Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | CHOICEONE FINANCIAL SERVICES INC | |
Entity Central Index Key | 0000803164 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-19202 | |
Entity Incorporation, State or Country Code | MI | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Smaller Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 7,253,576 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and due from banks | $ 45,221 | $ 59,308 |
Time deposits in other financial institutions | 250 | 250 |
Cash and cash equivalents | 45,471 | 59,558 |
Equity securities at fair value (Note 2) | 2,462 | 2,851 |
Securities available for sale (Note 2) | 361,904 | 339,579 |
Federal Home Loan Bank stock | 3,524 | 3,524 |
Federal Reserve Bank stock | 2,946 | 2,934 |
Loans held for sale | 7,385 | 3,095 |
Loans to other financial institutions | 39,421 | 51,048 |
Loans (Note 3) | 811,577 | 802,048 |
Allowance for loan losses (Note 3) | (4,790) | (4,057) |
Loans, net | 806,787 | 797,991 |
Premises and equipment, net | 24,087 | 24,265 |
Other real estate owned, net | 926 | 929 |
Cash value of life insurance policies | 32,171 | 31,979 |
Goodwill | 52,593 | 52,870 |
Core deposit intangible | 5,653 | 6,006 |
Other assets | 13,160 | 9,499 |
Total assets | 1,398,490 | 1,386,128 |
Liabilities | ||
Deposits - noninterest-bearing | 283,434 | 287,460 |
Deposits - interest-bearing | 889,965 | 867,142 |
Total deposits | 1,173,399 | 1,154,602 |
Advances from Federal Home Loan Bank | 23,188 | 33,198 |
Other liabilities | 6,101 | 6,189 |
Total liabilities | 1,202,688 | 1,193,989 |
Shareholders' Equity | ||
Preferred stock; shares authorized: 100,000; shares outstanding: none | ||
Common stock and paid-in capital, no par value; shares authorized: 12,000,000; shares outstanding: 7,249,533 at March 31, 2020 and 7,245,088 at December 31, 2019 | 162,745 | 162,610 |
Retained earnings | 29,856 | 28,051 |
Accumulated other comprehensive income, net | 3,201 | 1,478 |
Total shareholders' equity | 195,802 | 192,139 |
Total liabilities and shareholders' equity | $ 1,398,490 | $ 1,386,128 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, authorized | 100,000 | 100,000 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, authorized | 12,000,000 | 12,000,000 |
Common stock, outstanding | 7,249,533 | 7,245,088 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Interest income | ||
Loans, including fees | $ 10,075 | $ 5,280 |
Securities: | ||
Taxable | 1,857 | 760 |
Tax exempt | 368 | 369 |
Other | 194 | 68 |
Total interest income | 12,494 | 6,477 |
Interest expense | ||
Deposits | 1,385 | 851 |
Advances from Federal Home Loan Bank | 136 | 116 |
Other | 2 | 14 |
Total interest expense | 1,523 | 981 |
Net interest income | 10,971 | 5,496 |
Provision for loan losses | 775 | |
Net interest income after provision for loan losses | 10,196 | 5,496 |
Noninterest income | ||
Customer service charges | 1,845 | 1,033 |
Insurance and investment commissions | 126 | 63 |
Gains on sales of loans | 1,743 | 246 |
Net gains on sales of securities | 2 | 1 |
Net gains on sales and write-downs of other assets | 2 | 13 |
Earnings on life insurance policies | 192 | 96 |
Trust income | 170 | |
Change in market value of equity securities | (389) | 187 |
Other | 408 | 119 |
Total noninterest income | 4,099 | 1,758 |
Noninterest expense | ||
Salaries and benefits | 5,128 | 2,777 |
Occupancy and equipment | 1,270 | 771 |
Data processing | 1,484 | 556 |
Professional fees | 762 | 517 |
Supplies and postage | 225 | 100 |
Advertising and promotional | 148 | 44 |
Intangible amortization | 353 | |
FDIC insurance | 68 | |
Other | 978 | 569 |
Total noninterest expense | 10,416 | 5,334 |
Income before income tax | 3,879 | 1,920 |
Income tax expense | 625 | 283 |
Net income | $ 3,254 | $ 1,637 |
Basic earnings per share (Note 4) (in dollars per share) | $ 0.45 | $ 0.45 |
Diluted earnings per share (Note 4) (in dollars per share) | 0.45 | 0.45 |
Dividends declared per share (in dollars per share) | $ 0.20 | $ 0.20 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 3,254 | $ 1,637 |
Other comprehensive income: | ||
Changes in net unrealized gains (losses) on investment securities available for sale, net of tax expense of $458 and $323 for the three months ended March 31, 2020 and March 31, 2019, respectively | 1,725 | 1,215 |
Reclassification adjustment for realized gain on sale of investment securities available for sale included in net income, net of tax expense of $0 and $0 for the periods ended March 31, 2020 and 2019, respectively | (2) | (1) |
Other comprehensive income (loss), net of tax | 1,723 | 1,214 |
Comprehensive income | $ 4,977 | $ 2,851 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Changes in net unrealized gains (losses) on investment securities available for sale, tax expense | $ 458 | $ 323 |
Reclassification adjustment for realized gain on sale of investment securities available for sale included in net income, tax expense | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Common Stock and Paid in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss), Net [Member] | Total | |
Balance, beginning at Dec. 31, 2018 | $ 54,523 | $ 26,686 | $ (732) | $ 80,477 | |
Balance, beginning (in shares) at Dec. 31, 2018 | 3,616,483 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 1,637 | 1,637 | |||
Other comprehensive income | 1,214 | 1,214 | |||
Shares issued | $ 47 | 47 | |||
Shares issued (in shares) | 2,004 | ||||
Effect of employee stock purchases | $ 4 | 4 | |||
Stock-based compensation expense | 57 | 57 | |||
Restricted stock units issued | $ (10) | (10) | |||
Restricted stock units issued (in shares) | 1,023 | ||||
Cash dividends declared | (724) | (724) | |||
Balance, ending at Mar. 31, 2019 | $ 54,621 | 27,599 | 482 | 82,702 | |
Balance, ending (in shares) at Mar. 31, 2019 | 3,619,510 | ||||
Balance, beginning at Dec. 31, 2019 | $ 162,610 | 28,051 | 1,478 | $ 192,139 | |
Balance, beginning (in shares) at Dec. 31, 2019 | 7,245,088 | 7,245,088 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 3,254 | $ 3,254 | |||
Other comprehensive income | 1,723 | 1,723 | |||
Shares issued | $ 106 | 106 | |||
Shares issued (in shares) | 3,656 | ||||
Effect of employee stock purchases | $ 4 | 4 | |||
Stock options exercised and issued (in shares) | [1] | 789 | |||
Stock-based compensation expense | $ 25 | 25 | |||
Cash dividends declared | (1,449) | (1,449) | |||
Balance, ending at Mar. 31, 2020 | $ 162,745 | $ 29,856 | $ 3,201 | $ 195,802 | |
Balance, ending (in shares) at Mar. 31, 2020 | 7,249,533 | 7,249,533 | |||
[1] | The amount shown represents the number of shares issued in cashless transactions where some taxes are netted on a portion of the exercises. |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared, per share | $ 0.20 | $ 0.20 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 3,254 | $ 1,637 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Provision for loan losses | 775 | |
Depreciation | 563 | 351 |
Amortization | 718 | 216 |
Compensation expense on employee and director stock purchases, stock options, and restricted stock units | 112 | 79 |
Net gains on sales of securities | (2) | (1) |
Net change in market value of equity securities | 389 | (187) |
Gains on sales of loans | (1,743) | (246) |
Loans originated for sale | (32,372) | (6,944) |
Proceeds from loan sales | 29,614 | 6,279 |
Earnings on bank-owned life insurance | (192) | (96) |
(Gains)/losses on sales of other real estate owned | (8) | |
Proceeds from sales of other real estate owned | 64 | 53 |
Costs capitalized to other real estate | (19) | |
Deferred federal income tax (benefit)/expense | (281) | 6 |
Net change in: | ||
Other assets | (3,355) | (313) |
Other liabilities | (17) | (99) |
Net cash from operating activities | (2,491) | 727 |
Cash flows from investing activities: | ||
Maturities, prepayments and calls of securities available for sale | 9,633 | 4,547 |
Purchases of securities available for sale | (29,954) | (4,789) |
Loan originations and payments, net | 1,776 | (318) |
Additions to premises and equipment | (412) | (484) |
Net cash from investing activities | (18,957) | (1,044) |
Cash flows from financing activities: | ||
Net change in deposits | 18,797 | (12,564) |
Net change in fed funds purchased | (4,800) | |
Proceeds from Federal Home Loan Bank advances | 30,000 | |
Payments on Federal Home Loan Bank advances | (10,010) | (15,008) |
Issuance of common stock | 23 | 19 |
Cash dividends | (1,449) | (724) |
Net cash from financing activities | 7,361 | (3,077) |
Net change in cash and cash equivalents | (14,087) | (3,394) |
Beginning cash and cash equivalents | 59,558 | 19,690 |
Ending cash and cash equivalents | 45,471 | 16,296 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 1,508 | 1,015 |
Loans transferred to other real estate owned | $ 42 | $ 64 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include ChoiceOne Financial Services, Inc. ("ChoiceOne"), its wholly-owned subsidiary, ChoiceOne Bank, and ChoiceOne Bank’s wholly-owned subsidiary, ChoiceOne Insurance Agencies, Inc. For periods after September 30, 2020, the consolidated financial statements also include ChioceOne's wholly owned subsidiary, Lakestone Bank & Trust (together with ChoiceOne Bank, the "Banks") and Lakestone Bank & Trust's wholly-owned subsidiary, Lakestone Financial Services, Inc., as a result of the merger of County Bank Corp. with and into ChoiceOne. Intercompany transactions and balances have been eliminated in consolidation. The consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information, prevailing practices within the banking industry and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The accompanying consolidated financial statements reflect all adjustments ordinary in nature which are, in the opinion of management, necessary for a fair presentation of the Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019, the Consolidated Statements of Income for the three-month periods ended March 31, 2020 and March 31, 2019, the Consolidated Statements of Comprehensive Income for the three-month periods ended March 31, 2020 and March 31, 2019, the Consolidated Statements of Changes in Shareholders’ Equity for the three-month periods ended March 31, 2020 and March 31, 2019, and the Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2020 and March 31, 2019. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in ChoiceOne’s Annual Report on Form 10-K for the year ended December 31, 2019. Loans to Other Financial Institutions The Banks entered into agreements with another financial institution to fund mortgage loans. Loans to other financial institutions are purchased participating interests in individual advances made to mortgage bankers nation-wide from an unaffiliated originating bank. The originating bank services these loans and cash flows on the individual advances (principal, interest, and fees) which are allocated pro-rata based on ownership in the participating interest, less fees paid for the servicing activity. The underlying collateral is generally made up of 1-4 family first residential mortgages owned by the mortgage banker and held for sale in the secondary market and have been underwritten using secondary market underwriting standards prior to purchasing the participating interest. Once the mortgage banker delivers the loan to the secondary market, the advance is required to be paid off, including the Bank’s participating interest. If the advance (in which one of the Banks has a participating interest) is outstanding over 90 days, the originating bank has the right to request the participating interest be paid off by the mortgage banker. The participating interests are subject to concentration risk to 15 different mortgage bankers, with the largest creditor outstanding representing 15% of the total at March 31, 2020. Credit risk associated with the participating interest is measured as an allowance for loan loss when necessary. Losses are charged off against the allowance when incurred and recoveries of loan charge-offs are recorded when received. At least quarterly, the Banks review the portfolios of participating interests for potential losses including any participating interest that is outstanding over 90 days (even if the advance and participating interest is current). At March 31, 2020, 11 of the 322 participating interests with principal balances totaling $2.3 million had balances outstanding over 30 days. During the first three months of 2020, there were no losses or charge-offs of participating interests. Allowance for Loan Losses The allowance for loan losses is maintained at a level believed adequate by management to absorb probable incurred losses inherent in the consolidated loan portfolio. Management’s evaluation of the adequacy of the allowance is an estimate based on reviews of individual loans, assessments of the impact of current economic conditions on the portfolio and historical loss experience of seasoned loan portfolios. See Note 3 to the interim consolidated financial statements for additional information. Management believes the accounting estimate related to the allowance for loan losses is a critical accounting estimate because (1) the estimate is highly susceptible to change from period to period because of assumptions concerning the changes in the types and volumes of the portfolios and economic conditions and (2) the impact of recognizing an impairment or loan loss could have a material effect on ChoiceOne’s assets reported on the balance sheets as well as its net income. Stock Transactions A total of 2,615 shares of common stock were issued to ChoiceOne’s Board of Directors for a cash price of $83,000 under the terms of the Directors’ Stock Purchase Plan in the first quarter of 2020. A total of 1,041 shares for a cash price of $23,000 were issued under the Employee Stock Purchase Plan in the first quarter of 2020. Shares issued upon the exercise of stock options, net of shares withheld for payment for the options, totaled 789 in the first quarter of 2020. Stock-Based Compensation ChoiceOne grants restricted stock units to a select group of employees under the Stock Incentive Plan of 2012. All of the restricted stock units are initially unvested and vest in three annual installments on each of the next three anniversaries of the grant date. Certain additional vesting provisions apply. Each unit, once vested, is settled by delivery of one share of ChoiceOne common stock. Reclassifications Certain amounts presented in prior periods have been reclassified to conform to the current presentation. Recent Accounting Pronouncements The FASB issued ASU No. 2016-13 , Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments FASB pronouncement ASU 2017-04 (topic 350) is effective for fiscal years beginning after December 15, 2019. To simplify the subsequent measurement of goodwill, the Board eliminated Step 2 from the goodwill impairment test. Previously, 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 ASU 2017-04, 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 unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The Board also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. Therefore, the same impairment assessment applies to all reporting units. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. ChoiceOne performed a step zero during the current quarter and determined no impairment was necessary. Refer to testing performed in the Goodwill section below. Goodwill ChoiceOne evaluates goodwill annually for impairment. Accounting pronouncements allow a company to first perform a qualitative assessment for goodwill prior to a quantitative assessment (Step 1 assessment). If the results of the qualitative assessment indicate that it is more likely than not that goodwill is impaired, then a quantitative assessment must be performed. If not, there is no further assessment required. Management performed its annual qualitative assessment of goodwill as of June 30, 2019. As a result of the impact of the emergence of the COVID-19 pandemic in the first quarter of 2020, management believed it was prudent to perform an interim qualitative assessment as of March 31, 2020. The analysis consisted of a review of ChoiceOne’s current and expected future financial performance, the potential impact of COVID-19 on the ability of ChoiceOne’s borrowers to comply with loan terms, and the impact that reductions in both short-term and long-term interest rates have had and may continue to have on net interest margin and mortgage sales activity. The share price and book value of ChoiceOne’s stock were also compared to the prior year. Upon completion of the qualitative assessment, ChoiceOne believed that it was more likely than not that the fair value of ChoiceOne’s equity exceeded the carrying value as of March 31, 2020 and there was no further quantitative assessment necessary. If COVID-19 causes a prolonged economic downturn, ChoiceOne may perform additional interim assessments of its goodwill balance in future periods. |
SECURITIES
SECURITIES | 3 Months Ended |
Mar. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
SECURITIES | NOTE 2 – SECURITIES The fair value of equity securities and the related gross unrealized gains(losses) recognized in noninterest income were as follows: March 31, 2020 (Dollars in thousands) Amortized Gross Gross Fair Equity securities $ 2,636 $ — $ (174 ) $ 2,462 December 31, 2019 (Dollars in thousands) Amortized Gross Gross Fair Equity securities $ 2,636 $ 215 $ — $ 2,851 The fair value of securities available for sale and the related unrealized gains and losses recognized in accumulated other comprehensive income were as follows: March 31, 2020 (Dollars in thousands) Amortized Gross Gross Fair U.S. Government and federal agency $ 17,003 $ 126 $ — $ 17,129 U.S. Treasury notes and bonds 1,995 79 — 2,074 State and municipal 186,586 4,142 (589 ) 190,139 Mortgage-backed 148,577 1,707 (1,581 ) 148,703 Corporate 2,850 45 (36 ) 2,859 Trust preferred securities 1,000 — — 1,000 Total $ 358,011 $ 6,099 $ (2,206 ) $ 361,904 December 31, 2019 (Dollars in thousands) Amortized Gross Gross Fair U.S. Government and federal agency $ 17,231 $ 23 $ (39 ) $ 17,215 U.S. Treasury notes and bonds 1,994 14 — 2,008 State and municipal 172,487 2,694 (1,257 ) 173,924 Mortgage-backed 142,504 585 (329 ) 142,760 Corporate 2,649 24 (1 ) 2,672 Trust preferred securities 1,000 — — 1,000 Total $ 337,865 $ 3,340 $ (1,626 ) $ 339,579 ChoiceOne reviews its securities portfolio on a quarterly basis to determine whether unrealized losses are considered to be temporary or other-than-temporary. No other-than-temporary impairment charges were recorded in the first quarter of 2020. ChoiceOne believes that unrealized losses on securities were temporary in nature and were due to changes in interest rates and reduced market liquidity and not as a result of credit quality issues. Presented below is a schedule of maturities of securities as of March 31, 2020, the fair value of securities as of March 31, 2020 and December 31, 2019, and the weighted average yields of securities as of March 31, 2020: Securities maturing within: (Dollars in thousands) Less than 1 Year - 5 Years - More than Fair Value Fair Value U.S. Government and federal agency $ 8,015 $ 2,073 $ 7,041 $ — $ 17,129 $ 17,215 U.S. Treasury notes and bonds — 2,074 — — 2,074 2,008 State and municipal (1) 19,795 46,750 97,211 26,383 190,139 173,924 Corporate 464 2,395 — — 2,859 2,672 Trust preferred securities 1,000 — — — 1,000 1,000 Total debt securities 29,274 53,292 104,252 26,383 213,201 196,819 Mortgage-backed securities 333 85,655 60,229 2,486 148,703 142,760 Equity securities (2) — — 935 1,527 2,462 2,851 Total $ 29,607 $ 138,947 $ 165,416 $ 30,396 $ 364,366 $ 342,430 Weighted average yields: Less than 1 Year - 5 Years - More than Total U.S. Government and federal agency 1.76 % 1.98 % 2.41 % — % 2.06 % U.S. Treasury notes and bonds — 1.85 — — 1.85 State and municipal (1) 2.27 2.91 2.78 2.84 2.77 Corporate 3.10 2.74 — — 2.80 Trust preferred securities 4.50 — — — 4.50 Mortgage-backed securities 0.80 2.24 2.09 3.21 2.19 Equity securities (2) — — 4.56 — 0.76 Following is information regarding unrealized gains and losses on equity securities for the three-month periods ending March 31: Three Months Ended 2020 2019 Net gains and losses recognized during the period $ (389 ) $ 187 Less: Net gains and losses recognized during the period on securities sold — — Unrealized gains and losses recognized during the reporting period $ (389 ) $ 187 |
LOANS AND ALLOWANCE FOR LOAN LO
LOANS AND ALLOWANCE FOR LOAN LOSSES | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
LOANS AND ALLOWANCE FOR LOAN LOSSES | NOTE 3 – LOANS AND ALLOWANCE FOR LOAN LOSSES Activity in the allowance for loan losses and balances in the loan portfolio were as follows: (Dollars in thousands) Agricultural Commercial Consumer Commercial Construction Residential Unallocated Total Allowance for Loan Losses Three Months Ended March 31, 2020 Beginning balance $ 471 $ 655 $ 270 $ 1,663 $ 76 $ 640 $ 282 $ 4,057 Charge-offs — — (89 ) — — — — (89 ) Recoveries — 1 44 — — 2 — 47 Provision (124 ) 197 (5 ) 297 48 419 (57 ) 775 Ending balance $ 347 $ 853 $ 220 $ 1,960 $ 124 $ 1,061 $ 225 $ 4,790 Individually evaluated for impairment $ 98 $ — $ 1 $ 13 $ — $ 266 $ — $ 378 Collectively evaluated for impairment $ 249 $ 853 $ 219 $ 1,947 $ 124 $ 795 $ 225 $ 4,412 December 31, 2019 Individually evaluated for impairment $ 103 $ — $ 4 $ 13 $ — $ 235 $ — $ 355 Collectively evaluated for impairment $ 368 $ 655 $ 266 $ 1,650 $ 76 $ 405 $ 282 $ 3,702 Three Months Ended March 31, 2019 Beginning balance $ 481 $ 892 $ 254 $ 1,926 $ 38 $ 537 $ 545 $ 4,673 Charge-offs — — (106 ) — — — — (106 ) Recoveries — 17 143 2 — 1 — 163 Provision (57 ) (52 ) 45 (65 ) 2 20 107 — Ending balance $ 424 $ 857 $ 336 $ 1,863 $ 40 $ 558 $ 652 $ 4,730 Individually evaluated for impairment $ 85 $ 4 $ 12 $ 19 $ — $ 179 $ — $ 299 Collectively evaluated for impairment $ 339 $ 853 $ 324 $ 1,844 $ 40 $ 379 $ 652 $ 4,431 Loans March 31, 2020 Individually evaluated for impairment $ 379 $ 259 $ 16 $ 2,272 $ — $ 2,449 $ 5,375 Collectively evaluated for impairment 50,104 136,989 34,236 348,365 17,525 213,706 800,925 Acquired with deteriorated credit quality — 3,953 — 1,116 — 208 5,277 Ending balance $ 50,483 $ 141,201 $ 34,252 $ 351,753 $ 17,525 $ 216,363 $ 811,577 December 31, 2019 Individually evaluated for impairment $ 924 $ 259 $ 17 $ 2,288 $ — $ 2,434 $ 5,922 Collectively evaluated for impairment 56,415 141,583 38,524 323,358 13,411 215,106 788,397 Acquired with deteriorated credit quality — 6,241 313 733 — 442 7,729 Ending balance $ 57,339 $ 148,083 $ 38,854 $ 326,379 $ 13,411 $ 217,982 $ 802,048 The provision for loan losses was $775,000 in the first quarter of 2020, compared to $0 in the same period in the prior year. The first quarter of 2020 provision was deemed prudent due to growth in ChoiceOne’s loan portfolio, loans originated by Lakestone Bank & Trust in the two quarters since the merger with County Bank Corp., and the uncertainty of the future impact of the global coronavirus (COVID-19) pandemic upon ChoiceOne’s borrowers and their ability to repay loans. While it is difficult to predict the impact that COVID-19 will have in future quarters, ChoiceOne expects increased levels of past due loans, nonperforming loans and loan losses. The process to monitor the credit quality of ChoiceOne’s loan portfolio includes tracking (1) the risk ratings of business loans, (2) the level of classified business loans, and (3) delinquent and nonperforming consumer loans. Business loans are risk rated on a scale of 1 to 8. A description of the characteristics of the ratings follows: Risk ratings 1 and 2: These loans are considered pass credits. They exhibit good to exceptional credit risk and demonstrate the ability to repay the loan from normal business operations. Risk rating 3: These loans are considered pass credits. They exhibit acceptable credit risk and demonstrate the ability to repay the loan from normal business operations. Risk rating 4: These loans are considered pass credits. However, they have potential developing weaknesses that, if not corrected, may cause deterioration in the ability of the borrower to repay the loan. While a loss is possible for a loan with this rating, it is not anticipated. Risk rating 5: These loans are considered special mention credits. Loans in this risk rating are considered to be inadequately protected by the net worth and debt service coverage of the borrower or of any pledged collateral. These loans have well defined weaknesses that may jeopardize the borrower’s ability to repay the loan. If the weaknesses are not corrected, loss of principal and interest could be probable. Risk rating 6: These loans are considered substandard credits. These loans have well defined weaknesses, the severity of which makes collection of principal and interest in full questionable. Loans in this category may be placed on nonaccrual status. Risk rating 7: These loans are considered doubtful credits. Some loss of principal and interest has been determined to be probable. The estimate of the amount of loss could be affected by factors such as the borrower’s ability to provide additional capital or collateral. Loans in this category are on nonaccrual status. Risk rating 8: These loans are considered loss credits. They are considered uncollectible and will be charged off against the allowance for loan losses. Information regarding the Banks’ credit exposure was as follows: Corporate Credit Exposure - Credit Risk Profile By Creditworthiness Category (Dollars in thousands) Agricultural Commercial and Industrial Commercial Real Estate March 31, December 31, March 31, December 31, March 31, December 31, Risk ratings 1 and 2 $ 10,977 $ 14,173 $ 16,405 $ 14,920 $ 11,561 $ 11,051 Risk rating 3 25,759 27,163 96,714 105,656 293,759 271,120 Risk rating 4 12,906 14,530 27,005 26,152 42,244 39,934 Risk rating 5 462 1,094 804 1,081 1,310 1,332 Risk rating 6 379 379 273 274 2,879 2,942 $ 50,483 $ 57,339 $ 141,201 $ 148,083 $ 351,753 $ 326,379 Consumer Credit Exposure - Credit Risk Profile Based On Payment Activity (Dollars in thousands) Consumer Construction Real Estate Residential Real Estate March 31, December 31, March 31, December 31, March 31, December 31, Performing $ 34,236 $ 38,838 $ 17,525 $ 13,411 $ 215,434 $ 216,651 Nonperforming — — — — — — Nonaccrual 16 16 — — 929 1,331 $ 34,252 $ 38,854 $ 17,525 $ 13,411 $ 216,363 $ 217,982 There were no loans that were considered troubled debt restructurings (TDRs) that were modified during the three months ended March 31, 2020 and March 31, 2019. The Banks may There were no loans that were considered TDRs as of March 31, 2020 and 2019 where the borrower was past due with respect to principal and/or interest for 30 days or more during the three-month periods ended March 31, 2020 and March 31, 2019 that had been modified during the year prior to the default. The federal banking agencies issued an “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus” on March 22, 2020 and subsequently issued a revised statement on April 7, 2020. These statements encourage financial institutions to work constructively with borrowers affected by COVID-19, and provide that short-term modifications to loans made on a good faith basis to borrowers who were current as of the implementation date of the statements are not considered troubled debt restructurings (“TDRs”). Further, Section 4013 of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act, passed by Congress on March 27, 2020, states that COVID-19 related modifications on loans that were current as of December 31, 2019 are not TDRs. As of April 30, 2020, ChoiceOne had granted modifications on approximately 600 loans which, in reliance on the statements of federal banking agencies and the CARES Act, are not reflected as TDRs in this report. ChoiceOne anticipates that additional such modifications will be made in the second quarter of 2020. Impaired loans by loan category follow: (Dollars in thousands) Recorded Unpaid Related March 31, 2020 With no related allowance recorded Agricultural $ — $ — $ — Commercial and industrial 259 259 — Consumer — — — Construction real estate — — — Commercial real estate 1,882 1,882 — Residential real estate 76 76 — Subtotal 2,217 2,217 — With an allowance recorded Agricultural 379 477 98 Commercial and industrial — — — Consumer 16 17 1 Construction real estate — — — Commercial real estate 390 403 13 Residential real estate 2,373 2,639 266 Subtotal 3,158 3,536 378 Total Agricultural 379 477 98 Commercial and industrial 259 259 — Consumer 16 17 1 Construction real estate — — — Commercial real estate 2,272 2,285 13 Residential real estate 2,449 2,715 266 Total $ 5,375 $ 5,753 $ 378 (Dollars in thousands) Recorded Unpaid Related December 31, 2019 With no related allowance recorded Agricultural $ 545 $ 545 $ — Commercial and industrial 259 340 — Consumer — — — Construction real estate — — — Commercial real estate 1,882 2,471 — Residential real estate 42 42 — Subtotal 2,728 3,398 — With an allowance recorded Agricultural 379 439 103 Commercial and industrial — — — Consumer 17 18 4 Construction real estate — — — Commercial real estate 406 406 13 Residential real estate 2,392 2,460 235 Subtotal 3,194 3,323 355 Total Agricultural 924 984 103 Commercial and industrial 259 340 — Consumer 18 18 4 Construction real estate — — — Commercial real estate 2,287 2,877 13 Residential real estate 2,434 2,502 235 Total $ 5,922 $ 6,721 $ 355 The following schedule provides information regarding average balances of impaired loans and interest recognized on impaired loans for the three months ended March 31, 2020 and 2019: Average Interest (Dollars in thousands) Recorded Income Investment Recognized Three Months ended March 31, 2020 With no related allowance recorded Agricultural $ 272 $ — Commercial and industrial 259 — Consumer — — Construction real estate — — Commercial real estate 1,882 — Residential real estate 59 — Subtotal 2,472 — With an allowance recorded Agricultural 379 — Commercial and industrial 7 — Consumer 16 — Construction real estate — — Commercial real estate 391 7 Residential real estate 2,383 30 Subtotal 3,176 37 Total Agricultural 651 — Commercial and industrial 266 — Consumer 16 — Construction real estate — — Commercial real estate 2,273 7 Residential real estate 2,442 30 Total $ 5,648 $ 37 Average Interest (Dollars in thousands) Recorded Income Investment Recognized Three Months ended March 31, 2019 With no related allowance recorded Agricultural $ 92 $ — Commercial and industrial — — Consumer 1 — Construction real estate — — Commercial real estate 73 7 Residential real estate 203 23 Subtotal 369 30 With an allowance recorded Agricultural 391 — Commercial and industrial 23 — Consumer 76 — Construction real estate — — Commercial real estate 541 — Residential real estate 2,499 1 Subtotal 3,530 1 Total Agricultural 483 — Commercial and industrial 23 — Consumer 78 — Construction real estate — — Commercial real estate 613 7 Residential real estate 2,702 24 Total $ 3,899 $ 31 An aging analysis of loans by loan category follows: Loans Loans Loans Past Due Loans Past Due Past Due Greater 90 Days Past (Dollars in thousands) 30 to 59 60 to 89 Than 90 Loans Not Total Due and Days (1) Days (1) Days (1) Total (1) Past Due Loans Accruing March 31, 2020 Agricultural $ — $ — $ 379 $ 379 $ 50,104 $ 50,483 $ — Commercial and industrial 56 99 259 414 140,787 141,201 — Consumer 43 — — 43 34,209 34,252 — Commercial real estate 1,268 32 1,882 3,182 348,571 351,753 — Construction real estate 1,187 — — 1,187 16,338 17,525 — Residential real estate 2,152 8 229 2,389 213,974 216,363 — $ 4,706 $ 139 $ 2,749 $ 7,594 $ 803,983 $ 811,577 $ — December 31, 2019 Agricultural $ — $ 68 $ — $ 68 $ 57,271 $ 57,339 $ — Commercial and industrial 542 15 259 816 147,267 148,083 — Consumer 121 19 11 151 38,703 38,854 — Commercial real estate — — 1,882 1,882 324,497 326,379 — Construction real estate — — — — 13,411 13,411 — Residential real estate 2,466 582 393 3,441 214,541 217,982 — $ 3,129 $ 684 $ 2,545 $ 6,358 $ 795,690 $ 802,048 $ — (1) Includes nonaccrual loans. Nonaccrual loans by loan category follow: (Dollars in thousands) March 31, December 31, 2020 2019 Agricultural $ 380 $ 379 Commercial and industrial 694 776 Consumer 16 16 Commercial real estate 2,139 2,185 Construction real estate — — Residential real estate 929 1,331 $ 4,158 $ 4,687 The table below details the outstanding balances of the County Bank Corp. acquired portfolio and the acquisition fair value adjustments at acquisition date (dollars in thousands): (Dollars in thousands) Acquired Acquired Acquired Impaired Non-impaired Total Loans acquired - contractual payments $ 7,729 $ 387,394 $ 395,123 Nonaccretable difference (2,928 ) — (2,928 ) Expected cash flows 4,801 387,394 392,195 Accretable yield (185 ) (1,656 ) (1,841 ) Carrying balance at acquisition date $ 4,616 $ 385,738 $ 390,354 The table below presents a rollforward of the accretable yield on acquired loans for the three months ended March 31, 2020 (dollars in thousands): (Dollars in thousands) Acquired Acquired Acquired Impaired Non-impaired Total Balance, January 1, 2020 $ 185 $ 1,581 $ 1,766 Accretion income — (50 ) (50 ) Balance, March 31, 2020 $ 185 $ 1,531 $ 1,716 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 4 – EARNINGS PER SHARE Earnings per share are based on the weighted average number of shares outstanding during the period. A computation of basic earnings per share and diluted earnings per share follows: Three Months Ended (Dollars in thousands, except share data) March 31, 2020 2019 Basic Net income $ 3,254 $ 1,637 Weighted average common shares outstanding 7,247,772 3,618,328 Basic earnings per common shares $ 0.45 $ 0.45 Diluted Net income $ 3,254 $ 1,637 Weighted average common shares outstanding 7,247,772 3,618,328 Plus dilutive stock options and restricted stock units 14,633 15,720 Weighted average common shares outstanding and potentially dilutive shares 7,262,405 3,634,048 Diluted earnings per common share $ 0.45 $ 0.45 There were no stock options that were considered to be anti-dilutive to earnings per share as of March 31, 2020. There were 15,000 stock options that were considered to be anti-dilutive to earnings as of March 31, 2019 and were excluded from the calculation above. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2020 | |
Investments, All Other Investments [Abstract] | |
FINANCIAL INSTRUMENTS | Note 5 – Financial Instruments Financial instruments as of the dates indicated were as follows: Quoted Prices In Active Significant Markets for Other Significant Identical Observable Unobservable (Dollars in thousands) Carrying Estimated Assets Inputs Inputs Amount Fair Value (Level 1) (Level 2) (Level 3) March 31, 2020 Assets Cash and cash equivalents $ 45,471 $ 45,471 $ 45,471 $ — $ — Equity securities at fair value 2,462 2,462 1,055 — 1,407 Securities available for sale 361,904 361,904 — 349,352 12,552 Federal Home Loan Bank and Federal Reserve Bank stock 6,470 6,470 — 6,470 — Loans held for sale 7,385 7,606 — 7,606 — Loans to other financial institutions 39,421 39,421 — 39,421 — Loans, net 806,787 805,778 — — 805,778 Accrued interest receivable 4,682 4,682 — 4,682 — Liabilities Noninterest-bearing deposits 283,434 283,434 — 283,434 — Interest-bearing deposits 889,965 890,779 — 890,779 — Federal Home Loan Bank advances 23,188 23,204 — 23,204 — Accrued interest payable 426 426 — 426 — December 31, 2019 Assets Cash and due from banks $ 59,558 $ 59,558 $ 59,558 $ — $ — Equity securities at fair value 2,851 2,851 1,379 — 1,472 Securities available for sale 339,579 339,579 — 327,212 12,367 Federal Home Loan Bank and Federal Reserve Bank stock 6,458 6,458 — 6,458 — Loans held for sale 3,095 3,134 — 3,134 — Loans to other financial institutions 51,048 51,048 — 51,048 — Loans, net 797,991 793,270 — — 793,270 Accrued interest receivable 3,965 3,965 — 3,965 — Liabilities Noninterest-bearing deposits 287,460 287,460 — 287,460 — Interest-bearing deposits 867,142 867,154 — 867,154 — Federal Home Loan Bank advances 33,198 33,243 — 33,243 — Accrued interest payable 411 411 — 411 — |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 6 – FAIR VALUE MEASUREMENTS The following tables present information about assets and liabilities measured at fair value on a recurring basis and the valuation techniques used to determine those fair values. In general, fair values determined by Level 1 inputs use quoted prices in active markets for identical assets or liabilities that the Banks have the ability to access. Fair values determined by Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset or liability. In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The Bank’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability. There were no liabilities measured at fair value as of March 31, 2020 or December 31, 2019. Disclosures concerning assets measured at fair value are as follows: Assets Measured at Fair Value on a Recurring Basis Quoted Prices In Active Significant Markets for Other Significant Identical Observable Unobservable Balance (Dollars in thousands) Assets Inputs Inputs at Date (Level 1) (Level 2) (Level 3) Indicated Equity Securities Held at Fair Value - December 31, 2018 March 31, 2020 Equity securities $ 1,055 $ — $ 1,407 $ 2,462 Investment Securities, Available for Sale - March 31, 2020 U. S. Government and federal agency $ — $ 17,129 $ — $ 17,129 U. S. Treasury notes and bonds — 2,074 — 2,074 State and municipal — 178,587 11,552 190,139 Mortgage-backed — 148,703 — 148,703 Corporate — 2,859 — 2,859 Trust preferred securities — — 1,000 1,000 Total $ — $ 349,352 $ 12,552 $ 361,904 Equity Securities Held at Fair Value - December 31, 2018 December 31, 2019 Equity securities $ 1,379 $ — $ 1,472 $ 2,851 Investment Securities, Available for Sale - December 31, 2019 U. S. Government and federal agency $ — $ 17,215 $ — $ 17,215 U. S. Treasury notes and bonds — 2,008 — 2,008 State and municipal — 162,557 11,367 173,924 Mortgage-backed — 142,760 — 142,760 Corporate — 2,672 — 2,672 Trust preferred securities — — 1,000 1,000 Total $ — $ 327,212 $ 12,367 $ 339,579 Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis (Dollars in thousands) 2020 2019 Equity Securities Held at Fair Value Balance, January 1 $ 1,472 $ 886 Total realized and unrealized gains (losses) included in noninterest income (65 ) 77 Net purchases, sales, calls, and maturities — — Net transfers into Level 3 — — Balance, March 31 $ 1,407 $ 963 Investment Securities, Available for Sale Balance, January 1 $ 12,367 $ 8,498 Total unrealized gains (losses) included in other comprehensive income 185 97 Net purchases, sales, calls, and maturities — — Net transfers into Level 3 — — Balance, March 31 $ 12,552 $ 8,595 Of the available for sale Level 3 assets that were held by ChoiceOne at March 31, 2020, the net unrealized gain as of March 31, 2020 was $571,000, which was recognized in accumulated other comprehensive income in the consolidated balance sheet. Both observable and unobservable inputs may be used to determine the fair value of positions classified as Level 3 investment securities and liabilities. As a result, the unrealized gains and losses for these assets and liabilities presented in the tables above may include changes in fair value that were attributable to both observable and unobservable inputs. Securities categorized as Level 3 assets primarily consist of bonds issued by local municipalities and common and preferred equity securities of community banks. ChoiceOne estimates the fair value of these bonds and equity securities based on the present value of expected future cash flows using management’s best estimate of key assumptions, including forecasted interest yield and payment rates, credit quality and a discount rate commensurate with the current market and other risks involved. ChoiceOne also has assets that under certain conditions are subject to measurement at fair value on a non-recurring basis. These assets are not normally measured at fair value, but can be subject to fair value adjustments in certain circumstances, such as impairment. Disclosures concerning assets measured at fair value on a non-recurring basis are as follows: Assets Measured at Fair Value on a Non-recurring Basis Quoted Prices In Active Significant Markets for Other Significant Balances at Identical Observable Unobservable (Dollars in thousands) Dates Assets Inputs Inputs Indicated (Level 1) (Level 2) (Level 3) Impaired Loans March 31, 2020 $ 5,375 $ — $ — $ 5,375 December 31, 2019 $ 5,922 $ — $ — $ 5,922 Other Real Estate March 31, 2020 $ 926 $ — $ — $ 926 December 31, 2019 $ 929 $ — $ — $ 929 Impaired loans categorized as Level 3 assets consist of non-homogeneous loans that are considered impaired. ChoiceOne estimates the fair value of the loans based on the present value of expected future cash flows using management’s estimate of key assumptions. These assumptions include future payment ability, timing of payment streams, and estimated realizable values of available collateral (typically based on outside appraisals). The changes in fair value consisted of charge-downs of impaired loans that were posted to the allowance for loan losses and write-downs of other real estate that were posted to a valuation account. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | NOTE 7 – REVENUE FROM CONTRACTS WITH CUSTOMERS ChoiceOne has a variety of sources of revenue, which include interest and fees from customers as well as revenue from non-customers. ASC Topic 606, Revenue from Contracts With Customers, covers certain sources of revenue that are classified within noninterest income in the Consolidated Statements of Income. Sources of revenue that are included in the scope of ACS Topic 606 include service charges and fees on deposit accounts, interchange income, investment asset management income and transaction-based revenue, and other charges and fees for customer services. Service Charges and Fees on Deposit Accounts Revenue includes charges and fees to provide account maintenance, overdraft services, wire transfers, funds transfer, and other deposit-related services. Account maintenance fees such as monthly charges are recognized over the period of time that the service is provided. Transaction fees such as wire transfer charges are recognized when the service is provided to the customer. Interchange Income Revenue includes debit card interchange and network revenues. This revenue is earned on debit card transactions that are conducted through payment networks such as MasterCard. The revenue is recorded as services are delivered and is presented net of interchange expenses. Investment Commission Income Revenue includes fees from investment management advisory services and revenue is recognized when services are rendered. Revenue also includes commissions received from the placement of brokerage transactions for purchase or sale of stocks or other investments. Commission income is recognized when the transaction has been completed. Trust Fee Income Revenue includes fees from investment management advisory services and revenue is recognized when services are rendered. Revenue also includes commissions received from the placement of brokerage transactions for purchase or sale of stocks or other investments. Commission income is recognized when the transaction has been completed. Following is noninterest income separated by revenue within the scope of ASC 606 and revenue within the scope of other GAAP topics: Three Months Ended March 31, (Dollars in thousands) 2020 2019 Service charges and fees on deposit accounts $ 1,009 $ 628 Interchange income 836 405 Investment commission income 119 50 Trust fee income 170 — Other charges and fees for customer services 147 63 Noninterest income from contracts with customers within the scope of ASC 606 2,282 1,146 Noninterest income within the scope of other GAAP topics 1,818 612 Total noninterest income $ 4,099 $ 1,758 |
BUSINESS COMBINATION
BUSINESS COMBINATION | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATION | NOTE 8 – BUSINESS COMBINATION On January 6, 2020, ChoiceOne entered into an Agreement and Plan of Merger with Community Shores Bank Corporation (“Community Shores”), the holding company for Community Shores Bank. Under the terms of the merger agreement, Community Shores will be merged with and into ChoiceOne, with ChoiceOne as the surviving corporation. Completion of the merger is subject to receipt of shareholder approval of Community Shores, receipt of regulatory approval, and the satisfaction of other customary closing conditions. Management expects the merger to become effective in the second half of 2020. As of December 31, 2019, Community Shores had total assets of approximately $202 million, total loans of approximately $154 million, and total deposits of approximately $181 million. ChoiceOne completed the merger of County Bank Corp (“County”) with and into ChoiceOne effective on October 1, 2019. County had 14 branch offices and one loan production office as of the date of the merger. Total assets of County as of October 1, 2019 were $673 million, including total loans of $424 million. Deposits garnered in the merger, the majority of which were core deposits, totaled $574 million. The results of operations as a result of the merger have been included in ChoiceOne’s results since the effective date of the merger. As consideration in the merger, ChoiceOne issued 3,603,872 shares of ChoiceOne common stock, which was net of 299 fractional shares not issued, with an approximate value of $108 million. ChoiceOne recorded a preliminary deposit based intangible of $6.4 million and goodwill of $39.1 million. While ChoiceOne believes the majority of the business combination and purchase accounting activity is complete, it is expected there will be minor adjustments in the normal course within the allotted GAAP adjustment period. Measurement period adjustments of $502,000 for deferred taxes and $238,000 for loan fair values were recorded during the first quarter of 2020 as acquisition date estimates for these amounts were finalized. Purchase accounting activity still being analyzed primarily includes certain tax implications. In the first quarter of 2020, the balances of Federal Reserve Bank stock, loan mark-to-market fair values, and deferred taxes were adjusted. The table below presents the allocation of purchase price for the merger with County (dollars in thousands): Net assets acquired: Cash and cash equivalents 20,638 Equity securities at fair value 474 Securities available for sale 187,230 Federal Home Loan Bank and Federal Reserve Bank stock 2,915 Loans to other financial institutions 33,481 Originated loans 390,116 Premises and equipment 9,271 Other real estate owned 1,364 Deposit based intangible 6,359 Bank owned life insurance 16,912 Other assets 4,002 Total assets 672,762 Non-interest bearing deposits 124,113 Interest bearing deposits 449,488 Total deposits 573,601 Federal funds purchased 3,800 Advances from Federal Home Loan Bank 23,000 Other liabilities 3,282 Total liabilities 603,683 Net assets acquired 69,079 Goodwill $ 38,866 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include ChoiceOne Financial Services, Inc. ("ChoiceOne"), its wholly-owned subsidiary, ChoiceOne Bank, and ChoiceOne Bank’s wholly-owned subsidiary, ChoiceOne Insurance Agencies, Inc. For periods after September 30, 2020, the consolidated financial statements also include ChioceOne's wholly owned subsidiary, Lakestone Bank & Trust (together with ChoiceOne Bank, the "Banks") and Lakestone Bank & Trust's wholly-owned subsidiary, Lakestone Financial Services, Inc., as a result of the merger of County Bank Corp. with and into ChoiceOne. Intercompany transactions and balances have been eliminated in consolidation. The consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information, prevailing practices within the banking industry and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The accompanying consolidated financial statements reflect all adjustments ordinary in nature which are, in the opinion of management, necessary for a fair presentation of the Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019, the Consolidated Statements of Income for the three-month periods ended March 31, 2020 and March 31, 2019, the Consolidated Statements of Comprehensive Income for the three-month periods ended March 31, 2020 and March 31, 2019, the Consolidated Statements of Changes in Shareholders’ Equity for the three-month periods ended March 31, 2020 and March 31, 2019, and the Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2020 and March 31, 2019. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in ChoiceOne’s Annual Report on Form 10-K for the year ended December 31, 2019. |
Loans to Other Financial Institutions | Loans to Other Financial Institutions The Banks entered into agreements with another financial institution to fund mortgage loans. Loans to other financial institutions are purchased participating interests in individual advances made to mortgage bankers nation-wide from an unaffiliated originating bank. The originating bank services these loans and cash flows on the individual advances (principal, interest, and fees) which are allocated pro-rata based on ownership in the participating interest, less fees paid for the servicing activity. The underlying collateral is generally made up of 1-4 family first residential mortgages owned by the mortgage banker and held for sale in the secondary market and have been underwritten using secondary market underwriting standards prior to purchasing the participating interest. Once the mortgage banker delivers the loan to the secondary market, the advance is required to be paid off, including the Bank’s participating interest. If the advance (in which one of the Banks has a participating interest) is outstanding over 90 days, the originating bank has the right to request the participating interest be paid off by the mortgage banker. The participating interests are subject to concentration risk to 15 different mortgage bankers, with the largest creditor outstanding representing 15% of the total at March 31, 2020. Credit risk associated with the participating interest is measured as an allowance for loan loss when necessary. Losses are charged off against the allowance when incurred and recoveries of loan charge-offs are recorded when received. At least quarterly, the Banks review the portfolios of participating interests for potential losses including any participating interest that is outstanding over 90 days (even if the advance and participating interest is current). At March 31, 2020, 11 of the 322 participating interests with principal balances totaling $2.3 million had balances outstanding over 30 days. During the first three months of 2020, there were no losses or charge-offs of participating interests. |
Allowance for Loan Losses | Allowance for Loan Losses The allowance for loan losses is maintained at a level believed adequate by management to absorb probable incurred losses inherent in the consolidated loan portfolio. Management’s evaluation of the adequacy of the allowance is an estimate based on reviews of individual loans, assessments of the impact of current economic conditions on the portfolio and historical loss experience of seasoned loan portfolios. See Note 3 to the interim consolidated financial statements for additional information. Management believes the accounting estimate related to the allowance for loan losses is a “critical accounting estimate” because (1) the estimate is highly susceptible to change from period to period because of assumptions concerning the changes in the types and volumes of the portfolios and economic conditions and (2) the impact of recognizing an impairment or loan loss could have a material effect on ChoiceOne’s assets reported on the balance sheets as well as its net income. |
Stock Transactions | Stock Transactions A total of 2,615 shares of common stock were issued to ChoiceOne’s Board of Directors for a cash price of $83,000 under the terms of the Directors’ Stock Purchase Plan in the first quarter of 2020. A total of 1,041 shares for a cash price of $23,000 were issued under the Employee Stock Purchase Plan in the first quarter of 2020. Shares issued upon the exercise of stock options, net of shares withheld for payment for the options, totaled 789 in the first quarter of 2020. |
Stock-Based Compensation | Stock-Based Compensation ChoiceOne grants restricted stock units to a select group of employees under the Stock Incentive Plan of 2012. All of the restricted stock units are initially unvested and vest in three annual installments on each of the next three anniversaries of the grant date. Certain additional vesting provisions apply. Each unit, once vested, is settled by delivery of one share of ChoiceOne common stock. |
Reclassifications | Reclassifications Certain amounts presented in prior periods have been reclassified to conform to the current presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The FASB issued ASU No. 2016-13 , Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments FASB pronouncement ASU 2017-04 (topic 350) is effective for fiscal years beginning after December 15, 2019. To simplify the subsequent measurement of goodwill, the Board eliminated Step 2 from the goodwill impairment test. Previously, 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 ASU 2017-04, 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 unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The Board also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. Therefore, the same impairment assessment applies to all reporting units. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. ChoiceOne performed a step zero during the current quarter and determined no impairment was necessary. Refer to testing performed in the Goodwill section below. |
Goodwill | Goodwill ChoiceOne evaluates goodwill annually for impairment. Accounting pronouncements allow a company to first perform a qualitative assessment for goodwill prior to a quantitative assessment (Step 1 assessment). If the results of the qualitative assessment indicate that it is more likely than not that goodwill is impaired, then a quantitative assessment must be performed. If not, there is no further assessment required. Management performed its annual qualitative assessment of goodwill as of June 30, 2019. As a result of the impact of the emergence of the COVID-19 pandemic in the first quarter of 2020, management believed it was prudent to perform an interim qualitative assessment as of March 31, 2020. The analysis consisted of a review of ChoiceOne’s current and expected future financial performance, the potential impact of COVID-19 on the ability of ChoiceOne’s borrowers to comply with loan terms, and the impact that reductions in both short-term and long-term interest rates have had and may continue to have on net interest margin and mortgage sales activity. The share price and book value of ChoiceOne’s stock were also compared to the prior year. Upon completion of the qualitative assessment, ChoiceOne believed that it was more likely than not that the fair value of ChoiceOne’s equity exceeded the carrying value as of March 31, 2020 and there was no further quantitative assessment necessary. If COVID-19 causes a prolonged economic downturn, ChoiceOne may perform additional interim assessments of its goodwill balance in future periods. |
SECURITIES (Tables)
SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of fair value of securities and related gross unrealized gains and losses recognized in noninterest income | The fair value of equity securities and the related gross unrealized gains(losses) recognized in noninterest income were as follows: March 31, 2020 (Dollars in thousands) Amortized Gross Gross Fair Equity securities $ 2,636 $ — $ (174 ) $ 2,462 December 31, 2019 (Dollars in thousands) Amortized Gross Gross Fair Equity securities $ 2,636 $ 215 $ — $ 2,851 |
Schedule of fair value of securities available for sale and related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) | The fair value of securities available for sale and the related unrealized gains and losses recognized in accumulated other comprehensive income were as follows: March 31, 2020 (Dollars in thousands) Amortized Gross Gross Fair U.S. Government and federal agency $ 17,003 $ 126 $ — $ 17,129 U.S. Treasury notes and bonds 1,995 79 — 2,074 State and municipal 186,586 4,142 (589 ) 190,139 Mortgage-backed 148,577 1,707 (1,581 ) 148,703 Corporate 2,850 45 (36 ) 2,859 Trust preferred securities 1,000 — — 1,000 Total $ 358,011 $ 6,099 $ (2,206 ) $ 361,904 December 31, 2019 (Dollars in thousands) Amortized Gross Gross Fair U.S. Government and federal agency $ 17,231 $ 23 $ (39 ) $ 17,215 U.S. Treasury notes and bonds 1,994 14 — 2,008 State and municipal 172,487 2,694 (1,257 ) 173,924 Mortgage-backed 142,504 585 (329 ) 142,760 Corporate 2,649 24 (1 ) 2,672 Trust preferred securities 1,000 — — 1,000 Total $ 337,865 $ 3,340 $ (1,626 ) $ 339,579 |
Schedule of maturities, fair value and weighted average yields of securities | Presented below is a schedule of maturities of securities as of March 31, 2020, the fair value of securities as of March 31, 2020 and December 31, 2019, and the weighted average yields of securities as of March 31, 2020: Securities maturing within: (Dollars in thousands) Less than 1 Year - 5 Years - More than Fair Value Fair Value U.S. Government and federal agency $ 8,015 $ 2,073 $ 7,041 $ — $ 17,129 $ 17,215 U.S. Treasury notes and bonds — 2,074 — — 2,074 2,008 State and municipal (1) 19,795 46,750 97,211 26,383 190,139 173,924 Corporate 464 2,395 — — 2,859 2,672 Trust preferred securities 1,000 — — — 1,000 1,000 Total debt securities 29,274 53,292 104,252 26,383 213,201 196,819 Mortgage-backed securities 333 85,655 60,229 2,486 148,703 142,760 Equity securities (2) — — 935 1,527 2,462 2,851 Total $ 29,607 $ 138,947 $ 165,416 $ 30,396 $ 364,366 $ 342,430 Weighted average yields: Less than 1 Year - 5 Years - More than Total U.S. Government and federal agency 1.76 % 1.98 % 2.41 % — % 2.06 % U.S. Treasury notes and bonds — 1.85 — — 1.85 State and municipal (1) 2.27 2.91 2.78 2.84 2.77 Corporate 3.10 2.74 — — 2.80 Trust preferred securities 4.50 — — — 4.50 Mortgage-backed securities 0.80 2.24 2.09 3.21 2.19 Equity securities (2) — — 4.56 — 0.76 |
Schedule of unrealized gains and losses on equity securities | Following is information regarding unrealized gains and losses on equity securities for the three-month periods ending March 31: Three Months Ended 2020 2019 Net gains and losses recognized during the period $ (389 ) $ 187 Less: Net gains and losses recognized during the period on securities sold — — Unrealized gains and losses recognized during the reporting period on securities still held at the reporting date $ (389 ) $ 187 |
LOANS AND ALLOWANCE FOR LOAN _2
LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Schedule of activity in the allowance for loan losses and balances in the loan portfolio | Activity in the allowance for loan losses and balances in the loan portfolio were as follows: (Dollars in thousands) Agricultural Commercial Consumer Commercial Construction Residential Unallocated Total Allowance for Loan Losses Three Months Ended March 31, 2020 Beginning balance $ 471 $ 655 $ 270 $ 1,663 $ 76 $ 640 $ 282 $ 4,057 Charge-offs — — (89 ) — — — — (89 ) Recoveries — 1 44 — — 2 — 47 Provision (124 ) 197 (5 ) 297 48 419 (57 ) 775 Ending balance $ 347 $ 853 $ 220 $ 1,960 $ 124 $ 1,061 $ 225 $ 4,790 Individually evaluated for impairment $ 98 $ — $ 1 $ 13 $ — $ 266 $ — $ 378 Collectively evaluated for impairment $ 249 $ 853 $ 219 $ 1,947 $ 124 $ 795 $ 225 $ 4,412 December 31, 2019 Individually evaluated for impairment $ 103 $ — $ 4 $ 13 $ — $ 235 $ — $ 355 Collectively evaluated for impairment $ 368 $ 655 $ 266 $ 1,650 $ 76 $ 405 $ 282 $ 3,702 Three Months Ended March 31, 2019 Beginning balance $ 481 $ 892 $ 254 $ 1,926 $ 38 $ 537 $ 545 $ 4,673 Charge-offs — — (106 ) — — — — (106 ) Recoveries — 17 143 2 — 1 — 163 Provision (57 ) (52 ) 45 (65 ) 2 20 107 — Ending balance $ 424 $ 857 $ 336 $ 1,863 $ 40 $ 558 $ 652 $ 4,730 Individually evaluated for impairment $ 85 $ 4 $ 12 $ 19 $ — $ 179 $ — $ 299 Collectively evaluated for impairment $ 339 $ 853 $ 324 $ 1,844 $ 40 $ 379 $ 652 $ 4,431 Loans March 31, 2020 Individually evaluated for impairment $ 379 $ 259 $ 16 $ 2,272 $ — $ 2,449 $ 5,375 Collectively evaluated for impairment 50,104 136,989 34,236 348,365 17,525 213,706 800,925 Acquired with deteriorated credit quality — 3,953 — 1,116 — 208 5,277 Ending balance $ 50,483 $ 141,201 $ 34,252 $ 351,753 $ 17,525 $ 216,363 $ 811,577 December 31, 2019 Individually evaluated for impairment $ 924 $ 259 $ 17 $ 2,288 $ — $ 2,434 $ 5,922 Collectively evaluated for impairment 56,415 141,583 38,524 323,358 13,411 215,106 788,397 Acquired with deteriorated credit quality — 6,241 313 733 — 442 7,729 Ending balance $ 57,339 $ 148,083 $ 38,854 $ 326,379 $ 13,411 $ 217,982 $ 802,048 |
Schedule of the bank's credit exposure | Information regarding the Banks’ credit exposure was as follows: Corporate Credit Exposure - Credit Risk Profile By Creditworthiness Category (Dollars in thousands) Agricultural Commercial and Industrial Commercial Real Estate March 31, December 31, March 31, December 31, March 31, December 31, Risk ratings 1 and 2 $ 10,977 $ 14,173 $ 16,405 $ 14,920 $ 11,561 $ 11,051 Risk rating 3 25,759 27,163 96,714 105,656 293,759 271,120 Risk rating 4 12,906 14,530 27,005 26,152 42,244 39,934 Risk rating 5 462 1,094 804 1,081 1,310 1,332 Risk rating 6 379 379 273 274 2,879 2,942 $ 50,483 $ 57,339 $ 141,201 $ 148,083 $ 351,753 $ 326,379 Consumer Credit Exposure - Credit Risk Profile Based On Payment Activity (Dollars in thousands) Consumer Construction Real Estate Residential Real Estate March 31, December 31, March 31, December 31, March 31, December 31, Performing $ 34,236 $ 38,838 $ 17,525 $ 13,411 $ 215,434 $ 216,651 Nonperforming — — — — — — Nonaccrual 16 16 — — 929 1,331 $ 34,252 $ 38,854 $ 17,525 $ 13,411 $ 216,363 $ 217,982 |
Schedule of impaired loans | Impaired loans by loan category follow: (Dollars in thousands) Recorded Unpaid Related March 31, 2020 With no related allowance recorded Agricultural $ — $ — $ — Commercial and industrial 259 259 — Consumer — — — Construction real estate — — — Commercial real estate 1,882 1,882 — Residential real estate 76 76 — Subtotal 2,217 2,217 — With an allowance recorded Agricultural 379 477 98 Commercial and industrial — — — Consumer 16 17 1 Construction real estate — — — Commercial real estate 390 403 13 Residential real estate 2,373 2,639 266 Subtotal 3,158 3,536 378 Total Agricultural 379 477 98 Commercial and industrial 259 259 — Consumer 16 17 1 Construction real estate — — — Commercial real estate 2,272 2,285 13 Residential real estate 2,449 2,715 266 Total $ 5,375 $ 5,753 $ 378 (Dollars in thousands) Recorded Unpaid Related December 31, 2019 With no related allowance recorded Agricultural $ 545 $ 545 $ — Commercial and industrial 259 340 — Consumer — — — Construction real estate — — — Commercial real estate 1,882 2,471 — Residential real estate 42 42 — Subtotal 2,728 3,398 — With an allowance recorded Agricultural 379 439 103 Commercial and industrial — — — Consumer 17 18 4 Construction real estate — — — Commercial real estate 406 406 13 Residential real estate 2,392 2,460 235 Subtotal 3,194 3,323 355 Total Agricultural 924 984 103 Commercial and industrial 259 340 — Consumer 18 18 4 Construction real estate — — — Commercial real estate 2,287 2,877 13 Residential real estate 2,434 2,502 235 Total $ 5,922 $ 6,721 $ 355 The following schedule provides information regarding average balances of impaired loans and interest recognized on impaired loans for the three months ended March 31, 2020 and 2019: Average Interest (Dollars in thousands) Recorded Income Investment Recognized Three Months ended March 31, 2020 With no related allowance recorded Agricultural $ 272 $ — Commercial and industrial 259 — Consumer — — Construction real estate — — Commercial real estate 1,882 — Residential real estate 59 — Subtotal 2,472 — With an allowance recorded Agricultural 379 — Commercial and industrial 7 — Consumer 16 — Construction real estate — — Commercial real estate 391 7 Residential real estate 2,383 30 Subtotal 3,176 37 Total Agricultural 651 — Commercial and industrial 266 — Consumer 16 — Construction real estate — — Commercial real estate 2,273 7 Residential real estate 2,442 30 Total $ 5,648 $ 37 Average Interest (Dollars in thousands) Recorded Income Investment Recognized Three Months ended March 31, 2019 With no related allowance recorded Agricultural $ 92 $ — Commercial and industrial — — Consumer 1 — Construction real estate — — Commercial real estate 73 7 Residential real estate 203 23 Subtotal 369 30 With an allowance recorded Agricultural 391 — Commercial and industrial 23 — Consumer 76 — Construction real estate — — Commercial real estate 541 — Residential real estate 2,499 1 Subtotal 3,530 1 Total Agricultural 483 — Commercial and industrial 23 — Consumer 78 — Construction real estate — — Commercial real estate 613 7 Residential real estate 2,702 24 Total $ 3,899 $ 31 |
Schedule of aging analysis of loans by loan category | An aging analysis of loans by loan category follows: Loans Loans Loans Past Due Loans Past Due Past Due Greater 90 Days Past (Dollars in thousands) 30 to 59 60 to 89 Than 90 Loans Not Total Due and Days (1) Days (1) Days (1) Total (1) Past Due Loans Accruing March 31, 2020 Agricultural $ — $ — $ 379 $ 379 $ 50,104 $ 50,483 $ — Commercial and industrial 56 99 259 414 140,787 141,201 — Consumer 43 — — 43 34,209 34,252 — Commercial real estate 1,268 32 1,882 3,182 348,571 351,753 — Construction real estate 1,187 — — 1,187 16,338 17,525 — Residential real estate 2,152 8 229 2,389 213,974 216,363 — $ 4,706 $ 139 $ 2,749 $ 7,594 $ 803,983 $ 811,577 $ — December 31, 2019 Agricultural $ — $ 68 $ — $ 68 $ 57,271 $ 57,339 $ — Commercial and industrial 542 15 259 816 147,267 148,083 — Consumer 121 19 11 151 38,703 38,854 — Commercial real estate — — 1,882 1,882 324,497 326,379 — Construction real estate — — — — 13,411 13,411 — Residential real estate 2,466 582 393 3,441 214,541 217,982 — $ 3,129 $ 684 $ 2,545 $ 6,358 $ 795,690 $ 802,048 $ — (1) Includes nonaccrual loans. |
Schedule of nonaccrual loans by loan category | Nonaccrual loans by loan category follow: (Dollars in thousands) March 31, December 31, 2020 2019 Agricultural $ 380 $ 379 Commercial and industrial 694 776 Consumer 16 16 Commercial real estate 2,139 2,185 Construction real estate — — Residential real estate 929 1,331 $ 4,158 $ 4,687 |
Schedule of acquisition fair value adjustments | The table below details the outstanding balances of the County Bank Corp. acquired portfolio and the acquisition fair value adjustments at acquisition date (dollars in thousands): (Dollars in thousands) Acquired Acquired Acquired Impaired Non-impaired Total Loans acquired - contractual payments $ 7,729 $ 387,394 $ 395,123 Nonaccretable difference (2,928 ) — (2,928 ) Expected cash flows 4,801 387,394 392,195 Accretable yield (185 ) (1,656 ) (1,841 ) Carrying balance at acquisition date $ 4,616 $ 385,738 $ 390,354 The table below presents a rollforward of the accretable yield on acquired loans for the three months ended March 31, 2020 (dollars in thousands): (Dollars in thousands) Acquired Acquired Acquired Impaired Non-impaired Total Balance, January 1, 2020 $ 185 $ 1,581 $ 1,766 Accretion income — (50 ) (50 ) Balance, March 31, 2020 $ 185 $ 1,531 $ 1,716 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share | A computation of basic earnings per share and diluted earnings per share follows: Three Months Ended (Dollars in thousands, except share data) March 31, 2020 2019 Basic Net income $ 3,254 $ 1,637 Weighted average common shares outstanding 7,247,772 3,618,328 Basic earnings per common shares $ 0.45 $ 0.45 Diluted Net income $ 3,254 $ 1,637 Weighted average common shares outstanding 7,247,772 3,618,328 Plus dilutive stock options and restricted stock units 14,633 15,720 Weighted average common shares outstanding and potentially dilutive shares 7,262,405 3,634,048 Diluted earnings per common share $ 0.45 $ 0.45 |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Investments, All Other Investments [Abstract] | |
Schedule of carrying value and fair value of financial assets and liabilities | Financial instruments as of the dates indicated were as follows: Quoted Prices In Active Significant Markets for Other Significant Identical Observable Unobservable (Dollars in thousands) Carrying Estimated Assets Inputs Inputs Amount Fair Value (Level 1) (Level 2) (Level 3) March 31, 2020 Assets Cash and cash equivalents $ 45,471 $ 45,471 $ 45,471 $ — $ — Equity securities at fair value 2,462 2,462 1,055 — 1,407 Securities available for sale 361,904 361,904 — 349,352 12,552 Federal Home Loan Bank and Federal Reserve Bank stock 6,470 6,470 — 6,470 — Loans held for sale 7,385 7,606 — 7,606 — Loans to other financial institutions 39,421 39,421 — 39,421 — Loans, net 806,787 805,778 — — 805,778 Accrued interest receivable 4,682 4,682 — 4,682 — Liabilities Noninterest-bearing deposits 283,434 283,434 — 283,434 — Interest-bearing deposits 889,965 890,779 — 890,779 — Federal Home Loan Bank advances 23,188 23,204 — 23,204 — Accrued interest payable 426 426 — 426 — December 31, 2019 Assets Cash and due from banks $ 59,558 $ 59,558 $ 59,558 $ — $ — Equity securities at fair value 2,851 2,851 1,379 — 1,472 Securities available for sale 339,579 339,579 — 327,212 12,367 Federal Home Loan Bank and Federal Reserve Bank stock 6,458 6,458 — 6,458 — Loans held for sale 3,095 3,134 — 3,134 — Loans to other financial institutions 51,048 51,048 — 51,048 — Loans, net 797,991 793,270 — — 793,270 Accrued interest receivable 3,965 3,965 — 3,965 — Liabilities Noninterest-bearing deposits 287,460 287,460 — 287,460 — Interest-bearing deposits 867,142 867,154 — 867,154 — Federal Home Loan Bank advances 33,198 33,243 — 33,243 — Accrued interest payable 411 411 — 411 — |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets measured at fair value on a recurring basis | Disclosures concerning assets measured at fair value are as follows: Assets Measured at Fair Value on a Recurring Basis Quoted Prices In Active Significant Markets for Other Significant Identical Observable Unobservable Balance (Dollars in thousands) Assets Inputs Inputs at Date (Level 1) (Level 2) (Level 3) Indicated Equity Securities Held at Fair Value - December 31, 2018 March 31, 2020 Equity securities $ 1,055 $ — $ 1,407 $ 2,462 Investment Securities, Available for Sale - March 31, 2020 U. S. Government and federal agency $ — $ 17,129 $ — $ 17,129 U. S. Treasury notes and bonds — 2,074 — 2,074 State and municipal — 178,587 11,552 190,139 Mortgage-backed — 148,703 — 148,703 Corporate — 2,859 — 2,859 Trust preferred securities — — 1,000 1,000 Total $ — $ 349,352 $ 12,552 $ 361,904 Equity Securities Held at Fair Value - December 31, 2018 December 31, 2019 Equity securities $ 1,379 $ — $ 1,472 $ 2,851 Investment Securities, Available for Sale - December 31, 2019 U. S. Government and federal agency $ — $ 17,215 $ — $ 17,215 U. S. Treasury notes and bonds — 2,008 — 2,008 State and municipal — 162,557 11,367 173,924 Mortgage-backed — 142,760 — 142,760 Corporate — 2,672 — 2,672 Trust preferred securities — — 1,000 1,000 Total $ — $ 327,212 $ 12,367 $ 339,579 |
Schedule of changes in Level 3 assets measured at fair value on a recurring basis | Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis (Dollars in thousands) 2020 2019 Equity Securities Held at Fair Value Balance, January 1 $ 1,472 $ 886 Total realized and unrealized gains (losses) included in noninterest income (65 ) 77 Net purchases, sales, calls, and maturities — — Net transfers into Level 3 — — Balance, March 31 $ 1,407 $ 963 Investment Securities, Available for Sale Balance, January 1 $ 12,367 $ 8,498 Total unrealized gains (losses) included in other comprehensive income 185 97 Net purchases, sales, calls, and maturities — — Net transfers into Level 3 — — Balance, March 31 $ 12,552 $ 8,595 |
Schedule of assets measured at fair value on a nonrecurring basis | Disclosures concerning assets measured at fair value on a non-recurring basis are as follows: Assets Measured at Fair Value on a Non-recurring Basis Quoted Prices In Active Significant Markets for Other Significant Balances at Identical Observable Unobservable (Dollars in thousands) Dates Assets Inputs Inputs Indicated (Level 1) (Level 2) (Level 3) Impaired Loans March 31, 2020 $ 5,375 $ — $ — $ 5,375 December 31, 2019 $ 5,922 $ — $ — $ 5,922 Other Real Estate March 31, 2020 $ 926 $ — $ — $ 926 December 31, 2019 $ 929 $ — $ — $ 929 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of noninterest income separated by revenue within the scope of ASC 606 | NOTE 7 – REVENUE FROM CONTRACTS WITH CUSTOMERS ChoiceOne has a variety of sources of revenue, which include interest and fees from customers as well as revenue from non-customers. ASC Topic 606, Revenue from Contracts With Customers, covers certain sources of revenue that are classified within noninterest income in the Consolidated Statements of Income. Sources of revenue that are included in the scope of ACS Topic 606 include service charges and fees on deposit accounts, interchange income, investment asset management income and transaction-based revenue, and other charges and fees for customer services. Service Charges and Fees on Deposit Accounts Revenue includes charges and fees to provide account maintenance, overdraft services, wire transfers, funds transfer, and other deposit-related services. Account maintenance fees such as monthly service charges are recognized over the period of time that the service is provided. Transaction fees such as wire transfer charges are recognized when the service is provided to the customer. Interchange Income Revenue includes debit card interchange and network revenues. This revenue is earned on debit card transactions that are conducted through payment networks such as MasterCard. The revenue is recorded as services are delivered and is presented net of interchange expenses. Investment Commission Income Revenue includes fees from the investment management advisory services and revenue is recognized when services are rendered. Revenue also includes commissions received from the placement of brokerage transactions for purchase or sale of stocks or other investments. Commission income is recognized when the transaction has been completed. Trust Fee Income Revenue includes fees from the management of trust assets and from other related advisory services. Revenue is recognized when services are rendered. Following is noninterest income separated by revenue within the scope of ASC 606 and revenue within the scope of other GAAP topics: Three Months Ended March 31, (Dollars in thousands) 2020 2019 Service charges and fees on deposit accounts $ 1,009 $ 628 Interchange income 836 405 Investment commission income 119 50 Trust fee income 170 — Other charges and fees for customer services 147 63 Noninterest income from contracts with customers within the scope of ASC 606 2,282 1,146 Noninterest income within the scope of other GAAP topics 1,818 612 Total noninterest income $ 4,099 $ 1,758 |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Business Combination, Goodwill [Abstract] | |
Schedule of merger with County | The table below presents the allocation of purchase price for the merger with County (dollars in thousands): Net assets acquired: Cash and cash equivalents 20,638 Equity securities at fair value 474 Securities available for sale 187,230 Federal Home Loan Bank and Federal Reserve Bank stock 2,915 Loans to other financial institutions 33,481 Originated loans 390,116 Premises and equipment 9,271 Other real estate owned 1,364 Deposit based intangible 6,359 Bank owned life insurance 16,912 Other assets 4,002 Total assets 672,762 Non-interest bearing deposits 124,113 Interest bearing deposits 449,488 Total deposits 573,601 Federal funds purchased 3,800 Advances from Federal Home Loan Bank 23,000 Other liabilities 3,282 Total liabilities 603,683 Net assets acquired 69,079 Goodwill $ 38,866 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020USD ($)Numbershares | Mar. 31, 2019USD ($)shares | ||
Shares issued during the period | $ 106 | $ 47 | |
Common Stock and Paid in Capital [Member] | |||
Shares issued during the period, shares | shares | 3,656 | 2,004 | |
Shares issued during the period | $ 106 | $ 47 | |
Stock options exercised and issued (in shares) | shares | [1] | 789 | |
Credit Concentration Risk [Member] | Participating Interests in Mortgage Loans [Member] | |||
Number of mortgage bankers | Number | 15 | ||
Concentration risk of largest creditor | 15.00% | ||
Number of participating interest in loans to other financial instutions over 30 days | Number | 11 | ||
Number of participating interest in loans to other financial instutions | Number | 322 | ||
Participating interest in loans to other financial instutions over 30 days | $ 2,300 | ||
Employee Stock Purchase Plan [Member] | |||
Shares issued during the period, shares | shares | 1,041 | ||
Shares issued during the period | $ 23 | ||
Directors' Stock Purchase Plan [Member] | |||
Shares issued during the period, shares | shares | 2,615 | ||
Shares issued during the period | $ 83 | ||
[1] | The amount shown represents the number of shares issued in cashless transactions where some taxes are netted on a portion of the exercises. |
SECURITIES (Details)
SECURITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Investments, Debt and Equity Securities [Abstract] | ||
Amortized Cost | $ 2,636 | $ 2,636 |
Gross Unrealized Gains | 215 | |
Gross Unrealized Losses | (174) | |
Fair Value | $ 2,462 | $ 2,851 |
SECURITIES (Details 1)
SECURITIES (Details 1) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 358,011 | $ 337,865 |
Gross Unrealized Gains | 6,099 | 3,340 |
Gross Unrealized Losses | (2,206) | (1,626) |
Fair Value | 361,904 | 339,579 |
U.S. Government and Federal Agency [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 17,003 | 17,231 |
Gross Unrealized Gains | 126 | 23 |
Gross Unrealized Losses | (39) | |
Fair Value | 17,129 | 17,215 |
U.S. Treasury Notes and Bonds [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,995 | 1,994 |
Gross Unrealized Gains | 79 | 14 |
Fair Value | 2,074 | 2,008 |
State and Municipal [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 186,586 | 172,487 |
Gross Unrealized Gains | 4,142 | 2,694 |
Gross Unrealized Losses | (589) | (1,257) |
Fair Value | 190,139 | 173,924 |
Mortgage-backed [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 148,577 | 142,504 |
Gross Unrealized Gains | 1,707 | 585 |
Gross Unrealized Losses | (1,581) | (329) |
Fair Value | 148,703 | 142,760 |
Corporate [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 2,850 | 2,649 |
Gross Unrealized Gains | 45 | 24 |
Gross Unrealized Losses | (36) | (1) |
Fair Value | 2,859 | 2,672 |
Trust Preferred Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,000 | 1,000 |
Fair Value | $ 1,000 | $ 1,000 |
SECURITIES (Details 2)
SECURITIES (Details 2) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Securities fair values | ||
Less than 1 Year | $ 29,607 | |
1 Year - 5 Years | 138,947 | |
5 Years - 10 Years | 165,416 | |
More than 10 Years | 30,396 | |
Securities available for sale | 361,904 | $ 339,579 |
Equity securities at fair value | 2,462 | 2,851 |
U.S. Government and Federal Agency [Member] | ||
Securities fair values | ||
Less than 1 Year | 8,015 | |
1 Year - 5 Years | 2,073 | |
5 Years - 10 Years | 7,041 | |
Securities available for sale | $ 17,129 | 17,215 |
Weighted average yields | ||
Less than 1 year | 1.76% | |
1 year to 5 years | 1.98% | |
5 years to 10 years | 2.41% | |
Total | 2.06% | |
U.S. Treasury Notes and Bonds [Member] | ||
Securities fair values | ||
1 Year - 5 Years | $ 2,074 | |
Securities available for sale | $ 2,074 | 2,008 |
Weighted average yields | ||
1 year to 5 years | 1.85% | |
Total | 1.85% | |
State and Municipal [Member] | ||
Securities fair values | ||
Less than 1 Year | $ 19,795 | |
1 Year - 5 Years | 46,750 | |
5 Years - 10 Years | 97,211 | |
More than 10 Years | 26,383 | |
Securities available for sale | $ 190,139 | 173,924 |
Weighted average yields | ||
Less than 1 year | 2.27% | |
1 year to 5 years | 2.91% | |
5 years to 10 years | 2.78% | |
More than 10 years | 2.84% | |
Total | 2.77% | |
Corporate [Member] | ||
Securities fair values | ||
Less than 1 Year | $ 464 | |
1 Year - 5 Years | 2,395 | |
Securities available for sale | $ 2,859 | 2,672 |
Weighted average yields | ||
Less than 1 year | 3.10% | |
1 year to 5 years | 2.74% | |
Total | 2.80% | |
Trust Preferred Securities [Member] | ||
Securities fair values | ||
Less than 1 Year | $ 1,000 | |
Securities available for sale | $ 1,000 | 1,000 |
Weighted average yields | ||
Less than 1 year | 4.50% | |
Total | 4.50% | |
Mortgage-backed [Member] | ||
Securities fair values | ||
Less than 1 Year | $ 333 | |
1 Year - 5 Years | 85,655 | |
5 Years - 10 Years | 60,229 | |
More than 10 Years | 2,486 | |
Securities available for sale | $ 148,703 | 142,760 |
Weighted average yields | ||
Less than 1 year | 0.80% | |
1 year to 5 years | 2.24% | |
5 years to 10 years | 2.09% | |
More than 10 years | 3.21% | |
Total | 2.19% | |
Total Debt Securities [Member] | ||
Securities fair values | ||
Less than 1 Year | $ 29,274 | |
1 Year - 5 Years | 53,292 | |
5 Years - 10 Years | 104,252 | |
More than 10 Years | 26,383 | |
Securities available for sale | 213,201 | 196,819 |
Equity Securities [Member] | ||
Securities fair values | ||
5 Years - 10 Years | 935 | |
More than 10 Years | 1,527 | |
Securities available for sale | $ 2,462 | |
Weighted average yields | ||
5 years to 10 years | 4.56% | |
Total | 0.76% | |
Debt and Equity Securities [Member] | ||
Securities fair values | ||
Total securities | $ 364,366 | $ 342,430 |
SECURITIES (Details 3)
SECURITIES (Details 3) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | ||
Net gains and losses recognized during the period | $ (389) | $ 187 |
Unrealized gains and losses recognized during the reporting period on securities still held at the reporting date | $ (389) | $ 187 |
LOANS AND ALLOWANCE FOR LOAN _3
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Allowance for Loan Losses | ||
Beginning balance | $ 4,057 | $ 4,673 |
Charge-offs | (89) | (106) |
Recoveries | 47 | 163 |
Provision | 775 | 0 |
Ending balance | 4,790 | 4,730 |
Agricultural [Member] | ||
Allowance for Loan Losses | ||
Beginning balance | 471 | 481 |
Provision | (124) | (57) |
Ending balance | 347 | 424 |
Commercial and Industrial [Member] | ||
Allowance for Loan Losses | ||
Beginning balance | 655 | 892 |
Recoveries | 1 | 17 |
Provision | 197 | (52) |
Ending balance | 853 | 857 |
Consumer [Member] | ||
Allowance for Loan Losses | ||
Beginning balance | 270 | 254 |
Charge-offs | (89) | (106) |
Recoveries | 44 | 143 |
Provision | (5) | 45 |
Ending balance | 220 | 336 |
Commercial Real Estate [Member] | ||
Allowance for Loan Losses | ||
Beginning balance | 1,663 | 1,926 |
Recoveries | 2 | |
Provision | 297 | (65) |
Ending balance | 1,960 | 1,863 |
Construction Real Estate [Member] | ||
Allowance for Loan Losses | ||
Beginning balance | 76 | 38 |
Provision | 48 | 2 |
Ending balance | 124 | 40 |
Residential Real Estate [Member] | ||
Allowance for Loan Losses | ||
Beginning balance | 640 | 537 |
Recoveries | 2 | 1 |
Provision | 419 | 20 |
Ending balance | 1,061 | 558 |
Unallocated [Member] | ||
Allowance for Loan Losses | ||
Beginning balance | 282 | 545 |
Provision | (57) | 107 |
Ending balance | $ 225 | $ 652 |
LOANS AND ALLOWANCE FOR LOAN _4
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 1) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Allowance for Loan Losses, Individually evaluated for impairment | $ 378 | $ 355 |
Allowance for Loan Losses, Collectively evaluated for impairment | 4,412 | 3,702 |
Loans, Individually evaluated for impairment | 5,375 | 5,922 |
Loans, Collectively evaluated for impairment | 800,925 | 788,397 |
Loans, Acquired with deteriorated credit quality | 5,277 | 7,729 |
Loans, Ending balance | 811,577 | 802,048 |
Agricultural [Member] | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Allowance for Loan Losses, Individually evaluated for impairment | 98 | 103 |
Allowance for Loan Losses, Collectively evaluated for impairment | 249 | 368 |
Loans, Individually evaluated for impairment | 379 | 924 |
Loans, Collectively evaluated for impairment | 50,104 | 56,415 |
Loans, Ending balance | 50,483 | 57,339 |
Commercial and Industrial [Member] | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Allowance for Loan Losses, Collectively evaluated for impairment | 853 | 655 |
Loans, Individually evaluated for impairment | 259 | 259 |
Loans, Collectively evaluated for impairment | 136,989 | 141,583 |
Loans, Acquired with deteriorated credit quality | 3,953 | 6,241 |
Loans, Ending balance | 141,201 | 148,083 |
Consumer [Member] | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Allowance for Loan Losses, Individually evaluated for impairment | 1 | 4 |
Allowance for Loan Losses, Collectively evaluated for impairment | 219 | 266 |
Loans, Individually evaluated for impairment | 16 | 17 |
Loans, Collectively evaluated for impairment | 34,236 | 38,524 |
Loans, Acquired with deteriorated credit quality | 313 | |
Loans, Ending balance | 34,252 | 38,854 |
Commercial Real Estate [Member] | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Allowance for Loan Losses, Individually evaluated for impairment | 13 | 13 |
Allowance for Loan Losses, Collectively evaluated for impairment | 1,947 | 1,650 |
Loans, Individually evaluated for impairment | 2,272 | 2,288 |
Loans, Collectively evaluated for impairment | 348,365 | 323,358 |
Loans, Acquired with deteriorated credit quality | 1,116 | 733 |
Loans, Ending balance | 351,753 | 326,379 |
Construction Real Estate [Member] | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Allowance for Loan Losses, Collectively evaluated for impairment | 124 | 76 |
Loans, Collectively evaluated for impairment | 17,525 | 13,411 |
Loans, Ending balance | 17,525 | 13,411 |
Residential Real Estate [Member] | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Allowance for Loan Losses, Individually evaluated for impairment | 266 | 235 |
Allowance for Loan Losses, Collectively evaluated for impairment | 795 | 405 |
Loans, Individually evaluated for impairment | 2,449 | 2,434 |
Loans, Collectively evaluated for impairment | 213,706 | 215,106 |
Loans, Acquired with deteriorated credit quality | 208 | 442 |
Loans, Ending balance | 216,363 | 217,982 |
Unallocated [Member] | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Allowance for Loan Losses, Collectively evaluated for impairment | $ 225 | $ 282 |
LOANS AND ALLOWANCE FOR LOAN _5
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 2) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | $ 811,577 | $ 802,048 |
Nonaccrual past due loans | 4,158 | 4,687 |
Agricultural [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 50,483 | 57,339 |
Nonaccrual past due loans | 380 | 379 |
Agricultural [Member] | Risk ratings 1 and 2 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 10,977 | 14,173 |
Agricultural [Member] | Risk rating 3 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 25,759 | 27,163 |
Agricultural [Member] | Risk rating 4 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 12,906 | 14,530 |
Agricultural [Member] | Risk rating 5 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 462 | 1,094 |
Agricultural [Member] | Risk rating 6 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 379 | 379 |
Commercial and Industrial [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 141,201 | 148,083 |
Nonaccrual past due loans | 694 | 776 |
Commercial and Industrial [Member] | Risk ratings 1 and 2 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 16,405 | 14,920 |
Commercial and Industrial [Member] | Risk rating 3 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 96,714 | 105,656 |
Commercial and Industrial [Member] | Risk rating 4 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 27,005 | 26,152 |
Commercial and Industrial [Member] | Risk rating 5 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 804 | 1,081 |
Commercial and Industrial [Member] | Risk rating 6 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 273 | 274 |
Commercial Real Estate [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 351,753 | 326,379 |
Nonaccrual past due loans | 2,139 | 2,185 |
Commercial Real Estate [Member] | Risk ratings 1 and 2 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 11,561 | 11,051 |
Commercial Real Estate [Member] | Risk rating 3 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 293,759 | 271,120 |
Commercial Real Estate [Member] | Risk rating 4 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 42,244 | 39,934 |
Commercial Real Estate [Member] | Risk rating 5 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 1,310 | 1,332 |
Commercial Real Estate [Member] | Risk rating 6 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 2,879 | 2,942 |
Consumer [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 34,252 | 38,854 |
Nonaccrual past due loans | 16 | 16 |
Consumer [Member] | Performing [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 34,236 | 38,838 |
Construction Real Estate [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 17,525 | 13,411 |
Construction Real Estate [Member] | Performing [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 17,525 | 13,411 |
Residential Real Estate [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | 216,363 | 217,982 |
Nonaccrual past due loans | 929 | 1,331 |
Residential Real Estate [Member] | Performing [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Risk rated loans | $ 215,434 | $ 216,651 |
LOANS AND ALLOWANCE FOR LOAN _6
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 3) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Impaired Loans with no related allowance recorded | |||
Recorded Investment with no related allowance recorded | $ 2,217 | $ 2,728 | |
Unpaid Principal Balance with no related allowance recorded | 2,217 | 3,398 | |
Average Recorded Investment with no related allowance recorded | 2,472 | $ 369 | |
Interest Income Recognized with no related allowance recorded | 30 | ||
Impaired Loans with a related allowance recorded | |||
Recorded Investment with an allowance recorded | 3,158 | 3,194 | |
Unpaid Principal Balance with an allowance recorded | 3,536 | 3,323 | |
Related Allowance | 378 | 355 | |
Average Recorded Investment with an allowance recorded | 3,176 | 3,530 | |
Interest Income Recognized with an allowance recorded | 37 | 1 | |
Impaired Loans | |||
Recorded Investment | 5,375 | 5,922 | |
Unpaid Principal Balance | 5,753 | 6,721 | |
Related Allowance | 378 | 355 | |
Average Recorded Investment | 5,648 | 3,899 | |
Interest Income Recognized | 37 | 31 | |
Agricultural [Member] | |||
Impaired Loans with no related allowance recorded | |||
Recorded Investment with no related allowance recorded | 545 | ||
Unpaid Principal Balance with no related allowance recorded | 545 | ||
Average Recorded Investment with no related allowance recorded | 272 | 92 | |
Impaired Loans with a related allowance recorded | |||
Recorded Investment with an allowance recorded | 379 | 379 | |
Unpaid Principal Balance with an allowance recorded | 477 | 439 | |
Related Allowance | 98 | 103 | |
Average Recorded Investment with an allowance recorded | 379 | 391 | |
Impaired Loans | |||
Recorded Investment | 379 | 924 | |
Unpaid Principal Balance | 474 | 984 | |
Related Allowance | 98 | 103 | |
Average Recorded Investment | 651 | 483 | |
Commercial and Industrial [Member] | |||
Impaired Loans with no related allowance recorded | |||
Recorded Investment with no related allowance recorded | 259 | 259 | |
Unpaid Principal Balance with no related allowance recorded | 259 | 340 | |
Average Recorded Investment with no related allowance recorded | 259 | ||
Impaired Loans with a related allowance recorded | |||
Average Recorded Investment with an allowance recorded | 7 | 23 | |
Impaired Loans | |||
Recorded Investment | 259 | 259 | |
Unpaid Principal Balance | 259 | 340 | |
Average Recorded Investment | 266 | 23 | |
Consumer [Member] | |||
Impaired Loans with no related allowance recorded | |||
Average Recorded Investment with no related allowance recorded | 1 | ||
Impaired Loans with a related allowance recorded | |||
Recorded Investment with an allowance recorded | 16 | 17 | |
Unpaid Principal Balance with an allowance recorded | 17 | 18 | |
Related Allowance | 1 | 4 | |
Average Recorded Investment with an allowance recorded | 16 | 76 | |
Impaired Loans | |||
Recorded Investment | 16 | 18 | |
Unpaid Principal Balance | 17 | 18 | |
Related Allowance | 1 | 4 | |
Average Recorded Investment | 16 | 78 | |
Commercial Real Estate [Member] | |||
Impaired Loans with no related allowance recorded | |||
Recorded Investment with no related allowance recorded | 1,882 | 1,882 | |
Unpaid Principal Balance with no related allowance recorded | 1,882 | 2,471 | |
Average Recorded Investment with no related allowance recorded | 1,882 | 73 | |
Interest Income Recognized with no related allowance recorded | 7 | ||
Impaired Loans with a related allowance recorded | |||
Recorded Investment with an allowance recorded | 390 | 406 | |
Unpaid Principal Balance with an allowance recorded | 403 | 406 | |
Related Allowance | 13 | 13 | |
Average Recorded Investment with an allowance recorded | 391 | 541 | |
Interest Income Recognized with an allowance recorded | 7 | ||
Impaired Loans | |||
Recorded Investment | 2,272 | 2,287 | |
Unpaid Principal Balance | 2,285 | 2,877 | |
Related Allowance | 13 | 13 | |
Average Recorded Investment | 2,273 | 613 | |
Interest Income Recognized | 7 | 7 | |
Residential Real Estate [Member] | |||
Impaired Loans with no related allowance recorded | |||
Recorded Investment with no related allowance recorded | 76 | 42 | |
Unpaid Principal Balance with no related allowance recorded | 76 | 42 | |
Average Recorded Investment with no related allowance recorded | 59 | 203 | |
Interest Income Recognized with no related allowance recorded | 23 | ||
Impaired Loans with a related allowance recorded | |||
Recorded Investment with an allowance recorded | 2,373 | 2,392 | |
Unpaid Principal Balance with an allowance recorded | 2,639 | 2,460 | |
Related Allowance | 266 | 235 | |
Average Recorded Investment with an allowance recorded | 2,383 | 2,499 | |
Interest Income Recognized with an allowance recorded | 30 | 1 | |
Impaired Loans | |||
Recorded Investment | 2,449 | 2,434 | |
Unpaid Principal Balance | 2,715 | 2,502 | |
Related Allowance | 266 | $ 235 | |
Average Recorded Investment | 2,442 | 2,702 | |
Interest Income Recognized | $ 30 | $ 24 |
LOANS AND ALLOWANCE FOR LOAN _7
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 4) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | |
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | $ 7,594 | $ 6,358 |
Loans Not Past Due | 803,983 | 795,690 | |
Total Loans | 811,577 | 802,048 | |
Agricultural [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 379 | 68 |
Loans Not Past Due | 50,104 | 57,271 | |
Total Loans | 50,483 | 57,339 | |
Commercial and Industrial [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 414 | 816 |
Loans Not Past Due | 140,787 | 147,267 | |
Total Loans | 141,201 | 148,083 | |
Consumer [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 43 | 151 |
Loans Not Past Due | 34,209 | 38,703 | |
Total Loans | 34,252 | 38,854 | |
Commercial Real Estate [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 3,182 | 1,882 |
Loans Not Past Due | 348,571 | 324,497 | |
Total Loans | 351,753 | 326,379 | |
Construction Real Estate [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 1,187 | |
Loans Not Past Due | 16,338 | 13,411 | |
Total Loans | 17,525 | 13,411 | |
Residential Real Estate [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 2,389 | 3,441 |
Loans Not Past Due | 213,974 | 214,541 | |
Total Loans | 216,363 | 217,982 | |
Greater Than 90 Days [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 2,749 | 2,545 |
Greater Than 90 Days [Member] | Agricultural [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 379 | |
Greater Than 90 Days [Member] | Commercial and Industrial [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 259 | 259 |
Greater Than 90 Days [Member] | Consumer [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 11 | |
Greater Than 90 Days [Member] | Commercial Real Estate [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 1,882 | 1,882 |
Greater Than 90 Days [Member] | Residential Real Estate [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 229 | 393 |
60 to 89 Days [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 139 | 684 |
60 to 89 Days [Member] | Agricultural [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 68 | |
60 to 89 Days [Member] | Commercial and Industrial [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 99 | 15 |
60 to 89 Days [Member] | Consumer [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 19 | |
60 to 89 Days [Member] | Commercial Real Estate [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 32 | |
60 to 89 Days [Member] | Residential Real Estate [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 8 | 582 |
30 to 59 Days [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 4,706 | 3,129 |
30 to 59 Days [Member] | Commercial and Industrial [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 56 | 542 |
30 to 59 Days [Member] | Consumer [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 43 | 121 |
30 to 59 Days [Member] | Commercial Real Estate [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 1,268 | |
30 to 59 Days [Member] | Construction Real Estate [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | 1,187 | |
30 to 59 Days [Member] | Residential Real Estate [Member] | |||
Financing Receivable, Past Due [Line Items] | |||
Past Due Total | [1] | $ 2,152 | $ 2,466 |
[1] | Includes nonaccrual loans. |
LOANS AND ALLOWANCE FOR LOAN _8
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 5) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans | $ 4,158 | $ 4,687 |
Agricultural [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans | 380 | 379 |
Commercial and Industrial [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans | 694 | 776 |
Consumer [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans | 16 | 16 |
Commercial Real Estate [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans | 2,139 | 2,185 |
Residential Real Estate [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual loans | $ 929 | $ 1,331 |
LOANS AND ALLOWANCE FOR LOAN _9
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 6) - County Bank Corp ("County") [Member] $ in Thousands | Mar. 31, 2020USD ($) |
Loans acquired - contractual payments | $ 395,123 |
Nonaccretable difference | (2,928) |
Expected cash flows | 392,195 |
Accretable yield | (1,841) |
Carrying balance at acquisition date | 390,354 |
Acquired Impaired [Member] | |
Loans acquired - contractual payments | 7,729 |
Nonaccretable difference | (2,928) |
Expected cash flows | 4,801 |
Accretable yield | (185) |
Carrying balance at acquisition date | 4,616 |
Acquired Non-Impaired [Member] | |
Loans acquired - contractual payments | 387,394 |
Expected cash flows | 387,394 |
Accretable yield | (1,656) |
Carrying balance at acquisition date | $ 385,738 |
LOANS AND ALLOWANCE FOR LOAN_10
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 7) - County Bank Corp ("County") [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Beginning balance | $ 1,766 |
Accretion income | (50) |
Ending balance | 1,716 |
Acquired Impaired [Member] | |
Beginning balance | 185 |
Ending balance | 185 |
Acquired Non-Impaired [Member] | |
Beginning balance | 1,581 |
Accretion income | (50) |
Ending balance | $ 1,531 |
LOANS AND ALLOWANCE FOR LOAN_11
LOANS AND ALLOWANCE FOR LOAN LOSSES (Details Narrative) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Apr. 30, 2020Number | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Provision for loan losses | $ | $ 775 | $ 0 | |
Subsequent Event [Member] | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Loans modified under CARES Act | Number | 600 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Basic | ||
Net income | $ 3,254 | $ 1,637 |
Weighted average common shares outstanding | 7,247,772 | 3,618,328 |
Basic earnings per common shares | $ 0.45 | $ 0.45 |
Diluted | ||
Net income | $ 3,254 | $ 1,637 |
Weighted average common shares outstanding | 7,247,772 | 3,618,328 |
Plus dilutive stock options and restricted stock units | 14,633 | 15,720 |
Weighted average common shares outstanding and potentially dilutive shares | 7,262,405 | 3,634,048 |
Diluted earnings per common share | $ 0.45 | $ 0.45 |
EARNINGS PER SHARE (Details Nar
EARNINGS PER SHARE (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Dilutive stock options excluded in calculation of earnings per share | 0 | 15,000 |
FINANCIAL INSTRUMENTS (Details)
FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Equity securities at fair value | $ 2,462 | $ 2,851 |
Securities available for sale | 361,904 | 339,579 |
Loans to other financial institutions | 39,421 | 51,048 |
Liabilities | ||
Noninterest-bearing deposits | 283,434 | 287,460 |
Interest-bearing deposits | 889,965 | 867,142 |
Carrying Amount [Member] | ||
Assets | ||
Cash and due from banks | 45,471 | 59,558 |
Equity securities at fair value | 2,462 | 2,851 |
Securities available for sale | 361,904 | 339,579 |
Federal Home Loan Bank and Federal Reserve Bank stock | 6,470 | 6,458 |
Loans held for sale | 7,385 | 3,095 |
Loans to other financial institutions | 39,421 | 51,048 |
Loans, net | 806,787 | 797,991 |
Accrued interest receivable | 4,682 | 3,965 |
Liabilities | ||
Noninterest-bearing deposits | 283,434 | 287,460 |
Interest-bearing deposits | 889,965 | 867,142 |
Federal Home Loan Bank advances | 23,188 | 33,198 |
Accrued interest payable | 426 | 411 |
Estimated Fair Value [Member] | ||
Assets | ||
Cash and due from banks | 45,471 | 59,558 |
Equity securities at fair value | 2,462 | 2,851 |
Securities available for sale | 361,904 | 339,579 |
Federal Home Loan Bank and Federal Reserve Bank stock | 6,470 | 6,458 |
Loans held for sale | 7,606 | 3,134 |
Loans to other financial institutions | 39,421 | 51,048 |
Loans, net | 805,778 | 793,270 |
Accrued interest receivable | 4,682 | 3,965 |
Liabilities | ||
Noninterest-bearing deposits | 283,434 | 287,460 |
Interest-bearing deposits | 890,779 | 867,154 |
Federal Home Loan Bank advances | 23,204 | 33,243 |
Accrued interest payable | 426 | 411 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets | ||
Cash and due from banks | 45,471 | 59,558 |
Equity securities at fair value | 1,055 | 1,379 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Securities available for sale | 349,352 | 327,212 |
Federal Home Loan Bank and Federal Reserve Bank stock | 6,470 | 6,458 |
Loans held for sale | 7,606 | 3,134 |
Loans to other financial institutions | 39,421 | 51,048 |
Accrued interest receivable | 4,682 | 3,965 |
Liabilities | ||
Noninterest-bearing deposits | 283,434 | 287,460 |
Interest-bearing deposits | 890,779 | 867,154 |
Federal Home Loan Bank advances | 23,204 | 33,243 |
Accrued interest payable | 426 | 411 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Assets | ||
Equity securities at fair value | 1,407 | 1,472 |
Securities available for sale | 12,552 | 12,367 |
Loans, net | $ 805,778 | $ 793,270 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities at fair value | $ 2,462 | $ 2,851 |
Securities available for sale | 361,904 | 339,579 |
U.S. Treasury Notes and Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 2,074 | 2,008 |
U.S. Government and Federal Agency [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 17,129 | 17,215 |
State and Municipal [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 190,139 | 173,924 |
Mortgage-backed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 148,703 | 142,760 |
Corporate [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 2,859 | 2,672 |
Trust Preferred Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 1,000 | 1,000 |
Fair Value - Recurring Basis [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 361,904 | 339,579 |
Fair Value - Recurring Basis [Member] | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities at fair value | 2,462 | 2,851 |
Fair Value - Recurring Basis [Member] | U.S. Treasury Notes and Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 2,074 | 2,008 |
Fair Value - Recurring Basis [Member] | U.S. Government and Federal Agency [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 17,129 | 17,215 |
Fair Value - Recurring Basis [Member] | State and Municipal [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 190,139 | 173,924 |
Fair Value - Recurring Basis [Member] | Mortgage-backed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 148,703 | 142,760 |
Fair Value - Recurring Basis [Member] | Corporate [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 2,859 | 2,672 |
Fair Value - Recurring Basis [Member] | Trust Preferred Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 1,000 | 1,000 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities at fair value | 1,055 | 1,379 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value - Recurring Basis [Member] | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities at fair value | 1,055 | 1,379 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 349,352 | 327,212 |
Significant Other Observable Inputs (Level 2) [Member] | Fair Value - Recurring Basis [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 349,352 | 327,212 |
Significant Other Observable Inputs (Level 2) [Member] | Fair Value - Recurring Basis [Member] | U.S. Treasury Notes and Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 2,074 | 2,008 |
Significant Other Observable Inputs (Level 2) [Member] | Fair Value - Recurring Basis [Member] | U.S. Government and Federal Agency [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 17,129 | 17,215 |
Significant Other Observable Inputs (Level 2) [Member] | Fair Value - Recurring Basis [Member] | State and Municipal [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 178,587 | 162,557 |
Significant Other Observable Inputs (Level 2) [Member] | Fair Value - Recurring Basis [Member] | Mortgage-backed [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 148,703 | 142,760 |
Significant Other Observable Inputs (Level 2) [Member] | Fair Value - Recurring Basis [Member] | Corporate [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 2,859 | 2,672 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities at fair value | 1,407 | 1,472 |
Securities available for sale | 12,552 | 12,367 |
Significant Unobservable Inputs (Level 3) [Member] | Fair Value - Recurring Basis [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 12,552 | 12,367 |
Significant Unobservable Inputs (Level 3) [Member] | Fair Value - Recurring Basis [Member] | Equity Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities at fair value | 1,407 | 1,472 |
Significant Unobservable Inputs (Level 3) [Member] | Fair Value - Recurring Basis [Member] | State and Municipal [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 11,552 | 11,367 |
Significant Unobservable Inputs (Level 3) [Member] | Fair Value - Recurring Basis [Member] | Trust Preferred Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | $ 1,000 | $ 1,000 |
FAIR VALUE MEASUREMENTS (Deta_2
FAIR VALUE MEASUREMENTS (Details 1) - Significant Unobservable Inputs (Level 3) [Member] - Fair Value - Recurring Basis [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Equity Securities [Member] | ||
Changes in Level 3 Investment Securities, Available for Sale Measured at Fair Value on a Recurring Basis | ||
Balance at the beginning of year | $ 1,472 | $ 886 |
Total realized and unrealized gains (losses) included in noninterest income | (65) | 77 |
Balance at the end of year | 1,407 | 963 |
Investment Securities Available For Sale [Member] | ||
Changes in Level 3 Investment Securities, Available for Sale Measured at Fair Value on a Recurring Basis | ||
Balance at the beginning of year | 12,367 | 8,498 |
Total unrealized gains/(losses) included in other comprehensive income | 185 | 97 |
Balance at the end of year | $ 12,552 | $ 8,595 |
FAIR VALUE MEASUREMENTS (Deta_3
FAIR VALUE MEASUREMENTS (Details 2) - Fair Value - Non-Recurring Basis [Member] - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired Loans | $ 5,375 | $ 5,922 |
Other real estate owned, net | 926 | 929 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired Loans | 5,375 | 5,922 |
Other real estate owned, net | $ 926 | $ 929 |
FAIR VALUE MEASUREMENTS (Deta_4
FAIR VALUE MEASUREMENTS (Details Narrative) $ in Thousands | Mar. 31, 2020USD ($) |
Significant Unobservable Inputs (Level 3) [Member] | |
Net unrealized gain recognized in accumulated other comprehensive income | $ 571 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Noninterest income from contracts with customers within the scope of ASC 606 | $ 2,282 | $ 1,146 |
Noninterest income within the scope of other GAAP topics | 1,818 | 612 |
Total noninterest income | 4,099 | 1,758 |
Service Charges and Fees on Deposit Accounts [Member] | ||
Noninterest income from contracts with customers within the scope of ASC 606 | 1,009 | 628 |
Interchange Income [Member] | ||
Noninterest income from contracts with customers within the scope of ASC 606 | 836 | 405 |
Investment Commission Income [Member] | ||
Noninterest income from contracts with customers within the scope of ASC 606 | 119 | 50 |
Trust Fee Income [Member] | ||
Noninterest income from contracts with customers within the scope of ASC 606 | 170 | |
Other Charges and Fees for Customer Services [Member] | ||
Noninterest income from contracts with customers within the scope of ASC 606 | $ 147 | $ 63 |
BUSINESS COMBINATION (Details)
BUSINESS COMBINATION (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Oct. 01, 2019 |
Net assets acquired: | |||
Goodwill | $ 52,593 | $ 52,870 | |
County Bank Corp ("County") [Member] | |||
Net assets acquired: | |||
Cash and cash equivalents | $ 20,638 | ||
Equity securities at fair value | 474 | ||
Securities available for sale | 187,230 | ||
Federal Home Loan Bank and Federal Reserve Bank stock | 2,915 | ||
Loans to other financial institutions | 33,481 | ||
Originated loans | 390,116 | ||
Premises and equipment | 9,271 | ||
Other real estate owned | 1,364 | ||
Deposit based intangible | 6,359 | ||
Bank owned life insurance | 16,912 | ||
Other assets | 4,002 | ||
Total assets | 672,762 | ||
Non-interest bearing deposits | 124,113 | ||
Interest bearing deposits | 449,488 | ||
Total deposits | 573,601 | ||
Federal funds purchased | 3,800 | ||
Advances from Federal Home Loan Bank | 23,000 | ||
Other liabilities | 3,282 | ||
Total liabilities | 603,683 | ||
Net assets acquired | 69,079 | ||
Goodwill | $ 38,866 |
BUSINESS COMBINATION (Details N
BUSINESS COMBINATION (Details Narrative) - USD ($) $ in Thousands | Oct. 01, 2019 | Mar. 31, 2020 | Dec. 31, 2019 |
Goodwill | $ 52,593 | $ 52,870 | |
Community Shores Bank Corp ("Community Shores") [Member] | |||
Total assets | 202,000 | ||
Total loans | 154,000 | ||
Total deposits | $ 181,000 | ||
Measurement period adjustments for deferred taxes | 502 | ||
Measurement period adjustments for loans | $ 238 | ||
County Bank Corp ("County") [Member] | |||
Description of acquired entity | 14 branch offices and one loan production office | ||
Total assets | $ 672,762 | ||
Total loans | 424,000 | ||
Total deposits | 573,601 | ||
Goodwill | 38,866 | ||
County Bank Corp ("County") [Member] | Preliminary Deposit [Member] | |||
Intangible | 6,400 | ||
Goodwill | $ 39,100 | ||
County Bank Corp ("County") [Member] | Fractional Stock [Member] | |||
Stock issued during acquisitions, shares | 299 | ||
County Bank Corp ("County") [Member] | Common Stock [Member] | |||
Stock issued during acquisitions, shares | 3,603,872 | ||
Stock issued during acquisitions, value | $ 108,000 |