Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 01, 2019 | Jun. 30, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | PENNS WOODS BANCORP INC | ||
Entity Central Index Key | 0000716605 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Smaller Reporting Company | true | ||
Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 210,035,440 | ||
Entity Common Stock, Shares Outstanding | 4,691,947 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
ASSETS: | ||
Noninterest-bearing balances | $ 24,325 | $ 25,692 |
Interest-bearing deposits in other financial institutions | 42,417 | 1,551 |
Total cash and cash equivalents | 66,742 | 27,243 |
Investment debt securities, available for sale, at fair value | 134,285 | 108,627 |
Investment equity securities, at fair value | 1,776 | 2,516 |
Investment securities, trading | 36 | 190 |
Restricted investment in bank stock, at fair value | 18,862 | 13,332 |
Loans held for sale | 2,929 | 1,196 |
Loans | 1,384,757 | 1,246,614 |
Allowance for loan losses | (13,837) | (12,858) |
Loans, net | 1,370,920 | 1,233,756 |
Premises and equipment, net | 27,580 | 27,386 |
Accrued interest receivable | 5,334 | 4,321 |
Bank-owned life insurance | 28,627 | 27,982 |
Goodwill | 17,104 | 17,104 |
Intangibles | 1,162 | 1,462 |
Deferred tax asset | 5,154 | 4,388 |
Other assets | 4,260 | 4,989 |
TOTAL ASSETS | 1,684,771 | 1,474,492 |
LIABILITIES: | ||
Interest-bearing deposits | 899,089 | 843,004 |
Noninterest-bearing deposits | 320,814 | 303,316 |
Total deposits | 1,219,903 | 1,146,320 |
Short-term borrowings | 167,865 | 100,748 |
Long-term borrowings | 138,942 | 70,970 |
Accrued interest payable | 1,150 | 502 |
Other liabilities | 13,367 | 17,758 |
TOTAL LIABILITIES | 1,541,227 | 1,336,298 |
SHAREHOLDERS’ EQUITY: | ||
Preferred stock, no par value, 3,000,000 shares authorized; no shares issued | 0 | 0 |
Common stock, par value $8.33, 15,000,000 shares authorized; 5,011,698 and 5,009,339 shares issued; 4,691,548 and 4,689,189 shares outstanding | 41,763 | 41,744 |
Additional paid-in capital | 50,737 | 50,173 |
Retained earnings | 69,787 | 63,364 |
Accumulated other comprehensive loss: | ||
Net unrealized loss on available for sale securities | (1,360) | (54) |
Defined benefit plan | (5,276) | (4,920) |
Treasury stock at cost, 320,150 shares | (12,115) | (12,115) |
TOTAL PENNS WOODS BANCORP, INC. SHAREHOLDERS’ EQUITY | 143,536 | 138,192 |
Non controlling interest | 8 | 2 |
TOTAL SHAREHOLDERS' EQUITY | 143,544 | 138,194 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 1,684,771 | $ 1,474,492 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized (in shares) | 3,000,000 | 3,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 8.33 | $ 8.33 |
Common stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Common stock, shares issued (in shares) | 5,011,698 | 5,009,339 |
Common stock, shares outstanding (in shares) | 4,691,548 | 4,689,189 |
Treasury stock, shares (in shares) | 320,150 | 320,150 |
CONSOLIDATED STATEMENT OF INCOM
CONSOLIDATED STATEMENT OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
INTEREST AND DIVIDEND INCOME: | |||
Loans, including fees | $ 54,000 | $ 45,833 | $ 42,056 |
Investment securities: | |||
Taxable | 2,784 | 2,182 | 2,424 |
Tax-exempt | 860 | 1,218 | 1,498 |
Dividend and other interest income | 1,102 | 744 | 835 |
TOTAL INTEREST AND DIVIDEND INCOME | 58,746 | 49,977 | 46,813 |
INTEREST EXPENSE: | |||
Deposits | 6,370 | 4,083 | 3,547 |
Short-term borrowings | 1,757 | 234 | 46 |
Long-term borrowings | 2,809 | 1,580 | 1,974 |
TOTAL INTEREST EXPENSE | 10,936 | 5,897 | 5,567 |
NET INTEREST INCOME | 47,810 | 44,080 | 41,246 |
PROVISION FOR LOAN LOSSES | 1,735 | 730 | 1,196 |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 46,075 | 43,350 | 40,050 |
NON-INTEREST INCOME: | |||
Service charges, insurance commissions, brokerage commissions, and debit card fees | 1,534 | 1,312 | 1,327 |
Net debt securities (losses) gains, available for sale | (47) | 600 | 1,611 |
Net equity securities losses | (170) | 0 | 0 |
Net securities gains (losses), trading | 3 | (8) | 58 |
Bank-owned life insurance | 662 | 666 | 684 |
Gain on sale of loans | 1,518 | 1,674 | 2,102 |
Other | 1,800 | 1,756 | 1,620 |
TOTAL NON-INTEREST INCOME | 9,461 | 10,744 | 12,113 |
NON-INTEREST EXPENSE: | |||
Salaries and employee benefits | 21,083 | 18,999 | 17,813 |
Occupancy | 2,702 | 2,447 | 2,223 |
Furniture and equipment | 3,092 | 2,915 | 2,793 |
Software amortization | 712 | 974 | 1,256 |
Pennsylvania shares tax | 1,108 | 925 | 873 |
Professional Fees | 2,106 | 2,353 | 2,096 |
Federal Deposit Insurance Corporation deposit insurance | 890 | 669 | 767 |
Marketing | 767 | 958 | 740 |
Intangible amortization | 300 | 337 | 366 |
Other | 5,247 | 6,285 | 6,164 |
TOTAL NON-INTEREST EXPENSE | 38,007 | 36,862 | 35,091 |
INCOME BEFORE INCOME TAX PROVISION | 17,529 | 17,232 | 17,072 |
INCOME TAX PROVISION | 2,819 | 7,459 | 4,597 |
CONSOLIDATED NET INCOME | 14,710 | 9,773 | 12,475 |
Earnings attributable to noncontrolling interest | 6 | 0 | 0 |
NET INCOME ATTRIBUTABLE TO PENNS WOODS BANCORP, INC. | $ 14,704 | $ 9,773 | $ 12,475 |
EARNINGS PER SHARE - BASIC AND DILUTED (in dollars per share) | $ 3.14 | $ 2.08 | $ 2.64 |
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED (in shares) | 4,690,254 | 4,705,602 | 4,735,457 |
DIVIDENDS PER SHARE (in dollars per share) | $ 1.88 | $ 1.88 | $ 1.88 |
Deposit Account | |||
NON-INTEREST INCOME: | |||
Service charges, insurance commissions, brokerage commissions, and debit card fees | $ 2,460 | $ 2,222 | $ 2,249 |
Insurance Commissions | |||
NON-INTEREST INCOME: | |||
Service charges, insurance commissions, brokerage commissions, and debit card fees | 365 | 496 | 795 |
Brokerage Commissions | |||
NON-INTEREST INCOME: | |||
Service charges, insurance commissions, brokerage commissions, and debit card fees | 1,336 | 1,378 | 1,098 |
Debit Card | |||
NON-INTEREST INCOME: | |||
Service charges, insurance commissions, brokerage commissions, and debit card fees | $ 1,534 | $ 1,960 | $ 1,896 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net Income | $ 14,704 | $ 9,773 | $ 12,475 |
Other comprehensive income (loss): | |||
Change in unrealized gain (loss) on available for sale securities | (1,022) | 1,500 | 252 |
Tax effect | 216 | (510) | (85) |
Net realized loss (gain) included in net income | 47 | (600) | (1,611) |
Tax effect | (10) | 204 | 547 |
(Accretion) amortization of unrecognized pension and post-retirement items | (451) | 270 | (352) |
Tax effect | 95 | (92) | 120 |
Total other comprehensive income (loss) | (1,125) | 772 | (1,129) |
Comprehensive income | $ 13,579 | $ 10,545 | $ 11,346 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | COMMON STOCK | ADDITIONAL PAID-IN CAPITAL | RETAINED EARNINGS | ACCUMULATED OTHER COMPREHENSIVE LOSS | TREASURY STOCK | NON-CONTROLLING INTEREST |
Beginning balance (in shares) at Dec. 31, 2015 | 5,004,984 | ||||||
Beginning balance at Dec. 31, 2015 | $ 136,279 | $ 41,708 | $ 49,992 | $ 58,038 | $ (3,799) | $ (9,660) | $ 0 |
Increase (Decrease) in Shareholders' Equity | |||||||
Net income | 12,475 | 12,475 | |||||
Other comprehensive (loss) income | (1,129) | (1,129) | |||||
Stock-based compensation recognized in earnings | 19 | 19 | |||||
Dividends declared | (8,903) | (8,903) | |||||
Common shares issued for employee stock purchase plan (in shares) | 2,125 | ||||||
Common shares issued for employee stock purchase plan | 82 | $ 18 | 64 | ||||
Purchase of treasury stock | (574) | (574) | |||||
Reclassification of certain income tax effects from accumulated other comprehensive loss | 0 | 0 | |||||
Ending balance (in shares) at Dec. 31, 2016 | 5,007,109 | ||||||
Ending balance at Dec. 31, 2016 | 138,249 | $ 41,726 | 50,075 | 61,610 | (4,928) | (10,234) | 0 |
Increase (Decrease) in Shareholders' Equity | |||||||
Net income | 9,773 | 9,773 | |||||
Other comprehensive (loss) income | 772 | 772 | |||||
Stock-based compensation recognized in earnings | 29 | 29 | |||||
Dividends declared | (8,837) | (8,837) | |||||
Noncontrolling investment in joint venture | 2 | 2 | |||||
Common shares issued for employee stock purchase plan (in shares) | 2,230 | ||||||
Common shares issued for employee stock purchase plan | 87 | $ 18 | 69 | ||||
Purchase of treasury stock | (1,881) | (1,881) | |||||
Reclassification of certain income tax effects from accumulated other comprehensive loss | 818 | 818 | (818) | ||||
Ending balance (in shares) at Dec. 31, 2017 | 5,009,339 | ||||||
Ending balance at Dec. 31, 2017 | 138,194 | $ 41,744 | 50,173 | 63,364 | (4,974) | (12,115) | 2 |
Increase (Decrease) in Shareholders' Equity | |||||||
Net income | 14,710 | 14,704 | 6 | ||||
Other comprehensive (loss) income | (1,125) | (1,125) | |||||
Stock-based compensation recognized in earnings | 486 | 486 | |||||
Dividends declared | (8,818) | (8,818) | |||||
Common shares issued for employee stock purchase plan (in shares) | 2,359 | ||||||
Common shares issued for employee stock purchase plan | 97 | $ 19 | 78 | ||||
Reclassification of certain income tax effects from accumulated other comprehensive loss | 0 | 0 | |||||
Ending balance (in shares) at Dec. 31, 2018 | 5,011,698 | ||||||
Ending balance at Dec. 31, 2018 | 143,544 | $ 41,763 | $ 50,737 | 69,787 | (6,636) | $ (12,115) | $ 8 |
Increase (Decrease) in Shareholders' Equity | |||||||
Adoption of ASU 2016-01 | $ 0 | $ 537 | $ (537) |
CONSOLIDATED STATEMENT OF CHA_2
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared (in dollars per share) | $ 1.88 | $ 1.88 |
Purchase of treasury stock (in shares) | 47,698 | 14,600 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
OPERATING ACTIVITIES: | |||
Net Income | $ 14,704 | $ 9,773 | $ 12,475 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 2,515 | 2,632 | 3,146 |
Amortization of intangible assets | 300 | 337 | 366 |
Provision for loan losses | 1,735 | 730 | 1,196 |
Amortization of investment security discounts and premiums, net | 776 | 893 | 870 |
Securities losses (gains), available for sale | 47 | (600) | (1,611) |
Originations of loans held for sale | (55,283) | (53,407) | (68,362) |
Proceeds of loans held for sale | 55,068 | 55,838 | 69,268 |
Gain on sale of loans | (1,518) | (1,674) | (2,102) |
Net equity securities losses | 170 | 0 | 0 |
Net securities (gains) losses, trading | (3) | 8 | (58) |
Proceeds from sales of trading securities | 466 | 426 | 3,826 |
Purchases of trading securities | (309) | (566) | (3,753) |
Earnings on bank-owned life insurance | (662) | (666) | (684) |
(Increase) decrease in deferred tax asset | (324) | 1,769 | 1,543 |
Other, net | (412) | 2,200 | (7) |
Net cash provided by operating activities | 17,270 | 17,693 | 16,113 |
Investment debt securities available for sale: | |||
Proceeds from sales | 19,296 | 25,528 | 44,829 |
Proceeds from calls and maturities | 8,033 | 11,564 | 25,558 |
Purchases | (58,725) | (22,986) | (28,322) |
Net increase in loans | (139,776) | (152,806) | (49,590) |
Acquisition of bank premises and equipment | (2,005) | (4,999) | (4,061) |
Proceeds from the sale of foreclosed assets | 445 | 1,108 | 859 |
Purchase of bank-owned life insurance | (30) | (34) | (27) |
Capital contribution from non-controlling interest | 0 | 2 | 0 |
Proceeds from redemption of regulatory stock | 15,352 | 7,677 | 3,160 |
Purchases of regulatory stock | (20,882) | (12,158) | (3,178) |
Net cash used for investing activities | (177,722) | (147,104) | (10,772) |
FINANCING ACTIVITIES: | |||
Net increase in interest-bearing deposits | 56,085 | 51,067 | 40,140 |
Net increase in noninterest-bearing deposits | 17,498 | 39 | 23,194 |
Proceeds from long-term borrowings | 80,000 | 30,000 | 0 |
Repayment of long-term borrowings | (12,028) | (45,028) | (5,027) |
Net increase (decrease) in short-term borrowings | 67,117 | 87,507 | (33,397) |
Dividends paid | (8,818) | (8,837) | (8,903) |
Issuance of common stock | 97 | 116 | 101 |
Purchase of treasury stock | 0 | (1,881) | (574) |
Net cash provided by financing activities | 199,951 | 112,983 | 15,534 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 39,499 | (16,428) | 20,875 |
CASH AND CASH EQUIVALENTS, BEGINNING | 27,243 | 43,671 | 22,796 |
CASH AND CASH EQUIVALENTS, ENDING | 66,742 | 27,243 | 43,671 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||
Interest paid | 10,288 | 5,850 | 5,538 |
Income taxes paid | 2,350 | 4,450 | 4,025 |
Transfer of loans to foreclosed real estate | 877 | 593 | 772 |
Transfer due to adoption of ASU 2016-01, equity securities fair value adjust, reclassification from AOCI to Retained Earnings, net of tax | 537 | 0 | 0 |
Reclassification of certain income tax effects from accumulated other comprehensive loss | 0 | 818 | 0 |
Proceeds from Sale and Maturity of Marketable Securities | $ 570 | $ 0 | $ 0 |
OPERATIONS AND SUMMARY OF SIGNI
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying consolidated financial statements include the accounts of Penns Woods Bancorp, Inc. and its wholly owned subsidiaries, Jersey Shore State Bank (“JSSB”), Luzerne Bank ("Luzerne" and collectively with JSSB , the "Banks"), Woods Real Estate Development Co., Inc., Woods Investment Company, Inc., The M Group Inc. D/B/A The Comprehensive Financial Group (“The M Group”), a wholly owned subsidiary of JSSB and an eighty percent owned subsidiary, United Solutions, LLC, (collectively, the “Corporation”). All significant intercompany balances and transactions have been eliminated. Nature of Business The Banks engage in a full-service commercial banking business, making available to the community a wide range of financial services including, but not limited to, installment loans, credit cards, mortgage and home equity loans, lines of credit, construction financing, farm loans, community development loans, loans to non-profit entities and local government, and various types of demand and time deposits including, but not limited to, checking accounts, savings accounts, money market deposit accounts, certificates of deposit, and IRAs. Deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”) to the extent provided by law. The financial services are provided by the Banks to individuals, partnerships, non-profit organizations, and corporations through their twenty-six offices located in Clinton, Lycoming, Centre, Montour, Union, and Luzerne Counties, Pennsylvania. Woods Real Estate Development Co., Inc. engages in real estate transactions on behalf of Penns Woods Bancorp, Inc. and the Banks. Woods Investment Company, Inc., a Delaware holding company, is engaged in investing activities. The M Group engages in securities brokerage and financial planning services, which include the sale of life insurance products, annuities, and estate planning services. United Insurance Solutions, LLC offers property and casualty and auto insurance products within the Corporation's market footprint. Operations are managed and financial performance is evaluated on a corporate-wide basis. Accordingly, all financial service operations are considered by management to be aggregated in one reportable operating segment. Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent 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 may differ from those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, valuation of net deferred tax assets, impairment of goodwill, other than temporary impairment of debt and equity securities, fair value of financial instruments, and the valuation of real estate acquired through, or in lieu of, foreclosure on settlement of debt. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and in banks and federal funds sold. Interest-earning deposits mature within 90 days and are carried at cost. Net cash flows are reported for loan, deposit, and short-term borrowing transactions. Restrictions on Cash and Cash Equivalents Based on deposit levels, the Banks must maintain cash and other reserves with the Federal Reserve Bank of Philadelphia ("FRB"). Investment Securities Investment securities are classified at the time of purchase, based on management’s intention and ability, as securities held to maturity, securities available for sale, or securities held for trading. Debt securities acquired with the intent and ability to hold to maturity are stated at cost, adjusted for amortization of premium and accretion of discount, which are computed using the interest method and recognized as adjustments of interest income. Certain other debt securities have been classified as available for sale to serve principally as a source of liquidity. Unrealized holding gains and losses for available for sale securities are reported as a separate component of shareholders’ equity, net of tax, until realized. Equity securities are carried at fair value. Unrealized holding gains and losses for equity securities are recognized as a separate component within the income statement. Realized security gains and losses are computed using the specific identification method for debt securities and the average cost method for marketable equity securities. Interest and dividends on investment securities are recognized as income when earned. Securities are periodically reviewed for other-than-temporary impairment based upon a number of factors, including, but not limited to, the length of time and extent to which the fair value has been less than cost, the financial condition of the underlying issuer, the ability of the issuer to meet contractual obligations, the likelihood of the security’s ability to recover any decline in its fair value, whether it is more likely than not that the Corporation would be required to sell the security before its anticipated recovery in fair value, and a review of the Corporation’s capital adequacy, interest rate risk position, and liquidity. The assessment of a security’s ability to recover any decline in fair value, the ability of the issuer to meet contractual obligations, and management’s intent and ability requires considerable judgment. A decline in value that is considered to be other-than-temporary is recorded as a loss within non-interest income in the Consolidated Statement of Income. Fair values of investment securities are based on observed market prices. Certain investment securities do not have observed bid prices and their fair value is based on instruments with similar risk elements. Since regulatory stock is redeemable at par, the Corporation carries it at cost. Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff generally are stated at the principal amount outstanding, net of deferred fees and discounts, unamortized loan fees and costs, and the allowance for loan losses. Interest on loans is recognized as income when earned on the accrual method. The Corporation’s general policy has been to stop accruing interest on loans when it is determined a reasonable doubt exists as to the collectability of additional interest. Income is subsequently recognized only to the extent that cash payments are received provided the loan is not delinquent in payment and, in management’s judgment, the borrower has the ability and intent to make future principal payments. Otherwise, payments are applied to the unpaid principal balance of the loan. Loans are restored to accrual status if certain conditions are met, including but not limited to, the repayment of all unpaid interest and scheduled principal due, ongoing performance consistent with the contractual agreement, and the future expectation of continued, timely payments. Loan origination and commitment fees as well as certain direct loan origination costs are being deferred and amortized as an adjustment to the related loan’s yield over the contractual lives of the related loans. Allowance for Loan Losses The allowance for loan losses represents the amount which management estimates is adequate to provide for probable losses inherent in its loan portfolio as of the Consolidated Balance Sheet date. The allowance method is used in providing for loan losses. Accordingly, all loan losses are charged to the allowance and all recoveries are credited to it. The allowance for loan losses is established through a provision for loan losses charged to operations. The provision for loan losses is based upon management’s quarterly review of the loan portfolio. The purpose of the review is to assess loan quality, identify impaired loans, analyze delinquencies, ascertain loan growth, evaluate potential charge-offs and recoveries, and assess general economic conditions in the markets served. An external independent loan review is also performed annually for the Bank. Management remains committed to an aggressive program of problem loan identification and resolution. The allowance is calculated by applying loss factors to outstanding loans by type, excluding loans for which a specific allowance has been determined. Loss factors are based on management’s consideration of the nature of the portfolio segments, changes in mix and volume of the loan portfolio, historical loan loss experience, and general economic conditions. In addition, management considers industry standards and trends with respect to nonperforming loans and its knowledge and experience with specific lending segments. Although management believes that it uses the best information available to make such determinations and that the allowance for loan losses is adequate at December 31, 2018, future adjustments could be necessary if circumstances or economic conditions differ substantially from the assumptions used in making the initial determinations. A downturn in the local economy, rising unemployment, or negative performance trends in financial information from borrowers could be indicators of subsequent increased levels of nonperforming assets and possible charge-offs, which would normally require increased loan loss provisions. An integral part of the periodic regulatory examination process is the review of the adequacy of the Banks' loan loss allowance. The regulatory agencies could require the Banks, based on their evaluation of information available at the time of their examination, to provide additional loan loss provisions to further supplement the allowance. Impaired loans are commercial and commercial real estate loans for which it is probable the Banks will not be able to collect all amounts due according to the contractual terms of the loan agreement. The Banks individually evaluate such loans for impairment and do not aggregate loans by major risk classifications. The definition of “impaired loans” is not the same as the definition of “nonaccrual loans,” although the two categories overlap. The Banks may choose to place a loan on nonaccrual status due to payment delinquency or uncertain collectability, while not classifying the loan as impaired if the loan is not a commercial or commercial real estate loan. Factors considered by management in determining impairment include payment status and collateral value. The amount of impairment for these types of loans is determined by the difference between the present value of the expected cash flows related to the loan, using the original interest rate, and its recorded value, or as a practical expedient in the case of collateralized loans, the difference between the fair value of the collateral and the recorded amount of the loans. When foreclosure is probable, impairment is measured based on the fair value of the collateral. Mortgage loans on one-to-four family properties and all consumer loans are large groups of smaller-balance homogeneous loans and are measured for impairment collectively. Loans that experience insignificant payment delays, which are defined as 90 days or less, generally are not classified as impaired. Management determines the significance of payment delays on a case-by-case basis taking into consideration all circumstances surrounding the loan and the borrower including the length of the delay, the borrower’s prior payment record, and the amount of shortfall in relation to the principal and interest owed. Loan Charge-off Policies Loans are generally fully or partially charged down to the fair value of collateral securing the asset when: • management judges the asset to be uncollectible; • repayment is deemed to be protracted beyond reasonable time frames; • the asset has been classified as a loss by either the internal loan review process or external examiners; • the borrower has filed bankruptcy and the loss becomes evident due to a lack of assets; or • the loan is 180 days past due unless both well secured and in the process of collection. Troubled Debt Restructurings In situations where, for economic or legal reasons related to a borrower’s financial difficulties, management may grant a concession for other than an insignificant period of time to the borrower that would not otherwise be considered, the related loan is classified as a troubled debt restructuring ("TDR"). Management strives to identify borrowers in financial difficulty early and work with them to modify to more affordable terms before their loan reaches nonaccrual status. These modified terms may include rate reductions, principal forgiveness, payment forbearance, and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. In cases where borrowers are granted new terms that provide for a reduction of either interest or principal, management measures any impairment on the restructuring as noted above for impaired loans. In addition to the allowance for the pooled portfolios, management has developed a separate allowance for loans that are identified as impaired through a TDR. These loans are excluded from pooled loss forecasts and a separate reserve is provided under the accounting guidance for loan impairment. Consumer loans whose terms have been modified in a TDR are also individually analyzed for estimated impairment. Loans Held for Sale In general, fixed rate residential mortgage loans originated by the Banks are held for sale and are carried at cost due to their short holding period, which can range from less than two weeks to a maximum of thirty days. Sold loans are not serviced by the Banks. Proceeds from the sale of loans in excess of the carrying value are accounted for as a gain. Total gains on the sale of loans are shown as a component of non-interest income within the Consolidated Statement of Income. Foreclosed Assets Foreclosed assets are carried at the lower of cost or fair value less estimated selling costs. Prior to foreclosure, the value of the underlying loan is written down to the fair value of the real estate to be acquired by a charge to the allowance for loan losses, if necessary. Any subsequent write-downs are charged against operating expenses. Net operating expenses and gains and losses realized from disposition are included in non-interest expense and income, respectively, within the Consolidated Statement of Income. Premises and Equipment Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed using straight-line and accelerated methods over the estimated useful lives of the related assets, which range from five to ten years for furniture, fixtures, and equipment and fifteen to forty years for buildings and improvements. Costs incurred for routine maintenance and repairs are charged to operations as incurred. Costs of major additions and improvements are capitalized. Bank-Owned Life Insurance The Corporation has purchased life insurance policies on certain officers and directors. Bank-owned life insurance is recorded at its cash surrender value, or the amount that can be realized. Increases in the cash surrender value are recognized as a component of non-interest income within the Consolidated Statement of Income. Goodwill The Corporation performs an annual impairment analysis of goodwill for its purchased subsidiaries, Luzerne and The M Group. Based on the fair value of these reporting units, estimated using the expected present value of future cash flows, no impairment of goodwill was recognized in 2018 , 2017 , or 2016 . Intangible Assets At December 31, 2018 , the Corporation had intangible assets of $443,000 as a result of the acquisition of Luzerne National Bank Corporation, which is net of accumulated amortization of $1,571,000 . These intangible assets will continue to be amortized using the sum-of-the-years digits method of amortization over ten years. The Corporation also had intangible assets of $719,000 , which is net of accumulated amortization of $301,000 , as a result of the purchase of two books of business related to investment product sales. The book of business intangible is being amortized using the straight-line method over a period of ten years. Investments in Limited Partnerships The Corporation is a limited partner in three partnerships at December 31, 2018 that provide low income elderly housing in the Corporation’s geographic market area. The carrying value of the Corporation’s investments in limited partnerships was $218,000 at December 31, 2018 and $402,000 at December 31, 2017 . The investments are being amortized over the ten -year tax credit receipt period utilizing the straight-line method. The partnerships are amortized once the projects reach the level of occupancy needed to begin the ten year tax credit recognition period. Amortization of limited partnership investments amounted to $184,000 , $184,000 , and $312,000 for 2018, 2017 and 2016 , respectively. Off-Balance Sheet Financial Instruments In the ordinary course of business, the Corporation enters into off-balance sheet financial instruments. Those instruments consist of commitments to extend credit and standby letters of credit. When those instruments are funded or become payable, the Corporation reports the amounts in its financial statements. Marketing Cost Marketing costs are generally expensed as incurred. Income Taxes The Corporation prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. Deferred tax assets and liabilities result from temporary differences in financial and income tax methods of accounting, and are reflected at currently enacted income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. The Corporation analyzed its deferred tax asset position and determined that there was not a need for a valuation allowance due to the Corporation’s ability to generate future ordinary and capital taxable income. On December 22, 2017 the Tax Cut and Jobs Act was signed into law. ASC 740 (Income Taxes) requires the recognition of the effect of changes in tax laws or rates in the period in which the legislation is enacted. The changes in the deferred tax assets and liabilities remeasured at the new 21% federal tax rate are reflected in income tax expense for fiscal year 2017. The Corporation when applicable recognizes interest and penalties on income taxes as a component of income tax provision. Earnings Per Share The Corporation provides dual presentation of basic and diluted earnings per share. Basic earnings per share is calculated utilizing net income as reported in the numerator and weighted average shares outstanding in the denominator. The computation of diluted earnings per share differs in that the dilutive effects of any stock options are adjusted in the denominator. Employee Benefits Pension and employee benefits include contributions, determined actuarially, to a defined benefit retirement plan covering the eligible employees of JSSB. The plan is funded on a current basis to the extent that it is deductible under existing federal tax regulations. Pension and other employee benefits also include contributions to a defined contribution Section 401(k) plan covering eligible employees. Contributions matching those made by eligible employees are funded throughout the year. In addition, an elective contribution may be made annually at the discretion of the board of directors for the employees of JSSB with no contributions made since 2015. The M Group Products and Income Recognition The M Group product line is comprised primarily of annuities, life insurance, and mutual funds. The revenues generated from life insurance sales are commission only, as The M Group does not underwrite the policies. Life insurance sales include permanent and term policies with the majority of the policies written being permanent. Term life insurance policies are written for 10 , 15 , 20 , and 30 year terms with the majority of the policies being written for 20 years. None of these products are offered as an integral part of lending activities. Commissions from the sale of annuities are recognized at the time notice is received from the third party broker/dealer or an insurance company that the transaction has been accepted and approved, which is also the time when commission income is received. Life insurance commissions are recognized at varying points based on the payment option chosen by the customer. Commissions from monthly and annual payment plans are recognized at the start of each annual period for the life insurance, while quarterly and semi-annual premium payments are recognized quarterly and semi-annually when the earnings process is complete. For example, semi-annual payments on the first of January and July would result in commission income recognition on the first of January and July, while payments on the first of January, April, July, and October would result in commission income recognition on those dates. The potential for chargebacks only exists for those policies on a monthly payment plan since income is recognized at the beginning of the annual coverage period versus at the time of each monthly payment. No liability is maintained for chargebacks as these are removed from income at the time of the occurrence. Accumulated Other Comprehensive Income (Loss) The Corporation is required to present accumulated other comprehensive income (loss) in a full set of general-purpose financial statements for all periods presented. Accumulated other comprehensive income (loss) is comprised of unrealized holding gains (losses) on the available for sale securities portfolio and the unrecognized components of net periodic benefit costs of the defined benefit pension plan. Segment Reporting The Corporation has determined that its only reportable segment is Community Banking. Reclassification of Comparative Amounts Certain items previously reported have been reclassified to conform to the current year’s reporting format. Such reclassifications did not affect net income or shareholders’ equity. Adopted Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (a new revenue recognition standard). The Update’s core principle is that a company will recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, this Update specifies the accounting for certain costs to obtain or fulfill a contract with a customer and expands disclosure requirements for revenue recognition. This Update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Since the guidance scopes out revenue associated with financial instruments, including loans receivable and investment securities, the adoption of the standard and its related amendments did not result in a material change from our current accounting for revenue because the majority of the Corporation's revenue is not within the scope of Topic 606. Upon adoption on January 1, 2018, we have included the related new disclosure requirements in Note 25 . In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . This Update applies to all entities that hold financial assets or owe financial liabilities and is intended to provide more useful information on the recognition, measurement, presentation, and disclosure of financial instruments. Among other things, this Update (a) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (b) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (c) eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities; (d) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (e) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (f) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and (g) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. Upon adoption on January 1, 2018, the Corporation made a one-time cumulative effect adjustment from accumulated other comprehensive income to retained earnings of $537,000 . The net effect was an increase to retained earnings. Additionally, the methods used to calculate the fair value of financial instruments in Note 22 were based on exit pricing assumptions as of December 31, 2018. Recent Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . The standard requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. A short-term lease is defined as one in which (a) the lease term is 12 months or less and (b) there is not an option to purchase the underlying asset that the lessee is reasonably certain to exercise. For short-term leases, lessees may elect to recognize lease payments over the lease term on a straight-line basis. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020. The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. The Corporation is currently assessing the practical expedients it may elect at adoption, but does not anticipate the amendments will have a significant impact on the financial statements. Based on the Corporation’s preliminary analysis of its current portfolio, the impact to the Corporation’s balance sheet is estimated to result in an increase of $10,294,000 in assets and liabilities. The Corporation also anticipates additional disclosures to be provided at adoption. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments , which changes the impairment model for most financial assets. This Update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the Update is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be effected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted for annual and interim periods beginning after December 15, 2018. With certain exceptions, transition to the new requirements will be through a cumulative effect adjustment to opening retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We expect to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, but cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment . To simplify the subsequent measurement of goodwill, the FASB eliminated Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting units fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. A public business entity that is a U.S. Securities and Exchange Commission (SEC) filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. A public business entity that is not an SEC filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2020. All other entities, including not-for-profit entities, that are adopting the amendments in this Update should do so for their annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2021. This Update is not expected to have a significant impact on the Corporation’s financial statements. In February 2017, the FASB issued ASU 2017-06 , Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), and Health and Welfare Benefit Plans (Topic 965) . This Update relates primarily to the reporting by an employee benefit plan for its interest in a master trust, which is a trust for which a regulated financial institution serves as a trust |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The changes in accumulated other comprehensive income (loss) by component shown, net of tax and parenthesis indicating debits to net income, as of December 31, 2018 , 2017 , and 2016 were as follows: Twelve Months Ended Twelve Months Ended Twelve Months Ended (In Thousands) Net Unrealized Gain (Loss) on Available * Defined Benefit Plan* Total* Net Unrealized Gain (Loss) on Available * Defined * Total * Net Unrealized Gain (Loss) on Available * Defined * Total * Beginning balance $ (54 ) $ (4,920 ) $ (4,974 ) $ (639 ) $ (4,289 ) $ (4,928 ) $ 258 $ (4,057 ) $ (3,799 ) Other comprehensive income (loss) before reclassifications (806 ) (486 ) (1,292 ) 990 63 1,053 167 (333 ) (166 ) Amounts reclassified from accumulated other comprehensive (loss) income 37 130 167 (396 ) 115 (281 ) (1,064 ) 101 (963 ) Net current-period other comprehensive income (loss) (769 ) (356 ) (1,125 ) 594 178 772 (897 ) (232 ) (1,129 ) Reclassification of certain income tax effects from accumulated other comprehensive loss — — — (9 ) (809 ) (818 ) — — — Reclassification from adoption of 2016-01 (537 ) — (537 ) — — — — — — Ending balance $ (1,360 ) $ (5,276 ) $ (6,636 ) $ (54 ) $ (4,920 ) $ (4,974 ) $ (639 ) $ (4,289 ) $ (4,928 ) * Amounts net of 34% tax rate for 2016 and 21% for 2018 and 2017 The adoption of ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities requires equity securities to run through the income statement and therefore the reclassification of prior accumulated losses are reflected above. The preceding table includes current guidance issued related to Income Statement- Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ("ASU 2018-02"). The Corporation has elected to reclassify the portion in accumulated other comprehensive income (AOCI) that would have been otherwise stranded. Amounts were reclassified for both components included in AOCI and their ending balance as of December 31, 2018 and 2017 is net of tax at the 21% corporate tax rate, and at 34% corporate tax rate as of December 31, 2016. The reclassifications out of accumulated other comprehensive income shown, net of tax and parenthesis indicating debits to net income, as of December 31, 2018 , 2017 , and 2016 were as follows: (In Thousands) Amount Reclassified from Accumulated Other Comprehensive Income Details about Accumulated Other Comprehensive Income Components Twelve Months Ended Affected Line Item in the Consolidated Statement of Income December 31, 2018 December 31, 2017 December 31, 2016 Net realized (loss) gain on available for sale securities $ (47 ) $ 600 $ 1,611 Securities gains (losses), net Income tax effect 10 (204 ) (547 ) Income tax provision $ (37 ) $ 396 $ 1,064 Net unrecognized pension income (expense) $ (165 ) $ (174 ) $ (153 ) Salaries and employee benefits Income tax effect 35 59 52 Income tax provision $ (130 ) $ (115 ) $ (101 ) |
PER SHARE DATA
PER SHARE DATA | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
PER SHARE DATA | PER SHARE DATA There are no convertible securities which would affect the denominator in calculating basic and dilutive earnings per share; therefore, net income as presented on the consolidated statement of income will be used as the numerator. The following table sets forth the composition of the weighted average common shares (denominator) used in the basic and dilutive per share computation. Year Ended December 31, 2018 2017 2016 Weighted average common shares issued 5,010,404 5,008,073 5,005,971 Average treasury stock shares (320,150 ) (302,471 ) (270,514 ) Weighted average common shares used to calculate basic and diluted earnings per share 4,690,254 4,705,602 4,735,457 There were a total of 263,700 non-qualified employee stock options (Note 14) outstanding on December 31, 2018 that had a weighted average strike price of $45.12 . Options on December 31, 2017 had an average strike price of $43.59 with a total of 93,500 options outstanding. Grants outstanding at year-end 2016 totaled to 26,500 options with an average strike price of $ 42.03 . These options were excluded, on a weighted average basis, in the computation of diluted earnings per share for all periods presented due to the average market price of common shares being less than the strike price of the options. |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES | INVESTMENT SECURITIES The amortized cost, gross gains and losses, and fair values of investment securities at December 31, 2018 and 2017 are as follows: 2018 (In Thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available for sale (AFS): Mortgage-backed securities $ 6,385 $ 8 $ (240 ) $ 6,153 State and political securities 79,358 609 (426 ) 79,541 Other debt securities 50,264 17 (1,690 ) 48,591 Total debt securities $ 136,007 $ 634 $ (2,356 ) $ 134,285 Investment equity securities: Financial institution equity securities $ 328 $ 224 $ — $ 552 Other equity securities 1,300 — (76 ) 1,224 Total equity securities $ 1,628 $ 224 $ (76 ) $ 1,776 Trading: Other equity securities $ 49 $ — $ (13 ) $ 36 Trading investment equity securities $ 49 $ — $ (13 ) $ 36 2017 (In Thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available for sale (AFS): Mortgage-backed securities $ 4,273 $ 51 $ (111 ) $ 4,213 State and political securities 56,295 411 (198 ) 56,508 Other debt securities 48,806 180 (1,080 ) 47,906 Total debt securities $ 109,374 $ 642 $ (1,389 ) $ 108,627 Investment equity securities: Financial institution equity securities $ 537 $ 728 $ — $ 1,265 Other equity securities 1,300 — (49 ) 1,251 Total equity securities $ 1,837 $ 728 $ (49 ) $ 2,516 Trading: Financial institution equity securities $ 20 $ — $ — $ 20 Other equity securities 192 2 (24 ) 170 Trading investment equity securities $ 212 $ 2 $ (24 ) $ 190 The following tables show the Corporation’s gross unrealized losses and fair value, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, at December 31, 2018 and 2017 . 2018 Less than Twelve Months Twelve Months or Greater Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized (In Thousands) Value Losses Value Losses Value Losses Available for Sale (AFS) Mortgage-backed securities $ 3,023 $ (75 ) $ 2,930 $ (165 ) $ 5,953 $ (240 ) State and political securities 14,819 (128 ) 13,648 (298 ) 28,467 (426 ) Other debt securities 10,133 (153 ) 34,776 (1,537 ) 44,909 (1,690 ) Total Debt Securities AFS $ 27,975 $ (356 ) $ 51,354 $ (2,000 ) $ 79,329 $ (2,356 ) 2017 Less than Twelve Months Twelve Months or Greater Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized (In Thousands) Value Losses Value Losses Value Losses Available for Sale (AFS) Mortgage-backed securities $ 981 $ (12 ) $ 2,276 $ (99 ) $ 3,257 $ (111 ) State and political securities 15,691 (104 ) 3,018 (94 ) 18,709 (198 ) Other debt securities 7,512 (148 ) 28,517 (932 ) 36,029 (1,080 ) Total Debt Securities AFS $ 24,184 $ (264 ) $ 33,811 $ (1,125 ) $ 57,995 $ (1,389 ) At December 31, 2018 there were 23 individual securities in a continuous unrealized loss position for less than twelve months and 47 individual securities in a continuous unrealized loss position for greater than twelve months. The Corporation reviews its position quarterly and has asserted that at December 31, 2018 and 2017 , the declines outlined in the above table represent temporary declines and the Corporation does not intend to sell and does not believe they will be required to sell these securities before recovery of their cost basis, which may be at maturity. The Corporation has concluded that any impairment of its investment securities portfolio is not other than temporary but is the result of interest rate changes that are not expected to result in the non-collection of principal and interest during the period. The amortized cost and fair value of debt securities at December 31, 2018 , by contractual maturity, are shown below. Expected maturities may differ from contractual maturities since borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. (In Thousands) Amortized Cost Fair Value Due in one year or less $ 3,135 $ 3,134 Due after one year to five years 41,923 40,883 Due after five years to ten years 69,978 69,316 Due after ten years 20,971 20,952 Total $ 136,007 $ 134,285 Total gross proceeds from sales of securities available for sale were $19,296,000 , $25,528,000 , and $44,829,000 for 2018 , 2017 , and 2016 , respectively. The following table represents gross realized gains and losses on those transactions: Year Ended December 31, (In Thousands) 2018 2017 2016 Gross realized gains: U.S. Government and agency securities $ — $ — $ 11 Mortgage-backed securities 27 69 35 State and political securities 19 408 787 Other debt securities 3 53 283 Total gross realized gains $ 49 $ 530 $ 1,116 Gross realized losses: U.S. Government and agency securities $ — $ — $ 5 Asset-backed securities — — 13 State and political securities 86 18 1 Other debt securities 10 51 189 Total gross realized losses $ 96 $ 69 $ 208 Gross realized gains: Financial institution equity securities — 288 572 Other equity securities — — 217 Total gross realized gains $ — $ 288 $ 789 Gross realized losses: Financial institution equity securities — — — Other equity securities — 149 86 Total gross realized losses $ — $ 149 $ 86 There were no impairment charges included in gross realized losses for the years ended December 31, 2018 , 2017 , and 2016 . Investment securities with a carrying value of approximately $73,327,000 and $89,736,000 at December 31, 2018 and 2017 , respectively, were pledged to secure certain deposits, repurchase agreements, and for other purposes as required by law. Equity securities consist of Community Reinvestment Act funds along with other smaller investments in other financial institutions. At December 31, 2018 and December 31, 2017, we had $1,776,000 and $2,516,000 , respectively, in equity securities recorded at fair value. Prior to January 1, 2018, equity securities were stated at fair value with unrealized gains and losses reported as a separate component of AOCI, net of tax. At December 31, 2017, net unrealized gains of $679,000 had been recognized in AOCI. On January 1, 2018, these unrealized gains and losses were reclassified out of AOCI and into retained earnings with subsequent changes in fair value being recognized in net equity securities gains (losses). The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during the year ended December 31, 2018: (In Thousands) 2018 Net losses recognized in equity securities during the period $ (170 ) Less: Net gains realized on the sale of equity securities during the period 361 Unrealized losses recognized in equity securities held at reporting date $ (531 ) Net gains and losses on trading account securities are as follows for the for the years ended December 31, 2018 , 2017 , and 2016 . (In Thousands) 2018 2017 2016 Net (losses) gain on sales transaction $ (6 ) $ 16 $ 51 Net mark-to-market gains (losses) 9 (24 ) 7 Net gain (loss) on trading account securities $ 3 $ (8 ) $ 58 There is no concentration of investments that exceed ten percent of shareholders’ equity for any individual issuer, excluding those guaranteed by the U.S. Government. |
FEDERAL HOME LOAN BANK STOCK
FEDERAL HOME LOAN BANK STOCK | 12 Months Ended |
Dec. 31, 2018 | |
Federal Home Loan Banks [Abstract] | |
FEDERAL HOME LOAN BANK STOCK | FEDERAL HOME LOAN BANK STOCK The Banks are members of the Federal Home Loan Bank (“FHLB”) of Pittsburgh and as such, are required to maintain a minimum investment in stock of the FHLB that varies with the level of advances outstanding with the FHLB. The stock is bought from and sold to the FHLB based upon its $100 par value. The stock does not have a readily determinable fair value and as such is classified as restricted stock, carried at cost and evaluated for impairment as necessary. The stock’s value is determined by the ultimate recoverability of the par value rather than by recognizing temporary declines. The determination of whether the par value will ultimately be recovered is influenced by criteria such as the following: (a) the significance of the decline in net assets of the FHLB as compared to the capital stock amount and the length of time this situation has persisted (b) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance (c) the impact of legislative and regulatory changes on the customer base of the FHLB and (d) the liquidity position of the FHLB. Management evaluated the stock and concluded that the stock was not impaired for the periods presented herein. Management considered that the FHLB maintains regulatory capital ratios in excess of all regulatory capital requirements, liquidity appears adequate, new shares of FHLB stock continue to change hands at the $100 par value, and the payment of dividends. |
LOAN CREDIT QUALITY AND RELATED
LOAN CREDIT QUALITY AND RELATED ALLOWANCE FOR LOAN LOSSES | 12 Months Ended |
Dec. 31, 2018 | |
Loans and Leases Receivable Disclosure [Abstract] | |
LOAN CREDIT QUALITY AND RELATED ALLOWANCE FOR LOAN LOSSES | LOAN CREDIT QUALITY AND RELATED ALLOWANCE FOR LOAN LOSSES Management segments the Banks' loan portfolio to a level that enables risk and performance monitoring according to similar risk characteristics. Loans are segmented based on the underlying collateral characteristics. Categories include commercial, financial, and agricultural, real estate, consumer automobile, and other consumer installment loans. Real estate loans are further segmented into three categories: residential, commercial, and construction. The following table presents the related aging categories of loans, by segment, as of December 31, 2018 and 2017 : 2018 (In Thousands) Current Past Due 30 To 89 Days Past Due 90 & Still Accruing Non-Accrual Total Commercial, financial, and agricultural $ 182,651 $ 616 $ — $ 5,294 $ 188,561 Real estate mortgage: Residential 611,281 7,688 1,238 2,172 622,379 Commercial 361,624 2,349 — 7,722 371,695 Construction 43,144 305 — 74 43,523 Consumer automobile loans 132,713 412 27 31 133,183 Other consumer installment loans 23,902 636 9 5 24,552 1,355,315 $ 12,006 $ 1,274 $ 15,298 1,383,893 Net deferred loan fees and discounts 864 864 Allowance for loan losses (13,837 ) (13,837 ) Loans, net $ 1,342,342 $ 1,370,920 2017 (In Thousands) Current Past Due 30 To 89 Days Past Due 90 & Still Accruing Non-Accrual Total Commercial, financial, and agricultural $ 178,022 $ 663 $ 86 $ 114 $ 178,885 Real estate mortgage: Residential 588,278 6,853 318 1,628 597,077 Commercial 325,148 1,823 80 4,968 332,019 Construction 31,547 116 20 — 31,683 Consumer automobile loans 79,595 87 — 32 79,714 Other consumer installment loans 26,740 202 5 17 26,964 1,229,330 $ 9,744 $ 509 $ 6,759 1,246,342 Net deferred loan fees and discounts 272 272 Allowance for loan losses (12,858 ) (12,858 ) Loans, net $ 1,216,744 $ 1,233,756 The following table presents the interest income if interest had been recorded based on the original loan agreement terms and rate of interest for non-accrual loans and interest income recognized on a cash basis for non-accrual loans as of December 31, 2018 , 2017 , and 2016 : Year Ended December 31, 2018 2017 2016 (In Thousands) Interest Income That Would Have Been Recorded Based on Original Term and Rate Interest Income Recorded on a Cash Basis Interest Income That Would Have Been Recorded Based on Original Term and Rate Interest Income Recorded on a Cash Basis Interest Income That Would Have Been Recorded Based on Original Term and Rate Interest Income Recorded on a Cash Basis Commercial, financial, and agricultural $ 289 $ 235 $ 23 $ 15 $ 6 $ — Real estate mortgage: Residential 123 88 147 98 151 101 Commercial 405 212 390 238 496 105 Construction 5 4 — — — — Consumer automobile loans 7 5 1 — — — Other consumer installment loans 1 1 4 3 3 2 $ 830 $ 545 $ 565 $ 354 $ 656 $ 208 Impaired Loans Impaired loans are loans for which it is probable the Banks will not be able to collect all amounts due according to the contractual terms of the loan agreement. The Banks individually evaluate such loans for impairment and do not aggregate loans by major risk classifications. The definition of “impaired loans” is not the same as the definition of “non-accrual loans,” although the two categories overlap. The Banks may choose to place a loan on non-accrual status due to payment delinquency or uncertain collectability, while not classifying the loan as impaired. Factors considered by management in determining impairment include payment status and collateral value. The amount of impairment for these types of loans is determined by the difference between the present value of the expected cash flows related to the loan, using the original interest rate, and its recorded value, or as a practical expedient in the case of collateralized loans, the difference between the fair value of the collateral and the recorded amount of the loan. When foreclosure is probable, impairment is measured based on the fair value of the collateral. Management evaluates individual loans in all of the commercial segments for possible impairment if the loan is greater than $100,000 and if the loan is either on non-accrual status or has a risk rating of substandard or worse. Management may also elect to measure an individual loan for impairment if less than $100,000 on a case by case basis. Mortgage loans on one-to-four family properties and all consumer loans are large groups of smaller-balance homogeneous loans and are measured for impairment collectively with the exception of loans identified as troubled debt restructurings. Loans that experience insignificant payment delays, which are defined as 90 days or less, generally are not classified as impaired. Management determines the significance of payment delays on a case-by-case basis taking into consideration all circumstances surrounding the loan and the borrower including the length of the delay, the borrower’s prior payment record, and the amount of shortfall in relation to the principal and interest owed. Interest income for impaired loans is recorded consistent to the Banks' policy on non-accrual loans. The following table presents the recorded investment, unpaid principal balance, and related allowance of impaired loans by segment as of December 31, 2018 and 2017 : 2018 (In Thousands) Recorded Investment Unpaid Principal Balance Related Allowance With no related allowance recorded: Commercial, financial, and agricultural $ 1,152 $ 1,152 $ — Real estate mortgage: Residential 2,619 2,619 — Commercial 2,457 2,457 — Construction 74 74 — Consumer automobile loans 31 31 — Other consumer installment loans — — — 6,333 6,333 — With an allowance recorded: Commercial, financial, and agricultural 4,111 4,111 650 Real estate mortgage: Residential 1,591 1,591 168 Commercial 9,207 9,207 1,720 Construction — — — Consumer automobile loans — — — Other consumer installment loans 5 5 5 14,914 14,914 2,543 Total: Commercial, financial, and agricultural 5,263 5,263 650 Real estate mortgage: Residential 4,210 4,210 168 Commercial 11,664 11,664 1,720 Construction 74 74 — Consumer automobile loans 31 31 — Other consumer installment loans 5 5 5 $ 21,247 $ 21,247 $ 2,543 2017 (In Thousands) Recorded Investment Unpaid Principal Balance Related Allowance With no related allowance recorded: Commercial, financial, and agricultural $ 1,033 $ 1,033 $ — Real estate mortgage: Residential 1,428 1,428 — Commercial 1,465 1,465 — Construction — — — Consumer automobile loans — — — Other consumer installment loans — — — 3,926 3,926 — With an allowance recorded: Commercial, financial, and agricultural 235 235 96 Real estate mortgage: Residential 2,304 2,353 367 Commercial 7,981 8,031 1,721 Construction — — — Consumer automobile loans — — — Other consumer installment loans — — — 10,520 10,619 2,184 Total: Commercial, financial, and agricultural 1,268 1,268 96 Real estate mortgage: Residential 3,732 3,781 367 Commercial 9,446 9,496 1,721 Construction — — — Consumer automobile loans — — — Other consumer installment loans — — — $ 14,446 $ 14,545 $ 2,184 The following table presents the average recorded investment in impaired loans and related interest income recognized for December 31, 2018 , 2017 , and 2016 : 2018 (In Thousands) Average Investment in Impaired Loans Interest Income Recognized on an Accrual Basis on Impaired Loans Interest Income Recognized on a Cash Basis on Impaired Loans Commercial, financial, and agricultural $ 2,018 $ 71 $ 168 Real estate mortgage: Residential 3,962 134 87 Commercial 9,524 235 194 Construction 15 — 4 Consumer automobile loans 14 — 1 Other consumer installment loans 1 — 1 $ 15,534 $ 440 $ 455 2017 (In Thousands) Average Investment in Impaired Loans Interest Income Recognized on an Accrual Basis on Impaired Loans Interest Income Recognized on a Cash Basis on Impaired Loans Commercial, financial, and agricultural $ 727 $ 41 $ 7 Real estate mortgage: Residential 3,233 75 91 Commercial 11,551 186 233 Construction — — — Consumer automobile loans — — — Other consumer installment loans 5 — 1 $ 15,516 $ 302 $ 332 2016 (In Thousands) Average Investment in Impaired Loans Interest Income Recognized on an Accrual Basis on Impaired Loans Interest Income Recognized on a Cash Basis on Impaired Loans Commercial, financial, and agricultural $ 400 $ 16 $ 1 Real estate mortgage: Residential 3,471 89 101 Commercial 12,887 187 110 Construction 138 — — Consumer automobile loans — — — Other consumer installment loans — — — $ 16,896 $ 292 $ 212 At December 31, 2018, additional funds totaling $14,000 are committed to be advanced in connection with impaired loans. Modifications The loan portfolio also includes certain loans that have been modified in a Troubled Debt Restructuring ("TDR"), where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance, or other actions. Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months. Loan modifications that are considered TDRs completed during the twelve months ended December 31, 2018 and 2017 were as follows: Year Ended December 31, 2018 2017 (In Thousands, Except Number of Contracts) Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Commercial, financial, and agricultural 1 $ 1,027 $ 1,027 — $ — $ — Real estate mortgage: Residential 3 419 419 6 1,015 1,015 Commercial 1 106 106 2 371 371 Construction — — — — — — Other consumer installment loans — — — — — — Total 5 $ 1,552 $ 1,552 8 $ 1,386 $ 1,386 Of the five new troubled debt restructurings that were granted for the year ended December 31, 2018, four loans totaling $1,546,000 were granted payment concessions and one loan totaling $6,000 was granted a term concession. Of the eight new troubled debt restructurings that were granted for the year ended December 31, 2017, six loans totaling $ 1,061,000 were granted payment concessions, one loan totaling $ 273,000 was granted a rate concession, and one loan totaling $ 52,000 was granted a term concession. Loan modifications considered troubled debt restructurings made during the twelve months previous to December 31, 2018, that have defaulted during the twelve month period ending December 31, 2018 were as follows: Year Ended December 31, 2018 (In Thousands, Except Number of Contracts) Number of Contracts Recorded Investment Commercial, financial, and agricultural — $ — Real estate mortgage: Residential 1 1 Commercial — — Total 1 $ 1 There were no loan modifications considered troubled debt restructurings made during the twelve months previous to December 31, 2017 that have defaulted during the corresponding twelve month period. Internal Risk Ratings Management uses a ten point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first six categories are considered not criticized, and are aggregated as “Pass” rated. The criticized rating categories utilized by management generally follow bank regulatory definitions. The Special Mention category includes assets that are currently protected but are potentially weak, resulting in an undue and unwarranted credit risk, but not to the point of justifying a Substandard classification. Loans in the Substandard category have well-defined weaknesses that jeopardize the liquidation of the debt, and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. All loans greater than 90 days past due are evaluated for Substandard classification. Loans in the Doubtful category exhibit the same weaknesses found in the Substandard loans, however, the weaknesses are more pronounced. Such loans are static and collection in full is improbable. However, these loans are not yet rated as loss because certain events may occur which would salvage the debt. Loans classified Loss are considered uncollectible and charge-off is imminent. To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Banks have a structured loan rating process with several layers of internal and external oversight. Generally, consumer and residential mortgage loans are included in the pass category unless a specific action, such as bankruptcy, repossession, or death occurs to raise awareness of a possible credit event. An external annual loan review of large commercial relationships is performed, as well as a sample of smaller transactions. During 2018, the threshold for the annual loan review was commercial relationships $1,750,000 or greater for JSSB and $1,500,000 or greater for Luzerne. Confirmation of the appropriate risk category is included in the review. Detailed reviews, including plans for resolution, are performed on loans classified as Substandard, Doubtful, or Loss on a quarterly basis. The following table presents the credit quality categories identified above as of December 31, 2018 and 2017 : 2018 Commercial, Finance, and Agricultural Real Estate Mortgages Consumer automobile Other consumer installment (In Thousands) Residential Commercial Construction Totals Pass $ 179,840 $ 619,800 $ 351,703 $ 43,523 $ 133,183 $ 24,552 $ 1,352,601 Special Mention 3,426 694 6,587 — — — 10,707 Substandard 5,295 1,885 13,405 — — — 20,585 Total $ 188,561 $ 622,379 $ 371,695 $ 43,523 $ 133,183 $ 24,552 $ 1,383,893 2017 Commercial, Finance, and Agricultural Real Estate Mortgages Consumer automobile Other consumer installment (In Thousands) Residential Commercial Construction Totals Pass $ 175,603 $ 593,828 $ 311,209 $ 31,535 $ 79,714 $ 26,964 $ 1,218,853 Special Mention 738 1,043 7,337 — — — 9,118 Substandard 2,544 2,206 13,473 148 — — 18,371 Total $ 178,885 $ 597,077 $ 332,019 $ 31,683 $ 79,714 $ 26,964 $ 1,246,342 Allowance for Loan Losses An allowance for loan losses (“ALL”) is maintained to absorb losses from the loan portfolio. The ALL is based on management’s continuing evaluation of the risk characteristics and credit quality of the loan portfolio, assessment of current economic conditions, diversification and size of the portfolio, adequacy of collateral, past and anticipated future loss experience, and the amount of non-performing loans. The Banks' methodology for determining the ALL is based on the requirements of ASC Section 310-10-35 for loans individually evaluated for impairment (previously discussed) and ASC Subtopic 450-20 for loans collectively evaluated for impairment, as well as the Interagency Policy Statements on the Allowance for Loan and Lease Losses and other bank regulatory guidance. The total of the two components represents the Banks' ALL. Loans that are collectively evaluated for impairment are analyzed with general allowances being made as appropriate. Allowances are segmented based on collateral characteristics previously disclosed, and consistent with credit quality monitoring. Loans that are collectively evaluated for impairment are grouped into two classes for evaluation. A general allowance is determined for “Pass” rated credits, while a separate pool allowance is provided for “Criticized” rated credits that are not individually evaluated for impairment. For the general allowances historical loss trends are used in the estimation of losses in the current portfolio. These historical loss amounts are modified by other qualitative factors. A historical charge-off factor is calculated utilizing a twelve quarter moving average. However, management may adjust the moving average time frame by up to four quarters to adjust for variances in the economic cycle. Management has identified a number of additional qualitative factors which it uses to supplement the historical charge-off factor because these factors are likely to cause estimated credit losses associated with the existing loan pools to differ from historical loss experience. The additional factors that are evaluated quarterly and updated using information obtained from internal, regulatory, and governmental sources are: national and local economic trends and conditions; levels of and trends in delinquency rates and non-accrual loans; trends in volumes and terms of loans; effects of changes in lending policies; experience, ability, and depth of lending staff; and concentrations of credit from a loan type, industry, and/or geographic standpoint. There was a substantial increase in our indirect loan portfolio in 2018 which resulted in an increase of 10 basis points within this qualitative factor. Recent industry losses in construction loans warrants a higher qualitative factor. Additionally, the tenure of our credit department allowed us to incur a slight adjustment within our experience factor. Due to an increase in foreclosures nationally, we adjusted our residential loans category accordingly. Loans in the criticized pools, which possess certain qualities or characteristics that may lead to collection and loss issues, are closely monitored by management and subject to additional qualitative factors. Management also monitors industry loss factors by loan segment for applicable adjustments to actual loss experience. Management reviews the loan portfolio on a quarterly basis in order to make appropriate and timely adjustments to the ALL. When information confirms all or part of specific loans to be uncollectible, these amounts are promptly charged off against the ALL. Over the last three years, various quantitative and qualitative factors indicate changes in our provision for loan losses. The provision for commercial and agricultural loans increased based on changes in the economic cycle and our historical loss factors within this loan type. The change in the provision for residential real estate loans vary based on our observations of industry trends during 2018 in national and market area foreclosure rates. The provision for this loan type is adjusted by national indices as well as our historical losses. The provision for commercial and construction real estate loans declined as losses have been minimal and collateral positions have strenghtened. The provision for consumer automobiles has increased over the last three years. This is due to the increasing trend in volume of loans we have within this loan type. The provision for other consumer installment loans has remained steady in recent years based on consistent national and economic trends. Activity in the allowance is presented for the twelve months ended December 31, 2018 , 2017 , and 2016 : 2018 Commercial, Finance, and Agricultural Real Estate Mortgages Consumer automobile Other consumer installment (In Thousands) Residential Commercial Construction Unallocated Totals Beginning Balance $ 1,177 $ 5,679 $ 4,277 $ 155 $ 804 $ 271 $ 495 $ 12,858 Charge-offs (82 ) (276 ) (56 ) — (246 ) (303 ) — (963 ) Recoveries 36 74 — 7 16 74 — 207 Provision 549 139 (174 ) (19 ) 754 217 269 1,735 Ending Balance $ 1,680 $ 5,616 $ 4,047 $ 143 $ 1,328 $ 259 $ 764 $ 13,837 2017 Commercial, Finance, and Agricultural Real Estate Mortgages Consumer automobile Other consumer installment (In Thousands) Residential Commercial Construction Unallocated Totals Beginning Balance $ 1,554 $ 5,383 $ 4,975 $ 178 $ 143 $ 273 $ 390 $ 12,896 Charge-offs (106 ) (578 ) (58 ) — (57 ) (246 ) — (1,045 ) Recoveries 135 55 1 9 2 75 — 277 Provision (406 ) 819 (641 ) (32 ) 716 169 105 730 Ending Balance $ 1,177 $ 5,679 $ 4,277 $ 155 $ 804 $ 271 $ 495 $ 12,858 2016 Commercial, Finance, and Agricultural Real Estate Mortgages Consumer automobile Other consumer installment (In Thousands) Residential Commercial Construction Unallocated Totals Beginning Balance $ 1,532 $ 5,116 $ 4,217 $ 160 $ — $ 243 $ 776 $ 12,044 Charge-offs (167 ) (39 ) (93 ) (2 ) — (229 ) — (530 ) Recoveries 62 15 8 9 — 92 — 186 Provision 127 291 843 11 143 167 (386 ) 1,196 Ending Balance $ 1,554 $ 5,383 $ 4,975 $ 178 $ 143 $ 273 $ 390 $ 12,896 The Corporation grants commercial, industrial, residential, and installment loans to customers throughout north-central and north-eastern Pennsylvania. Although the Corporation has a diversified loan portfolio at December 31, 2018 and 2017 , a substantial portion of its debtors’ ability to honor their contracts is dependent on the economic conditions within this region. The amount of foreclosed residential real estate held at December 31, 2018 and December 31, 2017 , totaled $624,000 and $422,000 , respectively. Consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process at December 31, 2018 and December 31, 2017 , totaled $167,000 and $378,000 , respectively. The Corporation has a concentration of loans at December 31, 2018 and 2017 as follows: 2018 2017 Owners of residential rental properties 14.61 % 15.16 % Owners of commercial rental properties 12.24 % 13.57 % The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2018 and 2017 : 2018 Commercial, Finance, and Agricultural Real Estate Mortgages Consumer automobile Other consumer installment Unallocated Totals (In Thousands) Residential Commercial Construction Allowance for Loan Losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 650 $ 168 $ 1,720 $ — $ — $ 5 $ — $ 2,543 Collectively evaluated for impairment 1,030 5,448 2,327 143 1,328 254 764 11,294 Total ending allowance balance $ 1,680 $ 5,616 $ 4,047 $ 143 $ 1,328 $ 259 $ 764 $ 13,837 Loans: Individually evaluated for impairment $ 5,263 $ 4,210 $ 11,664 $ 74 $ 31 $ 5 $ 21,247 Collectively evaluated for impairment 183,298 618,169 360,031 43,449 133,152 24,547 1,362,646 Total ending loans balance $ 188,561 $ 622,379 $ 371,695 $ 43,523 $ 133,183 $ 24,552 $ 1,383,893 2017 Commercial, Finance, and Agricultural Real Estate Mortgages Consumer automobile Other consumer installment Unallocated Totals (In Thousands) Residential Commercial Construction Allowance for Loan Losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 96 $ 367 $ 1,721 $ — $ — $ — $ — $ 2,184 Collectively evaluated for impairment 1,081 5,312 2,556 155 804 271 495 10,674 Total ending allowance balance $ 1,177 $ 5,679 $ 4,277 $ 155 $ 804 $ 271 $ 495 $ 12,858 Loans: Individually evaluated for impairment $ 1,268 $ 3,732 $ 9,446 $ — $ — $ — $ 14,446 Collectively evaluated for impairment 177,617 593,345 322,573 31,683 79,714 26,964 1,231,896 Total ending loans balance $ 178,885 $ 597,077 $ 332,019 $ 31,683 $ 79,714 $ 26,964 $ 1,246,342 |
PREMISES AND EQUIPMENT
PREMISES AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PREMISES AND EQUIPMENT | PREMISES AND EQUIPMENT Major classifications of premises and equipment are summarized as follows at December 31, 2018 and 2017 : (In Thousands) 2018 2017 Land $ 7,111 $ 7,107 Premises 21,640 20,808 Furniture and equipment 10,369 9,895 Leasehold improvements 2,911 2,311 Total 42,031 40,121 Less accumulated depreciation and amortization 14,451 12,735 Net premises and equipment $ 27,580 $ 27,386 Depreciation and amortization related to premises and equipment for the years ended 2018 , 2017 , and 2016 was $1,789,000 $1,659,000 , and $1,578,000 , respectively. |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLES | GOODWILL AND OTHER INTANGIBLES As of December 31, 2018 and 2017 , goodwill had a gross carrying value of $17,380,000 and accumulated amortization of $276,000 resulting in a net carrying amount of $17,104,000 . The gross carrying amount of goodwill is tested for impairment in the third quarter of each fiscal year. Based on the fair value of the reporting unit, estimated using the expected present value of future cash flows, there was no evidence of impairment of the carrying amount at December 31, 2018 or 2017 . Identifiable intangibles are amortized to their estimated residual values over the expected useful lives. Such lives are also periodically reassessed to determine if any amortization period adjustments are required. Since the acquisition, no such adjustments were recorded. The identifiable intangible assets consist of a core deposit intangible and a trade name intangible which are being amortized on an accelerated basis, and also book of business intangible that is being amortized on a straight-line basis over the useful life of such assets. The net carrying amount of the core deposit intangible, the trade name intangible, and the book of business intangible at December 31, 2018 was $413,000 , $30,000 , and $719,000 respectively, with $1,468,000 , $103,000 , and $301,000 accumulated amortization as of that date. As of December 31, 2018 , the estimated future amortization expense for the core deposit and trade name intangible was: (In Thousands) Core Deposit Intangible Trade Name Intangible Book of Business Intangible 2019 $ 151 $ 11 $ 102 2020 117 8 102 2021 83 6 102 2022 48 4 102 2023 14 1 102 2024 — — 102 2025 — — 102 2026 — — 5 $ 413 $ 30 $ 719 |
TIME DEPOSITS
TIME DEPOSITS | 12 Months Ended |
Dec. 31, 2018 | |
Banking and Thrift [Abstract] | |
TIME DEPOSITS | TIME DEPOSITS Time deposits of $250,000 or more totaled approximately $49,826,000 on December 31, 2018 and $43,262,000 on December 31, 2017 . Interest expense on time deposits of $100,000 or more was approximately $2,238,000 , $1,479,000 , and $1,305,000 , for the years ended December 31, 2018 , 2017 , and 2016 , respectively. At December 31, 2018 , the scheduled maturities on time deposits of $100,000 or more are as follows: (In Thousands) 2018 Three months or less $ 38,367 Three months to six months 28,102 Six months to twelve months 23,534 Over twelve months 83,750 Total $ 173,753 Total time deposit maturities are as follows at December 31, 2018 : (In Thousands) 2018 2019 $ 133,985 2020 74,062 2021 57,159 2022 14,878 2023 5,225 Thereafter 1,302 Total $ 286,611 |
SHORT-TERM BORROWINGS
SHORT-TERM BORROWINGS | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
SHORT-TERM BORROWINGS | SHORT-TERM BORROWINGS Short-term borrowings consist of securities sold under agreements to repurchase and primarily FHLB advances, which generally represent overnight or less than six month borrowings. In addition to the outstanding balances noted below, the Banks also have additional lines of credit totaling $57,000,000 available from correspondent banks other than the FHLB. The outstanding balances and related information for short-term borrowings are summarized as follows at December 31, 2018 , 2017 , and 2016 : (In Thousands) 2018 2017 2016 Repurchase Agreements: Balance at year end $ 5,662 $ 7,878 $ 13,241 Maximum amount outstanding at any month end 8,431 13,782 17,827 Average balance outstanding during the year 7,043 10,425 15,394 Weighted-average interest rate: At year end 0.20 % 0.13 % 0.16 % Paid during the year 0.13 % 0.14 % 0.18 % Overnight: Balance at year end $ 162,203 $ 92,870 $ — Maximum amount outstanding at any month end 162,203 92,870 24,346 Average balance outstanding during the year 78,043 15,559 3,124 Weighted-average interest rate: At year end 2.62 % 1.54 % — % Paid during the year 2.24 % 1.41 % 0.57 % We utilize securities sold under agreements to repurchase to facilitate the needs of our customers and to facilitate secured short-term funding needs. Securities sold under agreements to repurchase are stated at the amount of cash received in connection with the transaction. We monitor collateral levels on a continuous basis. We may be required to provide additional collateral based on the fair value of the underlying securities. Securities pledged as collateral under repurchase agreements are maintained with our safekeeping agents.The remaining contractual maturity of repurchase agreements in the consolidated balance sheets as of December 31, 2018 and December 31, 2017 is presented in the following tables. 2018 2017 Remaining Contractual Maturity of the Agreements (In Thousands) Overnight and Continuous Overnight and Continuous Repurchase Agreements: Mortgage-backed securities $ 778 $ 1,898 State and political securities 1,003 6,894 Other debt securities 6,599 8,662 Total carrying value of collateral pledged $ 8,380 $ 17,454 Total liability recognized for repurchase agreements $ 5,662 $ 7,878 |
LONG-TERM BORROWINGS
LONG-TERM BORROWINGS | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
LONG-TERM BORROWINGS | LONG-TERM BORROWINGS The following represents outstanding long-term borrowings with the FHLB by contractual maturities at December 31, 2018 and 2017 : (In Thousands) Weighted Average Interest Rate Stated Interest Rate Range Description Maturity 2018 2017 From To 2018 2017 Variable 2018 — % 3.18 % 3.18 % 3.18 % $ — $ 10,000 Total Variable — % 3.18 % — 10,000 Fixed 2018 — % 1.13 % 1.13 % 1.13 % — 2,000 Fixed 2019 1.84 % 1.59 % 1.54 % 2.12 % 32,292 17,292 Fixed 2020 1.91 % 1.71 % 1.62 % 2.29 % 43,333 28,333 Fixed 2021 2.73 % — % 2.45 % 3.00 % 30,000 — Fixed 2022 2.24 % 1.99 % 1.98 % 2.56 % 23,000 13,000 Fixed 2023 3.10 % — % 3.10 % 3.10 % 10,000 — Total Fixed 2.21 % 1.72 % 138,625 60,625 Total 2.21 % 1.92 % $ 138,625 $ 70,625 (In Thousands) Year Ending December 31, Amount Weighted Average Rate 2019 $ 32,292 1.84 % 2020 43,333 1.91 % 2021 30,000 2.73 % 2022 23,000 2.24 % 2023 10,000 3.10 % $ 138,625 2.21 % The Banks maintain a credit arrangement which includes a revolving line of credit with the FHLB. Under this credit arrangement, at December 31, 2018 , JSSB has a remaining borrowing capacity of $139,140,000 and Luzerne has a remaining capacity of $155,139,000 , which are subject to annual renewal and typically incur no service charges. Under terms of a blanket agreement, collateral for the FHLB borrowings must be secured by certain qualifying assets of each Bank which consist principally of first mortgage loans and state and political securities, along with other securities. In December 2012, JSSB entered in to a capital lease on a piece of land in Lewisburg, Pennsylvania. The carrying amount of the land as of December 31, 2018 and 2017 was $827,000 . The present value of minimum lease payments at December 31, 2018 and 2017 was $317,000 and $345,000 . The following is a schedule showing the future minimum lease payments under the capital lease by years and the present value of the minimum lease payments as of December 31, 2018. The interest rate related to the lease obligation is 2.75% and the maturity date is October 2023. (In Thousands) Lease Payment Interest Present Value of Minimum Lease Payment 2019 $ 38 $ 9 $ 29 2020 38 7 31 2021 38 7 31 2022 37 6 31 2023 200 5 195 $ 351 $ 34 $ 317 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The following temporary differences gave rise to the net deferred tax asset position at December 31, 2018 and 2017 : (In Thousands) 2018 2017 Deferred tax assets: Allowance for loan losses $ 2,909 $ 2,714 Deferred compensation 1,339 1,235 Defined pension 624 684 Deferred loan fees and discounts 274 211 Investment securities allowance 52 45 Unrealized loss on available for sale securities 362 14 Other 752 727 Total 6,312 5,630 Deferred tax liabilities: Investment security accretion 104 95 Depreciation 451 537 Amortization 603 610 Total 1,158 1,242 Deferred tax asset, net $ 5,154 $ 4,388 No valuation allowance was established at December 31, 2018 and 2017 , because of the Corporation’s ability to carry back capital losses to recover taxes paid in previous years and certain tax strategies, together with the anticipated future taxable income as evidenced by the Corporation’s earning potential. The Corporation is no longer subject to federal, state, and local examinations by tax authorities for years before 2014. The provision or benefit for income taxes is comprised of the following for the year ended December 31, 2018 , 2017 , and 2016 : (In Thousands) 2018 2017 2016 Currently payable $ 3,143 $ 5,690 $ 3,054 Deferred benefit (324 ) (955 ) 1,543 Change in corporate tax rate — 2,724 — Total provision $ 2,819 $ 7,459 $ 4,597 A reconciliation between the expected income tax or benefit and the effective income tax rate on income before income tax provision or benefit follows for the year ended December 31, 2018 , 2017 , and 2016 : 2018 2017 2016 (In Thousands) Amount % Amount % Amount % Provision at expected rate $ 3,681 21.00 % $ 5,859 34.00 % $ 5,804 34.00 % (Decrease) increase in tax resulting from: Tax-exempt income (633 ) (3.61 ) (811 ) (4.71 ) (1,092 ) (6.40 ) Tax credits (177 ) (1.01 ) (177 ) (1.03 ) (312 ) (1.83 ) Change in corporate tax rate — — 2,724 15.81 — — Other, net (52 ) (0.30 ) (136 ) (0.78 ) 197 1.16 Effective income tax provision and rate $ 2,819 16.08 % $ 7,459 43.29 % $ 4,597 26.93 % |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2018 | |
Defined Benefit Plan [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Defined Benefit Pension Plan The Corporation has a noncontributory defined benefit pension plan (the “Plan”) for all employees meeting certain age and length of service requirements that were hired prior to January 1, 2004, at which time entrance into the Plan was frozen. The benefit accrual for the Plan was subsequently frozen at December 31, 2014. Benefits are based primarily on years of service and the average annual compensation during the highest five consecutive years within the final ten years of employment, until December 31, 2014 when the benefit accrual was frozen. The following table sets forth the obligation and funded status as of December 31, 2018 and 2017 : (In Thousands) 2018 2017 Change in benefit obligation: Benefit obligation at beginning of year $ 20,669 $ 19,289 Interest cost 706 756 Actuarial loss 141 159 Benefits paid (797 ) (782 ) Other, change in actuarial assumptions (1,697 ) 1,247 Benefit obligation at end of year $ 19,022 $ 20,669 Change in plan assets: Fair value of plan assets at beginning of year $ 17,486 $ 15,090 Actual return on plan assets (1,078 ) 2,424 Employer contribution 750 750 Benefits paid (797 ) (782 ) Adjustment to fair value of plan assets 5 4 Fair value of plan assets at end of year 16,366 17,486 Funded status $ (2,656 ) $ (3,183 ) Accounts recognized on balance sheet as: Total liabilities $ (2,656 ) $ (3,183 ) Amounts not yet recognized as a component of net periodic pension cost: Amounts recognized in accumulated other comprehensive income (loss) consist of: Net loss $ 6,678 $ 6,227 The accumulated benefit obligation for the Plan was $19,022,000 and $20,669,000 at December 31, 2018 and 2017 , respectively. Components of Net Periodic Cost and Other Amounts Recognized in Other Comprehensive Income (Loss) as of December 31, 2018 , 2017 , and 2016 are as follows: (In Thousands) 2018 2017 2016 Net periodic pension cost: Service cost $ — $ — $ 55 Interest cost 706 756 775 Expected return on plan assets (1,098 ) (926 ) (989 ) Amortization of unrecognized net loss 165 174 153 Net periodic (benefit) cost $ (227 ) $ 4 $ (6 ) Assumptions Weighted-average assumptions used to determine benefit obligations at December 31, 2018 , 2017 , and 2016 : 2018 2017 2016 Discount rate 4.10 % 3.47 % 3.98 % Rate of compensation increase N/A N/A N/A Weighted-average assumptions used to determine net periodic cost for years ended December 31, 2018 , 2017 , and 2016 : 2018 2017 2016 Discount rate 3.47 % 3.98 % 4.17 % Expected long-term return on plan assets 7.00 % 7.00 % 7.00 % The expected long-term rate of return was estimated using market benchmarks by which the plan assets would outperform the market value in the future, based on historical experience adjusted for changes in asset allocation and expectations for overall lower future returns on similar investments compared to past periods. Plan Assets The Plan’s weighted-average asset allocations at December 31, 2018 and 2017 by asset category are as follows: Asset Category 2018 2017 Cash 4.70 % 4.96 % Fixed income securities 12.98 % 11.42 % Equity 64.26 % 66.90 % Inflation Hedges/Real Assets 5.90 % 5.82 % Hedged Strategies 12.16 % 10.90 % Total 100.00 % 100.00 % The investment objective for the Plan is to maximize total return with tolerance for slightly above average risk, meaning the fund is able to tolerate short-term volatility to achieve above-average returns over the long term. Asset allocation favors equities, with target allocation of approximately 62% equity securities, 15.0% fixed income securities, 10% inflation hedges/real assets, 10% hedged strategies, and 3% cash. Due to volatility in the market, the target allocation is not always desirable and asset allocations will fluctuate between the acceptable ranges. The equity portfolio’s exposure is primarily in mid and large capitalization domestic equities with limited exposure to small capitalization and international stocks. It is management’s intent to give the investment managers flexibility, within the overall guidelines, with respect to investment decisions and their timing. However, certain investments require specific review and approval by management. Management is also informed of anticipated, significant modifications of any previously approved investment, or anticipated use of derivatives to execute investment strategies. The following table sets forth by level, within the fair value hierarchy detailed in Note 21 - Fair Value Measurements, the Plan’s assets at fair value as of December 31, 2018 and 2017 : 2018 (In Thousands) Level I Level II Level III Total Assets: Cash and cash equivalents $ 770 $ — $ — $ 770 Mutual funds - taxable fixed income 2,120 — — 2,120 Mutual funds - domestic equity 8,550 — — 8,550 Mutual funds - international equity 1,970 — — 1,970 Inflation Hedges/Real Assets 965 — — 965 Hedged Strategies 1,991 — — 1,991 Total assets at fair value $ 16,366 $ — $ — $ 16,366 2017 (In Thousands) Level I Level II Level III Total Assets: Cash and cash equivalents $ 868 $ — $ — $ 868 Mutual funds - taxable fixed income 1,992 — — 1,992 Mutual funds - domestic equity 9,358 — — 9,358 Mutual funds - international equity 2,343 — — 2,343 Inflation Hedges/Real Assets 1,019 — — 1,019 Hedged Strategies 1,906 — — 1,906 Total assets at fair value $ 17,486 $ — $ — $ 17,486 The following future benefit payments are expected to be paid: (In Thousands) 2019 $ 886 2020 918 2021 910 2022 929 2023 1,000 2024-2028 5,444 $ 10,087 The Corporation expects to contribute a minimum of $500,000 to its Pension Plan in 2019 . 401(k) Savings Plan The Corporation also offers a 401(k) savings plan in which eligible participating employees may elect to contribute up to a maximum percentage allowable not to exceed the limits of Code Sections 401(k), 404, and 415. The Corporation may make matching contributions equal to a discretionary percentage that is determined by the Board of Directors. Participants are at all times fully vested in their contributions and vest over a period of five years regarding the employer contribution. Contribution expense was approximately $428,000 , $369,000 , and $215,000 for the years ended December 31, 2018 , 2017 , and 2016 , respectively. Deferred Compensation Plan The Corporation has a deferred compensation plan whereby participating directors elect to forego directors’ fees paid in cash. Under this plan, the Corporation will make payments for a ten -year period beginning at the later of age 65 or ceasing to be a director in most cases or at death, if earlier, at which time payments would be made to their designated beneficiaries. To fund benefits under the deferred compensation plan, the Corporation has acquired bank-owned life insurance policies on the lives of the participating directors for which insurance benefits are payable to the Corporation. The Corporation incurred expenses related to the plan of $370,000 , $330,000 , and $303,000 for the years ended December 31, 2018 , 2017 , and 2016 , respectively. Benefits paid under the plan were approximately $59,000 , $79,000 , and $85,000 in 2018 , 2017 , and 2016 , respectively. |
STOCK OPTIONS
STOCK OPTIONS | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options | STOCK OPTIONS In 2014, the Corporation adopted the 2014 Equity Incentive Plan designed to help the Corporation attract, retain, and motivate employees and non-employee directors. Incentive stock options, non-qualified stock options, and restricted stock may be granted as part of the plan. On March 24, 2017, the Corporation issued 70,000 stock options with a strike price of $44.21 to employees. The options granted in 2017 all expire ten years from the grant date; however, of the 70,000 grants awarded, 46,250 of the options have a three year vesting period while the remaining 23,750 options vest in five years. The Corporation issued a total of 174,700 stock options during 2018 and expire ten years from the grant date. On January 5, 2018 a total of 25,000 options were issued and the remaining 149,700 options were issued on August 24, 2018. Of the 174,700 options issued, 62,700 have a vesting period of three years and the remaining 112,000 options vest in five years. A summary of stock option activity for the year ended December 31, 2018 is presented below: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2015 34,750 42.03 9.67 14,943 Granted — — Exercised — — Forfeited (8,250 ) 42.03 Expired — — Outstanding at December 31, 2016 26,500 42.03 8.66 224,455 Granted 70,000 44.21 9.23 Exercised — — Forfeited (3,000 ) 44.21 Expired — — Outstanding at December 31, 2017 93,500 $ 43.59 8.79 $ 279,365 Granted 174,700 45.87 9.56 Exercised — — Forfeited (4,500 ) 42.76 Expired — — Outstanding at December 31, 2018 263,700 $ 45.12 8.97 $ — Options exercisable at December 31, 2018 — $ — — $ — On December 31, 2018 , a total of 263,700 options were outstanding. Outstanding options at December 31, 2018 and the related vesting schedules are summarized below: Stock Options Granted Date Shares Forfeited Outstanding Strike Price Vesting Period Expiration August 24, 2018 50,200 — 50,200 $ 46.00 3 years 10 years August 24, 2018 99,500 — 99,500 46.00 5 years 10 years January 5, 2018 12,500 — 12,500 45.11 3 years 10 years January 5, 2018 12,500 — 12,500 45.11 5 years 10 years March 24, 2017 46,250 (4,500 ) 41,750 44.21 3 years 10 years March 24, 2017 23,750 — 23,750 44.21 5 years 10 years August 27, 2015 38,750 (15,250 ) 23,500 42.03 5 years 10 years The fair value of stock options is estimated using the Black-Scholes option pricing model. The following is a summary of the assumptions used in this model for the stock options granted during 2018 and 2017 (no options were issued during 2016): 2018 2017 Risk-free interest rate 2.68 % 1.90 % Expected volatility 24.78 % 27.63 % Expected dividend yield 2.16 % 4.20 % Expected life 7.15 years 6.84 years Weighted average grant date fair value per option $ 7.72 $ 8.99 The estimated fair value of options, including the effect of estimated forfeitures, is recognized as expense on a straightline basis over the options’ vesting periods while ensuring that the cumulative amount of compensation cost recognized at least equals the value of the vested portion of the award at that date. The Corporation determines the fair value of options granted using the Black-Scholes option-pricing model. The risk-free interest rate is based on the United States Treasury bond with a similar term to the expected life of the options at the grant date. Expected volatility was estimated based on the adjusted historic volatility of the Corporation’s shares. The expected life was estimated to equal the contractual life of the options. The dividend yield rate was based upon recent historical dividends paid on shares. For the years ended December 31, 2018 , 2017 , and 2016 there was $486,000 , $29,000 , and $19,000 in total share-based compensation expense, respectively. The compensation expense is recorded as part of the non-interest expenses in the Consolidated Statement of Income. As of December 31, 2018 , total unrecognized compensation costs related to non-vested options was $1,685,000 which is expected to be recognized over a period of 3.69 years. |
EMPLOYEE STOCK PURCHASE PLAN
EMPLOYEE STOCK PURCHASE PLAN | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
EMPLOYEE STOCK PURCHASE PLAN | EMPLOYEE STOCK PURCHASE PLAN The Corporation maintains the Penns Woods Bancorp, Inc. Employee Stock Purchase Plan (“Plan”). The Plan is intended to encourage employee participation in the ownership and economic progress of the Corporation. The Plan allows for up to 1,000,000 shares to be purchased by employees. The purchase price of the shares is 95% of market value with an employee eligible to purchase up to the lesser of 15% of base compensation or $12,000 in market value annually. There were 2,359 and 2,230 shares issued under the plan for the years ended December 31, 2018 and 2017 , respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Certain directors and executive officers of the Corporation and the Banks, including their immediate families and companies in which they are principal owners (more than ten percent), are indebted to the Corporation. Such indebtedness was incurred in the ordinary course of business on the same terms and at those rates prevailing at the time for comparable transactions with others. A summary of loan activity with executive officers, directors, principal shareholders, and associates of such persons is listed below for the years ended December 31, 2018 and 2017 : (In Thousands) Beginning Balance New Loans Repayments Ending Balance 2017 $ 8,877 $ 13,147 $ (3,013 ) $ 19,011 2018 19,011 5,602 (6,822 ) 17,791 Deposits from related parties held by the Banks amounted to $16,836,000 at December 31, 2018 and $21,700,000 at December 31, 2017 . |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | COMMITMENTS AND CONTINGENT LIABILITIES The following schedule shows future minimum rental payments under operating leases with noncancellable terms in excess of one year as of December 31, 2018 : (In Thousands) 2019 $ 546 2020 560 2021 563 2022 456 2023 601 Thereafter 2,117 $ 4,843 The Corporation’s operating lease obligations represent short and long-term lease and rental payments for facilities and equipment. Total rental expense for all operating leases for the years ended December 31, 2018 , 2017 , and 2016 were $583,000 , $584,000 , and $573,000 , respectively. The Corporation is subject to lawsuits and claims arising out of its business. There are no such legal proceedings or claims currently pending or threatened other than those encountered during the normal course of business. |
OFF-BALANCE SHEET RISK
OFF-BALANCE SHEET RISK | 12 Months Ended |
Dec. 31, 2018 | |
Off Balance Sheet Risk | |
OFF-BALANCE SHEET RISK | OFF-BALANCE SHEET RISK The Corporation is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit, interest rate, or liquidity risk in excess of the amount recognized in the Consolidated Balance Sheet. The contract amounts of these instruments express the extent of involvement the Corporation has in particular classes of financial instruments. The Corporation’s exposure to credit loss from nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual amount of these instruments. The Corporation uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. The Corporation may require collateral or other security to support financial instruments with off-balance sheet credit risk. Financial instruments whose contract amounts represent credit risk are as follows at December 31, 2018 and 2017 : (In Thousands) 2018 2017 Commitments to extend credit $ 166,417 $ 264,982 Standby letters of credit 10,566 10,406 Credit exposure from the sale of assets with recourse 6,152 4,893 Commitments to extend credit are legally binding agreements to lend to customers. Commitments generally have fixed expiration dates or other termination clauses and may require payment of fees. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future liquidity requirements. The Corporation evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Corporation, on an extension of credit is based on management’s credit assessment of the counterparty. Standby letters of credit represent conditional commitments issued by the Corporation to guarantee the performance of a customer to a third party. These instruments are issued primarily to support bid or performance related contracts. The coverage period for these instruments is typically a one year period with an annual renewal option subject to prior approval by management. Fees earned from the issuance of these letters are recognized upon expiration of the coverage period. For secured letters of credit, the collateral is typically Bank deposit instruments or customer business assets. |
CAPITAL REQUIREMENTS
CAPITAL REQUIREMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Banking and Thrift [Abstract] | |
CAPITAL REQUIREMENTS | CAPITAL REQUIREMENTS Federal regulations require the Corporation and the Banks to maintain minimum amounts of capital. Specifically, each is required to maintain certain minimum dollar amounts and ratios of Common Equity Tier 1, Total, and Tier 1 capital to risk-weighted assets and of Tier 1 capital to average total assets. In addition to the capital requirements, the Federal Deposit Insurance Corporation Improvement Act (“FDICIA”) established five capital categories ranging from “well capitalized” to “critically undercapitalized.” Should any institution fail to meet the requirements to be considered “adequately capitalized,” it would become subject to a series of increasingly restrictive regulatory actions. As of December 31, 2018 and 2017 , the FDIC categorized the Banks as well capitalized under the regulatory framework for prompt corrective action. To be classified as a well capitalized financial institution, common equity tier I risk-based, tier I risked-based, total risk-based, and tier I leverage capital ratios must be at least 6.5% , 8% , 10% , and 5% , respectively. . The Corporation’s and the Banks' actual capital ratios (using the definitions from the prompt corrective action rules) are presented in the following tables, which shows that the Corporation and both Banks met all regulatory capital requirements. Consolidated Corporation 2018 2017 (In Thousands) Amount Ratio Amount Ratio Common Equity Tier I Capital (to Risk-weighted Assets) Actual $ 132,543 10.178 % $ 125,513 11.254 % For Capital Adequacy Purposes 58,601 4.500 % 50,187 4.500 % Minimum To Maintain Capital Conservation Buffer 83,018 6.375 % 64,128 5.750 % To Be Well Capitalized 84,646 6.500 % 72,493 6.500 % Total Capital (to Risk-weighted Assets) Actual $ 142,876 10.972 % $ 132,094 11.844 % For Capital Adequacy Purposes 104,175 8.000 % 89,223 8.000 % Minimum To Maintain Capital Conservation Buffer 128,591 9.875 % 103,164 9.250 % To Be Well Capitalized 130,219 10.000 % 111,528 10.000 % Tier I Capital (to Risk-weighted Assets) Actual $ 132,543 10.178 % $ 125,513 11.254 % For Capital Adequacy Purposes 78,135 6.000 % 66,916 6.000 % Minimum To Maintain Capital Conservation Buffer 102,552 7.875 % 80,857 7.250 % To Be Well Capitalized 104,180 8.000 % 89,222 8.000 % Tier I Capital (to Average Assets) Actual $ 132,543 8.176 % $ 125,513 8.766 % For Capital Adequacy Purposes 64,845 4.000 % 57,273 4.000 % To Be Well Capitalized 81,056 5.000 % 71,591 5.000 % Jersey Shore State Bank 2018 2017 (In Thousands) Amount Ratio Amount Ratio Common Equity Tier I Capital (to Risk-weighted Assets) Actual $ 94,105 9.879 % $ 88,289 10.120 % For Capital Adequacy Purposes 42,866 4.500 % 39,259 4.500 % Minimum To Maintain Capital Conservation Buffer 60,727 6.375 % 50,164 5.750 % To Be Well Capitalized 61,917 6.500 % 56,707 6.500 % Total Capital (to Risk-weighted Assets) Actual $ 102,534 10.764 % $ 93,145 10.677 % For Capital Adequacy Purposes 76,205 8.000 % 69,791 8.000 % Minimum To Maintain Capital Conservation Buffer 94,066 9.875 % 80,696 9.250 % To Be Well Capitalized 95,256 10.000 % 87,239 10.000 % Tier I Capital (to Risk-weighted Assets) Actual $ 94,105 9.879 % $ 88,289 10.120 % For Capital Adequacy Purposes 57,155 6.000 % 52,345 6.000 % Minimum To Maintain Capital Conservation Buffer 75,015 7.875 % 63,251 7.250 % To Be Well Capitalized 76,206 8.000 % 69,794 8.000 % Tier I Capital (to Average Assets) Actual $ 94,105 7.724 % $ 88,289 8.235 % For Capital Adequacy Purposes 48,734 4.000 % 42,885 4.000 % To Be Well Capitalized 60,917 5.000 % 53,606 5.000 % Luzerne Bank 2018 2017 (In Thousands) Amount Ratio Amount Ratio Common Equity Tier I Capital (to Risk-weighted Assets) Actual $ 35,378 10.061 % $ 31,116 9.731 % For Capital Adequacy Purposes 15,824 4.500 % 14,389 4.500 % Minimum To Maintain Capital Conservation Buffer 22,417 6.375 % 18,386 5.750 % To Be Well Capitalized 22,856 6.500 % 20,785 6.500 % Total Capital (to Risk-weighted Assets) Actual $ 37,283 10.603 % $ 32,533 10.174 % For Capital Adequacy Purposes 28,130 8.000 % 25,581 8.000 % Minimum To Maintain Capital Conservation Buffer 34,723 9.875 % 29,578 9.250 % To Be Well Capitalized 35,163 10.000 % 31,977 10.000 % Tier I Capital (to Risk-weighted Assets) Actual $ 35,378 10.061 % $ 31,116 9.731 % For Capital Adequacy Purposes 21,098 6.000 % 19,186 6.000 % Minimum To Maintain Capital Conservation Buffer 27,691 7.875 % 23,183 7.250 % To Be Well Capitalized 28,131 8.000 % 25,581 8.000 % Tier I Capital (to Average Assets) Actual $ 35,378 8.655 % $ 31,116 8.384 % For Capital Adequacy Purposes 16,350 4.000 % 14,845 4.000 % To Be Well Capitalized 20,438 5.000 % 18,557 5.000 % |
REGULATORY RESTRICTIONS
REGULATORY RESTRICTIONS | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Restrictions on Dividends, Loans and Advances Disclosure [Abstract] | |
REGULATORY RESTRICTIONS | REGULATORY RESTRICTIONS The Pennsylvania Banking Code restricts the availability of capital funds for payment of dividends by all state-chartered banks. Accordingly, at December 31, 2018 , the balance in the additional paid in capital account totaling $11,657,000 for JSSB and $42,214,000 for Luzerne is unavailable for dividends. The Banks are subject to regulatory restrictions, which limit the ability to loan funds to Penns Woods Bancorp, Inc. At December 31, 2018 , the regulatory lending limit amounted to approximately $18,895,000 . Cash and Due from Banks JSSB and Luzerne had no reserve requirements by the district Federal Reserve Bank at December 31, 2018 or 2017 ; however, if they did they would be reported with cash and due from banks. The required reserves are computed by applying prescribed ratios to the classes of average deposit balances. These are held in the form of cash on hand and a balance maintained directly with the Federal Reserve Bank. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The following disclosures show the hierarchal disclosure framework associated with the level of pricing observations utilized in measuring assets and liabilities at fair value. The three broad levels of pricing observations are as follows: Level I: Quoted prices are available in active markets for identical assets or liabilities as of the reported date. Level II: Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities includes items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed. Level III: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. This hierarchy requires the use of observable market data when available. The following table presents the assets reported on the balance sheet at their fair value on a recurring basis as of December 31, 2018 and 2017 , by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. 2018 (In Thousands) Level I Level II Level III Total Assets measured on a recurring basis: Investment securities, available for sale: Mortgage-backed securities $ — $ 6,153 $ — $ 6,153 State and political securities — 79,541 — 79,541 Other debt securities — 48,591 — 48,591 Investment equity securities: Financial institution equity securities 552 — — 552 Other equity securities 1,224 — — 1,224 Investment securities, trading: Other equity securities 36 — — 36 2017 (In Thousands) Level I Level II Level III Total Assets measured on a recurring basis: Investment securities, available for sale: Mortgage-backed securities $ — $ 4,213 $ — $ 4,213 State and political securities — 56,508 — 56,508 Other debt securities — 47,906 — 47,906 Investment equity securities: Financial institution equity securities 1,265 — — 1,265 Other equity securities 1,251 — — 1,251 Investment securities, trading: Other equity securities 190 — — 190 The following table presents the assets reported on the balance sheet at their fair value on a non-recurring basis as of December 31, 2018 and 2017 , by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. 2018 (In Thousands) Level I Level II Level III Total Assets measured on a non-recurring basis: Impaired loans $ — $ — $ 18,704 $ 18,704 Other real estate owned — — 402 402 2017 (In Thousands) Level I Level II Level III Total Assets measured on a non-recurring basis: Impaired loans $ — $ — $ 12,262 $ 12,262 Other real estate owned — — 143 143 The following table provides a listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques as of December 31, 2018 and 2017 : 2018 Quantitative Information About Level III Fair Value Measurements (In Thousands) Fair Value Valuation Technique(s) Unobservable Inputs Range Weighted Average Impaired loans $ 12,929 Discounted cash flow Temporary reduction in payment amount 7% to (70)% (6)% Probability of default —% 5,775 Appraisal of collateral (1) Appraisal adjustments (1) 0 to (90)% (20)% Other real estate owned $ 402 Appraisal of collateral (1) Appraisal adjustments (1) (20)% (20)% 2017 Quantitative Information About Level III Fair Value Measurements (In Thousands) Fair Value Valuation Technique(s) Unobservable Inputs Range Weighted Average Impaired loans $ 6,583 Discounted cash flow Temporary reduction in payment amount 3% to (70)% (4)% Probability of default —% 5,679 Appraisal of collateral (1) Appraisal adjustments (1) 0 to (20)% (17)% Other real estate owned $ 143 Appraisal of collateral (1) Appraisal adjustments (1) (20)% (20)% (1) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The significant unobservable inputs used in the fair value measurement of the Corporation’s impaired loans using the discounted cash flow valuation technique include temporary changes in payment amounts and the probability of default. Significant increases (decreases) in payment amounts would result in significantly higher (lower) fair value measurements. The probability of default is 0% for impaired loans using the discounted cash flow valuation technique because all defaulted impaired loans are valued using the appraisal of collateral valuation technique. The significant unobservable input used in the fair value measurement of the Corporation’s impaired loans using the appraisal of collateral valuation technique include appraisal adjustments, which are adjustments to appraisals by management for qualitative factors such as economic conditions and estimated liquidation expenses. The significant unobservable input used in the fair value measurement of the Corporation’s other real estate owned are the same inputs used to value impaired loans using the appraisal of collateral valuation technique. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The Corporation is required to disclose fair values for its financial instruments. Fair values are made at a specific point in time, based on relevant market information and information about the financial instrument. These fair values do not reflect any premium or discount that could result from offering for sale at one time the Corporation’s entire holdings of a particular financial instrument. Also, it is the Corporation’s general practice and intention to hold most of its financial instruments to maturity and not to engage in trading or sales activities. Because no market exists for a significant portion of the Corporation’s financial instruments, fair values are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These fair values are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions can significantly affect the fair values. Fair values have been determined by the Corporation using historical data and an estimation methodology suitable for each category of financial instruments. The Corporation’s fair values, methods, and assumptions are set forth below for the Corporation’s other financial instruments. As certain assets and liabilities, such as deferred tax assets, premises and equipment, and many other operational elements of the Corporation, are not considered financial instruments but have value, the fair value of financial instruments would not represent the full fair value of the Corporation. The fair values of the Corporation’s financial instruments not required to be measured or reported at fair value are as follows at December 31, 2018 and 2017 : Fair Value Measurements at December 31, 2018 (In Thousands) Carrying Value Fair Value Quoted Prices in Active Markets for Identical Assets (Level I) Significant Other Observable Inputs (Level II) Significant Unobservable Inputs (Level III) Financial assets: Cash and cash equivalents (1) $ 66,742 $ 66,742 $ 66,742 $ — $ — Restricted investment in bank stock 18,862 18,862 18,862 — — Loans held for sale (1) 2,929 2,929 2,929 — — Loans, net 1,370,920 1,381,581 — — 1,381,581 Bank-owned life insurance (1) 28,627 28,627 28,627 — — Accrued interest receivable (1) 5,334 5,334 5,334 — — Financial liabilities: Interest-bearing deposits $ 899,089 $ 882,108 $ 612,478 $ — $ 269,630 Noninterest-bearing deposits (1) 320,814 320,814 320,814 — — Short-term borrowings (1) 167,865 167,865 167,865 — — Long-term borrowings 138,942 137,773 — — 137,773 Accrued interest payable (1) 1,150 1,150 1,150 — — (1) The financial instrument is carried at cost at December 31, 2018 , which approximate the fair value of the instruments Fair Value Measurements at December 31, 2017 (In Thousands) Carrying Value Fair Value Quoted Prices in Active Markets for Identical Assets (Level I) Significant Other Observable Inputs (Level II) Significant Unobservable Inputs (Level III) Financial assets: Cash and cash equivalents $ 27,243 $ 27,243 $ 27,243 $ — $ — Restricted investment in bank stock 13,332 13,332 13,332 Loans held for sale 1,196 1,196 1,196 — — Loans, net 1,233,756 1,264,584 — — 1,264,584 Bank-owned life insurance 27,982 27,982 27,982 — — Accrued interest receivable 4,321 4,321 4,321 — — Financial liabilities: Interest-bearing deposits $ 843,004 $ 838,441 $ 611,187 $ — $ 227,254 Noninterest-bearing deposits 303,316 303,316 303,316 — — Short-term borrowings 100,748 100,748 100,748 — — Long-term borrowings 70,970 70,280 — — 70,280 Accrued interest payable 502 502 502 — — The methods and assumptions used by the Corporation in estimating fair values of financial instruments at December 31, 2018 is in accordance with ASC Topic 825, Financial Instruments, as amended by ASU 2016-01 which requires public entities to use exit pricing in the calculation of the above tables. Prior period fair value calculations were ran on the assumption of entry pricing and therefore the comparability between the periods above are diminished. Cash and Cash Equivalents, Trading Securities, Loans Held for Sale, Accrued Interest Receivable, Short-term Borrowings, and Accrued Interest Payable: The fair value is equal to the carrying value. Investment Debt Securities and Equity Securities: The fair value of investment securities available for sale and investment equity securities are equal to the available quoted market price. If no quoted market price is available, fair value is determined by using the quoted market price for similar securities. Regulatory stocks’ fair value is equal to the carrying value. Loans: Fair values are determined for portfolios of loans with similar financial characteristics. Loans are segregated by type such as commercial, commercial real estate, residential real estate, construction real estate, and other consumer. Each loan category is further segmented into fixed and adjustable rate interest terms and by performing and nonperforming categories. The fair value of performing loans is calculated by discounting scheduled cash flows through the estimated maturity using market discount rates that reflect the credit and interest rate risk inherent in the loan. The estimate of maturity is based on the Corporation’s historical experience with repayments for each loan classification, modified, as required, by an estimate of the effect of current economic and lending conditions. Fair value for significant nonperforming loans is based on recent external appraisals. If appraisals are not available, estimated cash flows are discounted using a rate commensurate with the risk associated with the estimated cash flows. Assumptions regarding credit risk, cash flows, and discounted rates are judgmentally determined using available market information and specific borrower information. Bank-Owned Life Insurance: The fair value is equal to the cash surrender value of the life insurance policies. Deposits: The fair value of deposits with no stated maturity, such as noninterest-bearing demand deposits, savings, NOW, and money market accounts, is equal to the amount payable on demand as of December 31, 2018 and 2017 . The fair value of certificates of deposit is based on the discounted value of contractual cash flows. The fair values above do not include the benefit that results from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market, commonly referred to as the core deposit intangible. Long Term Borrowings: The fair value of long term borrowings is based on the discounted value of contractual cash flows. Commitments to Extend Credit, Standby Letters of Credit, and Financial Guarantees Written: There is no material difference between the notional amount and the fair value of off-balance sheet items at December 31, 2018 and 2017 . The contractual amounts of unfunded commitments and letters of credit are presented in Note 18. |
PARENT COMPANY ONLY FINANCIAL S
PARENT COMPANY ONLY FINANCIAL STATEMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
PARENT COMPANY ONLY FINANCIAL STATEMENTS | PARENT COMPANY ONLY FINANCIAL STATEMENTS Condensed financial information for Penns Woods Bancorp, Inc. follows: CONDENSED BALANCE SHEET, DECEMBER 31, (In Thousands) 2018 2017 ASSETS: Cash $ 247 $ 132 Investment in subsidiaries: Bank 140,476 131,637 Non-bank 2,694 5,685 Other assets 295 889 Total Assets $ 143,712 $ 138,343 LIABILITIES AND SHAREHOLDERS’ EQUITY: Other liabilities $ 176 $ 149 Shareholders’ equity 143,536 138,194 Total liability and shareholders’ equity $ 143,712 $ 138,343 CONDENSED STATEMENT OF INCOME FOR THE YEARS ENDED DECEMBER 31, (In Thousands) 2018 2017 2016 Operating income: Dividends from subsidiaries $ 9,091 $ 11,352 $ 10,007 Equity in undistributed earnings of subsidiaries 6,973 (908 ) 3,128 Operating expenses (1,360 ) (671 ) (660 ) Net income $ 14,704 $ 9,773 $ 12,475 Comprehensive income $ 13,579 $ 10,545 $ 11,346 CONDENSED STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, (In Thousands) 2018 2017 2016 OPERATING ACTIVITIES: Net income $ 14,704 $ 9,773 $ 12,475 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed earnings of subsidiaries (6,973 ) 908 (3,128 ) Other, net 620 (525 ) 344 Net cash provided by operating activities 8,351 10,156 9,691 FINANCING ACTIVITIES: Dividends paid (8,818 ) (8,837 ) (8,903 ) Issuance of common stock 582 116 101 Purchase of treasury stock — (1,881 ) (574 ) Net cash used for financing activities (8,236 ) (10,602 ) (9,376 ) NET INCREASE (DECREASE) IN CASH 115 (446 ) 315 CASH, BEGINNING OF YEAR 132 578 263 CASH, END OF YEAR $ 247 $ 132 $ 578 |
CONSOLIDATED QUARTERLY FINANCIA
CONSOLIDATED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
CONSOLIDATED QUARTERLY FINANCIAL DATA (UNAUDITED) | CONSOLIDATED QUARTERLY FINANCIAL DATA (UNAUDITED) (In Thousands, Except Per Share Data) For the Three Months Ended 2018 March 31, June 30, Sept. 30, Dec. 31, Interest income $ 13,201 $ 14,111 $ 15,198 $ 16,236 Interest expense 2,048 2,408 2,943 3,537 Net interest income 11,153 11,703 12,255 12,699 Provision for loan losses 160 335 480 760 Non-interest income, excluding securities gains 2,121 2,347 2,613 2,594 Securities gains (losses), net (40 ) 15 (24 ) (165 ) Non-interest expense 9,277 9,517 9,681 9,532 Income before income tax provision 3,797 4,213 4,683 4,836 Income tax provision 589 733 857 640 Consolidated net income $ 3,208 $ 3,480 $ 3,826 $ 4,196 Earnings per share - basic $ 0.68 $ 0.74 $ 0.82 $ 0.89 Earnings per share - diluted $ 0.68 $ 0.74 $ 0.82 $ 0.89 (In Thousands, Except Per Share Data) For the Three Months Ended 2017 March 31, June 30, Sept. 30, Dec. 31, Interest income $ 11,682 $ 12,209 $ 12,948 $ 13,138 Interest expense 1,346 1,385 1,496 1,670 Net interest income 10,336 10,824 11,452 11,468 Provision for loan losses 330 215 60 125 Non-interest income, excluding securities gains 2,452 2,775 2,442 2,483 Securities gains, net 199 (12 ) 298 107 Non-interest expense 8,985 9,063 9,566 9,248 Income before income tax provision 3,672 4,309 4,566 4,685 Income tax provision 986 1,223 1,282 3,968 Consolidated net income $ 2,686 $ 3,086 $ 3,284 $ 717 Earnings per share - basic $ 0.57 $ 0.65 $ 0.70 $ 0.16 Earnings per share - diluted $ 0.56 $ 0.65 $ 0.70 $ 0.15 |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition On January 1, 2018, the Corporation adopted ASU No. 2014-09 “Revenue from Contracts with Customers” (Topic 606) and all subsequent ASUs that modified Topic 606 using the modified retrospective method, and applied the guidance to all contracts in scope that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts were not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. The core principle of Topic 606, Revenue from Contracts with Customers , is that an entity recognize revenue at an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to a customer. Topic 606 requires entities to exercise more judgment when considering the terms of a contract than under Topic 605, Revenue Recognition . Topic 606 applies to all contracts with customers to provide goods or services in the ordinary course of business, except for contracts that are specifically excluded from its scope. Topic 606 does not apply to revenue associated with interest income on financial instruments, including loans and securities. Additionally, certain noninterest income streams such as certain credit and debit card fees, income from bank owned life insurance, and gain and losses on sales of investment securities are out of scope of Topic 606. Topic 606 is applicable to noninterest revenue streams such as service charges on deposit accounts, merchant income, wire transfer income, check cashing fees, check printing fees, safe deposit box rental fees, life insurance and brokerage commissions. These revenue streams are largely transactional based and revenue is recognized upon completion of transaction. Principal versus Agent Considerations When more than one party is involved in providing goods or services to a customer, Topic 606 requires the Corporation to determine whether it is the principal or an agent in these transactions by evaluating the nature of its promise to the customer. An entity is a principal and therefore records revenue on a gross basis if it controls a promised good or service before transferring that good or service to the customer. An entity is an agent and records as revenue the net amount it retains for its agency services if its role is to arrange for another entity to provide the goods or services. The Corporation most commonly acts as a principal and records revenue on a gross basis, except in certain circumstances. As an example, revenues earned from interchange fees, in which the Corporation acts as an agent, are recorded as non-interest income, net of the related expenses paid to the principal. Brokerage and insurance commissions are recognized when The M Group's services to the broker dealer and investment representative are complete. Debit Card Fees Interchange fees are one source of debit and credit card income that is comprised of an amount merchants pay card-issuing banks for the processing of their electronic transactions as a form of payment. ATM service charges, check card usage, and POS debit card transactions generate interchange and debit card income. Per Topic 606 interchange and debit card transaction fees are reported net of related network costs. See Note 1 - Recent Accounting Pronouncements. Prior to the adoption of Topic 606, non-interest expense included network costs. Interchange and debit card transaction fees at December 31, 2018 are reported on a net basis of $1,534,000 ; for the corresponding periods of 2017 and 2016 such amounts were $1,312,000 and $1,327,000 , respectively. The below table compares gross interchange and debit card transaction fees net network costs for 2018, 2017 and 2016: (In Thousands) 2018 2017 2016 Debit card transaction fees $ 2,117 $ 1,960 $ 1,896 Other processing service fees 275 263 314 Gross interchange and card based transaction fees 2,392 2,223 2,210 Network costs 858 911 883 Net interchange and card based transaction fees $ 1,534 $ 1,312 $ 1,327 |
OPERATIONS AND SUMMARY OF SIG_2
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Penns Woods Bancorp, Inc. and its wholly owned subsidiaries, Jersey Shore State Bank (“JSSB”), Luzerne Bank ("Luzerne" and collectively with JSSB , the "Banks"), Woods Real Estate Development Co., Inc., Woods Investment Company, Inc., The M Group Inc. D/B/A The Comprehensive Financial Group (“The M Group”), a wholly owned subsidiary of JSSB and an eighty percent owned subsidiary, United Solutions, LLC, (collectively, the “Corporation”). All significant intercompany balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent 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 may differ from those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, valuation of net deferred tax assets, impairment of goodwill, other than temporary impairment of debt and equity securities, fair value of financial instruments, and the valuation of real estate acquired through, or in lieu of, foreclosure on settlement of debt. |
Cash and Cash Equivalents, Restrictions on Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand and in banks and federal funds sold. Interest-earning deposits mature within 90 days and are carried at cost. Net cash flows are reported for loan, deposit, and short-term borrowing transactions. Restrictions on Cash and Cash Equivalents Based on deposit levels, the Banks must maintain cash and other reserves with the Federal Reserve Bank of Philadelphia ("FRB"). |
Investment Securities | Investment Securities Investment securities are classified at the time of purchase, based on management’s intention and ability, as securities held to maturity, securities available for sale, or securities held for trading. Debt securities acquired with the intent and ability to hold to maturity are stated at cost, adjusted for amortization of premium and accretion of discount, which are computed using the interest method and recognized as adjustments of interest income. Certain other debt securities have been classified as available for sale to serve principally as a source of liquidity. Unrealized holding gains and losses for available for sale securities are reported as a separate component of shareholders’ equity, net of tax, until realized. Equity securities are carried at fair value. Unrealized holding gains and losses for equity securities are recognized as a separate component within the income statement. Realized security gains and losses are computed using the specific identification method for debt securities and the average cost method for marketable equity securities. Interest and dividends on investment securities are recognized as income when earned. Securities are periodically reviewed for other-than-temporary impairment based upon a number of factors, including, but not limited to, the length of time and extent to which the fair value has been less than cost, the financial condition of the underlying issuer, the ability of the issuer to meet contractual obligations, the likelihood of the security’s ability to recover any decline in its fair value, whether it is more likely than not that the Corporation would be required to sell the security before its anticipated recovery in fair value, and a review of the Corporation’s capital adequacy, interest rate risk position, and liquidity. The assessment of a security’s ability to recover any decline in fair value, the ability of the issuer to meet contractual obligations, and management’s intent and ability requires considerable judgment. A decline in value that is considered to be other-than-temporary is recorded as a loss within non-interest income in the Consolidated Statement of Income. Fair values of investment securities are based on observed market prices. Certain investment securities do not have observed bid prices and their fair value is based on instruments with similar risk elements. Since regulatory stock is redeemable at par, the Corporation carries it at cost. |
Loans | Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff generally are stated at the principal amount outstanding, net of deferred fees and discounts, unamortized loan fees and costs, and the allowance for loan losses. Interest on loans is recognized as income when earned on the accrual method. The Corporation’s general policy has been to stop accruing interest on loans when it is determined a reasonable doubt exists as to the collectability of additional interest. Income is subsequently recognized only to the extent that cash payments are received provided the loan is not delinquent in payment and, in management’s judgment, the borrower has the ability and intent to make future principal payments. Otherwise, payments are applied to the unpaid principal balance of the loan. Loans are restored to accrual status if certain conditions are met, including but not limited to, the repayment of all unpaid interest and scheduled principal due, ongoing performance consistent with the contractual agreement, and the future expectation of continued, timely payments. Loan origination and commitment fees as well as certain direct loan origination costs are being deferred and amortized as an adjustment to the related loan’s yield over the contractual lives of the related loans. |
Allowance for Loan Losses | Allowance for Loan Losses The allowance for loan losses represents the amount which management estimates is adequate to provide for probable losses inherent in its loan portfolio as of the Consolidated Balance Sheet date. The allowance method is used in providing for loan losses. Accordingly, all loan losses are charged to the allowance and all recoveries are credited to it. The allowance for loan losses is established through a provision for loan losses charged to operations. The provision for loan losses is based upon management’s quarterly review of the loan portfolio. The purpose of the review is to assess loan quality, identify impaired loans, analyze delinquencies, ascertain loan growth, evaluate potential charge-offs and recoveries, and assess general economic conditions in the markets served. An external independent loan review is also performed annually for the Bank. Management remains committed to an aggressive program of problem loan identification and resolution. The allowance is calculated by applying loss factors to outstanding loans by type, excluding loans for which a specific allowance has been determined. Loss factors are based on management’s consideration of the nature of the portfolio segments, changes in mix and volume of the loan portfolio, historical loan loss experience, and general economic conditions. In addition, management considers industry standards and trends with respect to nonperforming loans and its knowledge and experience with specific lending segments. Although management believes that it uses the best information available to make such determinations and that the allowance for loan losses is adequate at December 31, 2018, future adjustments could be necessary if circumstances or economic conditions differ substantially from the assumptions used in making the initial determinations. A downturn in the local economy, rising unemployment, or negative performance trends in financial information from borrowers could be indicators of subsequent increased levels of nonperforming assets and possible charge-offs, which would normally require increased loan loss provisions. An integral part of the periodic regulatory examination process is the review of the adequacy of the Banks' loan loss allowance. The regulatory agencies could require the Banks, based on their evaluation of information available at the time of their examination, to provide additional loan loss provisions to further supplement the allowance. Impaired loans are commercial and commercial real estate loans for which it is probable the Banks will not be able to collect all amounts due according to the contractual terms of the loan agreement. The Banks individually evaluate such loans for impairment and do not aggregate loans by major risk classifications. The definition of “impaired loans” is not the same as the definition of “nonaccrual loans,” although the two categories overlap. The Banks may choose to place a loan on nonaccrual status due to payment delinquency or uncertain collectability, while not classifying the loan as impaired if the loan is not a commercial or commercial real estate loan. Factors considered by management in determining impairment include payment status and collateral value. The amount of impairment for these types of loans is determined by the difference between the present value of the expected cash flows related to the loan, using the original interest rate, and its recorded value, or as a practical expedient in the case of collateralized loans, the difference between the fair value of the collateral and the recorded amount of the loans. When foreclosure is probable, impairment is measured based on the fair value of the collateral. Mortgage loans on one-to-four family properties and all consumer loans are large groups of smaller-balance homogeneous loans and are measured for impairment collectively. Loans that experience insignificant payment delays, which are defined as 90 days or less, generally are not classified as impaired. Management determines the significance of payment delays on a case-by-case basis taking into consideration all circumstances surrounding the loan and the borrower including the length of the delay, the borrower’s prior payment record, and the amount of shortfall in relation to the principal and interest owed. |
Loan Charge-off Policies | Loan Charge-off Policies Loans are generally fully or partially charged down to the fair value of collateral securing the asset when: • management judges the asset to be uncollectible; • repayment is deemed to be protracted beyond reasonable time frames; • the asset has been classified as a loss by either the internal loan review process or external examiners; • the borrower has filed bankruptcy and the loss becomes evident due to a lack of assets; or • the loan is 180 days past due unless both well secured and in the process of collection. |
Troubled Debt Restructurings | Troubled Debt Restructurings In situations where, for economic or legal reasons related to a borrower’s financial difficulties, management may grant a concession for other than an insignificant period of time to the borrower that would not otherwise be considered, the related loan is classified as a troubled debt restructuring ("TDR"). Management strives to identify borrowers in financial difficulty early and work with them to modify to more affordable terms before their loan reaches nonaccrual status. These modified terms may include rate reductions, principal forgiveness, payment forbearance, and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. In cases where borrowers are granted new terms that provide for a reduction of either interest or principal, management measures any impairment on the restructuring as noted above for impaired loans. In addition to the allowance for the pooled portfolios, management has developed a separate allowance for loans that are identified as impaired through a TDR. These loans are excluded from pooled loss forecasts and a separate reserve is provided under the accounting guidance for loan impairment. Consumer loans whose terms have been modified in a TDR are also individually analyzed for estimated impairment. |
Loans Held for Sale | Loans Held for Sale In general, fixed rate residential mortgage loans originated by the Banks are held for sale and are carried at cost due to their short holding period, which can range from less than two weeks to a maximum of thirty days. Sold loans are not serviced by the Banks. Proceeds from the sale of loans in excess of the carrying value are accounted for as a gain. Total gains on the sale of loans are shown as a component of non-interest income within the Consolidated Statement of Income. |
Foreclosed Assets | Foreclosed Assets Foreclosed assets are carried at the lower of cost or fair value less estimated selling costs. Prior to foreclosure, the value of the underlying loan is written down to the fair value of the real estate to be acquired by a charge to the allowance for loan losses, if necessary. Any subsequent write-downs are charged against operating expenses. Net operating expenses and gains and losses realized from disposition are included in non-interest expense and income, respectively, within the Consolidated Statement of Income. |
Premises and Equipment | Premises and Equipment Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed using straight-line and accelerated methods over the estimated useful lives of the related assets, which range from five to ten years for furniture, fixtures, and equipment and fifteen to forty years for buildings and improvements. Costs incurred for routine maintenance and repairs are charged to operations as incurred. Costs of major additions and improvements are capitalized. |
Bank-Owned Life Insurance | Bank-Owned Life Insurance The Corporation has purchased life insurance policies on certain officers and directors. Bank-owned life insurance is recorded at its cash surrender value, or the amount that can be realized. Increases in the cash surrender value are recognized as a component of non-interest income within the Consolidated Statement of Income. |
Goodwill | Goodwill The Corporation performs an annual impairment analysis of goodwill for its purchased subsidiaries, Luzerne and The M Group. |
Intangible Assets | Intangible Assets At December 31, 2018 , the Corporation had intangible assets of $443,000 as a result of the acquisition of Luzerne National Bank Corporation, which is net of accumulated amortization of $1,571,000 . These intangible assets will continue to be amortized using the sum-of-the-years digits method of amortization over ten years. The Corporation also had intangible assets of $719,000 , which is net of accumulated amortization of $301,000 , as a result of the purchase of two books of business related to investment product sales. The book of business intangible is being amortized using the straight-line method over a period of ten years. |
Investments in Limited Partnerships | Investments in Limited Partnerships The Corporation is a limited partner in three partnerships at December 31, 2018 that provide low income elderly housing in the Corporation’s geographic market area. The carrying value of the Corporation’s investments in limited partnerships was $218,000 at December 31, 2018 and $402,000 at December 31, 2017 . The investments are being amortized over the ten -year tax credit receipt period utilizing the straight-line method. The partnerships are amortized once the projects reach the level of occupancy needed to begin the ten year tax credit recognition period. |
Off-Balance Sheet Financial Instruments | Off-Balance Sheet Financial Instruments In the ordinary course of business, the Corporation enters into off-balance sheet financial instruments. Those instruments consist of commitments to extend credit and standby letters of credit. When those instruments are funded or become payable, the Corporation reports the amounts in its financial statements. |
Marketing Cost | Marketing Cost Marketing costs are generally expensed as incurred. |
Income Taxes | Income Taxes The Corporation prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. Deferred tax assets and liabilities result from temporary differences in financial and income tax methods of accounting, and are reflected at currently enacted income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. The Corporation analyzed its deferred tax asset position and determined that there was not a need for a valuation allowance due to the Corporation’s ability to generate future ordinary and capital taxable income. On December 22, 2017 the Tax Cut and Jobs Act was signed into law. ASC 740 (Income Taxes) requires the recognition of the effect of changes in tax laws or rates in the period in which the legislation is enacted. The changes in the deferred tax assets and liabilities remeasured at the new 21% federal tax rate are reflected in income tax expense for fiscal year 2017. The Corporation when applicable recognizes interest and penalties on income taxes as a component of income tax provision. |
Earnings Per Share | Earnings Per Share The Corporation provides dual presentation of basic and diluted earnings per share. Basic earnings per share is calculated utilizing net income as reported in the numerator and weighted average shares outstanding in the denominator. The computation of diluted earnings per share differs in that the dilutive effects of any stock options are adjusted in the denominator. |
Employee Benefits | Employee Benefits Pension and employee benefits include contributions, determined actuarially, to a defined benefit retirement plan covering the eligible employees of JSSB. The plan is funded on a current basis to the extent that it is deductible under existing federal tax regulations. Pension and other employee benefits also include contributions to a defined contribution Section 401(k) plan covering eligible employees. Contributions matching those made by eligible employees are funded throughout the year. In addition, an elective contribution may be made annually at the discretion of the board of directors for the employees of JSSB with no contributions made since 2015. |
The M Group Products and Income Recognition | The M Group Products and Income Recognition The M Group product line is comprised primarily of annuities, life insurance, and mutual funds. The revenues generated from life insurance sales are commission only, as The M Group does not underwrite the policies. Life insurance sales include permanent and term policies with the majority of the policies written being permanent. Term life insurance policies are written for 10 , 15 , 20 , and 30 year terms with the majority of the policies being written for 20 years. None of these products are offered as an integral part of lending activities. Commissions from the sale of annuities are recognized at the time notice is received from the third party broker/dealer or an insurance company that the transaction has been accepted and approved, which is also the time when commission income is received. Life insurance commissions are recognized at varying points based on the payment option chosen by the customer. Commissions from monthly and annual payment plans are recognized at the start of each annual period for the life insurance, while quarterly and semi-annual premium payments are recognized quarterly and semi-annually when the earnings process is complete. For example, semi-annual payments on the first of January and July would result in commission income recognition on the first of January and July, while payments on the first of January, April, July, and October would result in commission income recognition on those dates. The potential for chargebacks only exists for those policies on a monthly payment plan since income is recognized at the beginning of the annual coverage period versus at the time of each monthly payment. No liability is maintained for chargebacks as these are removed from income at the time of the occurrence. |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The Corporation is required to present accumulated other comprehensive income (loss) in a full set of general-purpose financial statements for all periods presented. Accumulated other comprehensive income (loss) is comprised of unrealized holding gains (losses) on the available for sale securities portfolio and the unrecognized components of net periodic benefit costs of the defined benefit pension plan. |
Segment Reporting | Segment Reporting The Corporation has determined that its only reportable segment is Community Banking. |
Reclassification of Comparative Amounts | Reclassification of Comparative Amounts Certain items previously reported have been reclassified to conform to the current year’s reporting format. Such reclassifications did not affect net income or shareholders’ equity. |
Recent Accounting Pronouncements | Adopted Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (a new revenue recognition standard). The Update’s core principle is that a company will recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, this Update specifies the accounting for certain costs to obtain or fulfill a contract with a customer and expands disclosure requirements for revenue recognition. This Update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Since the guidance scopes out revenue associated with financial instruments, including loans receivable and investment securities, the adoption of the standard and its related amendments did not result in a material change from our current accounting for revenue because the majority of the Corporation's revenue is not within the scope of Topic 606. Upon adoption on January 1, 2018, we have included the related new disclosure requirements in Note 25 . In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . This Update applies to all entities that hold financial assets or owe financial liabilities and is intended to provide more useful information on the recognition, measurement, presentation, and disclosure of financial instruments. Among other things, this Update (a) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (b) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (c) eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities; (d) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (e) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (f) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and (g) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. Upon adoption on January 1, 2018, the Corporation made a one-time cumulative effect adjustment from accumulated other comprehensive income to retained earnings of $537,000 . The net effect was an increase to retained earnings. Additionally, the methods used to calculate the fair value of financial instruments in Note 22 were based on exit pricing assumptions as of December 31, 2018. Recent Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . The standard requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. A short-term lease is defined as one in which (a) the lease term is 12 months or less and (b) there is not an option to purchase the underlying asset that the lessee is reasonably certain to exercise. For short-term leases, lessees may elect to recognize lease payments over the lease term on a straight-line basis. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020. The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. The Corporation is currently assessing the practical expedients it may elect at adoption, but does not anticipate the amendments will have a significant impact on the financial statements. Based on the Corporation’s preliminary analysis of its current portfolio, the impact to the Corporation’s balance sheet is estimated to result in an increase of $10,294,000 in assets and liabilities. The Corporation also anticipates additional disclosures to be provided at adoption. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments , which changes the impairment model for most financial assets. This Update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the Update is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be effected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted for annual and interim periods beginning after December 15, 2018. With certain exceptions, transition to the new requirements will be through a cumulative effect adjustment to opening retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We expect to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, but cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment . To simplify the subsequent measurement of goodwill, the FASB eliminated Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting units fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. A public business entity that is a U.S. Securities and Exchange Commission (SEC) filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. A public business entity that is not an SEC filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2020. All other entities, including not-for-profit entities, that are adopting the amendments in this Update should do so for their annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2021. This Update is not expected to have a significant impact on the Corporation’s financial statements. In February 2017, the FASB issued ASU 2017-06 , Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), and Health and Welfare Benefit Plans (Topic 965) . This Update relates primarily to the reporting by an employee benefit plan for its interest in a master trust, which is a trust for which a regulated financial institution serves as a trustee or custodian and in which assets of more than one plan sponsored by a single employer or by a group of employers under common control are held. For each master trust in which a plan holds an interest, the amendments in this Update require a plan's interest in that master trust and any change in that interest to be presented in separate line items in the statement of net assets available for benefits and in the statement of changes in net assets available for benefits, respectively. The amendments in this Update remove the requirement to disclose the percentage interest in the master trust for plans with divided interests and require that all plans disclose the dollar amount of their interest in each of those general types of investments, which supplements the existing requirement to disclose the master trusts balances in each general type of investments. There are also increased disclosure requirements for investments in master trusts. The amendments in this Update are effective for fiscal years beginning after December 15, 2018. Early adoption is permitte d. This Update is not expected to have a significant impact on the Corporation’s financial statements. In March 2017, the FASB issued ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20). The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments in this Update on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. This Update is not expected to have a significant impact on the Corporation’s financial statements. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), and Derivative and Hedging (Topic 815) . The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down-round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down-round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down-round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down-round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down- round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt-Debt with Conversion and Other Options ), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Accounting Standards Codification, to a scope exception. Those amendments do not have an accounting effect. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part I of this Update should be applied either retrospectively to outstanding financial instruments with a down-round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph is effective or retrospectively to outstanding financial instruments with a down-round feature for each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs 250-10-45-5 through 45-10. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. This Update is not expected to have a significant impact on the Corporation’s financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 850) , the objective of which is to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. In addition, the amendments in this Update make certain targeted improvements to simplify the application and disclosure of the hedge accounting guidance in current general accepted accounting principles. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods beginning after December 15, 2020. Early application is permitted in any period after issuance. For cash flow and net investment hedges existing at the date of adoption, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the amendments in this Update. The amended presentation and disclosure guidance is required only prospectively. This Update is not expected to have a significant impact on the Corporation’s financial statements. In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842) , which provides an optional transition practical expedient to not evaluate under Topic 842 existing or expired land easements that were not previously accounted for as leases under the current lease guidance in Topic 840. An entity that elects this practical expedient should evaluate new or modified land easements under Topic 842 beginning at the date the entity adopts Topic 842; otherwise, an entity should evaluate all existing or expired land easements in connection with the adoption of the new lease requirements in Topic 842 to assess whether they meet the definition of a lease. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements in ASU 2016-02. This Update is not expected to have a significant impact on the Corporation’s financial statements. In July 2018, the FASB issued ASU 2018-09, Codification Improvements , represents changes to clarify, correct errors in, or make minor improvements to the Codification. The amendments make the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. The transition and effective date guidance is based on the facts and circumstances of each amendment. Some of the amendments do not require transition guidance and will be effective upon issuance of this ASU. However, many of the amendments in this ASU do have transition guidance with effective dates for annual periods beginning after December 15, 2018, for public business entities. This Update is not expected to have a significant impact on the Corporation’s financial statements. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases , represents changes to clarify, correct errors in, or make minor improvements to the Codification. The amendments in this ASU affect the amendments in ASU 2016-02, which are not yet effective, but for which early adoption upon issuance is permitted. For entities that early adopted Topic 842, the amendments are effective upon issuance of this ASU, and the transition requirements are the same as those in Topic 842. For entities that have not adopted Topic 842, the effective date and transition requirements will be the same as the effective date and transition requirements in Topic 842. This Update is not expected to have a significant impact on the Corporation’s financial statements. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements . This Update provides another transition method which allows entities to initially apply ASC 842 at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Entities that elect this approach should report comparative periods in accordance with ASC 840, Leases . In addition, this Update provides a practical expedient under which lessors may elect, by class of underlying assets, to not separate nonlease components from the associated lease component, similar to the expedient provided for lessees. However, the lessor practical expedient is limited to circumstances in which the nonlease component or components otherwise would be accounted for under the new revenue guidance and both (a) the timing and pattern of transfer are the same for the nonlease component(s) and associated lease component and (b) the lease component, if accounted for separately, would be classified as an operating lease. If the nonlease component or components associated with the lease component are the predominant component of the combined component, an entity should account for the combined component in accordance with ASC 606, Revenue from Contracts with Customers . Otherwise, the entity should account for the combined component as an operating lease in accordance with ASC 842. If a lessor elects the practical expedient, certain disclosures are required. This Update is effective for public business entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. This Update is not expected to have a significant impact on the Corporation’s financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes the Disclosure Requirements for Fair Value Measurements . The Update removes the requirement to disclose the amount of and reasons for transfers between Level I and Level II of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level III fair value measurements. The Update requires disclosure of changes in unrealized gains and losses for the period included in other comprehensive income (loss) for recurring Level III fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level III fair value measurements. This Update is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. This Update is not expected to have a significant impact on the Corporation’s financial statements. In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits (Topic 715-20). This Update amends ASC 715 to add, remove and clarify disclosure requirements related to defined benefit pension and other postretirement plans. The Update eliminates the requirement to disclose the amounts in accumulated other comprehensive income expected to be recognized as part of net periodic benefit cost over the next year. The Update also removes the disclosure requirements for the effects of a one-percentage-point change on the assumed health care costs and the effect of this change in rates on service cost, interest cost and the benefit obligation for postretirement health care benefits. This Update is effective for public business entities for fiscal years ending after December 15, 2020, and must be applied on a retrospective basis. For all other entities, this Update is effective for fiscal years ending after December 15, 2021. This Update is not expected to have a significant impact on the Corporation’s financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40). This Update addresses customers’ accounting for implementation costs incurred in a cloud computing arrangement that is a service contract and also adds certain disclosure requirements related to implementation costs incurred for internal-use software and cloud computing arrangements. The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This Update is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The amendments in this Update can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. This Update is not expected to have a significant impact on the Corporation’s financial statements. In October 2018, the FASB issued ASU 2018-16 , Derivatives and Hedging (Topic 815) . The amendments in this Update permit use of the Overnight Index Swap (OIS) rate based on the Secured Overnight Financing Rate (SOFR) as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815, in addition to the interest rates on direct Treasury obligations of the U.S. government, the London Interbank Offered Rate (LIBOR) swap rate, the OIS rate based on the Fed Funds Effective Rate, and the Securities Industry and Financial Markets Association (SIFMA) Municipal Swap Rate. For entities that have not already adopted Update 2017-12, the amendments in this Update are required to be adopted concurrently with the amendments in Update 2017-12. For public business entities that already have adopted the amendments in Update 2017-12, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities that already have adopted the amendments in Update 2017-12, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted in any interim period upon issuance of this Update if an entity already has adopted Update 2017-12. This Update is not expected to have a significant impact on the Corporation’s financial statements. In November, 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808) , which made the following targeted improvements to generally accepted accounting principles (GAAP) for collaborative arrangements (1) clarified that certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606 when the collaborative arrangement participant is a customer in the context of a unit of account, (2) add unit-of-account guidance in Topic 808 to align with the guidance in Topic 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of Topic 606, and (3) require that in a transaction with a collaborative arrangement participant that is not directly related to sales to third parties, presenting the transaction together with revenue recognized under Topic 606 is precluded if the collaborative arrangement participant is not a customer. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after Dece mber 15, 2021. This Update is not expected to have a significant impact on the Corporation’s financial statements. In December 2018, the FASB issued ASU 2018-20, Leases (Topic 842), which addressed implementation questions arising from stakeholders in regard to ASU 2016-02, Leases . Specifically addressed in this Update were issues related to 1) sales taxes and other similar taxes collected from lessees, 2) certain lessor costs, and 3) recognition of variable payments for contracts with lease and nonlease components. The amendments in this Update affect the amendments in Update 2016-02, which are not yet effective but can be early adopted. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements in Update 2016-02 (for example, January 1, 2019, for calendar-year-end public business entities). The Corporation is currently evaluating the impact the adoption of the standard will have on the Corporation’s financial position or results of operations. Based on the Corporation’s preliminary analysis of its current portfolio, the impact to the Corporation’s balance sheet is estimated to result in an increase of $10,294,000 in assets and liabilities. The Corporation also anticipates additional disclosures to be provided at adoption. |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive income (loss) by component shown, net of tax and parenthesis indicating debits to net income, as of December 31, 2018 , 2017 , and 2016 were as follows: Twelve Months Ended Twelve Months Ended Twelve Months Ended (In Thousands) Net Unrealized Gain (Loss) on Available * Defined Benefit Plan* Total* Net Unrealized Gain (Loss) on Available * Defined * Total * Net Unrealized Gain (Loss) on Available * Defined * Total * Beginning balance $ (54 ) $ (4,920 ) $ (4,974 ) $ (639 ) $ (4,289 ) $ (4,928 ) $ 258 $ (4,057 ) $ (3,799 ) Other comprehensive income (loss) before reclassifications (806 ) (486 ) (1,292 ) 990 63 1,053 167 (333 ) (166 ) Amounts reclassified from accumulated other comprehensive (loss) income 37 130 167 (396 ) 115 (281 ) (1,064 ) 101 (963 ) Net current-period other comprehensive income (loss) (769 ) (356 ) (1,125 ) 594 178 772 (897 ) (232 ) (1,129 ) Reclassification of certain income tax effects from accumulated other comprehensive loss — — — (9 ) (809 ) (818 ) — — — Reclassification from adoption of 2016-01 (537 ) — (537 ) — — — — — — Ending balance $ (1,360 ) $ (5,276 ) $ (6,636 ) $ (54 ) $ (4,920 ) $ (4,974 ) $ (639 ) $ (4,289 ) $ (4,928 ) * Amounts net of 34% tax rate for 2016 and 21% for 2018 and 2017 |
Schedule of Reclassification Out of Accumulated Other Comprehensive Income | The reclassifications out of accumulated other comprehensive income shown, net of tax and parenthesis indicating debits to net income, as of December 31, 2018 , 2017 , and 2016 were as follows: (In Thousands) Amount Reclassified from Accumulated Other Comprehensive Income Details about Accumulated Other Comprehensive Income Components Twelve Months Ended Affected Line Item in the Consolidated Statement of Income December 31, 2018 December 31, 2017 December 31, 2016 Net realized (loss) gain on available for sale securities $ (47 ) $ 600 $ 1,611 Securities gains (losses), net Income tax effect 10 (204 ) (547 ) Income tax provision $ (37 ) $ 396 $ 1,064 Net unrecognized pension income (expense) $ (165 ) $ (174 ) $ (153 ) Salaries and employee benefits Income tax effect 35 59 52 Income tax provision $ (130 ) $ (115 ) $ (101 ) |
PER SHARE DATA (Tables)
PER SHARE DATA (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Common Shares (Denominator) Used in the Basic and Dilutive Earnings Per Share Computation | The following table sets forth the composition of the weighted average common shares (denominator) used in the basic and dilutive per share computation. Year Ended December 31, 2018 2017 2016 Weighted average common shares issued 5,010,404 5,008,073 5,005,971 Average treasury stock shares (320,150 ) (302,471 ) (270,514 ) Weighted average common shares used to calculate basic and diluted earnings per share 4,690,254 4,705,602 4,735,457 |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Amortized Cost, Gross Unrealized Gains and Losses, and Fair Values of Equity and Trading Investment Securities | The amortized cost, gross gains and losses, and fair values of investment securities at December 31, 2018 and 2017 are as follows: 2018 (In Thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available for sale (AFS): Mortgage-backed securities $ 6,385 $ 8 $ (240 ) $ 6,153 State and political securities 79,358 609 (426 ) 79,541 Other debt securities 50,264 17 (1,690 ) 48,591 Total debt securities $ 136,007 $ 634 $ (2,356 ) $ 134,285 Investment equity securities: Financial institution equity securities $ 328 $ 224 $ — $ 552 Other equity securities 1,300 — (76 ) 1,224 Total equity securities $ 1,628 $ 224 $ (76 ) $ 1,776 Trading: Other equity securities $ 49 $ — $ (13 ) $ 36 Trading investment equity securities $ 49 $ — $ (13 ) $ 36 2017 (In Thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available for sale (AFS): Mortgage-backed securities $ 4,273 $ 51 $ (111 ) $ 4,213 State and political securities 56,295 411 (198 ) 56,508 Other debt securities 48,806 180 (1,080 ) 47,906 Total debt securities $ 109,374 $ 642 $ (1,389 ) $ 108,627 Investment equity securities: Financial institution equity securities $ 537 $ 728 $ — $ 1,265 Other equity securities 1,300 — (49 ) 1,251 Total equity securities $ 1,837 $ 728 $ (49 ) $ 2,516 Trading: Financial institution equity securities $ 20 $ — $ — $ 20 Other equity securities 192 2 (24 ) 170 Trading investment equity securities $ 212 $ 2 $ (24 ) $ 190 |
Schedule of Gross Unrealized Losses and Fair Value | The following tables show the Corporation’s gross unrealized losses and fair value, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, at December 31, 2018 and 2017 . 2018 Less than Twelve Months Twelve Months or Greater Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized (In Thousands) Value Losses Value Losses Value Losses Available for Sale (AFS) Mortgage-backed securities $ 3,023 $ (75 ) $ 2,930 $ (165 ) $ 5,953 $ (240 ) State and political securities 14,819 (128 ) 13,648 (298 ) 28,467 (426 ) Other debt securities 10,133 (153 ) 34,776 (1,537 ) 44,909 (1,690 ) Total Debt Securities AFS $ 27,975 $ (356 ) $ 51,354 $ (2,000 ) $ 79,329 $ (2,356 ) 2017 Less than Twelve Months Twelve Months or Greater Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized (In Thousands) Value Losses Value Losses Value Losses Available for Sale (AFS) Mortgage-backed securities $ 981 $ (12 ) $ 2,276 $ (99 ) $ 3,257 $ (111 ) State and political securities 15,691 (104 ) 3,018 (94 ) 18,709 (198 ) Other debt securities 7,512 (148 ) 28,517 (932 ) 36,029 (1,080 ) Total Debt Securities AFS $ 24,184 $ (264 ) $ 33,811 $ (1,125 ) $ 57,995 $ (1,389 ) |
Schedule of Amortized Cost and Fair Value of Debt Securities by Contractual Maturity | The amortized cost and fair value of debt securities at December 31, 2018 , by contractual maturity, are shown below. Expected maturities may differ from contractual maturities since borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. (In Thousands) Amortized Cost Fair Value Due in one year or less $ 3,135 $ 3,134 Due after one year to five years 41,923 40,883 Due after five years to ten years 69,978 69,316 Due after ten years 20,971 20,952 Total $ 136,007 $ 134,285 |
Schedule of Gross Realized Gains and Losses | The following table represents gross realized gains and losses on those transactions: Year Ended December 31, (In Thousands) 2018 2017 2016 Gross realized gains: U.S. Government and agency securities $ — $ — $ 11 Mortgage-backed securities 27 69 35 State and political securities 19 408 787 Other debt securities 3 53 283 Total gross realized gains $ 49 $ 530 $ 1,116 Gross realized losses: U.S. Government and agency securities $ — $ — $ 5 Asset-backed securities — — 13 State and political securities 86 18 1 Other debt securities 10 51 189 Total gross realized losses $ 96 $ 69 $ 208 Gross realized gains: Financial institution equity securities — 288 572 Other equity securities — — 217 Total gross realized gains $ — $ 288 $ 789 Gross realized losses: Financial institution equity securities — — — Other equity securities — 149 86 Total gross realized losses $ — $ 149 $ 86 |
Schedule of Unrealized and Realized Gains and Losses Recognized in Net Income | The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during the year ended December 31, 2018: (In Thousands) 2018 Net losses recognized in equity securities during the period $ (170 ) Less: Net gains realized on the sale of equity securities during the period 361 Unrealized losses recognized in equity securities held at reporting date $ (531 ) Net gains and losses on trading account securities are as follows for the for the years ended December 31, 2018 , 2017 , and 2016 . (In Thousands) 2018 2017 2016 Net (losses) gain on sales transaction $ (6 ) $ 16 $ 51 Net mark-to-market gains (losses) 9 (24 ) 7 Net gain (loss) on trading account securities $ 3 $ (8 ) $ 58 |
LOAN CREDIT QUALITY AND RELAT_2
LOAN CREDIT QUALITY AND RELATED ALLOWANCE FOR LOAN LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Schedule of related aging categories of loans by segment | The following table presents the related aging categories of loans, by segment, as of December 31, 2018 and 2017 : 2018 (In Thousands) Current Past Due 30 To 89 Days Past Due 90 & Still Accruing Non-Accrual Total Commercial, financial, and agricultural $ 182,651 $ 616 $ — $ 5,294 $ 188,561 Real estate mortgage: Residential 611,281 7,688 1,238 2,172 622,379 Commercial 361,624 2,349 — 7,722 371,695 Construction 43,144 305 — 74 43,523 Consumer automobile loans 132,713 412 27 31 133,183 Other consumer installment loans 23,902 636 9 5 24,552 1,355,315 $ 12,006 $ 1,274 $ 15,298 1,383,893 Net deferred loan fees and discounts 864 864 Allowance for loan losses (13,837 ) (13,837 ) Loans, net $ 1,342,342 $ 1,370,920 2017 (In Thousands) Current Past Due 30 To 89 Days Past Due 90 & Still Accruing Non-Accrual Total Commercial, financial, and agricultural $ 178,022 $ 663 $ 86 $ 114 $ 178,885 Real estate mortgage: Residential 588,278 6,853 318 1,628 597,077 Commercial 325,148 1,823 80 4,968 332,019 Construction 31,547 116 20 — 31,683 Consumer automobile loans 79,595 87 — 32 79,714 Other consumer installment loans 26,740 202 5 17 26,964 1,229,330 $ 9,744 $ 509 $ 6,759 1,246,342 Net deferred loan fees and discounts 272 272 Allowance for loan losses (12,858 ) (12,858 ) Loans, net $ 1,216,744 $ 1,233,756 |
Schedule of interest income if interest had been recorded based on the original loan agreement terms and rate of interest for non-accrual loans and interest income recognized on a cash basis for non-accrual loans | The following table presents the interest income if interest had been recorded based on the original loan agreement terms and rate of interest for non-accrual loans and interest income recognized on a cash basis for non-accrual loans as of December 31, 2018 , 2017 , and 2016 : Year Ended December 31, 2018 2017 2016 (In Thousands) Interest Income That Would Have Been Recorded Based on Original Term and Rate Interest Income Recorded on a Cash Basis Interest Income That Would Have Been Recorded Based on Original Term and Rate Interest Income Recorded on a Cash Basis Interest Income That Would Have Been Recorded Based on Original Term and Rate Interest Income Recorded on a Cash Basis Commercial, financial, and agricultural $ 289 $ 235 $ 23 $ 15 $ 6 $ — Real estate mortgage: Residential 123 88 147 98 151 101 Commercial 405 212 390 238 496 105 Construction 5 4 — — — — Consumer automobile loans 7 5 1 — — — Other consumer installment loans 1 1 4 3 3 2 $ 830 $ 545 $ 565 $ 354 $ 656 $ 208 |
Schedule of recorded investment, unpaid principal balance, and related allowance of impaired loans by segment | The following table presents the recorded investment, unpaid principal balance, and related allowance of impaired loans by segment as of December 31, 2018 and 2017 : 2018 (In Thousands) Recorded Investment Unpaid Principal Balance Related Allowance With no related allowance recorded: Commercial, financial, and agricultural $ 1,152 $ 1,152 $ — Real estate mortgage: Residential 2,619 2,619 — Commercial 2,457 2,457 — Construction 74 74 — Consumer automobile loans 31 31 — Other consumer installment loans — — — 6,333 6,333 — With an allowance recorded: Commercial, financial, and agricultural 4,111 4,111 650 Real estate mortgage: Residential 1,591 1,591 168 Commercial 9,207 9,207 1,720 Construction — — — Consumer automobile loans — — — Other consumer installment loans 5 5 5 14,914 14,914 2,543 Total: Commercial, financial, and agricultural 5,263 5,263 650 Real estate mortgage: Residential 4,210 4,210 168 Commercial 11,664 11,664 1,720 Construction 74 74 — Consumer automobile loans 31 31 — Other consumer installment loans 5 5 5 $ 21,247 $ 21,247 $ 2,543 2017 (In Thousands) Recorded Investment Unpaid Principal Balance Related Allowance With no related allowance recorded: Commercial, financial, and agricultural $ 1,033 $ 1,033 $ — Real estate mortgage: Residential 1,428 1,428 — Commercial 1,465 1,465 — Construction — — — Consumer automobile loans — — — Other consumer installment loans — — — 3,926 3,926 — With an allowance recorded: Commercial, financial, and agricultural 235 235 96 Real estate mortgage: Residential 2,304 2,353 367 Commercial 7,981 8,031 1,721 Construction — — — Consumer automobile loans — — — Other consumer installment loans — — — 10,520 10,619 2,184 Total: Commercial, financial, and agricultural 1,268 1,268 96 Real estate mortgage: Residential 3,732 3,781 367 Commercial 9,446 9,496 1,721 Construction — — — Consumer automobile loans — — — Other consumer installment loans — — — $ 14,446 $ 14,545 $ 2,184 |
Schedule of average recorded investment in impaired loans and related interest income recognized | The following table presents the average recorded investment in impaired loans and related interest income recognized for December 31, 2018 , 2017 , and 2016 : 2018 (In Thousands) Average Investment in Impaired Loans Interest Income Recognized on an Accrual Basis on Impaired Loans Interest Income Recognized on a Cash Basis on Impaired Loans Commercial, financial, and agricultural $ 2,018 $ 71 $ 168 Real estate mortgage: Residential 3,962 134 87 Commercial 9,524 235 194 Construction 15 — 4 Consumer automobile loans 14 — 1 Other consumer installment loans 1 — 1 $ 15,534 $ 440 $ 455 2017 (In Thousands) Average Investment in Impaired Loans Interest Income Recognized on an Accrual Basis on Impaired Loans Interest Income Recognized on a Cash Basis on Impaired Loans Commercial, financial, and agricultural $ 727 $ 41 $ 7 Real estate mortgage: Residential 3,233 75 91 Commercial 11,551 186 233 Construction — — — Consumer automobile loans — — — Other consumer installment loans 5 — 1 $ 15,516 $ 302 $ 332 2016 (In Thousands) Average Investment in Impaired Loans Interest Income Recognized on an Accrual Basis on Impaired Loans Interest Income Recognized on a Cash Basis on Impaired Loans Commercial, financial, and agricultural $ 400 $ 16 $ 1 Real estate mortgage: Residential 3,471 89 101 Commercial 12,887 187 110 Construction 138 — — Consumer automobile loans — — — Other consumer installment loans — — — $ 16,896 $ 292 $ 212 |
Schedule of loan modifications that are considered TDRs | Loan modifications that are considered TDRs completed during the twelve months ended December 31, 2018 and 2017 were as follows: Year Ended December 31, 2018 2017 (In Thousands, Except Number of Contracts) Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Commercial, financial, and agricultural 1 $ 1,027 $ 1,027 — $ — $ — Real estate mortgage: Residential 3 419 419 6 1,015 1,015 Commercial 1 106 106 2 371 371 Construction — — — — — — Other consumer installment loans — — — — — — Total 5 $ 1,552 $ 1,552 8 $ 1,386 $ 1,386 Loan modifications considered troubled debt restructurings made during the twelve months previous to December 31, 2018, that have defaulted during the twelve month period ending December 31, 2018 were as follows: Year Ended December 31, 2018 (In Thousands, Except Number of Contracts) Number of Contracts Recorded Investment Commercial, financial, and agricultural — $ — Real estate mortgage: Residential 1 1 Commercial — — Total 1 $ 1 |
Schedule of credit quality categories | The following table presents the credit quality categories identified above as of December 31, 2018 and 2017 : 2018 Commercial, Finance, and Agricultural Real Estate Mortgages Consumer automobile Other consumer installment (In Thousands) Residential Commercial Construction Totals Pass $ 179,840 $ 619,800 $ 351,703 $ 43,523 $ 133,183 $ 24,552 $ 1,352,601 Special Mention 3,426 694 6,587 — — — 10,707 Substandard 5,295 1,885 13,405 — — — 20,585 Total $ 188,561 $ 622,379 $ 371,695 $ 43,523 $ 133,183 $ 24,552 $ 1,383,893 2017 Commercial, Finance, and Agricultural Real Estate Mortgages Consumer automobile Other consumer installment (In Thousands) Residential Commercial Construction Totals Pass $ 175,603 $ 593,828 $ 311,209 $ 31,535 $ 79,714 $ 26,964 $ 1,218,853 Special Mention 738 1,043 7,337 — — — 9,118 Substandard 2,544 2,206 13,473 148 — — 18,371 Total $ 178,885 $ 597,077 $ 332,019 $ 31,683 $ 79,714 $ 26,964 $ 1,246,342 |
Schedule of activity in the allowance | Activity in the allowance is presented for the twelve months ended December 31, 2018 , 2017 , and 2016 : 2018 Commercial, Finance, and Agricultural Real Estate Mortgages Consumer automobile Other consumer installment (In Thousands) Residential Commercial Construction Unallocated Totals Beginning Balance $ 1,177 $ 5,679 $ 4,277 $ 155 $ 804 $ 271 $ 495 $ 12,858 Charge-offs (82 ) (276 ) (56 ) — (246 ) (303 ) — (963 ) Recoveries 36 74 — 7 16 74 — 207 Provision 549 139 (174 ) (19 ) 754 217 269 1,735 Ending Balance $ 1,680 $ 5,616 $ 4,047 $ 143 $ 1,328 $ 259 $ 764 $ 13,837 2017 Commercial, Finance, and Agricultural Real Estate Mortgages Consumer automobile Other consumer installment (In Thousands) Residential Commercial Construction Unallocated Totals Beginning Balance $ 1,554 $ 5,383 $ 4,975 $ 178 $ 143 $ 273 $ 390 $ 12,896 Charge-offs (106 ) (578 ) (58 ) — (57 ) (246 ) — (1,045 ) Recoveries 135 55 1 9 2 75 — 277 Provision (406 ) 819 (641 ) (32 ) 716 169 105 730 Ending Balance $ 1,177 $ 5,679 $ 4,277 $ 155 $ 804 $ 271 $ 495 $ 12,858 2016 Commercial, Finance, and Agricultural Real Estate Mortgages Consumer automobile Other consumer installment (In Thousands) Residential Commercial Construction Unallocated Totals Beginning Balance $ 1,532 $ 5,116 $ 4,217 $ 160 $ — $ 243 $ 776 $ 12,044 Charge-offs (167 ) (39 ) (93 ) (2 ) — (229 ) — (530 ) Recoveries 62 15 8 9 — 92 — 186 Provision 127 291 843 11 143 167 (386 ) 1,196 Ending Balance $ 1,554 $ 5,383 $ 4,975 $ 178 $ 143 $ 273 $ 390 $ 12,896 |
Schedule of concentration of loan | The Corporation has a concentration of loans at December 31, 2018 and 2017 as follows: 2018 2017 Owners of residential rental properties 14.61 % 15.16 % Owners of commercial rental properties 12.24 % 13.57 % |
Schedule of allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method | The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2018 and 2017 : 2018 Commercial, Finance, and Agricultural Real Estate Mortgages Consumer automobile Other consumer installment Unallocated Totals (In Thousands) Residential Commercial Construction Allowance for Loan Losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 650 $ 168 $ 1,720 $ — $ — $ 5 $ — $ 2,543 Collectively evaluated for impairment 1,030 5,448 2,327 143 1,328 254 764 11,294 Total ending allowance balance $ 1,680 $ 5,616 $ 4,047 $ 143 $ 1,328 $ 259 $ 764 $ 13,837 Loans: Individually evaluated for impairment $ 5,263 $ 4,210 $ 11,664 $ 74 $ 31 $ 5 $ 21,247 Collectively evaluated for impairment 183,298 618,169 360,031 43,449 133,152 24,547 1,362,646 Total ending loans balance $ 188,561 $ 622,379 $ 371,695 $ 43,523 $ 133,183 $ 24,552 $ 1,383,893 2017 Commercial, Finance, and Agricultural Real Estate Mortgages Consumer automobile Other consumer installment Unallocated Totals (In Thousands) Residential Commercial Construction Allowance for Loan Losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 96 $ 367 $ 1,721 $ — $ — $ — $ — $ 2,184 Collectively evaluated for impairment 1,081 5,312 2,556 155 804 271 495 10,674 Total ending allowance balance $ 1,177 $ 5,679 $ 4,277 $ 155 $ 804 $ 271 $ 495 $ 12,858 Loans: Individually evaluated for impairment $ 1,268 $ 3,732 $ 9,446 $ — $ — $ — $ 14,446 Collectively evaluated for impairment 177,617 593,345 322,573 31,683 79,714 26,964 1,231,896 Total ending loans balance $ 178,885 $ 597,077 $ 332,019 $ 31,683 $ 79,714 $ 26,964 $ 1,246,342 |
PREMISES AND EQUIPMENT (Tables)
PREMISES AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Summary of major classifications of premises and equipment | Major classifications of premises and equipment are summarized as follows at December 31, 2018 and 2017 : (In Thousands) 2018 2017 Land $ 7,111 $ 7,107 Premises 21,640 20,808 Furniture and equipment 10,369 9,895 Leasehold improvements 2,911 2,311 Total 42,031 40,121 Less accumulated depreciation and amortization 14,451 12,735 Net premises and equipment $ 27,580 $ 27,386 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of December 31, 2018 , the estimated future amortization expense for the core deposit and trade name intangible was: (In Thousands) Core Deposit Intangible Trade Name Intangible Book of Business Intangible 2019 $ 151 $ 11 $ 102 2020 117 8 102 2021 83 6 102 2022 48 4 102 2023 14 1 102 2024 — — 102 2025 — — 102 2026 — — 5 $ 413 $ 30 $ 719 |
TIME DEPOSITS (Tables)
TIME DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Banking and Thrift [Abstract] | |
Schedule of maturities on time deposits of $100,000 or more | At December 31, 2018 , the scheduled maturities on time deposits of $100,000 or more are as follows: (In Thousands) 2018 Three months or less $ 38,367 Three months to six months 28,102 Six months to twelve months 23,534 Over twelve months 83,750 Total $ 173,753 |
Schedule of total time deposit maturities | Total time deposit maturities are as follows at December 31, 2018 : (In Thousands) 2018 2019 $ 133,985 2020 74,062 2021 57,159 2022 14,878 2023 5,225 Thereafter 1,302 Total $ 286,611 |
SHORT-TERM BORROWINGS (Tables)
SHORT-TERM BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Summary of outstanding balances and related information for short-term borrowings | The outstanding balances and related information for short-term borrowings are summarized as follows at December 31, 2018 , 2017 , and 2016 : (In Thousands) 2018 2017 2016 Repurchase Agreements: Balance at year end $ 5,662 $ 7,878 $ 13,241 Maximum amount outstanding at any month end 8,431 13,782 17,827 Average balance outstanding during the year 7,043 10,425 15,394 Weighted-average interest rate: At year end 0.20 % 0.13 % 0.16 % Paid during the year 0.13 % 0.14 % 0.18 % Overnight: Balance at year end $ 162,203 $ 92,870 $ — Maximum amount outstanding at any month end 162,203 92,870 24,346 Average balance outstanding during the year 78,043 15,559 3,124 Weighted-average interest rate: At year end 2.62 % 1.54 % — % Paid during the year 2.24 % 1.41 % 0.57 % |
Summary of remaining contractual maturity of repurchase agreements | The remaining contractual maturity of repurchase agreements in the consolidated balance sheets as of December 31, 2018 and December 31, 2017 is presented in the following tables. 2018 2017 Remaining Contractual Maturity of the Agreements (In Thousands) Overnight and Continuous Overnight and Continuous Repurchase Agreements: Mortgage-backed securities $ 778 $ 1,898 State and political securities 1,003 6,894 Other debt securities 6,599 8,662 Total carrying value of collateral pledged $ 8,380 $ 17,454 Total liability recognized for repurchase agreements $ 5,662 $ 7,878 |
LONG-TERM BORROWINGS (Tables)
LONG-TERM BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of outstanding long-term borrowings with the FHLB by contractual maturities | The following represents outstanding long-term borrowings with the FHLB by contractual maturities at December 31, 2018 and 2017 : (In Thousands) Weighted Average Interest Rate Stated Interest Rate Range Description Maturity 2018 2017 From To 2018 2017 Variable 2018 — % 3.18 % 3.18 % 3.18 % $ — $ 10,000 Total Variable — % 3.18 % — 10,000 Fixed 2018 — % 1.13 % 1.13 % 1.13 % — 2,000 Fixed 2019 1.84 % 1.59 % 1.54 % 2.12 % 32,292 17,292 Fixed 2020 1.91 % 1.71 % 1.62 % 2.29 % 43,333 28,333 Fixed 2021 2.73 % — % 2.45 % 3.00 % 30,000 — Fixed 2022 2.24 % 1.99 % 1.98 % 2.56 % 23,000 13,000 Fixed 2023 3.10 % — % 3.10 % 3.10 % 10,000 — Total Fixed 2.21 % 1.72 % 138,625 60,625 Total 2.21 % 1.92 % $ 138,625 $ 70,625 |
Schedule of outstanding long-term borrowings with the FHLB by contractual maturities and Weighted-Average Rate | (In Thousands) Year Ending December 31, Amount Weighted Average Rate 2019 $ 32,292 1.84 % 2020 43,333 1.91 % 2021 30,000 2.73 % 2022 23,000 2.24 % 2023 10,000 3.10 % $ 138,625 2.21 % |
Schedule of future minimum lease payments for capital leases | The following is a schedule showing the future minimum lease payments under the capital lease by years and the present value of the minimum lease payments as of December 31, 2018. The interest rate related to the lease obligation is 2.75% and the maturity date is October 2023. (In Thousands) Lease Payment Interest Present Value of Minimum Lease Payment 2019 $ 38 $ 9 $ 29 2020 38 7 31 2021 38 7 31 2022 37 6 31 2023 200 5 195 $ 351 $ 34 $ 317 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of temporary differences giving rise to the net deferred tax asset position | The following temporary differences gave rise to the net deferred tax asset position at December 31, 2018 and 2017 : (In Thousands) 2018 2017 Deferred tax assets: Allowance for loan losses $ 2,909 $ 2,714 Deferred compensation 1,339 1,235 Defined pension 624 684 Deferred loan fees and discounts 274 211 Investment securities allowance 52 45 Unrealized loss on available for sale securities 362 14 Other 752 727 Total 6,312 5,630 Deferred tax liabilities: Investment security accretion 104 95 Depreciation 451 537 Amortization 603 610 Total 1,158 1,242 Deferred tax asset, net $ 5,154 $ 4,388 |
Schedule of provision or benefit for income taxes | The provision or benefit for income taxes is comprised of the following for the year ended December 31, 2018 , 2017 , and 2016 : (In Thousands) 2018 2017 2016 Currently payable $ 3,143 $ 5,690 $ 3,054 Deferred benefit (324 ) (955 ) 1,543 Change in corporate tax rate — 2,724 — Total provision $ 2,819 $ 7,459 $ 4,597 |
Schedule of reconciliation between the expected income tax or benefit and the effective income tax rate on income before income tax provision or benefit | A reconciliation between the expected income tax or benefit and the effective income tax rate on income before income tax provision or benefit follows for the year ended December 31, 2018 , 2017 , and 2016 : 2018 2017 2016 (In Thousands) Amount % Amount % Amount % Provision at expected rate $ 3,681 21.00 % $ 5,859 34.00 % $ 5,804 34.00 % (Decrease) increase in tax resulting from: Tax-exempt income (633 ) (3.61 ) (811 ) (4.71 ) (1,092 ) (6.40 ) Tax credits (177 ) (1.01 ) (177 ) (1.03 ) (312 ) (1.83 ) Change in corporate tax rate — — 2,724 15.81 — — Other, net (52 ) (0.30 ) (136 ) (0.78 ) 197 1.16 Effective income tax provision and rate $ 2,819 16.08 % $ 7,459 43.29 % $ 4,597 26.93 % |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Defined Benefit Plan [Abstract] | |
Schedule of obligation and funded status | The following table sets forth the obligation and funded status as of December 31, 2018 and 2017 : (In Thousands) 2018 2017 Change in benefit obligation: Benefit obligation at beginning of year $ 20,669 $ 19,289 Interest cost 706 756 Actuarial loss 141 159 Benefits paid (797 ) (782 ) Other, change in actuarial assumptions (1,697 ) 1,247 Benefit obligation at end of year $ 19,022 $ 20,669 Change in plan assets: Fair value of plan assets at beginning of year $ 17,486 $ 15,090 Actual return on plan assets (1,078 ) 2,424 Employer contribution 750 750 Benefits paid (797 ) (782 ) Adjustment to fair value of plan assets 5 4 Fair value of plan assets at end of year 16,366 17,486 Funded status $ (2,656 ) $ (3,183 ) Accounts recognized on balance sheet as: Total liabilities $ (2,656 ) $ (3,183 ) Amounts not yet recognized as a component of net periodic pension cost: Amounts recognized in accumulated other comprehensive income (loss) consist of: Net loss $ 6,678 $ 6,227 |
Schedule of components of the net periodic cost and other amounts recognized in other comprehensive income (loss) | Components of Net Periodic Cost and Other Amounts Recognized in Other Comprehensive Income (Loss) as of December 31, 2018 , 2017 , and 2016 are as follows: (In Thousands) 2018 2017 2016 Net periodic pension cost: Service cost $ — $ — $ 55 Interest cost 706 756 775 Expected return on plan assets (1,098 ) (926 ) (989 ) Amortization of unrecognized net loss 165 174 153 Net periodic (benefit) cost $ (227 ) $ 4 $ (6 ) |
Schedule of weighted-average assumptions used to determine benefit obligations and net periodic cost | Weighted-average assumptions used to determine benefit obligations at December 31, 2018 , 2017 , and 2016 : 2018 2017 2016 Discount rate 4.10 % 3.47 % 3.98 % Rate of compensation increase N/A N/A N/A Weighted-average assumptions used to determine net periodic cost for years ended December 31, 2018 , 2017 , and 2016 : 2018 2017 2016 Discount rate 3.47 % 3.98 % 4.17 % Expected long-term return on plan assets 7.00 % 7.00 % 7.00 % |
Schedule of plan's weighted-average asset allocations by asset category | The Plan’s weighted-average asset allocations at December 31, 2018 and 2017 by asset category are as follows: Asset Category 2018 2017 Cash 4.70 % 4.96 % Fixed income securities 12.98 % 11.42 % Equity 64.26 % 66.90 % Inflation Hedges/Real Assets 5.90 % 5.82 % Hedged Strategies 12.16 % 10.90 % Total 100.00 % 100.00 % |
Schedule setting forth by level, within the fair value hierarchy the Plan's assets at fair value | The following table sets forth by level, within the fair value hierarchy detailed in Note 21 - Fair Value Measurements, the Plan’s assets at fair value as of December 31, 2018 and 2017 : 2018 (In Thousands) Level I Level II Level III Total Assets: Cash and cash equivalents $ 770 $ — $ — $ 770 Mutual funds - taxable fixed income 2,120 — — 2,120 Mutual funds - domestic equity 8,550 — — 8,550 Mutual funds - international equity 1,970 — — 1,970 Inflation Hedges/Real Assets 965 — — 965 Hedged Strategies 1,991 — — 1,991 Total assets at fair value $ 16,366 $ — $ — $ 16,366 2017 (In Thousands) Level I Level II Level III Total Assets: Cash and cash equivalents $ 868 $ — $ — $ 868 Mutual funds - taxable fixed income 1,992 — — 1,992 Mutual funds - domestic equity 9,358 — — 9,358 Mutual funds - international equity 2,343 — — 2,343 Inflation Hedges/Real Assets 1,019 — — 1,019 Hedged Strategies 1,906 — — 1,906 Total assets at fair value $ 17,486 $ — $ — $ 17,486 |
Schedule of future benefit payments expected to be paid | The following future benefit payments are expected to be paid: (In Thousands) 2019 $ 886 2020 918 2021 910 2022 929 2023 1,000 2024-2028 5,444 $ 10,087 |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock options activity | A summary of stock option activity for the year ended December 31, 2018 is presented below: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2015 34,750 42.03 9.67 14,943 Granted — — Exercised — — Forfeited (8,250 ) 42.03 Expired — — Outstanding at December 31, 2016 26,500 42.03 8.66 224,455 Granted 70,000 44.21 9.23 Exercised — — Forfeited (3,000 ) 44.21 Expired — — Outstanding at December 31, 2017 93,500 $ 43.59 8.79 $ 279,365 Granted 174,700 45.87 9.56 Exercised — — Forfeited (4,500 ) 42.76 Expired — — Outstanding at December 31, 2018 263,700 $ 45.12 8.97 $ — Options exercisable at December 31, 2018 — $ — — $ — On December 31, 2018 , a total of 263,700 options were outstanding. Outstanding options at December 31, 2018 and the related vesting schedules are summarized below: Stock Options Granted Date Shares Forfeited Outstanding Strike Price Vesting Period Expiration August 24, 2018 50,200 — 50,200 $ 46.00 3 years 10 years August 24, 2018 99,500 — 99,500 46.00 5 years 10 years January 5, 2018 12,500 — 12,500 45.11 3 years 10 years January 5, 2018 12,500 — 12,500 45.11 5 years 10 years March 24, 2017 46,250 (4,500 ) 41,750 44.21 3 years 10 years March 24, 2017 23,750 — 23,750 44.21 5 years 10 years August 27, 2015 38,750 (15,250 ) 23,500 42.03 5 years 10 years |
Stock option valuation assumptions | The following is a summary of the assumptions used in this model for the stock options granted during 2018 and 2017 (no options were issued during 2016): 2018 2017 Risk-free interest rate 2.68 % 1.90 % Expected volatility 24.78 % 27.63 % Expected dividend yield 2.16 % 4.20 % Expected life 7.15 years 6.84 years Weighted average grant date fair value per option $ 7.72 $ 8.99 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Summary of loan activity with executive officers, directors, principal shareholders, and associates of such persons | A summary of loan activity with executive officers, directors, principal shareholders, and associates of such persons is listed below for the years ended December 31, 2018 and 2017 : (In Thousands) Beginning Balance New Loans Repayments Ending Balance 2017 $ 8,877 $ 13,147 $ (3,013 ) $ 19,011 2018 19,011 5,602 (6,822 ) 17,791 |
COMMITMENTS AND CONTINGENT LI_2
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments under operating leases with noncancellable terms in excess of one year | The following schedule shows future minimum rental payments under operating leases with noncancellable terms in excess of one year as of December 31, 2018 : (In Thousands) 2019 $ 546 2020 560 2021 563 2022 456 2023 601 Thereafter 2,117 $ 4,843 |
OFF-BALANCE SHEET RISK (Tables)
OFF-BALANCE SHEET RISK (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Off Balance Sheet Risk | |
Schedule of financial instruments whose contract amounts represent credit risk | Financial instruments whose contract amounts represent credit risk are as follows at December 31, 2018 and 2017 : (In Thousands) 2018 2017 Commitments to extend credit $ 166,417 $ 264,982 Standby letters of credit 10,566 10,406 Credit exposure from the sale of assets with recourse 6,152 4,893 |
CAPITAL REQUIREMENTS (Tables)
CAPITAL REQUIREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Banking and Thrift [Abstract] | |
Schedule of the Company's and the Bank's actual capital ratios showing that both met all regulatory capital requirements | The Corporation’s and the Banks' actual capital ratios (using the definitions from the prompt corrective action rules) are presented in the following tables, which shows that the Corporation and both Banks met all regulatory capital requirements. Consolidated Corporation 2018 2017 (In Thousands) Amount Ratio Amount Ratio Common Equity Tier I Capital (to Risk-weighted Assets) Actual $ 132,543 10.178 % $ 125,513 11.254 % For Capital Adequacy Purposes 58,601 4.500 % 50,187 4.500 % Minimum To Maintain Capital Conservation Buffer 83,018 6.375 % 64,128 5.750 % To Be Well Capitalized 84,646 6.500 % 72,493 6.500 % Total Capital (to Risk-weighted Assets) Actual $ 142,876 10.972 % $ 132,094 11.844 % For Capital Adequacy Purposes 104,175 8.000 % 89,223 8.000 % Minimum To Maintain Capital Conservation Buffer 128,591 9.875 % 103,164 9.250 % To Be Well Capitalized 130,219 10.000 % 111,528 10.000 % Tier I Capital (to Risk-weighted Assets) Actual $ 132,543 10.178 % $ 125,513 11.254 % For Capital Adequacy Purposes 78,135 6.000 % 66,916 6.000 % Minimum To Maintain Capital Conservation Buffer 102,552 7.875 % 80,857 7.250 % To Be Well Capitalized 104,180 8.000 % 89,222 8.000 % Tier I Capital (to Average Assets) Actual $ 132,543 8.176 % $ 125,513 8.766 % For Capital Adequacy Purposes 64,845 4.000 % 57,273 4.000 % To Be Well Capitalized 81,056 5.000 % 71,591 5.000 % Jersey Shore State Bank 2018 2017 (In Thousands) Amount Ratio Amount Ratio Common Equity Tier I Capital (to Risk-weighted Assets) Actual $ 94,105 9.879 % $ 88,289 10.120 % For Capital Adequacy Purposes 42,866 4.500 % 39,259 4.500 % Minimum To Maintain Capital Conservation Buffer 60,727 6.375 % 50,164 5.750 % To Be Well Capitalized 61,917 6.500 % 56,707 6.500 % Total Capital (to Risk-weighted Assets) Actual $ 102,534 10.764 % $ 93,145 10.677 % For Capital Adequacy Purposes 76,205 8.000 % 69,791 8.000 % Minimum To Maintain Capital Conservation Buffer 94,066 9.875 % 80,696 9.250 % To Be Well Capitalized 95,256 10.000 % 87,239 10.000 % Tier I Capital (to Risk-weighted Assets) Actual $ 94,105 9.879 % $ 88,289 10.120 % For Capital Adequacy Purposes 57,155 6.000 % 52,345 6.000 % Minimum To Maintain Capital Conservation Buffer 75,015 7.875 % 63,251 7.250 % To Be Well Capitalized 76,206 8.000 % 69,794 8.000 % Tier I Capital (to Average Assets) Actual $ 94,105 7.724 % $ 88,289 8.235 % For Capital Adequacy Purposes 48,734 4.000 % 42,885 4.000 % To Be Well Capitalized 60,917 5.000 % 53,606 5.000 % Luzerne Bank 2018 2017 (In Thousands) Amount Ratio Amount Ratio Common Equity Tier I Capital (to Risk-weighted Assets) Actual $ 35,378 10.061 % $ 31,116 9.731 % For Capital Adequacy Purposes 15,824 4.500 % 14,389 4.500 % Minimum To Maintain Capital Conservation Buffer 22,417 6.375 % 18,386 5.750 % To Be Well Capitalized 22,856 6.500 % 20,785 6.500 % Total Capital (to Risk-weighted Assets) Actual $ 37,283 10.603 % $ 32,533 10.174 % For Capital Adequacy Purposes 28,130 8.000 % 25,581 8.000 % Minimum To Maintain Capital Conservation Buffer 34,723 9.875 % 29,578 9.250 % To Be Well Capitalized 35,163 10.000 % 31,977 10.000 % Tier I Capital (to Risk-weighted Assets) Actual $ 35,378 10.061 % $ 31,116 9.731 % For Capital Adequacy Purposes 21,098 6.000 % 19,186 6.000 % Minimum To Maintain Capital Conservation Buffer 27,691 7.875 % 23,183 7.250 % To Be Well Capitalized 28,131 8.000 % 25,581 8.000 % Tier I Capital (to Average Assets) Actual $ 35,378 8.655 % $ 31,116 8.384 % For Capital Adequacy Purposes 16,350 4.000 % 14,845 4.000 % To Be Well Capitalized 20,438 5.000 % 18,557 5.000 % |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets reported on the balance sheet at their fair value on a recurring basis | The following table presents the assets reported on the balance sheet at their fair value on a recurring basis as of December 31, 2018 and 2017 , by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. 2018 (In Thousands) Level I Level II Level III Total Assets measured on a recurring basis: Investment securities, available for sale: Mortgage-backed securities $ — $ 6,153 $ — $ 6,153 State and political securities — 79,541 — 79,541 Other debt securities — 48,591 — 48,591 Investment equity securities: Financial institution equity securities 552 — — 552 Other equity securities 1,224 — — 1,224 Investment securities, trading: Other equity securities 36 — — 36 2017 (In Thousands) Level I Level II Level III Total Assets measured on a recurring basis: Investment securities, available for sale: Mortgage-backed securities $ — $ 4,213 $ — $ 4,213 State and political securities — 56,508 — 56,508 Other debt securities — 47,906 — 47,906 Investment equity securities: Financial institution equity securities 1,265 — — 1,265 Other equity securities 1,251 — — 1,251 Investment securities, trading: Other equity securities 190 — — 190 |
Schedule of assets reported on the consolidated balance sheet at their fair value on a non-recurring basis | The following table presents the assets reported on the balance sheet at their fair value on a non-recurring basis as of December 31, 2018 and 2017 , by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. 2018 (In Thousands) Level I Level II Level III Total Assets measured on a non-recurring basis: Impaired loans $ — $ — $ 18,704 $ 18,704 Other real estate owned — — 402 402 2017 (In Thousands) Level I Level II Level III Total Assets measured on a non-recurring basis: Impaired loans $ — $ — $ 12,262 $ 12,262 Other real estate owned — — 143 143 |
Schedule of listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques | The following table provides a listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques as of December 31, 2018 and 2017 : 2018 Quantitative Information About Level III Fair Value Measurements (In Thousands) Fair Value Valuation Technique(s) Unobservable Inputs Range Weighted Average Impaired loans $ 12,929 Discounted cash flow Temporary reduction in payment amount 7% to (70)% (6)% Probability of default —% 5,775 Appraisal of collateral (1) Appraisal adjustments (1) 0 to (90)% (20)% Other real estate owned $ 402 Appraisal of collateral (1) Appraisal adjustments (1) (20)% (20)% 2017 Quantitative Information About Level III Fair Value Measurements (In Thousands) Fair Value Valuation Technique(s) Unobservable Inputs Range Weighted Average Impaired loans $ 6,583 Discounted cash flow Temporary reduction in payment amount 3% to (70)% (4)% Probability of default —% 5,679 Appraisal of collateral (1) Appraisal adjustments (1) 0 to (20)% (17)% Other real estate owned $ 143 Appraisal of collateral (1) Appraisal adjustments (1) (20)% (20)% (1) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair values of financial instruments | The fair values of the Corporation’s financial instruments not required to be measured or reported at fair value are as follows at December 31, 2018 and 2017 : Fair Value Measurements at December 31, 2018 (In Thousands) Carrying Value Fair Value Quoted Prices in Active Markets for Identical Assets (Level I) Significant Other Observable Inputs (Level II) Significant Unobservable Inputs (Level III) Financial assets: Cash and cash equivalents (1) $ 66,742 $ 66,742 $ 66,742 $ — $ — Restricted investment in bank stock 18,862 18,862 18,862 — — Loans held for sale (1) 2,929 2,929 2,929 — — Loans, net 1,370,920 1,381,581 — — 1,381,581 Bank-owned life insurance (1) 28,627 28,627 28,627 — — Accrued interest receivable (1) 5,334 5,334 5,334 — — Financial liabilities: Interest-bearing deposits $ 899,089 $ 882,108 $ 612,478 $ — $ 269,630 Noninterest-bearing deposits (1) 320,814 320,814 320,814 — — Short-term borrowings (1) 167,865 167,865 167,865 — — Long-term borrowings 138,942 137,773 — — 137,773 Accrued interest payable (1) 1,150 1,150 1,150 — — (1) The financial instrument is carried at cost at December 31, 2018 , which approximate the fair value of the instruments Fair Value Measurements at December 31, 2017 (In Thousands) Carrying Value Fair Value Quoted Prices in Active Markets for Identical Assets (Level I) Significant Other Observable Inputs (Level II) Significant Unobservable Inputs (Level III) Financial assets: Cash and cash equivalents $ 27,243 $ 27,243 $ 27,243 $ — $ — Restricted investment in bank stock 13,332 13,332 13,332 Loans held for sale 1,196 1,196 1,196 — — Loans, net 1,233,756 1,264,584 — — 1,264,584 Bank-owned life insurance 27,982 27,982 27,982 — — Accrued interest receivable 4,321 4,321 4,321 — — Financial liabilities: Interest-bearing deposits $ 843,004 $ 838,441 $ 611,187 $ — $ 227,254 Noninterest-bearing deposits 303,316 303,316 303,316 — — Short-term borrowings 100,748 100,748 100,748 — — Long-term borrowings 70,970 70,280 — — 70,280 Accrued interest payable 502 502 502 — — |
PARENT COMPANY ONLY FINANCIAL_2
PARENT COMPANY ONLY FINANCIAL STATEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Balance Sheet | CONDENSED BALANCE SHEET, DECEMBER 31, (In Thousands) 2018 2017 ASSETS: Cash $ 247 $ 132 Investment in subsidiaries: Bank 140,476 131,637 Non-bank 2,694 5,685 Other assets 295 889 Total Assets $ 143,712 $ 138,343 LIABILITIES AND SHAREHOLDERS’ EQUITY: Other liabilities $ 176 $ 149 Shareholders’ equity 143,536 138,194 Total liability and shareholders’ equity $ 143,712 $ 138,343 |
Condensed Income Statement | CONDENSED STATEMENT OF INCOME FOR THE YEARS ENDED DECEMBER 31, (In Thousands) 2018 2017 2016 Operating income: Dividends from subsidiaries $ 9,091 $ 11,352 $ 10,007 Equity in undistributed earnings of subsidiaries 6,973 (908 ) 3,128 Operating expenses (1,360 ) (671 ) (660 ) Net income $ 14,704 $ 9,773 $ 12,475 Comprehensive income $ 13,579 $ 10,545 $ 11,346 |
Condensed Cash Flow Statement | CONDENSED STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, (In Thousands) 2018 2017 2016 OPERATING ACTIVITIES: Net income $ 14,704 $ 9,773 $ 12,475 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed earnings of subsidiaries (6,973 ) 908 (3,128 ) Other, net 620 (525 ) 344 Net cash provided by operating activities 8,351 10,156 9,691 FINANCING ACTIVITIES: Dividends paid (8,818 ) (8,837 ) (8,903 ) Issuance of common stock 582 116 101 Purchase of treasury stock — (1,881 ) (574 ) Net cash used for financing activities (8,236 ) (10,602 ) (9,376 ) NET INCREASE (DECREASE) IN CASH 115 (446 ) 315 CASH, BEGINNING OF YEAR 132 578 263 CASH, END OF YEAR $ 247 $ 132 $ 578 |
CONSOLIDATED QUARTERLY FINANC_2
CONSOLIDATED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of consolidated quarterly financial data | (In Thousands, Except Per Share Data) For the Three Months Ended 2018 March 31, June 30, Sept. 30, Dec. 31, Interest income $ 13,201 $ 14,111 $ 15,198 $ 16,236 Interest expense 2,048 2,408 2,943 3,537 Net interest income 11,153 11,703 12,255 12,699 Provision for loan losses 160 335 480 760 Non-interest income, excluding securities gains 2,121 2,347 2,613 2,594 Securities gains (losses), net (40 ) 15 (24 ) (165 ) Non-interest expense 9,277 9,517 9,681 9,532 Income before income tax provision 3,797 4,213 4,683 4,836 Income tax provision 589 733 857 640 Consolidated net income $ 3,208 $ 3,480 $ 3,826 $ 4,196 Earnings per share - basic $ 0.68 $ 0.74 $ 0.82 $ 0.89 Earnings per share - diluted $ 0.68 $ 0.74 $ 0.82 $ 0.89 (In Thousands, Except Per Share Data) For the Three Months Ended 2017 March 31, June 30, Sept. 30, Dec. 31, Interest income $ 11,682 $ 12,209 $ 12,948 $ 13,138 Interest expense 1,346 1,385 1,496 1,670 Net interest income 10,336 10,824 11,452 11,468 Provision for loan losses 330 215 60 125 Non-interest income, excluding securities gains 2,452 2,775 2,442 2,483 Securities gains, net 199 (12 ) 298 107 Non-interest expense 8,985 9,063 9,566 9,248 Income before income tax provision 3,672 4,309 4,566 4,685 Income tax provision 986 1,223 1,282 3,968 Consolidated net income $ 2,686 $ 3,086 $ 3,284 $ 717 Earnings per share - basic $ 0.57 $ 0.65 $ 0.70 $ 0.16 Earnings per share - diluted $ 0.56 $ 0.65 $ 0.70 $ 0.15 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Gross Interchange and Debit Card Transaction Fees Net Network Costs | The below table compares gross interchange and debit card transaction fees net network costs for 2018, 2017 and 2016: (In Thousands) 2018 2017 2016 Debit card transaction fees $ 2,117 $ 1,960 $ 1,896 Other processing service fees 275 263 314 Gross interchange and card based transaction fees 2,392 2,223 2,210 Network costs 858 911 883 Net interchange and card based transaction fees $ 1,534 $ 1,312 $ 1,327 |
OPERATIONS AND SUMMARY OF SIG_3
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Principles of Consolidation, Nature of Business, Loan Charge-off Policies, and Loans Held for Sale (Details) | 12 Months Ended |
Dec. 31, 2018segmentoffice | |
Loans held for sale | |
Number of offices | office | 26 |
Number of reportable segments | segment | 1 |
Number of days loan is past due unless both well secured and in process of collection | 180 days |
United Solutions LLC | |
Loans held for sale | |
Partnership, ownership interest | 80.00% |
Minimum | |
Loans held for sale | |
Short holding period for loans held for sale, range | 14 days |
Maximum | |
Loans held for sale | |
Short holding period for loans held for sale, range | 30 days |
OPERATIONS AND SUMMARY OF SIG_4
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Premises and Equipment, Goodwill, Intangible Assets, and Investments in Limited Partnerships (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)partnershipbusiness | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill impairment loss | $ 0 | $ 0 | $ 0 |
Investment in Limited Partnerships | |||
Number of partnerships held by entity | partnership | 3 | ||
Carrying value of investments in limited partnerships | $ 218,000 | 402,000 | |
Tax credit receipt period over which investment in the partnership entered into after 2004 are being fully amortized | 10 years | ||
Amortization of investment in limited partnerships | $ 184,000 | $ 184,000 | $ 312,000 |
Furniture, fixtures, and equipment | Minimum | |||
Premises and equipment | |||
Estimated useful lives (in years) | 5 years | ||
Furniture, fixtures, and equipment | Maximum | |||
Premises and equipment | |||
Estimated useful lives (in years) | 10 years | ||
Buildings and improvements | Minimum | |||
Premises and equipment | |||
Estimated useful lives (in years) | 15 years | ||
Buildings and improvements | Maximum | |||
Premises and equipment | |||
Estimated useful lives (in years) | 40 years | ||
Luzerne National Bank Corporation | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets net | $ 443,000 | ||
Accumulated amortization | $ 1,571,000 | ||
Useful life (in years) | 10 years | ||
Acquisition of Businesses Related to Investment Product Sales | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets net | $ 719,000 | ||
Accumulated amortization | $ 301,000 | ||
Useful life (in years) | 10 years | ||
Number of businesses acquired | business | 2 |
OPERATIONS AND SUMMARY OF SIG_5
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - The M Group Products and Income Recognition (Details) - The M Group | 12 Months Ended |
Dec. 31, 2018 | |
The M Group products and income recognition | |
Term life insurance policies, term one (in years) | 10 years |
Term life insurance policies, term two (in years) | 15 years |
Term life insurance policies, term three (in years) | 20 years |
Term life insurance policies, term four (in years) | 30 years |
Term for which majority of the term life insurance policies are written (in years) | 20 years |
OPERATIONS AND SUMMARY OF SIG_6
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recent Accounting Pronouncements (Details) - USD ($) | Jan. 01, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Increase to retained earnings | $ 69,787,000 | $ 63,364,000 | |
Increase in assets as a result of adoption of new accounting guidance | 1,684,771,000 | 1,474,492,000 | |
Increase in liabilities as a result of new accounting guidance | $ 1,541,227,000 | 1,336,298,000 | |
Accounting Standards Update 2016-01 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Increase to retained earnings | 537,000 | ||
Decrease to accumulated other comprehensive income | $ 537,000 | ||
Scenario, Forecast | Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Increase in assets as a result of adoption of new accounting guidance | $ 10,294,000 | ||
Increase in liabilities as a result of new accounting guidance | $ 10,294,000 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Changes in Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Increase (Decrease) in Shareholders' Equity | |||
Beginning balance | $ 138,194 | $ 138,249 | $ 136,279 |
Total other comprehensive income (loss) | (1,125) | 772 | (1,129) |
Reclassification of certain income tax effects from accumulated other comprehensive loss | 0 | 818 | 0 |
Reclassification from adoption of 2016-01 | 0 | ||
Ending balance | 143,544 | 138,194 | 138,249 |
Net Unrealized Gain (Loss) on Available for Sale Securities | |||
Increase (Decrease) in Shareholders' Equity | |||
Beginning balance | (54) | (639) | 258 |
Other comprehensive income (loss) before reclassifications | (806) | 990 | 167 |
Amounts reclassified from accumulated other comprehensive (loss) income | 37 | (396) | (1,064) |
Total other comprehensive income (loss) | (769) | 594 | (897) |
Reclassification of certain income tax effects from accumulated other comprehensive loss | 0 | (9) | 0 |
Ending balance | (1,360) | (54) | (639) |
Defined Benefit Plan | |||
Increase (Decrease) in Shareholders' Equity | |||
Beginning balance | (4,920) | (4,289) | (4,057) |
Other comprehensive income (loss) before reclassifications | (486) | 63 | (333) |
Amounts reclassified from accumulated other comprehensive (loss) income | 130 | 115 | 101 |
Total other comprehensive income (loss) | (356) | 178 | (232) |
Reclassification of certain income tax effects from accumulated other comprehensive loss | 0 | (809) | 0 |
Ending balance | (5,276) | (4,920) | (4,289) |
AOCI Attributable to Parent | |||
Increase (Decrease) in Shareholders' Equity | |||
Beginning balance | (4,974) | (4,928) | (3,799) |
Other comprehensive income (loss) before reclassifications | (1,292) | 1,053 | (166) |
Amounts reclassified from accumulated other comprehensive (loss) income | 167 | (281) | (963) |
Total other comprehensive income (loss) | (1,125) | 772 | (1,129) |
Reclassification of certain income tax effects from accumulated other comprehensive loss | 0 | (818) | 0 |
Reclassification from adoption of 2016-01 | (537) | ||
Ending balance | (6,636) | (4,974) | (4,928) |
Accounting Standards Update 2016-01 | Net Unrealized Gain (Loss) on Available for Sale Securities | |||
Increase (Decrease) in Shareholders' Equity | |||
Reclassification from adoption of 2016-01 | (537) | 0 | 0 |
Accounting Standards Update 2016-01 | Defined Benefit Plan | |||
Increase (Decrease) in Shareholders' Equity | |||
Reclassification from adoption of 2016-01 | 0 | 0 | 0 |
Accounting Standards Update 2016-01 | AOCI Attributable to Parent | |||
Increase (Decrease) in Shareholders' Equity | |||
Reclassification from adoption of 2016-01 | $ (537) | $ 0 | $ 0 |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Reclassifications out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Income tax effect | $ (640) | $ (857) | $ (733) | $ (589) | $ (3,968) | $ (1,282) | $ (1,223) | $ (986) | $ (2,819) | $ (7,459) | $ (4,597) |
Net unrecognized pension income (expense) | (21,083) | (18,999) | (17,813) | ||||||||
NET INCOME ATTRIBUTABLE TO PENNS WOODS BANCORP, INC. | 14,704 | 9,773 | 12,475 | ||||||||
Amount Reclassified from Accumulated Other Comprehensive Income | Net Unrealized Gain (Loss) on Available for Sale Securities | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Net realized (loss) gain on available for sale securities | (47) | 600 | 1,611 | ||||||||
Income tax effect | 10 | (204) | (547) | ||||||||
NET INCOME ATTRIBUTABLE TO PENNS WOODS BANCORP, INC. | (37) | 396 | 1,064 | ||||||||
Amount Reclassified from Accumulated Other Comprehensive Income | Defined Benefit Plan | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Income tax effect | 35 | 59 | 52 | ||||||||
Net unrecognized pension income (expense) | (165) | (174) | (153) | ||||||||
NET INCOME ATTRIBUTABLE TO PENNS WOODS BANCORP, INC. | $ (130) | $ (115) | $ (101) |
PER SHARE DATA (Details)
PER SHARE DATA (Details) - $ / shares | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Aug. 27, 2015 | |
Earnings Per Share [Abstract] | |||||
Weighted average common shares issued (in shares) | 5,010,404 | 5,008,073 | 5,005,971 | ||
Average treasury stock shares (in shares) | (320,150) | (302,471) | (270,514) | ||
Weighted average common shares used to calculate basic and diluted earnings per share (in shares) | 4,690,254 | 4,705,602 | 4,735,457 | ||
Options outstanding (in shares) | 263,700 | 93,500 | 26,500 | 34,750 | 23,500 |
Share price (in dollars per share) | $ 45.12 | $ 43.59 | $ 42.03 | $ 42.03 |
INVESTMENT SECURITIES - Amortiz
INVESTMENT SECURITIES - Amortized Cost and Fair Values of Investment Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Available for sale (AFS): | ||
Amortized cost - total | $ 136,007 | |
Fair Value | 134,285 | $ 108,627 |
Investment equity securities: | ||
Fair Value | 1,776 | 2,516 |
Mortgage-backed securities | ||
Available for sale (AFS): | ||
Amortized cost - total | 6,385 | 4,273 |
Gross Unrealized Gains | 8 | 51 |
Gross Unrealized Losses | (240) | (111) |
Fair Value | 6,153 | 4,213 |
State and political securities | ||
Available for sale (AFS): | ||
Amortized cost - total | 79,358 | 56,295 |
Gross Unrealized Gains | 609 | 411 |
Gross Unrealized Losses | (426) | (198) |
Fair Value | 79,541 | 56,508 |
Other debt securities | ||
Available for sale (AFS): | ||
Amortized cost - total | 50,264 | 48,806 |
Gross Unrealized Gains | 17 | 180 |
Gross Unrealized Losses | (1,690) | (1,080) |
Fair Value | 48,591 | 47,906 |
Total debt securities | ||
Available for sale (AFS): | ||
Amortized cost - total | 136,007 | 109,374 |
Gross Unrealized Gains | 634 | 642 |
Gross Unrealized Losses | (2,356) | (1,389) |
Fair Value | 134,285 | 108,627 |
Financial institution equity securities | ||
Investment equity securities: | ||
Amortized cost - total | 328 | 537 |
Gross Unrealized Gains | 224 | 728 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 552 | 1,265 |
Other equity securities | ||
Investment equity securities: | ||
Amortized cost - total | 1,300 | 1,300 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (76) | (49) |
Fair Value | 1,224 | 1,251 |
Total equity securities | ||
Investment equity securities: | ||
Amortized cost - total | 1,628 | 1,837 |
Gross Unrealized Gains | 224 | 728 |
Gross Unrealized Losses | (76) | (49) |
Fair Value | 1,776 | 2,516 |
Financial institution equity securities | ||
Trading: | ||
Amortized cost - total | 20 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | 20 | |
Other equity securities | ||
Trading: | ||
Amortized cost - total | 49 | 192 |
Gross Unrealized Gains | 0 | 2 |
Gross Unrealized Losses | (13) | (24) |
Fair Value | 36 | 170 |
Trading investment equity securities | ||
Trading: | ||
Amortized cost - total | 49 | 212 |
Gross Unrealized Gains | 0 | 2 |
Gross Unrealized Losses | (13) | (24) |
Fair Value | $ 36 | $ 190 |
INVESTMENT SECURITIES - Gross U
INVESTMENT SECURITIES - Gross Unrealized Gains (Losses) and Fair Value by Investment Category and Length of Time (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Investment securities | ||
Fair value, less than twelve months | $ 27,975 | $ 24,184 |
Gross unrealized losses, less than twelve months | (356) | (264) |
Fair value, twelve months or greater | 51,354 | 33,811 |
Gross unrealized losses, twelve months or greater | (2,000) | (1,125) |
Fair value, total | 79,329 | 57,995 |
Gross unrealized losses, total | (2,356) | (1,389) |
Mortgage-backed securities | ||
Investment securities | ||
Fair value, less than twelve months | 3,023 | 981 |
Gross unrealized losses, less than twelve months | (75) | (12) |
Fair value, twelve months or greater | 2,930 | 2,276 |
Gross unrealized losses, twelve months or greater | (165) | (99) |
Fair value, total | 5,953 | 3,257 |
Gross unrealized losses, total | (240) | (111) |
State and political securities | ||
Investment securities | ||
Fair value, less than twelve months | 14,819 | 15,691 |
Gross unrealized losses, less than twelve months | (128) | (104) |
Fair value, twelve months or greater | 13,648 | 3,018 |
Gross unrealized losses, twelve months or greater | (298) | (94) |
Fair value, total | 28,467 | 18,709 |
Gross unrealized losses, total | (426) | (198) |
Other debt securities | ||
Investment securities | ||
Fair value, less than twelve months | 10,133 | 7,512 |
Gross unrealized losses, less than twelve months | (153) | (148) |
Fair value, twelve months or greater | 34,776 | 28,517 |
Gross unrealized losses, twelve months or greater | (1,537) | (932) |
Fair value, total | 44,909 | 36,029 |
Gross unrealized losses, total | $ (1,690) | $ (1,080) |
INVESTMENT SECURITIES - Narrati
INVESTMENT SECURITIES - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)security | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Investments, Debt and Equity Securities [Abstract] | |||
Number of individual securities that were in a continuous unrealized loss position for less than twelve months | security | 23 | ||
Number of individual securities that were in a continuous unrealized loss position for greater than twelve months | security | 47 | ||
Gross proceeds from sales of securities | $ 19,296,000 | $ 25,528,000 | $ 44,829,000 |
Impairment charges | 0 | 0 | $ 0 |
Carrying value of investment securities pledged | 73,327,000 | 89,736,000 | |
Investment equity securities, at fair value | $ 1,776,000 | 2,516,000 | |
Net unrealized gains recognized in AOCI | $ 679,000 |
INVESTMENT SECURITIES - Amort_2
INVESTMENT SECURITIES - Amortized Cost and Fair Value of Debt Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Available for Sale, Amortized Cost | ||
Due in one year or less | $ 3,135 | |
Due after one year to five years | 41,923 | |
Due after five years to ten years | 69,978 | |
Due after ten years | 20,971 | |
Amortized cost - total | 136,007 | |
Available for Sale, Fair Value | ||
Due in one year or less | 3,134 | |
Due after one year to five years | 40,883 | |
Due after five years to ten years | 69,316 | |
Due after ten years | 20,952 | |
Fair value - total | $ 134,285 | $ 108,627 |
INVESTMENT SECURITIES - Realize
INVESTMENT SECURITIES - Realized Gains and Losses on Sales of Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Gross realized gains and losses | |||
Debt securities, available-for-sale, gross realized gains | $ 49 | $ 530 | $ 1,116 |
Debt securities, available-for-sale, gross realized losses | 96 | 69 | 208 |
Equity securities, gross realized gains | 0 | 288 | 789 |
Equity securities, gross realized losses | 0 | 149 | 86 |
U.S. Government and agency securities | |||
Gross realized gains and losses | |||
Debt securities, available-for-sale, gross realized gains | 0 | 0 | 11 |
Debt securities, available-for-sale, gross realized losses | 0 | 0 | 5 |
Mortgage-backed securities | |||
Gross realized gains and losses | |||
Debt securities, available-for-sale, gross realized gains | 27 | 69 | 35 |
Debt securities, available-for-sale, gross realized losses | 0 | 0 | 13 |
State and political securities | |||
Gross realized gains and losses | |||
Debt securities, available-for-sale, gross realized gains | 19 | 408 | 787 |
Debt securities, available-for-sale, gross realized losses | 86 | 18 | 1 |
Other debt securities | |||
Gross realized gains and losses | |||
Debt securities, available-for-sale, gross realized gains | 3 | 53 | 283 |
Debt securities, available-for-sale, gross realized losses | 10 | 51 | 189 |
Financial institution equity securities | |||
Gross realized gains and losses | |||
Equity securities, gross realized gains | 0 | 288 | 572 |
Equity securities, gross realized losses | 0 | 0 | 0 |
Other equity securities | |||
Gross realized gains and losses | |||
Equity securities, gross realized gains | 0 | 0 | 217 |
Equity securities, gross realized losses | $ 0 | $ 149 | $ 86 |
INVESTMENT SECURITIES - Unreali
INVESTMENT SECURITIES - Unrealized and Realized Gains and Losses Recognized in Net Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Equity Securities, FV-NI, Gain (Loss) [Abstract] | |||
Net losses recognized in equity securities during the period | $ (170) | $ 0 | $ 0 |
Less: Net gains realized on the sale of equity securities during the period | 361 | ||
Unrealized losses recognized in equity securities held at reporting date | (531) | ||
Debt Securities, Trading, Gain (Loss) [Abstract] | |||
Net (losses) gain on sales transaction | (6) | 16 | 51 |
Net mark-to-market gains (losses) | 9 | (24) | 7 |
Net gain (loss) on trading account securities | $ 3 | $ (8) | $ 58 |
FEDERAL HOME LOAN BANK STOCK (D
FEDERAL HOME LOAN BANK STOCK (Details) | Dec. 31, 2018$ / shares |
Federal Home Loan Banks [Abstract] | |
FHLB stock (in dollars per share) | $ 100 |
LOAN CREDIT QUALITY AND RELAT_3
LOAN CREDIT QUALITY AND RELATED ALLOWANCE FOR LOAN LOSSES - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2018USD ($)categoryloanclasscomponent | Dec. 31, 2017USD ($)loan | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Minimum amount to evaluate individual loans for possible impairment | $ 100,000 | |
Maximum amount to evaluate individual loans for possible impairment on a case by case basis | $ 100,000 | |
Payment delays period up to which loans are not classified as impaired, maximum (in days) | 90 days | |
Impaired financing receivable commitment to lend | $ 14,000 | |
Period to classify TDR non performing loans to performing (in months) | 6 months | |
Number of TDRs granted | loan | 5 | 8 |
Number of categories considered not criticized and rated as Pass | category | 6 | |
Minimum period after which loans are considered as substandard (in days) | 90 days | |
Number of components that represents the allowance for loan losses | component | 2 | |
Number of classes that groups of loans are collectively evaluated for impairment | class | 2 | |
Period considered for quarter moving average which used in calculating historical charge off (in months) | 36 months | |
Adjustment of period considered for quarter moving average which used in calculating historical charge off (in months) | 12 months | |
Increase of basis points | 0.10% | |
Amount of foreclosed residential real estate held | $ 624,000 | $ 422,000 |
Consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process | 167,000 | $ 378,000 |
Jersey Shore State Bank | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Minimum amount after which external annual loan review is performed | 1,750,000 | |
Luzerne National Bank Corporation | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Minimum amount after which external annual loan review is performed | $ 1,500,000 | |
Payment Concession | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of TDRs granted | loan | 4 | 6 |
Amount of TDRs granted | $ 1,546,000 | $ 1,061,000 |
Term Concession | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of TDRs granted | loan | 1 | 1 |
Amount of TDRs granted | $ 6,000 | $ 52,000 |
Rate Concession | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of TDRs granted | loan | 1 | |
Amount of TDRs granted | $ 273,000 | |
Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of categories in which real estate loans are segmented | category | 3 |
LOAN CREDIT QUALITY AND RELAT_4
LOAN CREDIT QUALITY AND RELATED ALLOWANCE FOR LOAN LOSSES - Aging Category of Loans, by Segment (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Aging categories of loans by segment | ||||
Current | $ 1,355,315 | $ 1,229,330 | ||
Past Due 30 To 89 Days | 12,006 | 9,744 | ||
Past Due 90 Days Or More & Still Accruing | 1,274 | 509 | ||
Non-Accrual | 15,298 | 6,759 | ||
Total | 1,383,893 | 1,246,342 | ||
Net deferred loan fees and discounts | 864 | 272 | ||
Allowance for loan losses | (13,837) | (12,858) | $ (12,896) | $ (12,044) |
Current loans, net | 1,342,342 | 1,216,744 | ||
Loans, net | 1,370,920 | 1,233,756 | ||
Commercial, Financial, and Agricultural Portfolio Segment | ||||
Aging categories of loans by segment | ||||
Current | 182,651 | 178,022 | ||
Past Due 30 To 89 Days | 616 | 663 | ||
Past Due 90 Days Or More & Still Accruing | 0 | 86 | ||
Non-Accrual | 5,294 | 114 | ||
Total | 188,561 | 178,885 | ||
Allowance for loan losses | (1,680) | (1,177) | (1,554) | (1,532) |
Consumer automobile loans | ||||
Aging categories of loans by segment | ||||
Current | 132,713 | 79,595 | ||
Past Due 30 To 89 Days | 412 | 87 | ||
Past Due 90 Days Or More & Still Accruing | 27 | 0 | ||
Non-Accrual | 31 | 32 | ||
Total | 133,183 | 79,714 | ||
Allowance for loan losses | (1,328) | (804) | (143) | 0 |
Other consumer installment loans | ||||
Aging categories of loans by segment | ||||
Current | 23,902 | 26,740 | ||
Past Due 30 To 89 Days | 636 | 202 | ||
Past Due 90 Days Or More & Still Accruing | 9 | 5 | ||
Non-Accrual | 5 | 17 | ||
Total | 24,552 | 26,964 | ||
Allowance for loan losses | (259) | (271) | (273) | (243) |
Residential Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | ||||
Aging categories of loans by segment | ||||
Current | 611,281 | 588,278 | ||
Past Due 30 To 89 Days | 7,688 | 6,853 | ||
Past Due 90 Days Or More & Still Accruing | 1,238 | 318 | ||
Non-Accrual | 2,172 | 1,628 | ||
Total | 622,379 | 597,077 | ||
Allowance for loan losses | (5,616) | (5,679) | (5,383) | (5,116) |
Commercial Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | ||||
Aging categories of loans by segment | ||||
Current | 361,624 | 325,148 | ||
Past Due 30 To 89 Days | 2,349 | 1,823 | ||
Past Due 90 Days Or More & Still Accruing | 0 | 80 | ||
Non-Accrual | 7,722 | 4,968 | ||
Total | 371,695 | 332,019 | ||
Allowance for loan losses | (4,047) | (4,277) | (4,975) | (4,217) |
Construction Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | ||||
Aging categories of loans by segment | ||||
Current | 43,144 | 31,547 | ||
Past Due 30 To 89 Days | 305 | 116 | ||
Past Due 90 Days Or More & Still Accruing | 0 | 20 | ||
Non-Accrual | 74 | 0 | ||
Total | 43,523 | 31,683 | ||
Allowance for loan losses | $ (143) | $ (155) | $ (178) | $ (160) |
LOAN CREDIT QUALITY AND RELAT_5
LOAN CREDIT QUALITY AND RELATED ALLOWANCE FOR LOAN LOSSES - Interest Income if Interest Would Have Been Recorded (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Loan credit quality and related allowance for loan losses | |||
Interest Income That Would Have Been Recorded Based on Original Term and Rate | $ 830 | $ 565 | $ 656 |
Interest Income Recorded on a Cash Basis | 545 | 354 | 208 |
Commercial, Financial, and Agricultural Portfolio Segment | |||
Loan credit quality and related allowance for loan losses | |||
Interest Income That Would Have Been Recorded Based on Original Term and Rate | 289 | 23 | 6 |
Interest Income Recorded on a Cash Basis | 235 | 15 | 0 |
Consumer automobile loans | |||
Loan credit quality and related allowance for loan losses | |||
Interest Income That Would Have Been Recorded Based on Original Term and Rate | 7 | 1 | 0 |
Interest Income Recorded on a Cash Basis | 5 | 0 | 0 |
Other consumer installment loans | |||
Loan credit quality and related allowance for loan losses | |||
Interest Income That Would Have Been Recorded Based on Original Term and Rate | 1 | 4 | 3 |
Interest Income Recorded on a Cash Basis | 1 | 3 | 2 |
Residential Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | |||
Loan credit quality and related allowance for loan losses | |||
Interest Income That Would Have Been Recorded Based on Original Term and Rate | 123 | 147 | 151 |
Interest Income Recorded on a Cash Basis | 88 | 98 | 101 |
Commercial Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | |||
Loan credit quality and related allowance for loan losses | |||
Interest Income That Would Have Been Recorded Based on Original Term and Rate | 405 | 390 | 496 |
Interest Income Recorded on a Cash Basis | 212 | 238 | 105 |
Construction Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | |||
Loan credit quality and related allowance for loan losses | |||
Interest Income That Would Have Been Recorded Based on Original Term and Rate | 5 | 0 | 0 |
Interest Income Recorded on a Cash Basis | $ 4 | $ 0 | $ 0 |
LOAN CREDIT QUALITY AND RELAT_6
LOAN CREDIT QUALITY AND RELATED ALLOWANCE FOR LOAN LOSSES - Recorded Investment, Unpaid Principal Balance, and Related Allowance of Impaired Loans by Segment (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Credit Quality and Related Allowance for Loan Losses | ||
Recorded investment, with no related allowance recorded | $ 6,333 | $ 3,926 |
Unpaid principal balance, with no related allowance recorded | 6,333 | 3,926 |
Recorded investment, with an allowance recorded | 14,914 | 10,520 |
Unpaid principal balance, with an allowance recorded | 14,914 | 10,619 |
Recorded Investment | 21,247 | 14,446 |
Unpaid Principal Balance | 21,247 | 14,545 |
Related Allowance | 2,543 | 2,184 |
Commercial, Financial, and Agricultural Portfolio Segment | ||
Credit Quality and Related Allowance for Loan Losses | ||
Recorded investment, with no related allowance recorded | 1,152 | 1,033 |
Unpaid principal balance, with no related allowance recorded | 1,152 | 1,033 |
Recorded investment, with an allowance recorded | 4,111 | 235 |
Unpaid principal balance, with an allowance recorded | 4,111 | 235 |
Recorded Investment | 5,263 | 1,268 |
Unpaid Principal Balance | 5,263 | 1,268 |
Related Allowance | 650 | 96 |
Consumer automobile loans | ||
Credit Quality and Related Allowance for Loan Losses | ||
Recorded investment, with no related allowance recorded | 31 | 0 |
Unpaid principal balance, with no related allowance recorded | 31 | 0 |
Recorded investment, with an allowance recorded | 0 | 0 |
Unpaid principal balance, with an allowance recorded | 0 | 0 |
Recorded Investment | 31 | 0 |
Unpaid Principal Balance | 31 | 0 |
Related Allowance | 0 | 0 |
Other consumer installment loans | ||
Credit Quality and Related Allowance for Loan Losses | ||
Recorded investment, with no related allowance recorded | 0 | 0 |
Unpaid principal balance, with no related allowance recorded | 0 | 0 |
Recorded investment, with an allowance recorded | 5 | 0 |
Unpaid principal balance, with an allowance recorded | 5 | 0 |
Recorded Investment | 5 | 0 |
Unpaid Principal Balance | 5 | 0 |
Related Allowance | 5 | 0 |
Residential Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | ||
Credit Quality and Related Allowance for Loan Losses | ||
Recorded investment, with no related allowance recorded | 2,619 | 1,428 |
Unpaid principal balance, with no related allowance recorded | 2,619 | 1,428 |
Recorded investment, with an allowance recorded | 1,591 | 2,304 |
Unpaid principal balance, with an allowance recorded | 1,591 | 2,353 |
Recorded Investment | 4,210 | 3,732 |
Unpaid Principal Balance | 4,210 | 3,781 |
Related Allowance | 168 | 367 |
Commercial Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | ||
Credit Quality and Related Allowance for Loan Losses | ||
Recorded investment, with no related allowance recorded | 2,457 | 1,465 |
Unpaid principal balance, with no related allowance recorded | 2,457 | 1,465 |
Recorded investment, with an allowance recorded | 9,207 | 7,981 |
Unpaid principal balance, with an allowance recorded | 9,207 | 8,031 |
Recorded Investment | 11,664 | 9,446 |
Unpaid Principal Balance | 11,664 | 9,496 |
Related Allowance | 1,720 | 1,721 |
Construction Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | ||
Credit Quality and Related Allowance for Loan Losses | ||
Recorded investment, with no related allowance recorded | 74 | 0 |
Unpaid principal balance, with no related allowance recorded | 74 | 0 |
Recorded investment, with an allowance recorded | 0 | 0 |
Unpaid principal balance, with an allowance recorded | 0 | 0 |
Recorded Investment | 74 | 0 |
Unpaid Principal Balance | 74 | 0 |
Related Allowance | $ 0 | $ 0 |
LOAN CREDIT QUALITY AND RELAT_7
LOAN CREDIT QUALITY AND RELATED ALLOWANCE FOR LOAN LOSSES - Average Recorded Investment in Impaired Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Average Investment in Impaired Loans | $ 15,534 | $ 15,516 | $ 16,896 |
Interest Income Recognized on an Accrual Basis on Impaired Loans | 440 | 302 | 292 |
Interest Income Recognized on a Cash Basis on Impaired Loans | 455 | 332 | 212 |
Commercial, Financial, and Agricultural Portfolio Segment | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Average Investment in Impaired Loans | 2,018 | 727 | 400 |
Interest Income Recognized on an Accrual Basis on Impaired Loans | 71 | 41 | 16 |
Interest Income Recognized on a Cash Basis on Impaired Loans | 168 | 7 | 1 |
Consumer automobile loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Average Investment in Impaired Loans | 14 | 0 | 0 |
Interest Income Recognized on an Accrual Basis on Impaired Loans | 0 | 0 | 0 |
Interest Income Recognized on a Cash Basis on Impaired Loans | 1 | 0 | 0 |
Other consumer installment loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Average Investment in Impaired Loans | 1 | 5 | 0 |
Interest Income Recognized on an Accrual Basis on Impaired Loans | 0 | 0 | 0 |
Interest Income Recognized on a Cash Basis on Impaired Loans | 1 | 1 | 0 |
Residential Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Average Investment in Impaired Loans | 3,962 | 3,233 | 3,471 |
Interest Income Recognized on an Accrual Basis on Impaired Loans | 134 | 75 | 89 |
Interest Income Recognized on a Cash Basis on Impaired Loans | 87 | 91 | 101 |
Commercial Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Average Investment in Impaired Loans | 9,524 | 11,551 | 12,887 |
Interest Income Recognized on an Accrual Basis on Impaired Loans | 235 | 186 | 187 |
Interest Income Recognized on a Cash Basis on Impaired Loans | 194 | 233 | 110 |
Construction Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Average Investment in Impaired Loans | 15 | 0 | 138 |
Interest Income Recognized on an Accrual Basis on Impaired Loans | 0 | 0 | 0 |
Interest Income Recognized on a Cash Basis on Impaired Loans | $ 4 | $ 0 | $ 0 |
LOAN CREDIT QUALITY AND RELAT_8
LOAN CREDIT QUALITY AND RELATED ALLOWANCE FOR LOAN LOSSES - Loan Modifications Considered TDRs (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)contract | Dec. 31, 2017USD ($)contract | |
Troubled debt restructurings | ||
Number of Contracts | contract | 5 | 8 |
Pre-Modification Outstanding Recorded Investment | $ 1,552 | $ 1,386 |
Post-Modification Outstanding Recorded Investment | $ 1,552 | $ 1,386 |
Number of Contracts | contract | 1 | |
Recorded Investment | $ 1 | |
Commercial, Financial, and Agricultural Portfolio Segment | ||
Troubled debt restructurings | ||
Number of Contracts | contract | 1 | 0 |
Pre-Modification Outstanding Recorded Investment | $ 1,027 | $ 0 |
Post-Modification Outstanding Recorded Investment | $ 1,027 | $ 0 |
Number of Contracts | contract | 0 | |
Recorded Investment | $ 0 | |
Other consumer installment loans | ||
Troubled debt restructurings | ||
Number of Contracts | contract | 0 | 0 |
Pre-Modification Outstanding Recorded Investment | $ 0 | $ 0 |
Post-Modification Outstanding Recorded Investment | $ 0 | $ 0 |
Residential Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | ||
Troubled debt restructurings | ||
Number of Contracts | contract | 3 | 6 |
Pre-Modification Outstanding Recorded Investment | $ 419 | $ 1,015 |
Post-Modification Outstanding Recorded Investment | $ 419 | $ 1,015 |
Number of Contracts | contract | 1 | |
Recorded Investment | $ 1 | |
Commercial Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | ||
Troubled debt restructurings | ||
Number of Contracts | contract | 1 | 2 |
Pre-Modification Outstanding Recorded Investment | $ 106 | $ 371 |
Post-Modification Outstanding Recorded Investment | $ 106 | $ 371 |
Number of Contracts | contract | 0 | |
Recorded Investment | $ 0 | |
Construction Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | ||
Troubled debt restructurings | ||
Number of Contracts | contract | 0 | 0 |
Pre-Modification Outstanding Recorded Investment | $ 0 | $ 0 |
Post-Modification Outstanding Recorded Investment | $ 0 | $ 0 |
LOAN CREDIT QUALITY AND RELAT_9
LOAN CREDIT QUALITY AND RELATED ALLOWANCE FOR LOAN LOSSES - Credit Quality Categories (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Credit quality categories | ||
Total | $ 1,383,893 | $ 1,246,342 |
Pass | ||
Credit quality categories | ||
Total | 1,352,601 | 1,218,853 |
Special Mention | ||
Credit quality categories | ||
Total | 10,707 | 9,118 |
Substandard | ||
Credit quality categories | ||
Total | 20,585 | 18,371 |
Commercial, Financial, and Agricultural Portfolio Segment | ||
Credit quality categories | ||
Total | 188,561 | 178,885 |
Commercial, Financial, and Agricultural Portfolio Segment | Pass | ||
Credit quality categories | ||
Total | 179,840 | 175,603 |
Commercial, Financial, and Agricultural Portfolio Segment | Special Mention | ||
Credit quality categories | ||
Total | 3,426 | 738 |
Commercial, Financial, and Agricultural Portfolio Segment | Substandard | ||
Credit quality categories | ||
Total | 5,295 | 2,544 |
Consumer automobile loans | ||
Credit quality categories | ||
Total | 133,183 | 79,714 |
Consumer automobile loans | Pass | ||
Credit quality categories | ||
Total | 133,183 | 79,714 |
Consumer automobile loans | Special Mention | ||
Credit quality categories | ||
Total | 0 | 0 |
Consumer automobile loans | Substandard | ||
Credit quality categories | ||
Total | 0 | 0 |
Other consumer installment loans | ||
Credit quality categories | ||
Total | 24,552 | 26,964 |
Other consumer installment loans | Pass | ||
Credit quality categories | ||
Total | 24,552 | 26,964 |
Other consumer installment loans | Special Mention | ||
Credit quality categories | ||
Total | 0 | 0 |
Other consumer installment loans | Substandard | ||
Credit quality categories | ||
Total | 0 | 0 |
Residential Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | ||
Credit quality categories | ||
Total | 622,379 | 597,077 |
Residential Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | Pass | ||
Credit quality categories | ||
Total | 619,800 | 593,828 |
Residential Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | Special Mention | ||
Credit quality categories | ||
Total | 694 | 1,043 |
Residential Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | Substandard | ||
Credit quality categories | ||
Total | 1,885 | 2,206 |
Commercial Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | ||
Credit quality categories | ||
Total | 371,695 | 332,019 |
Commercial Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | Pass | ||
Credit quality categories | ||
Total | 351,703 | 311,209 |
Commercial Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | Special Mention | ||
Credit quality categories | ||
Total | 6,587 | 7,337 |
Commercial Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | Substandard | ||
Credit quality categories | ||
Total | 13,405 | 13,473 |
Construction Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | ||
Credit quality categories | ||
Total | 43,523 | 31,683 |
Construction Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | Pass | ||
Credit quality categories | ||
Total | 43,523 | 31,535 |
Construction Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | Special Mention | ||
Credit quality categories | ||
Total | 0 | 0 |
Construction Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | Substandard | ||
Credit quality categories | ||
Total | $ 0 | $ 148 |
LOAN CREDIT QUALITY AND RELA_10
LOAN CREDIT QUALITY AND RELATED ALLOWANCE FOR LOAN LOSSES - Allowance Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | |
Changes in allowance | |||||||||||||
Balance at the beginning of the period | $ 12,858 | $ 12,896 | $ 12,858 | $ 12,896 | $ 12,044 | ||||||||
Charge-offs | (963) | (1,045) | (530) | ||||||||||
Recoveries | 207 | 277 | 186 | ||||||||||
Provision for loan losses | $ 760 | $ 480 | $ 335 | 160 | $ 125 | $ 60 | $ 215 | 330 | 1,735 | 730 | 1,196 | ||
Balance at the end of the period | 13,837 | 12,858 | 13,837 | 12,858 | 12,896 | ||||||||
Allowance for Loan Losses: | |||||||||||||
Individually evaluated for impairment | $ 2,543 | $ 2,184 | |||||||||||
Collectively evaluated for impairment | 11,294 | 10,674 | |||||||||||
Total ending allowance balance | 13,837 | 12,858 | 12,858 | 12,896 | 12,858 | 12,896 | 12,044 | 13,837 | 12,858 | ||||
Loans: | |||||||||||||
Individually evaluated for impairment | 21,247 | 14,446 | |||||||||||
Collectively evaluated for impairment | 1,362,646 | 1,231,896 | |||||||||||
Total | 1,383,893 | 1,246,342 | |||||||||||
Commercial, Financial, and Agricultural Portfolio Segment | |||||||||||||
Changes in allowance | |||||||||||||
Balance at the beginning of the period | 1,177 | 1,554 | 1,177 | 1,554 | 1,532 | ||||||||
Charge-offs | (82) | (106) | (167) | ||||||||||
Recoveries | 36 | 135 | 62 | ||||||||||
Provision for loan losses | 549 | (406) | 127 | ||||||||||
Balance at the end of the period | 1,680 | 1,177 | 1,680 | 1,177 | 1,554 | ||||||||
Allowance for Loan Losses: | |||||||||||||
Individually evaluated for impairment | 650 | 96 | |||||||||||
Collectively evaluated for impairment | 1,030 | 1,081 | |||||||||||
Total ending allowance balance | 1,680 | 1,177 | 1,177 | 1,554 | 1,177 | 1,554 | 1,532 | 1,680 | 1,177 | ||||
Loans: | |||||||||||||
Individually evaluated for impairment | 5,263 | 1,268 | |||||||||||
Collectively evaluated for impairment | 183,298 | 177,617 | |||||||||||
Total | 188,561 | 178,885 | |||||||||||
Consumer automobile loans | |||||||||||||
Changes in allowance | |||||||||||||
Balance at the beginning of the period | 804 | 143 | 804 | 143 | 0 | ||||||||
Charge-offs | (246) | (57) | 0 | ||||||||||
Recoveries | 16 | 2 | 0 | ||||||||||
Provision for loan losses | 754 | 716 | 143 | ||||||||||
Balance at the end of the period | 1,328 | 804 | 1,328 | 804 | 143 | ||||||||
Allowance for Loan Losses: | |||||||||||||
Individually evaluated for impairment | 0 | 0 | |||||||||||
Collectively evaluated for impairment | 1,328 | 804 | |||||||||||
Total ending allowance balance | 1,328 | 804 | 804 | 143 | 804 | 143 | 0 | 1,328 | 804 | ||||
Loans: | |||||||||||||
Individually evaluated for impairment | 31 | 0 | |||||||||||
Collectively evaluated for impairment | 133,152 | 79,714 | |||||||||||
Total | 133,183 | 79,714 | |||||||||||
Other consumer installment loans | |||||||||||||
Changes in allowance | |||||||||||||
Balance at the beginning of the period | 271 | 273 | 271 | 273 | 243 | ||||||||
Charge-offs | (303) | (246) | (229) | ||||||||||
Recoveries | 74 | 75 | 92 | ||||||||||
Provision for loan losses | 217 | 169 | 167 | ||||||||||
Balance at the end of the period | 259 | 271 | 259 | 271 | 273 | ||||||||
Allowance for Loan Losses: | |||||||||||||
Individually evaluated for impairment | 5 | 0 | |||||||||||
Collectively evaluated for impairment | 254 | 271 | |||||||||||
Total ending allowance balance | 259 | 271 | 271 | 273 | 271 | 273 | 243 | 259 | 271 | ||||
Loans: | |||||||||||||
Individually evaluated for impairment | 5 | 0 | |||||||||||
Collectively evaluated for impairment | 24,547 | 26,964 | |||||||||||
Total | 24,552 | 26,964 | |||||||||||
Unallocated | |||||||||||||
Changes in allowance | |||||||||||||
Balance at the beginning of the period | 495 | 390 | 495 | 390 | 776 | ||||||||
Charge-offs | 0 | 0 | 0 | ||||||||||
Recoveries | 0 | 0 | 0 | ||||||||||
Provision for loan losses | 269 | 105 | (386) | ||||||||||
Balance at the end of the period | 764 | 495 | 764 | 495 | 390 | ||||||||
Allowance for Loan Losses: | |||||||||||||
Individually evaluated for impairment | 0 | 0 | |||||||||||
Collectively evaluated for impairment | 764 | 495 | |||||||||||
Total ending allowance balance | 764 | 495 | 495 | 390 | $ 495 | $ 390 | 776 | 764 | 495 | ||||
Residential Real Estate Mortgage | Financing receivable | Owners of rental properties | |||||||||||||
Changes in allowance | |||||||||||||
Concentration of loans (as a percent) | 14.61% | 15.16% | |||||||||||
Residential Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | |||||||||||||
Changes in allowance | |||||||||||||
Balance at the beginning of the period | 5,679 | 5,383 | $ 5,679 | $ 5,383 | 5,116 | ||||||||
Charge-offs | (276) | (578) | (39) | ||||||||||
Recoveries | 74 | 55 | 15 | ||||||||||
Provision for loan losses | 139 | 819 | 291 | ||||||||||
Balance at the end of the period | 5,616 | 5,679 | 5,616 | 5,679 | 5,383 | ||||||||
Allowance for Loan Losses: | |||||||||||||
Individually evaluated for impairment | 168 | 367 | |||||||||||
Collectively evaluated for impairment | 5,448 | 5,312 | |||||||||||
Total ending allowance balance | 5,616 | 5,679 | 5,679 | 5,383 | $ 5,679 | $ 5,383 | 5,116 | 5,616 | 5,679 | ||||
Loans: | |||||||||||||
Individually evaluated for impairment | 4,210 | 3,732 | |||||||||||
Collectively evaluated for impairment | 618,169 | 593,345 | |||||||||||
Total | 622,379 | 597,077 | |||||||||||
Commercial Real Estate Mortgage | Financing receivable | Owners of rental properties | |||||||||||||
Changes in allowance | |||||||||||||
Concentration of loans (as a percent) | 12.24% | 13.57% | |||||||||||
Commercial Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | |||||||||||||
Changes in allowance | |||||||||||||
Balance at the beginning of the period | 4,277 | 4,975 | $ 4,277 | $ 4,975 | 4,217 | ||||||||
Charge-offs | (56) | (58) | (93) | ||||||||||
Recoveries | 0 | 1 | 8 | ||||||||||
Provision for loan losses | (174) | (641) | 843 | ||||||||||
Balance at the end of the period | 4,047 | 4,277 | 4,047 | 4,277 | 4,975 | ||||||||
Allowance for Loan Losses: | |||||||||||||
Individually evaluated for impairment | 1,720 | 1,721 | |||||||||||
Collectively evaluated for impairment | 2,327 | 2,556 | |||||||||||
Total ending allowance balance | 4,047 | 4,277 | 4,277 | 4,975 | 4,277 | 4,975 | 4,217 | 4,047 | 4,277 | ||||
Loans: | |||||||||||||
Individually evaluated for impairment | 11,664 | 9,446 | |||||||||||
Collectively evaluated for impairment | 360,031 | 322,573 | |||||||||||
Total | 371,695 | 332,019 | |||||||||||
Construction Real Estate Mortgage | Real Estate Mortgage Portfolio Segment | |||||||||||||
Changes in allowance | |||||||||||||
Balance at the beginning of the period | 155 | 178 | 155 | 178 | 160 | ||||||||
Charge-offs | 0 | 0 | (2) | ||||||||||
Recoveries | 7 | 9 | 9 | ||||||||||
Provision for loan losses | (19) | (32) | 11 | ||||||||||
Balance at the end of the period | 143 | 155 | 143 | 155 | 178 | ||||||||
Allowance for Loan Losses: | |||||||||||||
Individually evaluated for impairment | 0 | 0 | |||||||||||
Collectively evaluated for impairment | 143 | 155 | |||||||||||
Total ending allowance balance | $ 143 | $ 155 | $ 155 | $ 178 | $ 155 | $ 178 | $ 160 | 143 | 155 | ||||
Loans: | |||||||||||||
Individually evaluated for impairment | 74 | 0 | |||||||||||
Collectively evaluated for impairment | 43,449 | 31,683 | |||||||||||
Total | $ 43,523 | $ 31,683 |
PREMISES AND EQUIPMENT (Details
PREMISES AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
PREMISES AND EQUIPMENT | |||
Gross premises and equipment | $ 42,031 | $ 40,121 | |
Less accumulated depreciation and amortization | 14,451 | 12,735 | |
Net premises and equipment | 27,580 | 27,386 | |
Depreciation and amortization | 2,515 | 2,632 | $ 3,146 |
Land | |||
PREMISES AND EQUIPMENT | |||
Gross premises and equipment | 7,111 | 7,107 | |
Premises | |||
PREMISES AND EQUIPMENT | |||
Gross premises and equipment | 21,640 | 20,808 | |
Furniture and equipment | |||
PREMISES AND EQUIPMENT | |||
Gross premises and equipment | 10,369 | 9,895 | |
Leasehold improvements | |||
PREMISES AND EQUIPMENT | |||
Gross premises and equipment | 2,911 | 2,311 | |
Premises and Equipment | |||
PREMISES AND EQUIPMENT | |||
Depreciation and amortization | $ 1,789 | $ 1,659 | $ 1,578 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLES - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Gross carrying value | $ 17,380,000 | $ 17,380,000 | |
Accumulated amortization | 276,000 | 276,000 | |
Goodwill | 17,104,000 | 17,104,000 | |
Goodwill impairment loss | 0 | $ 0 | $ 0 |
Core Deposit Intangible | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | 413,000 | ||
Accumulated amortization | 1,468,000 | ||
Trade Name Intangible | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | 30,000 | ||
Accumulated amortization | 103,000 | ||
Book of Business Intangible | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | 719,000 | ||
Accumulated amortization | $ 301,000 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLES - Future Amortization Expense (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Core Deposit Intangible | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2019 | $ 151 |
2020 | 117 |
2021 | 83 |
2022 | 48 |
2023 | 14 |
2024 | 0 |
2025 | 0 |
2026 | 0 |
Finite-Lived Intangible Assets, Gross | 413 |
Trade Name Intangible | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2019 | 11 |
2020 | 8 |
2021 | 6 |
2022 | 4 |
2023 | 1 |
2024 | 0 |
2025 | 0 |
2026 | 0 |
Finite-Lived Intangible Assets, Gross | 30 |
Book of Business Intangible | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2019 | 102 |
2020 | 102 |
2021 | 102 |
2022 | 102 |
2023 | 102 |
2024 | 102 |
2025 | 102 |
2026 | 5 |
Finite-Lived Intangible Assets, Gross | $ 719 |
TIME DEPOSITS (Details)
TIME DEPOSITS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Banking and Thrift [Abstract] | |||
Time deposits of $250,000 or more | $ 49,826,000 | $ 43,262,000 | |
Interest expense related to time deposits of $100,000 or more | 2,238,000 | $ 1,479,000 | $ 1,305,000 |
Scheduled maturities on time deposits of $100,000 or more | |||
Three months or less | 38,367,000 | ||
Three months to six months | 28,102,000 | ||
Six months to twelve months | 23,534,000 | ||
Over twelve months | 83,750,000 | ||
Total | 173,753,000 | ||
Total time deposit maturities | |||
2019 | 133,985,000 | ||
2020 | 74,062,000 | ||
2021 | 57,159,000 | ||
2022 | 14,878,000 | ||
2023 | 5,225,000 | ||
Thereafter | 1,302,000 | ||
Total | $ 286,611,000 |
SHORT-TERM BORROWINGS - Schedul
SHORT-TERM BORROWINGS - Schedule of Short-term borrowings (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
SHORT-TERM BORROWINGS | |||
Balance at year end | $ 167,865,000 | $ 100,748,000 | |
Line of Credit | |||
SHORT-TERM BORROWINGS | |||
Additional lines of credit available from correspondent banks other than the FHLB | 57,000,000 | ||
Repurchase Agreements | |||
SHORT-TERM BORROWINGS | |||
Balance at year end | 5,662,000 | 7,878,000 | $ 13,241,000 |
Maximum amount outstanding at any month end | 8,431,000 | 13,782,000 | 17,827,000 |
Average balance outstanding during the year | $ 7,043,000 | $ 10,425,000 | $ 15,394,000 |
Weighted-average interest rate: At year end (as a percent) | 0.20% | 0.13% | 0.16% |
Weighted-average interest rate: Paid during the year (as a percent) | 0.13% | 0.14% | 0.18% |
Overnight | |||
SHORT-TERM BORROWINGS | |||
Balance at year end | $ 162,203,000 | $ 92,870,000 | $ 0 |
Maximum amount outstanding at any month end | 162,203,000 | 92,870,000 | 24,346,000 |
Average balance outstanding during the year | $ 78,043,000 | $ 15,559,000 | $ 3,124,000 |
Weighted-average interest rate: At year end (as a percent) | 2.62% | 1.54% | 0.00% |
Weighted-average interest rate: Paid during the year (as a percent) | 2.24% | 1.41% | 0.57% |
SHORT-TERM BORROWINGS - Contrac
SHORT-TERM BORROWINGS - Contractual Maturity of Repurchase Agreements (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Remaining Contractual Maturity of the Agreements | |||
Short-term borrowings | $ 167,865 | $ 100,748 | |
Repurchase Agreements | |||
Remaining Contractual Maturity of the Agreements | |||
Short-term borrowings | 5,662 | 7,878 | $ 13,241 |
Overnight and Continuous | |||
Remaining Contractual Maturity of the Agreements | |||
Securities borrowed, gross including not subject to master netting arrangement | 8,380 | 17,454 | |
Overnight and Continuous | Mortgage-backed securities | |||
Remaining Contractual Maturity of the Agreements | |||
Securities borrowed, gross including not subject to master netting arrangement | 778 | 1,898 | |
Overnight and Continuous | State and political securities | |||
Remaining Contractual Maturity of the Agreements | |||
Securities borrowed, gross including not subject to master netting arrangement | 1,003 | 6,894 | |
Overnight and Continuous | Other debt securities | |||
Remaining Contractual Maturity of the Agreements | |||
Securities borrowed, gross including not subject to master netting arrangement | $ 6,599 | $ 8,662 |
LONG-TERM BORROWINGS - Long-ter
LONG-TERM BORROWINGS - Long-term Borrowings with FHLB by Contractual Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
LONG-TERM BORROWINGS | ||
Outstanding long-term borrowings with the FHLB by contractual maturities | $ 138,625 | $ 70,625 |
Outstanding amount of long-term borrowings with the FHLB by contractual maturities | ||
2019 | 32,292 | |
2020 | 43,333 | |
2021 | 30,000 | |
2022 | 23,000 | |
2023 | 10,000 | |
Total | $ 138,625 | |
Weighted-Average Rate of outstanding long-term borrowings with the FHLB by contractual maturities | ||
2019 (as a percent) | 1.84% | |
2020 (as a percent) | 1.91% | |
2021 (as a percent) | 2.73% | |
2022 (as percent) | 2.24% | |
2023 (as a percent) | 3.10% | |
Variable | ||
LONG-TERM BORROWINGS | ||
Outstanding long-term borrowings with the FHLB by contractual maturities | $ 0 | 10,000 |
Variable | 2018 | ||
LONG-TERM BORROWINGS | ||
Outstanding long-term borrowings with the FHLB by contractual maturities | 0 | 10,000 |
Fixed | ||
LONG-TERM BORROWINGS | ||
Outstanding long-term borrowings with the FHLB by contractual maturities | 138,625 | 60,625 |
Fixed | 2018 | ||
LONG-TERM BORROWINGS | ||
Outstanding long-term borrowings with the FHLB by contractual maturities | 0 | 2,000 |
Fixed | 2019 | ||
LONG-TERM BORROWINGS | ||
Outstanding long-term borrowings with the FHLB by contractual maturities | 32,292 | 17,292 |
Fixed | 2020 | ||
LONG-TERM BORROWINGS | ||
Outstanding long-term borrowings with the FHLB by contractual maturities | 43,333 | 28,333 |
Fixed | 2021 | ||
LONG-TERM BORROWINGS | ||
Outstanding long-term borrowings with the FHLB by contractual maturities | 30,000 | 0 |
Fixed | 2022 | ||
LONG-TERM BORROWINGS | ||
Outstanding long-term borrowings with the FHLB by contractual maturities | 23,000 | 13,000 |
Fixed | 2023 | ||
LONG-TERM BORROWINGS | ||
Outstanding long-term borrowings with the FHLB by contractual maturities | $ 10,000 | $ 0 |
Weighted Average | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 2.21% | 1.92% |
Weighted Average | Variable | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 0.00% | 3.18% |
Weighted Average | Variable | 2018 | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 0.00% | 3.18% |
Weighted Average | Fixed | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 2.21% | 1.72% |
Weighted Average | Fixed | 2018 | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 0.00% | 1.13% |
Weighted Average | Fixed | 2019 | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 1.84% | 1.59% |
Weighted Average | Fixed | 2020 | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 1.91% | 1.71% |
Weighted Average | Fixed | 2021 | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 2.73% | 0.00% |
Weighted Average | Fixed | 2022 | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 2.24% | 1.99% |
Weighted Average | Fixed | 2023 | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 3.10% | 0.00% |
Minimum | Variable | 2018 | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 3.18% | |
Minimum | Fixed | 2018 | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 1.13% | |
Minimum | Fixed | 2019 | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 1.54% | |
Minimum | Fixed | 2020 | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 1.62% | |
Minimum | Fixed | 2021 | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 2.45% | |
Minimum | Fixed | 2022 | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 1.98% | |
Minimum | Fixed | 2023 | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 3.10% | |
Maximum | Variable | 2018 | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 3.18% | |
Maximum | Fixed | 2018 | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 1.13% | |
Maximum | Fixed | 2019 | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 2.12% | |
Maximum | Fixed | 2020 | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 2.29% | |
Maximum | Fixed | 2021 | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 3.00% | |
Maximum | Fixed | 2022 | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 2.56% | |
Maximum | Fixed | 2023 | ||
LONG-TERM BORROWINGS | ||
Long-term borrowings with the FHLB, interest rate | 3.10% |
LONG-TERM BORROWINGS - Narrativ
LONG-TERM BORROWINGS - Narrative (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
LONG-TERM BORROWINGS | ||
Capital lease, carrying amount of land | $ 827,000 | $ 827,000 |
Present value of minimum lease payments | $ 317,000 | $ 345,000 |
Capital Lease Obligations | ||
LONG-TERM BORROWINGS | ||
Interest rate for capital lease obligation | 2.75% | |
Revolving line of credit with the FHLB | Jersey Shore State Bank | ||
LONG-TERM BORROWINGS | ||
Remaining borrowing capacity | $ 139,140,000 | |
Revolving line of credit with the FHLB | Luzerne National Bank Corporation | ||
LONG-TERM BORROWINGS | ||
Remaining borrowing capacity | $ 155,139,000 |
LONG-TERM BORROWINGS - Future M
LONG-TERM BORROWINGS - Future Minimum Lease Payments (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Lease Payment | ||
2019 | $ 38,000 | |
2020 | 38,000 | |
2021 | 38,000 | |
2022 | 37,000 | |
2023 | 200,000 | |
Capital leases, future minimum payments due | 351,000 | |
Interest | ||
2019 | 9,000 | |
2020 | 7,000 | |
2021 | 7,000 | |
2022 | 6,000 | |
2023 | 5,000 | |
Capital leases, future interest payments due | 34,000 | |
Present Value of Minimum Lease Payment | ||
2019 | 29,000 | |
2020 | 31,000 | |
2021 | 31,000 | |
2022 | 31,000 | |
2023 | 195,000 | |
Present value of minimum lease payments | $ 317,000 | $ 345,000 |
INCOME TAXES - Schedule of Defe
INCOME TAXES - Schedule of Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Allowance for loan losses | $ 2,909,000 | $ 2,714,000 |
Deferred compensation | 1,339,000 | 1,235,000 |
Defined pension | 624,000 | 684,000 |
Deferred loan fees and discounts | 274,000 | 211,000 |
Investment securities allowance | 52,000 | 45,000 |
Unrealized loss on available for sale securities | 362,000 | 14,000 |
Other | 752,000 | 727,000 |
Total deferred tax assets | 6,312,000 | 5,630,000 |
Deferred tax liabilities: | ||
Investment security accretion | 104,000 | 95,000 |
Depreciation | 451,000 | 537,000 |
Amortization | 603,000 | 610,000 |
Total deferred tax liabilities | 1,158,000 | 1,242,000 |
Deferred tax asset, net | 5,154,000 | 4,388,000 |
Valuation allowance | $ 0 | $ 0 |
INCOME TAXES - Schedule of Comp
INCOME TAXES - Schedule of Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Provision or benefit for income taxes | |||||||||||
Currently payable | $ 3,143 | $ 5,690 | $ 3,054 | ||||||||
Deferred benefit | (324) | (955) | 1,543 | ||||||||
Change in corporate tax rate | 0 | 2,724 | 0 | ||||||||
Total provision | $ 640 | $ 857 | $ 733 | $ 589 | $ 3,968 | $ 1,282 | $ 1,223 | $ 986 | $ 2,819 | $ 7,459 | $ 4,597 |
INCOME TAXES - Schedule of Effe
INCOME TAXES - Schedule of Effective Income Tax Rate (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effective Income Tax Rate Reconciliation, Amount: | |||||||||||
Provision at expected rate | $ 3,681 | $ 5,859 | $ 5,804 | ||||||||
(Decrease) increase in tax resulting from | |||||||||||
Tax-exempt income | (633) | (811) | (1,092) | ||||||||
Tax credits | (177) | (177) | (312) | ||||||||
Change in corporate tax rate | 0 | 2,724 | 0 | ||||||||
Other, net | (52) | (136) | 197 | ||||||||
Total provision | $ 640 | $ 857 | $ 733 | $ 589 | $ 3,968 | $ 1,282 | $ 1,223 | $ 986 | $ 2,819 | $ 7,459 | $ 4,597 |
Effective Income Tax Rate Reconciliation, Percent: | |||||||||||
Provision at expected rate (as a percent) | 21.00% | 34.00% | 34.00% | ||||||||
(Decrease) increase in tax resulting from: | |||||||||||
Tax-exempt income (as a percent) | (3.61%) | (4.71%) | (6.40%) | ||||||||
Tax credits (as a percent) | (1.01%) | (1.03%) | (1.83%) | ||||||||
Change in corporate tax rate (as a percent) | 0.00% | 15.81% | 0.00% | ||||||||
Other, net (as a percent) | (0.30%) | (0.78%) | 1.16% | ||||||||
Effective income tax provision (benefit) and rate (as a percent) | 16.08% | 43.29% | 26.93% |
EMPLOYEE BENEFIT PLANS - Narrat
EMPLOYEE BENEFIT PLANS - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)age | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Number of consecutive years of service and average annual compensation on which benefits are based (in years) | 5 years | ||
Period of employment considered for benefit payments (in years) | 10 years | ||
Accumulated benefit obligation | $ 19,022,000 | $ 20,669,000 | |
Vesting period regarding employer contribution (in years) | 5 years | ||
Period for which the company will make payments under the Deferred Compensation Plan (in years) | 10 years | ||
Threshold age of employees under the plan for company to make payments | age | 65 | ||
Expenses incurred related to the plan | $ 370,000 | 330,000 | $ 303,000 |
Benefits paid under the plan | $ 59,000 | 79,000 | 85,000 |
Equity | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target allocation (as a percent) | 62.00% | ||
Fixed income securities | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target allocation (as a percent) | 15.00% | ||
Inflation Hedges/Real Assets | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target allocation (as a percent) | 10.00% | ||
Hedged Strategies | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target allocation (as a percent) | 10.00% | ||
Cash | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Target allocation (as a percent) | 3.00% | ||
401(k) Savings Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Contribution expense | $ 428,000 | $ 369,000 | $ 215,000 |
Pension Plan | Minimum | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Expected contribution to Pension Plan | $ 500,000 |
EMPLOYEE BENEFIT PLANS - Obliga
EMPLOYEE BENEFIT PLANS - Obligation and Funded Status (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Change in benefit obligation: | |||
Benefit obligation at beginning of year | $ 20,669 | $ 19,289 | |
Interest cost | 706 | 756 | $ 775 |
Actuarial loss | 141 | 159 | |
Benefits paid | (797) | (782) | |
Other, change in actuarial assumptions | (1,697) | 1,247 | |
Benefit obligation at end of year | 19,022 | 20,669 | 19,289 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 17,486 | 15,090 | |
Actual return on plan assets | (1,078) | 2,424 | |
Employer contribution | 750 | 750 | |
Benefits paid | (797) | (782) | |
Adjustment to fair value of plan assets | 5 | 4 | |
Fair value of plan assets at end of year | 16,366 | 17,486 | $ 15,090 |
Funded status | (2,656) | (3,183) | |
Accounts recognized on balance sheet as: | |||
Total liabilities | (2,656) | (3,183) | |
Amounts recognized in accumulated other comprehensive income (loss) consist of: | |||
Net loss | $ 6,678 | $ 6,227 |
EMPLOYEE BENEFIT PLANS - Net Pe
EMPLOYEE BENEFIT PLANS - Net Periodic Costs and Other Amounts Recognized (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net periodic pension cost: | |||
Service cost | $ 0 | $ 0 | $ 55 |
Interest cost | 706 | 756 | 775 |
Expected return on plan assets | (1,098) | (926) | (989) |
Amortization of unrecognized net loss | 165 | 174 | 153 |
Net periodic (benefit) cost | $ (227) | $ 4 | $ (6) |
EMPLOYEE BENEFIT PLANS - Assump
EMPLOYEE BENEFIT PLANS - Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Discount rate (as a percent) | 4.10% | 3.47% | 3.98% |
Weighted-average assumptions used to determine net periodic cost | |||
Discount rate (as a percent) | 3.47% | 3.98% | 4.17% |
Expected long-term return on plan assets (as a percent) | 7.00% | 7.00% | 7.00% |
EMPLOYEE BENEFIT PLANS - Weight
EMPLOYEE BENEFIT PLANS - Weighted Average Asset Allocations (Details) | Dec. 31, 2018 | Dec. 31, 2017 |
Plan's asset allocations by asset category | ||
Weighted-average asset allocations by asset category (as a percent) | 100.00% | 100.00% |
Cash | ||
Plan's asset allocations by asset category | ||
Weighted-average asset allocations by asset category (as a percent) | 4.70% | 4.96% |
Fixed income securities | ||
Plan's asset allocations by asset category | ||
Weighted-average asset allocations by asset category (as a percent) | 12.98% | 11.42% |
Equity | ||
Plan's asset allocations by asset category | ||
Weighted-average asset allocations by asset category (as a percent) | 64.26% | 66.90% |
Inflation Hedges/Real Assets | ||
Plan's asset allocations by asset category | ||
Weighted-average asset allocations by asset category (as a percent) | 5.90% | 5.82% |
Hedged Strategies | ||
Plan's asset allocations by asset category | ||
Weighted-average asset allocations by asset category (as a percent) | 12.16% | 10.90% |
EMPLOYEE BENEFIT PLANS - Fair V
EMPLOYEE BENEFIT PLANS - Fair Value Hierarchy (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | $ 16,366 | $ 17,486 | $ 15,090 |
Level I | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 16,366 | 17,486 | |
Level II | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 0 | 0 | |
Level III | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 0 | 0 | |
Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 770 | 868 | |
Cash and cash equivalents | Level I | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 770 | 868 | |
Cash and cash equivalents | Level II | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 0 | 0 | |
Cash and cash equivalents | Level III | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 0 | 0 | |
Mutual funds - taxable fixed income | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 2,120 | 1,992 | |
Mutual funds - taxable fixed income | Level I | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 2,120 | 1,992 | |
Mutual funds - taxable fixed income | Level II | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 0 | 0 | |
Mutual funds - taxable fixed income | Level III | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 0 | 0 | |
Mutual funds - domestic equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 8,550 | 9,358 | |
Mutual funds - domestic equity | Level I | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 8,550 | 9,358 | |
Mutual funds - domestic equity | Level II | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 0 | 0 | |
Mutual funds - domestic equity | Level III | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 0 | 0 | |
Mutual funds - international equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 1,970 | 2,343 | |
Mutual funds - international equity | Level I | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 1,970 | 2,343 | |
Mutual funds - international equity | Level II | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 0 | 0 | |
Mutual funds - international equity | Level III | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 0 | 0 | |
Inflation Hedges/Real Assets | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 965 | 1,019 | |
Inflation Hedges/Real Assets | Level I | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 965 | 1,019 | |
Inflation Hedges/Real Assets | Level II | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 0 | 0 | |
Inflation Hedges/Real Assets | Level III | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 0 | 0 | |
Hedged Strategies | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 1,991 | 1,906 | |
Hedged Strategies | Level I | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 1,991 | 1,906 | |
Hedged Strategies | Level II | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | 0 | 0 | |
Hedged Strategies | Level III | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets at fair value | $ 0 | $ 0 |
EMPLOYEE BENEFIT PLANS - Future
EMPLOYEE BENEFIT PLANS - Future Benefit Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Defined Benefit Plan [Abstract] | |
2019 | $ 886 |
2020 | 918 |
2021 | 910 |
2022 | 929 |
2023 | 1,000 |
2024-2028 | 5,444 |
Total | $ 10,087 |
STOCK OPTIONS - Narrative (Deta
STOCK OPTIONS - Narrative (Details) - USD ($) | Aug. 24, 2018 | Jan. 05, 2018 | Mar. 24, 2017 | Aug. 27, 2015 | Aug. 24, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted (in shares) | 149,700 | 25,000 | 70,000 | 38,750 | 174,700 | 174,700 | 70,000 | 0 | |
Granted (in dollars per share) | $ 44.21 | $ 42.03 | $ 45.87 | $ 44.21 | $ 0 | ||||
Expiration period (in years) | 10 years | ||||||||
Vesting period (in years) | 5 years | ||||||||
Options outstanding (in shares) | 23,500 | 263,700 | 93,500 | 26,500 | 34,750 | ||||
Allocated share-based compensation expense | $ 486,000 | $ 29,000 | $ 19,000 | ||||||
Employee Stock Option | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Expiration period (in years) | 10 years | 10 years | |||||||
Nonvested awards, compensation cost not yet recognized | $ 1,685,000 | ||||||||
Period for recognition (in years) | 3 years 8 months 8 days | ||||||||
Tranche One | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted (in shares) | 50,200 | 12,500 | 46,250 | 62,700 | 46,250 | ||||
Granted (in dollars per share) | $ 46 | $ 45.11 | $ 44.21 | ||||||
Expiration period (in years) | 10 years | 10 years | 10 years | ||||||
Vesting period (in years) | 3 years | 3 years | 3 years | ||||||
Options outstanding (in shares) | 50,200 | 12,500 | 41,750 | 50,200 | |||||
Tranche One | Employee Stock Option | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period (in years) | 3 years | 3 years | |||||||
Tranche Two | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted (in shares) | 99,500 | 12,500 | 23,750 | 112,000 | 23,750 | ||||
Granted (in dollars per share) | $ 46 | $ 45.11 | $ 44.21 | ||||||
Expiration period (in years) | 10 years | 10 years | 10 years | ||||||
Vesting period (in years) | 5 years | 5 years | 5 years | ||||||
Options outstanding (in shares) | 99,500 | 12,500 | 23,750 | 99,500 | |||||
Tranche Two | Employee Stock Option | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period (in years) | 5 years | 5 years |
STOCK OPTIONS - Stock Option Ac
STOCK OPTIONS - Stock Option Activity (Details) - USD ($) | Aug. 24, 2018 | Jan. 05, 2018 | Mar. 24, 2017 | Aug. 27, 2015 | Aug. 24, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Shares | |||||||||
Options outstanding, beginning of period (in shares) | 93,500 | 26,500 | 34,750 | ||||||
Granted (in shares) | 149,700 | 25,000 | 70,000 | 38,750 | 174,700 | 174,700 | 70,000 | 0 | |
Exercised (in shares) | 0 | 0 | 0 | ||||||
Forfeited (in shares) | (15,250) | (4,500) | (3,000) | (8,250) | |||||
Expired (in shares) | 0 | 0 | 0 | ||||||
Options outstanding, end of period (in shares) | 23,500 | 263,700 | 93,500 | 26,500 | 34,750 | ||||
Options exercisable at end of period (in shares) | 0 | ||||||||
Weighted Average Exercise Price | |||||||||
Options outstanding, weighted average exercise price, beginning of period (in dollars per share) | $ 43.59 | $ 42.03 | $ 42.03 | ||||||
Granted, weighted average exercise price (in dollars per share) | $ 44.21 | $ 42.03 | 45.87 | 44.21 | 0 | ||||
Exercised, weighted average exercise price (in dollars per share) | 0 | 0 | 0 | ||||||
Forfeited, weighted average exercise price (in dollars per share) | 42.76 | 44.21 | 42.03 | ||||||
Expired, weighted average exercise price (in dollars per share) | 0 | 0 | 0 | ||||||
Options outstanding, weighted average exercise price, end of period (in dollars per share) | 45.12 | $ 43.59 | $ 42.03 | $ 42.03 | |||||
Options exercisable at end of period, weighted average exercise price (in dollars per share) | $ 0 | ||||||||
Weighted Average Remaining Contractual Term and Aggregate Intrinsic Value | |||||||||
Options outstanding, weighted average remaining contractual terms (in years) | 8 years 11 months 19 days | 8 years 9 months 15 days | 8 years 7 months 28 days | 9 years 8 months 1 day | |||||
Options granted, weighted average remaining contractual terms (in years) | 9 years 6 months 21 days | 9 years 2 months 23 days | |||||||
Aggregate intrinsic value | $ 0 | $ 279,365 | $ 224,455 | $ 14,943 |
STOCK OPTIONS - Stock Options G
STOCK OPTIONS - Stock Options Granted (Details) - $ / shares | Aug. 24, 2018 | Jan. 05, 2018 | Mar. 24, 2017 | Aug. 27, 2015 | Aug. 24, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted (in shares) | 149,700 | 25,000 | 70,000 | 38,750 | 174,700 | 174,700 | 70,000 | 0 | |
Forfeited (in shares) | (15,250) | (4,500) | (3,000) | (8,250) | |||||
Outstanding (in shares) | 23,500 | 263,700 | 93,500 | 26,500 | 34,750 | ||||
Granted (in dollars per share) | $ 44.21 | $ 42.03 | $ 45.87 | $ 44.21 | $ 0 | ||||
Vesting period (in years) | 5 years | ||||||||
Expiration period (in years) | 10 years | ||||||||
Tranche One | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted (in shares) | 50,200 | 12,500 | 46,250 | 62,700 | 46,250 | ||||
Forfeited (in shares) | 0 | 0 | (4,500) | ||||||
Outstanding (in shares) | 50,200 | 12,500 | 41,750 | 50,200 | |||||
Granted (in dollars per share) | $ 46 | $ 45.11 | $ 44.21 | ||||||
Vesting period (in years) | 3 years | 3 years | 3 years | ||||||
Expiration period (in years) | 10 years | 10 years | 10 years | ||||||
Tranche Two | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted (in shares) | 99,500 | 12,500 | 23,750 | 112,000 | 23,750 | ||||
Forfeited (in shares) | 0 | 0 | 0 | ||||||
Outstanding (in shares) | 99,500 | 12,500 | 23,750 | 99,500 | |||||
Granted (in dollars per share) | $ 46 | $ 45.11 | $ 44.21 | ||||||
Vesting period (in years) | 5 years | 5 years | 5 years | ||||||
Expiration period (in years) | 10 years | 10 years | 10 years |
STOCK OPTIONS - Stock Option As
STOCK OPTIONS - Stock Option Assumptions (Details) - Employee Stock Option - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 2.68% | 1.90% |
Expected volatility | 24.78% | 27.63% |
Expected dividend yield | 2.16% | 4.20% |
Expected life (in years) | 7 years 1 month 24 days | 6 years 10 months 2 days |
Weighted average grant date fair value per option (in dollars per share) | $ 7.72 | $ 8.99 |
EMPLOYEE STOCK PURCHASE PLAN (D
EMPLOYEE STOCK PURCHASE PLAN (Details) - Employee Stock Purchase Plan ("Plan") - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares allowed to be purchased by employees (in shares) | 1,000,000 | |
Purchase price of the shares with respect to market value | 95.00% | |
Maximum percentage of base compensation | 15.00% | |
Maximum market value | $ 12,000 | |
Number of shares issued under the plan (in shares) | 2,359 | 2,230 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Directors and executive officers - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
RELATED PARTY TRANSACTIONS | ||
Threshold ownership interest for principal owners (more than) | 10.00% | |
Loan activity with executive officers, directors, principal shareholders, and associates of such persons | ||
Beginning Balance | $ 19,011 | $ 8,877 |
New Loans | 5,602 | 13,147 |
Repayments | (6,822) | (3,013) |
Ending Balance | 17,791 | 19,011 |
Deposits from related parties | $ 16,836 | $ 21,700 |
COMMITMENTS AND CONTINGENT LI_3
COMMITMENTS AND CONTINGENT LIABILITIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Future minimum rental payments under operating leases with noncancellable terms in excess of one year | |||
2019 | $ 546 | ||
2020 | 560 | ||
2021 | 563 | ||
2022 | 456 | ||
2023 | 601 | ||
Thereafter | 2,117 | ||
Total | 4,843 | ||
Rental expense for all operating leases | $ 583 | $ 584 | $ 573 |
OFF-BALANCE SHEET RISK (Details
OFF-BALANCE SHEET RISK (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments to extend credit | ||
Off Balance Sheet Risk | ||
Contract amounts representing credit risk | $ 166,417 | $ 264,982 |
Standby letters of credit | ||
Off Balance Sheet Risk | ||
Contract amounts representing credit risk | $ 10,566 | 10,406 |
Coverage period for instrument (in years) | 1 year | |
Credit exposure from the sale of assets with recourse | ||
Off Balance Sheet Risk | ||
Contract amounts representing credit risk | $ 6,152 | $ 4,893 |
CAPITAL REQUIREMENTS (Details)
CAPITAL REQUIREMENTS (Details) $ in Thousands | Dec. 31, 2018USD ($)category | Dec. 31, 2017USD ($) |
Banking and Thrift [Abstract] | ||
Capital categories established by FDICIA (in categories) | category | 5 | |
Common Equity Tier I Capital (to Risk-weighted Assets), Ratio | ||
To Be Well Capitalized (as a percent) | 6.50% | |
Total Capital (to Risk-weighted Assets), Ratio | ||
To Be Well Capitalized (as a percent) | 10.00% | |
Tier I Capital (to Risk-weighted Assets), Ratio | ||
To Be Well Capitalized (as a percent) | 8.00% | |
Tier I Capital (to Average Assets), Ratio | ||
To Be Well Capitalized (as a percent) | 5.00% | |
Jersey Shore State Bank | ||
Common Equity Tier I Capital (to Risk-weighted Assets), Amount | ||
Actual | $ 94,105 | $ 88,289 |
For Capital Adequacy Purposes | 42,866 | 39,259 |
Minimum To Maintain Capital Conservation Buffer | 60,727 | 50,164 |
To Be Well Capitalized | $ 61,917 | $ 56,707 |
Common Equity Tier I Capital (to Risk-weighted Assets), Ratio | ||
Actual (as a percent) | 9.879% | 10.12% |
For Capital Adequacy Purposes (as a percent) | 4.50% | 4.50% |
Minimum To Maintain Capital Conservation Buffer (as a percent) | 6.375% | 5.75% |
To Be Well Capitalized (as a percent) | 6.50% | 6.50% |
Total Capital (to Risk-weighted Assets), Amount | ||
Actual | $ 102,534 | $ 93,145 |
For Capital Adequacy Purposes | 76,205 | 69,791 |
Minimum To Maintain Capital Conservation Buffer | 94,066 | 80,696 |
To Be Well Capitalized | $ 95,256 | $ 87,239 |
Total Capital (to Risk-weighted Assets), Ratio | ||
Actual (as a percent) | 10.764% | 10.677% |
For Capital Adequacy Purposes (as a percent) | 8.00% | 8.00% |
Minimum To Maintain Capital Conservation Buffer (as a percent) | 9.875% | 9.25% |
To Be Well Capitalized (as a percent) | 10.00% | 10.00% |
Tier I Capital (to Risk-weighted Assets), Amount | ||
Actual | $ 94,105 | $ 88,289 |
For Capital Adequacy Purposes | 57,155 | 52,345 |
Minimum To Maintain Capital Conservation Buffer | 75,015 | 63,251 |
To Be Well Capitalized | $ 76,206 | $ 69,794 |
Tier I Capital (to Risk-weighted Assets), Ratio | ||
Actual (as a percent) | 9.879% | 10.12% |
For Capital Adequacy Purposes (as a percent) | 6.00% | 6.00% |
Minimum To Maintain Capital Conservation Buffer (as a percent) | 7.875% | 7.25% |
To Be Well Capitalized (as a percent) | 8.00% | 8.00% |
Tier I Capital (to Average Assets), Amount | ||
Actual | $ 94,105 | $ 88,289 |
For Capital Adequacy Purposes | 48,734 | 42,885 |
To Be Well Capitalized | $ 60,917 | $ 53,606 |
Tier I Capital (to Average Assets), Ratio | ||
Actual (as a percent) | 7.724% | 8.235% |
For Capital Adequacy Purposes (as a percent) | 4.00% | 4.00% |
To Be Well Capitalized (as a percent) | 5.00% | 5.00% |
Luzerne National Bank Corporation | ||
Common Equity Tier I Capital (to Risk-weighted Assets), Amount | ||
Actual | $ 35,378 | $ 31,116 |
For Capital Adequacy Purposes | 15,824 | 14,389 |
Minimum To Maintain Capital Conservation Buffer | 22,417 | 18,386 |
To Be Well Capitalized | $ 22,856 | $ 20,785 |
Common Equity Tier I Capital (to Risk-weighted Assets), Ratio | ||
Actual (as a percent) | 10.061% | 9.731% |
For Capital Adequacy Purposes (as a percent) | 4.50% | 4.50% |
Minimum To Maintain Capital Conservation Buffer (as a percent) | 6.375% | 5.75% |
To Be Well Capitalized (as a percent) | 6.50% | 6.50% |
Total Capital (to Risk-weighted Assets), Amount | ||
Actual | $ 37,283 | $ 32,533 |
For Capital Adequacy Purposes | 28,130 | 25,581 |
Minimum To Maintain Capital Conservation Buffer | 34,723 | 29,578 |
To Be Well Capitalized | $ 35,163 | $ 31,977 |
Total Capital (to Risk-weighted Assets), Ratio | ||
Actual (as a percent) | 10.603% | 10.174% |
For Capital Adequacy Purposes (as a percent) | 8.00% | 8.00% |
Minimum To Maintain Capital Conservation Buffer (as a percent) | 9.875% | 9.25% |
To Be Well Capitalized (as a percent) | 10.00% | 10.00% |
Tier I Capital (to Risk-weighted Assets), Amount | ||
Actual | $ 35,378 | $ 31,116 |
For Capital Adequacy Purposes | 21,098 | 19,186 |
Minimum To Maintain Capital Conservation Buffer | 27,691 | 23,183 |
To Be Well Capitalized | $ 28,131 | $ 25,581 |
Tier I Capital (to Risk-weighted Assets), Ratio | ||
Actual (as a percent) | 10.061% | 9.731% |
For Capital Adequacy Purposes (as a percent) | 6.00% | 6.00% |
Minimum To Maintain Capital Conservation Buffer (as a percent) | 7.875% | 7.25% |
To Be Well Capitalized (as a percent) | 8.00% | 8.00% |
Tier I Capital (to Average Assets), Amount | ||
Actual | $ 35,378 | $ 31,116 |
For Capital Adequacy Purposes | 16,350 | 14,845 |
To Be Well Capitalized | $ 20,438 | $ 18,557 |
Tier I Capital (to Average Assets), Ratio | ||
Actual (as a percent) | 8.655% | 8.384% |
For Capital Adequacy Purposes (as a percent) | 4.00% | 4.00% |
To Be Well Capitalized (as a percent) | 5.00% | 5.00% |
Penns Woods Bancorp, Inc | ||
Common Equity Tier I Capital (to Risk-weighted Assets), Amount | ||
Actual | $ 132,543 | $ 125,513 |
For Capital Adequacy Purposes | 58,601 | 50,187 |
Minimum To Maintain Capital Conservation Buffer | 83,018 | 64,128 |
To Be Well Capitalized | $ 84,646 | $ 72,493 |
Common Equity Tier I Capital (to Risk-weighted Assets), Ratio | ||
Actual (as a percent) | 10.178% | 11.254% |
For Capital Adequacy Purposes (as a percent) | 4.50% | 4.50% |
Minimum To Maintain Capital Conservation Buffer (as a percent) | 6.375% | 5.75% |
To Be Well Capitalized (as a percent) | 6.50% | 6.50% |
Total Capital (to Risk-weighted Assets), Amount | ||
Actual | $ 142,876 | $ 132,094 |
For Capital Adequacy Purposes | 104,175 | 89,223 |
Minimum To Maintain Capital Conservation Buffer | 128,591 | 103,164 |
To Be Well Capitalized | $ 130,219 | $ 111,528 |
Total Capital (to Risk-weighted Assets), Ratio | ||
Actual (as a percent) | 10.972% | 11.844% |
For Capital Adequacy Purposes (as a percent) | 8.00% | 8.00% |
Minimum To Maintain Capital Conservation Buffer (as a percent) | 9.875% | 9.25% |
To Be Well Capitalized (as a percent) | 10.00% | 10.00% |
Tier I Capital (to Risk-weighted Assets), Amount | ||
Actual | $ 132,543 | $ 125,513 |
For Capital Adequacy Purposes | 78,135 | 66,916 |
Minimum To Maintain Capital Conservation Buffer | 102,552 | 80,857 |
To Be Well Capitalized | $ 104,180 | $ 89,222 |
Tier I Capital (to Risk-weighted Assets), Ratio | ||
Actual (as a percent) | 10.178% | 11.254% |
For Capital Adequacy Purposes (as a percent) | 6.00% | 6.00% |
Minimum To Maintain Capital Conservation Buffer (as a percent) | 7.875% | 7.25% |
To Be Well Capitalized (as a percent) | 8.00% | 8.00% |
Tier I Capital (to Average Assets), Amount | ||
Actual | $ 132,543 | $ 125,513 |
For Capital Adequacy Purposes | 64,845 | 57,273 |
To Be Well Capitalized | $ 81,056 | $ 71,591 |
Tier I Capital (to Average Assets), Ratio | ||
Actual (as a percent) | 8.176% | 8.766% |
For Capital Adequacy Purposes (as a percent) | 4.00% | 4.00% |
To Be Well Capitalized (as a percent) | 5.00% | 5.00% |
REGULATORY RESTRICTIONS (Detail
REGULATORY RESTRICTIONS (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Cash and Due from Banks | ||
Restricted investment in bank stock, at fair value | $ 18,862,000 | $ 13,332,000 |
Pennsylvania Banking Code | ||
REGULATORY RESTRICTIONS | ||
Regulatory lending limit | 18,895,000 | |
Jersey Shore State Bank | ||
Cash and Due from Banks | ||
Restricted investment in bank stock, at fair value | 0 | 0 |
Jersey Shore State Bank | Pennsylvania Banking Code | ||
REGULATORY RESTRICTIONS | ||
Balance in the additional paid in capital account unavailable for dividends | 11,657,000 | |
Luzerne National Bank Corporation | ||
Cash and Due from Banks | ||
Restricted investment in bank stock, at fair value | 0 | $ 0 |
Luzerne National Bank Corporation | Pennsylvania Banking Code | ||
REGULATORY RESTRICTIONS | ||
Balance in the additional paid in capital account unavailable for dividends | $ 42,214,000 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value on a Recurring and Non-recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Recurring | Mortgage-backed securities | ||
Fair Value Measurements | ||
Total assets | $ 6,153 | $ 4,213 |
Recurring | State and political securities | ||
Fair Value Measurements | ||
Total assets | 79,541 | 56,508 |
Recurring | Other debt securities | ||
Fair Value Measurements | ||
Total assets | 48,591 | 47,906 |
Recurring | Financial institution equity securities | ||
Fair Value Measurements | ||
Total assets | 552 | 1,265 |
Recurring | Other equity securities | ||
Fair Value Measurements | ||
Total assets | 1,224 | 1,251 |
Recurring | Other equity securities, trading | ||
Fair Value Measurements | ||
Total assets | 36 | 190 |
Recurring | Level I | Mortgage-backed securities | ||
Fair Value Measurements | ||
Total assets | 0 | 0 |
Recurring | Level I | State and political securities | ||
Fair Value Measurements | ||
Total assets | 0 | 0 |
Recurring | Level I | Other debt securities | ||
Fair Value Measurements | ||
Total assets | 0 | 0 |
Recurring | Level I | Financial institution equity securities | ||
Fair Value Measurements | ||
Total assets | 552 | 1,265 |
Recurring | Level I | Other equity securities | ||
Fair Value Measurements | ||
Total assets | 1,224 | 1,251 |
Recurring | Level I | Other equity securities, trading | ||
Fair Value Measurements | ||
Total assets | 36 | 190 |
Recurring | Level II | Mortgage-backed securities | ||
Fair Value Measurements | ||
Total assets | 6,153 | 4,213 |
Recurring | Level II | State and political securities | ||
Fair Value Measurements | ||
Total assets | 79,541 | 56,508 |
Recurring | Level II | Other debt securities | ||
Fair Value Measurements | ||
Total assets | 48,591 | 47,906 |
Recurring | Level II | Financial institution equity securities | ||
Fair Value Measurements | ||
Total assets | 0 | 0 |
Recurring | Level II | Other equity securities | ||
Fair Value Measurements | ||
Total assets | 0 | 0 |
Recurring | Level II | Other equity securities, trading | ||
Fair Value Measurements | ||
Total assets | 0 | 0 |
Recurring | Level III | Mortgage-backed securities | ||
Fair Value Measurements | ||
Total assets | 0 | 0 |
Recurring | Level III | State and political securities | ||
Fair Value Measurements | ||
Total assets | 0 | 0 |
Recurring | Level III | Other debt securities | ||
Fair Value Measurements | ||
Total assets | 0 | 0 |
Recurring | Level III | Financial institution equity securities | ||
Fair Value Measurements | ||
Total assets | 0 | 0 |
Recurring | Level III | Other equity securities | ||
Fair Value Measurements | ||
Total assets | 0 | 0 |
Recurring | Level III | Other equity securities, trading | ||
Fair Value Measurements | ||
Total assets | 0 | 0 |
Non-recurring | Impaired loans | ||
Fair Value Measurements | ||
Total assets | 18,704 | 12,262 |
Non-recurring | Other real estate owned | ||
Fair Value Measurements | ||
Total assets | 402 | 143 |
Non-recurring | Level I | Impaired loans | ||
Fair Value Measurements | ||
Total assets | 0 | 0 |
Non-recurring | Level I | Other real estate owned | ||
Fair Value Measurements | ||
Total assets | 0 | 0 |
Non-recurring | Level II | Impaired loans | ||
Fair Value Measurements | ||
Total assets | 0 | 0 |
Non-recurring | Level II | Other real estate owned | ||
Fair Value Measurements | ||
Total assets | 0 | 0 |
Non-recurring | Level III | Impaired loans | ||
Fair Value Measurements | ||
Total assets | 18,704 | 12,262 |
Non-recurring | Level III | Other real estate owned | ||
Fair Value Measurements | ||
Total assets | $ 402 | $ 143 |
FAIR VALUE MEASUREMENTS - List
FAIR VALUE MEASUREMENTS - List of Significant Unobservable Inputs (Details) - Non-recurring - Level III $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Impaired loans | Discounted cash flow | ||
Listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques | ||
Impaired loans | $ 12,929 | $ 6,583 |
Impaired loans | Appraisal of collateral | ||
Listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques | ||
Impaired loans | 5,775 | 5,679 |
Other real estate owned | Appraisal of collateral | ||
Listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques | ||
Fair Value | $ 402 | $ 143 |
Measurement Input, Constant Prepayment Rate | Discounted cash flow | Minimum | ||
Listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques | ||
Impaired loans, measurement input (as a percent) | 0.07 | 0.03 |
Measurement Input, Constant Prepayment Rate | Discounted cash flow | Maximum | ||
Listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques | ||
Impaired loans, measurement input (as a percent) | (0.70) | (0.70) |
Measurement Input, Constant Prepayment Rate | Discounted cash flow | Weighted Average | ||
Listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques | ||
Impaired loans, measurement input (as a percent) | (0.06) | (0.04) |
Measurement Input, Default Rate | ||
Listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques | ||
Impaired loans, measurement input (as a percent) | 0 | |
Measurement Input, Default Rate | Discounted cash flow | ||
Listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques | ||
Impaired loans, measurement input (as a percent) | 0 | 0 |
Measurement Input, Appraised Value | Appraisal of collateral | ||
Listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques | ||
Other real estate owned, measurement input (as a percent) | (0.20) | (0.20) |
Measurement Input, Appraised Value | Appraisal of collateral | Minimum | ||
Listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques | ||
Impaired loans, measurement input (as a percent) | 0 | 0 |
Measurement Input, Appraised Value | Appraisal of collateral | Maximum | ||
Listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques | ||
Impaired loans, measurement input (as a percent) | (0.90) | (0.20) |
Measurement Input, Appraised Value | Appraisal of collateral | Weighted Average | ||
Listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques | ||
Impaired loans, measurement input (as a percent) | (0.20) | (0.17) |
Other real estate owned, measurement input (as a percent) | (0.20) | (0.20) |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financial assets | ||
Restricted investment in bank stock | $ 18,862 | $ 13,332 |
Bank-owned life insurance | 28,627 | 27,982 |
Accrued interest receivable | 5,334 | 4,321 |
Financial liabilities | ||
Interest-bearing deposits | 899,089 | 843,004 |
Noninterest-bearing deposits | 320,814 | 303,316 |
Quoted Prices in Active Markets for Identical Assets (Level I) | ||
Financial assets | ||
Cash and cash equivalents | 66,742 | 27,243 |
Restricted investment in bank stock | 18,862 | 13,332 |
Loans held for sale | 2,929 | 1,196 |
Loans, net | 0 | 0 |
Bank-owned life insurance | 28,627 | 27,982 |
Accrued interest receivable | 5,334 | 4,321 |
Financial liabilities | ||
Interest-bearing deposits | 612,478 | 611,187 |
Noninterest-bearing deposits | 320,814 | 303,316 |
Short-term borrowings | 167,865 | 100,748 |
Long-term borrowings | 0 | 0 |
Accrued interest payable | 1,150 | 502 |
Significant Other Observable Inputs (Level II) | ||
Financial assets | ||
Cash and cash equivalents | 0 | 0 |
Restricted investment in bank stock | 0 | |
Loans held for sale | 0 | 0 |
Loans, net | 0 | 0 |
Bank-owned life insurance | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Financial liabilities | ||
Interest-bearing deposits | 0 | 0 |
Noninterest-bearing deposits | 0 | 0 |
Short-term borrowings | 0 | 0 |
Long-term borrowings | 0 | 0 |
Accrued interest payable | 0 | 0 |
Significant Unobservable Inputs (Level III) | ||
Financial assets | ||
Cash and cash equivalents | 0 | 0 |
Restricted investment in bank stock | 0 | |
Loans held for sale | 0 | 0 |
Loans, net | 1,381,581 | 1,264,584 |
Bank-owned life insurance | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Financial liabilities | ||
Interest-bearing deposits | 269,630 | 227,254 |
Noninterest-bearing deposits | 0 | 0 |
Short-term borrowings | 0 | 0 |
Long-term borrowings | 137,773 | 70,280 |
Accrued interest payable | 0 | 0 |
Carrying Value | ||
Financial assets | ||
Cash and cash equivalents | 66,742 | 27,243 |
Restricted investment in bank stock | 18,862 | 13,332 |
Loans held for sale | 2,929 | 1,196 |
Loans, net | 1,370,920 | 1,233,756 |
Bank-owned life insurance | 28,627 | 27,982 |
Accrued interest receivable | 5,334 | 4,321 |
Financial liabilities | ||
Interest-bearing deposits | 899,089 | 843,004 |
Noninterest-bearing deposits | 320,814 | 303,316 |
Short-term borrowings | 167,865 | 100,748 |
Long-term borrowings | 138,942 | 70,970 |
Accrued interest payable | 1,150 | 502 |
Fair Value | ||
Financial assets | ||
Cash and cash equivalents | 66,742 | 27,243 |
Restricted investment in bank stock | 18,862 | 13,332 |
Loans held for sale | 2,929 | 1,196 |
Loans, net | 1,381,581 | 1,264,584 |
Bank-owned life insurance | 28,627 | 27,982 |
Accrued interest receivable | 5,334 | 4,321 |
Financial liabilities | ||
Interest-bearing deposits | 882,108 | 838,441 |
Noninterest-bearing deposits | 320,814 | 303,316 |
Short-term borrowings | 167,865 | 100,748 |
Long-term borrowings | 137,773 | 70,280 |
Accrued interest payable | $ 1,150 | $ 502 |
PARENT COMPANY ONLY FINANCIAL_3
PARENT COMPANY ONLY FINANCIAL STATEMENTS - Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Investment in subsidiaries: | ||
Other assets | $ 4,260 | $ 4,989 |
TOTAL ASSETS | 1,684,771 | 1,474,492 |
LIABILITIES AND SHAREHOLDERS’ EQUITY: | ||
Other liabilities | 13,367 | 17,758 |
Shareholders’ equity | 143,536 | 138,192 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 1,684,771 | 1,474,492 |
Penns Woods Bancorp, Inc | ||
ASSETS: | ||
Cash | 247 | 132 |
Investment in subsidiaries: | ||
Bank | 140,476 | 131,637 |
Non-bank | 2,694 | 5,685 |
Other assets | 295 | 889 |
TOTAL ASSETS | 143,712 | 138,343 |
LIABILITIES AND SHAREHOLDERS’ EQUITY: | ||
Other liabilities | 176 | 149 |
Shareholders’ equity | 143,536 | 138,194 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 143,712 | $ 138,343 |
PARENT COMPANY ONLY FINANCIAL_4
PARENT COMPANY ONLY FINANCIAL STATEMENTS - Condensed Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating income: | |||||||||||
Net income | $ 4,196 | $ 3,826 | $ 3,480 | $ 3,208 | $ 717 | $ 3,284 | $ 3,086 | $ 2,686 | $ 14,704 | $ 9,773 | $ 12,475 |
Comprehensive income | 13,579 | 10,545 | 11,346 | ||||||||
Penns Woods Bancorp, Inc | |||||||||||
Operating income: | |||||||||||
Dividends from subsidiaries | 9,091 | 11,352 | 10,007 | ||||||||
Equity in undistributed earnings of subsidiaries | 6,973 | (908) | 3,128 | ||||||||
Operating expenses | (1,360) | (671) | (660) | ||||||||
Net income | 14,704 | 9,773 | 12,475 | ||||||||
Comprehensive income | $ 13,579 | $ 10,545 | $ 11,346 |
PARENT COMPANY ONLY FINANCIAL_5
PARENT COMPANY ONLY FINANCIAL STATEMENTS - Condensed Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
OPERATING ACTIVITIES: | |||||||||||
Net Income | $ 4,196 | $ 3,826 | $ 3,480 | $ 3,208 | $ 717 | $ 3,284 | $ 3,086 | $ 2,686 | $ 14,704 | $ 9,773 | $ 12,475 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Other, net | (412) | 2,200 | (7) | ||||||||
Net cash provided by operating activities | 17,270 | 17,693 | 16,113 | ||||||||
FINANCING ACTIVITIES: | |||||||||||
Dividends paid | (8,818) | (8,837) | (8,903) | ||||||||
Issuance of common stock | 97 | 116 | 101 | ||||||||
Purchase of treasury stock | 0 | (1,881) | (574) | ||||||||
Net cash provided by financing activities | 199,951 | 112,983 | 15,534 | ||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 39,499 | (16,428) | 20,875 | ||||||||
CASH AND CASH EQUIVALENTS, BEGINNING | 27,243 | 43,671 | 27,243 | 43,671 | 22,796 | ||||||
CASH AND CASH EQUIVALENTS, ENDING | 66,742 | 27,243 | 66,742 | 27,243 | 43,671 | ||||||
Penns Woods Bancorp, Inc | |||||||||||
OPERATING ACTIVITIES: | |||||||||||
Net Income | 14,704 | 9,773 | 12,475 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Equity in undistributed earnings of subsidiaries | (6,973) | 908 | (3,128) | ||||||||
Other, net | 620 | (525) | 344 | ||||||||
Net cash provided by operating activities | 8,351 | 10,156 | 9,691 | ||||||||
FINANCING ACTIVITIES: | |||||||||||
Dividends paid | (8,818) | (8,837) | (8,903) | ||||||||
Issuance of common stock | 582 | 116 | 101 | ||||||||
Purchase of treasury stock | 0 | (1,881) | (574) | ||||||||
Net cash provided by financing activities | (8,236) | (10,602) | (9,376) | ||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 115 | (446) | 315 | ||||||||
CASH AND CASH EQUIVALENTS, BEGINNING | $ 132 | $ 578 | 132 | 578 | 263 | ||||||
CASH AND CASH EQUIVALENTS, ENDING | $ 247 | $ 132 | $ 247 | $ 132 | $ 578 |
CONSOLIDATED QUARTERLY FINANC_3
CONSOLIDATED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Interest income | $ 16,236 | $ 15,198 | $ 14,111 | $ 13,201 | $ 13,138 | $ 12,948 | $ 12,209 | $ 11,682 | |||
Interest expense | 3,537 | 2,943 | 2,408 | 2,048 | 1,670 | 1,496 | 1,385 | 1,346 | $ 10,936 | $ 5,897 | $ 5,567 |
NET INTEREST INCOME | 12,699 | 12,255 | 11,703 | 11,153 | 11,468 | 11,452 | 10,824 | 10,336 | 47,810 | 44,080 | 41,246 |
Provision for loan losses | 760 | 480 | 335 | 160 | 125 | 60 | 215 | 330 | 1,735 | 730 | 1,196 |
Non-interest income, excluding securities gains | 2,594 | 2,613 | 2,347 | 2,121 | 2,483 | 2,442 | 2,775 | 2,452 | 9,461 | 10,744 | 12,113 |
Securities gains (losses), net | (165) | (24) | 15 | (40) | 107 | 298 | (12) | 199 | (47) | 600 | 1,611 |
Non-interest expense | 9,532 | 9,681 | 9,517 | 9,277 | 9,248 | 9,566 | 9,063 | 8,985 | 38,007 | 36,862 | 35,091 |
INCOME BEFORE INCOME TAX PROVISION | 4,836 | 4,683 | 4,213 | 3,797 | 4,685 | 4,566 | 4,309 | 3,672 | 17,529 | 17,232 | 17,072 |
Income tax provision | 640 | 857 | 733 | 589 | 3,968 | 1,282 | 1,223 | 986 | 2,819 | 7,459 | 4,597 |
Net income | $ 4,196 | $ 3,826 | $ 3,480 | $ 3,208 | $ 717 | $ 3,284 | $ 3,086 | $ 2,686 | $ 14,704 | $ 9,773 | $ 12,475 |
Earnings per share - basic (in dollars per share) | $ 0.89 | $ 0.82 | $ 0.74 | $ 0.68 | $ 0.16 | $ 0.70 | $ 0.65 | $ 0.57 | |||
Earnings per share - diluted (in dollars per share) | $ 0.89 | $ 0.82 | $ 0.74 | $ 0.68 | $ 0.15 | $ 0.70 | $ 0.65 | $ 0.56 |
REVENUE RECOGNTION (Details)
REVENUE RECOGNTION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||
Debit card fees | $ 1,534 | $ 1,312 | $ 1,327 |
Debit card transaction fees | |||
Disaggregation of Revenue [Line Items] | |||
Debit card fees | 2,117 | 1,960 | 1,896 |
Other processing service fees | |||
Disaggregation of Revenue [Line Items] | |||
Debit card fees | 275 | 263 | 314 |
Gross interchange and card based transaction fees | |||
Disaggregation of Revenue [Line Items] | |||
Debit card fees | 2,392 | 2,223 | 2,210 |
Network costs | $ 858 | $ 911 | $ 883 |