Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 03, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | GLEN BURNIE BANCORP | |
Entity Central Index Key | 890,066 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock Shares Outstanding | 2,810,961 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and due from banks | $ 2,584 | $ 2,610 |
Interest-bearing deposits in other financial institutions | 5,498 | 9,995 |
Cash and Cash Equivalents | 8,082 | 12,605 |
Investment securities available for sale, at fair value | 87,314 | 89,349 |
Restricted equity securities, at cost | 1,443 | 1,232 |
Loans, net of deferred fees and costs | 289,408 | 271,612 |
Allowance for loan losses | (2,284) | (2,589) |
Loans, net | 287,124 | 269,023 |
Real estate acquired through foreclosure | 114 | 114 |
Premises and equipment, net | 3,195 | 3,371 |
Bank owned life insurance | 7,780 | 8,713 |
Deferred tax assets, net | 2,713 | 2,429 |
Accrued interest receivable | 1,142 | 1,133 |
Accrued taxes receivable | 465 | |
Prepaid expenses | 471 | 433 |
Other assets | 2,093 | 583 |
Total Assets | 401,471 | 389,450 |
LIABILITIES | ||
Noninterest-bearing deposits | 108,414 | 104,017 |
Interest-bearing deposits | 233,393 | 230,221 |
Total Deposits | 341,807 | 334,238 |
Short-term borrowings | 25,000 | 20,000 |
Defined pension liability | 317 | 335 |
Accrued taxes payable | 28 | |
Accrued expenses and other liabilities | 775 | 835 |
Total Liabilities | 367,927 | 355,408 |
STOCKHOLDERS' EQUITY | ||
Common stock, par value $1, authorized 15,000,000 shares, issued and outstanding 2,807,819 and 2,801,149 shares as of June 30, 2018 and December 31, 2017 , respectively. | 2,808 | 2,801 |
Additional paid-in capital | 10,335 | 10,267 |
Retained earnings | 21,778 | 21,605 |
Accumulated other comprehensive loss | (1,377) | (631) |
Total Stockholders' Equity | 33,544 | 34,042 |
Total Liabilities and Stockholders' Equity | $ 401,471 | $ 389,450 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, shares issued | 2,807,819 | 2,801,149 |
Common stock, shares outstanding | 2,807,819 | 2,801,149 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
INTEREST INCOME | ||||
Interest and fees on loans | $ 2,958 | $ 2,842 | $ 5,830 | $ 5,616 |
Interest and dividends on securities | 535 | 507 | 1,059 | 1,025 |
Interest on deposits with banks and federal funds sold | 50 | 31 | 98 | 62 |
Total Interest Income | 3,543 | 3,380 | 6,987 | 6,703 |
INTEREST EXPENSE | ||||
Interest on deposits | 325 | 327 | 634 | 659 |
Interest on short-term borrowings | 165 | 84 | 308 | 167 |
Interest on long-term borrowings | 76 | 152 | ||
Total Interest Expense | 490 | 487 | 942 | 978 |
Net Interest Income | 3,053 | 2,893 | 6,045 | 5,725 |
Provision for loan losses | (5) | (30) | 355 | 165 |
Net interest income after provision for loan losses | 3,058 | 2,923 | 5,690 | 5,560 |
NONINTEREST INCOME | ||||
Gains on redemption of BOLI policies | 101 | 308 | ||
Income on life insurance | 45 | 51 | 89 | 100 |
Other income | 1 | 3 | ||
Total Noninterest Income | 386 | 288 | 872 | 567 |
NONINTEREST EXPENSE | ||||
Salary and benefits | 1,649 | 1,615 | 3,371 | 3,036 |
Occupancy and equipment expenses | 274 | 286 | 579 | 584 |
Legal, accounting and other professional fees | 277 | 197 | 509 | 403 |
Data processing and item processing services | 154 | 143 | 286 | 312 |
FDIC insurance costs | 65 | 63 | 122 | 123 |
Advertising and marketing related expenses | 32 | 42 | 49 | 73 |
Loan collection costs | 80 | 29 | 121 | 47 |
Telephone costs | 67 | 59 | 124 | 114 |
Other expenses | 413 | 376 | 685 | 689 |
Total Noninterest Expenses | 3,011 | 2,810 | 5,846 | 5,381 |
Income before income taxes | 433 | 401 | 716 | 746 |
Income tax expense (benefit) | (45) | 63 | (17) | 92 |
NET INCOME | $ 478 | $ 338 | $ 733 | $ 654 |
Basic and diluted net income per share of common stock (in dollars per share) | $ 0.17 | $ 0.12 | $ 0.26 | $ 0.23 |
Service charges on deposit accounts | ||||
NONINTEREST INCOME | ||||
Service charges, other fees and commissions | $ 61 | $ 68 | $ 128 | $ 136 |
Other fees and commissions | ||||
NONINTEREST INCOME | ||||
Service charges, other fees and commissions | $ 179 | $ 168 | $ 347 | $ 328 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) | ||||
Net income | $ 478 | $ 338 | $ 733 | $ 654 |
Net unrealized (loss) gain on securities available for sale: | ||||
Net unrealized (loss) gain on securities during the period | 15 | 507 | (1,576) | 549 |
Income tax benefit (loss) relating to item above | (6) | 434 | ||
Reclassification adjustment for gain on sales of securities included in net income | (1) | (1) | ||
Net effect on other comprehensive (loss) income | 9 | 506 | (1,142) | 548 |
Net unrealized gain on interest rate swap: | ||||
Net unrealized gain on interest rate swap during the period | 107 | 546 | ||
Income tax expense relating to item above | (41) | (150) | ||
Net effect on other comprehensive income | 66 | 396 | ||
Other comprehensive (loss) income | 75 | 506 | (746) | 548 |
Comprehensive income | $ 553 | $ 844 | $ (13) | $ 1,202 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Total |
Balances at Dec. 31, 2016 | $ 2,787 | $ 10,130 | $ 21,708 | $ (810) | $ 33,815 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 654 | 654 | |||
Cash dividends, $0.10 per share | (559) | (559) | |||
Dividends reinvested under dividend reinvestment plan | 7 | 69 | 76 | ||
Other comprehensive income (loss) | 548 | 548 | |||
Balances at Jun. 30, 2017 | 2,794 | 10,199 | 21,803 | (262) | 34,534 |
Balances at Dec. 31, 2017 | 2,801 | 10,267 | 21,605 | (631) | 34,042 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 733 | 733 | |||
Cash dividends, $0.10 per share | (560) | (560) | |||
Dividends reinvested under dividend reinvestment plan | 7 | 68 | 75 | ||
Other comprehensive income (loss) | (746) | (746) | |||
Balances at Jun. 30, 2018 | $ 2,808 | $ 10,335 | $ 21,778 | $ (1,377) | $ 33,544 |
CONSOLIDATED STATEMENT OF CHAN7
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Parentheticals) - $ / shares | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY | ||
Cash dividends, per share | $ 0.20 | $ 0.20 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 733 | $ 654 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, amortization, and accretion of premises and equipment | 579 | 518 |
Provision for loan losses | 355 | 165 |
Gain on life insurance | (308) | |
Gain on disposals of assets, net | (1) | |
Decrease (increase) in cash surrender value of bank owned life insurance | 935 | (100) |
Reclassification adjustment for stranded income tax effects in accumulated other comprehensive income | ||
Decrease in ground rents | 3 | 7 |
Decrease (increase) in accrued interest receivable | (9) | 42 |
Net (increase) decrease in other assets | (232) | 730 |
Net decrease in accrued expenses and other liabilities | (51) | (269) |
Net cash provided by operating activities | 2,005 | 1,746 |
Cash flows from investing activities: | ||
Redemptions and maturities of investment securities available for sale | 5,557 | 9,209 |
Purchases of investment securities available for sale | (5,440) | (4,659) |
Net purchase of Federal Home Loan Bank stock | (211) | (210) |
Net increase in loans | (18,457) | (6,012) |
Purchases of premises and equipment | (61) | (119) |
Net cash provided by investing activities | (18,612) | (1,791) |
Cash flows from financing activities: | ||
Net increase (decrease) in deposits | 7,569 | 2,244 |
Increase in short term borrowings | 5,000 | 15,000 |
Decrease in long term borrowings | (10,000) | |
Cash dividends paid | (560) | (559) |
Common stock dividends reinvested | 75 | 76 |
Net cash provided by financing activities | 12,084 | 6,761 |
Net increase (decrease) in cash and cash equivalents | (4,523) | 6,716 |
Cash and cash equivalents at beginning of year | 12,605 | 10,622 |
Cash and cash equivalents at end of year | 8,082 | 17,338 |
Supplemental Disclosures of Cash Flow Information: | ||
Interest paid on deposits and borrowings | 908 | 1,122 |
Net income taxes refunded | (573) | |
Net income taxes paid | 49 | |
Net (increase) decrease in unrealized depreciation on available for sale securities | (1,576) | $ 905 |
Net Increase Decrease In Unrealized Depreciation On Swaps | $ 546 |
ORGANIZATIONAL
ORGANIZATIONAL | 6 Months Ended |
Jun. 30, 2018 | |
ORGANIZATIONAL | |
ORGANIZATIONAL. | NOTE 1 – ORGANIZATIONAL Nature of Business Glen Burnie Bancorp (the “Company”) is a bank holding company organized in 1990 under the laws of the State of Maryland. The Company owns all the outstanding shares of capital stock of The Bank of Glen Burnie (the “Bank”), a commercial bank organized in 1949 under the laws of the State of Maryland (the “State”). The Bank provides financial services to individuals and corporate customers located in Anne Arundel County and surrounding areas of Central Maryland, and is subject to competition from other financial institutions. The Bank is also subject to the regulations of certain federal and state agencies and undergoes periodic examinations by those regulatory authorities. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2018 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | NOTE 2 – BASIS OF PRESENTATION In management’s opinion, the accompanying unaudited consolidated financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim period reporting, reflect all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the financial position at June 30, 2018 and December 31, 2017, the results of operations for the three- and six-month periods ended June 30, 2018 and 2017, and the statements of cash flows for the three- and six-month periods ended June 30, 2018 and 2017. The operating results for the three- and six-month period ended June 30, 2018 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2018 or any future interim period. The consolidated balance sheet at December 31, 2017 has been derived from the audited financial statements included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission (the “SEC”) on April 2, 2018. The unaudited consolidated financial statements for June 30, 2018 and 2017, the consolidated balance sheet at December 31, 2017, and accompanying notes should be read in conjunction with the Company’s audited consolidated financial statements and the accompanying notes thereto that are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, The Bank of Glen Burnie and GBB Properties. Consolidation resulted in the elimination of all intercompany accounts and transactions. Cash Flow Presentation In the statements of cash flows, cash and cash equivalents include cash on hand, amounts due from banks, Federal Home Loan Bank of Atlanta (“FHLB Atlanta”) overnight deposits, and federal funds sold. Generally, federal funds are sold for one-day periods. Reclassifications Certain items in the 2017 consolidated financial statements have been reclassified to conform to the 2018 classifications. The reclassifications had no effect on previously reported results of operations or retained earnings. Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the determination of the allowance for loan losses (the “allowance”); the fair value of financial instruments, such as loans and investment securities; benefit plan obligations and expenses; and the valuation of deferred tax assets and liabilities. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2018 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 3 – EARNINGS PER SHARE Basic earnings per common share (“EPS”) is computed by dividing net income available to common shareholders by the weighted average common shares outstanding during the period. Diluted EPS is computed by dividing net income available to common shareholders by the weighted average common shares outstanding, plus the effect of common stock equivalents (for example, stock options computed using the treasury stock method). Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Basic and diluted earnings per share: Net income $ 477,685 $ 337,927 $ 733,154 $ 653,713 Weighted average common shares outstanding 2,806,599 2,792,656 2,804,565 2,791,824 Basic and dilutive net income per share $ 0.17 $ 0.12 $ 0.26 $ 0.23 Diluted earnings per share calculations were not required for the three- and six-month periods ended June 30, 2018 and 2017, as there were no stock options outstanding. |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 6 Months Ended |
Jun. 30, 2018 | |
INVESTMENT SECURITIES | |
INVESTMENT SECURITIES | NOTE 4 – INVESTMENT SECURITIES Investment securities are accounted for according to their purpose and holding period. Trading securities are those that are bought and held principally for the purpose of selling them in the near term. The Company held no trading securities at June 30, 2018 or December 31, 2017. Available-for-sale investment securities, comprised of debt and mortgage-backed securities, are those that may be sold before maturity due to changes in the Company's interest rate risk profile or funding needs, and are reported at fair value with unrealized gains and losses, net of taxes, reported as a component of other comprehensive income. Held-to-maturity investment securities are those that management has the positive intent and ability to hold to maturity and are reported at amortized cost. The Company held no held-to-maturity securities at June 30, 2018 or December 31, 2017. Realized gains and losses are recorded in noninterest income and are determined on a trade date basis using the specific identification method. Interest and dividends on investment securities are recognized in interest income on an accrual basis. Premiums and discounts are amortized or accreted into interest income using the interest method over the expected lives of the individual securities. The following table summarizes the amortized cost and estimated fair value of the Company’s investment securities portfolio at June 30, 2018 and December 31, 2017: At June 30, 2018 Gross Gross Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value Collateralized mortgage obligations $ 22,923 $ 13 $ (918) $ 22,018 Agency mortgage-backed securities 28,055 4 (1,056) 27,003 Municipal securities 35,330 75 (533) 34,872 U.S. Government agency securities 1,999 — (64) 1,935 U.S. Treasury securities 1,501 — (15) 1,486 Total securities available for sale $ 89,808 $ 92 $ (2,586) $ 87,314 At December 31, 2017 Gross Gross Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value Collateralized mortgage obligations $ 24,063 $ 20 $ (569) $ 23,514 Agency mortgage-backed securities 25,725 4 (500) 25,229 Municipal securities 35,453 339 (159) 35,633 U.S. Government agency securities 3,526 — (46) 3,480 U.S. Treasury securities 1,501 — (8) 1,493 Total securities available for sale $ 90,268 $ 363 $ (1,282) $ 89,349 The gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2018 and December 31, 2017 are as follows: June 30, 2018 Less than 12 months 12 months or more Total Securities available for sale: Fair Unrealized Fair Unrealized Fair Unrealized Value Loss Value Loss Value Loss (dollars in thousands) Collateralized mortgage obligations $ 6,053 $ (169) $ 14,783 $ (749) $ 20,836 $ (918) Agency mortgage-backed securities 8,799 (273) 18,019 (783) 26,818 (1,056) Municipal securities 17,130 (310) 6,099 (223) 23,229 (533) U.S. Government agency securities 1,935 (64) — — 1,935 (64) U.S. Treasury securities 1,485 (15) — — 1,485 (15) $ 35,402 $ (831) $ 38,901 $ (1,755) $ 74,303 $ (2,586) December 31, 2017 Less than 12 months 12 months or more Total Securities available for sale: Fair Unrealized Fair Unrealized Fair Unrealized Value Loss Value Loss Value Loss (dollars in thousands) Collateralized mortgage obligations $ 6,531 $ (62) $ 15,678 $ (507) $ 22,209 $ (569) Agency mortgage-backed securities 6,802 (80) 18,218 (420) 25,020 (500) Municipal securities 2,396 (11) 6,230 (148) 8,626 (159) U.S. Government agency securities 2,965 (37) 515 (9) 3,480 (46) U.S. Treasury securities 1,494 (8) — — 1,494 (8) $ 20,188 $ (198) $ 40,641 $ (1,084) $ 60,829 $ (1,282) Declines in the fair value of held to maturity and available for sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses. In estimating other-than-temporary-impairment losses, management considers, among other things, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, and (iii) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. At June 30, 2018, the Company recorded unrealized losses in its portfolio of debt securities totaling $2.6 million related to 148 securities, which resulted from increases in market interest rates, spread volatility, and other factors that management deems to be temporary. Management does not believe the securities are impaired due to reasons of credit quality. Since management believes that it is more likely than not that the Company will not be required to sell these securities prior to maturity or a full recovery of the amortized cost, the Company does not consider these securities to be other-than-temporarily impaired. At December 31, 2017, the Company recorded unrealized losses in its portfolio of debt securities totaling $1.3 million related to 114 securities, which resulted from increases in market interest rates, spread volatility, and other factors that management deems to be temporary. Management does not believe the securities are impaired due to reasons of credit quality. Since management believes that it is more likely than not that the Company will not be required to sell these securities prior to maturity or a full recovery of the amortized cost, the Company does not consider these securities to be other-than-temporarily impaired. Contractual maturities of debt securities at June 30, 2018 are shown below. Actual maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties. At June 30, 2018 Amortized Fair Yield (dollars in thousands) Cost Value (1), (2) Available for sale securities maturing: Within one year $ 1,198 $ 1,204 3.72 % Over one to five years 1,815 1,791 1.50 % Over five to ten years 19,145 18,603 2.12 % Over ten years 67,650 65,716 2.79 % Total debt securities $ 89,808 $ 87,314 _____________________ (1) Yields are stated as book yields which are adjusted for amortization and accretion of purchase premiums and discounts, respectively. (2) Yields on tax-exempt obligations have been computed on a tax-equivalent basis. |
LOANS RECEIVABLE AND ALLOWANCE
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES | 6 Months Ended |
Jun. 30, 2018 | |
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES | |
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES | NOTE 5 – LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES The fundamental lending business of the Company is based on understanding, measuring, and controlling the credit risk inherent in the loan portfolio. The Company's loan portfolio is subject to varying degrees of credit risk. These risks entail both general risks, which are inherent in the lending process, and risks specific to individual borrowers. The Company's credit risk is mitigated through portfolio diversification, which limits exposure to any single customer, industry or collateral type. The Company currently manages its credit products and the respective exposure to loan losses by the following specific portfolio segments, which are levels at which the Company develops and documents its systematic methodology to determine the allowance for loan losses. The Company considers each loan type to be a portfolio segment having unique risk characteristics. June 30, December 31, 2018 2017 (dollars in thousands) Amount % Amount % Consumer $ 14,453 5 $ 16,112 Residential real estate 82,144 29 81,926 Indirect 101,181 35 85,186 Commercial 12,028 4 11,257 Construction 3,472 1 3,536 Commercial real estate 76,130 26 73,595 Loans, net of deferred fees and costs 289,408 100 271,612 100 Less: Allowance for loan losses (2,284) (2,589) Loans, net $ 287,124 $ 269,023 The Bank’s net loans totaled $287.1 million at June 30, 2018, compared to $269.0 million at December 31, 2017, an increase of $18.1 million, or 6.73%. Consumer loans decreased from $16.1 million at December 31, 2017 to $14.5 million, a decrease of $1.6 million, or 10.30%. Residential real estate loans increased by $0.2 million, or 0.27%, from $81.9 at December 31, 2017 to $82.1 at June 30, 2018. Indirect loans increased from $85.2 million to $101.2 million, an increase of $16.0 million, or 18.78%. Commercial loans increased $0.7 million, or 6.86%, to $12.0 million at June 30, 2018 compared to $11.3 million at December 31, 2017. Commercial real estate loans increased from $73.6 million to $76.1 million, an increase of $2.5 million or 3.44%. Credit Risk and Allowance for Loan Losses . Credit risk is the risk of loss arising from the inability of a borrower to meet his or her obligations and entails both general risks, which are inherent in the process of lending, and risks specific to individual borrowers. Credit risk is mitigated through portfolio diversification, which limits exposure to any single customer, industry, or collateral type. Residential mortgage and home equity loans and lines generally have the lowest credit loss experience. Loans secured by personal property, such as auto loans, generally experience medium credit losses. Unsecured loan products, such as personal revolving credit, have the highest credit loss experience and for that reason, the Bank has chosen not to engage in a significant amount of this type of lending. Credit risk in commercial lending can vary significantly, as losses as a percentage of outstanding loans can shift widely during economic cycles and are particularly sensitive to changing economic conditions. Generally, improving economic conditions result in improved operating results on the part of commercial customers, enhancing their ability to meet their particular debt service requirements. Improvements, if any, in operating cash flows can be offset by the impact of rising interest rates that may occur during improved economic times. Inconsistent economic conditions may have an adverse effect on the operating results of commercial customers, reducing their ability to meet debt service obligations. The allowance for loan losses is established through a provision for loan losses charged to expense. Loans are charged against the allowance for loan losses when management believes that the collectability of the principal is unlikely. The allowance, based on evaluations of the collectability of loans and prior loan loss experience, is an amount that management believes will be adequate to absorb possible losses on existing loans that may become uncollectible. The evaluations are performed for each class of loans and take into consideration such factors as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans, value of collateral securing the loans and current economic conditions and trends that may affect the borrowers’ ability to pay. For example, delinquencies in unsecured loans and indirect automobile installment loans will be reserved for at significantly higher ratios than loans secured by real estate. Based on that analysis, the Bank deems its allowance for loan losses in proportion to the total nonaccrual loans and past due loans to be sufficient. For purposes of determining the allowance for loan losses, the Bank segments the loan portfolio into the following classifications: · Consumer · Residential Real Estate · Indirect · Commercial · Construction · Commercial Real Estate Each of these segments are reviewed and analyzed quarterly using the average historical charge-offs over a four year period for their respective segments as well as the following qualitative factors: · Changes in asset quality metrics including past due (30-89 days) loans, nonaccrual loans, classified assets, watch list loans all in relation to total loans. Also policy exceptions in relationship to loan volume. · Changes in the rate and direction of the loan volume by portfolio segment. · Concentration of credit including the concentration percentages, changes in concentration and concentrations relative to goals. · Changes in macro-economic factors including the rates and direction of unemployment, median income and population. · Changes in internal factors including external loan review required reserve changes, internal review penetration, internal required reserve changes, and weighted required reserve trends. · Changes in rate and direction of charge offs and recoveries. Transactions in the allowance for loan losses for the six months ended June 30, 2018 and the year ended December 31, 2017 were as follows: June 30, 2018 Residential Commercial (dollars in thousands) Consumer Real Estate Indirect Commercial Construction Real Estate Unallocated Total Balance, beginning of year $ 214 $ 1,061 $ 774 $ 237 $ 12 $ 291 $ — $ 2,589 Charge-offs (92) (514) (163) — — — — (769) Recoveries 12 2 95 — — — — 109 Provision for loan losses 43 112 93 9 (1) 99 — 355 Balance, end of year $ 177 $ 661 $ 799 $ 246 $ 11 $ 390 $ — $ 2,284 Individually evaluated for impairment: Balance in allowance $ 27 $ — $ — $ 211 $ — $ — $ — $ 238 Related loan balance 96 2,006 — 211 — 3,016 — 5,329 Collectively evaluated for impairment: Balance in allowance $ 150 $ 661 $ 799 $ 35 $ 11 $ 390 $ — $ 2,046 Related loan balance 14,357 80,138 101,181 11,817 3,472 73,114 — 284,079 December 31, 2017 Residential Commercial (dollars in thousands) Consumer Real Estate Indirect Commercial Construction Real Estate Unallocated Total Balance, beginning of year $ 182 $ 1,042 $ 693 $ 284 $ 10 $ 259 $ 14 $ 2,484 Charge-offs (96) (3) (458) (9) — — — (566) Recoveries 8 27 286 — — 14 — 335 Provision for loan losses 120 (5) 253 (38) 2 18 (14) 336 Balance, end of year $ 214 $ 1,061 $ 774 $ 237 $ 12 $ 291 $ — $ 2,589 Individually evaluated for impairment: Balance in allowance $ 52 $ 513 $ — $ 217 $ — $ — $ — $ 782 Related loan balance 160 2,345 — 217 — 1,176 — 3,898 Collectively evaluated for impairment: Balance in allowance $ 162 $ 548 $ 774 $ 20 $ 12 $ 291 $ — $ 1,807 Related loan balance 15,952 79,580 85,186 11,040 3,536 72,420 — 267,714 Management believes the allowance for credit losses is at an appropriate level to absorb inherent probable losses in the portfolio. June 30, June 30, (dollars in thousands) 2018 2017 Average loans $ 281,104 $ 269,533 Net charge offs to average loans (annualized) 0.48 % 0.04 % During the six-month period ending June 30, 2018, loans to 25 borrowers and related entities totaling approximately $769,000 were determined to be uncollectible and were charged off. During the six-month period ending June 30, 2017, loans to 38 borrowers and related entities totaling approximately $254,000 were determined to be uncollectible and were charged off. Reserve for Unfunded Commitments . Loan commitments and unused lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. The Bank generally requires collateral to support financial instruments with credit risk on the same basis as it does for on-balance sheet instruments. The collateral requirement is based on management's credit evaluation of the counter party. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. Each customer's creditworthiness is evaluated on a case-by-case basis. Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. As of June 30, 2018 and 2017, the Bank had outstanding commitments totaling $33.8 million and $24.0 million, respectively. These outstanding commitments consisted of letters of credit, undrawn lines of credit, and other loan commitments. The following table shows the Bank’s reserve for unfunded commitments arising from these transactions: Six Months Ended June 30, (dollars in thousands) 2018 2017 Beginning balance $ 24 $ 25 Reduction of unfunded reserve (18) (20) Provisions charged to operations 37 17 Ending balance $ 43 $ 22 Contractual Obligations and Commitments. No material changes, outside the normal course of business, have been made during 2018. Asset Quality . The following tables set forth the amount of the Bank’s current, past due, and non-accrual loans by categories of loans and restructured loans, at the dates indicated. At June 30, 2018 90 Days or (dollars in thousands) 30-89 Days More and Current Past Due Still Accruing Nonaccrual Total Consumer $ 14,094 $ 237 $ — $ 122 $ 14,453 Residential Real Estate 80,232 159 — 1,753 82,144 Indirect 100,453 599 — 129 101,181 Commercial 12,023 — 5 — 12,028 Construction 3,133 — 29 310 3,472 Commercial Real Estate 73,759 — — 2,371 76,130 $ 283,694 $ 995 $ 34 $ 4,685 $ 289,408 At December 31, 2017 90 Days or (dollars in thousands) 30-89 Days More and Current Past Due Still Accruing Nonaccrual Total Consumer $ 15,823 $ 80 $ 24 $ 185 $ 16,112 Residential Real Estate 79,205 597 — 2,124 81,926 Indirect 83,932 1,166 — 88 85,186 Commercial 11,203 — 6 48 11,257 Construction 3,188 — 30 318 3,536 Commercial Real Estate 73,088 — — 507 73,595 $ 266,439 $ 1,843 $ 60 $ 3,270 $ 271,612 The balances in the above charts have not been reduced by the allowance for loan loss. For the period ending June 30, 2018, the allowance for loan loss is $2.3 million. For the period ending December 31, 2017, the allowance for loan loss is $2.6 million. At June 30, 2018, there was $1.0 million in loans outstanding, that were in an accrual status, but known information about possible credit problems of borrowers caused management to have doubts as to the ability of such borrowers to comply with present loan repayment terms. Such loans consist of loans which were not 90 days or more past due but where the borrower is in bankruptcy or has a history of delinquency, or the loan to value ratio is considered excessive due to deterioration of the collateral or other factors. The three loans outstanding, totaling $1.0 million are as follows: $646,000 Commercial Real Estate loan where the guarantor is in bankruptcy and the loan has an accelerated payoff since we have an assignment of rents from the property which has a very long-term national tenant; $159,000 Home Equity Line of Credit which is paying as agreed, however the borrower has defaulted on other commercial loans which have been satisfied; and a $211,000 Commercial loan with a loan to value ratio which has deteriorated, which has a complete specific reserve of $211,000. All three of these loans are classified with a risk rating of Substandard. Non-accrual loans with specific reserves at June 30, 2018 are comprised of: Consumer loans – Two loans to two borrowers in the amount of $96,109 with specific reserves of $26,827 established for the loans. Below is a summary of the recorded investment amount and related allowance for losses of the Bank’s impaired loans at June 30, 2018 and December 31, 2017. June 30, 2018 Unpaid Interest Average (dollars in thousands) Recorded Principal Income Specific Recorded Investment Balance Recognized Reserve Investment Impaired loans with specific reserves: Consumer $ 96 $ 96 $ 1 $ 27 $ 137 Commercial 211 211 6 211 214 Total impaired loans with specific reserves 307 307 7 238 351 Impaired loans with no specific reserve: Residential Real Estate $ 1,735 $ 2,161 $ 4 $ — $ 2,871 Indirect 129 129 — — — Construction 228 228 — — 236 Commercial Real Estate 3,099 3,409 95 — 4,758 Total impaired loans with no specific reserve $ 5,191 $ 5,927 $ 99 — $ 7,865 December 31, 2017 Unpaid Interest Average (dollars in thousands) Recorded Principal Income Specific Recorded Investment Balance Recognized Reserve Investment Impaired loans with specific reserves: Consumer $ 160 $ 160 $ 5 $ 52 $ 205 Residential Real Estate 1,294 1,322 — 513 1,312 Commercial 217 217 — 217 223 Total impaired loans with specific reserves 1,671 1,699 5 782 1,740 Impaired loans with no specific reserve: Consumer $ 49 $ 49 $ — — $ — Residential Real Estate 992 1,760 11 — 1,572 Indirect 88 88 — — — Commercial 2 2 — — 2 Construction 318 318 — — 322 Commercial Real Estate 1,194 1,194 39 — 1,632 Total impaired loans with no specific reserve $ 2,643 $ 3,411 $ 50 — $ 3,528 June 30, December 31, (dollars in thousands) 2018 2017 Troubled debt restructured loans $ 256 $ 263 Non-accrual and 90+ days past due and still accruing loans to average loans 1.48 % 1.32 % Allowance for loan losses to nonaccrual & 90+ days past due and still accruing loans 58.6 % 77.7 % At June 30, 2018, there were two troubled debt restructured loans consisting of a commercial loan of $211,000 and a consumer loan of $45,000. The consumer loan is in a nonaccrual status. The following table shows the activity for non-accrual loans for the quarters ended June 30, 2017 and 2018. Residential Commercial (dollars in thousands) Consumer Real Estate Indirect Commercial Construction Real Estate Totals December 31, 2016 403 2,508 193 — — 647 3,751 Transfers into nonaccrual 4 40 349 — 84 132 609 Loans paid down/payoffs (67) (82) (96) — (84) (6) (335) Loans returned to accrual status — (132) (112) — — — (244) Loans charged off (4) (3) (247) — — — (254) June 30, 2017 336 2,331 87 — — 773 3,527 December 31, 2017 185 2,124 88 48 318 507 3,270 Transfers into nonaccrual 44 183 305 — — 2,000 2,532 Loans paid down/payoffs (15) (41) (51) (48) (8) (136) (299) Loans returned to accrual status — — (50) — — — (50) Loans charged off (92) (513) (163) — — — (768) June 30, 2018 122 1,753 129 — 310 2,371 4,685 Other Real Estate Owned. At June 30, 2018, the Company had $114,000 in real estate acquired in partial or total satisfaction of debt, unchanged from $114,000 at December 31, 2017. All such properties are initially recorded at the lower of cost or fair value (net realizable value) at the date acquired and carried on the balance sheet as other real estate owned. Losses arising at the date of acquisition are charged against the allowance for credit losses. Subsequent write-downs that may be required and expense of operation are included in noninterest expense. Gains and losses realized from the sale of other real estate owned are included in noninterest expense. Credit Quality Information In addition to monitoring the performance status of the loan portfolio, the Company utilizes a risk rating scale (1-8) to evaluate loan asset quality for all loans. Loans that are rated 1-4 are classified as pass credits. For the pass rated loans, management believes there is a low risk of loss related to these loans and, as necessary, credit may be strengthened through improved borrower performance and/or additional collateral. The Bank’s internal risk ratings are as follows: 1 Superior – minimal risk. (normally supported by pledged deposits, United States government securities, etc.) 2 Above Average - low risk. (all of the risks associated with this credit based on each of the bank’s creditworthiness criteria are minimal) 3 Average – moderately low risk. (most of the risks associated with this credit based on each of the bank’s creditworthiness criteria are minimal) 4 Acceptable – moderate risk. (the weighted overall risk associated with this credit based on each of the bank’s creditworthiness criteria is acceptable) 5 Other Assets Especially Mentioned – moderately high risk. (possesses deficiencies which corrective action by the bank would remedy; potential watch list) 6 Substandard – (the bank is inadequately protected and there exists the distinct possibility of sustaining some loss if not corrected) 7 Doubtful – (weaknesses make collection or liquidation in full, based on currently existing facts, improbable) 8 Loss – (of little value; not warranted as a bankable asset) The following table provides information with respect to the Company's credit quality indicators by loan portfolio segment at June 30, 2018: June 30, 2018 Residential Commercial (dollars in thousands) Consumer Real Estate Indirect Commercial Construction Real Estate Total Pass $ 14,119 $ 79,828 $ 100,143 $ 11,817 $ 3,472 $ 73,031 $ 282,410 Special mention 187 215 610 — — — 1,012 Substandard 146 2,101 355 211 — 3,099 5,912 Doubtful 1 — 73 — — — 74 Loss — — — — — — — $ 14,453 $ 82,144 $ 101,181 $ 12,028 $ 3,472 $ 76,130 $ 289,408 Nonaccrual 122 1,753 129 — 310 2,371 4,685 Troubled debt restructures 45 — — 211 — — 256 Number of TDRs accounts 1 — — 1 — — 2 Non-performing TDRs 45 — — — — — 45 Number of non-performing TDR accounts 1 — — — — — 1 December 31, 2017 Residential Commercial (dollars in thousands) Consumer Real Estate Indirect Commercial Construction Real Estate Total Pass $ 15,823 $ 79,060 $ 83,756 $ 11,038 $ 3,218 $ 72,074 $ 264,969 Special mention 77 384 1,027 2 — 327 1,817 Substandard 188 2,482 362 217 318 1,194 4,761 Doubtful 24 — 41 — — — 65 Loss — — — — — — — $ 16,112 $ 81,926 $ 85,186 $ 11,257 $ 3,536 $ 73,595 $ 271,612 Nonaccrual 185 2,124 88 48 318 507 3,270 Troubled debt restructures 46 — — 217 — — 263 Number of TDRs accounts 1 — — 1 — — 2 Non-performing TDRs 46 — — — — — 46 Number of non-performing TDR accounts 1 — — — — — 1 |
FAIR VALUE
FAIR VALUE | 6 Months Ended |
Jun. 30, 2018 | |
FAIR VALUE. | |
Fair Value Measurements | NOTE 6 – FAIR VALUE ASC Topic 820 provides a framework for measuring and disclosing fair value under GAAP. ASC 820 requires disclosures about the fair value of assets and liabilities recognized in the balance sheet in periods subsequent to initial recognition, whether the measurements are made on a recurring basis (for example, available-for-sale investment securities) or a nonrecurring basis (for example, impaired loans). ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Fair Value Hierarchy ASC 820‑10 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. In accordance with ASC 820‑10, these inputs are summarized in the three broad levels listed below: · Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the entity has the ability to access at the measurement date. · Level 2 – Other significant observable inputs (including quoted prices in active markets for similar securities) · Level 3 – Significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments) The following is a description of valuation methodologies used for assets and liabilities recorded at fair value: Investment Securities Available-for-Sale. Investment securities available-for-sale and interest rate swap contracts are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange such as the New York Stock Exchange, Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include mortgage backed securities issued by government sponsored entities, municipal bonds and corporate debt securities, and interest rate swap contracts. Securities classified as Level 3 include asset-backed securities in illiquid markets. The Bank may be required, from time to time, to measure certain other financial and non-financial assets and liabilities at fair value on a non-recurring basis in accordance with GAAP. Loans. At June 30, 2018, these assets include 22 loans, excluding $168,000 of residential real estate and indirect loans, classified as impaired, which include nonaccrual, past due 90 days or more and still accruing, and a homogeneous pool of indirect loans all considered to be impaired loans, which are valued under Level 3 inputs. Loans which are deemed to be impaired ($5.3 million of loans with $237,000 of specific reserves as of June 30, 2018) and foreclosed real estate assets are primarily valued on a nonrecurring basis at the fair values of the underlying real estate collateral. The Company is predominantly a cash flow lender with real estate serving as collateral on a majority of loans ($5.0 million of the total impaired loans as of June 30, 2018). On a quarterly basis, the Company determines such fair values through a variety of data points and mostly rely on appraisals from independent appraisers. We obtain an appraisal on properties when they become impaired and have new appraisals at least every year. Typically, these appraisals do not include an inside inspection of the property as our loan documents do not require the borrower to allow access to the property. Therefore the most significant unobservable inputs is the details of the amenities included within the property and the condition of the property. Further, we cannot always accurately assess the amount of time it takes to gain ownership of our collateral through the foreclosure process and the damage, as well as potential looting, of the property further decreasing our value. Thus, in determining the fair values we discount the current independent appraisals, with a range from 0% to 16%, based on individual circumstances. The remaining impaired loans ($475,000 million with $226,000 of specific reserves as of June 30, 2018) include mobile homes, commercial, consumer, and indirect auto loans, which are valued based on the value of the underlying collateral. The changes in the assets subject to fair value measurements are summarized below by level: Fair (dollars in thousands) Level 1 Level 2 Level 3 Value June 30, 2018 Recurring: Securities available for sale Collateralized mortgage obligations $ — $ 22,018 $ — $ 22,018 Agency mortgage-backed securities — 27,003 — 27,003 Municipal securities — 34,872 — 34,872 U.S. Government agency securities — 1,935 — 1,935 U.S. Treasury securities — 1,486 — 1,486 Interest rate swap — 431 — 431 Non-recurring: Maryland Financial Bank stock — — 30 30 Impaired loans — — 5,260 5,260 OREO — 114 — 114 $ — $ 87,859 $ 5,290 $ 93,149 December 31, 2017 Recurring: Securities available for sale Collateralized mortgage obligations $ — $ 23,514 $ — $ 23,514 Agency mortgage-backed securities — 25,229 — 25,229 Municipal securities — 35,633 — 35,633 U.S. Government agency securities — 3,480 — 3,480 U.S. Treasury securities — 1,493 — 1,493 Non-recurring: Maryland Financial Bank stock — — 30 30 Impaired loans — — 3,532 3,532 OREO — 114 — 114 $ — $ 89,463 $ 3,562 $ 93,025 The estimated fair values of the Company’s financial instruments at June 30, 2018 and December 31, 2017 are summarized below. The fair values of a significant portion of these financial instruments are estimates derived using present value techniques and may not be indicative of the net realizable or liquidation values. Also, the calculation of estimated fair values is based on market conditions at a specific point in time and may not reflect current or future fair values. June 30, 2018 December 31, 2017 (dollars in thousands) Carrying Fair Carrying Fair Amount Value Amount Value Financial assets: Cash and due from banks $ 2,584 $ 2,584 $ 2,610 $ 2,610 Interest-bearing deposits in other financial institutions 5,498 5,498 9,846 9,846 Federal funds sold 197 197 149 149 Investment securities available for sale 87,314 87,314 89,349 89,349 Investments in restricted stock 1,443 1,443 1,232 1,232 Ground rents 150 150 153 153 Loans, less allowance for credit losses 287,124 285,394 269,023 275,819 Accrued interest receivable 1,142 1,142 1,133 1,133 Cash value of life insurance 7,780 7,780 8,713 8,713 Financial liabilities: Deposits 341,807 319,687 334,238 324,512 Long-term borrowings — — — — Short-term borrowings 25,000 25,110 20,000 20,739 Accrued interest payable 136 136 101 101 Unrecognized financial instruments: Commitments to extend credit 33,796 33,796 19,109 19,109 Standby letters of credit 1,025 1,025 71 71 The following presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments. (dollars in thousands) Carrying Fair June 30, 2018 Amount Value Level 1 Level 2 Level 3 Financial instruments - Assets Cash and cash equivalents $ 8,279 $ 8,279 $ 8,279 — $ — Loans receivable, net 287,124 285,394 — — 285,394 Cash value of life insurance 7,780 7,780 — 7,780 — Financial instruments - Liabilities Deposits 341,807 319,687 — 319,687 — Short-term debt 25,000 25,110 — 25,110 — Fair values are based on quoted market prices for similar instruments or estimated using discounted cash flows. The discounts used are estimated using comparable market rates for similar types of instruments adjusted to be commensurate with the credit risk, overhead costs and optionality of such instruments. The fair value of cash and due from banks, federal funds sold, investments in restricted stocks and accrued interest receivable are equal to the carrying amounts. The fair values of investment securities are determined using market quotations. The fair value of loans receivable is estimated using discounted cash flow analysis. The fair value of non-interest bearing deposits, interest-bearing checking, savings, and money market deposit accounts, securities sold under agreements to repurchase, and accrued interest payable are equal to the carrying amounts. The fair value of fixed-maturity time deposits is estimated using discounted cash flow analysis. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 30, 2018 | |
RECENT ACCOUNTING PRONOUNCEMENTS | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 7 – RECENT ACCOUNTING PRONOUNCEMENTS The FASB has issued several exposure drafts which, if adopted, would significantly alter the Company’s (and all other financial institutions’) method of accounting for, and reporting, its financial assets and some liabilities from a historical cost method to a fair value method of accounting as well as the reported amount of net interest income. The Company has not determined the extent of the possible changes at this time. The exposure drafts are in different stages of review, approval and possible adoption. ASU 2014‑09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014‑09 implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 2014‑09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014‑09 was effective for the Company on January 1, 2018 and did not have a significant impact on our financial statements. ASU 2016‑1, “No. 2016‑01, Financial Instruments – Overall (Subtopic 825‑10): Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 is intended to improve the recognition and measurement of financial instruments by requiring equity investments to be measured at fair value with changes in fair value recognized in net income; requiring public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requiring separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements; eliminating the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured and amortized at cost on the balance sheet; and requiring a reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. ASU 2016-01 is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2017. The amendments should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values (including disclosure requirements) should be applied prospectively to equity investments that exist as of the date of adoption. The Company adopted ASU 2016-01 on January 1, 2018 and it did not have a material impact on the consolidated financial statement. The Bank’s equity securities are membership stocks in the Federal Home Loan Bank and Maryland Financial Bank and thereby excluded from fair value pricing. For exit pricing on loans, the Company used data on recent originations which captured expectations of the credit risk “premium” and an analysis of prepayments which captures the Company’s historical prepayment experience. ASU 2016‑02 “Leases (Topic 842).” ASU 2016‑02 will, among other things, require lessees to recognize a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016‑02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model and ASC Topic 606, “Revenue from Contracts with Customers.” ASU 2016‑2 will be effective for us on January 1, 2019 and will require transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the potential impact of ASU 2016‑02 on our financial statements. ASU 2016‑05 “Derivatives and Hedging (Topic 815) Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.” ASU 2016‑05 clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under ASC Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. ASU 2016‑05 was effective for us on January 1, 2017 and did not have a significant impact on our financial statements. ASU 2016‑09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” Under ASU 2016‑09 all excess tax benefits and tax deficiencies related to share-based payment awards should be recognized as income tax expense or benefit in the income statement during the period in which they occur. Previously, such amounts were recorded in the pool of excess tax benefits included in additional paid-in capital, if such pool was available. Because excess tax benefits are no longer recognized in additional paid-in capital, the assumed proceeds from applying the treasury stock method when computing earnings per share should exclude the amount of excess tax benefits that would have previously been recognized in additional paid-in capital. Additionally, excess tax benefits should be classified along with other income tax cash flows as an operating activity rather than a financing activity, as was previously the case. ASU 2016‑09 also provides that an entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur. ASU 2016‑09 changes the threshold to qualify for equity classification (rather than as a liability) to permit withholding up to the maximum statutory tax rates (rather than the minimum as was previously the case) in the applicable jurisdictions. ASU 016‑09 was effective on January 1, 2017 and did not have a significant impact on our financial statements. ASU No. 2016‑13, “Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments” which updated guidance intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The updated guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires the consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The updated guidance is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is currently assessing the impact of the new guidance on its consolidated financial statements. ASU 2016‑15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016‑15”). This ASU addresses the following eight specific cash flow issues: Debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (COLIs) (including bank-owned life insurance policies (BOLIs)); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. ASU 2016‑15 is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early application is permitted, including adoption in an interim period. The Company’s adoption of this guidance did not have a material effect on the Company’s consolidated financial statements. ASU 2016‑18, “Statement of Cash Flows (Topic 230) - Restricted Cash.” ASU 2016‑18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016‑18 was effective for us on January 1, 2018 and did not have a significant impact on our financial statements. ASU 2017‑01, “Business Combinations (Topic 805) - Clarifying the Definition of a Business.” ASU 2017‑01 clarifies the definition and provides a more robust framework to use in determining when a set of assets and activities constitutes a business. ASU 2017‑01 is intended to provide guidance when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017‑01 was effective for us on January 1, 2018 and did not have a significant impact on our financial statements. ASU 2017‑08, “Premium Amortization on Purchased Callable Debt Securities.” This ASU shortens the amortization period for the premium on certain purchased callable debt securities to the earliest call date. Today, entities generally amortize the premium over the contractual life of the security. The new guidance does not change the accounting for purchased callable debt securities held at a discount; the discount continues to be amortized to maturity. ASU No. 2017‑08 is effective for interim and annual reporting periods beginning after December 15, 2018; early adoption is permitted. The guidance calls for a modified retrospective transition approach under which a cumulative-effect adjustment will be made to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company is currently assessing the impact of the new guidance on its consolidated financial statements. ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This standard better aligns an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedge instruments and the hedged item in the financial statements. Adoption for this ASU is required for fiscal years and interim periods beginning after December 15, 2018 and early adoption is permitted. The Company is currently assessing the impact of the new guidance on its consolidated financial statements. ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this ASU allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The ASU does not have any impact on the underlying ASC 740 guidance that requires the effect of a change in tax law be included in income from continuing operations. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted and should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company adopted the guidance in the ASU in its December 31, 2017 consolidated financial statements resulting in a reclassification of $0.1 million of stranded tax effects related to net unrealized losses on investment securities. The impact was not material. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of presentation | – BASIS OF PRESENTATION In management’s opinion, the accompanying unaudited consolidated financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim period reporting, reflect all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the financial position at June 30, 2018 and December 31, 2017, the results of operations for the three- and six-month periods ended June 30, 2018 and 2017, and the statements of cash flows for the three- and six-month periods ended June 30, 2018 and 2017. The operating results for the three- and six-month period ended June 30, 2018 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2018 or any future interim period. The consolidated balance sheet at December 31, 2017 has been derived from the audited financial statements included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission (the “SEC”) on April 2, 2018. The unaudited consolidated financial statements for June 30, 2018 and 2017, the consolidated balance sheet at December 31, 2017, and accompanying notes should be read in conjunction with the Company’s audited consolidated financial statements and the accompanying notes thereto that are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, The Bank of Glen Burnie and GBB Properties. Consolidation resulted in the elimination of all intercompany accounts and transactions. |
Cash Flow Presentation | Cash Flow Presentation In the statements of cash flows, cash and cash equivalents include cash on hand, amounts due from banks, Federal Home Loan Bank of Atlanta (“FHLB Atlanta”) overnight deposits, and federal funds sold. Generally, federal funds are sold for one-day periods. |
Reclassifications | Reclassifications Certain items in the 2017 consolidated financial statements have been reclassified to conform to the 2018 classifications. The reclassifications had no effect on previously reported results of operations or retained earnings. |
Use of Estimates | Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the determination of the allowance for loan losses (the “allowance”); the fair value of financial instruments, such as loans and investment securities; benefit plan obligations and expenses; and the valuation of deferred tax assets and liabilities. |
Recent Accounting Pronouncements and Developments | RECENT ACCOUNTING PRONOUNCEMENTS The FASB has issued several exposure drafts which, if adopted, would significantly alter the Company’s (and all other financial institutions’) method of accounting for, and reporting, its financial assets and some liabilities from a historical cost method to a fair value method of accounting as well as the reported amount of net interest income. The Company has not determined the extent of the possible changes at this time. The exposure drafts are in different stages of review, approval and possible adoption. ASU 2014‑09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014‑09 implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 2014‑09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014‑09 was effective for the Company on January 1, 2018 and did not have a significant impact on our financial statements. ASU 2016‑1, “No. 2016‑01, Financial Instruments – Overall (Subtopic 825‑10): Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 is intended to improve the recognition and measurement of financial instruments by requiring equity investments to be measured at fair value with changes in fair value recognized in net income; requiring public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requiring separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements; eliminating the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured and amortized at cost on the balance sheet; and requiring a reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. ASU 2016-01 is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2017. The amendments should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values (including disclosure requirements) should be applied prospectively to equity investments that exist as of the date of adoption. The Company adopted ASU 2016-01 on January 1, 2018 and it did not have a material impact on the consolidated financial statement. The Bank’s equity securities are membership stocks in the Federal Home Loan Bank and Maryland Financial Bank and thereby excluded from fair value pricing. For exit pricing on loans, the Company used data on recent originations which captured expectations of the credit risk “premium” and an analysis of prepayments which captures the Company’s historical prepayment experience. ASU 2016‑02 “Leases (Topic 842).” ASU 2016‑02 will, among other things, require lessees to recognize a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016‑02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model and ASC Topic 606, “Revenue from Contracts with Customers.” ASU 2016‑2 will be effective for us on January 1, 2019 and will require transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the potential impact of ASU 2016‑02 on our financial statements. ASU 2016‑05 “Derivatives and Hedging (Topic 815) Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.” ASU 2016‑05 clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under ASC Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. ASU 2016‑05 was effective for us on January 1, 2017 and did not have a significant impact on our financial statements. ASU 2016‑09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” Under ASU 2016‑09 all excess tax benefits and tax deficiencies related to share-based payment awards should be recognized as income tax expense or benefit in the income statement during the period in which they occur. Previously, such amounts were recorded in the pool of excess tax benefits included in additional paid-in capital, if such pool was available. Because excess tax benefits are no longer recognized in additional paid-in capital, the assumed proceeds from applying the treasury stock method when computing earnings per share should exclude the amount of excess tax benefits that would have previously been recognized in additional paid-in capital. Additionally, excess tax benefits should be classified along with other income tax cash flows as an operating activity rather than a financing activity, as was previously the case. ASU 2016‑09 also provides that an entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur. ASU 2016‑09 changes the threshold to qualify for equity classification (rather than as a liability) to permit withholding up to the maximum statutory tax rates (rather than the minimum as was previously the case) in the applicable jurisdictions. ASU 016‑09 was effective on January 1, 2017 and did not have a significant impact on our financial statements. ASU No. 2016‑13, “Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments” which updated guidance intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The updated guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires the consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The updated guidance is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is currently assessing the impact of the new guidance on its consolidated financial statements. ASU 2016‑15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016‑15”). This ASU addresses the following eight specific cash flow issues: Debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (COLIs) (including bank-owned life insurance policies (BOLIs)); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. ASU 2016‑15 is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early application is permitted, including adoption in an interim period. The Company’s adoption of this guidance did not have a material effect on the Company’s consolidated financial statements. ASU 2016‑18, “Statement of Cash Flows (Topic 230) - Restricted Cash.” ASU 2016‑18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016‑18 was effective for us on January 1, 2018 and did not have a significant impact on our financial statements. ASU 2017‑01, “Business Combinations (Topic 805) - Clarifying the Definition of a Business.” ASU 2017‑01 clarifies the definition and provides a more robust framework to use in determining when a set of assets and activities constitutes a business. ASU 2017‑01 is intended to provide guidance when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017‑01 was effective for us on January 1, 2018 and did not have a significant impact on our financial statements. ASU 2017‑08, “Premium Amortization on Purchased Callable Debt Securities.” This ASU shortens the amortization period for the premium on certain purchased callable debt securities to the earliest call date. Today, entities generally amortize the premium over the contractual life of the security. The new guidance does not change the accounting for purchased callable debt securities held at a discount; the discount continues to be amortized to maturity. ASU No. 2017‑08 is effective for interim and annual reporting periods beginning after December 15, 2018; early adoption is permitted. The guidance calls for a modified retrospective transition approach under which a cumulative-effect adjustment will be made to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company is currently assessing the impact of the new guidance on its consolidated financial statements. ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This standard better aligns an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedge instruments and the hedged item in the financial statements. Adoption for this ASU is required for fiscal years and interim periods beginning after December 15, 2018 and early adoption is permitted. The Company is currently assessing the impact of the new guidance on its consolidated financial statements. ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this ASU allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The ASU does not have any impact on the underlying ASC 740 guidance that requires the effect of a change in tax law be included in income from continuing operations. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted and should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company adopted the guidance in the ASU in its December 31, 2017 consolidated financial statements resulting in a reclassification of $0.1 million of stranded tax effects related to net unrealized losses on investment securities. The impact was not material. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
EARNINGS PER SHARE | |
Schedule of earnings per common share | Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Basic and diluted earnings per share: Net income $ 477,685 $ 337,927 $ 733,154 $ 653,713 Weighted average common shares outstanding 2,806,599 2,792,656 2,804,565 2,791,824 Basic and dilutive net income per share $ 0.17 $ 0.12 $ 0.26 $ 0.23 |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
INVESTMENT SECURITIES | |
Schedule of summary of investment securities | At June 30, 2018 Gross Gross Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value Collateralized mortgage obligations $ 22,923 $ 13 $ (918) $ 22,018 Agency mortgage-backed securities 28,055 4 (1,056) 27,003 Municipal securities 35,330 75 (533) 34,872 U.S. Government agency securities 1,999 — (64) 1,935 U.S. Treasury securities 1,501 — (15) 1,486 Total securities available for sale $ 89,808 $ 92 $ (2,586) $ 87,314 At December 31, 2017 Gross Gross Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value Collateralized mortgage obligations $ 24,063 $ 20 $ (569) $ 23,514 Agency mortgage-backed securities 25,725 4 (500) 25,229 Municipal securities 35,453 339 (159) 35,633 U.S. Government agency securities 3,526 — (46) 3,480 U.S. Treasury securities 1,501 — (8) 1,493 Total securities available for sale $ 90,268 $ 363 $ (1,282) $ 89,349 |
Schedule of gross unrealized losses and fair value, aggregated by investment category and length of time in continuous unrealized loss position | The gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2018 and December 31, 2017 are as follows: June 30, 2018 Less than 12 months 12 months or more Total Securities available for sale: Fair Unrealized Fair Unrealized Fair Unrealized Value Loss Value Loss Value Loss (dollars in thousands) Collateralized mortgage obligations $ 6,053 $ (169) $ 14,783 $ (749) $ 20,836 $ (918) Agency mortgage-backed securities 8,799 (273) 18,019 (783) 26,818 (1,056) Municipal securities 17,130 (310) 6,099 (223) 23,229 (533) U.S. Government agency securities 1,935 (64) — — 1,935 (64) U.S. Treasury securities 1,485 (15) — — 1,485 (15) $ 35,402 $ (831) $ 38,901 $ (1,755) $ 74,303 $ (2,586) December 31, 2017 Less than 12 months 12 months or more Total Securities available for sale: Fair Unrealized Fair Unrealized Fair Unrealized Value Loss Value Loss Value Loss (dollars in thousands) Collateralized mortgage obligations $ 6,531 $ (62) $ 15,678 $ (507) $ 22,209 $ (569) Agency mortgage-backed securities 6,802 (80) 18,218 (420) 25,020 (500) Municipal securities 2,396 (11) 6,230 (148) 8,626 (159) U.S. Government agency securities 2,965 (37) 515 (9) 3,480 (46) U.S. Treasury securities 1,494 (8) — — 1,494 (8) $ 20,188 $ (198) $ 40,641 $ (1,084) $ 60,829 $ (1,282) |
Schedule of contractual maturities of investment securities | Contractual maturities of debt securities at June 30, 2018 are shown below. Actual maturities may differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties. At June 30, 2018 Amortized Fair Yield (dollars in thousands) Cost Value (1), (2) Available for sale securities maturing: Within one year $ 1,198 $ 1,204 3.72 % Over one to five years 1,815 1,791 1.50 % Over five to ten years 19,145 18,603 2.12 % Over ten years 67,650 65,716 2.79 % Total debt securities $ 89,808 $ 87,314 _____________________ (1) Yields are stated as book yields which are adjusted for amortization and accretion of purchase premiums and discounts, respectively. (2) Yields on tax-exempt obligations have been computed on a tax-equivalent basis. |
LOANS RECEIVABLE AND ALLOWANC19
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES | |
Schedule of major categories of loans | June 30, December 31, 2018 2017 (dollars in thousands) Amount % Amount % Consumer $ 14,453 5 $ 16,112 Residential real estate 82,144 29 81,926 Indirect 101,181 35 85,186 Commercial 12,028 4 11,257 Construction 3,472 1 3,536 Commercial real estate 76,130 26 73,595 Loans, net of deferred fees and costs 289,408 100 271,612 100 Less: Allowance for loan losses (2,284) (2,589) Loans, net $ 287,124 $ 269,023 |
Schedule of total allowance by loan segment | June 30, 2018 Residential Commercial (dollars in thousands) Consumer Real Estate Indirect Commercial Construction Real Estate Unallocated Total Balance, beginning of year $ 214 $ 1,061 $ 774 $ 237 $ 12 $ 291 $ — $ 2,589 Charge-offs (92) (514) (163) — — — — (769) Recoveries 12 2 95 — — — — 109 Provision for loan losses 43 112 93 9 (1) 99 — 355 Balance, end of year $ 177 $ 661 $ 799 $ 246 $ 11 $ 390 $ — $ 2,284 Individually evaluated for impairment: Balance in allowance $ 27 $ — $ — $ 211 $ — $ — $ — $ 238 Related loan balance 96 2,006 — 211 — 3,016 — 5,329 Collectively evaluated for impairment: Balance in allowance $ 150 $ 661 $ 799 $ 35 $ 11 $ 390 $ — $ 2,046 Related loan balance 14,357 80,138 101,181 11,817 3,472 73,114 — 284,079 December 31, 2017 Residential Commercial (dollars in thousands) Consumer Real Estate Indirect Commercial Construction Real Estate Unallocated Total Balance, beginning of year $ 182 $ 1,042 $ 693 $ 284 $ 10 $ 259 $ 14 $ 2,484 Charge-offs (96) (3) (458) (9) — — — (566) Recoveries 8 27 286 — — 14 — 335 Provision for loan losses 120 (5) 253 (38) 2 18 (14) 336 Balance, end of year $ 214 $ 1,061 $ 774 $ 237 $ 12 $ 291 $ — $ 2,589 Individually evaluated for impairment: Balance in allowance $ 52 $ 513 $ — $ 217 $ — $ — $ — $ 782 Related loan balance 160 2,345 — 217 — 1,176 — 3,898 Collectively evaluated for impairment: Balance in allowance $ 162 $ 548 $ 774 $ 20 $ 12 $ 291 $ — $ 1,807 Related loan balance 15,952 79,580 85,186 11,040 3,536 72,420 — 267,714 |
Schedule of allowances for credit losses | June 30, June 30, (dollars in thousands) 2018 2017 Average loans $ 281,104 $ 269,533 Net charge offs to average loans (annualized) 0.48 % 0.04 % |
Schedule of reserve for unfunded commitments | Six Months Ended June 30, (dollars in thousands) 2018 2017 Beginning balance $ 24 $ 25 Reduction of unfunded reserve (18) (20) Provisions charged to operations 37 17 Ending balance $ 43 $ 22 |
Schedule of current, past due, and non-accrual loans by categories of loans and restructured loans | At June 30, 2018 90 Days or (dollars in thousands) 30-89 Days More and Current Past Due Still Accruing Nonaccrual Total Consumer $ 14,094 $ 237 $ — $ 122 $ 14,453 Residential Real Estate 80,232 159 — 1,753 82,144 Indirect 100,453 599 — 129 101,181 Commercial 12,023 — 5 — 12,028 Construction 3,133 — 29 310 3,472 Commercial Real Estate 73,759 — — 2,371 76,130 $ 283,694 $ 995 $ 34 $ 4,685 $ 289,408 At December 31, 2017 90 Days or (dollars in thousands) 30-89 Days More and Current Past Due Still Accruing Nonaccrual Total Consumer $ 15,823 $ 80 $ 24 $ 185 $ 16,112 Residential Real Estate 79,205 597 — 2,124 81,926 Indirect 83,932 1,166 — 88 85,186 Commercial 11,203 — 6 48 11,257 Construction 3,188 — 30 318 3,536 Commercial Real Estate 73,088 — — 507 73,595 $ 266,439 $ 1,843 $ 60 $ 3,270 $ 271,612 |
Schedule of impaired financing receivables | June 30, 2018 Unpaid Interest Average (dollars in thousands) Recorded Principal Income Specific Recorded Investment Balance Recognized Reserve Investment Impaired loans with specific reserves: Consumer $ 96 $ 96 $ 1 $ 27 $ 137 Commercial 211 211 6 211 214 Total impaired loans with specific reserves 307 307 7 238 351 Impaired loans with no specific reserve: Residential Real Estate $ 1,735 $ 2,161 $ 4 $ — $ 2,871 Indirect 129 129 — — — Construction 228 228 — — 236 Commercial Real Estate 3,099 3,409 95 — 4,758 Total impaired loans with no specific reserve $ 5,191 $ 5,927 $ 99 — $ 7,865 December 31, 2017 Unpaid Interest Average (dollars in thousands) Recorded Principal Income Specific Recorded Investment Balance Recognized Reserve Investment Impaired loans with specific reserves: Consumer $ 160 $ 160 $ 5 $ 52 $ 205 Residential Real Estate 1,294 1,322 — 513 1,312 Commercial 217 217 — 217 223 Total impaired loans with specific reserves 1,671 1,699 5 782 1,740 Impaired loans with no specific reserve: Consumer $ 49 $ 49 $ — — $ — Residential Real Estate 992 1,760 11 — 1,572 Indirect 88 88 — — — Commercial 2 2 — — 2 Construction 318 318 — — 322 Commercial Real Estate 1,194 1,194 39 — 1,632 Total impaired loans with no specific reserve $ 2,643 $ 3,411 $ 50 — $ 3,528 |
Schedule of allowance for loan loss and the unearned income on loans | June 30, December 31, (dollars in thousands) 2018 2017 Troubled debt restructured loans $ 256 $ 263 Non-accrual and 90+ days past due and still accruing loans to average loans 1.48 % 1.32 % Allowance for loan losses to nonaccrual & 90+ days past due and still accruing loans 58.6 % 77.7 % |
Schedule of non accrual loans | Residential Commercial (dollars in thousands) Consumer Real Estate Indirect Commercial Construction Real Estate Totals December 31, 2016 403 2,508 193 — — 647 3,751 Transfers into nonaccrual 4 40 349 — 84 132 609 Loans paid down/payoffs (67) (82) (96) — (84) (6) (335) Loans returned to accrual status — (132) (112) — — — (244) Loans charged off (4) (3) (247) — — — (254) June 30, 2017 336 2,331 87 — — 773 3,527 December 31, 2017 185 2,124 88 48 318 507 3,270 Transfers into nonaccrual 44 183 305 — — 2,000 2,532 Loans paid down/payoffs (15) (41) (51) (48) (8) (136) (299) Loans returned to accrual status — — (50) — — — (50) Loans charged off (92) (513) (163) — — — (768) June 30, 2018 122 1,753 129 — 310 2,371 4,685 |
Schedule of risk ratings of loans by categories of loans | The following table provides information with respect to the Company's credit quality indicators by loan portfolio segment at June 30, 2018: June 30, 2018 Residential Commercial (dollars in thousands) Consumer Real Estate Indirect Commercial Construction Real Estate Total Pass $ 14,119 $ 79,828 $ 100,143 $ 11,817 $ 3,472 $ 73,031 $ 282,410 Special mention 187 215 610 — — — 1,012 Substandard 146 2,101 355 211 — 3,099 5,912 Doubtful 1 — 73 — — — 74 Loss — — — — — — — $ 14,453 $ 82,144 $ 101,181 $ 12,028 $ 3,472 $ 76,130 $ 289,408 Nonaccrual 122 1,753 129 — 310 2,371 4,685 Troubled debt restructures 45 — — 211 — — 256 Number of TDRs accounts 1 — — 1 — — 2 Non-performing TDRs 45 — — — — — 45 Number of non-performing TDR accounts 1 — — — — — 1 December 31, 2017 Residential Commercial (dollars in thousands) Consumer Real Estate Indirect Commercial Construction Real Estate Total Pass $ 15,823 $ 79,060 $ 83,756 $ 11,038 $ 3,218 $ 72,074 $ 264,969 Special mention 77 384 1,027 2 — 327 1,817 Substandard 188 2,482 362 217 318 1,194 4,761 Doubtful 24 — 41 — — — 65 Loss — — — — — — — $ 16,112 $ 81,926 $ 85,186 $ 11,257 $ 3,536 $ 73,595 $ 271,612 Nonaccrual 185 2,124 88 48 318 507 3,270 Troubled debt restructures 46 — — 217 — — 263 Number of TDRs accounts 1 — — 1 — — 2 Non-performing TDRs 46 — — — — — 46 Number of non-performing TDR accounts 1 — — — — — 1 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
FAIR VALUE. | |
Schedule of changes in asset subject to fair value measurement by Level | Fair (dollars in thousands) Level 1 Level 2 Level 3 Value June 30, 2018 Recurring: Securities available for sale Collateralized mortgage obligations $ — $ 22,018 $ — $ 22,018 Agency mortgage-backed securities — 27,003 — 27,003 Municipal securities — 34,872 — 34,872 U.S. Government agency securities — 1,935 — 1,935 U.S. Treasury securities — 1,486 — 1,486 Interest rate swap — 431 — 431 Non-recurring: Maryland Financial Bank stock — — 30 30 Impaired loans — — 5,260 5,260 OREO — 114 — 114 $ — $ 87,859 $ 5,290 $ 93,149 December 31, 2017 Recurring: Securities available for sale Collateralized mortgage obligations $ — $ 23,514 $ — $ 23,514 Agency mortgage-backed securities — 25,229 — 25,229 Municipal securities — 35,633 — 35,633 U.S. Government agency securities — 3,480 — 3,480 U.S. Treasury securities — 1,493 — 1,493 Non-recurring: Maryland Financial Bank stock — — 30 30 Impaired loans — — 3,532 3,532 OREO — 114 — 114 $ — $ 89,463 $ 3,562 $ 93,025 |
Schedule of estimated fair values of financial instruments | June 30, 2018 December 31, 2017 (dollars in thousands) Carrying Fair Carrying Fair Amount Value Amount Value Financial assets: Cash and due from banks $ 2,584 $ 2,584 $ 2,610 $ 2,610 Interest-bearing deposits in other financial institutions 5,498 5,498 9,846 9,846 Federal funds sold 197 197 149 149 Investment securities available for sale 87,314 87,314 89,349 89,349 Investments in restricted stock 1,443 1,443 1,232 1,232 Ground rents 150 150 153 153 Loans, less allowance for credit losses 287,124 285,394 269,023 275,819 Accrued interest receivable 1,142 1,142 1,133 1,133 Cash value of life insurance 7,780 7,780 8,713 8,713 Financial liabilities: Deposits 341,807 319,687 334,238 324,512 Long-term borrowings — — — — Short-term borrowings 25,000 25,110 20,000 20,739 Accrued interest payable 136 136 101 101 Unrecognized financial instruments: Commitments to extend credit 33,796 33,796 19,109 19,109 Standby letters of credit 1,025 1,025 71 71 |
Schedule of fair value hierarchy of financial instruments | (dollars in thousands) Carrying Fair June 30, 2018 Amount Value Level 1 Level 2 Level 3 Financial instruments - Assets Cash and cash equivalents $ 8,279 $ 8,279 $ 8,279 — $ — Loans receivable, net 287,124 285,394 — — 285,394 Cash value of life insurance 7,780 7,780 — 7,780 — Financial instruments - Liabilities Deposits 341,807 319,687 — 319,687 — Short-term debt 25,000 25,110 — 25,110 — |
EARNINGS PER SHARE - Basic earn
EARNINGS PER SHARE - Basic earnings per share of common stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Basic and diluted: | ||||||
Options outstanding | 0 | 0 | ||||
Net income | $ 478 | $ 338 | $ 733 | $ 654 | ||
Weighted average common shares outstanding (in shares) | 2,806,599 | 2,792,656 | 2,804,565 | 2,791,824 | ||
Basic net income per share (in dollars per share) | $ 0.17 | $ 0.12 | $ 0.26 | $ 0.23 |
INVESTMENT SECURITIES (Details)
INVESTMENT SECURITIES (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Investment Securities | ||
Trading Securities | $ 0 | $ 0 |
Held-to-maturity Securities | 0 | 0 |
Amortized Cost | 89,808,000 | 90,268,000 |
Gross Unrealized Gains | 92,000 | 363,000 |
Gross Unrealized Losses | (2,586,000) | (1,282,000) |
Fair Value | 87,314,000 | 89,349,000 |
Collaterized mortgage obligations | ||
Investment Securities | ||
Amortized Cost | 22,923,000 | 24,063,000 |
Gross Unrealized Gains | 13,000 | 20,000 |
Gross Unrealized Losses | (918,000) | (569,000) |
Fair Value | 22,018,000 | 23,514,000 |
Agency mortgage-backed securities. | ||
Investment Securities | ||
Amortized Cost | 28,055,000 | 25,725,000 |
Gross Unrealized Gains | 4,000 | 4,000 |
Gross Unrealized Losses | (1,056,000) | (500,000) |
Fair Value | 27,003,000 | 25,229,000 |
Municipal securities | ||
Investment Securities | ||
Amortized Cost | 35,330,000 | 35,453,000 |
Gross Unrealized Gains | 75,000 | 339,000 |
Gross Unrealized Losses | (533,000) | (159,000) |
Fair Value | 34,872,000 | 35,633,000 |
U.S. Government agency securities | ||
Investment Securities | ||
Amortized Cost | 1,999,000 | 3,526,000 |
Gross Unrealized Losses | (64,000) | (46,000) |
Fair Value | 1,935,000 | 3,480,000 |
U.S. Treasury securities | ||
Investment Securities | ||
Amortized Cost | 1,501,000 | 1,501,000 |
Gross Unrealized Losses | (15,000) | (8,000) |
Fair Value | $ 1,486,000 | $ 1,493,000 |
INVESTMENT SECURITIES - Gross U
INVESTMENT SECURITIES - Gross Unrealized Losses and Fair Value Aggregated by Investment Category and Length of Time in Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Investment Securities | ||
Less than 12 months Fair Value | $ 35,402 | $ 20,188 |
Less than 12 months Unrealized Loss | (831) | (198) |
12 months or more Fair Value | 38,901 | 40,641 |
12 months or more Unrealized Loss | (1,755) | (1,084) |
Total Fair Value | 74,303 | 60,829 |
Total Unrealized Loss | (2,586) | (1,282) |
Collaterized mortgage obligations | ||
Investment Securities | ||
Less than 12 months Fair Value | 6,053 | 6,531 |
Less than 12 months Unrealized Loss | (169) | (62) |
12 months or more Fair Value | 14,783 | 15,678 |
12 months or more Unrealized Loss | (749) | (507) |
Total Fair Value | 20,836 | 22,209 |
Total Unrealized Loss | (918) | (569) |
Agency mortgage-backed securities. | ||
Investment Securities | ||
Less than 12 months Fair Value | 8,799 | 6,802 |
Less than 12 months Unrealized Loss | (273) | (80) |
12 months or more Fair Value | 18,019 | 18,218 |
12 months or more Unrealized Loss | (783) | (420) |
Total Fair Value | 26,818 | 25,020 |
Total Unrealized Loss | (1,056) | (500) |
Municipal securities | ||
Investment Securities | ||
Less than 12 months Fair Value | 17,130 | 2,396 |
Less than 12 months Unrealized Loss | (310) | (11) |
12 months or more Fair Value | 6,099 | 6,230 |
12 months or more Unrealized Loss | (223) | (148) |
Total Fair Value | 23,229 | 8,626 |
Total Unrealized Loss | (533) | (159) |
U.S. Government agency securities | ||
Investment Securities | ||
Less than 12 months Fair Value | 1,935 | 2,965 |
Less than 12 months Unrealized Loss | (64) | (37) |
12 months or more Fair Value | 515 | |
12 months or more Unrealized Loss | (9) | |
Total Fair Value | 1,935 | 3,480 |
Total Unrealized Loss | (64) | (46) |
U.S. Treasury securities | ||
Investment Securities | ||
Less than 12 months Fair Value | 1,485 | 1,494 |
Less than 12 months Unrealized Loss | (15) | (8) |
Total Fair Value | 1,485 | 1,494 |
Total Unrealized Loss | $ (15) | $ (8) |
INVESTMENT SECURITIES - Contrac
INVESTMENT SECURITIES - Contractual Maturities of Investment Securities (Details) $ in Thousands | Jun. 30, 2018USD ($)security | Dec. 31, 2017USD ($)security |
INVESTMENT SECURITIES | ||
Number of securities continuous unrealized loss position more than twelve months | security | 148 | 114 |
Available for Sale Amortized Cost | ||
Due within one year | $ 1,198 | |
Due over one to five years | 1,815 | |
Due over five to ten years | 19,145 | |
Due over ten years | 67,650 | |
Amortized Cost | 89,808 | $ 90,268 |
Available for Sale Fair Value | ||
Due within one year | 1,204 | |
Due over one to five years | 1,791 | |
Due over five to ten years | 18,603 | |
Due over ten years | 65,716 | |
Fair Value | $ 87,314 | $ 89,349 |
Available for Sale, Yield | ||
Within one year | 3.72% | |
Over one to five years | 1.50% | |
Over five to ten years | 2.12% | |
Over ten years | 2.79% |
LOANS RECEIVABLE AND ALLOWANC25
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES - Major Categories of Loans (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Loans, net of deferred fees and costs | $ 289,408 | $ 271,612 |
Allowance for loan losses | (2,284) | (2,589) |
Loans and leases receivable, total | $ 287,124 | $ 269,023 |
Loans and lease receivable allowances, percentage | 100.00% | 100.00% |
Increase (decrease) in loans and leases receivable | $ 18,100 | |
Percentage of increase (decrease) in loans and leases receivable | 6.73% | |
Consumer | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Loans, net of deferred fees and costs | $ 14,453 | $ 16,112 |
Loans and lease receivable allowances, percentage | 5.00% | 6.00% |
Increase (decrease) in loans and leases receivable | $ 1,600 | |
Percentage of increase (decrease) in loans and leases receivable | 10.30% | |
Residential Real estate | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Loans, net of deferred fees and costs | $ 82,144 | $ 81,926 |
Loans and lease receivable allowances, percentage | 29.00% | 30.00% |
Increase (decrease) in loans and leases receivable | $ 200 | |
Percentage of increase (decrease) in loans and leases receivable | 0.27% | |
Indirect | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Loans, net of deferred fees and costs | $ 101,181 | $ 85,186 |
Loans and lease receivable allowances, percentage | 35.00% | 32.00% |
Increase (decrease) in loans and leases receivable | $ 16,000 | |
Percentage of increase (decrease) in loans and leases receivable | 18.78% | |
Commercial | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Loans, net of deferred fees and costs | $ 12,028 | $ 11,257 |
Loans and lease receivable allowances, percentage | 4.00% | 4.00% |
Increase (decrease) in loans and leases receivable | $ 700 | |
Percentage of increase (decrease) in loans and leases receivable | 6.86% | |
Construction | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Loans, net of deferred fees and costs | $ 3,472 | $ 3,536 |
Loans and lease receivable allowances, percentage | 1.00% | 1.00% |
Commercial Real Estate | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Loans, net of deferred fees and costs | $ 76,130 | $ 73,595 |
Loans and lease receivable allowances, percentage | 26.00% | 27.00% |
Increase (decrease) in loans and leases receivable | $ 2,500 | |
Percentage of increase (decrease) in loans and leases receivable | (3.44%) |
LOANS RECEIVABLE AND ALLOWANC26
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES - Total Allowance by Loan Segment (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||
Balance, beginning of year | $ 2,589,000 | $ 2,484,000 | $ 2,484,000 | ||
Charged off | (769,000) | (254,000) | (566,000) | ||
Recoveries | 109,000 | 335,000 | |||
Provision for loan losses | $ (5,000) | $ (30,000) | 355,000 | 165,000 | 336,000 |
Balance, end of year | 2,284,000 | 2,284,000 | 2,589,000 | ||
Individually evaluated for impairment: | |||||
Individually evaluated for impairment, Balance in allowance | 238,000 | 238,000 | 782,000 | ||
Individually evaluated for impairment, Related loan balance | 5,329,000 | 5,329,000 | 3,898,000 | ||
Collectively evaluated for impairment: | |||||
Collectively evaluated for impairment, Balance in allowance | 2,046,000 | 2,046,000 | 1,807,000 | ||
Collectively evaluated for impairment, Related loan balance | 284,079,000 | 284,079,000 | 267,714,000 | ||
Consumer | |||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||
Balance, beginning of year | 214,000 | 182,000 | 182,000 | ||
Charged off | (92,000) | (96,000) | |||
Recoveries | 12,000 | 8,000 | |||
Provision for loan losses | 43,000 | 120,000 | |||
Balance, end of year | 177,000 | 177,000 | 214,000 | ||
Individually evaluated for impairment: | |||||
Individually evaluated for impairment, Balance in allowance | 27,000 | 27,000 | 52,000 | ||
Individually evaluated for impairment, Related loan balance | 96,000 | 96,000 | 160,000 | ||
Collectively evaluated for impairment: | |||||
Collectively evaluated for impairment, Balance in allowance | 150,000 | 150,000 | 162,000 | ||
Collectively evaluated for impairment, Related loan balance | 14,357,000 | 14,357,000 | 15,952,000 | ||
Residential Real estate | |||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||
Balance, beginning of year | 1,061,000 | 1,042,000 | 1,042,000 | ||
Charged off | (514,000) | (3,000) | |||
Recoveries | 2,000 | 27,000 | |||
Provision for loan losses | 112,000 | (5,000) | |||
Balance, end of year | 661,000 | 661,000 | 1,061,000 | ||
Individually evaluated for impairment: | |||||
Individually evaluated for impairment, Balance in allowance | 513,000 | ||||
Individually evaluated for impairment, Related loan balance | 2,006,000 | 2,006,000 | 2,345,000 | ||
Collectively evaluated for impairment: | |||||
Collectively evaluated for impairment, Balance in allowance | 661,000 | 661,000 | 548,000 | ||
Collectively evaluated for impairment, Related loan balance | 80,138,000 | 80,138,000 | 79,580,000 | ||
Indirect | |||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||
Balance, beginning of year | 774,000 | 693,000 | 693,000 | ||
Charged off | (163,000) | (458,000) | |||
Recoveries | 95,000 | 286,000 | |||
Provision for loan losses | 93,000 | 253,000 | |||
Balance, end of year | 799,000 | 799,000 | 774,000 | ||
Collectively evaluated for impairment: | |||||
Collectively evaluated for impairment, Balance in allowance | 799,000 | 799,000 | 774,000 | ||
Collectively evaluated for impairment, Related loan balance | 101,181,000 | 101,181,000 | 85,186,000 | ||
Commercial | |||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||
Balance, beginning of year | 237,000 | 284,000 | 284,000 | ||
Charged off | (9,000) | ||||
Provision for loan losses | 9,000 | (38,000) | |||
Balance, end of year | 246,000 | 246,000 | 237,000 | ||
Individually evaluated for impairment: | |||||
Individually evaluated for impairment, Balance in allowance | 211,000 | 211,000 | 217,000 | ||
Individually evaluated for impairment, Related loan balance | 211,000 | 211,000 | 217,000 | ||
Collectively evaluated for impairment: | |||||
Collectively evaluated for impairment, Balance in allowance | 35,000 | 35,000 | 20,000 | ||
Collectively evaluated for impairment, Related loan balance | 11,817,000 | 11,817,000 | 11,040,000 | ||
Construction | |||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||
Balance, beginning of year | 12,000 | 10,000 | 10,000 | ||
Provision for loan losses | (1,000) | 2,000 | |||
Balance, end of year | 11,000 | 11,000 | 12,000 | ||
Collectively evaluated for impairment: | |||||
Collectively evaluated for impairment, Balance in allowance | 11,000 | 11,000 | 12,000 | ||
Collectively evaluated for impairment, Related loan balance | 3,472,000 | 3,472,000 | 3,536,000 | ||
Commercial Real Estate | |||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||
Balance, beginning of year | 291,000 | 259,000 | 259,000 | ||
Recoveries | 14,000 | ||||
Provision for loan losses | 99,000 | 18,000 | |||
Balance, end of year | 390,000 | 390,000 | 291,000 | ||
Individually evaluated for impairment: | |||||
Individually evaluated for impairment, Related loan balance | 3,016,000 | 3,016,000 | 1,176,000 | ||
Collectively evaluated for impairment: | |||||
Collectively evaluated for impairment, Balance in allowance | 390,000 | 390,000 | 291,000 | ||
Collectively evaluated for impairment, Related loan balance | $ 73,114,000 | $ 73,114,000 | 72,420,000 | ||
Unallocated | |||||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||||
Balance, beginning of year | $ 14,000 | 14,000 | |||
Provision for loan losses | $ (14,000) |
LOANS RECEIVABLE AND ALLOWANC27
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES - Allowance for credit losses (Details) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018USD ($)borrower | Jun. 30, 2017USD ($)borrower | Dec. 31, 2017USD ($) | |
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES | |||
Outstanding commitments | $ 33,800,000 | $ 24,000,000 | |
Beginning balance | 24,000 | 25,000 | $ 25,000 |
Reduction of unfunded reserve | (18,000) | (20,000) | |
Provisions charged to operations | 37,000 | 17,000 | |
Ending balance | 43,000 | 22,000 | 24,000 |
Loans charged off | 769,000 | 254,000 | $ 566,000 |
Average loans | $ 281,104,000 | $ 269,533,000 | |
Net charge-offs to average loans (annualized) | 0.48% | 0.04% | |
Number of borrowers | borrower | 25 | 38 |
LOANS RECEIVABLE AND ALLOWANC28
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES - Current, past due, and non-accrual loans by categories of loans and restructured loans (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Current | $ 283,694 | $ 266,439 | ||
Non-accrual | 4,685 | 3,270 | $ 3,527 | $ 3,751 |
Total | 289,408 | 271,612 | ||
30-89 Days Past Due | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due | 995 | 1,843 | ||
Financing Receivables, Equal to Greater than 90 Days Past Due | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due | 34 | 60 | ||
Consumer | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Current | 14,094 | 15,823 | ||
Non-accrual | 122 | 185 | 336 | 403 |
Total | 14,453 | 16,112 | ||
Consumer | 30-89 Days Past Due | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due | 237 | 80 | ||
Consumer | Financing Receivables, Equal to Greater than 90 Days Past Due | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due | 24 | |||
Residential Real estate | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Current | 80,232 | 79,205 | ||
Non-accrual | 1,753 | 2,124 | 2,331 | 2,508 |
Total | 82,144 | 81,926 | ||
Residential Real estate | 30-89 Days Past Due | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due | 159 | 597 | ||
Indirect | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Current | 100,453 | 83,932 | ||
Non-accrual | 129 | 88 | 87 | 193 |
Total | 101,181 | 85,186 | ||
Indirect | 30-89 Days Past Due | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due | 599 | 1,166 | ||
Commercial | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Current | 12,023 | 11,203 | ||
Non-accrual | 48 | |||
Total | 12,028 | 11,257 | ||
Commercial | Financing Receivables, Equal to Greater than 90 Days Past Due | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due | 5 | 6 | ||
Construction | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Current | 3,133 | 3,188 | ||
Non-accrual | 310 | 318 | ||
Total | 3,472 | 3,536 | ||
Construction | Financing Receivables, Equal to Greater than 90 Days Past Due | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Past Due | 29 | 30 | ||
Commercial Real Estate | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Current | 73,759 | 73,088 | ||
Non-accrual | 2,371 | 507 | $ 773 | $ 647 |
Total | $ 76,130 | $ 73,595 |
LOANS RECEIVABLE AND ALLOWANC29
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES - Summary of recorded investment amount and related allowance for losses of impaired loans (Details) | 6 Months Ended | |||
Jun. 30, 2018USD ($)borrowerloan | Jun. 30, 2017borrower | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Financing Receivable, Impaired [Line Items] | ||||
Allowance for loan loss | $ 2,284,000 | $ 2,589,000 | $ 2,484,000 | |
Loans outstanding included in current and 30 - 89 days past due | $ 1,000,000 | |||
Number of borrowers | borrower | 25 | 38 | ||
Specific Reserve | $ 226,000 | |||
Home Equity | ||||
Financing Receivable, Impaired [Line Items] | ||||
Loans outstanding included in current and 30 - 89 days past due | 159,000 | |||
Consumer | ||||
Financing Receivable, Impaired [Line Items] | ||||
Allowance for loan loss | $ 177,000 | 214,000 | 182,000 | |
Number of loans | loan | 2 | |||
Amount of consumer and indirect loans, outstanding | $ 96,109 | |||
Amount of consumer and indirect loans, specific reserves | $ 26,827 | |||
Number of borrowers | borrower | 2 | |||
Commercial | ||||
Financing Receivable, Impaired [Line Items] | ||||
Allowance for loan loss | $ 246,000 | 237,000 | 284,000 | |
Loans outstanding included in current and 30 - 89 days past due | 211,000 | |||
Specific Reserve | 211,000 | |||
Commercial Real Estate | ||||
Financing Receivable, Impaired [Line Items] | ||||
Allowance for loan loss | 390,000 | $ 291,000 | $ 259,000 | |
Loans outstanding included in current and 30 - 89 days past due | $ 646,000 |
LOANS RECEIVABLE AND ALLOWANC30
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES - Impaired Financing Receivables (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment with specific reserves | $ 307 | $ 1,671 |
Unpaid Principal Balance with specific reserves | 307 | 1,699 |
Interest Income Recognized with specific reserves | 7 | 5 |
Specific Reserve with specific reserves | 238 | 782 |
Recorded Investment | 351 | 1,740 |
Recorded Investment with no specific reserve | 5,191 | 2,643 |
Unpaid Principal Balance with no specific reserve | 5,927 | 3,411 |
Interest Income Recognized with no specific reserve | 99 | 50 |
Average Recorded Investment with no specific reserve | 7,865 | 3,528 |
Consumer | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment with specific reserves | 96 | 160 |
Unpaid Principal Balance with specific reserves | 96 | 160 |
Interest Income Recognized with specific reserves | 1 | 5 |
Specific Reserve with specific reserves | 27 | 52 |
Recorded Investment | 137 | 205 |
Recorded Investment with no specific reserve | 49 | |
Unpaid Principal Balance with no specific reserve | 49 | |
Indirect | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment with no specific reserve | 129 | 88 |
Unpaid Principal Balance with no specific reserve | 129 | 88 |
Commercial | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment with specific reserves | 211 | 217 |
Unpaid Principal Balance with specific reserves | 211 | 217 |
Interest Income Recognized with specific reserves | 6 | |
Specific Reserve with specific reserves | 211 | 217 |
Recorded Investment | 214 | 223 |
Recorded Investment with no specific reserve | 2 | |
Unpaid Principal Balance with no specific reserve | 2 | |
Average Recorded Investment with no specific reserve | 2 | |
Construction | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment with no specific reserve | 228 | 318 |
Unpaid Principal Balance with no specific reserve | 228 | 318 |
Average Recorded Investment with no specific reserve | 236 | 322 |
Commercial Real Estate | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment with no specific reserve | 3,099 | 1,194 |
Unpaid Principal Balance with no specific reserve | 3,409 | 1,194 |
Interest Income Recognized with no specific reserve | 95 | 39 |
Average Recorded Investment with no specific reserve | 4,758 | 1,632 |
Residential Real estate | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment with specific reserves | 1,294 | |
Unpaid Principal Balance with specific reserves | 1,322 | |
Specific Reserve with specific reserves | 513 | |
Recorded Investment | 1,312 | |
Recorded Investment with no specific reserve | 1,735 | 992 |
Unpaid Principal Balance with no specific reserve | 2,161 | 1,760 |
Interest Income Recognized with no specific reserve | 4 | 11 |
Average Recorded Investment with no specific reserve | $ 2,871 | $ 1,572 |
LOANS RECEIVABLE AND ALLOWANC31
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES - Summary of Allowance for credit losses (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Financing Receivable, Impaired [Line Items] | ||
Troubled debt restructured loans | $ 256,000 | $ 263,000 |
Non-accrual and 90+ days past due and still accruing loans to average loans | 1.48% | 1.32% |
Allowance for credit losses to non-accrual and 90 days or more and still accruing loans | 58.60% | 77.70% |
Commercial | ||
Financing Receivable, Impaired [Line Items] | ||
Troubled debt restructured loans | $ 211,000 | |
Consumer | ||
Financing Receivable, Impaired [Line Items] | ||
Troubled debt restructured loans | $ 45,000 |
LOANS RECEIVABLE AND ALLOWANC32
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES - Non-accrual loans (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Financing Receivable Nonaccrual Status [Roll Forward] | ||
Balance | $ 3,270 | $ 3,751 |
Transfer into non-accrual | 2,532 | 609 |
Loans paid down/payoffs | (299) | (335) |
Loans return to accrual status | (50) | (244) |
Loans charged off | (768) | (254) |
Balance | 4,685 | 3,527 |
Consumer | ||
Financing Receivable Nonaccrual Status [Roll Forward] | ||
Balance | 185 | 403 |
Transfer into non-accrual | 44 | 4 |
Loans paid down/payoffs | (15) | (67) |
Loans charged off | (92) | (4) |
Balance | 122 | 336 |
Residential Real estate | ||
Financing Receivable Nonaccrual Status [Roll Forward] | ||
Balance | 2,124 | 2,508 |
Transfer into non-accrual | 183 | 40 |
Loans paid down/payoffs | (41) | (82) |
Loans return to accrual status | (132) | |
Loans charged off | (513) | (3) |
Balance | 1,753 | 2,331 |
Indirect | ||
Financing Receivable Nonaccrual Status [Roll Forward] | ||
Balance | 88 | 193 |
Transfer into non-accrual | 305 | 349 |
Loans paid down/payoffs | (51) | (96) |
Loans return to accrual status | (50) | (112) |
Loans charged off | (163) | (247) |
Balance | 129 | 87 |
Commercial | ||
Financing Receivable Nonaccrual Status [Roll Forward] | ||
Balance | 48 | |
Loans paid down/payoffs | (48) | |
Construction | ||
Financing Receivable Nonaccrual Status [Roll Forward] | ||
Balance | 318 | |
Transfer into non-accrual | 84 | |
Loans paid down/payoffs | (8) | (84) |
Balance | 310 | |
Commercial Real Estate | ||
Financing Receivable Nonaccrual Status [Roll Forward] | ||
Balance | 507 | 647 |
Transfer into non-accrual | 2,000 | 132 |
Loans paid down/payoffs | (136) | (6) |
Balance | $ 2,371 | $ 773 |
LOANS RECEIVABLE AND ALLOWANC33
LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES - Risk ratings of loans by categories of loans (Details) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018USD ($)loan | Dec. 31, 2017USD ($)loan | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) | |
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | $ 289,408,000 | $ 271,612,000 | ||
Non-accrual | 4,685,000 | 3,270,000 | $ 3,527,000 | $ 3,751,000 |
Troubled debt restructures | 256,000 | 263,000 | ||
Troubled debt restructures | $ 256,000 | $ 263,000 | ||
Number of TDRs accounts | loan | 2 | 2 | ||
Non-performing TDRs | loan | 45 | 46 | ||
Number of non-performing TDRs accounts | loan | 1 | 1 | ||
Pass | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | $ 282,410,000 | $ 264,969,000 | ||
Special mention | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 1,012,000 | 1,817,000 | ||
Substandard | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 5,912,000 | 4,761,000 | ||
Doubtful | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 74,000 | 65,000 | ||
Consumer | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 14,453,000 | 16,112,000 | ||
Non-accrual | 122,000 | 185,000 | 336,000 | 403,000 |
Troubled debt restructures | 45,000 | |||
Troubled debt restructures | $ 45,000 | $ 46,000 | ||
Number of TDRs accounts | loan | 1 | 1 | ||
Non-performing TDRs | loan | 45 | 46 | ||
Number of non-performing TDRs accounts | loan | 1 | 1 | ||
Consumer | Pass | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | $ 14,119,000 | $ 15,823,000 | ||
Consumer | Special mention | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 187,000 | 77,000 | ||
Consumer | Substandard | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 146,000 | 188,000 | ||
Consumer | Doubtful | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 1,000 | 24,000 | ||
Residential Real estate | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 82,144,000 | 81,926,000 | ||
Non-accrual | 1,753,000 | 2,124,000 | 2,331,000 | 2,508,000 |
Residential Real estate | Pass | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 79,828,000 | 79,060,000 | ||
Residential Real estate | Special mention | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 215,000 | 384,000 | ||
Residential Real estate | Substandard | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 2,101,000 | 2,482,000 | ||
Indirect | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 101,181,000 | 85,186,000 | ||
Non-accrual | 129,000 | 88,000 | 87,000 | 193,000 |
Indirect | Pass | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 100,143,000 | 83,756,000 | ||
Indirect | Special mention | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 610,000 | 1,027,000 | ||
Indirect | Substandard | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 355,000 | 362,000 | ||
Indirect | Doubtful | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 73,000 | 41,000 | ||
Commercial | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 12,028,000 | 11,257,000 | ||
Non-accrual | 48,000 | |||
Troubled debt restructures | 211,000 | |||
Troubled debt restructures | $ 211,000 | $ 217,000 | ||
Number of TDRs accounts | loan | 1 | 1 | ||
Commercial | Pass | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | $ 11,817,000 | $ 11,038,000 | ||
Commercial | Special mention | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 2,000 | |||
Commercial | Substandard | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 211,000 | 217,000 | ||
Construction | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 3,472,000 | 3,536,000 | ||
Non-accrual | 310,000 | 318,000 | ||
Construction | Pass | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 3,472,000 | 3,218,000 | ||
Construction | Substandard | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 318,000 | |||
Commercial Real Estate | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 76,130,000 | 73,595,000 | ||
Non-accrual | 2,371,000 | 507,000 | $ 773,000 | $ 647,000 |
Commercial Real Estate | Pass | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 73,031,000 | 72,074,000 | ||
Commercial Real Estate | Special mention | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | 327,000 | |||
Commercial Real Estate | Substandard | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Total | $ 3,099,000 | $ 1,194,000 |
FAIR VALUE (Details)
FAIR VALUE (Details) | 6 Months Ended |
Jun. 30, 2018USD ($)loan | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Loans deemed to be impaired | $ 5,300,000 |
Specific reserve amount | 226,000 |
Impaired real estate loans | $ 5,000,000 |
Minimum | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Fair value of discount rate | 0.00% |
Maximum | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Fair value of discount rate | 16.00% |
Indirect | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Number of impaired loans classified as nonaccrual loans | loan | 22 |
Impaired loans includes nonaccrual, past due 90 days or more and still accruing | $ 168,000 |
Remaining impaired loan | 475,000 |
Specific reserve amount | $ 237,000 |
FAIR VALUE - Changes in the ass
FAIR VALUE - Changes in the assets subject to fair value measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | $ 87,314 | $ 89,349 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure | 93,149 | 93,025 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure | 87,859 | 89,463 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure | 5,290 | 3,562 |
Collaterized mortgage obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 22,018 | 23,514 |
Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 34,872 | 35,633 |
U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 1,486 | 1,493 |
Recurring | Collaterized mortgage obligations | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 22,018 | 23,514 |
Recurring | Collaterized mortgage obligations | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 22,018 | 23,514 |
Recurring | Agency mortgage-backed securities | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 27,003 | 25,229 |
Recurring | Agency mortgage-backed securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 27,003 | 25,229 |
Recurring | Municipal securities | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 34,872 | 35,633 |
Recurring | Municipal securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 34,872 | 35,633 |
Recurring | US Government Securities | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 1,935 | 3,480 |
Recurring | US Government Securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 1,935 | 3,480 |
Recurring | U.S. Treasury securities | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 1,486 | 1,493 |
Recurring | U.S. Treasury securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 1,486 | 1,493 |
Recurring | Interest rate swap | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 431 | |
Recurring | Interest rate swap | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Securities available for sale | 431 | |
Nonrecurring | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Maryland Financial Bank stock | 30 | 30 |
Impaired loans | 5,260 | 3,532 |
OREO | 114 | 114 |
Nonrecurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
OREO | 114 | 114 |
Nonrecurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Maryland Financial Bank stock | 30 | 30 |
Impaired loans | $ 5,260 | $ 3,532 |
FAIR VALUE - Estimated fair val
FAIR VALUE - Estimated fair values of the Company's financial instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Financial assets - Carrying Amount | ||
Cash and due from banks | $ 2,584 | $ 2,610 |
Interest-bearing deposits | 5,498 | 9,846 |
Federal funds sold | 197 | 149 |
Debt securities | 87,314 | 89,349 |
Investments in restricted stock | 1,443 | 1,232 |
Ground rents | 150 | 153 |
Loans, net | 287,124 | 269,023 |
Accrued interest receivable | 1,142 | 1,133 |
Cash value of life insurance | 7,780 | 8,713 |
Financial liabilities - Carrying Amount | ||
Deposits | 341,807 | 334,238 |
Short-term borrowings | 25,000 | 20,000 |
Accrued interest payable | 136 | 101 |
Unrecognized financial instruments: | ||
Commitments to extend credit | 33,796 | 19,109 |
Standby letters of credit | 1,025 | 71 |
Financial assets - Fair Value | ||
Cash and due from banks | 2,584 | 2,610 |
Interest-bearing deposits | 5,498 | 9,846 |
Federal funds sold | 197 | 149 |
Investment securities | 87,314 | 89,349 |
Investments in restricted stock | 1,443 | 1,232 |
Ground rents | 150 | 153 |
Loans, less allowance for credit losses | 285,394 | 275,819 |
Accrued interest receivable | 1,142 | 1,133 |
Cash value of life insurance | 7,780 | 8,713 |
Financial liabilities - Fair Value | ||
Deposits | 319,687 | 324,512 |
Short-term borrowings | 25,110 | 20,739 |
Accrued interest payable | 136 | 101 |
Unrecognized financial instruments: | ||
Commitments to extend credit | 33,796 | 19,109 |
Standby letters of credit | $ 1,025 | $ 71 |
FAIR VALUE - Fair value hierarc
FAIR VALUE - Fair value hierarchy of financial instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Financial assets - Carrying Amount | ||
Cash and cash equivalents | $ 8,279 | |
Loans receivable, net | 287,124 | $ 269,023 |
Cash value of life insurance | 7,780 | |
Financial liabilities - Carrying Amount | ||
Deposits | 341,807 | 334,238 |
Short-term debt | 25,000 | 20,000 |
Financial assets - Fair Value | ||
Loans receivable, net | 285,394 | 275,819 |
Financial liabilities - Fair Value | ||
Deposits | 319,687 | 324,512 |
Short-term debt | 25,110 | $ 20,739 |
Fair Value | ||
Financial assets - Fair Value | ||
Cash and cash equivalents | 7,780 | |
Loans receivable, net | 285,394 | |
Cash value of life insurance | 8,279 | |
Financial liabilities - Fair Value | ||
Deposits | 25,110 | |
Short-term debt | 319,687 | |
Fair Value | Level 1 | ||
Financial assets - Fair Value | ||
Cash value of life insurance | 8,279 | |
Fair Value | Level 2 | ||
Financial assets - Fair Value | ||
Cash and cash equivalents | 7,780 | |
Financial liabilities - Fair Value | ||
Deposits | 25,110 | |
Short-term debt | 319,687 | |
Fair Value | Level 3 | ||
Financial assets - Fair Value | ||
Loans receivable, net | $ 285,394 |
RECENT ACCOUNTING PRONOUNCEME38
RECENT ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
RECENT ACCOUNTING PRONOUNCEMENTS | |||||
Net unrealized (loss) gain on securities during the period | $ 15 | $ 507 | $ (1,576) | $ 549 | |
ASU 2018-02 | Scenario, Previously Reported | |||||
RECENT ACCOUNTING PRONOUNCEMENTS | |||||
Net unrealized (loss) gain on securities during the period | $ 100 |