total Allowance for Loan and Lease Losses Beginning balance $ 855 $ 2,050 $ 851 $ 446 $ 253 $ 1 $ 64 $ 24 $ 278 $ 4,822 Provision for loan losses 659 (104 ) 196 (177 ) (48 ) (42 ) (33 ) (14 ) 13 450 Loans charged-off (1,073 ) — — — — — — — — (1,073 ) Recoveries 6 228 — — — 41 — 4 — 279 Ending balance allocated to portfolio segments $ 447 $ 2,174 $ 1,047 $ 269 $ 205 $ — $ 31 $ 14 $ 291 $ 4,478 Ending balance: Individually evaluated for impairment $ — $ 261 $ 21 $ — $ 73 $ — $ — $ — $ — $ 355 Ending balance: Collectively evaluated for impairment $ 447 $ 1,913 $ 1,026 $ 269 $ 132 $ — $ 31 $ 14 $ 291 $ 4,123 Loans Ending balance $ 25,377 $ 185,452 $ 78,025 $ 5,863 $ 15,813 $ 205 $ 1,713 $ 945 $ — $ 313,393 Ending balance: Individually evaluated for impairment $ 1,598 $ 10,070 $ 474 $ — $ 1,615 $ — $ — $ — $ — $ 13,757 Ending balance: Collectively evaluated for impairment $ 23,779 $ 175,382 $ 77,551 $ 5,863 $ 14,198 $ 205 $ 1,713 $ 945 $ — $ 299,636 December 31, 2016 Real Estate Other Multi- Commercial Commercial Family Construction Residential Leases Agriculture Consumer Unallocated Total Allowance for Loan and Lease Losses Beginning balance $ 860 $ 2,369 $ 228 $ 813 $ 319 $ 1 $ 77 $ 78 $ 230 $ 4,975 Provision for loan losses (665 ) (653 ) 623 (474 ) (66 ) — (13 ) (144 ) 48 (1,344 ) Loans charged-off — (93 ) — — — — — (34 ) — (127 ) Recoveries 660 427 — 107 — — — 124 — 1,318 Ending balance allocated to portfolio segments $ 855 $ 2,050 $ 851 $ 446 $ 253 $ 1 $ 64 $ 24 $ 278 $ 4,822 Ending balance: Individually evaluated for impairment $ 11 $ 246 $ 2 $ — $ 133 $ — $ 29 $ — $ — $ 421 Ending balance: Collectively evaluated for impairment $ 844 $ 1,804 $ 849 $ 446 $ 120 $ 1 $ 35 $ 24 $ 278 $ 4,401 Loans Ending balance $ 35,374 $ 191,129 $ 73,373 $ 9,180 $ 15,718 $ 404 $ 2,302 $ 1,650 $ — $ 329,130 Ending balance: Individually evaluated for impairment $ 157 $ 14,154 $ 482 $ — $ 2,147 $ — $ 357 $ — $ — $ 17,297 Ending balance: Collectively evaluated for impairment $ 35,217 $ 176,975 $ 72,891 $ 9,180 $ 13,571 $ 404 $ 1,945 $ 1,650 $ — $ 311,833 December 31, 2015 Real Estate Other Multi- Commercial Commercial Family Construction Residential Leases Agriculture Consumer Unallocated Total Allowance for Loan and Lease Losses Beginning balance $ 1,430 $ 2,317 $ 130 $ 583 $ 399 $ 2 $ 62 $ 124 $ 254 $ 5,301 Provision for loan losses (84 ) — 98 230 (193 ) — 15 (42 ) (24 ) — Loans charged-off (609 ) — — — — (1 ) — (6 ) — (616 ) Recoveries 123 52 — — 113 — — 2 — 290 Ending balance allocated to portfolio segments $ 860 $ 2,369 $ 228 $ 813 $ 319 $ 1 $ 77 $ 78 $ 230 $ 4,975 Ending balance: Individually evaluated for impairment $ 25 $ 598 $ 5 $ — $ 204 $ — $ 38 $ 29 $ — $ 899 Ending balance: Collectively evaluated for impairment $ 835 $ 1,771 $ 223 $ 813 $ 115 $ 1 $ 39 $ 49 $ 230 $ 4,076 Loans Ending balance $ 36,195 $ 199,591 $ 23,494 $ 14,533 $ 14,200 $ 732 $ 2,431 $ 3,122 $ — $ 294,298 Ending balance: Individually evaluated for impairment $ 121 $ 17,866 $ 488 $ — $ 2,452 $ — $ 370 $ 68 $ — $ 21,365 Ending balance: Collectively evaluated for impairment $ 36,074 $ 181,725 $ 23,006 $ 14,533 $ 11,748 $ 732 $2,061 $ 3,054 $ — $ 272,933 The following tables show the loan portfolio allocated by management’s internal risk ratings as of December 31, 2017 and 2016 (dollars in thousands): December 31, 2017 Credit Risk Profile by Internally Assigned Grade Real Estate Other Credit Exposure Commercial Commercial Multi-Family Construction Residential Leases Agriculture Consumer Total Grade: Pass $ 23,617 $ 164,815 $ 73,644 $ 5,863 $ 13,767 $ 205 $ 1,713 $ 713 $ 284,337 Watch 96 18,083 4,381 — 1,507 — — 155 24,222 Special mention 66 2,265 — — 539 — — 70 2,940 Substandard — 289 — — — — — 7 296 Doubtful 1,598 — — — — — — — 1,598 Total $ 25,377 $ 185,452 $ 78,025 $ 5,863 $ 15,813 $ 205 $ 1,713 $ 945 $ 313,393 December 31, 2016 Credit Risk Profile by Internally Assigned Grade Real Estate Other Credit Exposure Commercial Commercial Multi-Family Construction Residential Leases Agriculture Consumer Total Grade: Pass $ 31,733 $ 166,769 $ 68,615 $ 6,770 $ 12,773 $ 404 $ 1,945 $ 1,093 $ 290,102 Watch 157 21,328 4,758 2,410 1,773 — 357 316 31,099 Special mention 721 3,032 — — 710 — — 219 4,682 Substandard 2,763 — — — 462 — — 22 3,247 Doubtful — — — — — — — — — Total $ 35,374 $ 191,129 $ 73,373 $ 9,180 $ 15,718 $ 404 $ 2,302 $ 1,650 $ 329,130 The following tables show an aging analysis of the loan portfolio at December 31, 2017 and 2016 (dollars in thousands): December 31, 2017 Past Due Past Due Greater Greater Than 30-59 Days 60-89 Days Than Total Past 90 Days and Past Due Past Due 90 Days Due Current Total Loans Accruing Nonaccrual Commercial: Commercial $ — $ — $ — $ — $ 25,377 $ 25,377 $ — $ 1,597 Real estate: Commercial — — 289 289 185,163 185,452 — 289 Multi-family — — — — 78,025 78,025 — — Construction — — — — 5,863 5,863 — — Residential 146 — — 146 15,667 15,813 — — Other: Leases — — — — 205 205 — — Agriculture — — — — 1,713 1,713 — — Consumer 1 — — 1 944 945 — 6 Total $ 147 $ — $ 289 $ 436 $ 312,957 $ 313,393 $ — $ 1,892 December 31, 2016 Past Due Past Due Greater Greater Than 30-59 Days 60-89 Days Than Total Past 90 Days and Past Due Past Due 90 Days Due Current Total Loans Accruing Nonaccrual Commercial: Commercial $ — $ — $ — $ — $ 35,374 $ 35,374 $ — $ — Real estate: Commercial — — — — 191,129 191,129 — — Multi-family — — — — 73,373 73,373 — — Construction — — — — 9,181 9,181 — — Residential — — — — 15,719 15,719 — — Other: Leases — — — — 404 404 — — Agriculture — — — — 2,302 2,302 — — Consumer — — — — 1,650 1,650 — 19 Total $ — $ — $ — $ — $ 329,130 $ 329,130 $ — $ 19 The following tables show information related to impaired loans as of and for the years ended December 31, 2017, 2016 and 2015 (dollars in thousands): December 31, 2017 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded: Commercial $ 1,598 $ 2,671 $ — $ 1,808 $ 108 Real estate: Commercial 5,674 5,907 — 5,701 281 Multi-family — — — — — Residential 329 416 — 331 19 Other: Consumer — — — — 2 $ 7,601 $ 8,994 $ — $ 7,840 $ 410 With an allowance recorded: Commercial $ — $ — $ — $ — $ — Real estate: Commercial 4,396 4,483 261 4,435 249 Multi-family 474 474 21 476 33 Residential 1,286 1,286 73 1,295 62 Other: Agriculture — — — — — Consumer — — — — — $ 6,156 $ 6,243 $ 355 $ 6,206 $ 344 Total: Commercial $ 1,598 $ 2,671 $ — $ 1,808 $ 108 Real estate: Commercial 10,070 10,390 261 10,136 530 Multi-family 474 474 21 476 33 Residential 1,615 1,702 73 1,626 81 Other: Agriculture — — — — — Consumer — — — — 2 $ 13,757 $ 15,237 $ 355 $ 14,046 $ 754 December 31, 2016 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded: Commercial $ — $ — $ — $ — $ — Real estate: Commercial 10,910 11,540 — 11,011 558 Multi-family — — — — 1 Residential 334 421 — 337 15 Other: Consumer — — — — 3 $ 11,244 $ 11,961 $ — $ 11,348 $ 577 With an allowance recorded: Commercial $ 157 $ 157 $ 11 $ 161 $ 11 Real estate: Commercial 3,244 3,336 246 3,308 168 Multi-family 482 482 2 485 33 Residential 1,813 1,813 133 1,837 87 Other: Agriculture 357 357 29 364 21 Consumer — — — — — $ 6,053 $ 6,145 $ 421 $ 6,155 $ 320 Total: Commercial $ 157 $ 157 $ 11 $ 161 $ 11 Real estate: Commercial 14,154 14,876 246 14,319 726 Multi-family 482 482 2 485 34 Residential 2,147 2,234 133 2,174 102 Other: Agriculture 357 357 29 364 21 Consumer — — — — 3 $ 17,297 $ 18,106 $ 421 $ 17,503 $ 897 December 31, 2015 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded: Commercial $ — $ — $ — $ — $ — Real estate: Commercial 12,269 12,902 — 12,345 595 Residential 338 338 — 338 — Other: Consumer — — — — — $ 12,607 $ 13,240 $ — $ 12,683 $ 595 With an allowance recorded: Commercial $ 121 $ 121 $ 25 $ 99 $ 9 Real estate: Commercial 5,597 5,693 598 4,953 320 Multi-family 488 488 5 492 29 Residential 2,114 2,201 204 2,140 91 Other: Agriculture 370 370 38 375 18 Consumer 68 68 29 76 — $ 8,758 $ 8,941 $ 899 $ 8,135 $ 467 Total: Commercial $ 121 $ 121 $ 25 $ 99 $ 9 Real estate: Commercial 17,866 18,595 598 17,298 915 Multi-family 488 488 5 492 29 Residential 2,452 2,539 204 2,478 91 Other: Agriculture 370 370 38 375 18 Consumer 68 68 29 76 — $ 21,365 $ 22,181 $ 899 $ 20,818 $ 1,062 Interest income on non-accrual loans is generally recognized on a cash basis and was approximately $2,000, $115,000 and $59,000 for the years ended December 31, 2017, 2016 and 2015. Troubled Debt Restructurings There was one modification made during the period ended December 31, 2017 and there were no modifications made during the period ended December 31, 2016 that were considered as troubled debt restructurings. The modification of the terms of the loan included a reduction of the stated interest rate for eighteen months according to a bankruptcy court-order as part of a debtor-in-possession financing agreement. The loan had a pre-modification and post-modification outstanding recorded investment of $2,692,000. As of December 31, 2017 and 2016, the Company has a recorded investment in troubled debt restructurings of $8,403,000 and $7,994,000, respectively. The Company has allocated $72,000 and $111,000 of specific allowance for those loans at December 31, 2017 and 2016 and has not committed to lend additional amounts The Company has not committed to lend additional amounts as of December 31, 2017 or December 31, 2016 to borrowers with outstanding loans that are classified as troubled debt restructurings. There were no payment defaults on troubled debt restructurings within 12 months following the modification during the year ended December 31, 2017 or December 31, 2016. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy. |
8. PREMISES AND EQUIPMENT
8. PREMISES AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
PREMISES AND EQUIPMENT | Premises and equipment consisted of the following (dollars in thousands): December 31, 2017 2016 Land $ 206 $ 206 Building and improvements 853 830 Furniture, fixtures and equipment 6,058 5,973 Leasehold improvements 1,690 1,688 8,807 8,697 Less accumulated depreciation and amortization (7,649 ) (7,335 ) $ 1,158 $ 1,362 Depreciation and amortization included in occupancy and furniture and equipment expense totaled $333,000, $420,000 and $430,000 for the years ended December 31, 2017, 2016 and 2015, respectively. |
9. INTEREST-BEARING DEPOSITS
9. INTEREST-BEARING DEPOSITS | 12 Months Ended |
Dec. 31, 2017 | |
Interest-bearing Deposit Liabilities [Abstract] | |
INTEREST-BEARING DEPOSITS | Interest-bearing deposits consisted of the following (dollars in thousands): December 31, 2017 2016 Savings $ 66,130 $ 64,740 Money market 130,032 131,342 NOW accounts 64,709 64,652 Time, $250,000 or more 45,826 45,836 Other time 33,855 37,123 $ 340,552 $ 343,693 The Company held $29,000,000 in certificates of deposit for the State of California as of December 31, 2017 and 2016. This amount represents 5.2% of total deposit balances at December 31, 2017 and 5.3% at December 31, 2016. Aggregate annual maturities of time deposits are as follows (dollars in thousands): Year Ending December 31, 2018 $ 55,400 2019 6,488 2020 4,399 2021 8,434 2022 4,960 Thereafter — $ 79,681 Interest expense recognized on interest-bearing deposits consisted of the following (dollars in thousands): Year Ended December 31, 2017 2016 2015 Savings $ 22 $ 19 $ 29 Money market 123 128 218 NOW accounts 16 18 26 Time Deposits 694 565 544 $ 855 $ 730 $ 817 |
10. BORROWING ARRANGEMENTS
10. BORROWING ARRANGEMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
BORROWING ARRANGEMENTS | The Company has $17,000,000 in unsecured short-term borrowing arrangements to purchase Federal funds with two of its correspondent banks. There were no advances under the borrowing arrangements as of December 31, 2017 and 2016. In addition, the Company has a line of credit available with the FHLB which is secured by pledged mortgage loans (see Note 6) and investment securities (see Note 5). Borrowings may include overnight advances as well as loans with a term of up to thirty years. Advances totaling $15,500,000 were outstanding from the FHLB at December 31, 2017, bearing fixed interest rates ranging from 1.18% to 1.90% and maturing between July 20, 2018 and April 12, 2021. Advances totaling $15,500,000 were outstanding from the FHLB at December 31, 2016, bearing fixed interest rates ranging from 1.01% to 1.52% and maturing between May 22, 2017 and July 13, 2020. Amounts available under the borrowing arrangement with the FHLB at December 31, 2017 and 2016 totaled $117,546,000 and $100,187,000, respectively. In addition, the Company entered into a secured borrowing agreement with the FRB in 2008. The borrowing arrangement is secured by pledging selected loans (see Note 6) and investment securities (see Note 5). There were no advances outstanding as of December 31, 2017 and 2016. Amounts available under the borrowing arrangement with the FRB at December 31, 2017 and 2016 totaled $9,085,000 and $11,068,000, respectively. The following table summarizes these borrowings (dollars in thousands): December 31, 2017 2016 Weighted Weighted Average Average Amount Rate Amount Rate Short-term portion of borrowings $ 3,500 1.39 % $ 3,500 1.01 % Long-term borrowings 12,000 1.41 % 12,000 1.32 % $ 15,500 1.41 % $ 15,500 1.25 % Maturities on these borrowings are as follows (dollars in thousands): Year Ending December 31, 2018 $ 3,500 2019 5,000 2020 5,000 2021 2,000 Thereafter — $ 15,500 |
11. INCOME TAXES
11. INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | The provision for income taxes for the years ended December 31, 2017, 2016 and 2015 consisted of the following (dollars in thousands): Federal State Total 2017 Current $ 1,397 $ 608 $ 2,005 Deferred 1,222 25 1,247 Provision for income taxes $ 2,619 $ 633 $ 3,252 2016 Current $ 2,701 $ 974 $ 3,675 Deferred (308 ) 25 (283 ) Provision for income taxes $ 2,393 $ 999 $ 3,392 2015 Current $ 1,482 $ 719 $ 2,201 Deferred 409 64 473 Provision for income taxes $ 1,891 $ 783 $ 2,674 Deferred tax assets (liabilities) consisted of the following (dollars in thousands): December 31, 2017 2016 Deferred tax assets: Allowance for loan and lease losses $ 1,458 $ 2,207 Unrealized gains on available-for-sale investment securities 135 — Deferred compensation 1,945 2,688 Future state tax deduction 132 347 Other 108 197 Total deferred tax assets 3,778 5,439 Deferred tax liabilities: Future liability of state deferred tax assets (237 ) (392 ) Unrealized gains on available-for-sale investment securities — (372 ) Deferred loan costs (146 ) (229 ) Federal Home Loan Bank stock dividends (150 ) (211 ) Other real estate owned (55 ) (77 ) Premises and equipment (45 ) (38 ) Total deferred tax liabilities (633 ) (1,319 ) Net deferred tax assets $ 3,145 $ 4,120 The Company and its subsidiaries file income tax returns in the United States and California jurisdictions. There are currently no pending federal, state or local income tax examinations by tax. Furthermore, with few exceptions, the Company is no longer subject to the examination by federal taxing authorities for the years ended before December 31, 2014 and by state and local taxing authorities for years before December 31, 2013. The unrecognized tax benefits and changes therein and the interest and penalties accrued by the Company as of December 31, 2017 were not significant. The provision for income taxes differs from amounts computed by applying the statutory Federal income tax rate of 34% in 2017, 2016 and 2015 to income before income taxes. The significant items comprising these differences consisted of the following: Year Ended December 31, 2017 2016 2015 Federal income tax statutory rate 34.0 % 34.0 % 34.0 % State franchise tax, net of Federal tax effect 6.5 % 7.1 % 6.5 % Effect of Federal rate reduction on deferred tax assets 19.0 % — — Tax benefit of interest on loans to/investments in states and political subdivisions (6.1 )% (4.7 )% (4.5 )% Tax-exempt income from life insurance policies (1.7 )% (1.1 )% (1.3 )% Equity compensation expense 0.1 % 0.1 % 0.1 % Other (1.4 )% (0.8 )% (1.1 )% Effective tax rate 50.4 % 34.6 % 33.7 % |
12. COMMITMENTS AND CONTINGENCI
12. COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Leases The Company leases branch facilities, administrative offices and various equipment under noncancelable operating leases which expire on various dates through the year 2024. Certain of the leases have five year renewal options. One of the branch facilities is leased from a current member of the Company’s Board of Directors (see Note 17). Future minimum lease payments are as follows (dollars in thousands): Year Ending December 31, 2018 $ 765 2019 658 2020 589 2021 556 2022 553 Thereafter 888 $ 4,009 Rental expense included in occupancy, furniture and equipment expense totaled $755,000, $858,000 and $837,000 for the years ended December 31, 2017, 2016 and 2015, respectively. Financial Instruments With Off-Balance-Sheet Risk The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business in order to meet the financing needs of its customers and to reduce its exposure to fluctuations in interest rates. These financial instruments consist of commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized on the consolidated balance sheet. The Company’s exposure to credit loss in the event of nonperformance by the other party for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and standby letters of credit as it does for loans included on the consolidated balance sheet. The following financial instruments represent off-balance-sheet credit risk (dollars in thousands): December 31, 2017 2016 Commitments to extend credit: Revolving lines of credit secured by 1-4 family residences $ 175 $ 251 Commercial real estate, construction and land development commitments secured by real estate 3,565 10,027 Other unused commitments, principally commercial loans 7,183 9,450 $ 10,923 $ 19,728 Standby letters of credit $ 121 $ 238 At inception, real estate loan commitments are generally secured by property with a loan to value ratio of 55% to 75%. In addition, the majority of the Company’s commitments have variable rates. Financial Instruments With Off-Balance-Sheet Risk Commitments to extend credit are agreements to lend to a client as long as there is no violation of any conditions established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Each client’s creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on management’s credit evaluation of the borrower. Collateral held varies but may include accounts receivable, inventory, equipment and deeds of trust on real estate and income-producing commercial properties. Standby letters of credit are conditional commitments issued to guarantee the performance or financial obligation of a client to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to clients. Significant Concentrations of Credit Risk The Company grants real estate mortgage, real estate construction, commercial, agricultural and consumer loans to clients throughout Northern California. In management’s judgment, a concentration exists in real estate-related loans which represented approximately 91% and 88% of the Company’s loan portfolio at December 31, 2017 and 2016, respectively. A continued substantial decline in the economy in general, or a continued decline in real estate values in the Company’s primary market areas in particular, could have an adverse impact on collectability of these loans. However, personal and business income represents the primary source of repayment for a majority of these loans. Correspondent Banking Agreements The Company maintains funds on deposit with other federally insured financial institutions under correspondent banking agreements. The Company had $6,882,000 in uninsured deposits at December 31, 2017. The Company had $6,237,000 in uninsured deposits at December 31, 2016. Contingencies The Company is subject to legal proceedings and claims which arise in the ordinary course of business. In the opinion of management, the amount of ultimate liability with respect to such actions will not materially affect the consolidated financial position or results of operations of the Company. |
13. SHAREHOLDERS' EQUITY
13. SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | Earnings Per Share A reconciliation of the numerators and denominators of the basic and diluted earnings per share computations is as follows (dollars and shares in thousands, except per share data): Weighted Average Number of Net Shares Per-Share For the Year Ended Income Outstanding Amount December 31, 2017 Basic earnings per share $ 3,198 6,349 $ 0.50 Effect of dilutive stock-based compensation — 78 Diluted earnings per share $ 3,198 6,427 $ 0.50 December 31, 2016 Basic earnings per share $ 6,404 6,747 $ 0.95 Effect of dilutive stock-based compensation — 36 Diluted earnings per share $ 6,404 6,783 $ 0.94 December 31, 2015 Basic earnings per share $ 5,268 7,561 $ 0.70 Effect of dilutive stock-based compensation — 18 Diluted earnings per share $ 5,268 7,579 $ 0.70 Stock options for 34,736 shares, 98,783 shares and 188,735 shares of common stock were not considered in computing diluted earnings per common share for the years ended December 31, 2017, 2016 and 2015, respectively, because they were antidilutive. Stock Based Compensation In 2000, the Board of Directors adopted and the Company’s shareholders approved a stock option plan (the “2000 Plan”), under which 54,470 options remain outstanding at December 31, 2017. On March 17, 2010, the Board of Directors adopted the 2010 Equity Incentive Plan (the “2010 Plan”). The 2010 Plan was approved by the Company’s shareholders on May 20, 2010. The total number of authorized shares that are available for issuance under the 2010 Plan is 1,325,423. The 2010 Plan provides for the following types of stock-based awards: incentive stock options; nonqualified stock options; stock appreciation rights; restricted stock; restricted performance stock; unrestricted Company stock; and performance units. Awards granted under the 2000 Plan were either incentive stock options or nonqualified stock options. The 2010 Plan and the 2000 Plan (collectively the “Plans”), under which equity incentives may be granted to employees and directors under incentive and nonstatutory agreements, require that the option price may not be less than the fair value of the stock at the date the option is granted. The option awards under the Plans expire on dates determined by the Board of Directors, but not later than ten years from the date of award. The vesting period is generally five years; however, the vesting period can be modified at the discretion of the Company’s Board of Directors. Outstanding option awards under the Plans are exercisable until their expiration; however, no new options will be awarded under the 2000 Plan. The Plans do not provide for the settlement of awards in cash and new shares are issued upon exercise of an option. 2015 Dividend yield 0.0 % Expected volatility 28.1 % Risk-free interest rate 1.92 % Expected option life in years 7 Weighted average fair value of options granted during the year $ 3.24 There were no options granted in 2016 or in 2017 under either stock-based compensation plans. A summary of the outstanding and nonvested stock option activity for the year ended December 31, 2017 is as follows: Outstanding Nonvested Weighted Weighted Average Average Exercise Grant Date Price Fair Value Shares Per Share Shares Per Share Balance, January 1, 2017 186,023 $ 12.92 44,243 $ 2.81 Options granted — $ — — $ — Options vested — $ — (29,505 ) $ 2.84 Options exercised (41,898 ) $ 8.38 — $ — Options expired or canceled (46,582 ) $ 20.46 — $ — Balance, December 31, 2017 97,543 $ 11.26 14,738 $ 2.93 A summary of options as of December 31, 2017 is as follows: Nonvested: Weighted average exercise price of nonvested stock options $ 9.29 Aggregate intrinsic value of nonvested stock options $ 87,759 Weighted average remaining contractual term in years of nonvested stock options 7.00 Vested: Number of vested stock options 82,805 Number of options expected to vest 14,738 Weighted average exercise price per share $ 11.61 Aggregate intrinsic value $ 331,381 Weighted average remaining contractual term in years 2.44 Number of Weighted Number of Options Average Options Outstanding Remaining Exercisable December 31, Contractual December 31, Range of Exercise Prices 2017 Life 2017 $7.07- $11.66 63,520 4.73 years 48,787 $11.67- $18.10 34,023 0.15 years 34,018 97,543 82,805 Restricted Stock Restricted stock awards are grants of shares of the Company’s common stock that are subject to forfeiture until specific conditions or goals are met. Conditions may be based on continuing employment or service and/or achieving specified performance goals. During the period of restriction, Plan participants holding restricted share awards have voting and cash dividend rights. The restrictions lapse in accordance with a schedule or with other conditions determined by the Board of Directors as reflected in each award agreement. Upon the vesting of each restricted stock award, the Company issues the associated common shares from its inventory of authorized common shares. All outstanding awards under the Plan immediately vest in the event of a change of control of the Company. The shares associated with any awards that fail to vest become available for re-issuance under the Plan. The following is a summary of stock-based compensation information as of or for the years ended December 31, 2017, 2016 and 2015: 2017 2016 2015 (Dollars in thousands) Total intrinsic value of options exercised $ 235 $ 3 $ — Aggregate cash received for option exercises $ 351 $ 13 $ — Total fair value of options vested $ 57 $ 41 $ 24 Total compensation cost, options and restricted stock $ 273 $ 331 $ 271 Tax benefit recognized $ 99 $ 116 $ 94 Net compensation cost, options and restricted stock $ 174 $ 215 $ 176 Total compensation cost for nonvested option awards not yet recognized $ 47 $ 99 $ 165 Weighted average years for compensation cost for nonvested options to be recognized 1.0 1.3 2.0 Total compensation cost for restricted stock not yet recognized $ 284 $ 376 $ 530 Weighted average years for compensation cost for restricted stock to be recognized 1.1 1.6 1.6 There were 32,315 shares of restricted stock awarded during 2017. Of the 32,315 restricted common shares, 7,862 will vest one year from the date of the award, 7,333 will vest 33% per year from the date of the award, and 2,087 will vest 20% per year from the date of the award. The remaining 15,033 are considered performance based awards. The awards can be earned based upon the stock performance of the Company’s common stock in relationship to the common stock of the Company’s peer group. The number of shares can be adjusted by up to 150% of the award if outstanding performance is reached or can be forfeited if minimum performance is not reached. The remaining 15,033 awards are related to the 2017-2018 performance period and vest one year and a day after the two year performance period or January 1, 2020. The weighted average contractual term over which the restricted stock will vest is 2.60 years. There were 34,888 shares of restricted stock awarded during 2016. Of the 34,888 restricted common shares, 10,094 will vest one year from the date of the award and 1,829 will vest 20% per year from the date of the award. The remaining 22,965 are considered performance based awards. The awards can be earned based upon the stock performance of the Company’s common stock in relationship to the common stock of the Company’s peer group. The number of shares can be adjusted by up to 150% of the award if outstanding performance is reached or can be forfeited if minimum performance is not reached. Of the 22,965 performance based awards issued in 2016, 5,312 were additional awards based on performance of the Company’s common stock and related to the awards initially awarded in 2015 for the 2015-2016 performance period. The additional shares were earned as the target was exceeded and the employees received 125% of the initial award. The remaining 17,833 awards are related to the 2016-2017 performance period and were forfeited as the Company did not meet the minimum performance target or the employee was terminated prior to the end of the performance period. The weighted average contractual term over which the restricted stock will vest is 1.50 years. Weighted Average Grant Date Restricted Stock Shares Fair Value Nonvested at January 1, 2017 71,824 $ 9.69 Awarded 32,315 $ 14.72 Vested (26,257 ) $ 9.69 Cancelled (28,829 ) $ 11.03 Nonvested at December 31, 2017 49,053 $ 12.27 The shares awarded to employees and directors under the restricted stock agreements vest on applicable vesting dates only to the extent the recipient of the shares is then an employee or a director of the Company or one of its subsidiaries, and each recipient will forfeit all of the shares that have not vested on the date his or her employment or service is terminated. Of the 26,257 shares that vested in 2017, 11,875 vested prior to their original vesting period as a result of an agreement with the Company’s former Chief Executive Officer in connection with his departure in 2017. New shares are issued upon vesting of the restricted common stock. Stock Repurchase Program On January 20, 2016, the Company approved and authorized a stock repurchase program for 2016 (the “2016 Program”). The 2016 Program authorized the repurchase during 2016 of up to 5% of the outstanding shares of the Company’s common stock. In addition, on April 20, 2016, the Company approved and authorized an additional amount of 5% to be purchased under the 2016 Program. During 2016, the Company repurchased 716,897 shares of its common stock at an average price of $10.34 per share. On January 25, 2017, the Company approved and authorized a stock repurchase program for 2017 (the “2017 Program”). The 2017 Program authorized the repurchase during 2017 of up to 5% of the outstanding shares of the Company’s common stock. In addition, on October 18, 2017, the Company approved and authorized an additional amount of 5% to be purchased under the 2017 Program. During 2017, the Company repurchased 574,748 shares of its common stock at an average price of $14.99 per share On January 24, 2018, the Company approved and authorized a stock repurchase program for 2018 (the “2018 Program”). The 2018 Program authorized the repurchase during 2018 of up to 5% of the outstanding shares of the Company’s common stock, or approximately 308,618 shares based on the 6,132,362 shares outstanding as of December 31, 2017. Any repurchases under the 2018 Program will be made from time to time by the Company in the open market as conditions allow. All such transactions will be structured to comply with Commission Rule 10b-18 and all shares repurchased under the 2018 Program will be retired. The number, price and timing of the repurchases will be at the Company’s sole discretion and the 2018 Program may be re-evaluated depending on market conditions, capital and liquidity needs or other factors. Based on such re-evaluation, the Board of Directors may suspend, terminate, modify or cancel the 2018 Program at any time without notice. |
14. REGULATORY MATTERS
14. REGULATORY MATTERS | 12 Months Ended |
Dec. 31, 2017 | |
Regulatory Capital Requirements [Abstract] | |
REGULATORY MATTERS | Dividends Upon declaration by the Board of Directors of the Company, all shareholders of record will be entitled to receive dividends. Beginning in January of 2017, the Company reinstated paying quarterly cash dividends on its common stock. In 2017, the Company declared cash dividends in the amount of $0.05 per common share for each quarter, totaling $0.20 per common share for the year ended December 31, 2017. There is no assurance, however, that any dividends will be paid in the future since they are subject to regulatory restrictions, and dependent upon earnings, financial condition and capital requirements of the Company and its subsidiaries. There were no cash dividends declared or paid in 2016 or 2015. As a California corporation, the Company’s ability to pay cash dividends is subject to restrictions set forth in the California General Corporation Law (the “Corporation Law”). The Corporation Law provides that neither a corporation nor any of its subsidiaries shall make a distribution to the corporation’s shareholders unless the board of directors has determined in good faith either of the following: (1) the amount of retained earnings of the corporation immediately prior to the distribution equals or exceeds the sum of (A) the amount of the proposed distribution plus (B) the preferential dividends arrears amount; or (2) immediately after the distribution, the value of the corporation’s assets would equal or exceed the sum of its total liabilities plus the preferential rights amount. The good faith determination of the board of directors may be based upon (1) financial statements prepared on the basis of reasonable accounting practices and principles, (2) a fair valuation, or (3) any other method reasonable under the circumstances; provided, that a distribution may not be made if the corporation or subsidiary making the distribution is, or is likely to be, unable to meet its liabilities (except those whose payment is otherwise adequately provided for) as they mature. The term “preferential dividends arrears amount” means the amount, if any, of cumulative dividends in arrears on all shares having a preference with respect to payment of dividends over the class or series to which the applicable distribution is being made, provided that if the articles of incorporation provide that a distribution can be made without regard to preferential dividends arrears amount, then the preferential dividends arrears amount shall be zero. The term “preferential rights amount” means the amount that would be needed if the corporation were to be dissolved at the time of the distribution to satisfy the preferential rights, including accrued but unpaid dividends, of other shareholders upon dissolution that are superior to the rights of the shareholders receiving the distribution, provided that if the articles of incorporation provide that a distribution can be made without regard to any preferential rights, then the preferential rights amount shall be zero. In addition, the California Financial Code restricts the total dividend payment of any state banking corporation in any calendar year to the lesser of (1) the bank’s retained earnings or (2) the bank’s net income for its last three fiscal years, less distributions made to shareholders during the same three-year period. In addition, subject to prior regulatory approval, any state banking corporation may request an exception to this restriction. Regulatory Capital The Company and ARB are subject to certain regulatory capital requirements administered by the Board of Governors of the Federal Reserve System and the FDIC. Failure to meet these minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, banks must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s and American River Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. As of December 31, 2017 and 2016, the most recent regulatory notification categorized American River Bank as well capitalized under the regulatory framework for prompt corrective action plan. There are no conditions or events since that notification that management believes have changed the Bank’s categories. Effective January 1, 2015, bank holding companies with consolidated assets of $1 Billion or more and banks like American River Bank must comply with new minimum capital ratio requirements to be phased-in between January 1, 2015 and January 1, 2019, which would consist of the following: (i) a new common equity Tier 1 capital to total risk weighted assets ratio of 4.5%; (ii) a Tier 1 capital to total risk weighted assets ratio of 6% (increased from 4%); (iii) a total capital to total risk weighted assets ratio of 8% (unchanged from current rules); and (iv) a Tier 1 capital to adjusted average total assets (“leverage”) ratio of 4%. In addition, a “capital conservation buffer,” is established which when fully phased-in will require maintenance of a minimum of 2.5% of common equity Tier 1 capital to total risk weighted assets in excess of the regulatory minimum capital ratio requirements described above. The 2.5% buffer will increase the minimum capital ratios to (i) a common equity Tier 1 capital ratio of 7.0%, (ii) a Tier 1 capital ratio of 8.5%, and (iii) a total capital ratio of 10.5%. The new buffer requirement will be phased-in between January 1, 2016 and January 1, 2019. If the capital ratio levels of a banking organization fall below the capital conservation buffer amount, the organization will be subject to limitations on (i) the payment of dividends; (ii) discretionary bonus payments; (iii) discretionary payments under Tier 1 instruments; and (iv) engaging in share repurchases. To be categorized as well capitalized, ARB must maintain minimum total risk-based, Tier 1 risk-based, common equity Tier 1 risk-based and Tier 1 leverage ratios as set forth in the table below. Management believes that the Company and ARB met all their capital adequacy requirements as of December 31, 2017 and 2016. December 31, 2017 2016 Amount Ratio Amount Ratio (Dollars in thousands) Leverage Ratio American River Bankshares and Subsidiaries $ 60,921 9.5 % $ 66,985 10.5 % Minimum regulatory requirement * $ 33,230 5.3 % $ 29,499 4.6 % American River Bank $ 60,041 9.3 % $ 67,369 10.6 % Minimum requirement for “Well-Capitalized” institution $ 32,215 5.0 % $ 31,874 5.0 % Minimum regulatory requirement* $ 33,826 5.3 % $ 29,483 4.6 % Common Equity Tier 1 Risk-Based Capital Ratio American River Bank $ 60,041 17.7 % $ 67,369 18.9 % Minimum requirement for “Well-Capitalized” institution $ 22,038 6.5 % $ 23,132 6.5 % Minimum regulatory requirement* $ 19,495 5.8 % $ 18,239 5.1 % Tier 1 Risk-Based Capital Ratio American River Bankshares and Subsidiaries $ 60,921 18.1 % $ 66,985 19.0 % Minimum regulatory requirement* $ 24,423 7.3 % $ 23,329 6.6 % American River Bank $ 60,041 17.7 % $ 67,369 18.9 % Minimum requirement for “Well-Capitalized” institution $ 27,123 8.0 % $ 28,499 8.0 % Minimum regulatory requirement* $ 24,581 7.3 % $ 23,577 6.6 % Total Risk-Based Capital Ratio American River Bankshares and Subsidiaries $ 65,135 19.3 % $ 71,392 20.3 % Minimum regulatory requirement* $ 31,185 9.3 % $ 30,407 8.6 % American River Bank $ 64,282 19.0 % $ 71,822 20.2 % Minimum requirement for “Well-Capitalized” institution $ 33,928 10.0 % $ 35,624 10.0 % Minimum regulatory requirement* $ 31,383 9.3 % $ 30,726 8.6 % * Ratio for regulatory requirement includes the capital conservation buffer of 1.25% as of December 31, 2017 and 0.625% as of December 31, 2016. |
15. OTHER NONINTEREST INCOME AN
15. OTHER NONINTEREST INCOME AND EXPENSE | 12 Months Ended |
Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |
OTHER NONINTEREST INCOME AND EXPENSE | Other noninterest income consisted of the following (dollars in thousands): Year Ended December 31, 2017 2016 2015 Merchant fee income $ 411 $ 377 $ 378 Increase in cash surrender value of life insurance policies (Note 16) 317 322 316 Other 242 251 237 $ 970 $ 950 $ 931 Other noninterest expense consisted of the following (dollars in thousands): Year Ended December 31, 2017 2016 2015 Professional fees $ 1,140 $ 995 $ 863 Outsourced item processing 319 366 360 Directors’ expense 427 417 402 Telephone and postage 360 357 368 Stationery and supplies 135 141 143 Advertising and promotion 175 129 164 Other operating expenses 610 595 662 $ 3,166 $ 3,000 $ 2,962 |
16. EMPLOYEE BENEFIT PLANS
16. EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | American River Bankshares 401(k) Plan The American River Bankshares 401(k) Plan has been in place since January 1, 1993 and is available to all employees. Under the plan, the Company will match 100% of each participant’s contribution up to 3% of annual compensation plus 50% of the next 2% of annual compensation. Employer Safe Harbor matching contributions are 100% vested upon entering the plan. The Company’s contributions totaled $196,000, $195,000 and $202,000 for the years ended December 31, 2017, 2016 and 2015, respectively. Employee Stock Purchase Plan The Company contracts with an administrator for an Employee Stock Purchase Plan which allows employees to purchase the Company’s stock at fair market value as of the date of purchase. The Company bears all costs of administering the Plan, including broker’s fees, commissions, postage and other costs actually incurred. Employee Stock Purchase Plan The Company contracts with an administrator for an Employee Stock Purchase Plan which allows employees to purchase the Company’s stock at fair market value as of the date of purchase. The Company bears all costs of administering the Plan, including broker’s fees, commissions, postage and other costs actually incurred. American River Bankshares Deferred Compensation Plan The Company has established a Deferred Compensation Plan for certain members of the management team and a Deferred Fee Agreement for Non-Employee Directors for the purpose of providing the opportunity for participants to defer compensation. Participants of the management team, who are selected by a committee designated by the Board of Directors, may elect to defer annually a minimum of $5,000 or a maximum of eighty percent of their base salary and all of their cash bonus. Directors may also elect to defer up to one hundred percent of their monthly fees. The Company bears all administration costs and accrues interest on the participants’ deferred balances at a rate based on U.S. Government Treasury rates plus 4.0%. This rate was 5.93% and 5.76% for 2017 and 2016, respectively. Deferred compensation, including interest earned, totaled $3,216,000 and $2,994,000 at December 31, 2017 and 2016, respectively. The expense recognized under this plan totaled $183,000, $168,000 and $156,000 for the years ended December 31, 2017, 2016 and 2015, respectively. Salary Continuation Plan The Company has agreements to provide certain current executives, or their designated beneficiaries, with annual benefits for up to 15 years after retirement or death. These benefits are substantially equivalent to those available under life insurance policies purchased by the Company on the lives of the executives. The Company accrues for these future benefits from the effective date of the agreements until the executives’ expected final payment dates in a systematic and rational manner. As of December 31, 2017 and 2016, the Company had accrued $1,474,000 and $1,335,000, respectively, for potential benefits payable. This payable approximates the then present value of the benefits expected to be provided at retirement and is included in accrued interest payable and other liabilities on the consolidated balance sheet. The expense recognized under this plan totaled $234,000, $178,000 and $168,000 for the years ended December 31, 2017, 2016 and 2015, respectively. In connection with these current and former plans, the Company invested in single premium life insurance policies with cash surrender values totaling $15,122,000 and $14,803,000 at December 31, 2017 and 2016, respectively. Tax-exempt income on these policies, net of expense, totaled approximately $317,000, $322,000 and $316,000 for the years ended December 31, 2017, 2016 and 2015, respectively. |
17. RELATED PARTY TRANSACTIONS
17. RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | During the normal course of business, the Company enters into transactions with related parties, including Directors and affiliates. The following is a summary of the aggregate activity involving related party borrowers during 2017 (dollars in thousands): Balance, January 1, 2017 $ 740 Disbursements — Amounts repaid (32 ) Balance, December 31, 2017 $ 708 There are no undisbursed commitments to related parties as of December 31, 2017. The Company also leases one of its branch facilities from a current member of the Company’s Board of Directors. Rental payments to the Director totaled $76,000, $110,000 and $108,000 for the years ended December 31, 2017, 2016 and 2015, respectively. |
18. PARENT ONLY CONDENSED FINAN
18. PARENT ONLY CONDENSED FINANCIAL STATEMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
PARENT ONLY CONDENSED FINANCIAL STATEMENTS | CONDENSED BALANCE SHEETS December 31, 2017 and 2016 (Dollars in thousands) 2017 2016 ASSETS Cash and due from banks $ 1,605 $ 259 Investment in subsidiaries 76,040 84,234 Other assets 264 347 $ 77,909 $ 84,840 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities: Other liabilities $ 988 $ 990 Total liabilities 988 990 Shareholders’ equity: Common stock 34,463 42,484 Retained earnings 42,779 40,822 Accumulated other comprehensive (loss)income, net of taxes (321 ) 544 Total shareholders’ equity 76,921 83,850 $ 77,909 $ 84,840 CONDENSED STATEMENTS OF INCOME For the Years Ended December 31, 2017, 2016 and 2015 (Dollars in thousands) 2017 2016 2015 Income: Dividends declared by subsidiaries- eliminated in consolidation $ 11,118 $ 7,675 $ 7,900 Management fee from subsidiaries- eliminated in consolidation other income — — — Total income 11,118 7,675 7,900 Expenses: Professional fees 142 91 97 Directors’ expense 282 285 285 Other expenses 226 203 204 Total expenses 650 579 586 Income before equity in undistributed income of subsidiaries 10,468 7,096 7,314 Equity in distributed income of subsidiaries (7,554 ) (930 ) (2,287 ) Income before income taxes 2,914 6,166 5,027 Income tax benefit 284 238 241 Net income $ 3,198 $ 6,404 $ 5,268 CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2017, 2016 and 2015 (Dollars in thousands) 2017 2016 2015 Cash flows from operating activities: Net income $ 3,198 $ 6,404 $ 5,268 Adjustments to reconcile net income to net cash provided by operating activities: Distributed earnings of subsidiaries 8,852 2,088 2,287 Equity-based compensation expense 273 331 271 Increase in other assets (2,686 ) (1,393 ) (206 ) (Decrease) increase in other liabilities (1 ) 39 36 Net cash provided by operating activities 9,636 7,469 7,656 Cash flows from financing activities: Proceeds from exercised options 351 13 — Cash paid to repurchase common stock (8,641 ) (7,414 ) (7,843 ) Net cash used in financing activities (8,290 ) (7,401 ) (7,843 ) Net increase (decrease) in cash and cash equivalents 1,346 68 (187 ) Cash and cash equivalents at beginning of year 259 191 378 Cash and cash equivalents at end of year $ 1,605 $ 259 $ 191 Selected Quarterly Information (Unaudited) (In thousands, except per share and price range of common stock) March 31, June 30, September 30, December 31, 2017 Interest income $ 5,053 $ 5,121 $ 5,082 $ 5,158 Net interest income 4,811 4,869 4,803 4,870 Provision for loan and lease losses — — 300 150 Noninterest income 419 439 377 361 Noninterest expense (1) 3,430 3,368 3,312 3,939 Income before taxes 1,800 1,940 1,568 1,142 Net income (loss) (2) 1,184 1,297 1,109 (392 ) Basic earnings (loss) per share $ 0.18 $ 0.20 $ 0.18 $ (0.06 ) Diluted earnings (loss) per share 0.18 0.20 0.17 (0.06 ) Cash dividends per share 0.05 0.05 0.05 0.05 Price range, common stock $ 13.09-15.90 $ 13.46-15.20 $ 12.97-14.55 $ 13.95-15.69 2016 Interest income $ 5,276 $ 5,229 $ 5,304 $ 5,344 Net interest income 5,042 5,008 5,081 5,112 Provision for loan and lease losses — — (668 ) (676 ) Noninterest income 754 363 399 529 Noninterest expense 3,791 3,415 3,346 3,284 Income before taxes 2,005 1,956 2,802 3,033 Net income 1,372 1,304 1,813 1,915 Basic earnings per share $ .19 $ .19 $ .28 $ .29 Diluted earnings per share .19 .19 .27 .29 Cash dividends per share — — — — Price range, common stock $ 9.71-10.98 $ 9.69-10.97 $ 10.15-10.91 $ 10.59-15.99 (1) The increase in noninterest expense during the fourth quarter of 2017 was related to the leadership change that occurred during the fourth quarter of 2017. (2) The net loss in the fourth quarter of 2017 results from the increased expenses related to the leadership change and tax related expenses as the Company was required to write-down a portion of its deferred tax assets to comply with “H.R.1” commonly referred to as the Tax Cuts and Jobs Act. |
2. SUMMARY OF SIGNIFICANT ACC26
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
General | The accounting and reporting policies of the Company and its subsidiaries conform to accounting principles generally accepted in the United States of America and prevailing practices within the financial services industry. |
Reclassifications | Certain reclassifications have been made to prior years’ balances to conform to classifications used in 2017. Reclassifications did not affect prior year net income or shareholders’ equity. |
Principles of Consolidation | The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and accounts among the Company and its subsidiaries have been eliminated in consolidation. |
Use of Estimates | The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. |
Cash and Cash Equivalents | For the purpose of the statement of cash flows, cash and due from banks and Federal funds sold are considered to be cash equivalents. Generally, Federal funds are sold for one-day periods. |
Interest-Bearing Deposits in Banks | Interest-bearing deposits in banks mature within one year and are carried at cost. |
Investment Securities | Investments are classified into the following categories: · Available-for-sale securities, reported at fair value, with unrealized gains and losses excluded from earnings and reported, net of taxes, as accumulated other comprehensive income (loss) within shareholders’ equity. · Held-to-maturity securities, which management has the positive intent and ability to hold to maturity, reported at amortized cost. Management determines the appropriate classification of its investments at the time of purchase and may only change the classification in certain limited circumstances. All transfers between categories are accounted for at fair value. There were no transfers during the years ended December 31, 2017 and 2016. Gains or losses on the sale of investment securities are computed on the specific identification method. Interest earned on investment securities is reported in interest income, net of applicable adjustments for accretion of discounts and amortization of premiums. An investment security is impaired when its carrying value is greater than its fair value. Investment securities that are impaired are evaluated on at least a quarterly basis and more frequently when economic or market conditions warrant such an evaluation to determine whether a decline in their value is other than temporary. Management utilizes criteria such as the magnitude and duration of the decline and the intent and ability of the Company to retain its investment in the securities for a period of time sufficient to allow for an anticipated recovery in fair value, in addition to the reasons underlying the decline, to determine whether the loss in value is other than temporary. The term “other than temporary” is not intended to indicate that the decline is permanent, but indicates that the prospects for a near-term recovery of value is not necessarily favorable, or that there is a lack of evidence to support a realizable value equal to or greater than the carrying value of the investment. For debt securities, once a decline in value is determined to be other than temporary and management does not intend to sell the security or it is more likely than not that management will not be required to sell the security before recovery, only the portion of the impairment loss representing credit exposure is recognized as a charge to earnings, with the balance recognized as a charge to other comprehensive income. If management intends to sell the security or it is more likely than not that management will be required to sell the security before recovering its forecasted cost, the entire impairment loss is recognized as a charge to earnings. For equity securities, the entire amount of impairment is recognized through earnings. |
Federal Home Loan Bank Stock | Investments in Federal Home Loan Bank of San Francisco (the “FHLB”) stock are carried at cost and are redeemable at par with certain restrictions. Investments in FHLB stock are necessary to participate in FHLB programs. |
Loans and Leases | Loans and leases that management has both the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal amounts outstanding, adjusted for unearned income, deferred loan origination fees and costs, purchase premiums and discounts, write-downs and the allowance for loan and lease losses. Loan and lease origination fees, net of certain deferred origination costs, and purchase premiums and discounts are recognized as an adjustment to the yield of the related loans and leases. For all classes of loans and leases, the accrual of interest is discontinued when, in the opinion of management, there is an indication that the borrower may be unable to meet payment requirements within an acceptable time frame relative to the terms stated in the loan agreement. Upon such discontinuance, all unpaid accrued interest is reversed against current income unless the loan or lease is well secured and in the process of collection. Interest received on nonaccrual loans and leases is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, loans and leases are restored to accrual status when the obligation is brought current and has performed in accordance with the contractual terms for a reasonable period of time and the ultimate collectability of the total contractual principal and interest is no longer in doubt. Direct financing leases are carried net of unearned income. Income from leases is recognized by a method that approximates a level yield on the outstanding net investment in the lease. |
Loan Sales and Servicing | Included in the loan and lease portfolio are Small Business Administration (“SBA”) loans and Farm Service Agency guaranteed loans that may be sold in the secondary market. At the time the loan is sold, the related right to service the loan is either retained, with the Company earning future servicing income, or released in exchange for a one-time servicing-released premium. Loans subsequently transferred to the loan portfolio are transferred at the lower of cost or fair value at the date of transfer. Any difference between the carrying amount of the loan and its outstanding principal balance is recognized as an adjustment to yield by the interest method. There were no loans held for sale at December 31, 2017 and 2016. SBA and Farm Service Agency loans with unpaid balances of $138,000 and $170,000 were being serviced for others as of December 31, 2017 and 2016, respectively. The Company also serviced loans that are participated with other financial institutions totaling $7,941,000 and $7,740,000 as of December 31, 2017 and 2016, respectively. Servicing rights acquired through 1) a purchase or 2) the origination of loans which are sold or securitized with servicing rights retained are recognized as separate assets or liabilities. Servicing assets or liabilities are initially recorded at fair value and are subsequently amortized in proportion to and over the period of the related net servicing income or expense. Servicing assets are periodically evaluated for impairment. Servicing assets were not considered material for disclosure purposes at December 31, 2017 and 2016. |
Allowance for Loan and Lease Losses | The allowance for loan and lease losses is an estimate of probable credit losses inherent in the Company’s credit portfolio that have been incurred as of the balance-sheet date. The allowance is established through a provision for loan and lease losses which is charged to expense. Additions to the allowance are expected to maintain the adequacy of the total allowance after credit losses and loan growth. Credit exposures determined to be uncollectible are charged against the allowance. Cash received on previously charged off amounts is typically recorded as a recovery to the allowance. The overall allowance consists of two primary components, specific reserves related to impaired credits and general reserves for inherent probable losses related to credits that are not impaired. For all classes of the portfolio, a loan or lease is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the original agreement. Factors considered by management in determining impairment include payment status, and the probability of collecting scheduled principle and interest payments when due. Impaired loans are individually evaluated to determine the extent of impairment, if any, except for smaller-balance loans that are collectively evaluated for credit risk. When a loan or lease is impaired, the Company measures impairment based on the present value of expected future cash flows discounted at the credit’s original interest rate, the credit’s observable market price, or the fair value of the collateral if the credit is collateral dependent. A loan or lease is collateral dependent if the repayment of the credit is expected to be provided solely by the sale or operation of the underlying collateral. For all portfolio segments, a restructuring of a debt constitutes a troubled debt restructuring (“TDR”) if the Company grants a concession to the borrower for economic or legal reasons related to the borrower’s financial difficulties that it would not otherwise consider. Restructured workout loans typically present an elevated level of credit risk as the borrowers are not able to perform according to the original contractual terms. Loans or leases that are reported as TDRs are considered impaired and measured for impairment as described above. For all portfolio segments, the determination of the general reserve for loans and leases that are not impaired is based on estimates made by management, to include, but not limited to, consideration of historical losses by portfolio segment, internal asset classifications, and qualitative factors to include economic trends in the Company’s service areas, industry experience and trends, geographic concentrations, estimated collateral values, the Company’s underwriting policies, the character of the credit portfolio, and probable losses inherent in the portfolio taken as a whole. The Company determines a separate allowance for each portfolio segment. These portfolio segments include commercial, real estate construction (including land and development loans), residential real estate, multi-family real estate, commercial real estate, leases, agriculture, and consumer loans. The allowance for loan and lease losses attributable to each portfolio segment, which includes both impaired credits and credits that are not impaired, is combined to determine the Company’s overall allowance, which is included as a component of loans and leases on the consolidated balance sheet and available for all loss exposures. The Company assigns a risk rating to all loans and periodically performs detailed reviews of all such loans over a certain threshold to identify credit risks and to assess the overall collectability of the portfolio. These risk ratings are also subject to examination by independent specialists engaged by the Company and the Company’s regulators. During the internal reviews, management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which borrowers operate and the fair values of collateral securing these loans. These credit quality indicators are used to assign a risk rating to each individual credit. The risk ratings can be grouped into six major categories, defined as follows: Pass Watch Special Mention Substandard Doubtful Loss The general reserve component of the allowance for loan and lease losses also consists of reserve factors that are based on management’s assessment of the following for each portfolio segment: (1) inherent credit risk, (2) historical losses and (3) other qualitative factors. These reserve factors are inherently subjective and are driven by the repayment risk associated with each portfolio segment described below. Real Estate- Commercial Real Estate- Construction Real Estate- Multi-family Real Estate- Residential Commercial Lease Financing Receivable – Agricultural Consumer Although management believes the allowance to be adequate, ultimate losses may vary from its estimates. At least quarterly, the Board of Directors reviews the adequacy of the allowance, including consideration of the relative risks in the portfolio, current economic conditions and other factors. If the Board of Directors and management determine that changes are warranted based on those reviews, the allowance is adjusted. In addition, the Company’s primary regulators, the FDIC and the California Department of Business Oversight, as an integral part of their examination process, review the adequacy of the allowance. These regulatory agencies may require additions to the allowance based on their judgment about information available at the time of their examinations. |
Allowance for Credit Losses on Off-Balance-Sheet Credit Exposures | The Company also maintains a separate allowance for off-balance-sheet commitments. Management estimates probable incurred losses using historical data and utilization assumptions. The allowance for off-balance-sheet commitments is included in accrued interest payable and other liabilities on the consolidated balance sheet. |
Other Real Estate Owned (OREO) | Other real estate owned includes real estate acquired in full or partial settlement of loan obligations. When property is acquired, any excess of the recorded investment in the loan balance and accrued interest income over the estimated fair market value of the property less estimated selling costs is charged against the allowance for loan and lease losses. Any excess of the fair value over the loan balance less estimated selling costs is recorded as noninterest income-other income. A valuation allowance for losses on other real estate may be maintained to provide for temporary declines in value. The valuation allowance is established through a provision for losses on other real estate which is included in other expenses. Subsequent gains or losses on sales or write-downs resulting from permanent impairments are recorded in other income or expense as incurred |
Premises and Equipment | Premises and equipment are carried at cost less accumulated depreciation. Land is not depreciated. Depreciation is determined using the straight-line method over the estimated useful lives of the related assets. The useful life of the building and improvements is forty years. The useful lives of furniture, fixtures and equipment are estimated to be three to ten years. Leasehold improvements are amortized over the life of the asset or the term of the related lease, whichever is shorter. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation or amortization are removed from the accounts, and any resulting gain or loss is recognized in income for the period. The cost of maintenance and repairs is charged to expense as incurred. Impairment of long-lived assets is evaluated by management based upon an event or changes in circumstances surrounding the underlying assets which indicate long-lived assets may be impaired. |
Goodwill and Intangible Assets | Business combinations involving the Company’s acquisition of equity interests or net assets of another enterprise or the assumption of net liabilities in an acquisition of branches constituting a business may give rise to goodwill. Goodwill represents the excess of the cost of an acquired entity over the net of the amounts assigned to assets acquired and liabilities assumed. The value of goodwill is ultimately derived from the Company’s ability to generate net earnings after the acquisition and is not deductible for tax purposes. A decline in net earnings could be indicative of a decline in the fair value of goodwill and result in impairment. For that reason, goodwill is assessed for impairment at least annually. Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value. At December 31, 2017, the Company had one reporting unit and that reporting unit had positive equity and the Company elected to perform a qualitative assessment to determine if it was more likely than not that the fair value of the reporting unit exceeded its carrying value, including goodwill. The qualitative assessment indicated that it was more likely than not that the fair value of the reporting unit exceeded its carrying value, resulting in no impairment. |
Bank-Owned Life Insurance | The Company has purchased life insurance policies on certain key executives. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. |
Income Taxes | The Company files its income taxes on a consolidated basis with its subsidiaries. The allocation of income tax expense represents each entity’s proportionate share of the consolidated provision for income taxes. The Company accounts for income taxes using the balance sheet method, under which deferred tax assets and liabilities are recognized for the tax consequences of temporary differences between the reported amounts of assets and liabilities and their tax bases. The deferred provision for income taxes is the result of the net change in the deferred tax asset and deferred tax liability balances during the year. This amount combined with the current taxes payable or refundable, results in the income tax expense for the current year. On the consolidated balance sheet, net deferred tax assets are included in accrued interest receivable and other assets. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. On December 22, 2017, President Trump signed into law “H.R.1” commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). During 2017, the Company recorded an income tax expense adjustment of $1,220,000 related to the Tax Act. The adjustment relates to revaluing the Company’s net deferred tax assets using the new lower corporate federal income tax rate of 21% which becomes effective January 1, 2018, a reduction from the Company’s 2017 rate of 34%. The realization of deferred income tax assets is assessed and a valuation allowance is recorded if it is “more likely than not” that all or a portion of the deferred tax assets will not be realized. “More likely than not” is defined as greater than a 50% chance. All available evidence, both positive and negative is considered to determine whether, based on the weight of that evidence, a valuation allowance is needed. Based upon the Company’s analysis of available evidence, the Company determined that it is “more likely than not” that all of the deferred income tax assets as of December 31, 2017 and 2016 will be fully realized and therefore no valuation allowance was recorded. The Company uses a comprehensive model for recognizing, measuring, presenting and disclosing in the financial statements tax positions taken or expected to be taken on a tax return. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Interest expense and penalties associated with unrecognized tax benefits, if any, are classified as income tax expense in the consolidated statement of income. |
Comprehensive Income | Comprehensive income is reported in addition to net income for all periods presented. Comprehensive income consists of net income and other comprehensive income. Unrealized gains and losses on the Company’s available-for-sale investment securities are included in other comprehensive income (loss), adjusted for realized gains or losses included in net income, net of tax. Total comprehensive income and the components of accumulated other comprehensive income (loss) are presented in the consolidated statements of comprehensive income. |
Earnings Per Share | Basic earnings per share (“EPS”), which excludes dilution, is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock, such as stock options or restricted stock, result in the issuance of common stock that share in the earnings of the Company. The treasury stock method has been applied to determine the dilutive effect of stock options and restricted stock in computing diluted EPS. Earnings and dividends per share are restated for all stock splits and stock dividends through the date of issuance of the consolidated financial statements. There were no stock splits or stock dividends in 2017, 2016 or 2015. |
Stock-Based Compensation | At December 31, 2017, the Company had two stock-based compensation plans, which are described more fully in Note 13. Compensation expense recorded in 2017, 2016, and 2015 totaled $273,000, $331,000 and $270,000, respectively. Compensation expense is recognized over the vesting period on a straight line accounting basis. The fair value of each option award is estimated on the date of grant using a Black-Scholes-Merton based option valuation model that uses the assumptions noted in the following table. Because Black-Scholes-Merton based option valuation models incorporate ranges of assumptions for inputs, those ranges are disclosed. Expected volatilities are based on historical volatility of the Company’s stock and other factors. The Company uses historical data to estimate the dividend yield, option life and forfeiture rate within the valuation model. The expected option life represents the period of time that options granted are expected to be outstanding. The risk-free rate for the period representing the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. |
Operating Segments | While the chief decision-makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Operating segments are aggregated into one as operating results for all segments are similar. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment. |
Recently Issued Financial Accounting Pronouncements | In May 2014, the Financial Accounting Standards Board (the “FASB”) and the International Accounting Standards Board (the “IASB”) jointly issued a comprehensive new revenue recognition standard that will supersede nearly all existing revenue recognition guidance under GAAP and International Financial Reporting Standards (“IFRS”). Previous revenue recognition guidance in GAAP consisted of broad revenue recognition concepts together with numerous revenue requirements for particular industries or transactions, which sometimes resulted in different accounting for economically similar transactions. In contrast, IFRS provided limited revenue recognition guidance and, consequently, could be difficult to apply to complex transactions. Accordingly, the FASB and the IASB initiated a joint project to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and IFRS that would: (1) remove inconsistencies and weaknesses in revenue requirements; (2) provide a more robust framework for addressing revenue issues; (3) improve comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets; (4) provide more useful information to users of financial statements through improved disclosure requirements; and (5) simplify the preparation of financial statements by reducing the number of requirements to which an entity must refer. To meet those objectives, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers.” “Revenue from Contracts with Customers - Deferral of the Effective Date” “Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” “Identifying Performance Obligations and Licensing,” “Narrow-Scope Improvements and Practical Expedients,” “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.” In January 2016, the FASB issued ASU No. 2016-01, “ Recognition and Measurement of Financial Assets and Financial Liabilities. In February 2016, the FASB issued ASU No. 2016-02, “ Leases. . In March 2016, the FASB issued ASU No. 2016-09, “ Improvements to Employee Share-Based Payment Accounting. In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments.” In March of 2017, the FASB issued ASU No. 2017-08, “Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” This guidance shortens the amortization period for premiums on certain callable debt securities to the earliest call date (with an explicit, noncontingent call feature that is callable at a fixed price and on a preset dates), rather than contractual maturity date as currently required under GAAP. ASU 2017-08 does not impact instruments without preset call dates such as mortgage-backed securities. For instruments with contingent call features, once the contingency is resolved and the security is callable at a fixed price and preset date, the security is within the scope of ASU 2017-08. ASU 2017-08 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, and early adoption is permitted. Accordingly, effective January of 2017, the Company early adopted ASU 2017-08 and the adoption was immaterial to the Company’s financial position, results of operations or cash flows. In February 2018, the FASB issued ASU No. 2018-02, “ Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . Under ASU 2018-02, entities are allowed, but not required, to reclassify from Accumulated Other Comprehensive Income (“AOCI”) to retained earnings stranded tax effects resulting from the new federal corporate income tax rate . The reclassification could include other stranded tax effects that relate to the TCJA but do not directly relate to the change in the federal rate, e.g. e.g. |
3. FAIR VALUE MEASUREMENTS (Tab
3. FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of detailing carrying and fair values of financial instruments | Carrying Fair Value Measurements Using: December 31, 2017 Amount Level 1 Level 2 Level 3 Total Financial assets: Cash and due from banks $ 38,467 $ 38,467 $ — $ — $ 38,467 Interest-bearing deposits in banks 1,746 — 1,750 — 1,750 Available-for-sale securities 262,322 66 262,256 — 262,322 Held-to-maturity securities 378 — 404 — 404 FHLB stock 3,932 N/A N/A N/A N/A Loans and leases, net 308,713 — — 317,900 317,900 Accrued interest receivable 1,956 — 1,124 832 1,956 Financial liabilities: Deposits: Noninterest-bearing $ 215,528 $ 215,528 $ — $ — $ 215,528 Savings 66,130 66,130 — — 66,130 Money market 130,032 130,032 — — 130,032 NOW accounts 64,709 64,709 — — 64,709 Time Deposits 79,681 — 79,614 — 79,614 Short-term borrowings 3,500 3,500 — — 3,500 Long-term borrowings 12,000 — 11,978 — 11,978 Accrued interest payable 65 — 65 — 65 Carrying Fair Value Measurements Using: December 31, 2016 Amount Level 1 Level 2 Level 3 Total Financial assets: Cash and due from banks $ 27,589 $ 27,589 $ — $ — $ 27,589 Interest-bearing deposits in banks 999 — 999 — 999 Available-for-sale securities 254,020 60 253,960 — 254,020 Held-to-maturity securities 483 — 521 — 521 FHLB stock 3,779 N/A N/A N/A N/A Loans and leases, net 324,086 — — 329,110 329,110 Accrued interest receivable 1,824 — 937 887 1,824 Financial liabilities: Deposits: Noninterest-bearing $ 201,113 $ 201,113 $ — $ — $ 201,113 Savings 64,740 64,740 — — 64,740 Money market 131,342 131,342 — — 131,342 NOW accounts 64,652 64,652 — — 64,652 Time Deposits 82,959 — 83,720 — 83,720 Short-term borrowings 3,500 3,500 — — 3,500 Long-term borrowings 12,000 — 12,110 — 12,110 Accrued interest payable 62 — 62 — 62 |
Schedule of assets and liabilities measured at fair value on a recurring and non-recurring basis | (Dollars in thousands) Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Total Gains December 31, 2017 Fair Value (Level 1) (Level 2) (Level 3) (Losses) Assets and liabilities measured on a recurring basis: Available-for-sale securities: U.S. Government Agencies and Sponsored Agencies $ 232,869 $ — $ 232,869 $ — $ — Corporate Debt Securities 6,626 — 6,626 — — Obligations of states and political subdivisions 22,715 — 22,715 — — Corporate stock 112 66 46 — — Total recurring $ 262,322 $ 66 $ 262,256 $ — $ — Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Total Gains December 31, 2017 Fair Value (Level 1) (Level 2) (Level 3) (Losses) Assets and liabilities measured on a nonrecurring basis: Impaired loans: Commercial $ 1,598 $ — $ — $ 1,598 $ (1,073 ) Real estate: Commercial 178 — — 178 — Residential 329 — — 329 — Other real estate owned: Land 961 — — 961 — Total nonrecurring $ 3,066 $ — $ — $ 3,066 $ (1,073 ) (Dollars in thousands) Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Total Gains December 31, 2016 Fair Value (Level 1) (Level 2) (Level 3) (Losses) Assets and liabilities measured on a recurring basis: Available-for-sale securities: U.S. Government Agencies and Sponsored Agencies $ 229,785 $ — $ 229,785 $ — $ — Corporate Debt Securities 1,519 — 1,519 — — Obligations of states and political subdivisions 22,612 — 22,612 — — Corporate stock 104 60 44 — — Total recurring $ 254,020 $ 60 $ 253,960 $ — $ — Assets and liabilities measured on a nonrecurring basis: Impaired loans: Real estate: Commercial $ 3,535 $ — $ — $ 3,535 $ — Residential 334 — — 334 — Other real estate owned: Commercial 386 — — 386 (25 ) Land 961 — — 961 173 Total nonrecurring $ 5,216 $ — $ — $ 5,216 $ 148 |
5. INVESTMENT SECURITIES (Table
5. INVESTMENT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of available for sale securities | Available-for-Sale 2017 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 233,956 $ 1,184 $ (2,271 ) $ 232,869 Obligations of states and political subdivisions 22,281 528 (94 ) 22,715 Corporate Debt Securities 6,490 160 (24 ) 6,626 Equity securities: Corporate stock 51 61 — 112 $ 262,778 $ 1,933 $ (2,389 ) $ 262,322 2016 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 229,118 $ 2,150 $ (1,483 ) $ 229,785 Obligations of states and political subdivisions 22,436 559 (383 ) 22,612 Corporate Debt Securities 1,501 18 — 1,519 Equity securities: Corporate stock 49 55 — 104 $ 253,104 $ 2,782 $ (1,866 ) $ 254,020 |
Schedule of held to maturity securities | Held-to-Maturity 2017 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 378 $ 26 $ — $ 404 2016 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Debt securities: U.S. Government Agencies and Sponsored Agencies $ 483 $ 38 $ — $ 521 |
Schedule of amortized cost and estimated fair values of investment securities by contractual maturity | Available-for-Sale Held-to-Maturity Estimated Estimated Amortized Fair Amortized Fair Cost Value Cost Value Within one year $ — $ — After one year through five years 5,449 5,487 After five years through ten years 18,092 18,547 After ten years 5,230 5,307 28,771 29,341 Investment securities not due at a single maturity date: U.S. Government Agencies and Sponsored Agencies 233,956 232,869 $ 378 $ 404 Corporate stock 51 112 — — $ 262,778 $ 262,322 $ 378 $ 404 |
Schedule of investment securities with unrealized losses | 2017 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Available-for-Sale Debt securities: U.S. Government Agencies and Sponsored Agencies $ 119,455 $ (1,148 ) $ 49,258 $ (1,123 ) $ 168,713 $ (2,271 ) Obligations of states and political subdivisions 1,130 (9 ) 4,654 (85 ) 5,784 (94 ) Corporate bonds 1,967 (24 ) — — 1,967 (24 ) $ 122,552 $ (1,181 ) $ 53,912 $ (1,208 ) $ 176,464 $ (2,389 ) 2016 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Available-for-Sale Debt securities: U.S. Government Agencies and Sponsored Agencies $ 111,870 $ (1,415 ) $ 5,010 $ (68 ) $ 116,880 $ (1,483 ) Obligations of states and political subdivisions 8,319 (383 ) — — 8,319 (383 ) $ 120,189 $ (1,798 ) $ 5,010 $ (68 ) $ 125,199 $ (1,866 ) |
6. LOANS AND LEASES (Tables)
6. LOANS AND LEASES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of accounts, notes, loans and financing receivable | December 31, 2017 2016 Real estate – commercial $ 185,452 $ 191,129 Real estate – construction 5,863 9,180 Real estate – multi-family 78,025 73,373 Real estate – residential 15,813 15,718 Commercial 25,377 35,374 Lease financing receivable 205 404 Agriculture 1,713 2,302 Consumer 945 1,650 313,393 329,130 Deferred loan and lease origination fees, net (202 ) (222 ) Allowance for loan and lease losses (4,478 ) (4,822 ) $ 308,713 $ 324,086 |
Finance Leases Financing Receivable | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of accounts, notes, loans and financing receivable | December 31, 2017 2016 Future lease payments receivable $ 211 $ 422 Residual interests — — Unearned income (6 ) (18 ) Net lease financing receivable $ 205 $ 404 |
7. ALLOWANCE FOR LOAN AND LEA30
7. ALLOWANCE FOR LOAN AND LEASE LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Schedule of loan portfolio allocated by management's internal risk ratings | December 31, 2017 Credit Risk Profile by Internally Assigned Grade Real Estate Other Credit Exposure Commercial Commercial Multi-Family Construction Residential Leases Agriculture Consumer Total Grade: Pass $ 23,617 $ 164,815 $ 73,644 $ 5,863 $ 13,767 $ 205 $ 1,713 $ 713 $ 284,337 Watch 96 18,083 4,381 — 1,507 — — 155 24,222 Special mention 66 2,265 — — 539 — — 70 2,940 Substandard — 289 — — — — — 7 296 Doubtful 1,598 — — — — — — — 1,598 Total $ 25,377 $ 185,452 $ 78,025 $ 5,863 $ 15,813 $ 205 $ 1,713 $ 945 $ 313,393 December 31, 2016 Credit Risk Profile by Internally Assigned Grade Real Estate Other Credit Exposure Commercial Commercial Multi-Family Construction Residential Leases Agriculture Consumer Total Grade: Pass $ 31,733 $ 166,769 $ 68,615 $ 6,770 $ 12,773 $ 404 $ 1,945 $ 1,093 $ 290,102 Watch 157 21,328 4,758 2,410 1,773 — 357 316 31,099 Special mention 721 3,032 — — 710 — — 219 4,682 Substandard 2,763 — — — 462 — — 22 3,247 Doubtful — — — — — — — — — Total $ 35,374 $ 191,129 $ 73,373 $ 9,180 $ 15,718 $ 404 $ 2,302 $ 1,650 $ 329,130 The following tables show an aging analysis of the loan portfolio at December 31, 2017 and 2016 (dollars in thousands): December 31, 2017 Past Due Past Due Greater Greater Than 30-59 Days 60-89 Days Than Total Past 90 Days and Past Due Past Due 90 Days Due Current Total Loans Accruing Nonaccrual Commercial: Commercial $ — $ — $ — $ — $ 25,377 $ 25,377 $ — $ 1,597 Real estate: Commercial — — 289 289 185,163 185,452 — 289 Multi-family — — — — 78,025 78,025 — — Construction — — — — 5,863 5,863 — — Residential 146 — — 146 15,667 15,813 — — Other: Leases — — — — 205 205 — — Agriculture — — — — 1,713 1,713 — — Consumer 1 — — 1 944 945 — 6 Total $ 147 $ — $ 289 $ 436 $ 312,957 $ 313,393 $ — $ 1,892 December 31, 2016 Past Due Past Due Greater Greater Than 30-59 Days 60-89 Days Than Total Past 90 Days and Past Due Past Due 90 Days Due Current Total Loans Accruing Nonaccrual Commercial: Commercial $ — $ — $ — $ — $ 35,374 $ 35,374 $ — $ — Real estate: Commercial — — — — 191,129 191,129 — — Multi-family — — — — 73,373 73,373 — — Construction — — — — 9,181 9,181 — — Residential — — — — 15,719 15,719 — — Other: Leases — — — — 404 404 — — Agriculture — — — — 2,302 2,302 — — Consumer — — — — 1,650 1,650 — 19 Total $ — $ — $ — $ — $ 329,130 $ 329,130 $ — $ 19 |
Schedule of information related to impaired loans | December 31, 2017 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded: Commercial $ 1,598 $ 2,671 $ — $ 1,808 $ 108 Real estate: Commercial 5,674 5,907 — 5,701 281 Multi-family — — — — — Residential 329 416 — 331 19 Other: Consumer — — — — 2 $ 7,601 $ 8,994 $ — $ 7,840 $ 410 With an allowance recorded: Commercial $ — $ — $ — $ — $ — Real estate: Commercial 4,396 4,483 261 4,435 249 Multi-family 474 474 21 476 33 Residential 1,286 1,286 73 1,295 62 Other: Agriculture — — — — — Consumer — — — — — $ 6,156 $ 6,243 $ 355 $ 6,206 $ 344 Total: Commercial $ 1,598 $ 2,671 $ — $ 1,808 $ 108 Real estate: Commercial 10,070 10,390 261 10,136 530 Multi-family 474 474 21 476 33 Residential 1,615 1,702 73 1,626 81 Other: Agriculture — — — — — Consumer — — — — 2 $ 13,757 $ 15,237 $ 355 $ 14,046 $ 754 December 31, 2016 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded: Commercial $ — $ — $ — $ — $ — Real estate: Commercial 10,910 11,540 — 11,011 558 Multi-family — — — — 1 Residential 334 421 — 337 15 Other: Consumer — — — — 3 $ 11,244 $ 11,961 $ — $ 11,348 $ 577 With an allowance recorded: Commercial $ 157 $ 157 $ 11 $ 161 $ 11 Real estate: Commercial 3,244 3,336 246 3,308 168 Multi-family 482 482 2 485 33 Residential 1,813 1,813 133 1,837 87 Other: Agriculture 357 357 29 364 21 Consumer — — — — — $ 6,053 $ 6,145 $ 421 $ 6,155 $ 320 Total: Commercial $ 157 $ 157 $ 11 $ 161 $ 11 Real estate: Commercial 14,154 14,876 246 14,319 726 Multi-family 482 482 2 485 34 Residential 2,147 2,234 133 2,174 102 Other: Agriculture 357 357 29 364 21 Consumer — — — — 3 $ 17,297 $ 18,106 $ 421 $ 17,503 $ 897 December 31, 2015 Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized With no related allowance recorded: Commercial $ — $ — $ — $ — $ — Real estate: Commercial 12,269 12,902 — 12,345 595 Residential 338 338 — 338 — Other: Consumer — — — — — $ 12,607 $ 13,240 $ — $ 12,683 $ 595 With an allowance recorded: Commercial $ 121 $ 121 $ 25 $ 99 $ 9 Real estate: Commercial 5,597 5,693 598 4,953 320 Multi-family 488 488 5 492 29 Residential 2,114 2,201 204 2,140 91 Other: Agriculture 370 370 38 375 18 Consumer 68 68 29 76 — $ 8,758 $ 8,941 $ 899 $ 8,135 $ 467 Total: Commercial $ 121 $ 121 $ 25 $ 99 $ 9 Real estate: Commercial 17,866 18,595 598 17,298 915 Multi-family 488 488 5 492 29 Residential 2,452 2,539 204 2,478 91 Other: Agriculture 370 370 38 375 18 Consumer 68 68 29 76 — $ 21,365 $ 22,181 $ 899 $ 20,818 $ 1,062 |
Activity In Lease Receivable Allowance For Losses [Member] | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Schedule of allowance for credit losses on financing receivables | methodology (dollars in thousands): December 31, 2017 Real Estate Other Commercial Commercial Multi- Family Construction Residential Leases Agriculture Consumer Unallocated Total Allowance for Loan and Lease Losses Beginning balance $ 855 $ 2,050 $ 851 $ 446 $ 253 $ 1 $ 64 $ 24 $ 278 $ 4,822 Provision for loan losses 659 (104 ) 196 (177 ) (48 ) (42 ) (33 ) (14 ) 13 450 Loans charged-off (1,073 ) — — — — — — — — (1,073 ) Recoveries 6 228 — — — 41 — 4 — 279 Ending balance allocated to portfolio segments $ 447 $ 2,174 $ 1,047 $ 269 $ 205 $ — $ 31 $ 14 $ 291 $ 4,478 Ending balance: Individually evaluated for impairment $ — $ 261 $ 21 $ — $ 73 $ — $ — $ — $ — $ 355 Ending balance: Collectively evaluated for impairment $ 447 $ 1,913 $ 1,026 $ 269 $ 132 $ — $ 31 $ 14 $ 291 $ 4,123 Loans Ending balance $ 25,377 $ 185,452 $ 78,025 $ 5,863 $ 15,813 $ 205 $ 1,713 $ 945 $ — $ 313,393 Ending balance: Individually evaluated for impairment $ 1,598 $ 10,070 $ 474 $ — $ 1,615 $ — $ — $ — $ — $ 13,757 Ending balance: Collectively evaluated for impairment $ 23,779 $ 175,382 $ 77,551 $ 5,863 $ 14,198 $ 205 $ 1,713 $ 945 $ — $ 299,636 December 31, 2016 Real Estate Other Multi- Commercial Commercial Family Construction Residential Leases Agriculture Consumer Unallocated Total Allowance for Loan and Lease Losses Beginning balance $ 860 $ 2,369 $ 228 $ 813 $ 319 $ 1 $ 77 $ 78 $ 230 $ 4,975 Provision for loan losses (665 ) (653 ) 623 (474 ) (66 ) — (13 ) (144 ) 48 (1,344 ) Loans charged-off — (93 ) — — — — — (34 ) — (127 ) Recoveries 660 427 — 107 — — — 124 — 1,318 Ending balance allocated to portfolio segments $ 855 $ 2,050 $ 851 $ 446 $ 253 $ 1 $ 64 $ 24 $ 278 $ 4,822 Ending balance: Individually evaluated for impairment $ 11 $ 246 $ 2 $ — $ 133 $ — $ 29 $ — $ — $ 421 Ending balance: Collectively evaluated for impairment $ 844 $ 1,804 $ 849 $ 446 $ 120 $ 1 $ 35 $ 24 $ 278 $ 4,401 Loans Ending balance $ 35,374 $ 191,129 $ 73,373 $ 9,180 $ 15,718 $ 404 $ 2,302 $ 1,650 $ — $ 329,130 Ending balance: Individually evaluated for impairment $ 157 $ 14,154 $ 482 $ — $ 2,147 $ — $ 357 $ — $ — $ 17,297 Ending balance: Collectively evaluated for impairment $ 35,217 $ 176,975 $ 72,891 $ 9,180 $ 13,571 $ 404 $ 1,945 $ 1,650 $ — $ 311,833 December 31, 2015 Real Estate Other Multi- Commercial Commercial Family Construction Residential Leases Agriculture Consumer Unallocated Total Allowance for Loan and Lease Losses Beginning balance $ 1,430 $ 2,317 $ 130 $ 583 $ 399 $ 2 $ 62 $ 124 $ 254 $ 5,301 Provision for loan losses (84 ) — 98 230 (193 ) — 15 (42 ) (24 ) — Loans charged-off (609 ) — — — — (1 ) — (6 ) — (616 ) Recoveries 123 52 — — 113 — — 2 — 290 Ending balance allocated to portfolio segments $ 860 $ 2,369 $ 228 $ 813 $ 319 $ 1 $ 77 $ 78 $ 230 $ 4,975 Ending balance: Individually evaluated for impairment $ 25 $ 598 $ 5 $ — $ 204 $ — $ 38 $ 29 $ — $ 899 Ending balance: Collectively evaluated for impairment $ 835 $ 1,771 $ 223 $ 813 $ 115 $ 1 $ 39 $ 49 $ 230 $ 4,076 Loans Ending balance $ 36,195 $ 199,591 $ 23,494 $ 14,533 $ 14,200 $ 732 $ 2,431 $ 3,122 $ — $ 294,298 Ending balance: Individually evaluated for impairment $ 121 $ 17,866 $ 488 $ — $ 2,452 $ — $ 370 $ 68 $ — $ 21,365 Ending balance: Collectively evaluated for impairment $ 36,074 $ 181,725 $ 23,006 $ 14,533 $ 11,748 $ 732 $2,061 $ 3,054 $ — $ 272,933 |
8. PREMISES AND EQUIPMENT (Tabl
8. PREMISES AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of premises and equipment | December 31, 2017 2016 Land $ 206 $ 206 Building and improvements 853 830 Furniture, fixtures and equipment 6,058 5,973 Leasehold improvements 1,690 1,688 8,807 8,697 Less accumulated depreciation and amortization (7,649 ) (7,335 ) $ 1,158 $ 1,362 |
9. INTEREST-BEARING DEPOSITS (T
9. INTEREST-BEARING DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Interest-bearing Deposit Liabilities [Abstract] | |
Schedule of interest-bearing deposits | December 31, 2017 2016 Savings $ 66,130 $ 64,740 Money market 130,032 131,342 NOW accounts 64,709 64,652 Time, $250,000 or more 45,826 45,836 Other time 33,855 37,123 $ 340,552 $ 343,693 |
Schedule of aggregate annual maturities of time deposits | Year Ending December 31, 2018 $ 55,400 2019 6,488 2020 4,399 2021 8,434 2022 4,960 Thereafter — $ 79,681 |
Schedule of interest expense recognized on interest-bearing deposits | Year Ended December 31, 2017 2016 2015 Savings $ 22 $ 19 $ 29 Money market 123 128 218 NOW accounts 16 18 26 Time Deposits 694 565 544 $ 855 $ 730 $ 817 |
10. BORROWING ARRANGEMENTS (Tab
10. BORROWING ARRANGEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of summary of borrowings | December 31, 2017 2016 Weighted Weighted Average Average Amount Rate Amount Rate Short-term portion of borrowings $ 3,500 1.39 % $ 3,500 1.01 % Long-term borrowings 12,000 1.41 % 12,000 1.32 % $ 15,500 1.41 % $ 15,500 1.25 % |
Schedule of maturities on borrowings | Year Ending December 31, 2018 $ 3,500 2019 5,000 2020 5,000 2021 2,000 Thereafter — $ 15,500 |
11. INCOME TAXES (Tables)
11. INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for (benefit from) income taxes | Federal State Total 2017 Current $ 1,397 $ 608 $ 2,005 Deferred 1,222 25 1,247 Provision for income taxes $ 2,619 $ 633 $ 3,252 2016 Current $ 2,701 $ 974 $ 3,675 Deferred (308 ) 25 (283 ) Provision for income taxes $ 2,393 $ 999 $ 3,392 2015 Current $ 1,482 $ 719 $ 2,201 Deferred 409 64 473 Provision for income taxes $ 1,891 $ 783 $ 2,674 |
Schedule of deferred tax assets (liabilities) | December 31, 2017 2016 Deferred tax assets: Allowance for loan and lease losses $ 1,458 $ 2,207 Unrealized gains on available-for-sale investment securities 135 — Deferred compensation 1,945 2,688 Future state tax deduction 132 347 Other 108 197 Total deferred tax assets 3,778 5,439 Deferred tax liabilities: Future liability of state deferred tax assets (237 ) (392 ) Unrealized gains on available-for-sale investment securities — (372 ) Deferred loan costs (146 ) (229 ) Federal Home Loan Bank stock dividends (150 ) (211 ) Other real estate owned (55 ) (77 ) Premises and equipment (45 ) (38 ) Total deferred tax liabilities (633 ) (1,319 ) Net deferred tax assets $ 3,145 $ 4,120 |
Schedule of reconciliation of effective income tax rate | Year Ended December 31, 2017 2016 2015 Federal income tax statutory rate 34.0 % 34.0 % 34.0 % State franchise tax, net of Federal tax effect 6.5 % 7.1 % 6.5 % Effect of Federal rate reduction on deferred tax assets 19.0 % — — Tax benefit of interest on loans to/investments in states and political subdivisions (6.1 )% (4.7 )% (4.5 )% Tax-exempt income from life insurance policies (1.7 )% (1.1 )% (1.3 )% Equity compensation expense 0.1 % 0.1 % 0.1 % Other (1.4 )% (0.8 )% (1.1 )% Effective tax rate 50.4 % 34.6 % 33.7 % |
12. COMMITMENTS AND CONTINGEN35
12. COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments | Year Ending December 31, 2018 $ 765 2019 658 2020 589 2021 556 2022 553 Thereafter 888 $ 4,009 |
Schedule of financial instruments representing off-balance-sheet credit risk | December 31, 2017 2016 Commitments to extend credit: Revolving lines of credit secured by 1-4 family residences $ 175 $ 251 Commercial real estate, construction and land development commitments secured by real estate 3,565 10,027 Other unused commitments, principally commercial loans 7,183 9,450 $ 10,923 $ 19,728 Standby letters of credit $ 121 $ 238 |
13. SHAREHOLDERS' EQUITY (Table
13. SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of reconciliation of the numerators and denominators of the basic and diluted earnings per share computations | Weighted Average Number of Net Shares Per-Share For the Year Ended Income Outstanding Amount December 31, 2017 Basic earnings per share $ 3,198 6,349 $ 0.50 Effect of dilutive stock-based compensation — 78 Diluted earnings per share $ 3,198 6,427 $ 0.50 December 31, 2016 Basic earnings per share $ 6,404 6,747 $ 0.95 Effect of dilutive stock-based compensation — 36 Diluted earnings per share $ 6,404 6,783 $ 0.94 December 31, 2015 Basic earnings per share $ 5,268 7,561 $ 0.70 Effect of dilutive stock-based compensation — 18 Diluted earnings per share $ 5,268 7,579 $ 0.70 |
Schedule of assumptions | 2015 Dividend yield 0.0 % Expected volatility 28.1 % Risk-free interest rate 1.92 % Expected option life in years 7 Weighted average fair value of options granted during the year $ 3.24 |
Schedule of summary of the outstanding and nonvested stock option activity | Outstanding Nonvested Weighted Weighted Average Average Exercise Grant Date Price Fair Value Shares Per Share Shares Per Share Balance, January 1, 2017 186,023 $ 12.92 44,243 $ 2.81 Options granted — $ — — $ — Options vested — $ — (29,505 ) $ 2.84 Options exercised (41,898 ) $ 8.38 — $ — Options expired or canceled (46,582 ) $ 20.46 — $ — Balance, December 31, 2017 97,543 $ 11.26 14,738 $ 2.93 A summary of options as of December 31, 2017 is as follows: Nonvested: Weighted average exercise price of nonvested stock options $ 9.29 Aggregate intrinsic value of nonvested stock options $ 87,759 Weighted average remaining contractual term in years of nonvested stock options 7.00 Vested: Number of vested stock options 82,805 Number of options expected to vest 14,738 Weighted average exercise price per share $ 11.61 Aggregate intrinsic value $ 331,381 |
Schedule of share-based compensation, shares authorized under stock option plans, by exercise price range | Number of Weighted Number of Options Average Options Outstanding Remaining Exercisable December 31, Contractual December 31, Range of Exercise Prices 2017 Life 2017 $7.07- $11.66 63,520 4.73 years 48,787 $11.67- $18.10 34,023 0.15 years 34,018 97,543 82,805 |
Summary of stock-based compensation information, restricted stock | 2017 2016 2015 (Dollars in thousands) Total intrinsic value of options exercised $ 235 $ 3 $ — Aggregate cash received for option exercises $ 351 $ 13 $ — Total fair value of options vested $ 57 $ 41 $ 24 Total compensation cost, options and restricted stock $ 273 $ 331 $ 271 Tax benefit recognized $ 99 $ 116 $ 94 Net compensation cost, options and restricted stock $ 174 $ 215 $ 176 Total compensation cost for nonvested option awards not yet recognized $ 47 $ 99 $ 165 Weighted average years for compensation cost for nonvested options to be recognized 1.0 1.3 2.0 Total compensation cost for restricted stock not yet recognized $ 284 $ 376 $ 530 Weighted average years for compensation cost for restricted stock to be recognized 1.1 1.6 1.6 |
Schedule of share-based compensation, restricted stock units award activity | Weighted Average Grant Date Restricted Stock Shares Fair Value Nonvested at January 1, 2017 71,824 $ 9.69 Awarded 32,315 $ 14.72 Vested (26,257 ) $ 9.69 Cancelled (28,829 ) $ 11.03 Nonvested at December 31, 2017 49,053 $ 12.27 |
14. REGULATORY MATTERS (Tables)
14. REGULATORY MATTERS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Regulatory Capital Requirements [Abstract] | |
Schedule of compliance with regulatory capital requirements under banking regulations | December 31, 2017 2016 Amount Ratio Amount Ratio (Dollars in thousands) Leverage Ratio American River Bankshares and Subsidiaries $ 60,921 9.5 % $ 66,985 10.5 % Minimum regulatory requirement * $ 33,230 5.3 % $ 29,499 4.6 % American River Bank $ 60,041 9.3 % $ 67,369 10.6 % Minimum requirement for “Well-Capitalized” institution $ 32,215 5.0 % $ 31,874 5.0 % Minimum regulatory requirement* $ 33,826 5.3 % $ 29,483 4.6 % Common Equity Tier 1 Risk-Based Capital Ratio American River Bank $ 60,041 17.7 % $ 67,369 18.9 % Minimum requirement for “Well-Capitalized” institution $ 22,038 6.5 % $ 23,132 6.5 % Minimum regulatory requirement* $ 19,495 5.8 % $ 18,239 5.1 % Tier 1 Risk-Based Capital Ratio American River Bankshares and Subsidiaries $ 60,921 18.1 % $ 66,985 19.0 % Minimum regulatory requirement* $ 24,423 7.3 % $ 23,329 6.6 % American River Bank $ 60,041 17.7 % $ 67,369 18.9 % Minimum requirement for “Well-Capitalized” institution $ 27,123 8.0 % $ 28,499 8.0 % Minimum regulatory requirement* $ 24,581 7.3 % $ 23,577 6.6 % Total Risk-Based Capital Ratio American River Bankshares and Subsidiaries $ 65,135 19.3 % $ 71,392 20.3 % Minimum regulatory requirement* $ 31,185 9.3 % $ 30,407 8.6 % American River Bank $ 64,282 19.0 % $ 71,822 20.2 % Minimum requirement for “Well-Capitalized” institution $ 33,928 10.0 % $ 35,624 10.0 % Minimum regulatory requirement* $ 31,383 9.3 % $ 30,726 8.6 % |
15. OTHER NONINTEREST INCOME 38
15. OTHER NONINTEREST INCOME AND EXPENSE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |
Schedule of other noninterest income | Year Ended December 31, 2017 2016 2015 Merchant fee income $ 411 $ 377 $ 378 Increase in cash surrender value of life insurance policies (Note 16) 317 322 316 Other 242 251 237 $ 970 $ 950 $ 931 |
Schedule of other noninterest expense | Year Ended December 31, 2017 2016 2015 Professional fees $ 1,140 $ 995 $ 863 Outsourced item processing 319 366 360 Directors’ expense 427 417 402 Telephone and postage 360 357 368 Stationery and supplies 135 141 143 Advertising and promotion 175 129 164 Other operating expenses 610 595 662 $ 3,166 $ 3,000 $ 2,962 |
17. RELATED PARTY TRANSACTIONS
17. RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of summary of the aggregate activity involving related party borrowers | Balance, January 1, 2017 $ 740 Disbursements — Amounts repaid (32 ) Balance, December 31, 2017 $ 708 |
18. PARENT ONLY CONDENSED FIN40
18. PARENT ONLY CONDENSED FINANCIAL STATEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Schedule of condensed balance sheet | 2017 2016 ASSETS Cash and due from banks $ 1,605 $ 259 Investment in subsidiaries 76,040 84,234 Other assets 264 347 $ 77,909 $ 84,840 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities: Other liabilities $ 988 $ 990 Total liabilities 988 990 Shareholders’ equity: Common stock 34,463 42,484 Retained earnings 42,779 40,822 Accumulated other comprehensive (loss)income, net of taxes (321 ) 544 Total shareholders’ equity 76,921 83,850 $ 77,909 $ 84,840 |
Schedule of condensed income statement | 2017 2016 2015 Income: Dividends declared by subsidiaries- eliminated in consolidation $ 11,118 $ 7,675 $ 7,900 Management fee from subsidiaries- eliminated in consolidation other income — — — Total income 11,118 7,675 7,900 Expenses: Professional fees 142 91 97 Directors’ expense 282 285 285 Other expenses 226 203 204 Total expenses 650 579 586 Income before equity in undistributed income of subsidiaries 10,468 7,096 7,314 Equity in distributed income of subsidiaries (7,554 ) (930 ) (2,287 ) Income before income taxes 2,914 6,166 5,027 Income tax benefit 284 238 241 Net income $ 3,198 $ 6,404 $ 5,268 |
Schedule of condensed cash flow statement | 2017 2016 2015 Cash flows from operating activities: Net income $ 3,198 $ 6,404 $ 5,268 Adjustments to reconcile net income to net cash provided by operating activities: Distributed earnings of subsidiaries 8,852 2,088 2,287 Equity-based compensation expense 273 331 271 Increase in other assets (2,686 ) (1,393 ) (206 ) (Decrease) increase in other liabilities (1 ) 39 36 Net cash provided by operating activities 9,636 7,469 7,656 Cash flows from financing activities: Proceeds from exercised options 351 13 — Cash paid to repurchase common stock (8,641 ) (7,414 ) (7,843 ) Net cash used in financing activities (8,290 ) (7,401 ) (7,843 ) Net increase (decrease) in cash and cash equivalents 1,346 68 (187 ) Cash and cash equivalents at beginning of year 259 191 378 Cash and cash equivalents at end of year $ 1,605 $ 259 $ 191 |
Schedule of quarterly financial information | Selected Quarterly Information (Unaudited) (In thousands, except per share and price range of common stock) March 31, June 30, September 30, December 31, 2017 Interest income $ 5,053 $ 5,121 $ 5,082 $ 5,158 Net interest income 4,811 4,869 4,803 4,870 Provision for loan and lease losses — — 300 150 Noninterest income 419 439 377 361 Noninterest expense (1) 3,430 3,368 3,312 3,939 Income before taxes 1,800 1,940 1,568 1,142 Net income (loss) (2) 1,184 1,297 1,109 (392 ) Basic earnings (loss) per share $ 0.18 $ 0.20 $ 0.18 $ (0.06 ) Diluted earnings (loss) per share 0.18 0.20 0.17 (0.06 ) Cash dividends per share 0.05 0.05 0.05 0.05 Price range, common stock $ 13.09-15.90 $ 13.46-15.20 $ 12.97-14.55 $ 13.95-15.69 2016 Interest income $ 5,276 $ 5,229 $ 5,304 $ 5,344 Net interest income 5,042 5,008 5,081 5,112 Provision for loan and lease losses — — (668 ) (676 ) Noninterest income 754 363 399 529 Noninterest expense 3,791 3,415 3,346 3,284 Income before taxes 2,005 1,956 2,802 3,033 Net income 1,372 1,304 1,813 1,915 Basic earnings per share $ .19 $ .19 $ .28 $ .29 Diluted earnings per share .19 .19 .27 .29 Cash dividends per share — — — — Price range, common stock $ 9.71-10.98 $ 9.69-10.97 $ 10.15-10.91 $ 10.59-15.99 (1) The increase in noninterest expense during the fourth quarter of 2017 was related to the leadership change that occurred during the fourth quarter of 2017. (2) The net loss in the fourth quarter of 2017 results from the increased expenses related to the leadership change and tax related expenses as the Company was required to write-down a portion of its deferred tax assets to comply with “H.R.1” commonly referred to as the Tax Cuts and Jobs Act. |
2. SUMMARY OF SIGNIFICANT ACC41
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | |||
SBA and Farm Service Agency loans with unpaid balances | $ 138 | $ 170 | |
Serviced loans | 7,941 | 7,740 | |
Proceeds from the sale of other real estate owned | 395 | 1,747 | $ 1,153 |
Gain from sale of real estate property | (1) | ||
Recorded investment in other real estate owned | 961 | 1,348 | |
Compensation expense, net of related tax benefits | $ 273 | $ 331 | $ 270 |
Compensation expense, per diluted share | $ 0.03 | $ 0.02 |
3. FAIR VALUE MEASUREMENTS - Ca
3. FAIR VALUE MEASUREMENTS - Carrying amounts and estimated fair values (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Financial assets: | ||
Cash and due from banks | $ 38,467 | $ 27,589 |
Interest-bearing deposits in banks | 1,746 | 999 |
Available-for-sale securities | 262,322 | 254,020 |
Held-to-maturity securities | 404 | 521 |
FHLB stock | 3,932 | 3,779 |
Loans and leases, net | 317,900 | 329,110 |
Accrued interest receivable | 65 | 1,824 |
Deposits | ||
Noninterest-bearing | 215,528 | 201,113 |
Savings | 66,130 | 64,740 |
Money market | 130,032 | 131,342 |
NOW accounts | 64,709 | 64,652 |
Time Deposits | 79,614 | 83,720 |
Short-term borrowings | 3,500 | 3,500 |
Long-term borrowings | 11,978 | 12,110 |
Accrued interest payable | 65 | 62 |
Level 1 | ||
Financial assets: | ||
Cash and due from banks | 38,467 | 27,589 |
Interest-bearing deposits in banks | 0 | 0 |
Available-for-sale securities | 66 | 60 |
Held-to-maturity securities | 0 | 0 |
FHLB stock | 0 | 0 |
Loans and leases, net | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Deposits | ||
Noninterest-bearing | 215,528 | 201,113 |
Savings | 66,130 | 64,740 |
Money market | 130,032 | 131,342 |
NOW accounts | 64,709 | 64,652 |
Time Deposits | 0 | 0 |
Short-term borrowings | 3,500 | 3,500 |
Long-term borrowings | 0 | 0 |
Accrued interest payable | 0 | 0 |
Level 2 | ||
Financial assets: | ||
Cash and due from banks | 0 | 0 |
Interest-bearing deposits in banks | 1,750 | 999 |
Available-for-sale securities | 262,256 | 253,960 |
Held-to-maturity securities | 404 | 521 |
FHLB stock | 0 | 0 |
Loans and leases, net | 0 | 0 |
Accrued interest receivable | 65 | 937 |
Deposits | ||
Noninterest-bearing | 0 | 0 |
Savings | 0 | 0 |
Money market | 0 | 0 |
NOW accounts | 0 | 0 |
Time Deposits | 79,614 | 83,720 |
Short-term borrowings | 0 | 0 |
Long-term borrowings | 11,978 | 12,110 |
Accrued interest payable | 65 | 62 |
Level 3 | ||
Financial assets: | ||
Cash and due from banks | 0 | 0 |
Interest-bearing deposits in banks | 0 | 0 |
Available-for-sale securities | 0 | 0 |
Held-to-maturity securities | 0 | 0 |
FHLB stock | 0 | 0 |
Loans and leases, net | 317,900 | 329,110 |
Accrued interest receivable | 0 | 887 |
Deposits | ||
Noninterest-bearing | 0 | 0 |
Savings | 0 | 0 |
Money market | 0 | 0 |
NOW accounts | 0 | 0 |
Time Deposits | 0 | 0 |
Short-term borrowings | 0 | 0 |
Long-term borrowings | 0 | 0 |
Accrued interest payable | 0 | 0 |
Carrying Amount | ||
Financial assets: | ||
Cash and due from banks | 38,467 | 27,589 |
Interest-bearing deposits in banks | 1,746 | 999 |
Available-for-sale securities | 262,322 | 254,020 |
Held-to-maturity securities | 378 | 483 |
FHLB stock | 0 | 3,779 |
Loans and leases, net | 308,713 | 324,086 |
Accrued interest receivable | 65 | 1,824 |
Deposits | ||
Noninterest-bearing | 215,528 | 201,113 |
Savings | 66,130 | 64,740 |
Money market | 130,032 | 131,342 |
NOW accounts | 64,709 | 64,652 |
Time Deposits | 79,681 | 82,959 |
Short-term borrowings | 3,500 | 3,500 |
Long-term borrowings | 12,000 | 12,000 |
Accrued interest payable | $ 65 | $ 62 |
3. FAIR VALUE MEASUREMENTS - As
3. FAIR VALUE MEASUREMENTS - Assets and liabilities measured at fair value on a recurring and non-recurring basis (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Recurring | ||
Impaired loans: | ||
Total gain (losses) | $ 0 | $ (3) |
Non Recurring | ||
Impaired loans: | ||
Total gain (losses) | (1,073) | 148 |
US Government Agencies and Sponsored Agencies | ||
Impaired loans: | ||
Total gain (losses) | 0 | 0 |
Corporate Debt Securities | ||
Impaired loans: | ||
Total gain (losses) | 0 | 0 |
Obligations of states and political subdivisions | ||
Impaired loans: | ||
Total gain (losses) | 0 | 0 |
Corporate stock | ||
Impaired loans: | ||
Total gain (losses) | 0 | 0 |
Estimated Fair Value | ||
Available-for-sale securities: | ||
Asset fair value disclosure recurring | 262,322 | 254,020 |
Level 1 | ||
Available-for-sale securities: | ||
Asset fair value disclosure recurring | 66 | 60 |
Level 2 | ||
Available-for-sale securities: | ||
Asset fair value disclosure recurring | 262,256 | 253,960 |
Level 3 | ||
Available-for-sale securities: | ||
Asset fair value disclosure recurring | 0 | 0 |
Real estate-commercial | ||
Impaired loans: | ||
Total gain (losses) | (1,073) | 0 |
Real Estate Residential | ||
Impaired loans: | ||
Total gain (losses) | 0 | 0 |
Other real estate owned - commercial | ||
Impaired loans: | ||
Total gain (losses) | (25) | |
Other real estate owned - land | ||
Impaired loans: | ||
Total gain (losses) | 0 | 173 |
Fair Value | Non Recurring | ||
Impaired loans: | ||
Assets, Fair Value Disclosure, Nonrecurring | 3,066 | 5,216 |
Fair Value | US Government Agencies and Sponsored Agencies | ||
Available-for-sale securities: | ||
Asset fair value disclosure recurring | 232,869 | 229,785 |
Fair Value | Corporate Debt Securities | ||
Available-for-sale securities: | ||
Asset fair value disclosure recurring | 6,626 | 1,519 |
Fair Value | Obligations of states and political subdivisions | ||
Available-for-sale securities: | ||
Asset fair value disclosure recurring | 22,715 | 22,612 |
Fair Value | Corporate stock | ||
Available-for-sale securities: | ||
Asset fair value disclosure recurring | 112 | 104 |
Fair Value | Real estate-commercial | ||
Impaired loans: | ||
Assets, Fair Value Disclosure, Nonrecurring | 1,598 | 3,535 |
Fair Value | Real Estate Residential | ||
Impaired loans: | ||
Assets, Fair Value Disclosure, Nonrecurring | 329 | 334 |
Fair Value | Other real estate owned - commercial | ||
Impaired loans: | ||
Assets, Fair Value Disclosure, Nonrecurring | 386 | |
Fair Value | Other real estate owned - land | ||
Impaired loans: | ||
Assets, Fair Value Disclosure, Nonrecurring | 961 | 961 |
Level 1 | Non Recurring | ||
Impaired loans: | ||
Assets, Fair Value Disclosure, Nonrecurring | 0 | 0 |
Level 1 | US Government Agencies and Sponsored Agencies | ||
Available-for-sale securities: | ||
Asset fair value disclosure recurring | 0 | 0 |
Level 1 | Corporate Debt Securities | ||
Available-for-sale securities: | ||
Asset fair value disclosure recurring | 0 | 0 |
Level 1 | Obligations of states and political subdivisions | ||
Available-for-sale securities: | ||
Asset fair value disclosure recurring | 0 | 0 |
Level 1 | Corporate stock | ||
Available-for-sale securities: | ||
Asset fair value disclosure recurring | 66 | 60 |
Level 1 | Real estate-commercial | ||
Impaired loans: | ||
Assets, Fair Value Disclosure, Nonrecurring | 0 | 0 |
Level 1 | Real Estate Residential | ||
Impaired loans: | ||
Assets, Fair Value Disclosure, Nonrecurring | 0 | 0 |
Level 1 | Other real estate owned - commercial | ||
Impaired loans: | ||
Assets, Fair Value Disclosure, Nonrecurring | 0 | |
Level 1 | Other real estate owned - land | ||
Impaired loans: | ||
Assets, Fair Value Disclosure, Nonrecurring | 0 | 0 |
Level 2 | Non Recurring | ||
Impaired loans: | ||
Assets, Fair Value Disclosure, Nonrecurring | 0 | 0 |
Level 2 | US Government Agencies and Sponsored Agencies | ||
Available-for-sale securities: | ||
Asset fair value disclosure recurring | 232,869 | 229,785 |
Level 2 | Corporate Debt Securities | ||
Available-for-sale securities: | ||
Asset fair value disclosure recurring | 6,626 | 1,519 |
Level 2 | Obligations of states and political subdivisions | ||
Available-for-sale securities: | ||
Asset fair value disclosure recurring | 22,715 | 22,612 |
Level 2 | Corporate stock | ||
Available-for-sale securities: | ||
Asset fair value disclosure recurring | 46 | 44 |
Level 2 | Real estate-commercial | ||
Impaired loans: | ||
Assets, Fair Value Disclosure, Nonrecurring | 0 | 0 |
Level 2 | Real Estate Residential | ||
Impaired loans: | ||
Assets, Fair Value Disclosure, Nonrecurring | 0 | 0 |
Level 2 | Other real estate owned - commercial | ||
Impaired loans: | ||
Assets, Fair Value Disclosure, Nonrecurring | 0 | |
Level 2 | Other real estate owned - land | ||
Impaired loans: | ||
Assets, Fair Value Disclosure, Nonrecurring | 0 | 0 |
Level 3 | Non Recurring | ||
Impaired loans: | ||
Assets, Fair Value Disclosure, Nonrecurring | 3,066 | 5,216 |
Level 3 | US Government Agencies and Sponsored Agencies | ||
Available-for-sale securities: | ||
Asset fair value disclosure recurring | 0 | 0 |
Level 3 | Corporate Debt Securities | ||
Available-for-sale securities: | ||
Asset fair value disclosure recurring | 0 | 0 |
Level 3 | Obligations of states and political subdivisions | ||
Available-for-sale securities: | ||
Asset fair value disclosure recurring | 0 | 0 |
Level 3 | Corporate stock | ||
Available-for-sale securities: | ||
Asset fair value disclosure recurring | 0 | 0 |
Level 3 | Real estate-commercial | ||
Impaired loans: | ||
Assets, Fair Value Disclosure, Nonrecurring | 1,898 | 3,535 |
Level 3 | Real Estate Residential | ||
Impaired loans: | ||
Assets, Fair Value Disclosure, Nonrecurring | 329 | 334 |
Level 3 | Other real estate owned - commercial | ||
Impaired loans: | ||
Assets, Fair Value Disclosure, Nonrecurring | 386 | |
Level 3 | Other real estate owned - land | ||
Impaired loans: | ||
Assets, Fair Value Disclosure, Nonrecurring | $ 961 | $ 961 |
4. GOODWILL AND OTHER INTANGI44
4. GOODWILL AND OTHER INTANGIBLE ASSETS (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 16,321 | $ 16,321 |
5. INVESTMENT SECURITIES - Amor
5. INVESTMENT SECURITIES - Amortized cost and estimated fair value of investment securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Debt securities: | ||
Amortized Cost | $ 262,778 | $ 253,104 |
Gross Unrealized Gains | 1,933 | 2,782 |
Gross Unrealized Losses | (2,389) | (1,866) |
Estimated Fair Value | 262,322 | 254,020 |
US Government Agencies and Sponsored Agencies | ||
Debt securities: | ||
Amortized Cost | 233,956 | 229,118 |
Gross Unrealized Gains | 1,184 | 2,150 |
Gross Unrealized Losses | (2,271) | (1,483) |
Estimated Fair Value | 232,869 | 229,785 |
Obligations of states and political subdivisions | ||
Debt securities: | ||
Amortized Cost | 22,281 | 22,436 |
Gross Unrealized Gains | 528 | 559 |
Gross Unrealized Losses | (94) | (383) |
Estimated Fair Value | 22,715 | 22,612 |
Corporate Debt Securities | ||
Debt securities: | ||
Amortized Cost | 6,490 | 1,501 |
Gross Unrealized Gains | 160 | 18 |
Gross Unrealized Losses | (24) | 0 |
Estimated Fair Value | 0 | 1,519 |
Corporate stock | ||
Debt securities: | ||
Amortized Cost | 51 | 49 |
Gross Unrealized Gains | 61 | 55 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | $ (2,389) | $ 104 |
5. INVESTMENT SECURITIES - Held
5. INVESTMENT SECURITIES - Held-to-Maturity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Debt securities: | ||
Estimated Fair Value | $ 404 | $ 521 |
US Government Agencies and Sponsored Agencies | ||
Debt securities: | ||
Amortized Cost | 378 | 483 |
Gross Unrealized Gains | 26 | 38 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | $ 404 | $ 521 |
5. INVESTMENT SECURITIES - Am47
5. INVESTMENT SECURITIES - Amortized cost and estimated fair value of investment securities contractual maturity (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Amortized Cost | |
Net Investment Income [Line Items] | |
Within one year | $ 0 |
After one year through five years | 5,449 |
After five years through ten years | 18,092 |
After ten years | 5,230 |
Investment securities not due at a single maturity date: | |
Investment securities not due at a single maturity date: Available-for-Sale | 262,778 |
Investment securities not due at a single maturity date: Held-to-Maturity | 378 |
Amortized Cost | US Government Agencies and Sponsored Agencies | |
Investment securities not due at a single maturity date: | |
Investment securities not due at a single maturity date: Available-for-Sale | 233,956 |
Investment securities not due at a single maturity date: Held-to-Maturity | 378 |
Amortized Cost | Corporate stock | |
Investment securities not due at a single maturity date: | |
Investment securities not due at a single maturity date: Available-for-Sale | 51 |
Investment securities not due at a single maturity date: Held-to-Maturity | 0 |
Estimated Fair Value | |
Net Investment Income [Line Items] | |
Within one year | 0 |
After one year through five years | 5,487 |
After five years through ten years | 18,547 |
After ten years | 5,307 |
Investment securities not due at a single maturity date: | |
Investment securities not due at a single maturity date: Available-for-Sale | 262,322 |
Investment securities not due at a single maturity date: Held-to-Maturity | 404 |
Estimated Fair Value | US Government Agencies and Sponsored Agencies | |
Investment securities not due at a single maturity date: | |
Investment securities not due at a single maturity date: Available-for-Sale | 232,869 |
Investment securities not due at a single maturity date: Held-to-Maturity | 404 |
Estimated Fair Value | Corporate stock | |
Investment securities not due at a single maturity date: | |
Investment securities not due at a single maturity date: Available-for-Sale | 112 |
Investment securities not due at a single maturity date: Held-to-Maturity | $ 0 |
5. INVESTMENT SECURITIES - Inve
5. INVESTMENT SECURITIES - Investment securities with unrealized losses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Less than 12 months, Estimated Fair Value | $ 122,552 | $ 120,189 |
Less than 12 months, Unrealized Loss | (1,181) | (1,798) |
12 months or more, Estimated Fair Value | 53,912 | 5,010 |
12 months or more, Unrealized Loss | (1,208) | (68) |
Total Estimated Fair Value | 176,464 | 125,199 |
Total Unrealized Loss | (2,389) | (1,866) |
US Government Agencies and Sponsored Agencies | ||
Less than 12 months, Estimated Fair Value | 119,455 | 111,870 |
Less than 12 months, Unrealized Loss | (1,148) | (1,415) |
12 months or more, Estimated Fair Value | 49,258 | 5,010 |
12 months or more, Unrealized Loss | (1,123) | (68) |
Total Estimated Fair Value | 168,713 | 116,880 |
Total Unrealized Loss | (2,271) | (1,483) |
Obligations of states and political subdivisions | ||
Less than 12 months, Estimated Fair Value | 1,130 | 8,319 |
Less than 12 months, Unrealized Loss | (9) | (383) |
12 months or more, Estimated Fair Value | 4,654 | 0 |
12 months or more, Unrealized Loss | (85) | 0 |
Total Estimated Fair Value | 5,784 | 8,319 |
Total Unrealized Loss | (94) | $ (383) |
Corporate bonds | ||
Less than 12 months, Estimated Fair Value | 1,967 | |
Less than 12 months, Unrealized Loss | (24) | |
12 months or more, Estimated Fair Value | 0 | |
12 months or more, Unrealized Loss | 0 | |
Total Estimated Fair Value | 1,967 | |
Total Unrealized Loss | $ (24) |
6. LOANS AND LEASES - Outstandi
6. LOANS AND LEASES - Outstanding loans and leases (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Loans and Leases Receivable | $ 313,393 | $ 329,130 | $ 294,298 |
Deferred loan and lease origination fees, net | (202) | (222) | |
Allowance for loan and lease losses | (4,478) | (4,822) | |
Outstanding loans and leases | 308,713 | 324,086 | |
Real estate-commercial | |||
Loans and Leases Receivable | 185,452 | 191,129 | 199,591 |
Real estate-construction | |||
Loans and Leases Receivable | 5,863 | 9,180 | 14,533 |
Real estate-multi-family | |||
Loans and Leases Receivable | 78,025 | 73,373 | 23,494 |
Real Estate Residential | |||
Loans and Leases Receivable | 15,813 | 15,718 | 14,200 |
Commercial | |||
Loans and Leases Receivable | 25,377 | 35,374 | 36,195 |
Lease financing receivable | |||
Loans and Leases Receivable | 404 | ||
Agriculture | |||
Loans and Leases Receivable | 1,713 | 2,302 | 2,431 |
Consumer | |||
Loans and Leases Receivable | $ 945 | $ 1,650 | $ 3,122 |
6. LOANS AND LEASES - Company's
6. LOANS AND LEASES - Company's lease financing receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Future lease payments receivable | $ 211 | $ 422 |
Residual interests | 0 | 0 |
Unearned income | (6) | (18) |
Net lease financing receivable | $ 205 | $ 404 |
6. LOANS AND LEASES - Future le
6. LOANS AND LEASES - Future lease payments receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
2,018 | $ 178 | |
2,019 | 33 | |
Total lease payments receivable | $ 211 | $ 422 |
7. ALLOWANCE FOR LOAN AND LEA52
7. ALLOWANCE FOR LOAN AND LEASE LOSSES - Allowance for loan and lease losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for Loan and Lease Losses Beginning balance | $ 4,822 | $ 4,975 | $ 5,301 |
Provision for loan losses | 450 | (1,344) | 0 |
Loans charged off | (1,073) | (127) | (616) |
Recoveries | 279 | 1,318 | 290 |
Ending balance allocated to portfolio segments | 4,478 | 4,822 | 4,975 |
Ending balance:Individually evaluated for impairment | 355 | 421 | 899 |
Ending balance: Collectively evaluated for impairment | 4,123 | 4,401 | 4,076 |
Loans Ending balance | 313,393 | 329,130 | 294,298 |
Ending balance: Individually evaluated for impairment | 13,757 | 17,297 | 21,365 |
Ending balance: Collectively evaluated for impairment | 299,636 | 311,833 | 272,933 |
Commercial | |||
Allowance for Loan and Lease Losses Beginning balance | 855 | 860 | 1,430 |
Provision for loan losses | 659 | (665) | (84) |
Loans charged off | (1,073) | 0 | (609) |
Recoveries | 6 | 660 | 123 |
Ending balance allocated to portfolio segments | 447 | 855 | 860 |
Ending balance:Individually evaluated for impairment | 0 | 11 | 25 |
Ending balance: Collectively evaluated for impairment | 447 | 844 | 835 |
Loans Ending balance | 25,377 | 35,374 | 36,195 |
Ending balance: Individually evaluated for impairment | 1,598 | 157 | 121 |
Ending balance: Collectively evaluated for impairment | 23,779 | 35,217 | 36,074 |
Real estate-commercial | |||
Allowance for Loan and Lease Losses Beginning balance | 2,050 | 2,369 | 2,317 |
Provision for loan losses | (104) | (653) | 0 |
Loans charged off | 0 | (93) | 0 |
Recoveries | 228 | 427 | 52 |
Ending balance allocated to portfolio segments | 2,174 | 2,050 | 2,369 |
Ending balance:Individually evaluated for impairment | 261 | 246 | 598 |
Ending balance: Collectively evaluated for impairment | 1,913 | 1,804 | 1,771 |
Loans Ending balance | 185,452 | 191,129 | 199,591 |
Ending balance: Individually evaluated for impairment | 10,070 | 14,154 | 17,866 |
Ending balance: Collectively evaluated for impairment | 175,382 | 176,975 | 181,725 |
Real estate-multi-family | |||
Allowance for Loan and Lease Losses Beginning balance | 851 | 228 | 130 |
Provision for loan losses | 196 | 623 | 98 |
Loans charged off | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 |
Ending balance allocated to portfolio segments | 1,047 | 851 | 228 |
Ending balance:Individually evaluated for impairment | 21 | 2 | 5 |
Ending balance: Collectively evaluated for impairment | 1,026 | 849 | 223 |
Loans Ending balance | 78,025 | 73,373 | 23,494 |
Ending balance: Individually evaluated for impairment | 474 | 482 | 488 |
Ending balance: Collectively evaluated for impairment | 77,551 | 72,891 | 23,006 |
Real estate-construction | |||
Allowance for Loan and Lease Losses Beginning balance | 446 | 813 | 583 |
Provision for loan losses | (177) | (474) | 230 |
Loans charged off | 0 | 0 | 0 |
Recoveries | 0 | 107 | 0 |
Ending balance allocated to portfolio segments | 269 | 446 | 813 |
Ending balance:Individually evaluated for impairment | 0 | 0 | 0 |
Ending balance: Collectively evaluated for impairment | 269 | 446 | 813 |
Loans Ending balance | 5,863 | 9,180 | 14,533 |
Ending balance: Individually evaluated for impairment | 0 | 0 | 0 |
Ending balance: Collectively evaluated for impairment | 5,863 | 9,180 | 14,533 |
Real Estate Residential | |||
Allowance for Loan and Lease Losses Beginning balance | 253 | 319 | 399 |
Provision for loan losses | (48) | (66) | (193) |
Loans charged off | 0 | 0 | 0 |
Recoveries | 0 | 0 | 113 |
Ending balance allocated to portfolio segments | 205 | 253 | 319 |
Ending balance:Individually evaluated for impairment | 73 | 133 | 204 |
Ending balance: Collectively evaluated for impairment | 132 | 120 | 115 |
Loans Ending balance | 15,813 | 15,718 | 14,200 |
Ending balance: Individually evaluated for impairment | 1,615 | 2,147 | 2,452 |
Ending balance: Collectively evaluated for impairment | 14,198 | 13,571 | 11,748 |
Leases | |||
Allowance for Loan and Lease Losses Beginning balance | 1 | 1 | 2 |
Provision for loan losses | (42) | 0 | 0 |
Loans charged off | 0 | 0 | (1) |
Recoveries | 41 | 0 | 0 |
Ending balance allocated to portfolio segments | 0 | 1 | 1 |
Ending balance:Individually evaluated for impairment | 0 | 0 | 0 |
Ending balance: Collectively evaluated for impairment | 0 | 1 | 1 |
Loans Ending balance | 205 | 404 | 732 |
Ending balance: Individually evaluated for impairment | 0 | 0 | 0 |
Ending balance: Collectively evaluated for impairment | 205 | 404 | 732 |
Agriculture | |||
Allowance for Loan and Lease Losses Beginning balance | 64 | 77 | 62 |
Provision for loan losses | (33) | (13) | 15 |
Loans charged off | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 |
Ending balance allocated to portfolio segments | 31 | 64 | 77 |
Ending balance:Individually evaluated for impairment | 0 | 29 | 38 |
Ending balance: Collectively evaluated for impairment | 31 | 35 | 39 |
Loans Ending balance | 1,713 | 2,302 | 2,431 |
Ending balance: Individually evaluated for impairment | 0 | 357 | 370 |
Ending balance: Collectively evaluated for impairment | 1,713 | 1,945 | 2,061 |
Consumer | |||
Allowance for Loan and Lease Losses Beginning balance | 24 | 78 | 124 |
Provision for loan losses | (14) | (144) | (42) |
Loans charged off | 0 | (34) | (6) |
Recoveries | 4 | 124 | 2 |
Ending balance allocated to portfolio segments | 14 | 24 | 78 |
Ending balance:Individually evaluated for impairment | 0 | 0 | 29 |
Ending balance: Collectively evaluated for impairment | 14 | 24 | 49 |
Loans Ending balance | 945 | 1,650 | 3,122 |
Ending balance: Individually evaluated for impairment | 0 | 0 | 68 |
Ending balance: Collectively evaluated for impairment | 945 | 1,650 | 3,054 |
Unallocated | |||
Allowance for Loan and Lease Losses Beginning balance | 278 | 230 | 254 |
Provision for loan losses | 13 | 48 | (24) |
Loans charged off | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 |
Ending balance allocated to portfolio segments | 291 | 278 | 230 |
Ending balance:Individually evaluated for impairment | 0 | 0 | 0 |
Ending balance: Collectively evaluated for impairment | 291 | 278 | 230 |
Loans Ending balance | 0 | 0 | 0 |
Ending balance: Individually evaluated for impairment | 0 | 0 | 0 |
Ending balance: Collectively evaluated for impairment | $ 0 | $ 0 | $ 0 |
7. ALLOWANCE FOR LOAN AND LEA53
7. ALLOWANCE FOR LOAN AND LEASE LOSSES - Loan portfolio allocated by management's internal risk ratings (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Total | $ 313,393 | $ 329,130 | $ 294,298 |
Real estate-commercial | |||
Total | 185,452 | 191,129 | 199,591 |
Real estate-multi-family | |||
Total | 78,025 | 73,373 | 23,494 |
Leases | |||
Total | 205 | 404 | 732 |
Agriculture | |||
Total | 1,713 | 2,302 | 2,431 |
Commercial | |||
Total | 25,377 | 35,374 | 36,195 |
Real estate-construction | |||
Total | 5,863 | 9,180 | 14,533 |
Real Estate Residential | |||
Total | 15,813 | 15,718 | 14,200 |
Consumer | |||
Total | 945 | 1,650 | $ 3,122 |
Pass | |||
Total | 284,337 | 290,102 | |
Pass | Commercial | |||
Total | 23,617 | 31,733 | |
Pass | Real estate-commercial | |||
Total | 164,815 | 166,769 | |
Pass | Real estate-multi-family | |||
Total | 73,644 | 68,615 | |
Pass | Real Estate Construction | |||
Total | 5,863 | 6,770 | |
Pass | Real Estate Residential | |||
Total | 13,767 | 12,773 | |
Pass | Leases | |||
Total | 205 | 404 | |
Pass | Agriculture | |||
Total | 1,713 | 1,945 | |
Pass | Consumer | |||
Total | 713 | 1,093 | |
Watch | |||
Total | 24,222 | 31,099 | |
Watch | Commercial | |||
Total | 96 | 157 | |
Watch | Real estate-commercial | |||
Total | 18,083 | 21,328 | |
Watch | Real estate-multi-family | |||
Total | 4,381 | 4,758 | |
Watch | Real Estate Construction | |||
Total | 0 | 2,410 | |
Watch | Real Estate Residential | |||
Total | 1,507 | 1,773 | |
Watch | Leases | |||
Total | 0 | 0 | |
Watch | Agriculture | |||
Total | 0 | 357 | |
Watch | Consumer | |||
Total | 155 | 316 | |
Special mention | |||
Total | 2,940 | 4,682 | |
Special mention | Commercial | |||
Total | 66 | 721 | |
Special mention | Real estate-commercial | |||
Total | 2,265 | 3,032 | |
Special mention | Real estate-multi-family | |||
Total | 0 | 0 | |
Special mention | Real Estate Construction | |||
Total | 0 | 0 | |
Special mention | Real Estate Residential | |||
Total | 539 | 710 | |
Special mention | Leases | |||
Total | 0 | 0 | |
Special mention | Agriculture | |||
Total | 0 | 0 | |
Special mention | Consumer | |||
Total | 70 | 219 | |
Substandard | |||
Total | 296 | 3,247 | |
Substandard | Commercial | |||
Total | 0 | 2,763 | |
Substandard | Real estate-commercial | |||
Total | 289 | 0 | |
Substandard | Real estate-multi-family | |||
Total | 0 | 0 | |
Substandard | Real Estate Construction | |||
Total | 0 | 0 | |
Substandard | Real Estate Residential | |||
Total | 0 | 462 | |
Substandard | Leases | |||
Total | 0 | 0 | |
Substandard | Agriculture | |||
Total | 0 | 0 | |
Substandard | Consumer | |||
Total | 7 | 22 | |
Doubtful | |||
Total | 1,598 | 0 | |
Doubtful | Commercial | |||
Total | 1,598 | 0 | |
Doubtful | Real estate-commercial | |||
Total | 0 | 0 | |
Doubtful | Real estate-multi-family | |||
Total | 0 | 0 | |
Doubtful | Real Estate Construction | |||
Total | 0 | 0 | |
Doubtful | Real Estate Residential | |||
Total | 0 | 0 | |
Doubtful | Leases | |||
Total | 0 | 0 | |
Doubtful | Agriculture | |||
Total | 0 | 0 | |
Doubtful | Consumer | |||
Total | $ 0 | $ 0 |
7. ALLOWANCE FOR LOAN AND LEA54
7. ALLOWANCE FOR LOAN AND LEASE LOSSES - Aging analysis of the loan portfolio (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Past Due, 30-59 days | $ 147 | $ 0 | |
Past Due, 60-89 days | 0 | 0 | |
Past Due, > 90 days | 289 | 0 | |
Past Due, Total | 436 | 0 | |
Current | 312,957 | ||
Total loans | 313,393 | 329,130 | $ 294,298 |
Recorded Investment > 90 days and Accruing | 0 | 0 | |
Nonaccrual | 1,892 | 19 | |
Commercial | |||
Past Due, 30-59 days | 0 | 0 | |
Past Due, 60-89 days | 0 | 0 | |
Past Due, > 90 days | 0 | 0 | |
Past Due, Total | 0 | 0 | |
Current | 25,377 | 35,374 | |
Total loans | 25,377 | 35,374 | 36,195 |
Recorded Investment > 90 days and Accruing | 0 | 0 | |
Nonaccrual | 1,597 | 0 | |
Real estate-commercial | |||
Past Due, 30-59 days | 0 | 0 | |
Past Due, 60-89 days | 0 | 0 | |
Past Due, > 90 days | 289 | 0 | |
Past Due, Total | 289 | 0 | |
Current | 185,163 | 191,129 | |
Total loans | 185,452 | 191,129 | 199,591 |
Recorded Investment > 90 days and Accruing | 0 | 0 | |
Nonaccrual | 289 | 0 | |
Real estate-multi-family | |||
Past Due, 30-59 days | 0 | 0 | |
Past Due, 60-89 days | 0 | 0 | |
Past Due, > 90 days | 0 | 0 | |
Past Due, Total | 0 | 0 | |
Current | 78,025 | 73,373 | |
Total loans | 78,025 | 73,373 | 23,494 |
Recorded Investment > 90 days and Accruing | 0 | 0 | |
Nonaccrual | 0 | 0 | |
Real estate-construction | |||
Past Due, 30-59 days | 0 | 0 | |
Past Due, 60-89 days | 0 | 0 | |
Past Due, > 90 days | 0 | 0 | |
Past Due, Total | 0 | 0 | |
Current | 5,863 | 9,180 | |
Total loans | 5,863 | 9,180 | 14,533 |
Recorded Investment > 90 days and Accruing | 0 | 0 | |
Nonaccrual | 0 | 0 | |
Real Estate Residential | |||
Past Due, 30-59 days | 146 | 0 | |
Past Due, 60-89 days | 0 | 0 | |
Past Due, > 90 days | 0 | 0 | |
Past Due, Total | 146 | 0 | |
Current | 15,667 | 15,718 | |
Total loans | 15,813 | 15,718 | 14,200 |
Recorded Investment > 90 days and Accruing | 0 | 0 | |
Nonaccrual | 0 | 0 | |
Leases | |||
Past Due, 30-59 days | 0 | 0 | |
Past Due, 60-89 days | 0 | 0 | |
Past Due, > 90 days | 0 | 0 | |
Past Due, Total | 0 | 0 | |
Current | 205 | 404 | |
Total loans | 205 | 404 | 732 |
Recorded Investment > 90 days and Accruing | 0 | 0 | |
Nonaccrual | 0 | 0 | |
Agriculture | |||
Past Due, 30-59 days | 0 | 0 | |
Past Due, 60-89 days | 0 | 0 | |
Past Due, > 90 days | 0 | 0 | |
Past Due, Total | 0 | 0 | |
Current | 1,713 | 2,302 | |
Total loans | 1,713 | 2,302 | 2,431 |
Recorded Investment > 90 days and Accruing | 0 | 0 | |
Nonaccrual | 0 | 0 | |
Consumer | |||
Past Due, 30-59 days | 1 | 0 | |
Past Due, 60-89 days | 0 | 0 | |
Past Due, > 90 days | 0 | 0 | |
Past Due, Total | 1 | 0 | |
Current | 944 | 1,650 | |
Total loans | 945 | 1,650 | $ 3,122 |
Recorded Investment > 90 days and Accruing | 0 | 0 | |
Nonaccrual | $ 6 | $ 19 |
7. ALLOWANCE FOR LOAN AND LEA55
7. ALLOWANCE FOR LOAN AND LEASE LOSSES - Information related to impaired loans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
With no related allowance recorded: | |||
Unpaid Recorded Investment | $ 7,601 | $ 11,244 | $ 12,607 |
Average Principal Balance | 8,994 | 11,961 | 13,240 |
Interest Related Allowance | 0 | 0 | 0 |
Recorded Investment | 7,840 | 11,348 | 12,683 |
Interest Recognized | 410 | 577 | 595 |
With an allowance recorded: | |||
Unpaid Recorded Investment | 6,156 | 6,053 | 8,758 |
Average Principal Balance | 6,243 | 6,145 | 8,941 |
Internet Related Allowance | 355 | 421 | 899 |
Recorded Investment | 6,206 | 6,155 | 8,135 |
Income Recognized | 344 | 320 | 467 |
Total: | |||
Unpaid Recorded Investment, Total | 13,757 | 17,297 | 21,365 |
Average Principal Balance, Total | 15,237 | 18,106 | 22,181 |
Interest Related Allowance | 355 | 421 | 899 |
Recorded Investment, Total | 14,046 | 17,503 | 20,818 |
Income Recognized, Total | 754 | 898 | 1,062 |
Commercial | |||
With no related allowance recorded: | |||
Unpaid Recorded Investment | 1,598 | 0 | 0 |
Average Principal Balance | 2,671 | 0 | 0 |
Interest Related Allowance | 0 | 0 | 0 |
Recorded Investment | 1,808 | 0 | 0 |
Interest Recognized | 108 | 0 | 0 |
With an allowance recorded: | |||
Unpaid Recorded Investment | 0 | 157 | 121 |
Average Principal Balance | 0 | 157 | 121 |
Internet Related Allowance | 0 | 11 | 25 |
Recorded Investment | 0 | 161 | 99 |
Income Recognized | 0 | 11 | 9 |
Total: | |||
Unpaid Recorded Investment, Total | 1,598 | 157 | 121 |
Average Principal Balance, Total | 2,671 | 157 | 121 |
Interest Related Allowance | 0 | 11 | 25 |
Recorded Investment, Total | 1,808 | 161 | 99 |
Income Recognized, Total | 108 | 11 | 9 |
Real estate-commercial | |||
With no related allowance recorded: | |||
Unpaid Recorded Investment | 5,674 | 10,910 | 12,269 |
Average Principal Balance | 5,907 | 11,540 | 12,902 |
Interest Related Allowance | 0 | 0 | 0 |
Recorded Investment | 5,701 | 11,011 | 12,345 |
Interest Recognized | 281 | 558 | 595 |
With an allowance recorded: | |||
Unpaid Recorded Investment | 4,396 | 3,244 | 5,597 |
Average Principal Balance | 4,483 | 3,336 | 5,693 |
Internet Related Allowance | 261 | 246 | 598 |
Recorded Investment | 4,435 | 3,308 | 4,953 |
Income Recognized | 249 | 168 | 320 |
Total: | |||
Unpaid Recorded Investment, Total | 10,070 | 14,154 | 17,866 |
Average Principal Balance, Total | 10,390 | 14,876 | 18,595 |
Interest Related Allowance | 261 | 246 | 598 |
Recorded Investment, Total | 10,136 | 14,319 | 17,298 |
Income Recognized, Total | 530 | 726 | 915 |
Real estate-multi-family | |||
With no related allowance recorded: | |||
Unpaid Recorded Investment | 0 | 0 | |
Average Principal Balance | 0 | 0 | |
Interest Related Allowance | 0 | 0 | |
Recorded Investment | 0 | 0 | |
Interest Recognized | 0 | 1 | |
With an allowance recorded: | |||
Unpaid Recorded Investment | 474 | 482 | 488 |
Average Principal Balance | 474 | 482 | 488 |
Internet Related Allowance | 21 | 2 | 5 |
Recorded Investment | 476 | 485 | 492 |
Income Recognized | 33 | 33 | 29 |
Total: | |||
Unpaid Recorded Investment, Total | 474 | 482 | 488 |
Average Principal Balance, Total | 474 | 482 | 488 |
Interest Related Allowance | 21 | 2 | 5 |
Recorded Investment, Total | 476 | 485 | 492 |
Income Recognized, Total | 33 | 34 | 29 |
Real Estate Residential | |||
With no related allowance recorded: | |||
Unpaid Recorded Investment | 329 | 334 | 338 |
Average Principal Balance | 416 | 421 | 338 |
Interest Related Allowance | 0 | 0 | 0 |
Recorded Investment | 331 | 337 | 338 |
Interest Recognized | 19 | 15 | 0 |
With an allowance recorded: | |||
Unpaid Recorded Investment | 1,286 | 1,813 | 2,114 |
Average Principal Balance | 1,286 | 1,813 | 2,201 |
Internet Related Allowance | 73 | 133 | 204 |
Recorded Investment | 1,295 | 1,837 | 2,140 |
Income Recognized | 62 | 87 | 91 |
Total: | |||
Unpaid Recorded Investment, Total | 1,615 | 2,147 | 2,452 |
Average Principal Balance, Total | 1,702 | 2,234 | 2,539 |
Interest Related Allowance | 73 | 133 | 204 |
Recorded Investment, Total | 1,626 | 2,174 | 2,478 |
Income Recognized, Total | 81 | 102 | 91 |
Agriculture | |||
With an allowance recorded: | |||
Unpaid Recorded Investment | 0 | 357 | 370 |
Average Principal Balance | 0 | 357 | 370 |
Internet Related Allowance | 0 | 29 | 38 |
Recorded Investment | 0 | 364 | 375 |
Income Recognized | 0 | 21 | 18 |
Total: | |||
Unpaid Recorded Investment, Total | 0 | 357 | 370 |
Average Principal Balance, Total | 0 | 357 | 370 |
Interest Related Allowance | 0 | 29 | 38 |
Recorded Investment, Total | 0 | 364 | 375 |
Income Recognized, Total | 0 | 21 | 18 |
Consumer | |||
With no related allowance recorded: | |||
Unpaid Recorded Investment | 0 | 0 | 0 |
Average Principal Balance | 0 | 0 | 0 |
Interest Related Allowance | 0 | 0 | 0 |
Recorded Investment | 0 | 0 | 0 |
Interest Recognized | 2 | 3 | 0 |
With an allowance recorded: | |||
Unpaid Recorded Investment | 0 | 0 | 68 |
Average Principal Balance | 0 | 0 | 68 |
Internet Related Allowance | 0 | 0 | 29 |
Recorded Investment | 0 | 0 | 76 |
Income Recognized | 0 | 0 | 0 |
Total: | |||
Unpaid Recorded Investment, Total | 0 | 0 | 68 |
Average Principal Balance, Total | 0 | 0 | 68 |
Interest Related Allowance | 0 | 0 | 29 |
Recorded Investment, Total | 0 | 0 | 76 |
Income Recognized, Total | $ 2 | $ 3 | $ 0 |
8. PREMISES AND EQUIPMENT - Pre
8. PREMISES AND EQUIPMENT - Premises and equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Abstract] | ||
Land | $ 206 | $ 206 |
Building and improvements | 853 | 830 |
Furniture, fixtures and equipment | 6,058 | 5,973 |
Leasehold improvements | 1,690 | 1,688 |
Net amount of premises and equipment | 8,807 | 8,697 |
Less accumulated depreciation and amortization | (7,649) | (7,335) |
Premises and equipment | $ 1,158 | $ 1,362 |
8. PREMISES AND EQUIPMENT (Deta
8. PREMISES AND EQUIPMENT (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Premises And Equipment Details Narrative | |||
Depreciation and amortization | $ 333 | $ 420 | $ 430 |
9. INTEREST-BEARING DEPOSITS -
9. INTEREST-BEARING DEPOSITS - Interest-bearing deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Interest-bearing Deposits | $ 340,552 | $ 343,693 |
Savings [Member] | ||
Interest-bearing Deposits | 66,130 | 64,740 |
Money Market [Member] | ||
Interest-bearing Deposits | 130,032 | 131,342 |
NOW Accounts [Member] | ||
Interest-bearing Deposits | 64,709 | 64,652 |
Time Deposits [Member] | ||
Interest-bearing Deposits | 45,826 | 45,836 |
Other Time [Member] | ||
Interest-bearing Deposits | $ 33,855 | $ 37,123 |
9. INTEREST-BEARING DEPOSITS 59
9. INTEREST-BEARING DEPOSITS - Aggregate annual maturities of time deposits (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Interest-bearing Deposit Liabilities [Abstract] | |
2,018 | $ 55,400 |
2,019 | 6,488 |
2,020 | 4,399 |
2,021 | 8,434 |
2,022 | 4,960 |
Thereafter | 0 |
Total | $ 79,681 |
9. INTEREST-BEARING DEPOSITS 60
9. INTEREST-BEARING DEPOSITS - Interest expense recognized on interest-bearing deposits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Interest Bearing Deposits [Line Items] | |||
Interest Expense on Deposit Liabilities | $ 855 | $ 730 | $ 817 |
Savings [Member] | |||
Interest Bearing Deposits [Line Items] | |||
Interest Expense on Deposit Liabilities | 22 | 19 | 29 |
Money Market [Member] | |||
Interest Bearing Deposits [Line Items] | |||
Interest Expense on Deposit Liabilities | 123 | 128 | 218 |
NOW Accounts [Member] | |||
Interest Bearing Deposits [Line Items] | |||
Interest Expense on Deposit Liabilities | 16 | 18 | 26 |
Time Deposits [Member] | |||
Interest Bearing Deposits [Line Items] | |||
Interest Expense on Deposit Liabilities | $ 694 | $ 565 | $ 544 |
9. INTEREST-BEARING DEPOSITS (D
9. INTEREST-BEARING DEPOSITS (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Interest-bearing Deposits Details Narrative | ||
Certificates of deposit | $ 29,000 | $ 29,000 |
Percentage of total deposit | 5.20% | 5.30% |
10. BORROWING ARRANGEMENTS - Bo
10. BORROWING ARRANGEMENTS - Borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Borrowing Arrangements [Line Items] | ||
Short-term portion of borrowings, Amount | $ 3,500 | $ 3,500 |
Long-term borrowings, Amount | 12,000 | 12,000 |
Total of Short-term and Long-term borrowings, Amount | 15,500 | 15,500 |
Short And Long Term Borrowings [Member] | ||
Borrowing Arrangements [Line Items] | ||
Short-term portion of borrowings, Amount | 3,500 | 3,500 |
Long-term borrowings, Amount | 12,000 | 12,000 |
Total of Short-term and Long-term borrowings, Amount | $ 15,500 | $ 15,500 |
Weighted Average Interest Rate [Member] | ||
Borrowing Arrangements [Line Items] | ||
Short-term portion of borrowings, Weighted Average Rate | 1.39% | 1.01% |
Long-term borrowings, Weighted Average Rate | 1.41% | 1.32% |
Total of Short-term and Long-term borrowings, Weighted Average Rate | 1.41% | 1.25% |
10. BORROWING ARRANGEMENTS - Ma
10. BORROWING ARRANGEMENTS - Maturities on borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
2,018 | $ 3,500 | |
2,019 | 5,000 | |
2,020 | 5,000 | |
2,021 | 2,000 | |
Thereafter | 0 | |
Total of Short-term and Long-term borrowings | $ 15,500 | $ 15,500 |
10. BORROWING ARRANGEMENTS (Det
10. BORROWING ARRANGEMENTS (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
BORROWING ARRANGEMENTS {2} | ||
Unsecured short-term borrowing arrangements with two of its correspondent banks | $ 17,000 | $ 17,000 |
FHLB advances | $ 0 | $ 0 |
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Interest Rate, Range from | 1.18% | 1.01% |
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Interest Rate, Range to | 1.90% | 1.52% |
Remaining amounts available under the borrowing arrangement with the FHLB | $ 117,546 | $ 100,187 |
Secured borrowing agreement with the Federal Reserve Bank of San Francisco | $ 9,085 | $ 11,068 |
11. INCOME TAXES - provision fo
11. INCOME TAXES - provision for (benefit from) income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Loss Carryforwards [Line Items] | |||
Total Income Tax Provision | $ 1,247 | $ (283) | $ 473 |
Federal Income Tax Provision | 2,619 | 2,393 | 1,891 |
State Income Tax Provision | 633 | 999 | 783 |
Total Income Tax Provision | 3,252 | 3,392 | 2,674 |
Current [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Federal Income Tax Provision | 1,397 | 2,701 | 1,482 |
State Income Tax Provision | 608 | 974 | 719 |
Total Income Tax Provision | 2,005 | 3,675 | 2,201 |
Deferred [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Federal Income Tax Provision | 1,222 | (308) | 409 |
State Income Tax Provision | 25 | 25 | 64 |
Total Income Tax Provision | $ 1,247 | $ (283) | $ 473 |
11. INCOME TAXES - Deferred tax
11. INCOME TAXES - Deferred tax assets (liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Allowance for loan and lease losses | $ 1,458 | $ 2,207 |
Other real estate owned | 135 | 0 |
Deferred compensation | 1,945 | 2,688 |
Future state tax deduction | 132 | 347 |
Other | 108 | 197 |
Total deferred tax assets | 3,778 | 5,439 |
Deferred tax liabilities: | ||
Future liability of state deferred tax assets | (237) | (392) |
Unrealized gains on available-for-sale investment securities | 0 | (372) |
Deferred loan costs | (146) | (229) |
Federal Home Loan Bank stock dividends | (150) | (211) |
Other real estate owned | (55) | (77) |
Premises and equipment | (45) | (38) |
Total deferred tax liabilities | (633) | (1,319) |
Net deferred tax assets | $ 3,145 | $ 4,120 |
11. INCOME TAXES - provision 67
11. INCOME TAXES - provision for income taxes (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Federal income tax statutory rate | 34.00% | 34.00% | 34.00% |
State franchise tax, net of Federal tax effect | 6.50% | 7.10% | 6.50% |
Effect of Federal rate reduction on deferred tax assets | 1.90% | 0.00% | 0.00% |
Tax benefit of interest on obligations of states and political subdivisions | (6.10%) | (4.70%) | (4.50%) |
Tax-exempt income from life insurance policies | (7.10%) | (1.10%) | (1.30%) |
Equity compensation expense | 0.10% | 0.10% | 0.10% |
Other | (1.40%) | (0.80%) | (1.10%) |
Effective tax rate | 50.40% | 34.60% | 33.70% |
12. COMMITMENTS AND CONTINGEN68
12. COMMITMENTS AND CONTINGENCIES - Future minimum lease payments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 765 |
2,019 | 658 |
2,020 | 589 |
2,021 | 556 |
2,022 | 553 |
Thereafter | 888 |
Total | $ 4,009 |
12. COMMITMENTS AND CONTINGEN69
12. COMMITMENTS AND CONTINGENCIES - financial instruments with off-balance-sheet credit risk (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Commitments to extend credit: | ||
Collateralized Lines of Credit | $ 10,923 | $ 19,728 |
Standby letters of credit | 121 | 238 |
Revolving lines of credit secured by 1-4 family residences [Member] | ||
Commitments to extend credit: | ||
Collateralized Lines of Credit | 175 | 251 |
Commercial real estate, construction and land development commitments secured by real estate [Member] | ||
Commitments to extend credit: | ||
Collateralized Lines of Credit | 3,565 | 10,027 |
Other unused commitments, principally commercial loans [Member] | ||
Commitments to extend credit: | ||
Collateralized Lines of Credit | $ 7,183 | $ 9,450 |
12. COMMITMENTS AND CONTINGEN70
12. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments And Contingencies Details Narrative | |||
Rental expense | $ 755 | $ 858 | $ 837 |
Uninsured deposits | $ 6,882 | $ 6,237 |
13. SHAREHOLDERS' EQUITY - Reco
13. SHAREHOLDERS' EQUITY - Reconciliation of the numerators and denominators (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |||
Basic earnings per share, Net Income (in dollars) | $ 3,198 | $ 6,404 | $ 5,268 |
Basic earnings per share, Weighted Average Number of Shares Outstanding (in shares) | 6,349 | 6,747 | 7,561 |
Basic earnings per share (in dollars per share) | $ 0.50 | $ 0.95 | $ 0.70 |
Effect of dilutive stock-based compensation | 78 | 36 | 18 |
Diluted earnings per share, Net Income (in dollars) | $ 3,198 | $ 6,404 | $ 5,268 |
Diluted earnings per share, Weighted Average Number of Shares Outstanding (in shares) | 6,427 | 6,783 | 7,579 |
Diluted earnings per share (in dollars per share) | $ 0.50 | $ 0.94 | $ 0.70 |
13. SHAREHOLDERS' EQUITY - Sche
13. SHAREHOLDERS' EQUITY - Schedule of assumptions (Details) | 12 Months Ended |
Dec. 31, 2017$ / shares | |
Shareholders Equity - Schedule Of Assumptions Details | |
Dividend yield | 0.00% |
Expected volatility | 28.10% |
Risk-free interest rate | 1.92% |
Expected option life in years | 7 years |
Weighted average fair value of options | $ 3.24 |
13. SHAREHOLDERS' EQUITY - Summ
13. SHAREHOLDERS' EQUITY - Summary of the outstanding and nonvested stock option activity (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Shares, Outstanding | |
Balance, Beginning | shares | 186,023 |
Options granted | shares | 0 |
Options vested | shares | 0 |
Options exercised | shares | (41,898) |
Options expired or canceled | shares | (46,582) |
Balance, Ending | shares | 97,543 |
Weighted Avrage Exercise Price Per Shares, Outstanding | |
Balance, Beginning | $ / shares | $ 12.92 |
Options granted | $ / shares | 0 |
Options vested | $ / shares | 0 |
Options exercised | $ / shares | 8.38 |
Options expired or canceled | $ / shares | 20.46 |
Balance, Ending | $ / shares | $ 11.26 |
Shares, Nonvested | |
Balance, Beginning | shares | 44,243 |
Options granted | shares | 0 |
Options vested | shares | (29,505) |
Options exercised | shares | 0 |
Options expired or canceled | shares | 0 |
Balance, Ending | shares | 14,738 |
Weighted Average Exercise Price Per Shares, Nonvested | |
Balance, Beginning | $ / shares | $ 2.81 |
Options granted | $ / shares | 0 |
Options vested | $ / shares | 2.84 |
Options exercised | $ / shares | 0 |
Options expired or canceled | $ / shares | 0 |
Balance, Ending | $ / shares | 2.93 |
Nonvested: | |
Weighted average exercise price of nonvested stock options | $ / shares | $ 9.29 |
Aggregate intrinsic value of nonvested stock options | $ | $ 87,759 |
Weighted average remaining contractual term in years of nonvested stock options | 7 years |
Vested: | |
Number of vested stock options | shares | 82,805 |
Number of options expected to vest | shares | 14,738 |
Weighted average exercise price per share | $ / shares | $ 11.61 |
Aggregate intrinsic value | $ | $ 331,381 |
Weighted average remaining contractual term in years | 2 years 5 months 8 days |
13. SHAREHOLDERS' EQUITY - Rang
13. SHAREHOLDERS' EQUITY - Range of exercise prices (Details) | 12 Months Ended |
Dec. 31, 2017shares | |
Exercise Price Range 7. 07 to 11. 66 [Member] | |
Number of Options Outstanding | 63,520 |
Weighted Average Remaining Contractual Life | 4 years 8 months 23 days |
Number of Options Exercisable | 48,787 |
Exercise Price Range 11.67 to 18.10 [Member] | |
Number of Options Outstanding | 34,023 |
Weighted Average Remaining Contractual Life | 1 month 24 days |
Number of Options Exercisable | 34,018 |
Exercise Price Range 18.11 to 24.07 [Member] | |
Number of Options Outstanding | 97,543 |
Number of Options Exercisable | 82,805 |
13. SHAREHOLDERS' EQUITY - Su75
13. SHAREHOLDERS' EQUITY - Summary of stock-based compensation information, restricted stock (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Shareholders Equity - Summary Of Stock-based Compensation Information Restricted Stock Details | |||
Total intrinsic value of options exercised | $ 235 | $ 3 | $ 0 |
Aggregate cash received for option exercises | 351 | 13 | 0 |
Total fair value of options vested | 57 | 41 | 24 |
Total compensation cost, options and restricted stock | 273 | 331 | 271 |
Tax benefit recognized | 99 | 116 | 94 |
Net compensation cost, options and restricted stock | 174 | 215 | 176 |
Total compensation cost for nonvested option awards not yet recognized | $ 47 | $ 99 | $ 165 |
Weighted average years for compensation cost for nonvested options to be recognized | 1 year | 1 year 3 months 18 days | 2 years |
Total compensation cost for restricted stock not yet recognized | $ 284 | $ 376 | $ 530 |
Weighted average years for compensation cost for restricted stock to be recognized | 1 year 1 month 6 days | 1 year 7 months 6 days | 1 year 7 months 6 days |
13. SHAREHOLDERS' EQUITY - Rest
13. SHAREHOLDERS' EQUITY - Restricted stock (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |||
Nonvested, Shares | 71,824 | ||
Nonvested, Weighted Average Grant Date Fair Value (in dollars per share) | $ 9.69 | ||
Awarded, Shares | 32,315 | 34,888 | 45,023 |
Awarded, Weighted Average Grant Date Fair Value (in dollars per share) | $ 14.72 | ||
Vested, Shares | (26,257) | ||
Vested, Weighted Average Grant Date Fair Value (in dollars per share) | $ 9.69 | ||
Cancelled, Shares | (28,829) | ||
Cancelled, Weighted Average Grant Date Fair Value (in dollars per share) | $ 11.03 | ||
Nonvested, Shares | 49,053 | 71,824 | |
Nonvested, Weighted Average Grant Date Fair Value (in dollars per share) | $ 12.27 | $ 9.69 |
13. SHAREHOLDERS' EQUITY (Detai
13. SHAREHOLDERS' EQUITY (Details Narrative) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 34,736 | 98,783 | 188,735 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 97,543 | 186,023 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 32,315 | 34,888 | 45,023 |
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | Of the 32,315 restricted common shares, 7,862 will vest one year from the date of the award, 7,333 will vest 33% per year from the date of the award, and 2,087 will vest 20% per year from the date of the award. | ||
Weighted average contractual term over which the restricted stock will vest | 1 year 6 months | ||
2000 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 54,470 | ||
2010 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,325,423 |
14. REGULATORY MATTERS - Capita
14. REGULATORY MATTERS - Capital adequacy requirements (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Tier 1 Risk Based Capital Ratio [Member] | American River Bank [Member] | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Tier 1 risk-based capital ratio (in dollars) | $ 60,041 | $ 67,369 |
Tier 1 risk-based capital ratio | 17.70% | 18.90% |
Tier 1 Risk Based Capital Ratio [Member] | American River Bankshares And Subsidiaries [Member] | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Tier 1 risk-based capital ratio (in dollars) | $ 60,921 | $ 23,329 |
Tier 1 risk-based capital ratio | 18.10% | 6.60% |
Total Risk Based Capital Ratio [Member] | American River Bank [Member] | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Total risk-based capital ratio (in dollars) | $ 64,282 | $ 71,822 |
Total risk-based capital ratio | 19.00% | 20.20% |
Total Risk Based Capital Ratio [Member] | American River Bankshares And Subsidiaries [Member] | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Total risk-based capital ratio (in dollars) | $ 65,135 | $ 71,392 |
Total risk-based capital ratio | 19.30% | 20.30% |
Leverage Ratio [Member] | American River Bank [Member] | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Capital leverage ratio (in dollars) | $ 60,041 | $ 67,369 |
Capital leverage ratio | 9.30% | 10.60% |
Leverage Ratio [Member] | American River Bankshares And Subsidiaries [Member] | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Capital leverage ratio (in dollars) | $ 60,921 | $ 66,985 |
Capital leverage ratio | 9.50% | 10.50% |
Common Equity Tier 1 Risk-Based Capital Ratio [Member] | American River Bank [Member] | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Tier 1 risk-based capital ratio (in dollars) | $ 60,041 | $ 67,369 |
Tier 1 risk-based capital ratio | 17.70% | 18.90% |
Minimum Regulatory Requirment [Member] | Tier 1 Risk Based Capital Ratio [Member] | American River Bank [Member] | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Tier 1 risk-based capital ratio (in dollars) | $ 24,581 | $ 23,577 |
Tier 1 risk-based capital ratio | 7.30% | 6.60% |
Minimum Regulatory Requirment [Member] | Tier 1 Risk Based Capital Ratio [Member] | American River Bankshares And Subsidiaries [Member] | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Tier 1 risk-based capital ratio (in dollars) | $ 24,423 | $ 66,985 |
Tier 1 risk-based capital ratio | 7.30% | 19.00% |
Minimum Regulatory Requirment [Member] | Total Risk Based Capital Ratio [Member] | American River Bank [Member] | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Total risk-based capital ratio (in dollars) | $ 31,383 | $ 30,726 |
Total risk-based capital ratio | 9.30% | 8.60% |
Minimum Regulatory Requirment [Member] | Total Risk Based Capital Ratio [Member] | American River Bankshares And Subsidiaries [Member] | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Total risk-based capital ratio (in dollars) | $ 31,185 | $ 30,407 |
Total risk-based capital ratio | 9.30% | 8.60% |
Minimum Regulatory Requirment [Member] | Leverage Ratio [Member] | American River Bank [Member] | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Capital leverage ratio (in dollars) | $ 33,826 | $ 29,483 |
Capital leverage ratio | 5.30% | 4.60% |
Minimum Regulatory Requirment [Member] | Leverage Ratio [Member] | American River Bankshares And Subsidiaries [Member] | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Capital leverage ratio (in dollars) | $ 33,230 | $ 29,499 |
Capital leverage ratio | 5.30% | 4.60% |
Minimum Regulatory Requirment [Member] | Common Equity Tier 1 Risk-Based Capital Ratio [Member] | American River Bank [Member] | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Tier 1 risk-based capital ratio (in dollars) | $ 19,495 | $ 18,239 |
Tier 1 risk-based capital ratio | 5.80% | 5.10% |
Well Capitalized Institution [Member] | Tier 1 Risk Based Capital Ratio [Member] | American River Bank [Member] | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Tier 1 risk-based capital ratio (in dollars) | $ 27,123 | $ 28,499 |
Tier 1 risk-based capital ratio | 8.00% | 8.00% |
Well Capitalized Institution [Member] | Total Risk Based Capital Ratio [Member] | American River Bank [Member] | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Total risk-based capital ratio (in dollars) | $ 33,928 | $ 35,624 |
Total risk-based capital ratio | 10.00% | 10.00% |
Well Capitalized Institution [Member] | Leverage Ratio [Member] | American River Bank [Member] | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Capital leverage ratio (in dollars) | $ 32,215 | $ 31,874 |
Capital leverage ratio | 5.00% | 5.00% |
Well Capitalized Institution [Member] | Common Equity Tier 1 Risk-Based Capital Ratio [Member] | American River Bank [Member] | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Tier 1 risk-based capital ratio (in dollars) | $ 22,038 | $ 23,132 |
Tier 1 risk-based capital ratio | 6.50% | 6.50% |
15. OTHER NONINTEREST INCOME 79
15. OTHER NONINTEREST INCOME AND EXPENSE - Other noninterest income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Income and Expenses [Abstract] | |||
Merchant fee income | $ 411 | $ 377 | $ 378 |
Increase in cash surrender value of life insurance policies (Note 16) | 317 | 322 | 316 |
Other | 242 | 251 | 237 |
Other noninterest income | $ 970 | $ 950 | $ 931 |
15. OTHER NONINTEREST INCOME 80
15. OTHER NONINTEREST INCOME AND EXPENSE - Other noninterest expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Income and Expenses [Abstract] | |||
Professional fees | $ 1,140 | $ 995 | $ 863 |
Outsourced item processing | 319 | 366 | 360 |
Directors' expense | 427 | 417 | 402 |
Telephone and postage | 360 | 357 | 368 |
Stationery and supplies | 135 | 141 | 143 |
Advertising and promotion | 175 | 129 | 164 |
Other operating expenses | 610 | 595 | 662 |
Other noninterest expense | $ 3,166 | $ 3,000 | $ 2,962 |
16. EMPLOYEE BENEFIT PLANS (Det
16. EMPLOYEE BENEFIT PLANS (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Defined contribution plan, Employer matching contribution, Percent of match | 100.00% | ||
Defined contribution plan, Employer matching contribution percent, Description | 3% of annual compensation plus 50% of the next 2% of annual compensation | ||
Defined contribution plan, Employer matching contribution, Vesting percentage | 100.00% | ||
Contributions towards employees | $ 196 | $ 195 | $ 202 |
Deferred compensation plan, administration costs and accrues interest, rate on deferred balances, description | The Company bears all administration costs and accrues interest on the participants’ deferred balances at a rate based on U.S. Government Treasury rates plus 4.0%. This rate was 5.93% and 5.76% for 2017 and 2016, respectively. | ||
Deferred compensation plan, administration costs and accrues interest, base rate on deferred balances | U.S. Government Treasury Rate | ||
Deferred compensation plan, administration costs and accrues interest, fixed rate on deferred balances | 4.00% | ||
Director [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Deferred compensation plan, description | Directors may also elect to defer up to one hundred percent of their monthly fees |
16. EMPLOYEE BENEFIT PLANS (D82
16. EMPLOYEE BENEFIT PLANS (Details Narrative 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Retirement Benefits [Abstract] | |||
Deferred compensation, including interest earned | $ 3,216 | $ 2,994 | |
Expense recognized under deferred compensation plan | $ 183 | 168 | $ 156 |
Salary continuation plan, Annual benefits period | up to 15 years | ||
Accrued retirement benefits payable | $ 1,474 | 1,335 | |
Expense recognized under salary continuation plan | 234 | 178 | 168 |
Cash surrender value of life insurance | 15,122 | 14,803 | |
Tax-exempt income on life insurance, net of expense | $ 317 | $ 322 | $ 316 |
17. RELATED PARTY TRANSACTION83
17. RELATED PARTY TRANSACTIONS - summary of the aggregate activity involving related party borrowers (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Related Party Transactions | |
Balance, January 1, 2017 | $ 740 |
Disbursements | 0 |
Amounts repaid | (32) |
Balance, December 31, 2017 | $ 708 |
17. RELATED PARTY TRANSACTION84
17. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transactions Details Narrative | |||
Rental payments to Director | $ 76 | $ 110 | $ 108 |
18. PARENT ONLY CONDENSED FIN85
18. PARENT ONLY CONDENSED FINANCIAL STATEMENTS - CONDENSED BALANCE SHEETS (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
ASSETS | ||||
Cash and due from banks | $ 38,467 | $ 27,589 | ||
Total Assets | 655,622 | 651,450 | ||
Liabilities: | ||||
Other liabilities | 7,121 | 7,294 | ||
Total liabilities | 578,701 | 567,600 | ||
Shareholders' equity: | ||||
Common stock | 34,463 | 42,484 | ||
Retained earnings | 42,779 | 40,822 | ||
Accumulated other comprehensive income, net of taxes | (321) | 544 | ||
Total shareholders' equity | 76,921 | 83,850 | $ 86,075 | $ 89,647 |
Total liabilities and shareholders' equity | 655,622 | 651,450 | ||
Parent Company [Member] | ||||
ASSETS | ||||
Cash and due from banks | 1,605 | 259 | ||
Investment in subsidiaries | 76,040 | 84,234 | ||
Other assets | 264 | 347 | ||
Total Assets | 77,909 | 84,840 | ||
Liabilities: | ||||
Other liabilities | 988 | 990 | ||
Total liabilities | 988 | 990 | ||
Shareholders' equity: | ||||
Common stock | 34,463 | 42,484 | ||
Retained earnings | 42,779 | 40,822 | ||
Accumulated other comprehensive income, net of taxes | (321) | 544 | ||
Total shareholders' equity | 76,921 | 83,850 | ||
Total liabilities and shareholders' equity | $ 77,909 | $ 84,840 |
18. PARENT ONLY CONDENSED FIN86
18. PARENT ONLY CONDENSED FINANCIAL STATEMENTS - CONDENSED STATEMENTS OF INCOME (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Expenses: | |||
Professional fees | $ 1,140 | $ 995 | $ 863 |
Income tax benefit | (3,252) | (3,392) | (2,674) |
Net income | 3,198 | 6,404 | 5,268 |
Parent Company [Member] | |||
Income: | |||
Dividends declared by subsidiaries - eliminated in consolidation | 11,118 | 7,675 | 7,900 |
Management fee from subsidiaries - eliminated in consolidation | 0 | 0 | 0 |
Total income | 11,118 | 7,675 | 7,900 |
Expenses: | |||
Professional fees | 142 | 91 | 97 |
Directors' expense | 282 | 285 | 285 |
Other expenses | 226 | 203 | 204 |
Total expenses | 650 | 579 | 586 |
Income before equity in undistributed income of subsidiaries | 10,468 | 7,096 | 7,314 |
Equity in (distributed) undistributed income of subsidiaries | (7,554) | (930) | (2,287) |
Income before income taxes | 2,914 | 6,166 | 5,027 |
Income tax benefit | 284 | 238 | 241 |
Net income | $ 3,198 | $ 6,404 | $ 5,268 |
18. PARENT ONLY CONDENSED FIN87
18. PARENT ONLY CONDENSED FINANCIAL STATEMENTS - CONSOLIDATED STATEMENTS OF CASH FLOWS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 3,198 | $ 6,404 | $ 5,268 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Equity-based compensation expense | 273 | 331 | 271 |
Increase in other assets | 537 | (1,734) | 723 |
Net cash provided by operating activities | 7,531 | 9,865 | 8,777 |
Cash flows from investing activities: | |||
Purchases of equipment | (129) | (375) | (319) |
Net cash provided by investing activities | 1,656 | (17,218) | (19,653) |
Cash flows from financing activities: | |||
Proceeds from exercised options | 351 | 13 | 0 |
Cash paid to repurchase common stock | (8,641) | (7,414) | (7,843) |
Net cash used in financing activities | 1,691 | 11,215 | 12,154 |
Net increase (decrease) in cash and cash equivalents | 10,878 | 3,862 | 1,278 |
Cash and cash equivalents at beginning of year | 27,589 | 23,727 | 22,449 |
Cash and cash equivalents at end of year | 38,467 | 27,589 | 23,727 |
Parent Company [Member] | |||
Cash flows from operating activities: | |||
Net income | 3,198 | 6,404 | 5,268 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Distributed (undistributed) earnings of subsidiaries | 8,852 | 2,088 | 2,287 |
Equity-based compensation expense | 273 | 331 | 271 |
Increase in other assets | (2,686) | (1,393) | (206) |
Increase in other liabilities | (1) | 39 | 36 |
Net cash provided by operating activities | 9,636 | 7,469 | 7,656 |
Cash flows from financing activities: | |||
Proceeds from exercised options | 351 | 13 | 0 |
Cash paid to repurchase common stock | (8,641) | (7,414) | (7,843) |
Net cash used in financing activities | (8,290) | (7,401) | (7,843) |
Net increase (decrease) in cash and cash equivalents | 1,346 | 68 | (187) |
Cash and cash equivalents at beginning of year | 259 | 191 | 378 |
Cash and cash equivalents at end of year | $ 1,605 | $ 259 | $ 191 |
18. PARENT ONLY CONDENSED FIN88
18. PARENT ONLY CONDENSED FINANCIAL STATEMENTS - Selected Quarterly Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net interest income | $ 19,353 | $ 20,243 | $ 20,007 |
Provision for loan and lease losses | 450 | (1,344) | 0 |
Noninterest income | 242 | 251 | 237 |
Noninterest expense | 3,166 | 3,000 | 2,962 |
Net income (loss) | $ 3,198 | $ 6,404 | $ 5,268 |
Basic earnings per share | $ 0.50 | $ 0.95 | $ 0.70 |
Diluted earnings per share | $ 0.50 | $ 0.94 | $ 0.70 |
First Quarter [Member] | |||
Interest income | $ 5,053 | $ 5,276 | |
Net interest income | 4,811 | 5,042 | |
Provision for loan and lease losses | 0 | 0 | |
Noninterest income | 419 | 754 | |
Noninterest expense | 3,430 | 3,791 | |
Income before taxes | 1,800 | 2,005 | |
Net income (loss) | $ 1,184 | $ 1,372 | |
Basic earnings per share | $ 0.18 | $ 0.19 | |
Diluted earnings per share | 0.18 | 0.19 | |
Cash dividends per share | $ 0.05 | $ 0 | |
Price range, common stock | $13.09-15.90 | $9.71-10.98 | |
Second Quarter [Member] | |||
Interest income | $ 5,121 | $ 5,229 | |
Net interest income | 4,869 | 5,008 | |
Provision for loan and lease losses | 0 | 0 | |
Noninterest income | 439 | 363 | |
Noninterest expense | 3,368 | 3,415 | |
Income before taxes | 1,940 | 1,956 | |
Net income (loss) | $ 1,297 | $ 1,304 | |
Basic earnings per share | $ 0.2 | $ 0.19 | |
Diluted earnings per share | 0.2 | 0.19 | |
Cash dividends per share | $ 0.05 | $ 0 | |
Price range, common stock | $13.46-15.20 | $9.69-10.97 | |
Third Quarter [Member] | |||
Interest income | $ 5,082 | $ 5,304 | |
Net interest income | 4,803 | 5,081 | |
Provision for loan and lease losses | 300 | (668) | |
Noninterest income | 377 | 399 | |
Noninterest expense | 3,312 | 3,346 | |
Income before taxes | 1,568 | 2,802 | |
Net income (loss) | $ 1,109 | $ 1,813 | |
Basic earnings per share | $ 0.18 | $ 0.28 | |
Diluted earnings per share | 0.17 | 0.27 | |
Cash dividends per share | $ 0.05 | $ 0 | |
Price range, common stock | $12.97-14.55 | $10.15-10.91 | |
Fourth Quarter [Member] | |||
Interest income | $ 5,158 | $ 5,344 | |
Net interest income | 4,870 | 5,112 | |
Provision for loan and lease losses | 150 | (676) | |
Noninterest income | 361 | 529 | |
Noninterest expense | 3,939 | 3,284 | |
Income before taxes | 1,142 | 3,033 | |
Net income (loss) | $ (392) | $ 1,915 | |
Basic earnings per share | $ (0.06) | $ 0.29 | |
Diluted earnings per share | (0.06) | 0.29 | |
Cash dividends per share | $ 0.05 | $ 0 | |
Price range, common stock | $13.95-15.69 | $10.59-15.99 |