Bank Owned Life Insurance

12 Months Ended

Dec. 31, 2015

Investments, All Other Investments [Abstract]

Bank Owned Life Insurance

Bank Owned Life Insurance

At December 31, 2015 and 2014 the Company had $39.2 million and $26.8 million, respectively of Bank-Owned Life Insurance (“BOLI”). The Company recorded non-interest income associated with the BOLI policies of $1.3 million, $914,000 and $758,000 for the years ending December 31, 2015, 2014 and 2013, respectively. The increase in the Company’s balance in 2015 by $12.4 million was primarily from the $11.3 million BOLI policies acquired from Independance Bank.

BOLI involves the purchasing of life insurance by the Company on a selected group of employees where the Company is the owner and beneficiary of the policies. BOLI is recorded as an asset at its cash surrender value. Increases in the cash surrender value of these policies, as well as a portion of the insurance proceeds received, are recorded in noninterest income and are not subject to income tax, as long as they are held for the life of the covered parties.